UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM 6-K/A
REPORT
OF FOREIGN PRIVATE ISSUER
PURSUANT
TO RULE 13a-16 OR 15d-16
UNDER
THE SECURITIES EXCHANGE ACT OF 1934
October
5, 2016
Commission
File Number 1-14728
LATAM
Airlines Group S.A.
(Translation
of Registrant’s Name Into English)
Presidente
Riesco 5711, 20th floor
Las
Condes
Santiago,
Chile
(Address
of principal executive offices)
Indicate by check mark whether the
registrant files or will file annual reports under cover of Form 20-F or Form 40-F:
Form 20-F
x
Form 40-F
¨
Indicate by check mark if the registrant
is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):
¨
Indicate by check mark if the registrant
is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):
¨
Explanatory
Note
On August 11, 2016, LATAM Airlines
Group S.A. (the "Company"), furnished a Report on Form 6-K (the "Original Form 6-K") furnishing a press release
(the "Release") announcing the Company's consolidated financial results for the second quarter ended June 30, 2016.
The Company is furnishing this
Amendment (this "Amendment") to the Original 6-K, solely to furnish a revised version of the Release. The revised
Release contains the following modifications, to correct: (i) the amount of percentage points decrease in operating margin
as compared to the second quarter 2015; (ii) the amount of gain recognized by the Company under
Other income
(expense)
; (iii) the amount of deposits with aircraft manufacturers (pre-delivery payments); and (iv) the
Effective Tax Rate presented in the Consolidated Financial Results.
This Amendment does not otherwise
amend, modify or update any disclosures contained in the Original 6-K with respect to any events occurring after the furnishing
of the Original 6-K.
LATAM AIRLINES GROUP REPORTS
CONSOLIDATED OPERATING INCOME OF US$1.3 MILLION FOR SECOND QUARTER 2016
Santiago,
Chile, August 11, 2016 – LATAM Airlines Group S.A. (NYSE: LFL; IPSA: LAN), the leading airline group in Latin America, announced
today its consolidated financial results for the second quarter ended June 30, 2016. “LATAM” or “the Company”
makes reference to the consolidated entity, which includes passenger and cargo airlines in Latin America. All figures were prepared
in accordance with International Financial Reporting Standards (IFRS) and are expressed in U.S. dollars. The Brazilian real /
US dollar average exchange rate for the quarter was BRL 3.50 per USD.
Highlights
|
·
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LATAM
Airlines Group reported operating income of US$1.3 million for second quarter 2016 and
US$220.4 for the first half of 2016. Operating margin reached 0.1% for the quarter, representing
a slight decrease of 0.7 percentage points as compared to the second quarter 2015. Operating
margin for the first half of 2016 reached 5.0%, in line with our guidance and 0.3 percentage
points above the same period of 2015.
|
|
·
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Total
revenues during the second quarter 2016 declined by 12.5% due to a 13.7% decline in passenger
revenues and a 22.3% decline in cargo revenues. This revenue decrease continues to reflect
a weak macroeconomic environment in South America – especially in Brazil –
and the devaluations of Latin American currencies during the period. Part of this decline
was offset by the continued positive trend in costs, with total operating expenses declining
by 12.0%, resulting in a 10.5% decline in costs per ASK equivalent.
|
|
·
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As
of August 2016, LATAM Airlines Group has reduced fleet assets for 2017 - 2018 by US$1.1
billion, in line with the Company’s previously announced plans to achieve a decrease
of US$2.0 to US$3.0 billion in our expected fleet assets for 2018. This reduction was
achieved through the deferral of twelve Airbus A320neos and two Airbus A350s, which represent
a total reduction of US$829 million in fleet commitments for 2017 and 2018. The Company
will also redeliver five more Airbus A320s, three Airbus A319s, and one Boeing 777-200F
in 2017 as compared to our previous quarter´s fleet plan, representing a total
reduction of approximately US$260 million in fleet assets.
|
|
·
|
LATAM
Airlines Brazil continues to adjust capacity in Brazil in line with demand conditions
on both domestic and international operations in that market. LATAM Airlines Brazil reduced
domestic capacity by 13.7%, while revenues per ASK increased by 6.2% in second quarter
2016 as compared to the same quarter of 2015, when measured in Brazilian reais. Furthermore,
as previously announced, LATAM Airlines Brazil continues to reduce capacity on international
routes between Brazil and the US, reaching a reduction of approximately 35% during the
second half of 2016 compared to the same period 2015.
|
|
·
|
Meanwhile,
the Company continues to strengthen its network, taking advantage of specific opportunities
for profitable growth in LATAM’s South American Spanish-speaking markets (SSC,
which include Chile, Peru, Argentina, Colombia and Ecuador). In July, LATAM Airlines
Chile began flying directly between Santiago and La Paz and will fly direct between Santiago
and Los Angeles, USA in the fourth quarter. Additionally, LATAM Airlines Peru will connect
its Lima hub with Barcelona by the end of the year, and with Cartagena, Colombia in January
2017.
|
|
·
|
On
July 12th, the Company announced that it had entered into a subscription
agreement under which Qatar Airways will acquire up to 10% of LATAM's total shares,
which will be acquired through the issuance of new shares at a price of US$10 per share
in connection with a capital increase in the amount of US$613 million. On July 18th,
LATAM announced that its Board of Directors agreed to call an Extraordinary General Shareholders
Meeting for August 18, 2016, in order to submit for shareholder approval the increase
for the purpose of strengthening the financial position of the Company. The transaction
is expected to be concluded during the fourth quarter 2016.
|
management
commentS on SECOND QUARTER 2016
Over the last
year, we have implemented significant changes with the objective of transforming LATAM into a simpler, leaner and more efficient
group. We have made these changes amidst a challenging and volatile macroeconomic scenario in the region, and we acknowledge that
results have not fully met our expectations. For that reason, and in order to prepare ourselves for future market challenges and
opportunities, we recognize the need to become more innovative and to continue working at an accelerated pace to address the changing
dynamics of customers and the industry, as well as the economic situation in South America.
With this is
mind, and as previously announced, LATAM and its affiliate carriers have further advanced in the redesign of their domestic passenger
business model, in order to increase competitiveness and ensure the sustainability of domestic operations in the long term. This
project seeks to achieve significant reductions in costs per ASK, allowing us to provide more competitive fares. Increased operational
efficiencies will allow us to continue stimulating new demand and driving the growth of air travel in South America. Other key
elements under evaluation include pursuing initiatives to increase ancillary revenues. LATAM recognizes the vast opportunities
in adopting global best practices that will generate additional revenue, while granting customers greater flexibility and customization
throughout their journey. We have made important progress in this project thus far, and are confident of a positive outcome once
the new business model is implemented. The project is still in the design phase and we expect to provide more details within the
coming months.
Furthermore,
we have broadened the scope of our transformation initiatives to include regional and long haul operations, applying the lessons
learned from the redesign of the domestic model. This will allow us to leverage opportunities to simplify processes, increase
efficiencies, and improve the value proposition for our customers. We expect all these changes to positively impact profitability
and cash flow generation going forward.
