LATAM Airlines Group
Annual Report 2023

Plain-text annual report

1 ANNUAL REPORT 2023Index 03 06 09 10 13 14 15 20 21 24 25 26 28 30 Presentation Highlights Sustainability strategy Letter from the CEO About us LATAM group Our strategy Value generation model Timeline Awards and recognitions Operations Passenger operation Cargo operation Fleet 2 32 Corporate governance 33 36 39 45 49 51 53 Ownership structure Composition of the board of directors Decision-making bodies Main executives Corporate guidelines Stakeholder engagement Financial policies 57 Our business 58 59 61 62 Industry context Financial results Investment plan Stock information 63 Safety 64 Priority Nº1 69 70 71 72 76 83 87 89 90 99 Commitment to sustainability 112 About the report Objetives and results 113 Material topics Sustainability strategy 116 Index of GRI and SASB contents Environmental management 120 Index of NCG contents Climate change Circular economy Shared value Employees 121 Glossary 122 External assurance 124 Annexes Better, simpler, more transparent 164 Financial Reports Who makes up LATAM group 165 Financial statements 100 Clients 101 The best experience 107 Suppliers 108 Supply chain management 259 Affiliates and subsidaries 286 Financial analysis 294 Sworn statement 295 Company structure ANNUAL REPORT 202301 Presentation In this chapter Highlights 06 09 Sustainability strategy 10 Letter from the CEO 01 —Presentation Presentation GRI 2-2 AND 2-3 In its Integrated Report, LATAM Airlines Group S.A. presents each year the main achievements and challenges of both the company and its affiliates, considering the different areas of the business (economic, social and environmental), corporate governance and safety, as well as the relationship with its stakeholders. This edition refers to the period from January 1 to December 31, 2023 and meets the requirements of General Standard (NCG, for its Spanish acronym) N° 30 and N° 461 of Chile’s Financial Market Commission (CMF, for its Spanish acronym), which incorporates sustainability and corporate governance issues in the annual reports. It should be noted that, for LATAM, this mandatory regulation offers an opportunity to strengthen what was begun in 2018, when the group first published an Integrated Report, i.e. a document that strategically integrated both financial and non-financial information (previously, these were presented separately in two publications: the Annual Report and the Sustainability Report), as well as lending visibility to the corporate governance practices that the company has historically followed. In this regard, LATAM’s Consolidated Financial Statements, which include the fi- nancial position as at December 31, 2022 and 2023, are an essential part of this report and have been externally audited by Pricewaterhouse Cooper (PwC). In addition to being available in this document, starting on page 165, they can also be viewed on the CMF website and on the LATAM Investor Relations website. Furthermore, in the section that provides the information linked to the relevant sustainability topics and the indicators that monitor the group’s performance in these affairs, the guidelines were the Global Reporting Initiative (GRI) standards, the main global benchmark for sustainability communication and management. In turn, the contents and indicators linked to the GRI standards were subjected to external verification by Deloitte. Likewise, the information on sustainability is complemented by metrics established for airlines by the Sustainability Account- ing Standards Board (SASB)/ International Financial Reporting Standards (IFRS) Foundation. Moreover, this publication has incorporated indicators from the S&P Global Corporate Sustainability Assessment, which is voluntarily completed by LATAM each year. This edition will be available on LATAM's website, as well as on the CMF website, starting from April 2024. 4 ANNUAL REPORT 202301 —Presentation CONVENTIONS GRI 2-1 Currency and Exchange Rate LATAM Airlines Group S.A. and most of its affiliates maintain accounting records and prepare their financial statements in US dollars (USD). At the same time, some of its affiliates use Chilean pesos (CLP), Colombian pesos (COP) or Brazilian reals (BRL). However, the group’s consolidated financial statements include the results of these affiliates converted into USD. In accordance with the International Accounting Standards (IASB), assets and liabilities consider the exchange rate at the end of the period. In turn, the income and expense accounts take into account the exchange rate at the date of the transaction; however, a monthly exchange rate may be adopted if the rates do not vary widely. Names LATAM Airlines Group: Except in cases where the context requires it, mentions of LATAM Airlines Group refer to LATAM Airlines Group S.A., a non-consolidated operating entity. GUIDE TO READING THE REPORT LATAM: References to LATAM, the Group, and the company refer to LATAM Airlines Group S.A. and its consolidated affiliates. These are Transporte Aéreo S.A. (LATAM Airlines Chile); LAN Airlines Perú S.A. (LATAM Airlines Peru), Aerolane, Líneas Aéreas Nacionales del Ecuador S.A. (LATAM Airlines Ecuador); LAN Argentina S.A. (LATAM Airlines Argentina, formerly Aero 2000 S.A.); Aerovías de Integración Regional, Aires S.A. (LATAM Airlines Colombia); TAM S.A. (TAM or LATAM Airlines Brazil); Transportes Aéreos del Mercosur S.A.(LATAM Paraguay); and the cargo subsidiaries, which are: LAN Cargo S.A. (LATAM Cargo Chile) Línea Aérea Carguera de Colombia S.A. (LANCO or LATAM Cargo Colombia);, and Aerolinhas Brasileiras S.A. (ABSA or LATAM Cargo Brazil). Other references to LATAM, as the context may re- quire, refer to the LATAM brand, launched in 2016, and comprises, 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, and LATAM Airlines Brazil. LATAM Cargo Group: This refers to the group of cargo operators, i.e. LAN Cargo S.A. (LATAM Cargo Chile), Línea Aérea Carguera de Colombia S.A. (LANCO or LATAM Cargo Colombia) and Aerolinhas Brasileiras S.A. (ABSA or LATAM Cargo Brasil). LAN: Mentions of LAN refer to LAN Airlines S.A., currently LATAM Airlines Group S.A. This is due to circumstances and events occurring prior to the com- pletion date of the combination between LAN Airlines S.A. and TAM S.A. TAM: Unless the context requires another form, men- tions of TAM refer to TAM S.A. and its consolidated subsidiaries, including TAM Linhas Aéreas S.A. (TLA), which operates under the name LATAM Airlines Brazil, Fidelidade Viagens e Turismo Limited (TAM Viagens) and Transportes Aéreos del Mercosur S.A. (TAM Mer- cosur). STANDARDS USED This report includes information required by General Standard No. 461 and No. 30, the SASB standard for the airline industry and indicators suggested by the Global Reporting Initiative (GRI). The document in- cludes the information related to each of the standards used, ordered within two specific content indexes on pages 116-120. This is to make it easier to obtain the information related to each standard. NCG 461 GRI SASB Icon NCG N°461 Contents of General Stan- dard No. 461 applicable to Chilean Annual Reports. Icon GRI Contents of the international standard Global Reporting Initiative (GRI). Icon SASB Contents of the transportation sec- tor from the Sustainability Accoun- ting Standards Board (SASB). MORE INFORMATION (GRI 2-3) Any suggestions, criticisms, or concerns about this report can be sent to e-mails investorrelations@latam.com and/or sostenibilidad@latam.com. 5 ANNUAL REPORT 2023Highlights Operational and financial performance TOTAL REVENUES 11,789 MILLION +23.9% vs. 2022 DOLLARS ASK 137,251 MILLION +20.6% vs. 2022 01 —Presentation —Highlights • Revenues by business unit Cargo 12% 1% Others TOTAL REVENUES (million dollars) ADJUSTED EBIT MARGIN NET LEVERAGE1 Passengers (domestic SSC5) 17% 1 3 4 0 1 , 7 1 5 9 , 9 8 7 1 1 , % 1 7 . % 4 1 . % 3 1 1 . 2019 2022 2023 2019 2022 2023 40% Passengers (international) Passengers (domestic Brazil) 30% • Diversification of passenger operations (ASK) ADJUSTED EBITDAR (million dollars) NET INCOME2 (million dollars) 2 1 2 2 , 4 1 3 1 , 3 3 5 2 , 0 9 1 2 8 5 1 4 3 - 2019 2022 2023 2019 2022 2023 4.0x 2022 2.1x 2023 LIQUIDITY3 (% last twelve months of revenues) 24% 2023 49% International 1 Calculation formula: Net Debt / Adjusted EBITDAR. 2 The 2022 result excludes non-opertating impacts worth MUSD$1,680, due to the Chapter 11 restructuring, exited on November 2022. 3 Calculation formula: Cash and cash equivalents and committed and unused revolving credit lines. 4 ASK: Acronym for "available seat kilometers" 5 SSC: Acronym for "Spanish-speaking countries" SEE MORE In chapter "Our Business" (Page 57). Total revenues in 2023 were better than pre-pandemic levels (2019) and operating and financial results surpassed LATAM group's 2023 Guidance and updated 2022 Business Plan (both previously released). 1 Guidance delivered in the company's 2Q23 report 6 Domestic SSC5 18% Domestic Brazil 33% ANNUAL REPORT 202301 —Presentation —Highlights Passenger operations Cargo operations 74 million passengers transported 26 countries 148 destinations 4 continents* *America, Europe, Oceania and Africa 945,500 tons transported 33 countries (7 exclusively cargo) 166 destinations (18 exclusively cargo) Load factor: 83.1% Consolidated traffic (RPK): 114.00 billion Capacity (ASK): 137.25 billion Load factor: 51.6% Consolidated traffic (RTK): 3.70 billion Capacity (ATK): 7.17 billion RPK: Acronym for "revenue passenger-kilometers". RTK: Acronym for "revenue ton-kilometers". ATK: Acronym for "available ton-kilometers". ASK: Acronym for "available seat-kilometers". Focus on the customer 4 routes started operating during 2023 as part of the first year of the joint venture with Delta Air Linea, reaching six in total. 6,481 m2 of lounges distributed across 5 destinations 30 aircraft joined LATAM fleet in 2023 5 Wide-Body 25 Narrow-Body 20 freighter aircraft are part of the LATAM cargo fleet 2023. • Bogotá El Dorado International Airport (BOG): 640 m2 • Buenos Aires Ezeiza International Airport (EZE): 653 m2 • Santiago de Chile Arturo Merino Benitez International Airport (SCL): 2,400 m2 • São Paulo São Paulo - Guarulhos International Airport (GRU): 1,835 m2 • Miami Miami International Airport (MIA): 953 m2 In-flight Wi-Fi service on 99% of LATAM Airlines Brazil narrow-body aircraft and installation began on similar aircraft operating in Spanish-speaking markets. More than 45 million members enrolled in the frequent flyer program LATAM Pass. SEE MORE In chapters "Clients" (Page 100) and "Operations" (Page 25). 7 ANNUAL REPORT 2023 01 —Presentation —Highlights Our people GRI 2-9 35,568 employees More than • 4,000 Pilots • 8,500 Crew members • 6,000 Professionals • 7,800 Airport staff • 4,800 Maintenance • 4,000 Clerical staff Diversity and inclusion 50 nationalities We are present in 20+ countries around the world. Headquarters in Brazil, Chile, Colombia, Ecuador, Peru and the USA. 8 LATAM´s culture genuinely cares about people and offers a fair, empathetic, transparent and streamlined experience. 78 points on the Organizational Health Index (OHI) on a scale of 0 to 100. AVERAGE TRAINING h/employee 1-point increase versus last year. LATAM was within the first quartile of the more than one thousand large companies in the world that implement this survey. . 3 6 3 . 7 2 4 . 9 9 4 2021 2022 2023 78 points on a scale from 0 to 100 in the Inclusion Evaluation. Women 40% Men 60% SEE MORE In chapter "Employees" (Page 89). ANNUAL REPORT 2023 Sustainability strategy NCG 461: 8.2 SUSTAINABILITY INDICATORS BY INDUSTRY SASB TR-AL-110A.2 LATAM is committed to becoming an in- creasingly sustainable company. In fact, according to the most recent Corporate Sustainability Assessment (CSA) by Standard & Poor's (S&P Global), LATAM was the best-performing airline group in terms of sustainability across Latin America and the seventh best in the world in 2023. This achievement also made it the only airline group in the region to be included in the 2024 edition of "The Sustainability Yearbook", in which the prestigious risk rating agency highlights those companies that have achieved outstanding growth in the evaluation. 01 —Presentation —Environmental management ENVIRONMENTAL MANAGEMENT CLIMATE CHANGE CIRCULAR ECONOMY SHARED VALUE The Environmental Management System certification under IATA's voluntary Environmental Assessment Program (IEnvA) Stage 2 standard was maintained in the affiliates in Chile, Colombia, Peru, Ecuador and Brazil. 850,932 thousand tons of greenhouse gas emissions managed through reduction or offsetting in 2023. 110,000 tons of CO2 reduced, which translates into 35% increase over the previous year. 740,932 tons of CO2 were managed through offsetting in strategic ecosystems in Latin America. Elimination of more than 1,700 tons of single-use plastics1 throughout the operation, 96% of the scope defined since the beginning of the strategy. With its partners, LATAM group transported in 2023, free of charge for social and environmental causes through the Avión Solidario program more than 4,500 people 483 tons of cargo (such as medicines, medical supplies, food, and others). 9 1 Cutlery, straws, trays, food containers and bags, among others, are considered single-use plastics. More information at: latamairlines.com/cl/es/sostenibilidad/economia-circular SEE MORE In chapter "Commitment to Sustainability" (Page 69) ANNUAL REPORT 2023 Letter from the CEO GRI 2-22 10 01 —Presentation —Letter from the CEO GRI 2-22 2023 was a year of important progress for LATAM. After the devastating pandemic, which paralyzed the industry worldwide, and a long restructuring process, we were able to implement and apply many of the lessons learned and the plans the group set forth during those difficult years. sentence will probably not disagree with the objective. It is true that we work hard on improving the travel experience, but today we devote the same amount of effort to improving the whole experience of in- teracting with LATAM group at any time and at any touchpoint. Today’s product definition encompasses all these interactions. From the intention to travel, to the reception of luggage. Our most important reflection was to understand that results should not be an end in themselves. To understand that they come if things are done right. Thus, we decided to build on the progress and work of the last 25 years. On the solid foundations that LATAM group has developed: its cost structure and sound balance sheet, its network, its brand, its fre- quent flyer program and its service, among others, and on devoting our energy and efforts to taking care of our people, clients and environments, supporting the societies where the group's companies are present. In other words, we set out to work to make LATAM more human. Thus, in 2023, the group made great strides in improving service at all times, especially when clients encounter an issue. We are proud of the results, but we are not satisfied. In Chile, Peru, Brazil and Colombia, government agencies have complaint portals and periodically publish their corresponding statistics. In each of these four countries, the companies in LATAM group had the lowest number of complaints per passenger during the past year. Nonetheless, we are aware that there is room for improvement and that, for some of our clients, we did not meet their expectations. We will work in 2024 so that these cases will be fewer each time. Today, we understand that our people are the group’s most relevant asset. Companies are first and foremost social organizations. Everything we think and build is based on people feeling a sense of belonging and commitment. It is a priority that, for each of them, working at one of the companies in LATAM group makes sense both professionally and personally. In 2023, the Organizational Health Index (OHI) reached its best result ever, with 78 points. This places the group in the top quartile of the more than 1,000 large companies worldwide that use this survey. This reflects the group's effort to create a fairer, more empathetic, more transparent and simpler environment for the teams and to bring purpose to our daily work. Regarding the travel experience, important changes and improvements were implemented last year. On the one hand, the group incorporated the Premi- um cabin on all its flights. Thus, all of our operations with narrow-body aircraft have a Premium Economy cabin, and all of our wide-body flights have a Premium Business cabin. At the same time, the group continued to equip narrow-body aircraft with wifi, reaching 65% of the fleet. In-flight connectivity is already available on 99% of the Brazilian affiliate’s narrow-body fleet, on more than 50% of the Colombian, and on 30% of the Chilean. "Every day we strive to make traveling with LATAM a more distinctive experience." Whoever reads this Also last year, construction began on the LATAM Lounge in Lima, Peru, which will become the group's fifth lounge once the new Jorge Chávez International Our most important reflection was to understand that results should not be an end in and of themselves. Rather, to understand that they come if things are done right. Airport is inaugurated. In addition,we continued to renovate the lounges located in the international air- ports of São Paulo, Bogota and Buenos Aires-Ezeiza. I could comment on many other measures, but what matters in the end has been the results. The tool used by the group to measure customer satisfaction, at a general level, is the Net Promoter Score (NPS). In 2023, the NPS for all our passengers was 48 points, reaching 55 points for our high-value passengers and 58 points for our cargo clients. Each of these results is an all-time high. In terms of the commitment to the environment and to being a contributor to the societies where the group operates, progress was also made and recognition was awarded. The group was, once again, in the spot- light in Standard & Poor's (S&P Global) Sustainability Yearbook. Likewise, LATAM Cargo Chile received the Air Cargo Sustainability Award from The International Air Cargo Association (TIACA). While these recognitions reinforce that the sustain- ability strategy launched by the group in 2021 based on four pillars— Environmental Management, Climate Change, Circular Economy and Shared Value— is on ANNUAL REPORT 202301 —Presentation —Letter from the CEO the right track, there is still a lot of work to be done. With regard to the Environmental Management Pillar, in 2023 the company continued to work on strengthening its Environmental Man- agement System, which is IEnvA Stage 2 certified in Colombia, Peru, Ecuador, Brazil and Chile, and ISO 14001 certified at our Miami base. With regard to Climate Change, the group's goal is to achieve net zero emissions by 2050. With this goal in mind, LATAM group is working along four lines of action: Operational efficiency, through its Fuel Efficiency program (which this year reached 6.3% fuel efficiency, measured on the same type of operation, since it began to be implemented; fleet renewal, incorporating the latest generation aircraft, which are up to 20% more efficient in fuel consumption compared to previous models; and the use of Sustainable Aviation Fuel (SAF), making its first two international flights in 2023. Lastly, as a comple- mentary measure, LATAM and its clients, together, offset more than 740 thousand tons of CO2 equivalent in projects aimed at preserving strategic ecosystems in the region. Currently, there are technological and logistical gaps that could limit the feasibility of significantly expanding the use of SAF worldwide. For this reason, together with Airbus, LATAM group announced in 2023 the financing of a study with the presti- gious MIT Joint Program on the Science and Policy of Global Change across six Latin American countries—namely, Brazil, Chile, Colombia, Ecuador, Mexico and Peru. This report, which is still under development, will seek to provide a comprehen- sive analysis of scenarios for the deployment of SAF and the development of alternatives related to, among other things, carbon capture and storage, as well as evaluate the use of incentives, carbon taxes and other types of offsets. Regarding the Circular Economy pillar, the group set itself a very relevant challenge: to eliminate single-use plastics throughout its operations. To this end, over the past three years, LATAM’s different areas have joined forces to generate a transformation, not only at the operational level, but also at the cultural level. Thus, by the end of 2023, the group achieved the elimination of more than 1,700 tons, equivalent to 96% of the baseline. As for the "Second Flight" program, which is also encompassed under Circular Economy, it seeks to give a second life to un- used uniforms. Their transformation into more than 20,000 products was achieved through agreements with eleven NGOs in the region. Meanwhile, for Shared Value, the Solidary Plane program con- tinued to take off throughout the region. This year, the group's connectivity was again made available to contribute to health, environmental and natural disaster needs. The period ended with 43 solidarity alliances in five South American countries through the Solidary Plane program. These results enabled us to record an adjusted net debt ratio (measured as adjusted EBITDAR to net financial debt) of 2.1x, which translates into a very significant decrease compared to the 4.0x ratio recorded in 2022. In turn, LATAM was the official airline group of the 2023 Pan American and Parapan American Games and of Team Chile. The group had the opportunity to transport the Pan American Fire from Mexico to Chile in one of its airplanes and mobilize thousands of athletes and their families to be part of the great sporting event. Financial results Everything we have done in our financial restructuring, together with the actions that the group has developed with regard to its people, clients and the environment, has allowed us to achieve sound economic results. To this effect, LATAM ended 2023 with an adjusted operating profit (adjusted EBIT) of 11.3%, and a solid liquidity of over USD$2.8 billion, representing 24% of our revenues. The group also reported a record net profit of US$582 million. Regarding the size of the operations, and after four years, the group managed to return to near pre-pandemic levels, reaching 74 million passengers transported in 2023—a figure that was 18.3% higher than in 2022 and similar to 2019. . ú r e P , o c z u C 11 ANNUAL REPORT 2023 01 —Presentation —Letter from the CEO As published for 2024, the group is forecasting an- nual growth of between 12% and 14% in capacity for passenger operations (ASK) and between 10% and 12% in capacity for cargo operations (ATK). This progress is the result of years of effort and learn- ing, but we know that we still have a long way to go. We wish to continue strengthening LATAM group in each of our focus areas defined, guaranteeing safety and customer service and striving for efficiency, care for the environment and social well-being. I would like to express my most sincere thanks to our clients who choose us every day, to the more than 35 thousand employees who are part of LATAM group. Their commitment to our mission has been funda- mental in driving the group's progress, and enabling us to consolidate as a sounder group, always focused on the future. Let us celebrate the present together and prepare for a future full of opportunities. ROBERTO ALVO M. CEO LATAM Airlines Group This went hand in hand with a major expansion and modernization of the fleet. Thirty aircraft were re- ceived (5 wide-body and 25 narrow-body) and four passenger aircraft were converted from passenger to cargo, closing the financial year with 20 freighters. In addition, the group continued to offer its passen- gers the best connectivity in the region, reaching 148 destinations in 26 countries, which provided its customers with unprecedented freedom of choice in terms of destinations and services. In the same vein, LATAM group has launched four new routes under the joint venture with Delta Airlines, bringing the total to six. This alliance completed its first year in 2023, benefiting millions of clients through ongoing collaborative work. At the regional level, the affiliates increased their presence in all the markets where they operate and maintained their shares in three of the five home markets: LATAM Airlines Chile, LATAM Airlines Brazil and LATAM Airlines Peru. On the other hand, LATAM Airlines Colombia increased its market share by nine percentage points, with its quick reaction to allocate additional capacity in Colombia. During the year, LATAM Pass strengthened its presence as the largest loyalty program in Latin America with more than 45 million members, being recognized as the "Best Program of the Year" by Frequent Traveler Awards in 2023. As for LATAM Cargo S.A. and its cargo affiliates in Brazil and Colombia, they played an important role in local supply logistics and exports during the year. In fact, the affiliates in Colombia and Ecuador became the number one airlines in the transport of flowers. This is because cargo capacity, which is measured in ATK ("available ton-kilometers"), increased 14.6% in 2023 versus the previous year. 12 ANNUAL REPORT 202302 About us In this chapter group 14 LATAM 21 Timeline strategy 15 Our 24 Awards and Recognitions 20 Value generation model LATAM group 14 02 —Abaut us —LATAM group NCG 461: 6.1 INDUSTRIAL SECTOR AND 6.2 BUSINESSES GRI 2-1, 2-6 AND 3-3 LATAM is one of the largest airline groups in the world and the largest in Latin America, with expansive passenger and cargo operations and the largest frequent flyer program in the region. Along this line, it has domestic operations in five South American countries: Brazil, Chile, Colombia, Ecuador and Peru. It also offers the best connectivity within, to and from Latin America, covering 148 destinations in 26 countries with its passenger operations, and 166 destinations in 33 countries with its cargo operations. This network, together with the flight frequency and the connection possibilities that it offers to its passengers, enhanced with the connection hubs of São Paulo (Brazil), Santiago (Chile), and Lima (Peru), makes it a benchmark in the regional and global airline industry, enabling it to have a geographically diversified oper- ation and revenue base. After emerging from Chapter 11 of the US Bankruptcy Code, which it filed for in 2020, LATAM emerged as a more efficient and competitive group, with significant cost savings, a reduction in debt and a resulting improvement in capital structure. In 2023, the group continued to build on this path and improved its customer and employee satisfaction indicators, as well as adding 30 new aircraft to its fleet. In addition, it added 21 new routes, 17 of which are international and 4 are domestic. On the other hand, in September 2023, LATAM and its affiliates completed one year of the joint venture with Delta Air Lines, which includes the markets of Brazil, Canada, Chile, Colombia, the United States, Paraguay, Peru and Uruguay. During this period, six new routes have already begun operations. This is in addition to what has already been achieved between LATAM and its subsidiaries, with Delta Air Lines since 2019, the year when they announced their agreement, which in- cludes the accrual and redemption of miles, as well as benefits for passengers; shared terminals in the airports of Santiago (Arturo Merino Benitez International Airport), São Paulo (São Paulo - Guarulhos International Airport) and New York (John F. Kennedy International Airport); and mutual access to 53 Delta Sky Club lounges in the United States and five LATAM Lounges in South America. Likewise, in 2023, the airline took significant steps in its commitment to improve its passengers’ travel experience. This is verified by the Official Airline Guide (OAG), which states that LATAM was the second airline among the 20 largest airlines with the best on-time performance during 2023. MORE INFORMATION 25 Operations 164 Financial results 124 Legal Incorporation 124 Company Purpose 125 Property, Plant, And Equipment Sales Channels 126 Trademarks, Patents, Licenses and Franchises 124 126 Additional Information ANNUAL REPORT 202302 —Abaut us —Our strategy NCG 461: 2.1. MISSION, VISION, PURPOSE AND VALUES We ensure that dreams reach their destination. Purpose Mission Vision Our mission is to connect the region with the rest of the world, providing a wide network for the transportation of cargo and passengers, in a safe manner and taking care of our customers, always seeking a balance be- tween economic growth, efficiency, environmental care, and social well-being. To be the airline group that connects Latin America with the world and the world with Latin America, assuming its social responsibility by being fair, empathetic, transparent, and simple with its customers, employees, and other key stakeholders. Values Safety Being attentive Sustainability We guarantee at all times our safe- ty, the safety of our team and the seafety of our customers. We genuinely care about peo- ple’s needs and offer them a fair, empathetic, transparent, and simple (JETS) experience. We continuously seek a balance between economic growth, effi- ciency, environmental care, and social well-being for a more sus- tainable future. Our strategy 15 15 ANNUAL REPORT 2023 02 —Abaut us —Our strategy Pillars of the LATAM group strategy NCG 461: 4.2 STRATEGIC OBJECTIVES & 4.1 TIME HORIZONS LATAM undertakes an annual strategic planning process to review and/or establish the strategic objectives for the medium and long term, which are currently explained below: 1 To be a dedicated group focused on providing the best solution to our clients. 2 To be a financially sound and healthy group of companies 3 To be a group of companies that takes on the challenges of the future UNIQUE PRODUCT AND CONNECTIVITY To be the airline that offers the best range of destinations to, from and within Latin America, offering an appealing frequent flyer program, and delivering alternatives for all our passengers, keeping in mind their reasons for traveling. To provide an excellent cargo service that makes the best use of our assets deployed across the continent and the world. • Unique network: To continue to expand and diversify our route network to meet the growing demand and explore new opportu- nities towards the rest of the world. • Provide a diversified product: To strengthen our business diversity, providing passengers and cargo clients with flexible choices. • Strategic agreements: To bolster commercial agreements to improve global and regional connectivity that contribute to the sustain- able growth and expansion of our network. CUSTOMER EXPERIENCE AS A FOCAL POINT CULTURE OF COMMITTED INDIVIDUALS OPERATIONAL EXCELLENCE SOCIAL AND SUSTAINABLE ASSET To offer a customer-centric service, ensuring reliability, operational safety and generating loyalty through the LATAM Pass program, increasing the benefits to our passengers. Maximize the motivation and commitment of our team to provide a close, cheerful and caring service, capitalizing on the passion and dedication of our people to constant customer care. To continue to provide a frictionless and safe operation for our em- ployees and our clients, • Safety: Absolute priority in delivering safety at all times. Which involves ensuring the safety of both our clients and our team. Through our role in transportation and connectivity, we seek to become an asset that promotes social, environmental and economic develop- ment in the places where we operate. We work to contribute to our community and environment through collaboration and the creation of long-term ties with the various groups with which we interact. • Comprehensive and personalized experi- ence: To improve the customer experience from flight selection to baggage arrival, emphasizing safety, autonomy and ease at every stage. • Investments in technology and digitization: Committed to excellence, we continue to incorporate technology into key processes of the travel experience. • Reliability: Deliver to all passengers and cargo customers, always and at all times, 100% of the products we promised to deliver. • Development culture: To strengthen or- ganizational health through a culture of learning that encourages the professional and personal growth of our team. • Diversity and inclusion: To build a diverse and inclusive workforce reflecting the plu- rality of the societies in which we operate. • Efficiency in talent management: To im- prove efficiency in hiring and retention, consolidating effective leaders, ensuring pay equity and maintaining high standards of job security. • On-time performance: Taking care of our passengers’ time. We make every effort to ensure that our flights depart and arrive on time at their destinations. • Progress on sustainability issues through work based on the pillars of the long-term sustainability strategy: Environmental Management, Climate Change, Circular Economy and Shared Value. • Proactive risk management: To remain committed to proactive risk management, implementing preventive measures and keeping abreast of best practices. • Relations with suppliers: To maintain a close and effective relation- ship with all our suppliers. DIGITAL INTEGRATION To change the way in which we work to bolster the use of technology, integrating it into all our processes to improve our clients’ experience and be more efficient and streamlined every day. • Continuous innovation: To keep up with the latest technological EFFICIENT PERFORMANCE AND A HEALTHY CAPITAL STRUCTURE trends and exploring new opportunities. To maintain a sound capital structure, ensuring the long-term sus- tainability of the group through a robust financial structure, efficient operations, and sustainable growth. • Security and data protection: To ensure the security and privacy of our clients’ data by implementing robust security measures and complying with relevant regulations. • Operating efficiency: To maintain a competitive and efficient cost to ensure financial sustainability. • Cybersecurity: To constantly strengthen our culture and systems to safeguard the operation in its technological development, with efficient methodologies and infrastructures against risks. • Sound financial indicators: To maintain levels within our financial and liquidity policies. 16 ANNUAL REPORT 202302 —Abaut us —Our strategy SUSTAINABILITY: A NECESSARY DESTINATION NCG 461 4.2 STRATEGIC OBJECTIVES In 2021, the group launched its sustainability strategy, following a series of dialogs between the organization and representatives of its different stakeholders in the five countries where it is present with domestic operations. In this strategy, LATAM group seeks to move forward with challenging commitments, to play an active role in the region, generating economic, en- vironmental and social value. The aspirations and commitments that guide LATAM and its subsidiaries were constructed in line with the Sustainable Development aspirations (SDGs) estab- lished by the United Nations for 2030. On the other hand, progress on the implementation of the sustainability strategy in each of its pillars (Environmental Management, Shared Value, Circular Economy, and Climate Change) is reported regular- ly to the Executive Committee and annually to the Board of Directors. In addition, in each of these pillars, decision-making bodies are developed, involving the executives who lead the respective initiatives. SUSTAINABILITY COMMITMENTS AND GOALS LATAM group seeks to contribute through the following aspirations and commitments: • To maintain and continuously improve the Environmental Manage- ment System in all our operations under the IATA IEnvA standard. • To achieve net zero in Direct emissions (Scope 1), using 2019 as the base year. • To achieve net zero emissions by 2050. • To reduce and/or offset the equivalent of 50% of domestic green- house gas (GHG) emissions by 2030, using 2019 as the base year. • Aim to be a zero-waste-to-landfill group by 2027. • To eliminate single-use plastics throughout the operation by 2023. • To have the connectivity, capacity, and speed of our passenger and cargo operations for the benefit of communities in South America on three fronts: health, environment and natural disasters. LATAM’s sustainability strategy addresses the environmental and social needs of South America. The progress and results achieved in 2023 on the sustainability aspirations are covered in the chapter called “Commitment to Sustainability” (Page 69). 17 ANNUAL REPORT 202302 —Abaut us —Our strategy SUSTAINABLE DEVELOPMENT GOALS NCG 461: 4.2 STRATEGIC OBJECTIVES GRI 2-23 HUMAN RIGHTS NCG 461: 2.1 MISSION, VISION, PURPOSE AND VALUES; 4.2. STRATEGIC OBJECTIVES; 5.5 WORKPLACE LATAM is committed to the Sustainable Development Goals (SDGs) for 2030, established by the United Na- tions in 2015. In fact, it focuses its efforts on nine of them in particular: AND SEXUAL HARASSMENT GRI 2-23 & 3-3 In order to generate social, environmental and eco- nomic value under ethical principles, LATAM group made a public commitment to respect Human Rights in 2018. This document defines the principles that its employees, partners, and third parties must follow, including the rejection of child labor, forced labor and labor similar to slavery or situations of moral, phys- ical and sexual harassment; and the commitment to freedom of association, health and safety, fair remuneration, adequate working conditions without restrictions on gender, race, age, sexual orientation, religion, and nationality. This commitment was designed following interna- tional guidelines, such as the Universal Declaration of Human Rights, the Charter of the United Nations and the Fundamental Principles and Rights at Work of the International Labour Organization (ILO), and it sets forth the envisaged consequences in case of of breaches. In this regard, it should be noted that LATAM has an ethics channel that seeks to detect any violation of human rights, which is available to everyone who in- teracts with the organization, including Board mem- bers, employees and stakeholders. This channel is constantly monitored by the Compliance team and, in the event that a case is confirmed, LATAM applies plans for both the individuals involved and the groups affected, ranging from training, feedback, and sus- pensions, even to contract termination, legal action or other measures that may be applicable. In addition, the company has mitigation measures in place to prevent such situations, as well as for cases where remediation is required, as defined in its in- ternal procedures. In 2023, LATAM received 20 reports of sexual ha- rassment and 64 reports of moral harassment under Chile’s law No. 20,005 and equivalent legislation in foreign jurisdictions where the group operates. All of them followed the corresponding procedure according to the policies of each country. UN Global Compact and Guiding Principles on Human Rights LATAM group adheres to the UN Global Compact, which mobilizes the international business community to adopt, in their business practices, fundamental and internationally accepted values in the arena of human rights, labor relations, environment, and anticorruption. Nonetheless, LATAM does not formally adhere to the United Nations Guiding Principles on Business and Human Rights. MORE INFORMATION Human Rights: • Declaration of Commitment • Risk mitigation actions 18 18 ANNUAL REPORT 202302 —Abaut us —Our strategy BENCHMARKING RESULTS OF THE 2023 CORPORATE SUSTAINABILITY ASSESSMENT LATAM group uses the Standard & Poor’s Global (S&P Global) Corporate Sustain- ability Assessment (CSA) as a manage- ment, measurement and benchmarking tool. Every year, nearly three thousand companies from more than 60 different industries participate in this question- naire, which measures their economic, social and environmental performance under some cross-cutting criteria and others specific to each sector. In addition, the results of the process are the basis of information used by the Dow Jones Sustainability Indexes (DJSI) to determine membership. The 2023 evaluation questionnaire com- pleted by LATAM group considered 26 criteria and 114 sub-criteria correspond- ing to the airline industry. In a year with relevant changes in the requirements, the organization obtained a score that allowed it to be ranked seventh in its industry at a global level and first among Latin American airlines. S&P GLOBAL SUSTAINABILITY YEAR- BOOK 2024 LATAM group was highlighted in the S&P Global Sustainability Yearbook 2024, the prestigious publication that recognized leaders based on their 2023 Corporate Sustainability Assessment (CSA). ECONOMIC DIMENSION AND CORPORATE GOVERNANCE TRANSPARENCY AND REPORTING CORPORATE GOVERNANCE MATERIALITY RISK AND CRISIS MANAGEMENT BUSINESS ETHICS POLITICAL INFLUENCE POLITICAL INFLUENCE INFORMATION SECURITY, CYBERSECURITY, SYSTEM AVAILABILITY 100 44 39 47 70 29 77 23 90 47 70 19 46 14 77 32 LATAM Industry average LATAM Industry average LATAM Industry average LATAM Industry average LATAM Industry average LATAM Industry average LATAM Industry average LATAM Industry average ENVIRONMENTAL DIMENSION ENVIRONMENTAL MANAGEMENT POLICIES AND SYSTEMS EMISSIONS RESOURCE EFFICIENCY AND CIRCULARITY WASTE WATER CLIMATE STRATEGY BIODIVERSITY FOOD LOSS AND WASTE FLEET DECARBONIZATION 45 30 82 42 79 22 96 45 100 28 75 33 14 8 42 14 37 20 LATAM Industry average LATAM Industry average LATAM Industry average LATAM Industry average LATAM Industry average LATAM Industry average LATAM Industry average LATAM Industry average LATAM Industry average SOCIAL DIMENSION IN 2023 LABOR PRACTICE INDICATORS HUMAN RIGHTS HUMAN CAPITAL DEVELOPMENT TALENT ATTRACTION AND RETENTION OCCUPATIONAL HEALTH AND SAFETY PASSENGER SAFETY CUSTOMER RELATIONS MANAGEMENT SUSTAINABLE MARKETING AND BRAND PERCEPTION PRIVACY PROTECTION 90 40 88 23 62 43 60 21 72 38 86 30 83 26 40 14 46 33 LATAM Promedio LATAM Promedio de la industria de la industria LATAM Industry average LATAM Industry average LATAM Industry average LATAM Industry average LATAM Industry average LATAM Industry average LATAM Industry average 19 *Results obtained from the S&P Global CSA platform as at February 29, 2024. ANNUAL REPORT 2023 02 —Abaut us —Value generation model Value generation model • LATAM group makes use of capital of various natures (human, financial, natural, intellectual, social and relational, and industrial) that serve as inputs to carry out its own business. • LATAM group transforms these inputs into results and impacts through its activities. • Materialization of the work: The results are the most visible dimensions of the operation. • The added value of the LATAM group lies in its capacity to generate lasting positive impacts for the business and its stakeholders. INPUTS Human Capital • Employees Financial Capital • Revenues • Capital • Assets Natural Capital • Jet Fuel Intellectual Capital • Knowledge of the region and the business. • Operating licenses and slot rights at airports. • Management Systems (environmental and security). • Analytics (customizing the customer experience). Social and Relational Capital • Frequent Flyer Programs • LATAM brand • Relations with authorities and industry • “Avión Solidario” program Industrial Capital • Fleet • Maintenance Bases • Hangars ACTIVITIES RESULTS IMPACTS • Broad destination network • Customer base diversity • Organizational health and development opportunities • Operational excellence • Financial results What we do and how we do it Governance and Management • Ethics • Financial responsibility • Safety and efficiency • Developing employees Sustainability • Environmental management • Climate change • Circular economy • Shared Value Customer orientation • Digital experience and innovation • Flexible sales model • Trade agreements and partnerships • Loyalty programs Commitment to the region • For LATAM: To be a relevant player in society, and to have an identity and purpose. • For stakeholders: Economic development, social strengthening and environmental care. Strategic dialog • For LATAM: Knowledge sharing, industry development and compliance. • For stakeholders: Joint construction and topics of interest of the various audiences. Customer-centric value proposition • For LATAM: Different customer profiles and segments, as well as revenue diversification. • For stakeholders: Offering adjusted to different needs and expectations, as well as autonomy and freedom of choice. Connectivity • For LATAM: Market share and leadership in the region. • For stakeholders: Mobility and economic momentum. Safety • For LATAM: reliability • For stakeholders: trust Eco-efficiency • For LATAM: Competitive edge and cost reduction. • For stakeholders: Natural resource economy, and less environmental and noise impact. 2020 ANNUAL REPORT 2023Timeline NCG 461: 2.2 HISTORICAL INFORMATION LATAM group’s history began in 1929 with the emergence of Línea Aérea Nacional de Chile (LAN). Later, in 1946, it made its first international expansion through a trip that included the Santiago (Chile) - Buenos Aires (Argentina) route. Subsequently, routes to Lima (Peru), Miami (United States) and later to Europe were added. In 1983, Línea Aérea Nacional Chile Limitada was incorporated by Corporación de Fomento a la Producción (CORFO) which, in 1985, became a corporation under the name of LAN Chile. In 1989, the privatization process began. In 1997, on its growth path, this airline began trading on the New York Stock Exchange (NYSE), trading American Depositary Receipts (ADRs). Thus, it became the first Latin American airline company to achieve this milestone. In 2012, following the association with Brazilian company TAM, which was created in 1961, LAN changed its name to LATAM Airlines Group S.A., consolidating its expansion on a regional level. In 2020, the LATAM group experienced one of the most chal- lenging periods in its history with the COVID-19 pandemic, which affected all its operations; this meant that the subsidiaries in Brazil, Chile, Colombia, Ecuador, the United States and Peru had to file for Chapter 11 of the US Bankruptcy Code. In November 2022, LATAM and its subsidiaries successfully completed their restructuring process, managing to restructure their debt and raise funding to prepare for a new stage in their history. Finally, during 2023, the LATAM group strengthened its oper- ations after its exit from Chapter 11, proving clarity in both its strategic and financial objectives. In addition, it reached the one-year mark since the start of its joint venture with Delta Air Lines, which applies to eight markets in North and South America (Brazil, Canada, Chile, Colombia, the United States, Paraguay, Peru and Uruguay). 21 02 —Abaut us —Timeline Important LATAM group milestones since 1929 LAN’s first international flight: the route was Santiago (Chile) – Buenos Aires (Argentina). LAN begins operations to Miami (United States). 19471947 19581958 LAN begins to offer flights to Europe. 19701970 Beginning of TAM services in Brazilian cities, especially in Mato Grosso and São Paulo. 19761976 19561956 Inauguration of travel to Lima by LAN (Peru). 19611961 Creation of Taxi Aéreo Marília (TAM), by five charter flight pilots. 19751975 Establishment of TAM Transportes Aéreos Regionais by Captain Rolim Adolfo Amaro. LAN becomes a corporation (LAN Chile). 19851985 The privatization process of LAN Chile is carried out: The Chilean government sells 51% of its equity to domestic investors and to Scandinavian Airlines System (SAS). 19891989 TAM establishes TAM Fidelidade, the first frequent flyer program in Brazil. 19931993 TAM buys airline Lapsa from the Paraguayan government and creates TAM Mercosur. Along this line, the São Paulo (Brazil) - Asunción (Paraguay) route begins. 19961996 19861986 TAM acquires VOTEC (Brasil Central Linhas Aéreas), another regional airline operating in the northern and central sectors of Brazil. 19901990 VOTEC is renamed Transportes Aéreos Meridionais (TAM). 19941994 The privatization process of LAN Chile ends with the acquisition of 98.7% of the company’s stock by the current controllers and other shareholders. 19291929 Establishment of LAN Establishment of LAN Línea Aérea Nacional Línea Aérea Nacional de Chile (LAN) by de Chile (LAN) by Commander Arturo Commander Arturo Merino Benitez. Merino Benitez. 19831983 Incorporation of Línea Aérea Nacional Chile Limitada through CORFO. ANNUAL REPORT 202302 —Abaut us —Timeline The first Airbus A330 arrives and TAM performs its first international flight from São Paulo (Brazil) a Miami (United States). LAN Chile joins oneworld®, an alliance of fourteen commercial airlines. 19981998 2000 2000 LAN Chile’s alliance with Qantas and Lufthansa Cargo. 20022002 Corporate Image Change: LAN Chile becomes LAN Airlines, which launches the new business class for flights to Paris (France) and Miami (United States). Meanwhile, TAM begins to fly to Santiago (Chile). TAM starts flying to London (United Kingdom), Zurich and Geneva (Switzerland) through an agreement with Air France. It also launches the new “Premium Business” class and is publicly listed on the New York Stock Exchange (NYSE). 2004 2004 2006 2006 19971997 LAN Chile publicly lists its shares on the New York Stock Exchange (NYSE), becoming the first Latin American airline to trade American Depositary Receipts (ADRs). 19991999 LAN Chile’s expansion process begins: start of LAN Peru. 2001 2001 LAN Chile’s alliance with Iberia and inauguration of the Cargo terminal in Miami (United States). Likewise, TAM opens the Technology Center and Service Academy in São Paulo (Brazil). 20032003 LAN Chile’s expansion process continues: start of LAN Ecuador. 2005 2005 Progress in LAN Airlines’ regional expansion plan: start of LAN Argentina. Meanwhile, TAM is publicly listed on the São Paulo Stock Exchange (Bovespa) and announces flights to New York (United States) and Buenos Aires (Argentina). TAM completes the short- haul fleet renewal process, consisting of A320-family aircraft and receives the first Boeing 777-300ER. LAN Airlines acquires Colombian airline Aires and TAM officially joins Star Alliance, the airline alliance founded in 1997. LATAM Airlines Group S.A. is born from the association of LAN Airlines and TAM. Here, there is an issuance of 2.9 million shares. TAM joins oneworld®, making oneworld® the global alliance for LATAM Airlines Group. Capital increase of US$608 million, with which Qatar Airways acquires 9.999999918% of LATAM’s total subscribed and paid-in shares. 2008 2008 20102010 20122012 20142014 20162016 20072007 2009 2009 20112011 TAM launches the Milan (Italy) and Cordoba (Spain) route. In addition, Brazil’s National Civil Aviation Agency (ANAC, for its Portuguese acronym) authorizes TAM to begin flights to Madrid (Spain) and Frankfurt (Germany). Meanwhile, LAN Airlines implements the Low Cost model in domestic markets and receives a capital increase of ThUSD$320,000. 22 Start of cargo operations in Colombia and passenger operations in the domestic market in Ecuador. In addition, TAM launches the “Multiplus” miles program. LAN Airlines and TAM sign binding agreements for the partnership between the two airlines. 20132013 LATAM makes a capital increase of USD$940.5 million. 20152015 LATAM begins its “Strategic Plan 2015– 2018”, focused on becoming one of the most important airline groups in the world. ANNUAL REPORT 202302 —Abaut us —Timeline Implementation of the new business model in domestic markets by subsidiaries. Announcement of strategic agreement with Delta Air Lines to provide more and better options to passengers through a complementary network of connections between Latin and North America. In turn, LATAM announces its exit from the oneworld® alliance as of May 1, 2020, to begin offering miles/benefits with airlines that have some type of partnership. Launch of the new Sustainability Strategy and LATAM makes public its five-year business plan (2022-2027), and presents its reorganization plan under Chapter 11 of the US Bankruptcy Law. 20172017 20192019 20212021 20182018 20202020 20222022 The joint venture between LATAM and Delta Air Lines, between North America (United States/ Canada) and South America, reaches the one- year mark. In turn, LATAM is making progress on the implementation of its sustainability commitments with a 96% reduction of single-use plastics, equivalent to more than 1,700 tons. 20232023 Inauguration of the first flight to Asia (Tel Aviv, Israel) and a new sales model reaches international flights. LATAM and its subsidiaries in Brazil, Chile, Colombia, Ecuador, Peru and the United States enter the financial reorganization process under Chapter 11 of the US Bankruptcy Act and obtain access to up to USD$2.45 billion in debtor-in-possession (DIP) financing. Moreover, the E-Business unit launched, with the aim of improving the digital customer experience. In addition, initiatives are developed to support the fight against COVID-19 in South America. LATAM group and its subsidiaries successfully exit Chapter 11 of the US Bankruptcy Law. On the other hand, the joint venture with Delta Air Lines, which applies to the markets of Brazil, Canada, Chile, Colombia, the United States, Paraguay, Peru and Uruguay, is approved. 23 ANNUAL REPORT 202302 —Abaut us —Awards and recognitions ONBOARD HOSPITALITY AWARDS WORLD TRAVEL AWARDS 2023 THE SUSTAINABILITY YEARBOOK 2024 LATAM was recognized in the Sustainability category of the Onboard Hospitality Awards 2023, for three of its circular economy projects implemented in its in-flight service. World Travel Awards recognized LATAM group for the eighth consecutive year in the “Leading Airline in South America” category. Likewise, it was awarded in the “Best Airline Application in Latin America” and “Best Airline Website in Latin America” categories, too. AIR CARGO INNOVATION AWARD - INTERNA- TIONAL AIR TRANSPORT ASSOCIATION (IATA) FREQUENT TRAVELER AWARD LATAM group’s cargo subsidiaries received this award from IATA for their plastic reduction projects in their Chilean and Brazilian operations. WORLD AIRLINE AWARDS | SKYTRAX The Skytrax World Airline Awards, which is considered the airline industry’s most important award, named LATAM the “Best Airline in South America” for the fourth consecutive year. In addition, LATAM was recog- nized for the second consecutive year in the category of “Best Airline Staff in South America” and was also awarded for “Best Business Cabin in South America”, “Best Economy Cabin in South America” and “Best Business Class VIP Lounge in South America”. APEX PASSENGER CHOICE AWARDS APEX recognized LATAM for the second consecutive year with the highest rating in the global airline cate- gory. In particular, it was recognized in the Passenger Choice Awards (PCAs), which is based on customer voting among more than 600 airlines worldwide, for having the “Best Seat Comfort” and “Best Catering” in South America. For the eighth consecutive year, the World Travel Awards recognized LATAM group in the “Leading Airline in South America” category. It also won in the cate- gories of “Best Airline Application in Latin America” and “Best Airline Website in Latin America”. SUSTAINABILITY AWARD | THE INTERNA- TIONAL AIR CARGO ASSOCIATION (TIACA) LATAM Cargo was recognized in the fifth edition of the Air Cargo Sustainability Award presented by The International Air Cargo Association (TIACA), for the initiatives of the LATAM group’s sustainability strategy. RESILIENT BRANDING | CADEM CITIZEN BRANDS After facing and successfully overcoming the worst crisis in its history due to the Covid-19 pandemic, LATAM Airlines Group was awarded as “Resilient Cit- izen Brand” in the 13th edition of CADEM’s “Citizen Brands” study. | S&P GLOBAL LATAM’s results in the Corporate Sustainability As- sessment (CSA) ranked it seventh in the global airline industry and first in Latin America. In addition, its performance was recognized by S&P Global’s Sustain- ability Yearbook, which highlights leading companies for the sustainability practices and transparency in their businesses. For the fourth consecutive year, LATAM was recognized with the World Airline Award from Skytrax as “Best Airline in South America” Awards and recognitions 24 24 ANNUAL REPORT 2023 03 Operations In this chapter 26 Passenger operations 28 Cargo operations 30 Fleet Passenger operation 26 03 —Operations —Passenger operation GRI 3-3, 2-1 & 2-6 By December 2023, LATAM group had increased the number of passengers transported by 18.3% compared to the previous year, approaching 74 million passen- gers transported, a figure similar to the pre-pandemic levels. In fact, the group’s capacity in this segment, which is measured in ASK (available seat-kilometer), increased from 113,852,000 in 2022 to 137,251,000 at the end of last year, translating into 20.6% growth. In addition, the LATAM group closed last year operating a total of 148 destinations in 26 countries. In detail, in domestic markets, the passenger oper- ations of LATAM affiliates in Brazil, Chile, Colombia, Ecuador and Peru reached a size above that of 2022 in terms of capacity. Along these lines, in 2023, LATAM Airlines Chile averaged 149.8 flights per day, while LATAM Airlines Brazil averaged 675.1 flights per day. Meanwhile, the combined operations of LATAM Airlines Colombia, LATAM Airlines Ecuador and LATAM Airlines Peru recorded an average of 210.2 flights per day. On the other hand, LATAM Airlines Brazil operated 9.5% more capacity (ASK) in 2023 compare to the previous year, covering a total of 66 destinations. In fact, a total of 12.9 million passengers were trans- ported within Brazil. In turn, passenger demand in “Spanish-speaking countries” (SSC), measured in RPK (revenue passenger-kilometer), grew by 8.1% during 2023, while supply, which is measured in ASK, increased 6.8% and the load factor reached 82%, one percentage point higher than in 2022. It is worth mentioning that the passenger operations of LATAM group subsidiaries at the domestic level cover a total of 110 destinations and that, during 2023, 61 million passengers were transported—i.e., 12.9% more than in the previous year. On the other hand, in the international market, which considers flights within the Americas (North America, and Latin America and the Caribbean) and to three other continents (Africa, Europe and Oceania), the offer for passengers by LATAM group (ASK) increased by 36.2% in 2023 compared to 2022, while passenger demand (RPK) rose by 39.4% during the same period. In this scenario, a total of 13 million passengers flew with LATAM group to international destinations during 2023 and the load factor was 84.9%, 1.9 percentage points above the level recorded in 2022. STRATEGIC AGREEMENT LATAM completed one year of implementation of the joint venture with Delta Air Lines, which has enabled the launch of six new routes, approximately 15,000 flights, more than three million passengers transported and more than 90 million kilometers flown. In fact, Miami, LATAM group’s main hub in the United States, has seen a 10% increase in capacity, expanding con- nection opportunities to 11 of the cities Delta serves. New routes Of the six new routes, four are operated by LATAM Airlines Group S.A.: Atlanta, USA - Lima, Peru; Bogota, Colombia - Orlando, USA; Medellin, Colombia - Miami, USA; and São Paulo/Guarulhos, Brazil - Los Angeles, USA. Two others are operated by Delta Air Lines: At- lanta, USA - Cartagena de Indias, Colombia; and Rio de Janeiro/Galeão - New York/John F. Kennedy, USA. During 2024, LATAM and its affiliates with Delta Air Lines will seek to open more new routes to connect more and more passengers between South America and North America. PROGRESS ON THE JOINT VENTURE WITH DELTA AIR LINES SINCE ITS BEGINNING (2022) 6 operational routes 4 routes operated by LATAM Airlines Group S.A. 2 routes operated by Delta Air Lines 15,000 flights 3,000,000 + passengers transported 90 million + km traveled equivalent to the distance between Earth and Mars ANNUAL REPORT 202303 —Operations —Passenger operation LATAM group’s passenger operations in 2023 NCG 461: 6.1 INDUSTRIAL SECTOR BRAZIL CHILE COLOMBIA ECUADOR PERU 52 Destinations 16 Destinations 18 Destinations 7 Destinations 19 Destinations 39% 61% 32% 44% 63% Domestic market share Domestic market share Domestic market share Domestic market share Domestic market share Main competitors Gol and Azul Main competitors Sky Airlines and JetSmart Main competitors Avianca, EasyFly, Satena and Wingo (Copa Airlines Colombia) Main competitors Avianca Main competitors Sky Airlines Perú, JetSmart Perú and Star Perú Source: ANAC website (Brazil) and market share considers RPKs as at December 2023. Source: JAC website (Chile) and market share considers RPKs as at December 2023. Source: DGAC website (Peru) and market share considers the number of passengers as at December 2023. Source: Diio.net. webiste (Colombia and Ecuador) and market considers ASK as at December 2023. . l i z a r B , o a h n a r a M s a h n i r i e r r a B k r a p l a n o i t a N 272727 74 million passengers Consolidated traffic (RPK): 114,007,000 Capacity (ASK): 137,251,000 Load factor: 83.1% 148 LATAM group destinations North America: 8 South America: 128 Europe: 8 Asia and Australasia: 3 Africa: 1 346 codeshare destinations North America: 112 South America: 62 Europe: 94 Asia: 41 Australasia: 18 Africa: 19 ANNUAL REPORT 2023 Cargo operation 28 03 —Operations —Cargo operation GRI 2-6, 3-3 & 203-2 The group’s cargo operations stand out for their high transportation capacity, extensive connectivity and expertise in the handling of cargo transported to, from and within South America. Within it, the main exports include flowers, fish and fruit, and imports include technological products, critical spare parts and pharmaceutical products, among others. The figures provided by WorldACD—a Dutch global benchmark in cargo market data—indicate that, in 2023, the LATAM Cargo group transported 45% of the fish ex- ported from Chile, 40% of the perishables from Peru, such as asparagus, fish and fruit, and 88% of the fish and 16% of the fruit exported by Brazil. Likewise, in the flower export market, it transported 40% of the cargo from Colombia to North America and 65% from Ecuador, standing as the leader in the transportation of flowers from both countries. In absolute terms, throughout 2023, 945,500 tons of cargo were transported, translating into an increase of 4.9% compared to the figure from 2022. In terms of contribution, cargo operations represent 13% of the LATAM group’s consolidated revenues. Last year, freight revenues decreased by 17% in the period compared to 2022. Meanwhile, revenue per ATK (available ton-kilometers) decreased by 28%, influenced by a 21.3% reduction in yield. The latter was the result of a combination of a normalization of demand after the peak produced by the pandemic and the recovery of belly capacity (transport in the hold of passenger aircraft) at the industrial level. On the other hand, load factor was 51.7%, while cargo capacity increased by 15 as a result of the progress made in the three-year cargo fleet expansion plan, which began in 2021. This growth plan is consistent with the group’s long- term strategy of expanding the Boeing 767-300 freighter fleet to between 19 and 21 aircraft. In view of the speedy recovery of belly capacity, the group opted for a fleet of 19 of these aircraft, which are the ideal model to operate in the region thanks to their efficiency, versatility and size. This plan includes the staggered replacement of some of the older freighters, which is why by the end of 2023, the fleet included 20 Boeing 767-300F/BCF aircraft. With this progress, LATAM Cargo achieved a growth of more than 70% in its cargo capacity compared to 2019. In addition, during 2023, LATAM group’s cargo airlines developed new routes and worked to strengthen their value proposition, diversify their revenues and increase their productivity. In this sense, last year the company continued to make progress on the imple- mentation of the new technological system, which had been implemented in international operations in 2022, now adding domestic cargo operations in Brazil. The system will provide clients with more and better information about their cargo, deliver a more efficient service and a better user experience, as all shipment data—from quote to payment—is integrated into a single end-to-end platform. It also strengthened its long-standing partnerships with Webcargo and cargo. one, two digital marketplaces specializing in interna- tional cargo transportation. The cargo airlines of LATAM group are key players in the local supply chain and the export industry. CARGO CUSTOMER SATISFACTION The LATAM Cargo group’s efforts in the design and execution of its value proposition were reflected in the evolution of the Net Promoter Score (NPS), a metric used in customer experience programs, reaching 58 points in 2023. This figure represents a seven-point uptick over 2022 and was the best in the history of the cargo business since the measurement began in 2016. 30 points 2021 51 points 2022 58 points 2023 ANNUAL REPORT 202303 —Operations —Cargo operation 33 Countries 166 Destinations 7 exclusively for cargo Belgium, El Salvador, Guatemala, Guyana, Honduras, Netherlands and Panama. vs. 3 in 2022 18 exclusively cargo hubs Amsterdam, Netherlands; Brussels and Liege, Belgium; Chicago, Huntsville and Houston, United States; Cabo Frio, Campinas and São José dos Campos, Brazil; Ciudad del Este, Paraguay; Guatemala City, Guatemala; Panama City, Panama; Santo Domingo, Dominican Republic; San Salvador, El Salvador; San Pedro Sula, Honduras; Santa Lucia, Mexico; Timehri, Guyana; and Zaragoza, Spain. vs. 10 in 2022 Tons of cargo transported Cargo capacity (ATK) 945,500 in 2023 7,171 million ATK in 2023 900,600 in 2022 6,256 million ATK in 2022 801,500 in 2021 4,788 million ATK in 2021 SUPPORT TO EXPORT INDUSTRIES IN SOUTH AMERICA Market share by country GRI 203-2 BRAZIL CHILE COLOMBIA ECUADOR PERU 88% of fish and 16% of fruit 45% of fish 40% of flowers 65% of flowers Source: WorldACD, considering subsidiaries Absa, Lanco and LATAM Cargo. 40% of perishable products, such as asparagus, fish and fruit 29 CERTIFICATIONS Since 2022, and being the first in the world to obtain it, the cargo airlines of LATAM group have the certification Center of Excellence for Independent Validators (CEIV) of lithium batteries certification from the International Air Transport Association (IATA), aimed at improving safety in the handling and transportation of lithium batteries throughout the sup- ply chain. This is because these batteries, whether alone or inside finished products, pose a risk due to their high level of combustion, and their transportation must comply with global safety standards covering the manufacturing process, testing, packaging, branding, labeling, and documentation included. Along these lines, the LATAM Cargo group quickly passed the audit process, thus confirming the quality of its risk control and mitigation processes, which also extends to passenger operations, as all LATAM group transports follow the same processes and protocols. Likewise, since 2017, the group has also held IATA’s CEIV Pharma certification, which guarantees compliance with safeguarding the integrity of pharmaceutical products requiring a certain temperature until their final destination. The certification was fundamental to the support that LATAM provided at the time to countries with the mass transportation of COVID-19 vaccines. In 2023, LATAM Cargo received two prestigious sustainability awards. The first, the IATA Innovation Award, was given in recognition of its Circular Economy initiatives aimed at re- ducing the use of plastic in its operations. The company also received the Air Cargo Sustainability Award from TIACA, a leading organization in the air cargo industry. This recognition was attributed to the LATAM group’s sustainability strategy and the progress made by the cargo subsidiaries within the three fundamental pillars of this strategy. ANNUAL REPORT 2023Fleet 30 30 aircraft received in 2023 5 Wide-body 25 Narrow-body 03 —Operations —Fleet GRI 3-3 SASB TR-AL-000.F As of December 31, 2023, the LATAM group’s total fleet consists of 333 aircraft with an average age of 11.48 years. In this regard, the long-haul international operation has 57 wide-body aircraft, all Boeing, (Models 767, 777, and 787 Dreamliner versions 8 and 9), world- wide benchmarks for fuel efficiency and reduction of greenhouse gas (GHG) emissions and noise. Meanwhile, the fleet dedicated to domestic and regional opera- tions in South America consists of 256 narrow-body Airbus aircraft (models A319, A320, A321, A320neo and A321neo). We should note that “neo” aircrafts use more efficient engines and feature aerodynamic improvements and the latest technologies, which provide 20% more fuel efficiency and improvements in related carbon emissions. On the other hand, LATAM group’s operating cargo fleet totaled 20 Boeing 767F and Boeing 767BCF aircraft by 2023. In fact, since 2021, the group has been making progress on its plan to expand its cargo fleet through the conversion of 10 passenger aircraft to freighters. Along these lines, throughout 2023, four Boeing 767 passenger planes converted for the cargo operation arrived, thus completing its fleet growth plan announced in 2021, and achieving an increase of more than 70% of its cargo capacity, compared to 2019. As for 2024, the group will continue to make progress in expanding its fleet. MAINTENANCE Aircraft maintenance, planning, and return activities in compliance with the fleet plan are carried out at the LA- TAM group’s Maintenance, Repair, and Operation (MRO) bases in Brazil and Chile. Likewise, the units perform contingent maintenance services for third parties. In Brazil, there are two bases: one is located in São Carlos and has capacity for nine narrow-body or wide- body aircraft, while the other is in Guarulhos and has capacity for LG and check C replacements for B777 and 24M for the narrow-body fleet, 1 service line. In Chile, it is located in Santiago and can simultaneously service two narrow-body and one wide-body aircraft, and in Lima (Peru), 24M narrow-body aircraft are ser- viced with one production line. During 2023, the four bases were responsible for 186 maintenance services, representing 89% of total fleet maintenance and a total of 1.5 million man-hours worked. In turn, the rest of the aircraft were serviced by external vendors. On the other hand, line maintenance (minor, pre- ventive and corrective tasks) is distributed across different LATAM group hangars located in Congonhas and Guarulhos/São Paulo (Brazil); Santiago (Chile); Bogotá (Colombia); Quito (Ecuador); Miami (United States) and Lima (Peru), among others. This network offers various automated and integrated services that ensure compliance with all safety requirements and with local and international regulations. However, it should be noted that, in terms of mainte- nance, the LATAM group also invests in the replace- ment of engines with more modern and fuel-efficient models, thus contributing significantly to the reduction of the fleet’s carbon footprint and the promotion of more sustainable practices in the aviation industry. Along this line, it has modified the Serial System Controllers of the Auxiliary Power Units (APU SSC) of the A320-200 aircraft for the APU 131-9A, which is configured to reduce fuel consumption. In fact, the savings are approximately 2.5% per year. ANNUAL REPORT 202303 —Operations —Fleet 333 is the total number of aircraft in the LATAM group’s fleet in 2023 OPERATING FLEET AT DECEMBER 31, 2023 AIRCRAFT ON RIGHT OF USE UNDER IFRS16 AIRCRAFT ON PROPERTY, PLANT & EQUIPMENT TOTAL Passenger fleet1 Airbus A319-100 Airbus A320-200 Airbus A320neo Airbus A321-200 Airbus A321neo Boeing 767-300ER Boeing 777-300ER Boeing 787-8 Boeing 787-9 Total Cargo Fleet Boeing 767-300F Total Total fleet 1 46 23 30 7 0 6 6 24 143 1 1 144 392 903 1 19 0 11 4 4 2 170 194 19 189 40 136 24 49 7 11 10 10 26 313 20 20 333 1 All passenger aircraft bellies are available for cargo. 2 Includes 28 Airbus A319-100 aircraft classified as non-current assets and available for sale. 3 Includes 7 Airbus A320-200 aircraft classified as non-current assets and available for sale. 4 Includes 3 Boeing B767-300 Freighter aircraft classified as non-current assets and available for sale. For more information 2,3 and 4, see the Consolidated and Audited Financial Statements. 31 LENGTH (M) WINGSPAN (M) SEATS CRUISE MAXIMUM TAKE- OFF WEIGHT (KG) SPEED (KM/H) Passenger Operation – short haul/narrow-body fleet Airbus A319-100 Airbus A320-200 Airbus A320 -200neo Airbus A321-200 Airbus A321- neo 33.8 37.6 37.7 44.5 44.5 Passenger operation – long haul /wide-body fleet Boeing 767 -300ER Boeing 777 -300ER Boeing 787-8 Boeing 787-9 Cargo operations 54.9 73.9 56.7 62.8 34.1 34.2 34.3 34.4 35.8 47.6 64.8 60.2 60.3 144 180 180 224 224 233 410 247 300 830 830 830 830 800 851 894 903 903 70,000 70,000 70,000 89,000 93,500 186,880 346,500 227,900 252,650 Boeing 767 – 300F 54.9 47.6 N/A 851 186,880 SNAPSHOT Passenger operation SASB TR-AL-000.A, TR-AL-000.B, TR-AL-000.C, TR-AL-000.E UNIT 2021 2022 2023 Capacity (ASK) Revenue passenger-kilometer (RPK) Load factor (ASK) Revenues/ASK Total PAX transported Passenger flights per year Cargo operations SASB TR-AL-000.D Capacity Revenue tons-kilometer Load factor Revenues/ATK Tons transported RTK: revenue ton-kilometers ATK: Available ton-kilometers ASK- million million % USD$ cents thousands N/A ATK- million RTK- million ATK(%) USD$ cents thousands 67,636 50,317 74.40% 4.9 40,195 N/A 4,788 3,035 63.4% 32.2 801.5 N/A: Not applicable N/A: Not Available 113,852 92,588 81.3% 6.7 62,467 439,309 6,256 3,532 56.5% 27.6 900.6 137,251 114,007 83.1% 7.4 73,898 522,558 7,171 3,704 51.7% 19.9 945.5 ANNUAL REPORT 2023 04 Corporate Governance In this chapter 33 47 Ownership structure Corporate Guidelines 36 49 Corporate Governance Stakeholder Engagement 39 51 Decision- makers Financial policies 43 Organizational chart 04 —Corporate Governance —Ownership structure NCG 461: 2.3.1 CONTROL SITUATION, 2.3.4 STOCKS, THEIR CHARACTERISTICS AND RIGHTS AND 2.3.5 OTHER SECURITIES LATAM needs to maintain a suitable level of capitalization to ensure safe access to financial markets, and thus, to develop its medium- and long-term goals, op- timizing returns to its shareholders and maintaining a sound financial position. On the other hand, LATAM’s Extraordinary Shareholders’ Meeting held on April 20, 2023, agreed to reduce capital by USD$7,501,895,316.23 through the absorption of the total net accumulated losses as at December 31, 2022. Thus, by December 31, 2023, LATAM’s statutory capital is represented by 604,441,789,335 shares, all issued, common, and without par value. Of this amount, at that time, 604,437,877,587 shares had been subscribed and paid up. Meanwhile, the group’s paid-in capital at December 31, 2023 totaled ThUSD$5,003,534 divid- ed among 604,437,877,587 shares from the same and only nominative, ordinary series, without par value. A year earlier, that is, at December 31, 2022, the paid-in capital was ThUSD$13,298,486 divided among 604,437,584,048 shares, also from the same and only nominative, ordinary series, without par value. We should note that there are no special series of shares, nor preferences. Thus, the form of the stock certificates, their issuance, exchange, disablement, loss, replacement, and any other circumstance, as well as the transfer of shares, are ruled by the provisions included in the Chilean Corporations Act (“LSA”, for its Spanish acronym) and its Regulations. At December 31, 2023, the group has no controlling shareholder and the total number of registered shareholders is 2,100. Ownership structure . e l i h C , a u c s a P e d a l s I 33 ANNUAL REPORT 2023 04 —Corporate Governance —Ownership structure SHAREHOLDER STRUCTURE NCG 461: 2.3.2 MAJOR CHANGES IN OWNERSHIP OR CONTROL, 2.3.3 IDENTIFICATION OF MAJORITY PARTNERS OR SHAREHOLDERS AND 2.3.5 OTHER SECURITIES 2023 2022 TOTAL SHARES % TOTAL SHARES % 2023 2022 Sixth Street Partners Management Company Strategic Value Partners Delta Air Lines, Inc Qatar Airways Investments (UK) LTD Cueto Group AFP ADR Others Total 168,669,825,995 96,815,692,279 60,722,284,826 60,640,769,249 30,389,556,225 13,511,737,270 86,064,978 173,601,946,765 604,437,877,587 27.91% 16.02% 10.05% 168,669,825,995 96,815,692,279 60,722.284,826 10.03% 5.03% 2.24% 0.01% 28.72% 100.00% 60,640,769,249 30,389,556,225 6,534,051,959 86,064,978 180,579,338,537 604,437,584,048 27.91% 16.02% 10.05% 10.03% 5.03% 1.08% 0.01% 29.88% 100.00% BOARD MEMBERS’ AND MAIN EXECUTIVES’ STAKES NCG 461: 3.4.IV SENIOR EXECUTIVES As in 2022, Ignacio Cueto (Chairman of the BOD of LATAM), Enrique Cueto (member of the BOD at LATAM), and certain other Cueto family members and entities controlled by them, comprise the Cueto Group. Along these lines, by December 31, 2023, the Cueto group’s shareholding stands at 5.03% of the shares the same percentage as in the previous year. And just as at the end of the previous year, there are no other Directors or senior executives of the Company who have an ownership stake in the issuer. 34 0.01% 86,064,978 ADR 27.91% 168,669,825,995 Sixth Street Partners Management Company 29.88% 180,579,338,537 Others 0.01% 86,064,978 ADR 27.91% 168,669,825,995 Sixth Street Partners Management Company 16.02% 96,815,692,279 Strategic Value Partners 10.05% 60,722,284,826 Delta Air Lines, Inc 1.08% 6,534,051,959 AFP 5.03% 30,389,556,225 Cueto Group 16.02% 96,815,692,279 Strategic Value Partners 10.05% 60,722,284,826 Delta Air Lines, Inc 10.03% 60,640,769,249 Qatar Airways Investments (UK) LTD 28.72% 173,601,946,765 Others 2.24% 13,511,737,270 AFP 5.03% 30,389,556,225 Cueto Group 10.03% 60,640,769,249 Qatar Airways Investments (UK) LTD CHANGES IN OWNERSHIP NCG 461: 2.3.4 STOCKS, THEIR CHARACTERISTICS AND RIGHTS Over the last three years, the only significant changes in the percentage of ownership held by any of LATAM’s current ma- jor shareholders (with more than 5% ownership) have been represented by (i) a decrease in the Cueto group’s ownership from 16.39% by February 28, 2022 to 5.03% by December 31, 2023, (ii) a decrease in Delta Airlines’ ownership from 20.00% by February 28, 2022 to 10.05% by December 31, 2023, and (iii) a decrease in Sculptor Capital’s ownership from 6.52% by January 31, 2023 to 2.48% by December 31, 2023. ANNUAL REPORT 2023 04 —Corporate Governance —Ownership structure MAIN SHAREHOLDERS NCG 461: 2.3.2 MAJOR CHANGES IN OWNERSHIP OR CONTROL, 2.3.3 IDENTIFICATION OF MAJORITY PARTNERS OR SHAREHOLDERS, 2.3.4 STOCKS, THEIR CHARACTERISTICS AND RIGHTS AND 2.3.5 OTHER SECURITIES AT DECEMBER 31, 2023 NAME RUT SHARES SUBSCRIBED AND PAID % NAME RUT SHARES SUBSCRIBED AND PAID AT DECEMBER 31, 2022 Banco de Chile por cuenta de State Street Banco de Chile por cuenta de terceros no residentes Delta Air Lines, Inc Qatar Airways Investments (UK) Ltd Banco Santander por cuenta de inv extranjeros Costa Verde Aeronautica S.A. Banco Santander Chile Larrain Vial S.A. Corredora de Bolsa Costa Verde Inversiones Financieras S.A. Banchile Corredores De Bolsa S.A. Banco de Chile por cuenta de Citi Na New York Clie AFP Habitat S.A. Fondo Tipo C 97.004.000-5 97.004.000-5 59.288.750-9 59.222.850-5 97.036.000-K 81.062.300-4 97.036.000-K 80.537.000-9 76.183.853-9 96.571.220-8 97.004.000-5 98.000.100-8 277,500,905,697 70,343,556,555 60,722,284,826 60,640,769,249 25,550,380,291 23,789,209,717 15,382,571,149 7,394,408,211 6,592,460,617 5,240,203,041 4,407,844,262 2,232,103,282 45.81 11.94 10.05 10.03 3.94 3.94 3.02 1.19 1.09 0.82 0.73 0.41 Banco de Chile por cuenta de State Street Banco de Chile por cuenta de terceros no residentes Delta Air Lines, Inc Qatar Airways Investments (UK) Ltd Banco Santander Chile Costa Verde Aeronáutica S.A. Banco Santander por cuenta de inversionistas extranjeros Larrain Vial S.A. Corredora de Bolsa Costa Verde Inversiones Financieras Banchile Corredores de Bolsa Cia de seguros de vida Consorcio Nacional de Seguros S.A. AFP Cuprum S.A. para fondo de pensión C 97.004.000-5 97.004.000-5 59.288.750-9 59.222.850-5 97.036.000-K 81.062.300-4 97.036.000-K 80.537.000-9 76.183.853-9 96.571.220-8 99.012.000-5 76.240.079-0 284,198,481,733 76,741,518,770 60,722,284,826 60,640,769,249 41,104,259,947 23,789,209,717 13,371,541,340 9,678,756,864 6,592,460,617 2,604,713,175 2,328,707,088 2,248,823,180 % 47.02 12.70 10.05 10.03 6.80 3.94 2.21 1.60 1.09 0.43 0.39 0.37 DIVIDENDS NCG 461: 2.3.4 STOCKS, THEIR CHARACTERISTICS AND RIGHTS Pursuant to the LSA and, provided that no financial losses are recorded for balances carried forward from past financial years, LATAM must distribute cash dividends equivalent to at least 30% of the prior year’s net profit corresponding to the consolidated annual net income calculated in accordance with International Financial Reporting Standards (IFRS), subject to the terms of Circular No. 856 issued on October 17, 2014 by the CMF, Chile, subject to limited exceptions. for that year, although it is not legally obligated, LATAM may choose to distribute dividends out of its retained earnings. Moreover, as long as there are no accrued losses from previous years, the Board of Directors, under the personal responsibil- ity of the members attending the respective resolution, may agree to distribute interim dividends during the year out of the profits generated during the year. Notwithstanding the above, if according to the balance sheet up to December 31 of the previous year there are no net profits Pursuant to LATAM’s bylaws, the annual cash dividend must be approved by the shareholders at an ordinary shareholders’ meeting to be held within the first four months of the year immediately following the year out of which the dividend is to be paid. It should be noted that all common shares outstanding are entitled to an equitable share in the dividends declared by LATAM, except for shares that have not been fully paid up by the shareholder after subscription. This policy is intended to be maintained for the next two years. The gain for fiscal year 2022 of USD$1,339,210 was entirely used to absorb the accrued losses recorded, which totaled USD$8,841,106. Therefore, there was no payment of dividends, in accordance with current legislation. 35 MORE INFORMATION Shareholders’ Agreement (Page 128). ANNUAL REPORT 2023 04 —Corporate Governance —Corporate Governance Composition of the Board of Directors NCG 461 3.2 BOARD OF DIRECTORS GRI 2-9, 2-10, 2-11 IGNACIO CUETO CHAIRMAN* RUT: 7.040.324-2 BORNAH MOGHBEL VICE-CHAIRMAN OF THE BOARD* RUT: FOREIGNER 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 and November 2022. Ignacio Cueto’s career in the airline industry extends over 30 years. In 1985, he assumed the position of Vice President of Sales at Fast Air Carrier, a national cargo company of that time and also 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). In addition, Ignacio Cueto served as President of LAN Cargo from 1995 to 1998, as Chief Executive Officer-Passen- ger 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 and 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 Board of the Colunga foundation dedicated to child welfare and is a member of the Cueto Group. As of December 31, 2023, 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. 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 cor- porate 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. *Note: LATAM group’s Board of Directors was re-elected on November 15, 2022. 36 ANNUAL REPORT 202304 —Corporate Governance —Corporate Governance ENRIQUE CUETO ORDINARY BOARD MEMBER* RUT: 6.694.239-2 FREDERICO CURADO ORDINARY BOARD MEMBER* RUT: FOREIGNER ANTONIO GIL NIEVAS ORDINARY BOARD MEMBER* RUT: 23.605.789-5 MICHAEL NERUDA ORDINARY BOARD MEMBER* RUT: FOREIGNER 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 Offi- cer (“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 Colunga foundation dedicated to child welfare and was a member of the Endeavor foundation, an organization dedicat- ed to the promotion of entrepreneurship in Chile for 15 years. 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, 2023, Enrique Cueto is 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. 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, is Chair of its HSE and Sustainability Committee and a member of the Corporate Governance Committee. Frederico Curado is also an independent director at ABB since 2016 and is Chair of its Compensation Committee. He was CEO of Em- braer 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 invest- ment leadership roles at global, European and Latin American levels. He was CEO of Moneda Asset Management and worked at JP Morgan, serving as Managing Director, Global CFO and member of the global executive committees of several busi- nesses, among other positions, and 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. 37 *Note: LATAM group’s Board of Directors was re-elected on November 15, 2022. 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. Mi- chael 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 Neru- da 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. ANNUAL REPORT 202304 —Corporate Governance —Corporate Governance BOUK VAN GELOVEN ORDINARY BOARD MEMBER* RUT: FOREIGNER SONIA VILLALOBOS ORDINARY BOARD MEMBER* RUT: 21.743.859-4 ALEXANDER WILCOX ORDINARY BOARD MEMBER* RUT: FOREIGNER Bouk van Geloven joined the Board of LATAM Airlines Group in November 2022. He is the Managing Director of the North American investment team at Strategic Value Partners LLC, which he joined in 2014, with a focus on sectors such as air- lines, infrastructure, packaging and industrials. From 2011 to 2014, Bouk Van Geloven was at J.P. Morgan Cazenove in their Strategic M&A Advisory team. Bouk Van Geloven has two Master of Science degrees in Econometrics and Quanti- tative Finance from the Vrije Universiteit Amsterdam. He has served on multiple boards whilst at SVP and he is currently a member of the Board of Klöckner Pentaplast and is part of the Advisory Committee of Mattress Firm. Sonia J.S. Villalobos joined the Board of LATAM Airlines in Au- gust 2018. Sonia Villalobos is a Brazilian citizen and a found- ing partner of the company Villalobos Consultoria Starting in 2016, she has participated as a regular board member of Brazilian listed companies, such as Petrobras and Telefónica Vivo. 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, Ar- gentina 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 ob- tained a Master in Finance from the same institution in 2004. She was the first person to receive the CFA certification in Lat- in America, in 1994. Alexander Wilcox has served on LATAM Airlines Group’s board of directors since October 2020. Wilcox resides in the Unit- ed 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. 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. Wilcox 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). Wil- cox has been a private pilot since 1987. Wilcox also serves on the Board of Directors of The Compass School of Texas, an elementary school in Dallas. Wilcox holds a BA degree in Political Science and English from the University of Vermont. *Note: LATAM group’s Board of Directors was re-elected on November 15, 2022. 38 3 2 0 2 M A T A L A R O M E M I . e l i h C , a m a c a t A e d o r d e P n a S ANNUAL REPORT 2023 Decision- making bodies 39 04 —Corporate Governance —Decision-making bodies NCG 461: 3.2 BOARD OF DIRECTORS AND 3.3 BOARD COMMITTEES GRI 2-9, 2-10 Y 2-11 The Board of Directors defines and monitors the strategic guidelines of LATAM Airlines Group S.A. It is comprised by nine regular members, who are elected individually for two-year terms by the cumulative voting system—i.e., each shareholder has one vote per share and may cast all their votes in favor of one candidate or distribute them among several. This system is followed to ensure that shareholders of 10% of the shares outstanding can choose at least one representative. It should be noted that this is a fixed structure, and in cases of contingency or crisis (mainly in aviation emer- gencies), the Board of Directors remains unchanged and continues to function normally, supporting the continuity of the business’ operations. MEETINGS The Board of Directors holds both ordinary and ex- traordinary meetings on a regular basis, depending on the company’s needs, following legal requirements. They do not have a minimum time commitment, whether on-site or remote. In accordance with the provisions of the Company’s Bylaws, the Board of Directors must meet at least once a month in ordi- nary meetings, except in February, which implies a minimum of eleven ordinary meetings per year. For each meeting, the members of the Board of Di- rectors are summoned well in advance, usually one week before, and have access to a digital information system where documents with relevant background information for their preparation, minutes of previous meetings, and the matters to be discussed at the meeting are centralized. This system keeps a record of the historical data of the Board’s documents since 2016 and is updated approximately one month after each meeting with the corresponding minutes, re- maining available going forward. FIELD VISITS NCG 461: 3.2 BOARD OF DIRECTORS In 2023, the Board of Directors visited some of LATAM group’s facilities. During the year, they visited the São Carlos maintenance facilities in Brazil, the hangars in Guarulhos (GRU) and Congonhas (CGH), and the cor- porate facilities in Santiago (Chile) and Miami (United States), including the Cargo operation in the latter. These visits, which were aimed at learning more about the operation and the opinions of the local teams, included the general manager and other group exec- utives. MEETINGS WITH RISK MANAGEMENT, INTER- NAL AUDIT AND SOCIAL RESPONSIBILITY UNITS AND WITH INTERNAL AUDIT FIRM NCG 461: 3.2.VI BOARD OF DIRECTORS AND 3.3 BOARD COMMITTEES In 2023, the average attendance at the 17 ordinary and extraordinary meetings held was 98.7%. In detail, attendance at the meetings was 100% for directors Ignacio Cueto, Enrique Cueto, Frederico Curado, An- tonio Gil, Michael Neruda, Bouk Van Geloven and Alexander Wilcox, while attendance was 94.1% for directors Sonia Villalobos and Bornah Moghbel. As stated below, the Board of Directors operates through the Directors’ Committee, which also acts as Audit Committee, reporting monthly to the Board of Directors, through the account delivered by the Chair of the Audit Committee to the Board of Direc- tors during the latter’s ordinary meetings held each month, regarding the Company’s audit and internal control, including internal audit and risk management matters. The main topics discussed in the arena of internal audit pertain, among others, to the approval and follow-up of the internal audit plan, monitoring of the progress and results of the external audit and SOX certification (Sarbanes Oxley Act); and in the sphere of risk management, they pertain to a review of the overall status of the main risks and their management. The Company has a Sub-Committee of the Board of Directors, called the Strategy & Sustainability Sub-Committee, which reviews the Company’s so- cial responsibility issues and reports to the Board of Directors. The Board meets with the external auditing firm in charge of auditing the financial statements four times a year, which takes place in additional and extraordi- nary meetings, to review and approve the Company’s quarterly and annual financial statements. Additionally, said audit firm reports to the Board of Directors, usually once a year, the external audit work plan for the following year, sometimes coinciding with one of the four meetings mentioned above. The main topics covered in the external audit correspond to the work plan, its scope and focus areas; the results of the audit include a brief review of the main focus points and any recommendations that may have come up. All of the Board meetings mentioned above are reg- ularly attended by the CEO, the CFO, and the Legal Vice-President, as well as by the senior executives in charge of the different subjects to be reviewed at each Board meeting. ANNUAL REPORT 202304 —Corporate Governance —Decision-making bodies AUDIT COMMITTEE NCG 461: 3.3 BOARD OF DIRECTORS COMMITTEES AND 3.2 BOARD OF DIRECTORS VI AND VII larly by the Legal Vice-President, as well as the main executives in charge o the various topics reviewed in each Board meeting. The CEO doesn’t generally participate in said meetings. Audit Committee, LATAM has three other sub-committees that support the Board in decision-making: Strategy & Sustainability, Leadership, and Finance. The Audit Committee reports monthly to the Board of Directors, through the account delivered by the Chair of the Audit Com- mittee to the Board of Directors at the ordinary meetings held each month, regarding the Company’s audit and internal control, including internal audit and risk management matters. In addition, in compliance with the requirements of the LSA, the U.S. Sarbanes-Oxley Act and the guidelines of the U.S. Securities and Exchange Commission (SEC), the Directors’ Committee also serves as the Audit Committee. Therefore, the main topics discussed in the arena of internal au- dit pertain, among others, to the approval and follow-up of the internal audit plan, monitoring of the progress and results of the external audit and SOX certification (Sarbanes Oxley Act); and in the sphere of risk management, they pertain to a review of the overall status of the main risks and their management. In fact, the Internal Audit and Control department, which is in charge of internal audit and risk management matters, reports regularly to the Audit Committee. This is done at the same meet- ings held by the Audit Committee. In this regard, during financial year 2023, the Audit Committee met ten times with the Audit and Internal Control department to discuss internal audit issues, and on two other occasions, also with the same department, to discuss risk management issues. The Corporate Affairs and Sustainability department, in charge of topics of social responsibility, among others, reports to the CEO and generally presents once a year before the Audit Com- mittee and the Board. In these meetings, the progress on the implementaiton of the LATAM group Sustainability Strategy has been presented, with a review of its four pillars: environmental management, climate change, circular economy and shared value. On their part, the Audit Committee also meets with the company in charge of auditing the financial statements four times a year, which takes place in ordinary and extraordinary sessions, to re- view and make pronouncements on the Company’s quarterly and annual financial statements, pursuant to the terms of Article 50 bis of the Corporations Act. In addition, they met on three occa- sions where the main topics discussed regarding external auditing correspond to work planning, scope and focus areas; relationship with regulatory requirements in the sphere of communication; and the consolidated audit approach, among others. Likewise, the audit firm also reports to the Board of Directors, usually once a year, which sometimes coincides with one of the four meetings mentioned above, the external audit work plan for the following year; the results of the audit, including a brief review of the main potential issues and any recommendations that come up. In all of the Audit Committee meetings mentioned above are regularly attended by the Legal Vice-President. The CEO does not partic- ipate regularly in them. BOARD MEMBER TRAINING AND EVALUATION NCG 461: 3.2 BOARD OF DIRECTORS GRI 2-17 AND 2-18 Following each election and in observance of the Induction Policy, new members of the Board receive the information and background related to matters under evaluation and analysis by the Board, as well as training on the regulatory framework and the duties involved in the position as Members of the Board. This includes, among other aspects: Sustainability issues, including social responsibility; policies and guidelines, particularly the Code of Conduct; business affairs; risks; and financial and accounting aspects of LATAM. Following the repeal of NCG No. 385 and the incorporation of several of its topics into the Annual Report, the Board of Direc- tors has not implemented additional performance evaluations. In addition to the Audit Committee, LATAM has three other sub-committees that assist the Board in the decision-making process: Strategy & Sustainability, Leadership and Finance. EXECUTIVE SPHERE GRI 2-13 By both December 31, 2022 and December 31, 2023, the Audit Committee was comprised by Frederico Curado, Michael Neruda and Sonia J. S. Villalobos, all considered independent under section 10A of the Securities Exchange Act. Meanwhile, according to the Chilean Corporations Act (LSA), only the Board member and Chair of the Audit Committee Frederico Curado is considered an independent Board Member; that is, he has no links, interests, economic, professional, credit, or commercial dependence of any relevant nature or volume on LATAM, the other subsidiaries of the group, or the main executives, nor any family ties with the latter, among other characteristics. LATAM’s executive sphere is divided into five large areas. These are Clients, People, Operations, Commercial and Finance. Each has clearly divided responsibilities to execute and monitors the group’s strategy. Along these lines, the executives in these five areas, in addition to the Vice-Presidents of Legal & Compliance, Technology & Digital, Corporate Affairs and the Brazil CEO form an Executive Committee, which meets on a weekly basis with the LATAM CEO. Likewise, the Strategic Planning area supports the Executive Committee, and other vice-presidencies participate in meetings to address more specific issues. It should be noted that each subsidiary has a CEO, as well as a group of executives. They are responsible for each of the oper- ations, respectively. All the Audit Committee meetings mentioned are attended regu- On the other hand, in addition to the Directors’ Committee or 40 SUSTAINABILITY NCG 461: 3.1 GOVERNANCE FRAMEWORK AND 3.2.VI. BOARD OF DIRECTORS & 3.6.IV RISK MANAGEMENT GRI 2-12 AND 2-13 The commitment to sustainability is a comprehensive part of the business and decision-making at all levels of LATAM. Accordingly, the Corporate Affairs and Sustainability Directorate, together with the organization’s leaders and in accordance with the company’s objectives and best practices worldwide, defines the group’s strategy in this arena and promotes its implementation in the countries where it operates. To ensure compliance with the objectives, on a quarterly basis, Corporate Affairs consolidates information on the main progress and gaps related to Environmental Management, Climate Change, Circular Economy and Shared Value, which address environmental and social issues that are priorities for the organization. Thus, normally and based on their criticality and relevance, the results are presented to the members of the Executive Committee and the CEO of the group for decision- making, and in addition to this, an annual management review of the results of the Environmental Management System (EMS) is carried out. Nonetheless, the Strategy and Sustainability Committee of the Board of Directors is the highest authority for analyzing results and making strategic decisions on sustainability, and it is informed annually of the progress on the aspirations and commitments in this arena, including social responsibility topics. In fact, in 2023, this presentation was made in the last quarter. The Strategy and Sustainability Committee of the Board of Directors is the highest authority after the Board itself for analyzing results and making decisions regarding sustainability. ANNUAL REPORT 2023 04 —Corporate Governance —Decision-making bodies RISK MANAGEMENT GRI 3-3 NCG 3.6 RISK GOVERNANCE In LATAM group, the processes and governance in this area are guided by the Comprehensive Risk Management Policy, whose purpose is to support the achievement of the group’s strategic objectives, establishing a transversal model for managing the risks that compromise: sustainability, operational continuity, clients, finances and reputation, together with identifying the main functions and strategies to be developed for each of them. Roles and responsibilities: The Board of Directors is responsible for ensuring the existence of a comprehensive process, approving the related policies and promoting a risk culture. To this end, it instructs the Audit Committee to oversee the development and assessment of risks relevant to the company. In turn, the Audit Committee delegates to the Risk Management Department the administration of the model, which involves detecting, supervising and consolidating the most relevant risks for the companies in LATAM group. To achieve this, Risk Management assists and centralizes the information gathered by the different leaders of the various areas of the Company, who are generally directly responsible for identifying, assessing, monitoring and managing the risks pertaining to their areas. On the other hand, LATAM group has an Internal Audit de- partment, which is responsible for independently ensuring the operation, effectiveness and compliance with the organization’s Risk Management Model. This team is led by the Audit and Internal Control Director, who reports directly to the Audit Committee. Three lines of defense Using international risk management methodologies as a benchmark, LATAM group has established a three lines of defense model to maintain an adequate identification and mitigation process. In this structure, the first line is made up of the business process owners, who are primarily responsible for the identifi- cation, evaluation, management and monitoring of their risks. Additionally, areas have been established to operate as second lines of defense, with the purpose of providing specialized sup- port and advice to the businesses to properly manage, through the application of specific frameworks and methodologies, the risks related to their areas. For example, the Operational Safety area does so by following the Safety Management System (SMS); the Sustainability Management applies dual materiality to identify, evaluate and prioritize environmental, social and economic or corporate governance risks; and the Information Security Management follows standards based on ISO/IEC 27001 and NIST, among others. The second line departments also carry out inspection, veri- fication and external audits. Examples of this are the exter- nal inspections and audits for the certification process under the IATA Environmental Assessment (IEnvA) standard for the subsidiaries in Brazil, Chile, Colombia, Ecuador and Peru, as well as the system checks and stress tests carried out by the cybersecurity team, among others. These activities are complemented with the assurance func- tions of Internal Audit, which acts as a third line of defense. 41 LATAM’S THREE LINES OF DEFENSE MODEL FIRST LINE SECOND LINE THIRD LINE • Person responsible: Business pro- cess owners. • Role: Directly responsible for identify- ing, evaluating, monitoring and reporting them, as well as establishing mitigation measures so that risks remain at ade- quate levels, as defined by the Board of Directors. • Person responsible: Risk Manage- ment and other departments associated with specific models, such as: Operational Security, Compliance, Comptrollership, Information Security, or Sustainability, among others. • Role: Provide methodological support and specialized advice, supervise and monitor the the first line in its risk man- agement process. • Person responsible: Internal Audit • Role: Independently evaluates the effectiveness of the comprehensive risk management process, as well as the prop- er application of policies and procedures. FIRST LINE OF DEFENSE SECOND LINE OF DEFENSE THIRD LINE OF DEFENSE Finance, Leadership Strategy committees, among others Audit Committee Board of Directors MORE INFORMATION In Risk Factors, in Annexes. Pages 140-152. ANNUAL REPORT 2023 04 —Corporate Governance —Decision-making bodies chapters, such as: the “Employees” chapter describes measures for organizational climate assessment, benefits offered and other initiatives related to talent management and organiza- tional culture. Likewise, the chapter named “Commitment to Sustainability” explains the strategies aimed at addressing environmental risks. The sections “Operations”, “Number 1 Priority” and “Clients”, discuss the plans and initiatives that the organization develops to address operational and security risks, among others. In addition, the main risk factors are presented annually in the 20-F Annual Report and in this Annual Report (see pages 141-153). The risks published in 2023 include those associated with the business, operations and safety, regulations and the environment, indebtedness, and those related to the industry and countries in which the LATAM group operates. Risk Culture The LATAM group’s risk management model focuses on strengthening the capacity to anticipate risks, manage them appropriately, and promote a culture of valuing the capabilities and aptitudes of its employees and collaborators in the face of risks, encouraging self-assessment. The LATAM group fosters a risk culture through training, pro- active risk identification, employee performance evaluation criteria and escalation channels. In addition to the Confidential Channel, other bodies have been implemented to escalate risks within the organization, such as internal Committees of the areas—for example, the Information Security and Technological Risks Committee and the Operational Security Committee for the detection and escalation of technological and operational security risks, respectively. Risk assessment and mitigation The Comprehensive Risk Management is part of a fundamental process that allows the LATAM group to deal effectively with uncertainty, identifying risks and opportunities, optimizing the capacity to generate value and achieve the organization’s strategic objectives. This process is continuous and must be maintained considering that Risk Management is dynamic, structured and methodical but adaptable over time, as it ad- justs to the internal and external contexts of the LATAM group and is strengthened by the learning and experience that the organization acquires over time. For this purpose, it has implemented a comprehensive risk man- agement model that uses methodologies such as ISO 31,000 and COSO ERM as benchmarks. This process is based on the evaluation and weighting of potential impacts and the proba- bility of occurrence of risks. The impact assessment considers several dimensions, such as financial and reputational, and probabilities are rated on a scale from remote to near certain. Risk Management updates the exposure status of corporate risks every quarter, delivering a report to the different indi- viduals responsible to be reviewed and managed with the corresponding areas. In addition, in 2023, the Risk team made two presentations to the Audit Committee with an update on the group’s risks, in April and December (see details on pages 130-132). The group implements specific strategies to mitigate risks and ensure operational stability. Some examples of these are in the financial area, where there is a manual for fuel and exchange rate hedging to reduce exposure to fuel prices and exchange rates. In operational terms, it has solid insurance coverage and adopts proactive safety measures, such as the Safety Man- agement System (SMS) and the Emergency Response Plan. Said actions reflect LATAM Airlines’ commitment to effective risk management and operational continuity, and many of them are described in the organization’s Annual Report in other 42 . l i s a r B , k r a P l a n o i t a N a n i t n a m a i D a d a p a h C ANNUAL REPORT 2023 Organizational chart NCG 461: 3.1 GOVERNANCE FRAMEWORK 04 —Corporate Governance —Organizational chart CEO Board LATAM AIRLINES CHILE LATAM AIRLINES COLOMBIA LATAM AIRLINES ECUADOR LATAM AIRLINES PERU LATAM AIRLINES BRAZIL Digital and IT Vice-Presidency Finance Vice-Presidency (includes Management Control and Investor Relations) Vice-presidency of Operations Legal Affairs and Compliance Vice-Presidency Commercial Vice presidency Human Rights Vice-Presidency LATAM Cargo Group Customers Vice presidency Strategic Planning Safety Audit Committee Internal Audit and Control (includes Risk Management) 43 Corporate Affairs (includes External Communications and Sustainability) MORE INFORMATION Board Composition (Page 36). Annual management report of the Audit Committee (Page 130). Composition of the executive sphere (Page 40). ANNUAL REPORT 2023BOARD OF DIRECTORS’ REMUNERATION NCG 461: 3.2 BOARD OF DIRECTORS AND 3.3 BOARD COMMITTEES GRI 2-19 The remunerations reported correspond to fixed allowances for attendance to meetings and variable remuneration for the Board of Directors and the Audit Committee. These were ap- proved in the Ordinary Shareholders’ Meeting held on Monday, April 20, 2023, a year in which the Board of Directors reported no expenses for accounting, tax, financial, legal or other con- sulting services. Likewise, the Audit Committee did not record any expenses for consulting services GUIDELINES FOR ENGAGING SERVICES NCG 461: 3.2 BOARD OF DIRECTORS The Board of Directors may hire experts to give advice on spe- cific matters, such as accounting, finance, taxes, legal or others; however, the director or directors who require the engagement of an expert must justify it at a meeting. Along these lines, the engagement of the advisor must follow LATAM’s policies for hiring suppliers, conflicts of interests, and market conditions. In addition, senior management will propose a list of names for the Board members to choose from. In fact, it is possible that one or more of its members veto the engagement of a specific advisor. Nonetheless, regarding the services engaged with the company in charge of auditing the Financial State- ments or other entities, there are no relevant deviations from the annual budget of the Board. 04 —Corporate Governance —Organizational chart The fixed allowance for participation on the Board of Directors is determined by the Shareholders’ Meeting and is the same for all Board members, except the Chairman, who receives twice the sum of other directors. REMUNERATION– ALLOWANCE1 2023 (USD$) NAME POSITION BOARD AUDIT COMMITTEE Chairman Ignacio Cueto Plaza Bornah Moghbel Vice-chairman Enrique Cueto Plaza Board member Board member Frederico Curado Board member Antonio Gil Nievas Board member Bouk Van Geloven Michael Neruda Board member Sonia J. S. Villalobos Board member Board member Alexander D. Wilcox 160,336 - 80,174 80,174 80,174 - - 80,174 80,174 0 - 0 76,839 0 - - 50,110 0 SUBCOMMITTEE VARIABLE TOTAL REMUNERATION REMUNERATION 50,778 0 40,081 50,778 50,778 - - 40,081 40,081 80,802 - 80,802 107,736 80,802 - - 107,736 80,802 291,916 - 201,057 315,527 211,754 - - 278,101 201,057 ALLOWANCE RATIO (MEN/WOMEN) 1 NCG 461 3.2 BOARD OF DIRECTORS REMUNERATION– ALLOWANCE1 2022 (USD$) AVERAGE2 MEDIAN3 COMMITTEE NAME POSITION BOARD AUDIT SUBCOMMITTEE TOTAL Regular members Deputy members 100% N/A* 100% N/A* * Not applicable. There are no deputy members. 1 Proportion of women’s gross hourly allowance vs. men’s gross hourly allowance. 2 Average: Average value of women’s gross allowance divided by men’s average gross allowance. 3 For the calculation of the median, the values of the gross allowance of women and men are ordered from lowest to highest, and the central value of the first group is divided by the central value of the second group. Ignacio Cueto Plaza Bornah Moghbel2 Enrique Cueto Plaza Frederico Curado Antonio Gil Nievas Michael Neruda2 Bouk Van Geloven2 Sonia J. S. Villalobos Alexander D. Wilcox Nicolas Eblen Hirmas Patrick Horn García Eduardo Novoa Castellon Enrique Ostale Cambiaso Henri Philippe Reichstul Chairman Vice-chairman Board member Board member Board member Board member Board member Board member Board member Former board member Former board member Former board member Former board member Former board member 165,078.0 - 82,260.2 8,725.6 10,331.0 - - 60,601.5 75,142.2 69,980.1 75,957.8 69,867.8 54,858.4 53,317.0 - - - 3,612.1 - - - 3,612.1 - 38,295.1 91,479.1 88,624.8 - - 21,112.1 - 20,900.1 2,086.6 2,889.2 - - 13,955.5 12,780.0 16,433.9 24,493.5 18,010.9 11,832.3 13,012.3 186,190.1 - 103,160.3 14,424.4 13,220.2 - - 78,169.2 87,922.2 124,709.1 191,930.4 176,503.5 66,690.7 66,329.3 MORE INFORMATION In annexes pages 132. 44 1 Liquid sums. 2 Directors Michael Neruda, Bouk van Geloven, and Bornah Moghbel have waived their compensations as board members, members of the Audit Committee and members of the sub committees. ANNUAL REPORT 2023 04 —Corporate Governance —Organizational chart Main executives NCG 461: 3.4 MAIN EXECUTIVES ROBERTO ALVO CEO LATAM AIRLINES GROUP RUT: 8.823.367-0 RAMIRO ALFONSÍN CHIEF FINANCIAL OFFICER RUT: 22.357.225-1 EMILIO DEL REAL VICE-PRESIDENT OF HUMAN RESOURCES RUT: 9.908.112-0 JUAN CARLOS MENCIÓ LEGAL AFFAIRS AND COMPLIANCE OFFICER RUT: 24.725.433-1 PAULO MIRANDA CLIENTS VICE-PRESIDENT RUT: FOREIGNER Ramiro Alfonsín is LATAM’s Chief Financial Of- ficer (“CFO”), a position he has held since July 2016. 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 Ad- ministration from Pontificia Catholic University of Argentina. 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 Man- ager 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 Of- ficer 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 Fi- nance 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 re- sponsible 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 Bache- lor of Business Administration degree from the Carlson School of Management, University of Minnesota, USA. 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 Alli- ances 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 Argen- tina, 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. 