Good morning, ladies and gentlemen. At this time, we would like to welcome everyone to CSN's Fourth Quarter and Year End 2014 Earnings Conference Call. Today we have with us the Company's executive officers. We would like to inform you that this event is being recorded and all participants will be in listen-only mode during the Company's presentation. After the Company's remarks are over, there will be a question-and-answer session. At that time, further instructions will be given. [Operator Instructions] We have simultaneous webcast that may be accessed through CSN's Investor Relations website at www.csn.com.pr/ir. The slide presentation may be downloaded from this Web site. Please feel free to flip through the slides during the conference call. There will be a replay service for this call on the website. Before proceeding, let me mention that forward-looking statements are being made under the Safe Harbor of the Securities Litigation Reform Act of 1996. Forward-looking statements are based on the beliefs and assumptions of CSN management and on information currently available to the company. They involve risks, uncertainties, and assumptions because they relate to future events and therefore, depend on circumstances that may or may not occur in the future. Investors should understand that general economic conditions, industry conditions, and other operating factors could also affect the future results of CSN and could cause results to differ materially from those expressed in such forward-looking statements. Now I'll turn the conference over to Mr. David Salama, CSN's Executive Investor Relations Officer, who will present the company's operating and financial highlights for the period. Mr. Salama, you have the floor.

Good morning to everyone, thank you for participating in CSN's conference call. With me we have directors of the company and I'd also like to take advantage of this opportunity to welcome our new director, the directors that strengthen our team I'd like to talk about Paulo Rogerio Caffarelli, the Corporate Executive Director and also Ciro Gomes as President, Director of Transnordestina. We have Pedro Brito; that is our new Port Director. So we will start on slide number 3 where we present the consolidated results of the fourth quarter of the year 2014. In the fourth quarter the net revenue of BRL3.8 million presented a drop of 2% vis-à-vis the third quarter of 2014 mainly due to the lower revenue in the mining segment. In 2014 the consolidated net revenue was up to 16.1 billion, 7% lower to what was registered in 2013 due to lower revenues in the mining and steel segment. The gross profit of 921 million in the fourth quarter was 5% lower than the third quarter of 2014. In the year of 2014 it was BRL4.5 million, 7% lower than 2013 mainly due to the lower result in the mining segment partially offset by greater gross profit in steel. In the fourth quarter the company registered a net profit of 67 million, reverting a loss of 250 million verified in the third quarter last year mainly due to greater gross profit and lower financial result. In the accumulated of the year we have a consolidated of 112 million -- consolidated net loss, the EBITDA adjusted of the fourth quarter was BRL1 billion, a growth of 3% vis-à-vis the third quarter 2014 mainly due to the contribution of the steel segment, now the EBITDA margin adjusted 25% very important and increased 2 percentage points vis-à-vis what…

Thank you very much David good morning to everyone, I am highly satisfied to present to you the excellent results there we attained in our resources and reserve certification. In 2012 we initiated a project to review the geological model of Casa de Pedra, Engenho to update the last certification that was in 2007. Throughout the year of 2012 and 2014 we carried out a number of adaptations to international standards, so that we could present here, years of geological work and the result of the campaign in Casa de Pedra to be certified. So when we created a geological model we counted with the contribution of international companies that work together with CSN. On slide 14, we present in summery wise the role of each one of these companies here we have the participation of SRK Consulting in Brazil that supported CSN in the preparation of the estimates. As you know the one in Denver also they give technical support from the partners of Namisa, because we were integrating the assets in Namisa and Casa de Pedra and so the auditor company hired by CSN for certification. On slide 15, in a summarized way you can see the review process of the geological model. Here we have a drilling campaign. We had 107,000 meters of drilling and 40,000 were in the review, everything is new. I believe this is one the greatest drilling campaigns carried out in Brazil in the past five years. Now this has started here if you can see on 15, here we did the geological mapping. Now we have the sample of the drills, we do physical and chemical analysis and the drilling is done in such a way that we can create sections the vertical sections as they appear here, they're combined with Slide…

Thank you very much and we will initiate our Q&A session for investors and analyst. [Operator Instructions] The first question from Thiago Lofiego from Merrill Lynch.

