Calyon Conference Calyon Conference

New York, December, 2006

2

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

Low OperatingCosts

UndisputableBetter Service

CompetitivePrices

Sustainable Strategyto Maintain Market

Leadershipand Profitability

3

19,2%21,8%

30,7%34,9% 33,0%

35,8%

43,5%47,0%

27,2%

1998 1999 2000 2001 2002 2003 2004 2005 Jan-Set/06

Domestic Market Share (RPK’s)

Domestic Market Share (RPK’s) – 3Q06 Domestic Market Share (RPK’s) - Sep/06

Source: ANAC

GOL ; 36,7%

TAM ; 51,1%

Others; 4,8%

BRA; 4,0%Varig; 3,4%

TAM ; 51,7%

GOL ; 36,2%

Others; 4,5%

Varig; 4,3%

BRA; 3,4%

Undisputed domestic market leader...

4

0,1%3,8%

13,9% 12,5% 12,0%14,3%

18,8%

32,4%

7,9%

1998 1999 2000 2001 2002 2003 2004 2005 Jan-Set/06

International Market Share (RPK’s)

International Market Share (RPK’s) – 3Q06 International Market Share (RPK’s) - Sep/06

Source: ANAC

TAM 54,9%

Varig24,7%

GOL 11,3%

Others9,1%

TAM59,9%

Varig19,1%

GOL12,8%

Others8,2%

... As well as in the international market

5

3Q06 Highlights (1/2)

Aircraft delivery 4 new A320, reintegration of 2 A330

Strengthening of our network International market:

Daily night frequency to New York New flight between Curitiba and Buenos Aires Direct flights from Rio de Janiero, Galeão airport, to Buenos Aires, Assuncion,

operated by TAM Mercosur New flights to Zurich and Geneva operated in code-share with Air France

Domestic market: New routes to Boa Vista and announcement of flights to Rio Branco Strengthening operations in the airports of Guarulhos, São Paulo, and Galeão,

Rio de Janeiro, increasing the number of direct flights to several destinations

6

3Q06 Highlights (2/2)

Increase in operational efficiency Increase in block hours per aircraft/day by 6.6% yoy, from 12.1 hours to 12.9

hours Average load factor in 3Q06 of 76.8% (yoy increase of 2.7 p.p.)

Agreement with Unibanco to increase number of members of the Loyalty Program

TAM included in the Ibovespa and IBrX50 indexesIssuing of R$ 500 millions through public offering of non convertible debentures with 6

years termTAM’s rating

Local debentures issuing A+(bra) by Fitch brA by Standard & Poor’s

Global rating BB both for Standard & Poor’s and for Fitch

7

70100284

1,156

137124

453

1,461

3Q05 3Q06

1,610

2,176

0

600

1,200

1,800

2,400

Gross Revenues (R$ M)

Dom.Pax

Int. PaxCargoOther

Strong growth 3Q06 compared with 3Q05

35%

Domestic passenger revenue growth 26%

RPK growth 28%

ASK growth 23%

International passenger revenue growth 60%

RPK growth 35%

ASK growth 32%

Cargo revenue growth 24%

Other revenue growth 97%

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

8

Total RASK increased 7.6% in 3Q06 compared with 3Q05...

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)

3Q05

20.6

21.2

71.4

31.2

14.9

77.6

19.3

8.7

2Q06

21.5

20.6

74.5

29.1

15.3

74.9

20.4

9.4

3Q06

22.2

21.4

75.1

30.1

18.2

79.6

22.8

10.5

3Q05 vs 3Q06

7.6%

1.1%

3.7 p.p.

-3.4%

21.6%

1.9 p.p.

18.6%

21.3%

2Q06 vs 3Q06

3.1%

3.9%

0.5 p.p.

3.4%

19.0%

4.7 p.p.

14.0%

11.7%

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

9

...while CASK remained practically stable, increasing 0.6%...

