株探米国株
英語
エドガーで原本を確認する
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As filed with the Securities and Exchange Commission on March 13, 2025
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 20-F
o REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934
OR
x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2024
OR
o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
OR
o SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number: 1-14728
LATAM Airlines Group S.A.
(Exact name of registrant as specified in its charter)
LATAM Airlines Group S.A.
Republic of Chile
(Translation of registrant’s name into English) (Jurisdiction of incorporation or organization)
Presidente Riesco 5711, 20th Floor
Las Condes
Santiago, Chile
(Address of principal executive offices)
Andrés del Valle
Tel.: 56-2-2565-3844 E-mail: InvestorRelations@latam.com
Presidente Riesco 5711, 20th Floor
Las Condes
Santiago, Chile
(Name, telephone, e-mail and/or facsimile number and address of company contact person)
Securities registered or to be registered pursuant to Section 12(b) of the Act:
None
Securities registered or to be registered pursuant to Section 12(g) of the Act:
Title of each class:
Trading Symbol
 Name of each exchange on which registered:
American Depositary Shares (as evidenced by American Depositary Receipts), each representing 2,000 shares of Common Stock, without par value
“LTM”
 New York Stock Exchange
Common Stock, without par value “LTM” Santiago Stock Exchange
Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:
None
Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report: 604,437,877,587.
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes x No o
If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. Yes o No x
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):
Large Accelerated filer x
Accelerated filer o
Non-Accelerated filer o
Emerging Growth Company o
If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
†The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. x
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. o
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). o
Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:
U.S. GAAP o
International Financial Reporting Standards as issued by the International Accounting Standards Board x
Other o
If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow:
Item 17 o Item 18 o
If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x
Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes x No o


TABLE OF CONTENTS
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PRESENTATION OF INFORMATION
Throughout this annual report on Form 20-F, we make numerous references to “LATAM.” Unless the context indicates otherwise, references to the “Company,” LATAM and “LATAM Airlines Group” pertain to LATAM Airlines Group S.A., the unconsolidated operating entity, and references to “LATAM group,” “we,” “us,” “our,” or the “group” refer to LATAM Airlines Group S.A. and its consolidated affiliates, including: Transporte Aéreo S.A. (“LATAM Airlines Chile”), LATAM Airlines Perú S.A. (f/k/a LAN Perú S.A, “LATAM Airlines Peru”), LATAM-Airlines Ecuador S.A. (f/k/a Aerolane Líneas Aéreas Nacionales del Ecuador S.A., “LATAM Airlines Ecuador”), LAN Argentina S.A. (“LATAM Airlines Argentina,” previously Aero 2000 S.A.), Aerovías de Integración Regional S.A. (“LATAM Airlines Colombia”), TAM S.A. (“TAM”), TAM Linhas Aéreas S.A. (“LATAM Airlines Brazil”), Transporte Aéreos del Mercosur S.A. (“LATAM Paraguay”), LAN Cargo S.A. (“LATAM Cargo”) and its two regional affiliates: Linea Aerea Carguera de Colombia S.A. (“LANCO” or “LATAM Cargo Colombia”) in Colombia and Aerolinhas Brasileiras S.A. (“ABSA” or LATAM Cargo Brazil”) in Brazil. Other references to “LATAM”, as the context requires, are to the LATAM brand which was launched in 2016 and brings together, under one internationally recognized name, all of the affiliate brands such as LATAM Airlines Chile, LATAM Airlines Peru, LATAM Airlines Argentina, LATAM Airlines Colombia, LATAM Airlines Ecuador S.A. and LATAM Airlines Brazil.
LATAM Airlines Argentina continues to be a consolidated affiliate, however, on June 17, 2020, it announced the indefinite cessation of its passenger and cargo operations.
References to “LAN” are to LAN Airlines S.A., currently known as LATAM Airlines Group S.A., and its consolidated affiliates, in connection with circumstances and facts occurring prior to the completion date of the merger between LAN Airlines S.A. and TAM S.A. See “Item 4. Information on the Company-A. History and Development of the Company.”
In this annual report on Form 20-F, unless the context otherwise requires, references to “TAM” are to TAM S.A., and its consolidated affiliates, including TAM Linhas Aereas S.A. (“TLA”), which does business under the name “LATAM Airlines Brazil”, Fidelidade Viagens e Turismo Limited (“TAM Viagens”) and Transportes Aéreos Del Mercosur S.A. (“TAM Mercosur”).
LATAM Airlines Group and the majority of our affiliates maintain accounting records and prepare financial statements in U.S. dollars. Some of our affiliates, however, maintain their accounting records and prepare their financial statements in Chilean pesos, Argentinean pesos, Colombian pesos or Brazilian real. In particular, TAM maintains its accounting records and prepares its financial statements in Brazilian real. Our audited consolidated financial statements include the results of these affiliates translated into U.S. dollars. International Financial Reporting Standards, as issued by the International Accounting Standards Board (“IFRS Accounting Standards”), require assets and liabilities to be translated at period-end exchange rates, while revenue and expense accounts are translated at each transaction date, although a monthly rate may also be used if exchange rates do not vary widely.
In this annual report on Form 20-F, all references to “Chile” are references to the Republic of Chile. This annual report contains conversions of certain Chilean peso and Brazilian real amounts into U.S. dollars at specified rates solely for the convenience of the reader. These conversions should not be construed as representations that the Chilean peso and the Brazilian real amounts actually represent such U.S. dollar amounts or could be converted into U.S. dollars at the rate indicated. Unless we specify otherwise, all references to “$”, “US$,” “U.S. dollars” or “dollars” are to United States dollars, references to “pesos,” “Chilean pesos” or “Ch$” are to Chilean pesos. References to “real,” “Brazilian real” or “R$” are to Brazilian real, and references to “UF” are to Unidades de Fomento, a daily indexed Chilean peso-denominated monetary unit that takes into account the effect of the Chilean inflation rate. Unless we indicate otherwise, the U.S. dollar equivalent for information in Chilean pesos used in this annual report and in our audited consolidated financial statements is based on the “dólar observado” or “observed” exchange rate published by Banco Central de Chile (the “Central Bank of Chile”) on December 31, 2024, which was Ch$996.46 = US$1.00. The observed exchange rate on January 31, 2025, was Ch$984.22 = US$1.00. Unless we indicate otherwise, the U.S. dollar equivalent for information in Brazilian real used in this annual report and in our audited consolidated financial statements is based on the average “bid and offer rate” published by Banco Central do Brasil (the “Central Bank of Brazil”) on December 31, 2024, which was R$6.19 = US$1.00. The observed exchange rate on January 31, 2025, was R$5.83 = US$1.00. The Federal Reserve Bank of New York does not report a noon buying rate for Chilean pesos or Brazilian real. Unless we indicate otherwise, the Chilean peso equivalent for information in UF used in this annual report and in our audited consolidated financial statements is based on the UF rate published by Central Bank of Chile on December 31, 2024, which was Ch$38,416.69 = UF1.00 or US$38.55 = UF1.00 (based on an exchange rate of Ch$996.46 = US$1.00).

v

LATAM has a single series of shares of Common Stock, without par value, listed on Chilean Stock Exchange and American Depositary Shares (“ADSs”) evidenced by American Depositary Receipts, each representing 2,000 shares of Common Stock, that were relisted on the New York Stock Exchange (“NYSE”) on July 25, 2024, following its delisting in June 2020 after entering into the Chapter 11 restructuring process (“Chapter 11”). The relisting occurred following the pricing of a public secondary offering by certain of the LATAM’s shareholders to sell 19,000,000 ADSs at a price of U.S.$24.00 per ADS (the “re-IPO”). The ADSs trade on the NYSE under the ticker symbol “LTM.” On August 28, 2024, 1,773,026 additional ADSs were sold by the Company’s shareholders pursuant to the underwriters’ overallotment option. The Company did not receive any proceeds from the sale of ADSs by the selling shareholders.
We have rounded percentages and certain U.S. dollar, Chilean peso and Brazilian real amounts contained in this annual report for ease of presentation. Any discrepancies in any table between totals and the sums of the amounts listed are due to rounding.
LATAM’s audited consolidated financial statements for the periods ended December 31, 2022, 2023 and 2024 were prepared in accordance with IFRS Accounting Standards.
This annual report contains certain terms that may be unfamiliar to some readers. You can find a glossary of these terms on page ix of this annual report.
vi

FORWARD-LOOKING STATEMENTS
This annual report contains forward-looking statements. Such statements may include words such as “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe,” “forecast” or other similar expressions. Forward-looking statements, including statements about our beliefs and expectations, are not statements of historical facts. These statements are based on current plans, estimates and projections, and, therefore, you should not place undue reliance on them. Forward-looking statements involve inherent risks and uncertainties. We caution you that a number of important factors could cause actual results to differ materially from those contained in any forward-looking statement. These factors include, but are not limited to:
•conflicting interests among our major shareholders;
•the factors described in “Item 3. Key Information-Risk Factors”;
•our ability to service our debt and fund our working capital requirements;
•future demand for passenger and cargo air services in Chile, Brazil, other countries in Latin America and the rest of the world;
•maintenance of our customer relationships due to potential changes in customers’ perception of the company, our brands and services in the future;
•the state of the Chilean, Brazilian, other Latin American and world economies and their impact on the airline industry;
•the effects of competition in the airline industry;
•future terrorist incidents, cyberattacks or related activities affecting the airline industry;
•future outbreak of diseases, or the spread of already existing diseases, affecting travel behavior and/or exports;
•natural disasters affecting travel behavior and/or exports;
•the relative value of the Chilean peso and other Latin American currencies compared to other world currencies;
•the impact of geopolitical risk on the price of fuel, exchange rates, and demand for travel;
•inflation;
•competitive pressures on pricing;
•our capital expenditure plans;
•changes in labor costs, maintenance costs and insurance premiums;
•fluctuation of crude oil prices and its effect on fuel costs;
•cyclical and seasonal fluctuations in our operating results;
•defects or mechanical problems with our aircraft;
•problems with suppliers of aircraft, aircraft engines and engine parts;
•our ability to successfully implement our growth strategy;
•increases in interest rates; and
•changes in regulations, including regulations related to access to routes in which the group operates and environmental regulations.
vii

Forward-looking statements speak only as of the date they are made, and we undertake no obligation to publicly update any of them, whether in light of new information, future events or otherwise. You should also read carefully the risk factors described in “Item 3. Key Information-Risk Factors.”
viii

GLOSSARY OF TERMS
The following terms, as used in this annual report, have the meanings set forth below.
Consolidated Affiliates of LATAM:  
“ABSA or LATAM Cargo Brazil” Aerolinhas Brasileiras S.A., incorporated in Brazil.
“LANCO” or "LATAM Cargo Colombia" Línea Aérea Carguera de Colombia S.A., incorporated in Colombia.
“LATAM Airlines Argentina” LAN Argentina S.A., incorporated in Argentina.
“LATAM Airlines Brazil” TAM Linhas Aéreas S.A., incorporated in Brazil.
“LATAM Airlines Chile” Transporte Aéreo S.A., incorporated in Chile.
“LATAM Airlines Paraguay” Transporte Aéreos del Mercosur S.A., incorporated in Paraguay.
“LATAM Airlines Colombia” Aerovías de Integración Regional S.A., incorporated in Colombia.
“LATAM Airlines Ecuador” LATAM-Airlines Ecuador S.A. (f/k/a Aerolane Líneas Aéreas Nacionales del Ecuador S.A.), incorporated in Ecuador.
“LATAM Airlines Peru” LATAM Airlines Perú S.A. (f/k/a LAN Perú S.A.), incorporated in Perú.
“LATAM Cargo” LAN Cargo S.A., incorporated in Chile.
“TAM” TAM S.A., incorporated in Brazil.
Capacity Measurements:  
“available seat kilometers” or “ASKs” The sum, across our network, of the number of seats made available for sale on each flight multiplied by the kilometers flown by the respective flight.
“available ton kilometers” or “ATKs” The sum, across our network, of the number of tons available for the transportation of revenue load (cargo) on each flight multiplied by the kilometers flown by the respective flight.
Traffic Measurements:
“revenue passenger kilometers” or “RPKs” The sum, across our network, of the number of revenue passengers on each flight multiplied by the number of kilometers flown by the respective flight.
“revenue ton kilometers” or “RTKs” The sum, across our network, of the load (cargo) in tons on each flight multiplied by the kilometers flown by the respective flight.
“traffic revenue” Revenue from passenger and cargo operations.
ix

Yield Measurements:
“cargo yield” Revenue from cargo operations divided by RTKs.
“passenger yield” Revenue from passenger operations divided by RPKs.
Load Factors:
“cargo load factor” RTKs expressed as a percentage of ATKs.
“passenger load factor” RPKs expressed as a percentage of ASKs.
Other:
“Airbus A320-Family Aircraft” The Airbus A319, Airbus A320, and Airbus A321 models of aircraft, including both ceo and neo variants.
“m²” Square meters.
“ton” A metric ton, equivalent to 2,204.6 pounds.
“utilization rates” The actual number of service hours per aircraft per operating day.
“operating expenses” Operating expenses, which are calculated in accordance with IFRS Accounting Standards, comprise the sum of the line items “cost of sales” plus “distribution costs” plus “administrative expenses” plus “other operating expenses,” as shown on our consolidated statement of comprehensive income. These operating expenses include: wages and benefits, fuel, depreciation and amortization, commissions to agents, aircraft rentals, other rental and landing fees, passenger services, aircraft maintenance and other operating expenses.
“Diio Mi” Data In Intelligence Out Market Intelligence.
“CO2” Carbon Dioxide Gas
x

PART I
ITEM 1 IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS
Not applicable.
ITEM 2 OFFER STATISTICS AND EXPECTED TIMETABLE
Not applicable.
ITEM 3 KEY INFORMATION
A.Reserved
B.Capitalization and Indebtedness
Not applicable.
C.Reasons for the Offer and Use of Proceeds
Not applicable.
D.Risk Factors
The following risk factors, and those important risk factors described in other reports we submit to or file with the Securities and Exchange Commission (“SEC”), could affect our actual results and could cause our actual results to differ materially from those expressed in any forward-looking statements made by us or on our behalf.

In order to assess the risks outlined in the risk factors, we have a comprehensive risk model that encompasses various aspects of our business and it is reviewed quarterly. This risk model serves as a framework to identify, assess and mitigate potential risks that may impact our organization. We understand that risk landscapes evolve, and therefore, we conduct continuous reviews of our risk model to ensure its relevance and effectiveness in addressing emerging risks.

In particular, as we are a non-U.S. company, there are risks associated with investing in our ADSs that are not typical for investments in the shares of U.S. companies. Prior to making an investment decision, you should carefully consider all of the information contained in this document, including those described below.

Risk Factors Summary

The following is a summary of the principal risks that could adversely affect our business, operations and financial results.

Risks Relating to our Business
•High levels of competition in the airline industry and the consolidation or mergers of competitors in the markets in which the group operates, may adversely affect the level of operations.
•Some of our competitors may receive external support, which could adversely impact our competitive position.
•The group’s business and results of operations may be adversely affected if we fail to obtain and maintain routes, suitable airport access, slots and other operating permits.
•It cannot be assured that in the future we will have access to adequate facilities and landing rights necessary to achieve our expansion plans.
•The group depends on strategic alliances, commercial relationships and regulatory approvals for international strategic growth, and its business could be adversely affected if any of these are disrupted or unattainable.
•A failure to successfully implement the group’s strategy or a failure to adjust such strategy to the current economic situation would harm the group’s business.
•LATAM group may experience difficulty finding, training and retaining employees, which can lead to increased costs and impair our ability to execute strategy and implement operational initiatives.
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•If we lose senior management and other key employees and they are not replaced by individuals with comparable skills, or we otherwise fail to maintain our Company's culture, our business and results of operations could be materially adversely affected.
•Our business may experience adverse consequences due to collective action by LATAM group employees or third-party employees, including disruptions from strikes or other labor-related actions.
•We rely on maintaining a high aircraft utilization rate to increase our revenues and absorb our fixed costs, which makes us especially vulnerable to delays.
•Our operations are subject to fluctuations in the supply and cost of jet fuel, which could adversely impact our business.
•We are exposed to increases in landing fees and other airport service charges that could adversely affect our margins and competitive position.
•A significant portion of our cargo revenue comes from relatively few product types and may be impacted by events affecting their production, trade or demand.
•An accumulation of ticket refunds could have an adverse effect on our financial results.
•If we are unable to incorporate leased aircraft, including both operating leases and financial leases, into the fleet at acceptable rates and terms in the future, our business could be adversely affected.
•Increases in insurance costs and/or significant reductions in coverage could harm our financial condition and results of operations.
•Increases in our labor costs, which constitute a substantial portion of our total operating expenses, could directly impact our earnings.
•We face reputational risks related to the use of social media.
•We face reputational risks related to misinformation and disinformation.

Safety & Operational Risks
•We depend on a limited number of suppliers for certain aircraft and engine parts. LATAM group flies and depends on Airbus and Boeing aircraft, and our business could be adversely affected if we do not receive timely deliveries of aircraft, if aircraft from these suppliers become unavailable or if the public develops a negative perception of the aircraft we use in our operations.
•Problems with air traffic control systems or other technical failures could interrupt our operations and have a material adverse effect on our business.
•Losses and liabilities in the event of an accident involving one or more of our aircraft could materially affect our business.
•Prolonged technical and operational issues with the airport infrastructure in cities where we have a significant presence may have a material adverse effect on our operations.
•Our business may be adversely affected by a downturn in the airline industry caused by exogenous events that affect travel behavior or increase costs, such as outbreak of disease, weather conditions and natural disasters, war or terrorist attacks.
•The impacts of a pandemic and the efforts to mitigate the spread of a virus may adversely impact the group’s business, operations and financial results.
•Disruptions or security breaches of our information technology infrastructure or systems could interfere with the operations, compromise passenger or employee information, and expose us to liability, which may adversely affect our business and reputation.

Risks Relating to the Airline Industry and the Countries in Which the Group Operates
•Because our performance is heavily dependent on economic conditions in the countries in which the group does business, negative economic conditions in those countries could adversely impact the group’s business and results of operations.
•Latin American governments have exercised and continue to exercise significant influence over their economies.
•Political instability and social unrest in Latin America may adversely affect our business.
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•Because our business relies extensively on third-party service providers, failure of these parties to perform as expected, or interruptions in our relationships with these providers or in their provision of services to us, could have an adverse effect on our financial position and results of operations.
•Our financial results are exposed to foreign currency fluctuations.

Environmental and Regulatory Risks
•Our operations are subject to local, national and international environmental regulations; costs of compliance with applicable regulations, or the consequences of noncompliance, could adversely affect our results, our business or our reputation.
•Our business may be adversely affected by the consequences of climate change.
•The business is highly regulated and changes in the regulatory environment in the different countries may adversely affect our business and results of operations.
•We are subject to anti-corruption, anti-bribery, anti-money laundering and antitrust laws and regulations in Chile, Brazil, Peru, the United States and in the various other countries in which we operate. Violations of any such laws or regulations could have a material adverse impact on our reputation, results of operations and financial condition.
•We are subject to risks relating to litigation and administrative proceedings that could adversely affect our business and financial performance in the event of an unfavorable ruling.
•Rapid technological advancements and digitalization could generate risks in implementation and regulatory control.
•Our reputation and brand could be adversely impacted if we fail to make progress towards achieving our environmental sustainability goals.

Risks Related to our Indebtedness
•We have substantial liquidity needs and continue to pursue various financing options. Our business may be adversely affected if we are unable to service our debt or meet our future financing requirements.
•We have significant exposure to SOFR and other floating interest rates; increases in interest rates will increase our financing cost and may have adverse effects on our financial condition and results of operations.
•Our debt agreements contain various affirmative, negative and financial covenants, which could limit our ability to conduct our business. A breach of certain negative covenants could also trigger an event of default and acceleration of our indebtedness.

Risks Relating to our Common shares and ADRs
•Our major shareholders may have interests that differ from those of ADSs holders.
•The market perception of a secondary offering could create downward pressure on the market price of our common shares and ADRs.
•Holders of ADSs may be adversely affected by their limited voting rights.
•Holders of ADSs may be adversely affected by currency devaluations and foreign exchange fluctuations.
•Future changes in Chilean foreign investment controls and withholding taxes could negatively affect non-Chilean residents that invest in our shares.
•Our ADS holders may not be able to exercise preemptive rights in certain circumstances.
•We are not required to disclose as much information to investors as a U.S. issuer is required to disclose and, as a result, you may receive less information about us than you would receive from a comparable U.S. company.







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Risks Relating to our Business

High levels of competition in the airline industry and the consolidation or mergers of competitors in the markets in which the group operates, may adversely affect the level of operations.

Our business, financial condition and results of operations could be adversely affected by high levels of competition within the industry, particularly the entrance of new competitors into the markets in which the group operates, and the potential implementation of aggressive pricing strategies by competitors. Airlines compete primarily over fare levels, frequency and dependability of service, brand recognition, passenger amenities (such as frequent flyer programs) and the availability and convenience of other passenger or cargo services. New and existing airlines (and companies providing ground cargo or passenger transportation) could enter our markets and compete with us on any of these bases, including by offering lower prices, more attractive services or increasing their route offerings in an effort to gain greater market share. For more information regarding our main competitors, see “Item 4. Information of the Company—Business Overview—Passenger Operations-International Passenger Operations” and “Item 4. Information of the Company—Business Overview—Passenger Operations—Business Model for Domestic Operations.”

Low-cost carriers have an important impact on the industry’s revenues given their low unit costs. Lower costs allow low-cost carriers to offer inexpensive fares which, in turn, allow price-sensitive customers to fly or to shift from legacy carriers to low-cost carriers. In past years, we have seen interest in the development of the low-cost model throughout Latin America. For example, Sky Airline and JetSmart are main competitors in the Chilean and Peruvian markets and both have low-cost business models. In 2024, JetSmart further expanded its footprint in the region by entering the domestic market in Colombia, a step forward in its growth strategy, and intensifying competition with local carriers. Avianca has also adapted its business model by incorporating elements of a low-cost carrier, while retaining its network, loyalty program and strategic partnerships. Additionally, some airlines have pursued strategies of consolidation through alliances or mergers with legacy carriers. Examples include the creation of Abra Group (a partnership between Avianca and Gol), the American Airlines acquisition of a minority stake in JetSmart in December 2022, and the recent signing of a non-binding memorandum of understanding between Abra Group and Azul to explore a potential merger.

In the cargo business, companies such as Maersk, CMA CGM, and MSC have expanded into air transportation, partly due to the COVID-19 pandemic and the scarcity of containers. CMA CGM and Air France-KLM officially launched their long-term strategic air cargo partnership in April 2023, combining their complementary cargo networks and freighter capacity. However, this partnership was terminated by mutual agreement in January 2024, without changes to CMA CGM’s 9% stake in Air France-KLM. Additionally, MSC Air Cargo commenced operations in December 2022, with flights operated by Atlas Air. These consolidations, mergers, or new alliances might continue to appear, increasing the concentration and levels of competition.

Moreover, as a result of the competitive environment, there may be further consolidation in the Latin American and global airline industry, whether by means of acquisitions, joint ventures, partnerships or strategic alliances. We cannot predict the effects of further consolidation on the industry. Furthermore, consolidation in the airline industry and changes in international alliances will continue to affect the competitive landscape in the industry and may result in the development of airlines and alliances with increased financial resources, more extensive global networks and reduced cost structures.

Some of our competitors may receive external support, which could adversely impact our competitive position.

Some of our competitors may receive support from external sources, such as their national governments, which may be unavailable to us. Support may include, among others, subsidies, financial aid or tax waivers. This support could place the group at a competitive disadvantage and adversely affect operations and financial performance. For example, Aerolineas Argentinas has historically been government subsidized. Additionally, during the COVID-19 pandemic, some competitors on long-haul routes (such as American Airlines, Delta Airlines, Southwest, United and Airfrance-KLM) received government support. More recently, in January 2025, Azul and Gol entered into agreements with the Brazilian government to reduce their tax debts by approximately 42%. This support could place us at a competitive disadvantage and adversely affect our business, financial condition and results of operations

The group’s business and results of operations may be adversely affected if we fail to obtain and maintain routes, suitable airport access, slots and other operating permits.

LATAM group’s business depends upon our access to key routes and airports. Bilateral aviation agreements between countries, open skies laws and local aviation approvals frequently involve political and other considerations outside of our control.
4

The group’s operations could be constrained by any delay or inability to gain access to key routes or airports, including:

•limitations on our ability to transport more passengers;
•the imposition of flight capacity restrictions;
•the inability to secure or maintain route rights in local markets or under bilateral agreements; or
•the inability to maintain our existing slots and obtain additional slots.

The group operates numerous international routes subject to bilateral agreements, as well as domestic flights within Chile, Peru, Brazil, Ecuador and Colombia, subject to local route and airport access approvals. See “Item 4. Information on the Company—Business Overview—Regulation.”

There can be no assurance that existing bilateral agreements with the countries in which the group’s companies are based and permits from foreign governments will continue to be in effect. A modification, suspension or revocation of one or more bilateral agreements could have a material adverse effect on our business, financial condition and results of operations. The suspension of our permission to operate at certain airports, destinations or slots, or the imposition of other sanctions could also have a material adverse effect on our business. A change in the administration of current laws and regulations or the adoption of new laws and regulations in any of the countries in which the group operates that restrict our routes, airports or other access may have a material adverse effect on our business, financial condition and results of operations.

It cannot be assured that in the future we will have access to adequate facilities and landing rights necessary to achieve our expansion plans.

Certain airports that we currently serve or plan to serve in the future may have capacity constraints and impose various restrictions. These restrictions include limitations on takeoff and landing slots during specific periods of the day and restrictions on aircraft noise levels. We cannot guarantee that our group will be able to secure an adequate number of slots, gates, and other facilities at airports to expand our services in line with our growth strategy. Additionally, airports that are currently not subject to capacity constraints may face such constraints in the future.

Furthermore, airlines must use their slots regularly and promptly, or they risk losing them to other carriers. If slots or other airport resources are unavailable or restricted in any way, we may need to modify schedules, alter routes, or reduce aircraft utilization. It is also possible that aviation authorities in the countries where our group operates may change the rules for assigning takeoff and landing slots. An example of this is the São Paulo airport (Congonhas), where slots previously operated by Avianca Brazil were reassigned primarily to Azul in 2019, after the Agência Nacional de Aviação Civil in Brazil (ANAC) approved new rules for slot distribution. Likewise, on June 7, 2022, ANAC passed Resolution No. 682, by which the ANAC approved new regulation for airport coordination and defined the rules for allocating and monitoring the use of airport infrastructure through the use of slots (e.g., coordination of arrival and departure times) at coordinated airports. It also updated the parameters applicable to the airports of Congonhas, Guarulhos (Governador André Franco Montoro International Airport), Rio de Janeiro (Santos Dumont Airport), Recife (Gilberto Freyre International Airport) and Pampulha (Carlos Drummond de Andrade Airport). The occurrence of any of these scenarios involving LATAM group operations could have a negative financial impact on our business.

In October 2023, LATAM and JetSmart disputed the allocation of frequencies on the Santiago to Lima route. During a public bidding process conducted by the Chilean Junta de Aeronáutica Civil (JAC), LATAM secured 10 out of 13 available frequencies, while Sky Airline obtained the remaining three. JetSmart, which previously operated 14 frequencies on this route, lost nine of them in the bidding. JetSmart criticized the process, arguing that the allocation favored airlines with dominant market positions and raised concerns about potential frequency hoarding. In response, LATAM contended that JetSmart’s failure to secure frequencies was due to its own strategic choices and not the bidding mechanism. The dispute was brought by JetSmart to the Tribunal de Defensa de la Libre Competencia (Chilean Antitrust Court or “TDLC” by its Spanish name), which, in January 2025, concluded that the bidding process did not violate antitrust laws and adhered to existing regulations.

Moreover, we cannot guarantee that airports without current restrictions will not implement restrictions in the future, or that existing restrictions will not become more burdensome. These restrictions may limit our ability to continue providing services or expanding our operations at these airports.


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The group depends on strategic alliances, commercial relationships and regulatory approvals for international strategic growth, and its business could be adversely affected if any of these are disrupted or unattainable.

LATAM and its affiliates maintain numerous alliances and commercial relationships across the jurisdictions in which they operate. These partnerships enable the group to enhance its network and offer customers services that might otherwise be unavailable. However, if any of these alliances or relationships deteriorate, are terminated, or fail to provide the anticipated benefits, the group’s business, financial condition, and results of operations could be adversely affected.

Furthermore, the group’s international strategic growth plans rely, in part, on receiving regulatory approvals in the countries where it seeks to expand operations through joint business agreements. There is a risk that the group may not obtain necessary approvals, while competitors might, allowing them to compete for key routes and potentially erode the group’s market share. This could adversely impact the group’s ability to achieve its growth objectives and financial results. No assurances can be given regarding the benefits, if any, that might be derived from such agreements.

A failure to successfully implement the group’s strategy or a failure to adjust such strategy to the current economic situation would harm the group’s business.

We have developed a strategic plan centered on connecting Latin America with itself and the world through a network of passenger and cargo transportation. Our strategy is built on delivering unmatched customer experiences, fostering sustainability and driving innovation, all while maintaining a balance between economic growth, operational efficiency, environmental care and social well-being.

To achieve these goals, we focus on offering a wide route network that combines competitive pricing with seamless connectivity across the Americas and beyond. Our approach integrates passenger segmentation and personalized services, ensuring accessibility for a broader audience while meeting the expectations of premium customers. Customer satisfaction remains at the core of our efforts, supported by cutting-edge digital solutions that create a safe and reliable travel experience.

Moreover, we are committed to sustainability and social responsibility, integrating environmental and social practices into our operations. We lead efforts in environmental management, climate change and circular economy, ensuring a positive impact on the regions we serve. We have been recognized globally, including our inclusion in the Dow Jones Sustainability Index.

Difficulties in implementing our strategy may adversely affect the group’s business and results of operation.

LATAM group may experience difficulty finding, training and retaining employees, which can lead to increased costs and impair our ability to execute strategy and implement operational initiatives.

The airline industry is labor intensive. We employ a large number of pilots, flight attendants, maintenance technicians and other operating and administrative personnel, such as specialized technology personnel. The airline industry has, from time to time, experienced a shortage of qualified personnel, especially pilots and maintenance technicians, which has somewhat intensified during the recovery phase of air traffic following the peak of the pandemic. Should turnover of employees, particularly pilots and maintenance technicians, sharply increase, our training costs will be significantly higher. LATAM group cannot assure that it will be able to recruit, train and retain the managers, pilots, technicians and other qualified employees that are needed to continue the current operations or replace departing employees. An increase in turnover or failure to recruit, train and retain qualified employees at a reasonable cost could materially adversely affect the business, financial condition and results of operations. A loss of key personnel or material erosion of employee morale could impair the ability to execute strategy and implement operational initiatives, thereby adversely affecting the group.

If we lose senior management and other key employees and they are not replaced by individuals with comparable skills, or we otherwise fail to maintain our Company’s culture, our business and results of operations could be materially adversely affected.

We are dependent on the experience and industry knowledge of our officers and other key employees to design and execute our business plans. If we experience a substantial turnover in our leadership and other key employees and we are not able to replace these persons with individuals with comparable skills, or we otherwise fail to maintain our Company’s culture, our performance could be materially adversely impacted.
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Furthermore, we may be unable to attract and retain additional qualified senior management and other key personnel as needed in the future.

Our business may experience adverse consequences due to collective action by LATAM group employees or third-party employees, including disruptions from strikes or other labor-related actions.

As of December 31, 2024, approximately 46% of the group’s employees, including administrative personnel, cabin crew, flight attendants, pilots and maintenance technicians are members of unions and have contracts and collective bargaining agreements which expire on a regular basis. The business, financial condition and results of operations could be materially adversely affected by a failure to reach agreement with any labor union representing such employees or by an agreement with a labor union that contains terms that are not in line with expectations or that prevent the group from competing effectively with other airlines. For further information regarding the unions representing employees in each country in which the group operates and where we have established collective bargaining agreements, see “Item 6. Directors, Senior Management and Employees—Employees—Labor Relations.”

Certain employee groups such as pilots, flight attendants, mechanics and our airport personnel have highly specialized skills. As a consequence, actions by these groups, such as strikes, walk-outs or stoppages, could severely disrupt operations and adversely impact our operating and financial performance, as well as our image.

A strike, work interruption or stoppage, or any prolonged dispute with employees who are represented by any of these unions could have an adverse impact on operations. These risks are typically exacerbated during periods of renegotiation with the unions, which typically occurs every two to four years depending on the jurisdiction and the union.

Any renegotiated collective bargaining agreement could feature significant wage increases and a consequent increase in our operating expenses. Any failure to reach an agreement during negotiations with unions may require us to enter into arbitration proceedings, use financial and management resources, and potentially agree to terms that are less favorable to us than our existing agreements. Employees who are not currently members of unions may also form new unions that may seek further wage increases or benefits.

In addition to actions by LATAM group employees, labor disputes involving third-party employees could also impact our operations. For instance:

On September 12, 2024, workers at Santiago’s Arturo Merino Benítez International Airport in Chile initiated a strike following failed negotiations with the airport’s concessionaire, Nuevo Pudahuel. The strike lasted one day, and workers mainly requested salary adjustments and increased meal allowances. The workers and Nuevo Pudahuel were able to reach an agreement on the following day.

On October 9, 2024, air traffic controllers employed by NAV Brasil planned a nationwide strike to demand an 8.5% salary adjustment. Although the strike was scheduled to last one day, it was cancelled after a judicial ruling from the Superior Labor Court, which imposed heavy fines for any disruptions. The incident intensified labor tensions within the Brazilian aviation sector.

On November 15, 2024, Chile’s Dirección General de Aviación Civil (“DGAC”) employees initiated an indefinite nationwide strike over unpaid bonuses. The strike lasted three days before negotiations resumed, causing widespread delays and cancellations across Chilean airports. The disruption significantly impacted flight operations and emphasized ongoing labor disputes in the region.

While LATAM group has established protocols to manage these types of situations, there is no guarantee that we will always be able to reach mutually beneficial agreements in future disputes with employees, unions or third parties. Any prolonged disputes or disruptions could materially affect our operations, financial performance and market position.

We rely on maintaining a high aircraft utilization rate to increase our revenues and absorb our fixed costs, which makes us especially vulnerable to delays.

Generally, a key element of our strategy is to maintain a high daily aircraft utilization rate, which measures the number of hours we use our aircraft per day. High daily aircraft utilization allows us to maximize the amount of revenue we generate from our aircraft and absorb the fixed costs associated with our fleet and is achieved, in part, by reducing turnaround times at airports and developing schedules that enable us to increase the average hours flown per day.
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Our rate of aircraft utilization could be adversely affected by a number of different factors that are beyond our control, including air traffic and airport congestion, adverse weather conditions, unanticipated maintenance and delays by third-party service providers relating to matters such as fueling, catering and ground handling. If aircraft fall behind schedule, the resulting delays could cause a disruption in our operating performance and have a financial impact on our results.

Our operations are subject to fluctuations in the supply and cost of jet fuel, which could adversely impact our business.

Higher jet fuel prices could have a materially adverse effect on our business, financial condition and results of operations. Jet fuel costs have historically accounted for a significant amount of our operating expenses, and accounted for 34.5% of our total costs of sales in 2024. For additional information, see “Item 11. Quantitative and Qualitative Disclosures about Market Risk—Risk of Fluctuations in Fuel Prices.” Both the cost and availability of fuel are subject to many economic and political factors and events that we can neither control nor predict, including international political and economic circumstances such as the political instability in major oil-exporting countries.

Any fuel supply shortage, could result in higher fuel prices or reductions in scheduled airline services. In August 2024, an electrical failure at Ecopetrol (Colombia’s state-owned company) refinery in Cartagena caused a significant aviation fuel shortage. This specific event led to operational challenges, including flight cancellations at major airports, as airlines struggled to manage the reduced supply. Ecopetrol implemented contingency measures to address this shortage, including importing aviation fuel, but supply constraints persisted for weeks, underscoring the vulnerability of airline operations to such disruptions.

Other factors, such as production shortfalls by the Organization of the Petroleum Exporting Countries (“OPEC”), disruptions from severe weather or natural disasters, labor actions (e.g., the 2018 trucking strike in Brazil), or geopolitical conflicts like the unrest in the Middle East or the conflict in Ukraine, could similarly impact fuel prices and availability.

We cannot ensure that we would be able to offset any increases in the price of fuel. Additionally, lower fuel prices may result in lower fares through the reduction or elimination of fuel surcharges. We have entered into fuel hedging arrangements, but there can be no assurance that such arrangements will be adequate to protect us from an increase in fuel prices in the near future or in the long term. See “Item 11. Quantitative and Qualitative Disclosures About Market Risk—Risk of Fluctuations in Fuel Prices.”

We are exposed to increases in landing fees and other airport service charges that could adversely affect our margins and competitive position.

The group must pay fees to airport operators for the use of their facilities. Any substantial increase in airport charges, including at Guarulhos International Airport in São Paulo, Jorge Chavez International Airport in Lima or Comodoro Arturo Merino Benitez International Airport in Santiago, among others, could have a material adverse impact on our results of operations. Passenger taxes and airport charges have increased substantially in recent years. We cannot assure that the airports in which the group operates will not increase or maintain high passenger taxes and service charges in the future. Any such increases could have an adverse effect on our financial condition and results of operations.

A significant portion of our cargo revenue comes from relatively few product types and may be impacted by events affecting their production, trade or demand.

The group’s cargo demand, especially from Latin American exporters, is concentrated in a small number of product categories, such as exports of fish, shell fish and fruit from Chile, asparagus from Peru and fresh flowers from Ecuador and Colombia. Similarly, import markets play a key role in our cargo operations, with demand for products such as manufactured goods, auto parts, pharmaceuticals and technology equipment driving inbound cargo traffic into Latin America.

Events that adversely affect the production, trade or demand for these goods may adversely affect the volume of goods that are transported and may have a significant impact on the results of operations. Future trade protection measures by or against the countries for which we provide cargo services may have an impact on cargo traffic volumes and adversely affect our financial results. Some of the cargo products are sensitive to foreign exchange rates and, therefore, traffic volumes could be impacted by the appreciation or depreciation of local currencies.



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An accumulation of ticket refunds could have an adverse effect on our financial results.

If the group is required to pay out a substantial amount of ticket refunds in cash, this could have an adverse effect on our financial results or liquidity position. Furthermore, LATAM has agreements with financial institutions that process customer credit card transactions for the sale of air travel and other services. Under certain of LATAM’s credit card processing agreements, the financial institutions in certain circumstances have the right to require that LATAM maintain a reserve equal to a portion of advance ticket sales that have been processed by that financial institution, but for which LATAM has not yet provided the service (i.e., air transportation). Such financial institutions may require cash or other collateral reserves to be established or withholding of payments related to receivables to be collected. Refunds lower our liquidity and put us at risk of triggering liquidity covenants in these processing agreements and, in doing so, could force us to post cash collateral with the credit card companies for advance ticket sales.

If we are unable to incorporate leased aircraft, including both operating leases and financial leases, into the fleet at acceptable rates and terms in the future, our business could be adversely affected.

A large portion of the aircraft fleet is subject to long-term leases, including operating leases and financial leases. These leases typically run from 8 to 12 years from the date of execution. We may face more competition for, or a limited supply of leased aircraft, making it difficult to negotiate on competitive terms upon expiration of the current leases or to lease additional capacity required for the targeted level of operations. If we are forced to pay higher lease rates, whether for operating or financial leases, in the future to maintain our capacity and the number of aircraft in the fleet, our profitability could be adversely affected.

Increases in insurance costs and/or significant reductions in coverage could harm our financial condition and results of operations.

Significant events affecting the aviation insurance industry (such as terrorist attacks, airline crashes or accidents, and health epidemics and the related widespread government-imposed travel restrictions) may result in significant increases of airlines’ insurance premiums and/or relevant decreases of insurance coverage. Further increases in insurance costs and/or reductions in available insurance coverage could have a material impact on our financial results, change the insurance strategy, and also increase the risk of uncovered losses.

Increases in our labor costs, which constitute a substantial portion of our total operating expenses, could directly impact our earnings.

Labor costs constitute a significant percentage of our total cost of sales (15.1% in 2024) and at times in our operating history we have experienced pressure to increase wages and benefits for our employees. A significant increase in our labor costs could result in a material reduction in our earnings.

We face reputational risks related to the use of social media.

LATAM group frequently uses social media platforms as marketing tools. These platforms provide LATAM group, as well as individuals, with access to a broad audience of consumers and other interested persons. Negative commentary regarding LATAM group or the products it sells may be posted on social media platforms and similar devices at any time, and may be adverse to LATAM group’s reputation or business. Further, as laws, regulations, and different platforms’ terms of service rapidly evolve to govern the use of social media, the failure by LATAM group, its employees or third parties acting on LATAM group’s behalf to abide by applicable laws and regulations in the use of these platforms and devices could adversely impact LATAM group’s business, financial condition, and results of operations or subject it to fines or other penalties.

We face reputational risks related to misinformation and disinformation

The proliferation of false or misleading content may be used as a mechanism to sow doubt among the general public and tarnish the image of foreign products and services. Misinformation or disinformation regarding LATAM group or the services it offers, may affect its reputation and customer relations. The spread of false or malicious news could generate negative perceptions regarding LATAM group’s safety, service quality or environmental practices, weakening consumer trust in the group’s operations. Additionally, criticism amplified through social media and digital platforms could harm the brand, especially in sensitive markets or during specific crises. Moreover, the spread of such information could (i) create higher crisis management costs for LATAM, as the group would need dedicated resources to monitor and counteract misinformation in real time, (ii) influence customer behavior, reducing flight demand or affecting the preference for the group over competitors, and (iii) create tensions with employees or unions, impacting the work environment and hindering collective negotiations.
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Safety & Operational Risks

We depend on a limited number of suppliers for certain aircraft and engine parts. LATAM group flies and depends on Airbus and Boeing aircraft, and our business could be adversely affected if we do not receive timely deliveries of aircraft, if aircraft from these suppliers become unavailable or if the public develops a negative perception of the aircraft we use in our operations.

We depend on a limited number of suppliers for aircraft, aircraft engines and many aircraft and engine parts. As a result, we are vulnerable to problems associated with the supply of those aircraft, parts and engines, including design defects, mechanical problems, contractual performance by the suppliers, or adverse perception by the public that would result in unscheduled maintenance requirements, in customer avoidance or in actions by the aviation authorities resulting in an inability to operate our aircraft. During 2024, LATAM group’s main suppliers were aircraft manufacturers Airbus and Boeing.

In addition to Airbus and Boeing, LATAM group has a number of other suppliers, primarily related to aircraft accessories, spare parts and components, including Pratt & Whitney Canada, MTU Maintenance, Rolls-Royce, General Electric Commercial Aviation Services Ltd., General Electric Celma, General Electric Engines Service, CMF International and Honeywell, among others.

As of December 31, 2024, LATAM group had a total fleet of 270 Airbus and 77 Boeing aircraft (4 of these aircraft are non-current assets classified as held for sale). Risks relating to Airbus and Boeing include:

•our failure or inability to obtain Airbus or Boeing aircraft, parts or related support services on a timely basis because of high demand, aircraft delivery backlog or other factors;
•the interruption of fleet service as a result of unscheduled or unanticipated maintenance requirements for these aircraft;
•the issuance by the Chilean or other aviation authorities of directives restricting or prohibiting the use of our Airbus or Boeing aircraft, or requiring time-consuming inspections and maintenance;
•adverse public perception of a manufacturer as a result of safety concerns, negative publicity or other problems, whether real or perceived, in the event of an accident;
•delays between the time we realize the need for new aircraft and the time it takes us to arrange for Airbus and Boeing or for a third-party provider to deliver this aircraft; or
•the delay, for any reason, to conclude cabin upgrade projects that could result in aircraft unavailability for a certain period of time.

The COVID-19 pandemic and its impact on the aviation industry, along with the subsequent global supply chain challenges faced by manufacturers and distributors, resulted in a widespread shortage of aircraft and delays in scheduled deliveries. Consequently, the waiting period for obtaining new aircraft as well as the time between a new order and its delivery became longer, affecting both Airbus and Boeing, as well as LATAM group.

On July 25, 2023, Pratt & Whitney disclosed a powder metal contamination issue affecting PW1100 GTF engines, which power Airbus Neo Family aircraft. As of December 31, 2024, LATAM group reported 44 Airbus Neo family aircraft within its fleet (approximately 13% of the total fleet). The total number of AOG (Aircraft on Ground) affecting LATAM group’s operations is a fraction of this number and will depend on the turnaround time of the shop inspection and engine repair, and the level of cycles that the engines have. These operational disruptions resulting from engine shortages from Pratt & Whitney, along with potential reductions in air traffic, could have an adverse effect on our business, operational results and financial condition. Our business could also be materially adversely affected if the passengers avoid flying on our aircraft due to an adverse perception of aircraft manufacturing, whether because of safety concerns or other problems, real or perceived, or in the event of an accident involving such aircraft or its engines.

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Additionally, during 2024 Rolls-Royce experienced delays in the maintenance of the engines used for the Boeing 787-9 aircraft. These delays intensified the operational challenges faced by airlines, including LATAM group, as they navigate the disruptions caused by engine shortages.

As of December 31, 2024, LATAM has found support from both Pratt & Whitney and Rolls-Royce, who, together with the company, are exploring solutions to the above mentioned mechanical difficulties.

While LATAM is currently addressing the above mentioned mechanical difficulties with the support from both Pratt & Whitney and Rolls-Royce, the occurrence of any one or more of the above mentioned factors could restrict our ability to use aircraft to generate profits, respond to increased demands, or could otherwise limit our operations and adversely affect our business.

Problems with air traffic control systems or other technical failures could interrupt our operations and have a material adverse effect on our business.

The operations, including the ability to deliver customer service, are dependent on the effective operation of the equipment, including aircraft, maintenance systems and reservation systems. The operations are also dependent on the effective operation of domestic and international air traffic control systems and the air traffic control infrastructure by the corresponding authorities in the markets in which the group operates. Equipment failures, personnel shortages, air traffic control problems and other factors that could interrupt operations could adversely affect our financial results as well as our reputation.

Losses and liabilities in the event of an accident involving one or more of our aircraft could materially affect our business.

We are exposed to potential catastrophic losses in the event of an aircraft accident, terrorist incident or any other similar event. There can be no assurance that, as a result of an aircraft accident or significant incident:

•we will not need to increase our insurance coverage;
•our insurance premiums will not increase significantly;
•our insurance coverage will fully cover all of our liabilities; and
•we will not be forced to bear substantial losses.

Substantial claims resulting from an accident or significant incident in excess of our related insurance coverage could have a material adverse effect on our business, financial condition and results of operations. Moreover, any aircraft accident, even when comprehensively insured, could cause the negative public perception that our operations or aircraft are less safe or reliable than those operated by other airlines or by other flight operators, which could have a material adverse effect on our business, financial condition and results of operations.

On November 18, 2022, LATAM Airlines Peru reported that during the take-off of flight LA 2213 at Lima’s Jorge Chávez International Airport a fire truck entered the runway while performing an emergency drill and collided with its aircraft. Authorities subsequently confirmed fatalities of three firefighters who were in the fire truck that struck the aircraft. There were no fatalities among the 102 passengers and 6 crew members of the aircraft. According to the final report of the Aviation Accidents Investigation Commission (Comisión de Investigación de Accidentes de Aviación, “CIAA”) issued in September 2023, this chain of events was originated by the airport operator’s inadequate planning and coordination, as well as the failure to use the communication and International Civil Aviation Organization (“ICAO”) standardized phraseology. The aircraft damage from this event was covered by LATAM’s insurance policies.

Similarly, on March 11, 2024, LATAM experienced another incident involving flight LA800, which operated from Sydney to Auckland. The Boeing 787-9 aircraft encountered a severe technical difficulty approximately an hour before landing, resulting in an abrupt drop in altitude. This unexpected movement led to injuries among ten passengers and three crew members. There were no fatalities among the 263 passengers and 9 crew members of the aircraft. The incident was caused by a technical issue within the aircraft, which a later investigation suggested was caused by a flight attendant who might have inadvertently activated a switch on a cockpit seat. The Company has since been working closely with aviation safety authorities to prevent future occurrences.
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LATAM’s insurance policies covered the medical treatment of the injured passengers and crew, and the repair costs associated with the incident.

Prolonged technical and operational issues with the airport infrastructure in cities where we have a significant presence may have a material adverse effect on our operations.

Our operations and growth strategy are dependent on the facilities and infrastructure of key airports, including Santiago’s International Airport, São Paulo’s Guarulhos International and Congonhas Airports, Brasilia’s International Airport, Bogota’s El Dorado International Airport, and Lima’s Jorge Chavez International Airport.

Santiago’s International Airport opened its new International Terminal, called Terminal 2, at the end of February 2022. The new terminal reduced assisted check-in counters by 50%, which poses a challenge to the airlines as it obligates them to implement self-service models. Santiago’s International Airport has made significant progress in its remodeling plans for Terminal 1, which is being conducted in two phases (east and west). During the initial phase of Terminal 1’s remodeling, LATAM effectively maintained and concentrated operations in the east sector, utilizing the existing facilities. In August 2024, the concessionaire began the second phase of the remodeling, shifting the entire operation of the national terminal to the west sector. This transition has resulted in some impacts on LATAM’s use of the facilities, causing operational challenges, including longer processing times for passengers. The entire remodeling project for Terminal 1 is on track and is scheduled to be completed by August 2025, as initially planned

The renovation and expansion of Iquique’s Diego Aracena International Airport in Chile has been successfully completed, significantly enhancing its infrastructure. The modernization included the expansion of the passenger terminal, upgrades to boarding and disembarking areas and the installation of state-of-the-art baggage handling systems. Similarly, Arica’s Chacalluta International Airport concluded its renovation in December 2024. The project doubled the terminal’s size to 12,184 m² and introduced improvements, such as the addition of five boarding bridges, a new control tower, expanded baggage claim areas, and additional airline counters.

In addition, there are four other ongoing projects in Chile, primarily focused on expansion and renovation, which are expected to be completed between 2025 and 2026: Balmaceda Airport, Calama Airport, La Florida International Airport and Presidente Carlos Ibáñez del Campo International Airport.

In Peru, the Jorge Chávez International Airport in Lima continues to face challenges with limited growth capacity on the airside infrastructure, including the runway, apron and parking areas, as well as overcrowding within the terminal. The airport concessionaire is in the final stages of constructing a second runway and a new terminal. While these facilities were initially planned to be completed by the end of January 2025, their opening has been rescheduled for March 30, 2025. Any further delays or limitations stemming from ongoing construction could negatively impact our operations, hinder growth potential, and affect our competitiveness both in Peru and the broader region.

On the other hand, Jaén Airport and Jauja Airport in Peru continue to face challenges due to runway infrastructure issues, which previously led to operational disruptions and flight cancellations. In response, the Peruvian government initiated urgent interventions in 2023 to address these concerns. At Jaén Airport, operations were suspended several times in 2023 due to poor runway conditions, leading to the announcement of a rehabilitation schedule for the runway and a terminal improvement project. However, the works are still ongoing, and no official completion date has been confirmed, leaving the airport with limited operational capacity.

Similarly, at Jauja Airport, renovation and improvement works for the runway were launched with the goal of enhancing safety and accommodating larger aircraft. The project is expected to be completed by mid-2025, according to recent government updates. Although these efforts reflect the government’s commitment to improving regional airports, delays and ongoing construction continue to affect flight schedules and connectivity in the region. In addition, due to the deteriorated condition of the runway and passenger safety concerns, LATAM Airlines Peru indefinitely suspended its operations to and from this airport in February.

Brazilian airports, such as the Brasília and São Paulo (Guarulhos) International Airports, have limited the number of takeoff and landing slots per day due to infrastructural limitations. Any condition that would prevent or delay our access to airports or routes that are vital to our strategy, or our ability to maintain our existing slots and obtain additional slots, could materially adversely affect our operations.

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In 2022, under Brazil’s state government Airport Concession Program, 15 airports were granted new concessions. Among these, eight are operated by LATAM group, including Congonhas Airport in downtown São Paulo. The Concession Program facilitates significant infrastructure investments but also involves a substantial volume of simultaneous work. Over the next five years, 29 of the 55 airports operated by LATAM group in Brazil are scheduled for infrastructure improvements, which may lead to temporary restrictions and could affect our revenues.

In 2023, GRU Airport, the concessionaire of Guarulhos Airport, commenced the final phase of its infrastructure expansion after delays due to the COVID-19 pandemic. The project includes building a new rapid exit taxiway on the main runway and additional taxiways, as well as plans for new piers and apron expansions. Completion is expected between 2025 and 2029, with additional investments of R$1.4 billion required under the extended concession agreement approved by the Federal Court of Accounts (“TCU”).

In 2024 the Brazilian government announced plans to build or modernize 100 airports across the country within the next five years. As of now, many of these projects are in the planning or early construction stages, with some renovations already underway.

While LATAM group is closely coordinating with and supporting the airport concessionaires, any delays on the completion of the ongoing remodeling or expansion works of any of the airports indicated above would materially adversely affect our operations.

Our business may be adversely affected by a downturn in the airline industry caused by exogenous events that affect travel behavior or increase costs, such as outbreak of disease, weather conditions and natural disasters, war or terrorist attacks.

Demand for air transportation may be adversely impacted by exogenous events, such as epidemics (such as Ebola and Zika) and pandemics (such as the COVID-19 pandemic), terrorist attacks, war or political and social instability. Increasing geopolitical tensions and hostilities in connection with the conflict in Ukraine, and in the Middle East, and the trade and monetary sanctions that have been imposed in connection with those developments, have affected, and could significantly affect, worldwide oil prices and demand, cause turmoil in the global financial system and negatively impact air travel. Situations such as these could have a material impact on the business, financial condition and results of operations.

Following a terrorist attack by Hamas in the Gaza strip on October 7, 2023, Israel declared war on Hamas and other terrorist organizations in Gaza. While a ceasefire has been declared, the situation remains uncertain and subject to change. The ongoing military conflict in Israel and the surrounding region, as well as the stability of any ceasefire and its long-term outcomes, are highly unpredictable. The Israeli conflict and any future terrorist attacks or threat of attacks, whether or not involving commercial aircraft, any increase in hostilities relating to reprisals against terrorist organizations or otherwise and any related economic impact could result in decreased passenger traffic and materially and negatively affect the business, financial condition and results of operations.

Revenues for airlines depend on the number of passengers carried, the fare paid by each passenger and service factors, such as the timelines of flight departures and arrivals. During periods of fog, ice, low temperatures, storms or other adverse weather conditions or natural disasters outside of our control, some or all of our flights may be cancelled or significantly delayed, affecting and disrupting our operations and reducing profitability. Increases in the frequency, severity or duration of thunderstorms, hurricanes, typhoons, floods or other severe weather events, including from changes in the global climate and rising global temperatures, could result in increases in delays and cancellations, turbulence-related injuries and fuel consumption to avoid such weather, any of which could result in loss of revenue and higher costs. For example, in 2022, a LATAM aircraft was severely damaged after flying through stormy weather on approach to Asuncion Airport in Paraguay, and was required to make an emergency landing. In October 2023, there were significant delays and cancellations due to strong weather conditions in Guarulhos airport, Brazil. Likewise, in February, 2024, forest fires in Chile affecting the Valparaiso Region and La Araucanía Region impacted LATAM’s operations at the Arturo Merino Benitez International Airport and at La Araucanía International Airport, respectively, delaying flights and increasing operational costs derived from certain commercial flexibility measures granted to passengers affected by the fires.

Furthermore, in early May 2024, Salgado Filho International Airport in Porto Alegre, Brazil, experienced unprecedented flooding due to severe storms in the region. The airport’s runways and terminals were submerged, leading to an indefinite suspension of all operations. To maintain connectivity, commercial flights were temporarily relocated to Canoas Air Force Base, approximately 17 kilometers northeast of Porto Alegre. After extensive recovery efforts, the airport partially resumed operations on October 21, 2024.
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LATAM Airlines Brazil began gradually resuming domestic flights in October 2024, ensuring essential air connectivity in Brazil. By January 2025, LATAM group had reintroduced international flights from Porto Alegre to Lima and Santiago. Notably, LATAM group did not report any damage to its aircraft as a result of the flooding. However, it had significant economic impacts on airlines operating in the region. For instance, LATAM reported a $25 million reduction in its operating income in the second quarter of 2024 as a result of the floods. This event underscores the vulnerability of critical infrastructure to extreme weather events, highlighting the need for enhanced resilience measures in the face of climate change.

In addition, fuel prices and supplies, which constitute a significant cost for us, may increase as a result of any future terrorist attacks, a general increase in hostilities or a reduction in output of fuel, voluntary or otherwise, by oil-producing countries. Such increases may result in both higher airline ticket prices and decreased demand for air travel generally, which could have an adverse effect on revenues and results of operations.

The impacts of a pandemic and the efforts to mitigate the spread of a virus may adversely impact the group’s business, operations and financial results.

A pandemic, such as COVID-19, and its variants may negatively affect global economic conditions, disrupt supply chains and negatively affect aircraft manufacturing operations and reduce the availability of aircraft spare parts.

There is a possibility of changes in consumer behavior in the medium and long term as a result of a pandemic and its variants that may generate adverse financial impacts for LATAM. The COVID-19 pandemic and the accompanying fear of widespread outbreaks of communicable diseases materially reduced the demand for and availability of air travel around the world, materially affecting our business, operations and financial performance .

By the end of 2023, our operations in domestic markets were fully recovered, and the international segment fully recovered during the first quarter of 2024. While LATAM corporate segment already achieved pre-pandemic RPK levels, we cannot assure that a new pandemic or any of its variants will not affect the business in the future.

Disruptions or security breaches of our information technology infrastructure or systems could interfere with the operations, compromise passenger or employee information, and expose us to liability, which may adversely affect our business and reputation.

A serious internal technology error, failure, or cybersecurity incident impacting systems hosted internally at our data centers, externally at third-party locations or cloud providers, or large-scale interruption in technology infrastructure we depend on, such as power, telecommunications or the internet, may disrupt our technology network with potential impact on our operations. Our technology systems and related data may also be vulnerable to a variety of sources of interruption, including natural disasters, terrorist attacks, telecommunications failures, computer viruses, cyber-attacks, security breaches in the supply chain (suppliers) and other security issues. These systems include our computerized airline reservation system, flight operations system, telecommunications systems, website, customer, self-service applications (“apps”), maintenance systems, check-in kiosks, in-flight entertainment systems and data centers.

In July 2024, a major global technology disruption affecting multiple industries was triggered by a flaw in a software update to the CrowdStrike Falcon platform. The disruption triggered outages in Microsoft’s systems, affecting millions of Windows operated devices, which resulted in airlines, banks and media outlets experiencing significant problems in their operations.

Although the disruption was not a cybersecurity incident, LATAM group’s technical and business teams quickly implemented the protocols established to safeguard the technological environment, successfully avoiding any operational interruptions in flights and critical systems. Consequently, no flights were cancelled during the technological disruption.

Furthermore, in light of the rise of generative Artificial Intelligence (“AI”) technology, generative AI systems have the potential to create deceptive or harmful content, such as deep fakes or fake news, leading to misinformation and manipulation. The misuse or malicious intent of generative AI could pose a threat to our operations and reputation.

In addition, as a part of our ordinary business operations, we collect and store sensitive data, including personal information of our customers and employees and information of our business partners. The secure operation of the networks and systems on which this type of information is stored, processed and maintained is critical to our business operations and strategy. Unauthorized parties may attempt to gain access to our systems or information through fraud, deception, or cybersecurity incidents.
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Hardware or software we develop or acquire may contain defects that could unexpectedly compromise information security. The compromise of our technology systems resulting in the loss, disclosure, misappropriation of, or access to, customers’, employees’ or business partners’ information could result in legal claims or proceedings, liability or regulatory penalties under laws protecting the privacy of personal information, disruption to our operations and damage to our reputation, any or all of which could adversely affect our business.

To date, we have not experienced any major incidents related to cybersecurity or our information systems. Any such incident could cause damage to our reputation and may require us to expend substantial resources to remedy the situation, and could therefore have a material adverse effect on our business and results of operations. In addition, there can be no assurance that any efforts we make to prevent these incidents will be successful in avoiding harm to our business. See “Item 16K. Cybersecurity.”

Risks Relating to the Airline Industry and the Countries in Which the Group Operates

Because our performance is heavily dependent on economic conditions in the countries in which the group does business, negative economic conditions in those countries could adversely impact the group’s business and results of operations and cause the market price of our common shares and ADSs to decrease.

Passenger and cargo demand is heavily cyclical and highly dependent on global and local economic growth, economic expectations and foreign exchange rate variations, among other things. The occurrence of similar events in the future could adversely affect our business. The group plans to continue to expand operations based in Latin America, which means that performance will continue to depend heavily on economic conditions in the region.

Latin American countries have historically experienced economic instability, including uneven periods of economic growth as well as significant downturns (e.g., periods of severe economic recession, currency devaluation, high inflation and political instability). Our business has been adversely affected by these factors and global economic recessionary conditions, which include weak economic growth in Chile, recessions in Brazil and Argentina, and poor economic performance in certain emerging market countries in which the group operates.

High interest rates, inflation (in some cases substantial and prolonged), and unemployment rates generally characterize each economy. Because commodities such as agricultural products, minerals and metals represent a significant percentage of exports of many Latin American countries, the economies of those countries are particularly sensitive to fluctuations in commodity prices. Investments in the region may also be subject to currency risks, such as restrictions on the flow of money in and out of the country, extreme volatility relative to the U.S. dollar and devaluation.

Accordingly, our business, financial condition and results of operations may be adversely affected by changes in government policies or regulations in Latin America, including such factors as exchange rates and exchange control policies, inflation control policies, price control policies, consumer protection policies, import duties and restrictions, liquidity of domestic capital and lending markets, electricity rationing, tax policies, including tax increases and retroactive tax claims, and other political, diplomatic, social and economic developments in or affecting the countries where the group operates.

According to S&P, as of December 31, 2024, long term local currency ratings of the countries where LATAM group operates in South America are as follows: Ecuador B- (negative outlook), Peru BBB (stable outlook), Colombia BBB- (negative outlook), Chile A+ (stable outlook) and Brazil BB (stable outlook). Similarly, the long-term foreign currency ratings for these countries are: Ecuador B- (negative outlook), Peru BBB- (stable outlook), Colombia BB+ (negative outlook), Chile A (stable outlook) and Brazil BB (stable outlook).

LATAM cannot ensure that any country will not experience similar adverse developments in the future or that the current or any future administration will maintain business-friendly and open market economic policies or policies that stimulate economic growth and social stability.

Latin American governments have exercised and continue to exercise significant influence over their economies.

Governments in Latin America frequently intervene in the economies of their respective countries and occasionally make significant changes in policy and regulations. Governmental actions have often involved, among other measures, nationalizations and expropriations, price controls, currency devaluations, mandatory increases on wages and employee benefits, capital controls and limits on imports.
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Our business, financial condition and results of operations may be adversely affected by changes in government policies or regulations, including exchange rates and exchange control policies, inflation control policies, price control policies, consumer protection policies, import duties and restrictions, liquidity of domestic capital and lending markets, electricity rationing, tax policies (including tax increases and retroactive tax oversight). For example, the Brazilian government’s actions to control inflation and implement other policies have involved wage and price controls, depreciation of the real, restrictions on remittance, and intervention by the Central Bank to affect base interest rates.

In the future, the level of intervention by Latin American governments may continue or increase. We cannot assure that these or other measures will not have a material adverse effect on the economy of each respective country and, consequently, will not adversely affect our business, financial condition and results of operations.

Political instability and social unrest in Latin America may adversely affect our business.

LATAM group operates primarily within Latin America and is thus subject to a full range of risks associated with our operations in this region. These risks may include unstable political or social conditions, lack of well-established or reliable legal systems, exchange controls and other limits on our ability to repatriate earnings and changeable legal and regulatory requirements.

Although political and social conditions in one country may differ significantly from another country, events in any of our key markets could adversely affect the business, financial conditions or results of operations.

For example, in July 2017, Brazilian President Luiz Inácio Lula da Silva was convicted of corruption and money laundering by a lower federal court in the State of Paraná in connection with “Operation Car Wash”. However, the conviction was overturned and his political rights restored by the Brazilian Supreme Court. President Luiz Inácio Lula da Silva ran for office in the presidential election of October 2022 and narrowly defeated President Bolsonaro. Former President Bolsonaro questioned the results of the elections, resulting in protests across the country. Luiz Inácio Lula da Silva was sworn in as president in January 2023. We cannot predict which policies the president Luiz Inácio Lula da Silva may adopt or change during his term in office, or the effect that any such policies might have on our business and on the Brazilian economy.

In Peru, on December 7, 2022, President Pedro Castillo announced the dissolution of the congress and called for new elections to be held immediately, provoking an attempted coup d’état. Subsequently, he was removed from office and arrested. On the same day, Vice President Dina Boluarte assumed the presidency of Peru, to serve the remaining presidential term until 2026. Dina Boluarte is the sixth president Peru has had since 2018. None of her five predecessors in office managed to complete the five-year term established by the Constitution and several former presidents are in prison or prosecuted in judicial proceedings.

In October 2019, Chile saw significant protests associated with economic conditions which resulted in the declaration of a state of emergency in several major cities. The protests in Chile began over criticisms about social inequality, lack of quality education, weak pensions, increasing prices and low minimum wage. If social unrest in Chile were to intensify again, it could lead to operational delays or adversely impact our ability to operate in Chile.

Furthermore, current initiatives to address the concerns of the protesters are under discussion in the Chilean Congress. These initiatives include labor reforms, tax reforms and pension reforms, among others. On October 25, 2020, Chile widely approved a referendum to redraft the constitution via constitutional convention. The election for selecting the 155-member constitutional convention took place on May 15 and 16, 2021. On July 4, 2021, the constitutional convention was convened for a nine-month period, with the possibility of a one-time, three-month extension, to present a new constitution. The proposed constitution was finalized on July 4, 2022. On September 4, 2022, a referendum was held, in which the proposed constitution was rejected by a margin of 62% to 38% of voters. On December 12, 2022, Chilean lawmakers announced that they had agreed to a document entitled “Acuerdo por Chile” (Agreement for Chile). This document marked the establishment of a new consensus and served as foundation for redrafting the new proposed constitution. The second proposed constitution was finalized on October 30, 2023. On December 17, 2023, a referendum was held, in which the proposed constitution was rejected by a margin of 55% to 45% of voters.

Chile held presidential elections in December 2021, with left-wing Gabriel Boric winning by a wide margin. Gabriel Boric was sworn in as president in March 2022. There can be no assurance that the recent changes in the Chilean administration, its constitution or any future civil unrest will not adversely affect our business, operating results and financial condition in Chile.
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In Ecuador, Guillermo Lasso was elected as President in 2021, for the 2021-2025 period. On May 16, 2023, following the media exposure of the “Encuentro Case”, which revealed the connections between the Lasso government and certain members of the Albanian mafia, the National Assembly initiated an impeachment process against President Lasso, for embezzlement. However, the next day, Guillermo Lasso issued an executive decree (Decreto Ejecutivo 741), which ordered the dissolution of the National Assembly and called for extraordinary presidential and legislative elections to complete the period. On October 15, 2023, Daniel Noboa was elected as an interim president of the Republic of Ecuador for a period of 18 months. He became the youngest president elected by popular vote in the history of the country at thirty-five years of age, and the second youngest president in the country’s history.

On January 7, 2024, Adolfo Macias, the leader of a major drug cartel in Ecuador, escaped from prison. This event revealed strong connections between the gangs controlling the prisons in the country and governmental officers, and caused a series of riots and violent attacks across the country, including looting, burning vehicles, shootings, explosions and abductions of police officers and civilians. As a consequence, on January 8, 2024, President Noboa declared a 60-day state of emergency in an attempt to control gang violence, with the support of the army. As a consequence of the ongoing violence, President Noboa extended the state of emergency by 30 days. Moreover, on April 21, 2024, a constitutional referendum was held, in which amendments related to heightened safety measures were accepted.

On August 7, 2022, Gustavo Petro, candidate for the left-wing “Pacto Histórico” party, was elected President of Colombia. Although throughout history elected governments (and the Colombian Congress) have pursued free market economic policies, with almost no economic interventions, we cannot predict whether the policies that could be adopted by the administration would have a negative impact on the Colombian economy or our business operations and financial performance. Further, regional elections were held on October 29, 2023, to elect governors for the 32 departments in Colombia as well as mayors and members of the local Administrative boards of the national territory.

On November 19, 2023, Javier Milei was elected president of the Republic of Argentina for a period of four years. Javier Milei is a right-wing politician and economist, who has proposed a comprehensive overhaul of the country’s fiscal and structural policies (among others, to dollarize the economy, privatize state public companies, remove subsidies on public utilities and close the Argentine Central Bank of Argentina). The Argentine Executive Branch has enacted Decree No. 70/2023 contemplating several measures to reduce the size of the public administration and public expenses and to de-regularize the economy. In addition, on June 28, 2024, the Argentine Congress approved Law No. 27,742 (the “Ley de Bases”) which (i) declared a public emergency for one year in administrative, economic, financial, and energy matters; (ii) delegated a series of legislative powers to the Argentine Executive Branch for the same period; and (iii) provided for a series of legal, institutional and tax reforms affecting various sectors of the economy. However, we cannot predict the social political or economic impact of the measures announced and implemented by the government to date, as well as any future measures or the outcome of the deregulation scheme purported to be enforced through the above mentioned legislation. Such measures could affect our financial condition and the results of operations.

Although conditions throughout Latin America vary from country to country, our customers’ reactions to developments in Latin America generally may result in a reduction in passenger traffic, which could materially and negatively affect our financial condition and results of operations.

Because our business relies extensively on third-party service providers, failure of these parties to perform as expected, or interruptions in our relationships with these providers or in their provision of services to us, could have an adverse effect on our financial position and results of operations.

We have engaged a significant number of third-party service providers to perform a large number of functions that are integral to our business, including regional operations, operation of customer service call centers, distribution and sale of airline seat inventory, provision of technology infrastructure and services, performance of business processes, including purchasing and cash management, provision of aircraft maintenance and repairs, catering, ground services, and provision of various utilities and performance of aircraft fueling operations, among other vital functions and services. We do not directly control these third-party service providers, although we do enter into agreements with many of them that define expected service performance. Any of these third-party service providers, however, may materially fail to meet their service performance commitments, may suffer disruptions to their systems that could impact their services, or the agreements with such providers may be terminated. For example, flight reservations booked by customers and/or travel agencies via third-party Global Distribution Systems (“GDSs”) may be adversely affected by disruptions in our business relationships with GDS operators or by issues in the GDS’s operations. Such disruptions, including a failure to agree upon acceptable contract terms when contracts expire or otherwise become subject to renegotiation, may cause the carriers’ flight information to be limited or unavailable for display, significantly increase fees for both us and GDS users, and impair our relationships with customers and travel agencies.
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As of May 1, 2023, LATAM group launched a New Distribution Capability (“NDC”), which follows the International Air Transport Association’s (“IATA”) modernized standard language (XML based) to transmit data. This distribution channel is an alternative for travel agencies across all regions where the group operates, to access our content, and be able to shop, book, and manage orders. While this distribution channel mitigates risks of interruption of our services and lowers our dependency on GDS’s technology, we cannot assure that the NDC by LATAM will operate without disruptions that may affect our operations.

The failure of any of our third-party service providers to adequately perform their service obligations, or other interruptions of services including those of NDC by LATAM, may reduce our revenues and increase our expenses or prevent us from operating our flights and providing other services to our customers. In addition, our business, financial performance and reputation could be materially harmed if our customers believe that our services are unreliable or unsatisfactory.

Our financial results are exposed to foreign currency fluctuations.

We prepare and present our consolidated financial statements in U.S. dollars. LATAM and its affiliates operate in numerous countries and face the risk of variation in foreign currency exchange rates against the U.S. dollar or between the currencies of these various countries. Changes in the exchange rate between the U.S. dollar and the currencies in the countries in which the group operates could adversely affect the business, financial condition and results of operations. If the value of the Brazilian real, Chilean peso or other currencies in which revenues are denominated declines against the U.S. dollar, our results of operations and financial condition will be affected. The exchange rate of the Chilean peso, Brazilian real and other currencies against the U.S. dollar may fluctuate significantly in the future.

Changes in Chilean, Brazilian and other governmental economic policies affecting foreign exchange rates could also adversely affect the business, financial condition, results of operations and the return to our shareholders on their common shares or ADSs. We actively manage the Brazilian real to U.S. dollar (R$/US$) exchange rate risk by entering into FX derivative contracts and carrying out internal operations for obtaining natural hedging. For further information, see “Item 11. Quantitative and Qualitative Disclosures About Market Risk—Risk of Variation in Foreign Exchange Rates.”

Environmental and Regulatory Risks

Our operations are subject to local, national and international environmental regulations; costs of compliance with applicable regulations, or the consequences of noncompliance, could adversely affect our results, our business or our reputation.

LATAM group’s operations are affected by environmental regulations at local, national and international levels. These regulations cover, among other things, emissions to the atmosphere, disposal of solid waste and aqueous effluents, aircraft noise and other activities incident to the business. Future operations and financial results may vary as a result of such regulations. Compliance with these regulations and new or existing regulations that may be applicable to us in the future could increase our cost base and adversely affect operations and financial results. In addition, failure to comply with these regulations could adversely affect us in a variety of ways, including adverse effects on the group’s reputation.

In 2016, the ICAO adopted a resolution creating the Carbon Offsetting and Reduction Scheme for International Aviation (“CORSIA”), providing a framework for a global market-based measure to stabilize carbon dioxide (“CO2”) emissions in international civil aviation (i.e., civil aviation flights that depart in one country and arrive in a different country). CORSIA will be implemented in phases, starting with the participation of ICAO member states on a voluntary basis during a pilot phase (from 2021 through 2023), followed by a first phase (from 2024 through 2026) and a second phase (from 2027). Currently, CORSIA focuses on defining standards for monitoring, reporting and verification of emissions from air operators, as well as on defining steps to offset CO2 emissions after 2020. In order to comply with this strategy, we have developed sustainability strategies focused on climate change and we have taken different measures, such as the alliance with the Cataruben foundation in Colombia, with the objectives of offsetting CO2 through reducing deforestation and switching to sustainable agriculture practices, amongst others, thus contributing to improve the communities’ life quality and the protection of biodiversity. In addition, we have other initiatives in place such as the promotion of SAF (Sustainable Aviation Fuel) with local governments and the lean fuel program which seeks to improve fuel efficiency. In addition, frameworks such as the Emissions Trading System, both in the EU and UK (“EU-ETS” and “UK-ETS”), are regulations related to the European market, where airlines have a pre-established amount of CO2 emissions for each year, which are then reduced over time, similar to a “cap and trade” system.
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Airlines must report and verify emissions related to this scheme and surrender the allocated allowances in time in order to comply. Should operations exceed the maximum allocated emissions, airlines must either acquire more from the market or pay the corresponding fee to the authority.

The proliferation of national regulations and taxes on CO2 emissions in the countries that the group has domestic operations, including environmental regulations that the airline industry is facing in Colombia, where limits on offsetting programs were included in the new Tax Reform of 2022, may also affect the cost of operations and the margins.

Our business may be adversely affected by the consequences of climate change.

There are regulatory risks associated with the management of climate change in the short and medium term, due to the fact that, in an effort from different countries to contribute to the fight against climate change, there is a tendency to impose economic instruments such as carbon taxes or emissions trading systems that seek to regulate emissions from different industries, including the aviation industry. These mechanisms seek to discourage the consumption of fossil fuels, through imposing an additional cost. However, in the case of the airline industry, especially in the South American region, there is no viable substitute fuel that would allow the industry to migrate to other types of fuels. The related risks present an opportunity to work hand in hand with the relevant governments to implement public policies allowing for progress in the production of sustainable aviation fuels in the region, thus promoting the migration away from fossil fuels and creating policies and instruments relevant to industries such as aviation, which currently has no substitute fuel available in South America. In the long term, there are physical risks associated with climate change, including the risk for greater intensity of meteorological phenomena, such as storms, tornados, hurricanes, floods and others, which in turn may pose a risk to infrastructure (destinations, airports) and communities. As a consequence, it may be necessary to modify routes and destinations, which in turn may affect our business and results of operations.

The business is highly regulated and changes in the regulatory environment in the different countries may adversely affect our business and results of operations.

Our business is highly regulated and depends substantially upon the regulatory environment in the countries in which the group operates or intends to operate. For example, price controls on fares may limit our ability to effectively apply customer segmentation profit maximization techniques (“passenger revenue management”) and adjust prices to reflect cost pressures. High levels of government regulation may limit the scope of our operations and our growth plans. The possible failure of aviation authorities to maintain the required governmental authorizations, or our failure to comply with applicable regulations, may adversely affect our business and results of operations.

Our business, financial condition and results of operations may be adversely affected by changes in policy or regulations at the federal, state or municipal level in the countries in which the group operates, involving or affecting factors such as:

•interest rates;
•currency fluctuations;
•monetary policies;
•inflation;
•liquidity of capital and lending markets;
•tax and social security policies;
•labor regulations;
•energy and water shortages and rationing; and
•other political, social and economic developments in or affecting Brazil, Chile, Peru, and the United States, among others.

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For example, the Brazilian federal government has frequently intervened in the domestic economy and made drastic changes in policy and regulations to control inflation and affect other policies and regulations. This has required the federal government to increase interest rates, change taxes and social security policies, implement price controls, currency exchange and remittance controls, devaluations, capital controls and limits on imports.

Uncertainty over whether the Brazilian federal government will implement changes in policy or regulation affecting these or other factors may contribute to economic uncertainty in Brazil and to heightened volatility in the Brazilian securities markets and securities issued abroad by Brazilian companies. These and other developments in the Brazilian economy and governmental policies may adversely affect us and our business and results of operations and may adversely affect the trading price of our common shares and ADSs.

We are also subject to international bilateral air transport agreements that provide for the exchange of air traffic rights between the countries where the group operates, and we must obtain permission from the applicable foreign governments to provide service to foreign destinations. There can be no assurance that such existing bilateral agreements will continue, or that we will be able to obtain more route rights under those agreements to accommodate our future expansion plans. Certain bilateral agreements also include provisions that require substantial ownership or effective control. Any modification, suspension or revocation of one or more bilateral agreements could have a material adverse effect on our business, financial condition and results of operations. The suspension of our permits to operate to certain airports or destinations, the inability for us to obtain favorable take-off and landing authorizations at certain high-density airports or the imposition of other sanctions could also have a negative impact on our business. We cannot be certain that a change in ownership or effective control or in a foreign government’s administration of current laws and regulations or the adoption of new laws and regulations will not have a material adverse effect on our business, financial condition and results of operations.

We are subject to anti-corruption, anti-bribery, anti-money laundering and antitrust laws and regulations in Chile, Brazil, Peru, the United States and in the various other countries in which we operate. Violations of any such laws or regulations could have a material adverse impact on our reputation, results of operations and financial condition.

We are subject to anti-corruption, anti-bribery, anti-money laundering, antitrust and other international laws and regulations and are required to comply with the applicable laws and regulations of all jurisdictions where the group operates. In addition, we are subject to economic sanctions regulations that restrict dealings with certain sanctioned countries, individuals and entities. There can be no assurance that internal policies and procedures will be sufficient to prevent or detect all inappropriate practices, fraud or violations of law by affiliates, employees, directors, officers, partners, agents and service providers or that any such persons will not take actions in violation of our policies and procedures. Any violations by us of laws or regulations could have a material adverse effect on the business, reputation, results of operations and financial condition.

We are subject to risks relating to litigation and administrative proceedings that could adversely affect our business and financial performance in the event of an unfavorable ruling.

The nature of the business exposes us to litigation relating to labor, insurance and safety matters, regulatory, tax and administrative proceedings, governmental investigations, tort claims and contract disputes. Litigation is inherently costly and unpredictable, making it difficult to accurately estimate the outcome among other matters. Currently, as in the past, we are subject to proceedings or investigations of actual or potential litigation. Although we establish accounting provisions as we deem necessary, the amounts that we reserve could vary significantly from any amounts we actually have to pay due to the inherent uncertainties in the estimation process. We cannot assure you that these or other legal proceedings will not materially affect the business. For further information, see “Item 8. Financial Information—Legal and Arbitration Proceedings” and Note 30 to our audited consolidated financial statements included in this report.

Rapid technological advancements and digitalization could generate risks in implementation and regulatory control.

Globally, there have been large advances in processes of digitization and technological innovation. These new technologies could generate new risks in their implementation that could impact us directly or indirectly. As an example, at the beginning of 2022, the implementation of 5G in the United States had a temporary impact on operations at certain airports and generated a review by the Federal Aviation Administration (“FAA”) on the specific requirements for its implementation. Additionally, during the course of 2023, while the widespread adoption and growth of Generative Artificial Intelligence systems demonstrated significant innovation and advancement in our operations, they could present certain risks that would likely require a regulatory framework to effectively address them. While LATAM is working on internal policies to regulate the use of these technologies, all processes of digitization and technological innovation may be exposed to risks, or may need to adjust to comply with future regulatory frameworks.
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Similarly, the rapidly increasing technological transformation may advance faster than the review and control capacity of the authorities and the knowledge about the effects of their possible impacts, which could affect us directly or indirectly in ways we cannot foresee.

Our reputation and brand could be adversely impacted if we fail to make progress towards achieving our environmental sustainability goals.

Our reputation and brand could also be adversely impacted by, among other things, failure to make progress toward and achieve our environmental sustainability goals, as well as public pressure from investors or policy groups to change our policies or negative public perception of the environmental impact of air travel. For example, we are committed to significantly reducing our carbon emissions, with the long-term ambition of achieving carbon neutrality by 2050. Achieving this will require significant capital investment from manufacturers and other stakeholders, as we are unable to achieve these long-term goals using our existing fleet, current technologies and available fuel sources. We are continuing to develop our climate strategy and transition plan; however, our ability to execute on such a plan is subject to substantial risks and uncertainties, as it is dependent on the actions of governments and third parties and will require, among other things, significant capital investment, including from third parties, research and development from manufacturers and other stakeholders, along with government policies and incentives to reduce the cost, and incent production of technologies that are not available at scale. Significant damage to our reputation and brand could have a material adverse effect on our business and financial results, including as a result of litigation related to any of these matters.

Risks Related to Our Indebtedness

We have substantial liquidity needs and continue to pursue various financing options. Our business may be adversely affected if we are unable to service our debt or meet our future financing requirements.

We have a high degree of debt and payment obligations under our aircraft leases and financial debt arrangements. We require significant amounts of financing to meet our aircraft capital requirements and may require additional financing to fund our other business needs. We cannot guarantee that we will have access to or be able to arrange for financing in the future on favorable terms. Higher financing costs could affect our ability to expand or renew our fleet, which in turn could adversely affect our business.

In addition, a substantial portion of our property and equipment is subject to liens securing our indebtedness, including our secured bonds and loans. In the event that we fail to make payments on our bonds and loans, creditors’ enforcement of liens could limit or end our ability to use the affected property and equipment to fulfill our operational needs and thus generate revenue. For further information, related to current contractual obligations, see “Item 5. Operating and Financial Review and Prospects—Contractual Obligations—Long Term Indebtedness.”

Moreover, external conditions in the financial and credit markets may limit the availability of funding or increase its costs, which could adversely affect our profitability, our competitive position and result in lower net interest margins, earnings and cash flows, as well as lower returns on shareholders’ equity and invested capital. Factors that may affect the availability of funding or cause an increase in our funding costs include global macro-economic crises, reductions in our credit rating or in that of our issuances, and other potential market disruptions.

We have significant exposure to SOFR and other floating interest rates; increases in interest rates will increase our financing cost and may have adverse effects on our financial condition and results of operations.

Because the publication of LIBOR was discontinued on June 30, 2023, we have amended our derivative and debt contracts to replace the LIBOR rate for the Secured Overnight Financing Rate (“SOFR”) as an alternative rate as convened by the Alternative Reference Rates Committee (“ARRC”). SOFR will fluctuate with changing market conditions and, as SOFR increases, our interest expense will mechanically increase, which could have an adverse effect on our total financing costs. As of December 31, 2024, our variable interest rate debt amounted to US$928 million.

We may be unable to adequately adjust our prices to offset any increased financing costs, which would have an adverse effect on our results of operations. If we are unable to adequately adjust our prices, our revenue might not be sufficient to offset the increased payments due under our loans and this would adversely affect our financial condition and results of operations.
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In addition, there is no guarantee that SOFR or other replacement rates for LIBOR will maintain market acceptance. See also the discussion of interest rate risk in “Item 11. Quantitative and Qualitative Disclosures About Market Risks—Risk of Fluctuations in Interest Rates.”

Our debt agreements contain various affirmative, negative and financial covenants, which could limit our ability to conduct our business. A breach of certain negative covenants could also trigger an event of default and acceleration of our indebtedness.

Certain of our debt instruments, including our (i) 13.375% Senior Secured Notes due 2029 (the “2029 Notes”) and (ii) 7.875% Senior Secured Notes due 2030 (the “2030 Notes”), contain an asset coverage ratio and certain limitations to the incurrence of additional indebtedness by us and our subsidiaries. A decline in this coverage ratio, including due to factors that are beyond our control, could require us to post additional collateral, trigger an increase in the annual interest rates stipulated under our various debt instruments, or an event of default.

Complying with certain of the covenants in our debt agreements and other restrictive covenants that may be contained in any future debt agreements could limit our ability to operate our business and to take advantage of business opportunities that are in our long-term interest. See Note 31 of our audited consolidated financial statements.

While the covenants in our debt agreements are subject to important exceptions and qualifications, if we fail to comply with them and are unable to obtain a waiver or amendment, refinance the indebtedness subject to these covenants or take other mitigating actions, an event of default would result. These arrangements also contain other events of default customary for such financings. If an event of default were to occur, the lenders or noteholders could, among other things, declare outstanding amounts due and payable and where applicable and subject to the terms of relevant collateral agreements, repossess collateral, including aircraft or other valuable assets. In addition, an event of default or acceleration of indebtedness under one agreement could result in an event of default under other of our debt instruments. The acceleration of significant indebtedness could require us to seek to renegotiate, repay or refinance the obligations under our debt arrangements, and there is no assurance that such renegotiation or refinancing efforts would be successful.

Risks Relating to our Common shares and ADRs

Our major shareholders may have interests that differ from those of ADSs holders.

As of December 31, 2024, our major shareholders beneficially owned, in the aggregate, 63% of our common shares. Each of these shareholders could have interests that may differ from those of other shareholders, including our ADSs holders. While their interests are not necessarily aligned, these major shareholders hold shares, and will continue to hold shares after this offering, with sufficient voting power under Chilean law to approve substantially all of the forms of corporate action subject to decision by shareholders’ meetings, including the distribution of dividends above the minimum dividend required by law, to elect a majority of the members of our board of directors, direct our management and control substantially all matters that are to be decided by a vote of shareholders, including fundamental corporate transactions.

The market perception of a secondary offering could create downward pressure on the market price of our common shares and ADRs.
Approximately 53% of our common shares are held by the shareholders disclosed in Item 6 and approximately 25% of our common shares are held by shareholders who have agreed amongst themselves or as part of the subscription of the Company’s convertible notes Series H and the conversion thereof into common shares of the Company not to sell such shares until November 2026 (the “Long-Term Sale Limitations”). However, the Long-Term Sale Limitations could be amended, waived or otherwise modified in most cases without the consent or knowledge of the investors. Accordingly, while any share can be sold at any time, the market perception of a potential large-scale sale of our common shares could create downward pressure on the market price of our ADSs.
In the future, we may also issue additional common shares if we need to raise capital, which could constitute a material portion of our then-issued and outstanding common stock. Any such issuances may dilute your ownership interest in the Company if preemptive rights are not exercised in a timely manner and have an adverse impact on the price of the ADSs or the common shares underlying the ADSs.


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Holders of ADSs may be adversely affected by their limited voting rights.

Holders of ADSs may exercise voting rights with respect to common shares represented by ADSs only in accordance with the deposit agreement governing the ADSs. Holders of ADSs will face practical limitations in exercising their voting rights because of the additional steps involved in our communications with ADS holders. To exercise their voting rights, holders of ADSs must instruct the ADS depositary on a timely basis on how they wish to vote. Under the terms of the deposit agreement, if holders of ADSs do not provide JP Morgan Chase Bank, N.A., in its capacity as depositary for the ADSs, with timely instructions on the voting of the common shares underlying their ADSs, the depositary will be deemed to have been instructed to give a person designated by the board of directors the discretionary right to vote those common shares. The person designated by the board of directors to exercise this discretionary voting right may have interests that are aligned with certain of our major shareholders, which may differ from those of our other shareholders. Historically, our board of directors has designated its chairman to exercise this right, but there is no guarantee that it will do so in the future. The members of the board of directors elected by the shareholders in 2024 designated Ignacio Cueto, to serve in this role. Ignacio Cueto is a member of the Cueto Group, one of our major shareholders.

Holders of ADSs may be adversely affected by currency devaluations and foreign exchange fluctuations.

If the Chilean peso exchange rate falls relative to the U.S. dollar, the value of the ADSs and any distributions made thereon from the depositary could be adversely affected. Cash distributions made in respect of the ADSs are received by the depositary (represented by the custodian bank in Chile) in pesos, converted by the custodian bank into U.S. dollars at the then-prevailing exchange rate and distributed by the depositary to the holders of the ADRs evidencing those ADSs. In addition, the depositary will incur foreign currency conversion costs (to be borne by the holders of the ADRs) in connection with the foreign currency conversion and subsequent distribution of dividends or other payments with respect to the ADSs.

Future changes in Chilean foreign investment controls and withholding taxes could negatively affect non-Chilean residents that invest in our shares.

Equity investments in Chile by non-Chilean residents have been subject in the past to various exchange control regulations that govern investment repatriation and earnings thereon. Although not currently in effect, regulations of the Central Bank of Chile have in the past imposed such exchange controls. Nevertheless, foreign investors or custodians (as applicable, whether investments are made directly or through such custodian) still have to provide the Central Bank of Chile with information related to equity investments in accordance with the provisions set forth in the compendium of Foreign Exchange Regulations (Compendio de Normas de Cambios Internacionales) of the Central Bank of Chile. Although the custodian for the ADS depositary is currently responsible for providing such information with respect to the ADS program to the Central Bank of Chile, we cannot predict what information Chilean regulators may require from holders of ADSs in the future. Furthermore, any changes in withholding taxes could negatively affect non-Chilean residents that invest in our shares.
We cannot assure you that additional Chilean restrictions applicable to the holders of ADSs, the disposition of the common shares underlying ADSs or the repatriation of the proceeds from an acquisition, a disposition or a dividend payment, will not be imposed or required in the future, nor could we make an assessment as to the duration or impact, were any such restrictions to be imposed or required. For further information, see “Item 10. Additional Information—Exchange Controls — Foreign Investment and Exchange Controls in Chile.”

Our ADS holders may not be able to exercise preemptive rights in certain circumstances.

Chilean Corporate Law requires Chilean corporations to offer existing shareholders the right to subscribe a sufficient number of shares to maintain their existing percentage of ownership in a company whenever that corporation issues new shares for cash, subject to certain exceptions. Under this requirement, any preemptive rights will be offered by us to the depositary as the registered owner of the common shares underlying the ADSs, but holders of ADSs and shareholders located in the United States will not be allowed to exercise preemptive rights with respect to new issuances of shares by us unless a registration statement under the Securities Market Act is effective with respect to those common shares or an exemption from the registration requirements thereunder is available.
To the extent that a holder of our ADSs is unable to exercise its preemptive rights because a registration statement has not been filed, the depositary may attempt to sell the holder’s preemptive rights in Chile and distribute the net proceeds of the sale, net of the depositary’s fees and expenses, to the holder, provided that a secondary market for those rights exists and a premium can be recognized over the cost of the sale.
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A secondary market for the sale of preemptive rights can be expected to develop if the subscription price of the shares of our common stock upon exercise of the rights is below the prevailing market price of the shares of our common stock. However, we cannot assure you that a secondary market in preemptive rights will develop in connection with any future issuance of shares of our common stock or that, if a market develops, a premium can be recognized on their sale. Amounts received in exchange for the sale or assignment of preemptive rights relating to shares of our common stock will be taxable in Chile and in the United States. The inability of holders of ADSs to exercise preemptive rights in respect of common shares underlying their ADSs could result in a change in their percentage ownership of common shares following a preemptive rights offering. If a secondary market for the sale of preemptive rights does not develop and such rights cannot be sold, they will expire, and a holder of our ADSs will not realize any value from the grant of the preemptive rights. In either case, the equity interest of a holder of our ADSs in us will be diluted proportionately.

We are not required to disclose as much information to investors as a U.S. issuer is required to disclose and, as a result, you may receive less information about us than you would receive from a comparable U.S. company.

The corporate disclosure requirements that apply to us may not be equivalent to the disclosure requirements that apply to a U.S. company and, as a result, you may receive less information about us than you would receive from a comparable U.S. company. We are subject to the reporting requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The disclosure requirements applicable to foreign issuers under the Exchange Act are more limited than the disclosure requirements applicable to U.S. issuers. Publicly available information about issuers of securities listed on Chilean stock exchanges also provides less detail in certain respects than the information regularly published by listed companies in the United States or in certain other countries. Furthermore, there is a lower level of regulation of the Chilean securities market and of the activities of investors in such markets as compared with the level of regulation of the securities markets in the United States and in certain other developed countries. For further information, see “Item 16G. Corporate Governance.”

ITEM 4 INFORMATION ON THE COMPANY
A.History and Development of the Company
General
LATAM Airlines Group is a Chilean-based airline and holding company that changed its name from LAN Airlines S.A. after its merger with TAM of Brazil in 2012. TAM S.A. continues to exist as a subsidiary of LATAM. LATAM Airlines Group and its affiliates are primarily involved in the transportation of passengers and cargo and operate as one unified business enterprise. During 2016, we began the transition of unifying LAN and TAM into a single brand: LATAM.
LATAM’s airline holdings include LATAM and its affiliates in Chile, Peru, Argentina, Colombia and Ecuador, and LATAM Cargo and its affiliate LANCO (in Colombia), as well as TAM S.A. and its affiliates LATAM Airlines Brazil, LATAM Airlines Paraguay, ABSA and Multiplus S.A. (“Multiplus”). LATAM Airlines Group is a publicly traded corporation listed on the Santiago Stock Exchange (“SSE”), the Chilean Electronic Exchange, under the ticker symbol “LTM,” and the New York Stock Exchange (“NYSE”) since July 25, 2024, under the ticker symbol “LTM.” LATAM Airlines Group has a market capitalization of US$8,328.2 million as of December 31, 2024.
LATAM’s history goes back to 1929, when the Chilean government founded LAN. In 1989, the Chilean government sold 51.0% of LAN’s capital stock to Chilean investors and to the Scandinavian Airlines System. In 1994, the Cueto Group, one of LATAM’s current shareholders, acquired 98.7% of LAN’s stock, including the remaining shares then held by the Chilean government. In 1997, LAN became the first Latin American airline to list its shares (which trade in the form of ADSs) on the New York Stock Exchange.
Over the last decades, LATAM group has significantly expanded its passenger operations in Latin America, initiating services in Peru in 1999, Ecuador in 2003, Argentina in 2005, and Colombia in 2010. Moreover, since June 2012, the Brazilian affiliate, TAM Linhas Aéreas S.A. (“TLA” or “LATAM Airlines Brazil”), has been a leading domestic and international airline offering flights throughout Brazil with a strong domestic market share, international passenger services and significant cargo operations.
As a result of the COVID-19 pandemic and its profound impact on worldwide travel and our operations, on May 26, 2020, LATAM Airlines Group and 28 affiliates (the “Initial Debtors”) filed their petitions for relief under Chapter 11 of title 11 of the United States Code, 11 U.S.C.
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§§ 101-1532, (as amended, the “Bankruptcy Code”), with the United States Bankruptcy Court for the Southern District of New York (the “Bankruptcy Court”). On July 7, 2020 and July 9, 2020 nine additional affiliates of LATAM Airlines Group (the “Subsequent Debtors,” and together with the Initial Debtors, the “Debtors”) filed their petitions for relief under Chapter 11 of the Bankruptcy Code with the Bankruptcy Court. Additional parallel and ancillary proceedings were filed in the Cayman Islands, Colombia, Perú and Chile. In June 2020, LATAM Airlines Argentina announced its indefinite cessation of passenger and cargo operations. Following a series of relevant milestones with respect to LATAM’s Chapter 11 Restructuring, the Company emerged from its reorganization process on November 3, 2022. For more information on the Chapter 11 Restructuring, see “Item 3. Key Information—Risk Factors—Risks Relating to Our Emergence from Chapter 11 Bankruptcy Proceedings” and “Item 4. Information on the Company - Business Overview—Chapter 11 Proceedings through 2022” in our annual report on Form 20-F for the fiscal year ended December 31, 2022, filed with the SEC on March 9, 2023 (the “2022 Annual Report”).

LATAM has a single series of shares of Common Stock, without par value, listed on Chilean Stock Exchange and ADSs evidenced by American Depositary Receipts, each representing 2,000 shares of Common Stock, that were relisted on the NYSE on July 25, 2024, following its delisting in June 2020 after entering into the Chapter 11 restructuring process (“Chapter 11”). The relisting occurred following the pricing of a public secondary offering by certain of the LATAM’s shareholders to sell 19,000,000 ADSs at a price of U.S.$24.00 per ADS. The ADSs trade on the NYSE under the ticker symbol “LTM.” On August 28, 2024, 1,773,026 additional ADSs were sold by the Company’s shareholders pursuant to the underwriters’ overallotment option. The Company did not receive any proceeds from the sale of ADSs by the selling shareholders.
Our principal executive offices are located at Presidente Riesco 5711, 20th floor, Las Condes, Santiago, Chile and our general telephone number at this location is (56-2) 2565-3844. We have designated LATAM Airlines Group S.A. Inc. as our agent in the United States, located at 6500 NW 22nd Street, Miami, Florida 33122. Our Investor Relations website address is www.latamairlinesgroup.net. Information obtained on, or accessible through, this website is not incorporated by reference herein and shall not be considered part of this annual report. For more information, contact Andrés del Valle, Vice President of Corporate Finance, at InvestorRelations@latam.com.
The SEC maintains an internet site at http://www.sec.gov that contains reports, information statements, and other information regarding issuers that file electronically with the SEC.
Capital Expenditures
For a description of our capital expenditures, see “Item 5. Operating and Financial Review and Prospects—Liquidity and Capital Resources—Capital Expenditures.”
B.Business Overview
General
LATAM group is the leading airline group in South America, as measured by available seat-kilometers (“ASK”), and it is also one of the largest airline groups in the world, based on the number of available seats and flights operated as of December 31, 2024. LATAM Airlines Group and its affiliates provide domestic services in Brazil, Chile, Peru, Colombia and Ecuador, as well as regional flights and long-haul operations. LATAM group carries out cargo operations using both belly space on passenger flights and dedicated freighter aircraft. The group also offers complementary services, such as ground handling, courier, logistics, and maintenance. As of December 31, 2024, LATAM group has a consolidated fleet of 347 aircraft, including 21 dedicated cargo freighters, and employs 38,663 people.
During 2024, LATAM group transported approximately 82 million passengers and was ranked as either the number one or two largest carrier by market share in every major domestic aviation market in South America where it operates. It also maintains the largest overall passenger network to and from South America for aircraft with more than 20 seats, offering passenger service to 131 destinations in South America and the Caribbean (52 destinations in Brazil, 18 in Colombia, 17 in Chile, 17 in Peru, 7 in Ecuador, and 20 in other South American countries and the Caribbean), as well as 20 international long-haul destinations across the world (8 in North America, 8 in Europe, 3 in Oceania and 1 in Africa).
As of December 31, 2024, LATAM group offers passenger services to 151 destinations in 27 countries and cargo services to approximately 163 destinations, including 12 cargo-only locations, across 31 countries, 4 of which are cargo-only. These services are supported by a strong demand for air travel within the region and in the international markets where LATAM group operates.

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LATAM group’s global reach is further strengthened by key strategic partnerships, code-sharing agreements, commercial alliances and its joint venture agreement with Delta Air Lines, Inc. (“Delta”). As of December 31, 2024, LATAM group, through various passenger agreements, offers service to 135 destinations in North America, 9 in South America, 73 in Europe, 14 in Australasia, 22 in Asia and 18 in Africa. During 2024, LATAM and Delta celebrated the second anniversary of their Joint Venture Agreement. By December 31, 2024, this partnership had launched six new routes and increased frequencies, significantly enhancing connectivity between South America and North America.

LATAM group is the largest air cargo group carrier in South America, as measured by its cargo fleet, and plays a key role in the transportation of essential goods, supporting supply chains and export industries. The group also operates LATAM Pass, which, according to publicly information, is positioned as the largest frequent flyer program in South America and the seventh largest frequent flyer program in the world by number of members.
Competitive Strengths
LATAM group’s strategy is to remain the leading airline group in South America by leveraging our unique position in the airline industry. LATAM is the only airline group in the region with a domestic presence in five markets, as well as regional flights and long-haul operations to four continents. As a result, the LATAM group has geographical diversity and operational flexibility, as well as a proven track record of acting quickly to adapt its business to economic challenges. Moreover, the foundation of LATAM group’s unique network and market share in a region with growth potential and the focus on our existing competitive strengths, will allow us to continue building our business model and fuel our future growth. We believe our most important competitive strengths are:
•Leader in the South American Airlines Space, with a Unique Network and Market Share among Global Airlines
Through a successful regional expansion strategy, LATAM group has become the leading international and domestic passenger airline group in South America as measured by ASKs in 2024. LATAM and its affiliates have domestic passenger operations in Chile, Brazil, Peru, Colombia and Ecuador. We are also the largest group of operators of regional flights as measured by ASKs in 2024, connecting the main cities and also some secondary cities in South America. Furthermore, through our significant presence in the largest hubs in South America-Santiago, Lima and São Paulo-we believe that we are able to offer the best connectivity options between South America and the rest of the world.
•A Geographically Diversified Revenue Base, including both Passenger and Cargo Operations
LATAM group’s operations are highly geographically diversified, including domestic operations in five countries, as well as operations within South America and connecting South America with various international destinations. According to the 2024 annual ASKs, 52.0% of the group’s operations are international, 17.6% domestic Spanish speaking countries and 30.3% domestic Brazil. We believe this provides resilience to external shocks that may occur in any particular market. Furthermore, we believe that one of our distinct competitive advantages is the ability to profitably integrate scheduled passenger and cargo operations. We take into account potential cargo services when planning passenger routes, and also serve certain dedicated cargo routes using freighter aircraft when needed. By adding cargo revenues to existing passenger service, there is an increase in the productivity of assets and we are able to maximize revenue, reducing the break-even load factors and enhancing the per flight profitability. Additionally, we believe that this revenue diversification helps offset seasonal revenue fluctuations and reduces the volatility of the business over time. For the year ended December 31, 2024, passenger, cargo and other income accounted for 86.2%, 12.3% and 1.5% of total revenues, respectively.
•Modern Fleet and Optimized Fleet Strategy
The average age of our passenger fleet was approximately 11.6 years as of December 31, 2024. Additionally, LATAM has continued its ambitious fleet renewal plan based entirely on new technology aircraft, which includes 85 new Airbus A320neo-family aircraft and 15 new Boeing 787-9 to be delivered by 2030.
LATAM selects aircraft based on the ability to effectively and efficiently serve the short- and long-haul flight needs, while still striving to reduce operational complexity by minimizing the number of different aircraft types that the group operates.
The fleet plan as of December 31, 2024, includes a short-haul fleet formed exclusively by aircraft from the A320-family, with a focus on the A321 and A320neo (Neo: New Engine Option), a more efficient version of the A320; which we introduced into our fleet in 2016, becoming then the first airline in Latin America to fly this model. For long-haul passenger flights, we operate the Boeing 787-8, the Boeing 787-9, the Boeing 767-300ER, the Boeing 777-300ER and the Airbus A330-200 (through wet lease).
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The Boeing 787 model allows LATAM group to achieve important savings in fuel consumption, while incorporating modern technology to deliver the best travel experience for LATAM’s passengers. For cargo flights, we operate Boeing 767-300F aircraft.
•Strong Brand Teamed with Key Global Strategic Alliances
In 2024, LATAM was recognized by the Skytrax World Airline Awards as the “Best Airline in South America” for the fifth consecutive year, and was also recognized for having the “Best Cabin Crew” and “Best Business Class” in South America, along with other recognitions related to on-board service and lounge facilities. In addition, LATAM was recognized for the third consecutive year with the highest rating in the APEX 2025 Global Airlines Ranking as a “Five Star Global Airline.” It was also acknowledged by the APEX Passengers’ Choice Awards for having the “Best Entertainment,” as well as, the “Best Food and Beverage” service in South America.

In terms of On-Time Performance (“OTP”), the consulting firm Cirium, placed LATAM group in the fourth position of its on-time performance review for the year 2024, making it the only South American airline group reaching the ranking’s top 5 positions.

In 2024, LATAM was recognized by the World Travel Awards as South America’s leading airline for the tenth consecutive year and as “South America’s Leading Airline Brand.”

Also in 2024, according to Business Traveler USA, LATAM was recognized as the best Latin American airline, setting a new regional standard.
Our strategic global alliances and existing commercial agreements provide our customers with access to more destinations worldwide, a combined reservations system, itinerary flexibility and various other benefits, which substantially enhance our competitive position within the Latin American market. See “Item 4. Information on the Company—Business Overview—Passenger Alliances and Commercial Agreements.”
•Recognized Loyalty Program
Our frequent flyer program, LATAM Pass, is the leading frequent flyer program in South America and the seventh largest frequent flyer program in the world, as measured by total number of members, with strong participation rates and brand recognition by our customers. Customers in the program earn miles and points based on the price paid for the ticket, class of ticket purchased, and elite level, as well as by using the services of outside partners in the program. We believe that our program is attractive to customers because it does not impose restrictions on those flights for which points can be redeemed, or limit the number of seats available on any particular flight to members using the loyalty program. LATAM Pass members can also accrue and redeem points for flights on other airlines with whom we have bilateral commercial agreements. See “Item 4. Information on the Company—Business Overview—Frequent Flyer Program.”
In 2024, LATAM Pass was recognized by the Frequent Traveler Awards 2024 as the “Airline Loyalty Program of the Year in the Americas” for the second consecutive year and the “Best Earning & Redemption Ability in the Americas.”
Business Strategy
Our purpose is to elevate every journey, always.
Our mission is to connect Latin America with itself and the world through an extensive network of passengers and cargo transportation, operating with safety and care for our customers, while maintaining a balance between economic growth, efficiency, environmental care, and social well-being.

Our vision is to be the leading airline group in Latin America, recognized for its commitment to social responsibility and its focus on being fair, empathetic, transparent, and simple in its relationships with employees, customers, and other key stakeholders.
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In order to achieve our purpose and vision, the principal areas on which we plan to focus our efforts going forward are as follows:
•Dedicated to providing the best solutions to our customers
We are committed to being a leading airline group by delivering the best solutions that combine a wide network, an unmatched customer experience, and a dedicated culture of service.
LATAM is the only airline group in South America with a local presence in five South American home markets, coupled with its intra-regional and long-haul operations, which enables us to offer unparalleled connectivity across the Americas and to the rest of the world. Our extensive route network, supported by key hubs and strategic partnerships, allows us to meet diverse travel needs with competitive prices and seamless options for passengers and cargo clients alike.

Customer satisfaction lies at the core of our mission. We continuously enhance the travel experience by integrating advanced digital technologies, ensuring every interaction is seamless and reliable. From booking to baggage arrival, we deliver a safe and personalized journey that fosters loyalty through our industry-leading loyalty program. This robust program, along with our commitment to sustainability and a diversified service portfolio, provides passengers with flexibility and value, while reinforcing LATAM group’s position in the market.

Additionally, we are driven by a committed and passionate workforce that prioritizes exceptional service and operational excellence. By fostering a culture of development, diversity, and inclusion, we empower our employees to thrive and reflect the vibrant societies we serve. Efficient talent management, equitable pay, and a focus on safety ensure our teams deliver a reliable and attentive experience to every customer.
•Being a financially strong and healthy airline group
LATAM group is dedicated to maintaining financial strength and ensuring long-term sustainability through a focus on operational excellence, efficiency, and a robust capital structure. By combining these pillars, we position ourselves as a resilient airline group capable of navigating industry challenges and seizing future opportunities.
Operational excellence remains central to our strategy. We prioritize safety as an absolute commitment, safeguarding employees, passengers, and cargo clients by implementing best practices and preventive measures. Punctuality is another cornerstone of our operations, reflecting our respect for our customers’ time and ensuring flights adhere to schedules. To further enhance reliability, we proactively manage risks with updated practices and collaborate closely with suppliers to ensure seamless operations and mutual growth.
Our dedication to financial efficiency is reflected in our efforts to maintain a competitive cost structure and continuously improve our efficiency. This approach, aligned with our financial policy and liquidity management, ensures we deliver exceptional value while maintaining financial stability and competitiveness.
•Embracing challenges of the future
LATAM is committed to shaping a sustainable and innovative future by fostering social, environmental, and economic development across the countries where we operate. Through a dual focus on sustainability and digital transformation, we position ourselves as a leader prepared to meet the evolving demands of the aviation industry while delivering a distinctive value proposition to our customers.
As a social and sustainable player, we strive to create lasting positive impacts by integrating sustainability practices into our operations and fostering long-term relationships with communities and stakeholders. LATAM group’s sustainability strategy advances key pillars, including environmental management, climate change, circular economy, and shared value. These efforts reflect our deep responsibility to the regions we serve and are recognized globally, as evidenced by multiple prestigious awards. In 2024, LATAM Cargo was named the “Most Sustainable Cargo Airline in America” by Freightweek, and our onboard services earned the “Best Onboard Sustainability Strategy” from the Onboard Hospitality Awards. Additionally, LATAM group also achieved a remarkable milestone by being included in the Dow Jones Sustainability Index, reaffirming LATAM’s position as the most sustainable airline group in the Americas and the fifth globally, as recognized by the Corporate Sustainability Assessment conducted by Standard & Poor’s.
Digital integration is another cornerstone of our strategy, transforming how we work and enhancing the customer experience. By continuously adopting technological advancements and exploring new opportunities, we ensure daily operations are efficient and innovative. LATAM group’s e-business strategy drives improvements in contingency management and ancillary revenue applications, allowing us to provide timely, transparent information and solutions that strengthen the overall customer experience.
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Furthermore, we prioritize data security and privacy, implementing robust protective measures to safeguard information and comply with global regulations. The group also strengthens its cybersecurity systems with efficient methodologies and infrastructures, ensuring resilience in our operations and mitigating risks.
By combining sustainability leadership with digital innovation, LATAM group not only addresses the challenges of the future but also delivers exceptional value to its customers, strengthens its market position, and ensures sustainable, long-term operations across the Americas and beyond.

Airline Operations and Route Network
The following tables set forth our operating revenues by activity and point of sale for the periods indicated:
For the year ended December 31,
2024 2023 2022
(in US$ millions)
Total passenger revenues 11,233.3 10,215.1 7,636.4
Total cargo revenues 1,599.8 1,425.4 1,726.1
Total revenues 12,833.0  11,640.5  9,362.5 
For the year ended December 31,
2024 2023 2022
(in US$ millions)
Peru 1,127.5  988.9  859.0 
Argentina 239.4  244.4  206.9 
United States 1,324.0  1,044.8  1,058.1 
Europe 957.0  800.9  769.0 
Colombia 669.2  662.3  540.2 
Brazil 5,512.5  5,006.4  3,724.5 
Ecuador 365.0  332.8  248.5 
Chile 1,927.8  1,898.2  1,514.6 
Asia Pacific and rest of Latin America 710.6  661.9  441.8 
Total revenues 12,833.0  11,640.5  9,362.5 
Passenger Operations
General
As of December 31, 2024, our passenger operations were performed by LATAM Airlines Group S.A. and its passenger affiliates, where the group operates both domestic and international services. LATAM group collects and reports operating data for its passenger operations in three categories: international (connecting more than one country), Domestic operations in Spanish-speaking countries or “SSC” (including Chile, Peru, Colombia, and Ecuador), and Domestic Brazil (entirely within Brazil).
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The following table sets forth certain of our passenger operating data for international and domestic routes for the periods indicated:
For the year ended December 31,
2024 2023 2022
ASKs (million) (at period end)
International 82,187.7 67,514.3 49,575.7
SSC 27,817.1 24,970.3 23,384.7
Domestic Brazil 47,925.9 44,765.9 40,891.8
Total 157,930.8 137,250.5 113,852.2
RPKs (million)
International 70,769.1 57,340.2 41,140.5
SSC 22,892.8 20,482.0 18,942.6
Domestic Brazil 39,475.6 36,184.5 32,504.8
Total 133,137.5 114,006.6 92,587.8
Passengers (thousands)
International 16,048 12,915 8,607
SSC 31,115 27,999 25,288
Domestic Brazil 34,845 32,984 28,573
Total 82,008 73,898 62,467
Passenger RASK (passenger revenues/ASK, in US cents)
International(1)
US¢6.6
 US¢6.9 US¢6.4
SSC(1)
 US¢7.6 US¢7.8 US¢7.5
Domestic Brazil(1)
 US¢7.7 US¢8.0 US¢6.6
Combined Passenger RASK(2)
US¢7.1
US¢7.4
 US¢6.7
Passenger load factor (%)
International 86.1  84.9  83.0 
SSC 82.3  82.0  81.0 
Domestic Brazil 82.4  80.8  79.5 
Combined load factor 84.3  83.1  81.3 
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(1)RASK information for each of our business units is provided because LATAM believes that it is useful information to understand trends in each of our operations. We use our revenues as defined under IFRS Accounting Standards to calculate this metric. The revenues per business unit include ticket revenue, breakage, excess baggage fee, frequent flyer program revenues and other income. These operating measures may differ from similarly titled measures reported by other companies and should not be considered in isolation or as a substitute for measures of performance in accordance with IFRS Accounting Standards. This unaudited operating data is not included in or derived from LATAM’s financial statements. RASK information for passengers by segment for 2023 and 2022 has been re-reported due to a change in methodology. This adjustment ensures that the revenues of each segment are aligned with accounting revenues, making the reported figures more consistent with the combined passenger RASK.
(2)The combined Passenger RASK for LATAM is calculated by dividing passenger revenues by total passenger ASKs.
International Passenger Operations
LATAM group’s international network includes the international operations of our Chilean, Peruvian, Ecuadorian, Colombian, Brazilian and Paraguayan affiliates. LATAM Airlines Group and its affiliates have operated international services out of Chile since 1946 and have since greatly expanded international services, offering flights out of Peru, Ecuador, Colombia and Brazil.
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As of December 31, 2024, LATAM group offers 40 international destinations in 22 countries, in addition to the domestic destinations and international flights and connections between the domestic destinations.
The general strategy to expand the international network is aimed at enhancing LATAM’s value proposition by offering customers more frequencies, destinations and routing alternatives. Sustained development of LATAM group’s international network is a crucial factor in the long-term strategy. The group provides long-haul services out of Santiago, Lima, Bogota, São Paulo and Fortaleza. The group also provides regional services from Chile, Peru, Ecuador, Colombia and Brazil.
As part of our mission, LATAM seeks to promote tourism to South America. Due to our large network of services, visitors from around the world can experience world-renowned destinations such as Machu Picchu and Cusco in Peru, the Galapagos Islands, Iguazu Falls in Brazil, and the Atacama Desert and Patagonia in Chile, including the cities of Punta Arenas and Puerto Natales.
Market Share Information
The following table presents air passenger traffic information for international flights (including intra-regional flights) and LATAM’s market share in each geographic market in which the group operates:
LATAM passenger
figures % variation 		LATAM’s Market Share
Country 2024-2023 2024 2023 % variation
Brazil(1)
 5.8  % 22.6  % 22.4  % 0.2   p.p.
Chile(2)
 11.2  % 45.3  % 41.6  % 3.7   p.p.
Peru(3)
 5.2  % 48.8  % 44.8  % 4.0   p.p.
Colombia(4)
 8.6  % 5.3  % 6.1  % (0.8)  p.p.
Ecuador(4)
 1.2  % 9.7  % 8.6  % 1.1   p.p.
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(1)Source: ANAC Brazil’s website. Passenger figures considers passengers carried, measured in RPKs, in 2024 vs 2023. Market share considers passengers carried, measured in RPKs, as of December 2024.
(2)Source: JAC Chile’s website. Passenger figures considers passengers carried, measured in RPKs, in 2024 vs 2023. Market share considers passenger carried, measured in RPKs, as of December 2024.
(3)Source: DGAC Peru’s website. Passenger figures considers passengers carried in 2024 vs 2023. Market share considers the number of passengers carried as of December 2024.
(4)Source: Diio.net. Passenger figures considers ASK changes in 2024 vs 2023. Market share considers ASKs as of December 2024.
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Competitors in international routes
The following table shows LATAM’s main competitors during 2024 in each geographic market in which it operates:
Country Route Competitors
Brazil North America American Airlines, United Airlines, Azul Linhas Aereas, Air Canada, GOL and Aeromexico.
Latin America Copa, GOL, Avianca, Sky Airline, Aerolineas Argentinas, JetSmart, Flybondi, Arajet, Azul Linhas Aereas, Turkish Airlines, Boliviana de Aviacion, Ethiopian Airlines and IAG Group (British Airways, Iberia and their affiliates).
Europe TAP Portugal, Air France-KLM, IAG Group (British Airways, Iberia and their affiliates), ITA Airways, Azul Linhas Aereas, Turkish Airlines, Lufthansa, Air Europa and Swiss.
Africa Ethiopian Airlines, TAAG and South African Airways.
Chile North America American Airlines, Air Canada, Aeromexico and United Airlines.
Latin America
JetSmart, Sky Airline, Copa, Avianca, Aerolineas Argentinas and Arajet.
Europe IAG Group (British Airways, Iberia and their affiliates) and Air France-KLM.
South Pacific Qantas Airways.
Argentina Latin America Copa, Aerolineas Argentinas, GOL, Avianca, JetSmart, Sky Airline, Arajet, Flybondi, Boliviana de Aviacion, Ethiopian Airlines, IAG Group (British Airways, Iberia and their affiliates) and Turkish Airlines.
Peru North America American Airlines, United Airlines, Sky Airline, Aeromexico, Volaris, Air Transat and JetBlue Airways.
Latin America Sky Airline, JetSmart, Copa, Avianca, Aerolineas Argentinas and Arajet.
Europe Air France-KLM, IAG Group (British Airways, Iberia and their affiliates), Air Europa and Plus Ultra.
Colombia North America Avianca, American Airlines, Spirit Airlines, Aeromexico, United Airlines, Viva Aerobus, Air Canada, JetBlue Airways, Volaris and Emirates.
Latin America Avianca, Copa, Jetsmart, GOL, Arajet and Aerolineas Argentinas.
Europe Avianca, IAG Group (British Airways, Iberia and their affiliates), Air France-KLM, Air Europa, Lufthansa, Turkish Airlines and Plus Ultra.
Ecuador North America American Airlines, Avianca, JetBlue Airways, United Airlines, Spirit Airlines and Aeromexico.
Latin America Avianca, Copa, Arajet and Jetsmart.
______________________________________________________
Source: Diio.net considering competitors with more than 1% of total ASK.
Domestic Passenger Operations
As of December 31, 2024, domestic passenger services within Chile, Brazil, Peru, Ecuador and Colombia were operated by LATAM Airlines Chile, LATAM Airlines Brazil, LATAM Airlines Peru, LATAM Airlines Ecuador and LATAM Airlines Colombia, respectively.
Business Model for Domestic Operations
LATAM group has operations in five domestic markets, with a business model that allows it to provide more competitive fares and contributes to the development of tourism and the growth of air travel per capita in the region. The domestic service model requires continuous cost reduction efforts, and the group continues to implement a series of initiatives to reduce cost per ASK in all domestic operations.
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These efforts are aimed at significantly reducing selling and distribution expenses, increasing fleet utilization and operational productivity and simplifying back-office and support functions, thereby allowing the LATAM group to expand operations while controlling fixed costs.
Another key elements of this business model are the initiatives to increase ancillary revenues and others that allow passengers to customize their journey. Customers on domestic flights are now able to access a simpler sales platform, which allows them to choose their fare depending on the type of journey they want, and to purchase additional services such as extra luggage, a variety of food and beverage options on board, preferred seating options and the flexibility to change tickets.
In March 2020, LATAM group introduced its superior cabin class, Premium Economy, in all domestic and international flights within Latin America operated by the Airbus A320-family (A319, A320, A320neo, A321 and A321neo; “short-/medium-haul”) aircraft. This cabin class offers premium services both at the airport and in-flight, including priority check-in and boarding, VIP lounge access in airports where available, a differentiated onboard service including complimentary snacks and drinks, an exclusive overhead bin for carry-on luggage and a blocked middle seat, providing greater space and privacy.
In 2023, LATAM group incorporated seven A321neo into its fleet, which are the largest model of the A320 single-aisle aircraft family. These aircraft can accommodate up to 224 passengers, have compartments for carry-on luggage called Airspace XL bins, and stand out for being one of the most efficient aircraft on the market, according to Airbus. Additionally, during 2023, with a focus on the passenger experience, LATAM group finalized the retrofit project for its narrow-body fleet (excluding aircraft available for sale), reaching 100% of the fleet with a homologated and renovated cabin.
During 2024, LATAM group continued enhancing its customer value proposition by installing onboard Wi-Fi across its narrow-body fleet. As of December 31, 2024, 89% of the LATAM group’s narrow-body fleet was equipped with onboard connectivity. In terms of geographic distribution of Wi-Fi access, 100% of the narrow-body fleet operated by LATAM Airlines Brazil features Wi-Fi, while 75% of the narrow-body fleet operated by our affiliates based in Chile, Peru, Colombia and Ecuador is also equipped with such service.
LATAM group continues to develop digital initiatives to empower passengers providing them with an enhanced digital experience with end-to-end control of their reservation. LATAM customers will increasingly be able to buy, check-in and manage the after sale service in a simpler and faster manner through their smartphones.
The following table shows LATAM’s number of destinations, passengers transported, market share and main competitors in each domestic market in which we operate:
Brazil Chile Peru Colombia Ecuador
Destinations 52 17 17 18 7
Passengers Transported (million) 34.8 9.7 9.8 10.0 1.6
Change (YoY) 5.6  % 15.5  % 15.5  % 4.1  % 6.3  %
Market share
38.6%(1)
66.8%(2)
62.3%(3)
27.5%(4)
46.0%(4)
Main competitors(5)
 Gol, Azul   Sky Airlines, JetSmart   Sky Airlines
 Peru, Star Peru, JetSmart Peru, Atsa Airlines		   Avianca, Jetsmart, EasyFly,Satena, Copa
Airlines Colombia
 (“Wingo”) 		  Avianca, Aeroregional
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(1)Source: ANAC Brazil’s website. Market share considers RPKs as of December 2024.
(2)Source: JAC Chile’s website. Market share considers RPK as of December 2024.
(3)Source: DGAC Peru’s website. Market share considers the number of passengers carried as of December 2024.
(4)Source: Diio.net. Market share considers ASKs as of December 2024.
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(5)Source: Diio.net considering competitors with more than 1% of total market share.
Passenger Alliances and Commercial Agreements
Strategic Alliance with Delta Air Lines
In 2020, LATAM entered into a Trans-American Joint Venture Agreement with Delta Air Lines (the “Joint Venture Agreement”), following the framework agreement previously signed by both parties in 2019 to combine the airlines’ complementary route networks between North and South America.

On September 30, 2022, LATAM and Delta Air Lines obtained the final regulatory approvals from the U.S. Department of Transportation, allowing them to implement their Joint Venture Agreement. This partnership enables Delta Air Lines and LATAM to work together, coordinating capacity and pricing strategies and sharing corporate accounts in the United States/Canada and South America (Brazil, Chile, Colombia, Paraguay, Peru, and Uruguay) markets within the scope of the Joint Venture Agreement. This agreement has allowed the airlines to develop a network with expanded route offerings and to connect the Americas to the world with access to more than 300 destinations. Additionally, the airlines will deepen their level of cooperation in these markets, strengthening their codeshare routes and reciprocal loyalty benefits.

In February 2024, LATAM Airlines Ecuador and the cargo affiliates LATAM Cargo Chile, LATAM Cargo Brazil and LATAM Cargo Colombia, were officially added to the Joint Venture Agreement after completing the required regulatory processes. Ecuador joined Brazil, Chile, Colombia, Paraguay, Peru, and Uruguay in the geographical scope, strengthening connectivity and service quality across the Americas.

In 2024, Skytrax recognized Delta as the Best Airline in North America and LATAM as the Best Airline in South America, each for the fifth consecutive year. These recognitions reaffirm the strong leadership and customer commitment of the airlines in their regions.

The Joint Venture Agreement’s capacity grew by over 19% in 2024 compared to 2023 in terms of ASK, driven by new routes and increased frequencies. Key developments included the new Orlando (United States) - Santiago (Chile) route operated by LATAM and the transition of the Atlanta (United States) - Rio de Janeiro (Brazil) route to year-round service operated by Delta. LATAM also added frequencies to São Paulo (Brazil) - Los Angeles (United States), São Paulo (Brazil) - Orlando (United States), Atlanta (United States) - Lima (Peru), and Santiago (Chile) - Los Angeles (United States) routes, boosting connectivity across the Americas.
Other alliances and material commercial agreements
As of December 31, 2024, LATAM group has ongoing passenger agreements with a total of 57 airlines worldwide, comprising 30 codeshare agreements and 55 commercial agreements, including examples such as TAP Air, Qatar Airways, Aerolíneas Argentinas, Airlink, and Japan Airlines, in addition to the Joint Venture Agreement with Delta Air Lines. These commercial agreements allow us to provide additional benefits to our passengers, including access to a broader network, more flight options with better connection times, and increased potential for developing new routes and adding direct flights to new destinations, as well as to destinations already served by LATAM group.
Subscription of new codeshare agreements
On June 1, 2024, LATAM Airlines Brazil signed a codeshare agreement with Airlink (Pty) Ltd., adding more than 40 new destinations in the African market.

On December 5, 2024, LATAM Airlines Brazil, LATAM Airlines Peru, LATAM Airlines Colombia, LATAM Airlines Paraguay and LATAM Airlines Ecuador signed a codeshare agreement with Aerolíneas Argentinas S.A. This new codeshare agreement will allow offering over 140 destinations in South America, including domestic destinations in Brazil, Argentina, Peru, Colombia and Ecuador, as well as regional routes connecting Brazil, Colombia, Paraguay, Peru, Uruguay and Argentina while also allowing LATAM Pass passengers to redeem and accrue miles.
Passenger Marketing and Sales
LATAM group is committed to creating a culture focused on earning the loyalty, trust and recurrence of its customers. The primary key performance indicator of this organizational cultural system is the Net Promoter Score (“NPS”). To calculate NPS, we conduct a survey after each flight asking passengers how likely they would be to recommend our services to a friend or colleague on a scale of zero to ten. We then calculate NPS as the percentage of customers who are promoters (those who scored nine or ten) minus the percentage of customers who are detractors (those who scored zero to six).
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During 2024 we reached a historical NPS level of 51 points (three points higher than in 2023). Additionally, the NPS of our “Premium Travelers” (LATAM Pass Elite program members and passengers in premium and business cabins) reached a historic record high of 56 points (two points higher than the previous year). Our superior cabin class, Premium Economy, recorded an NPS of 70 points, remaining stable when compared to 2023. These achievements are the result of improvements in the airport, on board and digital experiences provided to our passengers, as well as the benefits of the LATAM Pass program.
We have kept working on the evolution of the customer’s digital experience as the main focus of the e-business area, with the objective to maintain and enhance LATAM customer’s online experience, increase digital services coverage, automate financial processes and boost LATAM.com as the marketplace that attends all travel needs. As a result, during 2024, 61% of LATAM passengers bought their tickets through our digital channel, as compared to 58% in 2023. Moreover, our Digital Customer Satisfaction Score (“CSat”), which is a survey measuring customer satisfaction after using a digital tool, increased by 3 percentage points when compared to 2023, reaching 63% by the end of 2024.
A series of new features and developments have been added to the marketplace to improve our customer’s digital experience: (i) LATAM Flex, an ancillary product that allows passengers to cancel their flights before departure and receive a refund in the form of credits to their LATAM Wallet for future purchases, (ii) a ticket redemption system named Miles + $$ (miles plus money), (iii) personalized offers to meet our customers’ needs with valuable benefits, (iv) a Miles calculator and (v) the incorporation of IATA Pay as an alternative payment method.
LATAM will continue working to be the preferred distribution channel for our clients, positioning our digital experience as a one-stop shop for the purchase and care of all travel needs, accompany our clients either under normal operations or during situation of disruption, ensuring a digital valued experience, with an emphasis on our Premium Travelers and loyalty program members.
In 2024, LATAM group continued transforming the travel experience of its passengers through cabin retrofits. As of December 31, 2024, we have 10 Boeing 777, 9 Boeing 767, 9 Boeing 787-9, and 195 Airbus A319/A320/A321 aircraft with renovated interiors (without considering new fleet additions already featuring the new configurations). This represents a 100% completion rate for the narrow-body fleet and a 54% completion rate for the wide-body fleet. In addition, 24 Boeing 787 are currently in development to be retrofitted with the new cabin interior between 2025 and 2026.
The group also continued advancing Wi-Fi connectivity implementation in the narrow-body fleet operated by affiliates in Chile, Peru, Ecuador and Colombia, achieving a 75% completion rate, equivalent to 92 aircraft equipped with in-flight connectivity. Meanwhile, LATAM Airlines Brazil has fully equipped its narrow-body fleet with Wi-Fi, reaching 100% completion with 141 aircraft connected.
Branding
During 2024, LATAM achieved significant success in brand awareness, closeness, reputation and being considered the first choice among passengers (i.e., when respondents selected LATAM Airlines as their preferred airline among those they know). According to Ipsos, a global leader in brand measurement, as of December 31, 2024, LATAM was ranked as the first choice airline in Chile, Brazil, Peru and Ecuador, and throughout 2024, it significantly reduced the passenger preference gap compared to its competitors in Colombia.

Our brand image continued to strengthen, anchored on pillars such as trust, by providing a fair, empathetic, transparent and straightforward experience to our customers; and expanding our network, experience, and sustainability efforts. Some key initiatives in 2024 that contributed to these achievements included LATAM’s participation in Brazil's Big Brothers Program, involvement in local festivals such as “Cordillera” and “Rock in Rio,” sponsorship of the Copa America USA 2024, an alliance with the Chilean Teletón, a contract with singer Carlos Vives for diverse marketing campaigns, and a partnership with the Ecuadorian National Soccer Team.
Distribution Channels
We are committed to being the preferred choice of our customers and consistently focus on their needs in our decision-making processes. Our distribution channels are organized into two main categories: direct and indirect. Both are designed to enhance their respective platforms to facilitate seamless interaction for our clients, both for sales or service purposes.
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LATAM remains firmly dedicated to the digital transformation of its distribution channels, leveraging technology to improve the customer experience.

Direct channels

LATAM’s direct channels include city ticket offices, contact centers, and digital platforms such as our website, mobile applications, and smart business tools. These channels serve both sales and customer service functions, supporting passengers before, during, and after their journeys.

City ticket offices are equipped to provide additional services to enrich the customer experience. Our multilingual contact centers offer support in six languages (Spanish, English, Portuguese, French, German, and Italian), ensuring comprehensive assistance to our diverse customer base.

As part of our digital strategy, LATAM has developed mobile applications that provide passengers with real-time trip information. These applications improve contingency management, allowing LATAM to deliver timely and transparent information and solutions to customers. Looking ahead, we plan to continue enhancing our digital platforms to support anticipated growth and further streamline the online experience for our customers.

In 2024, 63% of passengers purchased their tickets through one of LATAM’s direct channels, representing a 3 percentage point increase when compared to 2023.

Indirect channels

LATAM’s indirect channels include travel agencies, general sales agents, other airlines’ distribution systems, and online travel agencies. To better serve customers through these channels, LATAM provides travel agencies with various connectivity options, such as Global Distribution Systems (“GDS”), as well as direct connections like “e-LATAM” in Brazil and “NDC by LATAM.” We continuously expand and improve these solutions to enhance the customer experience.

In 2024, 37% of passengers purchased their tickets through one of LATAM’s indirect channels, representing a 3 percentage point decrease when compared to 2023.

During 2024, LATAM intensified its collaboration efforts with travel agencies to further enhance the NDC platform in its core markets. Efforts focused on expanding access to NDC for agencies through various options, including an Application Programming Interface (“API”), a free portal, and partnerships with 24 certified aggregators.

LATAM also signed a strategic agreement with Amadeus, making it the second GDS to offer NDC content to travel agencies, following a similar agreement with Sabre in 2023. The launch of the Sabre connection is anticipated for early 2025, with the development phase for Amadeus already underway. These advancements are expected to strengthen LATAM’s competitive position and support its growth objectives in the coming years.

Direct connections

Direct connections encompass 100% of LATAM’s direct channels (such as our website, mobile applications and ticket offices) as well as digital platforms within indirect channels, including e-LATAM and NDC. These connections allow for direct interactions between LATAM and its customers or travel agencies, providing efficient and transparent access to LATAM’s services and products.

When combining direct channels and direct connections within indirect channels, 87% of passengers purchased their tickets through these platforms in 2024, marking an increase of 7 percentage points when compared to 2023.
Frequent Flyer Program
Our frequent flyer program, LATAM Pass, is a strategic asset and a core source of value that differentiates the group from other carriers, and is also a key element of our marketing and loyalty strategy. The program rewards customer loyalty, and as a result, it generates incremental revenues and promotes customer retention.

LATAM Pass members can qualify for five elite categories: Gold, Gold Plus, Platinum, Black and Black Signature. These categories determine which benefits customers are eligible to receive, including LATAM Pass miles earning bonuses, free upgrades, VIP lounge access and preferred boarding and check-in privileges. Members of the LATAM Pass program accrue LATAM Pass miles for ticket purchases, depending on the dollars spent on tickets.
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Customers of the program can redeem LATAM Pass miles or points for free tickets as well as for other products or services available in our partnerships system and marketplace shopping. The current contract with the financial partner in Chile will end on December 31, 2025, and the Company is evaluating alternatives that, in the best interest of the company, contribute to further improve the LATAM Pass Program and its related partnerships.

As of December 31, 2024, LATAM Pass had approximately 49 million members, representing an increase of 9% compared to 2023. In 2024, LATAM Pass announced the following changes aimed at offering an innovative and personalized experience to its members, with more options for earning and redeeming miles, as well as facilitating access to elite membership categories. We also removed the restrictions that limited the earning of qualifying points exclusively on LATAM flights, allowing members to accumulate qualifying points without restrictions when flying with our partner airlines. Additionally, we have expanded our network of alliances where members can earn qualifying points and have adjusted the thresholds for achieving elite membership status, making it more accessible for our members.

In 2024, LATAM Pass achieved its highest level of customer satisfaction, reaching 58% among all members and 60% among elite members. These efforts to enhance members’ experience when using our services was recognized by the Frequent Traveler Awards, naming LATAM the “2024 Airline Loyalty Program of the Year in the Americas” for the second consecutive year, as well as the “2024 Best Earning & Redemption Ability in the Americas.”

Due to the success of the LATAM Pass Brazil App, which relaunched at the end of 2023, we have achieved approximately 2 million downloads to date; a 4.6 rating in various application stores and excellent levels of member satisfaction. At the end of 2024, LATAM Pass launched the LATAM Pass App in Spanish-speaking countries and made significant improvements to its web platform, to keep members more connected and offer them an extraordinary digital experience.

In December 2024, LATAM Pass announced the launch of “Bonus LATAM Pass” for 2025, which will allow all LATAM Pass members to personalize their journey by choosing additional benefits beyond their membership category. Each time a certain threshold of qualifying points is achieved, a list of benefits is activated so that the member can use them in a future trip for an enhanced travel experience, such as free checked bags, VIP lounge access, qualifying points rollover, and accrual and qualification for a favorite route.
Cargo Operations
The cargo business is operated internationally and domestically by affiliate airlines under the unified LATAM Cargo brand, which has acquired significant market recognition. The cargo operations are made under four of the LATAM group affiliates: LATAM Cargo Colombia, LATAM Cargo and LATAM Cargo Brazil, dedicated exclusively to cargo transport, and LATAM Airlines Ecuador, which, in addition to its passenger operations, as of 2022 was certified as a cargo operator and incorporated dedicated cargo freighters to its operations. We derive our revenues from the transport of cargo through our dedicated freighter fleet and in the bellies of our passenger aircraft.

The cargo business operates a similar route network used by the passenger airline business. As of December 31, 2024, it includes 163 destinations in 31 countries. Out of these destinations, 151 are served by passenger and/or freighter aircraft, while 12 are served only by freighter aircraft. Furthermore, in 2024 the cargo operation’s NPS reached 50 points.

The following table sets forth certain of our cargo-operating statistics for domestic and international routes for the periods indicated:
For the year ended and as of December 31,
2024 2023 2022
ATKs (millions) 8,066.1 7,171.0 6,255.7
RTKs (millions) 4,330.4 3,704.0 3,532.5
Weight of cargo carried (thousands of tons) 998.1 945.5 900.6
Total cargo yield (cargo revenues/RTKs, in U.S. cents) 36.9 38.5 48.9
Total cargo load factor (%) 53.7% 51.6% 56.5%
During 2024, cargo revenues increased by 12.2% compared to 2023 while total cargo capacity increased by 12.5%. Cargo traffic increased by 16.9%, resulting in a 2.0 percentage point increase of the cargo load factor. This increase in capacity was also due to the rise in passengers capacity levels, and the use of aircraft bellies for cargo purposes.
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However, cargo yield fell 4.0% when compared to 2023. As a result, revenues per ATK slightly decreased by 0.2% when compared to 2023, mainly due to lower performance levels in the first half of 2024, followed by a strong recovery in the second half of the year, driven by increased southbound demand from Europe and North America to South America.

LATAM considers its passenger network to be a key competitive advantage due to the synergies between passenger and cargo operations and, accordingly, we have developed a strategy aimed at increasing competitiveness by enhancing the belly offering. The freighter fleet program has two main focus areas: first, to support the group’s belly business, improving its load factor by feeding cargo into passenger routes, and second, to enhance our product offering by providing our customers flexibility in scheduling, origins, destinations and types of cargo. As of December 31, 2024, LATAM cargo affiliates operated 8 Boeing 767-300Fs (factory freighters) and 13 Boeing 767-300BCFs (converted freighters). We intend to operate a combined fleet of 19 Boeing 767-300Fs/767-300BCFs in the future. As a consequence, in the first half of 2025 we plan to sell one Boeing 767-300F and sell an additional Boeing 767-300F in the second half of 2026.

The United States is the main market for cargo traffic to and from Latin America. Besides being the main market for Latin American exports by air, cargo consolidated in the United States accounts for the majority of the goods transported by air to Latin American countries. Miami is the main gateway to and from Latin America and we operated the vast majority of our freighter operations from there. Accordingly, we have headquartered our international cargo operations in Miami. We also utilize passenger flights to and from New York, Los Angeles, Atlanta, Boston and Orlando and our seasonal dedicated freighter services to Chicago. Additionally, using different trucking companies LATAM offers a road-feeder network, connecting our hub in Miami and other online gateways in the United States (for example, Los Angeles, New York, Chicago, and Orlando) with key off-line origins and destinations. LATAM group also transports cargo to and from ten destinations in Europe: Barcelona, Lisbon, London, Milan, Paris, Rome, Frankfurt, Madrid, Brussels and Zaragoza. The first six points are served only via passenger aircraft. Frankfurt and Madrid are served by both passenger and freighter aircraft, while Brussels and Zaragoza are only served through freighter operations. The group offers a road-feeder service within Europe to expand our footprint and balance traffic between our different origins.
    
The main destinations for southbound traffic are Brazil, Chile, Colombia and Peru. Southbound demand is mainly concentrated on a small number of product categories including high-tech equipment, mining equipment, electronics, auto parts and pharmaceuticals.

Chile, Colombia, Peru, Ecuador, and Brazil represent a large part of the northbound traffic. This demand is mainly concentrated on a small number of product categories, such as exports of fish, sea products and fruits from Chile, asparagus and fruits from Peru, and fresh flowers from Ecuador and Colombia.

The largest domestic cargo operations are in Brazil, where LATAM Cargo Brazil is the only wide-body freighter operator, carrying cargo for a variety of customers, including freight-forwarding companies, logistics operators, e-commerce companies and individual consumers.

The cargo business in the region is highly competitive, as international and regional carriers often have spare capacity in their cargo operations. In the region, LATAM group has been able to maintain solid market shares through efficient utilization of the fleet and network. The main competitors can be divided into three categories:

1.hybrid carriers, operating mixed fleets of belly and freighters, such as Air France-KLM-MartinAir, Lufthansa, Qatar, Ethiopian, Korean Airlines and Avianca,
2.pure freighter operators such as Atlas and Cargolux, and
3.belly-only operators such as IAG Group (British Airways, Iberia and their affiliates), American Airlines and United Airlines.
Carriers operating freighters have greater flexibility which allows them to serve a wider variety of markets, diversifying their portfolio while pure belly carriers tend to have more stable service and are usually limited to their countries of origin.
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Cargo-Related Investigations
See “Item 8. Financial Information—Consolidated Financial Statements and Other Financial Information—Legal and Arbitration Proceedings.”
Fleet
General

As of December 31, 2024, LATAM had a total fleet of 347 aircraft, comprised of 326 passenger aircraft and 21 cargo aircraft, including 4 aircraft classified as non-current assets held for sale. Please see Note 13 of our audited consolidated financial statements.
  Number of aircraft in operation
Total Aircraft
 classified as
 Property,
 plant and
 equipment		 Aircraft
 classified as
 Rights of
 use assets		 Average
 term of
 lease
 remaining
 (years)		 Average
 age (years)
Passenger aircraft(1)
Airbus A320-Family Aircraft
Airbus A319-100 40
(2)
 13
(2)
 27 3.23 16.51
Airbus A320-200 135 86 49 5.75 13.84
Airbus A321-200 49 19 30 4.53 10.61
Airbus A320-neo 30 3 27 9.82 3.13
Airbus A321-neo 14 —  14 10.70 0.88
Boeing Aircraft
Boeing 767-300ER 9 9 —  —  16.60
Boeing 787-8 10 4 6 6.54 11.12
Boeing 787-9 27 2 25 7.44 7.48
Boeing 777-300ER 10 10 —  —  13.69
Short-Term Leases
Airbus A330-200 2 —  2 1.16 16.92
Total passenger aircraft 326 146 180 6.38 11.62
Cargo aircraft
Boeing 767-300 Freighter 21
(3)
 20
(3)
 1 6.04 17.36
Total cargo aircraft 21 20 1 6.04 17.36
Total fleet 347 166 181 6.37 11.97
______________________________________________________
(1)All passenger aircraft bellies are available for cargo.

(2)This includes two Airbus A319-100 aircraft classified as non-current assets held for sale. For more information, see Note 13 of our audited consolidated financial statements.

(3)This includes two Boeing 767-300 Freighter aircraft classified as non-current assets held for sale. For more information, see Note 13 of our audited consolidated financial statements.

