Santander

-

13th

Annual Latin America Conference

Cancun, January, 2009

2

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.

3

PreviousPeriod

CurrentPeriod

J FMAM J J ASOND J FMAMJ J ASOND J FMAM J J A SOND J FMAM J J A SOND90

95

100

105

110

115

120

125

130

Domestic Market - Variation(vs previous period)

The domestic market grew 7% from January to November 2008

Source: ANAC

20072005 2006 200819% market growth 12% market growth 12% market growth 7% market growth

4

PreviousPeriod

MarketTAM

J FMAMJ J A SOND J FMAMJ J ASOND J FMAM J J A SOND J FMAMJ J ASOND40

60

80

100

120

140

160

180

200

International Market - Variation(vs previous period)

The international market (among Brazilian carriers) is recovering and grew 26% …

Source: ANAC

40% TAM’s growth 41% TAM’s growth 71% TAM’s growth 40% TAM’s growth

20072005 2006 20087% market growth 30% market decrease 5% market decrease 26% market growth

5

…with higher growth anticipated for Brazilian carriers due to the unbalance in the bilateral agreements…

Source: ANAC annual report

* estimates

57.4%

42.6%

58.2%

41.8%

57.7%

42.3%

66.9%

33.1%

71.2%

28.8%

66.5%

33.5%

2003 2004 2005 2006 2007 Jan-Nov2008*

7.78.9

9.9 10.211.4 10.9

0

3

5

8

10

13

International passenger - Million

BrazilianCarriers

IntlCarriers

CAGR 2003 – 200710%

CAGR 2003 – 200710%

6

…observed in many countries, as the example between Brazil and USA

97

107

127

2821

297

12453

Italy

England

Germany

France

Spain

USA

1414

1414

2121

3030

5151

126*126*

150 100 50 0 50 100 150

Weekly Frequencies

* In July 2008 there was an addition of 21 frequencies limited to the cities in the north, northeast and central west regions of Brazil and/or Belo Horizonte

Brazilian Carriers Foreign Carriers

Available space on bilateral Operated by Brazilian Carriers Operated by Foreign Carriers

7

We are both domestic and international market leaders

TAM’s Domestic Market Share*TAM’s Domestic Market Share*

Source: ANAC

* RPK – Revenue passenger kilometer

TAM’s International Market Share* – Among Brazilian carriersTAM’s International Market Share* – Among Brazilian carriers

33,0%35,8%

48,0% 48,9% 50,4% 52,4% 51,7%

43,5%

2003 2004 2005 2006 2007 Jan - Nov 2008 3Q08 nov/08

12,0% 14,3%

37,5%

67,5%74,3% 75,8%

84,7%

18,8%

2003 2004 2005 2006 2007 Jan - Nov 2008 3Q08 nov/08

8

Star Alliance

On October 7, we announced our entry into the Star Alliance

Star Alliance is the largest global alliance and today is composed by 22 airline companies from all over the world

After the integration period, our passengers will have a better experience and several benefits as:

1,000 destinations in 170 countries

20 thousand daily frequencies

Luggage to final destination

Faster and easier connections

More than 800 VIP lounges

Possibility of accumulate and redeem points or miles in different loyalty programs

9

178200

554

1,214

263

260

813

1,670

3Q07 3Q08

2,146

3,006

0

500

1,000

1,500

2,000

2,500

3,000

3,500

Gross Revenue (R$ M) Domestic passenger revenue grew 38%

RPK increased 17%

ASK increased 17%

International passenger revenue grew 47%

RPK increased 38%

ASK increased 23%

Cargo revenue grew 30%

Other revenue grew 48%

Our gross revenue increased 40%...

Domestic Pax International Pax Cargo Other

40%

10

...and total RASK increased 18%...

RASK total ¹ ²

RASK scheduled domestic²

Domestic load factor - %

Yield scheduled domestic³

RASK scheduled international²

International load factor - %

Yield scheduled international³

Yield scheduled international³(USD cents)

3Q073Q07 2Q082Q08 3Q083Q08 3Q08 vs 3Q07

3Q08 vs 3Q07

3Q08 vs 2Q08

3Q08 vs 2Q08

R$ Cents

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

RASK scheduled international² (USD cents)

17.01

15.43

66.3

24.42

12.52

70.8

17.69

9.62

18.40

17.66

68.1

27.23

11.48

73.4

15.64

9.82

20.07

18.24

66.5

28.81

14.85

79.9

18.60

9.72

18.0

18.2

0.1

p.p.

