Merrill LynchMerrill LynchGlobal Transportation ConferenceGlobal Transportation Conference

New York, June 13 - 14, 2007

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Low OperatingCosts

UndisputableBetter Service

CompetitivePrices

Sustainable Strategyto Maintain Market

Leadershipand Profitability

TAM is a low cost company with better service at competitive prices

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Previousperiod

Currentperiod

J F MAM J J A S OND J F MAM J J A S OND J F MAM J J A S OND J F MAM80859095

100105110115120125130

Domestic Market - Variation

Source: ANAC

Accum. market growth 2006 ~12%

The domestic market growth still strong in 2007, reaching 14% in the first 5 months of the year

Accum. market growth 2005 ~19%

Accum. market growth 2004 ~12%

Accum. market growth 2007 ~14%

2004 2005 2006 2007

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33,0%35,8%

47,8% 49,1%43,5%

2003 2004 2005 2006 Jan - Mai

TAM 49,7%

GOL 40,8%

Other3,2%

BRA2,2%Varig

4,1%

We have been domestic market leaders since 2003, ending May with 49,7%

Domestic Market Share - May/07

Domestic Market Share (RPK’s)

Source: ANAC

BRA 3,4%

Varig 4,6%

Other 5,1%

TAM 48,5%

GOL 38,5%

Domestic Market Share – 1Q07

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Previousperiod

Market

TAM

J F MAM J J A S OND J F MAM J J A S OND J F MAM J J A S OND J F MAM406080

100120140160180200

International Market - Variation(vs previous year)

Source: ANAC

The international market (among the Brazilian carriers) has been diminishing…

Accum. market growth 2004 ~8%

Accum. market growth 2005 ~7%

Accum. market

decrease 2006 ~30%

Accum. market decrease 2007 ~33%

Acum TAM 2006~41% Acum TAM 2007

~82%Acum TAM 2005

~40%Acum. TAM 2004~30%

2004 2005 2006 2007

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12,00% 14,3%

37,3%

65,2%

18,8%

2003 2004 2005 2006 Jan - Apr

TAM 72,4%

GOL 13,7%

Varig 10,1%

Other 3,9%

International Market Share– May/07

International Market Share

Since July 2006, we are international market leaders among the Brazilian companies

Source: ANAC

International Market Share – 1Q07

TAM 60,9%

Varig12,1%

GOL 17,9%

Other9,1%

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86103

287

1,188

158157

506

1,093

1Q06 1Q07

1,664

1,913

0

500

1,000

1,500

2,000

Gross Revenues (R$ M)

Dom.Pax

Int.Pax

CargoOther

15%

Domestic passenger revenue growth 8%

RPK growth 22%ASK growth 22%

International passenger revenue growth 76%

RPK growth 64%ASK growth 78%

Cargo revenue growth 52%Other revenue growth 85%

Increase of sales of Loyalty Program points and expired tickets compensated by the sub-leasing

Strong revenue growth quarter over quarter

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Our price differential to the second player decreased to 5%

GOLTAM

2001 2002 2003 2004 2005 2006 1Q0715

20

25

30

35

Yield scheduled domesticR$ Cents

GAP 60% 30% 18% 13% 15% 14% 5%

Note: Gol’s yield da GOL grossed up 1.05x to include taxes

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1Q06

19.8

20.268.4

31.0

14.377.5

18.5

8.5

4Q06

19.3

17.569.7

26.4

16.673.7

22.6

10.6

1Q07

16.7

14.569.3

22.0

14.171.3

19.8

9.6

1Q06 vs 1Q07

-15.4%

-28.2% 0.8 p.p.

-29.0%

-1.5% -6.2 p.p.

7.2%

13.6%

4Q06 vs 1Q07

-13.3%

-17.1% -0.3 p.p.

-16.7%

-15.2% -2.4 p.p.

-12.4%

-8.7%

Our total RASK reduced 15%, mainly because of the domestic yield decrease of 29%

RASK Total1

RASK Scheduled Domestic2

LF Scheduled Domestic

Yield Scheduled Domestic3

RASK Scheduled International2

LF Scheduled International

Yield Scheduled International3 (em R$)

Yield Scheduled International3 (em USD)

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

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CASKex-fuel

1Q06 2Q06 3Q06 4Q06 1Q07

17.4318.69 18.43

16.98 15.92

0

5

10

15

20

Total CASK (BR GAAP - R$ cents)1Q06 vs 1Q07

-7.5%

-8.7%

...and our CASK decreased 8.7% compared to 1Q06

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RASKCASK

2002 2003 2004 2005 2006 1T0715

20

25

RASK/CASK (R$ Cents)BR GAAP

EBITMargin

Spread

-7.1%

-1.1

-0.9%

-0.2

6.5%

1.4

7.5%

1.5

13.6%

2.8

4.8%

0.9

The strong decline in revenue decreased the spread (RASK – CASK)…

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1Q06 1Q07

376340

0

100

200

300

400

EBITDAR(BR GAAP - R$ M)

