6-K 1 siditr3q19_6k.htm QUARTERLY FINANCIAL INFORMATION - SEPTEMBER 30, 2019 - CIA SIDERURGICA NACIONAL

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 November, 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____

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# 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 09/30/2019 | 8
01/01/2018 to 09/30/2018 | 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 09/30/2019 | 16
01/01/2018 to 09/30/2018 | 17
Statement of Value Added | 18
Comments on the Company’s Consolidated Performance | 19
Notes to the quarterly financial information | 31
Comments on the Performance of Business Projections | 88
Reports and Statements |
Unqualified Independent Auditors’ Review Report | 91
Officers Statement on the Financial Statements | 93
Officers Statement on Auditor’s Report | 94

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Company Information / Capital Breakdown

Number of Shares (Units) | Current Quarter 09/30/2019 |
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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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 | 09/18/2019 | Dividends | 09/30/2019 | Ordinary |  | 0.29900
Ordinary General Meeting | 04/26/2019 | Dividends | 05/29/2019 | Ordinary |  | 0.65091

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Parent Company Financial Statements / Balance Sheet - Assets
(R$ thousand)
Code | Description | Current Quarter | Previous Year
09/30/2019 | 12/31/2018
1 | Total Assets | 44,432,192 | 42,515,849
1.01 | Current assets | 9,175,997 | 8,668,688
1.01.01 | Cash and cash equivalents | 746,346 | 539,853
1.01.02 | Financial investments | 663,876 | 882,997
1.01.02.03 | Financial investments at amortized cost | 663,876 | 882,997
1.01.03 | Trade receivables | 1,995,909 | 1,965,817
1.01.04 | Inventory | 4,249,519 | 3,662,466
1.01.08 | Other current assets | 1,520,347 | 1,617,555
1.01.08.03 | Others | 1,520,347 | 1,617,555
1.01.08.03.01 | Recoverable taxes | 1,347,629 | 1,265,003
1.01.08.03.02 | Prepaid expenses | 69,423 | 28,073
1.01.08.03.03 | Dividends receivable | 24,154 | 259,186
1.01.08.03.04 | Others | 79,141 | 65,293
1.02 | Non-current assets | 35,256,195 | 33,847,161
1.02.01 | Long-term assets | 5,944,511 | 4,002,570
1.02.01.07 | Deferred taxes assets | 1,688,548 | 0
1.02.01.10 | Other non-current assets | 4,255,963 | 4,002,570
1.02.01.10.03 | Recoverable taxes | 1,670,170 | 1,692,274
1.02.01.10.04 | Judicial deposits | 246,417 | 255,595
1.02.01.10.05 | Prepaid expenses | 117,882 | 119,865
1.02.01.10.06 | Receivable from related parties | 1,327,613 | 1,046,462
1.02.01.10.07 | Others | 893,881 | 888,374
1.02.02 | Investments | 19,350,040 | 20,232,005
1.02.03 | Property, plant and equipment | 9,907,555 | 9,562,973
1.02.03.01 | Property, plant and equipment in operation | 9,870,470 | 9,562,973
1.02.03.02 | Right of use in progress | 37,085 | 0
1.02.04 | Intangible assets | 54,089 | 49,613

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Parent Company Financial Statements / Balance Sheet – Liabilities
(R$ thousand)
Code | Description | Current Quarter | Previous Year
09/30/2019 | 12/31/2018
2 | Total liabilities | 44,432,192 | 42,515,849
2.01 | Current liabilities | 10,139,694 | 11,191,230
2.01.01 | Payroll and related taxes | 206,451 | 135,255
2.01.02 | Trade payables | 2,481,895 | 2,655,091
2.01.03 | Tax payables | 62,116 | 116,336
2.01.04 | Borrowings and financing | 5,520,381 | 6,474,388
2.01.05 | Other payables | 1,808,104 | 1,745,304
2.01.05.02 | Others | 1,808,104 | 1,745,304
2.01.05.02.04 | Dividends and interests on shareholder´s equity | 2,521 | 900,541
2.01.05.02.05 | Advances from clients | 68,892 | 64,416
2.01.05.02.06 | Trade payables – Drawee risk | 928,178 | 65,766
2.01.05.02.07 | Lease liabilities | 11,618 | 0
2.01.05.02.08 | Financial derivative instruments | 7,664 | 0
2.01.05.02.09 | Other obligations | 789,231 | 714,581
2.01.06 | Provisions | 60,747 | 64,856
2.01.06.01 | Provision for tax, social security, labor and civil risks | 60,747 | 64,856
2.02 | Non-current liabilities | 25,454,105 | 22,621,884
2.02.01 | Long term Borrowings and financing | 20,130,483 | 17,687,208
2.02.02 | Other payables | 35,583 | 24,024
2.02.02.02 | Others | 35,583 | 24,024
2.02.02.02.03 | Lease liabilities | 26,285 | 0
2.02.02.02.04 | Other obligations | 9,298 | 24,024
2.02.03 | Deferred Taxes | 0 | 17,434
2.02.04 | Provisions | 5,288,039 | 4,893,218
2.02.04.01 | Provision for tax, social security, labor and civil risks | 400,571 | 538,077
2.02.04.02 | Other provisions | 4,887,468 | 4,355,141
2.02.04.02.03 | Provision for environmental liabilities and decommissioning of assets | 176,008 | 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 | 3,898,722 | 3,258,138
2.03 | Shareholders’ equity | 8,838,393 | 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) | 331,894 | 0
2.03.08 | Other comprehensive income | 868,952 | 1,065,188

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Quarterly Financial Information - September 30, 2019 – CIA SIDERURGICA NACIONAL | ## Version: 1

Parent Company Financial Statements / Statements of Income
(R$ thousand)
|  | Current Quarter | Year to date | Same quarter previous year | YTD previous year
Code | Description | 07/01/2019 to 09/30/2019 | 01/01/2019 to 09/30/2019 | 07/01/2018 to 09/30/2018 | 01/01/2018 to 09/30/2018
3.01 | Revenues from sale of goods and rendering of services | 2,675,199 | 8,679,231 | 3,371,553 | 9,422,956
3.02 | Costs from sale of goods and rendering of services | (2,765,033) | (8,473,275) | (2,773,360) | (7,518,935)
3.03 | Gross profit | (89,834) | 205,956 | 598,193 | 1,904,021
3.04 | Operating (expenses)/income | (338,290) | 37,233 | 273,796 | 2,693,442
3.04.01 | Selling expenses | (129,121) | (388,268) | (148,558) | (453,968)
3.04.02 | General and administrative expenses | (70,568) | (189,504) | (63,039) | (194,952)
3.04.04 | Other operating income | (231,182) | (226,952) | 1,893,195 | 3,336,930
3.04.05 | Other operating expenses | (572,772) | (1,346,041) | (250,104) | (462,284)
3.04.06 | Equity in results of affiliated companies | 665,353 | 2,187,998 | (1,157,698) | 467,716
3.05 | Profit before financial income (expenses) and taxes | (428,124) | 243,189 | 871,989 | 4,597,463
3.06 | Financial income (expenses) | (563,786) | (1,204,629) | (61,720) | (1,470,510)
3.06.01 | Financial income | 52,385 | 203,210 | 410,576 | 475,247
3.06.02 | Financial expenses | (616,171) | (1,407,839) | (472,296) | (1,945,757)
3.06.02.01 | Net exchange differences over financial instruments | (189,477) | (100,432) | (27,799) | (709,132)
3.06.02.02 | Financial expenses | (426,694) | (1,307,407) | (444,497) | (1,236,625)
3.07 | Profit (loss) before taxes | (991,910) | (961,440) | 810,269 | 3,126,953
3.08 | Income tax and social contribution | (1,048) | 1,705,993 | (88,734) | 226,895
3.09 | Profit (loss) from continued operations | (992,958) | 744,553 | 721,535 | 3,353,848
3.11 | Profit (loss) for the year | (992,958) | 744,553 | 721,535 | 3,353,848
3.99 | Earnings per share – (Reais / Share) |  |  |  |
3.99.01 | Basic earnings per share |  |  |  |
3.99.01.01 | Common shares | (0.71948) | 0.53949 | 0.52810 | 2.45474
3.99.02 | Diluted earnings per share |  |  |  |
3.99.02.01 | Common shares | (0.71948) | 0.53949 | 0.52810 | 2.45474

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Parent Company Financial Statements / Statements of Comprehensive Income
(R$ thousand)
|  | Current Quarter | Year to date | Same quarter previous year | YTD previous year
Code | Description | 07/01/2019 to 09/30/2019 | 01/01/2019 to 09/30/2019 | 07/01/2018 to 09/30/2018 | 01/01/2018 to 09/30/2018
4.01 | (Loss) profit for the year | (992,958) | 744,553 | 721,535 | 3,353,848
4.02 | Other comprehensive income | (791,915) | (196,236) | (226,236) | (3,137,753)
4.02.01 | Actuarial gains over pension plan of affiliates, net of taxes | 30 | 89 | 30 | 89
4.02.02 | (Loss) /Gain over pension plan | 0 | 93,894 | 0 | 0
4.02.04 | Cumulative translation adjustments for the year | 64,636 | 36,700 | (29,171) | (17,175)
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 | 0 | (1,995) | 0 | (105)
4.02.11 | (Loss) /Gain on cash flow hedge accounting | (1,038,192) | (959,789) | (372,883) | (1,724,818)
4.02.13 | Realization of cash flow hedge accounting reclassified to income statement | 186,022 | 632,681 | 183,051 | 196,783
4.02.14 | (Loss)/Gain on net investment hedge from investments in affiliates | (4,411) | 2,184 | (7,263) | (32,196)
4.02.15 | (Loss)/Gain on business combination | 0 | 0 | 0 | (651)
4.03 | Comprehensive income for the year | (1,784,873) | 548,317 | 495,299 | 216,095

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Parent Company Financial Statements / Statements of Cash Flows – Indirect Method
(R$ thousand)
|  | Year to date | YTD previous year
Code | Description | 01/01/2019 to 09/30/2019 | 01/01/2018 to 09/30/2018
6.01 | Net cash from operating activities | 1,902,461 | 6,345,358
6.01.01 | Cash from operations | (613,530) | 2,011,796
6.01.01.01 | Profit (loss) for the period | 744,553 | 3,353,848
6.01.01.02 | Financial charges in borrowing and financing raised | 1,054,136 | 1,154,172
6.01.01.03 | Financial charges in borrowing and financing granted | (42,331) | (31,977)
6.01.01.04 | Charges on lease liabilities | 2,029 | 0
6.01.01.05 | Depreciation, depletion and amortization | 481,891 | 443,017
6.01.01.06 | Equity in results of affiliated companies | (2,187,998) | (467,716)
6.01.01.07 | Deferred tax | (1,705,982) | (226,895)
6.01.01.08 | Provision for tax, social security, labor, civil and environmental risks | (141,615) | (26,323)
6.01.01.09 | Monetary and exchange variations, net | 716,220 | 879,442
6.01.01.10 | Result of derivative operations | 7,664 | 0
6.01.01.11 | Updated shares – VJR | 365,305 | (1,547,265)
6.01.01.12 | Write-off of property, plant and equipment and Intangible assets | 18,324 | 13,201
6.01.01.13 | Provision for environmental liabilities and decommissioning of assets | (15,876) | (68,706)
6.01.01.14 | Provision (Reversal) for consumption and services | 68,132 | (160,123)
6.01.01.15 | Intercompany debt relief | 0 | (1,310,886)
6.01.01.16 | Others | 22,018 | 8,007
6.01.02 | Changes in assets and liabilities | 2,515,991 | 4,333,562
6.01.02.01 | Trade receivables - third parties | 61,528 | 173,009
6.01.02.02 | Trade receivables - related parties | (112,331) | (177,645)
6.01.02.03 | Inventories | (587,053) | (388,836)
6.01.02.04 | Receivables - related parties/dividends | 3,644,534 | 6,189,677
6.01.02.05 | Tax assets | (60,522) | (989,073)
6.01.02.06 | Judicial deposits | 9,178 | (21,904)
6.01.02.09 | Trade payables | (173,196) | 347,295
6.01.02.10 | Trade payables – Drawee Risk | 862,412 | 59,642
6.01.02.11 | Payroll and related taxes | 71,196 | 42,988
6.01.02.12 | Taxes in installments – REFIS | (54,424) | 21,669
6.01.02.13 | Payables to related parties | 33,526 | 276,039
6.01.02.15 | Interest paid | (1,067,847) | (1,261,483)
6.01.02.16 | Interest received – related parties | 0 | 1,522
6.01.02.18 | Others | (111,010) | 60,662
6.02 | Net cash used in investing activities | (781,052) | (702,609)
6.02.01 | Advance for future capital increase/Investments | (70,623) | (117,130)
6.02.02 | Purchase of property, plant and equipment | (759,368) | (354,064)
6.02.07 | Intercompany loans granted | (170,182) | (103,947)
6.02.09 | Intercompany loans received | 0 | 8,429
6.02.11 | Financial Investments, net of redemption | 219,121 | (175,274)
6.02.13 | Cash received upon disposal of Usiminas’ shares | 0 | 39,377
6.03 | Net cash used in financing activities | (914,916) | (4,634,029)
6.03.01 | Borrowings and financing raised | 3,377,697 | 530.468
6.03.02 | Transactions cost - Borrowings and financing | (35,262) | (57,625)
6.03.03 | Borrowings and financing – related parties | 3,274,891 | 0
6.03.05 | Amortization of borrowings and financing | (5,028,445) | (1,915,296)
6.03.06 | Amortization of borrowings and financing - related parties | (1,181,350) | (3,404,978)
6.03.07 | Amortization of leases | (11,768) | 0
6.03.08 | Dividends and interest on shareholder’s equity | (1,310,679) | 0
6.03.09 | Sale of treasury shares | 0 | 213,402
6.05 | Increase (decrease) in cash and cash equivalents | 206,493 | 1,008,720
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 | 746,346 | 1,402,224

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Parent Company Financial Statements / Statement of Changes in Equity - 01/01/2019 to 09/30/2019
(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
5.04 | Capital transaction with shareholders | 0 | 0 | 0 | (412,659) | 0 | (412,659)
5.04.06 | Dividends | 0 | 0 | 0 | (412,659) | 0 | (412,659)
5.05 | Total comprehensive income | 0 | 0 | 0 | 744,553 | (196,236) | 548,317
5.05.01 | Profit (loss) for the period | 0 | 0 | 0 | 744,553 | 0 | 744,553
5.05.02 | Other comprehensive income | 0 | 0 | 0 | 0 | (196.236) | (196,236)
5.05.02.04 | Translation adjustments for the year | 0 | 0 | 0 | 0 | 36,700 | 36,700
5.05.02.08 | Actuarial gains/(losses) on pension plan, net of taxes | 0 | 0 | 0 | 0 | 93,983 | 93,983
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 | (327,108) | (327,108)
5.05.02.13 | Gain (Loss) on hedge of net investment in foreign operations. | 0 | 0 | 0 | 0 | 2,184 | 2,184
5.07 | Closing balance | 4,540,000 | 32,720 | 3,064,827 | 331,894 | 868,952 | 8,838,393

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Parent Company Financial Statements / Statement of Changes in Equity - 01/01/2018 to 09/30/2018
(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
5.04.08 | Gain on disposal of shares | 0 | 32,690 | 0 | 0 | 0 | 32,690
5.05 | Total comprehensive income | 0 | 0 | 0 | 3,353,848 | (3,137,753) | 216,095
5.05.01 | Profit (loss) for the period | 0 | 0 | 0 | 3,353,848 | - | 3,353,848
5.05.02 | Other comprehensive income | 0 | 0 | 0 | 0 | (3,137,753) | (3,137,753)
5.05.02.04 | Translation adjustments for the year | 0 | 0 | 0 | 0 | (17,175) | (17,175)
5.05.02.08 | Actuarial gains/(losses) on pension plan, net of taxes | 0 | 0 | 0 | 0 | 89 | 89
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 | (1,528,035) | (1,528,035)
5.05.02.13 | (Loss) / gain on hedge of net investments in foreign operations | 0 | 0 | 0 | 0 | (32,196) | (32,196)
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 | 2,062,159 | 641,279 | 7,456,870

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Parent Company Financial Statements / Statement of Value Added
(R$ thousand)
|  | Year to date | Previous year
Code | Description | 01/01/2019 to 09/30/2019 | 01/01/2018 to 09/30/2018
7.01 | Revenues | 10,572,016 | 14,591,261
7.01.01 | Sales of products and rendering of services | 10,856,499 | 11,739,960
7.01.02 | Other revenues | (306,910) | 2,858,386
7.01.04 | Allowance for (reversal of) doubtful debts | 22,427 | (7,085)
7.02 | Raw materials acquired from third parties | (10,471,007) | (8,518,250)
7.02.01 | Cost of sales and services | (8,801,675) | (7,974,515)
7.02.02 | Materials, electric power, outsourcing and other | (1,646,063) | (543,723)
7.02.03 | Impairment/recovery of assets | (23,269) | (12)
7.03 | Gross value added | 101,009 | 6,073,011
7.04 | Retentions | (481,891) | (443,017)
7.04.01 | Depreciation, amortization and depletion | (481,891) | (443,017)
7.05 | Wealth created | (380,882) | 5,629,994
7.06 | Value added received | 2,450,407 | 1,080,108
7.06.01 | Equity in results of affiliates companies | 2,187,998 | 467,716
7.06.02 | Financial income | 203,210 | 475,247
7.06.03 | Others | 59,199 | 137,145
7.06.03.01 | Others and exchange gains | 59,199 | 137,145
7.07 | Wealth for distribution | 2,069,525 | 6,710,102
7.08 | Wealth distributed | 2,069,525 | 6,710,102
7.08.01 | Personnel | 1,007,083 | 934,365
7.08.01.01 | Salaries and wages | 749,657 | 693,615
7.08.01.02 | Benefits | 203,434 | 192,532
7.08.01.03 | Severance payment (FGTS) | 53,992 | 48,218
7.08.02 | Taxes, fees and contributions | (1,154,328) | 348,815
7.08.02.01 | Federal | (1,326,467) | 121,522
7.08.02.02 | State | 172,139 | 227,290
7.08.02.03 | Municipal | 0 | 3
7.08.03 | Remuneration on third-party capital | 1,472,217 | 2,073,074
7.08.03.01 | Interest | 1,307,407 | 1,236,625
7.08.03.02 | Leases | 5,179 | 5,108
7.08.03.03 | Others | 159,631 | 831,341
7.08.03.03.01 | Others and exchange losses | 159,631 | 831,341
7.08.04 | Remuneration on Shareholders' capital | 744,553 | 3,353,848
7.08.04.02 | Dividends | 412,659 | 0
7.08.04.03 | Retained earnings (accumulated losses) | 331,894 | 3,353,848