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LATAM Airlines Group and its affiliates operate various different aircraft types that are suited for our different services, which include short-haul domestic and intracontinental trips as well as long-haul intercontinental flights. The aircraft have been selected based on their ability to effectively and efficiently serve all of these routes while trying to minimize the number of aircraft families that we operate.
For short-haul domestic and continental flights, LATAM Airlines Group and its affiliates operate Airbus A320-family aircraft. The Airbus A320-family has been incorporated into our fleet pursuant to leases and has been acquired directly from Airbus pursuant to various purchase agreements since 1999. For long-haul passengers LATAM Airlines Group and its affiliates operate Boeing 767-300ER, Boeing 787-8 and 787-9 and 777-300ER. Additionally, we also operate A330 aircraft for long-haul flights through a wet lease agreement with Wamos. For cargo flights, we operate Boeing 767-300F aircraft.
Utilization
The average utilization rates of LATAM’s aircraft for each of the periods indicated are set forth below, in hours per day(1).
2024   2023 2022
Passenger aircraft (2)
Boeing 767-300ER 10.1 8.4 5.9
Boeing 787-8/9 12.5 12.2 9.0
Airbus A320-Family 10.7 10.3 8.9
Boeing 777-300ER 12.5 12.7 9.8
Airbus A330-200 13.4 — —
Total passenger aircraft 10.9 10.5 8.7
Cargo aircraft
Boeing 767-300 Freighter 11.8 11.7 12.5
Total cargo aircraft 11.8 11.7 12.5
Total passenger and cargo 11.0 10.5 8.9
______________________________________________________
(1)Utilization rates are calculated by dividing total block hours by total aircraft, excluding subleased aircraft and non-operational aircraft.
(2)Passenger utilization excluded flights in passenger aircraft with only cargo.

Fleet Leasing and Financing Arrangements
LATAM’s fleet financing and leasing structures include borrowing from financial institutions and leasing with financial leases, tax leases, sale-and-leaseback transactions and operating leases. As of December 31, 2024, LATAM group had a total fleet of 347 aircraft, of which 2 Boeing 767-300 Freighter aircraft and 2 Airbus A319-100 aircraft are non-current assets classified as held for sale.

As of December 31, 2024, LATAM group’s fleet was comprised of 47 financial leases, 3 tax leases, 196 operational leases, 2 wet leases and 99 unencumbered aircraft (32 aircraft reserved as collateral for the RCF). Most of LATAM’s financial and tax leases are structured with a 12-year initial term. LATAM has 23 financial aircraft leases supported by the U.S. Export-Import Bank (“EXIM Bank”), 12 supported by the European Export Credit Agencies (the “ECAs”) and 12 commercial financial leases with other entities. LATAM’s lease maturities initially range from 8 to 12 years. Moreover, as of December 31, 2024, LATAM had a total of 190 spare engines, comprising 44 operational leases, 39 engines provided as loan collateral and 107 unencumbered engines (18 engines reserved for RCF). LATAM’s portfolio includes approximately US$1.5 billion in unencumbered assets, including aircraft and additional engines.

LATAM’s aircraft debt, which consists of financial and tax leases, is denominated in U.S. dollars and typically has quarterly amortization payments. Both the financial leases and tax leases have a bank (or a group of banks) as counterparty; however, the tax leases also include third parties.
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As of December 31, 2024, 76% of our aircraft debt has a fixed interest rate and the remaining portion has a floating rate based on USD Term SOFR.

In order to reduce LATAM Airlines Brazil’s balance sheet currency exchange exposure to the Brazilian real, as part of the integration plan following the merger with TAM, LATAM Airlines Brazil sought to transfer the majority of its aircraft under financial leases to LATAM Airlines Group S.A. As of December 31, 2024, only 1 aircraft is subject to financial lease by LATAM Airlines Brazil. See “Item 5. Operating and Financial Review and Prospects-B. Liquidity and Capital Resources-Sources of financing” and “Item 5. Operating and Financial Review and Prospects-B. Liquidity and Capital Resources-Capital Expenditures” for a description of expected sources of financing and expected expenditures on aircraft.

The leases provide us with flexibility to adjust our fleet to demand volatility that may affect the airline industry and therefore we consider such arrangements to be of great value to our strategy and financial performance. The aircraft’s financial debt as of December 31, 2024 for all remaining periods through maturity (the latest of which expires in December 2036) was US$1,272 million. See “Item 5. Operating and Financial Review and Prospects—Contractual Obligations—Long Term Indebtedness”.

Under the aforementioned leases, LATAM is responsible for all maintenance, insurance and other costs associated with operating these aircraft. The Company has not made any residual value or similar guarantees to our lessors. There are certain guarantees and indemnities to other unrelated parties that are not reflected on the Company’s balance sheet, but we believe that these will not have a significant impact on our results of operations or financial condition.

See Note 31 to our audited consolidated financial statements for a more detailed discussion of these commitments.

Maintenance
LATAM Maintenance
LATAM Maintenance possesses a diverse range of facilities and capabilities, spanning from major inspections and overhauls, to routine or corrective maintenance tasks that are conducted between each flight.

The heavy maintenance, line maintenance and component shops are equipped and certified to service the group’s fleet of Airbus and Boeing aircraft. LATAM group’s maintenance capabilities enable flexibility in scheduling airframe maintenance, offering an alternative to third-party maintenance providers. Approximately, 4,300 LATAM Maintenance professionals ensure the fleet operates safely and in compliance with all local and international regulations. LATAM group strives to provide the best experience to its passengers through the highest standards of safety, on-time performance and cabin image and functionality.

The heavy maintenance and component repair shop facilities are located in São Carlos (Brazil) and Santiago (Chile), adding up to a total of twelve heavy maintenance production lines, including painting capabilities, and component repair shops, including landing gear, hydraulics, pneumatics, avionics, electroplating, composites, wheels and brakes, emergency equipment, galleys and structures.

LATAM Maintenance’s continuous improvement efforts are focused on reducing costs and enhancing reliability. In addition to the LEAN-Six Sigma project, aimed to increase technician productivity, optimize inventory, diminish repair turn-around times and develop new internal repair capabilities, are working on a full digital transformation in collaboration with McKinsey and Thoughtworks. These projects are developed using the AGILE methodology, with a focus on exploring and incorporating new technologies that are most suitable for each specific case, such as data analytics and artificial intelligence.
LATAM Line Maintenance
The Line Maintenance Network serves over 170 locations and carried out over 2.8 million man-hours of preventive and corrective maintenance tasks on the LATAM fleet during 2024. We also rely on certified third-party services in many of our international destinations where it is economically convenient, such as in Lisbon, (where we are served by Nayak), and London (served by KLM) among others.

LATAM group’s Line Maintenance Network has hangar facilities in Santiago, São Paulo (Conhongas or “CGH,” and Guarulhos or “GRU”), Lima, Miami and Bogota, among others. These multiple locations improve the flexibility of the Line Maintenance Network by enabling the execution of tasks that might be restricted because of adverse weather conditions and environmental authority restrictions.
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The Line Maintenance teams perform heavy maintenance in their hangars located at GRU and Lima, taking advantage of the technical skills and available infrastructure. These facilities have the ability to replace landing gear for both the Boeing 777 and Airbus 320 fleets, as well as conduct C Checks for the Boeing 777 and special Checks for the Airbus A320-family, such as the 24MO and other projects.

In order to strictly comply with applicable regulations, all of our maintenance operations are supervised and audited by the local authorities and international entities around the Network, such as DGAC, Agência Nacional de Aviação Civil in Brazil (“ANAC”), the Federal Aviation Administration in the United States (“FAA”), the International Air Transport Association Operational Safety Audit (“IOSA”) (by the International Air Transport Association or “IATA”) and the International Civil Aviation Organization (“ICAO”), among others. The audits are conducted in connection with each country’s certification procedures and enable us to perform maintenance for the aircraft types registered in the certificating jurisdictions. Our repair stations hold FAA Part-145 certifications under these approvals.

To ensure our technical personnel is properly qualified, we have developed extensive training programs at our Technical Training Centers in Chile and Brazil. Our focus is to constantly improve the skills of our technicians in order to maintain our prime safety and reliability standards.
LATAM MRO
The two main MRO (“Maintenance, Repair and Overhaul”) facilities, one in São Carlos (Brazil) and one in Santiago (Chile), are equipped and certified to service our fleet of Airbus and Boeing aircraft and provided 88.0% of all heavy maintenance services that LATAM demanded in 2024, effectively executed 1.54 million man-hours. LATAM MRO is also responsible for the planning and execution of aircraft redeliveries. The services not executed internally are contracted to our extensive network of MRO partners around the globe. LATAM occasionally performs certain heavy maintenance and component services for other airlines or OEMs.
The MRO São Carlos (LATAM Airlines Brazil MRO), is prepared to service up to nine aircraft (narrow and wide body) simultaneously with a dedicated hangar for stripping and painting. In this facility we also have 23 technical component shops, including a full landing gear repair & overhaul shop, hydraulics, pneumatics, electronics, electrical components, electroplating, composites, wheels & brakes, interiors and emergency equipment shops. MRO São Carlos is certified and audited by major international aeronautical authorities such as the FAA, the European Aviation Safety Agency (“EASA”), ANAC Brazil, the Chilean DGAC, the Argentinean Administración Nacional de Aviación Civil (“ANAC Argentina”), the Ecuadorian Dirección General de Aviación Civil (“DGAC”), the Paraguayan Dirección Nacional de Aeronautica Civil (“DINAC”), and Transport Canada (“TC”), among others, for Heavy Maintenance and Components Repair and Overhaul for the Airbus A320-family and Boeing 767. The MRO also has some minor capabilities for the repair and overhaul of Boeing 777 and 787 components. MRO São Carlos includes its own support engineering capabilities and a full technical training center.
In MRO Santiago, located near Comodoro Arturo Merino Benítez International Airport in Santiago, we have two hangars capable of servicing two wide body aircraft and two narrow body aircraft simultaneously. MRO Santiago is certified and audited by FAA, ANAC Brazil, DGAC, ANAC Argentina and DGAC Ecuador, among others, for Heavy Maintenance for the Airbus A320-family (A318, A319, A320 and A321) and Boeing 767-787. MRO Santiago has 11 shops prepared to support hangar activities such as cabin shops, galleys, structures, composite materials, avionic, wheels & brakes.
We also have the capability to service mid-term checks at the maintenance base in Lima for the Airbus A320-family and at the Guarulhos maintenance base for the Airbus A320-family and Boeing 777, including C-Checks for the Boeing 777.
During 2024, LATAM MRO’s executed 435 services, including C checks (209) and Special Checks (226) for the LATAM fleet.
LATAM group’s Corporate Safety and Security Management
LATAM group’s Corporate Safety and Security Management is comprised of four areas: Safety, Security, Occupational Safety, and Emergency Response Management (ERM), which work in close collaboration with our operational and support areas to achieve the Company’s purpose by ensuring acceptable levels of safety and security in an efficient manner, balancing the continuity of our operations with the well-being of our passengers and collaborators, with the objective that all of them arrive safely at their destination.
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During 2024 we saw a steady increase in operations, marked by the launch and resumption of routes for both passengers and various cargo services. These developments required thorough on-site inspections and management evaluations to validate compliance with safety and security requirements. To address the new challenges faced by the Company, its affiliates and the industry, the LATAM Corporate Safety and Security department enhanced its data analytics capabilities to support decision-making processes. It also integrated advanced technology into process supervision to mitigate undesired events across various operational areas. This approach included monitoring preventive and predictive indicators linked to potential risks, grounded in robust management systems that support LATAM group’s commitment to safety and security.
Organizational Structure of LATAM Safety and Security Vice-Presidency
Safety Management
The Safety Management Departments ensure that providing safe and reliable air service remains LATAM group’s highest priority. Given the operational complexity, as well as the multicultural challenges that we face, LATAM group concentrates its safety management activities under the umbrella of a coordinated structure, which is responsible for the implementation and oversight of unified policies and procedures throughout the group.
The core foundation of this department lies within its robust Safety Management System (“SMS”), which is built upon four main components (Policies and Objectives, Risk Management, Safety Assurance, and Safety Promotion). These components give the SMS a proper structure and provide management with the necessary tools to oversee the safety of our operations. For example, through Flight Data Monitoring (“FDM”), also known as Flight Operations Quality Assurance (“FOQA”), we are able to capture, analyze, and even visualize the data recorded during revenue flights and compare it with the Company’s Standard Operating Procedures (“SOPs”). In parallel, the Line Operations Monitoring Program (“LOMP”) permits us to monitor Flight Crew performance and detect errors ahead of time. As a result of these proactive activities, we intend to improve overall safety, increase maintenance effectiveness, and reduce operational costs. The group’s SMS is documented, available internally to all employees, and it provides the guidelines and responsibilities that each employee must meet, regardless of function or hierarchy, which in turn assures our commitment towards safety as a whole. Furthermore, IOSA certification ensures the proper qualification of our employees, including the provision of a Senior Safety Manager responsible for each system implementation within the Safety Department, as well as defining standardized procedures for measuring the quality of services provided by third-party companies and contractors.
In 2024, LATAM group focused on enhancing its performance indicators through a continuous improvement process. This resulted in the group achieving its record levels of operational safety, effectively reducing risks associated with Runway Safety, including Runway Excursion, Mid-air Collision, Controlled Flight into Terrain (“CFIT”), Loss of Control In-Flight, and others.

To further enhance operational safety, LATAM group has introduced Micro Learnings, short online training courses aimed at complementing gatekeeper feedback and enhancing specific skills related to observed safety events. A total of 10 courses are already available, and cover aspects of the operations like aircraft energy management, monitoring skills and workload management.

In 2024, we continued to advance the Safety II project by incorporating a tool designed for the rapid identification of flight phases, operations at specific airports, or fleet operations that may present opportunities for improvement relative to established standards. During the second half of 2024, we also focused on creating a risk modeling tool based on the variables that most significantly impact the operational performance of a flight.

In 2024, LATAM group assessed its safety culture through the IATA I-ASC survey, which measures elements like informed culture and reporting culture. The 2024 survey results demonstrated a robust safety culture, improved performance compared to previous surveys and also positioned the group in the first quartile of the surveyed companies, surpassing the industry benchmark across all sectors under analysis. These integrated actions reaffirm LATAM group’s commitment to safety and the continuous improvement of its operations.

In 2024, LATAM group implemented the Unified Pre-IOSA, engaging all ten group operators in a systematic assessment of the Company’s critical processes and main safety risks, based on the new “IOSA Risk-Based” methodology. This internal audit aims to enhance group visibility, improve quality and operational safety, and adequately prepare for the official audit scheduled for 2025.
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Always focusing on safety, we expect this new challenge to strengthen our group and drive a continuous improvement and effectiveness in our processes.
Security Management
The Security Management Department is responsible for coordinating the security of LATAM group’s passengers, employees, aircraft, equipment and facilities. It safeguards the group’s infrastructure and assets while protecting people against threats or unlawful action, encouraging the reporting and handling of suspicious situations that could impact operations.

The Security Management System (“SeMS”) has strengthened each of its pillars through ongoing improvement and performance monitoring. These efforts aim to establish clear guidelines and ensure compliance with civil aviation procedures and regulatory requirements, in collaboration with authorities and other relevant stakeholders.

Our commitment with security extends to both passengers and cargo operations, supported by processes such as reporting, communication, day-to-day operational effectiveness, contingency planning, continuous supervision, and a drive for operational excellence. These measures aim to provide an appropriate and timely response to threats or unlawful interference affecting LATAM group’s operations, facilities and infrastructure, keeping risk levels within acceptable limits.

During 2024, major challenges arose from geopolitical and socioeconomic instability, which led to mass migration and operational difficulties at certain transit airports. In addition, a significant increase in disruptive passenger behavior and heightened regional crime rates prompted new risk analyses and stricter security measures.

In 2024, security service contracts were tendered simultaneously in several countries aiming to consolidate providers by region to improve performance management and strengthen contractual requirements. New Service Agreements (“NSAs”) were also established to standardize service levels and foster a shared commitment to quality, ensuring that each security process is executed with rigor and care for the customer.

Among the key projects, we achieved the digitization of support processes and the implementation of more user-friendly, effective passenger interview methodologies (an initiative validated by the TSA), which strikes a balance between regulatory compliance and a positive travel experience. In the cargo business, we adopted new technologies to monitor every transfer point, preventing losses and unlawful interference via traceability checkpoints and security camera analytics. This approach strengthened investigative and predictive capabilities, focusing on mitigating insider threats. Additionally, we achieved significant progress in unifying LATAM group’s global access control methods across multiple countries. We introduced a new policy to define the technical standards for Security Control Centers (“SCCs”), enabling them to fulfill their expanded role with improved proactive and preventive capabilities.

Finally, we achieved structural cost optimization through improved negotiations, the integration of technology, and task synergies with other departments.
Health Safety Environmental Management (HSE)
Occupational safety management is responsible for defining guidelines to assess and mitigate occupational and health risks for workers. This includes establishing standards, supporting operations, and advising on the implementation of relevant procedures, while also monitoring compliance, evaluating the effectiveness of measures taken in response to critical events and risks. In addition, it ensures adherence to applicable regulations and promotes worker well-being and safety through trainings and awareness programs.

Although the injury rate (a long-tracked conventional metric) has continued to decline and stabilize across operational areas, the focus in 2024 shifted to indicators designed to identify the potential for serious accidents and enable preventive steps before the occurrence of such events. LATAM group has increased efforts to identify unsafe conditions in operations, aimed at effectively addressing and resolving such conditions.

To achieve these goals, LATAM group relies on active observers and empowered supervision, whose primary mission is to safeguard and protect the physical and emotional well-being of employees. Complementing this constant oversight, new technological tools have begun to be incorporated to detect critical risks and enable timely intervention. Activities are monitored and actions are triggered through security camera systems.

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Together, these measures facilitate the analysis of the potential impact of serious and fatal injuries, allowing LATAM group to anticipate conditions that could lead to accidents.

Finally, in 2024 we published the first version of the Occupational Safety Management System (“OSMS”). This milestone represents a major step toward standardizing management practices and ensuring the implementation of safe work behavior guidelines at all levels.
Emergency Response Management (ERM)
LATAM Emergency Response Management is responsible for overall corporate Emergency Response Plan (“ERP”) implementation. It has been designed to comply with airline responsibilities (as defined by ICAO) and for overall management, command, and control of the crisis response. LATAM ERP sets procedures to deal with different scenarios, such as aircraft accidents, serious incidents, natural disasters, union strikes, and pandemics. ERP establishes specific teams, procedures, and resources to mitigate the impact of these emergencies on our passengers, their families and for caring for others affected, besides ensuring the continuity of our operations. The ERP is an essential tool to meet the needs of those who need it most, and we have different levels of teams prepared to be activated (but are not limited to): Emergency Process and Procedures, Emergency Control Centers, a Relatives & Passengers Assistance Team, a Notification Team, Aircraft Recovery, and a dedicated “Go Team” that can be activated and address an emergency situation.

Fuel Supplies
Fuel costs comprise one of the single largest categories of our operating expenses. In 2024, total fuel costs represented 34.5% of our total operating expenses. As of December 31, 2024, crude oil prices decreased compared to December 31, 2023. Our average into-wing price for 2024 (fuel price plus taxes and transportation costs, including hedging and gains/losses) was US$2.9 per gallon, representing a decrease of 11.3% from the 2023 into-wing average fuel price. We can neither control nor accurately predict the volatility of fuel prices. Despite the foregoing, we believe it is possible to partially offset the price volatility risk through our hedging and fuel surcharge programs, which are in place in both our passenger and cargo business. For more information, see “Item 11. Quantitative and Qualitative Disclosures About Market Risk—Risk of Fluctuations in Fuel Prices.”
The following table details our consolidated fuel consumption and operating expenses, after related hedging gains and losses (which exclude fuel costs related to charter operations because fuel expenses are covered by the entity that charters the flight) for the last three years.
For the year ended December 31
2024 2023 2022
Fuel consumption (thousands of gallons) 1,357,064.1 1,195,029.7 1,017,158.6
ASK (millions) 157,930.8 137,250.5 113,851.9
Fuel gallons consumed per 1,000 ASK 8.6 8.7 8.9
Total fuel costs (US$ thousands) 3,970,077 3,947,220 3,882,505
Cost per gallon (US$) 2.9 3.3 3.8
Total fuel costs as a percentage of total operating expenses 34.5% 37.2% 40.3%
In our fuel supply agreements, we manage different price structures and price update calculations. The main price structure is Jet Fuel plus fixed fees and taxes, and the main fuel price updates occur on a weekly, bi-weekly and monthly basis. Brazil, our largest market, bases its price on a refinery posting updated every month, which is set in Brazilian real per liter, plus fees and taxes. Refinery prices in Brazil have stabilized and matched a more transparent import parity model, creating a more competitive and predictable market for the region. However, Brazil continues to have higher taxes compared to other markets, which impacts the overall costs.
The fuel supply agreements vary by airport and are distributed among 25 suppliers. Our fuel consumption volume is mainly concentrated in Brazil (41%), Chile (16%), the United States (10%), Peru (12%), and Colombia (6%). LATAM has consistently focused on strengthening its fuel supply agreements, leveraging restructuring opportunities and operational improvements. Through strategic negotiations with global fuel suppliers, LATAM secured long-term agreements with favorable terms and enhanced competitive positioning. In recent years, these efforts included improved credit terms and expanded supplier options across key markets, such as Brazil, Colombia, Argentina, Peru, Chile, and major European airports. In 2024, the fuel supply contracts for Colombia, Argentina, Peru, Chile and major European airports were renegotiated and all of them resulted in better payment conditions leveraged by LATAM’s strong financial results.
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Additionally, the supply contract for Brazil was renegotiated to further improve credit terms and develop a second supplier for the country, dividing its volume and providing additional flexibility to the operation as well as creating competition for the future. The negotiations in Colombia and Chile also resulted in more competition, by adding other sources of supply, with favorable commercial conditions.

LATAM has continuously worked to enhance its fuel supply strategies, fostering competition and ensuring access to diverse sources. In Chile and Peru, the adoption of an import model alongside local refinery supply created a more competitive market. In Brazil, LATAM pioneered a jet fuel import project, securing pipeline capacity to supply São Paulo’s Guarulhos Airport and stabilizing refinery prices through this initiative. By late 2023 and early 2024, LATAM successfully renewed pipeline capacity, ensuring continued access to alternative supply options. Additionally, LATAM collaborated with industry organizations during the global crisis to secure cost reductions in key markets like Bolivia and Colombia. Despite challenges such as refining decreases and rising import costs in Europe during 2022 and 2023, LATAM maintained supply stability. Finally, during 2024, LATAM was able to introduce a second source of imported fuel in Chile, which created more competition among suppliers which ultimately would create better market conditions for LATAM.

As part of a comprehensive energy efficiency initiative, the LATAM group worked with a team of stakeholders to generate a streamlined fuel efficiency program (the “LATAM Fuel Efficiency Program”), which encompasses a wide range of different innovations and technologies for fuel efficiency:
•In our efforts to modernize our fleet, we have invested in more modern and efficient aircraft, such as the Boeing 787, the Airbus A320neo and the Airbus A321neo. We have also undertaken investments to retrofit a portion of our Airbus A320 fleet to allow for more efficient standard operational procedures. As of December 31, 2024, 85 Airbus aircraft of the A320-family are still to be received, with deliveries scheduled between 2025 and 2030, and 15 Boeing 787 Dreamliner aircraft remain to be received with deliveries scheduled between 2027 and 2030.
•LATAM has continuously implemented weight reduction measures to optimize fuel efficiency and reduce costs. These efforts include minimizing onboard water, using ultra-light service carts, optimizing fuel loads based on destination, and improving weight distribution for an optimal center of gravity. Additionally, freight factor improvements have been prioritized by integrating passenger and cargo services. The removal of in-flight magazines in 2019 and 2020 saved nearly 50 kg per flight, while regulatory changes in Brazil and, later, across Spanish-speaking countries standardized fuel policies, significantly reducing unnecessary route reserve fuel. In 2024, LATAM launched the “IFE Removal” project, aimed at removing outdated in-flight entertainment components, such as overhead screens, from over 150 Airbus A320 Family aircraft by 2026, further reducing more than 100 kg per aircraft.
•LATAM has continuously enhanced its in-house LATAM Pilot Tools app to support flight crews with personalized feedback on efficiency and safety indicators, such as fuel usage and ground consumption. Over time, the app has evolved to include features like fuel efficiency tracking and KPI visibility, generating significant savings and improving operational performance. In 2024, LATAM focused on further enhancing the app by refining user experience and deepening pilots’ engagement with their efficiency indicators, reinforcing its commitment to sustainability and fuel optimization.
•Standardized operational procedures have been implemented for every stage of the flight (taxiing, climb, cruise, approach, and landing). For example, changes in climb profiles that generate savings with minimal changes in the flight crew's workload, or minimizing the use of the auxiliary power unit when an aircraft is on the ground.
•As of 2024, LATAM implemented an “APM” (Aircraft Performance Monitoring), which analyzes all flight data and provides real-time performance insights for each aircraft. The APM identifies and monitors maintenance opportunities to reduce fuel consumption, including frequent engine or wing washes, aileron and flap rigging, and it also measures the drag reduction impact of external influences, such as painting procedures.
•Various aircraft retrofits have taken place, among them, engine wiring that allows the reduction of fuel consumption during taxi operations, Auxiliary Power Units replacements for more efficient models, and software updates that improve fuel consumption. As of 2024, LATAM signed an agreement with Lufthansa Technik for the installation in 5 B777 aircraft of Aeroshark Technology, a bionic film that successfully mimics the skin of sharks and optimizes airflow, thus enabling a reduction of up to 1% in fuel flow. As of December 31, 2024, two aircraft were successfully retrofitted with Aeroshark Technology.
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•LATAM has continuously improved flight planning processes through tools like Full Tracks, developed by the Fuel Team with support from Operations and Safety, to enhance programming and optimization of flight plans. Centralized and standardized fuel planning policies across dispatch centers allowed for unified criteria and better performance tracking. Operational parameters, including those related to tankering, were revised in 2023 to maximize efficiency, particularly leveraging the arrival of A320neo and A321neo aircraft, supported by the Tail Assignment tool for optimal fleet use.
•Since 2020, LATAM has collaborated with the Advanced Analytics team to develop machine learning models for accurate weight and extra fuel forecasts, as well as optimizing flight routes. Route optimization also benefited from reduced overflight costs in certain regions, enabling shorter trajectories for long-haul flights. LATAM continues to expand these models to provide critical recommendations for both flight planning and in-flight operations.
•In 2022, LATAM implemented Airbus Descent Profile Optimization (“DPO”) software across 200 A320 aircraft, reducing each aircraft’s annual fuel consumption by 100 tons and CO2 emissions by 300 tons. This initiative is a significant step in LATAM’s sustainability efforts.
•LATAM introduced new air conditioning units (“ACUs”) and ground power units (“GPUs”), working closely with ground handling, airports and operations teams to significantly surpass pre-pandemic performance levels. Additionally, the implementation of IATA Service Level 2 procedures in 2023 ensured more efficient and punctual aircraft operations.
As a result of LATAM’s continuous commitment with sustainability, LATAM Airlines Group was recognized between 2014 and 2019 by the Dow Jones Sustainability Index as one of the world’s leading companies in eco-efficiency (due to LATAM Airlines Group and several of its affiliates filing for Chapter 11 and the LATAM ADRs delisting from the New York Stock Exchange, the group was not eligible to be considered for the Dow Jones Sustainability Index between 2020 and 2023). The magnitude of this program has allowed us to reduce operational costs along with the improvement of environmental performance, and to enhance environmental awareness both within the group and externally.
In November 2024, the Corporate Sustainability Assessment (“CSA”) by S&P Global recognized LATAM Airlines Group as the most sustainable airline in the Americas and the fifth worldwide. This recognition and the results of its CSA allowed LATAM to rejoin the prestigious Dow Jones Sustainability Index, and its reinstatement as a member on the index’s Chilean list and the MILA Pacific Alliance list, which highlights companies from Chile, Colombia, and Peru.
Ground Facilities and Services
The main ground facilities operations are based at the Guarulhos Airport in São Paulo, Brazil. The Brazilian affiliate also operates significant ground facilities and services at its headquarters located at Congonhas International Airport in São Paulo, Brazil.
LATAM group also has significant operations at the Comodoro Arturo Merino Benítez International Airport in Santiago, Chile, where we operate hangars, aircraft parking and other airport service facilities pursuant to concessions granted by the DGAC and other outsourced concessions. We also maintain a customs warehouse at the Comodoro Arturo Merino Benítez International Airport, additional customs warehouses in Chile and operate cargo warehouses at the Miami International Airport to service our cargo customers. Our facilities at Miami International Airport include corporate offices for our cargo and passenger operations and temperature-controlled and freezer space for imports and exports. We also operate from various other airports in Chile and abroad.
We incur certain airport usage fees and other charges for services performed by the various airports where we operate, such as air traffic control charges, take-off and landing fees, aircraft parking fees and fees payable in connection with the use of passenger waiting rooms and check-in counter space.
Ancillary Airline Activities
In recent years, LATAM group has been developing different initiatives to increase its ancillary revenues generated by its airline operations. The implementation of these initiatives aims to offer a better on-board experience, while allowing passengers to customize their journey. LATAM group’s customers are able to purchase additional services such as extra luggage, preferred seating options, upgrades to our Premium cabins, among others.
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In addition to airline operations, LATAM generates revenues from a variety of other activities, including aircraft leases (including subleases, dry-leases, wet-leases and capacity sales to certain alliance partners) and charter flights, tours, maintenance services for third parties, handling, storage, customs services, income from other non-airline products (LATAM Pass) and other miscellaneous income. In 2024, LATAM generated other income of US$200.7 million from these activities.
Insurance
LATAM group maintains aviation insurance policies as required by law, aircraft financing, and leasing agreements, for its entire fleet (aircraft that LATAM and its affiliates own, operate, and are responsible for).

These policies provide coverage for aircraft hulls (including war risks and spares), third-party legal liability, cargo, baggage, injuries, property damage, and loss of cargo. LATAM’s policies are in full force and are renewed annually along with IAG Group (British Airways, Iberia and their affiliates), which allows LATAM group to obtain coverage at the best level of the aviation industry.

LATAM group also insures its physical properties and equipment from theft, fire, flood, earthquake, hurricane, and other damages. In general, LATAM group’s vehicles are insured against the risk of robbery, damages, fire, and general liabilities. Additionally, LATAM maintains a casualty insurance program that provides coverage worldwide.
Information and Digital Technologies
The LATAM website and mobile app launched in 2021 and 2022 enabled customers to complete their purchases in less time and manage payments, refunds, and compensations through a digital wallet, all while seeking to strengthen its ancillary offerings.

In this regard, in 2024, 9 out of 10 passengers who changed their itineraries used a digital channel for management of their trip. Additionally, as of December 31, 2024, 83% of refunds were processed through our digital channels, with 98% of those being paid within the Service Level Agreement (“SLA”) of seven business days. Furthermore, improvements in digital customer experience and service resulted in a 3 percentage point increase in our Digital CSat, reaching 63% by the end of 2024.

During the same period, 9 out of 10 passengers arrived at the airport fully prepared to fly due to the use of digital solutions that enabled them to self-manage their trip. This includes various steps such as check-in, purchasing additional baggage and seats, selecting seats, and the bidding and purchasing of cabin upgrades.

LATAM continued to work on positioning latam.com as a single marketplace for all travel needs while boosting the sales of air ancillaries and packages. Consequently, as of December 2024, latam.com reached an annual market penetration of 61%, which reflects the percentage of passengers who purchased through LATAM’s direct sales channel latam.com, and continued working on the connection to the IATA’s NDC to strengthen connections with indirect channels while maintaining direct connectivity.

LATAM has incorporated a dedicated analytics and AI taskforce focused on network optimization, personalization of flight offers, fuel consumption and predictive maintenance.

Furthermore, we have highlighted the adjustment of strategies to reduce our technology supplier footprint by renegotiating key contracts to ensure flexibility and cost efficiency.

For information on cybersecurity, please see “Item 16.K Cybersecurity Management and Strategy.”
Regulation
Below is a brief reference to the material effects of aeronautical and other regulations in force in the relevant jurisdictions in which we operate. We are subject to the jurisdiction of various regulatory and enforcement agencies in each of the countries where we operate. We believe we have obtained and maintained the necessary authority, including authorizations and operative certificates where required, which are subject to ongoing compliance with statutes, rules and regulations pertaining to the airline industry, including any rules and regulations that may be adopted in the future.
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The countries where we carry out most of our operations are contracting states and permanent members of the ICAO, an agency of the United Nations established in 1947 to assist in the planning and development of international air transportation. The ICAO establishes technical standards for the international aviation industry. In the absence of an applicable local regulation concerning safety or maintenance, the countries where we operate have incorporated by reference the majority of the ICAO’s technical standards. We believe that we are in material compliance with all such relevant technical standards.
Environmental and Noise Regulation
There are no material environmental regulations or controls in the jurisdictions in which we operate imposed upon airlines, applicable to aircraft, or that otherwise affect us, except for environmental laws and regulations of general applicability.
In Chile, Brazil, Colombia, Ecuador, Peru, among others, aircraft must comply with certain noise restrictions. LATAM’s aircraft substantially comply with all such restrictions, having implemented at least the standard known as “Stage 4 Requirements” across its fleet.
In 2016, the ICAO adopted a resolution creating the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA), providing a framework for a global market-based measure to stabilize CO2 emissions in international civil aviation (i.e., civil aviation flights that depart in one country and arrive in a different country). With the adoption of this framework, the aviation industry became the first industry to achieve an agreement with respect to its CO2 emissions. The scheme, which defines a unified standard to regulate CO2 emissions in international flights, started being implemented in various phases by ICAO member states in 2021 (with the voluntary member states).
Safety and Security
Our operations are subject to the jurisdiction of various agencies in each of the countries where we operate, which set standards and requirements for the operation of aircraft and its maintenance.
In the United States, the Aviation and Transportation Security Act requires, among other things, the implementation of certain security measures by airlines and airports, such as the requirement that all passenger bags be screened for explosives. Funding for airline and airport security required under the Aviation Security Act is provided in part by a US$5.60 per segment passenger security fee, subject to a US$11.20 per round-trip cap; however, airlines are responsible for costs in excess of this fee. Implementation of the requirements of the Aviation Security Act has resulted in increased costs for airlines and their passengers. Since the events of September 11, 2001, the United States Congress has mandated, and the TSA has implemented, numerous security procedures and requirements that have imposed and will continue to impose burdens on airlines, passengers and shippers.
Below are some specific aeronautical regulations related to route rights and pricing policy in the countries where we operate.
Chile
Aeronautical Regulation
Both the DGAC and the Junta de Aeronáutica Civil (“JAC”) oversee and regulate the Chilean aviation industry. The DGAC reports directly to the Chilean Air Force and is responsible for supervising compliance with Chilean laws and regulations relating to air navigation. The JAC is the Chilean civil aviation authority. Primarily on the basis of Decree Law No. 2,564, which regulates commercial aviation, the JAC establishes the main commercial policies for the aviation industry in Chile and regulates the assignment of international routes and the compliance with certain insurance requirements, while the DGAC regulates flight operations, including personnel, aircraft and security standards, air traffic control and airport management. We have obtained and maintain the necessary authority from the Chilean government to conduct flight operations, including authorization certificates from the JAC and technical operative certificates from the DGAC, the continuation of which is subject to the ongoing compliance with applicable statutes, rules and regulations pertaining to the airline industry, including any rules and regulations that may be adopted in the future.
Chile is a contracting state, as well as a permanent member, of the ICAO. Chilean authorities have incorporated ICAO’s technical standards for the international aviation industry into Chilean laws and regulations. In the absence of an applicable Chilean regulation concerning safety or maintenance, the DGAC has incorporated by reference the majority of the ICAO’s technical standards. We believe that we are in material compliance with all such relevant technical standards.
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Route Rights
Domestic Routes: Chilean airlines are not required to obtain permits in order to carry passengers or cargo on any domestic routes, but only to comply with the technical and insurance requirements established respectively by the DGAC and the JAC. There are no regulatory barriers that would prevent a foreign airline from creating a Chilean subsidiary and entering the Chilean domestic market using that subsidiary. On January 18, 2012, the Secretary of Transportation and the Secretary of Economics of Chile announced a unilateral opening of the Chilean domestic skies. This was confirmed in November 2013, and has been in force since that date.
International Routes: As an airline providing services on international routes, LATAM is also subject to a variety of bilateral civil air transportation agreements that provide for the exchange of air traffic rights between Chile and various other countries. There can be no assurance that existing bilateral agreements between Chile and foreign governments will continue, and a modification, suspension or revocation of one or more bilateral treaties could have a material adverse effect on our operations and financial results.
International route rights, as well as the corresponding landing rights, are derived from a variety of air transportation agreements negotiated between Chile and foreign governments. Under such agreements, the government of one country grants the government of another country the right to designate one or more of its domestic airlines to operate scheduled services to certain destinations of the former and, in certain cases, to further connect to third-country destinations. In Chile, when additional route frequencies to and from foreign cities become available, any eligible airline may apply to obtain them. If there is more than one applicant for a route frequency, the JAC awards it through a public auction for a period of five years. The JAC grants route frequencies subject to the condition that the recipient airline operates them on a permanent basis. If an airline fails to operate a route for a period of six months or more, the JAC may terminate its rights to that route. International route frequencies are freely transferable. In October 2023, a public auction was held by JAC for 13 international frequencies for the Santiago – Lima route where three Chilean airlines participated, LATAM won ten of thirteen, for which we paid US$ 315.000.
Airfare Pricing Policy
Chilean airlines are permitted to establish their own domestic and international fares without government regulation. For more information, see “-Antitrust Regulation” below. In 1997, the Antitrust Commission approved and imposed a specific self-regulatory fare plan for our domestic operations in Chile consistent with the Antitrust Commission’s directive to maintain a competitive environment. According to this plan, we must file notice with the JAC of any increase or decrease in standard fares on routes deemed “non-competitive” by the JAC and any decrease in fares on “competitive” routes at least 20 days in advance. We must file notice with the JAC of any increase in fares on “competitive” routes at least 10 days in advance. In addition, the Chilean authorities now require that we justify any modification that we make to our fares on non-competitive routes. We must also ensure that our average yields on a non-competitive route are not higher than those on competitive routes of similar distance.
Peru
Aeronautical Regulation
The Peruvian Dirección General de Aeronáutica Civil (the “PDGAC”) oversees and regulates the Peruvian aviation industry. The PDGAC reports directly to the Ministry of Transportation and Communications and is responsible for supervising compliance with Peruvian laws and regulations relating to air navigation. In addition, the PDGAC regulates the assignment of national and international routes, and the compliance with certain insurance requirements, and it regulates flight operations, including personnel, aircraft and security standards, air traffic control and airport management. We have obtained and maintain the necessary authorizations from the Peruvian government to conduct flight operations, including authorization and technical operative certificates, the continuation of which is subject to the ongoing compliance with applicable statutes, rules and regulations pertaining to the airline industry, including any rules and regulations that may be adopted in the future.
Peru is a contracting state and a permanent member of the ICAO. The ICAO establishes technical standards for the international aviation industry, which Peruvian authorities have incorporated into Peruvian laws and regulations. In the absence of an applicable Peruvian regulation concerning safety or maintenance, the PDGAC has incorporated by reference the majority of the ICAO’s technical standards. We believe that we are in material compliance with all relevant technical standards.
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Route Rights
Domestic Routes: Peruvian airlines are required to obtain permits in connection with carrying passengers or cargo on any domestic routes and to comply with the technical and legal requirements established by the PDGAC. Non-Peruvian airlines are not permitted to provide domestic air service between destinations in Peru.
International Routes: As an airline providing services on international routes, LATAM Airlines Peru is also subject to a variety of bilateral civil air transport agreements that provide for the exchange of air traffic rights between Peru and various other countries. There can be no assurance that existing bilateral agreements between Peru and foreign governments will continue, and a modification, suspension or revocation of one or more bilateral treaties could have a material adverse effect on our operations and financial results.
International route rights, as well as the corresponding landing rights, are derived from a variety of air transport agreements negotiated between Peru and foreign governments. Under such agreements, the government of one country grants the government of another country the right to designate one or more of its domestic airlines to operate scheduled services to certain destinations of the former and, in certain cases, to further connect to third-country destinations. In Peru, when additional route frequencies to and from foreign cities become available, any eligible airline may apply to obtain them. If there is more than one applicant for a route frequency, the PDGAC awards it in compliance with different designation rules for a period of four years. The PDGAC grants route frequencies subject to the condition that the recipient airline operates them on a permanent basis. If an airline fails to operate a route for a period of 90 days or more, the PDGAC may terminate its rights to that route. In recent years the PDGAC has revoked the unused route frequencies of several Peruvian operators.
Ecuador
Aeronautical Regulation
There are two institutions that control commercial aviation on behalf of the State: (i) The Consejo Nacional de Aviación Civil (“CNAC”), which directs aviation policy; and (ii) the DGAC, which is a technical regulatory and control agency. The CNAC issues operating permits and grants operating concessions to national and international airlines. It also issues opinions on bilateral and multilateral air transportation treaties, allocates routes and traffic rights, and approves joint operating agreements such as wet leases and shared codes.
Fundamentally, the DGAC is responsible for:
•ensuring that the national standards and technical regulations and international ICAO standards and regulations are observed;
•keeping records on insurance, airworthiness and licenses of Ecuadorian civil aircraft;
•maintaining the National Aircraft Registry;
•issuing licenses to crews;
•controlling air traffic control inside domestic air space;
•approving shared codes; and
•modifying operations permits.
The DGAC also must comply with the standards and recommended methods of ICAO since Ecuador is a signatory of the 1944 Chicago Convention.
Route Rights
Domestic Routes: Airlines must obtain authorization from CNAC (an operating permit or concession) to provide air transportation. For domestic operations, only companies incorporated in Ecuador can operate locally, and only Ecuadorian-licensed aircraft and dry leases are authorized to operate domestically.
International Routes: Permits for international operations are based on air transportation treaties signed by Ecuador or, otherwise, the principle of reciprocity is applied.
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All airlines doing business in Latin America that are incorporated in countries that are members of the Comunidad Andina de Naciones (the Andean Community, or “CAN”) obtain their traffic rights on the basis of decisions currently in force under that regime, in particular decision N°582 of 2004, which guarantee free access to markets, with no type of restriction except technical considerations.
Airfare Pricing Policy
On October 13, 2011, The Statutory Law of Regulation and Control of the Market Power was passed with a purpose to avoid, prevent, correct, eliminate and sanction the abuse of economic operators with market power, as well as to sanction restrictive, disloyal and agreements involving collusive practices. This Law creates a new public entity as the maximum authority of application and establishes the procedures of investigation and the applicable sanctions, which are severe. Rates are not regulated and are subject only to registration. In general, bilateral treaties regarding air transportation allow for airfares to be regulated by the regulation of the country of origin.
Brazil
Aeronautical Regulation
The Brazilian aviation industry is regulated and overseen by the ANAC. The ANAC reports directly to the Ministry of Ports and Airports, which is subordinated by the Federal Executive Power of this country. Primarily on the basis of Law No. 11.182/2005, the ANAC was created to regulate commercial aviation, air navigation, the assignment of domestic and international routes, compliance with certain insurance requirements, flight operations, including personnel, aircraft and security standards, air traffic control, in this case sharing its activities and responsibilities with the Departamento de Controle do Espaço Aéreo (Department of Airspace Control or “DECEA”), which is a public secretary also subordinated to the Brazilian Defense Ministry, and airport management, in this last case sharing responsibilities with the Empresa Brasileira de Infra-Estrutura Aeroportuária (the Brazilian Airport Infrastructure Company, or “INFRAERO”), a public company that was created by Law No. 5862/72, and is responsible for administrating, operating and exploring Brazilian airports industrially and commercially (with the exception of airports granted to private initiative).
LATAM Airlines Brazil has obtained and maintains the necessary authority from the Brazilian government to conduct flight operations, including authorization and technical operative certificates from ANAC, the continuation of which is subject to ongoing compliance with applicable statutes, rules and regulations pertaining to the airline industry, including any rules and regulations that may be adopted in the future.
ANAC is the Brazilian civil aviation authority and it is responsible for supervising compliance with Brazilian laws and regulations relating to air transport. Brazil is a contracting state and a permanent member of the ICAO. The ICAO establishes technical standards for the international aviation industry, which Brazilian authorities have incorporated into Brazilian laws and regulations. In the absence of an applicable Brazilian regulation concerning safety or maintenance, ANAC has incorporated by reference the majority of the ICAO’s technical standards.
Route Rights
Domestic Routes: Brazilian airlines operate under a public services concession, and for that reason Brazilian airlines are required to obtain a concession to provide passenger and cargo air transportation services from the Brazilian authorities. In addition, an Air Operator Certificate (“AOC”) is also required for Brazilian Airlines to provide regular domestic passenger or cargo transportation services. Brazilian Airlines also need to comply with all technical requirements established by the Brazilian Aviation Authority (“ANAC”). Based on the Brazilian Aeronautical Code (“CBA”) established by Brazilian Federal Law No. 7,565/86, there are no limitations to ownership of Brazilian airlines by foreign investors. The CBA also states that non-Brazilian airlines are not authorized to provide domestic air transportation services in Brazil. Under the CBA, domestic air transportation services are reserved for legal entities constituted under Brazilian laws, headquartered in Brazil with its management based in the country.
International Routes: Brazilian and non-Brazilian airlines providing services on international routes are also subject to a variety of bilateral civil air transport agreements that provide for the exchange of air traffic rights between Brazil and various other countries. International route rights, as well as the corresponding landing rights, are derived from a variety of air transport agreements negotiated between Brazil and foreign governments. Under such agreements, the government of one country grants the government of another country the right to designate one or more of its domestic airlines to operate scheduled services to certain destinations of the former and, in certain cases, to further connect to third-country destinations. In Brazil, when additional route frequencies to and from foreign cities become available, any eligible airline may apply to obtain them. If there is more than one applicant for a route frequency ANAC must carry out a public bid and award it to the elected airline. ANAC grants route frequencies subject to the condition that the recipient airline operates them on a permanent basis.
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ANAC’s resolution 491/18 indicates the requirements to establish the underuse of a frequency, and how it could be revoked and reassigned. This provision of the resolution came into force in September 2019.
Airfare Pricing Policy
Brazilian and non-Brazilian airlines are permitted to establish their own international and domestic fares, in this last case only for Brazilian airlines, without government regulation, as long as they do not abuse any dominant market position they may enjoy. Airlines may file complaints before the Antitrust Authority (“CADE”) with respect to monopolistic or other pricing practices by other airlines that violate Brazil’s antitrust laws.
Colombia
Aeronautical Regulation
The governmental entity in charge of regulating, directing and supervising civil aviation in Colombia is the Aeronáutica Civil (the “AC”), a technical agency ascribed to the Ministry of Transportation. The AC is the aeronautical authority for the entire domestic territory, in charge of regulating and supervising the Colombian air space. The AC may interpret, apply and complement all civil aviation and air transportation regulation to ensure compliance with the Colombian Aeronautical Regulations (“RAC”). The AC also grants the necessary permits for air transportation.
Route Rights
The AC grants operation permits to domestic and foreign carriers that intend to operate in, from and to Colombia. In the case of Colombian airlines, in order to obtain the operational permit, the company must comply with the RAC and fulfill legal, economic and technical requirements, in order to later be subject to public hearings where the public convenience and necessity of the service is considered. The same process must be followed to add national or international routes; whose concession is subject to the bilateral instruments entered into by Colombia. The only exception for not complying with the public hearing procedure is that the application comes from a country member of the CAN, or that the route or permit being applied for is part of a deregulated regime. Even if it does not go through the public hearing process, the airline must submit a complete study to the AC and the request is made public on the website of the authority. Routes cannot be transferred under any circumstance and there is no limit to foreign investment in domestic airlines.
Airfare Pricing Policy
Since July 2007, as stated in resolution 3299 of the Aeronautical Civil entity, bottom level airfares for both international and domestic transportation were eliminated. Under resolution 904 issued in February 2012, the Aeronautical Civil authority ceased to impose the obligation of charging a fuel surcharge for both domestic and international transportation of passengers and cargo. As of April 1, 2012, air carriers may now freely decide whether to charge a fuel surcharge. In the case that a fuel surcharge is charged, it must be part of the fare, but shall be informed separately on the tickets, advertising or other methods of marketing used by the company.
In the same line, as of April 1, 2012, there is no longer any restriction on maximum fares published by the airlines or with respect to the obligations for air carriers to report to the Aeronautical civil authority the fares and conditions the day after being published.
Administrative fares are not subject to any changes, and its charge is mandatory for the transport of passengers under Aeronautical Civil Regulations. Differential administrative fares apply to ticket sales made through Internet channels.
Antitrust Regulation
Chile
The National Economic Prosecutor Office (“FNE” by its Spanish name) is one of the main antitrust authorities in Chile. The FNE oversees and investigates antitrust matters, which are governed by Decree Law No. 211 of 1973, as amended, or the “Antitrust Law.” The Antitrust Law considers as anticompetitive, any conduct that prevents, restricts or hinders competition, or sets out to produce said effects.

The Antitrust Law continues by giving examples of the following anticompetitive conducts: (i) cartels; (ii) abuse of dominance; and (iii) interlocking.
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The FNE or an aggrieved person may sue for damages arising from a breach of Antitrust Law by suing in the Chilean Antitrust Court (the “TDLC” by its Spanish name). The TDLC has the authority to impose a variety of sanctions for violations of the Antitrust Law, including: (i) the amendment or termination of acts and contracts; (ii) the amendment or dissolution of legal entities involved in the infringement; and/or (iii) the imposition of a fine up to 30% of the sales of the infringing entity corresponding to the line of products and/or services associated to the infraction, during the entire term for which the infringement lasted; alternatively, a fine equal to the double of the economic benefit obtained by the infringing company; or when none of these alternatives can be applied, a fine up to approximately US$50 million (60,000 UTA). If the TDLC finds an antitrust infringement, an aggrieved person may sue for damages in a follow-on suit before the TDLC, including both individual claims as well as class actions.

The Antitrust Law also considers the possibility of criminal sanctions for individuals involved in cartel cases. On August 17, 2023 Chilean Law No. 21,595 (the Economic Crimes Act, or “ECA”) was published in the Official Gazette. The ECA modified the criminal sanctions applicable to individuals in cartel cases, which include the following:

1.Imprisonment in its maximum degree to imprisonment in its minimum degree (i.e., from 3 years and one day to 10 years).

2.Fines, calculated according to the system of “daily fines” (in principle, 151 to 200 daily fines). The value of a daily fine corresponds to the average daily net income that the convicted person has had in the period of one year before the start of investigation against such individual, considering work income, rents, income from capital or income of any other kind. If the average daily net income is disproportionately low in relation to the assets of the convicted person, the court may increase the value of the daily fine by up to two times.

3.Disgorgement of profits, by which a person is dispossessed of patrimonial assets whose value corresponds to the amount of the profits obtained through the crime or by perpetrating it. The profits obtained include the rents and profits that have been originated, whatever their legal nature. The profits also include the equivalent of the costs avoided by the wrongful act. The disgorgement of profits can be imposed even without a conviction, provided it is proven that the assets had their origin in an act constituting a crime.

4.Disqualification from holding public office, from 3 years to perpetuity.

5.Disqualification from serving as director or principal executive in any entity subject to the supervision of the Financial Market Commission or in a company controlled by the State, from 3 to 10 years.

6.Disqualification from contracting with the State (any of its organs, services, companies or companies) and termination of any contract in force with the State, from 3 years to perpetuity. The disqualification is extended to any company, foundation or corporation in which the convicted person is directly or indirectly a partner, shareholder or member.

These sanctions can be applied jointly. In addition, according to the ECA, cartel crimes always qualify as an “economic crime,” so that the specific determination of the prison sentence to be imposed, as well as the decision on its potential substitution by a form of execution in freedom or with partial imprisonment, is governed by the ECA.

As described above under “—Route Rights—Airfare Pricing Policy,” pursuant to Resolution No. 445 of August 1995, the predecessor to the TDLC approved a merger between LAN Chile and LADECO subject to certain conditions, including a specific self-regulated fare plan for domestic air passenger market consistent with the TDLC’s directive to maintain a competitive environment within the domestic market. This self-regulated fare plan was updated by the TDLC particularly to maintain its objective which consists of a tariff regulation, through which maximum rates are established on non-competitive routes under a monthly compliance scheme. Thus, since October 1997, LATAM Chile follows a self-regulated plan, which was modified and approved by the TDLC in July 2005, and further in September 2011. In February 2010, the FNE closed the investigation initiated in 2007 regarding our compliance with this self-regulated fare plan and no further observations were made.

In June 2012, the antitrust authorities in Chile and Brazil each imposed certain mitigation measures as part of their approval of the LAN/TAM merger. Furthermore, the association was also submitted to the antitrust authorities in Germany, Italy, Spain and Argentina. All these jurisdictions granted unconditional clearances for this transaction. For more information regarding these mitigation measures please see below.
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The mitigation measures imposed by the TDLC in connection with the LAN and TAM merger were part of a decision issued on September 21, 2011 (the “Decision”). The TDLC approved the proposed merger between LAN and TAM, subject to 14 conditions as generally described below:

1.swap certain slots in the Guarulhos Airport at São Paulo, Brazil, to be used by an occasional third party interested in offering direct non-stop flights between São Paulo and Santiago;

2.extension of the frequent flyer program to airlines operating or willing to operate the Santiago-São Paulo, Santiago-Río de Janeiro, Santiago-Montevideo and Santiago-Asunción routes during the five-year period from the effective time of the merger;

3.execution of interline agreements with airlines operating the Santiago-São Paulo, Santiago-Río de Janeiro and Santiago-Asunción routes;

4.certain capacity and other transitory restrictions applicable to the Santiago-São Paulo route;

5.certain amendments to LAN’s self-regulatory fare plan approved by the TDLC with respect to LAN’s domestic passenger business;

6.the obligation of LATAM to resign to one global airline alliance within 24 months from the date in which the merger becomes effective, except in the case that the TDLC approves otherwise, or to elect not to participate in any global airline alliance;

7.certain restrictions on code-sharing agreements with certain south American carriers or carriers outside the global airline alliance to which LATAM belongs for routes with origin or destination in Chile or that connect to North America and Europe, including the obligation to consult with, and obtain approval from, the TDLC prior to its execution of certain of those codeshare agreements (the “Seventh Condition”);

8.the abandonment of four air traffic frequencies with freedom rights between Chile and Peru, limitations to acquire more than 75% of the air traffic frequencies in that route, and the term for which air traffic frequencies may be granted to LATAM by the Chilean authorities;

9.issuance of a statement by LATAM supporting the unilateral opening of the Chilean domestic skies (cabotage) and abstention from any actions that would prevent such opening;

10.promotion by LATAM of the growth and normal operation of the Guarulhos (Brazil) and Arturo Merino Benítez (Chile) airports, to facilitate access thereto to other airlines;

11.certain restrictions regarding incentives to travel agencies;

12.to maintain temporarily 12 round trip flights per week between Chile and the United States and at least seven round trip non-stop flights per week between Chile and Europe;

13.certain transitory restrictions on increasing fares in the Santiago-São Paulo and Santiago - Rio de Janeiro routes for the passenger business and for the Chile-Brazil routes for the cargo business; and

14.engaging an independent consultant, expert in airline operations to, in coordination with the FNE, monitor and audit compliance with the conditions imposed by the Decision for 36 months.

Around June 2015, the FNE filed a complaint against LATAM before the TDLC alleging that LATAM was not complying with the Seventh Condition. LATAM filed a statement of defense opposing the claim and later reached a settlement agreement with the FNE (the “Settlement Agreement”) which was approved by the TDLC on December 22, 2015. The Settlement Agreement terminated the legal proceeding initiated by the FNE and did not establish any violation by LATAM of the TDLC resolutions or any applicable antitrust regulations by LATAM. The Settlement Agreement did establish the obligation of LATAM to amend and terminate certain code share agreements and contract an independent third party consultant, which would act as an advisor to the FNE to monitor the compliance by LATAM of the Seventh Condition and the Settlement Agreement.
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On October 15, 2019, LATAM was notified that the FNE had opened an investigation regarding a joint venture agreement entered into between LATAM and Delta Airlines Inc. (“Delta”). On August 13, 2021, Delta and LATAM reached an out-of-court-agreement with FNE to close the investigation and allow the implementation of their joint venture agreement, subject to certain mitigation measures. On October 28, 2021 the settlement was approved by the TDLC. The mitigation measures included, among others, obligations for LATAM to restrict and isolate information exchanges and databases related to joint venture markets, as well as updating the company’s compliance program. The settlement also imposes certain obligations on Delta and on directors to LATAM’s board nominated with Delta’s votes, such as affidavits attesting the independence of LATAM’s directors nominated with Delta’s votes, compliance measures to restrict the exchange of commercially sensitive information, and periodic antitrust training regarding their obligations under the settlement.

Relatedly, on November 6, 2023, LATAM, Delta and FNE reached another out-of-court agreement to amend part of the codeshare agreements between the companies, which was approved by the TDLC on December 7, 2023.

Brazil

The CADE approved the LAN/TAM merger by unanimous decision during its hearing on December 14, 2011, subject to the following conditions: (1) the new combined group (LATAM) should leave one of the two global alliances to which it was a part of (Star Alliance or oneworld); and (2) the new combined group (LATAM) should offer to swap two pairs of slots in Guarulhos International Airport, to be used by an occasional third party interested in offering direct non-stop flights between São Paulo and Santiago, Chile. These impositions are in line with the mitigation measures adopted by the TDLC, in Chile.

On February 24, 2021, the CADE approved without remedies the Joint Venture Agreement between Delta Air Lines and LATAM Airlines Group. Previously, in a separate case, the CADE approved without remedies the acquisition by Delta Air Lines of up to 20% of LATAM common shares on March 18, 2020.

Uruguay

On December 14, 2020 the antitrust authority of Uruguay (Comisión de Promoción y Defensa de la Competencia) approved the Joint Venture Agreement between LATAM and Delta Air Lines. The same agreement was filed before the aeronautical authority of Uruguay (the Dirección Nacional de Aviación Civil e Infraestructura Aeronáutica) on September 21, 2020 and approved by default on December 20, 2020, as the timeframe provided by the Aeronautical Code Law to the authority in order to resolve on the matter expired (90 days after filing).

United States

On July 8, 2020 LATAM and Delta Air Lines applied for approval and antitrust clearance of all the agreements related to their Joint Venture Agreement before the U.S. Department of Transportation (“DOT”). On September 30, 2022, the DOT approved the Joint Venture Agreement between Delta Air Lines and LATAM group.

Colombia

On September 4, 2020 LATAM and Delta Air Lines applied for an approval of the Joint Venture Agreement before Aerocivil, which was finally received on May 10, 2021.

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C.Organizational Structure
LATAM Airlines Group and LATAM Airlines Brazil ownership structure as of December 31, 2024 is as follows:
Sixth Street Partners (24.10%)
Strategic Value Partners (13.83%)
Delta Air Lines (10.05%)
Qatar Airways (10.03%)
Cueto Group (5.03%)
Others (36.97%)
TEP Chile S.A.
LATAM Airlines Group S.A. (Chile)
100% non voting shares
48.96% voting share
51.04% voting share
HoldCo I S.A. (Chile)
100% preferred shares
100% common shares
TAM S.A. (Brazil)
100%
TLA S.A. (Brazil)

As of December 31, 2024, LATAM group is composed of LATAM Airlines Group, incorporated in Chile, and 9 main operating subsidiaries as follow:
Legal Name Place of Incorporation Doing Business as
Ownership (%)1
Transporte Aéreo S.A Chile LATAM Airlines Chile 100.00%
LATAM Airlines Perú S.A. Peru LATAM Airlines Peru 99.81%
LATAM-Airlines Ecuador S.A. Ecuador LATAM Airlines Ecuador Voting 60.00%
No Voting 100.00%
Aerovías de Integración Regional, Aires S.A Colombia LATAM Airlines Colombia 99.23%
TAM S.A Brazil
LATAM Airlines Brazil2
 Voting 51.04%
No Voting 100.00%
Transporte Aéreos del Mercosur S.A. Paraguay
LATAM Airlines Paraguay
 94.98%
Lan Cargo S.A Chile LATAM Airlines Cargo 99.90%
Linea Aérea Carguera de Colombia S.A. Colombia LATAM Cargo Colombia 90.46%
Aerolinhas Brasileiras S.A. Brazil LATAM Cargo Brazil 100.00%
(1) Percentage of equity owned by LATAM Airlines Group directly or indirectly through subsidiaries or affiliates.
(2) TAM S.A. includes its affiliate TAM Linhas Aereas S.A (“TLA”), which does business under the name “LATAM Airlines Brazil.”
For more information, see Notes 1 and 14 to our audited consolidated financial statements.
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D.Property, Plant and Equipment
Chile
Headquarters
Our main corporate facility is located in Las Condes, where we rent 6,750 m² for our executive offices in a central location of Santiago, Chile. This space is distributed in seven floors along one building.
Maintenance Base
Our 162,500 m² maintenance base is located on a site that we own inside Comodoro Arturo Merino Benítez International Airport. This facility contains our aircraft hangar (12,000 m²), warehouses (10,000 m²), workshops (5,300 m²) and offices (11,000 m²), other spaces (22,500m²), as well as a 98,000 m² aircraft parking area capable of accommodating up to seventeen short-haul aircraft. We also lease from the Sociedad Concesionaria Nuevo Pudahuel S.A. approximately 6,320 m² of space inside the Comodoro Arturo Merino Benítez International Airport for operational and service purposes.
Other Facilities
We own 58,000 m² of land and a building on the west side of the Comodoro Arturo Merino Benítez International Airport that houses a flight-training center. This facility features three full-flight simulators (which are not property of LATAM), one for Boeing 787 and two for Airbus A320 aircraft. Also, we have 388,000 m² of land without usage.
Fast Air Almacenes de Carga S.A., one of our affiliates that operates import customs warehouses, utilizes a 10,500 m² warehouse located at Comodoro Arturo Merino Benítez International Airport.
Brazil
Headquarters
LATAM Airlines Brazil’s main facilities are located in São Paulo, in hangars within the Congonhas Airport and nearby. At Congonhas Airport, LATAM Airlines Brazil leases office facilities in converted hangars belonging to INFRAERO (the Local Airport Administrator). These facilities comprise an area of approximately 38,807 m².
Headquarters of the Presidency
The Headquarters of the Presidency and Service Academy is located at Rua Atica, about 2.5 km from Congonhas Airport. This property, which LATAM Airlines Brazil owns, is used for human resources selection, medical services, training, mock-ups and offices- The Service Academy comprises 15,342 m² of land area and 9,032 m² of building area.
Maintenance Base
The Maintenance, Repair, and Overhaul (MRO) facility, located in the city of São Carlos in the state of São Paulo, is one of LATAM Airlines Brazil’s most important infrastructure assets. The facility spans a total area of 120 hectares, including a legal reserve and preservation area. Our MRO has 97,500 m² of built-up area, comprising eight hangars, with the ongoing construction of Hangar 9, which will add an additional 5,000 m², as well as 11,000 m² of apron area.

In addition, LATAM Airlines Brazil operates at Hangars II and V in Congonhas Airport, leased from INFRAERO. This facility covers 23,886 m² of offices and hangars and accommodates approximately 1,300 workstations. It also serves as the base for critical operations, including aircraft maintenance, procurement, aeronautical materials logistics and retrofitting departments.
Other Facilities
In São Paulo, LATAM Airlines Brazil has other facilities, including a call center building with 3,199 m2, distributed over five floors (plus a ground floor and a basement) that currently holds about 272 workstations and support rooms (meetings / training / dining room / coordination) of the operations of call center reservations, and other ABSA back office services.
In Guarulhos, LATAM has a total area of approximately 12,649 m2 distributed within the passenger terminal, including areas such as check-in, ticket sales, check-out, operations areas, a VIP Lounge and aircraft maintenance spaces.
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The Hangar Complex adds an area of 65,080 m². The cargo terminal has 252 m² of office and 17,215 m² of open area. Our distribution center supplies area occupies 3,030 m².
New Facilities
LATAM Airlines Brazil completed several infrastructure projects in Brazil during 2024, including:
1.Improvements and adaptations at GRU Airport to align with updated quality standards.
2.Continued progress on the project to modernize visual communication across cargo terminals.
3.The launch of a project to adapt non-administrative buildings and ensure compliance with accessibility standards.
4.The implementation of a new cargo terminal in Vitória da Conquista to support growing operational demands.
5.The commencement of constructions for a state-of-the-art maintenance hangar (Hangar 9) at the São Carlos MRO facility.
6.The beginning of studies and project planning for the reorganization and optimization of operational areas at Congonhas Airport.
Other locations
We occupy a 36.3-acre site at the Miami International Airport that has been leased to us under a concession agreement by the Miami Dade Aviation Department. Our facilities include a 13,609 m² corporate building, a 115,824 m² cargo warehouse (including 35,561 m² refrigerated area) and a 238,658 m² aircraft-parking platform. These facilities were constructed and are now leased to us under a long-term contract by Aeroterm, a division of Realterm. For the year ended 2024, we paid US$11.5 million in rent under the foregoing leases.

In February 2014, the Company entered into a lease agreement with Miami-Dade County covering approximately 1.81 acres of land located on the grounds of the Miami International Airport. The lease has a term of 30 years with a total annual land cost of US$239,671. Under the lease, we retained the right to construct a hangar facility on the leased premises.

The Company completed construction in November 2015 and the hangar has been operational since June 2016. The property has a 15,479 m² aircraft maintenance space, sufficient to house a Boeing 777 aircraft, in addition to a 9,888 m² area designated for office space. Total investment in this hangar in construction and related expenditures by LATAM was US$16.5 million.

Additionally, LATAM Airlines Paraguay owns 2 hangars at the Silvio Pettirossi Airport in the city of Asuncion with a 37,535 m² area, currently not in use.

LATAM Airlines Peru is in the process of constructing new airport facilities covering 4,000 m² and an aircraft maintenance platform covering 65,000 m². Both projects are being developed at the new Jorge Chavez Airport in the city of Lima.

ITEM 4A. UNRESOLVED STAFF COMMENTS
None.
ITEM 5 OPERATING AND FINANCIAL REVIEW AND PROSPECTS
A.Operating Results
You should read the following discussion of our financial condition and results of operations together with our audited consolidated financial statements and the accompanying notes beginning on page F-1 of this annual report.
The summary consolidated annual financial information as of December 31, 2024 and 2023, and for the years ended December 31, 2024, 2023 and 2022, has been prepared in accordance with IFRS Accounting Standards and has been derived from our audited consolidated annual financial statements included in this annual report. The items included in the financial statements of each of the entities of LATAM Airlines Group and Subsidiaries are valued using the currency of the main economic environment in which the entity operates (the functional currency).
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The functional currency of LATAM is the United States dollar which is also the presentation currency of the consolidated financial statements of LATAM Airlines Group and Subsidiaries.
Overview
We derive our revenues primarily from transporting passengers on our passenger aircraft, as well as from transporting cargo in the belly of our passenger aircraft and in our dedicated freighter aircraft. In 2024, 86.2% of our total revenues (including in the total for this purpose other income from operating activities) came from passenger revenues and 12.3% came from our cargo business. The remaining 1.5% was classified as other operating income, which consists primarily of subleases of aircraft to third parties and other miscellaneous income.
Passenger Operations
In general, LATAM’s passenger revenues are driven by international and country-specific political and economic conditions, competitive activity, and the attractiveness of the destinations that are served. Passenger revenues are also affected by our capacity, traffic, load factors, yield and unit revenue. The capacity is measured in terms of available seat kilometers (“ASKs”), which represents the sum, across the network, of the number of seats made available for sale on each flight, multiplied by the kilometers flown by the respective flight. Traffic in RPKs is measured, as the sum, across the network, of the number of revenue passengers on each flight multiplied by the number of kilometers flown by the respective flight. Load factors represent RPKs (traffic) as a percentage of ASKs (capacity), or the percentage of our capacity that is actually used by paying customers. Yield, revenue from passenger operations divided by RPKs, is used to measure the average amount that one passenger pays to fly one kilometer and unit revenue, or revenue per ASK, to measure the effect of capacity on revenues.
  For the year ended December 31,
  2024 2023 Var. %
ASKs (million) (at period end)
International 82,187.7 67,514.3 21.7  %
SSC 27,817.1 24,970.3 11.4  %
Domestic Brazil 47,925.9 44,765.9 7.1  %
Total 157,930.8 137,250.5 15.1  %
 
RPKs (million)
International 70,769.1 57,340.2 23.4  %
SSC 22,892.8 20,482.0 11.8  %
Domestic Brazil 39,475.6 36,184.5 9.1  %
Total 133,137.5 114,006.6 16.8  %
 
Passenger load factor (%)
International 86.1  84.9  1.2  p.p.
SSC 82.3  82.0  0.3  p.p.
Domestic Brazil 82.4  80.8  1.5  p.p.
Combined load factor 84.3  83.1  1.2  p.p.
In terms of passengers transported by LATAM group, during 2024 we carried 8.1 million more passengers than in 2023, totaling 82.0 million passengers. As of December 31, 2024, consolidated passenger traffic increased by 16.8% and consolidated passenger capacity increased by 15.1%.
As of December 31, 2024, LATAM Airlines Brazil increased its domestic operations, measured in ASKs, by 7.1% compared to 2023. Passenger traffic as measured in RPKs, increased by 9.1% in 2024 with regard to 2023, resulting in a 1.5 percentage points increase in the passenger load factor of LATAM Airlines Brazil, remaining at 82.4%.
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The domestic operations of our affiliate carriers based in Chile, Colombia, Ecuador and Peru, which accounted for 17.6% of total passenger capacity (measured in ASKs), showed an increase of 11.8% in passenger traffic (measured in RPKs) in 2024 while capacity increased 11.4% as compared to 2023. As a result, the passenger load factor remained stable at 82.3%.
The group’s international operations fully recovered during 2024. Compared to 2023, capacity in international operations increased by 21.7% and traffic by 23.4% in 2023, resulting in a solid increase of 1.2 percentage points in passenger load factors, which reached 86.1%.
Cargo Operations
Cargo operations depend on exports from South America to North America and Europe, and imports from North America and Europe to South America, where Brazil is the main import market. Cargo markets are affected by economic conditions, foreign exchange rates, changes in international trade, the health of particular industries and competition and fuel prices (which we usually pass on to our customers through a cargo fuel surcharge). Cargo revenues are affected by the capacity, traffic, cargo load factors and yield. The capacity is measured in terms of available ton kilometers (“ATKs”) which represents the number of tons available across the network for the transportation of cargo on each flight, multiplied by the kilometers flown by the respective flights. Traffic in revenue ton kilometers (“RTKs”) is measured as the amount of cargo loads (measured in tons) on each flight multiplied by the number of kilometers flown by the respective flights. Load factors represent RTKs (traffic) as a percentage of ATKs (capacity), or the percentage of the cargo capacity that is actually used to transport cargo for the customers. Finally, cargo yield, or revenue from cargo operations divided by RTKs, is used to measure the average amount that the customers pay to transport one ton of cargo per kilometer.
As of December 31, 2024, cargo traffic increased by 16.9% relative to the same period in 2023, while cargo capacity increased 12.5% year-over-year, which led to an increase of 2.0 percentage points in cargo load factor to 53.7%. Cargo yield decreased 4.0% year-over-year. As a result, revenues per ATK slightly decreased by 0.2% in 2024 compared to 2023, mainly due to lower performance levels in the first half of 2024, followed by a strong recovery in the second half of the year, driven by increased southbound demand from Europe and North America to South America.
Cost Structure
LATAM’s costs are largely driven by the size of its operations, fuel prices, fleet costs and exchange rates. Operating expenses are calculated in accordance with IFRS Accounting Standards and comprise the sum of the line items “cost of sales” plus “distribution costs” plus “administrative expenses” plus “other gains/(losses)” plus “restructuring activities” plus “other expenses,” as shown on our consolidated statement of comprehensive income by function. These operating expenses include wages and benefits, fuel, depreciation and amortization, commissions to agents, aircraft rentals, other rental and landing fees, passenger services, aircraft maintenance and other operating expenses. Restructuring activities expenses are those costs related to the Initial and Subsequent Debtors’ filing for Chapter 11 voluntary protection and associated restructuring. The following is a discussion of the drivers of the most important costs.
As an airline group, we are subject to fluctuations in costs that are outside of our control, particularly fuel prices. During 2024, average jet fuel prices decreased by 11.3% compared to 2023. LATAM has a hedging policy to protect medium term liquidity risk from fuel price increases, while participating in the benefits of fuel price reductions. Cost of fuel is also affected by the amount of gallons we consume, which depends on the size of our operation, the efficiency of our fleet and the impact of our efficiency programs.
Personnel expenses are another significant component of our overall costs. Because a significant portion of our labor costs are denominated in Chilean pesos and in Brazilian reals, appreciation of these currencies against the U.S. dollar as well as increases in local inflation rates can result in increased costs in U.S. dollar terms and can negatively affect our results. Depreciation of local currencies results in decreases in costs in dollars. Other important drivers of personnel expenses are average headcount and average wages.
Commissions paid to travel and cargo agents are also a significant cost to LATAM. LATAM group competes with other airlines over the amount of commission paid per sale, particularly in connection with special programs and marketing efforts, and to maintain competitive incentives with travel agents.
Fleet related expenses, namely aircraft rentals, aircraft maintenance and depreciation, are another significant cost, and mainly depend on the number and type of aircraft that are owned and that are under leases. Generally, these costs are largely fixed and can be reduced on a per unit basis by achieving higher aircraft utilization rates.
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In 2024, only a small fraction of LATAM’s wide-body fleet continued to operate on a payment-by-use basis (known as Power-by-the-Hour, “PBH”), as a result of the Company’s negotiations with creditors and lessors during its Chapter 11 Restructuring.
The Aircraft Rentals expense line is used to account for the expenses associated with the group’s variable payments related to aircraft with operating leases whose long-term agreements have been signed and approved by the US Court. Starting in 2021, the Company amended its Aircraft Lease Contracts which included lease payment based on Power by the Hour (PBH) at the beginning of the contract and then switches to fixed-rent payments. A right of use asset and a lease liability was recognized as result of those amendments at the date of modification of the contract, even if they initially had a variable payment period. As a result of the application of the lease accounting policy, the right of use assets continues to be amortized on a straight-line basis over the term of the lease from the contract modification date. 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 from the beginning of the contract (included in the Depreciation line) and interest from the lease liability (included in Lease Liabilities).
Restructuring activities refer to the gains/losses in connection with the Chapter 11 Restructuring, including costs related with the rejection of aircraft lease contracts, rejection of IT contracts, renegotiation of fleet contracts and legal advice fees, among others; as well as gains on the settlement of Chapter 11 Restructuring claims for accounts payable. For more information on the restructuring activities gains/losses, please see Note 2, 16 and 26 of our audited consolidated financial statements.
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Results of Operations
LATAM Financial Results Discussion: For the year ended December 31, 2024 compared to the year ended December 31, 2023.
The following table sets forth certain income statement data for LATAM, for the year ended December 31, 2024, and December 31, 2023.
For the year ended December 31,
2024 2023 2024 2023
(in US$ millions, except
per share data)		 As a percentage of total
operating revenues		 2024/2023
% change
Consolidated Results of Income by Function
Operating revenues
Passenger 11,233.3  10,215.1  87.5  % 87.8  % 10.0  %
Cargo 1,599.8  1,425.4  12.5  % 12.2  % 12.2  %
Total revenues 12,833.0  11,640.5  100.0  % 100.0  % 10.2  %
Cost of sales (9,565.9) (8,816.6) (74.5) % (75.7) % 8.5  %
Gross margin 3,267.1  2,824.0  25.5  % 24.3  % 15.7  %
Other income 200.7  148.6  1.6  % 1.3  % 35.0  %
Distribution costs (606.2) (587.3) (4.7) % (5.0) % 3.2  %
Administrative expenses (824.5) (683.3) (6.4) % (5.9) % 20.7  %
Other expenses (459.8) (532.8) (3.6) % (4.6) % (13.7) %
Financial income 142.4  125.4  1.1  % 1.1  % 13.6  %
Financial costs (882.0) (698.2) (6.9) % (6.0) % 26.3  %
Foreign exchange gains 172.9  85.9  1.3  % 0.7  % 101.3  %
Result of indexation units 19.5  5.3  0.2  % —  268.1  %
Other gains/(losses) (36.2) (91.0) (0.3) % (0.8) % (60.2) %
Income before taxes 993.9  596.5  7.7  % 5.1  % 66.6  %
Income tax (expense) / benefits (16.5) (14.9) (0.1) % (0.1) % 10.7  %
Net income for the year 977.4  581.6  7.6  % 5.0  % 68.1  %
Income attributable to owners of the parent company 977.0  581.8  7.6  % 5.0  % 67.9  %
Income (loss) attributable to non-controlling interests 0.5  (0.3) —  —  257.7  %
Net income for the year 977.4  581.6  7.6  % 5.0  % 68.1  %
Earning (loss) per share
Basic earning (loss) per share (US$) 0.00162  0.00096  n.a n.a 68.4  %
Diluted earning (loss) per share (US$) 0.00162  0.00096  n.a n.a 68.4  %
______________________________________________________
*The abbreviation “n.a.” means not available.
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Operating Revenues
Our total revenues increased by 10.2% to US$12,833.0 million for the year ended December 31, 2024 from US$11,640.5 million as of December 31, 2023.
Passenger revenues increased by 10.0% to US$11,233.3 million in 2024 from US$10,215.1 million in 2023. Total passenger capacity (measured in ASKs) increased by 15.1%, while passenger traffic (measured in RPKs) increased by 16.8%, due to a healthy demand environment throughout 2024. As a result, consolidated passenger load factor increased by 1.2 percentage points when compared to 2023. Passenger yields fell 5.8% when compared to 2023, resulting in a 4.4% decrease in revenues per ASK when compared to 2023, mainly due to a 12.3% decrease in average fuel price (without hedge) as well as foreign exchange rate variations when compared to 2023.
Cargo revenues increased by 12.2%, to US$1,599.8 million in 2024 from US$1,425.4 million in 2023. Total cargo capacity (measured in ATKs) increased by 12.5%, in line with the increase of passenger fleet and the use of their bellies for cargo, while cargo traffic (measured in RTKs) increased by 16.9%, resulting in a 2.0 percentage points increase of the cargo load factor when compared to 2023. Moreover, cargo yield fell 4.0% when compared to 2023, resulting in a 0.2% decrease in revenues per ATK when compared to 2023, mainly due to lower performance levels in the first half of 2024, followed by a strong recovery in the second half of the year, driven by increased southbound demand from Europe and North America to South America.
Passenger and cargo revenues accounted for 86.2% and 12.3% of total revenues in 2024, respectively.
Cost of Sales
Cost of sales increased by 8.5% to US$9,565.9 million for the year ended December 31, 2024 (from US$8,816.6 million in 2023), mainly due to a 15.1% increase in passenger operations.
The table below presents cost of sales information for the fiscal year ended December 31, 2024 and 2023.
For the year ended December 31,
2024 2023 2024 2023
In US$ millions As a percentage of total
operating revenues		 2024/2023
% change
Revenues 12,833.0  11,640.5  100.0  % 100.0  % 10.2  %
Cost of sales (9,565.9) (8,816.6) (74.5) % (75.7) % 8.5  %
Aircraft Fuel (3,970.1) (3,947.2) (30.9) % (33.9) % 0.6  %
Wages and Benefits (1,330.5) (1,225.2) (10.4) % (10.5) % 8.6  %
Other Rental and Landing Fees (1,469.3) (1,317.2) (11.4) % (11.3) % 11.5  %
Depreciation and Amortization (1,318.1) (1,102.8) (10.3) % (9.5) % 19.5  %
Aircraft Maintenance (815.9) (601.8) (6.4) % (5.2) % 35.6  %
Passenger Services (331.9) (271.8) (2.6) % (2.3) % 22.1  %
Aircraft Rentals (4.2) (91.9) —  (0.8) % (95.4) %
Other Costs of Sales (325.9) (258.6) (2.5) % (2.2) % 26.0  %
Fuel costs increased by 0.6%, mainly as a result of a 13.6% increase in fuel consumption compared to 2023, attributed to a 15.1% increase in passenger operations during 2024. This increase was offset by a 12.3% decrease in average fuel price (without hedge). Furthermore, during the period ended December 31, 2024, LATAM recognized losses of US$18.1 million for fuel hedging net of premiums in the costs of sales for the year, compared to a gain of US$15.7 million as of December 31, 2023.
Wages and benefits increased by 8.6%, mainly explained by higher crew and airport staff costs, along with a 9.3% increase in the average number of employees during 2024.
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Other rental and landing fees increased 11.5%, mainly due to higher costs of airport fees and handling services impacted by increased operations and the use of larger aircraft, tariff updates at domestic and international airports, and the effects of inflationary adjustments during 2024.
Depreciation and amortization increased by 19.5%, explained by the use of a newer fleet and 48 additional aircraft designated for operational purposes as of December 31, 2024, when compared to the same period in 2023.
Aircraft maintenance increased by 35.6%, mainly due to a larger average fleet, increased operations, and passenger and cargo traffic. Additionally, during 2024 escalation costs associated with changes in supply chains and costs related to the return of certain aircraft increased when compared to 2023.
Passenger services costs increased by 22.1%, mainly as a result of increased catering and onboard service costs driven by growth in demand, which resulted in an 11.0% increase in the number of passengers transported during 2024, primarily in the international segment.
Aircraft rental expenses decreased by 95.4% to US$4.2 million in 2024, due to a significant reduction in the number of aircraft under the PBH payment, as almost all contracts expired. As of December 31, 2024, only one aircraft remained with PBH pricing.
As a result of the above, gross margin (defined as revenues minus cost of sales) totaled a gain of US$3,267.1 million, compared to a gain of US$2,824.0 million in 2023.
Other Consolidated Results
Other operating income increased in 2024 by 35.0%, from US$148.6 million in 2023 to US$200.7 million in 2024, mainly due to higher revenues recognized from the redemption of non-airline products in the LATAM Pass program and tour services and codeshare agreements.
Distribution costs increased by 3.2% totaling US$606.2 million in 2024, mainly due to an increase in fixed costs related with the commercial areas, partially offset by a decrease in sales commissions attributed to a greater penetration of direct sales.
Administrative expenses increased by 20.7% from US$683.3 million in 2023 to US$824.5 million in 2024, due to the increase in headcount, together with an increase in marketing expenses. In 2023, LATAM group had an average of 34,174 employees, increasing to an average of 37,355 employees in 2024.
Other expenses decreased by 13.7% from US$532.8 million in 2023 to US$459.8 million in 2024, mainly due to the reversal of interest and fines associated with provisions for tax contingencies, including VAT and income tax from previous years.
Financial income increased by 13.6% from US$125.4 million in 2023 to US$142.4 million in 2024, mainly due to a higher level of cash and cash equivalents compared to 2023, which were mainly invested in fixed-term bank deposits.
Financial costs increased by 26.3% from US$698.2 million in 2023 to US$882.0 million in 2024, mainly explained by a high average interest rate environment, an increase in fleet operating leases due to a higher number of aircraft during 2024, and a US$134 million expense resulting from the termination of the Term Loan B and the 2027 Notes as described in Note 2.1 (c) of our consolidates financial statements. This effect was partially mitigated by the reduction in cost of debt in the fourth quarter of 2024 due to a decrease in interest rates of the refinanced debt compared to its previous debt.
The foreign exchange gain of US$172.9 million in 2024, compared to a gain of US$85.9 million in 2023, was driven mainly by the depreciation of the Brazilian Real during 2024.
Other gains (losses) registered a loss of US$36.2 million in 2024, compared to a loss of US$91.0 million in 2023, mainly explained by higher expenses associated with labor proceedings in Argentina, which were largely offset by favorable impacts from non-recurring operations, fair value adjustments and other non-recurring effects.
The income tax expense for 2024 amounted to US$16.5 million as compared to an income tax expense of US$14.9 million in 2023. This difference is mainly explained by a US$29.1 million increase in the deferred tax assets, a US$13.5 million increase in current tax expenses and a decrease in partial offset of tax losses by US$17.2 million in taxes owed by certain affiliates of the group. For more information, see Note 17 to our audited consolidated financial statements.
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Net profit
Net profit for the year ended December 31, 2024 totaled US$977.4 million, compared to a net profit of US$581.6 million recorded in 2023. Net profit attributable to owners of the parent company was US$977.0 million in 2024.
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Results of Operations
LATAM Financial Results Discussion: For the year ended December 31, 2023 compared to the year ended December 31, 2022.
The following table sets forth certain income statement data for LATAM, for the year ended December 31, 2023, and December 31, 2022.
For the year ended December 31,
2023 2022 2023 2022
In US$ millions As a percentage of
total operating revenues		 2023/2022
% change
Consolidated Results of Income by Function
Operating revenues
Passenger 10,215.1  7,636.4  87.8  % 81.6  % 33.8  %
Cargo 1,425.4  1,726.1  12.2  % 18.4  % (17.4) %
Total revenues 11,640.5  9,362.5  100.0  % 100.0  % 24.3  %
Cost of sales (8,816.6) (8,103.5) (75.7) % (86.6) % 8.8  %
Gross margin 2,824.0  1,259.0  24.3  % 13.4  % 124.3  %
Other income 148.6  154.3  1.3  % 1.6  % (3.7) %
Distribution costs (587.3) (426.6) (5.0) % (4.6) % 37.7  %
Administrative expenses (683.3) (576.4) (5.9) % (6.2) % 18.5  %
Other expenses (532.8) (531.6) (4.6) % (5.7) % 0.2  %
Gains from restructuring activities —  1,679.9  —  17.9  % (100.0) %
Financial income 125.4  1,052.3  1.1  % 11.2  % (88.1) %
Financial costs (698.2) (942.4) (6.0) % (10.1) % (25.9) %
Foreign exchange gains 85.9  26.0  0.7  % 0.3  % 230.4  %
Result of indexation units 5.3  (1.4) —  —  (479.4) %
Other gains/(losses) (91.0) (347.1) (0.8) % (3.7) % (73.8) %
Income before taxes 596.5  1,346.0  5.1  % 14.4  % (55.7) %
Income tax (expense) / benefits (14.9) (8.9) (0.1) % (0.1) % 67.9  %
Net income for the year 581.6  1,337.1  5.0  % (95.2) % (56.5) %
Income attributable to owners of the parent company 581.8  1,339.2  5.0  % 14.3  % (56.6) %
Income (loss) attributable to non-controlling interests (0.3) (2.1) —  —  (86.6) %
Net income for the year 581.6  1,337.1  5.0  % (95.2) % (56.5) %
Earning (loss) per share
Basic earning (loss) per share (US$) 0.00096  0.01386  n.a n.a (93.1) %
Diluted earning (loss) per share (US$) 0.00096  0.01359  n.a n.a (92.9) %
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The abbreviation “n.a.” means not available.

Operating Revenues

Our total revenues increased by 24.3% to US$11,640.5 million for the year ended December 31, 2023 from US$9,362.5 million as of December 31, 2022. The increase in revenues in 2023 was mainly attributable to the 33.8% increase in passenger revenues to US$10,215.1 million in 2023 from US$7,636.4 million in 2022, driven by the increase in passenger traffic by 23.1% (measured in RPKs) with respect to 2022, caused by the continued recovery of the international travel demand.

Cargo revenues decreased by 17.4%, to US$1,425.4 million in 2023 from US$1,726.1 million in 2022. Total cargo capacity increased by 14.6%, in line with the increase in freighter capacity. Cargo traffic increased 4.8%, resulting in a 4.8 percentage point decrease of the cargo load factor. This capacity increase is also explained by the recovery of passenger capacity levels, and the use of their belies for cargo. Cargo yield fell 21.3% year-over-year, as a result, revenues per ATK decreased 28.0% in comparison to the previous year.

Passenger and cargo revenues accounted for 86.6% and 12.1% of total revenues in 2023, respectively.

Cost of Sales

Cost of sales increased by 8.8% to US$8,816.6 million for the year ended December 31, 2023 (from US$8,103.5 million in 2022), mainly due to the 20.6% increase in passenger operations.

The table below presents cost of sales information for the fiscal year ended December 31, 2023 and 2022.
For the year ended December 31,
2023 2022 2023 2022
In US$ millions As a percentage of total operating revenues 2023/2022
% change
Revenues 11,640.5  9,362.5  100.0  % 100.0  % 24.3  %
Cost of sales (8,816.6) (8,103.5) (75.7) % (86.6) % 8.8  %
Aircraft Fuel (3,947.2) (3,882.5) (33.9) % (41.5) % 1.7  %
Wages and Benefits (1,225.2) (973.7) (10.5) % (10.4) % 25.8  %
Other Rental and Landing Fees (1,317.2) (1,031.5) (11.3) % (11.0) % 27.7  %
Depreciation and Amortization (1,102.8) (1,083.0) (9.5) % (11.6) % 1.8  %
Aircraft Maintenance (601.8) (582.7) (5.2) % (6.2) % 3.3  %
Passenger Services (271.8) (184.4) (2.3) % (2.0) % 47.4  %
Aircraft Rentals (91.9) (202.8) (0.8) % (2.2) % (54.7) %
Other Costs of Sales (258.6) (162.8) (2.2) % (1.7) % 58.8  %

Fuel costs increased by 1.7%, mainly as a result of a 17.5% increase in fuel consumption compared to 2022 attributed to the 20.6% increase in passenger operations during 2023, offset by a 13.7% decrease in average fuel price. During the period ended December 31, 2023, LATAM recognized a gain of US$15.7 million for fuel hedging net of premiums in the costs of sales for the year, compared to a gain of US$18.8 million as of December 31, 2022.

Wages and benefits increased by 25.8%, mainly explained by higher crew and airport staff costs, along with an 10.7% increase in the average number of employees during 2023.

Other rental and landing fees increased 27.7%, mainly due to the increase in the level of passenger operations.

Depreciation and amortization increased by 1.8%, explained by 19 additional aircraft in the operating fleet compared to the end of 2022, offset by the renegotiation of fleet operating lease contracts after the exit from Chapter 11.

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Aircraft maintenance increased by 3.3% mainly attributed to a bigger average fleet and the increase in the level of passenger operations.

Passenger services costs increased by 47.4% mainly explained by an increase in the costs of catering and on-board services as a result of the cessation of food delivery restrictions presented until the first months of 2022 due to the COVID-19 pandemic. In addition, the growth in demand caused an increase of 18.3% in the number of passengers transported, mainly in the international segment.

Aircraft rental expenses decreased by US$54.7% to US$91.9 million in 2023, due to a decrease in the number of aircraft under PBH mode. PBH contracts continued to be in place in 2023, as certain wide-body fleet contracts will remain in effect for part of 2024.

As a result of the above, gross margin (defined as revenues minus cost of sales) totaled a profit of US$2,824 million, compared to a profit of US$1,259 million in 2022.

Other Consolidated Results

Other operating income decreased in 2023 by 3.7%, from US$154.3 million in 2022 to US$148.6 million in 2023, mainly due to the cessation of compensation from Delta Air Lines in 2023, associated with the implementation of the Joint Venture Agreement signed in 2019, and partially offset by higher income from sales of spare and rotatable engines of the Airbus A350 and Airbus A320 fleet during 2023.

Distribution costs increased by 37.7%, totaling US$587.3 million, due to an increase in sales commissions plus an increase in fixed costs related with the commercial areas.

Administrative expenses increased by 18.5% from US$576.4 million in 2022 to US$683.3 million in 2023, due to the increase in headcount, plus an increase in marketing expenses. In 2022, LATAM group had an average of 30,872 employees, while in 2023 this was increased to an average of 34,174employees.

Other expenses increased slightly by 0.2% from US$531.6 million in 2022 to US$532.8 million in 2023.

Gain from Restructuring activities had no movements in 2023 given the exit of the Company from Chapter 11 in November 2022.

Financial income decreased by 88.1% from US$1,052.3 million in 2022 to US$125.4 million in 2023, mainly due to the gains on the settlement of certain financial claims in 2022, as well as a reversal of previously recognized accrued interest for financial liabilities that were restructured during 2022, both attributable to the exit from Chapter 11. For more information, please see Note 26 of our audited consolidated financial statements.

Financial costs decreased by 25.9% from US$942.4 million in 2022 to US$698.2 million in 2023, mainly explained by interests recognized during 2022 associated with the DIP financing.

The foreign exchange gain of US$85.9 million in 2023, compared to a gain of US$26.0 million in 2022, was driven mainly by the appreciation of the Brazilian Real during 2023.

Other gains (losses) registered a loss of US$91.0 million in 2023, compared to a loss of US$347.1 million in 2022, principally due to the recognition at net realizable value of A319 family aircraft classified as held for sale during 2023.

The income tax expense for 2023 amounted to US$(14.9) million as compared to an income tax expense of US$(8.9) million in 2022. This difference is mainly explained by a reduction of US$23.4 million in the deferred tax assets and the partial offset of tax losses by US$17.4 million in taxes owed by certain affiliates of the group. For more information, see Note 17 to our audited consolidated financial statements.

Net profit

Net profit for the year ended December 31, 2023 totaled US$581.6 million, compared to a net profit of US$1,337.1 million recorded in 2022. Net profit attributable to the parent company’s shareholders was US$581.8 million in 2023.
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U.S. Dollar Presentation and Price-Level Adjustments
General
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 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 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 items and income and costs, recognized in the consolidated income statement under “Result of indexation units.”
Net gains and losses on the re-expression of opening balances due to the initial application of IAS 29 are recognized in the consolidated retained earnings.
Re-expression due to hyperinflation will be recorded until the period 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 differences, before tax.”
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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.
Effects of Exchange Rate Fluctuations
Our functional currency is the U.S. dollar for the pricing of our products, composition of our balance sheet and effects on our results of operations. In 2024, 44.9% of our revenues were denominated in U.S. dollars or Euros, while 62.4% were either denominated, linked or pegged to those currencies. Additionally, 71.7% of our expenses were denominated in U.S. dollars or Euros, particularly fuel costs, insurance, aircraft components and supplies, and aircraft rentals.
A substantial majority of our liabilities are denominated in U.S. dollars (65.7% as of December 31, 2024), including bank loans, certain air traffic liabilities, and certain amounts payable to our suppliers. As of December 31, 2024, 78.1% of our assets were denominated in U.S. dollars, principally aircraft, cash and cash equivalents, accounts receivable and other fixed assets. Substantially all of our commitments, including operating lease and purchase commitments for aircraft, are denominated in U.S. dollars.
Balance sheet imbalance denominated in currencies other than the functional currency of each specific entity creates a foreign exchange rate exposure that impacts our foreign exchange losses and gains due to exchange rate fluctuations. We recorded a net foreign exchange gain of US$172.9 million in 2024, compared to a net foreign exchange gain of US$85.9 million in 2023, which are set forth in our consolidated statement of income under “Foreign Exchange gains/(losses)”. For more information, see Notes 2.3 and 28 to our audited consolidated financial statements.
Critical Accounting Policies
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.
(b)Depreciation expense and impairment of Properties, Plant and Equipment.
(c)Recoverability of deferred tax assets.
(d)Air tickets sold that will not be finally used.
(e)Valuation of miles and points awarded to holders of loyalty programs, pending use.
(f)Legal Contingencies.
(g)Leases.
See Note 4 (Accounting estimates and judgments) to our audited consolidated financial statements for a full description of our critical accounting policies.
IFRS Accounting Standards / Non-IFRS Accounting Standards Reconciliation
We use “Adjusted Cost per ASK” and “Adjusted Cost per ASK excluding fuel price variations” in analyzing operating expenses on a per unit basis. We believe “Adjusted Operating Expense” is a useful measure as it presents the sum of our costs of sales and several components of our operating expenses to present a supplemental measure of the expenses we incur in running our business. “Adjusted Operating Expenses” include adjustments to add back the effect of other gains and losses (including, but not limited to, contingencies related to non-current operations, fair value adjustments, and other one-time effects), and to deduct restructuring activities gains, as further adjusted by the aircraft rentals expense and by our Corporate Incentive Plan. “ASKs” (available seat kilometers) measures the number of seats of capacity available for the transportation of passengers multiplied by the kilometers flown across our network. To obtain our adjusted unit costs, which are used by our management in the analysis of our results, we divide our total Adjusted Operating Expenses by our total ASKs. The cost component is further adjusted to obtain “Adjusted Costs per ASK excluding fuel price variations,” in order to remove the impact of changes in fuel prices for the year.
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“Adjusted Cost per ASK” and “Adjusted Cost per ASK excluding fuel price variations” do not have a standardized meaning, and as such may not be comparable to similarly titled measures provided by other companies. These metrics should not be considered in isolation or as a substitute for operating expenses or as indicators of performance or cash flows or as a measure of liquidity.
For the year ended December 31,
2024
2023
 2022
Adjusted Cost per ASK
Cost of sales (US$ million) 9,565.9 8,816.6 8,103.5
Distribution costs (US$ million) 606.2 587.3 426.6
Administrative expenses (US$ million) 824.5 683.3 576.4
Other expenses (US$ million) (1)
 459.8 532.8 531.6
Other gains/(losses) (US$ million) 36.2 91.0 347.1
Gains from restructuring activities (US$ million) —  —  (1,679.9)
Total Operating Expenses (US$ million) 11,492.6 10,711.0 8,305.2
Other gains/(losses) (US$ million) (36.2) (91.0) (347.1)
Corporate Incentive Plan (US$ million) (2)
 (78.8) (66.8) (53.3)
Aircraft Rentals (US$ million) (3)
 (4.2) (91.9) (202.8)
Gains from restructuring activities (US$ million) —  —  1,679.9
Adjusted Operating Expenses (US$ million) 11,373.5 10,461.3 9,381.9
Divided by ASK (million) 157,930.8 137,250.5 113,851.9
 - Adjusted Cost per ASK (US$ cents) 7.20  7.62  8.24 
Adjusted Cost per ASK excluding fuel price variations
Adjusted Operating Expenses (US$ million) 11,373.5 10,461.3 9,381.9
 - Aircraft fuel (US$ million) 3,970.1 3,947.2 3,882.5
Divided by ASK (million) 157,930.8 137,250.5 113,851.9
 - Adjusted Cost per ASK excluding fuel price variations (US$ cents) 4.69  4.75  4.83 
___________________________________________
1.Other expenses include, but are not limited to, IT and communication services, banking, fixed costs related to non-air operations (tours, warehouse, logistics) and other general expenses.
2.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 proceedings, the Company created an extraordinary incentive plan (the “Corporate Incentive Plan”). These items can be found within the administrative expenses line, specifically the wages and benefits expenses. For additional information about our Corporate Incentive Plan, see Notes 22(c) and 33(b) to our Financial Statements.
3.Correspond exclusively to LATAM group’s fleet power-by-the-hour (“PBH”) contracts. The aircraft rentals expense line item is used to account for the expenses associated with the group’s variable payments related to aircraft. During 2021, the Company amended its Aircraft Lease Contracts to include lease payments based on 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) and interest from the lease liability (included in Lease Liabilities).
Other Operating Measures
LATAM uses revenues per ASK or ATK, as applicable, in analyzing revenues on a per unit basis. To obtain unit revenues, we divide our passenger revenues by our total ASKs and our cargo revenues by our total ATKs. We use our revenues as defined under IFRS Accounting Standards for purposes of the calculation of this metric. Revenues per ASK or ATK, as the case may be, do not have a standardized meaning, and as such may not be comparable to similarly titled measures provided by other companies. This metric is not an IFRS Accounting Standards measure of performance or liquidity.
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It should not be considered in isolation or as a substitute for revenues or as indicators of performance or cash flows as a measure of liquidity.
The table below shows the calculation of our revenues per ASK or ATK, as applicable, in each of the periods indicated.
For the year ended December 31,
2024
2023
 2022
Passenger Revenues (US$ thousands) 11,233,287  10,215,148  7,636,429 
ASK (million) 157,930.8 137,250.5 113,851.9
Passenger Revenues/ASK (US$ cents) 7.11  7.44  6.71 
Cargo Revenues (US$ thousands) 1,599,756  1,425,393  1,726,092 
ATK (million) 8,066.1 7,171.0 6,255.7
Cargo Revenues/ATK (US$ cents) 19.83 19.88  27.59 
Seasonality
Operating revenues are substantially dependent on overall passenger and cargo traffic volume, which is subject to seasonal and other changes in traffic patterns. Passenger revenues are generally higher in the first and fourth quarters of each year, during the southern hemisphere’s spring and summer. In the Brazilian passenger air transportation market, there is generally higher demand for air transportation services in the second half of the year, making the second quarter the weakest for the group However, seasonality is partially mitigated by LATAM group’s focus on business passengers (which are less sensitive to seasonality). Additionally, the expansion of the LATAM group into other countries and the cargo segment with different seasonal patterns has also moderated the overall seasonality of the passenger business.
Operating Data
The table below presents LATAM group’s unaudited operating data as of and for the year ended December 31, 2022, December 31, 2023 and December 31, 2024. We believe this operating data is useful in reporting the operating performance of its business and may be used by certain investors in evaluating companies operating in the global air transportation sector. However, these measures may differ from similarly titled measures reported by other companies, and should not be considered in isolation or as a substitute for measures of performance in accordance with IFRS Accounting Standards. This unaudited operating data is not included in or derived from LATAM’s financial statements.
For the year ended December 31,
Operating Data
2024
2023
 2022
ASKs (million) 157,930.8 137,250.5 113,851.9
RPKs (million) 133,137.5 114,006.6 92,587.8
ATKs (million) 8,066.1 7,171.0 6,255.7
RTKs (million) 4,330.4 3,704.0 3,532.5
B.Liquidity and Capital Resources
LATAM’s cash and cash equivalents amounted to US$1,957.8 million as of December 31, 2024, US$1,714.8 million as of December 31, 2023, and US$1,216.7 million as of December 31, 2022. The company did not have short-term marketable securities as of December 31, 2024 or as of December 31, 2023, whereas it had US$0.3 million as of December 31, 2022. LATAM’s cash and cash equivalents and marketable securities totaled US$1,957.8 million as of December 31, 2024, US$1,714.8 million as of December 31, 2023 and US$1,217.2 million as of December 31, 2022.
The US$243.0 million increase in cash and cash equivalents from 2023 to 2024 can be explained by an increase in the cash flow from operations, which amounted to US$3,106.3 million. This positive cash flow generation was also achieved after a US$175 million dividend payment and US$207 million used in the refinancing exercise during 2024.
The US$497.8 million increase in cash and cash equivalents and marketable securities from 2022 to 2023 can be explained by an increase in the cash flow from operations, which amounted to US$2,263.6 million.
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Cash position and liquidity
The following table provides a summary of our cash flows from operating activities, investing activities and financing activities for the years ended December 31, 2024, 2023 and 2022 and our total cash position as of December 31, 2024, 2023 and 2022.
For the year ended December 31,
2024
 2023
2022
(in US$ million)
Net cash flow from operating activities 3,106.3  2,263.6  96.8 
Net cash flow from (used in) investing activities (1,169.7) (659.5) (749.0)
Net cash flow from (used in) financing activities (1,564.9) (1,150.2) 855.0 
Effects of variation in the exchange rate on cash and cash equivalents (128.8) 44.2  (33.0)
Cash and cash equivalents at the beginning of the year 1,714.8  1,216.7  1,046.8 
Cash and cash equivalents at the end of the year 1,957.8  1,714.8  1,216.7 
As of December 31, 2024 in addition to cash and cash equivalent, LATAM has US$1,550 million related to two undrawn Revolving Credit Facilities and a new Spare Engine Facility that increased available liquidity by US$25 million.
Net cash flows from operating activities
Cash flow from operations derives primarily from providing air passenger and cargo transportation to customers. Operating cash outflows are primarily related to expenses of airline operations, including fuel consumption. Net cash inflows from operating activities in 2024 increased by US$842.8 million, from US$2,263.6 million in 2023 to US$3,106.3 million in 2024, mainly explained by a better operating margin, higher inflows from sales, other collections and a decrease in payments to suppliers. This was partially offset by increased taxes, employee expenses and other operating outflows.
Net cash inflows from operating activities in 2023 increased by US$2,166.8 million, from US$96.8 million in 2022 to US$2,263.6 million in 2023, mainly explained by a better operating margin, which was driven by the economic recovery in the domestic and international markets and LATAM’s ongoing cost efficiency initiatives.
Net cash flow used in investing activities
Net cash used in investing activities in 2024 increased to US$1,169.7 million from US$659.5 million in 2023. The increase is primarily due to higher maintenance, purchases of intangible assets, and cabin improvements. This was partially offset by interest received and proceeds from the sale of aircraft and other assets.
Net cash used in investing activities in 2023 decreased to US$659.5 million from US$749.0 million in 2022. The decrease is mainly due to an increase in the interest income explained by higher interest rates, which offset the cash outflow in investment activities during that period.
Net cash flows used in financing activities
In 2024, net cash in financing activities amounted to US$1,564.9 million, a decrease of US$414.6 million from the US$1,150.2 million in cash used in financing activities in 2023.
During 2024, the Company paid US$2,004.5 million in loan repayments, an increase of US$1,662.5 million compared to US$342.0 paid in 2023, explained mainly by the repayment and refinancing of exit-financing debt. In 2024, the Company also issued US$1,750.1 million principal amount of new debt, whereas no new debt was issued in 2023.
In 2023, net cash in financing activities amounted to US$1,150.2 million, a decrease of US$2,005.2 million from the US$855.0 million in cash used in financing activities in 2022.
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Sources of financing
Fleet Financing
LATAM typically finances the fleet with long-term loans covering between 80% and 100% of the net purchase price. It also finances our aircraft under sale and leaseback arrangements and operational leases in order to add flexibility to the fleet. For more information regarding fleet financing, please refer to the information below and to “—Contractual Obligations—Long Term Indebtedness.”

From time to time in the past, we have considered, and may consider in the future, other forms of financing such as equity or debt, either secured or unsecured, securitization of cargo or ticket receivables or the securitization of fleet and engines.
Revolving Credit Facilities
On March 29, 2016, LATAM entered into a revolving credit facility agreement with several banks, which was subsequently amended and restated on November 3, 2022, whereby LATAM was granted a revolving credit facility in the principal amount of US$600 million (the “Revolving Credit Facility I”).

On July 15, 2024, LATAM, acting through its branch domiciled in the State of Florida, United States of America, entered into an amendment to the Revolving Credit Facility I (the “Revolving Credit Facility I Amendment”) intended to, among other things: (i) extend the scheduled maturity date of the Revolving Credit Facility I to July 2029 with an option to extend it until July 2030; (ii) increase the amount of the Revolving Credit Facility I from US$600 million to an aggregate amount of US$800 million; (iii) eliminate references to the reorganization proceeding to which LATAM and several of its subsidiaries were subject under the rules of Chapter 11; and (iv) include additional lenders to the Revolving Credit Facility I.

On October 12, 2022, in the context of the financing granted to the Company to emerge from the Chapter 11 Restructuring, the Company, acting through its branch domiciled in the State of Florida, United States of America, entered into on October 12, 2022, a US$500 million revolving credit facility named “Super-Priority Debtor-In-Possession and Exit Revolving Loan Agreement” with several banks and financial institutions as lenders, JPMorgan Chase Bank as administrative agent for such lenders and Wilmington Trust, National Association as collateral trustee agent for the secured parties (the “Revolving Credit Facility II,” and together with the Revolving Credit Facility I, the “Revolving Credit Facilities”).

On July 15, 2024, LATAM, acting through its branch domiciled in the State of Florida, United States of America, entered into the amendment to the Revolving Credit Facility II (the “Revolving Credit Facility II Amendment,” and together with the Revolving Credit Facility I Amendment, the “Revolving Credit Facility Amendments”) to, among other things: (i) extend the scheduled maturity date of the Revolving Credit Facility II from November 2026 to July 15, 2029; provided, however, that the Revolving Credit Facility II may be payable in advance 180 days prior to the maturity date of any of the financing agreements that share collateral with the Revolving Credit Facility II if by then such financing agreements have not been paid or extended; (ii) increase the amount of the Revolving Credit Facility II from US$500 million to US$750 million; (iii) delete references to the Chapter 11 Restructuring; (iv) include additional lenders to the Revolving Credit Facility II; and (v) modify certain commercial terms of the Revolving Credit Facility II relating to interest rates and fees.

On November 4, 2024, the Company secured a new credit line under a “Spare Engine Facility” amounting to US$300 million (of which US$275 million had been drawn as of December 31, 2024), maturing on November 4, 2028. The funds were used to repay the previous Spare Engine Facility maturing on November 3, 2027.

As of December 31, 2024, the Company has US$1,575 million fully committed and available from the undrawn Revolving Credit Facilities. The available revolver capacity consists of three lines of credit: one for US$800 million, one for US$750 million and one for US$25 million.
Capital expenditures

Total Capital Expenditure Net of Financing is defined as the total capital expenditure incurred by the company for the acquisition, maintenance, or improvement of strategic assets, net of any third party financing specifically used for these purposes. This metric serves as a direct reflection of the cash outflows committed to these activities.
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This is calculated as the sum of maintenance CapEx and CapEx for growth and fleet net of financing. The definition of each line is as follows:

•Maintenance CapEx: Primarily includes engine shop visits, aircraft C-checks, and restocking of parts for existing operations, as well as CapEx associated with fleet projects that do not contribute additional capacity to the group’s operations or add new features to the existing offered product.

•CapEx for growth and fleet net of financing: Includes CapEx associated with additional spare parts and engines, engine shop visits, aircraft C-checks, and restocking of parts for additional operations, pre-delivery payments (“PDPs”), fleet projects that contribute additional capacity or new features to the existing offered product, and certain other strategic projects that add value, and fleet arrivals, net of their associated financing.

The division between Maintenance CapEx and CapEx for growth & Fleet is calculated internally based on the Company’s different strategic investments. This division is not publicly available.

LATAM Airlines Group’s total capital expenditures net of financing can be reconciled through the following lines: Purchase of Property, Plant and Equipment, Purchases of Intangible Assets, leased maintenance capitalization, along with the net impact of financing and other accounts.

Historical Capital Expenditures
2024 2023 2022
(in US$ millions)
Purchases of property, plant and equipment (1,325) (796) (781)
Purchases of intangible assets (94) (68) (50)
Reconciled by:
Leased maintenance capitalization (246) (295) (149)
Capital raised for fleet related financing 99  —  — 
Financing of pre-delivery payments —  (71) (35)
Recoveries of credits and guarantee deposit received from the sale of aircraft(1)
 27  48  — 
Insurance recovery —  11  — 
Total CapEx net of financing(2)
 (1,540) (1,170) (1,015)
_____________________________________________________
1.In 2024 and 2022, US$7.0 million and US$6.3 million, respectively, were excluded from these lines, as they were related to advance payments arising from aircraft sales during the period.
2.LATAM previously disclosed Total CapEx and has now chosen to report Total CapEx net of financing, as it offers a more precise reflection of cash outflows.
Estimated CapEx
The table below shows LATAM’s estimated total capital expenditures net of financing for the years 2025, 2026 and 2027, which are subject to change and may differ from actual capital expenditures.


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Estimated capital expenditures by year
2025 2026 2027
(in US$ millions)
Total CapEx net of financing (1,412) (1,479) (1,535)
Fleet Commitments

The total of fleet commitments is calculated utilizing LATAM’s purchase price from manufacturers and the present value of commitments for aircraft to be received from lessors as operating leases according to International Financial Reporting Standards (IFRS 16). These fleet commitment amounts are calculated based upon the fleet commitments consistent with the fleet arrivals considered in the fleet plan published in the quarterly Earnings Releases, which are based on the best estimates of fleet arrivals from both aircraft manufacturers and lessors.

In general, LATAM evaluates financing alternatives to meet its fleet commitments and, therefore, the amounts presented are not necessarily indicative of a cash outflow. Aircraft arriving under an operating lease do not represent a cash outflow upon arrival, but rather represent the recognition of a right-of-use asset and a lease liability. On the other hand, aircraft arriving under financial leases will represent a cash outflow equivalent to the cost of the aircraft net of the total financing raised. The cash outflow from aircraft arriving under financial leases is included within the total CapEx net of financing.

Estimates by year, as of December 31, 2024
2025 2026 2027
(in US$ millions)
Fleet Commitments (1,116) (1,303) (1,085)

Long Term Indebtedness
As of December 31, 2024, the average interest rate of our total financial debt was 7.9%. Out of the total financial debt, approximately 76% accrues interest at a fixed rate (through a stated fixed interest rate) or is subject to interest rate caps.

As of December 31, 2024, LATAM had US$3.8 billion in nominal financial debt liabilities. Of this amount, there are no remaining disputed claims.

Secured Debt
Aircraft Debt
1.ECA/EX-IM: Bank loans & bonds guaranteed by Export-Import Bank of the United States (“EX-IM Bank”) and Export Credit Agency (“ECA”) guaranteed loan debt. As of December 31, 2024, the total outstanding amount under these facilities was US$431 million.
2.Commercial Bank Loans: As of December 31, 2024, secured commercial bank loans debt totaled US$569 million.
3.Tax Leases: LATAM has secured debt through Tax Structures with a call option. As of December 31, 2024, the outstanding obligations under these tax leases were US$174 million.

Non Aircraft Debt
1.Term Loan B Facility: On October 18, 2022, LATAM Airlines Group, together with Professional Airline Services, Inc., a Florida corporation and a wholly owned subsidiary of LATAM, issued a five-year term loan facility of US$ 1,100 million with an interest rate, at LATAM’s election, of either (i) Adjusted Term SOFR plus an applicable margin of 9.5%, or (ii) ABR, plus an applicable margin of 8.5%. As of October 15, 2024, the Company repaid the remaining US$1,081 million of the “Term Loan B Facility” in its entirety.
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2.Senior Secured Notes: On October 18, 2022, LATAM Airlines Group, together with Professional Airline Services, Inc., a Florida corporation and a wholly owned subsidiary of LATAM, issued (i) senior secured notes due 2027 for an aggregate principal amount of US$450 million with a coupon of 13.375% and (ii) senior secured notes due 2029 for an aggregate principal amount of US$700 million with a coupon of 13.375%. Further, on October 1, 2024, LATAM Airlines Group issued senior secured notes due 2030 for an aggregate principal amount of US$1,400 million with a coupon of 7.875%. As of October 15, 2024, the Company fully repaid the senior secured notes maturing in 2027, for an aggregate principal amount of US$450 million.
3.Spare Engine Facility: On November 3, 2023, LATAM Airlines Group, acting through its Florida branch, issued a five-year credit facility guaranteed by spare engines for a principal amount of US$275 million. On November 4, 2024, the Company repaid this facility in full, replacing it for a New Spare Engine Facility credit line for up to US$300 million (of which US$275 million had been drawn as of December 31, 2024), maturing on November 4, 2028. This sustainability-linked facility reflects the Company’s commitment to reduce the intensity of CO2 emissions from March 2025 through the New Spare Engine Facility’s maturity. The facility provided for an interest step-up or step-down depending on whether the sustainability targets have been complied with or not.
4.Revolving Credit Facility I: On March 29, 2016, LATAM entered into a revolving credit facility agreement, which was subsequently amended and restated on November 3, 2022, and on July 15, 2024, for an aggregate amount of US$800 million.
5.Revolving Credit Facility II: On October 12, 2022, LATAM Airlines Group, acting through its Florida branch, entered into a revolving credit facility on October 12, 2022, which was subsequently amended and restated on July 15, 2024, for an aggregate amount of US$750 million.
6.Other Guaranteed Obligations: As of December 31, 2024, LATAM’s other guaranteed outstanding debt with the EXIM Bank was US$99 million. This debt is derived from the sale of old aircraft, where the sale price was less than the debt outstanding, which left a shortfall financed by EXIM Bank and now guaranteed indirectly by other EXIM aircraft. This facility matures in November 2029

For a detailed description of the non-aircraft debt, please see Note 31 (Commitments) in our audited consolidated financial statements.
Unsecured Debt
1.Local Bonds: On September 5, 2022, LATAM Airlines Group registered with the Comisión para el Mercado Financiero, the Chilean local regulator, local bonds in the aggregate amount of UF 3,818,042 comprised of the Series F Bonds (BLATM-F), with a maturity in 2042 and a coupon of 2%. As of December 31, 2024, the outstanding amount of Local Bonds was US$147 million.
As of December 31, 2024, we had purchase obligations with Airbus and Boeing totaling US$20.4 billion (according to manufacturer’s list price), with deliveries scheduled between 2025 and 2030, as set forth below:

•Narrow-body passenger aircraft deliveries (Airbus A320-family): 85 aircraft.
•Wide-body passenger aircraft deliveries (Boeing 787-9): 15 aircraft.
Leases
2024 Fleet Additions
During 2024, LATAM completed the addition of the following wide-body aircraft:
•One Boeing 787-9 through an operating lease and two Airbus A330 through wet leases.
During 2024, LATAM completed the addition of the following narrow-body aircraft:
•Four Airbus A320neo through operating leases, two Airbus A320neo through financial leases and seven A321neo through operating leases.
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2023 Fleet Additions
During 2023, LATAM completed the addition of the following wide-body aircraft:
•Five Boeing 787-9 through operating leases.
During 2023, LATAM completed the addition of the following narrow-body aircraft:
•Seven Airbus A321neo through operating leases, eight Airbus A320neo through operating leases and ten Airbus A320 through operating leases.
In connection with our outstanding secured and unsecured debt, we may, at any time and from time to time, seek to retire or purchase our outstanding debt through cash purchases and/or exchanges for equity or debt, in open-market purchases, privately negotiated transactions or otherwise. Such repurchases or exchanges, if any, will be upon such terms and at such prices as we may determine, and will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors. The amounts involved may be material.

C.Research and Development, Patents and Licenses, etc.
LATAM has been registered and/or renewed in Argentina, Australia, Bolivia, Brazil, Canada, Chile, China, Colombia, Costa Rica, Cuba, Dominican Republic, Ecuador, El Salvador, the European Union, Guatemala, Honduras, Hong Kong, India, Japan, Mexico, Nicaragua, New Zealand, Panama, Paraguay, Peru, South Korea, Taiwan, Uruguay, the United States, United Kingdom and Venezuela.
LATAM AIRLINES has been registered and/or renewed in Argentina, Bolivia, Brazil, Chile, China, Colombia, Costa Rica, Cuba, Dominican Republic, Ecuador, El Salvador, the European Union, Guatemala, Honduras, India, Japan, Mexico, Nicaragua, Panama, Paraguay, Peru, South Korea, Spain, Taiwan, United Kingdom, Uruguay and Venezuela.
LATAM AIRLINES BRASIL has been registered and/or renewed in Brazil; LATAM AIRLINES ARGENTINA has been registered and/or renewed in Argentina; LATAM AIRLINES COLOMBIA has been registered and/or renewed in Colombia; LATAM AIRLINES ECUADOR has been registered and/or renewed in Ecuador; LATAM AIRLINES PARAGUAY has been registered and/or renewed in Paraguay and LATAM AIRLINES PERU has been registered and/or renewed in Peru.
LAN has been registered and/or renewed in Argentina, Australia, Bolivia, Brazil, Chile, Colombia, Costa Rica, Cuba, Dominican Republic, Ecuador, El Salvador, the European Union, Guatemala, Honduras, Hong Kong, India, Japan, Mexico, Nicaragua, New Zealand, Panama, Paraguay, Peru, South Korea, Taiwan, Uruguay, the United States, United Kingdom and Venezuela.

LAN AMERICA has been registered and/or renewed in Bolivia; LAN BOLIVIA has been registered and/or renewed in Bolivia; LAN CHILE has been registered and/or renewed in Chile, Argentina, Paraguay, Peru, United Kingdom, the European Union; LANPERU has been registered and/or renewed in Costa Rica; Paraguay, Venezuela; LAN PERU has been registered and/or renewed in Brazil and Peru; TAM has been registered and/or renewed in Argentina, Brazil, China, Colombia, South Korea, Hong Kong, Macao, Mexico, Paraguay, Peru, United Kingdom, the European Union, Uruguay, the United States and Venezuela.

LANTAM GRUPO LATAM AIRLINES has been registered and/or renewed in Ecuador. LATAM CORPORATE has been registered and/or renewed in Argentina, Bolivia, Colombia, Chile, Costa Rica, Ecuador, El Salvador, Guatemala, Honduras, Mexico, Nicaragua, Panama, Paraguay, Peru, Dominican Republic, the European Union, United Kingdom and Uruguay.

LATAM LINEAS AEREAS has been registered and/or renewed in Argentina, Chile, Colombia, Ecuador and Peru; LATAM MRO has been registered and/or renewed in Argentina; Bolivia, Brazil, Chile, Colombia, Ecuador, Mexico, Paraguay, Peru, the European Union, United Kingdom, Uruguay, the United States and Venezuela.

LATAM CARGO has been registered and/or renewed and/or renewed in Argentina, Bolivia, Brazil, Chile, Colombia, Ecuador, Mexico, Paraguay, Peru, the European Union, United Kingdom, Uruguay, the United States and Venezuela; LATAM CARGO BRASIL has been registered and/or renewed in Brazil; LATAM CARGO COLOMBIA has been registered and/or renewed in Colombia; LINEA AEREA CARGUERA DE COLOMBIA has been registered and/or renewed in Colombia; LATAM CARGO MEXICO has been registered and/or renewed in Mexico; LAN CARGO MEXICO has been registered and/or renewed in Mexico; ABSA has been registered and/or renewed in Chile; LAN CARGO COLOMBIA has been registered and/or renewed in Colombia; LAN ECUADOR has been registered and/or renewed in Ecuador, United Kingdom and the European Union; TAM CARGO been renewed in Brazil and Venezuela; TAM CARGO CONVENCIONAL has been registered and/or renewed in Brazil.
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LATAM CARGO GROUP has been registered and/or renewed in Argentina, Colombia, Costa Rica, Ecuador, Guatemala, Mexico, Paraguay, Peru, Uruguay, Australia, Brazil, Canada, China, the European Union, India, United Kingdom and the United States.

LATAM CARGO ACERCANDO OPORTUNIDADES has been registered and/or renewed in Peru; ACERCANDO OPORTUNIDADES has been registered and/or renewed in Ecuador and Colombia; LATAM CARGO BRINGING OPPORTUNITIES CLOSER has been registered and/or renewed in the United States; LATAM CARGO APROXIMANDO OPORTUNIDADES has been registered and/or renewed in Brazil; CHILLCARGO has been registered and/or renewed in Chile.

LATAM FIDELIDADE has been registered and/or renewed in Argentina, Australia, Brazil, Chile, Colombia, Ecuador, Mexico, New Zealand, Paraguay, Peru, the European Union, United Kingdom, Uruguay and the United States; FIDELIDAD has been registered and/or renewed in Argentina; FIDELIDADE has been registered and/or renewed in Argentina and Brazil.

LATAM PASS has been registered and/or renewed in Argentina, Australia, Bolivia, Brazil, Chile, Canada, Colombia, Ecuador, Mexico, New Zealand, Paraguay, Peru, the European Union, United Kingdom, Uruguay, the United States and Venezuela; LATAM PASS MILES has been registered and/or renewed in New Zealand and Australia; LAN PASS has been registered and/or renewed in Chile, Argentina, Brazil, Colombia, Mexico and Uruguay; LATAM TOURS has been registered and/or renewed in Argentina, Chile, Colombia, Ecuador and Peru; LATAM TRADE has been registered and/or renewed in Argentina, Bolivia, Brazil, Chile, Colombia, Costa Rica, Ecuador, El Salvador, Guatemala, Honduras, Mexico, Nicaragua, Panama, Paraguay, Peru, Dominican Republic, the European Union, United Kingdom and Uruguay; LATAM TRAVEL has been registered and/or renewed in Argentina, Bolivia, Brazil, Chile, Colombia, Ecuador, Mexico, Paraguay, Peru, the European Union, United Kingdom, Uruguay, the United States and Venezuela; LATAM TRAVEL SOLUTIONS has been registered and/or renewed in Panama; LATAM VIAGENS has been registered and/or renewed in Brazil; TAM VIAGENS has been renewed in Brazil and Venezuela; TAM VACATIONS has been renewed in Argentina and Brazil; DESTINOS LANTOURS has been registered and/or renewed in Peru.
LATAM, JUNTOS MÁS LEJOS has been registered and/or renewed in Argentina, Chile, and Ecuador; LATAM, TOGETHER, FURTHER has been registered and/or renewed in Australia, New Zealand, United Kingdom and the European Union.
LATAMPLAY has been registered and/or renewed in Argentina, Brazil, Chile, Colombia and Ecuador; LATIN AIRLINE NETWORK has been registered and/or renewed in Chile; LIBREVOLADOR has been registered and/or renewed in Bolivia, Chile, Ecuador, Paraguay and Peru; LIBREVOLADORES has been registered and/or renewed in Bolivia, Chile, Ecuador, Paraguay and Peru; LIDERES DEL SERVICIO has been registered and/or renewed in Argentina.

LATAM AIRLINES, SANS FRONTIÈRES has been registered and/or renewed in France; LATAM AIRLINES, GRENZENLOS has been registered and/or renewed in Germany; LATAM AIRLINES, SIN FRONTERAS has been registered and/or renewed in Spain; LATAM, SIN FRONTERAS has been registered and/or renewed in Argentina, Bolivia, Chile, Colombia, Costa Rica, Cuba, Ecuador, El Salvador, Guatemala, Honduras, Mexico, Nicaragua, Panama, Paraguay, Peru, Dominican Republic, Uruguay and Venezuela. LATAM AIRLINES, SENZA FRONTIERE has been registered and/or renewed in Italy.
LATAM, SOSTENIBILIDAD: UN DESTINO NECESARIO has been registered and/or renewed in the European Union; LATAM UN DESTINO NECESARIO has been registered and/or renewed in Argentina, Chile, Colombia, Ecuador, Mexico and Peru; LATAM A NECESSARY DESTINATION has been registered and/or renewed in United Kingdom and the United States; LATAM DESTINADAS A ESTAR JUNTAS has been registered and/or renewed in Colombia and Peru.
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LATAM VUELA NEUTRAL has been registered and/or renewed in Bolivia, Colombia, Mexico, Peru, the European Union and Uruguay; SOSELVA has been registered and/or renewed in Peru; POSITIVE FS POSITIVE FLIGHT SPECIFIC has been registered and/or renewed in Canada.

LATAM RECICLE SUA VIAGEM has been registered and/or renewed in Brazil and the European Union; LATAM RECICLA TU VIAJE has been registered and/or renewed in Argentina, Bolivia, Chile, Colombia, Ecuador, Mexico, Peru, the European Union, Paraguay and Uruguay.

LATAM 1+1 COMPENSAR PARA CONSERVAR has been registered and/or renewed in Argentina, Brazil, Chile, Ecuador, Mexico and the European Union. LATAM 1+1 OFFSET TO CONSERVE has been registered and/or renewed in Australia, Canada, United Kingdom, New Zealand and the United States. LATAM SEGUNDO VUELO has been registered and/or renewed in Argentina, Bolivia, Chile, Colombia, Ecuador, Mexico, Paraguay, Peru, the European Union and Uruguay; LATAM SECOND FLIGHT has been registered and/or renewed in Australia, United Kingdom, the United States, Canada and New Zealand.

LATAM AVIÓN SOLIDARIO has been registered and/or renewed in Argentina, Bolivia, Chile, Colombia, Ecuador, the European Union, Mexico, Peru, Paraguay and Uruguay; LATAM AVIÃO SOLIDÁRIO has been registered and/or renewed in Brazil.

VOLAMOS POR TI has been registered and/or renewed Colombia; EN LATAM VOLAMOS POR TI has been registered and/or renewed Colombia.

CYBER LATAM has been registered and/or renewed in Chile.

TAM has filed for trademark registration, registered or renewed the following trademarks in Brazil: AJATO, BUSINESS CLASSIC, BUSINESS PLUS, CLASSIC FIDELIDADE, FIRST, LATAM, LATAM 1+1 COMPENSAR PARA CONSERVAR, LATAM AIRLINES, LATAM AIRLINES BRASIL, LATAM AVIÃO SOLIDÁRIO, LATAM CARGO, LATAM CARGO APROXIMANDO OPORTUNIDADES, LATAM CARGO BRASIL, LATAM DESTINADAS A ESTAREM JUNTAS, LATAM FIDELIDADE, LATAM LINHAS AÉREAS, LATAM MRO, LATAM PASS, LATAM RECICLE SUA VIAGEM, LATAM SEGUNDO VOO, LATAM SEM FRONTEIRAS, LATAM SEXTAS COMPENSAM, LATAM TRADE, LATAM TRAVEL, LATAM VIAGENS, LATAM WALLET, LATAMPLAY, LOGO ASOCIADO A MARCA LATAM, MAX, MEGA PROMO, MERCADO LATAM, MUSEU TAM, PAIXÃO PELO RIO TAM, PROMO, RED REPORT, RELAX, TAM, TAM AIRLINES, TAM BUSCA PREÇO, TAM CARGO, TAM CARGO CONVENCIONAL, TAM CARGO PRÓXIMO DIA, TAM CARGO PRÓXIMO VÔO, TAM ESPAÇO +, TAM ESPAÇO MAIS, TAM EXPRESS, TAM MILOR, TAM PREMIUM BUSINESS, TAM PREMIUM ECONOMY, TAM SEARCH BY PRICE, TAM TARIFA LIGHT, TAM TARIFA MAX, TAM TARIFA PROMO, TAM TARIFA TOP, TAM VACATIONS, TAM VIAGENS, UM DESTINO NECESSÁRIO, VAMOS LATAM

D.Trend Information
For 2025, LATAM expects total passenger ASK growth to be between 7% and 9% versus 2024. International passenger growth for the full year 2025 is expected to be between 7% and 9%. LATAM Airlines Brazil’s domestic passenger ASKs in the Brazilian market are expected to increase between 6% and 8%. LATAM group’s domestic ASKs in Spanish-speaking Countries (“SSC”) are expected to increase by approximately 4% to 6%.
Regarding cargo operations, LATAM group expects cargo ATKs to increase between 2% and 4% for full year 2025, mainly driven by the increases in LATAM’s international passenger capacity which result in additional capacity related to the space in the belly of those aircraft.
LATAM aims to enhance operational efficiency by maintaining a competitive and agile cost structure. This strategy drives the continuous strengthening of its value proposition, while focusing on sustainable, profitable growth, preserving a healthy capital structure, and consistently delivering value to customers and stakeholders.
LATAM will continue to use fuel hedging programs and fuel surcharge in our operation to help minimize the impact of short-term movements in crude oil prices. As of December 31, 2024, LATAM had hedged approximately 51%, 47%, 34% and 30% of its estimated fuel consumption for the first, second, third and fourth quarters of 2025 respectively.

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E.Critical Accounting Estimates
For information on the Company’s accounting estimated, see Note 4 of our audited consolidated financial statements below.
ITEM 6 DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
A.Directors and Senior Management
The LATAM Airlines Group’s board of directors consists of nine directors who are elected every two years for two-year terms at annual regular shareholders’ meetings or, if necessary, at an extraordinary shareholders’ meeting, and may be re-elected. The current board of directors was elected at the ordinary shareholders’ meeting held on April 25, 2024, and shall remain in office for two years from its election.
The board of directors may appoint replacements to fill any vacancies that occur during periods between elections. Scheduled meetings of the board of directors are held once a month and extraordinary board of directors’ meetings are called by the Chairman of the board of directors. Extraordinary meetings can be called by the Chairman, or when requested by one or more directors if the need for such a meeting is previously approved by the Chairman, unless the meeting is requested by a majority of the directors or the vice-chairman, in which case the meeting must be held without the previous approval of the Chairman.
On April 25, 2024, the ordinary shareholders’ meeting approved the new annual remuneration structure of the Board, for the fiscal year 2024 and until the next ordinary shareholders’ meeting scheduled to take place in the first four months of 2025. On such meeting, the shareholders agreed on a fixed annual compensation of US$80,000 for each board member (US$160,000 in the case of the chairman). The aforementioned remuneration is payable monthly at the rate of one-twelfth of the corresponding amount, regardless of the number of board meetings directors attend, without limit of sessions.
In addition to the base remuneration, an additional remuneration was approved for each Board member within the shareholders’ meeting held on April 25, 2024, to be determined based on the following criteria:
a.From November 16, 2023 through November 15, 2024, each Board member was entitled to receive an additional remuneration equivalent to 9,226,234 units of remuneration or “URAs”, provided that the director served continuously as a member of the Board until the end of such period.
b.From November 16, 2024 through the date of the next ordinary shareholders’ meeting scheduled to take place in the first four months of 2025, each Board member will be entitled to receive another additional amount equivalent to 3,844,264 URAs, provided that the director serves continuously as a member of the Board until the end of such period.
c.Additionally, members of the Board that are also members of the Board of Directors’ Committee are entitled to certain fixed and variable compensation (see “Board of Directors’ Committee and Audit Committee” below).

If a member of the Board of Directors ceases to hold his/her position before November 15, 2024 (other than due to a legal inability to perform as a director of the company, or due to a supervening conflict of interest or other cause that doesn’t allow him/her to continue exercising his/her fiduciary duties as a director) such director would be entitled to a pro rata portion of the URAs referred to in letter a. above, and would lose the right to receive the remainder. By the same token, if a member of the Board of Directors ceases to hold his/her position after November 15, 2024 but before the date of the next ordinary shareholders’ meeting scheduled to take place in the first four months of 2025 (other than due to a legal inability to perform as a director of the company, or due to a supervening conflict of interest or other cause that doesn’t allow him/her to continue exercising his/her fiduciary duties as a director) such member would maintain the right to receive the URAs referred to in letter a. above, would be entitled to a pro rata portion of the URAs referred to in letter b. above, and would lose the right to receive the reminder. For the sole purpose of calculating the said pro rata portion of the URAs referred to in letter b. above, the ordinary shareholders’ meeting corresponding to 2025 shall be considered to take place on April 15, 2025.
In the event of a change of control of the Company, the director who maintains his/her status on the date the change of control occurs is entitled to receive the URAs referred to in letters a. and b. above. In the event the composition of the Board of Directors changes, each new director will be entitled to the variable compensation described above on a pro rata basis based on the months in which such director would held office, and each exiting director will be paid such compensation on a pro rata basis for the time that such director held his/her position in the respective period.
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Each URA will be measured against the value of a share of LATAM Airlines Group, and will be payable considering the weighted average price of the shares of the Company during the 10 stock-exchange-business-days prior to their respective accrual date (i.e., November 15, 2024, the date of the next ordinary shareholders’ meeting scheduled to take place in the first four months of 2025, the date in which the member of the Board of Directors ceased to be in its position, as applicable). The transactions in the Chilean stock exchanges and non-Chilean stock exchanges (including NYSE) will be taken into consideration for purposes of determining such weighted average price.
The amounts paid during 2024 as variable compensation as per letters (a), (b) and (c) above are:

US$
URAs Directors 763,000
URAs Board Committee 85,000
Total 848,000

Directors Michael Neruda, Bornah Moghbel and William de Wulf, as well as former Director Bouk Van Geloven, have waived their compensations as board members, members of the Board of Directors’ Committee and members of the sub committees.
The following are LATAM Airlines Group’s current directors elected on April 25, 2024:
Directors Position
Ignacio Cueto Plaza(1)
 Director / Chairman
Bornah Moghbel Director / Vice-Chairman
Enrique Cueto Plaza(1)
 Director
Frederico P. Fleury Curado Independent Director
Antonio Gil Nievas Director
Michael Neruda Director
William de Wulf Director
Sonia J.S. Villalobos Director
Alexander D. Wilcox Director
Senior Management Position
Roberto Alvo Chief Executive Officer
Ramiro Alfonsín Chief Commercial Officer
Ricardo Bottas(2)
 Chief Financial Officer
Emilio del Real Chief People Officer
Juan Carlos Menció Chief Legal Officer
Paulo Miranda Chief Customer Officer
Hernán Pasman Chief Operations Officer
Juliana Rios Chief Digital and IT Officer
Andrés Bianchi Chief Executive Officer LATAM Cargo Group
Juan José Tohá Director of Corporate Affairs and Sustainability
______________________________________________________
(1)Ignacio and Enrique Cueto are brothers. Both are members of the Cueto Group, which is defined in “Item 7” as a “Major Shareholder.”
(2)In December 2024, Ricardo Bottas was appointed Chief Financial Officer. His appointment will become effective once the respective migratory requirements are met. In the meantime, Roberto Alvo continues to assume the position on an interim basis.
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Biographical Information
Set forth below are brief biographical descriptions of LATAM Airlines Group’s directors and senior management. All of LATAM’s directors are Chilean citizens, with the exception of three members.
Directors
Ignacio Cueto has served as a member of LATAM Airlines Group’s board of directors and as Chairman since April 2017 and was re-elected to the board of directors of LATAM in April 2019, April 2020, November 2022 and April 2024. Ignacio Cueto’s career in the airline industry extends over 30 years. In 1985, Ignacio Cueto assumed the position of Vice President of Sales at Fast Air Carrier, a national cargo company of that time. In 1985, Ignacio Cueto became Service Manager and Commercial Manager for the Miami sales office. Ignacio Cueto later served on the board of directors of Ladeco (from 1994 to 1997) and LAN (from 1995 to 1997). Ignacio Cueto served as President of LAN Cargo from 1995 to 1998, as Chief Executive Officer-Passenger Business from 1999 to 2005, and as President and Chief Operating Officer of LAN since 2005 until the merger with TAM in 2012. Ignacio Cueto later served as LAN’s CEO until April 2017. Ignacio Cueto also led the establishment of the different affiliates that the Company has in South America, as well as the implementation of key alliances with other airlines. Ignacio Cueto is a member of the Cueto Group. As of December 31, 2024, Ignacio Cueto shared in the beneficial owner of 30,389,446,225 common shares of LATAM Airlines Group (5.03% of LATAM Airlines Group’s outstanding shares) held by the Cueto Group. For more information, see “Item 7. Major Shareholders and Related Party Transactions.”
Bornah Moghbel has been the Vice-Chairman of the Board at LATAM Airlines Group since November 2022. He is a Co-Founder and Partner of Sixth Street, a leading global investment firm that offers capital solutions to companies across all stages of growth. Based in New York, Bornah Moghbel leads Sixth Street’s corporate investing in public markets as well as its global asset investing business. After co-founding Sixth Street in 2009, Bornah Moghbel established the firm’s presence in Europe before returning to the United States in 2016. Prior to joining Sixth Street, Bornah Moghbel was an investor at Silver Point Capital and he began his career in the Financial Sponsors Group at UBS Investment Bank. He earned a B.A. in Economics, with high honors, and a minor in Business Administration from the University of California, Berkeley.
Enrique Cueto has served as a member of LATAM Airlines Group’s board of directors since April 2020. Formerly, he held the position of LATAM Airlines Group’s Chief Executive Officer (“CEO”), since the merger between LAN and TAM in June 2012. From 1983 to 1993, Enrique Cueto was Chief Executive Officer of Fast Air, a Chilean Cargo airline. From 1993 to 1994, Enrique Cueto was a member of the board of LAN Airlines. Thereafter, Enrique Cueto held the position of CEO of LAN until June 2012. Enrique Cueto is a member of the Board of the Endeavor foundation, an organization dedicated to the promotion of entrepreneurship in Chile. Enrique Cueto holds a degree in Economic Sciences from the Catholic University of Chile and is the brother of Ignacio Cueto, Chairman of the board. Enrique Cueto is also a member of the Cueto Group. As of December 31, 2024, Enrique Cueto shared in the beneficial owner of 30,389,446,225 common shares of LATAM Airlines Group (5.03% of LATAM Airlines Group’s outstanding shares) held by the Cueto Group. For more information, see “Item 7. Major Shareholders and Related Party Transactions.”
Frederico P. Fleury Curado has been on the Board of LATAM Airlines Group since November 2022, as an independent director. He has also been an independent director of Transocean since 2013, and Chair of its Governance, Safety and Environment (“GSE”) committee. Frederico Curado is also an independent director at ABB since 2016 and the Chair of its Compensation Committee. He was CEO of Embraer from 2007 to 2016 and CEO of Ultrapar from 2017 to 2021. Frederico Curado holds a B.Sc in Mechanical-Aeronautical Engineering from the Aeronautics Institute of Technology (“ITA”) and an Executive MBA from the University of São Paulo, Brazil.
Antonio Gil Nievas joined LATAM Airlines Group’s Board of Directors in November 2022. He is also a board member at Sociedad Química y Minera de Chile S.A., a Chilean and NYSE publicly listed company. Antonio Gil Nievas has over 25 years of experience in strategic, management, financial and investment leadership roles at global, European and Latin American levels. He was CEO of Moneda Asset Management for over eight years leading it to manage over US$10.5 billion in assets, and also worked at JP Morgan, serving as Managing Director, Global CFO and member of the global executive committees of several businesses with revenues of over US$10.0 billion and operations in the United States, Europe, Larin America and Asia, among other leading positions. In addition, he was formerly a strategic consultant for BCG. Antonio Gil Nievas holds a MSc. and BSc. in industrial engineering with a major in electronics from ICAI (Universidad Pontificia Comillas, Spain). He obtained his MBA from Harvard Business School and also completed the Stanford Executive Program.
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Michael Neruda has been a member of the Board at LATAM Airlines Group since November 2022. He is a Partner of Sixth Street, a leading global investment firm that offers capital solutions to companies across all stages of growth. Michael Neruda is Head of Restructuring and Distressed Investing and leads Sixth Street’s cross-platform investing in businesses where a combination of public markets expertise and private capital financing may be utilized to improve a company’s balance sheet. Prior to joining Sixth Street in 2015, he was a Director at Watershed Asset Management, where he led that firm’s investments in the consumer and energy sectors. Michael Neruda was previously an investment analyst at MHR Fund Management, Silver Point Capital and Merrill Lynch. He received a B.S. in Management Science and Engineering from Stanford University, and is a CFA Charterholder. Michael Neruda has served as a board member and investor representative on numerous corporate boards including with LATAM Airlines, Neiman Marcus, and Stallion Infrastructure Services, as well as serving on the Board of Governors of the Boys & Girls Clubs of San Francisco.
William de Wulf has been a member of the board of directors at LATAM Airlines Group since April 25, 2024. He is Managing Director and member of the North American Investment Team at Strategic Value Partners (“SVP”). Prior to joining SVP, he worked across both the Americas and European Special Situations Groups at Goldman Sachs. In addition to his role at LATAM Airlines Group, he serves on the board of Swissport and has previously served on the boards of Vallourec and Vita. He holds a BSc and MSc in Applied Mathematics and Economics from Ecole Polytechnique and a MSc in Financial Engineering from Columbia University.
Sonia J.S. Villalobos joined the Board of LATAM Airlines in August 2018. Sonia Villalobos is a Brazilian citizen and a regular member of the board of directors of Petrobras and Telefónica Vivo. She is a founding partner of the company Villalobos Consultoria since 2009 and a professor of post-graduate courses in finance at Insper since 2016. Between 2005 and 2009, she was the Manager of Funds in Latin America, in Chile, managing mutual and institutional funds of Larrain Vial AGF. From 1996 to 2002, Sonia Villalobos was responsible for Private Equity investments in Brazil, Argentina and Chile for Bassini, Playfair & Associates, LLC. As of 1989 she was Head of Research of Banco de Investimentos Garantia. She graduated in Public Administration from Escola de Administração de Empresas de São Paulo in 1984 and obtained a Master in Finance from the same institution in 2004. She was the first person to receive the CFA certification in Latin America, in 1994.
Alexander Wilcox has been a member of the board of directors at LATAM Airlines Group since October 2020. He resides in the United States and has broad experience in the aviation industry where he has held executive positions in several airlines since 1996, including as a founder of JetBlue Airways and as the founding President and COO of a large airline in India. Alexander Wilcox is a cofounder and the CEO of JSX, a public charter commuter air carrier in the U.S. and the highest rated air carrier in North America by NPS. He has been a Henry Crown Fellow of the Aspen Institute since 2011 and is a member of the Dallas chapter of Young Presidents Organization (YPO Gold). Alexander Wilcox has been a private pilot since 1987. He also serves on the board of directors of The Compass School of Texas, an elementary school in Dallas. Alexander Wilcox holds a BA degree in Political Science and English from the University of Vermont.
Roberto Alvo has been the Chief Executive Officer (“CEO”) of LATAM since March 31, 2020. Prior to this, he worked as Chief Commercial Officer (“CCO”) of LATAM, in charge of managing the group’s passenger and cargo revenue. Previously, he was Vice-President of International and Alliances at LATAM Airlines, and Vice-President of Strategic Planning and Development. Roberto Alvo joined LAN Airlines in November 2001, where he served as Chief Financial Officer of LAN Argentina, as Manager of Development and Financial Planning at LAN Airlines, and as Deputy Chief Financial Officer of LAN Airlines. Before working for the group, Roberto Alvo held various positions at Sociedad Química y Minera de Chile S.A. He is a civil engineer, and holds an MBA from IMD Business School in Lausanne, Switzerland.

