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FINANCIAL RISK MANAGEMENT | 12 Months Ended
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Dec. 31, 2023
Disclosure Of Financial Risk Management [Abstract] |
FINANCIAL RISK MANAGEMENT | 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: 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. 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 $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$22.1 million (positive). At the end of December 31, 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 (*) |  | Maturities
|  | Q124 |  | Q224 |  | Q324 |  | Q424 |  | Total
Percentage of coverage over the expected volume of consumption |  | 35 | % |  | 32 | % |  | 30 | % |  | 22 | % |  | 30 | %
Positions as of December 31, 2022 (*) |  | Maturities
|  | Q123 |  | Q223 |  | 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$5 per barrel in the underlying reference price curve at the end of December 2023 and the end of December of 2022 . The projection period was defined until the end of the last fuel hedging contract in force, being the last business day of the second half of 2024.
Benchmark price (US$ per barrel) |  | Positions as of December 31, 2023 effect on Equity (MUS$) |  | Positions as of December 31, 2022 effect on Equity (MUS$)
+5 |  | +10.8 |  | +2.2
-5 |  | -10.7 |  | -2.3
Given the fuel hedging structure for the year 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. 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 cost of sales. At the end of December of 2022, the Company recognize gains for US$5.2 million for FX hedging derivatives reflected in 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 current non-hedged FX derivatives. At the end of December of 2022, the Company recognize 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% |  | -10.0 |  | -2.9
+10% |  | +19.0 |  | +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% |  | +6.6 |  | +70.7
+10% |  | -6.6 |  | -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. 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% |  | +327.01 |  | +98.11
+10% |  | -267.56 |  | -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, there are 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$0.1 million for this same concept. As of December 31, 2023, the Company settled a derivative for US$ US$14.8 million associated with hedges of leased aircraft. Sensitivity analysis: The following table shows the sensitivity of changes in financial obligations that are not hedged against interest-rate variations. These changes are considered reasonably possible, based on current market conditions each date.
Increase (decrease) of future curve SOFR rate |  | Positions as of December 31, 2023 effect on Income (Loss) before taxes (MUS$) |  | Positions as of December 31, 2022 effect on Income (Loss) before tax (MUS$)
+100 basis points |  | -20.27 |  | -22.64
-100 basis points |  | +20.27 |  | +22.64