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Quarterly Financial Information - September 30, 2019 – CIA SIDERURGICA NACIONAL | ## Version: 1

Consolidated Financial Statements / Balance Sheet - Assets
(R$ thousand)
Code | Description | Current Quarter | Previous Year
09/30/2019 | 12/31/2018
1 | Total Assets | 50,897,511 | 47,327,524
1.01 | Current assets | 12,968,644 | 12,014,483
1.01.01 | Cash and cash equivalents | 1,895,863 | 2,248,004
1.01.02 | Financial investments | 696,153 | 895,713
1.01.02.03 | Financial investments measured at amortized cost | 696,153 | 895,713
1.01.03 | Trade receivables | 2,409,990 | 2,078,182
1.01.04 | Inventory | 5,900,197 | 5,039,560
1.01.08 | Other current assets | 2,066,441 | 1,753,024
1.01.08.03 | Others | 2,066,441 | 1,753,024
1.01.08.03.01 | Recoverable taxes | 1,560,537 | 1,412,335
1.01.08.03.02 | Prepaid expenses | 311,614 | 166,986
1.01.08.03.03 | Dividends receivable | 46,171 | 46,171
1.01.08.03.04 | Derivative financial instruments | 5,208 | 351
1.01.08.03.05 | Others | 142,911 | 127,181
1.02 | Non-current assets | 37,928,867 | 35,313,041
1.02.01 | Long-term assets | 6,264,173 | 4,382,389
1.02.01.03 | Financial investments measured at amortized cost | 8,395 | 7,772
1.02.01.07 | Deferred tax assets | 1,729,424 | 89,394
1.02.01.10 | Other non-current assets | 4,526,354 | 4,285,223
1.02.01.10.03 | Recoverable taxes | 1,882,903 | 1,822,388
1.02.01.10.04 | Judicial deposits | 351,684 | 347,950
1.02.01.10.05 | Prepaid expenses | 137,970 | 149,702
1.02.01.10.06 | Receivable from related parties | 1,108,260 | 925,445
1.02.01.10.07 | Others | 1,045,537 | 1,039,738
1.02.02 | Investments | 5,439,094 | 5,630,613
1.02.03 | Property, plant and equipment | 18,994,384 | 18,046,864
1.02.03.01 | Property, plant and equipment in operation | 18,530,510 | 18.046.864
1.02.03.02 | Right of use in progress | 463,874 | 0
1.02.04 | Intangible assets | 7,231,216 | 7,253,175

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Quarterly Financial Information - September 30, 2019 – CIA SIDERURGICA NACIONAL | ## Version: 1

Consolidated Financial Statements / Balance Sheet – Liabilities
(R$ thousand)
Code | Description | Current Quarter | Previous Year
09/30/2019 | 12/31/2018
2 | Total liabilities | 50,897,511 | 47,327,524
2.01 | Current liabilities | 12,274,298 | 11,438,552
2.01.01 | Payroll and related taxes | 349,583 | 248,185
2.01.02 | Trade payables | 3,268,951 | 3,408,056
2.01.03 | Tax payables | 486,482 | 251,746
2.01.04 | Borrowings and financing | 5,603,094 | 5,653,439
2.01.05 | Other payables | 2,460,287 | 1,770,623
2.01.05.02 | Others | 2,460,287 | 1,770,623
2.01.05.02.04 | Dividends and interests on shareholder´s equity | 2,521 | 932,005
2.01.05.02.05 | Advances from clients | 892,485 | 137,418
2.01.05.02.06 | Trade payables – Drawee risk | 928,178 | 65,766
2.01.05.02.07 | Lease liabilities | 26,591 | 0
2.01.05.02.08 | Derivative financial instruments | 7,664 | 0
2.01.05.02.09 | Other provisions | 602,848 | 635,434
2.01.06 | Provisions | 105,901 | 106,503
2.01.06.01 | Provision for tax, social security, labor and civil risks | 105,901 | 106,503
2.02 | Non-current liabilities | 28,587,144 | 25,875,532
2.02.01 | Long term Borrowings and financing | 23,674,181 | 23,173,635
2.02.02 | Other payables | 2,632,543 | 227,328
2.02.02.02 | Others | 2,632,543 | 227,328
2.02.02.02.03 | Advances from clients | 1,990,878 | 0
2.02.02.02.04 | Lease liabilities | 435,437 | 0
2.02.02.02.05 | Other payables | 206,228 | 227,328
2.02.03 | Deferred tax liabilities | 624,583 | 601,731
2.02.04 | Provisions | 1,655,837 | 1,872,838
2.02.04.01 | Provision for tax, social security, labor and civil risks | 553,456 | 685,953
2.02.04.02 | Other provisions | 1.102,381 | 1,186,885
2.02.04.02.03 | Provision for environmental liabilities and decommissioning of assets | 289,643 | 281,766
2.02.04.02.04 | Pension and healthcare plan | 812,738 | 905,119
2.03 | Consolidated Shareholders’ equity | 10,036,069 | 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) | 331,894 | 0
2.03.08 | Other comprehensive income | 868,952 | 1,065,188
2.03.09 | Profit attributable to the non-controlling interests | 1,197,676 | 1,310,705

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Quarterly Financial Information - September 30, 2019 – CIA SIDERURGICA NACIONAL | ## Version: 1

Consolidated Financial Statements / Statements of Income
(R$ thousand)
|  | Current Quarter | Year to date | Same quarter previous year | YTD previous year
Code | Description | 07/01/2019 to 09/30/2019 | 01/01/2019 to 09/30/2019 | 07/01/2018 to 09/30/2018 | 01/01/2018 to 09/30/2018
3.01 | Revenues from sale of goods and rendering of services | 6,006,393 | 18,912,601 | 6,164,989 | 16,917,953
3.02 | Costs from sale of goods and rendering of services | (4,370,357) | (12,834,121) | (4,298,540) | (12,107,201)
3.03 | Gross profit | 1,636,036 | 6,078,480 | 1,866,449 | 4,810,752
3.04 | Operating (expenses)/income | (1,365,864) | (3,494,511) | (453,100) | 784,836
3.04.01 | Selling expenses | (429,836) | (1,429,593) | (569,294) | (1,497,306)
3.04.02 | General and administrative expenses | (137,497) | (383,379) | (105,785) | (331,033)
3.04.04 | Other operating income | (183,090) | (163,924) | 598,458 | 3,227,902
3.04.05 | Other operating expenses | (679,510) | (1,636,583) | (420,325) | (710,737)
3.04.06 | Equity in results of affiliated companies | 64,069 | 118,968 | 43,846 | 96,010
3.05 | Profit before financial income (expenses) and taxes | 270,172 | 2,583,969 | 1,413,349 | 5,595,588
3.06 | Financial income (expenses) | (840,074) | (1,832,849) | (423,225) | (2,005,993)
3.06.01 | Financial income | 114,213 | 310,994 | 335,885 | 426,659
3.06.02 | Financial expenses | (954,287) | (2,143,843) | (759,110) | (2,432,652)
3.06.02.01 | Net exchange differences over financial instruments | (282,224) | (197,581) | (87,663) | (749,442)
3.06.02.02 | Financial expenses | (672,063) | (1,946,262) | (671,447) | (1,683,210)
3.07 | Profit (loss) before taxes | (569,902) | 751,120 | 990,124 | 3,589,595
3.08 | Income tax and social contribution | (300,754) | 359,449 | (237,960) | (161,249)
3.09 | Profit (loss) from continued operations | (870,656) | 1,110,569 | 752,164 | 3,428,346
3.11 | Consolidated Profit (loss) for the year | (870,656) | 1,110,569 | 752,164 | 3,428,346
3.11.01 | Profit attributable to the controlling interests | (992,958) | 744,553 | 721,535 | 3,353,848
3.11.02 | Profit attributable to the non-controlling interests | 122,302 | 366,016 | 30,629 | 74,498
3.99 | Earnings (loss) per common share – (Reais/share) |  |  |  |
3.99.01 | Basic |  |  |  |
3.99.01.01 | Common shares | (0.71948) | 0.53949 | 0.52810 | 2.45474
3.99.02 | Diluted |  |  |  |
3.99.02.01 | Common shares | (0.71948) | 0.53949 | 0.52810 | 2.45474

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Quarterly Financial Information - September 30, 2019 – CIA SIDERURGICA NACIONAL | ## Version: 1

Consolidated Financial Statements / Statement of Comprehensive Income
(R$ thousand)
|  | Current Quarter | Year to date | Same quarter previous year | YTD previous year
Code | Description | 07/01/2019 to 09/30/2019 | 01/01/2019 to 09/30/2019 | 07/01/2018 to 09/30/2018 | 01/01/2018 to 09/30/2018
4.01 | Consolidated profit (loss) for the year | (870,656) | 1,110,569 | 752,164 | 3,428,346
4.02 | Other comprehensive income | (791,913) | (196,230) | (226,234) | (3,137,747)
4.02.01 | Actuarial gains over pension plan of affiliates, net of taxes | 32 | 95 | 32 | 95
4.02.02 | (Loss)/gain on the actuarial pension plan | 0 | 93.894 | 0 | 0
4.02.04 | Cumulative translation adjustments for the year | 64,636 | 36,700 | (29,171) | (17,175)
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 | 0 | (1,995) | 0 | (105)
4.02.10 | (Loss)/gain on cash flow hedge accounting | (1,038,192) | (959,789) | (372,883) | (1,724,818)
4.02.12 | (Loss)/gain on hedge of net investment in foreign operations. | (4,411) | 2,184 | (7,263) | (32,196)
4.02.13 | Realization of cash flow hedge accounting reclassified to income statement | 186,022 | 632,681 | 183,051 | 196,783
4.02.14 | (Loss)/gain on business combination | 0 | 0 | 0 | (651)
4.03 | Consolidated comprehensive income for the year | (1,662,569) | 914,339 | 525,930 | 290,599
4.03.01 | Attributed to controlling Shareholders | (1,784,873) | 548,317 | 495,299 | 216,095
4.03.02 | Attributed to non-controlling Shareholders | 122,304 | 366,022 | 30,631 | 74,504

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Quarterly Financial Information - September 30, 2019 – CIA SIDERURGICA NACIONAL | ## Version: 1

Consolidated Financial Statements / Statements of Cash Flows – Indirect Method
(R$ thousand)
|  | Year to date | YTD previous year
Code | Description | 01/01/2019 to 09/30/2019 | 01/01/2018 to 09/30/2018
6.01 | Net cash from operating activities | 3,760,369 | 1,598,553
6.01.01 | Cash from operations | 3,239,338 | 3,772,254
6.01.01.01 | Profit (loss) attributable to the controlling interests | 744,553 | 3,353,848
6.01.01.02 | Profit (loss) attributable to the non-controlling interests | 366,016 | 74,498
6.01.01.03 | Financial charges in borrowing and financing raised | 1,468,587 | 1,451,934
6.01.01.04 | Financial charges in borrowing and financing granted | (45,219) | (36,699)
6.01.01.05 | Charges on lease liabilities | 36,430 | 0
6.01.01.06 | Depreciation, depletion and amortization | 1,065,256 | 962,051
6.01.01.07 | Equity in in results of affiliated companies | (118,968) | (96,010)
6.01.01.08 | Deferred tax | (1,620,646) | (279,896)
6.01.01.09 | Provision for tax, social security, labor, civil and environmental risks | (132,585) | (39,918)
6.01.01.10 | Monetary and exchange variations, net | 911,174 | 1,121,423
6.01.01.11 | Result of derivative operations | 7,664 | 0
6.01.01.12 | Updated shares - VJR | 365,305 | (1,547,265)
6.01.01.13 | Write-off of fixed and intangible assets | 39,806 | 29,383
6.01.01.14 | Provision (Reversal) for consumption and services | 51,248 | 19,591
6.01.01.15 | Net gain on sale of foreign subsidiary | 0 | (1,164,294)
6.01.01.16 | Provision for environmental liabilities and decommissioning of assets | 7,877 | (61,499)
6.01.01.17 | Others | 92,840 | (14,893)
6.01.02 | Changes in assets and liabilities | 521,031 | (2,173,701)
6.01.02.01 | Trade receivables - third parties | (162,632) | 203,762
6.01.02.02 | Trade receivables - related parties | (90,822) | 2,114
6.01.02.03 | Inventories | (866,466) | (524,708)
6.01.02.04 | Receivables - related parties /Dividends | 5,320 | 1,654
6.01.02.05 | Tax assets | (196,688) | (860,082)
6.01.02.06 | Judicial deposits | (3,434) | (32,506)
6.01.02.08 | Trade payables | (151,385) | 374,862
6.01.02.09 | Trade payables – Drawee risk | 862,412 | 59,642
6.01.02.10 | Payroll and related taxes | 101,327 | 65,421
6.01.02.11 | Taxes in installments – REFIS | 229,376 | 30,103
6.01.02.12 | Payables to related parties | (23,538) | 120,713
6.01.02.13 | Advances from clients | 2,645,962 | 0
6.01.02.14 | Interest paid | (1,619,552) | (1,707,468)
6.01.02.17 | Others | (208,849) | 92,792
6.02 | Net cash used in investing activities | (1,316,527) | 525,126
6.02.02 | Advance for future capital increase/Investments | (56,226) | (96,902)
6.02.03 | Purchase of property, plant and equipment | (1,376,902) | (810,088)
6.02.05 | Receivable/(payable) from derivative transactions | (372) | (372)
6.02.06 | Acquisition of intangible assets | (437) | (631)
6.02.08 | Intercompany loans granted | (101,913) | (101,908)
6.02.09 | Intercompany loans received | 20,386 | 0
6.02.10 | Financial Investments, net of redemption | 198,937 | (174,709)
6.02.11 | Cash received from the sale of subsidiary abroad | 0 | 1,670,359
6.02.12 | Cash received from disposal of Usiminas’ shares | 0 | 39,377
6.03 | Net cash used in financing activities | (2,789,789) | (2,514,012)
6.03.01 | Borrowings and financing | 9,575,838 | 2,002,773
6.03.02 | Transaction cost - Borrowings and financing | (52,073) | (85,679)
6.03.04 | Amortization of borrowings and financing | (10,434,891) | (4,142,506)
6.03.06 | Lease amortization | (57,469) | 0
6.03.07 | Dividends and interest on equity | (1,821,194) | (502,002)
6.03.08 | Treasury shares sold | 0 | 213,402
6.04 | Exchange rate on translating cash and cash equivalents | (6,194) | (25,999)
6.05 | Increase (decrease) in cash and cash equivalents | (352,141) | (416,332)
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 | 1,895,863 | 2,995,240

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Quarterly Financial Information - September 30, 2019 – CIA SIDERURGICA NACIONAL | ## Version: 1

Consolidated Financial Statements / Statements of Changes in Equity - 01/01/2019 to 09/30/2019
(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
5.04 | Capital transaction with shareholders | 0 | 0 | 0 | (412,659) | 0 | (412,659) | (479,051) | (891,710)
5.04.06 | Dividends | 0 | 0 | 0 | (412,659) | 0 | (412,659) | (430,638) | (843,297)
5.04.07 | Interest on equity | 0 | 0 | 0 | 0 | 0 | 0 | (48,413) | (48,413)
5.05 | Total comprehensive income | 0 | 0 | 0 | 744,553 | (196,236) | 548,317 | 366,022 | 914,339
5.05.01 | Profit (loss) for the year | 0 | 0 | 0 | 744,553 | 0 | 744,553 | 366,016 | 1,110,569
5.05.02 | Other comprehensive income | 0 | 0 | 0 | 0 | (196,236) | (196,236) | 6 | (196,230)
5.05.02.04 | Translation adjustments for the year | 0 | 0 | 0 | 0 | 36,700 | 36,700 | 0 | 36,700
5.05.02.08 | Actuarial gains on pension plan, net of taxes | 0 | 0 | 0 | 0 | 93,983 | 93,983 | 6 | 93,989
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 cash flow hedge accounting, net of taxes | 0 | 0 | 0 | 0 | (327,108) | (327,108) | 0 | (327,108)
5.05.02.13 | (Loss) / gain on hedge of net investment in foreign operations | 0 | 0 | 0 | 0 | 2,184 | 2,184 | 0 | 2,184
5.07 | Closing balance | 4,540,000 | 32,720 | 3,064,827 | 331,894 | 868,952 | 8,838,393 | 1,197,676 | 10,036,069

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Quarterly Financial Information - September 30, 2019 – CIA SIDERURGICA NACIONAL | ## Version: 1

