110516 webconference ingles tam- 1 t11 ss
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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. 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
2
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.
Agenda
� Highlights
� Domestic Market
� International Market
� Financial Results
3
� Guidance and Fleet Plan
We started 2011 with achievements in several areas
Daily Passenger Record
136 thousand passengers transported on April 25th
High levels of operational efficiency
5.4% increase in the daily aircraft utilization to 13.2 hours5.4% increase in the daily aircraft utilization to 13.2 hours
TAM Vacations had 17 new stores inaugurated in 2011, trough the franchise model
Until the end of the year, its network will be composed by
200 stores in the whole
TAM Cargo launched two new
products: the Prepaid service and
the Cooled Big Box
4
10 years since its creation
New website www.tammro.com.br
Growth in sales for other companies
200 stores in the whole country
Status of TAM & LAN combination
August 13, 2010:
Approvals &Registrations:• CVM (Brazil), SVS(Chile), SEC (USA)• Antitrust authorities inMarch 1, 2011:2010:
We announced the intetion to combine with LAN
• Antitrust authorities inChile, Brazil, Spain,Germany, Italy andArgentina
Shareholders’
ExchangeOffer &Closing
March 1, 2011:ANAC approved the proposed corporate structure
January 18, 2011: May 26, 2011:
LATAM
5
Shareholders’Meetings
January 18, 2011:LAN and TAM signedbinding agreements
May 26, 2011:Public HearingLAN, TAM and interestedparties will give their opinionabout the transaction to the TDLC Court.
Multiplus is presenting itself as an important source of profitability
OPERATING HIGHLIGHTS
• 17 billion points issued, a growth of 62% versus 1Q10 and of 6% versus 4Q10
• 9 billion points redeemed, compared to 1.3 billion points in 1Q10 and 7.7 billion points in 4Q10
• Average Breakage rate (12 months) of 23%, versus 22,6% in both periods 1Q10 and 4Q10• Average Breakage rate (12 months) of 23%, versus 22,6% in both periods 1Q10 and 4Q10
NEW PARTNERSHIPS
1Q11
CAPITAL REDUCTION
• Gross Billings of points of R$ 340 million, a growth of 48% versus 1Q10 and of 4.5% compared to 4Q10
• Net Revenue of R$ 242 million, compared to R$ 41 million in 1Q10 and R$ 206 million in 4Q10
• Adjusted EBITDA of R$ 103 million 55% higher than 1Q10 and 124% higher than 4Q10 (margin of 33%)
• Net Income of R$ 71 million, versus R$ 7.5 million in the 1Q10 and R$ 43 million in 4Q10 (margin of 29%)
FINANCIAL HIGHLIGHTS
1Q11
2Q11
6
• On March 18, 2011 was approved a reduction of the Company’s in the amount of R$600 million
• Company’s shareholders will receive reimbursement of R$3.72 per share
To capture the growth of cities not served by our network, we announced an investment in TRIP
Signature of a non-binding agreement to acquire 31% of the total capital of TRIP
Capture market growth
More significant exposure in the medium density routes market
About TRIP
7
About TRIP43 Aircraft fleet – Embraers and ATRs82 Destinations in BrazilR$ 747 million of revenues in 2010
Agenda
� Highlights
� Domestic Market
� Internacional Market
� Financial Results
8
� Guidance and Fleet Plan
ASK10,422
11,872 11,767
ASK, RPK e Load Factor
We increased by 8% our domestic passengers revenue
Domestic Passengers
13%Passenger Revenue - R$ Million
8%
RPK
7,2208,225 8,288
1Q10 4Q10 1Q11
10,422
Load Factor 69% 69% 70%
1%
Yield - R$ Cents
1%
15%
1,3971,581 1,511
1Q10 4Q10 1Q11
4%
RASK - R$ Cents
9
19.3 19.2 18.2
1Q10 4Q10 1Q11
6%
5%
12.6 12.7 12.3
1Q10 4Q10 1Q11
3%
3%
We have entered into strategic partnerships that will increase the supply and distribution of our network
Piauí
Bus tickets to 29 cities in 3 states served by Princesa do Agreste
PiauíCeará
São Paulo
Pernambuco
MinasGerais Pássaro Marron serves 50 cities in the states of
São Paulo and Minas Gerais
10
We will sell bus tickets through TAM Vacations stores and our air tickets will
be sold on bus terminals
Agenda
� Highlights
� Domestic Market
� International Market
� Financial Results
11
� Guidance and Fleet Plan
In dollars, we increased by 14% our international passengers revenue and our RASK by 2% comparing to the previous year
ASK6,557
7,198 7,334
ASK, RPK e Load Factor12%
2%R$816 R$833 R$862
Passenger Revenue - Million6%
International Passengers
RPK5,020
5,749 5,838
1Q10 4Q10 1Q11
6,557
Load
Factor 77% 80% 80%
2%
16%
2%
U$453 U$491 U$517
1Q10 4Q10 1Q11
R$816 R$833 R$8623%
5%
14%
Yield - Cents RASK - Cents
12
1.80 1.70 1.67
1T10 4T10 1T11
-8%
-2%
Avg US Dollar
U$ 9.0 U$ 8.5 U$ 8.9
1Q10 4Q10 1Q11
R$ 16.2R$ 14.5 R$ 14.8
Yield - Cents
9%
2%
4%
2%
U$6.9 U$6.8 U$7.0
1Q10 4Q10 1Q11
R$12.4R$11.6 R$11.7
RASK - Cents
6%
1%
3%
2%
On May 13, we completed our first year as members of Star Alliance
� We recorded 63% increase in the number of passengers with tickets from partner airlines
Additional revenues generated by the Star Alliance member � Additional revenues generated by the Star Alliance member companies exceeded the estimate of US$ 60 million per year
5
6
7
Billion of international RPKs
13
-
1
2
3
4
Routes to Brazil have the higher volumes of passengers
Finland
U.S. and Europe passenger destinations in South America
United Kingdom
Ireland
France
Portugal
Norway
Sweden
Germany
Nether-lands
Denmark
Poland
Estonia
Latvia
Belarus
Ukraine
Lithuania
SlovakiaSwitzerland Austria
Romania
Hungary
Czech Rep.
