Q R l1Q12 Results PresentationPresentation

May 14 2012May,14 2012

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

Warning - Information and Projection

This notice may contain estimates for future events. These estimates merely reflect the expectations of the Company’sThis 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’saffect 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. g p y p y g

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 anyinvestment 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. j g

2

1. Highlights

2. LATAM

Agenda 3. Financial ResultsAgenda

3

3

1. Highlightsg g

4

Highlights of our business unitsg g

•New market campaign: “When we talk, we fly together”

W h d f th f th ti th "D l f th•We have earned for the fourth time the "Deal of the Year"

•Better fuel management in Latin America

•TAM Fidelidade receives Freddie Awards•Certification to provide TAM Fidelidade receives Freddie Awards•Certification to provide maintenance services for ATR-72

•Integration to the Airbus MRO Network

f•Profile on social networks Facebook and Twitter

•Award: Best Performance of Thalysy

•Launched kiosks at Pãode Açucar store

•Signature of definitive agreements regarding the joint venture with AIMIA

•New cargo terminal in São Paulo

•Partnership between TAM Cargo and Multiplus

5

•Partnership between TAM Cargo and Multiplus

We revised our 2012 guidanceg

Guidance 2012Reviewed

Real 2012Jan Mar

Guidance 2012Original

Max.

Demand Growth (RPK) 8% 11% 7% 9% 7%Domestic Market

Reviewed

Min.

Jan - MarOriginal

Min. Max.

( )

Supply growth(ASK) 1% 3% -1% 1% 4%

Domestic 0% 2% -2% 0% 5%

International 1% 3% 1% 3% 3%

Load Factor 76% 78% 76% 78% 73%

Domestic 72% 74% 72% 74% 68%

International 83% 85% 83% 85% 83%

Average WTI 95 95 103Assumptions Average WTI

Average US dollar rate 1.74 1.82 1.77

Assumptions

6

We maintained our fleet plan unchanged

156 157 162 169 176180

244 8 1012 123 3 3

156 157 162 169 176

120

150 22 22 20 23 244 8 10

90

127 124 129 134 140

30

60127 124 9

01T12 2012 2013 2014 2015

Airbus Wide body Boeing 777 Boeing 767Airbus Narrow  body

7

1. Destaques2 LATAMq2. LATAM

8

Final steps in the Merger with LAN

May 7:May 7: 

CVM approved the

Edital

May 10: Launch of 

the Exchange Offer

May 9:  

F4 Form DeclaredEff ti

June 12: Closing of 

the ExchangeEffective the Exchange Offer

Expected annual synergies of US$600 to US$700 million fully achieved by the end of the fourth year, of which US$170 to US$200 million will be achieved by the end of the first year.y

One‐time cost of between US$150 to US$200 million.

9

3. Financial Results

10

Multiplus Highlights

growth in Points Issuedvs 1Q11

24.5%

mln in Gross Billings(26.6% growth vs 1Q11)

R$ 430

mln in Dividends paid(including interest on capital)

R$ 261

thousand new Membersvs 4Q11 reaching 9 8 million members

400

11 11

vs 4Q11, reaching 9.8 million members

Multiplus Results

398 3

Net revenue of R$ 347.1 millionR$ 430.4 mln in gross billingsR$ mln & mln pointsR$ mln

242.0285.1

321.5

398.3347.1

17.415.2

339.9 354.6397.3

433.6 430.4R$ mln

9.010.9

12.5

5

1Q11 2Q11 3Q11 4Q11 1Q12Receita Líquida Pontos resgatados1T11 2T11 3T11 4T11 1T121Q11 2Q11 3Q11 4Q11 1Q12

81.2

EBITDA Ajustado de R$ 91,6 milhões R$ 61.6 mln in Net Income92.8

91.6R$ mlnR$ mln

70.9

51.3

70.961.6

89.1

81 382.3

81.3

12

1T11 2T11 3T11 4T11 1T121T11 2T11 3T11 4T11 1T121Q11 2Q11 3Q11 4Q11 1Q12 1Q11 2Q11 3Q11 4Q11 1Q12

We recorded a 6% increase in net revenue

In Reais 1Q12 vs 1Q11

1Q12 vs 4Q11

1Q12 1Q11 4Q11

Net Revenue (million)