While management
continues to focus on initiatives aimed at strengthening the balance sheet, tapping previously unexplored revenue streams and
lowering costs, we were proud to supplement these internal efforts with a proposed capital increase and an agreement with Qatar
Airways to acquire up to a 10% stake in LATAM. This is a move that not only strengthens our liquidity position, but offers the
opportunity to explore stronger ties with this global player. This transaction will benefit consumers in the short and medium
term as the Company will be able to evaluate financing options with greater flexibility and continue to invest in technology and
products. In the longer term, Qatar’s equity participation in the Company, also offers the opportunity to explore improved
connectivity between South America and the Middle East and Asia for our customers.
The group is
confident that these initiatives will allow us to preserve LATAM’s position among the leading airline groups in the world,
ensuring sustainability in the long term and strengthening our financial position, as well as continuing to be the preferred airline
group by its customers and employees.
management
discussion and analysis of SECOND Quarter 2016 Results
Total revenues
in the second quarter 2016 totaled US$2,110.6 million compared to US$2,412.9 million in second quarter 2015. The decrease of 12.5%
is driven by a 13.7% and 22.3% decrease in passenger and cargo revenues, respectively, but slightly compensated by a 42.1% increase
in other revenues. Passenger and cargo revenues accounted for 80.9% and 12.3% of total operating revenues, respectively, during
the most recent quarter.
Passenger
revenues
decreased 13.7% during the quarter, which reflects a 14.3% decline in consolidated passenger unit revenue (RASK),
offset by a 0.8% increase in capacity, when compared to the second quarter 2015. The RASK decrease was driven by a 15.2% drop
in yields, while load factors showed an improvement of 0.8 p.p. to 82.7%. Yield performance continues to be negatively impacted
by the weak macroeconomic scenario in South America, as well as weak local currencies.
Revenues per
ASK for LATAM’s main passenger business units are shown in the table below:
|
|
For the three month period ended June 30
|
|
|
|
RASK
|
|
|
ASK
|
|
|
Load Factor
|
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|
(US cents)
|
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|
(millions)
|
|
|
|
|
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|
2Q16
|
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|
% Change (YoY)
|
|
|
2Q16
|
|
|
% Change (YoY)
|
|
|
2Q16
|
|
|
% Change (YoY)
|
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|
|
|
|
|
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|
|
|
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|
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Bussines Unit
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|
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|
|
|
|
|
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|
|
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Domestic SSC
|
|
|
6.5
|
|
|
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-21.4
|
%
|
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|
5,301
|
|
|
|
7.2
|
%
|
|
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78.8
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%
|
|
|
0.9
pp
|
|
Domestic Brazil
|
|
|
5.4
|
|
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-9,7
|
%*
|
|
|
8,829
|
|
|
|
-13.7
|
%
|
|
|
81.2
|
%
|
|
|
1.7
pp
|
|
International
|
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5.4
|
|
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|
-17.0
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%
|
|
|
17,679
|
|
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7.9
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%
|
|
|
84.6
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%
|
|
|
0.1
pp
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|
Total
|
|
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5.4
|
|
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|
-14.3
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%
|
|
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31,809
|
|
|
|
0.8
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%
|
|
|
82.7
|
%
|
|
|
0,8
pp
|
|
*RASK in domestic Brazil increased
6.2% when measured in BRL
Note: revenues include ticket revenue,
breakage, excess baggage fee, frequent flyer program revenues and other revenues
During the
second quarter 2016, demand in the airline group’s Spanish speaking country affiliates (SSC, which include Chile, Peru,
Argentina, Colombia and Ecuador) continued to grow at a steady pace, with an increase of 8.4% in passenger traffic as measured
in RPKs. Passenger capacity as measured in ASKs grew by 7.2% during the quarter, driven by growth in Peru and Chile, with load
factors showing an increase of 0.9 p.p., reaching 78.8%. During the quarter, RASK continued to be pressured mainly due to the
fact that local currencies remain below 2015 levels and additional capacity has been added to SSC markets, which remain very healthy.
As a result, revenues per ASK in US dollars declined 21.4%, as compared to the second quarter 2015.
In the domestic
Brazil passenger operations, LATAM Airlines Brazil reduced capacity by 13.7% in the second quarter 2016 as compared to the same
quarter of 2015. Traffic as measured in RPKs decreased by 11.9%, and, as a result, load factors increased 1.7 p.p. to 81.2%. Revenues
per ASK increased 6.2% during the second quarter 2016 when measured in BRL. When measured in US dollars, however, LATAM Airlines
Brazil’s unit revenue decreased by 9.7%, driven by the 14.0% depreciation of the Brazilian real compared to second quarter
2015.
During the
quarter, LATAM’s capacity on international routes increased by 7.9%. LATAM Airlines Brazil has continued to reduce capacity
on routes with weaker demand, specifically between Brazil and the US, while LATAM Airlines and its affiliates added capacity on
healthy routes, primarily between Spanish Speaking Countries and the US and Europe. Traffic increased by 8.0%, with passenger
load factors growing by 0.1 p.p. to a healthy 84.6%. Revenues per ASK in international passenger operations decreased 17.0% as
compared to the second quarter of 2015. This decline is mainly driven by weak demand from Brazil as well as increased competition
and capacity from regional and international carriers.
Cargo
revenues
decreased by 22.3% in the quarter, driven by a 13.2% decline in cargo traffic and a 10.4% decline in cargo yields
as compared to the second quarter of 2015. During the quarter, cargo traffic was affected by a strike in Chile, which negatively
impacted fresh salmon exports. Additionally, imports from North America and Europe continue to show weakness, with Brazil still
the most affected market, both internationally and domestically. Pressures on cargo yields continued during the quarter, mainly
as a result the depreciation of local currencies and lower fuel surcharge. As a result, cargo revenues per ATK declined 17.2%
as compared to the same quarter of the previous year.
LATAM and its
affiliates continue working to adjust freighter capacity, while focused on maximizing the belly utilization of the passenger fleet.
Along these lines, we are redelivering two of our four Boeing 777s-200F currently operated by LATAM by first quarter 2017. In
the second quarter cargo capacity, as measured in ATKs, declined 6.1%, which includes a 13.4% reduction of freighter operations.
Cargo load factors were weak as capacity management could not keep up with the decline in traffic, falling 4.0 percentage points.
Other
revenues
increased by 42.1%, amounting to US$143.9 million during the second quarter 2016. This growth is primarily due
to an increase in revenues derived from Multiplus, gains on aircraft sale and leaseback transactions, and the sale of fixed assets.
Additionally, during the second quarter 2015, other revenues were affected by a recognized loss related to the sale of the three
A340s, of which there were no such losses this quarter.
