LATAM AIRLINES GROUP S.A. | CIK:0001047716 |

Filed: 4/5/2018

Entity registrant name: LATAM AIRLINES GROUP S.A. (CIK: 0001047716)

Generator: S2 Filings

SEC filing page: http://www.sec.gov/Archives/edgar/data/1047716/000161577418002424/0001615774-18-002424-index.htm

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ifrs-full:DisclosureOfOtherLiabilitiesExplanatory

NOTE 19 - OTHER FINANCIAL LIABILITIES

The composition of other financial liabilities is as follows:

	As of		As of
	December 31,		December 31,
	2017		2016
	ThUS$		ThUS$
Current
(a) Interest bearing loans		1,288,749		1,814,647
(b) Hedge derivatives		12,200		24,881
Total current		1,300,949		1,839,528

Non-current
(a) Interest bearing loans		6,602,891		6,790,273
(b) Hedge derivatives		2,617		6,679
Total non-current		6,605,508		6,796,952

(a)	Interest bearing loans

Obligations with credit institutions and debt instruments:

	As of		As of
	December 31,		December 31,
	2017		2016
	ThUS$		ThUS$
Current
Loans to exporters		314,618		278,164
Bank loans (1)		59,017		290,810
Guaranteed obligations		531,173		578,014
Other guaranteed obligations		2,170		1,908
Subtotal bank loans		906,978		1,148,896

Obligation with the public (2)		14,785		312,043
Financial leases		276,541		268,040
Other loans		90,445		85,668
Total current		1,288,749		1,814,647

	As of		As of
	December 31,		December 31,
	2017		2016
	ThUS$		ThUS$
Non-current
Bank loans		260,433		294,477
Guaranteed obligations (3)		3,505,669		4,180,538
Other guaranteed obligations		240,007		254,512
Subtotal bank loans		4,006,109		4,729,527

Obligation with the public (4) (5) (6)		1,569,281		997,302
Financial leases		832,964		754,321
Other loans		194,537		309,123
Total non-current		6,602,891		6,790,273
Total obligations with financial institutions		7,891,640		8,604,920

(1) On September 29, 2016 TAM Linhas Aéreas S.A. obtained financing for US$ 200 million, guaranteed with 18% of the shares of Multiplus S.A., percentage adjustable depending on the shares price. Additionally, TAM obtained a hedging economic (Cross Currency Swap) for the same amount and period, in order to convert the commitment currency from US$ to BRL.

On March 30, 2017, TAM Linhas Aéreas S.A. restructured the financing mentioned in the previous paragraph, modifying the nominal amount of the transaction to US $ 137 million.

On September 27, 2017, TAM Linhas Aéreas S.A. made the payment of capital plus interest corresponding to the last installment of the financing described above. Simultaneously, all the garments were lifted on the shares of Multiplus S.A. delivered as collateral.

(2) On April 25, 2017, the payment of the principal plus interest on the long-term bonds issued by the company TAM Capital Inc. for an amount of US$ 300,000,000 at an interest rate of 7.375% annual. The payment consisted of 100% of the capital, US$ 300,000,000, and interest accrued as of the date of payment for ThUS $ 11,063.

(3) On April 10, 2017, the issuance and private placement of debt securities in the amount of US$ 140,000,000 was made under the current structure of the Enhanced Equipment Trust Certificates ("EETC") issued and placed the year 2015 to finance the acquisition of eleven Airbus A321-200, two Airbus A350-900 and four Boeing 787-9 with arrivals between July 2015 and April 2016. The offer is made up of Class C Certificates, which are subordinate to the Current Class A Certificates and Class B Certificates held by the Company. The term of the Class C Certificates is six years and expires in 2023.

(4) On April 11, 2017, LATAM Finance Limited, a company incorporated in the Cayman Islands with limited liability and exclusively owned by LATAM Airlines Group SA, has issued and placed on the international market, pursuant to Rule 144 -A and Regulation S of the securities laws of the United States of America, long-term unsecured bonds in the amount of US$ 700,000,000, maturing in 2024 at an annual interest rate of 6.875%.