18.0

18.6

9.1

p.p.

5.1

1.0

9.1

3.3

-1.6

p.p.

5.8

29.4

6.5 p.p.

18.9

-1.1

6.81 7.21 7.76 13.9 7.6

11

...and the total CASK increased 14%...

CASK

CASK excl-fuel

3Q07 3Q08

16.54

18.91

0

5

10

15

20

Total CASKBR GAAP - R$ cents

3Q08 vs 3Q07

1.2%

14.3%

12

...leading to an increase in spread (RASK-CASK)

3Q07 3Q08

17.0116.54

20.08

18.91

15

17

19

21

RASK/CASK (R$ Cents)BR GAAP

RASKCASK

EBITMargin

Spread

2.8%

0.47

5.8%

1.18

13

However, we presented losses in our financial result

*WTI West Texas Intermediate

09.30.2008 09.30.2007

Financial incomeInterest income from financial investments 48.050 65.261Exchange variation 482.358 122.327Financial instrument/gains – FX 75 42.557Financial instrument/gains – WTI*

Realized 24.672Unrealized 28.219

Other 4.818 1.310535.301 284.346

Financial expensesExchange variation -428.884 -146.559Interest expense -111.115 -61.837Financial instrument/losses – FX -1.923 -38.612Financial instrument losses – WTI*

Realized -18.840Unrealized -268.267

Other -7.775 -9.410-836.804 -256.418

Financial result, net -301.503 27.928

Mainly impacted by unrealized

losses in WTI hedging

14

All instruments contracted over-the-counter

No deposits of guarantees or margin calls

Counterparties rated as “low credit risk” by the major rating agencies (Standard & Poors, Fitch, and Moody’s)

Our WTI derivative transactions are contracted only for hedging purposes to protect operations...

20082008 20092009 20102010Notional(thousand of barrels)Fair Value (MTM)

2,180 7,200 800

(21,941) (170,276) (17,118)

1Q081Q08 2Q082Q08 3Q083Q08

Volume of contracted transactions (thousand of barrel)

WTI end of period (USD/barrel)

% consumption of the twelve ensuing months

5,390

102

41%

4,390

140

31%

10,180

101

56%

Current SituationCurrent Situation

15

…following our policy and corporate governance

Our policy is to hedge from 30% - 80% of the projected fuel consumption in a minimum of 3 and a maximum of 24 months, approved and monitored monthly by board audit and financial committee

Fuel HedgingFuel Hedging

Risk CommitteeRisk Committee

We are committed to the highest standards of corporate governance and concerned with ensuring a high control standard of our processes

Composition: eight executives of the Company from different areasResponsibility: to make Management comfortable to regularly evaluate scenarios, hedge operations adopted and suggest any necessary adjustmentsActivities: to validate policies, approving processes and activities to manage risks involving liquidity, credit, legal, fiscal and operations

specialized in measuring risks and suggesting protection alternatives objectives

to make Management comfortable by creating “risk committees” to permanently evaluate scenarios, confirm the effectiveness of the hedge operations adopted and suggest any necessary adjustments

quality assurance on MTM evaluations

Risk Office (third part)Risk Office (third part)

16

In BR GAAP our operating margin was 6%...

BR GAAP

3T07 3T08

49

-113-120-90-60-30

03060

Net income - R$ M

3T07 3T08

313

423

0

100

200

300

400

500EBITDAR - R$ M

35%

15% 15%

3T07 3T08

57

167

0

50

100

150

200EBIT - R$ M

192%

3%

6%

2%

- 4%

US GAAP

3Q07 3Q08

306

390

0

100

200

300

400EBITDAR - R$ M

28%

3Q07 3Q08

112

186

0

50

100

150

200EBIT - R$ M

66%

3Q07 3Q08

143

-475-550-450-350-250-150-5050

150Net Income - R$ M

15% 14% 5%

6%7%

- 16%

Margin over net revenue

17

BR GAAP Leasing IncomeTaxes

Others US GAAP

-113

-535

184-11 -475

-800

-600

-400

-200

0

Net Profit Reconciliation to US GAAP

52 aircrafts are reclassified as capital leases as per SFAS nº 13 52 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