Ramiro Alfonsín is LATAM’s Chief Commercial Officer LATAM a position he has held since November 2024, previously acting as Chief Financial Officer (“CFO”) of LATAM for eight years. Formerly, he worked 16 years for Endesa, a leading utilities company, in Spain, Italy and Chile, where he served as Deputy Chief Executive Officer and Chief Financial Officer for their Latin American operations. Before joining the utilities sector, he worked for five years in Corporate and Investment Banking for several European banks. Ramiro Alfonsin holds a degree in Business Administration from Pontificial Catholic University of Argentina.
Ricardo Bottas has nearly three decades of experience across various industries, including auditing, energy, oil and gas, insurance and healthcare. Throughout his career, he has held key roles in management, control, corporate finance, mergers and acquisitions, and investor relations, allowing him to develop a comprehensive market perspective. Over the past 12 years, Ricardo has served as CEO and CFO of public companies in regulated markets in Brazil, leading significant transformations in companies and industries operating in highly competitive and challenging environments. He holds a degree in Business Administration from the University of Salvador, Brazil, and an MBA in Corporate Finance from IBMEC, Rio de Janeiro, Brazil.
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Emilio del Real is the LATAM Chief People Officer, a position he took over in August 2005. Between 2003 and 2005, he was Human Resources Manager at D&S, a Chilean retail company. Between 1997 and 2003, he served in various positions at Unilever, including Human Resources Manager of Unilever Chile, and Manager of Training and Recruitment and Management Development for Latin America. Emilio del Real has a degree in Psychology from the Gabriela Mistral University.
Juan Carlos Menció has been the Chief Legal Officer at LATAM Airlines Group since September 1, 2014. Previously, he held the position of General Counsel for North America for LATAM Airlines Group and its affiliates, as well as General Counsel for its worldwide Cargo Operations, both since 1998. Prior to joining LATAM, he was in private practice in New York and Florida, representing various international airlines. Juan Carlos Menció obtained his Bachelor’s Degree in International Finance and Marketing from the School of Business at the University of Miami and his Juris Doctor Degree from Loyola University.
Paulo Miranda has been LATAM’s Chief Customer Officer since May 2019. Miranda has over 20 years of experience in the aviation industry, having held different positions, first at Delta Air Lines in the United States, and then at Gol Linhas Aéreas in Brazil. In his last role, Paulo Miranda was responsible for the Client Experience department, having previously worked in finance and alliances, as well as in the negotiation and implementation of joint ventures. Paulo Miranda holds a Bachelor of Business Administration degree from the Carlson School of Management, University of Minnesota, USA.
Hernán Pasman has been the Chief Operations Officer of LATAM Airlines Group since October 2015. He joined LAN Airlines in 2005 as a head of strategic planning and financial analysis of the technical areas. Between 2007 and 2010, Hernán Pasman was the Chief operating officer of LAN Argentina, then, in 2011 he served as Chief Executive Officer for LAN Colombia. Prior to joining the company, between 2001 and 2005, Hernán Pasman was a consultant at McKinsey & Company in Chicago. Between 1995 and 2001, Hernan held positions at Citicorp Equity Investments, Telefonica de Argentina and Argentina Motorola. Hernán Pasman holds a Civil Engineering degree from Instituto Tecnológico de Buenos Aires and an MBA from Kellogg Graduate School of Management (2001).
Juliana Rios been the Chief Digital and IT Officer of LATAM Airlines since January 2021. Juliana Rios has over 20 years of experience in services and technology in the financial and airline industries. Her career spans business transformation, mergers & acquisitions, digitization, IT, and large-scale project management, such as PSS migration. As Chief IT & Digital Officer, she leads LATAM Airlines’ digital transformation efforts. Prior to joining LATAM, Juliana Rios was a senior executive at Banco Santander, Brazil, spearheading the retail business and customer experience strategy. She headed integration programs in Brazil, Italy and the Netherlands. Juliana Rios holds a Bachelor degree in Business Administration and an MBA in Corporate Management from IBMEC, Brazil.
Andrés Bianchi has been Chief Executive Officer of LATAM Cargo Group since 2017. In this role he manages and coordinates the air freight activities of the Group’s affiliates. Andrés Bianchi joined LATAM Cargo in 2010 and has held various leadership roles prior to his current position, including VP Commercial North America, Europe & Asia, VP Cargo Network and VP of Finance. Prior to joining LATAM Cargo, he worked as a consultant at McKinsey and Company. Additionally, from 2002 to 2006 he served as LAN Airlines’ Head of Investor Relations. Andrés Bianchi holds a Business Administration degree from Pontificia Universidad Catolica de Chile and an MBA from The Wharton School of the University of Pennsylvania.
Juan José Tohá is a journalist with a specialty in Sustainability from Oxford University, as well as a Master’s and PhD in Communication from the Autonomous University of Barcelona. Juan José Tohá has vast experience in the design and implementation of communication strategies and the interaction of organizations with their environment. Juan José Tohá has served in FAO’s Latin America and Caribbean regional office in Santiago, Chile, and as Communications Manager for Codelco and BHP South America, among others. In 2019, he joined LATAM group as Director of Corporate Affairs and Sustainability, reporting directly to the CEO of LATAM group, and he coordinates the corporate strategy of Public Affairs, External Communications, and Sustainability.
B.Compensation
For information on executive compensation, see “—Employees” below.
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C.Board Practices
Our board of directors has nine members. The terms of each of our current directors will expire in 2 years from the date of their appointment, unless previously renewed in accordance to applicable law. See “—Directors and Senior Management” above.
Committees
Board of Directors’ Committee and Audit Committee

Pursuant to the Ley sobre Sociedades Anónimas No. 18,046 (“Chilean Corporation Act”) and the Reglamento de Sociedades Anónimas (the “Regulation to the Chilean Corporate Law”, and together with the Chilean Corporation Act, the “Chilean Corporate Law”), LATAM Airlines Group must have a board of directors’ committee composed of three board members. LATAM Airlines Group has established a three-person Board of Directors’ Committee, which, among other duties, is responsible for:

•examining the reports of LATAM’s external auditors, the balance sheets and other financial statements submitted by LATAM’s administrators to the shareholders, and issuing an opinion with respect thereto prior to their presentation to the shareholders for their approval;

•evaluating and proposing external auditors and rating agencies;
•proposing a general policy for managing conflicts of interest and pronouncing on the company’s general policies;
•reviewing internal control reports pertaining to related-party transactions;
•examining and reporting on all related-party transactions; and
•reviewing the salary scale of LATAM’s senior management.

Under Chilean Corporate Law we are required, to the extent possible, to appoint a majority of independent board members to the Board of Directors’ committee. Pursuant to the Chilean Corporation Act, no person shall be considered independent who, at any time during the previous eighteen months: (1) maintained any relationship, interest or economic, professional, credit or commercial dependence, of a nature and relevant volume, with the company, other companies of the financial conglomerate to which the company belongs, its controller, or principal executive officer of any one of them, or was a director, manager, administrator, principal executive officer or advisor of such companies; (2) was a close relative (i.e., parents, father/mother in law, siblings, sisters/brothers in law), to any one of the persons referred to in 1 above; (3) was a director, manager, administrator or principal executive officer of non-profit organizations that received contributions or large donations from any individual referred to in clause 1 above; (4) was a partner or shareholder that possessed or controlled, directly or indirectly, 10% or more of the company’s capital; a director; manager; administrator or principal executive officer of entities who had provided consulting or legal services, for relevant amounts, or of external audit, to the persons referred to in 1 above; or (5) was a partner or shareholder who possessed or controlled, directly or indirectly, 10% or more of the company’s capital; a director; manager; administrator or principal executive officer of principal competitors, suppliers or clients of the company.

Should there be more than three directors entitled to participate in the directors committee, the board of directors shall elect the members of the directors committee by unanimous vote.

Should the board of directors fail to reach an agreement, preference to be appointed to the committee shall be given to directors elected with the highest percentage of votes cast by shareholders that individually control or possess less than 10% of the company’s shares. If there is only one independent director, such director shall appoint the other members of the committee among non-independent directors. Such directors shall be entitled to exercise full powers as members of the committee. The Chairman of the Board of Directors shall not be entitled to be appointed as a member of the committee nor any of its subcommittees, unless he is an independent director.

To be elected as independent director, the candidates must be proposed by shareholders that represent 1% or more of the shares of the company, at least 10 days prior to the date of the shareholders’ meeting called to that end. The candidate who obtains the highest number of votes shall be elected as independent director.

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The current members of the Board of Directors’ Committee are Frederico P. Fleury Curado, Michael Neruda and Sonia J.S. Villalobos.

We pay each member of the Board of Directors’ Committee (other than to its Chairman) a fixed annual compensation of US$50,000. In turn, we pay to the Chairman of the Board of Directors’ Committee a fixed annual compensation of US$85,417. In each case, such compensation is payable monthly at the rate of one-twelfth of the corresponding amount, regardless of the number of meetings they attend, without limit of sessions.

Additionally, each member of the Board of Directors’ Committee, in his/her capacity as such, is entitled to a variable compensation of (i) 3,075,411 URAs for the period between November 16, 2023 and November 15, 2024; and (ii) 1,281,421 URAs for the period between November 16, 2024 and the date of the next ordinary shareholders’ meeting scheduled to take place in the first four months of 2025; in each case, provided the committee member remains in its position during such period.

If a member of the Board of Directors’ Committee ceases to hold his/her position before November 15, 2024 (other than due to a legal inability to perform as a director of the company, or due to a supervening conflict of interest or other cause that doesn’t allow him/her to continue exercising his/her fiduciary duties as a director) such member would be entitled to a pro rata portion of the URAs referred to in clause (i) above, and would lose the right to receive the remainder. By the same token, if a member of the Board of Directors’ Committee ceases to hold his/her position after November 15, 2024 but before the date of the next ordinary shareholders’ meeting scheduled to take place in the first four months of 2025 (other than due to a legal inability to perform as a director of the company, or due to a supervening conflict of interest or other cause that doesn’t allow him/her to continue exercising his/her fiduciary duties as a director) such member would maintain the right to receive the URAs referred to in clause (i) above, would be entitled to a pro rata portion of the URAs referred to in clause (ii) above, and would lose the right to receive the reminder. For the sole purpose of calculating the said pro rata portion of the URAs referred to in clause (ii) above, the ordinary shareholders’ meeting corresponding to 2025 shall be considered to take place on April 15, 2025.

In the event of a change of control of the Company, the director who maintains his/her status as member of the Board of Directors’ Committee on the date the change of control occurs is entitled to receive the URAs referred to in clauses (i) and (ii) above. In the event the composition of the Board of Directors’ Committee changes, each new member will be entitled to the variable compensation described above on a pro rata basis based on the months in which such member would held office, and each exiting member will be paid such compensation on a pro rata basis for the time that such director held his/her position in the respective period.

Pursuant to U.S. regulations, we are required to have an audit committee which complies with the independence requirements set forth in Rule 10A-3 under the Exchange Act.

Given the significant overlap in the functions required to be performed by the Board of Directors’ Committee contemplated under Art. 50 bis of Chilean Law No. 18,046 and the Audit Committee, historically the Company’s Board of Directors’ Committee served as its Audit Committee for purposes of U.S. regulations. However, in connection with the relisting of the Company’s ADSs on the NYSE, the Company created an Audit Committee under U.S. law composed of two members that, as of December 31, 2024, comply with the independence requirements set forth in Rule 10A-3 under the Exchange Act. The members of this Audit Committee are not entitled to receive any compensation in their capacity as such.

The current members of this Audit Committee are Frederico P. Fleury Curado and Sonia J.S. Villalobos.

LATAM Board Subcommittees

LATAM’s board of directors has also established four subcommittees to review, discuss and make recommendations to our board of directors. These include a Strategy & Sustainability Committee, a Leadership Committee and a Finance Committee. The Strategy & Sustainability Committee focuses on the corporate strategy, current strategic issues and the three-year plans and budgets for the main business units and functional areas and high-level competitive strategy reviews. The Leadership Committee focuses on, among other things, group culture, high-level organizational structure, appointment of the LATAM CEO and his/her other reports, corporate compensation philosophy, compensation structures and levels for the LATAM CEO and other key executives, succession or contingency planning for the LATAM CEO and performance assessment of the LATAM CEO. The Finance Committee is responsible for financial policies and strategy, capital structure, monitoring policy compliance, taxation strategy and the quality and reliability of financial information.
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We pay each member of such subcommittees a fixed annual compensation of US$20,000 for each of the subcommittees of which the Director is a member, capped at US$40,000 per year for all the subcommittees of which the Director may be a member. Additionally, the Chairman of each committee is entitled to an additional fixed annual compensation of US$14,167, capped at US$28,334. These annual compensations are paid monthly at the rate of one-twelfth of the corresponding amount, regardless of the number of subcommittee sessions they attend to, without limit of sessions.

Corporate Governance Practices

The company follows strict procedures in order to comply with current legislation in the United States and in Chile on corporate governance. In this context, the Company has published a Manual for Corporate Practices which can be found on the LATAM investor relations website and incorporates the applicable legislation in its policies and decisions. Information obtained on, or accessible through, this website is not incorporated by reference herein and shall not be considered part of this annual report.

D.Employees
The following table sets forth the number of employees in various positions at the Company.
As of December 31,
Employees ending the period 2024 2023 2022
Administrative 5,322 5,149 4,628
Sales 811 794 815
Maintenance 6,155 5,459 5,083
Operations 12,563 11,402 10,904
Cabin crew 9,312 8,688 7,423
Cockpit crew 4,500 4,076 3,654
Total 38,663 35,568 32,507

(1)As of December 31, 2024, approximately 52.6% of our employees worked in Brazil, 24.6% in Chile, 9.4% in Peru, 6.4% in Colombia, 1.4% in Ecuador, 0.6% in Argentina, and 5.0% in the rest of the world.
Our salary structure is comprised of: (a) fixed payments (base salary and other fixed payments such as legal gratifications, local bonus, company seniority and others, depending on each country’s law and market practice); (b) short term incentives (associated with corporate, area and individual performance), applicable to our ground staff; (c) long term incentives (applicable to our senior executives (Directors and above).
According to the local law requirements, we make pension and social security contributions on behalf of our employees. Additionally, for our air staff and specialized professionals such as mechanics, we have fixed and variable payments, subject to the local collective agreements.
Regarding benefits, we usually provide life insurance and medical insurance, complementary to the coverage provided by the legal system. We also grant other benefits, according to local market practice (meal, transportation, maternal and paternal leave, etc.). In addition, we have a global staff travel program, which grants free and discounted tickets to our permanent employees.
Long Term Incentive Compensation Program
(a) LP3 compensation plans (2020-2023)

The Company implemented a program for a group of executives, which existed until March 2023, and granted a benefit to executives which was vested provided a specific price (defined each year) of LATAM’s shares was met.
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However, benefits were never awarded to executives under this Compensation Plan because the share price required for the benefit to vest was below the initial target.
(b) 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 Restructuring, our Board of Directors approved on April 25, 2023, to extend the grant of an extraordinary and exceptional incentive called Corporate Incentive Plan (“CIP”). The CIP contemplates incentives divided in three categories tailored to three different groups or categories of employees, depending on whether employees were hired by the Company directly or by other companies of the LATAM Airlines 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. 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 2024, the amount accrued related to this CIP was US$78.8 million, which is recorded in the “Administrative expenses” line of the Consolidated Statement of Income by Function. As of December 31, 2024, the amount of this plan recorded in the consolidated statement of financial position is US$152.6 million.

For a detailed description, please see Note 22 (Employee Benefits) in our audited consolidated financial statements.

Compensation Recovery Policy

In October 2022, the SEC adopted rules, pursuant to Section 10D-1 of the Securities Exchange Act of 1934, as amended, requiring national securities exchanges and national securities associations, such as NYSE, to request listed companies to adopt a written compensation recovery (clawback) policy providing for the recovery, in the event of a required accounting restatement, of incentive-based compensation received by the Chief Executive Officer and certain other “executive officers” as defined in Rule 10D-1(d) under the Exchange Act. The amendment to NYSE’s listing rules became effective on October 2, 2023, and issuers listed on NYSE were required to adopt SEC-compliant clawback policies by December 1, 2023. On December 14, 2023, our Board of Directors adopted LATAM Airlines’ compensation recovery policy, a copy of which is attached as Exhibit 97 to this annual report.
Labor Relations
LATAM has intensified its efforts to ensure that labor relations between the group, its employees and their legal representatives are carried out through dialogue and result in agreements that benefit both parties, while maintaining sound criteria for the operation, efficiency, sustainability and care for people. During 2024, the company renegotiated certain of its collective agreements in order to meet this criterion, and agreed to amend some of them to adapt them to new operational conditions and costs. The company continues to constantly evaluate possible labor conflicts and prepare respective contingency plans.

Below are the main milestones of our relationship with LATAM unions:
Chile
In 2024, 4 collective bargaining processes were carried out with unions, all of which were initiated voluntarily. The aforementioned collective bargaining processes involved: two collective bargaining processes with Administrative Unions, one with the Cabin Crew Union and one with the Maintenance Union, having a total of 2,145 employees involved in such negotiations. Of the four collective bargaining processes carried out, all were concluded within the ordinary term for such processes and approved by a large majority of their respective assemblies, which limit the possibility of contingencies for the operation.
Ecuador
In July 2019, LATAM Airlines Ecuador renewed its voluntary agreement with the pilot’s association in Ecuador, valid until July 2023. Then, this agreement was modified on June 26, 2020, with its term being extended until December 31, 2023.
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Following extended negotiations during 2024, the pilot’s association rejected the Company’s proposal. However, negotiations are still ongoing as both parties continue to seek a resolution.
Colombia

During 2023, we initiated 3 voluntary negotiations with the following unions: the Industrial Union of Aviation Workers (“SINTRATAC”), the Technicians Union (“ACMA”) and the Cabin Crew Union (“ACAV”), reaching successful agreements will remain in effect until December 2025.

The collective agreement reached in 2022 with the Pilots’ LATAM Colombia Union (“ADALAC”) remained in effect until December 2024.

On February 8, 2023, the Arbitration Tribunal of Aerovías de Integración Regional S.A and the pilot’s union (“ACDAC”) rendered an award resolving all of the outstanding negotiation points that were pending to be resolved between LATAM Airlines Colombia and the ACDAC since 2019, thereby settling the dispute. However, on June 13, 2023, the ACDAC re-opened negotiations and presented a new list of demands to LATAM Airlines Colombia related to the well-being, economic and operational aspects for ACDAC members. Negotiations concluded in October 2023 and the parties did not reach an agreement. On November 6, 2024, the Arbitration Tribunal rendered an award regarding the dispute, ruling that LATAM Airlines Colombia must implement specific measures to improve working conditions and adjust compensation for ACDAC members. Subsequently, on November 25, 2024, LATAM Airlines Colombia filed a motion to annul one of the provisions in the award, resulting in the matter being taken to the Supreme Court of Justice of Colombia for resolution.
Peru
LATAM Airlines Peru has seven unions that represent workers from different functional areas: pilots, cabin crew, aircraft technicians, flight dispatchers and airport workers. Our current collective agreements were signed for a duration of four years.
During 2023, LATAM Airlines Peru concluded successfully 5 collective bargaining processes with the following unions: 2 collective bargaining processes with the aircraft technicians, 1 collective bargaining process with the airport workers, 1 collective bargaining process with the flight dispatchers and 1 collective bargaining process with the pilots.
During 2024, the collective agreements signed in 2023 were maintained.
Brazil
Under Brazilian law, the term of collective bargaining agreements is limited to two years. LATAM Airlines Brazil has historically negotiated collective bargaining agreements with eleven labor unions in Brazil: one crew flight union, which represents pilots, copilots and flight attendants, and ten ground staff unions. In December 2024, LATAM Airlines Brazil successfully renegotiated collective bargaining agreements with all unions. Collective labor agreements with all the staff unions will remain in effect until November 2026, while collective labor agreements with the crew flight union will remain in effect until November 2026 for cargo pilots, and until November 2025 for passenger pilots and flight attendants.
E.Share Ownership
As of December 31, 2024, the members of our board of directors and our executive officers as a group owned 5.03% of our shares. None of our directors or executive officers has voting rights that are different from any of our other shareholders. See “Item 7. Major Shareholders and Related Party Transactions.”
For a description of stock options granted to our executive officers, see “—D. Employees—Long Term Incentive Compensation Program.”
F.Disclosure of a registrant’s action to recover erroneously awarded compensation
Not applicable.


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ITEM 7 MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
A.Major Shareholders

As of December 31, 2024, Sixth Street Partners Management Company beneficially owned 24.10% of our common shares; Strategic Value Partners beneficially owned 13.83% of our common shares in the form of ADSs, Delta Air Lines, Inc. owned 10.05% of our common shares; Qatar Airways Investments (UK) Ltd. owned 10.03% of our common shares and Cueto Group owned 5.03% of our common shares. Approximately 25.11% of our common shares are held by shareholders who have agreed not to sell such shares until November 2026, including Delta Air Lines, Inc., Qatar Airways Investments (UK) Ltd. and Costa Verde Aeronautica S.A., a company that is part of the Cueto Group. Such shares were issued upon conversion of the convertible notes Series H of the Company prior to the date hereof, and, in the case of Costa Verde, certain additional shares, which it has agreed with certain other shareholders not to sell prior to November 3, 2026, subject to certain limited exceptions, including the ability to pledge such shares. The convertible notes Series H and their underlying shares were issued in connection with our emergence from the Chapter 11 Restructuring.

The information reflects LATAM Airlines Group S.A.’s shareholder structure as reflected in shareholder’s registry from the Depósito Central de Valores (“DCV”) and complemented by filings of Schedules 13F with the SEC. From the total number of shares registered in the name of “Banco de Chile por Cuenta de State Street,” Banco de Chile confirms the amount of shares corresponding to Sixth Street Partners Management Company.
Ignacio Cueto (Chairman of the Board of LATAM), Enrique Cueto (LATAM board member) and certain other Cueto family members and entities controlled by them, comprise the Cueto Group. As of December 31, 2024, the Cueto Group beneficially owned (as defined in Rule 13d-3 under the Securities Exchange Act) 5.03% of LATAM Airlines Group’s common shares. Pursuant to a shareholders’ agreement entered into by the Backstop Creditors and the Backstop Shareholders in connection with LATAM’s emergence from bankruptcy proceedings, Delta Air Lines, Inc., Qatar Airways Investments (UK) Ltd. and the Cueto Group are entitled to elect four of the nine members of our board of directors. See “-Shareholders’ Agreements.”
The table below sets forth additional information regarding the beneficial ownership of our common shares, as of December 31, 2024, by our major shareholders or shareholder groups, and minority shareholders.
Beneficial ownership
(as of December 31, 2024)
Number of shares of common
stock beneficially owned		 Percentage of common stock
beneficially owned
Shareholder
Sixth Street Partners Management Company 145,646,987,995 24.10  %
Strategic Value Partners 83,600,686,000 13.83  %
Delta Air Lines, Inc. 60,722,284,826 10.05  %
Qatar Airways Investments (UK) LTD 60,640,769,249 10.03  %
Cueto Group 30,389,446,225 5.03  %
Others 223,437,703,292 36.97  %
Total 604,437,877,587 100.00  %

As of December 31, 2024, other minority investors held 36.97% of our stock, and 22.68% of our capital stock held in the form of ADSs. It is not practicable for us to determine the number of ADSs or common shares beneficially owned in the United States. As of December 31, 2024, we had 2,131 record holders of our common shares. It is not practicable for us to determine the portion of shares held in Chile or the number of record holders in Chile. All of our shareholders have identical voting rights.

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In the past three years, the only significant changes in the percentage of ownership held by any of LATAM’s current major shareholders (with more than 5% stake) have been represented by (i) a decrease in the Cueto group’s ownership from 16.39% as of February 28, 2022 to 5.03% as of December 31, 2022, (ii) a decrease in Delta Airlines’ ownership from 20.00% as of February 28, 2022 to 10.05% as of December 31, 2022, and (iii) a decrease in the Selling Shareholders ownership interests in LATAM following the re-IPO as follows: (a) a decrease in Sixth Street Partners Management Company’s ownership from 27.91% to 24.10% as of December 31, 2024, and (b) a decrease in Strategic Value Partners’ ownership from 16.02% to 13.83% as of December 31, 2024.
Shareholders’ Agreements

On or around the date of LATAM’s emergence from bankruptcy proceedings (the “Effective Date”) in accordance with the terms and conditions of the Chapter 11 plan confirmed by the Bankruptcy Court on June 18, 2022, the Backstop Creditors and the Backstop Shareholders entered into a Shareholders’ Agreement (the “Shareholders’ Agreement”) that provides, among other things, that: (A) for a two year term following the Effective Date, the parties to the Shareholders’ Agreement shall vote their shares so that the LATAM Airlines Group Board of Directors will comprise, both initially and in the filling of any vacancies thereon, nine directors, who in accordance with Chilean law, shall be appointed as follows: (i) five directors, including the vice-chair of the LATAM Airlines Group Board of Directors, nominated by the Backstop Creditors; and (ii) four directors, including the chair of the LATAM Airlines Group Board of Directors (who shall be a Chilean national), nominated by the Backstop Shareholders; and (B) for the first five years after the Effective Date, in the event of a wind-down liquidation or dissolution of LATAM Airlines Group, recoveries on the shares delivered in exchange for the New Convertible Notes Class B to the extent the conversion option thereunder is exercised, shall be subordinated to any right of recovery for any shares delivered or to be delivered upon conversion of the New Convertible Notes Class A or New Convertible Notes Class C, in each case held by the Backstop Creditors on the Effective Date.
Composition of the LATAM Airlines Group Board

On April 3, 2024, Bouk Van Geloven resigned from his position as Director of the Company, effective as of April 24, 2024. As a result of his resignation, and in accordance with the provisions of Article 32 of Chilean Law No. 18,046, a complete renewal of the Board of Directors was required.

At the Ordinary Shareholders’ Meeting of the Company held on April 25, 2024, the following individuals were elected to the Board of Directors: Enrique Cueto Plaza, Ignacio Cueto Plaza, Frederico P. Fleury Curado (as independent director), William de Wulf, Antonio Gil Nievas, Bornah Moghbel, Michael Neruda, Sonia Villalobos and Alexander D. Wilcox.
Management of the LATAM Airlines Group
The CEO of LATAM Airlines Group is the highest ranked officer of LATAM and reports directly to the LATAM Airlines Group's board of directors. The CEO LATAM is tasked with the general supervision, direction and control of the business of LATAM. In the case of a departure of the current CEO LATAM, our board of directors will select the successor after receiving the recommendation of the Leadership Committee.
The head office of LATAM continues to be located in Santiago, Chile.
Voting Agreements, Transfers and Other Arrangements
Voting Agreements
The parties to the Holdco I shareholder’s agreement and TAM shareholders agreement have agreed to vote their voting shares of Holdco I and shares of TAM so as to give effect to the agreements with respect to representation on the TAM board of directors discussed above.
Transfer Restrictions
As provided in the aforementioned shareholders’ agreements, TEP Chile S.A. (“TEP Chile”) may sell all voting shares of Holdco I beneficially owned by it as a block, subject to satisfaction of the block sale provisions, if a release event (as described below) occurs. A “release event” will occur if (i) a capital increase of LATAM Airlines Group occurs, (ii) TEP Chile does not fully exercise the preemptive rights granted to it under applicable law in Chile with respect to such capital increase in respect of all of its restricted LATAM Airlines Group common shares, and (iii) after such capital increase is completed, the individual designated by TEP Chile for election to the board of directors of LATAM Airlines Group with the assistance of the Cueto Group is not elected to the board of directors of LATAM Airlines Group. As a result of the implementation of the restructuring set forth in our Plan of Reorganization, a “release event” occurred.
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However, no sale of the voting shares of Holdco I beneficially owned by TEP Chile has been implemented.
Restriction on transfer of TAM shares
LATAM agreed in the Holdco I shareholders’ agreement not to sell or transfer any shares of TAM stock to any person (other than our affiliates) at any time when TEP Chile owns any voting shares of Holdco I. However, LATAM will have the right to effect such a sale or transfer if, at the same time as such sale or transfer, LATAM (or its assignee) acquires all the voting shares of Holdco I beneficially owned by TEP Chile for an amount equal to TEP Chile’s then current tax basis in such shares and any costs TEP Chile is required to incur to effect such sale or transfer. TEP Chile has irrevocably granted us the assignable right to purchase all of the voting shares of Holdco I beneficially owned by TEP Chile in connection with any such sale.
Conversion Option
Pursuant to the Holdco I shareholders’ agreement, we have the unilateral right to convert our shares of non-voting stock of Holdco I into shares of voting stock of Holdco I to the maximum extent allowed under law and to increase our representation on the TAM and Holdco I boards of directors if and when permitted in accordance with foreign ownership control laws in Brazil and other applicable laws if the conversion would not have an adverse effect (as defined above under the “-Transfer Restrictions” section). In February 2019, we completed the procedures for the exchange of shares of Holdco I S.A., through which LATAM Airlines Group SA increased its indirect participation in TAM S.A., from 48.99% to 51.04%. This transaction was undertaken pursuant to the Provisional Measure No. 863/2018 issued by CADE on December 13, 2018, through which the participation of up to 100% of foreign capital in airlines in Brazil is permitted.
If we can purchase and/or convert our shares and we do not timely exercise our right to do so, then the controlling shareholders of TAM will have the right to put their shares of voting stock of Holdco I to us for an amount equal to the sale consideration.
Acquisitions of TAM Stock
The parties have agreed that all acquisitions of TAM common shares by LATAM Airlines Group, Holdco I, TAM or any of their respective subsidiaries from and after the effective time of the merger will be made by Holdco I.
B.Related Party Transactions
General
We have engaged in a variety of transactions with our affiliates, including entities owned or controlled by certain of our major shareholders. In the ordinary course of business, we render to and receive from related companies’ services of various types, including aircraft leases, aircraft interchanges, freight transportation and reservation services. Such transactions, none of which is individually material, are summarized in Note 32 to our audited consolidated financial statements for the fiscal year ended December 31, 2024.
Related-party means, among others, subsidiaries, affiliates, natural persons or legal entities with control of 10% or more of LATAM’s voting stock, vice presidents, directors or senior executives as well as their respective spouses, relatives, and companies in which said persons are either direct or indirect owners of 10% or more of LATAM’s voting stock, or in which they have held a position over the last 18 months.
Related-Party Transactions can only be executed if said transactions are in LATAM’s interest and adjust to price, terms and conditions prevalent in the market for similar transactions with other third parties at the time of its approval.
On January 8, 2024, the CMF published General Rule 501, which establishes (a) the minimum conditions that must be met by the policy of usual related-party transactions, in order to facilitate the approval of such transactions; and (b) the public disclosure in January and July of each year on all of the related-party transactions carried out in the immediately preceding semester. The rule became effective in September 2024 and the first report was published on January 31, 2025.
On August 8, 2024, the Board of Directors, in view of said new Rule 501, upon recommendation of the board of directors’ committee, approved amendments to (i) the Policy of Usual Related-Party Transactions of LATAM Airlines Group and (ii) the Policy on Control of Related-Party Transactions of LATAM Airlines Group and its subsidiaries (the “Policy”). Any and all negotiations, acts, contracts or operations between LATAM Airlines Group and a LATAM related-party or among 2 or more LATAM related-parties will be subject to the Policy.
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C.Interests of experts and counsel
Not applicable.
ITEM 8 FINANCIAL INFORMATION
A.Consolidated Financial Statements and Other Financial Information
See “Item 18. Financial Statements” and pages F-1 through F-166.
Legal and Arbitration Proceedings

We are involved in routine litigation and other proceedings relating to the ordinary course of business. The following is a description of our material legal and arbitration proceedings as of the date of this filing.
International Cargo Airlines Investigations
In February 2006 the European Commission (“EC”), the Department of Justice of the United States (“DOJ”), the Canadian Competition Bureau (“CCB”), and the Brazilian Administrative Counsel for Economic Defense (“Conselho Administrativo de Defesa Econômica” or “CADE”), among others, initiated a global investigation of a large number of international cargo airlines (among them LAN Cargo) for possible price fixing of cargo fuel surcharges and other fees in the European and United States air cargo markets. As previously announced, LAN Cargo reached plea agreements with the DOJ and the CCB, which included the payment of fines, in relation to such investigation.
On November 9, 2010, the EC imposed fines on 11 air carriers for a total amount of Th€799,400 (equivalent to approximately ThUS$832,708). The fine imposed against LAN Cargo and its parent company, LATAM Airlines Group, totaled Th€8,220 (equivalent to approximately ThUS$8,562). LATAM Airlines Group provisioned ThUS$25,000 during the fourth quarter of 2007 for such fines, and maintained this provision until the fine was imposed in 2010. In 2010, LATAM Airlines Group recorded a ThUS$14,100 gain (pre-tax) from the reversal of a portion of this provision. This was the lowest fine applied by the EC, which includes a significant reduction due to LATAM Airlines Group’s cooperation with the Commission during the course of the investigation. In accordance with European Union law, on January 24, 2011 this administrative decision was appealed by LAN Cargo and LATAM Airlines Group to the General Court in Luxembourg. Any judgment by the General Court may also be appealed to the Court of Justice of the European Union. The European Court of Justice overturned the Commission’s decision on December 16, 2015. On May 20, 2016, the EC confirmed that they had decided not to appeal the case and to issue a new decision with the aim of correcting the faults identified in the judgment by the European Court of Justice.
On March 17, 2017, the EC re-adopted its decision and imposed on LAN Cargo and its parent company, LATAM Airlines Group, a fine in the same amount, Th€8,200, as the original fine. On May 31, 2017 LAN Cargo and LATAM Airlines Group requested the annulment of this EC decision to the General Court of the European Union. In December 2017 LAN Cargo and LATAM Airlines Group presented their arguments for this annulment and in July 2019 LAN CARGO and LATAM participated in a hearing in the Court of Justice of the European Union in which we confirmed our request for annulment of the decision or instead a reduction of the amount of the fine. On March 30, 2022, the European Court issued its ruling and reduced the amount of our fine from ThUS$8,562 (Th€8,220) to ThUS$2,327 (Th€2,240). This ruling was appealed by LAN Cargo, S.A. and LATAM Airlines Group on June 9, 2022. All the other eleven airlines also appealed the ruling affecting them. The European Commission responded to our appeal on September 7, 2022. LAN Cargo, S.A. and LATAM Airlines Group responded to the Commission’s arguments on November 11, 2022. On December 17, 2020, the European Commission submitted proof of claim for the total amount of the fine ThUS$8,562 million or Th€8,220 to the Bankruptcy Court. The amount of this claim has been modified to ThUS$2,327. In January 2023, the European Commission replied to our defense, and on February 13, 2023, LAN Cargo, S.A. and LATAM Airlines Group requested the European Court to hold a hearing. The hearing was held before the European Court on April 10, 2024 and the Company is currently awaiting a final ruling. On September 5, 2024, the Advocate General of the European Court issued a non-binding opinion stating that the European Court should dismiss all the airlines’ appeals and uphold the current fines. The European Court generally follows the Advocate General’s recommendations, so there is a high probability that the final judgment will confirm the same fines—in our case, Th€2,240.
Civil actions have also been initiated against many airlines, including LAN Cargo and LATAM Airlines Group, in various European countries (Great Britain, Norway, Holland and Germany). The two only judicial processes still pending in Norway and the Netherlands are in the evidentiary stages. There has been no activity in the Norway proceeding since January 2014. In the Netherlands proceeding, most of the airlines involved in this case have been forced to withdraw their claim against LATAM Airlines Group and LAN Cargo after their previous claim was annulled in Bankruptcy Court during Chapter 11.
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In this sense, Lufthansa, Lufthansa Cargo, British Airways, Air France, KLM, Martinair and Singapore have withdrawn their claim. The only claim pending against LATAM Airlines Group and LAN CARGO is by Thai Airways. In the case of Norway, only the withdrawal of KLM’s claim has been reported. The amounts are undetermined.
On September 3, 2013, CADE published its decision to impose a fine of ThUS$51,000 against ABSA, after an investigation, commenced in 2008, against several cargo airlines and airlines officers over allegations of anticompetitive practices regarding fuel surcharges in the air cargo business. CADE also imposed fines upon a former Director and two former employees in the amounts of ThUS$1,000 and ThUS$510 respectively. On December 5, 2013 ABSA filed its application for Administrative Reconsideration before CADE. On December 19, 2014, CADE issued a new decision which reduced the fine against ABSA to ThUS$9,132 (R$56,437,825.26) (based on an exchange rate of US$1 = R$6.18). CADE also reduced the fines against ABSA’s Director and employees to US$169,080 and US$83,920, respectively (also based on an exchange rate of US$1 = R$6.18). ABSA has initiated a judicial appeal against the Union Federal seeking an additional reduction of the fine amount. In December 2018, a Federal Court Judge ruled against ABSA, indicating that it will not apply an additional reduction to the fine imposed. The court’s decision was published on March 12, 2019. On March 13, 2019, ABSA filed a motion seeking clarification of the federal court’s decision. On April 1, 2019, a response to the motions for clarification filed by ABSA was presented. On May 24, 2019, the motions for clarification of ABSA were not accepted.
On June 18, 2019, an appeal was filed by ABSA. On August 14, 2019, CADE’s deadline for filing counter arguments was certified. On August 25, 2019, records were sent to the court. On the same date, the records were distributed to Desa Marli Marques Ferreira. On April 27, 2020, a petition was presented by ABSA attaching the renewal of the insurance-judicial policy. On April 19, 2021, a petition was presented by ABSA attaching the renewal of the insurance-judicial policy. On July 19, 2021, CADE filed a statement challenging the policy presented. On August 11, 2021, ABSA filed a petition with evidence of the regular status of the policy presented. On October 26, 2021, a decision was rendered determining the regularization of the policy by ABSA. On October 27, 2021, ABSA filed a petition reiterating the terms of its last petition, demonstrating the regularity of the policy presented. On February 8, 2022, ABSA was summoned to regularize the policy presented, by proving the existence of a reinsurance contract. On February 16, 2022, ABSA presented proof of reinsurance by Ezze Seguros. At the moment, the judgment of ABSA’s appeal is awaited.
Chapter 11 Proceedings

While LATAM emerged from Chapter 11 on November 3, 2022, the Chapter 11 proceedings remained open after the Effective Date, to finalize the settlement of certain claims that were still pending as of such date as well as to resolve certain administrative matters.

On June 29, 2023, the Bankruptcy Court issued a final order ordering the closure of the Chapter 11 proceedings under Case Number 20-11254 (the “Order”), as a result of the resolution of substantially all remaining issues in the Chapter 11 proceedings and all related appeals.

The only pending matters are the ancillary proceedings in the Cayman Islands described below.

On May 26, 2020, LATAM Finance Limited and Peuco Finance Limited submitted separate requests for 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 were accepted on May 27, 2020 by the Grand Court of the Cayman Islands. LATAM Finance Limited and Peuco Finance Limited filed several petitions to suspend the liquidation in 2020, 2021 and 2022, all of which were accepted by the court. On May 23, 2024, the Grand Court of the Cayman Islands approved the withdrawal of the winding up petitions presented by LATAM Finance Limited and Peuco Finance Limited on May 27, 2020, and discharged the appointments of the joint provisional liquidators.
On July 7, 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 May 27, 2020 by the Grand Court of the Cayman Islands. Piquero Leasing Limited filed several petitions to suspend the liquidation in 2020, 2021 and 2022, all of which were accepted by the court. On May 23, 2024, the Grand Court of the Cayman Islands approved the withdrawal of the winding up petition presented by Piquero Leasing Limited on July 8, 2020, and discharged the appointment of the joint provisional liquidators.
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Class Actions
Class Action filed by the National Corporation of Consumers and Users (“CONADECUS”)

On June 25, 2020, the National Corporation of Consumers and Users (“CONADECUS”) filed a class action against LATAM Airlines Group in the 23° Juzgado Civil de Santiago, 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 alleged abusive clauses in consumer contracts, the imposition of fines and compensation for damages in defense of the interest of consumers. On July 4, 2020 we filed a motion to reverse the court’s ruling declaring the admissibility of the action filed by CONADECUS. On July 11, 2020 we requested the Court to comply with the Chilean Insolvency Court’s ruling to suspend the case in connection with the foreign reorganization procedure pursuant to the Chilean Insolvency Act, a request that was accepted by the Court. CONADECUS filed a motion for reconsideration and an appeal against this resolution should the motion for reconsideration be dismissed. The Court dismissed the reconsideration motion on August 3, 2020, but admitted the appeal. On December 22, 2022, LATAM Airlines Group filed a motion requesting the stay of the proceedings to be lifted, given the current state of the reorganization procedure. On December 30, 2022, CONADECUS agreed to LATAM Airlines Group’s request. On January 23, 2023, the Santiago Court of Appeals granted LATAM’s motion and lifted the stay. On November 24, 2023, the Court dismissed LATAM’s motion for reversal against the ruling that declared the action filed by CONADECUS admissible. On December 4, 2023, LATAM filed a statement of defense. The settlement hearing took place on March 27, 2024, but the parties did not reach an agreement. On May 14, 2024 the Court determined the facts to be proven, and dismissed the motion of reconsideration on June 18, 2024, thereby opening the discovery stage. The amount at the moment is undetermined.

Parallel to the lawsuit in Chile, on August 31, 2020, CONADECUS filed on appeal with the U.S. Bankruptcy Court because of the automatic suspension imposed by Section 362 of the U.S. Bankruptcy Code that, among other things, prohibits the parties from filing or continuing with claims that involve a preliminary petition against the Debtors. CONADECUS filed a petition to (i) stay the automatic suspension to the extent necessary to continue with the class action against LATAM Airlines Group in Chile, and (ii) request a joint hearing by the Bankruptcy Court in the U.S. and the Chilean Insolvency Court to hear the matters relating to the claims of CONADECUS in Chile. On September 16, 2020, the Debtors filed their objection against CONADECUS’ appeal and the Official Unsecured Creditors Committee presented a statement in support of the Debtors’ position. On December 18, 2020, the Bankruptcy Court partially granted CONADECUS’s request, only for purposes of allowing them to continue with their appeal and so that the Court of Appeals determine whether or not the suspension is appropriate under the Chilean Insolvency Act. On February 9, 2021, the Bankruptcy Court entered an order to lift the automatic stay to permit the continuation of CONADECUS’ appeal in Chile against the judicial approval of a class action settlement with the Chilean Association of Consumers and Users (“AGRECU”).

Class Action filed by the National Corporation of Consumers and Users (“CONADECUS”)

On September 21, 2023, LATAM Airlines Group was notified of a class action lawsuit filed by CONADECUS in a Chilean Court (23° Juzgado Civil de Santiago), for alleged breaches of the Law on Protection of Consumer Rights because of the cancellation of tickets for international flights purchased through travel agencies. CONADECUS petitioned for fines and damages in defense of the class and/or diffuse interest of consumers. On September 30, 2023, LATAM Airlines Group filed a motion for reversal against the ruling that declared the action filed by CONADECUS admissible, which was dismissed by the Court on November 11, 2023. On November 18, 2023, LATAM filed a statement of defense. On August 6, 2024, LATAM requested the Court to declare the abandonment of the procedure on account of the plaintiff’s lack of activity. The amount at the moment is undetermined.

Class Action filed by the National Corporation of Consumers and Users (“CONADECUS”)

On September 17, 2024, LATAM Airlines Group was notified of a class action lawsuit filed by CONADECUS in a Chilean Court (15° Juzgado Civil de Santiago), for alleged breaches of the Law on Protection of Consumer Rights because of the cancelation of flights occurred due to the CrowdStrike outage. CONADECUS petitioned for fines and damages in defense of the collective and/or diffuse interest of consumers. On September 27, 2024, LATAM Airlines Group filed a motion for reversal against the ruling that declared the action filed by CONADECUS admissible, which was dismissed by the Court on November 20, 2024. On December 9, 2024, LATAM filed a statement of defense. The amount at the moment is undetermined.


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Legal proceedings with the Antitrust Court in Chile (“TDLC”)

A preliminary injunction 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 injunction was initially rejected. However, said resolution was overturned by the TDLC on June 8, 2023, and instead ordered a partial injunction 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. On July 27, 2023, the TDLC issued a ruling favorable to LATAM, reversing the injunction.

On August 11, 2023, the Civil Aviation Administration (“JAC”) filed a petition for clarification with the TDLC regarding certain capacity and other transitory restrictions applicable to the Santiago-Lima under the Eighth Condition. The petition seeks to impose a temporary 5-year limitation on 23 frequencies assigned by the JAC to LATAM after the decision 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 the Eighth Condition. 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 the appeal admissible on October 2, 2023, and LATAM filed a motion for reconsideration against that decision on October 7, 2023. The TDLC accepted LATAM’s motion for reconsideration on October 17, 2023, 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 overturned and petitioned that its appeal be declared admissible. 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 with a summary of its decision on this matter. 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 documentation before the same Court. The Supreme Court unanimously dismissed the appeal against judgment by the JAC. There are no appeals pending in this case. The amount at the moment is undetermined.

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 been 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 Chilean 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 20, 2023 CONADECUS requested to become part of this process and requested the same injunction previously rejected twice by the TDLC. On October 23, 2023 LATAM submitted a brief to the TDLC requesting the rejection of said injunction 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 October 30, 2023, LATAM filed a brief requesting the dismissal of JetSmart’s new request for injunction. 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. During the months of January and February 2024, the FNE, the JAC, the SERNAC, Sky Airline and CONADECUS also provided background information. On February 13, 2024, the JAC submitted a request for clarification to the TDLC, asking if it could call for bids regarding international air frequencies on the Santiago-Lima route, the validity of which expires in 2024. On February 15, 2024, LATAM submitted a document stating that there was no matter to be clarified and that the request should be rejected. On February 15, 2024, the TDLC ruled against the JAC’s request, since there were no aspects to be clarified. On April 25, 2024, a tender was held for two Santiago-Lima frequencies, both of which were awarded to JetSmart. LATAM submitted the minutes of said tender to the TDLC.
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On June 19, 2024, LATAM submitted an economic report and observations to the report submitted by JetSmart. On July 19, 2024, the JAC, JetSmart, LATAM and Sky presented additional background information. On July 31, 2024, the public hearing was held at the TDLC, with the participation of the JAC, the FNE, JetSmart, CONADECUS and LATAM. On December 18, 2024, the TDLC requested the FNE to report on the current status of investigation No. 2755-24 discussed in its contribution of background information and for the JAC to report on the status of the citizen consultation related to the modification of the frequency allocation regulations. On December 24, 2024, the FNE and the JAC presented their responses. On January 10, 2025, the TDLC rejected JetSmart’s request for a non-contentious process of September 26, 2023, declaring that the bidding rules do not generate significant risks that may violate the provisions of Decree Law No. 211. On January 24, 2025, JetSmart filed an appeal against the TDLC ruling, which will be reviewed by the Supreme Court. The amount at the moment is undetermined.

Legal proceedings involving LATAM Airlines Peru

On January 26, 2023, LATAM Airlines Peru filed an appeal against the determination and fine resolutions issued by SUNAT for indirect disposal of income during the fiscal year 2015, for an aggregate amount of ThUS$185,987. Through Resolution of the National Taxpayer Intendency (Intendencia de Principales Contribuyentes Nacionales) N°. 4070340000928 dated December 19, 2023, SUNAT granted the appeal filed by the Company and, consequently, the previous resolutions were declared void. Subsequently, on September 4, 2024, through the notification of the Complementary Result of Requirement No. 0122220002363, SUNAT overturned the objection regarding the major maintenance expense of approximately ThUS$63,000 However, it upheld the remaining objections. Consequently, on September 26, 2024, SUNAT issued new determination and fine resolutions of ThUS$122,953. On October 23, 2024, the Company submitted a claim against these resolutions. However, on December 31, 2024, through Resolution No. 4070140001797 issued by the National Taxpayer Intendency, SUNAT declared the claim filed by the Company to be unfounded. As a result, on January 22, 2025, LATAM Airlines Peru filed an appeal against this resolution, which is currently pending resolution before the Tax Court.

Legal proceedings involving LATAM Airlines Brazil

TAM Linhas Aéreas S.A. is party to one action filed by relatives of victims of an accident that occurred in October 1996 involving one of its Fokker 100 aircraft, in addition to 22 actions filed by residents of the region where the accident occurred, who claimed pain and suffering, and a class action related to this accident. All suits have now been concluded except one suit brought by the association of residents of a local street in respect of which TAM has been found liable by the second instance court of São Paulo for damages to be assessed, subject to an appeal to the Superior Court. Most residents of the relevant street appear to have already been compensated through individual claims, which have been satisfied and thus should not be entitled to further compensation. No steps have been taken by any residents to try to obtain further compensation through the decision in favor of the residents’ association. Any further damages resulting from the aforementioned legal claim are covered by the civil liability guarantee provided for in TAM’s insurance policy with Itaú Unibanco Seguros S.A. (now Chubb Seguros).

In relation to the July 17, 2007 accident of Airbus A320 aircraft (PR-MBK) of TAM Linhas Aéreas S.A. (TAM), over the last 18 years together with insurers/reinsurers reached settlements directly with the victims’ families, third parties and ex-employees. Almost all claims and suits have now been concluded and there are two ongoing litigation against TAM, relating to three fatal victims and a third-party. The administrative action regarding the extent of the primary insurance coverage payable regarding victims on board the aircraft remains on appeal by TAM and the other defendants to the Superior Court in Brasília. No steps have been taken by any party to attempt preliminary execution of the second instance court decision and there should be sufficient grounds to defend any such action based on the releases signed by all claimants upon receiving final compensation. The insurance coverage with Itaú Unibanco Seguros S.A. (now Chubb Seguros) adequately covers all liabilities arising out of the accident, and therefore LATAM Airlines Brazil does not expect to incur in any additional expenses.

Lawsuits against the companies Voepass and LATAM Airlines Brasil for alleged liability in civil proceedings, presented by Luana dos Santos Bezerra Bounhe and others; Aracy Ribeiro Moreira and others; Naira Maria da Silva Gusson do Nascimento; Laura dos Reis Camilo and another; and Silvia Nicole Dantas Costa Maia and others; and a lawsuit against the same companies for alleged labor liability filed by Marcus Vinicius Ávila Santanna and others. In the litigation with Luana dos Santos Bezerra Bounhe and others (Role 1002928-30.2024.8.26.0659), on December 19, 2024, the parties submitted a request for approval of the agreement concluded extrajudicially. The remaining 5 cases remain active.

These litigations are under insurance coverage.
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Tax related proceedings

In July, 2011, the Brazilian National Institute of Social Security (“INSS”) issued a tax assessment notice requesting LATAM to pay certain charging amounts as a result of TAM Linhas Aereas’ lack of payment of the Airline Workers Fund, a tax charged monthly at the rate of 2.5% of an airline’s total payroll, between 2004 and 2012. TAM Linhas Aereas and other plaintiffs filed an ordinary claim with a request for injunctive relief against the INSS decision. The company made cash deposits (as of December 31, 2024 the deposit amount is ThUS$87,082 (R$538,168,490.91) to the Court of total amounts required to guarantee the debts allegedly owed. The administrative proceedings have been suspended until the conclusion of the judicial claim, which is still pending an appeal filed by the Company against an unfavorable first instance decision. The approximate adjusted value of amounts potentially due in such proceeding as of December 31, 2012 was ThUS$43,300. In the opinion of our legal advisors, the possibility for the court to rule against TAM Linhas Aereas is high.

Since 1993, TAM Linhas Aereas S.A. is a plaintiff in a judicial claim against the Brazilian government seeking indemnity for damages arising out of the termination of an air transportation concession agreement that resulted in the freezing of TAM’s prices from 1988 to September 1993 in order to maintain operations with the prices set by the Brazilian government during that period. The process is currently being heard before the Federal Regional Court and judgment is pending an appeal by TAM. The amount of potential recovery is indeterminate at this time. The original amount is estimated at ThUS$44,100 (R$246,086,745.00). This sum is subject to delinquent interest since September 1993 and inflation adjustment since November 1994. Based on the opinion of TAM’s legal advisors, and recent rulings issued by the Brazilian Supreme Court of Justice in favor of airlines in similar cases (specifically, actions filed by Transbrasil and Varig), we believe that TAM’s likelihood of success is high, even if the court of second instance issued decision denying the claim. The process is currently being heard before the Federal Regional Court awaiting the processing of TAM’s appeal to STJ and STF. We have not recognized these credits in our financial statements and will only do so if and when a positive decision is rendered final by the Court.

TAM Linhas Aereas S.A. filed an ordinary claim, with a request for early judgment, to discuss the legality of charging the Adicional das Tarifas Aeroportuárias (“Additional Airport Tariffs,” or “ATAERO”), which are charged at a rate of 50% on the value of tariffs and airport tariffs. A decision by the superior court is pending. The amount of potential recovery is indeterminate at this time. The company filed appeals (STJ and STF). The appeal to the superior court (STJ) was denied and the Company filed another appeal (called Agravo Interno).

(1) On October 29, 2018, the Brazilian Federal Revenue Service issued a tax assessment notice against TAM Linhas Aereas S.A. in the amount of ThUS$104,846 (R$647,952,057.06), due to alleged irregularities of the Company on social security contribution related to work accidents (“GILRAT,” former “SAT”) from November 2013 until December 2017. TAM Linhas Aereas S.A. presented its defense, which was denied on February 7, 2019 and TAM Linhas Areas has filed an appeal. (2) On December 30, 2022, the Brazilian Federal Revenue Service issued a tax assessment notice against TAM Linhas Aereas S.A. in the amount of ThUS$14,930 (R$ 92,272,552.89), due to alleged irregularities of the Company on social security contribution related to GILRAT between January and December, 2018. The administrative defense filed by TAM Linhas Aereas S.A. was denied and, thus, the Company filed an appeal. On December 4, 2024, one of the judges requested to review the case. The Company is awaiting a new trial.

The proceedings are now pending a decision on the appeal filed before the second level Court (the “CARF”).

(1) On December 12, 2019, the Brazilian Federal Revenue Service Brazilian issued a tax assessment on the amount of ThUS$36,334 (R$224,544,472.99) related to certain tax credits on about “PIS COFINS” (Federal Social Contributions Levied on Gross Revenue) during 2014. The company filed its defense, which was denied in September 2020. In September 2024, one of the judges requested to review the case. The Company is awaiting a new decision.

(2) On February 7, 2024, the Brazilian Federal Revenue Service issued a tax assessment against TAM Linhas Aéreas on the amount of ThUS$44,638 (R$275,864,333.29) related to certain tax credits on about “PIS COFINS” (Federal Social Contributions Levied on Gross Revenue) during the period of 2019/2020. The administrative defense presented by the company was partially favorably decided. Awaiting a decision on the appeal filed by the company.

On February 26, 2016, SNEA (Sindicato Nacional das Empresas Aéreas) on behalf of their members: Tam Linhas Aereas S/A, Absa Aerolinhas Brasileiras S/A, Gol Linhas Aéreas S/A and Azul Linhas Aéreas Brasileiras S/A filed an ordinary claim in the Federal Court of the Federal District to discuss the 72% increase in the values of TAT-ADR (Aerodrome Control Fee) and TAT-APP (Approach Control Fee) imposed by the Department of Airspace Control (“DECEA”).
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Regarding this increase in tariffs, the companies (Tam Linhas Aéreas S/A and Absa Aerolinhas Brasileiras S/A) are currently making judicial deposits monthly and tried to replace these deposited amounts with guarantee insurances. On October 13, 2017, the Federal District Court of first instance ruled against SNEA’s claim maintaining the legality of the 72% increase in the values of the fees. On January 30, 2024, SNEA obtained a favorable court decision from the 2nd Instance (TRF1), regarding its appeal. Tam Linhas Aereas S.A had a favorable decision to recover 100% of the amounts deposited with the presentation of a guarantee (insurance guarantee). In December 2024, the company withdrew the amounts deposited ThUS$60,412 (R$373,348,964.16).

On March 28, 2007, TAM Linhas Aereas S.A. filed a lawsuit (writ of mandamus) seeking to review the incidence of the Social Security Contribution taxed on 1/3 of vacations, maternity payments and medical leave for accident and vacation involving amounts of ThUS$60,891 (R$376,308,953.87). On February 2, 2008 the court rendered a decision against the company, so it filed an appeal. The Appellate Court issued a decision partially in favor of the company. An extraordinary remedial measure was filed, requesting to stay the effects of the decision until the Court’s decision was issued. The matter was partially decided in the Supreme Court’s decision of June 2024 (STF) on the “leading case” of another company. After analyzing the decision by the Federal Supreme Court, LATAM Airlines Brazil confirmed that payments are owed for one-third of the vacation time from September 2020 to May 2024. The company made cash deposits on July 11, 2024 in the amount of ThUSS5,465 (R$33,774,052.14). The company is reviewing the amounts that could be recovered as a result of the Supreme Court’s decision (maternity payments, medical leave for accident and vacation).

On February 7, 2024, the Brazilian Federal Revenue Service issued a tax assessment against TAM Linhas Aéreas on the amount of ThUS$20,653 (R$127,635,708.97) which requires the Corporate Income Tax (IRPJ) and the Social Contribution on Net Profit (CSL related to the amortization of goodwill that TLA (Tam Linhas Aéreas) made in 2019/2020 with the incorporation of Multiplus. An administrative defense was filed by the Company.

For additional relevant legal proceedings relating to the ordinary course of the business, please see Note 30 (Contingencies) in our audited consolidated financial statements.
Dividend Policy
In accordance with the Chilean Corporate Law, LATAM must distribute cash dividends equal to at least 30% of its annual consolidated net profits calculated in accordance with IFRS Accounting Standards, provided no financial losses are carried over and subject to limited exceptions. If there is no net income in a given year, LATAM can elect but is not legally obligated to distribute dividends out of retained earnings. The board of directors may declare interim dividends out of profits earned during such interim period to the extent the economic situation of the Company allows for such distribution. Pursuant to LATAM’s by-laws, the annual cash dividend is approved by the shareholders at the annual ordinary shareholders’ meeting held during the first four months of the following year during which the dividend is proposed. All outstanding common shares are entitled to share equally in all dividends declared by LATAM, except for the shares that have not been fully paid by the shareholder after being subscribed.

We declare cash dividends in U.S. dollars, but make dividend payments in Chilean pesos, converted from U.S. dollars at the observed exchange rate five business days prior to the day we first make payment to shareholders. Holders of ADSs will be entitled to receive dividends on the underlying common shares to the same extent as holders of common shares. Holders of ADRs on the applicable record dates will be entitled to receive dividends paid on the common shares represented by the ADSs evidenced by such ADRs. Dividends payable to holders of ADSs will be paid by us to the depositary in Chilean pesos and remitted by the depositary to such holders net of foreign currency conversion fees and expenses of the depositary and will be subject to Chilean withholding tax currently imposed at a rate of 35% (subject to credits in certain cases as described under “Item 10. Additional Information—Taxation-Cash Dividends and Other Distributions”). The amount of U.S. dollars distributed to holders of ADSs may be adversely affected by a devaluation of the Chilean currency that may occur before such dividends are converted and remitted. Owners of the ADSs will not be charged any dividend remittance fee by the depositary with respect to cash dividends.

Chilean law requires that holders of shares of Chilean companies that are not residents of Chile register as foreign investors under one of the foreign investment regimes established by Chilean law in order to have dividends, sale proceeds or other amounts with respect to their shares remitted outside Chile through the Formal Exchange Market (Mercado Cambiario Formal).

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The table below sets forth the cash dividends per common share and per ADS paid by LATAM, as well as the number of common shares entitled to such dividends, for the years indicated. Dividends per common share amounts reflect common share amounts outstanding immediately prior to the distribution of such dividend.
Dividend for year: Payment
Date(s)		 Total dividend payment Number of common shares
entitled to dividend		 Cash dividend per common
share		 Cash dividend per ADS
(in millions of U.S. dollars) (in millions) (U.S. dollars) (U.S. dollars)
2021 n.a. $ 0.0  606.41 $ 0.0  $ 0.0 
2022 n.a. $ 0.0  604,437.88 $ 0.0  $ 0.0 
2023 05/16/2024 $ 174,549.4  604,437.88 $ 0.00029  $ 0.00029 
B.Significant Changes
Except as otherwise disclosed in our audited consolidated financial statements and in this annual report, there have been no significant changes in our business, financial conditions or results of operations since December 31, 2024.
ITEM 9 THE OFFER AND LISTING
A.Offer and Listing Details

The principal trading market for our common shares is the Santiago Stock Exchange (“SSE”). The common shares have been listed on the SSE under the symbol “LAN” since 1989. On July 25, 2024, the Company’s ADSs were relisted on the NYSE, following its delisting in June 2020 after entering into the Chapter 11 Restructuring. The relisting occurred following the pricing of a public secondary offering by certain of the LATAM’s shareholders to sell 19,000,000 ADSs at a price of U.S.$24.00 per ADS (the “re-IPO”). The ADSs trade on the NYSE under the ticker symbol “LTM”. On August 28, 2024, 1,773,026 additional ADSs were sold by the Company’s shareholders pursuant to the underwriters’ overallotment option. The Company did not receive any proceeds from the sale of ADSs by the selling shareholders. As of the date of this annual report, the ADSs are traded on the NYSE, and our ADR program, with JP Morgan Chase Bank, N.A. as depositary, was approved for relisting and registration on the NYSE as of July 24, 2024.

In August 2022, LATAM filed a registration statement on Form F-1 for the proposed resale of its common shares in the form of ADSs pursuant to the Registration Rights Agreement entered into by and among LATAM, the Backstop Creditors and the Backstop Shareholders. On August 30, 2023, LATAM filed a request for withdrawal of the registration statement. On July 18, 2024, LATAM filed a new registration statement on Form F-3 for the proposed resale of its common shares in the form of ADSs. Further, on July 24, 2024, LATAM filed a prospectus supplement offering a total of 19,000,000 ADSs, each representing the right to receive 2,000 common shares. As of the date of the prospectus supplement, the last reported sale price of LATAM’s common shares on the Santiago Stock Exchange (“SSE”) was Ch$12.81 per common share, which is equivalent to US$27.06 per ADS, based on an exchange rate of Ch$946.69 to US$1.00.

As of December 31, 2024, the Company’s statutory capital is represented by 604,441,789,335 shares, all issued, ordinary and without nominal value. The Company’s statutory capital is the sum of US$5,003,576,326.78, divided into such 604,441,789,335 shares, of the same series, with no par value, of which: (i) US$5,003,533,928.78 represented by 604,437,877,587 shares, are fully subscribed and paid, including common shares represented by ADSs; and (ii) US$42,398.00, represented by 3,911,748 shares, to be subscribed and paid in full and exclusively for the conversion of 42,398 Series H Convertible Bonds (ex class B).

On September 23, 2024, we became aware that the Colombian Stock Exchange (“BVC”), directly and without the participation of LATAM, registered the stock of LATAM Airlines Group S.A. (BCS: LTM) in the foreign securities quotation system called MGC Colombian Global Market, in accordance with the authorization granted by Resolution 1408 of 2024 issued by the Financial Superintendence of Colombia. Although Colombian investors will be able to invest in these shares through the MGC Colombian Global Market starting September 23, 2024, the registration of the shares in the MGC Colombian Global Market does not imply that LATAM Airlines Group S.A. acquires the status of a securities issuer in the Colombian securities market and, therefore, does not generate any obligations for LATAM, especially legal or financial obligations.
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B.Plan of Distribution
Not applicable.
C.Markets
Trading
Chile
The Chilean stock market, which is regulated by the CMF under Law 18,045 of October 22, 1981, as amended, which we refer to as the “Securities Market Act,” is one of the most developed among emerging markets, reflecting the particular economic history and development of Chile. The Chilean government’s policy of privatizing state-owned companies, implemented during the 1980s, led to an expansion of private ownership of shares, resulting in an increase in the importance of stock markets. Privatization extended to the social security system, which was converted into a privately managed pension fund system. These pension funds have been allowed, subject to certain limitations, to invest in stocks and are currently major investors in the stock market. Some market participants, including pension fund administrators, are highly regulated with respect to investment and remuneration criteria, but the general market is less regulated than the U.S. market with respect to disclosure requirements and information usage.
Equities, closed-end funds, fixed-income securities, short-term and money market securities, gold and U.S. dollars are traded on the SSE. In 1991, the SSE initiated a futures market with two instruments: U.S. dollar futures and Selective Shares Price Index, or IPSA, futures. Securities are traded primarily through an open voice auction system; a firm offers system or daily auctions. Trading through the open voice system occurs on each business day from 9:30 a.m. to 4:00 p.m. The SSE has an electronic system of trade, called Telepregón HT, which operates continuously for stocks trading in high volumes from 9:30 a.m. to 4:00 p.m. The Chilean Electronic Stock Exchange operates continuously from 9:30 a.m. to 4:00 p.m. each business day. In February 2000, the SSE Off-Shore Market began operations. In the Off-Shore Market, publicly offered foreign securities are traded and quoted in U.S. dollars.
D.Selling Shareholders
Not applicable.
E.Dilution
Not applicable.
F.Expenses of the Issue
Not applicable.
ITEM 10 ADDITIONAL INFORMATION
This Item reflects legal amendments affected by Chilean Law No. 20,382 on Corporate Governance, which was enacted on October 13, 2009, and came into effect on October 20, 2009, and Chilean Law No. 20,552, which modernized and encouraged competition in the financial system, which was enacted on November 6, 2011 and came into effect on December 17, 2011.
A.Share Capital
Not applicable.
B.Memorandum and Articles of Association
Set forth below is information concerning our share capital and a brief summary of certain significant provisions of our by-laws and Chilean law. This description contains all material information concerning the common shares but does not purport to be complete and is qualified in its entirety by reference to our by-laws, the Chilean Corporate Law and the Securities Market Law, each referred to below.
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For additional information regarding the common shares, reference is made to our by-laws, a copy of which is included as Exhibit 1.1 to this annual report on Form 20-F.
Organization and Register
LATAM Airlines Group is a publicly held stock corporation (Sociedad Anónima Abierta) incorporated under the laws of Chile. LATAM Airlines Group was incorporated by a public deed dated December 30, 1983, an abstract of which was published in the Chilean Official Gazette (Diario Oficial de la República de Chile) No. 31,759 on December 31, 1983, and registered on page 20,341, No. 11,248 of the Santiago, Chile, Commerce Registry (Registro de Comercio de Santiago, Chile) for the year 1983. Our corporate purpose, as stated in our by-laws, is to provide a broad range of transportation and related services, as more fully set forth in Article Four thereof.
General
Shareholders’ rights in a Chilean corporation are generally governed by the company’s by-laws and the Chilean Corporate Law. Article 22 of the Chilean Corporation Act states that the purchaser of shares of a corporation implicitly accepts its by-laws and any prior agreements adopted at shareholders’ meetings. Additionally, the Chilean Corporate Law regulates the government and operation of corporations (“sociedades anónimas,” or S.A.) and provides for certain shareholder rights. Article 137 of the Chilean Corporation Act provides that the provisions of the Chilean Corporation Act take precedence over any contrary provision in a corporation’s by-laws. The Chilean Corporate Law and our by-laws also provide that all disputes arising among shareholders in their capacity as such or between us or our administrators and the shareholders may either be submitted to arbitration in Chile or to the courts of Chile at the election of the plaintiff initiating the action. Despite the foregoing, it is forbidden for certain individuals (directors, senior managers, administrators and main executives of the corporation, and any shareholder that directly or indirectly holds shares whose book or market value exceed 5,000 UF at the moment of filing of the action) from submitting such action before the ordinary courts, thus obligating them to proceed with arbitration in all situations. Finally, Decree-Law No. 3,500 on Pension Fund Administrators, which allows pension funds to invest in the stock of qualified corporations, indirectly affects corporate governance and prescribes certain rights of shareholders. The Chilean Corporation Act sets forth the rules and requirements under which a corporation is deemed to be “publicly held.” Article 2 of the Chilean Corporation Act defines publicly held corporations as corporations that register their shares with the Registro de Valores (Securities Registry) of the CMF. Article 2 also indicates that corporations must register their shares with the Securities Registry in the event that they have had more than 2,000 shareholders (or such higher number established by the CMF through a general rule, provided that such number does not compromise public faith, taking into account the type of shareholder, nature of the company or similar circumstances) registered in the shareholders registry for twelve consecutive months.
The framework of the Chilean securities market is regulated by the CMF under the Securities Market Act and the Chilean Corporate Law, which imposes certain disclosure requirements, restricts insider trading, prohibits price manipulation and protects minority investors. In particular, the Securities Market Act establishes requirements for public offerings, stock exchanges and brokers and outlines disclosure requirements for corporations that issue publicly offered securities.
Ownership Restrictions
Under Articles 12 and 20 of the Securities Market Act and General Rule 269 issued by the CMF in 2009, certain information regarding transactions in shares of publicly held corporations must be reported to the CMF and the Chilean stock exchanges on which the shares are listed. Since the ADRs are deemed to represent the shares underlying the ADSs, transactions in ADRs will be subject to those reporting requirements. Among other matters, the beneficial owners of ADSs that directly or indirectly hold 10% or more of the subscribed capital of LATAM Airlines Group, or that reach or exceed such percentage through an acquisition, are required to report to the CMF and the Chilean stock exchanges, the day following the event:
1.any acquisition or disposition of shares; and
2.any acquisition or disposition of contracts or securities, which price or performance depends on the price variation of the LATAM Airlines Group’s shares.
These obligations are extended (i) to certain individuals (immediate family, next of kin and others) if the ADS holder is a natural person; (ii) to any entity controlled by the holder, if the ADS is a legal entity; and (iii) to groups, if a holder has any joint action agreement with other holders and the group reaches or exceeds the cited threshold.
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In addition, majority shareholders must state in their report whether their purpose is to acquire control of the company or if they are making a financial investment.
Under Article 54 of the Securities Market Act and under CMF regulations, persons or entities that intend to acquire control, whether directly or indirectly, of a publicly held corporation, must follow certain notice requirements, regardless of the acquisition vehicle or procedure or whether the acquisition will be made through direct subscriptions or private transactions. In the first place, the potential acquirer must send a written communication to the target corporation, any companies controlling or controlled by the target corporation, the CMF and the Chilean stock exchanges on which the target’s securities are listed, stating, among other things, the person or entity purchasing or selling and the price and material conditions of any negotiations. Subsequently, the potential acquirer must also inform the public of its planned acquisition by means of a publication in two Chilean newspapers with national distribution and by uploading such notice to the acquirer’s website, if available. Both requirements shall be met at least ten business days prior to the date on which the acquisition transaction is to close, and in any event, as soon as negotiations regarding the change of control have been formalized or when confidential information or documents concerning the target are delivered to the potential acquirer. The notices must state, among other things, the person or entity purchasing or selling and the price and conditions of any negotiations.
In addition to the foregoing, Article 54A of the Securities Market Act requires that within two business days of the completion of the transactions pursuant to which a person has acquired control of a publicly traded company, a notice shall be published in the same newspapers in which the notice referred to above was published and notices shall be sent to the same persons mentioned in the preceding paragraphs.
Consequently, a beneficial owner of ADSs intending to acquire control of LATAM Airlines Group will be subject to the foregoing reporting requirements.
The provisions of the aforementioned articles do not apply whenever the acquisition is being made through a tender or exchange offer.
Title XXV of the Securities Market Act on tender offers and CMF regulations provide that certain transactions entailing the acquisition on control of a publicly held corporation must be carried out through a tender offer. In addition, Article 199 bis of the Chilean Securities Market Act extends the obligation to make a tender offer for the remaining outstanding shares to any person, or group of persons with a joint action agreement, that, as a consequence of the acquisition of shares, becomes the owner of two-thirds or more of the issued shares with voting rights of a publicly held corporation. Such tender offer must be effected within 30 days from the date of such acquisition.
Article 200 of the Securities Market Act prohibits any shareholder that has taken control of a publicly traded company from acquiring, for a period of 12 months from the date of the transaction that granted it control of the publicly traded company, a number of shares equal to or higher than 3.0% of the outstanding issued shares of the target without making a tender offer at a price per share not lower than the price paid at the time of taking control. Should the acquisition from the other shareholders of the company be made on the floor of a stock exchange and on a pro rata basis, the controlling shareholder may purchase a higher percentage of shares, if so permitted by the regulations of the stock exchange.
Title XV of the Securities Market Act sets forth the basis for determining what constitutes a controlling power, a direct holding and a related party.
Capitalization
Under Chilean law, the shareholders of a corporation, acting at an extraordinary shareholders’ meeting, have the power to authorize an increase in the corporation’s share capital. When an investor subscribes issued shares, the shares are registered in that investor’s name even without payment, and the investor is treated as a shareholder for all purposes except with regard to receipt of dividends and returns of capital, provided that the shareholders may, by amending the by-laws, also grant the right to receive dividends or distributions of capital despite not having paid for the subscribed shares. The investor becomes eligible to receive dividends once it has paid for the shares, or, if it has paid for only a portion of such shares, it is entitled to receive a corresponding pro rata portion of the dividends declared with respect to such shares, unless the company’s by-laws provide otherwise. If an investor does not pay for shares for which it has subscribed on or prior to the date agreed upon for payment, the company is entitled under Chilean law to auction the shares on the appropriate stock exchange, and it has a cause of action against the investor to recover the difference between the subscription price and the price received for the sale of those shares at auction. However, until such shares are sold at auction, the investor continues to exercise all the rights of a shareholder (except the right to receive dividends and returns of capital, as noted above).
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Regarding shares issued but not paid for within the period determined by the extraordinary shareholders’ meeting for their payment (which period cannot exceed three years from the date of such shareholders’ meeting), until January 1, 2010 they were cancelled and no longer available for subscription and payment. As of January 1, 2010, the board of directors of LATAM Airlines Group has a legal obligation to initiate the necessary legal actions to collect the unpaid amounts, unless the shareholders’ meeting which authorized the capital increase allowed the board to abstain from taking such action by a vote of two thirds of the issued shares, in which case the former rule still applies. Once the foregoing legal actions are exhausted, the board of directors shall propose to the shareholders’ meeting the appropriate capital adjustment measures, to be decided by simple majority. Fully paid shares are not subject to further calls or assessments or to liabilities of LATAM Airlines Group.

As of December 31, 2024, the Company’s statutory capital is represented by 604,441,789,335 ordinary shares without nominal value. As of the same date, LATAM had a total of 604,437,877,587 shares subscribed and paid; and the balance, corresponding to 3,911,748 shares underlying convertible bonds issued (still unconverted as of such date) as part of LATAM’s capital increase approved in July 5, 2022, is pending subscription and payment.
Chilean law recognizes the right of corporations to issue shares of common and preferred stock. To date, we have issued and are authorized by our shareholders to issue only shares of common stock. Each share of common stock is entitled to one vote.
Preemptive Rights and Increases in Share Capital
Chilean Corporate Law requires Chilean corporations to offer existing shareholders the right to subscribe a sufficient number of shares to maintain their existing percentage of ownership in a company whenever that corporation issues new shares for cash, except for up to 10% of the subscribed shares arising from the capital increase which may be designated to employee compensation pursuant to article 24 of the Chilean Corporation Act. Under this requirement, any preemptive rights will be offered by us to the depositary as the registered owner of the common shares underlying the ADSs, but holders of ADSs and shareholders located in the United States will not be allowed to exercise preemptive rights with respect to new issuances of shares by us unless a registration statement under the Securities Market Act is effective with respect to those common shares or an exemption from the registration requirements thereunder is available.
On September 13, 2022, we commenced preemptive rights offerings in Chile for New Convertible Notes and ERO New Common Stock (each as defined in the Plan), which offerings concluded on October 12, 2022. In the case of potential subsequent preemptive rights, we intend to evaluate the costs and potential liabilities associated with the preparation and filing of a registration statement with the SEC, as well as the indirect benefits of enabling the exercise by the holders of ADSs and shareholders located in the United States of preemptive rights.
When preemptive rights are not made available to ADS holders, the depositary may sell those holders’ preemptive rights and distribute the proceeds thereof if a secondary market for such rights exists and a premium can be recognized over the cost of such sale. In the event that the depositary does not sell such rights at a premium over the cost of any such sale, all or certain holders of ADRs may receive no value for the preemptive rights. Amounts received in exchange for the sale or assignment of preemptive rights relating to shares of our common stock will be taxable in Chile and in the United States. See “Item 10. Additional Information—E. Taxation-Chilean Tax—Capital Gains.” If the rights cannot be sold, they will expire and a holder of our ADSs will not realize any value from the grant of the preemptive rights. In either case, the equity interest of a holder of our ADSs in us will be diluted proportionately. Thus, the inability of holders of ADSs to exercise preemptive rights in respect of common shares underlying their ADSs could result in a change in their percentage ownership of common shares following a preemptive rights offering.
Under Chilean law, preemptive rights are freely exercisable, transferable or waived by shareholders during a 30-day period commencing upon publication of the official notice announcing the start of the preemptive rights period in the newspaper designated by the shareholders’ meeting. The preemptive right of the shareholders is the pro rata amount of the shares registered in their name in the shareholders’ registry of LATAM Airlines Group as of the fifth business day prior to the date of publication of the notice announcing the start of the preemptive rights period. During such 30-day period (except for shares as to which preemptive rights have been waived), Chilean companies are not permitted to offer any newly issued common shares for sale to third parties. For that 30-day period and an additional 30-day period, Chilean publicly held corporations are not permitted to offer any unsubscribed common shares for sale to third parties on terms that are more favorable to the purchaser than those offered to shareholders. At the end of such additional 30-day period, Chilean publicly held corporations are authorized to sell non-subscribed shares to third parties on any terms, provided they are sold on a Chilean stock exchange.
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Directors
Our by-laws provide for a board of nine directors. Compensation to be paid to directors must be approved by vote at the annual shareholders’ meeting. We hold elections for all positions on the board of directors every two years. Under our by-laws, directors are elected by cumulative voting. Each shareholder has one vote per share and may cast all of his/her votes in favor of one nominee or may apportion his/her votes among any number of nominees. These voting provisions currently ensure that a shareholder owning more than 10% of our outstanding shares is able to elect at least one representative to our board of directors.
Under the Chilean Corporate Law, transactions of a publicly-held corporation with a “related” party must be conducted on an arm’s-length basis and must satisfy certain approval and disclosure requirements which are different from the ones that apply to a privately-held company. The conditions apply to the publicly-held corporation and to all of its subsidiaries.
These transactions include any negotiation, act, contract or operation in which the publicly-held corporation intervenes together with either (i) parties which are legally deemed related pursuant to article 100 of the Chilean Securities Market Act, (ii) a director, senior manager, administrator, main executive or liquidator of the company, either on their own behalf or on behalf of a third party, including those individuals’ spouses or close relatives, (iii) companies in which the foregoing individuals own at least 10% (directly or indirectly), or in which they serve as directors, senior managers, administrators or main executives, (iv) parties indicated as such in the publicly-traded company’s by-laws, or identified by the board of directors’ committee or (v) those who have served as directors, senior managers, administrators, main executives or liquidators of the counterparty in the last 18 months and are now serving in one of those positions at the publicly-traded company.
Pursuant to Article 147 of Chapter XVI of the Chilean Corporation Act, a publicly held corporation shall only be entitled to enter into a related-party transaction when it is in the interest of the company, the price, terms and conditions are similar to those prevailing in the market at the time of its approval and the transaction complies with the requirements and procedures stated below:
1.The directors, managers, administrators, principal executive officers or liquidators that have an interest or that take part in negotiations conducive to the execution of an arrangement with a related party of the open stock corporation, shall report it immediately to the board of directors or whomever the board designates. Those who breach this obligation will be jointly liable for damages caused to the company and its shareholders.
2.Prior to the company’s consent to a related party transaction, it must be approved by the absolute majority of the members of the board of directors, with exclusion of the interested directors or liquidators, who nevertheless shall make public his/her/their opinion with respect to the transaction if it is so requested by the board of directors, which opinion shall be set forth in the minutes of the meeting. Likewise, the grounds of the decision and the reasons for excluding such directors from its adoption must also be recorded in the minutes.
3.The resolutions of the board of directors approving a related party transaction shall be reported at the next following shareholders’ meeting, including a reference to the directors who approved such transaction. A reference to the transaction is to be included in the notice of the respective shareholders’ meeting.
4.In the event that an absolute majority of the members of the board of directors should abstain from voting, the related-party transaction shall only be executed if it is approved by the unanimous vote of the members of the board of directors not involved in such transaction, or if it is approved in a shareholders’ extraordinary meeting by two-thirds of the voting shares of the company.
5.If a shareholders’ extraordinary meeting is called to approve the transaction, the board of directors shall appoint at least one independent advisor who shall report to the shareholders the terms of the transaction, its effects and the potential impact for the company. In the report, the independent advisor shall include all the matters or issues the directors committee may have expressly requested to be evaluated. The directors committee of the company or, in the absence of such committee, directors not involved in the transaction, shall be entitled to appoint an additional independent advisor, in the event they disagree with the appointment made by the board. The reports of the independent advisors shall be made available to the shareholders by the board on the business day immediately following their receipt by the company, at the company’s business offices and on its internet site, for a period of at least 15 business days from the date the last report was received from the independent advisor, and such arrangement shall be communicated to the shareholders by means of a “Relevant Fact” (Communication sent to the CMF and the stock exchanges in Chile). The directors shall express their view on whether the transaction is in the best interest of the corporation, within five business days from the date the last report was received from the independent advisors.
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6.When the directors of the company must express their view on a related party-transaction, they must expressly state the relationship with the transaction counterparty or the interest involved. They shall also express their opinion on whether the transaction is in the best interest of the corporation, their objection or objections that the directors committee may have expressed, as well as the conclusions of the reports of the advisors. The opinions of the directors shall be made available to the shareholders the day after they were received by the company, at the business offices of the company as well as on its internet site, and such arrangement shall be reported by the company as a “Relevant Fact.”
7.Notwithstanding the applicable sanctions, any infringement of the above provisions will not affect the validity of the transaction, but will grant the company or the shareholders the right to sue the related party involved in the transaction for reimbursement to the company of a sum equivalent to the benefits that the operation reported to the counterpart involved in the transaction, as well as indemnity for damages incurred. In this case, the defendant bears the burden of proof that the transaction complies with the requirements and procedures referred to above.
Notwithstanding the above, the following related party transactions may be executed, pursuant to letters a), b) and c) of Article 147 of the Chilean Corporation Act, without complying with the requirements and procedures stated above, with prior authorization by the board:
1.Transactions that do not involve a “material amount.” For this purpose, any transaction that is both greater than UF2,000 (as of December, 31, 2024, approximately Ch$76.8 million) and in excess of 1% of the corporation’s equity, or involving an amount in excess of UF 20,000 (as of December 31, 2024, approximately Ch$768.3 million) shall be deemed to involve a material amount. All transactions executed within a 12-month period that are similar or complementary to each other, with identical parties, including related parties, or objects, shall be deemed to be a single transaction.
2.Transactions that pursuant to the company’s policy of usual related party transactions as determined by its board of directors, are in the ordinary course of business of the company. Any agreement or resolution establishing or amending such policy shall have the approval of the board of directors’ committee and shall be communicated as a “Relevant Fact” and made available to shareholders at the company’s business offices and on its internet site, and the transaction shall be reported as a “Relevant Fact,” if applicable. Such policy shall not authorize the subscription of acts or contracts that compromise more than the 10% of the assets of the company.
3.Transactions between legal entities in which the company possesses, directly or indirectly, at least 95% of the equity of the counterpart.
The policy of usual related party transactions adopted by the Board of Directors in the meeting held on December 29, 2009, was amended by the board of directors in the meeting held on August 8, 2024, pursuant to said letter b) of Article 147 of the Chilean Corporation Act. That determination and amendment were publicly disclosed on the same day of approval. The current policy as amended is currently available on LATAM Airlines Group’s website under the “Corporate Governance” section.
Likewise, during the meeting held by the Board of Directors on August 8, 2024, also granted the generic approval for those related-party transactions referred to in preceding numbers 1 (non- material amounts) and 3 (95% or more of the equity of the counterpart), pursuant to said letters a) and c) of Article 147 of the Chilean Corporation Act.
Shareholders’ Meetings and Voting Rights
Chilean Corporate Law requires that an ordinary annual meeting of shareholders be held within the first four months of each year after being called by the board of directors (generally they are held in April, but in any case following the preparation of our financial statements, including the report of our auditors, for the previous fiscal year). The shareholders at the ordinary annual meeting approve the annual financial statements, including the report of our auditors, the annual report, the dividend policy and the final dividend on the prior year’s profits, elect the board of directors (when applicable) and approve any other matter that does not require an extraordinary shareholders’ meeting. The most recent extraordinary meeting of our shareholders was held on April 25, 2024, and the most recent ordinary annual meeting of our shareholders was held on April 25, 2024.
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Extraordinary shareholders’ meetings may be called by the board of directors, if deemed appropriate, and ordinary or extraordinary shareholders’ meetings must be called by the board of directors when requested by shareholders representing at least 10.0% of the issued voting shares or by the CMF. In addition, as from January 1, 2010 there are two new rules in this regard: (i) the CMF may directly call for an extraordinary shareholders’ meeting in case of a publicly-traded company, and (ii) any kind of shareholders’ meeting may be self-convened and take place if all voting shares attend, regardless of the fulfillment of the notice and other type of procedural requirements.
Notice to convene the ordinary annual meeting or an extraordinary meeting is given by means of three notices which must be published in a newspaper of our corporate domicile (currently Santiago, Chile) designated by the shareholders at their annual meeting and, if the shareholders fail to make such designation, the notice must be published in the Chilean Official Gazette pursuant to legal requirements. The first notice must be published no less than 10 days and no more than 20 days in advance of the scheduled meeting. Notice also must be sent to the CMF and the Chilean stock exchanges no less than 10 days in advance of the meeting. Currently, we publish our official notices in the newspaper La Tercera (available online at www.latercera.com).
The quorum for a shareholders’ meeting is established by the presence, in person or by proxy, of shareholders representing a majority of our issued common shares. If that quorum is not reached, the meeting can be reconvened within 45 days, and at the second meeting the shareholders present are deemed to constitute a quorum regardless of the percentage of the common shares that they represent.
Only shareholders registered with us at midnight of the fifth business day prior to the date of a meeting are entitled to attend and vote their shares. A shareholder may appoint another individual (who need not be a shareholder) as his/her proxy to attend and vote on his/her behalf. The proxies must fulfill the requirements set forth by the Chilean Corporate Law and its regulatory norms. Every shareholder entitled to attend and vote at a shareholders’ meeting has one vote for every share subscribed.
The following matters can only be considered at an extraordinary shareholders’ meeting:
•our dissolution;
•a merger, transformation, division or other change in our corporate form or the amendment of our by-laws;
•the issuance of bonds or debentures convertible into shares;
•the conveyance of 50% or more of our assets (whether or not it includes our liabilities);
•the adoption or amendment of any business plan which contemplates the conveyance of assets in excess of the foregoing percentage;
•the conveyance of 50% or more of the assets of a subsidiary, if the latter represents at least 20% of our assets;
•the conveyance of shares of a subsidiary which entails the transfer of control;
•granting of a security interest or a personal guarantee in each case to secure the obligations of third parties, unless to secure or guarantee the obligations of a subsidiary, in which case only the approval of the board of directors will suffice; and
•other matters that require shareholder approval according to Chilean law or the by-laws.
The matters referred to in the first seven items listed above may only be approved at a meeting held before a notary public, who shall certify that the minutes are a true record of the events and resolutions of the meeting.
The by-laws establish that resolutions are passed at shareholders’ meetings by the affirmative vote of an absolute majority of those voting shares present or represented at the meeting. However, pursuant to the second paragraph of article 67 of the Chilean Corporation Act, the vote of a two-thirds majority of the outstanding voting shares is required to approve any of the following actions:
•a change in our corporate form, division or merger with another entity;
•amendment to our term of existence, if any;
•our early dissolution;
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•change in our corporate domicile;
•decrease of our capital stock;
•approval of contributions and the assessment thereof whenever consisting of assets other than money;
•any modification of the authority reserved for the shareholders’ meetings or limitations on the powers of the board of directors;
•decrease in the number of members of the board of directors;
•the conveyance of 50% or more of our assets (whether or not it includes our liabilities);
•the adoption or amendment of any business plan which contemplates the conveyance of assets in excess of the foregoing percentage;
•the conveyance of 50% or more of the assets of a subsidiary, if the latter represents at least 20% of our assets;
•the conveyance of shares of a subsidiary which entails the transfer of control;
•the form that dividends are paid in;
•granting a security interest or a personal guarantee in each case to secure obligations of third parties that exceeds 50% of our assets, unless to secure or guarantee the obligations of a subsidiary, in which case only approval of the board of directors will suffice;
•the acquisition of our own shares, when, and on the terms and conditions, permitted by law;
•all other matters provided for in the by-laws;
•the correction of any formal defect in our incorporation or any amendment to our by-laws that refers to any of the matters indicated in the first 16 items listed above;
•the institution of the right of the controlling shareholder who has purchased at least 95% of the shares to purchase shares of the outstanding minority shareholders pursuant to the procedure set forth in article 71 bis of the Chilean Corporation Act; and
•the approval or ratification of transactions with related parties, as per article 147 of the Chilean Corporation Act (described above).
Amendments to the by-laws that have the effect of establishing, modifying or eliminating any special rights pertaining to any series of shares require the consenting vote of holders of two-thirds of the shares of the affected series. As noted above, LATAM Airlines Group does not have a special series of shares.
On November 3, 2024, the restriction established in the third transitory article of LATAM’s by-laws, which consisted of all items referred to in the second paragraph of article 67 of the Chilean Corporations Act requiring the affirmative vote of at least 73% of the outstanding voting shares, automatically ceased. Hence, the two-thirds majority contemplated in the second paragraph of said article 67 applied thereafter.
In general, Chilean law does not require a publicly held corporation to provide the level and type of information that the U.S. securities laws require a reporting company to provide to its shareholders in connection with a solicitation of proxies. However, shareholders are entitled to examine the books of the company and its subsidiaries within the 15-day period before a scheduled meeting. No later than 10 days ahead of the scheduled shareholder’s meeting, the board of directors of a publicly held corporation is required to publish on its website certain information, including that related to the matters to be discussed in such a meeting together with instructions to obtain copies of the relevant supporting documents. The board is also required to make available to the shareholders the annual report and the financial statements of the company, and to publish such information in the company’s webpage at least 10 days in advance of the scheduled shareholders meeting. In addition to these requirements, we regularly have provided, and currently intend to continue to provide, together with the notice of shareholders’ meeting, a proposal for the final annual dividend for shareholder approval. See “-Dividend and Liquidation Rights,” below.
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Chilean Corporate Law provides that, whenever shareholders representing 10% or more of the issued voting shares so request, a Chilean company’s annual report must include such shareholders’ comments and proposals in relation to the company’s affairs, together with the comments and proposals set forth by the board of directors’ committee. Similarly, Chilean Corporate Law provides that whenever the board of directors of a publicly held corporation convenes an ordinary meeting of the shareholders and solicits proxies for that meeting, or distributes information supporting its decisions or other similar material, it is obligated to include as an annex to its annual report any pertinent comments and proposals that may have been made by shareholders owning 10% or more of the company’s voting shares who have requested that such comments and proposals be included, together with the comments and proposals set forth by the board of directors’ committee.
Dividend and Liquidation Rights
In accordance with Chilean Corporate Law, LATAM Airlines Group must distribute an annual cash dividend equal to at least 30% of its annual net profits calculated in accordance with IFRS Accounting Standards, unless otherwise decided by a unanimous vote of the holders of all issued shares, and unless and except to the extent it has accumulated losses. If there are no net profits in a given year, LATAM Airlines Group can elect but is not legally obligated to distribute dividends out of retained earnings. All outstanding common shares are entitled to share equally in all dividends declared by LATAM Airlines Group, except for the shares that have not been fully paid by the shareholder after being subscribed.
For all dividend distributions agreed by the board of directors in excess of the mandatory minimum of 30% noted in the preceding paragraph, LATAM Airlines Group may grant an option to its shareholders to receive those dividends in cash, or in shares issued by either LATAM Airlines Group or other public corporations. Shareholders who do not expressly elect to receive a dividend other than in cash are legally presumed to have decided to receive the dividend in cash. A U.S. holder of ADSs may, in the absence of an effective registration statement under the Securities Act or an available exemption from the registration requirement thereunder, effectively be required to receive a dividend in cash. See “-Preemptive Rights and Increases in Share Capital,” above.
Dividends that are declared but not paid within the appropriate time period set forth in the Chilean Corporate Law (as to minimum dividends, 30 days after declaration; as to additional dividends, the date set for payment thereof at the time of declaration, provided, however, payment of additional dividends shall take place within the fiscal year in which they are declared) are adjusted to reflect the change in the value of the UF. The UF is a daily indexed, Chilean peso-denominated accounting unit designed to discount the effect of Chilean inflation and it is based on the previous month’s inflation rate as officially determined. Such dividends also accrue interest at the then-prevailing rate for UF-denominated deposits during such period. The right to receive a dividend lapses if it is not claimed within five years from the date such dividend is payable. After that period, the amount not claimed is given to a non-profit organization, the National Corporation of Firefighters (Cuerpos de Bomberos de Chile).
In the event of LATAM Airlines Group’s liquidation, the holders of fully paid common shares would participate pro rata in the distribution of assets remaining after payment of all creditors. Holders of shares not fully paid will participate in such distribution in proportion to the amount paid.
Approval of Financial Statements
The board of directors is required to submit our consolidated financial statements to the shareholders for their approval at the annual ordinary shareholders’ meeting. If the shareholders reject the financial statements, the board of directors must submit new financial statements no later than 60 days from the date of that meeting. If the shareholders reject the new financial statements, the entire board of directors is deemed removed from office and a new board is to be elected at the same meeting. Directors who approved such financial statements are disqualified for re-election for the ensuing period.
Right of Dissenting Shareholders to Tender Their Shares
Chilean Corporate Law provides that, upon the adoption at an extraordinary meeting of shareholders of any of the resolutions or if any of the situations enumerated below takes place, dissenting shareholders acquire the right to withdraw and to compel the company to repurchase their shares, subject to the fulfillment of certain terms and conditions. However, such right shall be suspended if we are a debtor in a bankruptcy liquidation proceeding, or if we are subject to a reorganization agreement approved in accordance with the Chilean Insolvency Act, unless such agreement allows the right to withdraw, or unless it is terminated by the issuance of a liquidation resolution. In the case of holders of ADRs, however, in order to exercise such rights, holders of ADRs would be required to first withdraw the common shares represented by the ADRs pursuant to the terms of the deposit agreement.
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Such holders of ADRs would need to perfect the withdrawal of the common shares on or before the fifth business day prior to the date of the meeting.
“Dissenting shareholders” are defined as those who attend a shareholders’ meeting and vote against a resolution which results in the withdrawal right, or, if absent at such a meeting, those who state in writing to the company their opposition to such resolution within the following 30 days. Dissenting shareholders must perfect their withdrawal rights by tendering their stock to the company within thirty days after adoption of the resolution.
The price to be paid to a dissenting shareholder of a publicly held corporation is its market value. In the case of corporations which shares are actively traded on a stock exchange (acciones con presencia bursátil) pursuant to a General Rule issued by the CMF, the weighted average of the sales prices for the shares as reported on the Chilean stock exchanges on which the shares are quoted during the 60 stock-exchange-business-day period elapsed between the 30th and the 90th stock-exchange-business-days-preceding the shareholder resolution giving rise to the withdrawal right. If the shares of the corporation do not qualify as “actively traded” pursuant to the General Rules dictated by the CMF, the market price corresponds to the book value of the shares. Book value for this purpose equals paid capital plus reserves and profits, less losses, divided by the total number of subscribed and paid shares. For the purpose of making this calculation, the last balance sheet submitted to the CMF is used and adjusted to reflect inflation up to the date of the shareholders’ meeting that gave rise to the withdrawal right.
The resolutions and situations that result in a shareholder’s right to withdraw are the following:
•the transformation of the company;
•the merger of the company with or into another company;
•the conveyance of 50% or more of the assets of the company, whether or not such sale includes the company’s liabilities;
•the adoption or amendment of any business plan which contemplates the conveyance of assets in excess of the foregoing percentage;
•the conveyance of 50% or more of the assets of a subsidiary, if the latter represents at least 20% of our assets;
•the conveyance of shares of a subsidiary which entails the transfer of control, if the subsidiary represents at least 20% of our assets;
•the creation of preferential rights for a class of shares or an extension, amendment or reduction to those already existing, in which case the right to withdraw only accrues to the dissenting shareholders of the class or classes of shares adversely affected;
•the correction of any formal defect in the incorporation of the company or any amendment to the company’s by-laws that grants the right to withdraw;
•the granting of security interests or personal guarantees to secure or guarantee third parties’ obligations exceeding 50% of the company’s assets, except with regard to subsidiaries;
•if the CMF approves de-registering the shares of a publicly held corporation in the Securities Registry of the CMF, as resolved by the extraordinary shareholders’ meeting;
•if the extraordinary shareholders’ meeting resolves to close a publicly held corporation, in the event that the CMF had previously de-registered its shares in the Securities Registry of the CMF as a consequence of a sanctioning administrative process;
•if the controlling shareholder of a publicly-traded company reaches over 95% of the shares (in such case, the right must be exercised within 30 days of the date in which the threshold is reached, circumstance that must be communicated by means of a publication); and
•such other causes as may be established by the company’s by-laws (no such additional resolutions currently are specified in our by-laws).
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In addition, shareholders of publicly held corporations have the right to withdraw if a person acquires two-thirds or more of the outstanding shares of such corporation with the right to vote (except as a result of other shareholders not having subscribed and paid a capital increase) and does not make a tender offer for the remaining shares within 30 days after acquisition.
Under article 69 bis of the Chilean Corporation Act, the right to withdraw also is granted to shareholders (other than pension funds that administer private pension plans under the national pension law), under certain terms and conditions, if a company were to become controlled by the Chilean government, directly or through any of its agencies, and if two independent rating agencies downgrade the rating of its stock from first class because of certain actions specified in Article 69 bis undertaken by the company or the Chilean government that affect negatively and substantially the earnings of the company. Shareholders must perfect their withdrawal rights by tendering their shares to the company within 30 days of the date of the publication of the new rating by two independent rating agencies. If the withdrawal right is exercised by a shareholder invoking Article 69 bis, the price paid to the dissenting shareholder shall be the weighted average of the sales price for the shares as reported on the stock exchanges on which the company’s shares are quoted for the six-month period preceding the publication of the new rating by two independent rating agencies. If, as previously described, the CMF determines that the shares are not actively traded on a stock exchange, the price shall be the book value calculated as described above.
There is no legal precedent as to whether a shareholder that has voted both for and against a proposal (such as the depositary) may exercise withdrawal rights with respect to the shares voted against the proposal. As such, there is doubt as to whether holders of ADRs who have not surrendered their ADRs and withdrawn common shares on or before the fifth business day prior to the shareholder meeting will be able to exercise withdrawal rights either directly or through the depositary with respect to the shares represented by ADRs. Under the provisions of the deposit agreement the depositary will not exercise these withdrawal rights.
The circumstance indicated above regarding ownership in excess of 95% by the controlling shareholder creates not only a withdrawal right for the remaining minority shareholders, but as of January 1, 2010, it could also potentially create a “squeeze out” right by the controlling shareholder with respect to those same shareholders (granting a call option by means of which the controlling shareholder may buy-out the existing ownership participations) pursuant to the provisions of article 71 bis of the Corporation Act. However, the “squeeze out” right would apply to the extent expressly contemplated in the by-laws of the corporation, and only with respect to the shares acquired by a shareholder during the effectiveness of such provision in the by-laws of the corporation. LATAM’s by-laws currently do not contemplate a “squeeze out”.
Registration and Transfers
DCV Registros S.A. (“DCV”), a local depository corporation, acts as LATAM Airlines Group’s registration agent. In the case of jointly owned common shares, an attorney-in-fact must be appointed to represent the joint owners in dealings with us.
C.Material Contracts
Table of Material Contracts for the Purchase of Aircraft
Agreement Date Aircraft (number purchased) Estimated
Gross Value of
Aircraft at
List Price
Boeing 787-8/9 Fleet
Purchase Agreement No. 3256 with the Boeing Company October 29, 2007 ⮚ Boeing 787-8 aircraft (18) US$ 3,200,000,000 
⮚ Boeing 787-9 aircraft (8)
⮚ Option of purchasing fifteen additional aircraft to be delivered in 2017 and 2018
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Agreement Date Aircraft (number purchased) Estimated
Gross Value of
Aircraft at
List Price
Supplemental Agreement No. 1 to the Purchase Agreement No. 3256 March 22, 2010 ⮚ Advance scheduled delivery date of ten Boeing 787-8 aircraft and substitute four Boeing 787-9 aircraft into four Boeing 787-8 aircraft.
Supplemental Agreement No. 3 to the Purchase Agreement No. 3256 August 24, 2012 ⮚ Replace two Boeing 787-8 aircraft with two Boeing 787-8 aircraft with a later delivery.
Delay Settlement Agreement to the Purchase Agreement No. 3256 September 16, 2013 ⮚ Agreed to update delivery dates, settle consequences of delays and convert several future deliveries of B787-8 aircraft to B787-9 aircraft. This agreement was amended on April 22, 2015 to update delivery dates of certain aircraft.
Supplemental Agreement No. 4 to the Purchase Agreement No. 3256 April 22, 2015 ⮚ Reschedule the delivery dates of four Boeing 787-8 aircraft and replace four Boeing 787-8 aircraft with four Boeing 787-9 aircraft.
Supplemental Agreement No. 6 to the Purchase Agreement No. 3256 May 27, 2016 ⮚ Convert four Model 787-8 Aircraft to four Model 787-9 Aircraft, and Defer of two Model 787-9 Aircraft from 1Q 2018 and 2Q 2018 to 3Q 2018 and 4Q 2018 respectively.
Supplemental Agreement No. 13 to the Purchase Agreement No. 3256 July 3, 2019 ⮚ To include certain letter agreements
Supplemental Agreement No. 14 to the Purchase Agreement No. 3256 October 11, 2019 ⮚ Reschedule the delivery dates of four Boeing 787-8 aircraft
Supplemental Agreement No. 15 to the Purchase Agreement No. 3256 October 11, 2019 ⮚ To incorporate Exhibit A1  
Supplemental Agreement No. 16 to the Purchase Agreement No. 3256 October 11, 2019 ⮚ Deferral of PDPs.  
Supplemental Agreement No. 17 to the Purchase Agreement No. 3256 February 17, 2020 ⮚ To include certain letter agreements.  
Supplemental Agreement No. 18 to the Purchase Agreement No. 3256 April 29, 2021 ⮚ Covering the cancellation of the delivery of four Boeing 787-9 aircraft.  
787 Settlement Agreement June 17, 2022 ⮚ Agreed to update delivery dates and settle certain consequences.  
Supplemental Agreement No. 19 to the Purchase Agreement No. 3256 August 30, 2023 ⮚ Incremental order of 5 additional Boeing 787 Aircraft.
Supplemental Agreement No. 20 to the Purchase Agreement No. 3256 August 13, 2024 ⮚ Incremental order of 10 additional Boeing 787 Aircraft.
Airbus A320-Family Fleet  
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Agreement Date Aircraft (number purchased) Estimated
Gross Value of
Aircraft at
List Price
Second A320-Family Purchase Agreement with Airbus S.A.S. March 20, 1998 ⮚ Airbus A320-Family aircraft (5) US$ 230,000,000 
Amendment No. 1 to the Second A320-Family Purchase Agreement November 14, 2003 ⮚ Exercise three purchase rights for Airbus 319 aircraft, among other things.  
Amendment No. 2 to the Second A320-Family Purchase Agreement October 4, 2005 ⮚ Acquire 25 additional Airbus 320 family aircraft and 15 purchase rights for Airbus A320-Family aircraft.  
Amendment No. 3 to the Second A320-Family Purchase Agreement March 6, 2007 ⮚ Exercise 15 purchase rights for 15 Airbus A320-Family Aircraft.  
⮚ According to clause 12.2 of the Second A320-Family Purchase Agreement, applicable to all subsequent amendments, in case of a failure, as defined in such agreement, a service life policy for a period of 12 years after delivery of any given aircraft shall apply.  
Amendment No. 5 to the Second A320-Family Purchase Agreement December 23, 2009 ⮚ Airbus A320-Family aircraft (30) US$ 2,000,000,000 
Amendment No. 6 to the Second A320-Family Purchase Agreement May 10, 2010 ⮚ Convert the aircraft type of three aircraft and advance the scheduled delivery date of 13 aircraft.
Amendment No. 8 to the Second A320-Family Purchase Agreement September 23, 2010 ⮚ Convert the aircraft type of one aircraft and advance the scheduled delivery date of four aircraft.
Amendment No. 9 to the Second A320-Family Purchase Agreement December 21, 2010 ⮚ Airbus A320-Family aircraft (50) US$ 2,600,000,000 
Amendment No. 10 to the Second A320-Family Purchase Agreement June 10, 2011 ⮚ Convert the aircraft type of three aircraft, to select sharklets for some aircraft and to notify delivery dates for some aircraft.
Amendment No. 11 to the Second A320-Family Purchase Agreement November 3, 2011 ⮚ Convert the aircraft type of three aircraft and defer the scheduled delivery date of four aircraft.
Amendment No. 12 to the Second A320-Family Purchase Agreement November 19, 2012 ⮚ Convert the aircraft type of three aircraft, identify certain aircraft as Sharklet Installed Aircraft and others as Sharklet Capable Aircraft, as those are defined in such Purchase Agreement, and notify the scheduled delivery month for certain aircraft.
Amendment No. 13 to the Second A320-Family Purchase Agreement August 19, 2013 ⮚ Convert several A320 aircraft to A321 aircraft and to postpone the scheduled delivery dates of several aircraft.
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Agreement Date Aircraft (number purchased) Estimated
Gross Value of
Aircraft at
List Price
Amendment No. 16 to the Second A320-Family Purchase Agreement July 15, 2014 ⮚ Covering cancellation and substitution of certain Aircraft.
Novation Agreement to the Second A320-Family Purchase Agreement October 30, 2014 ⮚ Novation of the original TAM A320/A330 Family Purchase Agreement from TAM to LATAM.
Amendment No. 17 to the Second A320-Family Purchase Agreement December 11, 2014 ⮚ Covering the substitution of certain Aircraft.  
Amendment No. 18 to the Second A320-Family Purchase Agreement August 4, 2021 ⮚ Covering the postponement of certain relevant deadlines.  
Airbus A320 NEO-Family Fleet
A320 NEO Purchase Agreement June 22, 2011 ⮚ Airbus 320 NEO Family aircraft (20) US$ 1,700,000,000 
⮚ Delivery scheduled to take place in 2017 and 2018  
Amendment No. 1 to the A320 NEO Purchase Agreement February 27, 2014 ⮚ Covering the advancement of the date by which LATAM selects the propulsion systems.  
Amendment No. 2 to the A320 NEO Purchase Agreement July 15, 2014 ⮚ Covering the order of incremental A320 NEO Aircraft.  
Amendment No. 3 to the A320 NEO Purchase Agreement December 11, 2014 ⮚ Covering the order of incremental A320 NEO Aircraft and A321 NEO Aircraft.  
Amendment No. 4 to the A320 NEO Purchase Agreement April 15, 2016 ⮚ Covering the reschedule of the delivery of eight Original NEO Aircraft and the conversion of four Original NEO Aircraft into A321 NEO Aircraft  
Amendment No. 5 to the A320 NEO Purchase Agreement April 15, 2016 ⮚ Changes in the technical specifications of the aircraft to be received under this agreement.  
Amendment No. 6 to the A320 NEO Purchase Agreement August 8, 2016 ⮚ Covering the cancellation of the delivery of four A320 NEO Aircraft.  
Amendment No. 7 to the A320 NEO Purchase Agreement September 22, 2017 ⮚ Covering the rescheduling of certain A320 NEO Family Aircraft.  
Amendment No. 8 to the A320 NEO Purchase Agreement December 21, 2018 ⮚ Covering the rescheduling of certain A320 NEO Family Aircraft.  
Amendment No. 9 to the A320 NEO Purchase Agreement August 4, 2021 ⮚ Covering the rescheduling of certain A320 NEO Family Aircraft.  
Amendment No. 10 to the A320 NEO Purchase Agreement August 17, 2023 ⮚ Covering the rescheduling of certain A320 NEO Family Aircraft.
TAM Material Contracts – A320/A330 Family Purchase Agreement  
Purchase Agreement with Airbus S.A.S. November 2006 ⮚ Airbus A320-Family aircraft (31) US$ 3,300,000,000 
⮚ Airbus A330-200 aircraft (6)  
⮚ Delivery was scheduled to take place between 2007 and 2010  
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Agreement Date Aircraft (number purchased) Estimated
Gross Value of
Aircraft at
List Price
New Purchase Agreement with Airbus S.A.S. January 2008 ⮚ Airbus A320-Family aircraft (20) US$ 2,140,000,000 
⮚ Airbus A330-200 aircraft (4)  
⮚ Delivery was scheduled to take place between 2007 and 2014  
New Purchase Agreement with Airbus S.A.S. July 2010 ⮚ Airbus A320-Family aircraft (20) US$ 1,450,000,000 
⮚ Delivery was scheduled to take place between 2014 and 2015  
New Purchase Agreement with Airbus S.A.S. October 2011 ⮚ Airbus A320-Family aircraft (10) US$ 1,730,000,000 
⮚ Airbus A320 NEO Family aircraft (22)  
⮚ Delivery scheduled to take place between 2016 and 2018  
⮚ Ten option rights for Airbus A320 NEO Family aircraft  
Amendment No. 13 to the A320/A330 Purchase Agreement November 2012 ⮚ Convert the aircraft type of A320 family aircraft.  
Amendment No. 14 to the A320/A330 Purchase Agreement December 2012 ⮚ Convert the aircraft type of an A320 family aircraft and reschedule the delivery date of such aircraft.  
Amendment No. 15 to the A320/A330 Purchase Agreement February 2013 ⮚ Changes to the scheduled delivery month of certain A320 Family Aircraft.  
Amendment No. 16 to the A320/A330 Purchase Agreement February 2013 ⮚ Change to the aircraft type of certain A320 Family Aircraft, to the scheduled delivery month/quarter of certain A320 Family Aircraft and make certain changes to the dates by which TAM will select the propulsion systems and NEO propulsion systems for certain Aircraft.  
Amendment No. 17 to the A320/A330 Purchase Agreement August 2013 ⮚ Change to the scheduled delivery month of a certain A320 Family Aircraft and to make the selection of the propulsion systems and NEO propulsion systems for certain Aircraft.  
Amendment No. 20 to the A320/A330 Purchase Agreement June 2015 ⮚ Change to the schedule delivery month of one A321 Aircraft.  
Amendment No. 21 to the A320/A330 Purchase Agreement December 2015 ⮚ Change to the schedule delivery month of two A320 NEO Aircraft.  
Amendment No. 23 to the A320/A330 Purchase Agreement April 15, 2016 ⮚ Reflect the changes in the technical specifications of the aircraft to be received under this agreement.  
Amendment No. 24 to the A320/A330 Purchase Agreement August 8, 2016 ⮚ Cancel the delivery of eight A320 NEO Aircraft.  
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Agreement Date Aircraft (number purchased) Estimated
Gross Value of
Aircraft at
List Price
Amendment No. 26 to the A320/A330 Purchase Agreement December 21, 2018 ⮚ Rescheduled delivery of five A320 NEO Aircraft and eleven A321 NEO Aircraft.  
⮚ Cancel the delivery of one A321 Aircraft.  
Amendment No. 27 to the A320/A330 Purchase Agreement August 4, 2021 ⮚ Incremental order of 28 additional A320 NEO Family Aircraft.  
⮚ Rescheduling of certain A320 NEO Family Aircraft.  
Amendment No. 28 to the A320/A330 Purchase Agreement July 20, 2022 ⮚ Incremental order of 17 additional A320 NEO Family Aircraft.  
⮚ Rescheduling and type conversion of certain A320 NEO Family Aircraft.  
Amendment No. 29 to the A320/A330 Purchase Agreement August 2023 ⮚ Incremental order of 13 additional A320 NEO Family Aircraft.
⮚ Rescheduling of certain A320 NEO Family Aircraft.
TAM Material Contracts - A350 Family Purchase Agreement  
Purchase Agreement with Airbus S.A.S. January 2008 ⮚ Airbus A350 aircraft (22) US$ 6,480,000,000 
⮚ Ten option rights for Airbus A350 aircraft.  
 
Amendment No. 1 to the A350 Purchase Agreement July 2010 ⮚ Exercise its option of five A350 XWB options.  
Amendment No. 2 to the A350 Purchase Agreement July 2014 ⮚ Reschedule the delivery of certain A350-900XWB and to amend certain provisions to reflect the latest aircraft specification.  
Novation Agreement to the A350 Purchase Agreement July 2014 ⮚ Novating the A350 purchase agreement from TAM to LATAM.  
Amendment No. 4 to the A350 Purchase Agreement September 2015 ⮚ Modify certain terms and conditions of such agreement and to convert a number of A350-900 XWB Aircraft into A350-1000 XWB Aircraft.  
Amendment No. 5 to the A350 Purchase Agreement November 2015 ⮚ Convert a number of A350-900 XWB aircraft into six A350-1000 XWB aircraft and to reschedule the delivery of certain A350-900 XWB.  
Amendment No. 7 to the A350 Purchase Agreement August 8, 2016 ⮚ Change aircraft type, from two A350-900 XWB Aircraft to two A350 - 1000 XWB Aircraft.  
Amendment No. 9 to the A350 Purchase Agreement September 22, 2017 ⮚ Convert two A350-1000 XWB Aircraft into A350-900 XWB Aircraft  
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Agreement Date Aircraft (number purchased) Estimated
Gross Value of
Aircraft at
List Price
Amendment No. 10 to the A350 Purchase Agreement December 21, 2018 ⮚ Convert four A350-1000 XWB Aircraft into A350-900 XWB Aircraft.  
⮚ Reschedule of six A350-900 XWB Aircraft and eight A350-1000 XWB.  
Amendment No. 11 to the A350 Purchase Agreement April 29, 2019 ⮚ Reschedule of two A350-900 XWB Aircraft  
Amendment No. 12 to the A350 Purchase Agreement August 5, 2019 ⮚ Reschedule of one A350-900 XWB Aircraft  
Termination Agreement in respect of the A350 Purchase Agreement August 4, 2021 ⮚ Cancellation of 2 remaining deliveries of A350-1000 XWB Aircraft  
TAM Material Contracts - Boeing 777 Purchase Agreement
Agreement Date Aircraft (number purchased) Estimated
Gross Value of
Aircraft at
List Price
Purchase Agreement with Boeing February 2007 ⮚ Boeing 777-32WER aircraft (4) US$ 1,070,000 
Supplemental Agreement No. 1 to the Purchase Agreement August 2007 ⮚ Exercise four option aircraft and to define certain aircraft configuration.  
Supplemental Agreement No. 2 to the Purchase Agreement March 2008 ⮚ Document its agreement on the descriptions and pricing of some options and master changes related to certain aircraft.  
Supplemental Agreement No. 3 to the Purchase Agreement December 2008 ⮚ Purchase of two incremental 777 aircraft.  
Supplemental Agreement No. 5 to the Purchase Agreement July 2010 ⮚ Reschedule the delivery of certain aircraft.  
Supplemental Agreement No. 6 to the Purchase Agreement February 2011 ⮚ Purchase of two incremental 777 aircraft.  
Supplemental Agreement No. 7 to the Purchase Agreement May 2014 ⮚ Substitute two 777-300ER aircraft originally scheduled for delivery in 2014 for two 777-F aircraft for scheduled delivery in 2017.  
Supplemental Agreement No. 8 to the Purchase Agreement April 2015 ⮚ Reschedule the delivery of certain aircraft.  
Supplemental Agreement No. 11 to the Purchase Agreement October 11, 2019 ⮚ Option to cancel two Aircraft  
Supplemental Agreement No. 12 to the Purchase Agreement February 3, 2020 ⮚ Cancellation of one Aircraft  
Supplemental Agreement No. 13 to the Purchase Agreement April 29, 2021 ⮚ Cancellation of one Aircraft  
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Other Material Contracts
Boeing
On May 9, 1997, we entered into the Aircraft General Terms Agreement with The Boeing Company (“AGTA”), applicable to all Boeing aircraft contracted for purchase from The Boeing Company.
Boeing Aircraft Holding Company
On May 8, 2018, we also entered into an Aircraft Lease Common Terms Agreement with The Boeing Aircraft Holding Company for the lease of two Boeing 777-200ER aircraft. The average term of the lease is 12 months.
Airbus A320-Family Fleet
Between April and August 2011, we entered into Buyback Agreements No. 3001, 3030, 3062, 3214 and 3216 with Airbus Financial Services for the sale of five A318 aircraft for approximately US$107 million.
Between August 2012 and January 2013, we entered into Buyback Agreements No. 3371, 3390, 3438, 3469 and 3509 with Airbus Financial Services for the sale of five A318 aircraft for approximately US$102 million.
Aercap Holdings N.V.
On May 28, 2013, we entered into a framework deed with Aercap Holdings N.V. for the sale and leaseback of several used A330-200 aircraft, which were returned to the lessor, and several new aircraft to be received from the manufacturer including Airbus 350-900, Boeing 787-8 and Boeing 787-9 aircraft. The estimated gross value (at list prices) of these aircraft is US$3.0 billion.
On February 25, 2022, we entered into lease agreements with Bank of Utah, not in its individual capacity but solely in its capacity as owner trustee (all having AerCap Group acting as a servicer) for the lease of six A321neo to be delivered in 2023 and 2024. Also, on March 31, 2022, we entered into lease agreements with Bank of Utah, not in its individual capacity but solely in its capacity as owner trustee (all having AerCap Group acting as a servicer) for the lease of two additional A321neo to be delivered in 2024. These lease agreements are for a duration of twelve years.
On March 02, 2023, we entered into lease agreements with Bank of Utah, not in its individual capacity but solely in its capacity as owner trustee (all having AerCap Group acting as a servicer) for the lease of four B787-9 to be delivered in 2025. These lease agreements are for a duration of twelve years.
Aircastle Holding Corporation Limited
On February 21, 2014, we entered into a framework deed with Aircastle Holding Corporation Limited for the lease of four Boeing 777-300ER already in the fleet. The four aircraft were manufactured in 2012 and the estimated market value (at list prices) of these aircraft is US$580 million. The average term of the original leases were 60 months, and the agreement was extended for another 84 months.
On January 11, 2019, we entered into lease agreements with Aircastle for the lease of 10 A320 aircraft. The lease agreements are for a duration of approximately seven to eight years.
One of the four Boeing 777-300ER aircraft has been sold in July 2019 and is no longer part of such framework deed with Aircastle, but the aircraft remains in our fleet with a different lessor. On June 21, 2024 we bought three Boeing 777-300ER aircraft from Aircastle.
GE Commercial Aviation
On April 30, 2007, we also entered into an Aircraft Lease Common Terms Agreement with GE Commercial Aviation Services Limited and two Aircraft Lease Agreements with Wells Fargo Bank Northwest N.A., as owner trustee, for the lease of two Boeing Boeing 777-200LRF aircraft. These aircraft were delivered in 2009 and the leases shall remain in place for a term of 96 months.
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GE Engine Services LLC
On June 12, 2014, we (and TAM Linhas Aereas S.A.) entered into engine services agreement with GE Engine Services, LLC and GE Celma Ltda. for the provision of maintenance services of CF6-80C2B6F engines (which powers our Boeing 767 fleet) during 200 shop visits or 10 years, whichever occurs first.
On June 18, 2021, we entered into an engine services agreement with GE Engine Services, LLC for the provision of maintenance services of GE90-115BL engines, which power 10 Boeing 777 passenger fleet and 3 spare engines, for a period of 6 years.
CFM International
On December 17, 2010, we entered into General Terms Agreement No. CFM-1-2377460475 (the “GTA”) and Letter Agreement No. 1 to GTA with CFM International, Inc. (“CFM”) for the sale and support by CFM of CFM56-5B engines to power 70 A320-family aircraft and up to 14 CFM56-5B spare engines. On the same date, we entered into a Rate Per Flight Hour Engine Shop Maintenance Services Agreement with CFM for the provision by CFM of maintenance services for the above-mentioned installed and spare engines.
On December 31, 2014, we entered Letter Agreement No. 2 to GTA with CFM for the sale and support by CFM of CFM56-5B engines to power 20 A320-family aircraft and one spare engine.
On March 15, 2006, TAM Linhas Aereas S.A. entered into an engine services agreement with GE Celma Ltda. for the provision of maintenance services for CFM56-5B engines, which power 47 A320-family passenger fleet and 6 spare engines, for a period of 15 years per engine.
PW1100G-JM Engine Maintenance Agreement
In February 2014, we entered into an engine support and maintenance agreement with United Technologies International Corporation, Pratt & Whitney Division (“PW”) for the sale, support and maintenance by PW of PW1100G-JM engines to power 42 A320neo-family aircraft and nine spare engines. It is also a rate per engine flight hour contract agreement, which includes cost control mechanisms for LATAM.
On April 30, 2015, PW assigned the agreement described above to International Aero Engines, LLC.
On November 22, 2022, we entered into Amendment 7 to the above-mentioned services agreement with International Aero Engines, LLC, for the sale and support by IAE of PW1100 engines to power additional A320neo-family aircraft and additional option aircraft, and additional PW1100 spare engines.
On September 17, 2024, we entered into the PW1100G-JM Supplemental Support Agreement with IAE International Aero Engines, LLC for the support of AOG events.
Rolls-Royce PLC & Rolls-Royce TotalCare Services Limited
On September 30, 2009, we entered into General Terms Agreement No. DEG5307 (the “GTA”) with Rolls-Royce PLC for the sale and support by Rolls-Royce of Trent 1000 engines to power 32 Boeing 787 family aircraft and up to 10 Trent 1000 spare engines. On the same date, we entered into a Rate Per Flight Hour Engine Shop Maintenance Services Agreement with Rolls-Royce TotalCare Services Limited for the provision by Rolls-Royce of maintenance services for the above-mentioned installed and spare engines, for a period of 15 years per engine.
On December 1, 2021, we entered into Amendment 7 to the above-mentioned services agreement with Rolls-Royce PLC, for the sale and support by Rolls-Royce of Trent 1000 engines to power 28 Boeing 787 family aircraft and additional option aircraft, and up to 13 Trent 1000 spare engines.
International Aero Engines AG
On October 12, 2006, we entered into an engine services agreement with IAE International Aero Engines AG for the provision of maintenance services of V2500-A5 engines, which power 53 A320-family passenger fleet and 9 spare engines, for a period of 12 years per engine.
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On October 21, 2010, TAM Linhas Aereas S.A. entered into an engine services agreement with IAE International Aero Engines AG for the provision of maintenance services of V2500-A5 engines, which power 26 A320-family passenger fleet and 7 spare engines, for a period of 12 years per engine.
On September 17, 2024, together with TAM Linhas Aéreas S.A., we entered into the V-Services Fixed Price Repair Agreement with IAE International Aero Engines AG for the provision of maintenance services of V2500 engines, for a period of 5 years per engine.
CFM International
On June 29, 2016, we entered into a Rate Per Flight Hour Agreement for Engine Shop Maintenance Services with CFM International, Inc., covering the maintenance, repair and overhaul of certain CFM56-5B engines.
On December 22 2023, LATAM and TAM entered into a seventh amendment to the above-mentioned services agreement with CFM International, Inc. and GE Celma Ltda., incorporating all engines out of their original contract for an additional period of coverage.
Avolon Aerospace
On September 8, 2017, we entered into a lease agreement with Avolon Aerospace for the Sale and Leaseback of five A320neo aircraft. The estimated market value of these aircraft is US$ 241,000,000. The average term of the leases is 144 months.
On January 16, 2018, we entered into a lease agreement with Avolon Aerospace of two A321-200 aircraft. The estimated market value of these aircraft is US$ 88,600,000. The average term of the lease is 124 months.
On September 9, 2021, we entered into lease agreements with Avolon for the lease of three 787-9. The lease agreements are for a duration of approximately thirteen years.
Vermillion Aviation
On September 3, 2019, we entered into lease agreements with Vermillion Aviation (Two) Limited (all having Vermillion Aviation Holdings Ireland Limited as servicer) for the lease of four A320 aircraft. The lease agreements are for a duration of approximately seven and eight years.
On February 1, 2021, we entered into additional lease agreements for the lease of two additional A320 aircraft with Vermillion Aviation (Nine) Limited (all having AMCK Aviation Holdings Ireland Limited acting as a servicer) for a duration of approximately nine years.
Sky Aero Management/ Dubai Aerospace Entreprise (DAE) Ltd.
On February 16, 2022, we entered into lease agreements with SFV Aircraft Holdings IRE 7 DAC, SFV Aircraft Holdings IRE 8 DAC and SFI Aircraft Holdings IX Designated Activity Company (all having Sky Aero Management acting as a servicer) for the lease of ten A320neo aircraft to be delivered on 2022, 2023 and 2024. The lease agreements are for a duration of twelve years.
In December 2022, four of the ten aircraft changed the servicer for Dubai Aerospace Entreprise (DAE) Ltd.
VMO Aircraft Leasing Ireland Service Co
On March 5, 2021, we entered into lease agreements with Wilmington Trust Company, not in its individual capacity but solely in its capacity as owner trustee, (all having VMO Aircraft Leasing Ireland Service Co. acting as a servicer) for the lease of eleven A321 aircraft. On April 23, 2021, we entered into lease agreements with UMB Bank N.A. not in its individual capacity but solely in its capacity as owner trustee (all having VMO Aircraft Leasing Ireland Service Co. acting as a servicer) for the lease of four 787-9 aircraft. The lease agreements are for a duration of approximately nine to ten years.
In July 2022, we entered into lease agreements for the lease of two Airbus A321-271NX aircraft with UMB Bank N.A. not in its individual capacity but solely in its capacity as owner trustee (all having Avolon Aerospace Leasing Limited acting as a servicer) for a duration of approximately 12 years.
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In October 2022, we entered into lease agreements for the lease of two additional Boeing 787 aircraft with UMB Bank N.A. not in its individual capacity but solely in its capacity as owner trustee (all having VMO Aircraft Leasing Ireland Service Co. acting as a servicer) for a duration of approximately twelve years.
SABRE Contract
On May 4, 2015, we entered into a Master Services License Agreement with SABRE Inc. Pursuant to this agreement SABRE Inc., will grant LATAM access and use of certain reservation systems. This agreement will be effective for an initial period of 10 years.
In addition, LATAM has distribution agreements in place with SABRE as well as with other distribution providers. On May 1, 2020 we entered into a new Sabre Participant Carrier Distribution and Services Agreement. This agreement will be effective for successive 1-year periods until terminated anytime by either party upon at least 180 days’ notice.
AMADEUS Contract
On May 1, 2020, we entered into the Amended and Restated Addendum to the Global Distribution Agreement for Full Content and Channel Parity with Amadeus, an agreement effective for an initial period of two years. On January 14, 2021, LATAM rejected this contract, as part of its Chapter 11 Restructuring, which took effect on March 1, 2021. Notwithstanding the foregoing, on March 12, 2021 LATAM and Amadeus entered into a new Amended and Restated Addendum to the Global Distribution Agreement for Full Content and Channel Parity. This Addendum will be automatically renewed for periods of one year, until terminated anytime upon at least 90 days’ notice.
TRAVELPORT Contract
On June 1, 2021, we entered into the Content Amendment to the Travelport International Global Airline Distribution Agreements. This Addendum will be automatically renewed for periods of one year, until terminated anytime upon at least 90 days’ notice before the end of any Additional Term.
V2500-A5 Engine Maintenance Service Agreement
In 2020, LATAM together with TAM entered into an Engine Maintenance Services Agreement with MTU Maintenance Hannover GmBH, for the maintenance of certain V2500 engines.
CFM56-5B Engine Maintenance Contract
In March 2006, TAM entered into a services agreement with GE Celma, a Brazilian subsidiary of General Electric Engine Services division, for the maintenance by GE Celma of CFM56-5B engines to power 25 A320-family aircraft and four spare engines.
In March 2007 TAM entered into the Amendment 1 to the above-mentioned services agreement with GE Celma, extending the maintenance services to the engines powering additional 16 A320-family aircraft and two spare engines.
Petrobras
In July 2021, we entered into an Aviation Fuel Supply Agreement with Petrobras Distribuidora S.A. and a local agreement for services in Brazil. These Agreements will be effective until June 30, 2024.
World Fuel Services
In October 2006, we entered into an Aviation Fuel Supply Agreement with World Fuel Services INC. Later we entered into local agreements for services in Chile, México, Colombia and USA. These Agreements will be effective until December 31, 2023.
Air BP-Copec
In December 2021, we entered into an Aviation Fuel Supply Agreement with Air BP Copec S.A. for services in Chile. These Agreements will be effective until January 31, 2023. An extension until April 30, 2023 has been agreed until new conditions are negotiated.
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Repsol
In January 2023, we entered into an Aviation Fuel Supply Agreement with Repsol Marketing SAC and related companies. The agreement includes a local agreement for services in Peru valid until December 31, 2023.
General Electric Company, GE Engine Services Distribution LLC & GE Engine Services LLC

On December 1, 2023, we entered into a General Terms Agreement No. 1-1057041 with General Electric Company and GE Engine Services Distribution, LLC (jointly referred as “GE”) for the sale and support by GE of GEnx engines to power 9 Boeing 787-9 aircraft, additional option aircraft and spare engines. On the same date, we entered into a TrueChoiceTM Engine Service Agreement with GE Engine Services, LLC for the provision by GE Engine Services, LLC of maintenance services for the above-mentioned installed and spare engines.
D.Exchange Controls
Foreign Investment and Exchange Controls in Chile
The Central Bank of Chile is responsible, among other things, for monetary policies and exchange controls in Chile. Equity investments, including investments in shares of stock by persons who are non-Chilean residents, have been generally subject in the past to various exchange control regulations restricting the repatriation of their investments and the earnings thereon.
Article 47 of the Central Bank Act and former Chapter XXVI of the Central Bank Foreign Exchange Regulations regulated the foreign exchange aspects of the issuance of ADSs by a Chilean company until April 2001. According to former Chapter XXVI, the Central Bank of Chile and the depositary had to enter into an agreement in order to gain access to the formal exchange market. The issuers of the shares underlying the ADSs and the custodian could also be parties to these agreements.
On April 16, 2001, the Central Bank of Chile agreed that, effective April 19, 2001:
•prior foreign exchange restrictions would be eliminated; and
•a new Compendium of Foreign Exchange Regulations (Compendio de Normas de Cambios Internacionales) would be applied
The main objective of these amendments, as declared by the Central Bank of Chile, is to facilitate movement of capital in and out of Chile and to encourage foreign investment.
In connection with the change in policy, the Central Bank of Chile eliminated the following restrictions:
•a reserve requirement with the Central Bank of Chile for a period of one year (this mandatory reserve was imposed on foreign loans and funds brought into Chile to purchase shares other than those acquired in the establishment of a new company or in the capital increase of the issuing company; the reserve requirement was gradually decreased from 30% of the proposed investment to 0%);
•the requirement of prior approval by the Central Bank of Chile for certain operations;
•mandatory return of foreign currency to Chile;
•mandatory conversion of foreign currency into Chilean pesos;
Under the new regulations, only the following limitations apply to these operations:
•the Central Bank of Chile must be provided with information related to certain operations; and
•certain operations must be conducted with the Formal Exchange Market.
The Central Bank of Chile also eliminated Chapter XXVI of the Compendium of Foreign Exchange Regulations, which regulated the establishment of an ADR facility by a Chilean company. Pursuant to the new rules, it is no longer necessary to seek the Central Bank of Chile’s prior approval in order to establish an ADR facility or to enter into a foreign investment contract with the Central Bank of Chile.
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However, all contracts executed under the provisions of former Chapter XXVI (including the foreign investment contract among LATAM Airlines Group, the Central Bank of Chile and the ADS depositary, or the “Foreign Investment Contract”), remained in full force and effect and continued to be governed by the provisions, and continued to be subject to the restrictions, set forth in former Chapter XXVI at the time of its abrogation. Our Foreign Investment Contract guaranteed ADS investors access to the Formal Exchange Market to convert amounts from Chilean pesos into U.S. dollars and repatriate amounts received with respect to deposited common shares or common shares withdrawn from deposit or surrender of ADRs (including amounts received as cash dividends and proceeds from the sale in Chile of the underlying common shares and any rights arising from them).
On May 10, 2007, the Board of the Central Bank of Chile resolved to interpret the regulations regarding the former Chapter XXVI in connection with the access granted to the Formal Exchange Market. These regulations allowed entities that carry out capital increases by means of the issuance of cash shares before August 31, 2007 to apply the aforementioned regulation to their capital increases, but only once and only if those shares can be fully subscribed and paid by August 31, 2008, among other conditions. Consequently, capital increases carried out after August 31, 2007 will have no guaranteed access to the Formal Exchange Market.
On October 17, 2012, the Central Bank of Chile, the depositary and LATAM Airlines Group entered into a termination agreement in respect of LATAM’s existing foreign investment contract. ADR holders were notified about this termination in accordance with Section 16 of the Deposit Agreement. Upon termination of the foreign investment contract, holders of ADSs and the depositary no longer have guaranteed access to the Formal Exchange Market. Currently, the ADS facility is governed by Chapter XIV of the Compendium on “Regulations applicable to Credits, Deposits, Investments and Capital Contributions from Abroad.” According to Chapter XIV, the establishment or maintenance of an ADS facility is regarded as an ordinary foreign investment, and it is not necessary to seek the Central Bank of Chile’s prior approval in order to establish an ADS facility. The establishment or maintenance of an ADS facility only requires that the Central Bank of Chile be informed of the transaction, and that the foreign currency transactions related thereby be conducted through the Formal Exchange Market.
On January 25, 2024, the Central Bank of Chile approved, effective as of January 1, 2026, a new Compendium of Foreign Exchange Regulations, which basically reformulates and simplifies current regulations, with a new exchange information system, maintaining in general the current monetary policy and exchange regime.
Investment in Our Shares and ADRs
Currently, investments made by foreign investors in shares of our common stock are subject to the following requirements:
•any foreign investor acquiring shares of our common stock who brought funds into Chile for that purpose must bring those funds through an entity participating in the Formal Exchange Market;
•any foreign investor acquiring shares of our common stock to be converted into ADSs or deposited into an ADR program who brought funds into Chile for that purpose must bring those funds through an entity participating in the Formal Exchange Market;
•in both cases, the entity of the Formal Exchange Market through which the funds are brought into Chile must report such investment to the Central Bank of Chile;
•all remittances of funds from Chile to the foreign investor upon the sale of the acquired shares of our common stock or from dividends or other distributions made in connection therewith must be made through the Formal Exchange Market;
•all remittances of funds from Chile to the foreign investor upon the sale of shares underlying ADSs or from dividends or other distributions made in connection therewith must be made through the Formal Exchange Market; and
•all remittances of funds made to the foreign investor must be reported to the Central Bank of Chile by the intervening entity of the Formal Exchange Market.
When funds are brought into Chile for a purpose other than to acquire shares to convert them into ADSs or deposit them into an ADR program and subsequently such funds are used to acquire shares to be converted into ADSs or deposited into an ADR program such investment must be reported to the Central Bank of Chile by the custodian within 10 days following the end of each month within which the custodian is obligated to deliver periodic reports to the Central Bank of Chile.
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When funds to acquire shares of our common stock or to acquire shares to convert them into ADSs or deposit them into an ADR program are received by us abroad (i.e., outside of Chile), such investment must be reported to the Central Bank of Chile directly by the foreign investor or by an entity participating in the Formal Exchange Market within ten days following the end of the month in which the investment was made.
All payments in foreign currency in connection with our shares of common stock or ADSs made from Chile through the Formal Exchange Market must be reported to the Central Bank of Chile by the entity participating in the transaction. In the event there are payments made outside of Chile, the foreign investor must provide the relevant information to the Central Bank of Chile directly or through an entity of the Formal Exchange Market within the first ten calendar days of the month following the date on which the payment was made.
There can be no assurance that additional Chilean restrictions applicable to the holders of ADSs, the disposition of shares of our common shares underlying ADSs or the conversion or repatriation of the proceeds from such disposition will not be imposed in the future, nor can we assess the duration or impact of such restriction if imposed.
This summary does not purport to be complete and is qualified by reference to Chapter XIV of the Central Bank of Chile’s Foreign Exchange Regulations, a copy of which is available in Spanish and English versions at the Central Bank’s website at www.bcentral.cl.
Voting Rights
Holders of our ADSs, which represent common shares, may instruct the depositary to vote the shares underlying their ADRs. If we ask holders for instructions, the depositary will notify such holders of the upcoming vote and arrange to deliver our voting materials to such holders. The materials will describe the matters to be voted on and explain how holders may instruct the depositary to vote the shares or other deposited securities underlying their ADSs as they direct by a specified date. For instructions to be valid, the depositary must receive them on or before the date specified as “Vote Cut-Off Date.” The depositary will try, as far as practical, subject to Chilean law and the provisions of our by-laws, to vote or to have its agents vote the shares or other deposited securities as holders instruct. Otherwise, holders will not be able to exercise their right to vote unless they withdraw the shares. However, holders may not know about the meeting far enough in advance to withdraw the shares. We will use our best efforts to request that the depositary notify holders of upcoming votes and ask for their instructions.
If the depositary does not receive voting instructions from a holder by the specified date, it will consider such holder to have authorized and directed it to give a discretionary proxy to a person designated by our board of directors to vote the number of deposited securities represented by such holder’s ADSs. The depositary will give a discretionary proxy in those circumstances to vote on all questions to be voted upon unless we notify the depositary that:
•we do not wish to receive a discretionary proxy;
•we think there is substantial opposition to the particular question; or
•we think the particular question would have an adverse impact on our shareholders.
The depositary will only vote or attempt to vote as such holder instructs or as described above.
We cannot assure holders that they receive the voting materials in time to ensure that they can instruct the depositary to vote their shares. This means that holders may not be able to exercise their right to vote and there may be nothing they can do if their shares are not voted as they requested.
Exchange Rates
Prior to 1989, Chilean law permitted the purchase and sale of foreign exchange only in those cases explicitly authorized by the Central Bank of Chile. The Central Bank Act liberalized the rules that govern the ability to buy and sell foreign currency. The Central Bank Act empowers the Central Bank of Chile to determine that certain purchases and sales of foreign currency specified by law must be carried out exclusively in the Formal Exchange Market, which is made up of the banks and other entities authorized by the Central Bank of Chile. All payments and distributions with respect to the ADSs must be conducted exclusively in the Formal Exchange Market.
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For purposes of the operation of the Formal Exchange Market, the Central Bank of Chile sets a reference exchange rate (dólar acuerdo). The Central Bank of Chile resets the reference exchange rate monthly, taking internal and external inflation into account, and adjusts the reference exchange rate daily to reflect variations in parities between the Chilean peso, the U.S. dollar, the Japanese yen and the European euro.
The observed exchange rate (dólar observado) is the average exchange rate at which transactions were actually carried out in the Formal Exchange Market on a particular day, as certified by the Central Bank of Chile on the next banking day.
In order to keep fluctuations in the average exchange rate within certain limits, the Central Bank of Chile has in the past intervened by buying or selling foreign currency on the formal exchange market. In September 1999, the Central Bank of Chile decided to limit its formal commitment to intervene and decided to exercise it only under extraordinary circumstances, which are to be announced in advance. The Central Bank of Chile also committed to provide periodic information about the levels of its international reserves.
Purchases and sales of foreign exchange effectuated outside the Formal Exchange Market are made through the Informal Exchange Market (Mercado Cambiario Informal). There are no limits on the extent to which the rate of exchange in the Informal Exchange Market can fluctuate above or below the observed exchange rate.
Although our results of operations have not been significantly affected by fluctuations in the exchange rates between the peso and the U.S. dollar because our functional currency is the U.S. dollar, we are exposed to foreign exchange losses and gains due to exchange rate fluctuations. Even though the majority of our revenues are denominated in or pegged to the U.S. dollar, the Chilean government’s economic policies affecting foreign exchange and future fluctuations in the value of the peso against the U.S. dollar could adversely affect our results of operations and an investor’s return on an investment in ADSs.
E.Taxation
Chilean Tax

The following discussion relates to Chilean income tax laws presently in force, including Rulings No. 324 of January 29, 1990, and No. 3,708 of October 1, 1999, of the Chilean Servicio de Impuestos Internos (“Chilean IRS”) and other applicable regulations and rulings, all of which are subject to change. The discussion summarizes the principal Chilean income tax consequences of an investment in the ADSs or common shares by a person who is neither domiciled in, nor a resident of, Chile or by a legal entity that is incorporated abroad not organized under the laws of Chile and does not have a branch or a permanent establishment located in Chile (such an individual or entity is referred to herein as a “Foreign Holder”). For purposes of Chilean tax law, an individual holder is (i) a resident of Chile if such person remains in Chile, whether continuously or not, for a period or periods exceeding a total of 183 days, within any twelve-month period; and/or (ii) domiciled in Chile if such person resides in Chile with the actual or presumptive intent of staying in Chile (such intention to be primarily evidenced by circumstances of an economic nature such as if Chile is the place in which he or she develops the activity that generates most of his/her income or if it is the country in which most of his/her main business interests are located). The discussion is not intended as tax advice to any particular investor, which can be rendered only in light of that investor’s particular tax situation.

Under Chilean law, provisions contained in statutes such as tax rates applicable to foreign investors, the computation of taxable income for Chilean purposes and the manner in which Chilean taxes are imposed and collected may only be amended by another statute. In addition, the Chilean tax authorities enact rulings and regulations of either general or specific application and interpret the provisions of Chilean tax law. Chilean tax may not be assessed retroactively against taxpayers who act in good faith relying on such rulings, regulations, and interpretations, but Chilean tax authorities may change these rulings, regulations, and interpretations prospectively.

On December 19, 2023, an income tax treaty between the United States and Chile (Convention for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion or “Convention”) entered into force. With respect to taxes withheld at the source of income, the Convention will have effect for amounts paid or credited on or after February 1, 2024. For all other taxes, the Convention will have effect for taxable periods beginning on or after January 1, 2024. Some of the main implications of the Convention are:

•Generally reduces rates of withholding taxes.

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•Generally eliminates withholding tax in the source country on service payments.

•Withholding tax rates on royalties will be limited to 2% or 10%.

•As a general rule, capital gains of a resident may be taxed in both countries, although reduced rates or exemptions from one country’s tax may apply to gains derived by a resident of the other country, depending on the type of asset disposed of. In the case of shares or other rights or interests representing the capital of a company resident in a country, 16% is the maximum rate allowed to be imposed by that country on a resident of the other country who alienates the shares or other rights or interests, if the seller previously owned shares representing no more than 50% of the capital of the company (and in the case of alienators of other rights, rights previously owned by the seller represented less than 20% of the capital). Exemptions for pension funds and institutional investors are applicable. Likewise, tax exemptions apply to the sale of shares with stock market presence, being taxed only in the taxpayer’s country of residence when certain requirements are met.

•It does not preclude the United States from taking payments from Chilean residents into account in computing the “Base Erosion Anti-abuse Tax” (known as the “BEAT”) of a U.S. taxpayer.