3Q05 Fuel ExchangeRate

Costreduction

3Q06

18.320.90

-0.74 -0.0518.43

10

15

20

25

Total CASK (BR GAAP - R$ cents) Results mainly due to Reduction of commercial costs Dilution of fixed costs (more

hours per aircraft)

Variation of 0.6%(-1.1% ex-fuel)

10

…increasing our spread (RASK – CASK)…

RASK

CASK

2002 2003 2004 2005 1T06 2T06 3T0615

20

25RASK/CASK (R$ Centavos)

EBITMargem

Spread

-7.1%

-0.3

-0.9%

0.8

6.5%

1.4

7.5%

1.5

11.9%

2.4

12.8%

2.8

16.8%

3.7

11

... Increasing our margins in BR GAAP...

3T05 3T06

351

569

0

200

400

600

EBITDAR (BR GAAP- R$ Milhões)

3T05 3T06

170

349

0

100

200

300

400

EBIT (BR GAAP- R$ Milhões)

22,8%11,0%

16,8%

Margin over Net Revenue

27,4%

3T05 3T06

93

213

0

30

60

90

120

150

180

210

Lucro Liq (BRGAAP - R$ Milhões)

10,2%

62%

6,1%

106%

128%

12

..and US GAAP...

3T05 3T06

354

548

0

200

400

600

EBITDAR (US GAAP- R$ Milhões)

3T05 3T06

227

382

0

100

200

300

400

EBIT (US GAAP- R$ Milhões)

23,0%

14,7%

18,4%

Margin over Net Revenue

26,4%

3T05 3T06

194

229

0

50

100

150

200

250

Lucro Liq (USGAAP - R$ Milhões)

11,0%

55%

12,6%

68%18%

13

The main difference between BR and US GAAP is the accounting treatment of aricraft leasing

BR GAAP Leasing Deprec and Amortization

IncomeTaxes

Others US GAAP

213

46

-33 -812 229

0

100

200

300

Net Profit Reconciliation to US GAAP

39 aircrafts are reclassified from operating to capital

leases, according SFAS no. 13

14

…resulting in a significant improvement in the EPS

3T05 3T06

0.65

1.41

EPS (BR GAAP) R$

3T05 3T06

1.351.52

EPS (US GAAP) R$

117%

13%

15

Solid balance sheet improvement

(Net Adjusted Debt = Financial Debt + Operational Leases – Cash)

2004 2005 1Q06 2Q06 3Q06

4,863

4,035 4,049 3,965 4,008

Net Adjusted Debt (R$ M)

100% 90% 87% 85% 84%

4,7x

3,5x

2,7x 2,4x 2,2x

Net Adjusted Debt / EBITDAR

2004 2005 1Q06 2Q06 3Q06

297

995

1,208

1,564

2,234Cash (R$ M)

Adj. Debt /Adj. Capt

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TAMM4

IBOVESPADOWJONES ADR

ADR TAM

10/3 29/90.6

0.8

1.0

1.2

1.4

1.6

1.8

Accumulated variation since March,10 2006

Since our second public share offer, our share has outperformed both the Ibovespa and Dow Jones

17

2006 continues stronger than expected

Average market share

Average load factor

Aircraft utilization per day (block hour)

CASK reduction yoy

New international flights

Guidance 2006 Acum. Sep06

Market demand growth (in RPK terms)

14.7%12% a 15%

47%45%

72.9%69.5%

12.51above 12

2.1%5%

• Daily to NY• Flight to London

• Since May• Start in October

TAM

Market

18

Our expectations to 2007 are also strong

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 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)

TAM

Guidance 2007

Market

19

In order to take advantage of the opportunity in the international, we have closed a deal with Boeing...

Firm contract for 4 B777-300ER + 4 options

Delivery for mid 2008

“Interim” contract for 3 MD-11sDelivery within the next 6 months

Choice for B777-300ER based on:More attractive cost per seat

Higher technological lifespan

Creation of a “mix” of aircraft size, allowing for more gradual capacity increase per destination

New credit line (EXIM)

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... And are therefore modifying our fleet plan

10

64

22

3

12

88

6

414

103

416

106

416

112

2006 2007 2008 2009 2010

96109

121 126 132

0

50

100

150

Total Fleet

F100A319/320A330MD11B777

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TAM: among the top airlines in the world

Fonte: relatórios das Companhias, em 31 de dezembro de 2005Nota: Números da EasyJet baseado nos últimos dados públicos de 2005

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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 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.