Full Year 2025 LATAM Airlines Group SA Earnings Call

February 4, 2026

Operator: Hello, and welcome everyone to the 4Q 2025 LATAM Airlines Group Earnings Conference Call. My name is Becky, and I will be your operator today. Before I turn the call over to management, I'd like to remind you that certain statements in this presentation and during the Q&A may relate to future events and expectations, and as such, constitute forward-looking statements. Any matters discussed today that are not historical facts, particularly comments regarding the company's future plans, objectives, and expected performance or guidance, are forward-looking statements. These statements are based on a range of assumptions that LATAM believes are reasonable, but are subject to uncertainties and risks that are discussed in detail in the published 20-F, 2026 guidance, earnings release, financial statements, and related CMF and SEC filings.

Speaker #1: Hello, and welcome, everyone, to the 4Q 2025 LATAM AIRLINES GROUP earnings conference call. My name is Becky, and I will be your operator today.

Speaker #1: Before I turn the call over to management, I'd like to remind you that certain statements in this presentation and during the Q&A may relate to future events and expectations.

Speaker #1: And as such, constitute forward-looking statements. Any matters discussed today that comments regarding the company's future plans, are not historical facts, particularly objectives, and expected performance, or guidance, are forward-looking statements.

Speaker #1: These statements are based on a range of assumptions that LATAM believes are reasonable, but are subject to uncertainties and risks that are discussed in detail in the published 20-F, 2026 guidance, earnings release, financial statements, and related CMS and SEC filings.

Speaker #1: The company's actual results may differ significantly from those projected or suggested, and any forward-looking statements due to a variety of factors which are discussed in detail in our SEC filings.

Full Year 2025 LATAM Airlines Group SA Earnings Call

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Full Year 2025 LATAM Airlines Group SA Earnings Call

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Wednesday, February 4th, 2026 at 1:00 PM

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Operator: The company's actual results may differ significantly from those projected or suggested, and any forward-looking statements, due to a variety of factors, which are discussed in detail in our SEC filings. If there are any members of the press on the call, please note that this call for the media is listen-only. I will now hand over to your host, Ricardo Botas, to begin. Please go ahead.

Speaker #1: If there are any members of the press on the call, please note that this call for the media is listen-only. I will now hand over to your host, Ricardo Botas, to begin.

Speaker #1: Please go ahead.

Speaker #2: Hello, everyone, and good morning. Welcome to our fourth quarter 2025 conference call, and thank you all for joining us today. My name is Ricardo Botas, and I am the CFO of LATAM AIRLINES GROUP.

Ricardo Botas: Hello, everyone, and good morning. Welcome to our Q4 2025 Conference Call, and thank you all for joining us today. My name is Ricardo Botas, and I am the CFO of LATAM Airlines Group. Here with me is Roberto Alvo, our CEO, Andres Del Valle, Corporate Finance Director, and Tori Creighton, Head of Investor Relations. We will present the highlights and results for the Q4 and full year 2025. I will hand it over to Roberto to share his opening remarks about the quarter and the year's highlights.

Speaker #2: Here with me is Roberto Alvo, our CEO, Andrés del Valle, Corporate Finance Director, and Tori Creighton, Head of Investor Relations. And we will present the highlights and results for the fourth quarter and full year 2025.

Speaker #2: I will hand it over to Roberto to share his opening remarks about the quarter and the year's.

Speaker #3: Good morning, and thank you, Ricardo. 2025 marked a year of continuous consolidation and delivery. The strong results we're presenting today are the product of a model that LATAM GROUP has been building over the last six years, anchored first in the people and the customers, focused on impeccable execution and in design and the design of a superior experience.

Roberto Alvo: Good morning, and thank you, Ricardo. 2025 marked a year of continuous consolidation and delivery. The strong results we're presenting today are the product of a model that LATAM Group has been building over the last six years, anchored first in the people and the customers, focused on impeccable execution and in design, and the design of a superior experience. All of these in the context of an ever stronger passenger and cargo networks, frequent flyer program, a very strong balance sheet, and cash generation, a disciplined cost delivery, and a highly diversified business model, all of which make our results resilient and much less subject to external factors and industry cycles.

Speaker #3: All of this in the context of an ever-stronger passenger and cargo network, frequent flyer program, a very strong balance sheet and cash generation, disciplined cost delivery, and a highly diversified business model, all of which make our results resilient and much less subject to external factors and industry cycles.

Speaker #3: At the heart of this performance, and with more than 41,000 employees working at the different affinities of the group, their daily commitment—whether at customer touchpoints or behind the scenes—continues to be LATAM Group's most powerful asset.

Roberto Alvo: At the heart of this performance and more than 41,000 employees working at the different affiliates of the group, their daily commitment, whether at customer touchpoints or behind the scenes, continues to be the LATAM Group's most powerful asset. The culture of passionate, engaged people translated directly into the customer experience. In 2025, the group achieved a record net promoter score of 54 points, which is a 3-point increase versus 2024, the highest full year results in our history. Where our people thrive, customers feel the difference. Internally, the organizational health index reached 83 points, placing LATAM Group in the top decile of the global benchmark for the first time. In terms of the operations, the group transported more than 87 million passengers during the year, including 23 million passengers in the Q4 alone.