As reported in the essential fact of April 6, 2017, the Issue and placement of the 144-A Bonds was intended to finance general corporate purposes of LATAM.

(5) On August 17, 2017, LATAM made the placement in the local market (Santiago Stock Exchange) of the Series A Bonds (BLATM-A), Series B (BLATM-B), Series C (BLATM-) C) and Series D (BLATM-D), which correspond to the first issue of bonds charged to the line inscribed in the Securities Registry of the Commission for the Financial Market (“CMF”), under number 862 for a total of UF 9,000,000.

The total amount placed of the Series A Bond was UF 2,500,000; The total amount placed of the Series B Bond was UF 2,500,000. The total amount placed of the Series C Bond was UF 1,850,000. The total amount placed of the Series D Bond was UF 1,850,000, thus totaling UF 8,700,000.

The Series A Bonds have an expiration date on June 1, 2022 and an annual interest rate of 5.25%. The Series B Bonds have an expiration date on January 1, 2028 and an annual interest rate of 5.75%. The Series C Bonds have an expiration date on June 1, 2022 and an annual interest rate of 5.25%. The Series D Bonds have an expiration date on January 1, 2028 and an annual interest rate of 5.75%.

The proceeds of the placement of the Series A, Series B, Series C and Series D Bonds were allocated in full to the partial financing of the early redemption of the total bonds of TAM Capital 3 inc.

(6) On September 1, 2017, TAM Capital 3 Inc., a company controlled indirectly by TAM S.A. through its subsidiary TAM Linhas Aéreas SA, which consolidates its financial statements with LATAM, made the full advance redemption of the bonds it placed abroad on June 3, 2011, for an amount of US $ 500 million at a 8.375% rate and with an expiration date on June 3, 2021. The total redemption was partially financed with the placement of bonds in the local market described in number (5) above, and the balance, with other funds available from the Company.

All interest-bearing liabilities are recorded according to the effective rate method. Under IFRS, in the case of fixed rate loans, the effective rate determined does not vary over the duration of the loan, whereas in variable rate loans, the effective rate changes to the date of each payment of interest.

Currency balances that make the interest bearing loans:

	As of		As of
	December 31,		December 31,
	2017		2016
	ThUS$		ThUS$
Currency

Brazilian real		130		1,253
Chilean peso (U.F.)		521,122		203,194
US Dollar		7,370,388		8,400,473

Total		7,891,640		8,604,920

Interest-bearing loans due in installments to December 31, 2017

Debtor: LATAM Airlines Group S.A. and Subsidiaries, Tax No. 89.862.200-2, Chile.

				Nominal values												Accounting values
						More than		More than		More than								More than		More than		More than
				Up to		90 days		one to		three to		More than		Total		Up to		90 days		one to		three to		More than		Total
		Creditor		90		to one		three		five		five		nominal		90		to one		three		five		five		accounting			Effective		Nominal
Tax No.	Creditor	country	Currency	days		year		years		years		years		value		days		year		years		years		years		value		Amortization	rate		rate
				ThUS$		ThUS$		ThUS$		ThUS$		ThUS$		ThUS$		ThUS$		ThUS$		ThUS$		ThUS$		ThUS$		ThUS$			%		%

Loans to exporters

97.032.000-8	BBVA	Chile	ThUS$		75,000		-		-		-		-		75,000		75,781		-		-		-		-		75,781	At Expiration		2.30		2.30
97.032.000-8	BBVA	Chile	UF		-		55,801		-		-		-		55,801		-		55,934		-		-		-		55,934	At Expiration		3.57		2.77
97.036.000-K	SANTANDER	Chile	ThUS$		30,000		-		-		-		-		30,000		30,129		-		-		-		-		30,129	At Expiration		2.49		2.49
97.030.000-7	ESTADO	Chile	ThUS$		40,000		-		-		-		-		40,000		40,071		-		-		-		-		40,071	At Expiration		2.57		2.57
97.003.000-K	BANCO DO BRASIL	Chile	ThUS$		100,000		-		-		-		-		100,000		100,696		-		-		-		-		100,696	At Expiration		2.40		2.40
97.951.000-4	HSBC	Chile	ThUS$		12,000		-		-		-		-		12,000		12,007		-		-		-		-		12,007	At Expiration		2.03		2.03