A large part of the derivatives of current rates are recorded as cash flow hedge contracts, therefore, a variation in interest rates has an impact on the market value of the derivatives, whose changes affect the equity of the entity. The calculations were made by vertically increasing (decreasing) 100 base points of the interest rate curve, both scenarios being reasonably possible according to historical market conditions.
Increase (decrease) interest rate curve |  | Positions as of December 31, 2023 effect on equity (MUS$) |  | Positions as of December 31, 2022 effect on equity (MUS$)
+100 basis points |  | — |  | +6.9
-100 basis points |  | — |  | -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 Expect Credit Loss at the end of December 2023 had a decreased 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 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 Aéreas 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 classification. As of December 31, 2023, LATAM maintains engaged two Revolving Credit Facility for a total of US$1,100 millon, one for an amount of US$600 million and another for an amount of US$500 million, which are fully available. The first of these lines is secured by and subject to the availability of certain collateral (i.e. aircraft, engines and spare parts). The second one, is secured by certain intangibles assets of the Company, which are shared with other Chapter 11 exit financing. Class of liability for the analysis of liquidity risk ordered by date of maturity as of December 31, 2023 Debtor: LATAM Airlines Group S.A., Tax No. 89.862.200-2 Chile
Tax No. |  | Creditor |  | Creditor country |  | Currency |  | Up to 90 days |  | More than 90 days to one year |  | More than one to three years |  | More than three to five years |  | More than five years |  | Total |  | Nominal value |  | Amortization |  | Annual
|  |  |  |  |  |  |  |  |  |  |  | Effective rate |  | Nominal rate
|  |  |  |  |  |  |  | ThUS$ |  | ThUS$ |  | ThUS$ |  | ThUS$ |  | ThUS$ |  | ThUS$ |  | ThUS$ |  |  |  | % |  | %
Bank loans
0-E |  | GOLDMAN SACHS |  | U.S.A. |  | US$ |  | 44,721 |  |  | 127,878 |  |  | 302,953 |  |  | 1,192,355 |  |  | — |  |  | 1,667,907 |  |  | 1,089,000 |  |  | Quarterly |  | 20.31 |  |  | 15.04 |
Obligations with the public
97.036.000-K |  | SANTANDER |  | Chile |  | UF |  | — |  |  | 3,230 |  |  | 6,409 |  |  | 6,409 |  |  | 182,647 |  |  | 198,695 |  |  | 160,214 |  |  | To the expiration |  | 2.00 |  |  | 2.00 |
0-E |  | WILMINGTON TRUST COMPANY |  | U.S.A. |  | US$ |  | — |  |  | 153,813 |  |  | 307,625 |  |  | 697,438 |  |  | 793,625 |  |  | 1,952,501 |  |  | 1,150,000 |  |  | To the expiration |  | 15.00 |  |  | 13.38 |
97.036.000-K |  | SANTANDER |  | Chile |  | US$ |  | — |  |  | — |  |  | — |  |  | — |  |  | 6 |  |  | 6 |  |  | 3 |  |  | To the expiration |  | 1.00 |  |  | 1.00 |
Guaranteed obligations
0-E |  | BNP PARIBAS |  | U.S.A. |  | US$ |  | 5,940 |  |  | 17,082 |  |  | 41,319 |  |  | 40,578 |  |  | 120,730 |  |  | 225,649 |  |  | 171,704 |  |  | Quarterly |  | 6.98 |  |  | 6.98 |
0-E |  | WILMINGTON TRUST COMPANY |  | U.S.A. |  | US$ |  | 5,948 |  |  | 16,928 |  |  | 42,098 |  |  | 40,736 |  |  | 54,056 |  |  | 159,766 |  |  | 132,585 |  |  | Quarterly/Monthly |  | 8.76 |  |  | 8.76 |
