6-K 1 siditr1q17_6k.htm 6-K

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 January, 2018
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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# Table of Contents

Company Information |
Capital Breakdown | 1
Parent Company Financial Statements |
Balance Sheet – Assets | 2
Balance Sheet – Liabilities | 3
Statement of Income | 4
Statement of Comprehensive Income | 5
Statement of Cash Flows | 6
Statement of Changes in Shareholders’ Equity |
01/01/2017 to 03/31/2017 | 7
01/01/2016 to 03/31/2016 | 8
Statement of Value Added | 9
Consolidated Financial Statements |
Balance Sheet - Assets | 10
Balance Sheet - Liabilities | 11
Statement of Income | 12
Statement of Comprehensive Income | 13
Statement of Cash Flows | 14
Statement of Changes in Shareholders’ Equity |
01/01/2017 to 03/31/2017 | 15
01/01/2016 to 03/31/2016 | 16
Statement of Value Added | 17
Comments on the Company’s Consolidated Performance | 18
Notes to the quarterly financial information | 30
Reports and Statements |
Unqualified Independent Auditors’ Review Report | 77

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Company Information / Capital Breakdown

Number of Shares (Units) | Current Quarter 03/31/2017 |
Paid-in Capital |  |
Common | 1,387,524,047 |
Preferred | 0 |
Total | 1,387,524,047 |
Treasury Shares |  |
Common | 30,391,000 |
Preferred | 0 |
Total | 30,391,000 |

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Parent Company Financial Statements / Balance Sheet - Assets
(R$ thousand)
Code | Description | Current Quarter | Previous Year
03/31/2017 | 12/31/2016
1 | Total Assets | 41,416,050 | 41,716,949
1.01 | Current assets | 7,902,001 | 7,989,806
1.01.01 | Cash and cash equivalent | 961,290 | 1,466,746
1.01.02 | Financial investments | 731,560 | 758,433
1.01.02.02 | Financial investments at amortized cost | 731,560 | 758,433
1.01.03 | Trade receivables | 2,841,368 | 2,624,853
1.01.04 | Inventory | 2,771,024 | 2,504,230
1.01.08 | Other current assets | 596,759 | 635,544
1.02 | Non-current assets | 33,514,049 | 33,727,143
1.02.01 | Long-term assets | 1,424,992 | 1,395,962
1.02.01.09 | Other non-current assets | 1,424,992 | 1,395,962
1.02.02 | Investments | 22,521,072 | 22,703,508
1.02.03 | Property, plant and equipment | 9,498,079 | 9,580,126
1.02.04 | Intangible assets | 69,906 | 47,547

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Parent Company Financial Statements / Balance Sheet – Liabilities
(R$ thousand)
Code | Description | Current Quarter | Previous Year
03/31/2017 | 12/31/2016
2 | Total liabilities | 41,416,050 | 41,716,949
2.01 | Current liabilities | 4,172,497 | 4,108,798
2.01.01 | Payroll and related taxes | 134,543 | 135,676
2.01.02 | Trade payables | 1,496,827 | 1,312,183
2.01.03 | Tax payables | 61,498 | 66,445
2.01.04 | Borrowings and financing | 1,872,447 | 2,051,882
2.01.05 | Other payables | 538,159 | 464,531
2.01.06 | Provisions | 69,023 | 78,081
2.01.06.01 | Provision for tax, social security, labor and civil risks | 69,023 | 78,081
2.02 | Non-current liabilities | 30,795,603 | 31,413,623
2.02.01 | Long term Borrowings and financing | 27,565,313 | 28,196,893
2.02.02 | Other payables | 69,429 | 76,499
2.02.03 | Deferred Taxes | 584,401 | 587,357
2.02.04 | Provisions | 2,576,460 | 2,552,874
2.02.04.01 | Provision for tax, social security, labor and civil risks | 573,309 | 548,537
2.02.04.02 | Other provisions | 2,003,151 | 2,004,337
2.02.04.02.03 | Provision for environmental liabilities and decommissioning of assets | 266,640 | 265,772
2.02.04.02.04 | Pension and healthcare plan | 719,266 | 719,266
2.02.04.02.05 | Provision for losses on investments | 1,017,245 | 1,019,299
2.03 | Shareholders’ equity | 6,447,950 | 6,194,528
2.03.01 | Share Capital | 4,540,000 | 4,540,000
2.03.02 | Capital reserves | 30 | 30
2.03.04.02 | Earnings reserves | 238,976 | 238,976
2.03.04.09 | Treasury shares | (238,976) | (238,976)
2.03.05 | Accumulated profit/(losses) | (1,216,331) | (1,301,961)
2.03.08 | Other comprehensive income | 3,124,251 | 2,956,459

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Parent Company Financial Statements / Statements of Income (R$ thousand)
|  | Year to date | YTD previous year
Code | Description | 01/01/2017 to 03/31/2017 | 01/01/2016 to 03/31/2016
3.01 | Revenues from sale of goods and rendering of services | 2,486,216 | 1,977,640
3.02 | Costs from sale of goods and rendering of services | (1,959,313) | (1,638,396)
3.03 | Gross profit | 526,903 | 339,244
3.04 | Operating expenses/income | (152,046) | (869,986)
3.04.01 | Selling expenses | (163,525) | (168,633)
3.04.02 | General and administrative expenses | (60,579) | (123,260)
3.04.04 | Other operating income | 3,582 | 2,840
3.04.05 | Other operating expenses | (75,872) | (115,239)
3.04.06 | Equity in results of affiliated companies | 144,348 | (465,694)
3.05 | Profit before financial income (expenses) and taxes | 374,857 | (530,742)
3.06 | Financial income (expenses) | (292,183) | (255,181)
3.06.01 | Financial income | 81,728 | 18,429
3.06.02 | Financial expenses | (373,911) | (273,610)
3.06.02.01 | Net exchange differences over financial instruments | 307,177 | 1,055,821
3.06.02.02 | Financial expenses | (681,088) | (1,329,431)
3.07 | Profit (loss) before taxes | 82,674 | (785,923)
3.08 | Income tax and social contribution | 2,956 | 399
3.09 | Profit (loss) from continued operations | 85,630 | (785,524)
3.10 | Profit (loss) from discontinued operations | 0 | 333
3.11 | Profit (loss) for the year | 85,630 | (785,191)
3.99.01.01 | Common shares | 0.06310 | (0.57856)
3.99.02.01 | Common shares | 0.06310 | (0.57856)

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Parent Company Statements / Statement of Comprehensive Income (R$ thousand) |  |
|  | Year to date | YTD previous year
Code | Description | 01/01/2017 to 03/31/2017 | 01/01/2016 to 03/31/2016
4.01 | (Loss) profit for the year | 85,630 | (785,191)
4.02 | Other comprehensive income | 167,792 | 417,311
4.02.01 | Actuarial gains over pension plan of affiliates, net of taxes | 30 | 85
4.02.02 | Cumulative translation adjustments for the year | (39,643) | (181,111)
4.02.03 | Available-for-sale assets | 53,299 | 32,353
4.02.5 | (Loss) / gain on the percentage change in investments | 2,814 | 0
4.02.8 | Gain (loss) on cash flow hedge accounting | 133,044 | 534,423
4.02.10 | Realization of cash flow hedge accounting reclassified to income statement | 16,402 | 12,697
4.02.11 | Gain (Loss) on net investment hedge from investments in affiliates | 1,846 | 18,864
4.03 | Comprehensive income for the year | 253,422 | (367,880)

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Parent Company Financial Statements / Statements of Cash Flows – Indirect Method (R$ thousand)
|  | Year to date | YTD previous year
Code | Description | 01/01/2017 to 03/31/2017 | 01/01/2016 to 03/31/2016
6.01 | Net cash from operating activities | (167.443) | (470,360)
6.01.01 | Cash from operations | 427.478 | (744,785)
6.01.01.01 | Profit (loss) for the period | 85.630 | (785,191)
6.01.01.02 | Financial charges in borrowing and financing raised | 608,474 | 630,953
6.01.01.03 | Financial charges in borrowing and financing granted | (13,720) | (8,470)
6.01.01.04 | Depreciation, depletion and amortization | 170,254 | 135,525
6.01.01.05 | Equity in results of affiliated companies | (144,348) | 465,361
6.01.01.06 | Deferred tax | (2,956) | (450)
6.01.01.07 | Provision for tax, social security, labor, civil and environmental risks | 15,714 | 21,868
6.01.01.08 | Exchange differences, net | (301,616) | (1,221,066)
6.01.01.09 | Write-off of PPE and Intangible assets | 2,742 | 7,590
6.01.01.10 | Provision for environmental liabilities and decommissioning of assets | 868 | 337
6.01.01.12 | Others | 6,436 | 8,758
6.01.02 | Changes in assets and liabilities | (594,921) | 274,425
6.01.02.01 | Trade receivables - third parties | (150,012) | (23,251)
6.01.02.02 | Trade receivables - related parties | (59,418) | 87,172
6.01.02.03 | Inventories | (266,794) | 14,092
6.01.02.04 | Receivables - related parties | 474,367 | 823,783
6.01.02.05 | Tax assets | (44,811) | 14,263
6.01.02.06 | Judicial deposits | (10,466) | 9,326
6.01.02.09 | Trade payables | 184,644 | (21,070)
6.01.02.10 | Payroll and related taxes | (1,133) | 1,446
6.01.02.11 | Taxes in installments – REFIS | (5,028) | 63,419
6.01.02.13 | Payables to related parties | (15,285) | 0
6.01.02.15 | Interest paid | (738,016) | (671,713)
6.01.02.16 | Interest received - Related Parties | 187 | 0
6.01.02.19 | Others | 36,844 | (23,042)
6.02 | Net cash used in investing activities | (93,231) | (145,105)
6.02.01 | Advance for future capital increase | (7,410) | (7,231)
6.02.02 | Purchase of property, plant and equipment | (105,372) | (236,057)
6.02.04 | Capital increase - subsidiary | 0 | (2,200)
6.02.05 | Intercompany loans granted | (14,524) | 0
6.02.06 | Intercompany loans received | 7,297 | 0
6.02.07 | Exclusive funds | (95) | 123,852
6.02.08 | Financial Investments, net of redemption | 26,873 | (23,469)
6.03 | Net cash used in financing activities | (244,599) | (131,019)
6.03.01 | Borrowings and financing raised, net of transaction cost | 0 | 76,338
6.03.02 | Borrowings and financing, related parties | 0 | 40,239
6.03.03 | Transaction Costs | 0 | (26,006)
6.03.04 | Amortization of borrowings and financing | (215,207) | (221,590)
6.03.05 | Amortization of borrowings and financing - related parties | (29,392) | 0
6.04 | Exchange rate on translating cash and cash equivalents | (183) | (6,469)
6.05 | Increase (decrease) in cash and cash equivalents | (505,456) | (752,953)
6.05.01 | Cash and equivalents at the beginning of the year | 1,466,746 | 1,885,199
6.05.02 | Cash and equivalents at the end of the year | 961,290 | 1,132,246

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Parent Company Financial Statements / Statement of Changes in Equity - 01/01/2017 to 03/31/2017
(R$ thousand)
Code | Description | Paid-in capital | Capital reserve, granted options and treasury shares | Earnings reserve | Retained earnings (accumulated losses) | Other comprehensive income | Shareholders' equity
5.01 | Opening balances | 4,540,000 | 30 | - | (1,301,961) | 2,956,459 | 6,194,528
5.03 | Adjusted opening balances | 4,540,000 | 30 | - | (1,301,961) | 2,956,459 | 6,194,528
5.05 | Total comprehensive income | - | - | - | 85,630 | 167,792 | 253,422
5.05.01 | Profit (loss) for the period | - | - | - | 85,630 | - | 85,630
5.05.02 | Other comprehensive income | - | - | - | - | 167,792 | 167,792
5.05.02.04 | Translation adjustments for the year | - | - | - | - | (39,643) | (39,643)
5.05.02.06 | Actuarial gains/(Losses) on pension plan, net of taxes | - | - | - | - | 30 | 30
5.05.02.07 | Available-for-sale assets, net of taxes | - | - | - | - | 53,299 | 53,299
5.05.02.08 | (Loss) / gain on the percentage change in investments | - | - | - | - | 2,814 | 2,814
5.05.02.09 | (Loss) / gain on cash flow hedge accounting, net of taxes | - | - | - | - | 149,446 | 149,446
5.05.02.10 | (Loss) / gain on foreign investments | - | - | - | - | 1,846 | 1,846
5.07 | Closing balance | 4,540,000 | 30 | - | (1,216,331) | 3,124,251 | 6,447,950

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Parent Company Financial Statements / Statement of Changes in Equity - 01/01/2016 to 03/31/2016
(R$ thousand)
Code | Description | Paid-in capital | Capital reserve, granted options and treasury shares | Earnings reserve | Retained earnings (accumulated losses) | Other comprehensive income | Shareholders' equity
5.01 | Opening balances | 4,540,000 | 30 | - | (367,214) | 1,790,693 | 5,963,509
5.03 | Adjusted opening balances | 4,540,000 | 30 | - | (367,214) | 1,790,693 | 5,963,509
5.05 | Total comprehensive income | - | - | - | (785,191) | 417,311 | (367,880)
5.05.01 | Profit (loss) for the period | - | - | - | (785,191) | 0 | (785,191)
5.05.02 | Other comprehensive income | - | - | - | - | 417,311 | 417,311
5.05.02.04 | Translation adjustments for the year | - | - | - | - | (181,111) | (181,111)
5.05.02.06 | Actuarial gain (loss) on pension plan, net of taxes | - | - | - | - | 85 | 85
5.05.02.07 | Available-for-sale assets, net of taxes | - | - | - | - | 32,353 | 32,353
5.05.02.08 | (Loss) / gain on cash flow hedge accounting, net of taxes | - | - | - | - | 534,423 | 534,423
5.05.02.09 | Realization of cash flow hedge reclassified to the income statement | - | - | - | - | 12,697 | 12,697
5.05.02.10 | (Loss) / gain on foreign investments | - | - | - | - | 18,864 | 18,864
5.07 | Closing balance | 4,540,000 | 30 | - | (1,152,405) | 2,208,004 | 5,595,629

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Parent Company Financial Statements / Statement of Value Added
(R$ thousand)
|  | Year to date | Previous year
Code | Description | 01/01/2017 to 03/31/2017 | 01/01/2016 to 03/31/2016
7.01 | Revenues | 3,046,543 | 2,447,647
7.01.01 | Sales of products and rendering of services | 3,038,748 | 2,458,864
7.01.02 | Other revenues | 2,110 | 45
7.01.04 | Allowance for (reversal of) doubtful accounts | 5,685 | (11,262)
7.02 | Raw materials acquired from third parties | (2,235,392) | (1,716,408)
7.02.01 | Cost of sales and services | (1,980,282) | (1,446,531)
7.02.02 | Materials, electric power, outsourcing and other | (258,922) | (267,269)
7.02.03 | Impairment/recovery of assets | 3,812 | (2,608)
7.03 | Gross value added | 811,151 | 731,239
7.04 | Retentions | (170,254) | (135,525)
7.04.01 | Depreciation, amortization and depletion | (170,254) | (135,525)
7.05 | Wealth created | 640,897 | 595,714
7.06 | Value added received | 208,755 | (629,954)
7.06.01 | Equity in income of affiliates | 144,348 | (465,694)
7.06.02 | Financial income | 81,728 | 18,429
7.06.03 | Others | (17,321) | (182,689)
7.06.03.01 | Others and exchange gains | (17,321) | (182,689)
7.07 | Wealth for distribution | 849,652 | (34,240)
7.08 | Wealth distributed | 849,652 | (34,240)
7.08.01 | Personnel | 292,020 | 309,192
7.08.01.01 | Salaries and wages | 221,052 | 239,994
7.08.01.02 | Benefits | 56,293 | 49,640
7.08.01.03 | Severance payment (FGTS) | 14,675 | 19,558
7.08.02 | Taxes, fees and contributions | 117,347 | 349,292
7.08.02.01 | Federal | 91,158 | 328,262
7.08.02.02 | State | 26,191 | 21,030
7.08.02.03 | Municipal | (2) | 0
7.08.03 | Remuneration on third-party capital | 354,655 | 92,800
7.08.03.01 | Interest | 681,020 | 1,329,594
7.08.03.02 | Leases | 2,499 | 2,822
7.08.03.03 | Others | (328,864) | (1,239,616)
7.08.03.03.01 | Others and exchange losses | (328,864) | (1,239,616)
7.08.04 | Remuneration on Shareholders' capital | 85,630 | (785,191)
7.08.04.03 | Retained earnings (accumulated losses) | 85,630 | (785,191)
7.08.05 | Others | 0 | (333)
7.08.05.01 | Gain (loss) on discontinued operations | 0 | (333)

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Consolidated Financial Statements / Balance Sheet - Assets
(R$ thousand)
Code | Description | Current Quarter | Previous Year
03/31/2017 | 12/31/2016
1 | Total Assets | 43,778,165 | 44,153,623
1.01 | Current assets | 12,149,265 | 12,444,918
1.01.01 | Cash and cash equivalent | 4,315,796 | 4,871,162
1.01.02 | Financial investments | 734,688 | 760,391
1.01.02.02 | Financial investments measured at amortized cost | 734,688 | 760,391
1.01.03 | Trade receivables | 1,931,081 | 1,997,216
1.01.04 | Inventory | 4,259,964 | 3,964,136
1.01.08 | Other current assets | 907,736 | 852,013
1.01.08.03 | Others | 907,736 | 852,013
1.02 | Non-current assets | 31,628,900 | 31,708,705
1.02.01 | Long-term assets | 1,791,202 | 1,745,971
1.02.01.06 | Deferred tax assets | 88,050 | 70,151
1.02.01.09 | Other non-current assets | 1,703,152 | 1,675,820
1.02.02 | Investments | 4,652,783 | 4,568,451
1.02.03 | Property, plant and equipment | 17,921,071 | 18,135,879
1.02.04 | Intangible assets | 7,263,844 | 7,258,404

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Consolidated Financial Statements / Balance Sheet – Liabilities
(R$ thousand)
Code | Description | Current Quarter | Previous Year
03/31/2017 | 12/31/2016
2 | Total liabilities | 43,778,165 | 44,153,623
2.01 | Current liabilities | 5,407,953 | 5,496,683
2.01.01 | Payroll and related taxes | 251,521 | 253,837
2.01.02 | Trade payables | 1,934,358 | 1,763,206
2.01.03 | Tax payables | 177,488 | 231,861
2.01.04 | Borrowings and financing | 1,837,999 | 2,117,448
2.01.05 | Other payables | 1,105,992 | 1,021,724
2.01.06 | Provisions | 100,595 | 108,607
2.01.06.01 | Provision for tax, social security, labor and civil risks | 100,595 | 108,607
2.02 | Non-current liabilities | 30,700,275 | 31,272,419
2.02.01 | Long term Borrowings and financing | 27,688,594 | 28,323,570
2.02.02 | Other payables | 128,301 | 131,137
2.02.03 | Deferred tax liabilities | 1,084,701 | 1,046,897
2.02.04 | Provisions | 1,798,679 | 1,770,815
2.02.04.01 | Provision for tax, social security, labor and civil risks | 729,831 | 704,485
2.02.04.02 | Other provisions | 1,068,848 | 1,066,330
2.02.04.02.03 | Provision for environmental liabilities and decommissioning of assets | 349,582 | 347,064
2.02.04.02.04 | Pension and healthcare plan | 719,266 | 719,266
2.03 | Consolidated Shareholders’ equity | 7,669,937 | 7,384,521
2.03.01 | Share Capital | 4,540,000 | 4,54 0,000
2.03.02 | Capital reserves | 30 | 30
2.03.04.02 | Earnings reserves | 238,976 | 238,976
2.03.04.09 | Treasury shares | (238,976) | (238,976)
2.03.05 | Accumulated profit/(losses) | (1,216,331) | (1,301,961)
2.03.08 | Other comprehensive income | 3,124,251 | 2,956,459
2.03.09 | Profit attributable to the non-controlling interests | 1,221,987 | 1,189,993

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Consolidated Financial Statements / Statements of Income (R$ thousand)
|  | Year to date | YTD previous year
Code | Description | 01/01/2017 to 03/31/2017 | 01/01/2016 to 03/31/2016
3.01 | Revenues from sale of goods and rendering of services | 4,411,596 | 3,997,286
3.02 | Costs from sale of goods and rendering of services | (3,093,474) | (3,073,661)
3.03 | Gross profit | 1,318,122 | 923,625
3.04 | Operating expenses/income | (566,335) | (702,648)
3.04.01 | Selling expenses | (369,792) | (449,390)
3.04.02 | General and administrative expenses | (118,459) | (160,059)
3.04.04 | Other operating income | 6,499 | 22,272
3.04.05 | Other operating expenses | (105,688) | (161,095)
3.04.06 | Equity in results of affiliated companies | 21,105 | 45,624
3.05 | Profit before financial income (expenses) and taxes | 751,787 | 220,977
3.06 | Financial income (expenses) | (497,224) | (884,599)
3.06.01 | Financial income | 116,519 | 242,620
3.06.02 | Financial expenses | (613,743) | (1,127,219)
3.06.02.01 | Net exchange differences over financial instruments | 172,744 | (305,478)
3.06.02.02 | Financial expenses | (786,487) | (821,741)
3.07 | Profit (loss) before taxes | 254,563 | (663,622)
3.08 | Income tax and social contribution | (136,948) | (113,408)
3.09 | Profit (loss) from continued operations | 117,615 | (777,030)
3.10 | Profit (loss) from discontinued operations | 0 | 333
3.11 | Consolidated Profit (loss) for the year | 117,615 | (776,697)
3.11.01 | Profit attributable to the controlling interests | 85,630 | (785,191)
3.11.02 | Profit attributable to the non-controlling interests | 31,985 | 8,494
3.99.01.01 | Common shares | 0.06310 | (0.57856)
3.99.02.01 | Common shares | 0.06310 | (0.57856)

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Quarterly Financial Information - March 31, 2017 – CIA SIDERURGICA NACIONAL | ## Version: 1

Consolidated Financial Statements / Statement of Comprehensive Income (R$ thousand)
|  | Year to date | YTD previous year
Code | Description | 01/01/2017 to 03/31/2017 | 01/01/2016 to 03/31/2016
4.01 | Consolidated profit (loss) for the year | 117,615 | (776,697)
4.02 | Other comprehensive income | 167,792 | 417,311
4.02.01 | Actuarial gains over pension plan of affiliates, net of taxes | 30 | 85
4.02.04 | Cumulative translation adjustments for the year | (39,643) | (181,111)
4.02.05 | Available-for-sale assets | 53,299 | 32,353
4.02.07 | (Loss) / gain on the percentage change in investments | 2,814 | -
4.02.09 | Gain (loss) on cash flow hedge accounting | 133,044 | 534,423
4.02.11 | Realization of cash flow hedge accounting reclassified to income statement | 16,402 | 12,697
4.02.12 | Gain (Loss) on hedge of net investment in foreign operations. | 1,846 | 18,864
4.03 | Consolidated comprehensive income for the year | 285,407 | (359,386)
4.03.01 | Attributed to controlling Shareholders | 253,422 | (367,880)
4.03.02 | Attributed to non-controlling Shareholders | 31,985 | 8,494

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Quarterly Financial Information - March 31, 2017 – CIA SIDERURGICA NACIONAL | ## Version: 1

Consolidated Financial Statements / Statements of Cash Flows – Indirect Method
(R$ thousand)
|  | Year to date | YTD previous year
Code | Description | 01/01/2017 to 03/31/2017 | 01/01/2016 to 03/31/2016
6.01 | Net cash from operating activities | (104,517) | (939,450)
6.01.01 | Cash from operations | 929,170 | (164,143)
6.01.01.01 | Profit (loss) attributable to the controlling interests | 85,630 | (785,191)
6.01.01.02 | Profit (loss) attributable to the non-controlling interests | 31,985 | 8,494
6.01.01.03 | Financial charges in borrowing and financing raised | 686,998 | 747,647
6.01.01.04 | Financial charges in borrowing and financing granted | (16,276) | (12,913)
6.01.01.05 | Depreciation, depletion and amortization | 401,276 | 321,944
6.01.01.06 | Equity in in results of affiliated companies | (21,105) | (44,979)
6.01.01.07 | Deferred tax | 22,793 | 86,104
6.01.01.08 | Provision for tax, social security, labor, civil and environmental risks | 17,478 | 16,525
6.01.01.09 | Exchange differences, net | (272,176) | (379,360)
6.01.01.10 | Gain (loss) from derivative financial instruments | (13,224) | 362
6.01.01.12 | Write-down of PPE and Intangible assets | 2,572 | 12,966
6.01.01.13 | Gain on repurchase of debt securities | 0 | (146,214)
6.01.01.14 | Provision for environmental liabilities and decommissioning of assets | 2,518 | 1,142
6.01.01.15 | Others | 701 | 9,330
6.01.02 | Changes in assets and liabilities | (1,033,687) | (775,307)
6.01.02.01 | Trade receivables - third parties | 87,436 | (219,640)
6.01.02.02 | Trade receivables - related parties | (21,349) | (8,407)
6.01.02.03 | Inventories | (312,169) | 443,691
6.01.02.04 | Receivables - related parties | 1,727 | 0
6.01.02.05 | Tax assets | (2,852) | 62,152
6.01.02.06 | Judicial deposits | (15,347) | 4,098
6.01.02.08 | Trade payables | 192,477 | (59,340)
6.01.02.09 | Payroll and related taxes | (1,670) | 14,283
6.01.02.10 | Taxes in installments – REFIS | (56,195) | (31,274)
6.01.02.11 | Payables to related parties | (8,654) | 508
6.01.02.13 | Interest paid | (929,979) | (932,279)
6.01.02.15 | Interest received - Related Parties | 187 | 0
6.01.02.17 | Others | 32,701 | (49,099)
6.02 | Net cash used in investing activities | (153,386) | (919,927)
6.02.02 | Purchase of property, plant and equipment | (188,306) | (329,832)
6.02.04 | Receivable/(payable) from derivative financial instruments | 15,200 | (556,682)
6.02.06 | Acquisition of intangible assets | (267) | (6)
6.02.07 | Intercompany loans granted | (15,188) | 0
6.02.08 | Intercompany loans received | 9,472 | 0
6.02.09 | Financial Investments, net of redemption | 25,703 | (33,407)
6.03 | Net cash used in financing activities | (306,516) | (438,466)
6.03.01 | Borrowings and financing raised, net of transaction cost | 0 | 76,338
6.03.02 | Transaction cost | 0 | (26,770)
6.03.03 | Amortization of borrowings and financing | (306,516) | (336,936)
6.03.06 | Buyback of debt securities | 0 | (151,098)
6.04 | Exchange rate on translating cash and cash equivalents | 9,053 | (55,143)
6.05 | Increase (decrease) in cash and cash equivalents | (555,366) | (2,352,986)
6.05.01 | Cash and equivalents at the beginning of the year | 4,871,162 | 7,861,052
6.05.02 | Cash and equivalents at the end of the year | 4,315,796 | 5,508,066

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Quarterly Financial Information - March 31, 2017 – CIA SIDERURGICA NACIONAL | ## Version: 1

Consolidated Financial Statements / Statements of Changes in Equity - 01/01/2017 to 03/31/2017
(R$ thousand)
Code | Description | Paid-in capital | Capital reserve, granted options and treasury shares | Earnings reserve | Retained earnings (accumulated losses) | Other comprehensive income | Shareholders' equity | Non-controlling interests | Consolidated shareholders' equity
5.01 | Opening balances | 4,540,000 | 30 | - | (1,301,961) | 2,956,459 | 6,194,528 | 1,189,993 | 7,384,521
5.03 | Adjusted opening balances | 4,540,000 | 30 | - | (1,301,961) | 2,956,459 | 6,194,528 | 1,189,993 | 7,384,521
5.05 | Total comprehensive income | - | - | - | 85,630 | 167,792 | 253,422 | 31,985 | 285,407
5.05.01 | Profit (loss) for the year | - | - | - | 85,630 | 0 | 85,630 | 31,985 | 117,615
5.05.02 | Other comprehensive income | - | - | - | 0 | 167,792 | 167,792 | 0 | 167,792
5.05.02.04 | Translation adjustments for the year | - | - | - | 0 | (39,643) | (39,643) | 0 | (39,643)
5.05.02.06 | Actuarial gains on pension plan, net of taxes | - | - | - | 0 | 30 | 30 | 0 | 30
5.05.02.07 | Available-for-sale assets, net of taxes | - | - | - | 0 | 53,299 | 53,299 | 0 | 53,299
5.05.02.08 | (Loss) / gain on the percentage change in investments | - | - | - | 0 | 2,814 | 2,814 | 0 | 2,814
5.05.02.09 | (Loss) / gain on hedge accounting, net of taxes | - | - | - | 0 | 149,446 | 149,446 | 0 | 149,446
5.05.02.10 | (Loss) / gain on hedge of net investment in foreign operations | - | - | - | 0 | 1,846 | 1,846 | 0 | 1,846
5.06 | Internal changes in shareholders’ equity | - | - | - | 0 | 0 | 0 | 9 | 9
5.06.04 | Non-controlling interests in affiliates | - | - | - | 0 | 0 | 0 | 9 | 9
5.07 | Closing balance | 4,540,000 | 30 | - | (1,216,331) | 3,124,251 | 6,447,950 | 1,221,987 | 7,669,937

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Quarterly Financial Information - March 31, 2017 – CIA SIDERURGICA NACIONAL | ## Version: 1