Roberto Alvo: At the heart of this performance and more than 41,000 employees working at the different affiliates of the group, their daily commitment, whether at customer touchpoints or behind the scenes, continues to be the LATAM Group's most powerful asset. The culture of passionate, engaged people translated directly into the customer experience. In 2025, the group achieved a record net promoter score of 54 points, which is a three-point increase versus 2024, the highest full year results in our history. Where our people thrive, customers feel the difference. Internally, the organizational health index reached 83 points, placing LATAM Group in the top decile of the global benchmark for the first time. In terms of the operations, the group transported more than 87 million passengers during the year, including 23 million passengers in the Q4 alone.

Speaker #3: The culture of passionate engaged people translated directly into the customer experience. record net promoter score of 54 points, which is a three-point increase versus 2024.

Speaker #3: The highest full-year results in our history, when our people thrive, customers feel the difference. Internally, the organizational health index reached 83 points, placing LATAM GROUP in the top D cell of the global benchmark for the first time.

Speaker #3: In terms of the operations, the group transported more than 87 million passengers during the year, including 23 million passengers in the fourth quarter alone.

Speaker #3: This was boosted by a capacity increase of 8.2% for the full year, and 7.7% in the quarter, demonstrating the group's ability to grow efficiently while maintaining a healthy load factor of 84.4%.

Roberto Alvo: This was boosted by a capacity increase of 8.2% for the full year and 7.7% in the quarter, demonstrating the group's ability to grow efficiently while maintaining a healthy load factor of 84.4%. This ability to connect passengers to, from, and within South America was enabled by the modern and efficient fleet that the group operates. During 2025, LATAM received a total of 26 aircraft, 7 of which were incorporated in Q4. This includes the first Boeing Dreamliner with G engines and brought the total fleet to 371 aircraft as of the end of the year. A 7% increase versus 2024, enabling the group to launch 22 new routes, of which 15 were international....

Speaker #3: This ability to connect passengers to, from, and within South America was enabled by the modern and efficient fleet that the group operates. During 2025, LATAM received a total of 26 aircraft, seven of which were incorporated in the fourth quarter.

Speaker #3: This includes the first Boeing Dreamliner with GE engines, and brought the total fleet to 371 aircraft as of the end of the year. A 7% increase versus 2024, enabling the group to launch

Speaker #1: 22 new routes , of which international financial side , operating margin adjusted . On the year , reached adjusted EBITDA while in almost 16.2% for the totaled income 4.1 billion .

Roberto Alvo: On the financial side, adjusted operating margin reached 16.2% for the year, while adjusted EBITDA came in almost $4.1 billion. Net income totaled approximately $1.5 billion, resulting in earnings per ADS of $4.95, highlighting the group's ability to translate operational performance into bottom line results. This bottom line grew by 50% versus the income we generated in 2024. With this, in December, LATAM was able to distribute $400 million in interim dividends, aligned with its capital allocation strategy determined by its financial policy. 2025 was just not a strong year.

Speaker #1: Net year , 16.2% for the while approximately , EBITDA adjusted came in almost income totaled Net 4.1 billion . approximately $1.5 billion , earnings resulting in per Ads of $4.95 , highlighting the group's ability to translate operational performance into bottom line results .

Speaker #1: bottom line grew This by 50% versus the income generated in 2024 , this , in Latam was able to December , distribute $400 million in interim dividend and its capital allocation strategy determined by the financial policy .

Roberto Alvo: It was a reaffirmation of LATAM's structural strengths, translated into consecutive years of margin expansion in a context of high capacity growth, and driven by a strategy that combines a focus on people, a differentiated customer experience, an unmatchable footprint, disciplined cost control, and a resilient balance sheet. This is what defines this new LATAM. This performance and design set the base for an expected 2026 strong performance, highlighted in our yearly guidance, of which we feel very confident at the moment, despite June and current volatility. I'm very proud to be here leading a group of 41,000 souls, and to highlight and discuss our performance. With that, I'll hand it over to Ricardo, who will walk us through the achievements of this Q4 and full year 2025.

Speaker #1: reaffirmation of Latam strengths translated into consecutive years of margin expansion in the of high capacity growth context driven by a and strategy that combines a focus on differentiated customer experience and matchable footprint , disciplined control cost , and a resilient balance sheet .

Speaker #1: This is what this new Latam . defines performance and design set the base for an expected performance 2026 strong highlighted in our yearly guidance of which we feel very confident at the moment .

Speaker #1: Despite fuel and currency volatility, I'm very proud to be here leading a group of 41,000 souls and to highlight and discuss our— With that, I'll hand it over to.

Speaker #1: Despite fuel and currency volatility . I'm very proud to be here leading a group of 41,000 souls and to highlight and discuss our With that , I'll hand it over to . .

Speaker #1: Ricardo, who will walk us through the achievements of this fourth quarter and full year 2025.

Ricardo Botas: Thank you, Roberto. Let's move to slide 4. LATAM delivered a solid financial performance during the fourth quarter, with improvements across all key metrics. Total revenues reached almost $4 billion, increasing 16.3% year-over-year. This growth was driven by the passenger segment, which rose 20.3%, supported by the strong demand and capacity growth. Cargo revenues declined 9.6% in the period, explained by a particularly high comparison base, as the fourth quarter of 2024 had delivered an exceptionally strong performance. Despite this, full-year cargo revenues increased year-over-year. As a result, the group delivered an adjusted EBITDA of $1.1 billion, representing a 30.4% increase versus Q4 2024.

