<SEC-DOCUMENT>0001292814-16-003288.txt : 20170224
<SEC-HEADER>0001292814-16-003288.hdr.sgml : 20170224
<ACCEPTANCE-DATETIME>20160114142425
<PRIVATE-TO-PUBLIC>
ACCESSION NUMBER:		0001292814-16-003288
CONFORMED SUBMISSION TYPE:	CORRESP
PUBLIC DOCUMENT COUNT:		2
FILED AS OF DATE:		20160114

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			NATIONAL STEEL CO
		CENTRAL INDEX KEY:			0001049659
		STANDARD INDUSTRIAL CLASSIFICATION:	STEEL WORKS, BLAST FURNACES & ROLLING & FINISHING MILLS [3310]
		IRS NUMBER:				000000000
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		CORRESP

	BUSINESS ADDRESS:	
		STREET 1:		RUA LAURO MULLER
		STREET 2:		116 36 ANDAR
		CITY:			RIO DE JANEIRO RJ BR
		STATE:			D5
		ZIP:			00000
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<DOCUMENT>
<TYPE>CORRESP
<SEQUENCE>1
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<P style="TEXT-ALIGN: right; MARGIN: 0cm 0cm 12pt 324pt" align=right><FONT lang=EN-US style="FONT-SIZE: 12pt" face="Times New Roman">January 14, 2016</FONT></P>

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<P style="MARGIN: 0cm 0cm 12pt"><U><FONT lang=EN-US style="FONT-SIZE: 12pt" face="Times New Roman">Via Email</FONT></U></P>

<P style="MARGIN: 0cm 0cm 12pt"><FONT lang=EN-US style="FONT-SIZE: 12pt" face="Times New Roman">Mr. Terence O&#8217;Brien<BR>Branch Chief <BR>Office of Manufacturing and Construction <BR>United States Securities and Exchange Commission<BR>100 F Street, N.E.<BR>Washington, D.C. 20549-4631</FONT></P>

<P style="MARGIN: 0cm 0cm 12pt 72pt; TEXT-INDENT: -36pt"><B><FONT lang=EN-US style="FONT-SIZE: 12pt" face="Times New Roman">Re:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT></B><FONT lang=EN-US style="FONT-SIZE: 12pt" face="Times New Roman">National Steel Company<BR>Form 20-F for the fiscal year ended December 31, 2014<BR>Filed April 30, 2015<BR>File No. 1-14732<BR>Response to Staff Comment Letter dated December 15, 2015</FONT></P>

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<P style="MARGIN: 0cm 0cm 12pt"><FONT lang=EN-US style="FONT-SIZE: 12pt" face="Times New Roman">Dear Mr. O&#8217;Brien:</FONT></P>

<P style="TEXT-ALIGN: justify; MARGIN: 0cm 0cm 12pt"><FONT lang=EN-US style="FONT-SIZE: 12pt" face="Times New Roman">Companhia Sider&#250;rgica Nacional (the &#8220;</FONT><U><FONT lang=EN-US style="FONT-SIZE: 12pt" face="Times New Roman">Company</FONT></U><FONT lang=EN-US style="FONT-SIZE: 12pt" face="Times New Roman">&#8221;) received a comment letter from the staff of the United States Securities and Exchange Commission (the &#8220;</FONT><U><FONT lang=EN-US style="FONT-SIZE: 12pt" face="Times New Roman">Staff</FONT></U><FONT lang=EN-US style="FONT-SIZE: 12pt" face="Times New Roman">&#8221;) on December 15, 2015, concerning the Company&#8217;s annual report on Form 20-F filed on April 30, 2015 (the &#8220;</FONT><U><FONT lang=EN-US style="FONT-SIZE: 12pt" face="Times New Roman">2014 Form 20-F</FONT></U><FONT lang=EN-US style="FONT-SIZE: 12pt" face="Times New Roman">&#8221;).&nbsp; This letter provides the Company&#8217;s responses to the Staff&#8217;s comments. For your convenience, we have reproduced below in italics the Staff&#8217;s comments numbered 1 through 4 and have provided responses immediately below such comments. All page numbers referred to herein are to the 2014 Form 20-F.</FONT></P>

<P style="PAGE-BREAK-AFTER: avoid; MARGIN: 0cm 0cm 12pt"><B><FONT lang=EN-US style="FONT-SIZE: 12pt" face="Times New Roman">SEC Comment No. 1.</FONT></B></P>

<P style="PAGE-BREAK-AFTER: avoid; MARGIN: 0cm 0cm 12pt"><U><FONT lang=EN-US style="FONT-SIZE: 11.5pt" color=black face="Times New Roman">Note 2 &#8211; Summary of Significant Accounting Policies, page FS-8</FONT></U></P>

<P style="PAGE-BREAK-AFTER: avoid; MARGIN: 0cm 0cm 12pt"><U><FONT lang=EN-US style="FONT-SIZE: 11.5pt" color=black face="Times New Roman">2.n) Concessions, page FS-16</FONT></U></P>

<P style="MARGIN: 0cm 0cm 12pt 36pt; TEXT-INDENT: -36pt"><I><FONT lang=EN-US style="FONT-SIZE: 12pt" face="Times New Roman">1)</FONT></I><I><FONT lang=EN-US style="FONT-SIZE: 7pt" face="times new roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT></I><I><FONT lang=EN-US style="FONT-SIZE: 12pt" face="Times New Roman">With reference to the specific terms of your material concession arrangements as well as the guidance set forth in IFRIC 12, please tell us why you account for your concessions as operating leases.</FONT></I></P>

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   <P style="TEXT-ALIGN: center; MARGIN: 0cm 0cm 0pt" align=center><FONT style="DISPLAY: none"><FONT style="FONT-SIZE: 6pt" face="Times New Roman">Av. Brigadeiro Faria Lima, 3400 &#8211; 20&#186; andar</FONT><FONT><FONT style="FONT-SIZE: 6pt" face="Times New Roman"> </FONT></FONT><FONT style="FONT-SIZE: 6pt" face="Times New Roman">- Edificio Financial Faria Lima Center</FONT></FONT></P>

   <P style="TEXT-ALIGN: center; MARGIN: 0cm 0cm 0pt" align=center><FONT style="DISPLAY: none"><FONT lang=EN-US style="FONT-SIZE: 6pt" face="Times New Roman">Cep: 04538-132</FONT><FONT><FONT lang=EN-US style="FONT-SIZE: 6pt" face="Times New Roman"> </FONT></FONT><FONT lang=EN-US style="FONT-SIZE: 6pt" face="Times New Roman">- S&#227;o Paulo - SP</FONT></FONT></P>

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<P style="PAGE-BREAK-AFTER: avoid; MARGIN: 0cm 0cm 12pt; TEXT-INDENT: 0cm"><B><FONT lang=EN-US style="FONT-SIZE: 12pt" face="Times New Roman">Response to Comment No. 1. </FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN: 0cm 0cm 12pt"><FONT lang=EN-US style="FONT-SIZE: 12pt" face="Times New Roman">We record our concession arrangements as operating leases because these arrangements provide for the use of a specific asset for an agreed upon period of time, as provided under IAS 17, but without any transfer of ownership of the assets to us upon termination of these arrangements or an option to purchase the assets at any time.</FONT></P>

<P style="TEXT-ALIGN: justify; MARGIN: 0cm 0cm 12pt"><FONT lang=EN-US style="FONT-SIZE: 12pt" face="Times New Roman">Below is a summary of the specific terms of our material concessions: </FONT></P>

<P style="TEXT-ALIGN: justify; MARGIN: 0cm 0cm 12pt 1cm"><U><FONT lang=EN-US style="FONT-SIZE: 12pt" face="Times New Roman">TECON</FONT></U><FONT lang=EN-US style="FONT-SIZE: 12pt" face="Times New Roman">: The Rio de Janeiro Port Authority (&#8220;</FONT><I><FONT lang=EN-US style="FONT-SIZE: 12pt" face="Times New Roman">Companhia Docas do Rio de Janeiro </FONT></I><FONT lang=EN-US style="FONT-SIZE: 12pt" face="Times New Roman">- CDRJ&#8221;) granted us the right to operate the container terminal in the Port of Sepetiba (&#8220;TECON&#8221;), which includes the leasing of: (i) three cradles of berthing containing rail line; (ii) a paved area in rolled concrete and; (iii) an additional area for logistical support within the Port of Sepetiba, for 25 years renewable for an additional 25 years period. Upon termination of the concession and lease contract, all rights and assets, including those resulting from our investments, will return to CDRJ. CDRJ will reimburse us the residual value of the assets.</FONT></P>

<P style="TEXT-ALIGN: justify; MARGIN: 0cm 0cm 12pt 1cm"><U><FONT lang=EN-US style="FONT-SIZE: 12pt" face="Times New Roman">TECAR</FONT></U><FONT lang=EN-US style="FONT-SIZE: 12pt" face="Times New Roman">: CDRJ granted us the right to operate the coal terminal in the Port of Sepetiba (&#8220;TECAR&#8221;), which includes the leasing of a 700,000 square meters area, for 25 years renewable for an additional 25 years period. Upon termination of the concession and lease contract, all rights and assets, including those resulting from our investments, will return to CDRJ. CDRJ will reimburse us the residual value of the assets.</FONT></P>

<P style="TEXT-ALIGN: justify; MARGIN: 0in 0in 12pt 28.35pt"><U><FONT lang=EN-US style="FONT-SIZE: 12pt" face="Times New Roman">FTL</FONT></U><FONT lang=EN-US style="FONT-SIZE: 12pt" face="Times New Roman">: we have been granted the right to operate the former Northeastern Railway System, or RFFSA, which includes the lease of related operating assets. The term of the concession agreement is 30 years renewable for an additional 30 year period. Upon termination of the concession and lease contract, all rights and assets, including those resulting from our investments, will return to RFFSA. RFFSA will reimburse us for the residual value of the assets.</FONT></P>

<P style="TEXT-ALIGN: justify; MARGIN: 0cm 0cm 12pt 1cm"><U><FONT lang=EN-US style="FONT-SIZE: 12pt" face="Times New Roman">TLSA and MRS:</FONT></U><FONT lang=EN-US style="FONT-SIZE: 12pt" face="Times New Roman"> because these concessions are held by entities that are not consolidated in our financial statements, the concessions and its assets are only indirectly reflected in our financial statements through the equity method.</FONT></P>

<P style="TEXT-ALIGN: justify; MARGIN: 0cm 0cm 12pt"><FONT lang=EN-US style="FONT-SIZE: 12pt" face="Times New Roman">We recorded the payments made upon the signing of the above mentioned contracts as prepaid expenses in current and non-current assets which are charged to income in a straight&nbsp;line method for the duration of the concession. </FONT></P>

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   <P style="TEXT-ALIGN: center; MARGIN: 0cm 0cm 0pt" align=center><FONT style="DISPLAY: none"><FONT style="FONT-SIZE: 6pt" face="Times New Roman">Av. Brigadeiro Faria Lima, 3400 &#8211; 20&#186; andar</FONT><FONT><FONT style="FONT-SIZE: 6pt" face="Times New Roman"> </FONT></FONT><FONT style="FONT-SIZE: 6pt" face="Times New Roman">- Edificio Financial Faria Lima Center</FONT></FONT></P>

   <P style="TEXT-ALIGN: center; MARGIN: 0cm 0cm 0pt" align=center><FONT style="DISPLAY: none"><FONT lang=EN-US style="FONT-SIZE: 6pt" face="Times New Roman">Cep: 04538-132</FONT><FONT><FONT lang=EN-US style="FONT-SIZE: 6pt" face="Times New Roman"> </FONT></FONT><FONT lang=EN-US style="FONT-SIZE: 6pt" face="Times New Roman">- S&#227;o Paulo - SP</FONT></FONT></P>

