Good afternoon, and welcome to Gerdau's conference call for the presentation of their results related to the fourth quarter of 2012. [Operator Instructions] We would like to emphasize that any forward-looking statements the management makes during this conference call related to Gerdau's business outlook, projections and financial and operating goals are near assumptions based on management's expectations related to the future of the company. Even though Gerdau believes that its comments are based on reasonable assumptions, there is no guarantee that future events will not affect this evaluation. Here today are Mr. André Gerdau Johannpeter, Director, President and CEO of the company; and André Pires, Vice President and IR Director. Now I would like to give the floor to Mr. André Gerdau Johannpeter. You may proceed, sir. André Bier Gerdau Johannpeter: Thank you. Good afternoon to you all, and welcome to Gerdau's conference call on its latest results. As we always do, we would like to begin our analysis by giving you an overview of the steel market all over the world and then we will talk about Gerdau's performance during 2012 and the outlook for the regions where the company operates. Right after my presentation, André Pires will give you more details about Gerdau's financial performance, and right after that, we will be available to take your questions. I would like to take this moment to welcome André Pires, who will now replace Osvaldo Schirmer and he will join me in the presentation of our results in the next quarters. André Pires de Oliveira Dias: Well, I will start by talking about the world steel production at which 1.5 billion tons in 2012, which was up by 1.2% when compared to the year before. Excluding China, the world steel production went from 801.4 million tons, which was very much…

[Operator Instructions] Our first question comes from Rodolfo De Angele from JPMorgan. Rodolfo R. De Angele - JP Morgan Chase & Co, Research Division: My first question has to do with the CapEx reduction. Maybe you could talk about that. Which were the projects that you did not include the rationale behind that? How did you get to this reduction? And my second question is the following: I understand that you are painting a scenario of recovery in many different markets and I defend that is your expectation. And could you please, along the same lines of discipline, could you please mention what else you could do in terms of working capital and reduction of costs? I know that you have already done your homework. André Bier Gerdau Johannpeter: This is André Johannpeter. I would like to talk about CapEx and then André Pires will be talking about cash management. Let me try to go back. We had BRL 10.3 billion, and if you look at 2012, we have already invested BRL 3.1 billion of this BRL 10.3 billion. And for the next 4 years, we would have BRL 7.2 billion and we have a new year so this number went to BRL 8.5 billion. But in fact, this is a year in which there were major investments are made and when you make bigger investments such in the Açominas [indiscernible] these amounts tend to go up and in fact, the current BRL 8.5 billion is adapted to the next 5 years and adapted to our cash generation, our cash and cash availability. That's our investment capacity. So there is no focus and specific costs or some project or this or that. Our investment is BRL 8.5 billion for the next 5 years. And once again, it was BRL 3.2…

Our next question comes from [indiscernible] from Credit Suisse.

I would like to ask a question about demand. Could you talk about the demand outlook for 2013 for Brazil, U.S., including specialty steels, and maybe in the United States? Could we expect an improvement in terms of volumes for Q3 2013? This is the first question. André Pires de Oliveira Dias: This is André Pires. These are industries that operate with a different dynamic. When we talk about North America, the situation there is very disciplined when you look at the specialty steel market and the regular steel market. In specialty steel, in the fourth quarter, there was a lower drop in volume when you compare to the common steel volume as a whole. During my presentation, I said that there was a drop of 15% in the shipments of our operations in North America. In the U.S. when it comes to specialty steel, the decrease was up only 3%. So these are 2 different industries that operate based on a different business model, whereas in specialty steel, we operate [indiscernible] I mean, we have a long-term portfolio production and less volatility when there is a reduction or a downturn in the economic activity. And then when we look at specialty steels in North America, what we see is that this is an industry that is still very strong. We are still producing close to 90% of our capacity in North America. But now long common steel in North America, in the fourth quarter, we had a point out of the curve. There was a change in volume in the first month of the year, but it's difficult to say whether the problem will grow a lot in 2013. It's hard to determine this right now. Now talking about specialty steel in Brazil, we are already seeing some demand recovery after the drop in 2012 because of introduction of Euro 5. I would say that the third quarter in general, this year is not very different than the past first quarter, especially vis-à-vis long steel as a whole.