Additionally, on December 18, 2023, the government presented before the Congress a bill that creates a Register of Beneficial Ownership. Such registry will contain information of final beneficiaries of legal persons, investment funds, and other entities without legal personality, incorporated or domiciled in Chile, or with any type of permanent establishment in Chile. The bill is currently being reviewed by the Senate pursuant to the first phase of the constitutional process.

Finally, on October 24, 2024, Law 21,713 was enacted to align tax compliance regulations with international standards of modern taxation and to increase tax collection by reducing the compliance gap. The provisions of this law came into effect on November 1, 2024, notwithstanding specific effective dates established by the law for certain provisions. Its goal is to finance structural reforms to the pension system, enhance public safety, and strengthen institutions. Among other provisions, this law includes: (i) changes to the rules on corporate reorganizations and the assessment powers of the Chilean Internal Revenue Service, including the legal recognition of international reorganizations and the requirements for the Chilean Internal Revenue Service’s powers of appraisal to not apply; (ii) amendments to the application of the general anti-avoidance rules (“GAAR”), maintaining a judicial procedure but including a stage before the Executive Committee, a newly created body responsible for recommending whether the GAAR should be applied or not; (iii) the creation of an anonymous whistleblower mechanism for investigations into acts constituting tax offenses; (iv) changes to the controlled foreign corporation rules in Article 41 G of the Chilean Income Tax Law; (v) modifications to the requirements for qualifying as a “preferential tax regime” under Article 41 H of the Chilean Income Tax Law; and (vi) the introduction of a new voluntary disclosure procedure to declare and pay taxes on undeclared assets and income located abroad.

Cash Dividends and Other Distributions

Under the Partially Integrated Regime, cash dividends we pay with respect to the ADSs or common shares held by a Foreign Holder will be subject to a 35% Chilean withholding tax, which we withhold and pay over to the Chilean tax authorities (the “Withholding Tax”). A credit against the Withholding Tax is available based on the corporate income tax rate of the year of distribution and provided a sufficient balance of accumulated corporate income tax credits is available. These credits correspond to corporate income tax we actually paid on the accumulated income (referred to herein as the “First Category Tax”). However, this credit does not reduce the Withholding Tax on a one-for-one basis because it also increases the base on which the Withholding Tax is imposed. In addition, if we distribute less than all of our distributable income, the credit for First Category Tax we pay is proportionately reduced. If we register net income and a tax loss, no credit against the Withholding Tax may be available.

The Partially Integrated Regime reduces the amount of First Category Tax creditable against the Withholding Tax for certain Foreign Holders. As a general rule, only 65% of the First Category Tax credit will actually offset the Withholding Tax. However, if a tax treaty is in place between Chile and the country of domicile of a Foreign Holder and such Foreign Holder is entitled to treaty benefits in relation to the income, the full First Category Tax credit will continue to be available to be offset against the Withholding Tax. Additionally, the full First Category Tax credit will also be available to offset the Withholding Tax if, under the same circumstances, the Foreign Holder is a resident in a country that has a tax treaty with Chile signed before January 1, 2020, even if not in force, until December 31, 2026.

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In general, the example below illustrates the effective Withholding Tax burden on a cash dividend received by a Foreign Holder assuming a Withholding Tax rate of 35%, a First Category Tax rate of 27% and a distribution of 30% of the consolidated net income of the Company after payment of the First Category Tax:
Foreign Holder in Treaty
Country		 Foreign Holder in Non-Treaty
Country
The Company’s taxable income 100.00 100.00
First Category Tax (27% of Ch$100). (27.00) (27.00)
Net distributable income 73.00 73.00
Dividend distributed (*) 21.90 21.90
First category increase 8.10 8.10
Amount subject to Withholding Tax (**) 30.00 30.00
Withholding Tax (10.50) (10.50)
Credit for First Category Tax 8.10 8.10
Add back 35% of the First Category Tax N/A (2.83)
Net tax withheld (2.40) (5.24)
Net dividend received 19.50 16.66
Effective dividend withholding rate 10.96% 23.90%
______________________________________________________
(*)30% of net distributable income.
(**)The dividend of Ch$21.90 grossed up with the First Category Tax credit of Ch$8.10.

The effective rate of Withholding Tax to be imposed on dividends we pay will depend on the First Category Tax rate applicable in the year of distribution and on the balance of First Category Income Tax credits accumulated by the Company. The First Category Tax rate is 27% for 2018 and following years. The First Category Tax credits generated as of 2017, will be allocated first. Once the balance of First Category Tax credits generated as of 2017 are exhausted, the First Category Tax credits accumulated until December 31, 2016 will be used. In that event the First Category Tax credit available against the Withholding Tax will not correspond to the First Category Tax rate of the year of distribution but to the average rate of First Category Tax credits accumulated until December 31, 2016. This average rate will be determined by dividing the aggregate First Category Tax Credits accumulated until December 31, 2016 by the aggregate retained taxable profits accumulated at the same date. The First Category Tax credits accumulated until December 31, 2016 are not subject to the First Category Tax Credit restitution irrespective of whether a tax treaty is in place with the country of the Foreign Holder or not.

The First Category Tax credits accumulated until December 31, 2016 correspond to the First Category Tax we actually paid on the income generated in a given year. For earnings generated from 1991 until 2001, the First Category Tax rate was 15%. The rate was 16.0% in 2002, 16.5% in 2003, 17% from 2004 until 2010, 20% from 2011 until 2013, 21% in 2014, 22.5% in 2015, 24% in 2016 and 25.5% in 2017 for companies subject to the Partially Integrated Regime.

In the event that the accumulated First Category Tax credits are not sufficient to cover any particular dividend, we will generally withhold tax from the dividend at the full 35% rate.

Dividend distributions made in kind would be subject to the same Chilean tax rules as cash dividends based on the fair market value of the relevant assets. Stock dividends and the distribution of preemptive rights are not subject to Chilean taxation.

Capital Gains

Gains from the sale or other disposition by a Foreign Holder of ADRs evidencing ADSs outside of Chile will not be subject to Chilean taxation. The deposit and withdrawal of common shares in exchange for ADRs will not be subject to any Chilean taxes.
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Gains realized on a sale or disposition of common shares by a Foreign Holder (as distinguished from sales or exchanges of ADRs evidencing ADSs representing such common shares) may be subject to a 35% Withholding Tax. However, a gain not exceeding 10 Annual Tax Units (app US$8,032.5 as of January 14, 2025) recognized by a Foreign Holder without taxable presence in Chile in a sale to a non-related buyer will not be taxable. The proceeds of the sale or disposition are subject to a withholding of 35% applicable on the gain. If the gain subject to taxation cannot be determined, the Foreign Holder is subject to a provisional withholding of 10% of the total sales price, without any deduction, when the amounts are paid to, credited to, accounted for, put at the disposal of, or corresponding to, the Foreign Holder. The Foreign Holder must file an annual tax return to pay any differences between the amounts withheld and the final applicable tax, or to request a refund if the amounts were withheld in excess of the final tax.

Notwithstanding the above, Article 107 of the Chilean Income Tax Law provides for a 10% sole tax on capital gains arising from the sale of shares of listed companies traded in the stock markets (except for capital gains obtained by “institutional investors” –as defined in Article 4 bis (d) of the Chilean Securities Market Act–, whether domiciled or resident in Chile or abroad, which will be tax exempt if the legal requirements are met). In general terms, the referred provision mandates that in order to qualify for this special tax treatment: (i) the shares must be of a publicly held stock corporation with a “high trading presence” status in the Chilean Stock Exchanges; (ii) the sale must be carried out in a Chilean Stock Exchange authorized by the CMF, or in a tender offer subject to Chapter XXV of the Chilean Securities Market Act or as the consequence of a contribution to a fund as regulated in Article 109 of the Chilean Income Tax Law; (iii) the shares which are being sold must have been acquired on a Chilean Stock Exchange, or in a tender offer subject to Chapter XXV of the Chilean Securities Market Act, or in an initial public offering (due to the creation of a company or to a capital increase), or due to the exchange of convertible publicly offered securities, or due to the redemption of a fund’s quota as regulated in Article 109 of the Chilean Income Tax Law; and (iv) the shares must have been acquired after April 19, 2001.

The buyer or stockbroker or securities agent acting on behalf of the Foreign Holder shall withhold the amount of the sole tax at the time the sales price is paid, remitted, credited into account or placed at the disposal of the Foreign Holder. The withholding shall be made at a 10% rate on the taxable gain, unless the buyer or stockbroker or securities agent acting on behalf of the Foreign Holder does not have sufficient information to determine such capital gain, in which case the withholding shall be made at a provisional rate of 1% on the total price, without any deduction. The Foreign Holder must file an annual tax return to pay any differences between the withheld amounts and the final applicable tax, or to request a refund if the first were made in excess of the final tax.

According to Ruling No. 1,480, dated August 22, 2014, the Chilean IRS confirmed that capital gains stemming from the sale of shares with high stock market presence acquired through the exchange of American Depositary Receipts (ADRs) for shares is subject to the same tax regime as the gain on the sale of any stock with high stock market presence, which according to the rules in force as of such date, were not subject to taxes in Chile. Thus, according to the recent modifications, such ruling should imply that they would be subject to the sole tax at a rate of 10%. Such reduced rate is applicable provided that the ADRs comply with the requirements established by the CMF for the public offering of securities in Chile (i.e. if the ADRs are registered in the Foreign Securities Registry of the CMF, or their registration has been exempted by the CMF under a cooperation agreement signed with regulators of foreign markets), and the underlying shares have been registered in the Securities Registry of the CMF and on a Chilean Stock Exchange. According to General Ruling No. 327, issued by the CMF on January 17, 2012, shares are considered to have a high presence in the stock exchange when they:

● are registered in the Securities Registry;
● are registered in a Chilean Stock Exchange; and
● meet at least one of the following requirements:
● have an adjusted presence equal to or above 25%;
● have a Market Maker (this requirement is limited under Law No. 21,420).

To calculate the adjusted presence of a particular share, the aforementioned regulation first requires a determination of the number of days in which the operations regarding the stock exceeded, in Chilean pesos, the equivalent of 1,000 UF (app US$38,140.5 as of January 14, 2025) within the previous 180 business days of the stock market. That number must then be divided by 180, multiplied by 100, and expressed in a percentage value.
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To meet the “Market Maker” requirement the issuer of the shares must execute a written contract with a stockbroker incorporated in Chile that fulfills some additional requirements. Law No. 21,210 modified this provision in those cases where the high stock market presence is given exclusively by virtue of a Market Maker. In such cases, the capital gain tax exemption would apply only for the term of one year from the first public offering of the securities.

The tax basis of common shares received in exchange for ADRs will be the acquisition value of the common shares on the date of exchange duly adjusted for local inflation. For purposes of Ruling No. 324, dated January 29, 1990, issued by the Chilean IRS, the valuation procedure set forth in the deposit agreement, which values the shares that are being exchanged at the highest reported sales price at which they trade on the stock exchange on the day on which the transfer of such shares is recorded on the books of the company’s share registrar, will determine the Foreign Holder’s acquisition value for this purpose. In the case where the sale of the shares is made on a day that is different from the date on which the exchange is recorded, capital gains subject to taxation in Chile may be generated. Notwithstanding the foregoing, following the criteria of Ruling No. 3708, dated October 1, 1999, issued by the Chilean IRS, the deposit agreement provides that in the event that the exchanged shares are sold by the Foreign Holder on a Chilean stock exchange on the same day on which the transfer is recorded on the company’s share registrar or within two Chilean business days prior to the date on which the sale is recorded on those books, the acquisition value of such exchanged shares shall be the price registered in the invoice issued by the stock broker that participated in the sale transaction.

Notwithstanding the above-mentioned tax exemption under Article 107 of the Chilean Income Tax Law in benefit of institutional investors which is still applicable, a previous specific capital gain tax exemption for “foreign institutional investors” such as mutual funds and pension funds was repealed as from May 1, 2014, by Law 20,712. However, the law includes a grandfathering provision for shares acquired before May 1, 2014. This provision establishes an exemption on the capital gain obtained in the sale of shares that are publicly traded and have a high presence in a stock exchange when the sale is made by a foreign institutional investor, provided that the sale is made in a local stock exchange or in a public tender in accordance with the provisions of the Securities Market Act, or in the redemption of fund quotas, and the shares were acquired before May 1, 2014.

Pursuant to the regulations of the grandfathering rule, to qualify for the exemption, the taxpayer must be incorporated or formed outside of Chile, not have a domicile in Chile, and must qualify as a foreign institutional investor according to the requirements set forth in the law. In addition, the foreign institutional investor must not directly or indirectly participate in the control of the corporations issuing the shares it invests in, nor possess or participate directly or indirectly in 10% or more of the capital or the profits of such corporations. Furthermore, the foreign institutional investor must execute a written contract with a bank, or a stockbroker incorporated in Chile. In this contract, the bank or stockbroker must undertake to execute purchase and sale orders, verify the applicability of the tax exemption or tax withholding, and inform the Chilean IRS of the investors it works with and the transactions it performs. Finally, the foreign institutional investor must register with the Chilean IRS by means of a sworn statement issued by such bank or stockbroker.

The date of acquisition of the ADSs is considered to be the date of acquisition of the shares for which the ADSs are exchanged.

It should be noted that the single 10% tax indicated above with respect to the disposal of shares with stock market presence would not be applicable for capital gains obtained by taxpayers domiciled in the U.S. eligible for the benefits of the Convention who meet all the requirements for exemption. In this regard, the Convention sets out that earnings obtained by a resident of a state that has ratified the Convention (a “Contracting State”) and the disposal of shares in a company resident in the other Contracting State with a stock market presence on a recognized stock exchange located in in that other Contracting State, may be taxed only in the country where the transferor resides if the following requirements are met: (a) the shares are sold on a stock exchange recognized in the another Contracting State or in a takeover bid process of shares in accordance with applicable law, and (b) such shares have been previously acquired in (i) a stock exchange recognized in that other Contracting State, (ii) in a legally regulated takeover bid process, (iii) in a primary placement of shares, (iv) upon the incorporation of the company or of a subsequent capital increase, or (v) in an exchange of bonds convertible into shares.

Additionally, exemptions or reduced rates of withholding could apply under other double tax treaties entered into by Chile, provided the respective requirements are met.

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For Chilean tax purposes and to the extent we issue any preemptive rights relating to common shares or ADSs, the receipt of such preemptive rights by a Foreign Holder pursuant to a rights offering is a nontaxable event. In addition, there are no Chilean income tax consequences to Foreign Holders upon the exercise or the lapse without value of the preemptive rights relating to common shares or ADSs.

Any gain on the sale, exchange or transfer of any preemptive rights relating to ADSs by a Foreign Holder is not subject to taxes in Chile. Any gain on the sale, exchange or transfer of preemptive rights relating to common shares by a Foreign Holder is generally subject to a 35% Withholding Tax in Chile.

Other Chilean Taxes

Please note that there should not be Chilean inheritance, gift or succession taxes applicable to the ownership, transfer or disposition of ADSs by a Foreign Holder, but such taxes generally will apply to the transfer at death or by gift of the common shares by a Foreign Holder. However, in the inheritance of a Foreign Holder, assets located abroad may only be subject to inheritance, gift or succession taxes when they have been acquired with resources originating in Chile. There are no Chilean stamp, issue, registration or similar taxes or duties payable by Foreign Holders of ADSs or common shares.

Withholding Tax Certificates

Upon request, we will provide to Foreign Holders appropriate documentation evidencing the payment of the Withholding Tax (net of the applicable First Category Tax credit).

Material United States Federal Income Tax Considerations

This section describes the material U.S. federal income tax consequences to a U.S. holder (as defined below) of owning common shares or ADSs. It applies to you only if you hold your common shares or ADSs as capital assets for tax purposes. This section does not purport to be a complete analysis or listing of all potential U.S. federal income tax considerations that may be relevant to U.S holders with respect to their ownership and disposition of ADSs or common shares. Accordingly, it is not intended to be, and should not be construed as, tax advice. This section does not apply to you if you are a member of a special class of holders subject to special rules, including:

● a dealer in securities,
● a trader in securities that elects to use a mark-to-market method of accounting for securities holdings,
● a tax-exempt organization,
● a financial institution,
● a regulated investment company,
● a real estate investment trust,
● a life insurance company,
● a person liable for alternative minimum tax,
● a person that directly, indirectly or constructively owns 10% or more of the vote or value of our stock,
● a person that holds common shares or ADSs as part of a straddle or a hedging or conversion transaction,
● a person that purchases or sells common shares or ADSs as part of a wash sale for tax purposes,
● a U.S. holder (as defined below) whose functional currency is not the U.S. dollar,
● a U.S. expatriate,
● a person who acquired our ADSs or common shares pursuant to the exercise of any employee share option or otherwise as compensation, or
● a partnership or other pass-through entity or arrangement treated as such (or a person holding our ADSs or common shares through a partnership or other pass-through entity or arrangement treated as such).
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If you are a member of a special class of holders subject to special rules, you should consult your tax advisor with regard to the U.S. federal income tax treatment of an investment in the common shares or ADSs. Moreover, this summary does not address the U.S. federal estate, gift, or the Medicare contribution tax applicable to net investment income of certain non-corporate U.S. holders or alternative minimum tax considerations, or any U.S. state, local, or non-U.S. tax considerations of the acquisition, ownership and disposition of common shares and ADSs.

This section is based on the Internal Revenue Code of 1986, as amended (the “Code”), its legislative history, existing and proposed Treasury regulations, published rulings and court decisions, all as of the date hereof. These laws are subject to change, possibly on a retroactive basis. In addition, obligations of the United States under the Convention may affect the tax liability imposed by the Code. With respect to taxes withheld at source, the Convention has effect for amounts paid or credited on or after February 1, 2024. For all other taxes, the Convention has effect for taxable periods beginning on or after January 1, 2024.

The laws on which this section is based are subject to differing interpretations. No ruling has been sought from the U.S. Internal Revenue Service (the “U.S. IRS”) with respect to any U.S. federal income tax consequences described below, and there can be no assurance that the U.S. IRS or a court will not take a contrary position.

In addition, this section is based in part upon the representations of the Depositary and the assumption that each obligation in the Deposit Agreement and any related agreement will be performed in accordance with its terms.

If an entity that is treated as a partnership for U.S. federal income tax purposes holds the common shares or ADSs, the U.S. federal income tax treatment of a partner will generally depend on the status of the partner and the tax treatment of the partnership. A partner in a partnership holding the common shares or ADSs should consult its tax advisor with regard to the U.S. federal income tax treatment of an investment in the common shares or ADSs.

For purposes of this summary, a “U.S. holder” is a beneficial owner of common shares or ADSs that is a citizen or resident of the United States or a U.S. domestic corporation or that otherwise is subject to U.S. federal income taxation on a net income basis in respect of such common shares or ADSs.

ADSs

As a result of our Chapter 11 Restructuring, LATAM was delisted from the NYSE on June 22, 2020. Following the re-IPO, our ADSs were relisted on the NYSE on July 25, 2024 and are available for trading. In general, and taking into account the earlier assumptions, for U.S. federal income tax purposes, if you hold ADRs evidencing ADSs, you will be treated as the beneficial owner of the common shares represented by those ADRs. Exchanges of common shares for ADRs, and ADRs for common shares, generally will not be subject to U.S. federal income tax.

The U.S. Treasury has expressed concerns that intermediaries in the chain of ownership between the holder of an ADS and the issuer of the security underlying the ADS may be taking actions that are inconsistent with the beneficial ownership of the underlying security. Accordingly, the creditability of any foreign taxes paid and the availability of the reduced tax rate for dividends received by certain non-corporate U.S. holders (as discussed below), could be affected by actions taken by intermediaries in the chain of ownership between the holders of ADSs and us if as a result of actions the holders of ADSs are not properly treated as beneficial owners of the underlying common shares.

Taxation of Dividends

Under the U.S. federal income tax laws, and subject to the passive foreign investment company (“PFIC”) rules discussed below, if you are a U.S. holder, the gross amount of any dividend we pay out of our current or accumulated earnings and profits (as determined for U.S. federal income tax purposes) is subject to U.S. federal income taxation. Distributions in excess of current and accumulated earnings and profits, as determined for U.S. federal income tax purposes, will be treated as a non-taxable return of capital to the extent of your adjusted tax basis in the common shares or ADSs, as the case may be, and thereafter as capital gain from the sale or exchange of the common shares or ADSs, as the case may be. However, we do not expect to calculate earnings and profits in accordance with U.S. federal income tax principles. Accordingly, you should expect to generally treat any distributions we make as dividend income for U.S. federal income tax purposes.

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If you are a U.S. holder who is an individual, trust, or estate, then dividends paid on the ADSs or common shares that constitute qualified dividend income will be taxable to you at the preferential rates applicable to long-term capital gains. Dividends paid on the ADSs or common shares will be treated as qualified dividend income if:

● (a) the ADSs or common shares, as applicable, are readily tradable on an established securities market in the United States; or (b) we are eligible for benefits of a comprehensive tax treaty with the United States, which the U.S. Treasury determines is satisfactory for this purpose, which includes an exchange of information program;
● we were not, in the year prior to the year in which the dividend was paid, and are not, in the year in which the dividend is paid, a PFIC; and
● you hold the ADSs or common shares, as applicable, for more than 60 days during the 121-day period beginning 60 days before the ex-dividend date and meet other holding period requirements; and you are not under an obligation to make related payments with respect to positions in substantially similar or related property.

We believe that our common shares and ADSs should not be treated as stock of a PFIC for either 2023 or 2024. See additional discussion under the “PFIC Rules,” below.

Following the re-IPO, the ADSs are currently listed on the NYSE, and should qualify as readily tradable on an established securities market in the United States so long as they are so listed. Accordingly, we expect that dividends we pay with respect to the ADSs will be qualified dividend income (provided that the other conditions listed above are met). We may, also be eligible for benefits of the Convention and the U.S. Secretary of the Treasury has determined that the Convention is satisfactory for purposes of the qualified dividend income definition. If we are so eligible and the U.S. Secretary of the Treasury determines that the Convention is satisfactory for purposes of the qualified dividend income definition, dividends received by an individual, trust, or estate U.S. holder may be subject to taxation at the preferential rates applicable to long-term capital gains if our common shares and ADSs are not treated as stock of a PFIC for the year in which the dividend is paid or the preceding year. Corporate U.S. holders are taxed on dividend income at the U.S. federal corporate income tax rate whether or not the dividend income is qualified dividend income.

The dividend is taxable to you when you receive, in the case of common shares, or the Depositary receives, in the case of ADSs, the dividend, actually or constructively. The dividend will not be eligible for the dividends-received deduction generally allowed to U.S. domestic corporations in respect of dividends received from other U.S. domestic corporations or certain foreign corporations. The amount of the dividend distribution that you must include in your income as a U.S. holder will be the U.S. dollar value of the Chilean pesos payments made, determined at the spot Chilean pesos/U.S. dollar rate on the date the dividend distribution is includible in your income, regardless of whether the payment is in fact converted into U.S. dollars. Generally, any gain or loss resulting from currency exchange fluctuations during the period from the date you include the dividend payment in income to the date you convert the payment into U.S. dollars will be treated as ordinary income or loss and will not be eligible for the special tax rate applicable to qualified dividend income. The gain or loss generally will be income or loss from sources within the United States for foreign tax credit limitation purposes. The amount of any distribution of property other than cash will be the fair market value of such property on the date of distribution.

    The amount of dividend income includes the amount of any Chilean tax withheld from the dividend payment even though you do not in fact receive such amount. Subject to generally applicable limitations and conditions under the Code, Chilean tax withheld and paid over to the Chilean tax authorities (after taking into account the credit for the First Category Tax, when it is available) may be creditable or deductible against your U.S. federal income tax liability. These generally applicable limitations and conditions include requirements adopted by the U.S. IRS in December 2021 and any Chilean withholding tax will need to satisfy these requirements in order to be eligible to be a creditable tax for a U.S. holder. If you either (i) are eligible for, and properly elect, the benefits of the Convention, or (ii) consistently elect to apply a modified version of these rules under temporary guidance and comply with specific requirements set forth in such guidance, the Chilean withholding tax on dividends will be treated as meeting the requirements and therefore as a creditable tax. In the case of all other U.S. holders, the application of the requirements to the Chilean withholding tax on dividends is uncertain, and we have not determined whether these requirements have been met. If the Chilean withholding tax on dividends is not creditable for you or if you do not elect to claim a foreign tax credit for any foreign income taxes paid or accrued in the same taxable year, you may be able to deduct the Chilean withholding tax in computing your taxable income for U.S. federal income tax purposes.
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Dividends will generally be income from sources outside the United States and, for U.S. holders that elect to claim foreign tax credits, will, depending on your circumstances, generally be “passive category income” for foreign tax credit purposes. The availability and calculation of foreign tax credits and deductions for foreign taxes depend on your particular circumstances and involve the application of complex rules to those circumstances. The temporary guidance discussed above also indicates that the Treasury and the U.S. IRS are considering proposing amendments to the December 2021 regulations and that the temporary guidance can be relied upon until additional guidance is issued that withdraws or modifies the temporary guidance. U.S. holders should consult their tax advisors concerning the application of these rules in their particular circumstances.

Taxation of Capital Gains

Subject to the PFIC rules discussed below, if you sell or otherwise dispose of your common shares or ADSs, you will generally recognize capital gain or loss for U.S. federal income tax purposes equal to the difference between the U.S. dollar value of the amount that you realize and your adjusted tax basis, in your common shares or ADSs, as determined in U.S. dollars. Capital gain of a U.S. holder who is an individual, trust, or estate, is generally taxed at preferential rates where the property is held for more than one year. The deductibility of capital losses is subject to significant limitations. You will generally not be entitled to credit any Chilean tax imposed on the sale or other disposition of the common shares or ADSs against your U.S. federal income tax liability, except in the case you either (i) are eligible for, and properly elect to claim, the benefits of the Convention, or (ii) consistently elect to apply a modified version of the U.S. foreign tax credit rules that is permitted under temporary guidance and comply with the specific requirements set forth in such guidance. Additionally, the gain or loss will generally be income or loss from sources within the United States for foreign tax credit limitation purposes. Consequently, even if the Chilean tax qualifies as a creditable tax, you may not be able to credit the tax against your U.S. federal income tax liability unless such credit can be applied (subject to generally applicable conditions and limitations) against tax due on other income treated as derived from foreign sources. However, if you are eligible for the benefits of the Convention, you may elect to treat such gain as Chilean-source gain under the Convention. If the Chilean tax is not a creditable tax or you do not claim it as a credit pursuant to the Convention, the tax would reduce the amount realized on the sale or other disposition of the common shares or ADSs even if you have elected to claim a foreign tax credit for other taxes in the same year. The temporary guidance discussed above also indicates that the Treasury and the U.S. IRS are considering proposed amendments to the December 2021 regulations and that the temporary guidance can be relied upon until additional guidance is issued that withdraws or modifies the temporary guidance. U.S holders should consult their own tax advisors regarding the application of the foreign tax credit rules to a sale or other disposition of the common shares or ADSs and any Chilean tax imposed on such sale or disposition.

If the consideration received for our common shares or ADSs is paid in foreign currency, the amount realized will generally be the U.S. dollar value of the payment received translated at the spot rate of exchange on the date of disposition (or, if the common shares or ADSs are traded on an established securities market at such time, in the case of cash-basis and electing accrual-basis U.S. holders, the settlement date). An accrual basis U.S. holder that does not elect to determine the amount realized using the spot exchange rate on the settlement date will recognize foreign currency gain or loss equal to the difference between the U.S. dollar value of the amount received based on the spot exchange rates in effect on the date of the sale or other disposition and the settlement date. A U.S. holder’s initial tax basis in our common shares or ADSs will equal the cost of such ADSs or common shares. If a U.S. holder used foreign currency to purchase our common shares or ADSs, the cost of our common shares or ADSs will be the U.S. dollar value of the foreign currency purchase price on the date of purchase. If our common shares or ADSs are treated as traded on an established securities market and the relevant U.S. holder is either a cash basis taxpayer or an accrual basis taxpayer who has made the special election described above, such holder will determine the U.S. dollar value of the cost of such common shares or ADSs by translating the amount paid at the spot rate of exchange on the settlement date of the purchase.

PFIC Rules

We believe that our common shares and ADSs should not be treated as stock of a PFIC for either 2023 or 2022 and we do not anticipate becoming a PFIC in future taxable years, but this conclusion is a factual determination that is made annually and thus may be subject to change. If we were to be treated as a PFIC, gain realized on the sale or other disposition of your common shares or ADSs would in general not be treated as capital gain. Instead, if you are a U.S. holder, unless you make a timely “mark-to-market” election electing to be taxed annually on a mark-to-market basis with respect to your common shares or ADSs, or you make a timely “qualified electing fund” election to be taxed annually on the earnings and gains of the PFIC attributable to your shares or ADSs (irrespective of distributions), you would be treated as if you had realized such gain ratably over your holding period in the common shares or ADSs and would be taxed at the highest tax rate in effect for each such year to which the gain was allocated, together with an interest charge in respect of the tax attributable to each such year except for the current year.
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In addition, distributions that you receive from us will not be eligible for the preferential tax rates applicable to qualified dividend income if we are treated as a PFIC with respect to you either in the taxable year of the distribution or the preceding taxable year, but instead will be taxable at the tax rates applicable to ordinary income, and to the extent they are treated as “excess distributions” under the PFIC rules, they will also be subject to the PFIC interest charge described above. A U.S. holder will be required to make an annual filing with the U.S. IRS if such holder holds ADSs or common shares in any year in which we are classified as a PFIC. With certain exceptions, your common shares or ADSs will continue to be treated as stock in a PFIC if we were a PFIC at any time during your holding period in your common shares or ADSs even if we no longer meet the PFIC tests in a later year.

The U.S. federal income tax rules relating to PFICs are complex. Prospective U.S. holders are urged to consult their own tax advisers with respect to the application of the PFIC rules to their investment in the common shares or ADSs.

Information Reporting and Backup Withholding

Dividends paid on, and proceeds from the sale or other disposition of, the shares or ADSs to a U.S. holder generally are subject to the information reporting requirements of the Code and may be subject to backup withholding unless the U.S. holder provides an accurate taxpayer identification number and makes any other required certification or otherwise establishes an exemption. Backup withholding is not an additional tax. The amount of any backup withholding from a payment to a U.S. holder will be allowed as a refund or credit against the U.S. holder’s U.S. federal income tax liability, provided the required information is furnished to the U.S. IRS in a timely manner.

A holder that is not a U.S. holder may be required to comply with certification and identification procedures in order to establish its exemption from information reporting and backup withholding.

Foreign Asset Reporting

Certain U.S. holders who are individuals (and certain entities) that hold an interest in “specified foreign financial assets” (which may include the common shares or ADSs) with an aggregate value in excess of U.S.$50,000 on the last day of the taxable year, or $75,000 at any time during the taxable year, are required to report information relating to such assets, currently on Form 8938, subject to certain exceptions (including an exception for stock held in accounts maintained by certain financial institutions). Penalties can apply if U.S. holders fail to satisfy such reporting requirements. U.S. holders should consult their tax advisors regarding the effect, if any, of this requirement on their ownership and disposition of common shares and ADSs.
F.Dividends and Paying Agents
Not applicable.
G.Statement by Experts
Not applicable.
H.Documents on Display
We file reports, including annual reports on Form 20-F, and other information with the SEC pursuant to the rules and regulations of the SEC that apply to foreign private issuers. Filings we make electronically with the SEC are available to the public on the Internet at the SEC’s website at www.sec.gov and at our website at http://www.latamairlinesgroup.net/financial-information/sec-filings. (This URL is intended to be an inactive textual reference only. It is not intended to be an active hyperlink to our website. The information on our website, which might be accessible through a hyperlink resulting from this URL, is not and shall not be deemed to be incorporated into this annual report.)
I.Subsidiary Information
Not applicable.
J.Annual Report to Security Holders Given the nature of its business, LATAM is exposed mainly to three types of market risk:
Not applicable.
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ITEM 11 QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS
General
•Fuel price fluctuations;
•Foreign exchange fluctuations; and
•Interest rate fluctuations.
Management assesses the level of our exposure to these risks periodically to determine which one should be hedged and the most effective mechanisms to be implemented. LATAM purchases derivative instruments in foreign markets to offset market risk exposure, typically utilizing a mix of financial and commodity derivatives. LATAM does not enter into or hold derivative contracts for trading purposes.
For more information on Market Risk, see Note 3 “Financial Risk Management” to our audited consolidated financial statements.
Risk of Fluctuations in Fuel Prices
Jet fuel price fluctuations are largely dependent on supply and demand for crude oil, OPEC decisions, refinery capacities, stock levels of crude oil, natural disasters, climatic risk and geopolitical factors.
LATAM fuel consumption for 2024 was 1,357.1 million gallons. To manage its exposure to the cost of fuel, LATAM has a hedging program based on our Fuel Hedging Policy, which is annually updated and approved by the board of directors. LATAM’s Fuel Hedging Policy aims to mitigate the liquidity risk in the short/medium term, avoiding cash and financial distress. LATAM has established four hedging zones based on advance purchase behavior, pass-through and fuel invoicing process.
Jet Fuel is not the only underlying asset that LATAM may use for hedging purposes. It may also consider derivative instruments in other underlying commodity assets such as ICE Brent, West Texas Intermediate (WTI) or NYMEX Heating Oil (HO).
LATAM has decided to use protective and non-speculative instruments to reduce the operating margin exposure. Also, LATAM will not use financial derivatives to speculate on financial markets and consequently obtain gains from these types of transactions, and will not receive premiums as cash from sold options (nevertheless LATAM could buy and sell options as a structured product).
LATAM periodically reviews its exposure with each counterparty in order to monitor its credit concentration. For more information, see “Item 3. Key Information—Risk Factors—Risks Relating to our Company—Our operations are subject to fluctuations in the supply and cost of jet fuel, which could adversely impact our business.”
During 2024, 2023, and 2022 we entered into a mix of swaps and option contracts on JET FUEL 54 USGC with investment grade rated banks. Details of the fuel hedging program are shown below:
LATAM Fuel Hedging Year
ended December 31,
2024 LATAM 2023 LATAM 2022 LATAM
Gallons Purchased / Hedged (million) 614.2  499.6  249.4 
% Total Annual Fuel Consumption 43.6  % 41.6  % 24.6  %
Combined Result of Hedges (in millions of US$ net of premiums) (18.0) 15.7  18.8 
______________________________________________________
As of December 31, 2024, the fair value of our outstanding fuel related derivative contracts was US$7.7 million (positive).
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Gains and losses on the hedging contracts outlined above are recognized as a cost of sales in the income statement when the fuel subject to the hedge is consumed. Premiums paid related to fuel derivative contracts are recorded as prepaid expenses (current assets) and recorded as an expense at the time the contract expires.
Under IFRS Accounting Standards, the fair value of the hedging derivatives is booked as a non-current asset or liability if the remaining maturity of the item is hedged for more than 12 months, and as a current asset or liability if the remaining term of the item is hedged for less than 12 months. The fair value of the derivative contracts is deferred within an equity reserve account. Please see Note 2.9 to our audited consolidated financial statements. As the current positions do not represent changes in cash flows but a variation in the exposure to the market value, the Company’s current hedge positions have no impact on income; they are booked as cash flow hedge contracts, so a variation in fuel prices has an impact on the Company’s net equity.
The following table shows the sensitivity analysis of our hedging contracts to reasonable changes in fuel prices and their effect on equity. The term used for the projection was December 31, 2025, the last maturity date of our current fuel hedge contracts. The calculations were made considering a parallel movement of US$5 per barrel in the curve of the JET futures benchmark price at the end of December 2024, 2023, 2022.
LATAM fuel price sensitivity position as of December 31
2024 LATAM
(effect on equity)		 2023 LATAM
(effect on equity)		 2022 LATAM
(effect on equity)
(millions of US$ per barrel)
HO or JET benchmark price
+5 +15.7  +10.8  +2.2 
-5 -12.8  -10.7  -2.3 
During the periods presented, the Company has not recorded amounts for ineffectiveness in the consolidated income statement pursuant to IFRS Accounting Standards principles for recognizing and measuring financial instruments.
Given the fuel hedge structure during the year 2024, which considers a portion free of hedge, a vertical drop of US$5 in the JET reference price (considered as the monthly daily average), would have had an approximate impact of US$156.7 million lower fuel cost. For the same period, a vertical increase of US$5 dollars in the JET reference price (considered as the monthly daily average), would have had an approximate impact of US$138.1 million higher fuel costs.
Risk of Variation in Foreign Exchange Rates
The functional currency of the LATAM holding company is the U.S. dollar. Since LATAM conducts its business in local currencies in several countries, it faces the risk of variations in multiple foreign currency exchange rates. Depreciation of these currencies against the U.S. dollar could have adverse effects both transactional and translational, because part of our revenues and expenses are denominated in those currencies.
At the same time, LATAM’s affiliates are exposed to foreign exchange risk, which could in turn impact the consolidated results of the Company.
The greatest exposure to future cash flows is mainly presented by the subsidiary LATAM Airlines Brazil and volatility in the R$/US$ exchange rate. LATAM Airlines Brazil’s earnings are generated largely in R$. We actively manage the R$/US$ exchange rate risk by entering into FX derivative contracts and carrying out internal operations for obtaining natural hedging.
To a lesser extent, the company also faces foreign exchange risk relating to additional currencies such as: Euro, Chilean Peso, Australian Dollars, Argentine Peso, Peruvian Nuevo Sol, Colombian Peso and New Zealand Dollars. Those currencies could be hedged as long as they turn relevant (higher exposure and volatility) to the LATAM’s market risk management. As of December 31, 2024, LATAM has US$165.0 million in notional for BRL FX Hedges.
Because of changes in the values of existing FX derivative positions do not represent changes in cash flows, but a variation in the exposure of market value, the outstanding hedging positions do not impact results (they are registered as cash flow hedges under IFRS Accounting Standards, therefore, a change in the foreign exchange rate has an impact on the equity of the Company).
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Balance sheet exposure of LATAM to the Brazilian Real is related to the functional currency of LATAM Airlines Brazil and its balance sheet currency mismatch, as LATAM Airlines Brazil has a net US$ active position. When the balance sheet denominated in U.S. dollars is translated to Brazilian Real, the financial results of LATAM Airlines Brazil may fluctuate and therefore could impact LATAM’s financial results.
The exposure to the Brazilian real on LATAM Airlines Brazil balance sheet has been reduced from over US$4 billion since the merger between LAN and TAM in June 2012 to around US$66 million as of December 31, 2024. The Company continues working to mitigate this exposure through financial and operational mechanisms.
The following table shows the sensitivity of LATAM Airlines Brazil’s financial results to changes in the R$/US$ exchange rate:
LATAM Airlines Brazil exchange rate sensitivity Position
effect on pre-tax earnings as of December 31,
2024 LATAM 2023 LATAM 2022 LATAM
(millions of US$)
Appreciation (depreciation) of R$/US$
-10% -54.7  +6.6  +70.7 
+10% +54.7  -6.6  -70.7 
Our foreign currency exchange exposure as of December 31, 2024 was as follows:
LATAM foreign currency exchange exposure
U.S. Dollars MUS$ % of total Brazilian real
MUS$		 % of total Chilean pesos
MUS$		 % of total Other currencies
MUS$		 % of total Total MUS$
Current assets 2,163,219  55.5  % 1,135,331  29.1  % 209,882  5.4  % 391,987  10.0  % 3,900,419 
Other assets 9,751,548  85.9  % 1,343,812  11.8  % 108,731  1.0  % 148,855  1.3  % 11,352,946 
Total assets 11,914,767  78.1  % 2,479,143  16.3  % 318,613  2.1  % 540,842  3.5  % 15,253,365 
Current liabilities 2,420,815  38.5  % 766,438  12.2  % 1,014,210  16.1  % 2,089,379  33.2  % 6,290,842 
Long-term liabilities 7,138,481  86.5  % 630,240  7.6  % 319,050  3.9  % 163,423  2.0  % 8,251,194 
Total liabilities 9,559,296  65.7  % 1,396,678  9.6  % 1,333,260  9.2  % 2,252,802  15.5  % 14,542,036 
Total equity 711,329  100.0  % —  —  —  —  —  —  711,329 
Total liabilities and equity 10,270,625  67.3  % 1,396,678  9.2  % 1,333,260  8.7  % 2,252,802  14.8  % 15,253,365 
Risk of Fluctuations in Interest Rates
As of December 31, 2024, LATAM had US$3.8 billion in outstanding interest-bearing loans. LATAM usually uses interest rate derivatives to reduce the impact of an increase of interest rates. Given this situation, approximately 76% of LATAM outstanding debt as of December 31, 2024, was effectively at a fixed rate.
LATAM’s interest-bearing loans can be classified by: variable interest rate debt and fixed interest rate. LATAM’s variable interest rate debt amounts to US$928.0 million, from which 100% is assigned to aircraft financing. The fixed interest rate debt amounts are US2,867 million of which 18% is assigned to aircraft financing and 82% to non-aircraft financing.
As of December 31, 2024, the value of interest rate derivative positions amounted to US$4.7 million (positive) corresponding to operating lease hedges in order to fix the rents upon delivery of the aircraft. As of December 31, 2023, the Company did not maintain interest rate derivative positions in force.
As of December 31, 2024, the Company did not recognize any losses for premiums paid. As of December 31, 2023, the Company recognized losses of US$1.8 million corresponding to the recognition in profit for premiums paid.
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As of December 31, 2024, the Company recognized an increase in the right-of-use asset due to the expiration of derivatives for US$82,000 associated with aircraft leases. As of December 31, 2024, a lower depreciation expense of the right-of-use asset for US$1.9 million (positive) was recognized. As of December 31, 2023, a lower depreciation expense of the right-of-use asset for US$1.1 million (positive) was recognized for this same concept.
As of December 31, 2024, the average interest rate of our outstanding interest-bearing long-term debt rate was 7.9%.
The following table summarizes our principal payment obligations on all of our interest-bearing debt as of December 31, 2024, and the related average interest rate for such debt. The average interest rate has been calculated based on the prevailing interest rate on December 31, 2024 for each loan.
LATAM’s principal payment obligations by year of expected maturity(1)
Average
interest rate(2)
 2025 2026 2027 2028 2029 2030 and thereafter
(millions of US$)
Interest-bearing liabilities 7.9  % 219  189  179  455  886  1,866 
______________________________________________________
(1)At cost.
(2)Average interest rate means the average prevailing interest rate on our debt on December 31, 2024.
The following table shows the sensitivity of changes in our long-term interest-bearing liabilities and capital leases that are not hedged against interest-rate variations. These changes are considered reasonably possible based on current market conditions.
LATAM’s interest rate sensitivity
(effect on pre-tax earnings) Position as of December 31,
2024 LATAM 2023 LATAM 2022 LATAM
(millions of US$)
Increase (decrease) of future curve SOFR rate
+100 -9.28  -20.27  -22.64 
-100 basis points +9.28  +20.27  +22.64 
Changes in market conditions produce a change in the valuation of current financial instruments hedging against fluctuations in interest rates, causing an effect on the Company’s equity (because they are booked as cash-flow hedges). These changes are considered reasonably possible based on current market conditions. The calculations were made by increasing (decreasing) 100 basis points of the interest rate curve.
LATAM’s interest rate sensitivity (effect on equity) Position as of December 31,
2024 LATAM 2023 LATAM 2022 LATAM
(millions of US$)
Increase (decrease) interest rate curve
Future Rates
+100 basis points +5.9 — +6.9 
-100 basis points -6.3 — -8.2 
During the periods presented, the Company did not record any losses for ineffectiveness in the consolidated income statement for this type of coverage.
There are market-related limitations in the method used for the sensitivity analysis. These limitations derive from the fact that the levels indicated by the futures curves may not be necessarily met and may change in each period.
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ITEM 12 DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES
A.Debt Securities
Not applicable.
B.Warrants and Rights
Not applicable.
C.Other Securities
Not applicable.
D.American Depositary Shares
In the United States, our common shares trade in the form of ADS, originally issued by The Bank of New York Mellon, as Depositary. Our ADSs commenced trading on the NYSE in 1997. In October 2011, our Depositary bank changed from The Bank of New York Mellon to JP Morgan Chase Bank, N.A. (“JP Morgan”). Since July 2024, each ADS represents two thousand (2,000) common shares. LATAM’s ADSs were relisted on the NYSE on July 25, 2024, following its delisting in June 2020 after entering into the Chapter 11 Restructuring. The relisting occurred following the pricing of a public secondary offering by certain of the LATAM’s shareholders to sell 19,000,000 ADSs at a price of U.S.$24.00 per ADS (the “re-IPO”). The ADSs trade on the NYSE under the ticker symbol “LTM.” On August 28, 2024, 1,773,026 additional ADSs were sold by certain Company’s shareholders that participated in the re-IPO, pursuant to the underwriters’ overallotment option. The Company did not receive any proceeds from the sale of ADSs by the selling shareholders.
Fees and Charges for ADR Holders
JP Morgan, as depositary, collects its fees for delivery and surrender of ADSs directly from investors depositing shares or surrendering ADSs for the purpose of withdrawal or from intermediaries acting for them. The depositary collects fees for making distributions to investors by deducting those fees from the amounts distributed or by selling a portion of the distributable property to pay the fees. The depositary may also collect its annual fee for depositary services by deductions from cash distributions, by directly billing investors or by charging the book-entry system accounts of participants acting for them.
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The depositary may generally refuse to provide fee-attracting services until its fees for those services are paid.
Persons depositing or withdrawing shares must pay: For:
US$5.00 (or less) per 100 ADSs (or portion of 100 ADSs)
•Issuance of ADSs, including issuances resulting from a distribution of shares or rights or other property
•Cancellation of ADSs for the purpose of withdrawal, including if the deposit agreement terminates
US$0.05 (or less) per ADS
•Any cash distribution to ADS registered holders
A fee equivalent to the fee that would be payable if securities distributed had been shares and the shares had been deposited for issuance of ADSs
•Distribution of securities distributed to holders of deposited securities which are distributed by the depositary to ADS registered holders
US$0.05 (or less) per ADSs per calendar year
•Depositary services
Registration or transfer fees
•Transfer and registration of shares on the depositary’s share register to or from the name of the depositary or its agent when investors deposit or withdraw shares
Expenses of the depositary
•Cable, telex and facsimile transmissions
•Conversion of foreign currencies into U.S. dollars
Taxes and other governmental charges the depositary or the custodian has to pay on any ADS or share underlying an ADS, such as stock transfer taxes, stamp duty or withholding taxes
•As necessary
Any charges incurred by the depositary or its agents for servicing the deposited securities
•As necessary
Fees and Direct and Indirect Payments Made by the Depositary to the Foreign Issuer
Past Fees and Payments
During 2024, the Company did not receive any payment from the depositary for continuing annual stock exchange listing fees, standard out-of-pocket maintenance costs for the ADRs (consisting of the expenses of postage and envelopes for mailing annual and interim financial reports, printing and distributing dividend checks, electronic filing of U.S. Federal tax information, mailing required tax forms, stationery, postage, facsimile, and telephone calls), payments related to applicable performance indicators relating to the ADR facility, underwriting fees and legal fees.
Future Fees and Payments
JP Morgan, as the depositary bank, has agreed to reimburse the Company for certain of our reasonable expenses related to our ADS program and incurred by us. The reimbursements include direct payments (legal and accounting fees incurred in connection with preparation of Form 20-F and ongoing SEC compliance and listing requirements, listing fees, investor relations expenses, advertising and public relations expenses and fees payable to service providers for the distribution of hard copy materials to beneficial ADR holders in the Depositary Trust Company, such as information related to shareholders’ meetings and related voting instruction cards); and indirect payments (third-party expenses paid directly and fees waived).

Notwithstanding the above mentioned charges, for a limited period of time and at the Company’s discretion, in each case as set forth below, the Company has agreed to assume the following fees:

•cancellation fees during the period in which the Company announces an ADS ratio change to the effective date of the ratio change;

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•in connection with the first registered offering of our securities following the date hereof, issuance or cancellation fees during the ten (10) business days after the pricing date, and issuance fees for all ADSs issued by us pursuant to the exercise of any overallotment rights in connection therewith; and

•issuance fees for all ADRs issued in connection with follow-on offerings registered with the SEC in excess of US$50 million, issuance fees for all ADSs issued by us pursuant to the exercise of any overallotment rights in connection therewith, and cancellation fees for all ADRs cancelled in the five (5) business days after the settlement date of such follow-on offerings.

The above-referenced charges may at any time and from time to time be changed by agreement between us and the depositary.
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PART II
ITEM 13 DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES
None.
ITEM 14 MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS
None.
ITEM 15 CONTROLS AND PROCEDURES
A.Disclosure Controls and Procedures
Management carried out an evaluation, with the participation of the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures as of December 31, 2024. There are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and the circumvention or overriding of the controls and procedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their control objectives. Based upon such evaluation, management, with the participation of the Chief Executive Officer and Chief Financial Officer concluded that the disclosure controls and procedures, as of December 31, 2024, were effective in providing reasonable assurance that information required to be disclosed by us in the reports we file or submit under the Exchange Act, as amended, is recorded, processed, summarized and reported within the time periods specified in the applicable rules and forms, and that it is accumulated and communicated to our management including our Chief Executive Officer and Chief Financial Officer as appropriate to allow timely decisions regarding required disclosure.

B.Management’s Annual Report on Internal Control Over Financial Reporting
The management of the Company, including the Chief Executive Officer and the Chief Financial Officer, is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act, as amended.
The Company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. The Company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of the effectiveness of internal control to future periods are subject to the risk that controls may become inadequate because of changes in conditions, and that the degree of compliance with the policies or procedures may deteriorate. LATAM Airlines Group S.A.’s management, including the Chief Executive Officer and the Chief Financial Officer, has assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2024 based on the criteria established in Internal Control - “Integrated Framework (2013)” issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) and, based on such criteria, LATAM Airlines Group S.A.’s management has concluded that, as of December 31, 2024, the Company’s internal control over financial reporting is effective. The company’s internal control over financial reporting effectiveness as of December 31, 2024 has been audited by PricewaterhouseCoopers Consultores Auditores y Compañía Limitada, an independent registered public accounting firm, as stated in their report included herein.
C.Attestation report of the registered public accounting firm.
See page F-2 of our audited consolidated financial statements.
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D.Changes in internal controls over financial reporting.
There have been no changes that have materially affected or are reasonably likely to materially affect the company’s internal control over financial reporting.
ITEM 16 RESERVED
ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT
Our Board of Directors has appointed on February 22, 2024, Frederico P. Fleury Curado, Michael Neruda and Sonia Villalobos as “Audit Committee Financial Experts” as defined in the instructions to Item 16A of the SEC’s Form 20-F. Frederico P. Fleury Curado and Sonia J.S. Villalobos meet the applicable independence requirements of the SEC and Section 303A.02 of the New York Stock Exchange’s Listed Company Manual. For a discussion of the role of our audit committee, see “Item 6. Directors, Senior Management and Employees—C. Board Practices—Committees— Board of Directors’ Committee and Audit Committee.”
ITEM 16B. CODE OF CONDUCT
We have adopted a code of conduct, as defined in Item 16B of Form 20-F under the Exchange Act. Our Code of Conduct (the “Code”) applies to the senior management, including our Board of Directors, as well as to other employees. Our Code is freely available online at our website, www.latamairlinesgroup.net, under the heading “Corporate Governance” on the Investor Relations page. In addition, upon written request, by regular mail, to the following address: LATAM Airlines Group S.A., Investor Relations Department, attention: Investor Relations, Av. Presidente Riesco 5711, 20th Floor, Las Condes, Santiago, Chile or by e-mail at InvestorRelations@latam.com we will provide any person with a copy of it without charge. If we amend the provisions of our Code of Conduct that apply to our senior management or to other persons performing similar functions, or if we grant any waiver of such provisions, we will disclose such amendment or waiver on our website. On February 22, 2024, LATAM updated its Code of Conduct, which was distributed to employees and collaborators, as well as updated on internal and external websites.
ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES
Audit and Non-Audit Fees
The following table sets forth the fees paid to our independent registered public accounting firm, PricewaterhouseCoopers Consultores Auditores y Compañía Limitada, during the fiscal years ended December 31, 2024 and 2023:
2024 2023
USD (in thousands)
Audit fees 2,007  1,637 
Audit-related fees -  - 
Tax fees -  - 
All Other fees 4  2 
Total fees 2,011  1,639 
Other fees in the table above are fees billed by PricewaterhouseCoopers as of December 31, 2024, related to Customs & Foreign Exchange. Fees in 2023 correspond to training in connection with Customs & Foreign Exchange.
Board of Directors’ Committee Pre-Approval Policies and Procedures
Since January 2004, LATAM has complied with SEC regulations regarding the type of additional services our independent auditors are authorized to offer to us. In addition, our board of directors’ Committee has decided to automatically authorize any such accepted services, individually or jointly considered during one calendar year, for an amount of up to 20% of the fees charged by the auditing firm. If the amount of any services, individually or jointly considered during one calendar year, is larger than these thresholds, approval by the board of directors’ Committee will be required.
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ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES
None.
ITEM 16E.PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS
We did not, directly or indirectly, purchase any of our equity securities in 2024.
ITEM 16F. CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT
None.
ITEM 16G. CORPORATE GOVERNANCE

New York Stock Exchange Corporate Governance Comparison

Pursuant to Section 303A.11 of the Listed Company Manual of the NYSE, we are required to provide a summary of the significant ways in which our corporate governance practices differ from those required from U.S. companies under the NYSE listing standards. We are a Chilean Corporation with shares listed on the SSE and the Chilean Electronic Exchange and our ADSs listed on the NYSE. Our corporate governance practices are governed by our bylaws, the Chilean Corporation Law and the Securities Market Law.

The table below discloses the significant differences between our corporate governance practices and NYSE standards.

NYSE Standards Our Corporate Governance Practice
Director Independence. Majority of board of directors must be independent. §303A.01
 Under Chilean law, we are not required to have a majority of independent directors on our board, but according to Chilean law, the Company’s directors cannot serve as executive officials.
Our board of directors’ committee (all of whom are members of our board of directors) is composed of three board members, two of whom must be independent if we have a sufficient number of independent board members on our board.
The definition of independence applicable to us pursuant to the Chilean Corporation Law differs in certain respects from the definition applicable to U.S. issuers under the NYSE rules.
Pursuant to Law No. 20,382 on Corporate Governance, which came into effect on January 1, 2010, we are also required to have at least one independent board member.
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Starting on January 1, 2010, directors are deemed to be independent if they have not fallen within any of the following categories during the 18 months prior to their election: (i) had a relevant relationship, interest or dependence on us, our affiliates, controlling shareholders, main executives or any of them, or had served any of the foregoing a directors, managers, administrators, main executives or advisors; (ii) had a close family relationship with any of the individuals indicated in (i); (iii) had served as directors, managers, administrators or main executives in a non-profit organization which received significant funds from the individuals indicated in (i); (iv) had been a partner or shareholder (with a direct or indirect participation in excess of 10%) in, or had served as directors, managers, administrators or main executives at a company which has rendered legal or consulting services (for relevant amounts) or external auditing services to the individuals indicated in (i); (v) had been a partner or shareholder (with a direct or indirect participation in excess of 10%) in, or had served as directors, managers, administrators or main executives, our main competitors, suppliers or clients. In addition, the election of such an independent director is subject to a procedure set forth by the cited Corporation Law.
Executive Sessions. Non-management directors must meet regularly in executive sessions without management. Independent directors should meet alone in an executive session at least once a year. §303A.03
 There is no similar requirement under our bylaws or under applicable Chilean law.
Nominating/corporate governance committee. Nominating/corporate governance committee of independent directors is required. The committee must have a charter specifying the purpose, duties and evaluation procedures of the committee. §303A.04
 We are not required to have, and do not have, a nominating/corporate governance committee.
Compensation committee. Compensation committee of independent directors is required, which must approve executive officer compensation. The committee must have a charter specifying the purpose, duties and evaluation procedures of the committee. §303A.05
 We are not required to have a compensation committee. Pursuant to the Chilean Corporation Law, our board of directors’ committee must approve our senior management’s and employee’s compensation.
Equity compensation plans. Equity compensation plans require shareholder approval, subject to limited exemptions. §303A.08
 Under the Chilean Corporation Law, equity compensation plans require shareholders’ approval.
Disclosure of Corporate Governance. Listed companies must adopt and disclose corporate governance guidelines. §303A.09
 Chilean law does not require that corporate governance guidelines be adopted. Directors’ responsibilities and access to management and independent advisors are directly provided for by applicable law. Directors’ compensation is approved at the annual meeting of shareholders, pursuant to applicable law.
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Code of Ethics. Corporate governance guidelines and a code of business conduct and ethics is required, with disclosure of any waiver for directors or executive officers. §303A.10
We have adopted a code of conduct applicable to our senior management, including our chief executive officer, our chief financial officer and our chief accounting officer, as well as to other employees. Our code is freely available online at our website, www.latamairlinesgroup.net, under the heading “Corporate Governance” in the Investor Relations informational page. In addition, upon written request, by regular mail to LATAM Airlines Group S.A., Investor Relations Department, attention: Investor Relations, Av. Presidente Riesco 5711, 20th floor, Comuna Las Condes, Santiago, Chile or by e-mail at Investor.Relations@latam.com, we will provide any person with a copy of our code of conduct without charge. We are required by Item 16B of Form 20-F to disclose any waivers granted to our chief executive officer, chief financial officer, principal accounting officer and persons performing similar functions.
Disclosure of Compliance. Each listed company CEO must (a) certify to the NYSE each year that he or she is not aware of any violation by the listed company of NYSE corporate governance listing standards; (b) promptly notify the NYSE in writing after any executive officer becomes aware of any material non-compliance with any applicable provisions of Section 303A; and (c) must submit an executed Written Affirmation annually to the NYSE. In addition, each listed company must submit an interim Written Affirmation as and when required by the interim Written Affirmation form specified by the NYSE. The annual and interim Written Affirmations must be in the form specified by the NYSE. §303A.12
 Not required in the Chilean regulations. The Company must only comply with Section 303A.12 (b) and (c).
Reprimand Letter. The NYSE may issue a public reprimand letter to any listed company that violates a NYSE listing standard. §303A.13
 No specified in the Chilean regulations.
Initial or Continued Listing. The initial or continued listing of any security of an issuer that is not in compliance with the recovery policy for erroneously awarded compensation pursuant to the provisions of Section 303A.14 is prohibited. §303A.14
 Not specified in the Chilean regulations.
Audit Committee and Board of Director’s Committee. Listed companies must have an audit committee that satisfies the requirements of Rule 10A-3 under the Exchange Act. All audit committee members must satisfy the requirements for independence. §303A.06.
 Under Chilean law, we are required to have a board of director’s committee composed of three board members. We are required, to the extent possible, to appoint a majority of independent board members to the board of director’s committee. To comply with U.S. law independence requirements, as of December 31, 2024 we have also created an Audit Committee composed of two members.

The disclosure of the significant ways in which our corporate governance practices differ from those required for U.S. companies under the NYSE listing standards is also posted on our website and can be accessed at www.latamairlinesgroup.net.

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ITEM 16H. MINE SAFETY DISCLOSURE
Not applicable.
ITEM 16I. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
Not applicable.
ITEM 16J. INSIDER TRADING POLICIES
LATAM has adopted comprehensive policies and procedures to ensure compliance with insider trading laws, rules, regulations and applicable listing standards, including:

i.Code of Conduct, which outlines the ethical standards and general behavioral guidelines applicable to all directors, officers, and employees, including provisions to prevent the misuse of material non-public information.
ii.Manual for the Management of Market-Relevant Information, which provides specific policies and procedures regarding the management, disclosure, and safeguarding of material non-public information to promote transparency and compliance with market regulations.
iii.Code of Conduct for Senior Financial Officers, which establishes additional standards and responsibilities for LATAM’s senior financial executives to ensure integrity, transparency, and compliance with financial and market regulations, including those related to insider trading.
These policies collectively address key aspects of insider trading prevention, including pre-clearance requirements for securities transactions, defined blackout periods, and guidelines for the appropriate handling of sensitive information. LATAM Airlines Group is committed to regularly reviewing and updating these policies to ensure alignment with evolving regulatory requirements and best practices.
ITEM 16K. CYBERSECURITY MANAGEMENT AND STRATEGY

Ensuring adequate levels of protection and cybersecurity for its operations and business processes is a priority for LATAM group, as well as safeguarding the information of its customers, investors, employees and suppliers. To achieve its protection and cybersecurity objectives, the Company has a team that is thoroughly trained to provide comprehensive support in areas such as cybersecurity governance, risk and compliance, vulnerability management, awareness and training, data protection, cybersecurity architecture, offensive prevention, network team operations, identity and logical access management, cyber defense, and threat intelligence. These areas are interconnected and deeply involved in the risk management process, under the leadership of the Chief Information Security Officer (“CISO”), André Pires Magalhaes. Additionally, the company maintains a cybersecurity operating model based on the NIST Cybersecurity Framework (“CSF”).

In light of these priorities, LATAM group has designed a robust cybersecurity risk management process that is continuously being improved to adapt to the latest standards and trends. In 2024, the Cybersecurity Team has developed a comprehensive initiative to transition from a qualitative methodology to a quantitative approach (i) allowing for a more accurate and objective assessment of risks, (ii) facilitating informed decision-making with concrete data, (iii) ensuring effective resource allocation and (iv) strengthening compliance with regulatory requirements, which have been evolving due to the advent of emerging technologies.

By the end of 2024, the Company deployed a new Governance, Risk and Compliance (“GRC”) platform to support the quantification of cybersecurity risks, configuring it to address risks associated with the Flight Operations area. Currently, progress stands at 35%, with expectations of achieving 100% quantification of cybersecurity risks by the first half of 2025. Alongside the transition from qualitative to quantitative risk assessment and management, the process continues to be based on best practices from ISO/IEC 27000, ISO/IEC 31000 standards, and international guidelines such as those from the National Institute of Standards and Technology (“NIST”). This approach primarily focuses on the identification, contextualization, evaluation, treatment, monitoring, communication and awareness of cybersecurity risks, incorporating guidelines aligned with the new methodology.

Additionally, cyber risk management extends to monitoring and identifying threats associated with the use of outsourced service providers. For this reason, a third-party risk management program has been designed and is continuously implemented, based on a framework that includes international best practices such as ISO/IEC 27000 and 31000 to manage these risks in a timely manner, in addition to NIST SP 800-161 for assessing maturity levels.
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Through this program, LATAM group classifies suppliers according to their critical risk levels and implements appropriate strategies to verify their internal controls, which, in turn, strengthens our cybersecurity controls. The Company’s critical external service providers are continuously monitored using automated tools and are contractually obligated to report any incidents that affect their services, business and data to the group.

To strengthen third-party cybersecurity risk management, we are in the process of implementing a supplier portal as a Cybersecurity Management initiative. This portal will allow us to automate and self-manage the process of evaluating the cybersecurity risk of our third parties by creating a system that enables LATAM group suppliers to self-evaluate, present their action plans to mitigate and reduce identified risks, and facilitate monitoring. Currently, this initiative is in its final phase, with completion estimated in the first quarter 2025.

In 2024, the Company’s offensive prevention capabilities were enhanced through the execution of ethical hacking and pen-testing activities in a continuous, coordinated, and scheduled manner on mission-critical systems by the Red Team. Supported by strategic suppliers, this team expanded prevention capabilities, increased the number of systems evaluated, planned for evaluation in the next period and implemented control panels available to the CISO and his immediate employees in terms of seniority, ensuring continuous monitoring of the status of cybersecurity offensive prevention operations.

During 2024, the technical vulnerability management program was refined and strengthened by incorporating vulnerabilities and threats detected by the Red Team for timely remediation. This interaction is complemented by an improvement in the traceability of the vulnerability dissemination and awareness program, optimizing the Company’s cybersecurity control environment. Additionally, new control panels were created, allowing for permanent monitoring of vulnerabilities and their respective status.

To improve technological vulnerability management processes, LATAM group is continuously evaluating new security tools that were previously used to detect vulnerabilities in the source code of systems were migrated to state-of-the-art alternatives, thereby increasing the scope of detection and identification of vulnerabilities in this technological layer.

LATAM group has also engaged in efforts to improve the security staff’s knowledge on cybersecurity and develop technological projects aimed at strengthening LATAM group’s protections against cybersecurity risks. Moreover, it has incorporated new technologies, such as the use of AI, aimed at optimizing both new and existing processes within the group.

As a key complement to adequate cyber risk management, in 2024 LATAM group worked on strengthening the Intelligence and Threat Hunting program, enhancing research and communication capabilities between areas responsible for prevention, protection, and detection, thereby increasing the Company’s preventive capabilities against emerging threats.

Moreover, during 2024, as emerging cybersecurity enhanced and the use of cutting-edge technologies like AI in process automation and optimization gained relevance, the Cybersecurity Team maintained strategies aimed at raising awareness and strengthening the Company’s cybersecurity culture. This included reinforcing tactical and operational actions to raise awareness among stakeholders about cybersecurity standards and best practices, executing a continuous training and awareness plans that included updates to electronic learning programs based on international best practices in information security and cybersecurity (for all positions within the Company), and conducting continuous campaigns simulating social engineering attacks.

Cybersecurity risk management requires implementing an extended strategy that ensures protection, detection and swift response to attacks and threats to the Company’s operations. During 2024, the Company promoted strengthening defensive cybersecurity strategies, which enabled the expansion of response and recovery capabilities in the event of any cybersecurity incidents., including the strengthening of an outsourced service for the management of the Security Operations Center (“SOC”), responsible for detecting cyber incidents through the System Information and Event Management (“SIEM”) tool, which includes designing and implementing improvements in both internal and external communication flows regarding possible cyber incidents. Moreover, the Company’s Emergency Response Plan and the Cyber Emergencies Committee (“CEC”) were strengthened during 2024, serving as valuable precedents of LATAM’s Emergency Response Committee, which is in turn composed by IT leaders with the purpose of giving a quick and effective response in case of a technological crisis of high global impact within the Company.

150

During the first semester of 2024, in order to ensure the protection of its clients’ transactional data, LATAM strengthened and adapted controls. These improvements in its data protection strategy allowed the Company to obtain certifications by the Payment Card Industry Data Security Standard (“PCI”) in 23 markets in which it operates, representing its sixth consecutive PCI certification and reaffirming its commitment to offer secure services to its clients, aligned with the latest technological trends while complying with applicable regulatory requirements. Additionally, during 2024, LATAM group improved its compliance levels with applicable local data protection and privacy legislation, mainly through the deployment of new strategies to verify and ensure compliance more rigorously, alongside the enactment of Chilean National Law No. 21,719, which regulates the protection and processing of personal data, establishing the National Data Protection Agency as a supervisory entity. These new requirements are currently in the implementation phase and will become effective on December 1, 2026.

In line with the regulatory requirements applicable to LATAM, the Cybersecurity Team has strengthened its strategy to continuously monitor compliance with general technology controls, including cybersecurity controls to ensure that they maintain the appropriate level of compliance.

During 2024, the Red Team conducted a test plan of simulated automated attacks in order to improve both administrative and technical mechanisms and controls that comprise the Company’s cybersecurity control responses. Additionally, a cyber-crisis program was implemented to strengthen LATAM’s capacity to prevent and address potential cybersecurity incidents. The program features transversal governance by a multidisciplinary team composed of multiple departments, including cybersecurity, technology, legal, corporate risk, communications, human resources, among others, who participate in simulations of high-impact cybersecurity incidents to address their treatment and management, aiming to strengthen the Company’s security tools and ensure the continuous development of internal controls to effectively face cybersecurity threats.

Periodic self-assessments were also conducted through the deployment of a technical assurance program, based on the continuous evaluation of the effectiveness of cybersecurity processes, mechanisms, and/or controls, contributing to the timely management of cybersecurity risks, positioning cybersecurity as a necessary business component of the Company.

Moreover, during 2024 MANDIANT and GM Sectec conducted periodic independent evaluations of its cybersecurity program, with the objective of independently verifying the effectiveness and efficiency of Company’s control mechanisms while helping LATAM to remain vigilant to potential threats and attacks that could compromise the availability of business services or threaten the privacy and integrity of information held by the Company.

Additionally, during 2024 LATAM group conducted a collaborative effort with the Technology Department in order to create a technological resilience program, consisting of five aspects to be applied to all of the Company’s technologies: (i) back-up availability; (ii) high availability capacity; (iii) disaster recovery plan; (iv) alert management and monitoring; and (v) the implementation of the concept of creating infrastructure as code (“IaC”), which allows the Company’s technological infrastructure to be managed in an automated manner, through the use of a template instead of a manual process, facilitating and streamlining the availability of technological infrastructure that supports new services.

Over the last four fiscal years, the Company’s business strategy, operational results, and financial condition have not been materially affected by cybersecurity threats due to the above mentioned efforts conducted by LATAM in the cybersecurity area. Although there can be no assurance that the Company will not be materially affected in the future by such risks, LATAM is focused on continuously developing strategies that adapt to new trends, while maintaining traditional strategies that sustain the Company’s cybersecurity management.

IT disruption of Microsoft and CrowdStrike

In July 2024, a major global technology disruption affecting multiple industries was triggered by a flaw in a software update to the CrowdStrike Falcon platform. The disruption triggered outages in Microsoft’s systems, affecting millions of Windows operated devices, which resulted in airlines, banks and media outlets experiencing significant problems in their operations.

Although the disruption was not a cybersecurity incident, LATAM group’s technical and business teams quickly implemented the protocols established to safeguard the technological environment, successfully avoiding any operational interruptions in flights and critical systems. Consequently, no flights were cancelled during the technological disruption.


151

Governance

With regard to cybersecurity governance, LATAM has defined an organizational structure with specialized and dedicated personnel, as well as formal high-level hierarchical bodies, equipped with the powers and competencies required to manage information security and cybersecurity. As part of this organizational structure, the CISO plays a crucial role in risk management and is responsible for designing and maintaining an effective system to identify, monitor, control, and mitigate data protection and cybersecurity risks. The CISO reports to the Vice President of IT (“CIO”), Juliana Ríos, who in turn reports to the CEO of the Company, Roberto Alvo. For further information, see “Item 6. Directors, Senior Management and Employees.”

Throughout 2024, the CISO role was held by André Pires Magalhaes, who has academic training in Electronic Engineering at the University of Sao Paulo (Brazil, 2000) and an MBA in Corporate Management at the Getulio Vargas Foundation (Rio de Janeiro, Brazil, 2004). André also holds international certifications in Information Security and Governance, including ITIL Foundation V3 (2012), CRISC (2010), ISO/IEC 27001 Audit Leader (2010), CGEIT (2009), CISM (2008), and CISA (2007). He has a professional career spanning 21 years in Risk Management and Information Security, focusing on management, strategy, and project management activities. André has successfully led cybersecurity and information security teams in various economic sectors across South America, including companies such as FALABELLA Corporated, Banco Santander Chile, PRODUBAN Chile (ISBAN), General Motors (Chile, Peru, and Brazil), CPM Brazis Technology (Brazil), Natura Cosmetics (Brazil), and Alcoa Aluminio S.A (Brazil).

LATAM group also has an Executive Committee for Technological Risks, composed of the CISO and the CTOs from the IT & Digital Vice Presidency, which supervises compliance with strategic information security planning, ensures the implementation of necessary measures to mitigate identified risks and promotes a risk management strategy at all levels of the organization.

At the executive level, LATAM group upholds its commitment to cybersecurity and effective risk management through periodic sessions held by its Executive Committee, which assesses the Company’s tolerance to cybersecurity risks and ensures the allocation of resources, personnel, infrastructure, and necessary tools for proper risk management. The CISO provides monthly reports to the Executive Committee on the outcomes of strategies aimed at adequate risk management, including periodic evaluations by independent experts on the Company’s cybersecurity management program, such as MANDIANT and GM Sectec.

The primary role of the Board of Directors and the Executive Committee is to oversee the Company’s security management program, acknowledging that management is responsible for designing, implementing, and maintaining an effective program to protect and mitigate data privacy and cybersecurity risks. Frederico Curado has experience in risk management, including cybersecurity risks, particularly while acting as Executive Vice President of Planning and Development in 1995 at Embraer where he led important innovations in the aeronautical industry and promoted the development of new technologies in aircraft manufacturing. Additionally, Sonia Villalobos is certified in Cybersecurity Oversight by the Software Engineering Institute at Carnegie Mellon University, a credential that reinforces her knowledge of the cybersecurity threat landscape, the respective responsibilities of the board and management in cyber-risk oversight and crisis preparedness strategies.

The Board receives annual information security and privacy training provided by the CISO. During quarterly meetings, the CIO presents the status of cyber threats and the effectiveness of mitigation measures to the Board. Independent third-party providers also report on cybersecurity issues through their periodic internal control reports.

The Audit Committee of LATAM is responsible for independently supervising the Company’s risk management, including data privacy and cybersecurity risks, which are managed by the Internal Audit department. This includes incorporating strategic metrics, reviewing the status of ongoing initiatives, significant incidents and their impact, emerging threats in the sector, as well as the results of internal audits.

Finally, the Cybersecurity Team annually reviews and updates its governance documents, including the Information Security Policy, which serves as the main document outlining the general guidelines to secure the Company’s information and technological assets, and the Information Security Program Plan. This plan is published on the group’s website and corporate intranet for information and consultation by clients, employees, suppliers, shareholders and potential investors. Compliance with the information security and cybersecurity documentary framework is also reviewed annually by the Internal Audit team and independent third parties who conduct compliance reviews associated with regulatory standards and laws such as PCI DSS, SOx, and IOSA.
152


ITEM 17 FINANCIAL STATEMENTS
See “Item 18. Financial Statements.”
ITEM 18 FINANCIAL STATEMENTS
See our consolidated Financial Statements beginning on page F-1.
153

ITEM 19 EXHIBITS
Documents filed as exhibits to this annual report
Exhibit No. Description
1.1
2.1
2.2
2.3*
2(d)*
2.4 We hereby agree to furnish to the SEC, upon its request, copies of any instruments defining the rights of holders of our long-term debt (or any long-term debt of our subsidiaries for which we are required to file consolidated or unconsolidated financial statements), where such indebtedness does not exceed 10% of our total consolidated assets.
2.5
2.6*##
4.1.1
4.1.2
4.1.3
4.1.4
154

Exhibit No. Description
4.1.5
4.1.6
4.1.7
4.1.8
4.1.9
4.1.10
4.2
4.3
4.3.1
4.3.2
4.3.3
155

Exhibit No. Description
4.3.4
4.3.5
4.3.6
4.3.7##
4.3.8*##
4.4
4.5
4.6.1##
4.6.2##
4.7
156

Exhibit No. Description
4.7.1
4.8
4.9
4.10
4.11
4.12
4.13
4.13.1
4.13.2
4.13.3
4.13.4
4.13.5##
4.14
157

Exhibit No. Description
4.15
4.16
4.17
4.18
4.19
4.20
4.21
4.22
4.23
4.24
4.25
4.25.1
158

Exhibit No. Description
4.25.2
4.25.3
4.26
4.26.1
4.26.2
4.26.3
4.26.4
4.26.5
4.26.6
4.27
4.27.1
4.27.2##
159

Exhibit No. Description
4.27.3*##
4.28
4.29
4.29.1
4.29.2
4.29.3
4.29.4
4.29.5##
4.29.6##
4.30
4.30.1
4.30.2
160

Exhibit No. Description
4.31
4.32
4.33
4.34
4.35
4.36
4.37
4.38##
4.39##
4.40##
4.41
4.42##
161

Exhibit No. Description
4.43##
4.44##
4.45##
4.46##
4.47
4.48
4.48*
4.49*##
8.1*
11(a)*
11(b).1*
11.(b).2*
12.1*
13.1*
15*
97
101.INS
Inline XBRL Instance Document.
162

Exhibit No. Description
101.SCH Inline XBRL Taxonomy Extension Schema Document.
101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document.
101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document.
104 Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).
________________________________________________________
*Filed herewith.
##Certain portions of this exhibit have been redacted pursuant to 4(a) of the Instructions as to Exhibits of Form 20-F. The Company agrees to furnish supplementally an unredacted copy of the exhibit to the SEC upon its request.
163

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LATAM AIRLINES GROUP S.A. AND SUBSIDIARIES
CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2024
CONTENTS
F-2
F-6
F-8
F-9
F-10
F-13
F-14
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
PYG - PARAGUAYAN GUARANI
F-1
Table of Contents



image_003.jpg
Report of Independent Registered Public Accounting Firm

To the Board of Directors and Shareholders of LATAM Airlines Group S.A.



Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated statements of financial position of LATAM Airlines Group S.A. and its subsidiaries (the “Company”) as of December 31, 2024 and 2023, and the related consolidated statements of income by function, comprehensive income, changes in equity and cash flows–direct method for each of the three years in the period ended December 31, 2024, including the related notes (collectively referred to as the “consolidated financial statements”). We also have audited the Company’s internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024 in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board. Also, in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.

Basis for Opinions

The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s Annual Report on Internal Control over Financial Reporting appearing under Item 15. Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company's internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.




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Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Critical Audit Matters

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.




F-3
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Valuation of Loyalty Programs Breakage

As described in Notes 2.19, 4(e) and 21 to the consolidated financial statements, the Company has recorded deferred income of US$3,258 million as of December 31, 2024, of which US$1,153 million was related to deferred income associated with the loyalty programs. The deferred income of loyalty programs is determined based on the estimated stand-alone selling price of unused miles and points awarded to the members of the loyalty programs reduced for breakage. The company, in conjunction with an external consultant, estimates the probability of non-use of miles and points awarded to the holders of the loyalty program based on a predictive model, according to the redemption behaviors and validity of miles and points using significant judgments and critical assumptions which consider the historical use activity and the expected use pattern.

The principal considerations for our determination that performing procedures relating to the valuation of loyalty programs breakage is a critical audit matter are (i) the significant judgment by management when developing the breakage estimate; (ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management’s significant assumptions related to estimating the breakage which consider the historical use activity and the expected use pattern; and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to management’s valuation of loyalty programs breakage, including controls over management’s review of the statistical models and resulting breakage estimates. These procedures also included, among others (i) testing management’s process for developing the breakage estimate; (ii) evaluating the appropriateness of the statistical models; and (iii) testing the completeness, accuracy, and relevance of underlying data used in the models. Evaluating management’s assumptions used to develop the breakage estimate involved evaluating whether the assumptions used by management were reasonable considering (i) the available information regarding the miles and points redemption and expiration patterns; (ii) management’s actions to incentive holders of the loyalty programs to redeem their miles and points; and (iii) whether these assumptions were consistent with evidence obtained in other areas of the audit. Professionals with specialized skill and knowledge were used to assist in the evaluation of the Company’s methodology and assumptions used to develop the breakage estimate.



/s/ PricewaterhouseCoopers
PricewaterhouseCoopers Consultores
Auditores y Compañia Limitada
Santiago, Chile
March 13, 2025

We have served as the Company’s auditor since 1991.
F-4
Table of Contents
Contents of the Notes to the consolidated financial statements of LATAM Airlines Group S.A. and Subsidiaries.
Notes Page
F-14
F-19
F-19
F-22
F-23
F-24
F-25
F-25
F-25
F-25
F-26
F-27
F-27
F-28
F-28
F-28
F-28
F-28
F-29
F-30
F-30
F-31
F-32
F-32
F-33
F-33
F-33
F-41
F-41
F-44
F-46
F-47
F-48
F-49
F-51
F-52
F-53
F-54
F-55
F-56
F-59
F-61
F-70
F-75
F-84
F-86
F-88
F-89
F-92
F-92
F-101
F-102
F-105
F-106
F-114
F-115
F-150
F-153
F-155
F-158
F-164
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Table of Contents
LATAM AIRLINES GROUP S.A. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
ASSETS
Note As of
December 31, 2024		 As of
December 31, 2023
ThUS$ ThUS$
Current Assets
Cash and cash equivalents 6 - 7 1,957,788  1,714,761 
Other financial assets 7 - 11 67,295  174,819 
Other non-financial assets 12 203,661  185,264 
Trade and other accounts receivable 7 - 8 1,163,707  1,385,910 
Accounts receivable from related entities 7 - 9 25  28 
Inventories 10 438,530  592,880 
Current tax assets 17 40,275  47,030 
Total current assets other than non-current assets (or disposal groups) classified as held for sale 3,871,281  4,100,692 
Non-current assets (or disposal groups) classified as held for sale 13 29,138  102,670 
   
Total current assets 3,900,419  4,203,362 
   
Non-current assets    
Other financial assets 7 - 11 53,772  34,485 
Other non-financial assets 12 89,416  168,621 
Accounts receivable 7 - 8 12,342  12,949 
Intangible assets other than goodwill 15 1,000,170  1,151,986 
Property, plant and equipment 16 10,186,697  9,091,130 
Deferred tax assets 17 10,549  4,782 
Total non-current assets 11,352,946  10,463,953 
Total assets 15,253,365  14,667,315 
The accompanying Notes 1 to 35 form an integral part of these consolidated financial statements.
F-6
Table of Contents
LATAM AIRLINES GROUP S.A. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
LIABILITIES AND EQUITY
Note As of
December 31, 2024		 As of
December 31, 2023
ThUS$ ThUS$
LIABILITIES
Current liabilities
Other financial liabilities 7 - 18 635,213  596,063 
Trade and other accounts payables 7 - 19 2,133,572  1,765,279 
Accounts payable to related entities 7 - 9 12,875  7,444 
Other provisions 20 14,221  15,072 
Current tax liabilities 17 6,281  2,371 
Other non-financial liabilities 21 3,488,680  3,301,906 
Total current liabilities 6,290,842  5,688,135 
Non-current liabilities    
Other financial liabilities 7 - 18 6,515,238  6,341,669 
Accounts payable 7 - 23 491,762  418,587 
Other provisions 20 623,846  926,736 
Deferred tax liabilities 17 312,677  382,359 
Employee benefits 22 167,427  122,618 
Other non-financial liabilities 21 140,244  348,936 
Total non-current liabilities 8,251,194  8,540,905 
Total liabilities 14,542,036  14,229,040 
EQUITY    
Share capital 24 5,003,534  5,003,534 
Retained earnings 24 1,148,291  464,411 
Other equity 24 39  39 
Other reserves 24 (5,428,597) (5,017,682)
Parent’s ownership interest 723,267  450,302 
Non-controlling interest 14 (11,938) (12,027)
Total equity 711,329  438,275 
Total liabilities and equity 15,253,365  14,667,315 
The accompanying Notes 1 to 35 form an integral part of these consolidated financial statements.
F-7
Table of Contents
LATAM AIRLINES GROUP S.A. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME BY FUNCTION
For the year ended December 31,
Note 2024 2023 2022
ThUS$ ThUS$ ThUS$
Revenue 5 - 25 12,833,043  11,640,541  9,362,521 
Cost of sales 26 (9,565,899) (8,816,590) (8,103,483)
Gross margin 3,267,144  2,823,951  1,259,038 
Other income 27 200,669  148,641  154,286 
Distribution costs 26 (606,207) (587,272) (426,599)
Administrative expenses 26 (824,493) (683,311) (576,429)
Other expenses 26 (459,842) (532,801) (531,575)
Gains/(losses) from restructuring activities 26 —  —  1,679,934 
Other gains/(losses) 26 (36,223) (91,043) (347,077)
Income from the operational activities 1,541,048  1,078,165  1,211,578 
     
Financial income 26 142,411  125,356  1,052,295 
Financial costs 26 (881,950) (698,231) (942,403)
Foreign exchange gains 172,917  85,891  25,993 
Result of indexation units 19,508  5,311  (1,412)
Income before taxes 993,934  596,492  1,346,051 
Income tax (expense)/benefits 17 (16,489) (14,942) (8,914)
     
NET INCOME FOR THE YEAR 977,445  581,550  1,337,137 
     
Income attributable to owners of the parent company 976,972  581,831  1,339,210 
Income (loss) attributable to non-controlling interest 14 473  (281) (2,073)
     
NET INCOME FOR THE YEAR 977,445  581,550  1,337,137 
EARNING PER SHARE
Basic earnings per share (US$) 29 0.001616  0.000963  0.013861 
Diluted earnings per share (US$) 29 0.001616  0.000963  0.013592 
The accompanying Notes 1 to 35 form an integral part of these consolidated financial statements.
F-8
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LATAM AIRLINES GROUP S.A. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
For the year ended at December 31,
Note 2024 2023 2022
ThUS$ ThUS$ ThUS$
NET INCOME FOR THE YEAR 977,445  581,550  1,337,137 
Components of other comprehensive income (loss) that will not be reclassified to income before taxes      
Other comprehensive (loss), before taxes, gains (losses) by new measurements on defined benefit plans 24 (21,769) (21,198) (9,935)
Total other comprehensive income (loss) that will not be reclassified to income before taxes (21,769) (21,198) (9,935)
Components of other comprehensive income that will be reclassified to income before taxes      
Currency translation differences income (losses) on currency translation, before tax (379,186) (12,423) (32,563)
Other comprehensive income (loss), before taxes, currency translation differences (379,186) (12,423) (32,563)
Cash flow hedges      
Gains (losses) on cash flow hedges before taxes 24 14,681  (41,144) 52,017 
Reclassification adjustment on cash flow hedges before tax 24 (40,898) (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 tax 24 11,999  (11,112) (8,143)
Other comprehensive income (losses), before taxes, cash flow hedges (14,218) (78,824) 75,167 
Change in value of time value of options      
Gains/(Losses) on change in value of time value of options before tax 24 (34,568) 25,751  (24,005)
Reclassification adjustments on change in value of time value of options before tax 24 37,265  28,818  19,946 
Other comprehensive income (loss), before taxes, changes in the time value of the options 2,697  54,569  (4,059)
Total other comprehensive losses that will be reclassified to losses before taxes (390,707) (36,678) 38,545 
Other components of other comprehensive income (loss), before taxes (412,476) (57,876) 28,610 
Income tax relating to new measurements on defined benefit plans 17 909  751  567 
Income tax relating to other comprehensive income that will not be reclassified to income 909  751  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) —  3,604  (235)
Income taxes related to components of other comprehensive loss will be reclassified to income —  3,604  (235)
Total Other comprehensive income (loss) (411,567) (53,521) 28,942 
Total comprehensive income (loss) 565,878  528,029  1,366,079 
Comprehensive income (loss) attributable to owners of the parent company 565,547  515,687  1,367,315 
Comprehensive income (loss) attributable to non-controlling interests 331  12,342  (1,236)
TOTAL COMPREHENSIVE INCOME 565,878  528,029  1,366,079 
The accompanying Notes 1 to 35 form an integral part of these consolidated financial statements.
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Table of Contents
LATAM AIRLINES GROUP S.A. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
Attributable to owners of the parent
Change in other reserves
Note Share
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, 2024   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 
Total increase (decrease) in equity
Net income for the period 24 —  —  —  —  —  —  —  —  —  —  976,972  976,972  473  977,445 
Other comprehensive income (loss)   —  —  —  (379,049) (14,218) 2,697  (20,855) —  —  (411,425) —  (411,425) (142) (411,567)
Total comprehensive income   —  —  —  (379,049) (14,218) 2,697  (20,855) —  —  (411,425) 976,972  565,547  331  565,878 
Transactions with shareholders 24-34
Dividends 24 —  —  —  —  —  —  —  —  —  —  (293,092) (293,092) —  (293,092)
Increase (decrease) through transfers and other changes, equity 24-34 —  —  —  —  —  —  —  —  510  510  —  510  (242) 268 
Total transactions with shareholders   —  —  —  —  —  —  —  —  510  510  (293,092) (292,582) (242) (292,824)
Closing balance as of December 31, 2024   5,003,534  39  —  (4,209,660) (52,896) 35,644  (69,414) 37,235  (1,169,506) (5,428,597) 1,148,291  723,267  (11,938) 711,329 
The accompanying Notes 1 to 35 form an integral part of these consolidated financial statements.
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Table of Contents
LATAM AIRLINES GROUP S.A. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
Attributable to owners of the parent
Change in other reserves
Note Share
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 period 24 —  —  —  —  —  —  —  —  —  —  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
Dividends 24 —  —  —  —  —  —  —  —  —  —  (174,549) (174,549) —  (174,549)
Equity issue 24 -33 —  —  —  —  —  —  —  —  —  —  —  —  —  — 
Increase for other contributions from the owners 24 —  17,401  —  —  —  —  —  —  (14,401) (14,401) —  3,000  —  3,000 
Increase (decrease) through transfers and other changes, equity 24 -33 (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 35 form an integral part of these consolidated financial statements.
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Table of Contents
LATAM AIRLINES GROUP S.A. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
Attributable to owners of the parent
Change in other reserves
Note Share
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, 2022 3,146,265  —  (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 year 24 —  —  —  —  —  —  —  —  —  —  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 issue 24 -33 800,000  —  —  —  —  —  —  —  —  —  —  800,000  —  800,000 
Increase for other contributions from the owners 24 —  9,250,229  —  —  —  —  —  —  (4,340,749) (4,340,749) —  4,909,480  —  4,909,480 
Increase (decrease) through transfers and other changes, equity 24-33 9,352,221  (9,250,190) —  —  —  —  —  —  (80,000) (80,000) —  22,031  35  22,066 
Total transactions with shareholders 10,152,221  39  —  —  —  —  —  —  (4,420,749) (4,420,749) —  5,731,511  35  5,731,546 
Closing balance as of December 31, 2022 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 
The accompanying Notes 1 to 35 form an integral part of these consolidated financial statements.
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LATAM AIRLINES GROUP S.A. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS - DIRECT METHOD
For the year ended
December 31,
Note 2024 2023 2022
ThUS$ ThUS$ ThUS$
Cash flows from operating activities
Cash collection from operating activities
Proceeds from sales of goods and services 14,037,848  13,397,385  10,549,542 
Other cash receipts from operating activities 212,750  169,692  117,118 
Payments for operating activities      
Payments to suppliers for the supply goods and services (9,458,249) (9,689,508) (9,113,130)
Payments to and on behalf of employees (1,419,825) (1,304,696) (1,039,336)
Other payments for operating activities (344,911) (270,580) (272,823)
Income taxes (paid) (43,439) (18,379) (14,314)
Other cash inflows (outflows) 34 122,153  (20,346) (130,260)
Net cash (outflow) inflow from operating activities 3,106,327  2,263,568  96,797 
Cash flows from investing activities      
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 equipment 97,303  46,524  56,377 
Purchases of property, plant and equipment 34 (1,325,463) (795,787) (780,538)
Purchases of intangible assets 34 (94,412) (68,052) (50,116)
Interest received 118,437  98,552  18,934 
Other cash inflows (outflows) 34 34,469  59,258  6,300 
Net cash (outflow) inflow from investing activities (1,169,666) (659,505) (748,957)
Proceeds from the issuance of shares 34 —  —  549,038 
Payments for changes in ownership interests in subsidiaries that do not result in loss of control —  (23) — 
Amounts from the issuance of other equity instruments 34 —  —  3,202,790 
Amounts raised from long-term loans 34 1,750,060  —  2,361,875 
Amounts raised from short-term loans 34 —  —  4,856,025 
Loans from related entities 32 —  —  770,522 
Loans repayments 34 (2,004,542) (342,005) (8,759,413)
Payments of lease liabilities 34 (344,038) (225,358) (131,917)
Payments of loans to related entities 34 —  —  (1,008,483)
Dividends paid 34 (174,838) —  — 
Interest paid 34 (717,634) (594,234) (521,716)
Other cash (outflows) inflows 34 (73,869) 11,405  (463,766)
Net cash inflow (outflow) from financing activities (1,564,861) (1,150,215) 854,955 
Net (decrease) increase in cash and cash equivalents before effect of exchanges rate change 371,800  453,848  202,795 
Effects of variation in the exchange rate on cash and cash equivalents (128,773) 44,238  (32,955)
Net (decrease) increase in cash and cash equivalents 243,027  498,086  169,840 
CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR 6 1,714,761  1,216,675  1,046,835 
CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR 6 1,957,788  1,714,761  1,216,675 
The accompanying Notes 1 to 35 form an integral part of these consolidated financial statements.
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LATAM AIRLINES GROUP S.A. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2024
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. Additionally, during the third quarter of 2024, it relisted its American Depositary Receipts ("ADRs") on the New York Stock Exchange ("NYSE") in the United States of America.
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, 2024, 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, and the modification of the Company's bylaws to account for said full capital reduction, agreed at an Extraordinary Shareholders meeting dated April 25, 2024, reduced to a public deed dated April 25, 2024, granted in the Notary of Santiago of Mr. Luis Eduardo Rodriguez Burr, an extract of which was registered in the Commercial Registry of the Registrar of Real Estate of Santiago on page 44,323 number 18,314 corresponding to the year 2024, and was published in the Official Gazette dated May 29, 2024.
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 25.93%, Delta Air Lines with 10.05% and Qatar Airways with 10.03% ownership.
As of December 31, 2024, the Company had a total of 2,131 shareholders in its registry. At that date, approximately 22.68% of the Company’s capital stock was in the form of ADRs.
During 2024, the LATAM group had an average of 37,355 employees, ending this year with a total number of 38,664 collaborator, distributed in 5,576 Administration employees, 19,307 in Operations, 9,288 Cabin Crew and 4,493 Command crew.


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The main subsidiaries included in these consolidated financial statements are as follows:
a)Percentage ownership
Tax No. Company Country
of origin		 Functional
Currency		 As December 31, 2024 As December 31, 2023 As December 31, 2022
Direct Indirect Total Direct Indirect Total Direct Indirect Total
% % % % % % % % %
96.969.680-0 Lan Pax Group S.A. and Subsidiaries Chile US$ 99.9959  0.0041  100.0000  99.9959  0.0041  100.0000  99.9959  0.0041  100.0000 
Foreign Latam Airlines Perú S.A. Peru US$ 23.6200  76.1900  99.8100  23.6200  76.1900  99.8100  23.6200  76.1900  99.8100 
93.383.000-4 Lan Cargo S.A. Chile US$ 99.8940  0.0041  99.8981  99.8940  0.0041  99.8981  99.8940  0.0041  99.8981 
76.717.244-3 Prime Cargo SpA. Chile CLP 0.0000  100.0000  100.0000  0.0000  100.0000  100.0000  0.0000  0.0000  0.0000 
Foreign Connecta Corporation U.S.A. US$ 0.0000  100.0000  100.0000  0.0000  100.0000  100.0000  0.0000  100.0000  100.0000 
Foreign Prime Airport Services Inc. and Subsidiary U.S.A. US$ 0.0000  100.0000  100.0000  0.0000  100.0000  100.0000  0.0000  100.0000  100.0000 
96.951.280-7 Transporte Aéreo S.A. Chile US$ 0.0000  100.0000  100.0000  0.0000  100.0000  100.0000  0.0000  100.0000  100.0000 
96.631.520-2 Fast Air Almacenes de Carga S.A. Chile CLP 0.0000  100.0000  100.0000  0.0000  100.0000  100.0000  0.0000  100.0000  100.0000 
Foreign Laser Cargo S.R.L. (*) Argentina ARS 0.0000  100.0000  100.0000  0.0000  100.0000  100.0000  0.0000  100.0000  100.0000 
Foreign Lan Cargo Overseas Limited and Subsidiaries Bahamas US$ 0.0000  0.0000  0.0000  0.0000  0.0000  0.0000  0.0000  100.0000  100.0000 
96.969.690-8 Lan Cargo Inversiones S.A. and Subsidiary Chile US$ 0.0000  100.0000  100.0000  0.0000  100.0000  100.0000  0.0000  100.0000  100.0000 
96.575.810-0 Inversiones Lan S.A. Chile US$ 99.9000  0.1000  100.0000  99.9000  0.1000  100.0000  99.9000  0.1000  100.0000 
96.847.880-K Technical Training LATAM S.A. Chile CLP 99.8300  0.1700  100.0000  99.8300  0.1700  100.0000  99.8300  0.1700  100.0000 
Foreign Latam Finance Limited Cayman Island US$ 100.0000  0.0000  100.0000  100.0000  0.0000  100.0000  100.0000  0.0000  100.0000 
Foreign Peuco Finance Limited (*) Cayman Island US$ 100.0000  0.0000  100.0000  100.0000  0.0000  100.0000  100.0000  0.0000  100.0000 
Foreign Professional Airline Services INC. U.S.A. US$ 100.0000  0.0000  100.0000  100.0000  0.0000  100.0000  100.0000  0.0000  100.0000 
Foreign Jarletul S.A. Uruguay US$ 0.0000  100.0000  100.0000  0.0000  100.0000  100.0000  0.0000  100.0000  100.0000 
Foreign Latam Travel S.R.L. Bolivia US$ 99.0000  1.0000  100.0000  99.0000  1.0000  100.0000  99.0000  1.0000  100.0000 
76.262.894-5 Latam Travel Chile II S.A. Chile US$ 99.9900  0.0100  100.0000  99.9900  0.0100  100.0000  99.9900  0.0100  100.0000 
Foreign Latam Travel S.A. Argentina ARS 94.0100  5.9900  100.0000  94.0100  5.9900  100.0000  94.0100  5.9900  100.0000 
Foreign Faisán Finance DAC (*) Ireland US$ 100.0000  0.0000  100.0000  0.0000  0.0000  0.0000  0.0000  0.0000  0.0000 
Foreign TAM S.A. and Subsidiaries (**) Brazil BRL 63.0987  36.9013  100.0000  63.0987  36.9013  100.0000  63.0901  36.9099  100.0000 
(*)These subsidiaries have no operations.
(**)As of December 31, 2024, the indirect participation percentage on TAM S.A. and Subsidiaries is from Holdco I S.A., a company over which LATAM Airlines Group S.A. it 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 2018 that allows foreign capital to have up to 100% of the share ownership of a Brazilian Airline.
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b)Financial Information
Statement of financial position Net Income
For the year ended
December 31,
As of December 31, 2024 As of December 31, 2023 2024 2023 2022
Tax No. Company Assets Liabilities Equity Assets Liabilities Equity Gain /(loss)
ThUS$ ThUS$ ThUS$ ThUS$ ThUS$ ThUS$ ThUS$ ThUS$ ThUS$
 
96.969.680-0 Lan Pax Group S.A. and Subsidiaries (*) 462,748  1,933,499  (1,092,261) 487,236  1,835,537  (1,000,622) (122,763) 7,514  (121,673)
Foreign Latam Airlines Perú S.A. 437,768  366,089  16,930  334,481  285,645  48,836  22,861  (4,666) (12,726)
93.383.000-4 Lan Cargo S.A. 490,550  263,747  226,803  391,430  189,019  202,411  27,238  22,677  (1,230)
76.717.244-3 Prime Cargo SpA. 14,806  14,844  (38) 912  —  912  (813) —  — 
Foreign Connecta Corporation 47,583  15,255  32,328  64,054  6,790  57,264  (5,936) 693  14,814 
Foreign Prime Airport Services Inc. and Subsidiary (*) 18,752  15,582  3,169  19,435  17,241  2,194  977  1,380  1,838 
96.951.280-7 Transporte Aéreo S.A. 238,354  121,609  116,745  280,117  151,066  129,051  (10,064) 24,871  (36,190)
96.631.520-2 Fast Air Almacenes de Carga S.A. 25,783  19,771  6,005  14,255  10,455  3,800  3,675  462  1,154 
Foreign Laser Cargo S.R.L. —  —  —  —  1  (1) —  —  — 
Foreign Lan Cargo Overseas Limited and Subsidiaries (*) —  —  —  —  —  —  —  —  (1,287)
96.969.690-8 Lan Cargo Inversiones S.A. and Subsidiary (*) 208,807  116,796  (66,907) 166,503  80,502  (71,744) 6,010  (5,345) (11,901)
96.575.810-0 Inversiones Lan S.A. 1,184  48  1,136  1,238  50  1,188  (53) (36) (14)
96.847.880-K Technical Training LATAM S.A. 1,238  740  498  1,246  893  353  205  165  77 
Foreign Latam Finance Limited 112  208,620  (208,508) 114  208,621  (208,507) (1) (1) 169,582 
Foreign Peuco Finance Limited —  —  —  —  —  —  —  —  — 
Foreign Professional Airline Services INC. 8,508  1,660  6,848  15,571  10,943  4,628  1,960  1,681  258 
Foreign Jarletul S.A. 12  1,101  (1,089) 16  1,101  (1,085) (4) 8  (2)
Foreign Latam Travel S.R.L. 93  —  93  92  —  92  —  5  154 
76.262.894-5 Latam Travel Chile II S.A. 358  1,243  (885) 356  1,239  (883) (2) (16) 2 
Foreign Latam Travel S.A. 3,847  1,623  2,091  4,547  1,554  2,993  (3,563) 940  (6,187)
Foreign Faisán Finance DAC —  —  —  —  —  —  —  —  — 
Foreign TAM S.A. and Subsidiaries (*) 4,070,469  2,557,042  1,512,327  4,239,702  3,027,373  1,212,329  673,648  740,783  (69,932)
(*)The Equity reported corresponds to Equity attributable to owners of the parent company, it does not include Non-controlling participation.
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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); (3) Yamasa Sangyo Aircraft LA1 Kumiai, Yamasa Sangyo Aircraft LA2 Kumiai; and (4) Jun Shan 16, 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, 2023 and December 31, 2024, are detailed below:
(1)Incorporation or acquisition of companies
-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.
-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. through the contribution of made a capital increase where Holdco Colombia I SpA made a contribution through accounts receivable for ThUS$120,410 and with a premiums for the issuance of shares, consequently, there were no significant changes in the shareholder composition.

-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 Linhas 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., 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.
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-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.

-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., 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 in Chile.

-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.

-On March 18, 2024, a capital reduction was carried out in Inversiones Aéreas S.A. through the absorption of accumulated losses in the sum of ThUS$175,140. As a consequence of this decrease in capital, the number of shares was reduced by 6,634,496, without modifying the original participation of its shareholders. This transaction did not generate any effect within the Consolidated Financial Statements.
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-On May 14, 2024, a capital increase was carried out in Aerovías de Integración Regional S.A. by Holdco Colombia I SpA, for an amount of ThUS$45,271, equivalent to 10 shares and with a premiums for the issuance of shares in favor of the Holco Colombia I SpA. As a result of this increase, there were no significant changes in the shareholder composition.

-On September 17, 2024, LATAM Airlines Group S.A. acquired in 1 Euro, 100% of the rights of the company Faisán Finance Designates Activity Company, domiciled in Ireland, for the purposes of acquiring, managing, financing, refinancing, among others.

-On November 8, 2024, the Board of Directors of the subsidiary Connecta Corporation agreed the distribution and payment of dividends of ThUS$19,000 to Lan Cargo S.A., as sole shareholder. This transaction did not generate any effect within the Consolidated Financial Statements.

-At the Extraordinary General Shareholders' Meeting held on December 16, 2024 of the subsidiary Lan Argentina S.A., it was agreed to forgive the debt associated with the preferred dividends accrued and owed by this subsidiary to its shareholders, and to amend the company statute to eliminate the Class "B" Preferred Shares, replacing them in their entirety with ordinary shares. Accrued preferred dividends that were outstanding to shareholders amounted to ThUS$1,019 as of December 15, 2024. At this same Meeting, it was approved to amend the company statute to replace all preferred shares with ordinary shares, with the accrual of preferred dividends being null and void as of this date. This transaction did not generate any effect within the Consolidated Financial Statements.

-At the Extraordinary General Shareholders' Meeting held on December 16, 2024, of the subsidiary Inversora Cordillera S.A., it was agreed to forgive the debt associated with the preferred dividends accrued and owed by said subsidiary to its shareholders, and to amend the company statute to eliminate the Class "A" Preferred Shares, replacing them in their entirety with ordinary shares. The accumulated preferred dividends that were pending payment to shareholders amounted to ThUS$8,580. At this same Meeting, it was approved to amend the company statute to eliminate and replace preferred shares with ordinary shares, with the accrual of preferred dividends being null and void as of this date. This transaction did not generate any effect within the Consolidated Financial Statements.

-On December 17, 2024, a capital increase was carried out in Aerovías de Integración Regional S.A. by Holdco Colombia I SpA, for an amount of ThUS$18,544, equivalent to 10 shares and with a premiums for the issuance of shares in favor of the Holco Colombia I SpA. As a result of this increase, there were no significant changes in the shareholder composition.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The following describes the principal accounting policies adopted in the preparation of these consolidated financial statements.
2.1.    Basis of Preparation
These consolidated financial statements of LATAM Airlines Group S.A. and Subsidiaries as of December 31, 2024 and 2023, 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.
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These consolidated financial statements have been prepared in accordance with the accounting policies used by the Company in the preparation of the 2023 consolidated financial statements, except for the standards and interpretations adopted as of January 1, 2024.
(a)Application of new standards for the year 2024 :
Accounting pronouncements with implementation effective from January 1, 2024:
Issuance Date Effective Date:
(i) Standards and amendments
Amendment to IAS 1: Presentation of financial statements, on classification of liabilities. January 2020 01/01/2024
Amendment to IAS 1: Presentation of financial statements, on noncurrent liabilities with covenants. October 2022 01/01/2024
Amendment to IFRS 16: Leases, on sales with leaseback. September 2022 01/01/2024
Amendments to IAS 7 "Statement of cash flows" and IFRS 7 "Financial Instruments: Information to be Disclosed" May 2023 01/01/2024
The application of these accounting standards as of January 1, 2024, had no significant effect on the Company’s consolidated financial statements.

(b)Accounting pronouncements not in force for the financial year beginning on January 1, 2024:
Issuance Date Effective Date:
(i) Standards and amendments
Amendments to IAS 21: Lack of Exchangeability August 2023 01/01/2025
IFRS 18: Presentation and disclosures in the financial statements April 2024 01/01/2027
Amendment to IFRS 9 and IFRS 7: Classification and Measurement of Financial Instruments May 2024 01/01/2026
IFRS 19 Subsidiaries without Public Accountability: Disclosures May 2024 01/01/2027
The Company's management is evaluating the impacts that the application of IFRS 18 Presentation and disclosures in the financial statements; and the amendments to IFRS 9 and IFRS 7 may have on the consolidated financial statements. Where it is estimated that the adoption of the amendments to IAS 21 and IFRS 19 Subsidiaries without Public Liability: Disclosures, will not have significant effects on the company's consolidated financial statements in the year of its first adoption.
(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.
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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”).

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).

The Bankruptcy Filing for each of the Debtors 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”. Thereafter, 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.

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.

Pursuant to the Plan and Backstop Agreements, between October and November 2022, LATAM obtained secured priority DIP and exit debt for a total amount of US$2.75 billion, structures as follows: (i) a new revolving credit line facility of up to US$500 million (the “Revolving Credit Facility”), (ii) and new term loan B for US$1.1 billion (the “Term Loan”); (iii) notes issued pursuant to Rule 144A and Regulation S of the Securities and Exchange Commission (“SEC”) under the Securities Act of 1933 of the United States of America (the “U.S. Securities Act”) for a total amount of US$450 million and with a scheduled maturity date in 2027 (the “2027 Notes” ); and (iv) bonds issued pursuant to Rule 144A and Regulation S of the SEC under the US Securities Law for a total amount of US$700 million and whit a scheduled maturity date in 2029 (the “2029 Notes”, and together with the Revolving Credit Facility, the Term Loan, and the 2027 Notes, the “Exit Financing"). All the debt instruments comprising the Exit Financing are secured equally and ratably with the same collateral comprised of certain assets of LATAM Parent and its subsidiaries that are obligors under such instruments.

As is usual in this types of restructurings, the Chapter 11 proceedings docket remained open after the Effective Date to complete the conciliation process for certain claims that were still pending as of such date, as well as to resolve certain administrative matters.

On June 29, 2023, the Bankruptcy Court issued a final decree of the Chapter 11 proceedings ordering the closure of Case Number 20-11254 and its file (the “Final Decree”). The foregoing, as a result of the resolution of substantially all remaining issues of the Chapter 11 proceedings and all appeals of the Confirmation Order.

Subsequent to the Effective Date, the Exit Financing has been subject to the following amendments:

1.The Revolving Credit Facility has been amended on two occasions.

a.First, as reported by material fact dated July 15, 2024, the Revolving Credit Facility was modified in order to, among other things, (i) extend the scheduled maturity date from November 2026 to July 15, 2029; provided, however, that it will be payable in advance earlier on the date that is 180 days prior to the maturity date of any of the outstanding financings that share collateral with the Revolving Credit Facility, to the extent that as of that date, such other financings have not been refinanced or deferred; (ii) increase the amount of the Revolving Credit Facility from US$500 million to US$750 million; (iii) eliminate references to the Chapter 11 proceedings; (iv) include additional financiers to the Revolving Credit Line; and (v) modify certain commercial conditions of the Revolving Credit Facility in relation to interest rates and fees and

b.In second place, the Revolving Credit Facility was modified on October 7, 2024,to, among other things, amend certain covenants and incorporate certain provisions relates to certain collateral release events described below.

2.2030 Notes and Refinancing of the 2027 Notes and the Term Loan
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As reported through material fact dated October 1, 2024 and October 15, 2024, on October 15, 2024, LATAM Parent issued and placed in international markets, secured notes for a principal amounts of US$1.4 billion, at an annual interest rate of 7.875% and maturing in the year 2030 (the “2030 Bonds”), under the Rule 144-A and SEC Regulation S, under the US Securities Act. The Notes are considered Exit Financing and, thus, are secured with the same collateral of the other instruments comprising the Exit Financing. Additional, the 2030 Notes' indenture also includes provisions related to certain collateral release events described below.

The proceeds obtained from issuance of the 2030 Notes, together with the additional available cash of LATAM Parent of US$200 million, were used to pay in full and terminate the Term Loan and 2027 Notes.

If any, the remainder of the funds obtained under the 2030 Bonds and the cash reserves currently maintained by LATAM Parent must be used for working capital and other general corporate purposes.

As a result of the above, there was an impact on expenses in the consolidated income statement for an approximate amount of US$134 million, of which US$45 million directly impacted cash during the fourth quarter of 2024.

3.     Additional Collateral Release

The Revolving Credit Facility and the 2030 Notes indenture include substantially the same provisions under which LATAM Parent may in the future, and after satisfying certain conditions, release the liens over certain collateral, including the cargo-business assets, the gates and slots. Any such collateral release is subject to numerous conditions, including that (a) after giving pro forma effect to the release, the asset coverage ratio set forth in those instruments is not less than 1.6x and (b) the release is permitted under all Exit Financings (and any junior debt secured by the same collateral) and, after giving effect to such release, the released collateral does no longer secure any such secured debts.

The referred collateral release provisions have not been included yet in the 2029 Notes indenture and, thus, any such release cannot be implemented until either the 2029 Notes indenture is amended to include such provisions or the 2029 Notes are paid in full.

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.


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(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 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 were recognized in the 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.
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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.
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.

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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.


(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.
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.
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(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.

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.
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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 this 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.
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.

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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 and compliance with contractual agreements at the closing date of these financial statements.



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 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.

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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. When deferred taxes arise from the initial recognition of a liability or an asset in a transaction other than a business combination, which at the time of the transaction does not affect either the accounting result or the tax profit or loss, they are recorded. 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 or arises from a business combination. 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 derived from the implementation of the so-called “GloBE or Pillar Two rules”, through which multinational groups are expected to pay a minimum effective tax rate of 15%. Based on the analysis carried out, we have concluded that, either because they fall outside the scope of the GloBE Rules (as they do not meet the criteria to be considered a “Constituent Entity” for the purposes of the Pillar) or they are located in jurisdictions that do not have implemented such GloBE Rules, no entity, permanent establishment or vehicle of the LATAM Group will have a financial impact due to the GloBE Rules in fiscal year 2024. The LATAM Group constantly evaluates these potential impacts, including the recent Law 15.079/2024 published in Brazil during the month of December, which makes definitive Provisional Measure No. 1.262/2024 published on October 3, 2024 by the Federal Government. This law introduces the Pillar Two rules in the country without relevant changes with respect to the initial provisional measure, incorporating certain aspects of the GloBE rules into Brazilian tax legislation. The new rules in Brazil will come into effect in fiscal year 2025. At the closing of these financial statements, the group does not present expenses (income) for current taxes related to the income tax of Pillar Two.

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, relating to the recognition and disclosure of deferred tax assets and liabilities related to Pillar Two income taxes.

2.17.    Employee benefits
(a)    Personnel vacations

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

(b)    Share-based compensation

The compensation plans implemented based on the 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.
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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.

(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.
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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 (*).

(*) The current contract with the financial partner in Chile will end on December 31, 2025, and the Company is evaluating alternatives that, in the best interest of the company, contribute to further improve the LATAMPASS Program and its partners.


(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.
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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.

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.

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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; and once done, recovery is requested to the lessor. At the end of the contract period, there is comparison between the reserves that have been paid and required return conditions, and compensation between the parties are made if applicable.

The unscheduled maintenance of aircraft and engines, as well as minor maintenance, are charged to results as incurred.
2.23.    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, 2024, the Company recognized losses of US$(18.1) million for fuel hedging net of premiums in the costs of sales for the year. 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.

As of December 31, 2024, the market value of the fuel positions amounted to US$7.7 million (positive). At the end of December 2023, this market value was US$22.1 million (positive).






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The following tables show the level of hedge for different periods:
Positions as of December 31, 2024 (*) Maturities
Q125 Q225 Q325 Q425 Total
Percentage of coverage over the expected volume of consumption 51  % 47  % 34  % 30  % 41  %
Positions as of December 31, 2023 (*) Maturities
Q124 Q224 Q324 Q424 Total
Percentage of coverage over the expected volume of consumption 35  % 32  % 30  % 22  % 30  %
(*) 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$5 per barrel in the underlying reference price curve at the end of December 2024 and the end of December of 2023 . The projection period was defined until the end of the last fuel hedging contract in force, being the last business day of the second half of 2025.
Benchmark price
(US$ per barrel)		 Positions as of December 31, 2024
effect on Equity
(MUS$)		 Positions as of December 31, 2023
effect on Equity
(MUS$)
+5 +15.7 +10.8
-5 -12.8 -10.7
Given the fuel hedging structure for the year 2024, 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$156.7 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$138.1 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.
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Mitigation:

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


Exchange Rate Hedging Results (FX):
As of December 31, 2024, the Company recognized gains of US$10.0 million for FX hedging derivatives net of premiums reflected in exchange rate. At the end of December of 2023, the Company recognize gains for US$10.1 million for FX hedging derivatives reflected in exchange rate.

As of December 31, 2024, the market value of hedging FX derivative positions is US$3.1 million (positive). As of December 31, 2023, the market value of the hedging FX derivative positions was US$1.5 million (negative). As of December 31, 2024, the Company has current hedging FX derivatives for US$165 million. As of December 31, 2023, the Company holds current hedging FX derivatives of US$404 million.

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, 2024
(MUS$)		 Effect on equity as of
December 31, 2023
(MUS$)
-10% -3.6 -10.0
+10% +1.0 +19.0

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 assets and liabilities is expressed in US dollars. Therefore, when converting financial assets and liabilities, from US dollar to Brazilian reais, 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, 2024
(MUS$)		 Effect on Income Statement
for the year ended December 31, 2023
(MUS$)
-10% -54.7 +6.6
+10% +54.7 -6.6


Impact of the exchange rate variation in the Equity, from translating the subsidiaries financial statements into US Dollars (Cumulative Translate Adjustment).

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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.

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, 2024
MUS$		 Effect at December 31, 2023
MUS$
-10% +318.51 +327.01
+10% -260.60 -267.56

(iii)    Interest -rate risk:

Exposure:

The Company has exposure to fluctuations in interest rates affecting the 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”) .

Of the company's financial debt subject to variable rates, all of the contracts maintain exposure to the SOFR reference rate.
Mitigation:
Currently, 76% (50% as of December 31, 2023) of the debt is fixed. 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, 2024, the Company did not recognize any losses for premiums paid. At the end of December of 2023, losses of US$1.8 million were recognized corresponding to the recognition in profit for premiums paid.

As of December 31, 2024, the value of the interest rate derivative positions corresponding to operating leases to fix the income of future plane arrivals amounted to US$4.68 million (negative), at the end of December 2023 the Company did not have interest rate derivatives outstanding.
As of December 31, 2024, the Company recognized an increase in the right-of-use asset due to the expiration of derivatives associated with some aircraft leases amounted to US$0.1 million. 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$1.9 million (positive) was recognized. At the end of December of 2023, the Company recognized US$1.1 (positive) million for this same concept.

As of December 31, 2024, the Company settled derivatives associated with hedges of leased aircraft for US$0.1 million (negative)
Sensitivity analysis:
The following table shows the sensitivity of changes in financial obligations that are not hedged against interest-rate variations. These changes are considered reasonably possible, based on current market conditions each date.
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Increase (decrease)
of future curve
SOFR rate		 Positions as of December 31, 2024 effect on Income (Loss) before taxes
(MUS$)		 Positions as of December 31, 2023 effect on Income (Loss) before tax
(MUS$)
+100 basis points -9.28 -20.27
-100 basis points +9.28 +20.27

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.
Increase (decrease)
interest rate curve		 Positions as of December 31, 2024
effect on equity
(MUS$)		 Positions as of December 31, 2023
effect on equity
(MUS$)
+100 basis points +5.9 —
-100 basis points -6.3 —
The calculations were made by vertically increasing (decreasing) 100 basis points of the interest rate curve, both scenarios being reasonably possible according to historical market conditions.

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 period ended December 31, 2024, the Company did not record any losses 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, 2024 has experienced an decreased by 4% compared to the balance as of December 31, 2023, mainly due to an decrease in passenger transportation operations (travel agencies and corporate) that decreased by 2% in its sales, mainly affecting the payment methods credit card 2%, and cash sales 1%. In relation to the cargo business, it presented a increase in its operations of 14% compared to December 2023. There was special 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 2024 had a decrease of 14% compared to the end of December 2023, 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.

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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 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, Billing Settlement Plan (“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 Aéreas S.A.

Credit quality of financial assets

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

To reduce the credit risk associated with operational activities, the Company has established credit limits to abridge the exposure of their debtors which are monitored permanently. 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.
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As of December 31, 2024, the balance of liquid funds is US$1,958 million (US$1,715 million as of December 31, 2023), which are invested in short-term instruments through financial entities with a high credit rating classification.

As of December 31, 2024, LATAM maintains three Revolving Credit Facility for a total of US$1,850 million, one for an amount of US$800 million, another for an amount of US$750 million and the last one for an amount of US$300 million. The first two of them are fully available and the last one is partially drawn with US$25 million available for the company at any time. With this, the sum of the three committed credit lines amounts to a total of US$1,575 million. The first of these lines is secured by and subject to the availability of certain collateral (i.e. aircraft, engines and spare parts). The second one, is secured by certain intangible assets of the Company, which are shared with both international bonds. The third one is secured by Spare Engines (See Note 31)
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Table of Contents
Class of liability for the analysis of liquidity risk ordered by date of maturity as of December 31, 2024
Debtor: LATAM Airlines Group S.A., Tax No. 89.862.200-2 Chile
Tax No. Creditor Creditor
country		 Currency Up to
90
days		 More than
90 days
to one
year		 More than
one to
three
years		 More than
three to
five
years		 More than
five
years		 Total Nominal
value		 Amortization Annual
Effective
rate		 Nominal
rate
ThUS$ ThUS$ ThUS$ ThUS$ ThUS$ ThUS$ ThUS$ % %
Obligations with the public
97.036.000-K SANTANDER Chile UF —  2,970  5,889  5,889  167,830  182,578  147,217  To the expiration 2.00  2.00 
0-E WILMINGTON TRUST COMPANY U.S.A. US$ —  203,875  407,750  1,107,750  1,455,125  3,174,500  2,100,000  To the expiration 10.69  9.71 
97.036.000-K SANTANDER Chile US$ —  —  —  —  6  6  3  To the expiration 1.00  1.00 
Guaranteed obligations
0-E BNP PARIBAS U.S.A. US$ 5,996  17,263  45,343  43,928  104,940  217,470  159,624  Quarterly 6.03  6.03 
0-E WILMINGTON TRUST COMPANY U.S.A. US$ 5,770  17,015  43,945  41,683  33,697  142,110  115,727  Quarterly/Monthly 7.73  7.73 
0-E BOCOMM Ireland US$ 2,724  8,158  20,911  19,790  110,277  161,860  100,000  Quarterly 6.42  6.42 
Other guaranteed obligation
0-E EXIM BANK U.S.A. US$ 5,447  16,392  43,700  38,590  14  104,143  99,109  Quarterly 2.29  2.05 
0-E MUFG U.S.A. US$ —  —  —  —  —  —  —  Quarterly —  — 
0-E CREDIT AGRICOLE France US$ 4,097  13,097  35,021  292,571  —  344,786  275,012  To the expiration 6.63  6.63 
Financial lease
0-E NATIXIS France US$ 10,319  29,916  77,088  112,238  24,493  254,054  191,383  Quarterly 6.73  6.73 
0-E US BANK U.S.A. US$ 11,210  6,710  —  —  —  17,920  17,492  Quarterly 4.88  3.40 
0-E EXIM BANK U.S.A. US$ 36,227  82,640  180,932  108,316  36,702  444,817  413,072  Quarterly 4.00  3.17 
0-E BANK OF UTAH U.S.A. US$ 5,981  18,001  51,307  60,431  86,947  222,667  161,870  Monthly 10.71  10.71 
TOTAL 87,771  416,037  911,886  1,831,186  2,020,031  5,266,911  3,780,509     





Class of liability for the analysis of liquidity risk ordered by date of maturity as of December 31, 2024
Debtor: TAM S.A., Tax No. 02.012.862/0001-60, Brazil.
Tax No. Creditor Creditor
country		 Currency 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		 Amortization Annual
Effective
rate		 Nominal
rate
ThUS$ ThUS$ ThUS$ ThUS$ ThUS$ ThUS$ ThUS$ % %
Financial leases
0-E NATIXIS France US$ 510  1,530  4,080  7,846  —  13,966  13,966  Quarterly —  — 
TOTAL 510  1,530  4,080  7,846  —  13,966  13,966 

Class of liability for the analysis of liquidity risk ordered by date of maturity as of December 31, 2024
Debtor: LATAM Airlines Group S.A., Tax No. 89.862.200-2, Chile.
Tax No. Creditor Creditor
country		 Currency 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		 Amortization Annual
Effective
rate		 Nominal
rate
ThUS$ ThUS$ ThUS$ ThUS$ ThUS$ ThUS$ ThUS$ % %
Lease Liability
AIRCRAFT OTHERS US$ 144,076  507,305  1,171,362  958,537  1,718,984  4,500,264  3,174,757  —  —  — 
OTHER ASSETS OTHERS US$ 3,717  11,276  31,723  27,462  90,051  164,229  88,854  —  —  — 
CLP 1,535  4,604  11,441  10,263  29,935  57,778  36,151  —  —  — 
UF 1,264  3,757  9,241  6,523  3,631  24,416  21,425  —  —  — 
COP 344  1,016  1,784  56  —  3,200  2,829  —  —  — 
EUR 31  92  58  8  —  189  183  —  —  — 
BRL 3,072  8,322  18,727  12,425  18,256  60,802  38,082  —  —  — 
MXN 87  217  11  —  —  315  299  —  —  — 
Trade and other accounts payables
- OTHERS OTHERS US$ 1,291,259  6,478  —  —  —  1,297,737  709,933  —  —  — 
CLP 65,753  193  —  —  —  65,946  64,317  —  —  — 
BRL 224,513  6,621  —  —  —  231,134  409,474  —  —  — 
Other currency 172,749  4,534  —  —  —  177,283  118,189  —  —  — 
Accounts payable to related parties currents
Foreign Qatar Airways Qatar US$ —  3,576  —  —  —  3,576  3,576  —  —  — 
Foreign Delta Air Lines, Inc. U.S.A US$ —  9,299  —  —  —  9,299  9,299  —  —  — 
Total 1,908,400  567,290  1,244,347  1,015,274  1,860,857  6,596,168  4,677,368     
Total consolidated 1,996,681  984,857  2,160,313  2,854,306  3,880,888  11,877,045  8,471,843     

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. Creditor Creditor
country		 Currency 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		 Amortization Annual
Effective
rate		 Nominal
rate
ThUS$ ThUS$ ThUS$ ThUS$ ThUS$ ThUS$ ThUS$ % %
Bank loans                    
97.023.000-9 GOLDMAN SACHS U.S.A. US$ 44,721  127,878  302,953  1,192,355  —  1,667,907  1,089,000  Quarterly 20.31  15.04 
0-E SANTANDER Spain US$ —  —  —  —  —  —  —  Quarterly —  — 
Obligations with the public
97.030.000-7 SANTANDER Chile UF —  3,230  6,409  6,409  182,647  198,695  160,214  At Expiration 2.00  2.00 
0-E WILMINGTON TRUST COMPANY U.S.A. US$ —  153,813  307,625  697,438  793,625  1,952,501  1,150,000  At Expiration 15.00  13.38 
97.036.000-K SANTANDER Chile US$ —  —  —  —  6  6  3  At Expiration 1.00  1.00 
Guaranteed obligations
0-E BNP PARIBAS U.S.A. US$ 5,940  17,082  41,319  40,578  120,730  225,649  171,704  Quarterly 6.98  6.98 
0-E WILMINGTON TRUST COMPANY U.S.A. US$ 5,948  16,928  42,098  40,736  54,056  159,766  132,585  Quarterly / Monthly 8.76  8.76 
Other guaranteed obligation
0-E EXIM BANK U.S.A. US$ 452  1,348  43,531  43,494  16,665  105,490  99,109  Quarterly 2.29  2.05 
0-E MUFG U.S.A. US$ 12,919  37,926  16,649  —  —  67,494  64,102  Quarterly 7.11  7.11 
0-E CREDIT AGRICOLE France US$ 6,451  33,576  75,714  243,842  —  359,583  266,768  At Expiration 9.43  9.43 
Financial lease
0-E NATIXIS France US$ 10,653  30,443  73,474  70,443  94,995  280,008  215,357  Quarterly 7.58  7.58 
0-E US BANK U.S.A. US$ 17,984  50,411  17,681  —  —  86,076  84,177  Quarterly 4.41  3.16 
0-E EXIM BANK U.S.A. US$ 3,262  9,389  216,015  148,582  75,118  452,366  413,072  Quarterly 4.13  3.31 
0-E BANK OF UTAH U.S.A. US$ 5,891  17,705  47,590  54,357  117,597  243,140  172,582  Monthly 10.71  10.71 
Others loans
0-E OTHERS (*) Chile US$ 104  —  —  —  —  104  104  At Expiration —  — 
TOTAL 114,325  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.




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. Creditor Creditor
country		 Currency 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		 Amortization Annual
Effective
rate		 Nominal
rate
ThUS$ ThUS$ ThUS$ ThUS$ ThUS$ ThUS$ ThUS$ % %
Financial Leases
0-E NATIXIS France US$ 510  1,530  4,080  9,886  —  16,006  16,006  Semiannual/Quarterly —  — 
Bank loans
TOTAL 510  1,530  4,080  9,886  —  16,006  16,006 

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. Creditor Creditor
country		 Currency 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		 Amortization Annual
Effective
rate		 Nominal
rate
ThUS$ ThUS$ ThUS$ ThUS$ ThUS$ ThUS$ ThUS$ % %
Lease Liability
AIRCRAFT OTHERS US$ 139,599  419,554  1,116,682  928,238  1,685,262  4,289,335  2,894,195  —  —  — 
OTHER ASSETS OTHERS US$ 2,523  7,276  14,863  846  1,404  26,912  25,680  —  —  — 
CLP 19  57  94  —  —  170  135  —  —  — 
UF 557  1,255  2,906  2,426  5,099  12,243  11,097  —  —  — 
COP 122  308  266  148  —  844  667  —  —  — 
EUR 63  101  172  23  —  359  296  —  —  — 
BRL 2,314  6,871  15,177  14,438  25,742  64,542  35,841  —  —  — 
MXN 24  71  8  —  —  103  84  —  —  — 
Trade and other accounts payables
OTHERS OTHERS US$ 846,541  7,063  —  —  853,604  709,933  —  —  — 
CLP 44,593  8,072  —  —  —  52,665  64,317  —  —  — 
BRL 309,999  7,671  —  —  —  317,670  409,474  —  —  — 
Other currency 178,740  5,522  —  —  —  184,262  118,189  —  —  — 
Accounts payable to related parties currents
Foreign Qatar Airways Qatar US$ —  2,312  —  —  —  2,312  2,312  —  —  — 
Foreign Delta Air Lines, Inc. USA US$ —  5,132  —  —  —  5,132  5,132  —  —  — 
Total 1,525,094  471,265  1,150,168  946,119  1,717,507  5,810,153  4,277,352     
Total consolidated 1,639,929  972,524  2,345,306  3,494,239  3,172,946  11,624,944  8,312,135     

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The Company has fuel, interest rate and exchange rate hedging strategies involving derivatives contracts with different financial institutions.
As of December 31, 2024, the Company maintains guarantees for US$0.5 million corresponding to derivative transactions. The decrease is due to: i) Lower collateral transfers to bank counterparties at the time of contract closing and ii) changes in fuel prices, exchange rates and interest rates. At the end of 2023, the Company had guarantees for US$12.8 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 Company's international credit rating is the result of its ability to meet its long-term financial commitments. As of December 31, 2024, The Company has a national scale rating of BBB+ with positive outlook by Fitch and a rating of BBB with positive outlook by Feller. On an international scale, it has a rating of BB- with a positive outlook by Standard & Poor's, a rating of Ba2 with a stable outlook by Moody's and a rating of BB- with a positive outlook by Fitch.

3.3.    Estimates of fair value.
At December 31, 2024, 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.

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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, 2024 As of December 31, 2023
Fair value measurements using
 values considered as		 Fair value measurements using
 values considered as
Fair value Level I Level II Level III Fair value Level I Level II Level III
ThUS$ ThUS$ ThUS$ ThUS$ ThUS$ ThUS$ ThUS$ ThUS$
Assets
Cash and cash equivalents 77,313  77,313  —  —  89,706  89,706  —  — 
Short-term mutual funds 77,313  77,313  —  —  89,706  89,706  —  — 
               
Other financial assets, current 15,565  —  15,565  —  22,136  —  22,136  — 
Fair value interest rate derivatives 4,676  —  4,676  —  —  —  —  — 
Fair value of fuel derivatives 7,747  —  7,747  —  22,136  —  22,136  — 
Fair value of foreign currency derivative 3,142  —  3,142  —  —  —  —  — 
               
Liabilities                
Other financial liabilities, current —  —  —  —  1,544  —  1,544  — 
Fair value of foreign currency derivatives —  —  —  —  1,544  —  1,544  — 














F-42
Table of Contents


Additionally, at December 31, 2024, 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, 2024 As of December 31, 2023
Book value Fair value Book value Fair value
ThUS$ ThUS$ ThUS$ ThUS$
Cash and cash equivalents 1,880,475  1,880,475  1,625,055  1,625,055 
Cash on hand 1,885  1,885  2,019  2,019 
Bank balance 664,173  664,173  552,187  552,187 
Overnight 103,761  103,761  75,236  75,236 
Time deposits 1,110,656  1,110,656  995,613  995,613 
Other financial assets, current 51,730  51,730  152,683  152,683 
Other financial assets 51,730  51,730  152,683  152,683 
Trade debtors, other accounts receivable and Current accounts receivable 1,163,707  1,163,707  1,385,910  1,385,910 
Accounts receivable from entities related, current 25  25  28  28 
Other financial assets, non-current 53,772  53,772  34,485  34,485 
Accounts receivable, non-current 12,342  12,342  12,949  12,949 
Other current financial liabilities 635,213  837,181  594,519  867,791 
Accounts payable for trade and other accounts payable, current 2,133,572  2,133,572  1,765,279  1,765,279 
Accounts payable to entities related, current 12,875  12,875  7,444  7,444 
Other financial liabilities, non current 6,515,238  6,361,620  6,341,669  6,174,294 
Accounts payable, non current 491,762  491,762  418,587  418,587 

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.
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Table of Contents
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.


(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.






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(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, 2024, deferred revenue associated with air tickets sold amounts to ThUS$2,012,661 (ThUS$2,009,242 as of December 31, 2023). An hypothetical change of one percentage point in the behavior of the passenger regarding the use would impact of up to ThUS$10,016 per month (ThUS$10,150 as of December 31, 2023).
(e)Valuation of miles and points awarded to holders of loyalty programs, pending use.
As of December 31, 2024, deferred income associated with the LATAM Pass loyalty program from Spanish-speaking countries increase to ThUS$949,495 (ThUS$1,099,580 as of December 31, 2023). An hypothetical change of one percentage point in the probability of redemption would translate into a cumulative impact of ThUS$33,479 on the results of 2024 (ThUS31,510 as of December 31, 2023). Deferred income associated with the LATAM Pass Brazil loyalty program increase to ThUS$203,058 as of December 31, 2024 (ThUS$179,151 as of December 31, 2023). An hypothetical change of one percentage point in the exchange probability would result in an accumulated impact of ThUS$5,537 on the results of 2023 (ThUS$5,125 as of December 31, 2023).

The company, in conjunction with an external consultant, estimates the probability of non-use based on a predictive model, according to the redemption behaviors and validity of miles and points using significant judgments and critical assumptions which consider the historical use activity and the expected use pattern.

(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.
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(i)Discount rate
To determine the present value of lease payments, the Company uses the implicit rate in the contracts when it is easily determinable. Otherwise, it uses the lessee's estimated incremental borrowing rate, which is derived from the information available at the lease commencement date. We consider our recent debt issuances as well as publicly available data for instruments with similar characteristics when calculating our incremental borrowing rates. A one percentage point decrease in our estimate of the rates used in determining the current lease liabilities for the registered fleet as of December 31, 2024, would increase the lease liability by approximately US$119 million (US$111 million as of December 31, 2023).

(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.

These estimates are made based on the best information available on the events analyzed.

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.

NOTE 5 - SEGMENT INFORMATION
As of December 31, 2024, 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 December 31,
2024 2023 2022
ThUS$ ThUS$ ThUS$
Peru 1,127,532  988,908  858,957 
Argentina 239,369  244,413  206,856 
U.S.A. 1,324,008  1,044,822  1,058,107 
Europe 957,042  800,897  768,980 
Colombia 669,206  662,263  540,231 
Brazil 5,512,471  5,006,377  3,724,466 
Ecuador 364,960  332,801  248,454 
Chile 1,927,847  1,898,150  1,514,645 
Asia Pacific and rest of Latin America 710,608  661,910  441,825 
Income from ordinary activities 12,833,043  11,640,541  9,362,521 
Other operating income 200,669  148,641  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.
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NOTE 6 - CASH AND CASH EQUIVALENTS
As of
December 31, 2024		 As of
December 31, 2023
ThUS$ ThUS$
Cash on hand 1,885  2,019 
Bank balances (1) 664,173  552,187 
Overnight 103,761  75,236 
Total Cash 769,819  629,442 
Cash equivalents    
Time deposits 1,110,656  995,613 
Mutual funds 77,313  89,706 
Total cash equivalents 1,187,969  1,085,319 
Total cash and cash equivalents 1,957,788  1,714,761 

(1) As of December 31, 2024, within the item bank balances are ThUS$590,463 related to banks accounts that pay interest to the Company for the daily or monthly balances (ThUS$391,966 as of December 31, 2023)


Cash and cash equivalents are denominated in the following currencies:
Currency As of
December 31, 2024		 As of
December 31, 2023
ThUS$ ThUS$
Argentine peso 4,228  3,438 
Brazilian real 347,041  520,796 
Chilean peso 17,943  47,933 
Colombian peso 19,042  36,326 
Euro 15,721  25,329 
US Dollar 1,508,548  1,020,467 
Pound Sterling 2,069  5,073 
Mexican peso 4,222  8,159 
R.P. Chinese Yuan 21,585  20,801 
Other currencies 17,389  26,439 
Total 1,957,788  1,714,761 
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NOTE 7 - FINANCIAL INSTRUMENTS
Financial instruments by category
As of December 31, 2024
Assets Measured at amortized
cost		 At fair value
with changes
in results		 Hedge
derivatives		 Total
  ThUS$ ThUS$ ThUS$ ThUS$
Cash and cash equivalents 1,880,475  77,313  —  1,957,788 
Other financial assets, current 51,730  —  15,565  67,295 
Trade and others accounts receivable, current 1,163,707  —  —  1,163,707 
Accounts receivable from related entities, current 25  —  —  25 
Other financial assets, non current 53,772  —  —  53,772 
Accounts receivable, non current 12,342  —  —  12,342 
Total 3,162,051  77,313  15,565  3,254,929 
Liabilities Measured at
amortized
cost		 At fair value
with changes
in results		 Hedge
derivatives		 Total
  ThUS$ ThUS$ ThUS$ ThUS$
Other financial liabilities, current 635,213  —  —  635,213 
Trade and others accounts payable, current 2,133,572  —  —  2,133,572 
Accounts payable to related entities, current 12,875  —  —  12,875 
Other financial liabilities, non-current 6,515,238  —  —  6,515,238 
Accounts payable, non-current 491,762  —  —  491,762 
Total 9,788,660  —  —  9,788,660 
As of December 31, 2023
Assets Measured at
amortized
cost		 At fair value
with changes
in results		 Hedge
derivatives		 Total
  ThUS$ ThUS$ ThUS$ ThUS$
Cash and cash equivalents 1,625,055  89,706  —  1,714,761 
Other financial assets, current 152,683  —  22,136  174,819 
Trade and others accounts receivable, current 1,385,910  —  —  1,385,910 
Accounts receivable from related entities, current 28  —  —  28 
Other financial assets, non current 34,485  —  —  34,485 
Accounts receivable, non current 12,949  —  —  12,949 
Total 3,211,110  89,706  22,136  3,322,952 
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Liabilities Measured at
amortized
cost		 At fair value
with changes
in results		 Hedge
derivatives		 Total
  ThUS$ ThUS$ ThUS$ ThUS$
Other financial liabilities, current 594,519  —  1,544  596,063 
Trade and others accounts payable, current 1,765,279  —  —  1,765,279 
Accounts payable to related entities, current 7,444  —  —  7,444 
Other financial liabilities, non-current 6,341,669  —  —  6,341,669 
Accounts payable, non-current 418,587  —  —  418,587 
Total 9,127,498  —  1,544  9,129,042 



NOTE 8 - TRADE AND OTHER ACCOUNTS RECEIVABLE CURRENT, AND NON- CURRENT ACCOUNTS RECEIVABLE
  As of December 31, 2024 As of December 31, 2023
  ThUS$ ThUS$
Trade accounts receivable 1,132,923  1,185,792 
Other accounts receivable 99,063  277,845 
Total trade and other accounts receivable 1,231,986  1,463,637 
Less: Expected credit loss (55,937) (64,778)
Total net trade and accounts receivable 1,176,049  1,398,859 
Less: non-current portion – accounts receivable (12,342) (12,949)
Trade and other accounts receivable, current 1,163,707  1,385,910 

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, 2024 As of December 31, 2023
Portfolio maturity Expected
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 date 1  % 961,546 (12,550) 1  % 1,022,845 (12,672)
From 1 to 90 days 1  % 122,350 (1,438) 3  % 102,977 (2,989)
From 91 to 180 days 15  % 6,510 (978) 25  % 8,350 (2,048)
From 181 to 360 days 67  % 4,960 (3,325) 44  % 7,868 (3,491)
Over 360 days 100  % 37,557 (37,646) 100  % 43,752 (43,578)
Total   1,132,923 (55,937)   1,185,792 (64,778)

(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.


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Currency balances composition of Trade and other accounts receivable and non-current accounts receivable are as follow:
Currency As of December 31, 2024 As of December 31, 2023
  ThUS$ ThUS$
Argentine Peso 8,968  13,827 
Brazilian Real 722,208  825,749 
Chilean Peso 71,628  75,050 
Colombian Peso 16,032  12,720 
Euro 96,438  90,699 
US Dollar 224,169  344,347 
Australian Dollar 5,457  5,097 
Japanese Yen 4,998  4,695 
Pound Sterling 8,488  3,390 
Peruvian Sol 699  7,640 
Korean Won 309  5,882 
Other Currencies 16,655  9,763 
Total 1,176,049  1,398,859 

The movements of the expected credit losses of the trade accounts receivables are as follows:
  Opening balance Write-offs (Increase) Decrease Closing balance
Periods ThUS$ 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)
From January 1 to December 31, 2024 (64,778) 4,578  4,263  (55,937)
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, 2024 As of December 31, 2023
  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 receivable 1,132,923  (55,937) 1,076,986  1,185,792  (64,778) 1,121,014 
Other accounts receivable 99,063  —  99,063  277,845  —  277,845 
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.

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NOTE 9 - ACCOUNTS RECEIVABLE FROM/PAYABLE TO RELATED ENTITIES
(a)Accounts receivable
Tax No. Related party Relationship Country of origin Currency As of
December 31, 2024		 As of December 31, 2023
          ThUS$ ThUS$
76.335.600-0 Parque de Chile S.A. Related director Chile CLP 2  2 
96.810.370-9 Inversiones Costa Verde S.A. Related director Chile CLP 21  25 
76.115.378-1 Costa Verde Portafolio S.A. Related director Chile CLP 2  — 
Foreign Inversora Aeronáutica Argentina S.A. Related director Argentina ARS —  1 
Total current assets       25  28 
(b)Current accounts payable
          Current liabilities
Tax No. Related party Relationship Country of origin Currency As of
December 31, 2024		 As of
December 31, 2023
ThUS$ ThUS$
Foreign Qatar Airways Indirect shareholder Qatar US$ 3,576  2,312 
Foreign Delta Air Lines, Inc. Shareholder U.S.A. US$ 9,299  5,132 
  Total current liabilities       12,875  7,444 

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 2024 correspond from 30 days to 1 year of maturity, and the nature of the settlement of transactions are monetary.
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NOTE 10 - INVENTORIES
The composition of Inventories is as follows:
  As of
December 31, 2024		 As of
December 31, 2023
  ThUS$ ThUS$
Technical stock (*) 390,259  540,342 
Non-technical stock (**) 48,271  52,538 
Total 438,530  592,880 

(*) 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, 2024		 As of
December 31, 2023
  ThUS$ ThUS$
Provision for obsolescence Technical stock 76,167  45,621 
Provision for obsolescence Non-technical stock 8,700  5,228 
Total 84,867  50,849 

The resulting amounts do not exceed the respective net realization values.
As of December 31, 2024, the Company registered ThUS$281,792 (ThUS$296,423 for the period ended December 31, 2023) in the income statements, mainly related to on-board consumption and maintenance, which is part of the Cost of sales.
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NOTE 11 - OTHER FINANCIAL ASSETS
(a)The composition of other financial assets is as follows:
  Current Assets Non-current assets Total Assets
  As of December 31, 2024 As of December 31, 2023 As of December 31, 2024 As of December 31, 2023 As of December 31, 2024 As of December 31, 2023
  ThUS$ ThUS$ ThUS$ ThUS$ ThUS$ ThUS$
(1) Other financial assets
Deposits in guarantee (aircraft) 23,057  31,624  32,214  9,736  55,271  41,360 
Guarantees for margins of derivatives 466  12,829  —  —  466  12,829 
Other investments —  —  493  494  493  494 
Other guarantees given 28,207  108,230  21,065  24,255  49,272  132,485 
Subtotal of other financial assets 51,730  152,683  53,772  34,485  105,502  187,168 
(2) Hedging derivative asset
            
Fair value of interest rate derivatives 4,676  —  —  —  4,676  — 
Fair value of foreign currency derivatives 3,142  —  —  —  3,142  — 
Fair value of fuel price derivatives 7,747  22,136  —  —  7,747  22,136 
Subtotal of derivative assets 15,565  22,136  —  —  15,565  22,136 
Total Other Financial Assets 67,295  174,819  53,772  34,485  121,067  209,304 

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 currency As of
December 31, 2024		 As of
December 31, 2023
  ThUS$ ThUS$
Brazilian real 13,323  18,767 
Chilean peso 3,006  6,440 
Colombian peso 1,216  1,461 
Euro 4,646  7,974 
U.S.A dollar 96,359  171,852 
Other currencies 2,517  2,810 
Total 121,067  209,304 
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NOTE 12 - OTHER NON-FINANCIAL ASSETS
The composition of other non-financial assets is as follows:
  Current assets Non-current assets Total Assets
  As of
December 31, 2024		 As of
December 31, 2023		 As of
December 31, 2024		 As of
December 31, 2023		 As of
December 31, 2024		 As of
December 31, 2023
  ThUS$ ThUS$ ThUS$ ThUS$ ThUS$ ThUS$
(a) Advance payments
Aircraft insurance and other 31,465  25,992  —  —  31,465  25,992 
Others 7,097  3,740  24,156  5,740  31,253  9,480 
Subtotal advance payments 38,562  29,732  24,156  5,740  62,718  35,472 
             
(b) Contract assets (1)            
GDS costs 23,078  22,738  —  —  23,078  22,738 
Credit card commissions 33,590  37,200  —  —  33,590  37,200 
Travel agencies commissions 8,898  12,421  —  —  8,898  12,421 
Subtotal advance payments 65,566  72,359  —  —  65,566  72,359 
(c) Other assets            
Sales tax 98,142  81,785  6,900  13,753  105,042  95,538 
Other taxes 226  1,130  —  —  226  1,130 
Contributions to the International Aeronautical Telecommunications Society (“SITA”) 628  258  271  739  899  997 
Contributions to Aeronautical Service Companies —  —  60  60  60  60 
Judicial deposits 537  —  58,029  148,329  58,566  148,329 
Subtotal other assets 99,533  83,173  65,260  162,881  164,793  246,054 
Total Other Non - Financial Assets 203,661  185,264  89,416  168,621  293,077  353,885 
(1)Movement of Contracts assets:
  Initial balance Activation Cumulative 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 
From January 1 to December 31, 2024 72,359  233,572  (6,177) (234,188) 65,566 
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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, 2024 and December 31, 2023, are detailed below:
As of
December 31, 2024		 As of
December 31, 2023
ThUS$ ThUS$
Current assets
Aircraft 29,063  100,658 
Engines and rotables 75  2,012 
Total 29,138  102,670 

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 the year 2024 the sale of 26 aircraft was finalized.
During the year 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 aircraft were finalized and as of December 31, 2023, the sale of 2 aircraft and 8 engines were finalized. As of December 31, 2024, the sale of 1 aircraft is finalized. Additionally, during 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 2024, the sale of 6 aircraft was finalized.