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<P style="TEXT-ALIGN: justify; MARGIN: 0cm 0cm 12pt"><FONT lang=EN-US style="FONT-SIZE: 12pt" face="Times New Roman">The assets of TECAR are integrated within our operating segments, being used for coal imports in our steel segment and export of iron ore in the seaborne market in our mining segment. Therefore, the assets of TECAR are an extension of the steel and mining business and not a cash-generating unit.</FONT></P>

<P style="TEXT-ALIGN: justify; MARGIN: 0cm 0cm 12pt"><FONT lang=EN-US style="FONT-SIZE: 12pt" face="Times New Roman">In addition, in our view, our concessions do not meet the requirements of IFRIC 12 because, as discussed below, the grantor effectively neither regulates or controls to whom we provide the service nor regulates or controls the prices charged to customers. </FONT></P>

<P style="TEXT-ALIGN: justify; MARGIN: 0cm 0cm 12pt"><FONT lang=EN-US style="FONT-SIZE: 12pt" face="Times New Roman">Under the TECAR concession and lease agreement we may provide logistical port services to third parties (i.e. not only for our internal use) in a volume of up to 5% of the total installed capacity, but without any restriction or obligation regarding specific third-parties or minimum volumes. </FONT></P>

<P style="TEXT-ALIGN: justify; MARGIN: 0cm 0cm 12pt"><FONT lang=EN-US style="FONT-SIZE: 12pt" face="Times New Roman">The concession and lease agreement for TECAR technically provides a maximum price that may be charged to customers. However, because the pricing table sets the price for a maximum of four days of stay for imports, and six days for exports and, as&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; a practical matter, for most operations the time of stay exceeds the four- and six- day limits, prices are effectively freely set by us. Furthermore, while technically the concession and lease agreement provides that prices for other services should be approved by CDRJ, in practice the approval is only a notice obligation as CDRJ always accepts the prices proposed by us.</FONT></P>

<P style="TEXT-ALIGN: justify; MARGIN: 0in 0in 12pt"><FONT lang=EN-US style="FONT-SIZE: 12pt" face="Times New Roman">The concession and lease agreements for FTL and TECON do not have any similar limitations and, as a result, we are free to set prices and decide to whom we provide services.</FONT></P>

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<P style="PAGE-BREAK-AFTER: avoid; MARGIN: 0cm 0cm 12pt; TEXT-INDENT: 0cm"><B><FONT lang=EN-US style="FONT-SIZE: 12pt" face="Times New Roman">SEC Comment No. 2.</FONT></B></P>

<P style="PAGE-BREAK-AFTER: avoid; MARGIN: 0cm 0cm 12pt; TEXT-INDENT: 0cm"><U><FONT lang=EN-US style="FONT-SIZE: 12pt" face="Times New Roman">2.v) Financial instruments, page FS-18</FONT></U></P>

<P style="PAGE-BREAK-AFTER: avoid; MARGIN: 0cm 0cm 12pt 21.3pt; TEXT-INDENT: -14.2pt"><FONT lang=EN-US style="FONT-SIZE: 12pt" face=symbol>&#183;</FONT><FONT lang=EN-US style="FONT-SIZE: 7pt" face="times new roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT><U><FONT lang=EN-US style="FONT-SIZE: 12pt" face="Times New Roman">Recognition and measurement, page FS-19</FONT></U></P>

<P style="TEXT-ALIGN: justify; MARGIN: 0cm 0cm 12pt 36pt; TEXT-INDENT: -36pt"><I><FONT lang=EN-US style="FONT-SIZE: 12pt" face="Times New Roman">2)</FONT></I><I><FONT lang=EN-US style="FONT-SIZE: 7pt" face="times new roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT></I><I><FONT lang=EN-US style="FONT-SIZE: 12pt" face="Times New Roman">Please clarify the nature of the option you refer to in (ii) and your basis for this accounting.</FONT></I></P>

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   <P style="TEXT-ALIGN: center; MARGIN: 0cm 0cm 0pt" align=center><FONT style="DISPLAY: none"><FONT style="FONT-SIZE: 6pt" face="Times New Roman">Av. Brigadeiro Faria Lima, 3400 &#8211; 20&#186; andar</FONT><FONT><FONT style="FONT-SIZE: 6pt" face="Times New Roman"> </FONT></FONT><FONT style="FONT-SIZE: 6pt" face="Times New Roman">- Edificio Financial Faria Lima Center</FONT></FONT></P>

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<P style="PAGE-BREAK-AFTER: avoid; MARGIN: 0cm 0cm 12pt; TEXT-INDENT: 0cm"><B><FONT lang=EN-US style="FONT-SIZE: 12pt" face="Times New Roman">Response to Comment No. 2. </FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN: 0cm 0cm 12pt"><FONT lang=EN-US style="FONT-SIZE: 12pt" face="Times New Roman">We do not currently have options transactions of any nature, although we mentioned accounting for options within our accounting policies. Accordingly, we propose to exclude this information from our accounting policies in future filings to avoid confusion.</FONT></P>

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<P style="PAGE-BREAK-AFTER: avoid; MARGIN: 0cm 0cm 12pt 36pt; TEXT-INDENT: -36pt"><B><FONT lang=EN-US style="FONT-SIZE: 12pt" face="Times New Roman">SEC Comment No. 3.</FONT></B></P>

<P style="PAGE-BREAK-AFTER: avoid; MARGIN: 0cm 0cm 12pt; TEXT-INDENT: 0cm"><U><FONT lang=EN-US style="FONT-SIZE: 11.5pt" face="Times New Roman">Note 11 &#8211; Financial Instruments, page FS-43</FONT></U></P>

<P style="PAGE-BREAK-AFTER: avoid; MARGIN: 0cm 0cm 12pt; TEXT-INDENT: 0cm"><U><FONT lang=EN-US style="FONT-SIZE: 11.5pt" face="Times New Roman">II &#8211; Investments in financial instruments classified as available-for-sale and measured at fair value through OCI, page FS-44</FONT></U></P>

<P style="PAGE-BREAK-AFTER: avoid; MARGIN: 0cm 0cm 12pt; TEXT-INDENT: 0cm"><U><FONT lang=EN-US style="FONT-SIZE: 11.5pt" face="Times New Roman">Potential impairment of available-for-sale financial assets, page FS-44</FONT></U></P>

<P style="MARGIN: 0cm 0cm 12pt 36pt; TEXT-INDENT: -36pt"><I><FONT lang=EN-US style="FONT-SIZE: 12pt" face="Times New Roman">3)</FONT></I><I><FONT lang=EN-US style="FONT-SIZE: 7pt" face="times new roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT></I><I><FONT lang=EN-US style="FONT-SIZE: 12pt" face="Times New Roman">We have the following comments regarding your accounting for your available for sale investment in Usiminas:</FONT></I></P>

<P style="MARGIN: 0cm 0cm 12pt 36pt; TEXT-INDENT: 0cm"><I><FONT lang=EN-US style="FONT-SIZE: 12pt" face="Times New Roman">Your disclosure in Note 7.b on page FS-27 indicates that the R$(970,266) comprehensive income &#8220;refers to the mark-to-market of investment in Usiminas and Panatlantica.&#8221;&nbsp; Please tell us the amount of the mark-to-market adjustment that relates to Usiminas;</FONT></I></P>

<P style="MARGIN: 0cm 0cm 12pt 36pt; TEXT-INDENT: 0cm"><I><FONT lang=EN-US style="FONT-SIZE: 12pt" face="Times New Roman">With reference to paragraphs 67 through 69 of IAS 39, please reconcile the mark-to-market adjustment that relates to Usiminas to the R$205,000 reclassified to other operating expenses. This reconciliation should include the cost basis of both your common and preferred stock of Usiminas.&nbsp; Please demonstrate that the amount of the loss reclassified from equity to profit or loss is the difference between the acquisition costs and current fair values, less any impairment losses that were previously recognized on these investments; and</FONT></I></P>

<P style="MARGIN: 0cm 0cm 12pt 36pt; TEXT-INDENT: 0cm"><I><FONT lang=EN-US style="FONT-SIZE: 12pt" face="Times New Roman">Please reconcile the change in your Usiminas balance sheet amount of R2,380,355 as of December 31, 2013 to R$1,490,440 to the amount amounts reflected in profit and loss and equity.&nbsp; We note your disclosure stating &#8220;Beginning this date, pursuant to a Company&#8217;s policy, gains and losses arising from the changes in the quoted prices of the shares are recognized in other comprehensive income.&#8221;&nbsp; Please clarify the date you are referring to and what you are trying to convey with this statement.</FONT></I></P>

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<H1 style="PAGE-BREAK-AFTER: avoid; TEXT-ALIGN: center; MARGIN: 0cm 18pt 0pt 0cm; LINE-HEIGHT: 10pt" align=center><B><FONT style="FONT-SIZE: 9pt" face="Times New Roman">Companhia Sider&#250;rgica Nacional</FONT></B></H1></TD></TR>

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   <P style="TEXT-ALIGN: center; MARGIN: 0cm 0cm 0pt" align=center><FONT style="DISPLAY: none"><FONT style="FONT-SIZE: 6pt" face="Times New Roman">Escrit&#243;rio Central</FONT></FONT></P>

   <P style="TEXT-ALIGN: center; MARGIN: 0cm 0cm 0pt" align=center><FONT style="DISPLAY: none"><FONT style="FONT-SIZE: 6pt" face="Times New Roman">Av. Brigadeiro Faria Lima, 3400 &#8211; 20&#186; andar</FONT><FONT><FONT style="FONT-SIZE: 6pt" face="Times New Roman"> </FONT></FONT><FONT style="FONT-SIZE: 6pt" face="Times New Roman">- Edificio Financial Faria Lima Center</FONT></FONT></P>

   <P style="TEXT-ALIGN: center; MARGIN: 0cm 0cm 0pt" align=center><FONT style="DISPLAY: none"><FONT lang=EN-US style="FONT-SIZE: 6pt" face="Times New Roman">Cep: 04538-132</FONT><FONT><FONT lang=EN-US style="FONT-SIZE: 6pt" face="Times New Roman"> </FONT></FONT><FONT lang=EN-US style="FONT-SIZE: 6pt" face="Times New Roman">- S&#227;o Paulo - SP</FONT></FONT></P>

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<P style="PAGE-BREAK-AFTER: avoid; MARGIN: 0cm 0cm 12pt; TEXT-INDENT: 0cm"><B><FONT lang=EN-US style="FONT-SIZE: 12pt" face="Times New Roman">Response to Comment No. 3. </FONT></B></P>

<P style="PAGE-BREAK-AFTER: avoid; MARGIN: 0cm 0cm 12pt"><FONT lang=EN-US style="FONT-SIZE: 12pt" face="Times New Roman">We have detailed below the amount of the mark-to-market adjustment that relates to Usiminas and Panatl&#226;ntica mentioned in our disclosure in Note 7.b: </FONT></P>

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   <P style="PAGE-BREAK-AFTER: avoid; MARGIN: 0cm 0cm 0pt"><B><FONT lang=EN-US style="FONT-SIZE: 10pt" face="Times New Roman">Investment</FONT></B></P></TD>

   <TD style="BORDER-TOP: windowtext 1pt solid; BORDER-RIGHT: windowtext 1pt solid; BACKGROUND: #bfbfbf; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 5.4pt; PADDING-RIGHT: 5.4pt" vAlign=top width="50%">

   <P style="PAGE-BREAK-AFTER: avoid; TEXT-ALIGN: center; MARGIN: 0cm 0cm 0pt" align=center><B><FONT lang=EN-US style="FONT-SIZE: 10pt" face="Times New Roman">Amount of Mark-to-Market</FONT></B></P>

   <P style="PAGE-BREAK-AFTER: avoid; TEXT-ALIGN: center; MARGIN: 0cm 0cm 0pt" align=center><B><FONT lang=EN-US style="FONT-SIZE: 10pt" face="Times New Roman">(in R$ thousands)</FONT></B></P></TD></TR>

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   <P style="PAGE-BREAK-AFTER: avoid; MARGIN: 0cm 0cm 0pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" face="Times New Roman">Usiminas shares</FONT></P></TD>

