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São Paulo, June 24, 2009
Citi's
2nd
Annual Brazil Conference
2
Information and Projection
This notice may contain estimates for future events. These estimates merely reflect the expectations of the Company’s management, and involve risks and uncertainties. The Company is not responsible for investment operations or decisions taken based on information contained in this communication. These estimates are subject to changes without prior notice.
This material has been prepared by TAM S.A. (“TAM“ or the “Company”) includes certain forward-looking statements that are based principally on TAM’s current expectations and on projections of future events and financial trends that currently affect or might affect TAM’s business, and are not guarantees of future performance. They are based on management’s expectations that involve a number of business risks and uncertainties, any of each could cause actual financial condition and results of operations to differ materially from those set out in TAM’s forward-looking statements. TAM undertakes no obligation to publicly update or revise any forward looking statements.
This material is published solely for informational purposes and is not to be construed as a solicitation or an offer to buy or sell any securities or related financial instruments. Likewise it does not give and should not be treated as giving investment advice. It has no regard to the specific investment objectives, financial situation or particular needs of any recipient. No representation or warranty, either express or implied, is provided in relation to the accuracy, completeness or reliability of the information contained herein. It should not be regarded by recipients as a substitute for the exercise of their own judgment.
3
PreviousPeriod
CurrentPeriod
J F MA M J J A SOND J FMA M J J A S ON D J F MAM J J A SON D J F MA M90
95
100
105
110
115
120
125
130
Domestic Market - Variation(vs previous period)
The domestic market grew 2% until May 2009
20072006 200812% market growth 12% market growth 7% market growth
2009
Source: ANAC
2% market growth
4
PreviousPeriod
Market
TAM
J F M A M J J A S O N D J F M A M J J A S ON D J F M A M J J A S O N D J F M A M40
60
80
100
120
140
160
180
200
International Market - Variation(vs previous period)
The international market (among Brazilian carriers) decreased 7% in 2009, while we grew 14%
41% TAM’s growth 71% TAM’s growth 40% TAM’s growth
30% market decrease 5% market decrease 26% market growth
Source: ANAC
14% TAM’s growth
7% market decrease20072006 2008 2009
5
We are both domestic and international market leaders
TAM’s Domestic Market Share*TAM’s Domestic Market Share*
Source: ANAC
* RPK – Revenue passenger kilometer
TAM’s International Market Share* – Among Brazilian carriersTAM’s International Market Share* – Among Brazilian carriers
33,0%35,8%
48,0% 48,9% 50,3% 49,5%43,5%
2003 2004 2005 2006 2007 2008 Jan - May 2009
12,0% 14,3%
37,5%
67,5%75,2%
85,9%
18,8%
2003 2004 2005 2006 2007 2008 Jan - May 2009
6
We improved our marginsMargin over net revenueUS GAAP non audited
1Q08 1Q09
283
475EBITDAR - R$ M
68%
13%
18%
1Q08 1Q09
83
188EBIT - R$ M
125%
4%
7%
1Q08 1Q09
47
57
Net Income - R$ M
2,2%2,1%
1Q08 1Q09
0.31
0.38
Earnings per Share - R$ Cents
22% 22%
7
We consumed cash in 1Q09 mainly due to hedge and operations
OpeningBalance Jan/09
Hedge Operating Investing Financing ClosingBalance Mar/09
withrestricted cash
Restricted cash ClosingBalance Mar/09
1,914
-290-160 -57
-801,327
-2421,085
0
500
1,000
1,500
2,000
2,500
CashR$ Million
US GAAP non audited
8
More than 1/3 of our hedge positions for 2009, were realized in the 1Q09
1Q09 2Q09 3Q09 4Q09 Total 2009 1Q10 2Q10 3Q10 4Q10 Total 2010 1Q11
Volume (Thousand barrels)
Volume (Thousand barrels)
1,927 1,245 1,145 830
5,146 890 955 865 720
3,429 145
Average Strike (USD/bbl)
Average Strike (USD/bbl)
107113110109109114115114113114107
Projected Consumption Covered
Projected Consumption Covered
52%33%30%22%34%23%25%22%19%22%4%
9
The hedge impact in our cash will be lower in the next quarters
1Q09 2Q09 3Q09 4Q09
125
7969
49
0
50
100
150
Hedge Impact on Cash(USD million)
Assuming a WTI price of 50 USD per barrel until the end of 2009, the cash impact from
the hedge would reduce significantly.
Assuming a WTI price of 50 USD per barrel until the end of 2009, the cash impact from
the hedge would reduce significantly.
10
Guidance
2009
TAMTAM
MarketMarket
Realized Jan-May Realized Jan-May
Domestic market demand growth (RPK)
Maintain market share leadership in both markets
Domestic
International
Supply growth (ASK)
Domestic
International
Average overall load factor at approximately
Additional international destinations or frequencies in 2009
Guidance 2009
Guidance 2009
1% - 5%
- - -
- - -
8%
20%
67%
1*
2.0%
48.6%
85.8%
13.2%
22.6%
65.8%
- - -
* Flight to Johannesburg estimated to be launched on September
11
43
A340 2
A330 - 16
A321 - 5
A32082
A31920
43
18
107
43
20
110
43
22
113
83
22
115
103
22
117
1Q09 2009 2010 2011 2012 2013
132 132137
142148 152
Total Fleet(End of Period)
Our fleet size will be maintained until the end of this year
B767 Airbus wide-body Airbus narrow-bodyB777
Average fleet age of 5.7 years by the end of
2008
Average fleet age of 5.7 years by the end of
2008
Standardization of narrow body fleet:
A320 family
Standardization of narrow body fleet:
A320 family
Aircraft to be received in 2009 will replace the ones that will be redelivered and already
have pre committed financing
Aircraft to be received in 2009 will replace the ones that will be redelivered and already
have pre committed financing
12
Expansion of a loyalty program concept
Tool to assist partner companies to capture, retain customers and increase sales
Coalition of loyalty programs for accrual of points and redemption of products or services with different partners
Multiplus Fidelidade is a brand owned by TAM and will be utilized to connect loyalty programs and partners with exclusive advantages for its members
We launched the Multiplus
Fidelidade
aiming to explore all potential of the customers loyalty
13
Hotels
Banks
Credit Cards
Focus on retention and profitability from
frequent flyers
TAM Fidelidade
leverages TAM’s
business through points sales to partners
14
Retail
PhoneCompany
Bookstores
Suppliers
Banks
Focus on retention and acquisition of partner’s customers increasing sales
Multiplus
Fidelidade
will work as a “hub”
of several partners and programs
15
February 19, 2008