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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. As of December 31, 2024, the sale of 1 Boeing 767 family aircraft is finalized.

The detail of the fleet classified as non-current assets and disposal group classified as held for sale is as follows:
Aircraft Model As of
December 31, 2024		 As of
December 31, 2023
Boeing 767 300F 2 3
Airbus A320 (*) 200 — 7
Airbus A319 (*) 100 2 28
Total 4 38
(*) As of December 31, 2024, 6 Airbus A320 aircraft and 26 Airbus A319 aircraft were reclassified to property, plant and equipment as a result of a sale and lease contract, (see Note 16).
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 subsidiary Country of
incorporation		 Functional
currency 		As of
December 31, 2024		 As of
December 31, 2023
      % %
Latam Airlines Perú S.A. Peru US$ 99.81000  99.81000 
Lan Cargo S.A. Chile US$ 99.89810  99.89810 
Línea Aérea Carguera de Colombia S.A. Colombia US$ 90.46000  90.46000 
Transporte Aéreo S.A. Chile US$ 100.00000  100.00000 
Latam Airlines Ecuador S.A. Ecuador US$ 100.00000  100.00000 
Aerovías de Integración Regional S.A. Colombia COP 99.23168  99.23168 
TAM Linhas aéreas S.A. Brazil BRL 100.00000  100.00000 
ABSA Aerolimhas Brasileiras S.A. Brazil US$ 100.00000  100.00000 
Transportes Aéreos del Mercosur S.A. Paraguay PYG 94.98000  94.98000 

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


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Summary financial information of significant subsidiaries
  Statement of financial position as of December 31, 2024 Statement of Income for the year ended December 31, 2024
Name of significant subsidiary Total
Assets		 Current
Assets		 Non-current
Assets		 Total
Liabilities		 Current
Liabilities		 Non-current
Liabilities		 Revenue Net
Income/(loss)
  ThUS$ ThUS$ ThUS$ ThUS$ ThUS$ ThUS$ ThUS$ ThUS$
Latam Airlines Perú S.A. 437,768  401,748  36,020  366,089  342,838  23,251  1,723,518  22,861 
Lan Cargo S.A. 490,550  169,684  320,866  263,747  184,144  79,603  413,100  27,238 
Línea Aérea Carguera de Colombia S.A. 208,805  83,783  125,022  95,915  95,684  231  255,867  6,011 
Transporte Aéreo S.A. 238,354  15,080  223,274  121,609  92,234  29,375  84,885  (10,064)
Latam Airlines Ecuador S.A. 187,139  181,666  5,473  175,309  159,210  16,099  324,601  (9,358)
Aerovías de Integración Regional S.A. 207,096  198,118  8,978  198,165  193,842  4,323  546,752  (59,836)
TAM Linhas Aéreas S.A. 3,633,801  2,209,393  1,424,408  2,221,024  1,594,689  626,335  6,083,071  657,709 
ABSA Aerolinhas Brasileiras S.A. 515,562  510,341  5,221  556,527  537,601  18,926  178,502  (2,163)
Transportes Aéreos del Mercosur S.A. 50,132  47,469  2,663  28,225  26,314  1,911  57,120  6,395 
Statement of financial position as of December 31, 2023 Statement of Income for the year ended December 31, 2023
Name of significant subsidiary Total
Assets		 Current
Assets		 Non-current
Assets		 Total
Liabilities		 Current
Liabilities		 Non-current
Liabilities		 Revenue Net
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. 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 

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(a)Non-controlling interests
Equity Tax No. Country
of origin		 As of
December 31, 2024		 As of
December 31, 2023		 As of
December 31, 2024		 As of
December 31, 2023
% % ThUS$ ThUS$
Latam Airlines Perú S.A. Foreign Peru 0.19000  0.19000  136  93 
Aerovías de Integración Regional S.A. Foreign Colombia 0.77400  0.77400  (5,517) (5,049)
Linea Aérea Carguera de Colombia S.A. Foreign Colombia 9.54000  9.54000  (7,848) (8,421)
Transportes Aéreos del Mercosur S.A. Foreign Paraguay 5.02000  5.02000  1,100  1,152 
Lan Cargo S.A. and Subsidiaries 93.383.000-4 Chile 0.10196  0.10196  191  198 
Total (11,938) (12,027)


For the year ended
December 31,		 For the year ended
December 31,
Incomes Tax No. Country
of origin		 2024 2023 2022 2024 2023 2022
% % % ThUS$ ThUS$ ThUS$
Latam Airlines Perú S.A Foreign Peru 0.19000  0.19000  0.19000  43  (9) (643)
Aerovías de Integración Regional S.A. Foreign Colombia 0.77400  0.77400  0.78236  (463) (101) (956)
Linea Aérea Carguera de Colombia S.A. Foreign Colombia 9.54000  9.54000  9.54000  573  (500) (551)
Transportes Aéreos del Mercosur S.A. Foreign Paraguay 5.02000  5.02000  5.02000  321  304  116 
Lan Cargo S.A. and Subsidiaries 93.383.000-4 Chile 0.10196  0.10196  0.10196  (1) 25  (26)
Other companies —  —  (13)
Total 473  (281) (2,073)
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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, 2024		 As of
December 31, 2023		 As of
December 31, 2024		 As of
December 31, 2023
ThUS$ ThUS$ ThUS$ ThUS$
Airport slots 535,531  658,949  535,531  658,949 
Loyalty program 171,717  219,636  171,717  219,636 
Computer software 171,144  156,337  661,731  597,164 
Developing software 119,376  117,010  119,376  117,010 
Other assets 2,402  54  3,717  1,369 
Total 1,000,170  1,151,986  1,492,072  1,594,128 
a)Movement in Intangible assets other than goodwill:
Computer
software and others
Net		 Developing
software		 Airport
slots		 Loyalty
program		 Total
ThUS$ ThUS$ ThUS$ ThUS$ ThUS$
Opening balance as January 1, 2022 136,262  104,874  587,214  190,542  1,018,892 
Additions 47  66,820  —  —  66,867 
Withdrawals (2,947) (245) —  —  (3,192)
Transfer software and others 61,212  (63,658) —  —  (2,446)
Foreign exchange 3,359  (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 January 1, 2023 143,575  107,652  625,368  203,791  1,080,386 
Additions 298  78,846  —  —  79,144 
Transfer software and others 69,210  (69,928) —  —  (718)
Foreign exchange 2,612  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 
Opening balance as of January 1, 2024 156,391  117,010  658,949  219,636  1,151,986 
Additions 221  101,379  22,666  —  124,266 
Withdrawals (2) (393) —  —  (395)
Transfer software and others 96,098  (95,971) —  —  127 
Foreign exchange (6,607) (2,649) (146,084) (47,919) (203,259)
Amortization (72,555) —  —  —  (72,555)
Closing balance as of December 31, 2024 173,546  119,376  535,531  171,717  1,000,170 

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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, 2024 amounts to ThUS$491,902 (ThUS$442,142 as of December 31, 2023).
b)Impairment Test Intangible Assets with an indefinite useful life
As of December 31, 2024, 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.

As of December 31, 2024, 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 –4.7
Exchange rate R$/US$
5.4 – 5.7
Discount rate based on the Weighted Average Cost of Capital (WACC) %
8.2 – 10.2
Fuel Price US$/barrel
100


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 CGU 10.2  0  100 

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

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NOTE 16 - PROPERTY, PLANT AND EQUIPMENT
The composition by category of Property, plant and equipment is as follows:
Gross Book Value Accumulated depreciation Net Book Value
As of
December 31, 2024		 As of
December 31, 2023		 As of
December 31, 2024		 As of
December 31, 2023		 As of
December 31, 2024		 As of
December 31, 2023
ThUS$ ThUS$ ThUS$ ThUS$ ThUS$ ThUS$
a) Property, plant and equipment
Construction in progress (1) 479,871  258,246  —  —  479,871  258,246 
Land 39,818  44,244  —  —  39,818  44,244 
Buildings 120,736  129,036  (60,313) (61,478) 60,423  67,558 
Plant and equipment 11,727,067  10,738,500  (5,085,126) (4,508,356) 6,641,941  6,230,144 
Own aircraft (3) (4) 10,678,834  9,856,365  (4,831,914) (4,259,729) 5,846,920  5,596,636 
Other (2) 1,048,233  882,135  (253,212) (248,627) 795,021  633,508 
Machinery 24,005  29,092  (22,927) (27,716) 1,078  1,376 
Information technology equipment 158,900  163,382  (139,607) (146,040) 19,293  17,342 
Fixed installations and accessories 174,859  186,179  (126,886) (131,769) 47,973  54,410 
Motor vehicles 48,320  49,560  (42,323) (44,385) 5,997  5,175 
Leasehold improvements 236,509  266,631  (61,760) (53,201) 174,749  213,430 
Subtotal Properties, plant and equipment 13,010,085  11,864,870  (5,538,942) (4,972,945) 7,471,143  6,891,925 
b) Right of use
Aircraft (3) 5,810,997  5,388,147  (3,262,942) (3,243,065) 2,548,055  2,145,082 
Other assets 398,017  248,614  (230,518) (194,491) 167,499  54,123 
Subtotal Right of use 6,209,014  5,636,761  (3,493,460) (3,437,556) 2,715,554  2,199,205 
Total 19,219,099  17,501,631  (9,032,402) (8,410,501) 10,186,697  9,091,130 
(1)As of December 31, 2024, includes advances paid to aircraft manufacturers for Th US$452,765 (ThUS$242,069 as of December 31, 2023).
(2)Consider mainly rotables and tools.
(3)As of December 31, 2024 , the additions of 9 aircraft, 3 Airbus A320 for MUS$34,760 and 6 Boeing B777 for MUS$296,198.
(4)There were reclassified to Non-current assets or groups of assets for disposal as held for sale the following aircraft: As of 31 de diciembre 2023, 1 Boeing B767 and 6 Airbus A320 (see Note 13).

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(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 1,2022 473,797  43,276  60,451  6,568,717  16,836  38,741  325  132,975  7,335,118 
Additions 16,332  —  —  843,808  6,426  113  258  27,160  894,097 
Disposals —  —  —  (4,140) —  (264) (3) —  (4,407)
Rejection fleet —  —  —  —  —  —  —  —  — 
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 January 1, 2023 388,810  44,349  68,996  6,304,848  16,609  37,072  423  160,027  7,021,134 
Additions 8,835  —  —  870,640  5,794  4,246  —  48,866  938,381 
Disposals —  —  —  (2,701) (1) —  (16) —  (2,718)
Rejection fleet —  —  —  —  —  —  —  —  — 
Retirements (83) —  —  (87,652) (12) (2) —  —  (87,749)
Depreciation expenses —  —  (4,104) (716,590) (5,918) (8,789) (68) (10,185) (745,654)
Foreign exchange 726  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 
Opening balance as of January 1, 2024 258,246  44,244  67,558  6,236,344  17,342  54,410  351  213,430  6,891,925 
Additions 20,754  —  —  1,215,040  9,669  421  —  8,289  1,254,173 
Disposals —  —  —  (2,940) (8) —  (2) —  (2,950)
Retirements —  —  —  (56,148) (91) (89) —  —  (56,328)
Depreciation expenses —  —  (3,992) (771,104) (5,724) (8,877) (65) (9,790) (799,552)
Foreign exchange (1,354) (4,426) (3,143) (108,966) (1,780) (5,401) —  (39,593) (164,663)
Other increases (decreases) (*) 202,225  —  —  136,506  (115) 7,509  —  2,413  348,538 
Changes, total 221,625  (4,426) (7,135) 412,388  1,951  (6,437) (67) (38,681) 579,218 
Closing balance as of December 31, 2024 479,871  39,818  60,423  6,648,732  19,293  47,973  284  174,749  7,471,143 
(*) As of December 31, 2024 no aircraft were reclassified. This amount included the following aircraft reclassified to Non-current assets or groups of assets for disposal as held for sale: As of December 31, 2023, 1 Boeing B767 ThUS$(21,578) and 6 Airbus A320 ThUS$(36,326). As of December 31, 2022, 6 Airbus A320 ThUS$(29,328) and 28 Airbus A319 ThUS$(373,410).
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(b)Right of use assets:
Aircraft Others Net right
of use
assets
ThUS$ ThUS$ ThUS$
Opening balance as January 1, 2022 2,101,742  53,007  2,154,749 
Additions 372,571  13,087  385,658 
Depreciation expense (249,802) (16,368) (266,170)
Cumulative translate adjustment 919  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 January 1, 2023 1,326,821  63,706  1,390,527 
Additions 1,013,314  2,988  1,016,302 
Depreciation expense (178,570) (14,816) (193,386)
Cumulative translate adjustment 56  3,351  3,407 
Other increases (decreases) (16,539) (1,106) (17,645)
Total changes 818,261  (9,583) 808,678 
Closing balance as of December 31, 2023 2,145,082  54,123  2,199,205 
Opening balance as of January 1, 2024 2,145,082  54,123  2,199,205 
Additions (*) 601,723  50,838  652,561 
Depreciation expense (284,234) (27,315) (311,549)
Cumulative translate adjustment 48  (8,317) (8,269)
Other increases (decreases) 85,436  98,170  183,606 
Total changes 402,973  113,376  516,349 
Closing balance as of December 31, 2024 2,548,055  167,499  2,715,554 


(*) As of December 31, 2024, the additions of 6 Airbus A320 aircraft and 26 Airbus A319 aircraft as a result of a sale and lease contract are considered.

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(c)Fleet composition
Aircraft included
in Property,
plant and equipment		 Aircraft included
as Rights
of use assets		 Total fleet
Aircraft Model As of
December 31, 2024		 As of
December 31, 2023		 As of
December 31, 2024		 As of
December 31, 2023		 As of
December 31, 2024		 As of
December 31, 2023
Boeing 767 300ER 9 (3) 11 (3) — — 9 11
Boeing 767 300F 18 (2) (3) 16 (2) (3) 1 1 19 17
Boeing 777 300ER 10 (4) 4 — (4) 6 10 10
Boeing 787 8 4 4 6 6 10 10
Boeing 787 9 2 2 25 24 27 26
Airbus A319 100 11 (2) 11 (2) 27 1 38 12
Airbus A320 200 86 (2) (4) 83 (2) 49 (4) 46 (1) 135 129
Airbus A320 NEO 3 1 27 23 30 24
Airbus A321 200 19 19 30 30 49 49
Airbus A321 NEO 0 0 14 7 14 7
Airbus A330 200 0 0 2 (5) — 2 —
Total 162 151 181 144 343 295

(1) Include 1 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 (passenger) to Boeing 767-300F (freighter) Aircraft.
(4) 9 aircraft from these fleets (3 Airbus A320 and 6 Boeing B777) were transferred from right of use assets to properties, plants and equipment.
(5) As of December 31, 2024, 2 A330-200 aircraft are added to the fleet under an operating lease with WAMOS.
(d)Method used for the depreciation of Property, plant and equipment:
Useful life (years)
Depreciation method minimum maximum
Buildings Straight line without residual value 20 50
Plant and equipment
Straight line with residual value of 20% in the short-haul fleet and 36% in the long-haul fleet. (*)
 5 30
Information technology equipment Straight line without residual value 5 10
Fixed installations and accessories Straight line without residual value 10 10
Motor vehicle Straight line without residual value 10 10
Leasehold improvements Straight line without residual value 5 8
Assets for rights of use Straight line without residual value 1 25

(*)Except in the case of the Boeing 767 300ER, Boeing 777-300ER, Airbus 320 Family and Boeing 767 300F fleets that consider a lower residual value, due to the extension of their useful life to 22, 23, 25 and 30 years respectively. Additionally, certain technical components are depreciated based on cycles and hours flown.
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(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, 2024		 As of
December 31, 2023
Guarantee
agent (1)		 Creditor
company		 Committed
Assets		 Fleet Existing
Debt		 Book
Value		 Existing
Debt		 Book
Value
ThUS$ ThUS$ ThUS$ ThUS$
Wilmington Trust Company MUFG Aircraft and engines Airbus A319 —  —  2,703  12,326 
Airbus A320 —  —  17,441  151,873 
Boeing 767 —  —  20,427  143,281 
Boeing 777 115,727  132,643  132,585  144,186 
Credit Agricole Credit Agricole Aircraft and engines Airbus A319 4,441  2,401  3,413  3,752 
Airbus A320 238,131  114,450  190,001  142,075 
Airbus A321 7,022  3,920  6,007  4,393 
Boeing 767 —  —  8,849  23,018 
Boeing 787 117,089  45,703  58,499  38,971 
Bank Of Utah BNP Paribas Aircraft and engines Boeing 787 159,624  196,134  171,704  208,601 
Total direct guarantee 642,034  495,251  611,629  872,476 

(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, 2024, amounts to ThUS$897,783 (ThUS$898,166 as of December 31, 2023). The book value of the assets with indirect guarantees as of December 31, 2024, amounts to ThUS$1,734,431 (ThUS$1,925,069 as of December 31, 2023).

As of December 31, 2024, the Company keeps valid letters of credit related to right of use assets according to the following detail:

Creditor Guarantee Debtor Type Value
ThUS$		 Release
date
Celestial Aviation Services Limited LATAM Airlines Group S.A.
 Three letters of credit
 7,686  Dec 6, 2025
Empreendimentos Imobiliarios LTDA Tam Linhas Aéreas S.A.
One letter of credit
 20,186  Apr 29, 2025
27,872 
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(ii)Commitments and others
Fully depreciated assets and commitments for future purchases are as follows:
As of
December 31, 2024		 As of
December 31, 2023
ThUS$ ThUS$
Gross book value of fully depreciated property, plant and equipment still in use 326,642  288,454 
Commitments for the acquisition of aircraft (*) 20,400,000  15,700,000 

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

Aircraft purchase commitments:
Year of delivery
Manufacturer 2025 2026 2027 2028-2030 Total
Airbus S.A.S.
A320neo Family 7 12 10 56 85
The Boeing Company
Boeing 787-9 — — 1 14 15
Total 7 12 11 70 100
As of December 31, 2024, as a result of the different aircraft purchase contracts signed with Airbus S.A.S., 85 Airbus aircraft of the A320 family remain to be received with deliveries between 2025 and 2030. The approximate amount, according to manufacturer list prices, is ThUS$13,900,000.

As of December 31, 2024, as a result of the different aircraft purchase contracts signed with The Boeing Company, 15 Boeing aircraft of the 787 Dreamliner remain to be received with deliveries between 2027 and 2030. The approximate amount, according to manufacturer list prices, is ThUS$6,500,000.

The delivery dates of some of these aircraft could be modified as a result of the continuous discussions that are held with suppliers in the context of the current manufacturers' supply chain.

Aircraft operational lease commitments:

As of December 31, 2024, as a result of the different aircraft operating lease contracts signed with AerCap Holdings N.V., 4 Airbus Boeing 787 Dreamliner aircraft with delivery date between 2025 and 2026, remain to be received.

As of December 31, 2024, as a result of the various aircraft operating lease contracts signed with China Aircraft Leasing Group Holdings Limited, 3 Airbus of the A320 Neo family aircraft with delivery date in 2025, remain to be received.

As of December 31, 2024, as a result of the various aircraft operating lease contracts signed with Air Lease Corporation, 5 Airbus model A321XLR aircraft with deliveries between 2026 and 2027, remain to be received.

As of December 31, 2024, as a result of the various aircraft operating lease contracts signed with BOC Aviation Limited, 1 Airbus of the A320 Neo family aircraft with delivery date in 2025, remain to be received.

As of December 31, 2024, as a result of the various aircraft operating lease contracts signed with WAMOS Air S.A., 1 Airbus model A330 aircraft with delivery date in 2025, remain to be received.

As of December 31, 2024, as a result of the various aircraft operating lease contracts signed with Maverick Leasing (Ireland) DAC, 3 Airbus of the A320 Neo family aircraft with delivery date in 2025, remain to be received.

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As of December 31, 2024, as a result of the various aircraft operating lease contracts signed with Jackson Square Aviation Ireland Limited, 4 Airbus model A320 Neo family aircraft with delivery date in 2025, remain to be received.


(iii)Capitalized interest costs with respect to Property, plant and equipment.
For the year ended December 31,
2024 2023 2022
Average rate of capitalization of capitalized interest costs % 10.77  10.66  7.12 
Costs of capitalized interest ThUS$ 27,506  10,136  10,575 

(f) Assumption, Amendment & Rejection of Executory Contracts & Leases

On June 28, 2020, the Bankruptcy Court authorized the Debtors to establish procedures for the rejection of certain executory contracts and unexpired leases and on September 24, 2020, the Bankruptcy Court authorized the Debtors to establish procedures for the rejection of certain unexpired aircraft lease agreements, aircraft engine agreements and the abandonment of certain related assets. In accordance with these rejection procedures, the Bankruptcy Code and the Bankruptcy Rules the Debtors have or will reject certain contracts and leases (see notes 18 and 26). Relatedly, the Bankruptcy Court approved the Debtors’ request to extend the date by which the Debtors may assume or reject unexpired non-residential, real property leases until December 22, 2020. Pursuant to the Disclosure Statement Order, the Debtors have until the Effective Date of the Plan (as defined in the Plan) to assume or reject executory contracts and unexpired leases.

Further, the Debtors have filed motions to reject certain aircraft and engine leases and related agreements:

Bankruptcy Court approval date: Asset rejected:

January 29, 2021                     (i) 2 Airbus A320-family aircraft
April 23, 2021                     (i) 1 Airbus A350-941 aircraft
May 14, 2021                     (i) 6 Airbus A350 aircraft
June 17, 2021                     (i) 1 Airbus A350-941 aircraft
June 24, 2021                     (i) 3 Airbus A350-941 aircraft
November 3, 2021                 (i) 1 Rolls-Royce Trent XWB-84K engine;
(ii) 1 Rolls-Royce International Aero Engine AG V2527M-A5;

January 5, 2022                     (i) General Terms Agreement between Rolls-Royce PLC and Rolls-
Royce Totalcare Services Limited and TAM Linhas Aereas S.A.;

March 22, 2022                     (i) 1 International Aero Engines AG V2527-A5 engine; and

May 18, 2022                     (i) Framework Deed Relating to the purchase and leaseback of 10
used Airbus A330-200 aircraft, 9 new Airbus A350-900 aircraft, 4 new Boeing 787-9 aircraft and 2 new Boeing 787-8 aircraft.

As of December 31, 2021, and as a result of these contract rejections, performance obligations with the lenders and lessors
were extinguished and the Company lost control over the related assets resulting in the derecognition of the assets and the liabilities associated with these aircraft. See Note 18 and 26.

Contracts rejected during 2022 in the previous table do not result in changes in the asset or liabilities structure of the Company, since these were general terms of agreement for purchases, engine maintenance contracts and short term leases which according to the accounting policies (see Note 2) should not be registered as right of use assets.
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The Debtors also have filed motions to enter into certain new aircraft lease agreements, including

Bankruptcy Court Approval Date:            Counterparty / Aircraft

March 8, 2021                    Vermillion Aviation (nine) Limited, Aircraft MSNs 4860 and 4827

April 12, 2021                     Wilmington Trust Company, Solely in its Capacity as Trustee,
Aircraft MSNs 6698, 6780, 6797, 6798, 6894, 6895, 6899, 6949,
7005, 7036, 7081

May 30, 2021                     UMB Bank N.A., Solely in its Capacity as Trustee, Aircraft MSNs
38459, 38478, 38479, 38461

August 31, 2021                    (i) Avolon Aerospace Leasing Limited or its Affiliates, Aircraft
MSNs 38891, 38893, 38895
(ii) Sky Aero Management Ltd. ten Airbus A320neo

February 23, 2022                 Vmo Aircraft Leasing, 2 Boeing 787-9

March 17, 2022                    Avolon Aerospace Leasing Limited, 2 Airbus A321neo

March 17, 2022                     Air Lease Corporation, 3 Airbus A321NX

March 17, 2022                    AerCap Ireland, 2 Airbus A321-200NEO

March 18, 2022                     CDB Aviation Lease Finance DAC, 2 Airbus A321NX

April 14, 2022                     Macquarie Aircraft Leasing Services (Ireland) Ltd., 1 Airbus
A320-233

June 29, 2022                     UK Export Finance, 4 Boeing 787-9

August 12, 2022                     Air Lease Corporation, 3 Airbus A321XLR

September 8, 2022                 Air Lease Corporation, 2 Airbus A321XLR

In addition, the Debtors also have filed motions to enter into certain aircraft lease amendment agreements which have the effect of, among other things, reducing the Debtors’ rental payment obligations and extension on the lease term. Certain amendments also involved updates to related financing arrangements. These amendments include:

Bankruptcy Court Approval Date:             Amended Lease Agreement/Counterparty

April 14, 2021                     (1) Bank of Utah
(2) AWAS 5234 Trust
(3) Sapucaia Leasing Limited, PK Airfinance US, LLC and PK Air 1
LP

April 15, 2021                     Aviator IV 3058, Limited

April 27, 2021                     Bank of America Leasing Ireland Co.,

May 4, 2021                     (1) NBB Grosbeak Co., Ltd , NBB Cuckoo Co., Ltd., NBB-6658
Lease Partnership, NBB-6670 Lease Partnership and NBB Redstart
Co. Ltd.
(2) Sky High XXIV Leasing Company Limited and Sky High XXV
Leasing Company Limited
(3) SMBC Aviation Capital Limited May 5, 2021 (1) JSA International US Holdings LLC and Wells Fargo Trust
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Company N.A.
(2) Orix Aviation Systems Limited

May 27, 2021                     (1) Shenton Aircraft Leasing 3 (Ireland) Limited.
(2) Chishima Real Estate Company, Limited and PAAL Aquila Company Limited

May 28, 2021                     MAF Aviation 1 Designated Activity Company

May 30, 2021                     (1) IC Airlease One Limited
(2) UMB Bank, National Association, Macquarie Aerospace
Finance 5125-2 Trust and Macquarie Aerospace Finance 5178
Limited
(3) Wilmington Trust SP Services (Dublin) Limited
(4) Aercap Holdings N.V.
(5) Banc of America Leasing Ireland Co.
(6) Castlelake L.P.
July 1, 2021                     EX-IM Fleet

July 8, 2021                     Greylag Goose Leasing 38887 Designated Activity Company

July 15, 2021                    (1) ECAF I 40589 DAC
(2) Wells Fargo Company, National Associates, as Owner Trustee
(3) Orix Aviation Systems Limited
(4) Wells Fargo Trust Company, N.A.

July 20, 2021                     (1) Avolon AOE 62 Limited
(2) Avolon Aerospace (Ireland) AOE 99 Limited, Avolon Aerospace (Ireland) AOE 100 Limited, Avolon Aerospace (Ireland) AOE 101 Limited, Avolon Aerospace (Ireland) AOE 102 Limited, Avolon Aerospace (Ireland) AOE 103 Limited, Avolon Aerospace AOE 130 Limited, Avolon Aerospace AOE 134 Limited

July 27, 2021                     (1) Merlin Aviation Leasing (Ireland) 18 Limited
(2) JSA International U.S. Holdings, LLC

August 30, 2021                     (1) Yamasa Sangyo Aircraft LA 1 Kumiai and Yamasa Sangyo
Aircraft LA2 Kumiai
(2) Dia Patagonia Ltd. and DIa Iguazu Ltd. Condor Leasing Co.,
Ltd., FC Initial Leasing Ltd., Alma Leasing Co., Ltd., and FI
Timothy Leasing Ltd.
(3) Platero Fleet
(4) SL Alcyone Ltd.
(5) NBB Crow Co., Ltd.
(6) NBB Sao Paulo Lease Co., Ltd., NBB Rio Janeiro Lease Co., Ltd. And NBB Brasilia Lease LLC
(7) Gallo Finance Limited
(8) Orix Aviation Systems Limited

The lease amendment agreements were accounted for as lease modifications (see Note 18).

In relation to several of these lease amendment agreements, the Debtors entered into claims settlement stipulations for
prepetition amounts due upon assumption of those agreements.

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NOTE 17 - CURRENT AND DEFERRED TAXES

In the period ended December 31, 2024 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.1)Current taxes
(a.1)    The composition of the current tax assets is the following:
Current assets Non-current assets Total assets
As of
December 31, 2024		 As of
December 31, 2023		 As of
December 31, 2024		 As of
December 31, 2023		 As of
December 31, 2024		 As of
December 31, 2023
ThUS$ ThUS$ ThUS$ ThUS$ ThUS$ ThUS$
Provisional monthly payments (advances) 14,616  18,982  —  —  14,616  18,982 
Other recoverable credits 25,659  28,048  —  —  25,659  28,048 
Total current tax assets 40,275  47,030  —  —  40,275  47,030 

(a.2)    The composition of the current tax liabilities are as follows:
Current liabilities Non-current liabilities Total liabilities
As of
December 31, 2024		 As of
December 31, 2023		 As of
December 31, 2024		 As of
December 31, 2023		 As of
December 31, 2024		 As of
December 31, 2023
ThUS$ ThUS$ ThUS$ ThUS$ ThUS$ ThUS$
Income tax provision 6,281  2,371  —  —  6,281  2,371 
Total current tax liabilities 6,281  2,371  —  —  6,281  2,371 


















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(b)    Deferred taxes
The balances of deferred tax are the following:
Assets Liabilities
Concept As of
December 31, 2024		 As of
December 31, 2023		 As of
December 31, 2024		 As of
December 31, 2023
ThUS$ ThUS$ ThUS$ ThUS$
Properties, Plants and equipment (821,883) (941,136) 53,543  70,745 
Assets by right of use (720,694) (585,957) 109  54 
Lease Liabilities 892,657  792,781  (113) (74)
Amortization (101,193) (112,002) —  10 
Provisions 80,355  222,409  76,280  81,091 
Revaluation of financial instruments —  (889) —  — 
Tax losses 664,990  613,264  (68,493) (86,320)
Intangibles —  —  234,854  300,359 
Other 16,317  16,312  16,497  16,494 
Total 10,549  4,782  312,677  382,359 

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

Movements of Deferred tax assets and liabilities

(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 Liabilities 773,129  (186,136) —  —  586,993 
Amortization (44,615) (43,567) —  —  (88,182)
Provisions 552,527  (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)






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(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 Liabilities 586,993  205,862  —  —  792,855 
Amortization (88,182) (23,830) —  —  (112,012)
Provisions (60,386) 200,953  751  —  141,318 
Revaluation of financial instruments 2,438  (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)

(b.3)From January 1 to December 31, 2024
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 (1,011,881) 136,455  —  —  (875,426)
Assets for right of use (586,011) (134,792) —  —  (720,803)
Lease Liabilities 792,855  99,915  —  —  892,770 
Amortization (112,012) 10,819  —  —  (101,193)
Provisions 141,318  (138,152) 909  —  4,075 
Revaluation of financial instruments (889) 889  —  —  — 
Tax losses (*) 699,584  33,899  —  —  733,483 
Intangibles (300,359) 496  —  65,009  (234,854)
Others (182) 2  —  —  (180)
Total (377,577) 9,531  909  65,009  (302,128)

(*) 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$3,263,150 at December 31, 2024 (ThUS$3,572,528 as of December 31, 2023) which include deferred tax assets related to negative tax results of ThUS$11,736,014 at December 31, 2024 (ThUS$12,206,634 at December 31, 2023).


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.








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(Expenses)/income from deferred taxes and income tax:
For the year ended December 31,
2024 2023 2022
ThUS$ ThUS$ ThUS$
Income tax (expense)/benefit
Current tax (expense) benefit (26,263) (12,659) (14,064)
Adjustments to the current tax of the previous year —  (193) — 
Total current tax (expense) benefit (26,263) (12,852) (14,064)
Deferred income taxes
(Expense)/benefit for deferred tax recognition for tax losses (*) 243  17,492  — 
Deferred income for relative taxes to the creation and reversal of temporary differences 9,531  (19,582) 5,150 
Total deferred income tax 9,774  (2,090) 5,150 
Income tax (expense)/benefit (16,489) (14,942) (8,914)

Income tax (expense)benefit
For the year ended December 31,
2024 2023 2022
ThUS$ ThUS$ ThUS$
Current tax (expense) benefit, foreign (54,190) (10,410) 19,573 
Current tax (expense) benefit, domestic 27,927  (2,442) (33,637)
Total current tax (expense) benefit (26,263) (12,852) (14,064)
Foreign Deferred tax (expense) benefit, for tax losses compensation (*) 243  17,492  — 
Deferred tax (expense) benefit, foreign 5,553  (10,780) (532)
Deferred tax (expense) benefit, domestic 3,978  (8,802) 5,682 
Total deferred tax (expense)benefit 9,774  (2,090) 5,150 
Income tax (expense)/benefit (16,489) (14,942) (8,914)


(*) As a result of an agreement reached with the Brazilian tax authority in the 2023, 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 recognize a deferred tax asset for its available tax losses, it was necessary to register an income in order to write off the liability previously recognized regarding the relevant tax contingencies.
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Income before tax from the Chilean legal tax rate (27% as of December 31, 2024, December 31, 2023 and December 31, 2022)
For the year ended December 31, For the year ended December 31,
2024 2023 2022 2024 2023 2022
ThUS$ ThUS$ ThUS$ % % %
Income tax benefit/(expense) using the legal tax rate (268,362) (161,053) (363,434) (27.00) (27.00) (27.00)
Tax effect by change in tax rate —  —  9,016  —  —  0.67 
Tax effect of rates in other jurisdictions (46,580) (50,042) 20,398  (4.69) (8.39) 1.52 
Tax effect of non-taxable income 81,612  25,459  1,201,618  8.21  4.27  89.27 
Tax effect of disallowable expenses (12,780) (23,272) (33,855) (1.29) (3.90) (2.52)
Other increases (decreases):            
Derecognition of deferred tax liabilities for early termination of aircraft financing 37,793  53,162  90,823  3.80  8.91  6.75 
Tax effect for goodwill impairment losses —  —  —  — 
Derecognition of deferred tax assets not recoverable —  —  (6,173) —  —  (0.46)
Unrecognised deferred tax 159,430  157,089  (990,095) 16.04  26.34  (73.56)
Other increases (decreases) 32,398  (16,285) 62,788  3.27  (2.73) 4.66 
Total adjustments to tax expense using the legal rate 251,873  146,111  354,520  25.34  24.50  26.33 
Income tax benefit/(expense) using the effective rate (16,489) (14,942) (8,914) (1.66) (2.50) (0.67)

Deferred taxes related to items charged to equity:
For the year ended December 31,
2024 2023 2022
ThUS$ ThUS$ ThUS$
Aggregate deferred taxation of components of other comprehensive income 909  4,355  332 
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NOTE 18 - OTHER FINANCIAL LIABILITIES

The composition of other financial liabilities is as follows:
As of
December 31, 2024		 As of
December 31, 2023
ThUS$ ThUS$
Current
(a) Interest bearing loans 271,753  292,982 
(b) Lease Liability 363,460  301,537 
(c) Hedge derivatives —  1,544 
Total current 635,213  596,063 
Non-current
(a) Interest bearing loans 3,516,117  3,675,212 
(b) Lease Liability 2,999,121  2,666,457 
Total non-current 6,515,238  6,341,669 

(a)    Interest bearing loans

Obligations with credit institutions and debt instruments:
As of
December 31, 2024		 As of
December 31, 2023
ThUS$ ThUS$
Current
Bank loans (2) —  53,141 
Guaranteed obligations (5) 34,083  28,697 
Other guaranteed obligations (1) 23,682  67,005 
Subtotal bank loans 57,765  148,843 
Obligation with the public (3) (4) 46,256  34,731 
Financial leases 167,732  109,304 
Other loans —  104 
Total current 271,753  292,982 
Non-current
Bank loans (2) —  976,293 
Guaranteed obligations (5) 339,960  275,225 
Other guaranteed obligations (1) 351,069  363,345 
Subtotal bank loans 691,029  1,614,863 
Obligation with the public (3) (4) 2,193,047  1,268,107 
Financial leases 632,041  792,242 
Total non-current 3,516,117  3,675,212 
Total obligations with financial institutions 3,787,870  3,968,194 
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(1) The Company has three committed credit lines, or “Revolving Credit Facilities (RCF),” which are secured. As of July 15, 2024, two credit lines were amended and extended until July 2029, with amounts of US$800 million and US$750 million, respectively. Then, as of November 4, 2024 a third credit line was made available:

(a) The first committed credit line, or “RCF I,” amounting to US$800 million, is secured by aircraft, engines, and spare parts. This credit line is fully available as of December 31, 2024.

(b) The second committed credit line, or “RCF II,” amounting to US$750 million, is secured by intangible assets primarily related to the FFP business (LATAM Pass loyalty program), the cargo business, certain slots, gates, and routes, as well as intellectual property and certain LATAM trademarks. This credit line is fully available as of December 31, 2024.

(c) On November 4, 2024, the Company secured a new credit line under a “Spare Engine Facility” amounting to US$300 million (of which US$275 million had been drawn as of December 31, 2024), maturing on November 4, 2028. This funds were used to repay the previous “Spare Engine Facility” maturing on November 3, 2027. This new financing includes a minimum liquidity covenant, requiring the Company to maintain minimum liquidity, measured at the consolidated level (LATAM Airlines Group S.A.), of US$750 million, as well as an additional covenant measured individually for LATAM Airlines Group S.A. and TAM Linhas Aéreas S.A., requiring a minimum liquidity threshold of US$400 million. If these covenants are not met, the obligations could be accelerated at the creditors' request to become short-term obligations. As of December 31, 2024, the Company is in compliance with the aforementioned minimum liquidity covenants.

(2) As of October 15, 2024, the Company repaid the entirety of the “Term Loan B Facility” amounting to US$1.081 billion remaining on that date.

(3) As of October 15, 2024, the Company repaid in full the senior secured notes issued under Rule 144-A and Regulation S of the United States Securities and Exchange Commission, bearing interest at 13.375% and maturing in 2027, for an aggregate principal amount of US$450 million (the “2027 Notes”). As of December 31, 2024, the Company continues to hold the senior secured notes issued under Rule 144-A and Regulation S of the United States Securities and Exchange Commission, bearing interest at 13.375% and maturing in 2029, for an aggregate principal amount of US$700 million (the “2029 Notes”). During the quarter ended December 31, 2024, both the 2027 Notes and the 2029 Notes included a minimum liquidity covenant, which required the Company to maintain minimum liquidity, measured at the consolidated level (LATAM Airlines Group S.A.), of US$750 million. If this covenant is not met, the obligations could be accelerated at the creditors' request to become short-term obligations. As of December 31, 2024, the Company is in compliance with the aforementioned minimum liquidity covenant.

(4) As of October 15, 2024, the Company issued, placed, and received funds from international markets through guaranteed bonds amounting to US$1.4 billion, with an annual interest rate of 7.875% and maturing in 2030 (the “2030 Notes”), issued under Rule 144-A and Regulation S of the United States Securities and Exchange Commission, pursuant to the United States Securities Act of 1933 (the “US Securities Act”). During the quarter ended December 31, 2024, the 2030 Notes included a minimum liquidity covenant, which required the Company to maintain minimum liquidity, measured at the consolidated level (LATAM Airlines Group S.A.), of US$750 million. If this covenant is not met, the obligations could be accelerated at the creditors' request to become short-term obligations. As of December 31, 2024, the Company is in compliance with the aforementioned minimum liquidity covenant.

(5) On December 23 and 30, 2024, two A320neo aircraft were delivered by Airbus. These aircraft were purchased through aircraft financing of US$50 million each, with Bank of Communications Co., Ltd. (“BOCOMM”) as the counterparty.










F-76
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Balances by currency of interest bearing loans are as follows:
As of
December 31, 2024		 As of
December 31, 2023
Currency ThUS$ ThUS$
Chilean peso (U.F.) 147,716  160,730 
US Dollar 3,640,154  3,807,464 
Total 3,787,870  3,968,194 
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Interest-bearing loans due in installments to December 31, 2024
Debtor: LATAM Airlines Group S.A. and Subsidiaries, Tax No. 89.862.200-2, Chile.
Nominal values Accounting values  
Tax No. Creditor Creditor
country		 Currency 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 Annual
Effective
rate		 Nominal
rate
        ThUS$ ThUS$ ThUS$ ThUS$ ThUS$ ThUS$ ThUS$ ThUS$ ThUS$ ThUS$ ThUS$ ThUS$   % %
Obligations with the public
97.036.000-K SANTANDER Chile UF —  —  —  —  147,217  147,217  —  499  —  —  147,217  147,716  At Expiration 2.00  2.00 
97.036.000-K SANTANDER Chile US$ —  —  —  —  3  3  —  —  —  —  3  3  At Expiration 1.00  1.00 
0-E WILMINGTON TRUST COMPANY U.S.A. US$ —  —  —  700,000  1,400,000  2,100,000  —  45,757  —  678,079  1,367,748  2,091,584  At Expiration 10.69  9.71 
Guaranteed obligations
0-E BNP PARIBAS U.S.A. US$ 3,226  9,863  27,888  30,093  88,554  159,624  4,020  9,863  27,262  29,715  88,375  159,235  Quarterly 6.03  6.03 
0-E WILMINGTON TRUST COMPANY U.S.A. US$ 3,960  11,992  33,179  34,951  31,645  115,727  3,960  11,992  33,179  34,951  31,645  115,727  Quarterly/Monthly 7.73  7.73 
0-E BOCOMM Irlanda US$ 1,042  3,125  8,333  8,333  79,167  100,000  1,123  3,125  8,208  8,250  78,375  99,081  Quarterly 6.42  6.42 
Other guaranteed obligations
0-E CITIBANK U.S.A. US$ —  —  —  —  —  —  22  —  —  —  —  22  Quarterly 1.00  1.00 
0-E JP MORGAN CHASE U.S.A. US$ —  —  —  —  —  —  209  —  —  —  —  209  Quarterly 0.63  0.63 
0-E CREDIT AGRICOLE France US$ —  —  —  275,012  —  275,012  3,020  —  —  272,112  —  275,132  At Expiration 9.43  9.43 
0-E EXIM BANK U.S.A. US$ 5,005  15,147  41,385  37,572  —  99,109  5,284  15,147  41,385  37,572  —  99,388  Quarterly 2.29  2.05 
Financial leases
0-E NATIXIS France US$ 6,671  20,241  55,696  78,423  30,352  191,383  8,284  20,242  55,369  78,225  30,350  192,470  Quarterly 6.73  6.73 
0-E US BANK U.S.A. US$ 10,972  6,520  —  —  —  17,492  11,147  6,217  —  —  —  17,364  Quarterly 4.88  3.40 
0-E EXIM BANK U.S.A. US$ 32,988  74,220  167,003  103,326  35,535  413,072  34,733  74,221  166,291  103,326  35,532  414,103  Quarterly 4.00  3.17 
0-E BANK OF UTAH U.S.A. US$ 2,857  7,991  29,220  46,016  75,786  161,870  2,857  7,991  29,220  46,016  75,786  161,870  Monthly 10.71  10.71 
Total 66,721  149,099  362,704  1,313,726  1,888,259  3,780,509  74,659  195,054  360,914  1,288,246  1,855,031  3,773,904       
(*)    Obligation to creditors for executed letters of credit.








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Interest-bearing loans due in installments to December 31, 2024
Debtor: TAM S.A. and Subsidiaries, Tax No. 02.012.862/0001-60, Brazil
Nominal values Accounting values Annual
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		 Currency Effective
rate		 Nominal
rate
ThUS$ ThUS$ ThUS$ ThUS$ ThUS$ ThUS$ ThUS$ ThUS$ ThUS$ ThUS$ ThUS$ ThUS$ % %
Financial lease
0-E NATIXIS France US$ 510  1,530  4,080  7,846  —  13,966  510  1,530  4,080  7,846  —  13,966  Quarterly —  — 
Total 510  1,530  4,080  7,846  —  13,966  510  1,530  4,080  7,846  —  13,966 
  Total consolidated 67,231  150,629  366,784  1,321,572  1,888,259  3,794,475  75,169  196,584  364,994  1,296,092  1,855,031  3,787,870 
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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 values Accounting values Amortization Annual
Tax No. Creditor Creditor
country		 Currency 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-E GOLDMANSACHS U.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  Quarterly 20.31  15.04 
Obligations with the public                                    
97.036.000- K SANTANDER Chile UF —  —  —  —  160,214  160,214  —  516  —  —  160,214  160,730  At Expiration 2.00  2.00 
97.036.000- K SANTANDER Chile US$ —  —  —  —  3  3  —  —  —  —  3  3  At Expiration 1.00  1.00 
0-E WILMINGTON TRUST COMPANY U.S.A. US$ —  —  —  450,000  700,000  1,150,000  —  34,215  —  434,204  673,686  1,142,105  At Expiration 15.00  13.38 
Guaranteed obligations                                    
0-E BNP PARIBAS U.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  Quarterly 6.98  6.98 
0-E WILMINGTON TRUST COMPANY U.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/Monthly 8.76  8.76 
Other guaranteed obligations                                    
0-E CITIBANK U.S.A. US$ —  —  —  —  —  —  33  —  —  —  —  33  Quarterly 1.00  1.00 
0-E JP MORGAN CHASE U.S.A. US$ —  —  —  —  —  —  17  —  —  —  —  17  Quarterly 0.63  0.63 
0-E CREDIT AGRICOLE France US$ —  14,667  29,333  222,768  —  266,768  4,241  14,667  26,154  221,708  —  266,770  At Expiration 9.43  9.43 
0-E MUFG U.S.A. US$ 11,768  35,960  16,374  —  —  64,102  11,805  35,960  16,374  —  —  64,139  Quarterly 7.11  7.11 
0-E EXIM BANK U.S.A. US$ —  —  40,662  42,122  16,325  99,109  282  —  40,662  42,122  16,325  99,391  Quarterly 2.29  2.05 
Financial leases                                    
0-E NATIXIS France US$ 6,516  19,779  54,443  56,972  77,647  215,357  8,559  19,779  54,117  56,754  77,555  216,764  Quarterly 7.58  7.58 
0-E US BANK U.S.A. US$ 17,374  49,311  17,492  —  —  84,177  17,905  49,311  15,731  —  —  82,947  Quarterly 4.41  3.16 
0-E EXIM BANK U.S.A. US$ —  —  197,499  141,169  74,404  413,072  1,933  —  195,741  141,169  74,404  413,247  Quarterly 4.13  3.31 
0-E BANK OF UTAH U.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  Monthly 10.71  10.71 
Other loan                                    
0-E Various (*)   US$ 104  —  —  —  —  104  104  —  —  —  —  104  At Expiration —  — 
  Total     47,853  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.

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Interest-bearing loans due in installments to December 31, 2023
Debtor: TAM S.A. and Subsidiaries, Tax No. 02.012.862/0001-60, Brazil
Tax No. Creditor
Country		 Currency Nominal values Accounting values Amortization Annual
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$   % %
Financial lease
0-E NATIXIS France US$ 510  1,530  4,080  9,886  —  16,006  510  1,530  4,080  9,886  —  16,006  Quarterly —  % — 
  Total 510  1,530  4,080  9,886  —  16,006  510  1,530  4,080  9,886  —  16,006 
  Total consolidated 48,363  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 

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(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 January 1, 2022 2,883,661  76,977  2,960,638 
New contracts 354,924  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 interest 142,939  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 January 1, 2023 2,134,972  81,482  2,216,454 
New contracts 943,178  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 interest 212,500  9,633  222,133 
Exchange differences —  2,278  2,278 
Cumulative translation adjustment 6  297  303 
Changes 759,226  (7,686) 751,540 
Closing balance as of December 31, 2023 2,894,198  73,796  2,967,994 
Opening balance as of January 1, 2024 2,894,198  73,796  2,967,994 
New contracts 576,182  69,061  645,243 
Lease termination (72,266) (540) (72,806)
Renegotiations 96,155  70,670  166,825 
Payments (605,584) (26,630) (632,214)
Accrued interest 288,165  25,391  313,556 
Exchange differences (2,090) (3,082) (5,172)
Cumulative translation adjustment —  (9,679) (9,679)
Other variations —  (11,166) (11,166)
Changes 280,562  114,025  394,587 
Closing balance as of December 31, 2024 3,174,760  187,821  3,362,581 

(*) Corresponds to the effect of emergence from Chapter 11 ThUS$679,273 associated with claim settlement (Derecognition of assets for right of use for ThUS$639,728 (See Note 4 letter g (4)) and conversion of Notes for ThUS$39,545) and ThUS$316,615 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 2024		 Discount rate
December 2023
Aircraft 9.09% 9.10%
Others 8.78% 6.43%
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(c)    Hedge derivatives
  Current liabilities Non-current liabilities Total hedge derivatives
As of
December 31, 2024		 As of
December 31, 2023		 As of
December 31, 2024		 As of
December 31, 2023		 As of
December 31, 2024		 As of
December 31, 2023
ThUS$ ThUS$ ThUS$ ThUS$ ThUS$ ThUS$
           
Fair value of foreign currency derivatives —  1,544  —  —  —  1,544 
Total hedge derivatives —  1,544  —  —  —  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, 2024		 As of
December 31, 2023
ThUS$ ThUS$
 
Interest rate swaps (3) 4,676  — 
Fuel options (1) 7,747  22,136 
Foreign currency derivative R$/BRL$ (2) 3,142  (1,544)


(1)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.

(2) 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.

(3) They cover significant variations in cash flows associated with the market risk implicit in increases in the SOFR interest rate for long-term loans originated by the operational leases. These contracts are recorded as cash flow hedging 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.

All hedging operations have been performed for highly probable transactions. See Note 3.

See Note 24 (h) 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, 2024		 As of
December 31, 2023
ThUS$ ThUS$
Current
 (a) Trade and other accounts payables
 1,761,814  1,408,201 
 (b) Accrued liabilities
 371,758  357,078 
Total trade and other accounts payables 2,133,572  1,765,279 


(a)     Trade and other accounts payable:
As of
December 31, 2024		 As of
December 31, 2023
ThUS$ ThUS$
Trade creditors 1,409,894  1,176,985 
Other accounts payable 351,920  231,216 
Total 1,761,814  1,408,201 
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The details of Trade and other accounts payables are as follows:
As of
December 31, 2024		 As of
December 31, 2023
ThUS$ ThUS$
Maintenance and technical purchases 380,853  293,768 
Boarding Fees 268,353  249,291 
Aircraft Fuel 220,343  94,878 
Airport charges and overflight 157,691  138,901 
Handling and ground handling 122,721  133,114 
Leases, maintenance and IT services 121,901  100,842 
Other personnel expenses 106,277  96,351 
Professional services and advisory 77,548  63,756 
Services on board 72,902  58,365 
Marketing 46,751  51,035 
Aircraft Insurance 16,756  12,256 
Air companies 9,778  26,371 
Crew 20,560  25,936 
Agencies sales commissions 15,649  16,899 
Others 123,731  46,438 
Total trade and other accounts payables 1,761,814  1,408,201 

(b) Liabilities accrued:
As of
December 31, 2024		 As of
December 31, 2023
ThUS$ ThUS$
Aircraft and engine maintenance 74,874  129,473 
Accrued personnel expenses 86,743  97,733 
Accounts payable to personnel (1) 183,153  114,769 
Others accrued liabilities 26,988  15,103 
Total accrued liabilities 371,758  357,078 

(1) Participation in profits and bonuses (Note 22 letter b).
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NOTE 20 - OTHER PROVISIONS
Current liabilities Non-current liabilities Total Liabilities
As of
December 31, 2024		 As of
December 31, 2023		 As of
December 31, 2024		 As of
December 31, 2023		 As of
December 31, 2024		 As of
December 31, 2023
ThUS$ ThUS$ ThUS$ ThUS$ ThUS$ ThUS$
Provision for contingencies (1)
Tax contingencies 11,536  7,003  313,165  614,882  324,701  621,885 
Civil contingencies 1,173  7,702  124,411  142,305  125,584  150,007 
Labor contingencies 1,512  367  174,035  155,501  175,547  155,868 
Other —  —  9,908  11,571  9,908  11,571 
Provision for European            
Commission investigation (2) —  —  2,327  2,477  2,327  2,477 
Total other provisions (3) 14,221  15,072  623,846  926,736  638,067  941,808 


(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, 2024, and December 31, 2023, 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 Standards application and which only in the context of a business combination should be recognized under IFRS Accounting Standards.
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Movement of provisions:
  Legal
claims (1)		 European
Commission
Investigation (1) 		Total
  ThUS$ ThUS$ ThUS$
 
Opening balance as of January 1, 2022 731,153  9,300  740,453 
Increase in provisions 687,558  —  687,558 
Provision used (63,087) —  (63,087)
Difference by subsidiaries conversion 28,655  —  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 January 1, 2023 940,140  2,397  942,537 
Increase in provisions 449,406  —  449,406 
Provision used (70,844) —  (70,844)
Difference by subsidiaries conversion (69,563) —  (69,563)
Reversal of provision (310,118) —  (310,118)
Exchange difference 310  80  390 
Closing balance as of December 31, 2023 939,331  2,477  941,808 
     
Opening balance as of January 1, 2024 939,331  2,477  941,808 
Increase in provisions 448,338  —  448,338 
Provision used (92,729) —  (92,729)
Difference by subsidiaries conversion (143,057) —  (143,057)
Reversal of provision (508,907) —  (508,907)
Exchange difference (7,236) (150) (7,386)
Closing balance as of December 31, 2024 635,740  2,327  638,067 
(1)See details of litigation and government investigations with a material impact in Note 30.
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NOTE 21 - OTHER NON-FINANCIAL LIABILITIES
Current liabilities Non-current liabilities Total Liabilities
  As of
December 31, 2024		 As of
December 31, 2023		 As of
December 31, 2024		 As of
December 31, 2023		 As of
December 31, 2024		 As of
December 31, 2023
  ThUS$ ThUS$ ThUS$ ThUS$ ThUS$ ThUS$
 
Deferred revenue (1)(2) 3,118,099  3,044,664  140,244  348,936  3,258,343  3,393,600 
Sales tax 14,566  17,801  —  —  14,566  17,801 
Retentions 48,383  48,649  —  —  48,383  48,649 
Other taxes 6,332  6,892  —  —  6,332  6,892 
Dividends payable 293,092  174,549  —  —  293,092  174,549 
Other sundry liabilities 8,208  9,351  —  —  8,208  9,351 
Total other non-financial liabilities 3,488,680  3,301,906  140,244  348,936  3,628,924  3,650,842 
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 
From January 1 to December 31, 2024 3,393,600  15,679,754  (15,073,167) (126,564) (347,873) (260,364) (7,043) 3,258,343 
(1)The balance includes mainly, deferred revenue for services not provided as of December 31, 2024 and December 31, 2023 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 LATAM Pass points 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, 2024, Deferred Income includes ThUS$35,615 related to the compensation from Delta Air Lines, Inc., which is recognized in the income statement based on the estimation of income differentials until the implementation of the strategic alliance.
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NOTE 22 - EMPLOYEE BENEFITS
As of
December 31, 2024		 As of
December 31, 2023
ThUS$ ThUS$
Retirements payments 71,296  57,785 
Resignation payments 7,048  11,537 
Other obligations 89,083  53,296 
Total liability for employee benefits 167,427  122,618 
(a)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 
From January 1 to December 31, 2024 122,618  88,112  (10,778) (21,769) (10,756) 167,427 
The main assumptions used in the calculation of the provision in Chile are presented below:
  For the year ended December 31,
Assumptions 2024 2023
Discount rate 5.92  % 5.40  %
Expected rate of salary increase 3.00  % 3.00  %
Rate of turnover 2.96  % 5.02  %
Mortality rate RV-2020 RV-2020
Inflation rate 3.42  % 2.99  %
Retirement age of women 60 60
Retirement age of men 65 65
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.
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The sensitivity analysis for these variables is presented below:
Effect on the liability
As of
December 31, 2024		 As of
December 31, 2023
ThUS$ ThUS$
Discount rate
Change in the accrued liability an closing for increase in 100 b.p. (5,267) (3,913)
Change in the accrued liability an closing for decrease of 100 b.p. 6,010  4,369 
Rate of wage growth    
Change in the accrued liability an closing for increase in 100 b.p. 5,570  4,133 
Change in the accrued liability an closing for decrease of 100 b.p. (5,056) (3,811)
(b)The liability for short-term:
As of
December 31, 2024		 As of
December 31, 2023
  ThUS$ ThUS$
 
Profit-sharing and bonuses (*) 183,153  114,769 
(*)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.

(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 was 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.

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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 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 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 2024 until the month of December, the amount accrued related to this CIP was MUS$78.78, which is recorded in the "Administrative expenses" line of the Consolidated Statement of Income by Function. As of December 2024, the amount of this plan recorded in the consolidated statement of financial position is MUS$152.6.








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(d)Employment expenses are detailed below:
  For the year ended December 31,
  2024 2023 2022
  ThUS$ ThUS$ ThUS$
 
Salaries and wages 1,337,982  1,268,343  1,024,304 
Short-term employee benefits 243,210  181,565  121,882 
Other personnel expenses 157,282  133,429  120,150 
Total 1,738,474  1,583,337  1,266,336 

NOTE 23 - ACCOUNTS PAYABLE, NON-CURRENT
As of
December 31, 2024		 As of
December 31, 2023
ThUS$ ThUS$
Aircraft and engine maintenance 433,447  348,578 
Fleet (JOL) 40,000  40,000 
Airport and Overflight Taxes —  11,337 
Provision for vacations and bonuses 18,129  18,518 
Other sundry liabilities 186  154 
Total accounts payable, non-current 491,762  418,587 
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, 2024 amounts to ThUS$ 5,003,534 divided into 604,437,877,587 common stock of a same series (ThUS$ 5,003,534 divided into 604,437,877,587 shares as of December 31, 2023), a single series nominative, ordinary character with no par value. The total number of authorized shares of the Company as of December 31, 2024, 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, the 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”).
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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 US$800 million 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, 2024, 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, 2024 (ThUS$10,152,221 as of December 31, 2023) 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) 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 issued on the occasion of the capital increase agreed at the Company's Extraordinary Shareholders' Meeting held on July 5, 2022. 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.

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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 was 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 that date, 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.

All of the above was explained in detail at the Extraordinary Shareholders' Meeting of the Company held on April 25, 2024, in which it was agreed, among other things, (i) to record the aforementioned reduction by operation of law in the Share Capital, and the granting of the aforementioned public deed dated September 6, 2023; and (ii) on the basis of the above, adapt the Fifth permanent and First Transitory articles of the corporate statute, relating to share capital.


(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, 2024 As of December 31, 2023
N° of authorized shares N° of Subscribed of shares and paid or delivered pursuant to the exercise of the conversion option N° of convertible notes back-up shares pending to place N° of shares to subscribe or not used N° of authorized shares N° of Subscribed of shares and paid or delivered pursuant to the exercise of the conversion option N° of convertible notes back-up shares pending to place N° of shares to subscribe or not used
Opening Balance 604,441,789,335 604,437,877,587 3,911,748 — 606,407,693,000 604,437,584,048 4,205,287 1,965,903,665
Convertible Notes H — — — — — 293,539 (293,539) —
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)
Closing Balance 604,441,789,335 604,437,877,587 3,911,748 — 604,441,789,335 604,437,877,587 3,911,748 —
(*) See letter (a) above, in the same Note.

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(c)Share capital
The following table shows the movement of share capital:
Paid- in
Capital
ThUS$
Initial balance as of January 1, 2022 3,146,265 
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 H 1,372,798 
Conversion options of convertible notes exercised during the year - Convertible Notes I (2) 6,863,427 
Subtotal 10,152,221 
Ending balance as of December 31, 2022 13,298,486 
Initial balance as of January 1, 2023 13,298,486 
Placement during the conversion options period - Convertible Notes G (1) 17,401 
Absorption of Accumulated Losses as of December 31, 2022 (2) (7,501,896)
Absorption of treasury shares (2) (178)
Deduction of issuance and placement costs of shares and bonds convertible into shares (2) (810,279)
Subtotal (8,294,952)
Ending balance as of December 31, 2023 5,003,534 
Initial balance as of January 1, 2024 5,003,534 
There were no movements during the year — 
Subtotal — 
Ending balance as of December 31, 2024 5,003,534 
(1)Includes Convertible Notes bonds delivered as payment of debts recognized in Chapter 11.
(2)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.
(d)Treasury stock
At December 31, 2024, 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$178.
(e)Other equity- Value of conversion right - Convertible Notes
(e.1)Notes subscription
The Convertible Notes were issued to be place in exchange for a cash contribution, in exchange for settlement of Chapter 11 Proceeding or a combination of both. Convertible Notes issued in exchange for cash were valued at fair value (the cash received). Notes issued
in exchange for settlement of Chapter 11 claims were valued considering the discount that each group of liabilities settled on at the emergence date. The table below shows the 3 Convertible Notes at their nominal values, the adjustment, if any, to arrive at their fair values and the amount of transaction costs. The conversion option classified as equity is determined by deducting the amount of the liability component from the fair value of the compound instrument as a whole. The equity portion is recognized under Other equity at the time the Convertible Notes are issued.
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As of December 31, 2023
Concepts Convertible
Notes G 		Convertible
Notes H 		Convertible
Notes I 		Total
Convertible
Notes
ThUS$ ThUS$ ThUS$ ThUS$
Face Value 17,401  —  —  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 Notes 3,000  —  —  3,000 
Equity component at the date of issue 3,000  —  —  3,000 

During the year ended December 31, 2024, there was no subscription of convertible bonds.

(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
Concepts Convertible
Notes G 		Convertible
Notes H 		Convertible
Notes I 		Total
Convertible
Notes
ThUS$ ThUS$ ThUS$ ThUS$
Conversion percentage 100.000  % 99.997  % 100.000  %
Conversion option of convertible notes exercised 1,133,397  1,372,798  6,863,427  9,369,622 
Total Converted Notes 1,133,397  1,372,798  6,863,427  9,369,622 
As of December 31, 2022
Concepts Convertible
Notes G 		Convertible
Notes H 		Convertible
Notes I 		Total
Convertible
Notes
ThUS$ ThUS$ ThUS$ ThUS$
Conversion percentage 88.782  % 99.997  % 100.000  %
Conversion option of convertible notes exercised 1,115,996  1,270,767  6,863,427  9,250,190 
Converted debt component —  102,031  —  102,031 
Total Converted Notes 1,115,996  1,372,798  6,863,427  9,352,221 

As of December 31, 2024, no bonds have been converted into shares.
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. As of December 31, 2024, 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.
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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$102,031 was estimated using the prevailing market interest rate for similar non-convertible instruments.
Transaction costs relating to the liability component are included in the carrying amount of the liability portion and amortized over the period of the convertible notes using the effective interest method.
(f)Reserve of share- based payments
Movement of Reserves of share- based payments:
Periods Opening
balance		 Stock
option
plan		 Closing
balance
ThUS$ ThUS$ ThUS$
From January 1 to December 31, 2022 37,235  —  37,235 
From January 1 to December 31, 2023 37,235  —  37,235 
From January 1 to December 31, 2024 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:
Periods Opening
balance		 Transactions with
non-controlling interest 		Legal
reserves 		Other sundry
reserves 		Others increases (Decreases) 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) 5,074  —  (14,401) 811,962  (1,170,016)
From January 1 to December 31, 2024 (1,170,016) —  —  —  510  (1,169,506)







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Balance of Other sundry reserves comprise the following:
As of
December 31, 2024		 As of
December 31, 2023		 As of
December 31, 2022
ThUS$ ThUS$ ThUS$
Higher value for TAM S.A. share exchange (1) 2,666,202  2,665,692  2,665,692 
Reserve for the adjustment to the value of fixed assets (2) 2,620  2,620  2,620 
Transactions with non-controlling interest (3) (211,582) (211,582) (216,656)
Adjustment to the fair value of the New Convertible Notes (4) (3,624,871) (3,624,871) (3,610,470)
Cost of issuing shares and New Convertible Notes (5) —  —  (810,279)
Others (1,875) (1,875) (3,558)
Total (1,169,506) (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 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. for ThUS$(3,480) and ThUS$ (20), respectively; the acquisition of TAM S.A. of the minority interest in Aerolinhas Brasileiras S.A. for ThUS$ (885), the acquisition of Inversiones Lan S.A. of the minority participation in Aerovías de Integración Regional 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$(184,135) and the acquisition of a minority interest in LATAM Airlines Perú S.A. through LATAM Airlines Group S.A for an amount of ThUS$(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 ThUS$2,564,707 (ThUS$2,564,707 as of December 31, 2023 and 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, 2024, 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.




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(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 
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)
Opening balance as of January 1, 2024 (3,830,611) (38,678) 32,947  (48,559) (3,884,901)
Change in fair value of hedging instrument recognized in OCI —  15,476  (34,872) —  (19,396)
Reclassified from OCI to profit or loss —  (40,898) 22,685  —  (18,213)
Reclassified from OCI to the value of the hedged asset —  11,999  14,580  —  26,579 
Deferred tax —  —  —  —  — 
Actuarial reserves by employee benefit plans —  —  —  (21,763) (21,763)
Deferred tax actuarial IAS by employee benefit plans —  —  —  908  908 
Translation difference subsidiaries (379,049) (795) 304  —  (379,540)
Closing balance as of December 31, 2024 (4,209,660) (52,896) 35,644  (69,414) (4,296,326)
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(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):
Periods Opening
balance 		Result
for the
period 		Dividends Others 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 
From January 1 to December 31, 2024 464,411  976,972  (293,092) (*) —  1,148,291 

(*) It corresponds to mandatory minimum dividend provision charged to equity related to the net income for the year 2024. The minimum dividend proposal for the 2024 financial year it must be approved by the Board of Directors when appropriate in accordance with the applicable regulations.
(1) The detail of Other increases (decreases) is as follows:

As of
December 31, 2023
Absorption accumulated losses (*) 7,501,896 
Reversal of dividends 57,129 
Total 7,559,025 

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






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(j)Dividends per share
Description of dividend Minimum mandatory dividend 2024 Minimum mandatory dividend 2023
Amount of the dividend (ThUS$) 293,092  (*) 174,549  (**)
Number of shares among which the dividend is distributed 604,437,877,587  604,437,877,587 
Dividend per share (US$) 0.000485  0.000289 
(*) It corresponds to mandatory minimum dividend provision charged to equity related to the net income for the year 2024. The minimum dividend proposal for the 2024 financial year it must be approved by the Board of Directors when appropriate in accordance with the applicable regulations.
(**) In the Ordinary Shareholders' Meeting held on April 25, 2024,it was agreed to distribute a final dividend proposed by the Board of Directors in the Ordinary Session of April 3, 2024, amounting to ThUS$174,549, which corresponds to 30% of the net income for the year 2023. The payment was made on May 16, 2024.

NOTE 25 - REVENUE
The detail of revenues is as follows:
For the year ended December 31,
2024 2023 2022
ThUS$ ThUS$ ThUS$
Passengers 11,233,287  10,215,148  7,636,429 
Cargo 1,599,756  1,425,393  1,726,092 
Total 12,833,043  11,640,541  9,362,521 
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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 December 31,
2024 2023 2022
ThUS$ ThUS$ ThUS$
Aircraft fuel (3,970,077) (3,947,220) (3,882,505)
Other rentals and landing fees (1,470,057) (1,322,795) (1,036,158)
Aircraft maintenance (815,916) (601,804) (582,848)
Aircraft rental (*) (4,164) (91,876) (202,845)
Commissions (230,127) (244,160) (167,035)
Passenger services (331,918) (271,838) (184,357)
Other operating expenses (1,448,052) (1,351,571) (1,136,490)
Total (8,270,311) (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)
For the year ended December 31,
2024 2023 2022
ThUS$ ThUS$ ThUS$
Payments for leases of low-value assets (18,555) (16,632) (17,959)
Total (18,555) (16,632) (17,959)
(b)Depreciation and amortization
Depreciation and amortization are detailed below:
For the year ended December 31,
2024 2023 2022
ThUS$ ThUS$ ThUS$
Depreciation (*) (1,375,101) (1,151,015) (1,125,154)
Amortization (72,555) (54,358) (54,358)
Total (1,447,656) (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 year ended December 31, 2024 is ThUS$668,936 (ThUS$565,384 for the same year in December 31, 2023 and ThUS$ 463,306 in December 31, 2022).
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(c)Financial costs
The detail of financial costs is as follows:
For the year ended December 31,
2024 2023 2022
ThUS$ ThUS$ ThUS$
Bank loan interests (452,778) (400,052) (714,310)
Financial leases (49,809) (58,011) (45,384)
Lease liabilities (318,267) (224,824) (152,132)
Other financial expenses (61,096) (15,344) (30,577)
Total (881,950) (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.
(d)Gains (losses) from restructuring activities
Gains (losses) from restructuring activities are detailed below:
For the year ended at December 31,
2024 2023 2022
ThUS$ ThUS$ 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 
Others —  —  18,893 
Total —  —  1,679,934 
(*)See Note 24 (g)

The Company did not recorded gains/(losses) restructuring activities during 2024 and 2023.
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(e)Financial income
Financial income is detailed below:
For the year ended December 31,
2024 2023 2022
ThUS$ 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 income 142,411  125,356  90,709 
Total 142,411  125,356  1,052,295 
(*)See Note 34 (a.4.)
(**)See Note 24 (g)
(f)Other gains (losses)
Other gains (losses) are detailed below:
For the year ended December 31,
2024 2023 2022
ThUS$ ThUS$ ThUS$
Adjustment net realizable value fleet available for sale —  (39,163) (345,410)
Other (36,223) (51,880) (1,667)
Total (36,223) (91,043) (347,077)
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NOTE 27 - OTHER INCOME, BY FUNCTION
Other income, by function is as follows:
For the year ended December 31,
2024 2023 2022
ThUS$ ThUS$ ThUS$
Tours 60,437  36,297  24,068 
Aircraft leasing —  —  18,164 
Customs and warehousing 37,710  27,553  30,323 
Maintenance 5,632  7,784  7,995 
Income from non-airlines products LATAM Pass (*) 35,904  15,148  23,954 
Other miscellaneous income 60,986  61,859  49,782  (**)
Total 200,669  148,641  154,286 
(*)During the twelve months period ended December 31, 2024, the Company reclassified income from non-airline redemption products Latam Pass from revenue to other income. Prior year comparative amounts for the twelve months period ended December 31, 2023, which totaled approximately US$4.7 million (US$3.7 million in 2022), were not material and as a result were not revised to conform to the current year presentation.
(**) Additionally, this item included within this amount ThUS$30,408 in December 31, 2022 related to the compensation of Delta Air Lines Inc. for the JBA signed during 2019.
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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.

Following are the current exchange rates for the US dollar, on the dates indicated:
As of December 31, As of December 31, As of December 31,
2024 2023 2022
Argentine peso 1,030.50  807.98  177.12 
Brazilian real 6.18  4.85  5.29 
Chilean peso 996.46  877.12  855.86 
Colombian peso 4,403.50  3,872.49  4,845.35 
Euro 0.96  0.90  0.93 
Australian dollar 1.61  1.46  1.47 
Boliviano 6.86  6.86  6.86 
Mexican peso 20.54  16.91  19.50 
New Zealand dollar 1.77  1.58  1.58 
Peruvian Sol 3.80  3.70  3.81 
Paraguayan Guarani 7,815.0  7,270.6  7,332.20 
Uruguayan peso 43.80  38.81  39.71 
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Foreign currency
The foreign currency detail of balances of monetary items in current and non-current assets is as follows:
As of
December 31, 2024		 As of
December 31, 2023
ThUS$ ThUS$
Current assets
Cash and cash equivalents 630,133  386,216 
Argentine peso 4,184  1,808 
Brazilian real 4,529  7,108 
Chilean peso 17,440  47,907 
Colombian peso 12,156  8,968 
Euro 15,721  25,329 
U.S. dollar 532,670  237,251 
Other currency 43,433  57,845 
   
Other financial assets, current 7,768  14,659 
Chilean peso 2,130  4,367 
Euro 67  3,722 
U.S. dollar 5,086  5,971 
Other currency 485  599 
Other non - financial assets, current 58,675  36,654 
Brazilian real —  — 
Chilean peso 29,968  12,354 
Euro 4,105  5,310 
U.S. dollar 2,542  10,735 
Other currency 22,060  8,255 
Trade and other accounts receivable, current 214,599  279,586 
Argentine peso 8,729  12,831 
Brazilian real —  — 
Chilean peso 64,915  69,588 
Colombian peso 1,562  1,453 
Euro 96,438  90,699 
U.S. dollar 7,503  68,893 
Other currency 35,452  36,122 
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As of
December 31, 2024		 As of
December 31, 2023
ThUS$ ThUS$
Current assets
Accounts receivable from related entities, current 24  27 
Chilean peso 24  27 
U.S. dollar —  — 
Tax current assets 13,121  17,258 
Chilean peso 2,035  2,202 
Colombian peso 7,020  6,084 
Peruvian sun 1,909  7,108 
Other currency 2,157  1,864 
Total current assets 924,320  734,400 
Argentine peso 12,913  14,639 
Brazilian real 4,529  7,108 
Chilean peso 116,512  136,445 
Colombian peso 20,738  16,505 
Euro 116,331  125,060 
U.S. Dollar 547,801  322,850 
Other currency 105,496  111,793 
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As of
December 31, 2024		 As of
December 31, 2023
ThUS$ ThUS$
Non-current assets
Other financial assets, non-current 13,627  15,375 
Brazilian real 2,989  3,807 
Chilean peso 876  2,073 
Colombian peso —  — 
Euro 4,579  4,252 
U.S. dollar 2,315  2,071 
Other currency 2,868  3,172 
Other non - financial assets, non-current 5,127  9,856 
Argentine peso —  — 
Brazilian real 5,058  9,789 
U.S. dollar —  — 
Other currency 69  67 
Accounts receivable, non-current 4,126  4,732 
Chilean peso 4,126  4,732 
Deferred tax assets 5,147  1,048 
Colombian peso 5,112  859 
U.S. dollar —  144 
Other currency 35  45 
Total non-current assets 28,027  31,011 
Argentine peso —  — 
Brazilian real 8,047  13,596 
Chilean peso 5,002  6,805 
Colombian peso 5,112  1,700 
Euro 4,579  4,252 
U.S. dollar 2,315  2,230 
Other currency 2,972  2,428 
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The foreign currency detail of balances of monetary items in current liabilities and non-current is as follows:

Up to 90 days 91 days to 1 year
As of
December 31, 2024		 As of
December 31, 2023		 As of
December 31, 2024		 As of
December 31, 2023
ThUS$ ThUS$ ThUS$ ThUS$
Current liabilities
Other financial liabilities, current 30,413  4,331  872  1,010 
Chilean peso 1,621  1,364  747  702 
Euro 26,191  —  6  — 
U.S. dollar 2,131  2,510  —  — 
Other currency 470  457  119  308 
       
Trade and other accounts payables, current 817,925  616,032  8,639  9,583 
Argentine peso 5,203  2,074  133  132 
Brazilian real 13,237  13,401  765  922 
Chilean peso 175,057  128,838  1,556  1,560 
Colombian peso —  —  —  — 
Euro 48,804  54,744  7  7 
U.S. dollar 513,970  350,635  1,773  1,797 
Peruvian sol 45,244  42,347  4,301  4,994 
Mexican peso 1,890  2,019  —  — 
Pound sterling 4,811  17,379  18  11 
Uruguayan peso 1,253  706  5  39 
Other currency 8,456  3,889  81  121 
       
Accounts payable to related entities, current 7,520  5,154  —  — 
Chilean peso —  —  —  — 
U.S. dollar 7,520  5,154  —  — 
       
Other provisions, current 10  16  14,161  12,429 
Chilean peso —  —  4  4 
Other currency 10  16  14,157  12,425 
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Up to 90 days 91 days to 1 year
As of
December 31, 2024		 As of
December 31, 2023		 As of
December 31, 2024		 As of
December 31, 2023
ThUS$ ThUS$ ThUS$ ThUS$
Current liabilities
Other non-financial liabilities, current 11,031  15,634  5,330  6,099 
Argentine peso 1,286  836  478  445 
Chilean peso 3,916  4,338  2,688  4,026 
Colombian peso 1,122  1,456  1,187  1,066 
U.S. dollar 3,185  7,305  758  416 
Other currency 1,522  1,699  219  146 
       
Total current liabilities 866,899  641,167  29,002  29,121 
Argentine peso 6,489  2,910  611  577 
Brazilian real 13,237  13,401  765  922 
Chilean peso 180,594  134,540  4,995  6,292 
Colombian peso 1,122  1,456  1,187  1,066 
Euro 74,995  54,744  13  7 
U.S. dollar 526,806  365,604  2,531  2,213 
Other currency 63,656  68,512  18,900  18,044 
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More than 1 to 3 years More than 3 to 5 years More than 5 years
As of
December 31, 2024		 As of
December 31, 2023		 As of
December 31, 2024		 As of
December 31, 2023		 As of
December 31, 2024		 As of
December 31, 2023
ThUS$ ThUS$ ThUS$ ThUS$ ThUS$ ThUS$
Non-current liabilities
Other financial liabilities, non-current 90,248  32,867  2,791  2,871  167,538  165,511 
Chilean peso 33,318  17,020  2,749  2,500  166,495  164,942 
Brazilian real —  —  —  — 
Euro 43,861  —  42  —  1,043  — 
U.S. dollar 12,217  14,110  —  —  —  — 
Other currency 852  1,737  —  371  —  569 
           
Accounts payable, non-current 22,407  72,783  —  —  —  — 
Chilean peso 16,477  16,774  —  —  —  — 
U.S. dollar 4,397  54,441  —  —  —  — 
Other currency 1,533  1,568  —  —  —  — 
Other provisions, non-current 44,993  49,427  —  —  —  — 
Argentine peso 2,685  3,570  —  —  —  — 
Brazilian real 37,227  42,244  —  —  —  — 
Chilean peso 1,996  —  —  —  —  — 
Colombian peso 330  395  —  —  —  — 
Euro 2,653  3,053  —  —  —  — 
U.S. dollar 102  165  —  —  —  — 
           
Provisions for employees benefits, non-current 89,950  79,749  —  —  —  — 
Chilean peso 82,804  76,247  —  —  —  — 
U.S. dollar 7,146  3,502  —  —  —  — 
           
Total non-current liabilities 247,598  234,826  2,791  2,871  167,538  165,511 
Argentine peso 2,685  3,570  —  —  —  — 
Brazilian real 37,227  42,244  —  —  —  — 
Chilean peso 134,595  110,041  2,749  2,500  166,495  164,942 
Colombian peso 330  395  —  —  —  — 
Euro 46,514  3,053  42  —  1,043  — 
U.S. dollar 23,862  72,218  —  —  —  — 
Other currency 2,385  3,305  —  371  —  569 
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As of
December 31, 2024		 As of
December 31, 2023
ThUS$ ThUS$
General summary of foreign currency:
Total assets 952,347  765,411 
Argentine peso 12,913  14,639 
Brazilian real 12,576  20,704 
Chilean peso 121,514  143,250 
Colombian peso 25,850  18,205 
Euro 120,910  129,312 
U.S. dollar 550,116  325,080 
Other currency 108,468  114,221 
Total liabilities 1,313,828  1,073,496 
Argentine peso 9,785  7,057 
Brazilian real 51,229  56,567 
Chilean peso 489,428  418,315 
Colombian peso 2,639  2,917 
Euro 122,607  57,804 
U.S. dollar 553,199  440,035 
Other currency 84,941  90,801 
Net position
Argentine peso 3,128  7,582 
Brazilian real (38,653) (35,863)
Chilean peso (367,914) (275,065)
Colombian peso 23,211  15,288 
Euro (1,697) 71,508 
U.S. dollar (3,083) (114,955)
Other currency 23,527  23,420 
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NOTE 29 – EARNINGS (LOSS) PER SHARE
For the year ended December 31,
2024 2023 2022
Basic earnings per share  
Income attributable to owners of the parent company (ThUS$) 976,972  581,831  1,339,210 
Weighted average number of shares, basic (*) 604,437,877,587 604,437,869,545 96,614,464,231
Basic earnings per share (US$) 0.001616  0.000963  0.013861 
  For the year ended December 31,
  2024 2023 2022
Diluted earnings per share
Income attributable to owners of the parent company (ThUS$) 976,972  581,831  1,339,210 (***)
Weighted average number of shares, diluted (**) 604,441,789,335 604,441,789,335 98,530,451,071
Diluted earnings per share (US$) 0.001616  0.000963  0.013592 
(*)As of December 31, 2024, the weighted average number of shares considers 604,437,877,587 shares outstanding from January 1, 2024 to December 31, 2024. 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. 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 share.
(**)As of December 31, 2024, the number of weighted diluted shares considers 604,437,877,587 shares outstanding and 3,911,748 shares outstanding from January 1, 2024 until December 31, 2024, assuming the full conversion of the Convertibles Notes that were issued on the date of exit from Chapter 11. As of December 31, 2023, the number of weighted diluted shares considers 604,437,877,587 shares from January 1, 2023 to December 31, 2023, and 3,911,748 shares outstanding from January 1 to December 31, 2023, assuming the full conversion of the convertible bonds that were issued on the date of exit from Chapter 11. 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.

(***) 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.


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NOTE 30 – CONTINGENCIES
I.    Lawsuits         

Company Court Case Number Origin Stage of trial Amounts
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$8,562 (€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 ThUS$8,562 (€8,220,000 Euros) to ThUS$2,327 (€2,240,000 Euros). This ruling was appealed by LAN Cargo S.A. and LATAM on June 9, 2022. The other eleven airlines also appealed the ruling affecting them. The European Commission responded to our appeal of September 7, 2022. Lan Cargo S.A. and LATAM answered the Commission’s arguments on November 11, 2022. Finally, the European Commission replied to our defense in January 2023. On February 13, 2023, LAN Cargo, S.A. and LATAM requested the European Court to hold an oral hearing to ensure the Court's full understanding of some points of the discussion. The European Court held a hearing on April 10, 2024. We are currently awaiting a decision. On September 5, 2024, the Advocate General of the European Court of Justice issued a non-binding opinion affirming that the European Court should dismiss all the appeals of the airlines and maintain the fines imposed. The European Court usually follows the majority of the Advocate General’s recommendations, so it is highly likely that the final decision will confirm the fines, in our case, €2,240,000 euros.
 2,327
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Company Court Case Number Origin Stage of trial Amounts
Committed (*)
ThUS$
Lan Cargo S.A. y LATAM Airlines Group S.A. In the Ovre Romerike Disrtict Court (Norway) and Directie Juridische Zaken Afdeling Ceveil Recht (Netherlands) — 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 (pending the final decision of the European Commission), 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. Only the withdrawal of KLM’s claim has been notified in the case of Norway.
 —
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$102. The action also deals with the affirmative obligation required by the CADE consisting of the duty to publish the condemnation in a widely circulating newspaper.  This obligation had also been stayed by the court of federal justice in this process.  Awaiting CADE’s statement. ABSA began a judicial review in search of an additional reduction in the fine amount.  In December 2018, the Justice Federal ruled negatively against ABSA, indicating that it will not apply a additional reduction to the fine imposed. The Judge’s decision was published on March 12, 2019, and we filed an appeal against it on March 13, 2019
 9,132
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Company Court Case Number Origin Stage of trial Amounts
Committed (*)
ThUS$
Aerolinhas Brasileiras S.A. Justicia Federal. 0001872-58.2014.4.03.6105 A lawsuit filed by ABSA with a motion for preliminary injunction, was filed on February 28, 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$3,216 – R$19,877,623.21- probable y ThUS$7,234 – R$44,706,265.59- possible). We must await a decision on the Treasury appeal.
 10,450
Tam Linhas Aéreas S.A. Tribunal Regional Federal da 2a Região. 2001.51.01.012530-0 (linked to this process Pas 19515.721154/2014-71, 19515.002963/2009-12) Ordinary judicial action filed by TAM Linhas Aéreas for the purpose of declaring the nonexistence of legal relationship obligating the company to collect the Air Fund.
Unfavorable court decision in first instance. Currently expecting the ruling on the appeal filed by the company. In order to suspend chargeability of Tax Credit a Guaranty Deposit to the Court was delivered for R$ 260,223,373.10-original amount in 2012/2013, which currently equals ThUS$87,082 (R$538,168,490.91). The court decision requesting that the Expert make all clarifications requested by the parties in a period of 30 days was published on March 29, 2016.  The plaintiffs’ submitted a petition on June 21, 2016 requesting acceptance of the opinion of their consultant and an urgent ruling on the dispute. In September 2022 with a decision for the parties, they will rule on more evidence and then we will have to wait for a resolution. No amount additional to the deposit that has already been made is required if this case is lost. A ruling is currently pending on the company’s appeal.
 68,949
Tam Linhas Aéreas S.A. Secretaria da Receita Federal do Brasil. 10880.725950/2011-05 A claim filed by the tax authorities questioning the offsetting of credits from the Social Integration Program (PIS in Portuguese) and Social Security Financing Contribution (COFINS in Portuguese) declared in the Offsetting Declarations (DCOMPs in Portuguese). The objection (manifestação de inconformidade) filed by the company was rejected, which is why the voluntary appeal was filed.  The case was assigned to the 1st Ordinary Group of Brazil’s Administrative Council of Tax Appeals (CARF) on June 8, 2015.  TAM’s appeal was included in the CARF session held August 25, 2016. An agreement that converted the proceedings into a formal case was published on October 7, 2016. The company has received the results of the due diligence and presented a claim. On August 21, 2024, a decision was rendered in the Remedy of Appeal adverse to LATAM Airlines Brazil. We need to wait for service of the decision to evaluate the next steps to take. 30,360
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Company Court Case Number Origin Stage of trial Amounts
Committed (*)
ThUS$
TAM Linhas Aéreas S.A. 10 ª Vara das Execuções Fiscais Federais de São Paulo 0061196-68.2016.4.03.6182 Tax Enforcement Lien No. 0020869-47.2017.4.03.6182 on Profit-Based Social Contributions from 2004 to 2007. This tax enforcement was referred to the 10th Federal Jurisdiction on February 16, 2017.  A petition reporting our request to submit collateral was recorded on April 18, 2017.  At this time, the period is pending for the plaintiff to respond to our petition. The bond was replaced. Currently, the evidentiary stage has begun. 28,425
TAM Linhas Aéreas S.A. Secretaría de Receita Federal 5002912.29.2019.4.03.6100 A lawsuit filed by TAM 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. 8,454
TAM Linhas Aéreas S.A. Delegacía de Receita Federal 10611.720852/2016-58 An improper charge of the Contribution for the Financing of Social Security (COFINS) on an import There 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. the debt is paid. We are awaiting a response from the authority. 12,847
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Company Court Case Number Origin Stage of trial Amounts
Committed (*)
ThUS$
TAM Linhas Aéreas S.A. Delegacía de Receita Federal 16692.721.933/2017-80 The Internal Revenue Service of Brazil issued a notice of violation because TAM applied for credits offsetting the contributions for the Social Integration Program (PIS) and the Social Security Funding Contribution (COFINS) that do not bear a direct relationship to air transport (Referring to 2012). An administrative defense was presented on May 29, 2018, which was partially in favor of the company. We filed an appeal and it was decided that the process will become a due diligence. We are awaiting the due diligence. 25,727
TAM Linhas Aéreas S.A. União Federal 2001.51.01.020420-0 TAM and other airlines filed a recourse claim seeking a finding that there is no legal or tax basis to be released from collecting the Additional Airport Fee (“ATAERO”). In 2001, the Company filed a court claim and in 2009, an initial decision was rendered partially in favor of the Company. In 2016, the Court dismissed the appeal by the plaintiffs. We filed new appeals before the STJ (Superior Court of Justice of Brazil) and STF (Supreme Federal Court of Brazil). Those appeals (special and extraordinary) were denied, so we filed another appeal, called Internal Appeal, on which a decision is pending. 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. —
TAM Linhas Aéreas S.A. Receita Federal do Brasil 19515-720.823/2018-11 An administrative claim against TAM 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.  The Company filed an Appeal to the Appellate Branch of the Internal Revenue Administrative Court (CARF in Portuguese) on September 17, 2019, that is pending a decision. 104,846
TAM Linhas Aéreas S.A. Receita Federal de Brasil 10880.938832/2013-19 The decision denied the reallocation petition  and did not equate the Social Security Tax (COFINS) credit declarations for the second quarter of 2011, which were determined to be in the non-cumulative system (proportionality of the PIS and COFINS credits) An administrative defense was argued on March 19, 2019. The Court dismissed the Company’s defense in December 2020.  The Company filed an Appeal to the Appellate Branch of the Internal Revenue Administrative Court (CARF in Portuguese) that is pending a decision. 18,594
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Company Court Case Number Origin Stage of trial Amounts
Committed (*)
ThUS$
TAM Linhas Aéreas S.A. Receita Federal de Brasil 10880.938834/2013-16 The decision denied the reallocation petition and did not equate the Social Security Tax (COFINS) credit declarations for the third quarter of 2011, which were determined to be in the non-cumulative system. (proportionality of the PIS and COFINS credits) An administrative defense was argued on March 19, 2019. The Court dismissed the Company’s defense in December 2020.  The Company filed an Appeal to the Appellate Branch of the Internal Revenue Administrative Court (CARF in Portuguese) that is pending a decision 13,770
TAM Linhas Aéreas S.A. Receita Federal de Brasil 10880.938837/2013-41 The decision denied the reallocation petition and did not equate the Social Security Tax (COFINS) credit declarations for the fourth quarter of 2011, which were determined to be in the non-cumulative system. (proportionality of the PIS and COFINS credits) An administrative defense was argued on March 19, 2019.  The Court dismissed the Company’s defense in December 2020.  The Company filed an Appeal to the Appellate Branch of the Internal Revenue Administrative Court (CARF in Portuguese) that is pending a decision 17,982
TAM Linhas Aéreas S.A. Receita Federal de Brasil 10880.938838/2013-96 The decision denied the reallocation petition and did not equate the Social Security Tax (COFINS) credit declarations for the second quarter of 2012, which were determined to be in the non-cumulative system. (proportionality of the PIS and COFINS credits) We presented our administrative defense. The Court dismissed the Company’s defense in December 2020.  The Company filed an Appeal to the Appellate Branch of the Internal Revenue Administrative Court (CARF in Portuguese) that is pending a decision 11,614
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Company Court Case Number Origin Stage of trial Amounts
Committed (*)
ThUS$
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 Aires 1408/2017
Consumidores Libres Coop. Ltda. filed this claim on March 14, 2017 regarding a provision of services.  It petitioned for the reimbursement of certain fees or the difference in fees charged for passengers who purchased a ticket in the last 10 years but did not use it.
Federal Commercial and Civil Trial Court No. 11 in the city of Buenos Aires.  After 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.
 —
TAM Linhas Aéreas S.A. Receita Federal de Brasil 10.880.938842/2013-54 The 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. (proportionality of the PIS and COFINS credits) We presented our administrative defense. The Court dismissed the Company’s defense.  The Company filed an Appeal to the Appellate Branch of the Internal Revenue Administrative Court (CARF in Portuguese) that is pending a decision. 13,297
TAM Linhas Aéreas S.A. Receita Federal de Brasil 10.880.938844/2013-43 The 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. (proportionality of the PIS and COFINS credits) We presented our administrative defense. The Court dismissed the Company’s defense in December 2020.  The Company filed an Appeal to the Appellate Branch of the Internal Revenue Administrative Court (CARF in Portuguese) that is pending a decision. 12,195
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TAM Linhas Aéreas S.A. Receita Federal de Brasil 10880.938841/2013-18 The 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.(proportionality of the PIS and COFINS credits) We presented our administrative defense. The Court dismissed the Company’s defense in December 2020.  The Company filed an Appeal to the Appellate Branch of the Internal Revenue Administrative Court (CARF in Portuguese) that is pending a decision 11,991
TAM Linhas Aéreas S.A. Receita Federal de Brasil 10840.727719/2019-71 The Federal Tax Service issued a notice of violation in applying for collection of the PIS/COFINS tax for 2014 (proportionality of the PIS and COFINS credits). We presented our administrative defense on January 11, 2020. The Court dismissed the Company’s defense in December 2020.  The Company filed an Appeal to the Appellate Branch of the Internal Revenue Administrative Court (CARF in Portuguese). On September 17, 2024, the Judge made a request to see the case file. 36,334
TAM Linhas Aéreas S.A. Receita Federal de Brasil 10880.910559/2017-91 A decision was rendered that refused the petition for reassignment and did not equate the COFINS credit declarations for the third quarter of 2014, which meant the non-accumulative system (proportionality of the PIS and COFINS credits). It 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 an Appeal to the Appellate Branch of the Internal Revenue Administrative Court (CARF in Portuguese) that is pending a decision. 10,482
TAM Linhas Aéreas S.A. Receita Federal de Brasil 10880.910547/2017-67 A decision was rendered that refused the petition for reassignment and did not equate the COFINS credit declarations for the first quarter of 2013, which meant the non-accumulative system (proportionality of the PIS and COFINS credits). We presented our administrative defense (Manifestação de Inconformidade). The Court dismissed the Company’s defense in December 2020.  The Company filed an Appeal to the Appellate Branch of the Internal Revenue Administrative Court (CARF in Portuguese) that is pending a decision. 12,080
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Committed (*)
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TAM Linhas Aéreas S.A. Receita Federal de Brasil 10880.910553/2017-14 A decision was rendered that refused the petition for reassignment and did not equate the COFINS credit declarations for the fourth quarter of 2013, which meant the non-accumulative system (proportionality of the PIS and COFINS credits). We presented our administrative defense (Manifestação de Inconformidade). The Court dismissed the Company’s defense in December 2020.  The Company filed an Appeal to the Appellate Branch of the Internal Revenue Administrative Court (CARF in Portuguese) that is pending a decision. 11,682
TAM Linhas Aéreas S.A. Receita Federal de Brasil 10880.910555/2017-11 A decision was rendered that refused the petition for reassignment and did not equate the COFINS credit declarations for the first quarter of 2014, which meant the non-accumulative system (proportionality of the PIS and COFINS credits). We presented our administrative defense (Manifestação de Inconformidade). The Court dismissed the Company’s defense in December 2020.  The Company filed an Appeal to the Appellate Branch of the Internal Revenue Administrative Court (CARF in Portuguese) that is pending a decision. 12,292
TAM Linhas Aéreas S.A. Receita Federal de Brasil 10880.910560/2017-16 A decision was rendered that refused the petition for reassignment and did not equate the COFINS credit declarations for the fourth quarter of 2014, which meant the non-accumulative system (proportionality of the PIS and COFINS credits). We presented our administrative defense (Manifestação de Inconformidade). The Court dismissed the Company’s defense in December 2020.  The Company filed an Appeal to the Appellate Branch of the Internal Revenue Administrative Court (CARF in Portuguese) that is pending a decision. 10,784
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Committed (*)
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TAM Linhas Aéreas S.A. Receita Federal de Brasil 10880.910550/2017-81 A decision was rendered that refused the petition for reassignment and did not equate the COFINS credit declarations for the third quarter of 2013, which meant the non-accumulative system (proportionality of the PIS and COFINS credits). We presented our administrative defense (Manifestação de Inconformidade). The Court dismissed the Company’s defense in December 2020.  The Company filed an Appeal to the Appellate Branch of the Internal Revenue Administrative Court (CARF in Portuguese) that is pending a decision. 12,450
TAM Linhas Aéreas S.A. Receita Federal de Brasil 10880.910549/2017-56 A decision was rendered that refused the petition for reassignment and did not equate the COFINS credit declarations for the second quarter of 2013, which meant the non-accumulative system (proportionality of the PIS and COFINS credits). We presented our administrative defense (Manifestação de Inconformidade). The Court dismissed the Company’s defense in December 2020.  The Company filed an Appeal to the Appellate Branch of the Internal Revenue Administrative Court (CARF in Portuguese) that is pending a decision. 10,413
TAM Linhas Aéreas S.A. Receita Federal de Brasil 10880.910557/2017-01 A decision was rendered that refused the petition for reassignment and did not equate the COFINS credit declarations for the second quarter of 2014, which meant the non-accumulative system (proportionality of the PIS and COFINS credits). We presented our administrative defense (Manifestação de Inconformidade). The Court dismissed the Company’s defense in December 2020.  The Company filed an Appeal to the Appellate Branch of the Internal Revenue Administrative Court (CARF in Portuguese) that is pending a decision. 9,869
TAM Linhas Aéreas S.A Receita Federal do Brasil 10840.722712/2020-05 Administrative trial that deals with the collection of PIS/Cofins proportionality (fiscal year 2015). TAM presented an administrative defense but the decision was unfavorable. The Company filed a voluntary appeal (CARF) that is pending a decision. 29,099
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Committed (*)
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TAM Linhas Aéreas S.A. Receita Federal do Brasil 10880.978948/2019-86 A decision was rendered that refused the petition for reassignment and did not equate the COFINS credit declarations for the fourth quarter of 2015, which meant the non-accumulative system (proportionality of the PIS and COFINS credits).  TAM filed its administrative defense on July 14, 2020.  A decision is pending. The Company filed an Appeal to the Appellate Branch of the Internal Revenue Administrative Court (CARF in Portuguese) that is pending a decision. 16,018
TAM Linhas Aéreas S.A. Receita Federal do Brasil 10880.978946/2019-97 A decision was rendered that refused the petition for reassignment and did not equate the COFINS credit declarations for the third quarter of 2015, which meant the non-accumulative system (proportionality of the PIS and COFINS credits).  TAM filed its administrative defense on July 14, 2020 with an unfavorable decision.The Company filed an appeal with the appellate administrative court. A partial decision was made on the appeal on September 17, 2024 (voluntary appeal). 9,690
TAM Linhas Aereas S.A. Receita Federal do Brasil 10880.978944/2019-06 A decision was rendered that refused the petition for reassignment and did not equate the COFINS credit declarations for the second quarter of 2015, which meant the non-accumulative system (proportionality of the PIS and COFINS credits).  TAM filed its administrative defense on July 14, 2020 with an unfavorable decision.  A decision is pending. The Company filed an appeal with the appellate administrative court. A partial decision was made on the appeal on September 17, 2024 (voluntary appeal). 10,263
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Committed (*)
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Latam Airlines Group S.A 23° Juzgado Civil de Santiago C-8498-2020 Class 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. A reconciliation hearing was held on March 27, 2024, but no agreement was reached. An interim decision on evidence was rendered on May 14, 2024, and on June 18th, the reconsideration of that resolution was denied, which began the evidentiary period.The amount at the moment is undetermined. —
TAM Linhas Aéreas S.A Receita Federal de Brasil 13074.726429/2021-41 Notice of a violation prepared for the COFINS request regarding taxable events presumably occurring between 2016 and 2017. TAM filed its administrative defense with an unfavorable decision.  The Company filed an Appeal to the Appellate Branch of the Internal Revenue Administrative Court (CARF in Portuguese). A partial decision on the appeal by LATAM Airlines Brazil was rendered on August 21, 2024. We need to wait for service of the decision to evaluate the next steps to take. 16,747
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TAM Linhas Aéreas S.A. Receita Federal de Brasil 2007.34.00.009919-3(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. In March 2007, the company filed a lawsuit protesting a court order so that the impact of social security payments on funds would not be eliminated (social security payments are applicable to 1/3 of vacation time, salary during maternity leave and illness subsidies). The decision rendered on February 2, 2008 was against the company, so it filed an appeal. The Appellate Court issued a decision partially in favor of the company. A Special/Extraordinary Remedy was filed that was stayed until the Court’s decision – (Topic STF 985). The matter was partially decided in the Supreme Court’s decision of June 2024 (STF) on the “leading case” of another company. After analyzing the decision by the Federal Supreme Court, LATAM Airlines Brazil confirmed that payments are owed for one-third of the vacation time from September 2020 to May 2024. 60,891
TAM Linhas Aéreas S.A. UNIÃO FEDERAL 0052711-85.1998.4.01.0000 An 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. —
TAM Linhas Aéreas S.A Tribunal do Trabajo de São Paulo 1000115-90.2022.5.02.0312 A 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 action was considered partially valid. The case is awaiting hearing by the Regional Labor Court. 430
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TAM Linhas Aéreas S.A Receita Federal 15746.728063/2022-00 This is an administrative claim regarding alleged irregularities in the payment of Technical Assistance (SAT) in 2018. The trial court administrative defense has been presented and the ruling was adverse. The company filed an appeal that was referred to the Brazilian Federal Administrative Tax Court (CARF in Portuguese) for a ruling on December 4, 2024. One of the judges asked to analyze the case on the day of the hearing, so a new hearing date is pending. 14,930
TAM Linhas Aéreas S.A União Federal 1003320-78.2023.4.06.3800 Legal 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 Treasury. The decision was in favor of the company and the debt was canceled. A remedy filed by União Federal is pending. 18,225
TAM Linhas Aéreas S.A União Federal 12585.720017/2012-84 This 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). Administrative defense presented. The administrative defense was denied. The Company presented a Voluntary Appeal (CARF) which was denied. A special appeal was presented, which was partially favorable. Waiting for the “liquidação” decision to be finalized. 8,690
TAM Linhas Aéreas S.A União Federal 10880-982.487/2020-80 This 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) (proportionality of the PIS and COFINS credits) An administrative defense was presented but was dismissed. The Company filed an Appeal to the Appellate Branch of the Internal Revenue Administrative Court (CARF in Portuguese). On September 17, 2024, the proceedings became a measure to analyze time-barred credits. 8,637
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TAM Linhas Aéreas S.A União Federal 10880-967.530/2022-49 This 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). (proportionality of the PIS and COFINS credits) An administrative defense was presented. A decision is pending. 8,963
TAM Linhas Aéreas S.A União Federal 10880-967.532/2022-38 This 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). (proportionality of the PIS and COFINS credits) An administrative defense was presented and a decision is pending. 9,621
TAM Linhas Aéreas S.A União Federal 10880-967.533/2022-82 This 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). (proportionality of the PIS and COFINS credits) An administrative defense was presented and a decision is pending. 16,961
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TAM Linhas Aéreas S.A União Federal 19613.725650/2023-86 A 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. (proportionality of the PIS and COFINS credits) An administrative defense was presented and a decision is pending. 11,878
LATAM Airlines Group S.A. Tribunal de Defensa de la Libre Competencia 445-2022 On 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. On July 15, 2024, the TDLC resolved that the Resolution of the National Customs Bureau consulted by Aerosan did not violate Law Decree No. 211. For the time being, the amount is indeterminate.
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LATAM Airlines Group S.A. Tribunal de Defensa de la Libre Competencia 489-2023 A 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. On July 27, 2023, the TDLC issued a ruling favorable to LATAM, which annulled the precautionary measure in its entirety for not complying with the legal requirements. or the time being, the amount is indeterminate. —
LATAM Airlines Group S.A. 23° Juzgado Civil de Santiago C-8156-2022 A 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. On November 18, 2023, LATAM filed the statement of defense. On August 6, 2024, LATAM petitioned that the proceedings be declared to have been abandoned. For the time being, the amount is undetermined. —
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TAM Linhas Aéreas S.A União Federal 10880.967587/2022-48 This 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. 9,687
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LATAM Airlines Group S.A. Tribunal de Defensa de la Libre Competencia NC-388-2011
On August 11, 2023, 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 VIII.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.
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. The Supreme Court unanimously dismissed the appeal against judgment by the JAC, LATAM opposed both actions of the JAC. There are no appeals pending in this case.


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. JetSmart filed two remedies of reconsideration against the decision by the Antitrust Court on October 4, 2023. 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. (Continues on the next page)
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(Continues from the previous page)
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 October 30, 2023, LATAM filed a brief petitioning for the dismissal of the new precautionary measure petition of JetSmart. 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. The Office of the National Economic Prosecutor (FNE), the JAC, the National Consumer Service (SERNAC), Sky Airline and CONADECUS also provided information in January and February 2024. The Civil Aviation Board submitted a petition for clarification to the Antitrust Court on February 13, 2024, asking whether a tender could be convened of international frequencies on the Santiago-Lima Route that expire in 2024. LATAM filed a brief on February 15, 2024 stating that no matter needed to be clarified and that the petition should be dismissed. The Antitrust Court ruled against the Civil Aviation Board on February 15, 2024 because there were no obscure or doubtful aspects to clarify. On April 25, 2024, a tender was held for two Santiago-Lima frequencies and both were awarded to JetSmart. LATAM furnished the certificate of that tender to the Antitrust Court. On June 19, 2024, LATAM accompanied an economic report and observations to the report presented by JetSmart. On July 19, 2024, the JAC, JetSmart, LATAM and Sky presented additional information. On July 31, 2024, the Public Hearing was held at the TDLC, with the participation of the JAC, the FNE, JetSmart, CONADECUS and LATAM. On December 18, 2024, the Antitrust Court of Chile (TDLC in Spanish) asked the Office of the National Economic Prosecutor (FNE in Spanish) to report on the status of the investigation in Case #2755-24 mentioned in the information it provided, and it asked the Civil Aviation Board (JAC in Spanish) to report on the status of the citizen consultation regarding a change in the frequency assignment regulations. Both the FNE and the JAC presented their responses on December 24, 2024. On January 10, 2025, the TDLC dismissed JetSmart’s petition in the non-contentious process dated September 26, 2023 and declared that the tender terms and conditions created no material risks that might violate the provisions in Decree Law 211. On January 24, 2025, JetSmart filed an appeal against the TDLC ruling. On January 29,2025, the TDLC declared it admissible and sent it to the Supreme Court for consideration and resolution.
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TAM Linhas Aéreas S.A. União Federal 10880.967612/2022-93 This is a petition to recover a credit Cofins in the 1rd quarter of 2019 (proportionality of the PIS and COFINS credits) The administrative defense has been presented and a decision is pending. 9,615
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 pending. An agreement was made for the payment of ThUS$4,480 (R$25,000,000.00).The payment in the agreement was made in full.
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TAM Linhas Aéreas S.A UNIÃO FEDERAL 1012674-80.2018.4.01.3400 Legal 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. —
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LATAM Airlines Perú S.A. Tribunal Fiscal - An appeal will be filed before the legal deadline against Intendancy Resolution #4070140001797 served December 31, 2024, which declared the Company’s remedy of claim unfounded. Decision Resolutions #0120030130232 and #0120030130245 were notified on December 22, 2022, as was Fine Resolution #0120020038314, notified on December 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 2015.
On 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. The audit area voided the objection to the Major Maintenance expense of approximately US$63 million in the notice of Complementary Outcome of Request #0122220002363 dated September 4, 2024. However, it maintains the other objections. Decision Resolutions #0120030139681 and #0120030139682 were notified on September 16, 2024, as was Fine Resolution #0120020040024 because of a violation of Article 178.1 of the Tax Code. The Company filed a remedy of claim on October 23, 2024 against those resolutions, which was processed under Claim Docket #4070340001599. However, the National Customs and Tax Administration Commission (SUNAT in Spanish) decided, in Intendancy Resolution #4070140001797 notified December 31, 2024, to declare that the Company’s remedy of claim was unfounded. Consequently, an appeal will be filed against that resolution before the legal deadline.
 122,953
TAM Linhas Aéreas S.A União Federal 10880-927.871/2023-62 This is a petition to recover Social Security Funding Contributions (Cofins in Portuguese) from the first semester of 2020 (proportionally). The administrative defense has been presented and a decision is pending. 11,059
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TAM Linhas Aéreas União Federal 19613.720519/2024-11
On February 7, 2024, the Brazilian Federal Tax Service issued a tax assessment against TAM Linhas Aéreas (19613.720519/2024-11) for the amount of ThUS$47,104 (MR$262,845) related to certain tax credits on “PIS COFINS” ( Federal Social Contributions Taxed on Gross Income) during the 2019/2020 period.

 The company filed an administrative response challenging the total amount of the tax assessment. The company received a partial decision on its defense on September 11, 2024. The company filed an appeal and is awaiting a decision on it. 44,638
LATAM Airlines Group S.A. 15° Juzgado Civil de Santiago C-15990-2024 This is a class action filed by the National Consumers and Users Association (abbreviated as CONADECUS in Spanish) against LATAM Airlines Group S.A., American Airlines, Inc. and Delta Airlines, Inc. alleging several infringements of the Consumer Protection Law because flights were cancelled due to a flaw in the Crowdstrike antivirus software. It is petitioning for the imposition of fines and a damage indemnity in defense of the collective or diffuse interest of consumers. LATAM has retained expert attorneys to handle its defense. LATAM Airlines Group was served the claim on September 17, 2024. On September 27, 2024, LATAM filed a remedy of reconsideration against the resolution that declared the action filed by the National Consumers and Users Association (CONADECUS in Spanish) admissible, which was dismissed by the court on November 20, 2024. LATAM filed a brief of answer to the claim on December 9, 2024. The amount is as yet undetermined. —
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Company Court Case Number Origin Stage of trial Amounts
Committed (*)
ThUS$
LATAM Airlines Brasil Tribunales de Justicia del Estado de Sao Paulo Rol 1002928-30.2024.8.26.0659; Rol 1174718-13.2024.8.26.0100; Rol 1001368-42.2024.8.26.0695; Rol 0012257-66.2024.5.15.0004; Rol 1182239-09.2024.8.26.0100; Rol 1003874-02.2024.8.26.0659 Lawsuits against the companies Voepass and LATAM Airlines Brasil for alleged liability in civil proceedings, presented by Luana dos Santos Bezerra Bounhe and others; Aracy Ribeiro Moreira and others; Naira Maria da Silva Gusson do Nascimento; Laura dos Reis Camilo and another; and Silvia Nicole Dantas Costa Maia and others; and a lawsuit against the same companies for alleged labor liability filed by Marcus Vinicius Ávila Santanna and others.
In the litigation with Luana dos Santos Bezerra Bounhe and others (Role 1002928-30.2024.8.26.0659), on December 19, 2024, the parties submitted a request for approval of the agreement concluded extrajudicially. The remaining 5 processes remain in process. All these litigations are under insurance coverage.
 —
LATAM Airlines Brasil União Federal 17459.720028/2024-67 A Notice of Infringement was received in which the business fund amortizations (agiotage) made in the 2019 and 2020 calendar years were rejected in the calculation of Business Income Tax (IRPJ in Portuguese) and the Social Assessment on Earnings (CSL in Portuguese). An administrative defense has been presented and we are awaiting a decision. 20,653



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In order to deal with any financial obligations arising from legal proceedings in effect at December 31, 2024, 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.


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II. The following table contains proceedings that were closed or changed to remote status during 2024, according to what was disclosed in the contingencies note of the corresponding financial statement:
Company Court Case Number Origin Stage of trial Status
LATAM Airlines Group S.A 22° Juzgado Civil de Santiago C-29.945-2 016 The Company received notice of a civil liability claim by Inversiones Ranco Tres S.A. on January 18, 2017. It is represented by Mr. Jorge Enrique Said Yarur. It was filed against LATAM Airlines Group S.A. for an alleged contractual default by the Company and against Ramon Eblen Kadiz, Jorge Awad Mehech, Juan Jose Cueto Plaza, Enrique Cueto Plaza and Ignacio Cueto Plaza, directors and officers, for alleged breaches of their duties. In the case of Juan Jose Cueto Plaza, Enrique Cueto Plaza and Ignacio Cueto Plaza, it alleges a breach, as controllers of the Company, of their duties under the incorporation agreement. LATAM has retained legal counsel specializing in this area to defend it. The claim was answered on March 22, 2017 and the plaintiff filed its replication on April 4, 2017. LATAM filed its rejoinder on April 13, 2017, which concluded the argument stage of the lawsuit. A reconciliation hearing was held on May 2, 2017, but the parties did not reach an agreement. The Court issued the evidentiary decree on May 12, 2017. We filed a petition for reconsideration because we disagreed with certain points of evidence. That petition was partially sustained by the Court on June 27, 2017. The evidentiary stage commenced and then concluded on July 20, 2017. Observations to the evidence must now be presented. That period expires August 1, 2017. We filed our observations to the evidence on August 1, 2017. We were served the decision on December 13, 2017 that dismissed the claim since LATAM was in no way liable. The plaintiff filed an appeal on December 26, 2017. Arguments were pled before the Santiago Court of Appeals on April 23, 2019, and on April 30, 2019, this Court confirmed the ruling of the trial court absolving LATAM. The losing party was ordered to pay costs in both cases. 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. Case closed. Disclosed in the Company's consolidated financial statements as of December 2023
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Company Court Case Number Origin Stage of trial Status
LatamAirlines Ecuador S.A Tribunal Distrital de lo Fiscal 17509-201 4-0088 An 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. The company has decided not to continue with the lawsuit.
 Disclosed in the Company's consolidated financial statements as of March 2024
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Company Court Case Number Origin Stage of trial Status
Latam Airlines Group S.A. 25° Juzgado Civil de Santiago C-8903-20 20 Class 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 petitioned that the Appellate Court determine the costs of the procedure, which must be defrayed by CONADECUS. The procedural costs were set on December 19, 2023 and personal costs were decided on January 3, 2024. The costs of the trial court are currently pending, which were petitioned by LATAM on December 20, 2023. CONADECUS currently has no petitions against the settlement reached between LATAM and AGRECU. Case closed. Disclosed in the Company's consolidated financial statements as of March 2024
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Company Court Case Number Origin Stage of trial Status
LATAM Finance Limited Grand 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. On May 23, 2024, the Grand Court of Cayman Islands approved withdrawal of the petition for a provisional liquidation requested May 8, 2024, and cancelled the appointment of the provisional liquidators of LATAM Finance Limited, thereby putting an end to the status of provisional liquidation of the company in the Cayman Islands. Case closed
 Disclosed in the Company's consolidated financial statements as of June 2024
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Company Court Case Number Origin Stage of trial Status
Peuco Finance Limited Grand 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. On May 23, 2024, the Grand Court of Cayman Islands approved withdrawal of the petition for a provisional liquidation requested May 8, 2024, and cancelled the appointment of the provisional liquidators of Peuco Finance Limited, thereby putting an end to the status of provisional liquidation of the company in the Cayman Islands. Case closed
 Disclosed in the Company's consolidated financial statements as of June 2024
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Company Court Case Number Origin Stage of trial Status
Piquero Leasing Limited Grand 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. On May 23, 2024, the Grand Court of Cayman Islands approved withdrawal of the petition for a provisional liquidation requested May 8, 2024, and cancelled the appointment of the provisional liquidators of Piquero Leasing Limited, thereby putting an end to the status of provisional liquidation of the company in the Cayman Islands. Case closed
 Disclosed in the Company's consolidated financial statements as of June 2024
Tam Linhas Aéreas S.A. Secretaria da Receita Federal do Brasil. 10880.722. 355/2014-5 2 On August 19th, 2014 the Federal Tax Service issued a notice of violation stating that compensation credits Program (PIS) and the Contribution for the Financing of Social Security COFINS by TAM are not directly related to the activity of air transport. (a case related to the theory argued by the company on the proportionality of the PIS and COFINS credits). 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. A decision was rendered in favor of the company that cancelled the debt. Case closed. Disclosed in the Company's consolidated financial statements as of June 2024
TAM Linhas Aéreas S.A. Tribunal del Trabajo de Brasília/ DF 0000038-2 5.2021.5.1 0.0017 This 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 action was considered favorable to TAM and closed Disclosed in the Company's consolidated financial statements as of June 2024
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Company Court Case Number Origin Stage of trial Status
SNEA (Sindicato Nacional das empresas aeroviárias) União Federal 0012177-5 4.2016.4.0 1.3400
A claim filed by TAM and SNEA against the 72% increase in airport control fees (TAT-ADR) and approach control fees (TAT-APP) charged by the Airspace Control Department (“DECEA”).
On January 30th, 2024, SNEA obtained a favorable court decision from the 2nd Instance (TRF1), regarding its appeal. SNEA filed an appeal (motion for clarification) to clarify missing points regarding the deposits made with the court. On September 24, 2024, a decision was rendered in favor of LATAM Airlines Brazil authorizing it to withdraw 100% of the guarantee deposits after it presents an insurance policy. Considering this resolution, the contingency has been classified as remote, so the company reversed the provision.
 Disclosed in the Company's consolidated financial statements as of September 2024
LATAM Airlines Group S.A Sucursal Perú Tribunal Fiscal 12511-202 2 Appeal filed 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). On August 29, 2024, we received service of the Tax Court Decision #07706-4-2024 revoking the part of Intendant Resolution #4070140000100 concerning objections to Income Tax and income tax payments on exclusivity income from Banco de Crédito del Perú and the sale of miles to non-airline partners. It also ordered that the balance owed and the credit for payments made be recalculated. That recalculation does not alter the use of that amount as a compensable credit and bears no relationship to the objections dismissed. However, the National Customs and Tax Administration Commission of Peru (abbreviated as SUNAT, in Spanish) can file a contentious administrative claim with the Superior Court of Justice through November 29, 2024. The contingency has been classified as remote Disclosed in the Company's consolidated financial statements as of September 2024
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Company Court Case Number Origin Stage of trial Status
LATAM Airlines Perú S.A. Tribunal Fiscal Expedient e de Apelación N° 2545-2023 Appeal 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 this resolution which has been resolved and notified on April 10, 2024 through RTF 3149-9-2024, through which the Tax Court has decided to revoke RI No. 4070140000253 and proceed to reliquidate the Tax. On June 28, 2024, notice was received of Intendent Resolution #4070150000505 in which the National Customs and Tax Administration Commission (SUNAT in Spanish) voided the amounts in strict observance of the order by the Administrative Tax Court, thereby concluding this administrative stage, with procedural effects from July 1, 2024. SUNAT did not file a contentious administrative claim with the Superior Court of Justice against Tax Court Decision #3149-9-2024, so the process has ended. Disclosed in the Company's consolidated financial statements as of September 2024

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III. 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 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. The investigation is completed.

3)    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. On August 28, 2023, the FNE sent LATAM an Official Ordinary Letter requesting additional information, the response to which was sent on September 27, 2023. An Official Ordinary Letter was received on October 14, 2024 in which the FNE requested additional information from LATAM. That letter was answered on November 4, 2024. The most recent activity in the investigation of Case #2484-18 is an Official Ordinary Letter dated November 21, 2024, which was answered in two parts: the first on December 6, 2024 and the second on December 11, 2024.

4)    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. An Official Ordinary Letter was received on March 4, 2024 in the investigation in Case #2669-21 in which the FNE requested additional information from LATAM. That letter was answered on March 15, 2024. An Official Ordinary Letter was received on April 19, 2024 in which the FNE requested additional information from LATAM. That letter was answered on May 2, 2024. The most recent activity in the investigation of Case #2669-21 is an Official Ordinary Letter dated December 11, 2024, which was answered in two parts: the first on December 26, 2024 and the second on January 8, 2025.

5)    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 company on November 27, 2023. On December 29, 2023, CADE sent a new request to LATAM Airlines Brasil requesting more complete information, to which LATAM responded in parts, on February 16, 2024, March 11, 2024, March 22, 2024 and June 11, 2024. LATAM Airlines Brasil is cooperating with the authority and remains committed to transparency and compliance with all applicable rules and regulations.


6)    The competition authority reacted to an article in the press and sent an official letter [or request] to TAM Linhas Aéreas S.A. (LATAM Airlines Brazil) seeking information on the acquisition of other types of aircraft. The company received it on March 21, 2024 and responded on April 1, 2024. CADE sent a new letter requesting additional information on July 9, which was answered by LATAM Airlines Brasil on July 25, 2024. LATAM Airlines Brazil is cooperating with the authority and maintains its commitment to transparency and compliance with all applicable laws and regulations.

7) Brazilian consumer authorities sent three official letters to LATAM Airlines Brazil in August and September 2024 requesting information on the crash of a Voepass airplane. LATAM Airlines Brazil has a code-share agreement with Voepass. The company answered those letters properly by the deadline. The National Consumer Secretariat decided to archive the procedure due to the sufficiency of the responses presented by the company. The procedures before the Consumer Defense Institute of the State of Paraná (PROCON PR) and the State of São Paulo (PROCON SP) are still ongoing. LATAM Airlines Brazil also received an official letter from the Office of the Public Prosecutor on August 12, 2024, which it answered on August 27, 2024. On September 5, 2024, the Prosecutor's Office issued a decision to separate the procedure into three specific topics: (1) security matters, in which LATAM Airlines Brasil is not a party; (2) consumer matters, with two representations filed; and (3) compensation matters, which will be closed due to the Reparation Program (PR 2283).
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IV. CMF Research Unit Result

On December 19, 2024, through Exempt Resolution No. 12095, the Financial Market Commission (CMF) informed LATAM Airlines Group S.A. of the application of Censure, as a result of the investigation process initiated in August of that year due to delays of only 9 hours and 38 minutes in relation to the deadlines established by General Regulation (NCG) 30 issue by the regulatory entity for the submission of the XBRL file for the financial statements corresponding to the third quarter of 2020, the date on which the Company was in its reorganization process under Chapter 11, as a result of the pandemic.
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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 July 15, 2024, LATAM Airlines Group S.A., acting through its Florida branch, amended, increased and extended the 2022 revolving credit facility (“Exit RCF”) from US$500 million to US$750 million with a consortium of nine banks led by JP Morgan Chase Bank, N.A. As of December 31, 2024, this credit facility is undrawn and fully available. Additionally, LATAM Airlines Group S.A., together with Professional Airline Services Inc., a Florida corporation and wholly owned subsidiary of LATAM Airlines Group S.A., issued: (i) on October 12, 2022, as amended on November 3, 2022, a five-year loan (“Term Loan B”) for US$1.1 billion (on October 15, 2024, this loan was fully repaid), (ii) on October 18, 2022, senior secured notes at 13.375% maturing in 2027 (“2027 Notes”) for a total principal amount of US$450 million (on October 15, 2024, this loan was fully repaid), and (iii) on October 18, 2022, senior secured notes at 13.375% maturing in 2029 (“2029 Notes,” together with the 2027 Notes, the “Notes”) for a total principal amount of US$700 million. The Exit RCF, the Term Loan B, and the Notes (collectively, the “Exit Financing”) share the same intangible collateral, consisting primarily of the FFP business (LATAM Pass loyalty program), the cargo business, certain slots, gates, and routes, as well as intellectual property and LATAM trademarks. The Exit Financing contains certain covenants that limit the ability of the Company and its subsidiaries 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 affiliate transactions, engage in certain business activities, or make certain investments. Additionally, the agreements include a minimum liquidity covenant requiring the Company to maintain a minimum liquidity level, measured at the consolidated level of the Company (LATAM Airlines Group S.A.), of US$750 million.

On July 15, 2024, LATAM Airlines Group S.A., acting through its Florida branch, amended, increased and extended the 2016 revolving credit facility (“RCF”) with a consortium of nine financial institutions led by Citibank, N.A., guaranteed by aircraft, engines and spare parts for a total committed amount from US$600 million to US$800 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, 2024, this line of credit is undrawn and fully available.

On November 3, 2022, LATAM Airlines Group S.A., acting through its Florida branch, entered into a five-year loan agreement (“Spare Engine Facility”) with, among other institutions, Crédit Agricole Corporate and Investment Bank, acting through its New York branch as loan agent, secured by spare engines for a principal amount of US$275 million. As of November 4, 2024, this loan was fully repaid. The loan included minimum liquidity covenants measured at the consolidated level of the Company (with a minimum level of US$750 million) and individually for LATAM Airlines Group S.A. and TAM Linhas Aéreas S.A. (with a minimum combined level of US$400 million).

On October 15, 2024, LATAM Airlines Group S.A. received the funds from its issuance of secured bonds at 7.875% maturing in 2030 (“2030 Notes,” together with the 2029 Notes, the “Notes”) for a total principal amount of US$1.4 billion. The Exit RCF and the Notes share the same intangible collateral, consisting primarily of the FFP business (LATAM Pass loyalty program), the cargo business, certain slots, gates, and routes, as well as intellectual property and LATAM trademarks. Additionally, the agreements include a minimum liquidity covenant requiring the Company to maintain a minimum liquidity level, measured at the consolidated level of the Company (LATAM Airlines Group S.A.), of US$750 million. The funds received were used to repay the Term Loan B and part of the 2027 Notes.

On November 4, 2024, LATAM Airlines Group S.A., acting through its Florida branch, entered into a new four-year revolving credit facility, secured by spare engines (“Spare Engine Facility”), with, among other institutions, Crédit Agricole Corporate and Investment Bank as loan agent, for a total amount of US$300 million, of which US$275 million was drawn on the same day, leaving US$25 million available for the Company when required.
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The loan included minimum liquidity covenants measured at the consolidated level of the Company (with a minimum level of US$750 million) and individually for LATAM Airlines Group S.A. and TAM Linhas Aéreas S.A. (with a combined minimum level of US$400 million). The funds received were used to fully repay the previous spare engine financing. Finally, this issuance was linked to sustainability (“Sustainability-Linked”), which entails a commitment to reducing CO2 emissions intensity from March 2025 until the maturity of the facility. Compliance or non-compliance with these targets does not result in acceleration of the credit but instead applies a reward or penalty, respectively, on the interest rate.

As of December 31, 2024, the Company complies with the aforementioned minimum liquidity covenants.

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b)Other commitments
As of December 31, 2024, the Company maintains valid letters of credit, guarantee notes and guarantee insurance policies, according to the following detail:
Creditor Guarantee Debtor Quantity Type Value
ThUS$		 Release
Date
SUPERINTENDENCIA NACIONAL DE ADUANAS Y DE ADMINISTRACION TRIBUTARIA LATAM Airlines Perú S.A. 50 Letter of Credit 217,753  Jan 5, 2025
SÉTIMA TURMA DO TRIBUNAL REGIONAL FEDERAL DA 1ª REGIÃO - PROCEDIMENTO COMUM CÍVEL - DECEA - 0012177-54.2016.4.01.3400 TAM Linhas Aereas S.A. / ABSA Aerolinhas Brasileiras S.A. 2 Guarantee Insurance 48,483  Apr 20, 2025
ISOCELES LATAM Airlines Group S.A. 1 Letter of Credit 41,000  Dec 1, 2025
UNIÃO FEDERAL - PGFN TAM Linhas Aereas S.A. / ABSA Aerolinhas Brasileiras S.A. 21 Guarantee Insurance 170,588  Apr 14, 2025
TRIBUNAL DEJUSTIÇADOESTADODABAHIA TAM Linhas Aereas S.A. 1 Guarantee Insurance 5,216  Jun 27, 2029
VARA DAS EXECUÇÕES FISCAIS ESTADUAIS DE SÃO PAULO - FORO DAS EXECUÇÕES FISCAIS DE SÃO PAULO TAM Linhas Aereas S.A. 2 Guarantee Insurance 9,460  Mar 4, 2025
AMERICAN ALTERNATIVE INS. CO. C/O ROANOKE INS. GROUP INC LATAM Airlines Group S.A. 23 Letter of Credit 7,457  Feb 1, 2025
TRIBUNAL DE JUSTIÇA DO ESTADO DE SÃO PAULO ABSA Aerolinhas Brasileiras S.A. 2 Guarantee Insurance 6,040  Dec 31, 2999
BBVA LATAM Airlines Group S.A. 1 Letter of Credit 3,800  Jan 23, 2025
1° VARA DE EXECUÇÕES FISCAIS E DE CRIMES CONTRA A ORDEM TRIB DA COM DE FORTALEZA TAM Linhas Aereas S.A. 1 Guarantee Insurance 2,816  Dec 31, 2999
ARQUITETURA DE PROTEÇÃO E DEFESA DO CONSUMIDOR DO ESTADO DO RJ TAM Linhas Aereas S.A. 1 Guarantee Insurance 1,148  Dec 31, 2999
13ª VARA FEDERAL DA SEÇÃO JUDICIÁRIA DO DISTRITO FEDERAL/DF TAM Linhas Aereas S.A. 1 Letter of Credit 1,780  Dec 31, 2999
14ª VARA FEDERAL DA SEÇÃO JUDICIÁRIA DO DISTRITO FEDERAL / TRIBUNAL: 7ª TURMA DO TRIBUNAL REGIONAL FEDERAL DA 1ª REGIÃO - ANULATÓRIA N.º 0007263-25.2008.4.01.3400 TAM Linhas Aereas S.A. 1 Guarantee Insurance 1,627  May 29, 2025
JFK INTERNATIONAL AIR TERMINAL LLC LATAM Airlines Group S.A. 1 Letter of Credit 2,300  Jan 27, 2025
METROPOLITAN DADE CONTY (MIAMI - DADE AVIATION DEPARTMENT) LATAM Airlines Group S.A. 5 Letter of Credit 3,649  Mar 13, 2025
SOCIEDAD CONCESIONARIA NUEVO PUDAHUEL S.A. LATAM Airlines Group S.A. 19 Letter of Credit 2,599  Mar 27, 2025
FUNDACAO DE PROTECAO E DEFESA DO CONSUMIDOR PROCON TAM Linhas Aereas S.A. 11 Guarantee Insurance 19,214  Nov 17, 2025
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Creditor Guarantee Debtor Quantity Type Value
ThUS$		 Release
Date
BOND SAFEGUARD INSURANCE COMPANY TAM Linhas Aereas S.A. 1 Guarantee Insurance 2,700  Jul 20, 2025
LIMA AIRPORT PARTNERS S.R.L. LATAM Airlines Group S.A. 20 Letter of Credit 4,295  Feb 12, 2025
JUIZO DE DIREITO DA VARA DA FAZENDA PUBLICA ESTADUAL DA COMARCA DA CAPITAL DO ESTADO DO RIO DE JANEIRO TAM Linhas Aereas S.A. 1 Guarantee Insurance 1,240  Dec 31, 2999
MUNICIPIO DO RIO DE JANEIRO TAM Linhas Aereas S.A. 2 Guarantee Insurance 1,472  Dec 31, 2999
AENA AEROPUERTOS S.A LATAM Airlines Group S.A. 3 Letter of Credit 2,412  Nov 15, 2025
CORPAC S.A. LATAM Airlines Perú S.A. 22 Letter of Credit 4,623  Jan 29, 2025
CITY OF LOS ANGELES, DEPARTMENT OF AIRPORTS LATAM Airlines Group S.A. 7 Letter of Credit 1,810  Feb 6, 2025
Total 563,482 

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.


NOTE 32 - TRANSACTIONS WITH RELATED PARTIES
(a)Details of transactions with related parties as follows:
Tax No. Related party Nature of relationship with related parties Country
of origin		 Nature of related parties transactions Currency For the year ended December 31,
2024 2023 2022
ThUS$ ThUS$ ThUS$
96.810.370-9 Inversiones Costa Verde S.A. Related director Chile Tickets sales CLP 142  124  87 
78.180.506-1 Inversiones Costa Verde Ltda. y CPA. Related director Chile Dividends CLP (2) —  — 
76.183.853-9 Costa Verde Inversiones Financieras S.A. Related director Chile Tickets sales CLP 16  —  — 
Dividends CLP (1,904) —  — 
81.062.300-4 Costa Verde Aeronautica S.A. Common shareholder Chile Dividends CLP (6,870) —  — 
Loans received (*) US$ —  —  (231,714)
Interest received (*) US$ —  —  (21,329)
Capital contribution US$ —  —  170,962 
87.752.000-5 Granja Marina Tornagaleones S.A. Common shareholder Chile Services provided CLP —  —  36 
96.989.370-3 Rio Dulce S.A. (**) Related director Chile Tickets sales CLP —  —  2 
Foreign Inversora Aeronáutica Argentina S.A. Related director Argentina Real estate leases received ARS (5) (59) (63)
        Expense recovery ARS —  3  — 
Foreign TAM Aviação Executiva e Taxi Aéreo S.A. Common shareholder Brazil Services provided of passenger transport BRL —  —  4 
Foreign Qatar Airways Indirect shareholder Qatar Interlineal received service US$ (22,863) (22,107) (23,110)
        Services provided by aircraft lease US$ —  —  — 
        Interlineal provided service US$ 32,092  31,020  37,855 
Services received of handling US$ (88) (252) — 
        Services provided of handling US$ 1,058  —  692 
        Services received miles US$ (10,103) (4,657) (4,974)
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Tax No. Related party Nature of relationship with related parties Country
of origin		 Nature of related parties transactions Currency For the year ended December 31,
2024 2023 2022
Services provided miles US$ 2,783  1,683  894 
Dividends US$ (17,512) —  — 
        Services provided / received others US$ 776  1,424  (1,238)
Foreign Delta Air Lines, Inc. Shareholder U.S.A Interlineal received service US$ (319,499) (144,239) (111,706)
        Interlineal provided service US$ 213,153  127,145  102,580 
        Loans received (*) US$ —  —  (233,026)
        Interest received (*) US$ —  —  (10,374)
        Capital contribution US$ —  —  163,979 
        Services received of handling US$ (7,058) (3,657) (4,340)
Services received miles US$ (15,795) (11,069) (3,992)
Services provided miles US$ 8,335  7,328  2,410 
        Engine sale US$ —  —  19,405 
        Services provided maintenance US$ 995  —  — 
Dividends US$ (17,535) —  — 
Joint venture US$ (10,000) (10,000) — 
Real estates leases provided US$ 155  86  — 
Services provided VIP lounge US$ 1,756  640  — 
        Services provided / received others US$ (22) 344  (311)
Foreign QA Investments Ltd Common shareholder U.K. Loans received (*) US$ —  —  (240,440)
        Interest received (*) US$ —  —  (26,153)
        Capital contribution US$ —  —  163,979 
Foreign QA Investments 2 Ltd Common shareholder U.K. Loans received (*) US$ —  —  (7,414)
        Interest received (*) US$ —  —  (15,780)
Foreign Lozuy S.A. Common shareholder Uruguay Loans received (*) US$ —  —  (57,928)
        Interest received (*) US$ —  —  (5,332)
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.


(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 December 31,
2024 2023 2022
ThUS$ ThUS$ ThUS$
Remuneration 12,354  12,815  10,651 
Board compensation 1,786  1,429  1,109 
Non-monetary benefits 423  606  565 
Short-term benefits 17,483  13,604  11,814 
Termination benefits (*) 1,341  59  1,157 
Total 33,387  28,513  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.”
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(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.

The amounts paid for this concept, in accordance with the above, are:

Paid during the year
2024 2023 2022
ThUS$ ThUS$ ThUS$
URAs Directors 763 481  — 
URAs Board Committee 85 53  — 
Total 848  534  — 
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.






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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.

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 Date 20  %
Month 42 from Exit Date 30  %
Month 60 from Exit Date 50  %

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).
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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 will be eligible to become effective on the same terms and conditions as RSUs; however, 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 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 and December 31, 2024 , is as follows:

Opening balance as of 01.01.2023 Granted during the period Vested Exercised during the period Forfeited during the period Closing balance as of December 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 
MPP BASED RSU - Protection —  1,438,926,658  —  —  (192,047,245) 1,246,879,413 
Total —  8,798,310,109  —  —  (555,385,696) 8,242,924,413 




Opening balance as of 01.01.2024 Granted during the period Vested Exercised during the period Forfeited during the period Closing balance as of December 31, 2024
RSU - Retention 2,986,456,933  35,468,268  —  (692,032,415) (91,282,871) 2,238,609,915 
PSU - Performance 4,009,588,067  42,034,943  —  —  (89,352,930) 3,962,270,080 
MPP BASED RSU - Protection 1,246,879,413  —  —  —  (60,388,760) 1,186,490,653 
Total 8,242,924,413  77,503,211  —  (692,032,415) (241,024,561) 7,387,370,648 



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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:
For the year ended December 31,
Detail 2024 2023 2022
ThUS$ ThUS$ ThUS$
Issuance of shares —  —  800,000 
Issuance costs —  —  (80,000)
DIP Junior offset —  —  (170,962)
Total cash flow —  —  549,038 
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$80,000 deducted related to equity issuance cost, that are presented within Other sundry reserves of equity.
a.2.) Amount from the issuance of other equity instruments as of December 31, 2022:
Detail Convertible
Notes H 		Convertible
Notes I 		Total
ThUS$ 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 inflow 1,020,068  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 Th$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$491,326 (see Note 26(e)), Th$US$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$1,443,066 associated with the conversion of debt into shares and other minor effects of Th$US$3,596.

a.5.) The Company has also carried out non-monetary transactions related to Right of use assets, Lease liabilities and Financial leases.
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(b)Other inflows (outflows) of cash:
For the year ended December 31,
2024 2023 2022
ThUS$ ThUS$ ThUS$
Restricted Advances —  20,572  (26,918)
Bank commissions, taxes paid and other (3,355) (2,173) (5,441)
Taxes on financial transactions (10,563) (6,803) (2,134)
Guarantees 73,074  4,406  (47,384)
Judicial deposits 54,356  (16,349) (20,661)
Fuel derivatives and currency 31,853  30,413  35,857 
Derivative margin guarantees 10,902  (2,559) (40,207)
Payment for derivatives premiums (43,902) (47,853) (23,372)
Insurance recovery 9,788  —  — 
Total Other inflows (outflows) Operation activities 122,153  (20,346) (130,260)
Recoveries of credits and Guarantee deposit received from the sale of aircraft 34,469  48,258  6,300 
Insurance recovery —  11,000  — 
Total Other inflows (outflows) Investment activities 34,469  59,258  6,300 
Interest rate derivatives 1,456  15,934  — 
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) — 
Others recovery 510  —  — 
Costs associated with financing (64,146) —  — 
Withholding tax (11,689) —  — 
Debt-related legal advice —  —  (87,993)
RFC guarantee placement —  —  (7,500)
Total Other inflows (outflows) Financing activities (73,869) 11,405  (463,766)
(c)Dividends:
For the year ended
at December 31,
2024 2023 2022
ThUS$ ThUS$ ThUS$
Latam Airlines Group S.A. (174,549) —  — 
Transportes Aéreos del Mercosur S.A. (*) (289) —  — 
Total dividends paid (174,838) —  — 

(*) Dividends paid to minority shareholders
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(d)Reconciliation of liabilities arising from financing activities:
Cash flows Non cash-Flow Movements
As of
December 31, 2023		 Obtainment Payment Interest
accrued and
others		 As of
December 31, 2024
Capital (*) Capital (**) Interests Other flow
ThUS$ ThUS$ ThUS$ ThUS$ ThUS$ ThUS$ ThUS$
Obligations with financial institutions
Bank loans 1,029,434  —  (1,089,000) (167,026) —  226,592  — 
Guaranteed obligations 303,922  99,000  (28,938) (19,908) —  19,967  374,043 
Other guaranteed obligations 430,350  272,112  (330,870) (39,066) —  42,225  374,751 
Obligation with the public 1,302,838  1,378,948  (450,000) (156,862) (10,870) 175,249  2,239,303 
Financial leases 901,546  —  (105,734) (46,596) —  50,557  799,773 
Other loans 104  —  —  —  —  (104) — 
Lease liability 2,967,994  —  (344,038) (288,176) —  1,026,801  3,362,581 
Total Obligations with financial institutions 6,936,188  1,750,060  (2,348,580) (717,634) (10,870) 1,541,287  7,150,451 


Cash flows Non cash-Flow Movements  
As of
December 31, 2022		 Obtainment Payment Extinguishment
of debt under
Chapter 11		 Interest
accrued and
 others 		Reclassifications As of
December 31, 2023
Capital (*) Capital (**) Interests Legal advices related to debt
ThUS$ ThUS$ ThUS$ ThUS$ ThUS$ ThUS$ ThUS$ ThUS$ ThUS$
Obligations with financial institutions
Bank loans 1,385,995  —  (81,952) (153,791) —  —  189,272  (310,090) 1,029,434 
Guaranteed obligations 325,061  —  (19,726) (20,309) —  —  20,686  (1,790) 303,922 
Other guaranteed obligations 474,304  —  (56,519) (42,283) —  —  43,037  11,811  430,350 
Obligation with the public 1,289,799  —  —  (155,655) —  —  168,694  —  1,302,838 
Financial leases 1,088,239  —  (183,374) (48,272) —  —  58,076  (13,123) 901,546 
Other loans 2,028  —  (434) —  —  —  (70) (1,420) 104 
Lease liability 2,216,454  —  (225,358) (173,924) —  —  1,150,822  —  2,967,994 
Total Obligations with financial institutions 6,781,880  —  (567,363) (594,234) —  —  1,630,517  (314,612) 6,936,188 
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  Cash flows Extinguishment of debt under Chapter 11 Non cash-Flow Movements
  As of
December 31, 2021		 Obtainment Payment Interest
accrued and
others (****)		 Reclassifications As of
December 31, 2022
  Capital Capital (**) Interests Transaction
 cost
  ThUS$ ThUS$ ThUS$ ThUS$ ThUS$ ThUS$ ThUS$ ThUS$ ThUS$
Obligations with financial institutions
Loans to exporters 159,161  —  —  —  —  (161,975) 2,814  —  — 
Bank loans 521,838  982,425  (36,466) (10,420) —  (196,619) 128,077  (2,840) 1,385,995 
Guaranteed obligations 510,535  —  (18,136) (13,253) (25) —  13,882  (167,942) 325,061 
Other guaranteed obligations 2,725,422  3,658,690  (5,408,540) (391,639) (91,247) (381,018) 339,475  23,161  474,304 
Obligation with the public 2,253,198  1,109,750  (1,501,739) (17,499) —  (843,950) 148,703  141,336  1,289,799 
Financial leases 1,189,182  —  (270,734) (34,201) —  (37,630) 37,211  204,411  1,088,239 
Other loans 76,508  1,467,035  (1,523,798) (5,628) 3,281  (56,176) 40,806  —  2,028 
Lease liability 2,960,638  —  (131,917) (49,076) (2) (995,888) 492,592  (59,893) 2,216,454 
Total Obligations with financial institutions 10,396,482  7,217,900  (8,891,330) (521,716) (87,993) (2,673,256) 1,203,560  138,233  6,781,880 
(*) During the year 2024 the Company obtained ThUS$1,750,060 amounts from long-term loans. For 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, 2024, under the cash flows from financing activities are presented loan repayments of ThUS$2,004,542 and payments of lease liabilities of ThUS$344,038 (ThUS$342,005 and ThUS$225,358, respectively as of December 31, 2023, ThUS$(8,759,413) and ThUS$(131,917), respectively as of December 31, 2022).