Total
operating
expenses
in the second quarter declined to US$2,109.3 million, a 12.0% reduction as compared to the second quarter of
2015. Cost per ASK equivalent (including net financial expenses) decreased by 10.5%, including the effect of the 30.6% decrease
in fuel price paid per gallon (including hedge). Furthermore, cost per ASK equivalent excluding fuel dropped 3.4% compared to
the same period in 2015. Changes in operating expenses were mainly due to the following:
|
·
|
Wages
and benefits
decreased by 15.5%. The decrease is driven by a decline in average headcount,
which is in line with capacity reductions in Brazil and the ongoing efficiency initiatives
throughout the Company. This decline also reflects the positive impact of the depreciation
of local currencies during the period.
|
|
·
|
Fuel
costs
decreased by 30.7% mainly as a result of a 26.9% decrease in the average fuel
price per gallon (excluding hedge) as compared to the second quarter of 2015. Furthermore,
fuel hedge losses totaled US$2.5 million, relative to a US$40.2 million loss in the second
quarter 2015. At the same time, the Company recognized an US$18.0 million loss related
to foreign currency hedging contracts, mainly Brazilian reais, compared to a US$4.4 million
gain recognized in the same period of last year.
|
|
·
|
Commissions
to agents
decreased by 15.3% in line with the decline in sales and an increase in
the percentage of direct sales.
|
|
·
|
Depreciation
and amortization
decreased by 1.9% mainly explained by a decrease in maintenance
depreciation and the positive impact of the depreciation of the Brazilian real throughout
the quarter, despite the increase in the number of owned aircraft.
|
|
·
|
Other
rental and landing fees
decreased by 4.4% mainly due to a decline in the rental of
cargo capacity from third parties in line with the slowdown of demand, and cost savings
in our handling expenses, despite an increase in aeronautical rates.
|
|
·
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Passenger
service
expenses decreased by 5.9% due to a 1.9% decrease in passengers transported
and lower variable costs.
|
|
·
|
Aircraft
rentals
increased by 7.6% as a result of the incorporation of more modern aircraft
under operating leases. The Company had more Airbus A321s and Boeing 787s this year while
phasing out Airbus A330s partially and Bombardier Dash8/200s completely relative to the
second quarter 2015, bringing the total number of leased aircraft to 109, versus 106
during second quarter 2015.
|
|
·
|
Maintenance
expenses
continued to decrease significantly this quarter by 24.9% due to efficiencies
related to the renewal of our fleet and savings from external service providers. Additionally,
in second quarter 2015, the Company recognized a one-time loss of US$5.6 million resulting
from aircraft redelivery costs. Excluding last year’s one-time cost, maintenance
expenses decreased 21.0%.
|
|
·
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Other
operating expenses
increased by 17.4%, mainly due to a one-time benefit recognized
in the second quarter of 2015 as a result of negotiations for the change in our passenger
service system. In addition, during the second quarter of 2016 we recognized lower reversals
of tax contingencies in Brazil, which are recurring during the year.
|
Non-operating
results
|
·
|
Interest
income
increased by 53.5% to US$20.6 million in second quarter 2016 from US$13.4
million in the same period 2015 mainly due to the currency mix, which increased the average
cash invested in Brazilian reais during the quarter, with higher interest rates.
|
|
·
|
Interest
expense
fell by 6.0% to US$103.6 million in second quarter 2016 from US$110.3 million,
as the Company recognized one-time costs related to the early tender offer for the TAM
Capital 2 bond in the second quarter 2015.
|
|
·
|
Under
Other income (expense),
the Company recognized a US$59.0 million net gain, including
a foreign exchange gain of US$75.5 million driven by the appreciation of 10.6% in the
Brazilian real during the quarter, as compared to March 31, 2016. This compares to the
US$20.2 million gain in other income (expense) in the second quarter 2015, which included
a foreign exchange gain of US$35.4 million. Other non-operating expenses was also negatively
impacted by a one-time cost associated with the recognition of fines agreed to with the
DOJ and SEC as outlined in the Material Fact issued on July 25. The fines were fully
recognized in the second quarter 2016, reaching a total amount of US$22 million.
|
LIQUIDITY
AND FINANCING
At the end
of the second quarter 2016, LATAM reported US$1,234 million in cash and cash equivalents, including certain highly liquid investments
accounted for as other current financial assets, equivalent to 13.2% of net revenue of the last twelve months. Additionally, the
Company reported deposits with aircraft manufacturers (pre-delivery payments) of US$557 million, US$418 million of which was funded
directly by LATAM.
As previously
announced, the Company has entered into a subscription agreement under which Qatar Airways will acquire up to 10% of
LATAM's total shares in connection with a capital increase for the amount of US$613 million at a price of US$10 per share. The
proceeds, expected to be received during the fourth quarter, will be used to strengthen the financial position of the Company,
reducing debt while expecting to end the year with a cash position of approximately US$1.5 billion, which we consider to be an
adequate level for the Company under current market conditions.
LATAM’s
financial debt during the second quarter 2016 totaled US$8,956 million, a decrease of approximately 3.3% as compared to the first
quarter 2016. For the second half of 2016, the Company has debt maturities of approximately US$573 million.
For 2016, fleet
commitments amount to US$1,952 million, of which 41% are capital expenditure requirements in the form of financial leases and
59% are operating leases. Year to date, we have completely financed our fleet obligations for 2016. In addition, LATAM has a non-fleet
CAPEX of approximately US$450 million per year, including maintenance, expenditures on spare engines, components, information
technology, among others.
One of the
objectives of LATAM Airlines Group is to reduce the volatility of our financial results and cash flow caused by external factors
such as foreign exchange rates and fuel price fluctuations. Accordingly, the Company has hedged approximately 35% of its estimated
total net Brazilian reais monthly operating exposure for the next twelve months through foreign exchange derivative contracts.
In addition, LATAM has hedged other foreign exchange exposures including Euro, Chilean Peso, Colombian Peso, British Pound and
Australian Dollar.
In relation
to fuel exposure, LATAM Airlines Group hedged approximately 30% of its estimated fuel consumption for the next twelve months.
The Group’s fuel hedging strategy, based on a combination of Jet Fuel options, has allowed us to limit our potential fuel
hedge losses to a maximum amount of US$35.6 million for the balance of 2016.
LATAM FLEET
PLAN
In order to
better align the Company’s fleet plan with market conditions, management has made headway on its plan for further reductions.
The confirmed reductions currently amount to US$1.1 billion, in line with the Company’s previously announced plans to achieve
a decrease of US$ 2.0 – 3.0 billion in our expected fleet assets by 2018.
These reductions
will alleviate pressures on the balance sheet and create flexibility to better respond to market conditions over the coming years.
The benefits of these reductions will be seen over the next two years in the form of lower leasing expenses and capital expenditures,
along with a decreased need for financing.
In parallel,
LATAM Airlines remains committed to offering passengers the best fleet in Latin America. As such, the Company will welcome the
Airbus A320neo to its fleet, has received its third Airbus A350 and now operates twenty-two Boeing 787s. At the same time, the
plan to fully phase out the Airbus A330s is on track to be completed by year end, and the Airbus A320 family fleet will steadily
be reduced as utilization increases.