Consolidated Financial Statements / Statements of Changes in Equity - 01/01/2018 to 09/30/2018
(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 | (44,972) | 168,430
5.04.05 | Treasury shares sold | 0 | 0 | 180,712 | 0 | 0 | 180,712 | 0 | 180,712
5.04.06 | Dividends | 0 | 0 | 0 | 0 | 0 | 0 | (44,972) | (44,972)
5.04.08 | Gain on disposal of shares | 0 | 32,690 | 0 | 0 | 0 | 32,690 | 0 | 32,690
5.05 | Total comprehensive income | 0 | 0 | 0 | 3,353,848 | (3,137,753) | 216,095 | 74,504 | 290,599
5.05.01 | Profit (loss) for the year | 0 | 0 | 0 | 3,353,848 | 0 | 3,353,848 | 74,498 | 3,428,346
5.05.02 | Other comprehensive income | 0 | 0 | 0 | 0 | (3,137,753) | (3,137,753) | 6 | (3,137,747)
5.05.02.04 | Translation adjustments for the year | 0 | 0 | 0 | 0 | (17,175) | (17,175) | 0 | (17,175)
5.05.02.08 | Actuarial gains on pension plan, net of taxes | 0 | 0 | 0 | 0 | 89 | 89 | 6 | 95
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 cash flow hedge accounting, net of taxes | 0 | 0 | 0 | 0 | (1,528,035) | (1,528,035) | 0 | (1,528,035)
5.05.02.13 | (Loss) / gain on hedge of net investment in foreign operations | 0 | 0 | 0 | 0 | (32,196) | (32,196) | 0 | (32,196)
5.05.02.14 | (Loss)/gain on business combination | 0 | 0 | 0 | 0 | (651) | (651) | 0 | (651)
5.07 | Closing balance | 4,540,000 | 32,720 | 180,712 | 2,062,159 | 641,279 | 7,456,870 | 1,290,388 | 8,747,258

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Quarterly Financial Information - September 30, 2019 – CIA SIDERURGICA NACIONAL | ## Version: 1

Consolidated Financial Statements / Statements of Value Added
(R$ thousand)
|  | Year to date | Previous year
Code | Description | 01/01/2019 to 09/30/2019 | 01/01/2018 to 09/30/2018
7.01 | Revenues | 21,037,359 | 22,171,878
7.01.01 | Sales of products and rendering of services | 21,265,727 | 19,436,579
7.01.02 | Other revenues | (253,242) | 2,741,131
7.01.04 | Allowance for (reversal of) doubtful debts | 24,874 | (5,832)
7.02 | Raw materials acquired from third parties | (15,060,282) | (13,096,711)
7.02.01 | Cost of sales and services | (11,684,401) | (10,973,482)
7.02.02 | Materials, electric power, outsourcing and other | (3,288,431) | (2,138,978)
7.02.03 | Impairment/recovery of assets | (87,450) | 15,749
7.03 | Gross value added | 5,977,077 | 9,075,167
7.04 | Retentions | (1,065,256) | (962,051)
7.04.01 | Depreciation, amortization and depletion | (1,065,256) | (962,051)
7.05 | Wealth created | 4,911,821 | 8,113,116
7.06 | Value added received | 610,074 | 767,695
7.06.01 | Equity in results of affiliates companies | 118,968 | 96,010
7.06.02 | Finance income | 310,994 | 426,659
7.06.03 | Others | 180,112 | 245,026
7.06.03.01 | Others and exchange gains | 180,112 | 245,026
7.07 | Wealth for distribution | 5,521,895 | 8,880,811
7.08 | Wealth distributed | 5,521,895 | 8,880,811
7.08.01 | Personnel | 1,715,683 | 1,704,716
7.08.01.01 | Salaries and wages | 1,323,162 | 1,336,162
7.08.01.02 | Benefits | 312,758 | 306,773
7.08.01.03 | Severance payment (FGTS) | 79,763 | 61,781
7.08.02 | Taxes, fees and contributions | 356,167 | 1,066,341
7.08.02.01 | Federal | 132,068 | 782,642
7.08.02.02 | State | 206,813 | 265,348
7.08.02.03 | Municipal | 17,286 | 18,351
7.08.03 | Remuneration on third-party capital | 2,339,476 | 2,681,408
7.08.03.01 | Interest | 1,946,262 | 1,683,210
7.08.03.02 | Leases | 15,521 | 19,307
7.08.03.03 | Others | 377,693 | 978,891
7.08.03.03.01 | Others and exchange losses | 377,693 | 978,891
7.08.04 | Remuneration on Shareholders' capital | 1,110,569 | 3,428,346
7.08.04.02 | Dividends | 412,659 | 0
7.08.04.03 | Retained earnings (accumulated losses) | 331,894 | 3,353,848
7.08.04.04 | Non-controlling interests in retained earnings | 366,016 | 74,498

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##
Quarterly Financial Information – September 30, 2019 – CIA SIDERURGICA NACIONAL | ## Version: 1

Comments on the Company’s Consolidated Performance

São Paulo, October 23, 2019

Results for the Third Quarter of 2019

Companhia Siderúrgica Nacional (CSN) (BM&FBOVESPA: CSNA3) (NYSE: SID) announces its results for the third quarter of 2019 (3Q19) 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 third quarter of 2019 (3Q19) and comparisons refer to the second quarter of 2019 (2Q19) and the third quarter of 2018 (3Q18). The real/U.S. dollar exchange rate was R$ 4.1644 on 09/30/2019, R$3.8322 on 06/30/2019, and R$3.8748 on 12/31/2018.

Operating and Financial Highlights

· Adjusted EBITDA of R$1,567MM, down by 34% and 4% over 2Q19 and 3Q18, respectively, impacted by the blast furnace #3 maintenance and less favorable price achievements in mining.

· Mining EBITDA reached R$1,352MM, second best in a series, even with the strong volatility in seaborne freight and quality premium.

· Historical record in iron ore production at 8.654Mton, following the evolution of dry stacking and filtering operations.

· Working Capital applied to the business was reduced by R$ 1,201MM, highlighting the strong reduction in accounts receivable and inventories, contributing to cash generation of R$ 389MM.

· Leverage increased 3.81x due to exchange variation and dividends, partially offset by the second iron ore prepayment operation of US$ 250MM.

Highlights | 3Q18 | 2Q19 | 3Q19 |  | Change
| 3Q19 | x | 3Q18 | 3Q19 | x | 2Q19
Steel Sales (thousand t) | 1,290 | 1,161 | 1,072 |  | (17%) | (8%)
- Domestic Market | 912 | 771 | 750 |  | (18%) | (3%)
- Foreign Subsidiaries | 329 | 369 | 307 |  | (7%) | (17%)
- Exports | 48 | 21 | 15 |  | (69%) | (29%)
Iron Ore Sales (thousand t) | 9,288 | 10,143 | 9,209 |  | (1%) | (9%)
- Domestic market | 1,138 | 1,139 | 388 |  | (66%) | (66%)
- Foreign Market | 8,150 | 9,004 | 8,821 |  | 8% | (2%)
Consolidated Results (R$ million) |  |  |  |  |  |  |  |  |  |
Net Revenue | 6,165 | 6,901 | 6,006 |  | (3%) | (13%)
Gross Profit | 1,866 | 2,458 | 1,636 |  | (12%) | (33%)
Adjusted EBITDA¹ | 1,627 | 2,380 | 1,567 |  | (4%) | (34%)
Adjusted Net Debt² | 27,057 | 26,641 | 27,567 |  | 2% | 4%
Adjusted Cash and Cash Equivalents² | 4,083 | 3,177 | 2,981 |  | (27%) | (6%)
Net Debt / Adjusted EBITDA | 4.93x | 3.65x | 3.81x |  | -1,12 x | 0,16 x

¹ Adjusted EBITDA is calculated based on net (loss) 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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CSN’s Consolidated Results

· Net revenue in 3Q19 totaled R$6,006 million, 3% and 13% lower than in 3Q18 and 2Q19, respectively, mainly due to lower sales of steel in the foreign market and less favorable price achievements in mining.

· Cost of goods sold totaled R$4,370 million in 3Q19, 2% lower than in 2Q19. Costs in the steel segment decreased in comparison to 2Q19 due to the lower sales volume in the foreign market, while mining decreased in cost of goods sold due to the reduction in traded volume in the domestic market.

· Gross profit totaled R$1,636 million in 2Q19, 33% lower than in 2Q19. Gross margin fell 8.4 p.p. versus 2Q19, reaching 27.2% in 3Q19, mainly due to decrease in revenues explained above.

· In 3Q19, General and administrative expenses totaled R$137 million and Selling expenses totaled R$430 million, stable with 2Q19.

· Net other income (expenses) was an expense of R$863 million in 3Q19, mainly to non-cash items, such as the updating of shares at fair value and the recognition of hedge accounting expenses.

· Net financial result was an expense of R$840 million in 3Q19, higher than the 2Q19, mainly due to the variation in exchange rate with negative effect in results. Financial expenses (ex-exchange variation) remained stable when compared to the previous quarter, reaching R$672MM.

Financial Result (R$ million) | 3T18 | 2Q19 | 3Q19
Financial Result - IFRS | (423) | (358) | (840)
Financial revenue | 336 | 85 | 114
Financial expenses | (759) | (443) | (954)
Financial expenses (ex-exchange rate variation) | (671) | (641) | (672)
Result with exchange rate variation | (88) | 198 | (282)
Monetary and exchange rate variation | (465) | 295 | (1.329)
Hedge accounting | 380 | (97) | 1.043
Derivative result | (3) | 1 | (4)

· Equity in results of affiliated companies was positive R$64 million in 3Q19, versus a positive amount of R$29 million in 2Q19, mainly due to the improved performance of MRS.

Equity in results of affiliated companies (R$ million) | 3T18 | 2T19 | 3Q19 | Change
3Q19 | x | 3Q18 | 3Q19 | x | 2Q19
MRS Logística | 61 | 44 | 85 | 39% | 93%
CBSI | 1 | 1 | 3 | 200% | 200%
TLSA | (6) | (3) | (6) | - | 100%
Arvedi Metalfer BR | (2) | - | - | - | -
Eliminations | (11) | (12) | (17) | 55% | 42%
Equity in results of affiliated companies | 44 | 29 | 64 | 45% | 121%

· CSN recorded a net loss of R$871 million in 3Q19, versus a net profit of R$1,894 million in 2Q19, mainly due to the exchange variation and the updating of shares at fair value.

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Adjusted EBITDA (R$ million) | 3T18 | 2T19 | 3Q19 | Change
3Q19 | x | 3Q18 | 3Q19 | x | 2Q19
Net profit (loss) for the period | 752 | 1,894 | (871) | - | -
(-) Depreciation | 274 | 332 | 352 | 28% | 6%
(+) Income tax and social contribution | 238 | (1,119) | 301 | 26% | -
(+) Net financial result | 423 | 358 | 840 | 99% | 135%
EBITDA (CVM Instruction 527) | 1,687 | 1,465 | 622 | (63%) | (58%)
(+) Other operating income (expenses) | (178) | 802 | 863 | - | 8%
(+) Equity in results of affiliated companies | (44) | (29) | (64) | 45% | 121%
(-) Proportional EBITDA of jointly owned subsidiaries | 162 | 142 | 146 | (10%) | 3%
Adjusted EBITDA ¹ | 1,627 | 2,380 | 1,567 | (4%) | (34%)

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$1,567 million in 3Q19, versus R$2,380 million in the second quarter, 34% decrease explained by less favorable price achievements in mining and the blast furnace # 3 maintenance in steel. Adjusted EBITDA margin reached 25%, or 8.4 p.p. lower during the same period.

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

Free cash flow reached R$389 MM in 3Q19, positively influenced by the recovery in working capital, which more than offset Income tax disbursements, which were punctually high due to the previous quarter's record result.

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 09/30/2019, consolidated net debt reached R$27,577 million, while net debt/EBITDA, calculated based on LTM adjusted EBITDA, reached 3.81x, or 0.16x higher than in 2Q19. The evolution of leverage in the quarter was affected by the exchange variation and on time by the distribution of dividends in the amount of R$670 million, being R$413 million as anticipated dividends at CSN and R$257 million the portion related to non-controlling shareholders at CSN Mineração.

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Foreign Exchange Exposure

The net FX exposure (excluding the Perpetual Bond) of the consolidated balance sheet on 09/30/2019 was US$13 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.

Foreign Exchange Exposure | 09/30/2018 | 06/30/2019 | 09/30/2019
(in thousands of U.S. dollars) | IFRS | IFRS | IFRS
Cash | 316 | 295 | 200
Accounts Receivable | 359 | 549 | 337
Other | 6 | 5 | 5
Total Assets | 681 | 849 | 542
Loans and Financing | (4,250) | (4,295) | (4,219)
Trade Payables | (160) | (109) | (110)
Other Payables | (4) | (3) | (3)
Total Liabilities | (4,415) | (4,407) | (4,332)
Natural Foreign Exchange Exposure (Assets - Liabilities) | (3,734) | (3,558) | (3,791)
Cash Flow Hedge Accounting | 2,302 | 1,600 | 2,737
Swap CDI x Dollar | - | - | 67
Net Foreign Exchange Exposure | (1,433) | (1,958) | (987)
Perpetual Bond | 1,000 | 1,000 | 1,000
Net Foreign Exchange Exposure, excluding Perpetual Bond | (433) | (958) | 13

Investments

A total of R$603 million was invested in 3Q19, 31% higher than in 2Q19, mainly due to investments related to the scheduled maintenance of blast furnace#3 in the steel segment. In the mining segment, the investments refer to renovation of mine equipment and tailings filtering plants to process 100% of the production without the need to use dams.

Investments (R$ million) | 1Q18 | 2Q18 | 3Q18 | 4Q18 | 2018 | 1Q19 | 2Q19 | 3Q18
Steel | 65 | 134 | 168 | 271 | 637 | 160 | 212 | 405
Mining | 116 | 99 | 116 | 174 | 505 | 118 | 205 | 158
Other | 43 | 30 | 41 | 61 | 175 | 35 | 43 | 40
Total Investments - IFRS | 223 | 263 | 325 | 507 | 1,319 | 313 | 461 | 603

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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$2,224 million in 3Q19, or 13 days less in the financial cycle when compared to 2Q19, due to the strong reduction in accounts receivable, the decrease in inventory balance and increase in trade payables as a result of slab purchase operations.

Working Capital (R$ million) | 3Q18 | 2Q19 | 3Q19 |  | Change
| 3Q19 | x | 3Q18 | 3Q19 | X | 2Q19
Assets | 6,432 | 8,599 | 7,510 |  | 1,077 | (1,089)
Accounts receivable | 2,003 | 3,336 | 2,410 |  | 407 | (926)
Inventories | 4,054 | 5,254 | 5,097 |  | 1,043 | (156)
Prepaid taxes | 376 | 9 | 2 |  | (373) | (7)
Liabilities | 3,705 | 5,173 | 5,285 |  | 1,580 | 112
Trade payables | 2,934 | 3,999 | 4,197 |  | 1,263 | 199
Payroll and related taxes | 315 | 292 | 350 |  | 34 | 58
Taxes payable | 323 | 802 | 506 |  | 183 | (296)
Advances from customers | 133 | 81 | 233 |  | 100 | 152
Working Capital | 2,727 | 3,425 | 2,224 |  | (503) | (1,201)
Average Term (days) | 3Q18 | 2Q19 | 3Q19 |  | Change
| 3Q19 | x | 3Q18 | 3Q19 | X | 2Q19
Amounts received | 25 | 39 | 32 |  | 7 | (7)
Amounts paid | 61 | 81 | 86 |  | 25 | 5
Inventories | 85 | 106 | 105 |  | 20 | (1)
Financial Cycle | 49 | 64 | 51 |  | 2 | (13)

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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3Q19 Results | Steel | Mining | Port Logistics | Railway Logistics | Energy | Cement | Corporate Expenses/ Eliminations | Consolidated
(R$ million) |  |  |  |  |  |  |  |
Net Revenue | 3,334 | 2,336 | 69 | 354 | 74 | 161 | (322) | 6,006
Domestic Market | 2,417 | 142 | 69 | 354 | 74 | 161 | (540) | 2,677
Foreign Market | 917 | 2,194 | - | - | - | - | 218 | 3,330
COGS | (3,190) | (1,071) | (43) | (258) | (56) | (180) | 427 | (4,370)
Gross Profit | 144 | 1,265 | 26 | 96 | 19 | (19) | 106 | 1,636
SG&A | (198) | (51) | (9) | (26) | (8) | (25) | (251) | (567)
Depreciation | 159 | 138 | 2 | 97 | 4 | 33 | (83) | 352
Proportional EBITDA of jointly owned subsidiaries | - |  | - | - | - | - | 146 | 146
Adjusted EBITDA | 105 | 1,352 | 19 | 166 | 16 | (11) | (81) | 1,567
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
3Q18 Results | Steel | Mining | Port Logistics | Railway Logistics | Energy | Cement | Corporate Expenses/ Eliminations | Consolidated
(R$ million) |  |  |  |  |  |  |  |
Net Revenue | 4,099 | 1,659 | 64 | 406 | 104 | 160 | (329) | 6,165
Domestic Market | 2,899 | 229 | 64 | 406 | 104 | 160 | (678) | 3,185
Foreign Market | 1,200 | 1,431 | - | - | - | - | 349 | 2,980
COGS | (3,380) | (882) | (47) | (268) | (70) | (148) | 495 | (4,299)
Gross Profit | 719 | 778 | 17 | 138 | 35 | 12 | 167 | 1,866
SG&A | (221) | (37) | (8) | (24) | (7) | (23) | (355) | (675)
Depreciation | 154 | 70 | 6 | 65 | 4 | 28 | (53) | 274
Proportional EBITDA of jointly owned subsidiaries | - | - | - | - | - | - | 162 | 162
Adjusted EBITDA | 652 | 811 | 15 | 179 | 32 | 17 | (79) | 1,627

CSN’s Steel Results

In 2019, according to the World Steel Association (WSA), global crude steel production in the last 8 months totaled 1,240 million tons (Mton), or 4.4% higher than the same period in 2018. Asia produced 890 Mton during the same period in 2019, 7% higher than 2018, European Union fell by 2.9% and North America increased 0.8%.

