6-K 1 siditr2q19_6k.htm SIDITR2Q19_6K

siditr2q19_6k.htm - Generated by SEC Publisher for SEC Filing

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 6-K

Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16 of the

Securities Exchange Act of 1934

For the month of August, 2019

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____

CONVENIENCE TRANSLATION INTO ENGLISH FROM THE ORIGINAL PREVIOUSLY ISSUED IN PORTUGUESE

Quarterly Financial Information - June 30, 2019 – CIA SIDERURGICA NACIONAL

Table of Contents

Company Information
Capital Breakdown	1
Cash Distribution	2
Parent Company Financial Statements
Balance Sheet – Assets	3
Balance Sheet – Liabilities	4
Statement of Income	5
Statement of Comprehensive Income	6
Statement of Cash Flows	7
Statement of Changes in Shareholders’ Equity
01/01/2019 to 06/30/2019	8
01/01/2018 to 06/30/2018	9
Statement of Value Added	10
Consolidated Financial Statements
Balance Sheet - Assets	11
Balance Sheet - Liabilities	12
Statement of Income	13
Statement of Comprehensive Income	14
Statement of Cash Flows	15
Statement of Changes in Shareholders’ Equity
01/01/2019 to 06/30/2019	16
01/01/2018 to 06/30/2018	17
Statement of Value Added	18
Comments on the Company’s Consolidated Performance	19
Notes to the quarterly financial information	33
Comments on the Performance of Business Projections	92
Reports and Statements
Unqualified Independent Auditors’ Review Report	96
Officers Statement on the Financial Statements	98
Officers Statement on Auditor’s Report	99

 

CONVENIENCE TRANSLATION INTO ENGLISH FROM THE ORIGINAL PREVIOUSLY ISSUED IN PORTUGUESE

Quarterly Financial Information - June 30, 2019 – CIA SIDERURGICA NACIONAL

Company Information / Capital Breakdown

Number of Shares (Units)	Current Quarter 06/30/2019
Paid-in Capital
Common	1,387,524,047
Preferred	0
Total	1,387,524,047
Treasury Shares
Common	7,409,500
Preferred	0
Total	7,409,500

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CONVENIENCE TRANSLATION INTO ENGLISH FROM THE ORIGINAL PREVIOUSLY ISSUED IN PORTUGUESE

Quarterly Financial Information - June 30, 2019 – CIA SIDERURGICA NACIONAL

Company Information / Cash Distribution

Event	Approval	Dividends	Initial Payment	Type of share	Class of share	Dividends per common share (R$/share)
Meeting of Board of Directors	04/26/2019	Dividends	05/29/2019	Ordinary		0.65091

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CONVENIENCE TRANSLATION INTO ENGLISH FROM THE ORIGINAL PREVIOUSLY ISSUED IN PORTUGUESE

Quarterly Financial Information - June 30, 2019 – CIA SIDERURGICA NACIONAL

Parent Company Financial Statements / Balance Sheet - Assets
(R$ thousand)
Code	Description	Current Quarter	Previous Year
		06/30/2019	12/31/2018
1	Total Assets	45,589,714	42,515,849
1.01	Current assets	9,807,744	8,668,688
1.01.01	Cash and cash equivalents	941,517	539,853
1.01.02	Financial investments	654,060	882,997
1.01.02.03	Financial investments at amortized cost	654,060	882,997
1.01.03	Trade receivables	2,254,349	1,965,817
1.01.04	Inventory	4,351,973	3,662,466
1.01.08	Other current assets	1,605,845	1,617,555
1.01.08.03	Others	1,605,845	1,617,555
1.02	Non-current assets	35,781,970	33,847,161
1.02.01	Long-term assets	5,761,774	4,002,570
1.02.01.07	Deferred taxes assets	1,689,596	0
1.02.01.10	Other non-current assets	4,072,178	4,002,570
1.02.02	Investments	20,274,978	20,232,005
1.02.03	Property, plant and equipment	9,699,357	9.562.973
1.02.03.01	Property, plant and equipment in operation	9,654,608	9.562.973
1.02.03.02	Right of use in progress	44,749	0
1.02.04	Intangible assets	45,861	49,613

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CONVENIENCE TRANSLATION INTO ENGLISH FROM THE ORIGINAL PREVIOUSLY ISSUED IN PORTUGUESE

Quarterly Financial Information - June 30, 2019 – CIA SIDERURGICA NACIONAL

Parent Company Financial Statements / Balance Sheet – Liabilities
(R$ thousand)
Code	Description	Current Quarter	Previous Year
		06/30/2019	12/31/2018
2	Total liabilities	45,589,714	42,515,849
2.01	Current liabilities	11,100,193	11,191,230
2.01.01	Payroll and related taxes	164,566	135,255
2.01.02	Trade payables	2,763,632	2,655,091
2.01.03	Tax payables	49,454	116,336
2.01.04	Borrowings and financing	6,693,502	6,474,388
2.01.05	Other payables	1,361,829	1,745,304
2.01.05.02	Others	1,361,829	1,745,304
2.01.05.02.04	Dividends and interests on shareholder´s equity	2,210	900,541
2.01.05.02.05	Advances from clients	62,888	64,416
2.01.05.02.06	Trade payables – Drawee risk	504,819	65,766
2.01.05.02.07	Lease liabilities	11,664	0
2.01.05.02.08	Other obligations	780,248	714,581
2.01.06	Provisions	67,210	64,856
2.01.06.01	Provision for tax, social security, labor and civil risks	67,210	64,856
2.02	Non-current liabilities	23,453,596	22,621,884
2.02.01	Long term Borrowings and financing	18,556,645	17,687,208
2.02.02	Other payables	43,101	24,024
2.02.02.02	Others	43,101	24,024
2.02.02.02.03	Lease liabilities	33,656	0
2.02.02.02.04	Other obligations	9,445	24,024
2.02.03	Deferred Taxes	0	17,434
2.02.04	Provisions	4,853,850	4,893,218
2.02.04.01	Provision for tax, social security, labor and civil risks	407,172	538,077
2.02.04.02	Other provisions	4,446,678	4,355,141
2.02.04.02.03	Provision for environmental liabilities and decommissioning of assets	181,172	191,884
2.02.04.02.04	Pension and healthcare plan	812,738	905,119
2.02.04.02.05	Provision for losses on investments	3,452,768	3,258,138
2.03	Shareholders’ equity	11,035,925	8,702,735
2.03.01	Share Capital	4,540,000	4,540,000
2.03.02	Capital reserves	32,720	32,720
2.03.04	Profit reserves	3,064,827	3,064,827
2.03.04.01	Legal reserve	189,122	189,122
2.03.04.02	Earnings reserves	2,933,969	2,933,969
2.03.04.09	Treasury shares	(58,264)	(58,264)
2.03.05	Accumulated profit/(losses)	1,737,511	0
2.03.08	Other comprehensive income	1,660,867	1,065,188

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CONVENIENCE TRANSLATION INTO ENGLISH FROM THE ORIGINAL PREVIOUSLY ISSUED IN PORTUGUESE

Quarterly Financial Information - June 30, 2019 – CIA SIDERURGICA NACIONAL

Parent Company Financial Statements / Statements of Income
(R$ thousand)
		Current Quarter	Year to date	Same quarter previous year	YTD previous year
Code	Description	04/01/2019 to 06/30/2019	01/01/2019 to 06/30/2019	04/01/2018 to 06/30/2018	01/01/2018 to 06/30/2018
3.01	Revenues from sale of goods and rendering of services	2,982,815	6.004.032	3,022,426	6,051,403
3.02	Costs from sale of goods and rendering of services	(2,875,154)	(5,708,242)	(2,408,202)	(4,745,575)
3.03	Gross profit	107,661	295.790	614,224	1,305,828
3.04	Operating (expenses)/income	67,215	375.523	786,875	2,419,646
3.04.01	Selling expenses	(139,003)	(259,147)	(150,748)	(305,410)
3.04.02	General and administrative expenses	(62,819)	(118,936)	(58,370)	(131,913)
3.04.04	Other operating income	(215,464)	4,230	(495,179)	1,443,735
3.04.05	Other operating expenses	(488,674)	(773,269)	(108,365)	(212,180)
3.04.06	Equity in results of affiliated companies	973,175	1,522,645	1,599,537	1,625,414
3.05	Profit before financial income (expenses) and taxes	174,876	671,313	1,401,099	3,725,474
3.06	Financial income (expenses)	(182,079)	(640,843)	(1,015,928)	(1,408,790)
3.06.01	Financial income	49,455	150,825	34,345	64,671
3.06.02	Financial expenses	(231,534)	(791,668)	(1,050,273)	(1,473,461)
3.06.02.01	Net exchange differences over financial instruments	161,144	89,045	(679,337)	(681,333)
3.06.02.02	Financial expenses	(392,678)	(880,713)	(370,936)	(792,128)
3.07	Profit (loss) before taxes	(7,203)	30,470	385,171	2,316,684
3.08	Income tax and social contribution	1,752,286	1,707,041	775,279	315,629
3.09	Profit (loss) from continued operations	1,745,083	1,737,511	1,160,450	2,632,313
3.11	Profit (loss) for the year	1,745,083	1,737,511	1,160,450	2,632,313
3.99	Earnings per share – (Reais / Share)
3.99.01	Basic earnings per share
3.99.01.01	Common shares	1.26445	1.25896	0.84377	1.92664
3.99.02	Diluted earnings per share
3.99.02.01	Common shares	1.26445	1.25896	0.84377	1.92664

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CONVENIENCE TRANSLATION INTO ENGLISH FROM THE ORIGINAL PREVIOUSLY ISSUED IN PORTUGUESE

Quarterly Financial Information - June 30, 2019 – CIA SIDERURGICA NACIONAL

Parent Company Financial Statements / Statements of Comprehensive Income
(R$ thousand)
		Current Quarter	Year to date	Same quarter previous year	YTD previous year
Code	Description	04/01/2019 to 06/30/2019	01/01/2019 to 06/30/2019	04/01/2018 to 06/30/2018	01/01/2018 to 06/30/2018
4.01	(Loss) profit for the year	1,745,083	1,737,511	1,160,450	2,632,313
4.02	Other comprehensive income	445,496	595,679	(1,380,051)	(2,911,517)
4.02.01	Actuarial gains over pension plan of affiliates, net of taxes	29	59	29	59
4.02.02	(Loss) /Gain over pension plan	93,894	93,894	0	0
4.02.04	Cumulative translation adjustments for the year	(6,132)	(27,936)	(25,962)	11,996
4.02.05	Fair value through other comprehensive income	0	0	0	(1,559,680)
4.02.10	(Loss) /Gain on the percentage change in investments	(1,995)	(1,995)	(105)	(105)
4.02.11	(Loss) /Gain on cash flow hedge accounting	96,843	78,403	(1,333,289)	(1,351,935)
4.02.13	Realization of cash flow hedge accounting reclassified to income statement	262,442	446,659	0	13,732
4.02.14	(Loss)/Gain on net investment hedge from investments in affiliates	415	6,595	(20,073)	(24,933)
4.02.15	(Loss)/Gain on business combination	0	0	(651)	(651)
4.03	Comprehensive income for the year	2,190,579	2,333,190	(219,601)	(279,204)

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CONVENIENCE TRANSLATION INTO ENGLISH FROM THE ORIGINAL PREVIOUSLY ISSUED IN PORTUGUESE

Quarterly Financial Information - June 30, 2019 – CIA SIDERURGICA NACIONAL

Parent Company Financial Statements / Statements of Cash Flows – Indirect Method
(R$ thousand)
		Year to date	YTD previous year
Code	Description	01/01/2019 to 06/30/2019	01/01/2018 to 06/30/2018
6.01	Net cash from operating activities	372,993	5,387,880
6.01.01	Cash from operations	(90,866)	1,064,563
6.01.01.01	Profit (loss) for the period	1,737,511	2,632,313
6.01.01.02	Financial charges in borrowing and financing raised	706,841	767,512
6.01.01.03	Financial charges in borrowing and financing granted	(26,595)	(20,029)
6.01.01.04	Depreciation, depletion and amortization	313,897	293,978
6.01.01.05	Equity in results of affiliated companies	(1,522,645)	(1,625,414)
6.01.01.06	Deferred tax	(1,707,030)	(315,629)
6.01.01.08	Provision for tax, social security, labor, civil and environmental risks	(128,551)	12,159
6.01.01.09	Monetary and exchange variations, net	350,164	679,172
6.01.01.10	Updated shares - VJR	119,470	(1,417,544)
6.01.01.12	Write-off of property, plant and equipment and Intangible assets	15,032	14
6.01.01.13	Provision for environmental liabilities and decommissioning of assets	(10,712)	(63,400)
6.01.01.14	Charges on lease liabilities	1,623	0
6.01.01.15	Provision for consumption and services	43,323	112,833
6.01.01.16	Others	16,806	8,598
6.01.02	Changes in assets and liabilities	463,859	4,323,317
6.01.02.01	Trade receivables - third parties	(120,251)	(35,143)
6.01.02.02	Trade receivables - related parties	(194,997)	(166,203)
6.01.02.03	Inventories	(689,507)	(551,827)
6.01.02.04	Receivables - related parties/dividends	1,778,033	5,611,807
6.01.02.05	Tax assets	(109,439)	(303,186)
6.01.02.06	Judicial deposits	34,749	(17,120)
6.01.02.09	Trade payables	108,541	490,807
6.01.02.10	Trade payables – Drawee Risk	439,053	39,976
6.01.02.11	Payroll and related taxes	29,311	10,284
6.01.02.12	Taxes in installments – REFIS	(66,943)	28,871
6.01.02.14	Payables to related parties	(2,407)	(12,997)
6.01.02.16	Interest paid	(689,264)	(820,629)
6.01.02.17	Interest received	0	1,522
6.01.02.19	Others	(53,020)	47,155
6.02	Net cash used in investing activities	(275,420)	(270,024)
6.02.01	Advance for future capital increase/Investments	(9,644)	(15,207)
6.02.02	Purchase of property, plant and equipment	(374,169)	(200,662)
6.02.08	Intercompany loans granted	(120,544)	(79,505)
6.02.09	Intercompany loans received	0	8,429
6.02.11	Financial Investments, net of redemption	228,937	(22,456)
6.02.12	Cash received upon disposal of Usiminas’ shares	0	39,377
6.03	Net cash used in financing activities	304,091	(3,697,336)
6.03.01	Borrowings and financing raised	2,374,928	118,245
6.03.02	Transactions cost - Borrowings and financing	(32,447)	(24,025)
6.03.03	Borrowings and financing – related parties	2,634,420	0
6.03.04	Amortization of leases	(7,808)	0
6.03.05	Amortization of borrowings and financing	(3,260,255)	(703,020)
6.03.06	Amortization of borrowings and financing - related parties	(506,415)	(3,301,938)
6.03.07	Dividends and interest on shareholder’s equity	(898,332)	0
6.03.08	Sale of treasury shares	0	213,402
6.05	Increase (decrease) in cash and cash equivalents	401,664	1,420,520
6.05.01	Cash and equivalents at the beginning of the year	539,853	393,504
6.05.02	Cash and equivalents at the end of the year	941,517	1,814,024

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CONVENIENCE TRANSLATION INTO ENGLISH FROM THE ORIGINAL PREVIOUSLY ISSUED IN PORTUGUESE

Quarterly Financial Information - June 30, 2019 – CIA SIDERURGICA NACIONAL

Parent Company Financial Statements / Statement of Changes in Equity - 01/01/2019 to 06/30/2019
(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	32,720	3,064,827	0	1,065,188	8,702,735
5.03	Adjusted opening balances	4,540,000	32,720	3,064,827	0	1,065,188	8,702,735
5.05	Total comprehensive income	0	0	0	1,737,511	595,679	2,333,190
5.05.01	Profit (loss) for the period	0	0	0	1,737,511	0	1,737,511
5.05.02	Other comprehensive income	0	0	0	0	595,679	595,679
5.05.02.04	Translation adjustments for the year	0	0	0	0	(27,936)	(27,936)
5.05.02.08	Actuarial gains/(losses) on pension plan, net of taxes	0	0	0	0	93.953	93,953
5.05.02.10	(Loss) / gain on the percentage change in investments	0	0	0	0	-1.995	(1,995)
5.05.02.11	(Loss) / gain on cash flow hedge accounting, net of taxes	0	0	0	0	525,062	525,062
5.05.02.13	Gain (Loss) on hedge of net investment in foreign operations.	0	0	0	0	6,595	6,595
5.07	Closing balance	4,540,000	32,720	3,064,827	1,737,511	1,660,867	11,035,925

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CONVENIENCE TRANSLATION INTO ENGLISH FROM THE ORIGINAL PREVIOUSLY ISSUED IN PORTUGUESE

Quarterly Financial Information - June 30, 2019 – CIA SIDERURGICA NACIONAL

Parent Company Financial Statements / Statement of Changes in Equity - 01/01/2018 to 06/30/2018
(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	0	(1,291,689)	3,779,032	7,027,373
5.03	Adjusted opening balances	4,540,000	30	0	(1,291,689)	3,779,032	7,027,373
5.04	Capital transaction with shareholders	0	32,690	180,712	0	0	213,402
5.04.05	Treasury shares sold	0	0	180,712	0	0	180,712
5.04.09	Gain on disposal of Usiminas’ shares	0	32,690	0	0	0	32,690
5.05	Total comprehensive income	0	0	0	2,632,313	(2,911,517)	(279,204)
5.05.01	Profit (loss) for the period	0	0	0	2,632,313	0	2,632,313
5.05.02	Other comprehensive income	0	0	0	0	(2,911,517)	(2,911,517)
5.05.02.04	Translation adjustments for the year	0	0	0	0	11,996	11,996
5.05.02.08	Actuarial gains/(losses) on pension plan, net of taxes	0	0	0	0	59	59
5.05.02.09	Fair value through other comprehensive income	0	0	0	0	(1,559,680)	(1,559,680)
5.05.02.10	(Loss) / gain on the percentage change in investments	0	0	0	0	(105)	(105)
5.05.02.11	(Loss) / gain on cash flow hedge accounting, net of taxes	0	0	0	0	(1,338,203)	(1,338,203)
5.05.02.13	(Loss) / gain on hedge of net investments in foreign operations	0	0	0	0	(24,933)	(24,933)
5.05.02.14	(Loss) / gain on business combination	0	0	0	0	(651)	(651)
5.07	Closing balance	4,540,000	32,720	180,712	1,340,624	867,515	6,961,571

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CONVENIENCE TRANSLATION INTO ENGLISH FROM THE ORIGINAL PREVIOUSLY ISSUED IN PORTUGUESE

Quarterly Financial Information - June 30, 2019 – CIA SIDERURGICA NACIONAL

Parent Company Financial Statements / Statement of Value Added
(R$ thousand)
		Year to date	Previous year
Code	Description	01/01/2019 to 06/30/2019	01/01/2018 to 06/30/2018
7.01	Revenues	7,375,249	8,921,260
7.01.01	Sales of products and rendering of services	7,472,455	7,510,773
7.01.02	Other revenues	(119,356)	1,417,769
7.01.04	Allowance for (reversal of) doubtful debts	22,150	(7,282)
7.02	Raw materials acquired from third parties	(6,960,092)	(5,547,855)
7.02.01	Cost of sales and services	(5,981,998)	(5,005,624)
7.02.02	Materials, electric power, outsourcing and other	(959,472)	(531,846)
7.02.03	Impairment/recovery of assets	(18,622)	(10,385)
7.03	Gross value added	415,157	3,373,405
7.04	Retentions	(313,897)	(293,978)
7.04.01	Depreciation, amortization and depletion	(313,897)	(293,978)
7.05	Wealth created	101,260	3,079,427
7.06	Value added received	1,716,594	1,808,704
7.06.01	Equity in results of affiliates companies	1,522,645	1,625,414
7.06.02	Financial income	150,825	64,671
7.06.03	Others	43,124	118,619
7.06.03.01	Others and exchange gains	43,124	118,619
7.07	Wealth for distribution	1,817,854	4,888,131
7.08	Wealth distributed	1,817,854	4,888,131
7.08.01	Personnel	694,860	620,986
7.08.01.01	Salaries and wages	486,451	461,154
7.08.01.02	Benefits	136,909	127,157
7.08.01.03	Severance payment (FGTS)	71,500	32,675
7.08.02	Taxes, fees and contributions	(1,408,537)	46,885
7.08.02.01	Federal	(1,523,534)	(91,083)
7.08.02.02	State	114,997	137,965
7.08.02.03	Municipal	0	3
7.08.03	Remuneration on third-party capital	794,020	1,587,947
7.08.03.01	Interest	880,713	792,128
7.08.03.02	Leases	(600)	4,499
7.08.03.03	Others	(86,093)	791,320
7.08.03.03.01	Others and exchange losses	(86,093)	791,320
7.08.04	Remuneration on Shareholders' capital	1,737,511	2,632,313
7.08.04.03	Retained earnings (accumulated losses)	1,737,511	2,632,313

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CONVENIENCE TRANSLATION INTO ENGLISH FROM THE ORIGINAL PREVIOUSLY ISSUED IN PORTUGUESE

Quarterly Financial Information - June 30, 2019 – CIA SIDERURGICA NACIONAL

Consolidated Financial Statements / Balance Sheet - Assets
(R$ thousand)
Code	Description	Current Quarter	Previous Year
		06/30/2019	12/31/2018
1	Total Assets	51,724,354	47,327,524
1.01	Current assets	14,021,052	12,014,483
1.01.01	Cash and cash equivalents	2,154,630	2,248,004
1.01.02	Financial investments	678,891	895,713
1.01.02.03	Financial investments measured at amortized cost	678,891	895,713
1.01.03	Trade receivables	3,335,560	2,078,182
1.01.04	Inventory	5,983,700	5,039,560
1.01.08	Other current assets	1,868,271	1,753,024
1.01.08.03	Others	1,868,271	1,753,024
1.02	Non-current assets	37,703,302	35,313,041
1.02.01	Long-term assets	6,048,310	4,382,389
1.02.01.03	Financial investments measured at amortized cost	7,714	7,772
1.02.01.07	Deferred tax assets	1,743,405	89,394
1.02.01.10	Other non-current assets	4,297,191	4,285,223
1.02.02	Investments	5,606,951	5,630,613
1.02.03	Property, plant and equipment	18,829,665	18,046,864
1.02.03.01	Property, plant and equipment in operation	18,211,626	18.046.864
1.02.03.02	Right of use in progress	618,039	0
1.02.04	Intangible assets	7,218,376	7,253,175

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Quarterly Financial Information - June 30, 2019 – CIA SIDERURGICA NACIONAL

Consolidated Financial Statements / Balance Sheet – Liabilities
(R$ thousand)
Code	Description	Current Quarter	Previous Year
		06/30/2019	12/31/2018
2	Total liabilities	51,724,354	47,327,524
2.01	Current liabilities	11,382,608	11,438,552
2.01.01	Payroll and related taxes	291,714	248,185
2.01.02	Trade payables	3,493,753	3,408,056
2.01.03	Tax payables	782,716	251,746
2.01.04	Borrowings and financing	4,967,888	5,653,439
2.01.05	Other payables	1,735,114	1,770,623
2.01.05.02	Others	1,735,114	1,770,623
2.01.05.02.04	Dividends and interests on shareholder´s equity	2,210	932,005
2.01.05.02.05	Advances from clients	562,575	137,418
2.01.05.02.06	Trade payables – Drawee risk	504,819	65,766
2.01.05.02.07	Lease liabilities	41,442	0
2.01.05.02.08	Other provisions	624,068	635,434
2.01.06	Provisions	111,423	106,503
2.01.06.01	Provision for tax, social security, labor and civil risks	111,423	106,503
2.02	Non-current liabilities	27,972,798	25,875,532
2.02.01	Long term Borrowings and financing	23,547,680	23,173,635
2.02.02	Other payables	2,159,838	227,328
2.02.02.02	Others	2,159,838	227,328
2.02.02.02.03	Advances from clients	1,371,357	0
2.02.02.02.04	Lease liabilities	584,945	0
2.02.02.02.05	Other payables	203,536	227,328
2.02.03	Deferred tax liabilities	609,525	601,731
2.02.04	Provisions	1,655,755	1,872,838
2.02.04.01	Provision for tax, social security, labor and civil risks	552,006	685,953
2.02.04.02	Other provisions	1,103,749	1,186,885
2.02.04.02.03	Provision for environmental liabilities and decommissioning of assets	291,011	281,766
2.02.04.02.04	Pension and healthcare plan	812,738	905,119
2.03	Consolidated Shareholders’ equity	12,368,948	10,013,440
2.03.01	Share Capital	4,540,000	4,540,000
2.03.02	Capital reserves	32,720	32,720
2.03.04	Profit reserves	3,064,827	3,064,827
2.03.04.01	Legal reserve	189,122	189,122
2.03.04.02	Earnings reserves	2,933,969	2,933,969
2.03.04.09	Treasury shares	(58,264)	(58,264)
2.03.05	Accumulated profit/(losses)	1,737,511	0
2.03.08	Other comprehensive income	1,660,867	1,065,188
2.03.09	Profit attributable to the non-controlling interests	1,333,023	1,310,705