Our fleet commitments
for 2017 have been substantially reduced to US$728 million and we have already secured financing for all four wide-body aircraft
arriving next year.
At year end
|
|
2015
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|
|
2016
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|
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2017
|
|
|
2018
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|
|
|
|
|
|
|
|
|
|
Passenger Aircraft
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Narrow Body
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Airbus A319-100
|
|
|
50
|
|
|
|
48
|
|
|
|
45
|
|
|
|
45
|
|
Airbus A320-200
|
|
|
154
|
|
|
|
146
|
|
|
|
131
|
|
|
|
125
|
|
Airbus A320 Neo
|
|
|
0
|
|
|
|
2
|
|
|
|
7
|
|
|
|
12
|
|
Airbus A321-200
|
|
|
36
|
|
|
|
47
|
|
|
|
47
|
|
|
|
47
|
|
Airbus
A321 Neo
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
6
|
|
TOTAL
|
|
|
240
|
|
|
|
243
|
|
|
|
230
|
|
|
|
235
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wide Body
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Airbus A330-200
|
|
|
10
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
Boeing 767-300
|
|
|
38
|
|
|
|
37
|
|
|
|
36
|
|
|
|
34
|
|
Airbus A350-900
|
|
|
1
|
|
|
|
7
|
|
|
|
9
|
|
|
|
11
|
|
Boeing 777-300 ER
|
|
|
10
|
|
|
|
10
|
|
|
|
10
|
|
|
|
7
|
|
Boeing 787-8
|
|
|
10
|
|
|
|
10
|
|
|
|
10
|
|
|
|
10
|
|
Boeing 787-9
|
|
|
7
|
|
|
|
12
|
|
|
|
14
|
|
|
|
18
|
|
TOTAL
|
|
|
76
|
|
|
|
76
|
|
|
|
79
|
|
|
|
80
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cargo Aircraft
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Boeing 777-200F
|
|
|
3
|
|
|
|
3
|
|
|
|
2
|
|
|
|
2
|
|
Boeing 767-300F
|
|
|
8
|
|
|
|
7
|
|
|
|
6
|
|
|
|
6
|
|
TOTAL
|
|
|
11
|
|
|
|
10
|
|
|
|
8
|
|
|
|
8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL FLEET
|
|
|
327
|
|
|
|
329
|
|
|
|
317
|
|
|
|
323
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fleet Commitment (US$ millions)
|
|
|
1,689
|
|
|
|
1,952
|
|
|
|
728
|
|
|
|
1,337
|
|
Note: This table does not include
three 767-300Fs and one 777-200F that LATAM is currently subleasing to a third party.
GUIDANCE
Capacity growth
guidance for 2016 remains unchanged (see table below). In addition, the Company maintains its guidance for an operating margin
of between 4.5% and 6.5% for full year 2016.
|
|
|
|
|
2016
|
|
|
|
|
|
|
Guidance
|
|
ASK
Growth (Passenger)
|
|
Total
Network
|
|
|
(1)%
- 1%
|
|
|
|
International
|
|
|
3%
- 5%
|
|
|
|
Brazil
Domestic
|
|
|
(12)%
- (10)%
|
|
|
|
SSC Domestic
|
|
|
6%
- 8%
|
|
|
|
|
|
|
|
|
ATK
Growth (Cargo)
|
|
|
|
|
(4)%
- (2)%
|
|
|
|
|
|
|
|
|
Operating
Margin
|
|
|
|
|
4.5%
- 6.5%
|
|
LATAM filed
its quarterly financial statements for the three month period ended June 30, 2016 with the
Superintendencia de Valores y Seguros
of Chile on August 11, 2016. These financial statements will be available in Spanish, Portuguese and English languages at
www.latamairlinesgroup.net.
*****
About LATAM Airlines
Group S.A.
LATAM Airlines Group S.A. is the
new name given to LAN Airlines S.A. as a result of its association with TAM S.A. LATAM Airlines Group S.A. now includes LATAM
Airlines Group (before LAN Airlines) and its affiliates in Peru, Argentina, Colombia and Ecuador, and LATAM Cargo and its affiliates,
as well as TAM S.A. and its subsidiaries TAM Linhas Aereas S.A. (LATAM Airlines Brasil), including its business units TAM Transportes
Aereos del Mercosur S.A., (LATAM Airlines Paraguay) and Multiplus S.A. This association creates one of the largest airline groups
in the world in terms of network connections, providing passenger transport services to about 138 destinations in 25 countries
and cargo services to about 140 destinations in 29 countries, with a fleet of 323 aircraft. In total, LATAM Airlines Group S.A.
has approximately 50.000 employees and its shares are traded in Santiago, as well as on the New York Stock Exchange, in the form
of ADRs.
LATAM is the new brand
that has been adopted by the airline members of LATAM Airlines Group. The group has started to implement the LATAM brand to its
customer contact points and aircraft, and will continue implementing LATAM in its products and services as part of a gradual roll-out
that will last approximately three years
Each airline will continue
to operate under their current brands and identities. For any inquiry of LAN or TAM, please visit www.latam.com. Further information
at www.latamairlinesgroup.net
*****
Note on Forward-Looking
Statements
This
report contains forward-looking statements. Such statements may include words such as “may” “will,” “expect,”
“intend,” “anticipate,” “estimate,” “project,” “believe” or other
similar expressions. Forward-looking statements are statements that are not historical facts, including statements about our beliefs
and expectations. These statements are based on LATAM’s current plans,, estimates and projections and, therefore, you should
not place undue reliance on them. Forward-looking statements involve inherent known and unknown risks, uncertainties and other
factors, many of which are outside of LATAM’s control and difficult to predict. 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 and
uncertainties include in particular those described in the documents we have filed with the U.S. Securities and Exchange Commission.
Forward-looking statements speak only as of the date they are made, and we undertake no obligation to update publicly any of them,
whether in light of new information, future events or otherwise.
LATAM Airlines
Group S.A.
