6-K 1 siditr2q09_6k.htm QUARTERLY INFORMATION 2Q09

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 6-K
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16 of the
Securities Exchange Act of 1934
For the month of August, 2009

Commission File Number 1-14732

COMPANHIA SIDERÚRGICA NACIONAL
(Exact name of registrant as specified in its charter)

National Steel Company
(Translation of Registrant's name into English)

Av. Brigadeiro Faria Lima 3400, 20º andar
São Paulo, SP, Brazil
04538-132
(Address of principal executive office)

Indicate by check mark whether the registrant files or will file annual reports
under cover Form 20-F or Form 40-F.

Form 20-F ___X___ Form 40-F _______

Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes _______ No ___X____

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(CONVENIENCE TRANSLATION INTO ENGLISH FROM THE ORIGINAL PREVIOUSLY ISSUED IN PORTUGUESE)

FEDERAL PUBLIC SERVICE |  |
CVM – BRAZILIAN SECURITIES AND EXCHANGE COMMISSION |  | Accounting Practices
QUARTERLY INFORMATION | June 30, 2009 | Adopted in Brazil
COMMERCIAL, INDUSTRY & OTHER TYPES OF COMPANY |  |

REGISTRATION WITH CVM SHOULD NOT BE CONSTRUED AS AN EVALUATION OF THE COMPANY. COMPANY MANAGEMENT IS RESPONSIBLE FOR THE INFORMATION PROVIDED.

01.01 – IDENTIFICATION

1 - CVM CODE 00403-0 | 2 - COMPANY NAME COMPANHIA SIDERÚRGICA NACIONAL | 3 - CNPJ (Corporate Taxpayer’s ID) 33.042.730/0001-04
4 - NIRE (Corporate Registry ID) 33-3-00011595

01.02 – HEAD OFFICE

1 - ADDRESS R. SÃO JOSÉ, 20 GR, 1602 PARTE | 2 - DISTRICT CENTRO
3 - ZIP CODE 22299-900 | 4 - CITY RIO DE JANEIRO | 5 - STATE RJ
6 - AREA CODE 21 | 7 - TELEPHONE 2141-1800 | 8 - TELEPHONE - | 9 - TELEPHONE - | 10 - TELEX
11 - AREA CODE 21 | 12 - FAX 2141-1809 | 13 - FAX - | 14 – FAX - |
15 - E-MAIL invrel@csn.com.br

01.03 – INVESTOR RELATIONS OFFICER (Company Mailing Address)

1- NAME PAULO PENIDO PINTO MARQUES
2 - ADDRESS AV. BRIGADEIRO FARIA LIMA, 3400 20º ANDAR | 3 - DISTRICT ITAIM BIBI
4 - ZIP CODE 04538-132 | 5 - CITY SÃO PAULO | 6 - STATE SP
7 - AREA CODE 11 | 8 - TELEPHONE 3049-7100 | 9 - TELEPHONE - | 10 - TELEPHONE - | 11 - TELEX
12 - AREA CODE 11 | 13 - FAX 3049-7212 | 14 - FAX - | 15 – FAX - |
16 - E-MAIL paulopenido@csn.com.br

01.04 – REFERENCE AND AUDITOR INFORMATION

CURRENT YEAR | CURRENT QUARTER | PREVIOUS QUARTER
1 - BEGINNING | 2 - END | 3 - QUARTER | 4 - BEGINNING | 5 - END | 6 - QUARTER | 7 - BEGINNING | 8 - END
1/1/2009 | 12/31/2009 | 2 | 4/1/2009 | 6/30/2009 | 1 | 1/1/2009 | 3/31/2009
09 - INDEPENDENT ACCOUNTANT KPMG AUDITORES INDEPENDENTES | 10 - CVM CODE 00418-9
11. TECHNICIAN IN CHARGE ANSELMO NEVES MACEDO | 12 – TECHNICIAN’S CPF (INDIVIDUAL TAXPAYER’S ID) 033.169.788-28

1

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01.05 – CAPITAL STOCK

Number of Shares (In thousands) | 1- CURRENT QUARTER 6/30/2009 | 2- PREVIOUS QUARTER 3/31/2009 | 3 – SAME QUARTER PREVIOUS YEAR 6/30/2008
Paid-in Capital
1 – Common | 793,404 | 793,404 | 804,204
2 – Preferred | 0 | 0 | 0
3 – Total | 793,404 | 793,404 | 804,204
Treasury Shares
4 – Common | 34,734 | 34,734 | 34,734
5 – Preferred | 0 | 0 | 0
6 – Total | 34,734 | 34,734 | 34,734

01.06 – COMPANY PROFILE

1 - TYPE OF COMPANY Commercial, Industry and Other Types of Company
2 - STATUS Operational
3 - NATURE OF OWNERSHIP Private National
4 - ACTIVITY CODE 1060 – Metallurgy and Steel Industry
5 - MAIN ACTIVITY MANUFACTURING, TRANSFORMATION AND TRADING OF STEEL PRODUCTS
6 - CONSOLIDATION TYPE Total
7 - TYPE OF REPORT OF INDEPENDENT AUDITORS Unqualified

01.07 – COMPANIES NOT INCLUDED IN THE CONSOLIDATED FINANCIAL STATEMENTS

1 - ITEM | 2 - CNPJ (Corporate Taxpayer’s ID) | 3 - COMPANY NAME

01.08 - CASH DIVIDENDS APPROVED AND/OR PAID DURING AND AFTER THE QUARTER

1 - ITEM | 2 - EVENT | 3 - APPROVAL | 4 - TYPE | 5 - DATE OF PAYMENT | 6 - TYPE OF SHARE | 7 - AMOUNT PER SHARE
01 | AGO* | 4/30/2009 | Interest on Shareholders’ Equity | 4/30/2009 | Common | 0.3537840000
02 | AGO* | 6/25/2009 | Dividend | 6/25/2009 | Common | 1.0536500000

*Annual General Meeting

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01.09 - SUBSCRIBED CAPITAL AND CHANGES IN THE CURRENT YEAR

1 - ITEM | 2 - DATE OF CHANGE | 3 - CAPITAL STOCK (In thousands of reais) | 4 - AMOUNT OF CHANGE (In thousands of reais) | 5 - NATURE OF CHANGE | 7 - NUMBER OF SHARES ISSUED (Thousand) | 8 - SHARE PRICE WHEN ISSUED (In reais)

01.10 - INVESTOR RELATIONS OFFICER

1 - DATE 8/6/2009 | 2 - SIGNATURE

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02.01 – BALANCE SHEET - ASSETS (in thousands of Reais)

1 - CODE | 2 - DESCRIPTION | 3 - 6/30/2009 | 4 -3/31/2009
1 | Total Assets | 34,254,047 | 38,496,985
1.01 | Current Assets | 8,636,527 | 12,624,221
1.01.01 | Cash and Cash Equivalents | 100,992 | 231,864
1.01.02 | Receivable | 2,600,972 | 2,821,483
1.01.02.01 | Clients | 1,310,120 | 1,532,476
1.01.02.01.01 | Domestic Market | 908,221 | 882,705
1.01.02.01.02 | Foreign Market | 683,099 | 831,918
1.01.02.01.03 | Advance on Export Contracts (ACE) | (58,548) | 0
1.01.02.01.04 | Allowance for Doubtful Accounts | (222,652) | (182,147)
1.01.02.02 | Sundry Receivable | 1,290,852 | 1,289,007
1.01.02.02.01 | Employees | 19,853 | 22,498
1.01.02.02.02 | Corporate Income Tax Recoverable | 48,642 | 40,087
1.01.02.02.03 | Deferred Income Tax | 321,049 | 460,925
1.01.02.02.04 | Deferred Social Contribution | 115,739 | 165,855
1.01.02.02.05 | Prepaid Income Tax | 272,700 | 40,543
1.01.02.02.06 | Other Taxes | 304,578 | 164,810
1.01.02.02.07 | Proposed Dividends Receivable | 104,003 | 308,545
1.01.02.02.08 | Loans with Subsidiaries | 194 | 231
1.01.02.02.09 | Other Receivable | 104,094 | 85,513
1.01.03 | Inventories | 2,642,957 | 2,724,703
1.01.04 | Other | 3,291,606 | 6,846,171
1.01.04.01 | Marketable Securities | 3,270,240 | 6,831,375
1.01.04.02 | Prepaid Expenses | 21,366 | 14,796
1.02 | Noncurrent Assets | 25,617,520 | 25,872,764
1.02.01 | Long-Term Assets | 5,507,569 | 6,187,175
1.02.01.01 | Sundry Receivables | 944,939 | 919,257
1.02.01.01.02 | Securities Receivable | 81,976 | 86,388
1.02.01.01.03 | Deferred Income Tax | 508,378 | 498,201
1.02.01.01.04 | Deferred Social Contribution | 169,699 | 166,875
1.02.01.01.05 | Other Taxes | 184,886 | 167,793
1.02.01.02 | Receivable from Related Parties | 3,614,265 | 4,339,363
1.02.01.02.01 | Associated and Related Companies | 0 | 0
1.02.01.02.02 | Subsidiaries | 1,409,572 | 1,723,917
1.02.01.02.03 | Other Related Parties | 2,204,693 | 2,615,446
1.02.01.03 | Other | 948,365 | 928,555
1.02.01.03.01 | Judicial Deposits | 763,286 | 741,512
1.02.01.03.03 | Prepaid Expenses | 31,690 | 34,951
1.02.01.03.04 | Other | 153,389 | 152,092
1.02.02 | Permanent Assets | 20,109,951 | 19,685,589
1.02.02.01 | Investments | 12,832,015 | 12,706,858
1.02.02.01.01 | Interest in Associated/Related Companies | 0 | 0

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1 - CODE | 2 - DESCRIPTION | 3 - 6/30/2009 | 4 -3/31/2009
1.02.02.01.02 | Interest in Associated/Related Companies - Goodwill | 0 | 0
1.02.02.01.03 | Interest in Subsidiaries | 12,831,984 | 12,706,827
1.02.02.01.04 | Interest in Subsidiaries - Goodwill | 0 | 0
1.02.02.01.05 | Other Investments | 31 | 31
1.02.02.02 | Property, Plant and Equipment | 7,155,867 | 6,909,518
1.02.02.02.01 | In Operation, Net | 6,083,817 | 5,612,780
1.02.02.02.02 | In Construction | 982,641 | 1,210,999
1.02.02.02.03 | Land | 89,409 | 85,739
1.02.02.03 | Intangible Assets | 90,482 | 36,030
1.02.02.04 | Deferred Charges | 31,587 | 33,183

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02.02 – BALANCE SHEET - LIABILITIES (in thousands of Reais)

1 - CODE | 2 - DESCRIPTION | 3 - 6/30/2009 | 4 -3/31/2009
2 | Total Liabilities | 34,254,047 | 38,496,985
2.01 | Current Liabilities | 5,823,889 | 7,805,142
2.01.01 | Loans and Financing | 2,738,207 | 3,148,361
2.01.02 | Debentures | 26,172 | 11,099
2.01.03 | Suppliers | 1,240,240 | 1,668,275
2.01.04 | Taxes, Fees and Contributions | 825,464 | 458,767
2.01.04.01 | Salaries and Social Contributions | 86,020 | 68,342
2.01.04.02 | Taxes Payable | 498,615 | 154,819
2.01.04.05 | Taxes Paid by Installments | 240,829 | 235,606
2.01.05 | Dividends Payable | 194,481 | 1,852,552
2.01.06 | Provisions | 172,051 | 150,542
2.01.06.01 | Labor Contingencies | 127,923 | 106,368
2.01.06.02 | Civil Contingencies | 62,467 | 57,489
2.01.06.03 | Judicial Deposits | (74,642) | (68,871)
2.01.06.04 | Provision for Pension Fund | 56,303 | 55,556
2.01.07 | Debts with Related Parties | 0 | 0
2.01.08 | Other | 627,274 | 515,546
2.01.08.01 | Accounts Payable - Subsidiaries | 181,934 | 187,587
2.01.08.02 | Other | 445,340 | 327,959
2.02 | Noncurrent Liabilities | 21,439,646 | 23,762,964
2.02.01 | Long-Term Liabilities | 21,439,646 | 23,762,964
2.02.01.01 | Loans and Financing | 10,341,835 | 11,916,942
2.02.01.02 | Debentures | 600,000 | 600,000
2.02.01.03 | Provisions | 1,752,859 | 2,415,716
2.02.01.03.01 | Labor and Social Security Contingencies | 26,678 | 20,804
2.02.01.03.03 | Tax Contingencies | 3,701,647 | 3,640,265
2.02.01.03.04 | Environmental Contingencies | 69,384 | 69,626
2.02.01.03.05 | Judicial Deposits | (2,044,850) | (1,314,979)
2.02.01.04 | Debts with Related Parties | 0 | 0
2.02.01.05 | Advance for Future Capital Increase | 0 | 0
2.02.01.06 | Other | 8,744,952 | 8,830,306
2.02.01.06.01 | Accounts Payable – Subsidiaries | 8,014,748 | 8,043,222
2.02.01.06.02 | Provision for Pension Fund | 39,982 | 51,461
2.02.01.06.03 | Taxes Paid by Installments | 542,671 | 589,802
2.02.01.06.05 | Other | 147,551 | 145,821
2.03 | Deferred Income | 0 | 0
2.05 | Shareholders’ Equity | 6,990,512 | 6,928,879
2.05.01 | Paid-In Capital Stock | 1,680,947 | 1,680,947
2.05.02 | Capital Reserves | 30 | 30
2.05.03 | Revaluation Reserves | 0 | 0
2.05.03.01 | Own Assets | 0 | 0

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1 - CODE | 2 - DESCRIPTION | 3 - 6/30/2009 | 4 -3/31/2009
2.05.03.02 | Subsidiaries/Associated and Related Companies | 0 | 0
2.05.04 | Profit Reserves | 3,768,756 | 3,768,756
2.05.04.01 | Legal | 336,190 | 336,190
2.05.04.02 | Statutory | 0 | 0
2.05.04.03 | For Contingencies | 0 | 0
2.05.04.04 | Unrealized Income | 2,493,493 | 0
2.05.04.05 | Retention of Profits | 0 | 0
2.05.04.06 | Special For Undistributed Dividends | 0 | 0
2.05.04.07 | Other Profit Reserves | 939,073 | 3,432,566
2.05.04.07.01 | From Investments | 1,658,115 | 4,151,608
2.05.04.07.02 | Treasury Shares | (719,042) | (719,042)
2.05.05 | Equity Valuation Adjustments | 401,412 | 1,248,814
2.05.05.01 | Securities Adjustments | 0 | 0
2.05.05.02 | Accumulated Translation Adjustments | 401,412 | 1,248,814
2.05.05.03 | Business Combination Adjustments | 0 | 0
2.05.06 | Retained Earnings/ Accumulated Losses | 1,139,367 | 230,332
2.05.07 | Advance for Future Capital Increase | 0 | 0

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03.01 – STATEMENT OF INCOME (in thousands of Reais)

1 - CODE | 2 - DESCRIPTION | 3 - 4/1/2009 to 6/30/2009 | 4 - 1/1/2009 to 6/30/2009 | 5 - 4/1/2008 to 6/30/2008 | 6 - 1/1/2008 to 6/30/2008
3.01 | Gross Revenue from Sales and/or Services | 2,516,244 | 4,798,504 | 3,500,195 | 6,604,477
3.02 | Gross Revenue Deductions | (579,945) | (1,056,187) | (914,986) | (1,693,595)
3.03 | Net Revenue from Sales and/or Services | 1,936,299 | 3,742,317 | 2,585,209 | 4,910,882
3.04 | Cost of Goods Sold and/or Services Rendered | (1,223,773) | (2,558,742) | (1,347,053) | (2,728,452)
3.04.01 | Depreciation, Depletion and Amortization | (167,043) | (279,487) | (254,571) | (527,025)
3.04.02 | Other | (1,056,730) | (2,279,255) | (1,092,482) | (2,201,427)
3.05 | Gross Income | 712,526 | 1,183,575 | 1,238,156 | 2,182,430
3.06 | Operating Income/Expenses | 817,236 | 683,001 | 215,440 | 185,063
3.06.01 | Selling Expenses | (122,227) | (228,786) | (122,902) | (223,931)
3.06.01.01 | Depreciation and Amortization | (1,252) | (2,378) | (1,975) | (3,844)
3.06.01.02 | Other | (120,975) | (226,408) | (120,927) | (220,087)
3.06.02 | General and Administrative | (84,470) | (155,247) | (89,563) | (158,515)
3.06.02.01 | Depreciation and Amortization | (1,904) | (3,732) | (3,947) | (8,073)
3.06.02.02 | Other | (82,566) | (151,515) | (85,616) | (150,442)
3.06.03 | Financial | 457,639 | 204,686 | 231,410 | (24,742)
3.06.03.01 | Financial Income | (96,997) | 186,677 | (113,778) | (140,401)
3.06.03.02 | Financial Expenses | 554,636 | 18,009 | 345,188 | 115,659
3.06.03.02.01 | Foreign Exchange and Monetary Variation, net | 1,124,992 | 1,233,933 | 627,015 | 632,501
3.06.03.02.02 | Financial Expenses | (570,356) | (1,215,924) | (281,827) | (516,842)
3.06.04 | Other Operating Income | 30,603 | 105,423 | 9,510 | 14,608
3.06.05 | Other Operating Expenses | (144,605) | (229,829) | (111,762) | (165,023)
3.06.06 | Equity Pick-Up | 680,296 | 986,754 | 298,747 | 742,666
3.07 | Operating Income | 1,529,762 | 1,866,576 | 1,453,596 | 2,367,493
3.08 | Non-operating Income | 0 | 0 | 0 | 0
3.08.01 | Income | 0 | 0 | 0 | 0
3.08.02 | Expenses | 0 | 0 | 0 | 0
3.09 | Income before Taxes/Profit Sharing | 1,529,762 | 1,866,576 | 1,453,596 | 2,367,493

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1 - CODE | 2 - DESCRIPTION | 3 - 4/1/2009 to 6/30/2009 | 4 - 1/1/2009 to 6/30/2009 | 5 - 4/1/2008 to 6/30/2008 | 6 - 1/1/2008 to 6/30/2008
3.10 | Provision for Income and Social Contribution Taxes | (333,719) | (418,704) | (477,204) | (553,508)
3.11 | Deferred Income Tax | (176,991) | (115,282) | 74,551 | 8,056
3.11.01 | Deferred Income Tax | (129,699) | (84,021) | 52,262 | 3,835
3.11.02 | Deferred Social Contribution | (47,292) | (31,261) | 22,289 | 4,221
3.12 | Statutory Profit Sharing/Contributions | 0 | 0 | 0 | 0
3.12.01 | Profit Sharing | 0 | 0 | 0 | 0
3.12.02 | Contributions | 0 | 0 | 0 | 0
3.13 | Reversal of Interest on Shareholders’ Equity | 0 | 0 | 0 | 0
3.15 | Income/Loss for the Period | 1,019,052 | 1,332,590 | 1,050,943 | 1,822,041
| OUTSTANDING SHARES, EX-TREASURY (in thousands) | 758,670 | 758,670 | 769,470 | 769,470
| EARNINGS PER SHARE (in Reais) | 1.34321 | 1.75648 | 1.36580 | 2.36792
| LOSS PER SHARE (in Reais) |  |  |  |

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04.01 – STATEMENT OF CASH FLOWS – INDIRECT METHOD (in thousands of Reais)

1 - CODE | 2 - DESCRIPTION | 3 - 4/1/2009 to 6/30/2009 | 4 - 1/1/2009 to 6/30/2009 | 5 - 4/1/2008 to 6/30/2008 | 6 - 1/1/2008 to 6/30/2008
4.01 | Net Cash from Operating Activities | (426,863) | (668,120) | 1,072,278 | 1,489,781
4.01.01 | Cash Generated in the Operations | (1,303,799) | (1,108,180) | 795,091 | 1,313,007
4.01.01.01 | Net Income for the Year | 1,019,052 | 1,332,590 | 1,050,944 | 1,822,042
4.01.01.02 | Provision for Charges on Loans and Financing | 428,475 | 921,370 | 131,035 | 274,785
4.01.01.03 | Depreciation, Depletion and Amortization | 170,197 | 285,596 | 260,493 | 538,942
4.01.01.04 | Income from Write-off and Disposal of Assets | 15,733 | 15,733 | 1 | 1,357
4.01.01.05 | Income from Corporate Interest | (680,296) | (986,754) | (298,746) | (742,665)
4.01.01.06 | Gain and Loss in Percentage Variation | 0 | 0 | 0 | 0
4.01.01.07 | Deferred Income and Social Contribution Taxes | 176,991 | 115,282 | (74,550) | (8,056)
4.01.01.08 | Provision for Swap/Forward Operations | 4,320 | 9,264 | 475,366 | 12,451
4.01.01.09 | Provision for Actuarial Liability | (10,731) | (21,283) | (35,953) | (71,616)
4.01.01.10 | Monetary and Exchange Variation | (2,506,845) | (2,852,695) | (779,771) | (643,248)
4.01.01.11 | Provision for Contingencies | 32,805 | 46,364 | (5,117) | 20,780
4.01.01.12 | Other Provisions | 46,500 | 26,353 | 71,389 | 108,235
4.01.02 | Variation in Assets and Liabilities | 876,936 | 440,060 | 277,187 | 176,774
4.01.02.01 | Accounts Receivable | 71,307 | 81,953 | (96,016) | (108,834)
4.01.02.02 | Inventories | 135,839 | 185,276 | (103,247) | 121,728
4.01.02.03 | Receivables from Subsidiaries | 1,103,355 | 997,520 | 292,055 | 223,807
4.01.02.04 | Taxes to Offset | (25,983) | (93,257) | (35,887) | (22,233)
4.01.02.05 | Prepaid Taxes | (371,589) | (371,589) | 0 | 0
4.01.02.06 | Suppliers | (217,540) | (325,674) | 66,445 | (104,672)
4.01.02.07 | Salaries and Social Charges | 17,679 | 10,372 | 23,564 | 18,293
4.01.02.08 | Taxes | 305,251 | 374,633 | 356,529 | 192,261
4.01.02.09 | Accounts Payable - Subsidiaries | 129,297 | 129,344 | 215,926 | 209,722
4.01.02.10 | Contingent Liabilities | 7,308 | 19,957 | 88,099 | 160,219
4.01.02.11 | Financial Institutions – Interest Rates | (271,456) | (591,097) | (473,880) | (618,897)
4.01.02.12 | Financial Institutions - Swap | (4,278) | (9,049) | 0 | 0

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1 - CODE | 2 - DESCRIPTION | 3 - 4/1/2009 to 6/30/2009 | 4 - 1/1/2009 to 6/30/2009 | 5 - 4/1/2008 to 6/30/2008 | 6 - 1/1/2008 to 6/30/2008
4.01.02.13 | Other | (2,254) | 31,671 | (56,401) | 105,380
4.01.03 | Other | 0 | 0 | 0 | 0
4.02 | Net Cash from Investment Activities | (1,630,093) | (1,900,934) | (514,852) | (741,102)
4.02.01 | Judicial Deposits | (710,936) | (715,461) | (9,565) | (13,441)
4.02.02 | Investments | (514,347) | (624,337) | (206,370) | (206,370)
4.02.03 | Property, Plant and Equipment | (404,810) | (561,136) | (279,728) | (485,632)
4.02.04 | Deferred Charges | 0 | 0 | (19,189) | (35,659)
4.02.05 | Deferred Charges | 0 | 0 | 0 | 0
4.03 | Net Cash from Financing Activities | (1,635,051) | (1,451,393) | (570,184) | (1,114,864)
4.03.01 | Loans and Financing | 542,676 | 1,028,879 | 829,757 | 1,234,098
4.03.02 | Receipt for share issue | 0 | 0 | 0 | 0
4.03.03 | Debentures | 0 | 0 | 0 | 0
4.03.04 | Financial Institutions – Principal | (409,638) | (712,181) | (85,257) | (233,438)
4.03.05 | Dividends and Interest on Shareholders’ Equity | (1,768,089) | (1,768,091) | (1,314,684) | (2,115,524)
4.04 | Foreign Exchange Variation on Cash and Cash Equivalents | 0 | 0 | 0 | 0
4.05 | Increase (Decrease) in Cash and Cash Equivalents | (3,692,007) | (4,020,447) | (12,758) | (366,185)
4.05.01 | Opening Balance of Cash and Cash Equivalents | 7,063,239 | 7,391,679 | 391,688 | 745,115
4.05.02 | Closing Balance of Cash and Cash Equivalents | 3,371,232 | 3,371,232 | 378,930 | 378,930

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05.01 – STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY FROM 4/1/2009 TO 6/30/2009 (in R$ thousand)

1 - CODE | 2 – DESCRIPTION | 3 – CAPITAL STOCK | 4 – CAPITAL RESERVES | 5 –REVALUATION RESERVES | 6 – PROFIT RESERVES | 7 – RETAINED EARNINGS/ ACCUMULATED LOSSES | 8 –EQUITY VALUATION ADJUSTMENTS | 9 - TOTAL SHAREHOLDERS' EQUITY
5.01 | Opening Balance | 1,680,947 | 30 | 0 | 3,768,756 | 230,332 | 1,248,814 | 6,928,879
5.02 | Prior Year Adjustments | 0 | 0 | 0 | 0 | 0 | 0 | 0
5.03 | Adjusted Balance | 1,680,947 | 30 | 0 | 3,768,756 | 230,332 | 1,248,814 | 6,928,879
5.04 | Income/Loss for the Period | 0 | 0 | 0 | 0 | 1,019,052 | 0 | 1,019,052
5.05 | Distributions | 0 | 0 | 0 | 0 | (110,017) | 0 | (110,017)
5.05.01 | Dividends | 0 | 0 | 0 | 0 | (110,017) | 0 | (110,017)
5.05.02 | Interest on Shareholders’ Equity | 0 | 0 | 0 | 0 | 0 | 0 | 0
5.05.03 | Other Distributions | 0 | 0 | 0 | 0 | 0 | 0 | 0
5.06 | Profit Reserve Realization | 0 | 0 | 0 | 0 | 0 | 0 | 0
5.07 | Equity Valuation Adjustments | 0 | 0 | 0 | 0 | 0 | (847,402) | (847,402)
5.07.01 | Securities Adjustments | 0 | 0 | 0 | 0 | 0 | 0 | 0
5.07.02 | Accumulated Translation Adjustments | 0 | 0 | 0 | 0 | 0 | (847,402) | (847,402)
5.07.03 | Business Combination Adjustments | 0 | 0 | 0 | 0 | 0 | 0 | 0
5.08 | Increase/Reduction in Capital | 0 | 0 | 0 | 0 | 0 | 0 | 0
5.09 | Recording/Realization of Capital Reserves | 0 | 0 | 0 | 0 | 0 | 0 | 0
5.10 | Treasury Shares | 0 | 0 | 0 | 0 | 0 | 0 | 0
5.11 | Other Capital Transactions | 0 | 0 | 0 | 0 | 0 | 0 | 0
5.12 | Other | 0 | 0 | 0 | 0 | 0 | 0 | 0
5.12.01 | Unrealized Income | 0 | 0 | 0 | 0 | 0 | 0 | 0
5.13 | Closing Balance | 1,680,947 | 30 | 0 | 3,768,756 | 1,139,367 | 401,412 | 6,990,512

12

#####

05.02 – STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY FROM 1/1/2009 TO 6/30/2009 (in R$ thousand)

1 - CODE | 2 – DESCRIPTION | 3 – CAPITAL STOCK | 4 – CAPITAL RESERVES | 5 –REVALUATION RESERVES | 6 – PROFIT RESERVES | 7 – RETAINED EARNINGS/ ACCUMULATED LOSSES | 8 –EQUITY VALUATION ADJUSTMENTS | 9 - TOTAL SHAREHOLDERS' EQUITY
5.01 | Opening Balance | 1,680,947 | 30 | 0 | 3,768,756 | 0 | 1,298,729 | 6,748,462
5.02 | Prior Year Adjustments | 0 | 0 | 0 | 0 | 0 | 0 | 0
5.03 | Adjusted Balance | 1,680,947 | 30 | 0 | 3,768,756 | 0 | 1,298,729 | 6,748,462
5.04 | Net Income/Loss for the Period | 0 | 0 | 0 | 0 | 1,332,590 | 0 | 1,332,590
5.05 | Distributions | 0 | 0 | 0 | 0 | (193,223) | 0 | (193,223)
5.05.01 | Dividends | 0 | 0 | 0 | 0 | 0 | 0 | 0
5.05.02 | Interest on Shareholders’ Equity | 0 | 0 | 0 | 0 | (193,223) | 0 | (193,223)
5.05.03 | Other Distributions | 0 | 0 | 0 | 0 | 0 | 0 | 0
5.06 | Realization of Profit Reserves | 0 | 0 | 0 | 0 | 0 | 0 | 0
5.07 | Equity Valuation Adjustments | 0 | 0 | 0 | 0 | 0 | (897,317) | (897,317)
5.07.01 | Securities Adjustments | 0 | 0 | 0 | 0 | 0 | 0 | 0
5.07.02 | Accumulated Translation Adjustments | 0 | 0 | 0 | 0 | 0 | (897,317) | (897,317)
5.07.03 | Business Combination Adjustments | 0 | 0 | 0 | 0 | 0 | 0 | 0
5.08 | Increase/Reduction in Capital Stock | 0 | 0 | 0 | 0 | 0 | 0 | 0
5.09 | Recording/Realization of Capital Reserves | 0 | 0 | 0 | 0 | 0 | 0 | 0
5.10 | Treasury Shares | 0 | 0 | 0 | 0 | 0 | 0 | 0
5.11 | Other Capital Transactions | 0 | 0 | 0 | 0 | 0 | 0 | 0
5.12 | Other | 0 | 0 | 0 | 0 | 0 | 0 | 0
5.13 | Closing Balance | 1,680,947 | 30 | 0 | 3,768,756 | 1,139,367 | 401,412 | 6,990,512

13

#####

08.01 – CONSOLIDATED BALANCE SHEET - ASSETS (in thousands of reais)

1- CODE | 2 – DESCRIPTION | 3 - 6/30/2009 | 4 -3/31/2009
1 | Total Assets | 27,649,709 | 31,735,764
1.01 | Current Assets | 13,528,284 | 17,806,200
1.01.01 | Cash and Cash Equivalents | 182,004 | 295,815
1.01.02 | Receivable | 2,617,068 | 2,566,416
1.01.02.01 | Clients | 1,078,748 | 1,225,448
1.01.02.01.01 | Domestic Market | 1,109,914 | 1,096,370
1.01.02.01.02 | Foreign Market | 304,990 | 368,914
1.01.02.01.03 | Advance on Export Contracts (ACE) | (58,548) | 0
1.01.02.01.04 | Allowance for Doubtful Accounts | (277,608) | (239,836)
1.01.02.02 | Sundry Receivable | 1,538,320 | 1,340,968
1.01.02.02.01 | Employees | 21,050 | 23,580
1.01.02.02.03 | Income and Social Contribution Taxes to Offset | 79,314 | 71,326
1.01.02.02.04 | Deferred Income Tax | 388,182 | 539,825
1.01.02.02.05 | Deferred Social Contribution | 139,992 | 194,427
1.01.02.02.06 | Prepaid Income Tax | 305,712 | 60,176
1.01.02.02.07 | Other Taxes | 476,738 | 315,816
1.01.02.02.08 | Proposed Dividends Receivable | 66,326 | 0
1.01.02.02.09 | Other Receivable | 61,006 | 135,818
1.01.03 | Inventories | 3,412,724 | 3,621,725
1.01.04 | Other | 7,316,488 | 11,322,244
1.01.04.01 | Marketable Securities | 5,898,877 | 8,860,907
1.01.04.02 | Prepaid Expenses | 33,229 | 28,199
1.01.04.05 | Guarantee Margin of Financial Instruments | 1,384,382 | 2,433,138
1.02 | Noncurrent Assets | 14,121,425 | 13,929,564
1.02.01 | Long-Term Assets | 3,053,173 | 3,082,429
1.02.01.01 | Sundry Receivables | 1,381,293 | 1,379,881
1.02.01.01.02 | Securities Receivable | 298,349 | 317,341
1.02.01.01.03 | Deferred Income Tax | 608,024 | 585,831
1.02.01.01.04 | Deferred Social Contribution | 205,814 | 198,663
1.02.01.01.05 | Other Taxes | 269,106 | 278,046
1.02.01.02 | Receivable from Related Parties | 479,120 | 479,120
1.02.01.02.01 | From Associated and Related Companies | 0 | 0
1.02.01.02.02 | From Subsidiaries | 479,120 | 479,120
1.02.01.02.03 | From Other Related Parties | 0 | 0
1.02.01.03 | Other | 1,192,760 | 1,223,428
1.02.01.03.01 | Judicial Deposits | 779,768 | 757,818
1.02.01.03.03 | Prepaid Expenses | 124,372 | 125,562
1.02.01.03.04 | Securities | 0 | 23,152
1.02.01.03.05 | Other | 288,620 | 316,896
1.02.02 | Permanent Assets | 11,068,252 | 10,847,135
1.02.02.01 | Investments | 1,127 | 1,326

