Goldman Sachs Conference
São Paulo, November 14, 2007
2 2 “Unlocking
value”
Information and ProjectionThis 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 forwardlooking 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 3 “Unlocking
value”
Since 2003 we have the leadership in the domestic market...
14.4
20.3
42.4
20.7
8.5
14.5
40.3
30.6
13.5
38.9
11.7
34.6
12.2
33.6
19.4
33.0
8.8
31.1
22.3
35.8
25.5
25.9
41.3
10.3
34.0
47.8
39.2
48.8
2000 2001 2002 2003 2004 2005 2006 Jan-Oct2007
0
20
40
60
80
100%
Domestic Market Share (RPKs)
TAMGOLVARIGVASPTRANSBRASILBRAOther
4 4 “Unlocking
value”
...and we became the leading Brazilian carrier in the international market as of July 2006
75.0
7.4
82.1
13.9
87.4
12.5
87.9
12.0
85.4
14.5
77.0
18.4
50.4
7.3
37.3
6.2
12.5
14.7
66.6
2000 2001 2002 2003 2004 2005 2006 Jan-Oct2007
0
20
40
60
80
100%
Domestic Market Share (RPKs)
TAMGOLVARIGVASPTRANSBRASILOther
5 5 “Unlocking
value”
2007 has been a year of many challenges...
Macro Economy
Airline Industry
Airlines Brazil
TAM
High volatility (e.g. subprime crisis)
Fuel prices
Scarcity of aircraft, seats, etc due to overall growth in the sector
Conclusion of the “Varig” question mark Changes in the governing structure of the
industry Collapse of BRA
Impact of infrastructure on operations
Accident
6 6 “Unlocking
value”
… but despite the difficulties in the 3Q07, TAM remained above the average load factor for the industry
Jul Aug Sep
74
62
66
Domestic Load Factor
Jul Aug Sep
76
67
71
International Load Factor
71
59
64
72
6366
TAM’s Load Factor Market Average Load Factor
7 7 “Unlocking
value”
TAM
2005 1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q0715
20
25
30
35
Yield scheduled domesticR$ Cents
Our yield environment for the scheduled domestic market is recovering
2Q vs. 3Q+ 9.4%
8 8 “Unlocking
value”
CASKex-fuel
1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07
17.4318.69 18.43
16.9815.92 16.52 16.54
0
5
10
15
20
Total CASK (BR GAAP - R$ cents)
3Q06 vs 3Q07
-7.3%
-10.2%
Our CASK decreased 10% compared to 3Q06…
9 9 “Unlocking
value”
3Q06 3Q07
569
313
0
200
400
600
EBITDAR(BR GAAP - R$ M)
3Q06 3Q07
349
57
0
100
200
300
400
EBIT(BR GAAP - R$ M)
Margin over Net Revenue
3Q06 3Q07
213
49
0
25
50
75
100
Net Income(BR GAAP - R$ M)
-45% -84% -77%
27%
15%17%
3%
2%
10%
… but margins reduced, compared to 3Q06 in BR GAAP…
10 10 “Unlocking
value”
3Q06 3Q07
549
306
0
200
400
600
EBITDAR(US GAAP - R$ M)
3Q06 3Q07
382
113
0
100
200
300
400
EBIT(US GAAP - R$ M)
26%
18%
6%
15%
3Q06 3Q07
229
143
0
40
80
120
160
200
Net Income(US GAAP - R$ M)
7%
-44%
11%
…and in US GAAP
Margin over Net Revenue
-38%-70%
11 11 “Unlocking
value”
BR GAAP Leasing IncomeTaxes
Others US GAAP
49
129
-46
11 143
0
50
100
150
200
Net Profit Reconciliationto US GAAP
41 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
12 12 “Unlocking
value”
3Q06 3Q07
1.41
0.32
Earnings per shareBR GAAP (R$)
3Q06 3Q07
1.52
0.95
Earnings per shareUS GAAP (R$)
Our earnings per share decreased compared to 3Q06
-77% -38%
13 13 “Unlocking
value”
In the past 31 years, TAM has shown its ability to grow and adapt
Our purpose today...