Other guaranteed obligation
0-E |  | EXIM BANK |  | U.S.A. |  | US$ |  | 452 |  |  | 1,348 |  |  | 43,531 |  |  | 43,494 |  |  | 16,665 |  |  | 105,490 |  |  | 99,109 |  |  | Quarterly |  | 2.29 |  |  | 2.05 |
0-E |  | MUFG |  | U.S.A. |  | US$ |  | 12,919 |  |  | 37,926 |  |  | 16,649 |  |  | — |  |  | — |  |  | 67,494 |  |  | 64,102 |  |  | Quarterly |  | 7.11 |  |  | 7.11 |
0-E |  | CREDIT AGRICOLE |  | France |  | US$ |  | 6,451 |  |  | 33,576 |  |  | 75,714 |  |  | 243,842 |  |  | — |  |  | 359,583 |  |  | 266,768 |  |  | To the expiration |  | 9.43 |  |  | 9.43 |
Financial lease
0-E |  | NATIXIS |  | France |  | US$ |  | 10,653 |  |  | 30,443 |  |  | 73,474 |  |  | 70,443 |  |  | 94,995 |  |  | 280,008 |  |  | 215,357 |  |  | Quarterly |  | 7.58 |  |  | 7.58 |
0-E |  | US BANK |  | U.S.A. |  | US$ |  | 17,984 |  |  | 50,411 |  |  | 17,681 |  |  | — |  |  | — |  |  | 86,076 |  |  | 84,177 |  |  | Quarterly |  | 4.41 |  |  | 3.16 |
0-E |  | EXIM BANK |  | U.S.A. |  | US$ |  | 3,262 |  |  | 9,389 |  |  | 216,015 |  |  | 148,582 |  |  | 75,118 |  |  | 452,366 |  |  | 413,072 |  |  | Quarterly |  | 4.13 |  |  | 3.31 |
0-E |  | BANK OF UTAH |  | U.S.A. |  | US$ |  | 5,891 |  |  | 17,705 |  |  | 47,590 |  |  | 54,357 |  |  | 117,597 |  |  | 243,140 |  |  | 172,582 |  |  | Monthly |  | 10.71 |  |  | 10.71 |
Others loans
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 |  |  |  |  |  |  |
(*)Obligation with creditors for executed letters of credit. 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 |  | More than 90 days to one year |  | More than one to three years |  | More than three to five years |  | More than five years |  | Total |  | Nominal value |  | Amortization |  | Annual
|  |  |  |  |  |  |  |  |  |  |  | Effective rate |  | Nominal rate
|  |  |  |  |  |  |  | ThUS$ |  | ThUS$ |  | ThUS$ |  | ThUS$ |  | ThUS$ |  | ThUS$ |  | ThUS$ |  |  |  | % |  | %
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 |  |  |  |  |  |  |
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 |  | More than 90 days to one year |  | More than one to three years |  | More than three to five years |  | More than five years |  | Total |  | Nominal value |  | Amortization |  | Annual
|  |  |  |  |  |  |  |  |  |  |  | Effective rate |  | Nominal rate
|  |  |  |  |  |  |  | ThUS$ |  | ThUS$ |  | ThUS$ |  | ThUS$ |  | ThUS$ |  | ThUS$ |  | ThUS$ |  |  |  | % |  | %
Lease Liability
|  | 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$ |  | 2,523 |  |  | 7,276 |  |  | 14,863 |  |  | 846 |  |  | 1,404 |  |  | 26,912 |  |  | 25,680 |  |  | — |  |  | — |  |  | — |
|  |  |  |  |  | CLP |  | 19 |  |  | 57 |  |  | 94 |  |  | — |  |  | — |  |  | 170 |  |  | 135 |  |  | — |  |  | — |  |  | — |
|  |  |  |  |  | UF |  | 557 |  |  | 1,255 |  |  | 2,906 |  |  | 2,426 |  |  | 5,099 |  |  | 12,243 |  |  | 11,097 |  |  | — |  |  | — |  |  | — |
|  |  |  |  |  | COP |  | 122 |  |  | 308 |  |  | 266 |  |  | 148 |  |  | — |  |  | 844 |  |  | 667 |  |  | — |  |  | — |  |  | — |