Consolidated Financial Statements / Statements of Changes in Equity - 01/01/2016 to 03/31/2016
(R$ thousand)
Code | Description | Paid-in capital | Capital reserve, granted options and treasury shares | Earnings reserve | Retained earnings (accumulated losses) | Other comprehensive income | Shareholders' equity | Non-controlling interests | Consolidated shareholders' equity
5.01 | Opening balances | 4,540,000 | 30 | - | (367,214) | 1,790,693 | 5,963,509 | 1,127,779 | 7,091,288
5.03 | Adjusted opening balances | 4,540,000 | 30 | - | (367,214) | 1,790,693 | 5,963,509 | 1,127,779 | 7,091,288
5.05 | Total comprehensive income | - | - | - | (785,191) | 417,311 | (367,880) | 8,494 | (359,386)
5.05.01 | Profit (loss) for the year | - | - | - | (785,191) | 0 | (785,191) | 8,494 | (776,697)
5.05.02 | Other comprehensive income | - | - | - | 0 | 417,311 | 417,311 | 0 | 417,311
5.05.02.04 | Translation adjustments for the year | - | - | - | 0 | (181,111) | (181,111) | 0 | (181,111)
5.05.02.06 | Actuarial gains on pension plan, net of taxes | - | - | - | 0 | 85 | 85 | 0 | 85
5.05.02.07 | Available-for-sale assets, net of taxes | - | - | - | 0 | 32,353 | 32,353 | 0 | 32,353
5.05.02.08 | (Loss) / gain on hedge accounting, net of taxes | - | - | - | 0 | 534,423 | 534,423 | 0 | 534,423
5.05.02.09 | Realization of cash flow hedge reclassified to the income statement | - | - | - | 0 | 12,697 | 12,697 | 0 | 12,697
5.05.02.10 | (Loss) / gain on net investment hedge, net of taxes | - | - | - | 0 | 18,864 | 18,864 | 0 | 18,864
5.06 | Internal changes in shareholders’ equity | - | - | - | 0 | 0 | 0 | (609) | (609)
5.06.04 | Non-controlling interests in affiliates | - | - | - | 0 | 0 | 0 | (609) | (609)
5.07 | Closing balance | 4,540,000 | 30 | - | (1,152,405) | 2,208,004 | 5,595,629 | 1,135,664 | 6,731,293

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Quarterly Financial Information - March 31, 2017 – CIA SIDERURGICA NACIONAL | ## Version: 1

Consolidated Financial Statements / Statements of Value Added
(R$ thousand)
|  | Year to date | Previous year
Code | Description | 01/01/2017 to 03/31/2017 | 01/01/2016 to 03/31/2016
7.01 | Revenues | 5,052,156 | 4,531,181
7.01.01 | Sales of products and rendering of services | 5,043,196 | 4,544,408
7.01.02 | Other revenues | 3,013 | 260
7.01.04 | Allowance for (reversal of) doubtful debts | 5,947 | (13,487)
7.02 | Raw materials acquired from third parties | (3,149,745) | (3,031,157)
7.02.01 | Cost of sales and services | (2,547,733) | (2,329,581)
7.02.02 | Materials, electric power, outsourcing and other | (605,184) | (706,770)
7.02.03 | Impairment/recovery of assets | 3,172 | 5,194
7.03 | Gross value added | 1,902,411 | 1,500,024
7.04 | Retentions | (401,276) | (320,703)
7.04.01 | Depreciation, amortization and depletion | (401,276) | (320,703)
7.05 | Wealth created | 1,501,135 | 1,179,321
7.06 | Value added received | 35,072 | (417,740)
7.06.01 | Equity in income of affiliates | 21,105 | 45,624
7.06.02 | Financial income | 116,519 | 242,620
7.06.03 | Others | (102,552) | (705,984)
7.06.03.01 | Others and exchange gains | (102,552) | (705,984)
7.07 | Wealth for distribution | 1,536,207 | 761,581
7.08 | Wealth distributed | 1,536,207 | 761,581
7.08.01 | Personnel | 529,763 | 550,380
7.08.01.01 | Salaries and wages | 416,986 | 442,306
7.08.01.02 | Benefits | 90,981 | 78,795
7.08.01.03 | Severance payment (FGTS) | 21,796 | 29,279
7.08.02 | Taxes, fees and contributions | 375,785 | 562,933
7.08.02.01 | Federal | 302,090 | 508,031
7.08.02.02 | State | 68,423 | 49,502
7.08.02.03 | Municipal | 5,272 | 5,400
7.08.03 | Remuneration on third-party capital | 513,044 | 425,298
7.08.03.01 | Interest | 786,419 | 821,895
7.08.03.02 | Leases | 6,542 | 5,011
7.08.03.03 | Others | (279,917) | (401,608)
7.08.03.03.01 | Others and exchange losses | (279,917) | (401,608)
7.08.04 | Remuneration on Shareholders' capital | 117,615 | (776,697)
7.08.04.03 | Retained earnings (accumulated losses) | 85,630 | (785,191)
7.08.04.04 | Non-controlling interests in retained earnings | 31,985 | 8,494
7.08.05 | Others | 0 | (333)
7.08.05.01 | Gain (loss) on discontinued operations | 0 | (333)

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Comments on the Company’s Consolidated Performance

1Q17 Earnings Release

Companhia Siderúrgica Nacional (CSN) (B3 S.A. – BOLSA BRASIL BALCÃO : CSNA3) (NYSE: SID) discloses results for the first quarter of 2017 (1Q17). The information disclosed in Brazilian Reais and prepared in accordance with International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB); and also in accordance with accounting practices adopted in Brazil and fully convergent with international accounting standards, issued by the Accounting Pronouncements Committee (CPC) and referenced by the Brazilian Securities and Exchange Commission (CVM), pursuant to CVM Instruction 485 of 09/01/2010. The below text encompasses the Company's consolidated results for the first quarter of 2017 (1Q17) and comparisons are for the fourth quarter of 2016 (4Q16) and for the first quarter of 2016 (1Q16) without Metallic, unless otherwise specified. The Real/U.S. Dollar exchange rate was R$3.1684 on March 31, 2017 and R$3.2591 on December 31, 2016.

Operating and Financial Highlights

· EBITDA totaled R$1,333 million, 82% up on 1Q16, accompanied by an EBITDA margin of 28.7%, 11 p.p. higher than in the previous year.

· Leverage declined by 3.2x, from 8.7x on 1Q16 to 5.5x on 1Q17.

· Steel EBITDA came to R$610 million, 12% higher on 4Q16, while apparent steel consumption climbed 5.0% according to the Brazilian Steel Institute (IABr).

· Mining EBITDA reached R$620 million, 21% higher than in 4Q16.

|  |  |  | Change
Highlights | 1Q16 | 4Q16 | 1Q17 |  |
|  |  |  | 1Q17 x 4Q16 | 1Q17 x 1Q16
Steel Sales (thousand t) | 1,248 | 1,187 | 1,194 | 1% | -4%
- Domestic Market | 52% | 62% | 52% | -10% | 0%
- Overseas Subsidiaries | 42% | 34% | 41% | 7% | -1%
- Exports | 6% | 4% | 8% | 4% | 2%
Iron Ore Sales (thousand t)1 | 8,295 | 9,191 | 7,244 | -21% | -13%
- Domestic Market | 13% | 14% | 19% | 5% | 6%
- Exports | 87% | 86% | 81% | -5% | -6%
Consolidated Results (R$ Million) |  |  |  |  |
Net Revenue | 3,997 | 4,519 | 4,412 | -2% | 10%
Gross Profit | 923 | 1,349 | 1,318 | -2% | 43%
Adjusted EBITDA | 733 | 1,249 | 1,333 | 7% | 82%
Adjusted Net Debt | 26,654 | 25,831 | 25,477 | -1% | -4%
Adjusted Cash Position | 6,472 | 5,762 | 5,146 | -11% | -20%
Net Debt / Adjusted EBITDA | 8.7x | 6.3x | 5.5x | (0,89x) | (3.22x)

Adjusted EBITDA is calculated based on net income/loss, before depreciation and amortization, income taxes, the net financial result, results from investees, and other operating income (expenses) and includes the proportional share of the EBITDA of the jointly-owned investees MRS Logística and CBSI. The Adjusted EBITDA includes 100% interest in Congonhas Minérios, 37.27% in MRS and 50% in CBSI as of December 2015.

² Adjusted Net Debt and Adjusted Cash and Cash Equivalents includes 100% of Congonhas Minérios, 37.27% of MRS and 50% of CBSI, excluding Forfaiting and Drawee risk operations.

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CSN’s Consolidated Results

· Net revenue totaled R$4,412 million in 1Q17, 2% down on 4Q16, due to lower sold volume in the mining segment and despite the price increases and the slight upturn in steel product sales volume compared with the previous quarter.

· COGS came to R$3,093 million in 1Q17, 2% lower than in the previous quarter.

· Gross profit totaled R$1,318 million, 2% down on 4Q16. The gross margin stood at 29.9%, in line with the previous quarter.

· Selling, general and administrative expenses amounted to R$488 million in 1Q17, 17% less than in 4Q16.

· Other operating income (expenses) was an expense of R$99 million in 1Q17, versus negative R$114 million in 4Q16.

· In 1Q17, the net financial result was negative by R$497 million, as a result of financial expenses of R$601 million, which has been partially offset by financial revenue of R$103 million.

Financial Result (R$ million) | 1Q16 | 4Q16 | 1Q17
Financial Result - IFRS | (885) | (677) | (497)
Financial Revenue | 243 | 115 | 103
Financial Expenses | (1,128) | (792) | (601)
Financial Expenses (ex-exchange variation) | (821) | (813) | (787)
Result with Exchange Variation | (307) | 21 | 186
Monetary and Exchange Variation | 936 | 5 | 308
Hedge Accounting | (554) | 17 | (135)
Derivative Result | (689) | (2) | 13

· CSN’s equity result was a positive R$21 million in 1Q17, versus a negative R$24 million in 4Q16. This result was chiefly due to the performance of TLSA.

Share of Profit (Loss) of Investees (R$ million) | 1Q16 | 4Q16 | 1Q17 | Change
1Q17 | x | 4Q16 | 1Q17 | x | 1Q16
MRS Logística | 61 | 20 | 39 | 91% | (37%)
CBSI | 1 | 1 | - | - | -
TLSA | (7) | (35) | (4) | (88%) | (39%)
Arvedi Metalfer BR | - | - | (1) | - | -
Eliminations | (11) | (9) | (13) | 45% | 26%
Share of Profit (Loss) of Investees | 46 | (24) | 21 | - | (55%)

· CSN recorded a first-quarter net income of R$118 million, versus loss income of R$56 million in 4Q16. The result in 1Q17 is for the better performance of the financial result, which recorded R$ 497 million, and R$ 677 million in 4Q16, 27% down on the last quarter of 2016.

Adjusted EBITDA (R$ million) | 1Q16 | 4Q16 | 1Q17 | Change
1Q17 | x | 4Q16 | 1Q17 | x | 1Q16
Profit (Loss) for the Period | (777) | (56) | 118 | - | -
(*) Result of Discontinued Operations | - | 3 | - | - | -
(-) Depreciation | 309 | 356 | 390 | 10% | 26%
(+) Income Tax and Social Contribution | 113 | 2 | 137 | - | 21%
(-) Net Financial Result | 885 | 677 | 497 | (27%) | (45%)
EBITDA (CVM Instruction 527) | 542 | 982 | 1,142 | (16%) | 111%
(+) Other Operating Income / Expenses | 139 | 114 | 99 | (13%) | (21%)
(+) Share of Profit (Loss) of Investees | (46) | 24 | (21) | - | (54%)
(-) Proportionate EBITDA of Jointly-Owned Subsidiaries | 110 | 129 | 113 | (13%) | 3%
Adjusted EBITDA | 733 | 1,249 | 1,333 | 7% | 82%

¹The Company discloses adjusted EBITDA excluding interests in investments and other operating income (expenses) in the belief that these items should not be considered when calculating recurring operating cash flow

Page 19

· Adjusted EBITDA amounted to R$1,333 million in 1Q17, versus R$1,249 million in the previous quarter, accompanied by an adjusted EBITDA margin of 29%, 2.4 p.p. up.

¹The adjusted EBITDA margin is calculated as the ratio between adjusted EBITDA and adjusted net revenue, which considered the stakes of 100% in CSN Mineração, 37.27% in MRS and 50% in CBSI.

Debt

The adjusted amounts of EBITDA, debt and cash included the stakes of 100% in CSN Mineração, 37.27% in MRS and 50% in CBSI, as well as financial investments used as collateral for exchange operations on the B3 S.A. – BOLSA BRASIL BALCÃO . On March 31, 2017, consolidated net debt totaled R$25,477 million, while the net debt/EBITDA ratio, calculated based on LTM adjusted EBITDA, stood at 5.5x.

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Debt (R$ million) and Net Debt/Adjusted EBITDA (x)

Foreign Exchange Exposure

The FX exposure of our consolidated balance sheet on March 31, 2017 was US$ 603 million, ex bond as shown in the table below.

The hedge accounting adopted by CSN correlates projected export inflows in dollars with part of the scheduled debt payments in the same currency. Therefore, the exchange variation of the dollar-denominated debt is temporarily booked under shareholders’ equity, being recorded in the income statement when dollar revenues from exports are received.

Foreign Exchange Exposure | IFRS
(US$ million) | 12/31/2016 | 3/31/2017
Cash | 914 | 1,091
Accounts Receivable | 373 | 331
Total Assets | 1,290 | 1,425
Borrowings and Financing | (4,373) | (4,327)
Suppliers | (97) | (115)
Other Liabilities | (18) | (15)
Total Liabilities | (4,488) | (4,458)
Foreign Exchange Exposure | (3,198) | (3,032)
Notional Amount of Derivatives Contracted, Net | - | -
Cash Flow Hedge Accounting | 1,458 | 1,429
Net Foreign Exchange Exposure | (1,740) | (1,603)
Perpetual Bonds | 1,000 | 1,000
Net Foreign Exchange Exposure excluding Perpetual Bonds | (740) | (603)

Capex

CSN invested R$189 million in 1Q17, 58% less of 4Q16.

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Capex (R$ million) | 1Q16 | 4Q16 | 1Q17
Steel | 119 | 208 | 92
Mining | 62 | 78 | 59
Cement | 139 | 135 | 24
Logistics | 10 | 23 | 13
Other | - | 8 | -
Total Capex - IFRS | 330 | 452 | 189

Working Capital

The working capital invested in the Company’s business totaled R$3,031 million in 1Q17, R$161 million more than in 4Q16, chiefly due to the R$171 million increase in inventories. On a same comparison basis, the average receivable period down on 2 days, while payment periods and inventory turnover increased by 5 days and 10 days, respectively.

To calculate working capital, CSN adjusts its assets and liabilities as demonstrated below:

· Accounts Receivable: Excludes Dividends Receivable, Advances to Employees and Other Credits.;

· Inventories: Includes Estimated Losses and excludes Spare Parts, which are not part of the cash conversion cycle, and will be booked in Fixed Assets when consumed;

· Recoverable Taxes: Composed only by the Income (IRPJ) and Social Contribution (CSLL) Taxes amount included in Recoverable Taxes;

· Taxes Payable: Composed by the Current Liabilities account Taxes Payable plus Taxes in Installments;

· Advance from Clients: Subaccount of Other Liabilities recorded in Current Liabilities;

· Suppliers: Includes Forfaiting and Drawee Risk (Note 13 to the Quarterly Information - ITR).

Working Capital (R$ Million) | 1Q16 | 4Q16 | 1Q17 |  | Change
| 1Q17 | x | 4Q16 | 1Q17 | x | 1Q16
Assets | 5,573 | 5,210 | 5,526 |  | 316 | -47
Accounts Receivable | 1,689 | 1,905 | 1,849 |  | -57 | 160
Inventories Turnover | 3,587 | 3,251 | 3,562 |  | 311 | -24
Advances to Taxes | 298 | 54 | 115 |  | 60 | -183
Liabilities | 2,266 | 2,340 | 2,495 |  | 155 | 229
Suppliers | 1,543 | 1,763 | 1,934 |  | 171 | 392
Salaries and Social Contribution | 244 | 254 | 252 |  | -2 | 8
Taxes Payable | 412 | 232 | 190 |  | -41 | -222
Advances from Clients | 67 | 91 | 119 |  | 28 | 52
Working Capital | 3,307 | 2,870 | 3,031 |  | 161 | -276
Turnover Ratio (days) | 1Q16 | 4Q16 | 1Q17 |  | Change
| 1Q17 | x | 4Q16 | 1Q17 | x | 1Q16
Receivables | 33 | 35 | 33 |  | -2 | 0
Supplier Payment | 46 | 51 | 56 |  | 5 | 10
Investory Turnover | 106 | 94 | 104 |  | 10 | -2
Cash Conversion Cycle | 93 | 78 | 81 |  | 3 | -12

Results by Segment

The Company maintains integrated operations in five business segments: Steel, Mining, Logistics, Cement and Energy. The main assets and/or companies comprising each segment are presented below:

Page 22

Notes: As of 2013, the Company ceased the proportional consolidation of its jointly-owned subsidiaries Namisa, MRS and CBSI. For the purpose of preparing and presenting the information by business segment, Management opted to maintain the proportional consolidation of its jointly-owned subsidiaries, in line with historical data. In the reconciliation of CSN’s consolidated results, these companies’ results are eliminated in the “Corporate Expenses/Elimination” column.

Since the end of 2015, after the combination of CSN’s mining assets (Casa de Pedra, Namisa and Tecar), the consolidated results have included all the data related to this new company.

Net Revenue by Segment – 1Q17 (R$ million)

Page 23

Adjusted EBITDA by Segment – 1Q17 (R$ million)

1Q17 Result | Steel |  | Mining |  | Port Logistics |  | Railway Logistics |  | Cement |  | Energy |  | Corporate Expenses/Elimination |  | Consolidated
(R$ million) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net Revenue | 3,071 |  | 1,174 |  | 55 |  | 323 |  | 126 |  | 90 |  | (428) |  | 4,412
Domestic Market | 1,789 |  | 190 |  | 55 |  | 323 |  | 126 |  | 90 |  | (584) |  | 1,990
Exports | 1,283 |  | 984 |  | - |  | - |  | - |  | - |  | 156 |  | 2,422
Cost of Goods and Services Sold | (2,395) |  | (636) |  | (37) |  | (280) |  | (130) |  | (69) |  | 454 |  | (3,093)
Gross Profit | 677 |  | 538 |  | 18 |  | 43 |  | (4) |  | 21 |  | 25 |  | 1,318
S&A expenses | (235) |  | (40) |  | (7) |  | (24) |  | (19) |  | (7) |  | (156) |  | (488)
Depreciation | 169 |  | 123 |  | 3 |  | 104 |  | 35 |  | 4 |  | (48) |  | 390
Proportionate EBITDA of Jointly-Owned Subsidiaries | - |  | - |  | - |  | - |  | - |  | - |  | 113 |  | 113
Adjusted EBITDA | 610 |  | 620 |  | 14 |  | 123 |  | 12 |  | 19 |  | (65) |  | 1,333

4Q16 Result | Steel |  | Mining |  | Port Logistics |  | Railway Logistics |  | Cement |  | Energy |  | Corporate Expenses/Elimination |  | Consolidated
| (R$ million) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Net Revenue | 2,962 |  | 1,317 |  | 62 |  | 324 |  | 128 |  | 67 |  | (341) |  | 4,519
| Domestic Market | 1,979 |  | 168 |  | 62 |  | 324 |  | 128 |  | 67 |  | (570) |  | 2,159
| Exports | 982 |  | 1,149 |  | - |  | - |  | - |  | - |  | 228 |  | 2,359
| Cost of Goods and Services Sold | (2,334) |  | (797) |  | (34) |  | (237) |  | (133) |  | (48) |  | 413 |  | (3,170)
| Gross Profit | 628 |  | 521 |  | 28 |  | 87 |  | (5) |  | 19 |  | 72 |  | 1,349
| S&A expenses | (262) |  | (133) |  | (6) |  | (9) |  | (20) |  | (7) |  | (148) |  | (585)
| Depreciation | 179 |  | 124 |  | 3 |  | 58 |  | 28 |  | 4 |  | (41) |  | 356
| Proportionate EBITDA of Jointly-Owned Subsidiaries | - |  | - |  | - |  | - |  | - |  | - |  | 129 |  | 129
| Adjusted EBITDA | 545 |  | 511 |  | 26 |  | 137 |  | 2 |  | 17 |  | 12 |  | 1,249

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Steel

According to the World Steel Association (WSA), global crude steel production totaled 410 billion tonnes in the first quarter of 2017, 5.7% more than in 1Q16. According to the Brazilian Steel Institute (IABr), domestic crude steel production came to 8.2 million tonnes, 10.9% up , , the apparent consumption moved up by 5.0%, to 4.6 million tonnes, with domestic sales of 4.0 million tonnes and imports of 637,000 tonnes. Exports totaled 3.8 million tonnes, 17.4% more than in the same period last year. According to the Brazilian Steel Distributors’ Association (INDA), 1Q17 steel purchases sales remain flat, while sales fell totaling 759,600 tonnes . Inventories stood at 951,500 tonnes at the close of 1Q17, 3.6% more than in the previous quarter while inventory turnover fell to 3.7 months.

Automotive

According to the Auto Manufacturers’ Association (ANFAVEA), vehicle production totaled 610 million units in 1Q17, 24% up on 1Q16. In the same period, new car, light commercial vehicle, truck and bus licensing fell by 1.9% to 472,000 units. The association expects an increase of 4.0% in vehicle licensing in 2017, with the sale of 2.13 million units and production of 2.41 million units, 11.9% more than in 2016.

Construction

According to the Construction Material Manufacturers’ Association (ABRAMAT), sales of building materials fell 6.3% between 1Q16 and 1Q17.

Home Appliances

According to the Brazilian Institute of Geography and Statistics (IBGE), home appliance production increased 4.5% in the first quarter over the same period last year.

Results from CSN’s Steel Operation

· Total sales came to 1,194,000 tonnes in 1Q17, 1% up 4Q16, broken down as follows: 52% from the domestic market, 40% from our subsidiaries abroad and 8% from exports. · In 1Q17, CSN’s domestic steel sales came to 617,000 tonnes, 16% less than in 4Q16. Of this total, 566,000 tonnes corresponded to flat steel and 51,000 tonnes to long steel. · First-quarter export sales amounted to 577,000 tonnes, 28% up on the 4Q16 figure. Of this total, direct exports reached 92,000 tonnes, the overseas subsidiaries sold 485,000 tonnes, 157,000 LLC, 228,000 by SWT and 100,000 by Lusosider. · In the first quarter, CSN maintained its high share of coated products as a percentage of total sales volume, following the strategy of adding more value to its product mix. Sales of coated products such as galvanized items and tin plate accounted for 59% of flat steel sales, 1.4% up on 4Q16, including all the markets where the Company operates. The export market was one of the quarter's highlights, with the share of coated products remaining high, at 87% in 1Q17. · Net revenue totaled R$3,071 million in 1Q17, 4% up on 4T16, mostly due to higher steel sales volume and the price increase observed this quarter. In the first quarter, average net revenue per tonne stood at R$2,522, 3% higher than in 4Q16. |  | Sales Volume (%) – Steel 1,246 1,187 1,194

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· COGS moved up by 3% over the previous quarter, to R$2,395 million. · Company’s production cost amounted to R$1,865 million in 1Q17, 4% more than in 4Q16, particularly due to the increase in coal prices. · The slab production cost reached R$1,367/t, 16% up on 4Q16. · Adjusted EBITDA totaled R$610 million in the first quarter, increasing by 12% over the R$545 million posted in 4Q16. The adjusted EBITDA margin increased 1.5 p.p. over the previous quarter, to 19.9%. |

In 1Q17, plate production totaled 982 thousand tons, a 4% increase compared to 4Q16. The production of laminates 8% less than in 4Q16, totaling 874 thousand tons in the quarter.

Flat Steel Production | 1Q16 | 4Q16 | 1Q17 | Change
(Thousand tonnes) | 1Q17 | x | 4Q16 | 1Q17 | x | 1Q16
Total Slabs (UPV + Third Parties) | 836 | 1,058 | 999 | (6%) | 20%
Crude Steel Production | 835 | 942 | 982 | 4% | 18%
Third Parties Slabs | 1 | 116 | 18 | - | -
Total Rolled Products | 746 | 952 | 874 | (8%) | 17%
Total Long Steel | 38 | 54 | 53 | - | 39%

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Mining

Demand for steel in China remained high, influenced by heavy investments in infrastructure and the strong construction activity in the first quarter. Given this scenario, rising steel prices pushed up iron ore prices, which came to more than US$95.00/dmt in February and averaged US$85.64/dmt (Platts, Fe62%, N. China) at the end of 1Q17, 21% comparing to the previous quarter.

In the first quarter, maritime freight was positively impacted by the upturn in crude prices and, consequently, in ship fuel. As a result, Route BCI-C3 (Tubarão-Qingdao) averaged US$13.03/t, 10% up on 4Q16.

Results from CSN’s Mining Operation

· CSN’s first-quarter iron ore production totaled 7.8 million tonnes, in line with the 4Q16 figure.

· Iron ore sales amounted to 7.2 million tonnes in 1Q17, 21% down on 4Q16. CSN Mineração sold 1.3 million tonnes of iron ore to the President Vargas Plant (UPV).

Production Volume and Mining Sales | 1Q16 | 4Q16 | 1Q17 | Change
(thousand t) | 1Q17 | x | 4Q16 | 1Q17 | x | 1Q16
Iron Ore Production¹ | 7,326 | 7,758 | 7,858 | 1% |  | 7%
Third Parties Purchase | 617 | 609 | 137 | (78%) |  | (78%)
Total Production + Purchase | 7,943 | 8,367 | 7,995 | (4%) |  | 1%
UPV Sale | 1,047 | 1,264 | 1,347 | 7% |  | 29%
Third Parties Sales Volume | 7,248 | 7,927 | 5,897 | (26%) |  | (19%)
Total Sales | 8,295 | 9,191 | 7,244 | (21%) |  | (13%)

¹ Production and sales volumes includes 100% interest in Congonhas in December 2015.

2 As of December 2015, Congonhas Minérios began selling iron ore to CSN’s President Vargas Plant (UPV).

· Net revenue from mining operations totaled R$1,174 million in 1Q17, 11% down on 4Q16 due to the lower sales volume. CRF+FOB unit revenue stood at US$53/t in 4Q16 , 20% up on the previous quarter, while the iron ore price index (Platts, 62% Fe, N. China) rose 21% in the same period.

· In the first quarter, mining COGS totaled R$636 million, 20% less than in 4Q16, influenced by lower sales volume.

· Adjusted EBITDA amounted to R$620 million in 1Q17, 20% higher than in 4Q16, accompanied by an adjusted EBITDA margin of 52.8%, 14.0 p.p. up, chiefly due to the reduction in total sales volume.

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CSN Mineração’s Iron Ore Price

(CFR + FOB* - US$/wmt delivered to China)

The table above shows the breakdown of CSN's price of modality, CFR+FOB, by quarter, as of 2Q16.

Logistics

Railway Logistics: first-quarter net revenue totaled R$323 million, generating EBITDA of R$123 million and an EBITDA margin of 38%.

Port Logistics: in the first quarter, Sepetiba Tecon handled 275,000 tonnes of steel products, in addition to 5,000 tonnes of general cargo and approximately 30,000 containers. First-quarter net revenue came to R$55 million, accompanied by EBITDA of R$14 million and an EBITDA margin of 26%.

Sepetiba TECON Highlights | 1Q16 | 4Q16 | 1Q17 | Change
1Q17 | x | 4Q16 | 1Q17 | x | 1Q16
Container Volume (thousand units) | 39 | 35 | 30 | (15%) | (23%)
Steel Product Volume (thousand t) | 143 | 338 | 275 | (19%) | 92%
General Cargo Volume (thousand t) | 12 | 7 | 5 | (27%) | (58%)

Cement

According to IBGE’s Monthly Survey of Industry (PIM-PF), Brazil’s cement production in the last twelve months recorded year-on-year reduction of 9.3%, in line with the civil construction segment’s performance.

Preliminary figures from the Cement Industry Association (SNIC) indicate local cement sales of 13 million tonnes in 1Q17, 8.2% less than in the previous year. The SNIC expects 2017 cement sales to fall by between 5% and 7% over 2016.

Results from CSN’s Cement Operation

In 1Q17, cement sales amounted to 821,000 tonnes, 3% more than in 4Q16, while net revenue came to R$126 million. EBITDA totaled R$12 million, with an EBITDA margin o f 10%.

Cement Highlights | 1Q16 | 4Q16 | 1Q17 | Change
(thousand t) | 1Q17 | x | 4Q16 | 1Q17 | x | 1Q16
Total Production | 580 | 801 | 817 | 2% | 41%
Total Sales | 571 | 799 | 821 | 3% | 44%

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Energy

According to the Energy Research Company (EPE), Brazilian electricity consumption until March 2017 recorded a year-on-year increase of 2.0%, to 118GWh. Consumption in the industrial and commercial segments grew by 1.1% and 0.5%, respectively.

Results from CSN’s Energy Operation

In 1Q17, net revenue from energy operations totaled R$90 million, EBITDA stood at R$19 million and the EBITDA margin was 21%.

Capital Market

CSN’s shares appreciated by 6% in 1Q17, while the Ibovespa increased by 7% in the same period. Daily traded volume on the B3 S.A. – BOLSA BRASIL BALCÃO averaged R$51.8 million. On the New York Stock Exchange (NYSE), CSN’s American Depositary Receipts (ADRs) appreciated by 15%, versus the Dow Jones’ 1% upturn. On the NYSE, daily traded volume of CSN’s ADRs averaged US$8.3 million.