1Q06 1Q07

189

88

0

50

100

150

200

EBIT(BR GAAP - R$ M)

Margin over Net Revenue

1Q06 1Q07

127

59

0

50

100

150

Net Income(BR GAAP - R$ M)

-9%-53% -53%

24%

19%12%

5%3%

8%

…reducing our margins in BR GAAP…

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1Q06 1Q07

373331

0

100

200

300

400

EBITDAR (US GAAP - R$ M)

1Q06 1Q07

238

146

0

50

100

150

200

250

300

EBIT(US GAAP - R$ M)

24%

15%

8%

18%

1Q06 1Q07

268

138

0

40

80

120

160

200

240

280

Net Income(US GAAP - R$ M)

8%

-11%

17%

...and US GAAP

Margin over Net Revenue

-49%-39%

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BR GAAP Leasing IncomeTaxes

Others US GAAP

59.2

119.3

-44.53.9 137.9

0

50

100

150

200

Net Profit Reconciliationto US GAAP 39 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

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1Q06 1Q07

0.85

0.39

Earnings per shareBR GAAP (R$)

1Q06 1Q07

1.80

0.92

Earnings per shareUS GAAP (R$)

Our earnings per share decreased

-54% -49%

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Our foreign revenues increased, reducing the mismatch in currencies

20%

80%

33%

67%

1Q06 1Q07

100% 100%

0

20

40

60

80

100%

Revenues(Passenger + Cargo)

DomesticInternational

Approximately 50% of our costs

(including fuel) are exposed to foreign

currencies

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Since our second public share offer, our ADR had an increase in valuation of 75%

Accumulated variation since March 10, 2006

0,5

1,0

1,5

2,0

10-mar-06 11-jun-07

TAMM4 IBOVESPA DOW JONES ADR TAM

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Average domestic market share above 50%Average domestic load factor at

approximately 70%Aircraft utilization per day (block hour)

higher than 13 hoursReduction of 7% in total CASK ex-fuel in BR

GAAP yoyOpportunity 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

Our expectations for 2007, disclosed in December 2006, remain the same

13.6%*

1Q07

• Since January• Milan since

March

49.1%*71.5%*

13,0

7.5%

* Jan – May Accumulated

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Domestic Market 2007 International Market 2007

~30% increase in ASKs At least an additional 3

destinations Strengthening of international

gateways for domestic market Guarulhos Galeão

Increasing of frequency on main domestic markets Brasília Congonhas Confins

Implementing overhub flights: new city-pairs

~60-70% increase in ASKs Additional daily frequency to

Paris beginning in January New flight to Milan in 1S07 Additional longhaul frequency or

destination to be disclosed Strengthening of Latin American

presence, both frequencies and destinations

In 2007, we will be expanding both frequencies and destinations

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Due to international market opportunity, we are strengthening our international partnerships...

Signature of several MOUs: Code-share with TAP serving several destinations in Portugal and

integration of TAM’s Programa Fidelidade with TAP’s Programa Victoria. Operations starting in July;

Code-share with LAN with unlimited seat sales within South America: Brazil, Chile, Argentina, Peru, Venezuela and integration with LAN’s PASS;

Code-share with United Airlines serving several destinations in the USA (strong hubs in Chicago and Washington) and integration with Mileage Plus;

Code-share with Lufthansa serving the German market – connecting point of flights to Europe, Asia, Middle East and Africa. Integration with Miles & More;

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3

15

88

6

416

103

420

106

420

112

6

20

115

2007 2008 2009 2010 2011

112123

130 136 141

0

50

100

150

Total Fleet

F100

Airbusnarrow-body

Airbuswide-body

MD11B777

...increasing our fleet in 3 wide-body aircraft in 2007 to long haul destinations

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Fleet and network Distribution costs Overhead

Increase of block hours to over 13 hours per day per aircraft in 2007

6 extra seats in the A319/320 fleet

Increase in direct sales through: Site improvement Fare bundles Call center

outsourcing New means of

payment Insourcing of

representatives Adjusting indirect sales

commissions to higher % on offpeak flights

Outsourcing of non-core activities

Redefinition of service standards

Review of spans&layers in the hierarquy

Implementation of new automated processes

Improved sourcing capabilities

Our cost targets are aggressive, but the roadmap is already laid out

In implementationImplemented

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2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

8.0 13.0 18.0 23.0 28.0 33.0 38.0

2006 EBITDAR Margin (%)

Cash

Cos

ts (

$ ce

nts/

ASK)

We continue among the most profitable companies in the world

Source: Public Reports of December 31, 2006 (except for Air Asia and Malaysia, which refer to 2005 figures)

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Investor Relations

Phone: +55 (11) 5582-9715

Fax: +55 (11) 5582-8149

e-mail: invest@tam.com.br

Website: www.tam.com.br/ri

Contact

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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.

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