Speaker #2: Thank you move Let's to slide for . delivered a Latin solid financial performance during the fourth quarter with improvements across all key metrics .

Speaker #2: Total revenues reached almost $4 billion , increasing 16.3% year over year . This growth was driven by passenger segment , which rose 20.3% , supported by the strong demand and capacity growth .

Speaker #2: Revenues from Cargo declined 9.6% in the period, explained by a particularly high comparison base as the fourth quarter of 2024 had an exceptionally strong performance.

Speaker #2: Despite this, cargo full year increased year over year. As a group, we delivered an adjusted EBITDA of $1.1 billion, representing a 30.4% increase versus Q4. Adjusted operating income for 2024 came in at $661 million, up 42.7% year over year, and net income totaled $484 million, increasing 78.1% compared to the last fourth quarter of the year.

Ricardo Botas: Adjusted operating income came in $661 million, up 42.7% year-over-year. Net income totaling $484 million, increasing 78.1% compared to Q4 of last year. Margins also improved, with adjusted operating margins standing out at 16.7%. This quarter, we saw an increase in unit cost ex-fuel, with passenger CASK ex-fuel reaching $0.047. About 0.2 cents of this can be explained by the appreciation of the local currencies during this period, along with another 0.2 cents related to the other non-recurring costs in wages and benefits, which include a special one-time bonus approved in this last quarter.

Speaker #2: Margins adjusted also operating margin standing out at 16.7% . This quarter . We increase in unit costs saw an passenger with cash ex flow reaching 4.7 cents , about 0.2 cents of these can be explained by the appreciation of the local currencies during this period , along with another 0.2 cents related to the other in non-recurring wages and benefits , which include a special one time bonus on this approved quarter last .

Ricardo Botas: While quarterly unit costs were elevated, it's worth highlighting that full year passenger CASK ex-fuel came in at 4.4 cents, fully within the updated guidance range for 2025, provided last November. Importantly, this 7.9% increase in unit cost was more than offset by an even stronger improvement in unit revenue. Passenger RASK increased by 11.7%, reflecting LATAM's ability to sustain its value proposition and capture customer preference in an environment of healthy demand. Please join me on this next slide 5, to take a deeper dive on the drivers for revenue performance across the different affiliates and business units. Overall, Q4 showcased a well-balanced dynamic between capacity deployment and demand across our network, supported by healthy load factors and target commercial actions.

Speaker #2: While quarterly unit costs were elevated , it's worth highlighting that full year passenger cask came in at 4.4 cents , fully within the updated guidance range for 2025 , provided last on last November .

Speaker #2: Importantly, a 7.9% increase in unit costs was more than offset by an even stronger improvement in unit revenue. Rest of passenger increased by 11.7%, reflecting LATAM's ability to sustain its value proposition and capture customer preference in an environment of healthy demand.

Speaker #2: Please join me on this next slide . deeper Five to take a dive on the revenue performance drivers for across the different affiliates and business units .

Speaker #2: Overall , the fourth showcased a well dynamic between capacity , deployment and demand across our network , supported by healthy load factors and targeted commercial actions on a consolidated level , capacity grew by nearly 8% while maintaining a solid load factor of 85% .

Ricardo Botas: On a consolidated level, capacity grew by nearly 8%, while maintaining a solid load factor of 85%, showcasing our ability to grow efficiently. Looking at the LATAM Airlines Brazil's domestic capacity expanded by 12%, and demand kept pace, with load factors increasing by 0.7 percentage points. This balance, supported by a solid passenger RASK performance, with growth of 14% in US dollars and 10% in local currency, highlighting the strength of LATAM's value proposition in this market, together with the resilience of demand. In domestic Spanish-speaking affiliate markets, passenger RASK grew by 23% in dollars and nearly 20% in local currency, driven by a disciplined capacity allocation that resulted in an increase in the load factor to 1.7%, percentage point higher than before.

Speaker #2: Showcasing our ability to grow efficiently. Looking at LATAM, the airline grew Brazil's domestic capacity by 12%, and demand kept expanding at pace, with load factors increasing by points.

Speaker #2: 0.7 percent. This balance, supported by a passenger rest performance growth with solid 14% in US dollars and 10% in local currency, highlights the strength of the LATAM value proposition in this market.

Speaker #2: Together with a resilience of demand the in speaking Spanish markets affiliate , passenger aircraft grew 23% in dollars by and nearly 20% in local currency , driven by a disciplined capacity allocation that in an increase load resulted factor to 1.7% .

Ricardo Botas: Turning to the international segment, capacity and passenger volumes both grew at a high single-digit pace. While load factor decline is likely year over year, it remained at a very healthy 85% levels. In parallel, unit revenues increased by 6%, supported by a well-diversified network, both in the regional and long-haul international operations, and a strong execution. Altogether, these results reflect the robustness of LATAM Group's commercial model and its ability to grow profitable. Q4 confirms that the network strategy and the disciplined capacity deployment continue to deliver strong outcomes across the board. Turning now to our value pro- value proposition and customer experience on slide 6. During 2025, LATAM Group continued advancing initiatives focused on enhancing services across key touchpoints, with a particular emphasis on consistency, reliability, and design.

Speaker #2: Percentage point higher than before . Turning to international segment capacity and passenger volumes , both at grew a high single digit pace , while load factor declined year slightly over year .

Speaker #2: It at a very healthy remained . In parallel , 85% levels unit revenues increased by 6% , supported by a well diversified network .