14

#####

1- CODE | 2- DESCRIPTION | 3 - 6/30/2009 | 4 -3/31/2009
1.02.02.01.01 | Interest in Associated and Related Companies | 0 | 0
1.02.02.01.02 | Interest in Subsidiaries | 0 | 0
1.02.02.01.03 | Other Investments | 1,127 | 1,326
1.02.02.02 | Property, Plant and Equipment | 10,524,104 | 10,279,579
1.02.02.02.01 | In Operation, Net | 8,792,643 | 8,052,296
1.02.02.02.02 | In Construction | 1,597,818 | 2,095,282
1.02.02.02.03 | Land | 133,643 | 132,001
1.02.02.03 | Intangible Assets | 504,981 | 525,845
1.02.02.04 | Deferred Charges | 38,040 | 40,385

15

#####

08.02 – CONSOLIDATED BALANCE SHEET - LIABILITIES (in thousands of reais)

1 - CODE | 2 - DESCRIPTION | 3 - 6/30/2009 | 4 -3/31/2009
2 | Total Liabilities | 27,649,709 | 31,735,764
2.01 | Current Liabilities | 6,942,100 | 9,503,429
2.01.01 | Loans and Financing | 2,906,818 | 3,101,098
2.01.02 | Debentures | 35,279 | 22,163
2.01.03 | Suppliers | 1,325,743 | 1,795,182
2.01.04 | Taxes, Fees and Contributions | 1,106,517 | 701,668
2.01.04.01 | Salaries and Social Contributions | 130,061 | 105,508
2.01.04.02 | Taxes Payable | 714,121 | 339,563
2.01.04.03 | Deferred Income Tax | 0 | 0
2.01.04.04 | Deferred Social Contribution | 0 | 0
2.01.04.05 | Taxes Paid by Installments | 262,335 | 256,597
2.01.05 | Dividends Payable | 225,372 | 1,852,552
2.01.06 | Provisions | 177,987 | 158,321
2.01.06.01 | Labor Contingencies | 140,019 | 119,310
2.01.06.02 | Civil Contingencies | 63,912 | 58,978
2.01.06.04 | Judicial Deposits | (82,247) | (75,523)
2.01.06.05 | Pension Fund Provision | 56,303 | 55,556
2.01.07 | Debts with Related Parties | 0 | 0
2.01.08 | Other | 1,164,384 | 1,872,445
2.01.08.01 | Financial Instruments – Equity Swap | 733,939 | 1,364,970
2.01.08.02 | Accounts payable – Subsidiaries | 70,065 | 67,715
2.01.08.03 | Other | 360,380 | 439,760
2.02 | Noncurrent Liabilities | 13,780,068 | 15,324,744
2.02.01 | Long-Term Liabilities | 13,780,068 | 15,324,744
2.02.01.01 | Loans and Financing | 7,392,485 | 8,238,983
2.02.01.02 | Debentures | 628,665 | 632,760
2.02.01.03 | Provisions | 1,835,517 | 2,506,121
2.02.01.03.01 | Labor and Social Security Contingencies | 83,458 | 75,280
2.02.01.03.02 | Civil Contingencies | 17,355 | 16,875
2.02.01.03.03 | Tax Contingencies | 3,722,687 | 3,670,933
2.02.01.03.04 | Environmental Contingencies | 69,384 | 69,626
2.02.01.03.05 | Other Contingencies | 57 | 128
2.02.01.03.06 | Judicial Deposits | (2,057,424) | (1,326,721)
2.02.01.04 | Debts with Related Parties | 0 | 0
2.02.01.05 | Advance for Future Capital Increase | 0 | 0
2.02.01.06 | Other | 3,923,401 | 3,946,880
2.02.01.06.03 | Pension Fund Provision | 44,563 | 53,761
2.02.01.06.04 | Taxes Paid by Installments | 704,340 | 752,522
2.02.01.06.05 | Accounts Payable – Subsidiaries | 2,936,373 | 2,897,924
2.02.01.06.06 | Other | 238,125 | 242,673
2.03 | Deferred Income | 0 | 0

16

#####

1 - CODE | 2 - DESCRIPTION | 3 - 6/30/2009 | 4 -3/31/2009
2.04 | Minority Interests | 0 | 0
2.05 | Shareholders’ Equity | 6,927,541 | 6,907,591
2.05.01 | Paid-In Capital | 1,680,947 | 1,680,947
2.05.02 | Capital Reserves | 30 | 30
2.05.03 | Revaluation Reserves | 0 | 0
2.05.03.01 | Own Assets | 0 | 0
2.05.03.02 | Subsidiaries/Associated and Related Companies | 0 | 0
2.05.04 | Profit Reserves | 3,705,786 | 3,747,467
2.05.04.01 | Legal | 336,189 | 336,189
2.05.04.02 | Statutory | 0 | 0
2.05.04.03 | For Contingencies | 0 | 0
2.05.04.04 | Unrealized Income | 2,493,493 | 0
2.05.04.05 | Profit Retention | 0 | 0
2.05.04.06 | Special For Undistributed Dividends | 0 | 0
2.05.04.07 | Other Profit Reserves | 876,104 | 3,411,278
2.05.04.07.01 | Investments | 1,658,114 | 4,151,608
2.05.04.07.02 | Treasury Shares | (719,042) | (719,042)
2.05.04.07.03 | Unrealized Income | (62,968) | (21,288)
2.05.05 | Equity Valuation Adjustments | 401,412 | 1,172,239
2.05.05.01 | Securities Adjustments | 0 | 0
2.05.05.02 | Accumulated Translation Adjustments | 401,412 | 1,172,239
2.05.05.03 | Business Combination Adjustments | 0 | 0
2.05.06 | Retained Earnings/Accumulated Losses | 1,139,366 | 306,908
2.05.07 | Advance for Future Capital Increase | 0 | 0

17

#####

09.01 – CONSOLIDATED STATEMENT OF INCOME (in thousands of reais)

1 - CODE | 2 - DESCRIPTION | 3 - 4/1/2009 to 6/30/2009 | 4 - 1/1/2009 to 6/30/2009 | 5 - 4/1/2008 to 6/30/2008 | 6 - 1/1/2008 to 6/30/2008
3.01 | Gross Revenue from Sales and/or Services | 3,286,842 | 6,479,230 | 4,615,183 | 8,567,064
3.02 | Deductions from Gross Revenue | (795,141) | (1,543,546) | (1,060,470) | (1,982,126)
3.03 | Net Revenue from Sales and/or Services | 2,491,701 | 4,935,684 | 3,554,713 | 6,584,938
3.04 | Cost of Goods Sold and/or Services Rendered | (1,655,939) | (3,298,024) | (1,849,039) | (3,655,789)
3.04.01 | Depreciation and Amortization | (213,111) | (369,593) | (296,448) | (608,335)
3.04.02 | Other | (1,442,828) | (2,928,431) | (1,552,591) | (3,047,454)
3.05 | Gross Profit | 835,762 | 1,637,660 | 1,705,674 | 2,929,149
3.06 | Operating Income/Expenses | (227,163) | (575,325) | (228,604) | (486,364)
3.06.01 | Selling expenses | (208,999) | (384,518) | (174,291) | (335,613)
3.06.01.01 | Depreciation and Amortization | (1,551) | (2,966) | (2,375) | (4,641)
3.06.01.02 | Other | (207,448) | (381,552) | (171,916) | (330,972)
3.06.02 | General and Administrative | (119,047) | (227,764) | (138,471) | (242,909)
3.06.02.01 | Depreciation and Amortization | (5,137) | (12,171) | (10,536) | (21,624)
3.06.02.02 | Other | (113,910) | (215,593) | (127,935) | (221,285)
3.06.03 | Financial | 204,221 | 165,017 | 207,881 | 329,172
3.06.03.01 | Financial Income | 493,844 | 868,082 | 521,579 | 852,935
3.06.03.02 | Financial Expenses | (289,623) | (703,065) | (313,698) | (523,763)
3.06.03.02.01 | Foreign Exchange and Monetary Variation, Net | 311,660 | 363,246 | 279,804 | 404,199
3.06.03.02.02 | Financial Expenses | (601,283) | (1,066,311) | (593,502) | (927,962)
3.06.04 | Other Operating Income | 53,339 | 143,777 | 49,912 | 60,432
3.06.05 | Other Operating Expenses | (156,669) | (271,841) | (115,905) | (181,666)
3.06.06 | Equity Pick-Up | (8) | 4 | (57,730) | (115,780)
3.07 | Operating Income | 608,599 | 1,062,335 | 1,477,070 | 2,442,785

18

#####

1 - CODE | 2 - DESCRIPTION | 3 - 4/1/2009 to 6/30/2009 | 4 - 1/1/2009 to 6/30/2009 | 5 - 4/1/2008 to 6/30/2008 | 6 - 1/1/2008 to 6/30/2008
3.08 | Non-Operating Income | 0 | 0 | 0 | 0
3.08.01 | Income | 0 | 0 | 0 | 0
3.08.02 | Expenses | 0 | 0 | 0 | 0
3.09 | Income before Taxes/Profit Sharing | 608,599 | 1,062,335 | 1,477,070 | 2,442,785
3.10 | Provision for Income and Social Contribution Taxes | (462,770) | (577,423) | (527,621) | (654,619)
3.11 | Deferred Income Tax | 188,913 | 218,657 | 81,505 | 10,091
3.11.01 | Deferred Income Tax | 139,585 | 161,445 | 56,744 | 4,896
3.11.02 | Deferred Social Contribution | 49,328 | 57,212 | 24,761 | 5,195
3.12 | Statutory Profit Sharing/Contributions | 0 | 0 | 0 | 0
3.12.01 | Profit Sharing | 0 | 0 | 0 | 0
3.12.02 | Contributions | 0 | 0 | 0 | 0
3.13 | Reversal of Interest on Shareholders’ Equity | 0 | 0 | 0 | 0
3.14 | Minority Interest | 0 | 0 | 0 | 0
3.15 | Income/Loss for the Period | 334,742 | 703,569 | 1,030,954 | 1,798,257
| OUTSTANDING SHARES, EX-TREASURY (in thousands) | 758,670 | 758,670 | 769,470 | 769,470
| EARNINGS PER SHARE (in reais) | 0.44122 | 0.92737 | 1.33982 | 2.33701
| LOSS PER SHARE (in reais) |  |  |  |

19

#####

10.01 – CONSOLIDATED STATEMENT OF CASH FLOWS – INDIRECT METHOD (in thousands of Reais)

1 - CODE | 2 - DESCRIPTION | 3 - 4/1/2009 to 6/30/2009 | 4 - 1/1/2009 to 6/30/2009 | 5 - 4/1/2008 to 6/30/2008 | 6 - 1/1/2008 to 6/30/2008
4.01 | Net Cash from Operating Activities | (1,509,337) | (1,622,530) | 1,088,991 | 1,628,538
4.01.01 | Cash Generated in the Operations | (281,733) | 166,368 | 1,054,191 | 1,790,341
4.01.01.01 | Net Income for the Period | 334,745 | 703,569 | 1,030,952 | 1,798,256
4.01.01.02 | Provision for Charges on Loans and Financing | 254,805 | 547,077 | 154,870 | 316,866
4.01.01.03 | Depreciation, Depletion and Amortization | 219,798 | 384,730 | 309,359 | 634,600
4.01.01.04 | Income from Write-Off and Disposal of Assets | 8,831 | 9,047 | (713) | 8,067
4.01.01.05 | Income from Corporate Interest | 0 | 0 | 57,707 | 115,757
4.01.01.07 | Deferred Income and Social Contribution Taxes | (188,913) | (218,656) | (81,505) | (10,092)
4.01.01.08 | Provision for Swap/Forward Operations | (209,725) | (407,438) | 150,356 | (437,568)
4.01.01.09 | Provision for Actuarial Liability | (10,731) | (21,283) | (35,953) | (71,616)
4.01.01.10 | Monetary and Exchange Variation | (702,798) | (913,591) | (543,540) | (645,617)
4.01.01.11 | Provision for Contingencies | 25,392 | 53,497 | 1,020 | 30,744
4.01.01.12 | Other Provisions | (13,137) | 29,416 | 11,638 | 50,944
4.01.02 | Variation in Assets and Liabilities | (1,227,604) | (1,788,898) | 34,800 | (161,803)
4.01.02.01 | Accounts Receivable | 123,748 | (35,974) | (183,099) | (198,879)
4.01.02.02 | Inventories | 163,371 | 103,322 | (143,360) | 94,430
4.01.02.04 | Taxes to Offset | (6,984) | 52,134 | (83,650) | (54,081)
4.01.02.05 | Suppliers | (106,368) | (239,710) | 152,838 | (110,530)
4.01.02.06 | Salaries and Social Charges | 24,553 | 12,067 | 28,929 | 23,690
4.01.02.07 | Taxes | 380,282 | 394,643 | 596,352 | 394,127
4.01.02.08 | Translation Exchange Effects | (1,114,852) | (1,164,767) | 0 | 0
4.01.02.09 | Contingent Liabilities | 8,978 | 21,709 | 53,142 | 124,001
4.01.02.10 | Financial Institutions – Interest Rates | (243,010) | (468,236) | (450,119) | (649,555)
4.01.02.11 | Financial Institutions – Swap Operations | (20,875) | (55,333) | 0 | 0
4.01.02.12 | Prepaid Taxes | (397,463) | (397,463) | 0 | 0
4.01.02.13 | Other | (38,984) | (11,290) | 63,767 | 214,994
4.01.03 | Other | 0 | 0 | 0 | 0

20

#####

1 - CODE | 2 - DESCRIPTION | 3 – 4/1/2009 to 6/30/2009 | 4 - 1/1/2009 to 6/30/2009 | 5 - 4/1/2008 to 6/30/2008 | 6 - 1/1/2008 to 6/30/2008
4.02 | Net Cash from Investment Activities | (91,904) | (281,191) | (633,178) | (1,012,336)
4.02.01 | Realization of the Swap Operations | 32,051 | 235,891 | 0 | 0
4.02.02 | Redemption – Equity Swap Margin of Guarantee | 1,089,594 | 1,089,594 | 0 | 0
4.02.03 | Judicial Deposits | (712,810) | (717,425) | (9,401) | (14,422)
4.02.04 | Property, Plant and Equipment | (500,601) | (887,950) | (590,614) | (948,242)
4.02.05 | Deferred Charges | 0 | 0 | (33,163) | (49,672)
4.02.06 | Intangible Assets | (138) | (1,301) | 0 | 0
4.03 | Net Cash from Financing Activities | (1,474,600) | (1,239,511) | (466,385) | (1,303,565)
4.03.01 | Loans and Financing | 698,875 | 1,200,829 | 907,121 | 1,124,493
4.03.04 | Financial Institutions – Principal | (405,386) | (672,249) | (58,822) | (312,534)
4.03.05 | Dividends and Interest on Shareholders’ Equity | (1,768,089) | (1,768,091) | (1,314,684) | (2,115,524)
4.04 | Foreign Exchange Variation on Cash and Cash Equivalents | 0 | 0 | 0 | 0
4.05 | Increase (Decrease) in Cash and Cash Equivalents | (3,075,841) | (3,143,232) | (10,572) | (687,363)
4.05.01 | Opening Balance of Cash and Cash Equivalents | 9,156,722 | 9,224,113 | 1,690,562 | 2,367,353
4.05.02 | Closing Balance of Cash and Cash Equivalents | 6,080,881 | 6,080,881 | 1,679,990 | 1,679,990

21

#####

11.01 – CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY FROM 4/1/2009 TO 6/30/2009 (in R$ thousand)

1 - CODE | 2 – DESCRIPTION | 3 – CAPITAL STOCK | 4 – CAPITAL RESERVES | 5 –REVALUATION RESERVES | 6 – PROFIT RESERVES | 7 – RETAINED EARNINGS/ ACCUMULATED LOSSES | 8 –EQUITY VALUATION ADJUSTMENTS | 9 - TOTAL SHAREHOLDERS' EQUITY
5.01 | Opening Balance | 1,680,947 | 30 | 0 | 3,747,466 | 306,908 | 1,172,239 | 6,907,590
5.02 | Prior Year Adjustments | 0 | 0 | 0 | 0 | 0 | 0 | 0
5.03 | Adjusted Balance | 1,680,947 | 30 | 0 | 3,747,466 | 306,908 | 1,172,239 | 6,907,590
5.04 | Income/Loss for the Period | 0 | 0 | 0 | 0 | 334,742 | 0 | 334,742
5.05 | Distributions | 0 | 0 | 0 | 0 | (110,017) | 0 | (110,017)
5.05.01 | Dividends | 0 | 0 | 0 | 0 | 0 | 0 | 0
5.05.02 | Interest on Shareholders’ Equity | 0 | 0 | 0 | 0 | (110,017) | 0 | (110,017)
5.05.03 | Other Distributions | 0 | 0 | 0 | 0 | 0 | 0 | 0
5.06 | Profit Reserve Realization | 0 | 0 | 0 | 0 | 0 | 0 | 0
5.07 | Equity Valuation Adjustments | 0 | 0 | 0 | 0 | 651,942 | (770,827) | (118,885)
5.07.01 | Securities Adjustments | 0 | 0 | 0 | 0 | 0 | 0 | 0
5.07.02 | Accumulated Translation Adjustments | 0 | 0 | 0 | 0 | 651,942 | (770,827) | (118,885)
5.07.03 | Business Combination Adjustments | 0 | 0 | 0 | 0 | 0 | 0 | 0
5.08 | Increase/Reduction in Capital Stock | 0 | 0 | 0 | 0 | 0 | 0 | 0
5.09 | Recording/Realization of Capital Reserves | 0 | 0 | 0 | 0 | 0 | 0 | 0
5.10 | Treasury Shares | 0 | 0 | 0 | 0 | 0 | 0 | 0
5.11 | Other Capital Transactions | 0 | 0 | 0 | 0 | 0 | 0 | 0
5.12 | Other | 0 | 0 | 0 | (41,680) | (44,209) | 0 | (85,889)
5.12.01 | Unrealized Income/Losses | 0 | 0 | 0 | (41,680) | (44,209) | 0 | (85,889)
5.13 | Closing Balance | 1,680,947 | 30 | 0 | 3,705,786 | 1,139,366 | 401,412 | 6,927,541

22

#####

11.02 – CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY FROM 1/1/2009 TO 6/30/2009 (in R$ thousand)

1 - CODE | 2 – DESCRIPTION | 3 – CAPITAL STOCK | 4 – CAPITAL RESERVES | 5 –REVALUATION RESERVES | 6 – PROFIT RESERVES | 7 – RETAINED EARNINGS/ ACCUMULATED LOSSES | 8 –EQUITY VALUATION ADJUSTMENTS | 9 - TOTAL SHAREHOLDERS' EQUITY
5.01 | Opening Balance | 1,680,947 | 30 | 0 | 3,682,864 | 0 | 1,298,748 | 6,662,589
5.02 | Prior Year Adjustments | 0 | 0 | 0 | 0 | 0 | 0 | 0
5.03 | Adjusted Balance | 1,680,947 | 30 | 0 | 3,682,864 | 0 | 1,298,748 | 6,662,589
5.04 | Income/Loss for the Period | 0 | 0 | 0 | 0 | 703,569 | 0 | 703,569
5.05 | Distributions | 0 | 0 | 0 | 0 | (193,223) | 0 | (193,223)
5.05.01 | Dividends | 0 | 0 | 0 | 0 | 0 | 0 | 0
5.05.02 | Interest on Shareholders’ Equity | 0 | 0 | 0 | 0 | (193,223) | 0 | (193,223)
5.05.03 | Other Distributions | 0 | 0 | 0 | 0 | 0 | 0 | 0
5.06 | Profit Reserve Realization | 0 | 0 | 0 | 0 | 0 | 0 | 0
5.07 | Equity Valuation Adjustments | 0 | 0 | 0 | 0 | 651,942 | (897,336) | (245,394)
5.07.01 | Securities Adjustments | 0 | 0 | 0 | 0 | 0 | 0 | 0
5.07.02 | Accumulated Translation Adjustments | 0 | 0 | 0 | 0 | 651,942 | (897,336) | (245,394)
5.07.03 | Business Combination Adjustments | 0 | 0 | 0 | 0 | 0 | 0 | 0
5.08 | Increase/Reduction in Capital Stock | 0 | 0 | 0 | 0 | 0 | 0 | 0
5.09 | Recording/Realization of Capital Reserves | 0 | 0 | 0 | 0 | 0 | 0 | 0
5.10 | Treasury Shares | 0 | 0 | 0 | 0 | 0 | 0 | 0
5.11 | Other Capital Transactions | 0 | 0 | 0 | 0 | 0 | 0 | 0
5.12 | Other | 0 | 0 | 0 | 22,922 | (22,922) | 0 | 0
5.12.01 | Unrealized Income/Losses | 0 | 0 | 0 | 22,922 | (22,922) | 0 | 0
5.13 | Closing Balance | 1,680,947 | 30 | 0 | 3,705,786 | 1,139,366 | 401,412 | 6,927,541

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00403-0 | COMPANHIA SIDERÚRGICA NACIONAL | 33.042.730/0001-04
06.01 – NOTES TO THE FINANCIAL STATEMENTS

(In thousands of Reais, unless otherwise stated)

1. OPERATIONS

The main activities of Companhia Siderúrgica Nacional (“CSN” or “Company”) are the production of flat steel products and its main industrial complex is the Presidente Vargas Steelworks (“UPV”) located in the city of Volta Redonda, State of Rio de Janeiro and iron ore production, where its main operation is developed in the city of Congonhas, state of Minas Gerais.

CSN is engaged in the mining of iron ore, limestone and dolomite in the branches in the State of Minas Gerais and tin in the State of Rondônia, by means of the subsidiary Estanho de Rondônia S.A. (“ERSA”), in order to meet the needs of UPV and the surplus raw materials are traded with subsidiaries and third parties. In order to provide greater synergy to the processes, the Company also maintains strategic investments in mining companies, railroad, electricity, and cement. In addition, the Company is establishing a long steel plant in Volta Redonda.

The Company, aiming to get closer to clients and exploit markets on a global level, has a steel distributor, metal packaging plants, in addition to a galvanized steel plant in the south and another in the southeast of Brazil to meet the demand of the home appliance and automotive industry, respectively. Abroad, the Company has a steel rolling mill in Portugal and another mill in the United States.

The Company’s shares are listed on the Stock Exchanges in Brazil (BOVESPA) and in the United States (NYSE).

2. PRESENTATION OF THE QUARTERLY INFORMATION

The individual (Company) and consolidated quarterly information was prepared in accordance with the accounting practices adopted in Brazil, based on the Brazilian Corporate Law, pronouncements issued by the Committee for Accounting Pronouncements – CPC and rules issued by the Brazilian Securities and Exchange Commission (“CVM”).

In compliance with Technical Pronouncement - CPC 02, approved by the CVM Resolution 534, the Company integrated the investments abroad which are not characterized as independent entities into the Parent Company’s quarterly information.

The Company, in order to enhance the disclosures to the market, presents the following supplementary information on the business segments, comprising the Parent Company and the consolidated financial information:

“A distinguishable component of the Company is a segment, goal of which is the manufacturing of products, the rendering of services, or the rendering of products and services within a particular economic environment, which is subject to risks and rewards that are different from other segments”.

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The quarterly information includes the changes brought by Law 11,638/07 and Provisional Measure 449/08. The Company presents below a table with the effects related to the application of the new rules:

|  | 06/30/08
|  | Consolidated |  | Parent Company
|  | Balance disclosed at 6/30/08 |  | Adjustments of Law 11,638/07 and MP 449/08 |  |  |  | Adjusted balance |  | Balance disclosed at 6/30/08 |  | Adjustments of Law 11,638/07 and MP 449/08 |  |  |  | Adjusted balance
Shareholders' equity |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Capital |  | 1,680,947 |  |  |  |  |  | 1,680,947 |  | 1,680,947 |  |  |  |  |  | 1,680,947
Other |  | 1,312,384 |  | (297,759) |  | (2) |  | 1,014,625 |  | 1,533,190 |  | (417,748) |  | (2) |  | 1,115,442
Equity valuation adjustments |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Investees foreign exchange variation |  |  |  | (457,794) |  | (9) |  | (457,794) |  |  |  | (457,794) |  | (9) |  | (457,794)
Equity valuation adjustments |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Reversal of revaluation reserve |  | 4,438,093 |  | (4,438,093) |  | (1)+(3) |  |  |  | 4,438,093 |  | (4,438,093) |  | (1)+(3) |  |
Reversal of exchange rate variation - Intercompany pre-payment |  |  |  | 229,430 |  |  |  | 229,430 |  |  |  |  |  |  |  |
Reversal of intercompany loans variation |  |  |  | 115,163 |  |  |  | 115,163 |  |  |  |  |  |  |  |
Reversal of loan agreement exchange variation |  |  |  | 44,092 |  |  |  | 44,092 |  |  |  |  |  |  |  |
Provision for deferred income and social contribution taxes on equity valuation adjustments |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  |  | (142,784) |  | (8) |  | (142,784) |  |  |  |  |  |  |  |
Retained earnings (or accumulated losses) |  | 1,798,258 |  | 424,651 |  |  |  | 2,222,909 |  | 1,686,495 |  | 840,878 |  |  |  | 2,527,373
Reversal of realization of equity revaluation reserve |  |  |  | 225,515 |  |  |  | 225,515 |  | (135,547) |  | 349,276 |  |  |  | 213,729
Reversal of income, social contribution taxes on portion of revaluation reserve |  |  |  | (76,757) |  |  |  | (76,757) |  |  |  | (72,750) |  |  |  | (72,750)
Deferred assets write-off related to 2007 balance |  |  |  | (22,302) |  | (6) |  | (22,302) |  |  |  | (22,302) |  | (6) |  | (22,302)
Income for the year |  | 1,798,258 |  | 298,195 |  |  |  | 2,096,453 |  | 1,822,042 |  | 586,654 |  |  |  | 2,408,697
TOTAL SHAREHOLDERS' EQUITY |  | 9,229,682 |  | (4,523,094) |  |  |  | 4,706,588 |  | 9,338,725 |  | (4,472,757) |  |  |  | 4,865,968
NET REVENUE |  | 6,584,938 |  |  |  |  |  | 6,584,938 |  | 4,910,882 |  |  |  |  |  | 4,910,882
Cost of goods sold and services rendered |  | (3,655,790) |  | 217,668 |  | (2) |  | (3,438,122) |  | (2,728,452) |  | 206,571 |  | (2) |  | (2,521,881)
GROSS OPERATING REVENUE |  | 2,929,148 |  | 217,668 |  |  |  | 3,146,816 |  | 2,182,430 |  | 206,571 |  |  |  | 2,389,001
OPERATING REVENUES AND EXPENSES |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Selling expenses |  | (335,612) |  | 1,414 |  | (2) |  | (334,198) |  | (223,930) |  | 1,273 |  | (2) |  | (222,657)
General and administrative expenses |  | (242,909) |  | (26,436) |  | (2) |  | (269,345) |  | (158,515) |  | (11,586) |  | (2) |  | (170,101)
Other operating expenses (revenues) |  | (237,013) |  | (29,587) |  | (2)+(5) |  | (266,600) |  | 592,251 |  | 9,996 |  | (2)+(5) |  | 602,247
OPERATING INCOME BEFORE FINANCIAL EFFECTS |  | 2,113,614 |  | 163,059 |  |  |  | 2,276,673 |  | 2,392,236 |  | 206,254 |  |  |  | 2,598,490
Financial income and expenses |  | (81,995) |  |  |  |  |  | (81,995) |  | (657,243) |  | (84,847) |  |  |  | (742,090)
Foreign exchange and monetary variations, net |  | 411,166 |  | 69,109 |  | (7) |  | 480,275 |  | 632,501 |  | 537,998 |  | (7) |  | 1,170,499
INCOME BEFORE INCOME AND SOCIAL |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
CONTRIBUTION TAXES |  | 2,442,785 |  | 232,168 |  |  |  | 2,674,953 |  | 2,367,494 |  | 659,405 |  |  |  | 3,026,899
Current income and social contribution taxes |  | (654,619) |  | 142,784 |  |  |  | (511,835) |  | (553,508) |  |  |  |  |  | (553,508)
Deferred income and social contribution taxes |  | 10,092 |  | (76,757) |  | (4) |  | (66,665) |  | 8,056 |  | (72,750) |  | (4) |  | (64,694)
NET INCOME FOR THE PERIOD |  | 1,798,258 |  | 298,195 |  |  |  | 2,096,453 |  | 1,822,042 |  | 586,655 |  |  |  | 2,408,697

(1) Reversal of the revaluation
(2) Portion related to the reversal of the depreciation of the revaluation
(3) Income and social contribution tax reversal related to the revaluation
(4) Income and social contribution tax reversal related to the depreciation of the revaluation
(5) Write-off of revaluated assets
(6) Write-off of deferred assets referring to 2007 pursuant to law 11638
(7) Exchange rate variation of loans and financing from intercompany operations: Fixed rate notes, intercompany, prepayment and loan
(8) Income tax (IR) and social contribution on net income (CSLL) related to exchange rate variation of loans and financing from intercompany operations: Fixed rate notes, intercompany, prepayment and loan, revaluation depreciation.
(9) Equity valuation adjustment referring to equity pick-up effects.

3. MAIN ACCOUNTING PRACTICES

(a) Statement of income

The results of operations are recognized on the accrual basis and the revenue from the sales of products is recognized when the Company no longer controls or holds any responsibility for the property and all risks and rewards have been transferred to the buyer. Revenue from services rendered is recognized in proportion to the stage of completion of the service.

Revenue is not recognized if Management cannot measure its value precisely and if there is no significant certainty as to the realization of the economic benefit of the sale.

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(b) Current assets and noncurrent assets

• Cash and cash equivalents

These are represented by immediate liquidity amounts, redeemable in up to 90 days from the balance sheet dates and with an insignificant risk of change in their market value. Financial assets included in this group are measured at fair value through the statement of income.

• Trade accounts receivable

Trade accounts receivable are recorded at the invoiced amount, including the respective taxes and ancillary expenses and credits from clients in foreign currency are corrected at the exchange rate as of the date of the quarterly information. The allowance for doubtful accounts was recorded in an amount considered adequate to support possible losses and Management’s assessment takes into account the client’s history, the financial situation and the assessment of our legal advisors regarding the receipt of these credits for the recording of this provision.

• Inventories

Inventories are stated at their average cost of acquisition or production and imports in transit are recorded at their cost of acquisition, not exceeding their market or realization values. Provisions for losses or obsolescence are recorded whenever Management considers it appropriate.

• Investments

Investments in subsidiaries and jointly-owned subsidiaries are recorded using the equity method of accounting and recognized in the statement of income for the period as operating income (or expenses). Other investments are recorded and kept at cost.

When necessary, the accounting practices of the subsidiaries and jointly-owned subsidiaries are changed to ensure criteria consistency and uniformity with the practices adopted by the Company.

Accounting records of the dependent subsidiaries were consolidated to the parent Company’s quarterly statements, as established in the CPC Pronouncement 02.

• Property, plant and equipment

These are recorded at acquisition, formation or construction cost. Depreciation is calculated through the straight-line method, based on the remaining economic useful lives of the assets, and depletion of the Casa de Pedra mine is calculated based on the quantity of iron ore extracted. Loans costs related to funds raised for specific construction in progress are capitalized until the constructions are concluded.

Law 11,638/07, MP 449/08 and pronouncement CPC 01 require that the recoverability valuation of all items comprising this subgroup be carried out and if there is evidence of loss, as no item should remain recorded under property, plant and equipment at an amount higher than its recoverable value, then there may be the need of the performance of a recoverability valuation of this asset. The Company evaluated its property, plant and equipment items and did not identify any loss to be recorded.

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• Intangible assets

Intangible assets comprise of assets acquired from third parties, including by means of business combinations, and/or those internally generated by the Company.

These assets are recorded at the acquisition or formation cost, less amortization calculated through the straight-line method based on exploration or recovery terms.

Intangible assets with indefinite useful lives, as well as goodwill for expected future profitability, will no longer be amortized as of January 1, 2009, and their recoverable value will be tested on a yearly basis, or whenever it is deemed necessary.

• Deferred charges

The Company maintains in this group just the remaining balances of deferred pre-operating expenses, which will be amortized in accordance with the criteria prior to Law 11,638/07 due to the option offered by technical pronouncement CPC - 13 (Initial adoption of Law 11,638/07) and Provisional Measure 449/08.