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Quarterly Financial Information - June 30, 2019 – CIA SIDERURGICA NACIONAL

Consolidated Financial Statements / Statements of Income
(R$ thousand)
		Current Quarter	Year to date	Same quarter previous year	YTD previous year
Code	Description	04/01/2019 to 06/30/2019	01/01/2019 to 06/30/2019	04/01/2018 to 06/30/2018	01/01/2018 to 06/30/2018
3.01	Revenues from sale of goods and rendering of services	6,900,742	12,906,208	5,687,014	10,752,964
3.02	Costs from sale of goods and rendering of services	(4,442,269)	(8,463,764)	(4,123,918)	(7,808,661)
3.03	Gross profit	2,458,473	4,442,444	1,563,096	2,944,303
3.04	Operating (expenses)/income	(1,325,395)	(2,128,647)	(19,767)	1,237,936
3.04.01	Selling expenses	(426,273)	(999,757)	(471,509)	(928,012)
3.04.02	General and administrative expenses	(125,701)	(245,882)	(117,675)	(225,248)
3.04.04	Other operating income	(209,786)	19,166	683,857	2,629,444
3.04.05	Other operating expenses	(592,701)	(957,073)	(141,753)	(290,412)
3.04.06	Equity in results of affiliated companies	29,066	54,899	27,313	52,164
3.05	Profit before financial income (expenses) and taxes	1,133,078	2,313,797	1,543,329	4,182,239
3.06	Financial income (expenses)	(357,676)	(992,775)	(989,064)	(1,582,768)
3.06.01	Financial income	85,467	196,781	47,878	90,774
3.06.02	Financial expenses	(443,143)	(1,189,556)	(1,036,942)	(1,673,542)
3.06.02.01	Net exchange differences over financial instruments	198,207	84,643	(548,435)	(661,779)
3.06.02.02	Financial expenses	(641,350)	(1,274,199)	(488,507)	(1,011,763)
3.07	Profit (loss) before taxes	775,402	1,321,022	554,265	2,599,471
3.08	Income tax and social contribution	1,119,060	660,203	635,422	76,711
3.09	Profit (loss) from continued operations	1,894,462	1,981,225	1,189,687	2,676,182
3.11	Consolidated Profit (loss) for the year	1,894,462	1,981,225	1,189,687	2,676,182
3.11.01	Profit attributable to the controlling interests	1,745,083	1,737,511	1,160,450	2,632,313
3.11.02	Profit attributable to the non-controlling interests	149,379	243,714	29,237	43,869
3.99.01.01	Common shares	1.26445	1.25896	0.84377	1.92664
3.99.02.01	Common shares	1.26445	1.25896	0.84377	1.92664

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Quarterly Financial Information - June 30, 2019 – CIA SIDERURGICA NACIONAL

Consolidated Financial Statements / Statement of Comprehensive Income
(R$ thousand)
		Current Quarter	Year to date	Same quarter previous year	YTD previous year
Code	Description	04/01/2019 to 06/30/2019	01/01/2019 to 06/30/2019	04/01/2018 to 06/30/2018	01/01/2018 to 06/30/2018
4.01	Consolidated profit (loss) for the year	1.894.462	1,981,225	1,189,687	2,676,182
4.02	Other comprehensive income	445,496	595,679	(1,380,051)	(2,911,517)
4.02.01	Actuarial gains over pension plan of affiliates, net of taxes	29	59	29	59
4.02.02	(Loss)/gain on the actuarial pension plan	93,894	93,894	0	0
4.02.04	Cumulative translation adjustments for the year	(6,132)	(27,936)	(25,962)	11,996
4.02.05	Fair value through other comprehensive income	0	0	0	(1,559,680)
4.02.09	(Loss)/gain on the percentage change in investments	(1,995)	(1,995)	(105)	(105)
4.02.10	(Loss)/gain on cash flow hedge accounting	96,843	78,403	(1,333,289)	(1,351,935)
4.02.12	Realization of cash flow hedge accounting reclassified to income statement	262,442	446,659	0	13,732
4.02.13	(Loss)/gain on hedge of net investment in foreign operations.	415	6,595	(20,073)	(24,933)
4.02.14	(Loss)/gain on business combination	0	0	(651)	(651)
4.03	Consolidated comprehensive income for the year	2,339,958	2,576,904	(190,364)	(235,335)
4.03.01	Attributed to controlling Shareholders	2,190,579	2,333,190	(219,601)	(279,204)
4.03.02	Attributed to non-controlling Shareholders	149,379	243,714	29,237	43,869

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Quarterly Financial Information - June 30, 2019 – CIA SIDERURGICA NACIONAL

Consolidated Financial Statements / Statements of Cash Flows – Indirect Method
(R$ thousand)
		Year to date	YTD previous year
Code	Description	01/01/2019 to 06/30/2019	01/01/2018 to 06/30/2018
6.01	Net cash from operating activities	1,924,557	797,064
6.01.01	Cash from operations	2,374,041	2,124,510
6.01.01.01	Profit (loss) attributable to the controlling interests	1,737,511	2,632,313
6.01.01.02	Profit (loss) attributable to the non-controlling interests	243,714	43,869
6.01.01.03	Financial charges in borrowing and financing raised	957,591	944,337
6.01.01.04	Financial charges in borrowing and financing granted	(29,033)	(23,126)
6.01.01.05	Depreciation, depletion and amortization	684.492	641,437
6.01.01.06	Equity in in results of affiliated companies	(54,899)	(52,164)
6.01.01.07	Deferred tax	(1,642,623)	(390,225)
6.01.01.08	Provision for tax, social security, labor, civil and environmental risks	(127,889)	7,948
6.01.01.09	Monetary and exchange variations, net	335,498	806,521
6.01.01.12	Updated shares - VJR	119,470	(1,417,544)
6.01.01.13	Charges on lease liabilities	17,413	0
6.01.01.15	Provision (Reversal) for consumption and services	33,669	61,588
6.01.01.16	Write-down of property, plant and equipment and Intangible assets	31,793	1,864
6.01.01.18	Provision for environmental liabilities and decommissioning of assets	9,245	(58,270)
6.01.01.19	Net gain from sale of subsidiary abroad	0	(1,149,892)
6.01.01.20	Others	58,089	75,854
6.01.02	Changes in assets and liabilities	(449,484)	(1,327,446)
6.01.02.01	Trade receivables - third parties	(1,255,918)	(59,382)
6.01.02.02	Trade receivables - related parties	(87,315)	(13,683)
6.01.02.03	Inventories	(973,953)	(889,353)
6.01.02.04	Receivables - related parties	2,114	1,279
6.01.02.05	Tax assets	(53,025)	(163,620)
6.01.02.06	Judicial deposits	26,409	(20,972)
6.01.02.07	Trade payables	97,261	708,148
6.01.02.08	Trade payables – Drawee risk	439,053	39,976
6.01.02.09	Payroll and related taxes	44,117	15,306
6.01.02.10	Taxes in installments – REFIS	528,413	45,229
6.01.02.12	Payables to related parties	(26,818)	2,650
6.01.02.13	Advances from clients	1,848,270	0
6.01.02.14	Interest paid	(1,013,598)	(1,030,309)
6.01.02.17	Others	(24,494)	37,285
6.02	Net cash used in investing activities	(628,422)	987,781
6.02.03	Purchase of property, plant and equipment	(774,102)	(485,218)
6.02.04	Acquisition of intangible assets	(49)	(557)
6.02.09	Receivable/(payable) from derivative transactions	(372)	0
6.02.11	Intercompany loans granted	(87,575)	(77,467)
6.02.12	Intercompany loans received	16,796	0
6.02.13	Financial Investments, net of redemption	216,880	(13,184)
6.02.15	Cash received from the sale of subsidiary abroad	0	1,524,830
6.02.16	Cash received from disposal of Usiminas’ shares	0	39,377
6.03	Net cash used in financing activities	(1,393,438)	(1,665,691)
6.03.01	Borrowings and financing	7,738,306	1,518,608
6.03.03	Transaction cost - Borrowings and financing	(46,054)	(51,606)
6.03.05	Amortization of borrowings and financing	(7,899,269)	(2,844,093)
6.03.06	Lease amortization	(35,226)	0
6.03.07	Dividends and interest on equity	(1,151,195)	(502,002)
6.03.08	Treasury shares sold	0	213,402
6.04	Exchange rate on translating cash and cash equivalents	3,929	(19,394)
6.05	Increase (decrease) in cash and cash equivalents	(93,374)	99,760
6.05.01	Cash and equivalents at the beginning of the year	2,248,004	3,411,572
6.05.02	Cash and equivalents at the end of the year	2,154,630	3,511,332

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Quarterly Financial Information - June 30, 2019 – CIA SIDERURGICA NACIONAL

Consolidated Financial Statements / Statements of Changes in Equity - 01/01/2019 to 06/30/2019
(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	32,720	3,064,827	0	1,065,188	8,702,735	1,310,705	10,013,440
5.03	Adjusted opening balances	4,540,000	32,720	3,064,827	0	1,065,188	8,702,735	1,310,705	10,013,440
5.05	Total comprehensive income	0	0	0	1,737,511	595.679	2,333,190	243,714	2,576,904
5.05.01	Profit (loss) for the year	0	0	0	1,737,511	0	1,737,511	243,714	1,981,225
5.05.02	Other comprehensive income	0	0	0	0	595,679	595,679	0	595,679
5.05.02.04	Translation adjustments for the year	0	0	0	0	(27,936)	(27,936)	0	(27,936)
5.05.02.08	Actuarial gains on pension plan, net of taxes	0	0	0	0	93,953	93,953	0	93,953
5.05.02.10	(Loss) / gain on the percentage change in investments	0	0	0	0	(1,995)	(1,995)	0	(1,995)
5.05.02.11	(Loss) / gain on hedge accounting, net of taxes	0	0	0	0	525,062	525,062	0	525,062
5.05.02.13	(Loss) / gain on hedge of net investment in foreign operations	0	0	0	0	6,595	6,595	0	6,595
5.06	Internal changes in shareholders’ equity	0	0	0	0	0	0	(221,396)	(221,396)
5.06.04	Non-controlling interests in affiliates	0	0	0	0	0	0	(221,396)	(221,396)
5.07	Closing balance	4,540,000	32,720	3,064,827	1,737,511	1,660,867	11,035,925	1,333,023	12,368,948

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Quarterly Financial Information - June 30, 2019 – CIA SIDERURGICA NACIONAL

Consolidated Financial Statements / Statements of Changes in Equity - 01/01/2018 to 06/30/2018
(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	0	(1,291,689)	3,779,032	7,027,373	1,260,856	8,288,229
5.03	Adjusted opening balances	4,540,000	30	0	(1,291,689)	3,779,032	7,027,373	1,260,856	8,288,229
5.04	Capital transaction with shareholders	0	32,690	180,712	0	0	213,402	0	213,402
5.04.05	Treasury shares sold	0	0	180,712	0	0	180,712	0	180,712
5.04.09	Gain on disposal of Usiminas’ shares	0	32,690	0	0	0	32,690	0	32,690
5.05	Total comprehensive income	0	0	0	2,632,313	(2,911,517)	(279,204)	43,869	(235,335)
5.05.01	Profit (loss) for the year	0	0	0	2,632,313	0	2,632,313	43,869	2,676,182
5.05.02	Other comprehensive income	0	0	0	0	(2,911,517)	(2,911,517)	0	(2,911,517)
5.05.02.04	Translation adjustments for the year	0	0	0	0	11,996	11,996	0	11,996
5.05.02.08	Actuarial gains on pension plan, net of taxes	0	0	0	0	59	59	0	59
5.05.02.09	Fair value through other comprehensive income	0	0	0	0	(1,559,680)	(1,559,680)	0	(1,559,680)
5.05.02.10	(Loss) / gain on the percentage change in investments	0	0	0	0	(105)	(105)	0	(105)
5.05.02.11	(Loss) / gain on hedge accounting, net of taxes	0	0	0	0	(1,338,203)	(1,338,203)	0	(1,338,203)
5.05.02.13	(Loss) / gain on hedge of net investment in foreign operations	0	0	0	0	(24,933)	(24,933)	0	(24,933)
5.05.02.14	(Loss)/gain on business combination	0	0	0	0	(651)	(651)	0	(651)
5.06	Internal changes in shareholders’ equity	0	0	0	0	0	0	(44,968)	(44,968)
5.06.04	Non-controlling interests in affiliates	0	0	0	0	0	0	(44,968)	(44,968)
5.07	Closing balance	4,540,000	32,720	180,712	1,340,624	867,515	6,961,571	1,259,757	8,221,328

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Quarterly Financial Information - June 30, 2018 – CIA SIDERURGICA NACIONAL

Consolidated Financial Statements / Statements of Value Added
(R$ thousand)
		Year to date	Previous year
Code	Description	01/01/2019 to 06/30/2019	01/01/2018 to 06/30/2018
7.01	Revenues	14,399,066	14,932,077
7.01.01	Sales of products and rendering of services	14,489,022	12,344,277
7.01.02	Other revenues	(114,761)	2,596,309
7.01.04	Allowance for (reversal of) doubtful debts	24,805	(8,509)
7.02	Raw materials acquired from third parties	(9,909,100)	(8,431,578)
7.02.01	Cost of sales and services	(7,794,946)	(7,017,393)
7.02.02	Materials, electric power, outsourcing and other	(2,049,068)	(1,421,574)
7.02.03	Impairment/recovery of assets	(65,086)	7,389
7.03	Gross value added	4,489,966	6,500,499
7.04	Retentions	(684,492)	(641,437)
7.04.01	Depreciation, amortization and depletion	(684,492)	(641,437)
7.05	Wealth created	3,805,474	5,859,062
7.06	Value added received	296,209	317,251
7.06.01	Equity in results of affiliates companies	54,899	52,164
7.06.02	Finance income	196,781	90,774
7.06.03	Others	44,529	174,313
7.06.03.01	Others and exchange gains	44,529	174,313
7.07	Wealth for distribution	4,101,683	6,176,313
7.08	Wealth distributed	4,101,683	6,176,313
7.08.01	Personnel	1,178,655	1,135,853
7.08.01.01	Salaries and wages	879,241	890,340
7.08.01.02	Benefits	210,573	203,732
7.08.01.03	Severance payment (FGTS)	88,841	41,781
7.08.02	Taxes, fees and contributions	(254,396)	512,001
7.08.02.01	Federal	(403,555)	335,940
7.08.02.02	State	137,973	163,664
7.08.02.03	Municipal	11,186	12,397
7.08.03	Remuneration on third-party capital	1,196,199	1,852,277
7.08.03.01	Interest	1,274,199	1,011,763
7.08.03.02	Leases	6,433	13,702
7.08.03.03	Others	(84,433)	826,812
7.08.03.03.01	Others and exchange losses	(84,433)	826,812
7.08.04	Remuneration on Shareholders' capital	1,981,225	2,676,182
7.08.04.03	Retained earnings (accumulated losses)	1,737,511	2,632,313
7.08.04.04	Non-controlling interests in retained earnings	243,714	43,869

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Quarterly Financial Information - June 30, 2019 – CIA SIDERURGICA NACIONAL	Version: 1

Comments on the Company’s Consolidated Performance

São Paulo, July 30, 2019

Results for the Second Quarter of 2019

Companhia Siderúrgica Nacional (CSN) (BM&FBOVESPA: CSNA3) (NYSE: SID) announces its results for the second quarter of 2019 (2Q19) which are presented in Brazilian Reais and in accordance with International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB), and with Brazilian accounting practices, which are fully convergent with international accounting standards, issued by the Accounting Pronouncements Committee (CPC) and approved by the Brazilian Securities and Exchange Commission (CVM), pursuant to CVM Instruction 485 of September 1, 2010. All comments presented herein refer to the Company’s consolidated results for the second quarter of 2019 (2Q19) and comparisons refer to the first quarter of 2019 (1Q19) and the second quarter of 2018 (2Q18). The real/U.S. dollar exchange rate was R$3.8322 on 06/30/2019, R$3.8967 on 03/31/2019 and R$3.8748 on 12/31/2018.

Operating and Financial Highlights  

· Record adjusted EBITDA of R$2,380MM, up by 68% and 38% over 2Q18 and 1Q19, respectively. Adjusted EBITDA Margin reached 33.5%, increasing by 5.8 p.p. versus 1Q19 due to the strong mining performance.

· Mining EBITDA reached a historical record of R$2,021MM, 61% higher than in 1Q19, with an increase of approximately 40% in EBITDA/ton in the segment due to better realized prices and increased sales volumes.

· 14% growth in iron ore sales volumes over 1Q19, with highlight to exported volumes.

· Leverage ratio reduced by 0.42x over the previous quarter, reaching 3.65x in 2Q19, due to higher EBITDA generation. Considering the second prepayment of $250MM, leverage has already reached 3.52x

Highlights	2Q18	1Q19	2Q19		Change
					2Q19	x	2Q18	2Q19	x	1Q19
Steel Sales (thousand t)	1,321	1,175	1,161		(12%)			(1%)
- Domestic Market	798	811	771		(3%)			(5%)
- Foreign Subsidiaries	449	340	369		(18%)			8%
- Exports	74	24	21		(71%)			(11%)
Iron Ore Sales (thousand t)	8,130	8,859	10,143		25%			14%
- Domestic market	1,376	1,169	1,139		(17%)			(3%)
- Foreign Market	6,754	7,690	9,004		33%			17%
Consolidated Results (R$ million)
Net Revenue	5,687	6,005	6,901		21%			15%
Gross Profit	1,563	1,984	2,458		57%			24%
Adjusted EBITDA¹	1,420	1,724	2,380		68%			38%
Adjusted Net Debt²	27,125	25,772	26,641		(2%)			3%
Adjusted Cash and Cash Equivalents²	4,357	3,601	3,177		(27%)			(12%)
Net Debt / Adjusted EBITDA	5.34x	4.07x	3.65x		-1.69 x			-0.42 x

¹ Adjusted EBITDA is calculated based on net profit, plus depreciation and amortization, income tax, net financial result, share of profit (loss) of investees and other operating income (expenses), and includes the proportionate share of EBITDA of the jointly owned subsidiaries MRS Logística and CBSI. It includes the Company’s stakes of 100% in CSN Mineração, 37.27% in MRS and 50% in CBSI.

² Adjusted net debt and the adjusted cash and cash equivalents position include the stakes of 100% in CSN Mineração, 37.27% in MRS and 50% in CBSI, excluding Forfaiting and drawee risk operations.

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Quarterly Financial Information - June 30, 2019 – CIA SIDERURGICA NACIONAL	Version: 1

CSN’s Consolidated Results

· Net revenue in 2Q19 totaled R$6,901 million, 21% and 15% higher than in 2Q18 and 1Q19, respectively. The strong growth was mainly due to the improvement in mining performance.

· Cost of goods sold totaled R$4,442 million in 2Q19, 8% and 10% higher than in 2Q18 and 1Q19, respectively. Costs in the steel segment increased in comparison to 1Q19 due to the end of blast furnace number 3 campaign and costs of goods sold in the mining segment increased due to higher sales volume.

· Gross profit totaled R$2,458 million in 2Q19, 24% higher than in 1Q19. Gross margin increased 2.6 p.p. versus 1Q19, reaching 35.6% in 2Q19, mainly due to improved performance in mining, as well as logistics, energy and cement segments.

· General and administrative expenses totaled R$126 million in 2Q19, with a dilution from 2.0% (1Q19) to 1.8% (2Q19) of net revenue. Selling expenses totaled R$426 million, or 6.2% of net revenue, 3.4 p.p. lower than the amount recorded in 1Q19 (9.5% of net revenue) due to efficiency in hiring freight in the period’s shipments.

· Net other income (expenses) was an expense of R$802 million in 2Q19, mainly to non-cash items, such as: (i) the devaluation of Usiminas shares and (ii) the recognition of hedge accounting expenses.

· Net financial result was an expense of R$358 million in 2Q19, lower than the 1Q19, mainly due to the variation in exchange rate with positive effect in results. Financial expenses (ex-exchange variation) remained stable when compared to the previous quarter, reaching R$641MM, affected by bond repurchase expenses.

Financial Result (R$ million)	2Q18	1Q19	2Q19
Financial Result - IFRS	(989)	(635)	(358)
Financial revenue	48	111	85
Financial expenses	(1,037)	(746)	(443)
Financial expenses (ex-exchange rate variation)	(489)	(633)	(641)
Result with exchange rate variation	(548)	(114)	198
Monetary and exchange rate variation	(1,905)	(126)	295
Hedge accounting	1,353	12	(97)
Derivative result	3	-	1

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· Equity in results of affiliated companies was positive R$29 million in 2Q19, versus a positive amount of R$26 million in 1Q19, mainly due to the improved performance of MRS and TLSA.

Equity in results of affiliated companies (R$ million)	2Q18	1Q19	2Q19	Change
				2Q19	x	2Q18	2Q19	x	1Q19
MRS Logística	46	43	44	(4%)			2%
CBSI	1	1	1	-			-
TLSA	(8)	(6)	(3)	(63%)			(50%)
Arvedi Metalfer BR	(2)	-	-	-			-
Eliminations	(10)	(12)	(12)	20%			-
Equity in results of affiliated companies	27	26	29	7%			12%

· CSN recorded a net profit of R$1,894 million in 2Q19, versus a net profit of R$87 million in 1Q19, mainly due to a reversal of provision of deferred IR/CS taxes, in line with the perspective of future profitability, of approximately R$1,615MM.

Adjusted EBITDA (R$ million)	2Q18	1Q19	2Q19	Change
				2Q19	x	2Q18	2Q19	x	1Q19
Net profit for the period	1,190	87	1,894	59%			2083%
(-) Depreciation	312	306	332	6%			8%
(+) Income tax and social contribution	(635)	459	(1,119)	76%			-
(+) Net financial result	989	635	358	-64%			-44%
EBITDA (CVM Instruction 527)	1,855	1,487	1,465	-21%			-1%
(+) Other operating income (expenses)	(542)	135	802	-			493%
(+) Equity in results of affiliated companies	(27)	(26)	(29)	6%			13%
(-) Proportional EBITDA of jointly owned subsidiaries	134	127	142	6%			12%
Adjusted EBITDA¹	1,420	1,724	2,380	68%			38%

¹ The 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.

· Adjusted EBITDA reached R$2,380 million in 2Q19, versus R$1,724 million in 1Q19, 38% increase due to better contribution from mining segment, while adjusted EBITDA margin reached 33.5%, or 5.8 p.p. higher during the same period.

Adjusted EBITDA (R$ MM) and Adjusted EBITDA Margin¹ (%)

 

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

Free Cash Flow¹

Operating cash flow, as measured by free cash flow was positive by R$856MM in 2Q19, influenced by stability in working capital and the excellent EBITDA performance in the quarter.

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¹ The free cash flow is calculated from adjusted Ebitda less Ebitda of joint ventures, Capex, Income tax, financial result and variation of working capital, excluding the effect of Glencore’s advance.

Debt

On 06/30/2019, consolidated net debt reached R$26,641 million, while net debt/EBITDA, calculated based on LTM adjusted EBITDA, reached 3.65x, or 0.42x lower than in 1Q19. Considering the second prepayment with Glencore, the leverage reached 3,52x. The evolution of leverage in the quarter was affected by the distribution of dividends in the amount of R$1,151 million.

Foreign Exchange Exposure

The net FX exposure (excluding the Perpetual Bond) of the consolidated balance sheet on 06/30/2019 was US$958 million, as shown in the table below. It should be noted that the net foreign exchange exposure includes a liability of US$1.0 billion in line item “Loans and Financing” related to the Perpetual Bond, which, due to its nature, will not require disbursement to settle the principal amount in the foreseeable future.

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 accounted for under shareholders’ equity, being recorded in the income statement when dollar revenues from exports are received.

