Lan Chile S.A. Reports Second Quarter and Accumulated First Semester 2001 Results

–Lan Chile S.A.
>(“LanChile'' or “the Company'') (NYSE: LFL – news), Chile's largest
>domestic and international passenger and air cargo carrier, announced today
>its audited, consolidated financial results for the second quarter and
>first semester periods ended June 30, 2001. All figures were prepared in
>accordance with generally accepted accounting principles in Chile and are
>expressed in millions of U.S. dollars.
>
>
> H I G H L I G H T S
>
> – Net income amounted to a loss of $2.6 million for the second
> quarter and an accumulated profit of $20.4 million for the
> first semester. This represented 24.0% and 12.1% decreases
> compared to 2000 for the second quarter and first semester,
> respectively. LanChile reported a 15.9% increase in net income
> for the first semester, excluding a $7.0 million fuel price
> effect, a $2.0 million provision for bad debt related to
> Aerolineas Argentinas, and a $2.5 million non-recurring gain
> from an additional JOL transaction.
>
> – On May 8th, LanChile expanded its existing code-share
> agreement with British Airways to include British Airways
> service between Madrid and London.
>
> – On June 1st, LanPeru began operating to three new destinations
> within Peru, including Tacna, Trujillo and Chiclayo.
>
> – On July 5th, LanChile and its administrative employee union
> agreed to a new five-year contract.
>
> – On July 17th, LanChile announced its sale of its entire
> balance of Equant N.V. shares, resulting in a $6.0 million,
> non-operating gain that will be reflected in LanChile's third
> quarter results.
>
> – On July 19th, AeroContinente, LanChile's largest domestic
> competitor (after the departure of Avant), was forced by a
> Chilean court to discontinue operations as a result of charges
> accusing AeroContinente of money laundering and association
> with drug trafficking.
>
> – On July 25th, LanChile's Board of Directors appointed Mr.
> Ignacio Guerrero as a new Board Member in replacement of Mr.
> Sebastian Pinera who resigned as member of the Board on July
> 12th. In addition, Mr. Jorge Awad was elected as the new
> Chairman of the Board.
>
> – On July 25th, LanChile's Board of Directors agreed to form
> three new subsidiaries as part of a corporate restructuring
> plan aimed at creating separate passenger and cargo holding
> companies.
>
> Comments from the Chief Financial Officer
>
> LanChile experienced a difficult second quarter, which due to the
>seasonality of the business is always the weakest. Results for the
>quarter were negatively impacted by high fuel prices and the economic
>crisis in Argentina, particularly with respect to weaker cargo traffic
>throughout the region. The Company's 4.1% growth in revenues, which
>was completely related to increased passenger traffic did not fully
>offset the 6.9% increase in costs, which were related to a significant
>increase in overall operations. As a result, operating margins for the
>quarter fell from 3.8% to 1.1%. Nevertheless, second quarter results
>were in line with market expectations and continue to demonstrate
>LanChile's ability to manage difficult conditions while other regional
>airlines continue to lose money or go out of business.
> During the second quarter, LanChile's overall operations grew 7.5%
>in ATKs as a result of a 22.6% increase in passenger ASKs. Domestic
>passenger traffic increased 34.9% reflecting changing competitive
>dynamics and market growth, while international passenger traffic
>increased 18.2% due to new services on long haul and regional routes.
>Because the 22.6% increase in passenger capacity outpaced the 21.5%
>increase in passenger traffic, passenger load factors fell 0.6 points.
>Per unit (ASK) passenger revenue decreased 9.9% primarily due to a
>9.1% decrease in passenger yields, which reflected increased capacity
>and strong competition. In the cargo business, capacity increased
>0.9%; however, traffic decreased 4.5% due to weak southbound demand to
>Argentina, Brazil, Chile and Colombia. As a result, cargo load factors
>fell 3.8 points, and per unit (ATK) cargo revenue decreased 4.2%.
>Nevertheless, a 1.2% increase in cargo yields reflected re-routing of
>the cargo network and a continued fuel surcharge. For the system,
>overall per ATK unit revenues decreased 3.2% for the quarter, while
>overall per ATK unit costs decreased 0.7%.