According to the Brazilian Steel Institute (IABr), in 3Q19, domestic sales totaled 4.8 million tons, decreasing 6.6% in the comparison with the same period in 2018. Apparent consumption reached 5.3 million tons in 3Q19, decreasing 7.0% versus 3Q18. Brazilian crude steel production reached 7.4 million tons, decreasing 18.8% compared to the same period in 2018.

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· CSN’s slab production reached 358 thousand tons and slab purchased reached 162 thousand tons in 3Q19, totaling 520 thousand tons available for lamination process, 44% lower than 2Q19, due to the scheduled maintenance of Blast Furnace # 3 and consequent planned consumption of stocks. Production will be normalized from the second half of October, and so the production cost will be partially normalized in 4Q19 and fully in 1Q20.

Steel Production | 3T18 | 2T19 | 3T19 | Change
(in thousand tons) | 3Q19 | x | 3Q18 | 3Q19 | x | 2Q19
Total Slabs (UPV + Third Parties) | 938 | 924 | 520 | (45%) | (44%)
Slab Production | 937 | 856 | 358 | (62%) | (58%)
Third-Party Slabs | 1 | 68 | 162 | - | 138%
Total Flat Rolled Products | 899 | 839 | 765 | (15%) | (9%)
Total Long Rolled Products | 51 | 56 | 54 | 6% | (4%)

· Total sales reached 1,072 thousand tons in 3Q19, 8% lower than 2Q19, mainly due to the lower sales in the foreign market.

· | In 3Q19, domestic steel sales volume totaled 750 thousand tons, 2.7% less than 2Q19. According to the National Institute of Steel Distributors (INDA), from January to August 2019, distribution purchases decreased 3.5% over the previous year. Imports closed the accumulated period at 775.6 thousand tons, down by 8.8% over the same period of 2018. |  |
· | Foreign steel sales reached 322 thousand tons in 3Q19, 17% lower than in 2Q19, due to the seasonality in SWT’s business during the European summer and the increased competitiveness in the Lusosider market due to the USA – China trade war and falling steel demand. In this period, 15 thousand tons were exported directly, and 307 thousand tons were sold by foreign subsidiaries, of which 53 thousand tons by LLC, 183 thousand tons by SWT and 71 thousand tons by Lusosider. |  |

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· In 3Q19, 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 53% 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 43% in 2Q19 to 46% in 3Q19.

According to ANFAVEA, the production of automobiles, light commercial vehicles, trucks and buses reached 784 thousand units in 3Q19, increase of 3.19% versus the same period in 2018, and up by 0,98% in comparison to 2Q19. Exports showed a weaker performance, with sales of 115 thousand vehicles, 20.51% lower than the same period in 2018 and 1.7% lower in comparison to 2Q19. Anfavea expects vehicle production to grow by 9.1% in 2019, to 2.8 million units. According to ABRAMAT, revenues of the building materials industry increased by 2% from January to September of 2019 in comparison with the same period in 2018. but fell by 1% over the previous month. The result in September 2019 (+4% in 2018) reflects the relevant performance in the retail segment, as well as the improvement of real estate sales and launches. According to IBGE (Brazilian Institute of Geography and Statistics), home appliance production increased by 5.0% % in the twelve months ended August 2019 compared to the same period of the previous year. |

· | Net revenue from steel operations reached R$3,334 million in 3Q19, 9% lower than in 2Q19. This was due to the lower sales volume in the foreign market and stable prices in domestic and foreign market. |
· | Cost of goods sold decreased by 5.6% in 3T19, versus 2Q19, totaling R$3,190 million, mainly due to the lower sales volume.
· | Slab production cost reached R$2,177/t in 3Q19, 1.1% lower than in 2Q19, due to the higher efficiency in the mix of third-party slabs and slab production.
· | Adjusted EBITDA reached R$105 million in 3Q19, 53% lower than in 2Q19, driving the EBITDA Margin to 3.2% in 3Q19. The efficiency gains expected after the scheduled maintenance of blast furnace #3 will be partially observed in 4Q19 and fully in 1Q20, returning the profitability of the business unit to its historical standard.

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CSN’s Mining Results

In 3Q19, there was a slowdown in the Chinese economy following the intensification of the trade war with United States. In this scenario, the devaluation of Yuan and the retraction in steel prices negatively impacted iron ore prices, from levels above US$120/dmt at the end of July to levels around US$80/dmt in August. Driven by the record price of the year at the beginning of the quarter, iron ore price ended 3Q19 with an average of US$102.0/dmt (Platts, Fe62%, N. China), 2% higher than in 2Q19.

As for maritime freight, the BCI-C3 (Tubarão-Qingdao) route had an average of US$24.13/wmt in 3Q19, up by 55% compared to the previous quarter, influenced by the gradual increase in shipments following the return to operation of some mines in Brazil and normalization in Australian shipments.

· In 3Q19, CSN’s iron ore production reached 8.7 million tons, up 14% over the same period last year, reaching the highest volume ever achieved in a quarter.

· Iron Ore sales reached 9.2 million tons in 3Q19, 9% lower than the sales volume recorded in 2Q19, due to lower domestic sales, impacted by the maintenance of blast furnace#3.

Mining Production Volume and Sales | 3Q18 | 2Q19 | 3Q19 | Change
(in thousand tons) | 3Q19 | x | 3Q18 |  | 3Q19 | x | 2Q19
Iron Ore production | 7.620 | 8,323 | 8,654 | 14% |  | 4%
Iron Ore purchased from third parties | 1.501 | 1,786 | 1,121 | (25%) |  | (37%)
Total Production + Purchases | 9.122 | 10,110 | 9,775 | 7% |  | (3%)
Sales to UPV | 1.138 | 1,139 | 388 | (66%) |  | (66%)
Volume sold to third parties | 8.150 | 9,004 | 8,821 | 8% |  | (2%)
Total Sales | 9.288 | 10,143 | 9,209 | (1%) |  | (9%)

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

· Net revenue from mining operations reached R$2,336 million in 3Q19, 24% lower than the previous quarter due to lower prices (-13%) and lower sales volumes (-9%).

· The Platts 62 index reached US$102.0/dmt, 2% higher in the quarter. CIF+FOB prices were US$73.7/wmt, 13% lower than the same period in 2018. The negative variation in 3Q19 is explained by the basket of quotation periods, occasional negative quality adjustments and the expressive increase in freight.

· Cost of goods sold in the mining segment reached R$1,071 million in 3Q19, 5% lower than in 2Q19, due to a decrease in iron ore sales volume.

· EBITDA reached R$1,352million in 3Q19, 58% margin, the best second quarter result of the historical series for the business.

CSN’s Logistics Results

Railway Logistics: Net revenue reached R$354 million in 3Q19, with an EBITDA of R$166 million and an EBITDA Margin of 47.0%.

Port Logistics: Sepetiba Tecon shipped 193 thousand tons of steel products in 3Q19, in addition to 1 thousand tons of general cargo, approximately 41 thousand containers and 181 thousand tons of bulk cargo. Net revenue reached R$69 million, with an EBITDA of R$19 million and an EBITDA Margin of 28%.

Sepetiba TECON Highlights | 3Q18 | 2Q19 | 3Q19 | Change
3Q19 | x | 3Q18 | 3Q19 | x | 2Q19
Container volume (thousand units) | 63 | 38 | 41 | (35%) | 8%
Steel volume (thousand tons) | 88 | 130 | 193 | 119% | 48%
General cargo volume (thousand tons) | 63 | 2 | 1 | (98%) | (50%)
Bulk volume (thousand tons) | - | 374 | 181 | - | (52%)

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CSN’s Energy Results

According to EPE (Energy Research Company), electricity consumption in Brazil decreased by 0.8% in August 2019 versus the same month of the previous year. The industrial, residential and commercial segments decreased by 3.4%, 1.7% and 0.9%, respectively during the same period.

In 3Q19, the volume of traded energy decreased, totaling net revenue of R$74million, 5% lower than 2Q19. COGS was lower due to purchases in times of low demand, generating EBITDA of R$16 million driven by spot sales and EBITDA margin of 21%, increase of 10 p.p. when compared to the previous quarter.

CSN’s Cement Results

In the third quarter of 2019, domestic cement sales totaled 14.7 million tons, according to preliminary date of SNIC (National Cement Industry Association). This amount represents a 5.4% increase over the same period in 2018 and a 12.1% increase compared to the previous quarter. According to SNIC, a 3% growth is expected for 2019.

In 3Q19, net revenue reached R$ 161 million, an increase of 10% over the previous quarter, due to higher sales volume (+11%) and increase in COGS due to lower slag production due to blast furnace# 3 maintenance, generating negative EBITDA of R$11million.

Capital Market

CSN’s shares depreciated 20.49%% in the third quarter of 2019, while the IBOVESPA moved up 3.36%. Daily traded volume (CSNA3) on B3 averaged R$135 million. On the New York Stock Exchange (NYSE), CSN’s American Depositary Receipts (ADRs) depreciated 26.42%, while the Dow Jones climbed 0.75%. On the NYSE, daily traded volume of CSN’s ADRs (SID) averaged US$14 million.

2Q19 | 3Q19
Number of shares (in thousands) | 1,387,524 | 1,387,524
Market Cap |  |
Closing price (R$/share) | 16.71 | 13.23
Closing price (US$/ADR) | 4.31 | 3.16
Market cap (R$ million) | 23,186 | 18.357
Market cap (US$ million) | 5,980 | 4,408
Total return including dividends and interest on equity |  |
CSNA3 | 3.25% | (20.49%)
SID | 3.64% | (26.42%)
Ibovespa | 5.11% | 3.36%
Dow Jones | 1.91% | 0.75%
Volume |  |
Daily average (thousand shares) | 12,772 | 8,885
Daily average (R$ thousand) | 204,935 | 134,646
Daily average (thousand ADRs) | 3,560 | 3,725
Daily average (US$ thousand) | 14,268 | 13,954
Source: Bloomberg |  |

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CONSOLIDATED SALES VOLUME (in thousands of tons)
| 3Q18 | 2Q19 | 3Q19 |  | Change
|  | 3Q19 | x | 3Q18 |  | 3Q19 | x | 2Q19
Flat Steel | 859 | 719 | 698 |  | (161) |  | (21)
Slab | - | - | - |  | 0 |  | 0
Hot Rolled | 300 | 270 | 236 |  | (65) |  | (34)
Cold Rolled | 172 | 138 | 142 |  | (30) |  | 4
Galvanized | 307 | 234 | 241 |  | (66) |  | 7
Tin Plates | 79 | 77 | 78 |  | (1) |  | 1
UPV Long Steel | 53 | 52 | 53 |  | (1) |  | 1
DOMESTIC MARKET | 912 | 771 | 750 |  | (162) |  | (20)
| 3Q18 | 2Q19 | 3Q19 |  | 3Q19 | x | 3Q18 |  | 3Q19 | x | 2Q19
Flat Steel | 193 | 187 | 139 |  | (54) |  | (48)
Slab | - | 2 | - |  | - |  | (2)
Hot Rolled | 70 | 25 | 11 |  | (59) |  | (14)
Cold Rolled | 7 | 6 | 7 |  | - |  | 1
Galvanized | 69 | 131 | 106 |  | 37 |  | (25)
Tin Plates | 47 | 23 | 15 |  | (32) |  | (8)
Long Steel Profiles | 185 | 203 | 183 |  | (2) |  | (20)
FOREIGN MARKET | 378 | 390 | 322 |  | (56) |  | (68)
| 3Q18 | 2Q19 | 3Q19 |  | 3Q19 | x | 3Q18 |  | 3Q19 | x | 2Q19
Flat Steel | 1.052 | 906 | 836 |  | (216) |  | (70)
Slab | - | 2 | 0 |  | 0 |  | (2)
Hot Rolled | 370 | 295 | 247 |  | (123) |  | (48)
Cold Rolled | 179 | 144 | 149 |  | (30) |  | 5
Galvanized | 376 | 365 | 347 |  | (29) |  | (18)
Tin Plates | 126 | 100 | 93 |  | (33) |  | (7)
UPV Long Steel | 53 | 52 | 53 |  | (0) |  | 1
Long Steel Profiles | 185 | 203 | 183 |  | (2) |  | (20)
TOTAL MARKET | 1.290 | 1.161 | 1.072 |  | (218) |  | (89)

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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 cities of Congonhas and Ouro Preto, 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 by CSN Mineração to CSN. 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.

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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.

· 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.

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· 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. Disclosures on the bases for evaluating the operational continuity remain unchanged, 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

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 October 23, 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 September, 30, 2019, US$1 is equivalent to R$4.1644 (R$3.8748 as of December 31, 2018) and €1 is equivalent to R$4.5425 (R$4.4390 as of December 31, 2018), according to the rates obtained from the Central Bank of Brazil website.

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2.c) Basis of consolidation

The accounting policies have been consistently applied to all consolidated companies. The consolidated financial statements for the period ended September 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:

· Companies

|  | Equity interests (%) |
Companies | Number of shares held by CSN (in units) | 09/30/2019 |  | 12/31/2018 |  | Core business
Direct interest in subsidiaries: full consolidation |  |  |  |  |  |
CSN Islands VII Corp. | 20,001,000 | 100.00 |  | 100.00 |  | Financial transactions
CSN Islands XI Corp. | 50,000 | 100.00 |  | 100.00 |  | Financial transactions
CSN Islands XII Corp. | 1,540 | 100.00 |  | 100.00 |  | Financial transactions
CSN Steel S.L.U. | 22,042,688 | 100.00 |  | 100.00 |  | Equity interests and Financial transactions
TdBB S.A (*) |  | 100.00 |  | 100.00 |  | Equity interests
Sepetiba Tecon S.A. | 254,015,052 | 99.99 |  | 99.99 |  | Port services
Minérios Nacional S.A. | 141,719,295 | 99.99 |  | 99.99 |  | Mining and Equity interests
Companhia Florestal do Brasil | 42,551,519 | 99.99 |  | 99.99 |  | Reforestation
Estanho de Rondônia S.A. | 121,861,697 | 99.99 |  | 99.99 |  | Tin Mining
Companhia Metalúrgica Prada | 445,921,292 | 99.99 |  | 99.99 |  | Manufacture of packages and distribution of steel products
CSN Gestão de Recursos Financeiros Ltda. (1) |  |  |  | 99.99 |  | Management of funds and securities portfolio
CSN Mineração S.A. | 158,419,480 | 87.52 |  | 87.52 |  | Mining and Equity interests
CSN Energia S.A. | 43,149 | 99.99 |  | 99.99 |  | Sale of electric power
FTL - Ferrovia Transnordestina Logística S.A. | 442,672,357 | 91.69 |  | 91.69 |  | Railroad logistics
Nordeste Logística S.A. | 99,999 | 99.99 |  | 99.99 |  | Port services
Aceros México CSN (2) |  |  |  | 0.08 |  | Commercial representation, steel sales and related activities
CSN Inova Ltd. |  | 100.00 |  | 100.00 |  | Advisory and implementation of new development projects
CSN Equipamentos S.A (3) | 999 | 100.00 |  |  |  | Rental of commercial and industrial machinery and equipment
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 packages 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 (4) |  |  |  | 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 (2) |  |  |  | 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. | 253,606,846 | 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. (5) | 63,377,198 | 18.64 |  | 18.64 |  | Railroad transportation
Aceros Del Orinoco S.A. |  | 31.82 |  | 31.82 |  | Dormant company
CBSI - Companhia Brasileira de Serviços de Infraestrutura | 1,876,146 | 50.00 |  | 50.00 |  | Provision of services
Transnordestina Logística S.A. (6) | 24,670,093 | 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. | 46,994,971 | 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. CSN Gestão de Recursos Financeiros was liquidated on June 13, 2019;

2. 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;

3. Company incorporated on August 22, 2019 (see note 9);

4. On August 6, 2019 CSN Asia Limited was liquidated;

5. As of September 30, 2019, and December 31, 2018, the Company directly owned 26,611,282 common shares, 2,673,312 preferred shares class A and 34,092,604 preferred shares class B, totaling 36,765,916 preferred shares of MRS Logística S.A;

6. On May 10, 2019, 501,789 shares of shareholder FINOR, all class B preferred shares, were transferred to shareholder CSN. At September 30,2019, the Company had 24,168,304 ordinary shares, 501,789 preferred shares Class B (as of December 31,2018 had 24,168,304 ordinary shares and no preferred shares).

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· Exclusive funds

|  | Equity interests (%) |
Exclusive funds |  | 09/30/2019 |  | 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

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
| 09/30/2019 |  | 12/31/2018 |  | 09/30/2019 |  | 12/31/2018
Current |  |  |  |  |  |  |
Cash and cash equivalents |  |  |  |  |  |  |
Cash and banks | 905,695 |  | 1,124,714 |  | 73,983 |  | 37,323
Short-term investments |  |  |  |  |  |  |
In Brazil: |  |  |  |  |  |  |
Government securities | 12,718 |  | 10,247 |  | 312 |  | 477
Private securities | 818,323 |  | 609,480 |  | 574,786 |  | 410,036
| 831,041 |  | 619,727 |  | 575,098 |  | 410,513
Abroad: |  |  |  |  |  |  |
Time deposits | 159,127 |  | 503,563 |  | 97,265 |  | 92,017
Total short-term investments | 990,168 |  | 1,123,290 |  | 672,363 |  | 502,530
Cash and cash equivalents | 1,895,863 |  | 2,248,004 |  | 746,346 |  | 539,853

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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.