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Foreign Exchange Exposure	06/30/2018	03/31/2019	06/30/2019
(in thousands of U.S. dollars)	IFRS	IFRS	IFRS
Cash	593	99	295
Accounts Receivable	329	486	549
Other	9	7	5
Total Assets	931	593	849
Loans and Financing	(4,237)	(4,053)	(4,295)
Trade Payables	(202)	(125)	(109)
Other Payables	(4)	(3)	(3)
Total Liabilities	(4,443)	(4,181)	(4,407)
Natural Foreign Exchange Exposure (Assets - Liabilities)	(3,512)	(3,589)	(3,558)
Cash Flow Hedge Accounting	2,477	1,862	1,600
Net Foreign Exchange Exposure	(1,035)	(1,726)	(1,958)
Perpetual Bond	1,000	1,000	1,000
Net Foreign Exchange Exposure, excluding Perpetual Bond	(35)	(726)	(958)

Investments

A total of R$461 million was invested in 2Q19, 47% higher than in 1Q19, due to investments related to the scheduled shutdown of blast furnace number 3 in the steel segment and the tailings filtering plants in the mining segment, that we enable efficiency gains in steel production and processing 100% of the production without the need to use dams at the end of 2019, respectively.

Investments (R$ million)	1Q18	2Q18	3Q18	4Q18	2018	1Q19	2Q19
Steel	65	134	168	271	637	160	212
Mining	116	99	116	174	505	118	205
Cement	23	13	13	30	79	14	15
Logistics	18	15	25	26	84	17	25
Other	2	2	3	5	12	4	3
Total Investments - IFRS	223	263	325	507	1,319	313	461

Working Capital

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

· Accounts receivable: excludes dividends receivable, advances to employees and other receivables;

· Inventories: includes estimated losses and excludes spare parts;

· Prepaid taxes: composed only of the portion of income tax and social contribution included in recoverable taxes;

· Taxes payable: includes taxes in installments;

· Advances from customers: sub-account of other liabilities recorded under current liabilities; excludes the advance from Glencore and

· Suppliers: Includes Drawee Risk

Accordingly, working capital invested in the business totaled R$3,425 million in 2Q19, increasing by R$81MM compared to 1Q19, due to temporary increases in inventories and accounts receivable. Specifically, Blast Furnace #3 shutdown increased the slab inventory in anticipation of the period of lower production, while the growth in accounts receivable was mainly due to the concentration of iron ore shipments sold at the end of the period.

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Working Capital (R$ million)	2Q18	1Q19	2Q19		Change
					2Q19	x	2Q18	2Q19	X	1Q19
Assets	6,924	7,797	8,599		1,675			802
Accounts receivable	2,269	2,835	3,336		1,067			500
Inventories	4,458	4,952	5,254		796			301
Prepaid taxes	197	9	9		(188)			0
Liabilities	3,965	4,452	5,173		1,208			721
Trade payables	3,226	3,529	3,999		773			469
Payroll and related taxes	265	262	292		27			30
Taxes payable	337	555	802		465			246
Advances from customers	137	106	81		(56)			(25)
Working Capital	2,959	3,344	3,425		466			81
Average Term (days)	2Q18	1Q19	2Q19		Change
					2Q19	x	2Q18	2Q19	x	1Q19
Amounts received	31	37	39		8			2
Amounts paid	70	79	81		11			2
Inventories	97	111	106		9			(5)
Financial Cycle	58	69	64		6			(5)

Results by Business Segment

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

    

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2Q19 Results	Steel	Mining	Port Logistics	Railway Logistics	Energy	Cement	Corporate Expenses/ Eliminations	Consolidated
(R$ million)
Net Revenue	3,660	3,091	64	340	78	146	(479)	6,901
Domestic Market	2,515	298	64	340	78	146	(687)	2,753
Foreign Market	1,146	2,793	-	-	-	-	209	4,147
COGS	(3,380)	(1,133)	(44)	(250)	(66)	(149)	580	(4,442)
Gross Profit	280	1,959	20	90	11	(3)	101	2,458
SG&A	(210)	(50)	(8)	(24)	(7)	(22)	(231)	(552)
Depreciation	155	112	14	98	4	32	(84)	332
Proportional EBITDA of jointly owned subsidiaries	-	-	-	-	-	-	142	142
Adjusted EBITDA	225	2,021	26	164	9	7	(71)	2,380
1Q19 Results	Steel	Mining	Port Logistics	Railway Logistics	Energy	Cement	Corporate Expenses/ Eliminations	Consolidated
(R$ million)
Net Revenue	3,605	2,079	52	335	70	120	(255)	6,005
Domestic Market	2,567	245	52	335	70	120	(629)	2,760
Foreign Market	1,038	1,834	-	-	-	-	374	3,245
COGS	(3,222)	(870)	(47)	(261)	(61)	(138)	577	(4,021)
Gross Profit	383	1,209	5	74	9	(18)	322	1,984
SG&A	(197)	(42)	(9)	(27)	(7)	(21)	(390)	(694)
Depreciation	157	92	7	92	4	32	(79)	306
Proportional EBITDA of jointly owned subsidiaries	-	-	-	-	-	-	127	127
Adjusted EBITDA	344	1,259	3	138	6	(7)	(19)	1,724
2Q18 Results	Steel	Mining	Port Logistics	Railway Logistics	Energy	Cement	Corporate Expenses/ Eliminations	Consolidated
(R$ million)
Net Revenue	4,093	1,331	64	370	113	152	(437)	5,687
Domestic Market	2,421	225	64	370	113	152	(661)	2,684
Foreign Market	1,672	1,106	-	-	-	-	225	3,003
COGS	(3,276)	(855)	(49)	(262)	(74)	(122)	513	(4,124)
Gross Profit	817	477	15	108	39	30	77	1,563
SG&A	(264)	(45)	(9)	(25)	(7)	(21)	(218)	(589)
Depreciation	155	102	5	64	4	34	(52)	312
Proportional EBITDA of jointly owned subsidiaries	-	-	-	-	-	-	134	134
Adjusted EBITDA	708	533	12	147	36	42	(59)	1,420

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CSN’s Steel Results

According to the World Steel Association (WSA), global crude steel production totaled 478 million tons (Mton) from April to June 2019, or 9.0% higher than the same period in 2018. Asia produced 345 Mton during the same period in 2019, 12% higher when compared to the first quarter of 2019, while European Union grown up 1.3% and North America decreased 0.3%, both referring to the same comparison period.

According to the Brazilian Steel Institute (IABr), domestic sales totaled 4.6 million tons during the second quarter of 2019, increasing by 3.28% in the comparison with the same period in 2018. Apparent consumption reached 5.2 million tons in 2Q19, increasing by 4.62% versus the same period of the previous year. Brazilian crude steel production reached 8.6 million tons, increasing   2.73% compared to the previous quarter.

· CSN’s slab production reached 856 thousand tons in 2Q19, 3% higher than 1Q19, but still low due to the scheduled maintenance shutdowns and reforms. In this period, CSN acquired 68 thousand tons of slab from third parties to maintain production of rolled products.

Steel Production	2Q18	1Q19	2Q19	Change
(in thousand tons)				2Q19	x	2Q18	2Q19	x	1Q19
Total Slabs (UPV + Third Parties)	997	1,030	924	(7%)			(10%)
Slab Production	996	830	856	(14%)			3%
Third-Party Slabs	0	200	68	-			(66%)
Total Flat Rolled Products	981	927	839	(14%)			(9%)
Total Long Rolled Products	53	51	56	6%			10%

· Total sales reached 1,161 thousand tons in 2Q19, in line with 1Q19, mainly due to delayed economic recovery expected for the first half of the year.

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· In 2Q19, domesticsteel sales volume totaled 771 thousand tons, 5% less than in 1Q19. According to the National Institute of Steel Distributors (INDA), from January to May 2019, distribution purchases increased 0.3% over the previous year. Imports closed the accumulated period at 523.8 thousand tons, up by 2.5% over the same period of 2018.

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· Foreign steel sales reached 390 thousand tons in 2Q19, 7% higher than in 1Q19, and the comparison with 2Q18 is impacted by the sale of the plant in Terra Haute. In this period, 21 thousand tons were exported directly, and 369 thousand tons were sold by foreign subsidiaries, of which 73 thousand tons by SWT and 93,000 tons by Lusosider.

· In 2Q19, CSN maintained a 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 plates, accounted for 51% of flat steel sales, considering all the markets in which the Company operates. In the domestic market, the share of coated products in flat steel sales increased, from 41% in 1Q19 to 43% in 2Q19.

 

According to ANFAVEA, the production of automobiles, light commercial vehicles, trucks and buses reached 776 thousand units in 2Q19, increase of 5.67% versus the same period in 2018, and up by 11.26% in comparison to 1Q19. Exports showed a weaker performance, with sales of 117 thousand vehicles, 41% lower than the same period in 2018. Anfavea expects vehicle production to grow by 9.0% in 2019, to 3.14 million units.   According to ABRAMAT, revenues of the building materials industry increased by 11.5% in May 2019 in comparison with the same month in 2018 but fell by 1% over the previous month.   According to IBGE (Brazilian Institute of Geography and Statistics), home appliance production increased by 3.3% % in the twelve months ended May 2019 compared to the same period of the previous year.

· Net revenue from steel operations reached R$3,660 million in 2Q19, 2% higher than in 1Q19. This was due to higher prices and a slight improvement in sales mix, even amidst a challenging scenario. Average flat steel prices increased by 3.5% in the domestic market when compared to the previous quarter.

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· Cost of goods sold increased by 5% in 2T19, versus 1Q19, totaling R$3,380 million, mainly due to lower productivity of blast furnace number 3.

· Slab production costreached R$2,201/t in 2Q19, 6.8% higher than in 1Q19 fueled by higher spending on iron ore driven by a sharp price increase in the period, as well as by the scheduled stoppage of blast furnace number 3, which reduced slab production and increased the consumption of reducers.

· Adjusted EBITDA reached R$225 million in 2Q19, 34% lower than in 1Q19, driving the EBITDA Margin to 6.2% in 2Q19. The efficiency gains expected after the scheduled shutdown of blast furnace number 3 should be felt partially as of 3Q19 and fully as of 4Q19, taking the profitability of the business unit to its historical standard.

CSN’s Mining Results

In 2Q19, the perception of a tight balance between supply and demand was confirmed. While the Chinese steel production continued accelerating, with a 14% growth in the quarter, the supply already compromised after the accident in Brumadinho was heavily impacted by rainfall in northern Brazil and a cyclone in Australia. In this context, steel ended 2Q19 with an average of US$100.1/dmt (Platts, Fe62%, N. China), 21% higher than in 1Q19.

As for maritime freight, the BCI-C3 (Tubarão-Qingdao) route had an average of US$15.55/wmt in 2Q19, up by 11.6% compared to the previous quarter, influenced by the gradual increase in shipments.

· In 2Q19, CSN’s iron ore production reached 8.3 million tons, 23% higher than in 1Q19, driven by filtration operations and productivity gains. Iron ore purchases reached 1.8 thousand tons in 2Q19, increasing by 17% versus 1Q19.

· Iron Ore sales reached 10.1 million tons in 2Q19, 25% higher than the volume recorded in 2Q18, of which 1.1 million tons were sold to the Presidente Vargas Steelworks and the remaining was sold in Asian and European markets.

Mining Production Volume and Sales	2Q18	1Q19	2Q19	Change
(in thousand tons)				2Q19	x	2Q18		2Q19	x	1Q19
Iron Ore production	6,744	8,190	8,323	23%				2%
Iron Ore purchased from third parties	1,878	1,530	1,786	(5%)				17%
Total Production + Purchases	8,621	9,719	10,110	17%				4%
Sales to UPV	1,376	1,169	1,139	(17%)				(3%)
Volume sold to third parties	6,754	7,690	9,004	33%				17%
Total Sales	8,130	8,859	10,143	25%				14%

Production and sales volumes include our 100% stake in CSN Mineração.

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· Net revenue from mining operations reached R$3,091 million in 2Q19, 49% higher than the previous quarter due to higher prices (+20%) and sales volumes (+14%). The Platts 62 index reached US$100.1/dmt, 21% higher in the quarter. CIF+FOB prices were US$84.7/wmt, 20% higher than the same period in 2018.

· Cost of goods sold in the mining segment reached R$1,133 million in 2Q19, 30% higher than in 1Q19, due to an increase in iron ore production and purchases of ore from third parties.

· The EBITDA margin reached 65.4% in 2Q19, or 4.8 p.p. higher than 1Q19, while EBITDA reached R$2,021 million in 2Q19, 61% higher than in 1Q19 due to the higher prices and sales volumes, with a considerable increase in EBITDA/ton from R$142/ton (1Q19) to R$199/ton (2Q19).

CSN’s Logistics Results

Railway Logistics: Net revenue reached R$340 million in 2Q19, with an EBITDA of R$164 million and an EBITDA Margin of 48.2%. 

Port Logistics: Sepetiba Tecon shipped 130 thousand tons of steel products in 2Q19, in addition to 2 thousand tons of general cargo, approximately 38 thousand containers and 374 thousand tons of bulk cargo. Net revenue reached R$64 million, with an EBITDA of R$26 million and an EBITDA Margin of 40.4%.

Sepetiba TECON Highlights	2Q18	1Q19	2Q19	Change
				2Q19	x	2Q18	2Q19	x	1Q19
Container volume (thousand units)	56	43	38	(31%)			(11%)
Steel volume (thousand tons)	114	162	130	15%			(20%)
General cargo volume (thousand tons)	98	1	2	(98%)			125%
Bulk volume (thousand tons)	-	56	374	-			568%

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CSN’s Energy Results

According to EPE (Energy Research Company), electricity consumption in Brazil increased by 3.2% in May 2019 versus the same month of the previous year. The industrial, residential and commercial segments increased by 2.5%, 4.4% and 4.9%, respectively during the same period.

In 2Q19, even facing the falling prices, the increase in traded energy volume led to an increase in net revenue, totaling R$78million, 11% higher than 1Q19, generating EBITDA of R$9 million and EBITDA margin of R$11.1%, increase of 2.4 p.p. when compared to the previous quarter. 

CSN’s Cement Results

In the second quarter of 2019, domestic cement sales totaled 13.2 million tons, according to preliminary date of SNIC (National Cement Industry Association). This amount represents a 1.8% increase over the same period in 2018 and a 3.9% increase compared to the previous quarter. According to SNIC, a 3% growth is expected for 2019.

In 2Q19, net revenue reached R$ 146 million, an increase of 22% over the previous quarter, due to higher sales volume with COGS dilution, generating EBITDA of R$7million and EBITDA margin of 4.7%

Capital Market

CSN’s shares appreciated 3.25%% in the second quarter of 2019, while the IBOVESPA moved up 5.11%. Daily traded volume (CSNA3) on B3 averaged R$205 million. On the New York Stock Exchange (NYSE), CSN’s American Depositary Receipts (ADRs) appreciated 3.64%, while the Dow Jones climbed 1.91%. On the NYSE, daily traded volume of CSN’s ADRs (SID) averaged US$3.6 million.

1Q19		2Q19
Number of shares (in thousands)	1,387,524	1,387,524
Market Cap
Closing price (R$/share)	16.25	16.71
Closing price (US$/ADR)	4.11	4.31
Market cap (R$ million)	20,841	23,186
Market cap (US$ million)	5,314	5,980
Total return including dividends and interest on equity
CSNA3	76.44%	3.25%
SID	69.14%	3.64%
Ibovespa	4.84%	5.11%
Dow Jones	11.06%	1.91%
Volume
Daily average (thousand shares)	15,184	12,772
Daily average (R$ thousand)	191,925	204,935
Daily average (thousand ADRs)	4,473	3,560
Daily average (US$ thousand)	15,417	14,268
Source: Bloomberg

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CONSOLIDATED SALES VOLUME (in thousands of tons)
	2Q18	1Q19	2Q19		Change
					2Q19	x	2Q18		2Q19	x	1Q19
Flat Steel	748	760	719		(29)				(41)
Slab	-	-	-		-				-
Hot Rolled	278	293	270		(8)				(23)
Cold Rolled	142	155	138		(4)				(17)
Galvanized	263	244	234		(29)				(10)
Tin Plates	66	68	77		11				9
UPV Long Steel	50	51	52		2				1
DOMESTIC MARKET	798	811	771		(27)				(40)
	2Q18	1Q19	2Q19		2Q19	x	2Q18		2Q19	x	1Q19
Flat Steel	310	137	187		(123)				50
Hot Rolled	24	10	25		1				15
Cold Rolled	26	6	6		(20)				-
Galvanized	200	96	131		(69)				35
Tin Plates	61	26	23		(38)				(3)
Long Steel Profiles	212	226	203		(9)				(23)
FOREIGN MARKET	523	364	390		(133)				26
	2Q18	1Q19	2Q19		2Q19	x	2Q18		2Q19	x	1Q19
Flat Steel	1,059	897	906		(153)				9
Slab	-	-	2		2				2
Hot Rolled	301	303	295		(6)				(8)
Cold Rolled	168	161	144		(24)				(17)
Galvanized	463	340	365		(98)				25
Tin Plates	126	94	100		(26)				6
UPV Long Steel	50	51	52		2				1
Long Steel Profiles	212	226	203		(9)				(23)
TOTAL MARKET	1,321	1,175	1,161		(160)				(14)

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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 S.A.- 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 commercial operations in the United States and operations in 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, by subsidiary CSN Mineração.

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 State of 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.

The Company's mining activities utilize tailings dams for which all appropriate measures are taken to mitigate the risks inherent to the handling and disposal of the tailings and to comply with current environmental legislation. It is important to reiterate that operating without dependence on these dams is a priority in our mining activities, for which investments of around R$ 250 million in dry stacking technology have already been made. In this context, it is expected that CSN Mineração will be fully processing the tailings in the dry process by the end of 2019, subject to revision of projects and expected deadlines, proper operation of equipment and unforeseen delays. As a consequence of these measures, decommissioning of dams is the natural way of processing dry tailings.

All of our dams, both mining and hydroelectric dams, are positively certified and comply with the environmental legislation in force.

· 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. Additionally, the operation clinker production line is located in Arcos/MG. As a result, the Company is self-sufficient in the production of cement, with an installed capacity of 4.7 million tons per year.

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· 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 has the concession to operate 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),  under construction 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).

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.

TECON handles and stores containers, vehicles, steel products, general cargo, among other products, and TECAR performs the operational activities of loading and unloading of solid bulk ships, storage and distribution (road and rail) of coal, coke, petroleum coke, clinker, zinc concentrate, sulfur, iron ore and other bulk, intended for the seaborne market, for own consumption or for different customers.

· Energy:

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

Note 25 - “Segment Information” details the financial information per CSN´s business segment.

· Going Concern

The interim financial information was prepared based on the normal continuity of its business.

The negotiations are in constant progress for reprofiling part of the debts do not jeopardize the Company's operating continuity and Management does not have any other relevant operational restructuring plan that implies a change to the conclusion of the operational continuity. Further disclosures on the bases for evaluating the operational continuity were made in the disclosures of this subject included in the financial statements of December 31, 2018, approved by Management on February 20, 2019.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

2.a) Basis of preparation and declaration of conformity

The consolidated and parent company condensed interim financial information (“condensed quarterly information”) have been prepared and are being presented in accordance with accounting practices adopted in Brazil based on the provisions of the Brazilian Corporate Law, pronouncements, guidelines and interpretations issued (CPC), approved by CVM, besides the own standards issued by the Brazilian Securities and Exchange Commission (“CVM”) and International Financial Reporting Standards (“IFRS”) issued by the International Accounting Standard Board (IASB) and highlight 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

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The 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 interim financial information are consistent with the policies described in Note 02 to the Company’s financial statements for the year ended December 31, 2018, filed with CVM.

This 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, 2018.

Therefore, in this 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 09 - Investments

Note 16 - Taxes in installments

Note 17 - Provision for tax, social security, labor, civil and environmental risks and judicial deposits

Note 27 – Employee benefits

Note 28 – Commitments

The parent company and consolidated interim financial information was approved by Management on July 30, 2019.

2.b) Basis of presentation

The interim financial information is presented in Brazilian reais R$, 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 June 30, 2019, US$1 is equivalent to R$3.8322 (R$3.8748 as of December 31, 2018) and €1 is equivalent to R$4.3587 (R$4.4390 as of December 31, 2018), 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  financial statements for the period ended June 30, 2019 and year ended December 31, 2018 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		06/30/2019		12/31/2018		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 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. (3)				99.99		Management of funds and securities portfolio
CSN Mineração S.A.		87.52		87.52		Mining and Equity interests
CSN Energia S.A.		99.99		99.99		Sale of electric power
FTL - Ferrovia Transnordestina Logística S.A.		91.69		91.69		Railroad logistics
Nordeste Logística S.A.		99.99		99.99		Port services
Aceros México CSN (1)				0.08		Commercial representation, steel sales and related activities
CSN Inova Ltd.		100.00		100.00		Advisory and implementation of new development projects
Indirect interest in subsidiaries: full consolidation
Lusosider Projectos Siderúrgicos S.A.		100.00		100.00		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		99.99		99.99		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
CSN Mining Holding, S.L		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 (1)				99.92		Commercial representation, steel sales and related activities
Lusosider Ibérica S.A.		100.00		100.00		Steel, commercial and industrial activities and equity interests
CSN Mining Portugal, Unipessoal Lda.		87.52		87.52		Commercial and representation of products
Companhia Siderúrgica Nacional, LLC		100.00		100.00		Import and distribution/resale of products
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. (2)		47.26		46.30		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		Metallurgical and Equity interests

 (*) Dormant companies, therefore, they are presented in note 9.a., where information on companies accounted for under the equity method and fair value through profit or loss and comprehensive income are disclosed;

1. Transfer of 1% stake in Aceros Mexico CSN from CSN Steel to Companhia Siderúrgica Nacional occurred on February 1, 2018. On September 18, 2018, CSN Steel increased the capital of Aceros Mexico CSN, diluting the direct interest of Companhia Siderúrgica Nacional to 0.08%, with CSN Steel holding 99.92%. On February 1, 2019, the Federal Taxpayers' Registry was canceled and, therefore, the settlement process of Aceros Mexico CSN was terminated, however, before third parties and for the purposes of commercial law, the settlement was retroactive to September 18, 2018;

2.   On May 10, 2019, 501,789 shares of shareholder FINOR, all class B preferred shares, were transferred to shareholder CSN.

3.    Cancellation of CSN Financial Resources Management dated June 13, 2019.

· Exclusive funds

		Equity interests (%)
Exclusive funds		06/30/2019		12/31/2018		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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3. ADOPTION OF NEW ACCOUNTING PRACTICES

· IFRS 16/CPC 06(R2) - Leases

The Company applied as of January 1, 2019, IFRS 16/CPC 06 (R2) – Leases.

As a result, the Company started to recognize in its financial statements the right to use the assets and liabilities of lease arrangements.

The Company opted to apply the modified retrospective approach, recognizing the cumulative effect as an adjustment in the opening balance. For existing contracts on the date of the initial adoption, the right to use was recognized for the amount equal to the lease liability, which was measured at the present value of the future fixed obligations provided for in the contract.

The company applied the exemption provided for in the standard for the non-recognize of the right of use and lease liability for contract with a term of not more than twelve months and that has a low value.

The present value of the lease liabilities was calculated using the interest rate implicit in the contracts and in and in its absence, the Company chose to use the average rate of fundraising.

The effects of the recognition of the standard can be observed in notes 10 and 14.a.

4. CASH AND CASH EQUIVALENTS

			Consolidated				Parent Company
	06/30/2019		12/31/2018		06/30/2019		12/31/2018
Current
Cash and cash equivalents
Cash and banks	1,125,384		1,124,714		427,512		37,323
Short-term investments
In Brazil:
Government securities	19,707		10,247		484		477
Private securities	862,000		609,480		422,516		410,036
	881,707		619,727		423,000		410,513
Abroad:
Time deposits	147,539		503,563		91,005		92,017
Total short-term investments	1,029,246		1,123,290		514,005		502,530
Cash and cash equivalents	2,154,630		2,248,004		941,517		539,853

The funds available established in Brazil, are basically invested in repurchase agreements and Bank Certificate of Deposit (“CDBs”) and yield interest based on the floating of Certificates of Interbank Deposits (“CDI”) and government securities are basically repurchase agreements backed by National Treasury Notes. The Company invests part of the resources through the investments considered exclusive, and their financial statements were consolidated into the Company’s statements. The funds are managed by BNY Mellon Serviços Financeiros DTVM S.A. and Caixa Econômica Federal (CEF).

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.