Certain of the statements contained herein are forward-looking statements, which express or imply results, performance or events that are expected in the future. These include future results that may be implied by historical results and the statements under ‘Outlook’. Actual results, performance or events may differ materially from those expressed or implied by the forward-looking statements as a result of several factors, such as the general and economic conditions in Brazil and other countries, interest rate and exchange rate levels, protectionist measures in the U.S., Brazil and other countries, changes in laws and regulations and general competitive factors (on a global, regional or national basis).

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(Expressed in thousands of reais – R$, unless otherwise stated)

1. DESCRIPTION OF BUSINESS

Companhia Siderúrgica Nacional “CSN”, also referred to as the Company or Parent Company, is a publicly-held company incorporated on April 9, 1941, under the laws of the Federative Republic of Brazil (Companhia Siderúrgica Nacional, its subsidiaries, associates and joint ventures are collectively referred to herein as the "Group”). The Company’s registered office is located in São Paulo, SP, Brazil.

CSN is listed on the São Paulo Stock Exchange (B3 - Brasil, Bolsa, Balcão) and on the New York Stock Exchange (NYSE). Accordingly, the Company reports its information to the Brazilian Securities and Exchange Commission (CVM) and the U.S. Securities and Exchange Commission (SEC).

The Group's main operating activities are divided into five (5) segments as follows:

· Steel:

The Company’s main industrial facility is the Presidente Vargas steelworks (“UPV”), located in the city of Volta Redonda, State of Rio de Janeiro. This segment consolidates all operations related to the production, distribution and sale of flat steel, long steel, metallic containers and galvanized steel. In addition to the facilities in Brazil, CSN has operations in the United States, Portugal and Germany aimed at gaining markets and providing excellent services to end consumers. Its steel is used in home appliances, civil construction and automobile industries.

· Mining:

The production of iron ore is developed in the city of Congonhas, State of Minas Gerais.

Iron ore is sold basically in the international market, especially in Europe and Asia. The prices charged in these markets are historically cyclical and subject to significant fluctuations over short periods of time, driven by several factors related to global demand, strategies adopted by the major steel producers, and the foreign exchange rate. All these factors are beyond the Company’s control. The ore transportation is carried out through Terminal de Carvão e Minérios do Porto de Itaguaí - TECAR, a solid bulk terminal, one of the four terminals that comprise the Itaguaí Port, in Rio de Janeiro. Imports of coal and coke are also carried out through this terminal by providing services to CSN’s steel segment.

The Company´s mining activities also comprise exploitation of tin in the State of Rondônia, to supply the needs of the UPV. The surplus of these raw materials is sold to subsidiaries and third parties.

· Cement:

CSN entered the cement market boosted by the synergy between this activity and its existing businesses. Next to the Presidente Vargas Steelworks (UPV) in Volta Redonda (RJ), the Company installed a new business unit that produces CP-III type cement using slag produced by the UPV’s blast furnaces. It also exploits limestone and dolomite at the Arcos unit in the State of Minas Gerais, to meet the needs of the UPV and of the cement plant.

In the second half of 2016, the Company started the operation of a new clinker kiln in Arcos, where it already operates a clinker kiln using limestone from a Company’s mine and two cement mills. With this project, the cement production capacity in the Southeast may reach 4.4 million tons per year. In a later stage the Company evaluates the implementation of an advanced milling unit, adding another 1 million tons.

· Logistics

Railroads:

CSN has interests in three railroad companies: MRS Logística S.A., which manages the Southeast Railway System of the former Rede Ferroviária Federal S.A. (“RFFSA”), Transnordestina Logística S.A. (“TLSA”) and FTL - Ferrovia Transnordestina Logística S.A. (“FTL”), which operates the former Northeast Railway System of RFFSA, in the States of Maranhão, Piauí, Ceará, Rio Grande do Norte, Paraíba, Pernambuco and Alagoas, with TLSA being responsible for the rail links of Missão Velha-Salgueiro, Salgueiro-Trindade, Trindade-Eliseu Martins, Salgueiro-Porto de Suape and Missão Velha-Porto de Pecém (Railway System II) and FTL being responsible for the rail links of São Luiz-Mucuripe, Arrojado-Recife, Itabaiana-Cabedelo, Paula Cavalcante-Macau and Propriá-Jorge Lins (Railway System I).

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Ports:

The Company operates in the State of Rio de Janeiro, through its subsidiary Sepetiba Tecon S.A., the Container Terminal (Tecon) and through its subsidiary CSN Mineração S.A., TECAR, both at the Itaguaí Port. Locate in the Bay of Sepetiba, they have privileged highway, railroad and maritime access.

At Tecon, shipment of CSN´s steel products, movement of containers, storage, consolidation and deconsolidation of cargo are carried out and, at Tecar, the shipment of iron ore to overseas market and the unloading of coal and other products, such as petroleum coke, sulfur and zinc concentrate for our own use and for several customers.

· Energy:

As energy is fundamental to its production process, the Company has electric energy generation assets to guarantee its self-sufficiency.

Note 24 - “Segment Information” details the financial information per CSN´s business segment.

· Going Concern

In 2017, the Company paid, including principal and interest, approximately R$4 billion of its borrowings and financing. During 2018 the borrowings are expected to be paid and, including interest to be incurred next year, amount to approximately R$7.7 billion.

The financial leverage may adversely affect the businesses, financial conditions and operating results, entailing the following:

· Allocation of a substantial part of the cash generated from operations for repayment of the borrowings and financing.

· Exposure to (i) fluctuations in interest rates due to the renegotiation of debts and eventual new borrowings taken, and (ii) fluctuations in exchange rates since a significant part of the borrowings and financing is denominated in foreign currency.

· Increase in economic and financial vulnerability due to adverse conditions of the industry and segment, limiting the funds available in the short term, considering the high financial leverage and the expected cash disbursements;

· Limitation of the Company’s ability to enter into new businesses (acquisitions) until the financial leverage is reduced;

· Limitation of the Company’s ability to obtain new credit lines under more favorable interest conditions due to the risks associated to the current financial leverage.

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The Company’s ability to continue as a going concern depends, therefore, on the achievement of operating targets defined by Management, and on the refinancing of existing debts and/or actions related to financial deleveraging.

In addition to the continuous focus on operating income improvement, Management has various initiatives in progress to increase the Company’s liquidity through the extension of payment terms of borrowings and financing.

This plan was started in 2015 with the renegotiation of R$ 2.5 billion with Caixa Econômica Federal and R$ 2.2 billion with Banco do Brasil S.A, postponing the maturities from 2016 and 2017 to 2018 through 2022. In 2016, the Company extended the installments of certain NCE contracts amounting to R$ 100 million and prepayments of US$ 66 million with Bradesco, postponing the maturities from 2016 to 2019. For 2017, Management remains committed to the plan to extend it debt payment term, mainly those of short term, seeking the renegotiation of borrowings and financing in the amount of R$ 1.5 billion.

Additionally, Management studies financial deleveraging alternatives based on the disposal of non-strategic assets; however, it is not possible to affirm that these sales will occur within a twelve-month period. Thus, the Company did not segregate and did not reclassify any assets in the financial statements as discontinued operations in accordance with CPC 31 (IFRS 5).

Based on Management’s cash flow projections that covered the operating period until December 2018, which depend on factors such as the achievement of production targets, sales volumes and prices, as well as on renegotiations of borrowings and financing, Management believes that the Company has the appropriate resources to continue as a going concern in a reasonably foreseeable period of time. Accordingly, the Company’s financial information for the quarter ended March 31, 2017 has been prepared on the assumption that the Company will continue as a going concern.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

2.a) Basis of preparation

The Group’s parent company and consolidated condensed interim financial information (“condensed quarterly information”) has been prepared in accordance with International Financial Reporting Standards (“IFRS”), implemented in Brazil through the Accounting Pronouncements Committee (“CPC”), approved by the Brazilian Securities and Exchange Commission (“CVM”) and the Federal Accounting Council (“CFC”). All the relevant information of the interim financial statements, and only this information, is being disclosed and corresponds to the information used by the Company's management in its activities

The condensed interim financial information has been prepared and is being presented in accordance with CPC 21 (R1) - “Interim Financial Reporting” and IAS 34 - “Interim Financial Reporting”, consistently with the standards issued by the CVM.

The significant accounting policies applied in this condensed interim financial information are consistent with the policies described in Note 2 to the Company’s financial statements for the year ended December 31, 2016, filed with CVM.

This condensed interim financial information does not include all requirements of annual or full financial statements and, accordingly, should be read in conjunction with the Company’s financial statements for the year ended December 31, 2016.

Therefore, in this condensed interim financial information the following notes are not repeated, either due to redundancy or to the materiality in relation to those already presented in the annual financial statements:

Note 02 – Summary of significant accounting policies

Note 03 – Business combination

Note 04 - Noncurrent assets held for sale and results from discontinued operations

Note 10 - Investments

Note 17 - Taxes in installments

Note 18 - Provision for tax, social security, labor, civil and environmental risks and judicial deposits

Note 28 – Employee benefits

Note 30 – Commitments

The parent company and consolidated condensed interim financial information was approved by Management on December 22, 2017.

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2.b) Basis of presentation

The consolidated condensed interim financial information is presented in Brazilian reais, which is the Company’s principal functional currency and the Group’s presentation currency.

Transactions in foreign currencies are translated into the functional currency using the exchange rates in effect at the dates of the transactions or valuations when items are remeasured. The asset and liability balances are translated at the exchange rates prevailing at the end of the reporting period. As of March 31, 2017, US$1 is equivalent to R$3.1684 (R$3.2591 as of December 31, 2016) and €1 is equivalent to R$3.3896 (R$3.4384 as of December 31, 2016), according to the rates obtained from the Central Bank of Brazil website.

2.c) Basis of consolidation

The accounting policies have been consistently applied to all consolidated companies. The consolidated interim financial statements for the period ended March 31, 2017 and year ended December 31, 2016 include the following direct and indirect subsidiaries and joint ventures, as well as the exclusive funds, as described below:

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· Companies

|  | Equity interests (%) |  |
Companies |  | 03/31/2017 |  | 12/31/2016 |  | Core business
Direct interest in subsidiaries: full consolidation
CSN Islands VII Corp. |  | 100.00 |  | 100.00 |  | Financial transactions
CSN Islands XI Corp. |  | 100.00 |  | 100.00 |  | Financial transactions
CSN Islands XII Corp. |  | 100.00 |  | 100.00 |  | Financial transactions
CSN Minerals S.L.U. |  | 100.00 |  | 100.00 |  | Equity interests
CSN Export Europe, S.L.U. |  | 100.00 |  | 100.00 |  | Financial transactions and Equity interests
CSN Metals S.L.U. |  | 100.00 |  | 100.00 |  | Equity interests and Financial transactions
CSN Americas S.L.U. |  | 100.00 |  | 100.00 |  | Equity interests and Financial transactions
CSN Steel S.L.U. |  | 100.00 |  | 100.00 |  | Equity interests and Financial transactions
TdBB S.A (*) |  | 100.00 |  | 100.00 |  | Equity interests
Sepetiba Tecon S.A. |  | 99.99 |  | 99.99 |  | Port services
Minérios Nacional S.A. |  | 99.99 |  | 99.99 |  | Mining and Equity interests
Companhia Florestal do Brasil | 99.99 |  | 99.99 |  | Reforestation
Estanho de Rondônia S.A. |  | 99.99 |  | 99.99 |  | Tin Mining
Companhia Metalúrgica Prada | 99.99 |  | 99.99 |  | Manufacture of containers and distribution of steel products
CSN Gestão de Recursos Financeiros Ltda. (*) | 99.99 |  | 99.99 |  | Management of funds and securities portfolio
CSN Mineração S.A. |  | 87.52 |  | 87.52 |  | Mining and Equity interests
CSN Energia S.A. |  | 100.00 |  | 100.00 |  | Sale of electric power
FTL - Ferrovia Transnordestina Logística S.A. | 90.78 |  | 90.78 |  | Railroad logistics
Nordeste Logística S.A. |  | 99.99 |  | 99.99 |  | Port services
CGPAR - Construção Pesada S.A. | 100.00 |  | 100.00 |  | Mining support services and Equity interests
Indirect interest in subsidiaries: full consolidation
Companhia Siderúrgica Nacional LLC | 100.00 |  | 100.00 |  | Steel
CSN Europe Lda. |  | 100.00 |  | 100.00 |  | Financial transactions, product sales and Equity interests
CSN Ibéria Lda. |  | 100.00 |  | 100.00 |  | Financial transactions, product sales and Equity interests
Lusosider Projectos Siderúrgicos S.A. | 99.94 |  | 99.94 |  | Equity interests and product sales
Lusosider Aços Planos, S. A. | 99.99 |  | 99.99 |  | Steel and Equity interests
CSN Resources S.A. |  | 100.00 |  | 100.00 |  | Financial transactions and Equity interests
Companhia Brasileira de Latas | 100.00 |  | 100.00 |  | Sale of cans and containers in general and Equity interests
Companhia de Embalagens Metálicas MMSA | 99.67 |  | 99.67 |  | Production and sale of cans and related activities
Companhia de Embalagens Metálicas - MTM | 99.67 |  | 99.67 |  | Production and sale of cans and related activities
CSN Steel Holdings 1, S.L.U. | 100.00 |  | 100.00 |  | Financial transactions, product sales and Equity interests
CSN Productos Siderúrgicos S.L. | 100.00 |  | 100.00 |  | Financial transactions, product sales and Equity interests
Stalhwerk Thüringen GmbH | 100.00 |  | 100.00 |  | Production and sale of long steel and related activities
CSN Steel Sections UK Limited (*) | 100.00 |  | 100.00 |  | Sale of long steel
CSN Steel Sections Polska Sp.Z.o.o | 100.00 |  | 100.00 |  | Financial transactions, product sales and Equity interests
CSN Asia Limited |  | 100.00 |  | 100.00 |  | Commercial representation
Namisa International Minérios SLU | 87.52 |  | 87.52 |  | Financial transactions, product sales and Equity interests
CSN Mining GmbH |  | 87.52 |  | 87.52 |  | Financial transactions, product sales and Equity interests
CSN Mining Asia Limited |  | 87.52 |  | 87.52 |  | Commercial representation
Aceros México CSN |  | 100.00 |  | 100.00 |  | Commercial representation, sale of steel and related activity
Direct interest in joint operations: proportionate consolidation
Itá Energética S.A. |  | 48.75 |  | 48.75 |  | Electric power generation
Consórcio da Usina Hidrelétrica de Igarapava | 17.92 |  | 17.92 |  | Electric power consortium
Direct interest in joint ventures: equity method
MRS Logística S.A. |  | 18.64 |  | 18.64 |  | Railroad transportation
Aceros Del Orinoco S.A. |  | 31.82 |  | 31.82 |  | Dormant company
CBSI - Companhia Brasileira de Serviços de Infraestrutura | 50.00 |  | 50.00 |  | Equity interests and product sales and iron ore
Transnordestina Logística S.A. | 46.28 |  | 49.02 |  | Railroad logistics
Indirect interest in joint ventures: equity method
MRS Logística S.A. |  | 16.30 |  | 16.30 |  | Railroad transportation
Direct interest in associates: equity method
Arvedi Metalfer do Brasil S.A. | 20.00 |  | 20.00 |  | Metallurgy and Equity interests

(*) Dormant companies, therefore, they are presented in note 8.a., where information on companies accounted for under the equity method is disclosed;

· Exclusive funds

|  | Equity interests (%) |
Exclusive funds |  | 03/31/2017 |  | 12/31/2016 |  | Core business
Direct interest: full consolidation |  |  |  |  |  |
Diplic II - Private credit balanced mutual fund |  | 100.00 |  | 100.00 |  | Investment fund
Caixa Vértice - Private credit balanced mutual fund |  | 100.00 |  | 100.00 |  | Investment fund
VR1 - Private credit balanced mutual fund |  | 100.00 |  | 100.00 |  | Investment fund

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Quarterly Financial Information - March 31, 2017 – CIA SIDERURGICA NACIONAL

2.d) Restatement of account balances as of March 2016

The Company reclassified the cash flow hedge result for the first quarter of 2016 from financial income to other operating expenses in the amount of R$12,697 (in line with the classification used in 2017).

The Company also reclassified the result for March 2016 of subsidiary Cia. Metalic do Nordeste (“Metalic”) to the group of discontinued operations to allow a better comparability due to the sale of 100% of the shares to Can-Pack S.A. in November 2016.

The effects of the reclassifications are shown below:

|  |  |  |  |  | Consolidated |  |  |  |  |  | Parent Company
|  |  |  |  |  | 03/31/2016 |  |  |  |  |  | 03/31/2016
|  | As originally reported |  | Reclassifications |  | Restated |  | As originally reported |  | Reclassifications |  | Restated
Net revenue |  | 4,008,071 |  | (10,785) |  | 3,997,286 |  | 1,977,640 |  |  |  | 1,977,640
Cost of goods sold |  | (3,082,026) |  | 8,365 |  | (3,073,661) |  | (1,638,396) |  |  |  | (1,638,396)
Operating income (expenses) |  | (692,113) |  | (10,535) |  | (702,648) |  | (856,956) |  | (13,030) |  | (869,986)
Selling expenses |  | (450,421) |  | 1,031 |  | (449,390) |  | (168,633) |  |  |  | (168,633)
General and administrative expenses |  | (160,111) |  | 52 |  | (160,059) |  | (123,260) |  |  |  | (123,260)
Equity results |  | 44,979 |  | 645 |  | 45,624 |  | (465,361) |  | (333) |  | (465,694)
Other operating income (expenses), net |  | (126,560) |  | (12,263) |  | (138,823) |  | (99,702) |  | (12,697) |  | (112,399)
Profit/(loss) before financial result |  | 233,932 |  | (12,955) |  | 220,977 |  | (517,712) |  | (13,030) |  | (530,742)
Financial income (expenses), net |  | (896,939) |  | 12,340 |  | (884,599) |  | (267,878) |  | 12,697 |  | (255,181)
Loss before income tax and social contribution |  | (663,007) |  | (615) |  | (663,622) |  | (785,590) |  | (333) |  | (785,923)
Income tax and social contribution |  | (113,690) |  | 282 |  | (113,408) |  | 399 |  |  |  | 399
Profit (loss) from continued operations |  | (776,697) |  | (333) |  | (777,030) |  | (785,191) |  | (333) |  | (785,524)
Profit (loss) from discontinued operations |  |  |  | 333 |  | 333 |  |  |  | 333 |  | 333
Net income (loss) for the year |  | (776,697) |  |  |  | (776,697) |  | (785,191) |  |  |  | (785,191)
Attributable to: |  |  |  |  |  |  |  |  |  |  |  |
Participation of controlling interest |  | (785,191) |  |  |  | (785,191) |  | (785,191) |  |  |  | (785,191)
Participation of non-controlling interest |  | 8,494 |  |  |  | 8,494 |  |  |  |  |  |
|  | (776,697) |  |  |  | (776,697) |  | (785,191) |  |  |  | (785,191)

3. CASH AND CASH EQUIVALENTS

|  |  | Consolidated |  |  |  | Parent Company
| 03/31/2017 |  | 12/31/2016 |  | 03/31/2017 |  | 12/31/2016
Current |  |  |  |  |  |  |
Cash and cash equivalents |  |  |  |  |  |  |
Cash and banks | 247,359 |  | 502,480 |  | 29,032 |  | 30,308
Short-term investments |  |  |  |  |  |  |
In Brazil: |  |  |  |  |  |  |
Government securities | 16,539 |  | 17,929 |  | 15,129 |  | 17,178
Private securities | 607,856 |  | 1,390,707 |  | 256,802 |  | 1,216,461
| 624,395 |  | 1,408,636 |  | 271,931 |  | 1,233,639
Abroad: |  |  |  |  |  |  |
Time deposits | 3,444,042 |  | 2,960,046 |  | 660,327 |  | 202,799
Total short-term investments | 4,068,437 |  | 4,368,682 |  | 932,258 |  | 1,436,438
Cash and cash equivalents | 4,315,796 |  | 4,871,162 |  | 961,290 |  | 1,466,746

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CONVENIENCE TRANSLATION INTO ENGLISH FROM THE ORIGINAL PREVIOUSLY ISSUED IN PORTUGUESE | ## ## Version: 1 | ## ##
Quarterly Financial Information - March 31, 2017 – CIA SIDERURGICA NACIONAL

The funds available at the parent company and subsidiaries established in Brazil are basically invested in investment funds, considered exclusive, and their financial statements were consolidated into the Company’s statements. The funds include repurchase agreements backed by private and government securities, with fixed rate income and immediate liquidity.

Private securities are short-term investments in Bank Deposit Certificates (CDBs) with yields pegged to the Interbank Deposit Certificate (CDI) fluctuation, and government securities are basically repurchase agreements backed by National Treasury Notes. The funds are managed by BNY Mellon Serviços Financeiros DTVM S.A. and Caixa Econômica Federal (CEF) and their assets collateralize any losses on investments and transactions carried out. The investments in funds were consolidated.

A significant part of the funds is invested abroad in time deposits in banks considered by management as top rated banks and the returns are based on fixed interest rates.

4. SHORT-TERM INVESTMENTS

|  |  |  | Consolidated |  |  |  | Parent Company
|  | 03/31/2017 |  | 12/31/2016 |  | 03/31/2017 |  | 12/31/2016
CDB - Bank certificate of deposit (1) |  | 675,263 |  | 658,476 |  | 675,263 |  | 658,476
Government securities (2) |  | 59,425 |  | 101,915 |  | 56,297 |  | 99,957
|  | 734,688 |  | 760,391 |  | 731,560 |  | 758,433

1. Financial investment linked to Bank Certificate of Deposit to secure a letter of guarantee.

2. Investments in National Treasury Bills (LFT) managed by its exclusive funds, which secure futures contracts traded at B3 - Brasil, Bolsa, Balcão detailed in note 12(b), total R$25,784 (R$56,151 as of December 31, 2016) and LFT securing investments total R$33,639 (45,765 as of December 31, 2016).

5. TRADE RECEIVABLES

|  |  | Consolidated |  |  |  | Parent Company
| 03/31/2017 |  | 12/31/2016 |  | 03/31/2017 |  | 12/31/2016
Trade receivables |  |  |  |  |  |  |
Third parties |  |  |  |  |  |  |
Domestic market | 1,099,586 |  | 1,027,639 |  | 848,267 |  | 733,608
Foreign market | 765,686 |  | 919,936 |  | 122,636 |  | 67,652
| 1,865,272 |  | 1,947,575 |  | 970,903 |  | 801,260
Allowance for doubtful accounts | (166,930) |  | (172,782) |  | (118,666) |  | (124,351)
| 1,698,342 |  | 1,774,793 |  | 852,237 |  | 676,909
Related parties (note 17 a) | 151,186 |  | 129,837 |  | 1,093,516 |  | 1,034,098
| 1,849,528 |  | 1,904,630 |  | 1,945,753 |  | 1,711,007
Other receivables |  |  |  |  |  |  |
Dividends receivable (note 17 a) (*) | 37,679 |  | 37,679 |  | 863,723 |  | 873,473
Advances to employees | 25,489 |  | 34,607 |  | 15,040 |  | 21,953
Other receivables | 18,385 |  | 20,300 |  | 16,852 |  | 18,420
| 81,553 |  | 92,586 |  | 895,615 |  | 913,846
| 1,931,081 |  | 1,997,216 |  | 2,841,368 |  | 2,624,853

(*) Refers mainly to dividends receivable from CSN Mineração S.A.amounting to R$ 831,865.

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Quarterly Financial Information - March 31, 2017 – CIA SIDERURGICA NACIONAL

In accordance with the internal sales policy the Group carries out transactions of assignment of receivables without co-obligation in which, after assigning the customer’s trade notes/bills and receiving the amounts from each transaction closed, CSN settles the receivables and becomes entirely free from the credit risk of the transaction. This transaction totals R$380,146 as of March 31, 2017 (R$263,644 as of December 31, 2016), less the trade receivables.

The gross balance of receivables from third parties is comprised as follows:

|  |  |  | Consolidated |  |  |  | Parent Company
|  | 03/31/2017 |  | 12/31/2016 |  | 03/31/2017 |  | 12/31/2016
Current |  | 1,238,103 |  | 1,381,255 |  | 486,809 |  | 404,259
Past-due up to 180 days |  | 250,508 |  | 245,012 |  | 166,531 |  | 139,036
Past-due over 180 days |  | 376,661 |  | 321,308 |  | 317,563 |  | 257,965
|  | 1,865,272 |  | 1,947,575 |  | 970,903 |  | 801,260

The movements in the Company’s allowance for doubtful debts are as follows:

|  |  |  | Consolidated |  |  |  | Parent Company
|  | 03/31/2017 |  | 12/31/2016 |  | 03/31/2017 |  | 12/31/2016
Opening balance |  | (172,782) |  | (151,733) |  | (124,351) |  | (112,502)
Estimated losses |  | (6,570) |  | (25,474) |  | (5,475) |  | (16,347)
Recovery of receivables |  | 12,422 |  | 4,425 |  | 11,160 |  | 4,498
Closing balance |  | (166,930) |  | (172,782) |  | (118,666) |  | (124,351)

6. INVENTORIES

|  |  | Consolidated |  |  |  | Parent Company
| 03/31/2017 |  | 12/31/2016 |  | 03/31/2017 |  | 12/31/2016
Finished goods | 1,268,893 |  | 1,183,619 |  | 872,283 |  | 784,130
Work in progress | 821,555 |  | 674,860 |  | 673,778 |  | 557,598
Raw materials | 1,136,718 |  | 1,124,158 |  | 824,621 |  | 767,020
Spare parts | 810,854 |  | 824,478 |  | 410,587 |  | 412,206
Iron ore | 335,422 |  | 255,029 |  | 26,010 |  | 18,899
Advances to suppliers | 2,604 |  | 3,168 |  | 1,211 |  | 1,689
(-) Provision for losses | (116,082) |  | (101,176) |  | (37,466) |  | (37,312)
| 4,259,964 |  | 3,964,136 |  | 2,771,024 |  | 2,504,230

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Quarterly Financial Information - March 31, 2017 – CIA SIDERURGICA NACIONAL

The movements in the provision for inventory losses are as follows:

|  |  |  | Consolidated |  |  |  | Parent Company
|  | 03/31/2017 |  | 12/31/2016 |  | 03/31/2017 |  | 12/31/2016
Opening balance |  | (101,176) |  | (111,427) |  | (37,312) |  | (40,462)
Reversal / (losses) for slow-moving and obsolescence |  | (14,906) |  | 10,251 |  | (154) |  | 3,150
Closing balance |  | (116,082) |  | (101,176) |  | (37,466) |  | (37,312)

7. OTHER CURRENT AND NONCURRENT ASSETS

The group of other current and noncurrent assets is comprised as follows:

|  |  |  |  | Consolidated |  |  |  |  |  |  |  | Parent Company
| Current | Non-current | Current |  | Non-current
| 03/31/2017 |  | 12/31/2016 |  | 03/31/2017 |  | 12/31/2016 |  | 03/31/2017 |  | 12/31/2016 |  | 03/31/2017 |  | 12/31/2016
Judicial deposits (note 15) |  |  |  |  | 346,572 |  | 331,258 |  |  |  |  |  | 283,504 |  | 273,038
Credits with the PGFN (1) |  |  |  |  | 46,774 |  | 46,774 |  |  |  |  |  | 46,774 |  | 46,774
Recoverable taxes (2) | 779,315 |  | 780,715 |  | 391,124 |  | 386,872 |  | 502,671 |  | 471,955 |  | 192,868 |  | 178,773
Prepaid expenses | 71,267 |  | 27,011 |  | 19,572 |  | 20,421 |  | 41,615 |  | 2,785 |  |  |  |
Actuarial asset - related party (note 17 a) |  |  |  |  | 112,970 |  | 119,854 |  |  |  |  |  | 103,859 |  | 109,106
Derivative financial instruments (Note 12 I) |  |  | 2,298 |  |  |  |  |  |  |  |  |  |  |  |
Securities held for trading (note 12 I) | 3,586 |  | 2,966 |  |  |  |  |  | 3,420 |  | 2,818 |  |  |  |
Iron ore inventory (3) |  |  |  |  | 144,499 |  | 144,499 |  |  |  |  |  |  |  |
Northeast Investment Fund – FINOR |  |  |  |  | 26,598 |  | 26,598 |  |  |  |  |  | 26,598 |  | 26,598
Other receivables (note 12 I) |  |  |  |  | 14,327 |  | 15,291 |  |  |  |  |  | 1,883 |  | 2,847
Loans with related parties (note 17 a e 12 I) |  |  |  |  | 501,766 |  | 479,960 |  | 27,993 |  | 25,602 |  | 394,085 |  | 375,716
Other receivables from related parties (note 17 a) | 4,756 |  | 5,768 |  | 31,645 |  | 32,020 |  | 21,060 |  | 132,384 |  | 308,605 |  | 311,414
Others | 48,812 |  | 33,255 |  | 67,305 |  | 72,273 |  |  |  |  |  | 66,816 |  | 71,696
| 907,736 |  | 852,013 |  | 1,703,152 |  | 1,675,820 |  | 596,759 |  | 635,544 |  | 1,424,992 |  | 1,395,962

1. Refers to the excess of judicial deposit originated by the 2009 REFIS program (Tax Debt Refinancing Program). After the settlement of the program amount, the balance of one of the lawsuits was withdrawn by the Company with a court authorization.

2. Refers mainly to taxes on revenue (PIS/COFINS) and state VAT (ICMS) recoverable and income tax and social contribution for offset.