Bank loans

97.023.000-9	CORPBANCA	Chile	UF		21,298		21,360		42,006		-		-		84,664		21,542		21,360		41,548		-		-		84,450	Quarterly		3.68		3.68
0-E	BLADEX	U.S.A.	ThUS$		-		15,000		15,000		-		-		30,000		-		15,133		14,750		-		-		29,883	Semiannual		5.51		5.51
97.036.000-K	SANTANDER	Chile	ThUS$		-		-		202,284		-		-		202,284		439		-		202,284		-		-		202,723	Quarterly		4.41		4.41

Obligations with the public
0-E	BANK OF NEW YORK	U.S.A.	ThUS$		-		-		500,000		-		700,000		1,200,000		-		13,047		492,745		-		697,536		1,203,328	At Expiration		7.44		7.03
97.030.000-7	ESTADO	Chile	UF		-		-		-		189,637		189,637		379,274		-		1,738				189,500		189,500		380,738	At Expiration		5.50		5.50

Guaranteed obligations

0-E	CREDIT AGRICOLE	France	ThUS$		7,767		23,840		54,074		12,410		-		98,091		8,101		23,840		52,924		12,026		-		96,891	Quarterly		2.66		2.22
0-E	BNP PARIBAS	U.S.A.	ThUS$		10,929		44,145		114,800		119,948		285,399		575,221		13,328		44,781		111,319		117,987		282,714		570,129	Quarterly		3.41		3.40
0-E	WELLS FARGO	U.S.A.	ThUS$		27,223		82,402		225,221		233,425		240,716		808,987		30,143		82,402		203,371		224,295		236,179		776,390	Quarterly		2.46		1.75
0-E	WILMINGTON TRUST	U.S.A.	ThUS$		20,427		61,669		175,334		183,332		594,091		1,034,853		26,614		61,669		169,506		180,520		590,723		1,029,032	Quarterly		4.48		4.48
0-E	CITIBANK	U.S.A.	ThUS$		11,994		36,501		101,230		104,308		97,184		351,217		13,231		36,501		95,208		101,558		94,807		341,305	Quarterly		3.31		2.47
0-E	BTMU	U.S.A.	ThUS$		2,856		8,689		24,007		25,278		13,904		74,734		3,082		8,689		22,955		24,941		13,849		73,516	Quarterly		2.87		2.27
0-E	APPLE BANK	U.S.A.	ThUS$		1,401		4,278		11,828		12,474		7,242		37,223		1,583		4,278		11,303		12,303		7,212		36,679	Quarterly		2.78		2.18
0-E	US BANK	U.S.A.	ThUS$		15,157		45,992		126,550		132,441		152,693		472,833		17,364		45,992		109,705		125,006		148,318		446,385	Quarterly		4.00		2.82
0-E	DEUTSCHE BANK	U.S.A.	ThUS$		2,965		9,127		25,826		28,202		30,786		96,906		3,534		9,127		25,130		27,739		30,323		95,853	Quarterly		4.39		4.39
0-E	NATIXIS	France	ThUS$		14,645		44,627		107,068		91,823		154,848		413,011		15,642		44,627		105,056		90,823		153,124		409,272	Quarterly		3.42		3.40
0-E	PK AIRFINANCE	U.S.A.	ThUS$		2,163		6,722		19,744		17,871		-		46,500		2,225		6,722		19,744		17,871		-		46,562	Monthly		3.18		3.18
0-E	KFW IPEX-BANK	Germany	ThUS$		2,397		6,678		16,173		1,640		-		26,888		2,428		6,677		16,174		1,640		-		26,919	Quarterly		3.31		3.31
0-E	AIRBUS FINANCIAL	U.S.A.	ThUS$		1,855		5,654		15,416		-		-		22,925		1,900		5,654		15,416		-		-		22,970	Monthly		3.19		3.19
0-E	INVESTEC	England	ThUS$		1,374		7,990		20,440		22,977		10,597		63,378		1,808		8,181		19,801		22,769		10,565		63,124	Semiannual		6.04		6.04
-	SWAP Aviones llegados	-	ThUS$		301		749		765		-		-		1,815		301		749		765		-		-		1,815	Quarterly				-