> For the first semester, despite economic instability in the
>region, high fuel prices and a competitive market, LanChile has been
>successful at maintaining profitability. Excluding a $7.0 million fuel
>price effect, a $2.0 million provision for bad debt with Aerolineas
>Argentinas (primarily related to unrecoverable interline ticket
>sales), and a $2.5 million non-recurring gain from an additional
>Japanese Operating Lease ("JOL") transaction, the Company increased
>net income by 15.9%. The passenger and cargo business mix, the ability
>to grow passenger operations without significantly affecting
>operational efficiency, and the focus on cost controls, have all
>contributed to the Company's successful first half.
> Looking ahead, the Company expects to continue facing difficult
>economic conditions as well as high fuel prices. In the passenger
>business, the Company will strive to maintain per unit income as it
>will continue to expand passenger capacity at a double-digit pace for
>the remainder of the year. Capacity increases for the year will be
>driven by: the incorporation of larger Airbus aircraft, new non-stop
>services to New York and Madrid, new operations in Ecuador and a
>changing competitive environment in the domestic passenger market. In
>the cargo business, the Company will continue to focus on improving
>operating efficiencies, which should help reduce the impact of the
>slowing air cargo demand in the region, particularly in Argentina.
>
> Consolidated Second Quarter Results
>
> For the second quarter 2001, the Company reported a 68.6% decrease
>in operating income, which amounted to $3.9 million, and a 24.0%
>decrease in net income, which amounted to $2.6 million. Excluding a
>non-recurring, non-operating $2.5 million gain from the JOL
>transaction in the second quarter and a one-time $2.0 million
>provision for bad debt with Aerolineas Argentinas, net income
>decreased 48.2% and amounted to a net loss of $3.1 million.
>
> a.. Total operating revenues amounted to $340.3 million, reflecting a
>4.1% increase compared to revenues for the same period of 2000. Increased
>revenues comprise a 10.5% increase in total passenger revenues, which
>amounted to $181.3 million, and a 4.2% increase in other revenues, which
>amounted to $21.2 million. These gains were partially offset by a 3.3%
>decrease in total cargo revenues, which amounted to $137.8 million. Total
>passenger revenues grew as a result of a 21.5% increase in passenger
>traffic measured in RPKs. Passenger load factors decreased 0.6 points to
>63.5% reflecting the 22.6% increase in capacity measured in ASKs. Passenger
>yields based on RPKs declined 9.1% due to the significant increase in
>passenger capacity and strong competition in the domestic and international
>passenger markets. Total cargo revenues decreased as a result of a 4.5%
>reduction in cargo traffic measured in RTKs. Cargo load factors decreased
>3.8 points reflecting the 4.5% decrease in traffic and a 0.9% increase in
>capacity (ATKs). Cargo yields increased 1.2% as a result of both network
>re-routing which resulted in higher yields over shorter distances and the
>continued fuel surcharge.
> b.. Total operating expenses increased 6.9% during the second quarter
>while overall operations as measured in ATKs increased 7.5%. Total per unit
>operating costs, which include aircraft interest expenses, decreased 0.7%.
>Fuel costs increased 15.3% due to a 13.6% increase in consumption and a
>1.5% increase in price. In the second quarter 2001, the Company realized a
>$0.8 million benefit from fuel hedging positions. Aircraft rental expenses
>increased 24.5% due to the incorporation of five new Airbus A320 and two
>new Airbus A340 aircraft into the Company's fleet. Aircraft maintenance
>expenses increased 13.4% due to increases in passenger operations,
>provisions for the Boeing 767 freighter fleet, and expenses related to the
>DC-8 fleet. Depreciation and amortization costs increased 13.4%, reflecting
>the incorporation of the third Boeing 767 freighter in August 2000 and two
>Boeing 737 aircraft which were purchased during the second quarter to
>increase domestic passenger operations. Other operating expenses increased
>11.4% as a result of a increased operations and a one-time $2.0 million
>provision for bad debt related to Aerolineas Argentinas. Increases in
>operating expenses were offset by a 7.9% reduction in total commissions to
>agents. As a percentage of sales, commissions fell 1.9 points to 14.8%
>reflecting the Company's focus on reducing distribution costs in both the
>passenger and cargo businesses. All other operating expenses increased in
>line with operations.