   <TD style="BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 5.4pt; PADDING-RIGHT: 5.4pt" vAlign=top width="50%">

   <P style="PAGE-BREAK-AFTER: avoid; TEXT-ALIGN: center; MARGIN: 0cm 0cm 0pt" align=center><FONT lang=EN-US style="FONT-SIZE: 10pt" face="Times New Roman">(970,915)</FONT></P></TD></TR>

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   <P style="PAGE-BREAK-AFTER: avoid; MARGIN: 0cm 0cm 0pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" face="Times New Roman">Panatl&#226;ntica shares</FONT></P></TD>

   <TD style="BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 5.4pt; PADDING-RIGHT: 5.4pt" vAlign=top width="50%">

   <P style="PAGE-BREAK-AFTER: avoid; TEXT-ALIGN: center; MARGIN: 0cm 0cm 0pt" align=center><FONT lang=EN-US style="FONT-SIZE: 10pt" face="Times New Roman">(893)</FONT></P></TD></TR>

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   <P style="PAGE-BREAK-AFTER: avoid; MARGIN: 0cm 0cm 0pt"><B><FONT lang=EN-US style="FONT-SIZE: 10pt" face="Times New Roman">Total assets available for sale</FONT></B></P></TD>

   <TD style="BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 5.4pt; PADDING-RIGHT: 5.4pt" vAlign=top width="50%">

   <P style="PAGE-BREAK-AFTER: avoid; TEXT-ALIGN: center; MARGIN: 0cm 0cm 0pt" align=center><B><FONT lang=EN-US style="FONT-SIZE: 10pt" face="Times New Roman">(971,808)</FONT></B></P></TD></TR>

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   <P style="PAGE-BREAK-AFTER: avoid; MARGIN: 0cm 0cm 0pt"><FONT style="FONT-SIZE: 10pt" face="Times New Roman">Other </FONT></P></TD>

   <TD style="BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 5.4pt; PADDING-RIGHT: 5.4pt" vAlign=top width="50%">

   <P style="PAGE-BREAK-AFTER: avoid; TEXT-ALIGN: center; MARGIN: 0cm 0cm 0pt" align=center><FONT style="FONT-SIZE: 10pt" face="Times New Roman">1,542</FONT></P></TD></TR>

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   <P style="MARGIN: 0cm 0cm 0pt"><B><FONT lang=EN-US style="FONT-SIZE: 10pt" face="Times New Roman">Total </FONT></B></P></TD>

   <TD style="BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 5.4pt; PADDING-RIGHT: 5.4pt" vAlign=top width="50%">

   <P style="TEXT-ALIGN: center; MARGIN: 0cm 0cm 0pt" align=center><B><FONT lang=EN-US style="FONT-SIZE: 10pt" face="Times New Roman">(970,266)</FONT></B></P></TD></TR></TABLE></DIV>

<P style="MARGIN: 0cm 0cm 0pt"><FONT lang=EN-US style="FONT-SIZE: 12pt" face="Times New Roman"></FONT>&nbsp;</P>

<P style="PAGE-BREAK-AFTER: avoid; TEXT-ALIGN: justify; MARGIN: 0cm 0cm 12pt"><FONT lang=EN-US style="FONT-SIZE: 12pt" face="Times New Roman">The mark-to-market adjustment related to Usiminas was initially recognized in other comprehensive income. &nbsp;When the share price obtained on the S&#227;o Paulo Stock Exchange at the end of each quarter is lower than the share price of the last impairment loss recognized (&#8220;trigger price&#8221;), such difference is reclassified under other operating expenses. The quarters in which prices were lower than the base price of the 2013 impairment are shown below:</FONT></P>

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   <P style="PAGE-BREAK-AFTER: avoid; TEXT-ALIGN: center; MARGIN: 0cm 0cm 0pt" align=center><B><FONT lang=EN-US style="FONT-SIZE: 10pt" color=black face="Times New Roman">Class of shares</FONT></B></P></TD>

   <TD style="BORDER-TOP: windowtext 1pt solid; HEIGHT: 15pt; BORDER-RIGHT: windowtext 1pt solid; BACKGROUND: #d9d9d9; BORDER-BOTTOM: black 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; PADDING-RIGHT: 3.5pt" vAlign=bottom rowSpan=2 width="17%">

   <P style="PAGE-BREAK-AFTER: avoid; TEXT-ALIGN: center; MARGIN: 0cm 0cm 0pt" align=center><B><FONT lang=EN-US style="FONT-SIZE: 10pt" color=black face="Times New Roman">Quantity</FONT></B></P></TD>

   <TD style="BORDER-TOP: windowtext 1pt solid; HEIGHT: 15pt; BORDER-RIGHT: windowtext 1pt solid; BACKGROUND: #d9d9d9; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; PADDING-RIGHT: 3.5pt" vAlign=bottom width="62%" colSpan=4 noWrap>

   <P style="PAGE-BREAK-AFTER: avoid; TEXT-ALIGN: center; MARGIN: 0cm 0cm 0pt" align=center><B><FONT lang=EN-US style="FONT-SIZE: 10pt" color=black face="Times New Roman">Share Price on S&#227;o Paulo Stock Exchange</FONT></B></P></TD></TR>

<TR style="HEIGHT: 41.2pt">

   <TD style="HEIGHT: 41.2pt; BORDER-RIGHT: windowtext 1pt solid; BACKGROUND: #d9d9d9; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; PADDING-RIGHT: 3.5pt" vAlign=bottom width="21%">

   <P style="PAGE-BREAK-AFTER: avoid; TEXT-ALIGN: center; MARGIN: 0cm 0cm 0pt" align=center><B><FONT lang=EN-US style="FONT-SIZE: 10pt" color=black face="Times New Roman">Share Price of last impairment losses recognized in 2013</FONT></B></P></TD>

   <TD style="HEIGHT: 41.2pt; BORDER-RIGHT: windowtext 1pt solid; BACKGROUND: #d9d9d9; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; PADDING-RIGHT: 3.5pt" vAlign=bottom width="13%">

   <P style="PAGE-BREAK-AFTER: avoid; TEXT-ALIGN: center; MARGIN: 0cm 0cm 0pt" align=center><B><FONT lang=EN-US style="FONT-SIZE: 10pt" color=black face="Times New Roman">June 30, 2014</FONT></B></P></TD>

   <TD style="HEIGHT: 41.2pt; BORDER-RIGHT: windowtext 1pt solid; BACKGROUND: #d9d9d9; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; PADDING-RIGHT: 3.5pt" vAlign=bottom width="13%">

   <P style="PAGE-BREAK-AFTER: avoid; TEXT-ALIGN: center; MARGIN: 0cm 0cm 0pt" align=center><B><FONT lang=EN-US style="FONT-SIZE: 10pt" color=black face="Times New Roman">September 30, 2014</FONT></B></P></TD>

   <TD style="HEIGHT: 41.2pt; BORDER-RIGHT: windowtext 1pt solid; BACKGROUND: #d9d9d9; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; PADDING-RIGHT: 3.5pt" vAlign=bottom width="15%">

   <P style="PAGE-BREAK-AFTER: avoid; TEXT-ALIGN: center; MARGIN: 0cm 0cm 0pt" align=center><B><FONT lang=EN-US style="FONT-SIZE: 10pt" color=black face="Times New Roman">December 30, 2014</FONT></B></P></TD></TR>

<TR style="HEIGHT: 15pt">

   <TD style="HEIGHT: 15pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; BORDER-LEFT: windowtext 1pt solid; PADDING-RIGHT: 3.5pt" vAlign=bottom width="21%" noWrap>

   <P style="PAGE-BREAK-AFTER: avoid; MARGIN: 0cm 0cm 0pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" color=black face="Times New Roman">Common</FONT></P></TD>

   <TD style="HEIGHT: 15pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; PADDING-RIGHT: 3.5pt" vAlign=bottom width="17%" noWrap>

   <P style="PAGE-BREAK-AFTER: avoid; TEXT-ALIGN: center; MARGIN: 0cm 0cm 0pt" align=center><FONT lang=EN-US style="FONT-SIZE: 10pt" color=black face="Times New Roman">71,390,300</FONT></P></TD>

   <TD style="HEIGHT: 15pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; PADDING-RIGHT: 3.5pt" vAlign=bottom width="21%" noWrap>

   <P style="PAGE-BREAK-AFTER: avoid; TEXT-ALIGN: center; MARGIN: 0cm 0cm 0pt" align=center><FONT lang=EN-US style="FONT-SIZE: 10pt" color=black face="Times New Roman">7.65</FONT></P></TD>

   <TD style="HEIGHT: 15pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; PADDING-RIGHT: 3.5pt" vAlign=bottom width="13%" noWrap>

   <P style="PAGE-BREAK-AFTER: avoid; TEXT-ALIGN: center; MARGIN: 0cm 0cm 0pt" align=center><FONT lang=EN-US style="FONT-SIZE: 10pt" color=black face="Times New Roman">6.92</FONT></P></TD>

   <TD style="HEIGHT: 15pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; PADDING-RIGHT: 3.5pt" vAlign=bottom width="13%" noWrap>

   <P style="PAGE-BREAK-AFTER: avoid; TEXT-ALIGN: center; MARGIN: 0cm 0cm 0pt" align=center><FONT lang=EN-US style="FONT-SIZE: 10pt" color=black face="Times New Roman">6.64</FONT></P></TD>

   <TD style="HEIGHT: 15pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; PADDING-RIGHT: 3.5pt" vAlign=bottom width="15%" noWrap>

   <P style="PAGE-BREAK-AFTER: avoid; TEXT-ALIGN: center; MARGIN: 0cm 0cm 0pt" align=center><FONT lang=EN-US style="FONT-SIZE: 10pt" color=black face="Times New Roman">-</FONT></P></TD></TR>

<TR style="HEIGHT: 15pt">

   <TD style="HEIGHT: 15pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; BORDER-LEFT: windowtext 1pt solid; PADDING-RIGHT: 3.5pt" vAlign=bottom width="21%" noWrap>

   <P style="PAGE-BREAK-AFTER: avoid; MARGIN: 0cm 0cm 0pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" color=black face="Times New Roman">Preferred</FONT></P></TD>

   <TD style="HEIGHT: 15pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; PADDING-RIGHT: 3.5pt" vAlign=bottom width="17%" noWrap>

   <P style="PAGE-BREAK-AFTER: avoid; TEXT-ALIGN: center; MARGIN: 0cm 0cm 0pt" align=center><FONT lang=EN-US style="FONT-SIZE: 10pt" color=black face="Times New Roman">105,215,700</FONT></P></TD>

   <TD style="HEIGHT: 15pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; PADDING-RIGHT: 3.5pt" vAlign=bottom width="21%" noWrap>

   <P style="PAGE-BREAK-AFTER: avoid; TEXT-ALIGN: center; MARGIN: 0cm 0cm 0pt" align=center><FONT lang=EN-US style="FONT-SIZE: 10pt" color=black face="Times New Roman">6.31</FONT></P></TD>

   <TD style="HEIGHT: 15pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; PADDING-RIGHT: 3.5pt" vAlign=bottom width="13%" noWrap>

   <P style="PAGE-BREAK-AFTER: avoid; TEXT-ALIGN: center; MARGIN: 0cm 0cm 0pt" align=center><FONT lang=EN-US style="FONT-SIZE: 10pt" color=black face="Times New Roman">-</FONT></P></TD>

   <TD style="HEIGHT: 15pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; PADDING-RIGHT: 3.5pt" vAlign=bottom width="13%" noWrap>

   <P style="PAGE-BREAK-AFTER: avoid; TEXT-ALIGN: center; MARGIN: 0cm 0cm 0pt" align=center><FONT lang=EN-US style="FONT-SIZE: 10pt" color=black face="Times New Roman">-</FONT></P></TD>

   <TD style="HEIGHT: 15pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; PADDING-RIGHT: 3.5pt" vAlign=bottom width="15%" noWrap>