Other guaranteed obligations

0-E	CREDIT AGRICOLE	France	ThUS$		-		-		241,287		-		-		241,287		2,170		-		240,007		-		-		242,177	At Expiration		3.38		3.38

Financial leases

0-E	ING	U.S.A.	ThUS$		5,347		10,779		26,831		-		-		42,957		5,717		10,779		26,500		-		-		42,996	Quarterly		5.67		5.00
0-E	CITIBANK	U.S.A.	ThUS$		11,206		34,267		86,085		49,853		2,863		184,274		12,013		34,267		84,104		49,516		2,859		182,759	Quarterly		3.78		3.17
0-E	PEFCO	U.S.A.	ThUS$		12,526		32,850		22,407		-		-		67,783		12,956		32,850		22,088		-		-		67,894	Quarterly		5.46		4.85
0-E	BNP PARIBAS	U.S.A.	ThUS$		13,146		33,840		48,823		2,296		-		98,105		13,548		33,840		48,253		2,293		-		97,934	Quarterly		3.66		3.25
0-E	WELLS FARGO	U.S.A.	ThUS$		10,630		33,866		91,162		64,471		20,984		221,113		11,460		33,866		88,674		63,860		20,903		218,763	Quarterly		3.17		2.67
97.036.000-K	SANTANDER	Chile	ThUS$		5,459		16,542		45,416		46,472		3,134		117,023		5,813		16,542		44,010		46,153		3,128		115,646	Quarterly		2.51		1.96
0-E	RRPF ENGINE	England	ThUS$		265		2,430		6,856		7,441		8,991		25,983		265		2,430		6,856		7,441		8,991		25,983	Monthly		4.01		4.01

Other loans

0-E	CITIBANK (*)	U.S.A.	ThUS$		21,822		67,859		196,210		-		-		285,891		22,586		67,859		194,537		-		-		284,982	Quarterly		6.00		6.00

	Total				482,153		713,657		2,562,843		1,346,299		2,513,069		7,618,021		508,477		729,534		2,484,733		1,318,241		2,490,731		7,531,716

(*) Bonus securitized with the future flows of credit card sales in the United States and Canada.

Interest-bearing loans due in installments to December 31, 2017

Debtor: TAM S.A. and Subsidiaries, Tax No. 02.012.862/0001-60, Brazil.

				Nominal values												Accounting values
						More than		More than		More than								More than		More than		More than
				Up to		90 days		one to		three to		More than		Total		Up to		90 days		one to		three to		More than		Total
		Creditor		90		to one		three		five		five		nominal		90		to one		three		five		five		accounting			Effective		Nominal
Tax No.	Creditor	country	Currency	days		year		years		years		years		value		days		year		years		years		years		value		Amortization	rate		rate
				ThUS$		ThUS$		ThUS$		ThUS$		ThUS$		ThUS$		ThUS$		ThUS$		ThUS$		ThUS$		ThUS$		ThUS$			%		%

Bank loans

0-E	NEDERLANDSCHE
	CREDIETVERZEKERING MAATSCHAPPIJ	Holland	ThUS$		130		401		1,161		690		-		2,382		142		401		1,161		690		-		2,394	Monthly		6.01		6.01

Financial leases

0-E	NATIXIS	France	ThUS$		2,853		6,099		19,682		70,402		-		99,036		3,592		6,099		19,682		70,402		-		99,775	Quarterly/Semiannual		5.59		5.59
0-E	WACAPOU LEASING S.A.	Luxemburg	ThUS$		696		2,125		6,020		3,206		-		12,047		732		2,125		6,020		3,207		-		12,084	Quarterly		3.69		3.69
0-E	SOCIÉTÉ GÉNÉRALE MILAN BRANCH	Italy	ThUS$		8,964		27,525		208,024		-		-		244,513		9,992		27,525		208,024		-		-		245,541	Quarterly		4.87		4.81
0-E	BANCO IBM S.A	Brazil	BRL		21		-		-		-		-		21		21		-		-		-		-		21	Monthly		6.89		6.89
0-E	SOCIETE GENERALE	France	BRL		101		8		-		-		-		109		101		8		-		-		-		109	Monthly		6.89		6.89