My second question is about mining and I would like you to tell us a little bit about the current status of the project and whether you could give us any guidance about CapEx, export volumes and a review for '13 and '14 and whether there is any port authority at Greenland to export all of this volumes. André Bier Gerdau Johannpeter: This is a André Johannpeter. About mining, until the middle of the year, we will complete our production reaching 11.5 million tons so this is a new production level. This capacity is being now utilized and the internal investment is BRL 838 million and this is what has been posted year-to-date in the mining areas. So for 2013, this is the expectation up to June. And in terms of export, we expect -- we hope to export 1 million to 1.5 million tons of iron ore to be produced in [indiscernible], which will produce about 7 million tons. So these are the numbers that we anticipate for 2013. For 2014, it's hard to tell. We do not have any forecast at the moment. It depends on when the equipment will be ready to produce in terms of logistics. We are still moving ahead with our project, and we are trying to look for other alternatives in the market to solve the issue of export this year and the next 2 years until we have our own port. So we are looking to see other alternatives in the market.

[Operator Instructions] Our next question comes from Carlos de Alba from Morgan Stanley.

I have 2 questions. The first one is on the North American business unit. Could you tell us a little bit about the competative situation there. You lost some market share, [indiscernible] the volumes in the fourth quarter did not decrease as much as the number controlled in the port. I'm talking only about the long steel operations against your competitors. So can you elaborate a little bit more of the competitive landscape that you are facing in North America? And also, we have seen some improvement in the construction markets in the U.S.. Can you tell us -- or do you have any positive benefits from these trends in your order book for 2013? And my second question is regarding the [indiscernible] in EBITDA. You had your facilities turned off in the last 2 quarters [indiscernible]. Is this a level that concerns you? Or what are your plans to bring this down in the next few quarters? André Bier Gerdau Johannpeter: Mr. Carlos, can you please repeat your second question?

Sure. The second question was regarding the net debt to EBITDA, which had increased from 2x in December 2011 to 2.9x in December of 2012. Is this a level that concerns management? And what are the plans to bring it down given though it seems to be reaching the upward limit of the range where I feel the company feels comfortable? André Bier Gerdau Johannpeter: About North America and the shipments of long steel that the fact we saw in the third quarter whether there was a lot of market share and the comparisons with some competitors to the question is more regarding volume and some specific factors and the outlook for the construction market in the U.S.. North America is strong. However, it was very much linked to the fiscal problem once again, of the United States and many of our clients and the market in general didn't buy or they waited to buy and there's a drop in volume. And there is market share, of course. And as volume is once again linked to the price of lead, which ultimately affected our results. We understand there should be a recovery in the first quarter and over the year. They're already talking about the -- with construction market and construction in general in the U.S.. We started to see some positive signs of new launch into residential construction, home building and nonresidential, specifically in some regions. It is stronger than in others. It is a slow but sure recovery. That is the outlook we work with for 2013. André Pires de Oliveira Dias: This is André Pires talking. The second question was about the increases of net debt to EBITDA ratio and what was the reason for this increase and what is our strategy and what is our concern vis-a-vis these indicators. More specifically about that, we have already given you some color about the figures and gross debt didn't grow as much, 7%, but of course, net debt ultimately went up more than that because of the drop in cash. And the drop was due mainly to capital -- working capital needs but also because of our CapEx. We had the CapEx within the year of 2012 around BRL 3.1 billion. And of course, the investment that generates higher amounts, they are about to be completed. And I'm referring to the coiled hot-rolled strips mill and also the measures that are being taken. We are reviewing our investment trends, as André mentioned, and we are working very strongly in the management of our working capital. And we estimate a reduction in our working capital needs for this year. And we have explained that these indicators should go back to levels closer to the ones that we saw in late 2011 by the end of 2013. This is our objective, and we will take all the necessary measures to get there.

Our next question comes from Mr. [indiscernible]

Can you talk about the concept in Brazil? And what is the possibility for the previous prices for long steel we've been seeing in Brazil and the impact that you expect of the exchange rate dynamics? And the second question had to do with current duty -- current imports. Which product on your side could be impacted by that? And what is your expectation? André Bier Gerdau Johannpeter: Referring to the price of flat products, I would rather not comment on any trends because it works according to the market, foreign market and domestic market. So we would rather not give you any estimate for our final product. In terms of export tariffs last year, there was mix set of issues. And in this space, we saw some products experienced an increase in their export tariffs and now we are submitting a new mix, and we are just waiting to see the outcome and maybe it will be published at the end of July, but we also have the look at other countries because there are other industries that are also part of that list. But we are sending to the government a list of our products, not only long but also flat.