5. FINANCIAL INVESTMENTS

|  | Consolidated |  | Parent Company
|  | Current |  | Non Current |  | Current
|  | 09/30/2019 |  | 12/31/2018 |  | 09/30/2019 |  | 12/31/2018 |  | 09/30/2019 |  | 12/31/2018
CDB - Certificate of bank deposit (1) |  | 663,063 |  | 882,376 |  |  |  |  |  | 663,063 |  | 882,376
Government securities (2) |  | 33,090 |  | 13,337 |  |  |  |  |  | 813 |  | 621
Time Deposit (3) |  |  |  |  |  | 8,395 |  | 7,772 |  |  |  |
|  | 696,153 |  | 895,713 |  | 8,395 |  | 7,772 |  | 663,876 |  | 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
| 09/30/2019 |  | 12/31/2018 |  | 09/30/2019 |  | 12/31/2018
Trade receivables |  |  |  |  |  |  |
Third parties |  |  |  |  |  |  |
Domestic market | 1,357,328 |  | 1,369,396 |  | 1,056,620 |  | 1,094,323
Foreign market | 1,081,549 |  | 852,821 |  | 74,521 |  | 141,484
| 2,438,877 |  | 2,222,217 |  | 1,131,141 |  | 1,235,807
Allowance for doubtful debts | (213,026) |  | (237,352) |  | (154,428) |  | (176,855)
| 2,225,851 |  | 1,984,865 |  | 976,713 |  | 1,058,952
Related parties (note 18 a) | 184,139 |  | 93,317 |  | 1,019,196 |  | 906,865
| 2,409,990 |  | 2,078,182 |  | 1,995,909 |  | 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$29,165 as of September 30, 2019 (R$46,210 as of December 31, 2018) and in the Parent Company R$ 25,484 (R$40,849 as of December 31,2018).

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

|  | Consolidated |  | Parent Company
|  | 09/30/2019 |  | 12/31/2018 |  | 09/30/2019 |  | 12/31/2018
Current |  | 1,822,460 |  | 1,514,847 |  | 676,362 |  | 758,433
Past-due up to 30 days |  | 41,652 |  | 177,287 |  | 27,242 |  | 48,705
Past-due up to 180 days |  | 119,521 |  | 47,684 |  | 29,007 |  | 8,361
Past-due over 180 days |  | 455,244 |  | 482,399 |  | 398,530 |  | 420,308
|  | 2,438,877 |  | 2,222,217 |  | 1,131,141 |  | 1,235,807

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

|  | Consolidated |  | Parent Company
|  | 09/30/2019 |  | 12/31/2018 |  | 09/30/2019 |  | 12/31/2018
Opening balance |  | (237,352) |  | (191,979) |  | (176,855) |  | (140,392)
Estimated losses |  | (9,922) |  | (53,706) |  | (5,688) |  | (39,042)
Recovery of receivables |  | 34,248 |  | 8,333 |  | 28,115 |  | 2,579
Closing balance |  | (213,026) |  | (237,352) |  | (154,428) |  | (176,855)

7. INVENTORIES

|  |  | Consolidated |  |  |  | Parent Company
| 09/30/2019 |  | 12/31/2018 |  | 09/30/2019 |  | 12/31/2018
Finished goods | 1,790,774 |  | 1,501,969 |  | 1,166,898 |  | 951,529
Work in progress | 1,456,690 |  | 1,217,611 |  | 1,215,326 |  | 959,414
Raw materials | 1,819,503 |  | 1,584,140 |  | 1,350,259 |  | 1,273,029
Spare Parts | 930,345 |  | 857,402 |  | 535,892 |  | 495,385
Advances to suppliers | 30,330 |  | 36,192 |  | 26,615 |  | 28,185
(-) Provision for losses | (127,445) |  | (157,754) |  | (45,471) |  | (45,076)
| 5,900,197 |  | 5,039,560 |  | 4,249,519 |  | 3,662,466

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

|  |  |  | Consolidated |  |  |  | Parent Company
|  | 09/30/2019 |  | 12/31/2018 |  | 09/30/2019 |  | 12/31/2018
Opening balance |  | (157,754) |  | (135,840) |  | (45,076) |  | (51,968)
Reversal / (losses) for slow-moving and obsolescence | 30,309 |  | (21,914) |  | (395) |  | 6,892
Closing balance |  | (127,445) |  | (157,754) |  | (45,471) |  | (45,076)

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8. OTHER CURRENT AND NONCURRENT ASSETS

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

|  |  |  |  |  |  | Consolidated |  |  |  |  |  |  |  | Parent Company
| Current |  | Non-Current |  | Current |  | Non-Current
| 09/30/2019 |  | 12/31/2018 |  | 09/30/2019 |  | 12/31/2018 |  | 09/30/2019 |  | 12/31/2018 |  | 09/30/2019 |  | 12/31/2018
Judicial deposits (note 16) |  |  |  |  | 351,684 |  | 347,950 |  |  |  |  |  | 246,417 |  | 255,595
Credits with the PGFN (1) |  |  |  |  | 46,774 |  | 46,774 |  |  |  |  |  | 46,774 |  | 46,774
Recoverable taxes (2) | 1,560,537 |  | 1,412,335 |  | 1,882,903 |  | 1,822,388 |  | 1,347,629 |  | 1,265,003 |  | 1,670,170 |  | 1,692,274
Prepaid expenses | 109,822 |  | 49,830 |  | 56,798 |  | 49,808 |  | 69,423 |  | 25,716 |  | 47,165 |  | 34,450
Sea freight (3) | 201,792 |  | 117,156 |  |  |  |  |  |  |  | 2,357 |  |  |  |
Actuarial asset - related party (note 18 a) |  |  |  |  | 81,172 |  | 99,894 |  |  |  |  |  | 70,717 |  | 85,415
Derivative financial instruments (note 13 I) | 5,208 |  | 351 |  |  |  |  |  |  |  |  |  |  |  |
Securities held for trading (note 13 I) | 7,190 |  | 4,503 |  |  |  |  |  | 7,040 |  | 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) | 2,833 |  | 2,675 |  | 833,194 |  | 706,605 |  | 24,452 |  | 22,807 |  | 799,155 |  | 588,285
Other receivables from related parties (note 18 a) | 2,205 |  | 3,649 |  | 275,066 |  | 218,840 |  | 16,704 |  | 15,395 |  | 528,458 |  | 458,177
Other receivables (note 13 I) |  |  |  |  | 7,293 |  | 7,451 |  |  |  |  |  | 1,111 |  | 1,213
Eletrobrás compulsory loan (note 13 I) (5) |  |  |  |  | 846,065 |  | 813,428 |  |  |  |  |  | 845,090 |  | 812,803
Dividends receivable (note 18 a) | 46,171 |  | 46,171 |  |  |  |  |  | 24,154 |  | 259,186 |  |  |  |
Employee debt | 43,299 |  | 31,645 |  |  |  |  |  | 27,865 |  | 19,684 |  |  |  |
Other receivables | 6,940 |  | 12,753 |  |  |  |  |  | 3,080 |  | 3,055 |  |  |  |
Others | 80,444 |  | 71,956 |  | 707 |  | 988 |  |  |  |  |  | 707 |  | 986
| 2,066,441 |  | 1,753,024 |  | 4,526,354 |  | 4,285,223 |  | 1,520,347 |  | 1,617,555 |  | 4,255,963 |  | 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 from the second half of 2021.

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 September 30, 2019.

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

|  |  |  |  |  |  |  |  |  | 09/30/2019 |  |  |  |  |  |  |  | 12/31/2018 |  | 09/30/2018
Companies |  | Participation in |  |  |  |  |  |  | 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. |  | 370,490 |  | 2,247,188 |  | (1,876,698) |  |  |  | (227,603) |  | 338,645 |  | 1,987,741 |  | (1,649,096) |  |  |  | (1,515,668)
CSN Islands XI Corp. |  | 4,081,008 |  | 4,293,755 |  | (212,747) |  |  |  | (81,109) |  | 2,178,010 |  | 2,309,647 |  | (131,637) |  |  |  | (72,884)
CSN Islands XII Corp. |  | 2,365,604 |  | 4,170,071 |  | (1,804,467) |  |  |  | (327,061) |  | 2,402,671 |  | 3,880,076 |  | (1,477,405) |  |  |  | (345,435)
CSN Steel S.L.U. |  | 3,704,949 |  | 139,258 |  | 3,565,691 |  |  |  | 6,435 |  | 3,763,095 |  | 242,722 |  | 3,520,373 |  |  |  | 1,811,859
Sepetiba Tecon S.A. |  | 721,185 |  | 407,247 |  | 313,938 |  |  |  | (3,496) |  | 480,459 |  | 163,026 |  | 317,433 |  |  |  | 13,529
Minérios Nacional S.A. |  | 145,724 |  | 51,149 |  | 94,575 |  |  |  | 22,903 |  | 110,446 |  | 38,774 |  | 71,672 |  |  |  | 447
Fair Value - Minérios Nacional |  |  |  |  |  | 2,123,507 |  |  |  |  |  |  |  |  |  | 2,123,507 |  |  |  |
Estanho de Rondônia S.A. |  | 49,436 |  | 54,246 |  | (4,810) |  |  |  | (7,785) |  | 48,181 |  | 45,207 |  | 2,974 |  |  |  | (1,399)
Companhia Metalúrgica Prada |  | 796,750 |  | 630,648 |  | 166,102 |  |  |  | 80,534 |  | 644,954 |  | 559,386 |  | 85,568 |  |  |  | (36,742)
CSN Mineração S.A. |  | 13,748,789 |  | 5,480,336 |  | 8,268,453 |  |  |  | 2,583,898 |  | 13,235,705 |  | 4,190,564 |  | 9,045,141 |  |  |  | 545,406
CSN Energia S.A. |  | 84,362 |  | 25,667 |  | 58,695 |  |  |  | 6,775 |  | 138,644 |  | 45,778 |  | 92,866 |  |  |  | 44,180
FTL - Ferrovia Transnordestina Logística S.A. | 469,252 |  | 224,610 |  | 244,642 |  |  |  | (35,761) |  | 403,623 |  | 123,220 |  | 280,403 |  |  |  | (21,410)
Companhia Florestal do Brasil |  | 35,024 |  | 1,177 |  | 33,847 |  |  |  | (40) |  | 34,990 |  | 1,604.0 |  | 33,386 |  |  |  | (101)
Nordeste Logística |  | 82 |  | 56 |  | 26 |  |  |  | (2) |  | 85 |  | 56 |  | 29 |  |  |  | 3
CSN Equipamentos S.A |  | 1 |  |  |  | 1 |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | 26,572,656 |  | 17,725,408 |  | 10,970,755 |  |  |  | 2,017,688 |  | 23,779,508 |  | 13,587,801 |  | 12,315,214 |  |  |  | 421,785
Joint-venture and Joint-operation |  |  |  |  |  |  |  |  |  |  |  |
Itá Energética S.A. |  | 257,651 |  | 15,958 |  | 241,693 |  |  |  | 4,165 |  | 258,835 |  | 16,288 |  | 242,547 |  |  |  | 7,382
MRS Logística S.A. |  | 2,092,122 |  | 1,289,630 |  | 802,492 |  |  |  | 85,908 |  | 1,563,350 |  | 846,813 |  | 716,537 |  |  |  | 70,282
CBSI - Companhia Brasileira de Serviços de Infraestrutura | 63,233 |  | 56,827 |  | 6,406 |  |  |  | 4,326 |  | 25,941 |  | 19,997 |  | 5,944 |  |  |  | 3,127
Transnordestina Logística S.A. |  | 4,280,553 |  | 3,089,556 |  | 1,190,997 |  | 271,116 |  | (15,159) |  | 4,065,604 |  | 2,883,851 |  | 1,181,753 |  | 271,116 |  | (16,470)
|  | 6,693,559 |  | 4,451,971 |  | 2,241,588 |  | 271,116 |  | 79,240 |  | 5,913,730 |  | 3,766,949 |  | 2,146,781 |  | 271,116 |  | 64,321
Associates |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Arvedi Metalfer do Brasil |  | 40,712 |  | 26,828 |  | 13,884 |  |  |  | (520) |  | 40,712 |  | 26,308 |  | 14,404 |  |  |  | (3,754)
|  | 40,712 |  | 26,828 |  | 13,884 |  |  |  | (520) |  | 40,712 |  | 26,308 |  | 14,404 |  |  |  | (3,754)
Classified at fair value through profit or loss (note 13 I) |  |  |  |  |  |  |  |  |  |
Usiminas |  |  |  |  |  | 1,869,953 |  |  |  |  |  |  |  |  |  | 2,250,623 |  |  |  |
Panatlântica |  |  |  |  |  | 45,441 |  |  |  |  |  |  |  |  |  | 28,566 |  |  |  |
|  |  |  |  |  | 1,915,394 |  |  |  |  |  |  |  |  |  | 2,279,189 |  |  |  |
Other Investiments |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Profit on subsidiaries' inventories | (24,956) |  |  |  | 91,418 |  |  |  |  |  | (116,375) |  |  |  | (14,452)
Others |  |  |  |  |  | 63,537 |  |  |  | 172 |  |  |  |  |  | 63,538 |  |  |  | (184)
|  |  |  |  |  | 38,581 |  |  |  | 91,590 |  |  |  |  |  | (52,837) |  |  |  | (14,636)
Total investiments |  |  |  |  |  | 15,451,318 |  |  |  | 2,187,998 |  |  |  |  |  | 16,973,867 |  |  |  | 467,716
Classification of investiments in the balance sheet |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Investiments in assets |  |  |  |  |  | 19,350,040 |  |  |  |  |  |  |  |  |  | 20,232,005 |  |  |  |
Investiments with equity deficit |  |  |  |  |  | (3,898,722) |  |  |  |  |  |  |  |  |  | (3,258,138) |  |  |  |
|  |  |  |  |  | 15,451,318 |  |  |  |  |  |  |  |  |  | 16,973,867 |  |  |  |

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
| 09/30/2019 |  | 12/31/2018 |  | 09/30/2019 |  | 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 | 27,909 |  |  |  | 28,409 |  | 81,594
Dividends (1) | (3,876) |  | (87,846) |  | (3,410,627) |  | (5,529,277)
Comprehensive income (2) | (1,901) |  | 272 |  | 36,976 |  | 15,186
Equity in results of affiliated companies (3) | 160,433 |  | 173,145 |  | 2,187,998 |  | 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) | (365,305) |  | 96,133 |  | (365,305) |  | 96,133
Amortization of fair value - investment MRS | (8,810) |  | (11,746) |  |  |  |
Others | 31 |  | 37 |  |  |  | 4,571
Closing balance of investments | 5,439,094 |  | 5,630,613 |  | 19,350,040 |  | 20,232,005
Investiments with equity deficit |  |  |  |  | (3,898,722) |  | (3,258,138)
Total | 5,439,094 |  | 5,630,613 |  | 15,451,318 |  | 16,973,867

1. In 2019, refers to the allocation of dividends of Itá Energética, CSN Energia, 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:

|  |  | Consolidated
| 09/30/2019 |  | 09/30/2018
Equity in results of affiliated companies |  |  |
MRS Logística S.A. | 171,772 |  | 140,528
CBSI - Companhia Brasileira de Serviços de Infraestrutura | 4,326 |  | 3,127
Transnordestina Logística S.A | (15,159) |  | (16,470)
Arvedi Metalfer do Brasil S.A | (520) |  | (3,754)
Others | 14 |  | (186)
| 160,433 |  | 123,245
Eliminations |  |  |
To cost of sales | (49,714) |  | (31,797)
To taxes | 16,903 |  | 10,811
Others |  |  |
Amortization of fair value - Investment in MRS | (8,810) |  | (8,810)
Others | 156 |  | 2,561
Equity in results of affiliated companies adjusted | 118,968 |  | 96,010