• Impairment

The recoverable value of intangible assets and deferred charges are tested on a yearly basis or, whenever significant events or changes in circumstances indicate the book value may not be recovered.

In order to test the recoverability of an individual asset or a group of assets, the Company analyzes supporting evidence that their book values will not be recoverable and, should these evidences be confirmed and the Company identifies an impairment possibility, Management compares the residual book value of this group of assets with their recoverable value and records them.

• Other current and noncurrent assets

Stated at their realization value, including, when applicable, the yields earned up to the date of the quarterly information or, in the case of prepaid expenses, at cost.

(c) Current and noncurrent liabilities

These are stated at their known or calculable values, plus, when applicable, the corresponding charges and monetary and foreign exchange variations incurred up to the date of the quarterly information.

• Employees’ benefits

In compliance with Resolution 371/00, issued by the CVM, the Company has been recording the respective actuarial liabilities as from January 1, 2002, in accordance with the aforementioned reported resolution and based on independent actuary studies, which are carried out annually .

• Income and social contribution taxes

Income tax is calculated at rates of 15% plus an additional of 10% on taxable basis and social contribution on net income at a 9% rate on the taxable basis. In the calculation of taxes, the offsetting of the tax loss carryforward and negative basis of social contribution is also considered, and it is limited to 30% of the taxable income.

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The deferred tax assets deriving from tax loss carry forwards and negative basis of social contribution on net income were recorded in compliance with the CVM Resolution 371/02 and took into consideration the history of profitability and the expectations of generating future taxable income, based on a technical study.

(d) Derivative financial instruments

The financial instrument balances, recorded in accordance with the CPCTechnical Pronouncement 14, which was approved by the CVM Resolution 565/08, are classified and recorded at fair value and gains and losses are recognized in the statement of income by accrual period.

(e) Other derivative financial instruments

The Company maintains a financial instrument called total return equity swap, purpose of which is to increase the return on financial assets. This instrument is recorded at fair value and gains and losses are recognized in the statement of income by accrual period.

The Company recorded this instrument in other accounts payable, and its margin of guarantee in other accounts receivable.

(f) Nonderivatives financial instruments

Financial instruments are initially recognized at fair value, whereas those financial instruments not classified at fair value are recognized plus the transaction costs that are directly attributable to them. Subsequently to the initial recognition the financial instruments are measured as follows:

• Financial asset or liability measured at fair value through the income

A financial instrument is classified as measured at fair value through the income if it is held for trading. These instruments are measured at fair value and the subsequent fluctuation is recognized in the income for the period.

• Loans and receivable

These are measured at the amortized cost and by using the effective interest rate method, less impairment loss.

(g) Treasury Shares

As established by the CVM Instruction 10 of February 14, 1980, shares held in treasury are recorded at cost of acquisition, and the market value of these shares is calculated based on the average stock exchange quotation on the last day of the period.

(h) Accounting Estimates

The preparation of the quarterly information, in accordance with the accounting practices adopted in Brazil, requires that Management uses its judgment in determining and recording the accounting estimates, such as: allowance for doubtful accounts, provision for inventory losses, provisions for labor, civil, tax, environmental and social security liabilities, depreciation, amortization, depletion, provision for impairment, deferred taxes, financial instruments and employees’ benefits. The settlement of the transactions involving these estimates may result in amounts different from those estimated, due to lack of precision inherent to the process of their determination. The Company periodically reviews the estimates and assumptions.

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4. CONSOLIDATED QUARTERLY INFORMATION

The accounting practices reflect the changes introduced by the new pronouncements and were treated uniformly in all the consolidated companies.

The consolidated quarterly information for the periods ended June 30, 2009 and March 31, 2009, include the following direct and indirect subsidiaries and jointly-owned subsidiaries:

|  | Ownership interest (%) |  |
Companies |  | 6/30/2009 |  | 3/31/2009 |  | Main activities
Direct investment: full consolidation |  |  |  |  |  |
CSN Energy |  | 100.00 |  | 100.00 |  | Equity interest
CSN Export |  | 100.00 |  | 100.00 |  | Financial operations, trading of products and equity interest
CSN Overseas |  | 100.00 |  | 100.00 |  | Financial operations and equity interest
CSN Panama |  | 100.00 |  | 100.00 |  | Financial operations and equity interest
CSN Steel |  | 100.00 |  | 100.00 |  | Financial operations and equity interest
Arame Corporation |  | 100.00 |  | 100.00 |  | Dorment Company
TdBB S.A |  | 100.00 |  | 100.00 |  | Dorment Company
International Charitable Corporation |  | 100.00 |  | 100.00 |  | Dorment Company
GalvaSud |  | 99.99 |  | 99.99 |  | Steel industry
Sepetiba Tecon |  | 99.99 |  | 99.99 |  | Maritime port services
Minas Pelotização |  | 99.99 |  | 99.99 |  | Mining and equity interest
CSN Aços Longos |  | 99.99 |  | 99.99 |  | Steel and/or metal products industry and trade
Itaguaí Logística (*) |  | 99.99 |  | 99.99 |  | Logistics
Estanho de Rondônia - ERSA |  | 99.99 |  | 99.99 |  | Mining
Cia Metalic Nordeste |  | 99.99 |  | 99.99 |  | Packaging production
Companhia Metalúrgica Prada |  | 99.99 |  | 99.99 |  | Packaging production
CSN Cimentos |  | 99.99 |  | 99.99 |  | Cement production
Inal Nordeste |  | 99.99 |  | 99.99 |  | Steel products service center
CSN Gestão de Recursos Financeiros |  | 99.99 |  | 99.99 |  | Dorment Company
Congonhas Minérios |  | 99.99 |  | 99.99 |  | Mining and equity interest
CSN Energia |  | 99.90 |  | 99.90 |  | Electricity trading
Direct investment: proportional consolidation |  |  |  |  |  |
Transnordestina Logística |  | 81.60 |  | 84.50 |  | Railroad transport
Nacional Minérios |  | 59.99 |  | 59.99 |  | Mining and equity interest
Itá Energética |  | 48.75 |  | 48.75 |  | Electricity generation
MRS Logística |  | 27.27 |  | 27.27 |  | Railroad transport
Indirect investment: full consolidation |  |  |  |  |  |
CSN Aceros |  | 100.00 |  | 100.00 |  | Equity interest
CSN Cayman |  | 100.00 |  | 100.00 |  | Financial operations, trading of products and equity interest
CSN Iron |  | 100.00 |  | 100.00 |  | Financial operations
Companhia Siderúrgica Nacional LLC |  | 100.00 |  | 100.00 |  | Steel industry
CSN Holdings Corp |  | 100.00 |  | 100.00 |  | Equity interest
Companhia Siderúrgica Nacional Partner LLC |  | 100.00 |  | 100.00 |  | Equity interest
Energy I |  | 100.00 |  | 100.00 |  | Equity interest
CSN Madeira |  | 100.00 |  | 100.00 |  | Financial operations, trading of products and equity interest
Cinnabar |  | 100.00 |  | 100.00 |  | Financial operations and equity interest
Hickory |  | 100.00 |  | 100.00 |  | Financial operations and trading of products
Lusosider Projectos Siderúrgicos |  | 100.00 |  | 100.00 |  | Equity interest
CSN Acquisitions |  | 100.00 |  | 100.00 |  | Financial operations and equity interest
CSN Finance (Netherlands) |  | 100.00 |  | 100.00 |  | Financial operations and equity interest
CSN Finance |  | 100.00 |  | 100.00 |  | Financial operations and equity interest
CSN Holdings |  | 100.00 |  | 100.00 |  | Financial operations and equity interest
Itamambuca Participações |  | 100.00 |  | 99.93 |  | Mining and equity interest
Lusosider Aços Planos |  | 99.94 |  | 99.94 |  | Steel industry and equity interest
CSN Energia |  | 0.10 |  | 0.10 |  | Electricity trading
Indirect investment: proportional consolidation |  |  |  |  |  |
NMSA Madeira |  | 60.00 |  | 60.00 |  | Equity interest and trading of products and mining
Inversiones CSN Espanha |  | 60.00 |  | 60.00 |  | Financial operations and equity interest
Pelotização Nacional |  | 59.99 |  | 59.99 |  | Mining and equity interest
MG Minérios |  | 59.99 |  | 59.99 |  | Mining and equity interest
MRS Logística |  | 6.00 |  | 6.00 |  | Railroad transport

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(*) As of March 31, 2009, Itaguaí Logística was named Nacional Siderurgia.

The following consolidation procedures were adopted in the preparation of the consolidated quarterly information:

• Elimination of the balances of asset and liability accounts between consolidated companies;
• Elimination of the balances of investments and shareholders’ equity between consolidated companies;
• Elimination of balances of income and expenses and unrealized income deriving from consolidated intercompany transactions;
• Presentation of income and social contribution taxes on the unearned income as deferred taxes in the consolidated quarterly information; and
• Reclassification of exchange rate variations of monetary items with net foreign investment characteristics from financial income to shareholders’ equity.

Pursuant to the CVM Instruction 408 of August 18, 2004, the Company consolidates the quarterly information of the exclusive investment funds Diplic and Mugen.

The base date for the subsidiaries’ and jointly-owned subsidiaries’ quarterly information coincides with that of the Parent Company.

The reconciliation between shareholders’ equity and net income for the period of the Parent Company and consolidated is as follows:

|  | Shareholders' equity |  | Net income for the year
|  | 6/30/2009 |  | 3/31/2009 |  | 6/30/2009 |  | 6/30/2008
Parent company |  | 6,990,512 |  | 6,928,879 |  | 1,332,590 |  | 1,822,041
Elimination of income in inventories |  | (72,432) |  | (49,209) |  | 13,460 |  | (23,784)
Exchange rate variation adjustments- CPC02 |  |  |  |  |  | (651,942) |  |
Other adjustments |  | 9,461 |  | 27,921 |  | 9,461 |  |
Consolidated |  | 6,927,541 |  | 6,907,591 |  | 703,569 |  | 1,798,257

Additionally, subsidiaries abroad which are not characterized as independent entities were included in the parent company’s quarterly information, pursuant to technical pronouncement CPC - 02, approved by the CVM Resolution 534/08:

|  | Ownership interest (%) |  |
Companies |  | 6/30/2009 |  | 3/31/2009 |  | Main activities
Branches |  |  |  |  |  |
CSN Islands VII |  | 100.00 |  | 100.00 |  | Financial operations
CSN Islands VIII |  | 100.00 |  | 100.00 |  | Financial operations
CSN Islands IX |  | 100.00 |  | 100.00 |  | Financial operations
CSN Islands X |  | 100.00 |  | 100.00 |  | Financial operations
CSN Islands XI |  | 100.00 |  | 100.00 |  | Financial operations
Tangua |  | 100.00 |  | 100.00 |  | Financial operations
International Investment Fund |  | 100.00 |  | 100.00 |  | Equity interest

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5. RELATED PARTIES TRANSACTIONS

a) Transactions with Parent Company

Vicunha Siderurgia S.A. is a holding company whose purpose is to hold interest in other companies. It is the Company’s main shareholder, with a 45.98% interest in the voting capital.

Vicunha Siderurgia’s corporate structure is as follows (unrevised information):

Rio Purus Participações S.A. – holds 60% of National Steel and 59.99% of Vicunha Steel S.A.
CFL Participações S.A. – holds 40% of National Steel and 39.99% of Vicunha Steel S.A.
National Steel – holds 33.04% of Vicunha Aços
Vicunha Steel – holds 66.96% of Vicunha Aços
Vicunha Aços – holds 99.99% of Vicunha Siderurgia

CSN recorded interest on shareholders’ equity for the period. In addition, the Company paid dividends and interest on shareholders’ equity for Vicunha Siderurgia in the amounts indicated in the table below, considering Vicunha Siderurgia percentage interest in CSN on the closing date of this quarterly information.

Parent company |  | Proposed dividends |  | Proposed interest on shareholders' equity |  | Dividends paid in the period |  | Interest on shareholders' equity paid in the period
Total at 6/30/2009 |  |  |  | 88,850 |  | 689,747 |  | 123,421
Total at 3/31/2009 |  |  |  | 38,261 |  |  |  |
Total at 12/31/2008 |  | 689,947 |  | 123,421 |  | 938,223 |  | 93,210

b) Transactions with jointly-owned subsidiaries

The Company holds interest in jointly-owned subsidiaries in the strategic areas of mining, logistics and power generation. The characteristics, goals and transactions with these companies are stated as follows:

• Assets

Companies |  | Accounts receivable |  | Dividends receivable |  | Loans / current accounts(*) |  | Advance for future capital increase |  | Total
Nacional Minérios |  | 75,927 |  |  |  | 1,238,946 |  |  |  | 1,314,873
MRS Logística |  | 717 |  | 50,147 |  |  |  |  |  | 50,864
Transnordestina |  |  |  |  |  |  |  | 37,138 |  | 37,138
Total at 6/30/2009 |  | 76,644 |  | 50,147 |  | 1,238,946 |  | 37,138 |  | 1,402,875
Total at 3/31/2009 |  | 89,094 |  | 193,230 |  | 1,216,197 |  | 89,958 |  | 1,588,479

(*) Loan agreement of US$500,000 thousand, starting on January 28, 2009, maturing on January 31, 2012 and with semiannual interest rate of 12% p.a..

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• Liabilities and shareholders’ equity

|  | Liabilities |  | Shareholders' equity
Companies |  | Advance from clients |  | Loans / Current accounts |  | Other |  | Total |  | Equity Valuation Adjustments - Effects |  | Total
Nacional Minérios |  | 7,516,096 |  | 3,628 |  | 1,687 |  | 7,521,411 |  | 6,059 |  | 6,059
MRS Logística |  |  |  | 2,142 |  | 72,948 |  | 75,090 |  |  |  |
Itá Energética |  |  |  |  |  | 11,715 |  | 11,715 |  |  |  |
Total at 6/30/2009 |  | 7,516,096 |  | 5,770 |  | 86,350 |  | 7,608,216 |  | 6,059 |  | 6,059
Total at 3/31/2009 |  | 7,414,098 |  | 2,142 |  | 138,594 |  | 7,554,834 |  | 49,301 |  | 49,301

Namisa: The advance from clients with the jointly-owned subsidiary Nacional Minérios S.A. is related to the contractual obligation of iron ore supply and port services by CSN. The contract has a 12.5% p.a. interest rate and maturity forecast for June 2042.

The valuation adjustment effects refer to an investee abroad whose functional currency is different from the real.

MRS: in other accounts payable from MRS Logística we recorded the amount provisioned by CSN to cover take-or-pay contractual expenses related to the rail transportation contract, agreed upon normal price conditions practiced in this market.

Itasa: it is related to the electric power supply billed under normal market conditions of the Brazilian energy market, ruled by Electric Power Trade Chamber.

• Income

|  | Revenues |  | Expenses
Companies |  | Products and services |  | Interest and monetary and exchange variations |  | Total |  | Products and services |  | Interest |  | Total
Nacional Minérios |  | 178,549 |  | 53,092 |  | 231,641 |  | 52,166 |  | 444,074 |  | 496,240
MRS Logística |  | 104 |  |  |  | 104 |  | 213,306 |  |  |  | 213,306
Itá Energética |  |  |  |  |  |  |  | 70,139 |  |  |  | 70,139
Total at 6/30/2009 |  | 178,653 |  | 53,092 |  | 231,745 |  | 335,611 |  | 444,074 |  | 779,685
Total at 6/30/2008 |  | 47,108 |  | 7,795 |  | 54,903 |  | 291,510 |  |  |  | 291,510

• Nacional Minérios S.A. (“Namisa”)

Its main purpose is to extract and sell own and third-party iron ore. The main operations are developed in the cities of Congonhas, Ouro Preto, Itabirito and Rio Acima in the state of Minas Gerais, and in Itaguaí, state of Rio de Janeiro. CSN maintains iron ore supply and port service provision transactions, in addition to maintaining operations related to administrative, operating and financial support.

• Transnordestina Logística S.A.

Its main purpose is to exploit the public rail cargo transportation service concession and the development in the Northeast Network. The Company does not maintain operating transactions with the subsidiary, and the operations between the parties are related to financial support to projects and operations of the subsidiary.

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• MRS Logística S.A.

Its purpose is to exploit and develop the public rail cargo transportation service in the Southeast Network, which serves the Rio de Janeiro-São Paulo-Belo Horizonte stretch. MRS provides rail cargo transportation services for the supply and outflow of the CSN raw materials and finished products.

• Itá Energética S.A. – Itasa

Itasa holds an interest in the Itá Hydroelectric Power Plant consortium and the operations between the parties are related to contracting electric power supply for the CSN operations.

c) Transactions with subsidiaries and special purpose entities (exclusive investment funds)

• Assets

|  | Accounts |  |  |  |  |  |  |  |  |  |
|  | receivable |  | Marketable |  | Loans/current |  | Dividends |  | Advance for future |  |
Companies |  | (***) |  | securities (**) |  | accounts(*) |  | receivable |  | capital increase |  | Total
Cinnabar |  |  |  |  |  | 1,864,055 |  |  |  |  |  | 1,864,055
CSN Madeira |  | 355,944 |  |  |  | 422,790 |  |  |  |  |  | 778,734
Exclusive investment funds |  |  |  | 659,505 |  |  |  |  |  |  |  | 659,505
CSN Cimentos |  | 380 |  |  |  | 939 |  |  |  |  |  | 1,319
CSN Export |  | 275,616 |  |  |  |  |  |  |  |  |  | 275,616
CSN Aços Longos |  |  |  |  |  |  |  |  |  | 174,634 |  | 174,634
Prada |  | 81,062 |  |  |  | 2,517 |  |  |  |  |  | 83,579
GalvaSud |  | 57,790 |  |  |  |  |  |  |  |  |  | 57,790
NMSA Madeira |  | 40,399 |  |  |  |  |  |  |  |  |  | 40,399
Inal Nordeste |  | 12,049 |  |  |  |  |  |  |  |  |  | 12,049
CSN Energia |  |  |  |  |  |  |  | 6,007 |  |  |  | 6,007
Estanho Rondônia |  |  |  |  |  |  |  | 4,958 |  |  |  | 4,958
Cia. Metalic Nordeste |  | 3,864 |  |  |  |  |  |  |  |  |  | 3,864
Sepetiba Tecon |  | 197 |  |  |  | 455 |  |  |  |  |  | 652
Aceros |  |  |  |  |  | 49 |  |  |  |  |  | 49
Total at 6/30/2009 |  | 827,301 |  | 659,505 |  | 2,290,805 |  | 10,965 |  | 174,634 |  | 3,963,210
Total at 3/31/2009 |  | 947,024 |  | 1,651,767 |  | 2,692,767 |  | 115,314 |  | 436,157 |  | 5,843,029

(*) | Cinnabar – Contract in US$; interest ranging from 5.58% p.a. to 10.42% p.a.; final maturity in January 2015.
| CSN Madeira - Contract in US$; interest ranging from 9.50% to 10.88 % p.a.; final maturity in January 2015.
(**) | Financial investments in exclusive investment funds managed by Banco Pactual are backed by Brazilian government bonds and have daily liquidity.
(***) | Accounts receivable derive from sales operations of products and services among the parent company and the subsidiaries.

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• Liabilities

|  | Loans and financing |  | Accounts payable |  |
|  |  |  |  |  | Loans and |  |  |  |  |  |
|  |  |  | Fixed Rate |  | Intercompany |  | Loans (3) / current |  |  |  |
Companies |  | Pre-payment (1) |  | Notes(2) |  | Bonds (2) |  | accounts |  | Other |  | Total
Cinnabar |  | 1,588,375 |  | 731,761 |  | 142,782 |  | 299,700 |  |  |  | 2,762,618
CSN Iron |  | 95,228 |  |  |  | 1,187,706 |  |  |  |  |  | 1,282,934
CSN Madeira |  | 380,045 |  |  |  | 20,234 |  | 343,860 |  |  |  | 744,139
CSN Export |  | 678,611 |  |  |  |  |  | 11,639 |  |  |  | 690,250
GalvaSud |  |  |  |  |  |  |  |  |  | 183,194 |  | 183,194
Aceros |  |  |  |  |  |  |  | 19,619 |  |  |  | 19,619
Ersa |  |  |  |  |  |  |  |  |  | 5,235 |  | 5,235
Other(*) |  |  |  |  |  |  |  |  |  | 1,005 |  | 1,005
Total at 6/30/2009 |  | 2,742,259 |  | 731,761 |  | 1,350,722 |  | 674,818 |  | 189,434 |  | 5,688,994
Total at 3/31/2009 |  | 3,295,684 |  | 843,006 |  | 1,632,472 |  | 814,568 |  | 6,711 |  | 6,592,441

The conditions of the transactions with these subsidiaries are shown as follows:

(1) | Contracts in US$ - CSN Export: interest from 4.00% to 7.43% p.a. with maturity in May 2015.
| Contracts 33in US$ - Cinnabar: interest from 7.00% to 10.0% p.a. with maturity in June 2018.
| Contracts in US$ - CSN Madeira: interest of 7.25% p.a. with maturity in September 2016.
| Contracts in US$ - CSN Iron: interest of 7.00% p.a. with maturity in January 2012.
(2) | Contracts in US$ - CSN Iron: Intercompany Bonds: interest of 9.125% p.a. with maturity on June 1, 2047.
| Contracts in YEN - Cinnabar: interest of 1.5% p.a. with maturity on July 13, 2010.
| Contracts in R$ - Cinnabar (part): IGPM + 6% p.a. with indefinite maturity.
| Contracts in US$ - CSN Madeira (part): semiannual Libor + 2.5% p.a. with maturity on September 15, 2011.
(3) | Contracts in US$ - CSN Madeira (part): semiannual Libor + 3% p.a. with indefinite maturity.
| Contracts in US$ - CSN Export: semiannual Euribor + 0.5% p.a. with indefinite maturity.
| Contracts in US$ - Cinnabar (part): semiannual Libor + 3% p.a. with indefinite maturity.
(*) | Other: Metalic, Inal Nordeste, Inal, Prada, CSN LLC.

• Shareholders’ equity – accumulated translation adjustments (Law 11,638/07)

|  | Investment |  |  |  |
|  | Exchange |  | Investments exchange |  |
Companies |  | variation |  | variation effects |  | Total
CSN Steel |  | 154,327 |  | (18,848) |  | 135,479
Overseas |  | 89,555 |  |  |  | 89,555
Panama |  | 97,669 |  |  |  | 97,669
Energy I |  | 76,654 |  |  |  | 76,654
CSN Export |  | (4,005) |  |  |  | (4,005)
Total at 6/30/2009 |  | 414,200 |  | (18,848) |  | 395,352
Total at 3/31/2009 |  | 1,232,746 |  | (33,232) |  | 1,199,514

Accumulated translation adjustments refer to investees overseas whose functional currencies are different from the Brazilian Real.

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• Income

|  | Revenues |  | Expenses
|  |  |  | Interest and |  |  |  | COGS / |  | Interest and |  |
|  | Products and |  | monetary and |  |  |  | Products and |  | monetary and |  |
Companies |  | services |  | exchange variations |  | Total |  | services |  | exchange variations |  | Total
CSN Export |  | 273,667 |  | (24,638) |  | 249,029 |  | 226,290 |  | (102,947) |  | 123,343
CSN Iron |  |  |  |  |  |  |  |  |  | (193,163) |  | (193,163)
Cinnabar |  |  |  | 100,013 |  | 100,013 |  |  |  | (509,427) |  | (509,427)
CSN Madeira |  | 386,218 |  | (44,444) |  | 341,774 |  | 115,004 |  | (131,148) |  | (16,144)
NMSA Madeira |  | 47,146 |  | (6,747) |  | 40,399 |  | 9,660 |  |  |  | 9,660
Prada |  | 456,663 |  |  |  | 456,663 |  | 243,396 |  |  |  | 243,396
Ersa |  |  |  |  |  |  |  | 12,120 |  |  |  | 12,120
CSN Cimentos |  | 3,404 |  |  |  | 3,404 |  | 2,520 |  |  |  | 2,520
Sepetiba Tecon |  | 1,404 |  |  |  | 1,404 |  | 790 |  |  |  | 790
GalvaSud |  | 244,651 |  |  |  | 244,651 |  | 152,986 |  |  |  | 152,986
Cia. Metalic Nordeste |  | 40,688 |  |  |  | 40,688 |  | 23,181 |  |  |  | 23,181
Inal Nordeste |  | 22,982 |  |  |  | 22,982 |  | 10,818 |  |  |  | 10,818
Exclusive investment funds |  |  |  | (111,555) |  | (111,555) |  |  |  |  |  |
Total at 6/30/2009 |  | 1,476,823 |  | (87,371) |  | 1,389,452 |  | 796,765 |  | (936,684) |  | (139,920)
Total at 6/30/2008 |  | 1,396,839 |  | (254,777) |  | 1,142,062 |  | 739,758 |  | (335,469) |  | 404,289

During the period, the subsidiary CSN Export S.à r.l.’s exported to the CSN’s subsidiaries, Lusosider in Portugal and CSN LLC in the United States, intermediated by third parties. These transactions and their effects were eliminated from the consolidated quarterly information.

d) Other related parties

• CBS Previdência

The Company is the main sponsor of CBS Previdência, not-for-profit civil association set up in July 1960, whose main purpose is to pay supplementary benefits to those paid by social security. As the CBS Previdência sponsor, CSN maintains payment transactions of contributions and actuarial liability recognition ascertained in defined benefit plans.

• Fundação CSN

CSN develops socially responsible policies currently focused on Fundação CSN, whose sponsor is the Company. Transactions between the parties are related to operating and financial support for Fundação CSN to develop social projects, mainly in the localities where CSN operates.

• Banco Fibra

Banco Fibra is under the same control structure of Vicunha Siderurgia, and financial transactions with this bank are limited to transactions in checking accounts and financial investments in fixed income.

The balances of transactions between the Company and these entities are shown as follows:

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Assets and Liabilities

|  | Assets |  | Liabilities
|  | Bank checking |  |  |  |  |  |  |  |
|  | accounts and |  |  |  | Actuarial |  | Other accounts |  |
Companies |  | marketable securities |  | Total |  | liabilities |  | payable |  | Total
CBS Previdência |  |  |  |  |  | 96,285 |  |  |  | 96,285
Fundação CSN |  | 906 |  | 906 |  |  |  | 66 |  | 66
Banco Fibra |  | 13,721 |  | 13,721 |  |  |  |  |  |
Total at 6/30/2009 |  | 14,627 |  | 14,627 |  | 96,285 |  | 66 |  | 96,351
Total at 3/31/2009 |  | 54,743 |  | 54,743 |  | 107,017 |  | 57 |  | 107,074

Income

|  | Income |  | Expenses
|  | Monetary and exchange |  |  |  | Pension fund |  |  |  |
Companies |  | variation |  | Total |  | expenses |  | Other expenses |  | Total
CBS Previdência |  | 116 |  | 116 |  | 34,656 |  | 49 |  | 34,705
Fundação CSN |  |  |  |  |  |  |  | 1,467 |  | 1,467
Banco Fibra |  | 140 |  | 140 |  |  |  |  |  |
Total at 6/30/2009 |  | 256 |  | 256 |  | 34,656 |  | 1,516 |  | 36,172
Total at 6/30/2008 |  |  |  |  |  | (2,189) |  | 2,129 |  | (60)

e) Key management personnel

Key management personnel are responsible for planning, directing and controlling the Company’s activities and include the members of the Board of Directors, statutory officers and other officers. The Company presents, in the table below, information on compensations and balances existing as of June 30, 2009.

|  | 6/30/2009 |  | 3/31/2009 |  | 6/30/2009 |  | 6/30/2008
|  | Assets |  | Liabilities |  | Assets |  | Liabilities |  | Income |  | Income
Short-term benefits for employees and manangement |  |  |  | 1,258 |  |  |  | 1,076 |  | 23,043 |  | 24,018
Post-employment benefits |  |  |  |  |  |  |  |  |  | 82 |  | 80
Other long-term benefits |  | n/a |  | n/a |  | n/a |  | n/a |  |  |  |
Benefits of labor agreement termination |  | n/a |  | n/a |  | n/a |  | n/a |  |  |  |
Share-based compensation |  | n/a |  | n/a |  | n/a |  | n/a |  |  |  |
|  |  |  | 1,258 |  |  |  | 1,076 |  | 23,125 |  | 24,098

n/a – Not applicable

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6. CASH AND CASH EQUIVALENTS z

|  | Consolidated |  | Parent Company
|  | 6/30/2009 |  | 3/31/2009 |  | 6/30/2009 |  | 3/31/2009
Current |  |  |  |  |  |  |  |
Cash and cash equivalents |  |  |  |  |  |  |  |
Cash and Banks |  | 182,004 |  | 295,815 |  | 100,992 |  | 231,864
Marketable securities |  |  |  |  |  |  |  |
In Brazil: |  |  |  |  |  |  |  |
Exclusive investment funds |  |  |  |  |  | 659,505 |  | 1,651,767
Brazilian government bonds |  | 1,017,261 |  | 2,097,217 |  |  |  |
Fixed income and debentures |  | 979,774 |  | 1,040,170 |  | 2,057 |  | 149,641
|  | 1,997,035 |  | 3,137,387 |  | 661,562 |  | 1,801,408
Abroad: |  |  |  |  |  |  |  |
Time Deposits |  | 3,901,842 |  | 5,723,520 |  | 2,608,678 |  | 5,029,967
Total Marketable securities |  | 5,898,877 |  | 8,860,907 |  | 3,270,240 |  | 6,831,375
Cash and Cash Equivalents |  | 6,080,881 |  | 9,156,722 |  | 3,371,232 |  | 7,063,239

The available financial funds in the Parent Company and subsidiaries established in Brazil are primarily invested in exclusive investment funds, whose cash is mostly invested in repurchase operations pegged to Brazilian government bonds, with immediate liquidity. Additionally, a significant portion of the financial funds of the Company and its subsidiaries abroad is invested in Time Deposits in first-tier banks.

The exclusive investment funds, managed by UBS Pactual Serviços Financeiros S.A DTVM, and its assets, are accountable for possible losses in investments and operations carried out. The Company may bear the fund’s operation fees (management, custody and audit fees) and it may also be called to back the shareholders’ equity in the event of losses resulting from interest rate, exchange rate or other financial asset variations.

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7. ACCOUNTS RECEIVABLE

|  | Consolidated |  | Parent Company
|  | 6/30/2009 |  | 3/31/2009 |  | 6/30/2009 |  | 3/31/2009
Domestic market |  |  |  |  |  |  |  |
Subsidiaries |  |  |  |  |  | 231,987 |  | 217,768
Other clients |  | 1,109,914 |  | 1,096,370 |  | 676,234 |  | 664,937
|  | 1,109,914 |  | 1,096,370 |  | 908,221 |  | 882,705
Foreign market |  |  |  |  |  |  |  |
Subsidiaries |  |  |  |  |  | 671,958 |  | 818,351
Other clients |  | 304,990 |  | 368,914 |  | 11,141 |  | 13,567
|  | 304,990 |  | 368,914 |  | 683,099 |  | 831,918
Advance on Export Contracts (ACE) |  | (58,548) |  |  |  | (58,548) |  |
Allowance for doubtful accounts |  | (277,608) |  | (239,836) |  | (222,652) |  | (182,147)
|  | 1,078,748 |  | 1,225,448 |  | 1,310,120 |  | 1,532,476

The Company also maintains other long-term accounts receivable, and among these assets 77% are debentures issued by Companhia Brasileira de Latas in 2002, in the amount of R$212,870. On June 30, 2009, the Company recorded a provision for total loss of these debentures.

8. INVENTORIES

|  | Consolidated |  | Parent Company
|  | 6/30/2009 |  | 3/31/2009 |  | 6/30/2009 |  | 3/31/2009
Finished products |  | 638,189 |  | 737,004 |  | 422,732 |  | 423,955
Work in process |  | 872,063 |  | 1,179,645 |  | 808,896 |  | 1,060,226
Raw materials |  | 749,614 |  | 700,232 |  | 476,923 |  | 380,978
Supplies |  | 732,973 |  | 729,512 |  | 622,245 |  | 615,071
Advance to suppliers |  | 382,352 |  | 288,647 |  | 316,574 |  | 261,674
Provision for losses |  | (26,819) |  | (26,815) |  | (22,846) |  | (22,846)
Materials in transit |  | 64,352 |  | 13,500 |  | 18,433 |  | 5,645
|  | 3,412,724 |  | 3,621,725 |  | 2,642,957 |  | 2,724,703

9. DEFERRED INCOME AND SOCIAL CONTRIBUTION TAXES

(a) Deferred income and social contribution taxes

Deferred income and social contribution taxes are recognized in order to reflect future tax effects attributable to temporary differences between the tax base of assets, liabilities and the respective carrying value.

