NOTE 5 - SEGMENTAL INFORMATION
The Company has determined that it has two operating segments: the air transportation business and the coalition and loyalty program Multiplus.
The Air transport segment corresponds to the route network for air transport and it is based on the way that the business is run and managed, according to the centralized nature of its operations, the ability to open and close routes and reallocate resources (aircraft, crew, staff, etc..) within the network, which is a functional relationship between all of them, making them inseparable. This segment definition is the most common level used by the global airline industry.
The segment of loyalty coalition called Multiplus, unlike LATAM Pass and LATAM Fidelidade, is a frequent flyer programs which operate as a unilateral system of loyalty that offers a flexible coalition system, interrelated among its members, with 19.4 million of members, along with being a regulated entity with a separately business and not directly related to air transport.
For the periods ended
| Coalition and | ||||||||||||||||||||||||||||||||||||||||||||||||
| Air | loyalty program | |||||||||||||||||||||||||||||||||||||||||||||||
| transportation | Multiplus | Eliminations | Consolidated | |||||||||||||||||||||||||||||||||||||||||||||
| At December 31, | At December 31, | At December 31, | At December 31, | |||||||||||||||||||||||||||||||||||||||||||||
| 2017 | 2016 | 2015 | 2017 | 2016 | 2015 | 2017 | 2016 | 2015 | 2017 | 2016 | 2015 | |||||||||||||||||||||||||||||||||||||
| ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | |||||||||||||||||||||||||||||||||||||
| Income from ordinary activities from external customers (*) | 9,159,031 | 8,587,772 | 9,278,041 | 454,876 | 400,568 | 462,004 | - | - | - | 9,613,907 | 8,988,340 | 9,740,045 | ||||||||||||||||||||||||||||||||||||
| LAN passenger | 4,313,287 | 4,104,348 | 4,241,918 | - | - | - | - | - | - | 4,313,287 | 4,104,348 | 4,241,918 | ||||||||||||||||||||||||||||||||||||
| TAM passenger | 3,726,314 | 3,372,799 | 3,706,692 | 454,876 | 400,568 | 462,004 | - | - | - | 4,181,190 | 3,773,367 | 4,168,696 | ||||||||||||||||||||||||||||||||||||
| Freight | 1,119,430 | 1,110,625 | 1,329,431 | - | - | - | - | - | - | 1,119,430 | 1,110,625 | 1,329,431 | ||||||||||||||||||||||||||||||||||||
| Income from ordinary activities from transactions with other operating segments | 454,876 | 400,568 | 462,004 | 67,554 | 65,969 | 67,826 | (522,430 | ) | (466,537 | ) | (529,830 | ) | - | - | ||||||||||||||||||||||||||||||||||
| Other operating income | 308,937 | 364,551 | 230,823 | 240,952 | 174,197 | 154,958 | - | - | - | 549,889 | 538,748 | 385,781 | ||||||||||||||||||||||||||||||||||||
| Interest income | 28,184 | 27,287 | 21,818 | 50,511 | 58,380 | 63,647 | (10,718 | ) | (10,385 | ) | 78,695 | 74,949 | 75,080 | |||||||||||||||||||||||||||||||||||
| Interest expense | (393,286 | ) | (427,054 | ) | (423,742 | ) | - | - | - | 10,718 | 10,385 | (393,286 | ) | (416,336 | ) | (413,357 | ) | |||||||||||||||||||||||||||||||
| Total net interest expense | (365,102 | ) | (399,767 | ) | (401,924 | ) | 50,511 | 58,380 | 63,647 | - | - | - | (314,591 | ) | (341,387 | ) | (338,277 | ) | ||||||||||||||||||||||||||||||
| Depreciation and amortization | (994,416 | ) | (952,285 | ) | (923,311 | ) | (7,209 | ) | (8,043 | ) | (11,095 | ) | - | - | - | (1,001,625 | ) | (960,328 | ) | (934,406 | ) | |||||||||||||||||||||||||||
| Material non-cash items other than depreciation and amortization | (75,479 | ) | 10,069 | (507,921 | ) | (145 | ) | (991 | ) | 1,893 | - | - | - | (75,624 | ) | 9,078 | (506,028 | ) | ||||||||||||||||||||||||||||||
| Disposal of fixed assets and inventory losses | (39,238 | ) | (82,734 | ) | (20,932 | ) | - | - | - | - | - | - | (39,238 | ) | (82,734 | ) | (20,932 | ) | ||||||||||||||||||||||||||||||
| Doubtful accounts | (18,272 | ) | (29,674 | ) | (18,292 | ) | (144 | ) | (476 | ) | 611 | - | - | - | (18,416 | ) | (30,150 | ) | (17,681 | ) | ||||||||||||||||||||||||||||
| Exchange differences | (18,717 | ) | 122,129 | (469,178 | ) | (1 | ) | (478 | ) | 1,282 | - | - | - | (18,718 | ) | 121,651 | (467,896 | ) | ||||||||||||||||||||||||||||||
| Result of indexation units | 748 | 348 | 481 | - | (37 | ) | - | - | - | - | 748 | 311 | 481 | |||||||||||||||||||||||||||||||||||
| Income (loss) atributable to owners of the parents | (3,482 | ) | (83,653 | ) | (356,039 | ) | 158,783 | 152,873 | 136,765 | - | - | - | 155,301 | 69,220 | (219,274 | ) | ||||||||||||||||||||||||||||||||
| Participation of the entity in the income of associates | - | - | 37 | - | - | - | - | - | - | - | - | 37 | ||||||||||||||||||||||||||||||||||||
