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STATEMENT OF CASH FLOWS | 12 Months Ended
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Dec. 31, 2022
STATEMENT OF CASH FLOWS [Abstract] |
STATEMENT OF CASH FLOWS | NOTE 34 - STATEMENT OF CASH FLOWS (a) The Company has carried out the following non-monetary transactions mainly related for: a.1.) Proceeds from the issuance of shares:
Detail |  | THUS$ |
Issuance of shares |  |  | 800,000 |
Issuance costs |  |  | (80,000 | )
DIP Junior offset |  |  | (170,962 | )
Total cash flow |  |  | 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$80,000 deducted related to equity issuance cost, that are presented within Other sundry reserves of equity. a.2.) Amount from the issuance of other equity instruments:
|  | Convertible |  |  | Convertible |  |  |  |
Detail |  | Notes H |  |  | Notes I |  |  | Total |
|  | ThUS$ |  |  | ThUS$ |  |  | ThUS$ |
Fair Value (see note 24) |  |  | 1,372,837 |  |  |  | 4,097,788 |  |  |  | 5,470,625 |
Use for settement of claim |  |  | - |  |  |  | (828,581 | ) |  |  | (828,581 | )
Issuance costs |  |  | (24,812 | ) |  |  | (705,467 | ) |  |  | (730,279 | )
DIP Junior offset |  |  | (327,957 | ) |  |  | (381,018 | ) |  |  | (708,975 | )
Cash inflow |  |  | 1,020,068 |  |  |  | 2,182,722 |  |  |  | 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. ThUS$327,957 and of the other creditor for Th$381.018. a.3.) As a result of the exit from Chapter 11, in relation to trade accounts payable and other accounts payable, the conversion into shares for Bonds 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$3,596. (b) Other inflows (outflows) of cash:
|  | For the year ended |
|  | December 31, |
|  | 2022 |  |  | 2021 |  |  | 2020 |
|  |  | ThUS$ |  |  |  | ThUS$ |  |  |  | ThUS$ |
Fuel hedge |  |  | 35,857 |  |  |  | 14,269 |  |  |  | (46,579 | )
Hedging margin guarantees |  |  | (40,207 | ) |  |  | (4,900 | ) |  |  | 14,962 |
Tax paid on bank transactions |  |  | (2,134 | ) |  |  | (2,530 | ) |  |  | (1,261 | )
Fuel derivatives premiums |  |  | (23,372 | ) |  |  | (17,077 | ) |  |  | (3,949 | )
Bank commissions, taxes paid and other |  |  | (5,441 | ) |  |  | (21,287 | ) |  |  | (5,828 | )
Guarantees |  |  | (47,384 | ) |  |  | (39,728 | ) |  |  | (44,280 | )
Court deposits |  |  | (20,661 | ) |  |  | (16,323 | ) |  |  | 38,528 |
Delta Air Lines Inc. Compensation |  |  | - |  |  |  | - |  |  |  | 62,000 |
Funds delivered as restricted advances |  |  | (26,918 | ) |  |  | - |  |  |  | - |
Total Other inflows (outflows) Operation flow |  |  | (130,260 | ) |  |  | (87,576 | ) |  |  | 13,593 |
Tax paid on bank transactions |  |  | - |  |  |  | (425 | ) |  |  | (2,192 | )
Guarantee deposit received from the sale of aircraft |  |  | 6,300 |  |  |  | 18,900 |  |  |  | - |
Total Other inflows (outflows) Investment flow |  |  | 6,300 |  |  |  | 18,475 |  |  |  | (2,192 | )
Settlement of derivative contracts |  |  | - |  |  |  | - |  |  |  | (107,788 | )
Funds delivered as restricted advances |  |  | (313,090 | ) |  |  | - |  |  |  | - |
Payments of claims associated with the debt |  |  | (21,924 | ) |  |  | - |  |  |  | - |
RCF guarantee placement |  |  | (7,500 | ) |  |  | - |  |  |  | - |
Debt-related legal advice |  |  | (87,993 | ) |  |  | (11,034 | ) |  |  | - |
Debt Issuance Cost - Stamp Tax |  |  | (33,259 | ) |  |  | - |  |  |  | - |
Total Other inflows (outflows) Financing flow |  |  | (463,766 | ) |  |  | (11,034 | ) |  |  | (107,788 | )
