Fourth Quarter & Full Year 2007 Results PresentationJanuary 30, 2008
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This presentation may include forward-looking comments regarding the Company’s business outlook and
anticipated financial and operating results. These expectations are highly dependent on the economy, the
airline industry, commodity prices, international markets and external events. Therefore, they are subject to
change and we undertake no obligation to publicly update or revise any forward looking statements to reflect
events or circumstances that may arise after the date of this presentation. More information on the risk
factors that could affect our results are contained on our Form 20-F for the year ended December 31, 2006.
Information, tables and logos contained in this presentation may not be used without consent from LAN
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Contents
I. 4Q07 Financial Results
II. Key Developments & Future Outlook
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4Q07 Highlights
• Despite high fuel prices, LAN reported a 7.7% increase in net income and a 12.6% operating margin. Once again, LAN demonstrated the resiliency of its business model and its ability to operate in a high fuel price environment.
• Including the fuel hedging gain obtained in 4Q07, operating income amounted to US$152.7 million, an 11.5% increase over fourth quarter 2006.
US$ millions 4Q06 4Q07 % Chg
Revenues 854 1.046 22.6% Passenger 514 642 24.9% Cargo 303 349 15.5% Other 37 54 47.9%
Total Operating Expenses (716) (914) 27.8%
Operating Income 138 132 -4.4% Operating Margin 16.2% 12.6% -3.6 pp
Net Income 94 101 7.7%
EBITDAR* 210 217 3.4% EBITDAR Margin 24.6% 20.7% -3.9 pp
* EBITDAR = Operating income + depreciation & amortization + aircraft rentals (does not include fuel hedging gains/losses)
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2007 Highlights
• For FY 2007, LAN achieved a strong operating performance with important revenue increases in all its business areas.
• Net Income amounted to US$308.3 million, a 44.8% increase compared to last year (excluding 2006 extraordinary items).
• Operating and EBITDAR Margins for 2007 reached record highs with significant improvements as compared to 2006.
US$ millions 2006 2007 % Chg
Revenues 3.034 3.525 16.2% Passenger 1.813 2.197 21.2% Cargo 1.073 1.154 7.6% Other 148 173 17.3%
Total Operating Expenses (2.731) (3.112) 13.9%
Operating Income 303 413 36.6% Operating Margin 10.0% 11.7% 1.8 pp
Net Income 241 308 27.8%
EBITDAR* 583 726 24.5% EBITDAR Margin 19.2% 20.6% 1.4 pp
* EBITDAR = Operating income + depreciation & amortization + aircraft rentals (does not include fuel hedging gains/losses)
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4Q07 - EBITDAR Margin Affected by High Fuel Prices
EBITDAR [MMUS$]EBITDAR [MMUS$] 217217210210
System ATK [mill.]System ATK [mill.] 1,8681,8681,7391,739
+3.4%+3.4%
+7.4%+7.4%
EBITDAR Margin = Operating income + depreciation & amortization + aircraft rentals / Revenues
24,6%
4Q2006
6,2%30%
5%
20%
Load Factor
3,9pp
35%
10%
25%
0Yield 4Q2007
7,9%
Fuel Price
20,7%
1,8%
Others
0,4%
15%
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Passenger Business
Revenue growth driven by a 15.5% growth in traffic and an 8.1% increase in yields
ASK [mill.]ASK [mill.] 8,3298,3297,2747,274
Passenger RASK [US$c]Passenger RASK [US$c] 7.77.77.17.1
+14.5%+14.5%
+9.1%+9.1%
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75
350
400
450
500
550
600
650
514
4Q2006 Capacity
47
Yield Load Factor
642
4Q2007
+24,9%
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Cargo Business
Growth driven by a 9.2% capacity expansion and a 9.2% increase in yields
ATK [mill.]ATK [mill.] 998998914914
Cargo RATK [US$c]Cargo RATK [US$c] 35,035,033,133,1
+9,2%+9,2%
+5,8%+5,8%
1128
0
50
100
150
200
250
300
350
400
303
4Q2006 Capacity
29
Yield Load Factor
349
4Q2007
+15,5%
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4Q07 - Cost Analysis
FX and inflation
38% increase in fuel prices
1% reduction in average commissions
10 new owned aircraft in 2007
Increased operations
More passengers & higher compensations
One additional leased Airbus A430
Escalation in maintenance contracts
Higher sales & distribution and marketing expenses
4Q07 4Q06 Var. (%)
Wages & Benefits 140 123 13,9%
Fuel Costs 294 191 53,9%
Commissions to Agents 115 104 11,1%
Depreciation & Amortization 42 33 29,6%
Other Rental & Landing Fees 104 93 11,7%
Passenger Service 19 15 27,0%
Aircraft Rentals 43 39 9,3%
Maintenance Expenses 41 27 52,0%
Other Operating Expenses 115 91 27,1%
Total Costs 914 716 27,8%
(US$ millions) MAIN IMPACTS
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Contents
I. 4Q07 Financial Results
II. Key Developments & Future Outlook
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40
50
60
70
80
90
100
110
03-01-2006
08-02-2006
16-03-2006
21-04-2006
26-05-2006
05-07-2006
09-08-2006
14-09-2006
19-10-2006
27-11-2006
04-01-2007
09-02-2007
19-03-2007
24-04-2007
30-05-2007
05-07-2007
09-08-2007
14-09-2007
19-10-2007
26-11-2007
0,0
0,5
1,0
1,5
2,0
2,5
3,0
WTI WTI avr 4Q06 JET
WTI avr 4Q07 Jet avr 4Q06 Jet avr 4Q07
Increased Fuel Prices during 4Q07
Source: Bloomberg
Fuel & Jet Fuel (2006 – 2007)
US$/Barrel
Average 4Q07
JET: US$ 2.54 /g (+44%)
WTI: US$ 90.5 /b (+51%)
Average 4Q06
JET: US$ 1.76 /g
WTI: US$ 60.0 /b
US$/Gallon
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Fuel pass-through in cargo businesses
Change in passenger fuel pass-through table in December 2007
Fuel Strategy: Fuel Cost Pass-Through Mechanism
International US$ 1.00 / Kg.
