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090331   Webconference Ingles   4 T08   Sem Script
090331   Webconference Ingles   4 T08   Sem Script
090331   Webconference Ingles   4 T08   Sem Script
090331   Webconference Ingles   4 T08   Sem Script
090331   Webconference Ingles   4 T08   Sem Script
090331   Webconference Ingles   4 T08   Sem Script
090331   Webconference Ingles   4 T08   Sem Script
090331   Webconference Ingles   4 T08   Sem Script
090331   Webconference Ingles   4 T08   Sem Script
090331   Webconference Ingles   4 T08   Sem Script
090331   Webconference Ingles   4 T08   Sem Script
090331   Webconference Ingles   4 T08   Sem Script
090331   Webconference Ingles   4 T08   Sem Script
090331   Webconference Ingles   4 T08   Sem Script
090331   Webconference Ingles   4 T08   Sem Script
090331   Webconference Ingles   4 T08   Sem Script
090331   Webconference Ingles   4 T08   Sem Script
090331   Webconference Ingles   4 T08   Sem Script
090331   Webconference Ingles   4 T08   Sem Script
090331   Webconference Ingles   4 T08   Sem Script
090331   Webconference Ingles   4 T08   Sem Script
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090331 Webconference Ingles 4 T08 Sem Script

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  • 1. São Paulo, March 31, 2009 4Q08 Results Presentation
  • 2. Information and Projection <ul><li>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. </li></ul><ul><li>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. </li></ul><ul><li>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. </li></ul>
  • 3. 4Q08 Highlights (1/2) <ul><li>Improvement in the operating results </li></ul><ul><li>Leadership maintenance </li></ul><ul><ul><li>50.7% domestic market share (2.5 p.p. higher than 4Q07) </li></ul></ul><ul><ul><li>84.7% international market share, among Brazilian companies (19.3 p.p. higher than 4Q07) </li></ul></ul><ul><li>Operational efficiency </li></ul><ul><ul><li>12.2 block hours per aircraft per day (-1% versus 4Q07) </li></ul></ul><ul><ul><li>13.2 block hours per aircraft per day, considering only the operating fleet (-0,5% versus 4Q07) </li></ul></ul><ul><ul><li>Average load factor of 68.3% (-2.7 p.p. versus 4Q07) </li></ul></ul>Margin over net revenue 67% 14% 18% 263% 4% 11% US GAAP non audited
  • 4. 4Q08 Highlights (2/2) <ul><li>Continuous strengthening of our network </li></ul><ul><ul><li>Delivery of 3 A319 and 4 A320 (versus 3Q08) </li></ul></ul><ul><ul><li>Delivery of 3 A330 and 3 Boeing 777-300ER (versus 3Q08) </li></ul></ul><ul><ul><li>Beginning of non stop flights to: </li></ul></ul><ul><ul><ul><li>New York, via Rio de Janeiro (November 1 st ) </li></ul></ul></ul><ul><ul><ul><li>Orlando, via São Paulo (November 21) </li></ul></ul></ul><ul><li>Share buyback program </li></ul><ul><ul><li>601,900 shares bought back </li></ul></ul><ul><li>Agreements </li></ul><ul><ul><li>Star Alliance entry announcement </li></ul></ul><ul><ul><li>Beginning of code-share operations with Air Canada </li></ul></ul><ul><li>MRO </li></ul><ul><ul><li>New EASA certification, allowing us to perform all major scheduled maintenance activities (C and D checkups) in Airbus A321 and A330 aircraft </li></ul></ul><ul><li>New Investor Relations Website – improvement in search tools www.tam.com.br/ir </li></ul>
  • 5. Our gross revenue increased 29%... <ul><li>Domestic passenger revenue grew 21% </li></ul><ul><ul><li>RPK increased 6% </li></ul></ul><ul><ul><li>ASK increased 16% </li></ul></ul><ul><li>International passenger revenue grew 48% </li></ul><ul><ul><li>RPK increased 27% </li></ul></ul><ul><ul><li>ASK increased 24% </li></ul></ul><ul><li>Cargo revenue grew 24% </li></ul><ul><li>Other revenue grew 35% </li></ul>29% Domestic Pax International Pax Cargo Other US GAAP non audited