(c) Dividends: As of December 31, 2022 and 2021, there were no disbursements associated with this concept. (d) Reconciliation of liabilities arising from financing activities:
|  |  |  |  | Cash flows |  |  | Non cash-Flow Movements |  |  |  |
|  | As of |  |  | Obtainment |  |  | Payment |  |  | Extinguishment |  |  | Interest |  |  |  |  |  | As of |
|  | December 31, 2021 |  |  | Capital (*) |  |  | Capital (**) |  |  | Interests |  |  | Transaction cost |  |  | of debt under Chapter 11 |  |  | accrued and others |  |  | Reclassifications |  |  | December 31, 2022 |
|  | ThUS$ |  |  | ThUS$ |  |  | ThUS$ |  |  | ThUS$ |  |  | ThUS$ |  |  | ThUS$ |  |  | ThUS$ |  |  | ThUS$ |  |  | ThUS$ |
Obligations with financial institutions |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Loans to exporters |  |  | 159,161 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (161,975 | ) |  |  | 2,814 |  |  |  | - |  |  |  | - |
Bank loans |  |  | 521,838 |  |  |  | 982,425 |  |  |  | (36,466 | ) |  |  | (10,420 | ) |  |  | - |  |  |  | (196,619 | ) |  |  | 128,077 |  |  |  | (2,840 | ) |  |  | 1,385,995 |
Guaranteed obligations |  |  | 510,535 |  |  |  | - |  |  |  | (18,136 | ) |  |  | (13,253 | ) |  |  | (25 | ) |  |  | - |  |  |  | 13,882 |  |  |  | (167,942 | ) |  |  | 325,061 |
Other guaranteed obligations |  |  | 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 | ) |  |  | - |  |  |  | (843,950 | ) |  |  | 148,703 |  |  |  | 141,336 |  |  |  | 1,289,799 |
Financial leases |  |  | 1,189,182 |  |  |  | - |  |  |  | (270,734 | ) |  |  | (34,201 | ) |  |  | - |  |  |  | (37,630 | ) |  |  | 37,211 |  |  |  | 204,411 |  |  |  | 1,088,239 |
Other loans |  |  | 76,508 |  |  |  | 1,467,035 |  |  |  | (1,523,798 | ) |  |  | (5,628 | ) |  |  | 3,281 |  |  |  | (56,176 | ) |  |  | 40,806 |  |  |  | - |  |  |  | 2,028 |
Lease liability |  |  | 2,960,638 |  |  |  | - |  |  |  | (131,917 | ) |  |  | (49,075 | ) |  |  | (2 | ) |  |  | (995,888 | ) |  |  | 492,592 |  |  |  | (59,893 | ) |  |  | 2,216,454 |
Total Obligations with financial institutions |  |  | 10,396,482 |  |  |  | 7,217,900 |  |  |  | (8,891,330 | ) |  |  | (521,715 | ) |  |  | (87,993 | ) |  |  | (2,673,256 | ) |  |  | 1,203,560 |  |  |  | 138,233 |  |  |  | 6,781,880 |
|  |  |  |  | Cash flows |  |  | Non cash-Flow Movements |  |  |  |
|  | As of |  |  | Obtainment |  |  | Payment |  |  | Interest |  |  |  |  |  | As of |
|  | December 31, 2020 |  |  | Capital (*) |  |  | Capital (**) |  |  | Interests |  |  | Transaction cost |  |  | accrued and others |  |  | Reclassifications |  |  | December 31, 2021 |
|  | ThUS$ |  |  | ThUS$ |  |  | ThUS$ |  |  | ThUS$ |  |  | ThUS$ |  |  | ThUS$ |  |  | ThUS$ |  |  | ThUS$ |
Obligations with financial institutions |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Loans to exporters |  |  | 151,701 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 7,460 |  |  |  | - |  |  |  | 159,161 |
Bank loans |  |  | 525,273 |  |  |  | - |  |  |  | - |  |  |  | (546 | ) |  |  | - |  |  |  | (2,889 | ) |  |  | - |  |  |  | 521,838 |
Guaranteed obligations |  |  | 1,318,856 |  |  |  | - |  |  |  | (14,605 | ) |  |  | (17,405 | ) |  |  | - |  |  |  | (513,276 | )(***) |  |  | (263,035 | ) |  |  | 510,535 |
Other guaranteed obligations |  |  | 1,939,116 |  |  |  | 661,609 |  |  |  | (26,991 | ) |  |  | (28,510 | ) |  |  | - |  |  |  | 135,405 |  |  |  | 44,793 |  |  |  | 2,725,422 |
Obligation with the public |  |  | 2,183,407 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 69,791 |  |  |  | - |  |  |  | 2,253,198 |