Operating Expenses (million)

3,228 

3,252 

1Q116%

11%

4Q11‐10%

‐1%

3,042 

2,932 

3,579

3,281 p g p ( )

EBIT (million)

EBIT Margin

,

(23)

‐0.7%

‐

‐

‐

‐

,

110

3.6%

,

298

8.3%

EBITDAR (million)

EBITDAR Margin

Financial Result + Others* (million)

298

9.2%

235

‐22%

‐3.3p.p.

68%

‐51%

‐7,9p.p.

380

12.5%

140

612

17.1%

(78)

Net Results (million)

Total RASK (cents)

Financial Result + Others* (million) 235

101

16.3

68%

‐22%

2%

‐

‐1%

‐10%

140

129

15.9

(78)

96

18.1Total RASK (cents)

CASK (cents)

CASK ex‐fuel (cents)

16.4

10.0

7%

2%

‐1%

‐3,4%

15.4

9.8

16.6

10.4

CASK USD (cents)

CASK USD ex‐fuel (cents)

9.3

5.7

1%

‐4%

1%

‐2%

9.2

5.9

9.2

5.8

13*Movements in fair value of fuel derivatives

We changed the accounting regarding reward tickets issued but not flownissued, but not flownFlow of accrual and redemption points for airline tickets

P i A ti M d l

Changing in the accounting methodology for reward tickets revenue

CLIENT(loyalty program

member)

Previous Accounting Model

Award ticket issuance

Products or Services

PurchaseRevenue is recognized

Period in which the passenger can use the award ticket

Accrue

D + 0 D + 180

Current Accounting Model

POINTSAward ticket issuance

Period in which the passenger can use the award ticket

TICKETS

Redeem

D + 0 D + 180

Revenue is recognized on the balance sheet as "Deferred Income"

Revenue is recognized at the moment the passenger check‐in

TICKETS

The changes have no impact on the Multiplus S.A. Financial Statements

14

Adjusting* our result, we recorded 9% increase in net revenue and EBIT margin of 2 3%revenue and EBIT margin of 2.3%

1Q12 ComparisonIn Reais

Adjusted vs Accounting

AdjustedAccounting

1Q12 Comparison 

Net Revenue (million) 3,327 

Accounting

‐3%3,228 

Operating Expenses (million)

EBIT (million)

3,252 

75

0%

‐

3,252 

(23)

No Impact

EBIT margin

EBITDAR (million)

2.3%

397

‐3.0 p.p

‐33%

‐0.7%

298

EBITDAR margin

RASK geral (centavos)

11.9%

16.8

‐2.7 p.p.

‐3%

9.2%

16,3

15 * In order to continuously improve the measure of our business, we started deferring the revenue related to the award tickets issued, but not flown, thus impacting the lines of passenger revenue

We continued with the yields recovery in the domestic market with an increase of 3%market, with an increase of 3%

Adjusted* Domestic Passengers

ASK12 373

ASK, RPK and Load Factor5%

Passenger Revenue - R$ Million

5%11,767 12,168 12,373

2%

2%

1 511 1 641 1 583

-4%

RPK8,288 8,278 8,426

1Q11 4Q11 1Q12Load

2%1,511 1,641 1,583

1Q11 4Q11 1Q12LoadFactor 70% 68% 68%

Yield - R$ Cents

1Q11 4Q11 1Q12

RASK - R$ Cents

-5%

3%

-4%

0%

5%

18.2 19.8 18.8 12.3 12.7 12.3

16

1Q11 4Q11 1Q12 1Q11 4Q11 1Q12

* In order to continuously improve the measure of our business, we started deferring the revenue related to the award tickets issued, but not flown, thus impacting the lines of passenger revenue