  • 6. ...and total RASK increased 8%... <ul><li>RASK Total ¹ ² </li></ul><ul><li>RASK scheduled domestic² </li></ul><ul><ul><li>Domestic load factor - % </li></ul></ul><ul><ul><li>Yield scheduled domestic³ </li></ul></ul><ul><li>RASK scheduled international² </li></ul><ul><ul><li>International load factor - % </li></ul></ul><ul><ul><li>Yield scheduled international³ </li></ul></ul><ul><ul><li>Yield scheduled international³ (USD cents) </li></ul></ul>4Q 07 1 7.82 1 6.69 70.4 2 4.90 1 1.26 71.0 1 5.88 8.97 3Q 08 19.97 18.24 66.5 28.81 14.82 79.9 18.57 10.48 4Q 08 19.21 16.97 6 4.5 2 7.65 1 4.59 7 2.7 20.10 8.59 4Q 08 vs 4Q 07 7.8 1 .7 -5.9 p.p. 11.0 29.6 1.7 p.p. 26.6 -4.2 4Q08 vs 3Q08 -3.8 -7.0 - 2 , 0 p.p. -4.0 -1.6 -7.2 p.p. 8.1 -18.1 <ul><ul><li>RASK scheduled international² (USD cents) </li></ul></ul>6 .36 8.37 6.24 - 1 .8 -25.4 1 Includes charter, cargo and Other revenues, net of taxes 2 Net of taxes 3 Gross of taxes US GAAP non audited R$ Cents
  • 7. ...and the CASK reduced 0.3%, increasing the spread <ul><li>RASK </li></ul><ul><li>(R$ Cents) </li></ul><ul><li>CASK </li></ul><ul><li>(R$ Cents) </li></ul><ul><li>CASK ex- fuel </li></ul><ul><li>(R$ Cents) </li></ul><ul><li>Spread </li></ul><ul><li>(RASK - CASK) </li></ul>4 Q 07 17 . 8 2 17 . 1 1 11 .88 0 . 7 0 4 Q 08 19 . 2 1 17 .06 10 . 5 4 2 .15 4 Q 08 vs 4 Q 07 7 . 8% -0 . 3% -11 . 3% 205 . 5% US GAAP non audited
  • 8. The financial result was impacted by non cash items Financial income Interest income from financial investments Exchange variation Financial instrument/gains – FX Financial instrument/gains – WTI* Other Financial expense Interest expense from financial investments Interest expense Exchange variation Financial instrument/loss – FX Financial instrument/loss – WTI* <ul><ul><li>Realized </li></ul></ul><ul><ul><li>Unrealized </li></ul></ul>Other Financial result, net 4Q07 45 261 (3) 34 45 381 - (91) (240) 9 (3) - (9) (335) 46 4Q08 44 128 1 (0) 14 187 (140) (117) (815) (1) (145) (919) (12) (2,148) (1,962) MTM from the WTI hedge instruments FX variation impact on financial leases *WTI West Texas Intermediate R$ Million US GAAP non audited
  • 9. Our 4Q operating results were the strongest in the year Margin over net revenue 67% 14% 18% 263% 4% 11% -38% 5% US GAAP non audited
  • 10. The FX rate impacted our balance sheet, but our cash position remains solid * Aircraft and flight equipment leases of the last twelve months x 7 US GAAP non audited R$ Million
  • 11. In 2008 we delivered our guidance, apart from the CASK, impacted by FX 2008 Guidance TAM Market Realized 2008 7.4% 50.3% dom 75.2% int 14,2% 30,6% 71,0% -4,8% <ul><li>Brasília – Buenos Aires </li></ul><ul><li>Rio de Janeiro – Miami </li></ul><ul><li>São Paulo – Lima </li></ul><ul><li>Rio de Janeiro – NY </li></ul><ul><li>São Paulo – Orlando </li></ul>* According to the old Brazilian accounting law (6.404) - effective at the guidance release moment <ul><li>Maintain leadership in both domestic and international markets </li></ul><ul><li>ASK growth of </li></ul><ul><ul><li>Domestic 14% </li></ul></ul><ul><ul><li>International 40% </li></ul></ul><ul><li>Average load factor at approximately 70% overall </li></ul><ul><li>Reduction of 7% in total CASK ex-fuel in BR GAAP* yoy </li></ul><ul><li>Three additional international destinations or frequencies in 2008 </li></ul><ul><li>Domestic market demand growth from 8% to 12% (in RPK terms) </li></ul>
  • 12. The new Brazilian accounting rules affect our results *Excluding non cash items from the financial result Net revenues Operating costs and expenses Operating result Financial income (expense) Income tax and social contribution and Minority interest Net income (loss) <ul><ul><li>Net income (loss) margin </li></ul></ul>EBITDAR <ul><ul><li>EBITDAR margin </li></ul></ul>EBIT <ul><ul><li>EBIT margin </li></ul></ul>EPS EPS Adjusted* BR GAAP 11.638 10,592 (9,867) 725 (2,670) 585 (1,360) -12.8% 1,633 15.4% 725 6.8% (9.03) 1.13 BR GAAP 6.404 10,592 (10,137) 455 (1,521) 292 (773) -7.3% 1,504 14.2% 455 4.3% (5.13) 0.50 US GAAP 10,548 (9,859) 689 (2,609) 584 (1,336) -12.7% 1,471 13.9% 689 6.5% (8.88) 0.97 2008 R$ Million