Consolidated Financial Results
for the second quarter 2016
(in thousands of US Dollars)
|
|
For the three month period
ended June 30
|
|
|
|
2016
|
|
|
2015
|
|
|
%
Change
|
|
|
|
|
|
|
|
|
|
|
|
REVENUE
|
|
|
|
|
|
|
|
|
|
|
|
|
Passenger
|
|
|
1,706,714
|
|
|
|
1,977,161
|
|
|
|
-13.7
|
%
|
Cargo
|
|
|
260,010
|
|
|
|
334,445
|
|
|
|
-22.3
|
%
|
Other
|
|
|
143,909
|
|
|
|
101,248
|
|
|
|
42.1
|
%
|
TOTAL OPERATING REVENUE
|
|
|
2,110,633
|
|
|
|
2,412,854
|
|
|
|
-12.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EXPENSES
|
|
|
|
|
|
|
|
|
|
|
|
|
Wages and Benefits
|
|
|
-446,407
|
|
|
|
-528,160
|
|
|
|
-15.5
|
%
|
Aircraft Fuel
|
|
|
-468,004
|
|
|
|
-674,972
|
|
|
|
-30.7
|
%
|
Comissions to Agents
|
|
|
-60,557
|
|
|
|
-71,520
|
|
|
|
-15.3
|
%
|
Depreciation and Amortization
|
|
|
-230,706
|
|
|
|
-235,086
|
|
|
|
-1.9
|
%
|
Other Rental and Landing Fees
|
|
|
-260,601
|
|
|
|
-272,478
|
|
|
|
-4.4
|
%
|
Passenger Services
|
|
|
-62,824
|
|
|
|
-66,757
|
|
|
|
-5.9
|
%
|
Aircraft Rentals
|
|
|
-138,554
|
|
|
|
-128,793
|
|
|
|
7.6
|
%
|
Aircraft Maintenance
|
|
|
-86,949
|
|
|
|
-115,725
|
|
|
|
-24.9
|
%
|
Other Operating Expenses
|
|
|
-354,725
|
|
|
|
-302,146
|
|
|
|
17.4
|
%
|
TOTAL OPERATING EXPENSES
|
|
|
-2,109,327
|
|
|
|
-2,395,637
|
|
|
|
-12.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING INCOME
|
|
|
1,306
|
|
|
|
17,217
|
|
|
|
-92.4
|
%
|
Operating Margin
|
|
|
0.1
|
%
|
|
|
0.7
|
%
|
|
|
-0.7
pp
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest Income
|
|
|
20,554
|
|
|
|
13,394
|
|
|
|
53.5
|
%
|
Interest Expense
|
|
|
-103,583
|
|
|
|
-110,250
|
|
|
|
-6.0
|
%
|
Other Income (Expense)
|
|
|
59,031
|
|
|
|
20,219
|
|
|
|
192.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INCOME BEFORE TAXES AND MINORITY INTEREST
|
|
|
-22,692
|
|
|
|
-59,420
|
|
|
|
-61.8
|
%
|
Income Taxes
|
|
|
-62,572
|
|
|
|
13,400
|
|
|
|
-567.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INCOME BEFORE MINORITY INTEREST
|
|
|
-85,264
|
|
|
|
-46,020
|
|
|
|
85.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Attributable to:
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders
|
|
|
-92,075
|
|
|
|
-49,727
|
|
|
|
85.2
|
%
|
Minority Interest
|
|
|
6,811
|
|
|
|
3,707
|
|
|
|
83.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET INCOME
|
|
|
-92,075
|
|
|
|
-49,727
|
|
|
|
85.2
|
%
|
Net Margin
|
|
|
-4.4
|
%
|
|
|
-2.1
|
%
|
|
|
-2.3
pp
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effective Tax Rate
|
|
|
-275.7
|
%
|
|
|
22.6
|
%
|
|
|
-298.3
pp
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA
|
|
|
232,012
|
|
|
|
252,303
|
|
|
|
-8.0
|
%
|
EBITDA
Margin
|
|
|
11.0
|
%
|
|
|
10.5
|
%
|
|
|
0.5
pp.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDAR
|
|
|
370,566
|
|
|
|
381,096
|
|
|
|
-2.8
|
%
|
EBITDAR
Margin
|
|
|
17.6
|
%
|
|
|
15.8
|
%
|
|
|
1.8
pp.
|
|
LATAM Airlines
Group S.A.
Consolidated Financial Results
for the second quarter 2016
(in thousands of US Dollars)
|
|
For the six month period
ended June 30
|
|
|
|
2016
|
|
|
2015
|
|
|
%
Change
|
|
|
|
|
|
|
|
|
|
|
|
REVENUE
|
|
|
|
|
|
|
|
|
|
|
|
|
Passenger
|
|
|
3,665,004
|
|
|
|
4,320,688
|
|
|
|
-15.2
|
%
|
Cargo
|
|
|
535,977
|
|
|
|
684,767
|
|
|
|
-21.7
|
%
|
Other
|
|
|
237,269
|
|
|
|
198,541
|
|
|
|
19.5
|
%
|
TOTAL OPERATING REVENUE
|
|
|
4,438,250
|
|
|
|
5,203,996
|
|
|
|
-14.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EXPENSES
|
|
|
|
|
|
|
|
|
|
|
|
|
Wages and Benefits
|
|
|
-935,123
|
|
|
|
-1,103,849
|
|
|
|
-15.3
|
%
|
Aircraft Fuel
|
|
|
-929,437
|
|
|
|
-1,419,037
|
|
|
|
-34.5
|
%
|
Comissions to Agents
|
|
|
-127,186
|
|
|
|
-154,083
|
|
|
|
-17.5
|
%
|
Depreciation and Amortization
|
|
|
-470,157
|
|
|
|
-472,534
|
|
|
|
-0.5
|
%
|
Other Rental and Landing Fees
|
|
|
-521,653
|
|
|
|
-558,383
|
|
|
|
-6.6
|
%
|
Passenger Services
|
|
|
-140,276
|
|
|
|
-144,518
|
|
|
|
-2.9
|
%
|
Aircraft Rentals
|
|
|
-272,157
|
|
|
|
-257,691
|
|
|
|
5.6
|
%
|
Aircraft Maintenance
|
|
|
-181,744
|
|
|
|
-229,698
|
|
|
|
-20.9
|
%
|
Other Operating Expenses
|
|
|
-640,101
|
|
|
|
-620,006
|
|
|
|
3.2
|
%
|
TOTAL OPERATING EXPENSES
|
|
|
-4,217,834
|
|
|
|
-4,959,799
|
|
|
|
-15.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING INCOME
|
|
|
220,416
|
|
|
|
244,197
|
|
|
|
-9.7
|
%
|
Operating Margin
|
|
|
5.0
|
%
|
|
|
4.7
|
%
|
|
|
0.3
pp
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest Income
|
|
|
31,418
|
|
|
|
31,884
|
|
|
|
-1.5
|
%
|
Interest Expense
|
|
|
-206,632
|
|
|
|
-205,583
|
|
|
|
0.5
|
%
|
Other Income (Expense)
|
|
|
130,465
|
|
|
|
-177,746
|
|
|
|
-173.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INCOME BEFORE TAXES AND MINORITY INTEREST
|
|
|
175,667
|
|
|
|
-107,248
|
|
|
|
-263.8
|
%
|
Income Taxes
|
|
|
-144,899
|
|
|
|
36,953
|
|
|
|
-492.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INCOME BEFORE MINORITY INTEREST
|
|
|
30,768
|
|
|
|
-70,295
|
|
|
|
-143.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Attributable to:
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders
|
|
|
10,133
|
|
|
|
-89,674
|
|
|
|
-111.3
|
%
|
Minority Interest
|
|
|
20,635
|
|
|
|
19,379
|
|
|
|
6.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET INCOME
|
|
|
10,133
|
|
|
|
-89,674
|
|
|
|
-111.3
|
%
|
Net Margin
|
|
|
0.2
|
%
|
|
|
-1.7
|
%
|
|
|
2.0
pp
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effective Tax Rate
|
|
|
82.5
|
%
|
|
|
34.5
|
%
|
|
|
48.0
pp
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA
|
|
|
690,573
|
|
|
|
716,731
|
|
|
|
-3.6
|
%
|
EBITDA
Margin
|
|
|
15.6
|
%
|
|
|
13.8
|
%
|
|
|
1.8
pp.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDAR
|
|
|
962,730
|
|
|
|
974,422
|
|
|
|
-1.2
|
%
|
EBITDAR
Margin
|
|
|
21.7
|
%
|
|
|
18.7
|
%
|
|
|
3.0
pp.
|
|
LATAM Airlines Group S.A.