> c.. Operating margins fell 2.7 points from 3.8% to 1.1%. Total
>non-operating results amounted to a net loss of $7.1 million compared to a
>net loss of $12.1 million during the same quarter of 2000. Decreased
>non-operating expenses primarily reflected a $2.5 million, non-recurring
>gain from the JOL transaction and a $2.2 million reduction in foreign
>exchange losses which reflected a $3.2 million foreign exchange loss in
>2001 compared to a $5.4 million loss in 2000. For the second quarter of
>2001, the Company also recorded a $0.4 million non-operating loss related
>to LanPeru as compared to a $0.7 million loss in 2000. Accordingly, net
>margins amounted to -0.8%, reflecting a 0.2-point decrease as compared to
>the same period of 2000.
> Consolidated First Semester Results
>
> For the first semester period ended June 30, 2001, the Company's
>net income decreased 12.1% to $20.5 million. However, excluding the
>$2.0 million provision for bad debt with Aerolineas Argentinas, $7.0
>million in extra costs directly related to higher fuel prices, and the
>$2.5 million gain from the JOL transaction, net income for 2001
>increased 15.9% and amounted to $27.0 million. Total revenues
>increased 5.1% comprising a 9.5% increase in passenger revenues and a
>0.2% increase in cargo revenues. System RTKs increased 3.7% while ATKs
>increased 6.5% resulting in a 1.8-point decrease in the overall load
>factor which reached 68.6%. Total per unit system yields as measured
>per RTK increased 1.7%, reflecting a gain in cargo yields due to cargo
>re-routing and the continued cargo fuel surcharge.
> Total operating expenses increased 6.1% primarily due to increased
>aircraft rental expenses, higher fuel costs, and increased aircraft
>maintenance expenses. Per ATK costs were flat year-over-year; however,
>excluding the $7.0 million in extra costs directly related to higher
>fuel prices, per unit costs decreased 1.0%. Increased operating
>expenses comprise: i) a 22.5% increase in aircraft rental expenses
>resulting from the incorporation of two new Airbus A340 and five new
>Airbus A320 aircraft into the Company's fleet, ii) a 19.7% increase in
>fuel expenses resulting from a 6.2% increase in prices and a 12.6%
>increase in consumption, and iii) a 17.4% increase in maintenance
>expenses associated with increases in: passenger operations,
>provisions for the Boeing 767 freighter fleet, and expenses related to
>the DC-8 fleet. Commissions as a percentage of sales decreased 2.2
>points to 14.7% reflecting the Company's focus on reducing
>distribution costs. Other rentals and landing fees decreased 2.2%
>primarily due to the decreased use of wet-leased 747 freighters as
>well as the decreased operations of purchased cargo belly space on
>other airlines. Accordingly, operating margins for the first semester
>2001 reached 5.4%, reflecting a 0.9-point decrease compared to 2000.
>
> Recent Events
>
> Expansion of British Airways Code Share Agreement
>
> On May 8th, LanChile expanded its existing bilateral code-share
>agreement with British Airways to include British Airways flights
>between Madrid and London. By expanding its agreement with British
>Airways, the Company continues to improve its competitive position in
>Madrid for connecting service between Chile and European destinations.
>Currently, through direct and code-share operations, LanChile offers
>its passengers service to eight destinations in Europe.
>
> Expansion of LanPeru Domestic Operations
>
> On June 1st, LanPeru expanded its domestic service to include
>three new Peruvian destinations: Tacna, Trujillo and Chiclayo. LanPeru
>currently operates two Boeing 737-200 aircraft in the domestic market
>and controls approximately 30% market share on the domestic routes,
>which it operates. LanPeru expects to reach operational break-even by
>the end of the year.