45 ANNUAL REPORT 2023 04 —Corporate Governance —Organizational chart HERNÁN PASMAN CHIEF OPERATING OFFICER RUT: 21.828.810-3 JULIANA RIOS IT & DIGITAL VICE-PRESIDENT RUT: FOREIGNER MARTIN ST. GEORGE1 CHIEF COMMERCIAL OFFICER RUT: FOREIGNER 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 Ex- ecutive Officer for LAN Colombia. Prior to joining the company, between 2001 and 2005, Hernán Pasman was a consultant at McKinsey & Compa- ny 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 Man- agement (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, merg- ers & acquisitions, digitization, IT, and large-scale project management, such as PSS migration. As Chief IT & Digital Officer, she leads LATAM Air- lines’ 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. Martin St. George joined LATAM Airlines Group in 2020 as Chief Commercial Officer after a 30+ year career in the airline industry in both North America and Europe. Prior to joining LATAM, he ran a strategy-consulting firm for airlines and travel industry clients in the United States, the Caribbean and Europe, and served as acting CCO at Norwegian Air Shuttle ASA. From 2006 to 2019, he worked for JetBlue Airways in several positions in marketing and as COO. Martin St. George holds a degree in civil engineering from the Massachusetts Institute of Technology. 1 Martin St. George submitted his voluntary resignation effective February 23, 2024. JUAN JOSÉ TOHÁ DIRECTOR OF CORPORATE AFFAIRS AND SUSTAINABILITY RUT: 16.655.612-0 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 oth- ers. In 2019, he joined LATAM group as Director of Corporate Affairs and Sustainability, reporting directly to the CEO of LATAM group, and he coor- dinates the corporate strategy of Public Affairs, External Communications, and Sustainability. ANDRÉS BIANCHI CHIEF CARGO OFFICER LATAM RUT: 8.867.785-4 Andrés Bianchi has been LATAM Cargo’s Chief Ex- ecutive Officer 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 McK- insey and Company. Additionally, from 2002 to 2006 he served as LAN Airlines’ Head of Investor Relations. Andrés Bianchi holds a Business Ad- ministration degree from Pontificia Universidad Catolica de Chile and an MBA from The Wharton School of the University of Pennsylvania. 46 ANNUAL REPORT 202304 —Corporate Governance —Organizational chart EXECUTIVE REMUNERATION NCG 461: 3.4 MAIN EXECUTIVES AND 3.6 RISK MANAGEMENT LATAM has a remuneration policy for salary structures, which applies to all positions across the group, and consists of the methodology of weighting positions (points and grades) and salary scales (based on market research), which rules all salary movements, both for merit and promotions within the organization. The Leadership Committee, comprised of four directors, is responsible for analyzing LATAM’s top-level organizational structure and corporate remuneration policy. Its function is to align remuneration with the company’s strategic objectives, to reward good performance and behavior, and to prevent the remuneration policy from generating any type of incentive for key executives to act contrary to the interests of the group, its policies, guidelines and current regulations. Along these lines, the Committee’s work includes the review and evaluation of models and best practices available in the market (benchmarking). In turn, each time there is a change, the LATAM Vice-President of Human Resources must present it to the Audit Committee. Furthermore, once a year, the remuneration for senior management is presented to the Board. It should be noted that the policy is not disclosed to the general public, but it is published on LATAM’s internal portal for employees. In 2023, executive remuneration totaled USD$38,687,858 (USD$24,768,065 from remuneration and USD$13,919,794 from profit-sharing in March 2024). In turn, in 2022, USD$21,277,246 were paid as remuneration and USD$15,162,482 as profit- sharing, totaling USD$36,439,727 as gross remuneration. The Leadership Committee is responsible for analyzing LATAM’s top-level organizational structure and corporate remuneration policy. CIP GEM The LATAM group implemented a talent retention program for GEM executives (CEOs and employees whose job description is “Vice-Presidents” or “directors”) and those who participate are eligible to receive cash payments for the remuneration units whose value is considered, by way of reference, to be equivalent to the value of one share of LATAM Airlines Group S.A., and consequently, in the event that they are paid, they entitle the employee to receive the cash payment resulting from multiplying the number of Units paid by the value per share of LATAM Airlines Group S.A. to be considered in accordance with the CIP GEM. These units are as follows: 1. Retention Shares Units (RSUs) That is, units associated with the employee’s permanence in the group and, consequently, are associated with the passing of time. Overall, the CIP considers up to 2,346,862,183 RSUs, payable in installments as indicated below. It should be noted that, as a general rule, RSUs will be eligible to vest 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 date of the exit date of LATAM group from the re- organization proceedings (the “Chapter 11 Proceeding”) under Chapter 11 of the United States of America (the “Exit Date”). The foregoing, subject to the occurrence of a triggering event GUARANTEED MINIMUM VESTING OF RSUS Percentage of Units to be vested Month 30 from Date of Departure Month 42 from Date of Departure Month 60 from Date of Departure 20% 30% 50% related to the volume of transactions of securities issued by LATAM Airlines Group S.A. under the terms considered in the CIP (hereinafter, a “VTE”—Volume Triggering Event). The number of RSUs that are actually vested will be determined based on the net resources accrued 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 foregoing, the CIP GEM also considers a “Guaranteed Minimum Vesting” pursuant to which the per- centage of RSUs set forth below will be vested on each date indicated, even if no VTE has occurred. The foregoing, net of any RSUs that may have been vested previously. 2. Performance Shares Units (PSUs) That is, units associated with both the employee’s permanence in the group and the performance of LATAM Airlines Group S.A. as measured by the share price. Consequently, like RSUs, these units are associated with the passing of time. However, PSUs also consider the market value of LATAM Airlines Group S.A. stock, considering a liquid market. However, in the absence of such a liquid market, the share sprice will be determined on the basis of representative transactions. Overall, the CIP considers up to 4,251,780,158 RSUs, payable in installments as indicated below. It should be noted that, as a general rule, PSUs will be eligible to vest 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 Date of Departure. The foregoing, subject to (i) the occurrence of a VTE; and (ii) the quotient (hereinafter, the “Net Price/ERO Price Ratio” (EQUITY RIGHTS OFFERING) be- tween the net price of the sales originated in a VTE, divided by the price per share at which the shares issued by virtue of the capital increase agreed at the LATAM Airlines Group S. A. Extraordinary Shareholders’ Meeting were placed (i.e. USD$0.01083865799), being greater than 50%. The number of PSUs that will actually be vested will be determined based on the Pro Rata Factor and the Net Price/ERO Price Quotient). It follows that the PSUs constitute a contingent and non-guar- anteed payment. In addition, certain of the GEM Executives will also be entitled to receive a fixed, guaranteed cash payment (“MPP” - Management Protection Plan) on certain dates under the Reorganization Plan, approved and confirmed under the Chapter 11 Proceeding, at the rate of 33% in the 18th month from the Date of Departure, 34% in the 24th month from the Date of Departure, and 33% in the 30th month from the Date of Departure. 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 total, the CIP con- siders 1,438,926,658 MPP Based RSUs. As a general rule, MPP Based RSUs will be eligible to be vested under the same terms and conditions as the RSUs; provided, however, that they will be eligible for vesting at the rate of one-third on each of the following dates: month 18, month 24 and month 30, in each case, counted from the Date of Departure. In both cases, the respective employees must have remained as such in the group at the corresponding accrual date to be eligible to receive these benefits. Given the characteristics of this program, it has been recorded in accordance with IFRS 2 (Share-based payment) and has been considered as a cash settlement award and, therefore, record- ed at fair value as a liability under line items Trade accounts payable, other accounts payable and Provisions for non-cur- rent employee benefits, which is restated at the closing date 47 ANNUAL REPORT 2023 04 —Corporate Governance —Organizational chart of each financial statement, affecting the income for the period classified in the line item Administrative expenses of the Consolidated Income Statement by function. solidated statement of financial position is US$118.9 million. For a detailed description, please see Note 22 (Employee Benefits) in our audited consolidated financial statements. Nonetheless, the fair value has been determined based on the current value and the best estimate of the future value of the Company’s shares, multiplied by the number of base units awarded. This estimate was based on the group’s Business Plan and its main indicators such as EBITDAR, adjusted net debt. 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, our Board of Directors approved on April 25, 2023, to extend the grant of an extraordinary and exceptional incen- tive 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 em- ployees between the months of January to December 2023. In all cases, the respective employees must have remained as such in the Company at the corre- sponding accrual date to qualify for these benefits. During 2023, the amount accrued related to the CIP was US$66.8 million, which is recorded in the “Admin- istrative expenses” line of the Interim Consolidated Statement of Income by Function. As of December 31, 2023, the amount of the CIP recorded in the con- . e l i h C , é o l i h C 48 ANNUAL REPORT 2023 04 —Corporate Governance —Corporate guidelines Corporate guidelines NCG 461: 3.1 GOVERNANCE FRAMEWORK, 3.5 ADHERENCE TO NATIONAL AND INTERNATIONAL CODES, 3.6 RISK MANAGEMENT, 8.1.1 LEGAL AND REGULATORY COMPLIANCE IN RELATION TO CLIENTS, 8.1.2 IN RELATION TO THEIR WORKERS, 8.1.4 FREE COMPETITION AND 8.2 SUSTAINABILITY INDICATORS GRI 2-26, 2-27, 206-1 & 3-3 SASB TR-AL-520A.1 LATAM group’s parent company is LATAM Airlines Group S.A., a corporation with securities registered in the Securities Registry of the CMF in Chile, and as such, is an open corporation in Chile. LATAM Airlines Group S.A. shares are traded on the Santiago Stock Exchange, the Chilean Electronic Stock Exchange, and the over-the-counter (OTC) market in the United States in the form of American Depositary Receipts (ADR). Therefore, its corporate governance model is ruled by the applicable existing regulation, the Stock Market laws (N° 18,045) and Corporations Act (N° 18,046), and the CMF rules, as well as the US SEC and specific regulations of the countries where it operates. Meanwhile, a series of corporate guidelines direct employee behavior, in accordance with standards of ethics, integrity, transparency, accountability, combating illegal acts (corruption, bribery, antitrust, and money laundering). Along these lines, LATAM constantly evaluates the possibility of implementing best practices, such as adherence to national or international codes. In fact, the group’s Code of Conduct applies to all employees and collaborators of its companies, branches, subsidiaries and offices. Indeed, the Compliance Program, managed by the Le- gal and Compliance Vice-Presidency, directs monitoring and control processes and their ongoing evolution. 49 Likewise, LATAM has policies to prevent and detect regulatory breaches regarding the rights of its employees or clients, or that could affect fair competition. Thus, there are a series of trainings on the subject for professionals. We wish to mention that, during 2023, there were no penalties or monetary losses resulting from judicial proceedings related to anti-trust or unfair competition regulations. The number of penalties levied against LATAM and/or any of its affiliates under Law No. 19,496 on Consumer Rights Protection and/or the equivalent legislation in the territories where LATAM group operates are: a) Europe: 1; b) USA: 1; c) Colombia: 1; d) Argentina: 4; e) Chile: 37; f) Brazil: 194; g) Peru: 98; these penalties translate into a total of CLP$2,133,736,953. The number of labor sanctions levied against LATAM and/or any of its affiliates is: a) Chile: 36; b) Argentina: 28; c) Peru: 2; d) Brazil: 19. These penalties total CLP$490,678,963. Only Chile and Colombia were subject to labor rights tutela actions, without any sanctions levied so far. CONFLICT OF INTEREST NCG 461: 3.1 GOVERNANCE FRAMEWORK AND 8.1.5 LEGAL AND REGULA- TORY COMPLIANCE – OTHERS GRI 2-11 AND 2-15 LATAM has an internal process to detect and manage conflicts of interest. In fact, all candidates to work at LATAM group are required to fill out the Conflict of Interest Statement prior to being hired. Likewise, periodically, group employees must complete a Conflict of Interest form each time they take the Code of Conduct course, as well as update this document when a potential conflict is identified. In addition, suppliers must answer a questionnaire on the subject. It should be noted that in the event that a potential or actual conflict is identified, whether involving candidates, employees or suppliers, it is reviewed by the Compliance team and sub- mitted to the corresponding authorities for approval. On the other hand, both employees and collaborators of the LATAM group must request prior permission for non-routine meetings with competitors and public officials. This is done through the Approvals System, which is operated by Com- pliance, by sending a request and an agenda, which must be previously approved by the Legal department. We should note that, since the creation of the policy (in late 2016), LATAM has not made any political contributions. In addition, LATAM has a Crime Prevention Manual. The pur- pose is to prevent crimes of bribery, asset laundering, terrorist financing, handling of stolen goods, incompatible negotiations, corruption among private individuals, misappropriation, and fraudulent administration, among others considered under Chilean Law no. 20,393 and its amendments. In 2023, LATAM had no penalties related to Law no. 20,393. RELATED-PARTY TRANSACTIONS LATAM has a Related-Party Transactions Control Policy applica- ble to the parent, all subsidiaries and all members of the group (directors and employees). The policy states that related-party transactions must be conducted in accordance with the law, under market conditions at the time of the transaction, and must contribute to the social interest. Likewise, the document establishes that, where appropriate, these transactions must be submitted for evaluation by the Audit Committee and for the approval of the Board of Directors or the Shareholders’ Meeting, pursuant to applicable law. Along these lines, the consolidated Financial Statements for the financial year ended December 31, 2023, report the transac- tions carried out in 2023 between LATAM and its subsidiaries. For more information, see page 163. POLITICAL CONTRIBUTIONS GRI 415-1 NCG 461: 3.1 GOVERNANCE FRAMEWORK ETHICS AND COMPLIANCE NCG 461: 3.6 RISK MANAGEMENT GRI 205-2 AND 205-3 All LATAM employees, upon entering the group, undergo training on the guidelines for integrity and compliance in the onboard- ing process. In addition, the different teams’ annual training agenda includes topics such as ethics, corruption prevention, and free competition. There is also specific training on the content of the group’s Code of Conduct, which is mandatory and must be revalidated every two years. During 2023, 100% of the Board of Directors and 91% of the employees participated in trainings on the Code of Conduct. Meanwhile, communications on anti-corruption procedures reached 91% of employees and all suppliers. The latter must accept the so-called Code of Conduct for Third Parties and Third-Party Intermediaries at the beginning of the business relationship, in addition to committing to the anti-corruption clauses contained in contracts and purchase orders. It should be noted that there were no cases of corruption in 2023. Likewise, LATAM uses the Foreign Corrupt Practices Act (FCPA) definition of corruption. Within it, an act of corruption is incurred when there is an offer, promise, or authorization of payment, or a payment in fact, made to a public official, with the aim to induce the receiver to abuse their official position, regardless of whether the corrupt act succeeds in its purpose. The guidelines regarding possible financial support to parties and candidates during electoral campaigns are established in the Political Contributions Policy, which applies to all LATAM countries of operation. Along these lines, contributions must adhere to current local legislation and be in line with the group’s Code of Conduct. MORE INFORMATION Code of Conduct. Corporate Practices Manual (in English). Political Contributions Policy. Code of Conduct for Third Parties and Intermediaries. ANNUAL REPORT 202304 —Corporate Governance —Corporate guidelines WORKPLACE HARASSMENT (MOBBING) NCG 461: 5.5 WORKPLACE AND SEXUAL HARASSMENT LATAM group’s Code of Conduct prohibits all harassing behav- ior in the workplace, whether sexual or not, and specifies the agencies for escalating and reporting incidents through the Confidential Reports Channel. Each country where the LATAM group is based has its own workplace and sexual harassment protocols. In the case of Chile, the process is reported in the Internal Regulations for Order, Hygiene and Safety, as required by local regulations. The LATAM group trains its employees on labor and sexual harassment issues, as part of its Code of Conduct trainings. In addition, the Compliance department conducted focused training sessions on the subject for more than 3,600 employ- ees in 2023. CONFIDENTIAL CHANNEL NCG 461: 3.6 RISK MANAGEMENT GRI 2-16 AND 2-26 LATAM has a Confidential Channel to receive potential reports on breaches of laws and internal rules; breaches of the Code of Conduct; labor irregularities; discrimination; workplace and sex- ual harassment; fraud; corruption; and bribery, among others. In fact, the LATAM stakeholders can access this anonymously and LATAM guarantees the principle of “non-retaliation” when reports are in good faith. When a report is made through this channel, which is on the platform of an external and non-LATAM provider, the com- plainant receives an identification number with which they can follow up on their case. The information provided only refers to the status of the case (whether it is open, under investi- gation or closed with findings of fact). Along these lines, no information is disclosed of the possible penalties that might be levied against the individuals reported. In the case of investigation, it is carried out internally by the Compliance team, with support from HR, Legal and any other departments or individuals necessary. The channel is made known through communications, training carried out by the Compliance team, e-learning and group policies. EMPLOYEES1 TRAINED ON THE CODE OF CONDUCT 2023 GRI 205-2 96% 80% 94% 95% 88% 86% 93% 91% BRAZIL CHILE COLOMBIA ECUADOR UNITED STATES2 PERU OTHERS Senior management Management Leadership Operators Sales force Administrative Other professionals Other technicians 11 128 685 9,627 230 317 832 6,049 37 330 438 1,961 293 354 1,315 2,269 1 23 71 936 18 58 54 958 0 7 29 119 10 18 11 277 5 30 64 28 2 9 47 2 1 15 65 901 41 50 42 1,750 3 28 65 436 40 68 25 67 LATAM GROUP 5 561 1,417 14,008 634 874 2,326 11,372 FUNCTIONAL CATEGORIES Senior management CEOs, Vice-Presidents and directors. Sales force Sales Operations and Customer Care. Management Senior managers, managers and assistant managers. Administrative Support activities and general roles. Leadership Area managers and department managers. Other professionals Middle management in support activities. Operators Cargo Operations, Maintenance, Airport and Operations Control Center. Other technicians Command and cabin crew. 1 This percentage does not include personnel on permanent medical leave. Also, LATAM has no professionals in the Auxiliary category. 2 Percentage based on the personnel to whom the course is made available, i.e. direct personnel hired by LATAM. 50 ANNUAL REPORT 2023 Stakeholder engagement 51 04 —Corporate Governance —Stakeholder engagement NCG 461: 3.1 GOVERNANCE FRAMEWORK, 3.7 STAKEHOLDER ENGAGEMENT, 6.1 INDUSTRIAL SEC- TOR AND 6.3 STAKEHOLDERS GRI 2-29 AND 3-3 LATAM’s main stakeholders include: • Authorities and different government agencies, which define the regulatory framework and public policies affecting the group and its operations. financial statements, quarterly reports, and other relevant data to assist share- holders, investors and market analysts in their decision-making process. All these contents are available in English, Spanish, and Portuguese. Moreover, without the assistance of external experts, the Investor Relations de- partment does annually reviews internally of the information presented to the market by other players in its industry to evaluate improvement, opportunities for the data and information presented to the public. • Trade associations, with which LATAM shares common interests. Shareholders’ Meetings • International organizations, responsible for the international regulatory frame- work, and sector benchmarks and references that allow the group to make a comparative analysis of its own performance. All shareholders may participate in the so-called Shareholders’ Meetings, and have the right to voice and vote therein. In order to carry them out, LATAM complies with the times and information required by the LSA, its Regulations and other applicable regulations (including General Standard 30 of the CMF). • Capitals market—a key player for business continuity and access to financing. • Communities with which LATAM puts into practice its commitment to generate and share value. • Employees, who make LATAM, being essential to the business and its operations. • Network of suppliers with whom LATAM maintains business relationships. • Clients who choose to fly with LATAM. Likewise, prior to the Shareholders’ Meetings with the agreement of the Board, LATAM uploads all the relevant information to said process into the Investor Re- lations website. Meanwhile, with regard to the Board member elections, LATAM publishes the names of the shareholders’ nominees along with their nomination and acceptance letters or sworn statements, as may be the case. It is worth noting that no information is published on the Board’s opinion regarding the experience, vision and skills that are advisable for new members. The most recent Shareholders’ Meetings have been held remotely or in hybrid format, and shareholders have been able to participate and exercise their right to vote both remotely or on site. Still, LATAM does not have a real-time audio and video streaming service for non-shareholder audiences. CAPITALS MARKET NCG 461: 3.7.II MEDIA RELATIONS LATAM establishes an ongoing dialog with its shareholders, other players in the debt and capitals market, and the press. It also has Investor Relations and External Communications departments to manage relationships with its stakeholder groups. The External Communications department engages with the media for all their requirements and to communicate the milestones of the LATAM group. Contact is via e-mail at ComunicacionesExternas@latam.com. Specifically, LATAM’s Investor Relations department makes it possible to clarify the concerns of shareholders, investors and other players of the capitals market regarding its financial and economic situation, the main risks, strategy and other aspects of the business. In fact, in the Investor Relations website, the group of- fers a breakdown of the corporate governance structure, and publishes updated ANNUAL REPORT 202304 —Corporate Governance —Stakeholder engagement ASSOCIATION MEMBERSHIP NCG 461: 6.1 INDUSTRIAL SECTOR & 6.3 STAKEHOLDERS GRI 2-28 LATAM group participates, through memberships, in representative agencies that promote initiatives for strategic debate and the joint construction of solutions. It also collaborates in the discussion of public policies and regulations relevant to the sector. In fact, In 2023, financial contributions to the different agencies totaled USD$1,829,742. All of these amounts went to trade associations, with the largest con- tributions going to Associação Brasileira das Empresas Aéreas (Abear), which received USD$1,126,644, Sindicato Nacional das Empresas Aeroviárias (Snea), which received USD$208,714, and Sociedad de Fomento Fabril (SOFOFA), which received USD$58,786. Argentina • Cámara de Compañías Aéreas en Argentina (JURCA) Brazil • Cámara Chileno Norteamericana de Comercio (Amcham–Chile) • Cámara de Comercio de Santiago (CCS) • Federación de las Empresas de Turismo de Chile (Fedetur) • Fundación Chilena del Pacífico • Instituto Chileno de Administración Racional de Empresas • Cámara de Comercio Americana • Pacto Global • Cámara Ecuatoriano Alemana • YPO (ICARE) Peru • Associação Brasileira das Empresas Aéreas (Abear) • Associação Brasileira das Empresas de Mercado de • Pacto Global • Sociedad de Fomento Fabril (SOFOFA) Fidelização (Abemf) • Associação Brasileira de Comunicação Empresarial Colombia (Aberje) • Câmara Americana de Comércio para o Brasil • Asociación de Líneas Aéreas Internacionales en Colombia (Amcham Brasil) (ALAICO) – Carga • G100 Brasil (G100 Brasil) • Junta dos Representantes das Companhias Aéreas Internacionais do Brasil (Jurcaib) • Sindicato Nacional das Empresas Aeroviárias (Snea) • Asociación de Transporte Aéreo de Colombia (ATAC) • Asociación Nacional de Empresarios de Colombia (ANDI) • Federación Nacional de Comerciantes (FENALCO) • Cámara de la Diversidad Chile Ecuador • Asociación Chilena de Aerolíneas (ACHILA) • Asociación Latinoamericana y del Caribe de Trans- porte Aéreo (ALTA) • Cámara de Industrias de Guayaquil • Cámara de Industrias y Producción (CIP) • Club 30% (OPEV) • Asociación de Empresas de Transporte Aéreo Internacional (AETAI) • Confederación Nacional De Instituciones Empresariales Privadas (CONFIEP) • Asociación Peruana de Empresas Aéreas (APEA) • Cámara de Comercio Americana del Perú (AMCHAM PERÚ) • Cámara Nacional de Turismo (CANATUR) • Cámara Regional de Turismo de Cusco (CARTUC) • Instituto Peruano de Economía (IPE) • Perú Sostenible • Sociedad de Comercio Exterior del Perú (COMEX PERÚ) • Asociación Peruana de Hidrógeno (H2 PERÚ) • UNESCO – Pacto por la Cultura • Patronato Hombro a Hombro • Asociación Femenina de Ejecutivas de Empresas Turísticas 52 POLITICAL CONTRIBUTIONS GRI 3-3: 205 Since the creation of the Political Contributions Policy in late 2016 until the end of 2023, the LATAM group has not made any political contributions. Nonetheless, it is worth noting that the Policy es- tablishes guidelines for possible financial support to parties and candidates during election campaigns in all the countries where the group operates. These guidelines state, among other things, that contribu- tions must adhere to current local legislation and be in line with LATAM’s Code of Conduct. MORE INFORMATION Manual for Handling Relevant Information for Markets Investor Relations: latamairlinesgroup.net Contact: InvestorRelations@latam.com or ComunicacionesExternas@latam.com ANNUAL REPORT 2023Financial policies 04 —Corporate Governance —Financial policies FINANCING POLICY The scope of the LATAM group’s Financing Policy is to meet the group’s financing needs, including working capital financing, the acquisition of fleet assets, such as aircraft and engines, and the financing of other investments. the various aircraft financing structures are mostly for 12 years. Moreover, the LATAM group contracts a large part of its fleet purchase commitments through operating leases as an additional source of financing. In November 2022, LATAM completed its reorganization process, reducing its financial liabilities by 35%. During the Chapter 11 Proceeding the LATAM group obtained Debtor-in-Possession (DIP) financing, initially for USD$2.45 billion and up to USD$3.70 billion, USD$2.75 billion of which were drawn. This DIP financing allowed the LATAM group to op- erate with sufficient liquidity during the pandemic and its reorganization process. On October 12, 2022, said DIP credit agreement was fully paid through the DIP- to-Exit financing amounting to USD$2.25 billion in a combination of bridge loans with Term Financing, added to USD$1.14 billion from a Junior DIP, effective during the remaining period of the Chapter 11, and a new Revolving Credit Facility (RCF) for USD$500 million that became fully available. On October 18, 2022, the bridge loans were partially repaid through bond issuance under SEC Rule 144A. Subsequently, on November 3, 2022, the bridge loans were fully repaid and replaced by an increase in the term financing mentioned above. Likewise, on that date, the LATAM group completed its reorganization process, achieving a reduction of 35% of its financial liabilities, in addition to a re-profiling of its debt maturities, with the next important maturities due in 2027, corresponding to the Term Financing worth USD$1.10 billion and the 2027 Notes for USD$450 million, and in 2029, corresponding to the 2029 Notes for USD$700 million. As part of its new capital structure, the LATAM group has two committed lines of credit totaling USD$1.1 billion, one for USD$600 million secured by aircraft, spare engines and spare parts in general, and the other line for USD$500 million, secured by intangibles. As at December 31, 2023, both lines are fully available. During its reorganization, the LATAM group focused its resources on maintaining operations and adjusting fleet size in line with current and projected demand for the next few years. The LATAM group reached agreements with Boeing to cancel and postpone aircraft arrivals, as well as to obtain more favorable terms for its financed fleet and fleet under operating leases, such as variable pay periods, rental reduction, and extended payment periods. By December 31, 2023, the LATAM group had placed orders with Boeing for five B787-9 aircraft and with Airbus for 88 A320neo and A321XLR aircraft with delivery by 2029. Normally, the LATAM group finances between 70% and 85% of the value of the assets through bank loans, secured notes covered by the export promotion agencies, or through com- mercial loans, capital investments, or its own funds. The payment schedules of 53 ANNUAL REPORT 202304 —Corporate Governance —Financial policies MARKET RISK MANUAL Given the nature of its operations, the LATAM group is subject to market risks, such as: 1. Fuel price risk. 2. Interest rate risk. 3. Exchange rate risk. In order to hedge fully or partially against these risks, the LATAM group uses financial derivatives to reduce the adverse effects that these risks could cause. Market risk is managed integrally and considers the correlation with each market factor to which the group is exposed. In order to operate with each counterpart, the Company must have an approved line and a framework signed with it. 1. Fuel price risk Variations in fuel prices depend significantly on oil supply and demand in the world, as well as on the decisions made by the Organization of the Petroleum Exporting Countries (OPEC), the refining capacity worldwide, inventory levels, and the occurrence or absence of climatic phenomena or geopolitical factors. LATAM purchases aircraft fuel, known as jet fuel. For the execution of fuel hedges, there is a benchmark index on the international market for this underlying asset, which is the Jet Fuel 54 US Gulf Coast. The LATAM group has the ability to trade derivatives based on jet fuel, as well as other underlying assets, such as Jet Fuel, Brent, WTI and Heating Oil. The Fuel Hedging Policy sets a minimum and a maximum hedging range for the group’s fuel consumption, based on the capacity to pass through fuel price variations to airfares, anticipated sales, and the competitive scenario, among other factors. Moreover, this Policy sets hedging zones, a premiums budget, and other strategic considerations, which are assessed and presented periodically before the LATAM group’s Finance Committee. With regard to fuel hedging instruments, the Policy makes it possible to contract combined Swaps and Options only for hedging purposes. 2. Interest rate risk on cash flows Interest rate variations depend largely on the state of the global economy. A change in the long-term economic outlook could modify rates, along with possible government interventions that could raise or lower rates, among other possible measures, in response to specific situations or to manage inflation targets. The uncertainty surrounding how the market and the govern- ments will behave, and thus, how interest rates will change, leads to a risk related mainly to the LATAM group’s debt subject to variable interest and to the investments it makes. Interest rate risk on existing debt materializes in the impact on future cash flows related to financial instruments, given the interest rate fluctuations. Thus, a higher interest rate could translate into a higher cash flow from interest payments, and vice versa. The LATAM group’s exposure to the risk from market interest rate fluctuations is mainly related to long-term obligations with variable rates. In order to mitigate the impact from an eventual hike in in- terest rates, the LATAM group can use interest rate swaps, swaptions, or other derivatives. At December 31, 2023, the company has no interest rates derivatives positions. 3. Exchange rate risk The functional currency used by the parent Company is the US dollar. There are two types of exchange rate risks: Flow risk and balance sheet risk. Cash flow risk is a consequence of the net revenue position and costs in currencies other than US dollars. The LATAM group sells its services in U.S. dollars and in local currencies. In the 54 international passenger business, most fares depend on the US dollar and, to a lesser extent, the euro. On the other hand, in domestic businesses, most rates are in local currency. On the other hand, some of the group’s expenses are denomi- nated in US dollars or equivalent to the USD, like fuel costs, and aircraft leases. Other expenses, such as remuneration, are denominated in local currencies. Thereby, the LATAM group is exposed to the fluctuations in various currencies, mainly the Brazilian Real. Up to December 31, 2024, the LATAM group is hedged against the Brazilian Real for USD$414 million for 2023. On the other hand, balance sheet risks appears when entries in the balance sheet are exposed to exchange rate fluctua- tions, given that said entries are expressed in a currency unit other than the functional currency and must be converted to the relevant functional currency. The main mismatch factor is seen in TAM S.A., whose functional currency is the Brazilian Real, and as most of its liabilities are stated in U.S. dollars, even though its assets are stated in local currency. While the LATAM group may take out hedging derivatives contracts to protect against the impact of a potential currency appreciation or depreciation vs. the functional currency used by the parent company, during 2023, the LATAM group made no hedges against balance sheet risk. . A S U , n a t t a h n a M ANNUAL REPORT 2023 04 —Corporate Governance —Financial policies FINANCIAL POLICY The Corporate Finance Department is responsible for managing the Company’s Financial Policy. This Policy makes it possible to effectively respond to changes in the environment, and conditions under which the Company operates, and thus maintain and anticipate a stable flow of funds to ensure the operation’s continuity and growth and the fulfillment of its financial obligations. Moreover, the Finance Committee, comprising the Executive Vice-Presidency and members of LATAM’s Board of Directors, meets periodically to review the Compa- ny’s financial situation and its compliance with this Financial Policy, and to propose to the Board the approval of issues that are not regulated by the Financial Policy. The Financial Policy of the LATAM group aims to achieve the following goals: • To maintain an optimal debt level, diversify financing sources, manage the debt maturity profile, and minimize the cost of financing. La Política Financiera del grupo LATAM busca los siguientes objetivos: • To preserve and maintain suitable cash flow levels to ensure the requirements of the operations, support growth, and fulfill the group’s financial obligations. • To maintain, at all times, a short, medium, and long-term visibility of the group’s projected financial situation to anticipate scenarios of low liquidity, financial ratio deterioration, etc. • To reduce the effects of market risks, such as variations in fuel prices, exchange rates, and interest rates on the Group’s net margin and cash position. • To capitalize excess cash flow through financial investments that will guarantee a risk and liquidity level consistent with the Financial Investment Policy. • To maintain a suitable level of credit lines with local and foreign banks to gain access to additional liquidity to face contingencies. • The Financial Policy delivers guidelines and restrictions to manage Liquidity and Financial Investment transactions, Financing Activities, and Market Risk Management. • To manage counterparty risk through the diversification and limits on investments and transactions with counterparties. 55 . l i z a r B , a í h a B ANNUAL REPORT 2023 04 —Corporate Governance —Financial policies LIQUIDITY AND FINANCIAL INVESTMENT POLICY The LATAM group seeks to maintain an adequate liquidity posi- tion for the purpose of safeguarding against potential external shocks and the volatility and cycles inherent to the industry. In this sense, it seeks to maintain liquidity levels above 20% of the total income of the last 12 months. As part of its new capital structure, the LATAM group has two committed lines of credit totaling USD$1.1 billion, one for USD$600 million secured by aircraft, spare engines and spare parts in general, and the other line for USD$500 million, secured by intangibles. At yearend, both lines are fully avail- able. In addition, LATAM ended the year with a total liquidity of around USD$2.8 billion and a liquidity index of 23.9%. With regard to the Financial Investment Policy, its goal is to centralize investment decisions to optimize profitability, ad- justed for currency risk, subject to maintaining suitable security and liquidity levels. Moreover, the aim is to manage risk through the diversification of counterparties, maturities, currencies, and instruments. In terms of interest rates, the years 2020 and 2021 were marked globally by very low rates, whereas 2022 and 2023 witnessed an increase in interest rates. 56 ANNUAL REPORT 2023 05Our Business In this chapter 58 Industry context 59 Financial results 61 Investment plan 62 Stock information Industry context 58 05 —Our Business —Industry context NCG 461: 6.2 BUSINESSES shortage of qualified personnel in the airline industry. In 2023, the world economy remained on a path of slow growth, mainly due to the tightening of monetary policies to reduce inflation. Thus, in its latest projec- tion from January 2024, the International Monetary Fund (IMF) estimated a growth of 3.1% for the global economy in both 2023 and 2024. Under the same projection, the IMF calculated that developed economies will face a slight decrease this year, from a projected growth of 1.6% in 2023 to 1.5% during 2024. Along this line, according to the IMF, the United States will expand by 2.1% in 2024, which is 0.6 percentage points higher than was projected in its October report, due to an increase in both public and private spending, as well as an expansion of supply. Meanwhile, for the euro zone, the IMF considered 0.9% growth during 2024, down 0.3 percentage points vs. the October 2023 projection, reflecting a decline in consumer confidence, persistently high energy prices and weak investment in both the business and man- ufacturing sectors. In addition, the International Air Transport Association (IATA) indicated in its latest report, released in January 2024, that there was a strong recovery throughout the airline industry during 2023. In fact, on a global level, passenger capacity, which is measured in ASK (available seat kilometers), grew 24.1% vs. 2022, while passenger demand, which is measured in RPK (revenue-passenger kilometers), increased 25.3% over the same period. On parallel, cargo capacity, which is measured in ATK (available ton-kilometers), increased by 13.6% in 2023 compared to the previous year. How- ever, IATA has pointed out that there is a production crisis in both aircraft engines and aircraft worldwide. This is due to difficulties in the supply chain and higher raw material prices. In addition, there has also been a As for Latin America and the Caribbean, they are experiencing socio-political processes that have had impacted the economic scenarios of the region’s coun- tries. For example, during April 2023, general elections were held in Paraguay, where a new president (San- tiago Peña) and vice-president (Pedro Alliana) were elected for the 2023-2028 five-year term, in addition to senators, congressmen, governors and members of the departmental councils. The IMF estimated 3.1% growth for the global economy in 2023 and 2024. In turn, in November 2023, the second round of the presidential election was held in Argentina (the first round was held in October 2023, as part of the gen- eral elections), with Javier Milei winning 56% of the votes over Peronist Sergio Massa, who obtained 44% of the votes. However, the projections for Latin America and the Caribbean in the latest IMF report were adjusted with regard to the estimates that it presented in October. Along this line, the growth for the region was fore- cast to be 1.9% in 2024, with a downward revision of 0.4 percentage points compared to the October es- timate. This is due to Argentina’s negative growth in the context of a significant adjustment of economic policy to restore macroeconomic stability. However, the IMF expects Brazil to grow 1.7% in 2024. Mean- while, for 2025, the IMF estimates an expansion of 2.5% for the region. In Chile, after a 4-year constitutional process, the citizenry decided to reject the last proposed consti- tution, thus keeping the one approved in 1980, which has undergone several reforms since then. Thus, in February 2024, the Central Bank of Chile estimat- ed that Chilean GDP will close at -0.2%, and that the expansion ranges will stand between 1.25% and 2.25%, and between 2% and 3% for 2024 and 2025, respectively, according to its December 2023 Mon- etary Policy Report (IPoM, for its Spanish acronym). 1.9% Latin America and the Caribbean are expected to show 1.9% growth in 2024. 1.7% Brazil’s economy is expected to grow 1.7% in 2024. between 1.25% and 2.25% The range of expansion that the Central Bank projects for Chile in 2024 is between 1.25% and 2.25%. ANNUAL REPORT 202305 —Our Business —Financial results Financial results GRI 3-3 As of to December 31, 2023, LATAM reported a gain of ThUS$581,831, translating into a negative variation of ThUS$757,379 vs. the previous year’s ThUS$1,339,210. This positive balance for 2022 is explained by ThUSD$1,680,934 corresponding to positive non-operating impacts related to the Chapter 11 restructuring process, so taking this into account, the comparable amount is ThUSD -$341,724. Meanwhile, the net margin for the year reached 4.9% in 2023, while during 2022, it was 14.1%. In turn, adjusted operating income for 2023 amounted to ThUS$1,327,901, while adjusted operating margin reached 11.3%, 9.8 percentage points higher than the margin of 1.4% recorded in 2022. On the other hand, operating income for the financial year increased 23.9% vs. the same period of 2022, totaling ThUS$11,789,182. This is largely explained by a 33.8% increase in passenger revenues and a 17.4% contraction in cargo revenues. In detail, passenger revenues reached ThUS$10,215,148, com- pared to ThUS$7,636,429 at December 31, 2022. This varia- tion is due to a 23.1% increase in demand and an 8.6% hike in yields compared to the same period of the previous year. On other hand, load factor also shows a positive variation of 1.8 percentage points, reaching 83.1% during 2023, explained by a strong hike in demand. As for cargo revenues, they settled at ThUS$1,425,393 at December 31, 2023, i.e. 17.4% less than in 2022, explained 59 by the weakening of cargo yields, given the higher capacity. Nonetheless, cargo revenues increased by 33.9% compared to the same period of 2019. Aircraft Rentals reported costs of ThUSD$91,876 as a result of the different agreements reached by LATAM. The other income item recorded a total of ThUS$148,641 during the year, which translates into a decrease of 3.7%, in line with the previous year. On the other hand, adjusted op- erating costs amounted to ThUSD$10,461,281, higher than in 2022, mainly due to the increase in passenger operations and particularly in international operations, which grew by 36.2% compared to 2022. Wages and benefits increased ThUS$303,484, mainly due to higher crew costs, a 9.6% increase in the average headcount and compensation paid to employees during the last quarter of 2023. Fuel increased 1.7%, equivalent to ThUSD$64,715. This increase is mainly due to a larger operation, with a 17.5% increase in gallon consumption, net of a lower unhedged price of 13.6%. Agent commissions showed an increase of ThUSD$77,125, mainly as a result of the increase in operations related to pas- senger revenues, and the rise in operations across all segments, especially due to the growth of the international business. Depreciation and amortization increased by ThUSD$25,861, equivalent to 2.2%. This variation is mainly explained by main- tenance depreciation costs due to a higher average fleet size during the year compared to the previous year. Other rental and landing fees increased ThUSD$286,637, mainly in the costs of airport charges and handling services, impacted by the recovery of operations across all segments, both on the domestic and international fronts. Passenger services reported higher costs, translating into an increase of 47.5% vs. 2022, explained by a significant growth in demand. In fact, the number of passengers transported rose by 18.3%. We should note that aircraft leasing includes the costs relat- ed to leasing payments by the hour (PBH) for contracts that have been modified to incorporate that structure. For these contracts that include variable payments by the hour (PBH) at the beginning of the period and, after that, have fixed fees, a right-of-use asset and a lease liability were recognized for these amounts at the date of the contract modification. These sums continue to be amortized on a linear basis during the term of the lease from the date of contract modification, even if at the beginning they have a variable payment period. Therefore, and as a result of the application of the lease accounting policy, the result of the period includes both the leasing expense for variable payments (aircraft leasing), as well as the expense resulting from the amortization of the right of use included in the depreciation line and the interest on the lease liability. Maintenance expenses were higher (an increase of ThUSD$18,956), mainly due to a higher average number of aircraft compared to the previous year. The other operating expenses reported a percentage increase of 18.9%, due to the effect of higher costs in the crew, mar- keting, sales, and reservation systems variables. Overall, interest income totaled ThUS$125,356 which, com- pared to the ThUS$1,052,295 reported in 2022, represents a decrease of 88.1%. This variation is largely due to movements in the Chapter 11 restructuring process totaling $911.7 million dollars. Meanwhile, interest expenses decreased 25.9%, totaling ThUSD$698,231 by December 31, 2023, mainly explained by the significant reduction of the company’s debt by 40%, pos- sible because of the exit from Chapter 11. Other income/expenses totaled ThUSD$159 at December 31, 2023. On the other hand, the main items of the consolidated financial statement of TAM S.A. and its Subsidiaries, which produced a gain of ThUS$50,701 due to exchange rate dif- ferences at December 31, 2023, are: other financial liabilities, which generated a gain of ThUSD$26,871 thanks to loans and financial leasing for the acquisition of fleet denominated in US dollars; net accounts receivable and payable to related companies, which recorded a gain of ThUSD$46,531; and net accounts receivable and payable to third parties, which had a loss of ThUSD$17,532. We should note that the other items of net assets and liabilities generated a loss of ThUSD$5,168. Total revenues USD$11.8 billion Adjusted operating margin of 11.3% Net income of USD$582 million ANNUAL REPORT 202305 —Our Business —Financial results ECONOMIC VALUE GENERATED AND DISTRIBUTED 1 (USD$ THOUSANDS) SNAPSHOT FINANCIAL INDICATORS (USD$ THOUSANDS) GRI 201-1 a) Direct economic value generated1 (income, financial investments, sale of assets) b) Economic value distributed Operating expenses Employee wages and benefits Payment to capital providers (interest payment to lenders and dividend distribution) Payments to government (taxes) Community investments b) Retained economic value (a-b) 2023 11,914,538 11,507,537 9,036,619 1,583,337 872,621 14,942 18 407,001 1 This indicator provides an overview of how an organization generates value for its stakeholders. Operating income Adjusted operating expenses Adjusted operating income Adjusted operating margin Net profit/(loss)1 Net Margin Adj. EBITDAR EBITDAR margin Cash and cash equivalents2 /revenues last 12 months Net leverage3 2021 2022 2023 5,111,346 -6,230,630 -964,284 -18.90% -4,653,142 N/S 201,110 3.90% 20.50% N/S 9,516,807 -9,381,941 134,866 1.42% 1,337,137 14.07% 1,314,379 13.81% 24.30% 4.0x 11,789,182 -10,461,281 1,327,894 11.26% 581,550 4.94% 2,533,274 21.49% 23.9% 2.1x N/S Not significant. 1 Net profit before minority interest. 2 Includes the revolving credit line. 3 Adjusted net debt/Adjusted EBITDAR (last 12 months). MORE INFORMATION Risk Factors, in Annexes. Pages 141-153. . e l i h C , o g a i t n a S 60 ANNUAL REPORT 2023 05 —Our Business —Investment plan Investment plan NCG 461: 4.3 INVESTMENT PLANS Capital expenditures are related to aircraft acquisition, maintenance CAPEX, spare parts replacement, information technology-related CAPEX, fleet projects such as cabin refurbishment, freighter conversions and other specific strategic projects. Along this line, the LATAM group’s capital expenditures are recorded in the cash flow statement through the following lines: Purchases of Property, Plant and Equipment, Purchases of Intangible Assets, and partially, Payments to Suppliers for the Supply of Goods and Services (Leased Maintenance Payments). HISTORICAL CAPITAL EXPENDITURES as of December 31, 2023 (MILLION USD$) Purchases of Property, Plant, And Equipment Purchases of Intangible Assets Lease Maintenance Payments 2021 2022 2023 (597.1) (88.5) (163.7) (780.5) (50.1) (149.1) (795.8) (68.1) (294.5) On the other hand, the table below shows the LATAM group’s estimated capital expenditures for the years 2024, 2025 and 2026, which are subject to change and may differ from actual capital expenditures. In turn, pre-delivery payments (PDPs) and non-fleet CAPEX represent estimated cash outlays for the company that will be recorded under net cash flow from (used in) activities of investment in Property, Plant and Equipment and Purchases of Intangible Assets, as well as in net cash flow from operating activities in the case of maintenance related to operating leases. Meanwhile, fleet commitments such as the manufacturers’ retail price and the present value of lessors’ fleet commitments to be received under operating leases, according to International Financial Reporting Standards (IFRS 16), are presented in the table below. ESTIMATED CAPITAL EXPENDITURES PER YEAR as of December 31, 2023 (MILLION USD$) ESTIMATES PER YEAR as of December 31, 2023 (MILLION USD$) 2024 2025 2026 2024 2025 2026 Fleet commitments1 (511) (1,209) (757) Prepayments (PDPs)1 Non-fleet CAPEX2 (91) (1,402) (20) (1,182) (322) (1,196) 1 Includes all committed deliveries (from manufacturers and lessors) with estimates of current scheduled delivery dates. 1 Pre-delivery payments made by the LATAM group or revenue received by the LATAM group after the aircraft is delivered. 2 Including estimates of capital expenditures on spare engines and parts, fleet maintenance, projects and others, plus purchases of intangible assets. It should be noted that, in general, the LATAM group evaluates financing alternatives to meet its fleet commitments and, therefore, the amounts presented are not nec- essarily indicative of a cash outflow and, depending on the type of lease (operating or financial), the Cash Flow Statement will record the delivery of the fleet differently: in the case of finance leases, the cash outflow will be recorded under Net cash flow from (used in) investment activities based on the purchase price of the aircraft. However, 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 and, therefore, will not be recorded in the Cash Flow Statement per the accounting rules of the IFRS. 61 ANNUAL REPORT 2023 Stock information NCG 461: 2.3.4 STOCKS, THEIR CHARACTERISTICS AND RIGHTS LATAM Airlines Group S.A. is an open stock corporation registered before the Financial Market Commission (CMF, for its Spanish acronym), under Nº 306, whose shares are traded in Chile on the Santiago Stock Exchange, (BCS, for its Spanish acronym) and the Chilean Electronic Exchange-Stock Exchange (BEC, for its Spanish acronym). On the other hand, following the filing for Chapter 11, the American Depositary Receipts (ADR) program is no longer listed on the New York Stock Exchange (NYSE), but is traded in the United States on the Over-the-Counter (OTC) market. ANNUAL RETURN +22.92% +63.81% ADR Local share +24.73% +18.17% S&P 500 IPSA S&P 62 05 —Our Business —Sock information VOLUMES TRADED BY QUARTER—LOCAL STOCK (SANTIAGO STOCK EXCHANGE) 2023 First quarter Second quarter Third quarter Fourth quarter N° of shares traded (million) 20,210 35,920 55,150 61,900 Average price (CLP) 5.90 6.24 8.15 7.99 Total value (million CLP) 118,124 224,141 449,473 494,581 VOLUMES TRADED BY QUARTER - ADR 2023 First quarter Second quarter Third quarter Fourth quarter N° of shares traded 6,967,870 9,228,850 11,697,850 6,812,404 Average price (CLP) 0.4691 0.3814 0.6197 0.5473 Total value (million CLP) 3.27 3.52 7.25 3.73 LOCAL SHARE 2023 IPSA LT M 02/01/2023 29/12/2023 ADR 2023 S&P 500 ADR 80,0% 70,0% 60,0% 50,0% 40,0% 30,0% 20,0% 10,0% 0,0% -10,0% -20,0% 80,0% 60,0% 40,0% 20,0% 0,0% -20,0% -40,0% -60,0% 02/01/2023 29/12/2023 ANNUAL REPORT 2023 06 Safety In this chapter 64 Number 1 Priority Priority Nº1 64 06 —Safety —Number 1 priority NCG 461: 8.2 SUSTAINABILITY INDICATORS BY INDUSTRY GRI 3-3, 403-1 & 403-2 SASB TR-AL-540A.1 For the LATAM group, the safety of its employees, clients and the communities where it operates is fun- damental and the number one priority. In this sense, it bases its actions on the Safety, Quality, Health and Environment Policy, which establishes the highest standards to safeguard safety as a non-negotiable value in LATAM group. This document complies with the parameters established by the International Civil Aviation Organization (ICAO) and promotes the de- velopment of the organization’s Safety Management System for the identification, prevention and mitiga- tion of risks. The group’s safety culture focuses on the active par- ticipation of teams, continuous improvement of pro- cesses and constant monitoring of performance, with the aim of frequently perfecting safety indicators. In addition to rigorously applying the operational proce- dures established by the authorities, manufacturers, and the company itself as an airline operator, LATAM seeks to surpass its own standards. This is why it increasingly relies on technology and data provided by its systems for decision-making, and collaborates with international and national organizations, as well as with agencies chaired by authorities, with the aim of developing best practices to mitigate risks and promote a safe operation. INTEGRATED SAFETY MANAGEMENT SYSTEM (SMS) (SASB TR-AL-540A.1) The LATAM group’s Integrated Safety Management System (SMS) considers the areas of Health, Safety and Environment (HSE) and the Emergency Response Plan, meeting the requirements and guidelines of ICAO Annex 19 and the regulations required in the different countries where the group’s subsidiaries are headquartered. Along these lines, the SMS brings together tools and programs that enable LATAM to act proactively, mon- itor performance, identify risk situations, and react promptly to minimize them. In fact, the actions are guided by the matrix of risk factors and criticality degrees, updated periodically with data from internal analyses and events related to global aviation. In addition to the internal information that streamlines the prioritization of potential risks, the LATAM group annually reviews the risks highlighted in the IATA Annual Safety Report and publishes on its website a breakdown of the mitigation measures for each risk. In addition, it discloses its participation in organizations chaired by national and international authorities and organizations related to commercial aviation, with a focus on the safety of the sector. SMS 2023 results 25,801 hazards and dangerous situations* were iden- tified by the SMS. Ninety percent of these situations were mitigated through investigations or some type of audit. *Note: Risks and hazardous situations are broadly defined as any existing or potential condition that could lead to an accident or incident. The percentage that has not yet been mitigated has already been assigned a management level and will be handled in 2024, in line with internal procedures. Also, as part of the integrated system, the LATAM group conducts a series of periodic audits to improve its internal processes, as well as to identify new op- portunities in security matters. These are divided into three types: • 1. Periodic internal audits: They are carried out by the LATAM team and assess the maturity of the operational processes implemented in the Airports and Maintenance areas. • 2. Internal audits based on the guidelines of the International Air Transport Association (IATA) Op- erational Safety Audit: It aims to ensure compliance with local regulations and that all operational areas meet the highest safety standards in the industry. • 3. IOSA recertification audits: IATA’s team of auditors has been verifying compliance with IOSA standards in all subsidiaries since 2007. This process is carried out every two years and the most recent edition was held in 2023. The result of this process provides LATAM with improvement opportunities for all its safety processes. The SMS brings together tools and programs that enable LATAM group to act proactively, monitor performance, identify risk situations, and react promptly to minimize them. ANNUAL REPORT 202306 —Safety —Number 1 priority ANALYTICS AND ADVANCED DATA USAGE LATAM has been a pioneer in the aviation sector in the use of data from its routine operation to develop action plans and ongoing improvement of operational safety. Project Safety II Since 2020, the LATAM group has developed project Safety II, which generates valuable flight information and allows the analysis of different variables with the potential to affect operational performance, such as meteorological data, maintenance reports and flight crew alert levels, among others. In 2023, the growth of this project prompted the cre- ation of the Safety Data Department in the compa- ny, with the aim of supporting all operational safety directorate decisions. In addition, the quality and availability of data obtained from various sources was improved. For example, the Human Factor and Dispatch areas were involved, making it possible to broaden the collection of data from different sources and increase the correlation possibilities. This, in turn, opens the opportunity to add new teams from the Vice-Presidency of Security. Another relevant advance was the development of a new indicator (Safety Performance Index - SPI II), which makes it possible to visualize the nuances of performance in all phases of flight. All these advances have strengthened the capacity to generate correla- tions, identify trends and carry out other validation exercises to detect strengths and opportunities for improvement in the operation. ing valuable information to mitigate risk and prevent future recurrences. DATA MONITORING Aircraft dispatch processes After conducting a diagnosis of passenger boarding processes in 2022, which mapped the risks associat- ed with aircraft dispatch, the group has continued to strengthen these processes. In 2023, an automated monitoring system was implemented to collect actual data on potential safety events (Safety Performance Index- SPI) that were previously unavailable. Additionally, the FOQA provides information segment- ed by pilot, which is handled with absolute confidenti- ality. This data is housed in a mobile application called Pilot LATAM, a mobile application designed specifically for LATAM group pilots, which functions as a full op- erational information tool and allows crews to view details of their performance, compare it with the fleet average and access incidents identified during flights. WELL-BEING GRI 403-7 Through a series of improvements coordinated with Airport Operations in the boarding process, we were able to reduce potential security risk events by more than 90% per month, indicating a significant down- ward trend. This translates into improved control of the shipping process, reflecting the success of the interventions and improvements implemented during the year. While the LATAM group is concerned with the safety of all its employees, it is aware that they themselves are the main players in making its operations increas- ingly safer. Thus, the group invests on an ongoing ba- sis in generating awareness and commitment among all its teams and seeks to bolster the safety culture through training and initiatives in engagement and communication. Flights LLATAM has a Flight Operations Quality Assurance (FOQA) program designed to monitor flight data. This computerized system allows us to compare actual flight parameters with standard operating procedures (SOPs), as it collects information from each flight, automatically processes the data and identifies devia- tions in operations, facilitating an operational analysis of our procedures and the management of preventive maintenance processes. The FOQA is a key component in the Security Man- agement System, essential to detect and identify security breaches. Thanks to this program, in 2023, it was possible to monitor over 96% of flights, provid- Through internal campaigns, the LATAM group seeks to raise awareness among its teams about the importance of safe behavior. In addition, it has implemented an online platform that collects notifications of incidents and deviations. This valuable information is used to map risks and generate improvement plans for the constant evolution towards safer practices. Microlearning Project Four Microlearning Project courses were successfully implemented in 2023, which are complementary to the gate-keeper activation process (pilots in charge of analyzing flight data). These have been designed to strengthen key pilot skills in operational events. Based on the PBL (Problem-Based Learning) methodology, 65 65 ANNUAL REPORT 202306 —Safety —Number 1 priority these courses have raised the situational awareness of 128 pilots, marking a significant milestone in the improvement of safety and operational efficiency. Moreover, a detailed analysis of the root cause and contribut- ing causes is carried out in each situation, seeking to promote continuous improvement in any process that may have had an influence, even minimally, on these behaviors within LATAM. Human Factors Program Although this is a common problem in the industry and LATAM’s statistics similarly reflect what is happening at the sector lev- el, the organization continues to work on promoting measures together with the authorities to ensure a regulatory framework that establishes consequences for disruptive passengers and that protects the company should it decide not to transport a passenger deemed dangerous. CONSTANT IMPROVEMENT: TECHNICAL ASSISTANCE In 2023, the LATAM group’s Chilean affiliate passenger oper- ation collaborated with the Boeing Flight Operations Support Program (FOSP) to receive technical advice on flight operations safety and training, as well as to improve communications. In addition, the company participated in the Airbus Global Re- gional Airbus Safety Program (GRASP), which evaluated and strengthened the Safety Management System (SMS) and the Quality Management System (QMS). The evaluation included executive surveys, attendance at Safety Committee meetings, process reviews in Brazil and Chile, with a focus on passenger transportation, and in the United States, for cargo, as well as interviews with leaders in all areas. The final GRASP report provided valuable feedback to optimize our SMS, with the goal of implementing identified improvements in 2024. During this year, a Human Factors Manual was launched that establishes a theoretical framework for application in teaching and work settings. In addition, online training on fatigue and prevention of psychoactive substances was updated, reaffirm- ing the commitment to a safe and healthy work environment. This is in addition to the “Peer Support Pilot” program, which brings together volunteer pilots in all subsidiaries to develop indicators related to the psychological well-being of this role, and “SeguraMente”, which offers medical consultations and psychological support to pilots. DISRUPTIVE PASSENGERS GRI 403-7 In the last three years, disruptions in the LATAM group were mostly linked to COVID-19 pandemic protocols. In 2023, with the recovery of operations, alcohol consumption detected in our passengers has become the main trigger for disruptive behavior. In response to this, courses and training for airport staff have been updated and improved to identify passengers in an altered state prior to boarding. Each month, statistics on disruptive passengers are presented to the boards of directors and at the highest decision-mak- ing levels, with the purpose of reviewing these situations and taking pertinent actions. In addition, LATAM group has a Sexual Harassment or Sexual Molestation Procedure, which is activated in the event of this type of aggression towards its personnel, ensuring that their physical and emotional well-being is protected during events of this nature and providing professional support afterwards. 66 ANNUAL REPORT 202306 —Safety —Number 1 priority AIRPORT SECURITY When it comes to airport security, LATAM follows national and international standards and invests permanently in the continuous improvement of its processes so that the passengers and cargo it trans- ports arrive safely at their destinations. Security Management System (SeMS) Inspections During 2023, LATAM implemented the Security Management System (SeMS) in- ternational standard, with the purpose of further strengthening the structure of the pillars that make it possible to address and maintain airport and facility se- curity. This achievement applied to all LATAM group operations, considering both passengers and employees, and seeks to help ensure operational continuity and safeguard operations against possible threats and risks, with the highest levels of security. This system incorporates procedures for investigating undesirable situations that apply to the entire LATAM group to identify the causes of events, so that im- provement measures can be implemented to prevent the occurrence of new cases. Staff engagement and an organizational culture around safety are crucial to the SeMS objectives, so the Safety team defines the evaluation and validation of all content managed by the LATAM Corporate Training Academy, with a focus on occupational health and safety. They also participate in defining the content of security briefings for operational teams and often take an active role in these communication sessions. LATAM carries out safety inspections through a work plan that covers the different airport processes, considering infrastructure, mobile equipment, ladders, work-at- height systems and any condition or activity that poses a critical risk, to mitigate risks and the impact on people and operations both for the care of passengers (in accordance with aeronautical regulations) and for the care of employees. In addition, the goal is to fully comply with international and national regulations, as well as internal policies to immediately identify any breach of processes that may arise and that could create exposure to any event of illicit interference, for which reason we establish permanent monitoring of the way in which each of the tasks related to access control to aircraft, cargo holds and facilities are carried out, with particular emphasis on restricted areas. 67 ANNUAL REPORT 202306 —Safety —Number 1 priority EMERGENCY RESPONSE PLAN SECURITY INCIDENTS SASB TR-AL-540A.2 SNAPSHOT In 2023, there were no aviation accidents in the LATAM group’s operations. During the period, there was one incident that ac- tivated the Emergency Response Plan for the runway crossing event, which occurred in Florianopolis on July 12. The situation was resolved smoothly, after involving the Chilean and Brazilian committees, which provided all the necessary support for the proper disembarkation of all crew members and passengers. In addition, the relevant analysis was subsequently carried out to identify operational reasons and strengthen security structures. LATAM teams maintain the safety management systems active, monitoring each event for opportunities to improve processes, and supervising safety indicators to maintain ac- ceptable levels and seek constant improvements. As a result, we have achieved improved safety levels that are reflected in the absence of significant events. Accident and safety management NCG 461: 8.2 SUSTAINABILITY INDICATORS Aviation accidents1 SASB TR-AL-540A.2 Government measures for the implementation of aviation safety regulations2 SASB TR-AL-540A.3 Emergency Response 2020 2021 2022 2023 1 0 N/D N/D 2 0 0 1 Members of the emergency team People trained in procedures 2,814 746 2,240 3,400 N/D 3,500 573 3,549 N/A: not available. 1 In 2020: Accident with the crew. In 2022: Accident with crew on runway due to collision with fire truck and emergency landing due to bad weather conditions. 2 The indicator began to be collected in this way in 2022, so there is no information available for previous years. LATAM has an Emergency Response Plan, which determines what resources and people should be activated in the event of an air emergency; i.e., in incidents or accidents involving damage to property or people. The goal of this plan is to support the affected people and their families, acting as facilitator with the aeronautical authorities in the investigations and maintaining communication with the different stakeholders to ensure the continuity of the operation. Likewise, this plan establishes the organization’s bases for other types of emergencies that seri- ously affect operations, such as natural disasters, pandemics, strikes or severe contingencies. In fact, there are currently Emergency Committees in each of the LATAM group’s subsidiaries in Brazil, Chile, Colombia, Ecuador, Peru and Paraguay, as well as in cities where LATAM has personnel, such as Miami, Buenos Aires and Madrid. The committees participate in working groups, where they interact with experts from different areas, in addition to volunteers, who could provide support should there be affected individuals. Each year, these Emergency Committees are trained and emergency drills are carried out periodically to ensure the correct response of each area in the event of such a situation occurring. An important training event was the Safety Week held in 2023, which included training sessions focused on emergency response for all subsidiaries, as well as activations of the committees in Ecuador and Chile. Along this line, during 2023, classroom and online trainings exceeded three thousand employees. In addition, eight simulation exercises were carried out during the year, with the activation of one or more committees si- multaneously, to prepare the teams and systems for possible occurrences in the most efficient way possible. 68 ANNUAL REPORT 2023 07 Commitment to sustainability In this chapter 70 83 Objectives and results Circular Economy 71 87 Sustainability Strategy 72 Environmental management 76 Climate Change Shared Value LATAM AIRLINES GROUP REPORT 202307 —Commitment to sustainability —Objectives and results Objectives and results . r o d a u c E , s o g a p á l a G s a l s I 70 For years, LATAM group has sought to collaborate with sustainable development in South America, and in 2021, decided to raise the priority of this mission by placing it at the heart of its decisions. The group charted a course for the next three decades, marking a milestone in its history. This is how its Sustainability Strategy was born, as a result of a deep and thorough reflection on the LATAM group’s organizations, together with an open and committed dialog with its various stakeholders. This strategy is based on four pillars that aim to have a positive impact on the stakeholders with whom LATAM group interacts: Environmental Management, Climate Change, Circular Economy and Shared Value. Together, these pillars strengthen the group’s role as one of the players seeking to contribute to solving the social, environmental and economic growth challenges facing society today. It is thus that its name is established: “A necessary destination”. In each pillar of the LATAM group strategy, commitments, as well as challenging and traceable goals, were defined, which contribute to the United Nations’ (UN) Sustainable Development Goals (SDGs). All the initiatives that are part of the strategy seek to contribute especially to the following: SDG 3 Good Health and Wellbeing; SDG 5 Gender Equality; SDG 8 Decent Work and Economic Growth; SDG 9 Industry, Innovation and Infrastructure; SDG 12 Responsible Consumption and Production; SDG 13 Climate Action; SDG 15 Life on Land; and SDG 17 Partnerships for the Goals. ANNUAL REPORT 2023 07 —Commitment to sustainability —Sustainability Strategy Sustainability Strategy NCG 461: 8.2 SUSTAINABILITY INDICATORS BY INDUSTRY SASB TR-AL-110a.2 GRI 305-5 ENVIRONMENTAL MANAGEMENT CLIMATE CHANGE CIRCULAR ECONOMY SHARED VALUE COMMITMENT • To maintain and continuously improve the Environmental Management System in all our operations under the IATA IEnvA standard. 2023 GOALS • Strengthening of Environmental Management Programs. • Coordination of critical suppliers to support them in their efforts to improve their environmental management performance. PROGRESS IN 2023 • Establishment of strategic environmental management programs for the mitigation and/or management of environmental impacts and gradual coordination of critical suppliers. STATUS OF THE COMMITMENT • Implementation of environmental management plans. 1 Tons of CO2 equivalent (tCO2e). 2 Domestic emissions includes Scope 1 emissions, associated with fuel consumption, mainly from all passenger and cargo flights. In addition to land mobile sources, stationary sources and fugitive emissions (refrigerants). 3 For more information, visit: latamairlines.com/us/en/sustainability/circular-economy 7171 COMMITMENT • To achieve net zero carbon Direct emissions (Scope 1) using 2019 as the base year. • To reduce and/or offset the equivalent of 50% of domestic2 greenhouse gas (GHG) emissions by 2030, using 2019 as the base year. • To achieve net zero emissions by 2050. 2023 GOALS • To reduce and offset 780,806 tons of GHG1 emissions, including carbon offsetting programs with clients. • To make progress in the consolidation of a portfolio of preserva- tion projects in strategic areas of the region. PROGRESS IN 2023 • 850,932 GHG emissions1 managed (13% through operational improvements; i.e. emission reductions, and 87% by supporting the conservation of strategic ecosystems, mainly in the Colombian Orinoco region; i.e. offsetting). On the other hand, through LATAM’s carbon offsetting program, its customers offset a total of 66,419 GHG emissions1. STATUS OF THE COMMITMENT • Overall, the reduction of GHG1 emissions, the offsets made by the group and by clients under the LATAM carbon offseting program are equivalent to 850,932 tons of GHG3 emissions, translating into 15.9% of domestic2 emissions. COMMITMENT • Eliminate single-use plastics throughout the operation by 20233. • Aim to be a zero-waste-to-landfill group by 2027. 2023 GOALS • To reduce single-use plastics3 in the operation by 100%. • To make progress with the waste management system at a transversal level. PROGRESS IN 2023 • Elimination of 96% of single-use plastics3 across the operation. • Implementation of the system in the main bases. STATUS OF THE COMMITMENT • 96% of the target for the reduction of single-use plastics1 was achieved. The remaining 4% corresponds to a set of elements that could not be replaced or eliminated for legal, safety, sanitary or operational reasons, or because there were no replacement options available on the market. • New infrastructure and indicators for monitoring waste manage- ment were incorporated at the main bases in Brazil, Chile, Peru, Colombia, Ecuador and the United States. COMMITMENT To have the connectivity, capacity, and speed of our passenger and cargo operations for the benefit of communities in South America on three fronts: • Health • Environment • Natural disasters 2023 GOALS • To strengthen the network of strategic partnerships of the Avión Solidario program. PROGRESS IN 2023 • 43 partnerships with organizations, foundations and government agencies in five countries. • More than 4,500 individuals transported free of charge, equiva- lent to 26 full A320 aircraft • 485 tons transported free of charge for social and environmental causes, equivalent to 10 full B767F aircraft. STATUS OF THE COMMITMENT • The Avión Solidario program was bolstered through co-creation with the partnerships. • Work also began on the design of a system for measuring the social and environmental impact of the program. ANNUAL REPORT 202307 —Commitment to sustainability —Environmental management Environmental management LATAM’s environmental management system is guid- ed by the Safety, Quality, Health and Environment Policy, which establishes the group’s commitment to environmental protection, pollution prevention and the implementation of best industry practices to achieve this end. In addition, the document was approved by LATAM’s senior management, is reviewed at least once a year and is publicly available to its stakeholders. industry, the team maintained the certification of its Environmental Management System in the Unit- ed States subsidiary, through ISO 14.001 standards, which covers air cargo and aircraft maintenance ser- vices, including ORG (corporate and administrative activities); GRH (ground activities); MNT (maintenance activities); CGO (cargo and warehouse activities); and SEC (safety, security and environmental activities). In addition, during this period, we worked on updating the governance structure for the group’s environmental management, creating the Environmental Management Sub-directorate, which is part of the Sustainability Directorate, within the Corporate Affairs and Sustainability Department. Notwithstanding this progress, in 2024, one of the major challenges in terms of environmental management for LATAM will focus on continuing to strengthen the programs in its subsidiaries and the coordination of its critical suppliers, in order to support them in their efforts to bring the group’s operations to incorporate best practices at a global level. Brazil, Chile, Colombia, Ecuador and Peru have IEnvA-Stage 2 certification. In line with its policy, LATAM group applies a world-class, transparent, auditable and certified environmental management system in its operations in Chile, Colombia, Peru, Ecuador, Brazil and the United States. The main benchmarks and certifications used by LATAM group are the IATA Environmental Assessment (IEnvA) standard of the International Air Transport Association (IATA), as well as ISO standard 14.001. The former, present in Brazil, Chile, Colombia, Ecua- dor and Peru, consists of a voluntary environmental assessment program designed in two stages: • Stage 1 considers the commitment of senior man- agement, and the mapping of the relevant environ- mental legal requirements and the environmental aspects and impacts of the activities. • Stage 2 includes the setting of goals, implemen- tation of programs and operational controls, audits, and team training. As of 2022, LATAM and the subsidiaries mentioned above have IEnvA - Stage 2 certification, which in- cludes key business processes defined as Core and Core+ (MRO), corresponding to administrative activ- ities, flight operations, as well as aircraft overhaul, maintenance and repair. Likewise, in LATAM group’s ongoing quest to inte- grate the best environmental practices in the airline ENVIRONMENTAL COMPLIANCE NCG 461: 8.1.3 LEGAL AND REGULATORY COMPLIANCE- ENVIRONMENTAL LATAM’s Environmental Management System follows an ongoing process to identify and evaluate environ- mental compliance with applicable legal requirements in its various subsidiaries, under the guidelines pro- posed by the IATA Environmental Assessment Program (IEnvA). As part of this process, the organization has developed a procedure to identify and evaluate legal require- ments, to determine the applicable environmental legal requirements by country in a matrix, covering components such as water and energy use, waste management, atmospheric emissions and environ- mental contingencies. This matrix records the applicability of the require- ments in the different processes, the steps for their compliance, the individuals in charge of their im- plementation, as well as a list of evidence to verify compliance, among other details that streamline their handling. With regard to compliance deadlines, they are sub- ject to those established in the applicable standards. The Environmental Management System also has an environmental database establishing the compliance plans and the deadlines set for them. In addition, to ensure that IEnvA and ISO 14.001 standards remain current and constantly improving, LATAM carries out annual inspections of their facili- ties by country, along with drills on how to deal with environmental emergencies. These procedures make it possible to verify that the practical training received by personnel is implemented in accordance with the 72 ANNUAL REPORT 2023established protocols, to reduce any impact on the environ- ment and ensure the safety of the people involved. Based on the above, inspections, drills, and internal audits were conducted during 2023, which allowed us to strengthen the action plans to be applied in the different operations. This also made it possible to identify emerging applicable regulations, which have been integrated into the matrix to be addressed in a timely manner. COMPLIANCE1 NCG 461: 8.1.3 ENVIRONMENTAL LEGAL COMPLIANCE GRI 2-27 In 2023, under the reporting of environmental processes re- quired by General Rule No. 461, LATAM group has no fines outstanding and had three enforceable sanctions and/or an accumulated environmental liability at the end of the year2 totaling CLP$28,361,8323. On the other hand, three compliance programs have been approved and no compliance programs have been implemented. Last, it is worth mentioning that there are no remediation plans for environmental damage presented or implemented in 2023. 1 Considering internal and external consumption 2 Considering the Public Sanctions Registry of Chile’s Superintendency of the Environment (Superintendencia del Medioambiente) and equivalent agencies in other jurisdictions. 3 Value converted to Chilean pesos at the exchange rate established by the Central Bank of Chile as at December 2023 (R$182.04); the fines in Reals amount to R$155,800. MORE INFORMATION More information on the Environmental Management pillar is available in Spanish at https://www.latamairlines.com/cl/es/sostenibilidad/gestion-ambiental 73 07 —Commitment to sustainability —Environmental management NATURAL RESOURCES LATAM group seeks to reduce the en- vironmental impacts of its operation through eco-efficiency measures in en- ergy and water consumption. We should note that the energy con- sumed by LATAM is acquired through the power grid of each country; therefore, the composition in terms of renewable and non-renewable energy is built with the latest available information about the composition of the matrix of each of the countries, distributing the consumption according to the corresponding weight. P OW E R CO N S U M P T I O N (MW H)1 A N D E N E R G Y I N T E N S I T Y (MW H/F T E)2 GRI 302-3 2.2 9 7 3 3 6 , 1.4 9 2 3 9 3 , 1.7 9 1 4 7 5 , 1.2 7 7 1 4 4 , 2020 2021 2022 2023 Consumption ⚫ Energy intensity WATER EXTRACTION AND CONSUMPTION (m3)1 GRI 303-3 1 MWh: Megawatt 2 FTE: Acronym for “full-time employee”. UNIT 2020 2021 2022 2023 Extraction: Total municipal water supply Extraction: Fresh water (lakes, rivers, etc.) Extraction: Groundwater Discharge: Water returned to its source of extraction, at a higher or similar quality to that extracted Million cubic meters Million cubic meters Million cubic meters Million cubic meters 0.082 0.099 0.086 0.272 0 0 0 0 0 0 0 0 0 0 0 0 Total fresh water consumption Million cubic meters 0.082 0.099 0.086 0.272 1 Supply is obtained from the municipal networks of the various countries of operation, without LATAM’s direct collection of water. 2 100% corresponds to fresh water. ANNUAL REPORT 2023 07 —Commitment to sustainability —Environmental management INTERNAL ENERGY CONSUMPTION GRI 302-1 FUEL CONSUMPTION SASB TR-AL-110 A.3 UNIT 2020 2021 2022 2023 UNIT 2020 2021 2022 2023 Non-renewable energy Jet Fuel Gasoline Diesel Liquefied petroleum gas Natural gas Electricity2 Total non-renewable energy Renewable energy Ethanol Electricity2 Total renewable energy3 TOTAL TJ TJ TJ TJ TJ TJ TJ TJ TJ TJ TJ 76,826.10 3.97 97.74 6.28 0.29 35.96 88.734.84 24.32 118,5 5.41 0.11 50.47 133,991.16 162.53 67.49 8.75 0.02 21.772 156,368.83 5.16 111.20 366.17 N/A1 136.25 76.970,35 88,933.7 134,251.72 156,987.61 0.20 105.62 0.56 177.87 0.00 184.99 105,83 178,43 184,99 0.08 22.79 22,87 77,076.18 89,112.08 134,436.71 157,010.48 1 Natural gas is not among the energy sources for the year 2023. 2 The energy consumed comes from different sources. The share percentage of each source varies year over year, based on the power grid of each country. 3 In previous years, the share of renewable energy from each country’s power grid was used to determine LATAM’s share, as energy is acquired through said grids. As of 2023, what is reported as renewable energy only refers to the renewable energy acquired for which the company holds certificates. 74 LATAM fuel efficiency Passenger operations Cargo operations Fuel Consumption % of alternative fuels % of sustainable fuel litros/100 RTK litros/100 RPK litros/100 RTK GJ % % 30.1 3.2 20.7 76.826.100 0.0 0.0 31.7 3.4 20.1 88,734,840 0 0 30 3.7 22.1 133,991,160 0 0 29.8 3.1 23.1 156,368,834 0 0 ELECTRIC ENERGY CONSUMPTION4 - 2023 Non-renewable sources: 37,846 MWh 85.7% Renewable sources 6,330 MWh 14.3% 4 Based on information on the composition of the energy matrix of each country, with H2LAC as the source; this program was created in 2020 by the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) together with the World Bank, ECLAC, and the European Union’s Euroclima+ Program. ANNUAL REPORT 2023 07 —Commitment to sustainability —Environmental management SNAPSHOT ECO-EFFICIENCY Energy GRI 302-1 and 302-3 UNIT 2021 2022 2023 Energy consumption – ground and air operations Energy intensity Water consumption Waste Generation Environmental management Units with Environmental Management System (EMS)/Total Units Units with certified EMS/total units TJ MWh/100 RTK Cubic meters Tons % % 89,112 0.8 98,846 28,803 95% 90% 134,436.71 0.5 85,656 37,990 99% 99% 157,010.48 0.3 271,5711 37,367 100% 100% 1 The result for 2023 resembles the pre-pandemic operation in size, considering that consumption in 2019 was 216,626 m3. 75 ANNUAL REPORT 2023 Climate change 07 —Commitment to sustainability —Climate change NCG 461: 8.2 SUSTAINABILITY INDICATORS GRI 3-3 SASB TR-AL-110a.2 The climate emergency has positioned itself as one of the greatest global challeng- es today and potentially one of the most relevant that humanity will experience in the coming years. In this context, the aviation industry faces the challenge of uniting on multiple fronts to contribute to both the mitigation and adaptation of climate change. To this end, LATAM group has established various mechanisms, such as the implementation of new technologies to improve efficiency, opera- tional improvements to reduce fuel consumption, ecosystem conservation and carbon sequestration programs, and the development of a roadmap for the use of sustainable fuels, among others. It is crucial to strategically prioritize each of these efforts, considering both their effectiveness in the short, medium and long term, as well as the specific geographic conditions where they are applied. In this sense, the group seeks to balance climate urgency with the connectivity and sustainability needs of the aviation industry, fostering an informed transition that considers the necessary public policies and the availability of resources in the regions where it operates, as well as the timing of the actions. The group’s commitment to achieve net zero emissions in its operations not only involves the management of operational improvements and conservation strategies in critical areas, but also considers collaborative work with industry, public-private players in the value chain, NGOs and academia. In this sense, moreover, LATAM group has proposed to move forward with the disclosure of climate information, aligned with the transparency frameworks that are a global benchmark. LATAM’S MANAGEMENT OF CLIMATE CHANGE Operating Efficiency Both air and ground fuel efficiency initiatives, such as route optimization, ratio- nalizing the use of auxiliary power units, and weight reduction on flights, among others. New Technologies Fleet renewal, use of new software, among others. Sustainable aviation fuels (SAF) This type of fuel is crucial to achieve net zero carbon emissions in the operation. However, its production is only incipient in the world and nonexistent in South America, so it is necessary to develop an agenda with the different players to progress in its production and use. LATAM aims for SAF to represent 5% of its fuel consumption by 2030. Offsetting Emissions Development and participation in compensation programs based on strategic ecosystem conservation projects in Latin America. The initiatives involve clients and NGOs, among others. 76 ANNUAL REPORT 202307 —Commitment to sustainability —Climate change JOINT EFFORT In the aviation sector, effort coordination is essential, as tech- nological solutions for the transition to a low-carbon-emissions energy model are not yet available on a massive scale or are in the pilot stages. In this regard, LATAM group has aligned itself with the main international standards and agreements to contribute. In 2024, LATAM group will incorporate the results obtained in its risk and opportunity monitoring and management processes, as part of its continuous improvement approach. Depending on the evolution of these aspects, the need to expand on the identified risks or to re-evaluate them will be reviewed. In addition, a climate scenario analysis will also be carried out for two timeframes: medium and long term. TCFD Since 2022, LATAM group began work to incorporate the rec- ommendations of the Task Force on Climate-related Financial Disclosures (TCFD). The initiative seeks to consolidate best practices in climate risk management and to help standardize climate disclosures for all companies. Aware of the impacts that climate change could bring to the industry, LATAM group conducted its first climate-related risk and opportunity analysis under the TCFD framework in 2023. This exercise involved the countries where LATAM group has domestic operations, with the participation of more than 30 representatives from different areas of the organization, and aimed to identify the risks that could affect the group’s busi- ness in the medium (2030) and long term (2050). As a result of this process, 12 risks and opportunities were prioritized and will be published in 2024. This analysis identified significant information regarding the changes that could take place in the long term, based on weather patterns, to prevent possible physical risks, as well as transition risks. The latter, among others, are related to local, national and international regulations that apply to the operation. In this sense, the company seeks to adopt the best practices that allow it to anticipate these environmental re- quirements and maintain the initiatives it has been working on for several years, such as measuring and reducing the carbon footprint, improvements in resource and waste management, among others. CORSIA In 2016, the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA), a global initiative aimed at reducing the GHG emissions of international civil aviation, was established. This agreement is designed to be implemented in three stages: pilot (2021-2023), first phase (2024-2026) and second phase (2027-2035). In the first two stages and until 2026, countries’ participation is voluntary. Along this line, until 2023, 115 countries were part of the pilot phase and another eleven States, including Ecuador, had committed to begin in 2024. LATAM is governed by the CORSIA agreement and has designed its climate change targets to cooperate with the aspirations of that plan, on a voluntary and proactive basis. SBTi LATAM group continues to develop efforts in pursuit of achieving its goal of being a company with zero net emissions by 2050. In 2020, the company committed to establishing metrics based on the voluntary Science Based Target Initiative (SBTi). Since then, the SBTi has modified its registration requirements for the industry. LATAM group has continued to work diligently to improve its 77 climate strategy and increase transparency in its management. However, due to changes in SBTi requirements, the group is reviewing its ability to adhere, ensuring that the model adopted is the most appropriate to sustain the organization in the long term, in line with climate urgency. In a dynamic environment where new initiatives have emerged, LATAM approaches this decision with the seriousness it deserves; this requires informed and thorough reflection to establish the most effective en- gagement in this process. REDUCING EMISSIONS: LATAM FUEL EFFICIENCY NCG 461: 3.1 GOVERNANCE FRAMEWORK LATAM Fuel Efficiency is the corporate fuel-efficiency program, which considers initiatives focused on reducing consumption and improving operating efficiency to optimize their savings. Between 2011 and 2023, the group achieved 6.3% jet fuel ef- ficiency through the program, and the gross savings amounted to 77 million gallons—an equivalent of 737 thousand tons of CO2 that were no longer emitted. This is due to the increase in energy efficiency across the operation, taking as a baseline the start of the program. Meanwhile, in economic terms, savings were close to USD$237 million. The group has joined different initiatives to promote these results. In fact, some have already been routinely incorporated into the operation, based on lessons learned year after year, and program consistency. At the same time, the program seeks to encourage research and development measures that will make it possible to continue increasing efficiency by constantly implementing new measures. Some examples of initiatives to improve fuel efficiency are: • Use of external equipment to reduce auxiliary power unit consumption. • Implementation of advanced analytics models to reduce flight distance and time, improving flight planning, and therefore, fuel consumption. • Search for opportunities to eliminate unnec- essary weight during the flight, for example the in-flight water program, which consists in reducing the potable water load on the aircraft, based on different pre-calculated factors that ensure the availability of this resource during the flight, thus reducing fuel consumption due to less weight and at the same time, increasing the available cargo weight capacity. • Upgrades and replacement of engines, through adjustments to their original configuration, allow- ing a reduction in performance, to maximize fuel savings. In addition, the engines are washed to maintain their operation with greater efficiency. • Standardization of LATAM’s reserve fuel policy. ANNUAL REPORT 2023 07 —Commitment to sustainability —Climate change Through operational efficiencies, new technologies, sustainable fuels and offsetting, LATAM will seek to achieve its climate commitments. FLEET OVERHAULS In 2023, LATAM group continued to make progress on its commitment to have a fleet prepared to offer a safer, more comfortable and efficient travel experience. In fact, during the period, it incorporated Boeing wide-body aircraft, including five aircrafts of the 787-9 model, a last-generation aircraft that also emits 20% less CO2 than an average aircraft of previous generations, according to its manufacturer’s data. It also added eight A320neo and seven A321neo, models that are equipped with more fuel-efficient technology vs. previous versions, and therefore have lower associated carbon emis- sions. In fact, according to the manufacturer’s data, both are 20% more fuel efficient and reduce their acoustic footprint by at least 50% compared to previous generations. The group also added two Boeing 767-300F freighters to its fleet, as they have a modern air-conditioning system for transporting perishable products, enhancing versatility and efficiency in cargo transportation. Overall, LATAM group’s new fleet reflects the company’s com- mitment to efficiency and innovation in sustainability, priori- tizing investment in modern aircraft that contribute favorably to climate change mitigation in the aviation industry. 78 ANNUAL REPORT 202307 —Commitment to sustainability —Climate change Fuels (SAF) working group in Chile. The latter is part of the Vuelo Limpio (Clean Flight) program, which seeks, through industry collaboration and innovation, to achieve operational improvements that reduce emissions. LATAM group works closely with its corporate clients to promote the use of this sustainable fuel. During 2023, LATAM group established alliances with two corporate clients through LATAM Cargo, carrying out its first international flight using this type of fuel. This flight took off from Zaragoza to North America, using the first batch of SAF produced in Zaragoza by AirBP. Likewise, the group generated a second strategic alliance, also through LATAM Cargo, in which an equivalent amount of SAF was used to reduce emissions from a flight transporting flowers from Bogota to Miami during the Mother’s Day season. In addition, as part of its fleet overhaul plan and in collaboration with Airbus, LATAM group carried out its first Ferry Flight using SAF, with a flight from Toulouse (France) to Fortaleza (Brazil). A Ferry Flight is a flight that has a purpose other than transporting cargo or passengers, such as moving the aircraft from one base to another, or to a maintenance facility. In total, 10 such flights were conducted using sustainable fuels as part of this initiative. SAF - SUSTAINABLE FUELS NCG 461: GOVERNANCE FRAMEWORK Aware of the need to develop a more sustainable commercial aviation and move towards the decarbonization of the industry, LATAM group reinforced in 2023 its goal to incorporate sustainable aviation fuel (SAF) into its operations. According to data from the International Air Transport Association (IATA), SAF provides a reduction in emissions of up to 80% compared to traditional fuels, and is proposed as the most immediate tool to contribute to a more sustainable aviation operation. Currently, the development of the SAF market faces significant challenges due to high costs, ranging from 2 to 5 times higher than conventional jet fuel, and shortages in supply. According to IATA data for 2023, SAF production represents only 0.1% to 0.15% of total jet fuel consumption, which poses a major obstacle to its expansion. Added to this, there is no local production of SAF, despite the region’s potential for its production, as can be seen in cases such as Brazil and Colombia, countries that already have an established industry and experience in biofuels, or in the case of Chile, with its promising potential in the production of green hydrogen. Against this backdrop, LATAM group is working closely with various public and private sector players in the region to foster the creation and development of the SAF market, as well as to promote the creation of public policies tailored to local needs and realities. In this sense, LATAM group actively participates in different initiatives with the aim of generating conditions in the region to enable the development of SAF both at the public and private level in the various countries. An example of this was its representation in the National Sustainable Aviation Fuels Program (Programa Nacional de Combustível Sustentável de Aviação or ProBioQAV) in Brazil, the SAF Technical Roundtable in Colombia and the public-private Sustainable Aviation 79 Study on decarbonization options in Latin America with MIT and Airbus LATAM has a challenging target of 5% of the total fuel con- sumption of its fleet to come from SAF, to the extent that it is produced primarily in the region by 2030. Therefore, during 2023, together with Airbus, it has funded a Massachusetts Institute of Technology (MIT) Joint Program study on Global Climate Change Science and Policy. The study, entitled “Options to sustainably decarbonize avia- tion in Latin America: an assessment of carbon policies, carbon prices and aviation fuel consumption up to 2050,” analyzes scenarios for the deployment of sustainable aviation fuels (SAF) and explores avenues such as low-carbon hydrogen, direct air capture and bioenergy with carbon sequestration and storage. It also evaluates policy instruments, such as incentives and carbon taxes, to offset aviation emissions. Along these lines, the researchers of the MIT Joint Program aim to publish the results in April 2024 and their analysis includes viable recommendations for Brazil, Chile, Colombia, Ecuador, Mexico and Peru on ways to decarbonize the airline industry. With this in mind, LATAM expects to continue contributing to the innovation and development of the decarbonization of the industry and of the conditions to enable it in the region. ANNUAL REPORT 202307 —Commitment to sustainability —Climate change PRESERVE ECOSYSTEMS GRI 3-3 Within LATAM group’s climate change pillar, two fundamental aspects are the conservation of strategic ecosystems and the preservation of biodiversity. In line with these objectives, the group supports projects that contribute to these goals, using the carbon sequestration potential of these initiatives and making progress on emissions offsets as a complementary measure. As for eligibility criteria, LATAM group prioritizes nature-based solutions implemented in Latin America, recognizing the im- portance and need to protect the region’s natural resources. Collaborative work that generates environmental, social and economic benefits is especially valued, as is the engagement with local communities committed to the protection of eco- systems and the scalability of the initiatives. CO2BIO INITIATIVE In 2023, LATAM group reaffirmed its commitment to the CO2Bio alliance, an initiative of the Cataruben Foundation of Colombia and the community in the Orinoco Region of that country. The partnership aims to preserve and restore flooded savannas and forests, whose importance lies in their high capacity to capture carbon dioxide, the preservation of biodiversity and the positive impacts on the community. During the period, we worked jointly on structuring the initia- tive’s governance system and strengthened its corporate gov- ernance to streamline decision-making. In addition, compliance processes were consolidated and communication mechanisms were strengthened through two-way channels. Thanks to this progress, CO2Bio received two important awards. On the one hand, it was recognized among nearly 120 applicants with the BIBO award, granted by Colombian media El Especta- dor, winning first place in the category of Social Appropriation of Knowledge. On the other hand, non-profit organization Re- forestamos México also recognized this program for its positive impact on forest ecosystems with the “Los Boscares” award in the transportation and energy sector. Specifically, the CO2Bio project, which is located in the Ori- noco Region of Colombia and was supported by the Natural Wealth Program of the United States Agency for International Development (USAID), expects to preserve areas of great en- vironmental importance by 2030, totaling more than 575,000 hectares—the equivalent of more than three times the size of cities such as Bogota or Sao Paulo. In turn, it seeks to benefit 700 families in the area and contribute to the protection of around 2,000 species, some of them considered endangered, threatened or vulnerable. Moreover, it has the potential to capture 11.3 million tons of CO2 by 2030. EMISSIONS OFFSETTING (1 + 1 SCHEME) Aiming to contribute to the protection of the environment and ecosystems in a collaborative manner, as well as to engage its clients in these initiatives, LATAM group offers its corporate clients, in cargo and passenger operations, the opportunity to participate in the offsetting of emissions generated on their flights. Along these lines, the group developed its 1+1 Scheme compensation program, through which clients can choose from a portfolio of projects with high environmental value that have been previously verified and validated by LATAM group, to offset the emissions generated by their air travel. Then, for every ton that the client decides to offset, the group matches the number of tons offset by them to leverage that impact. In keeping with this commitment, the program expanded its scope in 2023 to allow final passengers of the affiliates in Peru, Ecuador and Chile to access this initiative. LATAM-supported projects contribute environmental, social and economic co-benefits to the communities. 80 ANNUAL REPORT 202307 —Commitment to sustainability —Climate change CARBON FOOTPRINT IN 2023 (t CO2e) GRI 305-1, 305-2, 305-3 Total by country LATAM Cargo group1 1,305,810 Peru 2,120,843 Ecuador 268,906 Colombia 758,648 Chile 3,263,633 Total by scope Scope 2 (indirect emissions from electric energy purchases) 5,217 Brazil 6,906,566 Scope 3 (other indirect emissions – value chain) 3,094,768 Scope 1 (direct emissions) 11,524,420 1 Considering the sum of the five countries where LATAM group has cargo operations. TOTAL: 14,624,405 t CO2e Challenges for 2024 Continue to strengthen fuel efficiency programs to maintain and improve the achievements to date. Make progress in the coordination of preservation and restoration projects in strategic areas of South America. Strengthen the agenda for the development and use of sustainable aviation fuels in South America. ACTIVITY COMPARISON 2020-2023 0 2 0 2 1 2 0 2 2 2 0 2 3 2 0 2 5,614,368 6,497,576 9,780,288 11,524,420 16,355 24,827 14,549 2,446 Scope 1 Scope 2 Scope 3 7,150 3,198,317 5,217 3,094,768 Note: With regard to the significant variation in scope 3 emissions reported in 2020 and 2021, compared to 2022 and 2023, this is because, in its process of constant improvement and strengthening of the carbon inventory, LATAM added into its report seven new scope 3 categories in all the countries as of 2022, measuring other indirect emissions from the value chain. CARBON FOOTPRINT SASB: TR-AL-110A.1 GRI 305 LATAM group monitors its impacts on climate change and the results of reduction initiatives through the greenhouse gas inventory, which is conducted annually based on ISO 14.064 and the GHG Protocol. In 2023, emissions totaled 14,624,405 tons of CO2e—a 12.7% increase compared to 2022. This growth was mainly due to the recovery of operations, which are approaching pre-pandemic levels. In fact, considering that LATAM group’s passenger ope- rations grew by 20.5% and the amount of cargo transported increased by 4.9% compared to the previous year, emissions intensity was reduced by 5% in its total footprint and 0.5% in its scope 1, measured in kgCO2e/100RTK. This reduction in scope 1 emissions intensity is mainly explained by the mea- sures implemented within the framework of the LATAM Fuel Efficiency program and the fleet renewal plan. In turn, the reduction in total footprint intensity is mainly explained by the decrease in scope 3 emissions, which fell by 3.2% to 2022. In turn, in view of its commitment to carbon-neutral growth in its direct emissions (Scope 1) compared to 2022, in 2023, LATAM group offset 674,513 tons of CO2e through carbon credits from preservation projects. Mainly from the project located in the Orinoco Region (Colombia1) of the BioCarbon Registry, which uses the BCR0002 methodology (Quantification of GHG Emission Reductions from REDD+ Projects). 1 Project ID: PCR-CO-635-141-001. 81 ANNUAL REPORT 202307 —Commitment to sustainability —Climate change 1Data corrected in relation to the 2022 Annual Report. 2022 2023 BREAKDOWN OF SCOPE 3 INDIRECT EMISSIONS GRI 305-3 Goods and services purchased Capital goods Activities related to fuel and energy (not included in scopes 1 or 2) Upstream transport and distribution Waste generated in operations Business travel Employee commutes Upstream leased assets Downstream transportation and distribution Processing of products sold Use of products sold End-of-life treatment of products sold Downstream leased assets Franchises Investments Others upstream Others downstream UNIT t CO2e t CO2e t CO2e t CO2e t CO2e t CO2e t CO2e t CO2e t CO2e t CO2e t CO2e t CO2e t CO2e t CO2e t CO2e t CO2e t CO2e 1,100,644 N/A 2,030,710 37,637 2,091 14,582 12,364 N/A N/A1 N/A N/A N/A N/A N/A N/A N/A N/A OTHER EMISSION INDICATORS GRI 305-4 UNIT 2020 2021 2022 Intensity Scope 1 Intensity Total footprint Intensity of net emissions in the total operation kg CO2e/1OO RTK kg CO2e/1OO RTK 76.31 76.87 kg CO2e/1OO RTK 75.04 80.55 80.76 76.1 76.67 101.8 97.02 MORE INFORMATION • Greenhouse gases: Inventory, emission factors and scope of information (Pages 154-155). • Significant atmospheric emissions (Page 155) 82 380,599 251,032 2,390,446 56,606 1,373 1,055 13,656 N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A 2023 76.16 96.65 92.19 SNAPSHOT NCG 461: 8.2 SUSTAINABILITY INDICATORS BY INDUSTRY GRI 305-1, 305-2 & 305-3 SASB TR-AL-110A.1 Total emissions Net emissions2 UNIT 20201 20211 2022 2023 t CO2e 5,655,551 6,514,570 12,985,755 14,624,405 t CO2e 5,521,062 6,138,957 12,411,550 13,949,892 Scope 13 emissions t CO2e 5,614,368 6,497,576 9,780,288 11,524,420 Scope 2 Emissions Market based Location based t CO2e t CO2e t CO2e 16,355 N/A 16,355 14,549 N/A 14,549 7,150 N/A 7,150 5,217 N/A 5,217 Scope 3 Emissions t CO2e 24,827 2,446 3,198,317 3,094,768 RTK: Acronym for “revenue ton-kilometers”. RPK: Acronym for “revenue passenger-kilometers”. 1 Not including the measurement of Scope 3 emissions. 3 Scope 1 emissions: refers to direct emissions—fuel consumption in air operations, fixed sources, and LATAM fleet vehicles, as well as fugitive refrigerant gas emissions. 2 Net emissions are the total emissions, minus the offsets made. N/A: Not applicable. ANNUAL REPORT 2023 Circular economy 07 —Commitment to sustainability —Circular economy GRI 306-1 y 306-2 ZERO WASTE ROADMAP LATAM has two challenging goals, which are: to seek to be a zero waste-to-landfill (read definition in the box) group by 2027, and to eliminate single-use plastics. Along these lines, the group ended 2023 with a reduction of more than 1,700 tons, representing 96% of the scope defined by LATAM as single-use plastics.1 These goals were established based on the diagnosis carried out in 2021 in the main areas that generate waste across the operation, such as in-flight service, cargo, maintenance and airport. Likewise, the survey made it possible to es- tablish the most relevant types of waste and, therefore, those where changes in processes and materiality would have the greatest impact. As a result, a strong cultural change and transversal involvement across different areas of the group were initiated, coordinating the transformation of processes, from the design of the travel experience through to the operational lines, with a common goal. These efforts, which resulted in the elimination of 96% of single-use plastics, involved relevant changes throughout the company, the highlight being the use of materials evaluated using sustainabiilty criteria, and the redefinition of prod- ucts used in the in-flight service, airports, lounges, maintenance, and offices. The limitations linked to the remaining 4% are related to legal, safety, health, and operational restrictions, or because there are no viable replacement options available on the market1. The Circular Economy pillar makes it possible to contribute to the fulfillment of four of the United Nations’ (UN) Sustainable Development Goals (SDGs). These are: SDG 8 Decent Work and Economic Growth, SDG 9 Industry, Innovation and Infrastructure, SDG 12 Responsible Consumption and Production, and SDG 17 Partnerships for the goals. The definition of our roadmap towards being a zero waste-to-landfill group in- volves differentiated actions according to the type of management and operation, whether it is LATAM’s own or outsourced. Among the strategies to be followed, we will strengthen and incorporate new facilities into our Waste Management System, we will work on the inclusion of supplier contract clauses for waste management and/or recovery of waste and on the creation of strong partnerships with key suppliers. The above, alongside the reduction in the use of materials, changes to reusable and/or recyclable materials, and services redesign of processes and services, among others. In 2023, more than 1,700 tons were reduced representing about 96% of the scope defined by LATAM for single-use plastics. equivalent to 266 million plastic bags. DEFINITION OF ZERO WASTE TO LANDFILL According to the TRUE (Total Resource Use and Efficiency) Zero Waste certification, “zero waste to landfill” refers to an average of 90% or greater overall diverting of non-hazardous solid waste from disposal in landfills, dumps, incineration and the environment. 