1Q10 Results Presentation

May 17th, 2010

Welcome to Star Alliance!

2

Warning -

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

We grew our operations consistently in the past years, with emphasis in the international market

CAGR

39%

18%20%

80%

25%

75%

25%

75%

27%

73%

36%

64%

39%

61%

40%

60%

2003 2004 2005 2006 2007 2008 2009

18.0 21.028.0

35.6

47.6

57.164.7

Billion of ASKs

InternationalDomestic

4

We are already the 19th

largest airline in the world and we

decided the best strategy for our internationalization

Reduced connectivity

Higher competitive weakness

Limited capacity to capture traffic

Higher exposure to political and economic located risk

Restrictions to expand agreements with other airlines (members of Global Alliances)

Risk of capital demobilization

with the acquisition

Potential integration

complexity between different

cultures

Without AlliancesWithout Alliances Bilateral AlliancesBilateral Alliances MergerMerger

We identified weaknesses in the three scenarios

* We are the 19th

largest airline in transported passengers, according to the 53rd

edition of the report WATS (last published version).

5

The entry into a global alliance is the best option...

Exposure

Network Identity

Positioning Synergy

Global Scope

GlobalAlliance

Global scope in sales, routs network and traffic coverage

Adds specific expertise from partners

Preservation of culture and identity

Visual exposure globally

Higher competitive ability

Complementary networks

6

... and in this scenario, Star Alliance is definitely the one that best fits the Brazilian market

EUA e Canadá

50%50%

TAM + Partners

4 other companies

Frequency of flights – more than 21,000 daily flights

Direct services – more than 1,100 airports served

VIP Lounges – about 1,000 in 181 countries

Connection time – under the same roof

¹Source: 2008 Annual Report from ANAC

TAM + Partners, considers companies members of Star Alliance + LAN + Pluna

Factors that influence passenger’s choicesFactors that influence passenger’s choices

Europa

56%44%

TAM + Partners

12 other companies

Total

49%51%

TAM + Partners

28 other companies

Volume of international passengers transported to / from Brazil¹Volume of international passengers transported to / from Brazil¹

We are the 7th

largest company in

Star Alliance²

We are the 7th

largest company in

Star Alliance²

²In transported passengers, according to the 53rd

edition of the report WATS

EUA and Canada Europe Total

7

In the domestic market, the acquisition of Pantanal, allowed us to act in another market niche

International long haul flights

Scheduled flights to EUA and Europe

Short haul trunk routes

Link between major cities in Brazil and South American countries

Regional market

Through commercial agreements

Mid density

Cities with mid density population

Now we are

present in all

levels of the

aviation market

Now we are

present in all

levels of the

aviation market

Ideal positioning for strategic decisions

1st

Level

2nd

Level

3rd

Level

4th

Level

8

Transformation creating systems and processes integrated into TAM and with partners

Processes aligned with best market practices

The growth that we can only be supported by a solid technological platform

Core Processes Back-Office

Processes

•

Amadeus:

- Commercial (reserves, direct and indirect channels)

- Check-in & Airports- Revenue Management- Weight and balance (Flight

Operational Dispatch)

•

Oracle R12, ARACs

and Ecomex:

- Accounting- Audit and SOX- Revenue- Treasury- Foreign trade

•

Payment Gateway

•

More services offered to passengers•

More features fore the users•

Revision and standardization of processes•

Increase sales and reduce costs

•

New technological platform•

Connectivity and stability•

Access to supplier’s and market’s innovations

•

Change Management

9

Our domestic passengers revenue reached R$ 1,4 billion

RPK6,232

7,024 7,220

1Q09 4Q09 1Q10

ASK9,713 10,213 10,422

ASK, RPK and Load Factor

LoadFactor 64% 69% 69%

23.6 20.7 19.7

1Q09 4Q09 1Q10

Scheduled Yield - R$ Cents

1,443 1,433 1,397

1Q09 4Q09 1Q10

Passenger Revenue - R$ Million

14.1 13.4 12.8

1Q09 4Q09 1Q10

Scheduled RASK - R$ Cents

Domestic PassengersDomestic Passengers

7%

2%

16%

3%

-3%

-3%

-16%

-5%

-9%

-4%

10

We continue with our strategy of stimulating passengers flying by leisure purposes

* Domestic flights at weekdays

Off Peak Off Peak Off PeakPeak Peak

54%

59%

64%

69%

74%

79%

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

1T09 4T09 1T10

Load Factor x Hour *

1Q09 4Q09 1Q10

11

Direct sales showed significant increases due to means of payment and the implementation of Amadeus

Credit card

Cobranded (up to 10 installments)

Other operators (up to 6 installments)

Financing (up to 48 installments)

Direct debt

Bank payment slip

Lottery kiosks

Means of payment via websiteMeans of payment via website Direct sales growthDirect sales growth

We are the airline company with more options of means of

payment

We are the airline company with more options of means of

payment

Others

Website

1Q09 2Q09 3Q09 4Q09 1Q100

100

200

300

400

500

Direct channel sales(R$ Million)