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5. FINANCIAL INVESTMENTS

		Consolidated								Parent Company
		Current				Non Current				Current
		6/30/2019		12/31/2018		6/30/2019		12/31/2018		6/30/2019		12/31/2018
CDB - Certificate of bank deposit (1)		653,434		882,376						653,434		882,376
Government securities (2)		25,457		13,337						626		621
Time Deposit (3)						7,714		7,772
		678,891		895,713		7,714		7,772		654,060		882,997

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

2. Investments in National Treasury Bills (LFT) managed by its exclusive funds.

3. Investments in Time Deposit in custody to cover additional expenses of the sale of LLC.

6. TRADE RECEIVABLES

			Consolidated				Parent Company
	06/30/2019		12/31/2018		06/30/2019		12/31/2018
Trade receivables
Third parties
Domestic market	1,530,979		1,369,396		1,236,971		1,094,323
Foreign market	1,836,393		852,821		70,221		141,484
	3,367,372		2,222,217		1,307,192		1,235,807
Allowance for doubtful debts	(212,444)		(237,352)		(154,705)		(176,855)
	3,154,928		1,984,865		1,152,487		1,058,952
Related parties (note 18 a)	180,632		93,317		1,101,862		906,865
	3,335,560		2,078,182		2,254,349		1,965,817

In accordance with the 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 in the consolidated totals R$40,364 as of June 30, 2019 (R$46,210 as of December 31, 2018) and in the Parent Company R$ 35,247 (R$40,849 as of December 31,2018).

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

		Consolidated				Parent Company
		06/30/2019		12/31/2018		06/30/2019		12/31/2018
Current		2,607,799		1,514,847		827,684		758,433
Past-due up to 30 days		253,107		177,287		40,178		48,705
Past-due up to 180 days		29,073		47,684		16,805		8,361
Past-due over 180 days		477,393		482,399		422,525		420,308
		3,367,372		2,222,217		1,307,192		1,235,807

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

		Consolidated				Parent Company
		06/30/2019		12/31/2018		06/30/2019		12/31/2018
Opening balance		(237,352)		(191,979)		(176,855)		(140,392)
Estimated losses		(7,484)		(53,706)		(5,275)		(39,042)
Recovery of receivables		32,392		8,333		27,425		2,579
Closing balance		(212,444)		(237,352)		(154,705)		(176,855)

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7. INVENTORIES

			Consolidated				Parent Company
	06/30/2019		12/31/2018		06/30/2019		12/31/2018
Finished goods	1,720,300		1,501,969		1,059,397		951,529
Work in progress	1,695,272		1,217,611		1,463,688		959,414
Raw materials	1,813,993		1,584,140		1,346,553		1,273,029
Spare Parts	857,623		857,402		506,202		495,385
Advances to suppliers	24,200		36,192		23,120		28,185
(-) Provision for losses	(127,688)		(157,754)		(46,987)		(45,076)
	5,983,700		5,039,560		4,351,973		3,662,466

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

				Consolidated				Parent Company
		06/30/2019		12/31/2018		06/30/2019		12/31/2018
Opening balance		(157,754)		(135,840)		(45,076)		(51,968)
Reversal / (losses) for slow-moving and obsolescence		30,066		(21,914)		(1,911)		6,892
Closing balance		(127,688)		(157,754)		(46,987)		(45,076)

8. OTHER CURRENT AND NONCURRENT ASSETS

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

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							Consolidated								Parent Company
	Current				Non-Current				Current				Non-Current
	6/30/2019		12/31/2018		6/30/2019		12/31/2018		6/30/2019		12/31/2018		6/30/2019		12/31/2018
Judicial deposits (note 16)					321,344		347,950						220,846		255,595
Credits with the PGFN (1)					46,774		46,774						46,774		46,774
Recoverable taxes (2)	1,512,267		1,412,335		1,775,481		1,822,388		1,413,846		1,265,003		1,652,870		1,692,274
Prepaid expenses	113,349		49,830		54,630		49,808		72,679		25,716		38,942		34,450
Sea freight   (3)	27,581		117,156								2,357
Actuarial asset - related party (note 18 a)					87,623		99,894						75,778		85,415
Derivative financial instruments (note 13 I)	925		351
Securities held for trading (note 13 I)	7,096		4,503						6,941		4,352
Iron ore inventory  (4)					144,499		144,499
Northeast Investment Fund – FINOR					199		26,598						199		26,598
Loans with related parties (note 18 a and 13 I)	2,798		2,675		806,297		706,605		23,812		22,807		734,419		588,285
Other receivables from related parties (note 18 a)	2,827		3,649		218,840		218,840		15,253		15,395		467,978		458,177
Other receivables (note 13 I)					7,465		7,451						1,132		1,213
Eletrobrás compulsory loan  (note 13 I) (5)					833,284		813,428						832,486		812,803
Dividends receivable  (note 18 a)	47,023		46,171						39,315		259,186
Employee debt	45,052		31,645						29,895		19,684
Other receivables	9,020		12,753						4,104		3,055
Others	100,333		71,956		755		988						754		986
	1,868,271		1,753,024		4,297,191		4,285,223		1,605,845		1,617,555		4,072,178		4,002,570

1. Refers to the excess of judicial deposit originated by the 2009 REFIS (Tax Debt Refinancing Program).

2. Refers mainly to PIS / COFINS, ICMS recoverable and income and social contribution taxes to be offset. On September 20, 2018, the writ of mandamus and special appeal filed in 2006, in which CSN and Federal Union were parties, related to the discussion about the non-inclusion of ICMS in the calculation base of PIS and COFINS, confirmed the CSN's right to offset the amounts unduly paid under these taxes from 2001 to 2014.

3. Refers a payment of freight expenses and maritime insurance over revenues didn’t recognized.

4. Long-term iron ore inventories that will be used after the construction of the processing plant, which will produce pellet feed, expected to start operating in the second half of 2020.

5. This is a fixed amount, certain and due, arising from the res judicata favorable decision to the Company, which is irreversible and irrevocable, to apply the STJ's consolidated position on the subject, which culminated in the conviction of Eletrobrás to the payment of the correct interest and monetary adjustment of the Compulsory Loan. The res judicata decision, as well as the certainty about the amounts involved in the liquidation of the sentence (judicial procedure to request the satisfaction of the right), allowed the conclusion that the entry of this value is certain.

9. 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, 2018 and, accordingly, the Company decided not to repeat it in the condensed interim financial information as of June 30, 2019.

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

														06/30/2019										12/31/2018		06/30/2018
Companies		Number of shares held by CSN (in units)		% Direct equity interest		Participation in										% Direct equity interest		Participation in
						Assets		Liabilities		Shareholders’ equity		Fair Value		Profit / (Loss) for the period				Assets		Liabilities		Shareholders’ equity		Fair Value		Profit / (Loss) for the period
	Investments under the equity method
Subsidiaries
CSN Islands VII Corp.		20,001,000		100.00		338,117		2,035,883		(1,697,766)				(48,671)		100.00		338,645		1,987,741		(1,649,096)				(115,936)
CSN Islands XI Corp.		50,000		100.00		3,074,746		3,234,444		(159,698)				(28,060)		100.00		2,178,010		2,309,647		(131,637)				(48,050)
CSN Islands XII Corp.		1,540		100.00		2,243,878		3,837,419		(1,593,541)				(116,136)		100.00		2,402,671		3,880,076		(1,477,405)				(257,124)
CSN Steel S.L.U.		22,042,688		100.00		3,581,462		137,231		3,444,231				(54,800)		100.00		3,763,095		242,722		3,520,373				1,710,595
Sepetiba Tecon S.A.		254,015,052		99.99		935,694		622,357		313,337				(4,097)		99.99		480,459		163,026		317,433				8,475
Minérios Nacional  S.A.		141,719,295		99.99		129,184		47,557		81,627				9,955		99.99		110,446		38,774		71,672				1,692
Valor Justo - Minérios Nacional										2,123,507												2,123,507
Estanho de Rondônia S.A.		121,861,697		99.99		48,213		49,976		(1,763)				(4,738)		99.99		48,181		45,207		2,974				(1,374)
Companhia Metalúrgica Prada		445,921,292		99.99		679,051		612,317		66,734				(18,834)		99.99		644,954		559,386		85,568				(35,058)
CSN Mineração S.A.		158,419,480		87.52		14,022,950		4,820,498		9,202,452				1,710,442		87.52		13,235,705		4,190,564		9,045,141				317,722
CSN Energia S.A.		43,149		99.99		133,320		40,104		93,216				350		99.99		138,644		45,778		92,866				27,591
FTL - Ferrovia Transnordestina Logística S.A.		442,672,357		91.69		446,785		191,613		255,172				(25,231)		91.69		403,623		123,220		280,403				(16,865)
Companhia Florestal do Brasil		41,923,302		99.99		34,987		1,620		33,367				(19)		99.99		34,990		1,604.0		33,386				(89)
Nordeste Logística		99,999		99.99		81		56		25				(4)		99.99		85		56		29				2
						25,668,468		15,631,075		12,160,900				1,420,157				23,779,508		13,587,801		12,315,214				1,591,581
Joint-venture and Joint-operation
Itá Energética S.A.		253,606,846		48.75		259,084		16,373		242,711				3,039		48.75		258,835		16,288		242,547				5,899
MRS Logística S.A. (1)		63,377,198		18.64		2,013,464		1,253,412		760,052				43,484		18.64		1,563,350		846,813		716,537				39,605
CBSI - Companhia Brasileira de Serviços de Infraestrutura		1,876,146		50.00		26,780		21,578		5,202				1,389		50.00		25,941		19,997		5,944				1,688
Transnordestina Logística S.A. (2)		24,670,093		47.26		4,244,854		3,047,793		1,197,060		271,116		(9,095)		46.30		4,065,604		2,883,851		1,181,753		271,116		(10,561)
						6,544,182		4,339,156		2,205,025		271,116		38,817				5,913,730		3,766,949		2,146,781		271,116		36,631
Associates
Arvedi Metalfer do Brasil		46,994,971		20.00		40,712		26,602		14,110				(294)		20.00		40,712		26,308		14,404				(1,617)
						40,712		26,602		14,110				(294)				40,712		26,308		14,404				(1,617)
Classified at fair value through profit or loss (note 13 I)
Usiminas										2,118,777												2,250,623
Panatlântica										41,324												28,566
										2,160,101												2,279,189
Other Investiments
Profit on subsidiaries' inventories										(52,580)				63,794								(116,375)				(996)
Others										63,538				171								63,538				(185)
										10,958				63,965								(52,837)				(1,181)
Total investiments										16,822,210				1,522,645								16,973,867				1,625,414
Classification of investiments in the balance sheet
Investiments in assets										20,274,978												20,232,005
Investiments with equity deficit										(3,452,768)												(3,258,138)
										16,822,210												16,973,867

(1) On June 30, 2019 and December 31, 2018, the Company directly owned 26,611,282 common shares, 2,673,312 Class A preferred shares and 34,092,604 Class B preferred shares, totaling 36,765,916 preferred shares of MRS Logística S.A.;

(2) On June 30, 2019, the Company owned 24,168,304 common shares, 501,789 Class B preferred shares. As of December 31,2018, owned 24,168,304 common shares and didn’t have preferred shares);

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.

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

			Consolidated				Parent Company
	06/30/2019		12/31/2018		06/30/2019		12/31/2018
Opening balance of investments	5,630,613		5,499,995		20,232,005		22,894,885
Opening balance of loss provisions					(3,258,138)		(1,366,480)
Capital increase	26,779				26,779		81,594
Dividends (1)	(2,144)		(87,846)		(1,558,334)		(5,529,277)
Comprehensive income (2)	(1,933)		272		(23,277)		15,186
Equity in results of affiliated companies (3)	78,958		173,145		1,522,645		816,632
Receipt arising from the sale of Usiminas’ shares			(39,377)				(39,377)
Update shares of fair value through profit or loss (Note 13 II)	(119,470)		96,133		(119,470)		96,133
Amortization of fair value - investiment MRS	(5,873)		(11,746)
Others	21		37				4,571
Closing balance of investments	5,606,951		5,630,613		20,274,978		20,232,005
Investiments with equity deficit					(3,452,768)		(3,258,138)
Total	5,606,951		56,306,13		16,822,210		16,973,867

1. In 2019, refers to the allocation of dividends of Itá Energética, CSN Mineração and joint venture CBSI – Companhia Brasileira de Serviços de Infraestrutura.  

2. Refers to a 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
	06/30/2019		06/30/2018
Equity in results of affiliated companies
MRS Logística S.A.	86,946		79,190
CBSI - Companhia Brasileira de Serviços de Infraestrutura	1,389		1,688
Transnordestina Logística S.A	(9,095)		(10,561)
Arvedi Metalfer do Brasil S.A	(294)		(1,617)
Others	12		(186)
	78,958		68,514
Eliminations
To cost of sales	(27,793)		(19,752)
To taxes	9,450		6,716
Others
Amortization of fair value - Investment in MRS	(5,873)		(5,873)
Others	157		2,559
Equity in results of affiliated companies adjusted	54,899		52,164

9.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:

								06/30/2019								12/31/2018
		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%		47.26%		48.75%		34.94%		50.00%		46.30%		48.75%
Balance sheet
Current assets
Cash and cash equivalents		920,718		710		25,120		48,311		345,962		2,091		19,234		29,870
Advances to suppliers		14,196		135		74		319		17,750		73		1,734		937
Other current assets		802,135		42,898		57,530		16,041		736,768		41,284		108,851		16,718
Total current assets		1,737,049		43,743		82,724		64,671		1,100,480		43,448		129,819		47,525
Non-current assets
Other non-current assets		711,638		2,257		259,063		25,138		804,570		2,111		222,630		25,840
Investments, PP&E and intangible assets		8,353,505		7,559		8,639,900		441,645		6,482,292		6,324		8,428,567		457,578
Total non-current assets		9,065,143		9,816		8,898,963		466,783		7,286,862		8,435		8,651,197		483,418
Total Assets		10,802,192		53,559		8,981,687		531,454		8,387,342		51,883		8,781,016		530,943
Current liabilities
Borrowings and financing		648,553		966		102,463				422,793		4,350		75,906
Leases		245,508
Other current liabilities		1,043,334		39,963		135,700		17,673		1,368,290		33,844		179,816		18,298
Total current liabilities		1,937,395		40,929		238,163		17,673		1,791,083		38,194		255,722		18,298
Non-current liabilities
Borrowings and financing		2,507,985		1,752		5,991,822				2,111,518		1,262		5,754,073
Leases		1,718,058
Other non-current liabilities		561,089		475		218,840		15,912		640,535		539		218,839		15,113
Total non-current liabilities		4,787,132		2,227		6,210,662		15,912		2,752,053		1,801		5,972,912		15,113
Shareholders’ equity		4,077,665		10,403		2,532,862		497,869		3,844,206		11,888		2,552,382		497,532
Total liabilities and shareholders’ equity		10,802,192		53,559		8,981,687		531,454		8,387,342		51,883		8,781,016		530,943

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		01/01/2019 a 06/30/2019								01/01/2018 a 06/30/2018
		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%		47.26%		48.75%		34.94%		50.00%		46.30%		48.75%
Statements of Income
Net revenue		1,642,617		93,509				81,090		1,732,202		72,079				83,808
Cost of sales and services		(1,190,458)		(81,997)				(41,628)		(1,194,990)		(62,994)				(35,479)
Gross profit		452,159		11,512				39,462		537,212		9,085				48,329
Operating (expenses) income		37,812		(6,423)		(9,500)		(30,356)		(115,411)		(4,760)		(7,027)		(29,786)
Finance income (expenses), net		(131,605)		(569)		(10,025)		322		(95,259)		(65)		(15,783)		(228)
Income before income tax and social contribution		358,366		4,520		(19,525)		9,428		326,542		4,260		(22,810)		18,315
Current and deferred income tax and social contribution		(125,077)		(1,742)				(3,194)		(114,063)		(884)				(6,216)
(Loss) profit for the year, net		233,289		2,778		(19,525)		6,234		212,479		3,376		(22,810)		12,099

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

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.

The assumptions used to evaluate the impairment test in December 2018 remain valid and there is no event to justify records of impairment in the first quarter.

10. PROPERTY, PLANT AND EQUIPMENT

															Consolidated
	Land		Buildings and Infrastructure		Machinery, equipment and facilities		Furniture and fixtures		Construction in progress		Right of use		Other (*)		Total
Balance at December 31, 2018	287,854		2,678,638		11,687,271		30,530		3,282,436				80,135		18,046,864
Cost	287,854		3,751,429		22,426,782		165,331		3,282,436				355,768		30,269,600
Accumulated depreciation			(1,072,791)		(10,739,511)		(134,801)						(275,633)		(12,222,736)
Balance at December 31, 2018	287,854		2,678,638		11,687,271		30,530		3,282,436				80,135		18,046,864
Effect of foreign exchange differences	(1,316)		(2,951)		(5,650)		(102)		(425)				(498)		(10,942)
Acquisitions	1,681		103		56,089		1,059		737,520				2,838		799,290
Capitalized interest (notes 24 and 28)			14						41,382						41,396
Write-off (note 23)	(189)		(130)		(1,117)		(3)		(30,354)						(31,793)
Depreciation (note 22)			(65,946)		(553,230)		(2,647)				(26,161)		(8,240)		(656,224)
Transfers to other asset categories	795		214,097		452,236		245		(670,673)				3,300
Transfer to intangible assets			(31)						(1,452)						(1,483)
Right of use- Initial recognition (Note 14a)											640,989				640,989
Right of use - Remesurement  (note 14 a)											3,211				3,211
Others			(43)		(1,146)				(24)				(430)		(1,643)
Balance at June 30, 2019	288,825		2,823,751		11,634,453		29,082		3,358,410		618,039		77,105		18,829,665
Cost	288,825		3,978,072		22,880,842		165,668		3,358,410		644,200		363,169		31,679,186
Accumulated depreciation			(1,154,321)		(11,246,389)		(136,586)				(26,161)		(286,064)		(12,849,521)
Balance at June 30, 2019	288,825		2,823,751		11,634,453		29,082		3,358,410		618,039		77,105		18,829,665

															Parent Company
	Land		Buildings and Infrastructure		Machinery, equipment and facilities		Furniture and fixtures		Construction in progress		Right of use		Other (*)		Total
Balance at December 31, 2018	95,107		1,047,334		7,093,263		12,372		1,294,908				19,989		9,562,973
Cost	95,107		1,323,762		13,411,258		97,642		1,294,908				123,104		16,345,781
Accumulated depreciation			(276,428)		(6,317,995)		(85,270)						(103,115)		(6,782,808)
Balance at December 31, 2018	95,107		1,047,334		7,093,263		12,372		1,294,908				19,989		9,562,973
Acquisitions	1,686		13		18,008		233		377,701				1,716		399,357
Capitalized interest (notes 24 and 28)									11,032						11,032
Write-off (note 23)					(11)		(3)		(15,018)						(15,032)
Depreciation (note 22)			(17,569)		(282,937)		(1,193)				(6,756)		(1,690)		(310,145)
Transfers to other asset categories	788		18,761		155,519		(3)		(176,795)				1,730
Right of use- Initial recognition  (note 14 a)											61,072				61,072
Right of use - remesurement  (note 14 a)											(9,567)				(9,567)
Others					(333)										(333)
Balance at June 30, 2019	97,581		1,048,539		6,983,509		11,406		1,491,828		44,749		21,745		9,699,357
Cost	97,581		1,342,487		13,584,787		97,848		1,491,828		51,505		126,548		16,792,584
Accumulated depreciation			(293,948)		(6,601,278)		(86,442)				(6,756)		(104,803)		(7,093,227)
Balance at June 30, 2019	97,581		1,048,539		6,983,509		11,406		1,491,828		44,749		21,745		9,699,357

(*) 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 movement of the rights of use as of June 30, 2019 is as follows.

Consolidated

	Land		Buildings and Infrastructure		Machinery, equipment and facilities		Other		Total
Initial recognition – Rights of use	556,133		54,513		9,783		20,560		640,989
Remeasurement	3,321		7,421				(7,531)		3,211
Depreciation	(15,440)		(3,506)		(1,631)		(5,584)		(26,161)
Balance at June 30, 2019	544,014		58,428		8,152		7,445		618,039

Parent Company

	Land		Machinery, equipment and facilities		Other		Total
Initial recognition – Rights of use	37,864		9,784		13,424		61,072
Remesurement – Right of use	1,147				(10,714)		(9,567)
Depreciation	(3,964)		(1,631)		(1,161)		(6,756)
Balance at June 30, 2019	35,047		8,153		1,549		44,749

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

								Consolidated
		Project description		Start date		Completion date		06/30/2019		12/31/2018
Logistics
		Current investments for maintenance of current operations.						74,974		89,595
								74,974		89,595
Mining
		Expansion of Casa de Pedra Mine capacity production.		2007		2020	(1)	861,896		844,194
		Expansion of TECAR export capacity.		2009		2022	(2)	296,231		289,298
		Current investments for maintenance of current operations.						561,897		725,616
								1,720,024		1,859,108
Steel
		Supply of 16 torpedo’s cars for operation in the steel industry		2008		2020		96,997		94,920
		Current investments for maintenance of current operations.					(3)	786,629		558,922
								883,626		653,842
Cement
		Construction of cement plants.		2011		2023	(4)	574,683		585,163
		Current investments for maintenance of current operations.						105,103		94,728
								679,786		679,891
Construction in progress								3,358,410		3,282,436

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

(2) Estimated completion date of phase 60 Mtpa;

(3) Refers substantially to the technological modernization continuous running machines and reform of blast furnace 3, at UPV;

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

The average estimated useful lives are as follows (in years):

			Consolidated				Parent Company
	06/30/2019		12/31/2018		06/30/2019		12/31/2018
In Years
Buildings	39		38		40		41
Machinery, equipment and facilities	22		22		23		24
Furniture and fixtures	13		11		12		11
Others	17		15		14		13

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11. INTANGIBLE ASSETS

													Consolidated				Parent Company
	Goodwill		Customer relationships		Software		Trademarks and patents		Rights and licenses (*)		Others		Total		Software		Total
Balance at December 31, 2018	3,590,931		288,773		54,972		150,009		3,166,999		1,491		7,253,175		49,613		49,613
Cost	3,831,338		573,614		161,067		150,009		3,185,701		1,491		7,903,220		125,768		125,768
Accumulated depreciation	(131,077)		(284,841)		(106,095)				(18,702)				(540,715)		(76,155)		(76,155)
Adjustment for accumulated recoverable value	(109,330)												(109,330)				-
Balance at December 31, 2018	3,590,931		288,773		54,972		150,009		3,166,999		1,491		7,253,175		49,613		49,613
Effect of foreign exchange differences			(5,296)		(27)		(2,714)				(26)		(8,063)
Acquisitions and expeditures					49								49
Transfer to property, plant and equipment					1,483								1,483
Amortization (note 22)			(23,204)		(4,984)				(80)				(28,268)		(3,752)		(3,752)
Balance at June 30, 2019	3,590,931		260,273		51,493		147,295		3,166,919		1,465		7,218,376		45,861		45,861
Cost	3,831,338		563,262		162,491		147,295		3,185,701		1,465		7,891,552		125,768		125,768
Accumulated depreciation	(131,077)		(302,989)		(110,998)				(18,782)				(563,846)		(79,907)		(79,907)
Adjustment for accumulated recoverable value	(109,330)												(109,330)
Balance at June 30, 2019	3,590,931		260,273		51,493		147,295		3,166,919		1,465		7,218,376		45,861		45,861

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

The average useful lives by nature are as follows (in years):

			Consolidated				Parent Company
	06/30/2019		12/31/2018		06/30/2019		12/31/2018
Software	9		7		10		8
Customer relationships	13		13

The assumptions used for the impairment test in December 2018 are still effective and there is no event that justifies the recognition of impairment in the quarter.