Speaker #2: Both in the regional and long-haul, international operations, and a strong execution. Altogether, these results reflect the robustness of the Group's Latin commercial model and its ability to grow profitably.

Speaker #2: The fourth quarter confirms that the network strategies and the disciplined capacity deployment continue to deliver strong outcomes across the board. Turning now to our value proposition and customer experience on slide six.

Speaker #2: During 2025, LATAM Group continued advancing initiatives focused on enhancing services across key touchpoints, with a particular emphasis on consistency, reliability, and design.

Ricardo Botas: At the center of this improvement is our continued focus on the premium segment, where LATAM has made significant upgrades to its value proposition. During the year, we introduced a renewed business class experience, launched the signature check-in in our new signature lounge in Lima, and announced the future enhancements like the investments in Wi-Fi on wide-body fleet beginning 2026, and the new premium comfort cabin coming in 2027, as well as the investments on the new and the brand new lounge in Guarulhos. As part of this ongoing focus, LATAM was once again recognized internationally.

Speaker #2: At the center of this improvement is our continued focus on the premium segment , where made Latin has significant upgrades to its value proposition .

Speaker #2: During the year , we introduced a renewed business class experience signature , launched the check in , and our new Signature in Lima , and future announced that the enhancements like the investments in Wi-Fi on widebody fleet , beginning in 2026 and the new premium comfort cabin coming in 2027 , as well as the investments on the new lounge and the brand new .

Ricardo Botas: In Q4, the group received the Most Improved Brand Award globally by DesignAir, a recognition that adds to earlier achievements such as Skytrax Best Airline in South America, the APAC Five Star Global Airline Award, and the Air Cargo Airline of the Year Award by Air Cargo News, all serving as third-party endorsements that we are on the right path. The customer experience enhancements initiative demonstrate the group's commitment to delivering a consistent and differentiated traveler experience across the region, and further strength the customer preference for LATAM, and the results are validating these investment decisions. For the full year, premium revenue, premium revenues accounted for 23% of passenger revenues and continued to grow faster than the passenger revenues overall.

Speaker #2: part of As Guarulhos ongoing focus , Latam was again recognized internationally in the fourth group quarter , the received the most improved award Brand globally by design .

Speaker #2: The design Air a recognition that adds to earlier achievements such as Skytrax , Best Airline in South America , the APAC five star global Airline , and the Air Award Cargo Airline of the year Award by Air Cargo News , all serving as three part endorsements that we are on the right path The .

Speaker #2: customer experience Enhancements , initiatives demonstrates the commitment group's to delivering a consistent and differentiated travel experience across the region and further strengthen the customer preference for Latam .

Speaker #2: the And results are validating these investments . Decisions for the full year . Premium revenue . Premium revenues accounted for 23% of passenger revenues and continue to grow faster than the passenger revenues While passengers revenues grew year .

Ricardo Botas: While passengers revenues grew 12% year over year, premium revenues increased by 14%, highlighting the continued momentum of this segment, which provides LATAM with access to a customer base that is structurally more stable throughout the year, less exposed to seasonality, and more resilient to potential macroeconomic headwinds. Coupled with this, the LATAM Pass program plays a critical role in accessing this segment, fostering loyalty among customers who travel more frequently and generate higher expense through the wide range of benefits the program offers. LATAM Pass is by far the largest airline loyalty program in the region, with almost 54 million members, accounting for nearly 60% of LATAM's passengers revenues. This combination of a resilient customer segment and a highly effective loyalty program reinforces the sustainability of LATAM's revenue base and equips the group with the tools to continue driving profitable growth.

Speaker #2: increased Premium by highlighting 14% , the continued momentum of this segment , which provides Latin with access to a customer base that is structurally more stable throughout the year , less exposed to more seasonality and resilient to potential headwinds macroeconomic .

Speaker #2: Coupled with these are the LATAM Pass program plays a critical role in accessing these segments, fostering loyal customers who among more frequently and generate higher expense through the wide range of benefits the program offers.

Speaker #2: Latam pass is by far the largest airline loyalty program in the region , with almost 54 million members , accounting for nearly 60% of Latin passengers .

Speaker #2: . This combination of Revenues a resilient customer segment and a highly effective loyalty program reinforces the sustainability of Latin revenue base and equips the group with the tools to continue driving profitable growth .

Ricardo Botas: Jump to slide 7. You'll see on this slide that the way that we are translating this into tangible results. Customer satisfaction reached record levels. Net promoter score rose to 54 points, as Roberto mentioned, for passenger operations, while among premium travelers, each reached 58 points, the highest ever recorded by the group. This is a clear indication that our customers are recognizing and valuing the improvements. At the same time, premium revenues continue to show an upward trend, supported by growth, customers' preference, and a more differentiated onboard experience. Importantly, we have managed to achieve these results while maintaining costs stable since 2019, confirming that LATAM, LATAM can deliver a differentiated experience all while keeping its cost base stable. Let's move to slide 8.

Speaker #2: Jump to slide seven . see on slide that this the way that we You are translating these into tangible results , customer satisfaction record reached levels .

Speaker #2: Net Promoter Score rose to 54 points, as Roberto mentioned, for passenger operations, while among premium passengers each reached 58 points, the highest ever recorded by the group.

Speaker #2: This is a clear indication that our customers are recognizing and valuing the improvements the same at time , premium revenues continue to show an upward trend , supported by growth , customer preference and a more differentiated on experience .