| Expenses for income tax | (104,376 | ) | (92,476 | ) | 249,090 | (69,128 | ) | (70,728 | ) | (70,707 | ) | - | - | - | (173,504 | ) | (163,204 | ) | 178,383 | |||||||||||||||||||||||||||||
| Segment profit / (loss) | 41,931 | (42,203 | ) | (315,497 | ) | 158,783 | 152,873 | 136,765 | - | - | - | 200,714 | 110,670 | (178,732 | ) | |||||||||||||||||||||||||||||||||
| Assets of segment | 17,430,937 | 17,805,749 | 16,924,200 | 1,373,049 | 1,400,432 | 1,182,111 | (6,014 | ) | (7,987 | ) | (4,893 | ) | 18,797,972 | 19,198,194 | 18,101,418 | |||||||||||||||||||||||||||||||||
| Segment liabilities | 14,007,916 | 14,469,505 | 14,700,072 | 563,849 | 572,065 | 490,076 | (41,029 | ) | (28,680 | ) | (26,278 | ) | 14,530,736 | 15,012,890 | 15,163,870 | |||||||||||||||||||||||||||||||||
| Amount of non-current asset additions | 412,846 | 1,481,090 | 1,492,281 | - | - | - | - | - | - | 412,846 | 1,481,090 | 1,492,281 | ||||||||||||||||||||||||||||||||||||
| Property, plant and equipment | 325,513 | 1,390,730 | 1,439,057 | - | - | - | - | - | - | 325,513 | 1,390,730 | 1,439,057 | ||||||||||||||||||||||||||||||||||||
| Intangibles other than goodwill | 87,333 | 90,360 | 53,224 | - | - | - | - | - | - | 87,333 | 90,360 | 53,224 | ||||||||||||||||||||||||||||||||||||
| Purchase of non-monetary assets of segment | 490,983 | 782,957 | 1,622,198 | - | - | - | - | - | - | 490,983 | 782,957 | 1,622,198 | ||||||||||||||||||||||||||||||||||||
(*) The Company does not have any interest revenue that should be recognized as income from ordinary activities by interest.
For the periods ended
| Coalition and | ||||||||||||||||||||||||||||||||||||||||||||||||
| Air | loyalty program | |||||||||||||||||||||||||||||||||||||||||||||||
| transportation | Multiplus | Eliminations | Consolidated | |||||||||||||||||||||||||||||||||||||||||||||
| At December 31, | At December 31, | At December 31, | At December 31, | |||||||||||||||||||||||||||||||||||||||||||||
| 2017 | 2016 | 2015 | 2017 | 2016 | 2015 | 2017 | 2016 | 2015 | 2017 | 2016 | 2015 | |||||||||||||||||||||||||||||||||||||
| ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | ThUS$ | |||||||||||||||||||||||||||||||||||||
| Net cash flows from | ||||||||||||||||||||||||||||||||||||||||||||||||
| Purchases of property, plant and equipment | 403,282 | 693,581 | 691,930 | 384 | 789 | 2,440 | - | - | - | 403,666 | 694,370 | 694,370 | ||||||||||||||||||||||||||||||||||||
| Additions associated with maintenance | 218,537 | 197,866 | 230,526 | - | - | - | - | - | - | 218,537 | 197,866 | 230,526 | ||||||||||||||||||||||||||||||||||||
| Other additions | 184,745 | 495,715 | 461,404 | 384 | 789 | 2,440 | - | - | - | 185,129 | 496,504 | 463,844 | ||||||||||||||||||||||||||||||||||||
| Purchases of intangible assets | 79,102 | 84,377 | 41,399 | 8,216 | 4,210 | 11,050 | - | - | - | 87,318 | 88,587 | 52,449 | ||||||||||||||||||||||||||||||||||||
| Net cash flows from (used in) operating activities | 1,489,797 | 827,108 | 1,531,395 | 186,367 | 154,411 | 147,348 | (9,424 | ) | (635 | ) | (6,642 | ) | 1,666,740 | 980,884 | 1,672,101 | |||||||||||||||||||||||||||||||||
| Net cash flow from (used in) investing activities | (278,790 | ) | (426,989 | ) | (1,679,272 | ) | (8,632 | ) | (4,800 | ) | (16,423 | ) | - | - | - | (287,422 | ) | (431,789 | ) | (1,695,695 | ) | |||||||||||||||||||||||||||
| Net cash flows from (used in) financing activities | (1,010,705 | ) | (246,907 | ) | (4,708 | ) | (168,383 | ) | (149,372 | ) | (123,652 | ) | - | - | - | (1,179,088 | ) | (396,279 | ) | (128,360 | ) | |||||||||||||||||||||||||||
(**) The company does not have the cash flows of intangible asset acquisitions associated with maintenance.
The Company’s revenues by geographic area are as follows:
| For the period ended | ||||||||||||
| At December 31, | ||||||||||||
| 2017 | 2016 | 2015 | ||||||||||
| ThUS$ | ThUS$ | ThUS$ | ||||||||||
| Peru | 626,316 | 627,215 | 681,340 | |||||||||
| Argentina | 1,113,467 | 1,030,973 | 979,324 | |||||||||
| U.S.A. | 900,413 | 933,130 | 1,025,475 | |||||||||
| Europe | 676,282 | 714,436 | 723,062 | |||||||||
| Colombia | 359,276 | 343,001 | 353,007 | |||||||||
| Brazil | 3,436,402 | 2,974,234 | 3,464,297 | |||||||||
| Ecuador | 190,268 | 198,171 | 238,500 | |||||||||
| Chile | 1,527,158 | 1,512,570 | 1,575,519 | |||||||||
| Asia Pacific and rest of Latin America | 784,325 | 654,610 | 699,521 | |||||||||
| Income from ordinary activities | 9,613,907 | 8,988,340 | 9,740,045 | |||||||||
| Other operating income | 549,889 | 538,748 | 385,781 | |||||||||
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.