3. Long-term iron ore inventories that will be used after the implementation of the processing plant, generating as final product the pellet feed, expected to start operating in the second half of 2018.

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Quarterly Financial Information - March 31, 2017 – CIA SIDERURGICA NACIONAL

8. INVESTMENTS

The information on the activities of subsidiaries, joint ventures, joint operations, associates and other investments did not have any changes in relation to that disclosed in the Company's financial statements as of December 31, 2016 and, accordingly, the Company decided not to repeat it in the condensed interim financial information as of March 31, 2017.

8.a) Direct interests in subsidiaries, joint ventures, joint operations, associates and other investments

|  |  |  |  |  |  |  |  |  |  |  |  |  | 03/31/2017 |  |  |  |  |  |  |  | 12/31/2016 |  | 03/31/2016
Companies |  | Number of shares held by CSN ( in units ) |  | % Direct equity interest |  | Participation in |  | % Direct equity interest |  | Participation in |  | Reclassification
|  |  | Assets |  | Liabilities |  | Shareholders’ equity |  | Profit / (loss) for the period |  |  | Assets |  | Liabilities |  | Shareholders’ equity |  | Profit / (loss) for the period
| Common |  | Preferred |  |  |  |  |  |  |  |  |  |
Investments under the equity method |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Subsidiaries |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
CSN Islands VII Corp. |  | 20,001,000 |  |  |  | 100.00 |  | 6,037,040 |  | 5,895,716 |  | 141,324 |  | (66,443) |  | 100.00 |  | 6,436,140 |  | 6,228,374 |  | 207,766 |  | (260,473)
CSN Islands IX Corp. | (1) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (209)
CSN Islands XI Corp. |  | 50,000 |  |  |  | 100.00 |  | 2,410,476 |  | 2,405,491 |  | 4,985 |  | (15,712) |  | 100.00 |  | 2,530,563 |  | 2,509,866 |  | 20,697 |  | 51,002
CSN Islands XII Corp. |  | 1,540 |  |  |  | 100.00 |  | 2,155,470 |  | 3,172,715 |  | (1,017,245) |  | 2,054 |  | 100.00 |  | 2,244,240 |  | 3,263,539 |  | (1,019,299) |  | 68,608
CSN Minerals S.L.U. |  | 3,500 |  |  |  | 100.00 |  | 3,643,478 |  | 9,583 |  | 3,633,895 |  | (41,743) |  | 100.00 |  | 3,833,669 |  | 9,840 |  | 3,823,829 |  | (278,036)
CSN Export Europe, S.L.U. |  | 3,500 |  |  |  | 100.00 |  | 651,454 |  | 30,093 |  | 621,361 |  | (14,924) |  | 100.00 |  | 666,362 |  | 30,077 |  | 636,285 |  | (111,855)
CSN Metals S.L.U. |  | 16,504,020 |  |  |  | 100.00 |  | 622,276 |  | 20,936 |  | 601,340 |  | (14,399) |  | 100.00 |  | 636,408 |  | 20,668 |  | 615,740 |  | (103,895)
CSN Americas S.L.U. |  | 3,500 |  |  |  | 100.00 |  | 1,460,831 |  | 4,227 |  | 1,456,604 |  | 20,795 |  | 100.00 |  | 1,492,678 |  | 4,445 |  | 1,488,233 |  | (118,682)
CSN Steel S.L.U. |  | 22,042,688 |  |  |  | 100.00 |  | 2,291,829 |  | 1,482,045 |  | 809,784 |  | 49,190 |  | 100.00 |  | 2,537,179 |  | 1,585,977 |  | 951,202 |  | 175,046
Sepetiba Tecon S.A. |  | 254,015,052 |  |  |  | 99.99 |  | 445,916 |  | 163,774 |  | 282,142 |  | 6,100 |  | 99.99 |  | 441,214 |  | 165,172 |  | 276,042 |  | 4,149
Minérios Nacional S.A. |  | 66,393,587 |  |  |  | 99.99 |  | 74,277 |  | 23,430 |  | 50,847 |  | (3,049) |  | 99.99 |  | 74,738 |  | 28,038 |  | 46,700 |  | (4,876)
Fair Value - Minérios Nacional |  |  |  |  |  |  |  |  |  |  |  | 2,123,507 |  |  |  |  |  |  |  |  |  | 2,123,507 |  |
Estanho de Rondônia S.A. |  | 121,861,697 |  |  |  | 99.99 |  | 32,123 |  | 23,688 |  | 8,435 |  | (2,829) |  | 99.99 |  | 32,816 |  | 21,552 |  | 11,264 |  | (2,975)
Companhia Metalúrgica Prada |  | 313,651,399 |  |  |  | 99.99 |  | 755,242 |  | 607,554 |  | 147,688 |  | (1,140) |  | 99.99 |  | 769,337 |  | 620,509 |  | 148,828 |  | (23,684)
CSN Mineração S.A. |  | 158,419,480 |  |  |  | 87.52 |  | 13,351,661 |  | 4,993,038 |  | 8,358,623 |  | 261,932 |  | 87.52 |  | 13,039,767 |  | 4,943,090 |  | 8,096,677 |  | 65,090
CSN Energia S.A. |  | 43,150 |  |  |  | 100.00 |  | 127,254 |  | 48,996 |  | 78,258 |  | 8,621 |  | 100.00 |  | 109,290 |  | 39,654 |  | 69,636 |  | 6,241
FTL - Ferrovia Transnordestina Logística S.A. |  | 395,302,149 |  |  |  | 90.78 |  | 437,122 |  | 128,632 |  | 308,490 |  | (49,394) |  | 90.78 |  | 484,218 |  | 126,334 |  | 357,884 |  | (762)
Companhia Florestal do Brasil |  | 38,364,462 |  |  |  | 99.99 |  | 35,249 |  | 3,682 |  | 31,567 |  | (1,108) |  | 99.99 |  | 35,206 |  | 5,179 |  | 30,027 |  | (479)
Nordeste Logística |  | 99,999 |  |  |  | 99.99 |  | 81 |  | 55 |  | 26 |  |  |  | 99.99 |  | 81 |  | 55 |  | 26 |  |
CGPAR - Construção Pesada S.A. |  | 100,000 |  |  |  | 100 |  | 36,827 |  | 23,331 |  | 13,496 |  | 165 |  | 100 |  | 40,889 |  | 27,558 |  | 13,331 |  |
Fair Value Fixed Assets - CGPAR |  |  |  |  |  |  |  |  |  |  |  | 50,008 |  | (3,940) |  |  |  |  |  |  |  | 53,949 |  |
|  |  |  |  |  |  |  | 34,568,606 |  | 19,036,986 |  | 17,705,135 |  | 134,176 |  |  |  | 35,404,795 |  | 19,629,927 |  | 17,952,324 |  | (535,790)
Joint-venture and Joint-operation |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Itá Energética S.A. |  | 253,606,846 |  |  |  | 48.75 |  | 273,887 |  | 16,950 |  | 256,937 |  | 2,283 |  | 48.75 |  | 282,383 |  | 27,728 |  | 254,655 |  | 2,289
MRS Logística S.A. |  | 26,611,282 |  | 2,673,312 |  | 18.64 |  | 1,405,062 |  | 770,144 |  | 634,918 |  | 19,278 |  | 18.64 |  | 1,411,526 |  | 795,903 |  | 615,623 |  | 30,613
CBSI - Companhia Brasileira de Serviços de Infraestrutura |  | 1,876,146 |  |  |  | 50.00 |  | 14,166 |  | 11,735 |  | 2,431 |  | 375 |  | 50.00 |  | 13,574 |  | 11,517 |  | 2,057 |  | 1,416
CGPAR - Construção Pesada S.A. | (2) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 1,514
Transnordestina Logística S.A. |  | 24,168,304 |  |  |  | 46.28 |  | 3,688,926 |  | 2,469,626 |  | 1,219,300 |  | (4,264) |  | 49.02 |  | 3,786,556 |  | 2,566,315 |  | 1,220,241 |  | (6,987)
Fair Value alocated to TLSA due to control loss |  |  |  |  |  |  |  |  |  |  |  | 271,116 |  |  |  |  |  |  |  |  |  | 271,116 |  |
|  |  |  |  |  |  |  | 5,382,041 |  | 3,268,455 |  | 2,384,702 |  | 17,672 |  |  |  | 5,494,039 |  | 3,401,463 |  | 2,363,692 |  | 28,845
Associates |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Arvedi Metalfer do Brasil |  | 27,239,971 |  |  |  | 20.00 |  | 52,802 |  | 48,063 |  | 4,739 |  | 447 |  | 20.00 |  | 53,101 |  | 48,258 |  | 4,843 |  |
|  |  |  |  |  |  |  | 52,802 |  | 48,063 |  | 4,739 |  | 447 |  |  |  | 53,101 |  | 48,258 |  | 4,843 |  |
Associates |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Usiminas |  |  |  |  |  |  |  |  |  |  |  | 1,405,378 |  |  |  |  |  |  |  |  |  | 1,353,664 |  |
Panatlântica |  |  |  |  |  |  |  |  |  |  |  | 22,188 |  |  |  |  |  |  |  |  |  | 20,604 |  |
|  |  |  |  |  |  |  |  |  |  |  | 1,427,566 |  |  |  |  |  |  |  |  |  | 1,374,268 |  |
Other investments |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Profits on subsidiaries' inventories |  |  |  |  |  |  |  |  |  |  |  | (81,854) |  | (7,396) |  |  |  |  |  |  |  | (74,459) |  | 42,617
Others | (3) |  |  |  |  |  |  |  |  |  |  | 63,539 |  | (551) |  |  |  |  |  |  |  | 63,541 |  | (1,366)
|  |  |  |  |  |  |  |  |  |  |  | (18,315) |  | (7,947) |  |  |  |  |  |  |  | (10,918) |  | 41,251
Total investments |  |  |  |  |  |  |  |  |  |  |  | 21,503,827 |  | 144,348 |  |  |  |  |  |  |  | 21,684,209 |  | (465,694)
Classification of investments in the balance sheet |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Investments in assets |  |  |  |  |  |  |  |  |  |  |  | 22,521,072 |  |  |  |  |  |  |  |  |  | 22,703,508 |  |
Investments with equity deficit |  |  |  |  |  |  |  |  |  |  |  | (1,017,245) |  |  |  |  |  |  |  |  |  | (1,019,299) |  |
|  |  |  |  |  |  |  |  |  |  |  | 21,503,827 |  |  |  |  |  |  |  |  |  | 21,684,209 |  |

(1) Company liquidated in 2016;

(2) Acquisition of control in 2016.

(3) Refers mainly to the goodwill of the subsidiary Cia Metalúrgica Prada amounting to R$63,509.

The number of shares, the balances of assets, liabilities and shareholders’ equity, and the amounts of profit (loss) for the period refer to the interests held by CSN in those companies.

8.b) Movement in investments in subsidiaries, joint ventures, joint operations, associates and other investments

|  |  | Consolidated |  |  |  | Parent Company
| 03/31/2017 |  | 12/31/2016 |  | 03/31/2017 |  | 12/31/2016
Opening balance | 4,568,451 |  | 3,998,239 |  | 21,684,209 |  | 24,422,283
Classified in assets - Investiments | 4,568,451 |  | 3,998,239 |  | 22,703,508 |  | 25,517,369
Classified in liabilities - Provision for investments with equity deficit |  |  |  |  | (1,019,299) |  | (1,095,086)
Opening balance | 4,568,451 |  | 3,998,239 |  | 21,684,209 |  | 24,422,283
Capital increase/acquisition of shares | 509 |  | 190,651 |  | 10,353 |  | 242,854
Dividends (1) |  |  | (36,765) |  | (353,429) |  | (2,469,827)
Comprehensive income (2) | 56,146 |  | 713,442 |  | 18,346 |  | 314,230
Equity pickup (3) | 34,554 |  | 108,031 |  | 144,348 |  | (370,343)
Reclassification of Metallic's investment on September 30, 2016 to held for sale |  |  |  |  |  |  | (123,290)
Reclassification of Metallic's result for discontinued operations |  |  |  |  |  |  | (6,786)
Acquisition of 50% interest in CGPAR |  |  |  |  |  |  | 8,608
Fair value of fixed assets - control acquisition - CGPAR |  |  |  |  |  | 57,889
Amortization of fair value - Investment in MRS | (2,937) |  | (11,746) |  |  |  |
Amortization of fair value - Investment in CGPAR | (3,940) |  | (3,940) |  |  |  |
Impairment of the Fair Value of Transnordestina |  |  | (387,989) |  |  |  | (387,989)
Others |  |  | (1,472) |  |  |  | (3,420)
Closing balance | 4,652,783 |  | 4,568,451 |  | 21,503,827 |  | 21,684,209
Classified in assets - Investiments | 4,652,783 |  | 4,568,451 |  | 22,521,072 |  | 22,703,508
Classified in liabilities - Provision for investment with equity deficit |  |  |  |  | (1,017,245) |  | (1,019,299)
Closing balance | 4,652,783 |  | 4,568,451 |  | 21,503,827 |  | 21,684,209

1. In 2017, refers to the allocation of dividends of subsidiaries CSN Minerals, CSN Steel and, CSN America..

2. Refers to the mark-to-market of investments classified as available for sale and translation to reporting currency of the foreign investment whose functional currency is not the Real, actuarial gain/loss and gain/loss on investment hedge from investments accounted for under the equity method.

3. The reconciliation of the equity in results of joint ventures and associates and the amount recorded in the statement of income are presented below and derive from the elimination of results of CSN's transactions with these companies:

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|  |  | Consolidated
| 03/31/2017 |  | 03/31/2016 Adjusted
Equity in results of affiliated companies |  |  |
MRS Logística S.A. | 38,547 |  | 61,210
CBSI - Companhia Brasileira de Serviços de Infraestrutura | 375 |  | 1,416
Transnordestina | (4,264) |  | (6,987)
Arvedi Metalfer do Brasil | 447 |  |
Others | (551) |  | (1,775)
| 34,554 |  | 53,864
Eliminations |  |  |
To cost of sales | (9,958) |  | (13,462)
To taxes | 3,386 |  | 4,577
Others |  |  |
Amortization of fair value - Investment in MRS | (2,937) |  |
Amortization of fair value - Investment in CGPAR | (3,940) |  |
Others |  |  | 645
Equity in results | 21,105 |  | 45,624

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8.c) Investments in joint ventures and joint operations

The balances of the balance sheet and statement of income of joint ventures are presented below and refer to 100% of the companies’ results:

|  |  |  |  |  | 03/31/2017 |  |  |  |  |  |  |  | 12/31/2016
|  | Joint-Venture |  | Joint-Operation |  | Joint-Venture |  | Joint-Operation
Equity interest (%) |  | MRS Logística |  | CBSI |  | Transnordestina Logística |  | Itá Energética |  | MRS Logística |  | CBSI |  | Transnordestina Logística |  | Itá Energética
| 34.94% |  | 50.00% |  | 46.30% |  | 48.75% |  | 34.94% |  | 50.00% |  | 49.02% |  | 48.75%
Balance sheet |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Current assets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cash and cash equivalents |  | 251,856 |  | 2,728 |  | 93,993 |  | 9,340 |  | 345,164 |  | 2,925 |  | 1,899 |  | 17,689
Advance to suppliers |  | 7,963 |  | 2,070 |  |  |  | 19 |  | 7,452 |  | 951 |  |  |  | 99
Other current assets |  | 424,855 |  | 20,041 |  | 55,051 |  | 15,886 |  | 406,170 |  | 19,603 |  | 54,652 |  | 16,054
Total current assets |  | 684,674 |  | 24,839 |  | 149,044 |  | 25,245 |  | 758,786 |  | 23,479 |  | 56,551 |  | 33,842
Non-current assets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Other non-current assets |  | 694,662 |  | 356 |  | 259,793 |  | 28,797 |  | 598,577 |  | 234 |  | 261,292 |  | 29,219
Investments, PP&E and intangible assets |  | 6,158,794 |  | 3,136 |  | 7,558,623 |  | 507,778 |  | 6,215,442 |  | 3,434 |  | 7,407,189 |  | 516,186
Total non-current assets |  | 6,853,456 |  | 3,492 |  | 7,818,416 |  | 536,575 |  | 6,814,019 |  | 3,668 |  | 7,668,481 |  | 545,405
Total Assets |  | 7,538,130 |  | 28,331 |  | 7,967,460 |  | 561,820 |  | 7,572,805 |  | 27,147 |  | 7,725,032 |  | 579,247
Current liabilities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Borrowings and financing |  | 684,780 |  |  |  | 54,442 |  |  |  | 653,491 |  |  |  | 76,441 |  |
Other current liabilities |  | 821,388 |  | 23,469 |  | 130,959 |  | 31,647 |  | 740,319 |  | 23,034 |  | 134,747 |  | 53,858
Total current liabilities |  | 1,506,168 |  | 23,469 |  | 185,401 |  | 31,647 |  | 1,393,810 |  | 23,034 |  | 211,188 |  | 53,858
Non-current liabilities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Borrowings and financing |  | 2,033,095 |  |  |  | 5,148,575 |  |  |  | 2,176,357 |  |  |  | 5,024,404 |  |
Other non-current liabilities |  | 592,548 |  |  |  |  |  | 3,123 |  | 699,830 |  |  |  |  |  | 3,020
otal non-current liabilities |  | 2,625,643 |  |  |  | 5,148,575 |  | 3,123 |  | 2,876,187 |  |  |  | 5,024,404 |  | 3,020
Shareholders’ equity |  | 3,406,319 |  | 4,862 |  | 2,633,484 |  | 527,050 |  | 3,302,808 |  | 4,113 |  | 2,489,440 |  | 522,369
Total liabilities and shareholders’ equity |  | 7,538,130 |  | 28,331 |  | 7,967,460 |  | 561,820 |  | 7,572,805 |  | 27,147 |  | 7,725,032 |  | 579,247

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|  |  |  |  |  |  |  | 01/01/2017 a 03/31/2017 |  |  |  |  |  |  |  |  |  | 01/01/2016 a 03/31/2016
|  | Joint-Venture |  | Joint-Operation |  |  |  | Joint-Operation
Equity interest (%) |  | MRS Logística |  | CBSI |  | Transnordestina Logística |  | Itá Energética |  | MRS Logística |  | CBSI |  | Transnordestina Logística |  | Itá Energética |  | CGPAR
| 34.94% |  | 50.00% |  | 46.30% |  | 48.75% |  | 34.94% |  | 50.00% |  | 56.92% |  | 48.75% |  | 50.00%
Statements of Income |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net revenue |  | 798,330 |  | 31,459 |  |  |  | 40,877 |  | 749,218 |  | 33,017 |  |  |  | 42,466 |  | 32,013
Cost of sales and services |  | (560,503) |  | (28,041) |  |  |  | (19,467) |  | (514,726) |  | (27,601) |  |  |  | (23,016) |  | (23,245)
Gross profit |  | 237,827 |  | 3,418 |  |  |  | 21,410 |  | 234,492 |  | 5,416 |  |  |  | 19,450 |  | 8,768
Operating income (expenses) |  | (23,843) |  | (1,975) |  | (7,028) |  | (14,309) |  | 83,055 |  | (2,250) |  | (7,656) |  | (12,895) |  | (3,696)
Financial income (expenses), net |  | (54,701) |  | (376) |  | (2,181) |  | (16) |  | (65,690) |  | (334) |  | (4,620) |  | 551 |  | (281)
Income before income tax and social contribution |  | 159,283 |  | 1,067 |  | (9,209) |  | 7,085 |  | 251,857 |  | 2,832 |  | (12,276) |  | 7,106 |  | 4,791
Current and deferred income tax and social contribution |  | (55,855) |  | (318) |  |  |  | (2,403) |  | (87,621) |  |  |  |  |  | (2,410) |  | (1,764)
Profit / (loss) for the period |  | 103,428 |  | 749 |  | (9,209) |  | 4,682 |  | 164,236 |  | 2,832 |  | (12,276) |  | 4,696 |  | 3,027

· TRANSNORDESTINA LOGÍSTICA S.A. (“TLSA”)

TLSA is primarily engaged in the public service operation and development of a railroad network in the Northeast of Brazil, comprising the rail links Velha-Salgueiro, Salgueiro-Trindade, Trindade-Eliseu Martins, Salgueiro- Porto de Suape, and Missão Velha-Porto de Pecém (“Railway System II”).

It is in pre-operational phase and will continue as such until the completion of Railway System II. The approved schedule, which estimated the completion of the work by January 2017, is currently under review and discussion with the responsible agencies; however, Management believes that new deadlines for project completion will not have material adverse effects on the expected return on the investment. After analyzing this matter, Management considered as appropriate the use of the accounting basis of operational continuity (going concern) of the project in the preparation of its financial statements.

During 2017, the other shareholders of TLSA subscribed 5,708,087 shares in the amount of R$723,858, diluting CSN’s interest in TLSA’s capital to 46.30%. As a result of the transactions described above and the change in the shareholders’ interest in TLSA’s capital in 2017, the Company recognized a gain of R$2,814 in shareholders’ equity under other comprehensive income.

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Even though as of December 31, 2016 the Company reports negative net working capital of R$ 182,339, Management counts on the funds from its shareholders and third parties for completion of the work, which are expected to be available based on agreements previously entered into and recent discussions between the involved parties. After analyzing this matter, Management considered as appropriate the use of the accounting basis of operational continuity (going concern) of the project in the preparation of the financial statements for the year ended December 31, 2016.

Accordingly, TLSA conducted an impairment test of its long-lived assets using the discounted cash flow method. In order to perform the test, TLSA adopted the following main assumptions:

Measurement of recoverable amount:

Cash flow projection | Until 2057
Gross margin | Estimated based on market study to capture cargo and operating costs according to market trend studies
Cost estimate | Costs based on study and market trends
Growth rate in perpetuity | Growth rate was not considered because the model projection is until the end of the concession.
Discount rate | Ranges from 4.25% to 7.90% in real terms.

In addition, CSN, as an investor, conducted an impairment test of its interest in TLSA, based on TLSA’s dividend payment capacity, a methodology known as Dividend Discount Model, or DDM, to remunerate the capital invested by its shareholders. In order to conduct this test, some factors were taken into account, such as:

· The dividend flow was obtained from TLSA nominal cash flow;

· The dividend flow was calculated considering the annual interest percentages, considering the dilutions of CSN’s interest arising from the repayment of debts;

· This dividend flow was discounted to present value using the cost of equity (Ke) included in TLSA’s WACC rate; and

· This Ke obtained was that calculated in TLSA’s “rolling WACC”.

Another important aspect that was considered in the impairment analysis of CSN’s investment in TLSA was the need to apply an additional risk percentage to the discount rate in addition to that already used to determine TLSA”s discounted cash flow. Due to the sharing of investor risks and the fact that the asset that is being tested represents the cash-generating unit, which in turn equals the legal entity, the risk determined by CSN’s management is the same as that applied by TLSA in the evaluation of the investment, and therefore an additional risk factor to the model would not apply.

As a result of the test performed, the Company recognized in 2016 a loss on the surplus value of TLSA’s investment in the amount of R$ 387,989 recorded in other operating expenses and R $ 131,916 in deferred taxes.

9. PROPERTY, PLANT AND EQUIPMENT

The information on property, plant and equipment has not changed significantly in relation to that disclosed in the Company's financial statements as of December 31, 2016.

|  |  |  |  |  |  |  |  |  |  |  |  | Consolidated
| Land |  | Buildings and Infrastructure |  | Machinery, equipment and facilities |  | Furniture and fixtures |  | Construction in progress |  | Other (*) |  | Total
Balance at December 31, 2016 | 264,629 |  | 2,815,679 |  | 12,369,630 |  | 33,163 |  | 2,260,864 |  | 391,914 |  | 18,135,879
Cost | 264,629 |  | 3,637,903 |  | 20,712,371 |  | 173,821 |  | 2,260,864 |  | 676,529 |  | 27,726,117
Accumulated depreciation |  |  | (822,224) |  | (8,342,741) |  | (140,658) |  |  |  | (284,615) |  | (9,590,238)
Balance at December 31, 2016 | 264,629 |  | 2,815,679 |  | 12,369,630 |  | 33,163 |  | 2,260,864 |  | 391,914 |  | 18,135,879
Effect of foreign exchange differences | (805) |  | (2,577) |  | (11,330) |  | (57) |  | (351) |  | (378) |  | (15,498)
Acquisitions |  |  |  |  | 10,800 |  | 180 |  | 176,926 |  | 400 |  | 188,306
Capitalized interest (notes 23 and 27) |  |  |  |  |  |  |  |  | 26,533 |  |  |  | 26,533
Write - offs |  |  | (953) |  | (6,476) |  | (37) |  | (2,281) |  | 7,243 |  | (2,504)
Depreciation |  |  | (47,317) |  | (326,371) |  | (1,401) |  |  |  | (11,246) |  | (386,335)
Transfers to other asset categories |  |  | 62,661 |  | 229,623 |  | 1,330 |  | (245,687) |  | (47,927) |  |
Transfers to intangible assets |  |  |  |  |  |  |  |  | (22,584) |  | (3,595) |  | (26,179)
Others |  |  |  |  | (300) |  |  |  | 1,170 |  | (1) |  | 869
Balance at March 31, 2017 | 263,824 |  | 2,827,493 |  | 12,265,576 |  | 33,178 |  | 2,194,590 |  | 336,410 |  | 17,921,071
Cost | 263,824 |  | 3,697,784 |  | 20,941,899 |  | 174,855 |  | 2,194,590 |  | 552,072 |  | 27,825,024
Accumulated depreciation |  |  | (870,291) |  | (8,676,323) |  | (141,677) |  |  |  | (215,662) |  | (9,903,953)
Balance at March 31, 2017 | 263,824 |  | 2,827,493 |  | 12,265,576 |  | 33,178 |  | 2,194,590 |  | 336,410 |  | 17,921,071

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|  |  |  |  |  |  |  |  |  |  |  | Parent Company
|  | Land |  | Buildings and Infrastructure |  | Machinery, equipment and facilities |  | Furniture and fixtures |  | Construction in progress |  | Other (*) |  | Total
Balance at December 31, 2016 |  | 83,350 |  | 1,093,806 |  | 7,447,653 |  | 15,014 |  | 934,587 |  | 5,716 |  | 9,580,126
Cost |  | 83,350 |  | 1,275,784 |  | 12,567,114 |  | 114,141 |  | 934,587 |  | 116,987 |  | 15,091,963
Accumulated depreciation |  |  |  | (181,978) |  | (5,119,461) |  | (99,127) |  |  |  | (111,271) |  | (5,511,837)
Balance at December 31, 2016 |  | 83,350 |  | 1,093,806 |  | 7,447,653 |  | 15,014 |  | 934,587 |  | 5,716 |  | 9,580,126
Acquisitions |  |  |  |  |  | 5,370 |  | 33 |  | 99,731 |  | 238 |  | 105,372
Capitalized interest (notes 23 and 27) |  |  |  |  |  |  |  |  |  | 6,534 |  |  |  | 6,534
Write - offs |  |  |  | (953) |  | (2,123) |  | (34) |  | (2,281) |  | 2,717 |  | (2,674)
Depreciation |  |  |  | (7,939) |  | (156,359) |  | (674) |  |  |  | (1,530) |  | (166,502)
Transfers to other asset categories |  |  |  | (2,477) |  | 179,425 |  | 596 |  | (181,328) |  | 3,784 |  |
Transfers to intangible assets |  |  |  |  |  |  |  |  |  | (22,584) |  | (3,595) |  | (26,179)
Others |  |  |  |  |  | (8) |  |  |  | 1,410 |  |  |  | 1,402
Balance at March 31, 2017 |  | 83,350 |  | 1,082,437 |  | 7,473,958 |  | 14,935 |  | 836,069 |  | 7,330 |  | 9,498,079
Cost |  | 83,350 |  | 1,271,905 |  | 12,745,765 |  | 114,651 |  | 836,069 |  | 117,047 |  | 15,168,787
Accumulated depreciation |  |  |  | (189,468) |  | (5,271,807) |  | (99,716) |  |  |  | (109,717) |  | (5,670,708)
Balance at March 30, 2017 |  | 83,350 |  | 1,082,437 |  | 7,473,958 |  | 14,935 |  | 836,069 |  | 7,330 |  | 9,498,079

(*) Refer basically to railway assets such as courtyards, tracks and leasehold improvements, vehicles, hardware, mines, ore deposits, and spare part inventories.

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The assumptions used for the impairment test in December 2016 are still effective and there is not factor that justifies the recognition of impairment in the quarter.

The breakdown of the projects comprising construction in progress is as follows:

|  |  |  |  |  |  |  |  |  | Consolidado
|  | Project description |  | Start date |  | Completion Date |  | 03/31/2017 |  | 12/31/2016
Logistics |  |  |  |  |  |  |  |  |  |
|  | Current investments for maintenance of current operations. |  |  |  |  |  | 102,629 |  | 103,284
|  |  |  |  |  |  |  | 102,629 |  | 103,284
Mining |  |  |  |  |  |  |  |  |  |
|  | Expansion of Casa de Pedra Mine capacity production. |  | 2007 |  | 2018 | (1) | 712,057 |  | 689,160
|  | Expansion of TECAR export capacity. |  | 2009 |  | 2020 | (2) | 258,602 |  | 253,545
|  | Current investments for maintenance of current operations. |  |  |  |  |  | 269,047 |  | 261,056
|  |  |  |  |  |  |  | 1,239,706 |  | 1,203,761
Steel |  |  |  |  |  |  |  |  |  |
|  | Supply of 16 torpedo’s cars for operation in the steel industry. |  | 2008 |  | 2019 |  | 93,483 |  | 91,779
|  | Current investments for maintenance of current operations. |  |  |  |  | (3) | 196,963 |  | 307,448
|  |  |  |  |  |  |  | 290,446 |  | 399,227
Cement |  |  |  |  |  |  |  |  |  |
|  | Construction of cement plants. |  | 2011 |  | 2020 | (4) | 532,580 |  | 529,631
|  | Current investments for maintenance of current operations. |  |  |  |  |  | 29,229 |  | 24,961
|  |  |  |  |  |  |  | 561,809 |  | 554,592
Construction in progress |  |  |  |  |  | 2,194,590 |  | 2,260,864

(1) Estimated completion date of the Central Plant Step 1;

(2) Estimated completion date of phase 60 Mtpa;

(3) Refers substantially to renovation of coke ovens batteries and reuse of carbo-chemical cooling water;

(4) Refers substantially to the acquisition of new Integrated Cement Plants.