Consolidated Operational Statistics
|
|
For the three month period
ended
|
|
|
For the six month period
ended
|
|
|
|
June 30
|
|
|
June 30
|
|
|
|
2016
|
|
|
2015
|
|
|
%
Change
|
|
|
2016
|
|
|
2015
|
|
|
%
Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
System
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ASKs-equivalent (millions)
|
|
|
49,001
|
|
|
|
49,883
|
|
|
|
-1.8
|
%
|
|
|
101,707
|
|
|
|
102,120
|
|
|
|
-0.4
|
%
|
RPKs-equivalent (millions)
|
|
|
34,687
|
|
|
|
35,510
|
|
|
|
-2.3
|
%
|
|
|
73,048
|
|
|
|
73,750
|
|
|
|
-1.0
|
%
|
Overall Load Factor (based on ASK-equivalent)%
|
|
|
70.8
|
%
|
|
|
71.2
|
%
|
|
|
-0.4
pp
|
|
|
|
71.8
|
%
|
|
|
72.2
|
%
|
|
|
-0.4
pp
|
|
Break-Even Load Factor (based on ASK-equivalent)%
|
|
|
73.7
|
%
|
|
|
73.6
|
%
|
|
|
0.1
pp
|
|
|
|
73.1
|
%
|
|
|
68.2
|
%
|
|
|
4.9
pp
|
|
Yield based on RPK-equiv (US Cent)
|
|
|
5.7
|
|
|
|
6.5
|
|
|
|
-12.9
|
%
|
|
|
5.8
|
|
|
|
6.8
|
|
|
|
-15.3
|
%
|
Operating Revenues per ASK-equiv (US Cent)
|
|
|
4.0
|
|
|
|
4.6
|
|
|
|
-13.4
|
%
|
|
|
4.1
|
|
|
|
4.9
|
|
|
|
-15.7
|
%
|
Costs per ASK-equivalent (US Cent)
|
|
|
4.5
|
|
|
|
5.0
|
|
|
|
-10.5
|
%
|
|
|
4.4
|
|
|
|
5.1
|
|
|
|
-13.9
|
%
|
Costs per ASK-equivalent ex fuel (US Cents)
|
|
|
3.5
|
|
|
|
3.6
|
|
|
|
-3.4
|
%
|
|
|
3.5
|
|
|
|
3.7
|
|
|
|
-6.3
|
%
|
Fuel Gallons Consumed (millions)
|
|
|
280.1
|
|
|
|
292.3
|
|
|
|
-4.2
|
%
|
|
|
586.9
|
|
|
|
599.2
|
|
|
|
-2.1
|
%
|
Fuel Gallons Consumed per 1,000 ASKs-equivalent
|
|
|
5.7
|
|
|
|
5.9
|
|
|
|
-2.5
|
%
|
|
|
5.77
|
|
|
|
5.87
|
|
|
|
-1.7
|
%
|
Fuel Price (with hedge)
|
|
|
1.6
|
|
|
|
2.3
|
|
|
|
-30.6
|
%
|
|
|
1.55
|
|
|
|
2.38
|
|
|
|
-34.9
|
%
|
Fuel Price (without hedge)
|
|
|
1.6
|
|
|
|
2.2
|
|
|
|
-26.9
|
%
|
|
|
1.50
|
|
|
|
2.14
|
|
|
|
-29.9
|
%
|
Average Trip Length (thousands km)
|
|
|
1.7
|
|
|
|
1.6
|
|
|
|
3.7
|
%
|
|
|
1.7
|
|
|
|
1.6
|
|
|
|
4.3
|
%
|
Total Number of Employees (average)
|
|
|
50,532
|
|
|
|
52,944
|
|
|
|
-4.6
|
%
|
|
|
51,096
|
|
|
|
53,294
|
|
|
|
-4.1
|
%
|
Total Number of Employees (end of the period)
|
|
|
49,905
|
|
|
|
52,961
|
|
|
|
-5.8
|
%
|
|
|
49,905
|
|
|
|
52,961
|
|
|
|
-5.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Passenger
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ASKs (millions)
|
|
|
31,809
|
|
|
|
31,569
|
|
|
|
0.8
|
%
|
|
|
66,547
|
|
|
|
65,201
|
|
|
|
2.1
|
%
|
RPKs (millions)
|
|
|
26,298
|
|
|
|
25,837
|
|
|
|
1.8
|
%
|
|
|
55,457
|
|
|
|
53,875
|
|
|
|
2.9
|
%
|
Passengers Transported (thousands)
|
|
|
15,492
|
|
|
|
15,791
|
|
|
|
-1.9
|
%
|
|
|
32,592
|
|
|
|
33,037
|
|
|
|
-1.3
|
%
|
Load Factor (based on ASKs) %
|
|
|
82.7
|
%
|
|
|
81.8
|
%
|
|
|
0.8
pp
|
|
|
|
83.3
|
%
|
|
|
82.6
|
%
|
|
|
0.7
pp
|
|
Yield based on RPKs (US Cents)
|
|
|
6.5
|
|
|
|
7.7
|
|
|
|
-15.2
|
%
|
|
|
6.6
|
|
|
|
8.0
|
|
|
|
-17.6
|
%
|
Revenues per ASK (US cents)
|
|
|
5.4
|
|
|
|
6.3
|
|
|
|
-14.3
|
%
|
|
|
5.5
|
|
|
|
6.6
|
|
|
|
-16.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cargo
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ATKs (millions)
|
|
|
1,633
|
|
|
|
1,740
|
|
|
|
-6.1
|
%
|
|
|
3,340
|
|
|
|
3,507
|
|
|
|
-4.8
|
%
|
RTKs (millions)
|
|
|
797
|
|
|
|
919
|
|
|
|
-13.3
|
%
|
|
|
1,671
|
|
|
|
1,888
|
|
|
|
-11.5
|
%
|
Tons Transported (thousands)
|
|
|
224
|
|
|
|
247
|
|
|
|
-9.4
|
%
|
|
|
458
|
|
|
|
484
|
|
|
|
-5.3
|
%
|
Load Factor (based on ATKs) %
|
|
|
48.8
|
%
|
|
|
52.8
|
%
|
|
|
-4.0
pp
|
|
|
|
50.0
|
%
|
|
|
53.8
|
%
|
|
|
-3.8
pp
|
|
Yield based on RTKs (US Cents)
|
|
|
32.6
|
|
|
|
36.4
|
|
|
|
-10.4
|
%
|
|
|
32.1
|
|
|
|
36.3
|
|
|
|
-11.6
|
%
|
Revenues per ATK (US Cents)
|
|
|
15.9
|
|
|
|
19.2
|
|
|
|
-17.2
|
%
|
|
|
16.0
|
|
|
|
19.5
|
|
|
|
-17.8
|
%
|
Note: ASK-equivalent is the sum
of passenger ASKs and the quotient of cargo ATK and 0.095 (including LAN and TAM cargo operations)
* Fuel Gallons Consumed per 1,000
ASKs-equivalent
LATAM Airlines Group S.A.