	Total				12,765		36,158		234,887		74,298		-		358,108		14,580		36,158		234,887		74,299		-		359,924

	Total consolidated				494,918		749,815		2,797,730		1,420,597		2,513,069		7,976,129		523,057		765,692		2,719,620		1,392,540		2,490,731		7,891,640

Interest-bearing loans due in installments to December 31, 2016

Debtor: LATAM Airlines Group S.A. and Subsidiaries, Tax No. 89.862.200-2, Chile.

				Nominal values												Accounting values
						More than		More than		More than								More than		More than		More than
				Up to		90 days		one to		three to		More than		Total		Up to		90 days		one to		three to		More than		Total
		Creditor		90		to one		three		five		five		nominal		90		to one		three		five		five		accounting			Effective		Nominal
Tax No.	Creditor	country	Currency	days		year		years		years		years		value		days		year		years		years		years		value		Amortization	rate		rate
				ThUS$		ThUS$		ThUS$		ThUS$		ThUS$		ThUS$		ThUS$		ThUS$		ThUS$		ThUS$		ThUS$		ThUS$			%		%

Loans to exporters

97.032.000-8	BBVA	Chile	ThUS$		75,000		-		-		-		-		75,000		75,234		-		-		-		-		75,234	At Expiration		1.85		1.85
97.032.000-8	BBVA	Chile	UF		-		50,381		-		-		-		50,381		-		50,324		-		-		-		50,324	At Expiration		5.23		4.43
97.036.000-K	SANTANDER	Chile	ThUS$		30,000		-		-		-		-		30,000		30,183		-		-		-		-		30,183	At Expiration		2.39		2.39
97.030.000-7	ESTADO	Chile	ThUS$		40,000		-		-		-		-		40,000		40,098		-		-		-		-		40,098	At Expiration		1.91		1.91
97.003.000-K	BANCO DO BRASIL	Chile	ThUS$		70,000		-		-		-		-		70,000		70,323		-		-		-		-		70,323	At Expiration		3.08		3.08
97.951.000-4	HSBC	Chile	ThUS$		12,000		-		-		-		-		12,000		12,002		-		-		-		-		12,002	At Expiration		1.79		1.79

Bank loans

97.023.000-9	CORPBANCA	Chile	UF		19,229		57,686		60,186		16,254		-		153,355		19,819		57,686		59,176		16,189		-		152,870	Quarterly		4.06		4.06
0-E	BLADEX	U.S.A.	ThUS$		-		12,500		30,000		-		-		42,500		-		12,667		29,625		-		-		42,292	Semiannual		5.14		5.14
0-E	DVB BANK SE	U.S.A.	ThUS$		-		-		28,911		-		-		28,911		3		-		28,911		-		-		28,914	Quarterly		1.86		1.86
97.036.000-K	SANTANDER	Chile	ThUS$		-		-		158,194		-		-		158,194		542		-		158,194		-		-		158,736	Quarterly		3.55		3.55

Obligations with the public
0-E	BANK OF NEW YORK	U.S.A.	ThUS$		-		-		-		500,000		-		500,000		2,291		-		-		489,885		-		492,176	At Expiration		7.77		7.25

