Exhibit 99.1
MATERIAL FACT
LATAM AIRLINES GROUP S.A.
Registration in the Securities Registry No. 306
Santiago, August 29, 2022
Ms.
Solange Berstein Jáuregui
Chairman
Comisión para el Mercado Financiero
Av. Libertador Bernardo O´Higgins 1449
Santiago
Ref.: Reports MATERIAL FACT
Dear Sir:
In accordance with the provisions set forth in Article 9 and the second paragraph of Article 10 of the Securities Market Law, and in General Rule No. 30, duly authorized, I hereby report the following MATERIAL FACT of LATAM Airlines Group S.A. (“LATAM” or the “Company”), registration in the Securities Registry No. 306:
| 1. | As previously reported, by order entered on June 18, 2022, the Bankruptcy Court for the Southern District of New York (the “Bankruptcy Court”) hearing the reorganization proceeding (the “Chapter 11 Proceeding”) of LATAM and certain of its direct and indirect subsidiaries (collectively with LATAM, the “Debtors”) under Chapter 11 of Title 11 of the United States Code, confirmed the plan of reorganization and financing (the “Plan of Reorganization” or the “Plan”) proposed by the Debtors to successfully emerge from the Chapter 11 Proceeding. |
| 2. | As part of the Chapter 11 Proceeding, and in connection with the obligations of the Debtors under (i) the Restructuring Support Agreement executed in furtherance of the Plan (the “RSA”), and (ii) those certain non-disclosure agreements (the “NDAs”) entered into with certain counterparties to the RSA, the Debtors have provided to such counterparties certain financial reports and updates that constitute material non-public information (such material non-public information, the “Cleansing Materials”). |
| 3. | In accordance with the NDAs and upon the occurrence of certain events set forth therein, the Company agreed to publicly disclose the Cleansing Materials. In satisfaction of its obligations under the NDAs, the Company is furnishing the Cleansing Materials as Exhibit 99.1 hereto. |
| 4. | The Cleansing Materials include projected financial information. Such projected financial information constitutes forward-looking information and is provided for illustrative purposes only and should not be relied upon as necessarily being indicative of future results. The use of specific projections and estimates in the Cleansing Materials is not intended to indicate management’s belief that a particular projection or estimate will be achieved, but rather that the projection or estimate is within the scope of potential outcomes assuming other factors inherent in the updated business plan. The outcomes presented may be at the midpoint, bottom or top of the scope. |
| 5. | Certain information included in the Cleansing Materials describes or assumes the expected terms of transactions the Company expects to execute in connection with its restructuring as contemplated under the Plan of Reorganization. The consummation of such transactions is subject to other various risks and contingencies, including closing conditions. There can be no assurance that such transactions will be consummated with the terms assumed therein or otherwise. As such, the subject matter of the Cleansing Materials is evolving and is subject to further change by LATAM in its absolute discretion. Furthermore, no responsibility is taken for changes in market conditions and no obligation is assumed by LATAM to revise the Cleansing Materials to reflect the events or conditions that occur subsequent to the date hereof. Furthermore, the assumptions and estimates underlying the projected financial information contained in the Cleansing Materials are inherently uncertain and are subject to a wide variety of significant business, economic, competitive, and other risks and uncertainties. Actual results may differ materially from the results contemplated by the financial forecast information contained in the Cleansing Materials, and the inclusion of such information in the Cleansing Materials should not be regarded as a representation by any person that the results reflected in such forecasts will be achieved. |
| Sincerely yours, | |
| Roberto Alvo M. | |
| CEO | |
| LATAM Airlines Group S.A. |
Updated Business Plan LATAM AIRLINES GROUP 5 Years Business Plan Projection Subject to Applicable Confidentiality Agreements and Requirements August 2022 HIGHLY CONFIDENTIAL
HIGHLY CONFIDENTIAL Privileged Draft - Interim Work Product prepared at the direction of Counsel 2 Updated Business Plan Disclaimers Disclaimer This presentation (“Presentation”) is for informational purposes only. The purpose of this Presentation is to disclose the updated consolidated business plan projections of LATAM Airlines Group S.A. and its affiliated entities (“LATAM” or the “Company”) to parties interested in the Company’s ongoing chapter 11 proceeding and for no other purpose. This Presentation shall not constitute an offer to sell, or the solicitation of an offer to buy, any securities. Management does not endorse the use of any information in this Presentation for use in making an investment decision. Investors should consider only historical information on deciding whether to buy or sell securities. This information was prepared in connection with the Company’s ongoing dialogue with its creditors. Certain information included herein describes or assumes the expected terms of transactions the Company expects to execute in connection with its restructuring as contemplated under the Company’s Plan of Reorganization. The consummation of such transactions is subject to other various risks and contingencies, including closing conditions. There can be no assurance that such transactions will be consummated with the terms assumed herein or otherwise. As such, the subject matter of these materials is evolving and is subject to further change by LATAM in its absolute discretion. No responsibility is taken for changes in market conditions and no obligation is assumed by LATAM to revise this Presentation to reflect the events or conditions that occur subsequent to the date hereof. Neither the United States Securities and Exchange Commission (“SEC”) nor the Chilean Comisión para el Mercado Financiero (the “CMF”) nor any securities commission of any other U.S. or non - U.S. jurisdiction has reviewed, approved or disapproved of this Presentation, or determined that this Presentation is truthful or complete. No representations or warranties, express or implied, are given in, or in respect of, this Presentation. To the fullest extent permitted by law in no circumstances will LATAM or any of its respective subsidiaries, shareholders, affiliates, representatives, directors, officers, employees, advisers or agents be responsible or liable for a direct, indirect or consequential loss or loss of profit arising from the use of this Presentation, its contents, its omissions, reliance on the information contained within it, or on opinions communicated in relation thereto or otherwise arising in connection therewith. Industry and market data used in this Presentation have been obtained from third - party industry publications and sources as well as from research reports prepared for other purposes. LATAM has not independently verified the data obtained from these sources and cannot assure you of the data’s accuracy or completeness. This data is subject to change. In addition, this Presentation does not purport to be all - inclusive or to contain all of the information that may be required to make a full analysis of LATAM or LATAM’s business plan. Viewers of this Presentation should read the same in full together with the Company’s SEC filings indicated herein and each make their own evaluation of LATAM and of the relevance and adequacy of the information taken as a whole and should make such other investigations as they deem necessary.