>
> New Agreement with LanChile Administrative Employee Union
>
> On July 5th, LanChile reached a collective agreement with its
>administrative employee union, which represents a total of
>approximately 1,300 unionized and 1,000 non-unionized employees. The
>Company and the union agreed to a new, five-year labor contract which
>is scheduled to expire on May 31, 2006. The new contract includes new
>benefits for workers, such as payments as a function of company
>benefits, merit awards, and higher salaries based on performance
>evaluations.
>
> Sale of Entire Balance of Stake in Equant N.V.
>
> On July 17th, LanChile announced that, the Societe Internationale
>de Telecommunications Aeronautiques, S.C., or SITA foundation, sold
>the Company's entire balance of Equant shares (291,319) which, as part
>of France Telecom S.A.'s acquisition of Equant in June 2001 had been
>converted into 132,417 shares of France Telecom. The Company's 132,417
>shares of France Telecom were sold at a gross price of <128>57.00 per
>share, which generated a net gain of approximately $6.0 million. This
>gain will be reflected in the Company's third quarter results as
>non-operating, non-recurring income.
>
> Termination of AeroContinente Operations
>
> On July 19th, the Fifth Criminal Court of Chile forced
>AeroContinente, the Company's largest domestic competitor (since the
>departure of Avant), to discontinue operations as a result of charges
>brought against the Company by the Chilean National Defense Council
>(CDE) for money laundering and association with drug trafficking. As a
>result, four AeroContinente employees were arrested for interrogation,
>six Boeing AeroContinente Aircraft were seized, 15 AeroContinente
>offices in Chile were closed.
>
> New Member and Chairman of Board of Directors
>
> On July 25th, LanChile's Board of Directors appointed Mr. Ignacio
>Guerrero as a new member of the Board of Directors in replacement of
>Mr. Sebastian Pinera, who resigned as a member of the Board of
>Directors on July 12th. In addition, the Board elected Mr. Jorge Awad
>as its new Chairman. Mr. Awad replaces Mr. Pinera who served as
>Chairman from October 2000 to April 2001. Mr. Awad previously served
>as Chairman for six years until October 2000.
>
> Initiation of Corporate Restructuring
>
> On July 25th, LanChile's Board of Directors agreed to form three
>new subsidiaries as part of a corporate restructuring plan aimed at
>creating separate passenger and cargo holdings under the LanChile
>corporate holding. By separating the passenger and cargo businesses
>through the creation of two different holding companies, the Company
>expects to better enable the passenger and cargo businesses to reach
>their full potential, improve internal transparency and accountability
>among passenger and cargo managers, and facilitate the incorporation
>of strategic partners within the different businesses.
>
> Company Description
>
> Lan Chile S.A. is the largest domestic and international
>passenger/cargo air carrier in Chile and one of the leading airlines
>in Latin America. Together with its various code-share arrangements,
>the Company serves 15 destinations in Chile, 18 destinations
>throughout other cities in Latin America, 14 destinations in the
>United States, eight destinations in Europe and two in the South
>Pacific. Currently, the Company operates 44 passenger aircraft and
>eight cargo freighters. Lan Chile maintains alliances with American
>Airlines, Alaska Airlines, AeroMexico, TAM, Varig, British Airways and
>Iberia Airlines and is an official member of the oneworld(TM) global
>alliance. For more information visit www.lanchile.com or
>www.oneworldalliance.com.
>
> Statements included in this report regarding the Company's
>business outlook and anticipated financial and operating results
>regarding the Company's growth potential, constitute forward-looking
>statements and are based on management expectations regarding the
>future of the company. These expectations are highly dependent on
>changes in the market, general economic performance of the home
>country, industry and international markets, and are therefore subject
>to change.