83 1MORE INFORMATION For more information, visit https://www.latamairlines.com/us/en/sustainability/circular-economy ANNUAL REPORT 202307 —Commitment to sustainability —Circular economy PROGRAMS AND INITIATIVES GRI 306-2 Waste Management System at our operating bases: Second Flight: uniform upcycling Composting With expert advice, we implemented improvements in our Waste Management System in Chile (Santiago), Colombia (Bogota), Ecuador (Quito), Peru (Lima), Brazil (Guarulhos and São Carlos) and the United States (Miami). Among the improvements were the inclusion of new infrastructure for waste management and segregation, the implementation of recovery or recycling processes for different materials, indicator monitoring systems, the creation of a Recycling Committee, and guidelines and training for employees. In addition, modifications were made to the purchasing policy, including sustainability criteria. Project Fénix In 2023, the Phoenix Project was launched in Chilean and Brazilian operations, which seeks to recover aircraft parts for internal use, sale or reutilization by third parties. Along these lines, at the end of 2023, 1,800 aircraft parts were recovered for operational inventory (valued at ThUSD$5.2), which reduced the recovery time of an aircraft on the ground (AOG) by 26% and diverted more than 30 tons of waste from landfill disposal. Recycle Your Trip Program that seeks to separate and recycle waste from the domestic in-flight service. In Brazil, Chile and Peru, segregation of PET plastic bottles is carried out by the in-flight crew, and in Colombia and Ecuador, segregation of aluminum, PET plastic and Tetra Pak is carried out on the ground by the airports, in Bogota and Quito, respectively. In 2023, the program was launched in Brazil and bolstered in the countries where it was already in operation: Chile, Ecuador, Peru and Colombia, ensuring the recycling of PET plastic bottles. This allowed more than 170 tons of these bottles to be recycled. The Second Flight program allows LATAM to give a second life to its employees’ unused uniforms and transform them into new products. Through Second Flight, the company not only reduces the impact on the environment with the conversion of textile waste, but also is also able to build a more sustainable community through partnerships, employment generation, and the encouragement of responsible consumption. During 2023, we worked in partnership with 14 organizations in Bra- zil, Chile, Colombia, Ecuador, Peru and Paraguay. Thirty-one tons of unused uniforms were handed in, enabling the creation of more than 21,000 new products such as key rings, handbags, passport holders, purses, luggage identifiers and cases. Some of these products were then used in the group’s events and activities, while others were sold and generated income for the craftswomen in the program. More sustainable lounges The group is working on a gradual transformation of its lounges to offer a more sustainable experience through the use of renewable energies, elimination of single-use plastics, waste segregation, water and energy efficiency, among others. Throughout last year, LATAM, together with the Chilean consulting firm Ecoretorna, conducted a diagnosis of Chile’s lounges and evaluated their gaps in order to obtain TRUE Zero Waste and LEED O&M certifications. These verify criteria related to zero waste, energy and water efficiency, resource use, and environmental quality, among others. Based on this information, we will continue to make progress on the processes and implement best practices in the other LATAM lounges At our maintenance base in Chile, the organic waste generated in the mess hall is segregated by the employees themselves. In this pro- gram, 33 tons of food waste were composted. In addition, 157 tons of wood were composted at the base. Project Upcycling Brazil 22 tons of disused products that were previously part of LATAM’s operation were recovered. Some of them were redistributed and others sold, through the LATAM Brazil Guild Association (GRETAM, for its Portuguese acronym), including 81 triple seats, 42 trolleys and 1,207 used crew bags, among others. Donations In Brazil, 29 used notebooks, 21,960 snacks, 1,913 emergency kit bags, 600 units of masks, 1,232 rolls of toilet paper and 180 units of aprons were donated. Meanwhile, in Colombia, 480 masks (face- masks) were donated, in addition to items that passengers forget on the planes and do not claim, such as neck rests, toys, hats and caps, books and eyeglasses. At the same time, support was provided to the Pudahuel commune through the donation of water during the rain and river flooding emergency in Chile. Also, in Peru, 175 desk chairs were donated to support the Ciudad de Papel Foundation. 84 ANNUAL REPORT 202307 —Commitment to sustainability —Circular economy SINGLE-USE PLASTICS GRI 306-2 Over the past three years, LATAM group has been working on one of the biggest challenges on which it decided to embark after launching its Sustainability strategy in 2021: eliminating single-use plastics from the operation by 2023. This path has involved promoting a cultural change to do things differently, as well as many challenges, such as involving dif- ferent areas of the group transversally, from travel experience design to operational lines, adjusting internal processes of each airline and with suppliers, looking for alternatives, increasing budgets, among others. Thus, LATAM ended 2023 having made significant progress in the elimination of single-use plastics throughout its operation, managing to reduce more than 1,700 tons, which translated into about 96% of the scope defined by LATAM1 as single-use plastics, equivalent to 266 million plastic bags. The remaining 4% corresponds to those elements that could not be replaced or eliminated for legal, safety, sanitary or operational reasons, or because there were no replacement options available on the market. The group will continue to work on finding solutions to reduce its waste, replace materials for reusable, recyclable, and/or biodegradable ones, expanding its scope and strength- ening its awareness of its waste. Some concrete examples and additional efforts to the defined scope are highlighted below. Economy Cabin: Maintenance and offices: • Plastic cups were replaced by paper cups, cutlery and stirrers by bamboo utensils, disposable pans (food containers) by reusable ones. • Plastic bags were replaced by trolleys, trays and paper bags for transporting aircraft maintenance items. • The plastic bags containing rest items were replaced with paper tapes. • Item separation bags inside the aircraft cabinets were eliminated. Business Cabin: • Plastic cups were replaced by paper or reusable cups in offices. Cargo Despite falling short of the established goal, the group made significant efforts to reduce the use of plastic film and increase recycling in the cargo operation. • The bags used to cover rest items (blankets, pillows, headphones and throws) were replaced with reusable cotton bags. • Reusable blankets to cover pallets for cargo transportation in Chile and Brazil, which have led to a reduction of up to 90% in the use of plastic film in certain processes. • The bags that covered slippers and contained the elements inside the amenity kits were eliminated. • 3M machine and tapes, which allow an 80% reduction of plastic film in the storage process of cargo imports in Chile. • Amenity kits: the toothbrush has been replaced by a bamboo one, and the socks and eye covers are now made of recycled, vegan and cruelty-free material. These products are designed by South American artists chosen for their emerging career path and/or for being transformers of their communities. Aeropuertos • New labels and courtesy bags made 100% of paper were implemented. This resulted in a reduction of 53 tons of plastic film use and recycling of 208 tons (16% more than in 2022). These combined efforts are equivalent to avoiding the use of more than 100,000 new rolls of plastic film. Although the reduction of plastic waste is the main focus of the cargo affiliates in matters of circular economy, added are other initiatives such as those related to the repair of pallets to be reused in the same operations or, in some cases, converted into leisure furniture, tables, and others. 1MORE INFORMATION For more information, visit https://www.latamairlines.com/us/en/sustainability/circular-economy 85 Lounges • Toothbrushes were replaced with bamboo toothbrushes, plastic spoons and stirrers were replaced with reusable metal spoons, plastic bags were eliminated from towels and amenities, and anti-sneeze plates were incorporated to replace plastic film for food (in Bogota). ANNUAL REPORT 202307 —Commitment to sustainability —Circular economy Percentage of waste transported to landfills WASTE DISPOSAL GRI 306-3, 306-4 Y 306-5 WASTE 5,3% 2023 2022 2021 3.9% 5.8% 14.4% 2020 6.583 t 37,367 t 37,990 t 28,803 t Total waste generated UNIT 2020 2021 2022 2023 Total waste generated Transported to landfills Percentage of hazardous waste Percentage of non-hazardous waste tons % % % 14.4% 73% 27% 5.8% 93% 7% 3.9% 94% 6% 5,3% 90% 10% Note: The waste shown in the graph corresponds to waste for which there are documents supporting its disposal. Therefore, the distribution does not represent LATAM’s overall waste generation, mainly because in several of the operation’s facilities, for non-hazardous waste that goes to landfills, the service provider does not render supporting documents. In addition, we are currently improving the control process for our overall waste generation, which is why these values could experience variations; for instance, those related to hazardous waste generated during wastewater treatment. 86 Waste not intended for disposal Preparation for reuse Recycling1 Other recovery operations1 Waste intended for disposal1 Incineration (with energy recovery)1 Incineration (no energy recovery)1 Transfer to landfill1 Other disposal operations1 Total waste 1 Off site. UNIT HAZARDOUS NON-HAZARDOUS TOTAL t t t t t t t t t t 133 0 133 0 33,389 374 36 304 32,676 33,522 1,819 0 1,626 194 2,026 229 0 1,679 118 3,845 1,952 0 1,759 194 35,415 603 36 1,983 32,793 37,367 Note: The waste data comes mainly from the information generated in the bases where we have our own operations and those places where we can access this information. Waste management is part of our environmental management system. In this process, waste gen- eration points are identified, waste is classified according to its type and composition, stored and finally transferred to an external recipient for recycling or final disposal, its traceability being a fundamental matter, as it is related to regulatory compliance. ANNUAL REPORT 2023 Shared value 87 07 —Commitment to sustainability —Shared value GRI 3-3 y 203-1 Since 2011, the Avión Solidario (Solidary Plane) program has reflected LATAM group’s commitment to being an asset to society in South America. The group offers its connectivity, structure and transportation capacity to support, free of charge, organizations that address needs in three areas: health, environment and natural disasters. During these years, the program has been strengthened with a collaborative ap- proach, and in 2023, it totaled 43 strategic alliances within five countries with domestic operations: Brazil, Chile, Colombia, Ecuador and Peru. LATAM group’s partners are organizations, foundations and governmental agencies that support the needs of the region and work alongside LATAM group to generate a positive impact on the community through connectivity. The relationship with the organizations is based on the concept of co-creation, so that each partnership established within the framework of the program can also bring initiatives that generate value for their environments and communities. In this manner, the program contributes directly to the fulfillment of three of the UN Sustainable Development Goals (SDGs), namely SDG 3 Good health and Well-being SDG 13 Climate Action and SDG 17 Partnerships for the Goals. SNAPSHOT SOLIDARY PLANE GRI 3-3 GRI 203-1 Health Air tickets donated Organs, tissues, and stem cells transported Medical supplies Disasters UNIT Number Number Number Cargo transported as humanitarian aid Tons Environment Animals rescued and transported Recyclable materials transporteds Number Tons 2021 3,210 976 59 3 192 195 2022 3,554 964 4,577 149 246 170 2023 4,563 1,847 6881 155 122 256 1 The decrease was due to a reduction in the number of requirements during the year. ANNUAL REPORT 2023 07 —Commitment to sustainability —Shared value AVIÓN SOLIDARIO (SOLIDARY PLANE) HEALTH ENVIRONMENT DISASTERS Organs and tissues Donation of airline tickets Animal Rescue Removal of recyclable waste Humanitarian aid Transportation of 1,847 organs and tissues free of charge for transplants in Brazil and Chile, from islands such as Chiloé and Easter Island. More than 4,500 patients, medical personnel and healthcare teams were transported free of charge for treatment or surgery. 1,847 animals transported, free of charge, in Peru and Brazil for rehabilitation, conservation and protection, including birds, turtles, monkeys, primates native to the Brazilian Amazon Rainforest, flamingos, boas, otters and penguins. Professionals linked to the execution of conservation projects and work with the community were also connected. 275 tons of waste were removed and transported from Easter Island /Rapa Nui (Chile), San Andres (Colombia), and the Galapagos Islands Archipelago (Ecuador) for their proper management and recycling. The program collaborates with waste management in strategic areas, due to their environmental importance, as is the case of these island destinations. 104 tons of various items for humanitarian aid were transported. These included tents for refugees, food, clothing, hygiene items and other donations. Individuals who were survivors of natural disasters and emergencies, as well as support personnel for various causes, were also transported. 88 ANNUAL REPORT 2023 08 Employees In this chapter 90 Better, simpler and more transparent 99 Who makes up the LATAM group 08 —Employees —Better, simpler and more transparent GRI 3-3 ORGANIZATIONAL HEALTH In 2023, the LATAM group achieved its best-ever result in the McKinsey & Com- pany Organizational Health Index (OHI), a survey that has been conducted for a decade, and that mainly evaluates work climate and motivation aspects. The 78 points obtained is one points higher than the last evaluation carried out in 2022, positioning the group’s companies among those with the best organizational health in the world. Furthermore, 2023 results also stood out for the record voluntary participation in the survey, as 79% of the total workforce of the group’s companies took it, which translates into more than 25,000 responses at the time. It should be noted that this survey has questions that evaluate different strate- gic focuses for the LATAM group, such as leadership, technological adaptation, diversity and inclusion, and employee experience, which includes meaning and/ or purpose, as well as psychological safety, among others. 78 points in the Organizational Health Index in 2023—the best in LATAM’s history. People management is one of the critical processes for the companies in the LATAM group in implementing the mission to connect people and destinations. In this task, the group’s companies consider structured training and career advancement practices that respond to the transformations and trends of the labor markets of the countries in which they operate. They also consider dialog and approachability between the staff and management of each company, which are important factors in bolstering the joint commitment to the execution of the business strategy and in making the Companies in the LATAM group better and better, simpler, and more transparent. Along this line, the dialog agenda includes meetings led by the Human Resources departments and the leaders of different areas of the group’s companies on top- ics such as leadership, sustainability, diversity and inclusion, among others. The goal is to bolster the strategic alignment and empathy towards the employees of the Companies in the LATAM group, and gather insights that make it possible to improve human capital management. Other bodies that reinforce the permanent dialog are: • LATAM News: Weekly meetings between leaders and their teams. • Expanded: Periodic meetings conducted by the vice-presidents. • 1:1 Accompaniment: Specific conversations between the employee and their leader to support the professional individual training and development process. We should note that leaders are trained to manage their teams and act in align- ment with the leadership model defined by the LATAM group. In fact, they are evaluated in their role as heads of the teams via the leadership index and the tool called “Barometer”. The tools include, among others, variables that allow the group’s companies to measure progress toward their objectives of simplicity and transparency, as well as compliance with leadership practices, such as timely feedback, team meetings, 1 to 1 meetings, and recognition. In addition, there is a measurement from the team itself toward their superiors, making it possible to extract a 360° view of the leader’s performance, whose fundamental role is that of driving overall development. Better, simpler and more transparent 90 ANNUAL REPORT 202308 —Employees —Better, simpler and more transparent 36.3 2021 42.7 2022 49.9 2023 Average of 50 hours of training per employee. TRAINING NCG 461: 5.8 TRAINING AND BENEFITS GRI 404-1 & 403-5 AVERAGE TRAINING (H/EMPLOYEE) The LATAM group’s training policies establish the guidelines and principles for the skills and knowledge development processes in the different areas of the group’s airlines and, in turn, are focused on ensuring compliance with all applicable local requirements and regulations. In fact, in their procedures, the compa- nies of the LATAM group establish the periodicity, the updating system, the selection and training of instructors, and the different responsibilities that ensure that the training programs are carried out. Among the subjects that have been addressed in these spaces are operational and air safety; workplace safety; diversity and inclusion; leadership; commercial and customer service skills; in-flight service; human factors; dangerous goods; internal procedures of the group’s companies; Code of Conduct (Compliance); and technical specialties for aeronautical maintenance. Along this line, during 2023, the LATAM group invested USD$13.2 million in professional training activities for its teams, which translates into 0.12% of total operating income. Meanwhile, 32,139 individuals were trained (90.36% of the total workforce) in matters such as operational and job safety; diversity and inclusion; leadership; aeronautical maintenance; emergencies; first aid; risk prevention and hazardous goods; among others. As a result, a total of 1.6 million hours of classes or training were completed, with an average of 50 hours per employee. 91 AVERAGE TRAINING IN 2023 (H/EMPLOYEE) NCG 461: 5.8 TRAINING AND BENEFITS GRI 404-1 Senior management Management Leadership Operators Sales force Administrative Other professionals Other technicians MEN WOMEN 12.6 12.9 29.0 45.0 11.9 16.4 38.0 14.2 6.6 11.0 21.0 51.4 11.9 11.7 71.4 12.1 Note: the calculation takes into account the average of the group’s companies. ANNUAL REPORT 2023 The LATAM group’s companies have a Succession Plan that identifies potential re- placements for the CEO and main executives among internal and external profes- sionals. This plan is reviewed and updated annually and, in the event of the exit of critical executives, is the first thing that is reviewed to decide on the replacement. On the other hand, with some possible successors, development plans are worked out to better prepare them to take over the higher position. HIRING AND TURNOVER GRI 401-1 FUNCTIONAL CATEGORIES Senior Management CEOs Vice-presidents Directors Management Senior managers Managers Assistant Managers Airport Operations control center Sales force Sales operations Customer care Administrative Support activities and general roles Throughout 2023, the companies in the LATAM group hired 6,827 individuals, re- sulting in a hiring rate of 19%. Meanwhile, the turnover rate was 10.84%, which is lower than the figure for 2022 (11.4%). Leadership Area managers Department heads Other professionals Middle management in support activi- ties Operators Cargo operations Maintenance Other technicians Command crew Cabin crew 08 —Employees —Better, simpler and more transparent PERFORMANCE REVIEW GRI 404-3 SUCCESSION PLAN NCG 461: 3.6 RISK MANAGEMENT Annually, the Companies in the LATAM group hold a performance evaluation pro- cess based on objectives, aligned with skills differentiated by segment. Executives, middle management, supervisors and cabin and airport operational areas are part of this process, designed to contribute to the development of each employee and of the human capital within each organization. The competencies defined are aligned with the organizations’ strategy and include aspects such as safety, risk management and compliance, as well as health and safety, among others. This measure seeks to ensure compliance with policies and procedures that are crucial for the LATAM group’s companies, understanding their relevance and their stakeholders. In addition to the competency-based evaluation, at the beginning of each period, these teams establish measurable annual goals, which are evaluated by their man- agers and have a feedback process to generate relevant conversations that facilitate continuous improvement and decision-making. During 2023, 99% of the employees1 of the Companies in the LATAM group subject to the process took part in the performance evaluation. 1 78% of the total number of employees of the LATAM group’s companies were due to receive a performance evaluation in 2023. 92 ANNUAL REPORT 202308 —Employees —Better, simpler and more transparent NEW HIRES AND WORKFORCE TURNOVER IN 2023 GRI 401-1 LATAM Airlines Brazil LATAM Airlines Chile LATAM Airlines Colombia LATAM Airlines Ecuador United States Regional Office LATAM Airlines Peru Others4 Total NEW HIRES TURNOVER TOTAL HIRING RATE 1 TOTAL2 TURNOVER RATE3 2,957 1,689 876 122 466 590 127 6,827 8.31% 4.75% 2.46% 0.34% 1.31% 1.66% 0.36% 2024 700 311 30 384 326 79 5.69% 1.97% 0.87% 0.08% 1.08% 0.92% 0.22% 19.19% 3,854 10.84% 1 Total hired/Total workforce as at December 31, 2023. 2 Total number of employees who left the group voluntarily or due to severance, retirement, or death in service. 3 Total number of employees who left the group voluntarily or due to severance, retirement, or death in service/total workforce as at December 31, 2023. 4 LATAM group operations in other countries in the Americas, Europe and Oceania. 6,827 people were hired during the year 93 MORE INFORMATION: Annexes (Pages 156-162). BENEFITS NCG 461: 5.7 POSTNATAL LEAVE AND 5.8 TRAINING AND BENEFITS GRI 401-2 The Companies in the LATAM group provide their employees with a series of benefits that are not part of the remuneration. These include: 1. Stress management in the workplace: The Wellness Pro- gram of the Companies in the LATAM group focuses on stress management in the workplace and on promoting employees’ well-being. This program consists of four components: “Getting to Know Each Other” to foster connections, “Travel Club” with travel tips, “Wellness Tips” to improve mental, emotional and physical health, and “LATAM Club”, offering discounts to em- ployees and their families in various categories. This program is accessible through the LATAM Portal and RH Connect. • Getting to Know Each Other: A monthly section that allows employees to meet and connect with different individuals from the LATAM group’s companies. Up to two people per month per country are featured. • Travel Club: This section offers the presentations and record- ings of each live session where, month after month, a worker from one of the companies in the LATAM group showcases a new corner of the world. From their own experience, they share the main tips and advice to inspire, without boundaries, the next adventure, connecting with the Staff Travel benefit. • Wellness Tips: A space where useful information and articles are published monthly to enhance the wellbeing, self-care and mental health of workers across the companies in the LATAM group. Health and Fitness, Education and Training, among others, which may vary by country. In fact, as an employee of one of the companies in the LATAM group, they can also access many of the discounts that are part of the benefits of one of the group’s companies in other countries and not only those in the employee’s country of residence. 2. Wellness and health initiatives: Each company in the group manages different initiatives aimed at promoting physical ac- tivities. For example, during summer, the group’s companies in Chile invite employees to participate in a variety of free sports activities held at facilities known as “LATAM Park”. This includes reserving courts or pitches for various sports or enrolling in classes, such as Zumba, functional training, or spinning, among others. In addition, all employees with permanent and fixed-term contracts are provided: • Life insurance: Given the importance of prevention in diffi- cult times and with the support of loved ones in mind, most of the companies in the LATAM group have life insurance for their employees. • Health insurance: Given that employees’ health is one of the main concerns for the companies in the LATAM group, they have private medical insurance which includes, among other things, coverage for outpatient and inpatient medical services, medicines and treatments. In fact, in some companies in Chile, it also includes free telemedicine on topics such as psycholo- gy, nutrition, sports medicine, chronic disease support, sleep disorders, sexual health and LGBT+ counseling. Likewise, the group’s companies in Chile, have a collective Isapre health plan agreement with Colmena for preferential and fixed prices. • LATAM Club: Exclusive network with discounts and promo- tions for employees of the companies in the LATAM group and certain additional beneficiaries, with different benefits that are offered in all countries and in more than ten categories, such as: Hotel and Tourism (with large hotel chains), Gastronomy, • Medical Assistance Insurance on business trips outside the base country: Transcending in the care of their workers during the performance of their duties, the companies in the LATAM group have travel assistance insurance to take care of them in the event of illness and accidents while they are on duty ANNUAL REPORT 2023 08 —Employees —Better, simpler and more transparent outside their countries of residence. This also extends to both cabin and flight crews in the performance of their duties. 3. Part-time work options: For some specific roles, part-time contracts are avail- able that allow employees to work fewer hours per week in lieu of traditional full-time contracts. This program is available in different countries, according to their national regulations. 4. Teleworking: Depending on the nature of their duties, certain employees of the Companies in the LATAM group can work in hybrid mode, which consists of two days working in the office and three days working from home. In addition, some specific roles work 100% from home because of their functions, such as the IT teams and the Contact Center. The companies of the LATAM group cover some expenses derived from hybrid work, such as food and internet costs, pursuant to the regulations of each country. 5. Flexible work schedules: For certain countries and specific job positions, the LATAM group offers the option of flexible working hours, in accordance with na- tional regulations. This implies a flexible schedule that allows employees to decide when to start and/or end their working day, based on their individual needs and within the time range defined by the companies where it is applied. 6. Childcare facilities: In accordance with the regulations of each country, child- care benefits are granted to working women to care for their children after the postnatal period, or they are provided childcare contributions, as an alternative for parents who work shifts or whose child has a health condition that makes them unfit for childcare facilities. 10. Ticket discounts benefit (Staff Travel): As part of their value proposition, the companies in the LATAM group enable their employees and their beneficiaries to get to know the world through the Staff Travel ticket benefit. Through it, they get access to an annual coupon book on routes operated by the LATAM group to reach more than 140 destinations around the world, using tickets subject to vacancy with a 100% discount (2), with a 90% discount (12), with a 50% discount (12) and confirmed tickets whose discount and number varies by sublevel. In addition, workers have access to unlimited flights with significant discounts on more than 90 airlines with agreements. These coupons apply for each worker and for each registered beneficiary according to the current policy. 11. Special benefits of the LATAM Pass frequent flyer program: The companies in the LATAM group allow employees registered in the LATAM Pass program to access special benefits that complement the Staff Travel benefit experience, in- cluding: a special mileage bonus when registering for the first time with LATAM Pass, double mileage accrual on the purchase of Staff Travel tickets and the option to purchase Staff Travel tickets directly with miles. The latter is implemented in several countries and work is underway to make it available in all countries where the group operates. 12. Special benefits in ground handling services offered by LATAM: Complement- ing the Staff Travel benefit experience, the companies in the LATAM group allow workers to access discounts on ground handling services offered to commercial passengers (car rental, hotels, tours, etc.). Along this line, all the countries include discounts on car rentals and we are working to include hotel discounts as well. For Chile, Brazil, Peru and Paraguay, special discounts also apply to all other services. 7. Lactation facilities: Some facilities of the Companies in the LATAM group have dedicated lactation rooms in the workplaces. These spaces offer privacy, con- venience, storage and hygiene for mothers to express breast milk. This support program is available in different countries, depending on their national regulations. 13. Loans: Certain companies in the LATAM group offers financial support in the form of loans catering to different groups of workers, which are applied according to local conditions in the different countries’ current collective bargaining agree- ments. This is done to help employees faced with various situations during their working lives. 8. Maternity and paternity leave (postnatal): The companies of the LATAM group guarantee the granting of maternity and paternity leave for mothers and fathers in accordance with the legal regulations of each country. 9. Paid family care leave beyond parental leave: Certain companies of the LATAM group guarantee the granting of paid family care leave for their employees, in accordance with the legal regulations of each country. 94 ANNUAL REPORT 202308 —Employees —Better, simpler and more transparent others, existing in the societies where it operates. It should be noted that, in line with the Diversity commitments, which aim to achieve a gender balance of around 40/60 by 2030 at all functional levels, the LATAM group incorporated more women in the roles of pilots and maintenance mechan- ics, and reached a total ratio of 39.2/60.8 in those categories. The group’s progress in building increasingly inclusive work environments was also reflected in the results of the Inclusion Evaluation. This diagnosis considers the organizational systems and leadership practices that the group carries out, in addition to the perception of subgroups of employees regarding equal opportunities for growth and professional success. Thus, in 2023, the LATAM group reached 78 points in the evaluation, one more than in 2022, maintaining a positive trend over the last three years. LATAM group aspires to achieve a gender balance of around 40/60 by 2030 at all functional levels. DIVERSITY, EQUALITY AND INCLUSION NCG 461: 3.1 GOVERNANCE FRAMEWORK and 5.4.1 EQUALITY POLICY GRI 3-3; 405-1 The companies in the LATAM group address diversity and inclusion in a broad and comprehensive way, aware of the challenges related to its different social groups. Along this line, the recruitment and selection processes, which adhere to the Global Diversity and Inclusion Policy, are supported by a network of foundations, organizations, and consultants specialized in attracting and hiring plural talents. Furthermore, working hand in hand with an external consultant, the companies in the group gather the opinion of employees from all the countries where they operate, identifying the differ- ent experiences and outlooks on the subject. In addition, there are agencies of open dialog with leaders in the Human Capital department and internal periodic measurements regarding the workforce’s perception on key aspects of the organizational culture, the internal value proposition and employee experience. These actions, in addition to other specific actions, allow the group to strengthen inclusion, seeking to ensure that all indi- viduals who are part of the group’s companies can contribute their capabilities fully and feel that they belong. In fact, some of the transversal actions developed are: • Informing and educating employees to strengthen the culture of inclusion. • Develop inclusive leadership. • Gather information that supports decision-making and timely management of initiatives to promote diversity and inclusion. In addition, the LATAM group has set diversity goals focused on increasing the representation of women in leadership and technical roles; increasing the representation of people with disabilities in different roles; and promoting plurality in pro- fessional profiles to reflect the diversity of race and ethnicity, generation, sexual orientation and gender identity, among 95 ANNUAL REPORT 202308 —Employees —Better, simpler and more transparent WORKERS BY GENDER AND CATEGORY OF THE COMPANIES IN THE LATAM GROUP GRI 405-1 SALARY RATIO (WOMEN/MEN) 1 NCG 461: 5.4.2 WAGE GAP GRI 405-2 Senior management Management Leadership Operators Sales force Administrative Other professionals Other technicians LATAM group MEN 59 416 1,030 11,002 180 483 1,617 6,654 21,441 MEN % WOMEN WOMEN % AVERAGE2 MEDIAN3 85.5% 64.2% 64.9% 68.4% 24% 46.9% 60.7% 52.1% 60.2% 10 231 556 5,064 567 546 1,044 6,109 14,127 14.4% 35.7% 35% 31.5% 75.9% 53% 39.2% 47.8% 39.7% Senior management Management Leadership Operators Sales force Administrative Other professionals Other technicians 87% 94% 95% 92% 98% 97% 97% 89% 87% 95% 95% 91% 98% 98% 97% 90% *LATAM has no professionals in the Auxiliary category. PAY EQUALITY NCG 461: 5.4.2 PAY GAP GRI 405-2 The companies in the LATAM group have policies and practices in place to ensure equitable compensation among employees, based on their roles and responsibilities. Along this line, the policy begins with the position weighting methodology (points and grades) to define the relative weight of each position with- in the organizations. Additionally, salary scales by grade are defined, through market surveys, to position each employee within the salary range defined for their grade. It should be noted that all individuals within the same pay grade have the same income range (between 80% and 120% of the segment), but the particular position of each one in the range will depend on aspects such as seniority and per- formance, which are the only determining factors for income differences. In fact, there is an annual review of merit income, which is always based on the individual’s performance. 96 1 Proportion of women’s gross hourly wage vs. men’s gross hourly wage in each functional category. Gross salary includes all fixed and variable pay, such as base salary, social laws, bonuses, commissions, or others. 2 The calculation methodology considers the average income by country, pay grade and seniority category, excluding data where there is no record for both genders. 3 For the calculation of the median, the values of the gross hourly salary of women and men are ordered from lowest to highest (considering the groups by country, pay grade, and seniority category, and excluding data where there is no record for both genders), and the central value of the first group is divided by the central value of the second group. FUNCTIONAL CATEGORIES Senior management CEOs Vice-presidents Directors Management Senior managers Managers Assistant Managers Leadership Area managers Department heads Operators Cargo operations Maintenance Airport Operations control center Sales force Sales operations Customer care Administrative Support activities and general roles Other professionals Middle management in support activities. Other technicians Command crew Cabin crew ANNUAL REPORT 2023 08 —Employees —Better, simpler and more transparent JOB SAFETY NCG 461: 5.6 OCCUPATIONAL SAFETY GRI 3-3, 403-1, 403-2, 403-7 & 403-9 Safety is a fundamental and non-negotiable value for the companies in the LATAM group. This commitment is set forth in the Safety, Quality, Health and Environment Policy and translates into the promotion of an Occupational Health and Safety management system aimed at preventing workplace injuries and illnesses for all members of the operation. The supervision of this system, which comprises various oc- cupational health and safety programs, is the responsibility of the leaders of each operational area, who apply the system’s guidelines and receive support from the Corporate Safety area. The companies in the LATAM group observes regulatory compliance in all countries where they operate and ensure comprehensive compliance with the LATAM group’s Quality, Health and Environment Policy. The companies have established a comprehensive workplace safety governance strategy that encompasses several key procedures: • Hazard identification and risk assessment: The companies in the LATAM group have procedures in place for systematic hazard detection and risk assessments. In each case, control measures are defined in the processes and facilities, ensuring workers’ protection and well-being. • Occupational safety inspections: The companies in the LATAM group conduct periodic inspections and detailed reports describing identified risks and potential impacts on operations and people, including mitigation action plans2. • Management and Control of Action Plans: With a focus on prevention, this process reduces operational risks and impacts by implementing action plans and addressing root causes identified during inspections. To prioritize these plans, the companies in the LATAM group use the Action Plan Index (API), which makes it possible to evaluate, prioritize and integrate the different potential risk mitigation plans. • Change Management Evaluation: In addition, hazards as- sociated with internal and external procedural changes are proactively identified and mitigated, safeguarding the safety of new ways of operating. Likewise, the companies in the LATAM group evaluate the ef- fectiveness of their management system on an ongoing basis by monitoring indicators related to accident rates, such as the injury rate and the potential Serious Injury and Fatality (SIF) indicator. The latter was included during 2023 to strengthen the anticipation of possible risks and the implementation of preventive measures. Overall, these indicators are reviewed against annual targets on a regular basis in all countries and operational areas within the companies in the LATAM group. This record also includes third-party service providers that collaborate with the compa- nies in the LATAM group, who must contractually comply with their local regulations and, in some cases, actively participate in the monitoring of these safety indicators. The availability of information facilitates the prioritization and integration of the different action plans through the Action Plan Index (API), which evaluates risks based on their probability and severity, making it possible to determine the most efficient plans in the different cases. 2 During 2023, safety inspections were carried out on the critical risks iden- tified by the companies in the group, through a thorough work plan. This process involved inspections of more than 1,100 pallet trucks, more than 600 forklifts, more than 2,000 anchoring systems, 800 man lifts and 2,400 ladders. In addition, more than 800 infrastructure inspection reports and 9,000 inspections focused on safe behavior (IPS) were performed. 97 SNAPSHOT HUMAN CAPITAL MANAGEMENT LATAM GROUP COMPANIES NCG 461: 5.8 TRAINING AND BENEFITS 2021 2022 2023 Total employees Turnover rate1 Average hours of training2 Total individuals trained (% of total workforce) Investments in training (% of revenues) 29,114 22.5% 36.3 N/D N/D 32,507 11.4% 42.7 30,600 (93%) 0.14% 35,568 10.8% 49.9 32,100 (90%) 0.12% OHI survey Result Quartile 77 1 77 1 78 1 1 Employees who left one of the companies in the group (voluntarily, due to severance, retirement, or death in service)/Total employees as at December 31. 2 Hours of training in the year/Average workforce. 0 fatality year 2023 0.61 accidents per 100 workers 0 workplace accidents with serious consequences year 2023 year 2023 ANNUAL REPORT 2023 08 —Employees —Better, simpler and more transparent OCCUPATIONAL SAFETY1 NGC 461: 5.6 OCCUPATIONAL SAFETY Accident rate (per one hundred workers)2 GRI 403-9 Fatality rate3-4 Occupational disease rate (per 100 workers)5 Average number of days lost due to accidents6 GRI 403-9 Accident rate per occupational injury with major consequences GRI 403-9 7,8-9 Absenteeism rate 2020 0.39 0 0.03 12.54 0.01 4.4 2021 0.48 0 0.04 10.24 0.00 4.7 2022 0.64 0 0.03 11.48 0.00 4.1 2023 0.61 0 0.03 11.62 0.00 4.4 TARGET 0.63 0 N/A: information not available. N/A: Not applicable. 1 Some indicators in this section began to be counted in this way in 2022, so there is no information from previous years. 2 Total work accidents/Average workforce X 100. 3 Excluding those related to accidents in transit and those suffered by leaders of trade union institutions because of, or in the performance of their trade union duties. 4 The calculation of the rate follows the formula: Total fatalities per work accident/Average workforce X 100,000. 5 Total occupational diseases/Average workforce X 100. 6 Total days lost due to work accident/Total work accidents. NB: The count of lost days begins on the day after the accident. 7 Accidents related to some critical risk and high-impact events (accidents resulting in over 100 days lost) represent 1.5 in the calculation. 8 Rate calculation formula: total injuries with work interruptions/average no. of employees x 100. 9 Accidents resulting in such damage that the worker cannot recover, does not recover, or is not expected to fully recover their state of health from before the accident, within six months. MORE INFORMATION • Employee profile (gender, nationality, age range, seniority, people with disabilities): Pages 156-158. • Postnatal leave: Pages 161-162. • Formality of work (type of contract, type of work hours, work flexibility): Page 159. • Freedom of association: Page 159. • Idle days due to work stoppages: Page 159. 98 ANNUAL REPORT 2023 08 —Employees —Who makes the LATAM group EMPLOYEES BY COUNTRY IN 2023 12,018 Men 6,670 Women 4,836 3,887 Women Men 1,239 1,043 Women Men BRAZIL CHILE COLOMBIA Who makes up the LATAM group GRI 2-7 35,568 individuals Men 300 197 Women 896 Men 315 Women 1,747 1,601 Women Men ECUADOR UNITED STATES PERU Men 405 414 Women OTHERS 21,441 Men 14,127 Women LATAM GROUP EMPLOYEES BY AGE RANGE IN 2023 EMPLOYEES BY SENIORITY IN 2023 EMPLOYEES BY COUNTRY IN 2023 606 From 61 to 70 years old 38 Over 70 years old 3,377 From 51 to 60 years old 8,894 From 41 to 50 years old 11,366 Over 12 years 15,401 Under 3 years 8,846 Under 30 years 13,807 From 30 to 40 years old 3,093 More than 9 and up to 12 years 2,331 More than 6 and up to 9 years 3,377 From 3 to 6 years 99 1,211 United States 3,348 Peru 819 Others 497 Ecuador 2,282 Colombia 8,723 Chile 18,688 Brazil ANNUAL REPORT 202309 Clients In this chapter 101 The best experience The best experience GRI 3-3 LATAM group seeks to give its passengers the best experience, from the moment they choose their flight, until they pick up their bags upon arriving at their destination. In addition, it seeks to build long-term relationships with its clients by de- livering exclusive benefits through its frequent flyer program, LATAM Pass. During 2023, the group continued to integrate improvements into the travel experience, with new cabins for greater com- fort, technology that provides autonomy and makes every decision more agile, award-winning gastronomy, and in-flight entertainment with exclusive content. All this, while ensuring punctuality and a range of service options. In addition, dialog channels are kept open to receive feedback in the search for constant improvement and, of course, safety is a top priority for the group. New cabins In 2023, LATAM group, made progress in the aircraft cabin transformation process, contributing more flexibility to serve different customer segments and offering more comfort, es- pecially on long-haul journeys. 101 09 —Clients —The best experience Along this line, during the past year, the group received five additional Boeing 787-9 Dreamliner aircraft, with a completely overhauled cabin interior, including a Premium Business cabin: full-flat seats, direct aisle access, greater privacy, and space for personal items; an Economy cabin, with state-of-the-art seats; and a renovated in-flight entertainment system with 18-inch screens in Premium Business and 12-inch screens in Economy. In addition, in 2023, the group began receiving Airbus A320Neo and A321Neo aircraft with the new Airspace cabin configuration which, among its new features, includes personalized lighting, new luggage racks with up to 60% more space, bathrooms with antimicrobial surfaces, and seats with tablet holders so that passengers can use their personal devices more comfortably. On the other hand, the group completed the overhaul on its narrow-body fleet, implementing the latest cabin standards. In this class, we also find the Premium Economy class, which offers more foot space, blocked middle seat, exclusive luggage space, and a differentiated gastronomic service. In-flight service overhaul During 2023, the menu was revamped to include local South American products that reflect the regional heritage, with high quality ingredients and an additional main course option, as well as the inclusion of new service elements. In addition, on long-haul flights, an initiative was launched to value the talent of up-and-coming female chefs in the region through the co-creation of signature dishes with LATAM chefs, which is offered in the Premium Business and Economy cabins. In addition, new snack varieties were introduced in the Economy cabin on domestic flights in Brazil during October, providing more flavors and quality, renewed every two months. It also increased the range of flights offering the full range of liquids to accompany snacks, including water, coffee, soft drinks and juices. Circular Economy Increase in Premium Economy rows Last year, LATAM group increased the number of Premium Economy seat rows on seven routes within Brazil to meet growing demand in the market for the enhanced level of ser- vice that the Premium Economy class delivers. In-flight Wi-Fi connectivity By the end of 2023, LATAM completed the implementation of Wi-Fi in all narrow-body aircraft of LATAM Airlines Brazil, and began installation in Spanish-speaking markets, ending 2023 with 23% of the Spanish-speaking fleet connected. With the installation of this service, passengers will be able to access the free messaging service, as well as purchase browsing and streaming packages, based on their preferences. Throughout 2023, 96% of single-use plastics were eliminated from the whole in-flight experience for both Premium Business and Economy cabins, achieving a reduction of more than 1,700 tons, to be replaced with rotable and/or bio-based materials, such as paper cups, bamboo cutlery and sugarcane lids. In this sense, in Business class, the rest items come in reusable bags and the amenity kits, which have been designed by up-and- coming South American artists, are made of friendly materials. In addition, LATAM launched the “Recicla tu Viaje” (Recycle your Trip) program in the Brazilian domestic operation, which is already operational in the domestic markets of the group’s subsidiaries. On this point, it is worth noting that LATAM man- aged to recycle more than 120 tons of PET bottles. LATAM Play LATAM Play is the platform that seeks to provide a high-quality entertainment experience with the latest in-flight releases to satisfy the tastes and preferences of each passenger. Thus, LATAM Play allows clients to access different content from their own personal devices on narrow-body aircraft, while passengers of wide-body aircraft access the system through in-flight screens, which provide the largest content library in South America. During 2023, this platform offered over 170 movies, 430 series and 100 music albums, as well as docu- mentaries, games and in-flight reading alternatives. During the same period, LATAM group launched its partnership with major streaming platforms HBO Max and Paramount+. By 2024, the company aims to increase its content offer by over 50%, consolidating its position as a leader in the region, with world-class content. ANNUAL REPORT 202309 —Clients —The best experience Better service at airports The signage and image of all the network’s airports was updat- ed and improved to achieve both greater brand visibility and greater simplicity in the client orientation process. In addition, the image of the premium check-in was renewed to provide a better experience for frequent flyers. Likewise, the group set up operations at more than ten new airports (for new routes) to continue connecting clients. New lounge in Lima In early 2023, the company decided to build a new LATAM Lounge in Lima, Peru, which will span 2,400 m2 in two lounges: the Signature Lounge and the Premium Lounge. This milestone will allow LATAM group to consolidate its network of own lounges in its most important hubs. During the second half of the year, progress was made in the design process and in late 2023, the bidding process for con- struction began, which will be carried out throughout 2024. In addition, in May 2023, LATAM’s alliance with Visa was imple- mented in the Bogotá Lounge. Dialog channels and personalized attention The group has adopted a proactive approach to better un- derstand its clients’ preferences and expectations through a monitoring and analysis model that allows it to collect data on customer interactions and feedback. This data analysis is used to continuously adjust the services offered, ensuring that the customer service and solutions provided are aligned with the changing needs and expectations of LATAM’s customer base. In addition to improvements in digital channels, LATAM group has strengthened its customer service capabilities through its contact center, providing clients with a centralized touchpoint to obtain assistance and resolve queries. This has become a fundamental element of the customer service strategy, pro- viding fast, efficient and personalized service to meet clients’ demands at all stages of their travel experience. App LATAM LATAM App: A notice was implemented to notify clients when the boarding of their flight begins, to reduce their waiting time at the boarding gate. In addition, the process to purchase tick- ets, request cabin upgrades and check on flight status was improved, and the stages for purchasing additional services, such as extra baggage or seat choice, were simplified. Other relevant developments in the app were the option to bring forward or postpone the passenger’s trip, complement the trip with lodging, car rentals and packages, and request assistance and special services. LATAM group has implemented significant improvements in its communication channels with clients, covering a wide range of platforms, from its mobile app to its website and the use of WhatsApp as an additional form of contact. These enhance- ments have not only expanded interaction options but have also been designed to offer a more personalized experience focused on each client’s individual needs. In 2023, the app positioned itself as a relevant channel for the client’s day of travel, reaching three million active users per month and 46.5% of passengers using the app on their flight by December 2023—8% growth over the same period in the previous year. Similarly, 33% of frequent flyer program mem- bers have created a user in the application, with 64% of them being high-value passengers. 102 Automatic check-in (for domestic flights) and digital self- check-in at kiosks or through the App Coverage of this service was extended over the last year, reaching 92.5%. LATAM group completed the modernization of its narrow-body fleet, implementing new standards in passenger cabins. Automatic Bag Tag LATAM group is a pioneer in South America in implementing technology that allows the client to do the bag drop autono- mously. This improves the passenger experience by reducing queuing times. Thus, in 2023, 26 airports had self-bag drop available, representing a coverage of 79%. In turn, in 2024, the expectation is to continue to increase coverage at new strategic airports and add more machines at existing airports. Facial recognition by biometrics during boarding Until 2022, LATAM group had a two-step biometric boarding system, which managed the individual’s identity through facial recognition technology and the scanning of their boarding pass, both in Miami (MIA) and New York (JFK), in the United States. In late 2023, the group implemented new technology to further streamline the boarding process with a one-step biometric system in Miami (MIA). This change allowed passengers to carry out both the identity check and boarding procedures, with the sole use of the facial recognition system. The group seeks to further expand the implementation of this system to New York (JFK), Orlando (MCO), Los Angeles (LAX), Boston (BOS) and Atlanta (ATL) during the first half of 2024. ANNUAL REPORT 202309 —Clients —The best experience and complementing them with money, which makes LATAM group’s destinations more accessible. In 2024, LATAM group wants to bring the program even closer to its members, seeking to accompany them not only when they travel, but also in their daily lives. Along this line, it will seek to give greater tangibility, liquidity and accessibility to the program through the growth of its non-air ecosystem, and the strengthening of its financial partnerships and its value proposition for members, delivering an experience in redemption, accumulation, digital and personalization. At the same time, for this year, LATAM has the challenge of having a program that is not only more present, but also simpler and more personalized, allowing program members to enjoy more and more of the benefits of belonging to the largest loyalty program in the region. TECHNOLOGY THAT CONNECTS Since 2021, each LATAM cabin crew member has a tablet and online connection to access different infor- mation from the database to better serve passengers. This device provides information about whether the client had any type of inconvenience in previous seg- ments, such as a delay in a connection, if they require some special type of food or special assistance, and even if it is their birthday. We should note that this tool inspired a group of crew members to record safety instructions in videos using the sign languages of each of the five countries where LATAM has domestic operations, to provide guidance to hearing-impaired passengers. ASD CLIENT SERVICE CERTIFICATION LATAM was the first airline group in South America to receive certification for training customer service teams to serve passengers with Autism Spectrum Disorder (ASD). The training was provided by Au- tism Double-Checked, an organization dedicated to preparing and advocating for adequate care for this audience and reached ten thousand employees who interact with clients. Specifically, the training considers three steps: Au- tism Aware, which provides awareness tools; Autism Ready, which provides professionals with job-specific information and trains them for situations that may arise and how to address them; and Autism Dou- ble-Checked, focused on publishing the information so that the autism community can be guided and have a more enjoyable flight. Likewise, with the support of the Hidden Disabilities Sunflower program, LATAM implemented the use of a lanyard that seeks to discreetly and voluntarily pro- mote the self-identification of people in a situation of disability that cannot otherwise be recognized with the naked eye. The lanyard is available at 19 airports in the group’s network in Brazil, Chile, Colombia, Ec- uador, and Peru, and is delivered free of charge to anyone who requires it when traveling. The initiatives mentioned above are a first step in generating change processes that improve the travel experience of passengers with ASD and help teams identify challenging factors for that audience. LATAM PASS The LATAM Pass Frequent Flyer program has 45 mil- lion members. This allows members to earn miles or points for trips taken, and for the purchase of goods and services in the financial partnership network, enabling them to reach different membership cate- gories and enjoy the benefits associated with each of them. These benefits include cabin upgrades, premi- um boarding, VIP lounge access and priority baggage delivery at destination. Nonetheless, passengers can also redeem points or miles for airplane tickets or products. Along these lines, during 2023, new benefits were implemented to continue delivering the best to LATAM Pass members. These include preferential call center service for all Elite members, elimination of the ser- vice charge on ticket redemptions and simplification of the upgrade model with complimentary segments. It also includes improved upgrade priority for Elite members with LATAM Pass credit cards, delivery of lifetime categories, and exclusive remote boarding transportation service at Congonhas for Black Signa- ture members in electric cars in partnership with Audi. Likewise, there is the launch of the “Miles + Money” product in the redemption of tickets, where program members can purchase their tickets using their miles, 103 ANNUAL REPORT 202309 —Clients —The best experience ON-TIME PERFORMANCE GRI 3-3 figure two percentage points higher than the one obtained in 2022. Meanwhile, the digital experience rating rose from 50 points in 2022 to 61 points in 2023, while the contact center experience closed the year with -2, marking its best result ever. However, in 2024, LATAM will continue to expand and improve the way it collects the voice of its customers. To this end, it established 25 satisfaction goals for different internal teams, which shows that its customer focus continues to gain strength. Thus, special attention was paid to the cycle closure process, where several teams replied to the comments from clients in thousands of surveys. FEEDBACK ON VIDEO Since October 2022, clients of domestic operations in Brazil, Chile and Colombia can leave their comments by recording a video. In fact, during the first three months of operation of the new tool, LATAM received 1,500 videos (3,500 minutes), which translates into approximately 200 videos per week (45% of them from customer promoters). This initiative is very use- ful to strengthen empathy and humanize customer feedback, expanding the impact to improve customer-facing processes and better understand their pain points and suggestions. Throughout 2023, the tool was extended to include passengers from Ecuador, Peru and international routes. In 2023, LATAM achieved 86% in the DEP15 indicator, which analyzes flights departing up to 15 minutes after the sched- uled time. This result shows a two percentage-point decrease compared to 2022. This is mainly explained by the Brazilian affiliate, since after the increase in slots at the São Paulo air- ports, traffic congestion increased significantly, affecting the punctuality of all airlines operating in that city. Nonetheless, the group maintains its commitment to on-time performance. Along these lines, together with suppliers and airport author- ities, the group is working on the necessary adjustments and process improvements to provide passengers with an excellent service. According to the Official Airline Guide (OAG), LATAM was the second airline among the 20 largest airlines with the best on- time performance during 2023. Cabin overhauls were part of the actions to improve customer experience. SATISFACTION LATAM group’s companies constantly monitor customer per- ception regarding their operation and service, using a series of surveys at different customer contact opportunities. Along these lines, perception indicators are fundamental within the group and allow for continuous improvement within the different teams and to make decisions considering the voice of the customer. One of these—a more strategic survey—is the Net Promoter Score (NPS), which measures customer willing- ness to recommend the service, on a scale from -100 to +100. During 2023, it stood at 48 points in passenger operations, a 104104104 SNAPSHOT CLIENTS LATAM Pass (Enrolled– Millions) Technology Self bag drop Easy check-in (automatic or digital) On Time performance22 OTP DEP0 OTP DEP15 OTP ARR14 Domestic Operation International Operation Net Promoter Score (-100 to +100 scale) Passenger operations Cargo operations 2021 39 67%1 90% 77%1 92% 91% 91% 85% 511 30 2022 42 76% 95% 2023 45 79% 92% 66% (target 68%) 88% (target N/A) 86% (target 87%) 87% 83% 62% (target 67%) 86% (target N/A) 84% (target 86%) 84% 82% 46 51 48 58 N/A: Not applicable. 1 The information published in the Integrated Report 2021 was corrected. 2 Percentage of flights departing exactly at the scheduled time (DEP0) and with a delay of up to 15 minutes (DEP15); percentage of flights arriving up to 14 minutes after the scheduled time (ARR14). ANNUAL REPORT 2023 09 —Clients —The best experience TECHNOLOGY, DATA PROTECTION AND CYBERSECURITY GRI 3-3 & 418: CUSTOMER PRIVACY tive control of the Information Security Policies, as well as the procedures for the protection of personal data, through risk management, security and privacy. evaluation, within the Safety, Risk Management and Compliance criterion. In 2023, LATAM participated in the PCI REB Brazil (PCI Regional Engagement Brazil) as the only airline. This roundtable is led by the Chair of the PCI Council for Latin America, and includes companies from various industries that offer services associated with card payments that seek to generate continuous improve- ments in matters of security and data protection. It should be noted that internal review planning is carried out every year by the Cybersecurity man- agement to ensure compliance with the privacy and data protection controls of the systems that manage personal data in LATAM, as well as the review and updating of documentation. In addition, there is an Internal Audit department that audits compliance with the company’s security controls. These processes contributed to LATAM ending the year 2023 with no information security breaches and no impact on clients or employees. However, the group continues to work hard in this sphere, due to the rap- idly changing threats in the environment. Governance of information security LATAM prioritizes the privacy and security of client, employee and business partner information. That is why the group has defined an organizational structure with a specialized team dedicated to the design and maintenance of a suitable system for the identification, monitoring, control and mitigation of data protection and cybersecurity risks. As part of this organizational structure, it is worth noting the role of the Chief Information Security Officer (CISO), who reports to the LATAM Executive Committee on the results of the monitoring of risk management strategies in these matters, and hierarchically, to the Chief Information Officer (CIO). The latter, in turn, reports to the group’s CEO and pres- ents to the Board of Directors at quarterly meetings on cybersecurity risks, the evolution of cyberthreats and the effectiveness of measures taken to mitigate them. Data governance and cybersecurity To guarantee the protection of its clients’ information, LATAM establishes guidelines through its Information Security Policies, which are adapted to the local reg- ulations of each country where the group operates. These specific documents are available on LATAM’s website, thus providing transparency and accessibility to its clients regarding the security measures imple- mented. The Cybersecurity management, which reports to LATAM´s CISO, is responsible for ensuring the effec- During 2023, LATAM Airlines Group was re-certi- fied for compliance with the Payment Card Industry Data Security Standard (PCI DSS) as a result of an independent audit. This achievement shows that the group has implemented suitable security measures to protect the payment card information of customers who purchase products and services through its sales channels. It should be noted that all LATAM’s information se- curity policies, regulations, standards and procedures are based on ISO/IEC 27001 and NIST standards. LATAM’s digital infrastructure is also outsourced and independently reviewed through System and Organi- zation Controls (SOC1 and SOC2) reports, and is ISO/ IEC 27001 certified. Cybersecurity and data protection culture • Awareness: Each year, the group develops a training and communication program on information security, adapted to all roles in the company. • Risk escalation process: An escalation channel is available through LATAM’s intranet portal and the Computer Security Incident Response Team (CSIRT) contact, so that employees can report suspected technological or cybersecurity risks. • Compliance and consequence management: The Code of Conduct sets forth the attitudes expected by LATAM in the arena of Information Security and Data Protection, and establishes the consequences of non-compliance with the established procedures, which can escalate to contract termination. In addi- tion, this subject is part of the employee performance 105 ANNUAL REPORT 202309 —Clients —The best experience Data Intelligence LATAM group uses data analytics tools to develop custom- er-oriented solutions, improve efficiency in different processes and enhance revenue opportunities for the group, driven by Data Management. Throughout 2023, the group continued to advance develop- ments that allow its customers an increasingly personalized experience, taking into account their preferences and service needs. This approach has been particularly significant in im- proving the user experience of the LATAM Pass program, where the group strives to offer exceptional service. On the other hand, we continued to work on the democratiza- tion of data, enabling employees in non-operational areas to access information autonomously, facilitating decision-making and promoting improvements in different processes. Examples of the application of these technologies include solutions for jet fuel load optimization and fraud prevention, among others. In addition, as part of its efforts to maintain the highest stan- dards of personal data protection, LATAM group has reinforced the use of artificial intelligence in its data storage architecture. Thus, all information collected and processed by LATAM is always handled respecting the privacy of its clients and em- ployees, in accordance with the regulations of each country and internal policies in force. Systems in the cloud LATAM group has made remarkable progress in its cloud mi- gration process, with significant achievements in several key aspects. Among these milestones is the simplification of its technological platforms, which has led to a considerable re- duction in the obsolescence of IT elements and platforms. This approach has resulted in a lower impact on transversal incidents, allowing for a more efficient and safer operation. There were no information security breaches affecting clients or employees in 2023. INNOVATION NCG 461: 3.1.V GOVERNANCE FRAMEWORK LATAM group invests annually in different forms of innovation to deliver solutions aligned with passenger needs, prioritizing the company’s digital transformation. In addition, the group is continuously making progress in the modernization of its processes and the inclusion of new technologies, through in- vestment in advanced analytics, the total migration of its da- tacenters to the cloud, and in Generative Artificial Intelligence. As part of the innovation initiatives promoted by LATAM group, LATAM Labs, the open innovation hub that makes it possible to test new disruptive ideas in the group’s companies, has been in place since 2020. This hub tests ideas generated by employees themselves and by external ecosystems, such as universities, entrepreneurs, startups and knowledge centers, in the companies’ real operating environments. During 2023, LATAM Labs had eight external partners. Among the ideas already tested by LATAM Labs and imple- mented throughout LATAM are the project to use artificial intelligence to improve customer service at airports, the cre- ation of a digital solution to serve customers in Brazilian Sign Language (known as Libras, in Portuguese) through the Libras Interpreter Center, and the application of neural networks and deep learning in the customer experience during their trip. 106 ANNUAL REPORT 202310 Suppliers In this chapter 108 Supply chain management Supply chain management 10 —Suppliers —Supply chain management GRI 2-6 NCG 6.2: BUSINESSES Suppliers are essential to fulfill our commitments to our clients. During 2023, LATAM group established partnerships with a total of 5,557 suppliers, which are classified according to criticality, 270 being criti- cal and 5,288 non-critical, for a total procurement of USD$9.84 billion. It is worth noting that, during this period, 26 suppliers individually represented more than 10% of their category. LATAM group has important suppliers that are part of the aeronautical industry, such as the leading aircraft manufacturers Airbus and Boeing. Its supply chain also includes different companies that manufacture components, accessories and spare parts for aircraft, among others. Examples include MTU Maintenance, Pratt and Whitney Canada, CFM International, General Electric Commercial Aviation Services Ltd., General Electric Celma, General Electric Engines Service, Rolls Royce, Honeywell and Israel Aerospace Industries. Fuel suppliers include Petrobras, WFS, Copec, Terpel, Repsol and AirBP. DISTRIBUTION BY COUNTRY1 IN 2023 GRI (number of suppliers) DISTRIBUTION BY CATEGORY1 IN 2023 (value of acquisitions) Others 20.6% Peru 8.1% 31.2% Brazil Other non-technical purchases 29.2% 39.7% Fuel 1 Based on company headquarters and volume of acquisitions. United States 13.4% 16.0% Chile 7.0% Colombia 3.8% Ecuador Technology and systems 3.3% 17.7% Fleet, engines and technical purchases Uniforms 0.1% 2.5% Provisioning and catering Hotels and transportation 2.0% 0.5% Management Infrastructure 0.6% 4.3% Ground handling (support services for aircrafts, passengers, and cargo) 108 ANNUAL REPORT 202310 —Suppliers —Supply chain management GUIDELINES GRI 3-3, 2-24, 205-2 NCG 461: 5.9 OUTSOURCING POLICY LATAM group’s supplier management follows supply quality guidelines ensuring transparency, competitiveness, legal compliance and safety for all supply processes. Procurement is governed by the Corporate Procurement Policy, which is aligned with the Anti-Corruption Policy, and establishes the requirements that suppliers must meet, in addition to the social and environmental recommendations that apply to all purchases of materials and services. It should be noted that most of the contracts used by LATAM group have a specific clause requiring the reporting of environmental incidents or damage. Thus, the specific expectations that the group has for its suppliers are commu- nicated through contractual agreements, regular meetings and, in the case of strategic and/or critical suppliers, through a much more direct and close commu- nication, led by the commercial and user areas together. In the case of Third-Party Intermediaries (TPIs), which are suppliers that interact on behalf of LATAM group with national and international government agencies and public officials, there is a due diligence process prior to engagement. In addtion, the anticorruption and antibribery clauses are also included and, during the life of the contract, are monitored to ensure compliance with the Code of Conduct and Anti-Corruption Policy. Subcontractors With regard to the selection of subcontractor suppliers whose personnel will perform functions within the facilities, the group has established clear guidelines governing their engagement. These are incorporated as essential requirements in the tender processes and, in turn, define the obligations of service providers, ensuring compliance with the legal and regulatory provisions applicable to their personnel. LATAM group’s approach covers various aspects, including obligations related to remuneration, stipends, employee benefits, social security, work-related accident regulations, occupational diseases and health and safety aspects. All these points are detailed in the group’s contracts, which include a specific annex dedicated to the labor obligations to be met by these suppliers. LATAM group is strengthening its Contractor Regulations as part of its guidelines. This step aims to ensure the effective implementation of the Health, Safety and Environment Policy, together with its corresponding management system. In addition, LATAM has begun work on the “LATAM group’s Commitment to Human Rights” to inform its contractors and suppliers of its human rights commitments. Supplier contracts are governed by the Corporate Procurement Policy, which is aligned with the Anti-Corruption Policy. Code of Conduct for Suppliers and Third-Party Intermediaries As part of the commitment of the LATAM group and its subsidiaries to global sus- tainability standards, anti-corruption laws and conflicts of interest, and anti-trust and human rights, it seeks to ensure that the suppliers and third parties adhere to the Code of Conduct for Suppliers and Third-Party Intermediaries (TPIs), in all countries in which the organization operates. In this regard, the group reaffirms its commitment by providing additional guid- ance and clarification on the provisions mentioned in the Code. In it, suppliers commit to comply with competition laws, not to engage in insider trading, to fight corruption and financial crimes, to respect human and labor rights, to protect the brand and privacy, and to contribute to sustainability by protecting the environ- ment and their relationship with their communities. According to this Code, suppliers and TPIs are responsible for reporting irregular- ities through the LATAM group’s ethics channel, and non-compliance may result in the termination of contracts or penalties previously set forth in the contracts. 109109109 ANNUAL REPORT 202310 —Suppliers —Supply chain management PAYMENT POLICY NCG 461: 7.1 PAYMENT TO SUPPLIERS The group’s Payment Policy applies equally to all suppliers and terms of payment are established based on what is negotiated in each contract. However, LATAM group promotes timely payment terms to suppliers as a way of extending its Fair, Empathet- ic, Transparent and Simple culture (JETS, for its Spanish acronym) towards these stakeholders. Therefore, proper compliance with the pre-established number of days is monitored across the group; this is 90 days, except for small and medium-sized companies, in which case the regulations of each country are observed, as established in specific policies for each of LATAM group’s subsidiaries. During 2023, the company made progress on modifications to the reception, digitalization and accounting platform to achieve a more optimal centralization of payments. Currently, the company has succeeded in implementing the process in 80% of the group’s invoicing and is expected to cover the entire operation during 2024. It should be noted that in 2023, no agreements were entered in the Chilean Ministry of Economy’s Registry of Agreements with an Exceptional Payment Period. PAYMENT TO SUPPLIERS IN 2023 UP TO 30 DAYS Nationals Foreigners FROM 31 TO 60 DAYS Foreigners Nationals MORE THAN 60 DAYS Foreigners Nationals Invoices paid during the year Total paid (USD$ million) Total suppliers to whom the invoices were paid in each range 159,564 4,181 89,721 3,382 29,803 464 46,965 589 55,866 571 37,766 655 2,401 1,058 516 302 1,140 647 Notes: A total of USD$160,000 was paid in interest for late payment of two invoices issued. On the other hand, suppliers with a tax ID number (RUT, for its Spanish acronym) from the same country as the contracting LATAM subsidiary are considered national. 110 SELECTION AND EVALUATION Supplier selection Choosing each supplier is an opportunity to forge solid and collaborative relationships, which makes careful selection especially relevant. For this purpose, the LATAM group has a specialized team that performs a comprehensive analysis of each candidate with the aid of technological systems, mainly considering their technical and economic aptitudes. It should be noted that LATAM group does not limit the choice of suppliers based on their origin from a particular country, sector or raw material. Although these considerations are not defining criteria, there may be specific exceptions. An ex- ample of this has been the selection of suppliers of in-flight materials, where requirements have been established with material recyclability and certifications criteria, in line with the Sustainability strategy published by the group. Moreover, the group is working on an update of its Procurement Policy that will allow it to suggest recommendations for the selection of those suppliers that comply with sustainability recommendations, focusing specifically on Zero Waste, Ma- terial Recyclability and Certifications, among other aspects. Supplier evaluation NCG 461: 7.2 SUPPLIER ASSESSMENT LATAM group uses artificial intelligence and machine learning technology to identify and analyze potential risks, such as money laundering, terrorist financing and trade sanctions in its supply chain. These tools also analyze data from various sources, including government sanctions lists, company data- bases, and property registries. Likewise, they allow continuous risk assessments, monitoring changes to sanctions lists and other relevant data sources. Similarly, each supplier that records movements during a month is part of a review process through a comprehensive regulatory and business information and analysis system. This makes it possible to identify alerts related to possible violations of our Code of Conduct, addressing issues such as money laundering, legal disputes, child labor, and cybercrime, among others. Specifically, for our Third-Party Intermediaries (TPIs), a monthly review is carried out by the Procurement areas in conjunction with the Compliance team. This process determines whether LATAM group can continue its commercial relationship with each respective supplier. In both scenarios, if the platform signals an alert, the Compliance team has the authority to suggest and carry out corrective actions, or else, terminate the relationship. On the other hand, it is worth mentioning that the Occupa- tional Safety team conducts on-site audits of contractors and subcontractors operating at airports in Chile. This process is carried out to assess their adherence to the health, safety and environmental guidelines established in local regulations. As a result of the assessment, these suppliers are provided with corrective action plans to address the gaps, which are actively monitored by the group. In addition, maintenance providers are evaluated under leading standards with a focus on safeguarding quality, while IT and systems providers are classified under standards based on the NIST 800-161 and ISO 27001 framework, in addition to SOX and PCI-DSS validations. ANNUAL REPORT 2023 SNAPSHOT SUPPLY CHAIN GRI 414-1, 414-2, 308-1 & 308-2 Total LATAM suppliers by December 31 Critical Suppliers1 Share of the supplier base Share of critical suppliers in acquisitions volume Identification of potential risks Suppliers analyzed by sustainability criteria (social or environmental) NCG 461: 7.2 SUPPLIER EVALUATION % of the total suppliers analyzed % of total purchases Preventive analyses carried out in the international database systems (% of the total base) Suppliers considered high risk in compliance aspects (% of those analyzed) Detailed evaluations based on the system alerts (% of the high-risk group) Monitoring and management Audited suppliers Suppliers with mitigation plans in place (% of suppliers audited) Action plans defined based on audits Contracts terminated due to noncompliance Payment to suppliers NCG 461: 7.1 PAYMENT TO SUPPLIERS % of invoices paid with a term of up to 30 days To domestic suppliers To foreign suppliers 111 2021 8,052 11% 91% N/D N/D N/D 5,367 (67%) 148 (3%) 148 (100%) 40 93% 331 0 N/D N/D 10 —Suppliers —Supply chain management 4 2 0 2 M A T A L A R O M E M I 2022 6,190 7% 95% 0 0 0 N/D 369 03 53 91% 186 0 81% 63% 2023 5,557 5% 69% 0 0 0 5,557 (100%) 185 (3%) 03 N/D4 N/D4 N/D4 N/D4 65% 51% N/A: information not available. 1 Contracts worth over US$1 million, suppliers interacting with government agencies on behalf of the LATAM group or supplying the operation with essential or difficult to replace elements. 2 Invoices paid at 30 days/Total invoices. 3 All cases are analyzed; however, an in-depth evaluation was not carried out because there was no evidence of alerts that required it. 4 The audits consist of the analysis of information relating to deferred years, with a focus on occupational health and safety. The 2023 audits will be conducted this year in March and April 2024, and their results will be available during the year. ANNUAL REPORT 2023 11 About the Report In this chapter 113 121 Material topics Glossary 116 122 GRI and SASB content index External assurance 120 NCG 461 content index Material topics 11 —About the report —Material topics NCG 461: 3.1 GOVERNANCE FRAMEWORK GRI 2-29, 3-1, 3-2 AND 2-14 In 2023 LATAM group updated its list of material topics in sustainability. For the first time, this process was carried out following the guidelines of double ma- teriality, a methodology endorsed by the European Sustainability Reporting Standards (ESRS)1, to promote best practices in sustainability reporting. The double materiality approach implies that com- panies must disclose not only the impacts that their activity has on society, the environment and gover- nance systems, but also how these aspects can af- fect the company itself in terms of its development, performance and position. In other words, it considers both the impact that the company has on its environ- ment and stakeholders (impact materiality), and the impact the environment may have on the company itself (financial materiality). The selection of content for the LATAM Annual Report 2023 was based on the most relevant topics, most relevant, which are presented in the double materiality matrix included in this report. PROCESS Step 1: Identification of impacts, risks and oppor- tunities scope, and irredeemability (the latter, only in the case of risks or negative impacts). Likewise, the evaluation considered likelihood, also rating it on a scale of one to five. An exhaustive diagnosis was carried out with internal and external information to build a list of external impacts and financial risks and opportunities-positive and negative, as well as potential and real. In addition, the materiality threshold was established, making it possible to define the most important impacts, risks and opportunities, which were then grouped to form the material topics. • Internal Information: The company’s strategic doc- umentation, such as policies and processes, was an- alyzed and more than 30 expert leaders from various departments were interviewed. • External Information: The results of surveys con- ducted with stakeholders (clients, employees, and shareholders, among others) were evaluated, represen- tatives of these groups were interviewed, benchmark- ing was carried out with airline industry players and sustainability standards and indices were examined, in addition to analyzing other sources, such as news and social media. Step 2: Impact Assessment and Construction of Ma- terial Topics • Workshops were held with representatives from dif- ferent countries and areas of the company to assess impacts, risks and opportunities according to severity and probability factors. These impacts, risks and opportunities were grouped into sub-topics and then into material topics. Step 3: Prioritization of material topics and drafting of final matrix • The evaluation of impacts, risks and opportunities made it possible to prioritize the material topics in a double materiality matrix, which considers both the external impacts of the company and the external risks and opportunities affecting business development. • This matrix was validated by the Director of Corpo- rate Affairs and Sustainability, the Director of Internal Audit, Risk and Control, and finally, by the CEO of LATAM Airlines. • Material topics will be reviewed annually, to adapt quickly to the constant changes in the environment and ensure LATAM maintains a continuous improve- ment in the sustainability management. 113 1 The methodology proposed by the ESRS guided the process for creating the double materiality; however, disclosure requirements remain an area of opportunity that could be implemented in future editions of LATAM group’s Annual Report. The assessment of impacts, risks and opportunities was done based on their severity, rating them on a scale of one to five for each of the factors: degree, Note: Process assurance on page 123. ANNUAL REPORT 2023Double materiality matrix 11 —About the report —Material topics 1 Climate change strategy Connectivity and regional development 10 11 Human Rights 2 Digital transformation and cybersecurity Sustainable innovation 4 Ecosystem protection 8 5 Operational safety Team 7 3 Customer experience Accountability and collaboration with suppliers 13 12 Ethics and compliance y t i l a i r e t a m t c a p m I 100% 75% 50% 25% MATERIAL TOPICS n°1 Climate change strategy We seek to mitigate the climate impact, ensuring the continuity and resilience of the operations through the implementation of climate change adaptation measures. n°2 Digital transformation and cybersecurity In the face of technological development and a constant digital transformation, efforts are focused on information manage- ment and on bolstering the protection on the systems and operations against any security breach. In this way, information privacy is also incorporated as a priority for the protection of the clients’ and employees’ personal data. n°3 Customer experience We focus on offering a rewarding customer experience in the services prioritizing adaptability based on the different re- quirements of each client. In the Cargo business, we strive to ensure that cargo arrives on time and in optimal condition. n°4 Sustainable innovation To be a benchmark in the aeronautical industry through the implementation and dissemination of cutting-edge solutions in sustainability issues, in order to address challenges of the sector. Similarly, to promote innovative measures, like waste management and the principals of circular economy, throughout the value chain. The transition depends on suppliers, authorities and other key players that influence the operation, with whom we will seek to collaborate strategically. 0% 114 25% 50% 75% 100% Financial materiality ● Low / ● Moderate / ● High Continuous adaptation to the environment 9 6 Fleet efficiency ANNUAL REPORT 2023 11 —About the report —Material topics n°5 Operational safety n°9 Continuous adaptation to the environment n°13 Accountability and collaboration with suppliers Prioritize incident and accident prevention throughout the operational, implementing proactive measures focused on the development of best practices both in the air and on the ground. We guarantee the health and safety of the team, clients and suppliers by fostering an environment where everyone feels protected. n°6 Fleet efficiency Advance in fleet renewal and the incorporation of technolog- ical improvements in our aircraft, focusing on reducing fuel consumption to improve flight planning, reduce emissions and avoid service interruptions caused by extended periods of aircraft maintenance. n°7 Team Nurture internal skills among the employees, fostering an environment of continuous learning and personal growth. We aim for employee work to be recognized and valued, thus con- tributing to a motivating work environment. Finally, fostering meaningful relationships that allow us to reach fair agreements with the representatives of our employees. Focus on ongoing adaptation, proactive risk management and resilience in a complex and changing global environment. We have the foundation to be able to adapt to different political, economic and social contexts, considering both shifts in the market and all our stakeholders. n°10 Connectivity and regional development Drive the social, environmental and economic development of South America through connectivity and tourism. We seek to contribute through the business and what we know how to do: connect. n°11 Human Rights To safeguard human rights and the integrity of individuals through the implementation of policies and related practices. Promote gender equality, prevent human trafficking, ensure development within a healthy environment and avoid any form of discrimination, among others. All of the above, guaranteeing fair and respectful treatment for all people and communities, taking into consideration the clients, employees, contractors and suppliers. n°8 Ecosystem protection n°12 Ethics and compliance Develop programs that promote the protection, conservation and rehabilitation of ecosystems and their biodiversity. As an established airline in South America, our contribution focuses primarily on preventing wildlife trafficking, as well as seeking nature-based solutions through collaborative work to protect the region’s ecosystems, understanding their fundamental role in carbon sequestration. To promote corporate integrity and accountability across all operations, with a strategic focus that includes compliance pro- grams with employees and suppliers. We address uncertainty related to emerging regulations and regulatory transforma- tions by anticipating and adopting best regulatory practices among the different countries where we operate, in addition to international standards. Work together with suppliers to develop sustainable and ethical relationships with the supply chain in a collaborative manner. Generate strategies to integrate good practices that allow us to support the suppliers and incorporate sustainability in business development. MATERIAL TOPICS Changes compared to materiality 2018 GRI 3-2 Three new material topics are added to the double materiality 2023: “Digital transformation and cybersecurity”, “Human Rights” and “Supplier Accountability and Collaboration”. On the other hand, material topic 2018 “Economic and Financial Sustainability” is no longer part of the matrix. The remaining material topics in this new financial year include aspects of the previous topics, from a different viewpoint, represented in the change of name and definition. 115 ANNUAL REPORT 202311 —About the report —Content index Content index GRI SASB Declaration of use GRI 2: General Contents 2021 LATAM Airlines Group has presented the information cited in this GRI content index 2-1 Organizational details for the period from January 1 to December 2-2 Entities included in the organization’s sustainability reporting 31, 2023, based on the GRI Standards. 2-3 Reporting period, frequency and contact point 14, 125 4-5 4-5 GRI 1 used GRI 1: 2021 FOUNDATION GRI/ SASB STANDARD AIRLINES 2-4 Restatements of information Cases of updated previously published information are clearly indicated in the corresponding tables 82, 104, 113 2-17 Collective knowledge of the highest governance body 2-18 Evaluation of the performance of the highest governance body 2- 19 Remuneration policies 2-22 Statement of sustainable development strategy 2-23 Policy Commitments 2-5 External assurance 122-123 2-26 Mechanisms for seeking advice and raising concerns 40, 129 40 44, 47-48, 132 10-12 18 49-50 2-6 Activities, value chain and other business relationships 14, 26-31, 108 2-27 Compliance with laws and regulations 49, 73, 133-138 2-7 Employees 2-8 Workers who are not employees 2-9 Governance structure and composition 2-10 Nomination and selection of the highest governance body 2-11 Chair of the highest governance body 2-12 Role of the highest governance body in overseeing the management of impacts 2-13 Delegation of responsibility for managing impacts 2-14 Role of the highest governance body in sustainability reporting 2- 15 Conflicts of interest 2-16 Communication of critical concerns 8, 156-158 156-157 36-40, 129 39 36, 128 39-40 39-40 113 49 50 2-28 Membership associations 2-29 Approach to stakeholder engagement 2-30 Collective bargaining agreements GRI 3: Material topics 2021 3-1 Process to determine material topics 3-2 List of material topics 52 51 159 113-114 114-115 116 ANNUAL REPORT 2023 11 —About the report —Content index GRI/ SASB STANDARD AIRLINES TABLE OF CONTENTS Material topic: Health and safety in the air and on the ground GRI 3 MATERIAL TOPICS SASB AIRLINES- GHG EMISSIONS 3-3 Management of material topics TR-AL- 110a.1 Gross global scope 1 emissions GRI 302: ENERGY 2016 GRI 305: EMISSIONS 2016 Material topic: Digital transformation and cybersecurity GRI 3 MATERIAL TOPICS GRI 418: Customer Privacy Material topic: Customer experience GRI 3 MATERIAL TOPICS OTHER DISCLOSURES Material topic: Sustainable innovation GRI 3 MATERIAL TOPICS GRI 306: WASTE 2020 117 TR-AL- 110a.2 Discussion of the long-terms and short-term strategy or plan TR-AL-110a.3 Total fuel consumed, percentage alternative, percentage sustainable 302-1 Energy consumption within the organization 302-3 Energy intensity 305-1 Direct (Scope 1) GHG emissions 305-2 Energy indirect (Scope 2) GHG emissions 305-3 Other indirect (Scope 3) GHG emissions 305-4 GHG emissions intensity 305-5 Reduction of GHG emissions 305-6 Emissions of ozone-depleting substances (ODS) 305-7 Nitrogen oxides (NOx), sulfur oxides (SOx), and other significant air emissions 3-3 Management of material topics 418-1 Substantiated complaints concerning breaches of customer privacy and losses of customer data 3-3 Management of material topics Net Promoter Score (NPS) On-time performance (OTP) 3-3 Management of material topics 306-1 Waste generation and significant waste-related impacts 306-2 Management of significant waste-related impacts 306-3 Waste generated 306-4 Waste diverted from disposal 306-5 Waste directed to disposal LOCATION 17, 76-82, 154-155 81-82, 154 9, 76-82, 154-155 74 74-75 73, 75 81-82, 154-155 81-82, 154-155 81-82, 154-155 82, 154 154 155 155 105-106 105 14, 28, 101-104 28, 104 104 83-86 84 84-85 86 86 86 ANNUAL REPORT 2023 11 —About the report —Content index GRI/ SASB STANDARD AIRLINES TABLE OF CONTENTS Material topic: Operational safety GRI 3 MATERIAL TOPICS 3-3 Management of material topics GRI 403: OCCUPATIONAL HEALTH AND SAFETY 201 403-1 Occupational health and safety management system 403-2 Hazard identification, risk assessment, and incident investigation 403-5 Worker training on occupational health and safety 403-7 Prevention and mitigation of occupational health and safety impacts directly linked by business relationships 403-9 Work-related injuries SASB AIRLINES- ACCIDENT AND SAFETY MANAGEMENT TR-AL- 540a.1 Description of implementation and outcomes of a Safety Management System TR-AL-540a.2 Number of aviation accidents TR-AL-540A.3 Number of governmental enforcement actions of aviation safety regulations Material topic: Fleet efficiency GRI 3 MATERIAL TOPICS SASB AIRLINES - ACTIVITY METRICS Material topic: Team GRI 3 MATERIAL TOPICS GRI 401: EMPLEO 2016 3-3 Management of material topics TR-AL-000.A Available seat-kilometers (ASK) TR-AL-000.B Passenger load factor TR-AL-000.C Revenue passenger-kilometers (RPK) TR-AL-000.D Revenue ton-kilometers (RTK) TR-AL-000.E Number of takeoffs TR-AL-000.F Average age of fleet 3-3 Management of material topics 401-1 New employee hires and employee turnover 401-2 Benefits provided to full-time employees that are not provided to temporary or part-time employees 401-3 Parental leave GRI 404: TRAINING AND EDUCATION 2016 404-1 Average hours of training per year per employee SASB AIRLINES - LABOR PRACTICES TR-AL-310a.1 Percentage of active workforce covered under collective bargaining agreements OTHER DISCLOSURES Organizational Health Index (OHI) TR-AL-310a.2 Number of work stoppages and total days idle 404-3 Percentage of employees receiving regular performance and career development reviews Material topic: Ecosystem protection GRI 3 MATERIAL TOPICS 3-3 Management of material topics 118 LOCATION 64-68, 97 64, 97 97 91 65-66, 97 97-98 64 68 68 7, 14, 26-31 31 31 31 31 31 30 8, 90-99 92-93, 160 92-93 161-162 91 92 159 159 90 80, 87-88 ANNUAL REPORT 2023 11 —About the report —Content index GRI/ SASB STANDARD AIRLINES TABLE OF CONTENTS Material topic: Continuous adaptation to the environment GRI 3 MATERIAL TOPICS 3-3 Management of material topics Material topic: Connectivity and regional development GRI 3 MATERIAL TOPICS 3-3 Management of material topics GRI 201: ECONOMIC PERFORMANCE 2016 201-1 Direct economic value generated and distributed GRI 203: INDIRECT ECONOMIC IMPACTS 2016 203-1 Infrastructure investments and services supported 203-2 Significant indirect economic impacts OTHER DISCLOSURES Destinations Material topic: Human Rights GRI 3 MATERIAL TOPICS 3-3 Management of material topics GRI 405: DIVERSITY AND EQUAL OPPORTUNITY 2016 405-1 Diversity of governance bodies and employees 405-2 Ratio of basic salary and remuneration of women to men GRI 406: NON-DISCRIMINATION 406-1 Incidents of discrimination and corrective actions taken Material topic: Ethics and compliance GRI 3 MATERIAL TOPICS GRI 205: ANTI-CORRUPTION 2016 3-3 Management of material topics 205-2 Communication and training about anti-corruption policies and procedures 205-3 Confirmed incidents of corruption and actions taken GRI 206: ANTI-COMPETITIVE BEHAVIOR 2016 206-1 Legal actions for anti-competitive behavior, anti-trust, and monopoly practices GRI 415: PUBLIC POLICY 2016 415-1 Political contributions SASB AIRLINES- ANTI-COMPETITIVE BEHAVIOR TR-AL-520a.1 Total amount of monetary losses as a result of legal proceedings associated with anti-competitive behavior regulations Material topic: Accountability and collaboration with suppliers GRI 3 MATERIAL TOPICS 3-3 Management of material topics GRI 414: SUPPLIER SOCIAL ASSESSMENT 2016 414-1 New suppliers that were screened using social criteria GRI 308: SUPPLIER ENVIRONMENTAL ASSESSMENT 2016 308-1 New suppliers that were screened using environmental criteria 308-2 Negative environmental impacts in the supply chain and actions taken 414-2 Negative social impacts in the supply chain and actions taken Other GRI and SASB indicators reported GRI 303: WATER AND EFFLUENTS 2018 119 303-3 Water withdrawal LOCATION 41-42, 59, 141-153 14, 51, 59, 87-88 60 87 28-29 7,14, 26-29 18, 95, 109, 127 8, 95, 156-157 44, 96 127 49-50, 109, 133-138 49, 109 49, 127 49 49 49 108-111 111 111 111 111 73 ANNUAL REPORT 2023 Content index NCG 461 2. Organization’s profile 2.1 Mission, vision, purpose and values 2.2 Historical Information 2.3 Ownership 2.3.1 Control situation 2.3.2 Major changes in ownership or control 15, 18 21-23 33 34-35 2.3.3 Identification of majority partners or shareholders 34-35 2.3.4 Stocks, their characteristics and rights 33-35, 62 2.3.5 Ownership – 2.3.5 Other securities 33-35 3. Corporate governance 11 —About the report —Content index 4. Strategy 4.1 Time horizons 4.2 Strategic objectives 4.3 Investment plans 5. People 5.1 Staffing 5.1.1 Number of individuals by sex 5.1.2 Number of individuals by nationality 5.1.3 Number of individuals by age range 5.1.4 Labor seniority 5.1.5 Number of individuals with disabilities 5.2 Labor formality 5.3 Work adaptability 5.4 Wage equity by sex 5.4.1 Equality policy 5.4.2 Wage gap 3.1 Governance framework 40, 43, 49, 51, 77, 79, 95, 106 5.5 Workplace and sexual harassment 3.2 Board of Directors 36-40, 44, 128-129, 132 3.3 Board Committees 39-40, 44, 130-132 5.6 Occupational safety 5.7 Postnatal leave 3.4 Senior Executives 34, 45-48 5.8 Training and benefits 3.5 Adherence to national or international codes 49 5.9 Outsourcing policy 3.6 Risk management 41-42, 47-50, 92, 141-153 3.7 Relationship with stakeholders and the general public 51 120 16 16-18 61 156-157 156-157 158 158 158 159 159 95-96 96 50, 127 97-98 93-94, 161-162 91, 93-94, 97 109 6. Business Model 6.1 Industrial sector 14, 27, 51-52, 133-138 6.2 Businesses 6.3 Stakeholders 6.4 Properties and facilities 14, 58, 108, 126-127 51-52 125-126 6.5 Subsidiaries, partners and investments in other companies 6.5.1 Subsidiaries and partners 259-268, 295 6.5.2 Investment in other companies NAP 7. Suppliers 7.1 Payment to suppliers 7.2 Supplier assessment 8. Indicators 8.1 Legal and regulatory compliance 8.1.1 Regarding customers 8.1.2 Regarding its workers 8.1.3 Environmental 8.1.4 Free competition 8.1. 5 Others 110-111 110-111 49 49 72-73 49 49 8.2 Sustainability indicators by industry See the detail in the GRI-SASB index, pages 117-119 9. Material or essential events 139-140 10. Comments from shareholders and the Board of Directors 11. Financial information 165-258, 269-293 130-131 ANNUAL REPORT 2023 Glossary 121 11 —About the report —Glossary ADR: American Depositary Receipts LSA: Chilean Corporations Act. AFPs: Spanish acronym for Chilean Pension Fund Managers MRO: Maintenance, Repair, and Operation. ANAC: Portuguese acronym for National Civil Aviation Agency (Brazil) NPS: Net Promoter Score ASK: Available seat kilometers (equivalent to the number of available seats multiplied by the distance traveled) NYSE: “New York Stock Exchange” ICAO: International Civil Aviation Organization. ATK: Available ton-kilometers (equivalent to the total available capacity in tons multiplied by the distance flown) SDG: Sustainable Development GoalsOHI: Organizational Health Index CMF: Spanish acronym for the Financial Market Commission (Chile) UN: United Nations Organization. CORSIA: “Carbon Compensation and Reduction Scheme for International Aviation” OTC: Over-the-counter market, where financial instruments are traded directly between the parties, outside the scope of organized markets. DIP: Debtor-in-Possession, a financing mechanism provided for in Chap- ter 11 of the U.S. law in which loan creditors have priority in receiving securities OTP: On-time performance (punctuality indicator) SSC: Spanish-speaking countries. EBITDA: “Earnings before interest, tax, depreciation, and amortization” EBITDAR: “Earnings before interest, tax, depreciation, amortization, and aircraft rentals” GHG: Greenhouse gases. GRI: Global Reporting Initiative RASK: revenue per available seat-kilometer––gauges the efficiency of the airline; it is obtained by dividing the operating income by the ASK RPK: Revenue passenger-kilometers (equivalent to total paid passengers multiplied by distance traveled) RTK: Revenue ton-kilometers (equivalent to total tons transported mul- tiplied by distance traveled) IATA: “International Air Transport Association” SEC: “United States Securities and Exchange Commission” IEnvA: “IATA Environmental Assessment” TDLC: Spanish acronym for the Chilean Antitrust Court IFRS: International Financial Reporting Standard IOSA: ATA Operational Safety Audit JBA OR JVA: Joint Business Agreement or Joint Venture Agreement ANNUAL REPORT 202311 —About the report —External assurance External assurance • Requirements and review of evidence, for the indicators detailed in this letter as a result of the materiality process, with the areas participating in the preparation of the 2023 Annual Report. DJSI Indicators 1.5.4 1.7.5 1.7.6 1.8.3 2.3.2 2.3.3 2.8.2 3.1.4 3.5.2 • Analysis of the adherence of the contents of the 2023 Annual Report to the GRI Standards and verification of the indicators verified and included in this letter are based on the protocols established by this guide. Regarding the verified indicators, we can affirm that no aspect has been revealed that makes us believe that these indicators incorporated in the Annual Report 2023 of the Company, have not been prepared in accordance with the GRI Standard in the aspects and indicators indicated in the scope. April 4, 2024 • Verification, through tests of quantitative and qualitative information correspond- ing to the GRI Standards indicators included in the 2023 Annual Report, and its adequate gathering from the data provided by the Company information sources. MANAGEMENT AND DELOITTE RESPONSIBILITIES LATAM Airlines Of our consideration: We have reviewed the following aspects of the LATAM Airlines, (hereinafter “the- Company”) Annual Report 2023. SCOPE Limited assurance engagement of the adherence of the contents and indicators in- cluded in the 2023 Annual Report to the Global Reporting Initiative (GRI) Standard, regarding the profile of the organization and material indicators arising from the materiality process performed by the company around the criteria established by said standard, related to the Economic, Social and Environmental dimensions. STANDARDS AND ASSURANCE PROCESS We have carried out our task in accordance with the guidelines of the International Standard on Assurance Engagements Other than Audits or Reviews of Historical Fi- nancial Information (ISAE 3000) issued by the International Auditing and Assurance Standard Board (IAASB). Our review has consisted in an inquiry process involving different the Company units and management areas, involved in the process of developing the Report, as well as in the application of analytic procedures and verification tests, which are described in the following items: • Meeting with the team that led the process of preparing the 2023 Annual Report. 122 CONCLUSION The assurance process was based on the indicators established in the materiality process performed by the Company. Once those indicators were identified, priori- tized, and validated, they were included in the report. The indicators reviewed and verified are detailed bellow: General and specific GRI Indicators: 2-1 2-2 2-3 2-4 2-5 2-6 2-7 2-8 2-9 2-11 2-12 2-13 2-15 2-16 2-17 2-18 2-19 2-22 2-26 2-27 2-28 2-29 2-30 3-1 3-1 3-1 3-1 • The 2023 Annual Report preparation, as well as its contents are under the Company responsibility, management is responsible to maintain the internal control systems where the information is obtained. • Our responsibility is to issue an independent letter based on the procedures per- formed. • This report has been prepared exclusively by the Company request, in accordance with the terms established in the service proposal. • We have developed our work according to the standards of Independence estab- lished in the Code of Ethics of the IFAC. • The conclusions of the verification made by Deloitte apply to the latest version of the Company Annual Report received on April 3, 2024. 3-2 3-2 3-3 3-3 3-3 3-3 3-3 3-3 3-3 3-3 3-3 3-3 3-3 201-1 203-1 205-2 205-3 206-1 • The scope of a limited assurance engagement is essentially inferior to a reason- able assurance engagement thus, we are not hereby providing opinion about the Company’s 2023 Annual Report. 302-1 302-3 303-3 305-1 305-2 305-3 305-4 305-6 305-7 Sincerely, 306-1 306-2 306-3 306-4 306-5 401-1 403-7 403-9 404-1 415-1 Deloitte ANNUAL REPORT 2023 Deloitte Consultoria Limitada Rosario Norte 407 Las Condes, Santiago Chile Phone: (56) 227 297 000 Fax: (56) 223 749 177 deloittechile@deloitte.com www.deloitte.cl INDEPENDENT REVIEW REPORT OF DOUBLE MATERIALITY STUDY 2023 LATAM Mr. Juan José Tohá, Vice-President of Corporate Affairs and Sustainability LATAM Airlines Dear Sir: We have reviewed the following aspects of the Double Materiality Study conducted by LATAM Airlines Group S.A. (LATAM): Standard and scope The review of the double materiality study was conducted in accordance with the Enterprise Sustainability Reporting Standard (ESRS), an initiative of the European Financial Reporting Advisory Group (EFRAG), in collaboration with the European Commission's Council for Sustainable Development Reporting Standards (CDRS). The ESRS incorporates both development and disclosure criteria. This independent review is limited solely to the analysis of development criteria. The requirements associated with the disclosure stage were not considered in the scope of the process of developing the double materiality study and, therefore, neither were they included in the independent review. Independent Review Process Our review work consisted of analyzing the evidence provided by LATAM to support the exercise it conducted for its double materiality study. In each of the steps, the corresponding evidence was analyzed to understand how the analysis was performed and whether it was aligned with the requirements of ESRS and ESRS 2. For this review, the application of analytical procedures and study tests described below were examined: • We met with the counterpart in charge of preparing the double materiality study to clarify questions and review the methodology used. • We analyzed the evidence presented to verify the analysis process, including the methodological application, the results obtained and the parties involved in the process. • We conducted review tests of the quantitative and qualitative information, ensuring that the methodological requirements established by the standard were met. Conclusions As a result of the independent review process, having evaluated those criteria mentioned in the Enterprise Sustainability Reporting Standard (ESRS), we can conclude that evidence has been presented to indicate that the Double Materiality Study conducted by LATAM was performed following the guidelines established in ESRS 1 and ESRS 2. Specifically, and in accordance with the above, we reviewed the following criteria of the ESRS 1 3; 3.1; 3.2; 3.3; 3.4; 3.5; 3.6; 3.7 and ESRS 2 SBM-3; IRO-1; IRO-2. We appreciate LATAM's cooperation and willingness during the review process. If you have any questions or require further information, please do not hesitate to contact us. Regards, Manuel Gálvez Partner March 21, 2024 . e l i h C , n é s y A 123 ANNUAL REPORT 2023 12 Annexes In this chapter 125 154 About us 128 Corporate governance 133 Our business Commitment to Sustainability 156 Employees About us LATAM Group LATAM AIRLINES GROUP S.A. RUT: 89.862.200-2 ADDRESS: SANTIAGO, CHILE TRADE NAMES: LATAM AIRLINES, LATAM AIRLINES GROUP, LATAM GROUP, LAN AIRLINES, LAN GROUP AND/OR LAN 125 11 —Annexes —Who we are GRI 2-1 LEGAL INCORPORATION It was established as a Limited Liability Company via a public deed dated December 30, 1983 before Notary Eduardo Avello Arellano; an excerpt of this deed is recorded in the Santiago Commerce Registry on page 20,341 item 11,248 of the year 1983, and published in the Official Gazette on December 31, 1983. Pursuant to the public deed dated August 20, 1985, granted by Notary Miguel Garay Figueroa`s Office, the company became a Limited Corporation known as Línea Aérea Nacional Chile S.A. (now, LATAM Air- lines Group S.A.) which, by express provision of law n° 18,400, has the quality of legal follower of the state- owned company created in the year 1929 under the name Línea Aérea Nacional de Chile, pursuant to the aeronautical and radio communications concessions, traffic rights, and other administrative concessions. COMPANY PURPOSE • To market air and/or ground transportation in any of its forms, be it for passengers, cargo, mail, and anything directly or indirectly related to that activ- ity within or outside the country, on its own behalf or for third parties. • To render services related to the maintenance and repair of its own or third parties’ aircraft. • To develop and operate other activities derived from and/or related, connected, contributing, or complementary to the company's corporate purpose; • Trade and development of activities related to travel, tourism, and lodging. • The performance and exploitation of other ac- tivities derived from the corporate purpose and/or linked, connected, contributing, or complementary to it. • To participate in partnerships of any kind that will enable the company to fulfill its goals. PROPERTY, PLANT AND EQUIPMENT NCG 461: 6.4 PROPERTY AND FACILITIES 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 160,000 m2 maintenance base is located on a site that we own inside Comodoro Ar- turo 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 (20,000 m2), 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. approxi- mately 6,220 m2 of space inside the Comodoro Arturo Merino Benítez International Airport for operational and service purposes. Other Facilities: We own sixteen acres 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. 