   <P style="PAGE-BREAK-AFTER: avoid; TEXT-ALIGN: center; MARGIN: 0cm 0cm 0pt" align=center><FONT lang=EN-US style="FONT-SIZE: 10pt" color=black face="Times New Roman">5.05</FONT></P></TD></TR>

<TR style="HEIGHT: 15pt">

   <TD style="HEIGHT: 15pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; BORDER-LEFT: windowtext 1pt solid; PADDING-RIGHT: 3.5pt" vAlign=bottom width="21%" noWrap>

   <P style="MARGIN: 0cm 0cm 0pt"><B><FONT lang=EN-US style="FONT-SIZE: 10pt" color=black face="Times New Roman">Total shares</FONT></B></P></TD>

   <TD style="HEIGHT: 15pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; PADDING-RIGHT: 3.5pt" vAlign=bottom width="17%" noWrap>

   <P style="TEXT-ALIGN: center; MARGIN: 0cm 0cm 0pt" align=center><B><FONT lang=EN-US style="FONT-SIZE: 10pt" color=black face="Times New Roman">176,606,000</FONT></B></P></TD>

   <TD style="HEIGHT: 15pt; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; PADDING-RIGHT: 3.5pt" vAlign=bottom width="21%" noWrap>&nbsp;</TD>

   <TD style="HEIGHT: 15pt; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; PADDING-RIGHT: 3.5pt" vAlign=bottom width="13%" noWrap>&nbsp;</TD>

   <TD style="HEIGHT: 15pt; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; PADDING-RIGHT: 3.5pt" vAlign=bottom width="13%" noWrap>&nbsp;</TD>

   <TD style="HEIGHT: 15pt; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; PADDING-RIGHT: 3.5pt" vAlign=bottom width="15%" noWrap>&nbsp;</TD></TR></TABLE></DIV>

<P style="MARGIN: 0cm 0cm 0pt"><FONT lang=EN-US style="FONT-SIZE: 12pt" face="Times New Roman"></FONT>&nbsp;</P>

<P style="PAGE-BREAK-AFTER: avoid; MARGIN: 0cm 0cm 12pt"><FONT lang=EN-US style="FONT-SIZE: 12pt" face="Times New Roman">The amounts of impairment losses recognized in 2014 were R$205.0 million, as follows:</FONT></P>

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<TR style="HEIGHT: 25.45pt">

   <TD style="BORDER-TOP: windowtext 1pt solid; HEIGHT: 25.45pt; BORDER-RIGHT: windowtext 1pt solid; BACKGROUND: #dddddd; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; BORDER-LEFT: windowtext 1pt solid; PADDING-RIGHT: 3.5pt" vAlign=bottom width="46%" noWrap>

   <P style="PAGE-BREAK-AFTER: avoid; MARGIN: 0cm 0cm 0pt"><B><FONT lang=EN-US style="FONT-SIZE: 10pt" color=black face="Times New Roman">Impairment losses recognized in each quarter of 2014 on:<BR>(in R$ thousands)&nbsp;</FONT></B></P></TD>

   <TD style="BORDER-TOP: windowtext 1pt solid; HEIGHT: 25.45pt; BORDER-RIGHT: windowtext 1pt solid; BACKGROUND: #d9d9d9; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; PADDING-RIGHT: 3.5pt" vAlign=bottom width="14%">

   <P style="PAGE-BREAK-AFTER: avoid; TEXT-ALIGN: center; MARGIN: 0cm 0cm 0pt" align=center><B><FONT lang=EN-US style="FONT-SIZE: 10pt" color=black face="Times New Roman">2nd Quarter 2014</FONT></B></P></TD>

   <TD style="BORDER-TOP: windowtext 1pt solid; HEIGHT: 25.45pt; BORDER-RIGHT: windowtext 1pt solid; BACKGROUND: #d9d9d9; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; PADDING-RIGHT: 3.5pt" vAlign=bottom width="13%">

   <P style="PAGE-BREAK-AFTER: avoid; TEXT-ALIGN: center; MARGIN: 0cm 0cm 0pt" align=center><B><FONT lang=EN-US style="FONT-SIZE: 10pt" color=black face="Times New Roman">3rd Quarter 2014</FONT></B></P></TD>

   <TD style="BORDER-TOP: windowtext 1pt solid; HEIGHT: 25.45pt; BORDER-RIGHT: windowtext 1pt solid; BACKGROUND: #d9d9d9; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; PADDING-RIGHT: 3.5pt" vAlign=bottom width="14%">

   <P style="PAGE-BREAK-AFTER: avoid; TEXT-ALIGN: center; MARGIN: 0cm 0cm 0pt" align=center><B><FONT lang=EN-US style="FONT-SIZE: 10pt" color=black face="Times New Roman">4th<BR>Quarter 2014</FONT></B></P></TD>

   <TD style="BORDER-TOP: windowtext 1pt solid; HEIGHT: 25.45pt; BORDER-RIGHT: windowtext 1pt solid; BACKGROUND: #d9d9d9; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; PADDING-RIGHT: 3.5pt" vAlign=bottom width="13%">

   <P style="PAGE-BREAK-AFTER: avoid; TEXT-ALIGN: center; MARGIN: 0cm 0cm 0pt" align=center><B><FONT lang=EN-US style="FONT-SIZE: 10pt" color=black face="Times New Roman">Total losses FY 2014</FONT></B></P></TD></TR>

<TR style="HEIGHT: 15pt">

   <TD style="HEIGHT: 15pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; BORDER-LEFT: windowtext 1pt solid; PADDING-RIGHT: 3.5pt" vAlign=bottom width="46%" noWrap>

   <P style="PAGE-BREAK-AFTER: avoid; MARGIN: 0cm 0cm 0pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" color=black face="Times New Roman">Common shares losses</FONT></P></TD>

   <TD style="HEIGHT: 15pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; PADDING-RIGHT: 3.5pt" vAlign=bottom width="14%" noWrap>

   <P style="PAGE-BREAK-AFTER: avoid; TEXT-ALIGN: center; MARGIN: 0cm 0cm 0pt" align=center><FONT lang=EN-US style="FONT-SIZE: 10pt" color=black face="Times New Roman">(52,115)</FONT></P></TD>

   <TD style="HEIGHT: 15pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; PADDING-RIGHT: 3.5pt" vAlign=bottom width="13%" noWrap>

   <P style="PAGE-BREAK-AFTER: avoid; TEXT-ALIGN: center; MARGIN: 0cm 0cm 0pt" align=center><FONT lang=EN-US style="FONT-SIZE: 10pt" color=black face="Times New Roman">(19,989)</FONT></P></TD>

   <TD style="HEIGHT: 15pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; PADDING-RIGHT: 3.5pt" vAlign=bottom width="14%" noWrap>

   <P style="PAGE-BREAK-AFTER: avoid; TEXT-ALIGN: center; MARGIN: 0cm 0cm 0pt" align=center><FONT lang=EN-US style="FONT-SIZE: 10pt" color=black face="Times New Roman">-</FONT></P></TD>

   <TD style="HEIGHT: 15pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; PADDING-RIGHT: 3.5pt" vAlign=bottom width="13%" noWrap>

   <P style="PAGE-BREAK-AFTER: avoid; TEXT-ALIGN: center; MARGIN: 0cm 0cm 0pt" align=center><FONT lang=EN-US style="FONT-SIZE: 10pt" color=black face="Times New Roman">(72,104)</FONT></P></TD></TR>

<TR style="HEIGHT: 15pt">

   <TD style="HEIGHT: 15pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; BORDER-LEFT: windowtext 1pt solid; PADDING-RIGHT: 3.5pt" vAlign=bottom width="46%" noWrap>

   <P style="PAGE-BREAK-AFTER: avoid; MARGIN: 0cm 0cm 0pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" color=black face="Times New Roman">Preferred shares losses</FONT></P></TD>

   <TD style="HEIGHT: 15pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; PADDING-RIGHT: 3.5pt" vAlign=bottom width="14%" noWrap>

   <P style="PAGE-BREAK-AFTER: avoid; TEXT-ALIGN: center; MARGIN: 0cm 0cm 0pt" align=center><FONT lang=EN-US style="FONT-SIZE: 10pt" color=black face="Times New Roman">-</FONT></P></TD>

   <TD style="HEIGHT: 15pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; PADDING-RIGHT: 3.5pt" vAlign=bottom width="13%" noWrap>

   <P style="PAGE-BREAK-AFTER: avoid; TEXT-ALIGN: center; MARGIN: 0cm 0cm 0pt" align=center><FONT lang=EN-US style="FONT-SIZE: 10pt" color=black face="Times New Roman">-</FONT></P></TD>

   <TD style="HEIGHT: 15pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; PADDING-RIGHT: 3.5pt" vAlign=bottom width="14%" noWrap>

   <P style="PAGE-BREAK-AFTER: avoid; TEXT-ALIGN: center; MARGIN: 0cm 0cm 0pt" align=center><FONT lang=EN-US style="FONT-SIZE: 10pt" color=black face="Times New Roman">(132,896)</FONT></P></TD>

   <TD style="HEIGHT: 15pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; PADDING-RIGHT: 3.5pt" vAlign=bottom width="13%" noWrap>

   <P style="PAGE-BREAK-AFTER: avoid; TEXT-ALIGN: center; MARGIN: 0cm 0cm 0pt" align=center><FONT lang=EN-US style="FONT-SIZE: 10pt" color=black face="Times New Roman">(132,896)</FONT></P></TD></TR>

<TR style="HEIGHT: 15pt">

   <TD style="HEIGHT: 15pt; BORDER-RIGHT: black 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; BORDER-LEFT: windowtext 1pt solid; PADDING-RIGHT: 3.5pt" vAlign=bottom width="46%" noWrap>

   <P style="MARGIN: 0cm 0cm 0pt"><B><FONT lang=EN-US style="FONT-SIZE: 10pt" color=black face="Times New Roman">Total</FONT></B></P></TD>

   <TD style="HEIGHT: 15pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; PADDING-RIGHT: 3.5pt" vAlign=bottom width="14%" noWrap>

   <P style="TEXT-ALIGN: center; MARGIN: 0cm 0cm 0pt" align=center><B><FONT lang=EN-US style="FONT-SIZE: 10pt" color=black face="Times New Roman">(52,115)</FONT></B></P></TD>

   <TD style="HEIGHT: 15pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; PADDING-RIGHT: 3.5pt" vAlign=bottom width="13%" noWrap>

   <P style="TEXT-ALIGN: center; MARGIN: 0cm 0cm 0pt" align=center><B><FONT lang=EN-US style="FONT-SIZE: 10pt" color=black face="Times New Roman">(19,989)</FONT></B></P></TD>

   <TD style="HEIGHT: 15pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; PADDING-RIGHT: 3.5pt" vAlign=bottom width="14%" noWrap>

   <P style="TEXT-ALIGN: center; MARGIN: 0cm 0cm 0pt" align=center><B><FONT lang=EN-US style="FONT-SIZE: 10pt" color=black face="Times New Roman">(132,896)</FONT></B></P></TD>

   <TD style="HEIGHT: 15pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; PADDING-RIGHT: 3.5pt" vAlign=bottom width="13%" noWrap>

   <P style="TEXT-ALIGN: center; MARGIN: 0cm 0cm 0pt" align=center><B><FONT lang=EN-US style="FONT-SIZE: 10pt" color=black face="Times New Roman">(205,000)</FONT></B></P></TD></TR></TABLE></DIV>

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<H1 style="PAGE-BREAK-AFTER: avoid; TEXT-ALIGN: center; MARGIN: 0cm 18pt 0pt 0cm; LINE-HEIGHT: 10pt" align=center><B><FONT style="FONT-SIZE: 9pt" face="Times New Roman">Companhia Sider&#250;rgica Nacional</FONT></B></H1></TD></TR>