>
>LanChile S.A. Consolidated Income Statement in thousands of US$ July 30,
>2001
>
>For the Second Quarter- ended June 30,
>
>LanChile LanChile
>
>a.. (consolidated) (consolidated) 2000 2001 % Change
>REVENUES Passenger 164,115 181,267 10.5% Cargo 142,530 137,781 -3.3% Other
>20,381 21,227 4.2%
>
>TOTAL OPERATING REVENUES 327,025 340,274 4.1%
>
>EXPENSES Wages and Benefits (49,786) (50,875) 2.2% Aircraft Fuel (46,663)
>(53,814) 15.3% Commission to Agents (51,408) (47,367) -7.9% Depreciation
>and
>Amortization (10,862) (12,316) 13.4%
>
>Other Rentals and
>Landing Fees (60,758) (62,721) 3.2%
>
>Passenger Services (8,042) (8,083) 0.5% Aircraft Rentals (28,281) (35,196)
>24.5% Aircraft Maintenance (20,424) (23,166) 13.4% Other Operating
>Expenses (1) (38,493) (42,876) 11.4%
>
>TOTAL OPERATING EXPENSES (314,717) (336,413) 6.9%
>
>OPERATING INCOME (LOSS) 12,308 3,861 -68.6%
>OPERATING MARGIN 3.8% 1.1%
>
>OTHER INCOME ( EXPENSE ) Interest Income 928 1,586 71.0% Interest Expenses
>(7,273) (7,344) 1.0% Miscellaneous-Net (2) (5,790) (1,340) -76.9%
>
>TOTAL (12,135) (7,098) -41.5%
>
>Minority Interest 3 11 299.1%
>
>INCOME (LOSS) BEFORE
>INCOME TAXES 176 (3,227) nm
>
>Income Taxes (2,252) 652 nm
>
>NET INCOME (LOSS) (2,076) (2,575) 24.0% NET INCOME (LOSS) – LESS
>EXTRAORDINARY ITEMS (3) (2,076) (3,076) 48.2%
>NET MARGIN -0.6% -0.8%
>NET MARGIN – LESS
>EXTRAORDINARY ITEMS -0.6% -0.9%
>
>Shares Outstanding 318,909,090 318,909,090 Earnings per share -0.01 -0.01
>24.0% Earnings per ADR -0.03 -0.04 24.0%
>
>Note
>
> a.. (1): Other Operating Expenses include a $2.0 million non-recurring
>provision for losses related to bad debt with Aerolineas Argentinas
> b.. (2): 2001 Miscellaneous-net figures include a $2.5 million
>non-recurring gain related to an additional Japanese Operating Lease
>transaction.
> c.. (3): Extraordinary items include the $2.5 million non-recurring gain
>related to the JOL transaction and the $2.0 million loss related to the
>provision for Aerolineas Argentinas.
>LanChile S.A. Consolidated Income Statement in thousands of US$ July 30,
>2001
>
>For the First Semester – ended June 30,
>
>LanChile LanChile
>
>a.. (consolidated) (consolidated) 2000 2001 % Change
>REVENUES Passenger 374,802 410,580 9.5% Cargo 281,749 282,343 0.2% Other
>41,596 40,590 -2.4%
>
>TOTAL OPERATING
>REVENUES 698,147 733,513 5.1%
>
>EXPENSES Wages and Benefits (99,900) (102,821) 2.9% Aircraft Fuel (99,708)
>(119,324) 19.7% Commission to Agents (110,673) (101,546) -8.2% Depreciation
>and
>Amortization (21,689) (23,892) 10.2%
>
>Other Rentals and
>Landing Fees (126,842) (124,034) -2.2%
>
>Passenger Services (17,790) (18,413) 3.5% Aircraft Rentals (57,697)
>(70,695) 22.5% Aircraft Maintenance (41,736) (48,984) 17.4% Other Operating
>Expenses (1) (77,962) (83,868) 7.6%
>
>TOTAL OPERATING
>EXPENSES (653,998) (693,576) 6.1%
>
>OPERATING INCOME (LOSS) 44,149 39,937 -9.5%
>OPERATING MARGIN 6.3% 5.4%
>
>OTHER INCOME (EXPENSE) Interest Income 2,215 3,110 40.4% Interest Expenses
>(14,755) (15,919) 7.9% Miscellaneous-Net (2) (3,550) (2,866) -19.3%
>
>TOTAL (16,090) (15,675) -2.6%
>
>Minority Interest (71) (63) -11.3%
>
>INCOME (LOSS) BEFORE
>INCOME TAXES 27,989 24,199 -13.5%
>
>Income Taxes (4,707) (3,729) -20.8%
>
>NET INCOME (LOSS) 23,282 20,470 -12.1% NET INCOME (LOSS) –
>LESS EXTRAORDINARY
>ITEMS (3) 23,282 19,969 -14.2%
>NET MARGIN 3.3% 2.8%
>NET MARGIN – LESS
>EXTRAORDINARY ITEMS 3.3% 2.7%
>
>Shares Outstanding 318,909,090 318,909,090 Earnings per share 0.07 0.06
>-12.1% Earnings per ADR 0.37 0.32 -12.1%
>
>Note
>
> a.. (1): Other Operating Expenses include a $2.0 million non-recurring
>provision for losses related to bad debt with Aerolineas Argentinas
> b.. (2): 2001 Miscellaneous-net figures include a $2.5 million
>non-recurring gain related to an additional Japanese Operating Lease
>transaction.