HIGHLY CONFIDENTIAL Privileged Draft - Interim Work Product prepared at the direction of Counsel 3 Updated Business Plan Disclaimers Forward Looking Statements Certain statements included in this Presentation that are not historical facts are forward - looking statements for purposes of the safe harbor provisions under the United States Private Securities Litigation Reform Act of 1995. Forward - looking statements generally are accompanied by words such as “believe”, “may”, “will”, “estimate”, “continue”, “anticipate”, “intend”, “expect”, “should”, “would”, “plan”, “predict”, “potential”, “seem”, “seek”, “future”, “outlook”, and similar expressions that predict or indicate future events or trends or that are not statements of historical matters. These forward - looking statements include, but are not limited to, statements regarding estimates and forecasts of other financial and performance metrics and projections of market opportunity. These statements are based on various assumptions, whether or not identified in this Presentation, and on the current expectations of the respective management of LATAM and are not predictions of actual performance. These forward - looking statements are provided for illustrative purposes only and are not intended to serve as, and must not be relied on by an investor as, a guarantee, an assurance, a prediction or a definitive statement of fact or probability. Actual events and circumstances are difficult or impossible to predict and will differ from assumptions. Many actual events and circumstances are beyond the control of LATAM. These forward - looking statements are subject to a number of risks and uncertainties, including changes in domestic and foreign business, market, financial, political, and legal conditions; the inability of LATAM to emerge from the chapter 11 proceeding, including the risk that any regulatory approvals are not obtained, are delayed or are subject to unanticipated conditions that could adversely affect the Company; risks relating to the uncertainty of the projected financial information with respect to LATAM, risks related to the performance of LATAM’s business and the timing of expected business or revenue milestones; the effects of competition on LATAM’s business; and those factors discussed in LATAM’s annual report on Form 20 - F for the year ended December 31, 2021 filed with the SEC on March 30, 2022 (the “Annual Report”) under the heading “Risk Factors,” and other documents LATAM has filed, or will file, with the SEC. If any of these risks materialize or our assumptions prove incorrect, actual results could differ materially from the results implied by these forward - looking statements. There may be additional risks that LATAM does not presently know, or that LATAM currently believes are immaterial, that could also cause actual results to differ from those contained in the forward - looking statements. In addition, forward - looking statements reflect LATAM’s expectations, plans, or forecasts of future events and views as of the date of this Presentation. LATAM anticipates that subsequent events and developments will cause LATAM’s assessments to change. However, while LATAM may elect to update these forward - looking statements at some point in the future, LATAM specifically disclaims any obligation to do so. These forward - looking statements at some point should not be relied upon as representing LATAM’s assessments of any date subsequent to the date of this Presentation. Accordingly, undue reliance should not be placed upon the forward - looking statements contained in this Presentation.
HIGHLY CONFIDENTIAL Privileged Draft - Interim Work Product prepared at the direction of Counsel 4 Updated Business Plan Disclaimers Use of Projections and Use of Data Use of Projections This Presentation contains projected financial information. Such projected financial information constitutes forward - looking information, and is for illustrative purposes only and should not be relied upon as necessarily being indicative of future results. The use of specific projections and estimates, valuation, appraisal in this Presentation is not intended to indicate management’s belief that a particular projection, valuation, appraisal or estimate will be achieved, but rather that the projection, valuation, appraisal or estimate is within the scope of potential outcomes assuming other factors inherent in the business plan. The outcomes presented maybe at the midpoint, bottom or top of the scope. Pro forma estimates and assumptions, including estimates and assumptions related to the Company's financial position at emergence, remain subject to ongoing revision and change due to, among other things, the impact of the ongoing claims reconciliation process on cash at hand and the outcome of the Company's emergence financing transactions, and may vary upon emergence. The assumptions and estimates underlying such financial forecast information are inherently uncertain and are subject to a wide variety of significant business, economic, competitive, and other risks and uncertainties. See “Forward Looking Statements” above. Actual results may differ materially from the results contemplated by the financial forecast information contained in this Presentation, and the inclusion of such information in this Presentation should not be regarded as a representation by any person that the results reflected in such forecasts will be achieved. Use of Data The information contained in this Presentation, including, but not limited to, projections, analyses, third - party reports, appraisals, valuations and other information, is believed to be reliable, however, it has not been verified except as set forth in this Presentation. No warranty is given to the accuracy of such information. The data contained herein is derived from various internal and external sources. Valuation information is provided on a group basis unless otherwise indicated. No representation is made as to the reasonableness of the assumptions made within or the accuracy or completeness of any projections or modeling or any other information contained herein. Any data on past performance or modeling contained herein is not an indication as to future performance. LATAM assumes no obligation to update the information in this Presentation.
HIGHLY CONFIDENTIAL Privileged Draft - Interim Work Product prepared at the direction of Counsel 5 Updated Business Plan Disclaimers Use of Non - GAAP Financial Metrics and Other Key Financial Metrics Use of Non - GAAP Financial Metrics and Other Key Financial Metrics This Presentation includes certain non - IFRS financial measures (including on a forward - looking basis) such as EBIT (which consists of earnings for the period before income taxes and financial costs and financial income), EBITDA (which consists of earnings for the period before income taxes and financial costs and financial income, plus depreciation and amortization expense) and EBITDAR (which consists of earnings for the period before income taxes and financial costs and financial income, plus depreciation and amortization expenses and rentals expenses). In addition EBIT margin which is calculated by dividing EBIT by total operating revenue) These non - IFRS measures are an addition to, and not substitute for or superior to, measures of financial performance prepared in accordance with an IFRS alternative to net income or any other measures derived in accordance with IFRS. LATAM believes that these non - IFRS measures of financial results (including on a forward - looking basis) provide useful supplemental information to investors about LATAM. LATAM’s non - IFRS measures may not be directly comparable to similarly titled measures of other companies.
6 HIGHLY CONFIDENTIAL Privileged Draft - Interim Work Product prepared at the direction of Counsel Updated Business Plan Disclaimers ▪ the effects of competition in the airline industry; Certain Risks Related to LATAM Certain Risks Related to LATAM The risks presented below are examples, among others, of certain of the general risks related to the LATAM’s business, industry and operations and are not exhaustive. The list below is not exhaustive and you should review the risk factors and other disclosures contained in the Company’s Annual Report and the Company’s other filings with the SEC, including any future filings. These risks speak only as of the date of this Presentation and we make no commitment to update such disclosure. The risks highlighted in future filings with the SEC may differ significantly from and will be more extensive than the risks set forth in existing filings, which include but are not limited to: ▪ developments relating to our chapter 11 proceeding and our ability to effectively implement our plan of reorganization; ▪ uncertainty regarding the terms of our plan of reorganization; ▪ conflicting interests among the multiple parties on which our restructuring efforts depend; ▪ the sufficiency of our exit financing to allow us to continue our operations; ▪ our ability to obtain new financing upon our emergence from Chapter 11; ▪ unpredictability of the general economic, political and business conditions in our core markets of Chile, Brazil, other Latin American countries and the other geographic markets we serve; ▪ developments relating to the COVID - 19 pandemic or any other pandemic and measures to address them; ▪ our ability to service our debt and fund our working capital requirements; ▪ future demand for passenger and cargo air services in Chile, Brazil, other countries in Latin America and the rest of the world; ▪ the strength of our relationships with customers and the acceptance of ancillary products and services; ▪ the state of the Chilean, Brazilian, other Latin American and world economies and their impact on the airline industry;
HIGHLY CONFIDENTIAL Privileged Draft - Interim Work Product prepared at the direction of Counsel 7 Updated Business Plan Disclaimers Certain Risks Related to LATAM ▪ future terrorist incidents, cyberattacks or related activities affecting the airline industry; ▪ future outbreak of diseases, or the spread of already existing diseases, affecting travel behavior and/or exports; ▪ natural disasters affecting travel behavior and/or exports; ▪ the relative value of the Chilean peso, Brazilian real and other Latin American currencies compared to other world currencies; ▪ inflation; ▪ competitive landscape; ▪ our capital expenditure plans and change in aircraft / engine retirement plan; ▪ changes in labor costs, maintenance costs and insurance premiums; ▪ fluctuation of crude oil prices and its effect on fuel costs; ▪ cyclical and seasonal fluctuations in our operating results; ▪ defects or mechanical problems with our aircraft and supply chain restrictions impacting operational standard; ▪ our ability to successfully implement our growth strategy; ▪ our ability to continue to implement cost initiatives; ▪ increases in interest rates; and ▪ changes in regulations, including regulations related to access to routes, limitation on specific service and product charges and tax and environmental regulations.