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<H1 style="PAGE-BREAK-AFTER: avoid; TEXT-ALIGN: center; MARGIN: 0cm 18pt 0pt 0cm; LINE-HEIGHT: 10pt" align=center><B><FONT style="FONT-SIZE: 9pt" face="Times New Roman"></FONT></B></H1>

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   <P style="TEXT-ALIGN: center; MARGIN: 0cm 0cm 0pt" align=center><FONT style="DISPLAY: none"><FONT style="FONT-SIZE: 6pt" face="Times New Roman">Escrit&#243;rio Central</FONT></FONT></P>

   <P style="TEXT-ALIGN: center; MARGIN: 0cm 0cm 0pt" align=center><FONT style="DISPLAY: none"><FONT style="FONT-SIZE: 6pt" face="Times New Roman">Av. Brigadeiro Faria Lima, 3400 &#8211; 20&#186; andar</FONT><FONT><FONT style="FONT-SIZE: 6pt" face="Times New Roman"> </FONT></FONT><FONT style="FONT-SIZE: 6pt" face="Times New Roman">- Edificio Financial Faria Lima Center</FONT></FONT></P>

   <P style="TEXT-ALIGN: center; MARGIN: 0cm 0cm 0pt" align=center><FONT style="DISPLAY: none"><FONT lang=EN-US style="FONT-SIZE: 6pt" face="Times New Roman">Cep: 04538-132</FONT><FONT><FONT lang=EN-US style="FONT-SIZE: 6pt" face="Times New Roman"> </FONT></FONT><FONT lang=EN-US style="FONT-SIZE: 6pt" face="Times New Roman">- S&#227;o Paulo - SP</FONT></FONT></P>

   <P style="TEXT-ALIGN: center; MARGIN: 0cm 0cm 0pt" align=center><FONT style="DISPLAY: none"><FONT lang=EN-US style="FONT-SIZE: 6pt" face="Times New Roman"></FONT></FONT>&nbsp;</P>

   <P style="TEXT-ALIGN: center; MARGIN: 0cm 0cm 0pt" align=center><FONT style="DISPLAY: none"><FONT lang=EN-US style="FONT-SIZE: 12pt" face="Times New Roman"></FONT></FONT>&nbsp;</P></TD></TR></TABLE></FONT></FONT></FONT></DIV></DIV></DIV></DIV>

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   <IMG border=0 src="logo.gif"></FONT></P></TD></TR></TABLE></DIV></DIV>

<P style="MARGIN: 0cm 0cm 0pt"><B><FONT lang=EN-US style="FONT-SIZE: 14pt" face="Times New Roman"></FONT></B>&nbsp;</P>

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<P style="PAGE-BREAK-AFTER: avoid; MARGIN: 0cm 0cm 12pt"><FONT lang=EN-US style="FONT-SIZE: 12pt" face="Times New Roman">Usiminas balance reconciliation is presented as follows:</FONT></P>

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<TR style="HEIGHT: 15pt">

   <TD style="BORDER-TOP: windowtext 1pt solid; HEIGHT: 15pt; BORDER-RIGHT: windowtext 1pt solid; BACKGROUND: #d9d9d9; BORDER-BOTTOM: black 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; BORDER-LEFT: windowtext 1pt solid; PADDING-RIGHT: 3.5pt" vAlign=bottom rowSpan=2 width="13%">

   <P style="PAGE-BREAK-AFTER: avoid; TEXT-ALIGN: center; MARGIN: 0cm 0cm 0pt" align=center><B><FONT style="FONT-SIZE: 10pt" color=black face="Times New Roman">Class of shares</FONT></B></P></TD>

   <TD style="BORDER-TOP: windowtext 1pt solid; HEIGHT: 15pt; BORDER-RIGHT: windowtext 1pt solid; BACKGROUND: #d9d9d9; BORDER-BOTTOM: black 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; PADDING-RIGHT: 3.5pt" vAlign=bottom rowSpan=2 width="12%">

   <P style="PAGE-BREAK-AFTER: avoid; TEXT-ALIGN: center; MARGIN: 0cm 0cm 0pt" align=center><B><FONT style="FONT-SIZE: 10pt" color=black face="Times New Roman">Quantity</FONT></B></P></TD>

   <TD style="BORDER-TOP: windowtext 1pt solid; HEIGHT: 15pt; BORDER-RIGHT: black 1pt solid; BACKGROUND: #d9d9d9; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; PADDING-RIGHT: 3.5pt" vAlign=bottom width="23%" colSpan=2 noWrap>

   <P style="PAGE-BREAK-AFTER: avoid; TEXT-ALIGN: center; MARGIN: 0cm 0cm 0pt" align=center><B><FONT style="FONT-SIZE: 10pt" color=black face="Times New Roman">As of December, 2013</FONT></B></P></TD>

   <TD style="BORDER-TOP: windowtext 1pt solid; HEIGHT: 15pt; BORDER-RIGHT: black 1pt solid; BACKGROUND: #d9d9d9; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; PADDING-RIGHT: 3.5pt" vAlign=bottom width="25%" colSpan=2 noWrap>

   <P style="PAGE-BREAK-AFTER: avoid; TEXT-ALIGN: center; MARGIN: 0cm 0cm 0pt" align=center><B><FONT style="FONT-SIZE: 10pt" color=black face="Times New Roman">As of December, 2014</FONT></B></P></TD>

   <TD style="BORDER-TOP: windowtext 1pt solid; HEIGHT: 15pt; BORDER-RIGHT: black 1pt solid; BACKGROUND: #d9d9d9; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; PADDING-RIGHT: 3.5pt" vAlign=bottom width="27%" colSpan=2 noWrap>

   <P style="PAGE-BREAK-AFTER: avoid; TEXT-ALIGN: center; MARGIN: 0cm 0cm 0pt" align=center><B><FONT style="FONT-SIZE: 10pt" color=black face="Times New Roman">FY 2014</FONT></B></P></TD></TR>

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   <TD style="HEIGHT: 29.25pt; BORDER-RIGHT: windowtext 1pt solid; BACKGROUND: #d9d9d9; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; PADDING-RIGHT: 3.5pt" vAlign=bottom width="10%">

   <P style="PAGE-BREAK-AFTER: avoid; TEXT-ALIGN: center; MARGIN: 0cm 0cm 0pt" align=center><B><FONT style="FONT-SIZE: 10pt" color=black face="Times New Roman">Share Price</FONT></B></P></TD>

   <TD style="HEIGHT: 29.25pt; BORDER-RIGHT: windowtext 1pt solid; BACKGROUND: #d9d9d9; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; PADDING-RIGHT: 3.5pt" vAlign=bottom width="13%">

   <P style="PAGE-BREAK-AFTER: avoid; TEXT-ALIGN: center; MARGIN: 0cm 0cm 0pt" align=center><B><FONT lang=EN-US style="FONT-SIZE: 10pt" color=black face="Times New Roman">Accounting balance<BR>R$ thousand</FONT></B></P></TD>

   <TD style="HEIGHT: 29.25pt; BORDER-RIGHT: windowtext 1pt solid; BACKGROUND: #d9d9d9; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; PADDING-RIGHT: 3.5pt" vAlign=bottom width="11%">

   <P style="PAGE-BREAK-AFTER: avoid; TEXT-ALIGN: center; MARGIN: 0cm 0cm 0pt" align=center><B><FONT lang=EN-US style="FONT-SIZE: 10pt" color=black face="Times New Roman">Share Price</FONT></B></P></TD>

   <TD style="HEIGHT: 29.25pt; BORDER-RIGHT: windowtext 1pt solid; BACKGROUND: #d9d9d9; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; PADDING-RIGHT: 3.5pt" vAlign=bottom width="14%">

   <P style="PAGE-BREAK-AFTER: avoid; TEXT-ALIGN: center; MARGIN: 0cm 0cm 0pt" align=center><B><FONT lang=EN-US style="FONT-SIZE: 10pt" color=black face="Times New Roman">Accounting balance<BR>R$ thousand</FONT></B></P></TD>

   <TD style="HEIGHT: 29.25pt; BORDER-RIGHT: windowtext 1pt solid; BACKGROUND: #d9d9d9; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; PADDING-RIGHT: 3.5pt" vAlign=bottom width="13%">

   <P style="PAGE-BREAK-AFTER: avoid; TEXT-ALIGN: center; MARGIN: 0cm 0cm 0pt" align=center><B><FONT lang=EN-US style="FONT-SIZE: 10pt" color=black face="Times New Roman">Share Price variation</FONT></B></P></TD>

   <TD style="HEIGHT: 29.25pt; BORDER-RIGHT: windowtext 1pt solid; BACKGROUND: #d9d9d9; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; PADDING-RIGHT: 3.5pt" vAlign=bottom width="14%">

   <P style="PAGE-BREAK-AFTER: avoid; TEXT-ALIGN: center; MARGIN: 0cm 0cm 0pt" align=center><B><FONT lang=EN-US style="FONT-SIZE: 10pt" color=black face="Times New Roman">MTM variation<BR>R$ thousand</FONT></B></P></TD></TR>

<TR style="HEIGHT: 15pt">

   <TD style="HEIGHT: 15pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; BORDER-LEFT: windowtext 1pt solid; PADDING-RIGHT: 3.5pt" vAlign=bottom width="13%" noWrap>

   <P style="PAGE-BREAK-AFTER: avoid; TEXT-ALIGN: center; MARGIN: 0cm 0cm 0pt" align=center><FONT lang=EN-US style="FONT-SIZE: 10pt" color=black face="Times New Roman">Common</FONT></P></TD>

   <TD style="HEIGHT: 15pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; PADDING-RIGHT: 3.5pt" vAlign=bottom width="12%" noWrap>

   <P style="PAGE-BREAK-AFTER: avoid; TEXT-ALIGN: center; MARGIN: 0cm 0cm 0pt" align=center><FONT lang=EN-US style="FONT-SIZE: 10pt" color=black face="Times New Roman">71,390,300</FONT></P></TD>

   <TD style="HEIGHT: 15pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; PADDING-RIGHT: 3.5pt" vAlign=bottom width="10%" noWrap>

   <P style="PAGE-BREAK-AFTER: avoid; TEXT-ALIGN: center; MARGIN: 0cm 0cm 0pt" align=center><FONT lang=EN-US style="FONT-SIZE: 10pt" color=black face="Times New Roman">12.40</FONT></P></TD>

   <TD style="HEIGHT: 15pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; PADDING-RIGHT: 3.5pt" vAlign=bottom width="13%" noWrap>

   <P style="PAGE-BREAK-AFTER: avoid; TEXT-ALIGN: center; MARGIN: 0cm 0cm 0pt" align=center><FONT lang=EN-US style="FONT-SIZE: 10pt" color=black face="Times New Roman">885,240</FONT></P></TD>

   <TD style="HEIGHT: 15pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; PADDING-RIGHT: 3.5pt" vAlign=bottom width="11%" noWrap>

   <P style="PAGE-BREAK-AFTER: avoid; TEXT-ALIGN: center; MARGIN: 0cm 0cm 0pt" align=center><FONT lang=EN-US style="FONT-SIZE: 10pt" color=black face="Times New Roman">12.</FONT><FONT style="FONT-SIZE: 10pt" color=black face="Times New Roman">30</FONT></P></TD>

   <TD style="HEIGHT: 15pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; PADDING-RIGHT: 3.5pt" vAlign=bottom width="14%" noWrap>

   <P style="PAGE-BREAK-AFTER: avoid; TEXT-ALIGN: center; MARGIN: 0cm 0cm 0pt" align=center><FONT style="FONT-SIZE: 10pt" color=black face="Times New Roman">878,101</FONT></P></TD>

   <TD style="HEIGHT: 15pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; PADDING-RIGHT: 3.5pt" vAlign=bottom width="13%" noWrap>

   <P style="PAGE-BREAK-AFTER: avoid; TEXT-ALIGN: center; MARGIN: 0cm 0cm 0pt" align=center><FONT style="FONT-SIZE: 10pt" color=black face="Times New Roman">(0.10)</FONT></P></TD>