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 Air- lines Brazil leases office facilities in converted hangars belonging to INFRAERO (the Local Airport Administra- tor). 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: At Hangars II and V in Congonhas Airport, which LATAM Airlines Brazil leases from IN- FRAERO, LATAM Airlines Brazil has 23,886 m2 of offices and hangars with about 1,300 workstations. This site also houses the aircraft maintenance, procurement, aeronautical materials logistics and retrofitting de- partments. 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. 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. ANNUAL REPORT 202311 —Annexes —Who we are New Facilities LATAM Airlines Brazil completed several infrastructure projects in Brazil during 2023, including: 1. Delivery of a new Board Room in Hangar II, at Guarulhos airport. 2. Optimization and adaptation to the new quality standards of the São Carlos MRO. 3. Initiation of the project to build a new hangar at MRO in São Carlos with 5,000 m2. 4. Obtaining the “Building Accessibility Certificate of the Service Academy”, in compliance with Brazilian regulations. 5. Update of the visual communication at Cargo Terminals. 6. Development of the required infrastructure at Passo Fun- do Airport, to enable Passo Fundo as one of LATAM's desti- nations. 7. Closing of the Juiz de Fora (IZA) and Presidente Prudente (PPB) bases. 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 air- craft-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 2023, we paid US$10.8 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$172,080. 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 op- erational 126 since June 2016. The property has a 15,479 m2 aircraft main- tenance 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 expen- ditures by LATAM was US$16.5 million. RESEARCH AND DEVELOPMENT, PATENTS AND LICENSES, ETC. NCG 461: 6.2 BUSINESSES GRI 2-1 LATAM has been registered and/or renewed in Argentina, Aus- tralia, Bolivia, Brazil, Canada, Chile, China, Colombia, Costa Rica, Cuba, Dominican Republic, Ecuador, El Salvador, Euro- pean Union, Guatemala, Honduras, Hong Kong, India, Japan, Mexico, Nicaragua, New Zealand, Panama, Paraguay, Peru, South Korea, , 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, European Union, Guatemala, Honduras, India, Japan, Mexico, Nicaragua, Panama, Paraguay, Peru, South Korea, Spain, Tai- wan, United Kingdom, Uruguay and Venezuela. LATAM AIRLINES ARGENTINA has been registered and/or renewed in Argentina; LATAM AIRLINES COLOMBIA has been registered and/or renewed in Colombia; LATAM AIRLINES EC- UADOR 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 Chile, Mexico, United Kingdom and the European Union; 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; LANPERU has been registered and/or renewed in Costa Rica; LAN PERU has been registered and/or renewed in Brazil; TAM has been registered and/or renewed in Mexico and Peru; 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, European Union, United Kingdom and Uruguay. LATAM LINEAS AEREAS has been reg- istered 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, 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, 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 United Kingdom and the European Union; TAM CARGO been renewed in Brazil; TAM CARGO CONVENCIONAL has been registered and/or renewed in Brazil. LATAM FIDELIDADE has been registered and/or renewed in Argentina, Australia, Brazil, Chile, Colombia, Ecuador, Mexico, New Zealand, Paraguay, Peru, European Union, United King- dom, Uruguay and the United States; FIDELIDAD has been registered and/or renewed in Argentina; FIDELIDADE has been registered and/or renewed in Argentina; FIDELIDAD TAM has been registered and/or renewed in Paraguay; FIDELIDADE TAM has been registered and/or renewed in Paraguay. LATAM PASS has been registered and/or renewed in Argentina, Australia, Bolivia, Brazil, Chile, Canada, Colombia, Ecuador, Mexico, New Zealand, Paraguay, Peru, European Union, United Kingdom, Uruguay, the United States and Venezuela; LAT- AM PASS MILES has been registered and/or renewed in New Zealand and Australia; LAN PASS has been registered and/or renewed in Chile. 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, Hon- duras, Mexico, Nicaragua, Panama, Paraguay, Peru, Dominican Republic, European Union, United Kingdom and Uruguay; LAT- AM TRAVEL has been registered and/or renewed in Argentina, Bolivia, Brazil, Chile, Colombia, Ecuador, Mexico, Paraguay, Peru, 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 been renewed in Brazil. TAM VACATIONS 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 re- newed 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 Honduras; LATAM AIRLINES, SENZA FRONTIERE has been registered and/or renewed in Italy. ANNUAL REPORT 202311 —Annexes —Who we are SUA VIAGEM, LATAM SEM FRONTEIRAS, LATAM WALLET, MAX, MEGA PROMO, MUSEU TAM, PAIXÃO PELO RIO TAM, PREFERRED PARTNERS LAN, PROMO, RED REPORT, RELAX, TAM, TAM AIRLINES, TAM BUSCA PREÇO, TAM CARGO, TAM CARGO , ONVENCIONAL, 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 , RICE, TAM TARIFA LIGHT, TAM TARIFA MAX, TAM TARIFA PROMO, TAM TARIFA TOP, TAM VACATIONS, TAM VIAGENS. SALES CHANNELS NCG 461: 6.2 BUSINESSES Passenger operations: • Airport offices • Contact Center • Face-to-face agencies • Online agencies • Sales offices • Website (LATAM.COM) • Other airlines’ websites Cargo operations: • Airport offices • Contact Center • Agencies • Website (LATAMCARGO.COM) • Marketplaces (Virtual Agency) HUMAN RIGHTS 5.5 Workplace and sexual harassment NCG 461: 5.5 WORKPLACE AND SEXUAL HARASSMENT GRI 406-1 During 2023, cases of discrimination and conflicts of interest were reported in both Brazil and Spanish-speaking countries. In response to these cases, LATAM began a review of processes, created and reinforced control, auditing and training systems as mitigation measures, and levied sanctions under local labor regulations, such as remediation. ADDITIONAL INFORMATION NCG 461: 6.2 BUSINESSES • Aviation insurance: LATAM group has Aviation Insurance, including Hull, and Legal Liability, covering risks inherent to aviation, such as damages to aircraft, engines and parts, and third-party liability (passengers, cargo, etc.). LATAM group’s insurance is jointly managed by Grupo IAG (consisting of British Airways, Iberia, and its subsidiaries, and franchisees). The in- crease in business volumes has translated into better coverage and more competitive prices. • General insurance: These include various risks that may eventually affect the company's assets and equity, consider- ing multi-risk coverage (including damages and losses derived from fire, natural disasters, theft and other risks), automobile insurance and liability insurance. Moreover, the company has life, and health and accident insurance contracts covering the group’s personnel. • Clients: None of LATAM's clients individually represents over 10% of its sales. • Suppliers: In 2023, 26 suppliers individually represented over 10% of their category. 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 Chile, Colombia, Ecuador, Mexico and Peru; LATAM A NECES- SARY DESTINATION has been registered and/or renewed in United Kingdom; LATAM DESTINADAS A ESTAR JUNTAS has been registered and/or renewed in Peru. LATAM VUELA NEUTRAL has been registered and/or renewed in Bolivia 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 re- newed in Brazil; LATAM RECICLA TU VIAJE has been registered and/or renewed in Bolivia, Chile, Paraguay and Uruguay. LATAM 1+1 COMPENSAR PARA CONSERVAR has been regis- tered and/or renewed in Chile, Peru and Mexico; LATAM 1+1 OFFSET TO CONSERVE has been registered and/or renewed in Australia, United Kingdom and New Zealand. LATAM SEGUNDO VUELO has been registered and/or renewed in Bolivia, Chile, Ecuador, Mexico, Peru, the European Union and Uruguay; LATAM SECOND FLIGHT has been registered and/or renewed in Australia, United Kingdom and New Zealand. LATAM AVIÓN SOLIDARIO has been registered and/or renewed in Bolivia, Chile, Paraguay and Uruguay; LATAM AVIÃO SOLIDÁRIO has been registered and/or renewed in Brazil. TAM has filed for trademark registration, registered or renewed the following trademarks in Brazil, LATAM; LATAM AIRLINES; LATAM AIRLINES BRASIL; LATAM CARGO, LATAM CARGO BRA- SIL; LATAM FIDELIDADE; LATAM MRO, LATAM PASS; LATAM TRADE; LATAM LINHAS AÉREAS; LATAM TRAVEL; LATAM VIA- GENS; LATAM TRADE; LATAMPLAY; MERCADO LATAM; VAMOS LATAM. AJATO, BUSINESS CLASSIC, BUSINESS PLUS, CLASSIC, FIDELIDADE, FIRST, LAN. LAN CARGO, LAN COLOMBIA, LAN PERU, LAN.COM, LATAM AVIÃO SOLIDÁRIO, LATAM RECICLE 127 CONFIDENTIAL CHANNEL GRI 205-3 & 406-1 NCG 461: 5.5 WORKPLACE AND SEXUAL HARASSMENT REPORTING AREAS SPANISH -SPEAKING BRAZIL COUNTRIES 0 Corruption or bribery 86 Discrimination or harassment 0 Customer privacy data Conflicts of interest 9 Money laundering or insider trading 0 0 11 0 1 0 TOTAL 0 97 0 10 0 ANNUAL REPORT 2023 Corporate Governance 128 11 —Annexes —Corporate Governance Shareholders’ Agreements On or around the date of LATAM group's exit from its Chapter 11 reorganization proceeding in the United States of America (the "Exit Date") pursuant to the terms and conditions of the reorganization plan (the "Reorganization Plan") that was approved and con- firmed on June 18, 2022 by the Bankruptcy Court in said reorganization proceeding, the Supporting Creditors and the Supporting Stockholders of said Reorganization Plan entered into a Stockholders' Agreement (the "Stockholders' Agreement") which provides, among other things, that: (A) For a period of two years from the Exit Date, the parties to the Shareholders' Agreement shall vote with their shares for the Board of Directors of LATAM Airlines Group S.A. to be comprised, both initially and upon filling the corresponding vacancies, of nine members who, in accordance with Chilean law, shall be appointed as follows: (i) five members, including the vice-chairman of the LATAM Airlines Group S.A. Board of Directors, nominated by the Supporting Creditors; and (ii) four members, including the chairman of the LATAM Airlines Group S.A. Board of Directors (who shall be a Chilean national), nominated by the Supporting Sharehold- ers; and (B) during the first five years following the Exit Date, in the event of liquidation or dissolution of LATAM Airlines Group S.A., recoveries of shares surrendered upon exercise of the conversion option for the New Series H Convertible Notes (illustratively referred to as "Class B" in the Reorganization Plan), will be subordinated to any right of recovery for any backstop shares surrendered upon exercise of the conversion option for the New Series G Convertible Notes (illustratively referred to as "Class A" in the Reorganization Plan) or the New Series I Convertible Notes (illustratively referred to as "Class C," in the Reorganization Plan), in each case payable monthly at the rate of one-twelfth of said amount regardless of the number of Audit Committee meetings attended, with no limit on the number of meetings. COMPOSITION OF THE LATAM AIRLINES GROUP BOARD NCG 461: 3.2 BOARD OF DIRECTORS GRI 2-11 On November 15, 2022, Ignacio Cueto Plaza was elected as President of the Board. On November 15, 2022 the board of directors of LA- TAM Airlines Group was renewed, with Ignacio Cueto Plaza, Bornah Moghbel, Enrique Cueto Plaza, Frederico P. Fleury Curado, Antonio Gil Nievas, Michael Neruda, Bouk Van Geloven, Sonia J.S. Villalobos, and Alexander Wilcox elected. 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’ agree- ments, 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 Air- lines 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 complet- ed, 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. However, no sale of the voting shares of Holdco I ben- eficially 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, LA- TAM 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. ANNUAL REPORT 202311 —Annexes —Corporate Governance Conversion Option Characteristics of the Board 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 ad- verse 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 share- holders 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 con- sideration. 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. Board Profile 1 NCG 461 3.2 BOARD OF DIRECTORS GRI 2-9 Board members’ experience NCG 2.3.2 GRI 2-17 MEN WOMEN Skills, knowledge and prior experience By sex By nationality Brazil Chile Spain United States The Netherlands By age group Under 30 years Between 30 and 40 years old Between 41 and 50 years old Between 51 and 60 years old Between 61 and 70 years old Over 70 years old 8 1 2 1 3 1 - 1 2 3 2 - By seniority group Under 3 years 5 2 Between 3 and 6 years old More than 6 and up to 9 years 1 More than 9 and up to 12 years - - Over 12 years old People with disabilities - 1 1 - - - - - - - 1 - - - 1 - - - - 1 There are no deputy board members; they are all ordinary members. EXPERIENCE IN THE AVIATION INDUSTRY EXPERIENCE IN CORPORATE STRATEGY EXPERIENCE IN RISKS ECONOMY AND FINANCE EXPERIENCE IN COMPLIANCE ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ESG ● ● Director 1 Director 2 Director 3 Director 4 Director 5 Director 6 Director 7 Director 8 Director 9 GRI 2-9 Other mandates None of the board members hold senior positions (director or CEO) in four or more other publicly listed external companies. Average length of service The average length of service of the members of the Board of Directors by 2023 is 2.4 years. 129 ANNUAL REPORT 2023 11 —Annexes —Corporate Governance ANNUAL MANAGEMENT REPORT OF THE AUDIT COM- MITTEE NCG 461: 3.3 BOARD COMMITTEES and 10. COMMENTS FROM SHAREHOLDERS AND FROM THE AUDIT COMMITTEE Pursuant to article 50 Bis, paragraph 8, item 5, of Law No 18,046 on Limited Corporations, the Audit Committee of LATAM Airlines Group S.A. (the “Company” or “LATAM”) proceeds to issue the following annual report of its management for the year 2023. Integration of the audit committee Since November 15, 2022, the Company's Audit Committee includes Frederico Curado, Sonia J.S. Villalobos and Michael Neruda, who hold independent status under U.S. legislation. Under Chilean legislation, Mr. Frederico Curado has the status of independent director and is the chair of the Audit Committee. The directors were elected at the Extraordinary Shareholders' Meeting held on November 15, 2022, and their term of office is two years, in accordance with the provisions of the Company's bylaws. Committee activity report During fiscal year 2023, the Audit Committee met 13 times, to exercise its powers and comply with its duties pursuant to Article 50 Bis of Law No. 18,046 on Limited Corporations, as well as to review or evaluate those other matters that the Audit Committee deemed necessary. The main issues discussed are reported below. Review of balance sheet and financial statements The Audit Committee examined and reviewed the Company's financial statements as at December 31, 2022, as well as at the end of the quarters ended March 31, June 30 and September 30, 2023, at ordinary meetings held on March 9 and August 2, 2023, respectively, and extraordinary meetings held on May 3 and October 30, 2023, including the reports from the Compa- ny's external auditors, PriceWaterhouseCoopers Consultores, Auditores SPA ("PwC”), who participated in the 4 meetings. Audits under SOX standards Review of impairment reports In the meetings held on January 18, April 24, July 11, October 10 and December 13, 2023, the Audit Committee discussed issues related to the analysis of indications of impairment regarding certain assets included in the financial statements of the Air Transport cash-generating unit. Specifically, the results of the impairment test as at December 31, 2022 were discussed, as were the analyses of indications of impairment at March 31, June 30, and September 30, 2023, concluding that no indications of impairment were found that would warrant the need for the Company to carry out additional tests on said date, nor carry forward an accounting adjustment of assets on the testing date. Executives and workers’ remuneration systems In the meetings held on July 11, September 13 and October 10, 2023, the Committee examined the current remuneration and systems policies and the updates to remuneration plans for the Company's main executives and workers, including the Corporate Incentive Program (CIP). Internal audit In the meetings held on January 18, March 9, May 9, June 14, July 11, August 2, September 13, October 10, November 7 and December 13, 2023, matters related to Internal Audit were discussed. The status of the Internal Audit plan carried out during 2022 was reviewed, highlighting the number of projects addressed, the relevant aspects of the work carried out and the presentation of audit reports which analyzed the most important risks, the presentation and agreement of the work plan for 2023, and the progress of the work with regard to said plan. In the meetings of the Audit Committee held on January 18, March 9, May 9, August 2, September 13, October 10, November 7 and December 13, 2023, the plan to be followed in terms of SOX regulations for the 2023 certification was presented. The results obtained in the SOX certification during 2022, the most relevant issues to be considered during 2023, the Company's projects that could affect SOX regulations, and a schedule to be followed with regard to this certification during 2023 were also presented. External audit services In the meetings held on June 14, October 10 and December 13, 2023, PwC presented the work plan to be followed in the arena of external auditing during 2023, addressing issues related to the regulatory requirements for communication and work de- liverables, the composition of the PwC team, the consolidated audit approach, the progress achieved during the year in the review of internal control and the schedule of activities and communications that will be maintained with the members of the Committee. Corporate risk management At the meetings of the Audit Committee held on April 24 and December 13, 2023, matters related to corporate risks were reviewed, including prevention, the risk model and its status. At the meetings of the Audit Committee held on April 24 and December 13, 2023, matters related to corporate risks were reviewed, including prevention, the risk model and its status. Compliance In the meetings held on January 18 and September 13, 2023, the Audit Committee received the semi-annual reports and training on Compliance, reviewing, among other matters, the current Compliance Program and its main contents, which include the commitment of senior management, the most relevant rules and laws, the development of policies, trainings and communications, the status of Third Party Intermediaries ("TPIs"), the identification and handling of Compliance risks, and the reporting of Compliance at the corporate level, among others. Additionally, in the meetings held on March 9, April 24 and July 11, updates on Compliance issues, such as corporate policies, the crime prevention model and the new Economic Crimes Law, were presented. LATAM policies At the meetings held on April 24 and December 13, 2023, the process for the drafting, review and approval of existing policies was discussed, and updates to existing policies and some new policies were analyzed, including the Policy for the Recovery of Erroneously Awarded Remuneration (Clawback). Examination of reports pertaining to the Related-Party Trans- actions Policy (“RPT”) At the Committee meetings held on March 9, June 14 and Sep- tember 13, 2023, in compliance with the reporting obligation established in the Company's current RPT Policy, management informed the Audit Committee about: (i) the usual transactions entered into by the LATAM group with those subsidiaries in which it has a stake of less than 95%, (ii) the main transactions entered into between the LATAM group companies in general, and (iii) those transactions disclosed in the note to the financial statements on related-party transactions. Audit Committee recommendations On the other hand, the Audit Committee made the recommen- dations indicated below, in terms of the appointment of the Company's External Auditors, Private Risk Rating Agencies for the financial year 2023, and other matters related to their role. 130130 ANNUAL REPORT 202311 —Annexes —Corporate Governance Audit Committee Report on Meeting Activity 5) Ordinary meeting N°242 05/09/2023 10) Ordinary meeting N°247 10/10/2023 The Audit Committee met and held meetings on 13 occasions, with the participation of its three members in each of these sessions, as detailed below, with a brief list of the main issues discussed in each of the meetings: 1) Ordinary meeting N°239 01/18/2023 · Status of SOX Certification 2022 · Impairment test in relation to the Financial Statements as at 12.31.22 · Fraud Management Model · Compliance Program update · Internal Audit work plan 2023 · Internal Audit goal Results 2022 · Executive meeting – reserved slot for LATAM CEO 2) Ordinary meeting N°240 03/09/2023 · Review of the Financial Statements as at 12.31.22 · SOX Certification 2022 report · Performance evaluation of the External Auditor · Proposal of External Auditors and Private Risk Rating Agencies for 2023 · Review of related-party transactions · Annual Audit Committee management report · Internal Audit goals for 2023 3) Ordinary meeting N° 241 04/24/2023 · Indications of impairment for the first quarter of 2023 · Corporate Policies review · Corporate Risk status · Executive meeting– reserved slot for Legal VP 4) Extraordinary meeting N°190 05/03/2023 · Review of Financial Statements as at 03.31.23 · Internal Audit and SOx Certification 2023 work plan update · Review of Brazil topics 6) Ordinary meeting N°243 06/14/2023 · External Auditor 2023 work plan · Status of Brazil tax matters · Review of related-party transactions · Review of Colombia topics · Status of projects included in the Internal Audit plan · Executive meeting– reserved slot for LATAM CFO 7) Ordinary session N°244 07/11/2023 · Remuneration systems and Company executives and work- ers’ remuneration plans (CIP) · Indications of impairment for the second quarter of 2023 · Draft law- Model for the Prevention of Economic Crimes and Attacks on the Environment · Status of projects included in the Internal Audit plan · Executive meeting– reserved slot for External Auditor 8) Ordinary meeting N°245 08/02/2023 · Review of Financial Statements as at 06.30.23 · Status of Internal Audit work plan · Review of Peru topics 9) Ordinary meeting N°246 09/13/2023 · Update on Company executives and workers’ remuneration plans (CIP) · Review of Ecuador topics · Review of related-party transactions · Status of Internal Audit work plan · Compliance Program update · Executive meeting – reserved slot for Legal VP · Indications of impairment for the third quarter of 2023 · Accounting treatment of CIP · Status of SOX Certification 2023 work plan · Review of Paraguay topics · Status of projects included in the Internal Audit plan · Executive meeting– reserved slot for LATAM CEO 11) Extraordinary meeting N°191 10/30/2023 · Review of Financial Statements as at 09.30.23 12) Ordinary meeting N°248 11/7/2023 · Tax matters · Review of estimates and relevant accounting policies · Status of Internal Audit work plan · Review of USA and Cargo topics · Group structure simplification process · Executive meeting– reserved slot for Internal Audit Direc- tor 13) Ordinary meeting N°249 12/13/2023 · Impairment test · Status of SOX 2023 Certification work plan · Review of related-party transactions · Review of Corporate Policies · Corporate Risk Status · Status of Internal Audit work plan · Executive meeting– reserved slot for External Auditor 131 ANNUAL REPORT 202311 —Annexes —Corporate Governance technical and economic evaluation of the bidding process for this service carried out in 2022 and the work and performance evaluation of the audit work done in the previous year, to con- tinue with external auditors PwC for financial year 2023. The above proposal was approved by the Company's Shareholders' Meeting held on April 20, 2023. IV.2 Proposal of Private Risk-Rating Agencies At its meeting held on March 9, 2023, and in accordance with the provisions of paragraph 2) clause eight of Article 50 Bis of Law number 18,046 on Limited Corporations, the Audit Com- mittee agreed to propose to the Board of Directors the Risk Rating Agencies to be submitted for approval at the Compa- ny’s Ordinary Shareholders' Meeting on April 20, 2023. In this regard, the Committee resolved to propose to the Company's Board of Directors the appointment of the following local risk rating agencies: Fitch Chile Clasificadora de Riesgo Limitada, Feller-Rate Clasificadora de Riesgo Limitada and International Credit Rating (ICR) Compañía Clasificadora de Riesgo Limitada. As for international risk rating agencies, the Audit Committee agreed to propose to the Board of Directors the appointment of the following firms: Fitch Ratings, Inc, Moody's Investors Service and Standard & Poor's Ratings Services. IV. 3 Other recommendations In addition to the recommendations indicated above and as part of its usual activities, the Audit Committee recommended to the Board of Directors, among other matters, the approval of the Quarterly Financial Statements for March, June and September; the adoption of new corporate policies and their updates; the Company Incentive Plan for executives and em- ployees (CIP). AUDIT COMMITTEE REMUNERATION AND SPENDING GRI-19 The Company’s Ordinary Shareholders' Meeting, held on April 20, 2023, resolved for financial year 2023 and until the next Ordinary Shareholders' Meeting to be held in 2024: 1. As base remuneration for each Director member of the Au- dit Committee, a fixed annual allowance of US$50,000 and US$85,417 for the Chair of the Audit Committee, payable on a monthly basis, at a ratio of one twelfth of said amount, regardless of the number of Audit Committee meetings at- tended, with no limit on the number of meetings. 2. As additional remuneration for each Director member of the Audit Committee, a variable amount, equivalent to an addition- al one third (1/3) calculated as additional remuneration units (URA, for its Spanish acronym) that the respective member of the Committee is entitled to as Director, considering the time that each has served as a member of the Committee. For the operation of the Audit Committee and its advisors, Law No. 18,046 on Limited Corporations establishes that the expense budget must be at least equal to the sum of the an- nual remuneration of the members of the Committee. Thus, the Ordinary Shareholders' Meeting held on April 20, 2023, approved an annual expense budget for the committee of US$185,417 for financial year 2023 and until the next Ordinary Shareholders' Meeting to be held in 2024. No use was made of this expense budget during 2023. AUDIT COMMITTEE RECOMMENDATIONS IV.1 Proposal for the appointment of External Auditors At the Audit Committee meeting held on March 9, 2023, and in accordance with the provisions of paragraph 2) of clause eight of Article 50 Bis of Law No. 18,046 on Limited Corporations, it was agreed to propose to the Company’s Board of Directors, based on the analysis made by management regarding the 132 NEW ANNUAL REMUNERATION STRUCTURE OF THE BOARD NCG 461: 3.2 & 3.3 On April 20, 2023, the ordinary shareholders’ meeting approved the new annual remuneration structure of the Board, for the fiscal year 2023 and until the next ordinary shareholders’ meeting scheduled to take place within the first quarter of 2024. 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 onetwelfth of the 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 20, 2023, to be determined based on the following criteria: a. From November 15, 2022 through November 15, 2023, 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, 2023 through November 15, 2024, each Board member will be entitled to re- ceive another additional amount equivalent to 9,226,234 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 and Audit Committee are entitled to certain fixed and variable compensation (see “Board of Directors’ Committee and Audit Committee” below). ANNUAL REPORT 2023Our business Industry context 11 —Annexes —Our business Regulatory framework NCG 461: 6.1 INDUSTRIAL SECTOR GRI 2-27 REGULATION ENVIRONMENTAL AND NOISE REGULATION SAFETY AND SECURITY 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 main- tained the necessary authority, including authoriza- tions and operative certificates where required, which are subject to ongoing compliance with statutes, rules and regulations pertaining to the airline industry, in- cluding any rules and regulations that may be adopted in the future. The countries where we carry out most of our opera- tions are contracting states and permanent members of the ICAO, an agency of the United Nations estab- lished in 1947 to assist in the planning and develop- ment 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 stan- dards. We believe that we are in material compliance with all such relevant technical standards. 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 3 Requirements” across its fleet. In 2016, the ICAO adopted a resolution creating the Carbon Offsetting and Reduction Scheme for Inter- national Aviation (CORSIA), providing a framework for a global market-based measure to stabilize CO2 emissions in international civil aviation (i.e., civil avi- ation 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, is being implemented in various phases by ICAO member states starting in 2021 (with the voluntary member states). 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 oper- ation of aircraft and its maintenance. In the United States, the Aviation and Transportation Security Act requires, among other things, the imple- mentation 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 Se- curity Act is provided in part by a US$5.60 per seg- ment 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 Unit- ed 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 re- lated to route rights and pricing policy in the countries where we operate. 133 ANNUAL REPORT 202311 —Annexes —Our business BRAZIL Aeronautical Regulation safety or maintenance, ANAC has incorporated by reference the majority of the ICAO’s technical standards. how it could be revoked and reassigned. This provision of the resolution came into force in September 2019. Route Rights Airfare Pricing Policy The Brazilian aviation industry is regulated and overseen by the ANAC. The ANAC reports directly to the Civil Aviation Secre- tary, 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 stan- dards, 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 neces- sary 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 reg- ulations 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 navigation. Brazil is a contracting state and a permanent member of the ICAO. The ICAO establishes tech- nical standards for the international aviation industry, which Brazilian authorities, represented by the Brazilian Defense Ministry, have incorporated into Brazilian laws and regulations. In the absence of an applicable Brazilian regulation concerning 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 International Routes: Brazilian and non-Brazilian airlines pro- viding 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 vari- ous 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 destina- tions. 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. ANAC’s resolution 491/18 indicates the requirements to establish the underuse of a frequency, and 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 Court with respect to monopolistic or other pricing practices by other airlines that violate Brazil’s antitrust laws. 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 com- pliance 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 sub- ject 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. 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 inter- national 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 agree- ments 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 134 ANNUAL REPORT 2023other methods of marketing used by the company. • controlling air traffic control inside domestic air space; 11 —Annexes —Our business entire domestic territory, in charge of regulating and supervis- ing 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 Regu- lations (“RAC”). The AC also grants the necessary permits for air transportation. Route Rights The AC grants operation permits to domestic and foreign car- riers 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 invest- ment in domestic airlines. 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. 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 Dirección General de Aviación Civil (“DGAC”), which is a technical regu- latory 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. Airfare Pricing Policy Fundamentally, the DGAC is responsible for: Since July 2007, as stated in resolution 3299 of the Aeronau- tical 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 pas- sengers 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 • 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; • approving shared codes; and • modifying operations permits. The DGAC also must comply with the standards and recom- mended 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 transporta- tion. 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, oth- erwise, the principle of reciprocity is applied. 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 ac- cess 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 prac- tices. 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. 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. Inter- national 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 domes- tic and international fares without government regulation. For more information, see “-Antitrust Regulation” below. In 1997, the Antitrust Commission approved and imposed a spe- cific 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. 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 135 ANNUAL REPORT 202311 —Annexes —Our business In general, bilateral treaties regarding air transportation allow for airfares to be regulated by the regulation of the country of origin. are not permitted to provide domestic air service between destinations in Peru. “Antitrust Law.” The Antitrust Law considers as anticompetitive, any conduct that prevents, restricts or hinders competition, or sets out to produce said effects. PERU Aeronautical Regulation The Peruvian Dirección General de Aeronáutica Civil (the “PDGAC”) oversees and regulates the Peruvian aviation indus- try. The PDGAC reports directly to the Ministry of Transpor- tation 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 opera- tions, including personnel, aircraft and security standards, air traffic control and airport management. We have obtained and maintain the necessary authorizations from the Peruvian gov- ernment 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 inter- national aviation industry, which Peruvian authorities have incorporated into Peruvian laws and regulations. In the ab- sence 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. International Routes: As an airline providing services on in- ternational 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 vari- ous 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 sub- ject 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. ANTITRUST REGULATION Route Rights Chile Domestic Routes: Peruvian airlines are required to obtain per- mits 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 The Chilean antitrust authority, which we refer to as the National Economic Prosecutor Office (“FNE” by its Spanish name), oversees and investigates antitrust matters, which are governed by Decree Law No. 211 of 1973, as amended, or the 136 The Antitrust Law continues by giving examples of the following anticompetitive conducts: (i) cartels; (ii) abuse of dominance; and (iii) interlocking. The Antitrust Law defines abusive prac- tices as (i) the abusive exploitation by an economic agent, or a group thereof, of a dominant position in the market, fixing sale or purchase prices, the imposition to acquire a specific product within a sale, allocating territories or market quotas or imposing similar abuses on other competitors; and (ii) predatory practices, or unfair competition, carried out with the purpose of reaching, maintaining or increasing a dominant position in the market. 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 correspond- ing 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). On August 17, 2023 Chilean Law No. 21,595 (the Economic Crimes Act, or “ECA”) was published in the Official Gazette. The ECA became effective on such same date with respect to individuals and will come into effect with respect to legal entities (e.g., such as LATAM Airlines Group) on September 1, 2024. including the following: 1. The ECA expands the list of criminal offenses that can trig- ger the legal entity’s criminal liability from 20 to around 230 offenses. 2. The ECA expands the individuals capable of triggering crim- inal liability of a legal entity, which as amended, consist of: a. Those who hold an office, position or perform duties within the corresponding legal entity. b. Those who provide services managing the legal entity’s af- fairs with third parties, with or without representation. c. Those individuals captured by (a) and (b) above that (i) provide services to another legal entity or (ii) have ownership or stake in such another legal entity in a way that the other legal entity lacks operational autonomy (i.e., an employee of a controlled subsidiary may trigger the criminal liability of the holding company). 3. The ECA adds the appointment by the courts of a super- visor of the legal entity as a potential sanction or protective order that may be adopted during the investigation stage of the criminal procedure. The instructions provided by the su- pervisor are binding to the company. 4. The ECA will no longer require that the crime be committed in the benefit of the legal entity for the entity to be criminally responsible. The legal entity will only be exempt from this re- sponsibility when the crime is committed exclusively against such legal entity. 5. There will be a special day-rate system of fines for legal entities. In this case, the potentially applicable fines will range from approximately US$725 to US$145 million. Among other things, the ECA considerably modifies the cur- rent regulation of criminal liability applicable to legal entities, As described above under “—Route Rights—Airfare Pricing Policy,” pursuant to Resolution No. 445 of August 1995, the ANNUAL REPORT 202311 —Annexes —Our business 3. execution of interline agreements with airlines operating the Santiago-São Paulo, Santiago-Río de Janeiro and Santia- go-Asunción routes; 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; TDLC approved a merger between LAN Chile and LADECO, but imposed a specific self-regulatory fare plan for domestic air passenger market consistent with the TDLC’s directive to maintain a competitive environment within the domestic mar- ket. This Airfare Pricing Policy 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. Since October 1997, LATAM and LATAM Chile follow a self-reg- ulatory 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-regulatory 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. On September 21, 2011, the TDLC issued a decision (the “De- cision”) with respect to the consultation procedure initiated on January 28, 2011, in connection with the merger between LAN and TAM. The TDLC approved the proposed merger between LAN and TAM, subject to 14 conditions as generally described below: 4. certain capacity and other transitory restrictions applicable to the Santiago-São Paulo route; 5. certain amendments to LAN’s self-regulatory fare plan ap- proved 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 outside the global airline alliance to which LATAM belongs for routes with origin or destination in Chile or that connect to North Ameri- ca and Europe, or with Avianca/TACA or Gol for international routes in South America, including the obligation to consult with, and obtain approval from, the TDLC prior to its execu- tion of certain of those codeshare agreements (the “Seventh Condition”); 8. the abandonment of four air traffic frequencies with free- dom rights between Chile and Peru, limitations to acquire more than 75% of the air traffic frequencies in that route, and the periods in which air traffic frequencies may be granted to LATAM by the Chilean authorities; 1. swap certain slots in the Guarulhos Airport at São Paulo, Brazil, to be used by an occasional third party interested in of- fering direct non-stop flights between São Paulo and Santiago; 9. issuance of a statement by LATAM supporting the unilateral opening of the Chilean domestic skies (cabotage) and absten- tion from any actions that would prevent such opening; 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; 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; 137 13. certain transitory restrictions on increasing fares in the Santiago-São Paulo and Santiago-Río 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 op- erations 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 initiated a legal claim against LATAM before the TDLC alleging that LATAM was not complying with certain mitigation conditions related to the code share agreements with airlines outside LATAM’s global alliance as referenced above in the seventh condition. Although LATAM opposed to this allegation and responded to the claim accordingly, a settlement agreement was reached between the FNE and LATAM (the “Settlement Agreement”). The Settlement Agreement approved by the TDLC on December 22, 2015, 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. On October 31, 2018, the TDLC approved the joint business agreements between LATAM and American Airlines, and be- tween LATAM and International Airlines Group (“IAG”), subject to nine mitigation measures. On May 23, 2019 the Supreme Court of Chile revoked the TDLC decision to approve these agreements, and by the end of 2019 LATAM decided to ter- minate both agreements. On October 15, 2019, LATAM Airlines Group was notified that the Chilean Economic Prosecution (Fiscalía Nacional Económi- ca, “FNE”) had commenced an investigation regarding a joint venture agreement entered into between LATAM Airlines Group 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 im- poses 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 com- mercially sensitive information, and periodic antitrust training regarding their obligations under the settlement. Relatedly, on August 12, 2021, LATAM was notified of a resolu- tion issued by the FNE alleging non-compliance of restrictions imposed with respect to certain codeshare agreements. On November 6, 2023, LATAM, Delta Air Lines and FNE reached an out-of-court agreement to amend part of the codeshare agreements, 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 Gua- rulhos 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. ANNUAL REPORT 202311 —Annexes —Our business 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 ap- proval 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. 138 ANNUAL REPORT 202311 —Annexes —Our business Material events NCG 461: 9 RELEVANT OR MATERIAL EVENTS Santiago, March 9, 2023 OTHERS Pursuant to the provisions of Article 9 and item two of Article 10 of Law No. 18,045, and the provisions of General Standard No. 30, duly authorized by the Board of Directors in its meet- ing held on this same date, it informed the Financial Market Commission (the "Commission"), as a MATERIAL EVENT of LATAM Airlines Group S.A. ("LATAM" or the "Company"), of the following: As informed by a material fact dated December 15, 2022, on November 3, 2022, LATAM emerged from its reorganization proceeding in the United States of America pursuant to the rules set forth in Chapter 11 of Title 11 of the United States Code (the "Chapter 11 Proceeding"). Notwithstanding the fore- going, certain provisions of Chapter 11 of Title 11 of the United States Code still impose certain obligations on the Company. One of these obligations is to issue as part of the closing of the Chapter 11 proceeding, on a quarterly basis, reports called "Post Confirmation Reports" ("PCR"). By virtue of the foregoing, we hereby make available to your Commission and to the market in general, the quarterly PCR for the year ended December 31, 2022, which was issued to- day together with the annual financial statements and which is included herein as an Annex. The PCR does not in any way replace the financial information that the Company regularly delivers pursuant to applicable securities and/or regulatory standards and has been prepared solely for the purpose of complying with the post-exit obli- gations of the Chapter 11 Proceeding. Without limiting the generality of the foregoing, financial information does not con- stitute or replace in any way the delivery of the corresponding financial statements to the Commission and the market, in terms of content requirements, procedures and filing deadlines established by said Service in current regulation. net losses stated in the preceding paragraph. To this end, in the next few days, the Board of Directors plans to convene an extraordinary shareholders' meeting to decide on this matter. • Selection of the newspaper for any publications to be made by the Company; Consequently, and without prejudice to the other limitations set forth in the PCR, we declare that the information contained in this report, made exclusively to comply with the obligations following the exit of the Chapter 11 Procedure, is unaudited, limited in scope and covers a restricted period. Therefore, said information is subject to material changes as the corresponding quarter progresses and in accordance with the regular processes for the preparation of quarterly financial statements, including limited review by the external auditors, when applicable. Santiago, March 9, 2023 OTHERS Pursuant to the provisions of Article 9 and item two of Article 10 of Law No. 18,045, and the provisions of General Standard No. 30, duly authorized by the Board of Directors in its meet- ing held on this same date, it informed the Financial Market Commission, as a MATERIAL EVENT of LATAM Airlines Group S.A. ("LATAM" or the "Company"), of the following: Today, in an extraordinary meeting, LATAM's Board of Directors approved the Annual Financial Statements for the year ended December 31, 2022, which report a profit for the year of USD$ 1,339,210,295. On the other hand, the Company has accrued losses from prior years in the amount of USD$8,841,105,611, which are mainly due to negative results caused by the impact of the COVID-19 pandemic on business operations from 2020 to 2022. In view of the above, the profits for the year ended December 31, 2022, should be allocated first to absorb such losses. After performing these transactions, LATAM has net accrued losses of USD$7,501,895,316 up to December 31, 2022. Therefore, there is no distribution of dividends for the year ended December 31, 2022. At the same meeting, the Board of Directors agreed to recom- mend to the shareholders to decrease the capital stock in the amount of USD$7,501,895,316, by absorbing the total accrued Santiago, March 27, 2023 NOTICE OF ORDINARY AND EXTRAORDINARY SHAREHOLD- ERS' MEETINGS • Other matters of corporate interest that pertain to the Or- dinary Shareholders' Meeting. • Related-party transactions account; and Pursuant to the provisions of Article 9 and section two of Ar- ticle 10 of Law N° 18,045, and to the provisions of the Com- mission’s General Standard N° 30, duly empowered, I hereby inform you of the following Material Event regarding LATAM Airlines Group S.A. (the Company): In a meeting held today, the Company’s Board of Directors resolved to convene an Ordinary Shareholders' Meeting to be held on April 20, 2023, at 11:00 a.m., and an Extraordinary Shareholders' Meeting, to be held immediately after, both to be held at Mac-Iver 125, 17th floor, Santiago, to hear or decide, as the case may be, on the matters indicated below: Ordinary Shareholders’ Meeting The purpose of the Ordinary Meeting shall be the following matters: • Annual Report, Balance Sheet and Financial Statements cor- responding to Fiscal Year 2022; the situation of the Company; and the corresponding report by the External Auditing Firm; • Compensation of the Board of Directors for Financial Year 2023; • Remuneration and budget of the Audit Committee for Fi- nancial Year 2023; • Appointment of the External Auditors firm; • Appointment of Risk Rating Agencies; Extraordinary Shareholders’ Meeting The purpose of the Extraordinary Meeting shall be the follow- ing matters: 1. To agree on a decrease in the Company’s capital by ab- sorbing the accrued losses of the Company up to December 31, 2022, after allocating the profits of Financial Year 2022 to such accrued losses; 2. To agree on a decrease in the Company's capital through the absorption of the equity account "Treasury shares held", produced as a result of the January 2012 rightful decrease in capital stock, which took place pursuant to the provisions of Article 27 of the Corporations Law; 3. To recognize any change in the capital stock resulting from the placement of shares and convertible notes charged to the capital increase approved at the Extraordinary Shareholders' Meeting held on July 5, 2022; and to deduct from the paid-in capital the costs of issuance and placement of such shares and convertible notes; and 4. In general, to adopt amendments to the bylaws and all other resolutions that may be necessary or convenient to carry out the decisions adopted by the Shareholders. The holders of shares registered in the Shareholders' Register by midnight on the fifth business day prior to the day of the Meeting—i.e., registered at midnight on April 14, 2023—shall be entitled to participate in the Meetings and to exercise their right to speak and vote. 139 ANNUAL REPORT 202311 —Annexes —Our business It has been resolved that the Meetings will be held remotely, to avoid exposing those attending the meetings to infection. For this purpose, any shareholders interested in participat- ing in the Meetings, or their representatives must, until 3:00 p.m. on the day before the Meetings, register by sending an e-mail to registrojuntas@dcv.cl, expressing their interest in participating in the Meetings, attaching a scanned image of their identity card on both sides, or of their passport; of the proxy, if applicable; and of the application form to participate in the Meetings. The Meetings will be held through the Zoom videoconference platform and voting via acclamation or viva voce, or through the electronic voting platform provided by DCV Registros S.A., which will be accessed through the Click&Vote platform, through the "Join the Meeting” link. The rest of the required documentation and more detailed information on how to register, participate and vote remotely in the Meetings and other relevant aspects will be made available and communi- cated in due course through instructions that will be uploaded to the Company's website, www.latamairlinesgroup.net. The meeting notices will be published in the Diario La Tercera journal of Santiago, on April 10, 12 and 17, 2023. Shareholders will be able to obtain a copy of the documents supporting the matters on which they must vote at the Share- holders' Meetings, as of April 10, 2023, on the Company's web- site, www.latamairlinesgroup.net. In addition, any shareholder wishing to obtain a copy of these documents may contact, also as of April 10, 2023, the Company's Investor Relations Department at the following e-mail address InvestorRela- tions@latam.com or by telephone at (56-2) 2565-8785, for such purpose. Among such documents, information on the alternatives of external auditing firms to be proposed to the Ordinary Shareholders' Meeting for financial year 2023 and their respective rationale will be available. Santiago, May 3, 2023 OTHERS In accordance with the provisions of Article 9 and item two of Article 10 of Law No. 18,045, and the provisions of General Standard No. 30, duly authorized by the Board of Directors in its meeting held on this same date, it informed the Financial Market Commission (the "Commission"), as a MATERIAL EVENT of LATAM Airlines Group S.A. ("LATAM" or the "Company"), of the following: • As informed by a material fact dated December 15, 2022, on November 3, 2022, LATAM emerged from its reorgani- zation proceeding in the United States of America pursuant to the rules set forth in Chapter 11 of Title 11 of the United States Code (the "Chapter 11 Proceeding"). Notwithstanding the foregoing, certain provisions of Chapter 11 of Title 11 of the United States Code still impose certain obligations on the Company. One of these obligations is to issue as part of the closing of the Chapter 11 proceeding, on a quarterly basis, reports called "Post Confirmation Reports" ("PCR"). • By virtue of the foregoing, we hereby make available to your Commission and to the market in general, the quarterly PCR for the year ended March 31, 2023, which was issued today together with the annual financial statements and which is included herein as an Annex. • The PCR does not in any way replace the financial information that the Company regularly delivers pursuant to applicable securities rules and/or regulation and has been prepared solely for the purpose of complying with the post-exit obligations of the Chapter 11 Proceeding. Notwithstanding the foregoing, this financial information does not constitute or replace in any way the delivery of the corresponding financial statements to the Commission and the market, in terms of content requirements, procedures and filing deadlines established by said Service in current regulation. Consequently, and without prejudice to the other limitations set forth in the PCR, we declare that the information contained in this report, made exclusively to comply with the obligations following the exit of the Chapter 11 Procedure, is unaudited, limited in scope and covers a restricted period. Therefore, said information is subject to material changes as the corresponding quarter progresses and in accordance with the regular processes for the preparation of quarterly financial statements, including limited review by the external auditors, when applicable. Santiago, August 2, 2023 OTHERS In accordance with the provisions of Article 9 and item two of Article 10 of Law No. 18,045, and the provisions of General Standard No. 30, duly authorized by the Board of Directors in its meeting held on this same date, it informed the Financial Market Commission (the "Commission"), as a MATERIAL EVENT of LATAM Airlines Group S.A. ("LATAM" or the "Company"), of the following: • As informed by a material fact dated December 15, 2022, on November 3, 2022, LATAM emerged from its reorgani- zation proceeding in the United States of America pursuant to the rules set forth in Chapter 11 of Title 11 of the United States Code (the "Chapter 11 Proceeding"). Notwithstanding the foregoing, certain provisions of Chapter 11 of Title 11 of the United States Code still impose certain obligations on the Company. One of these obligations is to issue as part of the closing of the Chapter 11 proceeding, on a quarterly basis, reports called "Post Confirmation Reports" ("PCR"). • On June 29, 2023, following the substantial resolution of the remaining issues in the Chapter 11 Proceeding and all appeals from the Confirmation Order, the Bankruptcy Court issued the final decree in the Chapter 11 Proceeding and ordered the case closed (the "Closing Date"). • By virtue of the foregoing, we hereby make available to your Commission and to the market in general, the last PCR with partial information up to the Closing Date which, together with 140 the quarterly financial statements up to June 20, 2023, was issued today and is included herein as an Annex. • The PCR does not in any way replace the financial information that the Company regularly delivers pursuant to applicable securities and/or regulatory standards and has been prepared solely for the purpose of complying with the post-exit obli- gations of the Chapter 11 Proceeding. Notwithstanding the foregoing, this financial information does not constitute or replace in any way the delivery of the corresponding financial statements to the Commission and the market, in terms of content requirements, procedures and filing deadlines estab- lished by said Service in current regulation. Consequently, and without prejudice to the other limitations set forth in the PCR, we declare that the information contained in this report, made exclusively to comply with the obligations following the exit of the Chapter 11 Procedure, is unaudited, limited in scope and covers a restricted period. Therefore, such information is subject to and qualified by what is stated in our quarterly financial statements up to June 30, 2023, disclosed on this same date, including the limited review of the external auditors where applicable. ANNUAL REPORT 202311 —Annexes —Our business Risk factors NCG 461: 3.6 RISK MANAGEMENT GRI 3-3 The following risk factors, and those important risk factors described in other reports we submit to or file with the Securi- ties 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 under- stand 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. • We rely on maintaining a high aircraft utilization rate to in- crease our revenues and absorb our fixed costs, which makes us especially vulnerable to delays. • Problems with air traffic control systems or other technical failures could interrupt our operations and have a material adverse effect on our business. • The group’s business and results of operations may be ad- versely affected if we fail to obtain and maintain routes, suit- able airport access, slots and other operating permits. • Our operations are subject to fluctuations in the supply and cost of jet fuel, which could adversely impact our business. • Losses and liabilities in the event of an accident involving one or more of our aircraft could materially affect our business. • It cannot be assured that in the future we will have access to adequate facilities and landing rights necessary to achieve our expansion plans. • We are exposed to increases in landing fees and other airport service charges that could adversely affect our margin and competitive position. • 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. • The group depends on strategic alliances or commercial re- lationships in many different countries, and the business may suffer if any of our strategic alliances or commercial relation- ships terminates. • A significant portion of our cargo revenue comes from rel- atively few product types and may be impacted by events affecting their production, trade or demand. • 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. • A failure to successfully implement the group’s strategy or a failure to adjust such strategy to the current economic sit- uation would harm the group’s business and the market value of our ADSs and common shares. • An accumulation of ticket refunds could have an adverse effect on our financial results. • If we are unable to incorporate leased aircraft into the fleet at acceptable rates and terms in the future, our business could be adversely affected. • LATAM may experience difficulty finding, training and retain- ing employees, which can lead to increased costs and impair our ability to execute strategy and implement operational initiatives. • Increases in insurance costs and/or significant reductions in coverage could harm our financial condition 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. • 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. • 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 culture, our busi- ness and results of operations could be materially adversely affected. • Our business may experience adverse consequences if we are unable to reach satisfactory collective bargaining agreements with unionized employees. Collective action by employees could cause operating disruptions and adversely impact our business. • Increases in our labor costs, which constitute a substantial portion of our total operating expenses, could directly impact our earnings. Risks Relating to the Airline Industry and the Countries in Which We Operate • We face reputational risks related to the use of social media. Safety & Operational Risks • We depend on a limited number of suppliers for certain air- craft and engine parts. LATAM 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. • 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 ad- versely impact the group’s business and results of operations and cause the market price of our common shares and ADSs to decrease. • Latin American governments have exercised and continue to exercise significant influence over their economies. • Political instability and social unrest in Latin America may 141 ANNUAL REPORT 202311 —Annexes —Our business adversely affect our business. generate risks in implementation and regulatory control. withholding taxes could negatively affect non-Chilean residents that invest in our shares. • 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 fluc- tuations. Environmental and Regulatory Risks • Our reputation and brand could be adversely impacted if we fail to make progress towards achieving our environmen- tal sustainability and diversity, equity and inclusion goals. Our operations are subject to local, national and international environmental regulations; costs of compliance with applica- ble 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 and results of operations and financial condition. • Our reputation and brand could be adversely impacted if we fail to make progress towards achieving our environmental sustainability and diversity, equity and inclusion goals. • Our ADS holders may not be able to exercise preemptive rights in certain circumstances. Risks Related to our Indebtedness • We have substantial liquidity needs and continue to pursue various financing options. Our business may be adversely af- fected if we are unable to service our debt or meet our future financing requirements. • We are not required to disclose as much information to in- vestors 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. Risks Relating to our Business • We have significant exposure to SOFR and other floating interest rates; increases in interest rates will increase our fi- nancing cost and may have adverse effects on our financial condition and results of operations. 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 debt agreements contain various affirmative, negative and financial covenants, which could limit our ability to con- duct 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 ADRs holders. • Holders of ADRs may be adversely affected by the substan- tial dilution of the shares represented by ADRs. • Trading of our ADSs and common shares in the securities markets is limited and could experience further illiquidity and price volatility. 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 compet- itors. Airlines compete primarily over fare levels, frequency and dependability of service, brand recognition, passenger amenities (such as frequent flyer programs) and the availabil- ity 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. In- formation 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 • We are subject to risks relating to litigation and administra- tive proceedings that could adversely affect the business and financial performance in the event of an unfavorable ruling. • Holders of ADRs may be adversely affected by currency devaluations and foreign exchange fluctuations. • Rapid technological advancements and digitalization could • Future changes in Chilean foreign investment controls and 142 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 more 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. Moreover, the COVID-19 pandemic has prompted changes in business models, with Avianca transition- ing to a low-cost model. Additionally, some of these airlines have pursued strategies of consolidation through alliances or mergers with legacy carriers. Examples include the creation of Abra Group (Avianca and Gol) and the recent approval by relevant authorities for American Airlines to acquire a minority stake in JetSmart. In the Cargo business, companies such as Maersk, CMA CGM and MSC have begun to compete in air transportation, in part due to the COVID-19 pandemic and the scarcity of containers; CMA CGM and Air France-KLM airlines agreed to share cargo space in their airplanes; and American Airlines Cargo and Web Cargo have partnered to increase their destinations. 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 ven- tures, 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. International strategic growth plans rely, in part, upon receipt of regulatory approvals of the countries in which we plan to expand our operations with joint business agreements. The group may not be able to obtain those approvals, while other ANNUAL REPORT 202311 —Annexes —Our business competitors might be approved. Accordingly, we might not be able to compete for the same routes as our competitors, which could diminish our market share and adversely impact our financial results. No assurances can be given as to any benefits, if any, that we may derive from such agreements. 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, sub- sidies, 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. Ad- ditionally, 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. This support could place us at a competitive disad- vantage and adversely affect our business, financial condition and results of operations The group’s business and results of operations may be adverse- ly affected if we fail to obtain and maintain routes, suitable airport access, slots and other operating permits. LATAM’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. 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 143 markets or under bilateral agreements; or • the inability to maintain our existing slots and obtain addi- tional 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 re- strictions 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 prompt- ly, 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 infra- structure 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, Gua- rulhos (Governador André Franco Montoro International Air- port), 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 operations could have a negative financial impact on our business. 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. The group depends on strategic alliances or commercial rela- tionships in many different countries, and the business may suffer if any of our strategic alliances or commercial relation- ships terminates. We maintain a number of alliances and other commercial rela- tionships in many of the jurisdictions in which LATAM and its affiliates operate. These alliances or commercial relationships allow us to enhance our network and, in some cases, to offer our customers services that we could not otherwise offer. If any of our strategic alliances or commercial relationships deteriorate, or any of these agreements are terminated, the group’s business, financial condition and results of operations could be adversely affected. A failure to successfully implement the group’s strategy or a failure to adjust such strategy to the current economic situ- ation would harm the group’s business and the market value of our ADSs and common shares. We have developed a strategic plan with the goal of becoming one of the most admired airlines in the world and renewing our commitment to sustained profitability and superior re- turns to shareholders. Our strategy requires us to identify value propositions that are attractive to our clients, to find efficiencies in our daily operations, and to transform ourselves into a stronger and more risk-resilient company. A tenet of our strategic plan is the continuing adoption of a new travel model for domestic and international services to address the changing dynamics of customers and the industry, and to increase our competitiveness. The new travel model is based on passenger segmentation and fare unbundling, allowing air travel to be accessible to a wider audience and, with a special focus on those who wish to fly more frequently and those seeking a premium service. This model requires continued cost reduction efforts and increasing revenues from ancillary activities. In connection with these efforts, the group continues to implement a series of initiatives to reduce cost per ASK in all its operations as well as developing new ancillary revenue initiatives. Difficulties in implementing our strategy may adversely affect the group’s business, results of operation and the market value of our ADSs and common shares. ANNUAL REPORT 2023 11 —Annexes —Our business LATAM may experience difficulty finding, training and retain- ing 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, especial- ly 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 in- crease, our training costs will be significantly higher. LATAM 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 abil- ity 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 culture, our busi- ness and results of operations could be materially adversely affected. tional qualified senior management and other key personnel as needed in the future. Our business may experience adverse consequences if we are unable to reach satisfactory collective bargaining agreements with unionized employees. Collective action by employees could cause operating disruptions and adversely impact our business. As of December 31, 2023, approximately 45% 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 agree- ments 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, me- chanics 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. 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 culture, our performance could be materially adversely impacted. Furthermore, we may be unable to attract and retain addi- A strike, work interruption or stoppage or any prolonged dis- pute 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. On October 6, 2023, the unionized air traffic controllers affiliated with the Chilean College of Air Traffic Controllers (Colegio de Controladores de Tránsito Aéreo, ATC) held a partial nationwide strike to demand several concessions from national authorities. The strike lasted 2 days and affected only domestic flights at Arturo Merino Benitez Airport in Chile. On October 3, 2023 airport employees at Governador André Franco Montoro International Airport, in Guarulhos, Brazil, protested against the ban on the use of cell phones in loading and unloading areas during working hours. This event caused delays in LATAM Airlines Brazil’s domestic flights which also impacted on the group’s international operations. However, this event lasted 2 days, after which we took mitigation actions (such as changes of date, flight, rerouting and destinations) to regularize our operations. Although LATAM has established protocols to contain these type of situations, there is no guarantee that we will be able to reach a mutually beneficial agreement in the event of any future disagreements with our employees and unions. We rely on maintaining a high aircraft utilization rate to in- crease 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. 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 main- tenance 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 37.2% of our total costs of sales in 2023. 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 circum- stances such as the political instability in major oil-exporting countries. Any future fuel supply shortage (for example, as a result of production curtailments by the Organization of the Petroleum Exporting Countries, or “OPEC”), a disruption of oil imports, supply disruptions resulting from severe weather or natural disasters, labor actions such as the 2018 trucking strike in Brazil, the continued unrest in the Middle East, the conflict in Ukraine or other events could result in higher fuel prices or reductions in scheduled airline services. We cannot ensure that we would be able to offset any increases in the price of fuel. In addition, lower fuel prices may result in lower 144 ANNUAL REPORT 202311 —Annexes —Our business 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, in- cluding at Guarulhos International Airport in São Paulo, Jorge Chavez International Airport in Lima or Comodoro Arturo Merino Benitez International Airport in Santiago, could have a material adverse impact on our results of operations. Passenger tax- es 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 cat- egories, such as exports of fish, shell fish and fruit from Chile, asparagus from Peru and fresh flowers from Ecuador and Co- lombia. 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 vol- umes could be impacted by the appreciation or depreciation of local currencies. Increases in insurance costs and/or significant reductions in coverage could harm our financial condition and results of operations. An accumulation of ticket refunds could have an adverse ef- fect 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 cus- tomer 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, including if LATAM does not maintain certain minimum levels of unrestricted cash, cash equivalents and short-term investments. 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 col- lateral with the credit card companies for advance ticket sales. If we are unable to incorporate leased aircraft 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. The leases typically run from 3 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 in the future to maintain our capacity and the number of aircraft in the fleet, our profitability could be adversely affected. Significant events affecting the aviation insurance industry (such as terrorist attacks, airline crashes or accidents and health epidemics and the related widespread government-im- posed 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 (14.9%% in 2023) 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 frequently uses social media platforms as marketing tools. These platforms provide LATAM, as well as individuals, with access to a broad audience of consumers and other in- terested persons. Negative commentary regarding LATAM or the products it sells may be posted on social media platforms and similar devices at any time and may be adverse to LAT- AM’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, its employees or third parties acting on LATAM’s behalf to abide by appli- cable laws and regulations in the use of these platforms and devices could adversely impact the LATAM’s business, financial condition, and results of operations or subject it to fines or other penalties. Safety & Operational Risks We depend on a limited number of suppliers for certain air- craft and engine parts. LATAM 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, air- craft 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 suppli- ers, or adverse perception by the public that would result in unscheduled maintenance requirements, in customer avoid- ance or in actions by the aviation authorities resulting in an inability to operate our aircraft. During the year 2023, LATAM Airlines Group’s main suppliers were aircraft manufacturers Airbus and Boeing. In addition to Airbus and Boeing, LATAM Airlines 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, 2023, LATAM Group had a total fleet of 256 Airbus and 77 Boeing aircraft (38 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 145 ANNUAL REPORT 202311 —Annexes —Our business 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 indus- try, along with the subsequent global supply chain challenges faced by manufacturers and distributors, resulted in a wide- spread 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. On July 25, 2023, Pratt & Whitney disclosed a powder metal contamination issue affecting PW1100 GTF engines, which power Airbus Neo Family aircraft. Pratt & Whitney also dis- closed that they had designed a plan to remove and inspect those engines. As of December 31, 2023, LATAM group reported 31 Airbus Neo family aircraft within its fleet (approximately 9% 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. While we do not yet know the full impact of these operational disruptions resulting from engine shortages from Pratt & Whitney, potential reduction of air traffic could have an adverse effect on our business, result of operations and financial condition. Our business could also be materially adversely affected if the passengers avoid flying on our air- craft 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. 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, in- cluding 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 au- thorities 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 fire- fighters 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. Prolonged technical and operational problems 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 fa- cilities 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 In- ternational Airport. Santiago’s International Airport opened its new Internation- al 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. Additionally, Terminal 1 is currently undergoing a remodeling plan for the national termi- nal, which is being carried out in two phases (east and west). During the initial phase, LATAM has effectively maintained and concentrated operations in the east sector, utilizing the existing facilities. However, in August 2024, the concessionaire will start with the second phase of the remodeling, and the entire operation of the national terminal will be shifted to the west sector, resulting in significant impact on LATAM’s use of the facilities. The completion of this phase and the entire re- modeling project is scheduled to be finalized by August 2025. Furthermore, due to the previous airport concessions provid- ed by the Chilean government in 2019, there are two airports currently under construction in Chile: Iquique’s Diego Aracena International Airport and Arica’s Chacalluta International Airport, which are both undergoing terminal and platform expansions. These works are expected to be completed by the first half 2024 and they imply a risk of adverse effects to the airports’ operations. In addition, there are three other new concessions in Chile planning to start terminal construction work during 2024 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 has a limited growth capacity on the air side (including the runway and apron, as well as parking spaces), and faces challenges relating to the interior infrastructure of the airport, which is overly crowded. The airport concessionaire is currently in the process of building a second runway and a new terminal to be completed at the end of 2024. Any delay or limitation due to ongoing works could negatively affect our operations, limit our ability to grow and affect our competitiveness in the country and region. 146 ANNUAL REPORT 202311 —Annexes —Our business On the other hand, Jaén Airport and Jauja Airport in Perú have experienced significant runway infrastructure issues, resulting in severe operational challenges and flight cancellations. Urgent intervention was requested to the Peruvian government in 2023 to address these needs and rectify these problems, in order to ensure the efficient and safe functioning of air operations. 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. In 2022, under the state government airport concession pro- gram in Brazil (the “Concession Program”), 15 airports in Brazil were granted under new concessions, 8 of those airports are operated by LATAM, including the Congonhas Airport located at downtown São Paulo. The Concession Program allows for important investments in infrastructure, but it implies a high volume of work to be undertaken simultaneously. Over the next 5 years, 29 of the 55 Airports operated by LATAM in Bra- zil will undergo infrastructure improvement works, which may generate temporary restrictions and could affect our revenues. In 2023, after two years of delay due to the COVID-19 pan- demic, GRU Airport, the concessionaire of Guarulhos Airport, began the last phase of infrastructure expansion works, in- cluding the construction of a new fast exit on the main runway and a new taxiway. In addition, there are plans to build a new pier and expand of the apron, which are expected to be com- pleted by 2025. These developments will facilitate an increase in operations at the country's busiest airport. While LATAM 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 oper- ations. 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, weath- er 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 geo- political 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 Oc- tober 7, 2023, Israel declared war on Hamas and other terrorist organizations in Gaza. The military conflict is ongoing, and its length and outcome are highly unpredictable. The Israel 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 af- fect 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 canceled or significantly delayed, affecting and disrupting our operations and reduc- ing profitability. 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. Increases in the frequency, severity or duration of thunderstorms, hurricanes, typhoons, floods or other severe weather events, including from chang- es in the global climate and rising global temperatures, could result in increases in delays and cancellations, turbulence-re- lated injuries and fuel consumption to avoid such weather, any of which could result in loss of revenue and higher costs. For example, 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 im- pacted LATAM’s operations at the Arturo Merino Benitez In- ternational 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. In addition, fuel prices and supplies, which constitute a signifi- cant cost for us, may increase as a result of any future terrorist attacks, a general increase in hostilities or a reduction in out- put 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, while the international segment is expected to recover during the first quarter of 2024. LATAM corporate segment is close to reaching pre-pandemic RPK levels. Nev- ertheless, 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 cen- ters, 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 fail- ures, 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, web- site, customer, self-service applications (“apps”), maintenance systems, check-in kiosks, in-flight entertainment systems and data centers. Furthermore, in light of the rise of generative Artificial Intelli- gence technology (AI), 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 informa- tion of our customers and employees and information of our 147 ANNUAL REPORT 202311 —Annexes —Our business 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. Hardware or software we develop or acquire may contain defects that could unexpectedly compro- mise information security. The compromise of our technology systems resulting in the loss, disclosure, misappropriation of, or access to, customers’, employees’ or business partners’ in- formation 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 ad- versely impact the group’s business and results of operations and cause the market price of our common shares and ADSs to decrease. 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 prod- ucts, 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 govern- ment policies or regulations in Latin America, including such factors as exchange rates and exchange control policies, infla- tion 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. Passenger and cargo demand is heavily cyclical and highly dependent on global and local economic growth, economic ex- pectations and foreign exchange rate variations, among other things. The occurrence of similar events in the future could According to S&P, as of January 31, 2024 long term local cur- rency ratings of the countries where LATAM group operates in South America are as follow: Ecuador B-, Peru BBB+, Colombia BBB-, and Chile A+, all of them with a negative outlook, while Brazil is rated BB with a stable outlook. On the other hand, long term foreign currency ratings of these countries are: Ecuador B-, Peru BBB, Colombia BB+, and Chile A, all of them with a negative outlook, while Brazil is rated BB with a 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. Govern- mental 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. Our business, financial condition and results of operations may be adversely affected by changes in government policies or regulations, in- cluding 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 ex- ample, 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 gov- ernments 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 the business. LATAM 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 an- nounced 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 148 ANNUAL REPORT 202311 —Annexes —Our business 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 pen- sion reforms, among others. On October 25, 2020, Chile widely approved a referendum to redraft the constitution via constitu- tional 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 consti- tution 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” (Agree- ment 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 assur- ance 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. 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 ini- tiated 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 extraor- dinary 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 se- ries 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 Daniel Noboa declared a 60-day state of emergency in an attempt to control gang violence, with the support of the army. 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 ad- ministration 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). However, we cannot predict if and to what degree such policies will be implemented, nor if our operations or the legal framework under which we operate could be affected. reservations booked by customers and/or travel agencies via third-party GDSs (Global Distribution Systems) may be ad- versely 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. Although conditions throughout Latin America vary from coun- try 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 finan- cial 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. As of May 1, 2023, LATAM has launched a new distribution channel called “New Distribution Capability” (NDC) by LATAM, 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.. 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, opera- tion 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 main- tenance and repairs, catering, ground services, and provision of various utilities and performance of aircraft fueling oper- ations, 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 The failure of any of our third-party service providers to ade- quately 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 oper- ating 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 fluctu- ations. 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 curren- cies of these various countries. Changes in the exchange rate 149 ANNUAL REPORT 202311 —Annexes —Our business 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. Quan- titative 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 applica- ble regulations, or the consequences of noncompliance, could adversely affect our results, our business or our reputation. LATAM’s operations are affected by environmental regulations at local, national and international levels. These regulations cover, among other things, emissions to the atmosphere, dis- posal 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 regula- tions 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 in- ternational 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, report- ing 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 sustainabil- ity 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. 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 max- imum 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 emis- sions 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 im- pose 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 opportu- nity to work hand in hand with the relevant governments to implement public policies allowing for progress in the produc- tion 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 (desti- nations, 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. scope of our operations and our growth plans. The possible failure of aviation authorities to maintain the required govern- mental authorizations, or our failure to comply with applicable regulations, may adversely affect our business and results of operations. Our business, financial condition, results of operations and the price of common shares and ADSs 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. 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 gov- ernment 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. 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 (“pas- senger revenue management”) and adjust prices to reflect cost pressures. High levels of government regulation may limit the 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 busi- 150 ANNUAL REPORT 202311 —Annexes —Our business ness 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 assur- ance 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. Cer- tain 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, finan- cial 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 au- thorizations 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 and results of operations and financial condition. policies and procedures will be sufficient to prevent or detect all inappropriate practices, fraud or violations of law by af- filiates, 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 administra- tive 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 po- tential 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 Pro- ceedings” 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. We are subject to anti-corruption, anti-bribery, anti-money laundering, antitrust and other international laws and regu- lations 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, indi- viduals and entities. There can be no assurance that internal Globally, there have been large advances in processes of digi- tization 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 begin- ning 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 sys- tems 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. 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 and diversity, equity and inclusion goals. Our reputation and brand could also be adversely impacted by, among other things, failure to make progress toward and achieve our environmental sustainability and diversity, equity and inclusion 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 have established ambitious goals to reduce our carbon emissions, with the long-term goal to be net-zero carbon emissions by 2050. Achieving these ambitious goals will require significant capital investment from manufacturers and other stakehold- ers, as we are unable to achieve these 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 tech- nologies 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 af- fected if we are unable to service our debt or meet our future financing requirements. We have a high degree of debt and payment obligations un- der 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 equip- ment 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 prop- erty 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 mar- kets 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 151 ANNUAL REPORT 202311 —Annexes —Our business 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. On July 27, 2017, the head of the United Kingdom Financial Conduct Authority (“FCA”) (the authority that regulated LI- BOR) announced that it intended to stop compelling banks to submit rates for the calculation of LIBOR after 2021. On March 5, 2021 the FCA announced in a public statement that LIBOR for certain tenors would cease to be published on June 30, 2023. The Federal Reserve Board and the Federal Reserve Bank of New York convened the Alternative Reference Rates Committee ("ARRC"), a group of private-market participants, to help ensure a successful transition from U.S. dollar LIBOR to a more robust reference rate, its recommended alternative, the Secured Overnight Financing Rate ("SOFR"). Although the adoption of SOFR was voluntary, the impending discontin- uation of LIBOR made it essential that market participants considered moving to alternative rates such as SOFR and that they have appropriate fallback language in existing contracts referencing LIBOR. 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 SOFR as an alternative rate as con- vened by the 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, 2023, our variable interest rate debt amounted to US$2,027 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 oper- ations. 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. Quan- titative 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 con- duct 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 five-year term loan facility (the “Term Loan B Facility”) and the indentures governing our 2027 Notes and 2029 Notes, contain an asset coverage ratio and certain limitations to the incurrence of ad- ditional 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 agree- ments 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 custom- ary 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 ADRs holders. Under the terms of the deposit agreement governing the ADSs, if holders of ADSs do not provide JP Morgan Chase Bank, N.A., in its capacity as depositary for the ADSs, with timely instruc- tions on the voting of the common shares underlying their ADRs, the depositary will be deemed to have been instruct- ed 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 discretion- ary voting right may have interests that are aligned with our major shareholders, which may differ from those of our ADSs holders. Historically, our board of directors has designated its chairman to exercise this right, which is however no guarantee that it will do so in the future. The members of the board of directors elected by the shareholders in 2022 designated Ig- nacio Cueto, to serve in this role. For more information about LATAM beneficial ownership, see “Item 7. Major Shareholders and Related Party Transactions—Major Shareholders. Holders of ADRs may be adversely affected by the substantial dilution of the shares represented by ADRs. On June 18, 2022, the United States Bankruptcy Court for the Southern District of New York entered an order confirming the joint plan of reorganization (as amended, restated, modified, revised or supplemented from time to time, the “Plan”) filed by the Reorganized Debtors and dated as of May 25, 2022 [ECF No. 5753]. Pursuant to the Plan, on September 13, 2022, the Reorganized Debtors commenced the preemptive rights offer- ings for the New Convertible Notes Class A, New Convertible Notes Class B, New Convertible Notes Class C (collectively, “New Convertible Notes”) and ERO New Common Stock (each as defined in the Plan), which offerings concluded on October 12, 2022. On November 3, 2022, the Plan became effective pursuant to its terms and we emerged from bankruptcy. In connection with our emergence and the conversion of the New Convertible Notes into shares of the Company, the equity interests of existing shareholders were substantially diluted. The shares represented by ADRs currently amount to a small portion of our capital. The market prices of the shares repre- sented by ADRs may be adversely affected by such dilution and may experience significant fluctuation and volatility. Trading of our ADSs and common shares in the securities markets is limited and could experience further illiquidity and price volatility. As a result of our Chapter 11 proceedings, on June 10, 2020, the NYSE notified the SEC of its intention to remove the ADSs from listing and registration on the NYSE, effective at the opening of business on June 22, 2020. As of the date of this annual report, the ADSs are traded in the over-the-counter market, which is a less liquid market, and our ADR program, with JP Morgan Chase Bank, N.A. as depositary, is not open for issuances. There is no defined timeline for re-opening the ADR program or for returning to the U.S. public markets. In addition, there can be no assurance that the ADSs will continue to trade in the over-the-counter market or that any public market for the ADSs will exist in the future, whether broker-dealers will continue to provide public quotes of the ADSs, whether the trading volume of the ADSs will be sufficient to provide for an efficient trading market, whether quotes for the ADSs may be blocked in the future or that we will be able to relist the ADSs on a securities exchange. Our common shares are listed on the Santiago Stock Exchange. 152 ANNUAL REPORT 202311 —Annexes —Our business Chilean securities markets are substantially smaller, less liquid and more volatile than major securities markets in the United States. In addition, Chilean securities markets may be materially affected by developments in other emerging markets, partic- ularly other countries in Latin America. Accordingly, although holders are entitled to withdraw the common shares under- lying the ADSs from the depositary at any time, the ability to sell the common shares underlying ADSs in the amount and at the price and time of choice may be substantially limited. This limited trading market may also increase the price vola- tility of the ADSs or the common shares underlying the ADSs, which could also result in price disparity between the trading prices of the two. Holders of ADRs may be adversely affected by currency de- valuations 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 resi- dents 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 still have to provide the Central Bank with information related to equity investments and must conduct such operations within the formal exchange market. Further- more, any changes in withholding taxes could negatively affect non-Chilean residents that invest in our shares. We cannot assure you that additional Chilean restrictions ap- plicable to the holders of ADRs, 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. As described further in “Item 10. Additional Information—Pre- emptive Rights and Increases in Share Capital,” 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 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. 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. See “Item 10. Additional Information—Taxation-Chil- ean Tax—Capital Gains.” As described further in this annual report, 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. See “Item 10. Additional Information—Memorandum and Articles of Asso- ciation—Preemptive Rights and Increases in Share Capital,” 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. Pursuant to the registration rights agreement entered into on November 10, 2022 with certain of our creditors, which the group refers to as the “Creditor Backstop Agreement” and the “Backstop Creditors”, respectively (the “Registration Rights Agreement”), we have reached an agreement to amend the terms of the deposit agreement governing our ADSs, to provide for (a) full flexibility (subject to applicable fees and procedures contained in the deposit agreement) to deposit and withdraw, at the election of the respective holders of ADS, any ordinary shares from time to time held by the backstop parties or their transferees into or out of the ADS program; (b) participation in dividends and distributions subject to the procedures of the depositary as set forth in the deposit agreement and subject to compliance with applicable law (including, without limita- tion, Chilean law); (c) participation in voting at the instruction of the respective holders of ADS, subject to the procedures of the depositary as set forth in the deposit agreement and subject to compliance with applicable law (including, without limitation, Chilean law); and (d) participation in preemptive rights offerings in the form of additional ADS subject to compliance with applicable law (including, without limitation, Chilean law) and the procedures of the Depositary set forth in the deposit agreement; provided that such offerings are for ordinary shares constituting at least two percent (2%) of the outstanding ordinary shares (excluding any Ordinary Shares subject to lock-up). We are not required to disclose as much information to in- vestors as a U.S. issuer is required to disclose and, as a result, you may receive less information about us than you would 153 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 informa- tion 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 in- formation 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. ANNUAL REPORT 2023Commitment to sustainability climate change 11 —Annexes —Commitment to sustainability EMISSIONS REDUCTION TARGETS SASB: TR-AL-110A.2 GRI 305-5 SCOPE COVERED BY THE TARGET BASE YEAR TARGET YEAR BASE YEAR EMISSIONS COVERED (TCO2e) % OF TOTAL TARGET % REDUCTION COMPARED TO THE BASE YEAR BENCHMARK YEAR EMISSIONS Scope 1 (air emissions) 2019 2030 12,149,725 100% 50% The year 2019 was the last pre-pandemic year and is considered the aviation industry standard for comparisons, being widely accepted by international initiatives such as SBTi. GREENHOUSE GASES (tCO2e) NCG 461: 8.2 SUSTAINABILITY INDICATORS BY TYPE OF INDUSTRY GRI 305-1, 305-2, 305-3 & 305-4 SASB: TR-AL-110A.1. & TR-AL- 110A.2 Direct emissions (Scope 1) Indirect emissions (Scope 2) Other indirect emissions (Scope 3) Total UNIT 2020 2021 2022 2023 2023 VS.2022 tCO2e tCO2e tCO2e tCO2e 5,614,368 16,355 24,827 6,497,576 14,549 2,446 9,780,288 7,150 3,198,317 11,524,420 5,217 3,094,768 5,655,551 6,514,570 12,985,755 14.624.405 17.8% -27.0% -3.2% 12.7% -5.1% -0.7% -5.0% 80.76 80.55 76.10 101.8 76.67 97.02 96.65 76.16 92.19 Emissions intensity across the whole operation (kgCO2e/100RTK) Emissions intensity in air operation (kgCO2e/100RTK) Net emissions intensity across operations1 (kgCO2e/100RTK) 1 Net emissions across the whole operation: total emissions minus the offsets made. RTK: Acronym for "revenue ton-kilometers". SOURCE2 Jet fuel Jet fuel Gasoline Diesel Natural gas Liquefied petroleum gas (LPG) 2 Source: Huella Chile - IPCC 2006 UNIT kgCO2 /kg kgC02e/kg kgCO2 /TJ kgCO2 /TJ kgCO2 /TJ kgCO2 /TJ 76.87 76.31 75.04 EMISSION FACTOR 3.16 3.18 68,700 74,400 55,600 64,1002 154 ANNUAL REPORT 2023 11 —Annexes —Commitment to sustainability SCOPE OF THE INFORMATION Jet fuel- air operation Jet fuel - air operation Diesel Natural gas Gasoline LPG Fuel - mobile sources Diesel Gasoline LPG Refrigerating gases (various) Electricity Transportation using other airlines (jet fuel) UNIT % % % % % % % % % % % 2020 100 96 100 100 100 96 96 100 100 100 100 1 Natural gas is not among the energy sources for the year 2023. 2 Liquefied petroleum gas (LPG) for mobile sources is not among the energy sources for the year 2023. SIGNIFICANT ATMOSPHERIC EMISSIONS GRI 305-6 AND 305-7 Nitrogen oxides (NOx) Passenger operation intensity Cargo operation intensity Sulfur oxides (SOx) Passenger operation intensity Cargo operation intensity Gases affecting the Ozone layer1 UNIT tCO2e (g/RPK) (g/RPK) tCO2e (g/RPK) (g/RPK) tCO2e 2020 19,207 0.273 1.792 851 0.012 0.079 7,667 2021 100 96 100 100 100 96 96 100 100 100 100 2021 22,184 0.330 1.734 983 0.013 0.077 7,474 2022 100 96 100 100 100 96 96 100 100 100 100 2022 33,198 0.325 1.718 1,470 0.014 0.085 11,859 1 Including: Halon-1301; HCFC-141b; HCFC-22. For the year 2023, values from previous years are adjusted to show all data in tCO2e. RPK: Acronym for "revenue passenger-kilometers". RTK: Acronym for "revenue ton-kilometers". 2023 100 96 N/A1 100 100 98 100 N/A2 100 100 100 2023 2023 VS. 2022 39,092 0.266 2.005 1,731 0.012 0.089 9,712 17.8% -18.2% 17.0% 17.8% -14.3% 4.7% -18.1% 155 ANNUAL REPORT 2023 11 —Annexes —Employees Employees Better, simpler and more transparent LATAM GROUP – EMPLOYEE PROFILE 2023 NCG 461: 5.1.1 NUMBER OF INDIVIDUALS BY SEX and 5.1.2 NUMBER OF INDIVIDUALS BY NATIONALITY GRI 2-7 AND 2-8 ; 405-1 BRAZIL CHILE COLOMBIA ECUADOR UNITED STATES PERU OTHERS LATAM GROUP Senior management Management Leadership Operators Sales force Administrative Other professionals Other technicians M 14 89 482 W 2 55 237 7,208 2,757 192 160 377 3,453 2,890 69 181 522 M 37 250 326 1,524 77 192 977 W 4 135 190 872 286 243 569 1,453 1,588 M 1 16 54 579 5 26 37 521 W - 8 25 441 13 41 27 488 M - 4 24 91 2 8 4 167 W 1 5 8 32 9 11 9 122 M 4 22 51 781 2 1 33 2 W 1 13 28 241 1 9 22 - M 2 14 53 570 12 40 28 1,028 W - 7 36 485 33 37 26 977 M 1 21 40 249 13 35 16 30 W 2 8 32 236 33 45 14 44 M 59 416 1,030 W 10 231 556 11,002 5,064 567 546 1,617 1,044 6,654 6,109 180 483 Total 12,018 6,670 4,836 3,887 1,239 1,043 300 197 896 315 1,747 1,601 405 414 21,441 14,127 Note: In addition to the 35,568 employees, LATAM's workforce is comprised by transitory workers, hired through outsourcing companies for a maximum of 6 months to fill temporary vacancies due to employee leave or the expiration of external contracts. * LATAM has no professionals in the Auxiliary category. 156 ANNUAL REPORT 2023 11 —Annexes —Employees OTHERS (IN DETAIL) NCG 461: 5.1.1 NCG 461: 5.1.1 NUMBER OF INDIVIDUALS BY SEX and 5.1.2 NUMBER OF INDIVIDUALS BY NATIONALITY GRI 2-7 AND 2-8 ; 405-1 GERMANY ARGENTINA AUSTRALIA BOLIVIA COSTA RICA CUBA SPAIN FRANCE ITALY MEXICO ZEALAND NETHERLANDS PARAGUAY PORTUGAL UK NEW THE SOUTH AFRICA URUGUAY VENEZUELA Senior management Management Leadership Operators Sales force Administrative Other professionals Other technicians M W - - - 1 - 2 9 8 1 1 - - 1 - - - M W - - 2 4 10 8 84 72 4 1 9 11 3 1 - - M W - - - 1 1 - 3 2 1 - 1 - 1 - - - M W - - - - 1 - 14 18 - - - - - 1 - - M W - - - - - 1 1 - - - - - - - - - M W - - - - - - 2 3 - - - - - - - - M W 2 1 5 10 10 11 64 60 16 3 8 2 8 11 - - M W - - - - 1 - 1 6 3 - - - - - - - M W - - - 1 - - 3 1 - 1 - - - - - - M W M W - - - - - 5 3 34 - 4 - 15 - 1 - - - - 3 1 - 2 - - - 1 3 30 - 20 - - M - - 2 1 - 1 1 - W - - - 1 - 2 - - M - 3 5 21 1 4 - 30 W - - 3 7 6 5 1 44 M - - - 1 - - - - W - - - 4 1 - - - M - - 1 11 1 - - - W - - - 4 1 - - - M - - - - - - - - W - - - 1 - - - - M - 1 2 10 1 - 1 - W - - 2 5 - - - - M W - - - - 1 - - - - - - - - - - - Total 12 11 97 112 3 7 19 15 1 1 3 2 98 113 6 5 3 3 59 54 6 3 5 3 64 66 1 5 13 5 - 1 15 7 - 1 * LATAM has no professionals in the Auxiliary category. 157 ANNUAL REPORT 2023 11 —Annexes —Employees LATAM GROUP – EMPLOYEE PROFILE 2023 NCG 461: 5.1.3 NUMBER OF INDIVIDUALS BY AGE RANGE GRI 405-1 BY AGE RANGE UNDER 30 YEARS FROM 30 TO 40 YEARS OLD FROM 41 TO 50 YEARS OLD FROM 51 TO 60 YEARS OLD FROM 61 TO 70 YEARS OLD OVER 70 YEARS OLD Senior management Management Leadership Operators Sales force Administrative Other professionals Other technicians M - 7 75 2,900 20 108 446 1,077 W - 3 54 2,187 45 100 329 1,495 M 5 209 426 3,913 73 177 733 2,497 W - 136 310 1,877 213 230 466 2,542 M 25 134 346 2,712 67 132 294 1,903 W 8 69 139 753 204 145 202 1,761 M 25 57 156 1,199 17 46 100 991 W 2 20 48 224 91 65 42 294 M 4 9 25 260 3 20 34 180 Total 4,633 4,213 8,033 5,774 5,613 3,281 2,591 786 535 W - 3 5 22 14 5 5 17 71 M - - 2 18 - - 10 6 36 W - - - 1 - 1 - - 2 FUNCTIONAL CATEGORIES Senior management CEOs Vice-presidents Directors Management SeniorManagers Managers Assistant Managers Leadership Area managers Department heads Operators Cargo operations Maintenance Operations Airport Operations Operations control center Sales force Sales operations Customer care Administrative Support activities and general roles Other professionals Middle management in support activities Other technicians Command crew Cabin crew NCG 461: 5.1.4 NUMBER OF INDIVIDUALS BY SENIORITY NCG 461: 5.1.5 INDIVIDUALS WITH DISABILITIES GRI 405-1 BY SENIORITY UNDER 3 YEARS FROM 3 TO 6 YEARS MORE THAN 6 AND UP TO 9 YEARS MORE THAN 9 AND UP TO 12 YEARS OVER 12 YEARS OLD INDIVIDUALS WITH DISABILITIES MEN WOMEN Senior management Management Leadership Operators Sales force Administrative Other professionals Other technicians M 2 36 108 5,208 45 168 771 2,630 W 1 27 80 3,077 115 161 486 2,486 M 7 38 110 1,291 31 40 214 393 W 1 25 82 573 71 60 132 309 M 6 53 102 621 18 38 87 366 W 1 36 51 386 45 43 81 397 M 5 72 129 1,164 32 60 170 359 W 1 52 70 382 78 62 112 345 M 39 217 581 2,718 54 177 375 2,906 W 6 91 273 646 258 220 233 2,572 Senior management Management Leadership Operators Sales force Administrative Auxiliary Other professionals Other technicians Total 8,968 6,433 2,124 1,253 1,291 1,040 1,991 1,102 7,067 4,299 0 3 19 419 10 30 0 27 4 0 1 4 144 16 14 0 17 6 * LATAM has no professionals in the Auxiliary category 158 ANNUAL REPORT 2023 11 —Annexes —Employees CONTRACT TYPE1 GRI 2-7 EMPLOYEES Brazil Chile Colombia Ecuador United States Peru Others INDEFINITE TERM FIXED TERM M 12,018 4,353 950 300 895 1,383 399 W 6,670 3,410 648 197 313 1,180 400 M - 483 289 - 1 364 6 W - 477 395 - 2 421 14 EMPLOYEES NCG 461: 5.2 NCG 461: 5.2 LABOR FORMALITY 20,298 / 57.1% 12,818 / 36% 1,143 / 3.2% 1,309 / 3.7% 1 NB: There are no contracts per job or task. Others: Argentina, Australia, Bolivia, Costa Rica, Cuba, France, Germany, Italy, Mexico, Netherlands, New Zealand, Paraguay, Portugal, South Africa, Spain, United Kingdom, Uruguay and Venezuela. CONTRACT TYPE GRI 2-7 EMPLOYEES Brazil Chile Colombia Ecuador United States Peru Others ORDINARY WORK HOURS PART-TIME1 M 11,797 4,788 1,239 300 889 1,747 369 W 6,491 3,793 1,043 197 297 1,590 379 M 221 48 - - 7 - 36 W 179 94 - - 18 11 35 LATAM Group NCG 461: 5.3 WORK ADAPTABILIT 21,129 / 59.40% 13,790 / 38.77% 312 / 0.88% 337 / 0.95% Others: Argentina, Australia, Bolivia, Costa Rica, Cuba, France, Germany, Italy, Mexico, Netherlands, New Zealand, Paraguay, Portugal, South Africa, Spain, United Kingdom, Uruguay and Venezuela. In 2023, there were no individuals entering workday adaptability agreements for workers with family duties or other reasons. On the other hand, 5,149 individuals adopted telework, 2,977 of whom were men (8.37% of the total workforce) and 2,172 women (6.11% of the total workforce). 159 COLLECTIVE BARGAINING AGREEMENTS3 IN 2023 NCG 461: 8.2 SUSTAINABILITY INDICATORS SASB TR-AL- 310A.1 GRI 2-30 Employees covered by collective bargaining agreements Unionized employees 89% 45% 3 Based on the total workforce on December 31, 2023. Overall, the group affiliates apply their own policies to define working conditions and terms of employment for workers not covered by collective bargaining agreements. The exception is Chile where, since September 2016, in compliance with the provisions of the law, some basic and transversal benefits, such as the benefit of tickets, defined in a collective union agreement, are extended to new hires. NCG 461: 8.2 SUSTAINABILITY INDICATORS SASB TR-AL-310A.2 During 2023, there were no labor stoppages involving more than a thousand workers, nor idle days as a result of work stoppages. ANNUAL REPORT 2023 11 —Annexes —Employees LATAM GROUP - NEW HIRES AND WORKFORCE TURNOVER IN 2023 GRI 401-1 STAFF TURNOVER RATE BY COUNTRY 2023 LONG-TERM INCENTIVES FOR LATAM GROUP EMPLOYEES TOTAL NUMBER OF HIRES HIRING RATE LATAM Airlines Brazil LATAM Airlines Chile LATAM Airlines Colombia LATAM Airlines Ecuador United States Regional Office LATAM Airlines Peru Others2 Total 2,957 1,689 876 122 466 590 127 6,827 TOTAL NUMBER OF PEOPLE WHO LEFT LATAM GROUP1 TURNOVER RATE 2,024 700 311 30 384 326 79 5.69% 1.97% 0.87% 0.08% 1.08% 0.92% 0.22% 8.31% 4.75% 2.46% 0.34% 1.31% 1.66% 0.36% 19.19% 3,854 10.84% 1 Individuals who left the LATAM Group either voluntarily, through dismissal, retirement or death in service. 