SEGMENTAL INFORMATION

12 Months Ended

Dec. 31, 2018

Segmental Information

SEGMENTAL INFORMATION

NOTE 5 - SEGMENTAL INFORMATION

The Company considers that it has two operating segments: air transport and the Multiplus loyalty and coalition program.

The air transport 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 reallocating resources (aircraft, crew, personnel, etc.) within the network, which implies a functional interrelation between them, making them inseparable. This segment definition is one of the most common at the level of the airline industry worldwide.

The Multiplus Coalition and Loyalty Program segment, unlike the LATAM Pass and LATAM Fidelidade programs, which are frequent flyer programs that operate as a unilateral loyalty system, offers a flexible, interrelated coalition system among its members, which has 22.2 million members, together with being an entity with a separate administration and a business not directly related to air transport.

For the year ended

										Coalition and
	Air									loyalty program
	transportation									Multiplus									Eliminations									Consolidated
	At December 31,									At December 31,									At December 31,									At December 31,
	2018			2017			2016			2018			2017			2016			2018			2017			2016			2018			2017			2016
	ThUS$			ThUS$			ThUS$			ThUS$			ThUS$			ThUS$			ThUS$			ThUS$			ThUS$			ThUS$			ThUS$			ThUS$
Income from ordinary activities from external customers (*)		9,887,090			9,159,031			8,587,772			60,020			454,876			400,568			(51,654	)		-			-			9,895,456			9,613,907			8,988,340
Passenger		8,700,622			8,039,601			7,477,147			60,020			454,876			400,568			(51,654	)		-			-			8,708,988			8,494,477			7,877,715
Freight		1,186,468			1,119,430			1,110,625			-			-			-			-			-			-			1,186,468			1,119,430			1,110,625
Income from ordinary activities from transactions with other operating segments		-			454,876			400,568			-			67,554			65,969			-			(522,430	)		(466,537	)		-			-
Other operating income		346,315			308,937			364,551			126,443			240,952			174,197			-			-			-			472,758			549,889			538,748
Interest income		27,181			28,184			27,287			26,072			50,511			58,380						-			(10,718	)		53,253			78,695			74,949
Interest expense		(356,269	)		(393,286	)		(427,054	)		-			-			-						-			10,718			(356,269	)		(393,286	)		(416,336	)
Total net interest expense		(329,088	)		(365,102	)		(399,767	)		26,072			50,511			58,380			-			-			-			(303,016	)		(314,591	)		(341,387	)
Depreciation and amortization		(974,827	)		(994,416	)		(952,285	)		(6,819	)		(7,209	)		(8,043	)		-			-			-			(981,646	)		(1,001,625	)		(960,328	)
Material non-cash items other than depreciation and amortization		(223,677	)		(75,479	)		10,069			(85	)		(145	)		(991	)		-			-			-			(223,762	)		(75,624	)		9,078
Disposal of fixed assets and inventory losses		(46,351	)		(39,238	)		(82,734	)		-			-			-			-			-			-			(46,351	)		(39,238	)		(82,734	)
Doubtful accounts		(18,741	)		(18,272	)		(29,674	)		(96	)		(144	)		(476	)		-			-			-			(18,837	)		(18,416	)		(30,150	)
Exchange differences		(157,720	)		(18,717	)		122,129			11			(1	)		(478	)		-			-			-			(157,709	)		(18,718	)		121,651
Result of indexation units		(865	)		748			348			-			-			(37	)		-			-			-			(865	)		748			311
Income (loss) atributable to owners of the parents (**)		72,333			(3,482	)		(83,653	)		109,602			158,783			152,873			-			-			-			181,935			155,301			69,220
Participation of the entity in the income of associates		-			-			-			-			-			-			-			-			-			-			-			-
Expenses for income tax		(36,506	)		(104,376	)		(92,476	)		(47,276	)		(69,128	)		(70,728	)		-			-			-			(83,782	)		(173,504	)		(163,204	)
Segment profit / (loss)		103,645			41,931			(42,203	)		109,602			158,783			152,873			-			-			-			213,247			200,714			110,670
Assets of segment		16,431,182			17,430,937			17,805,749			1,145,942			1,373,049			1,400,432			(10,347	)		(6,014	)		(7,987	)		17,566,777			18,797,972			19,198,194
Segment liabilities		13,394,785			14,007,916			14,469,505			449,347			563,849			572,065			(24,131	)		(41,029	)		(28,680	)		13,820,001			14,530,736			15,012,890
Amount of non-current asset additions		763,878			412,846			1,481,090			-			-			-			-			-			-			763,878			412,846			1,481,090
Property, plant and equipment		668,786			325,513			1,390,730			-			-			-			-			-			-			668,786			325,513			1,390,730
Intangibles other than goodwill		95,092			87,333			90,360			-			-			-			-			-			-			95,092			87,333			90,360
Purchase of non-monetary assets of segment		756,913			490,983			782,957			-			-			-			-			-			-			756,913			490,983			782,957

(*) The Company does not have any interest revenue that should be recognized as income from ordinary activities by interest.

(**) The result of the Company includes a net result of ThUS$ (10,489) resulting from the application of IAS 21 and IAS 29, for the subsidiaries that are in hyperinflationary economies.

For the year ended

										Coalition and
	Air									loyalty program
	transportation									Multiplus									Eliminations								Consolidated
	At December 31,									At December 31,									At December 31,								At December 31,
	2018			2017			2016			2018			2017			2016			2018		2017			2016			2018			2017			2016
	ThUS$			ThUS$			ThUS$			ThUS$			ThUS$			ThUS$			ThUS$		ThUS$			ThUS$			ThUS$			ThUS$			ThUS$
Net cash flows from
Purchases of property, plant and equipment		660,631			403,282			693,581			76			384			789			-		-			-			660,707			403,666			694,370
Additions associated with maintenance		375,634			218,537			197,866			-			-			-			-		-			-			375,634			218,537			197,866
Other additions		284,997			184,745			495,715			76			384			789			-		-			-			285,073			185,129			496,504
Purchases of intangible assets (***)		85,628			79,102			84,377			10,578			8,216			4,210			-		-			-			96,206			87,318			88,587
Net cash flows from (used in) operating activities		1,394,146			1,489,797			827,108			111,161			186,367			154,411			11,623		(9,424	)		(635	)		1,516,930			1,666,740			980,884
Net cash flow from (used in) investing activities		(348,348	)		(278,790	)		(426,989	)		(10,022	)		(8,632	)		(4,800	)		-		-			-			(358,370	)		(287,422	)		(431,789	)
Net cash flows from (used in) financing activities		(956,510	)		(1,010,705	)		(246,907	)		(95,699	)		(168,383	)		(149,372	)		-		-			-			(1,052,209	)		(1,179,088	)		(396,279	)

(***)The Company does not have cash flows from purchases of intangible assets associated with maintenance.

The Company’s revenues by geographic area are as follows:

	For the year ended
	At December 31,
	2018		2017		2016
	ThUS$		ThUS$		ThUS$
Peru		705,133		626,316		627,215
Argentina		989,883		1,113,467		1,030,973
U.S.A.		985,919		900,413		933,130
Europe		782,197		676,282		714,436
Colombia		372,794		359,276		343,001
Brazil		3,433,877		3,436,402		2,974,234
Ecuador		203,842		190,268		198,171
Chile		1,591,313		1,527,158		1,512,570
Asia Pacific and rest of Latin America		830,498		784,325		654,610
Income from ordinary activities		9,895,456		9,613,907		8,988,340
Other operating income		472,758		549,889		538,748

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.