HIGHLY CONFIDENTIAL Updated Business Plan Company Overview
HIGHLY CONFIDENTIAL Privileged Draft - Interim Work Product prepared at the direction of Counsel Updated Business Plan Company Overview LATAM – Latin America’s Leading Airline Group and Global Player Source: Company filings. 1 Estimates based on companies’ public filings and news reports, measured by number of passengers transported in 2021. 2 ANAC Brazil’s website (as measured by RPKs), JAC Chile’s website (RPKs), DGAC Peru’s website (number of passengers carried), Diio.net for Colombia and Ecuador (ASKs) as of December 2021. 3 As of December 31, 2021. 4 Estimates based on companies’ public filings and news reports. 5 As measured by total number of members at the end of 2021. 6 Based on 2021 Revenue. 7 Official Airline Guide Punctuality List 2021. 8 S&P Global “The Sustainability Yearbook” 2021. #1 Latin American Airline Group 1 #12 Airline Group Globally by # transported passengers 1 #1 Domestic Market Share of Affiliates in Brazil, Peru, Chile, and Ecuador 2 129 Passenger Destinations Serviced Worldwide 3 #1 Largest Cargo Business in Latin America, Connecting 22 Countries 3 #1 Largest FFP in South America 4 and #7 Largest Mileage Program Globally 4 , with 39mm Members 5 LATAM Highlights of 2021 Strategic and/or Commercial Agreements Passenger (65% of Revenues) 6 ▪ Largest airline group in Latin America and major player globally ▪ Comprehensive network connecting the subcontinent with North America, Europe and Asia - Pacific ▪ >2x the next regional competitor in revenue and transported passengers ▪ #1 in punctuality globally in Mega Airlines category 7 ▪ #1 in Region and #2 Globally in sustainability 8 Cargo (30% of Revenues) 6 ▪ Largest cargo player in Latin America ▪ 800k+ tons of cargo transported in 2021 ▪ Revenue increased nearly $500mm in 2021 vs. 2019 ▪ Transported more than 300 million vaccines within the region Frequent Flyer Program ▪ Largest Frequent Flyer program in Latin America ▪ Core differentiator driving significant customer retention ▪ Additional source of liquidity for the business ▪ Alliances with leading banks in each market 9 Business Overview Unbeatable network and diversified business segments sets LATAM apart
HIGHLY CONFIDENTIAL Privileged Draft - Interim Work Product prepared at the direction of Counsel Updated Business Plan Company Overview The Group Offers an Attractive Value Proposition Product & Service Recognitions 1 OAG Punctuality List 2021. 2 Best South American Airline (Skytrax World Airline Awards 2021 and 2019). 3 Based on Companies’ filings. 4 Estimates based on companies’ public filings and news reports. Sustainability South American Airline for 2 nd year in a row (2021) 2 On Time Performance in 2021 1 +51 points in NPS in 2021 Net Promoter Score up +11 and +18 points vs. 2020 & 2019 respectively 3 Expansive Network Cabin Segmentation Digitalization Leading FFP Commercial Agreements ▪ Best network in South America ▪ +129 passengers destinations serviced worldwide ▪ Premium cabin in all flights ▪ Seat selection, carry - on and checked bag ▪ Digitalization initiatives to improve customer experience ▪ Myriad of possible services and solutions available in a digital way (automatic check - in, personalized notifications, LATAM Wallet, etc.) ▪ 39+ million members ▪ Largest FFP in South America ▪ 7 th Largest FFP in the world 4 ▪ 2x the size of next regional FFP 4 Most sustainable airline in region, and #4 worldwide | Bronze Class inclusion ▪ Long - Term Sustainability Commitments ▪ Carbon neutral by 2050 (50% of domestic ops. by 2030) ▪ Zero waste to landfills by 2027 ▪ Eliminate single - use plastics in all operations by 2023 Most sustainable airline in region, and #2 worldwide | Silver Class inclusion The Sustainability Yearbook 2022 The Sustainability Yearbook 2021 S&P Global 10 10
11 HIGHLY CONFIDENTIAL Privileged Draft - Interim Work Product prepared at the direction of Counsel Updated Business Plan Note: Data as of 2019; LATAM Argentina ceased operation in 2020. Appraisal value of slots at JFK and LHR of US$ 35 million as of December 2021. Appraisal value of passenger and cargo brands and IP $615 million as of January 2022. 1 Excluding Paraguay ▪ LATAM group’s vast global network enjoys a competitive advantage over other South American carriers ― Customers are offered a superior value proposition, while LATAM utilizes the network to optimize market coverage and minimize costs ― Unparalleled network for cargo, combining freighter with passenger operations under a cargo strategy that leverages freighter and belly capacity ▪ Operating units serve both domestic and regional travel 1 ▪ LATAM group’s international operations are based out of 3 hubs ƒ +30 new routes opened in 2021, demonstrating large scale of operations and growing demand across geographies ▪ Destinations operated and capacity continue to recover in 2022, with destinations covered as of July 2022 reaching 96% of 2019 levels, and ASKs for June 2022 reaching 74% of 2019 levels GRU (Brazil) : connectivity to Europe, Africa, Asia (Tel Aviv), and select service in North America LIM (Peru) : connectivity to North America, the Caribbean, and Europe 1 ԙ SCL (Chile): connectivity to North America, Europe and Oceania 2 ԙ 3 ԙ 1 2 3 Company Overview LATAM Group’s Market - Leading Global Network 2019
Note: LATAM Argentina ceased operation in 2020. Source: 1 ANAC Brazil’s website (as measured by RPKs), JAC Chile’s website (RPKs), DGAC Peru’s website (number of passengers carried), Diio.net for Colombia and Ecuador (ASKs) as of December 2021; 2 Diio.net measured in ASKs as of December 2021 12 HIGHLY CONFIDENTIAL Privileged Draft - Interim Work Product prepared at the direction of Counsel Updated Business Plan Leading market share across domestic markets and unparalleled network connecting Latin America to the rest of the world Company Overview LATAM Group’s Leading Market Share in Domestic and International Markets
13 HIGHLY CONFIDENTIAL Privileged Draft - Interim Work Product prepared at the direction of Counsel Updated Business Plan Company Overview Cargo Business Overview Resiliency During COVID - 19 Pandemic Source: Public filings; Traffic data as of June 2022. Appraisal value of cargo business as of January 2022: $2.3 billion. Overview ▪ LATAM group is the largest cargo player in Latin America, with leading share in key import and export markets − Combined passenger and freighter network supports operational flexibility − Efficiency advantage based on Network design Optimal freighter fleet (B767) Handling optimization & productivity − Services ~137 destinations across 22 countries − Largest cargo facilities located in MIA, a natural gateway for imports and exports to/from Latin America and the United States ▪ Resilient business helped offset some of the impact of the COVID - 19 pandemic − Revenues increased 53% from 2019 to LTM Q1’22 − Traffic consistently near 2019 levels ▪ Fleet expansion underway − Conversion of 10 B767 passenger aircraft into freighters, increasing to a fleet of up to 21 freighters by the end of 2023 Cargo Revenue (US$mm) and Percentage of Total Revenue (%) Cargo RTK vs. Passenger RPK as Percentage of 2019 i 1 . ii 2 . iii 3 .