> c.. (3): Extraordinary items include the $2.5 million non-recurring gain
>related to the JOL transaction and the $2.0 million loss related to the
>provision for Aerolineas Argentinas.
>LanChile S.A. Consolidated Operating Statistics – Traffic & Capacity July
>30, 2001 Financial Information shown in US$ Dollars
>
>For the Second Quarter
>
>ended June 30,
>
>2000 2001 % Change
>
>
>Total System
>ATKs (millions) 963.85 1,036.39 7.5%
>ASKs (millions) 3,235.44 3,966.33 22.6%
>RTKs (millions) 673.83 692.06 2.7%
>RPKs (millions) 2,072.60 2,518.60 21.5%
>Overall load factor
>
>a.. (based on ATKs) % 69.9% 66.8% -3.1 pts.
>Break-even load factor
>a.. (based on ATKs) % 68.6% 67.2% -1.4 pts.
>Yield based on RTKs
>a.. (US cents) 45.51 46.10 1.3%
>Operating Revenues per ATK
>a.. (US cents) 31.81 30.78 -3.2%
>Operating Costs per ATK
>a.. (US cents) 31.20 30.97 -0.7%
>Passenger
>ASKs (millions) 3,235.44 3,966.33 22.6%
>RPKs (millions) 2,072.60 2,518.60 21.5%
>RTKs (millions) 186.53 226.67 21.5%
>Load Factor
>
>a.. (based on ASKs) % 64.1% 63.5% -0.6 pts.
>Yield based on RPKs (US cents) 7.92 7.20 -9.1%
>Yield based on RTKs (US cents) 87.98 79.97 -9.1%
>Revenue/ASK (US cents) 5.07 4.57 -9.9%
>Cargo
>ATKs (millions) 672.28 678.05 0.9%
>RTKs (millions) 487.30 465.38 -4.5%
>Load Factor (based on ATKs) % 72.5% 68.6% -3.8 pts.
>Yield based on RTKs (US cents) 29.25 29.61 1.2%
>Revenue/ATK (US cents) 21.20 20.32 -4.2%
>
>For the First Semester
>
>ended June 30,
>
>2000 2001 % Change
>
>
>Total System
>ATKs (millions) 2,020.60 2,152.23 6.5%
>ASKs (millions) 7,149.73 8,490.29 18.7%
>RTKs (millions) 1,423.32 1,476.45 3.7%
>RPKs (millions) 4,913.17 5,759.38 17.2%
>Overall load factor
>
>a.. (based on ATKs) % 70.4% 68.6% -1.8 pts.
>Break-even load factor
>a.. (based on ATKs) % 67.0% 65.9% -1.1 pts.
