Great. Thank you very much.

Good morning, everyone, and thanks for joining the call. This morning, we have here in the room in Santiago, Andrés Osorio, who's the CFO of LATAM; Roberto Alvo, who's the Chief Corporate Officer; and we're also joined by Francisco [indiscernible], who is in charge of the domestic Brazil passenger operations; and Damian Scokin, who is the CEO of the International Passenger operation; as well as Andrés del Valle, who is the Corporate Finance Director.

I'm going to turn this call over to Andrés Osorio for some opening remarks, and then we're going through the slide presentation, which is on our website.

Hi, everybody. Good morning.

Thanks for being with us. I want to remark some highlights before Gisela presents, on a more detail, our information.

LATAM has shown a significant improvement in operating income despite the negative effect of the depreciation of the Brazilian real and the nonrecurring costs related to the redeliveries of certain aircraft. Over the past year, LATAM has effectively completed the restructuring of its balance sheet, including the successful capital increase that raised $940 million.

With this, the company achieved significant progress in an important and strategic progress that seeks to strengthen the balance sheet and financial position of LATAM through reducing the leverage and improving liquidity. As of December, LATAM has reduced exposure to the Brazilian real on TAM's balance sheet from $4.1 billion on June 30, 2012, to $2 billion by the end of 2013, and we expected to reduce this exposure to approximately $500 million by June 2014.

The company has accelerated its fleet restructuring plan in order to phase out our older aircrafts and incorporate new technologies on larger aircraft models in order to have cost-efficient operation, increasing LATAM competitiveness in the long haul and better product for our passenger. This has led to anticipated redeliveries of certain aircraft, all of which generated approximately $29 million in nonrecurring cost during 2013 and $17.5 million for the fourth quarter.

TAM continues to make significant improvement in the financial result of the domestic Brazil passenger operations, maintaining capacity discipline, 6% reduction quarter-over-quarter. Improved market segmentation and revenue management practices that have result in increased yield and healthy load factor of 81.6%, leading to a significant increase in RASK, 11.3% in Brazilian reals.

LATAM continues to see positive results from our strategy of rationalizing international passengers. RASK has increased as well, mainly as a result of the capacity rationalization and the consolidation of Guarulhos Airport as the main hub for the regional and long-haul traffic in South America.

More details about these highlights with comments from Gisela. Thanks again.

If you turn to the slide presentation on Slide #2, which is the first slide, you can see some highlights of our results for the quarter and for the full year. You can see that in the fourth quarter, revenues are down approximately 2%.

This is despite the devaluations of the local currencies both in Brazil and in the other Spanish-speaking countries. And we have a decline in operating expenses that leads to a strong improvement in our operating income.

Operating margin for the quarter reached 6.9% and, for the year, reached 4.9%. We recognized during the fourth quarter of 2013 and also, to some extent, during earlier quarters of the year, certain nonrecurring expenses related to the restructuring of our fleet, which we'll describe in more detail later on.

But basically, excluding these expenses, which amounted to $17 million in the fourth quarter, operating margin reached 7.4%. At the net income level, we have a $46 million loss that is mainly related to the foreign exchange loss as a result of the depreciation of the Brazilian currency compared to the September 2013 figure.

That depreciation was about 6%. If we look at the next slide, you can see the analysis of our improvements in EBIT margin.

We have a negative impact from the yield declines. That's approximately a 1% yield decline in the passenger business overall and approximately a 7% yield decline in the cargo business.

And this is offset by improvement in load factors, both in the passenger and in the cargo business. We also have a positive impact from fuel expenses as a result of a 6% decline in the fuel price and also, a 6% reduction in the number of fuel gallons consumed as a result of smaller operations.

Overall, ASKs, during this quarter, reduced by 4.5% as compared to the fourth quarter of 2012. If you go to Slide #4, you can see that in our -- we are providing more detail than we had previously provided with respect to our revenues per ASK.

Overall, for LATAM passenger business, revenue per ASK was up almost 4%, and you can see on the slide the breakdown among the different business units. In the international passenger business unit, capacity was down approximately 7%, and revenue per ASK was up approximately 7%, mainly driven by a strong improvement in load factors of about 6 points.