14 HIGHLY CONFIDENTIAL Privileged Draft - Interim Work Product prepared at the direction of Counsel Updated Business Plan Overview of LATAM Premium LATAM & Courtesy Access in associate Premium Preferential Special upgrade with LATAM Seat Checked all flights a irlines lounge s boarding support services coupons + seat s electio n bags Gold & Gold plus Platinum Black Black Signature Frequent Flyer Program Overview LATAM Pass is at the Core of LATAM Largest FFP in South America and 7 th largest FFP in the world 1 Strong revenue and profit contributor to LATAM # members vs. Latin American airlines (2021) (mm) LATAM revenue breakdown (2019) % of FFP from RPKs 84.8% 83.1% 83.5% 76.5% 74.4% ▪ Consolidation of LATAM Pass and Multiplus created the largest FFP in the region ▪ In 2019, LATAM acquired the remaining 27% stake in Multiplus to have the program fully aligned with its strategy Source: 1 Estimates based on companies’ public filings and news reports. Appraisal value of FFP as of January 2022: $5.4 billion. Appraisal value includes approximately $534 million of pre - sold miles as of December 31, 2021. LATAM Pass benefits drives engagement with high value customers LATAM VIP lounge (Santiago) ▪ LATAM Pass includes multiple offerings from Gold to Black Signature categories, improving customer experience and maximizing retention ▪ Newly opened Santiago VIP lounge is the largest one in South America
HIGHLY CONFIDENTIAL Privileged Draft - Interim Work Product prepared at the direction of Counsel Updated Business Plan Company Overview Ways to Earn Miles … with various ways of earning and redeeming miles … Frequent Flyer Program Overview (Cont’d) Compelling Value Proposition for Customers Driving Significant Engagement Broad network of commercial agreements … Ways to Redeem Miles ط Spending on co - branded cards ط Spending on services or products of commercial partners ط Flying with LATAM Airlines or our partner airlines ط LATAM Pass direct miles purchases ط Air travel ط Hotel stays ط Rental cars ط Products on catalogue … catering to a diverse and engaged member base Member breakdown by geography 1 Active member breakdown 2 Airline commercial agreements 6 co - brands +25 financial partners +100 commercial partnerships Non - air commercial agreements US White label ▪ Leading promoter of LATAM credit cards in the U.S. market ▪ Looking to offer them at every touch point with passengers 1 As measured by total number of members at the end of 2021. 2 Data as of December, 2021. 3 Active members refers to members who have earned or redeemed miles at least once in the past 24 months TOTAL: 39mm 50% 19.4mm 6% 2.3mm 2% 1.0mm 10% 3.7mm 12% 4.8mm 15% 5.9mm 5% 2.0mm 15 Other
HIGHLY CONFIDENTIAL Privileged Draft - Interim Work Product prepared at the direction of Counsel Updated Business Plan Company Overview Diversified cash flow streams ▪ Miles sold to airline and non - airline partners (including financial institutions) provide liquidity to the business and have a positive effect on working capital Low cost base ▪ Efficient and digitalized platform, integrated with LATAM’s infrastructure ▪ Low redemption cost from targeted offerings to utilize and enable capacity at a marginal cost ▪ Advanced analytics initiatives to increase miles revenue and reduce member churn (dynamic pricing for non - ticket redemption, optimal promotional price) High margin profile ▪ Profitable margin streams from spread on air and non - air redemption, breakage, financial float and a low cost base ▪ Multiplus EBITDA margin range before taken private averaged 25% between 2015 and 2017 1 16 15 14 77% 71% 73% 82% 19 82% 14 Frequent Flyer Program Overview (Cont’d) Financial Profile Combining Stable Revenues from Non - Airline Partners with High Cash Flow Generation 3 rd Party Sales / passengers carried (US$) Third Party sales (US$mm) Financial partnerships sales as % of total FFP sales 1 Based on Multiplus information disclosed in 2015 - 2017 Annual Reports Note: Figures above may not foot due to rounding Members (mm) 16
HIGHLY CONFIDENTIAL Privileged Draft - Interim Work Product prepared at the direction of Counsel Updated Business Plan Company Overview GOALS Committed not to Carbon neutral Aim to have 5% of Adapt business to a Eliminate exceed 2019 net airline group by 2030 total fuel circular economy single - use plastics emissions and 2050 consumption come model, becoming a by 2023 compensate 50% of from Sustainable group with zero domestic emissions Aviation Fuel, waste to landfills by by 2030 primarily sourced 2027 from the region LATAM launched a long - term sustainability strategy with the goal of carbon neutrality by 2050 SHARED VALUE 17 CIRCULAR ECONOMY CLIMATE CHANGE
HIGHLY CONFIDENTIAL Privileged Draft - Interim Work Product prepared at the direction of Counsel Updated Business Plan Company Overview Key Strategic Focus on Sustainability Through its ESG strategy, LATAM Airlines will measure, monitor and report on its sustainable development impact and advance the United Nations Sustainable Development Goals Development Initiatives United Nations Sustainable Development Goals (UN SDGs) targets Transport Infrastructure: Improve the quality of transport infrastructure and services by: • Serving 284 routes, of which 62 are uniquely served by LATAM Airlines and 12 connect peripheral and urban areas • Transporting ~ 40 mm passengers per year and over 800,000 tonnes of cargo per year Climate Change: Foster climate change mitigation by: • Reaching 2.3% of Sustainable Aviation Fuels (SAF) as % of total fuels by 2029 • Implementing efforts to reduce CO emissions per 1000 ATK by ~ 22% by 2030 2 • Saving ~ 25 mm gallons of fuel by 2027 through increased fuel efficiency • Reducing Scope1 GhG emissions by ~ 13% by 2029, achieving carbon neutrality by 2050 • Avoiding 1.3 mm tonnes of GhG emissions through carbon offsets purchases in 2027, reducing and offsetting the equivalent to 50% of domestic operations by 2030 • Obtaining 80% of the carbon credits purchased in 2027 from projects preserving the natural ecosystems in South America Circular Economy: Increase environmental sustainability by: • Reducing white paper consumption • Eliminating single use plastics by 2023 • Increasing the amount of recycled, reused and sustainable material used in its operations Job creation: Support job creation and monitor progress by: • Providing over 900,000 annual hours of training to employees • Supporting over 29,000 jobs through operational activities 2 • Employing ~ 36% of women as % of total employees and ~ 30% of women in executive positions as % of total executives Governance: Foster corporate and institutional governance by: • Developing 15 alliances as part of the Solidarity Plane Program focused on areas as health, environment and natural disaster relief • Complying under international standards as IEnvA and IOSA 1 • Publishing an annual sustainability report and participating in annual sustainability assessments • 9.1: Develop quality, reliable, sustainable and resilient infrastructure, including regional and transborder infrastructure, to support economic development and human well - being, with a focus on affordable and equitable access for all • 9.4: By 2030, upgrade infrastructure and retrofit industries to make them sustainable, with increased resource - use efficiency and greater adoption of clean and environmentally sound technologies • 13.2: Integrate climate change measures into national policies, strategies and planning • 15.1: Ensure the conservation, restoration and sustainable use of terrestrial ecosystems • 15.2: By 2020, promote sustainable management of all types of forests • 12.2: By 2030, achieve the sustainable management and efficient use of natural resources • 12.5: By 2030, substantially reduce waste generation through prevention, reduction, recycling and reuse • 4.3: By 2030, ensure equal access for women and men to affordable and quality technical, vocational and tertiary education, including university • 5.5: Ensure women’s full and effective participation and equal opportunities for leadership at all levels of decision - making in political, economic and public life • 8.5: By 2030, achieve full and productive employment and decent work for all women and men, including for young people and persons with disabilities, and equal pay for work • 12.6: Encourage companies, to adopt sustainable practices and to integrate sustainability information into their reporting cycle • 17.3: Mobilize additional financial resources for developing countries • 17.16: Enhance the Global Partnership for Sustainable Development, complemented by multi - stakeholder partnerships to support the achievement of the SDGs 18 1 IEnvA: IATA Environmental Assessment; IOSA: IATA Operational Safety Audit; 2 As of 1Q 2022 Source: Company information; The development outputs statements and projections reflect various assumptions by the Group.