Your next question comes from Renato Antunes.

My first question referred to the new coiled hot-rolled strips mills. Could you tell me a little bit about the marketing expectation on sales that you expect to have for this product. Maybe also you could tell me a little bit about cost and can you help us to model that? This is my first question. The second question is about North America. You talked about the dynamics out there for this market, and I just want to understand whether you have a target or any number that you would release in terms of EBITDA margin for 2013? André Bier Gerdau Johannpeter: I will talk about hot-rolled strips and André Pires will talk about North America. We are in the testing phase. It already started in December and the shipment will take place at the end of March and early April. We are working shipment that of 350,000 tons or even 400,000 tons this year and probably the shipments will be half to the domestic market and half to export. We'll have to double the capacity of the equipment around the year and by 2014, we will increase the value but it will also depend on the performance of rolling mill and the market outlook. But in terms of volume and production, this is what we anticipate. In terms of cost, we cannot anticipate any figures at the moment because the rolling mill is still being tested so it's too soon to tell you anything about cost. André Pires de Oliveira Dias: This is André Pires. Talking about North America, I think that even before we talk about this particular event in the U.S., the business model is very much dependent on the performance of the scrap price. So we work with the scrap surcharge concept. So the margin is related to the price of scrap and then you compensate your margins through this method. In 2012, just to put things into perspective, it was almost like a reverted mirror when you look back to 2011 and 2012. There was a lot of volatility in the price of scrap, and there was a significant drop in the price of scrap at the end of the summer and heading towards the second half of the year and that's why the performance was relatively positive with EBITDA margins reaching double digits. And the EBITDA margin at the end was deteriorated in the second half of 2012. At year end, we reached an average level with the utilization of our production capacity of about 70% to 73%. Now talking about long-term objectives, we do believe that once the volume returns, which we believe will happen in North America, this EBITDA margin double digits vary between 12%, 13% and 15% can be reached once we have our capacity level up to 80% to 85%. And that's why we work with a long-term prospective.

Our next question comes from [indiscernible] from JPMorgan.

I would like to ask you if your company discussed or met with the credit rating agencies and the company conference regarding recent credit metrics that you're presenting today. And also, I would like to know your position regarding the investment grade rating and if you are committed to these ratings in the coming future. André Bier Gerdau Johannpeter: Please repeat your question.

I'm sorry? André Bier Gerdau Johannpeter: Could you please repeat your question?

I would like to know if you met with the credit rating agencies recently and if they expressed any concerns regarding the evolution of the operation and the metrics you are presenting and then [indiscernible] with the position regarding the investment grade ratings, if you are committed to the investment grade or... André Bier Gerdau Johannpeter: The question was about our commitment with investment grade. And if we are concerned with the situation and what are the measures that we are taking in regards to that. It's a little bit of what I said before. Of course, investment grade is extremely important to us. It's one of our main objectives, to keep our investment grade and all the measures are being taken to...

Did you discuss with the rating agency or something? That position regarding... [Technical Difficulty]

How do you see the performance of these margins? Or the pressure on your margins or what is your estimate?

In March, we will start operation, and at the beginning, the volumes will still be very low in comparison to the expected demand in Brazil. I think we will deliver about 300,000 to 350,000 tons or maybe 400,000 tons. Half of it will be exported and the other half will be sold domestically. So maybe if we consider 350,000 an average, part of it will be used in this market, but I don't think this will not affect the overall market in Brazil. We already have our distribution quota [indiscernible] which they're already buying today. They will continue to buy. We'll be a part of it because we are also looking for other customers that want other companies supplying them in the market. So therefor why we believe that our entrance in this market will be gradual with exports into Mexico and in the future when we are producing more. And depending on how the market evolves, I don't think that we will be that big to the point that we could impact the market that heavily.