   <TD style="HEIGHT: 15pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; PADDING-RIGHT: 3.5pt" vAlign=bottom width="14%" noWrap>

   <P style="PAGE-BREAK-AFTER: avoid; TEXT-ALIGN: center; MARGIN: 0cm 0cm 0pt" align=center><FONT style="FONT-SIZE: 10pt" color=black face="Times New Roman">(7,139)</FONT></P></TD></TR>

<TR style="HEIGHT: 15pt">

   <TD style="HEIGHT: 15pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; BORDER-LEFT: windowtext 1pt solid; PADDING-RIGHT: 3.5pt" vAlign=bottom width="13%" noWrap>

   <P style="PAGE-BREAK-AFTER: avoid; TEXT-ALIGN: center; MARGIN: 0cm 0cm 0pt" align=center><FONT style="FONT-SIZE: 10pt" color=black face="Times New Roman">Preferred</FONT></P></TD>

   <TD style="HEIGHT: 15pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; PADDING-RIGHT: 3.5pt" vAlign=bottom width="12%" noWrap>

   <P style="PAGE-BREAK-AFTER: avoid; TEXT-ALIGN: center; MARGIN: 0cm 0cm 0pt" align=center><FONT style="FONT-SIZE: 10pt" color=black face="Times New Roman">105,215,700</FONT></P></TD>

   <TD style="HEIGHT: 15pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; PADDING-RIGHT: 3.5pt" vAlign=bottom width="10%" noWrap>

   <P style="PAGE-BREAK-AFTER: avoid; TEXT-ALIGN: center; MARGIN: 0cm 0cm 0pt" align=center><FONT style="FONT-SIZE: 10pt" color=black face="Times New Roman">14.21</FONT></P></TD>

   <TD style="HEIGHT: 15pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; PADDING-RIGHT: 3.5pt" vAlign=bottom width="13%" noWrap>

   <P style="PAGE-BREAK-AFTER: avoid; TEXT-ALIGN: center; MARGIN: 0cm 0cm 0pt" align=center><FONT style="FONT-SIZE: 10pt" color=black face="Times New Roman">1,495,115</FONT></P></TD>

   <TD style="HEIGHT: 15pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; PADDING-RIGHT: 3.5pt" vAlign=bottom width="11%" noWrap>

   <P style="PAGE-BREAK-AFTER: avoid; TEXT-ALIGN: center; MARGIN: 0cm 0cm 0pt" align=center><FONT style="FONT-SIZE: 10pt" color=black face="Times New Roman">5.05</FONT></P></TD>

   <TD style="HEIGHT: 15pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; PADDING-RIGHT: 3.5pt" vAlign=bottom width="14%" noWrap>

   <P style="PAGE-BREAK-AFTER: avoid; TEXT-ALIGN: center; MARGIN: 0cm 0cm 0pt" align=center><FONT style="FONT-SIZE: 10pt" color=black face="Times New Roman">531,339</FONT></P></TD>

   <TD style="HEIGHT: 15pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; PADDING-RIGHT: 3.5pt" vAlign=bottom width="13%" noWrap>

   <P style="PAGE-BREAK-AFTER: avoid; TEXT-ALIGN: center; MARGIN: 0cm 0cm 0pt" align=center><FONT style="FONT-SIZE: 10pt" color=black face="Times New Roman">(9.16)</FONT></P></TD>

   <TD style="HEIGHT: 15pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; PADDING-RIGHT: 3.5pt" vAlign=bottom width="14%" noWrap>

   <P style="PAGE-BREAK-AFTER: avoid; TEXT-ALIGN: center; MARGIN: 0cm 0cm 0pt" align=center><FONT style="FONT-SIZE: 10pt" color=black face="Times New Roman">(963,776)</FONT></P></TD></TR>

<TR style="HEIGHT: 15pt">

   <TD style="HEIGHT: 15pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; BORDER-LEFT: windowtext 1pt solid; PADDING-RIGHT: 3.5pt" vAlign=bottom width="13%" noWrap>

   <P style="TEXT-ALIGN: center; MARGIN: 0cm 0cm 0pt" align=center><B><FONT style="FONT-SIZE: 10pt" color=black face="Times New Roman">Total shares</FONT></B></P></TD>

   <TD style="HEIGHT: 15pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; PADDING-RIGHT: 3.5pt" vAlign=bottom width="12%" noWrap>

   <P style="TEXT-ALIGN: center; MARGIN: 0cm 0cm 0pt" align=center><B><FONT style="FONT-SIZE: 10pt" color=black face="Times New Roman">176,606,000</FONT></B></P></TD>

   <TD style="HEIGHT: 15pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; PADDING-RIGHT: 3.5pt" vAlign=bottom width="10%" noWrap>&nbsp;</TD>

   <TD style="HEIGHT: 15pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; PADDING-RIGHT: 3.5pt" vAlign=bottom width="13%" noWrap>

   <P style="TEXT-ALIGN: center; MARGIN: 0cm 0cm 0pt" align=center><B><FONT style="FONT-SIZE: 10pt" color=black face="Times New Roman">2,380,355</FONT></B></P></TD>

   <TD style="HEIGHT: 15pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; PADDING-RIGHT: 3.5pt" vAlign=bottom width="11%" noWrap>&nbsp;</TD>

   <TD style="HEIGHT: 15pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; PADDING-RIGHT: 3.5pt" vAlign=bottom width="14%" noWrap>

   <P style="TEXT-ALIGN: center; MARGIN: 0cm 0cm 0pt" align=center><B><FONT style="FONT-SIZE: 10pt" color=black face="Times New Roman">1,409,440<SUP>1</SUP></FONT></B></P></TD>

   <TD style="HEIGHT: 15pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; PADDING-RIGHT: 3.5pt" vAlign=bottom width="13%" noWrap>&nbsp;</TD>

   <TD style="HEIGHT: 15pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; PADDING-RIGHT: 3.5pt" vAlign=bottom width="14%" noWrap>

   <P style="TEXT-ALIGN: center; MARGIN: 0cm 0cm 0pt" align=center><B><FONT style="FONT-SIZE: 10pt" color=black face="Times New Roman">(970,915)</FONT></B></P></TD></TR></TABLE></DIV>

<P style="MARGIN: 0cm 0cm 0pt"><FONT lang=EN-US style="FONT-SIZE: 10pt" face="Times New Roman">____________________________</FONT></P>

<P style="MARGIN: 0cm 0cm 0pt"><SUP><FONT lang=EN-US style="FONT-SIZE: 10pt" face="Times New Roman">1</FONT></SUP><FONT lang=EN-US style="FONT-SIZE: 10pt" face="Times New Roman"> Please note that the accounting balance as of December, 2014 is R$1,409,440 rather than R$1,490,440 as stated in your comment letter.</FONT></P>

<P style="MARGIN: 0cm 0cm 0pt"><FONT lang=EN-US style="FONT-SIZE: 12pt" face="Times New Roman"></FONT>&nbsp;</P>

<P style="MARGIN: 0cm 0cm 12pt"><FONT lang=EN-US style="FONT-SIZE: 12pt" face="Times New Roman">The mark-to-market variations for the year ended December 31, 2014 were R$970.9 million and were initially recognized as other comprehensive income of which R$205.0 million were later reclassified to other operating expense as explained above. The remaining gross mark-to-market variation recognized in other comprehensive income for the year ended December 31, 2014 were R$765.9 million. These records, considered together with the Panatl&#226;ntica mark-to-market, can be reconciled in our Statement of Comprehensive Income in Note 30 on page FS-88 as discussed above. Additionally, please refer to the reconciliation table below:</FONT></P>

<DIV align=left>

<TABLE style="MARGIN-LEFT: 0pt; WIDTH: 100%" cellSpacing=0 cellPadding=0 border=0>



<TR style="HEIGHT: 15.75pt">

   <TD style="BORDER-TOP: windowtext 1pt solid; HEIGHT: 15.75pt; BORDER-RIGHT: windowtext 1pt solid; BACKGROUND: #d9d9d9; BORDER-BOTTOM: black 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; BORDER-LEFT: windowtext 1pt solid; PADDING-RIGHT: 3.5pt" rowSpan=2 width="8%">

   <P style="TEXT-ALIGN: center; MARGIN: 0cm 0cm 0pt" align=center><B><FONT style="FONT-SIZE: 8pt" color=black face="Times New Roman">Type of shares</FONT></B></P></TD>

   <TD style="BORDER-TOP: windowtext 1pt solid; HEIGHT: 15.75pt; BORDER-RIGHT: windowtext 1pt solid; BACKGROUND: #d9d9d9; BORDER-BOTTOM: black 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; PADDING-RIGHT: 3.5pt" rowSpan=2 width="10%">

   <P style="TEXT-ALIGN: center; MARGIN: 0cm 0cm 0pt" align=center><B><FONT style="FONT-SIZE: 8pt" color=black face="Times New Roman">Quantity</FONT></B></P></TD>

   <TD style="BORDER-TOP: windowtext 1pt solid; HEIGHT: 15.75pt; BORDER-RIGHT: black 1pt solid; BACKGROUND: #d9d9d9; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; PADDING-RIGHT: 3.5pt" width="64%" colSpan=6 noWrap>

   <P style="TEXT-ALIGN: center; MARGIN: 0cm 0cm 0pt" align=center><B><FONT lang=EN-US style="FONT-SIZE: 8pt" color=black face="Times New Roman">Accounting balance in thousand of Reais R$'000</FONT></B></P></TD>

   <TD style="BORDER-TOP: windowtext 1pt solid; HEIGHT: 15.75pt; BORDER-RIGHT: black 1pt solid; BACKGROUND: #d9d9d9; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; PADDING-RIGHT: 3.5pt" width="18%" colSpan=2>

   <P style="TEXT-ALIGN: center; MARGIN: 0cm 0cm 0pt" align=center><B><FONT style="FONT-SIZE: 8pt" color=black face="Times New Roman">MTM variation</FONT></B></P></TD></TR>

<TR style="HEIGHT: 43.5pt">

   <TD style="HEIGHT: 43.5pt; BORDER-RIGHT: windowtext 1pt solid; BACKGROUND: #d9d9d9; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; PADDING-RIGHT: 3.5pt" width="10%">

   <P style="TEXT-ALIGN: center; MARGIN: 0cm 0cm 0pt" align=center><B><FONT lang=EN-US style="FONT-SIZE: 8pt" color=black face="Times New Roman">after the recognition of last impairment losses in 2013 (a)</FONT></B></P></TD>

   <TD style="HEIGHT: 43.5pt; BORDER-RIGHT: windowtext 1pt solid; BACKGROUND: #d9d9d9; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; PADDING-RIGHT: 3.5pt" width="10%">

   <P style="TEXT-ALIGN: center; MARGIN: 0cm 0cm 0pt" align=center><B><FONT style="FONT-SIZE: 8pt" color=black face="Times New Roman">June 30, 2013</FONT></B></P></TD>

   <TD style="HEIGHT: 43.5pt; BORDER-RIGHT: windowtext 1pt solid; BACKGROUND: #d9d9d9; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; PADDING-RIGHT: 3.5pt" width="11%">

   <P style="TEXT-ALIGN: center; MARGIN: 0cm 0cm 0pt" align=center><B><FONT style="FONT-SIZE: 8pt" color=black face="Times New Roman">December 30, 2013</FONT></B></P></TD>

   <TD style="HEIGHT: 43.5pt; BORDER-RIGHT: windowtext 1pt solid; BACKGROUND: #d9d9d9; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; PADDING-RIGHT: 3.5pt" width="11%">

   <P style="TEXT-ALIGN: center; MARGIN: 0cm 0cm 0pt" align=center><B><FONT style="FONT-SIZE: 8pt" color=black face="Times New Roman">June 30, 2014</FONT></B></P></TD>

   <TD style="HEIGHT: 43.5pt; BORDER-RIGHT: windowtext 1pt solid; BACKGROUND: #d9d9d9; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; PADDING-RIGHT: 3.5pt" width="11%">