19 HIGHLY CONFIDENTIAL Privileged Draft - Interim Work Product prepared at the direction of Counsel Updated Business Plan Company Overview $10.4 (36)% +70% $6.7 At Filing As of Dec’22 At Filing As of Dec’22 Note: May not sum due to rounding; 1 “At Filing” refers to 5/25/2020 petition date debt balances; 2 “As of Dec’22” is pro forma for financing transactions related to emergence. Cash balance based on assumed cash as of 12/31/2022 under publicly available business plan and remains subject to the impact of the ongoing claims reconciliation process on cash at hand and the outcome of such transactions, and may vary upon emergence. ; 3 Includes cash & cash equivalents and revolving credit facility capacity; 4 Refers to 1Q 2020 vs. 2Q 2022; 5 Refers to Q1 2020 vs. Q2 2022 LATAM is Ready to Emerge from Chapter 11 Stronger than Ever Operational actions and balance sheet improvements position LATAM to continue leading the airline sector in Latin America Cost Structure Gross Debt (US$bn) 1,2 Liquidity (US$bn) 1,2,3 ▪ Wages and benefit savings − Reduced FTE by 12k 4 ▪ Rationalized and more efficient fleet − Reduced from 341 to 301 5 − PBH / Interest only arrangements provide flexibility during recovery − Lower cost operations ▪ Improved vendor and supplier contracts − Renegotiated approximately 1,000 contracts − Rejected non - competitive contracts ▪ Expected 2H’22 Passenger CASK ex Fuel excluding PBH reaching US$ 4,2 cents
HIGHLY CONFIDENTIAL Updated Business Plan Key Criteria Supporting the Updated Business Plan
HIGHLY CONFIDENTIAL Privileged Draft - Interim Work Product prepared at the direction of Counsel 21 Updated Business Plan Key criteria supporting the Updated Business Plan ▪ Demand recovery is assumed sustained ▪ Corporate segment recovery in line with previous assumptions ▪ Competitor publicly available capacity information assumed for competitive landscape ▪ Regulatory environment assumed stable ▪ Potential changes in tax and environmental regulations not included ▪ Maintaining operational high standard ▪ Digital enablers supporting costs initiatives delivered on time Key Criteria
HIGHLY CONFIDENTIAL Updated Business Plan Demand / Capacity Updated Business Plan
HIGHLY CONFIDENTIAL Privileged Draft - Interim Work Product prepared at the direction of Counsel Updated Business Plan Demand / Capacity Updated Business Plan LATAM’s capacity plan was determined upon two main inputs: the expectation of market demand recovery based on observed trend as of July, 2022 and the anticipated competitive landscape ▪ LATAM completed a thorough analysis to develop market demand and capacity plan assumptions Market Demand Recovery ▪ Estimated recovery and growth of market demand ; forecast at segment level (country, length of haul and type of travel) ▪ Market demand recovery aligned with Industry forecast ( 1 ) . 5 % higher when compared to previous BP Competitive Landscape ▪ LATAM has made assumptions around competitor capacity ▪ Competitor publicly available capacity information is one of the key inputs informing LATAM capacity deployment in each market Capacity Plan ▪ Capacity Plan by market is based on the Demand - Supply results from equilibrium the Market which Demand and the Competitive Recovery Landscape + = 1 2 23 Source: (1) Consulting firm’s global air traffic demand scenarios updated as of Jul’22 and internal network planning framework and analysis
HIGHLY CONFIDENTIAL Privileged Draft - Interim Work Product prepared at the direction of Counsel Updated Business Plan Demand / Capacity Updated Business Plan A “bottom - up” approach was followed to assess the Market Demand Recovery Length of haul ▪ Domestic – at country Level ▪ Regional – from given country to/within South America and Caribbean ▪ Long haul – from given country to Europe, North America and Asia Pacific Travel type ▪ Business ▪ Leisure ▪ Visiting Friends and Relatives (“VFR”) … demand (RPK) recovery and growth forecasted by length of haul and customer type of travel ▪ Brazil ▪ Chile ▪ Colombia ▪ Ecuador ▪ Peru For each of the key affiliate markets and segments that LATAM group serves … 24
HIGHLY CONFIDENTIAL Privileged Draft - Interim Work Product prepared at the direction of Counsel Updated Business Plan Demand / Capacity Updated Business Plan # Historic data observed # Assumptions Total baseline RPKs + CAGR Total forecast RPKs Total baseline RPKs Source: Global Strategic Consulting Firm Report (April 2021) Segment “A” RPKs A market demand recovery framework was developed which identifies initially 3 phases. All businesses are in Rebound and New Normal phases Phases Logic & Variables 1 3 7 New normal gap (pts): % of 2019 demand that doesn’t come back 8 Post - crisis CAGR (%): Growth rate once new normal demand reached Trough (% of 2019): Lowest point of demand during crisis Start of recovery (months): Time at which rebound starts Double dip: Deceleration/Decline in demand due to second waves Initial monthly recovery rate (pp): Slope of the rebound phase Inflection point (month): Point at which recovery slope changes after border reopening/vaccination milestone reached Accelerated monthly recovery rate (pp) = Observed initial rate X multiplier : Slope of the rebound phase after “inflection point” 2 6 5 4 25
HIGHLY CONFIDENTIAL Privileged Draft - Interim Work Product prepared at the direction of Counsel Updated Business Plan Demand / Capacity Updated Business Plan Demand in affiliate domestic markets expected to reach 2019 levels during 2022, one quarter faster recovery compared to Previous Business Plan Demand Recovery Assumptions: Domestic Markets ▪ All domestic markets are expected to reach 2019 levels by the end of 2022 Notes: Domestic Markets consider domestic Brazil, Chile, Colombia, Ecuador and Peru | Consulting firm’s global air traffic demand scenarios updated as of Jul’22 and internal network planning framework and analysis Domestic Markets RPKs billions, monthly Domestic Recovery 2019 RPK Country (billion) Forecasted recovery to 2019 RPKs Brazil 88 Q3 2022 Chile 15 Q4 2022 Peru 9 Q4 2022 Colombia 12 Q1 2022 Ecuador 1 Q3 2022 Updated BP Average Previous BP Average Recovery Recovery Q3 - 22 Q4 - 22 8 years CAGR 4.1% 26
HIGHLY CONFIDENTIAL Privileged Draft - Interim Work Product prepared at the direction of Counsel Updated Business Plan Demand / Capacity Updated Business Plan ▪ Based on current trends, recovery to 2019 levels is forecasted by Q 4 2022 assuming travel restrictions continue to be lifted Demand in regional markets is expected to recover to 2019 levels by Q4’22 Regional Markets RPKs billions, monthly Demand Recovery Assumptions: Regional Market ▪ Faster recovery in regional RPKs than anticipated in the previous Business Plan (referring to the 5 years projections filed on a Form 6 - K on September 9 , 2021 ) Updated BP Recovery Previous BP Recovery Q4 - 22 Q4 - 23 8 years CAGR 3.5% Note: Includes Regional pairs (country to country within South America) | Consulting firm’s global air traffic demand scenarios updated as of Jul’22 and internal network planning framework and analysis 27
