081016 citi

Non deal Road Show

CitigroupNew York and Boston, October 16 - 17, 2008

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 MAM J J A SOND J FMAM J J A SOND J FMAM J J A SOND J FMAM J J A S80859095

100105110115120125130

Domestic Market - Variation(vs previous period)

The domestic market grew 10% from January to September 2008

Source: ANAC

Accum. market growth 2006

12%


19%


12%


10%

20072005 2006 2008

4

PreviousPeriod

Market

TAM

J FMAM J J A SOND J FMAM J J A SOND J FMAM J J A SOND J FMAM J J A S40

60

80

100

120

140

160

180

200

International Market - Variation(vs previous period)

The international market (among Brazilian carriers) is recovering and grew 36% …

Source: ANAC

Accum. Marketgrowth 2008

36%

Acum TAM 200641%

Acum TAM 2007 71%

Acum TAM 200540%

Acum TAM 2008 44%


7%

Accum. market decrease 2006

30%

Accum. market decrease 2007

5%

20072005 2006 2008

5

…with higher growth anticipated for Brazilian carriers due to the unbalance in the bilateral agreements…

Source: ANAC annual report

* estimates

58.2%

41.8%

57.7%

42.3%

66.9%

33.1%

71.2%

28.8%

66.5%

33.5%

2004 2005 2006 2007 Jan - Sep2008*

0

20

40

60

80

100%

% international passenger

BrazilianCarriers

IntlCarriers

6

…observed in many countries, as the example between Brazil and USA

77

107

147

2821

357

10542

I taly

England

Germany

France

Spain

USA

1414

1414

2121

3030

5151

126*126*

150 100 50 0 50 100 150

Weekly Frequencies

* 21 frequencies limited to the cities in the north, northeast and central west regions of Brazil and/or Belo Horizonte

Brazilian Carriers Foreign Carriers

Available space on bilateral Operated by Brazilian Carriers Operated by Foreign Carriers

7

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% 50,2% 52,4% 52,8%

43,5%

2003 2004 2005 2006 2007 Jan - Sep 2008 3Q08 Sep/08

12,0% 14,3%

37,5%

67,5%72,4% 75,8%

82,1%

18,8%

2003 2004 2005 2006 2007 Jan - Sep 2008 3Q08 Sep/08

8

Our mix of international revenue reduced due to the appreciation of Real and increase of domestic yield

34%

66%

31%

69%

2Q07 2Q080

20

40

60

80

100%

Revenue(Passenger + Cargo)

Dollarexchangerate

DomesticInternational

1.926

63%37%

1.592

62%38%

Approximately 50% of our costs

(including fuel) are exposed to foreign

currencies

Approximately 50% of our costs

(including fuel) are exposed to foreign

currencies

-17%

ASK proportion

International(Dollar denominated)

Domestic(Real denominated)

9

... total RASK increased 9.5%...

RASK total ¹ ²

RASK scheduled domestic²

Domestic load factor - %

Yield scheduled domestic³

RASK scheduled international²

International load factor - %

Yield scheduled international³

Yield scheduled international³ (USD cents)

2Q072Q07 1Q081Q08 2Q08 vs 2Q07

2Q08 vs 2Q07

2Q08 vs 1Q08

2Q08 vs 1Q08

R$ Cents

1 Includes charter. cargo and Other revenues. net of taxes2 Net of taxes3 Gross of taxes

16.80

15.26

71.9

22.25

12.30

69.1

17.83

9.26

16.38

15.37

69.9

23.09

11.39

76.9

14.82

8.47

18.40

17.66

68.1

27.23

11.48

73.4

15.64

9.82

9.5

15.7

-3.9 p.p.

22.4

-6.7

4.3 p.p.

-12.3

6.1

12.3

14.9

-1.8 p.p.

17.9

0.8

-3.5 p.p.

5.5

16.0

6.39 6.51 7.21 12.9 10.7 RASK scheduled

international² (USD cents)

2Q082Q08

10

...and the total CASK increased 8.4%...