(***) 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.


F-161
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Below are the details obtained (payments) of flows related to financing:
For the year ended
December 31,
2024 2023 2022
Capital
raising		 Payments Capital
raising		 Payments Capital
raising		 Payments
Flow of Capital Interest Capital Interest Capital Interest
ThUS$ ThUS$ ThUS$ ThUS$ ThUS$ ThUS$ ThUS$ ThUS$ ThUS$
Aircraft financing 99,000  (198,774) (69,249) —  (251,388) (76,497) —  (331,292) (52,088)
Lease liability —  (344,038) (288,176) —  (225,358) (173,924) —  (131,917) (49,076)
Non-aircraft financing 1,651,060  (1,805,768) (360,209) —  (90,617) (343,813) 7,217,900  (8,428,121) (420,553)
Total obligations with Financial institutions 1,750,060  (2,348,580) (717,634) —  (567,363) (594,234) 7,217,900  (8,891,330) (521,717)

(e)Advances of aircraft and engines

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

For the year ended December 31,
2024 2023 2022
ThUS$ ThUS$ ThUS$
Increases (payments) (219,010) (142,782) (23,118)
Recoveries 34,379  215,362  3,037 
Total cash flows (184,631) 72,580  (20,081)

(f)Additions of property, plant and equipment and Intangibles
For the year ended December 31,
2024 2023 2022
ThUS$ ThUS$ ThUS$
Net cash flows from
Purchases of property, plant and equipment 1,325,463  795,787  780,538 
Additions associated with maintenance 358,475  337,126  486,231 
Other additions 966,988  458,661  294,307 
Purchases of intangible assets 94,412  68,052  50,116 
Other additions 94,412  68,052  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 December 31,
2024 2023 2022
ThUS$ ThUS$ ThUS$
Net cash flows from (used in) operating activities 6,256  (47,569) (36,701)
Net cash flows from (used in) investment activities 819  3,661  (146)
Net cash flows from (used in) financing activities —  —  7,703 
Effects of variation in the exchange rate on cash and cash equivalents (7,075) 43,908  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$246,429 (ThUS$294,549 as of December 31, 2023 and ThUS$149,142 as of December 31, 2022).

(i) Payments of loans to related entities:
For the year ended December 31,
2024 2023 2022
ThUS$ ThUS$ 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)

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NOTE 35 - EVENTS SUBSEQUENT TO THE DATE OF THE FINANCIAL STATEMENTS
The Company’s Board of Directors agreed to submit for approval in an Extraordinary Shareholders' Meeting, to be held on March 17 , 2025, the creation a program for the acquisition of shares issued by the Company in accordance with Law No. 18,046 on Corporations as well as the establishment the maximum amount or percentage to be acquired, the objective and duration of the Share Repurchase Program and set the minimum and maximum price to be paid for the respective shares or delegate to the Board of Directors the power to set said price.
On February 28, 2025, Standard & Poor’s upgraded LATAM Airlines Group S.A.'s international credit rating from BB- to BB, with a stable outlook.
After December 31, 2024 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, 2024, have been approved in the Extraordinary Session of the Board of Directors on January 30, 2025. Further, the amendments to this note to include the subsequent events listed, have been approved in the Extraordinary Session of the Board of Directors on March, 13th, 2025.
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SIGNATURES
The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual report on its behalf.
Date: March 13, 2025 LATAM AIRLINES GROUP S.A.
By: /s/ Roberto Alvo Milosawlewitsch
Name: Roberto Alvo Milosawlewitsch
Title: LATAM Airlines Group CEO
143
EX-2.6 2 a26latam2024-2030notesinde.htm EX-2.6 Document

[Certain confidential portions of this exhibit have been redacted pursuant to 4(a) of the Instructions as to Exhibits of Form 20-F. The omitted information is (i) not material and (ii) is the type of information the Company treats as private or confidential. In addition, schedules and similar attachments to this exhibit have been omitted pursuant to the instructions as to Exhibits of Form 20-F.]

LATAM AIRLINES GROUP S.A.

EACH OF THE GUARANTORS PARTY HERETO

7.875% SENIOR SECURED NOTES DUE 2030
INDENTURE
Dated as of October 15, 2024
Wilmington Trust, National Association
as Trustee

and

Wilmington Trust, National Association
as Collateral Trustee



TABLE OF CONTENTS
Page
i

ii

iii

EXHIBITS
Exhibit A        FORM OF NOTE
Exhibit B         FORM OF CERTIFICATE OF TRANSFER
Exhibit C         FORM OF CERTIFICATE OF EXCHANGE
Exhibit D         FORM OF SUPPLEMENTAL INDENTURE
Exhibit E            FORM OF INTERCOMPANY NOTE
SCHEDULES
Schedule 1.01(a) ISSUE DATE LIENS INDENTURE dated as of October 15, 2024, among LATAM Airlines Group S.A., a Chilean sociedad anónima (the “Issuer”), each of the Guarantors party hereto and Wilmington Trust, National Association, as trustee and as collateral trustee.

iv

The Issuer, each Guarantor, the Trustee and the Collateral Trustee agree as follows for the benefit of each other and for the equal and ratable benefit of the Holders (as defined herein) of the 7.875% Senior Secured Notes due 2030 (the “Notes”):
Article 1

DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.01.Definitions.
“144A Global Note” means a Global Note substantially in the form of Exhibit A hereto bearing the Global Note Legend and the Private Placement Legend and deposited with or on behalf of, and registered in the name of, the Depositary or its nominee that will be issued in a denomination equal to the outstanding principal amount of the Notes sold in reliance on Rule 144A.
“2029 Notes” means the Issuer’s and Professional Airline Services, Inc.’s $700.0 million aggregate principal amount of 13.375% Senior Secured Notes due October 15, 2029.
“2029 Notes Indenture” means that certain indenture, dated as of October 18, 2022 by and among the Issuer, Professional Airline Services, Inc., the guarantors party thereto, Wilmington Trust, National Association, as trustee and the Collateral Trustee, pursuant to which the 2029 Notes were issued.
“2029 Notes Obligations” means Obligations with respect to the 2029 Notes and the related note guarantees.
“Acceptable Letter of Credit” means an irrevocable standby letter of credit on customary terms issued by a bank or branch having a long term unsecured debt rating of at least [*] (or the equivalent) or better by S&P, Moody’s or Fitch and drawable by the applicable Priority Lien Representative or Collateral Trustee, as applicable, upon presentation in New York.
“Account” means all “accounts” as defined in the UCC, and all rights to payment for interest (other than with respect to debt and credit card receivables).
“Additional Collateral” means any of the following assets pledged or mortgaged to the Collateral Trustee or a Local Collateral Agent, as applicable, after the Issue Date which would not have automatically been pledged or mortgaged pursuant to the Security Documents in existence as of the Issue Date without modifying such Security Documents or entering into new Security Documents not then in existence: (a) any category of Collateral set forth in the Security Documents as of the Issue Date (provided that any Slots or Gate Leaseholds pledged as Additional Collateral shall be at an Eligible Airport), (b) Aircraft, Engines, Spare Parts, Appliances or Parts, or (c) any other assets acceptable to the Controlling Representative (it being understood that cash, Cash Equivalents and Receivables shall be acceptable to the Controlling Representative), which in each case shall (i) be valued by a new Appraisal in accordance with the requirements of the applicable Security Documents at the time the Issuer designates such assets as Additional Collateral (except for any cash or Cash Equivalents), (ii) as of the date such assets are added as Collateral, be subject, to the extent purported to be created by the applicable Security Documents, to a perfected first priority Lien in favor of the Collateral Trustee (or a sub-trustee or sub-agent designated pursuant to the applicable Security Document) or a Local Collateral Agent, as applicable, for the benefit of the Priority Secured Parties and otherwise subject only to Permitted Liens (other than Liens referred to in clause (5) and (13) of the definition of Permitted Liens in effect as of the Issue Date).


“Additional Notes” means Notes (other than the Initial Notes) issued under this Indenture in accordance with Sections 2.02, 2.14 and 4.09 hereof which shall have identical terms as the Initial Notes, other than with respect to the date of issuance and issue price.
“Additional Priority Lien Debt” means additional Priority Secured Debt permitted to be incurred under each applicable Priority Lien Document to be secured by a Priority Lien equally and ratably with all previous existing and future Priority Secured Debt.
“Affiliate” means, as to any Person, any other Person which, directly or indirectly, is in control of, is controlled by, or is under common control with, such Person. For purposes of this definition, a Person (a “Controlled Person”) shall be deemed to be “controlled by” another Person (a “Controlling Person”) if the Controlling Person possesses, directly or indirectly, power to direct or cause the direction of the management and policies of the Controlled Person whether by contract or otherwise; provided that (i) beneficial ownership by any “person” or “group” of 10% or more of the Voting Stock of a Person shall be deemed to be control and (ii) the terms “person,” “group” and “beneficial owner” shall have the meanings ascribed to them when such terms are used pursuant to Sections 13(d), Section 14(d) and Rule 13d-3 of the Exchange Act, respectively.
“Agent” means any Registrar, co-registrar, Paying Agent or additional paying agent.
“Aggregate Exposure” shall mean, with respect to any Holder at any time, an amount equal to the sum of the amount of such Holder’s Notes then outstanding.
“Aggregate Exposure Percentage” shall mean, with respect to any Holder at any time, the ratio (expressed as a percentage) of such Holder’s Aggregate Exposure at such time to the Aggregate Exposure of all Holders at such time.
“Air Carrier Entity” means the Issuer and each other Guarantor that owns or operates Aircraft.
“Aircraft” means any contrivance invented, used, or designed to navigate, or fly in, the air, including, without duplication, the airframes related thereto.
2

“Aircraft Financing” means (i) any indebtedness, guarantee, finance lease, operating lease, sale and lease back or other financing arrangements (including any bonds, debentures, notes or similar instruments) in respect of or secured by Engines, Spare Parts, Aircraft, airframes or Appliances, Parts, components, instruments, appurtenances, furnishings, other equipment installed on such Engines, Spare Parts, Aircraft, airframes or any other related assets, (ii) any financing arrangements assumed or incurred in connection with the acquisition, construction (including any pre-delivery payments in connection with such acquisition or construction), modifications or improvement of any Engines, Spare Parts, Aircraft, airframes or Appliances, Parts, components, instruments, appurtenances, furnishings, other equipment installed on such Engines, Spare Parts, Aircraft, airframes or any other related assets, and (iii) extensions, renewals and replacements of such financing arrangements under clauses (i) and (ii); provided that, in each case under clauses (i), (ii) or (iii), such financing arrangement, if secured, is secured on a usual and customary basis (which may include the collateralization thereof with cash, Cash Equivalents or letters of credit) as determined by the Issuer in good faith for such financing arrangement or Indebtedness in respect of Engines, Spare Parts, Aircraft, airframes or Appliances, Parts, components, instruments, appurtenances, furnishings, other equipment installed on such Engines, Spare Parts, Aircraft, airframes or any other related assets.
“Aircraft Financing Related Cargo Business Assets” means assets described in clauses (a) and (b) of the definition of Cargo Business Assets.
“Airport Authority” means any city or any public or private board or other body or organization chartered or otherwise established for the purpose of administering, operating or managing airports or related facilities, which in each case is an owner, administrator, operator or manager of one or more airports or related facilities.
“Anti-Corruption Laws” means all applicable anti-corruption and anti-bribery laws, rules and regulations of any jurisdiction from time to time, including, without limitation, the U.S. Foreign Corrupt Practices Act of 1977, as amended.
“Anti-Money Laundering Laws” means any and all laws, rules and regulations of any jurisdiction applicable to the Issuer or its Subsidiaries or Affiliates from time to time concerning or relating to terrorism financing, money laundering or any predicate crime to money laundering, including, without limitation, any applicable provision of the Patriot Act and The Currency and Foreign Transactions Reporting Act (also known as the “Bank Secrecy Act,” 31 U.S.C. §§ 5311-5330 and 12 U.S.C. §§ 1818(s), 1820(b) and 1951-1959).
“Appliance” means any instrument, equipment, apparatus, part, appurtenance or accessory used, capable of being used, or intended to be used, in operating or controlling Aircraft in flight, including a parachute, communication equipment and another mechanism installed in or attached to an Aircraft during flight, and not a part of an Aircraft or Engine.
“Applicable Premium” means, with respect to any Note on any applicable Redemption Date, the greater of:
(A) 1.0% of the principal amount of such Note; and (B) the excess (to the extent positive) of:
3

(a)    the present value at such Redemption Date of (i) the redemption price of such Note at the First Call Date (such redemption price (expressed in percentage of principal amount) being set forth in Section 3.07(d) hereof (excluding accrued but unpaid Special Interest and other interest, if any)), plus (ii) all required interest payments due on such Note to and including such date set forth in clause (i) (excluding accrued but unpaid interest, if any), computed upon the Redemption Date using a discount rate equal to the Applicable Treasury Rate at such Redemption Date plus 50 basis points; over
(b)    the outstanding principal amount of such Note,
in each case, as calculated by the Issuer or on behalf of the Issuer by such Person as the Issuer shall designate. The Trustee shall have no duty to calculate or verify the calculations of the Applicable Premium.
“Applicable Procedures” means, with respect to any transfer or exchange of or for beneficial interests in any Global Note, the rules and procedures of the Depositary, Euroclear and Clearstream that apply to such transfer or exchange.
“Applicable Treasury Rate” means the weekly average for each Business Day during the most recent week that has ended at least two Business Days prior to the Redemption Date of the yield to maturity at the time of computation of United States Treasury securities with a constant maturity (as compiled and published in the Federal Reserve Statistical Release H.15 (or, if such statistical release is not so published or available, any publicly available source of similar market data selected by the Issuer in good faith)) most nearly equal to the period from the Redemption Date to the First Call Date; provided, however, that if the period from the Redemption Date to the First Call Date is not equal to the constant maturity of a United States Treasury security for which a yield is given, the Applicable Treasury Rate shall be obtained by linear interpolation (calculated to the nearest one-twelfth of a year) from the yields of United States Treasury securities for which such yields are given, except that if the period from the Redemption Date to such applicable date is less than one year, the weekly average yield on actually traded United States Treasury securities adjusted to a constant maturity of one year shall be used.
“Appraisal” means (a) the Initial Appraisals, (b) any other appraisal (a “Subsequent Appraisal”), certifying, at the time of determination, in reasonable detail the Appraised Value of the Coverage Assets that are the subject thereof, which is prepared by either, at the option of the Issuer, (i) an Initial Appraiser and any successor thereof (including any appraiser whose employees or principals previously appraised the relevant Coverage Assets) but solely in respect of asset classes assigned to such Initial Appraiser in the definition thereof or (ii) another independent appraisal firm appointed by the Issuer in good faith; provided that, (x) in the case of Pledged SGR, the methodology and form of presentation of such Subsequent Appraisal are consistent in all material respects with the methodology and form of presentation of the Initial Appraisal applicable to such type of Coverage Assets, or which, as to any deviations from such methodology (including as to discount rate and terminal value growth rate) and/or form of presentation, are otherwise in form and substance consistent with market practice for assets of such type in a manner as determined by the Issuer in good faith or (y) in the case of assets other than Pledged SGR, the Subsequent Appraisal sets forth the Fair Market Value thereof in a manner consistent with market practice for assets of such type as determined by the Issuer in good faith.
4

“Appraised Value” means, as of any date of determination, the sum of the aggregate value of all Coverage Assets as of such date, as reflected in the most recent Appraisals delivered to the Trustee in respect of such Coverage Assets in accordance with this Indenture as of that date (for the avoidance of doubt, calculated after giving effect to any additions to or eliminations from the Coverage Assets since the date of delivery of such Appraisal); provided that (i) if any Pledged Slots at an airport have been added to or eliminated from the Coverage Assets since the most recent Appraisal of the Pledged Slots at such airport and such most recent Appraisal assigned differing Appraised Values to Pledged Slots at such airport based on the criteria set forth in such most recent Appraisal, such added or eliminated Pledged Slots at such airport shall, for purposes of determining the Appraised Value of all remaining Pledged Slots at such airport (including any added Pledged Slots as the case may be), be assigned an Appraised Value in accordance with such criteria set forth in such most recent Appraisal (and for clarity, such assignment of Appraised Value to such added or eliminated Pledged Slots shall not otherwise impact the Appraised Value of any other Pledged Slots at such airport), and (ii) when used in reference to any particular Coverage Asset, “Appraised Value” shall mean the value of such Coverage Asset as reflected in such most recent Appraisal of such Coverage Asset; provided that if at the relevant time the Issuer has not previously delivered to the Trustee an Appraisal of a specific Coverage Asset item (such as a single Route), but has delivered to the Trustee an Appraisal that includes the Appraised Value of a portion of the Coverage Assets (such as all Routes to a particular region) that includes such specific Coverage Asset item, the Issuer shall allocate the Appraised Value of such specific Coverage Asset item on a reasonable basis, and such allocated amounts shall be the Appraised Value of such specific Coverage Asset item, except that this proviso shall not be applicable in a case where this Indenture or other Notes Document expressly requires that the Issuer obtains an Appraisal in respect of such specific Coverage Asset item.
“Asset Coverage Ratio” means, as of any date, the ratio of (a) the Appraised Value of the Coverage Assets as of such date to (b) the sum of (i) the aggregate principal amount of all Priority Lien Debt as of such date (including, other than for purposes of Section 4.16 hereof, without duplication of any outstanding principal amounts, the amount of any unfunded commitments under all revolving credit facilities (including the Revolving Credit Agreement) of the Issuer and its Restricted Subsidiaries) plus (ii) without duplication, any Senior Priority Refinancing Indebtedness plus (iii) the aggregate outstanding amount of Currency under any Frequent Flyer Program as of such date that has been Disposed by the Issuer or any Restricted Subsidiary pursuant to a financing arrangement for cash in advance of such Currency being redeemed for goods or services provided by the Issuer or its Restricted Subsidiaries (“Pre-Sold Currency”).
“Asset Coverage Test” means, with respect to the applicable Reference Date, the Asset Coverage Ratio will not be less than [*].
5

“Bankruptcy Code” means Title 11 of the United States Code (11 U.S.C. § 101 et seq.), as it has been, or may be, amended, from time to time.
“Bankruptcy Court” means the United States Bankruptcy Court for the Southern District of New York (together with any other court having jurisdiction over any proceeding therein from time to time).
“Bankruptcy Law” means the Bankruptcy Code or any similar federal or state law for the relief of debtors.
“Board of Directors” means the board of directors of the Issuer or any committee thereof duly authorized to act on behalf of the board of directors of the Issuer.
“Business Day” means any day other than a Legal Holiday.
“Capital Lease Obligation” means, at the time any determination is to be made, the amount of the liability in respect of a capital lease that would at that time be required to be capitalized and reflected as a liability on a balance sheet prepared in accordance with IFRS, as in effect immediately prior to the adoption of IFRS 16 (Leases), and the Stated Maturity thereof shall be the date of the last payment of rent or any other amount due under such lease prior to the first date upon which such lease may be prepaid by the lessee without payment of a penalty.
“Capital Stock” means:
(1)in the case of a corporation, corporate stock;
(2)in the case of an association or business entity or exempted company, any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock;
(3)in the case of a partnership or limited liability company, partnership interests (whether general or limited) or membership interests; and
(4)any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person,
(5)but excluding from all of the foregoing any debt securities convertible into Capital Stock, whether or not such debt securities include any right of participation with Capital Stock.
“Cargo Business Assets” means (a) all intercompany Aircraft leases in respect of freighter Aircraft used in the cargo business of the Issuer and its Restricted Subsidiaries, (b) all intercompany contracts providing rights to use the belly of passenger Aircraft for the cargo business of the Issuer and its Restricted Subsidiaries, (c) all accounts receivable in respect of the cargo business of the Issuer and its Restricted Subsidiaries and (d) all owned and leased real estate assets used in the cargo business of the Issuer and its Restricted Subsidiaries; provided that, for purposes of calculating the Asset Coverage Ratio and the Total Asset Coverage Ratio, the Cargo Business Assets shall not include any of the foregoing assets described in clauses (a) through (d) above to the extent owned or acquired by a Non-Guarantor Acquired Airline.
6

“Cargo Business Intellectual Property” means the Intellectual Property owned by the Issuer or any of its Restricted Subsidiaries that (i) is required or necessary to operate the cargo business of the Issuer and its Restricted Subsidiaries and (ii) is included as “LATAM Cargo Brand” in the most recent Appraisal in respect of Intellectual Property delivered pursuant to Section 4.15 or Section 4.26.
“Cash Equivalents” means each of the following:
(1)direct obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the United States (or by any agency thereof to the extent such obligations are backed by the full faith and credit of the United States), in each case maturing within one (1) year from the date of acquisition thereof;
(2)each Acceptable Letter of Credit;
(3)investments in commercial paper maturing within 365 days from the date of acquisition thereof and having, at such date of acquisition, a rating of at least A-2 (or the equivalent thereof) from S&P or P-2 (or the equivalent thereof) from Moody’s;
(4)investments in certificates of deposit (including investments made through an intermediary, such as the certificated deposit account registry service), banker’s acceptances, time deposits, eurodollar time deposits and overnight bank deposits maturing within one (1) year from the date of acquisition thereof issued or guaranteed by or placed with, and money market deposit accounts issued or offered by, any domestic office of any commercial bank of recognized standing organized under the laws of the United States or any State thereof that has a combined capital and surplus and undivided profits of not less than [*];
(5)fully collateralized repurchase agreements with a term of not more than six (6) months for underlying securities that would otherwise be eligible for investment;
(6)investments in money in an investment company registered under the Investment Company Act of 1940, as amended, or in pooled accounts or funds offered through mutual funds, investment advisors, banks and brokerage houses which invest its assets in obligations of the type described in clauses (1) through (5) above. This could include, but not be limited to, money market funds or short-term and intermediate bonds funds;
(7)money market funds that (i) comply with the criteria set forth in SEC Rule 2a-7 under the Investment Company Act of 1940, as amended, (ii) are rated AAA (or the equivalent thereof) by S&P and Aaa (or the equivalent thereof) by Moody’s and (iii) have portfolio assets of at least [*];
(8)securities with maturities of one (1) year or less from the date of acquisition issued or fully guaranteed by any state, commonwealth or territory of the United States, by any political subdivision or taxing authority of any such state, commonwealth or territory or by any foreign government, the securities of which state, commonwealth, territory, political subdivision, taxing authority or foreign government (as the case may be) are rated at least A- by S&P or A3 by Moody’s;
7

(9)any other securities or pools of securities that are classified under IFRS as Cash Equivalents or short-term investments on a balance sheet; and
(10)instruments or investments denominated in any currency that have a comparable tenor and credit quality to those referred to above (as determined by the Issuer in good faith) and (x) are customarily utilized in the countries in which such instrument is used or investment is made or (y) are consistent with the cash management practices of the Issuer (as determined by the Issuer in good faith).
“Cayman Companies Act” means the Companies Act (as revised) of the Cayman Islands.
[*]
“Clearstream” Clearstream Banking, société anonyme.
“Code” means the U.S. Internal Revenue Code of 1986, as amended from time to time.
“Collateral” means all assets and properties (real and personal) of the Issuer and the Guarantors now owned or hereafter acquired upon which Liens have been granted to the Collateral Trustee or a Local Collateral Agent, as applicable, to secure the Notes Obligations or any other Priority Lien Obligations, including without limitation any Additional Collateral and all of the “Collateral” (or such other equivalent term in the Security Documents) as defined in, and pledged pursuant to, the Security Documents (but excluding all such assets and properties released from such Liens pursuant to the applicable Security Document), together with all proceeds of the foregoing (including, without limitation, proceeds from Dispositions of the foregoing). For the avoidance of doubt, the Collateral includes the Permanent Collateral and the Supplemental Collateral (other than any Released Assets).
“Collateral Trust Agreement” means that certain Collateral Trust Agreement, dated as of October 12, 2022, among the Issuer, Professional Airline Services, Inc. and the Guarantors from time to time party thereto, the Existing Term Loan Administrative Agent, the Revolver Administrative Agent, the Trustee, the Collateral Trustee, each Local Collateral Agent from time to time party thereto and each other Priority Lien Representative (as defined in the Collateral Trust Agreement) from time to time party thereto, as the same may be amended, restated, modified, supplemented, extended or amended and restated from time to time in accordance with the terms thereof.
“Collateral Trustee” means Wilmington Trust, National Association, in its capacity as Collateral Trustee under the Collateral Trust Agreement, together with its successors in such capacity.
“Consolidated EBITDAR” means, with respect to any specified Person for any period, the Consolidated Net Income of such Person for such period plus, without duplication:
(1)an amount equal to any extraordinary, unusual, exceptional or nonrecurring loss plus any net loss realized by such Person or any of its Restricted Subsidiaries in connection with any Disposition of assets, to the extent such losses were deducted in computing such Consolidated Net Income; plus
8

(2)provision for taxes based on income or profits of such Person and its Restricted Subsidiaries, to the extent that such provision for taxes was deducted in computing such Consolidated Net Income; plus
(3)the Fixed Charges of such Person and its Restricted Subsidiaries, to the extent that such Fixed Charges were deducted in computing such Consolidated Net Income; plus
(4)any foreign currency translation losses (including losses related to currency remeasurements of Indebtedness) of such Person and its Restricted Subsidiaries for such period, to the extent that such losses were deducted in computing such Consolidated Net Income; plus
(5)depreciation, amortization (including amortization of intangibles but excluding amortization of prepaid cash charge or expense that was paid in a prior period) of such Person and its Restricted Subsidiaries to the extent that such depreciation, amortization and other non-cash charges or expenses were deducted in computing such Consolidated Net Income; plus
(6)the amortization of debt discount to the extent that such amortization was deducted in computing such Consolidated Net Income; plus
(7)deductions for grants to any employee of Issuer or its Restricted Subsidiaries of any Equity Interests during such period to the extent deducted in computing such Consolidated Net Income; plus
(8)any net loss arising from the sale, exchange or other disposition of capital assets by Issuer or its Restricted Subsidiaries (including any fixed assets, whether tangible or intangible, all inventory sold in conjunction with the disposition of fixed assets and all securities) to the extent such loss was deducted in computing such Consolidated Net Income; plus
(9)any losses arising under fuel hedging arrangements entered into prior to the Issue Date and any losses actually realized under fuel hedging arrangements entered into after the Issue Date, in each case to the extent deducted in computing such Consolidated Net Income; plus
(10)proceeds from business interruption insurance for such period, to the extent not already included in computing such Consolidated Net Income; plus
(11)any expenses and charges that are covered by indemnification or reimbursement provisions in connection with any permitted acquisition, merger, disposition, incurrence of Indebtedness, issuance of Equity Interests or any investment to the extent (a) actually indemnified or reimbursed and (b) deducted in computing such Consolidated Net Income; plus
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(12)non-cash items, other than the accrual of revenue in the ordinary course of business, to the extent such amount increased such Consolidated Net Income; plus
(13)the amount of any minority interest expense consisting of Restricted Subsidiary income attributable to minority equity interests of third parties in any non-wholly-owned Subsidiary; plus
(14)aircraft rentals expenses; plus
(15)restructuring charges, accruals or reserves (including restructuring and integration costs related to acquisitions and adjustments to existing reserves), integration and facilities opening costs or other business optimization expenses or one-time restructuring costs incurred in connection with acquisitions made after the Issue Date; minus
(16)the sum of (A) income tax credits and (B) interest income included in computing such Consolidated Net Income,
in each case, determined on a consolidated basis in accordance with IFRS.
“Consolidated Liquidity” means, as of any date, the sum of (i) the Unrestricted Cash Amount as of such date, (ii) the aggregate principal amount committed and available to be drawn by the Issuer and its Restricted Subsidiaries (taking into account all borrowing base limitations, collateral coverage requirements and other restrictions on borrowing in effect as of such date) under all revolving credit facilities (including the Revolving Credit Agreement) of the Issuer and its Restricted Subsidiaries and (iii) the net proceeds, as determined by the Issuer in good faith (after giving effect to any expected repayment of existing indebtedness using such proceeds) of any offerings of “securities” (as defined under the Securities Act) in (a) a public offering registered under the Securities Act, or (b) an offering not required to be registered under the Securities Act (including, without limitation, a private placement under section 4(a)(2) of the Securities Act, an exempt offering pursuant to Rule 144A and/or Regulation S of the Securities Act and an offering of exempt securities) of the Issuer or any of its Restricted Subsidiaries that has priced but has not yet closed (until the earliest of the closing thereof, the termination thereof without closing or the date that falls five (5) Business Days after the initial scheduled closing date thereof).
“Consolidated Net Income” means, with respect to any specified Person for any period, the aggregate of the net income (or loss) of such Person and its Restricted Subsidiaries for such period, on a consolidated basis (excluding the net income (or loss) of any Unrestricted Subsidiary of such Person), determined in accordance with IFRS and without any reduction in respect of preferred stock dividends; provided that:
(1)all net after-tax extraordinary, non-recurring or unusual gains or losses and all gains or losses realized in connection with the Disposition of securities by such Person or the early extinguishment of Indebtedness of such Person, together with any related provision for Taxes on any such gain, will be excluded;
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(2)the net income of any Unrestricted Subsidiary or any other Person that is not the specified Person or a Restricted Subsidiary or that is accounted for by the equity method of accounting will be included for such period only to the extent of the amount of dividends or similar distributions paid in cash to the specified Person or a Restricted Subsidiary of the specified Person;
(3)the net income of any Restricted Subsidiary will be excluded to the extent that the declaration or payment of dividends or similar distributions by that Restricted Subsidiary of that net income is not at the date of determination permitted (x) without any prior governmental approval (that has not been obtained) or (y) directly or indirectly, by operation of the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable to that Restricted Subsidiary or its stockholders;
(4)the cumulative effect of a change in accounting principles on such Person will be excluded;
(5)any non-cash compensation expense recorded from grants by such Person of stock appreciation or similar rights, stock options or other rights to officers, directors or employees, will be excluded;
(6)the effect on such Person of any non-cash items resulting from any amortization, write-up, writedown or write-off of assets (including intangible assets, goodwill and deferred financing costs) in connection with any acquisition, Disposition, merger, consolidation or similar transaction or any other non-cash impairment charges incurred subsequent to the Issue Date resulting from the application of Financial Accounting Standards Board Accounting Standards Codifications 205 – Presentation of Financial Statements, 350 – Intangibles – Goodwill and Other, 360 – Property, Plant and Equipment and 805 – Business Combinations or, to the extent applicable, the equivalent standard under IFRS (excluding any such non-cash item to the extent that it represents an accrual of or reserve for cash expenditures in any future period except to the extent such item is subsequently reversed), will in each case be excluded;
(7)any provision for income tax reflected on such Person’s financial statements for such period will be excluded to the extent such provision exceeds the actual amount of taxes paid in cash during such period by such Person and its consolidated Subsidiaries;
(8)any gain (or loss) attributable to the mark to market movement in the valuation of hedging obligations or other derivative instruments pursuant to FASB Accounting Standards Codification 815 – Derivatives and Hedging or mark to market movement of other financial instruments pursuant to FASB Accounting Standards Codification 825 – Financial Instruments or, to the extent applicable, the equivalent standard under IFRS, will be excluded; provided that any cash payments or receipts relating to transactions realized in a given period shall be taken into account in such period;
(9)any gain (or loss) on asset sales, disposals or abandonments (other than asset sales, disposals or abandonments in the ordinary course of business) or income (or loss) from closed or discontinued operations (but if such operations are classified as discontinued due to the fact that they are subject to an agreement to Dispose of such operations, only when and to the extent such operations are actually Disposed of) will be excluded; and
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(10)any non-cash gain (or loss) related to currency remeasurements of Indebtedness (including the net loss or gain resulting from Currency Agreements and revaluations of intercompany balances or any other currency-related risk), unrealized or realized net foreign currency translation or transaction gains or losses impacting net income will be excluded.
“Consolidated Total Assets” means, as of any date of determination, the sum of the amounts that would appear on a consolidated balance sheet of the Issuer and its consolidated Restricted Subsidiaries as the total assets of the Issuer and its consolidated Restricted Subsidiaries in accordance with IFRS.
“Controlling Representative” shall have the meaning assigned to such term in the Collateral Trust Agreement.
“Corporate Trust Office of the Trustee” will be at the address of the Trustee specified in Section 13.01 hereof or such other address as to which the Trustee may give notice to the Issuer.
“Coverage Assets” means (a) the Frequent Flyer Program Assets of the Issuer and the Guarantors, (b) the Cargo Business Assets of the Issuer and the Guarantors, (c) Intellectual Property constituting Collateral, (d) Pledged SGR, in each case held at Eligible Airports and (e) any Additional Collateral not covered by the foregoing clauses; provided that in the case of clauses (b), (c) and (d) of this definition, the “Coverage Assets” shall not include any Released Assets or any Cargo Business Assets excluded from the definition hereof pursuant to Section 4.26(d).
“Credit Facilities” means, one or more debt facilities (including, without limitation, the Revolving Credit Agreement) or, commercial paper facilities, reimbursement agreements or other agreements providing for the extension of credit, or securities purchase agreements, indentures or similar agreements, whether secured or unsecured, in each case, with banks, insurance companies, financial institutions or other institutional lenders or investors providing for, or acting as initial purchasers of, revolving credit loans, term loans, receivables financing (including through the sale of receivables to such lenders or to special purpose entities formed to borrow from such lenders against such receivables) or, letters of credit, surety bonds, insurance products or the issuance and sale of securities, in each case, as amended, restated, modified, renewed, extended, refunded, replaced in any manner (whether upon or after termination or otherwise) or refinanced (including by means of sales of debt securities to institutional investors) in whole or in part from time to time.
“Currency” means miles, points and/or other units that are a medium of exchange constituting a convertible, virtual and private currency that is tradeable property and that can be sold or issued to persons.
“Currency Agreement” means any foreign exchange contract, currency swap agreement or other similar agreement or arrangement.
“Custodian” means the Trustee, as custodian with respect to the Notes in global form, or any successor entity thereto.
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“Default” means any event that, unless cured or waived, is, or with the passage of time or the giving of notice or both would be, an Event of Default.
“Deferred Asset” shall have the meaning assigned to such term in the Pledge and Security Agreement.
“Definitive Note” means a certificated Note registered in the name of the Holder thereof and issued in accordance with Section 2.06 hereof, substantially in the applicable form of Exhibit A hereto except that such Note shall not bear the Global Note Legend and shall not have the “Schedule of Exchanges of Interests in the Global Note” attached thereto.
“Deposit Account” shall have the meaning assigned to such term in the Pledge and Security Agreement.
“Depositary” means, with respect to the Notes issuable or issued in whole or in part in global form, the Person specified in Section 2.03 hereof as the Depositary with respect to the Notes, and any and all successors thereto appointed as depositary hereunder and having become such pursuant to the applicable provision of this Indenture.
“Disposition” means, with respect to any property, any sale (including conditional sale), lease, sale and leaseback, conveyance, transfer or other disposition thereof (including by means of a Restricted Payment or an Investment). The terms “Dispose,” “Disposes” and “Disposed of” shall have correlative meanings.
“Disqualified Stock” means, as determined for purposes of covenants herein with respect to the Notes, any Capital Stock that, by its terms (or by the terms of any security into which it is convertible, or for which it is exchangeable, in each case at the option of the holder of the Capital Stock), or upon the happening of any event, matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise (other than as a result of a change of control or asset sale), is convertible or exchangeable for Indebtedness or Disqualified Stock, or is redeemable at the option of the holder of the Capital Stock, in whole or in part (other than as a result of a change of control or asset sale), on or prior to the date that is 91 days after the date on which the Notes mature. Notwithstanding the preceding sentence, any Capital Stock that would constitute Disqualified Stock solely because the holders of the Capital Stock have the right to require the Issuer to repurchase such Capital Stock upon the occurrence of a change of control or an asset sale will not constitute Disqualified Stock if the terms of such Capital Stock provide that the Issuer may not repurchase or redeem any such Capital Stock pursuant to such provisions unless such repurchase or redemption complies with Section 4.06. The amount of Disqualified Stock deemed to be outstanding at any time for purposes of this Indenture will be the maximum amount that the Issuer and its Restricted Subsidiaries may become obligated to pay upon the maturity of, or pursuant to any mandatory redemption provisions of, such Disqualified Stock, exclusive of accrued dividends.
“Dollar Equivalent” means, at any time, (a) with respect to any amount denominated in Dollars, such amount and (b) with respect to any amount denominated in any other currency, the equivalent amount thereof in Dollars as determined in accordance with Section 1.04 hereof.
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“Dollars” and “$” mean lawful money of the United States of America.
“DOT” means the U.S. Department of Transportation and any successor thereto.
“Eligible Airport” means John F. Kennedy International Airport, Heathrow Airport or any other airport proposed by the Issuer that is reasonably acceptable to the Controlling Representative.
“Engine” means an engine used, or intended to be used, to propel an Aircraft, including a Part, appurtenance, and accessory of such Engine and any records relating to such Engine.
“Equity Interests” means Capital Stock and all warrants, options or other rights to acquire Capital Stock (but excluding any debt security that is convertible into, or exchangeable for, Capital Stock).
“Equity Offering” means (x) a sale of Capital Stock (other than through the issuance of Disqualified Stock or through an Excluded Contribution) other than (a) offerings registered on Form S-8 (or any successor form) under the Securities Act or any similar offering in other jurisdictions or other securities of the Issuer and (b) issuances of Capital Stock to any Subsidiary of the Issuer or (y) a cash equity contribution to the Issuer.
“ERISA Legend” means the legend set forth in Section 2.06(f)(3) hereof, which is required to be placed on all Global Notes issued under this Indenture.
“Euroclear” means Euroclear Bank, S.A./N.V., as operator of the Euroclear system.
“Event of Loss” means, with respect to any Collateral, any of the following events: (i) the destruction of or damage to such property that renders repair uneconomic or that renders such property permanently unfit for normal use; (ii) any damage or loss to or other circumstance with respect to such property that results in an insurance settlement with respect to such property on the basis of a total loss, or a constructive or arranged total loss; (iii) the confiscation or nationalization of, or requisition of title to such property by any Governmental Authority; (iv) the theft or disappearance of such property that shall have resulted in the loss of possession of such property by the Issuer or any Guarantor for a period in excess of thirty (30) days; or (v) the seizure of, detention of or requisition for use of, such property by any Governmental Authority that shall have resulted in the loss of possession of such property by the Issuer or any Guarantor and such requisition for use shall have continued beyond the earlier of (A) sixty (60) days and (B) the date of receipt of insurance or condemnation proceeds with respect thereto.
An Event of Loss shall be deemed to have occurred:
(1)in the case of an actual total loss, at 12 midnight (London time) on the actual date the relevant Collateral was lost;
(2)in the case of any of the events described in paragraph (i) of the definition of Event of Loss above (other than an actual total loss), upon the date of occurrence of such destruction, damage or rendering unfit;
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(3)in the case of any of the events described in paragraph (ii) of the definition of Event of Loss above (other than an actual total loss), the date and time at which either a total loss is subsequently admitted by the insurers or a competent court or arbitration tribunal issues a judgment to the effect that a total loss has occurred;
(4)in the case of any of the events referred to in paragraph (iii) of the definition of Event of Loss above, upon the occurrence thereof; and
(5)in the case of any of the events referred to in paragraphs (iv) and (v) of the definition of Event of Loss above, upon the expiration of the period of time specified therein.
“Exchange Act” means the Securities Exchange Act of 1934, as amended.
“Exchange Rate” means, on any day, with respect to conversions from any Non-U.S. Currency to Dollars, (i) the rate of exchange for the purchase of Dollars with such Non-U.S. Currency last provided by Reuters on the Business Day (New York City time) immediately preceding the date of determination or (ii) if at the time of any such determination, no such rate pursuant to clause (i) is being provided, then the Issuer may, at its election, use any customary method that it reasonably determines in good faith is an appropriate substitute to determine such rate and shall promptly notify the Trustee of such substitute. The Issuer shall promptly provide the Trustee with the then current Exchange Rate used by the Issuer upon the Trustee’s request therefor.
“Excluded Aircraft Subsidiary” means (a) any Subsidiary involved or contemplated to be involved in an Aircraft Financing, where substantially all of the assets of such Subsidiary consists of an interest in Aircraft (including airframes), Engines, Spare Parts, intercompany obligations, cash and/or Cash Equivalents and that owns no Significant Assets other than Aircraft Financing Related Cargo Business Assets as a result of the relevant Subsidiary being a party to an intercompany lease or contract and (b) any Subsidiary that owns the Equity Interest in one or more Subsidiaries referred to in clause (a) and no other material assets.
“Excluded Assets” shall have the meaning provided in the Pledge and Security Agreement.
“Excluded Contributions” means net cash proceeds received by the Issuer after the Exit Conversion Date from:
(1)contributions to its common equity capital (other than from any Subsidiary); or
(2)the sale (other than to a Subsidiary or to any management equity plan or stock option plan or any other management or employee benefit plan or agreement of the Issuer or any Subsidiary) of Qualifying Equity Interests,
in each case designated as Excluded Contributions pursuant to an Officer’s Certificate executed on or around the date such capital contributions are made or the date such Equity Interests are sold, as the case may be. Excluded Contributions will not be considered to be net proceeds of Qualifying Equity Interests for purposes of Section 4.06(a)(2)(C) hereof.
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“Excluded Subsidiary” means any Subsidiary of the Issuer (a) that is not or ceases to be a Subsidiary in which at least 85% of its capital stock is owned by the Issuer or another Subsidiary of the Issuer, other than due to a minority interest required to comply with a local ownership requirement; provided that this clause (i) shall not apply to [*], and any other Restricted Subsidiary of the Issuer that the Issuer may elect to exclude from time to time from the application of this clause (a) by written notice to the Trustee (which election may be subsequently revoked by the Issuer from time to time by written notice to the Trustee), (b) that is prohibited or restricted by applicable law, or regulation from being or becoming a Guarantor, (c) that is subject to any contract or other restrictions existing prior to the Issue Date or the date such entity is acquired by the Issuer or a Restricted Subsidiary of the Issuer, as applicable, that prohibits such Subsidiary from providing a Note Guarantee, (d) for which the Issuer and the Controlling Representative (with respect to the corresponding requirement under the applicable Priority Lien Documents) mutually agree that the granting or maintenance of a Note Guarantee by such Subsidiary would result in material adverse tax consequences to the Issuer or any of its Restricted Subsidiaries, (e) that is a captive insurance company, special purpose entity, securitization, receivables subsidiary, not-for-profit subsidiary or Excluded Aircraft Subsidiary, (f) that is a Non-Guarantor Acquired Airline or (g) at the election of the Issuer by written notice to the Trustee, [*], or any other Restricted Subsidiary of the Issuer that owns Significant Assets, in the good faith determination of the Issuer (i) in an aggregate amount not to exceed [*] and (ii) together with all other Restricted Subsidiaries excluded pursuant to this clause (g), in an aggregate amount not to exceed [*] (provided that any such election pursuant to this clause (g) may be subsequently revoked and reallocated to any other Restricted Subsidiary from time to time); provided, further, that “Excluded Subsidiary” shall not include any Designated Guarantor that becomes a Guarantor pursuant to Section 4.13 hereof for as long as such Subsidiary remains a Designated Guarantor.
“Existing Term Loan Administrative Agent” means the administrative agent under that certain Debtor-in-Possession and Exit Term Loan Credit Agreement, dated as of October 12, 2022, among the Issuer, Professional Airline Services, Inc., each of the several banks and other financial institutions or entities from time to time party thereto and Goldman Sachs Lending Partners LLC, as administrative agent and Wilmington Trust, National Association, as collateral trustee, as amended, restated, amended and restated, supplemented or otherwise modified, refinanced or replaced from time to time.
“Exit Conversion Date” means November 3, 2022.
“FAA” means the Federal Aviation Administration of the United States of America and any successor thereto.
“Fair Market Value” means the value that would be paid by a willing buyer to an unaffiliated willing seller in a transaction not involving distress or necessity of either party, determined in good faith by the Board of Directors or an officer of the Issuer (unless otherwise provided in this Indenture); provided that the Board of Directors or such officer of the Issuer, as applicable, shall be permitted to consider the circumstances existing at such time (including, without limitation, economic or other conditions affecting the U.S. airline industry generally and any relevant legal compulsion, judicial proceeding or administrative order or the possibility thereof) in determining such Fair Market Value in connection with such transaction; and provided, further, that nothing herein shall be construed as a limitation of the fiduciary duties of the Board of Directors pursuant to applicable law.
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“Fitch” means Fitch, Inc., also known as Fitch Ratings, and its successors.
“Fixed Charge Coverage Ratio” means as of any date of determination, with respect to any Person, the ratio of (x) the aggregate amount of Consolidated EBITDAR of such Person for the period of the most recent four consecutive fiscal quarters ending prior to the date of such determination for which internal financial statements prepared on a consolidated basis in accordance with IFRS are available to (y) Fixed Charges for such four fiscal quarters.
If any Indebtedness bears a floating rate of interest and is being given pro forma effect, the interest expense on such Indebtedness will be calculated as if the rate in effect on the date of determination had been the applicable rate for the entire period (taking into account any Interest Rate Agreement applicable to such Indebtedness if such Interest Rate Agreement has a remaining term in excess of twelve months). If any Indebtedness that is being given pro forma effect bears an interest rate at the option of the Issuer, the interest rate shall be calculated by applying such optional rate chosen by the Issuer. In making any pro forma calculation, the amount of Indebtedness under any revolving Credit Facility outstanding on the date of determination (other than any Indebtedness incurred under such facility in connection with the transaction giving rise to the need to calculate the Fixed Charge Coverage Ratio) will be deemed to be (i) the average daily balance of such Indebtedness during such four fiscal quarters or such shorter period for which such facility was outstanding or (ii) if such facility was created after the end of such four fiscal quarters, the average daily balance of such Indebtedness during the period from the date of creation of such facility to the date of such determination.
“Fixed Charges” shall mean, with respect to any specified Person for any period, the sum, without duplication, of:
(1)the consolidated interest expense (net of interest income) of such Person and its Restricted Subsidiaries for such period to the extent that such interest expense is payable in cash (and such interest income is receivable in cash); plus
(2)any interest expense actually paid in cash for such period by such specified Person on Indebtedness of another Person that is guaranteed by such specified Person or one of its Restricted Subsidiaries or secured by a Lien on assets of such specified Person or one of its Restricted Subsidiaries.
all as determined on a consolidated basis in accordance with IFRS.
“Frequent Flyer Program” means any customer loyalty program available to individuals that is operated, owned or controlled, directly or indirectly, by the Issuer or any of its Restricted Subsidiaries and which loyalty program grants members in such program Currency based on a member’s purchasing behavior and that entitles a member to accrue and redeem such Currency for a benefit or reward, including flights and/or other goods and services.
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“Frequent Flyer Program Agreements” means all currently existing, future and successor co-branding agreements, partnering agreements, airline-to-airline frequent flyer program agreements or similar agreements related to or entered into in connection with a Frequent Flyer Program.
“Frequent Flyer Program Assets” means (a) all Frequent Flyer Program Agreements, (b) Intellectual Property owned or purported to be owned, or later developed or acquired and owned or purported to be owned, by the Issuer or any of its Restricted Subsidiaries and required or necessary to operate a Frequent Flyer Program, (c) customer data (i) owned, or later developed or acquired and owned or purported to be owned, by the Issuer or any of its Restricted Subsidiaries and (ii) used, generated or produced as part of a Frequent Flyer Program (including a list of all members and profile data for each member), (d) all currently existing or future intercompany agreements governing the sale, transfer or redemption of Currency under any Frequent Flyer Program (“Intercompany Frequent Flyer Agreements”) and (e) accounts receivable in respect of any Frequent Flyer Program, including accounts receivable arising under Frequent Flyer Program Agreements or Intercompany Frequent Flyer Agreements; provided that, for purposes of calculating the Asset Coverage Ratio and the Total Asset Coverage Ratio, as of any date of determination, the Frequent Flyer Program Assets shall not include any of the foregoing assets described in clauses (a) through (e) above to the extent owned or acquired by a Non-Guarantor Acquired Airline, as of such date.
“Fuel Hedging Agreement” means any spot, forward or option fuel price protection agreements and other types of fuel hedging agreements or economically similar arrangements designed to protect against or manage exposure to fluctuations in fuel prices.
“Gate Leaseholds” means, at any time, all of the right, title, privilege, interest and authority, now held or hereafter acquired, of the Issuer or any Guarantor in connection with the right to use or occupy holdroom and passenger boarding and deplaning space in an airport terminal at any airport at which such Issuer or such Guarantor conducts scheduled operations.
“Global Note Legend” means the legend set forth in Section 2.06(f)(2) hereof, which is required to be placed on all Global Notes issued under this Indenture.
“Global Notes” means, individually and collectively, each of the Restricted Global Notes and the Unrestricted Global Notes deposited with or on behalf of and registered in the name of the Depositary or its nominee, substantially in the form of Exhibit A hereto and that bears the Global Note Legend and that has the “Schedule of Exchanges of Interests in the Global Note” attached thereto, issued in accordance with Section 2.01 or 2.06(b)(3), 2.06(b)(4), 2.06(d)(2) or 2.06(d)(3).
“Governmental Authority” means the government of Chile, the United States of America, Peru, Colombia, Ecuador, Brazil and any other nation or any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank organization, or other entity exercising executive, legislative, judicial, taxing or regulatory powers or functions of or pertaining to government.
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Governmental Authority shall not include any Person in its capacity as an Airport Authority.
“Government Securities” means direct obligations of, or obligations guaranteed by, the United States of America, and the payment for which the United States pledges its full faith and credit.
“Guarantee” means a guarantee (other than (a) by endorsement of negotiable instruments for collection or (b) customary contractual indemnities, in each case in the ordinary course of business), direct or indirect, in any manner including, without limitation, by way of a pledge of assets or through letters of credit or reimbursement agreements in respect thereof, of all or any part of any Indebtedness (whether arising by virtue of partnership arrangements, or by agreements to keep-well, to purchase assets, goods, securities or services, to take or pay or to maintain financial statement conditions).
“Guarantor” means, collectively, each Subsidiary of the Issuer (including any Designated Guarantor) that is either (i) party to this Indenture on the Issue Date or (ii) becomes a guarantor pursuant to Section 4.13 hereof.
“Guaranty and Security Principles” shall have the meaning assigned to such term in the Collateral Trust Agreement.
“Hedging Agreement” means any Interest Rate Agreement, any Currency Agreement, any Fuel Hedging Agreement and any other derivative or hedging contract, agreement, confirmation or other similar transaction or arrangement that is entered into by the Issuer or any Guarantor, including any commodity or equity exchange, swap, collar, cap, floor, adjustable strike cap, adjustable strike corridor, cross-currency swap or forward rate agreement, spot or forward foreign currency or commodity purchase or sale, listed or over-the-counter option or similar derivative right related to any of the foregoing, non-deliverable forward or option, foreign currency swap agreement, currency exchange rate price hedging arrangement or other arrangement designed to protect against fluctuations in interest rates or currency exchange rates, commodity, currency or securities values, or any combination of the foregoing agreements or arrangements.
“Hedging Obligations” means obligations under or with respect to Hedging Agreements.
“Holder” means a Person in whose name a Note is registered.
“IATA” means the International Air Transport Association and any successor thereto.
“IFRS” means the International Financial Reporting Standards.
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“Indebtedness” means, with respect to any specified Person, any indebtedness of such Person (excluding advance ticket sales, accrued expenses and trade payables), whether or not contingent:
(1)in respect of borrowed money;
(2)evidenced by bonds, notes, debentures or similar instruments or letters of credit (or reimbursement agreements in respect thereof);
(3)in respect of banker’s acceptances;
(4)representing Capital Lease Obligations;
(5)representing the balance deferred and unpaid of the purchase price of any property or services due more than eighteen (18) months after such property is acquired or such services are completed, but excluding in any event trade payables arising in the ordinary course of business;
(6)representing any Hedging Obligations; or
(7)representing Disqualified Stock,
if and to the extent any of the preceding items (other than letters of credit and Hedging Obligations) would appear as a liability upon a balance sheet of the specified Person prepared in accordance with IFRS. In addition, the term “Indebtedness” includes all Indebtedness of others secured by a Lien on any asset of the specified Person (whether or not such Indebtedness is assumed by the specified Person) and, to the extent not otherwise included, the Guarantee by the specified Person of any Indebtedness of any other Person. Indebtedness shall be calculated without giving effect to the effects of IFRS 9, Chapter 6 – Hedge Accounting (or any successor provision thereto) and related interpretations to the extent such effects would otherwise increase or decrease an amount of Indebtedness for any purpose under this Indenture as a result of accounting for any embedded derivatives created by the terms of such Indebtedness.
“Indenture” means this Indenture, as amended or supplemented from time to time.
“Indirect Participant” means a Person who holds a beneficial interest in a Global Note through a Participant.
“Initial Appraisals” means, collectively, the report of (a) BK Associates, Inc., dated as of February 14, 2022, setting forth the Appraised Value of the Cargo Business Assets of the Issuer and the Guarantors; (b) BK Associates, Inc., dated as of February 11, 2022, setting forth the Appraised Value of the Frequent Flyer Program Assets of the Issuer and the Guarantors; (c) Ocean Tomo, LLC, dated as of February 17, 2022, setting forth the Appraised Value of Intellectual Property of the Issuer and the Guarantors; (d) mba Aviation, dated as of December 23, 2021, setting forth the Appraised Value of certain Routes in Brazil; (e) ICF SH&E Limited, dated as of December 17, 2021, setting forth the Appraised Value of certain Slots and Routes; (f) mba Aviation, dated as of December 23, 2021, setting forth the Appraised Value of certain Routes in Peru; (g) mba Aviation, dated as of December 23, 2021, setting forth the Appraised Value of certain Routes in Chile; (h) mba Aviation, dated as of December 23, 2021, setting forth the Appraised Value of certain Routes in Colombia; (i) mba Aviation, dated as of December 17, 2021, setting forth the Appraised Value of certain Slots; and (j) AVITAS, Inc., dated as of February 8, 2022, setting forth the Appraised Value of certain Aircrafts and Engines, in each case as delivered to the Collateral Trustee by the Issuer pursuant to Section 4.15 hereof.
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“Initial Appraiser” means, collectively, (a) BK Associates, Inc. (as it relates to appraisals of any Cargo Business Assets or any Frequent Flyer Program Assets); (b) Ocean Tomo, LLC, (as it relates to any Intellectual Property); (c) mba Aviation (as it relates to Slots and Routes); (d) ICF SH&E Limited (as it related to Slots and Routes); and (e) AVITAS, Inc. (as it relates to Aircrafts and Engines).
“Initial Notes” means the $1,400.0 million aggregate principal amount of Notes issued under this Indenture on the Issue Date.
“Initial Purchasers” means Citigroup Global Markets Inc., Santander US Capital Markets LLC, J.P. Morgan Securities LLC, Deutsche Bank Securities Inc., Barclays Capital Inc., Goldman Sachs & Co. LLC, BNP Paribas Securities Corp., MUFG Securities Americas Inc. and Natixis Securities Americas LLC.
“Insolvency or Liquidation Proceeding” shall have the meaning given to such term in the Collateral Trust Agreement.
“Intellectual Property” shall have the meaning given to such term in the Pledge and Security Agreement.
“Intellectual Property Security Agreement” shall have the meaning given to such term in the Pledge and Security Agreement.
“Intercompany Note” means a subordinated global promissory note among the Issuer and the Guarantors and certain other Restricted Subsidiaries that are not Issuer and the Guarantors substantially in the form attached hereto as Exhibit E.
“Intercreditor Agreements” means, collectively, the Junior Lien Intercreditor Agreement and any other junior lien intercreditor agreement or other subordination agreement entered into pursuant to terms of the Priority Lien Documents.
“Interest Rate Agreement” means any interest rate protection agreement, interest rate future agreement, interest rate option agreement, interest rate swap agreement, interest rate cap agreement, interest rate collar agreement, interest rate hedge agreement, option or future contract or other similar agreement or arrangement.
“Investments” means, with respect to any Person, all direct or indirect investments made from and after the Issue Date by such Person in other Persons (including Affiliates) in the forms of loans (including Guarantees), capital contributions or advances (but excluding advance payments and deposits for goods and services and similar advances to officers, employees and consultants made in the ordinary course of business), purchases or other acquisitions for consideration of Indebtedness, Equity Interests or other securities of other Persons, together with all items that are or would be classified as investments on a balance sheet prepared in accordance with IFRS.
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If the Issuer or any Restricted Subsidiary of the Issuer sells or otherwise Disposes of any Equity Interests of any direct or indirect Restricted Subsidiary of the Issuer after the Issue Date such that, after giving effect to any such sale or Disposition, such Person is no longer a Restricted Subsidiary of the Issuer, the Issuer will be deemed to have made an Investment on the date of any such sale or Disposition equal to the Fair Market Value of the Issuer’s Investments in such Subsidiary that were not sold or Disposed of in an amount determined as provided in Section 4.06(d). Notwithstanding the foregoing, any Equity Interests retained by the Issuer or any of its Subsidiaries after a Disposition or dividend of assets or Capital Stock of any Person in connection with any partial “spin-off” of a Subsidiary or similar transactions shall not be deemed to be an Investment. The acquisition by the Issuer or any Restricted Subsidiary of the Issuer after the Issue Date of a Person that holds an Investment in a third Person will be deemed to be an Investment by the Issuer or such Restricted Subsidiary in such third Person in an amount equal to the Fair Market Value of the Investments held by the acquired Person in such third Person in an amount determined as provided in Section 4.06(d). Except as otherwise provided in this Indenture, the amount of an Investment will be determined at the time the Investment is made and without giving effect to subsequent changes in value.
“Issue Date” means October 15, 2024.
“Junior Lien” means a Lien granted by a Security Document to the Collateral Trustee, at any time, upon any property of the Issuer or any other issuer or Guarantor to secure Junior Lien Obligations.
“Junior Lien Documents” means, collectively any indenture, credit agreement or other agreement governing each Series of Junior Lien Indebtedness and the security documents related thereto.
“Junior Lien Indebtedness” means, with respect to the Notes, any Indebtedness incurred by the Issuer or a Guarantor that is secured by all or a portion of the Collateral on a junior lien basis to the Liens on the Collateral securing the Notes Obligations; provided that (a) such Indebtedness is subordinated in right of payment to such Notes Obligations pursuant to the Junior Lien Intercreditor Agreement or otherwise on terms reasonably satisfactory to the Controlling Representative; provided that, for clarity, any Permitted Refinancing Indebtedness in respect of Priority Lien Debt (or any successive Permitted Refinancing Indebtedness) may be pari passu in right of payment to the Obligations, (b) the Liens on Collateral, if any, securing such Indebtedness are junior to the Liens on the Collateral securing the Obligations pursuant to the Junior Lien Intercreditor Agreement or otherwise on terms reasonably satisfactory to the Controlling Representative, (c) such Indebtedness matures no earlier than the date on which the Notes mature, (d) such Indebtedness has a Weighted Average Life to Maturity no shorter than the Weighted Average Life to Maturity of the Notes, (e) is not subject to any Guarantee by any Person other than the Issuer or any Guarantor and (f) such Indebtedness is secured only by Collateral.
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“Junior Lien Intercreditor Agreement” means a junior lien intercreditor agreement to be entered into from time to time substantially in the form of an exhibit to the Collateral Trust Agreement.
“Junior Lien Obligations” means Junior Lien Indebtedness and all other Obligations in respect thereof under the Junior Lien Documents.
“Junior Lien Representative” means the trustee, agent or representative of the holders of any Series of Junior Lien Indebtedness who maintains the transfer register for such Series of Junior Lien Indebtedness and (x) is appointed as a Junior Lien Representative (for purposes related to the administration of the security documents) pursuant to the credit agreement, indenture or other agreement governing such Series of Junior Lien Indebtedness, together with its successors in such capacity, and (y) has executed a Lien Sharing and Priority Confirmation.
“Legal Holiday” means a Saturday, a Sunday or a day on which banking institutions in the City of New York or Santiago, Chile or at a place of payment are authorized by law, regulation or executive order to remain closed. If a payment date is a Legal Holiday at a place of payment, payment may be made at that place on the next succeeding day that is not a Legal Holiday, and no interest shall accrue on such payment for the intervening period.
“Lien” means, with respect to any asset, any mortgage, lien, pledge, charge, assignment by way of security, security interest or similar encumbrance of any kind in respect of such asset, whether or not filed, recorded or otherwise perfected under applicable law (but excluding any lease, sublease, use or license agreement or similar arrangement by the Issuer or any Guarantor described in clauses (7) or (8) of the definition of “Permitted Disposition”), including any conditional sale or other title retention agreement, any option or other agreement to sell or give a security interest in and, except in connection with any Qualified Receivables Transaction, any agreement to give any financing statement under the UCC (or equivalent statutes) of any jurisdiction.
“Lien Sharing and Priority Confirmation” means as to any Series of Priority Lien Debt incurred after the Issue Date, the written agreement of the holders of Priority Lien Obligations (or the Priority Lien Representative with respect to such Series of Priority Lien Debt), as set forth in the applicable Priority Lien Document governing such Series of Priority Lien Debt, for the benefit of all holders of Priority Lien Obligations:
(1)that all Priority Lien Obligations will be and are secured equally and ratably, subject to the priorities and rights set forth in the Collateral Trust Agreement, by all Liens at any time granted by the Issuer or any other issuer or Guarantor to the Collateral Trustee (or, where applicable, a Local Collateral Agent ) to secure the Priority Lien Obligations in respect of such Series of Priority Lien Debt and that all such Liens will be enforceable by the Collateral Trustee and such Local Collateral Agent (acting at the direction of the Collateral Trustee) for the benefit of all holders of Priority Lien Obligations equally and ratably all of the foregoing, subject in each case to the priorities and rights set forth in the Collateral Trust Agreement;
(2)that the holders of Obligations in respect of such Series of Priority Lien Debt are bound by the provisions of the Collateral Trust Agreement, including the provisions relating to the ranking of Liens and the order of application of proceeds from enforcement of Liens; and
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(3)consenting to the terms of the Collateral Trust Agreement and the Collateral Trustee’s and each Local Collateral Agent’s performance of, and directing the Collateral Trustee and each Local Collateral Agent to perform its obligations under, the Collateral Trust Agreement and the other Security Documents.
“Local Collateral Agency Agreements” shall have the meaning assigned to such term in the Collateral Trust Agreement.
“Local Collateral Agents” shall have the meaning assigned to such term in the Collateral Trust Agreement.
“Material Adverse Effect” means a material adverse effect on (a) the consolidated business, operations or financial condition of the Issuer and its Restricted Subsidiaries, taken as a whole, (b) the validity or enforceability of the Notes, the Note Guarantees, this Indenture or any material Security Documents or the material rights or remedies of the Trustee, the Collateral Trustee and the Holders of the Notes or (c) the ability of the Issuer and Guarantors, collectively, to pay the Obligations or otherwise perform their material obligations under the Notes Documents.
“Material Indebtedness” means Indebtedness of the Issuer and/or Guarantors (other than the Notes) outstanding under the same agreement in a principal amount exceeding [*].
“Material Pledged Routes” means the [*] Routes of the Issuer and the Guarantors with the highest revenues from ticket revenues during the [*] calendar year.
“Material Pledged Slots” means the Slots of the Issuer or any Guarantor held at John F. Kennedy International Airport and London Heathrow Airport.
“Moody’s” means Moody’s Investors Service, Inc. and its successors.
“Net Proceeds” means (i) with respect to any incurrence of Indebtedness, the cash received by the Issuer or any Guarantor in respect of such incurrence net of fees, commissions, taxes, costs and expenses incurred in connection therewith and (ii) the aggregate cash and Cash Equivalents received by the Issuer or any of its Restricted Subsidiaries in respect of any Disposition (including, without limitation, any cash or Cash Equivalents received in respect of or upon the sale or other disposition of any non-cash consideration received in any Disposition) or Recovery Event, net of (a) the direct costs and expenses relating to such Disposition and incurred by the Issuer or a Restricted Subsidiary (including the sale or disposition of such non-cash consideration) or any such Recovery Event, including, without limitation, legal, accounting and investment banking fees, and sales commissions, and any relocation expenses incurred as a result of the Disposition or Recovery Event, (b) any Taxes paid or payable as a result of the Disposition or Recovery Event, in each case, after taking into account any available Tax credits or deductions and any Tax sharing arrangements; (c) any reserve for adjustment or indemnification obligations in respect of the sale price of such asset or assets established in accordance with IFRS; (d) any portion of the purchase price from a Disposition placed in escrow pursuant to the terms of such Disposition (either as a reserve for adjustment of the purchase price, or for satisfaction of indemnities in respect of such Disposition) until the termination of such escrow; and (e) with respect to (i) any Disposition of Significant Assets that are not Collateral or (ii) any Recovery Event in respect of Significant Assets that are not Collateral, any portion of the aggregate cash and Cash Equivalents received by the Issuer or any of its Restricted Subsidiaries in respect of such Disposition that are required to be applied to any contractual arrangement permitted by this Indenture or any financing arrangement that is secured by such Significant Assets.
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“Non-Guarantor Acquired Airline” means any Restricted Subsidiary acquired by the Issuer after the Issue Date that owns a passenger airline and is not principally a cargo business for so long as such Restricted Subsidiary operates its cargo business and its Frequent Flyer Program business separately from, and on an arms’ length basis with, the Issuer.
“Non-Recourse Debt” means Indebtedness:
(1)as to which neither the Issuer, nor any of its Restricted Subsidiaries (a) provides credit support of any kind (including any undertaking, agreement or instrument that would constitute Indebtedness) or (b) is directly or indirectly liable as a guarantor or otherwise; and
(2)as to which the holders of such Indebtedness do not otherwise have recourse to the stock or assets of the Issuer or any of its Restricted Subsidiaries (other than the Equity Interests of an Unrestricted Subsidiary).
“Non-U.S. Aviation Authority” means any non-U.S. governmental, quasi-governmental, regulatory or other agency, public corporation or private entity that exercises jurisdiction over the issuance or authorization (a) to serve any non-U.S. point on any flights that the Issuer or any Guarantor is serving at any time and/or to conduct operations related to routes or gates that constitute Significant Assets and/or (b) to hold and operate any Non-U.S. Slots at any time.
“Non-U.S. Currency” shall mean any currency other than Dollars.
“Non-U.S. IP Security Agreements” shall have the meaning assigned to such term in the Pledge and Security Agreement.
“Non-U.S. Person” means a Person who is not a U.S. Person.
“Non-U.S. Pledge Agreements” shall have the meaning given to such term in the Collateral Trust Agreement.
“Non-U.S. Slot” means any Slot of any Person at any airport outside the United States that is an origin and/or destination point.
“Note Guarantees” means the Guarantee by each Guarantor of the Issuer’s obligations under this Indenture and the Notes pursuant to the provisions of this Indenture.
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“Notes” has the meaning assigned to it in the preamble to this Indenture. The Initial Notes and the Additional Notes shall be treated as a single class for all purposes under this Indenture, and unless the context otherwise requires, all references to the Notes shall include the Initial Notes and any Additional Notes.
“Notes Documents” means the Notes, this Indenture, the Security Documents and any other instrument or agreement (which is designated as a Notes Document herein and therein) executed and delivered by the Issuer or a Guarantor to the Trustee, the Collateral Trustee or a Local Collateral Agent, in each case, as the same may be amended, restated, modified, supplemented, extended or amended and restated from time to time in accordance with the terms hereof.
“Notes Obligations” means the Obligations with respect to the Notes and the related Note Guarantees and under this Indenture.
“Obligations” means, with respect to any Indebtedness, any principal (including reimbursement obligations with respect to letters of credit whether or not drawn), interest (including all interest and fees accrued thereon after the commencement of any Insolvency or Liquidation Proceeding at the rate, including any applicable post-default rate, specified in such indebtedness, even if such interest or fees are not enforceable, allowable or allowed as a claim in such proceeding), premium (if any), fees, indemnifications, reimbursements, expenses and other liabilities, in each case payable under the documentation governing such Indebtedness.
“Offering Memorandum” the Issuer’s Offering Memorandum dated October 1, 2024, relating to the initial offering of the Notes.
“Officer” means, with respect to any Person, the Chairman of the Board, the Chief Executive Officer, the President, the Director, the Chief Operating Officer, the Chief Financial Officer, the Treasurer, any Assistant Treasurer, the Controller, the Secretary or any Vice President of such Person.
“Officer’s Certificate” means a certificate signed on behalf of the Issuer or Guarantors by an Officer of the applicable Issuer or Guarantor that meets the requirements of Section 13.03 hereof.
“Opinion of Counsel” means an opinion from legal counsel who is reasonably acceptable to the Trustee that meets the requirements of Section 13.03 hereof. The counsel may be an employee of or counsel to the Issuer, any Subsidiary of the Issuer or the Trustee.
“Participant” means, with respect to the Depositary, Euroclear or Clearstream, a Person who has an account with the Depositary, Euroclear or Clearstream, respectively (and, with respect to DTC, shall include Euroclear and Clearstream).
“Parts” means all Appliances, parts, modules, accessories, furnishings and instruments, appurtenances and other equipment (including all inflight equipment, buyer-furnished and buyer-designated equipment) of whatever nature which may from time to time be incorporated or installed in or attached to any Aircraft or any Engine, and including all such parts removed from an Aircraft or Engine, so long as title thereto either (i) remains vested in the owner of such parts (provided that such owner is not the Issuer or a Guarantor) or (ii) is subject to the Lien of any applicable financing party, in each case until such parts have been replaced in accordance with the terms of any applicable lease or financing or security agreement.
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“Payment in Full” means, with respect to any obligations, that such obligations have been paid, performed or discharged in full in cash (and if no obligations are specified, the reference shall be to the Obligations). “Paid in Full” shall have a correlative meaning.
“Permanent Collateral” means all Collateral other than Supplemental Collateral.
“Permitted Business” means any business that is the same as, or reasonably related, ancillary, supportive or complementary to, the business in which the Issuer and its Restricted Subsidiaries are engaged on the Issue Date.
“Permitted Disposition” means:
(1)Disposition of cash or Cash Equivalents in exchange for other cash or Cash Equivalents;
(2)(i) Dispositions of accounts receivable, inventory or other current assets (including defaulted receivables but excluding any accounts receivable, inventory or current assets constituting Additional Collateral) in the ordinary course of business or consistent with past or industry practice and (ii) the conversion of accounts receivable to notes receivable or other Dispositions of accounts receivable or rights to payment in connection with the collection or compromise thereof, or as part of any bankruptcy or reorganization process (including any discount or forgiveness in connection with the foregoing);
(3)sales or other Dispositions of surplus, obsolete, negligible or uneconomical assets no longer used in the business of the Issuer and the Guarantors; provided that any such sale or disposition, as applicable, is made in the ordinary course of business consistent with past practices and does not materially and adversely affect the business of the Issuer and its Restricted Subsidiaries, taken as a whole;
(4)Dispositions of Significant Assets among the Issuer and the Guarantors (including any Person that shall become a Guarantor simultaneous with such Disposition in the manner contemplated by Section 4.13 hereof) to the extent the interests of the Secured Parties in the Collateral are not adversely affected in any material respect after giving effect to such Disposition;
(5)the Disposition or abandonment of Slots and Gate Leaseholds; provided that such Disposition or abandonment is (i) in the ordinary course of business consistent with past practices and does not materially and adversely affect the business of the Issuer and its Restricted Subsidiaries, taken as a whole, (ii) is reasonably determined by the Issuer to relate to Slots and Gate Leaseholds of de minimis value or surplus to the Issuer’s needs or (iii) is required by a Governmental Authority;
(6)exchange of Pledged Slots in the ordinary course of business that in the Issuer’s reasonable judgment are of reasonably equivalent value (so long as such new Pledged Slots remain at all times subject to a Lien with the same priority and level of perfection as was the case immediately prior to such exchange (and are otherwise subject only to Permitted Liens));
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(7)any other lease or sublease of, or use or license agreements with respect to, assets and properties that constitute Slots or Gate Leaseholds in the ordinary course of business and swap agreements or similar arrangements with respect to Slots in the ordinary course of business and which lease, sublease, use or license agreement or swap agreement or similar arrangement (A) has a term of one year or less, or does not extend beyond two comparable IATA traffic seasons (and contains no option to extend beyond either of such periods), (B) has a term (including any option period) longer than allowed in clause (A); provided, however, that (x) in the case of each transaction pursuant to this clause (B), an Officer’s Certificate is delivered to the Collateral Trustee concurrently with or promptly after the applicable Issuer’s or Guarantor’s entering into any such transaction that (i) immediately after giving effect to such transaction the Asset Coverage Test would be satisfied (excluding, for purposes of calculating such ratio, the proceeds of such transaction and the intended use thereof), (ii) the Collateral Trustee’s Liens on Collateral subject to such lease, sublease, use, license agreement or swap or similar arrangement are not materially adversely affected (it being understood that no Permitted Lien shall be deemed to have such an effect) and (iii) no Event of Default exists at the time of such transaction, and (y) immediately after giving effect to any transaction pursuant to this clause (B), the aggregate Appraised Value of Collateral subject to transactions covered by this clause (B) shall not exceed [*]; provided that the foregoing cap shall not apply to the extent such lease, sublease, use or license agreement or swap agreement or similar arrangement is required or advisable (as reasonably determined by the Issuer) to preserve and keep in full force and effect its rights in such Slot or Gate Leasehold, (C) is for purposes of operations by another airline operating under a brand associated with the Issuer or otherwise operating routes under a joint business arrangement or at the Issuer’s direction under a code share agreement, capacity purchase agreement, pro-rate agreement or similar arrangement between such airline and the Issuer, or (D) is subject and subordinated to the rights (including remedies) of the Collateral Trustee under the applicable Security Documents on terms reasonably satisfactory to the Collateral Trustee (acting at the direction of the Controlling Representative);
(8)the lease or sublease of assets and properties in the ordinary course of business; provided that, if such Significant Assets constitute Collateral, the rights of the lessee or sublessee shall be subordinated to the rights (including remedies) of the Collateral Trustee under the applicable Security Document on terms reasonably satisfactory to the Collateral Trustee (acting at the direction of the Controlling Representative);
(9)sales of Equity Interests in Restricted Subsidiaries to comply with local regulatory requirements, subject to the requirements of Section 4.08(b) hereto;
(10)Dispositions of Currency in respect of a Frequent Flyer Program pursuant to financing arrangements for liquidity purposes or pursuant to co-branding arrangements; provided that (i) such financing arrangement or co-branding arrangement is in the ordinary course of business and (ii) immediately after giving effect to such Disposition the Asset Coverage Test would be satisfied on a Pro Forma Basis;
(11)in each case, in the ordinary course of business, (i) the termination or amendment of leases, subleases, use or license agreements and (ii) the termination or amendment of agreements, arrangements or balances between and among the Issuer and its Restricted Subsidiaries (including paying, transferring, contributing, forgiving or cancelling balances incurred pursuant to any such intercompany agreements or arrangements);
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(12)in each case, in the ordinary course of business or in connection with any Aircraft Financing, intercompany agreements between and among the Issuer and its Restricted Subsidiaries with respect to (i) Aircraft, Engines, Spare Parts, Appliances or Parts, in each case not constituting Significant Assets and (ii) Aircraft Financing Related Cargo Business Assets;
(13)transactions that involve assets having an aggregate Appraised Value of less than [*] (such aggregate amount to be calculated on a cumulative basis from the Issue Date);
(14)any Disposition or other transaction permitted by Section 5.01(a) hereof other than Sections 5.01(a)(5) and 5.01(a)(6); and
(15)any Permitted Lien.
“Permitted Holders” means any of [*].
“Permitted Investments” means:
(1)any Investment in the Issuer or in a Restricted Subsidiary of the Issuer;
(2)any Investment in cash or Cash Equivalents;
(3)any Investment by the Issuer or any Restricted Subsidiary of the Issuer in a Person, if as a result of such Investment:
(a)such Person becomes a Restricted Subsidiary of the Issuer; or
(b)such Person, in one transaction or a series of related and substantially concurrent transactions, is merged, consolidated or amalgamated with or into, or transfers or conveys substantially all of its assets to, or is liquidated into, the Issuer or a Restricted Subsidiary of the Issuer;
(4)any Investment made as a result of the receipt of non-cash consideration from a Disposition of assets;
(5)any acquisition of assets or Capital Stock in exchange for the issuance of Qualifying Equity Interests;
(6)any Investments received in compromise or resolution of (a) obligations of trade creditors or customers that were incurred in the ordinary course of business of the Issuer or any of its Restricted Subsidiaries, including pursuant to any plan of reorganization or similar arrangement upon the bankruptcy or insolvency of any trade creditor or customer or (b) litigation, arbitration or other disputes;
(7)Investments represented by Hedging Obligations;
(8)loans or advances to officers, directors or employees made in the ordinary course of business of the Issuer or any Restricted Subsidiary of the Issuer in an aggregate principal amount not to exceed [*] at any one time outstanding;
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(9)redemption or purchase of the Notes in accordance with this Indenture, or prepayment of any other Priority Lien Debt;
(10)any Guarantee of Indebtedness other than a Guarantee of Indebtedness of an Affiliate of the Issuer that is not a Restricted Subsidiary of the Issuer;
(11)any Investment existing on, or made pursuant to binding commitments existing on, the Issue Date and any Investment consisting of an extension, modification or renewal of any Investment existing on, or made pursuant to a binding commitment existing on, the Issue Date; provided that the amount of any such Investment may be increased (a) as required by the terms of such Investment as in existence on the Issue Date or (b) as otherwise permitted under this Indenture;
(12)Investments acquired after the Issue Date as a result of the acquisition by the Issuer or any Restricted Subsidiary of the Issuer of another Person, including by way of a merger, amalgamation or consolidation with or into the Issuer or any of its Restricted Subsidiaries in a transaction that is not prohibited by Section 5.01 after the Issue Date to the extent that such Investments were not made in contemplation of such acquisition, merger, amalgamation or consolidation and were in existence on the date of such acquisition, merger, amalgamation or consolidation;
(13)the acquisition by a Receivables Subsidiary in connection with a Qualified Receivables Transaction of Equity Interests of a trust or other Person established by such Receivables Subsidiary to effect such Qualified Receivables Transaction; and any other Investment by the Issuer or a Subsidiary of the Issuer in a Receivables Subsidiary or any Investment by a Receivables Subsidiary in any other Person in connection with a Qualified Receivables Transaction;
(14)Investments constituting (i) accounts receivable or accounts payable, (ii) deposits, prepayments and other credits to suppliers, and/or (iii) in the form of advances made to distributors, suppliers, licensors and licensees, in each case, made in the ordinary course of business and consistent with the past practices;
(15)Investments in connection with outsourcing initiatives in the ordinary course of business;
(16)Investments having an aggregate Fair Market Value (measured on the date each such Investment was made and without giving effect to subsequent changes in value other than a reduction for all returns of principal in cash and capital dividends in cash), when taken together with all Investments made pursuant to this clause (16) that are at the time outstanding, not to exceed [*] of the Consolidated Total Assets of the Issuer and its Restricted Subsidiaries at the time of such Investment;
(17)Investments in Restricted Subsidiaries as required under the laws of the jurisdiction of formation of each of such Subsidiaries to avoid liquidation under such laws;
(18)Investments in any Affiliate in an aggregate amount not to exceed [*] in any one calendar month for all such Investments pursuant to this clause (18) and, in each case, to pay employee severance, taxes, permits, government charges or wind-down costs in respect of such Affiliate; and
(19)Investments constituting or related to Aircraft Financings.
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“Permitted Liens” means:
(1)Priority Liens held by the Collateral Trustee or a Local Collateral Agent, as applicable, securing the Indebtedness permitted by Section 4.07(a)(1) hereof and Related Obligations in respect thereof;
(2)Liens on the collateral securing Junior Lien Indebtedness incurred pursuant Section 4.07(a)(2) and all other Related Obligations; provided that all such Junior Liens contemplated by this clause (2) of the Permitted Liens definition shall rank junior to the Liens securing the Notes Obligations subject to the Junior Lien Intercreditor Agreement or otherwise on terms reasonably satisfactory to the Controlling Representative;
(3)Liens for Taxes, assessments or governmental charges or claims that are not yet delinquent or that are being contested in good faith by appropriate proceedings promptly instituted and diligently concluded; provided that any reserve or other appropriate provision as is required in conformity with IFRS has been made therefor;
(4)Liens imposed by law, including carriers’, warehousemen’s, landlord’s and mechanics’ Liens, in each case, incurred in the ordinary course of business;
(5)Liens arising by operation of law in connection with judgments, attachments or awards which do not, in the aggregate, constitute an Event of Default;
(6)Liens existing as of the Issue Date and any modifications, replacements, renewals or extensions thereof; provided that (A) such modified, replacement, renewal or extension Lien does not extend to any additional property other than (1) after-acquired property that is affixed or incorporated into the property covered by such Lien and (2) proceeds and products thereof and (B) such modifications, replacement, renewal or extension does not increase the amount secured or change any direct or contingent obligor in respect thereof;
(7)any overdrafts and related liabilities arising from treasury, netting, depository and cash management services or in connection with any automated clearing house transfers of funds, in each case as it relates to cash or Cash Equivalents, if any;
(8)licenses, sublicenses, leases and subleases by the Issuer or any Guarantor as they relate to any Additional Collateral to the extent (A) such licenses, sublicenses, leases or subleases do not interfere in any material respect with the business of the Issuer and its Restricted Subsidiaries, taken as a whole, and in each case, such license, sublicense, lease or sublease is to be subject and subordinate to the Liens granted to the Collateral Trustee pursuant to the Security Documents and, in each case, would not result in a Material Adverse Effect or (B) otherwise expressly permitted by the Security Documents;
(9)salvage or similar rights of insurers;
(10)pledges and deposits made in the ordinary course of business in compliance with workers’ compensation, unemployment insurance and other social security laws or regulations, or Liens in connection with workers’ compensation, unemployment insurance or other social security, old age pension or public liability obligations which are not delinquent or which are being contested in good faith by appropriate action and for which adequate reserves have been maintained in accordance with IFRS;
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(11)customary rights of set-off and liens arising by operation of law or by the terms of documents or contracts of banks or other financial institutions in relation to the ordinary maintenance and administration of Deposit Accounts or securities accounts;
(12)non-exclusive licenses and sublicenses, whether written, oral or implied, to Intellectual Property granted in the ordinary course of business and consistent with past practice that do not materially interfere with the ordinary conduct of the business of the Issuer or the Guarantors;
(13)Liens incurred in the ordinary course of business by the Issuer or any Restricted Subsidiary of the Issuer with respect to obligations that do not exceed in the aggregate [*] at any one time outstanding;
(14)leases, subleases, interchanges, use agreements, license agreements and/or swap agreements constituting “Permitted Dispositions”;
(15)in the case of any Gate Leaseholds, any interest or title of a licensor, sublicensor, lessor, sublessor or airport operator under any lease, license or use agreement;
(16)in each case as it relates to Aircraft, Engine, Spare Parts, Appliances or Parts that may be pledged as Additional Collateral from time to time (any such pledged Additional Collateral, “Pledged Aircraft, Engine, Spare Parts, Appliances or Parts Collateral”), Liens solely on Engines, Spare Parts, Appliances, Parts, components, instruments, appurtenances, furnishings and other equipment (other than the Pledged Aircraft, Engine, Spare Parts, Appliances or Parts Collateral) (x) installed on such Pledged Aircraft, Engine, Spare Parts, Appliances or Parts Collateral and (y) separately financed by the Issuer or a Guarantor, to secure such financing;
(17)customary Liens securing the Indebtedness permitted under Section 4.07(a)(8) in accordance with the terms thereof; provided that such Liens are limited to the fixed or capital assets that are acquired, constructed or improved by such Indebtedness;
(18)easements, zoning restrictions, licenses, title restrictions, rights-of-way and similar encumbrances on real property imposed by law or incurred or granted by the Issuer or any Restricted Subsidiary in the ordinary course of business that do not materially detract from the value of the affected property or materially interfere with the ordinary conduct of business of the Issuer or any Restricted Subsidiary;
(19)to the extent the Issuer or any of its Restricted Subsidiaries is an obligor in respect of any Aircraft Financing, pledges of, collateral assignments of or other Liens securing such Aircraft Financing on any lease, sublease, interchange, license, contract, arrangement or agreement related to such financed Aircraft, Engine or Spare Parts, including Aircraft Financing Related Cargo Business Assets to which the Issuer or such Restricted Subsidiary, as applicable, is a party; and/or
(20)with respect to the equity pledge agreement in respect of TAM Linhas Aéreas S.A.’s shares, the fiduciary lien created by the equity fiduciary lien agreement over the shares held in TAM Linhas Aéreas S.A., considering the listing of assets (arrolamento de bens) in connection with the Administrative Proceeding No.
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13855.720079/2014-93, as required by article 12 of Federal Revenue Office Normative Ruling (Instrução Normativa RFB) No. 2,091, dated June 22, 2022;
provided that until a perfected Lien has been provided to the Collateral Trustee or a Local Collateral Agent, as applicable, in respect of any Deferred Asset, no consensual Lien shall be granted in respect of any such Deferred Asset.

“Permitted Person” means (i) any Person (including any “person” as that term is used in Section 13(d)(3) of the Exchange Act) which owns or operates, directly or indirectly through a contractual arrangement, a Permitted Business, or (ii) any Subsidiary of such Person.
“Permitted Refinancing Indebtedness” means any Indebtedness (or commitments in respect thereof) of the Issuer or any of its Restricted Subsidiaries issued in exchange for, or the proceeds of which are used to renew, refund, extend, refinance, replace, defease or discharge other Indebtedness (the “Refinanced Indebtedness”) of the Issuer or any of its Restricted Subsidiaries (other than intercompany Indebtedness); provided that:
(1)the principal amount (or accreted value, if applicable) of such Permitted Refinancing Indebtedness does not exceed the original principal amount (or accreted value, if applicable) when initially incurred of the Refinanced Indebtedness (plus all accrued interest on the Indebtedness and the amount of all fees and expenses, including premiums, incurred in connection therewith); provided that, with respect to any such Permitted Refinancing Indebtedness that is refinancing secured Indebtedness and is secured by the same collateral, the principal amount (or accreted value, if applicable) of such Permitted Refinancing Indebtedness shall not exceed the greater of (x) the preceding amount and (y) the Fair Market Value of the assets securing such Permitted Refinancing Indebtedness (taking into account any other Indebtedness secured on a pari passu or senior basis by such assets);
(2)such Permitted Refinancing Indebtedness has a maturity date no earlier than the maturity date of the Refinanced Indebtedness;
(3)such Permitted Refinancing Indebtedness has a Weighted Average Life to Maturity that is equal to or greater than the Weighted Average Life to Maturity of the Refinanced Indebtedness;
(4)if the Refinanced Indebtedness is subordinated in right of payment to the Notes Obligations, such Permitted Refinancing Indebtedness is subordinated in right of payment to the Notes Obligations on terms at least as favorable to the Holders of the Notes as those contained in the documentation governing the Refinanced Indebtedness;
(5)no Restricted Subsidiary that is not the Issuer or a Guarantor shall be an obligor with respect to such Permitted Refinancing Indebtedness unless such Restricted Subsidiary was an obligor with respect to the Refinanced Indebtedness; and
(6)such Permitted Refinancing Indebtedness is incurred no later than 36 months after the date on which the Refinanced Indebtedness is actually repaid or discharged by the Issuer or any of its Restricted Subsidiaries.
“Person” means any natural person, corporation, exempted company, division of a corporation, partnership, limited liability company, trust, joint venture, association, company, estate, unincorporated organization, Airport Authority or Governmental Authority or any agency or political subdivision thereof.
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“Pledge and Security Agreement” means that certain Priority Lien Pledge and Security Agreement, dated as of October 12, 2022, by and among the Collateral Trustee and the Issuer and the Guarantors, substantially in the form attached as Exhibit E to the Collateral Trust Agreement, as amended, restated, modified, supplemented, extended or amended and restated from time to time.
“Pledged Gate Leaseholds” shall have the meaning given to it in the Pledge and Security Agreement.
“Pledged Receivables” shall have the meaning given to it in the Pledge and Security Agreement.
“Pledged Routes” means, to the extent not excluded as Excluded Assets, all Routes owned by the Issuer or any Guarantor.
“Pledged SGR” means the Pledged Slots, Pledged Gate Leaseholds and Pledged Routes.
“Pledged Slots” shall have the meaning given to it in the Pledge and Security Agreement.
“Prepayment Percentage” means (i) at any time that the Asset Coverage Ratio is less than [*], 100%, (ii) at any time that the Asset Coverage Ratio is not less than [*] and is less than [*], 50% and (iii) at any time that the Asset Coverage Ratio is not less than [*], 0%, it being understood and agreed that, for purposes of determining the Prepayment Percentage, the Asset Coverage Ratio shall be determined on the date on which such proceeds are received by the Issuer or applicable Restricted Subsidiary (giving pro forma effect to the subject asset sales and/or Recovery Events).
“Pre-Sold Currency” shall have the meaning given to it in the definition of “Asset Coverage Ratio.”
“Priority Lien” means a Lien granted pursuant to a Security Document to the Collateral Trustee or any Local Collateral Agent, at any time, upon any property of the Issuer or a Guarantor to secure any Priority Lien Obligations, including the Liens granted to the Collateral Trustee and each Local Collateral Agent in connection with the Revolving Credit Agreement, the 2029 Notes Indenture and this Indenture.
“Priority Lien Debt” means:
(1)Indebtedness of the Issuer and the Guarantors under (i) the Notes issued on the Issue Date (and any other amounts owing under this Indenture relating to the Notes issued on the Issue Date), (ii) the 2029 Notes Indenture, and any other agreement or instrument pursuant to which any 2029 Notes secured by all or a portion of the Collateral on a pari passu basis with the Notes Obligations are issued, in an aggregate principal amount not to exceed [*] under this clause (1)(ii), and (iii) any Permitted Refinancing Indebtedness in respect of any Indebtedness incurred pursuant to clause (1)(i) or (1)(ii) (or any successive Permitted Refinancing Indebtedness) that is secured by all or a portion of the Collateral on a pari passu basis with any Notes Obligations;
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(2)(i) Indebtedness of the Issuer and the Guarantors under the Revolving Credit Facility (including letters of credit and reimbursement obligations with respect thereto) in an aggregate principal amount not to exceed [*] at any time outstanding, and (ii) any Permitted Refinancing Indebtedness (disregarding clauses (2) and (3) of such defined term) in respect of any Indebtedness incurred pursuant to clause (2)(i) (or any successive Permitted Refinancing Indebtedness) that is secured by all or a portion of the Collateral on a pari passu basis with the Obligations; provided that all Indebtedness incurred under this clause (2) in the form of revolving Indebtedness may be senior or superpriority in right of payment from the Collateral to the Notes Obligations;
(3)[Reserved]; and
(4)(i) any other Total Funded Debt of the Issuer and the Guarantors that is secured by all or a portion of the Collateral on a pari passu basis with the Notes Obligations; provided that after giving Pro Forma Effect to the issuance or incurrence of any such Indebtedness, the aggregate principal amount of the sum of all Priority Lien Debt, and, without duplication, Senior Priority Refinancing Indebtedness (including, in each case, without duplication of any outstanding principal amounts, the amount of any unfunded commitments under a revolving credit facility as of such date) would not exceed the greater of (A)(x) prior to a Collateral Release Event in respect of any Cargo Business Assets, [*] and (y) thereafter, [*] and (B) such an amount that would cause the Asset Coverage Ratio to be equal to [*] and (ii) any Permitted Refinancing Indebtedness in respect of any Indebtedness incurred pursuant to clause (4)(i) (and any successive Permitted Refinancing Indebtedness) that is secured by all or a portion of the Collateral on a pari passu basis with the Obligations.
“Priority Lien Documents” shall have the meaning given to the term “Secured Debt Documents” in the Collateral Trust Agreement.
“Priority Lien Obligations” shall have the meaning given to the term “Secured Obligations” in the Collateral Trust Agreement.
“Priority Lien Representative” shall have the meaning given to the term “Secured Debt Representative” in the Collateral Trust Agreement.
“Priority Secured Debt” shall have the meaning given to the term “Secured Debt” in the Collateral Trust Agreement.
“Priority Secured Parties” means, collectively, (a) the Secured Parties and the holders of all other Priority Lien Obligations outstanding from time to time, (b) the Priority Lien Representatives, (c) the Collateral Trustee and (d) each Local Collateral Agent.
“Private Placement Legend” means the legend set forth in Section 2.06(f)(1) hereof to be placed on all Notes issued under this Indenture except where otherwise permitted by the provisions of this Indenture.
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“Pro Forma Basis,” “Pro Forma Compliance” and “Pro Forma Effect” means, in connection with determining whether any Disposition, Investment or other Restricted Payment, a Collateral Release Event, or repayment and/or incurrence of Indebtedness (each, a “Pro Forma Event”) is permitted by reference to the Fixed Charge Coverage Ratio, Asset Coverage Ratio, Total Asset Coverage Ratio, Asset Coverage Test or Consolidated Liquidity, that such calculations shall be determined by the Issuer in good faith after giving pro forma effect to each Pro Forma Event (and any transactions related thereto).
“Proceeds” shall have the meaning given to it in the Pledge and Security Agreement.
“Qatar Group” means Qatar Airways Group Q.C.S.C., a company incorporated under the laws of the State of Qatar with commercial registration number 16070 and having its principal place of business at Qatar Airways Tower One, Airport Road, P.O. Box 22550, Doha, Qatar.
“QIB” means a “qualified institutional buyer” as defined in Rule 144A.
“Qualified Receivables Transaction” means any transaction or series of transactions entered into by the Issuer or any of its Subsidiaries pursuant to which the Issuer or any of its Subsidiaries (1) sells, conveys or otherwise transfers to (A) a Receivables Subsidiary or any other Person (in the case of a transfer by the Issuer or any of its Subsidiaries) or (B) any other Person (in the case of a transfer by a Receivables Subsidiary) or (2) grants a security interest in any accounts receivable (whether now existing or arising in the future) of the Issuer or any of its Subsidiaries, and any assets related thereto, including, without limitation, all Equity Interests and other investments in a Receivables Subsidiary, all collateral securing such accounts receivable or other assets, all contracts and all Guarantees or other obligations in respect of such assets, proceeds of such assets, and other assets which are customarily transferred or in respect of which security interests are customarily granted in connection with asset securitization transactions involving accounts receivable, royalties or revenue streams, other than assets that constitute Permanent Collateral or proceeds of Permanent Collateral (and, prior to a Collateral Release Event in respect of Cargo Business Assets, other than assets that constitute Supplemental Collateral in respect of Cargo Business Assets that do not constitute Released Assets or proceeds of such Supplemental Collateral).
“Qualifying Equity Interests” means Equity Interests of the Issuer other than Disqualified Stock.
“RCF Loan Agreement” means that certain credit and guaranty agreement dated as of March 29, 2016 by and among the Issuer, as borrower, Citibank, N.A., as administrative agent, the guarantors from time to time party thereof, the collateral agents from time to time party thereto, and the lenders from time to time party thereto, as amended as of November 3, 2022 and July 15, 2024, and as further amended, restated, amended and restated, supplemented or otherwise modified from time to time.
“Receivables Pledge Agreements” shall have the meaning set forth in the Collateral Trust Agreement.
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“Receivables Subsidiary” means a Subsidiary of the Issuer which engages in no activities other than in connection with the financing of accounts receivable and which is designated by the Board of Directors (as provided below) as a Receivables Subsidiary; provided that (a) no portion of its Indebtedness or any other obligations (contingent or otherwise) (i) is guaranteed by the Issuer or any Restricted Subsidiary of the Issuer that is not a Receivables Subsidiary (other than comprising a pledge of the Capital Stock or other interests in such Receivables Subsidiary (an “incidental pledge”), and excluding any Guarantees of obligations (other than the principal of, and interest on, Indebtedness) pursuant to representations, warranties, covenants and indemnities entered into in the ordinary course of business in connection with a Qualified Receivables Transaction), (ii) is recourse to or obligates the Issuer or any Restricted Subsidiary of the Issuer in any way other than through an incidental pledge or pursuant to representations, warranties, covenants, indemnities or other obligations that are usual and customary for a limited recourse financing in the applicable jurisdiction in connection with a Qualified Receivables Transaction or (iii) subjects any property or asset of the Issuer or any Subsidiary of the Issuer that is not a Receivables Subsidiary (other than accounts receivable and related assets as provided in the definition of “Qualified Receivables Transaction”), directly or indirectly, contingently or otherwise, to the satisfaction thereof, other than pursuant to representations, warranties, covenants and indemnities entered into in the ordinary course of business in connection with a Qualified Receivables Transaction, (b) with which neither the Issuer nor any other Restricted Subsidiary of the Issuer that is not a Receivables Subsidiary has any material contract, agreement, arrangement or understanding (other than pursuant to the Qualified Receivables Transaction) other than (i) on terms no less favorable to the Issuer or such Subsidiary than those that might be obtained at the time from Persons who are not Affiliates of the Issuer, and (ii) fees payable in the ordinary course of business in connection with servicing accounts receivable and (c) with which neither the Issuer nor any other Subsidiary of the Issuer has any obligation to maintain or preserve such Subsidiary’s financial condition, other than a minimum capitalization in customary amounts, or to cause such Subsidiary to achieve certain levels of operating results. Any such designation by the Board of Directors will be evidenced to the Trustee by delivering to the Trustee a certified copy of the resolution of the Board of Directors giving effect to such designation and an Officer’s Certificate certifying that such designation complied with the foregoing conditions.
“Recovery Event” means any settlement of or payment in respect of any property or casualty insurance claim or any condemnation proceeding in respect of Significant Assets or any Event of Loss.
“Reference Date” means the thirtieth (30th) Business Day after each March 31st and September 30th of each calendar year (commencing with September 30, 2024).
“Regulation S” means Regulation S promulgated under the Securities Act, as it may be amended from time to time, and any successor provision thereto.
“Regulation S Global Note” means, with respect to the Notes, a Global Note substantially in the form of Exhibit A hereto bearing the Global Note Legend and the Private Placement Legend and deposited with or on behalf of and registered in the name of the Depositary or its nominee, issued in a denomination equal to the outstanding principal amount of the Notes sold in reliance on Rule 903 of Regulation S.
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“Related Obligations” means, with respect to any Indebtedness, any principal (including reimbursement obligations with respect to letters of credit whether or not drawn), interest (including interest accruing after the maturity of such Indebtedness and interest accruing after the filing of any petition of bankruptcy, or the commencement of any insolvency, reorganization or like proceeding, relating to the borrower or issuer thereof, whether or not a claim for post-filing or post-petition interest is allowed in such proceeding), premium (if any), fees, indemnifications, reimbursements, expenses and other liabilities, in each case payable under the documentation governing such Indebtedness.
“Relevant Date” means, with respect to any payment on a Note, whichever is the later of: (i) the date on which such payment first becomes due; and (ii) if the full amount payable has not been received by the Trustee or a Paying Agent on or prior to such due date, the date on which notice is given to the Holders that the full amount has been received by the Trustee or a Paying Agent.
“Reorganization Plan” means the Joint Plan of Reorganization of LATAM Airlines Group S.A., et al. Under Chapter 11 of the Bankruptcy Code (Docket No. 5753), as amended, supplemented or modified in accordance with the provisions thereto (but without giving effect to any amendment, supplement or modification that is materially adverse to the Holders of the Notes (as determined in good faith by the Issuer) to which the Holders have not consented.
“Responsible Officer” when used with respect to the Trustee, means any officer within the Corporate Trust Office of the Trustee (or any successor group of the Trustee) or any other officer of the Trustee customarily performing functions similar to those performed by any of the above designated officers and also means, with respect to a particular corporate trust matter, any other officer to whom such matter is referred because of his knowledge of and familiarity with the particular subject, who, in each case, shall have direct responsibility for administering this Indenture.
“Restricted Definitive Note” means, with respect to the Notes, a Definitive Note bearing the Private Placement Legend.
“Restricted Global Note” means, with respect to the Notes, a Global Note bearing the Private Placement Legend.
“Restricted Investment” means an Investment other than a Permitted Investment.
“Restricted Period” means the 40-day distribution compliance period as defined in Regulation S.
“Restricted Subsidiary” of a Person means any Subsidiary of the referent Person that is not an Unrestricted Subsidiary; provided that, if a referent Person is not specified, then the referent Person shall be the Issuer.
“Revolver Administrative Agent” shall have the meaning given to such term in the Collateral Trust Agreement.
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“Revolving Credit Agreement” means that certain Super-Priority Revolving Loan Credit Agreement, dated as of October 12, 2022, among the Issuer, acting through its Florida branch, the guarantors from time to time party thereto, the Revolver Administrative Agent and Wilmington Trust, National Association, as collateral trustee, as amended by the First Amendment, dated as of July 15, 2024 and by the Second Amendment, dated as of October 7, 2024.
“Revolving Credit Facility” means the credit facility established under the Revolving Credit Agreement in favor of the Issuer in accordance with the terms set forth therein or in the other Revolving Loan Documents.
“Revolving Loan Documents” means the “Loan Documents” as defined in the Revolving Credit Agreement.
“Routes” means the authority of the Issuer or a Guarantor, pursuant to Title 49 or other applicable law, to operate scheduled service between a specifically designated pair of terminal points and intermediate points, if any, including applicable frequencies, exemption and certificate authorities, including at any time of determination, any route authority identified on Schedule 5.2 of the Pledge and Security Agreement as such Schedule may be amended or modified from time to time in accordance with the terms hereof, and “Route” shall mean any of such route authorities as the context requires, in each case whether or not such route authority is utilized at such time by the Issuer or a Guarantor and including, without limitation, any other route authority held by the Issuer or a Guarantor pursuant to certificates, orders, notices and approvals issued to the Issuer or a Guarantor from time to time, but in each case solely to the extent relating to such route authority.
“Rule 144” means Rule 144 promulgated under the Securities Act.
“Rule 144A” means Rule 144A promulgated under the Securities Act.
“Rule 903” means Rule 903 promulgated under the Securities Act.
“Rule 904” means Rule 904 promulgated under the Securities Act.
“S&P” means S&P Global Ratings and its successors.
“Sale of the Issuer or a Guarantor” means, with respect to any Significant Asset, an issuance, sale, lease, conveyance, transfer or other disposition of the Capital Stock of the applicable Issuer or Guarantor that owns such Significant Asset other than (1) an issuance of Equity Interests by the Issuer or a Guarantor to the Issuer or another Restricted Subsidiary of the Issuer and (2) an issuance of directors’ qualifying shares.
“Sanctioned Country” means a country or territory that is the subject of comprehensive Sanctions broadly prohibiting dealings with such country or territory (currently, the Crimea, the so-called Donetsk People’s Republic, and the so-called Luhansk People’s Republic regions of Ukraine, Cuba, Iran, North Korea, and Syria).
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“Sanctions” means any economic or trade sanctions or embargos enacted, imposed, administered or enforced by the U.S. government, including those administered by the Department of Treasury’s Office of Foreign Assets Control and the U.S. Department of State, the United Nations Security Council, the European Union, any European Union member state, the United Kingdom and/or any other applicable Governmental Authorities with jurisdiction over the conduct of a Person performing under this Indenture.
“SEC” means the U.S. Securities and Exchange Commission.
“Secured Parties” means, collectively, the Trustee, the Collateral Trustee, the applicable Local Collateral Agent and the Holders of the Notes from time to time, including Holders of additional Notes issued pursuant to this Indenture.
“Securities Act” means the Securities Act of 1933, as amended.
“Security Documents” means, collectively, the Pledge and Security Agreement, the Non-U.S. Pledge Agreements, Non-U.S. IP Security Agreement, the Receivables Pledge Agreements, the Collateral Trust Agreement (and each Reaffirmation Agreement, Loan Party Joinder, Local Collateral Agent Joinder and/or Secured Debt Joinder under and as defined therein), the Local Collateral Agency Agreements, the Intellectual Property Security Agreements, any Intercreditor Agreements and any other instrument or agreement (which is designated as a Security Document therein) executed and delivered by the Issuer or any Guarantor to the Trustee, any Priority Lien Representative, the Collateral Trustee or any Local Collateral Agent in favor of the Priority Secured Parties or in respect of priorities in the Collateral, including with respect to any Additional Collateral, and any financing statement or other instrument or document required to be filed or recorded to perfect, register or record the Priority Lien, in each case, as amended, modified, renewed, restated or replaced, in whole or in part, from time to time, in accordance with its terms and so long as such agreement, instrument or document shall not have been terminated in accordance with its terms.
“Senior Priority Refinancing Indebtedness” means any Permitted Refinancing Indebtedness in respect of Priority Lien Debt (and any successive Permitted Refinancing Indebtedness) other than any Permitted Refinancing Indebtedness that is subordinated in right of payment to the Obligations on terms no less favorable to the Holders than the terms of the Junior Lien Intercreditor Agreement.
“Series” means, severally, each issue or series of notes, loans or other Indebtedness under any indenture or credit facility represented by a single Priority Lien Representative that constitutes Priority Lien Obligations.
“Series of Junior Lien Indebtedness” means, severally, each issue or series of notes or other Indebtedness under any indenture or Credit Facility represented by a single Junior Lien Representative that constitutes Junior Lien Obligations.
“Series of Priority Lien Debt” means, severally, (a) the Notes, (b) the 2029 Notes, (c) Indebtedness under the Revolving Credit Agreement, and (d) any Series of Additional Priority Lien Debt.
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For the avoidance of doubt, all reimbursement obligations in respect of letters of credit issued pursuant to a Priority Lien Document shall be part of the same Series of Priority Lien Debt as all other Priority Secured Debt incurred pursuant to such Priority Lien Document.
“Significant Assets” means (a) the Collateral, (b) the Coverage Assets, after giving effect to all Collateral Release Events that have occurred, and (c) any other Slots, Gate Leaseholds and Routes that have not been subject of a Collateral Release Event.
“Significant Subsidiary” means any “significant subsidiary” as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated pursuant to the Securities Act, as such Regulation is in effect on the Issue Date.
“Slot” means, at any date of determination, the right and operational authority to conduct one landing or take-off operation at a specific time or during a specific time period at an airport and including, without limitation, slots, arrival authorizations and operating authorizations, whether pursuant to FAA or DOT regulations or orders pursuant to Title 14, Title 49 or other federal statutes or regulations now or hereinafter in effect, but excluding in all cases any slot that was obtained by a Person from another air carrier pursuant to an agreement and is held by such Person on a temporary basis.
“Spare Engine Facility Loan Agreement” means that certain Amended and Restated Loan Agreement, dated as of June 29, 2018 by and among the Issuer, acting through its Florida Branch, as borrower, Crédit Agricole Corporate and Investment Bank, as lender, arranger, agent and security agent, and the other lenders party thereto, as modified, replaced or refinanced from time to time.
“Spare Parts” means all accessories, appurtenances or Parts of an Aircraft (except an Engine), Parts of an Engine, or Parts of an Appliance, in each case that are to be installed at a later time in an Aircraft, Engine or Appliance.
“Specified Jurisdiction” means the United States, any state of the United States, the District of Columbia, Luxembourg, the Netherlands or any other jurisdiction mutually agreed by the Issuer and the Trustee.
“Stated Maturity” means, with respect to any installment of interest or principal on any series of Indebtedness, the date on which the payment of interest or principal was scheduled to be paid in the documentation governing such Indebtedness as of the date of this Indenture, and will not include any contingent obligations to repay, redeem or repurchase any such interest or principal prior to the date originally scheduled for the payment thereof.
“Subsequent Appraisal” shall have the meaning given to such term in the definition of “Appraisal.”
“Subsidiary” means, in respect of any specified Person, any corporation, association, partnership or other business entity of which more than 50% of the total Voting Power of shares of Capital Stock or other interests (including partnership interests) entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly, by such Person.
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“Supplemental Collateral” means Collateral (other than any Released Assets in respect of such Collateral following a Collateral Release Event) consisting of (a) third-party and intercompany Receivables in respect of the Cargo Business Assets, (b) Cargo Business Intellectual Property, (c) Pledged SGR, and (d) directly or indirectly, Equity Interests in Subsidiaries whose Collateral assets consist only of (a), (b) and (c) above, in each case (i) upon which Liens have been granted to the Collateral Trustee or a Local Collateral Agent, as applicable, to secure the Notes Obligations or any other Priority Lien Obligations (but excluding all such assets and properties released from such Liens pursuant to the applicable Security Document), together with all proceeds of the foregoing (including, without limitation, proceeds from Dispositions of the foregoing) and (ii) other than Excluded Assets.
“Taxes” means any and all present or future taxes, levies, imposts, duties, assessments, fees, deductions, charges or withholdings imposed by any Governmental Authority including any interest, additions to tax or penalties applicable thereto.
“Title 14” means Title 14 of the U.S. Code of Federal Regulations, including Part 93, Subparts K and S thereof, as amended from time to time or any successor or recodified regulation.
“Title 49” means Title 49 of the U.S. Code, which, among other things, recodified and replaced the U.S. Federal Aviation Act of 1958, and the rules and regulations promulgated pursuant thereto, and any subsequent legislation that amends, supplements or supersedes such provisions.
“Total Asset Coverage Ratio” means, as of any date, the ratio of (a) the Appraised Value of the Coverage Assets as of such date to (b) the sum of (i) the aggregate principal amount of all Priority Lien Debt as of such date (including, without duplication of any outstanding principal amounts, the amount of any unfunded commitments under all revolving credit facilities (including the Revolving Credit Agreement) of the Issuer and its Restricted Subsidiaries as of such date) plus (ii) the aggregate principal amount of all Junior Lien Indebtedness (including, without duplication of any outstanding principal amounts, the amount of any unfunded commitments under a revolving credit facility as of such date) plus (iii) without duplication, the aggregate principal amount of all Permitted Refinancing Indebtedness in respect of Priority Lien Debt or Junior Lien Indebtedness as of such date (including, in each case, without duplication of any outstanding principal amounts, the amount of any unfunded commitments under a revolving credit facility constituting such Permitted Refinancing Indebtedness as of such date) plus (iv) the aggregate outstanding amount of Pre-Sold Currency.
“Total Funded Debt” means, as of any date, the outstanding principal amount of all funded third-party Indebtedness for borrowed money of the Issuer and its Restricted Subsidiaries determined on a consolidated basis (excluding, for the avoidance of doubt, any Aircraft or Engine leases or other lease obligations), as reflected on a balance sheet of the Issuer and its Restricted Subsidiaries prepared in accordance with IFRS.
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“Trustee” means Wilmington Trust, National Association until a successor replaces it in accordance with the applicable provisions of this Indenture and thereafter means the successor serving hereunder.
“U.S. Person” means a U.S. Person as defined in Rule 902(k) promulgated under the Securities Act.
“UCC” means the Uniform Commercial Code or any successor provision thereof as the same may from time to time be in effect in the State of New York or the Uniform Commercial Code or any successor provision thereof (or similar code or statute) of another jurisdiction, to the extent it may be required to apply to the perfection or priority of any Lien on any item or items of Collateral.
“United States” or “U.S.” means the United States of America; provided that for geographic purposes, “United States” means, in aggregate, the 50 states and the District of Columbia of the United States of America.
“Unrestricted Cash Amount” means, (a) on any date of determination, as determined in accordance with IFRS (where applicable), the aggregate amount of unrestricted cash and Cash Equivalents owned by the Issuer or any Restricted Subsidiary as shown on a balance sheet prepared in accordance with IFRS and (b) cash and Cash Equivalents owned by the Issuer or any Restricted Subsidiary restricted in favor of any Secured Party to secure the Notes Obligations (it being understood such cash and Cash Equivalents may also secure other Secured Obligations (as defined in the Pledge and Security Agreement)).
“Unrestricted Definitive Note” means, with respect to the Notes, a Definitive Note that does not bear and is not required to bear the Private Placement Legend.
“Unrestricted Global Note” means a Global Note that does not bear and is not required to bear the Private Placement Legend.
“Unrestricted Subsidiary” means any Subsidiary of the Issuer that is designated by the Board of Directors as an Unrestricted Subsidiary if that designation would not cause a Default or Event of Default and no Default or Event of Default exists at the time of such designation; provided that if a Restricted Subsidiary is designated as an Unrestricted Subsidiary, the aggregate Fair Market Value of all outstanding Investments owned by the Issuer and its Restricted Subsidiaries in the Subsidiary designated as an Unrestricted Subsidiary will be deemed to be an Investment made as of the time of the designation, which Investment is permitted at that time under Section 4.06 hereof. Any designation of an Unrestricted Subsidiary shall be made pursuant to a resolution of the Board of Directors, but only if such Subsidiary:
(1)has no Indebtedness other than Non-Recourse Debt;
(2)other than as permitted under Section 4.10 hereof, is not party to any agreement, contract, arrangement or understanding with the Issuer or any Restricted Subsidiary of the Issuer unless the terms of any such agreement, contract, arrangement or understanding are no less favorable to the Issuer or such Restricted Subsidiary than those that might be obtained at the time from Persons who are not Affiliates of the Issuer;
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(3)is a Person with respect to which neither the Issuer nor any of its Restricted Subsidiaries has any direct or indirect obligation (a) to subscribe for additional Equity Interests or (b) to maintain or preserve such Person’s financial condition or to cause such Person to achieve any specified levels of operating results;
(4)has not guaranteed or otherwise directly or indirectly provided credit support for any Indebtedness of the Issuer or any of its Restricted Subsidiaries;
(5)has substantially simultaneously with any such designation, been similarly designated under the documents governing any outstanding Priority Lien Debt and any outstanding Junior Lien Indebtedness;
(6)after giving effect to such designation, the Asset Coverage Ratio shall be greater than or equal to [*];
(7)does not own any assets or properties that constitute Collateral; and
(8)does not own assets or properties, taken together with the assets and properties owned by existing Unrestricted Subsidiaries (and Restricted Subsidiaries that substantially simultaneously with such designation shall also be designated as Unrestricted Subsidiaries), in excess of [*].
The Board of Directors may at any time designate any Unrestricted Subsidiary to be a Restricted Subsidiary; provided that (x) no Default or Event of Default would be in existence following such designation, (y) after giving effect to such designation, the Asset Coverage Ratio shall be greater than or equal to [*] and (z) all Liens of such Unrestricted Subsidiary outstanding immediately following such designation would, if incurred at such time, have been permitted to be incurred for all purposes of this Indenture.
“Use or Lose Rule” means with respect to Slots, any applicable utilization requirements issued by the FAA, other Governmental Authorities, any Non-U.S. Aviation Authorities or any Airport Authorities.
“Voting Power” in respect of any Person means the power to vote, or direct the vote of, the Voting Stock of such Person (rather than simply the number of shares of Voting Stock held in respect of such Person).
“Voting Stock” of any specified Person as of any date means the Capital Stock of such Person that is at the time entitled to vote in the election of the board of directors of such Person.
“Weighted Average Life to Maturity” means, when applied to any Indebtedness at any date, the number of years obtained by dividing:
(1)the sum of the products obtained by multiplying (A) the amount of each then remaining installment, sinking fund, serial maturity or other required payments of principal, including payment at final maturity, in respect of the Indebtedness, by (B) the number of years (calculated to the nearest one-twelfth) that will elapse between such date and the making of such payment; by
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(2)the then outstanding principal amount of such Indebtedness.
Section 1.02.Other Definitions.
Term
Defined in Section
“Additional Amounts”
4.20
“Affiliate Transaction”
4.10
“Asset Disposition Offer”
4.08
“Authentication Order”
2.02
“Change of Control Offer”
4.12
“Change of Control Payment”
4.12
“Change of Control Payment Date”
4.12
“Collateral Release Event”
4.26
“Collateral Release Event Notice”
4.26
“Covenant Defeasance”
8.03
“Coverage Shortfall”
4.16
“Cure Period”
4.16
“Designated Guarantor”
4.13
“DTC”
2.03
“Event of Default”
6.01
“Excess Proceeds”
4.08
“First Call Date”
3.07
“Legal Defeasance”
8.02
“Minimum Chilean Dividends”
4.06
“Notice of Default”
6.01
“Offer Amount”
3.11
“Offer Period”
3.11
“Other Offer Notes”
4.08
“Paying Agent”
2.03
“Proceeding”
13.07
“Process Agent”
13.07
“Purchase Date”
3.11
“Redemption Date”
3.07
“Redemption Deposit”
8.04
“Registrar”
2.03
“Released Assets”
4.26
“Restricted Payments”
4.06
“Special Interest”
4.16
“Subject Company”
5.01
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“Subject Entity”
5.01
“Taxing Jurisdiction”
4.20

Section 1.03.Rules of Construction. Unless the context otherwise requires:
(1)a term has the meaning assigned to it;
(2)an accounting term not otherwise defined has the meaning assigned to it in accordance with IFRS;
(3)“or” is not exclusive;
(4)words in the singular include the plural, and in the plural include the singular;
(5)“will” shall be interpreted to express a command;
(6)provisions apply to successive events and transactions;
(7)“including” means including without limitation;
(8)references to sections of or rules under the Securities Act will be deemed to include substitute, replacement of successor sections or rules adopted by the SEC from time to time; and
(9)each reference to “cash” shall be deemed to include also Cash Equivalents.
Section 1.04.Calculations and Tests. Unless the context otherwise requires:
(a)For purposes of any determination under Article 4 or any other provision of this Indenture subject to any Dollar limitation, threshold or basket, all amounts incurred, outstanding or proposed to be incurred or outstanding in currencies other than Dollars shall be translated into Dollars at the Exchange Rate (rounded to the nearest currency unit, with 0.5 or more of a currency unit being rounded upward) at the applicable time determined in accordance with this Section 1.04; provided, however, that for purposes of determining compliance with Article 4 with respect to any amount in a currency other than Dollars, no Default or Event of Default shall be deemed to have occurred solely as a result of changes in rates of exchange occurring after the time such Indebtedness or Lien is incurred or Investment or other Restricted Payment or Disposition is made, or transaction with an Affiliate is entered into. For purposes of any determination of the Asset Coverage Ratio, the Total Asset Coverage Ratio, Fixed Charge Coverage Ratio or Consolidated Liquidity, amounts in currencies other than Dollars shall be translated into Dollars at the currency exchange rates used in preparing the most recently delivered financial statements pursuant to Section 4.03 (adjusted to reflect the currency translation effects, determined in accordance with IFRS, of any Hedging Agreements for currency exchange risks with respect to the applicable currency in effect on the date of determination of the Dollar Equivalent).
(b)It is understood and agreed that any Indebtedness, Lien, Investment or other Restricted Payment, Disposition and/or Affiliate transaction need not be permitted solely by reference to one category of permitted Indebtedness, Lien, Investment or other Restricted Payment, Disposition and/or Affiliate transaction within the same covenant, but may instead be
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permitted in part under any combination thereof or under any other available exception within the same covenant.

Article 2

THE NOTES
Section 2.01.Form and Dating.
(a)General. The Notes and the Trustee’s certificate of authentication will be substantially in the form of Exhibit A hereto. The Notes may have notations, legends or endorsements required by law, stock exchange rule or usage. Each Note will be dated the date of its authentication. The Notes shall be in minimum denominations of $2,000 and integral multiples of $1,000 in excess thereof.
The terms and provisions contained in the Notes will constitute, and are hereby expressly made, a part of this Indenture and the Issuer, the Guarantors, the Trustee and the Collateral Trustee, by their execution and delivery of this Indenture, expressly agree to such terms and provisions and to be bound thereby. However, to the extent any provision of any Note conflicts with the express provisions of this Indenture, the provisions of this Indenture shall govern and be controlling.
(b)Global Notes. Notes issued in global form will be substantially in the form of Exhibit A hereto (including the Global Note Legend set forth in Section 2.06(f)(2) hereof and the ERISA Legend set forth in Section 2.06(f)(3) hereof and the “Schedule of Exchanges of Interests in the Global Note” attached thereto). Notes issued in definitive form will be substantially in the form of Exhibit A hereto (but without the Global Note Legend thereon and without the “Schedule of Exchanges of Interests in the Global Note” attached thereto). Each Global Note will represent such of the outstanding Notes as will be specified therein, and each shall provide that it represents the aggregate principal amount of outstanding Notes from time to time endorsed thereon and that the aggregate principal amount of outstanding Notes represented thereby may from time to time be reduced or increased, as appropriate, to reflect exchanges and redemptions. Any endorsement of a Global Note to reflect the amount of any increase or decrease in the aggregate principal amount of outstanding Notes represented thereby will be made by the Trustee or the Custodian, at the direction of the Trustee, in accordance with instructions given by the Holder thereof as required by Section 2.06 hereof.
(c)Euroclear and Clearstream Procedures Applicable. The provisions of the “Operating Procedures of the Euroclear System” and “Terms and Conditions Governing Use of Euroclear” of Euroclear and the “General Terms and Conditions of Clearstream Banking” and “Customer Handbook” of Clearstream and, in each case, any successor provisions, will be applicable to transfers of beneficial interests in the Regulation S Global Notes that are held by Participants through Euroclear or Clearstream.
Section 2.02.Execution and Authentication.
The Notes shall be executed on behalf of the Issuer by at least one Officer of the Issuer. The signature of any Officer on the Notes may be manual, electronic or facsimile signatures of such Officer and may be imprinted or otherwise reproduced on the Notes.
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If an Officer whose signature is on a Note no longer holds that office at the time a Note is authenticated, the Note will nevertheless be valid.
A Note will not be valid until authenticated by the manual signature of the Trustee. The signature will be conclusive evidence that the Note has been authenticated under this Indenture.
The Trustee will, upon receipt of a written order of the Issuer signed by an Officer of the Issuer (an “Authentication Order”), authenticate the Notes for original issue that may be validly issued under this Indenture, including any Additional Notes. The aggregate principal amount of Notes outstanding at any time may not exceed the aggregate principal amount of Notes authorized for issuance by the Issuer pursuant to one or more Authentication Orders, except as provided in Section 2.07 hereof.
In authenticating the Notes, the Trustee shall receive, and subject to Section 7.01 hereof will be fully protected in relying upon, an Opinion of Counsel stating that this Indenture and such Notes (when authenticated and delivered by the Trustee and issued by the Issuer in the manner and subject to any conditions specified in such Opinion of Counsel) and such Note Guarantees (when issued by the Guarantors in the manner and subject to any conditions specified in such Opinion of Counsel), will constitute valid and binding obligations of the Issuer and the Guarantors enforceable in accordance with their terms (except as the enforceability thereof may be limited by bankruptcy, insolvency, reorganization, moratorium, or other laws relating to or affecting creditors’ rights and by general principles of equity, and subject to customary assumptions).
The Trustee may appoint an authenticating agent acceptable to the Issuer to authenticate Notes. Unless otherwise provided in the appointment, an authenticating agent may authenticate Notes whenever the Trustee may do so. Each reference in this Indenture to authentication by the Trustee includes authentication by such agent. An authenticating agent has the same rights as an Agent to deal with Holders of Notes or an Affiliate of the Issuer.
Section 2.03.Registrar and Paying Agent.
The Issuer will maintain or cause to be maintained an office or agency where Notes may be presented for registration of transfer or for exchange (“Registrar”) and an office or agency where Notes may be presented for payment (“Paying Agent”). The Registrar will keep a register of the Notes and of their transfer and exchange. The Issuer may appoint one or more co-registrars and one or more additional paying agents. The term “Registrar” includes any co-registrar, and the term “Paying Agent” includes any additional paying agent. The Issuer may change any Paying Agent or Registrar without notice to any Holder. The Issuer will notify the Trustee in writing of the name and address of any Agent not a party to this Indenture. If the Issuer fails to appoint or maintain another entity as Registrar or Paying Agent, the Trustee shall act as such. The Issuer or any of its Subsidiaries may act as Paying Agent or Registrar with respect to the Notes.
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The Issuer initially appoints The Depository Trust Company (“DTC”) to act as Depositary with respect to the Notes.
The Issuer initially appoints the Trustee to act as the Registrar and Paying Agent and to act as Custodian with respect to the Notes.
Section 2.04.Paying Agent to Hold Money in Trust.
The Issuer will require each Paying Agent other than the Trustee to agree in writing that the Paying Agent will hold in trust for the benefit of Holders of Notes or the Trustee all money held by the Paying Agent for the payment of principal, premium or Special Interest, if any, or interest on the Notes, and will notify the Trustee of any default by the Issuer in making any such payment. While any such default continues, the Trustee may require a Paying Agent to pay all money held by it to the Trustee. The Issuer at any time may require a Paying Agent to pay all money held by it to the Trustee. Upon payment over to the Trustee, the Paying Agent (if other than the Issuer or a Subsidiary of the Issuer) will have no further liability for the money. If the Issuer or a Subsidiary of the Issuer acts as Paying Agent, it will segregate and hold in a separate trust fund for the benefit of the Holders of Notes all money held by it as Paying Agent.
Upon any bankruptcy or reorganization proceedings relating to the Issuer, the Trustee will serve as Paying Agent for the Notes.
Section 2.05.Holder Lists.
The Trustee will preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of all Holders of Notes. If the Trustee is not the Registrar, the Issuer will furnish to the Trustee at least two Business Days before each interest payment date and at such other times as the Trustee may request in writing, a list in such form and as of such date as the Trustee may reasonably require of the names and addresses of the Holders of Notes.
Section 2.06.Transfer and Exchange.
(a)Transfer and Exchange of Global Notes. A Global Note may not be transferred except as a whole by the Depositary to a nominee of the Depositary, by a nominee of the Depositary to the Depositary or to another nominee of the Depositary, or by the Depositary or any such nominee to a successor Depositary or a nominee of such successor Depositary. All Global Notes will be exchanged by the Issuer for Definitive Notes if:
(1)the Issuer delivers to the Trustee notice from the Depositary that it is unwilling or unable to continue to act as Depositary or that it is no longer a clearing agency registered under the Exchange Act and, in either case, a successor Depositary is not appointed by the Issuer within 120 days after the date of such notice from the Depositary; or
(2)there has occurred and is continuing a Default or Event of Default with respect to the Notes.
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Upon the occurrence of any of the preceding events in (1) or (2) of this Section 2.06(a), Definitive Notes shall be issued in such names as the Depositary shall instruct the Trustee. Global Notes also may be exchanged or replaced, in whole or in part, as provided in Sections 2.07 and 2.10 hereof. Every Note authenticated and delivered in exchange for, or in lieu of, a Global Note or any portion thereof, pursuant to this Section 2.06 or Section 2.07 or 2.10 hereof, shall be authenticated and delivered in the form of, and shall be, a Global Note. A Global Note may not be exchanged for another Note other than as provided in this Section 2.06(a); however, beneficial interests in a Global Note may be transferred and exchanged as provided in Section 2.06(b) or (c).
(b)Transfer and Exchange of Beneficial Interests in the Global Notes. The transfer and exchange of beneficial interests in the Global Notes will be effected through the Depositary, in accordance with the provisions of this Indenture and the Applicable Procedures. Beneficial interests in the Restricted Global Notes will be subject to restrictions on transfer comparable to those set forth herein to the extent required by the Securities Act. Transfers of beneficial interests in the Global Notes also will require compliance with either subparagraph (1) or (2) below, as applicable, as well as one or more of the other following subparagraphs, as applicable:
(1)Transfer of Beneficial Interests in the Same Global Note. Beneficial interests in any Restricted Global Note may be transferred to Persons who take delivery thereof in the form of a beneficial interest in the same Restricted Global Note in accordance with the transfer restrictions set forth in the Private Placement Legend; provided, however, that prior to the expiration of the Restricted Period, transfers of beneficial interests in the Regulation S Global Note may not be made to a U.S. Person or for the account or benefit of a U.S. Person (other than an Initial Purchaser). Beneficial interests in any Unrestricted Global Note may be transferred to Persons who take delivery thereof in the form of a beneficial interest in an Unrestricted Global Note. No written orders or instructions shall be required to be delivered to the Registrar to effect the transfers described in this Section 2.06(b)(1).
(2)All Other Transfers and Exchanges of Beneficial Interests in Global Notes. In connection with all transfers and exchanges of beneficial interests that are not subject to Section 2.06(b)(1) above, the transferor of such beneficial interest must deliver to the Registrar either:
(A)both:
(i)a written order from a Participant or an Indirect Participant given to the Depositary in accordance with the Applicable Procedures directing the Depositary to credit or cause to be credited a beneficial interest in another Global Note in an amount equal to the beneficial interest to be transferred or exchanged; and
(ii)instructions given in accordance with the Applicable Procedures containing information regarding the Participant account to be credited with such increase; or
(B)both:
(i)a written order from a Participant or an Indirect Participant given to the Depositary in accordance with the Applicable Procedures directing the Depositary to cause to be issued a Definitive Note in an amount equal to the beneficial interest to be transferred or exchanged; and
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(ii)instructions given by the Depositary to the Registrar containing information regarding the Person in whose name such Definitive Note shall be registered to effect the transfer or exchange referred to in (1) above;
Upon satisfaction of all of the requirements for transfer or exchange of beneficial interests in Global Notes contained in this Indenture and the Notes or otherwise applicable under the Securities Act, the Trustee shall adjust the principal amount of the relevant Global Note(s) pursuant to Section 2.06(g) hereof.
(3)Transfer of Beneficial Interests to Another Restricted Global Note. A beneficial interest in any Restricted Global Note may be transferred to a Person who takes delivery thereof in the form of a beneficial interest in another Restricted Global Note if the transfer complies with the requirements of Section 2.06(b)(2) above and the Registrar receives the following:
(A)if the transferee will take delivery in the form of a beneficial interest in the 144A Global Note, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications in item (1) thereof; and
(B)if the transferee will take delivery in the form of a beneficial interest in the Regulation S Global Note, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications in item (2) thereof; and
(4)Transfer and Exchange of Beneficial Interests in a Restricted Global Note for Beneficial Interests in an Unrestricted Global Note. A beneficial interest in any Restricted Global Note may be exchanged by any holder thereof for a beneficial interest in an Unrestricted Global Note or transferred to a Person who takes delivery thereof in the form of a beneficial interest in an Unrestricted Global Note if the exchange or transfer complies with the requirements of Section 2.06(b)(2) above and:
(A)the Registrar receives the following:
(i)if the holder of such beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest for a beneficial interest in an Unrestricted Global Note, a certificate from such holder in the form of Exhibit C hereto, including the certifications in item (1)(a) thereof; or
(ii)if the holder of such beneficial interest in a Restricted Global Note proposes to transfer such beneficial interest to a Person who shall take delivery thereof in the form of a beneficial interest in an Unrestricted Global Note, a certificate from such holder in the form of Exhibit B hereto, including the certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (A), if the Issuer or the Registrar so requests or if the Applicable Procedures so require, an Opinion of Counsel in form reasonably acceptable to the Issuer and the Registrar to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Private Placement Legend are no longer required in order to maintain compliance with the Securities Act.
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If any such transfer is effected pursuant to subparagraph (A) above at a time when an Unrestricted Global Note has not yet been issued, the Issuer shall issue and, upon receipt of an Authentication Order in accordance with Section 2.02 hereof, the Trustee shall authenticate one or more Unrestricted Global Notes in an aggregate principal amount equal to the aggregate principal amount of beneficial interests transferred pursuant to subparagraph (A) above.
Beneficial interests in an Unrestricted Global Note cannot be exchanged for, or transferred to Persons who take delivery thereof in the form of, a beneficial interest in a Restricted Global Note.
(c)Transfer or Exchange of Beneficial Interests for Definitive Notes.
(1)Beneficial Interests in Restricted Global Notes to Restricted Definitive Notes. If any holder of a beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest for a Restricted Definitive Note or to transfer such beneficial interest to a Person who takes delivery thereof in the form of a Restricted Definitive Note, then, upon receipt by the Registrar of the following documentation:
(A)if the holder of such beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest for a Restricted Definitive Note, a certificate from such holder in the form of Exhibit C hereto, including the certifications in item (2)(a) thereof;
(B)if such beneficial interest is being transferred to a QIB in accordance with Rule 144A, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (1) thereof;
(C)if such beneficial interest is being transferred to a Non-U.S. Person in an offshore transaction in accordance with Rule 903 or Rule 904, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (2) thereof;
(D)if such beneficial interest is being transferred pursuant to an exemption from the registration requirements of the Securities Act in accordance with Rule 144 or any other exemption from the Securities Act, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (3)(a) thereof; or
(E)if such beneficial interest is being transferred to the Issuer or any of its Subsidiaries, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (3)(b) thereof,
the Trustee shall cause the aggregate principal amount of the applicable Global Note to be reduced accordingly pursuant to Section 2.06(g) hereof, and the Issuer shall execute and the Trustee shall authenticate and deliver to the Person designated in the instructions a Definitive Note in the appropriate principal amount. Any Definitive Note issued in exchange for a beneficial interest in a Restricted Global Note pursuant to this Section 2.06(c) shall be registered in such name or names and in such authorized denomination or denominations as the holder of such beneficial interest shall instruct the Registrar through instructions from the Depositary and the Participant or Indirect Participant.
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The Trustee shall deliver such Definitive Notes to the Persons in whose names such Notes are so registered. Any Definitive Note issued in exchange for a beneficial interest in a Restricted Global Note pursuant to this Section 2.06(c)(1) shall bear the Private Placement Legend and shall be subject to all restrictions on transfer contained therein.
(2)Beneficial Interests in Restricted Global Notes to Unrestricted Definitive Notes. A holder of a beneficial interest in a Restricted Global Note may exchange such beneficial interest for an Unrestricted Definitive Note or may transfer such beneficial interest to a Person who takes delivery thereof in the form of an Unrestricted Definitive Note only if:
(A)the Registrar receives the following:
(i)if the holder of such beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest for an Unrestricted Definitive Note, a certificate from such holder in the form of Exhibit C hereto, including the certifications in item (1)(b) thereof; or
(ii)if the holder of such beneficial interest in a Restricted Global Note proposes to transfer such beneficial interest to a Person who shall take delivery thereof in the form of an Unrestricted Definitive Note, a certificate from such holder in the form of Exhibit B hereto, including the certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (A), if the Issuer or the Registrar so requests or if the Applicable Procedures so require, an Opinion of Counsel in form reasonably acceptable to the Issuer and the Registrar to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Private Placement Legend are no longer required in order to maintain compliance with the Securities Act.
(3)Beneficial Interests in Unrestricted Global Notes to Unrestricted Definitive Notes. If any holder of a beneficial interest in an Unrestricted Global Note proposes to exchange such beneficial interest for a Definitive Note or to transfer such beneficial interest to a Person who takes delivery thereof in the form of a Definitive Note, then, upon satisfaction of the conditions set forth in Section 2.06(b)(2) hereof, the Trustee will cause the aggregate principal amount of the applicable Global Note to be reduced accordingly pursuant to Section 2.06(g) hereof, and the Issuer will execute and the Trustee will authenticate and deliver to the Person designated in the instructions a Definitive Note in the appropriate principal amount. Any Definitive Note issued in exchange for a beneficial interest pursuant to this Section 2.06(c)(3) will be registered in such name or names and in such authorized denomination or denominations as the holder of such beneficial interest requests through instructions to the Registrar from or through the Depositary and the Participant or Indirect Participant. The Trustee will deliver such Definitive Notes to the Persons in whose names such Notes are so registered. Any Definitive Note issued in exchange for a beneficial interest pursuant to this Section 2.06(c)(3) will not bear the Private Placement Legend.
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(d)Transfer and Exchange of Definitive Notes for Beneficial Interests.
(1)Restricted Definitive Notes to Beneficial Interests in Restricted Global Notes. If any Holder of a Restricted Definitive Note proposes to exchange such Note for a beneficial interest in a Restricted Global Note or to transfer such Restricted Definitive Notes to a Person who takes delivery thereof in the form of a beneficial interest in a Restricted Global Note, then, upon receipt by the Registrar of the following documentation:
(A)if the Holder of such Restricted Definitive Note proposes to exchange such Note for a beneficial interest in a Restricted Global Note, a certificate from such Holder in the form of Exhibit C hereto, including the certifications in item (2)(b) thereof;
(B)if such Restricted Definitive Note is being transferred to a QIB in accordance with Rule 144A, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (1) thereof;
(C)if such Restricted Definitive Note is being transferred to a Non-U.S. Person in an offshore transaction in accordance with Rule 903 or Rule 904, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (2) thereof;
(D)if such Restricted Definitive Note is being transferred pursuant to an exemption from the registration requirements of the Securities Act in accordance with Rule 144 or any other exemption from the Securities Act, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (3)(a) thereof; or
(E)if such Restricted Definitive Note is being transferred to the Issuer or any of its Subsidiaries, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (3)(b) thereof,
the Trustee will cancel the Restricted Definitive Note, increase or cause to be increased the aggregate principal amount of, in the case of clause (A) above, the appropriate Restricted Global Note, in the case of clause (B) above, the 144A Global Note or in the case of clause (C) above, the Regulation S Global Note.
(2)Restricted Definitive Notes to Beneficial Interests in Unrestricted Global Notes. A Holder of a Restricted Definitive Note may exchange such Note for a beneficial interest in an Unrestricted Global Note or transfer such Restricted Definitive Note to a Person who takes delivery thereof in the form of a beneficial interest in an Unrestricted Global Note only if:
(A)the Registrar receives the following:
(i)if the Holder of such Definitive Notes proposes to exchange such Notes for a beneficial interest in the Unrestricted Global Note, a certificate from such Holder in the form of Exhibit C hereto, including the certifications in item (1)(c) thereof; or
(ii)if the Holder of such Definitive Notes proposes to transfer such Notes to a Person who shall take delivery thereof in the form of a beneficial interest in the Unrestricted Global Note, a certificate from such Holder in the form of Exhibit B hereto, including the certifications in item (4) thereof;
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(iii)and, in each such case set forth in this subparagraph (A), if the Issuer or the Registrar so requests or if the Applicable Procedures so require, an Opinion of Counsel in form reasonably acceptable to the Issuer and the Registrar to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Private Placement Legend are no longer required in order to maintain compliance with the Securities Act.
Upon satisfaction of the conditions of any of the subparagraphs in this Section 2.06(d)(2), the Trustee will cancel the Definitive Notes and increase or cause to be increased the aggregate principal amount of the Unrestricted Global Note.
(3)Unrestricted Definitive Notes to Beneficial Interests in Unrestricted Global Notes. A Holder of an Unrestricted Definitive Note may exchange such Note for a beneficial interest in an Unrestricted Global Note or transfer such Definitive Notes to a Person who takes delivery thereof in the form of a beneficial interest in an Unrestricted Global Note at any time. Upon receipt of a request for such an exchange or transfer, the Trustee will cancel the applicable Unrestricted Definitive Note and increase or cause to be increased the aggregate principal amount of one of the Unrestricted Global Notes.
If any such exchange or transfer from a Definitive Note to a beneficial interest is effected pursuant to subparagraphs (2)(A) or (3) above at a time when an Unrestricted Global Note has not yet been issued, the Issuer will issue and, upon receipt of an Authentication Order in accordance with Section 2.02 hereof, the Trustee will authenticate one or more Unrestricted Global Notes in an aggregate principal amount equal to the principal amount of Definitive Notes so transferred.
(e)Transfer and Exchange of Definitive Notes for Definitive Notes. Upon request by a Holder of Definitive Notes and such Holder’s compliance with the provisions of this Section 2.06(e), the Registrar will register the transfer or exchange of Definitive Notes. Prior to such registration of transfer or exchange, the requesting Holder must present or surrender to the Registrar the Definitive Notes duly endorsed or accompanied by a written instruction of transfer in form satisfactory to the Registrar duly executed by such Holder or by its attorney, duly authorized in writing. In addition, the requesting Holder must provide any additional certifications, documents and information, as applicable, required pursuant to the following provisions of this Section 2.06(e).
(1)Restricted Definitive Notes to Restricted Definitive Notes. Any Restricted Definitive Note may be transferred to and registered in the name of Persons who take delivery thereof in the form of a Restricted Definitive Note if the Registrar receives the following:
(A)if the transfer will be made pursuant to Rule 144A, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications in item (1) thereof;
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(B)if the transfer will be made pursuant to Rule 903 or Rule 904, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications in item (2) thereof; and
(C)if the transfer will be made pursuant to any other exemption from the registration requirements of the Securities Act, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications, certificates and Opinion of Counsel required by item (3) thereof, if applicable.
(2)Restricted Definitive Notes to Unrestricted Definitive Notes. Any Restricted Definitive Note may be exchanged by the Holder thereof for an Unrestricted Definitive Note or transferred to a Person or Persons who take delivery thereof in the form of an Unrestricted Definitive Note if:
(A)the Registrar receives the following:
(i)if the Holder of such Restricted Definitive Notes proposes to exchange such Notes for an Unrestricted Definitive Note, a certificate from such Holder in the form of Exhibit C hereto, including the certifications in item (1)(d) thereof; or
(ii)if the Holder of such Restricted Definitive Notes proposes to transfer such Notes to a Person who shall take delivery thereof in the form of an Unrestricted Definitive Note, a certificate from such Holder in the form of Exhibit B hereto, including the certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (A), if the Issuer or the Registrar so requests, an Opinion of Counsel in form reasonably acceptable to the Issuer and the Registrar to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Private Placement Legend are no longer required in order to maintain compliance with the Securities Act.
(3)Unrestricted Definitive Notes to Unrestricted Definitive Notes. A Holder of Unrestricted Definitive Notes may transfer such Notes to a Person who takes delivery thereof in the form of an Unrestricted Definitive Note. Upon receipt of a request to register such a transfer, the Registrar shall register the Unrestricted Definitive Notes pursuant to the instructions from the Holder thereof.
(f)Legends. The following legends will appear on the face of all Global Notes and Definitive Notes issued under this Indenture unless specifically stated otherwise in the applicable provisions of this Indenture.
(1)Private Placement Legend. Each Global Note and each Definitive Note (and all Notes issued in exchange therefor or substitution thereof) shall bear the legend in substantially the following form:
“THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION.
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THE HOLDER OF THIS SECURITY, BY ITS ACCEPTANCE HEREOF, AGREES ON ITS OWN BEHALF AND ON BEHALF OF ANY INVESTOR ACCOUNT FOR WHICH IT HAS PURCHASED SECURITIES, TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE “RESALE RESTRICTION TERMINATION DATE”) THAT IS [IN THE CASE OF RULE 144A NOTES: ONE YEAR AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF, THE ORIGINAL ISSUE DATE OF THE ISSUANCE OF ANY ADDITIONAL NOTES AND THE LAST DATE ON WHICH THE ISSUER OR ANY AFFILIATE OF THE ISSUER WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY),] [IN THE CASE OF REGULATION S NOTES: 40 DAYS AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF, THE ORIGINAL ISSUE DATE OF THE ISSUANCE OF ANY ADDITIONAL NOTES AND THE DATE ON WHICH THIS SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY) WAS FIRST OFFERED TO PERSONS OTHER THAN DISTRIBUTORS (AS DEFINED IN RULE 902 OF REGULATION S) IN RELIANCE ON REGULATION S], ONLY (A) TO THE COMPANY OR ANY SUBSIDIARY THEREOF, (B) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT (“RULE 144A”), TO A PERSON IT REASONABLY BELIEVES IS A “QUALIFIED INSTITUTIONAL BUYER” AS DEFINED IN RULE 144A THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES TO NON-U.S. PERSONS THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT, (E) TO AN INSTITUTIONAL “ACCREDITED INVESTOR” WITHIN THE MEANING OF RULE 501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT THAT IS NOT A QUALIFIED INSTITUTIONAL BUYER AND THAT IS PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF ANOTHER INSTITUTIONAL ACCREDITED INVESTOR, IN EACH CASE IN A MINIMUM PRINCIPAL AMOUNT OF SECURITIES OR (F) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE COMPANY’S AND THE TRUSTEE’S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSES (D), (E) OR (F) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/ OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE.
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[IN THE CASE OF REGULATION S NOTES: BY ITS ACQUISITION HEREOF, THE HOLDER HEREOF REPRESENTS THAT IT IS NOT A U.S. PERSON NOR IS IT PURCHASING FOR THE ACCOUNT OF A U.S. PERSON AND IS ACQUIRING THIS SECURITY IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH REGULATION S UNDER THE SECURITIES ACT.]”
(2)Global Note Legend. Each Global Note will bear a legend in substantially the following form:
“THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (1) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO SECTION 2.06 OF THE INDENTURE, (2) THIS GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE, (3) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 2.11 OF THE INDENTURE AND (4) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE ISSUER.
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) (“DTC”), TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.”
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(3)ERISA Legend. Each Global Note will bear a legend in substantially the following form:
“BY ITS ACQUISITION OF THIS SECURITY (OR ANY INTEREST HEREIN), THE HOLDER THEREOF WILL BE DEEMED TO HAVE REPRESENTED AND WARRANTED THAT EITHER (1) NO PORTION OF THE ASSETS USED BY SUCH HOLDER TO ACQUIRE OR HOLD THIS SECURITY CONSTITUTES THE ASSETS OF (A) AN “EMPLOYEE BENEFIT PLAN” WITHIN THE MEANING OF SECTION 3(3) OF THE U.S. EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED (“ERISA”) THAT IS SUBJECT TO TITLE I OF ERISA, (B) A PLAN, INDIVIDUAL RETIREMENT ACCOUNT OR OTHER ARRANGEMENT THAT IS SUBJECT TO SECTION 4975 OF THE U.S. INTERNAL REVENUE CODE OR 1986, AS AMENDED (THE “CODE”) OR PROVISIONS UNDER ANY OTHER APPLICABLE FEDERAL, STATE, LOCAL, NON-U.S. OR OTHER LAWS OR REGULATIONS THAT ARE SIMILAR TO SUCH PROVISIONS OF ERISA OR THE CODE (“SIMILAR LAWS”), OR (C) OF AN ENTITY WHOSE UNDERLYING ASSETS ARE CONSIDERED TO INCLUDE “PLAN ASSETS” OF ANY OF THE FOREGOING DESCRIBED IN CLAUSES (A) AND (B), OR (2) THE ACQUISITION AND HOLDING OF THIS SECURITY (OR ANY INTEREST HEREIN) WILL NOT CONSTITUTE A NON-EXEMPT PROHIBITED TRANSACTION UNDER SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE OR A SIMILAR VIOLATION UNDER ANY APPLICABLE SIMILAR LAWS.”
(g)Cancellation and/or Adjustment of Global Notes. At such time as all beneficial interests in a particular Global Note have been exchanged for Definitive Notes or a particular Global Note has been redeemed, repurchased or canceled in whole and not in part, each such Global Note will be returned to or retained and canceled by the Trustee in accordance with Section 2.11 hereof. At any time prior to such cancellation, if any beneficial interest in a Global Note is exchanged for or transferred to a Person who will take delivery thereof in the form of a beneficial interest in another Global Note or for Definitive Notes, the principal amount of Notes represented by such Global Note will be reduced accordingly and an endorsement will be made on such Global Note by the Trustee or by the Depositary at the direction of the Trustee to reflect such reduction; and if the beneficial interest is being exchanged for or transferred to a Person who will take delivery thereof in the form of a beneficial interest in another Global Note, such other Global Note will be increased accordingly and an endorsement will be made on such Global Note by the Trustee or by the Depositary at the direction of the Trustee to reflect such increase.
(h)General Provisions Relating to Transfers and Exchanges.
(1)To permit registrations of transfers and exchanges, the Issuer will execute and the Trustee will authenticate Global Notes and Definitive Notes upon receipt of an Authentication Order in accordance with Section 2.02 hereof or at the Registrar’s request.
(2)No service charge will be made to a Holder of a beneficial interest in a Global Note or to a Holder of a Definitive Note for any registration of transfer or exchange, but the Issuer may require payment of a sum sufficient to cover any transfer tax or similar governmental charge payable in connection therewith (other than any such transfer taxes or similar governmental charge payable upon exchange or transfer pursuant to Sections 2.10, 3.06, 3.11, 4.08, 4.12 and 9.04 hereof).
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(3)The Registrar will not be required to register the transfer of or exchange of any Note selected for redemption in whole or in part, except the unredeemed portion of any Note being redeemed in part.
(4)All Global Notes and Definitive Notes issued upon any registration of transfer or exchange of Global Notes or Definitive Notes will be the valid obligations of the Issuer and the Guarantors, evidencing the same debt, and entitled to the same benefits under this Indenture, as the Global Notes or Definitive Notes surrendered upon such registration of transfer or exchange.
(5)Neither the Registrar nor the Issuer will be required:
(A)to issue, to register the transfer of or to exchange any Notes during a period beginning at the opening of business 15 days before the day of any selection of Notes for redemption under Section 3.02 hereof and ending at the close of business on the day of selection;
(B)to register the transfer of or to exchange any Note selected for redemption in whole or in part, except the unredeemed portion of any Note being redeemed in part; or
(C)to register the transfer of or to exchange a Note between a record date and the next succeeding interest payment date.
(6)Prior to due presentment for the registration of a transfer of any Note, the Trustee, any Agent and the Issuer may deem and treat the Person in whose name any Note is registered as the absolute owner of such Note for the purpose of receiving payment of principal of and interest on such Notes and for all other purposes, and none of the Trustee, any Agent or the Issuer shall be affected by notice to the contrary.
(7)The Trustee will authenticate Global Notes and Definitive Notes in accordance with the provisions of Section 2.02 hereof.
(8)All certifications, certificates and Opinions of Counsel required to be submitted to the Registrar pursuant to this Section 2.06 to effect a registration of transfer or exchange may be submitted by facsimile.
(9)Neither the Trustee nor the Registrar shall have any obligation or duty to monitor, determine or inquire as to compliance with any restrictions on transfer imposed under this Indenture or under applicable law with respect to any transfer of any interest in any Note (including any transfers between or among DTC participants, members or beneficial owners in any Global Note) other than to require delivery of such certificates and other documentation or evidence as are expressly required by, and to do so if and when expressly required by, the terms of this Indenture, and to examine the same to determine substantial compliance as to form with the express requirements hereof.
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Section 2.07.Replacement Notes.
If any mutilated Note is surrendered to the Trustee or the Issuer and the Trustee receives evidence to its satisfaction of the destruction, loss or theft of any Note, the Issuer will issue and the Trustee, upon receipt of an Authentication Order, will authenticate a replacement Note if the Trustee’s requirements are met. If required by the Trustee or the Issuer, an indemnity bond must be supplied by the Holder that is sufficient in the judgment of the Trustee and the Issuer to protect the Issuer, the Trustee, any Agent and any authenticating agent from any loss that any of them may suffer if a Note is replaced. The Issuer may charge for its expenses in replacing a Note, including reasonable fees and expenses of the Trustee.
Every replacement Note is an obligation of the Issuer and will be entitled to all of the benefits of this Indenture equally and proportionately with all other Notes duly issued hereunder.
Section 2.08.Outstanding Notes.
The Notes outstanding at any time are all the Notes authenticated by the Trustee except for those canceled by it, those delivered to it for cancellation, those reductions in the interest in a Global Note effected by the Trustee in accordance with the provisions hereof, and those described in this Section 2.08 as not outstanding. Except as set forth in Section 2.09 hereof, a Note does not cease to be outstanding because the Issuer or an Affiliate of the Issuer holds the Note; however, Notes held by the Issuer or a Subsidiary of the Issuer shall not be deemed to be outstanding for purposes of Section 3.07 hereof.
If a Note is replaced pursuant to Section 2.07 hereof, it ceases to be outstanding unless the Trustee receives proof satisfactory to it that the replaced Note is held by a protected purchaser.
If the principal amount of any Note is considered paid under Section 4.01 hereof, it ceases to be outstanding and interest on it ceases to accrue.
If the Paying Agent (other than the Issuer, a Subsidiary or an Affiliate of any thereof) holds, on a Redemption Date or maturity date, money sufficient to pay Notes payable on that date, then on and after that date such Notes will be deemed to be no longer outstanding and will cease to accrue interest.
Section 2.09.Treasury Notes.
In determining whether the Holders of the required principal amount of Notes have concurred in any direction, waiver or consent, Notes owned by the Issuer, any Guarantor or by any Affiliate of the Issuer or any Guarantor, will be considered as though not outstanding, except that for the purposes of determining whether the Trustee will be protected in relying on any such direction, waiver or consent, only Notes that the Trustee knows are so owned will be so disregarded.
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Section 2.10.Temporary Notes.
Until certificates representing Notes are ready for delivery, the Issuer may prepare and the Trustee, upon receipt of an Authentication Order, will authenticate temporary Notes. Temporary Notes will be substantially in the form of certificated Notes but may have variations that the Issuer considers appropriate for temporary Notes and as may be reasonably acceptable to the Trustee. Without unreasonable delay, the Issuer will prepare and the Trustee will authenticate definitive Notes in exchange for temporary Notes.
Holders of temporary Notes will be entitled to all of the benefits of this Indenture.
Section 2.11.Cancellation.
The Issuer at any time may deliver Notes to the Trustee for cancellation. The Registrar and Paying Agent will forward to the Trustee any Notes surrendered to them for registration of transfer, exchange or payment. The Trustee and no one else will cancel all Notes surrendered for registration of transfer, exchange, payment, replacement or cancellation and will destroy canceled Notes (subject to the record retention requirement of the Exchange Act). Upon request, the Trustee will provide certification of the cancellation of all cancelled Notes to the Issuer. The Issuer may not issue new Notes to replace Notes that it has paid or that have been delivered to the Trustee for cancellation.
Section 2.12.Defaulted Interest.
If the Issuer defaults in a payment of interest on the Notes, they will pay the defaulted interest in any lawful manner plus, to the extent lawful, interest payable on the defaulted interest, to the Persons who are Holders of Notes on a subsequent special record date, in each case at the rate provided in the Notes and in Section 4.01 hereof. The Issuer will notify the Trustee in writing of the amount of defaulted interest proposed to be paid on each Note and the date of the proposed payment. The Issuer will fix or cause to be fixed each such special record date and payment date; provided that no such special record date may be less than 10 days prior to the related payment date for such defaulted interest. At least 15 days before the special record date, the Issuer (or, upon the written request of the Issuer, the Trustee in the name and at the expense of the Issuer) will mail or cause to be mailed to Holders of Notes a notice that states the special record date, the related payment date and the amount of such interest to be paid.
Section 2.13.CUSIP Numbers.
The Issuer in issuing the Notes may use “CUSIP” numbers (if then generally in use), and, if so, the Trustee shall use “CUSIP” numbers in any notice issued under this Indenture, including but not limited to notices of redemption, as a convenience to Holders; provided that any such notice may state that no representation is made as to the correctness of such numbers either as printed on the Notes or as contained in any notice of redemption or other notice and that reliance may be placed only on the other elements of identification printed on the Notes, and any such redemption or effect of other such notice shall not be affected by any defect in or omission of such numbers. The Issuer will promptly notify the Trustee in writing of any change in the “CUSIP” numbers.
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Section 2.14.Issuance of Additional Notes.
After the date of this Indenture, the Issuer shall be entitled to issue Additional Notes under this Indenture.
With respect to any Additional Notes, the Issuer shall set forth in a resolution of the Board of Directors and an Officer’s Certificate, a copy of each which shall be delivered to the Trustee, the following information:
(1)the aggregate principal amount of such Additional Notes to be authenticated and delivered pursuant to this Indenture; and
(2)the issue price, the issue date and the CUSIP number of such Additional Notes; provided, however, that no Additional Notes may be issued unless such Additional Notes are issued pursuant to a “qualified reopening” of the original issuance of notes, are otherwise treated as part of the same “issue” of debt instruments as the original issuance of Notes or are issued with less than an “original issue discount” within the meaning of Section 1273 of the Internal Revenue Code of 1986, as amended.
Section 2.15.Global Securities.
None of the Trustee, any Agent or the Collateral Trustee shall have any responsibility for any actions taken or not taken by the Depositary. Neither the Trustee nor the Registrar shall have any responsibility or obligation to any beneficial owner of a Global Note, a member of, or a participant in, DTC or other Person with respect to the accuracy of the records of DTC or its nominee or of any participant or member thereof, with respect to any ownership interest in the Notes or with respect to the delivery to any participant, member, beneficial owner or other Person (other than DTC) of any notice (including any notice of redemption or purchase) or the payment of any amount or delivery of any Notes (or other security or property) under or with respect to such Notes. All notices and communications to be given to the Holders and all payments to be made to Holders in respect of the Notes shall be given or made only to or upon the order of the registered Holders (which shall be DTC or its nominee in the case of a Global Note). The rights of beneficial owners in any Global Note shall be exercised only through DTC subject to the applicable rules and procedures of DTC. The Trustee may rely and shall be fully protected in relying upon information furnished by DTC with respect to its members, participants and any beneficial owners.
Article 3