28 HIGHLY CONFIDENTIAL Privileged Draft - Interim Work Product prepared at the direction of Counsel Updated Business Plan Demand / Capacity Updated Business Plan Based on current trends, long - haul travel demand is the slowest to recover, expected to reach 2019 levels in ~Q2 2023 Demand Recovery Assumptions: Long - Haul Market ▪ Long haul travel is not expected to reach 2019 RPKs until Q 2 - 23 due to travel restrictions and the change in business travel habits ▪ Pent up demand has been driving a faster recovery compared to previous Business Plan during the last months ▪ It is expected that business travel will have a permanent structural gap of approximately 15 % ▪ Based on current trends, we estimate that by 2027 , the long - haul market (including demand associated with the Delta Airlines joint venture) is forecast to recover 121 % of 2019 RPK levels Note: Consulting firm’s global air traffic demand scenarios updated as of Jul’22 and internal network planning framework and analysis Long Haul Markets RPKs billions, monthly Updated BP Recovery Previous BP Recovery Q2 - 23 Q3 - 24 8 years CAGR 2.7%
29 HIGHLY CONFIDENTIAL Privileged Draft - Interim Work Product prepared at the direction of Counsel Updated Business Plan Demand / Capacity Updated Business Plan Business Plan’s Jet Fuel assumptions based on market consensus ▪ Macroeconomic variable assumptions were based on market consensus guidance from multiple international and regional banking institutions, publicly - available information, and in certain cases, internally - developed assumptions ▪ Annual average Jet Fuel prices were forecasted based on view from banking institutions . In the absence of guidance suggesting specific factors that would affect future prices, Jet Fuel per barrel in the Business Plan is assumed to remain flat at US $ 100 per barrel from 2024 onwards Source: Bloomberg, Latin Focus Forecast (Jul.’22), Company analysis 2022 updated as of 1st August
HIGHLY CONFIDENTIAL Updated Business Plan Updated Business Plan
HIGHLY CONFIDENTIAL Privileged Draft - Interim Work Product prepared at the direction of Counsel Updated Business Plan Updated Business Plan Current expectations are that Total Revenues increase approximately 30% when compared to pre - COVID levels, reaching an estimated US$ 13.9 billions in 2027 Note: Revenue projections based on trend as of July 2022 and internal analysis. Total Revenues include Passenger, Cargo and Other Revenues ▪ Based on available information and current trends, LATAM estimates that it will return to 2019 capacity levels by 2024 when ASKs reach approx . 148 billion, driven primarily by demand recovery in affiliate domestic markets ▪ LATAM forecasts that the group will fly 176 billion ASKs in 2027 , an assumption based on the continuing recovery in demand in the later years, primarily in the international segment ▪ Total RASK is expected to increase 13 % by the end of the forecast period compared to 2019 . The updated Business Plan assumes an important growth in Ancillary revenues as we expect this industry trend to continue . Total Revenue per ASK reduced in 2023 and 2024 driven in part by fuel price reduction assumption 31
HIGHLY CONFIDENTIAL Privileged Draft - Interim Work Product prepared at the direction of Counsel 32 Updated Business Plan Updated Business Plan ● LATAM cargo affiliates business strategy reflected in the plan continues being “Belly - Supporting Freighter” ● Based on current trends, capacity expected to return to 2019 level by end of 2023 due to additional belly and freighter capacity available to move cargo ● Additional cargo conversions during the period are expected to increase to 19 cargo freighters . Freighter ATK capacity expected to grow approximately 100 % ( 2027 vs . 2019 ) . Total ATKs capacity expected to grow roughly 40 % , driven by the Long - Haul passenger demand recovery and wide body additional capacity ● Cargo revenues are expected to grow from US $ 1 . 1 billion in 2019 to an estimated US $ 1 . 9 billion in 2027 . System load factor and RATK expected to remain higher than 2019 , mainly due to fuel price increase passthrough Cargo expected to use freighter capacity growth to compensate for the impact in belly capacity during the recovery period
HIGHLY CONFIDENTIAL Privileged Draft - Interim Work Product prepared at the direction of Counsel Updated Business Plan LATAM’s cost - cutting measures during the pandemic are driving a decrease in the Company’s operating costs, ex Fuel, expected to return to 2019 levels in 2023 Updated Business Plan ▪ Passenger CASK in 2023 is expected to significantly offset cost escalation and inflation . Majority of 2022 CASK reduction from measures already implemented and improved fixed cost leverage based on run rate volumes ▪ LATAM has executed on several key initiatives to reduce its CASK ex Fuel, including: − Reducing headcount by 27% from 42,000 FTEs in 2019 to 30,600 in June 2022 − Negotiating usage based/interest only terms across the majority of LATAM’s fleet, which extension out into 2023 for Wide Body fleet, and securing reductions in fixed rates (operating leases) thereafter − Outsourcing various functions, including airport support staff, effectively converting a fixed cost structure to a variable, more efficient one − Renegotiated over one thousand contracts with vendors and suppliers resulting in lower or more variable rate structures − Implementing process efficiencies and automation throughout digital levers across all passenger journey experience: direct sale penetration, airport automation and post sale resolution − In addition, LATAM is expecting to identify other costs initiatives that allow for cash containment CASK in US$ cents (US$ Cents) 2022 2023 2024 2025 2026 2027 Adjusted Passenger CASK 4.6 3.9 3.8 3.7 3.7 3.7 33 CASK ex Fuel adjusted by real inflation from 2022 to 2027