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12. BORROWINGS, FINANCING AND DEBENTURES

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

				Consolidated								Parent Company
		Current liabilities				Non-current liabilities				Current liabilities				Non-current liabilities
		06/30/2019		12/31/2018		06/30/2019		12/31/2018		06/30/2019		12/31/2018		06/30/2019		12/31/2018
Debt agreements in the international market
Variable interest in US$:
Prepayment		1,938,472		1,016,737		2,737,724		3,830,240		1,938,473		1,016,737		2,737,723		3,830,240
Fixed interest in US$:
Bonds, Perpetual Bonds and ACC	(1)	1,185,702		2,490,178		10,667,323		8,613,491		398,527		478,463
Intercompany										2,703,094		3,053,435		5,849,930		3,612,811
Fixed interest in EUR
Intercompany										10,947		16,988		1,162,390		997,809
Others		181,202		181,056		163,451		106,535
		3,305,376		3,687,971		13,568,498		12,550,266		5,051,041		4,565,623		9,750,043		8,440,860
Debt agreements in Brazil
Securities with variable interest in R$:
BNDES/FINAME, Debentures, NCE and CCB	(2)	1,653,483		1,890,451		10,093,026		10,710,678		1,620,549		1,827,769		8,887,076		9,314,315
Securities with fixed interest in R$:
Prepayment		49,273		103,375						49,273		103,375
		1,702,756		1,993,826		10,093,026		10,710,678		1,669,822		1,931,144		8,887,076		9,314,315
Total Borrowings and Financing		5,008,132		5,681,797		23,661,524		23,260,944		6,720,863		6,496,767		18,637,119		17,755,175
Transaction Costs and Issue Premiums		(40,244)		(28,358)		(113,844)		(87,309)		(27,361)		(22,379)		(80,474)		(67,967)
Total Borrowings and Financing + Transaction Costs		4,967,888		5,653,439		23,547,680		23,173,635		6,693,502		6,474,388		18,556,645		17,687,208

(1) In April 2019, the Company issued debt securities in the foreign market ("Bonds"), through its subsidiary CSN Resources SA, in the amount of US$ 1 billion, being US$ 400 million with maturity in 2023 and US$600 million with maturity in 2026, both with interest of 7.625% per annum. Between April and May 2019, a tender offer ("Tender Offer") of the Notes issued by CSN Islands XI Corp. and CSN Resources S.A., subsidiaries of the Company, having repurchased US$ 1 billion in bonds with maturity in 2019 and 2020.

(2) In January 2019, the Company issued debt securities in the domestic market (“Debentures”), in the amount of R$ 1,950 million, maturing in 2023 and interest of 126,8% of CDI.

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The following table shows the average interest rate:

		Consolidated						Parent Company
				06/30/2019				03/30/2019
		Average interest rate (*)		Total debt		Average interest rate (*)		Total debt
US$		5.34%		16,529,221		4.24%		13,627,748
R$		8.14%		11,795,782		8.12%		10,556,898
EUR		3.88%		344,653		3.88%		1,173,336
				28,669,656				25,357,982

(i) In order to determine the average interest rates for debt contracts with floating rate, the Company used the rates applied as of June 30, 2019. Considers the interest rate of intercompany contracts.

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

As of June 30, 2019, the inflation-adjusted principal of long-term borrowings, financing and debentures by maturity year is as follows:

								Consolidated		Parent Company
								06/30/2019		06/30/2019
								Principal		Principal
		Bank loans		Capital markets		Development agencies		Total		Total
2020		1,052,256		1,791,653		58,496		2,902,405		2,126,510
2021		2,598,713		636,667		59,152		3,294,532		3,759,737
2022		2,655,150		556,666		55,082		3,266,898		3,757,987
2023		2,685,309		3,524,150		53,841		6,263,300		2,996,036
2024		1,172,367				64,602		1,236,969		4,651,870
After 2024				2,299,321		565,899		2,865,220		1,344,979
Perpetual bonds				3,832,200				3,832,200
		10,163,795		12,640,657		857,072		23,661,524		18,637,119

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12.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
		06/30/2019				12/31/2018				06/30/2019			12/31/2018
Opening balance		28,827,074				29,510,844				24,161,596			29,033,017
Raised		7,738,306				2,154,471				5,009,348			602,110
Payment of principal		(7,899,269)				(5,019,978)				(3,766,670)			(6,098,209)
Payment of charges		(1,013,598)				(2,141,710)				(689,264)			(1,670,988)
Provision of charges		998,987				2,009,688				717,873			1,541,639
Disposal of LLC						(10,544)
Others  (1)		(135,932)				2,324,303				(182,736)			754,027
Closing balance		28,515,568				28,827,074				25,250,147			24,161,596

1. Includes unrealized exchange and monetary variations.

As of June 30,2019, the Group raised and paid borrowings as shown below:

· Funding raised and amortizations:

							Consolidated 06/30/2019
Nature			Raised		Amortization of principal		Amortization of charges
Prepayment					(131,136)		(126,680)
Bonds, Perpetual bonds, ACC and facility			5,489,306		(4,621,630)		(408,677)
BNDES/FINAME, Debentures, NCE and CCB			2,249,000		(3,146,503)		(478,241)
Total			7,738,306		(7,899,269)		(1,013,598)

· 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, 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, under penalty of early maturity. The Company has complied with all financial and non-financial obligations (covenants) of its current contracts, not considered any non-compliances already remedied or that have not generated the acceleration of debts or any type of accounting provision.

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12.c) Guarantees

The Company is the guarantor or is liable for the guarantees given to its subsidiaries and joint ventures as follows:

	Currency		Maturities		Borrowings				Tax foreclosure				Others				Total
					6/30/2019		12/31/2018		6/30/2019		12/31/2018		6/30/2019		12/31/2018		6/30/2019		12/31/2018
Transnordestina Logísitca	R$		Up to 09/19/2056 and indefinite		2,428,194		2,108,917		26,179		35,336		8,494		8,231		2,462,867		2,152,484
FTL - Ferrovia Transnordestina	R$		Up to 04/01/2021		26,430		62,407										26,430		62,407
Cia Metalurgica Prada	R$		Indefinite						984		333		3,031		11,942		4,015		12,275
CSN Energia	R$		Up to 11/26/2023 and indefinite						6,195		2,829		1,920		1,920		8,115		4,749
CSN Mineração	R$		Up to 12/21/2024		1,407,363		1,407,363										1,407,363		1,407,363
Estanho de Rondônia	R$		7/15/2022		3,153		3,153										3,153		3,153
Minérios Nacional S.A.	R$		Up to 09/10/2021		7,305		7,305										7,305		7,305
Total in R$					3,872,445		3,589,145		33,358		38,498		13,445		22,093		3,919,248		3,649,736
CSN Islands XI	US$		9/21/2019		142,346		547,094										142,346		547,094
CSN Islands XII	US$		Perpetual		1,000,000		1,000,000										1,000,000		1,000,000
CSN Resources	US$		Up to 04/17/2026		1,783,603		1,402,906										1,783,603		1,402,906
Total in US$					2,925,949		2,950,000										2,925,949		2,950,000
CSN Steel S.L.	EUR		1/13/2020		24,000		48,000										24,000		48,000
Lusosider Aços Planos	EUR		Indefinite		50,000		75,000										50,000		75,000
Total in EUR					74,000		123,000										74,000		123,000
Total in R$					11,535,366		11,976,657										11,535,366		11,976,657
					15,407,811		15,565,802		33,358		38,498		13,445		22,093		15,454,614		15,626,393

13. FINANCIAL INSTRUMENTS

I - Identification and measurement of financial instruments

The Company can operate with 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 can operate into derivative transactions, currency swap, interest rate swap and commodity swap operations.

Considering the nature of the instruments, the fair value is basically determined by the use of quotations in the open capital market of Brazil and the Commodities and Futures Exchange. The amounts recorded in current assets and liabilities have immediate liquidity or maturity, mostly in terms of short time. Considering the term and the characteristics of these instruments, the book values approximate the fair values.

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· Classification of financial instruments

														Consolidated
								06/30/2019						12/31/2018
		Notes		Fair value through profit or loss		Measured at amortized cost		Balances		Fair value through profit or loss		Measured at amortized cost		Balances
	Assets
Current
Cash and cash equivalents		4				2,154,630		2,154,630				2,248,004		2,248,004
Short-term investments		5				678,891		678,891				895,713		895,713
Trade receivables		6				3,335,560		3,335,560				2,078,182		2,078,182
Dividends receivable		8				47,023		47,023				46,171		46,171
Derivative financial instruments		8		925				925		351				351
Trading securities		8		7,096				7,096		4,503				4,503
Loans - related parties		8				2,798		2,798				2,675		2,675
Total				8,021		6,218,902		6,226,923		4,854		5,270,745		5,275,599
Non current
Short-term investments		5				7,714		7,714				7,772		7,772
Other trade receivables		8				7,465		7,465				7,451		7,451
Compulsory loan -  Eletrobrás		8				833,284		833,284				813,428		813,428
Loans - related parties		8				806,297		806,297				706,605		706,605
Investments		9		2,160,101				2,160,101		2,279,189				2,279,189
Total				2,160,101		1,654,760		3,814,861		2,279,189		1,535,256		3,814,445
Total Assets				2,168,122		7,873,662		10,041,784		2,284,043		6,806,001		9,090,044
Liabilities
Current
Borrowings and financing		12				5,008,132		5,008,132				5,681,797		5,681,797
Leases		14.a				41,442		41,442
Trade payables						3,493,753		3,493,753				3,408,056		3,408,056
Trade payables - Drawee risk		14				504,819		504,819				65,766		65,766
Dividends and interest on capital		14				2,210		2,210				932,005		932,005
Total						9,050,356		9,050,356				10,087,624		10,087,624
Non current
Borrowings and financing		12				23,661,524		23,661,524				23,260,944		23,260,944
Leases		14.a				584,945		584,945
Total						24,246,469		24,246,469				23,260,944		23,260,944
Total Liabilities						33,296,825		33,296,825				33,348,568		33,348,568

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														Parent Company
								6/30/2019						12/31/2018
		Notes		Fair value through profit or loss		Measured at amortized cost		Balances		Fair value through profit or loss		Measured at amortized cost		Balances
	Assets
Current
Cash and cash equivalents		4				941,517		941,517				539,853		539,853
Short-term investments		5				654,060		654,060				882,997		882,997
Trade receivables		6				2,254,349		2,254,349				1,965,817		1,965,817
Dividends receivable		8				39,315		39,315				259,186		259,186
Trading securities		8		6,941				6,941		4,352				4,352
Loans - related parties		8				23,812		23,812				22,807		22,807
Total				6,941		3,913,053		3,919,994		4,352		3,670,660		3,675,012
Non current
Outros títulos a receber		8				1,132		1,132				1,213		1,213
Compulsory loan -  Eletrobrás		8				832,486		832,486				812,803		812,803
Loans - related parties		8				734,419		734,419				588,285		588,285
Investiments		9		2,160,101				2,160,101		2,279,189				2,279,189
Total				2,160,101		1,568,037		3,728,138		2,279,189		1,402,301		3,681,490
Total assets				2,167,042		5,481,090		7,648,132		2,283,541		5,072,961		7,356,502
Liabilities
Current
Borrowings and financing		12				6,720,863		6,720,863				6,496,767		6,496,767
Leases		14.a				11,664		11,664
Trade payables						2,763,632		2,763,632				2,655,091		2,655,091
Trade payables - Drawee risk		14				504,819		504,819				65,766		65,766
Dividends and interest on capital		14				2,210		2,210				900,541		900,541
Total						10,003,188		10,003,188				10,118,165		10,118,165
Non Current
Borrowings and financing		12				18,637,119		18,637,119				17,755,175		17,755,175
Leases		14.a				33,656		33,656
Total						18,670,775		18,670,775				17,755,175		17,755,175
Total Liabilities						28,673,963		28,673,963				27,873,340		27,873,340

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· 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:

Consolidated				06/30/2019						12/31/2018
		Level 1		Level 2		Balances		Level 1		Level 2		Balances
Assets
Current
Financial assets at fair value through profit or loss
Derivative financial instruments				925		925				351		351
Trading securities		7,096				7,096		4,503				4,503
Non-current
inancial assets at fair value through profit or loss
Investments		2,160,101				2,160,101		2,279,189				2,279,189
Total Assets		2,167,197		925		2,168,122		2,283,692		351		2,284,043

Level 1: quoted prices in active markets for identical assets or liabilities.

Level 2: Includes observable inputs in market such as interest rates, exchange etc., but not prices traded in active markets.

There are no assets and liabilities classified as level 3.

II – Investments in securities measured at fair value through profit or loss

The Company has investments in common shares (USIM3), preferred shares (USIM5) of Usiminas (“Ações Usiminas”) and shares of Panatlântica S.A (PATI 3), which are designated as fair value through profit or loss, since the nature of the investment was not included in the other categories of financial instruments.

Assets are classified as a non-current asset recognized as investment and are recorded at fair value, based on the market price quotation on the stock exchange (B3 S.A.). In accordance with the Company's policy, gains and losses arising from changes in the share price are recorded directly in the statement of income under Other Operating Income and Expenses.

		06/30/2018						12/31/2018						06/30/2019
Class of shares		Quantity		Share price		Closing balance		Quantity		Share price		Closing balance		Fair value adjustment recognized in profit or loss (note 23)
USIM3		107,156,651		10.50		1,125,145		107,156,651		11.44		1,225,872		(100,727)
USIM5		111,144,456		8.94		993,632		111,144,456		9.22		1,024,752		(31,120)
PATI3		2,016,792		20.49		41,324		1,997,642		14.30		28,565		12,377
						2,160,101						2,279,189		(119,470)

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As of June 30,2019 and December 31, 2018, the Company's interest in USIMINAS comprised 15.19% in common shares and 20.29% in preferred shares. As of June 30,2019 and December 31, 2018, the Company's interest in Panatlântica comprised 11.31% of shares.

On April 9, 2014, CADE issued a decision regarding Usiminas' shares held by CSN, and CSN entered into a Performance Commitment Agreement, or TCD, with CADE in respect thereof. Under the terms of the CADE and TCD decision, CSN must reduce its participation in USIMINAS, within a specified period. In March 2019, an amendment was made to the TCD, with the purpose of extending the period originally scheduled for sale of the shares. The deadline and percentage reduction are confidential. In addition, the political rights in Usiminas will continue to be suspended until the Company reaches the limits established in the TCD.

• Share market price risks

The Company is exposed to the risk of changes in the price of the shares due to the investments, valued at fair value through profit or loss that have their prices based on the market price.

III -          Financial risk management:

The Company follows risk management strategies, with guidelines in relation to the risks incurred by the company. The nature and general position of financial risks is regularly monitored and managed to assess the results and the financial impact on cash flow. The credit limits and hedge quality of the counterparties are also periodically reviewed.

Market risks are protected when it is considered necessary to support the corporate strategy or when it is necessary to maintain the level of financial flexibility.

The Company may manage some of the risks through the use of derivative instruments, not associated with any speculative trading or short selling.

13.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 June 30, 2019 is as follows:

				06/30/2019
Foreign Exchange Exposure		(Amounts in US$’000)		(Amounts in €’000)
Cash and cash equivalents overseas		295,227		5,181
Trade receivables		549,103		1,908
Other assets		4,782		3,983
Total Assets		849,112		11,072
Borrowings and financing		(4,295,385)		(24,388)
Trade payables		(108,531)		(8,290)
Other liabilities		(3,499)		(1,327)
Total Liabilities		(4,407,415)		(34,005)
Foreign exchange exposure		(3,558,303)		(22,933)
Cash flow hedge accounting		1,600,045
Net Investment hedge accounting				24,000
Net foreign exchange exposure		(1,958,258)		1,067
Perpetual Bonds		1,000,000
Net foreign exchange exposure excluding perpetual bonds		(958,258)		1,067

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CSN uses as strategy hedge accounting, as well as 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 13b) we show the derivatives and hedging strategies to hedge foreign exchange and interest rate risks.

13.b) Hedging instruments: Derivatives and cash flows hedge accounting and net investment hedge in foreign operations:

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

· Portfolio of derivative financial instruments

Swap cambial Dólar x Euro

The subsidiary Lusosider has derivative operations to hedge its exposure of the dollar against the euro.

Consolidated

06/30/2019

Appreciation (R$)

Fair value (market)

Impact on financial income (expenses) in 2019

Counterparties

Maturity

Functional Currency

Notional amount

Asset position

Liability position

Amounts receivable / (payable)

BCP

02/07/2020

Dollar

32,102

122,955

(122,030)

925

573

Total dollar-to-euro swap

32,102

122,955

(122,030)

925

573

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

							06/30/2019	06/30/2018
Instruments		Assets				Finance income (expenses), net (Note 24)
		Current		Total
Dollar to euro swap		925		925		573		3,829
		925		925		573		3,829

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· Cash flow hedge accounting

Beginning November 1, 2014, the Company designate 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 fluctuations on liabilities and on exports. The adoption of this hedge accounting does not entail entering into any financial instrument. As of June 30, 2019, US$1,600,045  in exports to be carried out from July 2019 until February 2023 are designated.

In order to support the aforementioned designations, the Company prepared formal documentation indicating how the hedge designation is aligned with CSN's objective and risk management strategy, identifying the hedging instruments used, the hedge object, the nature of the risk to be hedged and demonstrating the expectation of high effectiveness of the designated relations. Debt instruments have been designated in amounts equivalent to the portion of future exports. Therefore, the exchange variation of the instrument and the object are similar. According to the Company's accounting policy, continuous evaluations of prospective and retrospective effectiveness should be carried out, comparing the amounts designated with the amounts expected and approved in the Management's budgets, as well as the amounts exported.

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.

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The table below shows a summary of the hedging relationships as of June 30, 2019:

																		06/30/2019
Designation Date		Hedging Instrument		Hedged item		Type of hedged risk		Hedged period		Exchange rate on designation		Designated amounts (US$’000)		Amortizated part (USD'000)		ffect on Result (*) (R$'000)		Impact on Shareholders' equity (R$'000)
3/11/2014		Export prepayments in US$ to third parties		Part of the highly probable future monthly iron ore exports		Foreign exchange - R$ vs. US$ spot rate		October 2016 - September 2019		2.4442		500,000		(450,001)		(298,336)		(69,399)
1/12/2014		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 - February 2019		2.5601		175,000		(175,000)		(23,184)
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						(115,410)
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 - March 2021		3.1813		60,000						(39,054)
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 - March 2021		3.2850		100,000						(54,720)
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 - October 2022		3.2850		30,000		(6,000)				(13,133)
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 - October 2022		3.3254		100,000		(20,000)				(40,544)
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 - October 2022		3.3557		25,000		(5,000)				(9,530)
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 - October 2022		3.3557		70,000		(14,000)				(26,684)
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 - October 2022		3.3557		30,000		(6,000)				(11,436)
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 - October 2022		3.3815		30,000		(6,000)				(10,817)
3/8/2015		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 - October 2022		3.3940		355,000		(11,998)				(150,303)
2/4/2018		Bonds		Part of the highly probable future monthly iron ore exports		Foreign exchange - R$ vs. US$ spot rate		July 2018 - February 2023		3.3104		1,170,045		(451,001)		(125,139)		(375,203)
Total												2,745,045		(1,145,000)		(446,659)		(916,233)

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

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 June 30, 2019 is as follows:

	12/31/2018		Movement		Realization		06/30/2019
Cash flow hedge accounting	1,441,295		(78,403)		(446,659)		916,233
Fair value of cash flow hedge accounting, net of taxes	1,441,295		(78,403)		(446,659)		916,233

As of June 30, 2019, 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 finance income and costs line item, and the exchange difference on the net assets of the foreign operation directly affected the shareholder’s 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 June 30, 2019 are as follows:

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06/30/2019

Designation Date

Hedging Instrument

Hedged item

Type of hedged risk

Exchange rate on designation

Designated amounts (EUR'000)

Amortized part (USD’000)

Impact on shareholders' equity

09/01/2015

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

(96,000)

(2,654)

Total

120,000

(96,000)

(2,654)

The movement in the amounts related to net investment hedge recognized in shareholders’ equity as of June 30, 2019 is as follows:

	12/31/2018		Movement		06/30/2019
Net Investment hedge accounting	3,941		(6,595)		(2,654)
Fair value of net investment hedge in foreign operations	3,941		(6,595)		(2,654)

As of June 30, 2019, the hedging relationships established by the Company were effective, according to prospective tests conducted. Therefore, no reversal for hedge ineffectiveness was recognized.

13.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 June 30, 2019.

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

								06/30/2019
Currency		Exchange rate		Probable scenario		Scenario 1		Scenario 2
USD		3.8322		3.8065		4.7903		5.7483
EUR		4.3587		4.2667		5.4484		6.5381
USD x EUR		1.1380		1.1215		1.4225		1.7070
						06/30/2019
Interest		Interest rate		Scenario 1		Scenario 2
CDI		6.40%		8.00%		9.60%
TJLP		6.26%		7.83%		9.39%
Libor		2.20%		2.75%		3.30%

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

										06/30/2019
Instruments		Notional		Risk		Probable scenario (*)		Scenario 1		Scenario 2
Hedge accounting of exports		1,600,045		Dollar		(41,121)		1,532,923		3,065,846
Currency position		(3,558,303)		Dollar		91,448		(3,409,032)		(6,818,064)
(not including exchange derivatives above)
Consolidated exchange position		(1,958,258)		Dollar		50,327		(1,876,109)		(3,752,218)
(including exchange derivatives above)
Net Investment hedge accounting		24,000		Euro		(2,208)		26,152		52,304
Currency position		(22,933)		Euro		2,110		(24,990)		(49,980)
Consolidated exchange position		1,067		Euro		(98)		1,162		2,324
(including exchange derivatives above)
Dollar-to-euro swap		32,102		Dollar		(2,734)		23,666		40,060

 (*) The probable scenarios were calculated considering the following variations for the risks: Real x Dollar – appreciation of Real by 0.67% / Real x Euro – appreciation of Real by 2.11%. Euro x Dollar – appreciation of Euro by 1.45%. Source: quotations from Central Bank of Brazil and Central Bank of Europe on 07/08/2019.

· 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 June 30, 2019.

												Consolidated
										Impact on profit or loss
Changes in interest rates		% p.a		Assets		Liabilities		Probable scenario (*)		Scenario 1		Scenario 2
TJLP		6.26				(903,139)		(2,357)		(14,134)		(28,268)
Libor		2.20				(4,613,458)		(62,738)		(25,380)		(50,760)
CDI		6.40		862,000		(10,827,886)		(40,103)		(159,454)		(318,908)

 (*) The sensitivity analysis is based on the assumption of maintaining, as a probable scenario, the market values as of June 30, 2019 recognized in the company's assets and liabilities.

13.d) Liquidity risk

It is the risk that the Company does not have sufficient liquid resources to honor its financial commitments, as a result of mismatching of term or volume between expected receipts and payments.

In order to manage the liquidity of the cash in local and foreign currency, premises of disbursements and future receipts are established, being monitored daily by the Treasury area. The payment schedules for the long-term portions of the loans and financing and debentures are presented in Note 12.

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

									Consolidated
At June 30, 2019	Less than one year		From one to two years		From two to five years		Over five years		Total
Borrowings, financing and debentures (note 12)	5,008,132		6,196,937		10,767,167		6,697,420		28,669,656
Lease (Note 14a)	41,442		14,252		133,913		436,780		626,387
Trade payables (note 13I)	3,493,753								3,493,753
Trade payables – Drawee risk (note 13I)	504,819								504,819
Dividends and interest on capital (note 14)	2,210								2,210

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

Financial assets and liabilities measured at fair value through profit or loss are recorded in current and noncurrent assets and liabilities and gains and losses are recorded as financial income and expenses, respectively.

The amounts are recorded in the financial statements at their carrying amount, which are substantially similar to those that would be obtained if they were traded in the market. The fair values of other long-term assets and liabilities do not differ significantly from their carrying amounts, except for the amounts below.

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, according below:

			06/30/2019				12/31/2018
	Carrying amount		Fair value (*)		Carrying amount		Fair value (*)
Perpetual bonds	3,837,416		3,459,110		3,880,074		2,850,615
Fixed rate notes	7,548,635		7,959,964		6,745,132		7,595,765

 (*) Source: Bloomberg

• Credit Risks

The exposure to credit risks of financial institutions complies with the parameters established in the financial policy. The Company has as practice the detailed analysis of the patrimonial and financial situation of its clients and suppliers, the establishment of a credit limit and the permanent monitoring of its outstanding balance.

With respect to financial investments, the Company only makes investments in institutions with low credit risk rated by rating agencies. Since part of the funds is invested in repo operations that are backed by Brazilian government bonds, there is also exposure to the credit risk of the Brazilian State.

Regarding the exposure to credit risk in accounts receivable and other receivables, the company has a credit risk committee, in which each new customer is analyzed individually regarding their financial condition, before granting the credit limit and payment terms and periodically revised, according to the periodicity procedures of each business area.