Guaranteed obligations

0-E	CREDIT AGRICOLE	France	ThUS$		11,073		29,252		62,209		32,172		3,711		138,417		11,454		29,252		60,781		31,221		3,631		136,339	Quarterly		2.21		1.81
0-E	BNP PARIBAS	U.S.A.	ThUS$		10,496		42,401		111,962		118,181		345,078		628,118		12,792		43,023		108,271		116,067		341,481		621,634	Quarterly		2.97		2.96
0-E	WELLS FARGO	U.S.A.	ThUS$		31,448		95,186		260,112		269,512		400,087		1,056,345		35,211		95,186		233,012		257,387		391,253		1,012,049	Quarterly		2.37		1.68
0-E	WILMINGTON TRUST	U.S.A.	ThUS$		15,554		49,236		135,254		140,848		626,444		967,336		20,997		49,236		130,792		138,455		622,153		961,633	Quarterly		4.25		4.25
0-E	CITIBANK	U.S.A.	ThUS$		17,495		53,162		146,932		154,774		175,805		548,168		19,059		53,162		138,257		150,891		172,087		533,456	Quarterly		2.72		1.96
97.036.000-K	SANTANDER	Chile	ThUS$		5,347		16,204		44,472		46,386		26,165		138,574		5,680		16,204		42,707		45,815		26,063		136,469	Quarterly		1.98		1.44
0-E	BTMU	U.S.A.	ThUS$		2,787		8,470		23,393		24,635		26,705		85,990		3,001		8,470		22,132		24,149		26,519		84,271	Quarterly		2.31		1.72
0-E	APPLE BANK	U.S.A.	ThUS$		1,364		4,167		11,516		12,146		13,561		42,754		1,538		4,166		10,889		11,902		13,464		41,959	Quarterly		2.29		1.69
0-E	US BANK	U.S.A.	ThUS$		14,817		44,958		123,705		129,462		219,666		532,608		17,298		44,958		104,709		120,509		211,895		499,369	Quarterly		3.99		2.81
0-E	DEUTSCHE BANK	U.S.A.	ThUS$		4,992		15,365		24,725		26,984		45,197		117,263		5,570		15,365		24,023		26,515		44,522		115,995	Quarterly		3.86		3.86
0-E	NATIXIS	France	ThUS$		12,289		37,388		98,873		82,066		192,235		422,851		13,038		37,388		97,469		81,130		190,048		419,073	Quarterly		2.60		2.57
0-E	PK AIRFINANCE	U.S.A.	ThUS$		2,018		6,268		18,413		24,944		3,144		54,787		2,071		6,269		18,412		24,944		3,144		54,840	Monthly		2.40		2.40
0-E	KFW IPEX-BANK	Germany	ThUS$		2,288		7,015		17,869		9,019		-		36,191		2,319		7,015		17,869		9,019		-		36,222	Quarterly		2.55		2.55
0-E	AIRBUS FINANCIAL	U.S.A.	ThUS$		1,797		5,476		15,262		7,664		-		30,199		1,841		5,477		15,261		7,664		-		30,243	Monthly		2.49		2.49
0-E	INVESTEC	England	ThUS$		1,298		7,526		19,290		21,667		22,421		72,202		1,771		7,733		18,533		21,368		22,309		71,714	Semiannual		5.67		5.67
-	SWAP Aviones llegados	-	ThUS$		403		1,067		1,658		158		-		3,286		403		1,067		1,658		158		-		3,286	Quarterly		-		-

Other guaranteed obligations

0-E	CREDIT AGRICOLE	France	ThUS$		-		-		256,860		-		-		256,860		1,908		-		254,512		-		-		256,420	Quarterly		2.85		2.85

Financial leases

0-E	ING	U.S.A.	ThUS$		5,089		15,653		31,151		11,805		-		63,698		5,641		15,652		30,577		11,771		-		63,641	Quarterly		5.62		4.96
0-E	CREDIT AGRICOLE	France	ThUS$		1,754		5,403		-		-		-		7,157		1,780		5,403		-		-		-		7,183	Quarterly		1.85		1.85
0-E	CITIBANK	U.S.A.	ThUS$		4,956		15,312		44,177		13,804		-		78,249		5,622		15,312		43,413		13,762		-		78,109	Quarterly		6.40		5.67
0-E	PEFCO	U.S.A.	ThUS$		15,979		47,048		63,957		3,827		-		130,811		16,852		47,048		63,072		3,819		-		130,791	Quarterly		5.39		4.79
0-E	BNP PARIBAS	U.S.A.	ThUS$		12,520		38,494		75,958		22,147		-		149,119		13,122		38,494		74,776		22,079		-		148,471	Quarterly		3.69		3.26
0-E	WELLS FARGO	U.S.A.	ThUS$		4,678		14,261		39,862		42,663		1,862		103,326		5,018		14,260		38,834		42,430		1,861		102,403	Quarterly		3.98		3.54
0-E	DVB BANK SE	U.S.A.	ThUS$		4,680		9,447		-		-		-		14,127		4,713		9,448		-		-		-		14,161	Quarterly		2.57		2.57
0-E	RRPF ENGINE	England	ThUS$		-		-		6,402		6,955		11,917		25,274		-		-		6,402		6,955		11,917		25,274	Monthly		2.35		2.35