In the domestic Brazil business unit, which represents about 34% of our total passenger revenue, passenger capacity is down approximately 6%. Load factors are up 1.4 percentage points, and revenue per ASK is up 2% in U.S.

dollars. If we look at this number in the Brazilian real, it's an increase of approximately 11.3%.

When we look at the Spanish-speaking countries, which are the other 5 countries in South America where the Latin airlines provide domestic passenger services, all of these together represent 16% of our total passenger revenues. And here, we've been increasing passenger capacity approximately 6% in the quarter with stronger load factors, but a 5.5% decline in revenues per ASK.

This decline is mainly driven by lower yields that results from a devaluation of local currency in all of these markets in the fourth quarter. In Chile, the Chilean peso devalued by approximately 8%.

It's similar in Peru, also close to 8% devaluation. In Argentina, it was over 25%, and the Colombian peso in the quarter also devalued by approximately 6%.

So this has been impacting the yields in our other domestic markets. When we look specifically at the domestic Brazil operations, we continue to see the same trends that we've been showing in prior quarters.

We continue to see strong load factors. The load factor at TAM reaches 80% for the full year of 2013, higher than the industry average, and we continue to be very rational in terms of our capacity plans.

In 2013, ASKs were down 8.4%, and our current guidance for 2014 is that we will be flat in terms of capacity. And with that, we have maintained TAM's market share at approximately 40% with a strong leadership in the corporate passenger.

On the international passenger business, as we've been discussing also in prior quarters, we've been implementing certain strategies as a result of the integration of LAN and TAM. Mainly, we have begun a significant rationalization of capacity, especially on long-haul routes, both on the LAN network and from Brazil.

We have a strong reduction in ASK, especially out of Rio to Europe and for the United States. And we've also seen an -- overall in the long-haul routes, an 11% reduction in ASKs when we compared December 2013 to December 2012.

So a strong reduction in the long-haul operation. We've been focusing on developing the hub at Guarulhos Airport, which basically requires a change in the itineraries that we are currently operating, and we expect to implement that towards the second half of this year after the expansion of Terminal 3 at Guarulhos.

We've also been implementing certain fleet changes. At TAM, we have replaced the older Airbus A330s in the TAM fleet, and we are replacing them with Boeing 767s that were previously operated by LAN, which provide an improvement in terms of cost per ASK and also an improved product for the customers, since the 767s have the full flat business class product.

And we've also implemented the code share agreement between TAM and American Airlines, which has been operating since August of last year. When we look at the cargo numbers, we've seen, as we've already mentioned, a significant change in the cargo operation as a result of the merger with TAM, where the belly capacity becomes significantly more relevant as a percentage of our total cargo capacity.

Today, we operate approximately 50% of our ATKs in freighters and 50% in bellies. We have been reducing actively our cargo capacity mainly on the freighter fleet, focusing on utilizing the belly capacity of our passenger aircraft and also, responding to a weaker demand, especially on southbound routes.

Cargo traffic, overall, was down 4% in the fourth quarter, and cargo load factors were up 1.4 points. We've been, as I mentioned, focusing on belly capacity, and we're still seeing a very competitive cargo environment, especially in the Brazilian market.

When we look at our operating cost, we've seen in the fourth quarter, compared to the fourth quarter of 2012, a decline of close to 5% in terms of wages. This is driven by a decline in headcount of close to 1% and also, by the depreciation of the local currency since a significant percentage of wages and benefits are paid in local currencies, both in Brazilian reals and in Chilean peso.

When we look at aircraft cost, these are approximately 15% of total cost, and here, we're including depreciation, aircraft rentals and maintenance, but we are excluding the nonrecurring costs that I mentioned at the beginning. We have a 1% decline in aircraft cost, and then we have about a 3% decline in other cost line.

That leads to a 3% decline in cost per ASK equivalent in the fourth quarter. And when we add fuel, it's a 6% decline in cost per ASK equivalent as a result of our lower fuel expenses during the quarter.

Moving to the balance sheet. We've been -- I think it's important to highlight that the progress that we've made in terms of reducing the exposure of TAM's balance sheet to the depreciations of the Brazilian currency, we have reduced the exposure by half.

We basically brought it down to $2 billion at the close of last year compared to $4 billion right after the merger at the end of 2012. And we expect to make a much more progress here during the first half of this year and to reach June with about $0.5 million -- $0.5 billion of exposure.