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• Capital Management

The Company seeks to optimize its capital structure in order to reduce its financial costs and maximize the return to its shareholders. The table below shows the evolution of the Company's capital structure, with financing by equity and third-party capital:

Thousands of reais		06/30/2019		12/31/2018
Shareholder's equity (equity)		12,368,948		10,013,440
Borrowings and Financing (Third-party capital)		28,515,568		28,827,074
Gross Debit/Shareholder's equity		2.31		2.88

14. OTHER PAYABLES

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

							Consolidated								Parent Company
	Current					Non-current					Current
	06/30/2019		12/31/2018		06/30/2019		12/31/2018		06/30/2019		12/31/2018		06/30/2019		12/31/2018
Payables to related parties (note 18 a)	23,182		35,499		82,128		96,629		320,150		308,056				14,501
Dividends and interest on capital payable to controlling shareholders (note 13 I)	2,210		932,005						2,210		900,541
Advances from customers  (1)	562,575		137,418		1,371,357				62,888		64,416
Taxes in installments	19,303		20,179		70,924		73,934		9,777		9,756		2,159		2,378
Profit sharing - employees	84,056		113,219						50,337		72,555
Taxes payable					8,768		8,631						7,286		7,145
Provision for consumption and services	368,307		334,638						304,265		260,942
Third party materials in our possession	85,777		45,915						85,560		45,721
Trade payables - drawee risk (2)	504,819		65,766						504,819		65,766
Lease Liabilities (note 14 a)	41,442				584,945				11,664				33,656
Other payables	43,443		85,984		41,716		48,134		10,159		17,551
	1,735,114		1,770,623		2,159,838		227,328		1,361,829		1,745,304		43,101		24,024

(1) Glencore Advance: On March 29, 2019, the Company received in advance through its subsidiary CSN Mineração the amount of US$ 496 million (R$ 1,951 billion) related to a supply contract of approximately 22 million tons of ore to the Swiss trader Glencore International AG ("Glencore"), to be executed within 5 years.

(2) Trade Payables – Drawee risk: The Company negotiated with financial institutions to anticipate payments from its suppliers, with the objective of lengthening the deadlines. This financial modality is an option of suppliers, and does not require mandatory participation, nor is the Company not reimbursed and / or benefited by the financial institution of discounts for payment executed before the due date agreed with the supplier, there is no change in the degree of subordination of the security in case of judicial execution and no changes in the commercial conditions existing between the Company and its suppliers.

14.a.) LEASE LIABILITIES

In the quarter, the lease liabilities are presented as follows:

			Consolidated				Parent Company
	06/30/2019		First adoption		06/30/2019		First adoption
Leases	1,508,142		1,533,556		53,190		71,114
Present value adjustment - Leases	(881,755)		(892,567)		(7,870)		(10,042)
	626,387		640,989		45,320		61,072
Classified:
Current	41,442		39,243		11,664		21,390
Non-current	584,945		601,746		33,656		39,682
	626,387		640,989		45,320		61,072

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The Company has lease agreements for port operations, machinery and facilities, vehicles, administrative and operational real estate. Lease liabilities are guarantee by the underlying assets.

Changes in lease liabilities for the period ended June 30, 2019 are shown in the table below.

			6/30/2019
	Consolidated		Parent Company
Opening balance	640,989		61,072
New leases (note 10)	3,061		1,373
Present Value Adjustments -  New leases (note 10)	(1,053)		(226)
Contract review	1,203		(10,714)
Payments	(35,226)		(7,808)
Interest	17,413		1,623
Net balance	626,387		45,320

The minimum future payments estimated to leasing agreements as of June 30, 2019 are as follows:

							Consolidated
	Less than one year		Between one and five years		Over five years		Total
Leases	72,607		257,222		1,178,313		1,508,142
Present value adjustment - Leases	(31,165)		(109,057)		(741,533)		(881,755)
	41,442		148,165		436,780		626,387

· Payments of leases not recognized as liabilities:

The Company chose not to recognize lease liabilities in contracts with a maturity of less than twelve months and for assets with low value.

The payments made for these contracts and for the variable portion of the lease agreements are recognized as expenses when incurred.

Expenses related to payments not included in the measurement of a lease liability are:

			Consolidated				Parent Company
	Six months  ended		Three months ended		Six months  ended		Three months  ended
	06/30/2019		06/30/2019		06/30/2019		06/30/2019
Contract less than 12 months	6,982		3,738
Lower Assets value	851		425		3,187		1,594
Variable lease payments	93,619		53,944		1,108		1,108
	101,452		58,107		4,295		2,702

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15. INCOME TAX AND SOCIAL CONTRIBUTION

15.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
	Six months ended				Three months ended
	06/30/2019		06/30/2018		06/30/2019		06/30/2018
Income tax and social contribution income (expense)
Current	(982,420)		(313,514)		(612,602)		(193,600)
Deferred	1,642,623		390,225		1,731,662		829,022
	660,203		76,711		1,119,060		635,422

							Parent Company
	Six months ended				Three months ended
	06/30/2019		06/30/2018		06/30/2019		06/30/2018
Income tax and social contribution income (expense)
Current	11
Deferred	1,707,030		315,629		1,752,286		775,279
	1,707,041		315,629		1,752,286		775,279

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
	Six months ended				Three months ended
	6/30/2019		6/30/2018		6/30/2019		6/30/2018
Profit before income tax and social contribution	1,321,022		2,599,471		775,402		554,265
Tax rate	34%		34%		34%		34%
Income tax and social contribution at combined statutory rate	(449,147)		(883,820)		(263,637)		(188,450)
Adjustment to reflect the effective rate:
Equity in results of affiliated companies	20,663		19,732		10,881		10,284
Profit with differentiated rates or untaxed	(96,751)		411,749		(49,175)		454,129
Transfer pricing adjustment	(8,574)		(5,384)				4,162
Tax loss carryforwards without recognizing deferred taxes	(14,460)		(14,266)		(5,594)		(4,815)
Indebtdness limit	(10,086)		(19,063)		(3,371)		(11,263)
Unrecorded deferred taxes on temporary differences	(90)		4,942		2,645		(4,489)
(Losses)/Reversal for deferred income and social contribution tax credits	1,195,920		558,426		1,407,768		372,947
Deferred taxes on foreign profit	(295)		(587)		(281)		(33)
Tax incentives	19,690		4,228		12,228		2,849
Other permanent deductions (additions)	3,333		754		7,596		101
Income tax and social contribution in profit for the period	660,203		76,711		1,119,060		635,422
Effective tax rate	-50%		-3%		-144%		-115%
							Parent company
	Six months ended				Three months ended
	6/30/2019		6/30/2018		6/30/2019		6/30/2018
Profit before income tax and social contribution	30,470		2,316,684		(7,203)		385,171
Tax rate	34%		34%		34%		34%
Income tax and social contribution at combined statutory rate	(10,360)		(787,673)		2,449		(130,958)
Adjustment to reflect the effective rate:
Equity in results of affiliated companies	517,699		552,641		330,880		543,843
Indebtdness limit	(10,086)		(19,063)		(3,371)		(11,263)
(Losses)/Reversal for deferred income and social contribution tax credits	1,195,920		558,426		1,407,768		372,947
Other permanent deductions (additions)	13,868		11,298		14,560		710
Income tax and social contribution in profit for the period	1,707,041		315,629		1,752,286		775,279
Effective tax rate	-5602%		-14%		24327%		-201%

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15.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
	12/31/2018		Shareholders' Equity		P&L		Others		06/30/2019
Deferred
Income tax losses	959,240				481,643		6,121		1,447,004
Social contribution tax losses	367,358				173,394		2,389		543,141
Temporary diferences	(1,838,935)		3,594		987,586		(8,510)		(856,265)
Provision for tax. social security, labor, civil and environmental risks	267,237				(61,900)				205,337
Provision for environmental liabilities	67,143				(2,109)				65,034
Asset impairment losses	81,341				(5,145)				76,196
Inventory impairment losses	38,760				(2,134)				36,626
(Gains)/losses on financial instruments	(3,319)				(863)				(4,182)
(Gains)/losses on financial assets measured through profit or loss	363,095				52,382				415,477
Actuarial liability (pension and healthcare plan)	276,032		(31,924)		514				244,622
Accrued supplies and services	95,644				5,851				101,495
Allowance for doubtful debts	61,415				(8,494)				52,921
Unrealized exchange variation (1)	1,010,532				(87,622)				922,910
Gain upon loss of control in Transnordestina	(92,180)								(92,180)
Cash flow hedge accounting	490,041		(178,522)						311,519
Acquisition at fair value of SWT and CBL	(172,114)		2,488		12,159				(157,467)
Deferred taxes not computed	(252,940)				(16,448)		(8,900)		(278,288)
Estimated (losses)/reversals for deferred income tax and social contribution credits.	(3,086,572)		210,447		1,195,920		390		(1,679,815)
Business Combination	(1,030,812)				3,676				(1,027,136)
Others	47,762		1,105		(98,201)				(49,334)
Total	(512,337)		3,594		1,642,623				1,133,880
Total Deferred Assets	89,394								1,743,405
Total Deferred Liabilities	(601,731)								(609,525)
Total Deferred	(512,337)								1,133,880

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							Parent Company
	Opening balance		Movement						Closing balance
	12/31/2018		Shareholders' Equity		P&L		Others		06/30/2019
Deferred
Income tax losses	834,141				469,539		(287)		1,303,393
Social contribution tax losses	322,283				169,034		(103)		491,214
Temporary diferences	(1,173,858)				1,068,457		390		(105,011)
Provision for tax. social security, labor, civil and environmental risks	210,382				(61,349)				149,033
Provision for environmental liabilities	64,906				(3,673)				61,233
Asset impairment losses	57,444				(4,923)				52,521
Inventory impairment losses	15,326				650				15,976
(Gains)/losses on financial instruments	(3,319)				(863)				(4,182)
(Gains)/losses on financial assets measured through profit or loss	363,095				52,382				415,477
Actuarial liability (pension and healthcare plan)	279,132		(31,925)		514				247,721
Accrued supplies and services	84,509				6,010				90,519
Allowance for doubtful debts	45,565				(7,531)				38,034
Unrealized exchange variation (1)	1,014,309				(95,949)				918,360
Gain upon loss of control in Transnordestina	(92,180)								(92,180)
Cash flow hedge accounting	490,041		(178,522)						311,519
Estimated (losses)/reversals for deferred income tax and social contribution credits.	(3,086,572)		210,447		1,195,920		390		(1,679,815)
Business Combination	(699,383)								(699,383)
Deferred income tax and social contribution over CGPAR Business combination.	(22,609)								(22,609)
Others	105,496				(12,731)				92,765
Total	(17,434)				1,707,030				1,689,596
Total Deferred Assets									2,512,459
Total Deferred Liabilities	(17,434)								(822,863)
Total Deferred	(17,434)								1,689,596

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

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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 2014 and 2019, these foreign subsidiaries generated profits amounting to R$1,150,443. 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$366,847.

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.

A sensitivity analysis of tax credit was performed considering a variation of macroeconomics assumptions, operating performance and liquidity events. In this way, considering the results of studies performed, which indicates that it is probable that there will be taxable income to use the deferred income and social contribution taxes balance, we estimate the realization installments of deferred assets, detailing year by year for the first five years.

The estimated recovery of deferred tax assets of IRPJ and CSLL, is as follows:

In millions of reais		Consolidated	Parent Company
2020		238	238
2021		721	721
2022		946	946
2023		607	607
Subtotal		2,512	2,512

15.c) Income statement and social contribution recognized in the shareholders’ equity

The income statement and social contribution recognized directly in the shareholder’s equity are demonstrated below:

	Consolidated				Parent Company
	06/30/2019		12/31/2018		06/30/2019		12/31/2018
Income tax and social contribution
Actuarial gains on defined benefit pension plan	144,834		176,700		148,123		180,048
Estimated losses for deferred income and social contribution tax credits - actuarial gains	(148,123)		(180,048)		(148,123)		(180,048)
Exchange differences on translating foreign operations	(325,350)		(325,350)		(325,350)		(325,350)
Cash flow hedge accounting	311,519		490,041		311,519		490,041
Estimated losses for deferred income and social contribution tax credits - cash flow hedge	(311,519)		(490,041)		(311,519)		(490,041)
	(328,639)		(328,698)		(325,350)		(325,350)

15.d) Impairment test - Deferred taxes

The Company's management constantly evaluates the ability to use its tax credits. In this direction, CSN periodically updates a technical study to demonstrate if the generation of future taxable profits support the realization of tax credits and, consequently support the realization of tax credits, the maintenance on the balance sheet or the constitution of a provision for loss in the realization of these credits.  

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This study is prepared at Entity level, in accordance with the Brazilian tax legislation, and is performed considering the Parent company’s projections, which is the entity that generates a significant amount of tax credits, mainly, temporary differences. The parent company covers the following businesses:

• Steel Brazil (steel); and

• Cement;

The deferred tax assets on tax losses and temporary differences refers mainly to the following:

	Nature	Description
	Tax losses	The Company incur tax losses at the parent company level, because of financial expenses over its leverage, since it holds substantially all loans and financings of CSN group and presented a taxable income in 2018.
Temporary differences	Foreign exchange differences	Since 2012 the Company opted for the taxation of exchange differences on a cash basis. As a result of the cash basis tax treatment, taxes are only due, and expenses are only deductible at the time of debt settlement.
	Losses on Usiminas shares	The losses on Usiminas shares are recognized on an accrual basis, but the taxable event will occur only at the time of divestment.
	Other provisions	Various accounting provisions are recognized on an accrual basis, but their taxation occurs only at the time of its realization, such as provisions for contingencies, impairment losses, environmental liabilities, etc.

The study prepared is based on the Company business plan of on a long-term basis, reasonably estimated by management and considered several scenarios which vary according to different macroeconomic and operating assumptions.

The model for projection of taxable profit considers two main indicators:

· Pre-Tax Profit, reflecting our projected EBITDA plus depreciation, other income and expenses and financial income (expenses); and             

· Taxable Profit, which is our pre-tax profit plus (minus) expenses and income items that are taxable at a time different from the time obtained on an accrual basis (temporary differences).

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In addition, a sensitivity analysis of tax credits utilization considering a variation in macroeconomic assumptions, operational performance and liquidity events took place.

A significant aspect to be considered in the analysis is the fact that CSN has presented recent tax losses mainly due to the deterioration of the Brazilian political and macroeconomic environment, as well as the growth of its financial leverage. These two aspects combined led to an unbalance between the financial and operating results of the Parent company.

Within this context, the Company works with a business plan to rebalance between the financial and operating results of the Parent company, whose main measures are:

· Expansion of disinvestment efforts;

· Reduction of financial leverage;

· Improvement in operating results due to increased sales volume, better prices of its products and efficiency in controlling production costs and

· Reprofiling of the Parent company's indebtedness, with negotiations to extend the amortization periods and decentralization of debt through redirection of contracts to subsidiaries according to the nature and application of resources.

With the measures already in execution, the Company's management expects to retake high profitability rates. Accordingly, management considers that the gradual recognition of tax credits, using at first a time of projections of less than 10 years, better reflects the expectation of utilization of the credits recognized in the Company's tax books. Because of the study, the Company reversed as of June 30, 2019 R$ 1,615,279 of the loss recorded in previous years, with a balance of deferred fixed assets recognized in the amount of R$ 2,512,459 in the Parent Company.

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

 Are being discussed in the competent spheres, actions and complaints of various natures. 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
		06/30/2019		12/31/2018		06/30/2019		12/31/2018		06/30/2019		12/31/2018		06/30/2019		12/31/2018
Tax		118,856		118,490		52,987		46,321		48,997		48,789		33,857		27,493
Social security		18,062		70,084				50,898		17,504		67,978				50,898
Labor		324,150		362,228		225,880		214,625		240,376		277,590		167,976		162,870
Civil		162,929		210,264		27,311		22,024		133,016		180,546		16,852		11,871
Environmental		39,432		31,390		3,651		1,900		34,489		28,030		2,161		1,900
Deposit of a guarantee						11,515		12,182								563
		663,429		792,456		321,344		347,950		474,382		602,933		220,846		255,595

Classification
Current		111,423		106,503						67,210		64,856
Non-current		552,006		685,953		321,344		347,950		407,172		538,077		220,846		255,595
		663,429		792,456		321,344		347,950		474,382		602,933		220,846		255,595

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The changes in the provisions for tax, social security, labor, civil and environmental risks in the period ended June 30, 2019 were as follows:

										Consolidated
										Current + Non-current
Nature		12/31/2018		Additions		Accrued charges		Net utilization of reversal		06/30/2019
Tax		118,490		16,391		2,164		(18,189)		118,856
Social security		70,084		2,490		320		(54,832)		18,062
Labor		362,228		13,214		28,840		(80,132)		324,150
Civil		210,264		24,061		9,993		(81,389)		162,929
Environmental		31,390		6,400		3,672		(2,030)		39,432
		792,456		62,556		44,989		(236,572)		663,429

										Parent Company
										Current + Non-current
Nature		12/31/2018		Additions		Accrued charges		Net utilization of reversal		06/30/2019
Tax		48,789		15,071		708		(15,571)		48,997
Social security		67,978		1,932		320		(52,726)		17,504
Labor		277,590		9,434		18,676		(65,324)		240,376
Civil		180,546		23,103		5,253		(75,886)		133,016
Environmental		28,030		4,035		3,210		(786)		34,489
		602,933		53,575		28,167		(210,293)		474,382

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, tax provision are subject to SELIC (Central Bank’s policy rate).

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§  Possible administrative and judicial proceedings

The table below shows a summary of the main matters classified as possible risk compared with the balances as of June 30, 2019 and December 31, 2018.

		Consolidated
		06/30/2019		12/31/2018
Assessment Notice and imposition of fine (AIIM) - Income tax and social contribution - Capital gain on sale of Namisa's shares		12,116,615		11,812,071
Assessment Notice and Imposition of fine (AIIM) - Income tax and Social contribution -  Disallowance of deductions of goodwill generated in the reverse incorporation of Big Jump by Namisa.		3,794,437		3,722,888
Assessment Notice and Imposition of fine (AIIM) - Income tax and Social contribution - Disallowance of interest on prepayment arising from supply contracts of iron ore and port services		2,206,931		2,165,088
Assessment Notice and imposition of fine (AIIM) - Income tax and social contribution due to profits from foreign subsidiaries for years 2008, 2010 and 2011		1,926,618		1,891,149
Tax foreclosures - ICMS - Electricity credits		998,683		974,479
Offset of taxes that were not approved by the Federal Revenue Service - IRPJ/CSLL, PIS/COFINS and IPI		1,482,290		1,481,382
Disallowance of the ICMS credits - Transfer of iron ore		518,744		529,607
ICMS - Refers to the transfer of imported raw material at an amount lower than the price disclosed in the import documentation		302,580		294,527
Disallowance of the tax loss and negative basis of social contribution arising from the adjustments in the SAPLI		527,386		516,583
Assessment Notice- IRRF- Capital Gain of CFM vendors located abroad		248,988		243,007
CFEM – difference of understanding between CSN and DNPM on the calculation basis		320,206		311,582
Assessment Notice- ICMS- questions about sales for incentive area		993,706		976,438
Other tax lawsuits (federal, state, and municipal)		3,795,897		3,625,167
social security lawsuits		303,757		287,823
Enforcement action applied by Brazilian antitrust authorities (CADE)		92,289		101,683
Other civil lawsuits		989,586		922,171
Labor and social security lawsuits		1,547,442		1,537,078
Tax foreclosures – Fine – Volta Redonda IV		81,523		75,530
Other environmental lawsuits		171,542		144,235
		32,419,130		31,612,488

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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17. 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, 2018 and, accordingly, the Company decided not to repeat it in the condensed interim financial information as of June 30, 2019.

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

			Consolidated				Parent Company
	06/30/2019		12/31/2018		06/30/2019		12/31/2018
Environmental liabilities	190,673		198,386		180,413		191,216
Asset retirement obligations	100,338		83,380		759		668
	291,011		281,766		181,172		191,884

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18. 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, 2018.

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

· By transaction

		Current				Non-current				Total
		06/30/2019		12/31/2018		06/30/2019		12/31/2018		06/30/2019		12/31/2018
Assets
Trade receivables (note 6)		180,632		93,317						180,632		93,317
Dividends receivable (note 8)		47,023		46,171						47,023		46,171
Actuarial asset (note 8)						87,623		99,894		87,623		99,894
Financial investments/ investments		91,562		92,332						91,562		92,332
Loans (note 8)		2,798		2,675		806,297		706,605		809,095		709,280
Other receivables (note 8)		2,827		3,649		218,840		218,840		221,667		222,489
		324,842		238,144		1,112,760		1,025,339		1,437,602		1,263,483
Liabilities
Other payables (Note 14)
Accounts payable		22,647		29,286		82,128		96,629		104,775		125,915
Provision for consumption and services		535		6,213						535		6,213
Trade payables		289,655		135,801						289,655		135,801
Actuarial liabilities						7,982		7,982		7,982		7,982
		312,837		171,300		90,110		104,611		402,947		275,911

		06/30/2019		06/30/2018
P&L
Revenues
Sales		602,130		585,554
Interest (note 24)		40,101		30,233
Expenses
Purchases		(1,062,858)		(611,011)
Foreing exchange and monetary variations, net		(980)		13,174
		(421,607)		17,950

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· By company

																						Consolidated
		Asset						Liabilities						P&L
		Current		Non-Current		Total		Circulante		Non-Current		Total		Sales		Purchases		Financial income (expenses), net		Exchange rate variations, net		Total
	Joint-venture and Joint-operation
Itá Energética S.A.								2,159				2,159
MRS Logística S.A.		46,171				46,171		90,579		82,128		172,707				(551,019)						(551,019)
CBSI - Companhia Brasileira de Serviços e Infraestrutura		852				852		36,090				36,090		15		(102,721)						(102,706)
Transnordestina Logística S.A (1)		448		1,014,140		1,014,588		1,250				1,250		131		(3,579)		28,912				25,464
		47,471		1,014,140		1,061,611		130,078		82,128		212,206		146		(657,319)		28,912				(628,261)
Other related parties
CBS Previdência				87,623		87,623				7,982		7,982
Banco Fibra (2)		91,562				91,562												11,066		(980)		10,086
Usiminas		1,444				1,444		166,056				166,056				(345,355)						(345,355)
Panatlântica (3)		142,310				142,310		15,889				15,889		556,550		(53,826)						502,724
Vicunha Ind de Implementos														70		(158)						(88)
Outras related parties		2,028				2,028		814				814		2,092		(6,200)						(4,108)
		237,344		87,623		324,967		182,759		7,982		190,741		558,712		(405,539)		11,066		(980)		163,259
Associates
Arvedi Metalfer do Brasil S.A.		40,027		10,997		51,024								43,272				123				43,395
Total at 06/30/2019		324,842		1,112,760		1,437,602		312,837		90,110		402,947		602,130		(1,062,858)		40,101		(980)		(421,607)
Total em 12/31/2018		238,144		1,025,339		1,263,483		171,300		104,611		275,911
Total at 06/30/2018														585,554		(611,011)		30,233		13,174		17,950

1. Transnordestina Logística S.A: Assets: Refers mainly to loan agreements in R$: average rate interest from 126,98% of the CDI. As of June 30, 2019, the loans amounted to R$795,300 (R$706,605 as of December 31, 2018).

2. Banco Fibra S.A: Assets: Refers mainly to Eurobond from Fibra Bank with maturity in February 2028.

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

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· By transaction

												Parent Company
		Current				Non current				Total
		06/30/2019		12/31/2018		06/30/2019		12/31/2018		06/30/2019		12/31/2018
Assets
Trade receivables (1) (note 6)		1,101,862		906,865						1,101,862		906,865
Dividends receivable (Note 8)		39,315		259,186						39,315		259,186
Actuarial asset (note 8)						75,778		85,415		75,778		85,415
Loans (note 8)		23,812		22,807		734,419		588,285		758,231		611,092
Financial investments / Investments (2)		99,451		99,109		86,641		103,640		186,092		202,749
Other receivables (3) (note 8)		15,253		15,395		467,978		458,177		483,231		473,572
		1,279,693		1,303,362		1,364,816		1,235,517		2,644,509		2,538,879
Liabilities
Borrowings and financing
Prepayment (note 12)		1,309,285		1,363,140		4,694,140		4,250,264		6,003,425		5,613,404
Intercompany Bonds (nota 12)		2,369		2,395		356,395		360,356		358,764		362,751
Intercompany Loans (note 12)		1,402,387		1,704,888		1,961,785				3,364,172		1,704,888
		2,714,041		3,070,423		7,012,320		4,610,620		9,726,361		7,681,043
Other payables (Note 14)
Accounts payable		8,004		8,060				14,501		8,004		22,561
Provision for consumption and services		312,146		299,996						312,146		299,996
Trade payables		711,813		344,076						711,813		344,076
Actuarial liabilities						7,982		7,982		7,982		7,982
		1,031,963		652,132		7,982		22,483		1,039,945		674,615
		06/30/2019		06/30/2018
P&L
Revenues
Sales/Others		1,553,935		1,808,031
Interest (note 24)				26,642
Exclusive funds (note 24)		1,229		754
Foreing exchange and monetary variations, net		93,608
Despesas
Purchases		(1,475,966)		(989,301)
Interest (note 24)		(114,445)		(222,537)
Foreing exchange and monetary variations, net				(1,139,114)
		58,361		(515,525)

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

2. Assets: Financial investments classified in current total, are investments in exclusive funds and in the Fibra Bank. In noncurrent refers to investments in Usiminas shares classified as fair value through profit or loss.