18

Our balance sheet remains solid…

R$ million - BRGAAP 2008* 2007 2006 2005 2004

Cash (1) 2.105 2.607 2.453 995 297

Short-Term Debt (2) 836 1.005 363 216 204

Long-Term Debt (3) 1.752 1.345 895 425 399

Total Debt (A) = (2) + (3) 2.588 2.350 1.258 641 603

Shareholder's Equity (4) 1.420 1.527 1.449 760 191

Capitalization (B) = (3 + 4) 3.173 2.872 2.344 1.185 590

Aircraft and flight equipment leases** (5) 6.140 5.976 5.032 4.389 4.557

Total Debt Adjusted (C) = (A + 5) 8.729 8.326 6.290 5.030 5.160

Total Capitalization Adjusted (D) = (3 + 4 + 5) 9.313 8.848 7.376 5.574 5.147

Debt / Capitalization (A / B) 82% 82% 54% 54% 102%

Adjusted Debt / Adjusted Capitalization (C / D) 94% 94% 85% 90% 100%

Adjusted Net Debt / Adjusted Capitalization (C - 1) / (D) 71% 65% 52% 72% 94%

* LTM

** Aircraft and flight equipment leases of the last twelve months x 7

19

…with no major exposure to foreign currency…

Current41%

Long term - 6%

Current24%

Long term10%

Permanent assets19%

Current21%

Long term23%

Current19%

Long term17%

Shareholders' equity20%

Assets Liabilities

R$ 7.1billion R$ 7.1billion

0

20

40

60

80

100%

Balance sheet mix

Permanent assets

Shareholders’ equity

Local currencydenominated

Foreign currencydenominated

BR GAAP

20

…and no leverage in the short term

Breakdown and maturity of financial debt

From the R$ 663 million of our short term loans, 92% are in foreign currency and correspond to pre delivery payments financing due 4Q08 – to be repaid with pre-committed US Ex-Im Bank financing

BR GAAP

Year Loans Lease payable Reorganization of Fokker 100 fleet Debentures Bonds Total % Total

2008 663.276 128.557 14.842 10.825 18.236 835.736 32%2009 30.837 17.081 3.711 0 0 51.629 2%2010 59.717 37.522 16.824 166.667 0 280.730 11%2011 160.247 37.232 12.189 166.667 0 376.335 15%2012 4.755 35.783 0 166.667 0 207.205 8%After 2012 9.203 253.014 0 0 574.290 836.507 32%

928.035 509.189 47.566 510.825 592.526 2.588.141 100%Foreign currency - denominated 837.411 509.189 47.566 0 592.526 1.986.692 77%Local currency - denominated 90.624 0 0 510.825 0 601.449 23%

R$ thousand09.30.2008

21

We intend to achieve a neutral hedging position due to the growth in our international business

31%

69%

35%

65%

2Q08 3Q080

20

40

60

80

100%

Revenue(Passenger + Cargo)

Dollarexchangerate

DomesticInternational

1.592

62%38%

1.914

62%38%

Approximately 50% of our costs

(including fuel) are exposed to foreign

currencies

Approximately 50% of our costs

(including fuel) are exposed to foreign

currencies

20%

ASK proportion

International(Dollar denominated)Domestic(Real denominated)

22

High concentration of passengers in 11 airports

Source: ANAC

Important barrier to entry for newcomers

Limited ability for other competitors to grow

11 main airports in Brazil carry 72% of all passenger traffic

TAM has in aggregate ~40% of all slots available in these airports

% TAM slots

43%

34%

39%

32%

44%

42%

27%

26%

40%

32%

46% Fortaleza

Rio de Janeiro4

Recife

Curitiba

Porto Alegre

Belo Horizonte

Salvador

Rio de Janeiro³

Brasília

São Paulo²

São Paulo¹

% Total Domestic Passengers Boarded

0% 5% 10% 15% 20%

20062007

1 Congonhas2 Guarulhos3 Galeão4 Santos Dumont

23

Brazilian domestic market is composed mainly by business passengers

Leis

ure

Busi

nes

s

2000 2001 2002 2003 2004 2005 2006 2007

17.9

26.6 27.025.2

28.2

35.4

39.7

44.4

0

10

20

30

40

50

Domestic Market Passenger Mix (RPK M)

CAGR

11%

22%

* TAM Estimates

24

Opportunity for low fare passengers on off-peak flights

0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 2355

60

65

70

75%

Load Factor per hour

3Q083Q07

Off Peak Peak Off Peak Peak Off Peak

25

We are expanding our fare bundle strategy for the domestic market...