   <P style="TEXT-ALIGN: center; MARGIN: 0cm 0cm 0pt" align=center><B><FONT style="FONT-SIZE: 8pt" color=black face="Times New Roman">September 30, 2014</FONT></B></P></TD>

   <TD style="HEIGHT: 43.5pt; BORDER-RIGHT: windowtext 1pt solid; BACKGROUND: #d9d9d9; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; PADDING-RIGHT: 3.5pt" width="11%">

   <P style="TEXT-ALIGN: center; MARGIN: 0cm 0cm 0pt" align=center><B><FONT style="FONT-SIZE: 8pt" color=black face="Times New Roman">December 30, 2014 (b)</FONT></B></P></TD>

   <TD style="HEIGHT: 43.5pt; BORDER-RIGHT: windowtext 1pt solid; BACKGROUND: #d9d9d9; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; PADDING-RIGHT: 3.5pt" width="9%">

   <P style="TEXT-ALIGN: center; MARGIN: 0cm 0cm 0pt" align=center><B><FONT style="FONT-SIZE: 8pt" color=black face="Times New Roman">FY 2014</FONT></B></P></TD>

   <TD style="HEIGHT: 43.5pt; BORDER-RIGHT: windowtext 1pt solid; BACKGROUND: #d9d9d9; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; PADDING-RIGHT: 3.5pt" width="9%">

   <P style="TEXT-ALIGN: center; MARGIN: 0cm 0cm 0pt" align=center><B><FONT style="FONT-SIZE: 8pt" color=black face="Times New Roman">((b) - (a))</FONT></B></P></TD></TR>

<TR style="HEIGHT: 15.75pt">

   <TD style="HEIGHT: 15.75pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; BORDER-LEFT: windowtext 1pt solid; PADDING-RIGHT: 3.5pt" width="8%" noWrap>

   <P style="MARGIN: 0cm 0cm 0pt"><FONT style="FONT-SIZE: 8pt" color=black face="Times New Roman">Common</FONT></P></TD>

   <TD style="HEIGHT: 15.75pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; PADDING-RIGHT: 3.5pt" width="10%" noWrap>

   <P style="TEXT-ALIGN: right; MARGIN: 0cm 0cm 0pt" align=right><FONT style="FONT-SIZE: 7pt" color=black face=calibri,sans-serif>&nbsp;&nbsp; 71,390,300 </FONT></P></TD>

   <TD style="HEIGHT: 15.75pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; PADDING-RIGHT: 3.5pt" width="10%" noWrap>

   <P style="TEXT-ALIGN: right; MARGIN: 0cm 0cm 0pt" align=right><FONT style="FONT-SIZE: 7pt" color=black face=calibri,sans-serif>540,529 </FONT></P></TD>

   <TD style="HEIGHT: 15.75pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; PADDING-RIGHT: 3.5pt" width="10%" noWrap>

   <P style="TEXT-ALIGN: right; MARGIN: 0cm 0cm 0pt" align=right><FONT style="FONT-SIZE: 7pt" color=black face=calibri,sans-serif>546,136 </FONT></P></TD>

   <TD style="HEIGHT: 15.75pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; PADDING-RIGHT: 3.5pt" width="11%" noWrap>

   <P style="TEXT-ALIGN: right; MARGIN: 0cm 0cm 0pt" align=right><FONT style="FONT-SIZE: 7pt" color=black face=calibri,sans-serif>885,240 </FONT></P></TD>

   <TD style="HEIGHT: 15.75pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; PADDING-RIGHT: 3.5pt" width="11%" noWrap>

   <P style="TEXT-ALIGN: right; MARGIN: 0cm 0cm 0pt" align=right><FONT style="FONT-SIZE: 7pt" color=black face=calibri,sans-serif>494,021 </FONT></P></TD>

   <TD style="HEIGHT: 15.75pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; PADDING-RIGHT: 3.5pt" width="11%" noWrap>

   <P style="TEXT-ALIGN: right; MARGIN: 0cm 0cm 0pt" align=right><FONT style="FONT-SIZE: 7pt" color=black face=calibri,sans-serif>474,032 </FONT></P></TD>

   <TD style="HEIGHT: 15.75pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; PADDING-RIGHT: 3.5pt" width="11%" noWrap>

   <P style="TEXT-ALIGN: right; MARGIN: 0cm 0cm 0pt" align=right><FONT style="FONT-SIZE: 7pt" color=black face=calibri,sans-serif>878,101 </FONT></P></TD>

   <TD style="HEIGHT: 15.75pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; PADDING-RIGHT: 3.5pt" width="9%" noWrap>

   <P style="TEXT-ALIGN: right; MARGIN: 0cm 0cm 0pt" align=right><FONT style="FONT-SIZE: 7pt" color=black face=calibri,sans-serif>-7,139 </FONT></P></TD>

   <TD style="HEIGHT: 15.75pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; PADDING-RIGHT: 3.5pt" width="9%" noWrap>

   <P style="TEXT-ALIGN: right; MARGIN: 0cm 0cm 0pt" align=right><FONT style="FONT-SIZE: 7pt" color=black face=calibri,sans-serif>337,572 </FONT></P></TD></TR>

<TR style="HEIGHT: 15.75pt">

   <TD style="HEIGHT: 15.75pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; BORDER-LEFT: windowtext 1pt solid; PADDING-RIGHT: 3.5pt" width="8%" noWrap>

   <P style="MARGIN: 0cm 0cm 0pt"><FONT style="FONT-SIZE: 8pt" color=black face="Times New Roman">Preferred</FONT></P></TD>

   <TD style="HEIGHT: 15.75pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; PADDING-RIGHT: 3.5pt" width="10%" noWrap>

   <P style="TEXT-ALIGN: right; MARGIN: 0cm 0cm 0pt" align=right><FONT style="FONT-SIZE: 7pt" color=black face=calibri,sans-serif>&nbsp; 105,215,700 </FONT></P></TD>

   <TD style="HEIGHT: 15.75pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; PADDING-RIGHT: 3.5pt" width="10%" noWrap>

   <P style="TEXT-ALIGN: right; MARGIN: 0cm 0cm 0pt" align=right><FONT style="FONT-SIZE: 7pt" color=black face=calibri,sans-serif>663,911 </FONT></P></TD>

   <TD style="HEIGHT: 15.75pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; PADDING-RIGHT: 3.5pt" width="10%" noWrap>

   <P style="TEXT-ALIGN: right; MARGIN: 0cm 0cm 0pt" align=right><FONT style="FONT-SIZE: 7pt" color=black face=calibri,sans-serif>781,753 </FONT></P></TD>

   <TD style="HEIGHT: 15.75pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; PADDING-RIGHT: 3.5pt" width="11%" noWrap>

   <P style="TEXT-ALIGN: right; MARGIN: 0cm 0cm 0pt" align=right><FONT style="FONT-SIZE: 7pt" color=black face=calibri,sans-serif>1,495,115 </FONT></P></TD>

   <TD style="HEIGHT: 15.75pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; PADDING-RIGHT: 3.5pt" width="11%" noWrap>

   <P style="TEXT-ALIGN: right; MARGIN: 0cm 0cm 0pt" align=right><FONT style="FONT-SIZE: 7pt" color=black face=calibri,sans-serif>797,535 </FONT></P></TD>

   <TD style="HEIGHT: 15.75pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; PADDING-RIGHT: 3.5pt" width="11%" noWrap>

   <P style="TEXT-ALIGN: right; MARGIN: 0cm 0cm 0pt" align=right><FONT style="FONT-SIZE: 7pt" color=black face=calibri,sans-serif>670,224 </FONT></P></TD>

   <TD style="HEIGHT: 15.75pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; PADDING-RIGHT: 3.5pt" width="11%" noWrap>

   <P style="TEXT-ALIGN: right; MARGIN: 0cm 0cm 0pt" align=right><FONT style="FONT-SIZE: 7pt" color=black face=calibri,sans-serif>531,339 </FONT></P></TD>

   <TD style="HEIGHT: 15.75pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; PADDING-RIGHT: 3.5pt" width="9%" noWrap>

   <P style="TEXT-ALIGN: right; MARGIN: 0cm 0cm 0pt" align=right><FONT style="FONT-SIZE: 7pt" color=black face=calibri,sans-serif>-963,776 </FONT></P></TD>

   <TD style="HEIGHT: 15.75pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; PADDING-RIGHT: 3.5pt" width="9%" noWrap>

   <P style="TEXT-ALIGN: right; MARGIN: 0cm 0cm 0pt" align=right><FONT style="FONT-SIZE: 7pt" color=black face=calibri,sans-serif>-132,572 </FONT></P></TD></TR>

<TR style="HEIGHT: 15.75pt">

   <TD style="HEIGHT: 15.75pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; BORDER-LEFT: windowtext 1pt solid; PADDING-RIGHT: 3.5pt" width="8%" noWrap>

   <P style="MARGIN: 0cm 0cm 0pt"><FONT style="FONT-SIZE: 8pt" color=black face=calibri,sans-serif>Total </FONT></P></TD>

   <TD style="HEIGHT: 15.75pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; PADDING-RIGHT: 3.5pt" width="10%" noWrap>

   <P style="TEXT-ALIGN: right; MARGIN: 0cm 0cm 0pt" align=right><FONT style="FONT-SIZE: 7pt" color=black face=calibri,sans-serif></FONT>&nbsp;</P></TD>

   <TD style="HEIGHT: 15.75pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; PADDING-RIGHT: 3.5pt" width="10%" noWrap>

   <P style="TEXT-ALIGN: right; MARGIN: 0cm 0cm 0pt" align=right><FONT style="FONT-SIZE: 7pt" color=black face=calibri,sans-serif>1,204,440 </FONT></P></TD>

   <TD style="HEIGHT: 15.75pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; PADDING-RIGHT: 3.5pt" width="10%" noWrap>

   <P style="TEXT-ALIGN: right; MARGIN: 0cm 0cm 0pt" align=right><FONT style="FONT-SIZE: 7pt" color=black face=calibri,sans-serif>1,327,889 </FONT></P></TD>

   <TD style="HEIGHT: 15.75pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; PADDING-RIGHT: 3.5pt" width="11%" noWrap>

   <P style="TEXT-ALIGN: right; MARGIN: 0cm 0cm 0pt" align=right><FONT style="FONT-SIZE: 7pt" color=black face=calibri,sans-serif>2,380,355 </FONT></P></TD>

   <TD style="HEIGHT: 15.75pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; PADDING-RIGHT: 3.5pt" width="11%" noWrap>

   <P style="TEXT-ALIGN: right; MARGIN: 0cm 0cm 0pt" align=right><FONT style="FONT-SIZE: 7pt" color=black face=calibri,sans-serif>1,291,556 </FONT></P></TD>

   <TD style="HEIGHT: 15.75pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; PADDING-RIGHT: 3.5pt" width="11%" noWrap>

   <P style="TEXT-ALIGN: right; MARGIN: 0cm 0cm 0pt" align=right><FONT style="FONT-SIZE: 7pt" color=black face=calibri,sans-serif>1,144,256 </FONT></P></TD>

   <TD style="HEIGHT: 15.75pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; PADDING-RIGHT: 3.5pt" width="11%" noWrap>

   <P style="TEXT-ALIGN: right; MARGIN: 0cm 0cm 0pt" align=right><FONT style="FONT-SIZE: 7pt" color=black face=calibri,sans-serif>1,409,440 </FONT></P></TD>

   <TD style="HEIGHT: 15.75pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; PADDING-RIGHT: 3.5pt" width="9%" noWrap>

   <P style="TEXT-ALIGN: right; MARGIN: 0cm 0cm 0pt" align=right><FONT style="FONT-SIZE: 7pt" color=black face=calibri,sans-serif>-970,915 </FONT></P></TD>

   <TD style="HEIGHT: 15.75pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0cm; PADDING-TOP: 0cm; PADDING-LEFT: 3.5pt; PADDING-RIGHT: 3.5pt" width="9%" noWrap>