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|  | Consolidated |  | Parent Company
|  | 6/30/2009 |  | 3/31/2009 |  | 6/30/2009 |  | 3/31/2009
Current assets |  |  |  |  |  |  |  |
Income tax |  | 388,182 |  | 539,825 |  | 321,049 |  | 460,925
Social contribution |  | 139,992 |  | 194,427 |  | 115,739 |  | 165,855
|  | 528,174 |  | 734,252 |  | 436,788 |  | 626,780
Long-term assets |  |  |  |  |  |  |  |
Income tax |  | 608,024 |  | 585,831 |  | 508,378 |  | 498,201
Social contribution |  | 205,814 |  | 198,663 |  | 169,699 |  | 166,875
|  | 813,838 |  | 784,494 |  | 678,077 |  | 665,076
|  | 6/30/2009 |  | 6/30/2008 |  | 6/30/2009 |  | 6/30/2008
Income |  |  |  |  |  |  |  |
Income tax |  | 161,445 |  | 4,896 |  | (84,021) |  | 3,835
Social contribution |  | 57,212 |  | 5,195 |  | (31,261) |  | 4,221
|  | 218,657 |  | 10,091 |  | (115,282) |  | 8,056

Pursuant to the CVM Instruction 371/02, some companies of the group, recorded tax credits on tax loss carryforwards and social contribution on a negative basis that are not subject to statute of limitations based on the expectations of future taxable income determined in technical valuation approved by the Management.

The book value of deferred tax assets is reviewed monthly and projections are reviewed annually, and are subject to any material aspects that might change realization projections. These studies indicate the realization of these companies’ tax assets within the term established by the CVM Instruction and within the 30% limit of the taxable income, fact which is shown as follows:

|  |  |  |  |  |  |  | 6/30/2009
|  | Consolidated |  | Parent Company
|  | Corporate income tax |  | Social contribution |  | Corporate income tax |  | Social contribution
Year |  | Tax loss |  | Negative basis |  | Tax loss |  | Negative basis
2009 |  | 125,352 |  | 43,954 |  | 100,108 |  | 36,200
2010 |  | 5,781 |  | 2,081 |  |  |  |
2011 |  | 5,400 |  | 1,944 |  |  |  |
2012 |  | 4,971 |  | 1,790 |  |  |  |
2013 |  | 4,577 |  | 1,648 |  |  |  |
2014 |  | 13,409 |  | 5,068 |  |  |  |
Total |  | 159,490 |  | 56,485 |  | 100,108 |  | 36,200

(b) The sources of the deferred income and social contribution taxes of the Parent Company are shown as follows:

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|  | 6/30/2009 |  | 3/31/2009
|  | Income tax |  | Social contribution |  | Income tax |  | Social contribution
|  | Short-Term |  | Long-Term |  | Short-Term |  | Long-Term |  | Short-Term |  | Long-Term |  | Short-Term |  | Long-Term
Assets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Provisions for contingencies |  | 47,597 |  | 327,709 |  | 17,135 |  | 117,975 |  | 40,964 |  | 317,262 |  | 14,747 |  | 114,214
Provision for interest on shareholders’ equity |  | 48,319 |  |  |  | 17,395 |  |  |  | 87,916 |  |  |  | 31,650 |  |
Provision for payment of private pension plans |  | 14,076 |  | 9,996 |  | 5,067 |  | 3,598 |  | 13,889 |  | 12,865 |  | 5,000 |  | 4,631
Taxes under litigation |  |  |  | 24,450 |  |  |  |  |  |  |  | 23,775 |  |  |  |
Tax credits – Income and social contribution taxes |  | 100,108 |  |  |  | 36,200 |  |  |  | 206,349 |  |  |  | 74,207 |  |
Other provisions |  | 110,949 |  | 146,223 |  | 39,942 |  | 48,126 |  | 111,807 |  | 144,299 |  | 40,251 |  | 48,030
|  | 321,049 |  | 508,378 |  | 115,739 |  | 169,699 |  | 460,925 |  | 498,201 |  | 165,855 |  | 166,875

(c) The reconciliation between the income and social contribution tax expenses and income of the parent company and consolidated, and the result of the rate on net income before Income tax (IR) and Social Contribution (CSLL) in force are shown as follows:

|  | Consolidated |  | Parent Company
|  | 6/30/2009 |  | 6/30/2008 |  | 6/30/2009 |  | 6/30/2008
Income before income and social contribution taxes |  | 1,062,335 |  | 2,442,785 |  | 1,866,576 |  | 2,367,493
Rate |  | 34% |  | 34% |  | 34% |  | 34%
Income and social contribution taxes at the combined tax rate |  | (361,194) |  | (830,547) |  | (634,636) |  | (804,948)
Adjustments to reflect the effective tax rate: |  |  |  |  |  |  |  |
Benefit of Interest on shareholders’ equity – JCP |  | 65,696 |  | 37,715 |  | 65,696 |  | 37,715
Equity income of subsidiaries at different rates or which are not taxable |  | 209,321 |  | 171,933 |  | 335,496 |  | 221,982
Goodwill amortization |  |  |  | (38,635) |  |  |  | (2,029)
Tax incentives |  | 5,326 |  | 10,901 |  | 4,312 |  | 10,901
Effect deriving from the not taxed functional currency |  | (259,111) |  |  |  | (282,666) |  |
Other permanent (additions) deductions |  | (18,804) |  | 4,105 |  | (22,188) |  | (9,073)
Income and social contribution taxes on net income for the period |  | (358,766) |  | (644,528) |  | (533,986) |  | (545,452)
Effective rate |  | 34% |  | 26% |  | 29% |  | 23%

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10. INVESTMENTS

a) Direct interest in subsidiaries and jointly-owned subsidiaries

|  | 6/30/2009 |  | 3/31/2009
Companies |  | Number of shares (in units) |  | % Direct interest |  | Net income (loss) for the period |  | Shareholders' equity |  | % Direct interest |  | Net income (loss) for the period |  | Shareholders' equity
| Common |  | Preferred |  |  |  |  |  |
Steel |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cia. Metalic Nordeste |  | 87,868,185 |  | 4,424,971 |  | 99.99 |  | (2,657) |  | 92,713 |  | 99.99 |  | 1,249 |  | 95,370
INAL Nordeste |  | 43,985,567 |  |  |  | 99.99 |  | (4,535) |  | 40,273 |  | 99.99 |  | (2,730) |  | 38,808
CSN Aços Longos |  | 41,830,119 |  |  |  | 99.99 |  |  |  | 36,807 |  | 99.99 |  |  |  | 36,807
GalvaSud |  | 11,610,671,043 |  |  |  | 99.99 |  | 27,787 |  | 723,610 |  | 99.99 |  | 20,988 |  | 708,916
CSN Steel |  | 480,726,588 |  |  |  | 100.00 |  | 2,371 |  | 1,567,239 |  | 100.00 |  | (52,235) |  | 1,846,303
CSN Overseas |  | 7,173,411 |  |  |  | 100.00 |  | 24,945 |  | 1,092,350 |  | 100.00 |  | (24,553) |  | 1,268,328
CSN Panama |  | 4,240,032 |  |  |  | 100.00 |  | 99,404 |  | 733,071 |  | 100.00 |  | 3,093 |  | 763,275
CSN Energy |  | 3,675,319 |  |  |  | 100.00 |  | 360,533 |  | 902,655 |  | 100.00 |  | 177,507 |  | 684,822
CSN Export |  | 1,036,429 |  |  |  | 100.00 |  | 4,528 |  | 266,807 |  | 100.00 |  | 19,167 |  | 311,774
Cia. Metalurgica Prada |  | 3,155,036 |  |  |  | 100.00 |  | 5,209 |  | 567,252 |  | 100.00 |  | (2,522) |  | 625,552
Logistics |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
MRS Logística |  | 188,332,667 |  | 151,667,313 |  | 27.27 |  | 131,570 |  | 1,782,694 |  | 27.27 |  | 99,906 |  | 1,651,733
Transnordestina Logística |  | 550,722,199 |  | 45,513,333 |  | 81.60 |  | (10,246) |  | 414,022 |  | 84.50 |  | (5,197) |  | 281,988
Sepetiba Tecon |  | 254,015,053 |  |  |  | 99.99 |  | 5,538 |  | 187,077 |  | 99.99 |  | 13,867 |  | 181,540
Itaguaí Logística |  | 1,000,000 |  |  |  | 99.99 |  |  |  | 998 |  | 99.99 |  | (1) |  | 998
Energy |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Itá Energética |  | 520,219,172 |  |  |  | 48.75 |  | 19,921 |  | 630,774 |  | 48.75 |  | 12,793 |  | 610,853
CSN Energia |  | 1,000 |  |  |  | 99.99 |  | (923) |  | 63,085 |  | 99.90 |  | 685 |  | 84,983
Mining |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
ERSA |  | 34,236,307 |  |  |  | 99.99 |  | (1,788) |  | 18,069 |  | 99.99 |  | (2,024) |  | 20,499
Congonhas Minérios |  | 5,010,000 |  |  |  | 99.99 |  | 96 |  | 5,729 |  | 99.99 |  | 115 |  | 5,633
Minas Pelotização |  | 1,000,000 |  |  |  | 99.99 |  |  |  | 998 |  | 99.99 |  | (1) |  | 998
Nacional Minérios |  | 475,052,685 |  |  |  | 59.99 |  | 222,809 |  | 8,454,103 |  | 59.99 |  | 209,605 |  | 8,303,363
Cement |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
CSN Cimentos |  | 722,113,330 |  |  |  | 99.99 |  | (10,231) |  | 329,324 |  | 99.99 |  | (666) |  | 63,882

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b) Investment breakdown

|  | 3/31/2009 |  |  |  |  |  |  |  |  |  |  |  | 6/30/2009
Companies |  | Opening balance of investments |  | Additions (write-offs) |  | Equity pick-up and provision for losses |  | Closing balance of investments
|  | Capital increase |  | Dividends |  | Adjustments foreign exchange variation CPC 02 |  | Gain and loss in percentage variation |  | Other |  |
Steel |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cia Metalurgica Prada (1) |  | 625,552 |  |  |  |  |  |  |  |  |  | (63,510) |  | 5,210 |  | 567,252
Cia. Metalic Nordeste |  | 95,370 |  |  |  |  |  |  |  |  |  |  |  | (2,657) |  | 92,713
INAL Nordeste |  | 38,808 |  | 6,000 |  |  |  |  |  |  |  |  |  | (4,535) |  | 40,273
CSN Aços Longos |  | 36,807 |  |  |  |  |  |  |  |  |  |  |  |  |  | 36,807
GalvaSud (1) |  | 708,916 |  |  |  |  |  |  |  |  |  | (13,090) |  | 27,784 |  | 723,610
CSN Steel (2) |  | 1,846,303 |  |  |  |  |  | (279,330) |  |  |  | (2,105) |  | 2,371 |  | 1,567,239
CSN Overseas |  | 1,268,328 |  |  |  |  |  | (200,923) |  |  |  |  |  | 24,945 |  | 1,092,350
CSN Panama |  | 763,275 |  |  |  |  |  | (129,608) |  |  |  |  |  | 99,404 |  | 733,071
CSN Energy |  | 684,821 |  |  |  |  |  | (142,699) |  |  |  |  |  | 360,533 |  | 902,655
CSN Export |  | 311,774 |  |  |  |  |  | (49,496) |  |  |  |  |  | 4,529 |  | 266,807
|  | 6,379,954 |  | 6,000 |  |  |  | (802,056) |  |  |  | (78,705) |  | 517,584 |  | 6,022,777
Logistics |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
MRS Logistica |  | 450,252 |  |  |  |  |  |  |  |  |  |  |  | 35,879 |  | 486,131
Transnordestina Logística |  | 238,279 |  | 114,973 |  |  |  |  |  | (6,803) |  |  |  | (8,616) |  | 337,833
Sepetiba Tecon |  | 181,540 |  |  |  |  |  |  |  |  |  |  |  | 5,537 |  | 187,077
Itaguaí Logística |  | 998 |  |  |  |  |  |  |  |  |  |  |  |  |  | 998
|  | 871,069 |  | 114,973 |  |  |  |  |  | (6,803) |  |  |  | 32,800 |  | 1,012,039
Energy |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Itá Energética |  | 297,791 |  |  |  |  |  |  |  |  |  |  |  | 9,711 |  | 307,502
CSN Energia |  | 84,983 |  |  |  | (20,976) |  |  |  |  |  |  |  | (922) |  | 63,085
|  | 382,774 |  |  |  | (20,976) |  |  |  |  |  |  |  | 8,789 |  | 370,587
Mining |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
ERSA |  | 20,499 |  |  |  |  |  |  |  |  |  |  |  | (2,430) |  | 18,069
Nacional Minérios (2) |  | 4,982,018 |  |  |  |  |  |  |  |  |  | (43,244) |  | 133,687 |  | 5,072,461
Congonhas Minérios |  | 5,633 |  |  |  |  |  |  |  |  |  |  |  | 96 |  | 5,729
Pelotização Nacional |  | 998 |  |  |  |  |  |  |  |  |  |  |  |  |  | 998
|  | 5,009,148 |  |  |  |  |  |  |  |  |  | (43,244) |  | 131,353 |  | 5,097,257
Cement |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
CSN Cimentos |  | 63,882 |  | 275,672 |  |  |  |  |  |  |  |  |  | (10,230) |  | 329,324
Total MEP |  | 12,706,827 |  | 396,645 |  | (20,976) |  | (802,056) |  | (6,803) |  | (121,949) |  | 680,296 |  | 12,831,984
Other investments |  | 31 |  |  |  |  |  |  |  |  |  |  |  |  |  | 31
Total Investments |  | 12,706,858 |  | 396,645 |  | (20,976) |  | (802,056) |  | (6,803) |  | (121,949) |  | 680,296 |  | 12,832,015

(1) Adjustments related to the goodwill on reverse merger pursuant to Provisional Measure 449/08.
(2) Other adjustments to subsidiaries according to the rules of CPC 02 – classified into shareholders’ equity under translation accumulated adjustments.

c) Additional Information on the main operating subsidiaries

• GALVASUD

Located in Porto Real, in the State of Rio de Janeiro, the Company has as its main corporate purpose all industrial, commercial and sales promotion activities related to: i) installation and operation of a steel products service center; ii) installation and operation of a hot-immersion galvanization line, iii) installation and operation of laser welding lines for the production of welded blanks destined for the automobile production; iv) just-in-time supply to the automotive industry; and v) promotion and sales of the products of the Company and of third parties, shareholders inclusively, to the automotive industry.

• INAL NORDESTE

Based in Camaçari, State of Bahia, the Company has as its main purpose to reprocess and distribute the CSN steel products, operating as a service and distribution center in the Northeast region of the country.

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• COMPANHIA METALÚRGICA PRADA

Based in the city of São Paulo, Prada has branches in several states of the country and has as its main activities the rolled steel reprocessing and distribution, the manufacturing and trading of metallic products, manufacturing and trading of metallic packaging, as well as the import and export of these products.

On December 30, 2008, in order to achieve greater synergy, optimization of operations, cost reduction and, also, become more efficient, Prada incorporated the net assets of Indústria Nacional de Aços Laminados – INAL.

• CIA. METALIC NORDESTE

The Company, with its head office located in Maracanaú, State of Ceará, has as its main corporate purpose the manufacturing of metallic packaging destined to the beverage industry.

Its operation unit can be characterized as one of the world’s most modern ones and counts on two different production lines: the can production line, whose raw material is tin-coated steel, supplied by the parent company CSN, and the lid production line, whose raw material is aluminum.

Its production is mainly geared towards the Brazilian northern and northeastern markets, with the surplus production of lids sold abroad.

The subsidiary received an incentive from PROVIN – Incentive Program for the Companies’ Operations, established by the Government of the State of Ceará, main purpose of which is the promotion of the industrial development and job generation in the State.

• SEPETIBA TECON

Company whose objective is to exploit the No.1 Containers Terminal of the Itaguaí Port, located in Itaguaí, State of Rio de Janeiro. This terminal is linked to Presidente Vargas Steelworks by the Southeast railroad network, which is granted to MRS Logística.

Sepetiba Tecon was the winner of the auction that occurred on September 3, 1998 for the takeover of the terminal concession and this concession allows the exploitation of the aforementioned terminal for the term of 25 years, extendable for another term of 25 years.

• CSN ENERGIA

Its main purpose is distributing and trading the surplus electric power generated by CSN and by companies, consortiums or other entities in which Company holds an interest.

CSN Energia holds a balance receivable related to the electric power sales under the scope of the Electric Power Trade Chamber (“Câmara de Comercialização de Energia Elétrica”) – CCEE, in the amount of R$54,224 (R$54,224 as of March 31, 2009), which are due by concessionaires that present injunctions suspending the corresponding payments. Management understands that recording an allowance for doubtful accounts is not necessary in view of the judicial measures taken by the official entities of the sector.

• CSN CIMENTOS

Based in Volta Redonda, State of Rio de Janeiro, CSN Cimentos has the production and trading of cement as its main purpose. CSN Cimentos use as one of its raw material the blast furnace slag from the pig iron production of the Presidente Vargas Steelworks. The company started to operate on May 14, 2009 and its results are also related to remaining expenditures deriving from discontinued activities in 2002, when the Company name was FEM – Projetos, Construções e Montagens.

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• ESTANHO DE RONDÔNIA - ERSA

Ersa is a subsidiary based in the State of Rondônia, where it operates two units, one in the city of Itapuã do Oeste and the other in the city of Ariquemes.

The subsidiary’s mining operation for cassiterite (tin ore) is located in Itapuã do Oeste and the casting operation from which metallic tin is obtained, which is the raw material used in UPV for the production of tin plates, is located in Ariquemes.

d) Additional information on the main jointly-owned subsidiaries

The amounts of the balance sheet and of the statement of income of the companies whose control is shared are shown as follows. These amounts were consolidated in the Company’s quarterly information, in accordance with the interest described in item (a) of this note.

|  | 6/30/2009 |  | 3/31/2009
|  | NAMISA |  | TRANSNORDESTINA |  | MRS |  | ITASA |  | NAMISA |  | TRANSNORDESTINA |  | MRS |  | ITASA
Current assets |  | 1,856,386 |  | 188,719 |  | 891,919 |  | 64,473 |  | 1,937,005 |  | 52,316 |  | 801,069 |  | 70,962
Noncurrent assets |  | 8,629,319 |  | 629,042 |  | 3,552,857 |  | 914,230 |  | 8,601,214 |  | 607,593 |  | 3,521,755 |  | 921,938
Long-term assets |  | 7,377,204 |  | 40,591 |  | 673,503 |  | 5,151 |  | 7,298,256 |  | 39,905 |  | 635,549 |  | 5,057
Investments, property, plant and equipment and deferred charges |  | 1,252,115 |  | 588,451 |  | 2,879,354 |  | 909,079 |  | 1,302,958 |  | 567,688 |  | 2,886,206 |  | 916,881
Total assets |  | 10,485,705 |  | 817,761 |  | 4,444,776 |  | 978,703 |  | 10,538,219 |  | 659,909 |  | 4,322,824 |  | 992,900
Current liabilities |  | 349,410 |  | 39,352 |  | 858,930 |  | 103,988 |  | 463,793 |  | 31,258 |  | 970,032 |  | 115,910
Noncurrent liabilities |  | 1,682,192 |  | 364,387 |  | 1,803,152 |  | 243,941 |  | 1,771,063 |  | 346,663 |  | 1,701,059 |  | 266,137
Shareholders’ equity |  | 8,454,103 |  | 414,022 |  | 1,782,694 |  | 630,774 |  | 8,303,363 |  | 281,988 |  | 1,651,733 |  | 610,853
Total liabilities and shareholders’ equity |  | 10,485,705 |  | 817,761 |  | 4,444,776 |  | 978,703 |  | 10,538,219 |  | 659,909 |  | 4,322,824 |  | 992,900

|  | 6/30/2009 |  | 6/30/2008
|  | NAMISA |  | TRANSNORDESTINA |  | MRS |  | ITASA |  | NAMISA |  | TRANSNORDESTINA |  | MRS |  | ITASA
Net revenue |  | 572,546 |  | 29,862 |  | 983,516 |  | 111,813 |  | 262,699 |  | 32,105 |  | 1,609,144 |  | 103,798
Cost of goods sold and services rendered |  | (393,565) |  | (29,034) |  | (573,851) |  | (32,163) |  | (184,362) |  | (30,186) |  | (998,846) |  | (26,130)
Gross income (loss) |  | 178,981 |  | 828 |  | 409,665 |  | 79,650 |  | 78,337 |  | 1,919 |  | 610,298 |  | 77,668
Operating revenues (expenses) |  | (91,053) |  | (4,797) |  | (54,656) |  | (19,553) |  | (71,145) |  | (5,456) |  | 18,593 |  | (25,614)
Net financial income |  | 518,195 |  | (11,474) |  | (11,488) |  | (13,127) |  | 33,202 |  | (9,231) |  | (202,000) |  | (24,839)
Income (loss) before income and social contribution taxes |  | 606,123 |  | (15,443) |  | 343,521 |  | 46,970 |  | 40,394 |  | (12,768) |  | 426,891 |  | 27,215
Current and deferred income and social contribution taxes |  | (173,708) |  |  |  | (112,653) |  | (14,255) |  | (5,049) |  |  |  | (157,026) |  | (9,279)
Net income (loss) for the period |  | 432,415 |  | (15,443) |  | 230,868 |  | 32,715 |  | 35,345 |  | (12,768) |  | 269,865 |  | 17,936

• NACIONAL MINÉRIOS – NAMISA

Headquartered in Congonhas, state of Minas Gerais, NAMISA’s main purpose is the production, purchase and sale of iron ore. NAMISA sells its products mainly in the foreign market. NAMISA’s main operations are developed in the municipalities of Congonhas, Ouro Preto, Itabirito and Rio Acima, state of Minas Gerais, and in Itaguaí, state of Rio de Janeiro.

In December 2008, CSN sold 2,271,825 shares of the voting capital of Nacional Minérios S.A. (“NAMISA”) to Big Jump Energy Participações S.A. ("Big Jump"), whose shareholders are the companies Posco e Brazil Japan Iron One Corp, Itochu Corporation, JFE Steel Corporation, Sumitomo Metal Industries, Ltd., Kobe Steel, Ltd., Nisshin Steel Co., Ltd.. Subsequently to this sale, Big Jump subscribed new shares, paying in cash the total of US$3.041.473 thousand, corresponding to R$7,286,154 thousand, R$6,707,886 thousand of which were recorded as goodwill at the subscription of the shares.

Due to the new corporate structure of the jointly-owned subsidiary, in which Big Jump holds 40% and CSN 60% and, due to the shareholders’ agreement entered into between the parties, CSN consolidated NAMISA in a proportional manner.

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• TRANSNORDESTINA LOGÍSTICA

Transnordestina has as its main purpose the exploitation and development of the public rail cargo transport service for the Northeast network of Brazil.

Transnordestina entered into a concession agreement with the Federal Government on December 31, 1997 for a period of 30 years, extendable for another equal period. The agreement allows the development of the public service of exploitation of the northeast network which comprises seven States of the Federation in an extension of 4,534 km. The concession also comprises the lease of assets of Rede Ferroviária Federal S.A. (RFFSA) which serve this network and include, among others, constructions, permanent tracks, locomotives, railcars, vehicles, tracks and accessories.

• MRS LOGÍSTICA

The Company’s main purpose is to exploit, by onerous concession, the public rail cargo transport service in the right of way of the Southeast network, located in the stretch connecting Rio de Janeiro, São Paulo and Belo Horizonte, of Rede Ferroviária Federal S.A. - RFFSA, privatized on September 20, 1996. CSN paid in Namisa 10% of its interest in MRS, and decreased this direct interest from 32.93% to 22.93% .

In addition to this direct interest, the Company also holds an indirect interest of 6% through Nacional Minérios S.A. – Namisa, a proportionally consolidated company, and 4.3377% through International Investment Fund, which integrates the Company’s quarterly information as per the CPC Technical Pronouncement 02.

MRS may also exploit modal transportation services regarding the rail transport and take part in developments aiming at the extension of rail transport services granted.

To provide the services which are the purpose of the concession obtained for a 30-year period, as from December 1, 1996, and extendable for another equal period at the exclusive discretion of the grantor, MRS leased from RFFSA, for the same period of the concession, the assets necessary to operate and maintain rail cargo transportation activities.

• ITÁ ENERGÉTICA S.A. - ITASA

Itasa holds a 60.5% interest in the Itá Consortium, which was created for the exploitation of the Itá Hydroelectric Power Plant pursuant to the concession agreement of December 28, 1995, and its Addendum 1 dated July 31, 2000, entered into between the consortium holders (Itasa and Centrais Geradoras do Sul do Brasil - Gerasul, formerly called Tractebel Energia S.A.) and the Brazilian Agency for Electric Energy (ANEEL).

CSN holds 48.75% of the subscribed capital and the total amount of common shares issued by Itasa, a special purpose entity (SPE) originally established to make feasible the construction of the Itá Hydroelectric Power Plant, the contracting of the supply of goods and services necessary to carry out the venture and the obtainment of financing through the offering of the corresponding guarantees.

e) Additional information on indirect interests abroad

• COMPANHIA SIDERURGICA NACIONAL - LLC

Incorporated in 2001 with the assets and liabilities of the extinct Heartland Steel Inc., headquartered in Wilmington, State of Delaware – USA, it has an industrial plant in Terre Haute, State of Indiana – USA, where there is a complex comprising a cold rolling line, a hot pickling line for spools and a galvanization line. CSN LLC is a wholly-owned indirect subsidiary of CSN Panama.

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• LUSOSIDER

Incorporated in 1996 in succession to Siderurgia Nacional – a company privatized by the Portuguese government that year. Lusosider is the only Portuguese company of the steel sector to produce cold-re-rolled flat steel, with a corrosion-resistant coating. The company presents in Paio Pires an installed capacity of around 550 thousand tonnes/year to produce four large groups of steel products: galvanized plate, cold-rolled plate, pickled and oiled plate.

Products manufactured by Lusosider may be used in the packaging industry, civil construction (piping and metallic structures), and in home appliance components.

11. PROPERTY, PLANT AND EQUIPMENT

|  | Consolidated
|  | Depreciation, depletion and amortization rate (p.a%) |  | Cost |  | Accumulated depreciation, depletion and amortization |  | Residual value
|  |  |  |  | 6/30/2009 |  | 3/31/2009
Machinery and equipment |  |  |  | 7,527,337 |  | (1,453,264) |  | 6,074,073 |  | 5,672,918
Mines and mineral deposits |  |  |  | 5,332 |  | (769) |  | 4,563 |  | 4,703
Buildings |  |  |  | 1,524,441 |  | (171,468) |  | 1,352,973 |  | 1,019,935
Furniture and fixtures |  |  |  | 136,455 |  | (113,158) |  | 23,297 |  | 23,996
Land |  |  |  | 133,643 |  |  |  | 133,643 |  | 132,001
Construction in progress |  |  |  | 1,597,818 |  |  |  | 1,597,818 |  | 2,095,282
Other assets |  |  |  | 1,858,934 |  | (521,197) |  | 1,337,737 |  | 1,330,744
|  |  |  | 12,783,960 |  | (2,259,856) |  | 10,524,104 |  | 10,279,579
|  | Parent Company
Machinery and equipment |  | 8.78 |  | 6,172,269 |  | (1,019,340) |  | 5,152,929 |  | 4,876,675
Mines and mineral deposits |  | 0.05 |  | 2,323 |  | (3) |  | 2,320 |  | 2,320
Buildings |  | 3.56 |  | 778,705 |  | (45,850) |  | 732,855 |  | 540,087
Furniture and fixtures |  | 10.00 |  | 111,727 |  | (95,364) |  | 16,363 |  | 16,883
Land |  |  |  | 89,409 |  |  |  | 89,409 |  | 85,739
Construction in progress |  |  |  | 982,641 |  |  |  | 982,641 |  | 1,210,999
Other assets |  | 20.00 |  | 255,684 |  | (76,334) |  | 179,350 |  | 176,815
|  |  |  | 8,392,758 |  | (1,236,891) |  | 7,155,867 |  | 6,909,518

The loan costs that were capitalized in the Parent Company amounted to R$29,003 (R$20,559 in the first half-year of 2008) and R$31,668 (R$22,328 in the first half-year of 2008) in the consolidated. These costs are determined on the financing contracts for the mining, cement and long steel projects.

The Company analyzed the circumstances to verify if there was a possibility of impairment, and based on the analyses performed it did not identify any evidence that the residual book value of the assets or groups of assets was recorded at a value higher than the recovery value, in accordance with its the cash generating units.

As of June 30, 2009, the assets provided as collateral for financial operations totaled R$47,985 (R$47,985 as of March 31, 2009).

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12. INTANGIBLE ASSETS

|  | Consolidated
|  | Useful life terms |  | Amortization annual rates % |  | Cost |  | Accumulated amortization |  | Residual value
|  |  |  |  |  | 6/30/2009 |  | 3/31/2009
Software |  | 05 years |  | 20 |  | 47,939 |  | (21,113) |  | 26,826 |  | 25,801
Goodwill from expected future profitability |  |  |  |  |  | 793,379 |  | (315,224) |  | 478,155 |  | 500,044
|  |  |  |  |  | 841,318 |  | (336,337) |  | 504,981 |  | 525,845

|  | Parent Company
|  | Useful life terms |  | Amortization annual rates % |  | Cost |  | Accumulated amortization |  | Residual value
|  |  |  |  |  | 6/30/2009 |  | 3/31/2009
Software |  | 05 years |  | 20 |  | 20,129 |  | (6,248) |  | 13,881 |  | 12,893
Goodwill from expected future profitability |  |  |  |  |  | 283,529 |  | (206,928) |  | 76,601 |  | 23,137
|  |  |  |  |  | 303,658 |  | (213,176) |  | 90,482 |  | 36,030

Software: This is valued at the cost of acquisition, less accumulated amortization and, when applicable, less impairment losses.

Goodwill: This refers to the goodwill effects of the subsidiaries Galvasud and Prada related to mergers performed by the Companies. The goodwill economic basis is the expected future profitability and, in accordance with the new pronouncements, these amounts are not amortized in the accounting as from January 1, 2009, when they started to be subject only to impairment tests.

|  | Balance at |  |  |  | Balance at |  |
Goodwill in investments: |  | 3/31/2009 |  | Additions/Write-offs |  | 6/30/2009 |  | Investor
Parent Company |  |  |  |  |  |  |  |
Ersa |  | 23,137 |  | (23,137) |  |  |  | CSN
Subtotal - Parent Company |  | 23,137 |  | (23,137) |  |  |  |
CSN I |  | 19,837 |  |  |  | 19,837 |  | GalvaSud
Inal |  | 86,412 |  |  |  | 86,412 |  | Prada
CFM |  | 347,118 |  |  |  | 347,118 |  | Namisa
Other |  | 23,540 |  | 1,248 |  | 24,788 |  |
Total - Consolidated |  | 500,044 |  | (21,889) |  | 478,155 |  |

In 2009, due to changes in circumstances indicating the loss of goodwill recoverability recorded under the expectation of future profitability, the Company recorded a goodwill impairment verified in the acquisition of Estanho de Rondônia S.A. - ERSA.

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13. DEFERRED CHARGES

In compliance with Law 11,638/07 and the CPC Technical Pronouncement 13, the Company maintains a record of the remaining balance of deferred assets referring to pre-operating expenses recognized up to December 31, 2007.

These assets will be kept in the Company’s accounting up to their total amortization and/or write-off due to impairment. As of June 30, 2009, the balance of these assets was R$31,587 (R$33,183 as of March 31, 2009) in the Parent Company and R$38,040 (R$40,385 as of March 31, 2009) in the consolidated.