2 Considering LATAM group operations in other countries of the Americas, Europe and Oceania. INTERNAL HIRES 81% of open positions were filled by internal candidates in 2023. NEW HIRES BY GENDER IN 2023 GRI 401-1 COUNTRY Brazil Chile Colombia Ecuador Peru United States Others Total 160 WOMEN 37.0% 49.9% 54.0% 41.0% 53.6% 23.2% 46.5% 43.1% MEN 63.00% 50.10% 46.00% 59.00% 46.40% 76.80% 53.50% 56.90% COUNTRY Brazil Chile Colombia Ecuador Peru United States Others FY 2023 43.3% 24.7% 12.8% 1.8% 8.6% 6.8% 1.9% As a long-term incentive for the employees, during 2023, LATAM group had the "unit-based pay" program. This comprises units granted to each employee, which are paid over a period of up to 42 months, and are linked to: • The employee's permanence in LATAM group. • The share price compared to the value of the ERO. LATAM AIMS TO ACHIEVE A GENDER BALANCE OF AROUND 40/60 AT ALL FUNCTIONAL LEVELS BY 2030. • The occurrence of events related to the volume of transac- tions and liquidity of the stock. • Performance defined on the basis of fulfillment of certain company indicators. This program applies to executives who are not part of the Global Executive Meeting (GEM)—i.e., who are Senior Man- agers, Managers and Assistant Managers of different areas or business units in LATAM group. PAY GAP BY GENDER 2023 INDICATOR Pay gap by gender: average Pay gap by gender: median Bonus gap: average Bonus gap: median DIFFERENCE BETWEEN MALE AND FEMALE EMPLOYEES 94% 94% 95% 96% SHARE OF WOMEN Women in the whole workforce Women in all leadership positions (junior, middle and top) Women in all junior leadership positions Women in all top leadership positions Women in leadership positions in revenue-generating functions Women in STEM positions (**) 2023 39.7% 34.6% 35.6% 14.7% 37.8% 26.5% (*) Support positions such as human capital, legal, information technolo- gy, etc. are excluded. (**) STEM: Personnel with background and a position related to science, technology, engineering and mathematics. LABOR FORCE SHARE BY NATIONALITY 2023 NATIONALITY Brasil Chile Colombia Ecuador Estados Unidos Perú Otros SHARE OF THE WHOLE WORKFORCE SHARE IN LEADERSHIP POSITIONS 52.9% 22.3% 6.9% 1.6% 1.7% 9.6% 5.0% 40.4% 33.6% 6.6% 2.3% 2.8% 6.0% 8.3% ANNUAL REPORT 2023 11 —Annexes —Employees INDIVIDUALS WHO TOOK POSTNATAL LEAVE IN 2023 GRI 401-3 COUNTRY SENIOR MANAGEMENT MANAGEMENT LEADERSHIP SALES FORCE ADMINISTRATIVE OPERATORS OTHER PROFESSIONALS OTHER TECHNICIANS TOTAL Germany Argentina Bolivia Brazil Chile Colombia Cuba Ecuador Spain United States France Italy Mexico Oceanía (New Zeland and Australia) The Netherlands Paraguay Peru Portugal UK Uruguay Others (Costa Rica, Venezuela and South Africa) TOTAL M 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 W 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 M 0 0 0 1 11 0 0 0 1 0 0 1 0 0 0 0 1 0 0 0 0 15 W 0 0 0 3 19 0 0 0 1 1 0 0 0 0 0 0 1 0 0 0 0 25 M 0 0 0 11 6 1 0 1 0 1 0 0 0 0 0 0 1 0 0 0 0 21 W 0 2 0 18 9 0 0 0 0 0 0 0 0 0 0 0 3 0 0 0 0 32 M 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 3 0 0 0 0 4 W 0 0 0 4 8 2 0 1 0 1 0 0 0 0 0 0 6 0 0 0 0 M 0 0 0 35 2 0 0 2 0 0 0 0 0 0 0 0 0 0 0 0 0 W 1 0 0 116 5 6 0 2 0 2 0 0 0 0 0 0 0 0 0 0 0 M 0 0 1 78 37 7 0 3 0 0 0 0 0 0 0 1 7 0 0 0 0 W 0 0 0 18 52 0 0 0 2 0 0 0 0 0 0 0 2 0 0 0 0 M 1 0 0 37 19 0 0 0 1 0 0 0 0 0 0 0 0 0 0 0 0 W 0 0 0 37 23 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 M 0 0 0 61 4 11 0 1 0 0 0 0 0 0 0 1 25 0 0 0 0 W 0 0 0 72 88 11 0 1 0 0 0 0 0 0 0 3 23 0 0 0 0 M 1 0 1 223 79 19 0 7 2 2 0 1 0 0 0 2 37 0 0 0 0 W 1 2 0 268 204 19 0 4 3 4 0 0 0 0 0 3 35 0 0 0 0 22 39 132 134 74 58 60 103 198 374 543 Note: 100% of individuals who requested postnatal leave were granted access to this benefit. Note: LATAM has no professionals in the Auxiliary category 161 ANNUAL REPORT 2023 11 —Annexes —Employees AVERAGE NUMBER OF DAYS OF POSTNATAL LEAVE USED IN 2023 GRI 401-3 COUNTRY SENIOR MANAGEMENT MANAGEMENT LEADERSHIP SALES FORCE ADMINISTRATIVE OPERATORS OTHER PROFESSIONALS OTHER TECHNICIANS Germany Argentina Bolivia Brazil Chile Colombia Cuba Ecuador Spain United States France Italy Mexico Oceanía (New Zeland and Australia) The Netherlands Paraguay Peru Portugal UK Uruguay Others (Costa Rica, Venezuela and South Africa) M 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Note: LATAM has no professionals in the Auxiliary category. W 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 M 0 0 0 7 4 0 0 0 67 0 0 10 0 0 0 0 10 0 0 0 0 W 0 0 0 161 17 0 0 0 29 84 0 0 0 0 0 0 98 0 0 0 0 M 0 0 0 17 4 14 0 15 0 5 0 0 0 0 0 0 10 0 0 0 0 W 0 90 0 147 46 0 0 0 0 0 0 0 0 0 0 0 98 0 0 0 0 M 0 0 0 0 0 0 0 0 0 5 0 0 0 0 0 0 10 0 0 0 0 W 0 0 0 59 41 126 0 84 0 84 0 0 0 0 0 0 98 0 0 0 0 M 0 0 0 18 5 0 0 15 0 0 0 0 0 0 0 0 0 0 0 0 0 W 4 0 0 130 33 126 0 84 0 84 0 0 0 0 0 0 0 0 0 0 0 M 0 0 3 17 3 14 0 15 0 0 0 0 0 0 0 15 10 0 0 0 0 W 0 0 0 127 23 0 0 0 81 0 0 0 0 0 0 0 85 0 0 0 0 M 4 0 0 18 3 0 0 0 84 0 0 0 0 0 0 0 0 0 0 0 0 W 0 0 0 138 47 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 M 0 0 0 17 4 20 0 15 0 0 0 0 0 0 0 15 11 0 0 0 0 W 0 0 0 120 49 126 0 84 0 0 0 0 0 0 0 126 94 0 0 0 0 Particularly regarding post-natal leave available to male workers in Chile, 100% opted for the 5-day leave from among the options provided by Chilean Law. 162 ANNUAL REPORT 2023 11 —Annexes —Supply Chain Management ANNEXES Supply Chain Management - Corporate Sustainability Assessment (CSA) • KPIs for Supplier Screening: Supplier Screening Total number of significant suppliers in Tier-1 % of total spend on significant suppliers in Tier-1 Total number of significant suppliers in non Tier-1 • KPIs for Supplier Assessment and Development: Supplier assessment Total number of suppliers assessed via desk assessments or on-site assessments % of suppliers assessed with potential negative impacts supported in corrective action plan implementation 2023 270 100% 0 2023 5,557 1% 163 ANNUAL REPORT 202313 Financial reports In this chapter 165 294 Financial statements Sworn statement 259 295 Affiliates and subsidiaries 286 Financial analysis Company structure 13 —Financial reports —Financial statements Financial statements NCG 461: 11. FINANCIAL REPORTS LATAM AIRLINES GROUP S.A. AND SUBSIDIARIES CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2023 CONTENTS Consolidated Statements of Financial Position Consolidated Statements of Income by Function Consolidated Statements of Comprehensive Income Consolidated Statements of Changes in Equity Consolidated Statements of Cash Flows - Direct Method Notes to the Consolidated Financial Statements - CHILEAN PESO - CHILEAN UNIDAD DE FOMENTO - ARGENTINE PESO - UNITED STATES DOLLAR CLP UF ARS US$ THUS$ - MUS$ COP BRL/R$ - BRAZILIAN REAL THR$ - THOUSANDS OF BRAZILIAN REAL - MILLIONS OF UNITED STATES DOLLARS - COLOMBIAN PESO THOUSANDS OF UNITED STATES DOLLARS 165 ANNUAL REPORT 202313 —Financial reports —Financial statements REPORT OF INDEPENDENT AUDITORS (Free translation from the original in Spanish) Santiago, February 22, 2024 To the Board of Directors and Shareholders LATAM Airlines Group S.A. Opinion We have audited the consolidated financial statements of LATAM Airlines Group S.A. and subsidiaries, which comprise the consolidated statements of financial position as of December 31, 2023 and 2022 and the related consolidated statements of income by function, comprehensive income, changes in equity and cash flows direct method for the years then ended and the related notes to the consolidated financial statements. In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the financial position of LATAM Airlines Group S.A. and subsidiaries as of December 31, 2023 and 2022, the results of its operations and its cash flows for the years then ended in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board. Basis for opinion We conducted our audits in accordance with Generally Accepted Auditing Standards in Chile. Our responsibilities under those standards are described in the paragraphs under the section "Auditor's responsibilities for the audit of the consolidated financial statements” in this report. In accordance with relevant ethical requirements, for our audits of the consolidated financial statements, we are required to be independent of LATAM Airlines Group S.A. and subsidiaries and to comply with other ethical responsibilities in accordance with such requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Management’s responsibility for the consolidated financial statements Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board. This responsibility includes the design, implementation and maintenance of a relevant internal control for the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error. In preparing and presenting the consolidated financial statements, Management is required to evaluate whether there are facts or circumstances that, taken as a whole, raise substantial doubt about the ability of LATAM Airlines Group S.A. and subsidiaries to continue as a going concern for the foreseeable future. Santiago, February 22, 2024 LATAM Airlines Group S.A. 2 Auditor’s responsibility for the audit of the consolidated financial statements Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high, but not absolute, level of assurance and, therefore, does not guarantee that an audit performed in accordance with Generally Accepted Auditing Standards in Chile will always detect a material misstatement when it exists. The risk of not detecting a material misstatement due to fraud is greater than the risk of not detecting a material misstatement due to error, as fraud may involve collusion, forgery, intentional omissions, concealment, misrepresentations or disregard of controls by Management. A misstatement is considered material if, individually or in the aggregate, it would influence the judgment of a reasonable user based on these consolidated financial statements. As part of an audit conducted in accordance with Generally Accepted Auditing Standards in Chile, we: ● Exercise our professional judgment and maintain our professional skepticism throughout the audit. ● Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error; we design and perform audit procedures in response to those risks. Such procedures include examining evidence, on a test basis, regarding the amounts and disclosures in the consolidated financial statements. ● Obtain an understanding of internal control relevant to an audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of LATAM Airlines Group S.A. and subsidiaries internal control. Consequently, we do not express such an opinion. ● We assess the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by Management, as well as assessing the appropriateness of the overall presentation of the consolidated financial statements. Santiago, February 22, 2024 LATAM Airlines Group S.A. ● We conclude whether in our judgment there are facts or circumstances that, taken as a whole, cast 3 substantial doubt about the ability of LATAM Airlines Group S.A. and subsidiaries to continue as a going concern for the foreseeable future. We are required to communicate to those charged with governance, among other matters, the planned timing and scope of the audit and significant audit findings, including any significant deficiencies and material weaknesses in internal control that we identify during our audit. 166 Jonathan Yeomans Gibbons RUT: 13.473.972-K ANNUAL REPORT 2023 34 - Statement of cash flows ...................................................................................................................... 129 35 - The environment ................................................................................................................................ 134 36 - Events subsequent to the date of the financial statements .................................................................. 136 13 —Financial reports —Financial statements Contents of the Notes to the consolidated financial statements of LATAM Airlines Group S.A. and Subsidiaries. Notes Page 1 - General information.................................................................................................................................. 1 2 - Summary of material accounting policies ................................................................................................ 6 2.1. Basis of Preparation ........................................................................................................................... 6 2.2. Basis of Consolidation ...................................................................................................................... 10 2.3. Foreign currency transactions ........................................................................................................... 10 2.4. Property, plant and equipment .......................................................................................................... 12 2.5. Intangible assets other than goodwill ................................................................................................12 2.6. Borrowing costs ................................................................................................................................ 12 2.7. Losses for impairment of non-financial assets ................................................................................. 13 2.8. Financial assets ................................................................................................................................. 13 2.9. Derivative financial instruments and embedded derivatives ............................................................ 13 2.10. Inventories....................................................................................................................................... 15 2.11. Trade and other accounts receivable .............................................................................................. 15 2.12. Cash and cash equivalents .............................................................................................................. 15 2.13. Capital ............................................................................................................................................. 15 2.14. Trade and other accounts payables ................................................................................................. 15 2.15. Interest-bearing loans ...................................................................................................................... 15 2.16. Current and deferred taxes .............................................................................................................. 16 2.17. Employee benefits .......................................................................................................................... 16 2.18. Provisions ....................................................................................................................................... 17 2.19. Revenue from contracts with customers ......................................................................................... 17 2.20. Leases ............................................................................................................................................. 18 2.21. Non-current assets (or disposal groups) classified as held for sale................................................. 19 2.22. Maintenance .................................................................................................................................... 19 2.23. Environmental costs ........................................................................................................................ 20 3 - Financial risk management ..................................................................................................................... 20 3.1. Financial risk factors ........................................................................................................................ 20 3.2. Capital risk management .................................................................................................................. 33 3.3. Estimates of fair value ...................................................................................................................... 33 4 - Accounting estimates and judgments...................................................................................................... 35 5 - Segment information .............................................................................................................................. 38 6 - Cash and cash equivalents ...................................................................................................................... 39 7 - Financial instruments ............................................................................................................................. 40 8 - Trade and other accounts receivable current, and non-current accounts receivable .............................. 41 9 - Accounts receivable from/payable to related entities ............................................................................ 43 10 - Inventories ............................................................................................................................................ 44 11 - Other financial assets ........................................................................................................................... 45 12 - Other non-financial assets .................................................................................................................... 46 13 - Non-current assets and disposal group classified as held for sale......................................................... 47 14 - Investments in subsidiaries .................................................................................................................. 48 15 - Intangible assets other than goodwill ................................................................................................... 51 16 - Property, plant and equipment .............................................................................................................. 53 17 - Current and deferred tax ....................................................................................................................... 58 18 - Other financial liabilities ...................................................................................................................... 63 19 - Trade and other accounts payables ....................................................................................................... 71 20 - Other provisions.................................................................................................................................... 72 21 - Other non financial liabilities ............................................................................................................... 73 22 - Employee benefits ................................................................................................................................ 74 23 - Accounts payable, non-current ............................................................................................................ 77 24 - Equity ................................................................................................................................................... 78 25 - Revenue ................................................................................................................................................ 86 26 - Costs and expenses by nature ............................................................................................................... 86 27 - Other income, by function ................................................................................................................... 89 28 - Foreign currency and exchange rate differences ................................................................................. 89 29 – Earning (Loss) per share...................................................................................................................... 96 30 - Contingencies ..................................................................................................................................... 97 31 - Commitments ..................................................................................................................................... 122 32 - Transactions with related parties ........................................................................................................ 125 33 - Share based payments ........................................................................................................................ 127 167 ANNUAL REPORT 202313 —Financial reports —Financial statements LATAM AIRLINES GROUP S.A. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF FINANCIAL POSITION LATAM AIRLINES GROUP S.A. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF FINANCIAL POSITION ASSETS Current Assets Cash and cash equivalents Other financial assets Other non-financial assets Trade and other accounts receivable Accounts receivable from related entities Inventories Current tax assets Note 6 - 7 7 - 11 12 7 - 8 7 - 9 10 17 Total current assets other than non-current assets (or disposal groups) classified as held for sale Non-current assets (or disposal groups) classified as held for sale 13 As of December 31, 2023 ThUS$ As of December 31, 2022 ThUS$ 1,714,761 174,819 185,264 1,385,910 28 592,880 47,030 4,100,692 102,670 1,216,675 503,515 191,364 1,008,109 19,523 477,789 33,033 3,450,008 86,416 Total current assets 4,203,362 3,536,424 Non-current assets Other financial assets Other non-financial assets Accounts receivable Intangible assets other than goodwill Property, plant and equipment Deferred tax assets Total non-current assets Total assets 7 - 11 12 7 - 8 15 16 17 34,485 168,621 12,949 1,151,986 9,091,130 4,782 10,463,953 14,667,315 15,517 148,378 12,743 1,080,386 8,411,661 5,915 9,674,600 13,211,024 The accompanying Notes 1 to 36 form an integral part of these consolidated financial statements. LIABILITIES AND EQUITY LIABILITIES Current liabilities Other financial liabilities Trade and other accounts payables Accounts payable to related entities Other provisions Current tax liabilities Other non-financial liabilities Total current liabilities Non-current liabilities Other financial liabilities Accounts payable Other provisions Deferred tax liabilities Employee benefits Other non-financial liabilities Total non-current liabilities Total liabilities EQUITY Share capital Retained earnings/(losses) Treasury Shares Other equity Other reserves Parent’s ownership interest Non-controlling interest Total equity Total liabilities and equity Note 7 - 18 7 - 19 7 - 9 20 17 21 7 - 18 7 - 23 20 17 22 21 24 24 24 24 24 14 As of December 31, 2023 ThUS$ As of December 31, 2022 ThUS$ 596,063 1,765,279 7,444 15,072 2,371 3,301,906 5,688,135 6,341,669 418,587 926,736 382,359 122,618 348,936 8,540,905 14,229,040 5,003,534 464,411 — 39 (5,017,682) 450,302 (12,027) 438,275 14,667,315 802,841 1,627,992 12 14,573 1,026 2,642,251 5,088,695 5,979,039 326,284 927,964 344,625 93,488 420,208 8,091,608 13,180,303 13,298,486 (7,501,896) (178) 39 (5,754,173) 42,278 (11,557) 30,721 13,211,024 The accompanying Notes 1 to 36 form an integral part of these consolidated financial statements. 168 ANNUAL REPORT 2023 13 —Financial reports —Financial statements LATAM AIRLINES GROUP S.A. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME BY FUNCTION LATAM AIRLINES GROUP S.A. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME Revenue Cost of sales Gross margin Other income Distribution costs Administrative expenses Other expenses Gains/(losses) from restructuring activities Other gains/(losses) Income (loss) from operation activities Financial income Financial costs Foreign exchange gains/(losses) Result of indexation units Income (loss) before taxes Income tax (expense)/benefits NET INCOME (LOSS) FOR THE YEAR Income (loss) attributable to owners of the parent Income (loss) attributable to non-controlling interest Net Income (loss) for the year EARNING (LOSS) PER SHARE Basic earnings (loss) per share (US$) Diluted earnings (loss) per share (US$) For the year ended December 31, Note 2023 ThUS$ 2022 ThUS$ 5 - 25 26 11,640,541 (8,816,590) 2,823,951 9,362,521 (8,103,483) 1,259,038 27 26 26 26 26 26 26 26 17 14 29 29 148,641 (587,272) (683,311) (532,801) — (91,043) 1,078,165 125,356 (698,231) 85,891 5,311 596,492 (14,942) 154,286 (426,599) (576,429) (531,575) 1,679,934 (347,077) 1,211,578 1,052,295 (942,403) 25,993 (1,412) 1,346,051 (8,914) 581,550 1,337,137 581,831 (281) 1,339,210 (2,073) 581,550 1,337,137 0.000963 0.000963 0.013861 0.013592 The accompanying Notes 1 to 36 form an integral part of these consolidated financial statements. Note For the year ended at December 31, 2023 ThUS$ 2022 ThUS$ NET INCOME/(LOSS) Components of other comprehensive income (loss) that will not be reclassified to income 581,550 1,337,137 before taxes Other comprehensive income (loss), before taxes, gains (losses) by new measurements on defined benefit plans Total other comprehensive (loss) that will not be reclassified to income before taxes Components of other comprehensive income that will be reclassified to income before taxes Currency translation differences Gains (losses) on currency translation, before tax Other comprehensive loss, before taxes, currency translation differences Cash flow hedges Gains (losses) on cash flow hedges before taxes Reclassification adjustment on cash flow hedges before tax 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 Other comprehensive income (losses), before taxes, cash flow hedges Change in value of time value of options Gains/(Losses) on change in value of time value of options before tax Reclassification adjustments on change in value of time value of options before tax Other comprehensive income, before taxes, changes in the time value of the options Total other comprehensive income that will be reclassified to income before taxes Other components of other comprehensive income (loss), before taxes Income tax relating to other comprehensive income that will not be reclassified to income Income tax relating to new measurements on defined benefit plans Income tax relating to other comprehensive income that will not be reclassified to income Income tax relating to other comprehensive income (loss) that will be reclassified to income 24 24 24 24 24 24 17 (21,198) (21,198) (9,935) (9,935) (12,423) (12,423) (41,144) (26,568) (11,112) (78,824) 25,751 28,818 54,569 (36,678) (57,876) 751 751 (32,563) (32,563) 52,017 31,293 (8,143) 75,167 (24,005) 19,946 (4,059) 38,545 28,610 567 567 Income tax related to cash flow hedges in other comprehensive income (loss) Income taxes related to components of other comprehensive loss will be reclassified to 17 3,604 (235) income Total Other comprehensive income (loss) Total comprehensive income (loss) Comprehensive income (loss) attributable to owners of the parent Comprehensive income (loss) attributable to non-controlling interests TOTAL COMPREHENSIVE INCOME (LOSS) 3,604 (53,521) 528,029 (235) 28,942 1,366,079 515,687 12,342 528,029 1,367,315 (1,236) 1,366,079 The accompanying Notes 1 to 36 form an integral part of these consolidated financial statements. 169 ANNUAL REPORT 2023 13 —Financial reports —Financial statements LATAM AIRLINES GROUP S.A. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY Attributable to owners of the parent Change in other reserves Gains (Losses) from changes in the time value of the options Actuarial gains or losses on defined benefit plans reserve Shares based payments reserve Currency translation reserve Cash flow hedging reserve ThUS$ ThUS$ ThUS$ ThUS$ ThUS$ Note Share capital ThUS$ Other equity ThUS$ Treasury shares ThUS$ Other sundry reserve ThUS$ Total other reserve ThUS$ Retained earnings/ (losses) ThUS$ Parent’s ownership interest Non- controlling interest ThUS$ ThUS$ Total equity ThUS$ 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 24 25 24 — — — — — — — — — 17,401 24-34 (8,294,952) (17,401) (8,294,952) 5,003,534 — 39 — — — — — 178 178 — — — — (25,051) (75,220) 54,569 (20,442) (25,051) (75,220) 54,569 (20,442) — — — — — — — — — — — — — — — — — — — — — — — — — 581,831 581,831 (281) 581,550 (66,144) — (66,144) 12,623 (53,521) (66,144) 581,831 515,687 12,342 528,029 — (174,549) (174,549) — (174,549) — (14,401) (14,401) — 3,000 — 3,000 — — 817,036 817,036 7,559,025 63,886 (12,812) 51,074 802,635 802,635 7,384,476 (107,663) (12,812) (120,475) — (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 Equity as of January 1, 2023 Total increase (decrease) in equity Net income/(loss) for the period Other comprehensive income Total comprehensive income Transactions with shareholders Dividends Increase for other contributions from the owners Increase (decrease) through transfers and other changes, equity Total transactions with shareholders Closing balance as of December 31, 2023 The accompanying Notes 1 to 36 form an integral part of these consolidated financial statements. 170 ANNUAL REPORT 2023 13 —Financial reports —Financial statements LATAM AIRLINES GROUP S.A. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY Attributable to owners of the parent Change in other reserves Gains (Losses) from changes in the time value of the options Actuarial gains or losses on defined benefit plans reserve Shares based payments reserve Treasury shares Currency translation reserve Cash flow hedging reserve ThUS$ ThUS$ ThUS$ ThUS$ ThUS$ ThUS$ Note Share capital ThUS$ Other equity ThUS$ Other sundry reserve ThUS$ Total other reserve ThUS$ Retained earnings/ (losses) Parent’s ownership interest Non- controlling interest ThUS$ ThUS$ ThUS$ Total equity ThUS$ 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) Equity as of January 1, 2022 Total increase (decrease) in equity Net income/(loss) for the period 24 Other comprehensive income Total comprehensive income Transactions with shareholders Equity issue Increase for other contributions from the owners Increase (decrease) through transfers and other changes, equity Total transactions with shareholders Closing balance as of December 31, 2022 — — — — — — 24 -33 24 24 -33 800,000 — — 9,250,229 9,352,221 (9,250,190) 10,152,221 13,298,486 39 39 — — — — — — — — — — — (33,401) 74,932 (4,059) (9,367) (33,401) 74,932 (4,059) (9,367) — — — — — — — 1,339,210 1,339,210 (2,073) 1,337,137 28,105 — 28,105 837 28,942 28,105 1,339,210 1,367,315 (1,236) 1,366,079 — — — — — — — — — — — — — — — — — — — — 800,000 — 800,000 — (4,340,749) (4,340,749) — 4,909,480 — 4,909,480 — (80,000) (80,000) — 22,031 35 22,066 — (4,420,749) (4,420,749) — 5,731,511 35 5,731,546 (178) (3,805,560) 36,542 (21,622) (28,117) 37,235 (1,972,651) (5,754,173) (7,501,896) 42,278 (11,557) 30,721 The accompanying Notes 1 to 36 form an integral part of these consolidated financial statements. 171 ANNUAL REPORT 2023 13 —Financial reports —Financial statements LATAM AIRLINES GROUP S.A. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS - DIRECT METHOD Note For the year ended December 31, 2023 ThUS$ 2022 ThUS$ Cash flows from operating activities Cash collection from operating activities Proceeds from sales of goods and services Other cash receipts from operating activities Payments for operating activities Payments to suppliers for the supply goods and services Payments to and on behalf of employees Other payments for operating activities Income taxes (paid) Other cash inflows (outflows) Net cash (outflow) inflow from operating activities Other cash receipts from sales of equity or debt instruments of other entities Other payments to acquire equity or debt instruments of other entities Amounts raised from sale of property, plant and equipment Purchases of property, plant and equipment Purchases of intangible assets Interest received Other cash inflows (outflows) Net cash (outflow) inflow from investing activities Cash flows inflow (out flow) from investing activities Proceeds from the issuance of shares Amounts from the issuance of other equity instruments Payments for changes in ownership interests in subsidiaries that do not result in loss of control Amounts raised from long-term loans Amounts raised from short-term loans Loans from related entities Loans repayments Payments of lease liabilities Payments of loans to related entities Interest paid Other cash (outflows) inflows Net cash inflow (outflow) from financing activities Net (decrease) increase in cash and cash equivalents before effect of exchanges rate change Effects of variation in the exchange rate on cash and cash equivalents Net (decrease) increase in cash and cash equivalents CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR 34 34 34 34 34 24 34 34 32 34 34 34 34 6 6 13,397,385 169,692 10,549,542 117,118 (9,689,508) (9,113,130) (1,304,696) (1,039,336) (272,823) (14,314) (130,260) (270,580) (18,379) (20,346) 2,263,568 — — 46,524 (795,787) (68,052) 98,552 59,258 96,797 417 (331) 56,377 (780,538) (50,116) 18,934 6,300 (659,505) (748,957) — — (23) — — — 549,038 3,202,790 — 2,361,875 4,856,025 770,522 (342,005) (8,759,413) (131,917) (225,358) (1,008,483) (521,716) (463,766) 854,955 202,795 (32,955) 169,840 1,046,835 1,216,675 (1,150,215) 453,848 44,238 498,086 1,216,675 1,714,761 (594,234) 11,405 — The accompanying Notes 1 to 36 form an integral part of these consolidated financial statements. 172 1 LATAM AIRLINES GROUP S.A. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2023 NOTE 1 - GENERAL INFORMATION LATAM Airlines Group S.A. (“LATAM” or the "Company") is an open stock company which holds the values inscribed in the Registro de Valores of the Commission for the Financial Market, whose shares are listed in Chile on the Electronic Stock Exchange of Chile - Stock Exchange and the Santiago Stock Exchange. LATAM’s ADRs are currently trading in the United States of America on the OTC (Over-The-Counter) markets. Its main business is the air transport of passengers and cargo, both in the domestic markets of Chile, Peru, Colombia, Ecuador and Brazil, as well as in a series of regional and international routes in America, Europe and Oceania. These businesses are developed directly or by its subsidiaries in Chile, Ecuador, Peru, Brazil, Colombia and Paraguay. In addition, the Company has subsidiaries that operate in the cargo business in Chile, Brazil and Colombia. The Company is located in Chile, in the city of Santiago, on Avenida Presidente Riesco No. 5711, Las Condes commune. As of December 31, 2023, the Company's statutory capital is represented by 604,441,789,335 ordinary shares without nominal value. As of that date, 604,437,877,587 shares were subscribed and paid. The foregoing, considering the capital increase approved by the shareholders of the company at an extraordinary meeting held on July 5, 2022, in the context of the implementation of its reorganization plan approved and confirmed in the Chapter 11 Proceedings, as well as the Capital decrease required for the Chilean Capital Markets law that appears in a public deed dated September 6, 2023, granted at the Notaría of Santiago of Mr. Eduardo Javier Diez Morello. The major shareholders of the Company, considering the total amount of subscribed and paid shares, are Banco de Chile on behalf of State Street which owns 45.81%, Banco de Chile on behalf of Non-Resident Third Parties with 11.94%, Delta Air Lines with 10.05% and Qatar Airways with 10.03% ownership. As of December 31, 2023, the Company had a total of 2,100 shareholders in its registry. At that date, approximately 0.01% of the Company's capital stock was in the form of ADRs. During 2023, the Company had an average of 34,174 employees, ending this year with a total of 35,568 collaborator, distributed in 5,149 Administration employees, 17,655 in Operations, 8,688 Cabin Crew and 4,076 Command crew. ANNUAL REPORT 2023 13 —Financial reports —Financial statements The main subsidiaries included in these consolidated financial statements are as follows: 2 a) Percentage ownership Tax No. Company Country of origin Functional Currency 96.969.680-0 Lan Pax Group S.A. and Subsidiaries Foreign Latam Airlines Perú S.A. 93.383.000-4 Lan Cargo S.A. 76.717.244-3 Prime Cargo SpA. Foreign Foreign Connecta Corporation Prime Airport Services Inc. and Subsidiary 96.951.280-7 Transporte Aéreo S.A. 96.631.520-2 Fast Air Almacenes de Carga S.A. Foreign Foreign Laser Cargo S.R.L. Lan Cargo Overseas Limited and Subsidiaries 96.969.690-8 Lan Cargo Inversiones S.A. and Subsidiary 96.575.810-0 Inversiones Lan S.A. Chile Peru Chile Chile U.S.A. U.S.A. Chile Chile Argentina Bahamas Chile Chile US$ US$ US$ CLP US$ US$ US$ CLP ARS US$ US$ US$ As December 31, 2023 As December 31, 2022 Direct Indirect Total Direct Indirect % % % % % Total % 99.9959 0.0041 100.0000 99.9959 0.0041 100.0000 23.6200 76.1900 99.8100 23.6200 76.1900 99.8100 99.8940 0.0041 99.8981 99.8940 0.0000 100.0000 100.0000 0.0000 0.0041 0.0000 99.8981 0.0000 0.0000 100.0000 100.0000 0.0000 100.0000 100.0000 0.0000 100.0000 100.0000 0.0000 100.0000 100.0000 0.0000 100.0000 100.0000 0.0000 100.0000 100.0000 0.0000 100.0000 100.0000 0.0000 100.0000 100.0000 0.0000 100.0000 100.0000 0.0000 100.0000 100.0000 0.0000 0.0000 0.0000 0.0000 100.0000 100.0000 0.0000 100.0000 100.0000 0.0000 100.0000 100.0000 99.9000 0.1000 100.0000 99.9000 0.1000 100.0000 Technical Training LATAM S.A. Chile CLP 99.8300 0.1700 100.0000 99.8300 0.1700 100.0000 96.847.880- K Foreign Foreign Foreign Foreign Foreign Latam Finance Limited Peuco Finance Limited Professional Airline Services INC. Jarletul S.A. Latam Travel S.R.L. 76.262.894-5 Latam Travel Chile II S.A. Foreign Latam Travel S.A. Foreign TAM S.A. and Subsidiaries (*) Cayman Island Cayman Island U.S.A. Uruguay Bolivia Chile Argentina Brazil US$ 100.0000 0.0000 100.0000 100.0000 0.0000 100.0000 US$ US$ US$ US$ US$ ARS BRL 100.0000 0.0000 100.0000 100.0000 0.0000 100.0000 100.0000 0.0000 100.0000 100.0000 0.0000 100.0000 0.0000 100.0000 100.0000 0.0000 100.0000 100.0000 99.0000 99.9900 94.0100 1.0000 100.0000 99.0000 1.0000 100.0000 0.0100 100.0000 99.9900 0.0100 100.0000 5.9900 100.0000 94.0100 5.9900 100.0000 63.0987 36.9013 100.0000 63.0901 36.9099 100.0000 (*) As of December 31, 2023, the indirect participation percentage of TAM S.A. and its Subsidiaries is from Holdco I S.A., a company which LATAM Airlines Group S.A. has a 100% share on economic rights and 51.04% of political rights. Its percentage arose as a result of the provisional measure No. 863 of the Brazilian government implemented in December of 2018 that allows foreign capital to have up to 100% of the share ownership of a Brazilian Airline. 173 b) Financial Information 3 Tax No. Company Statement of financial position Net Income For the year ended At December 31, As of December 31, 2023 As of December 31, 2022 2023 2022 Assets Liabilities ThUS$ ThUS$ Equity ThUS$ Assets Liabilities Equity Gain /(loss) ThUS$ ThUS$ ThUS$ ThUS$ ThUS$ 96.969.680-0 Foreign 93.383.000-4 76.717.244-3 Foreign Foreign 96.951.280-7 96.631.520-2 Foreign Foreign 96.969.690-8 96.575.810-0 96.847.880-K Foreign Foreign Foreign Foreign Foreign Foreign Lan Pax Group S.A. and Subsidiaries (*) 487,236 1,835,537 (1,000,622) 392,232 1,727,968 (1,342,687) 7,514 (121,673) Latam Airlines Perú S.A. 334,481 285,645 48,836 335,773 281,178 54,595 (4,666) (12,726) Lan Cargo S.A. Prime Cargo SpA. Connecta Corporation Prime Airport Services Inc. and Subsidiary (*) 391,430 189,019 202,411 394,378 212,094 182,284 22,677 (1,230) 912 64,054 19,435 — 6,790 17,241 912 57,264 2,194 — 78,905 25,118 — 22,334 24,305 — — — 56,571 693 14,814 813 1,380 1,838 Transporte Aéreo S.A. 280,117 151,066 129,051 283,166 177,109 106,057 24,871 (36,190) Fast Air Almacenes de Carga S.A. 14,255 10,455 3,800 16,150 12,623 3,527 Laser Cargo S.R.L. Lan Cargo Overseas Limited and Subsidiaries (*) — — 1 — (1) — — 3 (3) 35,991 15,334 20,656 462 — — 1,154 — (1,287) Lan Cargo Inversiones S.A. and Subsidiary (*) 166,503 80,502 (71,744) 220,144 148,489 11,661 (5,345) (11,901) Inversiones Lan S.A. (*) Technical Training LATAM S.A. Latam Finance Limited Professional Airline Services INC. Jarletul S.A. Latam Travel S.R.L. 76.262.894-5 Latam Travel Chile II S.A. Latam Travel S.A. 1,238 1,246 50 893 1,188 353 1,281 1,417 56 1,110 1,225 307 (36) 165 (14) 77 114 208,621 (208,507) 3,011 211,517 (208,506) (1) 169,582 15,571 16 92 356 4,547 10,943 1,101 — 1,239 1,554 4,628 56,895 (1,085) 92 (883) 2,993 16 92 368 7,303 53,786 1,109 5 1,234 2,715 3,109 1,681 (1,093) 87 (866) 4,588 8 5 (16) 940 258 (2) 154 2 (6,187) TAM S.A. and Subsidiaries (*) 4,240,748 3,027,373 1,212,329 3,497,848 4,231,547 (733,699) 740,783 (69,932) (*) The Equity reported corresponds to Equity attributable to owners of the parent, it does not include Non- controlling participation. In addition, the following special purpose entities have been consolidated: (1) Chercán Leasing Limited, intended to finance advance payments of aircraft; (2) Guanay Finance Limited, intended for the issue of a securitized bond with future credit card payments (Liquidated in May 2023); and (3) Yamasa Sangyo Aircraft LA1 Kumiai, Yamasa Sangyo Aircraft LA2 Kumiai, earmarked for aircraft financing. These companies have been consolidated as required by IFRS 10. All entities over which LATAM has control have been included in the consolidation. The Company has analyzed the control criteria in accordance with the requirements of IFRS 10. Changes occurred in the consolidation perimeter between January 1, 2022 and December 31, 2023, are detailed below: (1) Incorporation or acquisition of companies - On December 22, 2022, LATAM Airlines Group S.A. purchased of 1,390,468,967 preferred shares of Latam Travel S.A.;consequently, the shareholding composition of Latam Travel S.A. is as follows: Lan Pax Group S.A. with 5.69%, Inversora Cordillera S.A. with 0.30% and LATAM Airlines Group S.A. with 94.01%. These transactions were between LATAM Airlines Group entities and therefore did not generate any effects within the consolidated financial statements. - On March 29, 2023, a capital increase was made in TAM S.A. carried out a capital increase, through the contribution of LATAM Airlines Group S.A. of accounts receivable for ThUS$785,865; consequently, there were no significant changes in the shareholder composition and therefore did not generate any effect within the Consolidated Financial Statements. ANNUAL REPORT 2023 13 —Financial reports —Financial statements 4 - On March 29, 2023, a capital increase was made in TAM Linheas Aéreas S.A carried out a increase, capital 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. the contribution of TAM S.A. of accounts receivable for through - On March 29, 2023, a capital increase was made in Aerovías de Integración Regional S.A. Aires S.A. through the contribution of made a capital increase where Holdco Colombia I SpA made a contribution through accounts receivable for ThUS$120,410, consequently, there were no significant changes in the shareholder composition and therefore did not generate any effect within the Consolidated Financial Statements. - On April 14, 2023, a capital reduction was carried out in Lan Argentina S.A. through the absorption of losses in the sum of ThUS$160,170. Consequently, there were no significant changes in the shareholding composition and therefore it did not generate any effect within the Consolidated Financial Statements. - On June 7, 2023, a capital increase was made in TAM S.A. carried out a capital increase, through the contribution of LATAM Airlines Group S.A. of accounts receivable for ThUS$308,031, consequently, there were no significant changes in the shareholder composition and therefore did not generate any effect within the Consolidated Financial Statements. - On June 7, 2023, a capital increase was made in TAM Linheas Aéreas S.A carried out a capital increase, through the contribution of TAM S.A. of accounts receivable for ThUS$308,031, consequently, there were no significant changes in the shareholder composition and therefore did not generate any effect within the Consolidated Financial Statements. - On June 13 and 14, 2023, Inversiones Lan S.A. made a purchase of 923 shares from third parties, for an a total amount of ThUS$ 23, of the subsidiary Aerovías de Integración Regional S.A. Aires S.A., consequently, these transactions generated a decrease in the non-controlling interest, without generating significant effects on the Consolidated Financial Statements. - On July 21, 2023, a capital increase was carried out in Latam Airlines Ecuador S.A through the contribution of accounts receivable held by Holdco Ecuador S.A for ThUS$3,100, consequently, there were no significant changes in the shareholding composition and Therefore, it did not generate any effect within the Consolidated Financial Statements. - On July 28, 2023, Lan Cargo S.A purchased 1 share of Lan Cargo Overseas Limited from Inversiones Lan S.A. Consequently, there were no significant changes in the shareholding composition and therefore did not generate any effect within the Consolidated Financial Statements. - On August 1, 2023, Inversiones Lan S.A. purchased 1 share of Americonsult SA de CV from Lan Cargo Overseas Limited. Consequently, there were no significant changes in the shareholding composition and therefore did not generate any effect within the Consolidated Financial Statements. - On August 4, 2023, the merger of Holdco Colombia II SpA into Lan Pax Group S.A takes place, acquiring the latter all of its assets, liabilities, rights and obligations. As a result of the above, Holdco Colombia II SpA is dissolved. On the same date Lan Pax Group S.A carries out a capital increase of ThUS$347 in Holdco Colombia I SpA through the contribution of 47,010 shares of Aerovías de Integración Regional S.A. These transactions were carried out between entities under common control of LATAM Airlines Group S.A. Group. and, therefore, did not generate any effect within the Consolidated Financial Statements. 174 5 - On September 11, 2023, the company Mas Investment Limited was liquidated and its controller Lan Cargo Overseas Limited acquired all its assets, liabilities, rights and obligations, as a result of the liquidation, including the investments that Mas Investment Limited held in the following companies: (i) Consultoría Administrativa Profesional S.A. de C.V., equivalent to 49,500 shares; (ii) Americonsult, S.A. de C.V., equivalent to 499 shares; (iii) Transporte Aéreo S.A. equivalent to 109,662 shares; and (iv) Inversiones Aereas S.A., equivalent to 15,216 shares. These transactions were carried out between entities under common control of LATAM Airlines Group S.A. and, therefore, did not generate any effect within the Consolidated Financial Statements. - On September 11, 2023, the company Lan Cargo Overseas Limited was liquidated and its controller Lan Cargo S.A acquired all its all its assets, liabilities, rights and obligations, as a result of the liquidation, including the investments that Lan Cargo Overseas Limited held in the following companies: (i) Prime Airport Services Inc., equivalent to 105 shares; (ii) Americonsult de Costa Rica S.A, equivalent to 66 shares; (iii) Americonsult de Guatemala, Sociedad Anónima, equivalent to 50 shares; (iv) Consultoría Administrativa Profesional S.A. de C.V., equivalent to 49,500 shares; (v) Americonsult, S.A. de C.V., equivalent to 499 shares; (vi) Transporte Aéreo S.A. equivalent to 109,662 shares; and (vii) Inversiones Aereas S.A., equivalent to 15,216 shares. These transactions were carried out between entities under common control of LATAM Airlines Group S.A. and, therefore, did not generate any effect within the Consolidated Financial Statements. - On September 15, 2023, a capital increase was made in TAM S.A. through the contribution of ThUS$106,104 on accounts receivable from LATAM Airlines Group S.A.; consequently, there were no significant changes in the shareholder composition and therefore did not generate any effect within the Consolidated Financial Statements. - On September 15, 2023, a capital increase was made in TAM Linheas Aéreas S.A through the contribution of ThUS$106,104 on accounts receivable from TAM S.A., consequently, there were no significant changes in the shareholder composition and therefore did not generate any effect within the Consolidated Financial Statements. - On October 23 and 30, 2023, Inversiones Lan S.A. purchased a total 183 shares from Non- controlling interest, for an a total amount of ThUS$2, of the subsidiary Aerovías de Integración Regional S.A. Aires S.A., consequently, these transactions generated a decrease in non- controlling interest, with no generating significant effects on the Consolidated Financial Statements. - On December 6, 2023, the company Prime Cargo SpA was incorporated, which is 100% owned by Lan Cargo S.A., whose exclusive purpose is to carry out storage activities for all types of products and/or merchandise. - On December 29, 2023, LATAM Airlines Group S.A. purchased of 2,392,166 preferred shares of Inversora Cordillera S.A. a Transportes Aéreos del Mercosur S.A.;consequently, the shareholding composition of Inversora Cordillera S.A. is as follows: Lan Pax Group S.A. with 99.95% and LATAM Airlines Group S.A. with 0.05%. These transactions were between subsidiaries of LATAM Airlines Group not generating any effects within the Consolidated Financial Statements. - On December 29, 2023, LATAM Airlines Group S.A. purchased of 53,376 preferred shares of LAN Argentina S.A. a Transportes Aéreos del Mercosur S.A.;consequently, the shareholding composition of LAN Argentina S.A. is as follows: Lan Pax Group S.A. with 4.99%, Inversora Cordillera S.A. with 94.96% and LATAM Airlines Group S.A. with 0.05%. These transactions were between subsidiaries of LATAM Airlines Group not generating any effects within the Consolidated Financial Statements. ANNUAL REPORT 2023 13 —Financial reports —Financial statements 6 NOTE 2 - SUMMARY OF MATERIAL ACCOUNTING POLICIES The following describes the principal accounting policies adopted in the preparation of these consolidated financial statements. 2.1. Basis of Preparation These consolidated financial statements of LATAM Airlines Group S.A. and Subsidiaries as of December 31, 2023 and 2022, have been prepared in accordance with the International Financial Reporting Standards as issued by the International Accounting Standards Board (IFRS Accounting Standards) and with the interpretations issued by the International Financial Reporting Standards Interpretations Committee (IFRIC IC). The consolidated financial statements have been prepared under the historic-cost criterion, although modified by the valuation at fair value of certain financial instruments. The preparation of the consolidated financial statements in accordance with IFRS Accounting Standards requires the use of certain critical accounting estimates. It also requires management to use its judgment in applying the Company’s accounting policies. Note 4 describe the areas that imply a greater degree of judgment or complexity or the areas where the assumptions and estimates are significant to the consolidated financial statements. These consolidated financial statements have been prepared in accordance with the accounting policies used by the Company in the preparation of the 2022 consolidated financial statements, except for the standards and interpretations adopted as of January 1, 2023. (a) Application of new standards for the year 2023: Accounting pronouncements with implementation effective from January 1, 2023: (i) Standards and amendments Issuance Date Effective Date: IFRS 17: Insurance contracts, replaces IFRS 4. May 2017 01/01/2023 Initial Application of IFRS 17 and IFRS 9 — Comparative Information (Amendment to IFRS 17) December 2021 An entity that elects to apply the amendment applies it when it first applies IFRS 17 Amendment to IAS 1: Presentation of financial statements, on materiality accounting policies. February 2021 01/01/2023 Amendment to IAS 8: Accounting policies, changes in accounting estimates and error, on separating between changes in accounting estimates and changes in accounting policies. February 2021 01/01/2023 Amendment to IAS 12: Income taxes, on international tax reform – rules of the two pillar model. May 2023 01/01/2023 Amendment to IAS 12: Income taxes, Deferred taxes related to assets and liabilities that arise from a single transaction. May 2021 01/01/2023 The application of these accounting standards as of January 1, 2023, had no significant effect on the Company's consolidated financial statements. 175 (b) Accounting pronouncements not in force for the financial year beginning on January 1, 2023: 7 (i) Standards and amendments Issuance Date Effective Date: 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 non- current liabilities with covenants. October 2022 01/01/2024 Amendment to IFRS 16: Leases, on sales with leaseback. September 2022 01/01/2024 Amendment to IFRS 10: Consolidated financial statements and IAS 28: Investments in associates and joint ventures. September 2014 Not determined Amendments to IAS 7 "Statement of cash flows" and IFRS 7 "Financial Instruments: Information to be Disclosed" May 2023 01/01/2024 Amendments to IAS 21: Lack of Exchangeability August 2023 01/01/2025 The Company's management estimates that the adoption of the standards, amendments and interpretations described above will not have a significant impact on the Company's consolidated financial statements in the exercise of their first application. (c) Chapter 11 Filing and Exit Chapter 11 Filing and Procedure: Due to the effects on the operation of the restrictions established in the countries to control the effects of the COVID-19 pandemic, on May 25, 2020 the Board of LATAM Airlines Group S.A. (“LATAM Parent”) resolved unanimously that LATAM Parent and some its subsidiaries should initiate a reorganization process in the United States of America according to the rules established in the Bankruptcy Code by filing a voluntary petition for relief in accordance with the same, which petition was submitted on May 26, 2020 and was jointly administered under Case Number 20-11254. Subsequently, Piquero Leasing Limited (July 7, 2020) and TAM S.A. and its subsidiaries in Brazil (July 9, 2020) joined the process (the voluntary petitions, collectively, the “Bankruptcy Filing” and each LATAM entity that filed a petition, a “Debtor” and jointly, the “Debtors”). The Bankruptcy Filing for each of the Debtors (each one, respectively, a “Petition Date”) was jointly administered under the caption “In re LATAM Airlines Group S.A. et al.” Case Number 20-11254. On June 18, 2022, the Bankruptcy Court issued a memorandum decision approving the Debtors’ joint plan of reorganization (the “Plan”) and rejecting all remaining objections and entered an order confirming the Plan (the “Confirmation Order”). On November 3, 2022 (the “Effective Date”), the Plan was substantially consummated and each of the Debtors emerged from the Chapter 11 proceedings as “Reorganized Debtors”. Pursuant to the Plan, the Company received an infusion of approximately US$8.19 billion through a mix of new equity, convertible notes and debt, which enabled the Company to exit Chapter 11 with appropriate capitalization to effectuate its business plan. Upon emergence, the Company had total debt of approximately US$6.8 billion, cash and cash equivalents of approximately US$1.1 billion and revolving undrawn facilities in the amount of US$1.1 billion. Specifically, the Plan provided that: • • The Company conducted a US$800 million common equity rights offering, open to all shareholders in accordance with their preemptive rights under applicable Chilean law, and fully backstopped by the parties participating in the Restructuring Support Agreement (RSA); Three distinct classes of convertible notes were issued by the Company, all of which were preemptively offered to shareholders. The preemptive rights offering period closed on October 12, 2022. For those securities not subscribed by the Company’s shareholders during the respective preemptive rights period: ANNUAL REPORT 2023 13 —Financial reports —Financial statements 8 • New Convertible Notes Class A, hereinafter Class G Convertible notes (by the denomination with which they were registered in the Registro de Valores of the CMF), were delivered to certain general unsecured creditors of the Company in settlement of their allowed claims under the Plan. The Issuance conditions: Nominal Value : Approximately ThUS$1,257,003 Conversion Ratio: 15.904615504595600. The Convertible Notes Class G Conversion Ratio shall step down by 50% after the sixty days (60) counted from the Effective Date. Backup Shares: 19,992,142,087 Maturity: 31 Dec. 2121 Interest rate: 0% Conversion Conditions: They may be converted into shares of the Company within twelve months from the Effective Date of the Plan. As soon as 50% of the holders of New Class G Convertible Notes have opted to convert, the remaining Class G Convertible Notes will be automatically converted. • New Convertible Notes Class B, hereinafter Class H Convertible notes (by the denomination with which they were registered in the Registro de Valores of the CMF), were subscribed and purchased by the shareholder that are part of the RSA. The Issuance conditions: Nominal Value: Approximately ThUS$1,372,840 Conversion Ratio: 92.2623446840237. The conversion ratio of Class H Convertible Notes will be reduced by 50% after the sixty days (60) counted from the fifth (5th) anniversary from the Effective Date . Backup Shares: 126,661,409,136 Maturity: 31 Dec. 2121 Interest rate: 1% interest rate payable in cash annually with no interest in the first 60 days. Conversion Conditions: a) First Convertible Notes Class H Conversion Period: Each holder of Convertible Notes Class H will have the ability to convert its Convertible Notes Class H into shares of the Company within sixty (60) days from the Effective Date. b) Second Convertible Notes Class H Conversion Period: Additionally, each holder of Convertible Notes Class H will have the ability to convert their Convertible Notes Class H into shares of the Company beginning on the fifth (5th) anniversary of the Effective Date and until the sixth (6th) anniversary of the Effective Date. • New Convertible Notes Class C, hereinafter Class I Convertible notes (by the denomination with which they were registered in the Registro de Valores of the CMF), were provided to certain general unsecured creditors in exchange for a combination of a contribution of new money to the Company and the settlement of their allowed claims under the Plan, subject to certain limitations and holdbacks by the backstopping parties. The Issuance conditions: Nominal Value: Approximately ThUS$6,863,427 Conversion Ratio: 56.143649821654. The Convertible Notes Class I Conversion Ratio shall step down by 50% after the sixty days (60) counted from the Effective Date. Backup Shares: 385,337,858,290 Maturity: 31 Dec. 2121 Interest rate: 0% Conversion Conditions: They may be converted into shares within 12 months from the Effective Date of the Plan. As soon as 50% of the holders of Class I Convertible Notes have opted to convert, then the remaining Class I Convertible Notes will be automatically converted. 176 9 • The election period for the Convertible Notes Class G and Convertible Notes Class I by creditors ended on October 6, 2022. • General unsecured creditors that elected to receive Convertible Notes Class G or Convertible Notes Class I were entitled to receive a one-time cash distribution in an aggregate amount of approximately US$175 million. • • The Convertible Notes Classes H and I were issued, totally or partially, in consideration of a new money contribution for the aggregate amount of approximately US$4.64 billion fully backstopped by the parties to the RSA. In lieu of receiving Convertible Notes Class G or Convertible Notes Class I (and the aforementioned one-time cash distribution), general unsecured creditors were provided with the alternative of opting to receive New Local Notes issued by LATAM. As set forth in the Plan and based on the elections made by general unsecured creditors, such notes were issued in the amount of UF 3,818,042 (equal to approximately US$130 million as of the date of their issuance). Pursuant to the Plan and Backstop Agreements, LATAM raised up to US$500 million through a new revolving credit facility and approximately US$2.25 billion in total new money debt financing through exit financing (new term loan and new notes). On September 2, 2022, the Convertible Notes Classes G, H and I together with the shares contemplated in the Plan were registered with the Chilean Registro de Valores of the Financial Market Commission (the “CMF”). The CMF approved the New Local Notes on September 5, 2022. The Debtors established September 12, 2022 as the record date with respect to creditors entitled to participate in the Convertible Notes Class G and Convertible Notes Class I, and commenced the offering of the Convertible Notes to claimholders on the same day. As of December 31, 2023, 100.000% of the Convertible Notes Class G was placed, 99.997% of the Convertible Notes Class H was placed and 100.000% of the Convertible Notes Class I was placed had been converted into equity, respectively (See Note 24) As of the Effective Date, the Plan was substantially consummated. Pursuant to the Plan, the Reorganized Debtors were permitted to operate their businesses and manage their properties without supervision of the Bankruptcy Court and free of the restrictions of the Bankruptcy Code. As customary in this type of restructurings, the docket of the Chapter 11 proceedings remained open after the Effective Date to finalize the reconciliation process of certain claims that were still outstanding as of the Effective Date, as well as to resolve certain administrative matters. On June 29, 2023, the Bankruptcy Court entered a final decree in the Chapter 11 proceedings ordering that Case Number 20-11254 and its docket be closed (the “Final Decree”). The foregoing, as a result of the resolution of substantially all remaining matters in the Chapter 11 proceedings and all appeals of the Confirmation Order. As part of their overall reorganization process, while the Chapter 11 proceedings were outstanding the Debtors sought and received relief in certain non-U.S. jurisdictions (i.e., Cayman Islands, Chile and Colombia). ANNUAL REPORT 2023 13 —Financial reports —Financial statements 2.2. Basis of Consolidation (a) Subsidiaries 10 Subsidiaries are all the entities (including special-purpose entities) over which the Company has the power to control the financial and operating policies, which are generally accompanied by a holding of more than half of the voting rights. In evaluating whether the Company controls another entity, the existence and effect of potential voting rights that are currently exercisable or convertible at the date of the consolidated financial statements are considered. The subsidiaries are consolidated from the date on which control is passed to the Company and they are excluded from the consolidation on the date they cease to be so controlled. The results and cash are incorporated from the date of acquisition. Balances, transactions and unrealized gains on transactions between the Company’s entities are eliminated. Unrealized losses are also eliminated unless the transaction provides evidence of an impairment loss of the asset transferred. When necessary, in order to ensure uniformity with the policies adopted by the Company, the accounting policies of the subsidiaries are modified. To account for and identify the financial information to be disclosed when carrying out a business combination, such as the acquisition of an entity by the Company, the acquisition method provided for in IFRS 3: Business combinations is used. (b) Transactions with non-controlling interests The Group applies the policy of considering transactions with non-controlling interests, when not related to the loss of control, as equity transactions without an effect on income. (c) Sales of subsidiaries When a subsidiary is sold and a percentage of participation is not retained, the Company derecognizes the assets and liabilities of the subsidiary, the non-controlling interest and other components of equity related to the subsidiary. Any gain or loss resulting from the loss of control is recognized in the consolidated income statement by function within Other gains (losses). If LATAM Airlines Group S.A. and Subsidiaries retain an ownership of participation in the disposed subsidiary which does not represent control, this is recognized at fair value on the date that control is lost and the amounts previously recognized in Other comprehensive income are accounted as if the Company had disposed directly the assets and related liabilities, which can cause these amounts to be reclassified to profit or loss. The percentage retained valued at fair value is subsequently accounted using the equity method. (d) Investees or associates Investees or associates are all entities over which LATAM Airlines Group S.A. and Subsidiaries have significant influence but have no control. This usually arises from holding between 20% and 50% of the voting rights. Investments in associates are booked using the equity method and are initially recognized at their cost. 2.3. Foreign currency transactions (a) Presentation and functional currencies The items included in the financial statements of each of the entities of LATAM Airlines Group S.A. and its Subsidiaries are valued using the currency of the main economic environment in which the entity operates (the functional currency). The functional currency of LATAM Airlines Group S.A. is the United States Dollar, which is also the presentation currency of the consolidated financial statements of LATAM Airlines Group S.A. and Subsidiaries. (b) Transactions and balances Foreign currency transactions are translated to the functional currency using the exchange rates on the transaction dates. Foreign currency gains and losses resulting from the liquidation of these transactions and from the translation at the closing exchange rates of the monetary assets and liabilities denominated in foreign 177 currency are shown in the consolidated statement of income by function except when deferred in Other comprehensive income as qualifying cash flow hedges. 11 (c) Adjustment due to hyperinflation After July 1, 2018, the Argentine economy was considered, for purposes of IFRS Accounting Standards, hyperinflationary. The consolidated financial statements of the subsidiaries whose functional currency is the Argentine Peso have been restated. The non-monetary items of the statement of financial position as well as the income statement, comprehensive income and cash flows of the group's entities, whose functional currency corresponds to a hyperinflationary economy, are adjusted for inflation and re-expressed in accordance with the variation of the consumer price index ("CPI"), at each presentation date of its financial statements. The re-expression of non-monetary items is made from the date of initial recognition in the statements of financial position and considering that the financial statements are prepared under the historical cost criterion. Net losses or gains arising from the re-expression of non-monetary ítems and income and costs are recognized in the consolidated income statement under "Result of indexation units". Net gains and losses on the re-expression of opening balances due to the initial application of IAS 29 are recognized in consolidated retained earnings. Re-expression due to hyperinflation will be recorded until the period or exercise in which the economy of the entity ceases to be considered as a hyperinflationary economy. At that time, the adjustments made by hyperinflation will be part of the cost of non-monetary assets and liabilities. The comparative amounts in the consolidated financial statements of the Company are presented in a stable currency and are not adjusted for subsequent changes in the price level or exchange rates. (d) Group entities The results and the financial situation of the Group's entities, whose functional currency is different from the presentation currency of the consolidated financial statements, of LATAM Airlines Group S.A., which does not correspond to the currency of a hyperinflationary economy, are converted into the currency of presentation as follows: (i) the closing exchange rate on the consolidated statement of financial position date; Assets and liabilities of each consolidated statement of financial position presented are translated at (ii) prevailing on the transaction dates, and The revenues and expenses of each income statement account are translated at the exchange rates (iii) comprehensive income, within "Gain (losses) from exchange rate difference, before tax". All the resultant exchange differences by conversion are shown as a separate component in other 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. ANNUAL REPORT 2023 13 —Financial reports —Financial statements 2.4. Property, plant and equipment 12 The land of LATAM Airlines Group S.A. and its Subsidiaries, are recognized at cost less any accumulated impairment loss. The rest of the Property, plant and equipment are recorded, both at their initial recognition and their subsequent measurement, at their historical cost, restated for inflation when appropriate, less the corresponding depreciation and any loss due to impairment. The amounts of advances paid to the aircraft manufacturers are capitalized by the Company under Construction in progress until they are received. Subsequent costs (replacement of components, improvements, extensions, etc.) are included in the value of the initial asset or are recognized as a separate asset, only when it is probable that the future economic benefits associated with the elements of property, plant and equipment, will flow to the Company and the cost of the item can be determined reliably. The value of the replaced component is written off. The rest of the repairs and maintenance are charged to income when they are incurred. The depreciation of the Property, plant and equipment is calculated using the linear method over their estimated technical useful lives; except in the case of certain technical components which are depreciated on the basis of cycles and hours flown. This charge is recognized in the captions "Cost of sale" and "Administrative expenses". The residual value and the useful life of assets are reviewed and adjusted, if necessary, once a year. Useful lives are detailed in Note 16 (d). When the value of an asset exceeds its estimated recoverable amount, its value is immediately reduced to its recoverable amount. Losses and gains from the sale of property, plant and equipment are calculated by comparing the consideration with the book value and are included in the consolidated statement of income. 2.5. Intangible assets other than goodwill (a) Airport slots and Loyalty program Airport slots and the Loyalty program correspond to intangible assets with indefinite useful lives and are annually tested for impairment as an integral part of the CGU Air Transport. Airport Slots correspond to an administrative authorization to carry out operations of arrival and departure of aircraft, at a specific airport, within a certain period of time. The Loyalty program corresponds to the system of accumulation and exchange of points that is part of TAM Linhas Aereas S.A. The airport slots and Loyalty program were recognized at fair value under IFRS 3, as a consequence of the business combination with TAM S.A. and Subsidiaries. (b) Computer software Licenses for computer software acquired are capitalized on the basis of the costs incurred in acquiring them and preparing them for using the specific software. These costs are amortized over their estimated useful lives, for which the Company has defined useful lives between 3 and 10 years. Expenses related to the development or maintenance of computer software which do not qualify for capitalization, are shown as an expense when incurred. The personnel costs and other costs directly related to the production of unique and identifiable computer software controlled by the Company, are shown as intangible Assets other than Goodwill when they have met all the criteria for capitalization. 2.6. Borrowing costs Interest costs incurred for the construction of any qualified asset are capitalized over the time necessary for completing and preparing the asset for its intended use. Other interest costs are recognized in the consolidated statement of income by function when accrued. 178 2.7. Losses for impairment of non-financial assets 13 Intangible assets that have an indefinite useful life are not subject to amortization and are tested annually for impairment, or more frequently if events or changes in circumstances indicate that they might be impaired. Assets subject to amortization are tested for impairment losses whenever any event or change in circumstances indicates that the carrying amount may not be recoverable. An impairment loss is recognized for the excess of the carrying amount of the asset over its recoverable amount. The recoverable amount is the fair value of an asset less the costs of sale or the value in use, whichever is greater. For the purpose of evaluating impairment losses, assets are grouped at the lowest level for which there are largely independent cash inflows (cash generating unit. Non-financial assets, other than goodwill, that would have suffered an impairment loss are reviewed if there are indicators of reversal of losses. Impairment losses are recognized in the consolidated statement of income by function under "Other gains (losses)". 2.8. Financial assets The Company classifies its financial assets in the following categories: at fair value (either through other comprehensive income, or through gains or losses), and at amortized cost. The classification depends on the business model of the entity to manage the financial assets and the contractual terms of the cash flows. The group reclassifies debt investments when, and only when, it changes its business model to manage those assets. In the initial recognition, the Company measures a financial asset at its fair value plus, in the case of a financial asset classified at amortized cost, the transaction costs that are directly attributable to the acquisition of the financial asset. Transaction costs of financial assets accounted for at fair value through profit or loss are recorded as expenses in the consolidated statement of income by function. (a) Debt instruments The subsequent measurement of debt instruments depends on the group's business model to manage the asset and cash flow characteristics of the asset. The Company has two measurement categories in which the group classifies its debt instruments: Amortized cost: the assets held for the collection of contractual cash flows where those cash flows represent only payments of principal and interest are measured at amortized cost. A gain or loss on a debt investment that is subsequently measured at amortized cost and is not part of a hedging relationship is recognized in income when the asset is derecognized or impaired. Interest income from these financial assets is included in financial income using the effective interest rate method. Fair value through profit or loss: assets that do not meet the criteria of amortized cost or fair value through other comprehensive income are measured at fair value through profit or loss. A gain or loss on a debt investment that is subsequently measured at fair value through profit or loss and is not part of a hedging relationship is recognized in profit or loss and is presented net in the consolidated statement of income by function within other gains / (losses) in the period or exercise in which it arises. (b) Equity instruments Changes in the fair value of financial assets at fair value through profit or loss are recognized in other gains / (losses) in the consolidated statement of income by function as appropriate. The Company evaluates in advance the expected credit losses associated with its debt instruments recorded at amortized cost. The applied impairment methodology depends on whether there has been a significant increase in credit. 2.9. Derivative financial instruments and embedded derivatives Derivative financial instruments and hedging activities Initially at fair value on the date on which the derivative contract was made and are subsequently valued at their fair value. The method to recognize the resulting loss or gain depends on whether the derivative designated as a hedging instrument and, if so, the nature of the item being hedged. ANNUAL REPORT 2023 13 —Financial reports —Financial statements 14 The Company designates certain derivatives as: (a) Hedge of an identified risk associated with a recognized liability or an expected highly- probable transaction (cash-flow hedge), or (b) Derivatives that do not qualify for hedge accounting. At the beginning of the transaction, the Company documents the economic relationship between the hedged items existing between the hedging instruments and the hedged items, as well as its objectives for risk management and the strategy to carry out various hedging operations. The Company also documents its assessment, both at the beginning and on an ongoing basis, as to whether the derivatives used in the hedging transactions are highly effective in offsetting the changes in the fair value or cash flows of the items being hedged. The total fair value of the hedging derivatives is booked as Other non-current financial asset or liability if the remaining maturity of the item hedged is over 12 months, and as an Other current financial asset or liability if the remaining term of the item hedged is less than 12 months. Derivatives not booked as hedges are classified as Other financial assets or liabilities. (a) Cash flow hedges The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges is shown in the statement of other comprehensive income. The loss or gain relating to the ineffective portion is recognized immediately in the consolidated statement of income by function under other gains (losses). Amounts accumulated in equity are reclassified to profit or loss in the periods or exercise when the hedged item affects profit or loss. When these amounts correspond to hedging derivatives of highly probable items that give rise to non-financial assets or liabilities, in which case, they are recorded as part of the non- financial assets or liabilities. For fuel price hedges, the amounts shown in the statement of other comprehensive income are reclassified to results under the line-item Cost of sales to the extent that the fuel subject to the hedge is used. Gains or losses related to the effective part of the change in the intrinsic value of the options are recognized in the cash flow hedge reserve within equity. Changes in the time value of the options related to the part are recognized within Other Consolidated Comprehensive Income in the costs of the hedge reserve within equity. When a hedging instrument matures, is sold, or fails to meet the requirements to be accounted for as a hedge, any gain or loss accumulated in the statement of Other comprehensive income until that moment, remains in the statement of other comprehensive income and is reclassified to the consolidated statement of income when the hedged transaction is finally recognized. When it is expected that the hedged transaction is no longer going to occur, the gain or loss accumulated in the statement of other comprehensive income is taken immediately to the consolidated statement of income by function as “Other gains (losses)”. (b) Derivatives not booked as a hedge The changes in fair value of any derivative instrument that is not booked as a hedge are shown immediately in the consolidated statement of income in “Other gains (losses)”. 15 2.10. Inventories Inventories, are shown at the lower of cost and their net realizable value. The cost is determined on the basis of the weighted average cost method (WAC). The net realizable value is the estimated selling price in the normal course of business, less estimated costs necessary to make the sale. 2.11. Trade and other accounts receivable Commercial accounts receivable are initially recognized at their fair value and subsequently at their amortized cost in accordance with the effective rate method, less the provision for impairment according to the model of the expected credit losses. The Company applies the simplified approach permitted by IFRS 9, which requires that expected lifetime losses be recognized upon initial recognition of accounts receivable. In the event that the Company transfers its rights to any financial asset (generally accounts receivable) to a third party in exchange for a cash payment, the Company evaluates whether all risks and rewards have been transferred, in which case the account receivable is derecognized. The existence of significant financial difficulties on the part of the debtor, the probability that the debtor goes bankrupt or financial reorganization are considered indicators of a significant increase in credit risk. The carrying amount of the asset is reduced as the provision account is used and the loss is recognized in the consolidated income statement under "Cost of sales". When an account receivable is written off, it is regularized against the provision account for the account receivable. 2.12. Cash and cash equivalents Cash and cash equivalents include cash and bank balances, time deposits in financial institutions, and other short-term and highly liquid investments and a low risk of loss of value. 2.13. Capital The common shares are classified as net equity. Incremental costs directly attributable to the issuance of new shares or options are shown in net equity as a deduction from the proceeds received from the placement of shares. 2.14. Trade and other accounts payables Trade payables and other accounts payable are initially recognized at fair value and subsequently at amortized cost. 2.15. Interest-bearing loans Financial liabilities are shown initially at their fair value, net of the costs incurred in the transaction. Later, these financial liabilities are valued at their amortized cost; any difference between the proceeds obtained (net of the necessary arrangement costs) and the repayment value, is shown in the consolidated statement of income during the term of the debt, according to the effective interest rate method. Financial liabilities are classified in current and non-current liabilities according to the contractual payment dates of the nominal principal. Embedded derivatives Convertible Notes 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. 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 179 ANNUAL REPORT 202313 —Financial reports —Financial statements 16 17 from the fair value of the compound instrument as a whole. This is recognized and included in other equity, net of income tax effects. and is not subsequently remeasured. In addition, the conversion option classified as equity will remain in other equity until the conversion option is exercised, in which case, the balance recognized in other equity will be transferred to share capital. Where the conversion option remains unexercised at maturity date of the convertible bond, the balance recognized in other equity will be transferred to retained earnings. No gain or loss is recognized in profit or loss upon conversion or expiration of the conversion option. Transaction costs that relate to the issue of the convertible notes are allocated to the liability and equity components in proportion to the allocation of the gross proceeds. Transaction costs relating to the equity component are charged directly to equity. 2.16. Current and deferred taxes The tax expense for the period or exercise comprises income and deferred taxes. The current income tax expense is calculated based on tax laws enacted at the date of the statement of financial position, in the countries in which the subsidiaries and associates operate and generate taxable income. Deferred taxes are recognized on the temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. However, deferred income tax is accounted for if it arises from the initial recognition of an asset or a liability in a transaction other than a business combination that at the time of the transaction does not affect the accounting or the taxable profit or loss. Deferred tax is determined using the tax rates (and laws) that have been enacted or substantially enacted at the date of the consolidated statements of financial position and are expected to apply when the related deferred tax asset is realized or the deferred tax liability discharged. Deferred tax assets are recognized only to the extent it is probable that the future taxable profit will be available against which the temporary differences can be utilized. The tax (current and deferred) is recognized in the statement of income by function, unless it relates to an item recognized in other comprehensive income, directly in equity. In this case the tax is also recognized in other comprehensive income or, directly in the statement of income by function, respectively. Deferred tax assets and liabilities are offset if, and only if: (a) there is a legally enforceable right to set off current tax assets and liabilities, and (b) the deferred tax assets and liabilities relate to income taxes levied by the same taxation authority on either: (i) the same taxable entity, or (ii) different taxable entities which intend to settle current tax liabilities and assets on a net basis, or to realize the assets and settle the liabilities simultaneously, in each future period in which significant amounts of deferred tax liabilities or assets are expected to be settled or recovered. LATAM Airlines Group S.A has evaluated the potential impact from the implementation of the “GloBE or Pillar Two rules”, which seeks to ensure that multinational groups pay a minimum effective tax rate of 15%. As of December 31, 2023, this regulation has not been adopted in Chile (where LATAM has its headquarters) or in other jurisdictions where LATAM Airlines Group S.A has operating companies. Therefore, it has not been necessary to estimate a potential impact of its application from its entry into force (January 1, 2023). At the close of this Financial Statements, the group does not present expenses or income for current taxes related to the Pillar Two income tax. LATAM Airlines Group S.A. and its Subsidiaries have adopted the exception of paragraph 4A of IAS 12, incorporated in the amendment published on May 23, 2023. 2.17. Employee benefits (a) Personnel vacations The Company recognizes the expense for personnel vacations on an accrual basis. 180 (b) Share-based compensation The compensation plans implemented based on the value of the shares of the Company are recognized in the consolidated financial statements in accordance with IFRS 2: Share-based payments, for cash settled awards the fair value, updated as of the closing date of each reporting period or exercise, is recorded as a liability with charge to remuneration. (c) Post-employment and other long-term benefits Provisions are made for these obligations by applying the method of the projected unit credit method, and considering estimates of future permanence, mortality rates and future wage increases determined on the basis of actuarial calculations. The discount rates are determined by reference to market interest-rate curves. Actuarial gains or losses are shown in other comprehensive income. (d) Incentives The Company has an annual incentives plan for its personnel for compliance with objectives and individual contribution to the results. The incentives eventually granted consist of a given number or portion of monthly remuneration and the provision is made on the basis of the amount estimated for distribution. (e) Termination benefits The group recognizes termination benefits at the earlier of the following dates: (a) when the group terminates the employee relationship; and (b) when the entity recognizes costs for a restructuring that is within the scope of IAS 37 and involves the payment of terminations benefits. 2.18. Provisions Provisions are recognized when: (i) The Company has a present legal or constructive obligation as a result of a past event; (ii) It is probable that payment is going to be required to settle an obligation; and (iii) A reliable estimate of the obligation amount can be made. 2.19. Revenue from contracts with customers (a) Transportation of passengers and cargo The Company recognizes the sale for the transportation service as a deferred income liability, which is recognized as income when the transportation service has been provided or expired. In the case of air transport services sold by the Company and that will be made by other airlines, the liability is reduced when they are remitted to said airlines. The Company periodically reviews whether it is necessary to make an adjustment to deferred income liabilities, mainly related to returns, changes, among others. Compensations granted to clients for changes in the levels of services or billing of additional services such as additional baggage, change of seat, among others, are considered modifications of the initial contract, therefore, they are deferred until the corresponding service is provided. (b) Expiration of air tickets The Company estimates on a monthly basis the probability of expiration of air tickets, with refund clauses, based on their history of use. Air tickets without a refund clause expire on the date of the flight in case the passenger does not show up. (c) Costs associated with the contract The costs related to the sale of air tickets are capitalized and deferred until the moment of providing the corresponding service. These assets are included under the heading "Other current non-financial assets" in the Consolidated Classified Statement of Financial Position. ANNUAL REPORT 2023 13 —Financial reports —Financial statements 18 19 (d) Frequent passenger program The Company maintains the following loyalty programs: LATAMPASS’s and LATAMPASS’s Brazil, whose objective is building customer loyalty through the delivery of miles or points. These programs give their frequent passengers the possibility of earning LATAMPASS’s miles or points, which grant the right to a selection of both air and non-air awards. Additionally, the Company sells the LATAMPASS miles or points to financial and non-financial partners through commercial alliances to award miles or points to their customers. To reflect the miles and points earned, the loyalty program mainly includes two types of transactions that are considered revenue arrangements with multiple performance obligations: (1) Passenger Ticket Sales Earning miles or points (2) miles or points sold to financial and non-financial partner. (1) Passenger Ticket Sales Earning Miles or Points. In this case, the miles or points are awarded to customers at the time that the company performs the flight. To value the miles or points earned with travel, we consider the quantitative value a passenger receives by redeeming miles for a ticket rather than paying cash, which is referred to as Equivalent Ticket Value ("ETV"). Our estimate of ETV is adjusted for miles and points that are not likely to be redeemed ("breakage"). The balance of miles and points that are pending to redeem are included within deferred revenue. (2) Miles sold to financial and non-financial partners To value the miles or points earned through financial and non-financial partners, the performance obligations with the client are estimated separately. To calculate these performance obligations, different components that add value in the commercial contract must be considered, such as marketing, advertising and other benefits, and finally the value of the points awarded to customers based on our ETV. The value of each of these components is finally allocated in proportion to their relative prices. The performance obligations associated with the valuation of the points or miles earned become part of the Deferred Revenue, and the remaining performance obligations are recorded as revenue when the miles or points are delivered to the client. When the miles and points are exchanged for products and services other than the services provided by the Company, the income is recognized immediately; when the exchange is made for air tickets of any airline of LATAM Airlines Group S.A. and Subsidiaries, the income is deferred until the air transport service is provided. The miles and points that the Company estimates will not be exchanged are recognized in the results based on the consumption pattern of the miles or points effectively exchanged by customers. The Company uses statistical models to estimate the probability of exchange, which is based on historical patterns and projections. 2.20. Leases The Company recognizes contracts that meet the definition of a lease as a right of use asset and a lease liability on the date when the underlying asset is available for use. Right of use assets are measured at cost including the following: The amount of the initial measurement of the lease liability; Lease payment made at or before commencement date; Initial direct costs, and - - - - Restoration costs. The right of use assets are recognized in the statement of financial position in Property, plant and equipment. Lease liabilities include the net present value of the following payments: Fixed payments including in substance fixed payment. - - Variable lease payments that depend on an index or a rate; - The exercise price of a purchase option, if it is reasonably certain that the option will be exercised. The discount rate that LATAM Airlines Group S.A. uses is the interest rate implicit in the lease, if that rate can be readily determined. This is the rate of interest that causes the present value of (a) lease payments and (b) the unguaranteed residual value to equal the sum of (i) the fair value of the underlying asset and (ii) any initial direct costs of the lessor. 181 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) acquisition with the manufacturers. That the Company initially acquired the aircraft or took an important part in the process of direct (b) option of the aircraft at the end of the lease term. Due to the contractual conditions, it is virtually certain that the Company will execute the purchase Since these financing agreements are “substantially purchases” and not leases, the related liability is considered as a financial debt classified under IFRS 9 and continues to be presented within the “Other financial liabilities” described in Note 18. On the other hand, the aircraft are presented in Property, Plant and Equipment, as described in Note 16, as “own aircraft”. The Group qualifies as sale and lease transactions, operations that lead to a sale according to IFRS 15. More specifically, a sale is considered as such if there is no option to purchase the goods at the end of the lease term. If the sale by the seller-lessee is classified as a sale in accordance with IFRS 15, the underlying asset is derecognized, and a right-of-use asset equal to the portion retained proportionally of the amount of the asset is recognized. If the sale by the seller-lessee is not classified as a sale in accordance with IFRS 15, the transferred assets are kept in the financial statements and a financial liability equal to the sale price is recognized (received from the buyer-lessor). 2.21. Non-current assets or disposal groups classified as held for sale Non-current assets (or disposal groups) classified as assets held for sale are shown at the lesser of their book value and the fair value less costs to sell. 2.22. Maintenance The costs incurred for scheduled heavy maintenance of the aircraft’s fuselage and engines are capitalized and depreciated until the next maintenance. The depreciation rate is determined on technical grounds, according to the use of the aircraft expressed in terms of cycles and flight hours. In case of aircraft include in property, plant and equipment, these maintenance cost are capitalized as Property, plant and equipment, while in the case of aircraft on right of use, a liability is accrued based on the use of the main components is recognized, since a contractual obligation with the lessor to return the aircraft on agreed terms of maintenance levels exists. These are recognized as Cost of sales. Additionally, some contracts that comply with the definition of lease establish the obligation of the lessee to make deposits to the lessor as a guarantee of compliance with maintenance and return conditions. These deposits, often called maintenance reserves, accumulate until a major maintenance is performed. Once made, the recovery is requested to the lessor. At the end of the contract period, there is comparison between the reserves that have been paid and required return conditions, and compensation between the parties are made if applicable. ANNUAL REPORT 2023 13 —Financial reports —Financial statements 20 21 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: Positions as of December 31, 2022 (*) Q123 Q223 Maturities Q323 Q423 Total Percentage of coverage over the expected volume of consumption 24% 24% 15% 5% 17% (*) The percentage shown in the table considers all the hedging instruments (swaps and options). Sensitivity analysis A drop in fuel price positively affects the Company through a reduction in costs. However, also negatively affects contracted positions as these are acquired to protect the Company against the risk of a rise in price. Therefore, the policy is to maintain a hedge-free percentage in order to be competitive in the event of a drop in price. The current hedge positions are booked as cash flow hedge contracts, so a variation in the fuel price has an impact on the Company’s net equity. The following table shows the sensitivity of financial instruments according to reasonable changes in the price of fuel and their effect on equity. The calculations were made considering a parallel movement of US$ 5 per barrel in the underlying reference price curve at the end of December 2023 and the end of December 2022. The projection period was defined until the end of the last fuel hedging contract in force, being the last business day of the second half of 2024. Benchmark price (US$ per barrel) Positions as of December 31, 2023 effect on Equity (MUS$) Positions as of December 31, 2022 effect on Equity (MUS$) 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. +5 -5 +10.8 -10.7 +2.2 -2.3 Mitigation: To hedge the fuel-price risk exposure, the Company operates with derivative instruments (swaps and options) whose underlying assets may be different from Jet Fuel, such as West Texas Intermediate (“WTI”) crude, Brent (“BRENT”) crude and distillate Heating Oil (“HO”), which may have a high correlation with Jet Fuel and greater liquidity. Fuel Hedging Results: During the period ended December 31, 2023, the Company recognized gains of US$15.7 million for fuel hedging net of premiums in the costs of sales for the year. During the period ended December 31, 2022, the Company recognized gains of US$18.8 million for fuel hedging net of premiums in the costs of sales for the year. As of December 31, 2023, the market value of the fuel positions amounted to US$22.10 million (positive). At the end of December 2022, this market value was US$12.6 million (positive). The following tables show the level of hedge for different periods: Positions as of December 31, 2023 (*) Percentage of coverage over the expected volume of consumption Q124 Q224 Maturities Q324 Q424 Total 35% 32% 30% 22% 30% Given the fuel hedging structure for the year of 2023, which considers a portion free of hedges, a vertical drop of 5 dollars in the JET reference price (considered as the monthly daily average), would have meant an impact of approximately US$ 131.6 million lower fuel cost. For the same period, a vertical rise of 5 dollars in the JET reference price (considered as the monthly daily average), would have meant an approximate impact of US$ 131.3 million in higher fuel costs. (ii) Foreign exchange rate risk: Exposure: The functional currency of the financial statements of the Parent Company is the US dollar, so that the risk of the Transactional and Conversion exchange rate arises mainly from the Company's business, strategic and accounting operating activities that are expressed in a monetary unit other than the functional currency. The subsidiaries of LATAM are also exposed to foreign exchange risk whose impact affects the Company's Consolidated Income. The largest operational exposure to LATAM's exchange risk comes from the concentration of businesses in Brazil, which are mostly denominated in Brazilian real (R$), and are actively managed by the Company. At a lower concentration, the Company is also exposed to the fluctuation of other currencies, such as: Euro, Pound sterling, Australian dollar, Colombian peso, Chilean peso, Argentine peso, Paraguayan guarani, Mexican peso, Peruvian Sol and New Zealand dollar. Mitigation: The Company mitigates currency risk exposures by contracting hedging or non-hedging derivative instruments or through natural hedges or execution of internal operations. 182 ANNUAL REPORT 202313 —Financial reports —Financial statements 22 23 Exchange Rate Hedging Results (FX): As of December 31, 2023, the Company recognized losses of US$10.1 million for FX hedging derivatives net of premiums reflected in the cost of sale. At the end of December of 2022, the Company recognize gains for US$5.2 million for FX hedging derivatives cost of sales. As of December 31, 2023, the market value of hedging FX derivative positions is US$1.5 million (negative). As of December 31, 2022, the market value of the hedging FX derivative positions was US$ 0.2 million (positive). As of December 31, 2023, the Company has current hedging FX derivatives for US$414 million. . As of December 31, 2022, the Company holds current hedging FX derivatives of US$108 million. As of December 31, 2023, the Company does not maintain for FX non-hedging derivatives. At the end of December of 2022, the Company recognized losses of US$1.8 million in non-hedging FX derivatives net of premiums reflected in Other gains/(losses). Sensitivity analysis: A depreciation of the R$/US$ exchange rate, negatively affects the Company's operating cash flows, however, also positively affects the value of the positions of derivatives contracted. The following table shows the sensitivity of current hedging FX derivative instruments according to reasonable changes in the exchange rate and its effect on equity. Appreciation (depreciation) of R$/US$ Effect on equity as of December 31, 2023 (MUS$) Effect on equity as of December 31, 2022 (MUS$) -10% +10% -10.0 +19.0 -2.9 +3.0 Impact of Exchange rate variation in the Consolidated Income Statements (Foreign exchange gains/losses). In the case of TAM S.A., whose functional currency is the Brazilian real, a large part of its liabilities is expressed in US dollars. Therefore, when converting financial assets and liabilities, from dollar to real, they have an impact on the result of TAM S.A., which is consolidated in the Company's Income Statement. In order to reduce the impact on the Company's result caused by appreciations or depreciations of R$/US$, the Company carries out internal operations to reduce the net exposure in US$ for TAM S.A. The following table shows the impact of the Exchange Rate variation on the Consolidated Income Statement when the R$/US$ exchange rate appreciates or depreciates by 10%: Appreciation (depreciation) of R$/US$ Effect on Income Statement for the year ended December 31, 2023 (MUS$) Effect on Income Statement for the year ended December 31, 2022 (MUS$) -10% +10% +6.6 -6.6 +70.7 -70.7 Impact of the exchange rate variation in the Equity, from translate the subsidiaries financial statements into US Dollars (Cumulative Translate Adjustment). Since the functional currency of TAM S.A. and Subsidiaries is the Brazilian real, the Company presents the effects of the exchange rate fluctuations in Other comprehensive income (Cumulative Translation Adjustment) by converting the Statement of financial position and Income statement of TAM S.A. and Subsidiaries from their functional currency to the U.S. dollar, which is the presentation currency of the consolidated financial statement of LATAM Airlines Group S.A. and Subsidiaries. 183 The following table shows the impact on the Cumulative Translation Adjustment included in Other comprehensive income recognized in Total equity in the case of an appreciation or depreciation 10% the exchange rate R$/US$: Appreciation (depreciation) of R$/US$ Effect at December 31, 2023 MUS$ Effect at December 31, 2022 MUS$ -10% +10% +327.01 -267.56 +98.11 -80.28 (iii) Interest -rate risk: Exposure: The Company has exposure to fluctuations in interest rates affecting the markets future cash flows of the assets, and current and future financial liabilities. The Company is mainly exposed to the Secured Overnight Financing Rate (“SOFR”) and other less relevant interest rates such as Brazilian Interbank Certificates of Deposit (“CDI”) . Due to the fact that the publication of LIBOR ceased by June 30th 2023, the company has effectively migrated to SOFR as an alternative rate, which was fully materialized on September 30th 2023. Of the company's financial debt subject to variable rates, all of the contracts maintain exposure to the SOFR reference rate. Mitigation: Currently, 50% (52% as of December 31, 2022) of the debt is fixed against fluctuations in interest rates. The variable debt is indexed to the reference rate based on SOFR. Likewise, most of the company's liquidity is denominated in dollars and indexed to a return rate similar and with alike fluctuation to the SOFR rate, which helps reduce exposure. Rate Hedging Results: During the period ended December 31, 2023, the Company recognized losses of US$1.8 million (negative) corresponding to the recognition for premiums paid. As of December 31, 2023, the Company has no interest rate derivatives outstanding , at the end of December 2022 this market value was US$8.8 million (positive). As of December 31, 2023, the Company recognized a decrease in the right-of-use asset due to the expiration of derivatives for US$ 14.9 million associated with the aircraft lease. On this same date, a lower depreciation expense of the right-of-use asset for US$ 1.1 million (positive) is recognized. At the end of December 2022, the Company recognized US$ 0.1 million for this same concept. As of December 31, 2023, the Company settled derivatives for US$ 14.8 million associated with hedges of leased aircraft. Sensitivity analysis: The following table shows the sensitivity of changes in financial obligations that are not hedged against interest-rate variations. These changes are considered reasonably possible, based on current market conditions each date. ANNUAL REPORT 2023 13 —Financial reports —Financial statements 24 25 Increase (decrease) of future curve SOFR rate Positions as of December 31, 2023 effect on Income (Loss) before taxes (MUS$) Positions as of December 31, 2022 effect on Income (Loss) before tax (MUS$) +100 basis points -100 basis points -20.27 +20.27 -22.64 +22.64 A large part of the derivatives of current rates are recorded as cash flow hedge contracts, therefore, a variation in interest rates has an impact on the market value of the derivatives, whose changes affect the equity of the entity. The calculations were made by vertically increasing (decreasing) 100 base points of the interest rate curve, both scenarios being reasonably possible according to historical market conditions. Increase (decrease) interest rate curve +100 basis points -100 basis points Positions as of December 31, 2023 effect on equity (MUS$) Positions as of December 31, 2022 effect on equity (MUS$) — — +6.9 -8.2 The sensitivity calculation hypothesis must assume that the forward curves of interest rates will not necessarily reflect the real value of the compensation of the flows. In addition, the interest rate structure is dynamic over time. During the periods presented, the Company has recorded US$ 0.1 million (negative) for ineffectiveness in the consolidated income statement for this type of coverage. (b) Credit risk Credit risk occurs when the counterparty does not comply with its obligations to the Company under a specific contract or financial instrument, resulting in a loss in the market value of a financial instrument (only financial assets, not liabilities). The customer portfolio as of December 31, 2023 has experienced an increased by 24% compared to the balance as of December 31, 2022, mainly due to an increase in passenger transportation operations (travel agencies and corporate) that increased by 22% in its sales, mainly affecting the payment methods credit card 29%, and cash sales 9%. In relation to the cargo business, it presented a decrease in its operations of 5% compared to December 2022. There was especial consideration for the Expected Credit Loss calculation for the clients with balance at the year end that management considered risky. The Expected Credit Loss at the end of December 2023 had a decrease 4% compared to the end of December 2022, as a result of the decrease in the portfolio due to collection, and due to the application of write-offs. The Company is exposed to credit risk due to its operational activities and its financial activities, including deposits with banks and financial institutions, investments in other types of instruments, exchange rate transactions and derivatives contracts. To reduce the credit risk related to operational activities, the company has implemented credit limits to limit the exposure of its debtors, which are permanently monitored for the LATAM network, when deemed necessary, agencies have been blocked for cargo and passenger businesses. (i) Financial activities Cash surpluses that remain after the financing of assets necessary for the operation are invested according to credit limits approved by the Company’s Board, mainly in time deposits with different financial institutions, private investment funds and short-term mutual funds. These investments are booked as Cash and cash equivalents and other current financial assets. In order to reduce counterparty risk and to ensure that the risk assumed is known and managed by the Company, investments are diversified among different banking institutions (both local and international). The Company evaluates the credit standing of each counterparty and the levels of investment, based on (i) its credit rating, and (ii) investment limits according to the Company’s level of liquidity. According to these two 184 parameters, the Company chooses the most restrictive parameter of the previous two and based on this, establishes limits for operations with each counterparty. The Company has no guarantees to mitigate this exposure. (ii) Operational activities The Company has four large sales “clusters”: travel agencies, cargo agents, airlines and credit-card administrators. The first three are governed by International Air Transport Association (“IATA”), international organization comprising most of the airlines that represent over 90% of scheduled commercial traffic and one of its main objectives is to regulate the financial transactions between airlines and travel agents and cargo. When an agency or airline does not pay their debt, it is excluded from operating with IATA’s member airlines. In the case of credit-card administrators, they are fully guaranteed by 100% by the issuing institutions. Under certain of the Company’s credit card processing agreements, the financial institutions have the right to require that the Company maintain a reserve equal to a portion of advance ticket sales that have been processed by that financial institution, but for which the Company has not yet provided the air transportation. Additionally, the financial institutions have the ability to require additional collateral reserves or withhold payments related to receivables to be collected if increased risk is perceived related to liquidity covenants in these agreements or negative balances occur. The exposure consists of the term granted, which fluctuates between 1 and 45 days. One of the tools the Company uses for reducing credit risk is to participate in global entities related to the industry, such as IATA, Business Sales Processing (“BSP”), Cargo Account Settlement Systems (“CASS”), IATA Clearing House (“ICH”) and banks (credit cards). These institutions fulfill the role of collectors and distributors between airlines and travel and cargo agencies. In the case of the Clearing House, it acts as an offsetting entity between airlines for the services provided between them. A reduction in term and implementation of guarantees has been achieved through these entities. The sales invoicing of TAM Linhas Aéreas S.A. related with cargo agents for domestic transportation in Brazil is done directly by TAM Linhas Aereas S.A. Credit quality of financial assets The external credit evaluation system used by the Company is provided by IATA. Internal systems are also used for particular evaluations or specific markets based on trade reports available on the local market. The internal classification system is complementary to the external one, i.e. for agencies or airlines not members of IATA, the internal demands are greater. To reduce the credit risk associated with operational activities, the Company has established credit limits to abridge the exposure of their debtors which are monitored permanently (mainly in case of operational activities of TAM Linhas Aéreas S.A. with travel agents). The bad-debt rate in the principal countries where the Company has a presence is insignificant. (c) Liquidity risk Liquidity risk represents the risk that the Company does not have sufficient funds to pay its obligations. Due to the cyclical nature of its business, the operation and investment needs, along with the need for financing, the Company requires liquid funds, defined as Cash and cash equivalents plus other short-term financial assets, to meet its payment obligations. The balance of liquid funds, future cash generation and the ability to obtain financing, provide the Company with alternatives to meet future investment and financing commitments. As of December 31, 2023, the balance of liquid funds is US$1,715 million ((US$ 1,217 million as of December 31, 2022), which are invested in short-term instruments through financial entities with a high credit rating 26 classification. As of December 31, 2023, LATAM maintains engaged two Revolving Credit Facility for a total of US$1,100 million, one for an amount of US$600 million and another for an amount of US$500 million, which are fully available. The first of these lines is secured by and subject to the availability of certain collateral (i.e. aircraft, engines and spare parts). The second one, is secured by certain intangibles assets of the Company, which are shared with other Chapter 11 exit financing. ANNUAL REPORT 2023 13 —Financial reports —Financial statements 27 Class of liability for the analysis of liquidity risk ordered by date of maturity as of December 31, 2023 Debtor: LATAM Airlines Group S.A. Tax No. 89.862.200-2 Chile. Tax No. Creditor Creditor country Currency Up to 90 days ThUS$ More than 90 days to one year ThUS$ More than one to three years ThUS$ More than three to five years ThUS$ More than five years ThUS$ Total ThUS$ Nominal value ThUS$ Amortization Annual Effective rate Nominal rate % % U.S.A. US$ 44,721 127,878 302,953 1,192,355 — 1,667,907 1,089,000 Quarterly 20.31 15.04 Bank loans 0-E GOLDMAN SACHS Obligations with the public 97.036.000-K SANTANDER 0-E WILMINGTON TRUST COMPANY Chile U.S.A. UF US$ 97.036.000-K SANTANDER Chile US$ Guaranteed obligations 0-E 0-E BNP PARIBAS WILMINGTON TRUST COMPANY U.S.A. U.S.A. US$ US$ Other guaranteed obligation 0-E 0-E 0-E EXIM BANK MUFG CREDIT AGRICOLE U.S.A. U.S.A. France Financial lease 0-E 0-E 0-E 0-E Others loans NATIXIS US BANK EXIM BANK France U.S.A. U.S.A. BANK OF UTAH U.S.A. US$ US$ US$ US$ US$ US$ US$ — — — 3,230 6,409 6,409 182,647 198,695 160,214 To the expiration 2.00 2.00 153,813 307,625 697,438 793,625 1,952,501 1,150,000 To the expiration — — — 6 6 3 To the expiration 15.00 1.00 13.38 1.00 5,940 17,082 41,319 40,578 120,730 225,649 171,704 Quarterly 6.98 6.98 5,948 16,928 42,098 40,736 54,056 159,766 132,585 Quarterly/Monthly 8.76 8.76 452 12,919 1,348 37,926 43,531 16,649 43,494 — 6,451 33,576 75,714 243,842 10,653 17,984 3,262 5,891 30,443 50,411 9,389 17,705 73,474 17,681 216,015 47,590 70,443 — 148,582 54,357 16,665 — — 94,995 — 75,118 117,597 105,490 67,494 99,109 64,102 Quarterly Quarterly 359,583 266,768 To the expiration 280,008 86,076 452,366 243,140 215,357 84,177 413,072 172,582 Quarterly Quarterly Quarterly Monthly 2.29 7.11 9.43 7.58 4.41 4.13 2.05 7.11 9.43 7.58 3.16 3.31 10.71 10.71 0-E OTHERS (*) Chile US$ 104 — — — — 104 104 To the expiration — — TOTAL 114,325 499,729 1,191,058 2,538,234 1,455,439 5,798,785 4,018,777 185 (•) Obligation with creditors for executed letters of credit. ANNUAL REPORT 2023 13 —Financial reports —Financial statements 28 Class of liability for the analysis of liquidity risk ordered by date of maturity as of December 31, 2023 Debtor: TAM S.A. Tax No. 02.012.862/0001-60, Brazil. Tax No. Creditor Creditor country Currency Up to 90 days ThUS$ More than 90 days to one year ThUS$ More than one to three years ThUS$ More than three to five years ThUS$ More than five years ThUS$ Total ThUS$ Nominal value ThUS$ Amortization Annual Effective rate % Nominal rate % Financial leases 0-E NATIXIS France US$ 510 1,530 4,080 9,886 — 16,006 16,006 Quarterly — — TOTAL 510 1,530 4,080 9,886 — 16,006 16,006 186 ANNUAL REPORT 2023 13 —Financial reports —Financial statements 29 Class of liability for the analysis of liquidity risk ordered by date of maturity as of December 31, 2023 Debtor: LATAM Airlines Group S.A. Tax No. 89.862.200-2, Chile. Tax No. Creditor Creditor country Currency Lease Liability Up to 90 days ThUS$ More than 90 days to one year ThUS$ More than one to three years ThUS$ More than three to five years ThUS$ More than five years ThUS$ Total ThUS$ Nominal value ThUS$ Amortization Annual Effective rate Nominal rate % % 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$ CLP UF COP EUR BRL MXN 2,523 19 557 122 63 2,314 24 Trade and other accounts payables - OTHERS OTHERS US$ CLP BRL Other currency 846,541 44,593 309,999 178,740 Accounts payable to related parties currents Qatar Airways Foreign Qatar Foreign Delta Air Lines, Inc. U.S.A US$ US$ — — 7,276 57 1,255 308 101 6,871 71 7,063 8,072 7,671 5,522 2,312 5,132 14,863 94 2,906 266 172 15,177 8 — — — — — — 846 — 2,426 148 23 14,438 — — — — — — — 1,404 — 5,099 — — 25,742 — — — — — — — 26,912 170 12,243 844 359 64,542 103 25,680 135 11,097 667 296 35,841 84 853,604 52,665 317,670 709,933 64,317 409,474 184,262 118,189 2,312 2,312 5,132 5,132 Total Total consolidated 1,525,094 471,265 1,150,168 946,119 1,717,507 5,810,153 4,277,352 1,639,929 972,524 2,345,306 3,494,239 3,172,946 11,624,944 8,312,135 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 187 ANNUAL REPORT 2023 13 —Financial reports —Financial statements 30 Class of liability for the analysis of liquidity risk ordered by date of maturity as of December 31, 2022 Debtor: LATAM Airlines Group S.A. Tax No. 89.862.200-2 Chile. Tax No. 