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

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· By company

																						Parent Company
		Assets						Liabilities						P&L
		Current		Non-current		Total		Current		Non-current		Total		Shares/Others		Purchases		Financial income/expenses, net		Exchange rate variations, net		Total
	Subsidiaries
Companhia Metalúrgica Prada (1)		280,125		121,336		401,461		14,083				14,083		363,283		(27,663)						335,620
Estanho de Rondônia S.A.		22,640		6,804		29,444										(19,541)		883				(18,658)
Sepetiba Tecon S.A.		12,252		106,646		118,898		27,811				27,811				(37,042)						(37,042)
Minérios Nacional S.A.		19				19		4				4		25		(4)						21
CSN Mineração S.A.  (2)		83,411				83,411		323,831				323,831		45,150		(644,056)						(598,906)
CSN Energia S.A.		14,309				14,309		117,578				117,578				(97,077)						(97,077)
Ferrovia Transnordestina Logística S.A.		455		47,169		47,624		136				136		1,067		(41)		347				1,373
Companhia Siderúrgica Nacional, LLC (3)		356,816				356,816		316,684				316,684		397,378						(832)		396,546
CSN Resources S.A. (4)								1,301,579		3,975,320		5,276,899						(131,424)		48,139		(83,285)
CSN Steel Corp								7,931		890,842		898,773						(17,013)		20,380		3,367
Lusosider Aços Planos, S.A.		208,582				208,582		1				1		188,304								188,304
CSN Islands XI Corp. (5)								24,594		1,013,034		1,037,628								39,338		39,338
CSN Islands XII Corp. (6)								1,376,921		861,577		2,238,498								(12,074)		(12,074)
Companhia de Embalagens Metálicas MMSA								46				46
Companhia Florestal do Brasil		1,103		500		1,603
CSN Steel Holdings 1, S.L.U.								754		67,887		68,641						(754)		(63)		(817)
CSN Productos Sider. S.L.								2,262		203,660		205,922						(2,262)		(300)		(2,562)
		979,712		282,455		1,262,167		3,514,215		7,012,320		10,526,535		995,207		(825,424)		(150,223)		94,588		114,148
Joint-venture and Joint-operation
MRS Logística S.A.		23,091				23,091		20,793				20,793				(179,721)						(179,721)
CBSI - Companhia Brasileira de Serviços e Infraestrutura		852				852		27,501				27,501		15		(70,439)						(70,424)
Transnordestina Logística S.A. (7)		248		919,942		920,190												25,242				25,242
		24,191		919,942		944,133		48,294				48,294		15		(250,160)		25,242				(224,903)
Other related parties
CBS Previdência				75,778		75,778				7,982		7,982
Banco Fibra		91,237				91,237												10,413		(980)		9,433
Usiminas		185				185		167,328				167,328				(344,442)						(344,442)
Panatlântica (8)		142,310				142,310		15,954				15,954		556,550		(53,826)						502,724
Ibis Participações e Serviços																(1,563)						(1,563)
Vicunha Ind. de Implementos																(158)						(158)
Other related parties		2,028				2,028		213				213		2,163		(393)						1,770
		235,760		75,778		311,538		183,495		7,982		191,477		558,713		(400,382)		10,413		(980)		167,764
Associates
Arvedi Metalfer do Brasil S.A.		31,816				31,816												123				123
Exclusive funds
Diplic, Caixa Vertice, VR1, BB Steel (9)		8,214		86,641		94,855												1,229				1,229
Total at 06/30/2019		1,279,693		1,364,816		2,644,509		3,746,004		7,020,302		10,766,306		1,553,935		(1,475,966)		(113,216)		93,608		58,361
Total at 12/31/2018		1,303,362		1,235,517		2,538,879		3,722,555		4,633,103		8,355,658
Total at 06/30/2018														1,808,031		(989,301)		(195,141)		(1,139,114)		(515,525)

1. Companhia Metalúrgica Prada: Refers mainly to receivables in the amount of R$280,125 (R$254,464 as of December 31,2018), and debentures from the indirect subsidiary CBL in the amount of R$121,336 (R$121,336 as of December 31,2018).

2. CSN Mineração:

Liabilities: Payables from purchases of iron ore and port services in the amount of R$323,831(119,952 as of December 31,2018).

3. Companhia Siderurgica Nacional, LLC: Receivables of R$356,816 (R$357,257 as of December 31, 2018), related to sale of steel for resale. Current liabilities refers mainly a commission expenses and logistics in the operations of sales steel to resale in the amount of R$ 316,684 (R$298,866 as of December 31,2018).

4. CSN Resources SA: Prepayment contracts in dollar and Fixed Rate Notes. As of June 30, 2019, the loans amounted to R$5,276,899 (R$4,961,357 as of December 31, 2018).

5. CSN Islands XI Corp.: Intercompany contracts in US dollars. As of June 30, 2019, the loans amounted to R$1,037,628 (R$179,677 as of December 31, 2018).

6. CSN Islands XII Corp.: Refers mainly to Intercompany contracts in dollar. As of June 30, 2019, the loans amounted to R$2,238,498 (R$1,525,211 as of December 31, 2018).

7. Transnordestina Logística S.A: noncurrent assets: refers to loan agreements in the amount of R$701,102(R$588,285 as of December 31,2018) and advance for future capital increase in the amount of R$218,840 (R$218,840 as of December 31,2018).

8. Panatlântica: current assets: refers to accounts receivable for the supply of flat steel in the amount of R$142,310 (R$53,027 on December 31, 2018).

9. Exclusive funds: Current assets: Refers to investments in government securities and CDBs, in the amount of R$8,214(R$6,989 as of December 31,2018).  Noncurrent assets: Refers to Usiminas S.A. shares in the amount of R$86,641(R$103,640 as of December 31,2018). The funds VR1 and Diplic II are managed by Taquari Asset.

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18.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 June 30, 2019.

		06/30/2019		06/30/2018
		Statement of income
Short-term benefits for employees and officers		22,909		23,975
Post-employment benefits		26		52
		22,935		24,027

19. SHAREHOLDERS’ EQUITY

19.a) Paid-in capital

Fully subscribed and paid-in capital as of June 30, 2019 and December 31, 2018 is R$4,540,000 represented by 1,387,524,047 book-entry common shares without par value. Each common share entitles to one vote in resolutions of the General Meeting.

19.b) Authorized capital

The Company’s bylaws in effect as of June 30, 2019 determine that the capital can be raised to up to 2,400,000,000 shares by decision of the Board of Directors.

19.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 6404/76, up to the ceiling of 20% of the share capital.  

19.d) shareholder structure

As of June 30, 2019, the Company’s shareholder structure was as follows:

						6/30/2019						12/31/2018
		Number of common shares		% of total shares		% of voting capital		Number of common shares		% of total shares		% of voting capital
Vicunha Aços S.A. (*)		679,522,254		48.97%		49.24%		679,522,254		48.97%		49.24%
Rio Iaco Participações S.A. (*)		58,193,503		4.19%		4.22%		58,193,503		4.19%		4.22%
NYSE (ADRs)		278,270,019		20.06%		20.16%		284,152,319		20.48%		20.59%
Other shareholders		364,128,771		26.24%		26.38%		358,246,471		25.82%		25.95%
Outstanding shares		1,380,114,547		99.47%		100.00%		1,380,114,547		99.47%		100.00%
Treasury shares		7,409,500		0.53%				7,409,500		0.53%
Total shares		1,387,524,047		100.00%				1,387,524,047		100.00%

 (*) Controlling group companies.

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19.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

Sale of shares

Balance in treasury

1º

3/13/2014

70,205,661

From 3/14/2014 to 4/14/2014

R$ 9.34

R$ 9,22 e 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 e 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 e 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 e R$ 11,54

26,781,661

70,205,661

7/18/2014

Not applicable

Not applicable

60,000,000

(1)

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

8/18/2014

Not applicable

Not applicable

10,446,061

(1)

6º

8/18/2014

63,161,055

From 8/19/2014 to 9/25/2014

R$ 9.82

R$ 9,47 e R$ 10,07

6,791,300

6,791,300

7º

9/29/2014

56,369,755

From 9/29/2014 to 2/29/2014

R$ 7.49

R$ 4,48 e 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 e R$ 5,39

1,841,100

30,391,000

9º (*)

03/31/2015

32,770,055

From 4/01/2015 to 6/30/2015

30,391,000

04/20/2018

30,391,000

From 4/20/2018 to 4/30/2018

Não aplicável

Não aplicável

R$ 0.00

R$ 0.00

22,981,500

(2)

7,409,500

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

1. In 2014, the Board of Directors approved the cancellation of 70,446,061 shares held in treasury without changing the value of the Company's capital stock.

2. In April 2018, the Board of Directors authorized the sale of up to 30,391,000 common shares held in treasury. Until the end of the program, 22,981,500 shares were sold for R$ 213,494. The Company. The Company recognized a profit on the sale of the shares in the amount of the amount of R$ 32,690.

As of June 30, 2019, 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 06/30/2019 (*)
7,409,500		R$ 58,264		R$       4.48		R$ 10.07		R$           7.86		R$ 123,368

 (*) The average quotation as of June 30, 2019 in the amount R$ 16,65 per share was used.

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

The Company adopts 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 allocation 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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19.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
	Six months ended				Three months ended
	06/30/2019		06/30/2018		06/30/2019		06/30/2018
	Common shares				Common shares
(Loss) profit for the year	1,737,511		2,632,313		1,745,083		1,160,450
Weighted average number of shares	1,380,114,547		1,366,272,877		1,380,114,547		1,375,312,269
Basic and diluted EPS	1.25896		1.92664		1.26445		0.84377

The Company does not hold potential dilutable ordinary shares outstanding that could result in dilution of earnings per share

20. PAYMENT TO SHAREHOLDERS

The Company's bylaws provide for the distribution of minimum dividends of 25% of adjusted net income under the law, to the holders of its shares.

At the Annual General Meeting held on April 26, 2019, the payment of the minimum mandatory dividend for the year 2018 was approved, amounting to R$898,332, corresponding to R$ 0.650910577222 per share. Dividends were paid as of May 29, 2019, without monetary restatement, as per Notice to Shareholders disclosed on May 27, 2019.

Dividends are calculated in accordance with the Company's Bylaws and in accordance with the Brazilian Corporate Law.

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21. NET SALES REVENUE

Net sales revenue is comprised as follows:

								Consolidated
		Six months ended				Three months ended
		06/30/2019		06/30/2018		06/30/2019		06/30/2018
Gross revenue
Domestic market		7,133,529		6,798,802		3,570,356		3,496,659
Foreign market		7,490,502		5,663,705		4,197,400		3,054,417
		14,624,031		12,462,507		7,767,756		6,551,076
Deductions
Sales returns and discounts		(135,009)		(118,230)		(74,615)		(56,929)
Taxes on sales		(1,582,814)		(1,591,313)		(792,399)		(807,133)
		(1,717,823)		(1,709,543)		(867,014)		(864,062)
Net revenue		12,906,208		10,752,964		6,900,742		5,687,014

								Parent Company
		Six months ended				Three months ended
		06/30/2019		06/30/2018		06/30/2019		06/30/2018
Gross revenue
Domestic market		6,852,245		6,486,356		3,433,997		3,313,928
Foreign market		749,913		1,125,109		359,071		501,628
		7,602,158		7,611,465		3,793,068		3,815,556
Deductions
Sales returns and discounts		(129,703)		(100,692)		(72,405)		(55,219)
Taxes on sales		(1,468,423)		(1,459,370)		(737,848)		(737,911)
		(1,598,126)		(1,560,062)		(810,253)		(793,130)
Net revenue		6,004,032		6,051,403		2,982,815		3,022,426

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22. EXPENSES BY NATURE

								Consolidated
		Six months ended				Three months ended
		06/30/2019		06/30/2018		06/30/2019		06/30/2018
Raw materials and inputs		(3,705,988)		(3,404,104)		(1,908,191)		(1,852,973)
Labor cost		(1,330,627)		(1,325,318)		(700,443)		(673,560)
Supplies		(960,940)		(830,240)		(488,436)		(424,771)
Maintenance cost (services and materials)		(686,489)		(596,006)		(363,503)		(305,883)
Outsourcing services		(1,161,315)		(1,169,415)		(620,638)		(621,519)
Freight		(787,501)		(650,094)		(318,747)		(311,138)
Depreciation, amortization and depletion		(637,811)		(616,786)		(331,645)		(311,611)
Others		(438,732)		(369,958)		(262,640)		(211,647)
		(9,709,403)		(8,961,921)		(4,994,243)		(4,713,102)
Classified as:
Cost of sales		(8,463,764)		(7,808,661)		(4,442,269)		(4,123,918)
Selling expenses		(999,757)		(928,012)		(426,273)		(471,509)
General and administrative expenses		(245,882)		(225,248)		(125,701)		(117,675)
		(9,709,403)		(8,961,921)		(4,994,243)		(4,713,102)

						Parent Company
		Six months ended				Three months ended
		06/30/2019		06/30/2018		06/30/2019		06/30/2018
Raw materials and inputs		(3,557,537)		(2,680,296)		(1,794,877)		(1,351,323)
Labor cost		(607,212)		(632,981)		(313,517)		(315,354)
Supplies		(675,114)		(588,184)		(325,874)		(298,468)
Maintenance cost (services and materials)		(330,753)		(319,597)		(163,262)		(160,087)
Outsourcing services		(436,358)		(487,529)		(231,474)		(250,472)
Freight		(152,030)		(169,334)		(81,260)		(84,358)
Depreciation, amortization and depletion		(310,659)		(293,978)		(153,547)		(151,431)
Others		(16,662)		(10,999)		(13,165)		(5,826)
		(6,086,325)		(5,182,898)		(3,076,976)		(2,617,320)
Classified as:
Cost of sales		(5,708,242)		(4,745,575)		(2,875,154)		(2,408,202)
Selling expenses		(259,147)		(305,410)		(139,003)		(150,748)
General and administrative expenses		(118,936)		(131,913)		(62,819)		(58,370)
		(6,086,325)		(5,182,898)		(3,076,976)		(2,617,320)

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

								Consolidated
		Six months ended				Three months ended
		06/30/2019		06/30/2018		06/30/2019		06/30/2018
Production cost		621,670		603,270		323,005		304,926
Selling expenses		3,415		3,256		2,136		1,613
General and administrative expenses		12,726		10,260		6,504		5,072
		637,811		616,786		331,645		311,611
Other operational (*)		46,681		24,651		24,777		10,697
		684,492		641,437		356,422		322,308

								Parent Company
		Six months ended				Three months ended
		06/30/2019		06/30/2018		06/30/2019		06/30/2018
Production cost		300,747		284,595		148,110		146,834
Selling expenses		2,667		2,455		1,689		1,217
General and administrative expenses		7,245		6,928		3,748		3,380
		310,659		293,978		153,547		151,431
Other operational (*)		3,238				2,343
		313,897		293,978		155,890		151,431

(*) Refers mainly to depreciation and  amortization of paralyzed assets as described in note 23.

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23. OTHER OPERATING INCOME (EXPENSES)

				Consolidado		Consolidated
		Six months ended				Three months ended
		06/30/2019		06/30/2018		06/30/2019		06/30/2018
Other operating income
Indemnities		1,669		36,700		382		36,154
Rentals and leases		4,458		920		2,296		460
Dividends received		28,432		6,203		28,052		6,203
PIS and COFINS to compensate (1)		87,394
Contractual fines		1,886		3,029		1,022		1,249
Updated shares - VJR (Note 13II)		(119,470)		1,417,544		(247,123)		(518,845)
Gain on disposal of LLC				1,149,892				1,149,892
Other revenues		14,797		15,156		5,585		8,744
		19,166		2,629,444		(209,786)		683,857
Other operating expenses
Taxes and fees		(16,623)		(11,038)		(11,489)		(5,754)
Expenses with environmental liabilities, net		(23,735)		(25,469)		(15,128)		(21,679)
Write-off/(Provision) of judicial lawsuits		33,601		(47,933)		(8,826)		(19,547)
Depreciation of equipment paralyzed and amortization of intangible assets (note 22)	(46,681)			(24,651)		(24,777)		(10,697)
Write- off PP&E and intangible assets (note 10)		(31,793)		(1,864)		(18,081)		(3,211)
Estimated (Loss)/reversal in inventories		(65,152)		(14,032)		(24,003)		(7,546)
Idleness in stocks		(149,565)				(82,304)
Studies and project engineering expenses		(11,678)		(11,705)		(6,759)		(5,134)
Research and development expenses		(684)		(1,480)		(335)		(522)
Advisory expenses				(1,380)				(603)
Healthcare plan expenses		(57,540)		(48,634)		(28,454)		(22,546)
Reversal/(Provision) industrial reestructuring		871		(3,379)		871		(3,379)
Cash flow hedge realized (Note 13 b)		(446,659)		(13,732)		(262,442)
Actuarial Pension Plan		(1,512)				(1,512)
Other expenses		(139,923)		(85,115)		(109,462)		(41,135)
		(957,073)		(290,412)		(592,701)		(141,753)
Other operating income (expenses), net		(937,907)		2,339,032		(802,487)		542,104

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				Parent Company
		Six months ended				Three months ended
		06/30/2019		06/30/2018		06/30/2019		06/30/2018
Other operating income
Indemnities		1,637		13,500		382		13,103
Rentals and leases		4,333		740		2,261		370
Dividends received		28,432		5,633		28,052		5,633
PIS and COFINS to compensate (1)		87,394
Contractual fines		1,457		1,621		771		661
Updated shares - VJR (Note 13II)		(119,470)		1,417,544		(247,123)		(518,845)
Other revenues		447		4,697		193		3,899
		4,230		1,443,735		(215,464)		(495,179)
Other operating expenses
Taxes and fees		(3,964)		(4,013)		(2,940)		(2,025)
Expenses with environmental liabilities, net		(5,004)		(19,289)		(1,691)		(17,816)
Write-off/(Provision) of judicial lawsuits		37,560		(39,523)		(6,893)		(13,602)
Depreciation of paralyzed equipment and amortization of intangible assets (Note 22)		(3,238)				(2,343)
Write- off PP&E and intagible assets (notes 10)		(15,032)		(14)		(1,491)		2
Estimated (Loss)/reversal in inventories		(18,623)		(12,918)		(9,688)		(14,385)
Studies and project engineering expenses		(12,303)		(9,920)		(5,195)		(4,343)
Research and development expenses		(684)		(1,480)		(335)		(522)
Cash flow hedge realized (Note 13 b)		(446,659)		(13,732)		(262,442)
Healthcare plan expenses		(57,321)		(48,640)		(28,345)		(22,544)
Advisory expenses				(1,261)				(603)
Idleness in stocks (2)		(149,565)				(82,304)
Actuarial pension plan		(1,512)				(1,512)
Other expenses		(96,924)		(61,390)		(83,495)		(32,527)
		(773,269)		(212,180)		(488,674)		(108,365)
Other operating income (expenses), net		(769,039)		1,231,555		(704,138)		(603,544)

(1) Refers to non-inclusion of ICMS in the PIS and COFINS calculation basis.

(2) Due to the reforms in blast furnace 3, there was unused capacity in which the volume of production was below normal.

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24. FINANCIAL INCOME (EXPENSES)

				Consolidated
		Six months ended				Three months ended
		06/30/2019		06/30/2018		06/30/2019		06/30/2018
Financial income
Related parties (note 18 a)		40,101		30,233		19,940		16,008
Income from financial investments		50,671		51,525		30,561		24,357
Other income		106,009		9,016		34,966		7,513
		196,781		90,774		85,467		47,878
Financial expenses
Borrowings and Financing - foreign currency		(534,863)		(459,175)		(282,514)		(243,674)
Borrowings and Financing - local currency		(464,124)		(519,647)		(229,433)		(255,374)
Lease liabilities		(17,413)				(15,335)
Capitalised interest (notes 10 and 28)		41,396		34,485		20,285		17,395
Interest, fines e late payment charges		(67,281)		(4,402)		(9,047)		(2,368)
Commission and bank fees		(87,865)		(88,251)		(43,682)		(46,376)
PIS/COFINS over financial income		(7,472)		(7,575)		(2,106)		(3,842)
Other financial expenses		(136,577)		32,802		(79,518)		45,732
		(1,274,199)		(1,011,763)		(641,350)		(488,507)
Foreign exchange and monetary variation, net
Monetary variation, net		(5,935)		(19,822)		5,776		(21,367)
Exchange variation, net		90,005		(645,786)		191,504		(530,167)
Exchange variation on derivatives		573		3,829		927		3,099
		84,643		(661,779)		198,207		(548,435)
Financial income (expenses), net		(992,775)		(1,582,768)		(357,676)		(989,064)
Statement of gain and (losses) on derivative transactions (note 12b)
Dollar to euro swap		573		3,829		927		3,099
		573		3,829		927		3,099

(1) Refers mainly to the monetary adjustment of the recognition of the non-inclusion of ICMS in the PIS and COFINS calculation basis in the amount of R$ 76,412.