Speaker #2: And have managed to importantly , we achieve these results while maintaining cost stable 2019 . since Confirming that Latam can deliver a differentiated experience , all while keeping its cost base stable Let's move .

Ricardo Botas: We have spoken a lot about structural improvements and the sustainability of the profitability stemming from the unique ecosystem of LATAM Group. Passionate people, a financial foundation, an exceptional product, premium revenues, and a focus on cost containment. All of that supports a virtual cycle that results in these numbers year after year. This year, LATAM expanded its revenues in 11.2%, and its adjusted operating margin to 16.2%, reflecting the profitable growth strategy and the continued disciplined capacity execution. Over the course of the year, the group received 26 aircraft, launched 22 new routes, and grew capacity by 8.2%, making the 3.5 percentage point margin expansion a clear reflection of LATAM's ability to grow strategically, not just in volume, but in the profitability targets.

Speaker #2: slide eight . We have spoken a lot about structural improvements and the sustainability . Sustainability of the profitability stemming from the unique ecosystem of Latam Group .

Speaker #2: Passionate people , a financial foundation , an exceptional product premium revenues and a focus on cost containment . All of that supports a virtuous cycle that results in these numbers year after year .

Speaker #2: This year, LATAM expanded its revenues by 11.2% and its adjusted operating margin to 16.2%, reflecting the profitable growth strategy and the continued disciplined capacity execution.

Speaker #2: Over the course of the group year , the received 26 aircraft , launched 22 new routes , and grew capacity by 8.2% , making the three point making the 3.5% point margin expansion a clear reflection of Latin's ability to grow strategically , not just in volume , but in the profitability targets .

Ricardo Botas: It's also a testament to the group's deep knowledge of its markets and disciplined execution over time. Adjusted EBITDA grew by over 30% year-over-year to $4.1 billion, supported by revenue growth and efficiency across the operation, all within the guidance range. At the bottom line, net income increased significantly by 50% versus last year, further reinforcing the group's ability to deliver sustainable financial results. These results are part of a broader trend, one of continuous improvements and reliable execution. LATAM enters 2026 on solid footing with a strong foundation to continue creating long-term value. Please join me on slide 9. As you can see on this slide, LATAM's strong performance is not only reflected in earnings generation, but also in its ability to consistently translate those results into cash generation.

Speaker #2: It's also a the testament to group's deep knowledge of its markets and discipline time . . Execution , adjusted EBITDA grew by over 30% year over year to $4.1 billion , supported by revenue growth and efficiency across the operation .

Speaker #2: All within the guidance range . At the bottom line , net income increased significantly by 50% versus last year . Further reinforcing the group's ability to deliver sustainability , financial results .

Speaker #2: These results are part of a broader trend . One of continuous improvements and reliable execution . Latin enters 2026 on solid footing with a strong foundation to creating long continue term value .

Speaker #2: Please join me on slide nine . As you can see on this slide , Latin strong performance is not only reflected in earnings but generation , also in its ability to consistently translate those results into cash generation during 2025 , adjusted operating cash flow reached $3.3 billion , supported by strong operational and financial performance .

Ricardo Botas: During 2025, adjusted operating cash flow reached $3.3 billion, supported by strong operation and financial performance. This cash generation enabled the group to fully fund its core business needs, including maintenance and growth investments, with $1.5 billion invested in CapEx net of financing, while also covering interest payments. As we highlighted earlier, our CapEx investments have been directed towards enhancing the customer experience, but they have also been focused on accelerating LATAM's digital transformation across the business. With that, LATAM generated closer to $1.4 billion in cash after covering all business-related commitments... Over the course of the year, the group executed two share repurchase programs totaling $585 million.

Speaker #2: This cash generation the group enabled to fully fund its core business needs , including maintenance and growth investments , with 1.5 billion invested in CapEx , net of financing , while also covering interest payments .

Speaker #2: As we highlighted earlier , our CapEx investments have been directed towards enhancing the customer experience , but they have also been focused on accelerating digital , transformation digital across the business .

Speaker #2: With that , Latam generated close to $1.4 billion in cash after covering all related commitments over the course of the year , the group executed two share programs repurchase totaling $585 million .

Ricardo Botas: Also, LATAM Group distributed $400 million in interim dividends in the fourth quarter, bringing total dividends for the year close to $605 million. Even after all of these, LATAM still delivered almost $200 million in positive cash generation in 2025, demonstrating its ability to invest in the business, meet its key obligation, key obligations, and also allocate capital towards additional initiatives, all while considering defined financial policy ranks. Let's move to slide 10 and see how this is reflected in our balance sheet metrics. Balance sheet strength has been one of LATAM's key priorities over the past few years, and liquidity is one of the clearest expression of that focus. The group has consistently grown its nominal liquidity, reaching $3.7 billion by the end of 2025.

Speaker #2: Latam Group distributed $400 million in dividends in the fourth quarter, bringing dividends for the year to a total of $605 million. Even after all of these, Latam still delivered almost $200 million in positive cash generation in 2025, demonstrating its ability to invest in the business and meet its key obligations.

Speaker #2: Key obligations, and also allocate capital towards additional initiatives, all while considering defined financial policy rates. Let's move to slide ten and see how this is reflected in our balance sheet metrics.

Speaker #2: Balance sheet strength has been one of Latin's key key key priorities over the past few years . And liquidity clearest expression of that is one of the focus .

