Third quarter 2012 Results Presentation November, 2012 This - - PowerPoint PPT Presentation

Third quarter 2012 Results Presentation

November, 2012

This present at ion may include forward-looking comment s regarding t he Company’ s business

• ut look and ant icipat ed financial and operat ing result s. These expect at ions are highly

dependent on t he economy, t he airline indust ry, commodit y prices, int ernat ional market s and ext ernal event s. Therefore, t hey are subj ect t o change and we undert ake no

• bligat ion t o publicly updat e or revise any forward looking st at ement s t o reflect event s or

circumst ances t hat may arise aft er t he dat e of t his present at ion. More informat ion on t he risk fact ors t hat could affect our result s are cont ained on our Form 20-F for t he year ended December 31, 2011. Informat ion, t ables and logos cont ained in t his present at ion may not be used wit hout consent from LATAM Airlines Group S .A.

( US$ m illion) 3Q1 1 Pro Form a 3 Q12 % Change ( YoY) Total Revenues 3 ,4 77 3,3 45

• 3 .8%

Passenger Revenues 2,887 2,817

• 2.4%

Cargo Revenues 523 448

• 14.4%

Total Operating Expenses

• 3,0 16
• 3,2 60

8 .1% Operating I ncom e ( Ex one tim e) 2 18 105

• 5 1.9 %

Operating Margin 6.3% 3.1%

• 3.1 pp

Net I ncom e ( Ex one tim e)

• 4 55

21 10 4.7 % EBI TDAR ( Ex one tim e) * 6 29 506

• 1 9.6 %

EBITDAR Margin 18.1% 15.1%

• 3.0 pp

LATAM Airlines Group: Highlights 3Q 2012

 In this quarter the company recorded Net income of US$21 million and an operating margin of 3.1% excluding extraordinary

items.

 Extraordinary Items include transaction related expenses of US$20 million and a one time tax charge of US$70 million

* EBITDAR = Operating income + depreciation & amortization + aircraft rentals

LATAM Airlines Group operating margin analysis (ex one time items)

• Op. Margin [ US$MM]

105 105 218 218

• 51.9%

Fuel Price [ US$]

• 2.1%

3.68 3.60 6.3% 3.1% 3.1%

• 5.9pp
• 3.3pp

+3.5pp +0.7pp +1.8pp 3Q11 E xchange Rate Yield Load Factor Fuel Price Others 3Q12

76.3% 80.0%

Pax Load Factor

24,607 26,375

Pax Traffic (million RPK)

8.9 8.5

Pax RASK (US$ cents)

11.7 10.7

Pax Yield (US$ cents)

32,265 32,989

Pax Capacity (million ASK)

LATAM Airlines Group: Passenger Business – Revenue decreases 2.4%

+ 2 .2 % + 7 .2 % + 3 .7 pp.

• 9 .0 %
• 4 .6 %

3Q11 3Q12

LATAM Airlines Group: Diversified passenger capacity growth

ASK 3Q 2012

Growth in ASK (3Q11 vs. 3Q12) 2.2% International (Long Haul)

• 0.6%

Regional 14.8% Brazil Domestic

• 1.8%

Chile Domestic 17.4% Peru Domestic 7.1% Argentina Domestic 38.5% Colombia Domestic

• 0.9%

Ecuador Domestic 15.2%

Businesses performance January – S eptember 2012: Domestic Brazil

TAM Domestic Passenger Operation - Capacity and Traffic Evolution

Y

• Y Growt h

Load Fact or

77% 65% 63% 70% 65% 72% 81% 74% 78% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90%

• 10%
• 5%

0% 5% 10% 15% 20% Jan-12 feb-12 mar-12 apr-12 may-12 jun-12 jul-12 aug-12 sep-12 RPK Growth ASK Growth LF

LATAM Airlines Group: Cargo Business – Revenue decreases 14.4%

3Q11 3Q12 58,7% 57,2% Cargo Load Factor 1.131 1.067 Cargo Traffic (million RTK) 27,2 24,0 Cargo RATK (US$ cents) 46,3 42,0 Cargo Yield (US$ cents) 1.925 1.865 Cargo Capacity (million ATK)

• 3 .2 %
• 5 .6 %
• 1 .5 pp.
• 9 .2 %
• 1 1 .6 %

Synergy Breakdown Synergy Schedule

(US $ millions)

Upper bound Lower bound

Estimated US $700 Million in S ynergies

Passenger, Cargo and Cost synergies on track

Passenger Operations

 New and improved agreements with international carriers  Alignment of commercial practices and on board product  New operations on regional routes

Cargo Operations

 Integration of international cargo systems completed  Improved connectivity for cargo at GRU and GIC airports  New domestic Brazil cargo contracts

Costs Synergies

 Fuel price negotiations in some airports completed  Early redelivery of engine inventories  Insurance j oint negotiation completed

9,2% 13,7% 3% - 4% 4% - 6% 10,5% 9,6% 0% 5% 10% 15% 20% 25% 2010 2011 2012E 2013E 20,5% 12,4% 0% - 2% 6% - 8% 0% 5% 10% 15% 20% 25% 2010 2011 2012E 2013E

2012 Estimated capacity expansion

LATAM Airlines Cargo ATK Growth LATAM Airlines Passenger ASK Growth

LAN TAM LATAM

Domestic Brazil ASKs

• 2%

Domestic Brazil ASKs

• 7% 1H2013

LATAM Airlines Group fleet plan 2012-2015

323 336 356 379

US$ 2,979 US$ 2,195 US$ 2,354 US$ 1,613

Fleet Capex US$ M illion

Boeing 787 Dreamliner

 Will allow t he group t o achieve unprecedent ed efficiencies in fuel consumpt ion  Consumes bet ween 12%

and 15% less fuel t han a B767

 20%

less CO2 emissions

 Will operat e bet ween S

ant iago, Buenos Aires, Lima, Los Angeles, Madrid, and Frankfurt .

Recently integrating the first 787 Dreamliner to our fleet

LATAM Airlines Group fuel hedges

Note: hedging position as of October 23, 2012 * Values are WTI equivalents

LATAM Fuel Hedges

(%

• f consumption)

6% 4% 6% 9% 8% 8% 7% 6% 1% 1% 24% 10% 4% 9% 4% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 WTI Swap WTI Collar Brent Collar Brent Call Opt ion Three -way WTI

4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 WTI Band 101@75 47% WTI Band 101@67 31% WTI Band 117@87 8% WTI Band 119@87 7% 6% WTI Band 102@80 7% WTI Band 93@80 1%

47% 13%

Thank Y

• u