In the annual comparison, international passenger revenue increased by 22% and the RASK 20% in dollarsrevenue increased by 22% and the RASK 20% in dollars

Adjusted* International Passengers

ASK

ASK, RPK and Load Factor

R$1,071 R$1,117

Passenger Revenue - Million30%2%

ASK7,334 7,619 7,455 R$862

$ ,

4%

22%

-2%

5%

RPK5,838

6,089 6,150

1Q11 4Q11 1Q12Load

U$516 U$595 U$631

1Q11 4Q11 1Q12

6%1%

Q Q QLoadFactor 80% 80% 82%

Q Q Q

R$14 1R$15.0RASK - CentsYield - Cents 21%

6%

Avg US DollarR$11.7

R$14.1R$15.0

28%

7%R$ 14.8

R$ 17.6 R$ 18.2

12%

31%

1.67 1.80 1.77

6%

-2%

U$7.0 U$7.8 U$8.59%

20%

U$ 8.9 U$ 9.8 U$ 10.3-3%

31%

17

1Q11 4Q11 1Q121Q11 4Q11 1Q121Q11 4Q11 1Q12

* In order to continuously improve the measure of our business, we started deferring the revenue related to the award tickets issued, but not flown, thus impacting the lines of passenger revenue

Liquidity and debt profile

Adequate debt profile Liquidity Position

1,800

2,100

R$ Million2,453

2,607

1,9142,145

2,568 2,567

2,0482,000

2,500

3,000

900

1,200

1,500

995

500

1,000

1,500

,

2012 2013 2014 2015 2016 2017 2018 2019 2020 20210

300

6002005 2006 2007 2008 2009 2010 2011 1Q12

0

2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Debentures, bonds and othersLeasing on the balance sheet

Debt mix by currency

Adjusted Net Debt / EBITDAR

$ 6 3 6 5

8.0

8%

R$

3.8

5.66.3 6.5

3.84.3

4.9

4.0

6.0

92%US$ 2005 2006 2007 2008 2009 2010 2011 1Q12

2.1

0.0

2.0

18 Obs.1: Net Debt Adjusted includes annual operating leases x 7Obs.2: Debt is considered in US GAAP for 2005 and 2006 and in IFRS since 2007

Teremos sinergias entre US$ 600 milhões e US$ 700 milhões anuais700 milhões anuais

Receitas: Carga US$120-125 Milhões, Pax US$240-285 Milhões Custos US$240-290Milhões

Fonte da sinergia

Novos serviços compartilhamento

Valor US$ milhões

Carga 125 Aeroportos Consolidação de funções em 120 30

JustificativaFonte da sinergia

Valor US$ milhões Justificativa

85

Novos serviços, compartilhamento de melhores práticas

Maior acesso a hubs conjuntos e atratividade da rede combinada

Carga 125

Relevância Procurement

Aeroportos Consolidação de funções em aeroportos em que ambas operam

Aproveitamento de economias de

120

75 70 100

30

85

80

atratividade da rede combinada

Rede combinada cria novos pares de cidades e mais serviçosNova e maior

da rede Procurement

Corporativo

pescala em contratos

Racionalização dos gastos corporativos gerais e algumas

75

70 20

70 100

80

45A combinação da rede suporta no os destinos e h bs

de cidades e mais serviçosconectividade

Novos

Corporativo

TI

corporativos gerais e algumas funções

Eficiências em plataformas comuns

70

45

20

65 7045

50

novos destinos e hubs

Incluindo a consolidação de contratos com companhias aéreas

voos

Outras receitas

TI

Manutenção

p

Aproveitamento de economias de

45

35 2520

65 70

50

25

contratos com companhias aéreas associadas e aumento da utilização

Consolidação dos programas e Passageiro

com passageiros

Vendas

Manutenção

Eficiência com esforços de vendas

escala e de eficiências35

15

2520

4035

invest@tam.com.br

www.tam.com.br/ir

19

25 compartilhamento das melhores práticas

frequente Vendas combinados15 4035

19

20