Ricardo Botas: As we just reviewed on the previous slide, it was through the additional capital allocation initiatives carried out in 2025, that LATAM was able to bring liquidity as a percentage of last twelve months revenues closer to the top of the policy range at the 25.7%, demonstrating the flexibility group has to allocate capital across multiple fronts, while aiming at the defined financial framework. At the same time, on the debt side, adjusted net leverage reached 1.5 times, below the last year and the maximum policy level of 2 times, placing LATAM in a strong position heading to 2026, with the flexibility to continue investing while also preserving financial strength. Moving to the next slide, let's take a look on the continuous optimization of the cost of capital and debt tenure.

Speaker #2: The group has consistently growth its nominal liquidity , reaching $3.7 billion by the end of 2025 . As we just revealed on the previous slide , it was through the additional capital allocation initiatives carried out in 2025 that Latin was bring able to liquidity as a percentage of last 12 months revenues closer to the top of the policy range .

Speaker #2: At 25.7% , demonstrating the flexibility group has allocate across capital multiple to while aiming at the financial framework at the same time . On the that side , adjusted net reached leverage 1.5 times below the last year , and the maximum policy level of two times .

Speaker #2: Placing Latin in a strong position heading into 2026 . With the to flexibility investing continue while also preserving financial strength . Moving to the next slide , let's take a look on the continuous optimization of the cost of capital and that tenure .

Ricardo Botas: LATAM has taken important steps, over the past 2 years to improve its cost of debt. Through refinancing exercises carried out in 2024 and 2025, the group successfully reduced the weight, the weighted average cost of debt from 10.7%, in 2023 to 6.6% as of the end of 2025. In parallel, LATAM's debt, LATAM's debt amortization profile is well balanced, with no short and midterm relevant maturities. Furthermore, LATAM holds call options in 2026 and 2027 that offer potential opportunities to reprofile these maturities and also reevaluate the potential tender split to improve even more this debt profile. Let's move now to the slide 12. As reflected in 2026 guidance published back in December, we expect it to be another year of continued profitable growth.

Speaker #2: Latam has taken important steps over the past two years to improve its cost of debt through refinancing exercises carried out in 24 and 25 , the group successfully reduced the weight .

Speaker #2: The weighted average cost of debt from 10.7% in 2023 to 6.6% as of the end of 2025 . In parallel , Latin's that are tense debts , amortization profile is well balanced with no short and mid-term relevant maturities , and furthermore , Latin holds call options in 26 and 27 that offer potential opportunities to these maturities and also reevaluate the potential tender split to improve even more .

Speaker #2: This debt profile. Let's move now to slide 12. As reflected in the 2026 guidance published back in December, we expect it to be another year of profitable growth.

Ricardo Botas: Capacity is projected to grow between 8 and 10%, and to deliver an adjusted operating margin between 15 and 17%, reflecting LATAM's focus on efficiency and discipline execution. In terms of cash, adjusted levered free cash flow is expected to exceed the $1.7 billion from $1.5 billion this last year, reinforcing the group's ability to consistently translate earnings into liquidity. We also expected liquidity above $5 billion for the end of 2026, and, as we have mentioned in Investor Day, held in December, given our financial policy ranks, we would have between $1 billion and $1.6 billion after CapEx investments and minimum dividend payments available for additional capital allocation initiatives in 2026.

Speaker #2: Capacity is projected to grow between 8 and 10% , and to deliver an adjusted operating margin between 15 and 17% , reflecting Latin focus on efficiency and disciplined execution in terms of cash adjusted free flows cash is expected to exceed $1.7 billion from $1.5 billion .

Speaker #2: This last year, reinforcing the group's ability to consistently translate earnings into liquidity. Whilst we also expected liquidity above $5 billion for the end of 2026.

Speaker #2: And as we have mentioned , Investor Day held December , given our in we financial policy ranks , would between have 1,000,000,001.6 billion after CapEx investments in minimum dividend payments available for additional capital allocation initiatives in 2026 , this year , Latin continue investing in key strategic areas , customer including the experience , the of the fleet renewal efficiency focus , innovations and they continue reinforcement of balance sheet discipline again , to remind you of the main figures that we're disclosing , the Investor day , the CapEx plan this year , for net of finance , the fleet of financing is about $1.7 billion for the year .

Ricardo Botas: This year, LATAM will continue investing in key strategic areas, including the customer experience, the renewal of the fleet, efficiency-focused innovations, and the continued reinforcement of balance sheet discipline. Again, to remind you of the main figures that were disclosed in Investor Day, the CapEx plan for this year, net of finance, the fleet of financing, is about $1.7 billion. For the year, the group is expecting to receive 41 aircraft, of which 3 are wide-bodies and 12 correspond to the first Embraer E-Jets. The last slide is slide 13, and before we move to the Q&A, let me briefly highlight the key methods from 2025 performance. 2025 was another year of strong and consistent performance for LATAM, both operationally and financially.

Speaker #2: The group is expecting to receive 41 aircraft, of which three are widebodies, and the first Embraer is scheduled to be delivered. The last slide is slide 13.

Speaker #2: And we move to the Q&A , let me before briefly highlight the messages key from from 2025 performance a was another year of 2025 was strong and consistent for performance Latin .