I have two questions. One would be the cost performance in mining. if you could break down what is your cost today of FOB in mining and what is the average freight price that we can expect for CSN in 2015 and if you could break what is freight export, what is contract, how are these variables going to evolve throughout the year? Do you have more space to cut costs? And volumes of third parties, will there be drop regarding 2014 and if you could quantify this it would be excellent?

Thank you very much, Thiago. I am going to divide the answer between Daniel and [Geraldo Medeiros]. Well, Daniel?

Now regarding our cost CSN and its culture already has a tradition of reducing cost constantly and moreover in this scenario we're strongly working to reduce these cost and it’s something that we've seen since 2013 when we realized that there could be a change in the market and you've been able to see this in our results throughout this period. Now we deployed a number of actions of cost reduction both in the Namisa and Casa de Pedra in order to increase the competitiveness of our operations. There we can see that we have a level of competitiveness and compared to one of the biggest mining companies so our cost levels are compared to the third greatest mining industries in the world. We continue striving to lower our cost and always trying to optimize our cost and to improve our operations something that we recently did was we transform Namisa where we implemented a strategy where we replaced the supply of standard for concentrate. So due to the possibilities that we have to integrate the operation of Casa de Pedra and Namisa, we can leverage our potential of competitiveness. And in terms of quality I believe we have a differentiated quality, we can place differentiated products in the market. Now regarding the production, Casa de Pedra is producing at full capacity we still have installed additional install capacity that still will be used. The port is completely finished and we are finishing the construction work to ship iron ore and we are so have the expansion of Casa de Pedra for 2016 for this year our guidance for the Transoceanic market is around 27 million and 28 million compared to last year, due to the drop of price and because many players left [indiscernible], the difference that there is in comparison to last year is based on our strategy to buy iron ore. Gerardo?

Now regarding maritime freight was of $20 in 2014 and at the end of the year the freight today is around $10 per tonne. Now our schedule of the shipment is contemplating a number of vessels with contract prices and the freight is being renegotiated with the customers. Due to these changes, the negotiations currently are taking place and all based on market reference and there has been a significant drop in our freight especially based after the second quarter. As I said now we're negotiating contracts but as of the second quarter, we will -- we’re able to have significant gain in freight. This comes in the past weeks we have started these debates.

Our next question from Mr. Leonardo Correa from BTG Pactual.

I have two questions. One would be possible disinvestments of the Company. Could you give us some guidance regarding assets that may be considered to be sold in order to lower the leverage? And second place, if you could also tell us how you see the premium in the domestic market with the exchange rate and if you believe that there is a possibility to increase prices?

Thank you very much for your question, Paulo will also talk about the investment.

Now regarding the premium today. Going straight to the point, if we see the Chinese market of around 395 to 410 FOB, the premium that we have today regarding the national import product is the premium that there is with the dollar from 315 to 2% to 5%, therefore we're talking about an FOB price that is the worst price. We consider iron ore $65 through '15 a premium of 2 to 5 and hot rolled, cold rolled products this premium is very similar. Now zinc rolled products in the last call I said that this premium was higher. And in reality it is narrower because today the spread of zinc and cold rolled has opened in other markets. So this is around 2% or 3% as well. Now regarding nationalized imported products. From the CSN point of view that was highly impacted in the imports last year, last year in the Brazilian steel market the apparent consumption that was 13 million, 2 million was of imported steel of these 2 million, 1 million tonnes were zinc steel which reflects, which directly reflects the portfolio of CSN products. So when we analyzed the strategy of CSN in the market it is very positive for the year 2015 because our strategy has been -- was to deliver added value now to the 40% of our portfolio of our sold products are products with the drop of this premium, I expect that these import would drop that was 20% in 2014 to drop 6%, 7% in 2015 or even lower. Another important point here that we already realize it that direct import also start dropping. Our finished products which also gives us better figures. Now from the market point of view CSN has -- we believe that of course the automobile industry…

[Operator Instructions] Our next question from Mr. Marcos Assumpcao, Itau.