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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:

|  | 09/30/2019 |  | 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 |  | 1,023,847 |  | 15,627 |  | 44,409 |  | 54,062 |  | 345,962 |  | 2,091 |  | 19,234 |  | 29,870
Advances to suppliers |  | 19,815 |  | 818 |  |  |  | 287 |  | 17,750 |  | 73 |  | 1,734 |  | 937
Other current assets |  | 1,144,814 |  | 98,110 |  | 53,648 |  | 15,462 |  | 736,768 |  | 41,284 |  | 108,851 |  | 16,718
Total current assets |  | 2,188,476 |  | 114,555 |  | 98,057 |  | 69,811 |  | 1,100,480 |  | 43,448 |  | 129,819 |  | 47,525
Non-current assets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Other non-current assets |  | 729,856 |  | 2,480 |  | 163,199 |  | 24,701 |  | 804,570 |  | 2,111 |  | 222,630 |  | 25,840
Investments, PP&E and intangible assets |  | 8,305,864 |  | 9,430 |  | 8,795,969 |  | 434,003 |  | 6,482,292 |  | 6,324 |  | 8,428,567 |  | 457,578
Total non-current assets |  | 9,035,720 |  | 11,910 |  | 8,959,168 |  | 458,704 |  | 7,286,862 |  | 8,435 |  | 8,651,197 |  | 483,418
Total Assets |  | 11,224,196 |  | 126,465 |  | 9,057,225 |  | 528,515 |  | 8,387,342 |  | 51,883 |  | 8,781,016 |  | 530,943
Current liabilities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Borrowings and financing |  | 694,671 |  | 23,247 |  | 84,492 |  |  |  | 422,793 |  | 4,350 |  | 75,906 |  |
Leases |  | 247,494 |  |  |  |  |  |  |  |  |  |  |  |  |  |
Other current liabilities |  | 1,123,640 |  | 88,373 |  | 155,478 |  | 16,644 |  | 1,368,290 |  | 33,844 |  | 179,816 |  | 18,298
Total current liabilities |  | 2,065,805 |  | 111,620 |  | 239,970 |  | 16,644 |  | 1,791,083 |  | 38,194 |  | 255,722 |  | 18,298
Non-current liabilities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Borrowings and financing |  | 2,477,578 |  | 1,594 |  | 6,021,156 |  |  |  | 2,111,518 |  | 1,262 |  | 5,754,073 |  |
Leases |  | 1,661,986 |  |  |  |  |  |  |  |  |  |  |  |  |  |
Other non-current liabilities |  | 713,475 |  | 439 |  | 276,067 |  | 16,092 |  | 640,535 |  | 539 |  | 218,839 |  | 15,113
Total non-current liabilities |  | 4,853,039 |  | 2,033 |  | 6,297,223 |  | 16,092 |  | 2,752,053 |  | 1,801 |  | 5,972,912 |  | 15,113
Shareholders’ equity |  | 4,305,352 |  | 12,812 |  | 2,520,032 |  | 495,779 |  | 3,844,206 |  | 11,888 |  | 2,552,382 |  | 497,532
Total liabilities and shareholders’ equity |  | 11,224,196 |  | 126,465 |  | 9,057,225 |  | 528,515 |  | 8,387,342 |  | 51,883 |  | 8,781,016 |  | 530,943
|  | 01/01/2019 a 09/30/2019 |  | 01/01/2018 a 09/30/2018
|  | 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 |  | 2,499,115 |  | 210,754 |  |  |  | 120,493 |  | 2,733,791 |  | 118,260 |  |  |  | 123,731
Cost of sales and services |  | (1,782,914) |  | (184,737) |  |  |  | (61,991) |  | (1,828,773) |  | (102,120) |  |  |  | (55,450)
Gross profit |  | 716,201 |  | 26,017 |  |  |  | 58,502 |  | 905,018 |  | 16,140 |  | - |  | 68,281
Operating (expenses) income |  | 183,378 |  | (9,882) |  | (16,216) |  | (46,497) |  | (206,610) |  | (7,496) |  | (14,873) |  | (44,998)
Finance income (expenses), net |  | (200,106) |  | (1,079) |  | (16,139) |  | 914 |  | (126,021) |  | (56) |  | (20,699) |  | (369)
Income before income tax and social contribution |  | 699,473 |  | 15,056 |  | (32,355) |  | 12,919 |  | 572,387 |  | 8,588 |  | (35,572) |  | 22,914
Current and deferred income tax and social contribution |  | (238,579) |  | (6,404) |  |  |  | (4,375) |  | (195,328) |  | (2,334) |  |  |  | (7,773)
(Loss) profit for the year, net |  | 460,894 |  | 8,652 |  | (32,355) |  | 8,544 |  | 377,059 |  | 6,254 |  | (35,572) |  | 15,141

· 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 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.

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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 | 1,696 |  | 3,441 |  | 9,319 |  | 121 |  | 2,139 |  |  |  | 456 |  | 17,172
Acquisitions | 2,165 |  | 10,939 |  | 119,670 |  | 1,155 |  | 1,296,680 |  |  |  | 15,180 |  | 1,445,789
Capitalized interest (notes 24 and 28) |  |  |  |  |  |  |  |  | 61,040 |  |  |  |  |  | 61,040
Write-off (note 23) | (2,143) |  | (130) |  | (5,611) |  | (3) |  | (30,366) |  | (1,354) |  | (199) |  | (39,806)
Depreciation (note 22) |  |  | (100,619) |  | (871,101) |  | (4,012) |  |  |  | (33,700) |  | (12,698) |  | (1,022,130)
Transfers to other asset categories | 790 |  | 252,599 |  | 1,146,050 |  | 993 |  | (1,408,442) |  |  |  | 8,010 |  |
Transfer to intangible assets |  |  | (31) |  |  |  |  |  | (11,839) |  |  |  |  |  | (11,870)
Right of use- Initial recognition |  |  |  |  |  |  |  |  |  |  | 640,989 |  |  |  | 640,989
Right of use - Remesurement |  |  |  |  |  |  |  |  |  |  | (142,040) |  |  |  | (142,040)
Others |  |  | (43) |  | (958) |  |  |  | (170) |  | (21) |  | (432) |  | (1,624)
Balance at September 30, 2019 | 290,362 |  | 2,844,794 |  | 12,084,640 |  | 28,784 |  | 3,191,478 |  | 463,874 |  | 90,452 |  | 18,994,384
Cost | 290,362 |  | 4,012,785 |  | 23,718,050 |  | 168,340 |  | 3,191,478 |  | 497,449 |  | 379,218 |  | 32,257,682
Accumulated depreciation |  |  | (1,167,991) |  | (11,633,410) |  | (139,556) |  |  |  | (33,575) |  | (288,766) |  | (13,263,298)
Balance at September 30, 2019 | 290,362 |  | 2,844,794 |  | 12,084,640 |  | 28,784 |  | 3,191,478 |  | 463,874 |  | 90,452 |  | 18,994,384

|  |  |  | 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 |  | 2,164 |  | 10,850 |  | 26,219 |  | 285 |  | 741,462 |  |  |  | 3,575 |  | 784,555
Capitalized interest (notes 24 and 28) |  |  |  |  |  |  |  |  |  | 16,126 |  |  |  |  |  | 16,126
Write-off (note 23) |  | (1,954) |  |  |  | (11) |  | (3) |  | (15,018) |  | (1,338) |  |  |  | (18,324)
Depreciation (note 22) |  |  |  | (26,682) |  | (434,431) |  | (1,785) |  |  |  | (10,556) |  | (2,798) |  | (476,252)
Transfers to other asset categories |  | 789 |  | 20,479 |  | 479,628 |  | (3) |  | (505,094) |  |  |  | 4,201 |  |
Transfer to intangible assets |  |  |  |  |  |  |  |  |  | (10,115) |  |  |  |  |  | (10,115)
Right of use- Initial recognition |  |  |  |  |  |  |  |  |  |  |  | 61,072 |  |  |  | 61,072
Right of use - remesurement |  |  |  |  |  |  |  |  |  |  |  | (12,072) |  |  |  | (12,072)
Others |  |  |  |  |  | (387) |  |  |  |  |  | (21) |  |  |  | (408)
Balance at September 30, 2019 |  | 96,106 |  | 1,051,981 |  | 7,164,281 |  | 10,866 |  | 1,522,269 |  | 37,085 |  | 24,967 |  | 9,907,555
Cost |  | 96,106 |  | 1,355,043 |  | 13,917,108 |  | 97,903 |  | 1,522,269 |  | 47,528 |  | 130,877 |  | 17,166,834
Accumulated depreciation |  |  |  | (303,062) |  | (6,752,827) |  | (87,037) |  |  |  | (10,443) |  | (105,910) |  | (7,259,279)
Balance at September 30, 2019 |  | 96,106 |  | 1,051,981 |  | 7,164,281 |  | 10,866 |  | 1,522,269 |  | 37,085 |  | 24,967 |  | 9,907,555

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

The movement of the rights of use as of September 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 | (143,718) |  | 11,905 |  | (3,965) |  | (6,262) |  | (142,040)
Depreciation | (16,517) |  | (162) |  | (2,618) |  | (14,403) |  | (33,700)
Write-off | (1,338) |  |  |  |  |  | (16) |  | (1,354)
Others | (21) |  |  |  |  |  |  |  | (21)
Balance at September 30, 2019 | 394,539 |  | 66,256 |  | 3,200 |  | (121) |  | 463,874

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| 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 | 2,294 |  |  | (3,965) |  | (10,401) |  | (12,072)
Depreciation | (6,046) |  |  | (2,618) |  | (1,892) |  | (10,556)
Write-off | (1,338) |  |  |  |  |  |  | (1,338)
Others | (21) |  |  |  |  |  |  | (21)
Balance at September 30, 2019 | 32,753 |  |  | 3,201 |  | 1,131 |  | 37,085

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

|  |  |  |  |  |  |  | Consolidated
|  | Project description |  | Start date |  | Completion date |  | 09/30/2019 |  | 12/31/2018
Logistics |  |  |  |  |  |  |  |  |  |
|  | Current investments for maintenance of current operations. |  |  |  |  |  | 79,364 |  | 89,595
|  |  |  |  |  |  |  | 79,364 |  | 89,595
Mining |  |  |  |  |  |  |  |  |  |
|  | Expansion of Casa de Pedra Mine capacity production. |  | 2007 |  | 2020 | (1) | 875,117 |  | 844,194
|  | Expansion of TECAR export capacity. |  | 2009 |  | 2022 | (2) | 300,006 |  | 289,298
|  | Current investments for maintenance of current operations. |  |  |  |  |  | 334,413 |  | 725,616
|  |  |  |  |  |  |  | 1,509,536 |  | 1,859,108
Steel |  |  |  |  |  |  |  |  |  |
|  | Supply of 16 torpedo’s cars for operation in the steel industry |  | 2008 |  | 2020 |  | 80,456 |  | 94,920
|  | Current investments for maintenance of current operations. |  |  |  |  | (3) | 883,860 |  | 558,922
|  |  |  |  |  |  |  | 964,316 |  | 653,842
Cement |  |  |  |  |  |  |  |  |  |
|  | Construction of cement plants. |  | 2011 |  | 2023 | (4) | 570,007 |  | 585,163
|  | Current investments for maintenance of current operations. |  |  |  |  |  | 68,255 |  | 94,728
|  |  |  |  |  |  |  | 638,262 |  | 679,891
Construction in progress |  |  |  |  |  | 3,191,478 |  | 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
| 09/30/2019 |  | 12/31/2018 |  | 09/30/2019 |  | 12/31/2018
Buildings | 38 |  | 38 |  | 40 |  | 41
Machinery, equipment and facilities | 21 |  | 22 |  | 23 |  | 24
Furniture and fixtures | 12 |  | 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 | Rights and licenses | 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 |  |  | 5,317 |  | 11 |  | 3,498 |  |  |  | 34 |  | 8,860 |  |  |  |
Acquisitions and expeditures |  |  |  |  | 437 |  |  |  |  |  |  |  | 437 |  |  |  |
Transfer to property, plant and equipment |  |  |  |  | 7,782 |  |  |  | 4,088 |  |  |  | 11,870 |  | 6,027 | 4,088 | 10,115
Amortization (note 22) |  |  | (35,004) |  | (8,001) |  |  |  | (121) |  |  |  | (43,126) |  | (5,638) | (1) | (5,639)
Balance at September 30, 2019 | 3,590,931 |  | 259,086 |  | 55,201 |  | 153,507 |  | 3,170,966 |  | 1,525 |  | 7,231,216 |  | 50,002 | 4,087 | 54,089
Cost | 3,831,338 |  | 586,954 |  | 171,381 |  | 153,507 |  | 3,189,789 |  | 1,525 |  | 7,934,494 |  | 131,795 | 4,088 | 135,883
Accumulated depreciation | (131,077) |  | (327,868) |  | (116,180) |  |  |  | (18,823) |  |  |  | (593,948) |  | (81,793) | (1) | (81,794)
Adjustment for accumulated recoverable value | (109,330) |  |  |  |  |  |  |  |  |  |  |  | (109,330) |  |  |  |
Balance at September 30, 2019 | 3,590,931 |  | 259,086 |  | 55,201 |  | 153,507 |  | 3,170,966 |  | 1,525 |  | 7,231,216 |  | 50,002 | 4,087 | 54,089

(*) 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
| 09/30/2019 |  | 12/31/2018 |  | 09/30/2019 |  | 12/31/2018
Software | 9 |  | 7 |  | 9 |  | 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
|  |  | 09/30/2019 |  | 12/31/2018 |  | 09/30/2019 |  | 12/31/2018 |  | 09/30/2019 |  | 12/31/2018 |  | 09/30/2019 |  | 12/31/2018
Debt agreements in the international market |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Variable interest in US$: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Prepayment |  |  | 2,115,430 |  | 1,016,737 |  | 2,924,866 |  | 3,830,240 |  | 2,115,430 |  | 1,016,737 |  | 2,924,866 |  | 3,830,240
Fixed interest in US$: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Bonds, Perpetual Bonds and ACC |  | (1) | 2,103,592 |  | 2,490,178 |  | 10,515,110 |  | 8,613,491 |  | 54,156 |  | 478,463 |  |  |  |
Intercompany |  |  |  |  |  |  |  |  |  |  | 2,161,924 |  | 3,053,435 |  | 7,132,544 |  | 3,612,811
Fixed interest in EUR |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Intercompany |  |  |  |  |  |  |  |  |  |  | 21,109 |  | 16,988 |  | 1,211,405 |  | 997,809
Others |  |  | 155,161 |  | 181,056 |  | 158,989 |  | 106,535 |  |  |  |  |  |  |  |
|  |  | 4,374,183 |  | 3,687,971 |  | 13,598,965 |  | 12,550,266 |  | 4,352,619 |  | 4,565,623 |  | 11,268,815 |  | 8,440,860
Debt agreements in Brazil |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Securities with variable interest in R$: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
BNDES/FINAME, Debentures, NCE and CCB |  | (2) | 1,254,895 |  | 1,890,451 |  | 10,165,082 |  | 10,710,678 |  | 1,196,727 |  | 1,827,769 |  | 8,936,859 |  | 9,314,315
Securities with fixed interest in R$: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Prepayment |  |  |  |  | 103,375 |  |  |  |  |  |  |  | 103,375 |  |  |  |
|  |  | 1,254,895 |  | 1,993,826 |  | 10,165,082 |  | 10,710,678 |  | 1,196,727 |  | 1,931,144 |  | 8,936,859 |  | 9,314,315
Total Borrowings and Financing |  |  | 5,629,078 |  | 5,681,797 |  | 23,764,047 |  | 23,260,944 |  | 5,549,346 |  | 6,496,767 |  | 20,205,674 |  | 17,755,175
Transaction Costs and Issue Premiums |  |  | (25,984) |  | (28,358) |  | (89,866) |  | (87,309) |  | (28,965) |  | (22,379) |  | (75,191) |  | (67,967)
Total Borrowings and Financing + Transaction Costs |  |  | 5,603,094 |  | 5,653,439 |  | 23,674,181 |  | 23,173,635 |  | 5,520,381 |  | 6,474,388 |  | 20,130,483 |  | 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. In July 2019, the Company issued thought to its subsidiary CSN Resources, debt securities in the foreign market (“Bonds”), in the amount of US$ 175million, with maturity in February 2023 and interest of 7.625% per annum.

(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.

The following table shows the average interest rate:

|  | Consolidated |  |  |  | Parent Company
|  |  |  | 09/30/2019 |  |  |  | 09/30/2019
|  | Average interest rate (i) |  | Total debt |  | Average interest rate (i) |  | Total debt
US$ |  | 6.83% |  | 17,658,998 |  | 4.93% |  | 14,388,920
R$ |  | 7.13% |  | 11,419,977 |  | 6.98% |  | 10,133,586
EUR |  | 3.88% |  | 314,150 |  | 3.88% |  | 1,232,514
|  |  |  | 29,393,125 |  |  |  | 25,755,020

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

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

As of September 30, 2019, the principal amount updated with interest and monetary adjustment, financing and long term debentures by maturity year are as follows:

|  |  |  |  |  |  |  | Consolidated |  | Parent Company
|  |  |  |  |  |  |  | 09/30/2019 |  | 09/30/2019
|  |  |  |  |  |  |  | Principal |  | Principal
|  | Bank loans |  | Capital markets |  | Development agencies |  | Total |  | Total
2020 |  | 564,055 |  | 65,000 |  | 15,282 |  | 644,337 |  | 621,281
2021 |  | 2,696,608 |  | 636,667 |  | 55,519 |  | 3,388,794 |  | 2,985,027
2022 |  | 2,704,992 |  | 556,666 |  | 54,720 |  | 3,316,378 |  | 6,572,441
2023 |  | 2,958,843 |  | 4,502,070 |  | 53,841 |  | 7,514,754 |  | 3,267,456
2024 |  | 1,588,807 |  |  |  | 64,602 |  | 1,653,409 |  | 5,348,466
After 2024 |  |  |  | 2,498,640 |  | 583,335 |  | 3,081,975 |  | 1,411,003
Perpetual bonds |  |  |  | 4,164,400 |  |  |  | 4,164,400 |  |
|  | 10,513,305 |  | 12,423,443 |  | 827,299 |  | 23,764,047 |  | 20,205,674

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
|  | 09/30/2019 |  | 12/31/2018 |  | 09/30/2019 |  | 12/31/2018
Opening balance |  | 28,827,074 |  | 29,510,844 |  | 24,161,596 |  | 29,033,017
Raised (1) |  | 9,612,540 |  | 2,154,471 |  | 6,652,588 |  | 602,110
Payment of principal |  | (10,434,891) |  | (5,019,978) |  | (6,209,795) |  | (6,098,209)
Payment of charges |  | (1,619,552) |  | (2,141,710) |  | (1,067,847) |  | (1,670,988)
Provision of charges (Note 24) |  | 1,529,627 |  | 2,009,688 |  | 1,070,262 |  | 1,541,639
Disposal of LLC |  |  |  | (10,544) |  |  |  |
Others (2) |  | 1,362,477 |  | 2,324,303 |  | 1,044,060 |  | 754,027
Closing balance |  | 29,277,275 |  | 28,827,074 |  | 25,650,864 |  | 24,161,596

1. Funding of R$56,609 was raised to purchase fixed assets – see note 28.

2. Includes unrealized exchange and monetary variations.

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

· Funding raised and amortizations:

|  |  |  |  |  |  | Consolidated 09/30/2019
Nature |  |  | Raised |  | Amortization of principal |  | Amortization of charges
Prepayment |  |  | 571,153 |  | (725,062) |  | (192,941)
Bonds, Perpetual bonds, ACC and facility |  |  | 6,358,152 |  | (5,764,749) |  | (713,777)
BNDES/FINAME, Debentures, NCE and CCB |  |  | 2,683,235 |  | (3,945,080) |  | (712,834)
|  |  | 9,612,540 |  | (10,434,891) |  | (1,619,552)

· Covenants

The Company’s borrowing agreements provide for the fulfillment of certain non-financial obligations, as well as the maintenance of certain parameters and financial indicators, besides 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. The Company has complied with all financial and non-financial obligations (covenants) of its current contracts.