Ricardo Botas: Operational excellence was matched by record levels of customer and employee satisfaction, with NPS and organizational health index reaching all-time highs. The group transported a record number of passengers, expanded the network with discipline, and delivered a significant improvement in profitability, with adjusted operating margin increasing 3.5 percentage points year-over-year to 16.2%. This profitability was translated all the way to the bottom line, with annual net income closing at $1.5 billion. These results reflect the group's ability to grow efficiently while maintaining a focus on margins and operational excellence. During 2025, we fully funded investments in the business and met all financial commitments while generating cash.

Speaker #2: Both operationally and financially . Operational excellence was operational . Excellence was by matched record levels of customer and employee satisfaction with NPS and organizational health Index reaching all time highs .

Speaker #2: The group a record number transported of passengers , expanded the network with discipline and deliver a significant improvement in profitability with adjusted operating margin , increasing 3.3.5 percentage over year points year to 16.2% .

Speaker #2: These profitability was translated all the way to the bottom line , with income annual net closing at $1.5 billion . These results reflect the group's ability to grow efficiently while maintaining a margins and focus on operational excellence .

Speaker #2: During 2025, we fully funded the business and met all financial commitments and investments, while generating LATAM cash. We generated $1.4 billion in cash before executing two share repurchases and separately distributing dividends, while still holding a strong liquidity level and low leverage.

Ricardo Botas: LATAM generated $1.4 billion in cash before executing 2 share repurchases and separately distributing dividends while still holding a strong liquidity level and low leverage. At the same time, we strengthened our balance sheet, aiming at the financial policy targets and focus on reducing the cost of debt, which now stands below 7%. Looking ahead, we are entering 2026 with solid momentum. Our guidance reflects continued profitable growth, supported by healthy demand, commercial discipline, and a clear focus on the strategic priorities. With that, we are now opening the line for your questions. Thank you very much.

Speaker #2: At the same at time , the same time , we strengthened our balance sheet , aiming to aiming at a financial policy targets and focus on reducing the cost of debt , which now stands below 7% .

Speaker #2: Looking ahead , we are entering 20 , solid momentum . 2626 with Our guidance reflects continued profitable growth supported by healthy demand , commercial a clear on strategic focus priorities .

Operator: ... Thank you. If you wish to ask a question, please press star followed by one on your telephone keypad now. If you feel your question has been answered or for any reason you would like to remove yourself from the queue, please press star followed by two. When preparing to ask your question, please ensure your device is unmuted locally. Our first question comes from Julia Orsi from JPMorgan. Your line is now open. Please go ahead.

Speaker #2: With that , we are now open the line for your questions . Thank you very much .

Speaker #3: Thank you . If you wish to ask a question , please press star followed by one on your telephone keypad . Now , if you for your question answered or for any has been reason you would like to remove yourself from the queue , please press star followed by two .

Speaker #3: When preparing to ask your question , please ensure a device is unmuted . Our first question locally comes from Julia Orsi JP from Your Morgan .

Julia Orsi: Yeah. Hi, Roberto, Ricardo, thanks for taking the time. So we have two questions on our side. The first one is on mute. So we saw a strong pricing performance this quarter. Congratulations on that. Can you provide additional details on how you're tracking across the regions? And the second one, based on recent trends, how is the booking curve and demand environment evolving? Is there any particular region that has been outperforming or underperforming? Thank you.

Speaker #3: line is now Please go ahead open . . Yeah .

Speaker #4: Roberto . Hi , Ricardo , thanks for taking the time . So we have two questions on our side . The first one is on mute .

Speaker #4: So we saw a pricing performance this quarter . Congratulations on that . Can you provide additional details on you are how across the regions tracking .

Speaker #4: And second one based on the trends , how is recent the booking curve and demand environment evolving ? Is there any region that has been particular outperforming or underperforming ?

Roberto Alvo: Hi, Julia, this is Roberto. Thanks for the questions. We saw in general strong and stable demand over all of the business areas where we operate. In the last couple months of the year, domestic Chile was a little bit slower as compared to particularly 2025, 2024, but at industrial level, and you can see that on the public figures. But we have seen already a recovery in the first months of the year. So I would say that all the business perform on a relatively good basis in 2025, last quarter in the passenger segment. Cargo, it was also good.

Speaker #4: Thank you .

Speaker #1: Hi Julia , this is Robert . Thanks for the questions . We saw in , strong and general stable demand over all of the business areas where we operate in the last couple of months of the year .

Speaker #1: Domestic Chile was a little bit compared slower as to particularly 2025 , 2024 , but as an level and you can see that public figures .

Speaker #1: But we have seen already a recovery in the first months of the year . So I that would say all the business performed on a relatively good basis in 2025 , last quarter in the passenger segment , cargo , it was also good again , as Ricardo said , a very strong basis of comparison .

Roberto Alvo: Again, as Ricardo said, a very strong basis of comparison, the last quarter in 2024, it still was robust, and the current appreciation of the currencies will probably increase import demand into the region in the upcoming months. Booking curve for early 2026 looks healthy. We see no issues that concern us today, and in general, all the segments are performing well. As it has happened in the past two or three years, the segment that has been growing the most is international, and this is also reflected in our capacity during 2025 and also the guidance that we provided for 2026. But in general, we see no, no, no concerns from the demand side going forward, at least for Q1.

Speaker #1: The last quarter in 2024, it was still robust, and the appreciation of the current currencies would probably increase import demand into the region in the upcoming months.

Speaker #1: Booking curve early for 2026 looks . We healthy no issues that concern us today and in general , all the segments have performing well as it has happened in the past 2 or 3 years .