Financial leases |  |  | 1,614,501 |  |  |  | - |  |  |  | (421,452 | ) |  |  | (40,392 | ) |  |  | - |  |  |  | (181,717 | ) |  |  | 218,242 |  |  |  | 1,189,182 |
Other loans |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 76,508 |  |  |  | - |  |  |  | 76,508 |
Lease liability |  |  | 3,121,006 |  |  |  | - |  |  |  | (103,366 | ) |  |  | (17,768 | ) |  |  | - |  |  |  | (39,234 | ) |  |  | - |  |  |  | 2,960,638 |
Total Obligations with financial institutions |  |  | 10,853,860 |  |  |  | 661,609 |  |  |  | (566,414 | ) |  |  | (104,621 | ) |  |  | - |  |  |  | (447,952 | ) |  |  | - |  |  |  | 10,396,482 |
|  |  |  |  | Cash flows |  |  | Non cash-Flow Movements |  |  |  |
|  | As of |  |  | Obtainment |  |  | Payment |  |  | Interest |  |  |  |  |  |  | As of |
|  | December 31, 2019 |  |  | Capital |  |  | Capital |  |  | Interests |  |  | Transaction cost |  |  | accrued and others |  |  |  | Reclassifications |  |  | December 31, 2020 |
|  | ThUS$ |  |  | ThUS$ |  |  | ThUS$ |  |  | ThUS$ |  |  | ThUS$ |  |  | ThUS$ |  |  |  | ThUS$ |  |  | ThUS$ |
Obligations with financial institutions |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Loans to exporters |  |  | 341,475 |  |  |  | 165,000 |  |  |  | (359,000 | ) |  |  | (4,140 | ) |  |  | - |  |  |  | 8,366 |  |  |  |  | - |  |  |  | 151,701 |
Bank loans |  |  | 217,255 |  |  |  | 265,627 |  |  |  | (4,870 | ) |  |  | (2,397 | ) |  |  | - |  |  |  | 49,658 |  |  |  |  | - |  |  |  | 525,273 |
Guaranteed obligations |  |  | 2,157,327 |  |  |  | 192,972 |  |  |  | (48,576 | ) |  |  | (21,163 | ) |  |  | - |  |  |  | (823,984 | )(***) |  |  |  | (137,720 | ) |  |  | 1,318,856 |
Other guaranteed obligations |  |  | 580,432 |  |  |  | 1,361,881 |  |  |  | (42,721 | ) |  |  | (27,744 | ) |  |  | - |  |  |  | 67,268 |  |  |  |  | - |  |  |  | 1,939,116 |
Obligation with the public |  |  | 2,064,934 |  |  |  | - |  |  |  | (774 | ) |  |  | (55,613 | ) |  |  | - |  |  |  | 174,860 |  |  |  |  | - |  |  |  | 2,183,407 |
Financial leases |  |  | 1,730,843 |  |  |  | - |  |  |  | (236,744 | ) |  |  | (52,155 | ) |  |  | - |  |  |  | 34,837 |  |  |  |  | 137,720 |  |  |  | 1,614,501 |
Other loans |  |  | 101,261 |  |  |  | - |  |  |  | (101,026 | ) |  |  | (1,151 | ) |  |  | - |  |  |  | 916 |  |  |  |  | - |  |  |  | - |
Lease liability |  |  | 3,172,157 |  |  |  | - |  |  |  | (122,063 | ) |  |  | (46,055 | ) |  |  | - |  |  |  | 116,967 |  |  |  |  | - |  |  |  | 3,121,006 |
Total Obligations with financial institutions |  |  | 10,365,684 |  |  |  | 1,985,480 |  |  |  | (915,774 | ) |  |  | (210,418 | ) |  |  | - |  |  |  | (371,112 | ) |  |  |  | - |  |  |  | 10,853,860 |
During 2022, at the time of the subscription of Note H, the fair value of the liability component amounted to ThUS$102,031. As of December 31, 2022, the liability component was converted into equity (see note 24(e.2)).
| (*) | As of December 31, 2022, the Company obtained ThUS$2,361,875 amounts from long-term loans and ThUS$4,856,025 (ThUS$661,609 in 2021) amounts from short-term loans, totaling ThUS$7,217,900.
| (**) | As of December 31, 2022, loan repayments ThUS$8,759,413 and payments of lease liabilities ThUS$131,917 disclosed in flows from financing activities and as of December 31, 2021, loan repayments ThUS$463,048 and liability payments for leases ThUS$103,366 disclosed in flows from financing activities.
| (***) | As of December 31, 2021, Accrued interest and others, includes ThUS$458,642 (ThUS$ 891,407 as of December 31, 2020), associated with the rejection of fleet contracts.