Regarding mining, if you could tell us what is the level of profitability of your mining industry with the current price of the iron ore, 58 per tonne and CapEx as well, if you could tell us what is the CapEx, breaking out between the different businesses of the Company? And in addition to CapEx, if you could talk about the leverage and what the Company is doing to lower the leveraging, what is the level of leveraging that you believe you will have at the end of 2015?

Thank you very much Marcos for your question. The first question will be answered by Daniel regarding mining and then we will talk about leveraging.

Thank you very much for your question, while mining due to the quality of assets and how we manage cost and productivity, it continues highly competitive. When we compare it to the players in the current scenario our position is much better than our competition in the market on cost. The costs that are comparable to cost of the main producers in the international market we're at the same level of competitiveness of the big players. The quality of our products allow us to carry out less adjustments and quality sometimes we're able to capture important premium especially when we sell into domestic market, this is something that we have done recently. So in terms of competitiveness we continue together with the big players. Now of course the scenario is demand is cautious. We have restructured fix cost and we've seen another opportunities like maritime freight, we have tried to capture opportunities. From the competitiveness point of view I believe that we’re amongst four or five big players of the world.

Our next question from Mr. Ivano Westin, Credit Suisse.

One would be Casa de Pedra, you said that there was the dilution of the consortium. I would like to know if this announcement of the reserves, is this -- is part -- if this is something that you agree with the conception? Now, regarding mining, what can you say what is going to happen with Namisa's cash flow, because now you have a new structure, and if you could talk about the sales volume in the domestic market, what is your forecast for this year, if you could compare this year to last year?

Before answering your question, I'll go back to the question of Marcos Assumpcao that I didn't answer. So in the year 2014, we invested BRL2.12 billion. Now, our CapEx for 2015 is to prioritize investments of greater returns, focusing on maintenance of our assets and postponing our other investments. This way our calculation is that we will have BRL1.3 billion in terms of CapEx. Now, in steel, will be 327 million, in mining we're talking about 710 million and cement 200 million and other added investments would be97 million. Therefore, in reality, this adds up to 1.3 billion that is considered an adjustment to this economic scenario. I prefer not to commit myself right now, due to the volatility that we've seen in the market and I do not want to assure what the level of leveraging will be at the end of the year. This is why I prefer not to say anything, but I would like to say that we're extremely focused on lowering the leveraging level of the Company. This is a very important point, daily discussed in the Company. We're analyzing all the possibilities in order to be able to drop the leveraging level of the Company. Going now to Ivano's question, number one, the announcement of new reserves does not change the deal with our consortium partners. This basically will not impact the deal that we have with our consortium partners. Now regarding Namisa's cash flow of around $12 billion, 300 million have already been distributed in the first quarter. So we -- This is highly connected to the business plan. We are in a stage where we are creating our business plan and this will be submitted to our Board in the upcoming weeks. And after it is submitted, we will see where the cash necessity will be for the Company and we will have a balance that will be distributed to the shareholders of Namisa. And Daniel will answer the last question regarding the domestic market.

Thank you very much for your question. Historically, we have sold in the domestic market to complement the steel mills that work in the peripheral [indiscernible]. Now with this new price scenario in the market many of these players are no longer competitive and we are taking advantage of this opportunity and we are replacing this volume for our volume. Therefore we know that is how the region and other regions many people shut down their operations due to lack a competitiveness and as we have a differential we are taking advantage of this position, it’s difficult to say what is going to happen due to the price scenario because it is quite uncertain but I believe that we will have a significant volume supplying to the steel mills.

I believe I wasn't clear in my question. It's about steel. If (indiscernible) could talk about.