Speaker #1: The segment that has been growing the most is international , and this also reflected in our capacity doing 2025 and also the guidance that we provided for 2026 .

Julia Orsi: Thank you.

Speaker #1: But in general , we see no , no demand side no , going forward , at least for the first quarter . Thank you .

Operator: Thank you. Our next question comes from Michael Linenberg, from Deutsche Bank. The line is now open, please go ahead.

Speaker #3: Thank you . Our next question comes from Michael Lindenberg from Deutsche Bank . Your line is now open . Please go ahead .

Michael Linenberg: Yeah, hey, good morning. Couple questions here. Great way to end 2025. These are fantastic results. You know, when you talked about the CASK impact of 0.2% from the impact of the weak dollar, as we think about LATAM and how you have evolved your structure and the seasonality and the geography of your network, where do you come out with respect to the dollar? Is a weaker dollar overall better, even though I realize there's a cost headwind? Is it just better overall for the performance of the company? And I'm just sort of in the context of the last 12 months, we've seen about a 10% depreciation of the dollar. How should we think about that on your business?

Speaker #5: good Yeah . Hey , morning . A couple of questions . Great way to here end 2025 . These are fantastic results . The you know the when you talked about the cask impact of 2/10 of a percent the impact of the weak dollar , as we think about lactam and have how you evolved your structure and the seasonality and the geography of your network , where you come out with where do respect to the dollar ?

Speaker #5: Is is a weaker dollar overall better ? Even though I realize there's a cost just better headwind , is it performance for the of the company ?

Speaker #5: And overall I'm just sort of in the of the context last 12 months , seen we've 10% depreciation of the think about How that on dollar .

Roberto Alvo: Hi, Michael, thanks for the question. A great question. So, let me give you... At the end of the day, for us, a stronger local currency is more positive than a weaker local currency. And this derives from, A, on the domestic markets, basically, most of our revenue is expressed in local currency or happens in local currency, and a significant portion of the cost is in dollar. So domestic markets work like import industries, if you want. And in the case of international, for us, it's also beneficial, but because even though, the countries become more expensive for traveling into the region, if you want, purchasing power for traveling abroad is higher, and our point of sale balance is higher on our South American side than our non-home side. So-

Speaker #5: your should we ?

Speaker #1: Michael , thanks for the Hi , question . A great question . So , so let you , at the end of the day , for us , a stronger local currency more is positive than a weaker local currency .

Speaker #1: this And derives from a on the markets . domestic most of our revenue currency local happens in or And significant portion of the cost is in a So domestic dollar .

Speaker #1: markets work import like want . industries . And in the If you international , for case of us it's also beneficial . But because even though the the countries become more expensive for traveling into the region , if you want purchasing power for traveling abroad is higher and point of sale our balance is higher on our South American side and local our side .

Michael Linenberg: Yep.

Roberto Alvo: - The balance that we see is that a stronger currency, this is the dollar, net of higher costs because of the same effect, are net positive.

Speaker #1: So balance that we see is that a the stronger currency vis a vis the dollar net of higher costs because of this same effect , are net

Michael Linenberg: Yep. Great. That's super helpful. And then I just, I want to talk about CapEx for 2026. Last year, you took 26 airplanes. I believe this year's gonna be a heavy delivery year. I know that the Embraers coming in are a big component of that. I think you're taking delivery of over 40 airplanes, 40, 41 airplanes. Can you just refresh us on and how we should think about CapEx in 2026? Thanks for taking my questions.

Speaker #1: positive .

Speaker #5: helpful . And then just I I . Great . That's about to talk CapEx want 2026 . for Last year you took this year airplanes .

Speaker #5: be a believe 26 is going to I heavy year . I the coming in Embraer is big are a component of that . I know that you're taking delivery of over 40 airplanes , 40 , Can 41 airplanes .

Speaker #5: just refresh how we should think about in 2026 ? Thanks for us on CapEx taking my questions .

Ricardo Botas: Hi, Michael, it's Ricardo, yeah, and you are right. We are expecting to receive 41 aircraft, and the CapEx is $1.7 billion net of financing. Remember that a relevant part of the CapEx delivers; it's gonna be financed through op leads and also finance leads. We are holding the-

Speaker #2: Hi , Michael , it's Ricardo . Yeah , and you are right . We are expecting receive to 41 aircrafts and the CapEx is is $1.7 billion net of financing .

Speaker #2: Remember that of the CapEx relevant part delivers . It's going to be financed through UPS and also finance lease . And we are holding the increase in the investments that we have .

Michael Linenberg: Yep.

Ricardo Botas: the increase in the investment that we have. And remember, we have a lot of investments in the retrofit of the cabins, still the renovation and the starting of the process to implement the new premium content and so on, so far. So that's the overall picture that we have. And remember, from these 41 deliveries that we are expecting, we expect to receive three additional 787s, and also the first 12 Embraers in the last quarters, the last quarter.

Speaker #2: remember , we And have a lot investments of retrofit in the cabins of the . Still , the renovation and the starting of the process to implement the new premium content and so on .

Speaker #2: the So that's picture that we have . And so And remember forth . these overall that we are expecting , expect to we receive three additional seven , eight , seven .

Roberto Alvo: So the balance is $320.

Michael Linenberg: Great. That's-

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Full Year 2025 LATAM Airlines Group SA Earnings Call

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