   <P style="TEXT-ALIGN: right; MARGIN: 0cm 0cm 0pt" align=right><FONT style="FONT-SIZE: 7pt" color=black face=calibri,sans-serif>205,000 </FONT></P></TD></TR></TABLE></DIV>

<P style="MARGIN: 0cm 0cm 12pt"><FONT lang=EN-US style="FONT-SIZE: 12pt" face="Times New Roman"></FONT>&nbsp;</P>

<P style="MARGIN: 0cm 0cm 12pt"><FONT lang=EN-US style="FONT-SIZE: 12pt" color=black face="Times New Roman">Additionally, when we stated </FONT><I><FONT lang=EN-US style="FONT-SIZE: 12pt" color=black face="Times New Roman">&#8220;Beginning this date, pursuant to a Company&#8217;s policy, gains and losses arising from the changes in the quoted prices of the shares are recognized in other comprehensive income.&#8221;, </FONT></I><FONT lang=EN-US style="FONT-SIZE: 12pt" color=black face="Times New Roman">we were trying to convey that for every mark-to-market variation calculated at prices higher than the trigger price the difference will be recognized in other comprehensive income. On the other hand, when prices are lower than the trigger, a new impairment loss is recognized as other operating expenses reclassified from other comprehensive income; consequently, a new trigger price is determined.</FONT></P>

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   <P style="TEXT-ALIGN: center; MARGIN: 0cm 0cm 0pt" align=center><FONT style="DISPLAY: none"><FONT style="FONT-SIZE: 6pt" face="Times New Roman">Av. Brigadeiro Faria Lima, 3400 &#8211; 20&#186; andar</FONT><FONT><FONT style="FONT-SIZE: 6pt" face="Times New Roman"> </FONT></FONT><FONT style="FONT-SIZE: 6pt" face="Times New Roman">- Edificio Financial Faria Lima Center</FONT></FONT></P>

   <P style="TEXT-ALIGN: center; MARGIN: 0cm 0cm 0pt" align=center><FONT style="DISPLAY: none"><FONT lang=EN-US style="FONT-SIZE: 6pt" face="Times New Roman">Cep: 04538-132</FONT><FONT><FONT lang=EN-US style="FONT-SIZE: 6pt" face="Times New Roman"> </FONT></FONT><FONT lang=EN-US style="FONT-SIZE: 6pt" face="Times New Roman">- S&#227;o Paulo - SP</FONT></FONT></P>

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<P style="MARGIN: 0cm 0cm 12pt"><FONT lang=EN-US style="FONT-SIZE: 12pt" color=black face="Times New Roman">We propose to clarify our policy as explained above in future filings to improve our disclosure.</FONT></P>

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<P style="PAGE-BREAK-AFTER: avoid; MARGIN: 0cm 0cm 12pt 36pt; TEXT-INDENT: -36pt"><B><FONT lang=EN-US style="FONT-SIZE: 12pt" face="Times New Roman">SEC Comment No. 4.</FONT></B></P>

<P style="PAGE-BREAK-AFTER: avoid; MARGIN: 0cm 0cm 12pt 36pt; TEXT-INDENT: -36pt"><U><FONT lang=EN-US style="FONT-SIZE: 12pt" face="Times New Roman">Engineering Comments</FONT></U></P>

<P style="PAGE-BREAK-AFTER: avoid; MARGIN: 0cm 0cm 12pt 36pt; TEXT-INDENT: -36pt"><U><FONT lang=EN-US style="FONT-SIZE: 12pt" face="Times New Roman">Mineral Reserves, page 43</FONT></U></P>

<P style="MARGIN: 0cm 0cm 12pt 36pt; TEXT-INDENT: -36pt"><I><FONT lang=EN-US style="FONT-SIZE: 12pt" face="Times New Roman">4)</FONT></I><I><FONT lang=EN-US style="FONT-SIZE: 7pt" face="times new roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT></I><I><FONT lang=EN-US style="FONT-SIZE: 12pt" face="Times New Roman">We note your disclosure of the 2014 reserve audit prepared by Snowden do Brasil Consultoria Ltda for both the Casa de Pedra and Engenho mines.</FONT></I></P>

<P style="MARGIN: 0cm 0cm 12pt 36pt; TEXT-INDENT: 0cm"><I><FONT lang=EN-US style="FONT-SIZE: 12pt" face="Times New Roman">Please forward a copy of this report as supplemental information and not as part of your filing, as required by Industry Guide 7(c).</FONT></I></P>

<P style="MARGIN: 0cm 0cm 12pt 36pt; TEXT-INDENT: 0cm"><I><FONT lang=EN-US style="FONT-SIZE: 12pt" face="Times New Roman">To minimize the transfer of paper, please provide the requested information on a CD, formatted as Adobe PDF-files and provide the name and phone number for a technical person our engineer may call, if he has technical questions about your reserves.</FONT></I></P>

<P style="MARGIN: 0cm 0cm 12pt 36pt; TEXT-INDENT: 0cm"><I><FONT lang=EN-US style="FONT-SIZE: 12pt" face="Times New Roman">In the event your company desires the return of this supplemental material, please make a written request with the letter of transmittal and include a pre-paid, pre-addressed shipping label to facilitate the return of the supplemental information.&nbsp; Please note that you may request the return of this information pursuant to the provisions of Rule 12b-4 of the Exchange Act.</FONT></I></P>

<P style="PAGE-BREAK-AFTER: avoid; MARGIN: 0cm 0cm 12pt; TEXT-INDENT: 0cm"><B><FONT lang=EN-US style="FONT-SIZE: 12pt" face="Times New Roman">Response to Comment No. 4. </FONT></B></P>

<P style="MARGIN: 0cm 0cm 12pt; TEXT-INDENT: 0cm"><FONT lang=EN-US style="FONT-SIZE: 12pt" face="Times New Roman">On January 5, 2016 we mailed to the Staff&#8217;s engineer under separate cover a CD containing the 2014 reserve audit prepared by Snowden do Brasil Consultoria Ltda for both the Casa de Pedra and Engenho mines as an Adobe PDF file, along with contact information for any technical questions about our reserves.</FONT></P>

<P style="MARGIN: 0cm 0cm 12pt; TEXT-INDENT: 0cm"><FONT lang=EN-US style="FONT-SIZE: 12pt" face="Times New Roman"></FONT>&nbsp;</P>

<P style="PAGE-BREAK-AFTER: avoid; MARGIN: 0cm 0cm 12pt; TEXT-INDENT: 0cm"><FONT lang=EN-US style="FONT-SIZE: 12pt" face="Times New Roman">We hereby acknowledge that:</FONT></P>

<UL style="MARGIN-BOTTOM: 0cm; MARGIN-TOP: 0cm" type=disc>

<LI style="MARGIN: 0cm 0cm 12pt"><FONT lang=EN-US style="FONT-SIZE: 12pt" face="Times New Roman">we are responsible for the adequacy and accuracy of the disclosure in the filing;</FONT>

<LI style="MARGIN: 0cm 0cm 12pt"><FONT lang=EN-US style="FONT-SIZE: 12pt" face="Times New Roman">Staff comments or changes to disclosure in response to Staff comments do not foreclose the Commission from taking any action with respect to the filing; and</FONT>

<LI style="MARGIN: 0cm 0cm 12pt"><FONT lang=EN-US style="FONT-SIZE: 12pt" face="Times New Roman">we may not assert Staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.</FONT> </LI></UL>

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   <P style="TEXT-ALIGN: center; MARGIN: 0cm 0cm 0pt" align=center><FONT style="DISPLAY: none"><FONT style="FONT-SIZE: 6pt" face="Times New Roman">Av. Brigadeiro Faria Lima, 3400 &#8211; 20&#186; andar</FONT><FONT><FONT style="FONT-SIZE: 6pt" face="Times New Roman"> </FONT></FONT><FONT style="FONT-SIZE: 6pt" face="Times New Roman">- Edificio Financial Faria Lima Center</FONT></FONT></P>

   <P style="TEXT-ALIGN: center; MARGIN: 0cm 0cm 0pt" align=center><FONT style="DISPLAY: none"><FONT lang=EN-US style="FONT-SIZE: 6pt" face="Times New Roman">Cep: 04538-132</FONT><FONT><FONT lang=EN-US style="FONT-SIZE: 6pt" face="Times New Roman"> </FONT></FONT><FONT lang=EN-US style="FONT-SIZE: 6pt" face="Times New Roman">- S&#227;o Paulo - SP</FONT></FONT></P>

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<P style="TEXT-ALIGN: center; MARGIN: 0cm 0cm 12pt 18pt; TEXT-INDENT: 0cm" align=center><FONT lang=EN-US style="FONT-SIZE: 12pt" face="Times New Roman">*******</FONT></P>

<P style="PAGE-BREAK-AFTER: avoid; MARGIN: 0cm 0cm 12pt; TEXT-INDENT: 0cm"><FONT lang=EN-US style="FONT-SIZE: 12pt" face="Times New Roman">If you have any questions or require any additional information with respect to the above, please do not hesitate to contact Andrew J&#225;nszky at +55-11-3927-7701, Felipe Camara at +55-11-3927-7716 or Maria Beatriz Martinez Alves at +55-11-3049-7537.</FONT></P>

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<P style="PAGE-BREAK-AFTER: avoid; MARGIN: 0cm 0cm 12pt 252pt"><FONT lang=PT-BR style="FONT-SIZE: 12pt" face="Times New Roman">Sincerely,</FONT></P>

<P style="PAGE-BREAK-AFTER: avoid; MARGIN: 0cm 0cm 12pt 252pt"><U><FONT lang=PT-BR style="FONT-SIZE: 12pt" face="Times New Roman">/s/ Gustavo Henrique Santos de Sousa<BR></FONT></U><FONT lang=PT-BR style="FONT-SIZE: 12pt" face="Times New Roman">Companhia Sider&#250;rgica Nacional <BR>By: Gustavo Henrique Santos de Sousa</FONT><U><FONT lang=PT-BR style="FONT-SIZE: 12pt" face="Times New Roman"><BR></FONT></U><FONT lang=PT-BR style="FONT-SIZE: 12pt" face="Times New Roman">Title: Principal Financial Officer</FONT></P></DIV>

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<H1 style="PAGE-BREAK-AFTER: avoid; TEXT-ALIGN: center; MARGIN: 0cm 18pt 0pt 0cm; LINE-HEIGHT: 10pt" align=center><B><FONT style="FONT-SIZE: 9pt" face="Times New Roman">Companhia Sider&#250;rgica Nacional</FONT></B></H1></TD></TR>

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   <P style="TEXT-ALIGN: center; MARGIN: 0cm 0cm 0pt" align=center><FONT style="DISPLAY: none"><FONT style="FONT-SIZE: 6pt" face="Times New Roman">Escrit&#243;rio Central</FONT></FONT></P>

   <P style="TEXT-ALIGN: center; MARGIN: 0cm 0cm 0pt" align=center><FONT style="DISPLAY: none"><FONT style="FONT-SIZE: 6pt" face="Times New Roman">Av. Brigadeiro Faria Lima, 3400 &#8211; 20&#186; andar</FONT><FONT><FONT style="FONT-SIZE: 6pt" face="Times New Roman"> </FONT></FONT><FONT style="FONT-SIZE: 6pt" face="Times New Roman">- Edificio Financial Faria Lima Center</FONT></FONT></P>

   <P style="TEXT-ALIGN: center; MARGIN: 0cm 0cm 0pt" align=center><FONT style="DISPLAY: none"><FONT lang=EN-US style="FONT-SIZE: 6pt" face="Times New Roman">Cep: 04538-132</FONT><FONT><FONT lang=EN-US style="FONT-SIZE: 6pt" face="Times New Roman"> </FONT></FONT><FONT lang=EN-US style="FONT-SIZE: 6pt" face="Times New Roman">- S&#227;o Paulo - SP</FONT></FONT></P>

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