[indiscernible] isn't here. Ivano, what we expect in 2015, we're talking about a guidance of 6.2 million tonnes for 2015 and 5.2 in 2014. Now out of 6.2, around 70%, 72% in the domestic market. This is what we expect, there is a growth of the sales of LLC from 300,000 to 600,000 tonnes, also a significant growth in long, because last year we had 60,000, 70,000, then to 300,000, there is an increase in SWT of 800,000 tonnes. And in cements, cements that also is an important business for us that delivers 26%, 27% of margin, and is growing. We will have a volume of 2.8 million tonnes for the year 2015.

Our next question from Milton Sullyvan from Brasil Plural.

My first question regarding working capital, within our stocks we can see an increase of stocks in raw materially, If you could talk about this line, why there has been an increase? And if you could talk about the future of working capital, and also the demand of the offshore markets. We have seen higher levels of exports in the galvanized market. So I would like to know how you see the volumes of future export or if you have specific product that you intend to export.

Milton, thank you very much. I’ll ask [Marcelo] to answer your question and then I will talk about working capital.

Well in the first quarter, we will be highly focused, until the internal market doesn't take off and we have a positive view in the internal market for the second semester, due to the drop of imports. We are going to bet on exports. We have a unit in the United States that operates and I can operate as a local player, I have knowhow, I have a team, I have good people working there and I have a product portfolio that is very specific. I work with high-resistant zinc products and fine products, something that very few players manufacture in that market. Our strategy today is to sell this product, a very high added value, it's sold at $1,000 in the United States and our strategy is to sell raw material to manufacture this product in the United States, practically half of what I'm mentioning. And the other half will be sold here ready to commercialize it to different customers in the United States. We are increasing our base in the United States. We are highly focused, we are opening new points of sales where we want to sell [zinc] products. In civil construction there is -- we are accounting with integration and logistics that we will create in service centers in the United States and of course, we also [per house] -- we will probably increase zinc -- more zinc products in the United States. Although we have interesting costs, if you see integrated margins today, the zinc products that are being sold in the United States is a result of the raw material from Brazil. At $440, this generates $230 of integrated margin with CSN. With the dollar of 3.50 is a margin that is very similar to what I have in the domestic market. I would…

Now [indiscernible] from Citibank.

Good morning to everyone, I'd like to go back to iron ore today you reported the EBITDA per tonne was $12 or slightly below $12 per tonne and the price that we see is $58 or $16 below the average of the fourth quarter. What is the price level in the international market that would make exports unfeasible in your opinion? And at last that the if you have an update regarding Usiminas. You had a request, you requested something to CVM and for [indiscernible] .

Well, thank you very much. Daniel will answer the first question and I'll talk about Usiminas.

If you consider the Brazilian players and you see the main player that has a different performance in the market when you consider the market from the North and South East market we can compare ourselves to this player in the South East region when you compare mine for mine and the competitiveness of each one of them, this is no news, there are number of analyst that have already published this cost analysis and we are highly competitive and we're the last to turn off the light when it comes to dropping prices of the operations of the South East region. Now regarding our mine positions for Usiminas, you know this is a financial investment of the company. We always try to maximize the result of this investment. Now in reality our thesis is the same that CVM. Basically, we have a clear view that there was change in the parent group and as minority we are reclaiming our rights, we're going to different fronts to the CVM and justice, and to the anti-trust also -- agency.

[Operator Instructions]. Our next question from Mr. Alan Glezer from Bradesco.

I have two questions here. The first one would be the steel mill cost. We had a flat carbon cost. Was the exchange rate depreciates itself and there are other components are dollarized. I would like to understand how you see the pressure on cost, because there is a depreciation of the currency. Now would be regarding steel mills, I would like to know what happened with your product mix. I don't know if this is related to the drop of revenue per tonne, something that we have observed here. It will be basically my two questions.