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 ThUS$ ThUS$ ThUS$ ThUS$ ThUS$ Total ThUS$ Nominal value ThUS$ Amortization Annual Effective rate % Nominal rate % Bank loans 97.023.000-9 GOLDMAN SACHS U.S.A. 0-E SANTANDER Spain Obligations with the public 97.030.000-7 SANTANDER 0-E WILMINGTON TRUST COMPANY Chile U.S.A. 97.036.000-K SANTANDER Chile Guaranteed obligations 0-E BNP PARIBAS 0-E WILMINGTON TRUST COMPANY Other guaranteed obligation 0-E EXIM BANK MUFG CREDIT AGRICOLE CITIBANK BNP PARIBAS NATIXIS US BANK PK AIRFINANCE EXIM BANK BANK OF UTAH 0-E 0-E Financial lease 0-E 0-E 0-E 0-E 0-E 0-E 0-E Others loans 0-E U.S.A. U.S.A. U.S.A. U.S.A. France U.S.A. U.S.A. France U.S.A. U.S.A. U.S.A. U.S.A. US$ US$ UF US$ US$ US$ US$ US$ US$ US$ US$ US$ US$ US$ US$ US$ US$ US$ 32,071 19,164 122,278 55,288 323,125 1,361,595 — — — — 1,839,069 1,100,000 Quarterly 74,452 70,951 Quarterly — — — 3,136 6,271 6,271 178,736 194,414 156,783 At Expiration 152,531 307,625 757,625 887,250 2,105,031 1,150,000 At Expiration — — — 6 6 3 At Expiration 6,692 14,705 39,215 39,215 138,345 238,172 184,198 Quarterly 3,839 13,465 45,564 43,444 75,505 181,817 141,605 Quarterly / Monthly 394 13,091 1,171 38,914 12,119 69,916 21,111 60,857 5,769 31,478 70,890 267,615 — — — — — — — 70,787 129,582 — — — — 193,551 50,649 157,978 145,184 95,652 121,921 86,612 Quarterly 112,388 Quarterly 375,752 275,000 At Expiration 12,839 29,183 315,226 158,236 13,579 502,316 266,668 12,514 28,165 239,138 152,693 Quarterly Quarterly Quarterly Quarterly 12,590 Quarterly 446,509 182,237 Quarterly Monthly 6,995 6,978 9,864 18,072 1,749 3,176 5,878 5,844 20,662 29,468 54,088 5,165 9,681 17,651 — 1,543 75,525 86,076 6,665 137,930 47,306 18.46 7.26 2.00 15.00 1.00 5.76 8.20 2.01 6.23 8.24 6.19 5.99 6.44 4.06 5.97 3.58 13.38 7.26 2.00 13.38 1.00 5.76 8.20 1.78 6.23 8.24 5.47 5.39 6.44 2.85 5.97 2.79 10.45 10.45 OTHERS (*) Chile TOTAL 2,028 — — — — 2,028 2,028 At Expiration — — 135,760 575,525 1,229,770 2,811,863 1,773,443 6,526,361 4,353,414 188 (•) Obligation with creditors for executed letters of credit. ANNUAL REPORT 2023 13 —Financial reports —Financial statements 31 Class of liability for the analysis of liquidity risk ordered by date of maturity as of December 31, 2022 Debtor: TAM S.A. Tax No. 02.012.862/0001-60, Brazil. Tax No. Creditor Creditor country Currency Financial Leases 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 ThUS$ ThUS$ ThUS$ ThUS$ ThUS$ Total ThUS$ Nominal value ThUS$ Amortization Annual Effective rate % Nominal rate % 0-E NATIXIS France US$ 510 1,530 4,080 4,080 7,846 18,046 18,046 Semiannual /Quarterly 7.23 7.23 Bank loans 0-E MERRILL LYNCH CREDIT PRODUCTS, LLC TOTAL Brazil BRL 304,549 — — — — 304,549 304,549 Monthly 3.95 3.95 305,059 1,530 4,080 4,080 7,846 322,595 322,595 ´ 189 ANNUAL REPORT 2023 13 —Financial reports —Financial statements 32 Class of liability for the analysis of liquidity risk ordered by date of maturity as of December 31, 2022 Debtor: LATAM Airlines Group S.A. Tax No. 89.862.200-2, Chile. Tax No. 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 ThUS$ ThUS$ ThUS$ ThUS$ ThUS$ Total ThUS$ Nominal value ThUS$ Amortization Annual Effective rate % Nominal rate % Lease Liability AIRCRAFT OTHERS OTHER ASSETS OTHERS US$ US$ CLP UF COP EUR BRL 80,602 1,727 20 574 76 84 250,297 8,080 34 1,568 227 253 845,215 20,641 69 3,007 301 246 776,431 1,094,935 3,047,480 2,134,968 6,251 — 2,515 — 24 1,763 — 6,273 — — 38,462 123 13,937 604 607 35,157 111 11,703 518 571 2,064 6,192 14,851 12,491 28,625 64,223 33,425 Trade and other accounts payables OTHERS OTHERS US$ CLP BRL Other currency 80,557 168,393 370,772 58,342 1,231 5,242 583,118 3,935 Accounts payable to related parties currents Foreign Inversora Aeronáutica Argentina S.A. Foreign Patagonia Seafarms Argentina U.S.A US$ US$ 5 7 — — — — — — — — — — — — — — — — — — — — 138,899 169,624 376,014 138,899 169,624 376,014 587,053 587,053 5 7 5 7 Total Total consolidated 1,287,999 1,728,818 335,401 912,456 884,330 797,712 1,131,596 4,437,038 3,488,055 2,118,180 3,613,655 2,912,885 11,285,994 8,164,064 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 190 ANNUAL REPORT 2023 13 —Financial reports —Financial statements 33 34 The following table shows the classification of financial instruments at fair value, depending on the level of information used in the assessment: As of December 31, 2023 As of December 31, 2022 Fair value measurements using values considered as Fair value measurements using values considered as Fair value ThUS$ Level I ThUS$ Level II ThUS$ Level III ThUS$ Fair value ThUS$ Level I ThUS$ Level II ThUS$ Level III ThUS$ 89,706 89,706 89,706 89,706 — — — — 95,452 95,452 95,452 95,452 — — 22,136 — 22,136 — 21,601 — 21,601 — — — — 8,816 — 8,816 22,136 — 22,136 — 12,594 — 12,594 — — — — 191 — 191 Assets Cash and cash equivalents Short-term mutual funds Other financial assets, current Fair value interest rate derivatives Fair value of fuel derivatives Fair value of foreign currency derivative Liabilities Other financial liabilities, current Fair value of foreign currency derivatives 1,544 — 1,544 1,544 — 1,544 — — — — — — — — — — — — — — — — The Company has fuel, interest rate and exchange rate hedging strategies involving derivatives contracts with different financial institutions. As of December 31, 2023, the Company maintains guarantees for US$11.0 million corresponding to derivative transactions. The increase is due to: i) Increase in the number of hedging contracts and ii) changes in fuel prices, exchange rates and interest rates. At the end of 2022, the Company had guarantees for US$7.5 million corresponding to derivative transactions. 3.2. Capital risk management The objectives of the Company, in relation to capital management are: (i) to meet the minimum equity requirements and (ii) to maintain an optimal capital structure. The Company monitors contractual obligations and regulatory requirements in the different countries where the group's companies are domiciled to ensure faithful compliance with the minimum equity requirement, the most restrictive limit of which is to maintain positive liquid equity. Additionally, the Company periodically monitors the short and long term cash flow projections to ensure that it has sufficient cash generation alternatives to meet future investment and financing commitments. The international credit rating of the Company is the result of the ability to meet long-term financial commitments. As of December 31, 2023, the Company has a national rating of BBB- by Fitch, and international rating by Standard & Poor's of B with a positive outlook, and B1 with a stable outlook by Moody's. 3.3. Estimates of fair value. At December 31, 2023, the Company maintained financial instruments that should be recorded at fair value. These are grouped into two categories: 1. Derivative financial instruments: This category includes the following instruments: Interest rate derivative contracts, - - Fuel derivative contracts, - Currency derivative contracts. 2. Financial Investments: This category includes the following instruments: - Investments in short-term Mutual Funds (cash equivalent). The Company has classified the fair value measurement using a hierarchy that reflects the level of information used in the assessment. This hierarchy consists of 3 levels (I) fair value based on quoted prices in active markets for identical assets or liabilities, (II) fair value calculated through valuation methods based on inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices) and (III) fair value based on inputs for the asset or liability that are not based on observable market data. The fair value of financial instruments traded in active markets, such as investments acquired for trading, is based on quoted market prices at the close of the period using the current price of the buyer. The fair value of financial assets not traded in active markets (derivative contracts) is determined using valuation techniques that maximize use of available market information. Valuation techniques generally used by the Company are quoted market prices of similar instruments and / or estimating the present value of future cash flows using forward price curves of the market at period end. 191 ANNUAL REPORT 2023 13 —Financial reports —Financial statements 35 Additionally, at December 31, 2023, the Company has financial instruments which are not recorded at fair value. In order to meet the disclosure requirements of fair values, the Company has valued these instruments as shown in the table below: Cash and cash equivalents Cash on hand Bank balance Overnight Time deposits Other financial assets, current Other financial assets Trade debtors, other accounts receivable and Current accounts receivable Accounts receivable from entities related, current Other financial assets, non-current Accounts receivable, non-current As of December 31, 2023 Fair value Book value ThUS$ ThUS$ As of December 31, 2022 Fair value Book value ThUS$ ThUS$ 1,625,055 2,019 552,187 75,236 995,613 152,683 152,683 1,385,910 28 34,485 12,949 1,625,055 2,019 552,187 75,236 995,613 152,683 152,683 1,385,910 28 34,485 12,949 1,121,223 2,248 480,566 259,129 379,280 481,914 481,914 1,008,109 19,523 15,517 12,743 1,121,223 2,248 480,566 259,129 379,280 481,914 481,914 1,008,109 19,523 15,517 12,743 Other current financial liabilities Accounts payable for trade and other accounts payable, current Accounts payable to entities related, current Other financial liabilities, non current Accounts payable, non current 594,519 867,791 802,841 824,167 1,765,279 7,444 6,341,669 418,587 1,765,279 7,444 6,174,294 418,587 1,627,992 12 5,979,039 326,284 1,627,992 12 5,533,131 326,284 The book values of accounts receivable and payable are assumed to approximate their fair values, due to their short-term nature. In the case of cash on hand, bank balances, overnight, time deposits and accounts payable, non-current, fair value approximates their carrying values. The fair value of other financial liabilities is estimated by discounting the future contractual cash flows at the current market interest rate for similar financial instruments (Level II). In the case of Other financial assets, the valuation was performed according to market prices at period end. The book value of Other financial liabilities, current or non-current, do not include lease liabilities.. NOTE 4 - ACCOUNTING ESTIMATES AND JUDGMENTS The Company has used estimates to value and record some of the assets, liabilities, revenue, expenses and commitments. Basically, these estimates refer to: (a) Impairment of Intangible asset with indefinite useful life Management conducts an impairment test annually or more frequently if events or changes in circumstances indicate potential impairment. An impairment loss is recognized for the amount by which the carrying amount of the cash generating unit (CGU) exceeds its recoverable amount. Management’s value-in-use calculations included significant judgments and assumptions relating to revenue growth rates, exchange rates, discount rates, inflation rates, fuel price. The estimation of these assumptions requires significant judgment by management as these variables are inherently uncertain; however, the assumptions used are consistent with the Company’s forecasts approved by management. Therefore, management evaluates and updates the estimates as necessary in light of conditions that affect these variables. The main assumptions used as well as the corresponding sensitivity analyses are shown in Note 15. 192 36 (b) Depreciation expense and impairment of Properties, Plant and Equipment The depreciation of assets is calculated based on a straight-line basis, except for certain technical components depreciated on cycles and hours flown. These useful lives are reviewed on an annual basis according to the Company’s future economic benefits associated with them. Changes in circumstances such as: technological advances, business model, planned use of assets or capital strategy may result in a useful life different from what has been estimated. When it is determined that the useful life of property, plant, and equipment must be reduced, as may occur in line with changes in planned usage of assets, the difference between the net book value and estimated recoverable value is depreciated, in accordance with the revised remaining useful life. The residual values are estimated according to the market value that the assets will have at the end of their life. The residual value and useful life of the assets are reviewed, and adjusted if necessary, once a year. When the value of an asset is greater than its estimated recoverable amount, its value is immediately reduced to its recoverable amount. The Company has concluded that the Properties, Plant and Equipment cannot generate cash inflows to a large extent independent of other assets, therefore the impairment assessment is made as an integral part of the only Cash Generating Unit maintained by the Company, Air Transport. The Company checks when there are signs of impairment, whether the assets have suffered any impairment losses at the Cash Generated Unit level. (c) Recoverability of deferred tax assets Management records deferred taxes on the temporary differences that arise between the tax bases of assets and liabilities and their amounts in the financial statements. Deferred tax assets on tax losses are recognized to the extent that it is probable that future tax benefits will be available to offset temporary differences. The Company applies significant judgment in evaluating the recoverability of deferred tax assets. In determining the amounts of the deferred tax asset to be accounted for, management considers tax planning strategies, historical profitability, projected future taxable income (considering assumptions such as: growth rate, exchange rate, discount rate and fuel price consistent with those used in the impairment analysis of the group's cash-generating unit) and the expected timing of reversals of existing temporary differences. (d) Air tickets sold that will not be finally used. The Company records the sale of air tickets as deferred revenue. Ordinary revenue from the sale of tickets is recognized in the statement of income when the passenger transportation service is provided or expires due to non-use. The Company evaluates the probability of expiration of air tickets on a monthly basis, based on the history of use. A change in this probability could impact revenue in the year in which the change occurs and in future years. As of December 31, 2023, deferred revenues associated with air tickets sold amount to ThUS$ 2,009,242 (ThUS$ 1,574,145 as of December 31, 2022). An hypothetical change of one percentage point in passenger behavior with respect to use would result an impact of up to ThUS$ 10,150 per month (ThUS$ 7,453 as of December 31, 2022). (e) Valuation of the miles and points awarded to the holders of the loyalty programs, pending use. As of December 31, 2023, deferred revenue associated with the LATAM Pass loyalty program from Spanish- speaking countries increased to ThUS$ 1,099,580 (ThUS$ 1,120,565 as of December 31, 2022). An hypothetical change of one percentage point in the probability of redemption would translate into a cumulative impact of ThUS$ 31,510 on the results of 2023 (ThUS$ 29,571 as of December 31, 2022). Deferred revenue associated with the LATAM Pass Brazil loyalty program increased to ThUS$179,151 as of December 31, 2023 (ThUS$ 140,486 as of December 31, 2022). An hypothetical change of one percentage point in the exchange probability would result in an accumulated impact of ThUS$ 5,125 on the results of 2023 (ThUS$ 3,772 as of December 31, 2022). Management used statistical models to estimate the miles and points awarded that will not be redeemed by the program’s members (breakage) which involved significant judgments and assumptions relating to the historical redemption and expiration activity and forecasted redemption and expiration patterns. ANNUAL REPORT 2023 13 —Financial reports —Financial statements 37 38 The Management in conjunction with an external specialist developed a predictive model of non -use miles or points, which allows to generate non-use rates on the basis of historical information, based on behavior of the accumulation, use and expiration of the miles or points. (f) Legal Contingencies In the case of known contingencies, the Company records a provision when it has a present obligation, whether legal or constructive, as a result of a past event, it is probable that an outflow of resources will be required to settle the obligation and a reliable estimate of the obligation amount can be made. The assessment of contingencies inherently involves the exercise of significant judgment and estimates of the outcome of future events, the likelihood of loss being incurred and when determining whether a reliable estimate of the loss can be made. The Company assesses its liabilities and contingencies based upon the best information available, uses the knowledge, experience and professional judgment to the specific characteristics of the known risks. This process facilitates the early assessment and quantification of potential risks in individual cases or in the development of contingent matters. If we are unable to reliably estimate the obligation or conclude no loss is probable but it is reasonably possible that a loss may be incurred, no provision is recorded but the contingency is disclosed in the notes to the consolidated financial statements. Company recognized as the present obligation under an onerous contract as a provision when a contract under which the unavoidable costs of meeting the obligations under the contract exceed the economic benefits expected to be received under it. (g) Leases During 2022, as a result of the arrival of new aircraft and the significant change in the flows of many current contracts, the Company evaluated the relevance in the current scenario of continuing to use the implicit rate, a methodology used in recent years, or whether it should in instead use a different approximation for calculating the rate. It was concluded that the implicit rate was not being able to reflect the economic environment in which the company operates, therefore it was not accurately representing the Company's indebtedness conditions. Because of this, all new contracts entered into from 2022 and all contracts that were modified from 2022 used the incremental rate. Existing contracts that remained unchanged continued using the original implicit discount rate. (i) Discount rate The discount rates used to calculate the aircraft lease debt correspond to: (i) For aircraft that did not have contractual changes associated with the exit from Chapter 11, the rate used was the implicit rate of the contract, this is the discount rate that results from the aggregate present value of the minimum lease payments and the unguaranteed residual value, and (ii) For aircraft that had contractual changes associated with exit from Chapter 11, the rate used was the incremental rate, this discount rate was calculated considering our recent aircraft debt negotiations, as well as publicly available data for instruments with similar characteristics when calculating our incremental borrowing rates. For assets other than aircraft, the estimated lessee's incremental borrowing rate, which is derived from information available at the lease inception date, was used to determine the present value of the lease payments. We consider our recent debt issuances as well as publicly available data for instruments with similar characteristics when calculating our incremental borrowing ratios. A decrease of one percentage point in our estimate of the rates used to determine the lease liabilities current registered fleet as of December 31, 2023 would increase the lease liability by approximately US$ 111 million. (ii) Lease term In determining the lease term, all facts and circumstances that create an economic incentive to exercise an extension option are considered. Extension options (or periods after termination options) are only included in the lease term if it is reasonably certain that the lease will be extended (or not terminated). This is reviewed if a significant event or significant change in circumstances occurs that affects this assessment and is within the lessee's control. In any case, it is possible that events that may take place in the future make it necessary to modify them in future periods, which would be done prospectively. 193 NOTE 5 - SEGMENT INFORMATION As of December 31, 2023, the Company considers that it has a single operating segment, Air Transport. This segment corresponds to the route network for air transport and is based on the way in which the business is managed, according to the centralized nature of its operations, the ability to open and close routes, as well as reassignment (airplanes, crew, personnel, etc.) within the network, which implies a functional interrelation between all of them, making them inseparable. This segment definition is one of the most common in the worldwide airline industry. The Company’s revenues by geographic area are as follows: Peru Argentina U.S.A. Europe Colombia Brazil Ecuador Chile Asia Pacific and rest of Latin America Income from ordinary activities Other operating income For the year ended at December 31, 2023 ThUS$ 2022 ThUS$ 988,908 244,413 1,044,822 800,897 662,263 5,006,377 332,801 1,898,150 661,910 11,640,541 148,641 858,957 206,856 1,058,107 768,980 540,231 3,724,466 248,454 1,514,645 441,825 9,362,521 154,286 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. ANNUAL REPORT 2023 13 —Financial reports —Financial statements 39 40 NOTE 6 - CASH AND CASH EQUIVALENTS Cash on hand Bank balances (1) Overnight Total Cash Cash equivalents Time deposits Mutual funds Total cash equivalents Total cash and cash equivalents As of December 31, 2023 ThUS$ As of December 31, 2022 ThUS$ 2,019 552,187 75,236 629,442 995,613 89,706 1,085,319 1,714,761 2,248 480,566 259,129 741,943 379,280 95,452 474,732 1,216,675 (1) As of December 31, 2023, within the item bank balances are ThUS$ 391,966 related to banks accounts that pay interest to the Company for the daily or monthly balances (ThUS$ 274,235 as of December 31, 2022) Cash and cash equivalents are denominated in the following currencies: Currency Argentine peso Brazilian real Chilean peso Colombian peso Euro US Dollar Mexican peso R.P. Chinese Yuan Other currencies Total As of December 31, 2023 ThUS$ As of December 31, 2022 ThUS$ 3,438 520,796 47,933 36,326 25,329 1,020,467 8,159 20,801 31,512 1,714,761 10,711 193,289 17,643 22,607 19,361 906,666 9,406 16,247 20,745 1,216,675 NOTE 7 - FINANCIAL INSTRUMENTS Financial instruments by category As of December 31, 2023 Assets Cash and cash equivalents Other financial assets, current Trade and others accounts receivable, current Accounts receivable from related entities, current Other financial assets, non current Accounts receivable, non current Total Liabilities Other financial liabilities, current Trade and others accounts payable, current Accounts payable to related entities, current Other financial liabilities, non-current Accounts payable, non-current Total As of December 31, 2022 Assets Cash and cash equivalents Other financial assets, current (*) Trade and others accounts receivable, current Accounts receivable from related entities, current Other financial assets, non current Accounts receivable, non current Total Measured at amortized cost ThUS$ 1,625,055 152,683 1,385,910 28 34,485 12,949 3,211,110 At fair value with changes in results ThUS$ Hedge derivatives ThUS$ 89,706 — — — — — 89,706 — 22,136 — — — — 22,136 Total ThUS$ 1,714,761 174,819 1,385,910 28 34,485 12,949 3,322,952 Measured at amortized cost ThUS$ At fair value with changes in results ThUS$ Hedge derivatives ThUS$ Total ThUS$ 594,519 1,765,279 7,444 6,341,669 418,587 9,127,498 — — — — — — 1,544 — — — — 596,063 1,765,279 7,444 6,341,669 418,587 1,544 9,129,042 Measured at amortized cost ThUS$ 1,121,223 481,637 1,008,109 19,523 15,517 12,743 2,658,752 At fair value with changes in results ThUS$ Hedge derivatives ThUS$ 95,452 277 — — — — 95,729 — 21,601 — — — — 21,601 Total ThUS$ 1,216,675 503,515 1,008,109 19,523 15,517 12,743 2,776,082 194 ANNUAL REPORT 2023 13 —Financial reports —Financial statements Liabilities Other financial liabilities, current Trade and others accounts payable, current Accounts payable to related entities, current Other financial liabilities, non-current Accounts payable, non-current Total 41 Measured at amortized cost ThUS$ At fair value with changes in results ThUS$ Hedge derivatives ThUS$ 802,841 1,627,992 12 5,979,039 326,284 8,736,168 — — — — — — — — — — — — Total ThUS$ 802,841 1,627,992 12 5,979,039 326,284 8,736,168 (*) The value presented as measured at amortized cost, mainly correspond to ThUS$ 340,008 of funds delivered as restricted advances (as described in Note 11) and guarantees delivered. NOTE 8 - TRADE AND OTHER ACCOUNTS RECEIVABLE CURRENT, AND NON-CURRENT ACCOUNTS RECEIVABLE Trade accounts receivable Other accounts receivable Total trade and other accounts receivable Less: Expected credit loss Total net trade and accounts receivable Less: non-current portion – accounts receivable Trade and other accounts receivable, current As of December 31, 2023 ThUS$ As of December 31, 2022 ThUS$ 1,185,792 277,845 1,463,637 (64,778) 1,398,859 (12,949) 1,385,910 952,625 135,459 1,088,084 (67,232) 1,020,852 (12,743) 1,008,109 The fair value of trade and other accounts receivable does not differ significantly from the book value. To determine the expected credit losses, the Company groups accounts receivable for passenger and cargo transportation depending on the characteristics of shared credit risk and maturity. Portfolio maturity Up to date From 1 to 90 days From 91 to 180 days From 181 to 360 days Over 360 days Total As of December 31, 2023 As December 31, 2022 Expected loss rate (1) % Gross book value (2) ThUS$ Impairment loss Provision ThUS$ Expected loss rate (1) % Gross book value (2) ThUS$ Impairment loss Provision ThUS$ 1% 3% 25% 44% 100% 1,022,845 102,977 8,350 7,868 43,752 1,185,792 (12,672) (2,989) (2,048) (3,491) (43,578) (64,778) 1% 3% 15% 79% 98% 745,334 142,780 8,622 8,269 47,620 952,625 (8,749) (3,758) (1,297) (6,565) (46,863) (67,232) (1) Corresponds to the consolidated expected rate of accounts receivable. (2) The gross book value represents the maximum credit risk value of trade accounts receivables. 195 42 Currency balances composition of Trade and other accounts receivable and non-current accounts receivable are as follow: Currency Argentine Peso Brazilian Real Chilean Peso Colombian Peso Euro US Dollar Australian Dollar Japanese Yen Pound Sterling Korean Won Other Currencies Total As of December 31, 2023 ThUS$ As of December 31, 2022 ThUS$ 13,827 825,749 75,050 12,720 90,699 344,347 5,097 4,695 3,390 5,882 17,403 1,398,859 25,559 523,467 36,626 6,779 12,506 376,900 9,808 2,802 9,149 6,337 10,919 1,020,852 Movements of the expected credit losses of Trade accounts receivables are as follows: Periods From January 1 to December 31, 2022 From January 1 to December 31, 2023 Opening balance ThUS$ Write-offs ThUS$ (Increase) Decrease ThUS$ Closing balance ThUS$ (81,004) (67,232) 5,966 7,122 7,806 (4,668) (67,232) (64,778) Once pre-judicial and judicial collection efforts are exhausted, the assets are written off against the allowance. The Company only uses the allowance method rather than direct write-off, to ensure control. The historical and current renegotiations are not significant, and the policy is to analyze case by case to classify them according to the existence of risk, determining they need to be reclassified to pre-judicial collection accounts. The maximum credit-risk exposure at the date of presentation of the information is the fair value of each one of the categories of accounts receivable indicated above. As of December 31, 2023 As of December 31, 2022 Gross exposure according to balance ThUS$ 1,185,792 277,845 Trade accounts receivable Other accounts receivable Gross impaired exposure ThUS$ (64,778) - Exposure net of risk concentrations ThUS$ 1,121,014 277,845 Gross exposure according to balance ThUS$ Gross Impaired exposure ThUS$ Exposure net of risk concentrations ThUS$ 952,625 135,459 (67,232) - 885,393 135,459 There are no relevant guarantees covering credit risk and these are valued when they are settled; no materially significant direct guarantees exist. Existing guarantees, if appropriate, are made through IATA. ANNUAL REPORT 2023 13 —Financial reports —Financial statements 43 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, 2023 ThUS$ As of December 31, 2022 ThUS$ Foreign Foreign Qatar Airways Delta Air Lines, Inc. 76.335.600-0 Parque de Chile S.A. Indirect shareholder Qatar Shareholder Related director 96.989.370-3 96.810.370-9 Foreign Rio Dulce S.A. (*) Related director Inversiones Costa Verde Ltda. y CPA. Related director Inversora Aeronáutica Argentina S.A. Total current assets Related director (b) Current accounts payable U.S.A. Chile Chile Chile Argentin a US$ US$ CLP CLP CLP ARS — — 2 — 25 1 28 257 19,228 2 1 35 — 19,523 Tax No. Related party Relationshi p Country of origin Currency Current liabilities As of December 31, 2023 ThUS$ As of December 31, 2022 ThUS$ Foreign Qatar Airways Foreign Delta Air Lines, Inc. Foreign Inversora Aeronáutica Argentina S.A. Foreign Patagonia Seafarms INC (*) Total current and non current liabilities Indirect shareholder Shareholder Related director Related director Qatar U.S.A. US$ US$ Argentina US$ U.S.A. US$ 2,312 5,132 — — 7,444 — — 5 7 12 (*) Related until November 2022. Transactions between related parties have been carried out on arm’s length conditions between interested and duly-informed parties. The transaction terms for the liabilities of the period 2023 correspond from 30 days to 1 year of maturity, and the nature of the settlement of transactions are monetary. 196 44 NOTE 10 - INVENTORIES The composition of Inventories is as follows: Technical stock (*) Non-technical stock (**) Total As of December 31, 2023 ThUS$ As of December 31, 2022 ThUS$ 540,342 52,538 592,880 438,717 39,072 477,789 (*) Correspond to spare parts and materials that will be used in both own and third-party maintenance services. (**) Consumption of on-board services, uniforms and other indirect materials These are valued at their average acquisition cost net of their obsolescence provision according to the following detail: Provision for obsolescence Technical stock Provision for obsolescence Non-technical stock Total As of December 31, 2023 ThUS$ As of December 31, 2022 ThUS$ 45,621 5,228 50,849 49,981 5,823 55,804 The resulting amounts do not exceed the respective net realization values. As of December 31, 2023, the Company registered ThUS$296,423 (ThUS$148,790 for the year ended December 31, 2022), the income statements, mainly related to on-board consumption and maintenance, which is part of the Cost of sales. ANNUAL REPORT 2023 45 NOTE 11 - OTHER FINANCIAL ASSETS (a) The composition of other financial assets is as follows: Current Assets As of December 31, 2023 ThUS$ As of December 31, 2022 ThUS$ Non-current assets As of December 31, 2023 ThUS$ As of December 31, 2022 ThUS$ Total Assets As of December 31, 2023 As of December 31, 2022 ThUS$ ThUS$ 31,624 22,340 9,736 1,273 41,360 23,613 12,829 — — 108,230 152,683 7,460 — 340,008 112,106 481,914 — 494 — 24,255 34,485 — 513 — 13,731 15,517 12,829 494 — 132,485 187,168 7,460 513 340,008 125,837 497,431 — 8,816 — — — 8,816 — 22,136 22,136 174,819 191 12,594 21,601 503,515 — — — 34,485 — — — 15,517 — 22,136 22,136 209,304 191 12,594 21,601 519,032 (1) Other financial assets Deposits in guarantee (aircraft) Guarantees for margins of derivatives Other investments Guaranteed debt advances Chapter 11 (*) Other guarantees given Subtotal of other financial assets (2) Hedging derivative asset Fair value of interest rate derivatives Fair value of foreign currency derivatives Fair value of fuel price derivatives Subtotal of derivative assets Total Other Financial Assets (*) As of December 31, 2022, there were ThUS$340,008 of funds delivered to an agent as restricted advances, the purpose of which is to settle the claims pending resolution existing at the exit of the Chapter 11 process. The different derivative hedging contracts maintained by the Company are described in Note 18. (b) The balances composition by currencies of the Other financial assets are as follows: Type of currency Brazilian real Chilean peso Colombian peso Euro U.S.A dollar Other currencies Total 197 As of December 31, 2023 ThUS$ As of December 31, 2022 ThUS$ 18,767 6,440 1,461 7,974 171,852 2,810 209,304 19,589 5,847 1,716 6,791 482,544 2,545 519,032 46 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, 2023 ThUS$ As of December 31, 2022 ThUS$ As of December 31, 2023 ThUS$ As of December 31, 2022 ThUS$ As of December 31, 2023 ThUS$ As of December 31, 2022 ThUS$ (a) Advance payments Aircraft insurance and other Others Subtotal advance payments (b) Contract assets (1) GDS costs Credit card commissions Travel agencies commissions Subtotal advance payments (c) Other assets Sales tax Other taxes Contributions to the International Aeronautical Telecommunications Society (“SITA”) Contributions to Aeronautical Service Companies Judicial deposits Subtotal other assets Total Other Non - Financial Assets 25,992 3,740 29,732 22,738 37,200 12,421 72,359 81,785 1,130 258 — — 83,173 185,264 27,122 13,039 40,161 9,530 26,124 12,912 48,566 100,665 1,688 258 — 26 102,637 191,364 — 5,740 5,740 — — — — — 1,773 1,773 — — — — 13,753 — 27,962 — 739 60 148,329 162,881 168,621 739 — 117,904 146,605 148,378 25,992 9,480 35,472 22,738 37,200 12,421 72,359 95,538 1,130 997 60 148,329 246,054 353,885 27,122 14,812 41,934 9,530 26,124 12,912 48,566 128,627 1,688 997 — 117,930 249,242 339,742 (1) Movement of Contracts assets: Initial balance ThUS$ Activation ThUS$ From January 1 to December 31, 2022 From January 1 to December 31, 2023 25,080 48,566 302,290 242,717 Cumulative translation adjustment Amortization Final balance ThUS$ (241,658) (220,957) (37,146) 2,033 48,566 72,359 ThUS$ ThUS$ ANNUAL REPORT 2023 47 NOTE 13 - NON-CURRENT ASSETS AND DISPOSAL GROUP CLASSIFIED AS HELD FOR SALE Non-current assets and disposal group classified as held for sale at December 31, 2023 and December 31, 2022, are detailed below: As of December 31, 2023 ThUS$ As of December 31, 2022 ThUS$ 100,658 2,012 — 102,670 64,483 21,552 381 86,416 Current assets Aircraft Engines and rotables Other assets Total The balances are presented at the lower of book value and fair value less cost to sell. The fair value of these assets was determined based on quoted prices in active markets for similar assets or liabilities. This is a level II measurement as per the fair value hierarchy set out in Note 3.3 (2). There were no transfers between levels for recurring fair value measurements during the exercise. Assets reclassified from Property, plant and equipment to Non-current assets or groups of assets for disposal classified as held for sale. During 2020, 11 Boeing 767 aircraft were transferred from the Property, plant and equipment, to Non-current assets item or groups of assets for disposal classified as held for sale. During 2021, the sale of 5 aircraft was completed. During the year 2022 the sale of 3 aircraft was finalized and during the year 2023 the sale of 1 aircraft was finalized. During 2021, associated with the fleet restructuring plan, 3 engines of the Airbus A350 fleet were transferred from the Property, plant and equipment to Non-current assets or groups of assets for disposal classified as held for sale, of which during the same year the sale of 1 engine was finalized. Additionally, during the year 2022, the sale of 1 engine was finalized and some materials and spare parts of this same fleet were transferred to Non- current assets or groups of assets for disposal classified as held for sale. During the year 2023, the sale of 1 engine, some spare parts, and materials was finalized. During 2022, 28 Airbus A319 family aircraft were transferred from Property, plant and equipment to Non- current assets or asset groups for disposal classified as held for sale. Additionally, adjustments for US$ 345 million of expenses were recognized within results as part of Other gains (losses) to record these assets at their net realizable value. During 2023, the engines associated with these aircraft were added, generating additional adjustments of US$39 million, which were recorded in the result as part of Other gains (losses), in order to register these assets at their net realizable value. During 2022, 6 aircraft and 8 engines of the Airbus A320 family were transferred from Property, plant and equipment to Non-current assets or asset groups for disposal classified as held for sale, and as of December 31, 2022, the sale of 3 aircrafts were finalized and as of December 31, 2023, the sale of 2 aircraft and 8 engines were finalized. Additionally, for the year ended December 31, 2022, adjustments for US$ 25 million of expenses were recognized to record these assets at their net realizable value, and since the fleet restructuring process had already been completed, these adjustments were recorded in results as part of Other expenses by function. During the year 2023, 6 Airbus A320 aircraft were transferred from the Property, Plant, and Equipment category to the Non-current Assets or Asset Groups held for sale category. Additionally, during the year 2023, adjustments of US$9 million in expenses were recognized to record these assets at their net realizable value. These adjustments were recorded in the results as part of Other expenses by function. During 2023, 1 Boeing 767 family aircraft was transferred from Property, plant and equipment to Non-current assets or asset groups for disposal classified as held for sale. Additionally, adjustments for US$ 3 million of expenses were recognized within results as part of Other expenses by function to record these assets at their net realizable value. 198 The detail of the fleet classified as non-current assets and disposal group classified as held for sale is as follows: 48 Aircraft Boeing 767 Airbus A320 Airbus A319 Total Model 300F 200 100 As of December 31, 2023 As of December 31, 2022 3 7 28 38 3 3 28 34 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: Name of significant subsidiary Country of incorporation Functional currency Latam Airlines Perú S.A. Lan Cargo S.A. Línea Aérea Carguera de Colombia S.A. Transporte Aéreo S.A. Latam Airlines Ecuador S.A. Aerovías de Integración Regional S.A. Aires S.A. TAM Linhas aéreas S.A. ABSA Aerolimhas Brasileiras S.A. Transportes Aéreos del Mercosur S.A. Peru Chile Colombia Chile Ecuador Colombia Brazil Brazil Paraguay US$ US$ US$ US$ US$ COP BRL US$ PYG Ownership As of December 31, 2023 % As of December 31, 2022 % 99.81000 99.89810 90.46000 100.00000 100.00000 99.23168 100.00000 100.00000 94.98000 99.81000 99.89810 90.46000 100.00000 100.00000 99.21764 99.99935 100.00000 94.98000 The consolidated subsidiaries do not have significant restrictions for transferring funds to the parent company. ANNUAL REPORT 2023 13 —Financial reports —Financial statements 49 Summary financial information of significant subsidiaries Name of significant subsidiary Statement of financial position as of December 31, 2023 Income for the year ended December 31, 2023 Total Assets ThUS$ Current Assets ThUS$ Non-current Assets ThUS$ Total Liabilities ThUS$ Current Liabilities ThUS$ Non-current Liabilities ThUS$ Revenue ThUS$ Net Income/(loss) ThUS$ Latam Airlines Perú S.A. Lan Cargo S.A. Línea Aérea Carguera de Colombia S.A. Transporte Aéreo S.A. Latam Airlines Ecuador S.A. Aerovías de Integración Regional S.A. Aires S.A. TAM Linhas Aéreas S.A. ABSA Aerolinhas Brasileiras S.A. Transportes Aéreos del Mercosur S.A. 334,481 391,430 166,520 280,117 152,676 191,878 4,119,149 500,177 49,713 312,628 122,877 57,240 37,436 149,155 186,612 2,417,115 490,548 46,976 21,853 268,553 109,280 242,681 3,521 285,645 189,019 59,640 151,066 131,488 281,208 157,003 59,344 117,121 120,917 5,266 1,702,034 9,629 185,799 3,024,805 538,982 182,923 2,061,406 510,978 2,737 26,772 24,833 4,437 32,016 296 33,945 10,571 2,876 963,399 28,004 1,939 1,404,061 403,051 222,397 387,515 260,426 516,410 5,587,692 162,580 50,990 (4,666) 22,677 (5,331) 24,871 1,242 (12,724) 736,209 28 6,060 Name of significant subsidiary Statement of financial position as of December 31, 2022 Income for the year ended December 31, 2022 Total Assets ThUS$ Current Assets ThUS$ Non-current Assets ThUS$ Total Liabilities ThUS$ Current Liabilities ThUS$ Non-current Liabilities ThUS$ Revenue ThUS$ Net Income/(loss) ThUS$ Latam Airlines Perú S.A. Lan Cargo S.A. Línea Aérea Carguera de Colombia S.A. Transporte Aéreo S.A. Latam Airlines Ecuador S.A. Aerovías de Integración Regional S.A. Aires S.A. TAM Linhas Aéreas S.A. ABSA Aerolinhas Brasileiras S.A. Transportes Aéreos del Mercosur S.A. 335,773 394,378 307,161 283,166 110,821 112,501 3,329,695 223,701 70,883 305,288 144,854 126,648 47,238 107,313 109,076 1,925,948 215,700 65,395 30,485 249,524 180,513 235,928 3,508 3,425 1,403,747 8,001 5,488 281,178 212,094 127,629 177,109 93,975 213,941 4,166,754 262,534 54,340 276,875 165,297 127,380 145,446 82,687 211,679 3,264,814 233,739 52,332 4,303 46,797 249 31,663 11,288 2,262 901,940 28,795 2,008 1,257,865 333,054 226,587 320,187 134,622 394,430 3,966,615 244,028 44,449 (12,726) (1,230) (5,727) (36,190) 1,519 (122,199) (65,190) (7,853) 2,306 199 ANNUAL REPORT 2023 13 —Financial reports —Financial statements (b) Non-controlling interests 50 Equity Tax No. Country of origin As of December 31, 2023 As of December 31, 2022 As of December 31, 2023 As of December 31, 2022 % % ThUS$ ThUS$ Latam Airlines Perú S.A. Foreign Peru 0.19000 0.19000 93 (13,678) Aerovías de Integración Regional S.A. Aires S.A. Linea Aérea Carguera de Colombia S.A. Transportes Aéreos del Mercosur S.A. Foreign Foreign Foreign Colombia Colombia Paraguay Lan Cargo S.A. and Subsidiaries 93.383.000-4 Chile 0.77400 9.54000 5.02000 0.10196 0.78236 9.54000 5.02000 0.10196 Other companies Total (5,049) (8,421) 1,152 198 — (264) (973) 885 2,475 (2) (12,027) (11,557) Incomes Tax No. Country of origin For the year ended At December 31, For the year ended At December 31, 2023 % 2022 % 2023 ThUS$ 2022 ThUS$ Latam Airlines Perú S.A Foreign Peru 0.19000 0.19000 (9) (643) Aerovías de Integración Regional S.A. Aires S.A. Linea Aérea Carguera de Colombia S.A. Transportes Aéreos del Mercosur S.A. Lan Cargo S.A. and Subsidiaries Other companies Total Foreign Foreign Foreign Colombia Colombia Paraguay 93.383.000-4 Chile 0.77400 9.54000 5.02000 0.10196 0.78236 9.54000 5.02000 0.10196 (101) (500) 304 (956) (551) 116 25 — (281) (26) (13) (2,073) 200 ANNUAL REPORT 2023 13 —Financial reports —Financial statements 51 NOTE 15 - INTANGIBLE ASSETS OTHER THAN GOODWILL The details of intangible assets are as follows: Classes of intangible assets (net) Classes of intangible assets (gross) As of December 31, 2023 ThUS$ As of December 31, 2022 ThUS$ As of December 31, 2023 ThUS$ As of December 31, 2022 ThUS$ 658,949 219,636 156,337 117,010 54 1,151,986 625,368 203,791 143,550 107,652 25 1,080,386 658,949 219,636 597,164 117,010 1,369 1,594,128 625,368 203,791 518,971 107,651 1,315 1,457,096 Airport slots Loyalty program Computer software Developing software Other assets Total a) Movement in Intangible assets other than goodwill: Computer software and others Net ThUS$ Opening balance as of January 1, 2022 Additions Withdrawals Transfer software and others Foreign exchange Amortization Closing balance as of December 31, 2022 Opening balance as of January 1, 2023 Additions Transfer software and others Foreign exchange Amortization Closing balance as of December 31, 2023 Developing software ThUS$ 104,874 66,820 Airport slots ThUS$ 587,214 — — — 38,154 — 625,368 625,368 — — 33,581 — 658,949 Loyalty program (1) ThUS$ 190,542 — — — 13,249 — 203,791 203,791 — — 15,845 — 219,636 Total ThUS$ 1,018,892 66,867 (3,192) (2,446) 54,623 (54,358) 1,080,386 1,080,386 79,144 (718) 52,478 (59,304) 1,151,986 (245) (63,658) (139) — 107,652 107,652 78,846 (69,928) 440 — 117,010 136,262 47 (2,947) 61,212 3,359 (54,358) 143,575 143,575 298 69,210 2,612 (59,304) 156,391 The amortization of each period is recognized in the consolidated income statement within administrative expenses. The cumulative amortization of computer software and others as of December 31, 2023 amounts to ThUS$442,142 (ThUS$414,614 as of December 31, 2022). b) Impairment Test Intangible Assets with an indefinite useful life As of December 31, 2023, the Company maintains only the CGU “Air Transport”. The CGU “Air transport” considers the transport of passengers and cargo, both in the domestic markets of Chile, Peru, Argentina, Colombia, Ecuador and Brazil, as well as in a series of regional and international routes in America, Europe, Africa and Oceania. 201 52 As of December 31, 2023, in accordance with the accounting policy, the Company performed the annual impairment test. The recoverable amount of the CGU was determined based on calculations of the value in use. These calculations use projections of 5 years of cash flows after taxes from the financial budgets approved by management. Cash flows beyond the budgeted period are extrapolated using growth rates and estimated average volumes, which do not exceed long-term average growth rates. Management’s cash flow projections included significant judgements and assumptions related to annual revenue growth rates, discount rate, inflation rates, the exchange rate and the price of fuel. The annual revenue growth rate is based on past performance and management’s expectations of market development in each of the countries in which it operates. The discount rates used for the CGU "Air transport" are determined in US dollars, after taxes, and reflect specific risks related to the relevant countries of each of the operations. Inflation rates and exchange rates are based on the data available from the countries and the information provided by the Central Banks of the various countries where it operates, and the price of fuel is determined based on estimated levels of production, the competitive environment of the market in which they operate and their commercial strategy. The recoverable values were determined using the following assumptions: Annual growth rate (Terminal) Exchange rate Discount rate based on the Weighted Average Cost of Capital (WACC) Fuel Price CGU Air transport 0.0 – 4.3 5.28 – 5.57 8.7 – 10.7 100 % R$/US$ % US$/barrel The result of the impairment test, which includes a sensitivity analysis of its main variables, showed that the recoverable amount exceeded the book value of the cash-generating unit, and therefore no impairment was identified. The CGU is sensitive to annual growth rates, discounts and exchange rates and fuel price. The sensitivity analysis included the individual impact of changes in critical estimates in determining recoverable amounts, namely: Air Transportation CGU Increase WACC Maximum % Decrease rate Terminal growth Minimal % Increase fuel price Maximum US$/barrel 10.7 0 100 In none of the above scenarios an impairment of the cash-generating unit was identified. ANNUAL REPORT 2023 13 —Financial reports —Financial statements 53 NOTE 16 - PROPERTY, PLANT AND EQUIPMENT The composition by category of Property, plant and equipment is as follows: Gross Book Value As of December 31, 2023 ThUS$ As of December 31, 2022 ThUS$ Accumulated depreciation As of December 31, 2023 ThUS$ As of December 31, 2022 ThUS$ Net Book Value As of December 31, 2023 ThUS$ As of December 31, 2022 ThUS$ a) Property, plant and equipment Construction in progress (1) Land Buildings Plant and equipment Own aircraft (3) Other (2) Machinery Information technology equipment Fixed installations and accessories Motor vehicles Leasehold improvements Subtotal Properties, plant and equipment b) Right of use Aircraft (3) Other assets Subtotal Right of use Total 258,246 44,244 129,036 10,738,500 9,856,365 882,135 29,092 163,382 186,179 49,560 266,631 11,864,870 5,388,147 248,614 5,636,761 17,501,631 388,810 44,349 124,507 11,135,425 10,427,950 707,475 27,090 153,355 155,351 51,504 202,753 12,283,144 4,391,690 246,078 4,637,768 16,920,912 — — (61,478) (4,508,356) (4,259,729) (248,627) (27,716) (146,040) (131,769) (44,385) (53,201) (4,972,945) (3,243,065) (194,491) (3,437,556) (8,410,501) — — (55,511) (4,836,926) (4,619,279) (217,647) (25,479) (136,746) (118,279) (46,343) (42,726) (5,262,010) (3,064,869) (182,372) (3,247,241) (8,509,251) 258,246 44,244 67,558 6,230,144 5,596,636 633,508 1,376 17,342 54,410 5,175 213,430 6,891,925 2,145,082 54,123 2,199,205 9,091,130 388,810 44,349 68,996 6,298,499 5,808,671 489,828 1,611 16,609 37,072 5,161 160,027 7,021,134 1,326,821 63,706 1,390,527 8,411,661 (1) As of December 31, 2023, includes advances paid to aircraft manufacturers for ThUS$ 242,069 (ThUS$ 357,979 as of December 31, 2022). (2) Consider mainly rotables and tools. (3) There were reclassified to Non-current assets or groups of assets for disposal as held for sale the following aircrafts: As of December 31, 2023, one Boeing B767 and six Airbus A320, as of December 31, 2022, six Airbus A320 and twenty-eight Airbus A319 (see Note 13). As of December 31, 2021, includes advances paid to aircraft manufacturers for ThUS$ 377,590. 202 ANNUAL REPORT 2023 13 —Financial reports —Financial statements (a) Movement in the different categories of Property, plant and equipment: 54 Construction in progress ThUS$ Land ThUS$ Buildings net ThUS$ Plant and equipment net Information technology equipment net Fixed installations & accessories net ThUS$ ThUS$ ThUS$ Motor vehicles net ThUS$ Leasehold improvements net ThUS$ Property, Plant and equipment net ThUS$ Opening balance as of January 1, 2022 Additions Disposals Retirements Depreciation expenses Foreign exchange Other increases (decreases) (*) Changes, total Closing balance as of December 31, 2022 Opening balance as of January 1, 2023 Additions Disposals Retirements Depreciation expenses Foreign exchange Other increases (decreases) (*) Changes, total Closing balance as of December 31, 2023 473,797 16,332 — (75) — (1,282) (99,962) (84,987) 388,810 388,810 8,835 — (83) — 726 (140,042) (130,564) 258,246 43,276 60,451 6,568,717 — — (2) 843,808 (4,140) (42,055) 16,836 6,426 — (24) (3,285) (669,059) (5,662) 918 10,914 8,545 68,996 11,527 (403,950) (263,869) (84) (883) (227) 6,304,848 16,609 44,349 68,996 6,304,848 — — — 870,640 (2,701) (87,652) 16,609 5,794 (1) (12) 38,741 113 (264) (836) (7,914) 2,365 4,867 (1,669) 37,072 37,072 4,246 — (2) (4,104) (716,590) (5,918) (8,789) 1,505 1,161 (1,438) 67,558 23,845 (156,046) (68,504) 536 334 733 6,236,344 17,342 1,276 20,607 17,338 54,410 — — — — 1,073 — 1,073 44,349 — — — — 1,445 (1,550) (105) 44,244 325 258 (3) — (55) (28) (74) 98 423 423 — (16) — (68) 12 — (72) 351 132,975 27,160 — (313) (13,071) 7,593 5,683 27,052 160,027 160,027 48,866 — — (10,185) 11,497 3,225 53,403 7,335,118 894,097 (4,407) (43,305) (699,046) 22,082 (483,405) (313,984) 7,021,134 7,021,134 938,381 (2,718) (87,749) (745,654) 40,842 (272,311) (129,209) 213,430 6,891,925 (*) This Amount included the following aircrafts reclassified to Non-current assets or groups of assets for disposal as held for sale: As of December 31, 2023, one Boeing B767 ThUS$ (21,578) and six Airbus A320 ThUS$ (36,326)). As of December 31, 2022, six Airbus A320 ThUS$ (29,328) and twenty-eight Airbus A319 ThUS$ (373,410). 203 ANNUAL REPORT 2023 13 —Financial reports —Financial statements (b) Right of use assets: 55 Opening balance as of January 1, 2022 Additions Depreciation expense Cumulative translate adjustment Other increases (decreases) (***) Total changes Closing balance as of December 31, 2022 Opening balance as of January 1, 2023 Additions Depreciation expense Cumulative translate adjustment Other increases (decreases) Total changes Closing balance as of December 31, 2023 Aircraft ThUS$ 2,101,742 372,571 (249,802) 919 (898,609) (774,921) 1,326,821 1,326,821 1,013,314 (178,570) 56 (16,539) 818,261 2,145,082 Others ThUS$ 53,007 13,087 (16,368) 1,392 12,588 10,699 63,706 63,706 2,988 (14,816) 3,351 (1,106) (9,583) 54,123 Net right of use assets ThUS$ 2,154,749 385,658 (266,170) 2,311 (886,021) (764,222) 1,390,527 1,390,527 1,016,302 (193,386) 3,407 (17,645) 808,678 2,199,205 (*) Considers the renegotiation of 115 aircraft (1 Airbus A319, 39 Airbus A320, 14 Airbus A320neo, 30 Airbus A321, 1 Boeing 767, 6 Boeing 777 and 24 Boeing 787 Dreamliner). (c) Fleet composition Aircraft included in Property, plant and equipment Aircraft included as Rights of use assets Total fleet Aircraft Model As of December 31, 2023 As of December 31, 2022 As of December 31, 2023 As of December 31, 2022 As of December 31, 2023 As of December 31, 2022 Boeing 767 Boeing 767 Boeing 777 Boeing 787 Boeing 787 Airbus A319 Airbus A320 Airbus A320 Airbus A321 Airbus A321 Total 300ER 300F 300ER 8 9 100 200 NEO 200 NEO 11 (3) 16 (2) (3) 4 4 2 11 83 (2) 1 19 — 151 15 13 (2) 4 4 2 12 (2) 88 (2) 1 19 — 158 — 1 6 6 24 1 46 23 30 7 144 — 1 6 6 19 1 40 (1) 15 30 — 118 11 17 10 10 26 12 129 24 49 7 295 15 14 10 10 21 13 128 16 49 — 276 (1) Include one aircraft with a short-term lease, which was excluded from the right of use. (2) Some aircraft of these fleets were reclassified to non-current assets or groups of assets for disposal as held for sale, (see Note 13). (3) Considers the conversions from Boeing 767-300ER to Boeing 767-300F Aircraft. 204 56 (d) Method used for the depreciation of Property, plant and equipment: Buildings Plant and equipment Depreciation method Straight line without residual value Straight line with residual value of 20% in the short-haul fleet and 36% in the long-haul fleet. (*) Information technology equipment Straight line without residual value Fixed installations and accessories Straight line without residual value Straight line without residual value Motor vehicle Straight line without residual value Leasehold improvements Straight line without residual value Assets for rights of use Useful life (years) minimum maximum 50 20 5 5 10 10 5 1 30 10 10 10 8 25 (*) Except in the case of Boeing 767-300ER, Airbus A320 Family and Boeing 767-300F fleets which consider a lower residual value, due to the extension of their useful life to 22, 25 and 30 years respectively. Additionally, certain technical components are depreciated based on cycles and hours flown. (e) (i) Additional information regarding Property, plant and equipment: Property, plant and equipment pledged as guarantee: Description of Property, plant and equipment pledged as guarantee: Guarantee agent (1) Creditor company Committed Assets Fleet Wilmington Trust Company MUFG Aircraft and engines Credit Agricole Credit Agricole Aircraft and engines Bank Of Utah BNP Paribas Aircraft and engines Total direct guarantee Airbus A319 Airbus A320 Boeing 767 Boeing 777 Airbus A319 Airbus A320 Airbus A321 Boeing 767 Boeing 787 Boeing 787 As of December 31, 2023 As of December 31, 2022 Existing Debt ThUS$ Book Value ThUS$ Existing Debt ThUS$ Book Value ThUS$ 2,703 17,441 20,427 132,585 3,413 190,001 6,007 8,849 58,499 12,326 151,873 143,281 144,186 3,752 142,075 4,393 23,018 38,971 4,554 33,154 35,043 141,605 3,518 195,864 6,192 9,121 60,305 13,205 203,788 164,448 144,065 5,311 161,397 4,827 23,323 34,077 171,704 208,601 184,199 221,311 611,629 872,476 673,555 975,752 (1) For syndicated loans, given their own characteristics, the guarantee agent is the representative of the creditors. The amounts of the current debts are presented at their nominal value. The net book values correspond to the assets granted as collateral. Additionally, there are indirect guarantees associated with assets booked within Property, Plant and Equipment whose total debt as of December 31, 2023, amounts to ThUS$ 898,166 (ThUS$ 1,037,122 as of December 31, 2022). The book value of the assets with indirect guarantees as of December 31, 2023, amounts to ThUS$ 1,925,069 (ThUS$ 2,306,233 as of December 31, 2022). ANNUAL REPORT 2023 13 —Financial reports —Financial statements 57 As of December 31, 2023, the Company keeps valid letters of credit related to right of use assets according to the following detail: Creditor Guarantee GE Capital Aviation Services Ltd. Merlin Aviation Leasing (Ireland) 18 Limited RB Comercial Properties 49 Empreendimentos Imobiliarios LTDA Debtor LATAM Airlines Group S.A. Tam Linhas Aéreas S.A. Type Three letters of credit Two letters of credit Tam Linhas Aéreas S.A. One letter of credit Value ThUS$ Release date 5,544 Dec 6, 2024 3,852 Mar 11, 2024 25,820 Apr 29, 2024 35,216 (ii) Commitments and others Fully depreciated assets and commitments for future purchases are as follows: 58 As of December 31, 2023, as a result of the different aircraft operating lease contracts signed with Air Lease Corporative , 1 Airbus aircraft of the A320neo family with delivery dates within 2024 remain to be received. As of December 31, 2023, as a result of the different aircraft operating lease contracts signed with Avolon Aerospace Leasing Limited, 2 Airbus aircraft of the A320neo family with delivery date within 2024 remain to be received. As of December 31, 2023, as a result of the different aircraft operating lease contracts signed with Air Lease Corporation, 5 Airbus A321XLR family aircraft with delivery dates between 2025 and 2026 remain to be received. (iii) Capitalized interest costs with respect to Property, plant and equipment. For the year ended At December 31, 2023 2022 As of December 31, 2023 ThUS$ As of December 31, 2022 ThUS$ Average rate of capitalization of capitalized interest costs Costs of capitalized interest % ThUS$ 10.66 10,136 7.12 10,575 Gross book value of fully depreciated property, plant and equipment still in use Commitments for the acquisition of aircraft (*) 288,454 15,700,000 266,896 13,100,000 (*) According to the manufacturer’s price list. Aircraft purchase commitments: Manufacturer Airbus S.A.S. A320neo Family The Boeing Company Boeing 787-9 Total Year of delivery 2024 2025 2026 2027-2030 Total 3 - 3 11 - 11 9 - 9 65 5 70 88 5 93 As of December 31, 2023, as a result of the different aircraft purchase contracts signed with Airbus S.A.S., 88 Airbus aircraft of the A320 family remain to be received with deliveries between 2024 and 2030. The approximate amount, according to manufacturer list prices, is ThUS$13,800,000. As of December 31, 2023, as a result of the different aircraft purchase contracts signed with The Boeing Company, 5 Boeing aircraft of the 787 Dreamliner remain to be received with deliveries between 2027 and 2028. The approximate amount, according to manufacturer list prices, is ThUS$1,900,000. Aircraft operational lease commitments: As of December 31, 2023, as a result of the different aircraft operating lease contracts signed with AerCap Holdings N.V., 4 Airbus aircraft of the Airbus A320neo family with delivery between 2024 and 4 Boeing 787 Dreamliner aircraft with delivery dates within 2025 remain to be received. As of December 31, 2023, as a result of the different aircraft operating lease contracts signed with Aergo, 1 Boeing 787 Dreamliner aircraft, with delivery dates within 2024, remain to be received. 205 NOTE 17 - CURRENT AND DEFERRED TAXES In the year ended December 31, 2023, the income tax provision was calculated and recorded, applying the semi- integrated tax system and a rate of 27%, based on the provisions of the Law. No. 21,210, published in the Official Gazette of the Republic of Chile, dated February 24, 2020, which updates the Tax Legislation. The net result for deferred tax corresponds to the variation of the period, of the assets and liabilities for deferred taxes generated by temporary differences and tax losses. For the permanent differences that give rise to a book value of assets and liabilities other than their tax value, no deferred tax has been recorded since they are caused by transactions that are recorded in the financial statements and that will have no effect on income tax expense. (a) Current taxes (a.1) The composition of the current tax assets is the following: Current assets As of December 31, 2023 ThUS$ As of December 31, 2022 ThUS$ Non-current assets As of As of December December 31, 2023 31, 2022 ThUS$ ThUS$ Total assets As of December 31, 2023 ThUS$ As of December 31, 2022 ThUS$ Provisional monthly payments (advances) Other recoverable credits Total current tax assets 18,982 28,048 47,030 18,559 14,474 33,033 — — — — — — 18,982 28,048 47,030 18,559 14,474 33,033 ANNUAL REPORT 2023 13 —Financial reports —Financial statements (a.2) The composition of the current tax liabilities are as follows: 59 Current liabilities As of As of December December 31, 2023 31, 2022 ThUS$ ThUS$ Non-current liabilities As of As of December December 31, 2023 31, 2022 ThUS$ ThUS$ Total liabilities As of December 31, 2023 ThUS$ As of December 31, 2022 ThUS$ Income tax provision Total current tax liabilities 2,371 2,371 1,026 1,026 — — — — 2,371 2,371 1,026 1,026 (b) Deferred taxes The balances of deferred tax are the following: Concept Properties, Plants and equipment Assets by right of use Lease Liabilities Amortization Provisions Revaluation of financial instruments Tax losses Intangibles Other Total Assets Liabilities As of December 31, 2023 ThUS$ As of December 31, 2022 ThUS$ As of December 31, 2023 ThUS$ As of December 31, 2022 ThUS$ (941,136) (585,957) 792,781 (112,002) 222,409 (889) 613,264 — 16,312 4,782 (1,006,814) (367,112) 586,878 (88,172) 9,133 2,438 852,654 — 16,910 5,915 70,745 54 (74) 10 81,091 — (86,320) 300,359 16,494 382,359 81,326 70 (115) 10 69,519 — (94,005) 270,512 17,308 344,625 The balance of deferred tax assets and liabilities are composed primarily of temporary differences to be reversed in the long term. 60 Movements of Deferred tax assets and liabilities (b.1) From January 1 to December 31, 2022 Opening balance Assets/ (liabilities) ThUS$ (1,208,693) (572,727) 773,129 (44,615) 552,527 (16,575) 445,662 (254,155) (274) (325,721) Opening balance Assets/ (liabilities) ThUS$ (1,088,140) (367,182) 586,993 (88,182) (60,386) 2,438 946,659 (270,512) (398) (338,710) Recognized in consolidated income ThUS$ Recognized in comprehensive income ThUS$ Exchange rate variation ThUS$ 120,553 205,545 (186,136) (43,567) (613,480) 19,248 500,997 2,114 (124) 5,150 — — — — 567 (235) — — — 332 — — — — — — — (18,471) — (18,471) Recognized in consolidated income ThUS$ Recognized in comprehensive income ThUS$ Exchange rate variation ThUS$ 76,259 (218,829) 205,862 (23,830) 200,953 (6,931) (247,075) (6,207) 216 (19,582) — — — — 751 3,604 — — — 4,355 — — — — — — — (23,640) — (23,640) Ending balance Asset (liability) ThUS$ (1,088,140) (367,182) 586,993 (88,182) (60,386) 2,438 946,659 (270,512) (398) (338,710) Ending balance Asset (liability) ThUS$ (1,011,881) (586,011) 792,855 (112,012) 141,318 (889) 699,584 (300,359) (182) (377,577) Property, plant and equipment Assets for right of use Lease Liabilities Amortization Provisions Revaluation of financial instruments Tax losses (*) Intangibles Others Total (b.2) From January 1 to December 31, 2023 Property, plant and equipment Assets for right of use Lease Liabilities Amortization Provisions Revaluation of financial instruments Tax losses (*) Intangibles Others Total 206 (*) Unrecognized deferred tax assets: Deferred tax assets are recognized to the extent that it is probable that sufficient taxable profits will be generated in the future. In total the Company has not recognized deferred tax assets for ThUS$ 3,572,528 at December 31, 2023 (ThUS$ 3,651,023 as of December 31, 2022) which include deferred tax assets related to negative tax results of ThUS$ 12,206,634 at December 31, 2023 (ThUS$ 14,930,487 at December 31, 2022). As of December 31, 2022, the Management of the subsidiary Lan Cargo S.A., taking into account financial projections for future years, company derecognized DTA in the amount of ThUS$ 6.173 because it is not probable that future taxable profits would be generated in the future. ANNUAL REPORT 2023 13 —Financial reports —Financial statements (Expenses) / Income from deferred taxes and income tax: Income before tax from the Chilean legal tax rate (27% as of December 31, 2023 and 2022) 61 62 Income tax (expense)/benefit Current tax (expense) benefit Adjustments to the current tax of the previous year Total current tax (expense) benefit (Expense)/benefit for deferred tax recognition for tax losses (*) Deferred income for relative taxes to the creation and reversal of temporary differences Total deferred income tax Income tax (expense)/benefit Income tax (expense) / Income benefit: Current tax (expense) benefit, foreign Current tax (expense) benefit, domestic Total current tax (expense) benefit Foreign Deferred tax (expense) benefit, for tax losses compensation (*) Deferred tax (expense) benefit, foreign Deferred tax (expense) benefit, domestic Total deferred tax (expense)benefit Income tax (expense)/benefit For the year ended at December 31, 2023 ThUS$ 2022 ThUS$ (12,659) (193) (12,852) 17,492 (14,064) — (14,064) — (19,582) (2,090) (14,942) 5,150 5,150 (8,914) For the year ended at December 31, 2023 ThUS$ 2022 ThUS$ (10,410) (2,442) (12,852) 19,573 (33,637) (14,064) 17,492 (10,780) (8,802) (2,090) (14,942) — (532) 5,682 5,150 (8,914) (*) As a result of an agreement reached with the Brazilian tax authority TAM Linhas Aereas S.A. was authorized to use part of its available tax losses to pay some tax contingencies. As the company does not have recognized deferred tax asset for those tax losses, it was recognized as income to write off those tax contingencies. 207 For the year ended At December 31, 2022 ThUS$ 2023 ThUS$ For the year ended At December 31, 2022 2023 % % -27.00 — -8.39 4.27 -3.90 8.91 — 26.34 -2.73 24.50 -2.50 -27.00 0.67 1.52 89.27 -2.52 6.75 -0.46 -73.56 4.66 26.33 -0.67 Income tax benefit/(expense) using the legal tax rate Tax effect by change in tax rate Tax effect of rates in other jurisdictions Tax effect of non-taxable income Tax effect of disallowable expenses (161,053) (363,434) 9,016 20,398 1,201,618 (33,855) — (50,042) 25,459 (23,272) Other increases (decreases): Derecognition of deferred tax liabilities for early termination of aircraft financing Derecognition of deferred tax assets not recoverable Deferred tax asset not recognized Other increases (decreases) Total adjustments to tax expense using the legal rate Income tax benefit/(expense) using the effective rate 53,162 — 157,089 (16,285) 146,111 (14,942) 90,823 (6,173) (990,095) 62,788 354,520 (8,914) Deferred taxes related to items charged to equity: For the year ended At December 31, 2022 2023 ThUS$ ThUS$ Aggregate deferred taxation of components of other comprehensive income 4,355 332 ANNUAL REPORT 2023 13 —Financial reports —Financial statements 63 NOTE 18 - OTHER FINANCIAL LIABILITIES The composition of other financial liabilities is as follows: Current (a) Interest bearing loans (b) Lease Liability (c) Hedge derivatives Total current Non-current (a) Interest bearing loans (b) Lease Liability Total non-current (a) Interest bearing loans Obligations with credit institutions and debt instruments: Current Bank loans (2) Guaranteed obligations Other guaranteed obligations (1)(2) Subtotal bank loans Obligation with the public (2) Financial leases Other loans Total current Non-current Bank loans (2) Guaranteed obligations Other guaranteed obligations (1) Subtotal bank loans Obligation with the public (2) Financial leases Total non-current Total obligations with financial institutions As of December 31, 2023 ThUS$ As of December 31, 2022 ThUS$ 292,982 301,537 1,544 596,063 629,106 173,735 — 802,841 3,675,212 2,666,457 6,341,669 3,936,320 2,042,719 5,979,039 As of December 31, 2023 ThUS$ As of December 31, 2022 ThUS$ 53,141 28,697 67,005 148,843 34,731 109,304 104 292,982 976,293 275,225 363,345 1,614,863 1,268,107 792,242 3,675,212 3,968,194 353,284 17,887 66,239 437,410 33,383 156,285 2,028 629,106 1,032,711 307,174 408,065 1,747,950 1,256,416 931,954 3,936,320 4,565,426 208 64 (1) The committed "Revolving Credit Facility (RCF)" is guaranteed by collateral composed of aircraft, engines and spare parts, which was fully drawn until November 3, 2022. Once emerged from Chapter 11, the line was fully paid and of December 31, 2023 and December 31, 2022, it is available to be used. (2) On March 14, 2022, a new consolidated and modified text of the Existing DIP Credit Agreement (the “New Consolidated and Modified DIP Credit Agreement”) was submitted to the Court for its approval. The New Consolidated and Amended DIP Credit Agreement (i) fully refinanced and replaced the existing Tranches A, B and C in the Existing DIP Credit Agreement; (ii) contemplated a maturity date in accordance with the calendar that the Debtors anticipated to emerge from the Chapter 11 Procedure; and (iii) included certain reductions in fees and interest compared to the Existing DIP Credit Agreement and the Recast and Amended DIP Initial Financing Proposal. The obligations under the DIP were secured by assets owned by LATAM and certain of its affiliates, including, but not limited to, shares, certain engines and spare parts. On April 8, 2022, a consolidated and modified text was signed (the “Recast and Modified DIP Credit Agreement”) of the Original DIP Credit Agreement, which modified and consolidated said agreement and repaid the obligations pending payment under it. (that is, under its Tranches A, B and C). The total amount of the Consolidated and Modified DIP Credit Agreement was MUS$3,700. The Consolidated and Amended DIP Credit Agreement (i) included certain reductions in fees and interest compared to the Existing DIP Credit Agreement; and (ii) contemplated an expiration date in accordance with the calendar that LATAM anticipated to emerge from the Chapter 11 Procedure. Regarding the latter, the scheduled expiration date of the Consolidated and Modified DIP Credit Agreement was August 8, 2022, subject to to possible extensions that, in certain cases, had a deadline of November 30, 2022. Likewise, on April 8, 2022, the initial disbursement took place under the Consolidated and Modified DIP Credit Agreement for the amount of MUS$2,750. On April 28, 2022, an amendment to said contract was signed, extending the expiration date from August 8, 2022 to October 14, 2022. On October 12, 2022, said Consolidated and Modified DIP Credit Agreement was repaid in its entirety with the DIP-to-Exit financing, which contemplated bridge financing for senior secured bonds maturing in 2027 for MUS$750, MUS$750 in other bridge financing for senior secured notes due 2029, a MUS$750 Term Financing, a financing called Junior DIP, for a total of MUS$1,146 , and, lastly, a US Revolving Credit Facility MUS$500, which is not drawn. The DIP-to-exit financing was collateralized by assets owned by LATAM and certain of its affiliates. Of these, the Junior DIP contemplated a subordinate priority to the rest of the credits. On October 18, 2022, the Bridge Loans were partially repaid by: i) a bond issue exempt from registration under U.S. Securities Act of 1933, as amended (the “Securities Act”), pursuant to Rule 144A and Regulation S, both under the Securities Act, due 2027 (the “5-Year Bonds”), by a total principal amount of MUS$450 and ii) a bond issue exempt from registration under the Securities Law pursuant to Rule 144A and Regulation S, both under the Securities Law, due 2029 (the “Bonds to 7 Years”), for a total principal amount of MUS$700. In the context of the exit of the Company from the Chapter 11 Procedure on November 3, 2022, the Bridge Loans were repaid with additional: MUS$350 corresponding to an incremental loan of Term Loan B. On November 3, 2022, the company and all of its subsidiaries successfully emerged from Chapter 11. Balances by currency of interest bearing loans are as follows: Currency Brazilian real Chilean peso (U.F.) US Dollar Total As of December 31, 2023 ThUS$ As of December 31, 2022 ThUS$ — 160,730 3,807,464 3,968,194 314,322 157,288 4,093,816 4,565,426 ANNUAL REPORT 2023 13 —Financial reports —Financial statements 65 Interest-bearing loans due in installments to December 31, 2023 Debtor: LATAM Airlines Group S.A. and Subsidiaries, Tax No. 89.862.200-2, Chile. Tax No. Bank loans 0-E Obligations with the public 97.036.000-K 97.036.000-K 0-E Guaranteed obligations 0-E 0-E Other guaranteed obligations 0-E 0-E 0-E 0-E 0-E Financial leases 0-E 0-E 0-E 0-E Others loans 0-E Creditor Creditor country Currency Nominal values 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 ThUS$ ThUS$ ThUS$ ThUS$ ThUS$ Total nominal value ThUS$ Up to 90 days ThUS$ More than 90 days to one year ThUS$ Accounting values More than one to three years More than three to five years More than five years Total accounting value Amortization ThUS$ ThUS$ ThUS$ ThUS$ Annual Effective rate Nominal rate % % GOLDMAN SACHS 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 SANTANDER SANTANDER Chile Chile UF US$ WILMINGTON TRUST COMPANY U.S.A. US$ — — — — — — — — — — — 160,214 160,214 3 3 450,000 700,000 1,150,000 — — — 516 — 34,215 — — — — — 160,214 160,730 At Expiration 3 3 At Expiration 2.00 1.00 2.00 1.00 434,204 673,686 1,142,105 At Expiration 15.00 13.38 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 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 WILMINGTON TRUST COMPANY CITIBANK JP MORGAN CHASE CREDIT AGRICOLE MUFG EXIM BANK NATIXIS US BANK EXIM BANK BANK OF UTAH Various (*) Total — — — 11,768 — 6,516 17,374 — 2,575 U.S.A. U.S.A. France U.S.A. U.S.A. France U.S.A. U.S.A. U.S.A. US$ US$ US$ US$ US$ US$ US$ US$ US$ US$ — — 14,667 35,960 — 19,779 49,311 — — 29,333 16,374 40,662 54,443 17,492 — — 222,768 — — — — — — — 33 17 266,768 4,241 64,102 11,805 42,122 16,325 99,109 282 56,972 77,647 215,357 8,559 — — 84,177 17,905 — — 14,667 35,960 — 19,779 49,311 — — 26,154 16,374 40,662 54,117 15,731 — — 221,708 — — — — — 42,122 16,325 56,754 77,555 216,764 — — — 197,499 141,169 74,404 7,202 23,637 37,304 101,864 413,072 172,582 1,933 2,575 — 195,741 141,169 74,404 7,202 23,637 37,304 101,864 33 17 Quarterly Quarterly 266,770 At Expiration 64,139 99,391 82,947 413,247 172,582 Quarterly Quarterly Quarterly Quarterly Quarterly Monthly 1.00 0.63 9.43 7.11 2.29 7.58 4.41 4.13 1.00 0.63 9.43 7.11 2.05 7.58 3.16 3.31 10.71 10.71 104 — — — — 104 104 — — — — 104 At Expiration — — 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. 209 ANNUAL REPORT 2023 13 —Financial reports —Financial statements 66 Interest-bearing loans due in installments to December 31, 2023 Debtor: TAM S.A. and Subsidiaries, Tax No. 02.012.862/0001-60, Brazil Tax No. 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 ThUS$ ThUS$ ThUS$ ThUS$ ThUS$ Total nominal value ThUS$ 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 ThUS$ ThUS$ ThUS$ ThUS$ ThUS$ ThUS$ Annual Effective rate % Nominal rate % Nominal values Accounting values Financial lease 0-E NATIXIS Total Total consolidated France US$ 510 510 1,530 1,530 4,080 4,080 9,886 9,886 — — 16,006 16,006 510 510 1,530 1,530 4,080 4,080 9,886 9,886 — — 16,006 16,006 Quarterly — — 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 3,968,194 210 ANNUAL REPORT 2023 13 —Financial reports —Financial statements 67 Interest-bearing loans due in installments to December 31, 2022 Debtor: LATAM Airlines Group S.A. and Subsidiaries, Tax No. 89.862.200-2, Chile. Tax No. Creditor Creditor country Currency Bank loans 0-E 0-E Obligations with the public SANTANDER Spain GOLDMANS ACHS U.S.A. 97.036.000- K SANTANDER 97.036.000- K SANTANDER Chile Chile US$ US$ UF US$ U.S.A. US$ WILMINGTO N TRUST COMPANY BNP PARIBAS WILMINGTO N TRUST COMPANY 0-E Guaranteed obligations 0-E 0-E Other guaranteed obligations 0-E 0-E 0-E 0-E Financial leases 0-E 0-E 0-E 0-E 0-E 0-E 0-E Other loan 0-E 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 ThUS$ ThUS$ ThUS$ ThUS$ ThUS$ Total nominal value ThUS$ Up to 90 days ThUS$ 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 ThUS$ ThUS$ ThUS$ ThUS$ ThUS$ Effective rate % Nominal rate % — — 70,951 — — 70,951 173 — 70,951 — 2,750 8,250 22,000 1,067,000 — 1,100,000 30,539 8,250 22,000 939,760 — — 71,124 Quarterly 7.26 7.26 1,000,549 Quarterly 18.46 13.38 — — — — — — — — — — 156,783 156,783 3 3 505 — — — — — — — 156,783 157,288 At Expiration 3 3 At Expiration 2.00 1.00 2.00 1.00 — 450,000 700,000 1,150,000 — 32,878 — 430,290 669,340 1,132,508 At Expiration 15.00 13.38 U.S.A. US$ 1,761 6,907 22,890 26,035 126,605 184,198 2,637 6,907 22,212 25,627 126,048 183,431 Quarterly 5.76 5.76 U.S.A. US$ 2,208 6,110 32,620 33,210 67,457 141,605 2,233 6,110 32,620 33,210 67,457 141,630 Quarterly/ Monthly 8.20 8.20 CREDIT AGRICOLE MUFG CITIBANK EXIM BANK France U.S.A. U.S.A. U.S.A. CITIBANK U.S.A. U.S.A. France U.S.A. U.S.A. U.S.A. U.S.A. BNP PARIBAS NATIXIS US BANK PK AIRFINANCE EXIM BANK BANK OF UTAH Various (*) Total US$ US$ US$ US$ US$ US$ US$ US$ US$ US$ US$ US$ — 11,345 — — 14,667 34,624 — — 29,333 66,419 — 231,000 — — — — — 275,000 112,388 — 17,737 36,431 32,444 86,612 3,837 11,404 1,470 237 14,667 34,624 — — 26,153 66,419 — 228,880 — — — — — 273,537 Quarterly 112,447 Quarterly 1,470 At Expiration 17,738 36,431 32,444 86,850 Quarterly 6,825 5,689 — 12,514 6,888 5,689 — 6,596 6,419 16,984 1,533 — 20,048 19,341 51,532 1,521 53,207 84,177 4,664 6,393 — — — — 55,696 104,475 — — — — 28,165 239,138 152,693 12,590 6,776 8,545 17,831 1,579 1,923 20,048 19,341 51,532 1,516 52,881 79,805 4,664 6,393 — — — — 12,577 Quarterly 28,340 Quarterly 55,478 103,905 240,150 Quarterly — — — — 149,168 Quarterly 12,636 Quarterly — 113,668 180,260 152,581 446,509 — 112,666 178,672 151,236 444,497 Quarterly 8.24 6.23 1.00 2.01 6.19 5.99 6.44 4.06 5.97 3.58 8.24 6.23 1.00 1.78 5.47 5.39 6.44 2.85 5.97 2.79 2,321 6,568 20,990 30,557 121,801 182,237 2,321 6,568 20,990 30,557 121,801 182,237 Monthly 10.45 10.45 2,028 60,770 — — — — 2,028 2,028 — — — — 2,028 At Expiration — — 178,400 541,906 2,110,189 1,462,149 4,353,414 100,926 211,278 532,344 1,958,905 1,429,017 4,232,470 211 (*) Obligation to creditors for executed letters of credit. ANNUAL REPORT 2023 13 —Financial reports —Financial statements 68 Interest-bearing loans due in installments to December 31, 2022 Debtor: TAM S.A. and Subsidiaries, Tax No. 02.012.862/0001-60, Brazil Tax No. Creditor Country Currency 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 ThUS$ ThUS$ ThUS$ ThUS$ ThUS$ Total nominal value ThUS$ 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 ThUS$ ThUS$ ThUS$ ThUS$ ThUS$ ThUS$ Amortization Effective rate % Nominal rate % Bank loans 0-E Financial lease Merril Lynch Credit Products LLC Brazil BRL 304,549 — — — — 304,549 314,322 — — — — 314,322 Monthly 3.95 3.95 0-E NATIXIS France US$ Total Total consolidated 510 305,059 365,829 1,530 1,530 4,080 4,080 4,080 4,080 7,846 7,846 18,046 322,595 179,930 545,986 2,114,269 1,469,995 4,676,009 1,050 315,372 416,298 1,530 1,530 4,080 4,080 4,080 4,080 7,894 7,894 18,634 332,956 212,808 536,424 1,962,985 1,436,911 4,565,426 Semiannual/ Quarterly 7.23 7.23 (*) Obligation to creditors for executed letters of credit. 212 ANNUAL REPORT 2023 13 —Financial reports —Financial statements (b) Lease Liability: 69 The movement of the lease liabilities corresponding to the period reported are as follow: Opening balance as of January 1, 2022 New contracts Lease termination Renegotiations Exit effect of chapter 11 (*) Payments Accrued interest Exchange differences Cumulative translation adjustment Other increases (decreases) Changes Closing balance as of December 31, 2022 Opening balance as of January 1, 2023 New contracts Lease termination Renegotiations Payments Accrued interest Exchange differences Subsidiaries conversion difference Changes Closing balance as of December 31, 2023 Aircraft ThUS$ 2,883,661 354,924 (19,606) (76,233) (995,888) (154,823) 142,939 — (2) — (748,689) 2,134,972 2,134,972 943,178 (13,258) (7,194) (376,006) 212,500 — 6 759,226 2,894,198 Others ThUS$ 76,977 13,019 — (4,198) — (26,172) 9,194 2,279 7,463 2,920 4,505 81,482 81,482 2,976 (1,812) 2,219 (23,277) 9,633 2,278 297 (7,686) 73,796 Lease Liability Total ThUS$ 2,960,638 367,943 (19,606) (80,431) (995,888) (180,995) 152,133 2,279 7,461 2,920 (744,184) 2,216,454 2,216,454 946,154 (15,070) (4,975) (399,283) 222,133 2,278 303 751,540 2,967,994 (*) Corresponds to the effect of emergence from Chapter 11 ThUS$679,273,000 associated with claim settlement (Derecognition of assets for right of use for ThUS$639,728,000 (See Note 24 letter g (4)) and conversion of Notes for ThUS$39,545,000) and ThUS$316,615,000 due to IBR rate change. The Company recognizes interest payments related to lease liabilities in the consolidated result under Finance costs (See Note 26(c)). The Average discount rates for calculation of lease liability are as follows. Discount rate December 2023 Discount rate December 2022 Aircraft Others 9.10 % 13.00 % 8.80 % 10.70 % 213 (c) Hedge derivatives 70 Current liabilities As of December 31, 2023 ThUS$ As of December 31, 2022 ThUS$ Non-current liabilities As of As of December December 31, 2022 31, 2023 ThUS$ ThUS$ Total hedge derivatives As of As of December December 31, 2022 31, 2023 ThUS$ ThUS$ Fair value of foreign currency derivatives Total hedge derivatives 1,544 1,544 — — — — — — 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, 2023 ThUS$ As of December 31, 2022 ThUS$ Interest rate option (1) Fuel options (2) Foreign currency derivative R$/BRL$ (3) — 22,136 (1,544) 8,816 12,594 191 (1) They cover significant variations in cash flows associated with the market risk implicit in increases in the SOFR interest rate for long-term loans originating from the acquisition of aircraft and bank loans. These contracts are recorded as cash flow hedge contracts. (2) Hedge significant variations in cash flows associated with market risk implicit in the changes in the price of future fuel purchases. These contracts are recorded as cash flow hedges. (3) Hedge significant variations in expected cash flows associated with the market risk implicit in changes in exchange rates, particularly the US$/BRL. These contracts are recorded as cash flow hedge contracts. The Company only maintains cash flow hedges. In the case of fuel and currency hedges, the cash flows subject to said hedges will occur and will impact results in the next 12 months from the date of the consolidated statement of financial position. In the case of interest rate derivatives, the settlements will occur in the next 6 months and will remain in the balance until the date of arrival of the associated aircraft, date on which it will be part of the right-of-use asset and will begin to impact results on a monthly basis until the expiration of the respective lease All hedging operations have been performed for highly probable transactions, except for fuel hedge. See Note 3. See Note 24 (f) for reclassification to profit or loss for each hedging operation and Note 17 (b) for deferred taxes related. ANNUAL REPORT 2023 13 —Financial reports —Financial statements NOTE 19 - TRADE AND OTHER ACCOUNTS PAYABLES 71 The composition of Trade and other accounts payables is as follows: Current (a) Trade and other accounts payables (b) Accrued liabilities Total trade and other accounts payables (a) Trade and other accounts payable: Trade creditors Other accounts payable Total The details of Trade and other accounts payables are as follows: Boarding Fees Maintenance Airport charges and overflight Handling and ground handling Suppliers technical purchases Leases, maintenance and IT services Other personnel expenses Aircraft Fuel Professional services and advisory Services on board Marketing Air companies Crew Agencies sales commissions Aircraft Insurance Others Total trade and other accounts payables As of December 31, 2023 ThUS$ As of December 31, 2022 ThUS$ 1,408,201 357,078 1,765,279 1,271,590 356,402 1,627,992 As of December 31, 2023 ThUS$ As of December 31, 2022 ThUS$ 1,176,985 231,216 1,408,201 904,964 366,626 1,271,590 As of December 31, 2023 ThUS$ As of December 31, 2022 ThUS$ 249,291 167,466 138,901 133,114 126,302 100,842 96,351 94,878 63,756 58,365 51,035 26,371 25,936 16,899 12,256 46,438 1,408,201 208,783 100,823 89,966 130,482 123,743 83,751 116,244 44,153 134,191 42,545 37,928 8,182 11,511 9,852 7,241 122,195 1,271,590 214 72 (b) Liabilities accrued: Aircraft and engine maintenance Accrued personnel expenses Accounts payable to personnel (1) Others accrued liabilities Total accrued liabilities As of December 31, 2023 ThUS$ As of December 31, 2022 ThUS$ 129,473 97,733 114,769 15,103 357,078 184,753 81,857 81,508 8,284 356,402 (1) Participation in profits and bonuses (Note 22 letter b). NOTE 20 - OTHER PROVISIONS Current liabilities As of As of December December 31, 2023 31, 2022 ThUS$ ThUS$ Non-current liabilities As of As of December December 31, 2023 31, 2022 ThUS$ ThUS$ Total Liabilities As of December 31, 2023 ThUS$ As of December 31, 2022 ThUS$ 7,003 7,702 367 — 8,733 5,490 350 — 614,882 142,305 155,501 11,571 617,692 119,483 175,212 13,180 621,885 150,007 155,868 11,571 626,425 124,973 175,562 13,180 Provision for contingencies (1) Tax contingencies Civil contingencies Labor contingencies Other Provision for European Commission investigation (2) — — 2,477 2,397 2,477 2,397 Total other provisions (3) 15,072 14,573 926,736 927,964 941,808 942,537 (1) Provisions for contingencies: The tax contingencies correspond to litigation and tax criteria related to the tax treatment applicable to direct and indirect taxes, which are found in both administrative and judicial stage. The civil contingencies correspond to different demands of civil order filed against the Company.The labor contingencies correspond to different demands of labor order filed against the Company. Provisions are recognized in the consolidated income statement in administrative expenses or tax expenses, as appropriate. The Company maintains other judicial processes, individually and cumulatively , do not have a significant impact on these financial statements (2) Provision made for proceedings brought by the European Commission for possible breaches of free competition in the freight market. (3) Total other provision as of December 31, 2023, and December 31, 2022, include the fair value of the contingencies arising at the time of the business combination with TAM S.A and subsidiaries,with a probability of loss under 50%, which are not recognized in the normal course of IFRS Accounting ANNUAL REPORT 2023 13 —Financial reports —Financial statements Standards application and which only in the context of a business combination should be recognized under IFRS Accounting Standards. 73 Movement of provisions: Deferred Revenue Movement 74 Deferred revenue Opening balance as of January 1, 2022 Increase in provisions Provision used Difference by subsidiaries conversion Reversal of provision Exchange difference Closing balance as of December 31, 2022 Opening balance as of January 1, 2023 Increase in provisions Provision used Difference by subsidiaries conversion Reversal of provision Exchange difference Closing balance as of December 31, 2023 Legal claims (1) ThUS$ European Commission Investigation (1) ThUS$ Total ThUS$ 731,153 687,558 (63,087) 28,655 (427,979) (16,160) 940,140 940,140 449,406 (70,844) (69,563) (310,118) 310 939,331 9,300 — — — (6,630) (273) 2,397 2,397 — — — — 80 2,477 740,453 687,558 (63,087) 28,655 (434,609) (16,433) 942,537 942,537 449,406 (70,844) (69,563) (310,118) 390 941,808 (1) See details of litigation and government investigations with a material impact in Note 30. NOTE 21 - OTHER NON-FINANCIAL LIABILITIES Current liabilities As of As of December December 31, 2022 31, 2023 ThUS$ ThUS$ Non-current liabilities As of As of December December 31, 2022 31, 2023 ThUS$ ThUS$ Total Liabilities As of December 31, 2023 ThUS$ As of December 31, 2022 ThUS$ Deferred revenue (1)(2) Sales tax Retentions Other taxes Dividends payable Other sundry liabilities Total other non-financial liabilities 3,044,664 17,801 48,649 6,892 174,549 9,351 3,301,906 2,533,081 7,194 40,810 12,045 — 49,121 2,642,251 348,936 — — — — — 348,936 420,208 — — — — — 420,208 3,393,600 17,801 48,649 6,892 174,549 9,351 3,650,842 2,953,289 7,194 40,810 12,045 — 49,121 3,062,459 Initial balance ThUS$ (1) Recognition ThUS$ Use ThUS$ Loyalty program (Award and redeem) ThUS$ Expiration of tickets ThUS$ Translation Difference ThUS$ Others provisions ThUS$ Final balance ThUS$ From January 1 to December 31, 2022 From January 1 to December 31, 2023 2,785,193 9,772,469 (9,077,188) (241,201) (314,027) 4,585 23,458 2,953,289 2,953,289 14,238,959 (13,505,496) 17,680 (391,998) 84,988 (3,822) 3,393,600 (1) The balance includes mainly, deferred revenue for services not provided as of December 31, 2023 and December 31, 2022 and for the frequent flyer LATAM Pass program. LATAM Pass is LATAM's frequent flyer program that allows rewarding the preference and loyalty of its customers with multiple benefits and privileges, through the accumulation of miles or points that can be exchanged for tickets or for a varied range of products and services. Clients accumulate miles or points LATAM Pass every time they fly in LATAM and other airlines associated with the program, as well as by buying in stores or use the services of a vast network of companies that have agreements with the program around the world. (2) As of December 31, 2023, Deferred Income includes Th US$40,500 related to the compensation from Delta Air Lines, Inc., which is recognized in the income statement based on the estimation of income differentials until the implementation of the strategic alliance. NOTE 22 - EMPLOYEE BENEFITS Retirements payments Resignation payments Other obligations Total liability for employee benefits As of December 31, 2023 ThUS$ As of December 31, 2022 ThUS$ 57,785 11,537 53,296 122,618 45,076 6,365 42,047 93,488 (a) The movement in retirements, resignations and other obligations: Increase (decrease) current service provision ThUS$ Opening balance ThUS$ Benefits paid ThUS$ Actuarial (gains) losses ThUS$ Currency translation ThUS$ Closing balance ThUS$ From January 1 to December 31, 2022 From January 1 to December 31, 2023 56,233 93,488 53,254 58,436 (4,375) (6,701) (9,935) (21,198) 93,488 (1,689) (1,407) 122,618 215 ANNUAL REPORT 2023 13 —Financial reports —Financial statements The main assumptions used in the calculation of the provision in Chile are presented below: 75 Assumptions Discount rate Expected rate of salary increase Rate of turnover Mortality rate Inflation rate Retirement age of women Retirement age of men For the year ended At December 31, 2023 2022 5.40 % 3.00 % 5.02 % RV-2020 2.99 % 60 65 5.37 % 5.23 % 5.14 % RV-2014 3.61 % 60 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. The sensitivity analysis for these variables is presented below: Discount rate Change in the accrued liability an closing for increase in 100 b.p. Change in the accrued liability an closing for decrease of 100 b.p. Rate of wage growth Change in the accrued liability an closing for increase in 100 b.p. Change in the accrued liability an closing for decrease of 100 b.p. (b) The liability for short-term: Effect on the liability As of As of December 31, December 31, 2023 2022 ThUS$ ThUS$ (3,913) 4,369 4,133 (3,811) (3,308) 3,724 3,520 (3,216) As of December 31, 2023 ThUS$ As of December 31, 2022 ThUS$ Profit-sharing and bonuses (*) 114,769 81,508 (*) Accounts payables to employees (Note 19 letter b) The participation in profits and bonuses related to an annual incentive plan for achievement of certain objectives. 216 (c) CIP (Corporate Incentive Plan) 76 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) ii) Non-Executive Employees: The first subprogram was aimed at non-executive employees who, while hired in LATAM as of December 31, 2020, were still in their position as of April 30, 2023, which includes a fixed and guaranteed payment in cash on certain dates, depending on the country where the employee is hired. This subprogram is available to those employees who were unable to qualify for one of the two categories below, or who were able to do so, chose not to participate in them. Executives Not part of the GEM: The second subprogram applies to senior executives not part of the GEM (Global Executive Meeting – Senior Managers, Managers, Assistant Managers). This program contemplates the creation of remuneration synthetic Units (hereinafter, simply "Units") that, by reference, are considered as equivalent to the price of one share of LATAM Airlines Group S.A., and consequently, in case they become effective, they grant the worker the right to receive the payment in cash that results from multiplying the number of Units that become effective by the value per share of LATAM Airlines Group S.A. that should be considered in accordance with CIP. In this context, this program contemplates two different bonuses: (1) a withholding bonus, consisting of the amount in cash resulting from Units that are assigned to the respective employee, these Units being paid at 20% at month 15 and 80% at month 24, in each case, counted from the exit date of Chapter 11 Procedure (i.e., November 3, 2022) (the "Exit Date"). This is consequently a guaranteed payment for these employees; and (2) a bonus associated with the certain financial indicators of LATAM Airlines Group S.A. and its subsidiaries, which is reflected in Note 19 (b), becoming effective 20% at month 15 and 80% at month 24, in each case, from the Exit Date. Consequently, this is an eventual payment that is only made if these indicators are reached. iii) GEM Executives: The third subprogram applies to the Company´s GEM executives (Global Executive Meeting) (CEO and employees whose job description is "vice presidents" or "directors"). This program, in essence, contemplates the creation of remuneration synthetic Units that, by referential means, are considered as equivalent to the price of one share of LATAM Airlines Group S.A. and consequently, in case they become effective, they grant the worker the right to receive the payment in cash that results from multiplying the number of Units that become effective by the value per share of LATAM Airlines Group S.A. that must be considered according to the CIP. These Units are divided into: (1) Units associated with the employee's permanence in the Company ("RSUs" – Retention Shares Units); and (2) Units associated with both the employee's permanence in the Company and the performance of LATAM Airlines Group S.A. ("PSUs" – Performance Shares Units). This performance ANNUAL REPORT 2023 13 —Financial reports —Financial statements 77 is ultimately measured according to the share price of LATAM Airlines Group S.A. in the terms and conditions of the CIP. Both the RSUs and the PSUs are consequently associated with the passage of time, becoming effective by partialities according to the calendar contemplated by the CIP. For the case of RSUs, having a vesting guaranteed by partialities as explained in more detail in Note 33. On the other hand, the PSUs also consider the market value of the share of LATAM Airlines Group S.A. considering a liquid market. However, as long as there is no such liquid market, the share price will be determined on the basis of representative transactions. As explained in more detail in Note 33, PSUs constitute a contingent and non-guaranteed payment. In addition, some GEM Executives will also be entitled to receive a fixed and guaranteed cash payment ("MPP" – Management Protection Plan) on certain dates according to the CIP. Those employees who are eligible for this MPP will also be eligible for a limited number of additional MSUs ("MPP Based RSUs"). In all cases, the respective employees must have remained as such in the Company at the corresponding accrual date to qualify for these benefits. During the year of 2023 until the month of December, the amount accrued related to this CIP was MUS$ 66.8, which is recorded in the "Administrative expenses" line of the Consolidated Statement of Income by Function. As of December 31, 2023, the amount of this plan recorded in the consolidated statement of financial position is MUS$ 118.9. (d) Employment expenses are detailed below: For the year ended at December 31, 2023 ThUS$ 2022 ThUS$ 1,268,343 181,565 133,429 1,583,337 1,024,304 121,882 120,150 1,266,336 Salaries and wages Short-term employee benefits Other personnel expenses Total NOTE 23 - ACCOUNTS PAYABLE, NON-CURRENT Aircraft and engine maintenance Fleet (JOL) Airport and Overflight Taxes Provision for vacations and bonuses Other sundry liabilities Total accounts payable, non-current As of December 31, 2023 ThUS$ As of December 31, 2022 ThUS$ 348,578 40,000 11,337 18,518 154 418,587 249,710 40,000 19,866 16,539 169 326,284 217 78 NOTE 24 - EQUITY (a) Capital The Company’s objective is to maintain an appropriate level of capitalization that enables it to ensure access to the financial markets for carrying out its medium and long-term objectives, optimizing the return for its shareholders and maintaining a solid financial position. The paid capital of the Company at December 31, 2023, amounts to ThUS$ 5,003,534 divided into 604,437,877,587 common stock of a same series (ThUS$ 13,298,486 divided into 604,437,584,048 shares as of December 31, 2022), a single series nominative, ordinary character with no par value. The total number of authorized shares of the Company as of December 31, 2023, corresponds to 604,441,789,335 shares. There are no special series of shares and no privileges. The form of its stock certificates and their issuance, exchange, disablement, loss, replacement and other similar circumstances, as well as the transfer of the shares, is governed by the provisions of the Corporate Law and its regulations. At the Company's Extraordinary Shareholders' Meeting held on July 5, 2022, it was agreed to increase the Company's capital by ThUS$ 10,293,270 through the issuance of 73,809,875,794 paid shares and 531,991,409,513 backup shares, all ordinary, of the same and single series, without par value, of which: (a) ThUS$ 9,493,270 represented by 531,991,409,513 new shares, to be used to respond to the conversion of the Convertible Notes, according to this term is defined below (the “Support Shares”); and (b) ThUS$800,000 represented by 73,809,875,794 new paid shares (the “New Paid Shares”), to be offered preferentially to shareholders. On September 13, 2022, the preferential placement of the convertible notes and, in turn, of the new paid shares began, ending on the following dates, as explained below: 1. On October 12, 2022 expired the 30-day preemptive rights offering period (the “POP”) of (i) the 73,809,875,794 new paid shares, issued and registered in the Securities Registry of the Comisión para el Mercado Financiero (“CMF”) (the “ERO”); and (ii) 1,257,002,540 notes convertible into shares Serie G, 1,372,839,695 notes convertible into shares Serie H, and the 6,863,427,289 notes convertible into shares Serie I, all registered in the Securities Registry of the CMF (jointly, the “Convertible Notes”). 2. On October 13, 2022, the second round (the “Second Round”) of subscription of the ERO has taken place, in which had the right to participate, the shareholders (or their assignees) that subscribed ERO in the POP and expressed to LATAM, at the time of the subscription, their intention to participate in the Second Round. 3. As previously reported, the Remainder will be placed, in compliance with the applicable laws and regulations, according to the rules governing the offering of the ERO and the Convertible Notes, as provided in Article 10 of the Regulations of the Corporations Law. Such placement includes, among other things, the placement of a portion of the Remainder with (i) a group of unsecured creditors of LATAM represented by Evercore and certain holders of Chilean notes issued by LATAM (collectively, the “Backstop Creditors”); and (ii) Delta Air Lines, Inc., Qatar Airways Investments (UK) Ltd. and the Cueto group (collectively, the “Backstop Shareholders”;and them jointly with the Backstop Creditors, the “Backstop Parties”) according to the rules of their respective backstop commitment agreements (the “Backstop Agreements”). 4. For purposes of the above, the Company will exercise its rights under the Backstop Agreements and will therefore require the Backstop Parties to subscribe and pay their respective portion of the Remainder, as provided in such agreements. Given the funding period contemplated in the Backstop Agreements, the Company managed to exit the Chapter 11 on November 3, 2022. Consequently, on this same date the Company, together with its various subsidiaries that were part of the Chapter 11 Procedure, have emerged from bankruptcy. 5. As part of the implementation of its Reorganization Plan within the framework of the exit from Chapter 11, LATAM issued MUS$800 in new paid shares and ThUS$9,493,270 through the issue of three classes of notes convertible into Company shares, backed by 531,991,409,513 shares totaling of 605,801,285,307 shares. As of December 31, 2023, of the aforementioned capital increase, 603,831,469,894 shares were subscribed and paid (603,831,176,355 shares as of December 31, 2022), equivalent to ThUS$10,169,622 as of December 31, 2023 (ThUS$10,152,221 as of December 31, ANNUAL REPORT 2023 13 —Financial reports —Financial statements 2022) and as of December 31, 2022 costs of issuance and placement of shares and convertible bonds were generated for ThUS$ 810,279, which are presented as part of the Other reserves and was reclassified to "paid-in capital" according to the Extraordinary Shareholders' Meeting held on April 20, 2023, as explained below 79 6. At the Company's Extraordinary Shareholders' Meeting held on April 20, 2023, it was agreed to: 6.i) A decrease in the Company's capital for an amount of ThUS$ 7,501,896, without altering the number and characteristics of the shares into which it is divided, by absorbing the Company's accumulated losses as of December 31, 2022 for the same amount; 6.ii) Others decrease of the Company's capital for an amount of ThUS$ 178, without altering the number and characteristics of the shares into which it is divided, through the absorption of the equity account of "Treasury Shares" as of December 31, 2022 for the same amount, produced on the occasion of the January 2013 reduction of capital stock by operation of law that took place in accordance with the provisions of Article 27 of the Corporations Law. 6.iii) Deduction of the Company´s capital the account "Costs of issuing shares and new convertible notes, for an amount of ThUS$ 810,279. On September 6, 2023, by public deed granted at the Notary of Santiago of Mr. Eduardo Diez Morello, under repertoire number 15,327-2023 entitled "Declaración de Colocación y Vencimiento Plazo de Colocación Bonos Convertibles "Series G", "Series H" and "Series I" and Reducción de Capital de Pleno Derecho", it was realized that on September 5, 2023 the maturity of the placement term (the "Placement Term") of Convertible Notes. Consequently, in accordance with the mentioned in number Four of Clause Six of the respective notes issuance contract (the "Issuance Agreement"), as of that date the amount placed against it remained unchanged, and consequently the Convertible Notes not placed on that date were null and void. For the sake of completeness, it was declared that upon maturity of the Placement Term, 123,605,720 Series G Convertible Notes and 37 Series I Convertible Notes (collectively, the "Unplaced Convertible Notes") remained unplaced, for an amount of US$ 123,605,720 and US$37, respectively (hereinafter, together, the "Unplaced Amount"). The conversion option of the Unplaced Convertible Notes was backed by 1,965,903,665 shares as equity. Likewise, in the aforementioned deed it was realized that since all the Unplaced Convertible Bonds have been terminated, since they have been null and void, they cannot be converted into shares of the issuer, consequently reducing the Company's Capital Share by an amount equal to the Unplaced Amount. Therefore, as of September 6, 2023, the amount of the Share Capital has been reduced by law in the amount of ThUS$ 123,606, equivalent to 1,965,903,665 shares. As a result of the foregoing, as of December 31, 2023, the total statutory share capital of the Company was reduced by law from the amount of ThUS$ 5,127,182, divided into 606,407,693,000 shares, of the same and unique series, without par value, to the amount of ThUS$ 5,003,576, divided into 604,441,789,335 shares, of which MUS$ 5,003,534, equivalent to 604,437,877,587 shares, are fully paid. To date, the balance of MUS$ 42, equivalent to 3,911,748 shares, are pending of subscription and payment and are intended exclusively to respond to the conversion of 42,398 Series H Convertible Notes. 218 (b) Movement of authorized shares 80 The following table shows the movement of the authorized, fully paid shares and back-up shares to be delivered in the event that the respective conversion option is exercised under the convertible notes currently issued by the Company: As of December 31, 2023 N° of convertible notes back- up shares pending to place N° of Subscribed of shares and paid or delivered pursuant to the exercise of the conversion option N° of authorized shares As of December 31, 2022 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 606,407,693,000 604,437,584,048 4,205,287 1,965,903,665 606,407,693 606,407,693 Opening Balance New shares issued Convertible Notes G Convertible Notes H Convertible Notes I Reduction of full right (*) Subtotal — — — — (1,965,903,665) (1,965,903,665) — — — — — — — — — — 73,809,875,794 73,809,875,794 19,992,142,087 18,026,240,520 — 1,965,901,567 293,539 (293,539) — 126,661,409,136 126,657,203,849 4,205,287 — — — — 385,337,858,290 385,337,856,192 — (1,965,903,665) — — — — — 2,098 — 293,539 (293,539) (1,965,903,665) 605,801,285,307 603,831,176,355 4,205,287 1,965,903,665 Closing 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 (*) See letter (a) above, in the same Note. (c) Share capital The following table shows the movement of share capital: Initial balance as of January 1, 2022 New shares issued (ERO) Conversion options of convertible notes exercised during the year - Convertible Notes G (1) Conversion options of convertible notes exercised during the year - Convertible Notes H Conversion options of convertible notes exercised during the year - Convertible Notes I (2) Subtotal Ending balance as of December 31, 2022 Initial balance as of January 1, 2023 Placement during the conversion options period - Convertible Notes G Absorption of Accumulated Losses as of December 31, 2022 (3) Absorption of treasury shares (3) Deduction of issuance and placement costs of shares and bonds convertible into shares (3) Subtotal Ending balance as of December 31, 2023 Paid- in Capital ThUS$ 3,146,265 800,000 1,115,996 1,372,798 6,863,427 10,152,221 13,298,486 13,298,486 17,401 (7,501,896) (178) (810,279) (8,294,952) 5,003,534 (1) It only includes Convertible Notes bonds delivered as payment of debts recognized in Chapter 11. (2) Part of the Convertible Notes were to extinguish through exchange credits that were recognized in Chapter 11. (3) As explained in letter a) of this Note, at the Company's Extraordinary Shareholders' Meeting held on April 20, 2023, it was agreed to absorb retained losses and reduce the Company's capital. ANNUAL REPORT 2023 13 —Financial reports —Financial statements (d) Treasury stock 81 At December 31, 2023, the Company held no treasury stock. The remaining of ThUS$ (178) corresponds to the difference between the amount paid for the shares and their book value, at the time of the full right decrease of the shares which held in its portfolio. As explained in letter a) of this same Note, at the Company's Extraordinary Shareholders' Meeting held on April 20, 2023, an absorption of the Company's capital was agreed for an amount of ThUS$ 178. (e) Other equity- Value of conversion right - Convertible Notes (e.1) Notes subscription The Convertible Notes were issued to be place in exchange for a cash contribution, in exchange for settlement of Chapter 11 Proceeding or a combination of both. Convertible Notes issued in exchange for cash were valued at fair value (the cash received). Notes issued in exchange for settlement of Chapter 11 claims were valued considering the discount that each group of liabilities settled on at the emergence date. The table below shows the 3 Convertible Notes at their nominal values, the adjustment, if any, to arrive at their fair values and the amount of transaction costs. The conversion option classified as equity is determined by deducting the amount of the liability component from the fair value of the compound instrument as a whole. The equity portion is recognized under Other equity at the time the Convertible Notes are issued. Concepts Face Value Adjustment to fair value Convertible Notes at the date of issue Issuance cost Subtotal Fair Value of Notes Debt component at the date of issue Equity component at the date of issue Concepts Face Value Adjustment to fair value Convertible Notes at the date of issue Subtotal Fair Value of Notes Equity component at the date of issue As of December 31, 2022 Convertible Notes G ThUS$ 1,115,996 Convertible Notes H ThUS$ 1,372,837 Convertible Notes I ThUS$ 6,863,427 Total Convertible Notes ThUS$ 9,352,260 (923,616) — — (923,616) 192,380 — 192,380 (24,812) (24,812) 1,348,025 (102,031) 1,245,994 (2,686,854) (705,467) (3,392,321) 3,471,106 — 3,471,106 (3,610,470) (730,279) (4,340,749) 5,011,511 (102,031) 4,909,480 As of December 31, 2023 Convertible Notes H ThUS$ Convertible Notes I ThUS$ Total Convertible Notes ThUS$ — — — — — — — — — — 17,401 (14,401) (14,401) 3,000 3,000 Convertible Notes G ThUS$ 17,401 (14,401) (14,401) 3,000 3,000 (e.2) Conversion of notes into shares 82 As of December 31, 2023 and December 31, 2022, the following notes have been converted into shares: Concepts Conversion percentage Conversion option of convertible notes exercised Total Converted Notes Concepts Conversion percentage Conversion option of convertible notes exercised Converted debt component Total Converted Notes As of December 31, 2023 Convertible Notes G ThUS$ 100.000% Convertible Notes H ThUS$ 99.997% Convertible Notes I ThUS$ 100.000% Total Convertible Notes ThUS$ 1,133,397 1,133,397 1,372,798 1,372,798 6,863,427 6,863,427 9,369,622 9,369,622 As of December 31, 2022 Convertible Notes G ThUS$ Convertible Notes H ThUS$ 88.782% 99.997% Convertible Notes I ThUS$ 100.000% Total Convertible Notes ThUS$ 1,115,996 — 1,115,996 1,270,767 102,031 1,372,798 6,863,427 — 6,863,427 9,250,190 102,031 9,352,221 The conversion option from the issuance of convertible notes classified as equity is determined by deducting the amount of the liability component from the fair value of the compound instrument (i.e. convertible notes) as a whole. This is recognized and included in equity, net of income tax effects, and is not subsequently remeasured. In addition, the conversion option classified as equity will remain in equity until the conversion option is exercised, in which case, the balance recognized in equity will be transferred to share capital. To the date of issuance of these financial statements, the portion not converted into equity corresponds to ThUS$39. (e.3) The Convertible Notes The contractual conditions of the G, H and I Convertible Notes consider the delivery of a fixed number of shares of LATAM Airlines Group S.A. at the time of settlement of the conversion option of each of them. The foregoing determined the classification of convertible notes as equity instruments, with the exception of Bond H, which considers, in addition to the delivery of a fixed number of shares, the payment of 1% annual interest with certain conditions for its payment and its accrual from 60 days after the exit Date. The payment of this interest gives rise to the recognition of a liability component for the class H convertible notes. At the date of issue, the fair value of the liability component in the amount of ThUS$ 102,031 was estimated using the prevailing market interest rate for similar non-convertible instruments. Transaction costs relating to the liability component are included in the carrying amount of the liability portion and amortized over the period of the convertible notes using the effective interest method. 