|  |  |  |  |  | EUR |  | 63 |  |  | 101 |  |  | 172 |  |  | 23 |  |  | — |  |  | 359 |  |  | 296 |  |  | — |  |  | — |  |  | — |
|  |  |  |  |  | BRL |  | 2,314 |  |  | 6,871 |  |  | 15,177 |  |  | 14,438 |  |  | 25,742 |  |  | 64,542 |  |  | 35,841 |  |  | — |  |  | — |  |  | — |
|  |  |  |  |  | MXN |  | 24 |  |  | 71 |  |  | 8 |  |  | — |  |  | — |  |  | 103 |  |  | 84 |  |  | — |  |  | — |  |  | — |
Trade and other accounts payables
- |  | OTHERS |  | OTHERS |  | US$ |  | 846,541 |  |  | 7,063 |  |  | — |  |  | — |  |  | — |  |  | 853,604 |  |  | 709,933 |  |  | — |  |  | — |  |  | — |
|  |  |  |  |  | CLP |  | 44,593 |  |  | 8,072 |  |  | — |  |  | — |  |  | — |  |  | 52,665 |  |  | 64,317 |  |  | — |  |  | — |  |  | — |
|  |  |  |  |  | BRL |  | 309,999 |  |  | 7,671 |  |  | — |  |  | — |  |  | — |  |  | 317,670 |  |  | 409,474 |  |  | — |  |  | — |  |  | — |
|  |  |  |  |  | Other currency |  | 178,740 |  |  | 5,522 |  |  | — |  |  | — |  |  | — |  |  | 184,262 |  |  | 118,189 |  |  | — |  |  | — |  |  | — |
Accounts payable to related parties currents
Foreign |  | Qatar Airways |  | Qatar |  | US$ |  | — |  |  | 2,312 |  |  | — |  |  | — |  |  | — |  |  | 2,312 |  |  | 2,312 |  |  |  |  |  |  |
Foreign |  | Delta Air Lines, Inc. |  | U.S.A |  | US$ |  | — |  |  | 5,132 |  |  | — |  |  | — |  |  | — |  |  | 5,132 |  |  | 5,132 |  |  |  |  |  |  |
|  | Total |  |  |  |  |  | 1,525,094 |  |  | 471,265 |  |  | 1,150,168 |  |  | 946,119 |  |  | 1,717,507 |  |  | 5,810,153 |  |  | 4,277,352 |  |  |  |  |  |  |
|  | Total consolidated |  |  |  |  |  | 1,639,929 |  |  | 972,524 |  |  | 2,345,306 |  |  | 3,494,239 |  |  | 3,172,946 |  |  | 11,624,944 |  |  | 8,312,135 |  |  |  |  |  |  |
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 |  | Total |  | Nominal value |  | Amortization |  | Annual
|  |  |  |  |  |  |  |  |  |  |  | Effective rate |  | Nominal rate
|  |  |  |  |  |  |  | ThUS$ |  | ThUS$ |  | ThUS$ |  | ThUS$ |  | ThUS$ |  | ThUS$ |  | ThUS$ |  |  |  | % |  | %
Bank loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
97.023.000-9 |  | GOLDMAN SACHS |  | U.S.A. |  | US$ |  | 32,071 |  |  | 122,278 |  |  | 323,125 |  |  | 1,361,595 |  |  | — |  |  | 1,839,069 |  |  | 1,100,000 |  |  | Quarterly |  | 18.46 |  |  | 13.38 |
0-E |  | SANTANDER |  | Spain |  | US$ |  | 19,164 |  |  | 55,288 |  |  | — |  |  | — |  |  | — |  |  | 74,452 |  |  | 70,951 |  |  | Quarterly |  | 7.26 |  |  | 7.26 |
Obligations with the public
97.030.000-7 |  | SANTANDER |  | Chile |  | UF |  | — |  |  | 3,136 |  |  | 6,271 |  |  | 6,271 |  |  | 178,736 |  |  | 194,414 |  |  | 156,783 |  |  | At Expiration |  | 2.00 |  |  | 2.00 |
0-E |  | WILMINGTON TRUST COMPANY |  | U.S.A. |  | US$ |  | — |  |  | 152,531 |  |  | 307,625 |  |  | 757,625 |  |  | 887,250 |  |  | 2,105,031 |  |  | 1,150,000 |  |  | At Expiration |  | 15.00 |  |  | 13.38 |
97.036.000-K |  | SANTANDER |  | Chile |  | US$ |  | — |  |  | — |  |  | — |  |  | — |  |  | 6 |  |  | 6 |  |  | 3 |  |  | At Expiration |  | 1.00 |  |  | 1.00 |
Guaranteed obligations
0-E |  | BNP PARIBAS |  | U.S.A. |  | US$ |  | 6,692 |  |  | 14,705 |  |  | 39,215 |  |  | 39,215 |  |  | 138,345 |  |  | 238,172 |  |  | 184,198 |  |  | Quarterly |  | 5.76 |  |  | 5.76 |
