LATAM AIRLINES GROUP S.A. | CIK:0001047716 | 3

  • Filed: 4/5/2018
  • Entity registrant name: LATAM AIRLINES GROUP S.A. (CIK: 0001047716)
  • Generator: S2 Filings
  • SEC filing page: http://www.sec.gov/Archives/edgar/data/1047716/000161577418002424/0001615774-18-002424-index.htm
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    • ifrs-full:DisclosureOfEmployeeBenefitsExplanatory

    NOTE 23 - EMPLOYEE BENEFITS

     

        As of     As of  
        December 31,     December 31,  
        2017     2016  
        ThUS$     ThUS$  
                 
    Retirements payments     55,119       49,680  
    Resignation payments     10,124       10,097  
    Other obligations     35,844       22,545  
    Total liability for employee benefits     101,087       82,322  

     

    (a) The movement in retirements and resignation payments and other obligations:

     

              Increase (decrease)           Actuarial              
        Opening     current service     Benefits     (gains)     Currency     Closing  
        balance     provision     paid     losses     translation     balance  
        ThUS$     ThUS$     ThUS$     ThUS$     ThUS$     ThUS$  
                                         
    From January 1 to December 31, 2015     74,102       (13,609 )     (3,824 )     14,631       (6,029 )     65,271  
    From January 1 to December 31, 2016     65,271       17,487       (4,536 )     3,105       995       82,322  
    From January 1 to December 31, 2017     82,322       21,635       (5,399 )     (2,763 )     5,292       101,087  

     

    The principal assumptions used in the calculation to the provision in Chile are presented below:

     

        As of  
        December 31,  
    Assumptions   2017     2016  
                 
    Discount rate     4.55 %     4.54 %
    Expected rate of salary increase     4.50 %     4.50 %
    Rate of turnover     6.98 %     6.16 %
    Mortality rate     RV-2014       RV-2009  
    Inflation rate     2.72 %     2.86 %
    Retirement age of women     60       60  
    Retirement age of men     65       65  

     

    The discount rate corresponds to the 20-year term rate of the BCP Central Bank of Chile Bonds. The RV-2014 mortality tables correspond to those established by the Commission for the Financial Market of Chile and for the determination of the inflation rates; the market performance curves of Central Bank of Chile papers of the BCUs have been used. BCP long term at the date of scope.

     

    The calculation of the present value of the defined benefit obligation is sensitive to the variation of some actuarial assumptions such as discount rate, salary increase, rotation and inflation.

     

    The sensitivity analysis for these variables is presented below:

     

        Effect on the liability  
        As of     As of  
        December 31,     December 31,  
        2017     2016  
        ThUS$     ThUS$  
                 
    Discount rate                
    Change in the accrued liability an closing for increase in 100 p.b.     (5,795 )     (5,665 )
    Change in the accrued liability an closing for decrease of 100 p.b.     6,617       5,952  
                     
    Rate of wage growth                
    Change in the accrued liability an closing for increase in 100 p.b.     6,412       6,334  
    Change in the accrued liability an closing for decrease of 100 p.b.     (5,750 )     (5,644 )

     

    (b) The liability for short-term:

     

        As of     As of  
        December 31,     December 31,  
        2017     2016  
        ThUS$     ThUS$  
                 
    Profit-sharing and bonuses (*)     99,862       89,523  

     

    (*) Accounts payables to employees (Note 20 letter b)

     

    The participation in profits and bonuses correspond to an annual incentives plan for achievement of objectives.

     

    (c) Employment expenses are detailed below:

     

        For the periods ended  
        December 31,  
        2017     2016     2015  
        ThUS$     ThUS$     ThUS$  
                       
    Salaries and wages     1,604,552       1,549,402       1,631,320  
    Short-term employee benefits     145,245       132,436       171,366  
    Termination benefits     85,070       79,062       51,684  
    Other personnel expenses     188,767       190,233       218,435  
    Total     2,023,634       1,951,133       2,072,805