Addition of extra features in the segmented bundles

Ability to “sell up”categories

Potential for further revenue increase

Harmonization of the fare bundle strategy to TAM Fidelidade growth

26

...increasing capillarity of sales through our new methods of payments Launched new methods of payment in May 2007

Payment at lottery storesApproximately 9,000 stores in Brazil

Already functioning as bank correspondent

Billing slipsAutomatic debit Financing for passengers via direct consumer credit with the main retail banks

Focus on leisure/lower income segments

27

2008 Guidance2008 Guidance

2008 was impacted by external factors

Jan - Dec 2008Jan - Dec 2008

7.4%

50.3% dom75.2% intl

14.2%30.6%

71.1%

-2.2%*

Brasília – Buenos AiresRio de Janeiro – MiamiSão Paulo – LimaRio de Janeiro – NYSão Paulo – Orlando

Maintain leadership in both domestic and international markets

ASK growth of

Domestic 14%

International 40%

Average load factor at approximately 70% overall

Reduction of 7% in total CASK ex-fuel in BR GAAP yoy

Three additional international destinations or frequencies in 2008

Domestic market demand growth from 8% to 12% (in RPK terms)

TAMTAM

MarketMarket

*January - September

28

2009 will be a challenging year

Maintain leadership in both domestic and international markets

ASK growth of

Domestic 8%

International 20%

Average load factor at approximately 70% overall

One additional international destination or frequency in 2009

Domestic market demand growth from 5% to 9% (in RPK terms)

Guidance 2009Guidance 2009

MarketMarket

TAMTAM

29

43

18

104

43

18

107

43

20

110

43

22

113

83

22

115

83

22

117

2008 2009 2010 2011 2012 2013

129* 132137 142

148 150

Total fleet

Fleet plan

B767 Airbus wide-body Airbus narrow-bodyB777

In 2013 we will receive the first 2 A350s, which

will gradually substitute the A330s

In 2013 we will receive the first 2 A350s, which

will gradually substitute the A330s

*Considering two wide body aircraft to be incorporated into the operational fleet in January 2009 (1 B777 and 1 A330)

30

The economy downturn is a fact, however, understanding the bounce back is key

Rapid market recovery in 2010

Rapid market recovery in 2010

Market recovery in 2011

Market recovery in 2011

Adjustment of operations in flown hours and micromanagement of non operating activities

Maintaining fleet might jeopardize cash

ILLUSTRATIVE

?

Longer term recoveryLonger term recovery Mandatory fleet alteration

31

On our side, we are acting to prepare TAM for any turbulence

Act in the balance sheetIncrease / Preserve liquidity

Postpone / reduce investments

Focus in the P&L defending liquidity

Initiatives impacting cash

Initiatives impacting cash

Initiatives impacting cost

Initiatives impacting cost

32

MeaningMeaning

1) Cross management

“Spending Matrix”

2) Focus on spending development

Spending managed by more than one person (Entities and packages)

3) Systematic monitoring Effort directed based on spending detailed management: • deviation cause analysis

• action plan to eliminate deviations

Spending detailed until realization level

Sharing accountability is the main principle of the initiatives…

PrinciplePrinciple

33

... which have been identified and detailed at each directory

Finance & ITFinance & IT

Commercial & Planning

Commercial & Planning

OperationsOperations

TechnicalTechnical

Knowledge & People

Knowledge & People

MROMRO

Reviewing need/scope of IT projectsTreasury total focus on liquidity

Distribution costsControl non-operating international costs

Efficiency gainsCrew overnight scheme evaluation

Strategic sourcingRenegotiation with third parties

Conscious hiringReexamining benefits

Reduction of downtime per aircraftFinancing any required investment

Main priority to executives

during uncertainty:

regular meetings 2x/week

Main priority to executives

during uncertainty:

regular meetings 2x/week

NON EXHAUSTIVE