Corp.fin LATAM

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American University

Sarajevo

Corporate Finance

LATAM AIRLINES GROUP

Avdo Halilovic

Corporate Governance

About company

Name: LATAM Airlines Group S.A.

Address: Pdte. Riesco 5711, 20th floorLas Condes Santiago, ChileE-mail:investor.relations@lan.comWebsite: www.latamairlinesgroup.net

www. Lan.com

www.tam.com.brTrading Name: LATAM Airlines Group S.A.

Type: Public

Stock symbol: LFLFiscal years ends: 31 DecemberTraded in Santiago and on New York Stock Exchange, in form of ADRs, and Sao Paulo Stock Exchange, in the form of BDRsLATAM Airlines Group is part of Dow Jones Sustainability World IndexBusiness summary LATAM Airlines Group S.A., together with its subsidiaries, provides passenger and cargo air transportation services in South America. It provides domestic and international passenger transport services to approximately 135 destinations in 22 countries and cargo services to approximately 144 destinations in 26 countries; and other services, such as ground handling, courier, logistics, and maintenance. As of December 31, 2014, the company operated a fleet of 327 aircraft, including 313 passenger aircraft and 13 cargo aircraft. The company was formerly known as LAN Airlines S.A. and changed its name to LATAM Airlines Group S.A. in June 2012. LATAM Airlines Group S.A. was founded in 1929 and is headquartered in Santiago, Chile.

Company historyIn 1929, founded by Comandante Arturo Merino Benitez, started Linea Aerea Nacional de Chile (LAN). Then in 1946 LAN had its first international flight from Santiago to Buenos AiresIn 1956 stat of LAN services to Lima, and then in 1958 services to Miami, U.S.TAM-Taxi Aereo Marilia was created by five charter flight pilots. 1970 LAN connected with the Europe, and started firs flights on a new continent

TAM has founded Transportes Aereos Regionais by Captain Rolim Adolfo Amaro in 1975.In 1976 Launch of TAM services in Brazilian cities, especially Mato Grosso and Sao Paulo.

1983 constitution of Linea Aerea Nacional Chile Limitada, through CORFO.

LAN becomes a joint stock company in 1985, and in 1986 acquisition by TAM of Lapsa airline from the Paraguayan government and creation of TAM Mercosur; start of Sao Paulo. The Chilean government sells a 51% stake to local investors and Scandinavian Airlines System (SAS) in 1989. New name from Brasil Cenral renamed TAM Transportes Aereos Meridonais in 1990. Privatization of LAN completed with the acquisition of a 98,7% stake by its current controllers and other shareholders in 1994. Acquisition by TAM of Lapsa airline from the Paraguayan government and creation of TAM Mercosur; start of Sao Paulo in 1996. LAN lists on the New York Stock Exchange in 1997, becoming the first Latin American airline to trade ADRs onthis important market.; In 1998 TAM has got a first AIRBUS A330, and started its first international flight from Sao Paulo to Miami. TAM start services to Europe through a code sharing agreement with Air France to Paris Charles de Gaulle, in 1999. In 2000 LAN joined the Oneworld. In 2002 LAN Alliance with Qantas and Lufthansa Cargo. In 2007 started new Low cost model in domestic markets, capital increase of US$320 milion, purchase orders from 32 Boeing 787 Dreamliners.In 2010 TAM officially joins Star Alliance. 2011 LAN and TAM sign binding agreements related to the business combination of the two airlines.2012 LATAM Airlines Group is born as a result of the business combination between LAN and TAM.

Their capital increases for US$940,5 Millions in 2013, and in 2014. TAM joins oneworld alliance, which becomes LATAM Airlines Group global alliance/LATAM launches its 2015-2018 strategic plan.

Ownership Structure of the company

Informations from March 31st, 2015.

The Board of the Company is composed of nine members who are elected every two years by the ordinary shareholders' meeting. The Board meets in regular monthly sessions and in extraordinary sessions as the corporate needs demand. Of the nine board members, three form part of its Directors Committee which fulfills both the role foreseen in the Corporations Law and the functions of the Audit Committee required by the Sarbanes Oxley Law of the United States of America and the respective regulations of the SEC. As of December 31, 2014, the Company had a total of 1,622 registered shareholders. At that date approximately 7.69 % of the Companys share capital was in the form of ADRs and approximately 0.53% in the form of BDRs. For the period ended December 31, 2014, the Company had an average of 53,300 employees, ending this period with a total of 53,072 employees, spread over 10,077 Administrative employees, 6,986 in Maintenance, 17,517 in Operations, 9,237 in Cabin Crew, 4,009 in Controls Crew, and 5,246 in Sales.