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
|  |  |  | 09/30/2019 |  | 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 |  |  |  | 1,895,863 |  | 1,895,863 |  |  |  | 2,248,004 |  | 2,248,004
Financial investments |  | 5 |  |  |  | 696,153 |  | 696,153 |  |  |  | 895,713 |  | 895,713
Trade receivables |  | 6 |  |  |  | 2,409,990 |  | 2,409,990 |  |  |  | 2,078,182 |  | 2,078,182
Dividends receivable |  | 8 |  |  |  | 46,171 |  | 46,171 |  |  |  | 46,171 |  | 46,171
Derivative financial instruments |  | 8 |  | 5,208 |  |  |  | 5,208 |  | 351 |  |  |  | 351
Trading securities |  | 8 |  | 7,190 |  |  |  | 7,190 |  | 4,503 |  |  |  | 4,503
Loans - related parties |  | 8 |  |  |  | 2,833 |  | 2,833 |  |  |  | 2,675 |  | 2,675
Total |  |  |  | 12,398 |  | 5,051,010 |  | 5,063,408 |  | 4,854 |  | 5,270,745 |  | 5,275,599
Non current |  |  |  |  |  |  |  |  |  |  |  |  |  |
Financial investments |  | 5 |  |  |  | 8,395 |  | 8,395 |  |  |  | 7,772 |  | 7,772
Other trade receivables |  | 8 |  |  |  | 7,293 |  | 7,293 |  |  |  | 7,451 |  | 7,451
Compulsory loan - Eletrobrás |  | 8 |  |  |  | 846,065 |  | 846,065 |  |  |  | 813,428 |  | 813,428
Loans - related parties |  | 8 |  |  |  | 833,194 |  | 833,194 |  |  |  | 706,605 |  | 706,605
Investments |  | 9 |  | 1,915,394 |  |  |  | 1,915,394 |  | 2,279,189 |  |  |  | 2,279,189
Total |  |  |  | 1,915,394 |  | 1,694,947 |  | 3,610,341 |  | 2,279,189 |  | 1,535,256 |  | 3,814,445
Total Assets |  |  |  | 1,927,792 |  | 6,745,957 |  | 8,673,749 |  | 2,284,043 |  | 6,806,001 |  | 9,090,044
Liabilities |  |  |  |  |  |  |  |  |  |  |  |  |  |
Current |  |  |  |  |  |  |  |  |  |  |  |  |  |
Borrowings and financing |  | 12 |  |  |  | 5,629,078 |  | 5,629,078 |  |  |  | 5,681,797 |  | 5,681,797
Leases |  | 14.a |  |  |  | 26,591 |  | 26,591 |  |  |  |  |  |
Trade payables |  |  |  |  |  | 3,268,951 |  | 3,268,951 |  |  |  | 3,408,056 |  | 3,408,056
Trade payables - Drawee risk |  | 14 |  |  |  | 928,178 |  | 928,178 |  |  |  | 65,766 |  | 65,766
Dividends and interest on equity |  | 14 |  |  |  | 2,521 |  | 2,521 |  |  |  | 932,005 |  | 932,005
Derivative financial instruments |  |  |  | 7,664 |  |  |  | 7,664 |  |  |  |  |  |
Total |  |  |  | 7,664 |  | 9,855,319 |  | 9,862,983 |  |  |  | 10,087,624 |  | 10,087,624
Non current |  |  |  |  |  |  |  |  |  |  |  |  |  |
Borrowings and financing |  | 12 |  |  |  | 23,764,047 |  | 23,764,047 |  |  |  | 23,260,944 |  | 23,260,944
Leases |  | 14.a |  |  |  | 435,437 |  | 435,437 |  |  |  |  |  |
Total |  |  |  |  |  | 24,199,484 |  | 24,199,484 |  |  |  | 23,260,944 |  | 23,260,944
Total Liabilities |  |  |  | 7,664 |  | 34,054,803 |  | 34,062,467 |  |  |  | 33,348,568 |  | 33,348,568

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|  |  |  |  |  |  |  |  |  |  |  |  |  | Parent Company
|  |  |  | 09/30/2019 |  | 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 |  |  |  | 746,346 |  | 746,346 |  |  |  | 539,853 |  | 539,853
Financial investments |  | 5 |  |  |  | 663,876 |  | 663,876 |  |  |  | 882,997 |  | 882,997
Trade receivables |  | 6 |  |  |  | 1,995,909 |  | 1,995,909 |  |  |  | 1,965,817 |  | 1,965,817
Dividends receivable |  | 8 |  |  |  | 24,154 |  | 24,154 |  |  |  | 259,186 |  | 259,186
Trading securities |  | 8 |  | 7,040 |  |  |  | 7,040 |  | 4,352 |  |  |  | 4,352
Loans - related parties |  | 8 |  |  |  | 24,452 |  | 24,452 |  |  |  | 22,807 |  | 22,807
Total |  |  |  | 7,040 |  | 3,454,737 |  | 3,461,777 |  | 4,352 |  | 3,670,660 |  | 3,675,012
Non current |  |  |  |  |  |  |  |  |  |  |  |  |  |
Outros títulos a receber |  | 8 |  |  |  | 1,111 |  | 1,111 |  |  |  | 1,213 |  | 1,213
Compulsory loan - Eletrobrás |  | 8 |  |  |  | 845,090 |  | 845,090 |  |  |  | 812,803 |  | 812,803
Loans - related parties |  | 8 |  |  |  | 799,155 |  | 799,155 |  |  |  | 588,285 |  | 588,285
Investiments |  | 9 |  | 1,915,394 |  |  |  | 1,915,394 |  | 2,279,189 |  |  |  | 2,279,189
Total |  |  |  | 1,915,394 |  | 1,645,356 |  | 3,560,750 |  | 2,279,189 |  | 1,402,301 |  | 3,681,490
Total assets |  |  |  | 1,922,434 |  | 5,100,093 |  | 7,022,527 |  | 2,283,541 |  | 5,072,961 |  | 7,356,502
Liabilities |  |  |  |  |  |  |  |  |  |  |  |  |  |
Current |  |  |  |  |  |  |  |  |  |  |  |  |  |
Borrowings and financing |  | 12 |  |  |  | 5,549,346 |  | 5,549,346 |  |  |  | 6,496,767 |  | 6,496,767
Leases |  | 14.a |  |  |  | 11,618 |  | 11,618 |  |  |  |  |  |
Trade payables |  |  |  |  |  | 2,481,895 |  | 2,481,895 |  |  |  | 2,655,091 |  | 2,655,091
Trade payables - Drawee risk |  | 14 |  |  |  | 928,178 |  | 928,178 |  |  |  | 65,766 |  | 65,766
Dividends and interest on equity |  | 14 |  |  |  | 2,521 |  | 2,521 |  |  |  | 900,541 |  | 900,541
Derivative financial instruments |  |  |  | 7,664 |  |  |  | 7,664 |  |  |  |  |  |
Total |  |  |  | 7,664 |  | 8,973,558 |  | 8,981,222 |  |  |  | 10,118,165 |  | 10,118,165
Non Current |  |  |  |  |  |  |  |  |  |  |  |  |  |
Borrowings and financing |  | 12 |  |  |  | 20,205,674 |  | 20,205,674 |  |  |  | 17,755,175 |  | 17,755,175
Leases |  | 14.a |  |  |  | 26,285 |  | 26,285 |  |  |  |  |  |
Total |  |  |  |  |  | 20,231,959 |  | 20,231,959 |  |  |  | 17,755,175 |  | 17,755,175
Total Liabilities |  |  |  | 7,664 |  | 29,205,517 |  | 29,213,181 |  |  |  | 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 |  | 09/30/2019 |  | 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 |  |  |  | 5,208 |  | 5,208 |  |  |  | 351 |  | 351
Trading securities |  | 7,190 |  |  |  | 7,190 |  | 4,503 |  |  |  | 4,503
Non-current |  |  |  |  |  |  |  |  |  |  |  |
Financial assets at fair value through profit or loss |  |  |  |  |  |  |  |  |  |  |  |
Investments |  | 1,915,394 |  |  |  | 1,915,394 |  | 2,279,189 |  |  |  | 2,279,189
Total Assets |  | 1,922,584 |  | 5,208 |  | 1,927,792 |  | 2,283,692 |  | 351 |  | 2,284,043
Liabilities |  |  |  |  |  |  |  |  |  |  |  |
Current |  |  |  |  |  |  |  |  |  |  |  |
Financial assets at fair value through profit or loss |  |  |  |  |  |  |  |  |  |  |  |
Derivative financial instruments |  |  |  | 7,664 |  | 7,664 |  |  |  |  |  |
Total Assets |  |  |  | 7,664 |  | 7,664 |  |  |  |  |  |

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.

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Class of shares |  | 09/30/2019 |  | 12/31/2018 |  | 09/30/2019
| Quantity |  | Share price |  | Closing Balance |  | Quantity |  | Share price |  | Closing Balance |  | Fair value adjustment recognized in profit or loss (note 23)
USIM3 |  | 107,156,651 |  | 9.35 |  | 1,001,915 |  | 107,156,651 |  | 11.44 |  | 1,225,872 |  | (223,957)
USIM5 |  | 111,144,456 |  | 7.81 |  | 868,038 |  | 111,144,456 |  | 9.22 |  | 1,024,751 |  | (156,713)
PATI3 |  | 2,065,529 |  | 22.00 |  | 45,441 |  | 1,997,642 |  | 14.30 |  | 28,566 |  | 15,365
|  |  |  |  |  | 1,915,394 |  |  |  |  |  | 2,279,189 |  | (365,305)

As of September 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 September 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 on B3.

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.

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The consolidated net exposure as of September 30, 2019 is as follows:

|  |  |  | 09/30/2019
Foreign Exchange Exposure |  | (Amounts in US$’000) |  | (Amounts in €’000)
Cash and cash equivalents overseas |  | 199,677 |  | 5,736
Trade receivables |  | 337,070 |  | 1,590
Other assets |  | 4,779 |  | 4,431
Total Assets |  | 541,526 |  | 11,757
Borrowings and financing |  | (4,218,624) |  | (24,158)
Trade payables |  | (110,298) |  | (8,258)
Other liabilities |  | (3,121) |  | (1,473)
Total Liabilities |  | (4,332,043) |  | (33,889)
Foreign exchange exposure |  | (3,790,517) |  | (22,132)
Cash flow hedge accounting |  | 2,736,665 |  |
Swap CDI x Dollar |  | 67,000 |  |
Net Investment hedge accounting |  |  |  | 24,000
Net foreign exchange exposure |  | (986,852) |  | 1,868
Perpetual Bonds |  | 1,000,000 |  |
Net foreign exchange exposure excluding perpetual bonds |  | 13,148 |  | 1,868

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:

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· Portfolio of derivative financial instruments

Exchange rate swap Dollar x Euro

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

Exchange rate swap CDI x Dollar

The company has derivative operations with Bradesco Bank to hedge its NCE debt raised in September 2019 with maturity in October 2023 in the amount of US$ 67million (equivalent to R$ 278milhões), at a cost consistent with that usually praticed by the Company.

|  |  |  |  |  |  |  |  |  |  |  |  |  | Consolidated
|  |  |  |  |  |  |  |  |  |  |  |  |  | 09/30/2019
|  |  |  |  |  |  |  | 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 |  | 23,837 |  | 99,439 |  | (94,231) |  | 5,208 |  | 4,621
Total Dollar-to-Euro swap |  |  |  |  |  | 23,837 |  | 99,439 |  | (94,231) |  | 5,208 |  | 4,621
Bradesco |  | 10/02/2023 |  | Dollar |  | 67,000 |  | 295,536 |  | (303,200) |  | (7,664) |  | (7,664)
Total Swap CDI x dollar |  |  |  |  |  | 67,000 |  | 295,536 |  | (303,200) |  | (7,664) |  | (7,664)
|  |  |  | 394,975 |  | (397,431) |  | (2,456) |  | (3,043)

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

|  | 09/30/2019
Instruments |  | Assets |  | Finance income (expenses), net
| Current |  | Total |
Dollar to euro swap |  | 5,208 |  | 5,208 |  | 4,621 |
Swap CDI x dollar |  | (7,664) |  | (7,664) |  | (7,664) |
|  | (2,456) |  | (2,456) |  | (3,043) |

· 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 September 30, 2019, US$2,736,665 in exports to be carried out from October 2019 until April 2026 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 September 30, 2019:

|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 09/30/2019
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 |  | (500,000) |  | (384,346) |  | -
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 |  |  |  |  |  | (148,630)
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 |  | (14,143) |  | (10,549) |  | (45,082)
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 |  | (12,500) |  | (5,687) |  | (76,948)
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) |  |  |  | (21,106)
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) |  |  |  | (67,120)
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) |  |  |  | (16,174)
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) |  |  |  | (45,287)
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) |  |  |  | (19,409)
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 |  | (8,000) |  | (1,514) |  | (17,224)
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 |  | (78,498) |  | (9,428) |  | (213,017)
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 |  | (512,000) |  | (197,973) |  | (561,970)
07/31/2019 |  | Bonds and prepayments in US$ to third parties |  | Part of the highly probable future monthly iron ore exports |  | Foreign exchange - R$ vs. US$ spot rate |  | January 2020 - April 2026 |  | 3.7649 |  | 1,342,761 |  |  |  |  |  | (536,436)
Total |  |  |  |  |  |  |  |  |  |  |  | 4,087,806 |  | (1,351,141) |  | (632,681) |  | (1,768,403)

(*) 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 September 30, 2019 is as follows:

| 12/31/2018 |  | Movement |  | Realization |  | 09/30/2019
Cash flow hedge accounting | 1,441,295 |  | 959,789 |  | (632,681) |  | 1,768,403
Fair value of cash flow hedge accounting, net of taxes | 1,441,295 |  | 959,789 |  | (632,681) |  | 1,768,403

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As of September 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 September 30, 2019 are as follows:

|  |  |  |  |  |  |  |  |  |  |  | 09/30/2019
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) | 1,757
Total |  |  |  |  |  |  |  |  |  | 120,000 |  | (96,000) | 1,757

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

| 12/31/2018 |  | Movement |  | 09/30/2019
Net Investment hedge accounting | 3,941 |  | (2,184) |  | 1,757
Fair value of net investment hedge in foreign operations | 3,941 |  | (2,184) |  | 1,757

As of September 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 September 30, 2019.

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

|  |  |  |  |  |  |  | 09/30/2019
Currency |  | Exchange rate |  | Probable scenario |  | Scenario 1 |  | Scenario 2
USD |  | 4.1644 |  | 4.0868 |  | 5.2055 |  | 6.2466
EUR |  | 4.5425 |  | 4.4755 |  | 5.6781 |  | 6.8138
USD x EUR |  | 1.0889 |  | 1.0986 |  | 1.3611 |  | 1.6334
|  |  |  |  |  | 09/30/2019 |  |
Interest |  | Interest rate |  | Scenario 1 |  | Scenario 2 |  |
CDI |  | 5.40% |  | 6.75% |  | 8.10% |  |
TJLP |  | 5.95% |  | 7.44% |  | 8.93% |  |
Libor |  | 2.06% |  | 2.57% |  | 3.08% |  |

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

|  |  |  |  |  |  |  |  |  | 09/30/2019
Instruments |  | Notional |  | Risk |  | Probable scenario (*) |  | Scenario 1 |  | Scenario 2
Hedge accounting of exports |  | 2,736,665 |  | Dollar |  | (212,365) |  | 2,849,140 |  | 5,698,280
Swap CDI x Dollar |  | 67,000 |  | Dollar |  | (5,199) |  | 69,754 |  | 139,508
Currency position |  |  |  |  |  |  |  |  |  |
(not including exchange derivatives above) |  | (3,790,517) |  | Dollar |  | 294,144 |  | (3,946,307) |  | (7,892,614)
Consolidated exchange position |  | (986,852) |  | Dollar |  | 76,580 |  | (1,027,413) |  | (2,054,826)
(including exchange derivatives above) |  |  |  |  |  |  |  |  |  |
Net Investment hedge accounting |  | 24,000 |  | Euro |  | (1,608) |  | 27,255 |  | 54,510
Currency position |  | (22,132) |  | Euro |  | 1,483 |  | (25,134) |  | (50,268)
Consolidated exchange position |  | 1,868 |  | Euro |  | (125) |  | 2,121 |  | 4,242
(including exchange derivatives above) |  |  |  |  |  |  |  |  |  |
Dollar-to-euro swap |  | 23,837 |  | Dólar |  | (4,329) |  | 14,680 |  | 27,939

(*) The probable scenarios were calculated considering the following variations for the risks: Real x Dollar – appreciation of Real by 1.86% / Real x Euro – appreciation of Real by 1.47%. Euro x Dollar – devaluation of Euro by 0.89%. Source: quotations from Central Bank of Brazil and Central Bank of Europe on 10/08/2019.