Other loans

0-E	BOEING	U.S.A.	ThUS$		-		-		26,214		-		-		26,214		185		-		26,214		-		-		26,399	At Expiration		2.35		2.35
0-E	CITIBANK (*)	U.S.A.	ThUS$		20,555		63,942		184,866		101,026		-		370,389		21,541		63,942		182,043		100,866		-		368,392	Quarterly		6.00		6.00

	Total				451,906		753,268		2,122,383		1,819,099		2,113,998		7,260,654		480,920		754,207		2,040,524		1,774,950		2,082,347		7,132,948

(*) Securitized bond with the future flows from the sales with credit card in United States and Canada.

Interest-bearing loans due in installments to December 31, 2016

Debtor: TAM S.A. and Subsidiaries, Tax No. 02.012.862/0001-60, Brazil.

						Nominal values													Accounting values
						More than		More than		More than									More than		More than		More than
				Up to		90 days		one to		three to		More than		Total		Up to			90 days		one to		three to		More than		Total
		Creditor		90		to one		three		five		five		nominal		90			to one		three		five		five		accounting			Effective		Nominal
Tax No.	Creditor	country	Currency	days		year		years		years		years		value		days			year		years		years		years		value		Amortization	rate		rate
				ThUS$		ThUS$		ThUS$		ThUS$		ThUS$		ThUS$		ThUS$			ThUS$		ThUS$		ThUS$		ThUS$		ThUS$			%		%

Bank loans

0-E	NEDERLANDSCHE
	CREDIETVERZEKERING MAATSCHAPPIJ	Holland	ThUS$		122		378		1,094		1,234		54		2,882		137			378		1,094		1,233		55		2,897	Monthly		6.01		6.01
0-E	CITIBANK	U.S.A	ThUS$		-		200,000		-		-		-		200,000		(151	)		199,729		-		-		-		199,578	At Expiration		3.39		3.14

Obligation with the public

0-E	THE BANK OF NEW YORK	U.S.A	ThUS$		-		300,000		-		500,000		-		800,000		8,173			301,579		4,119		503,298		-		817,169	At Expiration		8.17		8.00

Financial leases

0-E	AFS INVESTMENT IX LLC	U.S.A	ThUS$		2,086		6,437		18,556		8,369		-		35,448		2,253			6,437		18,556		8,369		-		35,615	Monthly		1.25		1.25
0-E	DVB BANK SE	U.S.A	ThUS$		118		164		-		-		-		282		119			164		-		-		-		283	Monthly		2.50		2.50
0-E	GENERAL ELECTRIC CAPITAL CORPORATION	U.S.A	ThUS$		3,771		5,075		-		-		-		8,846		3,794			5,075		-		-		-		8,869	Monthly		2.30		2.30
0-E	KFW IPEX-BANK	Germany	ThUS$		579		1,544		-		-		-		2,123		583			1,544		-		-		-		2,127	Monthly/Quarterly		2.80		2.80
0-E	NATIXIS	France	ThUS$		2,675		5,732		18,485		38,820		41,731		107,443		3,533			5,732		18,485		38,820		41,731		108,301	Quarterly/Semiannual		4.90		4.90
0-E	WACAPOU LEASING S.A.	Luxemburg	ThUS$		668		2,038		5,768		6,280		-		14,754		709			2,038		5,768		6,280		-		14,795	Quarterly		3.00		3.00
0-E	SOCIÉTÉ GÉNÉRALE MILAN BRANCH	Italy	ThUS$		8,547		26,275		74,783		169,730		-		279,335		9,779			26,275		74,783		169,730		-		280,567	Quarterly		4.18		4.11
0-E	BANCO IBM S.A	Brazil	BRL		260		749		22		-		-		1,031		260			749		21		-		-		1,030	Monthly		13.63		13.63
0-E	HP FINANCIAL SERVICE	Brazil	BRL		222		-		-		-		-		222		222			-		-		-		-		222	Monthly		10.02		10.02
0-E	SOCIETE GENERALE	France	BRL		102		307		110		-		-		519		102			307		110		-		-		519	Monthly		13.63		13.63