Thank you very much, Alan for your questions. In reality, I'm going to try to convey to you what we -- something that we call operational exposure with the variation of the exchange rate. And what is interesting is that the Company, if you add steel and mining, in reality, you are positively exposed in dollars, $450 million, $500 million. So these are the revenues of iron ore. The revenues of steel, in terms of what we export, now while we buy of iron ore from thirty parties that is connected to the exchange variation. So this is what we do here. And when we add everything up, it is positive. And we are exposed -- our exposure is BRL450 million, so every $0.10 of variation, we in reality would have an increase of 45 million in consolidated EBITDA of the Company. Now regarding our product mix, our monetary net revenue of the year, if you imagine -- we finished 2014 with a unitary net revenue of 2,187 -- of 2,049, so 11.5 higher, without considering fees and COFINS. So we were highly affected. Number one, we changed our portfolio because of the demand -- the domestic demand. And we were affected by the significant import of galvanized products. So in reality, this drop of unitary net revenue was basically due to the product mix. Now, what is going to revert this situation positively in 2015 will be the dollar and the premiums that we have. Cold rolled products and zinc products, so we continue with 40% of our products with coated products. And this is something that will continue.

Our next question from Mr. [indiscernible] from Goldman Sachs.

We have two questions. One would be a follow up about the profitability of iron ore, I would like to know how you have maintained yourself competitive, when you have iron ore at $12 and a drop in the spot market of $14. How will you maintain yourself competitive? In this scenario with the price drops. And what about the proportional EBITDA of the controlled companies that was BRL200 million in fourth quarter, three times higher than what was recorded in the third quarter before. I would like to understand how you see this in the future?

I will answer the second part of your first question that would be regarding how we will maintain ourselves competitive. We have been doing our home work from seven years. Since 2013 we have had great performance in order to improve the quality of our product and also to drop our costs that is part of our model put on there would be continues cost reduction. We certainly at the end of last year when the scenario got worst, what we did was to change our operational model, you know more in Namisa and in Casa de Pedra as we already had highly optimized operation compared to Namisa. But we did it to compete in the near future. In Casa, Namisa what we did was we basically change the final product. So we had a product that was with standard with 62% of -- now we will sell concentrate. We will capture better prices and we are able to have differentiated products. We have fixed cost from Namisa and also we are practically totally integrated with Casa de Pedra that is the process that were undergoing this year. So there are some advantages in operational cost that allow us very quickly to adapt ourselves to new situation. We have a product of better added value improving more of the products of Casa de Pedra. And throughout the upcoming months you will see this happening strongly. Now in the case of cost when you talked about amounts when we have stress scenarios, where most of the journalist try to work with ranges calculating a dramatic scenario for the quarter what happens is that we survive with the big players and as I said in Brazil if we compare ourselves to Brazilian players in the [Ferrifero Quadrilateralum] and the southeast region of Brazil we are the last ones to leave the market. So if we are below $50 we still have a level of competitiveness is comparable to the big players. There is another question I was reading report and I said that this matter is creating confusion. What we had in the last quarter was simply a reclassification of our equity income. So we broke out the equivalence line and we sighted with the different lines. So we started breaking out our equity result.

And are they requested to reclassify.

So we’re basically we are talking about an accounting adjustment, that this have no impact in the EBITDA, the EBITDA would be 200 million -- the consolidated EBITDA that the company continues to say, it’s just a matter of reclassification like we did in the past quarter. This is why you saw the big impact of 200 million but this is accounting adjustment it does not involved any type of non-recurring adjustment as some analyst announce today.

Thank you. We have no further questions I would like to give the floor to Mr. David Salama, for his final comments.

So, first and foremost I would like to thank everybody for participating in today’s conference call. We would like to reassure that we’re focused on cost productivity, we’re focused on quality and return and mainly on reducing our debt. We are going through a difficult economic scenario but everything that is at our reach in terms of improving productivity and reducing cost to an improvement, we are doing and I can say that this is very intense at CSN. Therefore I would like to thank you for your participation here and tell you that our IR team is at your disposal to clarify any questions you may have. Good afternoon to everyone.

Thank you very much. CSN earnings call has come Please disconnect your lines and have a good day.