I just have a very quick question. What are the alternatives to iron ore? In view of that improved experience this year, do you believe that you will be looking to other possibilities again? André Bier Gerdau Johannpeter: Our focus now is to finish the investments up to July to increase our capacity to 11.5 million and then continue to invest. And I'm still talking about the exploration and continuing with logistics. We have our projects that are on course but we will also see other alternatives as they go into market to use for exports above our quota are available. So our focus right now is to complete this phase and look for the logistics solution and then make the investments to bring this to 18 million tons and afterwards to 24 million. This is our focus today and we have already ended the phase of looking for a partner. This is already over and now we are focusing on our investments. Of course, we are always open to dialogue to talk, but our focus right now is to complete this and start beginning to export -- start exporting the ore because the prices are better and this will bring about higher profitability to the business.

Our next question comes from Marcos Assumpção from Itaú BBA. Marcos Assumpção - Itaú Corretora de Valores S.A., Research Division: My first question has to do with the Brazilian operations. Could you break down the demand and the output for demand for the domestic market for 2013? In infrastructure and in the construction, what do you expect coming from these sectors? And how do you see profitability for each one of these sectors? Will they be similar between themselves or not? And the second question has to do with competition in the domestic market. In 2013, could you also talk about the outlook regarding the increase in exports and the decrease in imports that you expect and in 2014 anyway regarding market share because of the entry of new players in the market in 2014? André Pires de Oliveira Dias: Marcos, this is André Pires. About 2013 first, in the demand for -- from the specific sectors that we cater to in Brazil, we have been seeing some statistics in the market. And about civil construction, there is an expectation of growth of new launches of new real estate units and the estimate is 20% for 2013. So this is a figure that we saw and we take this into consideration and also the fact that in 2012, the basis was low because of the drop in that area. So of course, it depends on financing for these activities, but we believe that the civil construction sector should have a better performance in 2013 than it has in the previous year. And infrastructure, yes, our expectation is that these projects already underway will pick up and we will be seeing more initiatives [indiscernible], and as a consequence, we believe that we will see a better performance of the infrastructure sector this year than in 2012. In terms of profitability without getting into details, the average infrastructure projects bring about a better profitability than the civil construction projects. About imports in 2012, we saw 80%, 90% penetration of long steel and our expectation is that this should be reduced to '13, '14 and go down to 8% or 10% or 12%, which has been the average in the last few years. So this is what we foresee for the import of long steel. Regarding the entry of new players in the market, if new players do come to the market, of course, competition becomes tougher but we are prepared to cope with that. We have a good brand, we have good service, we have all our advanced parts and all our mills are scattered throughout the globe and in the U.S. as well. So we are very well positioned. And if more competitors come to the market, I think we are very well prepared. We have our traditions, our heritage and our name and I think this is very valuable to all our clients.

Our next question comes from Rodrigo Barros from Deutsche Bank.

I only have one question. This week, we've heard from economists very much concerned with the market in Brazil. Some of them even said that the country should increase interest rates in Brazil for more than 60 or 70 basis points because -- and even though this is not likely to happen. And the question is, do you believe that with an interest rate increase, this will affect the situation in Brazil? André Bier Gerdau Johannpeter: Very complicated question. It's very difficult for us to tell you precisely what would be the effect of an increase in interest rates. In the construction area or in other areas in the last few years, we saw the increase in credit availability not only in our case but in many other industries like automobile industry, [indiscernible], et cetera. So of course, if there is a significant increase in interest rates, there will be an impact though the interest rate increase is not very significant -- the impact will not be so severe. We do believe that there are many instruments that are available, and I'm sure that the Central Bank will take some necessary measures to cope with the situation that we're facing at the moment.

Now we conclude the Q&A session. I would like to give the floor to André Gerdau Johannpeter for his final remarks. Mr. Johannpeter, you have the floor. André Pires de Oliveira Dias: This is André Pires. I would like to thank you all for participating in this conference call, and I would like to take the opportunity to invite you all to our next conference call on May 7 when we will talk about the results for the first quarter of this year. Now with André Johannpeter, thank you very much for your interest in Gerdau. And if you still have any questions, our Investor Relations department will be available to clarify your doubts or answer other questions. Thank you very much and, I will see you again on May 7. Thank you.

Gerdau's conference call is now concluded. We would like to thank you all for participating and I wish you a very good afternoon.