14. LOANS, FINANCING AND DEBENTURES

|  | Consolidated |  | Parent Company
|  | Current liabilities |  | Noncurrent Liabilities |  | Current liabilities |  | Noncurrent Liabilities
|  | 6/30/2009 |  | 3/31/2009 |  | 6/30/2009 |  | 3/31/2009 |  | 6/30/2009 |  | 3/31/2009 |  | 6/30/2009 |  | 3/31/2009
FOREIGN CURRENCY |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Long-Term Loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Advance on Export Contracts |  | 1,920,560 |  | 2,192,845 |  |  |  | 242,182 |  | 1,920,560 |  | 2,192,845 |  |  |  | 242,182
Pre-payment |  | 256,065 |  | 283,581 |  | 1,898,808 |  | 1,861,861 |  | 390,832 |  | 378,298 |  | 3,827,673 |  | 4,206,151
Perpetual Bonds |  | 29,355 |  | 34,824 |  | 1,463,700 |  | 1,736,400 |  | 29,355 |  | 34,824 |  | 1,463,700 |  | 1,736,400
Fixed Rate Notes |  | 42,728 |  | 60,204 |  | 1,854,020 |  | 2,199,440 |  | 53,736 |  | 104,870 |  | 3,754,340 |  | 4,428,800
Import Financing |  | 78,580 |  | 124,606 |  | 159,640 |  | 204,372 |  | 65,725 |  | 82,180 |  | 73,839 |  | 94,369
BNDES/Finame |  | 17,494 |  | 16,034 |  | 94,452 |  | 118,475 |  | 15,768 |  | 14,714 |  | 85,442 |  | 107,088
Other |  | 225,523 |  | 247,894 |  | 153,042 |  | 126,989 |  | 91,008 |  | 93,896 |  | 91,654 |  | 13,544
|  | 2,570,305 |  | 2,959,988 |  | 5,623,662 |  | 6,489,719 |  | 2,566,984 |  | 2,901,627 |  | 9,296,648 |  | 10,828,535
LOCAL CURRENCY |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Long-Term Loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
BNDES/Finame |  | 250,749 |  | 198,784 |  | 1,568,658 |  | 1,561,980 |  | 161,135 |  | 126,796 |  | 941,338 |  | 984,207
Debentures |  | 35,279 |  | 22,163 |  | 628,665 |  | 632,760 |  | 26,172 |  | 11,099 |  | 600,000 |  | 600,000
Pre-payment |  | 1,604 |  | 5,332 |  | 100,000 |  | 100,000 |  | 1,604 |  | 5,332 |  | 100,000 |  | 100,000
Loan |  |  |  |  |  |  |  |  |  |  |  | 105,660 |  |  |  |
Other |  | 21,187 |  | 35,773 |  | 89,776 |  | 89,308 |  | 6,395 |  | 6,899 |  | 3,849 |  | 4,200
|  | 308,819 |  | 262,052 |  | 2,387,099 |  | 2,384,048 |  | 195,306 |  | 255,786 |  | 1,645,187 |  | 1,688,407
Total Loans and Financing |  | 2,879,124 |  | 3,222,041 |  | 8,010,761 |  | 8,873,767 |  | 2,762,290 |  | 3,157,413 |  | 10,941,835 |  | 12,516,942
Derivatives |  | 62,973 |  | (98,779) |  | 10,389 |  | (2,024) |  | 2,089 |  | 2,047 |  |  |  |
Total Loans, Financing and |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Derivatives |  | 2,942,097 |  | 3,123,261 |  | 8,021,150 |  | 8,871,743 |  | 2,764,379 |  | 3,159,460 |  | 10,941,835 |  | 12,516,942

As of June 30, 2009, the principal of long-term loans, financing and debentures presents the following composition, by year of maturity:

|  | Consolidated |  | Parent Company
2010 |  | 319,481 |  | 4.0% |  | 1,105,744 |  | 10.1%
2011 |  | 908,863 |  | 11.3% |  | 941,008 |  | 8.6%
2012 |  | 1,511,859 |  | 18.8% |  | 1,517,840 |  | 13.9%
2013 |  | 1,809,099 |  | 22.6% |  | 1,899,638 |  | 17.4%
2014 |  | 656,030 |  | 8.2% |  | 869,240 |  | 7.9%
After 2014 |  | 1,352,119 |  | 16.9% |  | 3,144,666 |  | 28.7%
Perpetual Bonds |  | 1,463,699 |  | 18.2% |  | 1,463,699 |  | 13.4%
|  | 8,021,150 |  | 100.0% |  | 10,941,835 |  | 100.0%

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Loans, financing and debentures are subject to interest, annual rates of which, as of June 30, 2009, are presented as follows:

|  | Consolidated |  | Parent Company
|  | Local currency |  | Foreign currency |  | Local currency |  | Foreign currency
Up to 7% |  | 164,475 |  | 4,303,433 |  |  |  | 5,551,576
From 7.1 to 9% |  | 801,021 |  | 368,873 |  | 498,442 |  | 1,334,602
From 9.1 to 11% |  | 1,358,351 |  | 3,451,104 |  | 1,240,446 |  | 4,977,454
Above 11% |  | 251,451 |  | 58,251 |  |  |  |
Derivatives |  |  |  | 73,362 |  |  |  | 2,089
Variable |  | 120,620 |  | 12,306 |  | 101,605 |  |
|  | 2,695,918 |  | 8,267,329 |  | 1,840,493 |  | 11,865,721
|  |  |  | 10,963,247 |  |  |  | 13,706,214

Percentage composition of total loans, financing and debentures, by currency/index of origin:

|  | Consolidated |  | Parent Company
|  | 6/30/2009 |  | 3/31/2009 |  | 6/30/2009 |  | 3/31/2009
Local Currency |  |  |  |  |  |  |  |
CDI |  | 7.36 |  | 6.65 |  | 5.31 |  | 4.57
IGPM |  | 0.34 |  | 0.37 |  |  |  | 0.67
TJLP |  | 16.64 |  | 14.71 |  | 8.04 |  | 7.09
IGP-DI |  | 0.09 |  | 0.09 |  | 0.07 |  | 0.07
Other indexes |  | 0.17 |  | 0.34 |  | - |  |
|  | 24.60 |  | 22.16 |  | 13.42 |  | 12.40
Foreign Currency |  |  |  |  |  |  |  |
US dollar |  | 74.75 |  | 78.60 |  | 81.22 |  | 82.21
Yen |  |  |  |  |  | 5.34 |  | 5.38
Euro |  | 0.08 |  | 0.08 |  |  |  |
Other currencies |  | 0.57 |  | (0.84) |  | 0.02 |  | 0.01
|  | 75.40 |  | 77.84 |  | 86.58 |  | 87.60
|  | 100.00 |  | 100.00 |  | 100.00 |  | 100.00

In July 2005, the Company issued perpetual bonds amounting to US$750 million through its subsidiary CSN Islands X Corp. These indefinite maturity bonds pay 9.5% p.a. and the Company has the right to settle the transaction at its face value after 5 years, on the maturity dates for the interest.

The guarantees provided for loans comprise fixed asset items, sureties, bank guarantees and securitization operations (exports), as shown in the following table and do not include the guarantees provided to subsidiaries and jointly-owned subsidiaries mentioned in Note 18.

|  | 06/30/2009 |  | 03/31/2009
Property, plant and equipment |  | 47,985 |  | 47,985
Personal guarantee |  | 81,751 |  | 95,788
Imports |  | 57,524 |  | 80,761
Securitizations (exports) |  | 117,841 |  | 123,811
|  | 305,101 |  | 348,345

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The following tables show the amortization and funding in the current period:

Amortization
Company |  | Description |  | Principal (million) |  | Payment date |  | Interest rate (p.a.)
CSN |  | BNDES |  | R$ 16 |  | Feb / 2009 |  | 2.20% up to 3.20%
CSN |  | Debentures |  | R$ 41 |  | Feb / 2009 |  | 103.6% CDI (4th issue)
CSN |  | BNDES |  | R$ 5 |  | Mar / 2009 |  | 2.20% up to 3.20%
CSN |  | BNDES |  | R$ 28 |  | Apr up to Jun / 2009 |  | 2.20% up to 3.20%
CSN |  | Pre-payment of third parties |  | R$ 6 |  | May / 2009 |  | CDI
CSN Cimentos |  | BNDES |  | R$ 2 |  | May / 2009 |  | 2.70 and 3.20%
Total amortization in R$ |  |  |  | R$ 98 |  |  |  |
Island IX |  | Fixed Rates Notes |  | US$39 |  | Jan / 2009 |  | 9.50 and 10.5%
CSN |  | BNDES |  | US$1 |  | Jan / 2009 |  | 1.70% and 2.70%
CSN |  | ACC |  | US$7 |  | Jan / 2009 |  | 6.0%
CSN |  | Pre-payment of third parties |  | US$2 |  | Jan / 2009 |  | 5.65% and 6.43%
CSN Export |  | Pre-payment of third parties |  | US$28 |  | Feb / 2009 |  | 7.28% and 7.43%
CSN |  | Loans from third parties |  | US$1 |  | Feb / 2009 |  | 6.24%
CSN |  | Pre-payment of third parties |  | US$10 |  | Feb / 2009 |  | 5.19% and 5.81%
CSN |  | Pre-payment of third parties |  | US$2 |  | Mar / 2009 |  | 4.78% up to 6.04%
CSN |  | ACC |  | US$21 |  | Mar / 2009 |  | 3.25%
CSN |  | Equipment import |  | US$1 |  | Mar / 2009 |  | 5.00% up to 8.40%
CSN |  | Pre-payment of third parties |  | US$2.5 |  | Apr up to Jun / 2009 |  | 1.87% up to 5.65%
CSN |  | ACC |  | US$126 |  | Apr up to Jun / 2009 |  | 4.35% up to 8.00%
CSN |  | BNDES |  | US$1.6 |  | Apr up to Jun / 2009 |  | 1.7% and 2.7%
CSN |  | Loans from third parties |  | US$3 |  | Apr up to Jun / 2009 |  | 6.30%
CSN |  | Equipment import |  | US$3 |  | Apr up to Jun / 2009 |  | 6.3% up to 8.5%
Island X |  | Fixed Rates Notes |  | US$18 |  | Apr / 2009 |  | 9.50 and 10.5%
CSN Export |  | Pre-payment of third parties |  | US$28 |  | Apr / 2009 |  | 7.28% and 7.43%
Island VIII |  | Fixed Rate Notes |  | US$27 |  | Jun / 2009 |  | 9.75%
Cinnabar |  | Loans from third parties |  | US$1 |  | Apr / 2009 |  | 4.49%
Total amortization in US$ |  |  |  | US$322 |  |  |  |

Funding
Company |  | Description |  | Principal (million) |  | Issue |  | Term |  | Maturity |  | Interest rate (p.a.)
CSN Cimentos |  | BNDES |  | R$ 54 |  | 2/26/2009 |  | 5 years |  | 2/17/2014 |  | TJLP + 2.7%
CSN |  | BNDES |  | R$ 90 |  | 2/26/2009 |  | 5 years |  | 2/17/2014 |  | TJLP + 2.7%
CSN |  | BNDES |  | R$ 215 |  | 3/16/2009 |  | 18 years |  | 12/15/2027 |  | TJLP + 1.3%
Funding in R$ |  |  |  | $359 |  |  |  |  |  |  |  |
CSN Cimentos |  | BNDES |  | US$ 3 |  | 2/26/2009 |  | 5 years |  | 4/15/2014 |  | UM006 + 2.7%
CSN |  | BNDES |  | US$ 24 |  | 2/26/2009 |  | 5 years |  | 4/15/2014 |  | UM006 + 2.7% to 3.2%
CSN |  | ACC |  | US$ 25 |  | 3/16/2009 |  | 1 year |  | 3/5/2010 |  | 4.35%
CSN |  | ACC |  | US$ 75 |  | 5/26/2009 |  | 6 months |  | 11/17/2009 |  | 2.75%
CSN |  | Pre-payment of third parties |  | US$ 200 |  | 6/17/2009 |  | 5 years |  | 6/16/2014 |  | 5.06%
Funding in US$ |  |  |  | US$ 327 |  |  |  |  |  |  |  |

a) Loans and financing with certain financial institutions have limiting contractual clauses (covenants) that are common in financial contracts in general, which the Company has properly complied with as of June 30, 2009. Some of the main covenants are informed as follows:

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In export and import financing operations:

“The Company must maintain all authorizations necessary to comply with the obligations established in the contract.”

“The Company undertakes to export in an amount sufficient to cover the principal and interest added value due on the respective payment dates.”

In financing obtained with the Brazilian Development Bank – BNDES

“The Company undertakes to prove the investment of own funds established in the project.”

“The Company undertakes not to promote acts or measures which may jeopardize or change the economic-financial equilibrium of the loan Beneficiary.”

Debenture issuances:

“The Company must immediately notify the Fiduciary Agent on the call for any general debenture holders’ meeting by the issuer.”

b) The Company and its subsidiaries also assume covenants which are specific to certain contracts, but usual in operations of the same nature, which had also been complied with as of June 30, 2009. As follows:

Covenants of the Company for Eurobonds issued by its subsidiaries:

“In foreign currency and debt operations represented by securities traded on stock exchanges outside Brazil, the Company must not constitute guarantees on its assets, except for those allowed in the operation agreements, without simultaneously guaranteeing the notes.”

Covenants applicable to the Company’s subsidiaries:

CSN Export S.à.r.l (Securitization): “CSN Export must not assume debts except for those established in the operation documentation and debts resulting from law and which do not have a materially adverse effect.”

On July 2, 2009, CSN (1) notified the creditors of 2003-1 series notes about its irrevocable intention of redeeming such notes in advance and payment occurred on August 5 and (2) started a consent solicitation process with creditors related to the 2004-1 and 2005-1 series notes of the Securitization program, in order to obtain therefrom consent or waiver in relation to the following matters: (i) include iron ore receivables in the Securitization program; (ii) flexible dates in early redemption of notes; (iii) change few exports coverage ratios provided for in the program; and (iv) disregard Accumulation Events occurred in the 21st and 23rd quarters of the program, for the purposes of an eventual identification of early amortization event. On August 5, 2009, the Bank of New York Mellon confirmed to have received the creditors consents for both series in sufficient amount to approve all the aforementioned matters.

CSN Islands X Corp. and CSN Islands IX Corp. (Eurobonds): “The issuer must not assume debts, except for those represented by the notes, or debts representing commissions, costs or indemnifications due in accordance with the established in the operation documentation.”

Transnordestina (BNDES financing): “Transnordestina commits not to change, without prior and express authorization of BNDES, its share control.”

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15. DEBENTURES

Fourth issue

As approved at the Board of Directors Meeting held on December 20, 2005 and ratified on April 24, 2006, the Company issued, on February 1, 2006, 60,000 non-convertible and unsecured debentures, in one single tranche, with a unit face value of R$10. These debentures were issued in the total issuance value of R$600,000. The credits from the negotiations with the financial institutions were received on May 3, 2006.

Compensation interest is applied on the face value of these debentures corresponding to 103.6% of the Clearing House for the Custody and Financial Settlement of Securities (Cetip) Interbank Deposit Certificate (CDI), and the maturity of the face value is scheduled for February 1, 2012, without early redemption option.

The deeds of this debenture issue contain restrictive contractual covenants, usual to this kind of operation, described as follows, which have been duly complied with by the Company:

a) Provision of information: the Company must provide to the trustee any information that the latter may reasonably require the former in up to ten business days counting from the date of the respective requirement;

b) Audit: the Company must submit, pursuant to the law, its accounts and balance sheets to examination by an independent audit firm registered with CVM; and

c) General Debenture holders’ Meeting: it must immediately notify the trustee on the call for any General Meeting by the Issuer.

16. FINANCIAL INSTRUMENTS

I – Derivatives

a) Policies for the use of hedging derivatives

The Company’s financial policy reflects the liquidity parameters, credit and market risk approved by the Audit Committee and Board of Directors. The use of derivative instruments, with the purpose of preventing interest rate and foreign exchange rate fluctuations from having a negative impact on the Company’s balance sheet and statement of income, should comply with these same parameters. Pursuant to the Company’s internal rules, this financial investment policy was approved and is managed by the financial department.

As a routine, the financial department presents and discusses, at the meetings of the Board of Executive Officers and Board of Directors, the Company’s financial positions. Pursuant to the Bylaws, significant amount operations require previous approval by the Company’s Management. The use of other derivative instruments is subject to prior approval by the Board of Directors. In this context, considering that equity instruments historically present higher yield than fixed income instruments, and with the purpose of reducing third party capital cost, the Company contracted a total return equity swap operation on ADRs of its own issuance (see Note 17).

In order to finance its activities, the Company often resorts to capital markets, either domestic or international ones, and due to the debt profile it seeks, part of the Company’s debt is pegged to foreign currency, mainly to the U.S. dollar, which motivates the Company to seek hedge for its indebtedness through derivative financial instruments.

In order to contract financial instruments derivatives with the purpose of hedge in compliance with the structure of internal controls, the Company adopts the following policies:

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• Continuous ascertainment of the exchange exposure, which occurs by means of the assessment of assets and liabilities exposed to foreign currency, within the following terms: (i) accounts receivable and payable in foreign currency; (ii) cash and cash equivalents and debt in foreign currency;

• presentation of the Company’s financial position and foreign exchange exposure, as a routine, at meetings of the Board of Executive Officers and of the Board of Directors which approve this hedging strategy; and

• contracting of hedge derivative operations only with first-tier banks.

The Company’s consolidated net exposure to the foreign exchange rate as of June 30, 2009 is shown as follows:

|  | Amounts in US$ thousand
|  | 6/30/2009
Cash and cash equivalents abroad |  | 2,016,517
Guarantee (margin) surplus |  | 333,288
Accounts receivable - foreign market clients |  | 98,023
Advances to suppliers |  | 134,891
Other assets |  | 315,920
Total assets |  | 2,898,639
Loans and financing |  | (4,088,219)
Suppliers |  | (514,582)
Other liabilities |  | (31,728)
Total liabilities |  | (4,634,529)
Gross exposure |  | (1,735,890)
Notional value of contracted derivatives (*) |  | 2,156,250
Net exposure |  | 420,360

(*) Exchange swap and U.S. futures contracts.

The results obtained with these operations are in accordance with the policies and strategies defined by the Company’s Management.

b) Main risks resulting from the Company’s operations

• Exchange rate risk

Although most of the Company’s revenues are denominated in Brazilian Reais, as of June 30, 2009, R$8,193,967 or 75% of the Company’s consolidated loans and financing were denominated in foreign currency (R$9,449,708 or 79% as of March 31, 2009). As a result, the Company is subject to variations in exchange and interest rates and it manages the risk of the fluctuations in the amounts in Brazilian Reais that will be necessary to pay the obligations in foreign currency using a number of financial instruments, including cash invested in dollar and derivatives (derivative contracts without financial leverage, such as foreign currency put and call option), mainly swaps and futures contracts.

• Interest rate risk

The Company has short and long-term liabilities, indexed to floating interest rates and inflation indexes. Due to this exposure, the Company may maintain derivatives to manage these risks better.

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• Credit risk

The exposure to credit risk of financial institutions complies with the parameters established in the Company’s financial policy. The exposure to credit risk of our clients and suppliers complies with the parameters established by the Company’s credit policy.

Since part of the Companies’ funds is invested in Brazilian government bonds, there is also exposure to the Company’s credit risk.

In order to mitigate market risks, as foreign exchange and interest rate, the Company’s Management contracts operations with derivatives, as shown below:

• Exchange swap transactions

Exchange swap transactions aim to protect its liabilities denominated in foreign currency against the depreciation of the Real. The Company carried out swaps of its U.S. dollar-denominated liabilities, in which the Company will receive the difference between the exchange variation observed in the period plus interest rate which ranges between 4.35% and 9.00% p.a., multiplied by the notional value (long position) and pays interest based on the Interbank Deposit Certificate – CDI, with rates ranging between 93% and 117.3% on the amount in Reais of the notional value on the date of the contracting (short position). The notional value of these swaps as of June 30, 2009, was US$823,000 thousand (US$343,000 thousand on March 31, 2009). The gains and losses from these contracts are directly related to exchange (dollar) and CDI fluctuations. These transactions are related to operations in the Brazilian over-the-counter market, primarily having first-tier financial institutions as counterparts, contracted within exclusive investment funds.

As of June 30, 2009, the position of these contracts is as follows:

a) Outstanding operations

|  | Notional value (US$ thousand) |  | Valuation - 2009 |  | Valuation - 2008 |  | Fair value (market) (R$thousand) |  | Amount payable or receivable
|  |  | (R$ thousand) |  | (R$ thousand) |  |  | in the period (R$ thousand)
Counterparts |  | 2009 |  | Operation maturity |  | 2008 |  | Operation maturity |  | Long-term position |  | Short-term position |  | Long-term position |  | Short-term position |  | 2009 |  | 2008 |  | Amount receivable/ received |  | Amount payable/paid
Itau BBA |  | 20,000 |  | Jul-31-09 |  | 20,000 |  | Jul-31-09 |  | 40,902 |  | (35,042) |  | 47,780 |  | (33,220) |  | 5,860 |  | 14,560 |  |  |  | (8,700)
ABN Amro |  | 95,000 |  | Aug-14-09 |  | 95,000 |  | Aug-14-09 |  | 194,576 |  | (172,959) |  | 226,869 |  | (163,809) |  | 21,617 |  | 63,060 |  |  |  | (41,443)
ABN Amro |  | 50,000 |  | Aug-24-09 |  | 50,000 |  | Aug-24-09 |  | 102,341 |  | (90,136) |  | 119,144 |  | (85,309) |  | 12,205 |  | 33,835 |  |  |  | (21,630)
Itau BBA |  | 60,000 |  | Nov-16-09 |  | 60,000 |  | Nov-16-09 |  | 124,554 |  | (155,246) |  | 143,655 |  | (147,212) |  | (30,692) |  | (3,557) |  |  |  | (27,135)
Itau BBA |  | 18,000 |  | Nov-19-09 |  | 18,000 |  | Nov-19-09 |  | 36,818 |  | (43,428) |  | 42,454 |  | (41,106) |  | (6,610) |  | 1,348 |  |  |  | (7,958)
Santander |  | 30,000 |  | Nov-30-09 |  | 30,000 |  | Nov-30-09 |  | 63,378 |  | (80,660) |  | 72,984 |  | (76,845) |  | (17,282) |  | (3,861) |  |  |  | (13,421)
Itau BBA |  | 25,000 |  | Dec-11-09 |  | 25,000 |  | Dec-11-09 |  | 52,064 |  | (63,960) |  | 59,894 |  | (60,596) |  | (11,896) |  | (702) |  |  |  | (11,194)
Goldman Sachs |  | 10,000 |  | Dec-11-09 |  | 10,000 |  | Dec-11-09 |  | 20,680 |  | (25,295) |  | 23,790 |  | (23,836) |  | (4,615) |  | (47) |  |  |  | (4,568)
Itau BBA |  | 10,000 |  | Dec-11-09 |  |  |  |  |  | 25,037 |  | (20,202) |  |  |  |  |  | 4,835 |  |  |  | 4,835 |  |
Santander |  | 25,000 |  | Mar-5-10 |  |  |  |  |  | 50,365 |  | (59,433) |  |  |  |  |  | (9,068) |  |  |  |  |  | (9,068)
Santander |  | 50,000 |  | Jul-1-09 |  |  |  |  |  | 99,357 |  | (97,976) |  |  |  |  |  | 1,382 |  |  |  | 1,382 |  |
Santander |  | 50,000 |  | Jul-1-09 |  |  |  |  |  | 97,986 |  | (99,357) |  |  |  |  |  | (1,371) |  |  |  |  |  | (1,371)
Santander |  | 50,000 |  | Jul-1-09 |  |  |  |  |  | 97,976 |  | (97,459) |  |  |  |  |  | 518 |  |  |  | 518 |  |
Santander |  | 50,000 |  | Jul-1-09 |  |  |  |  |  | 97,995 |  | (97,584) |  |  |  |  |  | 410 |  |  |  | 410 |  |
Santander |  | 15,000 |  | Jul-1-09 |  |  |  |  |  | 29,399 |  | (29,317) |  |  |  |  |  | 82 |  |  |  | 82 |  |
Santander |  | 20,000 |  | Jul-1-09 |  |  |  |  |  | 39,197 |  | (38,969) |  |  |  |  |  | 228 |  |  |  | 228 |  |
Santander |  | 15,000 |  | Jul-1-09 |  |  |  |  |  | 29,398 |  | (29,197) |  |  |  |  |  | 201 |  |  |  | 201 |  |
Itau BBA |  | 10,000 |  | Jul-1-09 |  |  |  |  |  | 19,600 |  | (19,588) |  |  |  |  |  | 12 |  |  |  | 12 |  |
Santander |  | 15,000 |  | Jul-1-09 |  |  |  |  |  | 29,402 |  | (29,367) |  |  |  |  |  | 36 |  |  |  | 36 |  |
Westlb |  | 10,000 |  | Jul-1-09 |  |  |  |  |  | 19,593 |  | (19,553) |  |  |  |  |  | 40 |  |  |  | 40 |  |
Santander |  | 50,000 |  | Jul-1-09 |  |  |  |  |  | 98,021 |  | (98,244) |  |  |  |  |  | (223) |  |  |  |  |  | (223)
Santander |  | 50,000 |  | Jul-1-09 |  |  |  |  |  | 98,043 |  | (98,114) |  |  |  |  |  | (71) |  |  |  |  |  | (71)
Santander |  | 10,000 |  | Jul-1-09 |  |  |  |  |  | 19,597 |  | (19,776) |  |  |  |  |  | (179) |  |  |  |  |  | (179)
Santander |  | 20,000 |  | Jul-1-09 |  |  |  |  |  | 39,202 |  | (39,421) |  |  |  |  |  | (219) |  |  |  |  |  | (219)
Westlb |  | 20,000 |  | Jul-1-09 |  |  |  |  |  | 39,191 |  | (39,562) |  |  |  |  |  | (370) |  |  |  |  |  | (370)
Westlb |  | 20,000 |  | Jul-1-09 |  |  |  |  |  | 39,197 |  | (39,331) |  |  |  |  |  | (134) |  |  |  |  |  | (134)
Santander |  | 25,000 |  | Jul-1-09 |  |  |  |  |  | 48,994 |  | (48,992) |  |  |  |  |  | 2 |  |  |  | 2 |  |
|  | 823,000 |  |  |  | 308,000 |  |  |  | 1,652,864 |  | (1,688,167) |  | 736,570 |  | (631,933) |  | (35,303) |  | 104,636 |  | 7,745 |  | (147,685)

54

#####

b) Settled operations

|  |  |  | Notional value US$ thousand |  | Valuation - 2009 (R$ thousand) |  | Valuation - 2008 (R$ thousand) |  | Fair value (market) (R$ thousand) |  | Amount payable or receivable in the period (R$ thousand)
Date of settlement |  | Counterparts |  | 2009 |  | 2008 |  | Long-term position |  | Short-term position |  | Long-term position |  | Short-term position |  | 2009 |  | 2008 |  | Amount receivable/ received |  | Amount payable/paid
Jan-2-09 |  | Itau BBA |  | 150,000 |  | 150,000 |  | 356,273 |  | (296,669) |  | 355,456 |  | (296,518) |  | 59,604 |  | 58,938 |  | 666 |  |
Jan-2-09 |  | Santander |  | 5,000 |  | 5,000 |  | 11,707 |  | (11,795) |  | 11,680 |  | (11,789) |  | (88) |  | (109) |  | 21 |  |
Jan-2-09 |  | Santander |  | 50,000 |  | 50,000 |  | 116,990 |  | (117,951) |  | 116,722 |  | (117,891) |  | (961) |  | (1,169) |  | 208 |  |
Jan-2-09 |  | Santander |  | 47,000 |  | 47,000 |  | 110,039 |  | (110,874) |  | 109,787 |  | (110,818) |  | (835) |  | (1,031) |  | 196 |  |
Jan-2-09 |  | Itau BBA |  | 400,000 |  | 400,000 |  | 934,883 |  | (943,609) |  | 932,738 |  | (943,131) |  | (8,726) |  | (10,393) |  | 1,667 |  |
Jan-2-09 |  | Itau BBA |  | 50,000 |  | 50,000 |  | 116,902 |  | (117,951) |  | 116,633 |  | (117,892) |  | (1,049) |  | (1,259) |  | 210 |  |
Jan-2-09 |  | itau BBA |  | 50,000 |  | 50,000 |  | 116,933 |  | (117,951) |  | 116,665 |  | (117,892) |  | (1,018) |  | (1,227) |  | 209 |  |
Jan-2-09 |  | itau BBA |  | 50,000 |  | 50,000 |  | 116,881 |  | (117,951) |  | 116,613 |  | (117,892) |  | (1,070) |  | (1,279) |  | 209 |  |
Jan-2-09 |  | itau BBA |  | 58,000 |  | 58,000 |  | 134,569 |  | (135,644) |  | 134,260 |  | (135,575) |  | (1,075) |  | (1,315) |  | 240 |  |
Jan-2-09 |  | itau BBA |  | 50,000 |  | 50,000 |  | 118,277 |  | (117,570) |  | 118,006 |  | (117,510) |  | 707 |  | 496 |  | 211 |  |
Jan-13-09(1) |  | ABN Amro |  | 20,000 |  | 20,000 |  | 48,059 |  | (37,412) |  | 48,190 |  | (37,261) |  | 10,647 |  | 10,929 |  |  |  | (282)
Jan-23-09(2) |  | Itau BBA |  | 60,000 |  | 60,000 |  | 145,828 |  | (100,378) |  | 143,360 |  | (99,570) |  | 45,450 |  | 43,790 |  | 1,660 |  |
Jan-23-09(6) |  | Santander |  | 30,000 |  | 30,000 |  | 72,634 |  | (71,874) |  | 71,369 |  | (71,230) |  | 760 |  | 139 |  | 621 |  |
Jan-23-09(6) |  | Santander |  | 10,000 |  | 10,000 |  | 24,303 |  | (24,160) |  | 23,879 |  | (23,938) |  | 143 |  | (59) |  | 202 |  |
Jan-27-09(3) |  | ABN Amro |  | 30,000 |  | 30,000 |  | 71,715 |  | (49,965) |  | 71,650 |  | (49,515) |  | 21,750 |  | 22,135 |  |  |  | (385)
Jan-26-09(4) |  | Santander |  | 10,000 |  | 10,000 |  | 23,887 |  | (17,136) |  | 23,823 |  | (16,989) |  | 6,751 |  | 6,834 |  |  |  | (83)
Jan-26-09(5) |  | Itau BBA |  | 20,000 |  | 20,000 |  | 47,857 |  | (34,834) |  | 47,853 |  | (34,399) |  | 13,023 |  | 13,454 |  |  |  | (431)
Jan-2-09(6) |  | Itau BBA |  | 10,000 |  | 10,000 |  | 24,693 |  | (24,340) |  | 23,790 |  | (23,807) |  | 353 |  | (17) |  | 370 |  |
Jan-2-09(6) |  | Goldman Sachs |  | 20,000 |  | 20,000 |  | 49,549 |  | (48,737) |  | 47,579 |  | (47,673) |  | 812 |  | (93) |  | 905 |  |
Jan-3-09(5) |  | Itau BBA |  | 80,000 |  | 80,000 |  | 199,182 |  | (140,520) |  | 191,413 |  | (137,598) |  | 58,662 |  | 53,815 |  | 4,848 |  |
Apr-20-09 |  | Itau BBA |  | 40,000 |  | 40,000 |  | 45,674 |  | (49,386) |  | 48,348 |  | (47,719) |  | (3,712) |  | 629 |  |  |  | (4,341)
|  |  |  | 1,240,000 |  | 1,240,000 |  | 2,886,835 |  | (2,686,707) |  | 2,869,814 |  | (2,676,607) |  | 200,128 |  | 193,208 |  | 12,443 |  | (5,522)

(1) Early settlement – original maturity March 16, 2009
(2) Early settlement – original maturity July 24, 2009
(3) Early settlement – original maturity July 27, 2009
(4) Early settlement – original maturity August 03, 2009
(5) Early settlement – original maturity August 13, 2009
(6) Early settlement – original maturity December 11, 2009

The net position of the aforementioned contracts is recorded in loans and financing as loss in the amount of R$35,303 as of June 30, 2009 (gain of R$94,925 as of March 31, 2009) and its effects are recognized in the Company’s financial result as gain in the amount of R$133,018. The jointly-owned subsidiary MRS Logística has derivative (swap) operations which caused proportional losses to the Company’s interest, in the amount of R$39,795 in income, recognized in the consolidated balance sheet of CSN as of June 30, 2009.

• Libor x CDI Swap transactions

The purpose of these transactions is to hedge liabilities indexed to US Dollar Libor from Brazilian interest rate fluctuations. The Company has basically executed swaps of its liabilities indexed to Libor, in which it receives interest of 1.25% p.a. on the notional value in dollar (long position) and pays 96% of the Interbank Deposit Certificate – CDI on the notional value in Reais on the date of the contracting (short position). The notional value of these swaps as of June 30, 2009 was US$150,000 thousand, hedging an export pre-payment operation in the same amount. The gains and losses from these contracts are directly related to exchange (dollar), Libor and CDI fluctuations. They are related to operations in the Brazilian over-the-counter market, in general, having first-tier financial institutions as counterparts.

