LATAM Airlines Group reports consolidated financial statements

LATAM Airlines Group reported net income of US$21.3m in the third quarter 2012, excluding a one-time accounting charge of US$70.4m related to the publication of the law increasing the Chilean corporate income tax rate from 17% to 20%. This figure also excludes US$19.5m of transaction-related expenses resulting from the business combination between LAN and TAM S.A. (“TAM”) completed on June 22, 2012. Excluding these one-time items, operating income reached US$104.6m in the third quarter 2012, resulting in a 3.1% operating margin. The third quarter 2012 represents the first three months of the business combination between LAN and TAM. As such, LATAM Airlines Group began the integration of its business units and the transformation necessary to achieve the estimated merger synergies, implementing adjustments to commercial practices and aligning operations and processes in the international and domestic passenger operations in Brazil.
Total revenues in the third quarter 2012 reached US$3,344.9m compared to pro forma revenues of US$3,476.8m in the third quarter 2011. The decline of 3.8% is a result of a 2.4% decrease in passenger revenues and a 14.4% decrease in cargo revenues, partially offset by a 19.6% increase in other revenues. In addition to the challenges related to the transition to LATAM Airlines Group and to the turnaround of the Brazilian domestic operations, operating revenues this quarter reflect the negative impact of the depreciation of the Brazilian currency and continued weak market demand in the cargo business. Passenger and cargo revenues accounted for 84.2% and 13.4% of total revenues, respectively, during third quarter 2012.