CASK

CASK excl-fuel

2Q07 2Q08

16.5217.91

0

5

10

15

20

Total CASKBR GAAP - R$ cents

2Q08 vs 2Q07

-3.4%

8.4%

11

2Q07 2Q08

69

92

0

20

40

60

80

100EBIT - R$ M

...improving our margins and earnings

Margin over net revenue

2Q07 2Q08

33

67

0

20

40

60

80EBIT - R$ M

2Q07 2Q08

-29

50

-40

-20

0

20

40

60Net Income - R$ M

BR GAAP

US GAAP

2Q07 2Q08

69

214

0

50

100

150

200

250Net Income - R$ M

2Q07 2Q08

0.46

1.42Earnings per share - R$

2Q07 2Q08

-0.19

0.33Earnings per share - R$

103%

2%3%

-1%

2%

34%

3% 4%

4%

9%

209% 209%

12

BR GAAP Leasing IncomeTaxes

Others US GAAP

50

261

-84 -13214

0

100

200

300

400

Net Profit Reconciliation to US GAAP

46 aircrafts are reclassified as capital

leases as per SFAS nº 13

46 aircrafts are reclassified as capital

leases as per SFAS nº 13

The main difference between BR and US GAAP is the accounting treatment of aircraft leasing

13

Our balance sheet remains solid

R$ million - BRGAAP 2008* 2007 2006 2005 2004

Cash (1) 2.009 2.607 2.453 995 297

Short-Term Debt (2) 837 1.005 363 216 204

Long-Term Debt (3) 1.301 1.345 895 425 399

Total Debt (A) = (2) + (3) 2.138 2.350 1.258 641 603

Shareholder's Equity (4) 1.539 1.527 1.449 760 191

Capitalization (B) = (3 + 4) 2.839 2.872 2.344 1.185 590

Aircraft and flight equipment leases** (5) 6.193 5.976 5.032 4.389 4.557

Total Debt Adjusted (C) = (A + 5) 8.331 8.326 6.290 5.030 5.160

Total Capitalization Adjusted (D) = (3 + 4 + 5) 9.032 8.848 7.376 5.574 5.147

Debt / Capitalization (A / B) 75% 82% 54% 54% 102%

Adjusted Debt / Adjusted Capitalization (C / D) 92% 94% 85% 90% 100%

Adjusted Net Debt / Adjusted Capitalization (C - 1) / (D) 70% 65% 52% 72% 94%

* LTM

** Aircraft and flight equipment leases of the last twelve months x 7

14

Debt deals

Debentures – R$ 500 million (September 2006)

Subscription of 50,000 nominative, registered, non convertible debentures with a nominal unit value of R$ 10 thousand

6 years term with the first payment in 2010

Bonds – US$ 300 million (April 2007)

7.375% Senior Notes due 2017

Loan agreements to finance pre-delivery payment

Calyon and other banks to finance up to US$ 331 million for 4 B777-300ERs

BNP Paribas to finance up to US$ 117 million for 30 Airbus aircraft until 2010

Guaranties to support the financing of aircraft

Ex-Im Bank for the Boeing fleet

ECAs for the Airbus fleet

15

We are beginning to evaluate new potential business units in the company

TAM Linhas AéreasTAM Linhas Aéreas

MRO(São Carlos)

MRO(São Carlos)

Loyalty ProgramLoyalty

Program HandlingHandlingCargoCargo

Already structured as a business unit with focus in maximizing assets

None or little focus on selling services to third-parties

Not structured as business units

16

TAM has its own maintenance center since 2001 and has invested R$ 185 million

2001/2002 – Acquisition, construction, environment licenses and DAC

(ANAC) certifications

2003/2004 – Nationalization of services

2005 – Increase in services selling

2006 – EASA qualification for A319/A320 and development of

qualification for third part services

2008 – Full EASA certification (A330 and A321 included)

- A340, B767 and B777 components certification

- FAA initial audits

2009 – FAA certification targeted and B767 airframe certification

2010 – Construction of a new hangar for B777-300 and A350

17

We are organized to provide a full range of services…

MaintenanceTAM

EngineeringCTMMCC

Line Maintenance

HEAVYMAINTENANCE In-house Shops

Supply & LogisticsExternalSuppliers

External Shops

MRO SÃO CARLOS

CENTER

ComponentsConsumables

Engine and Component Repair


ConsumablesRotable Repair

REPAROROTABLES

Check A

Check C / D

Inventory Mgmt

SupplySão Carlos


18

…and well positioned to capture new opportunities Employees are trained to provide several services