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As of June 30, 2009, the position of these contracts is as follows:

a) Outstanding operations

|  |  |  | Notional |  | Valuation - 2009 (R$ thousand) |  | Fair value |  | Amount payable or
|  |  |  | value US$ |  |  | (market) (R$ |  | receivable in the period
|  |  |  | thousand |  |  | thousand) |  | (R$ thousand)
Date of |  |  |  |  |  |  |  |  |  |  |  |
maturity |  | Counterparts |  | 2009 |  | Long-term |  | Short-term |  | 2009 |  | Amount payable
Aug-12-09 |  | CSFB |  | 150,000 |  | 255,209 |  | (257,298) |  | (2,089) |  | (2,089)

b) Settled operations

|  |  |  | Notional value US$ thousand |  | Valuation - 2009 (R$ thousand) |  | Valuation - 2008 (R$ thousand) |  | Fair value (market) (R$ thousand) |  |
Date of settlement |  | Counterparts |  | 2009 |  | 2008 |  | Long-term |  | Short-term |  | Long-term |  | Short-term |  | 2009 |  | 2008 |  | Amount paid
Feb-12-09 |  | CSFB |  | 150,000 |  | 150,000 |  | 257,290 |  | (262,062) |  | 256,524 |  | (258,398) |  | (4,772) |  | (1,874) |  | (2,898)
May-12-09 |  | CSFB |  | 150,000 |  |  |  | 256,121 |  | (260,398) |  |  |  |  |  | (4,277) |  |  |  | (4,277)

The net position of the aforementioned contracts is recorded in loans and financing as loss in the amount of R$2,089 as of June 30, 2009 (loss of R$2,047 as of March 31, 2009) and its effects are recognized in the Company’s financial result as loss in the amount of R$9,264.

• Real-U.S. Dollar Commercial Exchange Rate Futures Contract

It seeks to hedge foreign-denominated liabilities against the Real devaluation. The Company may buy or sell commercial U.S. dollar futures contracts on the Commodities and Futures Exchange (BM&F) to mitigate the foreign currency exposure of its US dollar-denominated liabilities. The specifications of the Real-U.S. dollar exchange rate futures contract, including detailed explanation on the contracts’ characteristics and calculation of daily adjustments, are published by BM&F and disclosed on its website (www.bmf.com.br). As of June 30, 2009, the Company had a long position in its exclusive investment fund of US$1,333,250 thousand. During the first quarter, the Company paid R$640,309 and received R$622,069 in adjustments, thus having a net result of R$18,238. Gains and losses from these contracts are directly related to the currency fluctuations.

As of June 30, 2009, the position of these operations is as follows:

|  | Notional value US$ |  |  |  |  |  |
|  | thousand |  | Fair value |  | Amount payable or receivable in the period
Description |  | 6/30/2009 |  | 6/30/2009 |  | Amount received in R$ |  | Amount paid in R$
Purchase commitment |  |  |  |  |  |  |  |
Foreign currency (US Dollar* |  |  |  |  |  |  |  |
AUG-09 BMF) |  | 1,333,250 |  | (10,702) |  | 622,070 |  | (640,308)

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II – Methods and assumptions used to calculate and measure financial instruments - derivatives

• Foreign exchange swap transactions, Libor x CDI swap transactions

The Company uses an exclusive fund for its foreign exchange swap operations. The fund’s manager, Banco UBS Pactual, calculates and discloses the market value of the fund assets (NAV – Net Asset Value) on a daily basis, using the following pricing methodology to ascertain the market value of the foreign exchange swap.

Dollar

Pricing Methodology

The first step in order to calculate the swap is to correct its notional financial value at the foreign exchange rate variation.

The second step consists of calculating which value the corrected notional value would have on the maturity date.

The third and last stage of the calculation is to carry the swap value on the maturity date to the calculation date.

Combining all steps in one single equation we would have the following:

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Where:

FinSwap calc |  | Swap’s financial value on calculation date
FinNocSwap |  | Swap’s notional financial value (initial financial value)
FinNocSwap corr |  | Swap’s notional financial value restated to calculation date
FinSwap vcto |  | Swap’s estimated financial value on maturity
PtaxV calc |  | Sale PTAX800 on calculation date. Source: BC
PtaxV ini |  | Sale PTAX800 on initial swap date. Source: BC
DCvcto.ini |  | Days elapsed between initial swap and maturity
DC vcto.hoje |  | Days elapsed between initial swap and calculation date
i |  | Swap’s remuneration rate
tx |  | Current market foreign exchange coupon rate. Primary Source: BM&F

The rates used for all swaps are the ones disclosed by BM&F. In their absence, or in situations of liquidity squeeze or systemic crisis situations, coupons of the government bonds of each of the respective indexes are used as a notion for calculation. In the absence of the rate for the specific vertex to be calculated, the BM&F interpolated rates are used.

The Libor x CDI swap was directly contracted by the Company and, therefore, its market value was calculated as follows:

• Long position (purchased): carried to future value by current Libor and discounted to present value by the prefixed US Dollar curve.

• Short position (sold): carried to future value of current CDI and discounted to present value by the prefixed Brazilian Real curve.

The data sources for the mark-to-market of these instruments are the following: BBA (British Bankers Association), BM&F, BOVESPA and CETIP, and all data were taken from Bloomberg.

III – Sensitivity analysis

For the following operations, based on the foreign exchange rate as of June 30, 2009 of R$1.9516 per US$1.00, adjustments to the swap contract amounts were estimated for three scenarios: scenario 1: rate of R$1.9706 per US$1.00; scenario 2: (25% devaluation) rate of R$1.4780 per US$1.00; scenario 3: (50% devaluation) rate of R$0.9853 per US$1.00.

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|  |  |  |  |  |  |  |  |  | 6/30/2009
|  |  |  |  |  | US$ Notional |  |  |  | Additional result
|  | Risk |  | Scenario |  | value |  | Exchange rate |  | R$
Exchange Swap |  | U.S. Dollar devaluation |  | 1* |  | 823,000 |  | 1.9706 |  | 15,671
|  |  |  | 2 |  |  |  | 1.4780 |  | (389,789)
|  |  |  | 3 |  |  |  | 0.9853 |  | (795,248)
Swap CDI vs. Libor |  | U.S. Dollar devaluation |  | 1* |  | 150,000 |  | 1.9706 |  | 2,856
|  |  |  | 2 |  |  |  | 1.4780 |  | (71,043)
|  |  |  | 3 |  |  |  | 0.9853 |  | (144,942)
U.S. dollar futures |  | U.S. Dollar devaluation |  | 1* |  | 1,333,250 |  | 1.9706 |  | 25,386
|  |  |  | 2 |  |  |  | 1.4780 |  | (631,453)
|  |  |  | 3 |  |  |  | 0.9853 |  | (1,288,292)
Consolidated exchange position |  | U.S. Dollar devaluation |  | 1 |  | 420,360 |  | 1.9706 |  | 7,987
|  |  |  | 2 |  |  |  | 1.4780 |  | (199,082)
|  |  |  | 3 |  |  |  | 0.9853 |  | (406,194)

(*) Source: U.S. Dollar futures closing rate as of August 2009 and June 30, 2009.

The scenarios of devaluation of the Real versus the Dollar would increase losses in the operations.

IV – Classification of financial instruments

|  |  |  |  |  | 6/30/2009 |  |  |  |  |  | 3/31/2009
|  |  |  |  |  |  |  |  |  | Fair value |  |
|  |  |  | Fair value |  | Loans and receivables - |  |  |  | through |  | Loans and receivables -
Consolidated - R$ thousand |  | Balances |  | through income |  | Effective interest rate |  | Balances |  | income |  | Effective interest rate
Assets |  |  |  |  |  |  |  |  |  |  |  |
Current assets |  |  |  |  |  |  |  |  |  |  |  |
Cash and cash equivalents |  | 6,080,881 |  | 6,080,881 |  |  |  | 9,156,722 |  | 9,156,722 |  |
Net accounts receivable |  | 1,082,175 |  |  |  | 1,082,175 |  | 1,225,448 |  |  |  | 1,225,448
Advances to suppliers |  | 355,525 |  |  |  | 355,525 |  | 288,647 |  |  |  | 288,647
Guarantee (margin) of financial instruments |  | 1,384,382 |  | 1,384,382 |  |  |  | 2,433,138 |  | 2,433,138 |  |
Noncurrent assets |  |  |  |  |  |  |  |  |  |  |  |
Marketable securities |  |  |  |  |  |  |  | 23,152 |  | 23,152 |  |
Other securities receivable |  | 133,079 |  |  |  | 133,079 |  | 137,153 |  |  |  | 137,153
Liabilities |  |  |  |  |  |  |  |  |  |  |  |
Current liabilities |  |  |  |  |  |  |  |  |  |  |  |
Loans and financing |  | 2,923,499 |  |  |  | 2,923,499 |  | 3,199,877 |  |  |  | 3,199,877
Debentures |  | 7,895 |  |  |  | 7,895 |  | 22,163 |  |  |  | 22,163
Derivatives |  | 52,271 |  | 52,271 |  |  |  | (98,779) |  | (98,779) |  |
Suppliers |  | 1,265,861 |  |  |  | 1,265,861 |  | 1,795,182 |  |  |  | 1,795,182
Advances to clients |  | 65,295 |  |  |  | 65,295 |  | 60,937 |  |  |  | 60,937
Salaries and social contribution |  | 130,061 |  |  |  | 130,061 |  | 105,508 |  |  |  | 105,508
Equity swap financial instrument |  | 733,939 |  | 733,939 |  |  |  | 1,364,970 |  | 1,364,970 |  |
Dividends, Interest on shareholders' equity and profit |  | 256,646 |  |  |  | 256,646 |  | 1,928,950 |  |  |  | 1,928,950
Noncurrent liabilities |  |  |  |  |  |  |  |  |  |  |  |
Loans and financing |  | 7,382,096 |  |  |  | 7,382,096 |  | 8,241,007 |  |  |  | 8,241,007
Debentures |  | 628,665 |  |  |  | 628,665 |  | 632,760 |  |  |  | 632,760
Derivatives |  | 10,389 |  | 10,389 |  |  |  | (2,024) |  | (2,024) |  |

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17. FINANCIAL INSTRUMENTS ASSOCIATED TO OTHER FINANCIAL ASSET PRICE FLUCTUATION RISKS

Total return equity swap contracts

The Company contracted a new total return equity swap operation on September 5, 2008, as presented below:

Issuance date |  | Agreement maturity date |  | Notional value (US$ |  | Assets |  | Liabilities |  | Assets |  | Liabilities |  | Market value
|  | thousand) |  | 6/30/2009 |  | 6/30/2009 |  | 3/31/2009 |  | 3/31/2009 |  | 6/30/2009 |  | 3/31/2009
9/5/2008 |  | 9/10/2009 |  | 1,050,763 |  | 1,326,117 |  | (2,060,055) |  | 1,080,081 |  | (2,445,051) |  | (733,938) |  | (1,364,970)

Despite this operation’s accumulated losses as from September 5, 2008 in the amount of R$733,938, in the first half-year of 2009 the operation generated a profit totaling R$854,005. Short position interest is paid quarterly and the first payment in the amount of R$31,055 was made on January 9, 2009, and the second in the amount of R$12,442, made on April 6, 2009.

Swap contract without cash, having as counterpart Banco Goldman Sachs International, is pegged to 29,684,400 American Depositary Receipts (“ADR”) of Companhia Siderúrgica Nacional (long position) and Libor of 3 months + spread of 0.75% p.a. (short position).

The gains and losses from this contract are directly related to foreign exchange fluctuations, the Company’s ADRs and Libor quotation. This instrument is recorded in other accounts payable in the balance sheet, and gains and loss, by accrual period, in the Company’s financial results.

This operation has deposit related to the guarantee margin with the counterpart and, as of June 30, 2009, this margin totaled US$709,358 remunerated daily at the FedFund rate. The guarantee margin is recorded in the other accounts receivables in the Company’s current assets.

I – Methods and assumptions used to calculate and measure financial instruments – derivatives

The market value pricing of the total return equity swap consists of the correction of the swap’s notional financial value, by having the 29,684,400 notional number of ADRs multiplied by the CSN ADR closing price (ticker: “SID”) on the New York Stock Exchange. We subtracted from this amount the opening notional value, corrected at the contractual interest rate and carried to the calculation date.

II – Sensitivity analysis

Based on the foreign exchange rate as of June 30, 2009 R$1.9516 per US$1.00 and on the ADR price of US$22.35 and, also, in compliance with the historical return correlation between these assets, adjustments to the derivative contract amounts were estimated for three dollar and ADR scenarios: scenario 1 - exchange rate of R$1.9706 per US$1.00 and the ADR quotation at US$25.00; scenario 2 – 25% additional depreciation in relation to the rate of June 30, 2009, with exchange rate of R$2.4395 per US$1.00 and the ADR quotation at US$16.76; and scenario 3 – 50% devaluation in relation to the rate of June 30, 2009, with exchange rate of R$2.9274 per US$1.00 and the ADR quotation at US$11.18.

For the total return equity swap, in addition to the foreign exchange rate variation scenarios above, we also used the variation scenarios of ADRs listed on NYSE.

The scenario 1 follows the perspective of a worldwide economic recovery and the expected growing appreciation of the quotations of the Company’s securities.

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|  |  |  |  |  |  |  |  |  |  |  | 6/30/2009
|  |  |  |  |  |  |  | ADR Notional value |  |  |  |
|  | Risk |  | Scenario |  | ADR Price |  |  | Exchange rate |  | Additional result R$
|  |  |  |  |  | 22.35 |  | 29,684,400 |  | 1.9516 |  |
Swap ADRs |  | ADR price decrease and dollar appreciation |  | 1 |  | 25.00 |  |  |  | 1.9706 |  | 155,018
|  |  |  | 2 |  | 16.76 |  |  |  | 2.4395 |  | (404,619)
|  |  |  | 3 |  | 11.18 |  |  |  | 2.9274 |  | (971,086)

18. SURETIES AND GUARANTEES

The Company has the following liabilities with its subsidiaries and jointly-owned subsidiaries, in the amount of R$3,918 million (R$4,535 million as of March 31, 2009), for guarantees provided:

|  | In million |  |  |  |
Companies |  | Currency |  | 6/30/2009 |  | 3/31/2009 |  | Maturity |  | Conditions
Transnordestina |  | R$ |  | 24.0 |  | 24.0 |  | 11/13/2009 |  | BNDES loan guarantee
Transnordestina |  | R$ |  | 20.0 |  | 20.0 |  | 11/15/2020 |  | BNDES loan guarantee
Transnordestina |  | R$ |  | 13.0 |  | 13.0 |  | 11/15/2015 |  | BNDES loan guarantee
Transnordestina |  | R$ |  | 23.0 |  | 23.0 |  | 4/1/2010 |  | BNDES loan guarantee
Transnordestina |  | R$ |  | 19.2 |  | 19.2 |  | 4/23/2010 |  | BNDES loan guarantee
Transnordestina |  | R$ |  | 18.0 |  | 18.0 |  | 9/18/2009 |  | BNDES loan guarantee
Transnordestina |  | R$ |  | 20.0 |  | 20.0 |  | 2/11/2010 |  | BNDES loan guarantee
Transnordestina |  | R$ |  | 5.0 |  | 5.0 |  | 5/26/2009 |  | BNDES loan guarantee
Transnordestina |  | R$ |  | 90.0 |  | 90.0 |  | 11/2/2009 |  | BNDES loan guarantee
Transnordestina |  | R$ |  | 6.5 |  | 6.5 |  | 1/11/2010 |  | BNDES loan guarantee
Transnordestina |  | R$ |  | 2.7 |  | 2.7 |  | 9/14/2009 |  | BNDES loan guarantee
Transnordestina |  | R$ |  | 45.0 |  |  |  | 5/21/2010 |  | BNDES loan guarantee
Transnordestina |  | R$ |  | 2.0 |  |  |  | 5/21/2010 |  | BNDES loan guarantee
CSN Cimentos S.A. |  | R$ |  | 27.0 |  | 27.0 |  | Indefinite |  | To guarantee the Warrantee’s liability in the writ of summons, pledge, appraisal and registration
CSN Cimentos S.A. |  | R$ |  | 7.9 |  | 7.9 |  | Indefinite |  | To guarantee the Warrantee’s liability regarding Tax Foreclosure
Prada |  | R$ |  | 0.8 |  | 0.8 |  | Indefinite |  | To guarantee the Warrantee’s liability regarding Tax Foreclosure
Prada |  | R$ |  | 2.8 |  | 2.8 |  | Indefinite |  | To guarantee the Warrantee’s liability regarding Tax Foreclosure
Prada |  | R$ |  | 0.2 |  | 0.2 |  | Indefinite |  | To guarantee the Warrantee’s liability regarding ICMS
Prada |  | R$ |  | 6.1 |  | 6.1 |  | Indefinite |  | To guarantee the Warrantee’s liability regarding Tax Foreclosure filed by Paraná State
Prada |  | R$ |  | 0.1 |  | 0.1 |  | Indefinite |  | To guarantee the payment of the value discussed in the Tax Foreclosure Proceeding 2004.51.01.54.1327-8
Prada |  | R$ |  | 0.1 |  | 0.1 |  | Indefinite |  | To guarantee the payment of the value discussed in the Tax Foreclosure Proceeding 2004.61.09.007744-7
Prada |  | R$ |  | 0.4 |  | 0.4 |  | 1/3/2012 |  | To guarantee the Warrantee's liability regarding the purchase and sale of electric power
Prada |  | R$ |  | 1.2 |  |  |  | 3/10/2010 |  | To guarantee the Private Instrument of Termination and acknowledgment of indebtedness as of 9/9/2005
Metalic |  | R$ |  | 0.9 |  | 0.9 |  | Indefinite |  | To guarantee the Warrantee’s liability regarding the tax deficiency notices 2006.19291 and 2006.24557-7 to the Revenue Service of the Ceará State
CSN Energia |  | R$ |  | 1.0 |  | 1.0 |  | Indefinite |  | To guarantee the Warrantee’s liability regarding Tax Foreclosure
Sepetiba Tecon |  | R$ |  | 5.0 |  | 5.0 |  | 6/1/2010 |  | To guarantee the Warrantee’s liability in the rendering of guarantee agreement no. 181020518
Sepetiba Tecon |  | R$ |  | 15.0 |  | 15.0 |  | 5/5/2011 |  | Guarantee by CSN in the issue of export credit note
Total in R$ |  |  |  | 356.9 |  | 308.7 |  |  |  |
CSN Islands VIII |  | US$ |  | 550.0 |  | 550.0 |  | 12/16/2013 |  | Guarantee in Bond issue
CSN Islands IX |  | US$ |  | 400.0 |  | 400.0 |  | 1/15/2015 |  | Guarantee in Bond issue
CSN Islands X |  | US$ |  | 750.0 |  | 750.0 |  | Perpetual |  | Guarantee in Bond issue
Cinnabar |  | US$ |  | 20.0 |  | 20.0 |  | 10/29/2009 |  | Guarantee in the Promissory Notes issue
CSN Madeira |  | US$ |  | 76.8 |  | 76.8 |  | 8/21/2009 |  | Guarantee in Import Loan
Namisa |  | US$ |  | 20.0 |  | 20.0 |  | 12/31/2009 |  | Guarantee in agreement for the rendering of external guarantee
Aços Longos |  | US$ |  | 7.7 |  | 8.5 |  | 6/30/2009 |  | Letter of Credit for equipment acquisition
CSN Cimentos |  | US$ |  | 0.2 |  | 0.4 |  | 8/30/2009 |  | Letter of Credit for equipment acquisition
Total in US$ |  |  |  | 1,824.7 |  | 1,825.6 |  |  |  |

19. TAXES PAID BY INSTALLMENTS

The parent company filed an action pleading the right to the presumed credit of Excise Tax (“IPI”) on the acquisition of exempt, immune inputs, not taxed or taxed at zero rate and, in May 2003, an injunction was obtained authorizing the use of the aforementioned credits, which it offset with other federal taxes. The Regional Federal Court of the 2nd Region, through the appeal filed by the Federal Government, revoked the aforementioned authorization and on August 27, 2007, the proceeding had an unfavorable decision. In view of this decision, the Company will pay the debit related to the offset taxes in 60 months.

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In 2008, jointly-owned subsidiary MRS Logística will pay the ICMS debit with the State of Minas Gerais in 120 installments.

The parent company and the jointly-owned subsidiary MRS Logística are regularly complying with the payment by installments and as of June 30, 2009, the position of these installments was the following:

|  | Consolidated |  | Parent Company
|  | 6/30/2009 |  | 3/31/2009 |  | 6/30/2009 |  | 3/31/2009
Corporate Income tax (IRPJ) |  | 266,171 |  | 280,430 |  | 266,171 |  | 280,430
Social Contribution on Net Income (CSLL) |  | 44,466 |  | 46,848 |  | 44,466 |  | 46,848
Excise Tax (IPI) |  | 209,356 |  | 220,506 |  | 209,356 |  | 220,506
Social Integration Program (PIS) |  | 41,162 |  | 43,367 |  | 41,162 |  | 43,367
Contribution for Social Security Financing (COFINS) |  | 222,345 |  | 234,257 |  | 222,345 |  | 234,257
Value-added tax on sales and services (State of Minas Gerais) (ICMS) |  | 183,175 |  | 183,711 |  | - |  | -
|  | 966,675 |  | 1,009,119 |  | 783,500 |  | 825,408
Current Liabilities |  | 262,335 |  | 256,597 |  | 240,829 |  | 235,606
Noncurrent Liabilities |  | 704,340 |  | 752,522 |  | 542,671 |  | 589,802

20. PROVISIONS AND JUDICIAL DEPOSITS

The Company is currently party, at the competent situations, to several proceedings involving actions and complaints of a number of issues. The breakdown of the amounts recorded as provisions and the respective judicial deposits related to those actions are shown as follows:

|  |  |  |  |  | 06/30/2009 |  |  |  |  |  | 03/31/2009
|  | Judicial Deposits |  | Liabilities provisioned |  | Net Provisions |  | Judicial Deposits |  | Liabilities provisioned |  | Net Provisions
Current |  |  |  |  |  |  |  |  |  |  |  |
Provisions: |  |  |  |  |  |  |  |  |  |  |  |
Labor |  | (49,285) |  | 127,923 |  | 78,638 |  | (46,312) |  | 106,368 |  | 60,056
Civil |  | (25,357) |  | 62,467 |  | 37,110 |  | (22,559) |  | 57,489 |  | 34,930
Parent Company |  | (74,642) |  | 190,390 |  | 115,748 |  | (68,871) |  | 163,857 |  | 94,986
Consolidated |  | (82,247) |  | 203,931 |  | 121,684 |  | (75,523) |  | 178,288 |  | 102,765
Noncurrent |  |  |  |  |  |  |  |  |  |  |  |
Provisions: |  |  |  |  |  |  |  |  |  |  |  |
Labor |  |  |  | 26,678 |  | 26,678 |  |  |  | 20,804 |  | 20,804
Environmental |  | (208) |  | 69,385 |  | 69,177 |  | (208) |  | 69,626 |  | 69,418
Tax |  |  |  | 1,302 |  | 1,302 |  |  |  | 1,286 |  | 1,286
|  | (208) |  | 97,365 |  | 97,157 |  | (208) |  | 91,716 |  | 91,508
Legal liabilities questioned in court: |  |  |  |  |  |  |  |  |  |  |  |
Tax |  |  |  |  |  |  |  |  |  |  |  |
IPI premium credit |  | (1,955,196) |  | 2,221,432 |  | 266,236 |  | (1,226,007) |  | 2,191,915 |  | 965,908
CSLL credit on exports |  |  |  | 1,204,097 |  | 1,204,097 |  |  |  | 1,182,178 |  | 1,182,178
SAT |  |  |  | 78,225 |  | 78,225 |  |  |  | 71,602 |  | 71,602
Education Allowance |  | (33,121) |  | 33,121 |  |  |  | (33,121) |  | 33,121 |  |
CIDE |  | (28,539) |  | 29,112 |  | 573 |  | (27,857) |  | 27,857 |  |
Income tax / “Plano Verão” |  | (20,892) |  | 20,892 |  |  |  | (20,892) |  | 20,892 |  |
Other provisions |  | (6,894) |  | 113,465 |  | 106,571 |  | (6,894) |  | 111,414 |  | 104,520
|  | (2,044,642) |  | 3,700,344 |  | 1,655,702 |  | (1,314,771) |  | 3,638,979 |  | 2,324,208
Parent Company |  | (2,044,850) |  | 3,797,709 |  | 1,752,859 |  | (1,314,979) |  | 3,730,695 |  | 2,415,716
Consolidated |  | (2,057,424) |  | 3,892,941 |  | 1,835,517 |  | (1,326,721) |  | 3,832,842 |  | 2,506,121
Total Parent Company |  | (2,119,492) |  | 3,988,099 |  | 1,868,607 |  | (1,383,850) |  | 3,894,552 |  | 2,510,702
Total Consolidated |  | (2,139,671) |  | 4,096,872 |  | 1,957,201 |  | (1,402,244) |  | 4,011,130 |  | 2,608,886

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The change in provisions for contingencies for the periods ended June 30, 2009 and March 31, 2009, are as follows:

|  |  |  |  |  |  |  |  |  | Consolidated
Nature |  | 3/31/2009 |  | Additions |  | Correction |  | Utilization |  | 6/30/2009
Civil |  | 75,852 |  | 6,817 |  | 1,888 |  | (3,290) |  | 81,267
Labor |  | 164,658 |  | 18,570 |  | 14,927 |  | (7,292) |  | 190,863
Tax |  | 3,599,459 |  | 640 |  | 57,384 |  | (12,964) |  | 3,644,519
Environmental |  | 69,628 |  | 167 |  | 313 |  | (723) |  | 69,385
Pension Plan |  | 101,534 |  |  |  | 9,304 |  |  |  | 110,838
Total |  | 4,011,130 |  | 26,194 |  | 83,816 |  | (24,269) |  | 4,096,872
|  |  |  |  |  |  |  | Parent Company
Nature |  | 3/31/2009 |  | Additions |  | Correction |  | Utilization |  | 6/30/2009
Civil |  | 57,489 |  | 6,816 |  | 1,249 |  | (3,087) |  | 62,467
Labor |  | 127,172 |  | 16,990 |  | 13,550 |  | (3,111) |  | 154,601
Tax |  | 3,568,664 |  |  |  | 54,758 |  |  |  | 3,623,422
Environmental |  | 69,625 |  | 167 |  | 313 |  | (720) |  | 69,385
Pension Plan |  | 71,602 |  |  |  | 6,622 |  |  |  | 78,224
Total |  | 3,894,552 |  | 23,973 |  | 76,492 |  | (6,918) |  | 3,988,099

The provisions for civil, labor, tax, environmental and social security liabilities were estimated by the Company’s Management substantially based on the opinion of its legal counsel, and only the cases classified as risk of probable loss were recorded. Additionally, the provisions include tax liabilities arising from actions taken on the Company’s initiative, plus SELIC (Special Settlement and Custody System) interest.

The Company and its subsidiaries are defendants in other judicial and administrative proceedings (labor, civil and tax) in the approximate amount of R$5.7 billion, R$4.5 billion of which corresponds to tax proceedings, R$0.3 billion to civil actions and R$0.9 billion to labor and social security lawsuits. According to the Company’s legal counsel, these administrative and legal proceedings are assessed as possible risk of loss. These proceedings were not provided for in accordance with the Management’s judgment and with accounting practices adopted in Brazil.

a) Labor actions

As of June 30, 2009, the Company and its subsidiaries were defendant in 9,540 labor claims, with a provision in the amount of R$202,884 (R$164,658 on March 31, 2009). Most of the pleadings of the actions are related to joint and/or subsidiary liability, wage parity, additional allowances for unhealthy and hazardous activities, overtime and differences related to the 40% fine on FGTS (severance pay) resulting from the federal government’s economic plans and profit sharing differences in 1997 and 1999.

b) Civil actions

Among the civil judicial proceedings to which the Company and its subsidiaries are parties, there are mainly actions with indemnification request. Such proceedings, in general, arise from occupational accidents and diseases related to the Company’s industrial activities. A provision in the amount of R$81,267 as of June 30, 2009 (R$75,852 as of March 31, 2009) was recorded for proceedings involving these matters.

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c) Environmental actions

As of June 30, 2009, the Company and its subsidiaries have a provision in the amount of R$69,385 (R$69,628 as of March 31, 2009) for use in expenses related to services for environmental investigation and recovery of areas potentially polluted within the Company’s plants in the States of Rio de Janeiro, Minas Gerais and Santa Catarina.

d) Tax proceedings

• Income and Social Contribution Taxes

(i) The parent company claims the recognition of the financial-tax effects on the calculation of the income and social contribution taxes on net income, related to the 51.87% inflation write-down of the Consumer Price Index (IPC), which occurred in January and February 1989 (“Plano Verão”).

In 2004, the proceeding was concluded and a final and unappealable decision was reached, granting to CSN the right to apply the index of 42.72% (January 1989), from which the 12.15% already applied should be deducted. The use of the index of 10.14% (February 1989) was also granted. The proceeding is currently under expert accounting inspection.

CSN maintains a judicial deposit in the amount of R$338,611 as of June 30, 2009 (R$338,084 as of March 31, 2009) and a provision of R$20,892 (R$20,892 as of March 31, 2009), which represents the portion not recognized by the courts.

(ii) The parent company filed an action questioning the levying of Social Contribution on Net Income (CSLL) on export revenues, based on Constitutional Amendment 33/01 and in March 2004 the Company obtained an injunction authorizing the exclusion of these revenues from the aforementioned calculation basis, as well as the offsetting of the amounts paid as from 2001. The lower court decision was favorable and the decision made by a court of second instance, pronounced before the appeal filed by the Federal Government at the Regional Federal Court (TRF), judged this proceeding unfavorably for CSN. In view of these facts an Extraordinary Appeal was filed at the STF, which has not been judged yet. An injunction suspending the effects of the decision by the Regional Federal Court was obtained at the Federal Supreme Court (STF) until the judgment of the aforementioned Extraordinary Appeal. Up to June 30, 2009, the amount of suspended liability and the credits offset based on the aforementioned proceeding was R$1,204,097 (1,182,178 as of March 31, 2009), plus SELIC interest rate.

• Contribution for intervention in the Economic Domain - CIDE

The parent company questions the legality of Law 10168/00, which established the payment of CIDE on the amounts paid, credited or remitted to beneficiaries not resident in Brazil, for royalties or remuneration purposes on supply contracts, technical assistance, trademark license agreement and exploitation of patents.

The parent company maintains judicial deposits and a provision in the amount of R$29,112 as of June 30, 2009 (R$27,857 as of March 31, 2009), which includes legal charges.

The lower court decision was unfavorable, which was ratified by the 2nd Regional Federal Court (TRF). Appeals for Clarification of Judgment were filed, which were rejected, and an Extraordinary Appeal was filed at STF, which is awaiting decision as to its admissibility.

• Education Allowance

The parent company discussed the unconstitutionality of the education allowance and the possible recovery of the amounts paid in the period from January 5, 1989 to October 16, 1996. The proceeding was judged unfounded, and the Federal Regional Court maintained its unfavorable decision, which is final and unappealable.

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In view of this fact, CSN attempted to pay the amount due, but FNDE and INSS did not reach an agreement about who should receive it. A fine was also demanded, but CSN did not agree.

CSN filed new proceedings questioning the above-mentioned facts and deposited in court the amounts due. In the first proceeding, the 1st level sentence judged partially favorable the CSN pleading, in which the Judge removed the amount of the fine, maintaining, however, the SELIC rate. The Company presented brief of respondent to the defendant’s appeal, and appealed concerning the SELIC rate.

The amount provided for and deposited in court as of June 30 and March 31, 2009 totals R$33,121.

• Workers’ Compensation Insurance (SAT)

The parent company understands that it should pay the SAT at the rate of 1% in all of its establishments, and not 3%, as determined by the current legislation.

In addition to the aforementioned thesis, the Company also discussed the raise in SAT for purposes of Contribution to Special Retirement, whose rate was set at 6%, in accordance with the legislation, for employees who are exposed to harmful agents.

As for the first proceeding mentioned above, the lower court decision was unfavorable and the proceeding is under judgment in the 2nd Region of the Federal Regional Court. As for the second proceeding it ended up unfavorably for the Company, and the total amount due in this proceeding of R$33,077, which was deposited in court, was converted into revenue for the benefit of INSS.

The amount provided for as of June 30, 2009, totals R$78,225 (R$71,602 as March 31, 2009), which includes legal additions and is exclusively related to the process of rate difference from 1% to 3% for all establishments of the Company.

• IPI premium credit on exports

The Brazilian tax laws allowed companies to recognize IPI premium credit until 1983, when the Brazilian government, through Executive act, cancelled these benefits, prohibiting companies to use these credits.

The parent company challenged the constitutionality of this act and filed a claim to obtain the right to use the IPI premium credit on exports from 1992 to 2002, once only laws enacted by the legislative branch may cancel or revoke benefits prepared by prior legislation.