The current Board of Directors was elected in the Ordinary Shareholders Meeting held on April 28, 2015, in accordance with the Companys By-Laws, and will hold office for a period of two years.

Chairman Mauricio Rolim Amaro

Director Henri Philippe Reichstul

Director Juan Jose Cueto Plaza

Director Georges de Bourguignon

Director Ramon Eblen Kadis

Director Ricardo J. Caballero

Director Carlos Heller Solari

Director Gerardo Jofre Miranda

Director Francisco Luzon Lopez

Board Committees

Pursuant to Chilean Corporation Law, as amended by Law No. 19705, LATAM Airlines Group must have a board of directors' committee composed of no less than three board members. LATAM Airlines Group has established a three-person committee of its board of directors, which, among other duties, is responsible for: Examining the reports of LATAM Airlines Group external auditors, balance sheets and other financial statements submitted by LATAM Airlines Group administrators to the shareholders. Proposing external auditors and rating agencies to the board of directors

Evaluating and proposing external auditors and rating agencies.

Reviewing internal control reports pertaining to related party transactions.

Examining and reporting on all related-party transactions

Reviewing the pay scale of LATAM Airlines Group senior Management

LATAMs board of directors has also established extra four committees to review, discuss and make recommendations to board of directors. This include a Strategy Commitee, a Leadership Committee, Finance Committee and a Brand, Product and Frequent Flyer program committee.

Locking at the Forbes list, the LATAM Airlines group is globally on the #1.387 place, with the market capital of $4.8 Bilion. If we look at their sales then they are on the #816 place, and by the assets on #1.078 place.Stockholder AnalysisAccording to the finance.yahoo.com LFL has 545,56 M shares outstanding. There is no information how many shares is held by insiders and how many by institutions (%). Major holders table:

Breakdown

% of Shares Held by All Insider and 5% Owners:

NaN

% of Shares Held by Institutional & Mutual Fund Owners:

NaN

% of Float Held by Institutional & Mutual Fund Owners:

NaN

Number of Institutions Holding Shares:

Holder

Shares

Reported

No Major Direct Holder info Available for LFL

Top Institutional Holders

Holder

Shares

% Out

Value*

Reported

Manning & Napier Advisors LLC

6,797,000

1.25

54,783,820

Mar 31, 2015

Baillie Gifford and Company

3,285,895

0.60

39,365,022

Dec 31, 2014

Dimensional Fund Advisors LP

3,244,187

0.59

38,865,360

Dec 31, 2014

Global Thematic Partners, Llc

3,208,292

0.59

25,858,833

Mar 31, 2015

Credit Suisse/

2,902,770

0.53

23,396,326

Mar 31, 2015

Emerging Global Advisors, LLC

2,095,065

0.38

25,098,878

Dec 31, 2014

TIAA-CREF Investment Management, LLC

1,194,775

0.22

9,629,886

Mar 31, 2015

State Street Corporation

1,170,433

0.21

14,021,787

Dec 31, 2014

Goldman Sachs Group, Inc.

1,145,025

0.21

13,717,399

Dec 31, 2014

Wells Fargo & Company

1,023,331

0.19

12,259,505

Dec 31, 2014

Top Mutual Fund Holders

Holder

Shares

% Out

Value*

Reported

EGShares Dow Jones Emerging Markets Consumer Titans Index Fd

2,261,347

0.41

18,226,456

Mar 31, 2015

Manning & Napier World Opportunities Series Fund

2,131,567

0.39

17,180,430

Mar 31, 2015

Manning & Napier Overseas Series Fund

1,090,861

0.20

8,792,339

Mar 31, 2015

College Retirement Equities Fund-Growth Account

968,475

0.18

11,602,330

Dec 31, 2014

DFA Emerging Markets Core Equity Portfolio

839,537

0.15

8,705,998

Jan 31, 2015

Wells Fargo Advantage Small Cap Value Fd

753,000

0.14

7,959,210

Feb 28, 2015

DFA Investment Dimensions-DFA Emerging Mkts Value

712,427

0.13

7,387,867

Jan 31, 2015

iShares Latin America 40 ETF

627,704

0.12

5,059,294

Mar 31, 2015

DFA Emerging Markets Series

429,797

0.08

4,456,994

Jan 31, 2015

Vanguard International Stock Index-Emerging Markets Stk

335,113

0.06

3,475,121

Jan 31, 2015

From the tables we coul