0-E |  | WILMINGTON TRUST COMPANY |  | U.S.A. |  | US$ |  | 3,839 |  |  | 13,465 |  |  | 45,564 |  |  | 43,444 |  |  | 75,505 |  |  | 181,817 |  |  | 141,605 |  |  | Quarterly / Monthly |  | 8.20 |  |  | 8.20 |
Other guaranteed obligation
0-E |  | EXIM BANK |  | U.S.A. |  | US$ |  | 394 |  |  | 1,171 |  |  | 12,119 |  |  | 21,111 |  |  | 60,857 |  |  | 95,652 |  |  | 86,612 |  |  | Quarterly |  | 2.01 |  |  | 1.78 |
0-E |  | MUFG |  | U.S.A. |  | US$ |  | 13,091 |  |  | 38,914 |  |  | 69,916 |  |  | — |  |  | — |  |  | 121,921 |  |  | 112,388 |  |  | Quarterly |  | 6.23 |  |  | 6.23 |
0-E |  | CREDIT AGRICOLE |  | France |  | US$ |  | 5,769 |  |  | 31,478 |  |  | 70,890 |  |  | 267,615 |  |  | — |  |  | 375,752 |  |  | 275,000 |  |  | At Expiration |  | 8.24 |  |  | 8.24 |
Financial lease
0-E |  | CITIBANK |  | U.S.A. |  | US$ |  | 6,995 |  |  | 5,844 |  |  | - |  |  | — |  |  | — |  |  | 12,839 |  |  | 12,514 |  |  | Quarterly |  | 6.19 |  |  | 5.47 |
0-E |  | BNP PARIBAS |  | U.S.A. |  | US$ |  | 6,978 |  |  | 20,662 |  |  | 1,543 |  |  | — |  |  | — |  |  | 29,183 |  |  | 28,165 |  |  | Quarterly |  | 5.99 |  |  | 5.39 |
0-E |  | NATIXIS |  | France |  | US$ |  | 9,864 |  |  | 29,468 |  |  | 75,525 |  |  | 70,787 |  |  | 129,582 |  |  | 315,226 |  |  | 239,138 |  |  | Quarterly |  | 6.44 |  |  | 6.44 |
0-E |  | US BANK |  | U.S.A. |  | US$ |  | 18,072 |  |  | 54,088 |  |  | 86,076 |  |  | — |  |  | — |  |  | 158,236 |  |  | 152,693 |  |  | Quarterly |  | 4.06 |  |  | 2.85 |
0-E |  | PK AIRFINANCE |  | U.S.A. |  | US$ |  | 1,749 |  |  | 5,165 |  |  | 6,665 |  |  | — |  |  | — |  |  | 13,579 |  |  | 12,590 |  |  | Quarterly |  | 5.97 |  |  | 5.97 |
0-E |  | EXIM BANK |  | U.S.A. |  | US$ |  | 3,176 |  |  | 9,681 |  |  | 137,930 |  |  | 193,551 |  |  | 157,978 |  |  | 502,316 |  |  | 446,509 |  |  | Quarterly |  | 3.58 |  |  | 2.79 |
0-E |  | BANK OF UTAH |  | U.S.A. |  | US$ |  | 5,878 |  |  | 17,651 |  |  | 47,306 |  |  | 50,649 |  |  | 145,184 |  |  | 266,668 |  |  | 182,237 |  |  | Monthly |  | 10.45 |  |  | 10.45 |
Others loans
0-E |  | OTHERS (*) |  | Chile |  | US$ |  | 2,028 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 2,028 |  |  | 2,028 |  |  | At Expiration |  | — |  |  | — |
|  | TOTAL |  |  |  |  |  | 135,760 |  |  | 575,525 |  |  | 1,229,770 |  |  | 2,811,863 |  |  | 1,773,443 |  |  | 6,526,361 |  |  | 4,353,414 |  |  |  |  |  |  |
(*)Obligation with creditors for executed letters of credit. 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 |  | 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 |  | Nominal value |  | Amortization |  | Annual
|  |  |  |  |  |  |  |  |  |  |  | Effective rate |  | Nominal rate
|  |  |  |  |  |  |  | ThUS$ |  | ThUS$ |  | ThUS$ |  | ThUS$ |  | ThUS$ |  | ThUS$ |  | ThUS$ |  |  |  | % |  | %
Financial Leases
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 |  | Brazil |  | BRL |  | 304,549 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 304,549 |  |  | 304,549 |  |  | Monthly |  | 3.95 |  |  | 3.95 |
