Lan Airlines S.A. (Exact Name of Registrant As Specified in Its Charter)

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Lan Airlines S.A. (Exact Name of Registrant As Specified in Its Charter) As filed with the Securities and Exchange Commission on June 29, 2010 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 20-F ¨ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934 OR x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2009 OR ¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 OR ¨ SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number: 1-14728 Lan Airlines S.A. (Exact name of registrant as specified in its charter) Lan Airlines S.A. Republic of Chile (Translation of registrant’s name into English) (Jurisdiction of incorporation or organization) Presidente Riesco 5711, 20th Floor Las Condes Santiago, Chile (Address of principal executive offices) Gisela Escobar Koch Tel.: 56-2-565-3944 ● E-mail: [email protected] Presidente Riesco 5711, 20th Floor Las Condes Santiago, Chile (Name, telephone, e-mail and/or facsimile number and address of company contact person) Securities registered or to be registered pursuant to Section 12(b) of the Act: Title of each class: Name of each exchange on which registered: American Depositary Shares (as evidenced by New York Stock Exchange American Depositary Receipts), each representing one share of Common Stock, without par value Securities registered or to be registered pursuant to Section 12(g) of the Act: None Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act: None Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report: 338,790,909. Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes x No ¨ If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. Yes ¨ No x Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨ Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ¨ No ¨ Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one): Large Accelerated filer x Accelerated filer ¨ Non-Accelerated filer ¨ Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing: U.S. GAAP ¨International Financial Reporting Standards as issued by the International Accounting Standards Board x Other ¨ If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow: Item 17 ¨ Item 18 ¨ If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x Table of Contents TABLE OF CONTENTS PRESENTATION OF INFORMATION 1 FORWARD-LOOKING STATEMENTS 2 GLOSSARY OF TERMS 3 PART I ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS 4 ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE 4 ITEM 3. KEY INFORMATION 4 ITEM 4A. UNRESOLVED STAFF COMMENTS 63 ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS 63 ITEM 7. CONTROLLING SHAREHOLDERS AND RELATED PARTY TRANSACTIONS 89 ITEM 8. FINANCIAL INFORMATION 90 ITEM 9. THE OFFER AND LISTING 92 ITEM 10. ADDITIONAL INFORMATION 94 ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKETRISK 113 ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES 118 PART II ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES 120 ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS 120 ITEM 15. CONTROLS AND PROCEDURES 120 ITEM 16. RESERVED 121 ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT 121 ITEM 16B. CODE OF ETHICS 121 ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES 121 ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES 122 ITEM 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS 122 ITEM 16F. CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT 122 ITEM 16G. CORPORATE GOVERNANCE 122 PART III ITEM 17. FINANCIAL STATEMENTS 125 ITEM 18. FINANCIAL STATEMENTS 125 ITEM 19. EXHIBITS 126 NOTE 3 - TRANSITION TO IFRS F-25 i Table of Contents PRESENTATION OF INFORMATION In this annual report on Form 20-F, unless the context otherwise requires, references to “Lan Airlines” are to Lan Airlines S.A., the unconsolidated operating entity, and references to “LAN,” “we,” “us” or the “Company” are to Lan Airlines S.A. and its consolidated subsidiaries. All references to “Chile” are references to the Republic of Chile. This annual report contains conversions of certain Chilean peso amounts into U.S. dollars at specified rates solely for the convenience of the reader. These conversions should not be construed as representations that the Chilean peso amounts actually represent such U.S. dollar amounts or could be converted into U.S. dollars at the rate indicated. Unless we specify otherwise, all references to “$,” “US$,” “U.S. dollars” or “dollars” are to United States dollars, references to “pesos,” “Chilean pesos” or “Ch$” are to Chilean pesos and references to “UF” are to Unidades de Fomento, a daily indexed Chilean peso-denominated monetary unit that takes into account the effect of the Chilean inflation rate. Unless we indicate otherwise, the U.S. dollar equivalent for information in Chilean pesos is based on the “ dólar observado” or “observed” exchange rate published by Banco Central de Chile (which we refer to as the Central Bank of Chile) on December 31, 2009, which was Ch$506.43=US$1.00. The observed exchange rate on June 25, 2010, was Ch$539.68=US$1.00. The Federal Reserve Bank of New York does not report a noon buying rate for Chilean pesos. See “Key Information—Exchange Rates” under Item 3. Lan Airlines and the majority of our subsidiaries (including our main cargo subsidiary Lan Cargo S.A., or Lan Cargo) maintain their accounting records and prepare their financial statements in U.S. dollars. Some of our other subsidiaries, however, maintain their accounting records and prepare their financial statements in Chilean pesos or Argentinean pesos. Our audited consolidated financial statements include the results of these subsidiaries translated into U.S. dollars. International Financial Reporting Standards as issued by the International Accounting Standards Board (“IFRS”), require assets and liabilities to be translated at period-end exchange rates, revenue and expense accounts at monthly average rates. Our audited consolidated financial statements for the period ended December 31, 2009 were prepared in accordance with IFRS. These audited consolidated financial statements constitute the first annual financial statement prepared in accordance with IFRS which have been adopted in Chile under the name of Chilean Financial Reporting Standards (“CHFRS”), and represent the integral, explicit and unreserved adoption of IFRS. Prior to December 31, 2009 our consolidated financial statements were prepared in accordance with accounting principles generally accepted in Chile (“Chilean GAAP”). IFRS differs in certain significant respects from Chilean GAAP. As a result, our financial information presented under IFRS is not directly comparable to our financial information presented with respect to previous years under Chilean GAAP. Accordingly, readers should avoid such comparison. For a description of the transition to IFRS, including the quantification of the impact of the transition to IFRS, see Note 3 to our audited consolidated financial statements We have rounded percentages and certain U.S. dollar and Chilean peso amounts contained in this annual report for ease of presentation. Any discrepancies in any table between totals and the sums of the amounts listed are due to rounding. This annual report contains certain terms that may be unfamiliar to some readers. You can find a glossary of these terms on page 3 of this annual report. 1 Table of Contents FORWARD-LOOKING STATEMENTS This annual report contains forward-looking statements. Such statements may include words such as “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe” or other similar expressions. Forward-looking statements, including statements about our beliefs and expectations, are not statements of historical facts. These statements are based on current plans, estimates and projections, and, therefore, you should not place undue reliance on them. Forward-looking statements involve inherent risks and uncertainties. We caution you that a number of important factors could cause actual results to differ
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