In August 2003 the Company obtained a favorable lower court decision, authorizing the use of the credits aforementioned. The national treasury appealed against this decision and obtained a favorable decision, and the Company then filed a special and extraordinary appeal against this decision at the Superior Court of Justice and at the Federal Supreme Court, respectively, and is currently awaiting for decisions of these courts.

Between September 2006 and May 2007, the Treasury filed 5 tax foreclosures and 3 administrative proceedings against the Company requesting the payment in the amount of approximately R$3.9 billion as of June 30, 2009 related to the payment of taxes which were offset with IPI premium credits.

On August 29, 2007, CSN offered assets in lien represented by treasury shares in the amount of R$536 million. 25% of this amount will be replaced by judicial deposits in monthly installments performed up to December 31, 2007 and as these substitutions take place, it was requested that the equivalent amount in shares was released from the lien, at the share price determined at the closing price of the day prior to the deposit. The requirement is still pending decision.

The Parent Company maintains provisioned the amount of credits already offset, plus default charges up to June 30, 2009, which total R$2,221,432 (R$2,191,915 as of March 31, 2009). The difference between the total amount in litigation and the amount recorded as provision is part of the R$4.5 billion reported above as tax proceedings considered as possible loss.

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As of June 30, 2009, CSN has judicial deposits for referred liabilities, in the amount of R$1,955,196 (R$1,226,007 as of March 31, 2009). During the quarter, part of blocked account ordered by the 6th Federal Tax Foreclosure Court of Rio de Janeiro Section was converted into judicial deposit, in the amount of R$704,516 (see Note 22).

In the middle of 2007, the Superior Court of Justice issued a contrary decision to another taxpayer denying the use of these credits. This decision is subject to revision by the Federal Supreme Court, which, in that event, is the highest court. The parent company observed that a number of other Brazilian companies are challenging in court the same prohibition and it has been monitoring their progress.

• Other

The parent company also recorded provisions for proceedings related to Severance Pay (FGTS) - Supplementary Law 110, COFINS Law 10,833/03, PIS - Law 10,637/02 and PIS/COFINS - Manaus Free-Trade Zone, amount of which totaled R$114,767 as of June 30, 2009 (R$112,700 as of March 31, 2009), which includes legal accruals.

21. SHAREHOLDERS’ EQUITY

i.Paid-in capital stock

The Company’s fully subscribed and paid-in capital stock as of June 30, 2009 amounted to R$1,680,947 (R$1,680,947 as of March 31, 2009), split into 793,403,838 common book-entry shares, with no par value. Each share is entitled to one vote in the resolutions of the General Meeting.

ii.Authorized capital stock

The Company’s bylaws in force as of June 30, 2009, determine that the capital stock can be increased up to 1,200,000,000 shares, by decision of the Board of Directors.

iii.Legal reserve

Recorded at the proportion of 5% on the net income determined in each period, pursuant to Article 193 of Law 6,404/76. The Company reached the limit for recording the legal reserve, as determined by the current legislation.

iv.Treasury shares

The Board of Directors authorized several share repurchase programs, with the purpose of holding those shares in treasury for subsequent disposal and/or cancellation, which are shown as follows:

Board authorization |  | Number of shares authorized |  | Program term |  | Number of shares acquired |  | Shares cancellation |  | Average weighted acquisition cost |  | Maximum and minimum acquisition cost |  | Balance in treasury
12/21/2007 |  | 4,000,000 |  | From 1/23/2008 to 2/27/2008 (1) |  |  |  |  |  | Not applicable |  | Not applicable |  | 34,734,384
3/20/2008 |  | 10,800,000(2) |  | Up to 4/28/2008 |  |  |  |  |  | Not applicable |  | Not applicable |  | 34,734,384
5/6/2008 |  | 10,800,000 |  | Up to 5/28/2008 |  |  |  |  |  | Not applicable |  | Not applicable |  | 34,734,384
6/2/2008 |  | 10,800,000 |  | Up to 6/26/2008 |  |  |  |  |  | Not applicable |  | Not applicable |  | 34,734,384
6/27/2008 |  | 10,800,000 |  | From 6/30/2008 to 7/29/2008 |  |  |  |  |  | Not applicable |  | Not applicable |  | 34,734,384
8/1/2008 |  | 10,800,000 |  | From 8/4/2008 to 8/27/2008 |  |  |  |  |  | Not applicable |  | Not applicable |  | 34,734,384
9/26/2008 |  | 10,800,000 |  | From 9/29/2008 to 10/29/2008 |  | 10,800,000(3) |  |  |  | 29.40 |  | 24.99 and 41.85 |  | 45,534,384
12/3/2008 |  |  |  |  |  |  |  | (10,800,000) |  | Not applicable |  | Not applicable |  | 34,734,384
12/3/2008 |  | 9,720,000 |  | From 12/4/2008 to 1/4/2009 |  |  |  |  |  | Not applicable |  | Not applicable |  | 34,734,384
1/7/2009 |  | 9,720,000 |  | From 1/8/2009 to 1/28/2009 |  |  |  |  |  | Not applicable |  | Not applicable |  | 34,734,384
2/2/2009 |  | 9,720,000 |  | From 2/3/2009 to 2/25/2009 |  |  |  |  |  | Not applicable |  | Not applicable |  | 34,734,384

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(1) The start of this program only occurred after the cancellation of shares approved at the Extraordinary General Meeting (AGE) of January 22, 2008.
(2) As from this share repurchase program the number of shares informed already reflects the split and cancellation of shares approved at the AGE of January 22, 2008.
(3) All shares acquired in this program were repurchased as from October 2008.

The Company did not acquire, sell or cancel treasury shares in the period.

As of June 30, 2009, the position of treasury shares was as follows:

Number of |  | Total amount |  |  |  |  |  |  |  | Share
shares acquired |  | paid for the |  |  |  | Share unit cost |  |  |  | market value
(in units) |  | shares |  | Minimum |  | Maximum |  | Average |  | at 6/30/2009 (*)
34,734,384 |  | R$ 719,042 |  | R$ 13.27 |  | R$ 41.85 |  | R$ 20.70 |  | R$ 1,515,114

(*)Average quote of shares on BOVESPA as of June 30, 2009 at the value of R$43.62 per share.

v. Shareholding structure

As of June 30, 2009, the Company’s shareholding structure was as follows:

|  | 6/30/2009
|  | Number of |  | Total % of |  | % excluding
|  | Common Shares |  | shares |  | treasury shares
Vicunha Siderurgia S.A. |  | 348,859,995 |  | 43.97% |  | 45.98%
BNDESPAR |  | 28,886,758 |  | 3.64% |  | 3.81%
Caixa Beneficente dos Empregados da CSN - CBS |  | 35,490,867 |  | 4.47% |  | 4.68%
Sundry (ADR - NYSE) |  | 190,859,245 |  | 24.06% |  | 25.16%
Other shareholders (approximately 10 thousand) |  | 154,572,589 |  | 19.48% |  | 20.37%
|  | 758,669,454 |  | 95.62% |  | 100.00%
Treasury shares |  | 34,734,384 |  | 4.38% |  |
Total shares |  | 793,403,838 |  | 100.00% |  |

vi. Investment policy and payment of interest on shareholders’ equity and dividends distribution

As of December 11, 2000, the CSN Board of Directors decided to adopt a profit distribution policy which will result in the full distribution of net income to its shareholders, in compliance with Law 6,404/76 amended by Law 9,457/97, provided that the following priorities are preserved, irrespective of their order: (i) business strategy; (ii) compliance with liabilities; (iii) execution of the necessary investments; and (iv) maintenance of the Company’s good financial standing.

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22. INTEREST ON SHAREHOLDERS’ EQUITY AND DIVIDENDS

• Interest on shareholders’ equity

The calculation of interest on shareholders’ equity is based on the variation of the Long-Term Interest Rate (TJLP) on shareholders’ equity, limited to 50% of the income for the period before income tax or 50% of retained earnings and profit reserves, in which case the higher of the two limits may be used, pursuant to the legislation in force.

In compliance with the CVM Resolution 207, of December 31, 1996, and with tax rules, the Company opted to record the proposed interest on shareholders’ equity in the amount of R$193,332 in the half-year, corresponding to the remuneration of R$0.14501349 per share, as corresponding entry against the financial expenses account, and reverse it in the same account, and not presenting it in the statement of income and not generating effects on net income, except with respect to tax effects recognized in income and social contribution taxes. Management will propose that the amount of interest on shareholders’ equity be attributed to the mandatory minimum dividend.

• Dividends

At the Board of Directors’ ordinary meeting held on March 24, 2009, shareholders approved the distribution of R$1,500,000 on a dividends basis, corresponding to R$1.977146 per share, available as from March 31, 2009. However, the Company received an order of the 6th Federal Tax Foreclosure Court of the Rio de Janeiro Section, determining the online blocking of R$799,372, resulting in the partial distribution of dividends in the amount of R$700,628. The Company took all legal measures necessary to release the blocked amounts, however, it was not successful and, aiming at complying with its legal obligations, on June 26, 2009 the Company paid the remaining balance, in the amount of R$799,372, referring to dividends approved on March 24, 2009. Management will continue taking all necessary measures to release the blocked amounts.

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23. NET REVENUES AND COST OF GOODS SOLD

|  |  |  |  |  |  |  |  |  |  |  | Consolidated
|  |  |  |  |  | 6/30/2009 |  |  |  |  |  | 6/30/2008
|  | Tonnes (thousand) (unrevised) |  | Net revenue |  | Cost of Goods Sold |  | Tonnes (thousand) (unrevised) |  | Net revenue |  | Cost of Goods Sold
Steel products |  |  |  |  |  |  |  |  |  |  |  |
Domestic market |  | 1,354 |  | 2,991,118 |  | (1,946,477) |  | 2,218 |  | 4,333,341 |  | (2,177,912)
Foreign market |  | 236 |  | 391,845 |  | (420,847) |  | 501 |  | 847,900 |  | (675,064)
|  | 1,590 |  | 3,382,963 |  | (2,367,324) |  | 2,719 |  | 5,181,241 |  | (2,852,976)
Mining products |  |  |  |  |  |  |  |  |  |  |  |
Domestic market |  | 1,434 |  | 40,400 |  | (7,700) |  | 2,294 |  | 119,887 |  | (59,185)
Foreign market |  | 8,323 |  | 975,454 |  | (445,746) |  | 6,089 |  | 584,213 |  | (235,547)
|  | 9,757 |  | 1,015,854 |  | (453,446) |  | 8,383 |  | 704,100 |  | (294,732)
Other sales |  |  |  |  |  |  |  |  |  |  |  |
Domestic market |  |  |  | 527,060 |  | (458,090) |  |  |  | 660,288 |  | (486,173)
Foreign market |  |  |  | 9,807 |  | (19,164) |  |  |  | 39,309 |  | (21,908)
|  |  |  | 536,867 |  | (477,254) |  |  |  | 699,597 |  | (508,081)
|  |  |  | 4,935,684 |  | (3,298,024) |  |  |  | 6,584,938 |  | (3,655,789)

|  | Parent Company
|  |  |  |  |  | 6/30/2009 |  |  |  |  |  | 6/30/2008
|  | Tonnes (thousand) (unrevised) |  | Net revenue |  | Cost of Goods Sold |  | Tonnes (thousand) (unrevised) |  | Net revenue |  | Cost of Goods Sold
Steel products |  |  |  |  |  |  |  |  |  |  |  |
Domestic market |  | 1,341 |  | 2,733,398 |  | (1,918,482) |  | 2,248 |  | 4,155,748 |  | (2,215,415)
Foreign market |  | 189 |  | 291,926 |  | (261,714) |  | 258 |  | 367,488 |  | (289,585)
|  | 1,530 |  | 3,025,324 |  | (2,180,196) |  | 2,506 |  | 4,523,236 |  | (2,505,000)
Mining products |  |  |  |  |  |  |  |  |  |  |  |
Domestic market |  | 2,798 |  | 57,780 |  | (20,096) |  | 3,238 |  | 121,296 |  | (41,205)
Foreign market |  | 4,243 |  | 433,364 |  | (184,294) |  | 2,131 |  | 125,326 |  | (88,826)
|  | 7,041 |  | 491,144 |  | (204,390) |  | 5,369 |  | 246,622 |  | (130,031)
Other sales |  |  |  |  |  |  |  |  |  |  |  |
Domestic market |  |  |  | 223,594 |  | (167,931) |  |  |  | 134,160 |  | (88,032)
Foreign market |  |  |  | 2,255 |  | (6,225) |  |  |  | 6,864 |  | (5,389)
|  |  |  | 225,849 |  | (174,156) |  |  |  | 141,024 |  | (93,421)
|  |  |  | 3,742,317 |  | (2,558,742) |  |  |  | 4,910,882 |  | (2,728,452)

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24. FINANCIAL INCOME AND MONETARY AND FOREIGN EXCHANGE VARIATIONS, NET

|  |  |  | Consolidated |  | Parent Company
|  | 6/30/2009 |  | 6/30/2008 |  | 6/30/2009 |  | 6/30/2008
Financial expenses: |  |  |  |  |  |  |  |
Loans and financing - foreign currency |  | (288,973) |  | (223,188) |  | (234,814) |  | (104,307)
Loans and financing - domestic currency |  | (79,527) |  | (94,050) |  | (71,290) |  | (81,210)
Related parties |  | (178,576) |  |  |  | (615,265) |  | (89,267)
PIS/COFINS on other revenues |  | (625) |  | (1,026) |  | (625) |  | (1,026)
Interest, fines and tax delays |  | (196,193) |  | (222,931) |  | (173,135) |  | (153,977)
Losses from derivative instruments (*) |  | (200,316) |  | (355,457) |  | (9,264) |  | (63,657)
Other financial expenses |  | (122,101) |  | (31,310) |  | (111,531) |  | (23,398)
|  | (1,066,311) |  | (927,962) |  | (1,215,924) |  | (516,842)
Financial income: |  |  |  |  |  |  |  |
Related parties |  | 21,245 |  | 3,480 |  | 68,370 |  | 10,167
Income on financial investments |  | 103,109 |  | 49,172 |  | 7,564 |  | (277,587)
Derivatives gains (*) |  | 607,756 |  | 715,216 |  |  |  | 51,206
Other income |  | 135,972 |  | 85,067 |  | 110,743 |  | 75,813
|  | 868,082 |  | 852,935 |  | 186,677 |  | (140,401)
Net financial result |  | (198,229) |  | (75,027) |  | (1,029,247) |  | (657,243)
Monetary variations: |  |  |  |  |  |  |  |
- Gains |  | 881 |  | 512 |  | 778 |  | 2,672
- Losses |  | 50,091 |  | (34,941) |  | 4,543 |  | (38,825)
|  | 50,972 |  | (34,429) |  | 5,321 |  | (36,153)
Exchange variations: |  |  |  |  |  |  |  |
- Gains |  | (174,585) |  | (66,669) |  | (195,022) |  | (36,192)
- Losses |  | 240,608 |  | 712,501 |  | 1,423,634 |  | 704,846
- Exchange variations with derivatives (*) |  | 246,251 |  | (207,204) |  |  |  |
|  | 312,274 |  | 438,628 |  | 1,228,612 |  | 668,654
Net monetary and exchange variations |  | 363,246 |  | 404,199 |  | 1,233,933 |  | 632,501
(*) Statement of income from derivative operations |  |  |  |  |  |  |  |
Swap CDI x USD |  | (133,018) |  | (353,058) |  |  |  | (61,258)
Swap Libor x CDI |  | (9,264) |  | (2,399) |  | (9,264) |  | (2,399)
U.S. Dollar Futures |  | (18,238) |  |  |  |  |  |
Total return equity swap |  | 854,006 |  | 508,012 |  |  |  |
Other (MRS) |  | (39,795) |  |  |  |  |  |
|  | 653,691 |  | 152,555 |  | (9,264) |  | (63,657)

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25. OTHER OPERATING (EXPENSES) AND INCOME

|  | Consolidated |  | Parent Company
|  | 6/30/2009 |  | 6/30/2008 |  | 6/30/2009 |  | 6/30/2008
Other operating expenses |  | (271,841) |  | (181,666) |  | (229,829) |  | (165,023)
Provision for actuarial liabilities |  | (11,121) |  | 45,417 |  | (6,540) |  | 45,417
Provision for contingencies |  | (70,159) |  | (39,970) |  | (52,414) |  | (29,203)
Contractual fines |  | (3,507) |  | (30,472) |  | (11,157) |  | (35,335)
Taxes and fees |  | (48,801) |  | (1,155) |  | (46,103) |  | (66)
Equipment Stoppage |  | (23,066) |  | (17,258) |  | (20,915) |  | (17,092)
Impairmaint ERSA |  | (23,137) |  |  |  | (23,137) |  |
Equity loss |  | (20,466) |  | (63,951) |  | (19,850) |  | (61,632)
Other expenses |  | (71,584) |  | (74,277) |  | (49,713) |  | (67,112)
Other operating income |  | 143,777 |  | 60,432 |  | 105,423 |  | 14,608
Investments sold |  | 21,479 |  |  |  | 21,479 |  |
Indemnifications |  | 3,717 |  | (7,291) |  | 3,457 |  | 3,240
Reversal of provision for contingencies |  | 71,648 |  |  |  | 71,648 |  |
Other income |  | 46,933 |  | 67,723 |  | 8,839 |  | 11,368
Other operating income and (expenses) |  | (128,064) |  | (121,234) |  | (124,406) |  | (150,415)

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26. INFORMATION BY BUSINESS SEGMENT

(i) Consolidated balance sheet by business segment

|  | 6/30/2009
|  | Steel |  | Mining |  | Logistics, Energy and Cement |  | Total
Current assets |  | 11,593,572 |  | 1,294,204 |  | 640,508 |  | 13,528,284
Financial investments |  | 4,827,041 |  | 874,230 |  | 197,606 |  | 5,898,877
Clients |  | 903,114 |  | 46,305 |  | 129,329 |  | 1,078,748
Advance to suppliers |  | 338,533 |  | 11,168 |  | 32,652 |  | 382,353
Taxes recoverable |  | 1,251,994 |  | 22,868 |  | 115,075 |  | 1,389,937
Pledge and deposits |  | 1,384,382 |  |  |  |  |  | 1,384,382
Inventories |  | 2,671,097 |  | 325,961 |  | 34,474 |  | 3,031,532
Other assets |  | 217,411 |  | 13,672 |  | 131,372 |  | 362,455
Noncurrent assets |  | 10,888,517 |  | 461,920 |  | 2,770,988 |  | 14,121,425
Long-term assets |  | 2,673,415 |  | 22,102 |  | 357,656 |  | 3,053,173
Investments, property, plant and equipment and intangible assets |  | 8,215,102 |  | 439,818 |  | 2,413,332 |  | 11,068,252
Total assets |  | 22,482,089 |  | 1,756,124 |  | 3,411,496 |  | 27,649,709
Current liabilities |  | 6,267,376 |  | 214,193 |  | 460,532 |  | 6,942,101
Loans, financing and debentures |  | 2,614,696 |  | 129,138 |  | 198,263 |  | 2,942,097
Suppliers |  | 1,272,266 |  | 10,147 |  | 43,330 |  | 1,325,743
Tax payable |  | 812,069 |  | 45,931 |  | 118,455 |  | 976,455
Accounts payable |  | 1,126,733 |  | 12,258 |  | 55,235 |  | 1,194,226
Provisions and contigencies |  | 291,914 |  | 2,939 |  | 12,620 |  | 307,473
Other liabilities |  | 149,698 |  | 13,780 |  | 32,629 |  | 196,107
Noncurrent liabilities |  | 11,760,904 |  | 564,745 |  | 1,454,417 |  | 13,780,066
Loans, financing and debentures |  | 6,279,865 |  | 547,235 |  | 1,194,050 |  | 8,021,150
Net contingencies – judicial deposits |  | 1,772,866 |  | 3,065 |  | 59,586 |  | 1,835,517
Obligations and taxes paid by installments |  | 711,284 |  | 796 |  | 161,669 |  | 873,749
Accounts payable long-term |  | 2,956,940 |  | 472 |  | 26,329 |  | 2,983,741
Other noncurrent liabilities |  | 39,949 |  | 13,177 |  | 12,783 |  | 65,909
Shareholders' equity |  | 6,927,542 |  |  |  |  |  | 6,927,542
Total liabilities and shareholders' equity |  | 24,955,822 |  | 778,938 |  | 1,914,949 |  | 27,649,709

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(ii) Consolidated statement of gross income by business segment

|  | 6/30/2009
|  | Steel |  | Mining |  | Logistics, Energy and Cement |  | Consolidated
Net revenues from sales |  | 3,385,073 |  | 1,015,909 |  | 534,702 |  | 4,935,684
Cost of goods sold and services rendered |  | (2,471,231) |  | (465,146) |  | (361,646) |  | (3,298,024)
Gross profit |  | 913,841 |  | 550,763 |  | 173,056 |  | 1,637,660

In view of the CPC Technical Pronouncement 22, which is undergoing a process of approval and, consequently, of the changes that will be introduced by this regulatory instrument, the Company chose to maintain the disclosure, and for this quarter only gross profit by segment will be presented.

(iii) Other consolidated information by business segment

|  | 6/30/2009
|  | Steel |  | Mining |  | Logistics, Energy and Cement |  | Consolidated
Depreciation, Amortization and Depletion |  | 279,161 |  | 20,223 |  | 85,346 |  | 384,730
Provisions net of Judicial Deposits |  | 1,889,955 |  | 3,100 |  | 64,146 |  | 1,957,201
Tax |  | 1,509,096 |  | 1,919 |  | 6,870 |  | 1,517,885
Labor and Social Security |  | 239,147 |  | 34 |  | 39,459 |  | 278,640
Civil |  | 37,156 |  |  |  | 17,185 |  | 54,341
Other |  | 104,556 |  | 1,147 |  | 632 |  | 106,335

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27. STATEMENT OF VALUE ADDED

|  | Consolidated |  | Parent Company
|  | 6/30/2009 |  | 6/30/2008 |  | 6/30/2009 |  | 6/30/2008
Revenues |  |  |  |  |  |  |  |
Sales of goods, products and services |  | 6,619,412 |  | 8,277,094 |  | 5,074,022 |  | 6,368,412
Other revenues/expenses |  | 1,372 |  | (62,825) |  | 1,988 |  | (61,436)
Allowance for / Reversal of doubtful accounts |  | (62,132) |  | (27,349) |  | (60,524) |  | (27,816)
|  | 6,558,652 |  | 8,186,920 |  | 5,015,486 |  | 6,279,160
Input Acquired from Third Parties |  |  |  |  |  |  |  |
Costs of products, goods and services sold |  | (3,746,647) |  | (1,634,847) |  | (2,950,806) |  | (1,445,894)
Materials, energy – Third party services - other |  | (483,378) |  | (1,146,563) |  | (309,012) |  | (617,820)
Loss/recovery of asset amounts |  | (7,075) |  | (447,242) |  | (5,210) |  | (334,982)
|  | (4,237,100) |  | (3,228,652) |  | (3,265,028) |  | (2,398,696)
Gross Value Added |  | 2,321,552 |  | 4,958,268 |  | 1,750,458 |  | 3,880,464
Retention |  |  |  |  |  |  |  |
Depreciation, amortization and depletion |  | (377,297) |  | (634,600) |  | (285,596) |  | (538,942)
Net value added produced |  | 1,944,255 |  | 4,323,668 |  | 1,464,862 |  | 3,341,522
Value added received in transfers |  |  |  |  |  |  |  |
Equity pick-up |  | 4 |  | (115,780) |  | 986,753 |  | 742,665
Financial income / assets exchange variation |  | 494,063 |  | 217,150 |  | 50,627 |  | (237,578)
Other |  | 5,125 |  |  |  | 4,579 |  |
|  | 499,192 |  | 101,370 |  | 1,041,959 |  | 505,087
Total value added to distribute |  | 2,443,447 |  | 4,425,038 |  | 2,506,821 |  | 3,846,609
DISTRIBUTION OF VALUE ADDED |  |  |  |  |  |  |  |
Personnel |  | 465,998 |  | 360,509 |  | 323,889 |  | 210,849
Direct compensation |  | 368,273 |  |  |  | 246,566 |  |
Benefits |  | 68,373 |  |  |  | 53,218 |  |
Government Severance Indemnity Fund for Employees (FGTS) |  | 29,352 |  |  |  | 24,105 |  |
Taxes, Fees and Contributions |  | 943,894 |  | 2,381,195 |  | 1,004,531 |  | 2,029,182
Federal |  | 739,028 |  |  |  | 836,990 |  |
State |  | 192,862 |  |  |  | 160,692 |  |
Municipal |  | 12,004 |  |  |  | 6,849 |  |
Third party capital remuneration |  | 329,986 |  | (114,923) |  | (154,189) |  | (215,463)
Interest |  | 327,715 |  | (114,923) |  | (155,359) |  | (215,463)
Rentals |  | 2,271 |  |  |  | 1,170 |  |
Remuneration of shareholders’ equity |  | 703,569 |  | 1,822,042 |  | 1,332,590 |  | 1,822,041
Interest on shareholders’ equity |  | 193,223 |  | 110,927 |  | 193,223 |  | 110,927
Dividends |  |  |  |  |  |  |  |
Retained earnings |  | 1,139,367 |  | 1,711,115 |  | 1,139,367 |  | 1,711,114
Minority interest in retained earnings |  | (629,021) |  |  |  |  |  |
Unrealized income |  |  |  | (23,785) |  |  |  |
|  | 2,443,447 |  | 4,425,038 |  | 2,506,821 |  | 3,846,609

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28. EMPLOYEES’ PENSION FUND

(i) Management of the Private Pension Plan

The Company is the main sponsor of CBS Previdência, a private not-for-profit pension fund established in July 1960, main purpose of which is to pay supplementary benefits to participants in the official Pension Plan. CBS Previdência is composed of employees of CSN, CSN-related companies and the entity itself, provided they sign the adherence agreement.

(ii) Description of characteristics of the plans

CBS Previdência has three benefit plans:

35%-of-average-salary plan

It is a defined benefit plan (BD), which began on February 1, 1966, for the purpose of paying retirements (due to time in service, special cases, disability or age) on a life-long basis, equivalent to 35% of the participant’s last average 12 salaries. The plan also guarantees the payment of a sickness allowance to a participant on sick leave through the Official Pension Plan and it also guarantees the payment of death grant and a cash grant. The active and retired participants and the sponsors make thirteen contributions per year, which is the same as the number of benefits paid. This plan became inactive on October 31, 1977, when the supplementation of the average salary plan, which is in process of extinction, came into force.

Supplementation plan for the average salary

The defined benefit plan (BD) began on November 1, 1977. The purpose of this plan is to supplement the difference between the 12 last average salaries and the benefit paid by the Social Security Pension Plan (Previdência Oficial) benefit, to the retired employees, on a life-long basis. Like in the 35% Average Salary Plan, there is sickness allowance, death grant and pension coverage. Thirteen contributions are paid per year, the same number of benefits paid. This plan became inactive on December 26, 1995, after the combined supplementary benefits plan has been implemented.

Combined supplementary benefit plan

Begun on December 27, 1995, this is a combined variable contribution plan (CV). Besides the programmed pension benefit, there is the payment of risk benefits (pension in activity, disability and sickness benefit). In this plan, the retirement benefit is calculated based on the total accumulated sponsor’s and participant’s contributions (thirteen per year). Upon the participant’s retirement grant, the plan starts having a defined benefit plan and thirteen benefits are paid per year.

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As of June 30 and March 31, 2009, the plans are composed as follows:

|  | 35%-of-Average-Salary Plan |  | Supplementation Plan for the Average Salary |  | Combined Supplementary Benefit Plan |  | Total members
|  | 6/30/2009 |  | 3/31/2009 |  | 6/30/2009 |  | 3/31/2009 |  | 6/30/2009 |  | 3/31/2009 |  | 6/30/2009 |  | 3/31/2009
Members |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
In service |  | 10 |  | 13 |  | 22 |  | 26 |  | 11,631 |  | 11,689 |  | 11,663 |  | 11,728
Retired |  | 4,789 |  | 4,829 |  | 4,732 |  | 4,750 |  | 711 |  | 699 |  | 10,232 |  | 10,278
|  | 4,799 |  | 4,842 |  | 4,754 |  | 4,776 |  | 12,342 |  | 12,388 |  | 21,895 |  | 22,006
Related beneficiaries: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Beneficiaries |  | 3,942 |  | 3,965 |  | 1,404 |  | 1,396 |  | 86 |  | 84 |  | 5,432 |  | 5,445
Total participants |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
(members/ beneficiaries) |  | 8,741 |  | 8,807 |  | 6,158 |  | 6,172 |  | 12,428 |  | 12,472 |  | 27,327 |  | 27,451

(iii) Solution approaches for the payment of the actuarial deficit

According to Official Letter 1555/SPC/GAB/COA of August 22, 2002, confirmed by Official Letter 1598/SPC/GAB/COA of August 28, 2002, a proposal for refinancing the reserves to amortize the sponsors’ liability in 240 consecutive monthly installments, monetarily indexed by INPC + 6% p.a., starting as from June 28, 2002 was approved.

The agreement establishes the prepayment of installments should there be a need for cash in the defined benefit plan and the incorporation to the updated debit balance of the eventual deficits/surpluses under the sponsors’ responsibility, so as to preserve the equilibrium of the plans without exceeding the maximum period of amortization stipulated in the agreement.

(iv) Actuarial Liabilities

Due to the CVM Resolution 371/00, which approved the NPC 26 of IBRACON – “Accounting of the Employee’s benefits” and which established new accounting practices for the calculation and disclosure, the Management, through a study performed by external actuaries, determined the effects arising from this practice, and the Company has kept records in conformity with the actuarial report issued on January 9, 2009.

|  | Plans status on 12/31/2008
|  | Plans
|  | 35%-of- Average- Salary |  | Supplementation Plan for the Average Salary |  | Combined Supplementary Benefit Plan |  | Total
Present value of the actuarial liabilities with guarantee |  | 248,736 |  | 988,578 |  | 866,700 |  | 2,104,014
Plan's assets fair value |  | (191,517) |  | (866,909) |  | (851,450) |  | (1,909,876)
Present value of the actuarial obligations exceeding the assets fair value |  | 57,219 |  | 121,669 |  | 15,250 |  | 194,138
Adjustments by allowed deferral: |  | (25,603) |  | (11,309) |  | (75,350) |  | (112,262)
- Unrecognized actuarial gains |  | (25,603) |  | (11,309) |  | (94,341) |  | (131,253)
- Unrecognized cost of service rendered |  |  |  |  |  | 18,991 |  | 18,991
Present value of the amortizing contributions of members |  | (5,420) |  | (18,988) |  |  |  | (24,408)
Actuarial liabilities/ (assets) |  | 26,196 |  | 91,372 |  | (60,100) |  | 57,468
Provisioned Actuarial liabilities/ (assets) (Long-term liabilities/Other) |  | 26,196 |  | 91,372 |  |  |  | 117,568

Actuarial liability recognition

Management decided to recognize the adjustments of the actuarial liabilities in income, as established in Paragraphs 83 and 84 of NPC 26. As of June 30, 2009, the balance of the provision for the coverage of the actuarial liability amounts to R$96,285 (R$107,017 as of March 31, 2009).

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As far as the recognition of the actuarial liability is concerned, the amortizing contribution related to the portion of the participants in the settlement of the reserve insufficiency was deducted from the present value of total actuarial liabilities of the respective plans. Some participants are questioning this amortizing contribution in court, but the Company, grounded on the opinion of its legal and actuarial advisers, understands that this amortizing contribution was duly approved by the Brazilian Department of Supplementary Private Pensions – SPC and, therefore, is legally due by the participants.