HIGHLY CONFIDENTIAL Privileged Draft - Interim Work Product prepared at the direction of Counsel Updated Business Plan ▪ In 2019, LATAM flew 150 billion ASKs and reported revenue of US$ 10.4 billion and EBITDA of US$ 2.2 billion ▪ LATAM’s capacity, measured in ASKs, fell to 56 billion in 2020 , a 63 % decrease compared to 2019 . Subsequent waves of COVID - 19 , and the associated restrictions on travel, continued to impact demand until early 2022 ▪ Based on current trends and assumptions, the updated Business Plan Projections assumes that a recovery to pre - COVID demand (and revenue) will occur faster than expected in the short term and similar to the previous Business Plan in the long term, led by LATAM’s domestic markets, followed by international travel (both regional and long - haul) ▪ EBIT and EBITDA margins expected to structurally improve post - recovery relative to pre - pandemic, driven by Cargo and Ancillary revenues, further expansion of Frequent Flyer Program and continue focus on cost cutting Updated Business Plan Based on recent trends and assumptions, LATAM forecasts an EBIT in 2024 that could exceed US$ 1 bn, continuing to grow thereafter, achieving an EBIT margin of 12% by 2027 Forecast Income Statement EBIT Forecast Assumptions US$ MM 2019 2020 2021 2022 2023 2024 2025 2026 2027 Passenger + Other 9,366 3,125 3,570 7,867 9,505 9,624 10,452 11,241 12,002 Cargo 1,064 1,210 1,542 1,787 1,954 1,784 1,801 1,827 1,851 Total Revenues 10,431 4,335 5,111 9,655 11,458 11,407 12,252 13,069 13,853 Fuel Expenses (2,929) (1,045) (1,488) (4,092) (4,394) (3,599) (3,783) (3,946) (4,149) Ex Fuel Expenses (6,760) (4,955) (4,743) (5,774) (6,421) (6,773) (7,172) (7,573) (8,022) Total Expenses (9,689) (6,000) (6,231) (9,866) (10,815) (10,372) (10,955) (11,519) (12,171) EBIT 742 (1,665) (1,119) (211) 643 1,035 1,297 1,550 1,682 EBIT margin 7.1% - 38.4% - 21.9% - 2.2% 5.6% 9.1% 10.6% 11.9% 12.1% EBT 137 (5,096) (2,782) 1,821 47 296 661 787 1,051 EBITDA 2,212 (276) 46 960 1,894 2,414 2,772 3,086 3,310 EBITDA margin 21.2% - 6.4% 0.9% 9.9% 16.5% 21.2% 22.6% 23.6% 23.9% EBITDAR 2,212 (276) 167 1,158 2,003 2,429 2,773 3,087 3,310 EBITDAR margin 21,2% - 6,4% 3,3% 12,0% 17,5% 21,3% 22,6% 23,6% 23,9% ASKs in billions 150 56 68 115 141 148 158 167 176 EBITDAR consists of earnings for the period before income taxes and financial costs and financial income, plus depreciation and amortization expenses and rentals expenses 34
HIGHLY CONFIDENTIAL Privileged Draft - Interim Work Product prepared at the direction of Counsel Updated Business Plan Updated Business Plan Operational cash flow expected to exceed US$ 2 billion from 2023 onwards Changes in Working Capital ▪ General : Forecasted working capital in the period 2022 to 2027 reflects the recovery in LATAM’s operations to pre - pandemic levels ▪ Working capital in 2022 includes expected adjustments to balance sheet due emergence from Chapter 11 ▪ Working capital accounts are forecasted based on days of sales (“ DSO ”), days inventory on - hand (“ DIO ”), days of payables (“ DPO ”) and days of deferred revenue (“ DDR ”) Free Cash Flow Forecast Operational Cash Flows ▪ Based on current trends and assumptions, LATAM expects to double previous BP EBIT Projection in 2023 , and is expected that EBIT could exceed US $ 1 billion EBIT in 2024 and double digit EBIT margin in 2025 US$ MM| 2019 2020 2021 2022 2023 2024 2025 2026 2027 Revenues 10,431 4,335 5,111 9,655 11,458 11,407 12,252 13,069 13,853 Expenses (9,689) (6,000) (6,231) (9,866) (10,815) (10,372) (10,955) (11,519) (12,171) EBIT 742 (1,665) (1,119) (211) 643 1,035 1,297 1,550 1,682 D&A 1,470 1,389 1,165 1,172 1,251 1,379 1,475 1,536 1,628 Operational Rentals - - 121 197 109 15 - - - EBITDAR 2,212 (276) 167 1,158 2,003 2,429 2,773 3,087 3,310 Working Capital 787 (80) (51) (1,141) 134 4 108 151 173 Operational Rentals - - (121) (197) (109) (15) - - - Tax (45) (66) (9) (18) (20) (14) (89) (198) (236) Operational Cash Flow 2,954 (422) (14) (199) 2,008 2,404 2,791 3,039 3,247 35 EBITDAR consists of earnings for the period before income taxes and financial costs and financial income, plus depreciation and amortization expenses and rentals expenses Operational Rentals consists on Pay By Hour (“PBH”) fleet operational leases
36 HIGHLY CONFIDENTIAL Privileged Draft - Interim Work Product prepared at the direction of Counsel Updated Business Plan Updated Business Plan Capital expenditures include fleet growth, maintenance and projects, as well as key customer facing transformations: i.e. cabin retrofit and digital experience Free Cash Flow: Capital Expenditures Assumptions ▪ Cash Fleet Capex: represents aircraft financial leases ▪ Non Cash Fleet CAPEX : includes present value of the right to use aircraft under operating lease agreements, as per IFRS 16 . All of the arrivals from 2022 onwards are assumed to be financed through operating leases . ▪ Non - Fleet Capex : includes the maintenance of engines (both on and off - balance) 1 , the purchase of spare parts, and investment in projects, intangible and components . 2024 includes Cabin Retrofit over US $ 300 million ▪ Others: PDP, Asset Sales and others ▪ Based on the assumptions in the updated Business Plan and current estimates, Free Cash Flow is forecasted to exceed US $ 1 billion in 2026 ▪ Non Cash Fleet Debt : this line reverses the outflows included in capex relating to operating leases under IFRS 16 (i . e . the present value of the right to use aircraft under operating leases) as they are non - cash items capex recorded under investing cash flow and operational engine capex under change in working capital (cash flow from operation) ( 1 ) Adj . Free Cash Flow represents Free Cash Flow + Non Cash Fleet Debt Note : Assumptions relating to, among other things, cash position and liquidity remain subject to change due to, among other things, the impact of the ongoing claims reconciliation process on cash at hand and the outcome of the Company's emergence financing transactions, and may vary upon emergence . Financial information reflects cash outflows in different lines for on and off - balance . On - balance engine US$ MM 2019 2020 2021 2022 2023 2024 2025 2026 2027 Operational Cash Flow 2,954 (422) (14) (199) 2,008 2,404 2,791 3,039 3,247 Cash Fleet Capex (601) - - - - - - - - Non Cash Fleet Capex (700) - (537) (374) (1,098) (448) (740) (750) (1,020) Non - Fleet Capex (1,206) (426) (846) (915) (1,165) (1,301) (1,068) (1,024) (1,068) Others 309 26 124 89 50 8 (66) (183) (374) Investment Cash Flow (2,198) (400) (1,259) (1,200) (2,213) (1,740) (1,874) (1,958) (2,462) Free Cash Flow 756 (822) (1,273) (1,399) (205) 664 917 1,080 785 Non Cash Fleet Debt 700 - 537 374 1,098 448 740 750 1,020 Adj. Free Cash Flow 1 1,456 (822) (736) (1,025) 893 1,111 1,657 1,831 1,805