The estimated useful lives are as follows:

|  |  | Consolidated |  |  | Parent Company
| 03/31/2017 |  | 12/31/2016 |  | 03/31/2017 |  | 12/31/2016
In Years |  |  |  |  |  |  |
Buildings | 41 |  | 41 |  | 42 |  | 42
Machinery, equipment and facilities | 18 |  | 18 |  | 19 |  | 19
Furniture and fixtures | 12 |  | 12 |  | 11 |  | 11
Others | 14 |  | 14 |  | 11 |  | 11

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10. INTANGIBLE ASSETS

|  |  |  |  |  |  |  |  |  |  |  |  | Consolidated |  |  |  | Parent Company
| Goodwill |  | Customer relationships |  | Software |  | Trademarks and patents |  | Rights and licenses (*) |  | Others |  | Total |  | Software |  | Total
Balance at December 31, 2016 | 3,590,931 |  | 297,660 |  | 68,253 |  | 116,196 |  | 3,184,924 |  | 440 |  | 7,258,404 |  | 47,547 |  | 47,547
Cost | 3,834,234 |  | 444,635 |  | 183,166 |  | 116,196 |  | 3,185,700 |  | 440 |  | 7,764,371 |  | 98,992 |  | 98,992
Accumulated amortization | (133,973) |  | (146,975) |  | (114,913) |  |  |  | (776) |  |  |  | (396,637) |  | (51,445) |  | (51,445)
Adjustment for accumulated recoverable value | (109,330) |  |  |  |  |  |  |  |  |  |  |  | (109,330) |  |  |  |
Balance at December 31, 2016 | 3,590,931 |  | 297,660 |  | 68,253 |  | 116,196 |  | 3,184,924 |  | 440 |  | 7,258,404 |  | 47,547 |  | 47,547
Effect of foreign exchange differences |  |  | (4,318) |  | (24) |  | (1,649) |  |  |  | (6) |  | (5,997) |  |  |  |
Acquisitions and expenditures |  |  |  |  | 267 |  |  |  |  |  |  |  | 267 |  |  |  |
Transfer of property, plant and equipment |  |  |  |  | 26,179 |  |  |  |  |  |  |  | 26,179 |  | 26,179 |  | 26,179
Write-offs (note 22) |  |  |  |  | (68) |  |  |  |  |  |  |  | (68) |  | (68) |  | (68)
Amortization |  |  | (8,994) |  | (5,615) |  |  |  | (332) |  |  |  | (14,941) |  | (3,752) |  | (3,752)
Balance at March 31, 2017 | 3,590,931 |  | 284,348 |  | 88,992 |  | 114,547 |  | 3,184,592 |  | 434 |  | 7,263,844 |  | 69,906 |  | 69,906
Cost | 3,834,234 |  | 438,344 |  | 164,644 |  | 114,547 |  | 3,185,701 |  | 434 |  | 7,737,904 |  | 125,768 |  | 125,768
Accumulated amortization | (133,973) |  | (153,996) |  | (75,652) |  |  |  | (1,109) |  |  |  | (364,730) |  | (55,862) |  | (55,862)
Adjustment for accumulated recoverable value | (109,330) |  |  |  |  |  |  |  |  |  |  |  | (109,330) |  |  |  |
Balance at March 31, 2017 | 3,590,931 |  | 284,348 |  | 88,992 |  | 114,547 |  | 3,184,592 |  | 434 |  | 7,263,844 |  | 69,906 |  | 69,906

(*) Composed mainly by mineral rights with potential of 1,101 million tons (Not reviewed by independent auditors). Amortization is based on production volume.

The average useful lives by nature are as follows:

|  |  | Consolidated |  |  |  | Parent Company
| 03/31/2017 |  | 12/31/2016 |  | 03/31/2017 |  | 12/31/2016
Software | 8 |  | 8 |  | 8 |  | 8
Customer relationships | 13 |  | 13 |  |  |  |

The assumptions used for the impairment test in December 2016 are still effective and there is not factor that justifies the recognition of impairment in the quarter.

11. BORROWINGS, FINANCING AND DEBENTURES

The balances of borrowings, financing and debentures, which are carried at amortized cost, are as follows:

|  |  |  |  |  |  |  | Consolidated |  |  |  |  |  | Parent Company
|  | Rates p.a. (%) |  | Current liabilities | Non-current liabilities |  | Current liabilities | Non-current liabilities |
|  |  | 03/31/2017 |  | 12/31/2016 |  | 03/31/2017 |  | 12/31/2016 |  | 03/31/2017 |  | 12/31/2016 |  | 03/31/2017 |  | 12/31/2016
FOREIGN CURRENCY |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Prepayment |  | 1% to 3,5% |  | 81,411 |  | 110,944 |  | 468,923 |  | 482,347 |  | 81,411 |  | 110,944 |  | 468,923 |  | 482,347
Prepayment |  | 3,51% to 8% |  | 461,046 |  | 438,802 |  | 4,107,303 |  | 4,290,062 |  | 461,046 |  | 438,802 |  | 4,107,303 |  | 4,290,061
Prepayment - Intecompany |  | 3,51% to 8% |  |  |  |  |  |  |  |  |  | 44,556 |  | 72,128 |  | 4,711,018 |  | 4,876,840
Perpetual bonds |  | 7% |  | 4,313 |  | 4,436 |  | 3,168,400 |  | 3,259,100 |  |  |  |  |  |  |  |
Bonds |  | 4,14% to 10% |  | 43,949 |  | 137,126 |  | 5,375,499 |  | 5,529,380 |  | 69,658 |  | 27,044 |  | 3,291,367 |  | 3,385,587
Bonds Intercompany |  | 4,14% to 10% |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Intercompany |  | Libor 6M to 3% |  |  |  |  |  |  |  |  |  | 152,591 |  | 149,654 |  | 2,644,400 |  | 2,719,420
Others |  | 1,2% to 8% |  | 90,608 |  | 95,983 |  | 171,101 |  | 259,262 |  |  |  |  |  |  |  |
|  |  |  | 681,327 |  | 787,291 |  | 13,291,226 |  | 13,820,151 |  | 809,262 |  | 798,572 |  | 15,223,011 |  | 15,754,255
LOCAL CURRENCY |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
BNDES/FINAME |  | 1,3% + TJLP and Fixed rate 2,5% to 6% + 1,5% |  | 73,156 |  | 73,736 |  | 999,150 |  | 1,012,268 |  | 43,182 |  | 43,467 |  | 939,676 |  | 945,633
Debentures |  | 110,8% to 113,7% CDI |  | 515,532 |  | 538,003 |  | 1,170,383 |  | 1,270,383 |  | 515,532 |  | 538,003 |  | 1,170,383 |  | 1,270,383
Prepayment |  | 109,5% to 116,5% CDI and fixed rate of 8% | 522,652 |  | 570,778 |  | 5,080,000 |  | 5,080,000 |  | 454,928 |  | 519,806 |  | 3,080,000 |  | 3,080,000
CCB |  | 112,5% and 113% CDI |  | 76,434 |  | 181,143 |  | 7,200,000 |  | 7,200,000 |  | 76,434 |  | 181,143 |  | 7,200,000 |  | 7,200,000
|  |  |  | 1,187,774 |  | 1,363,660 |  | 14,449,533 |  | 14,562,651 |  | 1,090,076 |  | 1,282,419 |  | 12,390,059 |  | 12,496,016
Total Borrowings and Financing |  | 1,869,101 |  | 2,150,951 |  | 27,740,759 |  | 28,382,802 |  | 1,899,338 |  | 2,080,991 |  | 27,613,070 |  | 28,250,271
Transaction Costs and Issue Premiums |  | (31,102) |  | (33,503) |  | (52,165) |  | (59,232) |  | (26,891) |  | (29,109) |  | (47,757) |  | (53,378)
Total Borrowings and Financing + Transaction Costs |  | 1,837,999 |  | 2,117,448 |  | 27,688,594 |  | 28,323,570 |  | 1,872,447 |  | 2,051,882 |  | 27,565,313 |  | 28,196,893

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11.a) Maturities of borrowings, financing and debentures presented in noncurrent liabilities

As of March 31, 2017, the principal amount of long-term borrowings, financing and debentures by maturity year, adjusted for interest and inflation, is as follows:

|  |  |  | Consolidated |  |  |  | Parent Company
2018 |  | 5,308,629 |  | 19% |  | 7,032,265 |  | 25%
2019 |  | 7,060,863 |  | 25% |  | 5,452,468 |  | 20%
2020 |  | 7,344,655 |  | 26% |  | 4,593,480 |  | 17%
2021 |  | 2,204,795 |  | 8% |  | 2,774,303 |  | 10%
2022 |  | 1,833,451 |  | 7% |  | 2,088,048 |  | 8%
After 2022 |  | 819,966 |  | 3% |  | 5,672,506 |  | 20%
Perpetual bonds |  | 3,168,400 |  | 12% |  |  |  |
|  | 27,740,759 |  | 100% |  | 27,613,070 |  | 100%

11.b) Borrowings, financing and debentures raised and paid

The table below shows the borrowings, financing and debentures raised and paid during the period:

|  |  |  | Consolidated |  |  |  | Parent Company
|  | 03/31/2017 |  | 12/31/2016 |  | 03/31/2017 |  | 12/31/2016
Opening balance |  | 30,441,018 |  | 34,282,515 |  | 30,248,775 |  | 33,988,090
Raised |  |  |  | 30,034 |  | - |  | 62,836
Forfaiting funding / Drawee Risk Raised |  | - |  | 78,240 |  | - |  | 78,240
Payment of principal |  | (306,516) |  | (695,938) |  | (244,599) |  | (298,015)
Payment of principal Forfaiting/Drawee Risk |  | - |  | (407,155) |  | - |  | (407,155)
Payment of charges |  | (929,979) |  | (3,044,342) |  | (738,016) |  | (2,566,293)
Payment of charges Forfaiting/Drawee Risk |  |  |  | (5,694) |  |  |  | (5,694)
Provision of charges |  | 726,095 |  | 3,156,120 |  | 615,008 |  | 2,661,090
Provision of charges Forfaiting / Drawee Risk |  | - |  | 4,237 |  | - |  | 4,237
Others (1) |  | (404,025) |  | (2,956,999) |  | (443,408) |  | (3,268,561)
Closing balance |  | 29,526,593 |  | 30,441,018 |  | 29,437,760 |  | 30,248,775

1. Includes unrealized exchange and monetary variations.

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In the first quarter of 2017, the Group paid borrowings as shown below:

· Paid

|  |  |  | Consolidated
Transaction |  | Principal |  | Charges
Fixed Rate Notes |  | 81,909 |  | 237,352
Debentures |  | 96,667 |  | 85,458
Bank Credit Bill |  |  |  | 351,812
Export Credit Note |  | 20,000 |  | 214,308
Pre - Export Payment |  | 88,938 |  | 21,506
BNDES/FINAME |  | 17,142 |  | 19,047
Others |  | 1,860 |  | 496
Total |  | 306,516 |  | 929,979

· Covenants

The Company’s borrowing agreements provide for the fulfillment of certain non-financial obligations, as well as the maintenance of certain parameters and performance indicators, such as the publication of its audited financial statements within the regulatory terms or payment of commission on assumption of risks in case the indicator of net debt to EBITDA reaches the levels set out in such agreements.

As of March 31, 2017, the Company has provisioned R$36,375 in the Consolidated and R$16,767 in the Parent Company for commission on assumption of risks.

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12. FINANCIAL INSTRUMENTS

The information on policies applied to financial instruments has not changed significantly in relation to that disclosed in the Company's financial statements as of December 31, 2016 and, accordingly, the Company decided not to repeat it fully in the condensed interim financial information as of March 31, 2017.

I - Identification and measurement of financial instruments

The Company enters into transactions involving various financial instruments, mainly cash and cash equivalents, including short-term investments, marketable securities, trade receivables, trade payables, and borrowings and financing. The Company also enters into derivative transactions, especially interest rate and foreign exchange rate swaps.

· Classification of financial instruments

Consolidated |  |  |  |  |  | 03/31/2017 |  |  |  | 12/31/2016
| Notes |  | Available for sale |  | Fair value through profit or loss |  | Loans and receivables |  | Other liabilities measured at amortized cost method |  | Balances |  | Available for sale |  | Fair value through profit or loss |  | Loans and receivables |  | Other liabilities measured at amortized cost method |  | Balances
Assets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Current |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cash and cash equivalents |  | 3 |  |  |  |  |  | 4,315,796 |  |  |  | 4,315,796 |  |  |  |  |  | 4,871,162 |  |  |  | 4,871,162
Short-term investments |  | 4 |  |  |  |  |  | 734,688 |  |  |  | 734,688 |  |  |  |  |  | 760,391 |  |  |  | 760,391
Trade receivables |  | 5 |  |  |  |  |  | 1,849,528 |  |  |  | 1,849,528 |  |  |  |  |  | 1,904,630 |  |  |  | 1,904,630
Derivative financial instruments |  | 7 |  |  |  |  |  |  |  |  |  |  |  |  |  | 2,298 |  |  |  |  |  | 2,298
Trading securities |  | 7 |  |  |  | 3,586 |  |  |  |  |  | 3,586 |  |  |  | 2,966 |  |  |  |  |  | 2,966
|  | 5 |  |  |  |  |  |  |  | 37,679 |  | 37,679 |  |  |  |  |  |  |  | 37,679 |  | 37,679
Total |  |  |  |  |  | 3,586 |  | 6,900,012 |  | 37,679 |  | 6,941,277 |  |  |  | 5,264 |  | 7,536,183 |  | 37,679 |  | 7,579,126
Non-current |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Other trade receivables |  | 7 |  |  |  |  |  | 14,327 |  |  |  | 14,327 |  |  |  |  |  | 15,291 |  |  |  | 15,291
Investments |  | 8 |  | 1,427,566 |  |  |  |  |  |  |  | 1,427,566 |  | 1,374,268 |  |  |  |  |  |  |  | 1,374,268
Loans - related parties |  | 7 |  |  |  |  |  | 501,766 |  |  |  | 501,766 |  |  |  |  |  | 479,960 |  |  |  | 479,960
Total |  |  |  | 1,427,566 |  |  |  | 516,093 |  |  |  | 1,943,659 |  | 1,374,268 |  |  |  | 495,251 |  |  |  | 1,869,519
Total Assets |  |  |  | 1,427,566 |  | 3,586 |  | 7,416,105 |  | 37,679 |  | 8,884,936 |  | 1,374,268 |  | 5,264 |  | 8,031,434 |  | 37,679 |  | 9,448,645
Liabilities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Current |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Borrowings and financing |  | 11 |  |  |  |  |  |  |  | 1,869,101 |  | 1,869,101 |  |  |  |  |  |  |  | 2,150,951 |  | 2,150,951
Derivative financial instruments |  | 12 |  |  |  | 26 |  |  |  |  |  | 26 |  |  |  | 121 |  |  |  |  |  | 121
Trade payables |  |  |  |  |  |  |  |  |  | 1,934,358 |  | 1,934,358 |  |  |  |  |  |  |  | 1,763,206 |  | 1,763,206
Dividends and interest on capital |  | 13 |  |  |  |  |  |  |  | 484,570 |  | 484,570 |  |  |  |  |  |  |  | 484,570 |  | 484,570
Total |  |  |  |  |  | 26 |  |  |  | 4,288,029 |  | 4,288,055 |  |  |  | 121 |  |  |  | 4,398,727 |  | 4,398,848
Non-current |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Borrowings and financing |  | 11 |  |  |  |  |  |  |  | 27,740,759 |  | 27,740,759 |  |  |  |  |  |  |  | 28,382,802 |  | 28,382,802
Total |  |  |  |  |  |  |  |  |  | 27,740,759 |  | 27,740,759 |  |  |  |  |  |  |  | 28,382,802 |  | 28,382,802
Total Liabilities |  |  |  |  |  | 26 |  |  |  | 32,028,788 |  | 32,028,814 |  |  |  | 121 |  |  |  | 32,781,529 |  | 32,781,650

· Fair value measurement

The following table shows the financial instruments recognized at fair value through profit or loss classifying them according to the fair value hierarchy:

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Consolidated |  |  |  |  |  | 03/31/2017 |  |  |  |  |  | 12/31/2016
| Level 1 |  | Level 2 |  | Balances |  | Level 1 |  | Level 2 |  | Balances
Assets |  |  |  |  |  |  |  |  |  |  |  |
Current |  |  |  |  |  |  |  |  |  |  |  |
Financial assets at fair value through profit or loss |  |  |  |  |  |  |  |  |  |  |  |
Derivative financial instruments |  |  |  |  |  |  |  |  |  | 2,298 |  | 2,298
Trading securities |  | 3,586 |  |  |  | 3,586 |  | 2,966 |  |  |  | 2,966
Non-current |  |  |  |  |  |  |  |  |  |  |  |
Available-for-sale financial assets |  |  |  |  |  |  |  |  |  |  |  |
Investments |  | 1,427,566 |  |  |  | 1,427,566 |  | 1,374,268 |  |  |  | 1,374,268
Total Assets |  | 1,431,152 |  |  |  | 1,431,152 |  | 1,377,234 |  | 2,298 |  | 1,379,532
Liabilities |  |  |  |  |  |  |  |  |  |  |  |
Current |  |  |  |  |  |  |  |  |  |  |  |
Financial liabilities at fair value through profit or loss |  |  |  |  |  |  |  |  |  |  |  |
Derivative financial instruments |  |  |  | 26 |  | 26 |  |  |  | 121 |  | 121
Total Liabilities |  |  |  | 26 |  | 26 |  |  |  | 121 |  | 121

II – Investments in securities classified as available-for-sale and measured at fair value through OCI

The Company has investments in common (USIM3) and preferred (USIM5) shares of Usiminas (“Usiminas Shares”), designated as available-for-sale financial assets. The Company adopts this designation because the nature of the investment is not included in any other categories of financial instruments (loans and receivables, held-to-maturity investments or financial assets at fair value through profit or loss). The asset is classified as a non-current asset in line item “investments” and is carried at fair value based on the quoted price on the stock exchange (B3 - Brasil, Bolsa, Balcão). According to the Company's policy, the gains and losses arising from changes in share prices are recorded directly in shareholders’ equity, as other comprehensive income.

The Company's accounting policy requires a quarterly analysis based on quantitative and qualitative information available in the market from the moment the instrument demonstrates a drop of more than 20% in its market value or from a significant drop in market value compared to their acquisition cost for more than 12 months. If the Company concludes that there was a significant drop in the instrument’s price, an impairment loss must be recognized. In 2012, considering the price of Usiminas shares on B3 - Brasil, Bolsa, Balcão, the first impairment of these shares was recognized. Under this policy, whenever the share price reaches a level lower than the last impairment recognized, the Company must recognize new losses in profit or loss, redefining the new minimum level of the share price.

During 2016 and until the first quarter of 2017, no impairment was recognized and the gains arising from change in share prices in the period was recognized in other comprehensive income:

Class of shares |  | Quantity |  | 03/31/2017 |  |  | 12/31/2016 |  | Variation in the period
|  | Share price |  | Carrying amount |  | Quantity | Share price |  | Carrying amount |  | Share price |  | Variation in the carrying amount
Common |  | 107,156,651 |  | 8.38 |  | 897,973 |  | 107,156,651 | 8.26 |  | 885,114 |  | 0.12 |  | 12,859
Preferred |  | 114,280,556 |  | 4.44 |  | 507,405 |  | 114,280,556 | 4.10 |  | 468,550 |  | 0.34 |  | 38,855
|  | 221,437,207 |  |  |  | 1,405,378 |  | 221,437,207 |  |  | 1,353,664 |  |  |  | 51,714

As of March 31, 2017 and December 31, 2016, the Company's interest in USIMINAS comprised 15.19% in common shares and 20.86% in preferred shares.

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As of March 31, 2017, the amount recognized in comprehensive income for available-for-sale investments, net of taxes, is R$756,243 (R$678,035 as of December 31, 2016).

III - Financial risk management:

As of March 31, 2017, there were no changes in the financial risk management policies in relation to those disclosed in the Company's financial statements for the year ended December 31, 2016.

12.a) Foreign exchange rate and interest rate risks:

· Foreign exchange rate risk:

The exposure arises from the existence of assets and liabilities denominated in Dollar or Euro, since the Company's functional currency is substantially the real and is denominated natural currency hedge. The net exposure is the result of offsetting the natural currency exposure by hedging instruments adopted by CSN.

The consolidated net exposure as of March 31, 2017 is as follows.

|  |  |  | 03/31/2017
Foreign Exchange Exposure |  | (Amounts in US$’000) |  | (Amounts in €’000)
Cash and cash equivalents overseas |  | 1,090,887 |  | 17,879
Trade receivables |  | 330,506 |  | 10,123
Other assets |  | 4,045 |  | 10,084
Total Assets |  | 1,425,438 |  | 38,086
Borrowings and financing |  | (4,327,371) |  | (72,457)
Trade payables |  | (115,056) |  | (5,194)
Other liabilities |  | (15,209) |  | (5,905)
Total Liabilities |  | (4,457,636) |  | (83,556)
Foreign exchange exposure |  | (3,032,198) |  | (45,470)
Cash flow hedge accounting |  | 1,429,333 |  |
Net Investment hedge accounting |  |  |  | 72,000
Net foreign exchange exposure |  | (1,602,865) |  | 26,530
Perpetual Bonds |  | 1,000,000 |  |
Net foreign exchange exposure excluding perpetual bonds |  | (602,865) |  | 26,530

CSN is currently in process of redefining its currency hedge strategy. The Company began to focus its hedging strategy to preserve its cash flow capturing the existing natural relationships and the use of derivative instruments to hedge CSN’s future cash flows.

· Interest rate risk:

The risk arises from short and long term liabilities with fixed or floating interest rates and inflation indices.

In item 12b) we show the derivatives and hedging strategies to hedge foreign exchange and interest rate risks.

12.b) Hedging instruments: Derivatives and hedge accounting:

CSN uses various instruments to hedge foreign exchange and interest rate risks, as shown in the following topics:

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· Portfolio of derivative financial instruments

|  |  |  |  |  |  |  |  |  |  |  | 03/31/2017 |  |  |  |  |  |  |  | 12/31/2016 |  | 03/31/2017
|  |  |  |  |  |  |  | Appreciation (R$) |  | Fair value (market) |  |  |  | Appreciation (R$) |  | Fair value (market) |  | Impact on financial income (expenses) in 2017
Counterparties |  | Maturity |  | Functional Currency |  | Notional amount |  | Asset position |  | Liability position |  | Amounts receivable / (payable) |  | Notional amount |  | Asset position |  | Liability position |  | Amounts receivable / (payable) |
BNPP |  | 3/9/2017 |  | Dollar |  |  |  |  |  |  |  |  |  | 10,250 |  | 33,435 |  | (31,137) |  | 2,298 |  | (229)
Total dollar-to-euro swap |  |  |  |  |  |  |  |  |  |  |  |  |  | 10,250 |  | 33,435 |  | (31,137) |  | 2,298 |  | (229)
BM&FBovespa |  | 1/2/2017 |  | Real |  | 2,219,433 |  |  |  |  |  | (26) |  | 1,641,378 |  | - |  | - |  | (121) |  | 13,224
Total Future DI |  |  |  | 2,219,433 |  |  |  |  |  | (26) |  | 1,641,378 |  | - |  | - |  | (121) |  | 13,224
|  |  |  |  |  |  |  | (26) |  |  |  | 33,435 |  | (31,137) |  | 2,177 |  | 12,995

· Classification of the derivatives in the balance sheet and statement of income

|  |  |  |  |  |  |  |  |  | 03/31/2017
Instruments |  | Assets |  | Liabilities |  | Financial income and expenses, net (Note 23)
| Current |  | Total |  | Current |  | Total |
Dollar - to - euro swap |  |  |  |  |  |  |  |  |  | (229)
Future DI |  |  |  |  |  | (26) |  | (26) |  | 13,224
|  |  |  |  |  | (26) |  | (26) |  | 12,995
|  |  |  |  |  |  |  | 12/31/2016 |  | 03/31/2016
Instruments |  | Assets |  | Liabilities |  | Financial income and expenses, net (Note 23)
| Current |  | Total |  | Current |  | Total |
Future Dollar BM&F |  |  |  |  |  |  |  |  |  | (681,176)
Future DI |  |  |  |  |  | (121) |  | (121) |  |
Dollar - to - euro swap |  | 2,298 |  | 2,298 |  |  |  |  |  | (7,506)
Fixed rate - to - CDI swap |  |  |  |  |  |  |  |  |  | (299)
CDI - to - fixed rate swap |  |  |  |  |  |  |  |  |  | (63)
|  | 2,298 |  | 2,298 |  | (121) |  | (121) |  | (689,044)

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· Cash flow hedge accounting

Beginning November 1, 2014, the Company formally designated cash flow hedging relationships to hedge highly probable future cash flows against US dollar fluctuations.

In order to better reflect the accounting impacts of this foreign exchange hedging strategy on the Company’s results, CSN designated part of its US dollar-denominated liabilities as a hedging instrument of its future exports. As a result, foreign exchange differences arising from designated liabilities will be temporarily recognized in shareholders’ equity and recognized in profit or loss when such exports are carried out, allowing the concurrent recognition of the dollar impact on liabilities and on exports. The adoption of this hedge accounting does not entail entering into any financial instrument. As of March 31, 2017, US$1.4 billion in exports to be carried out until October 2022 is designated.

Through hedge accounting, the exchange gains and losses on debt instruments will not immediately affect the Company’s profit or loss except to the extent that exports are carried out.

The table below shows a summary of the hedging relationships as of March 31, 2017:

|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 03/31/2017
Designation Date |  | Hedging Instrument |  | Hedged item |  | Type of hedged risk |  | Hedged period |  | Exchange rate on designation |  | Designated amounts (US$’000) |  | Amortizated part (USD'000) |  | Effect on result (R$'000) |  | Impact on shareholders' equity (R$'000)
11/03/2014 |  | Export prepayments in US$ to third parties |  | Part of the highly probable future monthly iron ore exports |  | Foreign exchange - R$ vs. US$ spot rate |  | October 2016 to September 2019 |  | 2.4442 |  | 500,000 |  | (66,667) |  | 4,996 |  | (313,820)
12/01/2014 |  | Export prepayments in US$ to third parties |  | Part of the highly probable future monthly iron ore exports |  | Foreign exchange - R$ vs. US$ spot rate |  | October 2015 to February 2019 (2) |  | 2.5601 |  | 175,000 |  | (70,000) |  | 11,406 |  | (63,877)
12/18/2014 |  | Export prepayments in US$ to third parties |  | Part of the highly probable future monthly iron ore exports |  | Foreign exchange - R$ vs. US$ spot rate |  | May 2020 |  | 2.6781 |  | 100,000 |  |  |  |  |  | (49,030)
07/21/2015 |  | Export prepayments in US$ to third parties |  | Part of the highly probable future monthly iron ore exports |  | Foreign exchange - R$ vs. US$ spot rate |  | July 2019 to March 2021 |  | 3.1813 |  | 60,000 |  |  |  |  |  | 774
07/23/2015 |  | Export prepayments in US$ to third parties |  | Part of the highly probable future monthly iron ore exports |  | Foreign exchange - R$ vs. US$ spot rate |  | July 2019 to March 2021 |  | 3.2850 |  | 100,000 |  |  |  |  |  | 11,660
07/23/2015 |  | Export prepayments in US$ to third parties |  | Part of the highly probable future monthly iron ore exports |  | Foreign exchange - R$ vs. US$ spot rate |  | October 2018 to October 2022 |  | 3.2850 |  | 30,000 |  |  |  |  |  | 3,498
07/24/2015 |  | Export prepayments in US$ to third parties |  | Part of the highly probable future monthly iron ore exports |  | Foreign exchange - R$ vs. US$ spot rate |  | October 2018 to October 2022 |  | 3.3254 |  | 100,000 |  |  |  |  |  | 15,700
07/27/2015 |  | Export prepayments in US$ to third parties |  | Part of the highly probable future monthly iron ore exports |  | Foreign exchange - R$ vs. US$ spot rate |  | October 2018 to October 2022 |  | 3.3557 |  | 25,000 |  |  |  |  |  | 4,683
07/27/2015 |  | Export prepayments in US$ to third parties |  | Part of the highly probable future monthly iron ore exports |  | Foreign exchange - R$ vs. US$ spot rate |  | October 2018 to October 2022 |  | 3.3557 |  | 70,000 |  |  |  |  |  | 13,111
07/27/2015 |  | Export prepayments in US$ to third parties |  | Part of the highly probable future monthly iron ore exports |  | Foreign exchange - R$ vs. US$ spot rate |  | October 2018 to October 2022 |  | 3.3557 |  | 30,000 |  |  |  |  |  | 5,619
07/28/2015 |  | Export prepayments in US$ to third parties |  | Part of the highly probable future monthly iron ore exports |  | Foreign exchange - R$ vs. US$ spot rate |  | October 2018 to October 2022 |  | 3.3815 |  | 30,000 |  |  |  |  |  | 6,393
08/01/2015 |  | Export prepayments in US$ to third parties |  | Part of the highly probable future monthly iron ore exports |  | Foreign exchange - R$ vs. US$ spot rate |  | (1) |  | 3.3940 |  | (9,000) |  |  |  |  |  | (2,030)
08/03/2015 |  | Export prepayments in US$ to third parties |  | Part of the highly probable future monthly iron ore exports |  | Foreign exchange - R$ vs. US$ spot rate |  | October 2018 to October 2022 |  | 3.3940 |  | 355,000 |  |  |  |  |  | 80,088
Total |  |  |  |  |  |  |  |  |  |  |  | 1,566,000 |  | (136,667) |  | 16,402 |  | (287,231)

(*) The effect on profit or loss was recognized in other operating expenses.