	Total				19,150		548,699		118,818		724,433		41,785		1,452,885		29,513			550,007		122,936		727,730		41,786		1,471,972

	Total consolidated				471,056		1,301,967		2,241,201		2,543,532		2,155,783		8,713,539		510,433			1,304,214		2,163,460		2,502,680		2,124,133		8,604,920

(b)

Hedge derivatives

									Total hedge
	Current liabilities				Non-current liabilities				derivatives
	As of		As of		As of		As of		As of		As of
	December 31,		December 31,		December 31,		December 31,		December 31,		December 31,
	2017		2016		2017		2016		2017		2016
	ThUS$		ThUS$		ThUS$		ThUS$		ThUS$		ThUS$

Accrued interest from the last date of interest rate swap		1,189		2,148		-		-		1,189		2,148
Fair value of interest rate derivatives		8,919		9,578		2,617		6,679		11,536		16,257
Fair value of foreign currency derivatives		2,092		13,155		-		-		2,092		13,155
Total hedge derivatives		12,200		24,881		2,617		6,679		14,817		31,560

The foreign currency derivatives correspond to options, forwards and swaps.

Hedging operation

The fair values of net assets/ (liabilities), by type of derivative, of the contracts held as hedging instruments are presented below:

	As of			As of
	December 31,			December 31,
	2017			2016
	ThUS$			ThUS$

Cross currency swaps (CCS) (1)		38,875			(12,286	)
Interest rate swaps (2)		(6,542	)		(16,926	)
Fuel options (3)		10,711			10,088
Currency forward - options US$/GBP$ (4)		-			618
Currency forward - options US$/EUR$ (4)		-			109
Currency options R$/US$ (4)		4,370			(1,752	)
Currency options CLP/US$ (4)		636			-

(1)

Covers the significant variations in cash flows associated with market risk implicit in the changes in the 3-month LIBOR interest rate and the exchange rate US$/UF of bank loans. These contracts are recorded as cash flow hedges and fair value.

(2)

Covers the significant variations in cash flows associated with market risk implicit in the increases in the 3 months LIBOR interest rates for long-term loans incurred in the acquisition of aircraft and bank loans. These contracts are recorded as cash flow hedges.

(3)

Covers significant variations in cash flows associated with market risk implicit in the changes in the price of future fuel purchases. These contracts are recorded as cash flow hedges.

(4)

Covers the foreign exchange risk exposure of operating cash flows caused mainly by fluctuations in the exchange rate R$/US$, US$/EUR and US$/GBP. These contracts are recorded as cash flow hedges.

During the periods presented, the Company only has cash flow and fair value hedges (in the case of CCS). In the case of fuel hedges, the cash flows subject to such hedges will occur and will impact results in the next 3 months from the date of the consolidated statement of financial position, while in the case of hedges of interest rates, these they will occur and will impact results throughout the life of the associated loans, up to their maturity. In the case of currency hedges through a CCS, there is a group of hedging relationships, in which two types of hedge accounting are generated, one of cash flow for the US $ / UF component; and another of fair value, for the floating rate component US $. The other group of hedging relationships only generates cash flow hedge accounting for the US $ / UF component.

During the periods presented, no hedging operations of future highly probable transaction that have not been realized have occurred.

Since none of the coverage resulted in the recognition of a non-financial asset, no portion of the result of the derivatives recognized in equity was transferred to the initial value of such assets.

The amounts recognized in comprehensive income during the period and transferred from net equity to income are as follows:

	For the period ended
	December 31,
	2017			2016			2015
	ThUS$			ThUS$			ThUS$

Debit (credit) recognized in comprehensive income during the period		18,344			127,390			80,387
Debit (credit) transferred from net equity to income during the period		(15,000	)		(113,403	)		(151,244	)