>Yield based on RTKs
>a.. (US cents) 46.13 46.93 1.7%
>Operating Revenues per ATK
>a.. (US cents) 32.49 32.20 -0.9%
>Operating Costs per ATK
>a.. (US cents) 30.93 30.94 0.0%
>Passenger
>ASKs (millions) 7,149.73 8,490.29 18.7%
>RPKs (millions) 4,913.17 5,759.38 17.2%
>RTKs (millions) 442.19 518.34 17.2%
>Load Factor
>
>a.. (based on ASKs) % 68.7% 67.8% -0.9 pts.
>Yield based on RPKs (US cents) 7.63 7.13 -6.5%
>Yield based on RTKs (US cents) 84.76 79.21 -6.5%
>Revenue/ASK (US cents) 5.24 4.84 -7.8%
>Cargo
>ATKs (millions) 1,389.35 1,380.65 -0.6%
>RTKs (millions) 981.14 958.11 -2.3%
>Load Factor (based on ATKs) % 70.6% 69.4% -1.2 pts.
>Yield based on RTKs (US cents) 28.72 29.47 2.6%
>Revenue/ATK (US cents) 20.28 20.45 0.8%
>
>LanChile S.A. Consolidated Balance Sheet – In thousands of US$ July 30,
>2001
>
>At June 30,
>
>2000 2001
>
>ASSETS CURRENT ASSETS
>Cash 4,876 5,818
>Time deposits 12,767 62,462
>Marketable securities 0 0
>Accounts and notes receivable
>
>a.. trade and other 146,222 166,158
>Notes and accounts receivable
>from related companies 5,933 20,386
>Inventories 27,445 31,121
>Prepaid and recoverable taxes 16,516 14,214
>Prepaid expenses 11,284 21,186
>Deferred taxes 1,238 3,418
>Other current assets 2,179 3,335
>
>Total Current Assets 228,460 328,098
>
>PROPERTY AND EQUIPMENT
>Aircraft 420,344 512,689
>Other 175,921 204,294
>
>Total Property and
>
>Equipment 596,265 716,983
>
>OTHER ASSETS
>Investments 1,860 2,153
>Goodwill 32,377 34,448
>Notes and accounts receivable
>
>from related companies 7,779 7,869
>Long-term accounts receivable 0 8,527
>Long-term deferred taxes 1,253 9,273
>Deposits and other 90,095 54,229
>
>Total Other Assets 133,364 116,499
>
>Total Assets 958,089 1,161,580
>
>LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES
>Bank loans 62 0
>Current portion of long-term
>
>loans from financial institutions 31,415 35,231
>Current portion of long term
>
>leasing obligations 9,353 12,727
>Accounts payable 72,232 108,269
>Notes and accounts payable to
>
>related companies 5,533 3,173
>Other creditors 30 26
>Air traffic liability 42,206 72,746
>Other current liabilities 66,276 95,323
>
>Total Current Liabilities 227,107 327,495
>
>LONG-TERM LIABILITIES
>Loans from financial institution 324,168 376,685
>Other creditors 552 473
>Provisions 47,133 64,478
>Deferred income tax provision 0 0
>Air traffic liability 55,159 44,971
>Deferred Taxes 5,989 22,799
>Obligations under capital leases 23,240 20,648
>
>Total Long-Term
>
>Liabilities 456,241 530,054
>
>MINORITY INTEREST 573 607
>
>SHAREHOLDERS' EQUITY
>Common stock 134,303 134,303
>Reserves 2,620 2,620
>Provisionary dividend 0 0
>Retained earnings 137,245 166,501
>
>Total Shareholders' Equity 274,168 303,424
>
>Total Liabilities and
>
>Shareholders' Equity 958,089 1,161,580
>
>Note that 2000 figures have been reclassified to conform to 2001 accounting
>criteria and presentation
>
>
>
>——————————————————————————–
>Contact:
> Investor Relations LanChile S.A. (Chile)
> Alejandro de la Fuente – Chief Financial Officer
> Daniel Jones – [email protected]
> Tel: (562) 565-2538 / 6812
> or
> i-advize Corporate Communications, Inc. (New York)
> Maria Barona, [email protected]
> Blanca Hirani, [email protected]
> Tel: (212) 406-3690

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