(1) - During the designation in August 2015, we reviewed the future export projections and identified that the amount of US$ 9 million designated previously was no longer probable to be realized due to the decrease of the Platt’s value. Therefore, we discontinued the hedging relationship in August 2015. The exchange rate for the period remains recorded in shareholders’ equity until the settlement of the debt.

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In the hedging relationships described above, the amounts of the debt instruments were fully designated for equivalent iron ore export portions.

The movement in hedge accounting amounts recognized in shareholders’ equity as of March 31, 2017 is as follows:

| 12/31/2016 |  | Movement |  | Realization |  | 03/31/2017
Cash flow hedge accounting | 436,677 |  | (133,044) |  | (16,402) |  | 287,231
Fair value of cash flow hedge, net of taxes | 436,677 |  | (133,044) |  | (16,402) |  | 287,231

As of March 31, 2017, the hedging relationships established by the Company were effective, according to prospective tests conducted. Thus, no reversal for hedge accounting ineffectiveness was recognized.

· Hedge of net investment in foreign operation

CSN has a natural currency exposure in Euros substantially arising from a borrowing taken by a foreign subsidiary with functional currency in Reais, for the acquisition of investments abroad where the functional currency is Euro. Such exposure arises from translating the balance sheets of these subsidiaries for consolidation into CSN, where the exchange difference on the borrowings affected the statement of income, in the financial income (expenses) line item, and the exchange difference on the net assets of the foreign operation directly affected the shareholders equity, in other comprehensive income.

As from September 1, 2015, CSN began to adopt the net investment hedge to eliminate such exposure and cover future fluctuations of the Euro on such borrowings. Non-derivative financial liabilities were designated, represented by borrowing agreements with financial institutions in the amount of € 120 million. The account balances as of March 31, 2017 are as follows:

|  |  |  |  |  |  |  |  |  |  |  | 03/31/2017
Designation Date |  | Hedging Instrument |  | Hedged item |  | Type of hedged risk |  | Exchange rate on designation |  | Designated amounts (EUR'000) |  | Impact on shareholders' equity
9/1/2015 |  | Non-derivative financial liabilities in EUR – Debt contract |  | Investments in subsidiaries which EUR is the functional currency |  | Foreign exchange - R$ vs. EUR spot rate |  | 4.0825 |  | 120,000 |  | (59,650)
01/31/2016 |  | Non-derivative financial liabilities in EUR – Debt contract |  | Investments in subsidiaries which EUR is the functional currency |  | Foreign exchange - R$ vs. EUR spot rate |  | (1) |  | (48,000) |  |
Total |  |  |  |  |  |  |  |  |  | 72,000 |  | (59,650)

1. In January 2017, the portion of a debt designated as hedging instrument was settled.

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The movement in the amounts related to net investment hedge recognized in shareholders’ equity as of March 31, 2017 is as follows:

| 12/31/2016 |  | Movement |  | Realization |  | 03/31/2017
Net Investment hedge accounting | (57,804) |  | (1,846) |  |  |  | (59,650)
Fair value of net investment hedge in foreign operations | (57,804) |  | (1,846) |  |  |  | (59,650)

As of March 31, 2017, the hedging relationships established by the Company were effective, according to prospective tests conducted. Therefore, no reversal for hedge ineffectiveness was recognized.

12.c) Sensitivity analysis

We present below the sensitivity analysis of foreign exchange rate and interest rate risks.

· Sensitivity analysis of derivative financial instruments and consolidated foreign exchange exposure

The Company considered scenarios 1 and 2 as 25% and 50% deterioration for currency volatility using as reference the closing exchange rate as of March 31, 2017.

The currencies used in the sensitivity analysis and their scenarios are shown below:

|  |  |  |  |  |  |  | 03/31/2017
Currency |  | Exchange rate |  | Probable scenario |  | Scenario 1 |  | Scenario 2
USD |  | 3.1684 |  | 3.2909 |  | 3.9605 |  | 4.7526
EUR |  | 3.3896 |  | 3.9033 |  | 4.2370 |  | 5.0844

|  |  |  |  |  | 03/31/2017
Interest |  | Interest rate |  | Scenario 1 |  | Scenario 2
CDI |  | 12.13% |  | 15.16% |  | 18.20%
TJLP |  | 7.50% |  | 9.38% |  | 11.25%
LIBOR |  | 1.42% |  | 1.78% |  | 2.13%

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The effects on profit or loss, considering scenarios 1 and 2, are shown below:

|  |  |  |  |  |  |  |  |  | 03/31/2017
Instruments |  | Notional |  | Risk |  | Probable scenario (*) |  | Scenario 1 |  | Scenario 2
Hedge accounting of exports |  | 1,429,333 |  | Dollar |  | 175,093 |  | 1,132,175 |  | 2,264,350
Currency position |  | (3,032,198) |  | Dollar |  | (371,444) |  | (2,401,804) |  | (4,803,608)
(not including exchange derivatives above) |  |  |  |  |  |  |  |  |  |
Consolidated exchange position |  | (1,602,865) |  | Dollar |  | (196,351) |  | (1,269,629) |  | (2,539,258)
(including exchange derivatives above) |  |  |  |  |  |  |  |  |  |
Net Investment hedge accounting |  | 72,000 |  | Euro |  | 36,986 |  | 61,013 |  | 122,026
Currency position |  | (45,470) |  | Euro |  | (23,358) |  | (38,531) |  | (77,062)
Consolidated exchange position |  | 26,530 |  | Euro |  | 13,628 |  | 22,482 |  | 44,964
(including exchange derivatives above) |  |  |  |  |  |  |  |  |  |

(*) The probable scenarios were calculated considering the following variations for the risks: Real x Dollar – depreciation of Real by 3.87% / Real x Euro – depreciation of Real by 15,16%. Source: quotations from Central Bank of Brazil on 12/20/2017.

· Sensitivity analysis of interest rate swap

The Company considered scenarios 1 and 2 as 25% and 50% for the sensitivity analysis as of March 31, 2017.

|  |  |  |  |  |  |  |  |  | 03/31/2017
Instruments |  | Notional amount |  | Risk |  | Probable scenario (*) |  | Scenario 1 |  | Scenario 2
Future DI |  | 2,219,433 |  | CDI |  | (26) |  | 67,304 |  | 134,609

(*) The sensitivity analysis is based on the assumption of maintaining, as a probable scenario the market values as of March 31, 2017 recognized in the company's assets and liabilities.

· Sensitivity analysis of changes in interest rates

The Company considered scenarios 1 and 2 as 25% and 50% of changes in interest volatility as of March 31, 2017.

|  |  |  |  |  |  |  |  |  |  | Consolidated
|  |  |  |  |  |  |  |  |  |  | Impact on profit or loss
Changes in interest rates |  | % p.a |  |  | Assets |  | Liabilities |  | Probable scenario (*) |  | Scenario 1 |  | Scenario 2
TJLP |  | 7.50 |  |  |  |  | (1,058,515) |  | (3,306) |  | (19,847) |  | (39,694)
Libor |  | 1.42 |  |  |  |  | (5,040,924) |  | (77,758) |  | (17,936) |  | (35,872)
CDI |  | 12.13 |  |  | 607,856 |  | (14,323,819) |  | (251,668) |  | (415,937) |  | (831,874)

(*) The sensitivity analysis is based on the assumption of maintaining as a probable scenario the market values as of March 31, 2017 recognized in the company's assets and liabilities.

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12.d) Liquidity risk

The following table shows the contractual maturities of financial liabilities, including accrued interest.

|  |  |  |  |  |  |  |  | Consolidated
At March 31, 2017 | Less than one year |  | From one to two years |  | From two to five yyears |  | Over five years |  | Total
Borrowings, financing and debentures | 1,869,101 |  | 12,369,492 |  | 11,382,901 |  | 3,988,366 |  | 29,609,860
Derivative financial instruments | 26 |  |  |  |  |  |  |  | 26
Trade payables | 1,934,358 |  |  |  |  |  |  |  | 1,934,358
Dividends and interest on capital (Note 13) | 484,570 |  |  |  |  |  |  |  | 484,570

IV - Fair values of assets and liabilities as compared to their carrying amounts

The estimated fair values for certain consolidated long-term borrowings and financing were calculated at prevailing market rates, taking into consideration the nature, terms and risks similar to those of the recorded contracts, as compared below:

|  |  | 03/31/2017 |  |  |  | 12/31/2016
| Carrying amount |  | Fair Value(*) |  | Carrying amount |  | Fair Value(*)
Perpetual bonds | 3,172,713 |  | 1,654,764 |  | 3,263,536 |  | 1,702,134
Fixed Rate Notes | 5,419,448 |  | 4,770,769 |  | 5,666,506 |  | 4,907,339

(*) Source: Bloomberg

13. OTHER PAYABLES

The group of other payables classified in current and noncurrent liabilities is comprised as follows:

| Consolidated |  | Parent Company
| Current |  | Non-current |  | Current |  | Non-current
| 03/31/2017 |  | 12/31/2016 |  | 03/31/2017 |  | 12/31/2016 |  | 03/31/2017 |  | 12/31/2016 |  | 03/31/2017 |  | 12/31/2016
Payables to related parties (note 17 a) | 2,273 |  | 10,927 |  |  |  |  |  | 174,505 |  | 182,810 |  | 60,960 |  | 67,940
Derivative financial instruments (note 12 I) | 26 |  | 121 |  |  |  |  |  |  |  |  |  |  |  |
Exclusive funds (1) |  |  |  |  |  |  |  |  | 26 |  | 121 |  |  |  |
Dividends and interest on capital payable (note 12 I) (2) | 484,570 |  | 484,570 |  |  |  |  |  | 2,209 |  | 2,209 |  |  |  |
Advances from customers | 117,150 |  | 90,720 |  |  |  |  |  | 105,968 |  | 80,652 |  |  |  |
Taxes in installments | 23,437 |  | 24,444 |  | 82,179 |  | 83,312 |  | 9,403 |  | 9,397 |  | 1,503 |  | 1,524
Profit sharing – employees | 267,303 |  | 211,791 |  |  |  |  |  | 185,308 |  | 148,788 |  |  |  |
Freight provision | 57,586 |  | 57,586 |  |  |  |  |  | 10,764 |  | 10,764 |  |  |  |
Provision for industrial restructuring | 13,000 |  | 13,000 |  |  |  |  |  |  |  |  |  |  |  |
Taxes payable |  |  |  |  | 8,452 |  | 8,518 |  |  |  |  |  | 6,966 |  | 7,035
Other provision | 23,162 |  | 23,162 |  |  |  |  |  | 6,890 |  | 6,890 |  |  |  |
Third party materials in our possession | 288 |  | 288 |  |  |  |  |  |  |  |  |  |  |  |
Other payables | 117,197 |  | 105,115 |  | 37,670 |  | 39,307 |  | 43,086 |  | 22,900 |  |  |  |
| 1,105,992 |  | 1,021,724 |  | 128,301 |  | 131,137 |  | 538,159 |  | 464,531 |  | 69,429 |  | 76,499

1. Refers to derivative transactions managed by the exclusive funds.

2. Dividends payable by the subsidiary CSN Mineração.

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14. INCOME TAX AND SOCIAL CONTRIBUTION

14.a) Income tax and social contribution recognized in profit or loss:

The income tax and social contribution recognized in profit or loss for the year are as follows:

|  |  | Consolidated |  |  |  | Parent Company
| 03/31/2017 |  | 03/31/2016 Adjusted |  | 03/31/2017 |  | 03/31/2016
Income tax and social contribution income (expense) |  |  |  |  |  |  |
Current | (114,155) |  | (27,304) |  |  |  | (51)
Deferred | (22,793) |  | (86,104) |  | 2,956 |  | 450
| (136,948) |  | (113,408) |  | 2,956 |  | 399

The reconciliation of consolidated and parent company income tax and social contribution expenses and the result from applying the tax rate to profit before income tax and social contribution are as follows:

| Consolidated |  |  |  | Parent Company
| 03/31/2017 |  | 03/31/2016 Adjusted |  | 03/31/2017 |  | 03/31/2016 Adjusted
(Loss)/Profit before income tax and social contribution | 254,563 |  | (663,622) |  | 82,674 |  | (785,923)
Tax rate | 34% |  | 34% |  | 34% |  | 34%
Income tax and social contribution at combined statutory rate | (86,551) |  | 225,631 |  | (28,109) |  | 267,214
Adjustment to reflect the effective rate: |  |  |  |  |  |  |
Equity pickup | 9,514 |  | 15,512 |  | 50,418 |  | (158,336)
Profit with differentiated rates or untaxed | (20,840) |  | (179,885) |  |  |  |
Transfer pricing adjustment | (653) |  | (44,172) |  |  |  |
Tax loss carryforwards without recognizing deferred taxes | (137,880) |  | (444,807) |  | (116,051) |  | (434,432)
Limit of Indebtdness | (7,770) |  | (9,211) |  | (7,770) |  | (9,211)
Unrecorded deferred taxes on temporary differences | 130,195 |  | 313,245 |  | 129,374 |  | 305,359
Deferred taxes on foreign profit |  |  | (6,798) |  |  |  |
Amortization of goodwill |  |  | (8,325) |  |  |  |
Tax incentives | 1,590 |  |  |  |  |  |
Reversal of estimated losses for deferred income and social contribution tax credits | (28,698) |  | 29,781 |  | (28,698) |  | 29,781
Other permanent deductions (additions) | 4,145 |  | (4,379) |  | 3,792 |  | 24
Income tax and social contribution in profit for the period | (136,948) |  | (113,408) |  | 2,956 |  | 399
Effective tax rate | 54% |  | -17% |  | -4% |  | 0%

Currently, there are no sufficiently strong evidences to support the recognition of tax credits. For this reason, we maintained the recognition of tax credits arising from income tax and social contribution losses up to the limit of 30% of the deferred tax liabilities.

14.b) Deferred income tax and social contribution:

Deferred income tax and social contribution are calculated on income tax and social contribution losses and the corresponding temporary differences between the tax bases of assets and liabilities and their carrying amounts in the financial statements:

|  |  |  |  |  |  |  |  | Consolidated
| Opening balance |  | Movement |  | Closing balance
| 12/31/2016 |  | Comprehensive income |  | P&L |  | Others |  | 03/31/2017
Deferred tax assets |  |  |  |  |  |  |  |  |
Income tax losses | 970,800 |  |  |  | 72,651 |  | (37,783) |  | 1,005,668
Social contribution tax losses | 340,629 |  |  |  | 26,622 |  | (13,597) |  | 353,654
Temporary differences | (2,288,175) |  | 3,044 |  | (122,066) |  | 51,224 |  | (2,355,973)
- Provision for tax. social security, labor, civil and environmental risks | 256,936 |  |  |  | (5,198) |  | 14,839 |  | 266,577
- Provision for environmental liabilities | 95,048 |  |  |  | (1,953) |  |  |  | 93,095
- Asset impairment losses | 93,908 |  |  |  | (1,631) |  |  |  | 92,277
- Inventory impairment losses | 35,703 |  |  |  | 1,518 |  |  |  | 37,221
- (Gains)/losses on financial instruments | (2,300) |  |  |  | 2,883 |  |  |  | 583
- (Gains)/losses on available-for-sale financial assets | 705,929 |  | (18,122) |  |  |  |  |  | 687,807
- Actuarial liability (pension and healthcare plan) | 134,578 |  |  |  | 70,806 |  |  |  | 205,384
- Accrued supplies and services | 123,101 |  |  |  | 8,735 |  |  |  | 131,836
- Allowance for doubtful debts | 42,008 |  |  |  | 4,515 |  |  |  | 46,523
- Goodwill on merger | 815 |  |  |  | (52) |  |  |  | 763
- Unrealized exchange differences (1) | 1,589,651 |  |  |  | (107,681) |  |  |  | 1,481,970
- (Gain) on loss of control over Transnordestina | (92,180) |  |  |  |  |  |  |  | (92,180)
- Cash flow hedge accounting | 148,471 |  | (45,236) |  |  |  |  |  | 103,235
- Estimated (losses)/Reversals to deferred tax credits | (3,013,730) |  | 61,476 |  | (28,698) |  |  |  | (2,980,952)
Unrecognized deferred taxes | (1,324,437) |  | 1,882 |  | (54,345) |  | 36,192 |  | (1,340,708)
- Fair Value acquisition of SWT/CBL | (199,001) |  | 2,901 |  | 6,227 |  |  |  | (189,873)
- Business Combination | (1,072,824) |  |  |  | 1,661 |  |  |  | (1,071,163)
- Other | 190,149 |  | 143 |  | (18,853) |  | 193 |  | 171,632
Total | (976,746) |  | 3,044 |  | (22,793) |  | (156) |  | (996,651)
Total Deferred Assets | 70,151 |  |  |  |  |  |  |  | 88,050
Total Deferred Liabilities | (1,046,897) |  |  |  |  |  |  |  | (1,084,701)
Total Deferred | (976,746) |  |  |  |  |  |  |  | (996,651)

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|  |  |  |  |  |  | Parent Company
| Opening balance |  | Movement | Closing balance
| 12/31/2016 |  | Comprehensive income |  | P&L |  | 03/31/2017
Deferred tax assets |  |  |  |  |  |  |
Income tax losses | 802,813 |  |  |  | 84,988 |  | 887,801
Social contribution tax losses | 280,164 |  |  |  | 31,063 |  | 311,227
Temporary differences | (1,670,334) |  |  |  | (113,095) |  | (1,783,429)
- Provision for tax. social security, labor, civil and environmental risks | 219,595 |  |  |  | (6,140) |  | 213,455
- Provision for environmental liabilities | 92,802 |  |  |  | (2,252) |  | 90,550
- Asset impairment losses | 62,398 |  |  |  | (11) |  | 62,387
- Inventory impairment losses | 12,686 |  |  |  | 52 |  | 12,738
(Gain)/loss in financial instruments | (2,300) |  |  |  | 2,883 |  | 583
- (Gains)/losses on available-for-sale financial assets | 705,929 |  | (18,122) |  |  |  | 687,807
- Actuarial liability (pension and healthcare plan) | 137,023 |  |  |  | 70,806 |  | 207,829
- Accrued supplies and services | 93,760 |  |  |  | 6,045 |  | 99,805
- Allowance for doubtful debts | 27,714 |  |  |  | 4,672 |  | 32,386
- Unrealized exchange differences (1) | 1,657,193 |  |  |  | (99,990) |  | 1,557,203
(Gain) in control loss on Transnorderstina | (92,180) |  |  |  |  |  | (92,180)
- Cash flow hedge accounting | 148,471 |  | (45,236) |  |  |  | 103,235
- Estimated (losses)/Reversals to deferred tax credits | (3,013,730) |  | 61,476 |  | (28,698) |  | (2,980,952)
Unrecognized deferred taxes | (1,115,571) |  | 1,882 |  | (33,336) |  | (1,147,025)
- Business Combination | (721,993) |  |  |  |  |  | (721,993)
- Deferred taxes over business combination - CGPAR | (22,609) |  |  |  |  |  | (22,609)
- Deferred taxes on amortization of surplus value - CGPAR | 1,340 |  |  |  |  |  | 1,340
- Others | 139,138 |  |  |  | (27,126) |  | 112,012
Total | (587,357) |  |  |  | 2,956 |  | (584,401)
Total Deferred Liabilities | (587,357) |  |  |  |  |  | (584,401)
Total Deferred | (587,357) |  |  |  |  |  | (584,401)

(1) The Company taxes exchange differences on a cash basis to calculate income tax and social contribution.

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In its corporate structure, the Company has foreign subsidiaries whose profits are subject to income tax in the countries where they were established at rates lower than those prevailing in Brazil. In the period from 2012 to the first quarter of 2017, these foreign subsidiaries generated profits amounting to R$ 1,789,700. If the tax authorities understand that these profits are subject to additional taxation in Brazil in respect of income tax and social contribution, these, if due, would total approximately R$ 487,789.

The Company, based on its legal counsel’s opinion, assessed as possible the likelihood of loss in the event of challenge by the tax authorities and, therefore, no provision was recognized in the financial statements.

14.c) Income tax and social contribution recognized in shareholders' equity:

The income tax and social contribution recognized directly in shareholders' equity are as follows:

| Consolidated |  |  |  | Parent Company
| 03/31/2017 |  | 12/31/2016 |  | 03/31/2017 |  | 12/31/2016
Income tax and social contribution |  |  |  |  |  |  |
Actuarial gains on defined benefit pension plan | 30,264 |  | 30,234 |  | 33,400 |  | 33,400
Losses estimated for deferred income and social contribution tax credits - actuarial gains | (33,400) |  | (33,400) |  | (33,400) |  | (33,400)
Changes in the fair value on available-for-sale financial assets | (51,918) |  | (33,796) |  | (51,918) |  | (33,796)
Losses estimated for deferred income and social contribution tax assets - available for sale assets | 51,918 |  | 33,796 |  | 51,918 |  | 33,796
Exchange differences on translating foreign operations | (425,510) |  | (425,510) |  | (425,510) |  | (425,510)
Cash flow hedge accounting | 66,459 |  | 109,813 |  | 66,459 |  | 109,813
Losses estimated for deferred income and social contribution tax credits - cash flow hedge | (66,459) |  | (109,813) |  | (66,459) |  | (109,813)
| (428,646) |  | (428,676) |  | (425,510) |  | (425,510)

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15. PROVISION FOR TAX, SOCIAL SECURITY, LABOR, CIVIL AND ENVIRONMENTAL RISKS AND JUDICIAL DEPOSITS

As of March 31, 2017, the information on judicial deposits and lawsuits has not changed significantly in relation to that disclosed in the Company's financial statements as of December 31, 2016. The details of the provisioned amounts and the related judicial deposits are presented below:

|  |  |  |  |  | Consolidated |  |  |  |  |  | Parent Company
|  | Accrued liabilities |  | Judicial deposits |  | Accrued liabilities |  | Judicial deposits
|  | 03/31/2017 |  | 12/31/2016 |  | 03/31/2017 |  | 12/31/2016 |  | 03/31/2017 |  | 12/31/2016 |  | 03/31/2017 |  | 12/31/2016
Tax |  | 117,812 |  | 119,523 |  | 66,853 |  | 62,035 |  | 66,629 |  | 70,979 |  | 53,882 |  | 48,831
Social security |  | 71,864 |  | 62,574 |  | 48,614 |  | 48,614 |  | 70,437 |  | 61,594 |  | 48,614 |  | 48,614
Labor |  | 486,314 |  | 485,422 |  | 197,037 |  | 186,823 |  | 381,256 |  | 381,255 |  | 162,099 |  | 156,978
Civil |  | 145,198 |  | 137,857 |  | 23,462 |  | 23,179 |  | 119,481 |  | 110,420 |  | 16,689 |  | 16,395
Environmental |  | 9,238 |  | 7,716 |  | 2,220 |  | 2,220 |  | 4,529 |  | 2,370 |  | 2,220 |  | 2,220
Deposit of a guarantee |  |  |  |  |  | 8,386 |  | 8,387 |  |  |  |  |  |  |  |
|  | 830,426 |  | 813,092 |  | 346,572 |  | 331,258 |  | 642,332 |  | 626,618 |  | 283,504 |  | 273,038

The movement in the provision for tax, social security, labor, civil and environmental risks in the period ended March 31, 2017 is as follows:

|  |  |  |  |  |  |  |  |  | Consolidated
|  |  |  |  |  |  |  |  |  | Current + Non-current
Nature |  | 12/31/2016 |  | Additions |  | Accrued Charges |  | Net utilization of reversal |  | 03/31/2017
Tax |  | 119,523 |  | 2,134 |  | 2,755 |  | (6,600) |  | 117,812
Social security |  | 62,574 |  | 8,038 |  | 1,252 |  |  |  | 71,864
Labor |  | 485,422 |  | 8,965 |  | 9,433 |  | (17,506) |  | 486,314
Civil |  | 137,857 |  | 2,092 |  | 8,087 |  | (2,838) |  | 145,198
Environmental |  | 7,716 |  | 2,111 |  | 176 |  | (765) |  | 9,238
|  | 813,092 |  | 23,340 |  | 21,703 |  | (27,709) |  | 830,426

|  |  |  |  |  |  |  |  |  | Parent Company
|  |  |  |  |  |  |  |  |  | Current + Non-current
Nature |  | 12/31/2016 |  | Additions |  | Accrued Charges |  | Net utilization of reversal |  | 03/31/2017
Tax |  | 70,979 |  | 691 |  | 1,559 |  | (6,600) |  | 66,629
Social security |  | 61,594 |  | 8,038 |  | 805 |  |  |  | 70,437
Labor |  | 381,255 |  | 5,657 |  | 6,440 |  | (12,096) |  | 381,256
Civil |  | 110,420 |  | 1,975 |  | 7,086 |  | - |  | 119,481
Environmental |  | 2,370 |  | 2,111 |  | 48 |  | - |  | 4,529
|  | 626,618 |  | 18,472 |  | 15,938 |  | (18,696) |  | 642,332

The provision for tax, social security, labor, civil and environmental risks was estimated by Management and is mainly based on the legal counsel’s assessment. Only lawsuits for which the risk is classified as probable loss are provisioned. Additionally, this provision includes tax liabilities resulting from lawsuits filed by the Company, subject to SELIC (Central Bank’s policy rate).

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§ Other administrative and judicial proceedings

The table below shows a summary of the main matters classified as possible risk compared with the balances as of March 31, 2017 and December 31, 2016.

|  | 03/31/2017 |  | 12/31/2016
Assesment and imposition of fine (AIIM) - Income tax and social contribution - Capital gain on sale of Namisa's shares |  | 8,578,543 |  | 8,415,142
Income tax / Social contribution - Assesment and Imposition of Fine (AIIM) - Disallowance of deductions of goodwill generated in the reverse incorporation of Big Jump by Namisa. |  | 2,508,221 |  | 2,457,855
Assessment Notice and Imposition of Fine (AIIM) - Income tax / Social contribution - gloss of interest on prepayment arising from supply contracts of iron ore and port services |  | 2,380,236 |  | 2,327,499
Notices of violation and imposition of fine - Income taxes and social contribution due to profits from foreign subsidiaries years 2008,2010 and 2011 |  | 1,680,301 |  | 1,644,898
Tax foreclosures - ICMS - Electricity credits |  | 863,208 |  | 838,192
Installments MP 470 - alleged insufficiency of tax losses |  | 668,451 |  | 652,553
Offset of taxes that were not approved by the Federal Revenue Service - IRPJ/CSLL, PIS/COFINS e IPI |  | 1,534,633 |  | 1,505,079
Disallowance of the ICMS credits - Transfer of iron ore |  | 584,183 |  | 570,997
ICMS - Refers to the transfer of imported raw material at an amount lower than the price disclosed in the import documentation |  | 286,177 |  | 279,511
Disallowance of the tax losses arising on adjustments to the SAPLI |  | 466,379 |  | 455,214
Assessment Notice - ICMS - shipping and return merchandise for Industrialization |  | 769,814 |  | 749,492
Assessment Notice- Income tax- Capital Gain of CFM vendors located outside |  | 190,713 |  | 185,249
CFEM – Divergence on the understanding between CSN and DNPM on the calculation basis |  | 358,718 |  | 348,512
Other tax (federal, state, and municipal) lawsuits |  | 2,807,279 |  | 2,727,258
Social security lawsuits |  | 268,808 |  | 263,951
Law suit applied by Brazilian antitrust authorities (CADE) |  | 97,088 |  | 96,316
Other civil lawsuits |  | 841,316 |  | 814,440
Labor and social security lawsuits |  | 1,252,637 |  | 1,138,155
Environmental lawsuits |  | 404,822 |  | 375,272
|  | 26,541,527 |  | 25,845,585

The assessments made by the legal counsel define these administrative and judicial proceedings as entailing risk of possible loss and, therefore, no provision was recognized in conformity with Management’s judgment and accounting practices adopted in Brazil.

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16. PROVISION FOR ENVIRONMENTAL LIABILITIES AND ASSET RETIREMENT OBLIGATIONS

The information on provision for environmental liabilities and asset retirement obligations has not changed in relation to that disclosed in the Company's financial statements as of December 31, 2016 and, accordingly, the Company decided not to repeat it in the condensed interim financial information as of March 31, 2017.

The balance of the provision for environmental liabilities and asset retirement obligation (ARO) is as follows:

|  |  | Consolidated |  |  |  | Parent Company
| 03/31/2017 |  | 12/31/2016 |  | 03/31/2017 |  | 12/31/2016
Environmental liabilities | 274,226 |  | 273,475 |  | 266,640 |  | 265,772
Asset retirement obligations | 75,356 |  | 73,589 |  |  |  |
| 349,582 |  | 347,064 |  | 266,640 |  | 265,772

17. RELATED-PARTY BALANCES AND TRANSACTIONS

The information on related-party transactions has not changed significantly in relation to that disclosed in the Company's financial statements as of December 31, 2016.