This will reduce the volatility in our income statement in the nonoperating line, where we see -- where we need to adjust the exchange rates differences for the imbalance of the TAM's balance sheet. In the fourth quarter, this was about $140 million of impact.

So this is something that we expect to be mitigated going forward. We also, as you know, completed successfully our capital raising efforts.

We completed the process in January of this year and raised a total of $940 million with the issuance of 62 million shares. And in addition to that, earlier in the year, in November, we had closed the placement of a securitized bond for $450 million.

So this leads our balance sheet together with a much improved cash flow generation of operation and leads to a much stronger leverage profile. We've reduced our leverage ratio from 7.2x to 4.9x at the close of December 2013, and we're also in a much stronger liquidity position with cash reaching approximately 19% of revenues at the close of the year.

I'm going to turn it over now to Roberto Alvo to discuss our fleet restructuring program.

Thank you, Gisela. During the second semester of last year, the company took a decision to move forward quickly with -- in regards of an important fleet restructuring of the company.

With respect to single-aisle operations, we've been operating 737s and Q400s in Colombia that were acquired from the acquisition of AIRES, and we also have Q200s. We've decided to phase those airplanes out faster than the original leased contracts these airplanes have.

So we're not flying 737s and Q400s anymore. Those airplanes have been grounded and redelivered.

Some of them, we redelivered first semester of this year. And we'll still bring the Q200s in the next few months, and we'll also ground them and phase them out in the next couple of years.

So we'll remain basically with an A320 family dedicated fleet in both domestic Brazilian and Spanish-speaking domestic operations. With respect to [indiscernible] long-haul fleet, the company has several models that it's operating today.

We also took the decision of streamlining this, getting rid of less efficient aircrafts, renewing our fleet and improving our products. The company currently operates -- has 20 330s, of which 9 have been grounded.

7 of those airplanes will be redelivered during the first semester of this year, and we expect to completely phase out the 300s -- 330s in the next 24 to 30 months. We've also grounded the Q4500s of TAM that have been -- that are in the process of redelivery, and we'll also phase out the Q4300s in LAN as of next year.

At the end of the day, the company will focus on 767s and 787s and [indiscernible] the medium term as that airplane becomes operational once it's redelivered at the end of 2015. We're transferring 767s from our current fleet LAN operation to TAM operation in order to replace the capacity that's been taken out on the phase out of the 330s.

Those 767s out of the LAN operation have been steadily replaced by 787s that we've received last year, and that we expect to receive during the course of the year. In total, we will basically take out more than 50 airplanes that are old, that are less efficient and that have a much worse product than the one that we have offered on the 767s and 787s.

The new fleet represents a substantial decrease in cost per ASK, over 25% reduction, 350 versus 330. And the 767, particularly, also, has important an advantage in cost per ASK as compared to the 330.

With respect to the next couple of years, what you see in the Slide #11 is the sequence of aircrafts we expect to receive and redeliver in 2014, 2015. The aircrafts -- airplanes we'll receive in 2014 are basically 320 family airplanes plus 5 787s.

And in 2015, we expect to receive an additional 7 787-9s and 321s. And we expect to take out some older 320s, 319s and the remaining part of the 330s.

The final side here on the presentation shows our current fuel hedge position. We have hedged for the first 3 quarters of this year approximately 40% of our estimated fuel consumption with a mixture of jet fuel slots and collars.

The details are on the slide. That concludes the presentation that we have prepared.

We'll be happy to answer any questions you may have. I apologize.

I actually forgot to mention the final slide, which shows our 2014 guidance. And there, the numbers have not changed.

They are the same guidance that we had already published at the end of last year, basically relatively flat capacity growth, both in passenger and in cargo and an estimated EBIT margin of between 6% and 8%, excluding the nonrecurring cost that we may incur related to the fleet restructuring that we have described. And the assumption behind those numbers are an average exchange rate for the Brazilian real of 2.4 for the full year and a jet fuel price of $120 per barrel.

Now that really is the final slide. I apologize for that.

Now we're -- we'll be happy to take questions.

This is actually Catherine O'Brien filling in for Mike. My first question is, now that American and U.S.