Croatia
Moldavia
NV
WA
OR
CA
AZ
UT
ID
MT
WY
CO
NM
TX
OK
KS
NE
SD
NDMN
IA
MO
AR
LA
MS
IL
WI
IN
KY
TN
AL GASC
NC
VAWV
OHPA
ME
MI NY
NJ
14
Spain
Portugal
Italy
Yugos-lavia Bulgaria
GreeceAlb.
LA
FL
Source: Airbus DEMAX – IATA PAXis
Agenda
� Highlights
� Domestic Market
� International Market
� Financial Results
15
� Guidance and Fleet Plan
Our EBIT increased 44%, a 3.6% margin
3,043
2,932
2,604
2,527
1Q11 vs 1Q1016.8%
16.0%
1Q11 vs 4Q10-5.6%
-2.5%
In Reais 1Q11 1Q10
3,225
3,006
4Q10
Net Revenue (million)
Operating Expenses (million) 2,932
110
3.6%
380
12.5%
140
129
15.9
2,527
77
2.9%
376
14.5%
(173)
(71)
15.3
16.0%
43.5%
0.7p.p.
1.1%
-2.0p.p.
-
-
3.9%
-2.5%
-49.5%
-3.1p.p.
-25.0%
-3.2p.p.
111.9%
-14.4%
-5.8%
3,006
218
6.8%
507
15.7%
66
151
16.9
Operating Expenses (million)
EBIT (million)
EBIT Margin
EBITDAR (million)
EBITDAR Margin
Financ. Result + Others* (million)
Net Income (million)
Total RASK (cents)
16
15.9
15.4
9.8
9.2
5.9
15.3
14.9
10.2
8.3
5.7
3.9%
3.1%
-3.8%
11.5%
4.0%
-5.8%
-2.6%
-9.7%
-0.9%
-8.1%
16.9
15.8
10.9
9.3
6.4
Total RASK (cents)
CASK (cents)
CASK ex-fuel (cents)
CASK USD (cents)
CASK USD ex-fuel (cents)
* Others includes “Movements in fair value of fuel derivatives” and “Gains (losses) on aircraft revaluation”
2,400
2,700
Liquidity and debt profile
Adequate debt profile Liquidity Position
R$ Million
2,4532,607
1,9142,145
2,569
2,083
2,500
3,000R$ Million
Caixa 2011 2012 2013 2014 2015 2016 2017 2018 2019 20200
300
600
900
1,200
1,500
1,800
2,100
6.3 6.5
8.0
Debentures, bonds and othersLeasing on the balance sheet
Debt mix by currency
Adjusted Net Debt / EBITDAR
R$
2005 2006 2007 2008 2009 2010 1Q11
995
1,9142,083
0
500
1,000
1,500
2,000
17
2005 2006 2007 2008 2009 2010 1Q11
3.8
2.1
5.66.3 6.5
3.8 3.8
0.0
2.0
4.0
6.0
84%
16%
R$
US$
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
WTI Hedge Position
2Q11
2H11
1,0202,0401,810
868691
25%24%21%
Volume¹ Strike² Coverage³
5
9 9 9 9
65 5
Hedge Cash Impact Sensitivity
(USD Million)
1H122H121Q13
1,810900150
919797
21%10%3%
Apr12 –Mar13 1,740 96 10%
Apr11 –Mar12 4,180 87 25%
1 – Volume in thousands of barrels 2 – Average Strike (USD/barrel)
3 – Projected consumption coverage
18
1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13
-9
-2
5
-12
-1
-12
-1
-12
-1
-14
-1
-7
-1
-3
5
-3
5
-1
2
70 USD/barrel
90 USD/barrel
110 USD/barrel
Agenda
� Highlights
� Domestic Market
� International Market
� Financial Result
19
� Guidance and Fleet Plan
Domestic Market
2011 Guidance
Guidance for2011
ActualJan-Mar
Demand growth (RPK) 15% - 18% 17%
Supply growth (ASK) 10% - 13% 13%
Domestic 10% - 14% 13%
International 10% 12%
Load Factor 73% - 75% 74%
Domestic 67.5% - 70% 70%
International 83% 80%
20
* Accumulated until May 13, 2011
Assumptions
New international frequency or destination 2 3
CASK ex-fuel -5% -3.8%
Average WTI USD 93 USD 99*
Average US dollar rate R$ 1.78 1.64*
A340 -2 23
1012
12
156163
168174
182
Fleet Plan
Total Fleet (end of period)
43
A33018
A321 - 8
A320
86
43
20
9
86
8
21
131
103
19
136
12
22
140
24
146
152 156163
A319
26
5
29
3
1Q11 2011 2012 2013 2014 2015
21
B767 Airbus wide-body Airbus narrow-bodyB777 ATR-42