Below are the details obtained (payments) of flows related to financing:
|  | For the exercises of December 31 |
|  | 2022 |  |  | 2021 |
|  | Capital |  |  | Payments |  |  | Capital |  |  | Payments |
Flow of |  | raising |  |  | Capital |  |  | Interest |  |  | raising |  |  | Capital |  |  | Interest |
|  | ThUS$ |  |  | ThUS$ |  |  | ThUS$ |  |  | ThUS$ |  |  | ThUS$ |  |  | ThUS$ |
Aircraft financing |  |  | - |  |  |  | (331,292 | ) |  |  | (52,088 | ) |  |  | - |  |  |  | (463,048 | ) |  |  | (63,763 | )
Lease liability |  |  | - |  |  |  | (131,917 | ) |  |  | (49,075 | ) |  |  | - |  |  |  | (103,366 | ) |  |  | (17,768 | )
Non-aircraft financing |  |  | 7,217,900 |  |  |  | (8,428,121 | ) |  |  | (420,553 | ) |  |  | 661,609 |  |  |  | - |  |  |  | (23,090 | )
Total obligations with Financial institutions |  |  | 7,217,900 |  |  |  | (8,891,330 | ) |  |  | (521,716 | ) |  |  | 661,609 |  |  |  | (566,414 | ) |  |  | (104,621 | )
(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 |
|  | December 31, |
|  | 2022 |  |  | 2021 |  |  | 2020 |
|  | ThUS$ |  |  | ThUS$ |  |  | ThUS$ |
Increases (payments) |  |  | (23,118 | ) |  |  | (9,858 | ) |  |  | (31,803 | )
Recoveries |  |  | 43,902 |  |  |  | - |  |  |  | 8,157 |
Total cash flows |  |  | 20,784 |  |  |  | (9,858 | ) |  |  | (23,646 | )
The Company has revised its consolidated statement of cash flows for the year ended December 31, 2021 to correct the classification of cash flows related to property, plant and equipment additions. This correction resulted in an increase in net cash used in investing activities of ThUS$9,858 and a decrease in cash used in operating activities in the same amount. (f) Additions of property, plant and equipment and Intangibles
|  | For the period ended |
|  | At December 31, |
|  | 2022 |  |  | 2021 |  |  | 2020 |
|  | ThUS$ |  |  | ThUS$ |  |  | ThUS$ |
Net cash flows from |  |  |  |  |  |  |  |  |
Purchases of property, plant and equiment |  |  | 780,538 |  |  |  | 597,103 |  |  |  | 324,264 |
Additions associated with maintenance |  |  | 486,231 |  |  |  | 302,858 |  |  |  | 173,740 |
Other additions |  |  | 294,307 |  |  |  | 294,245 |  |  |  | 150,524 |
Purchases of intangible assets |  |  | 50,116 |  |  |  | 88,518 |  |  |  | 75,433 |
Other additions |  |  | 50,116 |  |  |  | 88,518 |  |  |  | 75,433 |
(g) The net effect of the application of hyperinflation in the consolidated cash flow statement corresponds to:
|  | For the period ended |
|  | December 31, |
|  | 2022 |  |  | 2021 |
|  | ThUS$ |  |  | ThUS$ |
Net cash flows from (used in) operating activities |  |  | (36,701 | ) |  |  | (65,901 | )
Net cash flows from (used in) investment activities |  |  | (146 | ) |  |  | 17,223 |
Net cash flows from (used in) financing activities |  |  | 7,703 |  |  |  | - |
Effects of variation in the exchange rate on cash and cash equivalents |  |  | 29,144 |  |  |  | 48,678 |
Net increase (decrease) in cash and cash equivalents |  |  | - |  |  |  | - |
(h) Payments of leased maintenance Payments to suppliers for the supply of goods and services include the value paid associated with leased maintenance capitalizations for ThUS$149,142 (ThUS$163,717 as of December 31, 2021 and ThUS$65,960 as of December 31, 2020). (i) Payments of loans to related entities
|  | For the period ended |
|  | December 31, |
|  | 2022 |
|  | ThUS$ |
Delta Air Lines, Inc. |  |  | (78,947 | )
Qatar Airways |  |  | (78,947 | )
Costa Verde Aeronautica S.A. |  |  | (257,533 | )
Lozuy S.A. |  |  | (107,122 | )
QA Invesments Ltd |  |  | (242,967 | )
QA Invesments 2 Ltd |  |  | (242,967 | )
Payments of loans to related entities |  |  | (1,008,483 | )

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