We will be discussing our actions in 2007
...demonstrating what we have done differently
...and what we are going to do in the future
14 14 “Unlocking
value”
We have changed from only a high end premium customer focus to serving the full spectrum
TAM
Premium / Business
Commodity / Leisure
Reg
iona
lInternational
First class
Business class
Economy class
Commercial
agreements
with
regional
carriers
TAM’s Origin
TAM up to 1998
15 15 “Unlocking
value”
As Brazil becomes “stable”, the leisure segment will become increasingly more important
Leis
ure
Bus
ines
s
2000 2001 2002 2003 2004 2005 2006 2007E
17.9
26.6 27.025.2
28.2
35.4
39.843.5
0
10
20
30
40
50
Domestic Market Passenger Mix (RPK M)
CAGR
11%
21%
Travell ing is one of the top “desire” items for consumption
* TAM Estimates
16 16 “Unlocking
value”
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
17 17 “Unlocking
value”
...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 slipsAutomatic debit Financing for passengers via direct consumer credit with the
main retail banks
Focus on leisure/lower income segments
18 18 “Unlocking
value”
...optimizing the utilization of our aircraft on off peak hours
* Average day in past month
0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 2350
55
60
65
70
75
80%
Domestic load factor per hour
Off Peak Off Peak Off PeakPeakPeak
19 19 “Unlocking
value”
We continue to deliver more efficient processes in order to focus on what the customer wants
Become preferred airline
carrier
Focus on customer needs
Translate into actions
Efficient Delivery
To be efficient means not only
reduce costs but also increase
the proportional benefits
20 20 “Unlocking
value”
We are beginning to evaluate new potential business units in the company
TAM Linhas Aéreas
MRO(São Carlos)
Loyalty Program
HandlingCargo
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
21 21 “Unlocking
value”
We have gone through waves of development…
Turnaround process (2002 -2003) Overcapacity
Loss of founder
High costs
Low operational efficiency
Surviving
Assets optimization (2004 – 2007) Increase in domestic
load factor
Better aircraft utilization
Access to financial markets (equity and debt)
Compliance with SOX
IOSA certificate
Growing Profitability
22 22 “Unlocking
value”
…but we have seen new and compelling horizons…
All companies compete in the same market…
Exploiting demand…
Making the value-cost trade-off…
Aligning the whole system of the company’s activities with either differentiation or low cost
Blue Ocean Strategy
Red Ocean is where...
Company creates an uncontested marketplace…
…Creating and capturing new demand…
Breaking the value-cost trade-off…
Aligning the whole system in pursuit of differentiation and low cost
Blue Ocean is where...
23 23 “Unlocking
value”
…resulting in a new third wave
Unlocking Value
Opportunities for value generation (future) New passenger
segmentation
Cargo
Loyalty Program
Maintenance
Turnaround process (2002 -2003) Overcapacity
Loss of founder
High costs
Low operational efficiency
Surviving
Assets optimization (2004 – 2007) Increase in domestic
load factor
Better aircraft utilization
Access to financial markets (equity and debt)
Compliance with SOX
IOSA certificate
Growing Profitability
24 24 “Unlocking
value”
Average domestic market share above 50% Average domestic load factor at approximately
70% Aircraft utilization per day (block hour) higher
than 13 hours Reduction of 7% in total CASK ex-fuel in BR
GAAP yoy Opportunity in the international market
Third frequency to ParisInauguration of two new international long
haul frequencies
Market demand growth from 10% to 15% (in RPK terms)
Guidance 2007
TAM
Market
We continue with our 2007 guidance, disclosed Dec 2006, demonstrating our commitment to investors
10.6%*
Accum. 07
• Since January• Milan since
March• Frankfurt (Nov)• Madrid (Dec)
48.8%*
70.0%
12.8
8.5%
* Jan – Oct Accumulated
25 25 “Unlocking
value”
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)
Guidance 2008
We have a positive outlook for 2008
Market
TAM
26 26 “Unlocking
value”
310
80
13
3
14
87
6
4
18
101
4
20
104
4
22
110
4
24
113
8
24
115
3Q07 2007 2008 2009 2010 2011 2012
106 110
123128
136141
147
0
50
100
150
Total Fleet
Our growth plan is supported by a flexible fleet plan
B777 MD11 Airbus wide-body Airbus narrow-body F100
TAM will be monofleet
in the domestic
operations by 1Q08
27 27 “Unlocking
value”
This is how we have been describing our strategy
Low Operating
Costs
UndisputableBetter Service
CompetitivePrices
Sustainable Strategyto Maintain Market
Leadershipand Prof itabi l i ty
28 28 “Unlocking
value”
TAM: the best fitting product for the customer (and stakeholders) based on efficient delivery
Low Operating
Costs
UndisputableBetter Service
CompetitivePrices
Sustainable Strategyto Maintain Market
Leadershipand Prof itabil i ty