17.a) Transactions with subsidiaries, joint ventures, associates, exclusive funds and other related parties

· By transaction

|  | Consolidated
|  | Current | Non-current | Total
|  | 03/31/2017 |  | 12/31/2016 |  | 03/31/2017 |  | 12/31/2016 |  | 03/31/2017 |  | 12/31/2016
Assets |  |  |  |  |  |  |  |  |  |  |  |
Trade receivables (note 5) |  | 151,186 |  | 129,837 |  |  |  |  |  | 151,186 |  | 129,837
Dividends receivable (note 5) |  | 37,679 |  | 37,679 |  |  |  |  |  | 37,679 |  | 37,679
Actuarial asset (note 7) |  |  |  |  |  | 112,970 |  | 119,854 |  | 112,970 |  | 119,854
Financial investments/ investments |  | 179,719 |  | 315,319 |  |  |  |  |  | 179,719 |  | 315,319
Loans (note 7) |  |  |  |  |  | 501,766 |  | 479,960 |  | 501,766 |  | 479,960
Other receivables (note 7) |  | 4,756 |  | 5,768 |  | 31,645 |  | 32,020 |  | 36,401 |  | 37,788
|  | 373,340 |  | 488,603 |  | 646,381 |  | 631,834 |  | 1,019,721 |  | 1,120,437
Liabilities |  |  |  |  |  |  |  |  |  |  |  |
Other payables (note 13) |  |  |  |  |  |  |  |  |  |  |  |
Accounts payable |  | 2,273 |  | 10,927 |  |  |  |  |  | 2,273 |  | 10,927
Trade payables |  | 47,412 |  | 50,623 |  |  |  |  |  | 47,412 |  | 50,623
Actuarial liabilities |  |  |  |  |  | 28,004 |  | 28,004 |  | 28,004 |  | 28,004
|  | 49,685 |  | 61,550 |  | 28,004 |  | 28,004 |  | 77,689 |  | 89,554
|  | 3/31/2017 |  | 3/31/2016 |  |  |  |  |  |  |  |
|  |  | Adjusted |  |  |  |  |  |  |  |
Statement of Income |  |  |  |  |  |  |  |  |  |  |  |
Revenues |  |  |  |  |  |  |  |  |  |  |  |
Sales |  | 250,657 |  | 189,343 |  |  |  |  |  |  |  |
Interest (note 23) |  | 20,177 |  | 12,913 |  |  |  |  |  |  |  |
Expenses |  |  |  |  |  |  |  |  |  |  |  |
Purchases |  | (258,307) |  | (240,020) |  |  |  |  |  |  |  |
Interest |  |  |  | (92) |  |  |  |  |  |  |  |
Foreing exchange and monetary variations, net |  | (4,381) |  |  |  |  |  |  |  |  |  |
|  | 8,146 |  | (37,856) |  |  |  |  |  |  |  |

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· By company

|  | Consolidated
|  | Assets |  | Liabilities |  | P&L
| Current |  | Non-current |  | Total |  | Current |  | Non-current |  | Total |  | Sales |  | Purchases |  | Finance income (expenses), net |  | Foreign exchange and monetary variation, net |  | Total
Joint-venture and Joint-operation |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Itá Energética S.A. |  |  |  |  |  |  |  | 2,742 |  |  |  | 2,742 |  |  |  | (7,961) |  |  |  |  |  | (7,961)
MRS Logística S.A. |  | 37,217 |  |  |  | 37,217 |  | 26,332 |  |  |  | 26,332 |  |  |  | (212,078) |  |  |  |  |  | (212,078)
CBSI - Companhia Brasileira de Serviços e Infraestrutura |  | 1,904 |  |  |  | 1,904 |  | 15,305 |  |  |  | 15,305 |  | 5 |  | (35,105) |  |  |  |  |  | (35,100)
Transnordestina Logística S.A (1) |  | 247 |  | 480,800 |  | 481,047 |  | 2,679 |  |  |  | 2,679 |  | 1,271 |  |  |  | 15,508 |  |  |  | 16,779
|  | 39,368 |  | 480,800 |  | 520,168 |  | 47,058 |  |  |  | 47,058 |  | 1,276 |  | (255,144) |  | 15,508 |  |  |  | (238,360)
Other related parties |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
CBS Previdência |  |  |  | 112,971 |  | 112,971 |  |  |  | 28,004 |  | 28,004 |  |  |  |  |  |  |  |  |  |
Fundação CSN |  | 1,829 |  |  |  | 1,829 |  | 279 |  |  |  | 279 |  |  |  | (583) |  |  |  |  |  | (583)
Banco Fibra (2) |  | 179,719 |  |  |  | 179,719 |  |  |  |  |  |  |  |  |  |  |  | 3,902 |  | (4,381) |  | (479)
Panatlântica (3) |  | 146,946 |  | 2,625 |  | 149,571 |  |  |  |  |  |  |  | 239,675 |  |  |  |  |  |  |  | 239,675
Ibis Participações e Serviços |  |  |  |  |  |  |  | 370 |  |  |  | 370 |  |  |  | (2,502) |  |  |  |  |  | (2,502)
Partifib Projetos Imobiliários |  | 148 |  |  |  | 148 |  |  |  |  |  |  |  | 827 |  |  |  |  |  |  |  | 827
Vicunha Imóveis Ltda. |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (20) |  |  |  |  |  | (20)
Vicunha Serviços Ltda. |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (58) |  |  |  |  |  | (58)
|  | 328,642 |  | 115,596 |  | 444,238 |  | 649 |  | 28,004 |  | 28,653 |  | 240,502 |  | (3,163) |  | 3,902 |  | (4,381) |  | 236,860
Associates |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Arvedi Metalfer do Brasil S.A. |  | 5,330 |  | 49,985 |  | 55,315 |  | 1,978 |  |  |  | 1,978 |  | 8,879 |  |  |  | 767 |  |  |  | 9,646
Total at 03/31/2017 |  | 373,340 |  | 646,381 |  | 1,019,721 |  | 49,685 |  | 28,004 |  | 77,689 |  | 250,657 |  | (258,307) |  | 20,177 |  | (4,381) |  | 8,146
Total at 12/31/2016 |  | 488,603 |  | 631,834 |  | 1,120,437 |  | 61,550 |  | 28,004 |  | 89,554 |  | 878,992 |  | (1,099,851) |  | 57,779 |  | (18,398) |  | (181,478)
Total at 03/31/2016 (Adjusted) |  |  |  |  |  |  |  |  |  |  |  |  |  | 189,343 |  | (240,020) |  | 12,821 |  |  |  | (37,856)

1. Transnordestina Logística S.A: Assets: Refers mainly to loan agreements in R$: Interest from 102.0% to 115.0% of the CDI. As of March 31, 2017, the loans amounted to R$480,800 (R$459,762 as of December 31, 2016).

2. Banco Fibra S.A: Assets: Refers to financial investments in time deposits.

3. Panatlantica: Receivables from the sale of steel products.

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· By transaction

|  |  |  |  |  |  |  |  |  |  |  | Parent Company
|  | Current | Non-current | Total
|  | 03/31/2017 |  | 12/31/2016 |  | 03/31/2017 |  | 12/31/2016 |  | 03/31/2017 |  | 12/31/2016
Assets |  |  |  |  |  |  |  |  |  |  |  |
Trade receivables (1) (note 5) |  | 1,093,516 |  | 1,034,098 |  |  |  |  |  | 1,093,516 |  | 1,034,098
Dividends receivable (note 5) |  | 863,723 |  | 873,473 |  |  |  |  |  | 863,723 |  | 873,473
Actuarial asset (note 7) |  |  |  |  |  | 103,859 |  | 109,106 |  | 103,859 |  | 109,106
Empréstimos (note 7) |  | 27,993 |  | 25,602 |  | 394,085 |  | 375,716 |  | 422,078 |  | 401,318
Short-term investments / Investments (2) |  | 194,000 |  | 811,990 |  | 84,136 |  | 81,382 |  | 278,136 |  | 893,372
Other receivables(3) (note 7) |  | 21,060 |  | 132,384 |  | 308,605 |  | 311,414 |  | 329,665 |  | 443,798
|  | 2,200,292 |  | 2,877,547 |  | 890,685 |  | 877,618 |  | 3,090,977 |  | 3,755,165
Liabilities |  |  |  |  |  |  |  |  |  |  |  |
Borrowings and financing |  |  |  |  |  |  |  |  |  |  |  |
Prepayment (note 11) |  | 44,556 |  | 72,128 |  | 4,711,018 |  | 4,876,840 |  | 4,755,574 |  | 4,948,968
Intercompany bonds (note 11) |  | 69,658 |  | 27,044 |  | 3,291,367 |  | 3,385,587 |  | 3,361,025 |  | 3,412,631
Intercompany loans (note 11) |  | 152,591 |  | 149,654 |  | 2,644,400 |  | 2,719,420 |  | 2,796,991 |  | 2,869,074
|  | 266,805 |  | 248,826 |  | 10,646,785 |  | 10,981,847 |  | 10,913,590 |  | 11,230,673
Other payables (Note 15) |  |  |  |  |  |  |  |  |  |  |  |
Accounts payable (4) |  | 174,505 |  | 182,810 |  | 60,960 |  | 67,940 |  | 235,465 |  | 250,750
Exclusive funds (2) (note 13) |  | 26 |  | 121 |  |  |  |  |  | 26 |  | 121
Trade payables |  | 133,433 |  | 141,048 |  |  |  |  |  | 133,433 |  | 141,048
Actuarial liabilities |  |  |  |  |  | 28,004 |  | 28,004 |  | 28,004 |  | 28,004
|  | 307,964 |  | 323,979 |  | 88,964 |  | 95,944 |  | 396,928 |  | 419,923
|  | 03/31/2017 |  | 03/31/2016 |  |  |  |  |  |  |  |
Statement of income |  |  |  |  |  |  |  |  |  |  |  |
Revenues |  |  |  |  |  |  |  |  |  |  |  |
Sales/Others |  | 869,358 |  | 614,085 |  |  |  |  |  |  |  |
Interest (note 23) |  | 16,913 |  | 8,499 |  |  |  |  |  |  |  |
Exclusive funds (note 23) |  | 25,673 |  |  |  |  |  |  |  |  |  |
Expenses |  |  |  |  |  |  |  |  |  |  |  |
Purchases |  | (467,131) |  | (369,941) |  |  |  |  |  |  |  |
Interests (note 23) |  | (119,461) |  | (133,341) |  |  |  |  |  |  |  |
Foreing exchange and monetary variations, net |  | 283,731 |  | 1,085,469 |  |  |  |  |  |  |  |
Exclusive funds (note 23) |  |  |  | (644,709) |  |  |  |  |  |  |  |
|  | 609,083 |  | 560,062 |  |  |  |  |  |  |  |

1. Receivables from sales of goods and services between the parent company, subsidiaries and joint ventures.

2. Assets: Financial investments classified in current total R$ 194,000 as of March 31, 2017 (R$811,990 as of December 31, 2016) and investments in Usiminas shares classified as available-for-sale investments, in noncurrent, total R$ 84,138 (R$81,382 as of December 31, 2016).

3. Current: Refers mainly to pass through of administrative expenses amounting to R$9,296 (R$120,621 as of December 31, 2016).

Noncurrent: Refers mainly to advance for future capital increases, dividends receivable and receivables from acquisition of debentures.

4. Current: Refers mainly to commission and logistics expenses related to sales of steel for resale through its subsidiary CSN LLC.

Noncurrent: Refers mainly to assignment of credits from income tax and social contribution losses with Ferrovia Transnordestina Logistica)

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· By company

|  |  |  |  |  |  |  |  |  | Parent Company
|  | Assets |  | Liabilities |  | P&L
| Current |  | Non-current |  | Total |  | Current |  | Non-current |  | Total |  | Sales |  | Purchases |  | Finance income (expenses), net |  | foreign exchange and monetary variations, net |  | Total
Subsidiaries |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Companhia Metalúrgica Prada (1) |  | 228,892 |  | 121,336 |  | 350,228 |  | 10,892 |  | 196 |  | 11,088 |  | 162,124 |  | (14,290) |  |  |  |  |  | 147,834
Estanho de Rondônia S.A. |  | 5,941 |  | 1,766 |  | 7,707 |  | 1,376 |  |  |  | 1,376 |  | 117 |  | (5,494) |  | 114 |  |  |  | (5,263)
Sepetiba Tecon S.A. |  | 33,800 |  | 89,677 |  | 123,477 |  | 18,137 |  |  |  | 18,137 |  |  |  | (25,456) |  | 765 |  |  |  | (24,691)
Minérios Nacional S.A. |  |  |  | 5,850 |  | 5,850 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Csn Mineração S.A(2) |  | 983,307 |  |  |  | 983,307 |  | 56,565 |  |  |  | 56,565 |  | 27,772 |  | (230,496) |  |  |  |  |  | (202,724)
CSN Energia S.A. |  | 4,332 |  |  |  | 4,332 |  | 27,151 |  |  |  | 27,151 |  |  |  | (79,510) |  |  |  |  |  | (79,510)
Ferrovia Transnordestina Logística S.A. |  |  |  | 10,891 |  | 10,891 |  |  |  | 60,764 |  | 60,764 |  |  |  |  |  |  |  | (1,958) |  | (1,958)
Companhia Siderúrgica Nacional, LLC (3) |  | 439,962 |  |  |  | 439,962 |  | 171,424 |  |  |  | 171,424 |  | 247,281 |  | (5,538) |  |  |  | (14,981) |  | 226,762
CSN Europe Lda. |  |  |  |  |  |  |  | 13,196 |  | 97,331 |  | 110,527 |  |  |  |  |  | (272) |  | 2,786 |  | 2,514
CSN Resources S.A. (4) |  |  |  |  |  |  |  | 234,860 |  | 8,039,920 |  | 8,274,780 |  |  |  |  |  | (103,149) |  | 230,154 |  | 127,005
Lusosider Aços Planos, S.A. |  | 128,760 |  |  |  | 128,760 |  | 145 |  |  |  | 145 |  | 191,557 |  |  |  |  |  | (5,652) |  | 185,905
CSN Islands XI Corp. (5) |  |  |  |  |  |  |  |  |  | 1,013,888 |  | 1,013,888 |  |  |  |  |  |  |  | 29,024 |  | 29,024
CSN Islands XII Corp. (6) |  |  |  |  |  |  |  | 18,749 |  | 1,408,354 |  | 1,427,103 |  |  |  |  |  | (15,387) |  | 41,886 |  | 26,499
CSN Ibéria Lda. |  |  |  |  |  |  |  |  |  | 87,292 |  | 87,292 |  |  |  |  |  | (653) |  | 2,472 |  | 1,819
Companhia de Embalagens Metálicas MMSA | 5,404 |  | 44,859 |  | 50,263 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Companhia Florestal do Brasil |  |  |  | 2,581 |  | 2,581 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Stahlwerk Thüringen GmbH |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
CGPAR Construção Pesada S.A. |  | 5,219 |  |  |  | 5,219 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | 1,835,617 |  | 276,960 |  | 2,112,577 |  | 552,495 |  | 10,707,745 |  | 11,260,240 |  | 628,851 |  | (360,784) |  | (118,582) |  | 283,731 |  | 433,216
Joint-venture and Joint-operation |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
ITA Energética S.A |  | 2,040 |  |  |  | 2,040 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
MRS Logística S.A. |  | 18,742 |  |  |  | 18,742 |  | 12,198 |  |  |  | 12,198 |  |  |  | (81,940) |  |  |  |  |  | (81,940)
CBSI - Companhia Brasileira de Serviços e Infraestrutura |  | 723 |  |  |  | 723 |  | 9,535 |  |  |  | 9,535 |  | 5 |  | (21,448) |  |  |  |  |  | (21,443)
Transnordestina Logística S.A. |  | 247 |  | 373,120 |  | 373,367 |  |  |  |  |  |  |  |  |  |  |  | 12,073 |  |  |  | 12,073
|  | 21,752 |  | 373,120 |  | 394,872 |  | 21,733 |  |  |  | 21,733 |  | 5 |  | (103,388) |  | 12,073 |  |  |  | (91,310)
Other related parties |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
CBS Previdência |  |  |  | 103,859 |  | 103,859 |  |  |  | 28,004 |  | 28,004 |  |  |  |  |  |  |  |  |  |
Fundação CSN |  | 1,829 |  |  |  | 1,829 |  | 145 |  |  |  | 145 |  |  |  | (379) |  |  |  |  |  | (379)
Banco Fibra |  | 15 |  |  |  | 15 |  |  |  |  |  |  |  |  |  |  |  | 3,194 |  |  |  | 3,194
Panatlântica |  | 146,946 |  | 2,625 |  | 149,571 |  |  |  |  |  |  |  | 239,675 |  |  |  |  |  |  |  | 239,675
Ibis Participações e Serviços |  |  |  |  |  |  |  | 370 |  |  |  | 370 |  |  |  | (2,502) |  |  |  |  |  | (2,502)
Partifib Projetos Imobiliários |  | 148 |  |  |  | 148 |  |  |  |  |  |  |  | 827 |  |  |  |  |  |  |  | 827
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (20) |  |  |  |  |  | (20)
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (58) |  |  |  |  |  | (58)
|  | 148,938 |  | 106,484 |  | 255,422 |  | 515 |  | 28,004 |  | 28,519 |  | 240,502 |  | (2,959) |  | 3,194 |  |  |  | 240,737
Associates |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Arvedi Metalfer do Brasil S.A. |  |  |  | 49,985 |  | 49,985 |  |  |  |  |  |  |  |  |  |  |  | 767 |  |  |  | 767
Exclusive Funds |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Diplic II, Caixa Vertice and VR1 (7) |  | 193,985 |  | 84,136 |  | 278,121 |  | 26 |  |  |  | 26 |  |  |  |  |  | 25,673 |  |  |  | 25,673
Total at 03/31/2017 |  | 2,200,292 |  | 890,685 |  | 3,090,977 |  | 574,769 |  | 10,735,749 |  | 11,310,518 |  | 869,358 |  | (467,131) |  | (76,875) |  | 283,731 |  | 609,083
Total at 12/31/2016 |  | 2,877,547 |  | 877,618 |  | 3,755,165 |  | 572,805 |  | 11,077,791 |  | 11,650,596 |  |  |  |  |  |  |  |  |  |
Total at 03/31/2016 |  |  |  |  |  |  |  |  |  |  |  |  |  | 614,085 |  | (369,941) |  | (769,551) |  | 1,085,469 |  | 560,062

1. Companhia Metalúrgica Prada: Refers mainly to receivables in the amount of R$228,892 as of March 31, 2017, and debentures from the indirect subsidiary CBL in the amount of R$121,336.

2. CSN Mineração: Assets: Refers mainly to dividends declared by Namisa in the amount of R$694.080 assumed by CSN Mineração on the merger as of December 31, 2015, dividends for 2016 in the amount of R$149,690, and pass through of administrative expenses in the amount of R$139,098.

Liabilities: Payables from purchases of iron ore and port services.

3. Companhia Siderurgica Nacional, LLC: Receivables of R$439,962 as of March 31, 2017 (R$479,625 as of December 31, 2016), related to sale of steel for resale.

4. CSN Resources SA: Prepayment, Fixed Rate Notes and Intercompany Bonds contracts in dollar. As of March 31, 2017, the loans amounted to R$8,274,780 (R$8,495,912 as of December 31, 2016).

5. CSN Islands XI Corp.: Intercompany contracts in US dollars. As of March 31, 2017, loans total R$1,013,888 (R$1,042,912 as of December 31, 2016).

6. CSN Islands XII Corp.: Refers mainly to prepayment contracts and Intercompany contracts in dollar. As of March 31, 2017, loans total R$1,427,103 (R$1,489,631 as of December 31, 2016).

7. Exclusive funds: Current assets: Refers mainly to investments in government securities and CDBs, of which R$113.599 million in CDBs at Banco Fibra. Noncurrent assets: Refers to Usiminas S.A. shares. The funds VR1 and Diplic II are managed by Taquari Asset.

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17.b) Key management personnel

The key management personnel with authority and responsibility for planning, directing and controlling the Company’s activities, include the members of the Board of Directors and statutory directors. The following is information on the compensation of such personnel and the related balances as of March 31, 2017.

|  | 03/31/2017 |  | 03/31/2016
|  | Statement of Income
Short-term benefits for employees and officers (*) |  | 5,283 |  | 39,809
Post-employment benefits |  | 53 |  | 118
|  | 5,336 |  | 39,927

(*) The compensation of key management personnel in 2016 includes payments of contracts with executives that were linked to parameters that were achieved mainly in the first quarter of 2016.

18. SHAREHOLDERS’ EQUITY

18.a) Paid-in capital

Fully subscribed and paid-in capital as of March 31, 2017 and December 31, 2016 is R$4,540,000 comprising 1,387,524,047 book-entry common shares without par value. Each common share entitles to one vote in resolutions of the General Meeting.

18.b) Authorized capital

The Company’s bylaws in effect as of March 31, 2017 determine that the capital can be raised to up to 2,400,000,000 shares by decision of the Board of Directors.

18.c) Legal reserve

This reserve is recognized at the rate of 5% of the profit for each period, as provided for by Article 193 of Law 6,404/76, up to the ceiling of 20% of the share capital.

18.d) Ownership structure

As of March 31, 2017, the Company’s ownership structure was as follows:

|  |  |  |  |  | 3/31/2017 |  |  |  |  |  | 12/31/2016
|  | Number of common shares |  | % of total shares |  | % of voting capital |  | Number of common shares |  | % of total shares |  | % of voting capital
Vicunha Aços S.A. (*) |  | 682,855,454 |  | 49.21% |  | 50.32% |  | 682,855,454 |  | 49.21% |  | 50.32%
Rio Iaco Participações S.A. (*) |  | 58,193,503 |  | 4.19% |  | 4.29% |  | 58,193,503 |  | 4.19% |  | 4.29%
CFL Participações S.A. (*) |  | 3,977,536 |  | 0.29% |  | 0.29% |  | 3,977,536 |  | 0.29% |  | 0.29%
Vicunha Textil S.A. (*) |  | 4,927,000 |  | 0.36% |  | 0.36% |  | 4,927,000 |  | 0.36% |  | 0.36%
Caixa Beneficente dos Empregados da CSN - CBS |  | 20,143,031 |  | 1.45% |  | 1.48% |  | 20,143,031 |  | 1.45% |  | 1.48%
BNDES Participações S.A. - BNDESPAR |  | 8,794,890 |  | 0.63% |  | 0.65% |  | 8,794,890 |  | 0.63% |  | 0.65%
NYSE (ADRs) |  | 323,546,664 |  | 23.32% |  | 23.84% |  | 323,546,664 |  | 23.32% |  | 23.84%
B3 - Brasil, Bolsa, Balcão |  | 254,694,969 |  | 18.36% |  | 18.77% |  | 254,694,969 |  | 18.36% |  | 18.77%
|  | 1,357,133,047 |  | 97.81% |  | 100.00% |  | 1,357,133,047 |  | 97.81% |  | 100.00%
Treasury shares |  | 30,391,000 |  | 2.19% |  |  |  | 30,391,000 |  | 2.19% |  |
Total shares |  | 1,387,524,047 |  | 100.00% |  |  |  | 1,387,524,047 |  | 100.00% |  |

(*) Controlling group companies.

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18.e) Treasury shares

The Board of Directors authorized various share buyback programs in order to hold shares in treasury for subsequent disposal and/or cancelation with a view to maximizing the generation of value to the shareholder through an efficient capital structure management, as shown in the table below:

Program |  | Board’s Authorization |  | Authorized quantity |  | Program period |  | Average buyback price |  | Minimum and maximum buyback price |  | Number bought back |  | Share cancelation |  |  | Balance in treasury
1º |  | 3/13/2014 |  | 70,205,661 |  | From 3/14/2014 to 4/14/2014 |  | R$ 9.34 |  | R$ 9.22 and R$ 9,45 |  | 2,350,000 |  |  |  |  | 2,350,000
2º |  | 4/15/2014 |  | 67,855,661 |  | From 4/16/2014 to 5/23/2014 |  | R$ 8.97 |  | R$ 8.70 and R$ 9.48 |  | 9,529,500 |  |  |  |  | 11,879,500
3º |  | 5/23/2014 |  | 58,326,161 |  | From 5/26/2014 to 6/25/2014 |  | R$ 9.21 |  | R$ 8.61 and R$ 9.72 |  | 31,544,500 |  |  |  |  | 43,424,000
4º |  | 6/26/2014 |  | 26,781,661 |  | From 6/26/2014 to 7/17/2014 |  | R$ 10.42 |  | R$ 9.33 and R$ 11.54 |  | 26,781,661 |  |  |  |  | 70,205,661
|  | 7/18/2014 |  |  |  |  |  | Not applicable |  | Not applicable |  |  |  | 60,000,000 |  |  | 10,205,661
5º |  | 7/18/2014 |  | 64,205,661 |  | From 7/18/2014 to 8/18/2014 |  | R$ 11.40 |  | R$ 11.40 |  | 240,400 |  |  |  |  | 10,446,061
|  | 8/19/2014 |  |  |  |  |  | Not applicable |  | Not applicable |  |  |  | 10,446,061 |  |  |
6º |  | 8/19/2014 |  | 63,161,055 |  | From 8/19/2014 to 9/25/2014 |  | R$ 9.82 |  | R$ 9.47 and R$ 10.07 |  | 6,791,300 |  |  |  |  | 6,791,300
7º |  | 9/29/2014 |  | 56,369,755 |  | From 9/29/2014 to 12/29/2014 |  | R$ 7.49 |  | R$ 4.48 and R$ 9.16 |  | 21,758,600 |  |  |  |  | 28,549,900
8º |  | 12/30/2014 |  | 34,611,155 |  | From 12/31/2014 to 3/31/2015 |  | R$ 5.10 |  | R$ 4.90 and R$ 5.39 |  | 1,841,100 |  |  |  |  | 30,391,000
9º (*) |  | 3/31/2015 |  | 32,770,055 |  | From 4/01/2015 to 6/30/2015 |  |  |  |  |  |  |  |  |  |  |

(*) There was no share buyback in this program.

As of March 31, 2017, the position of the treasury shares was as follows:

Quantity purchased (in units) |  | Amount |  | Share price |  | Share
| paid for |  |  |  |  |  |  |  | market price
| the shares |  | Minimum |  | Maximum |  | Average |  | as of 3/31/2017 (*)
30,391,000 |  | R$ 238,976 |  | R$ 4.48 |  | R$ 10.07 |  | R$ 7.86 |  | R$279,901

(*) The last share average quotation on B3 - Brasil, Bolsa, Balcão as of March 31, 2017 of R$ 9.21 per share was used.

18.f) Policy on investments and payment of interest on capital and dividends

At a meeting held on December 11, 2000, the Board of Directors decided to adopt a profit distribution policy which, in compliance with the provisions in Law 6,404/76, as amended by Law 9,457/97, will entail the distribution of all the profit to the Company’s shareholders, provided that the following priorities are observed, irrespective of their order: (i) carrying out the business strategy; (ii) fulfilling its obligations; (iii) making the required investments; and (iv) maintaining a healthy financial situation of the Company.