From Europe Euro 0.80 / Kg.
Regional (US$) Long Haul (US$) Regional (US$) Long Haul (US$)< 40 0 0 <40 0 0
40 - 45 10 20 40-50 10 20 45 - 50 13 30 50-60 15 40 50 - 55 15 40 60-70 20 60 55 - 60 18 50 70-80 25 80 60 - 65 20 60 80-90 30 100 65 - 70 23 70 90< * * 70 - 75 25 80 75 - 80 28 90 80 - 85 30 100 85 - 90 33 110 90 - 95 35 120 95 - 100 38 130 100 - 105 40 140 105 - 110 43 150
Referencia WTI US$
Fuel Surcharge Internacional (OW) Referencia WTI US$
Fuel Surcharge Internacional (OW)International Fuel Surcharge
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Fuel Hedging Program 2008 (*)
(*) Hedging as of January 29, 2008
Fuel Strategy: Fuel Hedging
30%
40%
48% 48%
0%
10%
20%
30%
40%
50%
60%
1Q08 2Q08 3Q08 4Q08
% T
otal
Con
sum
ptio
n H
edge
d
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Diversified Business Model and Capacity Allocation
•International (Long Haul) +14%
•Regional +13%
•Chile domestic +14%
•Peru domestic +16%
•Argentina domestic +36%
Total ASK Growth +15%
Diversified Passenger Capacity(% ASKs)
50%
International(Long Haul)
24%
Regional
15%Dom. Chile
7%
Dom. Perú4%
Dom. Argentina
4Q07 vs. 4Q06 - Capacity Growth by Region
62%Passenger
33%Cargo
5%
Others
Diversified Business Model(% Operating Revenues)
15
0%
5%
10%
15%
20%
25%
30%
2006 2007 2008E
2008 Estimated Capacity Expansion
Planes Hours Seats
19.5%
20-22%
11.5%
0%
5%
10%
15%
2006 2007 2008E
7.0%6.9%
8-10%
Passenger ASK Growth Cargo ATK Growth
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Importantes iniciativas....crecimiento fuera de Chile....Passenger Business 2008
• Additional frequencies on long-haul routes to Europe and the South Pacific.
• Consolidation of position on regional routes.
• Sustained growth on routes between Latin America and North America.
Growing Routes Action Plans
+34%
+20%
+13%
+8%
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Fleet Plan
0
2226 28 28 28 28
37
5357
66 66
5
55
5
9
99
92
3
4
9
51
32
59
9
0
30
60
90
120
150
2007 2008 2009 2010 2011 2012-16Boeing 737- 200 Boeing 767- 300ER Airbus A320/A319/A318Boeing 787 Airbus 340- 300 Boeing 767- 300F CargoBoeing 777- 200F Cargo Boeing 737- 200F Cargo
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1
FREIGHTERS
PASSENGERAIRCRAFT
83 139+ 67%
CAPEX ’07-’16(USD MM) 471 936 269 243 660 3500
US$6.1 Billion
2 4
18
0
10
20
30
40
50
60
70
N° Aircraft LH
MIN MAX PLAN
-34 %
-22 %
-52 %
-36 %
Fleet Plan: LAN Maintains the Flexibility to Adjust its Fleet SizeN
umbe
r of
Lon
g H
aul P
asse
nger
Airc
raft
Fourth Quarter & Full Year 2007 Results PresentationJanuary 30, 2008