HIGHLY CONFIDENTIAL Privileged Draft - Interim Work Product prepared at the direction of Counsel 37 Updated Business Plan Estimated Annual Fleet cash out saving approx. 40% vs 2019 Updated Business Plan Fleet reduction until 2022 ▪ Rejection of 26 aircraft ▪ Retirement of 11 older NB ▪ 15 B767s taken out of operation ▪ Addition of 8 new leases into the fleet (2 A320, 1 B787 - 9) Fleet simplification ▪ Withdrawal of 1 WB fleet type (A350) ▪ Consolidation of Brazil operation with B777 and B787 Aircraft Type Fleet as of Petition Date Net +/ - 2022 2023 End of Year Fleet 2024 2025 2026 2027 NB 249 (15) 234 244 223 237 234 246 A319 46 (6) 40 A320 141 (13) 128 A320neo 13 4 17 A321 A321neo A321XLR 49 - - - - - 49 - - WB 79 (23) 56 56 59 59 61 61 A350 13 (13) - B767 30 (15) 15 B777 10 - 10 B787 - 8 10 - 10 B787 - 9 16 5 21 Pax Fleet 328 (38) 290 300 282 296 295 307 Freighter 12 4 16 Total Fleet 340 (34) 306 322 301 315 314 326 ( - ) Pending Sales - - ( - ) Pending Conversions - (6) Operational Fleet 340 (40) 306 322 301 315 314 326
HIGHLY CONFIDENTIAL Privileged Draft - Interim Work Product prepared at the direction of Counsel Updated Business Plan Updated Business Plan Expected Financing Cash Flows Based on current trends, positive Cash Flow from 2023 onwards are expected 38 US$ MM 2019 2020 2021 2022 2023 2024 2025 2026 2027 Non Cash Fleet Debt 700 - 537 374 1,098 448 740 750 1,020 Adj. Free Cash Flow 1,456 (822) (736) (1,025) 893 1,111 1,657 1,831 1,805 Debt Amortizations (Net) (440) 1,443 225 (3,037) (279) (548) (657) (673) (713) Dividend payments (55) (1) - - - (10) (62) (139) (165) Interest & Others (907) (384) (139) 4,080 (511) (549) (601) (581) (653) Financing Cash Flow (1,402) 1,058 86 1,043 (789) (1,107) (1,320) (1,393) (1,531) Total Cash Flows 54 236 (649) 18 104 4 338 438 273 Ending Cash 1,459 1,696 1,047 1,066 1,170 1,174 1,511 1,949 2,222 Liquidity 20% 69% 45% 22% 20% 20% 21% 23% 24% Free Cash Flow 756 (822) (1,273) (1,399) (205) 664 917 1,080 785 (1) Debt amortization net of debt increase, not considering the non cash fleet debt (2) Assumptions relating to, among other things, cash position and liquidity remain subject to change due to, among other things, the impact of the ongoing claims reconciliation process on cash at hand and the outcome of the Company's emergence financing transactions, and may vary upon emergence ▪ Non Cash Fleet Debt : this line reverses the outflows included in capex relating to operating leases under IFRS 16 (i . e . the present value of the right to use aircraft under operating leases) as they are non - cash items ▪ Expected dividends paid pursuant to the statutory requirement of 30 % , assuming offsets of cumulative net losses ▪ Liquidity 2 : includes the cash on hand plus available revolver capacity of US $ 1 . 1 billion . Liquidity from 2023 onwards is expected to be at or above 20 % of LTM revenues
HIGHLY CONFIDENTIAL Privileged Draft - Interim Work Product prepared at the direction of Counsel Updated Business Plan Updated Business Plan Expected Net leverage of 2.6x in 2024, expected liquidity over 20% from 2023 onwards Debt and Liquidity Forecast ▪ As a consequence of updated Business Plan assumptions and the Chapter 11 process, debt reduced from US $ 10 . 4 billion in 2019 to < 7 billion in Dec’ 22 - Expected reduction of leverage levels in 2023 relative to 2019 - Net Leverage of approximately 2 . 6 x in 2024 would strengthen LATAM’s capital structure - Expected deleveraging thought forecast period due to strong operational cash flow and disciplined investment - Liquidity over 20 % in all the projected period considering the revolver credit facility available US$ MM 2019 2020 2021 2022 2023 2024 2025 2026 2027 Debt 10,367 11,150 11,061 6,702 7,570 7,474 7,575 7,666 7,989 Fleet Debt 7,690 6,350 4,818 3,977 4,686 4,612 4,735 4,849 5,170 Non Fleet 2,677 4,800 6,243 2,725 2,884 2,862 2,840 2,817 2,819 EBITDAR 2,212 - 276 167 1,158 2,003 2,429 2,773 3,087 3,310 Cash 1,459 1,696 1,047 1,066 1,170 1,174 1,511 1,949 2,222 Net Debt 8,908 9,454 10,014 5,636 6,400 6,301 6,064 5,717 5,767 Gross Leverage 4,7x NA 240,5x 5.8x 3.8x 3.1x 2.7x 2.5x 2.4x Net Leverage 4.0x NA 217.7x 4.9x 3.2x 2.6x 2.2x 1.9x 1.7x Liquidity (%) 20% 67% 45% 22% 20% 20% 21% 23% 24% 39 Notes: Fleet Debt: Fleet related debt + IFRS non - financial debt | Financial Debt: Nominal Debt without reducing structuring costs | Net Leverage calculated as Net Debt / EBITDAR
HIGHLY CONFIDENTIAL Privileged Draft - Interim Work Product prepared at the direction of Counsel 40 Updated Business Plan Updated Business Plan Estimated Sources and Uses - Upon Exit and Emergence Estimated Sources and Uses as of September 30th, 2022 Estimated Sources and Uses as of October 14th, 2022 3 Sources US$ MM Bonds / Term loans 2,250 Junior DIP 1,143 Total 3,393 Uses US$ MM DIP 1 repayment 2,929 DTE 2 Fees & Expenses 118 Additional Cash 346 Total 3,393 Sources US$ MM Convert C Convert B Equity Right Offering Spare Engine Facility 3,269 1,373 800 273 Total 5,715 Uses US$ MM USD Bonds repayment Existing RCF repayment Brazil Financial Debt repayment Fees & Others Administrative Claims Spare Engine Facility Subsidiary Claims Junior DIP Cash Distribution Payment Additional Cash 1,519 600 298 743 240 273 471 1,150 250 171 Total 5,715 (1) DTE : DIP to Exit (2) RCF : Revolving Credit Facility (3) Sources and uses information remains subject to change as due to, among other things, the impact of the ongoing reconciliation process on cash at hand and the outcome of the Company's financing emergence financing transactions, and may vary upon emergence
HIGHLY CONFIDENTIAL Privileged Draft - Interim Work Product prepared at the direction of Counsel Updated Business Plan Updated Business Plan Estimated Balance Sheet Pro Forma as of December 2022 Expected Balance Sheet Pro Forma as of December 2022 2 ▪ Assuming exit financing in September 30th and effective date October 14th, 2022 ▪ Updated Business Plan Balance Sheet as of December 2022 ▪ Cash & cash equivalents and Debt does not include fully available US$ 1,1 billion Revolving Credit Facility 41 (1) Debt represents nominal accounting debt as of December 2022. It does include structuring costs as per IFRS (2) Pro forma estimates and assumptions remain subject to change due to, among other things, the impact of the ongoing claims reconciliation process on cash at hand and the outcome of the Company's emergence financing transactions, and may vary upon emergence. US$ MM Dec 22 Proforma Cash & cash equivalents 1,066 Financial assets 182 Accounts receivables 1,175 Inventory 342 PP&E 9,904 Other assets 364 Total Assets 13,033 Accounts payable 1,696 Deferred revenue 2,802 Debt 6,599 DIP 0 Other liabilities 1,369 Total Liabilities 12,465 Total Shareholders' Equity 568 Total Liabilities + Shareholders' Equity 13,033
Updated Business Plan LATAM AIRLINES GROUP 5 Years Business Plan Projection Subject to Applicable Confidentiality Agreements and Requirements August 2022 HIGHLY CONFIDENTIAL