Consolidated Balance Sheet
(in
thousands of US Dollars)
|
|
As of June 30
|
|
|
As of December 31
|
|
|
|
2016
|
|
|
2015
|
|
|
|
|
|
|
|
|
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash, and cash equivalents
|
|
|
637,397
|
|
|
|
753,497
|
|
Other financial assets
|
|
|
633,727
|
|
|
|
651,348
|
|
Other non-financial assets
|
|
|
302,897
|
|
|
|
330,016
|
|
Trade and other accounts receivable
|
|
|
870,274
|
|
|
|
796,974
|
|
Accounts receivable from related entities
|
|
|
353
|
|
|
|
183
|
|
Inventories
|
|
|
228,436
|
|
|
|
224,908
|
|
Tax assets
|
|
|
80,219
|
|
|
|
64,015
|
|
Non-current assets and disposal groups held for
sale
|
|
|
87,809
|
|
|
|
1,960
|
|
Total current assets
|
|
|
2,841,112
|
|
|
|
2,822,901
|
|
|
|
|
|
|
|
|
|
|
Property and equipment
|
|
|
10,997,106
|
|
|
|
10,938,657
|
|
Goodwill
|
|
|
2,752,135
|
|
|
|
2,280,575
|
|
Intangible assets other than goodwill
|
|
|
1,591,756
|
|
|
|
1,321,425
|
|
Other non- current assets
|
|
|
864,588
|
|
|
|
737,860
|
|
Total non- current assets
|
|
|
16,205,585
|
|
|
|
15,278,517
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
|
19,046,697
|
|
|
|
18,101,418
|
|
|
|
|
|
|
|
|
|
|
Liabilities and shareholders' equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other financial liabilities
|
|
|
1,883,447
|
|
|
|
1,644,235
|
|
Trade and other accounts payables
|
|
|
1,550,070
|
|
|
|
1,483,957
|
|
Tax liabilities
|
|
|
24,906
|
|
|
|
19,378
|
|
Other non-financial liabilities
|
|
|
2,761,558
|
|
|
|
2,493,402
|
|
Total current liabilities
|
|
|
6,219,981
|
|
|
|
5,640,972
|
|
|
|
|
|
|
|
|
|
|
Other financial liabilities
|
|
|
7,118,950
|
|
|
|
7,532,385
|
|
Accounts payable
|
|
|
371,104
|
|
|
|
417,050
|
|
Other provisions
|
|
|
520,742
|
|
|
|
424,497
|
|
Deferred tax liabilities
|
|
|
925,963
|
|
|
|
811,565
|
|
Employee benefits
|
|
|
76,371
|
|
|
|
65,271
|
|
Other non-financial liabilities
|
|
|
274,374
|
|
|
|
272,130
|
|
Total non-current liabilities
|
|
|
9,287,504
|
|
|
|
9,522,898
|
|
|
|
|
|
|
|
|
|
|
Total liabilities
|
|
|
15,507,485
|
|
|
|
15,163,870
|
|
|
|
|
|
|
|
|
|
|
Share capital
|
|
|
2,545,705
|
|
|
|
2,545,705
|
|
Retained earnings
|
|
|
324,766
|
|
|
|
317,950
|
|
Treasury Shares
|
|
|
(178
|
)
|
|
|
(178
|
)
|
Other reserves
|
|
|
579,411
|
|
|
|
(6,942
|
)
|
Equity attributable to the parent company’s
equity holders
|
|
|
3,449,704
|
|
|
|
2,856,535
|
|
Minority interest
|
|
|
89,508
|
|
|
|
81,013
|
|
|
|
|
|
|
|
|
|
|
Total net equity
|
|
|
3,539,212
|
|
|
|
2,937,548
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and equity
|
|
|
19,046,697
|
|
|
|
18,101,418
|
|
LATAM Airlines Group S.A.
Consolidated Statement of Cash
Flow Direct Method
(in thousands of US Dollars)
|
|
As of June 30,
|
|
|
As of June 30,
|
|
|
|
2016
|
|
|
2015
|
|
|
|
|
|
|
|
|
Cash flow from operating activities
|
|
|
|
|
|
|
|
|
Cash collections from operating activities
|
|
|
|
|
|
|
|
|
Proceeds from sales of goods and services
|
|
|
4,899,179
|
|
|
|
5,701,558
|
|
Other cash receipts from operating activities
|
|
|
32,923
|
|
|
|
43,060
|
|
|
|
|
|
|
|
|
|
|
Payments for operating activities
|
|
|
|
|
|
|
|
|
Payments to suppliers for goods and services
|
|
|
(3,143,525
|
)
|
|
|
(3,554,526
|
)
|
Payments to and on behalf of employees
|
|
|
(1,187,656
|
)
|
|
|
(1,128,812
|
)
|
Other payments for operating activities
|
|
|
(86,060
|
)
|
|
|
(151,537
|
)
|
|
|
|
|
|
|
|
|
|
Interest Received
|
|
|
5,508
|
|
|
|
13,544
|
|
Income Taxes refunded (paid)
|
|
|
(33,127
|
)
|
|
|
(20,878
|
)
|
Other cash inflows (outflows)
|
|
|
(68,147
|
)
|
|
|
(93,879
|
)
|
|
|
|
|
|
|
|
|
|
Net cash flows from operating activities
|
|
|
419,095
|
|
|
|
808,530
|
|
|
|
|
|
|
|
|
|
|
Cash flow used in investing activities
|
|
|
|
|
|
|
|
|
Cash flows utilized to obtain control of subsidiaries or other entities
|
|
|
-
|
|
|
|
-
|
|
Other cash receipts from sales of equity or debt instruments
of other entities
|
|
|
1,507,952
|
|
|
|
200,455
|
|
Other payments to acquire equity or debt instruments of other entities
|
|
|
(1,355,394
|
)
|
|
|
(204,439
|
)
|
Amounts raised from sale of property, plant and equipment
|
|
|
20,451
|
|
|
|
22,191
|
|
Purchases of property, plant and equipment
|
|
|
(409,770
|
)
|
|
|
(490,229
|
)
|
Amounts raised from sale of intangible assets
|
|
|
4
|
|
|
|
17
|
|
Purchases of intangible assets
|
|
|
(27,835
|
)
|
|
|
(10,487
|
)
|
Other cash inflows (outflows)
|