According to the actuarial calculations prepared using the projected credit unit method, the amounts to be appropriated in 2009 are as follows:

|  | ESTIMATES PER PLAN - 2009
|  | 35%-of- |  | Supplementation Plan |  | Combined |  |
|  | Average- |  | for the Average |  | Supplementary |  | Total
|  | Salary |  | Salary |  | Benefit Plan |  |
Cost of current service |  | (42) |  | (207) |  | (3,682) |  | (3,931)
Expected contribution of members |  | 28 |  | 100 |  |  |  | 128
Interest on actuarial liabilities |  | (30,057) |  | (119,630) |  | (18,535) |  | (168,222)
Expected income from assets |  | 23,860 |  | 109,176 |  | 17,182 |  | 150,218
Cost of amortizations |  | (530) |  |  |  | (3,538) |  | (4,068)
- Unrecognized actuarial gains |  | (530) |  |  |  | (4,629) |  | (5,159)
- Unrecognized cost of service rendered |  |  |  |  |  | 1,091 |  | 1,091
Expected impact on the 2009 result |  | (6,741) |  | (10,561) |  | (8,573) |  | (25,875)

Main actuarial assumptions adopted in the calculation of the actuarial liability as of December 31, 2008

Actuarial financing method |  | Projected Credit Unit
Functional Currency |  | Real (R$)
Accounting for the plan assets |  | Market Value
Amount used as estimate for the closing shareholders’ equity for the period |  | Best estimate for shareholders’ equity on the closing date of the fiscal year obtained based on the projection of the amounts recorded in November
Nominal annual rate of return on investments |  | 35% of the average: 12.93%; Supplementation: 12.93%; Millennium: 13.21%
Nominal annual rate for discount of the actuarial liability |  | 35% of the average: 13.07%; Supplementation: 12.96%; Millennium: 12.76%
Nominal annual rate of salary growth |  | 5.55%
Nominal annual index for social security benefits correction |  | 4.50%
Long-term annual inflation rate |  | 4.50%

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Administrative expenses |  | The amounts used are net of administrative expenses
General mortality table |  | AT83 segregated by gender
Disability table |  | Mercer Disability with probabilities multiplied by 2
Disabled mortality table |  | Winklevoss
Turnover table |  | Millennium Plan 2% per annum, null for BD plans
Retirement age |  | 100% on the first date on which the employee becomes eligible to a retirement benefit scheduled by the plan
Family composition of the participants in activity |  | 95% will be married at the time of retirement, and the wife is 4 years younger than the husband

CSN does not have other post-employment benefit plans.

29. INSURANCE

In view of the nature of its operations, the Company renewed, for the period from February 21, 2008 to February 21, 2009, and with international reinsurance companies, the All Risks coverage for operational risks for the Presidente Vargas Steelworks, Casa de Pedra Mine, Arcos Mine, Paraná Branch, Coal Terminal - Tecar, GalvaSud (property damages and loss of profits), Container Terminal -Tecon and ERSA Estanho de Rondônia (loss of profits), in the total risk amount of US$9.57 billion (property damages and loss of profit) and maximum indemnification amount, in the event of a claim, of US$750 million (property damages and loss of profits), equivalent to R$1.3 billion. For the period comprised from February 22, 2009 to February 19, 2010, the Company is negotiating coverage for operational risks with insurance and reinsurance companies in Brazil and abroad.

The risk assumptions adopted, given their nature, are not part of the scope of a quarterly information review, and, consequently, they were not reviewed by our independent auditors.

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07.01 – COMMENTS ON THE COMPANY’S PERFORMANCE IN THE QUARTER

See comments on the Company’s consolidated performance – Chart 11.

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12.01 – COMMENTS ON THE COMPANY’S CONSOLIDATED PERFORMANCE IN THE QUARTER

Production

The Presidente Vargas Steelworks produced 869,000 tonnes of crude steel in the second quarter of 2009, 20% down on the previous quarter due to the programmed maintenance stoppage at Blast Furnace 2 between April and June. The furnace resumed production on June 18.

However, the Company’s strategy of stockpiling semi-finished products in the two quarters preceding the maintenance has not affected the production of rolled steel, which posted a substantial increase of 54% over the first quarter of 2009, due to increasing domestic demand.

It is worth noting that, by the second quarter of 2009, CSN had already exhausted its inventories of slabs and hot-rolled coils acquired from third parties in 2008, which had a negative impact on production costs.

Production (in thousand t) |  | 2Q08 |  | 1Q09 |  | 2Q09 |  | Change
|  |  |  |  |  |  |  | 2Q09 x 2Q08 |  | 2Q09 x 1Q09
Crude Steel (Presidente Vargas Mill) |  | 1,291 |  | 1,087 |  | 869 |  | -33% |  | -20%
Purchased Slabs from Third Parties |  | 0 |  | 0 |  | 0 |  | - |  | -
Total Crude Steel |  | 1,291 |  | 1,087 |  | 869 |  | -33% |  | -20%
Rolled Products * (Presidente Vargas Mill) |  | 1,208 |  | 608 |  | 968 |  | -20% |  | 59%
HR from Third Parties Consumption |  | 0 |  | 19 |  | 0 |  | - |  | -
Rolled Products * (Presidente Vargas Mill) |  | 1,208 |  | 627 |  | 968 |  | -20% |  | 54%

* Products delivered for sale, including shipments to CSN Paraná and GalvaSud.

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Production Costs (Parent Company)

CSN’s total production costs reduced to R$933 million in the second quarter of 2009, a strong 35% decrease on the first quarter of 2009 figure of R$1,438 million. The quarter-on-quarter reduction of R$505 million was basically due to the following factors:

Raw materials – total cost of R$397 million in the second quarter of 2009, R$520 million less than the first quarter of 2009, caused by:

- Coal: decline of R$95 million due to lower purchase prices and the appreciation of the Real in the second quarter of 2009;
- Coke: reduction of R$325 million in the second quarter of 2009 costs, since there was no further use of coke acquired from third parties;
- Iron ore and pellets: reduction of R$32 million due to lower consumption thanks to reduced crude steel output in the second quarter of 2009;
- Scrap and other raw materials: decrease of R$68 million, also due to reduced production in the second quarter of 2009.

Labor - labor costs totaled R$ 109 million in the second quarter of 2009, virtually flat when compared to the first quarter of 2009 figure.

General costs – general production costs amounted to R$324 million, 5% up on the R$308 million recorded in the first quarter of 2009, chiefly due to higher expenses with natural gas, caused by the reduced availability of blast-furnace gases.

Depreciation – remained flat over the first quarter of 2009 at close to R$103 million.

STEEL PRODUCTION COSTS - PARENT COMPANY

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Sales

Total Sales Volume

CSN’s flat steel sales volume totaled 947,000 tonnes in the second quarter of 2009, a hefty 47% growth on the previous quarter and 29% down year-on-year.

Domestic Market

Domestic sales came to 795,000 tonnes, 42% up on the first quarter of 2009 and 28% down on the 1.1 million tonnes recorded in the second quarter of 2008. Eighty-four percent of the second quarter of 2009 sales volume went to the domestic market. As previously mentioned, certain industrial sectors recorded increased demand in the second quarter, favoring the Company’s positive result.

Exports

Steel product exports totaled 153,000 tonnes in the second quarter of 2009, 84% up on the previous three months and 32% down year-on-year due to shrinking international demand.

Market Share and Product Mix

The Company’s share of the overall domestic flat steel market (hot-rolled, cold-rolled, galvanized and tin plate) stood at 40% in the second quarter of 2009, 3 p.p. higher than in the first quarter of 2009, led by tin plate, galvanized, hot-rolled and cold-rolled, where CSN achieved market shares of 100%,46%, 34% and 29%, respectively.

Also in the second quarter of 2009, CSN reached a 24% share of the automotive market, 45% of the construction market, 100% of the steel packaging market, 43% of the distribution market and a 43% share of the home appliance/OEM market, besides a consolidated position of 100% of the steel packaging market.

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Coated products accounted for 48% of the Company’s total sales volume in the second quarter of 2009.

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Prices

As the effect of reduced prices and lower share of coated items in the product mix, net revenue per tonne averaged R$ 2,069 in the domestic market in the second quarter of 2009, 14% down on the first quarter of 2009 and 1% up year-on-year.

Average net export revenue per tonne in Reais fell by 36% over the first quarter of 2009, chiefly due to reduced prices, different mix and the period exchange variation.

Mining

• PRODUCTION

Own iron ore production plus purchases from third parties totaled 7.3 million tonnes in the second quarter of 2009, 5.8 million of which from Casa de Pedra, 0.9 million from Namisa and 0.6 million from third parties. Of own production of 6.7 million tonnes, 5.2 million referred to finished products* and 1.5 million was run-of-mine.

• Sales

Second-quarter iron-ore sales totaled 4.0 million tones, 1.4 million less than the first quarter of 2009 figure mainly due to the decline in export volume caused by the reduced availability of ships for loading in May and June, which negatively affected CSN’s overseas sales in that period. Exports came to 3.3 million tonnes, accounting for 83% of total sales volume. The domestic market absorbed 0.7 million tonnes, 0.6 million of which run-of-mine.

In the first half of 2009 ore sales stood at 9.4 million tonnes, 22% up year-on-year. Exports came to 8.3 million tonnes, 36% more year-on-year, and accounted for 87% of total sales in the period, while the domestic market accounted for the remaining 1.1 million tonnes, including 0.8 million of run-of-mine sales.

The Presidente Vargas Steelworks absorbed 1.3 million tonnes in the second quarter and 2.9 million tonnes in the first half of 2009.

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• INVENTORIES

Iron ore inventories closed the second quarter of 2009 at around 13.9 million tonnes, 9.6 million of which finished products*.

* Finished products: lump, sinter feed, pellet feed, hematite and mixed hematite.

Net Revenue

Net revenue totaled R$2.49 billion in the second quarter of 2009, 2% up on the R$2.44 billion recorded in the first quarter of 2009, due to the 47% upturn in steel products sales volume, partially offset by the reduction in average quarterly prices and lower iron ore sales volume.

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Selling, General and Administrative Expenses

Selling, general and administrative expenses totaled R$321 million in the second quarter of 2009, R$46 million up on the previous quarter, chiefly due to greater sales efforts and higher provisions for doubtful accounts.

Other Revenue and Expenses

In the second quarter of 2009, CSN recorded a negative R$103 million in the “Other Revenue and Expenses” line, R$79 million higher than the previous quarter, chiefly due to the reversal of R$72 million in provisions for CPMF (financial transaction tax) occurred in the first quarter of 2009.

In the in the first half of 2009, expenses totaled R$128 million, in line with the first six months of 2008.

EBITDA

Second-quarter EBITDA totaled R$728 million, 7% up on the first quarter of 2009, primarily due to the increase in steel product sales volume and the decline in production costs.

In the first half of 2009 EBITDA stood at R$1.4 billion, 53% down year-on-year, due to the lower demand in the domestic and export markets.

Despite the adverse effects of the crisis, CSN showed strong resilience recording an EBITDA margin of 29% in the second quarter of 2009, 1 p.p. up on the previous three months.

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Financial Result and Debt

The second quarter of 2009 net financial result was positive by R$204 million, chiefly due to the following factors:

• Provisions for interest on loans and financing totaling R$255 million;
• Monetary restatement of tax provisions in accordance with the SELIC rate, amounting to R$92 million;
• Gains of R$344 million from derivative transactions, including the corresponding exchange variation;
• Monetary and exchange rate variation gain of R$143 million;
• Returns on financial investments, totaling R$55 million.

Consolidated net debt moved up by R$2.1 billion, from R$2.8 billion on March 31 to R$4.9 billion on June 30, 2009, due to the following factors:

• EBITDA of R$0.7 billion in the second quarter of 2009;
• Exchange gain variation of R$0.8 billion in the second quarter of 2009;
• Reduction of R$0.1 billion in the working capital invested in the business;
• Investments of R$0.5 billion;
• Payment of dividends and interest on equity of R$1.8 billion;
• A R$0.7 billion increase in judicial deposits;
• Payment of taxes (income tax + social contribution) totaling R$0.4 billion;
• Effect of R$0.3 billion related to cost of debt allocated to the business.

The net debt/EBITDA ratio, based on EBITDA of R$5.02 billion of the last 12 months, came to 0.97 time at the end of the second quarter, a 0.50 time increase over the 0.47 time recorded at the end of the first quarter of 2009.

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Income Taxes

In the second quarter of 2009, income tax and social contribution totaled R$274 million, R$189 million up on the first quarter of 2009, chiefly due to higher taxable income in the quarter and the impact of the appreciation of the Real against the US dollar on income tax and social contribution in the period. The effective income tax rate in the in the first half of 2009 was 34%.

Net Income

CSN posted in the second quarter of 2009 a net income of R$335 million, 9% down on the first quarter of 2009, chiefly due to the increase in income tax and social contribution. Pre-tax income totaled R$609 million in the second quarter of 2009, a 34% quarter-over-quarter improvement.

Investments

CSN invested R$501 million in the second quarter of 2009, R$405 million of which went to the parent company, mostly to the following projects:

• Expansion of the Casa de Pedra mine: R$179 million;
• Maintenance and repairs: R$80 million;
• Technological improvements: R$77 million;
• Expansion of the Port of Itaguaí: R$11 million;
• Works plan: R$11 million.

Investments in the subsidiaries accounted for the remaining R$96 million, mostly in:

• MRS Logística: R$26 million;
• CSN Cimentos: R$23 million;
• CSN Aços Longos: R$14 million;
• NAMISA: R$10 million;
• Transnordestina Logística: R$9 million;
• CSN LLC: R$7 million.

It is worth noting that after around 90 days of programmed maintenance stoppage at Blast Furnace 2, the equipment resumed operations in June 2009. CSN invested R$93 million in the modernization project, including the remodeling of regenerators. These amounts were booked under technological improvements in the in the first half of 2009.

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Cement

At the end of the second quarter of 2009, the Company began producing and selling cement under the CSN brand in the recently built plant adjacent to the Presidente Vargas Steelworks in the Volta Redonda complex.

With estimated production and sales of 300,000 tonnes in 2009, the plant marks CSN’s entry into yet another new business that has strong synergies with its existing activities, given that the project’s main advantages lie in its raw materials self-sufficiency and the use of previously existing logistics. The slag used in cement production comes from the Company’s blast furnace and the clinker currently acquired from third parties will shortly be produced in the CSN’s Arcos mine in the state of Minas Gerais. CSN also has its own railway and distribution infrastructure, which is essential for the sales process.

Working Capital

Working capital closed June at R$2.4 billion, R$89 million down on the March 31 figure, mainly thanks to the R$148 million decrease in assets, chiefly pressured by the R$426 downturn in “Inventories” and partially offset by the R$337 million increase in estimated tax payments made during the second quarter of 2009. This effect was partially offset by a R$60 million decline in liabilities, mostly due to the R$469 million decrease in the “Suppliers” account , partially reduced by the increase in Taxes Payable (R$380 million).

The average supplier payment period in June stood at 72 days, 27 days less when compared to March 2009, while the average receivables period shortened from 35 to 30 days. The inventory turnover period averaged 165 days, 24 days down on the previous quarter, mainly due to the reduction in semi-finished product inventories.

|  |  |  | R$ MILLION
WORKING CAPITAL |  | Mar/09 |  | Jun/09 |  | Change
Assets |  | 5,048 |  | 4,900 |  | 148
Accounts Receivable |  | 1,225 |  | 1,079 |  | 146
- Domestic Market |  | 1,096 |  | 1,110 |  | (14)
- Export Market |  | 369 |  | 246 |  | 122
- Allowance for Doubtful Accounts |  | (240) |  | (278) |  | 38
Inventory |  | 3,457 |  | 3,030 |  | 426
Advances to Suppliers |  | 289 |  | 377 |  | (88)
Prepaid Taxes |  | 77 |  | 414 |  | (337)
Liabilities |  | 2,558 |  | 2,498 |  | 60
Suppliers |  | 1,795 |  | 1,326 |  | 469
Salaries and Social Contribution |  | 106 |  | 130 |  | (24)
Taxes Payable |  | 596 |  | 976 |  | (380)
Advances from Clients |  | 61 |  | 66 |  | (5)
Working Capital |  | 2,491 |  | 2,402 |  | 89
TURN OVER RATIO |  |  |  |  |  |
Average Periods |  | Mar/09 |  | Jun/09 |  | Change
Receivables |  | 35 |  | 30 |  | 5
Supplier Payment |  | 99 |  | 72 |  | 27
Inventory Turnover |  | 189 |  | 165 |  | 24

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Capital Market

Share Performance

CSN’s shares appreciated by a hefty 61% in the in the first half of 2009, the fourth highest upturn among those companies making up the IBOVESPA index, versus 37% for the IBOVESPA itself. In the second quarter of 2009 CSN’s shares increased by 28%, while the IBOVESPA climbed by 26% in the same period.

On the NYSE, CSN’s ADRS moved up by an even more substantial 86% in the in the first half of 2009, which is especially significant given that the Dow Jones index fell by 4% in the same period. In the second quarter of 2009, CSN’s ADRs appreciated by 52%, versus an 11% upturn by the Dow Jones.

Second-quarter daily traded volume averaged R$108 million on the BOVESPA, versus R$103 million in the first quarter of 2009, and US$74 million on the NYSE, versus the previous quarter’s US$69 million.

CAPITAL MARKETS - CSNA3 / SID / IBOVESPA / DOW JONES
|  | 1Q09 |  | 2Q09 |  | 1H09
Number of shares |  | 793,403,838 |  | 793,403,838 |  | 793,403,838
Market Capitalization |  |  |  |  |  |
Closing Price (R$/share) |  | 34.40 |  | 43.62 |  | 43.62
Closing Price (US$/ADR) |  | 14.84 |  | 22.35 |  | 22.35
Market Capitalization (R$ million) |  | 26,098 |  | 33,093 |  | 33,093
Market Capitalization (US$ million) |  | 11,259 |  | 16,956 |  | 16,956
Total return including dividends and interest on equity |  |  |  |
CSNA3 |  | 26% |  | 28% |  | 61%
SID |  | 23% |  | 52% |  | 86%
Ibovespa |  | 9% |  | 26% |  | 37%
Dow Jones |  | -13% |  | 11% |  | -4%
Volume |  |  |  |  |  |
Average daily (thousand shares) |  | 2,983 |  | 2,520 |  | 2,752
Average daily (R$ thousand) |  | 103,340 |  | 107,974 |  | 105,657
Average daily (thousand ADRs) |  | 4,609 |  | 3,544 |  | 4,068
Average daily (US$ thousand) |  | 69,180 |  | 74,196 |  | 71,729
Source: Economática |  |  |  |  |  |

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The Company’s financial information presented herein complies with criteria of the Brazilian Corporation Law, with reviewed financial information. The non-financial information, as well as other operating information was not reviewed by independent auditors.

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09.01 - EQUITY IN SUBSIDIARIES AND/OR ASSOCIATED COMPANIES

1 - ITEM | 2 - NAME OF SUBSIDIARY/AFFILIATED COMPANY | 3 - CNPJ (Corporate Taxpayer’s ID) | 4 - CLASSIFICATION | 5 - PARTICIPATION IN CAPITAL OF INVESTEE - % | 6 – INVESTOR’S SHAREHOLDERS' EQUITY - %
7 - TYPE OF COMPANY | 8 - NUMBER OF SHARES HELD IN CURRENT QUARTER (in thousands) | 9 - NUMBER OF SHARES HELD IN PREVIOUS QUARTER (in thousands)

01 | CSN OVERSEAS | 05.722.388/0001-58 | PRIVATE SUBSIDIARY | 100.00 | 15.63
COMMERCIAL, INDUSTRY AND OTHER TYPES OF COMPANY | 7,173 | 7,173
02 | CSN STEEL | 05.706.345/0001-89 | PRIVATE SUBSIDIARY | 100.00 | 22.41
COMMERCIAL, INDUSTRY AND OTHER TYPES OF COMPANY | 480,727 | 480,727
03 | COMPANHIA METALURGICA PRADA | 56.993.900/0001-31 | PRIVATE SUBSIDIARY | 99.99 | 8.11
COMMERCIAL, INDUSTRY AND OTHER TYPES OF COMPANY | 3,155 | 3,155
04 | CSN ENERGY | 06.202.987/0001-03 | PRIVATE SUBSIDIARY | 100.00 | 12.91
COMMERCIAL, INDUSTRY AND OTHER TYPES OF COMPANY | 3,675 | 3,675
05 | ITAGUAÍ LOGÍSTICA | 09.295.323/0001-24 | PRIVATE SUBSIDIARY | 99.99 | 0.01
COMMERCIAL, INDUSTRY AND OTHER TYPES OF COMPANY | 1,000 | 1,000
06 | AÇOS LONGOS | 05.023.529/0001-44 | PRIVATE SUBSIDIARY | 99.99 | 0.53
COMMERCIAL, INDUSTRY AND OTHER TYPES OF COMPANY | 41,826 | 41,826
07 | CSN CIMENTOS | 42.564.807/0001-05 | PRIVATE SUBSIDIARY | 99.99 | 4.71
COMMERCIAL, INDUSTRY AND OTHER TYPES OF COMPANY | 722,041 | 122,814
08 | CIA METALIC DO NORDESTE | 01.183.070/0001-95 | PRIVATE SUBSIDIARY | 99.99 | 1.33
COMMERCIAL, INDUSTRY AND OTHER TYPES OF COMPANY | 92,284 | 92,284
09 | INAL NORDESTE | 00.904.638/0001-57 | PRIVATE SUBSIDIARY | 99.99 | 0.58
COMMERCIAL, INDUSTRY AND OTHER TYPES OF COMPANY | 43,981 | 37,796

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10 | CSN PANAMA | 05.923.777/0001-41 | PRIVATE SUBSIDIARY | 100.00 | 10.49
COMMERCIAL, INDUSTRY AND OTHER TYPES OF COMPANY | 4,240 | 4,240
11 | CSN ENERGIA | 03.537.249/0001-29 | PRIVATE SUBSIDIARY | 99.99 | 0.90
COMMERCIAL, INDUSTRY AND OTHER TYPES OF COMPANY | 1 | 1
12 | MINAS PELOTIZAÇÃO | 09.295.323/0001-24 | PRIVATE SUBSIDIARY | 99.99 | 0.01
COMMERCIAL, INDUSTRY AND OTHER TYPES OF COMPANY | 1,000 | 1,000
13 | CONGONHAS MINÉRIOS | 08.902.291/0001-15 | PRIVATE SUBSIDIARY | 99.99 | 0.08
COMMERCIAL, INDUSTRY AND OTHER TYPES OF COMPANY | 5,009 | 5,009
14 | GALVASUD | 02.618.456/0001-45 | PRIVATE SUBSIDIARY | 99.99 | 10.35
COMMERCIAL, INDUSTRY AND OTHER TYPES OF COMPANY | 11,609,510 | 11,609,510
15 | NACIONAL MINÉRIOS | 08.446.702/0001-05 | PRIVATE SUBSIDIARY | 59.99 | 120.94
COMMERCIAL, INDUSTRY AND OTHER TYPES OF COMPANY | 284,984 | 284,984

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16 | SEPETIBA TECON | 02.394.276/0001-27 | PRIVATE SUBSIDIARY | 99.99 | 2.68
COMMERCIAL, INDUSTRY AND OTHER TYPES OF COMPANY | 253,990 | 253,990
17 | TRANSNORDESTINA LOGÍSTICA S.A | 02.281.836/0001-37 | PUBLICLY-HELD SUBSIDIARY | 81.60 | 5.92
COMMERCIAL, INDUSTRY AND OTHER TYPES OF COMPANY | 486,516 | 214,523
18 | ITÁ ENERGÉTICA | 01.355.994/0002-02 | PUBLICLY-HELD SUBSIDIARY | 48.75 | 9.02
COMMERCIAL, INDUSTRY AND OTHER TYPES OF COMPANY | 253,607 | 253,607
19 | MRS LOGÍSTICA | 01.417.222/0001-77 | PUBLICLY-HELD SUBSIDIARY | 27.27 | 25.50
COMMERCIAL, INDUSTRY AND OTHER TYPES OF COMPANY | 92,718 | 92,718
20 | ESTANHO DE RONDÔNIA ERSA | 00.684.808/0001-35 | PRIVATE SUBSIDIARY | 99.99 | 0.26
COMMERCIAL, INDUSTRY AND OTHER TYPES OF COMPANY | 34,233 | 34,233
21 | CSN EXPORT | 05.760.237/0001-94 | PRIVATE SUBSIDIARY | 100.00 | 3.82
COMMERCIAL, INDUSTRY AND OTHER TYPES OF COMPANY | 1,036 | 1,036

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14.01 – CHARACTERISTICS OF PUBLIC OR PRIVATE ISSUANCE OF DEBENTURES

1 – ITEM | 05
2 –ORDER No. | 4
3 –REGISTRATION No. AT CVM | CVM/SRE/DEB/2006/01 1
4 – REGISTRATION DATE AT CVM | 4/28/2006
5 – SERIES ISSUED | UNIT
6 – TYPE OF ISSUANCE | SIMPLE
7 – NATURE OF ISSUANCE | PUBLIC
8 – DATE OF ISSUANCE | 2/1/2006
9 – EXPIRATION DATE | 2/1/2012
10 – TYPE OF DEBENTURE | WITHOUT PREFERENCE
11 – CONDITION FOR CURRENT REMUNERATION |
12 – PREMIUM/DISCOUNT |
13 – NOMINAL VALUE (Reais) | 10,000.00
14 – AMOUNT ISSUED (Thousands of Reais) | 600,000
15 – NUMBER OF SECURITIES ISSUED (UNIT) | 60,000
16 – OUTSTANDING SECURITIES (UNIT) | 60,000
17 – TREASURY SECURITIES (UNIT) | 0
18 – SECURITIES REDEEMED (UNIT) | 0
19 – CONVERTED SECURITIES (UNIT) | 0
20 – SECURITIES TO BE DISTRIBUTED (UNIT) | 0
21 – DATE OF THE LAST RENEGOTIATION |
22 – DATE OF NEXT EVENT | 8/1/2009

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19.01 – INVESTMENT PROJECTS

We highlight, among the Company’s main investments, the expansion in the production capacity of the Casa de Pedra mine, of Aços Longos and of Itaguaí Port as of June 30,2009. The Company also maintains investment project balances in the amounts of R$628,998, R$36,447 and R$14,189, respectively.

For further information, see comments on the consolidated quarterly performance.

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20.01 – OTHER INFORMATION DEEMED AS RELEVANT BY THE COMPANY

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21.01 – SPECIAL REVIEW REPORT - UNQUALIFIED

Independent auditor’s review report
(a free translation from the original in Portuguese)

To the Board of Directors of
Companhia Siderúrgica Nacional
Rio de Janeiro - RJ

1. We have reviewed the accounting information contained in the Quarterly Financial Information of Companhia Siderúrgica Nacional (the Company) and in the consolidated Quarterly Financial Information of the Company and its subsidiaries for the quarter ended June 30, 2009, comprising the balance sheet, the statements of income, of changes in shareholders’ equity, cash flows, added value, explanatory notes and the management report, which are the responsibility of its management.

2. Our review was conducted in accordance with the standards set by IBRACON - The Brazilian Institute of Independent Auditors, in conjunction with the Federal Accounting Council - CFC and consisted mainly of the following: (a) inquiry and discussion with management responsible for the accounting, financial and operational areas of the Company and its subsidiaries, regarding the main criteria adopted in the preparation of the Quarterly Financial Information; and (b) reviewing information and subsequent events that have or may have relevant effects on the financial position and operations of the Company and its subsidiaries.

3. Based on our review, we are not aware of any material modifications that should be made to the accounting information contained in the Quarterly Financial Information referred above, in order to be in accordance with the standards issued by the Brazilian Securities and Exchange Commission (CVM), applicable to the preparation of the Quarterly Financial Information, including CVM Instruction 469/08.

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4. As mentioned in Note 2, the accounting practices adopted in Brazil changed during 2008 and the effects of the first time adoption were only recorded by the Company and its subsidiaries during the fourth quarter of 2008 and incorporated into in the annual financial statements as of December 31, 2008. The statements of income, changes in shareholders’ equity, cash flows and added value, for the quarter ended June 30, 2008, presented in conjunction with the current quarterly information, are not being restated for comparison purposes, as permitted by Circular Notice /CVM/SNC/SEP 02/2009.

5. As mentioned in Note 29, the Company has been negotiating with insurance and reinsurance companies in Brazil and abroad, in order to obtain insurance coverage for its operational risks.

August 6, 2009

KPMG Auditores Independentes |  |
CRC 2SP014428/O-6-F-RJ |  |
Original in Portuguese signed by |  |
Anselmo Neves Macedo |  | Carla Bellangero
Accountant CRC 1SP160482/O-6-S-RJ |  | Accountant CRC 1SP196751/O-4-S-RJ

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TABLE OF CONTENTS

GROUP | TABLE | DESCRIPTION | PAGE
01 | 01 | IDENTIFICATION | 1
01 | 02 | HEAD OFFICE | 1
01 | 03 | INVESTOR RELATIONS OFFICER (Company Mailing Address) | 1
01 | 04 | ITR REFERENCE | 1
01 | 05 | CAPITAL STOCK | 2
01 | 06 | COMPANY PROFILE | 2
01 | 07 | COMPANIES NOT INCLUDED IN THE CONSOLIDATED FINANCIAL STATEMENTS | 2
01 | 08 | CASH DIVIDENDS | 2
01 | 09 | SUBSCRIBED CAPITAL AND CHANGES IN THE CURRENT YEAR | 3
01 | 10 | INVESTOR RELATIONS OFFICER | 3
02 | 01 | BALANCE SHEET – ASSETS | 4
02 | 02 | BALANCE SHEET – LIABILITIES | 6
03 | 01 | STATEMENT OF INCOME | 8
04 | 01 | 04 - STATEMENT OF CASH FLOWS | 10
05 | 01 | 05 - STATEMENT OF CHANGES IN SHAHOLDERS’ EQUITY FROM 4/1/2009 TO 6/30/2009 | 12
05 | 02 | 05 - STATEMENT OF CHANGES IN SHAHOLDERS’ EQUITY FROM 1/1/2009 TO 6/30/2009 | 13
08 | 01 | CONSOLIDATED BALANCE SHEET – ASSETS | 14
08 | 02 | CONSOLIDATED BALANCE SHEET – LIABILITIES | 16
09 | 01 | CONSOLIDATED STATEMENT OF INCOME | 18
10 | 01 | 10.01 - CONSOLIDATED STATEMENT OF CASH FLOWS | 20
11 | 01 | 11 – CONSOLIDATED STATEMENT OF CHANGES IN SHAHOLDERS’ EQUITY FROM 4/1/2009 TO 6/30/2009 | 22
11 | 02 | 11 – CONSOLIDATED STATEMENT OF CHANGES IN SHAHOLDERS’ EQUITY FROM 1/1/2009 TO 6/30/2009 | 23
06 | 01 | NOTES TO THE FINANCIAL STATEMENTS | 24
07 | 01 | COMMENTS ON THE COMPANY’S PERFORMANCE IN THE QUARTER | 79
12 | 01 | COMMENTS ON THE CONSOLIDATED PERFORMANCE IN THE QUARTER | 80
13 | 01 | EQUITY IN SUBSIDIARIES AND/OR ASSOCIATED COMPANIES | 92
14 | 01 | CHARACTERISTICS OF PUBLIC OR PRIVATE ISSUANCE OF DEBENTURES | 95
19 | 01 | INVESTMENT PROJECTS | 96
20 | 01 | OTHER INFORMATION DEEMED AS RELEVANT BY THE COMPANY | 97
21 | 01 | SPECIAL REVIEW REPORT | 98
|  | CSN OVERSEAS |
|  | CSN STEEL |
|  | COMPANHIA METALURGICA PRADA |
|  | CSN ENERGY |
|  | ITAGUAÍ LOGÍSTICA |
|  | AÇOS LONGOS |
|  | CSN CIMENTOS |
|  | CIA METALIC DO NORDESTE |
|  | INAL NORDESTE |
|  | CSN PANAMA |
|  | CSN ENERGIA |
|  | MINAS PELOTIZAÇÃO |

100

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TABLE OF CONTENTS

GROUP | TABLE | DESCRIPTION | PAGE
|  | CONGONHAS MINÉRIOS |
|  | GALVASUD |
|  | NACIONAL MINÉRIOS |
|  | SEPETIBA TECON |
|  | TRANSNORDESTINA LOGÍSTICA S.A |
|  | ITÁ ENERGÉTICA |
|  | MRS LOGÍSTICA |
|  | ESTANHO DE RONDÔNIA ERSA |
|  | CSN EXPORT |

101

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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: August 28, 2009

COMPANHIA SIDERÚRGICA NACIONAL
By: | /S/ Benjamin Steinbruch
| Benjamin Steinbruch Chief Executive Officer

By: | /S/ Paulo Penido Pinto Marques
| Paulo Penido Pinto Marques Chief Financial Officer and Investor Relations Officer

FORWARD-LOOKING STATEMENTS

This press release may contain forward-looking statements. These statements are statements that are not historical facts, and are based on management's current view and estimates of future economic circumstances, industry conditions, company performance and financial results. The words "anticipates", "believes", "estimates", "expects", "plans" and similar expressions, as they relate to the company, are intended to identify forward-looking statements. Statements regarding the declaration or payment of dividends, the implementation of principal operating and financing strategies and capital expenditure plans, the direction of future operations and the factors or trends affecting financial condition, liquidity or results of operations are examples of forward-looking statements. Such statements reflect the current views of management and are subject to a number of risks and uncertainties. There is no guarantee that the expected events, trends or results will actually occur. The statements are based on many assumptions and factors, including general economic and market conditions, industry conditions, and operating factors. Any changes in such assumptions or factors could cause actual results to differ materially from current expectations.