Aribus aircraft (first check D in A330 in Americas) and F100 Line maintenance, checks C and D Components: hard-time, on-condition e condition monitoring Certifying for Boeing

We have the necessary certifications to support credibility EASA IOSA ISO14001 in implementation FAA in implementation

Our facilities accommodate increase in services Hangars for 4 narrow body aircraft simultaneously Painting shop Large area in the surroundings – allowing 24h tests

19

Future market for MRO is promising

Fleet size will grow in the coming years but MRO facilities may not increase proportionally Main manufactures with

record orders in the last two years

Main markets continue with strong demand for aircraft

More demand for outsourced services Airlines seeking lower unit

costs Global consolidation taking

place 2006 20160

10,000

20,000

30,000

Air Transport Fleet Forecast

CAGR 4.3%

CAGR 4.3%

Source: AeroStrategy

20

Our focus is to leverage the MRO potential

Sales force and marketing structure dedicated

Comprehensive solution – technological condominium (Goodrich )

Highly profitable MRO operations with high skilled and low cost labor availability

Aggressiveness in selling heavy and component maintenance

Establish long term contracts for line maintenance with international carriers

21

Maintain leadership in both domestic and international markets

ASK growth of

Domestic 14%

International 40%

Average load factor at approximately 70% overall

Reduction of 7% in total CASK ex-fuel in BR GAAP yoy

Three additional international destinations or frequencies in 2008

Domestic market demand growth from 8% to 12% (in RPK terms)

2008 Guidance2008 Guidance

We have a positive outlook for 2008

TAMTAM

MarketMarket

Jan – Sep 2008Jan – Sep 2008

10.2%

50.2% dom72.4% intl

14.2%

32.2%

72.1%

-4.5%*

* Accumulated from January to June, 2008** In final approval phase by ANAC

Brasília – Buenos Aires

Rio de Janeiro – Miami

São Paulo – Lima Rio de Janeiro – NY** São Paulo –

Orlando**

22

Our growth plan is supported by a flexible fleet plan

3

14

88

10

44

16

101

44

18

104

44

20

110

44

22

113

84

22

115

2007 2008 2009 2010 2011 2012

115125

130138

143149

0

50

100

150

Total fleet

B777 MD11 Airbus wide-body Airbus narrow-body F100

Since dec/07 we

are monofleet in

domestic operations

Since dec/07 we

are monofleet in

domestic operations

B767

23

High concentration of passengers in 11 airports

Source: ANAC

Important barrier to

entry for newcomers

Limited ability for other

competitors to grow

11 main airports in

Brazil carry 72% of all

passenger traffic

TAM has in aggregate

~40% of all slots

available in these

airports

% TAM slots

43%

34%

39%

32%

44%

42%

27%

26%

40%

32%

46% Fortaleza

Rio de Janeiro4

Recife

Curitiba

Porto Alegre

Belo Horizonte

Salvador

Rio de Janeiro³

Brasília

São Paulo²

São Paulo¹

% Total Domestic Passengers Boarded

0% 5% 10% 15% 20%

20062007

1 Congonhas2 Guarulhos3 Galeão4 Santos Dumont

24

As Brazil becomes “stable”, the leisure segment will become increasingly more important

Leis

ure

Busi

nes

s

2000 2001 2002 2003 2004 2005 2006 2007

17.9

26.6 27.025.2

28.2

35.4

39.7

44.4

0

10

20

30

40

50

Domestic Market Passenger Mix (RPK M)

CAGR

11%

22%

Traveling is one of the top “desire” items for consumption

* TAM Estimates

25

...optimizing the utilization of our aircraft on off peak hours

0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 2355

60

65

70

75

80%

Load Factor per hour

2Q08Oct 2007

Off Peak Peak Off Peak Peak Off Peak

26

We will be expanding our fare bundle strategy for the domestic market in 2008...

Addition of extra features in the segmented bundles

Ability to “sell up” categories

Potential for further revenue increase

Harmonization of the fare bundle strategy to TAM Fidelidade growth

27

...increasing capillarity of sales through our new methods of payments... Launched new methods of payment in May 2007

Payment at lottery stores Approximately 9,000 stores in Brazil

Already functioning as bank correspondent

Billing slips

Automatic debit

Financing for passengers via direct consumer credit with the main retail banks

Focus on leisure/lower income segments

081016 citi

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