REDEMPTION AND PREPAYMENT
Section 3.01.Notice of Redemption by the Issuer.
If the Issuer elects to redeem Notes pursuant to the optional redemption provisions of Section 3.07 hereof, the Issuer must furnish to the Trustee, at least 10 days but not more than 60 days before a Redemption Date, an Officer’s Certificate setting forth:
(1)the clause of this Indenture pursuant to which the redemption shall occur;
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(2)the Redemption Date;
(3)the principal amount of Notes to be redeemed;
(4)the redemption price; provided, that if the redemption price is not known at the time such notice is to be given, the actual redemption price, calculated as described in the terms of the Notes to be redeemed, will be set forth in an Officer’s Certificate of the Issuer delivered to the Trustee no later than two Business Days prior to the Redemption Date; and
(5)if applicable, any conditions to such redemption.
Any optional redemption referenced in such Officer’s Certificate may be cancelled by the Issuer at any time prior to notice of redemption being sent to any Holder and thereafter shall be null and void.
Section 3.02.Selection of Notes to Be Redeemed.
If less than all of the Notes are to be redeemed at any time, and such Notes are not Global Notes, the Trustee will select Notes for redemption on a pro rata basis (or, in the case of Global Notes, the Trustee will select Notes for redemption based on DTC’s method that most nearly approximates a pro rata selection), by lot or such other method as the Trustee deems appropriate and fair (or such other method as DTC may require), unless otherwise required by law or applicable stock exchange or depositary requirements.
In the event of partial redemption by lot, the particular Notes to be redeemed will be selected, unless otherwise provided herein, not less than 10 nor more than 60 days prior to the redemption date by the Trustee from the outstanding Notes not previously called for redemption.
The Trustee will promptly notify the Issuer in writing of the Notes selected for redemption and, in the case of any Note selected for partial redemption, the principal amount thereof to be redeemed. Notes and portions of Notes selected will be in minimum denominations of $2,000 or integral multiples of $1,000 in excess thereof, except that if all of the Notes of a Holder are to be redeemed, the entire outstanding amount of Notes held by such Holder, even if not $2,000 or a multiple of $1,000 in excess thereof, shall be redeemed. Except as provided in the preceding sentence, provisions of this Indenture that apply to Notes called for redemption also apply to portions of Notes called for redemption.
Section 3.03.Notice of Redemption.
Subject to the provisions of Section 3.11 hereof, at least 10 days but not more than 60 days before a Redemption Date, the Issuer will deliver a notice of redemption to each Holder whose Notes are to be redeemed (with a copy to the Trustee) at its registered address, except that redemption notices may be delivered more than 60 days prior to a Redemption Date if the notice is issued in connection with a defeasance of the Notes or a satisfaction and discharge of this Indenture pursuant to Articles 8 or 11 hereof.
The notice will identify the Notes to be redeemed and will state:
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(1)the Redemption Date;
(2)the redemption price;
(3)if any Note is being redeemed in part, the portion of the principal amount of such Note to be redeemed and that, after the Redemption Date upon surrender of such Note, a new Note or Notes in principal amount equal to the unredeemed portion will be issued upon cancellation of the original Note;
(4)the name and address of the Paying Agent;
(5)that Notes called for redemption must be surrendered to the Paying Agent to collect the redemption price;
(6)that, unless the Issuer defaults in making such redemption payment, interest on Notes called for redemption ceases to accrue on and after the Redemption Date;
(7)the paragraph of the Notes and/or Section of this Indenture pursuant to which the Notes called for redemption are being redeemed;
(8)if applicable, any condition to such redemption; and
(9)that no representation is made as to the correctness or accuracy of the CUSIP number, if any, listed in such notice or printed on the Notes.
At the Issuer’s request, the Trustee will give the notice of redemption in the Issuer’s name and at its expense; provided, however, that the Issuer has delivered to the Trustee, at least three Business Days (or if any Notes to be redeemed are in definitive form, five Business Days) prior to the date on which the Issuer instructs the Trustee to give the notice (or such shorter period as the Trustee may agree), an Officer’s Certificate requesting that the Trustee give such notice and setting forth the information to be stated in such notice as provided in the preceding paragraph.
Section 3.04.Conditional Notices of Redemption.
Notice of any redemption of the Notes may, at the Issuer’s discretion, be given prior to the completion of a transaction (including an Equity Offering, an incurrence of Indebtedness, a Change of Control or other transaction), and any redemption notice may, at the Issuer’s discretion, be subject to one or more conditions precedent, including, but not limited to, completion of a related transaction. If such redemption or purchase is so subject to satisfaction of one or more conditions precedent, such notice shall describe each such condition and, if applicable, shall state that, in the Issuer’s discretion, the Redemption Date may be delayed until such time (including more than 60 days after the date the notice of redemption was mailed or delivered, including by electronic transmission) as any or all such conditions shall be satisfied, or such redemption or purchase may not occur and such notice may be rescinded in the event that any or all such conditions shall not have been satisfied by the Redemption Date, or by the Redemption Date as so delayed. In addition, the Issuer may provide in such notice that payment of the redemption price and performance of the Issuer’s obligations with respect to such redemption may be performed by another Person.
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Section 3.05.Deposit of Redemption or Purchase Price.
On or prior to 11:00 a.m. Eastern Time on the redemption or purchase date, the Issuer will deposit with the Trustee or with the Paying Agent money sufficient to pay the redemption or purchase price of and accrued interest and Special Interest, if any, on all Notes to be redeemed or purchased on that date. The Trustee or the Paying Agent will promptly return to the Issuer any money deposited with the Trustee or the Paying Agent by the Issuer in excess of the amounts necessary to pay the redemption or purchase price of, and accrued interest and Special Interest, if any, on, all Notes to be redeemed or purchased.
If the Issuer complies with the provisions of the preceding paragraph, on and after the redemption or purchase date, interest will cease to accrue on the Notes or the portions of Notes called for redemption or purchase. If a Note is redeemed or purchased on or after an interest record date but on or prior to the related interest payment date, then any accrued and unpaid interest shall be paid to the Person in whose name such Note was registered at the close of business on such record date in accordance with the Applicable Procedures of DTC. If any Note called for redemption or purchase is not so paid upon surrender for redemption or purchase because of the failure of the Issuer to comply with the preceding paragraph, interest shall be paid on the unpaid principal, from the redemption or purchase date until such principal is paid, and to the extent lawful on any interest not paid on such unpaid principal, in each case at the rate provided in the Notes and in Section 4.01 hereof.
Section 3.06.Notes Redeemed or Purchased in Part.
Upon surrender of a Note that is redeemed or purchased in part, the Issuer will issue and, upon receipt of an Authentication Order, the Trustee will authenticate for the Holder at the expense of the Issuer a new Note equal in principal amount to the unredeemed or unpurchased portion of the Note surrendered.
Section 3.07.Optional Redemption.
(a)At any time prior to October 15, 2026 (the “First Call Date”), the Issuer may redeem the Notes in whole or in part, at its option, upon notice in accordance with Section 3.03 hereof, at a redemption price (expressed as a percentage of the principal amount of the Notes to be redeemed) equal to 100.0% plus the Applicable Premium as of, and accrued and unpaid interest, if any, to, but excluding, the date of redemption (the “Redemption Date”), subject to the rights of Holders on the relevant record date to receive interest due on the relevant interest payment date.
(b)At any time and from time to time prior to the First Call Date, the Issuer may, on one or more occasions, upon notice in accordance with Section 3.03 hereof, redeem up to 40.0% of the original aggregate principal amount of Notes issued under this Indenture on the Issue Date (together with any Additional Notes) at a redemption price (expressed as a percentage of the principal amount of the Notes to be redeemed) equal to 107.875%, plus accrued interest and Additional Amounts, if any, to, but excluding, the Redemption Date, with the net after-tax cash proceeds received by the Issuer of one or more Equity Offerings of the Issuer; provided that not less than 50.0% of the aggregate principal amount of the then-outstanding Notes issued under this Indenture remains outstanding immediately after the occurrence of each such redemption (including Additional Notes but excluding Notes held by the Issuer or any of its Restricted Subsidiaries), unless all such Notes are redeemed substantially concurrently; provided, further, that each such redemption occurs not later than 180 days after the date of closing of the related Equity Offering. The Trustee shall select the Notes to be purchased in the manner described under Sections 3.01 through 3.06.
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(c)Except pursuant to clauses (a) and (b) of this Section 3.07 or pursuant to Section 3.08, the Notes will not be redeemable at the Issuer’s option prior to the First Call Date.
(d)At any time and from time to time on or after the First Call Date, the Issuer may redeem the Notes, in whole or in part, upon notice in accordance with Section 3.03 hereof, at the redemption prices (expressed as percentages of principal amount of the Notes to be redeemed) set forth in the table below, plus accrued interest and Additional Amounts thereon, if any, to, but excluding, the applicable Redemption Date, if redeemed during the periods indicated in the table below:
Period Percentage
October 15, 2026 through October 14, 2027………...……...
 103.938%
October 15, 2027 through October 14, 2028……..….……... 101.969%
October 15, 2028 and thereafter………………….…………. 100.000%

(e)Notwithstanding the foregoing, in connection with any tender offer for the Notes, including a Change of Control Offer or an Asset Disposition Offer, if Holders of not less than 90% in aggregate principal amount of the outstanding Notes validly tender and do not validly withdraw such Notes in such tender offer and the Issuer, or any third party making such tender offer in lieu of the Issuer, purchases all of the Notes validly tendered and not validly withdrawn by such Holders, the Issuer or such third party shall have the right upon notice in accordance with Section 3.03 hereof, given not more than 30 days following such purchase date, to redeem all Notes that remain outstanding following such purchase at a redemption price equal to the price offered to each other Holder (excluding any early tender or incentive fee) in such tender offer plus, to the extent not included in the tender offer payment, accrued and unpaid interest (including Special Interest, if any), and Additional Amounts thereon, if any, to, but excluding, the date of such redemption.
(f)Any redemption pursuant to this Section 3.07 is subject to the right of the Holder of record on the record date to receive interest due on an interest payment date that is on or before the applicable Redemption Date.
(g)Any redemption pursuant to this Section 3.07 shall be made pursuant to the provisions of Sections 3.01 through 3.06 hereof.
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Section 3.08.Tax Redemption.
(a)If as a result of any change in or amendment to the laws (or any rules or regulations thereunder) of a Taxing Jurisdiction, or any amendment to or change in an official interpretation, administration or application of such laws, rules or regulations, or any treaties or related agreements to which the Taxing Jurisdiction is a party (including a holding by a court of competent jurisdiction), which change or amendment becomes effective or, in the case of a change in official position, is announced on or after the Issue Date (or, if the Taxing Jurisdiction became a Taxing Jurisdiction on a later date, such later date), (i) the Issuer or any successor to the Issuer has or will become obligated to pay Additional Amounts or (ii) the Guarantors or any successors to the Guarantors have or will become obligated to pay Additional Amounts, in each case, in excess of the Additional Amounts, if any, that would have been payable on the date that the relevant Taxing Jurisdiction became a Taxing Jurisdiction, the Issuer or any successor to the Issuer may, at its option, redeem all, but not less than all, of the Notes, at a redemption price equal to 100.0% of their principal amount, together with accrued and unpaid interest to, but excluding, the date fixed for redemption, upon notice in accordance with Section 3.03 hereof. No notice of such redemption may be given earlier than 60 days prior to the earliest date on which the Issuer, the Guarantors or successors to the foregoing would, but for such redemption, become obligated to pay any such Additional Amounts were payment then due. For the avoidance of doubt, the Issuer or any successor to the Issuer shall not have the right to so redeem the Notes unless (a) they are or will become obligated to pay such Additional Amounts or (b) the Guarantors or any successors to the Guarantors are or will become obligated to pay such Additional Amounts. Notwithstanding the foregoing, the Issuer or any such successors shall not have the right to so redeem the Notes unless they have taken reasonable measures (including without limitation, using reasonable measures to cause payment on the Notes to be made through a Paying Agent in a different jurisdiction or by the Issuer, its successors or another Subsidiary of the Issuer) to avoid the obligation to pay such Additional Amounts. For the avoidance of doubt, reasonable measures do not include changing the jurisdiction of incorporation of the Issuer or any successor of the Issuer.
(b)In the event that the Issuer or any successor to the Issuer elects to so redeem the Notes, it will deliver to the Trustee: (1) an Officer’s Certificate, stating that the Issuer or any successor to the Issuer is entitled to redeem the Notes pursuant to this Section 3.08 and setting forth a statement of facts showing that the condition or conditions precedent to the right of the Issuer or any successor to the Issuer to so redeem have occurred or been satisfied; and (2) an Opinion of Counsel to the effect that (i) the Issuer or any successor to the Issuer has or will become obligated to pay Additional Amounts or the Guarantors or any successors to the Guarantors are or will become obligated to pay Additional Amounts and that such obligation cannot be avoided by taking reasonable measures to avoid such obligation (including, without limitation, by causing payment on the Notes to be made through a Paying Agent in a different jurisdiction or by a Subsidiary of the Issuer), (ii) such obligation is the result of a change in or amendment to the laws (or any rules or regulations thereunder) of a Taxing Jurisdiction, as described above, and (iii) that all governmental requirements necessary for the Issuer or any successor to the Issuer to effect the redemption have been complied with.
Section 3.09.Mandatory Redemption.
The Issuer is not required to make mandatory redemption or sinking fund payments with respect to the Notes; provided, however, that under certain circumstances, the Issuer may be required to offer to purchase Notes under Sections 4.08 and 4.12.
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Section 3.10.[Reserved].
Section 3.11.Offer to Purchase by Application of Excess Proceeds.
In the event that, pursuant to Section 4.08 hereof, the Issuer is required to commence an Asset Disposition Offer, it will follow the procedures specified below.
The Asset Disposition Offer shall be made to all Holders of Notes and all holders of Other Offer Notes; provided that the percentage of such Excess Proceeds allocated and offered to the Notes in such Asset Disposition Offer is at least equal to the percentage of the aggregate principal amount of all Priority Lien Debt represented at such time by the Notes. The Asset Disposition Offer will remain open for a period of at least 20 Business Days following its commencement and not more than 30 Business Days, except to the extent that a longer period is required by applicable law (the “Offer Period”). No later than five (5) Business Days after the termination of the Offer Period (the “Purchase Date”), the Issuer will apply all Excess Proceeds (the “Offer Amount”) to the purchase of Notes and Other Offer Notes (on a pro rata basis, if applicable) or, if less than the Offer Amount has been tendered, all Notes and other Indebtedness tendered in response to the Asset Disposition Offer. Payment for any Notes so purchased will be made in the same manner as interest payments are made.
If the Purchase Date is on or after an interest record date and on or before the related interest payment date, any accrued and unpaid interest and Special Interest, if any, will be paid to the Person in whose name a Note is registered at the close of business on such record date, and no additional interest will be payable to Holders of Notes who tender Notes pursuant to the Asset Disposition Offer.
Upon the commencement of an Asset Disposition Offer, the Issuer will deliver a notice to the Trustee and each of the Holders of Notes. The notice will contain all instructions and materials necessary to enable such Holders to tender Notes pursuant to the Asset Disposition Offer. The notice, which will govern the terms of the Asset Disposition Offer, will specify:
(1)that the Asset Disposition Offer is being made pursuant to this Section 3.11 and Section 4.08 hereof and the length of time the Asset Disposition Offer will remain open;
(2)the Offer Amount, the purchase price and the Purchase Date;
(3)that any Note not tendered or accepted for payment will continue to accrue interest and Special Interest, if any;
(4)that, unless the Issuer defaults in making such payment, any Note accepted for payment pursuant to the Asset Disposition Offer will cease to accrue interest and Special Interest, if any, after the Purchase Date;
(5)that Holders of Notes electing to have a Note purchased pursuant to an Asset Disposition Offer may elect to have Notes purchased in integral multiples of $1,000 only;
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(6)that Holders of Notes electing to have Notes purchased pursuant to any Asset Disposition Offer will be required to surrender the Note, with the form entitled “Option of Holder to Elect Purchase” on the reverse of the Note completed, or transfer by book-entry transfer, to the Issuer, a Depositary, if appointed by the Issuer, or a Paying Agent at the address specified in the notice at least three days before the Purchase Date;
(7)that Holders of Notes will be entitled to withdraw their election if the Issuer, the Depositary or the Paying Agent, as the case may be, receives, not later than the expiration of the Offer Period, a telegram, telex, facsimile transmission or letter setting forth the name of the Holder, the principal amount of the Note the Holder delivered for purchase and a statement that such Holder is withdrawing his election to have such Note purchased;
(8)that, if the aggregate principal amount of Notes and other Priority Lien Debt surrendered by holders thereof exceeds the Offer Amount, the Issuer will select the Notes and other Priority Lien Debt to be purchased on a pro rata basis based on the principal amount of Notes and such other Priority Lien Debt surrendered (with such adjustments as may be deemed appropriate by the Issuer so that only Notes in minimum denominations of $2,000, and integral multiples of $1,000 in excess thereof, will be purchased); and
(9)that Holders of Notes whose Notes were purchased only in part will be issued new Notes equal in principal amount to the unpurchased portion of the Notes surrendered (or transferred by book-entry transfer).
On or before the Purchase Date, the Issuer will, to the extent lawful, accept for payment, on a pro rata basis to the extent necessary, the Offer Amount of Notes or portions thereof tendered pursuant to the Asset Disposition Offer, or if less than the Offer Amount has been tendered, all Notes tendered, and will deliver or cause to be delivered to the Trustee the Notes properly accepted together with an Officer’s Certificate stating that such Notes or portions thereof were accepted for payment by the Issuer in accordance with the terms of this Section 3.11. The Issuer, the Depositary or the Paying Agent, as the case may be, will promptly (but in any case not later than five (5) days after the Purchase Date) mail or deliver to each tendering Holder an amount equal to the purchase price of the Notes tendered by such Holder and accepted by the Issuer for purchase, and the Issuer will promptly issue a new Note, and the Trustee, upon written request from the Issuer, will authenticate and mail or deliver (or cause to be transferred by book entry) such new Note to such Holder, in a principal amount equal to any unpurchased portion of the Note surrendered. Any Note not so accepted shall be promptly mailed or delivered by the Issuer to the Holder thereof. The Issuer will publicly announce the results of the Asset Disposition Offer on the Purchase Date.
Other than as specifically provided in this Section 3.11, any purchase pursuant to this Section 3.11 shall be made pursuant to the provisions of Sections 3.01 through 3.06 hereof.
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Article 4

COVENANTS
Section 4.01.Payment of Notes.
The Issuer will pay or cause to be paid the principal of, premium, if any, and interest and Special Interest, if any, on, the Notes on the dates and in the manner provided in the Notes. Principal, premium, if any, and interest and Special Interest, if any, will be considered paid on the date due if the Paying Agent, if other than the Issuer or a Subsidiary thereof, holds as of 11:00 a.m. Eastern Time on the due date money deposited by the Issuer in immediately available funds and designated for and sufficient to pay all principal, premium, if any, and interest then due.
All references in this Indenture to “interest” shall be deemed to include Special Interest, if applicable.
Section 4.02.Maintenance of Office or Agency.
The Issuer will maintain in the contiguous United States, an office or agency (which may be an office of the Trustee or an affiliate of the Trustee, Registrar or co-registrar) where Notes may be surrendered for registration of transfer or for exchange and where notices and demands to or upon the Issuer in respect of the Notes and this Indenture may be served. The Issuer will give prompt written notice to the Trustee of the location, and any change in the location, of such office or agency. If at any time the Issuer fails to maintain any such required office or agency or fails to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office of the Trustee; provided that no office of the Trustee shall be an office or agency of the Issuer for the purpose of service of legal process on the Issuer or any Guarantor, which service shall be made to the Process Agent in accordance with Section 13.07.
The Issuer may also from time to time designate one or more other offices or agencies where the Notes may be presented or surrendered for any or all such purposes and may from time to time rescind such designations; provided, however, that no such designation or rescission will in any manner relieve the Issuer of its obligation to maintain an office or agency in the contiguous United States for such purposes. The Issuer will give prompt written notice to the Trustee of any such designation or rescission and of any change in the location of any such other office or agency.
The Issuer hereby designates the Corporate Trust Office of the Trustee as one such office or agency of the Issuer in accordance with Section 2.03 hereof.
Section 4.03.Reports.
(a)The Issuer will deliver to the Trustee within 30 days after the Issuer files them with the SEC, copies of its annual report and the information, documents and other reports (or copies of such portions of any of the foregoing as the SEC may by rules and regulations prescribe) that the Issuer is required to file with the SEC pursuant to Sections 13 and 15(d) of the Exchange Act. Reports, information and documents filed by the Issuer with the SEC via the EDGAR system will be deemed to have been furnished to the Trustee as of the time such documents are filed via EDGAR.
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(b)At any time the Issuer is not subject to Section 13 or 15(d) of the Exchange Act, the Issuer will, so long as any of the Notes will, at such time, constitute “restricted securities” within the meaning of Rule 144(a)(3) under the Securities Act, promptly provide to the Trustee and will, upon written request, provide to any Holder, beneficial owner or prospective purchaser of such Notes the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act to facilitate the resale of such Notes pursuant to Rule 144A under the Securities Act. The Issuer will take such further action as any Holder or beneficial owner of such Notes may reasonably request to the extent from time to time required to enable such Holder or beneficial owner to sell such Notes in accordance with Rule 144A under the Securities Act, as such rule may be amended from time to time.
(c)Within 10 Business Days after any Appraisal is required to be delivered pursuant to Section 4.15 hereof, the Issuer will furnish to the Trustee a summary of each such Appraisal containing only information summarizing the results of such Appraisal (all of which will be made publicly available) and will post, or shall cause to have posted, the complete Appraisal on a private, restricted website to which Holders of Notes, prospective investors, broker-dealers and securities analysts are given access, subject to such individuals agreeing to confidentiality obligations reasonably acceptable to the Issuer for securities law purposes.
(d)Delivery of reports, information and documents to the Trustee is for informational purposes only and its receipt of such reports shall not constitute actual or constructive notice of any information contained therein or determinable from information contained therein, including the Issuer’s compliance with any of the covenants under this Indenture or the Notes (as to which the Trustee is entitled to rely exclusively on Officer’s Certificates). The Trustee will not be obligated to monitor or confirm, on a continuing basis or otherwise, the Issuer’s compliance with the covenants or with respect to matters disclosed in any reports or other documents filed with the SEC or EDGAR or any website under this Indenture, or participate in any conference calls.
Section 4.04.Compliance Certificate.
(a)The Issuer shall deliver to the Trustee, within 120 days after the end of each fiscal year, an Officer’s Certificate stating that a review of the activities of the Issuer and its Subsidiaries during the preceding fiscal year has been made under the supervision of the signing Officers with a view to determining whether the Issuer has kept, observed, performed and fulfilled its obligations under this Indenture, and further stating, as to each such Officer signing such certificate, that to the best of his or her knowledge the Issuer has kept, observed, performed and fulfilled each and every covenant contained in this Indenture and is not in default in the performance or observance of any of the terms, provisions and conditions of this Indenture (or, if a Default or Event of Default has occurred, describing all such Defaults or Events of Default of which he or she may have knowledge and what action the Issuer is taking or proposes to take with respect thereto) and that to the best of his or her knowledge no event has occurred and remains in existence by reason of which payments on account of the principal of or interest, if any, on the Notes is prohibited or if such event has occurred, a description of the event and what action the Issuer is taking or proposes to take with respect thereto.
(b)So long as any of the Notes are outstanding, the Issuer will deliver to the Trustee, forthwith upon any Officer becoming aware of any Default or Event of Default, an Officer’s Certificate specifying such Default or Event of Default and what action the Issuer is taking or proposes to take with respect thereto.
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Section 4.05.Stay, Extension and Usury Laws.
The Issuer and each of the Guarantors covenants (to the extent that it may lawfully do so) that it will not at any time insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law wherever enacted, now or at any time hereafter in force, that may affect the covenants or the performance of this Indenture; and the Issuer and each of the Guarantors (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law, and covenants that it will not, by resort to any such law, hinder, delay or impede the execution of any power herein granted to the Trustee, but will suffer and permit the execution of every such power as though no such law has been enacted.
Section 4.06.Restricted Payments.
(a)The Issuer will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly:
(i)declare or pay any dividend or make any other payment or distribution on account of the Issuer’s or any of its Restricted Subsidiaries’ Equity Interests (including, without limitation, any payment in connection with any merger or consolidation involving the Issuer or any of its Restricted Subsidiaries) or to the direct or indirect holders of the Issuer’s or any of its Restricted Subsidiaries’ Equity Interests in their capacity as such (other than (A) dividends, distributions or payments payable in Qualifying Equity Interests or in the case of preferred stock of the Issuer (to the extent applicable), an increase in the liquidation value thereof and (B) dividends, distributions or payments payable to the Issuer or a Restricted Subsidiary of the Issuer);
(ii)purchase, redeem or otherwise acquire or retire for value any Equity Interests of the Issuer;
(iii)make any payment on or with respect to, or purchase, redeem, defease or otherwise acquire or retire for value (collectively for purposes of this clause (iii), a “purchase”) any Indebtedness of the Issuer or any Guarantor that is subordinated to the Notes Obligations in right of payment or distributions from Collateral (but excluding any intercompany Indebtedness between or among the Issuer and any of its Restricted Subsidiaries), except (A) any scheduled payment of interest, (B) any repayment, repurchase, defeasance or other extinguishment of principal within two years of the Stated Maturity thereof, (C) in connection with any Permitted Refinancing Indebtedness in respect of such Indebtedness or (iv) conversion of such Indebtedness into common Equity Interests of the Issuer; or
(iv)make any Restricted Investment,
(all such payments and other actions set forth in these clauses (i) through (iv) above being collectively referred to as “Restricted Payments”), unless, at the time of and after giving effect to such Restricted Payment:
(1)no Default or Event of Default has occurred and is continuing as of such time or would result therefrom; and
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(2)such Restricted Payment, together with the aggregate amount of all other Restricted Payments made by the Issuer and its Restricted Subsidiaries since the Exit Conversion Date (excluding Restricted Payments permitted by clauses (2) through (17) of Section 4.06(b)), is less than the sum, without duplication, of:
(A)[*].
(b)The provisions of Section 4.06(a) hereof will not prohibit:
(1)the payment of any dividend or distribution or the consummation of any irrevocable redemption within 60 days after the date of declaration of the dividend or distribution or giving of the redemption notice, as the case may be, if at the date of declaration or notice, the dividend or redemption payment would have complied with the provisions of this Indenture;
(2)the making of any Restricted Payment in exchange for, or out of or with the net cash proceeds of the substantially concurrent sale (other than to a Subsidiary of the Issuer) of, Qualifying Equity Interests or from the substantially concurrent contribution of common equity capital to the Issuer; provided that the amount of any such net cash proceeds that are utilized for any such Restricted Payment will not be considered to be net proceeds of Qualifying Equity Interests for purposes of clause (a)(2)(C) of Section 4.06 and will not be considered to be Excluded Contributions;
(3)the payment of any dividend (or, in the case of any partnership or limited liability company, any similar distribution), distribution or payment by a Restricted Subsidiary of the Issuer to the holders of its Equity Interests on a pro rata basis (or in the case of the payment of any such Restricted Payment to the Issuer or a Guarantor, on at least a pro rata basis to such Issuer or Guarantor);
(4)the repurchase, redemption, defeasance or other acquisition or retirement for value of Indebtedness of the Issuer or any Guarantor that is contractually subordinated to the Notes or to the Note Guarantees with the net cash proceeds from an incurrence of Permitted Refinancing Indebtedness;
(5)the repurchase, redemption, acquisition or retirement for value of any Equity Interests of the Issuer or any Restricted Subsidiary of the Issuer held by any current or former officer, director, consultant or employee (or their estates or beneficiaries of their estates) of the Issuer or any of its Restricted Subsidiaries pursuant to any management equity plan or equity subscription agreement, stock option agreement, shareholders’ agreement or similar agreement; provided that the aggregate price paid for all such repurchased, redeemed, acquired or retired Equity Interests may not exceed [*] in any twelve-month period (except to the extent such repurchase, redemption, acquisition or retirement is in connection with the acquisition of a Permitted Business or merger, consolidation or amalgamation otherwise permitted by this Indenture and in such case the aggregate price paid by the Issuer and its Restricted Subsidiaries may not exceed [*] in connection with such acquisition of a Permitted Business or merger, consolidation or amalgamation); provided, further, that the Issuer or any of its Restricted Subsidiaries may carry over and make in subsequent twelve-month periods, in addition to the amounts permitted for such twelve-month period, up to [*] of unutilized capacity under this clause (5) attributable to the immediately preceding twelve-month period;
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(6)the repurchase of Equity Interests or other securities deemed to occur upon (A) the exercise of stock options, warrants or other securities convertible or exchangeable into Equity Interests or any other securities, to the extent such Equity Interests or other securities represent a portion of the exercise price of those stock options, warrants or other securities convertible or exchangeable into Equity Interests or any other securities or (B) the withholding of a portion of Equity Interests issued to employees and other participants under an equity compensation program of the Issuer or its Subsidiaries to cover withholding tax obligations of such persons in respect of such issuance;
(7)so long as no Default or Event of Default has occurred and is continuing, the declaration and payment of regularly scheduled or accrued dividends, distributions or payments to holders of any class or series of Disqualified Stock or subordinated Indebtedness of the Issuer or any preferred stock of any Restricted Subsidiary of the Issuer either outstanding on the Issue Date or issued on or after the Issue Date in accordance with Section 4.07;
(8)payments of cash, dividends, distributions, advances, common stock or other Restricted Payments by the Issuer or any of its Restricted Subsidiaries to allow the payment of cash in lieu of the issuance of fractional shares upon (A) the exercise of options or warrants, (B) the conversion or exchange of Capital Stock of any such Person or (C) the conversion or exchange of Indebtedness or hybrid securities into Capital Stock of any such Person;
(9)so long as no Default or Event of Default has occurred and is continuing or would result therefrom, any Restricted Payment so long as Consolidated Liquidity shall be at least [*] on a Pro Forma Basis after giving effect to such Restricted Payment;
(10)in the event of a Change of Control, and if no Default shall have occurred and be continuing, the payment, purchase, redemption, defeasance or other acquisition or retirement of any subordinated Indebtedness of the Issuer or any Guarantor, in each case, at a purchase price not greater than [*] of the principal amount of such subordinated Indebtedness, plus any accrued and unpaid interest (including Special Interest, if any) thereon;
(11)Restricted Payments made with Excluded Contributions;
(12)the distribution, as a dividend or otherwise, of cash in an amount, as of any calendar year, not to exceed [*] of the annual net profits of the preceding calendar year (assuming there are no carry forward losses from previous years) to the extent necessary (and not in excess of the amount necessary) to satisfy Chilean minimum dividend requirements (as such requirements may be amended from time to time) (any dividends pursuant to this clause (13), “Minimum Chilean Dividends”);
(13)the distribution or dividend of assets or Capital Stock of any Person in connection with any full or partial “spin-off” of a Subsidiary or similar transactions having an aggregate Fair Market Value not to exceed [*] since the Issue Date; provided that the assets distributed or dividended do not include, directly or indirectly, any property or asset that constitutes Significant Assets;
(14)so long as no Default or Event of Default has occurred and is continuing or would result therefrom, other Restricted Payments in an aggregate amount (such aggregate amount to be calculated from the Issue Date) not to exceed the greater of [*] as of the date of such Restricted Payment;
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(15)so long as no Event of Default has occurred and is continuing or would result therefrom, any Restricted Investment by the Issuer and/or any Restricted Subsidiary of the Issuer; and
(16)the payment of any amounts in respect of any restricted stock units or other instruments or rights whose value is based in whole or in part on the value of any Equity Interests issued to any directors, officers or employees of the Issuer or any Restricted Subsidiary of the Issuer.
(c)Notwithstanding anything to the contrary in Sections 4.06(a) or 4.06(b), no Investment may be made in any Unrestricted Subsidiary if, after giving effect thereto, the aggregate assets and properties of all Unrestricted Subsidiaries would exceed [*] of Consolidated Total Assets.
(d)    In the case of any Restricted Payment that is not cash, the amount of such non-cash Restricted Payment will be the Fair Market Value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Issuer or such Restricted Subsidiary of the Issuer, as the case may be, pursuant to the Restricted Payment.
(e)    For purposes of determining compliance with this Section 4.06, if a Restricted Payment (or portion thereof) meets the criteria of more than one of the categories of Restricted Payments described in clauses (1) through (16) of Section 4.06(b), or is entitled to be made pursuant to Section 4.06(a), or pursuant to any category set forth in the definition of Permitted Investments or other defined term used in this Section 4.06, the Issuer will be entitled to classify on the date of its payment or later reclassify such Restricted Payment (or portion thereof) in any manner that complies with this Section 4.06.
(f)     For the avoidance of doubt, the payment on or with respect to, or purchase, redemption, defeasance or other acquisition or retirement for value of any Indebtedness of the Issuer or any Restricted Subsidiary of the Issuer that is not contractually subordinated to the Notes Obligations shall not constitute a Restricted Payment and therefore will not be subject to any of the restrictions described in this Section 4.06.
Section 4.07.Indebtedness.
(a)The Issuer will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, assume or guaranty or otherwise become or remain directly or indirectly liable with respect to any Indebtedness for borrowed money (including in the form of Disqualified Stock), except for:
(1)Priority Lien Debt of the Issuer or Guarantor and any Guarantees of the Issuer or a Guarantor in respect thereof; provided that any Priority Lien Debt shall (i) not be secured other than as permitted by clause (1) of the definition of Permitted Liens and (ii) not be subject to or benefit from any Guarantee by any Person that does not also Guarantee the Notes Obligations; provided, further, that any Priority Lien Debt (other than any Priority Lien Debt incurred in the form of revolving Indebtedness pursuant to clause (b) of the definition thereof, which may be senior or superpriority in right of payment from the Collateral to the Notes Obligations) shall be pari passu in right of payment with the Obligations;
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(2)Junior Lien Indebtedness of the Issuer and the Guarantors and any Guarantees of the Issuer or a Guarantor in respect thereof; provided that either (i) such Junior Lien Indebtedness is Permitted Refinancing Indebtedness in respect of Priority Lien Debt, (ii) after giving Pro Forma Effect to the issuance or incurrence of any such Junior Lien Indebtedness, the Total Asset Coverage Ratio is at least equal to [*] or (iii) such Junior Lien Indebtedness is Permitted Refinancing Indebtedness in respect of any Indebtedness incurred pursuant to clause (i) or (ii) of this Section 4.07(a)(2) (or any successive Permitted Refinancing Indebtedness); provided, further, that any Junior Lien Indebtedness shall not be secured other than as permitted by clause (2) of the definition of Permitted Liens; provided, further, that in the event such Indebtedness being Guaranteed is subordinated in right of payment to the Notes Obligations, then the related Guarantee shall be subordinated in right of payment to the Notes or the Note Guarantees, as the case may be;
(3)unsecured Indebtedness of the Issuer or Guarantors that is Permitted Refinancing Indebtedness in respect of either Priority Lien Debt or Junior Lien Indebtedness (or any successive Permitted Refinancing Indebtedness) and any Guarantees of the Issuer or Guarantors in respect of any of the foregoing; provided that (i) such Indebtedness shall not be subject to or benefit from any Guarantee by any Person that does not also Guarantee the Notes Obligations, (ii) such Indebtedness shall be pari passu in right of payment with the Notes Obligations or subordinated in right of payment with the Notes Obligations, with any such subordinated obligations on terms reasonably satisfactory to the Controlling Representative and (iii) in the event such Indebtedness being Guaranteed is subordinated in right of payment to the Notes Obligations, then the related Guarantee shall be subordinated in right of payment to the Notes or the Note Guarantees, as the case may be;
(4)(A) unsecured Indebtedness of the Issuer; provided that such Indebtedness (i) is subordinated in right of payment to the Notes Obligations, any other Priority Lien Debt and any Junior Lien Indebtedness on terms reasonably satisfactory to the Controlling Representative, (ii) matures no earlier than the date on which the applicable Notes mature, (iii) has a Weighted Average Life to Maturity no shorter than the Weighted Average Life to Maturity of the applicable Notes and (iv) is not subject to any Guarantee by any Subsidiary or Affiliate of the Issuer; and (B) unsecured Indebtedness of any Guarantor; provided that such Indebtedness (i) is subordinated in right of payment to the Notes Obligations, any other Priority Lien Debt and any Junior Lien Indebtedness on terms reasonably satisfactory to the Controlling Representative, (ii) matures no earlier than the date on which the applicable Notes mature, (iii) has a Weighted Average Life to Maturity no shorter than the Weighted Average Life to Maturity of the applicable notes and (iv) after giving effect to the incurrence of such Indebtedness under this clause (B) and the receipt and application of the proceeds thereof, the Fixed Charge Coverage Ratio of the Issuer would not be less than [*] on a Pro Forma Basis;
(5)unsecured Indebtedness of the Issuer and its Restricted Subsidiaries solely for working capital purposes; provided that the outstanding amount of Indebtedness incurred pursuant to this Section 4.07(a)(5), together with Indebtedness outstanding pursuant to Section 4.07(a)(9), does not exceed [*];
(6)letters of credit, bank guarantees, bankers’ assurances or acceptances, surety bonds, insurance bonds and similar instruments entered into in the ordinary course of business;
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(7)Hedging Obligations in respect of Hedging Agreements that are not for speculative purposes;
(8)Indebtedness of the Issuer or any Restricted Subsidiary incurred to finance the acquisition, construction or improvement of any fixed or capital assets, including sale and leaseback transactions, Capital Lease Obligations and any Indebtedness assumed in connection with the acquisition of any such assets or secured by a Lien on any such assets prior to the acquisition thereof, and extensions, renewals and replacements of any such Indebtedness that do not increase the outstanding principal amount thereof; provided that (i) such Indebtedness is incurred in connection with such sale and leaseback prior to or within 180 days after such acquisition or the completion of such construction or improvement and (ii) the aggregate principal amount of Indebtedness permitted by this Section 4.07(a)(8) shall not exceed the greater of [*];
(9)Indebtedness incurred by Receivables Subsidiaries pursuant to Qualified Receivables Transactions; provided that the outstanding amount of Indebtedness incurred pursuant to this Section 4.07(a)(9), together with Indebtedness outstanding pursuant to Section 4.07(a)(5) does not exceed [*];
(10)Indebtedness incurred in connection with any Aircraft Financing (including, without limitation, the RCF Loan Agreement and the Spare Engine Facility Loan Agreement);
(11)Indebtedness of the Issuer and its Restricted Subsidiaries with respect to infrastructure projects consistent with past practice; provided that (i) the Indebtedness incurred pursuant to this Section 4.07(a)(11) shall not exceed the value of the collateral pledged in connection therewith and (ii) no Significant Assets shall be pledged to secure any such Indebtedness;
(12)following a Collateral Release Event, Indebtedness of the Issuer and its Restricted Subsidiaries secured by Cargo Business Assets (which may include directly or indirectly the Equity Interests in any Subsidiary that does not constitute Collateral or that has been released pursuant to Section 4.26); provided that (x) the outstanding amount of Indebtedness permitted by this Section 4.07(a)(12) shall not exceed [*] and (y) no such Indebtedness shall be secured by a Lien on any Collateral;
(13)unsecured Guarantees of (i) Indebtedness for borrowed money permitted by this Section 4.07 and (ii) other Indebtedness not constituting Indebtedness for borrowed money; provided that such Guarantee of such Indebtedness is not prohibited by the provisions of this Indenture; provided, further, that in the event such Indebtedness being guaranteed is subordinated to the Notes Obligations, then the related Guarantee shall be subordinated in right of payment to the Notes or the Note Guarantee, as the case may be;
(14)intercompany Indebtedness among the Issuer and its Restricted Subsidiaries; provided that (i) any such Indebtedness owing by the Issuer or a Guarantor shall be subordinated to the Obligations pursuant to an Intercompany Note or otherwise on terms reasonably satisfactory to the Controlling Representative and (ii) any such Indebtedness (A) owing to the Issuer or a Guarantor by the Issuer or another Guarantor or (B) owing to the Issuer or a Guarantor by a Restricted Subsidiary that is not the Issuer or a Guarantor if such Indebtedness under this clause (B) owing by such Restricted Subsidiary that is not the Issuer or a Guarantor is [*] or more in the aggregate shall be evidenced by an Intercompany Note pursuant to the provisions contained therein and (iii) any such Indebtedness owing to the Issuer or a Guarantor shall be pledged as Collateral pursuant to the Pledge and Security Agreement;
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(15)Indebtedness of Restricted Subsidiaries that are not Guarantors; provided that the outstanding amount of Indebtedness permitted by this Section 4.07(a)(15) shall not exceed [*]; and
(16)unsecured Indebtedness of the Issuer and its Restricted Subsidiaries; provided that (i) the outstanding amount of Indebtedness permitted by this Section 4.07(a)(16) shall not exceed [*]; and (ii) after giving effect to the incurrence of such Indebtedness under this Section 4.07(a)(16) and the receipt and application of the proceeds thereof, the Fixed Charge Coverage Ratio of the Issuer would not be less than [*] on a Pro Forma Basis.
Section 4.08.Disposition of Significant Assets.
(a)Neither the Issuer nor any Restricted Subsidiary shall sell or otherwise Dispose of any Significant Assets (including, without limitation, by way of any Sale of the Issuer or a Guarantor), except that such sale or other Disposition shall be permitted in the case of (i) a Permitted Disposition or (ii) any other sale or Disposition; provided that, in the case of this clause (ii):
(i)no Event of Default shall have occurred and be continuing or would result therefrom;
(ii)the Asset Coverage Test is satisfied on a Pro Forma Basis after giving effect to such sale or other Disposition (including any concurrent pledge of Additional Collateral);
(iii)prior to effecting such Disposition, the Issuer shall have delivered an Officer’s Certificate to the Trustee and the Collateral Trustee calculating the Asset Coverage Ratio on a Pro Forma Basis after giving effect to such sale or other Disposition (including any pledge of Additional Collateral and/or redemption or repayment of Priority Lien Debt or Senior Priority Refinancing Indebtedness (in each case, in the case of revolving debt together with a permanent reduction in the commitments thereunder), if any);
(iv)such sale or other Disposition, if to any other Person, is an arms’ length Disposition to a third party that is not an Affiliate of the Issuer or any of its Subsidiaries; and
(v)to the extent that the Issuer receives any Net Proceeds from such sale or other Disposition, such Net Proceeds shall be applied as provided in this Section 4.08;
provided that nothing contained in this Section 4.08 is intended to excuse performance by the Issuer or any Guarantor of any requirement of any Security Document that would be applicable to a Disposition permitted under this Indenture. A Disposition of Collateral referred to in clause (4), (7) or (8) of the definition of “Permitted Disposition” shall not result in the automatic release of such Collateral from the security interest of the applicable Security Document, and the Collateral subject to such Disposition shall continue to constitute Collateral for all purposes of the Notes Documents (without prejudice to the rights of the Issuer to release any such Collateral pursuant to Section 4.16(g)).
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(b)Within 365 days after the receipt of any Net Proceeds from (1) a Disposition of Significant Assets (other than a Disposition constituting a Permitted Disposition), (2) a Disposition of Collateral referred to in clause (9) of the definition of “Permitted Disposition” (other than a Disposition of a minority stake in the equity of [*]) or (3) a Recovery Event in respect of Significant Assets, in each case, the Issuer shall apply the Prepayment Percentage of such Net Proceeds:
(1)to invest in or replace, purchase or acquire Significant Assets (or, in the case of Net Proceeds from a Disposition of Collateral or Recovery Event in respect of Collateral, new or additional Collateral), other than an investment in, purchase or acquisition of Significant Assets by a Non-Guarantor Acquired Airline within 365 days after the sale or other Disposition, or Recovery Event, that generated the Net Proceeds; provided that the Issuer will be deemed to have complied with this provision if and to the extent that, within 365 days after the sale or other Disposition, or Recovery Event, that generated the Net Proceeds, the Issuer or any of its Restricted Subsidiaries has entered into and not abandoned or rejected a binding agreement to acquire, purchase or invest in the assets that would constitute Significant Assets (or Collateral, as applicable) in compliance with the provision described in this clause (1), and that acquisition, purchase or investment is thereafter completed within 180 days after the end of such 365-day period); or
(2)to (i) repay the Revolving Credit Facility (provided that the commitments thereunder are permanently reduced), or any other Priority Lien Debt (and to permanently reduce commitments with respect thereto) to the extent such other Indebtedness and the Liens securing the same are permitted under the terms of this Indenture and the documentation governing such other Indebtedness requires such a prepayment or repurchase thereof with such Net Proceeds or (ii) make an offer to purchase and/or repay, prepay or redeem the Notes, either (i) as provided under Article 3, (ii) through open-market purchases (to the extent such purchases are at or above 100% of the principal amount thereof) or (iii) by making an offer (in accordance with the procedures set forth in Section 4.08(c) for Asset Disposition Offers) to all Holders to purchase their Notes at or above 100% of the principal amount thereof, plus accrued and unpaid interest (including Special Interest, if any), and Additional Amounts thereon, if any, to, but excluding, the date of repurchase.
(c)Any Net Proceeds from a Disposition or Recovery Event that are not applied or invested as provided in Section 4.08(b), together with any Net Proceeds that are earlier designated as “Excess Proceeds” by the Issuer, will constitute “Excess Proceeds.” Within five (5) Business Days of the date on which the aggregate amount of Excess Proceeds exceeds [*] (or earlier if the Issuer so elects), the Issuer will make an offer to purchase and/or repay, prepay or redeem, as applicable, to all Holders of Notes and all holders of other Priority Lien Debt containing provisions similar to those set forth in this Indenture with respect to offers to purchase (“Other Offer Notes”) and prepay any other Priority Lien Debt requiring repayment or prepayment (collectively, whether through an offer or a required prepayment, an “Asset Disposition Offer”); provided that the percentage of such Excess Proceeds allocated and offered to the Notes in such Asset Disposition Offer is at least equal to the percentage of the aggregate principal amount of all Priority Lien Debt represented at such time by the Notes. The offer price in any Asset Disposition Offer will be equal to 100% of the principal amount, plus accrued interest and Additional Amounts (including Special Interest, if any) to, but excluding, the date of purchase, prepayment or redemption, subject to the rights of Holders of the Notes on the relevant record date to receive interest due on the relevant interest payment date, and will be payable in cash. If any Excess Proceeds remain after consummation of an Asset Disposition Offer, the Issuer may use those Excess Proceeds for any purpose not otherwise prohibited by this Indenture, including to make a similar offer with respect to Junior Lien Indebtedness. If the aggregate
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principal amount of Notes and other Priority Lien Debt requiring purchase or repayment tendered in such Asset Disposition Offer exceeds the amount of Excess Proceeds allocated to the Notes and other indebtedness in such Asset Disposition Offer, the Issuer will select the Notes and other Priority Lien Debt to be purchased or repaid pro rata based on the aggregate principal amounts so tendered (with such adjustments as may be deemed appropriate by the Issuer so that only Notes in minimum denominations of $2,000, or an integral multiple of $1,000 in excess thereof, will be purchased). Upon completion of each Asset Disposition Offer, the amount of Excess Proceeds will be reset at zero.
The Issuer will comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent such laws and regulations are applicable in connection with the repurchase of Notes as a result of an Asset Disposition Offer. To the extent that the provisions of any such securities laws or regulations conflict with the provisions of Section 3.11 hereof or this Section 4.08, the Issuer will comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations under Section 3.11 hereof or this Section 4.08 by virtue of any such conflict.
(d)Notwithstanding any other provisions of Section 4.08(b), to the extent any or all of the Net Proceeds of any Disposition by a Restricted Subsidiary or the Net Proceeds of a Recovery Event received by a Restricted Subsidiary are prohibited or delayed by any contractual restriction permitted by this Indenture or any applicable local law (including financial assistance, corporate benefit restrictions on upstreaming of cash intra group and the fiduciary and statutory duties of the directors of such Restricted Subsidiary) from being repatriated or passed on to or used for the benefit of the Issuer or if the Issuer has determined in good faith that repatriation of any such amount to the Issuer would have material adverse tax consequences (including a material acceleration of the point in time when such earnings would otherwise be taxed) with respect to such amount, the portion of such Net Proceeds so affected will not be required to be applied to prepay the Priority Lien Debt at the times provided in Section 4.08(b) but may be retained by the applicable Restricted Subsidiary so long, but only so long, as the applicable contractual restriction or local law will not permit repatriation or the passing on to or otherwise using for the benefit of the Issuer, or the Issuer believes in good faith that such material adverse tax consequence would result, and once such repatriation of any of such affected Net Proceeds is permitted under the applicable contractual agreement or local law or the Issuer determines in good faith such repatriation would no longer have such material adverse tax consequences, such repatriation will be promptly effected and such repatriated Net Proceeds will be promptly (and in any event not later than five Business Days after such repatriation) applied (net of additional Taxes payable or reasonably estimated to be payable as a result thereof) to the prepayment of the Priority Lien Debt pursuant to Section 4.08(b) (provided that no such prepayment of the Priority Lien Debt pursuant to Section 4.08(b) shall be required in the case of any such Net Proceeds the repatriation of which the Issuer believes in good faith would result in material adverse tax consequences, if on or before the date on which such Net Proceeds so retained would otherwise have been required to be applied to reinvestments or prepayments (after giving effect to the reinvestment period therefor), the Issuer applies an amount equal to the amount of such Net Proceeds to such reinvestments or prepayments as if such Net Proceeds had been received by the Issuer rather than such Restricted Subsidiary, less the amount of additional Taxes that would have been payable or reserved against if such Net Proceeds had been repatriated).
Section 4.09.Liens.
The Issuer will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, assume or suffer to exist any Lien of any kind on any property or asset that constitutes Significant Assets, except Permitted Liens.
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Section 4.10.Transactions with Affiliates.
(a)The Issuer will not, and will not permit any of its Restricted Subsidiaries to, make any payment to or sell, lease, transfer or otherwise Dispose of any of its properties or assets to, or purchase any property or assets from, or enter into or make or amend any transaction, contract, agreement, understanding, loan, advance or guarantee with, or for the benefit of, any Affiliate of the Issuer (each an “Affiliate Transaction”) involving aggregate payments or consideration in excess of [*], unless:
(1)the Affiliate Transaction is on terms that are not materially less favorable to the Issuer or the relevant Restricted Subsidiary (taking into account all effects the Issuer or such Restricted Subsidiary expects to result from such transaction, whether tangible or intangible) than those that would have been obtained in a comparable transaction by the Issuer or such Restricted Subsidiary with an unrelated Person; and
(2)the Issuer delivers to the Trustee:
(A)with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate consideration in excess of [*], but less than or equal to [*], an Officer’s Certificate certifying that such Affiliate Transaction complies with clause (1) of this Section 4.10(a); and
(B)with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate consideration in excess of [*], a board resolution stating the Board of Directors has approved such Affiliate Transaction and determined that it complies with clause (1) of this Section 4.10(a).
(b)The following items will not be deemed to be Affiliate Transactions and, therefore, will not be subject to the provisions of Section 4.10(a):
(1)any employment agreement, confidentiality agreement, non-competition agreement, incentive plan, employee stock option agreement, long-term incentive plan, profit sharing plan, employee benefit plan, officer or director indemnification agreement or any similar arrangement entered into by the Issuer or any of its Restricted Subsidiaries in the ordinary course of business and payments pursuant thereto;
(2)transactions between or among the Issuer and/or its Restricted Subsidiaries (including without limitation in connection with any full or partial “spin-off” or similar transactions);
(3)transactions with a Person (other than an Unrestricted Subsidiary of the Issuer) that is an Affiliate of the Issuer solely because the Issuer owns, directly or through a Restricted Subsidiary, an Equity Interest in, or controls, such Person;
(4)payment of fees, compensation, reimbursements of expenses (pursuant to indemnity arrangements or otherwise) and reasonable and customary indemnities provided to or on behalf of officers, directors, employees or consultants of the Issuer or any of its Restricted Subsidiaries;
(5)any issuance of Qualifying Equity Interests to Affiliates of the Issuer or any increase in the liquidation preference of preferred stock of the Issuer (if any);
(6)transactions with customers, clients, suppliers or purchasers or sellers of goods or services in the ordinary course of business or consistent with past or industry practice or transactions with joint ventures, alliances or alliance members or Unrestricted Subsidiaries entered into in the ordinary course of business or consistent with past or industry practice;
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(7)Permitted Investments and Restricted Payments that do not violate Section 4.06;
(8)loans or advances to employees in the ordinary course of business not to exceed [*] in the aggregate at any one time outstanding;
(9)transactions pursuant to agreements or arrangements in effect on the Issue Date or any amendment, modification or supplement thereto or replacement thereof and any payments made or performance under any agreement as in effect on the Issue Date or any amendment, replacement, extension or renewal thereof (so long as such agreement as so amended, replaced, extended or renewed is not materially less advantageous, taken as a whole, to the holders than the original agreement as in effect on the Issue Date);
(10)transactions between or among the Issuer and/or its Restricted Subsidiaries or transactions between a Receivables Subsidiary and any Person in which the Receivables Subsidiary has an Investment;
(11)any transaction effected as part of a Qualified Receivables Transaction;
(12)any purchase by the Issuer’s Affiliates of Indebtedness of the Issuer or any of its Restricted Subsidiaries, the majority of which Indebtedness is offered to Persons who are not Affiliates of the Issuer;
(13)shared services, joint purchasing, systems integration, fleet management and other transactions in the ordinary course of business or consistent with past or industry practice;
(14)transactions between the Issuer or any of its Restricted Subsidiaries and any employee labor union or other employee group of the Issuer or such Restricted Subsidiary; provided such transactions are not otherwise prohibited by this Indenture; and
(15)transactions with captive insurance companies of the Issuer or any of its Restricted Subsidiaries.
Section 4.11.Corporate Existence.
Subject to Section 4.08 and Article 5 hereof, the Issuer and each Guarantor shall do or cause to be done all things reasonably necessary to preserve and keep in full force and effect:
(a)(i) with respect to the Issuer, its corporate existence in accordance with its organizational documents (as the same may be amended from time to time), and (ii) with respect to each Guarantor, its corporate existence, and the corporate, partnership or other existence of each of its Restricted Subsidiaries, in each case, in accordance with the respective organizational documents (as the same may be amended from time to time) of such Person, except where, with respect to clause (ii), the failure to do so would not reasonably be expected to result in a Material Adverse Effect; and
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(b)their rights (charter and statutory) and material franchises of the Issuer and each Guarantor and its Restricted Subsidiaries; provided, however, that the Issuer and the Guarantors shall not be required to preserve any such right or franchise, or the corporate, partnership or other existence, of it or any of its Restricted Subsidiaries if the Board of Directors of the Issuer shall determine that the preservation thereof is no longer desirable in the conduct of the business of Issuer and its Subsidiaries, taken as a whole, and that the loss thereof would not, individually or in the aggregate, have a Material Adverse Effect.
For the avoidance of doubt, this Section 4.11 shall not prohibit any actions permitted by Article 5 hereof.
Section 4.12.Offer to Repurchase Upon Change of Control.
(a)Upon the occurrence of a Change of Control in respect of the Notes, unless the Issuer has otherwise exercised its right to redeem the Notes pursuant to the terms of this Indenture, each Holder of Notes will have the right to require the Issuer to make an offer (a “Change of Control Offer”) to each Holder to repurchase all or any part (equal to minimum denominations of $2,000 or an integral multiple of $1,000 in excess thereof) of that Holder’s Notes at a purchase price in cash equal to [*] of the aggregate principal amount of the Notes to be repurchased plus accrued interest (including Special Interest, if any) and Additional Amounts thereon, if any, on the Notes to be repurchased to, but excluding, the date of purchase, subject to the rights of Holders of Notes on the relevant record date to receive interest due on the relevant interest payment date (the “Change of Control Payment”). Within 30 days following the date upon which any Change of Control has occurred in respect of the Notes, unless the Issuer has otherwise exercised its right to redeem the Notes pursuant to the terms of this Indenture, the Issuer will deliver a notice to each Holder of Notes (with a copy to the Trustee) describing the transaction or transactions that constitute the Change of Control and stating:
(1)that the Change of Control Offer is being made pursuant to this Section 4.12 and that all Notes tendered will be accepted for payment;
(2)the purchase price and the purchase date, which shall be no earlier than 10 days and no later than 60 days from the date such notice is sent, other than as may be required by law (the “Change of Control Payment Date”);
(3)that any Note not tendered will continue to accrue interest;
(4)that, unless the Issuer defaults in the payment of the Change of Control Payment, all Notes accepted for payment pursuant to the Change of Control Offer will cease to accrue interest on and after the Change of Control Payment Date;
(5)that Holders of Notes electing to have any Notes purchased pursuant to a Change of Control Offer will be required to surrender the Notes, with the form entitled “Option of Holder to Elect Purchase” on the reverse of the Note completed, or transfer by book-entry transfer, to the Paying Agent at the address specified in the notice prior to the close of business on the third Business Day preceding the Change of Control Payment Date;
(6)that Holders of Notes will be entitled to withdraw their election if the Paying Agent receives, not later than the close of business on the second Business Day preceding the Change of Control Payment Date, a telex, facsimile transmission or letter setting forth the name of the Holder, the principal amount of Notes delivered for purchase, and a statement that such Holder is withdrawing his election to have the Notes purchased; and
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(7)that Holders of Notes whose Notes are being purchased only in part will be issued new Notes equal in principal amount to the unpurchased portion of the Notes surrendered, which unpurchased portion must be equal to minimum denominations of $2,000 in principal amount or an integral multiple of $1,000;
provided that the Issuer may, at its option, deliver such notice prior to any Change of Control but after the public announcement of the Change of Control; provided, further, that such notice, if sent prior to the date of consummation of the Change of Control, will state that the Change of Control Offer is conditioned on the Change of Control occurring on or prior to the Change of Control Payment Date.
(b)On the Change of Control Payment Date with respect to the Notes, the Issuer will, to the extent lawful:
(1)accept for payment all Notes or portions of Notes properly tendered pursuant to the Change of Control Offer;
(2)deposit with the Paying Agent an amount equal to the Change of Control Payment in respect of all Notes or portions of Notes properly tendered; and
(3)deliver or cause to be delivered to the Trustee the Notes properly accepted together with an Officer’s Certificate stating the aggregate principal amount of Notes or portions of Notes being purchased by the Issuer.
The Paying Agent will promptly deliver (but in any case not later than five days after the Change of Control Payment Date) to each Holder of Notes properly tendered the Change of Control Payment for such Notes, and the Trustee will promptly authenticate and mail (or cause to be transferred by book entry) to each Holder a new Note equal in principal amount to any unpurchased portion of the Notes surrendered, if any. The Issuer will publicly announce the results of the Change of Control Offer on or as soon as practicable after the Change of Control Payment Date.
(c)The Issuer will not be required to make a Change of Control Offer with respect to the Notes if a third party makes such an offer in the manner, at the times and otherwise in compliance with the requirements for such an offer made by the Issuer and such third party purchases all Notes properly tendered and not withdrawn under its offer.
(d)If Holders of not less than [*] in aggregate principal amount of the outstanding Notes validly tender and do not withdraw the Notes in a Change of Control Offer and the Issuer, or any third party making a Change of Control Offer in lieu of the Issuer, purchases all of such Notes validly tendered and not withdrawn by such Holders, the Issuer will have the right, upon not less than 10 nor more than 60 days’ prior notice, given not more than 30 days following such purchase pursuant to the Change of Control Offer described above, to redeem all Notes that remain outstanding following such purchase at a redemption price in cash equal to [*] of the principal amount thereof, plus accrued interest (including Special Interest, if any) and Additional Amounts thereon, if any, to, but excluding, the Redemption Date (subject to the right of holders of record on the relevant record date to receive interest on the relevant interest payment date) pursuant to Sections 3.01 through 3.06 and Section 3.07(e) hereof.
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(e)The Issuer will comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent those laws and regulations are applicable in connection with the repurchase of the Notes as a result of a Change of Control. To the extent that the provisions of any such securities laws or regulations conflict with the Change of Control Offer provisions set forth in this Section 4.12, the Issuer will comply with those securities laws and regulations and will not be deemed to have breached the Issuer’s obligations under this Section 4.12 by virtue of any such conflict.
Section 4.13.Additional Guarantors; Collateral.
(a)On and after the Issue Date, (x) if any Restricted Subsidiary of the Issuer Guarantees the Revolving Credit Agreement or any other Indebtedness of the Issuer or the Guarantors incurred under Sections 4.07(a)(1), 4.07(a)(2) or 4.07(a)(3) or (y) if no such Indebtedness is then outstanding, subject to the Guaranty and Security Principles if any Restricted Subsidiary of the Issuer (other than an Excluded Subsidiary) pledges or grants liens in the Collateral or acquires or holds any Significant Asset, then the Issuer will (i) promptly (and in any event within forty-five (45) calendar days following such acquisition, termination, release or other applicable event, or such later date as the Controlling Representative may agree in its sole discretion) cause such Restricted Subsidiary to become a Guarantor by executing and delivering to the Trustee a supplemental indenture substantially in the form of Exhibit D hereto and to become a party to each applicable Security Document by executing and delivering to the Trustee and the Collateral Trustee a supplement to the applicable Security Documents pursuant to which certain of such Restricted Subsidiary’s Significant Assets will be pledged as Collateral pursuant to the terms of such Security Documents and the Guaranty and Security Principles in favor of the Collateral Trustee or the applicable Local Collateral Agent, (ii) promptly (and in any event within forty-five (45) calendar days following of such acquisition, termination, release or other applicable event) execute and deliver (or cause such Restricted Subsidiary to execute and deliver) to the Collateral Trustee or a Local Collateral Agent, as applicable, such documents and take such actions to create, grant, establish, preserve and perfect the Priority Lien in favor of the Collateral Trustee or a Local Collateral Agent, as applicable, for the benefit of the Secured Parties on such assets of the Issuer or such Restricted Subsidiary, as applicable, to secure the Notes Obligations to the extent required under the applicable Security Documents or reasonably requested by the Collateral Trustee or the Local Collateral Agent (acting at the direction of the Controlling Representative), as applicable, and to ensure that such Collateral shall be subject to no other Liens other than Permitted Liens, in each case subject to the Guaranty and Security Principles, and (iii) if reasonably requested by the Collateral Trustee (acting at the direction of the Controlling Representative), deliver to the Collateral Trustee, for the benefit of the Secured Parties, a written Opinion of Counsel (which counsel shall be reasonably satisfactory to the Collateral Trustee) to the Issuer or such Restricted Subsidiary, as applicable, with respect to the matters described in clauses (i) and (ii) of this Section 4.13(a), in each case within forty-five (45) calendar days after the addition of such Collateral or Significant Assets and in form and substance reasonably satisfactory to the Collateral Trustee (acting at the direction of the Controlling Representative).
(b)In addition, if any Restricted Subsidiary of the Issuer that has not provided a Note Guarantee elects to pledge any Additional Collateral, then the Issuer will promptly cause such Subsidiary to execute and deliver to the Trustee a supplemental indenture substantially in the form of Exhibit D hereto pursuant to which such Subsidiary will provide a Note Guarantee and to execute and deliver to the Trustee and the Collateral Trustee a supplement to the applicable Security Documents pursuant to which such Restricted Subsidiary’s Significant Assets, including such Additional Collateral, will be pledged as Collateral in favor of the Collateral Trustee or the applicable Local Collateral Agent, and to take the steps set forth in clauses (ii) and (iii) of Section 4.13(a).
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(c)Notwithstanding anything to the contrary, Issuer may from time to time, upon written notice to the Trustee, (i) elect to cause any Restricted Subsidiary that would otherwise be an Excluded Subsidiary to become a Guarantor (a “Designated Guarantor”) but shall have no obligation to do so (and for clarity, there is no obligation to cause any Restricted Subsidiary that would otherwise be an Excluded Subsidiary to become a Designated Guarantor because another Designated Guarantor is formed or acquired in the same jurisdiction), subject to the satisfaction of the requirements of Section 4.13(a) by such Designated Guarantor and (ii) elect to cause any Designated Guarantor to be an Excluded Subsidiary; provided that such Designated Guarantor is either an Excluded Aircraft Subsidiary or does not own any Significant Assets at such time of election (other than pursuant to the thresholds set forth in clause (g) of the definition of “Excluded Subsidiary”).
Section 4.14.Designation of Restricted and Unrestricted Subsidiaries.
The Board of Directors may designate any Restricted Subsidiary of the Issuer to be an Unrestricted Subsidiary if that designation would not cause a Default or Event of Default and no Default or Event of Default exists at the time of such designation; provided that if a Restricted Subsidiary is designated as an Unrestricted Subsidiary, the aggregate Fair Market Value of all outstanding Investments owned by the Issuer and its Restricted Subsidiaries in the Subsidiary designated as an Unrestricted Subsidiary will be deemed to be an Investment made as of the time of the designation, which Investment is permitted at that time under Section 4.06 and if the Restricted Subsidiary otherwise meets the conditions set forth in the definition of an “Unrestricted Subsidiary.”
Any designation of a Subsidiary of the Issuer as an Unrestricted Subsidiary will be evidenced to the Trustee by delivering to the Trustee a certified copy of a resolution of the Board of Directors giving effect to such designation and an Officer’s Certificate certifying that such designation complied with the preceding conditions. The Board of Directors may at any time designate any Unrestricted Subsidiary to be a Restricted Subsidiary; provided that (1) no Default or Event of Default would be in existence following such designation, (2) after giving effect to such designation, the Asset Coverage Ratio shall be greater than or equal to [*] and (3) all Liens of such Unrestricted Subsidiary outstanding immediately following such designation would, if incurred at such time, have been permitted to be incurred for all purposes of this Indenture.
Section 4.15.Delivery of Appraisals. The Issuer shall:
(1)within thirty (30) Business Days of March 31 of each calendar year;
(2)on or prior to the date upon which any Additional Collateral is pledged to the Collateral Trustee or a Local Collateral Agent, as applicable, or assets are transferred to the Issuer or a Guarantor in order to constitute Coverage Assets, but only with respect to such Additional Collateral or new Coverage Assets; and
(3)promptly (but in any event within 45 days) following a request by the Trustee or the Collateral Trustee if an Event of Default has occurred and is continuing,
deliver to the Trustee and the Collateral Trustee one or more Appraisals establishing the Appraised Value of the Coverage Assets; provided, however, that, in the case of clause (2)
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above, only an Appraisal with respect to the Additional Collateral or new Coverage Assets shall be required to be delivered. The Issuer may from time to time cause Subsequent Appraisals to be delivered to the Trustee and the Collateral Trustee if it believes that any affected Coverage Asset has a higher Appraised Value than that reflected in the most recent Appraisals delivered pursuant to this Section 4.15.
In addition to clauses (1) through (3) above, the Issuer will deliver to the Trustee and the Collateral Trustee (and make available to Holders of Notes, prospective investors, broker-dealers and securities analysts as set forth in Section 4.03(c)) a copy of any Appraisal that is delivered to any other Priority Lien Representative or other holder of Priority Lien Obligations, but has not been or is not being delivered to the Trustee in accordance with such clauses (1) through (3) above, within 10 Business Days of the date on which such Appraisal was given to such other Priority Lien Representative or holder of Priority Lien Obligations.
Notwithstanding the foregoing, the Issuer may make available the Appraisal information required to be delivered under Section 4.03(c) and this Section 4.15 by posting such Appraisal information on a website (which may be nonpublic and may be maintained by the Issuer or a third party) to which access will be given to the Holders of Notes, prospective investors, broker-dealers and securities analysts that certify their status as such to the reasonable satisfaction of the Issuer.
For the avoidance of doubt, the Issuer’s failure to deliver any Appraisal required by this Section 4.15 will be deemed to constitute an Event of Default for purposes of clause (4) under Section 6.01 hereof.
Section 4.16.Asset Coverage Ratio.
(a)On the tenth (10th) Business Day after a Reference Date, the Issuer will deliver to the Trustee and the Collateral Trustee an Officer’s Certificate demonstrating with reasonable detail the calculation of the Asset Coverage Ratio as of the applicable Reference Date.
If:
(1)the Issuer fails to deliver the Officer’s Certificate required by Section 4.16(a) within the time period specified in Section 4.16(a), or
(2)such Officer’s Certificate demonstrates that the Asset Coverage Ratio was less than [*] as of the applicable Reference Date (a “Coverage Shortfall”),
then additional interest shall accrue on all outstanding Notes (“Special Interest”) in an amount equal to 2.0% per annum of the principal amount of such Notes commencing on such Reference Date, payable on each applicable interest payment date thereafter; provided that such Special Interest shall cease to apply upon either (x) the Issuer delivering to the Trustee an Officer’s Certificate demonstrating, with reasonably detailed calculations, that the Issuer’s Asset Coverage Ratio was no less than [*], or (y) the Issuer curing such Coverage Shortfall pursuant to Section 4.16(b).
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(b)In the event of a Coverage Shortfall, within 45 days after the applicable Reference Date (such 45-day period, the “Cure Period”), the Issuer may:
(1)pledge additional assets as Additional Collateral under the Security Documents to secure Priority Lien Obligations and Junior Lien Obligations and such Additional Collateral will be included in the calculation of Appraised Value as of such Reference Date; and/or
(2)redeem, repay, prepay, repurchase or otherwise retire Priority Lien Debt, including by redeeming Notes pursuant to any available optional redemption provisions of this Indenture and such redeemed, repaid, prepaid, repurchased or otherwise retired Priority Lien Debt will not be included in the calculation of Appraised Value as of such Reference Date.
(c)If, after giving effect to such actions described in Section 4.16(b) during the Cure Period, the Asset Coverage Ratio would have been greater than [*] as of such Reference Date, as set forth in an Officer’s Certificate delivered to the Trustee and the Collateral Trustee no later than the last day of the Cure Period demonstrating such calculations in reasonable detail, then no Special Interest will be payable with respect to such Coverage Shortfall.
(d)Special Interest payable pursuant to the provisions of this Section 4.16 will be calculated and paid in the same manner as regular interest is calculated and paid under this Indenture, and all references to payments of “interest” will be deemed to include Special Interest, if applicable. Prior to the record date immediately preceding any interest payment date on which Special Interest is due, the Issuer shall deliver written notice to the Trustee and the Holders of the Notes stating that the Issuer is required to pay Special Interest, and setting forth the accrual dates and amount of Special Interest due and payable on Notes on such next interest payment date.
(e)Notwithstanding anything herein to the contrary, for clarity, the Issuer’s failure to maintain an Asset Coverage Ratio in excess of [*] will not be deemed to constitute a Default or Event of Default for purposes of clause (4) under Section 6.01 hereof.
(f)Notwithstanding anything to the contrary contained herein, if the Asset Coverage Test is not satisfied solely as a result of damage to or loss of any Collateral covered by insurance (pursuant to which the Collateral Trustee is named as loss payee and with respect to which payments are to be delivered directly to the Collateral Trustee or the Trustee) for which the insurer thereof has been notified of the relevant claim and has not challenged such coverage, any calculation of the Asset Coverage Ratio (and Total Asset Coverage Ratio) made pursuant to this Indenture shall deem the relevant Issuer or Guarantor to have received Net Proceeds (and to have taken all steps necessary to have pledged such Net Proceeds as Additional Collateral) in an amount equal to the expected coverage amount (as determined by the Issuer in good faith and updated from time to time to reflect any agreements reached with the applicable insurer) and net of any amounts required to be paid out of such proceeds until the earliest of (i) the date any such Net Proceeds are actually first received by the Collateral Trustee or the Trustee, (ii) the date that is 270 days after such damage and (iii) the date on which any such insurer denies such claim; provided, further, that, prior to giving effect to this clause (f), the Appraised Value of the Coverage Assets shall be no less than 100% of the aggregate principal amount of all Priority Lien Debt at such time. If the Trustee or Collateral Trustee should receive any Net Proceeds directly from the insurer in respect of a Recovery Event, the Trustee or the Collateral Trustee, as applicable, shall promptly cause such proceeds to be paid to the applicable Issuer or Guarantor, or to be applied, as applicable, in accordance with Section 4.08.
(g)At the Issuer’s request, the Lien on any asset or type or category of asset (including after-acquired assets of that type or category) that (i) has been Disposed in accordance
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with this Indenture to a Person other than the Issuer or a Guarantor, (ii) is or has become Excluded Assets or (iii) constitutes Additional Collateral, will, in each case, be promptly released; provided that in each case, that the following conditions are satisfied or waived: (A) no Event of Default shall have occurred and be continuing, (B) either (x) after giving effect to such release, the Appraised Value of the Coverage Assets shall satisfy the Asset Coverage Test on a Pro Forma Basis or (y) the Issuer shall designate additional assets as Additional Collateral and comply with Section 4.13 and/or prepay or redeem or cause to be prepaid or redeemed Priority Lien Debt (as selected by the Issuer in its sole discretion), such that, following such actions and such release, the Asset Coverage Test shall be satisfied on a Pro Forma Basis, and (C) the Issuer shall deliver to the Trustee an Officer’s Certificate demonstrating Pro Forma Compliance with the Asset Coverage Test after giving effect to such release (including after giving effect to any action taken pursuant to the foregoing clause (B)(y)). Each of the Trustee and the Collateral Trustee agrees to promptly provide any documents or releases reasonably requested by, and at the sole cost and expense of, the Issuer to evidence any such release. For the avoidance of doubt, (aa) nothing contained in the foregoing shall prohibit any substitution of any item of Additional Collateral if such substitution and related release of the Additional Collateral being replaced are permitted or required under the applicable Security Document, and such permitted or required release of such replaced Additional Collateral pursuant to such Security Document shall not be subject to (and shall be deemed to satisfy) the release conditions in the first sentence of this clause 4.16(g) and (bb) if the Issuer or a Guarantor releases (in accordance with this clause 4.16(g)) any Additional Collateral that has suffered (or corresponding to an asset that suffered) a Recovery Event, the applicable Issuer or Guarantor shall be deemed to have complied with any provisions in the corresponding Security Documents requiring that such Issuer or Guarantor take specific actions in respect of such Recovery Event.
Section 4.17.Air Carrier Status.
Each Air Carrier Entity will use commercially reasonable efforts to maintain at all times its status and rights to operate as an “air carrier” in Chile, Brazil, Peru or Colombia, as applicable, and all other jurisdictions in which it operates air routes from time to time, except to the extent the failure to maintain such rights would not reasonably be expected to result in a Material Adverse Effect. Subject to a Collateral Release Event, each Air Carrier Entity will possess and maintain at all times, all necessary certificates, exemptions, licenses, designations, authorizations and consents required by the FAA, the DOT or any applicable Non-U.S. Aviation Authority or Airport Authority or any other Governmental Authority that are material to the operation of the Pledged Routes and Material Pledged Slots operated by it, and to the conduct of its business and operations as currently conducted, in each case, to the extent necessary for such Air Carrier Entity’s operation of flights, except where a failure to so possess or maintain would not reasonably be expected to have a Material Adverse Effect. Subject to a Collateral Release Event, each Air Carrier Entity will also:
(a)utilize its Material Pledged Slots in a manner consistent with applicable regulations, rules and contracts in order to preserve its right to hold and use its Material Pledged Slots, taking into account any waivers or other relief granted to it by the FAA, the DOT, any Non-U.S. Aviation Authority or any Airport Authority, except to the extent that any failure to utilize would not reasonably be expected to result in a Material Adverse Effect;
(b)cause to be done all things commercially reasonably necessary to preserve and keep in full force and effect its rights in and to use its Material Pledged Slots, including, without limitation, if applicable, satisfying any applicable Use or Lose Rule, except to the extent that any failure to do so would not reasonably be expected to result in a Material Adverse Effect;
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(c)use commercially reasonable efforts to utilize its Pledged Routes in a manner consistent with Title 49, the applicable rules and regulations of the FAA, the DOT, any applicable Non-U.S. Aviation Authorities, and any applicable treaty in order to preserve its rights to operate the scheduled services, except to the extent that any failure would not reasonably be expected to result in a Material Adverse Effect; and
(d)cause to be done all things commercially reasonably necessary to preserve and keep in full force and effect its authority to operate the scheduled services, except to the extent that any failure would not reasonably be expected to result in a Material Adverse Effect.
Section 4.18.Regulatory Matters; Utilization; Collateral Requirements.
Subject to a Collateral Release Event, so long as any of the Notes remain outstanding, each of the Issuer and the Guarantors will promptly take all such steps as may be commercially reasonably necessary to maintain, renew and obtain, or obtain the use of, Material Pledged Slots and Material Pledged Routes as needed for its continued and future operations using such Material Pledged Slots or Material Pledged Routes, and pay any applicable filing fees and other expenses related to the submission of applications, renewal requests and other filings as may be reasonably necessary to have access to its Material Pledged Slots and Material Pledged Routes, except to the extent that any failure to do so would not reasonably be expected to result in a Material Adverse Effect.
Section 4.19.Use of Proceeds.
The Issuer and the Guarantors will not use, and will not permit any of their respective Subsidiaries, officers, directors, employees or agents to use, the proceeds of any Notes (i) in violation of any Anti-Corruption Laws or Anti-Money Laundering Laws or (ii) (A) to fund, finance or facilitate any activities or business of or with any Person that, at the time of such funding, financing or facilitation, is the subject or target of Sanctions, (B) to fund, finance or facilitate any activities of or business in any Sanctioned Country, in each case of (A) and (B) except to the extent permitted under Sanctions, or (C) in any other manner that would result in a violation of Sanctions by any Person in connection with this Indenture (including any Person participating or acting in connection with the Notes hereunder, whether as underwriter, advisor, investor, lender, hedge provider, facility or security agent or otherwise).
Section 4.20.Payment of Additional Amounts.
(a)All payments (including any premium paid upon redemption of the Notes) by or on behalf of the Issuer or a successor in respect of the Notes or the Guarantors or a successor in respect of any Note Guarantees will be made free and clear of, and without withholding or deduction for or on account of, any present or future taxes, duties, assessments, or other governmental charges of whatever nature imposed or levied by or on behalf of Chile, Brazil, the Cayman Islands, Colombia, Ecuador, Peru or the United States or any authority therein or thereof or any other jurisdiction in which the Issuer or the Guarantors (or in each case, their successors) are organized or doing business or from or through which payments are made in respect of the Notes, or any political subdivision or taxing authority thereof or therein (any of the aforementioned being a “Taxing Jurisdiction”), unless the Issuer or the Guarantors (or their respective successors) are compelled by law to deduct or withhold such taxes, duties, assessments, or governmental charges. In such event, the Issuer or the Guarantors (or their respective successors) will make such deduction or withholding, make payment of the amount so withheld to the appropriate Governmental Authority and pay such additional amounts as may be necessary to ensure that the net amounts received by registered Holders of the Notes after such withholding or deduction shall equal the respective amounts of principal and interest (or other amounts stated to be payable under the Notes) that would have been received in respect of the Notes in the absence of such withholding or deduction (“Additional Amounts”). Notwithstanding the foregoing, no such Additional Amounts shall be payable:
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(1)  to, or to a third party on behalf of, a Holder who is liable for such taxes, duties, assessments or governmental charges in respect of such Note by reason of the existence of any present or former connection between such Holder (or between a fiduciary, settlor, beneficiary, member or shareholder of such Holder, if such Holder is an estate, a trust, a partnership, or a corporation) and the relevant Taxing Jurisdiction, including, without limitation, such Holder (or such fiduciary, settlor, beneficiary, member or shareholder) being or having been a citizen or resident thereof or being or having been engaged in a trade or business or present therein or having, or having had, a permanent establishment therein, other than the mere holding of the Note or enforcement of rights under this Indenture and the receipt of payments with respect to the Note;
(2)in respect of Notes surrendered or presented for payment (if surrender or presentment is required) more than 30 days after the Relevant Date except to the extent that payments under such Note would have been subject to withholdings and the Holder of such Note would have been entitled to such Additional Amounts, on surrender of such Note for payment on the last day of such period of 30 days;
(3)to, or to a third party on behalf of, a Holder who is liable for such taxes, duties, assessments or other governmental charges by reason of such Holder’s failure to comply, with any certification, identification, documentation or other reporting requirement concerning the nationality, residence, identity or connection with the relevant Taxing Jurisdiction of such Holder (or of a fiduciary, settlor, beneficiary, member of shareholder of such holder, if such holder is an estate, a trust, a partnership, or a corporation), if (x) compliance is required by law or an applicable income treaty as a precondition to, exemption from, or reduction in the rate of, the tax, duty, assessment or other governmental charge and (y) the Issuer has given the Holders at least 30 days’ notice that Holders will be required to provide such certification, identification, documentation or other requirement;
(4)in respect of any estate, inheritance, gift, sales, transfer, capital gains, excise or personal property or similar tax, duty, assessment or governmental charge, other than as provided in Section 4.20(i);
(5)in respect of any tax, duty, assessment or other governmental charge which is payable other than by deduction or withholding from payments of principal of (including premium) or interest on the Note;
(6)in respect of any tax imposed on overall net income or any branch profits tax; or
(7)in respect of any combination of the above.
(b)Notwithstanding anything to the contrary in this Section 4.20, none of the Issuer, the Guarantors, their respective successors, the Paying Agent or any other person shall be required to pay any Additional Amounts with respect to any payment in respect of any taxes imposed under Sections 1471 through 1474 of the Code, or any successor law or regulation implementing or complying with, or introduced in order to conform to, such sections, or imposed pursuant to any intergovernmental agreement or any agreement entered into pursuant to section 1471(b)(1) of the Code.
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(c)No Additional Amounts shall be paid with respect to any payment on a Note to a Holder who is a fiduciary, a partnership, a limited liability company or other than the sole beneficial owner of that payment to the extent that payment would be required by the relevant Taxing Jurisdiction to be included in the income, for tax purposes, of a beneficiary or settlor with respect to the fiduciary, a member of that partnership, an interest holder in a limited liability company or a beneficial owner who would not have been entitled to the Additional Amounts had that beneficiary, settlor, member or beneficial owner been the Holder.
(d) Payments on the Notes are subject in all cases to any tax, fiscal or other law or regulation or administrative or judicial interpretation.  
(e)In the event that Additional Amounts actually paid with respect to the Notes are based on rates of deduction or withholding of withholding taxes in excess of the appropriate rate applicable to the Holder of such Notes, and, as a result thereof such Holder is entitled to make claim for a refund or credit of such excess from the authority imposing such withholding tax, then such Holder shall, by accepting such Notes, be deemed to have assigned and transferred all right, title, and interest to any such claim for a refund or credit of such excess to the Issuer.
(f)Any reference in this Indenture or the Notes to principal, interest or any other amount payable in respect of the Notes by the Issuer or the Note Guarantees by the Guarantors (or their successors) will be deemed also to refer to any Additional Amount, unless the context requires otherwise, that may be payable with respect to that amount under the obligations referred to in this Section 4.20.
(g)Each of the Issuer and the Guarantors covenants that if any of the Issuer or the Guarantors, as applicable, is required under applicable law to make any deduction or withholding on payments of principal of or interest on the Notes for or on account of any tax, duty, assessment or other governmental charge, at least 10 days prior to the first payment date on the Notes and at least 10 days prior to each payment date thereafter where such withholding is required, the Issuer or the Guarantor, as applicable, shall furnish the Trustee and the Paying Agent with an Officer’s Certificate (but only if there has been any change with respect to the matters set forth in any previously delivered Officer’s Certificate) instructing the Trustee and the Paying Agent as to whether such payment of principal of or interest on the Notes shall be made without deduction or withholding for or on account of any tax, duty, assessment or other governmental charge, or, if any such deduction or withholding shall be required by the Taxing Jurisdiction, then such certificate shall: (i) specify the amount required to be deducted or withheld on such payment to the relevant recipient; (ii) certify that the Issuer or the Guarantor, as applicable, shall pay such deduction or withholding amount to the appropriate taxing authority and (iii) certify that the Issuer or the Guarantor, as applicable, shall pay or cause to be paid to the Trustee or the Paying Agent such Additional Amounts as are required by this Section 4.20.
(h) Each of the Issuer and the Guarantors (or their respective successors) will pay any Taxes required to be deducted or withheld pursuant to applicable law and will furnish to the Holders (with a copy to the Trustee), within 60 days after the date such payment is due, either certified copies of Tax receipts evidencing such payment, or, if such receipts are not obtainable, other evidence of such payments reasonably satisfactory to the Holders.
(i)The Issuer or the Guarantors, as applicable, will pay when due any present or future stamp, transfer, court or documentary Taxes or any other excise or property Taxes, charges or similar levies and any penalties, additions to Tax or interest due with respect thereto imposed by Chile, Florida, Brazil, the Cayman Islands, Colombia, Ecuador or Peru (or, in each case, any political subdivision or Governmental Authority thereof or therein having power to tax) with respect to the initial execution, delivery or registration of the Notes or any other document or instrument relating thereto.
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(j)Each of the Issuer and the Guarantors agrees to indemnify the Trustee and the Paying Agent for, and to hold each harmless against, any loss, liability or expense reasonably incurred without bad faith on its part arising out of or in connection with actions taken or omitted by it in reliance on any Officer’s Certificate furnished pursuant to this Section 4.20 or any failure to furnish such a certificate.
(k)The obligations of the Issuer and the Guarantors pursuant to this Section 4.20 shall survive termination or discharge of this Indenture, payment of the Notes and/or resignation or removal of the Trustee or the Paying Agent.
Section 4.21.Business Activities; Frequent Flyer Program.
The Issuer will not, and will not permit any of its Restricted Subsidiaries to (a) engage in any business other than Permitted Businesses, except to such extent as would not be material to the Issuer and its Restricted Subsidiaries, taken as a whole, or (b) create or acquire any new Frequent Flyer Program unless (i) the related Frequent Flyer Program Assets are owned by the Issuer or a Guarantor, and (ii) to the extent any such Frequent Flyer Program Assets consist of Pledged Receivables and would not have automatically been pledged and subject to a perfected first priority Lien pursuant to the Security Documents in existence as of the Issue Date, execute and deliver to the Collateral Trustee or the applicable Local Collateral Agent, as applicable (subject to the Guaranty and Security Principles) joinders or collateral supplements to the applicable Security Documents or new Security Documents to create or purport to create and perfect a first priority Lien (subject to Permitted Liens) in such assets in favor of the Collateral Trustee or applicable Local Collateral Agent, as applicable, for the benefit of the Secured Parties within 120 days of such creation or acquisition (or such later date as the Controlling Representative may agree in its sole discretion); provided that clause (b) shall not restrict the acquisition of any Non-Guarantor Acquired Airline so long as the Issuer and its Restricted Subsidiaries continue to operate any existing Frequent Flyer Programs consistent with past practice.
Section 4.22.Negative Pledge Clauses.
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The Issuer will not, and will not permit any of its Restricted Subsidiaries to, enter into or become effective any agreement that prohibits or limits the ability of the Issuer or any Restricted Subsidiary to create, incur, assume or suffer to exist any Lien upon any of its Significant Assets, now owned or hereafter acquired, to secure its obligations under the Notes Documents to which it is a party other than (a) any Priority Lien Debt (so long as any prohibition or restriction in any documentation governing any Priority Lien Debt is not more restrictive in any material respect than this Indenture), including the Revolving Credit Agreement, this Indenture and the 2029 Notes Indenture (and any documentation governing any Permitted Refinancing Indebtedness in respect of the foregoing (and any successive Permitted Refinancing Indebtedness in respect thereof), so long as any such prohibition or restriction in such documentation is not more restrictive in any material respect than the documentation in respect of the Indebtedness being refinanced), (b) the Collateral Trust Agreement and the Local Collateral Agency Agreements, (c) customary prohibitions and restrictions contained in any agreements governing any debt incurred pursuant to clause (8) of Section 4.07(a) or Aircraft Financing (including, without limitation, the RCF Loan Agreement and the Spare Engine Facility Loan Agreement); provided that any such prohibitions and restrictions only apply to the assets financed thereby or the property subject to such lease or arrangement or any interests or agreements related thereto, (d) any such prohibition or limitation in any co-branding agreement, partnering agreement, airline-to-airline frequent flyer program agreement or similar agreement, in each case relating to a Frequent Flyer Program; provided that (i) prior to entering into any new such agreement or arrangement, the Issuer shall use commercially reasonable efforts to have any such agreement not include any such prohibition or limitation and (ii) any such prohibition or limitation shall apply only with respect to the applicable agreement and the proceeds thereof, (e) subject to a Collateral Release Event, in respect of any contract arising in the ordinary course relating to the cargo business of the Issuer and its Restricted Subsidiaries, any prohibition or limitation in any such contract, and any amendments or modifications thereto so long as such amendment or modification does not expand the scope of any such prohibition or limitation in any material respect; provided that (x) any such prohibition or limitation applies only with respect to the applicable agreement and the proceeds thereof and (y) in respect of any such receivables that would otherwise constitute Collateral, the Issuer shall use commercially reasonable efforts to have any such contract not include any such prohibition or limitation, (f) any agreement in effect at the time any Person becomes a Restricted Subsidiary of the Issuer; provided that such agreement was not entered into in contemplation of such Person becoming a Restricted Subsidiary of the Issuer, (g) customary prohibitions and limitations contained in agreements relating to the sale of a Restricted Subsidiary (or the assets of the Issuer or a Restricted Subsidiary) pending such sale; provided that such prohibitions and limitations apply only to the Restricted Subsidiary that is to be sold (or the assets to be sold) and such sale is permitted (or not restricted) hereunder, (h) prohibitions and limitations under agreements evidencing or governing or otherwise relating to Indebtedness not restricted hereby of Restricted Subsidiaries that are not the Issuer or the Guarantors; provided that such prohibitions and limitations are only with respect to assets of such Restricted Subsidiaries, (i) any prohibition or limitation imposed by applicable law, regulation or order, or the terms of any license, authorization, concession or permit issued or granted by a Governmental Authority and (j) any customary prohibitions or limitations arising or agreed to in the ordinary course of business, arising under leases, licenses or other similar contractual arrangements and not relating to any Indebtedness, and that do not (i) restrict assets other than those subject to such leases, licenses or other arrangements or (ii) taken as a whole, materially diminish the value of the Collateral, in each case, as determined by Issuer in good faith.
Section 4.23.Restricted Distribution Clauses.
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The Issuer will not, and will not permit any of its Restricted Subsidiaries to, enter into or become effective any consensual encumbrance or restriction on the ability of any Restricted Subsidiary of the Issuer to pay dividends or distributions or to dividend the proceeds of any Disposition of Significant Assets to the Issuer or another Restricted Subsidiary, except for such encumbrances or restrictions existing under or by reason of (a) any restrictions with respect to a Restricted Subsidiary imposed pursuant to an agreement that has been entered into in connection with the Disposition of all or substantially of the Equity Interests or assets of such Restricted Subsidiary so long as such Disposition is not restricted hereby, (b) any agreement in effect at the time any Person becomes a Restricted Subsidiary of the Issuer; provided that such agreement was not entered into in contemplation of such Person becoming a Restricted Subsidiary of the Issuer, (c) provisions with respect to the Disposition or distribution of assets or property in joint venture agreements, asset sale agreements, agreements in respect of sales of Equity Interests and other similar agreements entered into in connection with transactions not prohibited by this Indenture; provided that such encumbrance or restriction shall only be effective against the assets or property that are the subject to such agreements, (d) any instrument governing Indebtedness or Equity Interests of a Person acquired by the Issuer or any of its Restricted Subsidiaries as in effect on the date of such acquisition, which encumbrance or restriction is not applicable to any Person or the property or assets of any Person, other than the Person, or the properties or assets of such Person, so acquired, (e) customary encumbrances or restrictions contained in Aircraft Financings (including, without limitation, the RCF Loan Agreement and the Spare Engine Facility Loan Agreement) or debt incurred pursuant to clause (8) of Section 4.07(a) to the extent such encumbrances and restrictions apply only to the property subject to such lease or arrangement and (f) any customary prohibitions or limitations arising or agreed to in the ordinary course of business, arising under leases, licenses or other similar contractual arrangements and not relating to any Indebtedness, and that do not (i) restrict assets other than those subject to such lease, license or other arrangements, (ii) taken as a whole, materially diminish the value of the Collateral or (iii) taken as a whole, materially affect the ability of Issuer or any Restricted Subsidiary to make future principal or interest payments on outstanding Indebtedness of Issuer or any Restricted Subsidiary, in each case, as determined by the Issuer in good faith.
Section 4.24.Significant Assets Ownership.
Subject to the provisions described (including the actions permitted) under Section 4.08 and Article 5, the Issuer and each Guarantor will continue to maintain its interest in and right to use all property and assets in its reasonable judgment necessary for the conduct of its business, taken as a whole. Each of the Issuer and the Guarantors shall use, operate and maintain the Significant Assets in the same manner and with the same care as shall be the case with similar assets owned by such Issuer or Guarantor without discrimination.
Section 4.25.Insurance.
The Issuer and Guarantors shall:
(a)keep all Significant Assets that constitute tangible property insured at all times against such risks, including risks insured against by extended coverage, as is prudent and customary in each case with companies of the same or similar size in the same or similar businesses and predominately operating in the same jurisdictions as the Issuer and Guarantors;
(b)maintain such other insurance or self-insurance as may be required by law; and
(c)with respect to any Significant Assets (including, for the avoidance of doubt, each Subsidiary of the Issuer whose Equity Interests have been pledged as Collateral), by the time
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specified in Schedule 4.5 to the Pledge and Security Agreement, (i) ensure that general property insurance and general liability insurance policies are endorsed to the Collateral Trustee’s reasonable satisfaction for the benefit of the Collateral Trustee (including, without limitation, by naming the Collateral Trustee as certificate holder, mortgagee and loss payee or additional insured) and (ii) ensure that such endorsements shall state that such insurance policies shall not be cancelled or materially adversely changed without at least thirty (30) days’ prior written notice thereof, except in the case of a cancellation or material adverse change resulting from war, which shall require at least seven (7) days’ prior written notice thereof, by the respective insurer to the Collateral Trustee.
Section 4.26.Release of Collateral Upon Collateral Release Event.
(a)At the Issuer’s request, the Lien on any Supplemental Collateral (either all or a portion thereof, and including after-acquired assets of that type or category) will be released (any such release, a “Collateral Release Event,” and the released assets subject of a Collateral Release Event, the “Released Assets”); provided that in each case, the following conditions are satisfied or waived:
(1)As of the calculation date set forth in the Collateral Release Event Notice (which shall be considered a Reference Date for the purposes of this calculation), the Asset Coverage Test (calculated based on an Appraised Value of the Coverage Assets (after giving effect to such Collateral Release Event) delivered to the Trustee and the Collateral Trustee no more than 120 days prior to such calculation date) is satisfied on a Pro Forma Basis;
(2)the Released Assets shall no longer secure any Priority Lien Debt or Junior Lien Indebtedness (including after any concurrent release of Liens on such Released Assets securing such Priority Lien Debt or Junior Lien Indebtedness, as permitted pursuant to the Priority Lien Documents and the Junior Lien Documents);
(3)no release of Permanent Collateral shall be permitted;
(4)no Event of Default shall have occurred and be continuing or would result from such Collateral Release Event; and
(5)the Issuer shall deliver an Officer’s Certificate to the Trustee and the Collateral Trustee certifying that the foregoing conditions have been satisfied (the “Collateral Release Event Notice”), which Collateral Release Event Notice shall include (A) the calculation date as of which the Asset Coverage Test was measured, (B) a reasonably detailed description of the basis for the calculation of the Asset Coverage Test, (C) a description of the Released Assets and (D) a representation that the conditions thereto have been satisfied.
(b)Upon the occurrence of a Collateral Release Event, (i) any Guarantor that holds no Significant Assets (after giving effect to such Collateral Release Event) other than (A) Released Assets in respect of such Collateral Release Event, (B) intercompany and third-party loans, (C) any Cargo Business Assets relating to the portion of the cargo business of the Issuer and its Restricted Subsidiaries for which such Released Assets are used or in the jurisdiction in which such Released Assets are located, in each case as determined in good faith by the Issuer, and/or (4) directly or indirectly, Equity Interests in Subsidiaries whose Significant Assets (after giving effect to such Collateral Release Event) consist only of the foregoing clauses (A), (B) and/or (C), shall be automatically released from all Obligations under its Note Guarantee and (ii) the Liens on the Equity Interests in such Guarantor shall be a Released Asset and shall be released and no longer be part of the Collateral.
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(c)Upon the receipt of a Collateral Release Event Notice in respect of any Released Assets, the Collateral Trustee shall, subject to Sections 10.05 and 12.03, at the sole cost and expense of the Issuer and without recourse or warranty, without further instructions or notices from the Controlling Representative, the Trustee or any other Priority Lien Representative or Junior Lien Representative, or otherwise, undertake any and all actions and deliver any other notices or instructions required to implement or evidence the releases set forth in Section 4.26(b) including, without limitation, (i) executing any amendments to the Collateral Trust Agreement, the Pledge and Security Agreement, any other Security Document and any related documents reasonably requested by the Issuer, (ii) promptly filing or authorizing the filing of, executing and delivering, as applicable, to the Issuer, for filing by the Issuer, all UCC-3 amendment statements and similar documents, including Intellectual Property releases, that the Issuer shall reasonably request in the Collateral Release Event Notice to evidence the release of the Collateral Trustee’s Lien on the Released Assets and (iii) performing such other actions reasonably requested by the Issuer to effect such release of the Released Assets, including delivery of certificates, securities and instruments and instructing the Local Collateral Agents to undertake any and all actions (including executing any applicable amendments to the Security documents, and recording any applicable local filings) to implement or evidence such release. Any execution and delivery of documents pursuant to this Section 4.26(c) shall be without recourse to or representation or warranty by the Collateral Trustee or any Secured Party. Without limiting the provision of this Section 4.26(c), the Issuer shall reimburse (or cause to be reimbursed) the Collateral Trustee in accordance with the Priority Lien Documents for all reasonable and documented fees, out-of-pocket costs and expenses, including the fees, charges and expenses of counsel, incurred by it in connection with any action contemplated by this Section 4.26(c). For the avoidance of doubt and notwithstanding anything provided for in this Section 4.26(c), a security interest and Lien shall continue in any Proceeds, products, rents and profits of any of the foregoing Collateral in respect of which the security interest has been released.
(d)Upon a Collateral Release Event, (i) if any Released Assets include Cargo Business Assets, the “Coverage Assets” shall no longer include any such Released Assets or any Cargo Business Assets relating to the portion of the cargo business of the Issuer and its Restricted Subsidiaries for which such Released Assets are used or in the jurisdiction in which such Released Assets are located, in each case as determined in good faith by the Issuer and (ii) if any Released Assets include Pledged SGR, the “Coverage Assets” shall no longer include any such Released Assets.
(e)For the avoidance of doubt, the Issuer may send multiple Collateral Release Event Notices, and there can be multiple Collateral Release Events.
Article 5

SUCCESSORS
Section 5.01.Merger, Consolidation, or Sale of Assets.
(a)None of the Issuer or any of its Restricted Subsidiaries (whichever is applicable, the “Subject Company”) shall, directly or indirectly, (i) consolidate or merge with or into another Person (whether or not such Subject Company is the surviving Person) or (ii) Dispose of all or substantially all of the properties or assets of the Subject Company and its Restricted Subsidiaries, taken as a whole, in one or more related transactions, to another Person; provided that:
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(1)this Section 5.01(a) shall not restrict the foregoing actions by the Issuer if:
(A)(x) the Issuer is the surviving Person or (y) the Person formed by or surviving any such consolidation or merger (if other than the Issuer) or to which such Disposition has been made is an entity organized or existing under the laws of a Specified Jurisdiction, and, if such entity is not a corporation, a co-obligor of the Notes is a corporation organized or existing under any such laws;
(B)the Person formed by or surviving any such consolidation or merger (if other than the Issuer) or the Person to which such Disposition has been made assumes all the obligations of the Subject Company under the Notes Documents by operation of law (if the surviving Person is the Issuer) or pursuant to Section 4.13 or otherwise pursuant to a supplemental indenture and such amendments or supplements to the Security Documents as are necessary to effect such assumption;
(C)immediately after such transaction, no Default or Event of Default exists;
(D)with respect to any merger or consolidation by the Issuer with any Guarantor or any Disposition by the Issuer, after giving effect thereto, the interests of the holders in respect of the Collateral are not adversely affected; and
(E)the Subject Company shall have delivered to the Trustee an Officer’s Certificate stating that such consolidation, merger or Disposition complies with the applicable provisions of this Indenture;
(2)any Restricted Subsidiary of the Issuer that is not the Issuer or a Guarantor may consolidate or merge with or into the Issuer or a Guarantor or Dispose of all or substantially all of its properties to the Issuer or a Guarantor so long as, with respect to any consolidation or merger either (A) such Issuer or Guarantor is the surviving Person or (B) (1) the Person formed or surviving any such consolidation (if other than such Issuer or Guarantor) is an entity organized or existing under the laws of a Specified Jurisdiction and (2) the Person formed by or surviving any such consolidation or merger assumes all the obligations of such Issuer or Guarantor under the Notes Documents by operation of law or pursuant to Section 4.13 or otherwise pursuant to agreements reasonably satisfactory to the Trustee and the Collateral Trustee;
(3)any Guarantor may consolidate or merge with or into either Issuer or any Guarantor or Dispose of all or substantially all of its properties to either Issuer or another Guarantor so long as (x) after giving effect thereto, the interests of the holders in respect of the Collateral are not adversely affected and (y) in the case of any Disposition, the transferee is the Issuer or a Guarantor and the transferee is either (1) in the same jurisdiction as the transferor, (2) a Specified Jurisdiction or (3) another jurisdiction reasonably satisfactory to the Controlling Representative;
(4)any Restricted Subsidiary that is not the Issuer or a Guarantor may consolidate or merge with or into any other Restricted Subsidiary that is not the Issuer or a Guarantor or Dispose of all or substantially all of its properties to a Restricted Subsidiary that is not the Issuer or a Guarantor; provided that (x) with respect to any consolidation or merger between a Restricted Subsidiary whose Equity Interests constitute Collateral and a Restricted Subsidiary whose Equity Interests do not constitute Collateral, the Restricted Subsidiary whose Equity Interests constitute Collateral shall be the surviving Person and (y) no Subsidiary whose Equity Interests constitute Collateral may Dispose of all or substantially all of its properties to a Restricted Subsidiary whose Equity Interests do not constitute Collateral, unless, in each case, under (x) and (y), (1) such Equity Interests of the applicable Restricted Subsidiary (the “Subject Entity”) that do not constitute Collateral as of the date of such consolidation or merger are promptly pledged as Collateral on or following the consummation of such consolidation or merger and (2) the Subject Entity is organized in a Security Jurisdiction (as defined in the Guaranty and Security Principles) or a different jurisdiction reasonably satisfactory to the Controlling Representative;
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(5)any Permitted Investment may be structured as a merger or consolidation (provided that (x) if the Issuer is a party to such merger or consolidation, such Issuer shall be the surviving Person thereof, (y) if the Issuer or a Guarantor is a party to such merger or consolidation, such Issuer or Guarantor shall be the surviving Person thereof and (z) if a Restricted Subsidiary that is not the Issuer or a Guarantor is a party to such merger or consolidation, such Restricted Subsidiary shall be the surviving Person thereof);
(6)any merger, consolidation, dissolution or liquidation, in each case, not involving the Issuer, may be effected for the purposes of effecting a Disposition permitted by this Indenture; and
(7)the dissolution of any Restricted Subsidiary (that is not the Issuer or a Guarantor) with no or de minimis assets is permitted.
Section 5.02.Successor Corporation Substituted.
Upon any consolidation or merger, or any sale, assignment, transfer, lease, conveyance or other disposition of all or substantially all of the properties or assets of any Subject Company in a transaction that is subject to, and that complies with the provisions of clauses (1) and (2) of Section 5.01(a), the successor Person formed by such consolidation or into or with which such Subject Company is merged or to which such sale, assignment, transfer, lease, conveyance or other disposition is made shall succeed to, and be substituted for (so that from and after the date of such consolidation, merger, sale, assignment, transfer, lease, conveyance or other disposition, the provisions of this Indenture and the other Notes Documents referring to such Subject Company shall refer instead to the successor Person and not to such Subject Company), and may exercise every right and power of such Subject Company under this Indenture and the other Notes Documents with the same effect as if such successor Person had been named as such Subject Company herein and therein; provided, however, that the predecessor Subject Company (in the case of the Issuer), if applicable, shall not be relieved from the obligation to pay the principal of, and interest, if any, on the Notes except in the case of a sale of all of such Subject Company’s assets in a transaction that is subject to, and that complies with the provisions of clause (1) of Section 5.01(a).
Article 6

DEFAULTS AND REMEDIES
Section 6.01.Events of Default.
Each of the following is an “Event of Default” with respect to the Notes:
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(1)default in the payment of any installment of interest (including Special Interest, if any) on the Notes for 30 days after becoming due and payable;
(2)default in the payment of principal of or premium, if any, on the Notes when they become due and payable at their Stated Maturity, upon redemption, by declaration or otherwise;
(3)failure by the Issuer or any Guarantor to comply with the provisions of Sections 4.12 or 5.01 hereof;
(4)failure by the Issuer or any Guarantor to observe or perform any covenant or agreement in the Notes Documents applicable to the Notes, which continues for a period of 60 days after the notice specified in this Section 6.01;
(5)(a) the Issuer or any Guarantor shall default in the performance of any obligation relating to Material Indebtedness and any applicable grace periods shall have expired and any applicable notice requirements shall have been complied with, and as a result of such default the holder or holders of such Material Indebtedness or any trustee or agent on behalf of such holder or holders shall have caused such Material Indebtedness to become due prior to its scheduled final maturity date or (b) the Issuer or any Guarantor shall default in making any payment in respect of any Material Indebtedness outstanding under one or more agreements of the Issuer or a Guarantor, any applicable grace periods shall have expired and any applicable notice requirements shall have been complied with;
(6)failure by the Issuer or any of its Restricted Subsidiaries to pay judgments by a court or courts of competent jurisdiction aggregating in excess of [*] (determined net of amounts covered by insurance policies issued by creditworthy insurance companies), which judgments are not paid, discharged or stayed for a period of sixty (60) days;
(7)except as permitted by this Indenture, any Note Guarantee is held in any judicial proceeding to be unenforceable or invalid or ceases for any reason to be in full force and effect, or any Guarantor denies or disaffirms in writing its obligations under such Note Guarantee;
(8)(a) any material provision of any Notes Document ceases to be valid and binding obligations of the Issuer or any applicable Guarantor party thereto, or the Issuer or any applicable Guarantor party thereto shall so assert in any pleading filed in any court, (b) the Issuer or any other Person contests in writing the validity or enforceability of any provision of any Notes Document; or the Issuer denies in writing that it has any or further liability or obligation under any Notes Document, or purports in writing to revoke, terminate or rescind the Notes, this Indenture or any Security Document, or (c) the Liens on any material portion of the Collateral intended to be created by the Notes Documents shall cease to be or shall not be a valid and perfected Lien having the priorities required by this Indenture or by the Collateral Trust Agreement, the Junior Lien Intercreditor Agreement or any other Intercreditor Agreement, as applicable (except as permitted by the terms of this Indenture or such Security Documents);
(9)the Issuer, any Guarantor or any Significant Subsidiary of the Issuer pursuant to or within the meaning of Bankruptcy Law:
(A)commences a voluntary case,
(B)consents to the entry of an order for relief against it in an involuntary case,
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(C)consents to the appointment of a custodian of it or for all or substantially all of its property,
(D)makes a general assignment for the benefit of its creditors, or
(E)generally is not paying its debts as they become due; and
(10)a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that:
(A)is for relief against the Issuer, any Guarantor or any Significant Subsidiary of the Issuer in an involuntary case;
(B)appoints a custodian of the Issuer, any Guarantor or any Significant Subsidiary of the Issuer; or
(C)orders the liquidation of the Issuer, any Guarantor or any Significant Subsidiary of the Issuer;
and the order or decree remains unstayed and in effect for 60 consecutive days;
Notwithstanding the foregoing, any time period set forth above to cure any actual or alleged default or Event of Default may be extended or stayed by a court of competent jurisdiction.
A Default under clause (4) of Section 6.01 above will not constitute an Event of Default with respect to the Notes until the Trustee notifies the Issuer or the Holders of at least 25% in principal amount of the outstanding Notes notify the Issuer and the Trustee of the Default (such notice being a “Notice of Default”) and the Issuer (or the applicable Guarantor, as the case may be) does not cure such Default within 60 days after receipt of such notice. Such notice must specify the Default, demand that it be remedied and state that such notice is a “Notice of Default.”
Section 6.02.Acceleration.
In the case of an Event of Default specified in clause (9) or (10) of Section 6.01 hereof, with respect to the Issuer, any Guarantor or any Significant Subsidiary of the Issuer, the principal of and premium, if any, and accrued and unpaid interest (including Special Interest, if any) on all outstanding Notes will become due and payable immediately without any declaration or further action or notice on the part of the Trustee or any Holder. If any other Event of Default occurs and is continuing with respect to the Notes, the Trustee or the Holders of at least 25% in aggregate principal amount of the then outstanding Notes may, by written notice to the Issuer (and to the Trustee if such notice is given by the Holders), declare all the Notes to be due and payable immediately.
Upon any such declaration, the principal of and premium, if any, and accrued and unpaid interest (including Special Interest, if any) on the Notes shall become due and payable immediately.
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Holders of a majority in aggregate principal amount of the then outstanding Notes by written notice to the Trustee may, on behalf of the Holders of all of the Notes, rescind an acceleration and its consequences hereunder, except a continuing Default or Event of Default in the payment of principal of, premium on, if any, or interest (including Special Interest, if any) on, the Notes, if the rescission would not conflict with any judgment or decree and if all Events of Default with respect to the Notes, other than the non-payment of principal or interest which have become due solely by such acceleration, have been cured or waived.
If the Notes are accelerated or otherwise become due prior to their Stated Maturity, in each case as a result of an Event of Default (including, but not limited to, an Event of Default specified in clause (9) or (10) of Section 6.01 (including the acceleration of any portion of the Indebtedness evidenced by the Notes by operation of law)), the amount that shall then be due and payable shall be equal to:
(1)(i) 100% of the principal amount of the Notes then outstanding plus the Applicable Premium in effect on the date of such acceleration or (ii) the applicable redemption price as set forth in Section 3.07(d) in effect on the date of such acceleration, as applicable, plus
(2)accrued and unpaid interest, if any, to, but excluding, the date of such acceleration, in each case as if such acceleration were an optional redemption pursuant to Section 3.07 of the Notes so accelerated.
Without limiting the generality of the foregoing, it is understood and agreed that if the Notes are accelerated or otherwise become due prior to their Stated Maturity, in each case, as a result of an Event of Default (including, but not limited to, an Event of Default specified in clause (9) or (10) of Section 6.01 (including the acceleration of any portion of the Indebtedness evidenced by the Notes by operation of law)), the Applicable Premium or the amount by which the applicable redemption price exceeds the principal amount of the Notes (the “Redemption Price Premium”), as applicable, with respect to an optional redemption of the Notes shall also be due and payable as though the Notes had been optionally redeemed on the date of such acceleration and shall constitute part of the Obligations with respect to the Notes in view of the impracticability and difficulty of ascertaining actual damages and by mutual agreement of the parties as to a reasonable calculation of each Holder’s lost profits as a result thereof. If the Applicable Premium or the Redemption Price Premium, as applicable, becomes due and payable, it shall be deemed to be principal of the Notes, and interest shall accrue on the full principal amount of the Notes (including the Applicable Premium or the Redemption Price Premium, as applicable) from and after the applicable triggering event, including in connection with an Event of Default specified in clause (9) or (10) of Section 6.01. Any premium payable pursuant to this Section 6.02 shall be presumed to be liquidated damages sustained by each Holder of Notes as the result of the acceleration of the Notes, and the Issuer agrees that it is reasonable under the circumstances currently existing. The premium shall also be payable in the event the Notes or this Indenture are satisfied, released or discharged through foreclosure, whether by judicial proceeding, deed in lieu of foreclosure or by any other means. THE ISSUER AND EACH GUARANTOR EXPRESSLY WAIVES (TO THE FULLEST EXTENT THEY MAY LAWFULLY DO SO) THE PROVISIONS OF ANY PRESENT OR FUTURE STATUTE OR LAW THAT PROHIBITS OR MAY PROHIBIT THE COLLECTION OF THE FOREGOING PREMIUM IN CONNECTION WITH ANY SUCH ACCELERATION.
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The Issuer expressly agrees (to the fullest extent they may lawfully do so) that: (A) the premium is reasonable and is the product of an arm’s length transaction between sophisticated business parties, ably represented by counsel; (B) the premium shall be payable notwithstanding the then prevailing market rates at the time payment is made; (C) there has been a course of conduct between the Holders of Notes and the Issuer giving specific consideration in this transaction for such agreement to pay the premium; and (D) the Issuer and the Guarantors shall be estopped hereafter from claiming differently than as agreed to in this Section 6.02. The Issuer and the Guarantors expressly acknowledge that their agreement to pay the premium to the Holders of Notes as herein described is a material inducement to the Holders of Notes to purchase the Notes.
Section 6.03.Other Remedies.
If an Event of Default with respect to the Notes occurs and is continuing, the Trustee may pursue any available remedy to collect the payment of principal, premium, if any, and interest (including Special Interest, if any) on the Notes or to enforce the performance of any provision of the Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any of the Notes or does not produce any of them in the proceeding. A delay or omission by the Trustee or any Holder in exercising any right or remedy accruing upon an Event of Default with respect to the Notes shall not impair the right or remedy or constitute a waiver of or acquiescence in the Event of Default. All remedies are cumulative to the extent permitted by law.
Section 6.04.Waiver of Past Defaults.
Holders of not less than a majority in aggregate principal amount of the then outstanding Notes by written notice to the Trustee may, on behalf of the Holders of all of the Notes, waive an existing Default or Event of Default and its consequences hereunder, except a continuing Default or Event of Default in the payment of the principal of, premium, if any, or interest (including Special Interest, if any) on, the Notes (including in connection with an offer to purchase); provided, however, that the Holders of a majority in aggregate principal amount of the then outstanding Notes may rescind an acceleration and its consequences pursuant to Section 6.02 hereof. Upon any such waiver, such Default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured for every purpose of this Indenture, but no such waiver shall extend to any subsequent or other Default or impair any right consequent thereon.
Section 6.05.Control by Majority.
Holders of a majority in aggregate principal amount of the then outstanding Notes may direct the time, method and place of conducting any proceeding for exercising any remedy available to the Trustee with respect of the Notes or exercising any trust or power conferred to the Trustee. However, the Trustee may refuse to follow any direction that conflicts with law or this Indenture or the Notes or that the Trustee determines is unduly prejudicial to the rights of other Holders or would involve the Trustee in personal liability (it being understood that the Trustee has no duty to determine if any directed action is prejudicial to any Holder).
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Prior to taking any such action hereunder, the Trustee shall be entitled to indemnification satisfactory to it against all fees, losses, liabilities and expenses (including attorney’s fees and expenses) that may be caused by taking or not taking such action.
Section 6.06.Limitation on Suits.
Except to enforce the right to receive payment of principal, premium, if any, or interest (including Special Interest, if any) when due, no Holder may pursue any remedy with respect to this Indenture or the Notes unless:
(1)an Event of Default has occurred and is continuing with respect to the Notes, and such Holder has given the Trustee prior written notice that an Event of Default with respect to the Notes is continuing;
(2)Holders of at least 25% in aggregate principal amount of the then outstanding Notes make a written request to the Trustee to pursue the remedy;
(3)such Holder or Holders of Notes offer and, if requested, provide to the Trustee security or indemnity satisfactory to the Trustee against any loss, liability or expense;
(4)the Trustee does not comply with the request within 60 days after receipt of the request and the offer or provision of security or indemnity; and
(5)during such 60-day period, Holders of a majority in aggregate principal amount of the then outstanding Notes do not give the Trustee a direction inconsistent with such request.
A Holder of Notes may not use this Indenture to prejudice the rights of another Holder or to obtain a preference or priority over another Holder (it being understood that the Trustee does not have an affirmative duty to ascertain whether or not actions or forbearances by a Holder would prejudice the rights of another Holder or result in a preference of priority over another Holder).
Section 6.07.Rights of Holders of Notes to Receive Payment.
Notwithstanding any other provision of this Indenture, the right of any Holder to receive payment of principal, premium, if any, and interest on the Note (including Special Interest, if any), on or after the respective due dates expressed in the Note (including in connection with an offer to purchase), or to bring suit for the enforcement of any such payment on or after such respective dates, shall not be impaired or affected without the consent of such Holder.
Section 6.08.Collection Suit by Trustee.
If an Event of Default specified in Section 6.01(1) or (2) hereof occurs and is continuing with respect to the Notes, the Trustee is authorized to recover judgment in its own name and as Trustee of an express trust against the Issuer for the whole amount of principal of, premium, if any, and interest (including Special Interest, if any) remaining unpaid on, the Notes and interest (including Special Interest, if any) on overdue principal and, to the extent lawful, interest and such further amount as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Trustee, the Collateral Trustee, their agents and counsel.
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Section 6.09.Trustee May File Proofs of Claim.
The Trustee is authorized to file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for the reasonable compensation, expenses, disbursements and advances of the Trustee, the Collateral Trustee, their agents and counsel) and the Holders of Notes allowed in any judicial proceedings relative to the Issuer (or any other obligor upon the Notes), its creditors or its property and shall be entitled and empowered to collect, receive and distribute any money or other property payable or deliverable on any such claims and any custodian in any such judicial proceeding is hereby authorized by each Holder to make such payments to the Trustee, and in the event that the Trustee shall consent to the making of such payments directly to the Holders of Notes, to pay to the Trustee and Collateral Trustee any amount due to each of them for the reasonable compensation, expenses, disbursements and advances of the Trustee, the Collateral Trustee, their agents and counsel, and any other amounts due the Trustee under Section 7.06 hereof and the Collateral Trustee under Section 12.05 hereof. To the extent that the payment of any such compensation, expenses, disbursements and advances of the Trustee, the Collateral Trustee, their agents and counsel, and any other amounts due the Trustee under Section 7.06 hereof and the Collateral Trustee under Section 12.05 hereof out of the estate in any such proceeding, shall be denied for any reason, payment of the same shall be secured by a Lien on, and shall be paid out of, any and all distributions, dividends, money, securities and other properties that the Holders of Notes may be entitled to receive in such proceeding whether in liquidation or under any plan of reorganization or arrangement or otherwise. Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Holder any plan of reorganization, arrangement, adjustment or composition affecting the Notes or the rights of any Holder, or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding.
Section 6.10.Priorities.
Subject to the Collateral Trust Agreement and the Intercreditor Agreements, if, in connection with any Event of Default or acceleration of the Notes, the Trustee collects any money pursuant to this Article 6 or, while an Event of Default with respect to the Notes is continuing, any other money or property distributable in respect of the obligations of the Issuer or any Guarantor under this Indenture, it shall pay out the money in the following order:
First: to the Trustee, its agents and attorneys for amounts due under Section 7.06 hereof, including, as applicable, payment of all reasonable compensation, out-of-pocket expenses and liabilities incurred, and all advances made, by the Trustee and the costs and reasonable out-of-pocket expenses of collection; Second: to Holders of Notes for amounts due and unpaid on the Notes for principal, premium, if any, and interest (including Special Interest, if any), ratably, without preference or priority of any kind, according to the amounts due and payable on the Notes for principal, premium, if any and interest (including Special Interest, if any), respectively; and
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Third: to the Issuer, the Guarantors, if applicable, or to such party as a court of competent jurisdiction shall direct.
The Trustee, upon prior notice to the Issuer, may fix a record date and payment date for any payment to Holders of Notes pursuant to this Section 6.10.
Section 6.11.Undertaking for Costs
In any suit for the enforcement of any right or remedy under this Indenture or in any suit against the Trustee for any action taken or omitted by it as a Trustee, a court in its discretion may require the filing by any party litigant in the suit of an undertaking to pay the costs of the suit, and the court in its discretion may assess reasonable costs, including reasonable attorneys’ fees, against any party litigant in the suit, having due regard to the merits and good faith of the claims or defenses made by the party litigant. This Section 6.11 does not apply to a suit by the Trustee, a suit by a Holder pursuant to Section 6.07 hereof, or a suit by Holders of more than 10% in aggregate principal amount of the then outstanding Notes.
Article 7

TRUSTEE
Section 7.01.Duties of Trustee.
(a)If an Event of Default has occurred and is continuing, the Trustee will exercise such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill in its exercise, as a prudent person would exercise or use under the circumstances in the conduct of such person’s own affairs.
(b)Except during the continuance of an Event of Default:
(1)the duties of the Trustee will be determined solely by the express provisions of this Indenture, and the Trustee need perform only those duties that are specifically set forth in this Indenture and no others, and no implied covenants or obligations shall be read into this Indenture against the Trustee; and
(2)in the absence of negligence or willful misconduct on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture.
However, the Trustee will examine the certificates and opinions to determine whether or not they conform to the requirements of this Indenture.
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(c)The Trustee may not be relieved from liabilities for its own negligent action, its own negligent failure to act, or its own willful misconduct, except that:
(1)this paragraph does not limit the effect of paragraph (b) of this Section 7.01;
(2)the Trustee will not be liable for any error of judgment made in good faith by a Responsible Officer, unless it is proved that the Trustee was negligent in ascertaining the pertinent facts; and
(3)the Trustee will not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it pursuant to Section 6.05 hereof or in accordance with the direction of a majority in aggregate principal amount of Notes outstanding relating to the exercise of any right or power of the Trustee under this Indenture.
(d)Whether or not therein expressly so provided, every provision of this Indenture that in any way relates to the Trustee is subject to paragraphs (a), (b), (c), and (e) of this Section 7.01.
(e)No provision of this Indenture will require the Trustee to expend or risk its own funds or incur any liability. The Trustee will be under no obligation to exercise any of its rights and powers under this Indenture at the request or direction of any Holders of Notes, unless such Holder has offered, and if requested, provided to the Trustee security and indemnity satisfactory to it against any loss, liability or expense.
(f)The Trustee will not be liable for interest on any money received by it except as the Trustee may agree in writing with the Issuer. Money held in trust by the Trustee need not be segregated from other funds except to the extent required by law.
(g)The Trustee is hereby authorized to execute the Collateral Trust Agreement, the Local Collateral Agency Agreements, any Intercreditor Agreements and any other Security Document to which it may be a party and perform its obligations in accordance with their terms, and whether or not expressly stated therein, the rights, privileges, protections, immunities and benefits given to the Trustee, including, without limitation, its right to be compensated, reimbursed and indemnified, are extended to the Trustee’s execution and performance of each such agreement.
(h)At any time that the Trustee is the Controlling Representative, the Trustee shall be entitled to act or refrain from acting in accordance with direction from a majority of aggregate principal amount of the Notes, and shall have no obligation to take any discretionary action or make any determination in the absence of such direction, accompanied by, if requested, indemnity or security satisfactory to the Trustee.
Section 7.02.Rights of Trustee.
(a)The Trustee may conclusively rely upon any document believed by it to be genuine and to have been signed or presented by the proper Person. The Trustee need not investigate any fact or matter stated in the document.
(b)Before the Trustee acts or refrains from acting, it may require an Officer’s Certificate or an Opinion of Counsel or both. The Trustee will not be liable for any action it takes or omits to take in good faith in reliance on such Officer’s Certificate or Opinion of Counsel. The Trustee may consult with counsel and the advice of such counsel or any Opinion of Counsel will be full and complete authorization and protection from liability in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon.
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(c)The Trustee may act through its attorneys and agents and will not be responsible for the misconduct or negligence of any agent appointed with due care.
(d)The Trustee will not be liable for any action it takes or omits to take in good faith that it believes to be authorized or within the rights or powers conferred upon it by this Indenture.
(e)Unless otherwise specifically provided in this Indenture, any demand, request, direction or notice from the Issuer will be sufficient if signed by an Officer of the Issuer.
(f)Whenever in the administration of this Indenture the Trustee shall deem it desirable that a matter be proved or established prior to taking, suffering or omitting any action hereunder, the Trustee (unless other evidence be herein specifically prescribed) may, in the absence of bad faith on its part, conclusively rely upon an Officer’s Certificate.
(g)The Trustee will be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction of any of the Holders of Notes unless such Holders of Notes have offered, and if requested, provided to the Trustee indemnity or security satisfactory to the Trustee against the losses, liabilities and expenses that might be incurred by it in compliance with such request or direction.
(h)In no event shall the Trustee be responsible or liable for special, indirect, punitive, incidental or consequential loss or damage of any kind whatsoever (including, but not limited to, loss of profit) irrespective of whether the Trustee has been advised of the likelihood of such loss or damage and regardless of the form of action.
(i)The Trustee shall not be deemed to have notice of any Default or Event of Default unless a Responsible Officer of the Trustee has actual knowledge thereof or unless written notice of any event which is in fact such a Default or Event of Default is received by the Trustee at the Corporate Trust Office of the Trustee, and such notice references the Notes and this Indenture.
(j)The rights, privileges, protections, immunities and benefits given to the Trustee, including, without limitation, its right to be indemnified, are extended to, and shall be enforceable by, the Trustee in each of its capacities hereunder and under the other Note Documents and by the Collateral Trustee.
(k)The Trustee shall not be required to give any bond or surety in respect of the performance of its powers and duties hereunder.
(l)The permissive rights of the Trustee enumerated herein and in the other Note Documents shall not be construed as duties.
Section 7.03.Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become the owner or pledgee of Notes and may become a creditor of, or otherwise deal with the Issuer or any of its Affiliates with the same rights it would have if it were not Trustee. However, in the event that the Trustee acquires any conflicting interest it must eliminate such conflict within 90 days, apply to the SEC for permission to continue as trustee or resign. Any Agent and the Collateral Trustee may do the same with like rights and duties. The Trustee is also subject to Section 7.09 hereof.
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Section 7.04.Trustee’s Disclaimer.
The Trustee will not be responsible for and makes no representation as to the validity or adequacy of this Indenture, the Notes, the Note Guarantees, the Security Documents or the Collateral, it shall not be accountable for the Issuer’s use of the proceeds from the Notes or any money paid to the Issuer or upon the Issuer’s direction under any provision of this Indenture, it will not be responsible for the use or application of any money received by any Paying Agent other than the Trustee, and it will not be responsible for any statement or recital herein or any statement in the Offering Memorandum, the Notes or any other document in connection with the sale of the Notes or pursuant to this Indenture other than its certificate of authentication.
The Trustee shall not be responsible for the existence, genuineness or value of any of the Collateral or for the validity, perfection, priority or enforceability of the Liens in any of the Collateral, whether impaired by operation of law or by reason of any action or omission to act on its part hereunder, for the validity or sufficiency of the Collateral or any agreement or assignment contained therein. Beyond the exercise of reasonable care in the custody of Collateral in its possession, the Trustee will not have any duty as to any Collateral in its possession or control or in the possession or control of any agent or bailee or any income thereon or as to preservation of rights against prior parties or any other rights pertaining thereto (except as required under applicable law), and neither the Trustee nor the Collateral Trustee will be responsible for filing any financing or continuation statements or recording any documents or instruments in any public office at any time or times or otherwise perfecting or maintaining the perfection of any Liens on the Collateral. The Trustee will be deemed to have exercised reasonable care in the custody of the Collateral in its possession if the Collateral is accorded treatment substantially equal to that which it accords its own property, and the Trustee will not be liable or responsible for any loss or diminution in the value of any of the Collateral by reason of the act or omission of any carrier, forwarding agency or other agent or bailee selected by the Trustee in good faith.
Section 7.05.Notice of Defaults.
If a Default or Event of Default occurs and is continuing and if it is known to the Trustee, the Trustee will mail to Holders of Notes a notice of the Default or Event of Default within the later of 90 days after it occurs and promptly after obtaining knowledge thereof. Except in the case of a Default or Event of Default in payment of principal of, premium, if any, or interest (including Special Interest, if any) on, any Note, the Trustee may withhold the notice if and so long as a committee of its Responsible Officers in good faith determines that withholding the notice is in the interests of the Holders of Notes.
Section 7.06.Compensation and Indemnity.
(a)The Issuer will pay to the Trustee from time to time reasonable compensation for its acceptance of this Indenture and services hereunder. The Trustee’s compensation will not be limited by any law on compensation of a trustee of an express trust. The Issuer will reimburse the Trustee promptly upon request for all reasonable disbursements, advances and expenses incurred or made by it in addition to the compensation for its services. Such expenses will include the reasonable compensation, disbursements and expenses of the Trustee’s agents and counsel.
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(b)The Issuer and the Guarantors, jointly and severally, will indemnify the Trustee against any and all losses, liabilities or expenses incurred by it arising out of or in connection with the acceptance or administration of its duties under this Indenture and the other Notes Documents, including the costs and expenses of enforcing this Indenture and the other Notes Documents against the Issuer or any Guarantor (including this Section 7.06) and defending itself against any claim (whether asserted by the Issuer, any Guarantor, any Holder or any other Person) or liability in connection with the exercise or performance of any of its powers or duties hereunder or thereunder, except to the extent any such loss, liability or expense may be attributable to its own negligence or willful misconduct as determined by a final non-appealable order of a court of competent jurisdiction. The Trustee will notify the Issuer promptly of any claim for which it may seek indemnity. Failure by the Trustee to so notify the Issuer will not relieve the Issuer of its obligations hereunder. The Issuer will defend the claim and the Trustee will cooperate in the defense. The Trustee may have separate counsel, and the Issuer will pay the reasonable fees and expenses of such counsel. The Issuer shall not pay for any settlement made without its consent, which consent will not be unreasonably withheld.
(c)The obligations of the Issuer under this Section 7.06 will survive the satisfaction and discharge of this Indenture and the resignation or removal of the Trustee.
(d)To secure the Issuer’s payment obligations in this Section 7.06, the Trustee will have a Lien prior to the Notes on all money or property held or collected by the Trustee, except that held in trust to pay principal and interest on particular Notes. Such Lien will survive the satisfaction and discharge of this Indenture and the resignation or removal of the Trustee. The Trustee’s rights to receive payment of any amounts due under this Section 7.06 shall not be subordinate to any other liability or Indebtedness of the Issuer.
(e)When the Trustee incurs expenses or renders services after an Event of Default specified in Section 6.01(9) or (10) hereof occurs, the expenses and the compensation for the services (including the fees and expenses of its agents and counsel) are intended to constitute expenses of administration under any Bankruptcy Law.
Section 7.07.Replacement of Trustee.
(a)A resignation or removal of the Trustee and appointment of a successor Trustee will become effective only upon the successor Trustee’s acceptance of appointment as provided in this Section 7.07.
(b)The Trustee may resign in writing at any time and be discharged from the trust hereby created by so notifying the Issuer. The Holders of a majority in aggregate principal amount of the then outstanding Notes may remove the Trustee by so notifying the Trustee and the Issuer in writing. The Issuer may remove the Trustee if:
(1)the Trustee fails to comply with Section 7.09 hereof;
(2)the Trustee is adjudged a bankrupt or an insolvent or an order for relief is entered with respect to the Trustee under any Bankruptcy Law;
(3)a custodian or public officer takes charge of the Trustee or its property; or
(4)the Trustee becomes incapable of acting.
(c)If the Trustee resigns or is removed or if a vacancy exists in the office of Trustee for any reason, the Issuer will promptly appoint a successor Trustee. Within one year after the successor Trustee takes office, the Holders of a majority in aggregate principal amount of the then outstanding Notes may appoint a successor Trustee to replace the successor Trustee appointed by the Issuer.
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(d)If a successor Trustee does not take office within 60 days after the retiring Trustee resigns or is removed, the retiring Trustee, the Issuer, or the Holders of at least 10% in aggregate principal amount of the then outstanding Notes may petition any court of competent jurisdiction for the appointment of a successor Trustee.
(e)If the Trustee, after written request by any Holder who has been a Holder for at least six months, fails to comply with Section 7.09 hereof, such Holder may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee.
(f)A successor Trustee will deliver a written acceptance of its appointment to the retiring Trustee and to the Issuer. Thereupon, the resignation or removal of the retiring Trustee will become effective, and the successor Trustee will have all the rights, powers and duties of the Trustee under this Indenture. The successor Trustee will mail a notice of its succession to Holders of Notes. The retiring Trustee will promptly transfer all property held by it as Trustee to the successor Trustee; provided all sums owing to the Trustee hereunder have been paid and subject to the Lien provided for in Section 7.06 hereof. Notwithstanding replacement of the Trustee pursuant to this Section 7.07, the Issuer’s obligations under Section 7.06 hereof will continue for the benefit of the retiring Trustee.
Section 7.08.Successor Trustee by Merger, etc.
If the Trustee consolidates, merges or converts into, or transfers all or substantially all of its corporate trust business to, another corporation, the successor corporation without any further act will be the successor Trustee.
Section 7.09.Eligibility; Disqualification.
There will at all times be a Trustee hereunder that is a corporation organized and doing business under the laws of the United States of America or of any state thereof that is authorized under such laws to exercise corporate trustee power, that is subject to supervision or examination by federal or state authorities and that has a combined capital and surplus of at least $100.0 million as set forth in its most recent published annual report of condition.
Article 8

LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.01.Option to Effect Legal Defeasance or Covenant Defeasance.
The Issuer may at any time, at the option of its Board of Directors evidenced by a resolution accompanied by an Officer’s Certificate, elect to have either Section 8.02 or 8.03 hereof be applied to all outstanding Notes upon compliance with the conditions set forth below in this Article 8.
Section 8.02.Legal Defeasance and Discharge.
Upon the Issuer’s exercise under Section 8.01 hereof of the option applicable to this Section 8.02 with respect to the Notes, the Issuer and each Guarantor will, subject to the satisfaction of the conditions set forth in Section 8.04 hereof, be deemed to have been discharged from its obligations with respect to all outstanding Notes (including the Note Guarantees) on the date the conditions set forth below are satisfied (hereinafter, “Legal Defeasance”).
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For this purpose, Legal Defeasance means that the Issuer and the Guarantors will be deemed to have paid and discharged the entire Indebtedness represented by the outstanding Notes (including the Note Guarantees), which will thereafter be deemed to be “outstanding” only for the purposes of Section 8.05 hereof and the other Sections of this Indenture referred to in clauses (1) and (2) below, and to have satisfied all its other obligations under such Notes, the Note Guarantees and this Indenture (and the Trustee, on demand of and at the expense of the Issuer, shall execute such instruments reasonably requested by the Issuer acknowledging the same), except for the following provisions which will survive until otherwise terminated or discharged hereunder:
(1)the rights of Holders of outstanding Notes to receive payments in respect of the principal of, or interest (including Special Interest, if any) or premium, if any, on, such Notes when such payments are due from the trust referred to in Section 8.04 hereof;
(2)the Issuer’s obligations with respect to such Notes under Article 2 and Section 4.02 hereof;
(3)the rights, powers, trusts, duties and immunities of the Trustee hereunder and the Issuer’s and each Guarantor’s obligations in connection therewith; and
(4)this Article 8.
Subject to compliance with this Article 8, the Issuer may exercise its option under this Section 8.02 with respect to the Notes notwithstanding the prior exercise of its option under Section 8.03 hereof with respect to the Notes.
Section 8.03.Covenant Defeasance.
Upon the Issuer’s exercise under Section 8.01 hereof of the option applicable to this Section 8.03 with respect to the Notes, the Issuer and each Guarantor will, subject to the satisfaction of the conditions set forth in Section 8.04 hereof, be released from each of their obligations under the covenants contained in Sections 4.03, 4.04, 4.06, 4.07, 4.08, 4.09, 4.10, 4.12, 4.13, 4.14, 4.15, 4.16, 4.17, 4.18, 4.19, 4.21, 4.22, 4.23, 4.24, 4.25 and 4.26 hereof with respect to the outstanding Notes on and after the date the conditions set forth in Section 8.04 hereof are satisfied (hereinafter, “Covenant Defeasance”), and the Notes will thereafter be deemed not “outstanding” for the purposes of any determination of the Asset Coverage Ratio or Total Asset Coverage Ratio, or any direction, waiver, consent or declaration or act of Holders of Notes (and the consequences of any thereof) in connection with such covenants, but will continue to be deemed “outstanding” for all other purposes hereunder (it being understood that the Notes will not be deemed outstanding for accounting purposes). For this purpose, Covenant Defeasance means that, with respect to the outstanding Notes, and Note Guarantees in respect thereof, the Issuer and the Guarantors may omit to comply with and will have no liability in respect of any term, condition or limitation set forth in any such covenant, whether directly or indirectly, by reason of any reference elsewhere herein to any such covenant or by reason of any reference in any such covenant to any other provision herein or in any other document and such omission to comply will not constitute a Default or an Event of Default under Section 6.01 hereof with respect to the Notes, but, except as specified above, the remainder of this Indenture and such Notes and Note Guarantees will be unaffected thereby.
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In addition, upon the Issuer’s exercise under Section 8.01 hereof of the option applicable to this Section 8.03 with respect to the Notes, subject to the satisfaction of the conditions set forth in Section 8.04 hereof, Sections 6.01(3) (with respect to the covenants defeased), 6.01(4) (with respect to the covenants defeased), 6.01(5), 6.01(6), 6.01(7) and 6.01(8) hereof will not constitute Events of Default with respect to the Notes.
Section 8.04.Conditions to Legal or Covenant Defeasance.
In order to exercise either Legal Defeasance or Covenant Defeasance under either Section 8.02 or 8.03 hereof with respect to the Notes:
(1)the Issuer must irrevocably deposit with the Trustee, in trust, for the benefit of the Holders of Notes, cash in U.S. dollars, non-callable Government Securities, or a combination thereof (together with any proceeds or other return thereon while held on deposit, a “Redemption Deposit”), in such amounts as will be sufficient, in the opinion of a nationally recognized investment bank, appraisal firm, or firm of independent public accountants, to pay the principal of, premium, if any, and interest (including Special Interest, if any) on, the outstanding Notes on the stated date for payment thereof or on the applicable Redemption Date, as the case may be, and the Issuer must specify whether the Notes are being defeased to such stated date for payment or to a particular Redemption Date;
(2)in the case of Legal Defeasance, the Issuer must deliver to the Trustee an Opinion of Counsel confirming that (a) the Issuer has received from, or there has been published by, the Internal Revenue Service a ruling or (b) since the date of this Indenture, there has been a change in the applicable federal income tax law, in either case to the effect that, and based thereon such Opinion of Counsel will confirm that, the Holders of Notes will not recognize income, gain or loss for federal income tax purposes as a result of such Legal Defeasance and will be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Legal Defeasance had not occurred;
(3)in the case of Covenant Defeasance, the Issuer must deliver to the Trustee an Opinion of Counsel reasonably acceptable to the Trustee confirming that the Holders of Notes will not recognize income, gain or loss for federal income tax purposes as a result of such Covenant Defeasance and will be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Covenant Defeasance had not occurred;
(4)no Default or Event of Default with respect to Notes has occurred and is continuing on the date of such deposit (other than a Default or Event of Default resulting from the borrowing of funds to be applied to such deposit (and any similar concurrent deposit relating to other Indebtedness), and the granting of Liens to secure such borrowings);
(5)such Legal Defeasance or Covenant Defeasance will not result in a breach or violation of, or constitute a default under, any material agreement or instrument (other than this Indenture and the agreements governing any other Indebtedness being defeased, discharged or replaced) to which the Issuer or any of the Guarantors is a party or by which the Issuer or any of the Guarantors is bound;
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(6)the Issuer must deliver to the Trustee an Officer’s Certificate stating that the deposit was not made by the Issuer with the intent of preferring the Holders of Notes over the other creditors of the Issuer with the intent of defeating, hindering, delaying or defrauding any creditors of the Issuer or others; and
(7)the Issuer must deliver to the Trustee an Officer’s Certificate and an Opinion of Counsel, each stating that all conditions precedent relating to the Legal Defeasance or the Covenant Defeasance have been complied with.
Upon a Legal Defeasance or Covenant Defeasance with respect to the Notes, the Collateral Trustee will cease to be a party to the Security Documents on behalf of the Holders of Notes, and the Collateral will no longer secure the Notes (and the Notes shall no longer be Priority Lien Debt). The Collateral will be so released from the Liens securing the Notes (as to which a Legal Defeasance or Covenant Defeasance has occurred) in accordance with applicable requirements in the Collateral Trust Agreement, and each of the Trustee and Collateral Trustee will promptly provide any documents or releases reasonably requested by the Issuer to evidence any such release.
Section 8.05.Deposited Money and Government Securities to be Held in Trust; Other Miscellaneous Provisions.
Subject to Section 8.06 hereof, all money and non-callable Government Securities (including the proceeds thereof) deposited with the Trustee (or other qualifying trustee, collectively for purposes of this Section 8.05, the “Trustee”) (as the applicable Redemption Deposit) pursuant to Section 8.04 hereof in respect of the outstanding Notes will be held in trust and applied by the Trustee, in accordance with the provisions of such Notes and this Indenture, to the payment, either directly or through any Paying Agent (including the Issuer acting as Paying Agent) as the Trustee may determine, to the Holders of such Notes of all sums due and to become due thereon in respect of principal, premium, if any, and interest (including Special Interest, if any), but such money need not be segregated from other funds except to the extent required by law.
The Issuer will pay and indemnify the Trustee against any tax, fee or other charge imposed on or assessed against any Redemption Deposit deposited pursuant to Section 8.04 hereof or the principal and interest received in respect thereof other than any such tax, fee or other charge which by law is for the account of the Holders of the outstanding Notes.
Notwithstanding anything in this Article 8 to the contrary, the Trustee will deliver or pay to the Issuer from time to time upon the request of the Issuer all or any applicable portion of Redemption Deposit held by it as provided in Section 8.04 hereof which, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee (which may be the opinion delivered under Section 8.04(1) hereof), is in excess of the amount thereof that would then be required to be deposited to effect an equivalent Legal Defeasance or Covenant Defeasance in respect of the Notes.
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Section 8.06.Repayment to Issuer.
Any money deposited with the Trustee or any Paying Agent, or then held by the Issuer, in trust for the payment of the principal of, premium, if any, or interest on (including Special Interest, if any), any Note and remaining unclaimed for two years after such principal, premium, if any, or interest (including Special Interest, if any) has become due and payable shall be paid to the Issuer on its request or (if then held by the Issuer) will be discharged from such trust; and the Holder of such Note will thereafter be permitted to look only to the Issuer for payment thereof, and all liability of the Trustee or such Paying Agent with respect to such trust money, and all liability of the Issuer as trustee thereof, will thereupon cease; provided, however, that the Trustee or such Paying Agent, before being required to make any such repayment, may at the expense of the Issuer cause to be published once, in the New York Times and The Wall Street Journal (national edition), notice that such money remains unclaimed and that, after a date specified therein, which will not be less than 30 days from the date of such notification or publication, any unclaimed balance of such money then remaining will be repaid to the Issuer.
Section 8.07.Reinstatement.
If the Trustee or Paying Agent is unable to apply a Redemption Deposit in accordance with Section 8.02 or 8.03 hereof with respect to Notes, as the case may be, by reason of any order or judgment of any court or Governmental Authority enjoining, restraining or otherwise prohibiting such application, then the Issuer’s and the Guarantor’s obligations under the Notes, and this Indenture and the Note Guarantees, will be revived and reinstated as though no deposit had occurred pursuant to Section 8.02 or 8.03 hereof until such time as the Trustee or Paying Agent is permitted to apply all such Redemption Deposit in accordance with Section 8.02 or 8.03 hereof, as the case may be; provided, however, that, if the Issuer makes any payment of principal of, premium, if any, or interest (including Special Interest, if any) on, any Note following the reinstatement of its obligations, the Issuer will be subrogated to the rights of the Holders of such Notes to receive such payment from such Redemption Deposit held by the Trustee or Paying Agent.
Article 9

AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01.Without Consent of Holders of Notes.
Notwithstanding Section 9.02 of this Indenture, the Issuer, the Guarantors, the Trustee, Collateral Trustee and the Local Collateral Agents, as applicable, may amend or supplement this Indenture, the Notes, the Note Guarantees and the Security Documents without the consent of any Holder of the Notes:
(1)to surrender any right or power conferred upon the Issuer or the Guarantors, to add to the covenants such further covenants, restrictions, conditions or provisions for the protection of the Holders of the Notes and to make the occurrence, or the occurrence and continuance, of a default in respect of any such additional covenants, restrictions, conditions or provisions a Default or an Event of Default under this Indenture; provided, however, that with respect to any such additional covenant, restriction, condition or provision, such amendment may provide for a period of grace after default, which may be shorter or longer than that allowed in the case of other Defaults, may provide for an immediate enforcement upon such Default, may limit the remedies available to the Trustee upon such Default or may limit the right of Holders of a majority in aggregate principal amount of the Notes to waive such default;
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(2)to cure any ambiguity, defect or inconsistency;
(3)to provide for uncertificated Notes in addition to or in place of certificated Notes;
(4)to provide for the assumption of the Issuer’s or a Guarantor’s obligations to the Holders of the Notes and Note Guarantees in the case of a merger or consolidation or sale of all or substantially all of the Issuer’s or such Guarantor’s assets, as applicable;
(5)to make any change that would provide any additional rights or benefits to the Holders of the Notes or that does not adversely affect the legal rights hereunder of any Holder;
(6)to conform the text of any of the Notes Documents to any provision of the “Description of Notes” section of the Offering Memorandum, to the extent that such provision in that “Description of Notes” was intended to be a verbatim recitation of a provision of this Indenture or any of the Security Documents, as determined in good faith by an Officer of the Issuer and set forth in an Officer’s Certificate to that effect;
(7)to enter into additional or supplemental Security Documents or provide for additional Collateral;
(8)to make, complete or confirm any grant of Collateral permitted or required by this Indenture or any of the Security Documents or to release Collateral in accordance with the terms of this Indenture and the Security Documents;
(9)to provide for the issuance of Additional Notes in accordance with the limitations set forth in this Indenture as of the date of this Indenture;
(10)to provide for a successor Trustee, Collateral Trustee or Local Collateral Agent; or
(11)to allow any Guarantor (or Subsidiary of the Issuer so becoming a Guarantor) to execute a supplemental indenture and/or a Note Guarantee with respect to the Notes.
Upon the request of the Issuer accompanied by a resolution of the Board of Directors authorizing the execution of any such amended or supplemental indenture, and upon receipt by the Trustee of the documents described in Section 7.02 and Section 9.05 hereof, the Trustee and the Collateral Trustee will join with the Issuer and each Guarantor in the execution of any amended or supplemental indenture authorized or permitted by the terms of this Indenture and to make any further appropriate agreements and stipulations that may be therein contained, but neither the Trustee nor the Collateral Trustee will be obligated to enter into such amended or supplemental indenture that affects its own rights, duties or immunities under this Indenture or otherwise.
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Section 9.02.With Consent of Holders of Notes.
Except as provided below in this Section 9.02, the Issuer, the Guarantors, the Trustee, the Collateral Trustee and the Local Collateral Agents, as applicable, may amend or supplement this Indenture (including, without limitation, Sections 3.11, 4.08 and 4.12 hereof), the Notes and the Note Guarantees in respect thereof and the Security Documents with the consent of the Issuer and the Holders of at least a majority in aggregate principal amount of the then outstanding Notes (including, without limitation, Additional Notes, if any) voting as a single class (including, without limitation, consents obtained in connection with a tender offer or exchange offer for, or purchase of, the Notes), and, subject to Sections 6.04 and 6.07 hereof, any existing Default or Event of Default (other than a Default or Event of Default in the payment of the principal of, premium on, if any, or interest (including Special Interest, if any) on, the Notes, except a payment default resulting from an acceleration that has been rescinded) or compliance with any provision of this Indenture, the Notes or the Note Guarantees in respect thereof may be waived with the consent of the Holders of a majority in aggregate principal amount of the then outstanding Notes (including, without limitation, Additional Notes, if any) voting as a single class (including, without limitation, consents obtained in connection with a tender offer or exchange offer for, or purchase of, the Notes). Section 2.08 and Section 2.09 hereof shall determine which Notes are considered to be “outstanding” for purposes of this Section 9.02.
Upon the request of the Issuer accompanied by a resolution of the Board of Directors authorizing the execution of any such amended or supplemental indenture, and upon the filing with the Trustee and the Collateral Trustee of evidence satisfactory to the Trustee of the consent of the applicable Holders of Notes as aforesaid, and upon receipt by the Trustee of the documents described in Section 7.02 and Section 9.05 hereof, each of the Trustee and the Collateral Trustee will join with the Issuer and the Guarantors in the execution of such amended or supplemental indenture unless such amended or supplemental indenture directly affects the Trustee’s and/or the Collateral Trustee’s own rights, duties or immunities under this Indenture or otherwise, in which case the Trustee and/or the Collateral Trustee may in its discretion, but will not be obligated to, enter into such amended or supplemental Indenture.
It is not necessary for the consent of the Holders of Notes under this Section 9.02 to approve the particular form of any proposed amendment, supplement or waiver, but it is sufficient if such consent approves the substance thereof.
After an amendment, supplement or waiver under this Section 9.02 becomes effective, the Issuer will mail to the Holders of Notes affected thereby a notice briefly describing the amendment, supplement or waiver. Any failure of the Issuer to mail such notice, or any defect therein, will not, however, in any way impair or affect the validity of any such amended or supplemental indenture or waiver. Subject to Sections 6.04 and 6.07 hereof, the Holders of a majority in aggregate principal amount of the Notes then outstanding voting as a single class may waive compliance in a particular instance by the Issuer with any provision of this Indenture, the Notes or the Note Guarantees in respect thereof. However, without the consent of each Holder affected thereby, an amendment, supplement or waiver under this Section 9.02 may not (with respect to any Notes held by a non-consenting Holder):
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(1)reduce the principal amount of Notes whose Holders must consent to an amendment, supplement or waiver;
(2)reduce the principal of or change the fixed maturity of any Note or alter or waive any of the provisions with respect to the redemption of the Notes (except as provided above with respect to Sections 3.11, 4.08 and 4.12 hereof);
(3)reduce the rate of or change the time for payment of interest, including default interest or Special Interest, on any Note;
(4)waive a Default or Event of Default in the payment of principal of, or premium on, if any, or interest (including the payment of Special Interest, if any, when due) on, the Notes (except a rescission of acceleration of the Notes by the Holders of at least a majority in aggregate principal amount of the then outstanding Notes and a waiver of the payment default that resulted from such acceleration);
(5)make any Note payable in money other than that stated in the Notes;
(6)make any change in the provisions of this Indenture relating to waivers of past Defaults or the rights of Holders of Notes to receive payments of principal of, premium on, if any, or interest (including the payment of Special Interest, if any, when due) on, the Notes;
(7)waive a redemption payment with respect to any Note (other than a payment required by Sections 3.11, 4.08 and 4.12 hereof);
(8)make any change to the percentage of principal amount of Notes the Holders of which must consent to an amendment or waiver;
(9)except as provided under Article 8 hereof, or in connection with a consolidation, merger or conveyance, transfer or lease of assets pursuant to this Indenture, release any Guarantor from its obligations under its Note Guarantee (other than as provided in Section 10.05) or make any change in the Note Guarantee that would adversely affect such Holder; or
(10)make any change in the preceding amendment and waiver provisions.
Any amendment to, or waiver of, the provisions of this Indenture or any Security Document that has the effect of releasing all or substantially all of the Collateral from the Liens securing the Notes, of releasing all or substantially all of the Note Guarantees or of altering the relative priority of the Liens in favor of the holders of Priority Lien Debt or subordinating (in payment or lien priority) the Notes in security or contractual right of payment to any senior indebtedness will require the consent of Holders of at least 75% in aggregate principal amount of Notes then outstanding.
Section 9.03.Revocation and Effect of Consents.
Until an amendment, supplement or waiver becomes effective, a consent to it by a Holder of a Note is a continuing consent by the Holder of a Note and every subsequent Holder of a Note or portion of a Note that evidences the same debt as the consenting Holder’s Note, even if notation of the consent is not made on any Note. However, any such Holder of a Note or subsequent Holder of a Note may revoke the consent as to its Note if the Trustee receives written notice of revocation before the date the amendment, supplement or waiver becomes effective.
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An amendment, supplement or waiver becomes effective in accordance with its terms and thereafter binds every Holder.
Section 9.04.Notation on or Exchange of Notes.
The Trustee may place an appropriate notation about an amendment, supplement or waiver on any Note thereafter authenticated. The Issuer in exchange for all Notes may issue and the Trustee shall, upon receipt of an Authentication Order, authenticate new Notes that reflect the amendment, supplement or waiver.
Failure to make the appropriate notation or issue a new Note will not affect the validity and effect of such amendment, supplement or waiver.
Section 9.05.Trustee to Sign Amendments, etc.
Each of the Trustee and the Collateral Trustee will sign any amended or supplemental indenture authorized pursuant to this Article 9 if the amendment or supplement does not adversely affect the rights, duties, liabilities or immunities of the Trustee and the Collateral Trustee. The Issuer may not sign an amended or supplemental indenture until the Board of Directors approve it. In executing any amended or supplemental indenture, each of the Trustee and the Collateral Trustee will be entitled to receive and (subject to Section 7.01 hereof) will be fully protected in relying upon, in addition to the documents required by Section 13.02 hereof, an Officer’s Certificate and an Opinion of Counsel stating that the execution of such amended or supplemental indenture is authorized or permitted by this Indenture.
Article 10

NOTE GUARANTEES
Section 10.01.Guarantee.
(a)Subject to the provisions of this Article 10, each Guarantor hereby unconditionally guarantees to each Holder of a Note authenticated and delivered by the Trustee and to each of the Trustee and Collateral Trustee and its successors and assigns, irrespective of the validity and enforceability of this Indenture, the Notes or the obligations of the Issuer hereunder or thereunder, that:
(1)the principal of, premium, if any, and interest (including Special Interest, if any) on, the Notes will be promptly Paid in Full when due, whether at maturity, by acceleration, redemption or otherwise, and interest on the overdue principal of, premium, if any, and interest on the Notes, if any, if lawful, and all other obligations of the Issuer to the Holders of Notes, the Trustee or the Collateral Trustee hereunder or thereunder will be promptly Paid in Full or performed, all in accordance with the terms hereof and thereof; and
(2)in case of any extension of time of payment or renewal of any Notes or any of such other obligations, that same will be promptly Paid in Full when due or
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performed in accordance with the terms of the extension or renewal, whether at Stated Maturity, by acceleration or otherwise.
Failing payment when due of any amount so guaranteed or any performance so guaranteed for whatever reason, each Guarantor will be jointly and severally obligated to pay the same immediately. Each Guarantor agrees that this is a guarantee of payment and not a guarantee of collection.
(b)To the extent permitted by applicable law, each Guarantor hereby agrees that its obligations hereunder are unconditional, irrespective of the validity, regularity or enforceability of the Notes or this Indenture, the absence of any action to enforce the same, any waiver or consent by any Holder with respect to any provisions hereof or thereof, the recovery of any judgment against the Issuer, any action to enforce the same or any other circumstance which might otherwise constitute a legal or equitable discharge or defense of a guarantor. Each Guarantor hereby waives diligence, presentment, demand of payment, filing of claims with a court in the event of insolvency or bankruptcy of the Issuer, any right to require a proceeding first against the Issuer, protest, notice and all demands whatsoever and covenants that this Note Guarantee will not be discharged except by complete performance of the obligations contained in the Notes and this Indenture.
(c)If any Holder, the Trustee or the Collateral Trustee is required by any court or otherwise to return to the Issuer, any Guarantor or any custodian, trustee, liquidator or other similar official acting in relation to the Issuer or any Guarantor, any amount paid by either to the Trustee, the Collateral Trustee or such Holder, this Note Guarantee, to the extent theretofore discharged, will be reinstated in full force and effect.
(d)Each Guarantor agrees that it will not be entitled to any right of subrogation in relation to the Holders of Notes in respect of any obligations guaranteed hereby until Payment in Full of all obligations (other than contingent obligations) guaranteed hereby. Each Guarantor further agrees that, as between such Guarantor, on the one hand, and the Holders of Notes and the Trustee and the Collateral Trustee, on the other hand, (1) the maturity of the obligations guaranteed hereby may be accelerated as provided in Article 6 hereof for the purposes of this Note Guarantee, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the obligations guaranteed hereby, and (2) in the event of any declaration of acceleration of such obligations as provided in Article 6 hereof, such obligations (whether or not due and payable) will forthwith become due and payable by such Guarantor for the purpose of this Note Guarantee. Each Guarantor will have the right to seek contribution from any non-paying Guarantor so long as the exercise of such right does not impair the rights of the Holders of Notes under the Note Guarantee.
Section 10.02.Limitation on Guarantor Liability.
Each Guarantor, and by its acceptance of Notes, each Holder, hereby confirms that it is the intention of all such parties that the Note Guarantee of such Guarantor not constitute a fraudulent transfer or conveyance for purposes of Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar federal or state law to the extent applicable to any Note Guarantee. To effectuate the foregoing intention, the Trustee, the Holders of Notes, the Collateral Trustee and each Guarantor hereby irrevocably agree that the obligations of such Guarantor will be limited to the maximum amount that will, after giving effect to such maximum amount and all other contingent and fixed liabilities of such Guarantor that are relevant under such laws, and after giving effect to any collections from, rights to receive contribution from or payments made by or on behalf of any other Guarantor in respect of the obligations of such other Guarantor under this Article 10, result in the obligations of such Guarantor under its Note Guarantee not constituting a fraudulent transfer or conveyance.
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Each Guarantor that makes a payment for distribution under its Note Guarantee is entitled to a contribution from each other Guarantor in a pro rata amount based on the adjusted net assets of each Guarantor.
Section 10.03.Execution and Delivery of Note Guarantee.
To evidence its Note Guarantee set forth in Section 10.01 hereof, each Guarantor hereby agrees that this Indenture or a supplemental indenture in substantially the form of Exhibit D attached hereto shall be executed on behalf of such Guarantor by one of its Officers by manual, electronic or facsimile signature. Each Guarantor hereby agrees that its Guarantee set forth in Section 10.01 hereof shall remain in full force and effect notwithstanding the absence of the endorsement of any notation of such Guarantee on the Notes.
If an Officer whose signature is on this Indenture or on the Note Guarantee no longer holds that office at the time the Trustee authenticates any Note, the Note Guarantee will be valid nevertheless.
The delivery of any Note by the Trustee, after the authentication thereof hereunder, will constitute due delivery of the Note Guarantee set forth in this Indenture on behalf of each Guarantor.
Section 10.04.Guarantors May Consolidate, etc., on Certain Terms.
Except as otherwise provided in Article 5 and Section 10.05 hereof, no Guarantor may sell or otherwise dispose of all or substantially all of its assets to, or consolidate with or merge with or into (whether or not such Guarantor is the surviving Person) another Person, other than the Issuer or another Guarantor, unless either:
(1)subject to Article 5 and Section 10.05 hereof, the Person acquiring the property in any such sale or disposition or the Person formed by or surviving any such consolidation or merger unconditionally assumes all the obligations of that Guarantor under the Note Guarantees and this Indenture on the terms set forth herein or therein, pursuant to a supplemental indenture; or
(2)subject to Article 5, the net proceeds of such sale or other disposition, if any, are applied in accordance with the applicable provisions of this Indenture.
Subject to Article 5, in case of any such consolidation, merger, sale or conveyance and upon the assumption by the successor Person, by supplemental indenture, executed and delivered to the Trustee and the Collateral Trustee and satisfactory in form to the Trustee and the Collateral Trustee, of the Note Guarantee with respect to the Notes and the due and punctual performance of all of the covenants and conditions of this Indenture to be performed by such Guarantor, such successor Person will succeed to and be substituted for such Guarantor with the same effect as if it had been named herein as a Guarantor. The Note Guarantee of such successor Person will in all respects have the same legal rank and benefit under this Indenture as the Note Guarantee theretofore issued in accordance with the terms of this Indenture as though such Note Guarantee had been issued at the date of the execution hereof.
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Except as set forth in Articles 4 and 5 hereof, and notwithstanding clauses (1) and (2) of this Section 10.04, nothing contained in this Indenture or in any of the Notes will prevent any consolidation or merger of a Guarantor with or into the Issuer or another Guarantor, or will prevent any sale or conveyance of the property of a Guarantor as an entirety or substantially as an entirety to the Issuer or another Guarantor.
Section 10.05.Releases.
(a)On and after the Issue Date, each Guarantor (and, in the event of a sale or other disposition of all or substantially all of the assets of such Guarantor, the corporation acquiring such property) will be released from all obligations under its Note Guarantee upon:
(1)(A) any sale or other disposition of all or substantially all of the assets of such Guarantor, by way of merger, consolidation or otherwise, or a sale or other disposition of Capital Stock of any Guarantor such that after giving effect to such sale or other Disposition such Guarantor is no longer a Subsidiary, in each case to a Person that is not (either before or after giving effect to such transactions) the Issuer or a Guarantor (and excluding the merger or consolidation of such Guarantor with or into the Issuer or another Guarantor), and in each case, in a transaction permitted in accordance with the terms of this Indenture;
(A)designation of such Guarantor as an Unrestricted Subsidiary in accordance with the terms of this Indenture;
(B)the election by the Issuer to (1) cause a Designated Guarantor to be an Excluded Subsidiary (provided that such Designated Guarantor is either an Excluded Aircraft Subsidiary or does not own any Significant Assets at such time of election (other than pursuant to the thresholds set forth in clause (g) of the definition of “Excluded Subsidiary”)) or (2) cause any Guarantor that becomes a Guarantor after the Issue Date to be an Excluded Subsidiary pursuant to the thresholds set forth in clause (g) of the definition of “Excluded Subsidiary”);
(C)Legal Defeasance or Covenant Defeasance in accordance with Article 8 hereof or satisfaction and discharge of this Indenture in accordance Article 11 hereof; or
(D)a Collateral Release Event pursuant to Section 4.26; and
(2)the delivery by the Issuer to the Trustee of an Officer’s Certificate and an Opinion of Counsel stating that such transaction or release was made in accordance with the provisions of this Indenture.
(b)Upon the delivery of an Officer’s Certificate and Opinion of Counsel, the Trustee, the Collateral Trustee and the Local Collateral Agents, as applicable, will use commercially reasonable efforts to execute and deliver any documents reasonably requested by the Issuer or any such Guarantor and at the sole cost and expense of the Issuer, in order to evidence the release of any Guarantor from its obligations under its Note Guarantee.
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Any Guarantor not released from its obligations under its Note Guarantee as provided in this Section 10.05 will remain liable for the full amount of principal of and interest (including Special Interest, if any) and premium, if any, on the Notes and for the other obligations of any Guarantor under this Indenture as provided in this Article 10.
Article 11

SATISFACTION AND DISCHARGE
Section 11.01.Satisfaction and Discharge.
This Indenture will be discharged and will cease to be of further effect as to all Notes issued hereunder, when:
(1)either:
(A)all such Notes that have been authenticated, except lost, stolen or destroyed Notes that have been replaced or paid and Notes for whose payment money has theretofore been deposited in trust and thereafter repaid to the Issuer, have been delivered to the Trustee for cancellation; or
(B)all such Notes that have not been delivered to the Trustee for cancellation have become due and payable by reason of the mailing of a notice of redemption or otherwise or will become due and payable within one year and the Issuer or any Guarantor has irrevocably deposited or caused to be deposited with the Trustee as trust funds in trust solely for the benefit of the Holders of such Notes, cash in U.S. dollars, non-callable Government Securities, or a combination thereof, in such amounts as will be sufficient, without consideration of any reinvestment of interest, to pay and discharge the entire Indebtedness on such Notes not delivered to the Trustee for cancellation for principal of, premium on, if any, and interest (including Special Interest, if any) on, such Notes to the date of maturity or redemption;
(2)in respect of Section 11.01(1)(B), no Default or Event of Default has occurred and is continuing on the date of such deposit (other than a Default or Event of Default resulting from the borrowing of funds to be applied to such deposit and any similar deposit relating to other Indebtedness, in each case, the granting of Liens to secure such borrowings) and the deposit will not result in a breach or violation of, or constitute a default under, any other instrument to which the Issuer or any Guarantor is a party or by which the Issuer or any Guarantor is bound (other than with respect to the borrowing of funds to be applied concurrently to make the deposit required to effect such satisfaction and discharge and any similar concurrent deposit relating to other Indebtedness, and in each case the granting of Liens to secure such borrowings);
(3)the Issuer or any Guarantor has paid or caused to be paid all sums payable by it under this Indenture; and
(4)the Issuer has delivered irrevocable instructions to the Trustee under this Indenture to apply the deposited money toward the payment of the Notes at maturity or on the Redemption Date, as the case may be.
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In addition, the Issuer must deliver an Officer’s Certificate and an Opinion of Counsel to the Trustee stating that all conditions precedent to satisfaction and discharge have been satisfied.
Upon the satisfaction and discharge of this Indenture pursuant to this Article 11, the Collateral Trustee will cease to be a party to the Security Documents on behalf of the Holders of the Notes, and the Collateral will no longer secure the Notes.
Notwithstanding the satisfaction and discharge of this Indenture, if money has been deposited with the Trustee pursuant to subclause (B) of clause (1) of this Section 11.01, the provisions of Sections 11.02 and 8.06 hereof will survive. In addition, nothing in this Section 11.01 will be deemed to discharge those provisions of Section 7.06 or Section 12.05 hereof, that, by their terms, survive the satisfaction and discharge of this Indenture.
Section 11.02.Application of Trust Money.
Subject to the provisions of Section 8.06 hereof, all money deposited with the Trustee pursuant to Section 11.01 hereof shall be held in trust and applied by it, in accordance with the provisions of the Notes and this Indenture, to the payment, either directly or through any Paying Agent (including the Issuer acting as its own Paying Agent) as the Trustee may determine, to the Persons entitled thereto, of the principal (and premium, if any), interest (including Special Interest, if any) and Additional Amounts, if any, for whose payment such money has been deposited with the Trustee; but such money need not be segregated from other funds except to the extent required by law.
If the Trustee or Paying Agent is unable to apply any money or Government Securities in accordance with Section 11.01 hereof by reason of any legal proceeding or by reason of any order or judgment of any court or Governmental Authority enjoining, restraining or otherwise prohibiting such application, the Issuer’s and any Guarantor’s obligations under this Indenture and the Notes shall be revived and reinstated as though no deposit had occurred pursuant to Section 11.01 hereof; provided that if the Issuer has made any payment of principal of, premium, if any, interest (including Special Interest, if any) or Additional Amounts, if any, on, any Notes because of the reinstatement of their obligations, the Issuer shall be subrogated to the rights of the Holders of such Notes to receive such payment from the money or Government Securities held by the Trustee or Paying Agent.
Article 12

COLLATERAL AND SECURITY
Section 12.01.Security Interest.
The due and punctual payment of the principal of, premium (if any), interest and Special Interest, if any, and Additional Amounts, if any, on, the Notes when and as the same shall be due and payable, whether on an interest payment date, at maturity, by acceleration, repurchase, redemption or otherwise, and interest on the overdue principal of, premium (if any), interest and Special Interest, if any, and Additional Amounts, if any, on the Notes and performance of all other obligations of the Issuer to the Holders of Notes, the Trustee, the Collateral Trustee and the Local Collateral Agents, according to the terms hereunder or thereunder, are secured as provided in the Security Documents.
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Each Holder, by its acceptance thereof, consents and agrees to the terms of the Security Documents (including, without limitation, the Collateral Trust Agreement, any Junior Lien Intercreditor Agreement, any other Intercreditor Agreement and the provisions of the Security Documents providing for foreclosure and release of Collateral) as the same may be in effect or may be amended from time to time in accordance with their terms and authorizes and appoints Wilmington Trust, National Association as the Trustee and as the Collateral Trustee and appoints each Local Collateral Agent pursuant to the terms of the Local Collateral Agency Agreements, and each Holder and the Trustee direct the Collateral Trustee and the Local Collateral Agents to enter into or become parties to the Security Documents (including, without limitation, the Collateral Trust Agreement, the Local Collateral Agency Agreements, any Junior Lien Intercreditor Agreement and any other Intercreditor Agreement) and to perform their respective obligations and exercise their respective rights thereunder in accordance therewith. The Issuer consents and agrees to be bound by the terms of the Security Documents (including, without limitation, the Collateral Trust Agreement, the Local Collateral Agency Agreements, any Junior Lien Intercreditor Agreement and any other Intercreditor Agreement), as the same may be in effect from time to time, and agree to perform their obligations thereunder in accordance therewith. The Issuer will deliver to the Trustee copies of all documents delivered by the Issuer to the Collateral Trustee pursuant to the Security Documents, if applicable, and will do or cause to be done all such acts and things as may be required by the provisions of the Security Documents, to assure and confirm to the Collateral Trustee the security interest in the Collateral contemplated by the Security Documents or any part thereof, as from time to time constituted, so as to render the same available for the security and benefit of this Indenture and of the Notes. The Issuer will take, and will cause its Subsidiaries to take, any and all actions reasonably required to cause the Security Documents to create and maintain, as security for the Priority Lien Obligations, a valid and enforceable perfected Lien in and on all the Collateral in favor of the Collateral Trustee for the benefit of the Holders of Notes and holders of other Priority Lien Obligations, to the extent required by, with the Lien priority required under, and subject to the qualifications set forth within, the Priority Lien Documents.
Notwithstanding anything to the contrary in any Priority Lien Document or any Security Document, the Issuer and Guarantors shall not be required to record any leasehold interests, make any fixture filings, or make any other real property recordings or filings, or other actions in connection with the perfection of real property interests in any jurisdiction, in each case, in connection with the Lien on any Gate Leaseholds (to the extent characterized as interests in real property) that are included in the Collateral.
Section 12.02.Collateral Trust Agreement.
This Article 12 and the provisions of each other Security Document are subject to the terms, conditions and benefits set forth in the Collateral Trust Agreement and each Local Collateral Agency Agreement. The Issuer consents to, and agrees to be bound by, the terms of the Collateral Trust Agreement and each Local Collateral Agency Agreement, as the same may be in effect from time to time, and to perform their obligations thereunder in accordance with the terms therewith.
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Section 12.03.Release of Liens in Respect of the Notes.
The Collateral Trustee’s Liens upon the Collateral will no longer secure the Notes outstanding under this Indenture or any other Obligations under this Indenture, and the right of the Holders of Notes and such Obligations to the benefits and proceeds of the Collateral Trustee’s Liens on the Collateral will terminate and be discharged with respect to all the Notes:
(1)upon satisfaction and discharge of this Indenture in accordance with Article 11;
(2)upon a Legal Defeasance or Covenant Defeasance of the Notes in accordance with Article 8;
(3)upon a Collateral Release Event with respect to the applicable Released Assets pursuant to Section 4.26;
(4)upon Payment in Full and discharge of all Notes outstanding under this Indenture and all Obligations that are outstanding, due and payable under this Indenture at the time the Notes are Paid in Full and discharged; and
(5)in whole or in part, with the consent of the Holders of the requisite percentage of Notes or Notes, as applicable, in accordance with Article 9.
In addition, the Collateral Trustee’s Liens on the Collateral will be released upon the terms and subject to the conditions set forth in Section 4.1 of the Collateral Trust Agreement. In the event the Issuer reasonably requests that the Collateral Trustee take any actions or execute any documents in order to evidence the automatic release of the Priority Liens on any Collateral, the Collateral Trustee will take such actions or execute such documents upon, among other things, the receipt of an Officer’s Certificate stating that the release of the Priority Liens are authorized and permitted under the Collateral Trust Agreement and the applicable Priority Lien Documents.
Section 12.04.After-Acquired Property.
After the Issue Date, if property that is required to be Collateral is acquired by the Issuer or any Guarantor (including property of a Person that becomes a new Issuer or Guarantor pursuant to Section 4.13 hereof) that is not automatically subject to a perfected security interest under the Security Documents, then such Issuer or Guarantor will promptly (and in any event within forty-five (45) calendar days following of such acquisition, termination, release or other applicable event, or such later date as the Controlling Representative may agree in its sole discretion) provide a first priority Lien, as applicable, over such property (or, in the case of a new Issuer or Guarantor, such of its property) in favor of the Collateral Trustee or a Local Collateral Agent, as applicable, and deliver any filings, pledges, instruments or documents certificates in respect thereof, all as and to the extent required by this Indenture or the Security Documents, in each case subject to Permitted Liens.
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Section 12.05.Collateral Trustee.
(a)The Collateral Trustee holds (directly or through co-trustees or agents, including each Local Collateral Agent, where applicable) and is directed by each Holder to so hold, and is entitled to enforce on behalf of the holders of Priority Lien Obligations and Junior Lien Obligations (if any and to the extent applicable), all Liens on the Collateral created by the Security Documents for their benefit, subject to the provisions of the Collateral Trust Agreement and the Intercreditor Agreements and the Security Documents.
(b)Neither the Issuer nor its Affiliates may serve as Collateral Trustee (or as a Local Collateral Agent).
(c)Except as provided in the Collateral Trust Agreement or as directed by the Controlling Representative in accordance with the Collateral Trust Agreement, the Collateral Trustee will not be obligated:
(1)to act upon directions purported to be delivered to it by any Person;
(2)to foreclose upon or otherwise enforce any Lien; or
(3)to take any other action whatsoever with regard to any or all of the Security Documents, the Liens created thereby or the Collateral.
(d)The Issuer and the Guarantors, jointly and severally, will indemnify the each of the Collateral Trustee and the Local Collateral Agents against any and all losses, liabilities or expenses incurred by it arising out of or in connection with this Indenture, including defending itself against any claim (whether asserted by the Issuer, any Guarantor, any Holder or any other Person) or liability in connection with the exercise or performance of any of its powers or duties hereunder; provided that the indemnification set forth in this clause (d) shall not, as to the Collateral Trustee or its related parties, be available to the extent that such liabilities, obligations, losses, damages, penalties or related expenses are determined by a court of competent jurisdiction by final and non-appealable judgment to have resulted from the gross negligence or willful misconduct of the Collateral Trustee or such related party, as applicable. Each of the Collateral Trustee and the Local Collateral Agents will notify the Issuer promptly of any claim for which it may seek indemnity. Failure to so notify the Issuer will not relieve the Issuer of its obligations hereunder. The Issuer will defend the claim, and the Collateral Trustee and any applicable Local Collateral Agent will cooperate in the defense. The Collateral Trustee may have separate counsel and the Issuer will pay the reasonable fees and expenses of such counsel. The Issuer shall not pay for any settlement made without its consent, which consent will not be unreasonably withheld. The obligations of the Issuer under this Section 12.05(d) will survive the satisfaction and discharge of this Indenture and the resignation or removal of the Collateral Trustee. The indemnification provided for in this Section 12.05(d) is in addition to, and not in derogation of, the Collateral Trustee’s rights to compensation, reimbursement and indemnity as set forth in the Collateral Trust Agreement and the other Security Documents.
(e)The Collateral Trustee shall be entitled to all of the rights, privileges, immunities and indemnities set forth in the Collateral Trust Agreement and granted to the Trustee hereunder.
(f)By its acceptance of the Notes, each Holder severally agrees (a) to reimburse on demand the Collateral Trustee for such Holder’s Aggregate Exposure Percentage of any expenses and fees incurred for the benefit of the Holders under this Indenture and any of the Note Documents, including, without limitation, counsel fees and compensation of agents and employees paid for services rendered on behalf of the Holders, and any other expense incurred in connection with the operations or enforcement thereof, not reimbursed by the Issuer and the
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Guarantors and (b) to indemnify and hold harmless the Collateral Trustee and any of its related parties, on demand, in the amount equal to such Holder’s Aggregate Exposure Percentage, from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses, or disbursements of any kind or nature whatsoever which may be imposed on, incurred by, or asserted against it or any of them in any way relating to or arising out of this Indenture or any of the Note Documents or any action taken or omitted by it or any of them under this Agreement or any of the Note Documents to the extent not reimbursed by the Issuer and the Guarantors; provided that the indemnification set forth in this clause (f) shall not, as to the Collateral Trustee or its related parties, be available to the extent that such liabilities, obligations, losses, damages, penalties or related expenses are determined by a court of competent jurisdiction by final and non-appealable judgment to have resulted from the gross negligence or willful misconduct of the Collateral Trustee or such related party, as applicable. The obligations of the Holders under this Section 12.05(f) will survive the satisfaction and discharge of this Indenture and the resignation or removal of the Collateral Trustee.
Section 12.06.Post-Closing Obligations.
The Issuer and the Guarantors shall comply with the obligations set forth in Section 4.5 to the Pledge and Security Agreement within the time periods set forth therein.
Article 13

MISCELLANEOUS
Section 13.01.Notices.
Any notice or communication by the Issuer, any Guarantor, the Collateral Trustee or the Trustee to the others is duly given if in writing and delivered in Person or by first class mail (registered or certified, return receipt requested), facsimile transmission, electronic mail or overnight air courier guaranteeing next day delivery, to the others’ address:
If to the Issuer and/or any Guarantor:
LATAM Airlines Group S.A. Av. Presidente Riesco 5711, 20th Floor If to the Collateral Trustee:
Las Condes Santiago, Chile
Fax: +56 (2) 2565-3952
Attention: Andrés del Valle
E-mail: andres.delvalle@latam.com

If to the Trustee:
Wilmington Trust, National Association
1100 North Market Street
Wilmington, Delaware 19890
Fax: 302-636-4149
Attention: LATAM Notes Administrator
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Wilmington Trust, National Association
1100 North Market Street
Wilmington, Delaware 19890
Fax: 302-636-4149
Attention: LATAM Collateral Trust Administrator
The Issuer, any Guarantor, the Collateral Trustee or the Trustee, by notice to the others, may designate additional or different addresses for subsequent notices or communications.
All notices and communications (other than those sent to Holders of Notes) will be deemed to have been duly given: at the time delivered by hand, if personally delivered; five Business Days after being deposited in the mail, postage prepaid, if mailed; when receipt acknowledged, if transmitted by facsimile; and the next Business Day after timely delivery to the courier, if sent by overnight air courier guaranteeing next day delivery.
Any notice or communication to a Holder will be delivered to its address shown on the register kept by the Registrar. Failure to mail a notice or communication to a Holder or any defect in it will not affect its sufficiency with respect to other Holders of Notes.
If a notice or communication is mailed in the manner provided above within the time prescribed, it is duly given, whether or not the addressee receives it.
If the Issuer mails a notice or communication to Holders of Notes, it will mail a copy to the Trustee, the Collateral Trustee and each Agent at the same time.
Notwithstanding any other provision of this Indenture or any Note, where this Indenture or any Note provides for notice of any event (including any notice of redemption or purchase) to a Holder of a Global Note (whether by mail or otherwise), such notice shall be sufficiently given if given to DTC (or its designee) pursuant to the standing instructions from DTC or its designee.
Section 13.02.Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Issuer to the Trustee to take any action under this Indenture, the Issuer shall furnish to the Trustee:
(1)an Officer’s Certificate in form and substance reasonably satisfactory to the Trustee (which must include the statements set forth in Section 13.03 hereof) stating that, in the opinion of the signers, all conditions precedent and covenants, if any, provided for in this Indenture relating to the proposed action have been satisfied; and
(2)an Opinion of Counsel in form and substance reasonably satisfactory to the Trustee (which must include the statements set forth in Section 13.03 hereof) stating that, in the opinion of such counsel, all such conditions precedent have been satisfied.
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Section 13.03.Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture must include:
(1)a statement that the Person making such certificate or opinion has read such covenant or condition;
(2)a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based;
(3)a statement that, in the opinion of such Person, he or she has made such examination or investigation as is necessary to enable him or her to express an informed opinion as to whether or not such covenant or condition has been satisfied; and
(4)a statement as to whether or not, in the opinion of such Person, such condition or covenant has been satisfied.
Section 13.04.Rules by Trustee and Agents.
The Trustee may make reasonable rules for action by or at a meeting of Holders of Notes. The Registrar or Paying Agent may make reasonable rules and set reasonable requirements for its functions.
Section 13.05.No Personal Liability of Directors, Officers, Employees and Stockholders.
No director, officer, employee, incorporator or stockholder of the Issuer or any Guarantor, as such, will have any liability for any obligations of the Issuer or the Guarantors under the Note Documents or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes. The waiver may not be effective to waive liabilities under the federal securities laws.
Section 13.06.Governing Law.
THE INTERNAL LAW OF THE STATE OF NEW YORK WILL GOVERN AND BE USED TO CONSTRUE THIS INDENTURE, THE NOTES AND THE NOTE GUARANTEES WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
Section 13.07.Waiver of Jury Trial; Consent to Jurisdiction; Waiver of Immunities.
(a)EACH OF THE ISSUER, THE GUARANTORS, THE TRUSTEE AND THE COLLATERAL TRUSTEE HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE, THE NOTES, THE NOTE GUARANTEES, THE SECURITY DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
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(b)Each of the parties hereto hereby irrevocably submits to the non-exclusive jurisdiction of any New York state or U.S. federal court sitting in the Borough of Manhattan in The City of New York with respect to actions brought against it as a defendant in respect of any suit, action or proceeding or arbitral award arising out of or relating to this Indenture or the Notes or any transaction contemplated hereby or thereby (a “Proceeding”), and irrevocably accepts for itself and in respect of its property, generally and unconditionally, the jurisdiction of the aforesaid courts. Each of the parties hereto irrevocably waives, to the fullest extent it may do so under applicable law, any objection which it may now or hereafter have to the laying of the venue of any such Proceeding brought in any such court and any claim that any such Proceeding brought in any such court has been brought in an inconvenient forum. Each of the Issuer and the Guarantors irrevocably appoints Togut, Segal & Segal, LLP (the “Process Agent”), with an office at One Penn Plaza, Suite 3335, New York, New York 10119, as its authorized agent to receive on behalf of it and its property service of copies of the summons and complaint and any other process which may be served in any Proceeding. If for any reason such Person shall cease to be such agent for service of process, each of the Issuer and the Guarantors shall forthwith appoint a new agent of recognized standing for service of process in the State of New York and deliver to the Trustee a copy of the new agent’s acceptance of that appointment within 30 days. Nothing herein shall affect the right of the Trustee, any Agent or any Holder to serve process in any other manner permitted by law or to commence legal proceedings or otherwise proceed against the Issuer and the Guarantors in any other court of competent jurisdiction.
(c) Each of the Issuer and the Guarantors hereby irrevocably appoints the Process Agent as its agent to receive, on behalf of itself and its property, service of copies of the summons and complaint and any other process which may be served in any such suit, action or proceeding brought in such New York state or U.S. federal court sitting in the Borough of Manhattan in The City of New York. Such service shall be made by delivering by hand a copy of such process to the Issuer or the Guarantors, as the case may be, in care of the Process Agent at the address specified above. The Issuer irrevocably authorizes and directs the Process Agent to accept such service on its behalf. Failure of the Process Agent to give notice to the Issuer or failure of the Issuer to receive notice of such service of process shall not affect in any way the validity of such service on the Process Agent or the Issuer. As an alternative method of service, the Issuer consents to the service of any and all process in any such Proceeding by the delivery by hand of copies of such process to the Issuer at its address specified in Section 13.01 or at any other address previously furnished in writing by the Issuer to the Trustee. The Issuer covenants and agrees that it shall take any and all reasonable action, including the execution and filing of any and all documents, that may be necessary to continue the designation of the Process Agent above in full force and effect during the term of the Notes, and to cause the Process Agent to continue to act as such.
(d) Nothing in this Section 13.07 shall affect the right of any party, including the Trustee, any Agent or any Holder, to serve legal process in any other manner permitted by law or affect the right of any party to bring any action or proceeding against any other party or its property in the courts of other competent jurisdictions.
(e)Each of the Issuer and the Guarantors irrevocably agrees that, in any proceedings anywhere (whether for an injunction, specific performance or otherwise), no immunity (to the extent that it may at any time exist, whether on the grounds of sovereignty or otherwise) from such proceedings, from attachment (whether in aid of execution, before judgment or otherwise) of its assets or from execution of judgment shall be claimed by it or on its behalf or with respect to its assets, except to the extent required by applicable law, any such immunity being irrevocably waived, to the fullest extent permitted by applicable law. Each of the Issuer and the Guarantors irrevocably agrees that, where permitted by applicable law, it and its assets are, and shall be, subject to such proceedings, attachment or execution in respect of its obligations under this Indenture or the Notes.
132

Section 13.08.No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret any other indenture, loan or debt agreement of the Issuer or its Subsidiaries or of any other Person. Any such indenture, loan or debt agreement may not be used to interpret this Indenture.
Section 13.09.Currency Indemnity.
U.S. dollars are the sole currency of account and payment for all sums payable by the Issuer or the Guarantors under or in connection with the Notes and the Note Guarantees, including damages. Any amount received or recovered in a currency other than U.S. dollars (whether as a result of, or of the enforcement of, a judgment or order of a court of any jurisdiction, in the winding-up or dissolution of the Issuer or otherwise) by any Holder of a Note in respect of any sum expressed to be due to it from the Issuer or the Guarantors shall only constitute a discharge to the Issuer or the Guarantors, as the case may be, to the extent of the U.S. dollar amount which the recipient is able to purchase with the amount so received or recovered in that other currency on the date of that receipt or recovery (or, if it is not practicable to make that purchase on that date, on the first date on which it is practicable to do so). If that U.S. dollar amount is less than the U.S. dollar amount expressed to be due to the recipient under any Note, the Issuer and the Guarantors shall indemnify such Holder against any loss sustained by it as a result, and if the amount of U.S. dollars so purchased is greater than the sum originally due to such Holder, such Holder shall, by accepting a Note, be deemed to have agreed to repay such excess. In any event, the Issuer and the Guarantors shall indemnify the recipient against the cost of making any such purchase.
For the purposes of this Section 13.09, it shall be sufficient for the Holder of a Note to certify in a satisfactory manner (indicating the sources of information used) that it would have suffered a loss had an actual purchase of U.S. dollars been made with the amount so received in that other currency on the date of receipt or recovery (or, if a purchase of U.S. dollars on such date had not been practicable, on the first date on which it would have been practicable, it being required that the need for a change of date be certified in the manner mentioned above). These indemnities constitute a separate and independent obligation from the other obligations of the Issuer and the Guarantors, shall give rise to a separate and independent cause of action, shall apply irrespective of any indulgence granted by any Holder of a Note and shall continue in full force and effect despite any other judgment, order, claim or proof for a liquidated amount in respect of any sum due under any Note.
Section 13.10.Successors.
All agreements of the Issuer in this Indenture and the Notes will bind its successors. All agreements of the Trustee in this Indenture will bind its successors. All agreements of each Guarantor in this Indenture will bind its successors, except as otherwise provided in Section 10.05 hereof.
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Section 13.11.Severability.
In case any provision in this Indenture or in the Notes is invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions will not in any way be affected or impaired thereby.
Section 13.12.Counterpart Originals.
The parties may sign any number of copies of this Indenture. Each signed copy will be an original, but all of them together represent the same agreement. The exchange of copies of this Indenture and of signature pages by facsimile or PDF transmission shall constitute effective execution and delivery of this Indenture as to the parties hereto and may be used in lieu of the original Indenture for all purposes. Signatures of the parties hereto transmitted by facsimile or PDF shall be deemed to be their original signatures for all purposes. For the avoidance of doubt, the words “execution,” “signed,” “signature,” “delivery” and words of like import in or relating to this Indenture or any document to be signed in connection with this Indenture shall be deemed to include electronic signatures, deliveries or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature, physical delivery thereof or the use of a paper-based recordkeeping system, as the case may be, and the parties hereto consent to conduct the transactions contemplated hereunder by electronic means; provided that, notwithstanding anything herein to the contrary, neither the Trustee nor the Collateral Trustee is under any obligation to agree to accept electronic signatures in any form or in any format except for facsimile and PDF unless expressly agreed to by the Trustee or Collateral Trustee, as applicable, pursuant to reasonable procedures approved by the Trustee or Collateral Trustee, as applicable.
Section 13.13.Table of Contents, Headings, etc.
The Table of Contents, Cross-Reference Table and Headings of the Articles and Sections of this Indenture have been inserted for convenience of reference only, are not to be considered a part of this Indenture and will in no way modify or restrict any of the terms or provisions hereof.
Section 13.14.Force Majeure.
In no event shall the Trustee or the Collateral Trustee be responsible or liable for any failure or delay in the performance of its obligations hereunder arising out of or caused by, directly or indirectly, forces beyond its control, including, without limitation, strikes, work stoppages, accidents, acts of war or terrorism, civil or military disturbances, nuclear or natural catastrophes or acts of God, epidemics or pandemics and interruptions, loss or malfunctions of utilities, communications or computer (software and hardware) services or the unavailability of the Federal Reserve Bank wire or telex or other wire or communication facility, it being understood that the Trustee and the Collateral Trustee shall use commercially reasonable efforts which are consistent with accepted practices in the banking industry to resume performance as soon as practicable under the circumstances.
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[Signatures on following page]
135
EXHIBIT E
SIGNATURES
Dated as of October 15, 2024
LATAM AIRLINES GROUP S.A.

By:         
Name: [•]
Title: [•]
[*]

E-1
EX-2.D 3 a2ddescriptionofsecurities.htm EX-2.D Document


Description of Securities Disclosure
Reference
1
Preemptive Rights
See “Item 10.B-Preemptive Rights and Increases in Share Capital” in the annual report to which this exhibit is attached.
2
Type and Class of Securities
See “Item 10.B-Capitalization” in the annual report to which this exhibit is attached.
3
Divisions and Distributions
See “Item 10.B-Dividend and Liquidation Rights” in the annual report to which this exhibit is attached.
4
Other Rights
Not Applicable
5
Rights and Shares
See “Item 10.B-General” in the annual report to which this exhibit is attached.
6
Requirements for amendments
See “Item 10.B-Shareholder’s Meetings and Voting Rights” in the annual report to which this exhibit is attached.
7
Limitations on the rights to own securities
See “Item 10.B-Ownership Restrictions” in the annual report to which this exhibit is attached.
8
Disposition that may affect any change of control
See “Item 10.B-Ownership Restrictions” in the annual report to which this exhibit is attached.
9
Ownership Threshold
See “Item 10.B-Ownership Restrictions” in the annual report to which this exhibit is attached.
10
Differences between law of different jurisdictions
See “Item 16.G-Corporate Governance” in the annual report to which this exhibit is attached.
11
Changes in capital
See “Item 10.B-Preemptive Rights and Increase in Share Capital” in the annual report to which this exhibit is attached.
12
Debt Securities
Not Applicable
13
Warrants and Rights
Not Applicable
14
Other Securities
Not Applicable
15
Name of the Depositary
See “Item 12.D-American Depositary Shares” in the annual report to which this exhibit is attached.
16
American Depositary Shares
See “Item 12.D-American Depositary Shares” in the annual report to which this exhibit is attached.


EX-4.3(8) 4 a438supplementalagreemen.htm EX-4.3(8) a438supplementalagreemen




P.A. 3256 SA-20 Boeing Proprietary EXECUTED as of the day and year first above written. LATAM AIRLINES GROUP S.A. THE BOEING COMPANY By: By: Irma L. Krueger (Printed or Typed Name) Its: Its: Attorney in Fact By: (Printed or Typed Name) Its:

 
EX-4.27(3) 5 a4273latampw1100gsuppsup.htm EX-4.27(3) a4273latampw1100gsuppsup
PRIVILEGED AND CONFIDENTIAL This document contains proprietary information of International Aero Engines, LLC (“IAE”). IAE offers the information contained in this document on the condition that you not disclose or reproduce the information to or for the benefit of any third party without IAE’s written consent. Neither receipt nor possession of this document, from any source, constitutes IAE’s permission. Possessing, using, copying or disclosing this document to or for the benefit of any third party without IAE’s written consent may result in criminal and/or civil liability. This document does not contain any export regulated technical data. LATAM PM Special Support (2024-September-12) Final.docx AAA PW1100G-JM SUPPLEMENTAL SUPPORT AGREEMENT BY AND BETWEEN INTERNATIONAL AERO ENGINES, LLC AND LATAM AIRLINES GROUP S.A. DATED AS OF TO BE WRITTEN IN BY IAE September 17, 2024

 
PRIVILEDGED AND CONFIDENTIAL IAE Proprietary – Subject to the Restrictions on the First Page. This document does not contain any export regulated technical data. LATAM PM Special Support (2024-September-12) Final.docx Page 16 IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed as of the date first written above: INTERNATIONAL AERO ENGINES, LLC By: Name: Title: LATAM AIRLINES GROUP S.A. By: Name: Title: By: Name: Title:

 
EX-4.48 6 a448latam-tamv2500fpa.htm EX-4.48 a448latam-tamv2500fpa
This document contains proprietary information of IAE International Aero Engines AG (“IAE AG”). IAE AG offers the information contained in this document on the condition that you not disclose or reproduce the information to or for the benefit of any third party without IAE AG’s written consent. Neither receipt nor possession of this document, from any source, constitutes IAE AG’s permission. Possessing, using, copying or disclosing this document to or for the benefit of any third party without IAE AG’s written consent may result in criminal and/or civil liability. This document does not contain any export regulated technical data. LATAM V2500 FPA (2024_SEP_12)execution version.docx CRP V-SERVICESSM FIXED PRICE REPAIR AGREEMENT BY AND BETWEEN LATAM AIRLINES GROUP S.A. AND TAM LINHAS AÉREAS S.A. AND IAE INTERNATIONAL AERO ENGINES AG DATED AS OF TO BE WRITTEN IN BY IAESeptember 17, 2024

 
IAE AG Proprietary - Subject to the Restrictions on the Front Page LATAM V2500 FPA (2024_SEP_12)execution version.docx Page 30 IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed as of the date first entered above and deem that it is executed in the State of Connecticut. IAE INTERNATIONAL AERO ENGINES AG By Typed Name Title LATAM AIRLINES GROUP S.A. By Typed Name Title LATAM AIRLINES GROUP S.A. By Typed Name Title TAM LINHAS AÉREAS S.A. By Typed Name Title TAM LINHAS AÉREAS S.A. By Typed Name Title

 
IAE AG Proprietary - Subject to the Restrictions on the Front Page LATAM V2500 FPA (2024_SEP_12)execution version.docx Page 30 IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed as of the date first entered above and deem that it is executed in the State of Connecticut. IAE INTERNATIONAL AERO ENGINES AG By Typed Name Title LATAM AIRLINES GROUP S.A. By Typed Name Title LATAM AIRLINES GROUP S.A. By Typed Name Title TAM LINHAS AÉREAS S.A. By Typed Name Title TAM LINHAS AÉREAS S.A. By Typed Name Title

 
EX-4.49 7 a449aircraftassetsaleand.htm EX-4.49 a449aircraftassetsaleand
EXECUTION VERSION DATED __________________, 2024 EACH "SELLER" LISTED IN SCHEDULE 1 as Sellers LATAM AIRLINES GROUP S.A. as Buyer AIRCRAFT ASSET SALE AND PURCHASE AGREEMENT relating to the sale of one (1) Boeing 777-300ER Aircraft with Manufacturer's Serial Number 38886 one (1) Boeing 777-300ER Aircraft with Manufacturer's Serial Number 38888 and one (1) Boeing 777-300ER Aircraft with Manufacturer's Serial Number 38889 21 June

 












- Signature Page – Aircraft Asset Sale and Purchase Agreement MSNs 38886, 38888, 38889 LATAM AIRLINES GROUP S.A. as Buyer By: Name: Title: LATAM AIRLINES GROUP S.A. as Buyer By: Name: Title: DocuSign Envelope ID: C1B446FD-5D20-43EC-992B-1D505EF1793F Andrés Del Valle Authorised Signatory Authorised Signatory Sebastián Acuto

 
EX-8.1 8 a81listofsubsidiaries2024.htm EX-8.1 Document
Exhibit 8.1
Legal Name Place of Incorporation Doing Business as
Ownership (%)(1)
Transporte Aéreo S.A   Chile   LATAM Airlines Chile     100.00%
LATAM Airlines Perú S.A. Peru LATAM Airlines Peru 99.81%
LATAM-Airlines Ecuador S.A.   Ecuador   LATAM Airlines Ecuador   Voting 60.00%
No Voting 100.00%
LAN Argentina S.A   Argentina   LATAM Airlines Argentina     100.00%
Aerovías de Integración Regional, Aires S.A Colombia LATAM Airlines Colombia 99.23%
TAM S.A   Brazil  
LATAM Airlines Brasil (2)
   Voting 51.04%
No Voting 100.00%
Transporte Aéreos del Mercosur S.A.   Paraguay   LATAM Paraguay     94.98%
Lan Cargo S.A Chile LATAM Airlines Cargo 99.90%
Linea Aérea Carguera de Colombia S.A.   Colombia   LATAM Cargo Colombia     90.46%
Aerolinhas Brasileiras S.A. Brazil LATAM Cargo Brazil 100.00%
(1) Percentage of equity owned by LATAM Airlines Group S.A. directly or indirectly through subsidiaries or affiliates.
(2) TAM S.A. include its affiliate TAM Linhas Aereas S.A (“TLA”), which does business under the name “LATAM Airlines Brazil”.
EX-11.A 9 a11acodeofconductlatam.htm EX-11.A a11acodeofconductlatam
Code of Conduct MT 1 CODE OF CONDUCT OF LATAM GROUP

 
Code of Conduct 2 Code of Conduct of LATAM group 1. Purpose 4 2. Scope 5 3. Requirements 6 4. Responsibilities 7 4.1. Code of Conduct Committees 8 4.2. LATAM group Compliance Department 8 4.3. Executives, Leaders and Managers 9 4.4. Employees and Collaborators 9 4.5. Third Parties 10 5. Guidelines 11 5.1. Labor Practices 11 5.2. Environment, Health and Safety 11 5.3. Alcohol and Drug Use 15 5.4. Privacy, Confidential Information and Insider Trading 16 5.5. Intellectual Property, Material, Assets and Benefits 19 5.6. Conflict of Interests 22 5.7. Relation with Customers and Government Entities 25 5.8. Relationship with Suppliers 28 5.9. Competition Defense Laws (Anti-trust) 30 5.10. Financial Responsibility – Prevention of Money Laundering and undue payments 30 5.11. International Trade 33 5.12. Information Security 34 6. Escalation 35 7. Sanctions 36 8. Definitions 37

 
Code of Conduct 2 3 How does the Compliance Program work?

 
Code of Conduct 4 Dear all, The LATAM group continues to make steady progress to become a more Just, Empathetic, Transparent and Simple -JETS- group. The group’s engagement with, and respect for individuals, society and the environment builds our identity. To continue “making sure dreams reach their destination”, LATAM group needs the trust of our customers, and to gain it, the group’s behavior must be flawless. This Code of Conduct provides the guidelines and directives to act in an ethical and responsible manner, in line with our culture and values. It is a guide to ensure that the employees and collaborators of LATAM group make the right decision when facing complex circumstances. The behavior of those who are part of LATAM group must always be aligned with the Code of Conduct, which reflects the commitment to the culture of transparency and integrity. Each individual must read, understand, respect and fully comply with this Code of Conduct. It applies equally to everyone that is part of LATAM group, as well as third parties that carry out activities on behalf of the different LATAM group entities. Thank you for your ongoing commitment to LATAM’s conduct guidelines, which are essential to becoming more JETS. Roberto Alvo CEO LATAM Airlines Group

 
Code of Conduct 4 5 The LATAM Airlines Group S.A and its affiliated companies (“LATAM group”) conducts its internal and external activities based on this Code of Conduct (“Code”), with confidence that the LATAM group’s success demands a high level of ethics in the conduction and development of business. Publishing this Code of Conduct, the LATAM group hopes to assist all those who represent it in order for them to adopt a uniform approach to ethical issues in conducting the LATAM group’s businesses, and for them to know how to act in countless typical situations of the day-to- day of an organization. Administrators, leaders of all levels and positions, and employees (hereinafter the “employees”), and also the trainees, apprentices and students in practice (hereinafter the “collaborators”) of the LATAM group and, in general, all those who operate in companies and affiliates of the group and also abroad under the name of LATAM group, or who have business relations with it (“Business Partners”), each in the ambit of his functions and responsibilities, must meet and respect the guidelines and legal provisions contained in this Code. 1. Purpose

 
Code of Conduct 6 This document applies to all employees and collaborators of the LATAM group. Stockholders, Investors and the Financial Community The dialogue and relations of the LATAM group with all categories of stockholders, institutional and private investors, financial analysts, market agents and, in general, with the financial community, must be based on a maximum transparency, respecting the principles of accuracy, promptness, and equality in the access to information, considering a correct evaluation of LATAM group’s assets. Customers The excellence of the products and services offered by the LATAM group is based on a constant innovation, in order to anticipate the needs of its customers, taking care of their requests with immediate and competent responses, and adopting a friendly and honest conduct of collaboration. 2. Scope

 
Code of Conduct 6 7 All those who are committed to this Code are required to take the necessary measures to cease any conduct constituting an infringement to this Code, if they become aware that any external organization that has relations with the LATAM group is acting in conflict with these guidelines. The mentioned measures include the immediate termination of an existing commercial and/or contractual relationship, if necessary. The LATAM group forbids any employee and collaborator to retaliate against or prejudice anyone who reports or helps to solve a problem related to an ethical issue or failure to comply with the applicable laws in each country where we operate in. It is also forbidden to suggest or request that another person disobey the Code of Conduct of the LATAM group. It is important that employees and collaborators become aware of the importance of communicating any doubt regarding improper ethical conducts, being able to use the LATAM group’s Confidential Channel, available in all countries in which the LATAM group operates, in accordance with the applicable local legislation. 3. Requirements

 
Code of Conduct 8 All employees and collaborators are responsible for the compliance with the policies compiled in this Code. The Board of LATAM Airlines Group S.A. (“Board”) has approved the content and publication of this Code, which was approved by the Personnel Management Vice Presidency (Human Resources, “HR”) and by the Legal Affairs & Compliance Vice Presidency of LATAM group. In case of situations that can be regarded as anti-ethical or illegal, or that are not aligned with this Code, all must act to protect the image of the LATAM group, escalating the situation to those responsible for solving the problem. Thus, our employees and collaborators can count on the support of the following areas/people: • Their immediate superior; • The HR Office (Personnel Management) designated for their area; • The local Legal Department / Compliance. 4. Responsibilities In addition, all employees and collaborators can, in accordance with the local laws, confidentially and anonimously report and escalate their concerns directly, electronically or by telephone, through the channels made available by LATAM group published on the LATAM Portal: https://www.canalconfidencial.com.br/grupo_latam

 
Code of Conduct 8 9 Each of the LATAM group’s companies has a Code of Conduct Administration Committee (“Committee”), which is in turn is coordinated with the LATAM Compliance Department, that report to the Board. The Committee of each company is a consultative, deliberative and decisive instance, aimed at observance and fulfillment of the ethical principles defined by the applicable local and international laws in effect, and by the internal documents of the LATAM group in any commercial or professional relationship established. The Committee of each company has the responsibility of resolving ethics and compliance conflicts that are not resolved by the supervisory chain. Therefore, the Committees’ meetings will be convened when needed. The Committees’ attributions of coordination extend to all LATAM group’s companies and are regulated through established specific procedure. 4.1. Code of Conduct Committees The LATAM group’s Compliance Department (“Compliance Department”) was created aiming at greater transparency in the LATAM group’s activities, operating in accordance with the applicable local legislation in the countries where the companies of the group operate and the legal commercial practices we are subject to. The Compliance Department reports to the Board and to the VP of Legal Affairs and Compliance. 4.2. LATAM group Compliance Department The Compliance Department, together with the Legal Departments and the Human Resource Departments (HR) of the LATAM group are responsible for coordinating the elaboration and revision of this Code, and updating it with new items or concepts when necessary. Together with HR, the Compliance Department also has the responsibility to widely disseminate the Code and its guidelines, coordinating and operationalizing training, or through internal communication campaigns whenever necessary. The Compliance Department is also responsible for developing, discussing, approving and executing proactive actions aimed at teaching, disseminating and clarifying the LATAM group’s desired standards of conduct, and adapting the internal practices, policies and procedures to the ethical principles defined and to the applicable laws in each country in which it operates. It shall continuously advise the entire LATAM group operation about the laws and internal policies. It also has the responsibility to define guidelines for the operation of the LATAM group’s Confidential Channel, until it is possible to inform the solution to the question reliably, confidentially, and free of any retaliation or discrimination. The Chief Compliance Officer (Senior Compliance Executive) shall direct the Committee to resolve the ethical and compliance conflicts that are not resolved by the supervisory hierarchy or that are not foreseen in this Code.

 
Code of Conduct 10 4.3. Executives, Leaders and Managers It is the duty of the employees and collaborators to know and apply this Code, which must be formalized through the signature of the applicable “Personnel Commitment Term” upon their hiring by the company and whenever its revalidation is requested during the employment relationship, in accordance with internal guidelines and applicable local legislation. It is also their duty to ensure compliance with and enforce this Code within the LATAM group, whether at operational or managerial levels. They must also immediately communicate the any doubt that they or any other person may have regarding possible violations of this Code and other applicable laws in their country of operation. For reasons of confidentiality of information and operational security, in specific circumstances, some departments could adopt certain liability agreements or annexes to a specific employment agreement, if any. 4.4. Employees and Collaborators It is the duty of the executives, leaders and managers in general to be an example of ethical conduct to their subordinates. It is their duty to ensure compliance with this Code by encouraging their subordinates to communicate their concerns regarding ethical conduct. They are also responsible for preventing problems, identifying, communicating and monitoring the main areas of risk of violation of this Code. Detecting problems related to this Code and the company’s internal policies, counting on the support of the respective Committee, thus evaluating the efficacy of the measures taken. As soon as it is noticed any failure to comply with this Code, it shall be requested to those responsible to apply the appropriate disciplinary measures.

 
Code of Conduct 10 11 Third parties having contracts with LATAM group have the duty to respect and enforce these guidelines, as soon as they become aware of the Code, according to the contract signed with the LATAM group’s companies. Third parties must also report any concern regarding possible violations of this Code and collaborate in the case of investigations when requested. 4.5. Third Parties

 
Code of Conduct 12 This LATAM group’s Code of Conduct seeks to assist all those who, in any way, relate to the group in adopting an ethical stance in their activities. Below are listed the ethical conduct guidelines that must be followed for compliance with laws applicable to the business and operations of the LATAM group. Some of these guidelines are detailed in specific policies, where their operationalization and applicable disciplinary measures will be defined and explained in detail. 5. Guidelines The LATAM group has the commitment of offering fair labor practices, complying with the applicable legislations in each country where it operates, including the prohibition of any form of discrimination and harassments. By promoting equal access and fair treatment to all employees and collaborators, based on merit, the success of the LATAM group is further enhanced and, at the same time, the growth of individuals is promoted. The LATAM group is committed to comply with the labor and employment legislations of each country where it operates, and this includes the laws related to freedom of association, privacy, recognition of collective bargaining agreement, prohibition of forced or compulsory labor, child labor, and any type of discrimination. 5.1. Labor Practices

 
Code of Conduct 12 13 d. Respect the employees’ and collaborator’s privacy rights by using, maintaining and transferring personal information records according to the Internal Policy of Data Protection and Privacy, as required by applicable local laws. However, the LATAM group reserves the right to monitor the use of its assets (computers, emails, phones, proprietary information) according to the applicable law in each country of operation and internal procedures defined by the Information Security area. e. Maintain a respectful and cordial attitude toward the employees, collaborators and heads of business, as well as toward the customers, business partners, and allies (suppliers and allies in general). Therefore, in practice, we must: a. Use the merit, qualifications (educational background, experience, competence) and other professional criteria as sole base for all decisions related to the work that affects employees and candidates to the workforce of the LATAM group. b. Recruit, hire, train, remunerate, promote and provide employment conditions without taking into account race, color, marital status, religion, nationality, gender, maternity, sexual orientation, age, political opinion, social origin, physical disability or other characteristics protected by law. c. Promote a work environment free of improper insinuations of any nature, such as insinuations directed at a person on account of his or her race, color, marital status, political opinion, social origin, religion, nationality, gender, maternity, sexual orientation, age, physical disability or other characteristics protected by law according to the country of operation.

 
Code of Conduct 14 a. Create or maintain a hostile work environment (for example, jokes that expose someone, ridicule or offend an individual of a certain race or religion are forbidden, among others). b. Allowing race, color, religion, nationality, gender, maternity, sexual orientation, age, physical disability, level of kinship/ friendship or other protected characteristics according to the applicable law to influence the hiring, promotion, remuneration and other professional decisions. c. Refusal to work or cooperate with certain individuals due to their race, color, religion, nationality, gender (including maternity), sexual orientation, age, physical disability or other characteristics protected by applicable local law. d. Violation of the labor and employment laws of the country in which it operates and also those that the LATAM group must respect globally. e. Dissemination of employees and collaborators’ information to third parties who have no commercial need or authority to have such information, without awareness and express authorization of the LATAM group and/or the employee/collaborator in question. f. Use of the position or function for the following purposes, regarded as abuse of power: forcing its employee or collaborators to perform tasks to take personal benefits, that allow the obtainment of personal advantages like access to restricted places, personal benefits using the name of the LATAM group to obtain discounts in 5.1.1 Situations of Risk accommodations, leisure trips, vacations, entertainment or even to obtain economic advantages from other partners of the LATAM group. This prohibition, however, does not apply to the “official” benefits granted or defined by the group. g. Sexual harassment conduct to another employee or person in the work environment (according to applicable legislation in each country). The International Labor Organization (ILO), body of the United Nations, characterizes sexual harassment at work when this presents the following particularities that affect the person harassed (whether woman or man): be clearly a condition to maintain employment, influence promotions and/or career, compromise professional performance, humiliate, insult or frighten. h. Moral harassment of another employee or person in the work environment (according to the applicable legislation in each country). Moral harassment is an abusive conduct committed by one or more people against an individual or group, with the aim of undermining the harassed person. It does not necessarily involve a relation of hierarchy. It is usually a repetitive and prolonged set of hostile attitudes including gestures, words or actions that humiliate disqualify and belittle the harassed person. This is a deplorable practice because it causes shame, embarrassment, exposure to shameful situations, humiliation, discrimination and fear, with negative reflections on the work environment and health of the individual, whose dignity is affected.

 
Code of Conduct 14 15 i. When on a work trip, when performing any function in the offices or companies of the LATAM group in another locality or country, one must be informed of the local customs, laws and practices, which may differ from those of one’s place of origin and, therefore, adapt one’s behavior responsibly. However, if one feels harassed in a country different from one’s country of origin, follow the instructions and norms in effect in your country of contracting. d. Respect the rights and environmental interests of neighboring countries and communities. e. Make efficient use of the natural resources available in the workplace, always recycle whenever possible and promote innovative practices that allow obtainment of greater economic efficiency through ecological efficiency. f. Act in a socially responsible way, respecting the customs and traditions of the people with whom one relates and also contribute as far as possible toward sustainable development of the communities where the LATAM group operates, especially in tourist activities. g. Propose improvements that guarantee that one’s workplace is always safe and healthy, notifying the immediate superior in case of irregularities or non- compliance with laws and adjusting one’s own irregular conducts quickly. h. Always act according to the rules stipulated, there is no case of exception where a safety practice can be ignored or should not be respected. i. Know the emergency exits and location of the fire protection and firefighting equipment in the workplace. 5.2. Environment, Health and Safety The LATAM group is committed to protect the environment, health and safety, and will endeavor to promote a safe and healthy environment, preventing unfavorable and damaging impacts on the environment in the communities where it operates. Therefore, in practice, we must: a. Comply with the applicable environmental laws and regulations. b. Create and maintain a safe work environment and prevent occupational accidents and diseases. c. Try to reduce waste, emissions and use of toxic material generated by the operations, according to the procedures internally defined. Never improvise the disposal of industrial residues and wastes.

 
Code of Conduct 16 a. Unsafe activities and conditions, such as: failure to use the proper personal protection equipment, use chemical products without proper identification (label), wiring exposed or unsafe, block fire exits, driving vehicles imprudently, and other equivalent situations. b. Failure to comply with environment, health and safety regulations. c. Deficiencies identified during local government inspections. d. Environmental, health and safety hazards or accidents not reported. e. Perform activities for which one has not received the respective training or necessary proper equipment. Especially, for those who work under special safety regulations, such as pilots, crew and mechanics, among others, they will be obliged to know, respect and meet the special norms and policies that govern their activities, and obey the measures implemented by LATAM group to ensure compliance with them. Therefore, in practice, we must: a. Never show up to work under the influence of alcohol or illegal drugs. b. Never bring alcohol or drugs (illegal) to the workplace, nor distribute among employees and other people of the LATAM group, its customers or third parties. c. Always maintain an appropriate and responsible attitude when participating in external activities, at the workplace or outside working hours/day, which are organized by LATAM group, avoiding, in any case, the inappropriate or abusive consumption of alcoholic drinks. 5.2.1. Risk Situations As members (employees or collaborators) of the LATAM group, we must all be responsible and present ourselves at work without the influence of alcohol and/or drugs. We must respect our lives and those of our workmates and customers. Thus, alcohol and drug use is forbidden during the work period in companies of the LATAM group and all are requested to read and respect the specific guidelines on this matter in effect to act according to the legislation applicable to the country where you are hired to work in name of the LATAM group. 5.3. Alcohol and Drug Use

 
Code of Conduct 16 17 Taking part in internal celebrations or external activities that include dinners and/or lunches with inappropriate consumption of alcoholic drinks with customers or business partners, suppliers, and commercial allies. For example, end-of-the-year parties or similar, congresses, international fairs, among others. This risk is limited to activities in which the employee acts representing the group and not in the ambit of his or her own private life. Attention: Each country has specific laws on the application of toxicological tests to promote total safety in the operations of companies that work with activities and/ or positions that may pose risk to the lives of third parties. Therefore, each LATAM group employee or collaborator must read and respect the specific policy on drug and alcohol consumption and on application of toxicological tests applicable to their activity and country in which they were hired and maintain their employment relationships. Internal information of the LATAM group, such as group’s policies, manuals, internal documents, strategies of sales, development, maintenance, alliances, marketing, services and any others that would be produced internally, shall always be kept protected as confidential until the LATAM group decides for its publication. LATAM group is committed to participate in the markets in an open and fair manner with regard to the public negotiation of deeds and securities. Therefore, LATAM group set standards of conduct for employees and all those who may obtain relevant and sensitive information, including on prices that are not in the public domain (internal and privileged information). Thus, negotiating with internal and privileged information constitutes a crime when involving the financial market. This guideline not only requires full compliance with these laws, also to avoid even the appearance of trading with internal and privileged information. This guideline is not intended to restrict the freedom of employees in making their personal investments adequately or the right of the LATAM group to legitimately use and disseminate internal and privileged information in the normal course of its business. Insider Trading Negotiations with internal and privileged information involving purchase and sale of stocks or other securities of any company of LATAM group are forbidden. It is also forbidden to disclose internal and privileged information, for example, to a relative, colleague or friend. 5.3.1 Risk Situations The LATAM group is committed to protecting the personal information obtained or maintained about consumers, customers, employees and collaborators. Therefore, each one must safeguard the individual information entrusted to him and do not disclose it improperly or without authorization. All laws, regulations and agreements on the protection of privacy and data and LATAM group’s internal policies must be met, in addition to the Information Security Policy. 5.4. Privacy, Confidential Information and Insider Trading

 
Code of Conduct 18 It is also forbidden to negotiate/sell information regarding the LATAM group business activities or personal data of its employees, collaborators and customers with competitors, private companies, etc. “Privileged information” shall be any data, report, information, forecast, plan or similar, referred to the LATAM group, its business or to one or several values issued by the group and not disclosed to the market, and whose knowledge is, by its nature, able to influence the quotation of its values issued or any information that an investor may deem important for its purchase decision, retention or sale of values that is not public, unless there is a specific agreement between the parties or it is allowed according to the legislation of each country. Therefore, in practice, we must: a. Comply with all laws, regulations and treaties on the protection of privacy and data, according to each country of operation, and the policies on privacy and protection of customer, suppliers, employees and collaborators data, in addition to the Information Security Policy. b. Provide consumers in accordance with privacy laws and guidelines, with the following: notice of the relevant privacy norms, description of the type of information requested and the purpose for which it will be used, possible uses of the information for LATAM group’s business, access to information for verification and correction, security for the information provided. c. Refrain from acquiring, using, or disclosing information about consumers in a way inconsistent with the privacy norms, applicable laws and regulations. d. If you have access to individual information from consumers or suppliers, use this information only for previously authorized commercial purposes. e. Keep secure the files containing information on consumers, suppliers, employees and collaborators. f. Lists of passengers, customers and data of suppliers, employees and collaborators, their financial status and any other type of internal information should always be regarded as confidential, except in situations in which the law of the country allows them to be disclosed. g. Except when permitted by law, do not discuss confidential issues of the LATAM group, its commercial strategies, products, services, its customers, suppliers, employees and collaborators, nor discuss sensitive matters related to these, in public places, including on the internet, social networks and telephones, such as cell phones or radios, elevators, public transportation, etc. h. Never buy or sell stocks or other securities while holding internal and privileged information on them.

 
Code of Conduct 18 19 i. Never recommend or suggest third parties to buy, sell or maintain LATAM group stocks or other securities while holding internal and privileged information on it. j. Never reveal internal and privileged information to any person outside the LATAM group, including relatives. k. Only disclose internal and privileged information within the LATAM group in the normal course of work and when you are certain that it will not be used unduly. e. Improper security control that could allow unauthorized access to information of individual consumers, suppliers, employees or collaborators. f. Access the internal LATAM group’s systems to search for customers, employees, collaborators or suppliers’ information for personal purposes. g. Recommend or suggest to others to buy or sell LATAM group securities (or of any of its companies and affiliates) if you have access to inside information of the group, which is illegal. h. Knowledge of events that can affect the value of stocks of the LATAM group or its affiliates, and that are not yet of public knowledge. 5.4.1. Risk Situations a. Commercial or marketing plans involving gathering or disclosure of improper information and without authorization, as well as the use and disclosure of information of consumers, suppliers, employees and collaborators. b. Privacy or communication guidelines outdated or incorrect. c. Disclosure or request to disclose individual information on consumers, suppliers or employees/collaborators, especially sensitive personal information, to third parties, in violation of the applicable laws of each country of operation. d. Transfer of consumer, suppliers, employees and collaborators information between countries, in violation of the applicable laws of each country of operation.

 
Code of Conduct 20 5.5. Intellectual Property, Material, Assets and Benefits Intellectual property means trade secrets, trademarks, patents, copyrights and other proprietary information subject to special protections. The LATAM group’s intellectual property shall be protected by all employees and collaborators. Therefore, it is forbidden to disclose or discuss with third parties this type of information without prior authorization of the LATAM group. Besides protecting its own intellectual property rights, the LATAM group respects the valid intellectual property rights of third parties. This guideline includes the establishment, maintenance and defense of all intellectual property rights and the responsible use of them. All employees and collaborators must take measures to protect these assets. Unauthorized use of third parties’ intellectual property may expose the LATAM group to civil penalties and compensation according to the applicable legislation in each country of operation. All materials, tools, services, facilities, vehicles, equipment, internet access and corporate email that LATAM group places at the disposal of employees and collaborators for the sole purpose of adequately performing the functions for which they were hired, are also assets owned by the LATAM group. Likewise, the work products of employees and collaborators at the workplace or during work hours are assets that belong to the LATAM group, as well as the brand names of LATAM group. Therefore, any unauthorized, excessive, unnecessary and unjustified use of these assets puts at risk the sustainability of this organization and shall be regarded as a violation of this Code. The same applies for the LATAM group’s affiliates. Additionally, the employee or collaborator’s position shall not be used for illegal activities or in a way that interferes with the LATAM group’s responsibilities. The policies governing the use of benefits provided by the LATAM group or by third parties in favor of its employees and collaborators must be respected, especially the policies regarding to air tickets granted by internal concession programs and agreements with partner airlines.

 
Code of Conduct 20 21 f. Documents that may be the object of a court proceeding, or required by a competent regulatory or supervisory authority shall not be destroyed or altered. g. Recognize that any system, product or drawing of services, developed by external companies at the request and for the use of the LATAM group, are regarded as the property of the LATAM group, depending on the contract negotiated with the external company. Thus, the contracts for these services must consider clauses that protect the intellectual and industrial quality of the LATAM group. h. Take responsibility for all messages sent using the corporate email account, because it may represent the opinion of the LATAM group on the subject in question. i. Circulation of pornography, message chains, jokes, political propaganda and, in general, any type of inappropriate, questionable information or information that is not related to your work is not allowed. It is also strictly forbidden to use the internet to download pornographic material or any other illegal material. j. Employees and collaborators are not allowed to directly or indirectly manipulate or alter the LATAM group or third parties’ systems to their own benefit or the benefit of others, especially for issuance and use of courtesy tickets offered by the LATAM group, reservations, check-in at the airport, change/upgrade of ticket class, etc. Likewise, the abuse or malicious use of other benefits offered by the LATAM group directly or through third parties or commercial partners are strictly forbidden. Therefore, in practice, we must: a. Identify and protect the LATAM group’s intellectual property. b. Claim intellectual property rights according to the law. c. Respect patents, materials protected by copyrights and other intellectual property rights of third parties that are in effect. Consult the LATAM group Legal Department regarding the need to obtain licenses or authorizations required for use of such type of intellectual property. d. Consult the respective Legal Department before: requesting, accepting or using proprietary information belonging to third parties, revealing LATAM group’s proprietary information to third parties, and allowing third parties to use the LATAM group’s intellectual property. e. Ensure that documents, emails and internal presentations are created, transmitted, copied, kept and filed without incurring in risk that unauthorized persons have access to them.

 
Code of Conduct 22 f. It is not allowed to use the name, brand or logo of the LATAM group and its affiliates in documents, presentations or similar outside the uses and interests of the LATAM group, without proper authorization from the Marketing Department. g. It is forbidden to edit, transform or alter in any way the logo of the LATAM group or any of its components. h. Acknowledge that only people authorized by the LATAM group can make public declarations on behalf of the LATAM group. In this case, if the media gets in contact with any employee or collaborator regarding the LATAM group’s activities, it must be sent for approval of Corporate Affairs area, which is authorized to answer the subject adequately. i. Do not make inaccurate or false recording of transactions made by LATAM group, for any purpose, whether to conceal financial losses, reduce profit or affect the LATAM group’s performance. a. Receiving from employees or collaborators proprietary information about previous employer, including internal and confidential information from the company in which they worked. b. Accepting information owned by LATAM group service providers without consulting with the company’s Legal Department office beforehand. c. Discussing LATAM group’s confidential information with customers or suppliers. d. Releasing or disclosing information about new services before verifying if the same are subject to any intellectual property registration or if any intellectual property protection is available. e. Hiring competitors’ former employees with the purpose of obtaining information regarding that competitor. 5.5.1. Risk Situations k. The access passwords to the LATAM group computer and technical systems are personal and non-transferable, reason why it is forbidden to provide them to others under any circumstance.

 
Code of Conduct 22 23 Therefore, in practice, we must: a. Disclose our external activities, financial interests or personal relationship that may pose eventual conflict of interest or appear to conflict with the responsibilities in the LATAM group. Make declarations in writing to your manager through the “Conflict of Interests Declaration” form, an annex to the Internal Selection Policy, as well as to Chief Compliance Officer and to the Business Partners of Human Resources (“HR BP”) of your Business Unit/ corporate area. b. Avoid actions or relationships that may be in conflict or seem to conflict with the professional responsibilities or interests of the LATAM group and inform them through the “Conflict of Interests Declaration” form to the manager, as well as to the Chief Compliance Office and HR BP of your area. c. Do not misuse the resources, intellectual property and material, time and installations, including office equipment, email and software of the LATAM group. Thus, the sale of merchandise, foods, consumer goods and services in the workplace (offices, operation bases, hangars, parking areas, etc.) is not allowed. d. Notify the immediate superior before accepting any management or board member position in an external business. The LATAM group recognizes and respects the rights of employees and collaborators to participate in other businesses or financial activities outside their work, as long as said businesses or activities are allowed for the respective applicable legislation. Thus, said businesses or activities must be lawful and free of conflict with their responsibilities as employees or collaborators of the LATAM group. The employees and collaborators shall not unduly use the resources or influence of the LATAM group to their own benefit, or compromise the reputation or good name of the LATAM group. Therefore, relationships or activities that may be in conflict, or that appear to be conflicting with the professional responsibilities or interests of the LATAM group shall be avoided. 5.6. Conflict of Interests

 
Code of Conduct 24 e. Notify superiors before accepting a board member position in a nonprofit institution, whenever there is a commercial relationship with the LATAM group, or expectation of financial or any type of support by the LATAM group. j. Recognize that LATAM group companies establish, through the Personnel Vice-Presidency, specific rules for the “Hiring of Family Members”, its criteria and formalization required for restrictions to the hiring of new employees or collaborators who have relatives working in companies of the LATAM group and/or its subsidiaries and affiliates, or for cases of promotion or change of position that was previously not impacted by family ties. If a conflict of interest is verified in the hiring of a new employee or collaborator or in internal personnel rotation, the respective Human Resources area (Personnel Management) shall notify the Chief Compliance Officer to jointly analyze the case and give the proper advice for decision-making. c. Provided there is an employment relationship with LATAM group, no employee or collaborator may work for a competitor company and/or work in competitive activities as freelancer or non-freelancer, subject to local laws. Provided it does not compromise the performance of the functions at LATAM group, does not pose risk to the operational safety or safety of the employee/collaborator, and does not imply any failure to comply with local legislation, the employee or collaborator may perform a secondary activity. Secondary activity is taken to mean all permanent work (not eventual) performed in addition to the activities already performed in the LATAM group. Activity as a speaker and other similar activities, which are performed eventually, are not considered secondary activities. d. Receiving gifts from suppliers, customers or competitors while you are in a position in which you can influence decisions of the LATAM group that may affect or seem to affect the company externally. e. Receiving discounts and personal benefits from suppliers, service providers, customers and public entities or employees that are not available to the public at large or to employees or collaborators of the LATAM group in similar conditions. f. Divert internal business/services to a supplier or provider, especially if you, your relatives or friends own it or are the administrators. a. Having financial participation in a company that could affect the business of LATAM group. b. Accepting a part-time job where you will spend time during your work shift at LATAM group, or using LATAM group’s equipment or materials. 5.6.1. Risk Situations

 
Code of Conduct 24 25 g. Misuse LATAM group’s resources, the position you occupy or influence you may have, to promote or help another company or even a nonprofit activity. h. Making a hiring (including temporary service) or promotion decision in favor of a spouse, family member or close friend. i. Accepting inter-departmental positions or positions with direct subordination to a family member that may have influence (directly or indirectly) over your activities and/ or the ultimate interests of the LATAM group, especially when competence and impartiality in decision-making can be questioned. j. Romantic or personal relationship that can create conflict of interests with the responsibilities of the LATAM group’s employee or collaborator or compromise the group’s interests. k. No LATAM group employee or collaborator may offer or accept gifts (or business courtesies) without a joint evaluation with his immediate superior and Chief Compliance Officer, according to this Code. Promotional items without commercial value are regarded as exceptions, which may be accepted by any employee or collaborator, for example: pens, agendas or the like, and to the extent they remain within the usual parameters for the area of operation, are appropriate, and never appear to be able to influence decisions or compromise those who receive them, whether for a LATAM group employee or collaborator or any of our customers, service providers or government authorities. It is also understood that promotional items or gifts with any brand of the LATAM group were developed to be delivered to our customers and business partners and not to be used by the LATAM group’s employees or collaborators, unless they are purchased for this purpose. The right way to report any sending, offering or receiving of these items is defined in the specific policy on Gifts, Entertainment and Hospitality/Travel. l. Do not accept or offer gifts in cash, items that have excessive face value or are unusual for the area of operation. Therefore, to avoid commercial and image risks for LATAM group, never offer or accept gifts that may give the impression or have the purpose of facilitating or expedite administrative procedures or obtainment of certificates, legal, contractual, and regulatory approvals, and contractual or official documents. Nor should gifts be accepted or offered to government employees or authorities that are responsible for regulating the operation of LATAM group companies.

 
Code of Conduct 26 The LATAM group is committed to treating its customers and passengers cordially and respectfully. Its customers deserve the best from all of us anytime and anywhere. Discriminatory conducts against customers or passengers shall never be accepted, regardless whether the discrimination is for reasons of gender, race, religion, origin, citizenship, age, disability, deficiency, marital status, sexual orientation, union membership, or any other protected condition according to an applicable law that has the effect of altering or annulling the equal treatment that should be received by all. An important part of LATAM group businesses take place with government bodies, ministerial and public authorities. Therefore, the LATAM group has the commitment of conducting its activities with all government representatives within the highest ethical standards and in compliance with the applicable laws and regulations in each country of operation. Therefore, it is forbidden to charge inaccurate and unauthorized values in public contracts, violate national and international government regulations defined by the regulatory public bodies of commercial aviation and national regional or international tourism, making undue payments to foreign employees with the aim of obtaining or maintaining businesses that could give the impression of an undue interest. 5.7. Relation with Customers and Government Entities

 
Code of Conduct 26 27 f. Observe all applicable laws and regulations, with special emphasis on the requirements associated with government transactions and contracts. g. Be honest and transparent during negotiations with government authorities and agencies. h. Adopt effective processes to assure that reports, certificates, declarations and proposals are current, exact and complete. Contractual requirements must be duly identified and communicated to the area responsible for the contract execution. i. Makes neither any unauthorized substitutions in the contracted services nor any deviations from the contractual requirements without written approval from the corresponding government authority. Attention: the LATAM group has a specific Policy on Gifts, Entertainment, Travel and Preferential Services that defines the rules to offer and receive such benefits for both employees or collaborators and customers and business partners. Therefore, all have the duty of knowing and observing these guidelines and communicating the immediate superior in case of receiving any gift or invitation to any specific event, for the situation to be duly analyzed and for the applicable measures to be taken jointly with the Chief Compliance Officer, who is responsible for solving doubts regarding their receipt and offer. Therefore, in practice, we must: a. Always treat all customers respectfully and cordially, respecting their differences and accepting their diversity. If the situation gets out of our control or solution range, we must provide all possible support amicably to help our customers to solve their problems or find a reply to it. b. A customer or passenger being the object of discriminatory conduct will never be accepted or tolerated, regardless whether the discrimination is for reasons of gender, race, religion, origin, citizenship, age, disability, deficiency, marital status, sexual orientation, union membership, or any other protected condition according to an applicable law that has the effect of altering or annulling the equal treatment that should be received by all. c. Have an exemplary behavior in all activities, regardless of the customers/passengers being on vacation or business or any other situation. Never forget that everyone must respect and treat all LATAM group customers cordially. d. Show our respect to customers, maintaining an attitude of attention and active concern for them. e. Answer and solve satisfactorily all questions from the customers and pay attention to their problems.

 
Code of Conduct 28 a. Charging incorrect and unauthorized values in public contracts. b. Violating national, international, regional or local government regulations. c. Third parties’ request for payments in their private account or foreign accounts, that are not duly and previously defined and approved in contract. d. Acceptance of information related to the competition or a supplier, unless the contracting authority or responsible for the public body has expressly and legally authorized the disclosure of such information. e. According to the applicable anticorruption law in each country where the LATAM group operates, it is forbidden to offer gratification or make undue payments directly or indirectly to government employees, representatives or public authorities (both official/functional, like government employees, and to any person working in an official position) with the aim of obtaining, maintaining business or that can give the impression or appear to have an undue interest. 5.7.1. Risk Situations

 
Code of Conduct 28 29 The LATAM group’s relationship with its suppliers is based on legal, ethical and fair practices. It is expected from the suppliers to meet the legal requirements applicable to their business. The quality of relationship with the suppliers reflects directly on the quality of service to customers, likewise the quality of the products and services of suppliers affect the quality of LATAM group services. Only will be signed contracts with service providers and suppliers that fully meet the applicable legislation, especially regarding labor and employment legislation, as well as provisions of the LATAM group in relation to occupational health, occupational safety, and respect for the environment and employees and collaborators. The relationship with suppliers of the LATAM group will be governed by the sense of cooperation, such that it is possible to seek solutions to matters of sustainability in the business chain, promoting continuous improvement of the level of excellence in products and services. Therefore, it is requested to LATAM group business partners also commit themselves to this Code. Therefore, in practice, we must: a. Provide opportunity for competitiveness among suppliers, selecting those using legal and transparent criteria. b. Work with suppliers that help LATAM group to create value in its business chain, in a manner that is consistent with the quality, cost of services and treatment of sustainability aspects proposed by the LATAM group. c. Conduct business with suppliers that comply with applicable laws about labor and employment, health and safety, environment, ethics and transparency and, in general, suppliers that comply with all legal requirements applicable to the business. d. Direct to the Compliance Department, through its Confidential Channel, any situation of risk observed in the relationship with suppliers, seeking the correct application of procedures and sanctions, when applicable. e. Count on the participation and advisory of the Legal Department when conducting negotiations or signing contracts of any nature with entities/third parties (external) and always following the LATAM group’s Procurement Policy. 5.8. Relationship with Suppliers

 
Code of Conduct 30 a. Choosing suppliers in a way inconsistent with the Procurement Policy. b. Selecting suppliers with potential conflicts of interest, such as: owner or administrator with relation of kinship or friendship with the party contracting the business or that has a practice of offering of gifts or benefits of excessive value. c. Lack of safety in facilities and in processes related to the regular activities of suppliers. d. Employing minors or workers to perform forced labor or under coercion in its chain of business. e. Any contract or financial contribution that is made in name of the LATAM group for beneficent campaigns, social works or political contributions must obtain express authorization of the respective company’s Board and follow the respective internal policies and norms on the subject. In case that employees or collaborators make such contributions for personal reasons, the LATAM group will not reimburse these expenses and will not be responsible for the obligations contracted individually by the employees or collaborators. 5.8.1. Risk Situations

 
Code of Conduct 30 31 LATAM group observes and defends the laws and regulations of free competition in all countries where it operates. Depending on the country LATAM group works in, it is possible to have different laws of free competition. LATAM group therefore always ensures that these applicable laws and regulations are respected, and we must ensure that our customers and business partners comply with them as well. Therefore, in practice, we must: a. Comply with all laws, procedures and rules that regulate and defend free competition, as well as court decisions, administrative orders and government determinations that affect the LATAM group, its employees and collaborators. b. Not to propose or assume any contracts or agreements with competitors without first verifying that such action does not infringe laws of free competition. c. Always consult previously the local Legal Department for any agreements with third parties. d. Predatory actions or unfair competition in order to obtain, maintain or increase a dominant position in the market of operation are not allowed. e. The products and services of competitors shall not be undermined, even if it is possible through the market rules to conduct comparative advertising campaigns, as well it is forbidden to conduct comparative advertising when this discredits or undervalues the products or services of LATAM group’s competitors. f. Analyze the actions of competitors to maintain success in business, however, using such information will only be allowed if it is obtained lawfully. g. Due to the complexity of antimonopoly laws applicable to the business of LATAM group, before taking actions against competitors, always consult the Local Legal Department. h. Acknowledge that it is not permitted, under any condition, obtain information on competitors unduly or fraudulently. Information obtained in questionable circumstances must be rejected and that shall be informed immediately to the Legal Department. 5.9. Competition Defense Laws (Antitrust)

 
Code of Conduct 32 a. Discussions or agreements with competitors regarding: prices, sales terms or conditions, costs, profits or profit margins, offer of services, division of territory, among others. b. Any contact that may create an appearance of improper agreements or understandings, regardless if the contact has being made personally, in writing, by phone, email, or any other means of communication. The financial responsibility of the LATAM group comprises compliance with the applicable corporate, accounting and tax laws, rigorous professional processes and integrity in the dissemination of financial information. LATAM group employees and collaborators should not provide or offer any item of value seeking to obtain an improper advantage for the sale of goods or services, in financial operations or in representing the interests of LATAM group before public authorities. People involved in criminal activities may try to “launder” the profit from crimes in order to conceal their existence or make these profits seem legitimate. Therefore, must be complied with all applicable laws prohibiting money laundering and that requires communicating the competent bodies any suspicious transactions. Therefore, in practice, we must: a. Never give, offer or authorize, directly or indirectly, the offering of any item of value to a customer, business partner, supplier, private entity or public authority aiming at obtaining any undue advantage. A commercial courtesy like a gift, contribution, benefit or entertainment should never be offered in circumstances that can give the impression of an improper conduct or try to embarrass the receiver. b. Comply with Anticorruption Policy of the LATAM group. 5.9.1. Risk Situations 5.10. Financial Responsibility – Prevention of Money Laundering and undue payments

 
Code of Conduct 32 33 c. Acknowledge that, according to international Anticorruption Laws, it is forbidden to promise, to authorize, to grant, to offer, to offer gratuity or payment of anything of value, whether to a government representative, or someone from the private initiative, with the purpose of corrupting or influencing them, to obtain or maintain any business or any other undue advantage. The employees and collaborators must always comply with the LATAM group’s Anticorruption Policy. d. Comply with all applicable laws that prohibit money laundering and that require money transactions or suspicious transactions to be communicated to the competent authorities. e. Learn to identify the types of payments associated with money laundering, multiple payment orders, traveler’s checks, high amounts in cash, checks in name of a customer issued by unknown third parties, etc. f. Observe the general accounting procedures and accounting principles generally accepted in each country of operation of the LATAM group, the standards, laws and regulations to record transactions and issue financial reports, estimates and forecasts. g. Keep complete, accurate records and accounting entries issued in correct time to reflect all commercial transactions. h. Protect physical, financial, informative and all other assets of LATAM group according to the Information Security Policy. i. Make commercial decisions that do not imply risks for LATAM group. j. Timely submit fair forecasts and assessments to the administration of LATAM group. k. Maintain consistent processes and controls. 5.10.1. Risk Situations a. A person or company representing the LATAM group, or being considered to represent it, which has been accused of improper business practices or with bad reputation. b. Any request to pay a commission to a third party or make any other payment in another country in name of another person. c. Commission that seems disproportionate respect to the services provided. d. Offering valuable benefits or gifts to any government employee. e. Payments made through financial transactions that are inconsistent with the customer’s commercial activities, that seem to have no identifiable connection with the customer or that have been identified as money laundering mechanisms.

 
Code of Conduct 34 f. Request by customer or agent to make a payment in cash. g. Early settlement of loan made in cash or in highly liquid securities. h. Purchase requests that are uncommon or inconsistent with the customer’s activities. i. Transaction structures of payment that do not reflect the true commercial purpose or showing exceptionally favorable payment conditions. j. Transfer of uncommon funds from or to foreign countries unrelated to the commercial transaction made. k. Transactions involving locations that have been identified as tax havens or areas of known money laundering activity. l. Structure of financial transactions with the purpose of avoiding to provide data or reports, such as, for example, multiple transactions below the minimum limit required for providing information. m. Wire transfers that are not consistent with the customer’s commercial activities, or that have origin or destination not related to the operation. n. Requests for money transfer or return of values to third parties or to an unknown or unrecognized bank account. o. Financial results that seem incompatible with the underlying performance and/or inaccurate financial records. 5.11. International Trade The LATAM group undertakes to maintain commercial relations with foreign countries without violating regulations agreed between these countries, including Chile, Brazil and other countries where subsidiaries and/ or affiliates operate. These regulations may be on imports, exports and financial transactions. Therefore, in practice, we must: a. Follow all relevant aspects of the international trade control regulations, including those related to licensing, shipping documentation, import documentation, reports on recordings in other countries where LATAM group conduct business. b. Ensure that all international trade operations are analyzed in accordance with the existing laws and regulations. c. Define which of the parties in an import transaction, is legally responsible for the accuracy of the import documentation. When the LATAM group is responsible, establish procedures to verify the accuracy of the information submitted to the government authorities by the LATAM group and its agents. p. Adaptation of routines and controls in the newly acquired businesses in remote places and with small teams.

 
Code of Conduct 34 35 a. Invoiced price inconsistent with the total value of the imported products. b. Any payment to the exporter or in benefit of the exporter that is not included in the invoiced price or that has not been reported to the customs authorities. c. Transfer of values between partners that fail to cover all costs and profits. d. Inaccurate or incomplete description in the invoice of imported products. e. Inaccurate identification of the country of origin of the imported products. f. Use of customs tariff classification that does not seem to faithfully correspond to the imported products. The LATAM group’s information and resources must be protected correctly and each employee/collaborator must safeguard the protection of corporate data under his or her responsibility. All information security guidelines that aid this protection are detailed in the Information Security Policy and in the Data Privacy and Protection Policy. Therefore, in practice, we must: a. Formally request the necessary accesses to perform functions. b. Not disclose confidential information to third parties. c. Neither discloses nor leaves written in paper your computer access password. d. Install software or application only through the Help Desk area. e. Use the workstation only for professional purposes for which were hired to work at LATAM group. f. Use the LATAM group’s email only to perform the functions for which were hired. 5.11.1. Risk Situations 5.12. Information Security

 
Code of Conduct 36 g. Access the LATAM group’s internet only with purposes related to its professional interests. h. Immediately inform the Information Security Area about any security incident, so the appropriate measures can be taken. i. Know and act according to the Social Networks Policy, taking all necessary care with your image and information or illustrations you publish in Social Networks. It is important that each employee, collaborator and third party become aware of the importance of communicating any doubts regarding improper ethical conduct or evidences related to the noncompliance with LATAM group’s policies, in particular the guidelines defined in this Code. This communication may not be an easy decision, as it may involve workmates and the one who reports any breach of ethical conduct may be seen as a whistleblower. However, it is important to remember that a failure to immediately report a possible unethical conduct or failure to comply with laws that apply to the LATAM group’s operation may result in: • Serious harm to the safety, health and well-being of the individual, workmates, customers and community in which the LATAM group operates; • Loss of confidence in the LATAM group by customers, stockholders, government entities and the community at large (stakeholders); • Fines, indemnities and other financial penalties against the LATAM group; • Fines and/or imprisonment for employees, specifically in the more serious cases, according to the applicable local legislation. 5.12.1. Risk Situations a. Inappropriate security controls and monitoring of corporate resources. b. Disclosure of privileged information to third parties. c. Sharing or disclosure passwords or leaving the computer unlocked when the user is not nearby. d. Do not collect confidential documents from fax machines or printers immediately after printed. e. Incorrectly use of the email and internet, as well as all corporate systems. f. Accidental sending or delivery of emails or printed documents to the wrong people. 6. Escalation

 
Code of Conduct 36 37 Thus, the LATAM group requests that its employees, collaborators and third parties do not remain silent when they have any doubt regarding ethics. The main reason for communicating a doubt is not to compromise a workmate, but rather, to protect the good standing and image of the group. This communication may be identified or anonymous and can be made using the Confidential Channel, as described in item “4. Responsibilities” of this Code, in accordance with the applicable legislation in each country of operation. The employees, collaborators or third parties that violate this Code or its essence, as well as any other policies, norms, procedures and other documents of LATAM group, will be subject to the application of disciplinary measures that could result in the termination of their respective link with LATAM or even legal actions. The LATAM group takes violation to mean: • Acting in noncompliance with this Code and other policies of LATAM group; • Requesting other people to violate this Code and its policies; • Being aware of violations to this Code and not reporting them to the competent channels; • Retaliating against anyone who has reported a doubt regarding an ethical conduct or noncompliance with the laws or policies; • Among others. 7. Sanctions

 
Code of Conduct 38 Agent: is every individual that acts in name of Third Parties that is not an employee, trainee or apprentice. Travel agents: are legal entities, constituted in the form of travel agencies, who maintain contracts with companies of the LATAM group and its subsidiaries, aiming at sale of passenger and cargo air transport services full stop. Apprentice: is every student who maintains apprenticeship contract with or has been assigned to any of the companies making up the LATAM group, in terms of corresponding local law applicable in each country. Collaborator: is every intern, trainee or apprentice of the LATAM group, in terms of corresponding to local laws applicable in each country. Compliance: means to “comply”, “satisfy”, “execute.” In general, it means the corporate commitment to obey and comply with ethical precepts, laws (local or international), policies and norms in general (internal or external) along the entire business chain of the LATAM group and before all of its target-audiences. Consultants: are individual or legal entities that have the specific knowledge required to assist to LATAM group in the creation and/ or development of certain projects, analysis of strategic subjects and elaboration of opinions and views to support decisions to be made by the LATAM group’s managers. Board: group of executives representing the shareholders of LATAM Airlines Group S.A. 8. Definitions Employee: is any individual hired by any of the LATAM group’s companies or by Third Parties according to corresponding law applicable in each country. LATAM group employee: is every employee with an employment relationship with companies or affiliates of the LATAM group of any position or occupation. Competitor companies: are taken to mean those that compete with anyone of the companies belonging to the LATAM group, with one of its associated or related companies. Franchisee: are all business allies that acquire a LATAM Travel, franchise from TP Franchising Ltda., company belonging to the LATAM group for selling products and services related to tourism, etc. Internal information: means all data, information, presentation, summary, email, list or similar that has not been revealed nor expressly authorized for publication or disclosure. Any type of “internal information” is therefore confidential and shall not be disclosed, either internally or externally, without prior authorization from the competent area. Privileged information: is any information that is not in the public domain and that could be determinant for investment decisions. Any information that is not public knowledge regarding a company that may influence your own decision to purchase or sell stocks or securities of this company is probably also internal and privileged information.

 
Code of Conduct 38 39 Government Officials or Government Authority: any person who works for a government entity, as well as any person treated as government authority according to the local laws of each country. For purposes of the policies and guidelines of the LATAM group, and in compliance with local applicable law in each country, candidates for political positions or anyone associated with political parties can also be considered as government authorities. A government entity includes not only governments or national, state or municipal departments, but also: • Commercial companies belonging to or controlled by the government (such as a state-owned oil company, a public hospital or an airport); • Regulatory bodies/agencies controlled or directed by the government (e.g.: DGAC, ANAC, Infraero, etc.); • International public agencies (that have two or more government members). Family members: parents, stepfathers/stepmothers, brothers, children, stepchildren and wards, spouse or partner, uncles, brothers-in-Law and nephews, whether these are from blood ties and/or exclusively legal relation, and also boyfriends/ girlfriends and/or relatives who live under legal dependence of the employee. Trainee: is any student that has a traineeship contract with any of the companies part of the LATAM group or with Third Parties, according with the applicable law of each country.

 
Code of Conduct 40 Service providers: are individual or legal entities hired by any of the companies part of LATAM group for the execution of certain lawful, material or immaterial activities, upon remuneration. Suppliers: are individual or legal entities hired to supply goods to LATAM group, according to the terms of purchase orders and/or contracts between the parties. Representative: is any individual who acts on behalf of third parties, who is not an employee, intern, trainee or apprentice. Commercial representative: is the legal entity hired to act as a LATAM group’s commercial representative through a commercial representation contract, establishing the obligations and responsibilities of the parties, duration, purposes and remuneration. Government representative: is any person that works or acts on behalf of a government or government entity, regardless of hierarchic level, or any executive, director or employee of an international public organization, or even any person who works or acts on behalf of a state-owned company or public service concessionaire. Stakeholders: are all those who relate to the LATAM group, such as customers, stockholders, employees, collaborators, suppliers and business partners. Third Parties: are individual or legal entities that maintain commercial relations with the LATAM group, such as franchisees LATAM Travel, suppliers of products, service providers, consultants, travel agents and commercial representatives (if any).

 
Code of Conduct 40 41

 
EX-11.B(1) 10 a11b1manualforthemanagem.htm EX-11.B(1) a11b1manualforthemanagem
1 MANUAL FOR THE MANAGEMENT OF MARKET-RELEVANT INFORMATION LATAM MARKET AIRLINES GROUP S.A. Hereby, LATAM AIRLINES GROUP S.A. (“LATAM" or the "Company") comes in updating and approving the Manual for the Management of Market-Relevant Information ("Manual"), in compliance with the provisions of General Standard No. 270 of 2010 of the Financial Market Commission ("CMF”). This update of the Manual was approved at a meeting of the Company's Board of Directors on January, 15th, 2025, and is published on the Company's website (www.latam.com) and available at the Company's administration offices and at the CMF. 1. Corporate Body responsible for the Manual The LATAM Board of Directors will be the entity responsible for establishing the provisions of the Manual, as well as for determining and agreeing on modifications and alterations to it from time to time. 2. Compliance It will be the responsibility of the Legal Vice President to ensure compliance with the guidelines contained in this Manual. 3. Transaction Policy Without prejudice to the restrictions, limitations and prohibitions established in Sections 4 and 5 below of this Manual, in the regulations of the CMF, and in Law No. 18,045 on the Securities Market (hereinafter, the “LMV"), Interested Persons (as this term is defined below) may acquire or dispose of (i) securities of the Company (including, without limitation, shares issued by LATAM or American Depositary Shares representatives of said actions); and/or (ii) contracts or securities whose price or result depends or is conditioned, in whole or in significant part, to the variation or evolution of the price of the securities referred to in literal (i) above (hereinafter, the instruments referred to in paragraphs (i) and (ii) above will be referred to as “Company Values"), provided that when carrying out such transactions, (y) the applicable laws and regulations are fully complied with, especially the LMV and (z) the guidelines contemplated in this Manual. For the purposes of this Manual, “Interested People” (i) the directors, managers, administrators and Senior Executives of LATAM. For these purposes, it is understood as “Senior Executives” those executives of the Company who report directly to the general manager of LATAM and who participate in strategic decisions of the Company; (ii) those persons who, due to their position, position, activity or relationship, have access to Confidential Information of the Company, its businesses or the Company's Securities; and (iii) entities controlled directly or indirectly (through third parties), by one or more of the persons indicated in paragraphs (i) and (ii) above. For these purposes, “Confidential Information of the Company” includes the information indicated below, to the extent that it has not been disclosed to the market: (i) information that is essential in

 
2 nature, that is, that which a reasonable man would consider important for his investment decisions; (ii) information of interest, that is, information that, without being considered essential information, is useful for an adequate financial analysis of the Company, the Company's Securities or their offer; and (iii) information whose knowledge, due to its nature, is capable of influencing the price of securities issued by the Company. 4. Disclosure Criteria for Transactions with Company Securities Notwithstanding the generality of the provisions of Section 3 above, for the purposes of the provisions of Article 20 of the LMV, any related person of the Company (including without limitation an Interested Person to the extent that they qualify as such) must inform LATAM of the completion of the transactions referred to in Section 3 with respect to shares issued by the Company as soon as it acquires or disposes of said shares. The information provided must at least include the information indicated in the Annex I of this Manual. The Company, for its part, will keep a confidential record of the transactions communicated to it for this purpose. Additionally, the following information obligations are remembered: i. Persons who find themselves in any of the situations described in article 12 of the LMV (including without limitation an Interested Person to the extent that they qualify in any of said situations) must promptly inform the CMF and the stock exchanges, the transactions carried out in Company Securities. The above, in accordance with the provisions of General Standard No. 269 of the CMF (“NCG 269"), whose rules are expressly reproduced in this Manual. ii. the subjects bound by Circular No. 670 of the CMF (the “Circular 670"), must inform the CMF and the stock exchanges of the purchases, sales and exercises of preferential subscription rights for shares issued by LATAM in accordance with the provisions of Circular 670, the rules of which are also expressly reproduced. iii. The directors, managers, administrators and Main Executives of LATAM, as well as the entities controlled directly by them or through third parties, must inform the stock exchanges in which LATAM is registered, their position in Company Securities and its position in securities of the entities of the business group of which it is a part within the third business day when the indicated persons assume the position or when they are incorporated into the public registry indicated in article 68 of the LMV, when they leave the position or are removed of said record, as well as every time said position is modified significantly. The above, in the terms and conditions established in article 17 of the LMV; and (z) they must report to the general manager of LATAM, on a monthly and confidential basis, their position in the securities of the Company's most relevant suppliers, clients and competitors. For the purposes of determining the persons affected by the information duties provided for in NCG 269 and Circular 670, the Legal Vice President of the Company will keep an updated list of the shareholders obliged to report and the administrators obliged to report, according to these concepts are defined in NCG 269 (the “List of Persons Obliged to Report"). Within the

 
3 first fifteen (15) business days of March of each year, the Legal Vice President will send a statement (the “Announcement") by email to the List of Persons Obliged to Inform, instructing about the information duties that fall on LATAM and on each of the people included in such list, in accordance with NCG 269, Circular 670 and article 12 of the LMV. Without prejudice to the above, when a person is incorporated into the List of Persons Obligated to Report, they will be promptly informed of their duties and obligations under this Manual. For the purposes of sending the Communiqué, an informative or instructive document will be used in terms substantially similar to those provided in the Annex II of this Manual. It will be the obligation of the people included in the List of Persons Obligated to Report to communicate to their related third parties those provisions of NCG 269 and Circular 670 that may be applicable to them. 5. Lock-up Periods and Related Procedures i. General Principle: In accordance with the provisions of article 165 of the LMV, any person who, due to their position, position, activity or relationship, has access to Company´s Confidential Information that is, referring to LATAM, its businesses or to one or several securities issued by it, not disclosed to the market and whose knowledge, by its nature, is capable of influencing the price of the securities issued, (i) must maintain strict confidentiality; (ii) may not use it for its own benefit or that of others, nor acquire or dispose of for himself or for third parties, directly or through other people, the securities about which he has privileged information; and (iii) shall ensure that the aforementioned actions do not occur through subordinates or trusted third parties. Likewise, any person in possession of privileged information about LATAM (y) shall not use such information in any transaction, whether by acquiring or transferring, on their own behalf or on behalf of another, directly or indirectly, the securities to which the information pertains, or by canceling or modifying an order related to such securities; and (z) shall refrain from disclosing such information to third parties or recommending the purchase or sale of the aforementioned securities." ii. Lock-up Periods: In order to prevent the use of privileged information and/or Confidential Information of the Company in transactions on Company Securities, it has been determined to establish the lock-up periods indicated below: a. General Lock-up Period: Interested Persons, as well as their spouses, cohabitants and relatives up to the second degree of consanguinity or affinity, may not carry out transactions in Company Securities within 30 days prior to the disclosure of the quarterly or annual financial statements of LATAM (the "General Lock-up Period"). In accordance with the provisions of article 16 of the LMV, the Company will previously publish the date on which it will disclose its financial statements, at least 30 days in advance of said disclosure. b. Special Lock-up Periods: - Additionally, persons (1) who have the status of Senior Financial Executive, as

 
4 this term is defined below, and (2) who participate in the process of preparation and preparation of the quarterly and annual financial statements, must refrain from carrying out transactions on Company Securities from the closing date of each calendar quarter and until the date on which the quarterly or annual financial statements (as applicable) are made known to the public and the CMF. - Interested Persons who are aware of essential information about the Company (as this term is defined in article 9, paragraph 2 of the LMV), must refrain from carrying out transactions in the Company's Securities from the moment they become aware of such information same until 24:00 hours of the stock market business day following the one in which LATAM communicates it as an 'essential fact' to the market. - Interested Persons who are aware of essential information that has been classified as confidential under the terms of article 10 of the LMV, must refrain from carrying out transactions in the Company's Securities from the moment they become aware of such information same until 24:00 hours of the stock market business day following the one in which (y) LATAM communicates it as an 'essential fact' to the market; or (z) the reasons that motivated the reservation have ceased. Hereinafter, the special lock-up periods contained in this literal b. will be referred to as the “Special Lock-up Periods”, and together with the General Lock-up Period, the “Lock-up Periods”. iii. Exceptions to Lock-up Periods: The following cases are exempt from the application of the Lock-up Periods: a. The exercise of pre-emptive subscription rights for LATAM shares exercised by the holder within these periods, whether said rights come from a single pre-emptive option period or from two or more successive periods; and b. The exercise of subscription options for the purchase or subscription of LATAM shares exercised by the holder within these periods, which emanate from workers' compensation plans implemented in accordance with the provisions of Law No. 18,046 on Public Limited Companies. iv. Related Procedures: In accordance with the provisions of CMF Circular No. 1,003, LATAM has the duty to send a payroll to the CMF (and keep said payroll updated) of the directors, administrators, liquidators, managers, assistant managers, and in general, of any person who, in the opinion of LATAM, due to their position or position, has access to relevant information about the Company and/or its businesses (the “List of Executives”). In order to reinforce compliance by said persons with the obligations provided for in Title XXI of the LMV regarding Inside Information, during the month of January of

 
5 each year, the Legal Vice President of the Company will send an information to the persons included in the List of Executives, in terms substantially similar to those provided in the Annex III of this Manual. 6. Mechanisms for continuous dissemination of information of interest LATAM uses as its main mechanism the continuous dissemination of all information of interest, as defined by literal C of number 2.2 of Section II of General Standard No. 30 of the CMF (“NCG 30"), your website (www.latam.com). 7. Safeguarding Mechanisms for Confidential Information i. Code Ethics for Senior Financial Executives: LATAM has a Code of Ethics for Senior Financial Executives, according to which and among other duties, such executives are obliged to maintain the confidentiality of confidential information acquired in the performance of their positions or functions. It is noted that this Code of Ethics is part of the employment contract of these executives. For the purposes of this Manual, “Senior Financial Executive”, the Executive Vice President, the General Manager, the Vice President of Corporate Finance, the Corporate Finance Manager, the Corporate Comptroller Manager, the Tax Manager, the Audit Manager, the Deputy Accounting Manager, the Investor Relations Manager, the Deputy Manager of Financial Planning, the Legal Vice President, the legal managers, and any other person who performs similar functions. ii. Code of Conduct: In accordance with the LATAM Code of Conduct, all employees must comply with the duties of confidentiality and safeguarding of confidential information. iii. Executive Confidentiality Agreement: All executives who are part of the List of Executives must sign a confidentiality agreement in terms substantially similar to the format provided in the Annex IV of this Manual. Pursuant to said confidentiality agreement, such executives will be subject to a permanent duty of confidentiality regarding the information to which they may have access due to or on the occasion of the business, operations and activity of LATAM and the companies that are part of it. business group. The above, unless the confidentiality obligations are already reflected in the respective employment contract. iv. Safeguards for Confidential Information: In accordance with the provisions of letter B of section 2.2 of section II of NCG 30, with respect to the information that is declared by the Board of Directors as confidential, we will proceed to (i) prepare a list of the people with access to said confidential information (the “Restricted Persons List"), and (ii) demand the signing of the confidentiality agreement referred to in section iii. that precedes the people included in said List of Restricted Persons and who have not already signed said agreement. The above, unless the confidentiality obligations are already reflected in the respective employment contract or service provision contract.

 
6 8. Spokespersons The official spokespersons for LATAM will be the following: i. Regarding regulators and supervisory authorities, the official spokesperson for LATAM will be the President of the Board of Directors, the Executive Vice President and/or the General Manager. ii. In front of investors, the official spokesperson will be the Vice President of Finance. iii. In relation to the media, the official spokesperson will be the Director of Corporate Relations. It is hereby noted that LATAM will abstain to comment, clarify or specify the information referring to the activities, businesses or operations of the Company that is published or disseminated by national or foreign media. The above, unless required by the CMF or determined by the LATAM Board of Directors. 9. Internal Dissemination Rules This Manual will be available on the LATAM website (www.latam.com) and on your employee intranet. The Legal Vice President will have the obligation to timely send the instructions and information provided in Sections 4 and 5 of this Manual. It will be the responsibility of the Legal Vice President to keep the lists of people affected by said instructions and information duly updated, including their respective emails for the purposes of dissemination and/or sending. The foregoing, without prejudice to other dissemination activities such as presentations at extended meetings and similar, and the delivery of a copy of this Manual that must be given to every new employee who joins LATAM. 10. Sanctions and Conflict Resolutions Violation of the rules and guidelines provided for in this Manual, as well as the policies and regulations that apply in each LATAM unit, may give rise to the imposition of disciplinary measures, including the immediate termination of the employment relationship and/or the complaint. of the violation before the corresponding authority. Likewise, the violation of these rules and guidelines as well as the rules provided for in the LMV and the Public Limited Companies Law, as well as the regulations of the Financial Market Commission or the Securities and Exchange Commission, depending on the case, may eventually be considered a violation of the law, which may imply the application of administrative, civil and/or criminal sanctions. Any doubt or difficulty that may arise due to the application, compliance or interpretation of this Manual or for any other reason related to it, must be reported to the Legal Vice President, who in turn will inform the Board of Directors of the Company in the immediately following session. to

 
7 the date on which said doubt or difficulty occurs, so that the Board of Directors can adopt the corresponding measures in order to put an end to said doubt or difficulty. 11. Validity This update to the Manual, which was approved at a meeting of the Company's Board of Directors on January, 15th, 2025, will come into effect on the first day of February, 2025. Santiago, January, 2025.-

 
8 ANNEX I TRANSACTION INFORMATION In order for LATAM to be able to comply with its obligation to inform CMF and the stock exchanges of the acquisitions and disposals of its shares carried out by its related parties, they must deliver to the company all the information detailed in this Annex which must be brought to the attention of the Legal Vice Presidency, in writing, sent to the email address claudia.pavez@latam.com, as soon as the respective transaction has been completed and on the same day it occurs. 1. Identification of the related person who performed the operation: a. Single tax role. b. Names and surnames, or company name. In the case of a company, the relationship that exists with LATAM must also be reported. 2. Transaction details: a. Transaction date: day, month and year in which the transaction was made. b. Transaction communication date: day, month and year in which the transaction was reported to LATAM. c. Type of transaction: type of transaction carried out, such as purchase and sale of securities, subscription of shares of a new issue, acquisition or sale of securities by payment, donation or any other act through which ownership of securities is acquired or transferred. . d. Type of value: it is necessary to indicate the type of the value traded (e.g., LATAM share). e. Series: indicate the series of the instrument object of the transaction, if applicable. f. Number of units traded: number of nominal units traded. g. Unit price: unit price or rate, weighted average, at which the transaction was made. h. Total transaction amount: total amount in pesos of the transaction. i. Final percentage obtained after the operation: the approximate percentage that represents the participation of the person who carried out the transaction in the capital of LATAM. j. Observations: free text field to indicate any relevant observation.

 
9 ANNEX II INSTRUCTIVE The LMV establishes the information obligation that certain people must observe due to their ownership relationship, their position or position with respect to an entity supervised by the CMF. In particular: i. Persons who, directly or through other natural or legal persons, own 10% or more of the capital of LATAM, or who, due to an acquisition of shares, have such percentage; and ii. The directors, liquidators, main executives, administrators and managers of LATAM, regardless of the number of shares they own, directly or through other natural or legal persons, They must inform the CMF and each of the stock exchanges in the country in which LATAM has securities registered for trading: i. at the latest the day after the operation has materialized, any acquisition or disposal of (i) securities of the Company (including without limitation, shares issued by LATAM or American Depositary Shares); and/or (ii) contracts or securities whose price or result depends or is conditioned, in whole or in significant part, to the variation or evolution of the price of the securities referred to in literal (i) above; and ii. at the latest on the fifth business day following the day on which the operation materialized, all purchases, sales and exercises of preferential subscription rights for shares issued by LATAM. In the case of natural persons, they must also report acquisitions or disposals of Company Securities carried out by their spouse if they are married in a conjugal partnership regime, by their minor children, or by the people over whom they exercise guardianship, curatorship or representation by legal or judicial provision, as well as those carried out by the legal entities in which they themselves, their spouse if married in a conjugal partnership regime, their minor children, or the people over whom they exercise guardianship, curatorship or representation by legal or judicial provision, possess the character of administrators, partners or controlling shareholders, who do not themselves have the obligation to report. Legal entities will have the same obligation with respect to operations carried out by entities in which they have the status of partners or controlling shareholders, which do not themselves have the obligation to report. Any person who, alone or with others with whom they have a joint action agreement, can designate at least one director or owns 10% or more of the subscribed capital of LATAM will also be considered within the concept of a shareholder obliged to inform.

 
10 Said information must be sent to the CMF through the technological means indicated in General Standard No. 269 of the CMF. Notwithstanding the foregoing, it is necessary to remember that both LATAM employees and any person who, due to their position, position, activity or relationship with LATAM or with persons with respect to whom it is presumed to have privileged information, to the extent who have privileged information of LATAM, (i) shall maintain strict confidentiality; (ii) shall not use such information for personal or third-party benefit, nor acquire or dispose of, for themselves or others, directly or through intermediaries, securities about which they possess insider information; and (iii) shall ensure that the aforementioned actions are not carried out by subordinates or trusted third parties. Furthermore, any person in possession of insider information about LATAM (y) shall not use such information in any transaction, whether by acquiring or transferring, on their own behalf or on behalf of another, directly or indirectly, the securities to which the information pertains, or by canceling or modifying an order related to such securities; and (z) shall refrain from disclosing such information to third parties or recommending the acquisition or disposal of the mentioned securities. Finally, in the event that any of the recipients of these instructions carry out any of the aforementioned transactions, they must contact the Legal Vice Presidency, through the lawyer Claudia Pavez (claudia.pavez@latam.com - +5622-5658059).

 
11 ANNEX III INFORMATIVE MEMORANDUM ON OBLIGATIONS REGARDING PRIVILEGED INFORMATION This information is addressed to the directors, administrators, liquidators, managers, assistant managers, and in general, to any person who, in the opinion of LATAM Airlines Group S.A. (“LATAM") due to their position or position has access to relevant information about the Company and/or its businesses. For these purposes, it is necessary to highlight that in accordance with the provisions of article 165 of the LMV, any person who, due to their position, position, activity or relationship with LATAM or with the people with respect to whom they are presumed to have information privileged, possesses privileged information, that is, referring to LATAM, its businesses or one or more values for it issued, not disclosed to the market and whose knowledge, by its nature, is capable of influencing the price of the securities issued, (i) shall maintain strict confidentiality; (ii) shall not use such information for personal or third-party benefit, nor acquire or dispose of, for themselves or others, directly or through intermediaries, securities about which they possess insider information; and (iii) shall ensure that the aforementioned actions are not carried out by subordinates or trusted third parties. Furthermore, any person in possession of insider information about LATAM (y) shall not use such information in any transaction, whether by acquiring or transferring, on their own behalf or on behalf of another, directly or indirectly, the securities to which the information pertains, or by canceling or modifying an order related to such securities; and (z) shall refrain from disclosing such information to third parties or recommending the acquisition or disposal of the mentioned securities. It is noted that the violation of this duty of abstention may result in the application of custodial sentences, without prejudice to the civil and administrative sanctions that may apply according to law. Finally, in case of questions or doubts regarding compliance with these legal duties, we ask you to contact any of the lawyers of the LATAM Airlines Group S.A. Prosecutor's Office. Santiago, January, 2025.- Legal Vice Presidency LATAM Airlines Group S.A.

 
12 ANNEX IV EXECUTIVE CONFIDENTIALITY AGREEMENT 1. In consideration of the employment relationship I have with LATAM Airlines Group S.A. (the "Society"), I hereby undertake to keep under strict confidentiality and not to disclose to any third party, nor use for my own benefit or the benefit of any third party, any confidential, secret or reserved information, which is related to or refers to the Company. , its businesses, its employees, products, services, processes, systems, business plans, strategies, costs or any other information that is confidential, secret or reserved. 2. Likewise, I hereby undertake to keep under strict confidentiality and not use for my own benefit or that of any third party, the confidential, secret or reserved information, relating to employees, clients, suppliers or any other person or entity with which the Company has any relationship that involves confidentiality. 3. I will only communicate the information indicated in the preceding numbers to the employees or advisors of the Company who, due to their functions, absolutely require knowing such information to adequately perform the services they provide to the Company, and in the exclusive interest of the latter. 4. The confidentiality obligations established in the preceding numbers will remain in force for as long as the respective information is confidential, secret or reserved, even after my employment relationship with the Company has ended. 5. The disclosure of information referred to in paragraphs 1 and 2 above that is carried out in compliance with an order from any competent public authority based on any applicable legal provision will not be considered a violation of these obligations. However, in such case I am obliged to immediately inform the Company of the request of the relevant authority, prior to the disclosure of any information, except to the extent that such notice is prohibited by law (and for as long as such prohibition lasts). Likewise, in the case of mandatory disclosure, I will only communicate that information that is essential to adequately comply with the order of the competent authority, expressly and clearly stating to the latter the confidential, reserved or secret nature of the information in question. 6. Additionally, I hereby undertake to deliver to the Company, immediately upon termination of my employment relationship with it, all physical, electronic, magnetic or other media that may contain confidential, secret or reserved information referred to in sections 1 and 2 that precede, including without limitation, papers, floppy disks, compact discs (CD), digital video discs (DVD), access codes to servers, pen-drives, hard drives, etc. Name: C.N.I.: Date: Business: Accepted on behalf of LATAM Airlines Group S.A.

 
13 Name: C.N.I.: Date: Business:

 
EX-11.B(2) 11 a11b2codeofconductforsen.htm EX-11.B(2) a11b2codeofconductforsen
Code of Conduct for Senior Executives LATAM group Version Date of creation Date of publication Type of document 2.0 August / 2018 December / 2023 Operational Policy

 
Title Code of Conduct for Senior Executives Version 2.0 Classification Internal December / 2023 Page 2 of 4 1. Purpose The purpose of this Policy is to define the ethical behavior and compliance with applicable regulations by senior executives, executives, managers and assistant managers of the LATAM group and define their roles and responsibilities. 2. Scope This Policy applies to all members of the LATAM group, including its Directors, employees and collaborators, and especially to the Senior Executives and Senior Financial Executives of the LATAM group, as referred to in Form 20-F of the Securities and Exchange Commission (SEC) of the United States. 3. Detail 3.1. Senior Executives and Senior Financial Executives must:  Proceed with honesty and integrity in order to avoid real or apparent conflicts of interest that may arise between personal and professional relationships;  Ensure the sending of complete, faithful, precise, understandable and timely information, for the purpose of preparing the reports and documents that the LATAM group submits to authorities, in addition to public communications that must be made;  Adopt and comply with reasonable measures to cause the LATAM group to observe and comply with all applicable rules, resolutions and regulations;  Report in time and through the relevant means any breach of this Code, including the use of the Confidential Channel: https://www.canalconfidencial.com.br/grupo_latam/;  Maintain the confidentiality of “Sensitive Information” obtained during the performance of their duties, except in the event that disclosure is required by law or is expressly authorized by the Legal Department under the law. It is essential to protect the confidentiality of sales projections, results, new commercial projections or any other type of relevant information that is “Sensitive Information”;  Not disclose, inform or reveal to third parties, during employment and after the termination of the contractual relationship, Confidential Information or background information relating to products, businesses, methods, services or labor systems of the LATAM group with respect to its customers and suppliers;  Ensure the integrity of records;  Protect assets and resources of the LATAM group;  Promote professional integrity in all aspects, and eradicate from the LATAM group's financial organization any barrier related to responsible conduct such as coercion, fear of retaliation or marginalization of individuals;

 
Title Code of Conduct for Senior Executives Version 2.0 Classification Internal December / 2023 Page 3 of 4  Provide access to information requested by internal and external auditors for the purposes of carrying out a correct audit;  Intervene immediately to remedy any control deficiencies that could materially affect the integrity of financial statements and reports;  Ensure that the skills and capabilities of their teams are in line with the responsibility of the assigned jobs;  Encourage ethical and honest behavior within the work environment;  Notify the purchase and sale of securities of the LATAM group in accordance with the provisions of the Manual for Management of Information of Interest in the Market and the current laws of the stock market; and  Request written authorization from the Legal and Compliance Departments regarding exceptions to this Policy. 3.2. Image and Reputation The LATAM group and its subsidiaries operate in various countries, which implies developing its businesses and activities under different regulatory frameworks. Senior Executives, Senior Financial Executives and Executives of the LATAM group in the different countries are responsible for ensuring compliance with applicable legal and regulatory requirements, escalating relevant related matters and forging a positive working relationship with the various regulators. They, when developing their operations and activities, represent the interests of the LATAM group as a whole and not those of a particular unit or management. In accordance with the above, the operations and businesses of the LATAM group are subject to a series of risks, such as security and regulatory risks. However, there is a risk that is always present for a group like LATAM in the different markets in which it operates: Reputational or Franchise Risk. The LATAM group has developed a new organizational structure focused on achieving good corporate governance, and among whose objectives is to create the conditions and mechanisms to manage this risk in its different areas and in the different countries in which we operate. 3.3. Managerial Responsibility Consequently, our Executives, Senior Financial Executives and Executives of the LATAM group must keep in mind the following guidelines in the performance of their duties:  Compliance with the law and the regulations that govern the activities of the LATAM group as their primary responsibility.  As appropriate, they are responsible for maintaining appropriate and positive relationships with regulators.  They must immediately escalate any issue, fact or circumstance that may affect the image or reputation of the LATAM group.  It is essential that the commercial activities and businesses of the LATAM group comply with the laws and regulations that govern them and that their terms are

 
Title Code of Conduct for Senior Executives Version 2.0 Classification Internal December / 2023 Page 4 of 4 appropriate in accordance with industry practices and the ethical principles that govern the group's activities.  The LATAM group is committed to transparency and regulatory compliance, which must be kept in mind especially with regard to the protection of passenger rights and free competition.  They must escalate any issue related to the image or reputation of the LATAM group to the corresponding general managers (domestic, international, regional, operations, etc.), who in turn are responsible for escalating these matters to the corresponding Vice Presidents of the LATAM group. 3.4. Evaluation and Performance The evaluation of executives and employees must consider the history of regulatory compliance and internal control. 4. Annexes ● Glossary LATAM 5. Approval This Policy was prepared by the Compliance Department, and is valid for an indefinite period from its publication, and may be amended at any time. Notwithstanding the above, this policy shall be reviewed every 2 years.

 
EX-12.1 12 a121latam-certificationn12.htm EX-12.1 Document

LATAM AIRLINES GROUP S.A. SECTION 302 CERTIFICATION
I, Roberto Alvo Milosawlewitsch, certify that:
1.     I have reviewed this annual report on Form 20-F of LATAM Airlines Group S.A.;
2.     Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.     Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;
4.     The company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)), for the company and have:
a)    Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)    Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board;
c)    Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)    Disclosed in this report any change in the company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting; and
5.    The company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company’s auditors and the audit committee of the company’s board of directors (or persons performing the equivalent functions):
a)    All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company’s ability to record, process, summarize and report financial information; and
b)    Any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal control over financial reporting.
Date: Mach 13, 2025





/s/ Roberto Alvo Milosawlewitsch
Roberto Alvo Milosawlewitsch
Chief Executive Officer
Acting Chief Financial Officer


EX-13.1 13 a131latam-certificationsec.htm EX-13.1 Document

LATAM AIRLINES GROUP S.A. SECTION 906 CERTIFICATION

Pursuant to section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code), the undersigned officer of LATAM Airlines Group S.A. (“the Company”), hereby certifies, to such officer’s knowledge, that:

The Annual Report on Form 20-F for the year ended December 31, 2024 (the “Report”) of the Company to which this statement is provided as an exhibit fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 and all information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: March 13, 2025

/s/ Roberto Alvo Milosawlewitsch
Roberto Alvo Milosawlewitsch
Chief Executive Officer
Acting Chief Financial Officer
EX-15 14 a15consentofindependentreg.htm EX-15 Document
image_0a.jpg
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


We hereby consent to the incorporation by reference in the Registration Statement on Form F-3 (No. 333-280866) of LATAM Airlines Group S.A. of our report dated March 13, 2025 relating to the financial statements and the effectiveness of internal control over financial reporting, which appears in this Form 20-F.







/s/ PricewaterhouseCoopers
PricewaterhouseCoopers Consultores Auditores y Compañía Limitada

Santiago, Chile

March 13, 2025