Airways merger is complete and the combined company has chosen to stay in the oneworld Alliance, have you already -- are you already able to start booking passengers on U.S. Airways, [indiscernible] flights?

Or will that take some further implementation?

At the moment, we are currently booking passengers on American Airlines, and as soon as they integrate their systems, we'll be able to integrate that into U.S. Airways.

Okay. Great.

Would you ever consider forging a closer relationship with the new American, maybe something like what Delta has arranged with a couple of your Latin American peers?

The alliance strategy of LATAM considers increasing the intensity of the relationship with all our partners both in Europe and the U.S.

Okay, great. And just one last quick one.

I know that Venezuela is a relatively small part of your network. But could you tell us about what percentage of your revenue to sales in Venezuela represents?

Venezuela, overall of LATAM revenue, is less than 1%. In terms of our current cash position in Venezuela, which may be the next question, we have approximately $150 million that are currently in Venezuela.

Okay. Have you had any updates from the government on what the repatriation process will be going forward?

Or...

No. There haven't been any updates from the government, we're still looking for more details because they're still in the same situation as of the last half quarter.

No news on that front.

Regarding the weakness in the Spanish-speaking countries, I understand it's the weakness in the currency. But if this continues, is there more that you could to reduce capacity?

Because I mean, I think that's other thing that put a lot of pressure, is just the strong capacity growth.

Well, there is still -- I mean, we still see a healthy demand in those markets. So we do have planned, if you look at our guidance, a growth of around 8% in terms of total ASKs between 6% and 8% in all of those markets.

I would -- the main impacts that we have seen during the fourth quarter, really, was more related to the currency. We, obviously, may reevaluate, and we do have flexibility in our fleet if we see the situation significantly change.

But for now, we are maintaining our growth estimates for the year.

Understood. Okay.

And then on the cargo side, it seems like cargo weakened from what you saw in the third quarter into the fourth quarter. Is that right?

And then also, if you could just provide a little bit of an outlook on the first quarter here, and if I recall, there was a delay in green season last year and then how that might impact first quarter versus second quarter this year.

Well, the cargo market has not yet worsened in the fourth quarter. It's, let's say, a stable situation on what we've seen the whole year, which has been coming down since the end of 2012.

So the first quarter was more of the same, especially when we are looking about the southbound traffic. What affected us on the northbound in the third -- in the fourth quarter of 2013 was the weakness of the northbound coming out of Argentina.

Argentina is the first market where we see the start of the high season, the fruits high season, and it was particularly weak this year and affected our figures on the northbound segment. The rest of the northbound business, coming out of Chile or Peru or the Ecuador and Colombia, has been performing very strong the whole year and with an increase compared with the previous year.

Actually, the fruits coming out of Chile were -- the volumes were much larger than the previous year. What really affected us -- it was, as I said before, the export from Argentina.

On the southbound, we've seen a weakness all year around, and we foresee for the near future that it will continue to be that way, which is muchly related to the weakness of the economies, mainly Brazil, which has a very slow GDP growth prospects for the year. And also for the currencies, that's been -- they are down compared to the dollar and how it affects the imports.

This is Jeff Reisenberg in for Duane. I guess, first, can you describe the competitive capacity environment as you see it, particularly, within Brazil and on your long-haul international routes to the U.S?

This is Francisco [indiscernible] speaking. Although it's relative for Brazil markets, we expect our guidance to grow fewer sort of plan capacity.

The rest of the industry, we have to guide around to a growth of more or less at 5%.

As for the international business, they're looking similar. We plan on a flat growth going forward for the rest of the year, and we see competitors increasing mainly their capacity at the lower pace as the last couple of years.

And then I'm wondering about this -- the improvement in itineraries that you described at São Paulo. Kind of if you can describe what's going on, are you guys making the banks more dense?

Or is this just tactical retiming of flights? And then what metrics do you follow when you're evaluating that?

And how do they relate to the bottom line as you see it?

The increased capacity at the Guarulhos Airport is a big opportunity for LATAM. As you probably know, the currently important constraint is not only at the overcapacity, but there are now our ability to haul the simultaneous flight.

So we don't have total certainty going forward, but our initial design show a further ability to build a stronger, more capital hub within Guarulhos. The exact impact of that is still uncertain given that the full capacity of the airport is still unknown, and we need to derail implementation by ability of the things we are planning.