|
|
(2,056
|
)
|
|
|
23,671
|
|
|
|
|
|
|
|
|
|
|
Net cash flows used in investing activities
|
|
|
(266,648
|
)
|
|
|
(458,821
|
)
|
|
|
|
|
|
|
|
|
|
Cash flow from (used in) financing activities
|
|
|
|
|
|
|
|
|
Amounts raised from issuance of shares
|
|
|
-
|
|
|
|
-
|
|
Payments to acquire shares from society
|
|
|
-
|
|
|
|
45
|
|
Amounts raised from long-term loans
|
|
|
844,282
|
|
|
|
709,543
|
|
Amounts raised from short-term loans
|
|
|
230,000
|
|
|
|
45,000
|
|
Loans repayment
|
|
|
(886,880
|
)
|
|
|
(677,644
|
)
|
Payments of finance lease liabilities
|
|
|
(159,519
|
)
|
|
|
(158,113
|
)
|
Dividends paid
|
|
|
(19,799
|
)
|
|
|
(17,836
|
)
|
Interest paid
|
|
|
(201,684
|
)
|
|
|
(171,469
|
)
|
Other cash inflows (outflows)
|
|
|
(165,390
|
)
|
|
|
24,163
|
|
|
|
|
|
|
|
|
|
|
Net cash flows from (used in) financing activities
|
|
|
(358,990
|
)
|
|
|
(246,311
|
)
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in cash and cash equivalents before effect
of exchange rate changes
|
|
|
(206,543
|
)
|
|
|
103,398
|
|
Effects of variations in the exchange rate on cash and equivalents
|
|
|
90,443
|
|
|
|
(18,823
|
)
|
Net increase (decrease) in cash and cash equivalents
|
|
|
(116,100
|
)
|
|
|
84,575
|
|
|
|
|
|
|
|
|
|
|
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
|
|
|
753,497
|
|
|
|
989,396
|
|
|
|
|
|
|
|
|
|
|
CASH AND CASH EQUIVALENTS AT END OF PERIOD
|
|
|
637,397
|
|
|
|
1,073,971
|
|
LATAM Airlines Group S.A.
Consolidated
Balance Sheet Indicators
(in thousands of US Dollars)
|
|
As of June 30
|
|
|
As of December 31
|
|
|
|
2016
|
|
|
2015
|
|
|
|
|
|
|
|
|
Total Assets
|
|
|
19,046,697
|
|
|
|
18,101,418
|
|
Total Liabilities
|
|
|
15,507,485
|
|
|
|
15,163,870
|
|
Total Equity*
|
|
|
3,539,212
|
|
|
|
2,937,548
|
|
Total Liabilities and Shareholders equity
|
|
|
19,046,697
|
|
|
|
18,101,418
|
|
|
|
|
|
|
|
|
|
|
Net Debt
|
|
|
|
|
|
|
|
|
Current and long term portion of loans from financial institutions
|
|
|
7,801,714
|
|
|
|
7,685,765
|
|
Current and long term portion of obligations under capital leases
|
|
|
1,118,066
|
|
|
|
1,340,638
|
|
Other liabilities current and long term portion
|
|
|
35,735
|
|
|
|
35,042
|
|
Cash and cash equivalents
|
|
|
-1,234,146
|
|
|
|
-1,361,119
|
|
Total Net Debt
|
|
|
7,721,369
|
|
|
|
7,700,326
|
|
Plus: 7 x last twelve months'aircraft rent
|
|
|
3,777,193
|
|
|
|
3,675,938
|
|
Adjusted Net Debt
|
|
|
11,498,562
|
|
|
|
11,376,264
|
|
(*) Note: Includes
minority interest
LATAM Airlines
Group S.A.
Main Financial
Ratios
|
|
As of June 30
|
|
|
As of December 31
|
|
|
|
2016
|
|
|
2015
|
|
|
|
|
|
|
|
|
Cash and Equivalents as % of LTM
revenues
|
|
|
13.2
|
%
|
|
|
13.4
|
%
|
|
|
|
|
|
|
|
|
|
Adjusted Gross Debt (US$ thousands)
|
|
|
12,732,708
|
|
|
|
12,737,383
|
|
Adjusted Gross Debt / EBITDAR (LTM)
|
|
|
6.5
|
|
|
|
6.5
|
|
|
|
|
|
|
|
|
|
|
Adjusted Net Debt (US$ thousands)
|
|
|
11,498,562
|
|
|
|
11,376,264
|
|
Adjusted Net Debt / EBITDAR (LTM)
|
|
|
5.9
|
|
|
|
5.8
|
|
LATAM Airlines Group S.A.
Consolidated Fleet
|
|
As of June 30, 2016
|
|
|
|
Off-Balance
|
|
|
On-Balance
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Passenger Aircraft
|
|
|
|
|
|
|
|
|
|
|
|
|
Airbus A319-100
|
|
|
12
|
|
|
|
36
|
|
|
|
48
|
|
Airbus A320-200
|
|
|
57
|
|
|
|
93
|
|
|
|
150
|
|
Airbus A321-200
|
|
|
13
|
|
|
|
30
|
|
|
|
43
|
|
Airbus A330-200
|
|
|
2
|
|
|
|
3
|
|
|
|
5
|
|
Airbus A350-900
|
|
|
-
|
|
|
|
3
|
|
|
|
3
|
|
Boeing 767-300
|
|
|
3
|
|
|
|
34
|
|
|
|
37
|
|
Boeing 777-300 ER
|
|
|
6
|
|
|
|
4
|
|
|
|
10
|
|
Boeing 787-800
|
|
|
4
|
|
|
|
6
|
|
|
|
10
|
|
Boeing 787-900
|
|
|
8
|
|
|
|
4
|
|
|
|
12
|
|
TOTAL
|
|
|
105
|
|
|
|
213
|
|
|
|
318
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cargo Aircraft
|
|
|
|
|
|
|
|
|
|
|
|
|
Boeing 777-200F
|
|
|
2
|
|
|
|
2
|
|
|
|
4
|
|
Boeing 767-300F
|
|
|
3
|
|
|
|
8
|
|
|
|
11
|
|
TOTAL
|
|
|
5
|
|
|
|
10
|
|
|
|
15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL FLEET
|
|
|
110
|
|
|
|
223
|
|
|
|
333
|
|
Note: This table does include three
B767-300F and one B777-200F that Latam is currently leasing to a third party.
SIGNATURES
Pursuant to the requirements of
the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
Date: October 6, 2016
|
LATAM AIRLINES GROUP S.A.
|
|
|
|
By:
|
/s/ Enrique Cueto
|
|
Name:
|
Enrique Cueto
|
|
Title:
|
Latam Airlines Group CEO
|
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