|  | TOTAL |  |  |  |  |  | 305,059 |  |  | 1,530 |  |  | 4,080 |  |  | 4,080 |  |  | 7,846 |  |  | 322,595 |  |  | 322,595 |  |  |  |  |  |  |
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 |  | Total |  | Nominal value |  | Amortization |  | Annual
|  |  |  |  |  |  |  |  |  |  |  | Effective rate |  | Nominal rate
|  |  |  |  |  |  |  | ThUS$ |  | ThUS$ |  | ThUS$ |  | ThUS$ |  | ThUS$ |  | ThUS$ |  | ThUS$ |  |  |  | % |  | %
Lease Liability
|  | AIRCRAFT |  | OTHERS |  | US$ |  | 80,602 |  |  | 250,297 |  |  | 845,215 |  |  | 776,431 |  |  | 1,094,935 |  |  | 3,047,480 |  |  | 2,134,968 |  |  | — |  |  | — |  |  | — |
|  | OTHER ASSETS |  | OTHERS |  | US$ |  | 1,727 |  |  | 8,080 |  |  | 20,641 |  |  | 6,251 |  |  | 1,763 |  |  | 38,462 |  |  | 35,157 |  |  | — |  |  | — |  |  | — |
|  |  |  |  |  | CLP |  | 20 |  |  | 34 |  |  | 69 |  |  | — |  |  | — |  |  | 123 |  |  | 111 |  |  | — |  |  | — |  |  | — |
|  |  |  |  |  | UF |  | 574 |  |  | 1,568 |  |  | 3,007 |  |  | 2,515 |  |  | 6,273 |  |  | 13,937 |  |  | 11,703 |  |  | — |  |  | — |  |  | — |
|  |  |  |  |  | COP |  | 76 |  |  | 227 |  |  | 301 |  |  | — |  |  | — |  |  | 604 |  |  | 518 |  |  | — |  |  | — |  |  | — |
|  |  |  |  |  | EUR |  | 84 |  |  | 253 |  |  | 246 |  |  | 24 |  |  | — |  |  | 607 |  |  | 571 |  |  | — |  |  | — |  |  | — |
|  |  |  |  |  | BRL |  | 2,064 |  |  | 6,192 |  |  | 14,851 |  |  | 12,491 |  |  | 28,625 |  |  | 64,223 |  |  | 33,425 |  |  | — |  |  | — |  |  | — |
Trade and other accounts payables
|  | OTHERS |  | OTHERS |  | US$ |  | 80,557 |  |  | 58,342 |  |  | — |  |  | — |  |  | — |  |  | 138,899 |  |  | 138,899 |  |  | — |  |  | — |  |  | — |
|  |  |  |  |  | CLP |  | 168,393 |  |  | 1,231 |  |  | — |  |  | — |  |  | — |  |  | 169,624 |  |  | 169,624 |  |  | — |  |  | — |  |  | — |
|  |  |  |  |  | BRL |  | 370,772 |  |  | 5,242 |  |  | — |  |  | — |  |  | — |  |  | 376,014 |  |  | 376,014 |  |  | — |  |  | — |  |  | — |
|  |  |  |  |  | Other currency |  | 583,118 |  |  | 3,935 |  |  | — |  |  | — |  |  | — |  |  | 587,053 |  |  | 587,053 |  |  | — |  |  | — |  |  | — |
Accounts payable to related parties currents
Foreign |  | Inversora Aeronáutica Argentina S.A. |  | Argentina |  | US$ |  | 5 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 5 |  |  | 5 |  |  | — |  |  | — |  |  | — |
Foreign |  | Patagonia Seafarms |  | U.S.A |  | US$ |  | 7 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 7 |  |  | 7 |  |  | — |  |  | — |  |  | — |
|  | Total |  |  |  |  |  | 1,287,999 |  |  | 335,401 |  |  | 884,330 |  |  | 797,712 |  |  | 1,131,596 |  |  | 4,437,038 |  |  | 3,488,055 |  |  |  |  |  |  |
|  | Total consolidated |  |  |  |  |  | 1,728,818 |  |  | 912,456 |  |  | 2,118,180 |  |  | 3,613,655 |  |  | 2,912,885 |  |  | 11,285,994 |  |  | 8,164,064 |  |  |  |  |  |  |
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, a rating of B in a positive outlook by Standard & Poor’s, and a rating of B1 by Moody's with stable outlook, either way as international scale. 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. 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 |  | Level I |  | Level II |  | Level III |  | Fair value |  | Level I |  | Level II |  | Level III