It's a great opportunity, but still uncertain. About the metrics, what we're tracking is obviously the number of connecting passengers and the competitiveness of our [indiscernible] vis-à-vis other carriers in connecting different parts of Latin America with both Europe and the U.S.

And we are able to put together much more companies, products than the ones -- we have now.

I have 2 questions. One in the -- regarding the fleet restructuring cost that you had in the fourth quarter.

You mentioned that you're going to continue to have these costs in the next, I think, 3 years now or 2, 3 years or so. Do you have an idea of this fleet restructuring cost for 2014, at least a rough number?

That's the first question.

We are not disclosing certain numbers at this point in time because we are in the middle of such an important negotiations, and we foresee that they could be impacted by -- any disclosure could be impact the negotiation we're undertaking. We expect nonetheless that the budget of nonrecurring expenses that we'll undertake this year will be higher than the ones that we undertook in 2013, which were $29 million.

Okay. I think that really helps.

And just a second question, guys, regarding Brazil. I know you reported, I think, around 11% RASK growth in the fourth quarter.

Do you expect to maintain your double-digit RASK growth in local currency in Brazil for this year? Or do you think that the RASK growth should decelerate in 2014?

Eduardo, just started to finish something -- I wanted to say on the previous question. We expect to give -- to be able to give you more certain numbers at the conference call we'll hold next quarter when we release first quarter numbers.

Okay. But it should be higher than last year, right?

Yes.

On your question about Brazil, the answer is yes. We expect to maintain our growth in 2 digits of RASK because we're certain it's sustainable.

Now we are having a much better segmentation of the market, and we truly believe that our value proposition allow us to have a better market share in corporate segment. And also, we're having high load factors for costs for capturing a lot of market share also in the leisure segment.

So -- and this mix of higher load factor, and better yield, we -- at least that we will maintain through the end of year.

But your load factor is already high, and also, the idea is to raise fares, no?

During the low season, that means from February to June, we think that we have opportunity. But for sure, the yield and fares will be pushed at the rock also.

Okay. And what's your view about the impact for the World Cup, especially on the second quarter now because we have June, which tends to be still a good month in terms of business passengers.

But we have the first round of the World Cup already taking place in June. So what are your expectations for the impact of the World Cup on -- especially, on the second quarter results?

For sure, the World Cup will be a main issue for us. Let me split the answer in 2.

One is long-term. We are gaining as the industry that the airports [indiscernible] and also, would have a better place to have connections and provide better service to our clients, and this would stay forever.

Your question about the second quarter, the short-term. We're focusing very much on the service level, and to take care about the clients during the World Cup.

On the financial side, I will say that we are working very hard to neutralize the results and expecting a flat [ph] result for the cumulative [ph] and previous years.

Two or 3 questions for me. The first is, in Brazil, there's the potential for the Dilma administration to launch a regional aviation plan.

Just curious, how you guys are thinking about that with respect to whether that could move the needle on your capacity plant in that market and whether you might see a need or a desire to make adjustments on sub-150 seat fleet.

So we have been following this issue with Aveat [ph], an airline substation in Brazil, and with the government. And so far, we haven't received any structural and final proposal.

What I could say that we always are planning new projects in cargo, in passenger, international connection. And we are now operationally on the same group of projects.

So we are analyzing future options, but we don't have any concrete to answer all of that.

Okay. Fair enough.

And also, 2 other quick questions, also on Brazil. Do you see any potential headwind on your local operations in the event that Brazil does have to undertake energy rationing?

No. The answer is no.

Perfect. Perfect.

And finally, final question, and I'll let someone else ask. In terms of long-term synergy targets for the LAN-TAM merger, I'm guessing that no change at this time?

No. We have met so far the targets that we had for the synergies we completed this year with approximately $300 million of synergies, basically, at the EBIT level that were related to the synergy initiatives that we have been tracking.

And that puts us very well on track to achieve the target that we had for June of 2016 to reach the run rate of $600 million to $700 million.

I just had 2 quick questions. The first is, wondering if you could you give us a little bit of background for your strategy for sale leaseback for 2014.

Yes. We've -- all the widebody aircrafts, we are financing with ECA or extreme [ph] guarantees we've done 7 lease backs related to the 320 aircrafts.