219 ANNUAL REPORT 2023 13 —Financial reports —Financial statements (f) Reserve of share- based payments Movement of Reserves of share- based payments: 83 Periods From January 1 to December 31, 2022 From January 1 to December 31, 2023 Opening balance ThUS$ 37,235 37,235 Stock option plan ThUS$ Closing balance ThUS$ — — 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 From January 1 to December 31, 2022 From January 1 to December 31, 2023 Transactions with non-controlling interest ThUS$ Legal reserves ThUS$ Other sundry reserves ThUS$ Others increases (Decreases) (5) ThUS$ Opening balance ThUS$ Closing balance ThUS$ 2,448,098 — — (4,420,749) — (1,972,651) (1,972,651) 16,648 (14,401) 800,388 (1,170,016) Balance of Other sundry reserves comprise the following: Higher value for TAM S.A. share exchange (1) Reserve for the adjustment to the value of fixed assets (2) Transactions with non-controlling interest (3) Adjustment to the fair value of the New Convertible Notes (4) Cost of issuing shares and New Convertible Notes (5) Others Total As of December 31, 2023 ThUS$ As of December 31, 2022 ThUS$ 2,665,692 2,620 (211,582) (3,624,871) — (1,875) (1,170,016) 2,665,692 2,620 (216,656) (3,610,470) (810,279) (3,558) (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. Corresponds to the technical revaluation of the fixed assets authorized by the Commission for the (2) 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. The balance as of December 31, 2022 corresponds to the loss generated by: Lan Pax Group S.A. e (3) Inversiones Lan S.A. in the acquisition of shares of Aerovías de Integración Regional S.A. Aires S.A. for ThUS$ (3,480) and ThUS$ (20), respectively; the acquisition of TAM S.A. of the minority interest in Aerolinhas Brasileiras S.A. for ThUS$ (885), the acquisition of Inversiones Lan S.A. of the minority 220 84 participation in Aerovías de Integración Regional S.A. Aires S.A. for an amount of ThUS$ (2) and the acquisition of a minority stake in Aerolane S.A. by Lan Pax Group S.A. for an amount of ThUS$ (21,526) through Holdco Ecuador S.A. (3) The loss due to the acquisition of the minority interest of Multiplus S.A. for ThUS$ (184,135) (see Note 1), (4) and the acquisition of a minority interest in LATAM Airlines Perú S.A. through LATAM Airlines Group S.A for an amount of ThUS$ (3,225) and acquisition of the minority stake in LAN Argentina S.A. and Inversora Cordillera through Transportes Aéreos del Mercosur S.A. for an amount of ThUS$ (3,383). The movements during 2023 was the following: (5) acquisition of the non-controlling interest of Aerovías de Integración Regional S.A. Aires S.A. for an amount of ThUS$(23) and (6) amendment of articles in the legal statutes of association related to premiums for the issuance of shares in the subsidiaries Aerovías de Integración Regional S.A. Aires S.A. for a total amount of ThUS$ 5.097. (4) The adjustment to the fair value of the Convertible Notes delivered in exchange for settlement of Chapter 11 claims was valued considering the discount that each group of liabilities settled on at the emergence date. These relate to: gain on the haircut for the accounts payable and other accounts payable for Th US$2,564,707 (ThUS$ 2,550,306 as of December 31, 2022), gain on the haircut for the financial liabilities for ThUS$ 420,436 and gain on the haircut of lease liabilities which is booked against the right of use asset for ThUS$ 639,728 as of December 31, 2023 and December 31, 2022. (5) Corresponds to 20% of the sum of the commitment of new funds of the Backstop Parties under the Series I Convertible Bonds and the New Paid Shares, plus additional costs for extension of the Backstop agreement. At the Company's Extraordinary Shareholders' Meeting held on April 20, 2023, it was agreed to deduct from the paid-in capital of the Company the account "Costs of issuance and placement of shares and bonds convertible into shares", for the sum of ThUS$810,279. (h) Reserves with effect in other comprehensive income. Movement of Reserves with effect in other comprehensive income: Currency translation reserve ThUS$ (3,772,159) Gains (Losses) on change on value of time value of options ThUS$ Actuarial gain or loss on defined benefit plans reserve ThUS$ Cash flow hedging reserve ThUS$ (38,390) (17,563) (18,750) Total ThUS$ (3,846,862) Opening balance as of January 1, 2022 Change in fair value of hedging instrument recognized in OCI Add: Costs of hedging deferred and recognized in OCI Reclassified from OCI to profit or loss Reclassified from OCI to the value of the hedged asset Deferred tax Actuarial reserves by employee benefit plans Deferred tax actuarial IAS by employee benefit plans Translation difference subsidiaries Closing balance as of December 31, 2022 (33,401) (3,805,560) Opening balance as of January 1, 2023 Change in fair value of hedging instrument recognized in OCI Reclassified from OCI to profit or loss Reclassified from OCI to the value of the hedged asset Deferred tax Actuarial reserves by employee benefit plans Deferred tax actuarial IAS by employee benefit plans Translation difference subsidiaries Closing balance as of December 31, 2023 (25,051) (3,830,611) — — — — — — — — — — — — — 51,323 (23,845) — 31,293 (8,143) (235) — — 694 36,542 — 19,946 — — — — (160) (21,622) — — — 27,478 — 51,239 — — (9,933) 566 — (28,117) (8,143) (235) (9,933) 566 (32,867) (3,818,757) (32,858) (26,568) (11,112) 3,604 (8,286) (38,678) 25,734 28,818 — — — — 17 32,947 — — — — (21,192) 750 — (48,559) (7,124) 2,250 (11,112) 3,604 (21,192) 750 (33,320) (3,884,901) (3,805,560) 36,542 (21,622) (28,117) (3,818,757) ANNUAL REPORT 2023 13 —Financial reports —Financial statements (h.1) Cumulative translate difference 85 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 From January 1 to December 31, 2022 From January 1 to December 31, 2023 Opening balance ThUS$ Result for the period ThUS$ Others increase (decreases) (1) ThUS$ Dividends ThUS$ Closing balance ThUS$ (8,841,106) 1,339,210 — — (7,501,896) (7,501,896) 581,831 (174,549) 7,559,025 464,411 (1) The detail of Other increases (decreases) is as follows: ThUS$ 7,501,896 57,129 7,559,025 Absorption accumulated losses (*) Out of Period Adjustment (**) Total (*) See letter a) under this same Note. (**) Out of Period Adjustment On April 30, 2020, LATAM's Shareholders approved the distribution of a dividend in the amount of ThUS$ 57,129 to be paid on May 28, 2020. On May 26, 2020, LATAM entered Chapter 11 proceedings which granted an automatic stay prohibiting the Company from making dividend payments. At that time it was not clear when this dividend would be paid. On November 3, 2022, upon emergence from Chapter 11 it was clear this dividend would not be paid, however, it was not derecognized from liabilities and transferred to retained earnings at that time. During the three months ended March 31, 2023, the Company corrected this matter and recorded an out of period adjustment to derecognized the dividend payable resulting in an increase of ThUS$ 57,129 to retained earnings and a decrease in Trade and other accounts payable in the same amount. Management has evaluated the impact of this out-of-period adjustment and concluded that it is not material to the financial statements for the year ended December 31, 2023, or to any previously reported quarter, semester or annual financial statements. 221 (j) Dividends per share 86 Description of dividend Amount of the dividend (ThUS$)(*) Number of shares among which the dividend is distributed Dividend per share (US$) Minimum mandatory dividend 2023 Minimum mandatory dividend 2022 174,549 604,437,877,587 0.0003 — 604,437,584,048 0.0000 (*) It Corresponds to mandatory minimum dividend provision charged to the net income for the year 2023, As of the date of issuance of these financial statements, the Board of Directors has not yet approved a proposal for payment. NOTE 25 - REVENUE The detail of revenues is as follows: Passengers Cargo Total For the year ended at December 31, 2023 ThUS$ 2022 ThUS$ 10,215,148 1,425,393 11,640,541 7,636,429 1,726,092 9,362,521 NOTE 26 - COSTS AND EXPENSES BY NATURE (a) Costs and operating expenses The main operating costs and administrative expenses are detailed below: Aircraft fuel Other rentals and landing fees Aircraft maintenance Aircraft rental (*) Commissions Passenger services Other operating expenses Total For the year ended at December 31, 2023 ThUS$ 2022 ThUS$ (3,947,220) (1,322,795) (601,804) (91,876) (244,160) (271,838) (1,351,571) (7,831,264) (3,882,505) (1,036,158) (582,848) (202,845) (167,035) (184,357) (1,136,490) (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) ANNUAL REPORT 2023 13 —Financial reports —Financial statements 87 For the year ended at December 31, 2023 ThUS$ 2022 ThUS$ (16,632) (16,632) (17,959) (17,959) Payments for leases of low-value assets Total (b) Depreciation and amortization Depreciation and amortization are detailed below: Depreciation (*) Amortization Total For the year ended at December 31, 2023 ThUS$ 2022 ThUS$ (1,151,015) (54,358) (1,205,373) (1,125,154) (54,358) (1,179,512) (*) Included within this amount is the depreciation of the Property, plant and equipment (See Note 16 (a)) and the maintenance of the aircraft recognized as right of use assets. The maintenance cost amount included in the depreciation line for the period ended December 31, 2023 is ThUS$ 565,384 (ThUS$ 463.306 for the same period in 2022). (c) Financial costs The detail of financial costs is as follows: Bank loan interests Financial leases Lease liabilities Other financial instruments Total For the year ended at December 31, 2023 ThUS$ 2022 ThUS$ (400,052) (58,011) (224,824) (15,344) (698,231) (714,310) (45,384) (152,132) (30,577) (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. 222 (d) Gains (losses) from restructuring activities 88 Gains (losses) restructuring activities are detailed below: For the year ended at December 31, 2022 ThUS$ (483,068) (323,204) (80,407) (2,586) 2,550,306 18,893 1,679,934 Renegotiation of fleet contracts Legal advice Employee restructuring plan Rejection of IT contracts Gains resulting from the settlement of Chapter 11 claims (*) Others Total The Company did not recorded gains/(losses) restructuring activities during 2023. (e) Financial income Financial income is detailed below: Financial claims (*) Gains resulting from the settlement of Chapter 11 claims (**) Finance lease rate change effect Other miscellaneous income Total (*) See Note 34 (a.4.) (**) See Note 24 (g) For the year ended At December 31, 2023 ThUS$ — — — 125,356 125,356 2022 ThUS$ 491,326 420,436 49,824 90,709 1,052,295 ANNUAL REPORT 2023 13 —Financial reports —Financial statements (f) Other gains (losses) Other gains (losses) are detailed below: 89 Adjustment net realizable value fleet available for sale Other Total NOTE 27 - OTHER INCOME, BY FUNCTION Other income, by function is as follows: For the year ended At December 31, 2023 ThUS$ 2022 ThUS$ (39,163) (51,880) (91,043) (345,410) (1,667) (347,077) For the year ended at December 31, 2023 ThUS$ 2022 ThUS$ Tours Aircraft leasing Customs and warehousing Maintenance Income from non-airlines products LATAM Pass Other miscellaneous income (*) Total 36,297 — 27,553 7,784 15,148 61,859 148,641 24,068 18,164 30,323 7,995 23,954 49,782 154,286 (•) Included within this amount ThUS$30,408 as of December 31, 2022 related to the compensation of Delta Air Lines Inc. for the JBA signed during 2019. NOTE 28 - FOREIGN CURRENCY AND EXCHANGE RATE DIFFERENCES The functional currency of LATAM Airlines Group S.A. is the US dollar, LATAM has subsidiaries whose functional currency is different to the US dollar, such as the chilean peso, argentine peso, colombian peso, brazilian real and guaraní. The functional currency is defined as the currency of the primary economic environment in which an entity operates. For each entity and all other currencies are defined as a foreign currency. Considering the above, the balances by currency mentioned in this note correspond to the sum of foreign currency of each of the entities that are part of the LATAM Airlines Group S.A. and Subsidiaries. 223 Following are the current exchange rates for the US dollar, on the dates indicated: 90 Argentine peso Brazilian real Chilean peso Colombian peso Euro Australian dollar Boliviano Mexican peso New Zealand dollar Peruvian Sol Paraguayan Guarani Uruguayan peso Foreign currency As of December 31, As of December 31, 2021 2022 807.98 4.85 877.12 3,872.49 0.90 1.46 6.86 16.91 1.58 3.70 7,270.6 38.81 177.12 5.29 855.86 4,845.35 0.93 1.47 6.86 19.50 1.58 3.81 7,332.2 39.71 102.75 5.57 844.69 4,002.52 0.88 1.38 6.86 20.53 1.46 3.98 6,866.40 44.43 The foreign currency detail of balances of monetary items in current and non-current assets is as follows: Current assets Cash and cash equivalents Argentine peso Brazilian real Chilean peso Colombian peso Euro U.S. dollar Other currency Other financial assets, current Chilean peso Euro U.S. dollar Other currency Other non - financial assets, current Brazilian real Chilean peso Euro U.S. dollar Other currency As of December 31, 2023 ThUS$ As of December 31, 2022 ThUS$ 386,216 1,808 7,108 47,907 8,968 25,329 237,251 57,845 14,659 4,367 3,722 5,971 599 36,654 719 12,354 5,310 10,735 7,536 265,371 6,712 3,355 17,591 8,415 19,361 168,139 41,798 331,617 5,778 2,483 322,796 560 19,425 2,303 3,341 622 4,369 8,790 ANNUAL REPORT 2023 13 —Financial reports —Financial statements 91 92 Trade and other accounts receivable, current Argentine peso Brazilian real Chilean peso Colombian peso Euro U.S. dollar Other currency Accounts receivable from related entities, current Chilean peso U.S. dollar Tax current assets Chilean peso Colombian peso Peruvian sun Other currency Total current assets Argentine peso Brazilian real Chilean peso Colombian peso Euro U.S. Dollar Other currency 279,586 12,831 620 69,588 1,453 90,699 68,893 35,502 27 27 — 17,258 2,202 6,084 7,108 1,864 734,400 14,639 8,447 136,445 16,505 125,060 322,850 110,454 143,631 25,035 10,669 31,258 176 12,506 25,549 38,438 138 31 107 15,623 1,569 1,921 10,300 1,833 775,805 31,747 16,327 59,568 10,512 34,972 520,960 101,719 Non-current assets Other financial assets, non-current Brazilian real Chilean peso Colombian peso Euro U.S. dollar Other currency Other non - financial assets, non-current Argentine peso Brazilian real U.S. dollar Other currency Accounts receivable, non-current Chilean peso Deferred tax assets Colombian peso U.S. dollar Other currency Total non-current assets Argentine peso Brazilian real Chilean peso Colombian peso Euro U.S. dollar Other currency As of December 31, 2023 ThUS$ As of December 31, 2022 ThUS$ 15,375 3,807 2,073 841 4,252 2,071 2,331 9,856 1 9,789 15 51 4,732 4,732 1,048 859 144 45 31,011 1 13,596 6,805 1,700 4,252 2,230 2,427 13,366 3,495 69 1,344 4,308 2,050 2,100 11,909 12 8,082 3,815 — 4,526 4,526 2,948 2,567 20 361 32,749 12 11,577 4,595 3,911 4,308 5,885 2,461 224 ANNUAL REPORT 2023 13 —Financial reports —Financial statements The foreign currency detail of balances of monetary items in current liabilities and non-current is as follows: 93 Up to 90 days 91 days to 1 year As of December 31, 2023 ThUS$ As of December 31, 2022 ThUS$ As of December 31, 2023 ThUS$ As of December 31, 2022 ThUS$ Current liabilities Other financial liabilities, current Chilean peso U.S. dollar Other currency Trade and other accounts payables, current Argentine peso Brazilian real Chilean peso Colombian peso Euro U.S. dollar Peruvian sol Mexican peso Pound sterling Uruguayan peso Other currency Accounts payable to related entities, current Chilean peso U.S. dollar Other provisions, current Chilean peso Other currency Current liabilities Other non-financial liabilities, current Argentine peso Chilean peso Colombian peso U.S. dollar Other currency Total current liabilities Argentine peso Brazilian real Chilean peso Colombian peso Euro U.S. dollar Other currency 4,331 1,364 2,510 457 616,032 2,074 13,401 128,838 197 54,744 350,635 42,347 2,019 17,379 706 3,692 5,154 — 5,154 16 — 16 15,634 836 4,338 1,456 7,305 1,699 641,167 2,910 13,401 134,540 1,653 54,744 365,604 68,315 17,062 10,697 5,558 807 720,688 45,345 48,511 146,395 2,330 29,502 328,540 7,426 12,969 37,788 1,199 60,683 6 6 — 29 — 29 16,315 87 1,568 294 12,975 1,391 754,100 45,432 48,511 158,666 2,624 29,502 347,073 122,292 1,010 702 — 308 9,583 132 922 1,560 — 7 1,797 4,994 — 11 39 121 — — — 12,429 4 12,425 6,099 445 4,026 1,066 416 146 29,121 577 922 6,292 1,066 7 2,213 18,044 602 602 — — 20,995 3,446 651 1,231 31 11 2,883 10,886 75 19 1,110 652 — — — 11,655 29 11,626 9,071 6,563 178 798 1,063 469 42,323 10,009 651 2,040 829 11 3,946 24,837 225 94 More than 1 to 3 years As of As of December December 31, 2022 31, 2023 ThUS$ ThUS$ More than 3 to 5 years As of As of December December 31, 2022 31, 2023 ThUS$ ThUS$ More than 5 years As of December 31, 2023 ThUS$ As of December 31, 2022 ThUS$ Non-current liabilities Other financial liabilities, non-current Chilean peso Brazilian real Euro U.S. dollar Other currency Accounts payable, non- current Chilean peso U.S. dollar Other currency Other provisions, non- current Argentine peso Brazilian real Chilean peso Colombian peso Euro U.S. dollar Provisions for employees benefits, non-current Chilean peso U.S. dollar Total non-current liabilities Argentine peso Brazilian real Chilean peso Colombian peso Euro U.S. dollar Other currency 32,867 17,020 552 412 14,110 773 72,783 16,774 54,441 1,568 49,427 3,570 42,244 — 395 3,053 165 79,749 76,247 3,502 234,826 3,570 42,796 110,041 395 3,465 72,218 2,341 32,036 11,544 16 1,409 18,354 713 58,449 17,259 39,717 1,473 43,301 1,917 37,982 — 202 2,944 256 55,454 55,454 — 189,240 1,917 37,998 84,257 202 4,353 58,327 2,186 2,871 2,500 — 371 — — — — — — — — — — — — — — — — 2,871 — — 2,500 — 371 — — 774 774 — — — — — — — — — — — — — — — — — — 774 — — 774 — — — — 165,511 164,942 — 569 — — — — — — — — — — — — — — — — 170,437 170,437 — — — — — — — — — — — — — — — — 165,511 — — 164,942 — 569 — — 170,437 — — 170,437 — — — — ANNUAL REPORT 2023 95 As of December 31, 2023 ThUS$ As of December 31, 2022 ThUS$ General summary of foreign currency: 765,411 14,640 22,043 143,250 18,205 129,312 325,080 112,881 1,073,496 7,057 57,119 418,315 3,114 59,156 440,035 88,700 808,554 31,759 27,904 64,163 14,423 39,280 526,845 104,180 1,156,874 57,358 87,160 416,174 3,655 33,866 409,346 149,315 7,583 (35,076) (275,065) 15,091 70,156 (114,955) 24,181 (25,599) (59,256) (352,011) 10,768 5,414 117,499 (45,135) Total assets Argentine peso Brazilian real Chilean peso Colombian peso Euro U.S. dollar Other currency Total liabilities Argentine peso Brazilian real Chilean peso Colombian peso Euro U.S. dollar Other currency Net position Argentine peso Brazilian real Chilean peso Colombian peso Euro U.S. dollar Other currency 226 NOTE 29 – EARNINGS (LOSS) PER SHARE 96 For the year ended at December 31, 2023 2022 Basic earnings (loss) per share Income (Loss) attributable to owners of the parent (ThUS$) Weighted average number of shares, basic Basic earnings (loss) per share (US$) 581,831 1,339,210 604,437,869,545 0.000963 (*) 96,614,464,231 0.013861 (*) For the year ended at December 31, 2023 2022 Diluted earnings (loss) per share Income (Loss) attributable to owners of the parent (ThUS$) Weighted average number of shares, diluted Diluted earnings (loss) per share (US$) 581,831 1,339,210 (***) 604,441,789,335 0.000963 (**) 98,530,451,071 0.013592 (**) (*) As of December 31, 2023, the weighted average number of shares considers 604,437,584,048 shares outstanding from January 1, 2023 to December 31, 2023. From January 10, 2023 to December 31, 2023, the number of shares outstanding increased due to the partial conversion of the Convertible Note H (See movement of shares in Note 24).As of December 31, 2022, the weighted average number of shares considers 606,407,693 shares outstanding from January 1, 2022 until November 2, 2022. From November 3, 2022 until December 31, 2022 the number of shares outstanding increases due to the equity rights offering and then increases daily as the holders of the convertible notes convert them into shares (See movement of shares in Note 24). (**) As of December 31, 2023, the number of weighted diluted shares considers 604,437,584,048 shares from January 1, 2023 to December 31, 2023. From January 10, 2023 to December 31, 2023, the number of shares outstanding increased due to the partial conversion of the Convertibles Notes (See movement of shares in Note 24) and 3,911,748 shares outstanding from January 1, 2023 until December 31, 2023, assuming the full conversion of the Convertibles Notes that were issued on the date of exit from Chapter 11 (See movement of shares in Note 24). As of December 31, 2022, the weighted average number of fully diluted shares considers 606,407,693 shares outstanding from January 1, 2022 until November 2, 2022, and 605,801,285,307 shares outstanding from November 3, 2022 until December 31, 2022 which includes the equity rights offering and assumes the conversion of all Convertibles Notes that were issued upon emergence from Chapter 11 (See movement of shares in Note 24). (***) Income (Loss) attributable to owners of equity instruments of the parent company is unchanged when calculating diluted EPS because only Convertible Note H accrued interest. However, this Note was converted into shares immediately after issuance and therefore did not accrue interest during the year. ANNUAL REPORT 2023 NOTE 30 – CONTINGENCIES I. Lawsuits 1) Lawsuits filed by LATAM Airlines Group S.A. and Subsidiaries 97 Case Number - Company Court LATAM Finance Limited of Grand Court the Cayman Islands Amounts Committed (*) ThUS$ -0- Origin Stage of trial for Request a provisional bankruptcy process. On May 26, 2020, LATAM Finance Limited submitted a request for a provisional liquidation in the Grand Court of the Cayman Islands, covered in the reorganization proceeding filed before the Bankruptcy Court of the United States of America, which was accepted on May 27, 2020 by the Grand Court of the Cayman Islands. On September 28, 2020, LATAM Finance Limited filed a petition to suspend the liquidation. On October 9, 2020, the Grand Court of Cayman Islands accepted the petition and extended the status of temporary liquidation for a period of 6 months. On May 13, 2021, LATAM Finance Limited filed a petition to suspend the liquidation. On May 18, 2021, the Grand Court of Cayman Islands accepted the petition and extended the status of temporary liquidation until October 9, 2021. On December 1, 2021, LATAM Finance Limited filed a petition to suspend the liquidation, which was accepted by the Grand Court of Cayman Islands. This extended the status of the provisional liquidation through April 9, 2022. On August 22, 2022, LATAM Finance Limited petitioned for a suspension of the liquidation, which was granted by the Grand Court of the Cayman Islands. The provisional liquidation was extended to October 9, 2022 and the process continues in effect. That petition was sustained by the Grand Court of the Cayman Islands on October 4, 2022. On September 30, 2022, LATAM Finance Limited filed an application for validation of security obligations arising in connection with the DIP to Exit and new DIP facilities. On October 04, 2022, the Grand Court made an Order validating such application. Currently the proceeding remains open. 227 ANNUAL REPORT 202313 —Financial reports —Financial statements 98 Company Court Case Number Origin Stage of trial Peuco Finance Limited - of Grand Court the Cayman Islands for Request a provisional bankruptcy process. On May 26, 2020, Peuco Finance Limited submitted a request for a provisional liquidation in Grand Court of the Cayman Islands, covered in the reorganization proceeding filed before the Bankruptcy Court of the United States of America, which was accepted on May 27, 2020 by the Grand Court of the Cayman Islands. On September 28, 2020, Peuco Finance Limited filed a petition to suspend the liquidation. On October 9, 2020, the Grand Court of Cayman Islands accepted the petition and extended the status of temporary liquidation for a period of 6 months. The lawsuit continues to be active. On May 13, 2021, Peuco Finance Limited filed a petition to suspend the liquidation. On May 18, 2021, the Grand Court of Cayman Islands accepted the petition and extended the status of temporary liquidation until October 9, 2021. On December 1, 2021, Peuco Finance Limited filed a petition to suspend the liquidation, which was accepted by the Grand Court of Cayman Islands. This extended the status of the provisional liquidation through April 9, 2022. On August 22, 2022, Peuco Finance Limited petitioned for a suspension of the liquidation, which was granted by the Grand Court of the Cayman Islands. The provisional liquidation was extended to October 9, 2022 and the process continues in effect. That petition was sustained by the Grand Court of the Cayman Islands on October 4, 2022. On September 30, 2022, Peuco Finance Limited filed an application for validation of security obligations arising in connection with the DIP to Exit and new DIP facilities. On October 04, 2022, the Grand Court made an Order validating such application. Currently the proceeding remains open. Amounts Committed (*) ThUS$ -0- 228 ANNUAL REPORT 202313 —Financial reports —Financial statements 99 Company Court Case Number Origin Stage of trial Piquero Leasing Limited - of Grand Court the Cayman Islands for Request a provisional bankruptcy process. On July 08, 2020, Piquero Leasing Limited submitted a request for a provisional liquidation in Grand Court of the Cayman Islands, covered in the reorganization proceeding filed before the Bankruptcy Court of the United States of America, which was accepted on July 10, 2020, by the Grand Court of the Cayman Islands. Piquero Leasing Limited entered a motion to suspend the liquidation on September 28, 2020. On October 9, 2020 the Grand Court of the Cayman Islands granted the motion and extended the provisional liquidation status for 6 months. On May 13, 2021, Piquero Leasing Limited filed a petition to suspend the liquidation. On May 18, 2021, the Grand Court of Cayman Islands accepted the petition and extended the status of temporary liquidation until October 9, 2021. On December 1, 2021, Piquero Leasing Limited filed a petition to suspend the liquidation, which was accepted by the Grand Court of Cayman Islands. This extended the status of the provisional liquidation through April 9, 2022. On August 22, 2022, Piquero Leasing Limited petitioned for a suspension of the liquidation, which was granted by the Grand Court of the Cayman Islands. The provisional liquidation was extended to October 9, 2022 and the process continues in effect. Currently the proceeding remains open. Amounts Committed (*) ThUS$ -0- 229 ANNUAL REPORT 2023Amounts Committed (*) ThUS$ 2,477 13 —Financial reports —Financial statements 100 2) Lawsuits received by LATAM Airlines Group S.A. and Subsidiaries. Company Court Case Number Origin Stage of trial Comisión Europea — LATAM Airlines Group S.A. y Lan Cargo S.A. 230 to of of Investigation of alleged free infringements cargo competition fuel airlines, especially surcharge. On December 26th, 2007, the General for Directorate Competition the European Commission notified Lan Cargo S.A. and LATAM Airlines Group S.A. the instruction process against twenty five including cargo airlines, for Lan Cargo S.A., breaches alleged of the air in competition cargo market in Europe, especially alleged fixed fuel surcharge and freight. the On April 14th, 2008, the notification of the European Commission was replied. The appeal was filed on January 24, 2011. On May 11, 2015, we attended a hearing at which we petitioned for the vacation of the Decision based on discrepancies in the Decision between the operating section, which mentions four infringements (depending on the routes involved) but refers to Lan in only one of those four routes; and the ruling section (which mentions one single conjoint infraction). On November 9th, 2010, the General Directorate for Competition of the European Commission notified Lan Cargo S.A. and LATAM Airlines Group S.A. the imposition of a fine in the amount of ThUS$9,133 (€8.220.000 Euros) This fine is being appealed by Lan Cargo S.A. and LATAM Airlines Group S.A. On December 16, 2015, the European Court of Justice revoked the Commission’s decision because of discrepancies. The European Commission did not appeal the decision, but presented a new one on March 17, 2017 reiterating the imposition of the same fine on the eleven original airlines. The fine totals €776,465,000 Euros. It imposed the same fine as before on Lan Cargo and its parent, LATAM Airlines Group S.A., totaling €8.2 million Euros. On May 31, 2017 Lan Cargo S.A. and LATAM Airlines Group S.A. filed a petition with the General Court of the European Union seeking vacation of this decision. We presented our defense in December 2017. On July 12, 2019, we attended a hearing before the European Court of Justice to confirm our petition for vacation of judgment or otherwise, a reduction in the amount of the fine. On March 30, 2022, the European Court issued its ruling and lowered the amount of our fine from KUS$9,133 (€8,220,000 Euros) to KUS$2,477 (€2,240,000 Euros). This ruling was appealed by LAN Cargo S.A. and LATAM on June 9, 2022. The other eleven airlines also appealed the ruling affecting them. The European Commission responded to our appeal of September 7, 2022. Lan Cargo S.A. and LATAM answered the Commission’s arguments on November 11, 2022. Finally, the European Commission replied to our defense in January 2023. On February 13, 2023, LAN Cargo, S.A. and LATAM requested the European Court to hold an oral hearing to ensure the Court's full understanding of some points of the discussion. The European Court set the hearing date as April 10, 2024. ANNUAL REPORT 2023Case Number — Company Court Lan Cargo S.A. y LATAM Airlines Group S.A. In the Ovre Romerike Disrtict Court (Noruega) y Directie Juridische Zaken Afdeling Ceveil Recht (Países Bajos) 13 —Financial reports —Financial statements 101 Origin Stage of trial The two cases still pending, in Norway and the Netherlands, are in the evidence confirmation stage. The Norway case has been inactive since January 2014, but there has been judicial activity in the Netherlands case. In the Netherlands, most of the airlines involved in this case have been forced to withdraw their claim against LATAM and Lan Cargo after their previous claims in the Chapter 11 proceedings before the New York Court were dismissed. So, Lufthansa, Lufthansa Cargo, British Airways, Air France, KLM, Martinair and Singapore have withdrawn their claims and now only the Thai Airways claim is still ongoing against LATAM and Lan Cargo. freight services breaches of against filed Lawsuits European airlines by users in of private lawsuits as a result of the investigation into of alleged cargo competition fuel airlines, especially surcharge. Lan Cargo S.A. and LATAM Airlines Group S.A., have been sued in court proceedings third directly and/or 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. in Amounts Committed (*) ThUS$ -0- Aerolinhas Brasileiras S.A. Justicia Federal. 0008285-5 3.2015.403 .6105 An action seeking to quash a decision and petitioning in for early protection order a obtain to revocation of the penalty imposed by the Brazilian Authority Competition the (CADE) investigation cargo airlines alleged fair trade violations, in particular the fuel surcharge. in of This action was filed by presenting a guaranty – policy – in order to suspend the effects of the CADE’s decision regarding the payment of the following fines: (i) ABSA: ThUS$10,438; (ii) Norberto Jochmann: ThUS$201; (iii) Hernan Merino: ThUS$ 102; (iv) Felipe Meyer:ThUS$ 102. The action also deals with the affirmative obligation required by the CADE consisting of the duty to publish the condemnation in a widely circulating newspaper. This obligation had also been stayed by the court of federal justice in this process. Awaiting CADE’s statement. ABSA began a judicial review in search of an additional reduction in the fine amount. The Judge’s decision was published on March 12, 2019, and we filed an appeal against it on March 13, 2019 11,106 231 ANNUAL REPORT 202313 —Financial reports —Financial statements 102 Company Court Case Number Origin Stage of trial Aerolinhas Brasileiras S.A. Justicia Federal. 0001872-5 8.2014.4.0 3.6105 Tam Linhas Aéreas S.A. Tribunal Regional Federal da 2a Região. 2001.51.01 .012530-0 (vinculado a este proceso los Pas 19515.721 154/2014-7 1, 19515.002 963/2009-1 2) An annulment action with a motion for preliminary injunction, was filed on 28/02/2014, in order to cancel tax debts of PIS, II, CONFINS, connected the process administrative 10831.005704/2006-43 IPI and with Ordinary judicial action brought for the purpose of declaring the nonexistence relationship of obligating the company to collect the Air Fund. legal The statement was authenticated on January 29, 2016. A new insurance policy was submitted on March 30, 2016 with the change to the guarantee requested by PGFN. On 05/20/2016 the process was sent to PGFN, which was manifested on 06/03/2016. The Decision denied the company's request in the lawsuit. The court (TRF3) made a decision to eliminate part of the debt and keep the other part (already owed by the Company, but which it has to pay only at the end of the process: ThUS$3,929 – R$ 19,059,073.03- probable). We must await a decision on the Treasury appeal. to 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 the Court was delivered for R$ 260.223.373,10-original amount in 2012/2013, which currently equals ThUS$84,078 (R$407,778,562.13). The court decision requesting that the Expert make all clarifications requested by the parties in a period of 30 days was published on March 29, 2016. The plaintiffs’ submitted a petition on June 21, 2016 requesting acceptance of the opinion of their consultant and an urgent ruling on the dispute. No amount additional to the deposit that has already been made is required if this case is lost. A ruling is currently pending on the company’s appeal. Tam Linhas Aéreas S.A. Secretaria da Receita Federal do Brasil. 10880.725 950/2011-0 5 Ordinary judicial action brought for the purpose of declaring the nonexistence relationship of obligating the company to collect the Air Fund. legal The objection (manifestação de inconformidade) filed by the company was rejected, which is why the voluntary appeal was filed. The case was assigned to the 1st Ordinary Group of Brazil’s Administrative Council of Tax Appeals (CARF) on June 8, 2015. TAM’s appeal was included in the CARF session held August 25, 2016. An agreement that converted the proceedings into a formal case was published on October 7, 2016. The company has received the results of the due diligence and presented a claim. We must wait for an administrative decision. Amounts Committed (*) ThUS$ 12,767 84,078 37,173 232 ANNUAL REPORT 2023Amounts Committed (*) ThUS$ 11,567 13 —Financial reports —Financial statements 103 Company Court Case Number Origin Stage of trial 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 Social Security COFINS by TAM are not directly related to the air transport. activity of of An objection was filed administratively on September 17, 2014. The lower court rendered a partially favorable ruling on June 1, 2016 that reversed the previous separate fine. A voluntary remedy was filed on June 30, 2015 on which a judgment by the Board of Tax Appeals is pending. The case was sent to the Second Panel of the Fourth Room of the Third Judgment Section of the Board of Tax Appeals (abbreviated as CARF in Portuguese). The CARF judges partially sustained the company’s appeal to pay part of the debt (we did not appeal the other part). The Ministry of Finance of Brazil filed a special remedy. The CARF dismissed the Ministry’s remedy in September 2019, but it filed a complaint that was denied by the CARF. The final calculations by the Federal Internal Revenue Service are pending. Tam Linhas Aéreas S.A. Secretaria da Receita Federal do Brasil. 10880.722. 355/2014-5 2 233 ANNUAL REPORT 2023Company Court LATAM Airlines Group S.A. 22° Juzgado Civil Santiago de Case Number C-29.945-2 016 Amounts Committed (*) ThUS$ -0- 13 —Financial reports —Financial statements 104 Origin Stage of trial The Company received notice of a civil liability Inversiones claim by on Ranco Tres S.A. 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, Awad Jorge 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 their the Company, of duties the under 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. TAM Linhas Aéreas S.A. 10 ª Vara das Execuções Fiscais Federais de Paulo São 0061196-6 8.2016.4.0 3.6182 Tax Enforcement Lien No. 0020869-47.2017.4.03.618 2 on Profit-Based Social Contributions from 2004 to 2007. This tax enforcement was referred to the 10th Federal Jurisdiction on February 16, 2017. A petition reporting our request to submit collateral was recorded on April 18, 2017. At this time, the period is pending for the plaintiff to respond to our petition. The bond was replaced. The evidentiary stage has begun. 35,300 234 ANNUAL REPORT 202313 —Financial reports —Financial statements 105 Company Court Case Number Origin Stage of trial TAM Linhas Aéreas S.A. Secretaría de Receita Federal 5002912.2 9.2019.4.0 3.6100 A lawsuit disputing the debit in the administrative proceeding 16643.000085/2009-47, reported in previous notes, consisting of a notice demanding recovery of the Income Social and Assessment Tax on the net profit resulting from the itemization of royalties and use of the TAM trademark (SCL) 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. Amounts Committed (*) ThUS$ 10,292 TAM Linhas Aéreas S.A. Delegacía de Receita Federal 10611.720 852/2016-5 8 TAM Linhas Aéreas S.A. Delegacía de Receita Federal 16692.721. 933/2017-8 0 União Federal 0012177-5 4.2016.4.0 1.3400 SNEA (Sindicato Nacional das empresas aeroviárias) 235 An improper charge of the the Contribution Social Financing Security (COFINS) on an import for of The Internal Revenue Service of Brazil issued a notice of violation because TAM applied for credits offsetting the contributions for the Social Integration the Program (PIS) and Social Security Funding Contribution (COFINS) that do not bear a direct relationship to air transport (Referring to 2012). A claim against the 72% increase in airport control and (TAT-ADR) fees approach fees control (TAT-APP) charged by the Airspace Control Department (“DECEA”). 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. We are awaiting a response from the authority. 15,253 An administrative defense was presented on May 29, 2018. The process has become a judicial proceeding. 30,800 A decision is now pending on the appeal presented by SNEA. On January 30th, 2024, SNEA obtained a favorable court decision from the 2nd Instance (TRF1), regarding its appeal. The SNEA awaits the publication of the decision to assess the viability of possible appeals. 101,721 ANNUAL REPORT 202313 —Financial reports —Financial statements 106 Company Court Case Number Origin Stage of trial TAM Linhas Aéreas S.A. União Federal 2001.51.01 .020420-0 TAM Linhas Aéreas S.A. Receita Federal do Brasil 19515-720. 823/2018-1 1 TAM Linhas Aéreas S.A. Receita Federal de Brasil 10880.938 832/2013-1 9 TAM Linhas Aéreas S.A. Receita Federal de Brasil 10880.938 834/2013-1 6 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”). An administrative claim to collect alleged differences in SAT payments for the periods to 12/2017. 11/2013 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 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. 236 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. Amounts Committed (*) ThUS$ -0- A defense was presented on November 28, 2018. The Court dismissed the Company’s appeal in August 2019. Then on September 17, 2019, Company filed a voluntary appeal (CRSF (Administrative Tax Appeals Board)) that is pending a decision. An administrative defense was argued on March 19, 2019. The Court dismissed the Company’s defense in December 2020. The Company filed a voluntary appeal to the Brazilian Administrative Council of Tax Appeals (CARF) that is pending a decision. 124,507 22,475 An administrative defense was argued on March 19, 2019. The Court dismissed the Company’s defense in December 2020. The Company filed a voluntary appeal to the Brazilian Administrative Council of Tax Appeals (CARF) that is pending a decision. 16,669 ANNUAL REPORT 202313 —Financial reports —Financial statements 107 Company Court Case Number Origin Stage of trial TAM Linhas Aéreas S.A. Receita Federal de Brasil 10880.938 837/2013-4 1 TAM Linhas Aéreas S.A. Receita Federal de Brasil 10880.938 838/2013-9 6 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. The decision denied the reallocation petition and did not equate the Social Security Tax (COFINS) credit declarations for the first quarter of 2012, which were determined to be in the non-cumulative system. LATAM Airlines Group Argentina, Brasil, Perú, y Ecuador, TAM Mercosur. Juzgado de 1° Instancia en lo Civil y Comercial Federal N° la 11 de ciudad de Buenos Aires filed Libres 1408/2017 Consumidores Coop. Ltda. this claim on March 14, 2017 regarding a provision of services. It petitioned for of reimbursement the certain the or fees difference in fees charged for who passengers purchased a ticket in the last 10 years but did not use it. TAM Linhas Aéreas S.A. Receita Federal de Brasil 10.880.938 842/2013-5 4 237 The decision denied the petition for reassignment and did not equate the COFINS credit statements for the third quarter of been 2012 determined to be in the non-accumulative system. that had An administrative defense was argued on March 19, 2019. The Court dismissed the Company’s defense in December 2020. The Company filed a voluntary appeal to the Brazilian Administrative Council of Tax Appeals (CARF) that is pending a decision. Amounts Committed (*) ThUS$ 21,737 We presented our administrative defense. The Court dismissed the Company’s defense in December 2020. The Company filed a voluntary appeal to the Brazilian Administrative Council of Tax Appeals (CARF) that is pending a decision. 13,987 Federal Commercial and Civil Trial Court No. 11 in the city of Buenos Aires. After 2 years of arguments on jurisdiction and competence, the claim was assigned to this court and an answer was filed on March 19, 2019. The Court ruled in favor of the defendants on March 26, 2021, denying the precautionary measure petitioned by the plaintiff. The plaintiff requested on several occasions the opening of the trial, which was rejected by the Court due to the lack of notification of previous resolutions. The evidentiary stage has not yet begun in this case. -0- We presented our administrative defense. The Court dismissed the Company’s defense in December 2020. The Company filed a voluntary appeal to the Brazilian Administrative Council of Tax Appeals (CARF) that is pending a decision. 16,076 ANNUAL REPORT 202313 —Financial reports —Financial statements 108 Company Court Case Number Origin Stage of trial We presented our administrative defense. The Court dismissed the Company’s defense in December 2020. The Company filed a voluntary appeal (CARF) that is pending a decision. Amounts Committed (*) ThUS$ 14,721 TAM Linhas Aéreas S.A. Receita Federal de Brasil 10.880.938 844/2013-4 3 TAM Linhas Aéreas S.A. Receita Federal de Brasil 10880.938 841/2013-1 8 TAM Linhas Aéreas S.A. Receita Federal de Brasil 10840.727 719/2019-7 1 Latam- Airlines Ecuador S.A. Tribunal Distrital de lo Fiscal 17509-201 4-0088 The decision denied the petition for reassignment and did not equate the COFINS credit statements for the third quarter of 2012 been determined to be in the non-accumulative system. that had The decision denied the petition for reassignment and did not equate the COFINS credit statements for the second quarter of been 2012 determined to be in the non-accumulative system. that had of Collection / COFINS tax for the period of 2014. PIS An audit of the 2006 Income Tax Return that disallowed fuel expenses, and other fees items necessary the because support was not provided, according to Management. We presented our administrative defense. The Court dismissed the Company’s defense in December 2020. The Company filed a voluntary appeal (CARF) that is pending a decision. 14,509 43,256 12,505 We presented our administrative defense on January 11, 2020. The Court dismissed the Company’s defense in December 2020. The Company filed a voluntary appeal (CARF) that is pending a decision. 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. TAM Linhas Aéreas S.A. Receita Federal de Brasil 10880.910 559/2017-9 1 Compensation non equate by Cofins 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 a voluntary appeal (CARF) that is pending a decision. 12,623 238 ANNUAL REPORT 202313 —Financial reports —Financial statements 109 Company Court Case Number Origin Stage of trial TAM Linhas Aéreas S.A. Receita Federal de Brasil 10880.910 547/2017-6 7 Compensation non equate by Cofins TAM Linhas Aéreas S.A. Receita Federal de Brasil 10880.910 553/2017-1 4 Compensation non equate by Cofins TAM Linhas Aéreas S.A. Receita Federal de Brasil 10880.910 555/2017-1 1 Compensation non equate by Cofins TAM Linhas Aéreas S.A. Receita Federal de Brasil 10880.910 560/2017-1 6 Compensation non equate by Cofins TAM Linhas Aéreas S.A. Receita Federal de Brasil 10880.910 550/2017-8 1 Compensation non equate by Cofins TAM Linhas Aéreas S.A. Receita Federal de Brasil 10880.910 549/2017- 56 Compensation non equate by Cofins TAM Linhas Aéreas S.A. Receita Federal de Brasil 10880.910 557/2017- 01 Compensation non equate by Cofins TAM Linhas Aéreas S.A Receita Federal do Brasil 10840.722 712/2020- 05 TAM Linhas Aéreas S.A. Receita Federal do Brasil 10880.978 948/2019- 86 trial Administrative that deals with the collection of PIS/Cofins proportionality (fiscal year 2015). the non- is about It approved compensation/ reimbursement of Cofins for the 4th Quarter of 2015. 239 our our our our defense defense defense defense presented presented presented presented (Manifestação (Manifestação (Manifestação administrative administrative administrative administrative We de Inconformidade). The Court dismissed the Company’s defense in December 2020. The Company filed a voluntary appeal (CARF) that is pending a decision. We de Inconformidade). The Court dismissed the Company’s defense in December 2020. The Company filed a voluntary appeal (CARF) that is pending a decision. de We Inconformidade). The Court dismissed the Company’s defense in December 2020. The Company filed a voluntary appeal (CARF) that is pending a decision. We de Inconformidade). The Court dismissed the Company’s defense in December 2020. The Company filed a voluntary appeal (CARF) that is pending a decision. We de Inconformidade). The Court dismissed the Company’s defense in December 2020. The Company filed a voluntary appeal (CARF) that is pending a decision. de We Inconformidade). The Court dismissed the Company’s defense in December 2020. The Company filed a voluntary appeal (CARF) that is pending a decision. We de Inconformidade). The Court dismissed the Company’s defense in December 2020. The Company filed a voluntary appeal (CARF) that is pending a decision. We de Inconformidade). A decision is pending. The Company filed a voluntary appeal (CARF) that is pending a decision. administrative administrative administrative administrative (Manifestação (Manifestação (Manifestação (Manifestação (Manifestação presented presented presented presented defense defense defense defense our our our our TAM filed its administrative defense on July 14, 2020. A decision is pending. The Company filed a voluntary appeal (CARF) that is pending a decision. Amounts Committed (*) ThUS$ 14,579 14,063 14,815 12,953 15,001 12,552 11,892 34,537 19,178 ANNUAL REPORT 202313 —Financial reports —Financial statements Company Court Case Number Origin Stage of trial 110 TAM Linhas Aéreas S.A. Receita Federal do Brasil 10880.978 946/2019- 97 TAM Linhas Aereas S.A. Receita Federal do Brasil 10880.978 944/2019- 06 is about the non- It compensation/ approved reimbursement of Cofins for the 3th Quarter of 2015 is about the non- It compensation/ approved reimbursement of Cofins for the 2th Quarter of 2015 TAM filed its administrative defense on July 14, 2020. A decision is pending. The Company filed a voluntary appeal (CARF) that is pending a decision. TAM filed its administrative defense on July 14, 2020. A decision is pending. The Company filed a voluntary appeal (CARF) that is pending a decision. Latam Airlines Group S.A C-8498-20 20 23° Juzgado Civil Santiago de 240 the Class Action Lawsuit filed by National Corporation of Consumers Users and against (CONADECUS) LATAM Airlines Group S.A. for alleged breaches of the Law on Protection of Consumer Rights due to flight cancellations caused by COVID-19 Pandemic, requesting the nullity of possible abusive clauses, the imposition of fines and compensation for damages in defense of the collective of consumers. LATAM has hired specialist lawyers to undertake its defense. interest the On 06/25/2020 we were notified of the lawsuit. On 04/07/2020 we filed a motion for reversal against the ruling that declared the action filed by CONADECUS admissible, the decision is pending to date. On 07/11/2020 we requested the Court to comply with the suspension of this case, ruled by the 2nd Civil Court of Santiago, in recognition of the foreign reorganization procedure pursuant to Law No. 20,720, for the entire period that said proceeding lasts, a request that was accepted by the Court. CONADECUS filed a remedy of reconsideration and an appeal against this resolution should the remedy of reconsideration be dismissed. The Court dismissed the reconsideration on August 3, 2020, but admitted the appeal. On March 1, 2023, the Court of Appeals resolved to omit the hearing of the case and pronouncement regarding the appeal, in view of the fact that in January 2023 LATAM's request the end of the suspension of the process that was decreed by resolution of July 17, 2020 in case file C-8498-2020 of the 23rd Civil Court of Santiago, for which the file was sent to the first instance to continue processing. On November 24, 2023, the Court dismissed LATAM’S motion for reversal against the ruling that declared the action filed by CONADECUS admissible. Accordingly, on December 4, 2023, LATAM filed the statement of defense. The amount at the moment is undetermined. Amounts Committed (*) ThUS$ 11,607 12,299 -0- ANNUAL REPORT 2023Company Court Latam Airlines Group S.A. 25° Juzgado Civil Santiago de Case Number C-8903-20 20 TAM Linhas Aéreas S.A Receita Federal de Brasil 13074.726 429/2021- 41 TAM Linhas Aéreas S.A. Receita Federal de Brasil 2007.34.0 0.009919- 3(0009850 -54.2007.4 .01.3400) 241 Amounts Committed (*) ThUS$ -0- 13 —Financial reports —Financial statements 111 Origin Stage of trial the 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 COVID-19 by Pandemic, requesting the nullity of possible abusive clauses, the imposition of fines and compensation for damages in defense of the collective of consumers. LATAM has hired specialist lawyers to undertake its defense. interest 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 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 included. On August 26, 2023, appeals by CONADECUS, costs CONADECUS filed a petition based on technicalities and substance against the Appellate Court ruling in order to have it reversed by the Supreme Court. LATAM petitioned that such appeals be declared inadmissible in a brief filed September 13, 2023. On November 30, 2023, the Supreme Court declared CONADECUS’ petition inadmissible. On December 7, 2023, LATAM requested the Appellate Court to determine the costs of the procedure which must be borne by CONADECUS. CONADECUS currently has no petitions against the settlement reached between LATAM and AGRECU. The amount at the moment is undetermined. its obligation to report on TAM filed its administrative defense. (Manifestação de Inconformidade). A decision is pending 19,762 A decision is pending 73,962 lawsuit is about the non- It compensation/ approved reimbursement of Cofins for the periods 07/2016 to 06/2017. A to review the incidence of the Social Security Contribution taxed on 1/3 of vacations, maternity payments and medical leave for accident. seeking ANNUAL REPORT 2023Company Court TAM Linhas Aéreas S.A. Tribunal del Trabajo de Brasília/ DF Case Number 0000038-2 5.2021.5.1 0.0017 TAM Linhas Aéreas S.A. UNIÃO FEDERAL 0052711-8 5.1998.4.0 1.0000 TAM Linhas Aéreas S.A Tribunal do Trabajo de São Paulo 1000115-9 0.2022.5.0 2.0312 TAM Linhas Aéreas S.A Receita Federal 15746.728 063/2022- 00 TAM Linhas Aéreas S.A União Federal 1003320-7 8.2023.4.0 6.3800 242 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. indemnity claim An to collect a differentiated price from the Federal the Union because of disruption of the economic the equilibrium in concession agreements between 1988 and 1992. The indemnity, should the action prosper, cannot be estimated (Price Freeze). A class action whereby the is Air Transport Union petitioning for payment of additional hazardous and unhealthy work retroactively and in the for maintenance/ future CML employees. This is an administrative regarding alleged claim the in irregularities payment of Technical Assistance (SAT) in 2018. Legal action to discuss the debit of the administrative process 10611.720630/2017-16 for violation of (fine incorrect in registration DI- import declaration) 13 —Financial reports —Financial statements 112 Origin Stage of trial The hearing is scheduled for April 15, 2024. Amounts Committed (*) ThUS$ 13,923 The lawsuit began in 1993. In 1998, there was a decision favorable to TAM. The process reached the Court, and in 2019, the decision was against TAM. The company has appealed and a decision is pending. -0- The instruction hearing is pending in this case, scheduled for 12:02 p.m. on April 25, 2024 15,747 The administrative defense has been presented and a decision is pending. 18,974 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 21,553 ANNUAL REPORT 202313 —Financial reports —Financial statements 113 Origin Stage of trial Company Court TAM Linhas Aéreas S.A União Federal Case Number 12585.720 017/2012- 84 TAM Linhas Aéreas S.A União Federal 10880-982 .487/2020- 80 TAM Linhas Aéreas S.A União Federal 10880-967 .530/2022- 49 TAM Linhas Aéreas S.A União Federal 10880-967 .532/2022- 38 TAM Linhas Aéreas S.A União Federal 10880-967 .533/2022- 82 243 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). 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) 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). 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). 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). An administrative defense was presented but was dismissed. The company filed a voluntary remedy before CARF that was also dismissed. A decision on the special remedy is now pending. Amounts Committed (*) ThUS$ 10,542 An administrative defense was presented but was dismissed. The company filed a voluntary remedy before CARF. A decision on the special remedy is now pending. 10,322 An administrative defense was presented. A decision is pending. 10,671 An administrative defense was presented and a decision is pending. 11,447 An administrative defense was presented and a decision is pending. 20,154 ANNUAL REPORT 2023Company Court TAM Linhas Aéreas S.A União Federal Case Number 19613.725 650/2023- 86 13 —Financial reports —Financial statements 114 Origin Stage of trial An administrative defense was presented and a decision is pending. 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. LATAM Airlines Group S.A. Tribunal de Defensa de la Libre Competenc ia 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, which was in state of agreement. For the time being, the amount is indeterminate. Amounts Committed (*) ThUS$ 14,174 -0- 244 ANNUAL REPORT 202313 —Financial reports —Financial statements 115 Company Court Case Number Origin Stage of trial LATAM Airlines Group S.A. Tribunal de Defensa de la Libre Competenc ia 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. Currently awaiting a the Court. The preliminary measure cannot be final ruling from implemented until such a decision is rendered. For the time being, the amount is indeterminate. Amounts Committed (*) ThUS$ -0- We were served the claim on September 21, 2023. On September 30, 2023, we filed a remedy of reconsideration against the decision that declared the lawsuit filed by CONADECUS admissible, which was dismissed by the Court on November 11, 2023. A decision on that appeal is pending at this time. On November 18, 2023, LATAM filed the statement of defense. For the time being, the amount is undetermined. -0- LATAM Airlines Group S.A. 23° Juzgado Civil de Santiago C-8156-20 22 245 the international A class action filed by CONADECUS against LATAM Airlines Group S.A. for alleged violations of Consumer Protection Law because of the cancellation of tickets for flights purchased through travel agencies. It petitioned for fines 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. and ANNUAL REPORT 202313 —Financial reports —Financial statements 116 Origin Stage of trial The administrative defense has been presented and a decision is pending. is the about This unaccredited compensation/ reimbursement and redress regarding improper the payment of the monthly federal social assistance contribution (Cofins, as abbreviated in Portuguese) made in the third quarter of 2018. Amounts Committed (*) ThUS$ 11,518 Company Court TAM Linhas Aéreas S.A União Federal Case Number 10880.967 587/2022- 48 246 ANNUAL REPORT 2023Company Court LATAM Airlines Group S.A. Tribunal de Defensa de la Libre Competenc ia Case Number NC-388-2 011 Amounts Committed (*) ThUS$ -0- 13 —Financial reports —Financial statements 117 Origin Stage of trial On August 11, 2012, the Civil Aviation Administration (“JAC,” as abbreviated in Spanish) filed a petition for clarification with the Anti- Trust Court (“TDLC,” as abbreviated in Spanish) regarding Condition VIII.4 of Decision #37/2011 (“Condition VII.4”). The petition seeks to impose a temporary 5 years limitation on 23 frequencies assigned by the JAC to LATAM after Decision #37 was issued. LATAM filed a brief with the TDLC on August 27, 2023, petitioning that the JAC petition for clarification be dismissed because it was an improper request to change Condition VIII.4. The TDLC dismissed the JAC’s petition for clarification on September 13, 2023. The JAC filed an appeal against the TDLC’s ruling dismissing its petition for clarification on September 23, 2023. LATAM petitioned that said appeal by the JAC be declared inadmissible on September 30, 2023. The TDLC declared it admissible (it admitted the appeal for processing) on October 2, 2023, and LATAM filed a remedy of reconsideration against that decision on October 7, 2023, accompanied by a legal opinion. The TDLC accepted LATAM’s remedy of reconsideration on October 17, 2023 and amended its previous ruling and dismissed the JAC’s petition for clarification. On October 23, 2023, the JAC presented an appeal to the Supreme Court requesting that the TDLC resolution be annulled and petitioned declared admissible the remedy of reconsideration. On November 3, 2023, LATAM became part of the de facto appeal and requested its rejection. On December 20, 2023, the TDLC sent a report to the Supreme Court. On January 6, 2024, the JAC presented a note in relation to the TDLC report. On January 9, 2024, LATAM presented a document in response to the JAC presentation in which it analyzed the TDLC report. In a separate but related process, JetSmart filed a non-contentious inquiry on September 26, 2023, in relation to the terms of the future public tender of aviation frequencies on the Santiago-Lima route. JetSmart requested an injunction to suspend the tender and maintain the aviation frequency assignments as currently held until the inquiry has finalized. The TDLC declared the inquiry admissible on October 2, 2023, but only to begin a procedure to determine whether the rules in the terms of the public aviation frequency tender violate Decree Law 211, and dismissed the request for provisional measures. On October 4, 2023, JetSmart filed two motions for reconsideration against the TDLC’s decision. The JAC became a party to such motions on October 6, 2023 and LATAM became a party to the process on October 10, 2023, and it requested that the motions filed by JetSmart be dismissed. On October 16, 2023, the TDLC took into account the considerations presented by LATAM and rejected the two motions for reconsideration filed by JetSmart. On October 19, 2023 CONADECUS requested to become part of this process and requested the same injuction previously rejected twice by the TDLC. On October 23, 2023 LATAM submitted a brief to the TDLC requesting the rejection of saidinjuction now requested by CONADECUS. On October 23, 2023, a public auction was held by JAC for thirteen international frequencies for the Santiago - Lima route, LATAM won ten of thirteen of these routes. On October 24, 2023, JetSmart once again requested that an injunction be issued regarding the public tender of aviation frequencies on the Santiago-Lima route. On November 2, 2023, the TDLC rejected the request for injunctions submitted by JetSmart and CONADECUS. On December 5, 2023, JetSmart complied with TDLC procedural order and published in the Chilean official newspaper a notice calling interested parties and stakeholders to submit information and opinions regarding JetSmart’s inquiry . On December 21, 2023 the FNE requested to be an intervening party in the process and requested to extend the deadline to provide background information. The TDLC accepted the postponement, leaving the deadline for providing information as February 5, 2024. On February 1, 2024, LATAM submitted a brief to TDLC advocating for its position and providing background information regarding JetSmart’s inquiry. 247 ANNUAL REPORT 202313 —Financial reports —Financial statements 118 Origin Stage of trial This is a petition to recover a credit Cofins in the 1rd quarter of 2019 (proportional) 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 administrative defense has been presented and a decision is pending. Amounts Committed (*) ThUS$ 11,416 The procedure before the Court of Appeal is pending 11,231 Company Court TAM Linhas Aéreas S.A. União Federal Case Number 10880.967 612/2022-9 3 TAM Linhas Aéreas S.A. Superior Tribunal de Justiça (STJ) 0042711-6 1.2007.8.0 5.0001 (1449899) 248 ANNUAL REPORT 2023Amounts Committed (*) ThUS$ 34,000 13 —Financial reports —Financial statements 119 Company Court Case Number Origin Stage of trial Tribunal Fiscal 12511-202 2 LATAM Airlines Group Sucursal Perú S.A The resolution is pending. Appeal for $34MM, presented on October 11, 2022, against the Intendencia resolution No. 4070140000100, which declared unfounded the claim filed by the Company on September, 20, 2022, against the Determination Resolutions for alleged omissions of the Income Tax corresponding to the period 2014 and associated fines for the violation typified in numeral 1 of article 178 of the Tax Code. The main objections relate to SUNAT's lack of knowledge of the application of article 8 of the CDI between Peru and Chile regarding: i) Income obtained from the exclusivity contract of the Latam Pass program with the Banco de Crédito del Perú, ii) Income from sale of miles to non-airline partners and associated cost (sale of miles from the Latam Pass program to legal companies). TAM Linhas Aéreas S.A UNIÃO FEDERAL 1012674-8 0.2018.4.0 1.3400 Legal actions for members to have the right to collect contributions in the payroll collectible on the basis of gross sales. This claim was filed in 2018. In January 2020, a decision favorable to the Company was rendered so that contributions would be collected on the basis of gross income. The company recently learned that the Superior Courts are rendering decisions unfavorable to contributors. They have ruled against the contributor in a recent decision. In December/2023 the position was withdrawn. -0- 249 ANNUAL REPORT 202313 —Financial reports —Financial statements 120 Origin Stage of trial Amounts Committed (*) ThUS$ 45,162 On September 16, 2022, an appeal was filed against the determination and fine resolutions issued by SUNAT; being that, through Resolution of the Intendencia No. 4070140000253, the claim filed by the company was partially founded and, in addition, (i) it rectified Annexes No. 01, 04, 05 and 06 of RD No. 0120030126112 to No. 0120030126123. , (ii) the Annex to RM N° 0120020037412 to N° 0120020037423, (iii) the balance in favor of the IGV for the tax periods of January and July 2016 contained in RD N° 0120030126112 and 0120030126118; and, (iv) rectified and continued the collection of the tax debt contained in RD No. 0120030126113 to 0120030126117 and 0120030126119 to 0120030126123 and RM No. 0120020037412 to 0120020037423. On January 11, 2023, an appeal was filed against the aforementioned resolution, which was admitted for processing and elevated to room 9 of the Tax Court. Currently the file is pending resolution. the Company filed an appeal against On January 26, 2023, the determination and fine resolutions issued by SUNAT. Through Resolution of the Intendencia No. 4070340000928 dated December 19, 2023, SUNAT declared the appeal filed by the Company founded and, consequently, Determination Resolutions No. 012-003-0130232, No. 012-003- 0130245 and Fine Resolution No. 012-002-0038314 are void. Currently, the Gerencia de Fiscalización I and the Gerencia de Fiscalización Internacional y de Precios de Transferencia de la Intendencia de Principales Contribuyentes Nacionales of the SUNAT are pending to issue the inspection requirements necessary to correct the invalidity defects declared by the Intendencia Nacional de Impugnaciones. 185,987 Company Court LATAM Airlines Perú S.A. Tribunal Fiscal Case Number Expediente de Apelación N° 2545-2023 LATAM Airlines Perú S.A. Expediente de Reclamaci ón N° 407034000 0412. Superinten dencia Nacional de Administra ción Tributaria (SUNAT) 250 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). Claim against Determination Resolution No. 0120030130232, Fine Resolution No. 0120020038314, notified on 12.22.2022 and Determination Resolution No. 0120030130245 for indirect disposal of income not susceptible to subsequent tax control linked to the objections made to determination of third category net income for fiscal year 2015 ANNUAL REPORT 202313 —Financial reports —Financial statements 121 In order to deal with any financial obligations arising from legal proceedings in effect at December 31, 2023, whether civil, tax, or labor, LATAM Airlines Group S.A. and Subsidiaries, has made provisions, which are included in Other non-current provisions that are disclosed in Note 20. The Company has not disclosed the individual probability of success for each contingency in order to not negatively affect its outcome. (*) The Company has reported the amounts involved only for the lawsuits for which a reliable estimation can be made of the financial impacts and of the possibility of any recovery, pursuant to Paragraph 86 of IAS 37 Provisions, Contingent Liabilities and Contingent Assets. II. Governmental Investigations. 1) On April 6, 2019, LATAM Airlines Group S.A. received the resolution issued by the National Economic Prosecutor's Office (FNE), which begins an investigation Role No. 2530-19 into the LATAM Pass frequent passenger program. The last activity in this investigation corresponds to request for information received in May 2019. 2) On July 26, 2019, the National Consumer Service of Chile (SERNAC) issued the Ordinary Resolution No. 12,711 which proposed to initiate a collective voluntary mediation procedure on effectively informing passengers of their rights in cases of cancellation of flights or no show to boarding, as well as the obligation to return the respective boarding fees as provided by art. 133 C of the Aeronautical Code. The Company has voluntarily decided to participate in this proceeding, in which an agreement was reached on March 18, 2020, which implies the return of shipping fees from September 1, 2021, with an initial amount of ThUS$ 5,165, plus ThUS$ 565, as well as information to each passenger who has not flown since March 18, 2020, that their boarding fees are available. On January 18, 2021, the 14th Civil Court of Santiago approved the aforesaid agreement. LATAM published an abstract of the decision in nationwide newspapers in compliance with the law. LATAM began performance of the agreement on September 3, 2021. In April and October 2022, and in April and November 2023 the external auditors presented preliminary reports agreed upon with the National Consumer Service (SERNAC). The implementation of a voluntary class procedure concluded on September 3, 2023. 3) On October 15, 2019, LATAM Airlines Group S.A. received the resolution issued by the National Economic Prosecuting Authority (“FNE”) which begins an investigation Role N°2585-19 into the agreement between LATAM Airlines Group S.A. and Delta Air Lines, Inc (“Delta”). On August 13, 2021 FNE, Delta and LATAM reached an out-of-court agreement that put an end to this investigation. On October 28, 2021, the Tribunal de Defensa de la Libre Competencia approved the out-of-court agreement reached by LATAM and Delta with the FNE. 4) LATAM Airlines Group S.A. received a resolution by the National Economic Prosecutor (FNE) on February 1, 2018 beginning Investigation 2484-18 on air cargo carriage. On August 29, 2023, the Office of the National Economic Prosecutor (FNE) decided to separate part of the information from such investigation and created a new Case #2729-23 relative to cargo carriage on charter flights from Santiago to Easter Island during the pandemic. The latest activity in the investigation of Case 2484-18 is an Official Ordinary Letter issued August 28, 2023 in which it requested additional information from LATAM. That letter was answered on September 27, 2023. 5) LATAM Airlines Group S.A. received a resolution by the National Economic Prosecutor (FNE) on August 12, 2021 beginning Investigation N° 2669-21 on compliance with condition VII Res. N° 37/2011 from TDLC related to restrictions as to certain codeshare agreements. On October 2, 2023, the FNE decided to separate part of the information in such investigation. Case #2737-23 will be about the code share agreements between LATAM and Delta that LATAM petitioned be amended; and Case #2669-21 will be about the remaining code share agreements. In relation to the investigation with Role No. 2737-23, dated November 06, 2023, the FNE and LATAM reached an extrajudicial agreement in order to allow certain codeshare agreements between LATAM and Delta to be modified. On December, 7, 2023, TDLC approved the extrajudicial agreement reached by LATAM and the FNE. 6) The competition authority sent an inquiry [or request] to TAM Linhas Aéreas S.A. (LATAM Airlines Brasil) with the objective of obtaining information regarding certain pricing issues, which was received by the 251 company on November 27, 2023. LATAM Airlines Brasil is cooperating with the authority and remains committed to transparency and compliance with all applicable rules and regulations. 122 . NOTE 31 - COMMITMENTS (a) Commitments arising from loans In relation to certain contracts committed by the Company for the financing of the Boeing 777 aircraft, which are guaranteed by the Export – Import Bank of the United States of America, limits have been established for some financial indicators of LATAM Airlines Group S.A. on a consolidated basis. Under no circumstance does non-compliance with these limits generate loan acceleration. The Company and its subsidiaries do not have credit agreements that impose limits on financial indicators of the Company or its subsidiaries, with the exception of those detailed below: On October 12, 2022, LATAM Airlines Group S.A., acting through its Florida branch, closed a new four year revolving credit facility (“Exit RCF”) of US$ 500 million with a consortium of five banks led by JP Morgan Chase Bank, N.A. As of December 31, 2023, this credit facility is undrawn and fully available. In addition, LATAM Airlines Group S.A., together with Professional Airline Services, Inc., a Florida corporation and a wholly owned subsidiary of LATAM Airlines Group S.A., issued (i) on October 12, 2022, as modified on November 3, 2022, a five-year term loan facility (“Term Loan B Facility”) of US$ 1,100 million (US$ 1,089 million outstanding as of December 31, 2023), (ii) on October 18, 2022, a 13.375% senior secured notes due 2027 (“2027 Notes”) for an aggregate principal amount of US$ 450 million and (iii) on October 18, 2022, a 13.375% senior secured notes due 2029 (“2029 Notes”, together with the 2027 Notes, the “Notes”) for and aggregate principal amount of MUS$ 700. The Exit RCF, the Term Loan B Facility and the Notes (together, the “Exit Financing”) share the same intangible collateral composed mainly of the FFP (LATAM Pass loyalty program) business receivables, Cargo business receivables, certain slots, gates and routes and LATAM’s intellectual property and brands. The Exit Financing contains certain covenants limiting us and our restricted subsidiaries’ ability to, among other things, make certain types of restricted payments, incur debt or liens, merge or consolidate with others, dispose of assets, enter into certain transactions with affiliates, engage in certain business activities or make certain investments. In addition, the agreements include a minimum liquidity restriction, requiring us to maintain a minimum liquidity, measured at the consolidated Company (LATAM Airlines Group S.A.) level, of US$ 750 million. On November 3, 2022, LATAM Airlines Group S.A., acting through its Florida branch, amended and extended the 2016 revolving credit facility (“RCF”) with a consortium of thirteen financial institutions led by Citibank, N.A., guaranteed by aircraft, engines and spare parts for a total committed amount of US$ 600 million. The RCF includes restrictions of minimum liquidity measured at the consolidated Company level (with a minimum level of US$ 750 million) and measured individually for LATAM Airlines Group S.A. and TAM Linhas Aéreas S.A. (with a minimum level of US$ 400 million). Compliance with these restrictions is a prerequisite for drawing under the line; if the line is used, compliance with said restrictions must be reported periodically, and non-compliance with these restrictions may trigger an acceleration of the loan. As of December 31, 2023, this line of credit is undrawn and fully available. On November 3, 2022, LATAM Airlines Group S.A., acting through its Florida branch, executed a five year credit facility (“Spare Engine Facility”) with, among others, Crédit Agricole Corporate and Investment Bank, acting through its New York branch, as facility agent and arranger and guaranteed by spare engines for a principal amount of US$ 275 million. As of December 31, 2023, the outstanding amount under the Spare Engine Facility is US$ 266.8 million. The facility includes restrictions of minimum liquidity measured at the consolidated Company level (with a minimum level of US$ 750 million) and measured individually for LATAM Airlines Group S.A. and TAM Linhas Aéreas S.A. (with a minimum level of US$ 400 million jointly). As of December 31, 2023, the Company complies with the aforementioned minimum liquidity covenants. ANNUAL REPORT 202313 —Financial reports —Financial statements 123 b) Other commitments As of December 31, 2023, the Company maintains valid letters of credit, guarantee notes and guarantee insurance policies, according to the following detail: Creditor Guarantee Debtor Quantity Type Value ThUS$ Release Date SUPERINTENDENCIA NACIONAL DE ADUANAS Y DE ADMINISTRACION TRIBUTARIA LATAM Airlines Perú S.A. 49 Letter of Credit 202,583 Jan 11, 2024 SÉTIMA TURMA DO TRIBUNAL REGIONAL FEDERAL DA 1ª REGIÃO - PROCEDIMENTO COMUM CÍVEL - DECEA - 0012177-54.2016.4.01.3400 ISOCELES UNIÃO FEDERAL ( FAZENDA NACIONAL) UNIÃO FEDERAL - PGFN UNIÃO FEDERAL - PGFN UNIÃO FEDERAL - FAZENDA NACIONAL UNIÃO FEDERAL FUNDACAO DE PROTECAO E DEFESA DO CONSUMIDOR PROCON VARA DAS EXECUÇÕES FISCAIS ESTADUAIS DE SÃO PAULO - FORO DAS EXECUÇÕES FISCAIS DE SÃO PAULO AMERICAN ALTERNATIVE INS. CO. C/O ROANOKE INS. GROUP INC TRIBUNAL DE JUSTIÇA DO ESTADO DE SÃO PAULO BBVA 1° VARA DE EXECUÇÕES FISCAIS E DE CRIMES CONTRA A ORDEM TRIB DA COM DE FORTALEZA FUNDAÇÃO DE PROTEÇÃO E DEFESA DO CONSUMIDOR DE SÃO PAULO - PROCON BOND SAFEGUARD INSURANCE COMPANY COMISÓN EUROPEA UNIAO FEDERAL (FAZENDA NACIONAL) 17ª VARA CÍVEL DA COMARCA DA CAPITAL DE JOÃO PESSOA/PB PROCON - FUNDACAO DE PROTECAO E DEFESA DO CONSUMIDOR JFK INTERNATIONAL AIR TERMINAL LLC METROPOLITAN DADE CONTY (MIAMI - DADE AVIATION DEPARTMENT) TAM Linhas Aereas S.A. LATAM Airlines Group S.A. TAM Linhas Aereas S.A. ABSA Aerolinhas Brasileiras S.A. TAM Linhas Aereas S.A. ABSA Aerolinhas Brasileiras S.A. TAM Linhas Aereas S.A. TAM Linhas Aereas S.A. TAM Linhas Aereas S.A. LATAM Airlines Group S.A. ABSA Aerolinhas Brasileiras S.A. LATAM Airlines Group S.A. TAM Linhas Aereas S.A. TAM Linhas Aereas S.A. TAM Linhas Aereas S.A. LATAM Airlines Group S.A. TAM Linhas Aereas S.A. TAM Linhas Aereas S.A. TAM Linhas Aereas S.A. LATAM Airlines Group S.A. LATAM Airlines Group S.A. 1 1 1 2 4 2 5 7 1 Guarantee Insurance 57,554 Apr 20, 2025 Letter of Credit 41,000 Aug 1, 2026 Guarantee Insurance Guarantee Insurance Guarantee Insurance Guarantee Insurance Guarantee Insurance Guarantee Insurance Guarantee Insurance 33,045 Jul 30, 2024 21,538 Feb 22, 2025 21,131 Sep 28, 2024 17,838 Apr 14, 2025 11,226 Feb 4, 2025 10,844 Apr 2, 2024 9,752 Mar 4, 2025 19 Letter of Credit 6,305 Feb 1, 2024 2 1 1 1 1 1 1 1 2 1 6 Guarantee Insurance 6,263 Dec 31, 2099 Letter of Credit 3,800 Jan 23, 2025 Guarantee Insurance Guarantee Insurance Guarantee Insurance 2,962 Dec 31, 2099 5,016 Mar 7, 2025 2,700 Jul 20, 2024 Letter of Credit 2,598 Mar 29, 2024 Guarantee Insurance Guarantee Insurance Guarantee Insurance 2,457 Nov 16, 2025 2,527 Jun 25, 2028 4,178 Nov 17, 2025 Letter of Credit 2,300 Jan 27, 2024 Letter of Credit 2,462 Mar 13, 2024 252 Creditor Guarantee Debtor Quantity Type Value ThUS$ Release Date 124 SÉTIMA TURMA DO TRIBUNAL REGIONAL FEDERAL DA 1ª REGIÃO - PROCEDIMENTO COMUM CÍVEL - DECEA - 0012177-54.2016.4.01.3400 SERVICIO NACIONAL DE ADUANA DEL ECUADOR VARA DE EXECUÇÕES FISCAIS ESTADUAIS DA COMARCA DE SÃO PAULO/SP - EXECUÇÃO FISCAL N.º 1507367-03.2016.8.26.0014 SOCIEDAD CONCESIONARIA NUEVO PUDAHUEL S.A. DISTRITO FEDERAL / TRIBUNAL: 7ª TURMA DO TRIBUNAL REGIONAL FEDERAL DA 1ª REGIÃO - ANULATÓRIA N.º 0007263-25.2008.4.01.3400 UNIÃO FEDERAL, REPRESENTADO PELA PROCURADORIA SECCIONAL DA FAZENDA NACIONAL EM CAMPINAS FIANÇA TAM LINHAS AÉREAS X JUIZ FEDERAL DE UMA DAS VARAS DA SEÇÃO JUDICIÁRIA DE BRASÍLIA/ LIMA AIRPORT PARTNERS S.R.L. TRIBUNAL DE JUSTIÇA DO ESTADO DE SÃO PAULO UNIDAD ADMINISTRATIVA BOGOTÁ JUIZO DE DIREITO DA VARA DA FAZENDA PUBLICA ESTADUAL DA COMARCA DA CAPITAL DO ESTADO DO RIO DE JANEIRO JFK INTERNATIONAL AIR TERMINAL LLC MUNICIPIO DO RIO DE JANEIRO AENA AEROPUERTOS S.A CITY OF LOS ANGELES, DEPARTMENT OF AIRPORTS ABSA Aerolinhas Brasileiras S.A. LATAM-Airlines Ecuador S.A. TAM Linhas Aereas S.A. LATAM Airlines Group S.A. TAM Linhas Aereas S.A. ABSA Aerolinhas Brasileiras S.A. TAM Linhas Aereas S.A. LATAM Airlines Group S.A. TAM Linhas Aereas S.A. LATAM Airlines Group S.A. TAM Linhas Aereas S.A. TAM Linhas Aereas S.A. TAM Linhas Aereas S.A. LATAM Airlines Group S.A. LATAM Airlines Group S.A. FUNDAÇÃO DE PROTEÇÃO E DEFESA DO CONSUMIDOR DO ESTADO DE SÃO PAULO TAM Linhas Aereas S.A. PARQUE DE MAETERIAL AERONAUTICO DO GALEAO - PAMA GL TAM Linhas Aereas S.A. 1 4 1 18 1 1 1 32 1 4 1 1 1 2 5 1 1 Guarantee Insurance 2,245 May 7, 2025 Letter of Credit 2,130 May 8, 2024 Guarantee Insurance 2,025 Apr 24, 2025 Letter of Credit 1,551 Mar 29, 2024 Guarantee Insurance Guarantee Insurance Guarantee Insurance 1,867 May 29, 2025 1,931 Nov 30, 2025 1,810 Dec 31, 2099 Letter of Credit 1,628 Dec 31, 2023 Guarantee Insurance 964 Dec 31, 2099 Letter of Credit 1,432 Apr 17, 2024 Guarantee Insurance Guarantee Insurance Guarantee Insurance 1,435 Dec 31, 2099 1,300 Jan 25, 2024 1,239 Dec 31, 2099 Letter of Credit 2,370 Nov 15, 2024 Letter of Credit 1,074 Jan 2, 2024 Guarantee Insurance Guarantee Insurance 1,152 Dec 31, 2099 1,053 497,285 Jun 18, 2024 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. ANNUAL REPORT 2023 NOTE 32 - TRANSACTIONS WITH RELATED PARTIES 125 (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 96.810.370-9 Inversiones Costa Verde Ltda. y CPA. Related director Chile Tickets sales 81.062.300-4 Costa Verde Common shareholder Chile Loans received (*) Aeronautica S.A. 87.752.000-5 Granja Marina Tornagaleones S.A. Common shareholder Chile Services provided Interest received (*) Capital contribution 96.989.370-3 Rio Dulce S.A. Related director Chile Tickets sales Related director Argentina Real estate leases Foreign Foreign Foreign (**) Inversora Aeronáutica Argentina S.A. TAM Aviação Executiva e Taxi Aéreo S.A. Qatar Airways Common shareholder Brazil Indirect shareholder Qatar Foreign Delta Air Lines, Inc. Shareholder U.S.A received Expense recovery Services provided of passenger transport Interlineal received service Interlineal provided service Services received of handling Services provided of handling Services received miles Services provided miles Services provided / received others Interlineal received service Interlineal provided service Services received miles Services provided miles Loans received (*) Interest received (*) Capital contribution Services provided of handling Engine sale Joint venture Real estates leases provided Services provided / received others Foreign QA Investments Ltd Common shareholder U.K. Loans received (*) Foreign QA Investments 2 Ltd Common shareholder U.K. Loans received (*) Foreign Lozuy S.A. Common shareholder Uruguay Interest received (*) Loans received (*) Interest received (*) Interest received (*) Capital contribution 253 13 —Financial reports —Financial statements For the year ended At December 31, Currency 2023 2022 ThUS$ ThUS$ CLP US$ US$ US$ CLP CLP ARS ARS BRL US$ US$ US$ US$ US$ US$ US$ 124 87 — (231,714) — — — — (59) 3 (21,329) 170,962 36 2 (63) — — (22,107) 4 (23,110) 31,020 (252) 37,855 — — 692 (4,657) 1,683 (4,974) 894 1,424 (1,238) US$ (144,239) (111,706) US$ US$ US$ US$ US$ US$ US$ US$ US$ US$ US$ US$ US$ US$ US$ US$ US$ US$ 127,145 (11,069) 7,328 102,580 (3,992) 2,410 — (233,026) — — (10,374) 163,979 (3,657) — (10,000) 86 982 (4,340) 19,405 — — (311) — (240,440) — — — — — — (26,153) 163,979 (7,414) (15,780) (57,928) (5,332) 126 (*) Operations corresponding to DIP loans tranche C. The balances corresponding to Accounts receivable and accounts payable to related entities are disclosed in Note 9. Transactions between related parties have been carried out under market conditions and duly informed. (**) Related companies until November 2022 (b) Compensation of key management The Company has defined for these purposes that key management personnel are the executives who define the Company’s policies and macro guidelines and who directly affect the results of the business, considering the levels of Vice-Presidents, Chief Executives and Senior Directors. For the year ended at December 31, 2023 ThUS$ 2022 ThUS$ 12,815 1,429 606 13,604 59 28,513 10,651 1,109 565 11,814 1,157 25,296 Remuneration Board compensation Non-monetary benefits Short-term benefits Termination benefits (*) Total In accordance with current legislation, the Ordinary Shareholders’ Meeting held on April 20, 2023, determined the amount of the annual remuneration for the Board for the period from that date until the next Ordinary Shareholders’ Meeting scheduled to take place within the first quarter of 2024. In this context, in addition to the base remuneration, an additional remuneration was approved for each Board member, with an incremental amount based on the following criteria: (a) During the first year following their appointment, until November 15, 2023, provided that the Director serves continuously in their position, each Director will be entitled to receive an additional amount to the base remuneration, equivalent to 9,226,234 units of remuneration or “URAs.” (b) For the second year following their appointment, covering the period from the end of the first anniversary since their designation until November 15, 2024, under the same condition mentioned previously and approved by the Ordinary Shareholders’ Meeting in the first quarter of 2024, each Director will be entitled to receive another additional amount equivalent to 9,226,234 URAs. Likewise, each Director who becomes part of the Board Committee will also receive, as additional (c) 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. ANNUAL REPORT 2023 13 —Financial reports —Financial statements 127 The amounts paid during the 2023 fiscal year for this concept, in accordance with the above, are: Paid during the year 2023 ThUS$ 481 53 534 URAs Directors URAs Board Committee Total NOTE 33 - SHARE-BASED PAYMENTS (a) LP3 compensation plans (2020-2023) The Company implemented a program for a group of executives, which existed until March 2023, with a demand period between October 2020 and March 2023, where the collection percentage was annual and cumulative. The methodology is an estimate of the number of units, where a goal of the value of the action is set. The benefit is vested if the target of the share price defined in each year is met. In case the benefit accumulates up to the last year the total benefit is doubled (in case the share price is achieved). This Compensation Plan was finally not executed because the share price required for its collection is below the initial target. (b) CIP (Corporate Incentive Plan) As indicated in Note 22, in the context of the exit from Chapter 11 Proceedings, the Company implemented a talent retention program for the Company's employees, which is divided into three categories. The first one (i.e., Non-Executive Employees) simply contemplates guaranteed payments in cash to the respective employees on certain dates depending on the country where the employee is hired. On the other hand, the remaining two categories (i.e., Non-GEM Executives and GEM Executives) contemplated the granting of synthetic units of remuneration (the "Units") that, by reference, are considered as equivalent to the price of one share of LATAM Airlines Group S.A. and consequently, in case they become effective, grant the worker the right to receive the payment in cash that results from multiplying the number of Units that are pay for the value per share of LATAM Airlines Group S.A. that must be considered in accordance with the CIP. Below are more details of these two categories. Non-GEM Executives The first subprogram applies to senior executives not part of the GEM (Global Executive Meeting - Senior Managers, Managers, Deputy Managers). In this context, this program contemplates two different bonuses: (1) a retention bonus, consisting of the amount in money resulting from Units that are assigned to the respective employee and these Units being paid 20% on month 15 and 80% at month 24, in each case, counted from Exit date from the Chapter 11 Procedure (i.e., November 3, 2022) (the "Exit Date"). This is consequently, a guaranteed payment for these employees; and (2) a bonus associated to the performance defined on based on the compliance of certain financial indicators of LATAM Airlines Group S.A. and its subsidiaries, which is reflected in Note 19(b), becoming effective 20% at month 15 and 80% at month 24, in each case, from the Exit Date. Consequently, this is a temporary payment that is only made if these indicators are met. 254 GEM Executives 128 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 Month 30 from Exit Date Month 42 from Exit Date Month 60 from Exit Date Percentage of Units that become effective 20% 30% 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). 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 ANNUAL REPORT 2023 13 —Financial reports —Financial statements 129 will be eligible to become effective on the same terms and conditions as RSUs; however, that they will be eligible to become effective at a rate of one third on each of the following dates: month 18, month 24 and month 30, in each case, from the Exit Date. The valuation of these Units will be equivalent to the value of the Company's share less the ERO Price at the time they become effective. In all cases, the respective employees must have remained as such in the Company at the corresponding accrual date to qualify for these benefits. Given the characteristics of this program, it has been recorded in accordance with the provisions of IFRS 2 "Share-based payments" and has been considered as a "cash settlement award" and, therefore, recorded at fair value as a liability that is part of the items Trade and other accounts payables and Provisions for employee benefits, non-current, which is updated at the closing date of each financial statement with effect on profit or loss for the period and classified in the line "Administrative expenses" of the interim Consolidated Statement of Income by function. The fair value has been determined on the basis of the current share price and the best estimate of the future value of the Company's share, multiplied by the number of underlying units granted. This estimate was made based on the Company's Business Plan and its main indicators such as EBITDAR, adjusted net debt. The movement of units as of December 31, 2023, is as follows: RSU - Retention PSU - Performance MPPBASEDRSU - Protection Total Opening balance as of 01.01.2023 — — — — Granted during the period 3,107,603,293 4,251,780,158 1,438,926,658 8,798,310,109 Vested — — — — Exercised during the period Forfeited during the period Closing balance as of 12.31.2023 — — — — (121,146,360) 2,986,456,933 (242,192,091) 4,009,588,067 (192,047,245) 1,246,879,413 (555,385,696) 8,242,924,413 NOTE 34 - STATEMENT OF CASH FLOWS (a) The Company has carried out the following transactions with non-monetary impact: a.1) Proceeds from the issuance of shares as of December 31, 2022: Detail Issuance of shares Issuance costs DIP Junior offset Total cash flow ThUS$ 800,000 (80,000) (170,962) 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. 255 a.2.) Amount from the issuance of other equity instruments as of December 31, 2022 : 130 Detail Fair Value (see note 24) Use for settlement of claim Issuance costs DIP Junior offset Cash inflow Convertible Notes H ThUS$ 1,372,837 Convertible Notes I ThUS$ 4,097,788 Total ThUS$ 5,470,625 — (24,812) (327,957) 1,020,068 (828,581) (705,467) (381,018) 2,182,722 (828,581) (730,279) (708,975) 3,202,790 The payment of DIP Junior offset is related to payment of the Junior Dip through the issues of the Convertible Notes subscribed for the shareholders Delta Air Lines, Inc and QA Investment Ltd. for ThUS$ 327,957 and of the other creditor for ThU$ 381.018. As a result of the exit from Chapter 11, in relation to trade accounts payable and other accounts a.3.) payable, the conversion into shares for Notes G and I was carried out, for a total of ThUS$3,610,470 and a decrease in said item with effect in result which is included in Earning (Loss) from restructuring activities for ThUS$2,550,306 (see note 26d) and with effect in results in financial income for ThUS$420,436 (see note 26e). a.4.) As a result of the exit from Chapter 11, the Other financial liabilities item decreased its balance by ThUS$2,673,256, which is detailed in letter, d). The break down of this decrease corresponds mainly to ThUS$491,326 (see note 26e), ThUS$354,249 (decrease with effect in Property, plant and equipment, mainly related to the effect of rate change), ThUS$381,018 related to the compensation of the debt with the effect of increasing Capital, ThUS$1,443,066 associated with the conversion of debt into shares and other minor effects of ThUS$3,596. a.5.) liabilities and Financial leases. The Company has also carried out non-monetary transactions related to Right of use assets, Lease ANNUAL REPORT 2023 13 —Financial reports —Financial statements 131 (b) Other inflows (outflows) of cash: Restricted Advances Bank commissions, taxes paid and other Taxes on financial transactions Guarantees Payment for hedging instruments Court deposits Derivative margin guarantees Payment for derivatives premiums Total Other inflows (outflows) Operation activities Guarantee deposit received from the sale of aircraft Insurance recovery Total Other inflows (outflows) Investment activities Interest rate derivatives Funds delivered as restricted advances Payments of claims associated with the debt Debt Issuance Cost - Stamp Tax Taxes on financial transactions Debt-related legal advice RCF guarantee placement Total Other inflows (outflows) Financing activities For the year ended At December 31, 2023 ThUS$ 2022 ThUS$ 20,572 (2,173) (6,803) 4,406 30,413 (16,349) (2,559) (47,853) (20,346) 48,258 11,000 59,258 15,934 — — — (4,529) — — 11,405 (26,918) (5,441) (2,134) (47,384) 35,857 (20,661) (40,207) (23,372) (130,260) 6,300 — 6,300 — (313,090) (21,924) (33,259) — (87,993) (7,500) (463,766) (c) Dividends: As of December 31, 2023 and 2022, there were no disbursements associated with this concept. 256 132 (d) Reconciliation of liabilities arising from financing activities: Obligations with financial institutions As of December 31, 2022 ThUS$ Obtainment Capital (*) ThUS$ Payment Capital (**) ThUS$ Interests ThUS$ Interest accrued and others ThUS$ Reclassifications (***) ThUS$ As of December 31, 2023 ThUS$ Cash flows Non cash-Flow Movements Bank loans Guaranteed obligations 1,385,995 325,061 Other guaranteed obligations Obligation with the public Financial leases Other loans Lease liability Total Obligations with financial institutions 474,304 1,289,799 1,088,239 2,028 2,216,454 6,781,880 — — — — — — — — (81,952) (19,726) (153,791) (20,309) 189,272 20,686 (310,090) (1,790) 1,029,434 303,922 (56,519) — (183,374) (434) (225,358) (42,283) (155,655) (48,272) — (173,924) 43,037 168,694 58,076 (70) 1,150,822 11,811 — (13,123) (1,420) — 430,350 1,302,838 901,546 104 2,967,994 (567,363) (594,234) 1,630,517 (314,612) 6,936,188 Cash flows Non cash-Flow Movements Obtainment Payment Obligations with financial institutions As of December 31, 2021 Capital (*) Capital (**) Interests ThUS$ ThUS$ ThUS$ ThUS$ Extinguis hment of debt under Chapter 11 ThUS$ Legal advices related to debt ThUS$ Interest accrued and others ThUS$ Reclassifications ThUS$ As of December 31, 2022 ThUS$ Loans to exporters Bank loans Guaranteed obligations Other guaranteed obligations 159,161 521,838 510,535 — — — 982,425 (36,466) (10,420) — (18,136) (13,253) — — (25) (161,975) 2,814 (196,619) 128,077 — — (2,840) 1,385,995 — 13,882 (167,942) 325,061 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) 1,189,182 — (270,734) (34,201) 76,508 1,467,035 (1,523,798) (5,628) 3,281 — — (843,950) 148,703 141,336 1,289,799 (37,630) (56,176) 37,211 40,806 204,411 1,088,239 — 2,028 2,960,638 — (131,917) (49,076) (2) (995,888) 492,592 (59,893) 2,216,454 10,396,482 7,217,900 (8,891,330) (521,716) (87,993) (2,673,256) 1,203,560 138,233 6,781,880 Financial leases Other loans Lease liability Total Obligations with financial institutions (*) During the year 2023 , the Company did not obtain financing. During the year 2022, the Company obtained ThUS$ 2,361,875 amounts from long-term loans and ThUS$ 4,856,025 amounts from short-term loans, totaling ThUS$ 7,217,900. (**) As of December 31, 2023, loan repayments ThUS$ 342,005 and payments of lease liabilities ThUS$ 225,358, disclosed in flows from financing activities and as of December 31, 2022, loan repayments ThUS$ 8,759,413 and liability payments for leases ThUS$ 131,917 disclosed in flows from financing activities. (***) As a result of the exit from Chapter 11, Bank Loans decreased mainly by ThUS$ 297,161, related to the cancellation of the claim of TAM Linhas Aéreas S.A., which was pending resolution upon exit from the Chapter 11 process and which was compensated during 2023 with a fund delivered to an agent as restricted advances made in November 2022. ANNUAL REPORT 2023 13 —Financial reports —Financial statements 133 Below are the details obtained (payments) of flows related to financing: Flow of For the years ended December 31 Capital raising ThUS$ 2023 Payments Capital ThUS$ Interest ThUS$ Capital raising ThUS$ 2022 Payments Capital ThUS$ Interest ThUS$ Aircraft financing Lease liability Non-aircraft financing Total obligations with Financial institutions — — — — (251,388) (225,358) (90,617) — (76,497) (173,924) — (343,813) 7,217,900 (331,292) (131,917) (8,428,121) (52,088) (49,076) (420,553) (567,363) (594,234) 7,217,900 (8,891,330) (521,717) (e) Advances of aircraft Corresponds to the cash flows associated with aircraft purchases, which are included in the statement of consolidated cash flows, within Purchases of property, plant and equipment. For the year ended At December 31, 2023 ThUS$ 2022 ThUS$ (142,782) 215,362 72,580 (23,118) 3,037 (20,081) Increases (payments) Recoveries Total cash flows (f) Additions of property, plant and equipment and Intangibles Net cash flows from Purchases of property, plant and equipment Additions associated with maintenance Other additions Purchases of intangible assets Other additions For the year ended At December 31, 2023 ThUS$ 2022 ThUS$ 795,787 337,126 458,661 68,052 68,052 780,538 486,231 294,307 50,116 50,116 257 (g) The net effect of the application of hyperinflation in the consolidated cash flow statement corresponds to: 134 Net cash flows from (used in) operating activities Net cash flows from (used in) investment activities Net cash flows from (used in) financing activities Effects of variation in the exchange rate on cash and cash equivalents Net increase (decrease) in cash and cash equivalents (h) Payments of leased maintenance For the year ended At December 31, 2023 ThUS$ 2022 ThUS$ (47,569) 3,661 — 43,908 — (36,701) (146) 7,703 29,144 — Payments to suppliers for the supply of goods and services include the value paid associated with leased maintenance capitalizations for ThUS$294,549 (ThUS$149,142 as of December 31, 2022). (i) Payments of loans to related entities as December 31, 2022: Delta Air Lines, Inc. Qatar Airways Costa Verde Aeronautica S.A. Lozuy S.A. QA Investments Ltd QA Investments 2 Ltd Payments of loans to related entities NOTE 35 - THE ENVIRONMENT ThUS$ (78,947) (78,947) (257,533) (107,122) (242,967) (242,967) (1,008,483) LATAM Airlines Group S.A is compromised with sustainable development, seeking to generate social, economic, and environmental value for the countries where it operates and for all its stakeholders. The company manages socio-environmental matters at a corporate level, centralized in the Corporate Affairs and Sustainability Department. The company is committed to monitoring and mitigating its impacts on the environment in all its ground and air operations, being a key element in the solution, and searching for alternatives to the challenges of the company and its environment. The main functions of Corporate Affairs and Sustainability Department in environmental matters in conjunction with the various areas of the company include ensuring that environmental legal compliance would be maintained in all the countries, implementing and maintaining corporate environmental management, the efficient use of non-renewable resources such as aircraft fuel, the responsible disposal of its wastes, and the development of programs and actions that allow it to reduce its greenhouse gas emissions, seeking to generate environmental social and economic benefits for the company and the countries where it operates. LATAM's sustainability strategy that was launched in 2021 is based on 4 pillars: Environmental Management System, Climate Change Management, Circular Economy and Shared Value. With these pillars, the company seeks to generate social, environmental and economic value for society and the company, anticipating the risks inherent in the sustainability challenges which is viewed by the current and future scenarios. ANNUAL REPORT 2023 13 —Financial reports —Financial statements 135 The aspects addressed in each pillar within the strategy are presented below: Environmental Management System The company is working to standardize its environmental management system at a cross-cutting level and under this structure, certified its operation in accordance with stage II of the IATA Environmental Assessment Program (IEnvA), which is designed to evaluate and improve the environmental management of airlines, due to not only being based on the ISO 14001 standard, also involves the best practices of the industry. Climate Change Management To manage its carbon footprint and contribute to the protection of strategic ecosystems in the region, LATAM aspires to offset and reduce the equivalent of 50% of domestic emissions by 2030 and seeks to be carbon- neutral by 2050, in accordance with this it has focused its strategy in: 1. Efficient operation: with the implementation of LATAM Fuel Efficiency, a corporate program for the efficient use of fuel that considers initiatives within the company that has an impact on fuel consumption. 2. Sustainable Alternative Fuels (SAF): Due to the importance of Sustainable Aviation Fuel (SAF) to reduce the emissions in the long term, LATAM is developing a work plan focused on Brazil and Colombia; which has recognized and long-standing experience in biofuels; and Chile, a country with a high developmental potential in green hydrogen. 3. Offsetting: LATAM has assumed a total commitment to the environment and has established different alliances that will allow it not only to acquire carbon credits for its offsetting needs but also to contribute to the conservation of strategic ecosystems in the region. During the first half of 2023, LATAM launched its offsetting program for passengers “1+1 Offset to Conserve”, where passengers are invited to contribute to the conservation of iconic ecosystems through offsetting their flight’s footprint and for every ton compensated by its clients, LATAM duplicates the impact by compensating the same amount. Circular Economy LATAM seeks to remove single-use plastics as part of its ambition of striving to be a zero-waste group to landfill by 2027. To achieve these goals, it has reviewed the materials used in its process and its waste management to promote the circular economy within its processes, acting from materials. During 2023 LATAM was recognized by IATA, as the winner of the 'Air Cargo Innovation Award' for its projects to reduce plastic in domestic and international cargo operations in Chile & Brazil. Shared Value In shared value, the Solidarity Plane program stands out, it was established in 2011 and through which LATAM provides its network, connections, and capacity for passenger and freight transit to South American society at no cost in three areas of action: supports health needs, conservation of natural resources, and assistance in the event of natural disasters. Within the framework of the implementation of the strategy, during 2023, the company worked on the following initiatives: • • Implementation of the environmental management system in accordance with the IATA Environmental Assessment Program IenvA, stage 2. Supporting conservation projects and offsetting • Measurement and management of the corporate carbon footprint. 258 • Offsetting of 50% of domestic air emissions in Colombia. 136 • Verification of the company's emissions in accordance with EU-ETS, UK-ETS and CORSIA schemes. • • • Structuring of a waste management system to advance in the fulfillment of its circular economy goals. Implementing processes for the elimination of single-use plastic in the operation and waste reduction to landfill Strengthening of the Solidarity Plane program. The group was part of the Dow Jones Sustainability Index for six consecutive years, being classified as one of the most sustainable in the world. Today, LATAM continues to use the analysis as benchmarking and as a guide to implementing improvements in its processes. In 2023, according to the S&P Corporate Sustainability Assessment (CSA), LATAM was recognized as the most sustainable airline in the region, according to this assessment. NOTE 36 - EVENTS SUBSEQUENT TO THE DATE OF THE FINANCIAL STATEMENTS On February 7, 2024, the Brazilian Federal Revenue Service Brazilian issued a tax assessment against TAM Linhas Aéreas on the amount of ThUS$ 52,281 (ThR$ 253,565) related to certain tax credits on about “PIS COFINS” (Federal Social Contributions Levied on Gross Revenue) during the period of 2019/2020. The Company will be filing an administrative response disputing the total amount of the tax assessment. After December 31, 2023 and up to the date of issuance of these financial statements, there is no knowledge of other events of a financial or other nature that significantly affect the balances or their interpretation. The consolidated financial statements of LATAM Airlines Group S.A. and Subsidiaries as of December 31, 2023, have been approved in the Extraordinary Session of the Board of Directors on February 22, 2024. ANNUAL REPORT 2023Affiliates and subsidiaries 259 13 —Financial reports —Affiliates and subsidiaries NCG 461: 6.5.1 SUBSIDIARIES AND PARTNERS During the last financial year, LATAM had commercial relationships with its sub- sidiaries in terms of fleet and services, which are expected to continue through 2024. The acts and contracts entered into between LATAM and its affiliates and the results obtained are presented in detail in the Financial Statements, including the following: Technical Training LATAM S.A.: during this financial year, Technical Training LATAM S.A. provided technical training services to LATAM and its subsidiaries.- Lan Cargo S.A. and affiliates: Lan Cargo S.A. and its subsidiaries provided services to LATAM related to aircraft leasing, cargo transportation, crew leasing and other service rendering contracts. On the other hand, LATAM provided services to Lan Cargo S.A. and its affiliated related to aircraft leasing, leasing of assets, and other services. Inversiones Lan S.A.: LATAM and Inversiones Lan S.A. entered into real estate leasing agreements. Lan Pax Group and affiliates: Lan Pax Group S.A. and its affiliates provided ser- vices to LATAM related to aircraft leasing, maintenance and other services. On the other hand, LATAM provided services to Lan Pax Group S.A. and its affiliates related to aircraft leasing, maintenance, distribution and other services. LATAM Airlines Perú S.A.: LATAM Airlines Peru S.A. provided services to LATAM related to line maintenance and passenger handling in Peru. On the other hand, LATAM provided services to LATAM Airlines Perú S.A. related to aircraft leasing, aircraft maintenance, and others. TAM S.A. and affiliates: TAM S.A. and its affiliates entered into contracts with LATAM for the leasing of aircraft and engines, and other service rendering contracts. LATAM Travel S.R.L.: LATAM Travel S.R.L. provided tour operator services to LATAM. LATAM AIRLINES GROUP S.A. Name: LATAM Airlines Group S.A. RUT: 89.862.200-2 Incorporation: It was established as a Limited Liability Company under the trade name “Línea Aérea Nacional-Chile Limitada”, via a public deed dated December 30, 1983, executed at the Notary Office of Mr. Eduardo Avello Arellano; an excerpt of this deed is recorded in the Santiago Commerce Registry on page 20,341 item 11,248 of the year 1983, and published in the Official Gazette on December 31, 1983. Pursuant to the public deed dated August 20, 1985, executed at the Santiago Notary Office of Mr. Miguel Garay Figueroa’s Office, the company became a joint- stock corporation known as Línea Aérea Nacional Chile S.A. which, by express provision of Law Number 18,400, has the quality of legal follower of the state- owned company created in the year 1929 under the name Línea Aérea Nacional de Chile, pursuant to the aeronautical and radio communications concessions, traffic rights, and other administrative concessions. Subsequently, via a public deed dated November 24, 1986, executed at the San- tiago Notary Office of Mr. Mario Baros Gonzalez, the company changed its name to "Línea Aérea Nacional-Chile S.A.". Later, via a public deed dated May 15, 1998, executed at the Santiago Notary Office of Mr. Eduardo Pinto Peralta, the company's name was changed to "Lan Chile S.A.". The Extraordinary Shareholders' Meeting of LAN Chile S.A. held on July 23, 2004, resolved to change the name of the company to "LAN Airlines S.A." The minutes of the Extraordinary Shareholders' Meeting were reduced to public deed on July 28, 2004, at the Santiago Notary Office of Mr. Ivan Torrealba Acevedo. An excerpt of said deed was recorded in the Real Estate Registry of the Santiago Registry of Commerce on page 25,128 item 18,764 of the year 2004 and published in the Official Gazette on August 21, 2004. The effective date for the trade name change was September 8, 2004. The Extraordinary Shareholders’ Meeting of LAN Chile S.A. held on December 21, 2011, agreed to change the name of the company to “LATAM Airlines Group S.A.”. An excerpt of the deed to which the Minutes of said Meeting referred was recorded in the Santiago Commerce Registry on page 4,238 item 2,921 of the year 2012, and published in the Official Gazette on January 14, 2012. The effective date for the name change was June 22, 2012. LATAM Airlines Group S.A. is ruled by the regulation applicable to open stock ANNUAL REPORT 2023companies, and registered to this effect under number 0306, dated January 22, 1987, in the Securities Register of the Fi- nancial Market Commission (CMF for its Spanish acronym). Note: A summary of the subsidiaries’ Financial Statements is presented herein. The full information is available to the public in the offices of LATAM and at the Superintendency of Securities and Insurance (SVS). 