| ThUS$ |  | ThUS$ |  | ThUS$ |  | ThUS$ |  | ThUS$ |  | ThUS$ |  | ThUS$ |  | ThUS$
Assets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cash and cash equivalents | 89,706 |  |  | 89,706 |  |  | — |  |  | — |  |  | 95,452 |  |  | 95,452 |  |  | — |  |  | — |
Short-term mutual funds | 89,706 |  |  | 89,706 |  |  | — |  |  | — |  |  | 95,452 |  |  | 95,452 |  |  | — |  |  | — |
Other financial assets, current | 22,136 |  |  | — |  |  | 22,136 |  |  | — |  |  | 21,601 |  |  | — |  |  | 21,601 |  |  | — |
Fair value interest rate derivatives | — |  |  | — |  |  | — |  |  | — |  |  | 8,816 |  |  | — |  |  | 8,816 |  |  | — |
Fair value of fuel derivatives | 22,136 |  |  | — |  |  | 22,136 |  |  | — |  |  | 12,594 |  |  | — |  |  | 12,594 |  |  | — |
Fair value of foreign currency derivative | — |  |  | — |  |  | — |  |  | — |  |  | 191 |  |  | — |  |  | 191 |  |  | — |
Liabilities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Other financial liabilities, current | 1,544 |  |  | — |  |  | 1,544 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Fair value of foreign currency derivatives | 1,544 |  |  | — |  |  | 1,544 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
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:
| As of December 31, 2023 |  | As of December 31, 2022
| Book value |  | Fair value |  | Book value |  | Fair value
| ThUS$ |  | ThUS$ |  | ThUS$ |  | ThUS$
Cash and cash equivalents | 1,625,055 |  |  | 1,625,055 |  |  | 1,121,223 |  |  | 1,121,223 |
Cash on hand | 2,019 |  |  | 2,019 |  |  | 2,248 |  |  | 2,248 |
Bank balance | 552,187 |  |  | 552,187 |  |  | 480,566 |  |  | 480,566 |
Overnight | 75,236 |  |  | 75,236 |  |  | 259,129 |  |  | 259,129 |
Time deposits | 995,613 |  |  | 995,613 |  |  | 379,280 |  |  | 379,280 |
Other financial assets, current | 152,683 |  |  | 152,683 |  |  | 481,914 |  |  | 481,914 |
Other financial assets | 152,683 |  |  | 152,683 |  |  | 481,914 |  |  | 481,914 |
Trade debtors, other accounts receivable and Current accounts receivable | 1,385,910 |  |  | 1,385,910 |  |  | 1,008,109 |  |  | 1,008,109 |
Accounts receivable from entities related, current | 28 |  |  | 28 |  |  | 19,523 |  |  | 19,523 |
Other financial assets, non-current | 34,485 |  |  | 34,485 |  |  | 15,517 |  |  | 15,517 |
Accounts receivable, non-current | 12,949 |  |  | 12,949 |  |  | 12,743 |  |  | 12,743 |
Other current financial liabilities | 594,519 |  |  | 867,791 |  |  | 802,841 |  |  | 824,167 |
Accounts payable for trade and other accounts payable, current | 1,765,279 |  |  | 1,765,279 |  |  | 1,627,992 |  |  | 1,627,992 |
Accounts payable to entities related, current | 7,444 |  |  | 7,444 |  |  | 12 |  |  | 12 |
Other financial liabilities, non current | 6,341,669 |  |  | 6,174,294 |  |  | 5,979,039 |  |  | 5,533,131 |
Accounts payable, non current | 418,587 |  |  | 418,587 |  |  | 326,284 |  |  | 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.

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