% directchannel 22% 22% 24% 28% 28%

After Amadeus

Before Amadeus

12

We can observe international passengers revenue’s growth in US dollars

RPK4,573

4,935 5,020

1Q09 4Q09 1Q10

ASK6,391 6,534 6,556

ASK, RPK and Load Factor

LoadFactor 72% 76% 77%

U$7.5

U$7.5

U$9.0

1Q09 4Q09 1Q10

R$17.4

R$13.0

R$16.2

Scheduled Yield - Cents

U$345

U$368

U$453

1Q09 4Q09 1Q10

R$797 R$

640

R$816

Passenger Revenue - Million

U$5.4

U$5.6

U$6.9

1Q09 4Q09 1Q10

R$12.5

R$9.8

R$12.4

Scheduled RASK - Cents

2.31.7 1.8

1Q09 4Q09 1Q10

Avg

US DollarAvg

US Dollar

International PassengersInternational Passengers

3%

0%

10%

2%

-7%

25%

21%

20%

2%

28%

23%

31%

0%

27%

23%

28%-22%

4%

13

Financial Indicators

Net Revenue (million)

Operating Expenses (million)

EBIT (million)

EBIT Margin

EBITDAR (million)

EBITDAR Margin

Financial Result + Others* (million)

Net Income (million)

Total RASK (cents)

CASK (cents)

CASK ex-fuel (cents)

CASK USD (cents)

CASK USD ex-fuel (cents)

2.604

2.508

96

3,7%

377

14,5%

(173)

(58)

15,3

14,8

10,1

8,2

5,6

2.618

2.486

132

5,0%

476

18,2%

(91)

26

16,3

15,4

11,1

6,7

4,8

1Q10 vs 1Q09

-0,5%

0,9%

-26,8%

-1,3p.p.

-20,9%

-3,7p.p.

-89,9%

-

-5,7%

-4,3%

-9,3%

22,7%

16,3%

2.497

2.371

126

5,1%

373

14,9%

93

(334)

14,9

14,2

9,8

8,1

5,7

1Q10 vs 4Q09

4,3%

5,8%

-23,7%

-1,4p.p.

0,9%

-0,5p.p.

-

82,6%

2,9%

4,3%

2,6%

0,6%

-1,0%

In Reais 1Q101Q10 1Q091Q09 4Q094Q09

* Others includes “Movements in fair value of fuel derivatives”

and “Gains (losses) on aircraft revaluation”

14

Liquidity and debt profile

84%

16%

Adequate debt profileAdequate debt profile

R$ Million

Debt mix by currency

Strategic liquidity positionStrategic liquidity position

R$ Million

Adjusted Net Debt / EBITDARAdjusted Net Debt / EBITDAR

Obs.1: 2010 EBITDAR considers last 12 months from 1Q10Obs.2: Net Debt Adjusted includes annual operating leases x 7Obs.3: Debt is considered in US GAAP for 2005 and 2006 and in IFRS since 2007

R$

US$

Debentures, bonds and othersLeasing on the balance sheet

Cash 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 20200

300

600

900

1,200

1,500

1,800

2,100

2,400

2,700

2005 2006 2007 2008 2009 1T10

995

2,4532,607

1,9142,166

2,637

0

500

1,000

1,500

2,000

2,500

3,000

2005 2006 2007 2008 2009 1Q10

3.8

2.1

5.66.3 6.5 6.6

0.0

2.0

4.0

6.0

8.0

15

New WTI hedging policy

0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 240

20

40

60

80

100%

Hedging Policy

Maximum level

Timeline (months)

Minimum level

Coverage level

After four years, we revised our

hedging policy, in order to reflect

the new market conditions

After four years, we revised our

hedging policy, in order to reflect

the new market conditions

% c

over

age

of th

e es

timat

ed c

onsu

mpt

ion

16

2010 Guidance

Domestic Market

Domestic Market

Demand growth (RPK) 14% -

18% 32%

Supply growth (ASK) 12% 5%

Domestic 14% 7%

International 8% 1%

Load factor 69% 71%

Domestic 66% 68%

International 75% 76%

New international frequency or destination 2 ---

CASK ex-fuel -6% -9%1

Average WTI USD 85 USD 80

Average US dollar rate R$ 1,81 R$ 1,79AssumptionsAssumptions

Guidancefor 2010

Guidancefor 2010

ActualJan - AprActual

Jan - Apr

1

Considers

the

period

from

January

to March

17

Fleet plan

B767 Airbus wide-body Airbus narrow-bodyB777 ATR-42

43

A340 - 2

A33016

A321 - 5

A32081

A31921

43

2

165

81

24

5

43

2

18

7

84

25

5

43

2

20

9

84

28

5

83

20

125

103

18

129

10

21

134

2009 1T10 2010 2011 2012 2013 2014

132140

148155 156 160

165

Total Fleet (end of period)Total Fleet (end of period)

invest@tam.com.br www.tam.com.br/ir