We are also financing at owning [ph] the 321, and we just concluded a triple 7 [indiscernible] in line with our plan of phasing out the triple 7 in the latter part of the decade, which will be replaced by 350s and they are being delivered by [indiscernible]. And we have no other operations other than those expected...

That's helpful. And then I was just wondering if we could drill a little bit further into your capacity plans on the American side.

I was wondering if you could maybe tell us what your capacity plans are for Argentina and Venezuela, specifically.

In the case of Venezuela, we are currently having the same capacity we currently have published. We don't have immediate plans for rationalization, and the same applies for Argentina.

I was hoping that you could provide us with a little bit of insight on your online distribution strategy particularly as it impacts your direct channels for LATAM Airlines and what your kind of growth prospects are for direct online bookings.

We are quarterly taking -- starting to take advantage of the joint forces [ph] of LAN and TAM in terms of strengthening our online sales. We have, at the moment, mainly focused being able to offer both compensation into other sites.

But in the next future, we plan to take that into the next level by overhauling and building a single site with all the features. That's the status of that front at the moment.

Right. Could you elaborate a little bit about just overall distribution in terms of your passenger revenues as a share of your online channel?

What approximately -- what percentage of your bookings come from your website versus offline and OTA channels?

Yes. We track that very carefully, and those numbers have been growing steadily over the last few years, but we don't publicly disclose those figures.

A couple of questions. On the Spanish-speaking side of the network, where are the countries where you're growing your capacity?

And the second question is, could you give us some more color on your disclosure about commission charges? It's a little confusing to me because you say, some parts are up 38%, and then there's the down 18 and the up 14.

It's unclear what really happened with commissions. Could you give us some more color on that too, please?

Yes, sure. On the Spanish-speaking operations, the growth -- basically, the largest of our Spanish-speaking countries are Chile and Peru, and we are growing in both of those markets, as well as in Colombia.

So the growth that you see for 2014 is coming, for the most parts, from those 3 markets. Ecuador, Argentina, they are, for the moment, not significant growth plans for this year.

Regarding the commissions, we have -- what you see in the commissions cost is -- basically, the comparison is a little bit dirty because we have in the fourth quarter of 2012 an $18 million onetime lower cost as a result of, basically, the adjustment of certain TAM commissions that had been accounted for -- basically, had been accounted for double in previous quarters. So that generates a onetime charge that makes that line increase significantly.

If you take out those $18 million onetime that we saw in the fourth quarter of 2012, the actual increase is 14%, and that 14% is mainly related to increased sales efforts in the Brazilian market and especially, on the international side, not the domestic.

A couple of questions. First is, have you experienced any decrease?

Or what's the demand outlook with the FX volatility we've seen in Chile and other markets in terms of passengers? And how have you reacted in terms of yields if there has been any reduction in demand?

We have not experienced demand reductions in any of our large point of sales and, particularly, in Chile.

So everything is continuously priced more or less in dollars and customers or demand is just simply paying higher?

I know how [indiscernible] react to the specific market conditions. No major changes on that, on this international business.

Okay. And then more specifically Chile, they've recently have waived the visa requirements to go to the U.S.

starting, I think, at the end or beginning of April. Do you envision any substantial increase in demand for that?

And or are you taking any action for any potential increase in demand?

Yes. Actually, if your travel would have happened [indiscernible] marketing when this change took effect.

We expect an increase of passengers to the U.S., and we are taking commercial action to take that into consideration.

But it doesn't change your guidance for full year at all?

No.

Okay. And then the last question.

Any update on integrating LANPASS with Multiplus or vice versa? Or strategy for the 2 separate mileage programs?

So the first step of our strategy was basically to harmonize the most important features of both frequent flyer programs. We undertook that.

We did that early last year. We're now embarked in a second step of harmonization of these programs, mainly in the softer benefits that we give to passengers, say, in upgrades and [indiscernible], et cetera.

At this moment, we are not planning to do any integration of the Multiplus business with the LANPASS business in the way that Multiplus is organized. So our focus has been, say, harmonizing on the frequent flyer programs for both LAN and TAM and Multiplus stays with the business they have for the short term.

Great. Well, thank you, everyone.

Thanks very much for participating today, and we are, of course, available if you have any follow-up questions later on.