  • 13. We revisited our 2009 guidance, due to the new macroeconomic outlook Previous 2009 Guidance TAM Market Realized Jan – Feb 2009 <ul><li>Domestic market demand growth (RPK) </li></ul><ul><li>Maintain leadership in both markets: </li></ul><ul><ul><li>Domestic market share </li></ul></ul><ul><ul><li>International market share </li></ul></ul><ul><li>ASK growth: </li></ul><ul><ul><li>Domestic </li></ul></ul><ul><ul><li>International </li></ul></ul><ul><li>Average overall load factor at approximately: </li></ul><ul><li>Additional international destinations or frequencies in 2009 </li></ul>2009 Guidance <ul><li>1% - 5% </li></ul><ul><li>8% </li></ul><ul><li>20% </li></ul><ul><li>67% </li></ul><ul><li>1 </li></ul><ul><li>5% - 9% </li></ul><ul><li>8% </li></ul><ul><li>20% </li></ul><ul><li>70% </li></ul><ul><li>1 </li></ul>5.1% 49,6% 84,8% 14.0% 17.9% 69.9% - - -
  • 14. In order to preserve cash in this scenario, we renegotiated our hedge positions <ul><li>Purpose </li></ul><ul><ul><li>Defer the cash burn, which was concentrated in the first half of 2009 </li></ul></ul><ul><ul><li>Liquidate most of our contracts in a period with expectation to have lower volatility and strike prices closer to our operations </li></ul></ul>Cash burn reduction of: - roughly USD 48  million in 1Q09 - Approximately USD 130 million in 2009 (assuming WTI of USD40/bbl)
  • 15. We extended our hedge positions until 1Q11 1 Q 09 2 Q 09 3 Q 09 4 Q 09 Total 2009 1 Q 10 2 Q 10 3 Q 10 4 Q 10 Total 2010 1 Q 11 Volume (Thousand barrels) 1 , 927 1 , 245 1 , 145 830 5 , 146 890 955 865 720 3 , 429 145 Average Strike (USD/bbl) 107 113 110 109 109 114 115 114 113 114 107 Projected Consumption Covered 52% 33% 30% 22% 34% 23% 25% 22% 19% 22% 4%
  • 16. In our scenarios, we will pay less for fuel in 2009, than in 2008… <ul><li>Sensibility assuming our coverage of 34% of the estimated consumption for 2009 and the following scenarios for WTI price: 30; 45 and 60 USD/bbl </li></ul>WTI Average “ WTI Equivalent TAM” “ WTI Equivalent TAM” is the amount that we would pay if we included the hedge value within the WTI price *WTI Equivalent calculated assuming the purchase of 34% of our volume at strike price and 66% at market price.
  • 17. … which can be verified in the 1Q09 WTI Average* “ WTI Equivalent TAM” * With one month delay, to reflect the fuel purchase moment ** January and February
  • 18. We are prepared to face a more difficult macroeconomic scenario Dedicated Team <ul><li>Team compromised with costs and “Commitment to Serve” </li></ul><ul><li>Business units (Loyalty, MRO and Cargo) with improved teams </li></ul><ul><li>No need to raise capital </li></ul><ul><ul><li>Pre committed leasing, PDP*s already financed </li></ul></ul><ul><ul><li>Balanced working capital </li></ul></ul><ul><ul><li>No debt due (first debentures installment in 2010 – R$167 million) </li></ul></ul><ul><li>Reduction in CAPEX not related to the fleet </li></ul><ul><li>Cost reduction </li></ul><ul><li>Hedge renegotiation </li></ul><ul><li>Services improvement effort recognized: NPS** 26 in 2009 and -4 in 2007 </li></ul><ul><li>Efficient operation during high season </li></ul><ul><li>Marginal aircraft capacity growth </li></ul><ul><li>Flown hours reduction to adequate to the new economic scenario </li></ul>Financial Needs Cash Control Better Service Controlled Growth * Pre delivery payments ** Net Promoter Score
  • 19. In 2009 we will have a net addition of only 3 aircraft B767 Airbus wide-body Airbus narrow-body B777 Average fleet age of 5.5 years by the end of 2008 Aircraft to be received in 2009 already have pre committed financing Standardization of narrow body fleet: A320 family *Considering two wide body aircraft to be incorporated into the operational fleet in January 2009 (1 B777 and 1 A330)
  • 20. We signed a commitment To be the preferred airline company Excellence in Technical-Operational Excellence in Service Excellence in Management PASSION FOR AVIATION
  • 21. February 19, 2008

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