13 —Financial reports —Affiliates and subsidiaries SUBSIDIARY COMPANIES OF TAM S.A. k. The import and export of finished lubricating oil. TAM Linhas Aereas S.A. and affiliates l. The use of bank correspondents’ services. Name: TAM Linhas Aéreas S.A. Paid-in Capital: ThUSD$(2,228,175) d. Operation of maintenance and marketing services for aircraft parts and equipment. e. The development and implementation of other activities, related to or complementary to aviation, in addition to those expressly listed above. Incorporation: Joint Stock Corporation established in Brazil in 1988. Stake in 2023: 100% YOY variation: 0.0% TAM S.A. AND SUBSIDIARIES Purpose: Name: TAM S.A. Incorporation: Joint Stock Corporation established in Brazil in 1997. Purpose: To participate as a shareholder in other companies, particularly those operating scheduled air transport services on a national and international level, as well as activities con- nected, related, and complementary to scheduled air transport. Paid-in Capital: ThUSD$4,861,640 Profit for the period: ThUSD$740,472 Stake in 2023: 100% Year over Year Variance (YoY): 0.0% % of Holding's assets: 8.25766% a. The operation of scheduled air transport services for pas- sengers, cargo, and baggage, pursuant to existing legislation. Chairman of the Board: Jerome Paul Jacques Cadier % of Holding's assets: 8.33225% b. The operation of complementary activities of air transport services from the transport of passengers, cargo, and baggage. c. The rendering of maintenance, repair services for aircraft, own or third parties’, engines, and spare parts. Board Members: Jerome Paul Jacques Cadier (Chairman and Director without specific designation); Felipe Ignacio Puma- rino Mendoza (Chief Financial Officer); and Jefferson Cestari (Director without specific designation). d. The rendering of aircraft hangar services. e. The rendering of yard and runway care services, provision of the aircraft cleaning staff. ABSA: Aerolinhas Brasileiras S.A. and affiliate Name: Aerolinhas Brasileiras S.A. f. The rendering of engineering services, technical assistance and other activities related to the aviation industry. Purpose: g. The performance of instruction and training related to aero- nautical activities. a. To operate scheduled domestic and international air transport services for passengers, cargo, and postal services, pursuant to existing legislation. Chairman of the Board: Jerome Paul Jacques Cadier h. The analysis and development of programs and systems. Board Members: Jerome Paul Jacques Cadier (Chairman and Director without specific designation); Felipe Ignacio Puma- rino Mendoza (Chief Financial Officer); and Jefferson Cestari (Director without specific designation). i. The purchase and sale of aeronautical parts, accessories, and equipment. j. The development and implementation of other activities, related to or complementary to aviation, in addition to those expressly listed above; 260 b. The operation of auxiliary air transport activities, such as handling, cleaning, and towing of aircraft, cargo monitoring, operational flight clearance, check-in and check-out, and other services provided for in the corresponding legislation. c. Commercial and operational leasing, as well as the transport of aircraft. Stake in 2023: 94.98% YOY variation: 0.0% Paid-in Capital: ThUSD$(10,472) Stake in 2023: 100% YOY variation: 0.0% % of Holding's assets: -0.26455% Chairman of the Board: Jerome Paul Jacques Cadier Board Members: Jerome Paul Jacques Cadier (Chairman and Director without specific designation); Felipe Ignacio Puma- rino Mendoza (Chief Financial Officer); and Jefferson Cestari (Director without specific designation). Transportes Aéreos del Mercosur S.A. Purpose: It has a broad corporate purpose that includes aero- nautical, commercial, tourist, service, financial, representation, and investment activities, with a focus on scheduled and char- ter, domestic and international, aeronautical transportation activities for people, objects, and/or correspondence, among others, as well as commercial and maintenance and technical assistance services for all types of aircraft, equipment, acces- sories, and material for air navigation, among others. Paid-in Capital: ThUSD$8,445 Incorporation: Joint Stock Corporation established in Brazil in 1995. Incorporation: Joint Stock Corporation incorporated in Paraguay. ANNUAL REPORT 202313 —Financial reports —Affiliates and subsidiaries % of Holding's assets: 0.14855% Corsair Participações S.A. Chairman of the Board: Enrique Alcaide Hidalgo Incorporation: Joint Stock Corporation established in Brazil in 2011. Board Members: Enrique Alcaide Hidalgo (Executive), Esteban Burt Artaza (Regular), Diego Martinez (Regular) and Augusto Sanabria (Regular) Purpose: the development, implementation, operation, or management of the franchises that it may award. c. To develop any and all necessary activities to ensure, insofar as possible, the ongoing maintenance and perfecting of the actuation patterns of its franchise network. Managers: Enrique Alcaide Hidalgo, Esteban Burt Artaza, Diego Martinez and Luis Galeano a. To participate in other civil or trade companies, as a share- holder or creditor. d. To develop implementation, operation, and management models for its franchise network and their transfer to the franchisees. b. The development of customer loyalty/customer relations programs and sales chain incentive programs for companies, including through points programs or other exchange currencies that can be converted into loyalty program points. c. Rendering of commercial representation and brokerage services for the sale of retail products in general, in addition to the rendering of brokerage services for the contracting of insurance and extended warranty products. Fidelidade Viagens e Turismo S.A. Incorporation: Joint Stock Corporation established in Brazil in 2013. Purpose: b. To manage its own assets. Paid-in Capital: ThUSD$(40) Stake in 2023: 100% YOY variation: 0.0% a. Devoted to private and non-private travel agency and tour- ism activities, provided in the valid tourism legislation. % of Holding's assets: 0.00085% Chairman of the Board: Carlos Eduardo Prado Board Members: Carlos Eduardo Prado (Chairman) and Felipe Ignacio Pumarino Mendoza (Director without specific desig- nation). TP Franchising Ltda. Incorporation: Limited Liability Company established in Brazil in 2004. Purpose: a. To award franchises. b. Management and operation of tourist activities for events and leisure. Paid-in Capital: ThUSD$(24,460) Stake in 2023: 100% YOY variation: 0.0% % of Holding's assets: 0.06925% Chairman of the Board: Jerome Paul Jacques Cadier Board Members: Jerome Paul Jacques Cadier (Chairman and Director without specific designation); Felipe Ignacio Puma- rino Mendoza (Chief Financial Officer); and Jefferson Cestari (Director without specific designation). 261 e. The distribution, sale, and marketing of airplane tickets and related products, as well as any related or accessory business to its main objective, while also able to participate in other companies as partner or shareholder, either in Brazil or abroad, or in consortia, as well as to carry out its own projects, or form partnerships with third parties in their projects, even to obtain tax benefits, pursuant to current legislation. d. Shareholding in other companies. Paid-in Capital: ThUSD$(9,343) Stake in 2023: 100% YOY variation: 0.0% % of Holding's assets: 0.16790% Paid-in Capital: ThUSD$(6) Stake in 2023: 100% YOY variation: 0.0% % of Holding's assets: 0.00872% Managers: Jerome Paul Jacques Cadier, Felipe Ignacio Puma- rino Mendoza and Jefferson Cestari. Prisma Fidelidade Ltda. Managers: Jerome Paul Jacques Cadier, Felipe Ignacio Puma- rino Mendoza and Jefferson Cestari. Multiplus Corredora de Seguros Ltda. Incorporation: Limited Liability Company established in Brazil in 2016. Purpose: Brokerage of insurance in the basic lines of insurance, property and casualty, life (individuals), capitalization, plans, social security, health and all other lines of insurance provided for in the regulations. Incorporation: Limited Liability Company established in Brazil in 2015. Paid-in Capital: ThUSD$(1,089) b. To temporarily award its franchisees, free of charge or for a fee, the right to use its brands, systems, knowledge, methods, patents, actuation technology, and any other rights, stakes, or assets, personal or real estate, tangible or intangible, owned by the Company, as present or future owner or licensee, for Purpose: a. The rendering of various services related to customer loyal- ty programs and incentive programs for the companies' sales chain including, among others, customer relations management, technical consulting, and technology consulting. Stake in 2023: 100% YOY variation: 0.0% % of Holding's assets: 0.00098% ANNUAL REPORT 202313 —Financial reports —Affiliates and subsidiaries Managers: Jerome Paul Jacques Cadier, Felipe Ignacio Puma- rino Mendoza, Jefferson Cestari and Daniele Marques Moreno. Real Estate Registry of the Santiago Registry of Commerce on page 26,994 item 20,082 of the year 2004 and published in the Official Gazette on August 30, 2004. Ramiro Alfonsin Balza (LATAM Executive) and Andres Del Valle (LATAM Executive) LAN CARGO S.A. AND SUBSIDIARIES Name: Lan Cargo S.A. Incorporation: established as a closed stock company via a public deed dated May 22, 1970, awarded at the offices of Notary Public Sergio Rodriguez Garces, under the name “Línea Aérea del Cobre S.A.”; an excerpt of this deed is recorded in the Santiago Commerce Registry on page 5,611 item 2,420 of the year 1970, and published in the Official Gazette on July 22, 1970. The company’s Extraordinary Shareholders' Meeting resolved the merger by incorporation of LADECO S.A. with Fast Air Car- rier S.A., the latter being the absorbed company. The minutes of said Shareholders' Meeting were recorded as a public deed on November 20, 1998 at the Santiago Notary Office of Mr. Eduardo Pinto Peralta, an extract of which was registered on page 30,091, item 24,117 of the Santiago Commercial Registry and published in the Official Gazette on December 3, 1998. The Extraordinary Shareholders' Meeting of LADECO S.A. held on October 22, 2001, resolved to change the corporate name to "LAN Chile Cargo S.A.". The minutes of the Extraordinary Shareholders' Meeting were recorded as a public deed on the same date, at the Santiago Notary Office of Mr. Cosme Gomila Gatica. An excerpt of said deed was recorded in the Real Estate Registry of the Santiago Registry of Commerce on page 27,746 item 22,624 of the year 2001 and published in the Official Gazette on November 5, 2001. The name change took effect on December 10, 2001. Subsequently, on August 17, 2004, the Extraordinary Share- holders' Meeting agreed to change the name of LAN Chile Cargo S.A. to "LAN Cargo S.A.". The minutes of this Extraordinary Shareholders' Meeting were recorded as a public deed on Au- gust 23, 2004. An excerpt of said deed was recorded in the Purpose: Perform and provide, either for itself or third parties, the following: general transportation in any form and, specifi- cally, air transport of passengers, cargo, and correspondence, within the country and abroad; tourism, lodging, and other related activities, in any form, within the country and abroad; purchase, sale, manufacture and/or integration, maintenance, leasing, or any other form of use, be it on its own behalf or for third parties, of airplanes, spare parts, and aeronautical equipment, and their operation for any given purpose; provide all sorts of services and counseling related to transportation in general and, specifically, to air transportation in any of its forms, be it ground support, maintenance, technical assistance, or any other type, within the country and abroad, and all sorts of services and activities related to tourism, lodging, and oth- er abovementioned activities and goods, within the country and abroad. In order to meet the abovementioned goals, the Company may perform investments or participate as partner in other companies, either by purchasing stocks or rights or stakes in any other type of corporation, be it an already es- tablished one or one created in the future, and overall, perform all acts and enter all contracts necessary and relevant to the purposes described. Paid-in Capital: ThUSD$83,226 Profit for the period: ThUSD$24,244 Stake in 2023: 99.89804% YOY variation: 0.0% % of Holding's assets: 2.46012% Chairman of the Board: Andrés del Valle General Manager: Andrés Bianchi Urdinola LAN CARGO S.A. AFFILIATE COMPANIES Laser Cargo S.R.L. Incorporation: Limited Liability Company established in Ar- gentina. Purpose: To render services on its own account and/or on behalf of third parties as an agent for air and sea freight forwarding, air and sea container operation, loading and unloading control of conventional aircraft, freighters, conventional ships and container ships, consolidation and deconsolidation, operations and contracts with transportation, distribution, and promo- tion companies of air, sea, river and land cargo companies, and related activities and services, import and export; such operations shall be carried out in accordance with the manner provided by the laws of the country and regulations governing such professions and activities, the legal provisions of cus- toms and regulations of the Argentine Naval Prefecture (PNA), Argentine Air Force, as well as entrusting to third parties the performance of tasks assigned by the existing legislation for customs brokers; also deposit and transportation on its own account and/or on behalf of third parties, of fruits, products, raw materials, goods in general, and all kinds of documentation: packaging of goods in general, on its own account and/or on behalf of third parties. To perform said activities, the com- pany may register as sea or air agent, importer and exporter, sea and air contractor and supplier before the corresponding authorities. In turn, it will carry out postal activities destined to the admission, classification, transportation, distribution, and delivery of correspondence, letters, postcards, and parcels weighing up to 50 kg, within the Argentine Republic and to or from other countries. Board Members: Andres Bianchi Urdinola (LATAM Executive), This activity includes the tasks carried out by so-called cou- riers or courier companies, and all other assimilated or as- similable activities pursuant to Art. 4 of Decree 1187/93. The company may also carry out the logistics process consisting in transferring, storing, assembling, fractioning, packaging, and conditioning of general merchandise to be later transported and distributed to the end customer, as well as managing the pertinent information to fulfill this goal; that is: the logistics process consisting in transferring raw material from the sup- plier to delivering the finished product to the customer, and the information regulation to guarantee the efficiency in this management process. Paid-in Capital: ThUSD$68 Stake in 2023: 96.22% YOY variation: 0.0% % of Holding's assets: 0.00002% Board Members: Esteban Bojanich Management: Esteban Bojanich, Rosario Altgelt María Marta Forcada, Facundo Rocha Gonzalo Perez Corral Nicolás Obejero and Norberto Díaz. Fast Air Almacenes de Carga S.A. Incorporation: Joint Stock Corporation established in Chile in 1992. Purpose: To operate or manage the warehouses or storage facilities of customs deposits, where any type of good or merchandise can be stored until its withdrawal, for imports, exports, or other customs destination, pursuant to the terms stated within the Customs Ordinance, its rules, and other cor- responding regulation. Paid-in Capital: ThUSD$6,741 262 ANNUAL REPORT 202313 —Financial reports —Affiliates and subsidiaries Stake in 2023: 99.89% YOY variation: 0.0% % of Holding's assets: 0.02591% Transporte Aéreo S.A. Stake in 2023: 100% Incorporation: Joint Stock Corporation established in Chile in 2001. YOY variation: 0.0% Stake in 2023: 99% YOY variation: 0.0% % of Holding's assets: 0.0% % of Holding's assets: 0.64376% Board Members: Jorge Patricio Marin Muñoz (LATAM Execu- tive), Andres Bianchi Urdinola (LATAM Executive) and Roberto Alvo Milosawiewitsch (LATAM Executive). General Manager: Patricio Linzmayer Paganini Purpose: The air transportation business in any form, whether of passengers, mail and/or cargo, inside or outside the country, on its own behalf or on behalf of others; maintenance, leasing and repair of aircrafts; trade and development of activities related to travel, tourism and hospitality; development and participation in all kinds of investments in Chile and abroad. Board Members: Esteban Bojanich Management: Esteban Bojanich Board Members: Andres Bianchi Urdinola Plaza (LATAM Exec- utive), Andres del Valle Eitel (LATAM Executive) and Roberto Alvo Milosawlewitsch (LATAM Executive). LAN Cargo Inversiones S.A. and affiliate General Manager: Andrés del Valle Eitel Prime Airport Services Inc. and affiliate Paid-in Capital: ThUSD$32,488 Name: Lan Cargo Investments S.A. Connecta Corporation Name: Prime Airport Services Inc. Stake in 2023: 99.99988% Incorporation: Corporation established in the United States. YOY variation: 12.87421% Incorporation: Joint Stock Corporation established in Chile in 2001. Incorporation: Corporation established in the United States. Purpose: Purpose: Ownership, operating leasing, and subleasing of aircraft. Purpose: To operate or manage the warehouses or storage facilities of customs deposits, where any type of good or merchandise can be stored until its withdrawal, for imports, exports, or other customs destination, pursuant to the terms stated within the Customs Ordinance, its rules, and other cor- responding regulation. % of Holding's assets: 0.87985% Board Members: Andres del Valle Eitel (LATAM Executive), Ramiro Alfonsin Balza (LATAM Executive) and Roberto Alvo Milosawlewitsch (LATAM Executive). a. To market air transportation in any of its forms, be it for passengers, mail, and/or cargo, and anything directly or indi- rectly related to that activity within or outside the country, on its own behalf or for third parties. Paid-in Capital: ThUSD$1 Stake in 2023: 100% YOY variation: 0.0% Paid-in Capital: ThUSD$2 Stake in 2023: 100% General Manager: Jose Tomas Covarrubias Cervero Consorcio Fast Air Almacenes de Carga S.A. – Laser Cargo S.R.L. b. To render services related to the maintenance and repair of its own or third parties’’ aircraft. % of Holding's assets: 0.39042% c. Trade and development of activities related to travel, tour- ism, and lodging. General Manager: Andrés Bianchi Urdinola YOY variation: 0.02857% Name: Lan Cargo Investments S.A. % of Holding's assets: 0.01496% Board member: Andres Bianchi Chairman: Antonio Orlandini 263 Incorporation: Joint Stock Corporation established in Chile in 2001. d. The development and/or participation in all kinds of invest- ments, both in Chile and abroad, in matters directly or indirectly related to aeronautical affairs and/or other business purposes. Purpose: Bidding at National and International Public Tender N° 11/2000 to be awarded the License of Use for the Installation and Operation of a Tax Warehouse at the Rosario International Airport. e. Development and operation of all other activities derived from and/or related, connected, contributory, or complemen- tary to the company’s corporate purpose. Paid-in Capital: THUSD$159 Paid-in Capital: ThUSD$(2) Línea Aérea Carguera de Colombia S.A. (Subsidiary of LAN Cargo Inversiones) Incorporation: Joint-stock corporation incorporated in Co- lombia. Purpose: To provide public, commercial cargo, and correspon- dence air transportation within the Republic of Colombia and from and to Colombia. As a secondary corporate purpose, the company can offer maintenance services to itself and to third parties; run its operations school and provide theoretical and ANNUAL REPORT 202313 —Financial reports —Affiliates and subsidiaries b. The rendering or contracting of technical, advisory and consulting services, as well as the execution of contracts or agreements for these purposes. Paid-in Capital: ThUSD$263,430 Stake in 2023: 100% YOY variation: 0.0% % of Holding's assets: 0.57005% Americonsul S.A de C.V. (Subsidiary of Lan Cargo S.A.) Chairman of the Board: Luis Ignacio Sierra Arriola Incorporation: Variable Capital Corporation established in Mexico. Board Members: Carlos Fernando Pellecer Valenzuela Purpose: To provide and receive all manner of technical, ad- ministrative, or counseling services for industrial, commercial, and service companies; Promote, organize, manage, supervise, provide, and direct personnel training courses; Perform all types of studies, plans, projects, and research; Engage the necessary professional and technical personnel. Management: Carlos Fernando Pellecer Valenzuela Americonsult de Costa Rica S.A. (a subsidiary of Americonsult S.A de C.V.) Incorporation: Joint Stock Corporation established in Costa Rica. Chairman of the Board: Antonio Olortegui Marky Paid-in Capital: ThUSD$5 Purpose: General trade; industry, agriculture, and livestock. Board Members: Andres Enrique del Valle, Eitel Ramiro and Diego Alfonsin Balza Stake in 2023: 99.80% Paid-in Capital: ThUSD$20 YOY variation: 0.0% Stake in 2023: 99.80% General Manager: Antonio Olortegui Marky Prime Cargo SpA (a subsidiary of Lan Cargo S.A.) Incorporation: Joint Stock Corporation established in Chile in 2023. Purpose: The exclusive purpose of the Company shall be the performance of warehousing activities of all types of products and/or merchandise; and, in general, the performance of any other activity and/or business directly related to or comple- mentary to warehousing activities, or that are necessary and/ or convenient for the adequate development of such activities, enabling the Company to provide comprehensive warehousing solutions. % of Holding's assets: -0.03523% YOY variation: 0.0% Management: Diana Olivares and Eduardo Opazo % of Holding's assets: 0.00747% Americonsult de Guatemala S.A. (a subsidiary of Americonsult S.A de C.V.) Management: Luis Ignacio Sierra Arriola, Alejandro Fernandez Espinoza (Treasurer), Luis Miguel Renguel Lopez, Tomas Nassar Perez and Marjorie Hernandez Valverde. Incorporation: Joint Stock Corporation incorporated in Gua- temala. LATAM AIRLINES PERU S.A. Purpose: Powers to represent, broker, negotiate, and market; carry out all types of commercial and industrial activities; all manner of trade in general; broad purpose that allows for all manner of operations within the country. Incorporation: Joint Stock Corporation established in Peru in 1997. Purpose: Render air transportation services for passengers, cargo, and correspondence, both nationally and internationally, pursuant to current civil aeronautical legislation. Paid-in Capital: ThUSD$912 Paid-in Capital: ThUSD$76 Stake in 2023: 100% YOY variation: 0.0% Stake in 2023: 99.13% YOY variation: 0.0% Paid-in Capital: ThUSD$43,445 Profit for the period: ThUSD$(12,725) % of Holding's assets: 0.00622% % of Holding's assets: -0.0149% Stake in 2023: 99.81% practical instruction services, as well as training for its own and third-party aeronautical personnel in the various modes and specialties; import spare parts and replacements related to aeronautical activities, for itself and for third parties; provide airport services to third parties; represent or broker national and foreign air transport companies for passengers or cargo, and in general, companies that provide services to the aero- nautical sector. Paid-in Capital: ThUSD$796 Stake in 2023: 81.30% YOY variation: 0.0% % of Holding's assets: 0.78611% Board Members: Jorge Nicolas Cortazar Cardoso (Princi- pal), Jose Mauricio Rodriguez Munera (regular), Jaime Antonio Gongora Esguerra (regular), Andres Bianchi Urdinola (deputy member), Santiago Alvarez Matamoros (deputy member) and Helen Victoria Warner Sanchez (deputy member). Management: Jaime Antonio Gongora Esguerra (regular) and Erika Zarante Bahamon (deputy member). Inversiones Aéreas S.A. Incorporation: Joint Stock Corporation established in Peru. Purpose: a. To promote, establish, organize, operate, and participate in the capital and equity of all types of trade companies, civil associations, industrial, commercial, service, or any other type of associations or companies, both national and foreign, as well as to participate in their management or settlement. b. The acquisition, disposal and, in general, the trading of all kinds of shares, stakes, and any other security permitted by law. 264 ANNUAL REPORT 202313 —Financial reports —Affiliates and subsidiaries The lease and charter of aircraft, ships, buses, trains, and other forms of transportation for the rendering of tourist services. LAN PAX GROUP S.A. Chairman of the Board: Cesar Emilio Rodríguez Larraín Salinas Offering air transportation in any form, whether for passen- gers, cargo, or mail. YOY variation: 0.0% % of Holding's assets: 0.33232% Board Members: Cesar Emilio Rodriguez Larrain Salinas, Ignacio Cueto Plaza (LATAM Executive), Enrique Cueto Plaza (LATAM Executive), Jorge Harten Costa, Andres Rodriguez Larrain Miro Quesada, Emilio Rodriguez Larrain Miro Quesada and Roberto Alejandro Alvo Milosawlewitsch (LATAM Executive) General Manager: Manuel Van Oordt LATAM TRAVEL CHILE II S.A. Incorporation: Joint Stock Corporation established in Chile in 2012. Purpose: The operation, management, and representation of national or foreign companies or businesses in lodging, ship- ping, aviation, and tourism activities in general; brokerage of tourist services, such as: Any others, directly or indirectly related to the rendering of the services described above. Paid-in Capital: ThUSD$10 Stake in 2023: 99.99% YOY variation: 0.0% % of Holding's assets: 0.00602% Incorporation: Incorporated as a closed stock company in 2001. Purpose: Perform investments in all manner of goods, be they assets or real estate, tangible or intangible. Within its line of business, the Company may create other types of companies of any sort; acquire rights in already existing corporations, manage, modify, and settle them. Overall, it may acquire and sell all manner of goods and operate them, on its own behalf or for third parties, as well as perform all manner of acts and enter all manner of contracts conducive to its goals. Exercise the development and operation of all other activities derived from and/or related, connected, contributory, or complemen- tary to the company's corporate purpose. Board Members: Andres del Valle Eitel (LATAM Executive), Roberto Alvo Milosawlewitsch (LATAM Executive) and Ramiro Alfonsin Balza (LATAM Executive) General Manager: Nicolas Salazar LATAM TRAVEL S.R.L. Paid-in Capital: ThUSD$16,925 Profit for the period: ThUSD$14,167 Stake in 2023: 99.99% YOY variation: 0.0% Purpose: To perform investments on its own behalf or for third parties, or related to third parties, in other stock companies, regardless of corporate purpose, established or to be estab- lished, within the Argentine Republic or abroad, via acquisition, incorporation, or sale of stakes, shares, quotas, bonds, options, commercial paper, convertible or otherwise, other transfer- rable securities, or other forms of investment allowed by the applicable regulation at any given moment, either to hold them in its own portfolio, or to sell them partially or in full, as may be the case. For this purpose, the company may carry out all transactions that are not expressly forbidden by law in compliance with its corporate purpose, and it has full legal capacity to acquire rights, contract obligations, and exercise all acts that are not expressly forbidden by law or statute. Paid-in Capital: ThUSD$14,845 Stake in 2023: 99.95% YOY variation: 0.0% % of Holding's assets: -0.01419% Board Members: Manuel Maria Benites Jorge Luis Perez Alati Rosario Altgelt the booking of seats and the sale of tickets in all kinds of do- mestic and international forms of transportation. Incorporation: Limited Liability Company established in Bolivia. % of Holding's assets: -9.15814% The booking, acquisition, and sale of accommodation and tour- ist services, tickets or bills to all types of shows, museums, monuments, and protected areas in the country. Purpose: Operation, management, and representation of national or foreign companies or businesses in the lodging, shipping, aviation, and tourism activities in general. The organization, promotion, and sale of the so-called tourist packages, understood as the set of tourist services (catering, transportation, accommodation, etc.), adjusted or projected at the request of the client at a pre-set price, to be operated within the national territory. Paid-in Capital: ThUSD$0 Stake in 2023: 100% YOY variation: 0.0% Board Members: Andres del Valle Eitel (LATAM Executive), Roberto Alvo Milosawlewitsch (LATAM Executive) and Felipe Pumarino (LATAM Executive) Management: Manuel Maria Benites, Jorge Luis Perez Alati, Jeronimo Cortes and Diego Potenza. Atlantic Aviation Investments LLC General Manager: Andrés del Valle Eitel (LATAM Executive) AFFILIATE COMPANIES OF LAN PAX GROUP S.A. AND STAKES Inversora Cordillera S.A. and affiliates Incorporation: Limited Liability Company established in the United States. Purpose: Any and all lawful business that the company may undertake. Air, land, sea, and river tourist transportation within and out- side the national territory. % of Holding's assets: 0.00063% Name: Inversora Cordillera S.A. Paid-in Capital: ThUSD$1 Board Members: Julio Quintanilla Quiroga and Sergio Antelmo Incorporation: A joint stock corporation incorporated in Ar- gentina. Stake in 2023: 99% 265 ANNUAL REPORT 202313 —Financial reports —Affiliates and subsidiaries YOY variation: 0.0% YOY variation: 0.0% % of Holding's assets: 0.07807% % of Holding's assets: 0.00641% Board Members: Andrés del Valle Eitel Management: Andrés del Valle (LATAM Executive) Board Members: Andres del Valle, Manuel Van Oordt and Fe- lipe Pumarino. General Manager: Ramiro Alfonsin Balza (LATAM Executive) LATAM Airlines Ecuador S.A. (Formerly, Aerolane Líneas Aé- reas Nacionales del Ecuador S.A.) Aerovias de Integración Regional S.A.– Aires S.A. Incorporation: Joint Stock Corporation established in Ecuador. Incorporation: Joint-stock corporation incorporated in Colombo, Colombiabia. company can acquire, for any purpose, airplanes, spare parts, replacements, and accessories of any kind, necessary for public air transportation, as well as sell them, and to set up and op- erate stations to repair and give maintenance to the aircraft. c. Enter into lease, charter, shared code, location or any other contracts on aircraft to exercise its purpose. d. Operate scheduled air transport lines for passengers, cargo, and mail and securities, as well as the vehicle for coordinating the development of social management. m. Merge with other companies and partner with like entities to pursue the development of aviation or for other trade pur- poses. n. Promote, assist technically, finance or manage enterprises or companies related to the corporate purpose. ñ. Enter or execute any kind of civil or commercial, industrial, or financial contracts that are necessary or desirable for the achievement of their own ends. e. Integrate with like, similar, or complementary companies to develop their activity. o. Conduct business and activities that seek customers, and obtain from the competent authorities the necessary autho- rizations and permits to render their services. Purpose: Combined or exclusive air transport of passengers, cargo, and correspondence. Paid-in Capital: ThUSD$34,100 Stake in 2023: 100% YOY variation: 0.0% % of Holding's assets: 0.14446% Board Members: Xavier Rivera and Mariela Anchundia CEO: Mariela Anchundia Holdco Ecuador S.A Incorporation: Joint Stock Corporation established in Chile in 2014. Purpose: Carry out all manner of investments for profitable purposes pertaining to tangible or intangible, personal or real estate assets, either in Chile or abroad. Paid-in Capital: ThUSD$507 Stake in 2023: 54.79076% 266 Purpose: The company's corporate purpose shall be the oper- ation of national or international commercial air transportation services, in any form, and therefore, the entering into and execution of contracts for the transportation of passengers, objects or luggage, correspondence, and cargo in general, pursuant to the operating permits issued to this effect by the Special Administrative Unit of Civil Aeronautics, or the agency that may carry out said functions in the future, adhering fully to the provisions of the Code of Commerce, the Colombian Aviation Regulations, and any other rules issued on the matter. Likewise, to provide maintenance and adaptation services for the equipment related to the operation of air transportation services within the country and abroad. In order to fulfill said purpose, the company will be authorized to invest in other national or foreign companies with purposes that are the same, similar, or complementary to the company’s. To fulfill its corporate purpose, the company may, among other things: f. Accept national or foreign representations of services of the same business or of complementary businesses. g. Acquire property and real estate for the development of its social purposes, build such facilities or constructions, such as warehouses, offices etc., dispose of or tax them. h. Carry out imports and exports, as well as all foreign trade operations required. i. Take money on interest and provide personal, real, and bank guarantees, either on its own behalf or for third parties. j. Participate in all manner of securities transactions, such as purchase or sale of debentures acquired by third parties when resulting in an economic or equity benefit for the company, and obtain loans through bonds or other liability instruments. a. Check, inspect, or provide maintenance and/or repairs to its own or third-party aircraft, as well as spare parts and acces- sories, through the Company’s Aeronautical Repair Stations, providing the necessary trainings for said purpose. k. Enter into contracts with third parties for the management and operation of the businesses it may organize to achieve its corporate purposes. p. The development and performance of other activities aris- ing from the corporate purpose and/or related, connected, contributory, or complementary activities thereto, including the rendering of tourist services under any mode permitted by law, such as travel agencies. q. Managing any lawful business or activity, whether or not in trade, provided that it is related to its corporate purpose, or that it allows the most rational operation of the public service to be rendered. r. Make investments of any kind to use the funds and reserves that are constituted in accordance with the law or these bylaws. Paid-in Capital: ThUSD$3,389 Stake in 2023: 99.23168% YOY variation: 0.01404% % of Holding's assets: 0.07586% b. Organize, establish, and invest in commercial transportation companies in Colombia or abroad to perform, industrially or commercially, the economic activity that is its purpose, so the l. Enter into contracts of companies and acquire shares or stakes in those already established, whether national or for- eign; make contributions to both. Board Members: Jorge Nicolas Cortazar Cardoso (regular), Jaime Antonio Gongora Esguerra (regular), Jose Mauricio Rodriguez Munera (regular), Gabriel Vallejo Lopez (deputy member), Hel- ANNUAL REPORT 202313 —Financial reports —Affiliates and subsidiaries assistance services for all types of aircraft, equipment, acces- sories, and material for air navigation, computer reservation services, transportation services for people and/or cargo and/ or correspondence, by land or water, as an accessory to air transportation and/or integrating a combined transportation with the latter, as well as all sorts of assistance for air navi- gation activities, such as the supply of food and/or elements for use on board. TECHNICAL TRAINING LATAM S.A. % of Holding's assets: -0.00740% Incorporation: Incorporated as a corporation in 1997. Chairman of the Board: Vacant Purpose: Its corporate purpose is to provide training and other types of related services. Board Members: Fernando Augusto Carneiro de Carvalho and Patricia Mendoza Mallo Paid-in Capital: ThUSD$609 PROFESSIONAL AIRLINE SERVICES INC. en Victoria Warner Sanchez (deputy member) and Santiago Alvarez Matamoros (deputy member). Management: Erika Zarante Bahamon and Jaime Antonio Gongora Esguer LAN Argentina S.A. (A subsidiary of Inversora Cordillera S.A.) Incorporation: A joint stock corporation incorporated in Ar- gentina. Purpose: Perform, on its own behalf or for third parties, inde- pendently or in association with third parties in the country or abroad, the following activities: Financial: Perform any type of financial transaction in general, except for those provided in the Financial Institutions Act and any others requiring a public tender process. Stake in 2023: 100% YOY variation: 0.0% Mandates: Fulfill mandates and commissions. Profit for the period: ThUSD$165 Incorporation: Company established in the United States in 1994. Purpose: Airport staffing services for LATAM group. Aeronautics: Air transportation in all its forms, scheduled and/ or chartered (hired charter or air taxi), local or international, of persons and things, correspondence, clearing, works, and air services in general, as a public or private concession; operate public services, pilot school, and personnel training in air navi- gation, design, engineering, research, assembly- manufacturing, import and/or export of all sorts of aircrafts and their parts, equipment, accessories, and materials for air navigation, as well as render maintenance and technical assistance services to said crafts. Representations: of national or foreign persons related to activities pertaining to its corporate purpose. % of Holding's assets: 0.00241% Investing: Establish and participate in companies through shares, fostering their creation, investing in them the necessary capital for those ends, and rendering services to them within the limits established. For said purposes, the Company has full legal capacity to acquire rights, assume obligations, and exercise the acts not expressly forbidden to it by law and by these Bylaws. Board Members: Sebastian Acuto (LATAM executive), Ramiro Alfonsin Balza (LATAM executive) and Hernan Pasman (LATAM executive). General Manager: Jorge Sturla (LATAM executive) JARLETUL S.A. Paid-in Capital: ThUSD$63 Profit for the period: ThUSD$1,520 Stake in 2023: 100% YOY variation: 0.0% % of Holding’s assets: 0.03155% Treasurer: Eduardo Opazo Commercial: Through the purchase, sale, exchange, rental in all its forms, leasing, imports, and exports of all types of goods, supply and transfer of aircrafts, parts AND components, accessories, materials, and inputs, brokerage in formalizing insurance to cover the risks of the services contracted, and performance of all types of commercial transactions that normally take place in airports. Paid-in Capital: ThUSD$7,159 Stake in 2023: 94.95770% YOY variation: -0.03760% % of Holding's assets: 0.03965% Incorporation: Joint Stock Corporation established in Uruguay in 2017. Chairman: Antonio Orlandini Purpose: Its corporate purpose is the operation, management, and representation of national or foreign companies or busi- nesses in hospitality, shipping, aviation, and tourism activities in general. LATAM FINANCE LIMITED Incorporation: Company established in the Caiman Islands in 2016. Tourism: Through the creation, development, and operation of resorts and properties destined to lodge people, as well as tourist activities in every form, including motor vehicle rentals and tourist reservation services. Services: Through the rendering of maintenance and technical 267 Board Members: Manuel Maria Benites, Jorge Luis Perez Alati and Rosario Altgelt Profit for the period: ThUSD$8 Paid-in Capital: ThUSD$0 Paid-in Capital: ThUSD$0 Purpose: Its purpose is to issue securitized bonds. Management: Manuel Maria Benites, Jorge Luis Perez Alati, Jeronimo Cortes and Diego Potenza Stake in 2023: 100% YOY variation: 0.0% Profit for the period: ThUSD$(1) Stake in 2023: 100% ANNUAL REPORT 202313 —Financial reports —Affiliates and subsidiaries YOY variation: 0.0% % of Holding's assets: -1.42158% Chairman of the Board: Not applicable Board Members: Andres del Valle Eitel, Ramiro Alfonsin Balza and Joaquin Arias Acuña PEUCO FINANCE LIMITED Incorporation: Company established in the Caiman Islands in 2015. Purpose: Its purpose is to participate in financing operations with other companies of LATAM Group. Paid-in Capital: ThUSD$0 Profit for the period: ThUSD$0 Stake in 2023: 100% YOY variation: 0.0% % of Holding's assets: 0.0% Chairman of the Board: Not applicable Board Members: Andres del Valle Eitel and Joaquin Arias Acuña LATAM TRAVEL S.A. Incorporation: Joint Stock Corporation established in Argentina. Purpose: To perform on its own behalf or for third parties and/ or in partnership with third parties, within the country and/or abroad, the following activities and transactions: ner of operations and activities involving the sale of airfare, land, river, and sea tickets, both nationally and abroad, or any other service related to the tourism industry in general. The aforementioned services may be carried out on its own behalf or upon request from third parties, via mandate, commission, the use of systems or methods deemed convenient for said purpose, be they manual, mechanical, electronic, telephone, or internet methods, or any other type or technology that may suit said purpose. The Company may perform ad hoc or relat- ed activities to the purpose described, such as purchase and sales, imports, exports, reexport, licensing, and representation of all manner of goods, services, “know-how, ” and technology directly or indirectly related to the purpose described; market, by any means the technology created or whose license or pat- ent it has acquired or manages; develop, distribute, promote and market all types of content for mass media of any sort. Tourism: Via the performance of all activities related to the tourist and lodging industry, as responsible operator or third-party service operator, or as travel agent. Via the cre- ation of exchange, tourism, excursion, and tour programs; the brokerage and booking and rendering of services through any form of transportation within the country or abroad, and ticket sales; brokerage for hiring lodging services in the country or abroad; booking of hotels, motels, tourist apartments, and other tourist facilities; organization of trips and tourism for individuals or groups, excursions, or similar activities within the country or abroad; reception and assistance for tourists during their trip and stay in the country, provision of tour guide services, and forwarding of their baggage; representing other national or foreign travel and tourism agencies, companies, or institutions, in order to render any of these services on their behalf. Mandatory: Via the acceptance, performance, and granting of representations, concessions, commissions, agencies, and mandates in general. service, development, support, and promotion of companies related to air transportation activities, but not exclusive to said activity, in the management, industrial, commercial, techni- cal, and advertising areas, to be provided, when the nature of the issue so requires, by certified professionals per the cor- responding regulation, and the provision of organization and management, care, maintenance, and surveillance services, and of the suitable personnel, especially prepared to carry out said tasks. Financial: Via its participation in other companies already cre- ated or to be created, either through the acquisition of shares in established companies, or through the establishment of new companies, via the awarding or securing of credits, loans, cash advances secured or unsecured by collateral or personal guarantee; the awarding of guarantees and sureties in favor of third parties for a fee or free of charge; placement of funds in foreign currency, gold or currencies, or bank deposits of any type. To achieve these purposes, the company has full legal capacity to exercise all acts not expressly forbidden by law or statue, including making borrowings publicly or privately via the issuance of debentures and tradable securities, and performing all manner of financial transactions except those comprised under Law 21,526 and any others requiring a public tender process. Paid-in Capital: ThUSD$4,432 Stake in 2023: 100% YOY variation: 0.0% % of Holding's assets: 0.02041% Board member: Jeronimo Cortes Management: Jerónimo Cortés and Diego Potenza Commercial: Carry out, intervene, develop, or design all man- Consulting: Provide consulting, support, and management services on all matters related to the organization, installation, 268 ANNUAL REPORT 202313 —Financial reports —Affiliates and subsidiaries LAN CARGO S.A. AND AFFILIATES Statements of Financial Position Statements of Comprehensive Income As of December 31, 2023 ThUS$ As of December 31, 2022 ThUS$ As of December 31, 2023 ThUS$ As of December 31, 2022 ThUS$ ASSETS Total current assets Total non-current assets Total assets LIABILITIES AND EQUITY LIABILITIES Total current liabilities Total non-current liabilities Total liabilities EQUITY Parent’s ownership interest Non-controlling interest Total equity Total liabilities and equity Statements of Income by Function Revenue Cost of sales Gross margin Income (loss) from operation activities Income (loss) before taxes Income tax (expense)/benefits NET INCOME (LOSS) FOR THE YEAR Income (loss) attributable to owners of the parent Income (loss) attributable to non-controlling interest Net Income (loss) for the year 269 196,254 506,572 702,826 187,148 415,766 602,914 284,256 66,157 350,413 194,360 158,053 352,413 702,826 1,012,966 (952,392) 60,574 52,179 36,679 (12,866) 23,813 24,441 (628) 23,813 283,435 275,650 559,085 104,535 (60,706) 43,829 602,914 2,136,257 (2,068,992) 67,265 (11,120) (57,858) 3,215 (54,643) (53,459) (1,184) (54,643) NET INCOME/(LOSS) 23,813 (54,643) Total other comprehensive (loss) that will not be reclassified to income before taxes Total other comprehensive income that will be reclassified to income before taxes Other components of other comprehensive income (loss), before taxes Income taxes related to components of other comprehensive loss will be reclassified to income Total comprehensive income (loss) Comprehensive income (loss) attributable to: Comprehensive income (loss) attributable to owners of the parent Comprehensive income (loss) attributable to non-controlling interests TOTAL COMPREHENSIVE INCOME (LOSS) 17,939 (2,274) (261) 17,678 751 18,429 17,519 343 17,862 (21) (2,295) 567 (56,371) (55,187) (1,184) (56,371) Statements of Cash Flows - Direct Method Net cash (outflow) inflow from operating activities 6,329 15,353 Net cash (outflow) inflow from investing activities Net cash inflow (outflow) from financing activities Effects of variation in the exchange rate on cash and cash equivalents (68) (9,231) (2,969) (7,977) (8,353) (976) CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR 42,676 45,209 ANNUAL REPORT 2023 13 —Financial reports —Affiliates and subsidiaries Statements of Changes in Equity YEAR 2023 Equity as of January 1, 2023 Parent’s ownership interest ThUS$ Non- controlling interest ThUS$ Total equity ThUS$ 104,535 (60,706) 43,829 Total increase (decrease) in equity Comprehensive income Net income/(loss) for the period Other comprehensive income 24,441 (5,666) Total comprehensive income 18,775 Increase (decrease) through transfers and other changes, equity 72,306 195,616 Closing balance as of December 31, 2023 (628) (285) (913) 218,416 156,797 23,813 (5,951) 17,862 290,722 352,413 YEAR 2022 Patrimonio 1 de enero de 2022 164,653 (64,519) 100,134 Total increase (decrease) in equity Comprehensive income Net income/(loss) for the period Other comprehensive income (53,459) (1,728) (55,187) Total comprehensive income Increase (decrease) through transfers and other changes, equity (4,931) 104,535 Closing balance as of December 31, 2022 (1,184) - (1,184) 4,997 (60,706) (54,643) (1,728) (56,371) 66 43,829 INVERSIONES LAN S.A. Statements of Financial Position ASSETS Total current assets Total non-current assets Total assets LIABILITIES AND EQUITY LIABILITIES Total current liabilities Total non-current liabilities Total liabilities EQUITY Parent’s ownership interest Total equity As of December 31, 2023 ThUS$ As of December 31, 2022 ThUS$ 1,156 83 1,239 1,223 58 1,281 5 45 50 11 45 56 1,189 1,189 1,225 1,225 Total liabilities and equity 702,826 602,914 Statements of Income by Function Gross margin Income (loss) before taxes Income tax (expense)/benefits NET INCOME (LOSS) FOR THE YEAR Income (loss) attributable to owners of the parent Net Income (loss) for the year (28) (36) - (36) (36) (36) 7 (1) (13) (14) (14) (14) 270 ANNUAL REPORT 2023 13 —Financial reports —Affiliates and subsidiaries Statements of Comprehensive Income NET INCOME/(LOSS) Total comprehensive income (loss) Comprehensive income (loss) attributable to owners of the parent TOTAL COMPREHENSIVE INCOME (LOSS) Statements of Cash Flows - Direct Method Net cash (outflow) inflow from operating activities Net cash (outflow) inflow from investing activities Net cash inflow (outflow) from financing activities Effects of variation in the exchange rate on cash and cash equivalents Net (decrease) increase in cash and cash equivalents CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR As of December 31, 2023 ThUS$ As of December 31, 2022 ThUS$ (36) (36) (36) (36) (9) 5 (25) (8) (37) 413 376 (14) (14) (14) (14) 10 2 - (5) 7 406 413 Statements of Changes in Equity YEAR 2023 Equity as of January 1, 2023 Total comprehensive income Closing balance as of December 31, 2023 YEAR 2022 Equity as of January 1, 2022 Total comprehensive income Closing balance as of December 31, 2022 Parent’s ownership interest ThUS$ Non- controlling interest ThUS$ 1,225 (36) 1,189 1,239 (14) 1,225 - - - - - - Total equity ThUS$ 1,225 (36) 1,189 1,239 (14) 1,225 271 ANNUAL REPORT 2023 13 —Financial reports —Affiliates and subsidiaries As of December 31, 2023 ThUS$ As of December 31, 2022 ThUS$ 288,471 198,765 487,236 193,479 198,753 392,232 1,583,445 252,092 1,835,537 1,462,843 265,125 1,727,968 (1,002,254) (346,047) (1,348,301) (1,342,687) 6,951 (1,335,736) LAN PAX GROUP AND AFFILIATES Statements of Financial Position ASSETS Total current assets Total non-current assets Total assets LIABILITIES AND EQUITY LIABILITIES Total current liabilities Total non-current liabilities Total liabilities EQUITY Parent’s ownership interest Non-controlling interest Total equity Total liabilities and equity 487,236 392,232 Statements of Income by Function Revenue Cost of sales Gross margin Income (loss) from operation activities Income (loss) before taxes Income tax (expense)/benefits NET INCOME (LOSS) FOR THE YEAR Income (loss) attributable to owners of the parent Income (loss) attributable to non-controlling interest Net Income (loss) for the year Statements of Comprehensive Income NET INCOME/(LOSS) Other comprehensive loss, before taxes, currency translation differences Total comprehensive income (loss) Comprehensive income (loss) attributable to: Comprehensive income (loss) attributable to owners of the parent Comprehensive income (loss) attributable to non-controlling interests TOTAL COMPREHENSIVE INCOME (LOSS) As of December 31, 2023 ThUS$ As of December 31, 2022 ThUS$ 777,370 (701,518) 75,852 (47,826) 8,197 (683) 7,514 14,167 (6,653) 7,514 7,514 (27,517) (20,003) 22,660 (42,663) (20,003) 534,979 (529,730) 5,249 (135,604) (124,022) 2,349 (121,673) (120,717) (956) (121,673) (121,673) (15,021) (136,694) (126,301) (10,393) (136,694) 272 ANNUAL REPORT 2023 13 —Financial reports —Affiliates and subsidiaries Statements of Cash Flows - Direct Method Net cash (outflow) inflow from operating activities Net cash (outflow) inflow from investing activities Net cash inflow (outflow) from financing activities Net (decrease) increase in cash and cash equivalents before effect of exchanges rate change This document is locked. 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As of December 31, 2023 ThUS$ As of December 31, 2022 ThUS$ 93,512 (899) 24,595 (1,762) 112 (33) 92,725 22,800 (263) (2,653) Net (decrease) increase in cash and cash equivalents 92,462 20,150 CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR 184,150 91,687 Parent’s ownership interest ThUS$ Non- controlling interest ThUS$ Total equity ThUS$ Statements of Changes in Equity YEAR 2023 Equity as of January 1, 2023 Total comprehensive income Increase (decrease) through transfers and other changes, equity Closing balance as of December 31, 2023 (1,342,687) 22,660 317,773 (1,002,254) 6,951 (42,663) (310,335) (346,047) (1,335,736) (20,003) 7,438 (1,348,301) YEAR 2022 Equity as of January 1, 2022 Total comprehensive income Increase (decrease) through transfers and other changes, equity Closing balance as of December 31, 2022 (1,219,473) (126,301) 3,087 (1,342,687) 3,028 (10,393) 14,316 6,951 (1,216,445) (136,694) 17,403 (1,335,736) 273 ANNUAL REPORT 2023 13 —Financial reports —Affiliates and subsidiaries As of December 31, 2023 ThUS$ As of December 31, 2022 ThUS$ 114 114 115 115 208,621 - 208,621 208,621 - 208,621 (208,507) (208,507) 114 (208,506) (208,506) 115 - - (1) (1) - (1) 169,582 169,582 As of December 31, 2023 ThUS$ As of December 31, 2022 ThUS$ Estado de Resultados Integrales Consolidado NET INCOME/(LOSS) Total comprehensive income (loss) (1) (1) 169,582 169,582 Statements of Cash Flows - Direct Method Net cash (outflow) inflow from operating activities Net cash (outflow) inflow from investing activities Net cash inflow (outflow) from financing activities Effects of variation in the exchange rate on cash and cash equivalents CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR - (1) - (1) 115 114 - (1) - (1) 116 115 Statements of Changes in Equity YEAR 2023 Equity as of January 1, 2023 Total comprehensive income Closing balance as of December 31, 2023 YEAR 2022 Equity as of January 1, 2022 Total comprehensive income Closing balance as of December 31, 2022 Parent’s ownership interest ThUS$ Non- controlling interest ThUS$ Total equity ThUS$ (208,506) (1) (208,507) (378,088) 169,582 (208,506) - - - - - - (208,506) (1) (208,507) (378,088) 169,582 (208,506) LATAM FINANCE LIMITED Statements of Financial Position ASSETS Total current assets Total assets LIABILITIES AND EQUITY LIABILITIES Total current liabilities Total non-current liabilities Total liabilities EQUITY Parent’s ownership interest Total equity Total liabilities and equity Statements of Income by Function Gross margin Income (loss) from operation activities Income (loss) before taxes NET INCOME (LOSS) FOR THE YEAR 274 ANNUAL REPORT 2023 13 —Financial reports —Affiliates and subsidiaries PROFESSIONAL AIRLINE SERVICES INC Statements of Financial Position ASSETS Total current assets Total assets LIABILITIES AND EQUITY LIABILITIES Total current liabilities Total liabilities EQUITY Parent’s ownership interest Total equity As of December 31, 2023 ThUS$ As of December 31, 2022 ThUS$ 16,931 16,931 56,896 56,896 12,303 12,303 4,628 4,628 53,787 53,787 3,109 3,109 Total liabilities and equity 16,931 56,896 Statements of Income by Function Revenue Cost of sales Gross margin Income (loss) from operation activities Income (loss) before taxes Income tax (expense)/benefits NET INCOME (LOSS) FOR THE YEAR 75,007 (45,009) 29,998 1,894 1,894 (374) 1,520 64,079 (38,208) 25,871 285 285 (28) 257 275 Statements of Comprehensive Income NET INCOME/(LOSS) TOTAL COMPREHENSIVE INCOME (LOSS) Statements of Cash Flows - Direct Method Net cash (outflow) inflow from operating activities Effects of variation in the exchange rate on cash and cash equivalents Net (decrease) increase in cash and cash equivalents CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR Statements of Changes in Equity YEAR 2023 Equity as of January 1, 2023 Total comprehensive income Closing balance as of December 31, 2023 YEAR 2022 Equity as of January 1, 2022 Total comprehensive income Closing balance as of December 31, 2022 As of December 31, 2023 ThUS$ As of December 31, 2022 ThUS$ 1,520 1,520 257 257 (832) (832) (832) 1,452 620 Parent’s ownership interest ThUS$ 3,109 1,520 4,629 2,851 258 3,109 (1,431) (1,431) (1,431) 2,883 1,452 Total equity ThUS$ 3,109 1,520 4,629 2,851 258 3,109 ANNUAL REPORT 2023 13 —Financial reports —Affiliates and subsidiaries As of December 31, 2023 ThUS$ As of December 31, 2022 ThUS$ - 351,587 351,587 - 351,587 351,587 3,791 - 3,791 3,237 - 3,237 347,796 347,796 348,350 348,350 351,587 351,587 - (554) - (554) (554) (554) - (497) - (497) (497) (497) As of December 31, 2023 ThUS$ As of December 31, 2022 ThUS$ Statements of Comprehensive Income NET INCOME/(LOSS) Total comprehensive income (loss) Comprehensive income (loss) attributable to owners of the parent TOTAL COMPREHENSIVE INCOME (LOSS) (554) (554) (554) (554) (497) (497) (497) (497) Statements of Cash Flows - Direct Method Net cash (outflow) inflow from operating activities Net cash (outflow) inflow from investing activities Net cash inflow (outflow) from financing activities Effects of variation in the exchange rate on cash and cash equivalents Net (decrease) increase in cash and cash equivalents CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR - - - - - - - - - - - - - - Statements of Changes in Equity YEAR 2023 Equity as of January 1, 2023 Total comprehensive income Closing balance as of December 31, 2023 YEAR 2022 Equity as of January 1, 2022 Total comprehensive income Closing balance as of December 31, 2022 Parent’s ownership interest ThUS$ Non- controlling interest ThUS$ Total equity ThUS$ 348,350 (554) 347,796 348,847 (497) 348,350 - - - - - - 348,350 (554) 347,796 348,847 (497) 348,350 HOLDCO I S.A. Statements of Financial Position ASSETS Total current assets Total non-current assets Total assets LIABILITIES AND EQUITY LIABILITIES Total current liabilities Total non-current liabilities Total liabilities EQUITY Parent’s ownership interest Total equity Total patrimonio y pasivos Statements of Income by Function Gross margin Income (loss) before taxes Income tax (expense)/benefits NET INCOME (LOSS) FOR THE YEAR Income (loss) attributable to owners of the parent Net Income (loss) for the year 276 ANNUAL REPORT 2023 13 —Financial reports —Affiliates and subsidiaries As of December 31, 2023 ThUS$ As of December 31, 2022 ThUS$ 16 - 16 16 - 16 1,101 1,101 1,110 1,110 (1,085) (1,085) (1,094) (1,094) 16 16 - - - 7 8 - 8 - - - (2) (2) - (2) As of December 31, 2023 ThUS$ As of December 31, 2022 ThUS$ Statements of Comprehensive Income NET INCOME/(LOSS) Total comprehensive income (loss) Statements of Cash Flows - Direct Method Net cash (outflow) inflow from operating activities Net (decrease) increase in cash and cash equivalents before effect of exchanges rate change Net (decrease) increase in cash and cash equivalents CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR 8 8 (6) (7) (7) 15 8 Statements of Changes in Equity YEAR 2023 Equity as of January 1, 2023 Total comprehensive income Closing balance as of December 31, 2023 YEAR 2022 Equity as of January 1, 2022 Total comprehensive income Closing balance as of December 31, 2022 Parent’s ownership interest ThUS$ Non- controlling interest ThUS$ (1,094) 8 (1,086) (1,092) (2) (1,094) - - - - - - (2) (2) (7) (7) (7) 22 15 Total equity ThUS$ (1,094) 8 (1,086) (1,092) (2) (1,094) JARLETUL S.A. Statements of Financial Position ASSETS Total current assets Total non-current assets Total assets LIABILITIES AND EQUITY LIABILITIES Total current liabilities Total liabilities EQUITY Parent’s ownership interest Total equity Total liabilities and equity Statements of Income by Function Revenue Cost of sales Gross margin Income (loss) from operation activities Income (loss) before taxes Income tax (expense)/benefits NET INCOME (LOSS) FOR THE YEAR 277 ANNUAL REPORT 2023 13 —Financial reports —Affiliates and subsidiaries As of December 31, 2023 ThUS$ As of December 31, 2022 ThUS$ 312,628 21,853 334,481 305,288 30,485 335,773 281,208 4,437 285,645 276,875 4,303 281,178 48,836 48,836 54,595 54,595 LATAM AIRLINES PERÚ S.A. Statements of Financial Position ASSETS Total current assets Total non-current assets Total assets LIABILITIES AND EQUITY LIABILITIES Total current liabilities Total non-current liabilities Total liabilities EQUITY Parent’s ownership interest Total equity Total liabilities and equity 334,481 335,773 Statements of Income by Function Revenue Cost of sales Gross margin Income (loss) from operation activities Income (loss) before taxes Income tax (expense)/benefits NET INCOME (LOSS) FOR THE YEAR Income (loss) attributable to owners of the parent Net Income (loss) for the year 1,404,081 (1,271,863) 132,218 3,711 (4,341) (325) (4,666) (4,666) (4,666) 1,257,865 (1,165,039) 92,826 4,774 (12,400) (325) (12,725) (12,725) (12,725) 278 Statements of Comprehensive Income NET INCOME/(LOSS) Total comprehensive income (loss) Comprehensive income (loss) attributable to: Comprehensive income (loss) attributable to owners of the parent TOTAL COMPREHENSIVE INCOME (LOSS) As of December 31, 2023 ThUS$ As of December 31, 2022 ThUS$ (4,666) (4,666) (12,725) (12,725) (4,666) (4,666) (12,725) (12,725) Statements of Cash Flows - Direct Method Net cash (outflow) inflow from operating activities Net cash (outflow) inflow from investing activities Net cash inflow (outflow) from financing activities Net (decrease) increase in cash and cash equivalents before effect of exchanges rate change Net (decrease) increase in cash and cash equivalents CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR Statements of Changes in Equity YEAR 2023 Equity as of January 1, 2023 Total comprehensive income Total transactions with shareholders Closing balance as of December 31, 2023 YEAR 2022 Equity as of January 1, 2022 Total comprehensive income Total transactions with shareholders Closing balance as of December 31, 2023 43,277 (1,751) (91) 41,435 41,435 97,685 Parent’s ownership interest ThUS$ Non- controlling interest ThUS$ 54,595 (4,666) (1,093) 48,836 67,321 (12,725) - 54,596 - - - - - - - - (23,373) (3,947) 1,888 (25,432) (25,432) 56,250 Total equity ThUS$ 54,595 (4,666) (1,093) 48,836 67,321 (12,725) - 54,596 ANNUAL REPORT 2023 13 —Financial reports —Affiliates and subsidiaries As of December 31, 2023 ThUS$ As of December 31, 2022 ThUS$ 21 336 357 1,240 - 1,240 (883) (883) 357 (16) (16) - (16) (16) (16) 31 336 367 1,234 - 1,234 (867) (867) 367 2 2 - 2 2 2 LATAM TRAVEL CHILE II S.A. Statements of Financial Position ASSETS Total current assets Total non-current assets Total assets LIABILITIES AND EQUITY LIABILITIES Total current liabilities Total non-current liabilities Total pasivos EQUITY Parent’s ownership interest Total equity Total liabilities and equity Statements of Income by Function Income (loss) from operation activities Income (loss) before taxes Income tax (expense)/benefits NET INCOME (LOSS) FOR THE YEAR Income (loss) attributable to owners of the parent Net Income (loss) for the year 279 As of December 31, 2023 ThUS$ As of December 31, 2022 ThUS$ Statements of Comprehensive Income NET INCOME/(LOSS) Total comprehensive income (loss) Comprehensive income (loss) attributable to: Comprehensive income (loss) attributable to owners of the parent TOTAL COMPREHENSIVE INCOME (LOSS) Statements of Cash Flows - Direct Method Net cash (outflow) inflow from operating activities Net cash (outflow) inflow from investing activities Net cash inflow (outflow) from financing activities Net (decrease) increase in cash and cash equivalents before effect of exchanges rate change Net (decrease) increase in cash and cash equivalents CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR (16) (16) (16) (16) - - - - - 20 20 Statements of Changes in Equity YEAR 2023 Equity as of January 1, 2023 Total comprehensive income Closing balance as of December 31, 2023 YEAR 2022 Equity as of January 1, 2022 Total comprehensive income Closing balance as of December 31, 2022 Parent’s ownership interest ThUS$ Non- controlling interest ThUS$ (867) (16) (883) (869) 2 (867) - - - - - - 2 2 2 2 (221) - - (221) (221) 241 241 Total equity ThUS$ (867) (16) (883) (869) 2 (867) ANNUAL REPORT 2023 13 —Financial reports —Affiliates and subsidiaries As of December 31, 2023 ThUS$ As of December 31, 2022 ThUS$ 3,648,806 118,296 3,767,102 1,249,804 88,494 1,338,298 577,202 709,536 1,286,738 323,426 174,158 497,584 2,480,364 2,480,364 840,714 840,714 LATAM TRAVEL S.A. Statements of Financial Position ASSETS Total current assets Total non-current assets Total assets LIABILITIES AND EQUITY LIABILITIES Total current liabilities Total non-current liabilities Total liabilities EQUITY Parent’s ownership interest Total equity Total liabilities and equity 3,767,102 1,338,298 Statements of Income by Function Revenue Cost of sales Gross margin Income (loss) from operation activities Income (loss) before taxes Income tax (expense)/benefits Net Income (loss) for the year 2,013,547 (495) 2,013,052 1,558,887 778,318 - 778,318 372,102 (30,992) 341,110 181,724 (1,133,744) - (1,133,744) 280 Statements of Comprehensive Income NET INCOME/(LOSS) TOTAL COMPREHENSIVE INCOME (LOSS) Statements of Cash Flows - Direct Method Net cash (outflow) inflow from operating activities Net cash (outflow) inflow from investing activities Net cash inflow (outflow) from financing activities Net (decrease) increase in cash and cash equivalents before effect of exchanges rate change Net (decrease) increase in cash and cash equivalents As of December 31, 2023 ThUS$ As of December 31, 2022 ThUS$ 778,318 778,318 (1,133,744) (1,133,744) (2,553,495) 1,364,128 - (1,189,367) 2,794,378 (989,812) 90,526 1,411,653 512,367 115,976 CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR 793,839 165,496 CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR 2,398,850 793,839 ANNUAL REPORT 2023 13 —Financial reports —Affiliates and subsidiaries Statements of Changes in Equity YEAR 2023 Equity as of January 1, 2023 Total increase (decrease) in equity Comprehensive income Other comprehensive income Otro resultado integral Total comprehensive income Increase (decrease) through transfers and other changes, equity Closing balance as of December 31, 2023 YEAR 2022 Equity as of January 1, 2022 Total increase (decrease) in equity Comprehensive income Net income/(loss) for the period Other comprehensive income Total comprehensive income Increase (decrease) through transfers and other changes, equity Closing balance as of December 31, 2022 Parent’s ownership interest ThUS$ Total equity ThUS$ 840,714 840,714 778,318 - 778,318 861,332 2,480,364 778,318 - 778,318 861,332 2,480,364 (253,792) (253,792) (1,133,744) - (1,133,744) 2,228,250 840,714 (1,133,744) - (1,133,744) 2,228,250 840,714 LATAM TRAVEL S.R.L. Statements of Financial Position ASSETS Total current assets Total non-current assets Total assets LIABILITIES AND EQUITY LIABILITIES Total current liabilities Total liabilities EQUITY Parent’s ownership interest Total equity Total liabilities and equity Statements of Income by Function Revenue Gross margin Income (loss) before taxes NET INCOME (LOSS) FOR THE YEAR Income (loss) attributable to owners of the parent Net Income (loss) for the year As of December 31, 2023 ThUS$ As of December 31, 2022 ThUS$ 64 28 92 - - 92 92 92 - - 5 5 5 5 64 28 92 5 5 87 87 92 - - 155 155 155 155 281 ANNUAL REPORT 2023 13 —Financial reports —Affiliates and subsidiaries Statements of Comprehensive Income NET INCOME/(LOSS) Total comprehensive income (loss) Comprehensive income (loss) attributable to: Comprehensive income (loss) attributable to owners of the parent TOTAL COMPREHENSIVE INCOME (LOSS) Statements of Cash Flows - Direct Method Net cash (outflow) inflow from operating activities Net cash (outflow) inflow from investing activities Effects of variation in the exchange rate on cash and cash equivalents CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR As of December 31, 2023 ThUS$ As of December 31, 2022 ThUS$ 5 5 5 5 - - - 64 155 155 155 155 - - - 64 Statements of Changes in Equity YEAR 2023 Equity as of January 1, 2023 Total comprehensive income Closing balance as of December 31, 2023 YEAR 2022 Equity as of January 1, 2022 Total comprehensive income Closing balance as of December 31, 2022 282 Parent’s ownership interest ThUS$ Non- controlling interest ThUS$ Total equity ThUS$ 87 5 92 (68) 155 87 - - - - - - 87 5 92 (68) 155 87 PEUCO FINANCE LIMITED Statements of Financial Position ASSETS Total current assets Total assets LIABILITIES AND EQUITY LIABILITIES Total current liabilities Total liabilities Total liabilities and equity Statements of Cash Flows - Direct Method Net cash (outflow) inflow from operating activities Net cash (outflow) inflow from investing activities CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR As of December 31, 2023 ThUS$ As of December 31, 2022 ThUS$ - - - - - - - - - - - - - - - - ANNUAL REPORT 2023 13 —Financial reports —Affiliates and subsidiaries TAM S.A. AND AFFILIATES As of December 31, 2023 ThUS$ As of December 31, 2022 ThUS$ Statements of Financial Position Statements of Comprehensive Income ASSETS Total current assets Total non-current assets Total assets LIABILITIES AND EQUITY LIABILITIES Total current liabilities Total non-current liabilities Total liabilities EQUITY Parent’s ownership interest Non-controlling interest Total equity 2,441,250 1,798,452 4,239,702 1,998,284 1,499,564 3,497,848 2,042,204 985,169 3,027,373 3,302,692 928,855 4,231,547 1,211,177 1,152 1,212,329 (734,514) 815 (733,699) Total liabilities and equity 4,239,702 3,497,848 Statements of Income by Function Revenue Cost of sales Gross margin Income (loss) from operation activities Income (loss) before taxes Income tax (expense)/benefits NET INCOME (LOSS) FOR THE YEAR Income (loss) attributable to owners of the parent Income (loss) attributable to non-controlling interest Net Income (loss) for the year 5,794,599 (4,587,151) 1,207,448 631,524 739,480 1,303 740,783 740,476 307 740,783 4,255,115 (3,973,361) 281,754 (163,903) (89,464) 19,529 (69,935) (70,047) 112 (69,935) 283 NET INCOME/(LOSS) Total other comprehensive (loss) that will not be reclassified to income before taxes Income taxes related to components of other comprehensive loss will be reclassified to income Other comprehensive Income / (loss) Total comprehensive income (loss) Comprehensive income (loss) attributable to: Comprehensive income (loss) attributable to owners of the parent Comprehensive income (loss) attributable to non-controlling interests TOTAL COMPREHENSIVE INCOME (LOSS) Statements of Cash Flows - Direct Method Net cash (outflow) inflow from operating activities Net cash (outflow) inflow from investing activities Net cash inflow (outflow) from financing activities Net (decrease) increase in cash and cash equivalents before effect of exchanges rate change Effects of variation in the exchange rate on cash and cash equivalents Net (decrease) increase in cash and cash equivalents As of December 31, 2023 ThUS$ As of December 31, 2022 ThUS$ 740,783 (69,935) 796,614 (10,792) 8,322 804,936 1,545,719 1,545,328 391 1,545,719 364,468 (31,311) (18,698) 314,459 35,215 349,674 689 (10,103) (80,273) (80,281) 8 (80,273) 886,301 36,345 (354,668) 567,978 (476,568) 91,410 CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR 384,133 225,804 CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR 733,807 384,133 ANNUAL REPORT 2023 13 —Financial reports —Affiliates and subsidiaries Statements of Changes in Equity YEAR 2023 Equity as of January 1, 2023 Total comprehensive income Total transactions with shareholders Closing balance as of December 31, 2023 YEAR 2022 Equity as of January 1, 2022 Total comprehensive income Total transactions with shareholders Closing balance as of December 31, 2022 Parent’s ownership interest ThUS$ Non- controlling interest ThUS$ Total equity ThUS$ (734,515) 1,545,335 400,357 1,211,177 (649,058) (80,281) (5,176) (734,515) 815 391 (54) 1,152 (733,700) 1,545,726 400,303 1,212,329 769 35 11 815 (648,289) (80,246) (5,165) (733,700) 284 TECHNICAL TRAINING LATAM S.A. Statements of Financial Position ASSETS Total current assets Total non-current assets Total assets LIABILITIES AND EQUITY LIABILITIES Total current liabilities Total non-current liabilities Total liabilities EQUITY Parent’s ownership interest Total equity As of December 31, 2023 ThUS$ As of December 31, 2022 ThUS$ 977,726 115,135 1,092,861 1,103,009 111,767 1,214,776 396,039 386,878 782,917 684,262 265,927 950,189 309,944 309,944 264,587 264,587 Total liabilities and equity 1,092,861 1,214,776 Statements of Income by Function Revenue Cost of sales Gross margin Income (loss) from operation activities Income (loss) before taxes Income tax (expense)/benefits NET INCOME (LOSS) FOR THE YEAR Income (loss) attributable to owners of the parent Net Income (loss) for the year 1,110,860 (955,841) 155,019 153,438 153,438 (44,699) 108,739 108,739 108,739 906,015 (818,075) 87,940 69,915 69,915 (60) 69,855 69,855 69,855 ANNUAL REPORT 2023 13 —Financial reports —Affiliates and subsidiaries As of December 31, 2023 ThUS$ As of December 31, 2022 ThUS$ Statements of Comprehensive Income NET INCOME/(LOSS) 108,739 (60) Total other comprehensive (loss) that will not be reclassified to income before taxes Total Other comprehensive income (loss) Total comprehensive income (loss) Comprehensive income (loss) attributable to owners of the parent TOTAL COMPREHENSIVE INCOME (LOSS) (63,382) (63,382) 45,357 45,357 45,357 (15,409) (15,409) (15,469) (15,469) (15,469) Statements of Cash Flows - Direct Method Net cash (outflow) inflow from operating activities Net (decrease) increase in cash and cash equivalents before effect of exchanges rate change Effects of variation in the exchange rate on cash and cash equivalents Net (decrease) increase in cash and cash equivalents (3,269) (157,977) (3,269) 4,489 1,220 (157,977) 4,710 (153,267) CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR 136,469 289,736 CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR 137,689 136,469 285 Statements of Changes in Equity YEAR 2023 Equity as of January 1, 2023 Total comprehensive income Total transactions with shareholders Closing balance as of December 31, 2023 YEAR 2022 Equity as of January 1, 2022 Total comprehensive income Total transactions with shareholders Closing balance as of December 31, 2022 Parent’s ownership interest ThUS$ Non- controlling interest ThUS$ Total equity ThUS$ 264,587 108,739 (63,382) 309,944 1,298,275 54,446 (1,088,134) 264,587 - - - - - - - - 264,587 108,739 (63,382) 309,944 1,298,275 54,446 (1,088,134) 264,587 ANNUAL REPORT 2023 13 —Financial reports —Rationale Comparative analysis and explanation of main trends: 1. CONSOLIDATED FINANCIAL STATEMENT Below, we are presenting the main financial indicators in the Consolidated Financial Statement: PROFITABILITY INDICATORS 31-12-2023 31-12-2022 LIQUIDITY INDICATORS Current liquidity (times) (Current assets in operation/current Liability Acid test ratio (times) (Available funds/current liabilities) INDEBTEDNESS INDICATORS Debt ratio (times): (Current Liability/ Net Worth) (Non-current Liability/ Net Worth) (Current liabilities + non-current liabilities/ Net worth) Current debt/ Total debt (%) Non-current debt/ Total debt (%) Hedging of financial expenses (R.A.I.I. / financial expenses) ACTIVITY INDICATORS Total Assets Investments Disposal of property 0.74 0.30 12.63 18.97 31.60 39.98 60.02 2.04 0.69 0.24 120.36 191.39 311.75 38.61 61.39 0.00 14,667,315 795,787 46,524 13,211,024 780,869 56,794 Profitability indicators are calculated on equity and income attributable to Majority Shareholders. Return on Equity (Net income / average net equity) Return on assets (Net income/ average assets) Yield of operating assets (Net income/ operating assets)1 (Average) 1 Total assets less deferred taxes, personnel current accounts, permanent and temporary investments. Dividend returns (Dividends paid/ market price) 1.29 0.04 0.04 0.00 31.68 0.10 0.11 0.00 Financial analysis 286 ANNUAL REPORT 202313 —Financial reports —Rationale At December 31, 2023, the company's assets totaled ThUSD$14,667,315 which, compared to December 31, 2022, represents into an increase of ThUSD$1,456,291 (11.0%). The Company's current assets increased by ThUSD$666,938 (18.9%) vs. yearend 2022. The main increases were seen in the following line following items: Cash and cash equivalents for ThUSD$498,086 (40.9%), this increase is explained by the net variation presented in the Company's consolidated cash flow statement; Trade and other receivables for ThUSD$377,801 (37.5%), mainly explained by the increase in sales in the markets of Brazil, Peru and Chile; Current inventories for ThUSD$115,091 (24.1%), related to an increase in purchases for ThUSD$206,285 and inventory in transit and others for ThUSD$22,867, offset by inventory adjustments, write-offs and others for ThUSD$101,398 and the translation adjustment of ThUSD$12,781; current taxes of ThUSD$13,997 (42.4%) and non-current assets or groups of assets classified as held for sale for ThUSD$16,254 (18.8%) (mainly due to sales of aircraft and engines). All of the above is offset by a decrease in: Other financial assets, current, of ThUSD$328,696 (65.3%) mainly explained by the compensation of a fund delivered to an agent as restricted advances, related to the derecognition of TAM Linhas Aéreas S.A.'s claim, which was pending resolu- tion at the exit of the Chapter 11 proceeding, and which was offset during 2023; Accounts receivable from related entities, current, of ThUSD$19,495 (99.9%); and Other non-financial assets, current, of ThUSD$6,100 (3.2%). The Company's liquidity index showed an increase from 0.69 times at yearend 2022 to 0.74 times at the end of December 2023. Moreover, we can see that the quick ratio increased from 0.24 times at yearend 2022 to 0.30 times at the end of December 2023. The Company's non-current assets increased by ThUSD$789,353 (8.2%) vs. yearend 2022. The main line items of Non-current assets with increases are: Property, plant and equipment for ThUSD$679,469 (8.1%), whose variation is mainly explained by ThUSD$1,954,683 in additions for the year (mainly additions related to aircraft maintenance for ThUSD$938,381 and new asset contracts for rights of use for ThUSD$1,016.302), and an increase in the translation difference of ThUSD$44,249, offset by the decrease resulting from the ThUSD$939,040 in depreciation for the year and other decreases worth ThUSD$380,423; Intangible assets other than goodwill of ThUSD$71,600 (6.6%), mainly originated by the translation adjustment of ThUSD$52,478, an increase due to additions for ThUSD$79,144 (associated to digital transformation projects for ThUSD$32,484) offset by a decrease of ThUSD$59,304 cor- responding to the amortization of the year; Other non-current financial assets for ThUSD$18,968 (122.2%); Other non-fi- nancial assets for ThUSD$20,243 (13.6%), mainly originated by increases in judicial deposits of ThUSD$30,425 and other prepayments of ThUSD$3,967, offset by the decrease in Sales tax of ThUSD$14,209 and Accounts receivable, non-current of ThUSD$206 (1.6%). All of the above is slightly offset by a decrease in deferred tax assets of ThUSD$(1,133) (19.2%). At December 31, 2023, the company's assets totaled ThUSD$14,229,040 which, compared to December 31, 2022, represents an increase of ThUSD$1,048,737 (equivalent to 8.0%). The Company's Current Liabilities increased by ThUSD$599,440 (11.8%) vs. yearend 2022. The main increases were seen in: Trade and other accounts payable, current, for ThUSD$137,287 (8.4%), Other non-financial liabilities, current, for ThUSD$659,655 (25.0%); Accounts payable to related entities, current, for ThUSD$7,432; Tax liabilities, current, for ThUSD$1,345 (131.1%); and Other provisions, current, for ThUSD$499 (3.4%). The above is offset by the ThUSD$206,778 (25.8%) decrease in Other current financial liabilities. The indebtedness indicator of the company's current Liabilities over Equity for the period stood at 12.63 (120.36 by Decem- ber 31, 2022). The impact of current Liabilities over Total debt increased by 1.37 percentage points, from 38.61% at yearend 2022 to 39.98% at the end of the current period. The company's non-current Liabilities increased by ThUSD$449,297 (5.6%), compared to the figure reported at December 31, 2022. The main increases are found in the lines of: Other financial liabilities, non-current, for ThUSD$362,630 (6.1%), Accounts payable, non-current, for ThUSD$92,303 (28.3%), mainly explained by the increase in aircraft and engine maintenance for ThUSD$98,868, offset by other net effects for ThUSD$6,565; Provisions for employee benefits, non-cur- rent, for ThUSD$29,130 (31.2%), explained by an increase of ThUSD$58,436 related to the provision of current services, offset by a ThUSD$6,701 decrease for benefits paid and con- version adjustment and actuarial loss for ThUSD$22,605; and 287 ANNUAL REPORT 202313 —Financial reports —Rationale 1 During financial year 2023, the Company did not obtain financing. During financial year 2022, the Company obtained ThUSD$2,361,875 in amounts from long-term loans and ThUSD$4,856,025 in amounts from short-term loans, totaling ThUSD$7,217,900. 2 Up to December 31, 2023, loan repayments of ThUSD$342,005 and lease liability payments of ThUSD$225,358, disclosed under cash flows from financing activities and up to December 31, 2022, loan repayments of ThUSD$8,759,413 and lease liability payments of ThUSD$131,917 disclosed in cash flows from financing activities. 3 As a result of the exit from Chapter 11, Bank loans decreased mainly by ThUSD$297,161, related to the derecognition of the TAM Linhas Aéreas S.A. claim, which was pending resolution at the exit of the Chapter 11 procee- ding, and offset during 2023 with a fund delivered to an agent as restricted advances made in November 2022. Flows Capital 2 ThUSD$ (81,952) (19,726) (56,519) - (183,374) (434) (225,358) Paid Interest ThUSD$ (153,791) (20,309) (42,283) (155,655) (48,272) - (173,924) Non-flow movements Accrued interest and others ThUSD$ 189,272 20,686 43,037 168,694 58,076 (70) 1,150,822 Reclassification 3 ThUSD$ (310,090) (1,790) 11,811 - (13,123) (1,420) - Balance up to December 31, 2023 ThUSD$ 1,029,434 303,922 430,350 1,302,838 901,546 104 2,967,994 (567,363) (594,234) 1,630,517 (314,612) 6,936,188 The indebtedness indicator of the company's Non-current liabilities over equity stood at 18.97. The impact of Non-cur- rent Liabilities over Total debt decreased by (1.37) percentage points, from 61.39% at yearend 2022 to 60.02% at the end of the December 2023. The indicator of total indebtedness over the Company's equity at the end of December 2023 is 31.60, 280.15 lower than at the end of December 2022. Up to December 31, 2023, roughly 49% of debt has a fixed rate; most of the variable debt is indexed at the benchmark rate based on SOFR. The Equity attributable to the owners of the parent company in- creased by ThUSD$408,024 (965.1%), going from ThUSD$42,278 at December 31, 2022 to an Equity of ThUSD$450,302 by December 31, 2023. The main effects correspond to: a) Decrease in share capital At the Company's Extraordinary Shareholders' Meeting held on April 20, 2023, the following was agreed, implying a net movement between equity items and has no effect on the total: i) A decrease in the Company's capital in the amount of ThUSD$7,501,896, without altering the number and char- acteristics of the shares into which it is divided, through the absorption of the Company's total accumulated losses up to December 31, 2022 for the same amount; ii) Another decrease in the Company's capital in the amount of ThUSD$178, without altering the number and characteristics of the shares into which it is divided, through the absorption of the "Treasury shares held" account up to December 31, 2022, for the same amount, produced as a result of the January 2012 decrease in share capital in accordance with the provisions of Article 27 of the Corporations Law; the increase ThUSD$37,734 (10.9%) in deferred tax liabilities. This is offset by the decrease in Other non-financial liabilities, non-current, of ThUSD$71,272 (17.0%) and Other provisions, non-current, of ThUSD$1,228 (-0.1%). For a better understanding of the total increase of ThUSD$155,852 in Other financial liabilities, considering a reduction of ThUSD$206,778 in current financial liabilities and an increase of ThUSD$362,630, the following table, excluding hedging and non-hedging increase derivatives for ThUSD$1,544, shows the movements corre- sponding to cash flows and non-cash flows: Obligations to financial institutions Bank loans Secured obligations Other secured obligations Obligations to the public Financial leases Other loans Lease liabilities Balance up to December 31, 2022 ThUSD$ Received Capital 1 ThUSD$ 1,385,995 325,061 474.304 1,289,799 1,088,239 2.028 2,216,454 - - - - - - - - Total Obligations to financial institutions 6,781,880 288 ANNUAL REPORT 2023 13 —Financial reports —Rationale iiI) ThUSD$810,279 deduction from the Company's paid-in capital of the "Costs of issuance and placement of shares and notes convertible into shares” account. b) Capital Increase and Convertible Notes During the first half of 2023, the increase in paid-in capital was recognized, originated by the conversion of class H bonds and the payment of claims through class G bonds, amounting to ThUSD$17,401. Considering a) and b) above, the balance of share capital at the end of December 2023 stands as follows: Beginning balance as at January 1, 2023 Convertible Bond G - placement during the period by conversion option Absorption of Accumulated Losses by December 31, 2022 Absorption of treasury stock Deduction of issuance and placement costs of shares and notes convertible into shares Subtotal Closing balance at December 31, 2023 Paid-in capital ThUSD$ 13,298,486 17,401 (7,501,896) (178) (810,279) (8,294,952) 5,003,534 c) Other miscellaneous reserves During financial year 2023, the Other miscellaneous reserves line increased by ThUSD$736,491 mainly related to the ThUSD$810,279 increase due to the capital- ization of issuance and placement costs of shares and notes convertible into shares, offset by a ThUSD$14,401 adjustment to the fair value of the converted notes, Ac- tuarial reserves for employee benefit plans for ThUSD$20,442, Conversion reserve for ThUSD$25,051 and Reserves related to hedging activities for ThUSD$(20,651). d) Accrued Earnings/Loss (Accrued Profit/Loss) Accrued earnings/loss include ThUSD$581,831 of earnings attributable to owners of the parent company for the financial year and the reversal of ThUSD$57,129 related to an unpaid dividend in 2020, ThUSD$174,549 corresponding to profit for financial year 2023, and the Absorption of accrued losses of ThUSD$7,501,896. Therefore, the accured result increased from a loss of ThUSD$7,501,896 at December 31, 2022 to a profit of ThUSD$464,411 at December 31, 2023. 289 ANNUAL REPORT 2023 13 —Financial reports —Rationale For the years ended on December 31 (ThUSD$) Operating income Passengers Cargo Others Operating Costs Compensation Fuel Fees Depreciation and Amortization Other Leasing and Landing Fees Passenger Services Aircraft Leasing Maintenance Other Operating Costs Operating Results Operating Margin Financial Revenues Financial costs Other Revenues / Expenses1 Income /(loss) before taxes and minority interest Taxes Income /(Loss) before minority interest attributable to Gain/(Loss) attributable to the parent company's owners Gain/(Loss) , attributable to non-controlling interests Net Margin Effective Tax Rate Total shares, basic Gain/(loss) per common share (USD$) Total shares, diluted Gain/(loss) per common share (USD$) R.A.I.I.D.A. 2023 ThUSD$ 11,789,182 10,215,148 1,425,393 148,641 (10,619,974) (1,583,337) (3,947,220) (244,160) (1,205,373) (1,322,795) (271,838) (91,876) (601,804) (1,351,571) 1,169,208 9.9% 125,356 (698,231) 159 596,492 (14,942) 581,550 581,831 (281) 4.9% -2.5% 2022 ThUSD$ 9,516,807 7,636,429 1,726,092 154.286 (9,638,086) (1,266,336) (3,882,505) (167,035) (1,179,512) (1,036,158) (184,357) (202,845) (582,848) (1,136,490) (121,279) -1.3% 1,052,295 (942,403) 1,357,438 1,346,051 (8,914) 1,337,137 1,339,210 (2,073) 14.1% 0.7% 604,437,869,545 0.000963 604,441,789,335 0.000963 96,614,464,231 0.013861 98,530,451,071 0.013592 2,375,021 2,417,744 1 Other Income/Expenses considers the line items Other gains (losses), Exchange differences, and Results from readjustment units presented in the Consolidated Financial Statement by function. 2. CONSOLIDATED INCOME STATEMENT Below, we present the main financial indicators in the Consol- idated Financial Statement. 290 ANNUAL REPORT 2023 13 —Financial reports —Rationale At December 31, 2023, the parent company reported a ThUSD$581,831 gain, translating into a negative vari- ation of ThUSD$757,379 vs. the previous year’s gain of ThUSD$1,339,210. Net margin for the financial year settled 4.9% in 2023 and 14.1% during 2022. The operating result for 2023 shows a gain of ThUSD$1,169,208 which, compared to the loss of ThUSD$121,279 up to December 31, 2022, represents a variation equivalent to 1,064.1%. Op- erating margin showed a positive variation of 11.2 percentage points compared to financial year 2022, reaching 9.9%, driven mainly by a good performance in the passenger business. Operating income up to December 31, 2023, increased 23.9% vs. the same period of 2022, totaling ThUSD$11,789,182. This increase is largely due to a 33.8% hike in Passenger revenues, offset by a 17.4% decrease in Cargo revenues and a 3.7% drop in Other revenues. The effect of the Brazilian Real’s appreciation translated into higher Ordinary revenues by around USD$106 million. PAX revenues totaled ThUSD$10,215,148 which, compared to the ThUSD$7,636,429 of December 31, 2022, translates into a 33.8% increase. This variation is due to a 23.1% increase in demand measured in RPK and an 8.6% increase in yields, compared to the same period of the previous year. On the other hand, the load factor also shows a positive variation of 1.7 percentage points, reaching 83.1% during 2023. In terms of capacity, passenger operations have registered a positive increase, with total ASK reaching 92% of 2019 levels by De- cember 31, 2023, representing the highest level of operations since the start of the pandemic. tion from Delta Air Lines, Inc., related to the implementation of the JBA signed in 2019 for ThUSD$30,408, partially offset by higher income from sales of spare engines and rotables of the Airbus A350 and Airbus A320 fleet during 2023. Up to December 31, 2023, Operating costs totaled ThUSD$10,619,974 which, compared to the same period of 2022, represents an increase of 10.2%, equivalent to ThUSD$981,888. On the other hand, the unit cost per ASK decreased by 8.6%. Furthermore, the effect of the Brazilian Real’s appreciation on this line item translates into higher costs by roughly ThUSD$66. Item variations are explained as follows: a) Remuneration and benefits increased ThUSD$317,001, mainly due to higher crew and airport personnel expenses, together with an 11% increase in the average headcount during 2023. b) Fuel increased 1.7%, equivalent to ThUSD$64,715. This in- crease corresponds mainly to 17.5% growth in consumption mea- sured in gallons, offset by 13.7% lower average unhedged prices. In 2023, the Company recognized a profit of ThUSD$15,688 due to fuel hedges, compared to a ThUSD$18,755 profit in 2022. c) Commissions to agents show an increase of ThUSD$77,125, mainly due to the hike in operations related to passenger rev- enues. d) Depreciation and amortization increased by ThUSD$25,861, equivalent to 2.2%, a variation that is mainly explained by the depreciation of the maintenance resulting from the addition of 19 aircraft at December 31, 2023 compared to 2022, offset by the renegotiation of the fleet’s operating leases after the exit of Chapter 11. By December 31, 2023, Cargo revenues totaled ThUSD$1,425,393, representing a 17.4% decrease vs. 2022. This fall is due to a 21.7% decline in yields, despite a 4.7% rise in traffic measured in RTK. e) Other Leases and Landing Fees increased ThUSD$286,637, mainly in the costs of airport taxes and handling services, impacted by a larger operation during 2023. The Other income line item presents a decrease of ThUSD$5,645, mainly due to the lower income recognized under indemnifica- f) Passenger Services show higher costs by ThUSD$87,481, which translates into a variation of 47.5%, mainly explained by an increase in catering and in-flight service costs, due to the lifting of restrictions on food delivery, in place until the first months of 2022 because of the COVID-19 pandemic, as well as a significant growth in demand, which translates into an increase of 18.3% in the number of passengers transported, mainly in the international segment. g) Aircraft Leasing shows lower costs by ThUSD$110,969, due to a decrease in the number of aircraft under the PBH modality. Aircraft Leasing includes the costs associated with leasing pay- ments by the hour (PBH) for contracts that have been modified by incorporating that structure. For these contracts that include variable payments by the hour (PBH) at the beginning of the period and after that, have fixed fees, an asset from right of use and lease liability were recognized for these amounts at the date of contract modification. These sums continue to be amortized on a linear basis during the term of the lease from the date of contract modification, even if at the beginning they have a variable payment period. Therefore, and as a result of the application of the lease accounting policy, the result of the period includes both the leasing expense for variable payments (Aircraft leasing) as well as the expense resulting from the amortization of the asset by right of use included in the depreciation line and the interest on the lease liability. h) Maintenance presents higher costs of ThUSD$18,956, as a result of a larger average fleet and the increase in operations during 2023. i) Other Operating Costs increased ThUSD$215,081, mainly due to the effect of higher variable costs of crew, booking systems, sales and advertising, which are the result of the growth of the operation during 2023. Financial income totaled ThUSD$125,356 which, compared to the ThUSD$1,052,295 from the previous financial year, trans- lates into lower income by ThUSD$926,939, mainly due to the recognition of fair value adjustments on the converted bonds whose origin was financial debt totaling ThUSD$420,436 and 291 write-offs of financial debt worth ThUSD$491,326. Financial costs decreased 25.9%, totaling ThUSD$698,231 up to December 31, 2023, the variation being the effect of interest recognized during 2022 related to DIP financing. Other income/expenses totaled a gain of ThUSD$159 up to December 31, 2023 which, compared to the same period of 2022, shows an increase of ThUSD$1,357,279. This impact is mainly explained by the recognition during 2022 of a profit of ThUSD$2,550,306 corresponding to the fair value adjustment of the converted bonds whose origin was Trade accounts payable and Other accounts payable, offset by restructuring activities expenses recorded during financial year 2022. The main line items in the Consolidated Financial Statement of TAM S.A. and its Subsidiaries, which caused a currency ex- change gain of ThUSD$50,701 at December 31, 2023, were: Other financial liabilities; gain of ThUSD$26,871 from USD-de- nominated loans and financial leasing for fleet acquisitions; net accounts receivable and payable to related companies, totaling a gain of ThUSD$46,531, and net accounts receivable and payable to third parties, totaling a loss of ThUSD$17,532. The other net assets and liabilities line items generated a ThUSD$5,168 loss. ANNUAL REPORT 202313 —Financial reports —Rationale 3. ANALYSIS AND EXPLANATION OF CONSOLIDATED NET CASH FLOW GENERATED BY OPERATION, INVESTMENT, AND FINANCING ACTIVITIES The Operating Cash Flow up to December 31, 2023 shows a positive change of ThUSD$2,166,771 vs. the same period of the previous year, due to the positive change in Receipts from sales of goods and service rendering for ThUSD$2,847,843, Other receipts from operational activities for ThUSD$52,574, Other payment for operating activities for ThUSD$2,243, and Other cash inflows and outflows for ThUSD$109,914. The above is offset by negative variations in Payments to suppliers for the supply of goods and services, whose changes are originated by higher payments made totaling ThUSD$576,378; Payments to and on behalf of employees, worth ThUSD$265,360; Income taxes paid for ThUSD$4,065. The positive variation of ThUSD$109,914 in the Other cash inflows and outflows of the Cash Flow from Operating Ac- tivities is mainly due to the change in Funds received as- sociated to restricted advances for ThUSD$47,490, a lower flow related to Guarantees for ThUSD$51,790, judicial de- posits for ThUSD$4,312, Bank commissions and taxes for ThUSD$3,268 and Margin guarantees for hedging derivatives for ThUSD$37,648; offset by the negative change in Taxes on financial transactions totaling ThUSD$(4,669), Payment of premiums for derivatives worth ThUSD$24,481 and Hedging derivatives for ThUSD$5,444. The Cash Flow from Investment Activities shows a positive change of ThUSD$89,452 compared to the same period of the previous year, mainly due to the positive variation of Interest received worth ThUSD$79,618, Other payments to acquire equity or debt instruments of other entities for ThUSD$331 and Other cash inflows (outflows) of ThUSD$52,958. The above is offset by negative variations in Income from the sale of property, plant and equipment of ThUSD$9,853, Purchases of intangible assets for ThUSD$17,936, Purchases of property, plant and equipment for ThUSD$15,249 and Other receipts from the sale of equity or debt instruments of other entities for ThUSD$417. ing, but not limited to, shares, certain engines, and spare parts. The Cash Flow from Financing Activities shows a negative vari- ation of ThUSD$2,005,170, compared to the same period of the previous year, which is mainly explained by the negative changes in Payments for changes in ownership stakes in subsidiaries that do not result in loss of control, worth ThUSD$23, Sums from the issuance of shares for ThUSD$549,038, Sums from issuance of other equity instruments for ThUSD$3,202,790, Sums from short-term loans for ThUSD$4,856,025, Sums from long-term loans for ThUSD$2,361,875, Loans from related companies for ThUSD$770,522, Interest paid for ThUSD$72,518 and Payments of lease liabilities for ThUSD$93,441. These vari- ations are offset by the positive variation of ThUSD$8,417,408 in Loan payments; ThUSD$1,008,483 in Loan payments to related companies; and ThUSD$475,171 in Other cash inflows (outflows). On April 8, 2022, a restated and amended text (the "Amended and Restated DIP Credit Agreement") of the Original DIP Credit Agreement was executed, which modified and restated said agreement and paid back the outstanding obligations thereun- der (i.e., under its Tranches A, B and C). The total amount of the Amended and Restated DIP Credit Agreement was ThUSD$3.70 billion. The Amended and Restated DIP Credit Agreement (i) included certain reductions in fees and interest compared to the existing DIP Credit Agreement; and (ii) considered a ma- turity date consistent with LATAM's anticipated schedule for emergence from the Chapter 11 Proceeding. With regard to the latter, the scheduled maturity date of the Amended and Restated DIP Credit Agreement was August 8, 2022, subject to possible extensions which, in certain cases, had a deadline of November 30, 2022. The flows from loans described above include the following events: 1. The committed Revolving Credit Facility (RCF) is secured by collateral comprised of aircraft, engines and spare parts, which was fully drawn until November 3, 2022. Upon the emergence from Chapter 11, this facility was fully repaid and is available for use at December 31, 2023. 2. On March 14, 2022, a new amended and restated text of the existing DIP Credit Agreement (the "New Amended and Restated DIP Credit Agreement") was submitted to the Court for approval. The New Amended and Restated DIP Credit Agreement (i) refinanced and replaced in its entirety the existing Tranches A, B and C of the Existing DIP Credit Agreement; (ii) considered a maturity date consistent with the schedule the Debtors established to emerge from the Chapter 11 Proceed- ing; and (iii) included certain reductions in fees and interest as compared to the existing DIP Credit Agreement and the Initial Amended and Restated DIP Financing Proposal. Obligations under DIP were guaranteed by collateral consisting of certain assets owned by LATAM and certain of its subsidiaries, includ- In addition, on April 8, 2022, the initial disbursement under the Amended and Restated DIP Credit Agreement in the amount of USD$2.75 million was made. On April 28, 2022, an amend- ment to this agreement was signed, extending the maturity date from August 8, 2022 to October 14, 2022. On October 12, 2022, the Amended and Restated DIP Credit Agreement was repaid in full with the DIP-to-Exit financing, which included a bridge financing for senior secured notes due 2027 for USD$750 million, USD$750 million in another bridge financing for senior secured notes due 2029, a Term Financing of USD$750 million, a so-called Junior DIP financing, for a total of USD$1.14 billion, and, finally, a Revolving Credit Facility of USD$500 million, which is undrawn. The DIP-to-Exit financing was guaranteed by assets owned by LATAM and certain of its subsidiaries. Of these, the Junior DIP contemplated a subor- dinate priority to the rest of the credits. On October 18, 2023, the Bridge Loans were partially settled through: i) an issuance of notes exempt from registration under the U.S. Securities Act of 1933, as amended (the "Securities Act"), pursuant to Rule 144A and Regulation S, both under the Securities Act, maturing in 2027 (the "5-Year Notes"), in the aggregate principal amount of USD$450 million; and ii) a note issuance exempt from registration under the Securities Act pursuant to Rule 144A and Regulation S, both under the Securities Act, maturing in 2029 (the "7-Year Notes"), in the aggregate principal amount of USD$700 million. In the context of the Company's exit from the Chapter 11 Proceeding on November 3, 2022, the Bridge Loans were set- tled with the proceeds of US$350 million corresponding to an incremental loan on Term Loan B. on November 3, 2022, the Company and all its subsidiaries successfully emerged from Chapter 11. Last, the Company’s net cash flow up to December 31, 2023, prior to the effects of exchange rate differences, shows a positive variation of ThUSD$251,053, compared to the same period of a year earlier. 4. FINANCIAL RISK ANALYSIS The goal of the Company’s global risk management program is to minimize the adverse effects of the financial risks that affect the company. a) Market risk Given the nature of its business, the Company is exposed to market factors, such as: (i) fuel price risk, (ii) exchange rate risk, and (iii) Interest rate risk. (i) Fuel price risk To carry out its operations, the Company purchases fuel known as USGC 54 grade Jet Fuel, which is subject to variations in international fuel prices. To hedge against fuel risk exposure, the Company trades in derivatives instruments (Swaps and Options) whose underlying 292 ANNUAL REPORT 2023age points for 2024, mainly due to the negative effects of a significant adjustment of the Argentinean economy. Brazil's economy is expected to grow by 1.7% in 2024. According to the IMF's October projections, Chile is expected to grow by 1.6% in 2024. Peru is expected to grow 2.7% in 2024, Colombia is expected to grow 2.0% in 2024 and Ecuador is expected to grow 1.8% in 2023. 13 —Financial reports —Rationale assets may be different from Jet Fuel, whereby it is possible to hedge in West Texas Intermediate crude oil (“WTI”), Brent crude oil (“BRENT”), and distilled Heating Oil (”HO”), which can be closely related to Jet Fuel and can have greater liquidity. positions totaled ThUSD$1,543 (negative). (iii) Interest rate risk At December 31, 2023, the Company recognized a ThUSD$15.7 gain from fuel hedges net of premiums on the cost of sales of the period. Part of the spreads resulting between the lower and higher market value of these contracts is recognized as a hedge reserves component in the company's net equity. At December 31, 2023, the market value of existing contracts stood at THUSD$22.1 (positive). (ii) Exchange rate risk The functional currency, also used in presenting the Parent company's Financial Statements, is the US dollar; therefore, Transactional and Conversion exchange rate risks are mainly a result of the operating activities of the business, as well as the company's strategic and accounting activities, which are presented in monetary units other than the functional currency. LATAM’s Subsidiaries are also exposed to exchange rate risk, whose impact affects the Company's Consolidated Result. The greatest exposure to exchange rate risk for LATAM comes from the concentration of businesses in Brazil, as they are mainly denominated in Brazilian Reals (BRL), and it is managed actively by the Company. The Company minimizes exchange risk exposure by contract- ing derivative instruments or through natural hedges or the execution of internal transactions. The Company is exposed to variations in interest rates on the markets, affecting the future cash flows of its current and future financial assets and liabilities. The Company is mainly exposed to the Secured Overnight Fi- nancing Rate (“SOFR”) and other less relevant interest rates, such as Brazilian Interbank Deposit Certificates (“CDI”, for its Portuguese acronym). As LIBOR ceased to be published on June 30, 2023, the Company migrated to the adoption of SOFR as an alternative rate, which fully materialized on September 30, 2023, with all contracts migrating definitively to SOFR. At December 31, 2023, 50% (52% by December 31, 2022) of the debt is fixed against interest rate fluctuations. During the financial year ended December 31, 2023, the Com- pany recognized losses of ThUSD$1,810 corresponding to the recognition in income of premiums paid and other concepts. At December 31, 2023, the Company had no active Interest rate derivatives contracts. At the end of December 2022, the Company held current interest rate derivatives positions with a value of ThUSD$8,819 (positive). By December 31, 2023, the Company recognized a decrease in the right-of-use asset from the maturity of derivatives for ThUSD$14,904 related to aircraft leases. A lower expense from depreciation of the right-of-use asset of ThUSD$(1,137) is recognized at the same date. A lower expense from depre- ciation of the right-of-use asset of ThUSD$133 (positive) was recognized at December 31, 2022. At December 31, 2023, the Company holds ThUSD$414,000 in outstanding FX derivatives recorded as hedges. 5. ECONOMIC ENVIRONMENT emerging markets. This has also been driven by the fiscal support provided in China. Nonetheless, forecasts for 2024 and 2025 are lower than the historical average, due in part to high monetary policy interest rates to combat inflation, the withdrawal of fiscal support in an environment of heavy borrowing holding back economic activity, and low underlying productivity growth. On the inflation side, it is decreasing at a faster than expected pace in most regions. Thus, risks to global growth are expected to be broadly balanced. Thus, if inflation declines more rapidly, there could be an easing of financial conditions. Conversely, geopolitical shocks could lead to higher commodity prices and supply shocks, coupled with persistent core inflation, leading to an extension of tight monetary conditions. In its latest January projection, the International Monetary Fund (IMF) estimates that world growth will be 3.1% in 2023, remaining steady in 2024 and rising to 3.2% in 2025—data that is still below the historical average of 3.8% (2000-2019). Headline inflation is expected to move from 6.8% in 2023 on a year-on-year basis to 5.8% during 2024, and to 4.4% in 2025, the latter with a downward revision of 0.2 percentage points. The IMF estimates that developed economies will face a drop in projected growth from 1.6% in 2023 to 1.5% in 2024 before rising to 1.8% in 2025. Growth for emerging economies is ex- pected to be moderate, standing at 4.1% in both 2023 and 2024 and rising to 4.2% in 2025. According to the IMF, U.S. growth is expected to decline from 2.5% in 2023 to 2.1% in 2024 and 1.7% in 2025, impacted mainly by the lagged effects of monetary policy tightening, gradual budget tightening, and moderation in labor markets. As for the euro zone, its growth is expected to increase this year, rising from 0.5% in 2023, and with exposure to the war in Ukraine, to 0.9% in 2024. It is ex- pected that, as energy prices stabilize and inflation declines, household consumption will strengthen and contribute to the economic recovery. At December 31, 2023, the market value of FX derivative hedge The resilience of the global recovery following the COVID-19 pandemic and the Russian invasion of Ukraine has been greater than expected, especially in the United States and other large For Latin America and the Caribbean, the IMF projects growth to decline from 2.5% in 2023 to 1.9% in 2024, rising to 2.5% in 2025. This translates into a downward revision of 0.4 percent- 293 ANNUAL REPORT 2023DocuSign Envelope ID: 978CD6A8-862F-417C-A7A2-7C7F09EDD94E 13 —Financial reports —Sworn statement 13 —Informes financieros —Declaración jurada Sworn Declaración statement jurada En nuestra calidad de directores, gerente general y vicepresi- En nuestra calidad de directores, gerente general y vicepresi- dente de finanzas de LATAM Airlines Group S.A., declaramos dente de finanzas de LATAM Airlines Group S.A., declaramos bajo juramento nuestra responsabilidad respecto de la veraci- bajo juramento nuestra responsabilidad respecto de la veraci- dad de toda la información contenida en la Memoria Integrada dad de toda la información contenida en la Memoria Integrada LATAM 2023. LATAM 2023. 3 2 0 2 M A T A L A R O M E M I IGNACIO CUETO PLAZA IGNACIO CUETO PLAZA Chairman Presidente del Directorio FREDERICO CURADO FREDERICO CURADO Board member Director MICHAEL NERUDA MICHAEL NERUDA Board member Director ROBERTO ALVO MILOSAWLEWITSCH ROBERTO ALVO MILOSAWLEWITSCH CEO LATAM Airlines Group Gerente General BORNAH MOGHBEL BORNAH MOGHBEL Vice-chairman Vicepresidente del Directorio ANTONIO GIL NIEVAS ANTONIO GIL NIEVAS Board member Director SONIA J. S. VILLALOBOS SONIA J. S. VILLALOBOS Board member Directora RAMIRO ALFONSÍN BALZA RAMIRO ALFONSÍN BALZA Chief financial officer Vicepresidente de Finanzas ENRIQUE CUETO PLAZA ENRIQUE CUETO PLAZA Board member Director BOUK VAN GELOVEN BOUK VAN GELOVEN Board member Director ALEXANDER D. WILCOX ALEXANDER D. WILCOX Board member Director 294296 ANNUAL REPORT 2023 13 —Financial reports —Company structure Company structure NCG 461: 6.5.1 AFFILIATES AND SUBSIDIARIES 99,00% Latam Travel S.R.L. [Bolivia]-[LTBO] 1,00% 23,62% Latam Airlines Perú S.A. [Perú]-[LPPE] 0,19% M 76,19% 33,41% Inversiones Aéreas S.A. [Perú]-[W6PE] 0,16% 66,43% LATAM Airlines Group S.A. [Chile]-[LACL] 99,89395% 99,90% 99,99% 99,83% 99,9959% 100% 100% 100% Lan Cargo S.A. [Chile]-[UCCL] 0,10196% M Inversiones Lan S.A. [Chile]-[W0CL] [Chile]-[B2CL] Technical Training [Chile]-[A3CL] Lan Pax Group S.A. [Chile]-[W1CL] Peuco Finance Ltd. Professional Airline Services Inc. [Florida-USA]-[PAUS] [Cayman]-[TFKY] 0,00409% 0,01% 0,17% 0,00412% 100% Prime Cargo SpA [Chile] 99,99988% Transporte Aéreo S.A. [Chile]-[LUCL] 0,10% 0,00012% 99% 100% 100% 1% Atlantic Aviation Investments Limited LLC[Delaware]-[XSUS] Cargo Handling Airport Services, LLC [USA]-[F6US] Professional Airport Cargo Services, LLC [USA]-[F7US] Prime Airport Services Inc. [Florida-USA]-[D5US] 100% 99% Lan Cargo Inversiones S.A. 1% 1% Lan Tours de México S.A. de C.V. [México]-[LTMX] 99% 54,79076% Holdco Ecuador S.A. [CHILE]-[E2CL] 45,20924% M 99,99831% Holdco S.A. [Chile]-[E3CL] 0,00169% M 99% 99,8% 0,2% 100% Consultoría Administrativa Profesional S.A. de C.V. [México]-[CAMX] 1% Americonsult S.A. de C.V. [México]-[R3MX] Lan Cargo Repair Station [Florida-USA]-[D9US] M 9,54% 1,53% 81,3% Línea Aérea Carguera de Colombia [C1CO] Americonsult de Guatemala S.A. [Guatemala]-[Q3GT] 99,13% 0,87% Maintenance Service Experts, LLC [USA]-[F1US] Professional Airline Maintenance Services, LLC [USA]-[F2US] 100% 100% 99,89% Fast Air Almacenes de Carga S.A. [Chile]-[D2CL] 1,53% 4,57% 1,53 0,11% Americonsult de Costa Rica S.A. [Costa Rica]-[P3CR] 99,8% 0,2 % 100% Connecta Corporation [USA]-[CCUS] Holdco Colombia I SpA [CHILE]-[E4CL] 100% 50% 0,76832% M 0,12585% Aerovias de Integración Regional S.A. (Aires S.A.) [Colombia]-[4CCO] 48,367% 50% 50% Ecuador S.A. [Ecuador]-[XLEC] 4,9943% 0,048 % Lan Argentina S.A. [Argentina]-[4MAR] 36,9012% 63,0987% TAM S.A. [Brasil]-[N2BR] 99,95% 0,05% Inversora Cordillera S.A. [Argentina]-[W7AR] 100% TAM Linhas Aereas S.A. [Brasil]-[JJBR] 94,96% 0,3% 100% Corsair Participacoes S.A. [Brasil]-[N6BR] 5,69% [Argentina]-[Z6AR] 94,01% 94,01% 100% Fidelidade Viagens e Turismo S.A. [Brasil]-[N1BR] 100% ABSA - Aerolinhas Brasileiras S.A. [Brasil]-[M3BR] 0,1% Minority 295 1% Gitary Trade S.A. [Uruguay] 99% Piquero Leasing Limited Platero Leasing LLC Zorzal Limited 100% 100% 99% 100% Jarletul S.A. [Uruguay]-[W9UY] Chincol Leasing LLC Sumauma Leasing Limited 100% 100% 0,01% 99,99% 0,01% 99,99% 0,01% 99,99% Multiplus Corredora de Seguros Ltda. [Brasil]-[N7BR] 94,98% Transportes Aéreos del Mercosur S.A. [Paraguay]-[PZPY] 5,02% M Prismah Fidelidade Ltda. [Brasil]-[N8BR] TP Franchising Ltda. [Brasil]-[N3BR] ANNUAL REPORT 2023CREDITS AND CORPORATE INFORMATION 296 CREDITS CORPORATE INFORMATION Coordination Headquarters ADR Depository Bank LATAM- Investor Relations LATAM- Sustainability LATAM- External Communication 5711 Presidente Riesco Ave., 19th floor, Las Condes Región Metropolitana – Chile Phone: (56) (2) 2565 3844 Text and Design Stock Market Tickers SustainaLab Text: Isidora Barberis Ayala Editorial supervision and GRI indicators: SustainaLab Graphic project: Panal Diseño- Panal.cl Layout: Panal Diseño- Panal.cl Translation into English: Nuriyah Costa-Laurent Photography LATAM files LTM CI – Santiago Stock Exchange LTM AY – New York Stock Exchange Investor Relations Investor Relations | LATAM Airlines Group S.A. 5711 Presidente Riesco Ave., 19th floor, Las Condes Región Metropolitana – Chile Phone: (56) (2) 2565 3844 E-mail: InvestorRelations@latam.com Shareholder Service Depósito Central de Valores Avenida Los Conquistadores 1730, piso 24, Providencia Región Metropolitana – Chile Tel: (56) (2) 2393 9003 E-mail: atencionaccionistas@dcv.cl JPMorgan Chase Bank, N.A. P.O. Box 64504, St. Paul, MN, 55164-0504 Main phone: +1 (800) 990-1135 Phone: Outside the US (651) 453-2128 Phone: Global Invest Direct (800) 428-4237 ADR Custodian Bank Banco Santander Chile 140 Bandera, Santiago Región Metropolitana – Chile Custody Department Phone: (56) (2) 2320 3320 Independent Auditors PricewaterhouseCoopers Consultores Auditores y Compañía Limitada 2711 Andrés Bello Ave., 5th floor, Providencia Región Metropolitana – Chile Phone: (56) (2) 2940 0000 ANNUAL REPORT 2023www.latamairlinesgroup.net www.latam.com 297 ANNUAL REPORT 2023

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