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18.g) Earnings/(loss) per share:

Basic earnings/(loss) per share were calculated based on the profit/loss attributable to the owners of CSN divided by the weighted average number of common shares outstanding during the year, excluding the common shares purchased and held as treasury shares, as follows:

|  |  | Parent Company
| 03/31/2017 |  | 03/31/2016 Adjusted
| Common Shares
(Loss) profit for the year |  |  |
Continued operations | 85,630 |  | (785,524)
Discontinued operations | - |  | 333
| 85,630 |  | (785,191)
Weighted average number of shares | 1,357,133,047 |  | 1,357,133,047
Basic and diluted EPS |  |  |
Continued operations | 0.06310 |  | (0.57881)
Discontinued operations | - |  | 0.00025
| 0.06310 |  | (0.57856)

19. PAYMENT TO SHAREHOLDERS

The following table shows the history of dividends approved and paid:

Year |  | Approval Year |  | Dividends |  | Total |  | Year |  | Payment Year |  | Dividends |  | Total
2014 |  | 2014 |  | 700,000 |  | 700,000 |  | 2014 |  | 2014 |  | 424,939 |  | 424,939
2015 |  | 2015 |  | 275,000 |  | 275,000 |  |  |  | 2015 |  | 274,917 |  | 274,917
|  |  |  |  |  |  |  | 2015 |  | 2015 |  | 274,918 |  | 274,918
|  |  |  |  |  |  |  |  |  | 2016 |  | 53 |  |
Total approved |  | 975,000 |  | 975,000 |  | Total Paid |  | 974,827 |  | 974,774

20. NET SALES REVENUE

Net sales revenue is comprised as follows:

|  |  |  | Consolidated |  |  |  | Parent Company
|  | 03/31/2017 |  | 03/31/2016 |  | 03/31/2017 |  | 03/31/2016
Gross revenue |  |  |  |  |  |  |  |
Domestic market |  | 2,623,699 |  | 2,269,496 |  | 2,406,405 |  | 2,099,540
Foreign market |  | 2,463,249 |  | 2,342,378 |  | 672,987 |  | 420,381
|  | 5,086,948 |  | 4,611,874 |  | 3,079,392 |  | 2,519,921
Deductions |  |  |  |  |  |  |  |
Sales returns and discounts |  | (43,752) |  | (67,466) |  | (40,644) |  | (61,057)
Taxes on sales |  | (631,600) |  | (547,122) |  | (552,532) |  | (481,224)
|  | (675,352) |  | (614,588) |  | (593,176) |  | (542,281)
Net revenue |  | 4,411,596 |  | 3,997,286 |  | 2,486,216 |  | 1,977,640

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21. EXPENSES BY NATURE

|  |  |  | Consolidated |  | Parent Company
|  | 03/31/2017 |  | 03/31/2016 Adjusted |  | 03/31/2017 |  | 03/31/2016
Raw materials and inputs |  | (1,209,878) |  | (1,168,753) |  | (1,078,571) |  | (783,472)
Labor cost |  | (553,269) |  | (622,934) |  | (285,008) |  | (353,700)
Supplies |  | (328,309) |  | (329,382) |  | (238,154) |  | (227,809)
Maintenance cost (services and materials) |  | (255,091) |  | (291,448) |  | (149,334) |  | (169,104)
Outsourcing services |  | (738,760) |  | (790,656) |  | (254,617) |  | (235,355)
Depreciation, Amortization and Depletion |  | (389,884) |  | (308,595) |  | (170,254) |  | (135,525)
Others |  | (106,534) |  | (171,342) |  | (7,479) |  | (25,324)
|  | (3,581,725) |  | (3,683,110) |  | (2,183,417) |  | (1,930,289)
Classified as: |  |  |  |  |  |  |  |
Cost of sales |  | (3,093,474) |  | (3,073,661) |  | (1,959,313) |  | (1,638,396)
Selling expenses |  | (369,792) |  | (449,390) |  | (163,525) |  | (168,633)
General and administrative expenses |  | (118,459) |  | (160,059) |  | (60,579) |  | (123,260)
|  | (3,581,725) |  | (3,683,110) |  | (2,183,417) |  | (1,930,289)

Additions to depreciation, amortization and depletion for the period were distributed as follows:

|  | Consolidated |  | Parent Company
|  | 3/31/2017 |  | 3/31/2016 Adjusted |  | 3/31/2017 |  | 3/31/2016
Production cost |  | 381,606 |  | 302,729 |  | 163,982 |  | 131,468
Selling expenses |  | 2,217 |  | 2,215 |  | 1,851 |  | 1,810
General and administrative expenses |  | 6,061 |  | 3,651 |  | 4,421 |  | 2,247
|  | 389,884 |  | 308,595 |  | 170,254 |  | 135,525
Other operational (*) |  | 11,392 |  | 12,108 |  |  |  |
|  | 401,276 |  | 320,703 |  | 170,254 |  | 135,525

(*) Refers to the amortization of intangible assets as described in note 22.

22. OTHER OPERATING INCOME (EXPENSES)

|  |  |  | Consolidated |  |  |  | Parent Company
|  | 3/31/2017 |  | 3/31/2016 |  | 3/31/2017 |  | 3/31/2016
|  |  | Adjusted |  |  | Adjusted
Other operating income |  |  |  |  |  |  |  |
Indemnities/gains on lawsuits |  | 679 |  | 18,676 |  | 530 |  | 1,888
Rentals and leases |  | 459 |  | 328 |  | 369 |  | 328
Contractual fines |  | 348 |  | 299 |  | 152 |  | 283
Other revenues |  | 5,013 |  | 2,969 |  | 2,531 |  | 341
|  | 6,499 |  | 22,272 |  | 3,582 |  | 2,840
Other operating expenses |  |  |  |  |  |  |  |
Taxes and fees |  | (1,481) |  | (10,762) |  | (719) |  | (696)
Write-off/(Provision) of judicial deposits |  | 3,276 |  | (17,281) |  | 3,042 |  | (17,281)
Reversion /(Provision) for environmental risks |  | 3,350 |  | (1,142) |  | 4,856 |  | (337)
Expenses from tax, social security, labor, civil and environmental law suits | (38,353) |  | (40,640) |  | (30,021) |  | (45,436)
Contractual fines |  |  |  |  |  |  |  |
Depreciation of unused equipment and amortization of intangible assets | (11,392) |  | (12,108) |  |  |  |
Write-off /reversals of fixed assets and intangibles (notes 9 and 10) |  | (2,572) |  | (12,966) |  | (2,742) |  | (7,590)
(Losses) /reversals estimated in inventories |  | (4,091) |  | 14,623 |  | 1,095 |  | (2,478)
Losses on spare parts |  | (1,250) |  | (6,579) |  | (1,250) |  | (187)
Studies and project engineering expenses |  | (8,180) |  | (5,731) |  | (8,196) |  | (5,571)
Research and development expenses |  | (676) |  | (575) |  | (676) |  | (575)
Advisory expenses |  | (16) |  | (2,565) |  | (16) |  | (2,563)
Healthcare plan expenses |  | (22,086) |  | (19,089) |  | (21,944) |  | (19,090)
Realized cash flow hedge (note 12 b) |  | (16,402) |  | (12,697) |  | (16,402) |  | (12,697)
Other expenses |  | (5,815) |  | (33,583) |  | (2,899) |  | (738)
|  | (105,688) |  | (161,095) |  | (75,872) |  | (115,239)
Other operating income (expenses), net |  | (99,189) |  | (138,823) |  | (72,290) |  | (112,399)

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23. FINANCIAL INCOME (EXPENSES)

|  |  |  | Consolidated |  |  |  | Parent Company
|  | 3/31/2017 |  | 3/31/2016 |  | 3/31/2017 |  | 3/31/2016
|  |  | Adjusted |  |  | Adjusted
Financial income |  |  |  |  |  |  |  |
Related parties (note 17 a) |  | 20,177 |  | 12,913 |  | 42,586 |  | 8,499
Income from short-term investments |  | 53,578 |  | 55,915 |  | 25,070 |  | 3,863
Gain from derivative |  | 13,224 |  |  |  |  |  |
Gain on repurchase of debt securities |  | 12,564 |  | 143,777 |  |  |  |
Other income |  | 16,976 |  | 30,015 |  | 14,072 |  | 6,067
|  | 116,519 |  | 242,620 |  | 81,728 |  | 18,429
Financial expenses |  |  |  |  |  |  |  |
Borrowings and financing - foreign currency |  | (214,097) |  | (257,833) |  | (55,275) |  | (60,079)
Borrowings and financing - local currency |  | (511,998) |  | (547,475) |  | (440,272) |  | (470,263)
Related parties (note 17 a) |  |  |  | (92) |  | (119,461) |  | (778,050)
Capitalized interest (notes 09 and 27) |  | 26,533 |  | 57,661 |  | 6,534 |  | 32,730
Losses on derivatives |  |  |  | (362) |  |  |  |
Interest, fines and late payment charges |  | (2,791) |  | (6,014) |  | (244) |  | (2,633)
PIS/COFINS over financial income |  | (38,875) |  | (22,877) |  | (34,496) |  | (20,858)
Other financial expenses |  | (6,458) |  | (12,730) |  | (5,191) |  | (7,317)
|  | (38,801) |  | (32,019) |  | (32,683) |  | (22,961)
Foreign exchange and monetary variation, net |  | (786,487) |  | (821,741) |  | (681,088) |  | (1,329,431)
Monetary variation, net |  | 1,364 |  | (1,137) |  | (5,101) |  | (5,780)
Exchange variation, net |  | 171,609 |  | 384,341 |  | 312,278 |  | 1,061,601
Exchange variation on derivatives |  | (229) |  | (688,682) |  |  |  |
Financial income (expenses), net |  | 172,744 |  | (305,478) |  | 307,177 |  | 1,055,821
Financial income (costs), net |  | (497,224) |  | (884,599) |  | (292,183) |  | (255,181)
Statement of gains and (losses) on derivative transactions (note 12b) |  |  |  |  |  |
Dollar-to-euro swap |  | (229) |  | (7,506) |  |  |  |
Future Dollar BM&F |  |  |  | (681,176) |  |  |  |
|  | (229) |  | (688,682) |  |  |  |
Swap Pré x CDI |  |  |  | (299) |  |  |  |
Swap CDI x Pré |  |  |  | (63) |  |  |  |
DI Future |  | 13,224 |  |  |  |  |  |
|  | 13,224 |  | (362) |  |  |  |
|  | 12,995 |  | (689,044) |  |  |  |

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24. SEGMENT INFORMATION

The segment information has not changed in relation to that disclosed in the Company's financial statements as of December 31, 2016. Therefore, management decided not to repeat it in this condensed interim financial information.

According to the Group´s structure, the businesses are distributed and managed in five operating segments as follows:

|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 03/31/2017
P&L |  | Steel |  | Mining |  | Logistics |  | Energy |  | Cement |  | Corporate expenses/elimination |  | Consolidated
|  |  | Port |  | Railroads |  |  |  |
Metric tons (Thou.) - (Unaudited) (*) |  | 1,194,246 |  | 7,243,854 |  |  |  |  |  |  |  | 821,231 |  | (1,346,967) |  |
Net revenues |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Domestic market |  | 1,788,518 |  | 190,311 |  | 55,215 |  | 323,390 |  | 90,163 |  | 125,651 |  | (583,696) |  | 1,989,552
Foreign market |  | 1,282,689 |  | 983,794 |  |  |  |  |  |  |  |  |  | 155,561 |  | 2,422,044
Total net revenue (note 20) |  | 3,071,207 |  | 1,174,105 |  | 55,215 |  | 323,390 |  | 90,163 |  | 125,651 |  | (428,135) |  | 4,411,596
Cost of sales and services |  | (2,394,558) |  | (636,455) |  | (37,194) |  | (280,072) |  | (69,139) |  | (129,685) |  | 453,629 |  | (3,093,474)
Gross profit |  | 676,649 |  | 537,650 |  | 18,021 |  | 43,318 |  | 21,024 |  | (4,034) |  | 25,494 |  | 1,318,122
General and administrative expenses |  | (235,504) |  | (40,384) |  | (7,093) |  | (24,362) |  | (6,643) |  | (18,480) |  | (155,785) |  | (488,251)
Depreciation |  | 169,042 |  | 122,651 |  | 3,460 |  | 103,625 |  | 4,317 |  | 34,650 |  | (47,861) |  | 389,884
Proportionate EBITDA of joint ventures |  |  |  |  |  |  |  |  |  |  |  |  |  | 112,792 |  | 112,792
Adjusted EBITDA |  | 610,187 |  | 619,917 |  | 14,388 |  | 122,581 |  | 18,698 |  | 12,136 |  | (65,360) |  | 1,332,547
Sales by geographic area |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Asia |  | 4,055 |  | 913,827 |  |  |  |  |  |  |  |  |  | 155,561 |  | 1,073,443
North America |  | 480,624 |  |  |  |  |  |  |  |  |  |  |  |  |  | 480,624
Latin America |  | 150,614 |  |  |  |  |  |  |  |  |  |  |  |  |  | 150,614
Europe |  | 633,917 |  | 69,967 |  |  |  |  |  |  |  |  |  |  |  | 703,884
Others |  | 13,479 |  |  |  |  |  |  |  |  |  |  |  |  |  | 13,479
Foreign market |  | 1,282,689 |  | 983,794 |  |  |  |  |  |  |  |  |  | 155,561 |  | 2,422,044
Domestic market |  | 1,788,518 |  | 190,311 |  | 55,215 |  | 323,390 |  | 90,163 |  | 125,651 |  | (583,696) |  | 1,989,552
Total |  | 3,071,207 |  | 1,174,105 |  | 55,215 |  | 323,390 |  | 90,163 |  | 125,651 |  | (428,135) |  | 4,411,596

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|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 03/31/2016 (Adjusted)
P&L |  | Steel |  | Mining |  | Logistics |  | Energy |  | Cement |  | Corporate expenses/elimination |  | Consolidated
|  |  | Port |  | Railroads |  |  |  |
Metric tons (Thou.) - (Unaudited) (*) |  | 1,246,135 |  | 8,295,093 |  |  |  |  |  |  |  | 571,436 |  | (1,046,725) |  |
Net revenues |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Domestic market |  | 1,500,366 |  | 151,073 |  | 50,423 |  | 303,141 |  | 68,149 |  | 114,204 |  | (486,063) |  | 1,701,293
Foreign market |  | 1,308,774 |  | 790,483 |  |  |  |  |  |  |  |  |  | 196,736 |  | 2,295,993
Total net revenue (note 20) |  | 2,809,140 |  | 941,556 |  | 50,423 |  | 303,141 |  | 68,149 |  | 114,204 |  | (289,327) |  | 3,997,286
Cost of sales and services |  | (2,299,907) |  | (749,385) |  | (36,040) |  | (214,370) |  | (51,113) |  | (101,191) |  | 378,345 |  | (3,073,661)
Gross profit |  | 509,233 |  | 192,171 |  | 14,383 |  | 88,771 |  | 17,036 |  | 13,013 |  | 89,018 |  | 923,625
General and administrative expenses |  | (255,318) |  | (23,755) |  | (8,278) |  | (23,881) |  | (5,946) |  | (17,657) |  | (274,614) |  | (609,449)
Depreciation |  | 166,229 |  | 114,434 |  | 3,293 |  | 55,695 |  | 4,279 |  | 12,812 |  | (48,147) |  | 308,595
Proportionate EBITDA of joint ventures |  |  |  |  |  |  |  |  |  |  |  |  |  | 109,893 |  | 109,893
Adjusted EBITDA |  | 420,144 |  | 282,850 |  | 9,398 |  | 120,585 |  | 15,369 |  | 8,168 |  | (123,850) |  | 732,664
Sales by geographic area |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Asia |  | 4,669 |  | 665,871 |  |  |  |  |  |  |  |  |  | 196,736 |  | 867,276
North America |  | 581,176 |  |  |  |  |  |  |  |  |  |  |  |  |  | 581,176
Latin America |  | 66,044 |  |  |  |  |  |  |  |  |  |  |  |  |  | 66,044
Europe |  | 651,959 |  | 64,963 |  |  |  |  |  |  |  |  |  |  |  | 716,922
Others |  | 4,926 |  | 59,649 |  |  |  |  |  |  |  |  |  |  |  | 64,575
Foreign market |  | 1,308,774 |  | 790,483 |  |  |  |  |  |  |  |  |  | 196,736 |  | 2,295,993
Domestic market |  | 1,500,366 |  | 151,073 |  | 50,423 |  | 303,141 |  | 68,149 |  | 114,204 |  | (486,063) |  | 1,701,293
Total |  | 2,809,140 |  | 941,556 |  | 50,423 |  | 303,141 |  | 68,149 |  | 114,204 |  | (289,327) |  | 3,997,286

(*) The ore sales volumes presented in this note take into consideration Company sales and the interest in its subsidiaries and joint ventures.

· Adjusted EBITDA

Adjusted EBITDA is the measurement through which the chief operating decision maker assesses the segment performance and the capacity to generate recurring operating cash, consisting of profit for the year less net financial income (expenses), income tax and social contribution, depreciation and amortization, equity in results, results of discontinued operations and other operating income (expenses), plus the proportionate EBITDA of joint ventures.

Even though it is an indicator used in segment measurement, EBITDA is not a measurement recognized by accounting practices adopted in Brazil or IFRS, it does not have a standard definition, and may not be comparable with measurements using similar names provided by other companies.

As required by IFRS 8, the table below shows the reconciliation of the measurement used by the chief operating decision maker with the results determined using the accounting practices:

|  |  |  | Consolidated
|  | 03/31/2017 |  | 03/31/2016 Adjusted
Net income (loss) for the year |  | 117,615 |  | (776,697)
Results from discontinued operations |  | - |  | (333)
Depreciation |  | 389,884 |  | 308,595
Income tax and social contribution (note 14) |  | 136,948 |  | 113,408
Financial income (expenses) (note 23) |  | 497,224 |  | 884,599
EBITDA |  | 1,141,671 |  | 529,572
Other operating income (expenses) (note 22) |  | 99,189 |  | 138,823
Equity in results of affiliated companies |  | (21,105) |  | (45,624)
Proportionate EBITDA of joint ventures |  | 112,792 |  | 109,893
Adjusted EBITDA (*) |  | 1,332,547 |  | 732,664

(*) The Company discloses its adjusted EBITDA net of its share of investments and other operating income (expenses) because it understands that these should not be considered in the calculation of recurring operating cash generation.

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25. GUARANTEES

The Company is liable for guarantees of its subsidiaries and joint ventures as follows:

| Currency |  | Maturities |  | Borrowings | Tax foreclosure | Others | Total
|  |  |  |  | 03/31/2017 |  | 12/31/2016 |  | 03/31/2017 |  | 12/31/2016 |  | 03/31/2017 |  | 12/31/2016 |  | 03/31/2017 |  | 12/31/2016
Transnordestina Logísitca | R$ |  | Up to 09/19/2056 and Indefinite |  | 2,547,937 |  | 2,547,937 |  | 23,007 |  | 23,007 |  | 4,866 |  | 4,866 |  | 2,575,810 |  | 2,575,810
FTL - Ferrovia Transnordestina | R$ |  | 11/15/2020 |  | 79,855 |  | 76,700 |  |  |  |  |  |  |  |  |  | 79,855 |  | 76,700
Sepetiba Tecon | R$ |  | Indefinite |  |  |  |  |  |  |  |  |  | 28,914 |  | 28,914 |  | 28,914 |  | 28,914
Cia Metalurgica Prada | R$ |  | Indefinite |  |  |  |  |  | 333 |  | 333 |  | 19,340 |  | 19,340 |  | 19,673 |  | 19,673
CSN Energia | R$ |  | Indefinite |  |  |  |  |  | 2,829 |  | 2,829 |  |  |  |  |  | 2,829 |  | 2,829
CSN Mineração | R$ |  | 09/22/2022 |  | 2,000,000 |  | 2,000,000 |  |  |  |  |  | 2,520 |  | 2,520 |  | 2,002,520 |  | 2,002,520
Total in R$ |  |  |  |  | 4,627,792 |  | 4,624,637 |  | 26,169 |  | 26,169 |  | 55,640 |  | 55,640 |  | 4,709,601 |  | 4,706,446
CSN Islands XI | US$ |  | 09/21/2019 |  | 750,000 |  | 750,000 |  |  |  |  |  |  |  |  |  | 750,000 |  | 750,000
CSN Islands XII | US$ |  | Perpetual |  | 1,000,000 |  | 1,000,000 |  |  |  |  |  |  |  |  |  | 1,000,000 |  | 1,000,000
CSN Resources | US$ |  | 07/21/2020 |  | 1,200,000 |  | 1,200,000 |  |  |  |  |  |  |  |  |  | 1,200,000 |  | 1,200,000
Total in US$ |  |  |  |  | 2,950,000 |  | 2,950,000 |  |  |  |  |  |  |  |  |  | 2,950,000 |  | 2,950,000
CSN Steel S.L. | EUR |  | 1/31/2020 |  | 120,000 |  | 120,000 |  |  |  |  |  |  |  |  |  | 120,000 |  | 120,000
Lusosider Aços Planos | EUR |  | Indefinite |  | 25,000 |  | 25,000 |  |  |  |  |  |  |  |  |  | 25,000 |  | 25,000
Total in EUR |  |  |  |  | 145,000 |  | 145,000 |  |  |  |  |  |  |  |  |  | 145,000 |  | 145,000
Total in R$ |  |  |  |  | 9,838,272 |  | 12,135,468 |  |  |  |  |  |  |  |  |  | 9,838,272 |  | 12,135,468
|  |  |  |  | 14,466,064 |  | 16,760,105 |  | 26,169 |  | 26,169 |  | 55,640 |  | 55,640 |  | 14,547,873 |  | 16,841,914

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26. INSURANCE

Aiming to properly mitigate risk and in view of the nature of its operations, the Company and its subsidiaries have taken out several different types of insurance policies. Such policies are contracted in line with the Risk Management policy and are similar to the insurance taken out by other companies operating in the same lines of business as CSN and its subsidiaries. The risks covered under such policies include the following: Domestic Transportation, International Transportation, Life and Casualty, Health, Vehicles Fleet, D&O (Civil Liability Insurance for Directors and Officers), General Civil Liability, Engineering Risks, Named Peril, Export Credit, Surety Bond and Port Operator’s Civil Liability.

In 2016, after negotiation with insurers and reinsurers in Brazil and abroad, an insurance policy was issued for the contracting of a policy of Operational Risk of Property Damages and Loss of Profits, with effect from October 30, 2016 to September 30, 2017. Under the insurance policy, the LMI (Maximum Limit of Indemnity) is US$600 million and covers the following Company’s units and subsidiaries: Presidente Vargas Steelworks, CSN Mineração, Sepetiba Tecon and CSN Mining. CSN is liable for the first range of retention of US$375 million in excess of the deductibles for property damages and loss of profits.

As of September 30, 2017, after negotiations the policies were renewed until March 31, 2018.

In view of their nature, the risk assumptions adopted are not part of the scope of an audit of the financial statements and, accordingly, were not audited by our independent auditors.

27. ADDITIONAL INFORMATION TO CASH FLOWS

The following table provides additional information on transactions related to the statement of cash flows:

|  |  | Consolidated |  |  |  | Parent Company
| 03/31/2017 |  | 12/31/2016 |  | 03/31/2017 |  | 12/31/2016
Income tax and social contribution paid | 126,753 |  | 456,227 |  |  |  |
Addition to PP&E with interest capitalization | 26,533 |  | 215,794 |  | 6,534 |  | 127,675
Capital increase with no cash effect |  |  | 7,437 |  |  |  |
Capitalization with advance to future capital increase |  |  |  |  | 9,844 |  |
Borrowings granted to capitalize subsidiaries | 509 |  |  |  | 509 |  | 52,419
| 153,795 |  | 679,458 |  | 16,887 |  | 180,094

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28. STATEMENT OF COMPREHENSIVE INCOME

|  |  |  | Consolidated |  |  |  | Parenty Company
|  | 03/31/2017 |  | 03/31/2016 |  | 03/31/2017 |  | 03/31/2016
Profit (loss) for the period |  | 117,615 |  | (776,697) |  | 85,630 |  | (785,191)
Other comprehensive income |  |  |  |  |  |  |  |
Items that will not be subsequently reclassified to the statement of income |  |  |  |  |  |  |  |
Actuarial of the defined benefit plan from investments in subsidiaries, net of taxes |  | 30 |  | 85 |  | 30 |  | 85
|  | 30 |  | 85 |  | 30 |  | 85
Items that could be subsequently reclassified to the statement of income |  |  |  |  |  |  |  |
Cumulative translation adjustments for the period |  | (39,643) |  | (181,111) |  | (39,643) |  | (181,111)
Assests avaible for sale |  | 53,299 |  | 32,353 |  | 53,299 |  | 32,353
(Loss)/gain on the percentage change in investments |  | 2,814 |  |  |  | 2,814 |  |
(Loss)/gain on cash flow hedge accounting |  | 133,044 |  | 534,423 |  | 133,044 |  | 534,423
Realization on cash flow hedge accounting reclassified to income statements |  | 16,402 |  | 12,697 |  | 16,402 |  | 12,697
(Loss)/gain on investments hedge of investment in subsidiaries |  |  |  |  |  | 1,846 |  | 18,864
(Loss)/gain on foreingn investment hedge |  | 1,846 |  | 18,864 |  |  |  |
|  | 167,762 |  | 417,226 |  | 167,762 |  | 417,226
|  | 167,792 |  | 417,311 |  | 167,792 |  | 417,311
Total comprehensive income for the period |  | 285,407 |  | (359,386) |  | 253,422 |  | (367,880)
Attributable to: |  |  |  |  |  |  |  |
Participation of controlling interest |  | 253,422 |  | (367,880) |  | 253,422 |  | (367,880)
Participation of non-controlling interest |  | 31,985 |  | 8,494 |  |  |  |
|  | 285,407 |  | (359,386) |  | 253,422 |  | (367,880)

29. INDEPENDENT INVESTIGATION – CONSTRUCTION OF THE LONG STEEL PLANT

Considering the information from a Company’s officer published in the press in April 2017, based on testimonials made before the Court, the Audit Committee decided to hire a specialized forensic service to conduct an independent external investigation of the contractual relationship related to the construction of CSN’s Long Steel Plant (contract in which there would have been alleged undue payments, as bonus, as a form of reimbursement for payments made to political parties), and to analyze the extent of the business relationships between the contracting parties. The conclusion of the investigation is that nothing from the testimonials referred to above was confirmed, and there are no contingencies deriving from the matters investigated. Consequently, the Company understands that there is no basis to justify the setting up of a provision for losses or the disclosure of a contingency. In October 2017, complying with a determination of the Supreme Federal Court, the Federal Police started an investigation of the facts reported in those testimonials previously mentioned. To date, nothing has been found out in such investigation.

30. EVENTS AFTER THE REPORTING PERIOD

· Environmental notice to suspend the operations of Presidente Vargas Plant (UPV)

On December 1, 2017, the Company received an environmental notice from the INEA (State Institute of Environment) to suspend the operations of the Presidente Vargas Plant, in Volta Redonda, State of Rio de Janeiro, from December 10, 2017. The reason stated by INEA was an alleged non-observance and non-compliance by the Company with the Conduct Adjustment Agreement (TAC) signed with the environmental authorities of the State of Rio de Janeiro. On December 7, 2017, the Company obtained a preliminary authorization to continue with its activities of the UPV for a 180-day term and, during this period, a definitive solution for this matter will be discussed between the Company and the environmental authorities.

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(Free translation from the original issued in Portuguese. In the event of any discrepancies, the Portuguese language version shall prevail.)

Independent auditor’s report on review of the interim financial information

To:

Companhia Siderúrgica Nacional

São Paulo – SP

We have reviewed the accompanying individual and consolidated interim financial information of Companhia Siderúrgica Nacional (“Company”), identified as Parent and Consolidated, respectively, included in the Interim Financial Information Form (ITR) for the quarter ended March 31, 2017, which comprises the balance sheet as at March 31, 2017 and the related income statement and statement of comprehensive income for the quarter and three-month periods then ended, and the statement of changes in equity and statement of cash flows for the three-month period then ended, including a summary of significant accounting policies and other explanatory notes

Management is responsible for the preparation of the individual and consolidated interim financial information in accordance with Technical Pronouncement CPC 21 (R1) - Interim Financial Reporting and IAS 34 - Interim Financial Reporting, issued by the International Accounting Standards Board (IASB), as well as for the presentation of such information in accordance with the standards issued by the Brazilian Securities Commission (CVM) applicable to the preparation of Interim Financial Information (ITR). Our responsibility is to express a conclusion on this interim financial information based on our review.

Scope of review

We conducted our review in accordance with Brazilian and international standards on review of interim financial information (NBC TR 2410 - Review of Interim Financial Information Performed by the Independent Auditor of the Entity and ISRE 2410 - Review of Interim Financial Information Performed by the Independent Auditor of the Entity, respectively). A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with the standards on auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion on the individual and consolidated interim financial information

Based on our review, nothing has come to our attention that causes us to believe that the accompanying individual and consolidated interim financial information included in the Interim Financial Information Form (ITR) referred to above is not prepared, in all material respects, in accordance with CPC 21 (R1) and IAS 34 applicable to the preparation of interim financial information and presented in accordance with the standards issued by the Brazilian Securities and Exchange Commission (CVM).

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Emphasis of matter

Ability of the jointly-controlled subsidiary Transnordestina Logística S.A. to continue as a going concern

We draw attention to note 8.c) to the interim financial information, which describes the stage of completion of the new railway network by the jointly-controlled subsidiary Transnordestina Logística S.A. (TLSA), currently under construction and originally scheduled to be completed by January 2017. The construction time frame is being reviewed and discussed by the relevant government bodies. The completion of the works under the project (and the consequent start of operations) is contingent upon receiving ongoing financial contribution from TLSA´s shareholders and third parties. These events and conditions, together with other issues described in said note to the interim financial information, indicate the existence of significant uncertainty that may cast significant doubt as to TLSA’s ability to continue as a going concern. Our conclusion is not qualified regarding this matter.

Other matters

Interim statements of value added

We have also reviewed the individual and consolidated statements of value added (DVA) for the three-month period ended March 31, 2017, prepared under the responsibility of the Company’s management, the presentation of which is required by the standards issued by the Brazilian Securities and Exchange Commission (CVM) applicable to the preparation of interim financial information and considered supplemental information by IFRS, which does not require the presentation of a DVA. This interim financial information was subject to the same review procedures described above and, based on our review, nothing has come to our attention that causes us to believe that it was not fairly presented, in all material respects, in relation to the individual and consolidated interim financial information taken as a whole.

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Audit and review of the corresponding figures for the prior year and quarter

The figures corresponding to the year ended December 31, 2016, presented for purposes of comparison, were previously audited by another independent auditor, who issued an opinion thereon on October 27, 2017, containing emphasis-of-matter paragraphs regarding the restatement of the individual and consolidated financial statements as at December 31, 2015 and the ability of Transnordestina Logística S.A. (TLSA) to continue as a going concern, which is also an emphasis of matter in this quarter. The figures corresponding to the three-month period ended March 31, 2016, also presented for purposes of comparison, were reviewed by other independent auditors, whose report on review of the individual and consolidated interim financial information for the quarter ended March 31, 2016 was originally issued on May 11, 2016 (without modification) and re-issued on November 14, 2016 and re-issued again on October 27, 2017. Both restated reports were issued without modifications, containing emphasis-of-matter paragraphs regarding the restatement of the respective financial statements and TLSA´s ability to continue as a going concern (the later one emphasis is just applicable to the report re-issued on October 27, 2017).

São Paulo, December 22, 2017

Nelson Fernandes Barreto Filho

Grant Thornton Auditores Independentes

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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: February 16, 2018

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

By: | /S/ David Moise Salama
| David Moise Salama Executive 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.