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				Consolidado		Parent Company
		Six months ended				Three months ended
		06/30/2019		06/30/2018		06/30/2019		06/30/2018
Financial income
Related parties (note 18 a)		38,237		27,396		19,210		14,871
Income from financial investments		30,571		30,642		17,165		13,201
Other income		82,017		6,633		13,080		6,273
		150,825		64,671		49,455		34,345
Financial expenses
Borrowings and Financing - foreign currency		(156,259)		(100,018)		(79,127)		(42,443)
Borrowings and Financing - local currency		(410,161)		(452,486)		(203,935)		(223,998)
Related parties (note 18 a)		(151,453)		(222,537)		(80,353)		(121,624)
Lease liabilities		(1,623)				(659)
Capitalised interest (notes 10 and 28)		11,032		7,529		5,613		3,935
Interest, fines e late payment charges		(64,347)		(806)		(7,671)		(351)
Commission and bank fees		(82,156)		(77,904)		(40,122)		(39,976)
PIS/COFINS over financial income		(7,172)		(5,461)		(1,830)		(2,663)
Other financial expenses		(18,574)		59,555		15,406		56,184
		(880,713)		(792,128)		(392,678)		(370,936)
Foreign exchange and monetary variation, net
Monetary variation, net		5,981		(7,224)		6,942		(18,403)
Exchange variation, net		83,064		(674,109)		154,202		(660,934)
		89,045		(681,333)		161,144		(679,337)
Financial income (expenses), net		(640,843)		(1,408,790)		(182,079)		(1,015,928)

25. SEGMENT INFORMATION

The segment information has not changed in relation to that disclosed in the Company's financial statements as of December 31, 2018. 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:

																Six months ended
																06/30/2019
P&L		Steel		Mining		Logistics				Energy		Cement		Corporate expenses/elimination		Consolidated
						Port		Railroads
Metric tons (thou.) (*)		2,335,536		19,001,458										(2,307,901)
Net revenues
Domestic market		5,081,908		543,481		115,931		674,746		147,529		265,852		(1,316,108)		5,513,339
Foreign market		2,183,661		4,626,743										582,465		7,392,869
Total net revenue (note 21)		7,265,569		5,170,224		115,931		674,746		147,529		265,852		(733,643)		12,906,208
Cost of sales and services		(6,601,862)		(2,002,558)		(90,647)		(511,603)		(127,482)		(286,743)		1,157,131		(8,463,764)
Gross profit		663,707		3,167,666		25,284		163,143		20,047		(20,891)		423,488		4,442,444
General and administrative expenses		(407,046)		(92,046)		(17,321)		(51,669)		(14,094)		(42,380)		(621,083)		(1,245,639)
Depreciation (note 22)		312,421		203,910		21,091		190,654		8,682		63,275		(162,222)		637,811
Proportionate EBITDA of joint ventures														269,581		269,581
Adjusted EBITDA		569,082		3,279,530		29,054		302,128		14,635		4		(90,236)		4,104,197
Sales by geographic area
Asia		1,744		3,449,972										582,465		4,034,181
North America		427,845														427,845
Latin America		83,718														83,718
Europe		1,670,622		1,176,771												2,847,393
Others		(268)														(268)
Foreign market		2,183,661		4,626,743										582,465		7,392,869
Domestic market		5,081,908		543,481		115,931		674,746		147,529		265,852		(1,316,108)		5,513,339
Total		7,265,569		5,170,224		115,931		674,746		147,529		265,852		(733,643)		12,906,208
																Three months ended
																06/30/2019
P&L		Steel		Mining		Logistics				Energy		Cement		Corporate expenses/elimination		Consolidated
						Port		Railroads
Metric tons (thou.) (*)		1,160,579		10,142,890										(1,139,218)
Net revenues
Domestic market		2,514,615		298,405		64,346		339,751		77,514		146,007		(687,389)		2,753,249
Foreign market		1,145,694		2,793,007										208,792		4,147,493
Total net revenue (note 21)		3,660,309		3,091,412		64,346		339,751		77,514		146,007		(478,597)		6,900,742
Cost of sales and services		(3,379,828)		(1,132,723)		(44,080)		(250,160)		(66,173)		(149,073)		579,768		(4,442,269)
Gross profit		280,481		1,958,689		20,266		89,591		11,341		(3,066)		101,171		2,458,473
General and administrative expenses		(210,180)		(50,304)		(7,883)		(24,245)		(7,113)		(21,545)		(230,704)		(551,974)
Depreciation (note 22)		155,080		112,210		13,591		98,464		4,341		31,526		(83,567)		331,645
Proportionate EBITDA of joint ventures														142,243		142,243
Adjusted EBITDA		225,381		2,020,595		25,974		163,810		8,569		6,915		(70,857)		2,380,387
Sales by geographic area
Asia		1,639		1,971,234										208,792		2,181,665
North America		292,057														292,057
Latin America		34,674														34,674
Europe		817,006		821,773												1,638,779
Others		318														318
Foreign market		1,145,694		2,793,007										208,792		4,147,493
Domestic market		2,514,615		298,405		64,346		339,751		77,514		146,007		(687,389)		2,753,249
Total		3,660,309		3,091,412		64,346		339,751		77,514		146,007		(478,597)		6,900,742

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																Six months ended
																06/30/2018
P&L		Steel		Mining		Logistics				Energy		Cement		Corporate expenses/elimination		Consolidated
						Port		Railroads
Metric tons (thou.) (*)		2,598,238		15,604,021										(989,919)
Net revenues
Domestic market		4,711,992		443,523		129,931		701,212		203,314		282,571		(1,273,218)		5,199,325
Foreign market		3,055,718		2,039,230										458,691		5,553,639
Total net revenue (note 21)		7,767,710		2,482,753		129,931		701,212		203,314		282,571		(814,527)		10,752,964
Cost of sales and services		(6,176,541)		(1,649,855)		(94,936)		(506,035)		(139,876)		(247,172)		1,005,754		(7,808,661)
Gross profit		1,591,169		832,898		34,995		195,177		63,438		35,399		191,227		2,944,303
General and administrative expenses		(497,860)		(66,319)		(18,507)		(48,607)		(13,907)		(41,374)		(466,686)		(1,153,260)
Depreciation (note 22)		305,347		208,440		9,128		128,443		8,629		60,533		(103,734)		616,786
Proportionate EBITDA of joint ventures														253,337		253,337
Adjusted EBITDA		1,398,656		975,019		25,616		275,013		58,160		54,558		(125,856)		2,661,166
Sales by geographic area
Asia		18,035		1,846,508										458,691		2,323,234
North America		1,038,907														1,038,907
Latin America		214,007														214,007
Europe		1,747,425		192,722												1,940,147
Others		37,344														37,344
Foreign market		3,055,718		2,039,230										458,691		5,553,639
Domestic market		4,711,992		443,523		129,931		701,212		203,314		282,571		(1,273,218)		5,199,325
Total		7,767,710		2,482,753		129,931		701,212		203,314		282,571		(814,527)		10,752,964
																Three months ended
																06/30/2018
		Steel		Mining		Logistics				Energy		Cement		Corporate expenses/elimination		Consolidated
						Port		Railroads
Metric tons (thou.) (*)		1,320,852		8,129,858										(486,574)
Net revenues
Domestic market		2,421,363		224,873		64,287		370,270		112,695		151,838		(661,271)		2,684,055
Foreign market		1,672,051		1,106,286										224,622		3,002,959
Total net revenue (note 21)		4,093,414		1,331,159		64,287		370,270		112,695		151,838		(436,649)		5,687,014
Cost of sales and services		(3,276,204)		(854,564)		(48,993)		(261,862)		(73,590)		(121,890)		513,185		(4,123,918)
Gross profit		817,210		476,595		15,294		108,408		39,105		29,948		76,536		1,563,096
General and administrative expenses		(263,802)		(45,455)		(8,534)		(25,300)		(6,974)		(21,400)		(217,719)		(589,184)
Depreciation (note 22)		154,884		101,954		5,093		63,822		4,314		33,851		(52,307)		311,611
Proportionate EBITDA of joint ventures														134,052		134,052
Adjusted EBITDA		708,292		533,094		11,853		146,930		36,445		42,399		(59,438)		1,419,575
Sales by geographic area
Asia		17,879		994,356										224,622		1,236,857
North America		608,201														608,201
Latin America		108,450														108,450
Europe		918,412		111,930												1,030,342
Others		19,109														19,109
Foreign market		1,672,051		1,106,286										224,622		3,002,959
Domestic market		2,421,363		224,873		64,287		370,270		112,695		151,838		(661,271)		2,684,055
Total		4,093,414		1,331,159		64,287		370,270		112,695		151,838		(436,649)		5,687,014

 (*) 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 principal 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 finance 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:

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								Consolidated
		Six months ended				Three months ended
		06/30/2019		06/30/2018		06/30/2019		06/30/2018
Net income (loss) for the year		1,981,225		2,676,182		1,894,462		1,189,687
Depreciation/Amortization/Depletion (note 22)		637,811		616,786		331,645		311,611
Income tax and social contribution (note 15)		(660,203)		(76,711)		(1,119,060)		(635,422)
Financial income (expenses) (note 24)		992,775		1,528,768		357,676		989,064
EBITDA		2,951,608		4,799,025		1,464,723		1,854,940
Other operating income (expenses) (note 23)		937,907		(2,339,032)		802,487		(542,104)
Equity in results of affiliated companies (note 9.b)		(54,899)		(52,164)		(29,066)		(27,313)
Proportionate EBITDA of joint ventures		269,581		253,337		142,243		134,052
Adjusted EBITDA (*)		4,104,197		2,661,166		2,380,387		1,419,575

 (*) 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.

26. EMPLOYEE BENEFIT

The information related to employee benefits didn’t change compared to that disclosed in the Company’s financial statements as of December 31, 2018. Accordingly, management has decided not repeat them in this interim financial information.

Actuarial calculations are updated at the end of each year by external actuarial and presented in the financial statements in accordance with CPC 33(R1) – Employee benefits and IAS 19 – Employee Benefits. For the health plan there was a sporadic update dated June 30,2019.

Refers to the health plan created on December 1, 1996 exclusively to cover former employees retired until March 20, 1997 and their respective legal dependents. Since then, the health plan does not allow the inclusion of new participants. The plan is sponsored by CSN.

The amounts recognized in the balance sheet were determined as follows:

	6/30/2019		12/31/2018
Present value of obligations	804,756		897,137
Liabilities	804,756		897,137

The reconciliation of health benefit liabilities is as follows:

	06/30/2019		12/31/2018
Actuarial liability at the beginning of the year	897,137		866,784
Expenses recognized in income for the year	41,274		85,748
Sponsor’s contributions transferred in prior year	(39,762)		(71,632)
Recognition of actuarial loss/(gain)	(93,893)		16,237
Actuarial liability at the end of the year	804,756		897,137

Actuarial gains and losses recognized in equity are as follows:

	06/30/2019		12/31/2018
Actuarial gain (loss) on obligation	(93,893)		16,237
Gain (loss) recognized in shareholders' equity	(93,893)		16,237

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The following is the weighted average life expectancy based on the mortality table used to determine actuarial obligations:

	06/30/2019		12/31/2018
Longevity at age of 65 for current participants
Male	19.55		19.55
Female	22.17		22.17
Longevity at age of 65 for current participants who are 40
Male	41.34		41.59
Female	41.34		45.30

The actuarial assumptions used to calculate post-employment health benefits were:

	06/30/2019		12/31/2018
Biometric and Demographic
General mortality table	AT 2000 aggravated in 20%		AT 2000 segregated by gender
Financial
Actuarial nominal discount rate	3.83%		9.62%
Inflation	3.50%		4.75%
Real increase in medical costs based on age (Aging Factor)	0,5% - 3,00% real a.a.		0.5% - 3.00% real a.a.
Nominal increase medical costs growth rate	6.86%		8.15%
Average medical cost (Claim cost)	1,054.65		1,054.65

27. 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 2019, 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 March 31, 2019 to March 31, 2020. Under the insurance policy, the LMI (Maximum Limit of Indemnity) is US$600 million and deductibles in the amount of US$385 million for material damages and 45 days for loss of profits and covers the following Company’s units and subsidiaries: Presidente Vargas Steelworks, CSN Mineração and Sepetiba Tecon. Management understands that the policies covers its assets and the risks to which the Company is subject.

The risk assumptions adopted, given their nature, are not within the scope of an audit of the financial statements, consequently not audited by our independent auditors.

28. ADDITIONAL INFORMATION TO CASH FLOWS

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

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			Consolidated		Parent Company
	06/30/2019		12/31/2018		06/30/2019		12/31/2018
Income tax and social contribution paid (1)	355,253		62,736
Addition to PP&E with interest capitalization (notes 10 and 24)	41,396		34,485		11,032		7,529
Initial adoption CPC 06 – Right of use (note 14a)	640,989				61,072
Remeasurement – Right of use (note 14 a)	3,211				(9,567)
Acquisition of fixed assets without cash	25,188				25,188
Capitalization in subsidiaries without cash					26,399		33,633
	1,066,037		97,221		114,124		41,162

(1) For calendar year 2019, the Company opted for taxation based on Quarterly Real Profit, based on art. 9,430 / 96, with the income tax and social contribution due payable in a single installment, until the last business day of the month following the end of each quarter.

29. STATEMENT OF COMPREHENSIVE INCOME

								Consolidated
		Six months ended				Three months ended
		6/30/2019		6/30/2018		6/30/2019		6/30/2018
Profit for the year		1,981,225		2,676,182		1,894,462		1,189,687
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		59		59		29		29
Actuarial (losses)/gains on defined benefit pension plan		93,894				93,894
		93,953		59		93,923		29
Items that could be subsequently reclassified to the statement of income
Cumulative translation adjustments for the period		(27,936)		11,996		(6,132)		(25,962)
Fair value through other comprehensive income				(1,559,680)
(Loss)/gain on the percentage change in investments		(1,995)		(105)		(1,995)		(105)
(Loss)/gain on cash flow hedge accounting		78,403		(1,351,935)		96,843		(1,333,289)
Realization on cash flow hedge accounting reclassified to income statements		446,659		13,732		262,442
(Loss)/gain on net investment hedge in foreign subsidiaries		6,595		(24,933)		415		(20,073)
(Loss)/gain on business combination				(651)				(651)
		501,726		(2,911,576)		351,573		(1,380,080)
		595,679		(2,911,517)		445,496		(1,380,051)
Total comprehensive income for the period		2,576,904		(235,335)		2,339,958		(190,364)
Attributable to:
Controlling shareholders		2,333,190		(279,204)		2,190,579		(219,601)
Non-controlling shareholders		243,714		43,869		149,379		29,237
		2,576,904		(235,335)		2,339,958		(190,364)

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								Parent Company
		Six months ended				Three months ended
		6/30/2019		6/30/2018		6/30/2019		6/30/2018
Profit for the year		1,737,511		2,632,313		1,745,083		1,160,450
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		59		59		29		29
Actuarial (losses)/gains on defined benefit pension plan		93,894				93,894
		93,953		59		93,923		29
Items that could be subsequently reclassified to the statement of income
Cumulative translation adjustments for the period		(27,936)		11,996		(6,132)		(25,962)
Fair value through other comprehensive income				(1,559,680)
(Loss)/gain on the percentage change in investments		(1,995)		(105)		(1,995)		(105)
(Loss)/gain on cash flow hedge accounting		78,403		(1,351,935)		96,843		(1,333,289)
Realization on cash flow hedge accounting reclassified to income statements		446,659		13,732		262,442
(Loss)/gain on net investment hedge in foreign subsidiaries		6,595		(24,933)		415		(20,073)
(Loss)/gain on business combination				(651)				(651)
		501,726		(2,911,576)		351,573		(1,380,080)
		595,679		(2,911,517)		445,496		(1,380,051)
Total comprehensive income for the period		2,333,190		(279,204)		2,190,579		(219,601)
Attributable to:
Controlling shareholders		2,333,190		(279,204)		2,190,579		(219,601)
		2,333,190		(279,204)		2,190,579		(219,601)

30.         SUBSEQUENT EVENTS   

· Issuance of debt securities

In July 2019, the Company issued debt securities through its subsidiary CSN Resources S.A., in the amount of US $ 175 million, maturing in 2023 and with an interest rate of 7.625% per annum. The Notes are unconditionally and irrevocably guaranteed by the Company.

· Iron ore advance sale agreement

On July 11, 2019, one of the Company's subsidiaries, CSN Mineração concluded negotiations for the amendment of the long-term iron ore supply agreement with the Swiss trading company Glencore International AG ("Glencore"). The transaction involves a cash advance to CSN Mineração S.A. of up to $ 250 million under a contract to supply approximately 10 million tons of iron ore, to be executed within five years. Disbursement by Glencore will occur when certain conditions precedent that are usual for this type of transaction occur.

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COMMENTS ON THE PERFORMANCE OF BUSINESS PROJECTIONS

Projections

The Company clarifies that the information disclosed in this item represents a mere estimate, hypothetical data and cannot be interpreted as a promise of performance by the Company and/or its Management. The projections listed below include market variables that are not under the Company’s control and, therefore, may change.

a) Purpose of Projection

CSN estimates an adjusted annualized EBTIDA close to R$8,5 billion for 2019.

CSN estimates a leverage measured by the ratio of net debt to adjusted EBITDA close to 3.0 times at the end of 2019.

CSN estimates iron ore sales volume to 40 million of tons (Mton) in 2019.

CSN estimates iron ore production volume at 33 million of tons (Mton) in 2019, 33 Mton in 2020, 31.2Mton in 2021, 36.6Mton in 2022 and 38Mton in 2023.

b) Period and validity term of the projection.

For the year 2019, is projected an EBITDA close to R$8.5 billion. In turn, the validity term of the presented projection ends with the results being disclosed for the fiscal year ended December 31, 2019, that will be available to the market within the period established by the local authority.

In December 2019, CSN estimates a leverage measured by the ratio of net debt to adjusted EBTIDA close to 3.0 times, that will be available to the market at the end of 2019 period.

The projected period of iron ore sales comprehends the 2019 year and the annual volume will be available to the market in the financial statements to be published.

CSN estimates annual volume of iron ore production from 2019 to 2023 and the annual volumes will be available to the market in the financial statements to be published in each of the years.

c) Assumptions of the projection, indicating which can be influenced by the issuer’s management and which are beyond its control.

All assumptions mentioned below are subject to the influence of external variables, which are beyond the control of the Company’s management. Therefore, in case of relevant changes in these assumptions, the Company may revise its estimates mentioned below, modifying them in comparison with those originally presented.

Adjusted EBITDA

The assumptions used to project the adjusted EBITDA close to R$8.5 billion for 2019, we estimate in the year iron ore prices levels (Platts – 62% Fe) above those estimated in 2018, when the reference indices close in average of US$ 69,46/ton. We consider it more feasible to maintain price levels (Platts - 62%) above US$ 100 / ton in the second half, improving the EBITDA from this business unit. Regarding the steel industry, we consider increasing volumes and stable prices, but higher raw material prices than initially estimated.

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Leverage

The assumptions used for the leverage measured by the ratio of net debt to adjusted EBITDA close to 3.0 times over 6 months based on an increase of the adjusted EBITDA, resulting in a higher generation of free cash flow and lower net debt, leading to a substantial reduction of the indicator.

Iron Ore Sales Volume

Iron ore sales volume in 2019 considers domestic and foreign sales, in line with the perspective of third-party production and purchase of ore.

Volume of Iron Ore Production

The volume of ore production considers our mining plan between 2019 and 2023, with an increase in pellet feed production, in line with the investment projects announced through Material Fact and Corporate Presentation with the market.

d) Values of the indicators that are subject of the forecast.

Net Revenue	2016		2017		2018	1S19E	2019 E	2020 E	2021 E	2022 E	2023 E
Estimated	n.a.		18,000		22,230	n.a.	n.a.	n.a.	n.a.	n.a.	n.a.
Reached	17,149		18,525		22,969	n.a.	n.a.	n.a.	n.a.	n.a.	n.a.
Variation %	-		3%		3%	-	-	-	-	-	-
Adjusted EBITDA	2016		2017		2018	1S19E	2019 E	2020 E	2021 E	2022 E	2023 E
Estimated	n.a.		5,000		5,574	n.a.	8,500	n.a.	n.a.	n.a.	n.a.
Reached	4,075		4,645		5,849	n.a.	n.a.	n.a.	n.a.	n.a.	n.a.
Variation %	-		-7%		5%	-	-	-	-	-	-
Leverage	2016		2017		2018	1S19E	2019 E	2020 E	2021 E	2022 E	2023 E
Estimated	n.a.		5,00x		n.a.	3,50x	3,00x	n.a.	n.a.	n.a.	n.a.
Reached	6,32x		5,66x		4,55x	3,65x	n.a.	n.a.	n.a.	n.a.	n.a.
Variation %	n.a.		13%		n.a.	0,15x	n.a.	n.a.	n.a.	n.a.	n.a.
Volume of Iron Ore Production	2016		2017		2018	1S19E	2019 E	2020 E	2021 E	2022 E	2023 E
Estimated	n.a.		n.a.		28,500	n.a.	33,000	33,000	31,200	36,600	38,000
Reached	32,174		29,921		27,875	n.a.	n.a.	n.a.	n.a.	n.a.	n.a.
Variation %	n.a.		n.a.		-2%	n.a	n.a.	n.a.	n.a.	n.a.	n.a.
Volume of Iron Ore Production	2016		2017		2018	1S19E	2019 E	2020 E	2021 E	2022 E	2023 E
Estimated	n.a.		n.a.		n.a.	n.a.	40.000	n.a.	n.a.	n.a.	n.a.
Reached	n.a.		n.a.		n.a.	n.a.	n.a.	n.a.	n.a.	n.a.	n.a.
Variation %	n.a.		n.a.		n.a.	n.a.	n.a.	n.a.	n.a.	n.a.	n.a.
*E = estimated
**n.a. = not evaluated

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If the issuer has disclosed, in the last 3 fiscal years, projections over the progress of its indicators:

a) Inform which were being replaced by new projections and which were being repeated.

Estimates maintained:

CSN estimates a leverage measured by the ratio of net debt to adjusted EBITDA close to 3.0 times at the end of 2019.

CSN estimates iron ore production volume at 31.2Mton in 2021, 36.6Mton in 2022 and 38Mton in 2023.

Estimates replaced:

We adjusted the annualized adjusted EBTIDA estimate from R$ 7.5 billion to R$ 8.5 billion in 2019, mainly due to the higher than expected iron ore price (Platts - 62%).

We adjusted the estimated iron ore production from 31.5 Mton to 33 Mton in 2019 and from 30.7 Mton to 33 Mton in 2020.

CSN adjusted its estimated iron ore sales volume from 38 to 40 million tons (Mton) in 2019, due to higher availability of third party iron ore for sale and good performance in own production.

b) In relation to the projections for periods that have already occured, compare the projection data with the performance indicators, clearly indicating the reasons that led to deviations in the projections.

CSN estimated leverage as measured by net debt to adjusted EBITDA close to 3.5x at the end of the first half of 2019, when we reached 3.65x, materially within our initial estimates that were reached at the beginning of the third quarter. with the second prepayment of iron ore.

Net Revenue	2016	2017	2018	1S2019
Estimated	n.a.	18,000	22,230	n.a.
Reached	17,149	18,525	22,969	n.a.
Variation %	-	3%	3%	n.a.
Adjusted EBITDA	2016	2017	2018	1S2019
Estimated	n.a.	5,000	5,574	n.a.
Reached	4,075	4,645	5,849	n.a.
Variation %	-	-7%	5%	n.a.
Leverage	2016	2017	2018	1S2019
Estimated	n.a.	5,00x	n.a.	3,50x
Reached	6,32x	5,66x	4,55x	3,65x
Variation %	n.a.	13%	n.a.	0,15x
Volume of Iron Ore Production	2016	2017	2018	1S2019
Estimated	n.a.	n.a.	28,500	n.a.
Reached	32,174	29,921	27,875	n.a.
Variation %	n.a.	n.a.	-2%	n.a.
*E = estimated
**n.a. = not evaluated

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c) In relation to the projections for periods still in progress, inform if the projections remain valid on the date of delivery the form and, when applicable, explain why they were abandoned or replaced.

Ongoing and valid estimates:

CSN estimates annualized adjusted EBTIDA close to R $ 8.5 billion for 2019. The estimate presented evolution as a result of the increase in iron ore and therefore better result of CSN Mineração.

CSN estimates iron ore sales volume at 40 million tons (Mton) by 2019. CSN estimates iron ore production volume at 33 million tons (Mton) by 2019, 33 Mton by 2020, 31.2 Mton in 2021, 36.6 Mton in 2022 and 38.0 Mton in 2023. The expected increase in production in 2019 and 2020 is due to adjustments in the mining plan.

Follow-up and changes to projections disclosed

The result of the second quarter of 2019 does not bring any material variation to the results projections previously presented, which can therefore be maintained.

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Report on review of the interim information (ITR)

To the Shareholders, Directors and Management of

Companhia Siderúrgica Nacional

São Paulo - SP

Introduction

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 June 30, 2019, which comprises the balance sheet as of June 30, 2019 and the related statement of profit and loss and statement of comprehensive income (loss) for the three and six-month periods then ended, and the statement of changes in equity and statement of cash flows for the six-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 and Exchange 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).

Emphasis of matter

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

We draw attention to note 9.c) to the interim financial information, which describes the percentage 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, is currently being revised and discussed by the relevant regulatory bodies. The completion of the work under the project (and consequent start of operations) is contingent upon receiving ongoing financial contribution

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from TLSA´s shareholders and third parties. These events and conditions, together with other issues described in note 9.c) to the interim financial information, indicate the existence of significant uncertainty that may raise significant doubt as to TLSA´s ability to continue as a going concern. Our conclusion is not qualified regarding this matter.

Other matters

Interim statement of value added

We have also reviewed the individual and consolidated statements of value added (DVA) for the six-month period ended June 30, 2019, 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.

São Paulo, July 30, 2019

Nelson Fernandes Barreto Filho

CT CRC 1SP-151.079/O-0

Grant Thornton Auditores Independentes

CRC 2SP-025.583/O-1

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Opinions and Statements / Officers Statement on the Financial Statement

As Executive Officers of Companhia Siderúrgica Nacional, we declare pursuant to Article 25, paragraph 1º, item VI of CVM Instruction 480, of December 7, 2009, as amended, that we reviewed, discussed and agreed with the Company’s Financial Statements for the quarter ended June 30,2019.

São Paulo, July 30 ^th, 2019.

____________________________________________

Benjamin Steinbruch

CEO

____________________________________________

Luis Fernando Barbosa Martinez

Executive Officer

____________________________________________

David Moise Salama

Executive Officer

____________________________________________

Pedro Gutemberg Quariguasi Netto

Executive Officer

____________________________________________

Marcelo Cunha Ribeiro

Executive Officer – CFO and Investors Relations

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Opinions and Statements / Officers Statement on Auditor’s Report

As Executive Officers of Companhia Siderúrgica Nacional, we declare pursuant to Article 25, paragraph 1º, item V of CVM Instruction 480, of December 7, 2009, as amended, that we reviewed, discussed and agreed with the opinion expressed on the Independent Auditors’ Report related to the Company’s Financial Statements for the quarter ended June 30,2019.

São Paulo, July 30 ^th, 2019.

____________________________________________

Benjamin Steinbruch

CEO

____________________________________________

Luis Fernando Barbosa Martinez

Executive Officer

____________________________________________

David Moise Salama

Executive Officer

____________________________________________

Pedro Gutemberg Quariguasi Netto

Executive Officer

____________________________________________

Marcelo Cunha Ribeiro

Executive Officer – CFO and Investors Relations

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SIGNATURE

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

Date: August 28, 2019

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

By:	/S/ Marcelo Cunha Ribeiro
	Marcelo Cunha Ribeiro Chief Financial and Investor Relations Officer

FORWARD-LOOKING STATEMENTS

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