· 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 September 30, 2019.

|  |  |  |  |  |  |  |  |  |  |  |  | Consolidated
|  |  |  |  |  |  |  |  |  |  | Impact on profit or loss
Changes in interest rates |  | % p.a |  |  | Assets |  | Liabilities |  | Probable scenario (*) |  | Scenario 1 |  | Scenario 2
TJLP |  | 5.95 |  |  |  |  | (885,410) |  | (2,461) |  | (13,170) |  | (26,340)
Libor |  | 2.06 |  |  |  |  | (4,970,697) |  | (69,599) |  | (25,545) |  | (51,090)
CDI |  | 5.40 |  |  | 818,323 |  | (10,428,954) |  | (28,521) |  | (129,744) |  | (259,488)

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

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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.

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

|  |  |  |  |  |  |  |  | Consolidated
At September 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) | 5,629,078 |  | 4,033,131 |  | 12,484,541 |  | 7,246,375 |  | 29,393,125
Lease (Note 14a) | 26,591 |  | 33,760 |  | 45,706 |  | 355,971 |  | 462,028
Derivative financial instrument (note 13 I) | 7,664 |  |  |  |  |  |  |  | 7,664
Trade payables (note 13I) | 3,268,951 |  |  |  |  |  |  |  | 3,268,951
Trade payables – Drawee risk (note 13I) | 928,178 |  |  |  |  |  |  |  | 928,178
Dividends and interest on equity (note 14) | 2,521 |  |  |  |  |  |  |  | 2,521

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:

|  |  | 09/30/2019 |  |  |  | 12/31/2018
| Carrying amount |  | Fair value (*) |  | Carrying amount |  | Fair value (*)
Perpetual bonds | 4,170,068 |  | 3,653,440 |  | 3,880,074 |  | 2,850,615
Fixed rate notes | 8,303,513 |  | 7,869,173 |  | 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 |  | 09/30/2019 |  | 12/31/2018
Shareholder's equity (equity) |  | 10,036,069 |  | 10,013,440
Borrowings and Financing (Third-party capital) |  | 29,277,275 |  | 28,827,074
Gross Debit/Shareholder's equity |  | 2.92 |  | 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 |  | Non-current
| 09/30/2019 |  | 12/31/2018 |  | 09/30/2019 |  | 12/31/2018 |  | 09/30/2019 |  | 12/31/2018 |  | 09/30/2019 |  | 12/31/2018
Payables to related parties (note 18 a) | 23,515 |  | 35,499 |  | 85,075 |  | 96,629 |  | 356,083 |  | 308,056 |  |  |  | 14,501
Derivative financial instruments (note 13 I ) | 7,664 |  | - |  |  |  |  |  | 7,664 |  |  |  |  |  |
Dividends and interest on capital (note 13 I) | 2,521 |  | 932,005 |  |  |  |  |  | 2,521 |  | 900,541 |  |  |  |
Advances from customers (1) | 892,485 |  | 137,418 |  | 1,990,878 |  |  |  | 68,892 |  | 64,416 |  |  |  |
Taxes in installments | 19,397 |  | 20,179 |  | 69,323 |  | 73,934 |  | 9,777 |  | 9,756 |  | 2,008 |  | 2,378
Profit sharing - employees | 133,567 |  | 113,219 |  |  |  |  |  | 82,545 |  | 72,555 |  |  |  |
Taxes payable |  |  |  |  | 8,777 |  | 8,631 |  |  |  |  |  | 7,290 |  | 7,145
Provision for consumption and services | 385,886 |  | 334,638 |  |  |  |  |  | 329,074 |  | 260,942 |  |  |  |
Third party materials in our possession | 179 |  | 45,915 |  |  |  |  |  |  |  | 45,721 |  |  |  |
Trade payables - drawee risk (2) | 928,178 |  | 65,766 |  |  |  |  |  | 928,178 |  | 65,766 |  |  |  |
Lease Liabilities (note 14 a) | 26,591 |  |  |  | 435,437 |  |  |  | 11,618 |  |  |  | 26,285 |  |
Other payables | 40,304 |  | 85,984 |  | 43,053 |  | 48,134 |  | 11,752 |  | 17,551 |  |  |  |
| 2,460,287 |  | 1,770,623 |  | 2,632,543 |  | 227,328 |  | 1,808,104 |  | 1,745,304 |  | 35,583 |  | 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. On July 11, 2019, CSN Mineração entered into an amendment to the contract with Glencore and received in advance on August 5, 2019 US$ 250million (R$ 956million) for the additional supply of approximately 11 million tons of iron ore.

(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
| 09/30/2019 |  | First adoption |  | 09/30/2019 |  | First adoption
Leases | 1,491,238 |  | 1,533,556 |  | 42,952 |  | 71,114
Present value adjustment - Leases | (1,029,210) |  | (892,567) |  | (5,049) |  | (10,042)
| 462,028 |  | 640,989 |  | 37,903 |  | 61,072
Classified: |  |  |  |  |  |  |
Current | 26,591 |  | 39,243 |  | 11,618 |  | 21,390
Non-current | 435,437 |  | 601,746 |  | 26,285 |  | 39,682
| 462,028 |  | 640,989 |  | 37,903 |  | 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 September 30, 2019 are shown in the table below.

|  |  | 09/30/2019
| Consolidated |  | Parent Company
Opening balance | 640,989 |  | 61,072
New leases (note 10) | 76,481 |  | 454
Present Value Adjustments - New leases (note 10) | (52,621) |  | (34)
Contract review | (180,408) |  | (12,492)
Write off | (1,374) |  | (1,358)
Payments | (57,469) |  | (11,768)
Interest | 36,430 |  | 2,029
Net balance | 462,028 |  | 37,903

The minimum future payments estimated to leasing agreements include variable payments, essentially fixed when based on minimum performance and contractually fixed rates.

As of September 30, 2019 are as follows:

|  |  |  |  |  |  | Consolidated
| Less than one year |  | Between one and five years |  | Over five years |  | Total
Leases | 75,382 |  | 305,582 |  | 1,110,274 |  | 1,491,238
Present value adjustment - Leases | (48,791) |  | (226,116) |  | (754,303) |  | (1,029,210)
| 26,591 |  | 79,466 |  | 355,971 |  | 462,028

· 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 realized payments to these contracts are recognized as expenses, when incurred.

The Company has lease agreements for the use of ports (TECAR) and railways (FTL) which, even if they establish minimum performance, cannot determine their cash flow since these payments are fully variable and will only be known when they occur. In such cases, payments will be recognized as expenses when incurred

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

|  |  | Consolidated |  |  |  | Parent Company
| Nine months ended |  | Three months ended |  | Nine months ended |  | Three months ended
| 09/30/2019 |  | 09/30/2019 |  | 09/30/2019 |  | 09/30/2019
Contract less than 12 months | 9,974 |  | 2,992 |  |  |  |
Lower Assets value | 1,344 |  | 493 |  | 4,736 |  | 1,549
Variable lease payments | 136,059 |  | 42,440 |  | 4,996 |  | 3,888
| 147,377 |  | 45,925 |  | 9,732 |  | 5,437

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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
| Nine months ended |  | Three months ended
| 09/30/2019 |  | 09/30/2018 |  | 09/30/2019 |  | 09/30/2018
Income tax and social contribution income (expense) |  |  |  |  |  |  |
Current | (1,261,197) |  | (441,145) |  | (278,777) |  | (127,631)
Deferred | 1,620,646 |  | 279,896 |  | (21,977) |  | (110,329)
| 359,449 |  | (161,249) |  | (300,754) |  | (237,960)

|  |  |  |  |  |  | Parent Company
| Nine months ended |  | Three months ended
| 09/30/2019 |  | 09/30/2018 |  | 09/30/2019 |  | 09/30/2018
Income tax and social contribution income (expense) |  |  |  |  |  |  |
Current | 11 |  |  |  |  |  |
Deferred | 1,705,982 |  | 226,895 |  | (1,048) |  | (88,734)
| 1,705,993 |  | 226,895 |  | (1,048) |  | (88,734)

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:

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|  |  |  |  |  |  | Consolidated
| Nine months ended |  | Three months ended
| 09/30/2019 |  | 09/30/2018 |  | 09/30/2019 |  | 09/30/2018
Profit before income tax and social contribution | 751,120 |  | 3,589,595 |  | (569,902) |  | 990,124
Tax rate | 34% |  | 34% |  | 34% |  | 34%
Income tax and social contribution at combined statutory rate | (255,281) |  | (1,220,462) |  | 193,767 |  | (336,642)
Adjustment to reflect the effective rate: |  |  |  |  |  |  |
Equity in results of affiliated companies | 43,445 |  | 35,639 |  | 22,782 |  | 15,906
Profit with differentiated rates or untaxed | (223,079) |  | (83,917) |  | (126,328) |  | (495,666)
Transfer pricing adjustment |  |  | (7,141) |  | 8,574 |  | (1,757)
Tax loss carryforwards without recognizing deferred taxes | (2,310) |  | (17,449) |  | 12,150 |  | (3,183)
Indebtdness limit | (14,685) |  | (31,502) |  | (4,599) |  | (12,439)
Unrecorded deferred taxes on temporary differences | (715) |  | (2,360) |  | (625) |  | 1,659
(Losses)/Reversal for deferred income and social contribution tax credits | 780,004 |  | 1,205,869 |  | (415,916) |  | 638,481
Deferred taxes on foreign profit | (483) |  | (792) |  | (188) |  | (205)
Tax incentives | 26,643 |  | 7,164 |  | 6,953 |  | (4,853)
Deferred tax on exchange variation in shareholders' equity |  |  | (43,667) |  |  |  | (43,667)
Interest on equity | 16,460 |  |  |  | 16,460 |  |
Other permanent deductions (additions) | (10,450) |  | (2,631) |  | (13,784) |  | 4,406
Income tax and social contribution in profit for the period | 359,449 |  | (161,249) |  | (300,754) |  | (237,960)
Effective tax rate | -48% |  | 4% |  | -53% |  | 24%

|  |  |  |  |  |  | Parent company
| Nine months ended |  | Three months ended
| 09/30/2019 |  | 09/30/2018 |  | 09/30/2019 |  | 09/30/2018
Profit before income tax and social contribution | (961,440) |  | 3,126,953 |  | (991,910) |  | 810,269
Tax rate | 34% |  | 34% |  | 34% |  | 34%
Income tax and social contribution at combined statutory rate | 326,890 |  | (1,063,164) |  | 337,249 |  | (275,491)
Adjustment to reflect the effective rate: |  |  |  |  |  |  |
Equity in results of affiliated companies | 743,919 |  | 159,023 |  | 226,220 |  | (393,617)
Indebtdness limit | (14,685) |  | (31,502) |  | (4,599) |  | (12,439)
(Losses)/Reversal for deferred income and social contribution tax credits | 780,004 |  | 1,205,869 |  | (415,916) |  | 638,481
Deferred tax on exchange variation in shareholders' equity |  |  | (43,667) |  |  |  | (43,667)
Interest on equity | (115,474) |  |  |  | (115,474) |  |
Other permanent deductions (additions) | (14,661) |  | 336 |  | (28,528) |  | (2,001)
Income tax and social contribution in profit for the period | 1,705,993 |  | 226,895 |  | (1,048) |  | (88,734)
Effective tax rate | 177% |  | -7% |  | 0% |  | 11%

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 |  | 09/30/2019
Deferred |  |  |  |  |  |  |  |  |
Income tax losses | 959,240 |  |  |  | 705,194 |  | 6,088 |  | 1,670,522
Social contribution tax losses | 367,358 |  |  |  | 253,873 |  | 2,380 |  | 623,611
Temporary diferences | (1,838,935) |  | (3,468) |  | 661,579 |  | (8,468) |  | (1,189,292)
Provision for tax. social security, labor, civil and environmental risks | 267,237 |  |  |  | (64,117) |  |  |  | 203,120
Provision for environmental liabilities | 67,143 |  |  |  | (3,772) |  |  |  | 63,371
Asset impairment losses | 81,341 |  |  |  | (8,824) |  |  |  | 72,517
Inventory impairment losses | 38,760 |  |  |  | (2,924) |  |  |  | 35,836
(Gains)/losses on financial instruments | (3,319) |  |  |  | 3,855 |  |  |  | 536
(Gains)/losses on financial assets measured through profit or loss | 363,095 |  |  |  | 135,966 |  |  |  | 499,061
Actuarial liability (pension and healthcare plan) | 276,032 |  | (31,925) |  | 514 |  |  |  | 244,621
Accrued supplies and services | 95,644 |  |  |  | 13,528 |  |  |  | 109,172
Allowance for doubtful debts | 61,415 |  |  |  | (8,503) |  |  |  | 52,912
Unrealized exchange variation (1) | 1,010,532 |  |  |  | (63,563) |  |  |  | 946,969
Gain upon loss of control in Transnordestina | (92,180) |  |  |  |  |  |  |  | (92,180)
Cash flow hedge accounting | 490,041 |  | 111,216 |  |  |  |  |  | 601,257
Acquisition at fair value of SWT and CBL | (172,114) |  | (52,512) |  | 18,182 |  |  |  | (206,444)
Deferred taxes not computed | (252,940) |  |  |  | (5,112) |  | (8,858) |  | (266,910)
Estimated (losses)/reversals for deferred income tax and social contribution credits. | (3,086,572) |  | (79,291) |  | 780,004 |  | 390 |  | (2,385,469)
Business Combination | (1,030,812) |  |  |  | 5,609 |  |  |  | (1,025,203)
Others | 47,762 |  | 49,044 |  | (139,264) |  |  |  | (42,458)
Total | (512,337) |  | (3,468) |  | 1,620,646 |  |  |  | 1,104,841
Total Deferred Assets | 89,394 |  |  |  |  |  |  |  | 1,729,424
Total Deferred Liabilities | (601,731) |  |  |  |  |  |  |  | (624,583)
Total Deferred | (512,337) |  |  |  |  |  |  |  | 1,104,841

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

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|  |  |  |  |  |  | Parent Company
| Opening balance |  | Movement |  | Closing balance
| 12/31/2018 |  | Shareholders' Equity |  | P&L |  | Others |  | 09/30/2019
Deferred |  |  |  |  |  |  |  |  |
Income tax losses | 834,141 |  |  |  | 701,152 |  | (287) |  | 1,535,006
Social contribution tax losses | 322,283 |  |  |  | 252,415 |  | (103) |  | 574,595
Temporary diferences | (1,173,858) |  |  |  | 752,415 |  | 390 |  | (421,053)
Provision for tax. social security, labor, civil and environmental risks | 210,382 |  |  |  | (65,902) |  |  |  | 144,480
Provision for environmental liabilities | 64,906 |  |  |  | (5,330) |  |  |  | 59,576
Asset impairment losses | 57,444 |  |  |  | (8,515) |  |  |  | 48,929
Inventory impairment losses | 15,326 |  |  |  | 134 |  |  |  | 15,460
(Gains)/losses on financial instruments | (3,319) |  |  |  | 3,855 |  |  |  | 536
(Gains)/losses on financial assets measured through profit or loss | 363,095 |  |  |  | 135,966 |  |  |  | 499,061
Actuarial liability (pension and healthcare plan) | 279,132 |  | (31,925) |  | 514 |  |  |  | 247,721
Accrued supplies and services | 84,509 |  |  |  | 13,974 |  |  |  | 98,483
Allowance for doubtful debts | 45,565 |  |  |  | (7,625) |  |  |  | 37,940
Unrealized exchange variation (1) | 1,014,309 |  |  |  | (59,997) |  |  |  | 954,312
Gain upon loss of control in Transnordestina | (92,180) |  |  |  |  |  |  |  | (92,180)
Cash flow hedge accounting | 490,041 |  | 111,216 |  |  |  |  |  | 601,257
Estimated (losses)/reversals for deferred income tax and social contribution credits. | (3,086,572) |  | (79,291) |  | 780,004 |  | 390 |  | (2,385,469)
Business Combination | (699,383) |  |  |  |  |  |  |  | (699,383)
Deferred income tax and social contribution over CGPAR Business combination. | (22,609) |  |  |  |  |  |  |  | (22,609)
Others | 105,496 |  |  |  | (34,663) |  |  |  | 70,833
Total | (17,434) |  |  |  | 1,705,982 |  |  |  | 1,688,548
Total Deferred Assets |  |  |  |  |  |  |  |  | 2,512,459
Total Deferred Liabilities | (17,434) |  |  |  |  |  |  |  | (823,911)
Total Deferred | (17,434) |  |  |  |  |  |  |  | 1,688,548

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

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$1,035,479. 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$327,759.

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

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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
| 09/30/2019 |  | 12/31/2018 |  | 09/30/2019 |  | 12/31/2018
Income tax and social contribution |  |  |  |  |  |  |
Actuarial gains on defined benefit pension plan | 144,864 |  | 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 | 601,257 |  | 490,041 |  | 601,257 |  | 490,041
Estimated losses for deferred income and social contribution tax credits - cash flow hedge | (601,257) |  | (490,041) |  | (601,257) |  | (490,041)
| (328,609) |  | (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.

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.

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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).

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 September 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, as of September 30, 2019.

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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
|  | 09/30/2019 |  | 12/31/2018 |  | 09/30/2019 |  | 12/31/2018 |  | 09/30/2019 |  | 12/31/2018 |  | 09/30/2019 |  | 12/31/2018
Tax |  | 120,415 |  | 118,490 |  | 59,877 |  | 46,321 |  | 49,809 |  | 48,789 |  | 39,391 |  | 27,493
Social security |  | 18,516 |  | 70,084 |  |  |  | 50,898 |  | 17,942 |  | 67,978 |  |  |  | 50,898
Labor |  | 302,834 |  | 362,228 |  | 225,850 |  | 214,625 |  | 216,156 |  | 277,590 |  | 166,557 |  | 162,870
Civil |  | 175,415 |  | 210,264 |  | 49,846 |  | 22,024 |  | 141,752 |  | 180,546 |  | 38,308 |  | 11,871
Environmental |  | 42,177 |  | 31,390 |  | 3,651 |  | 1,900 |  | 35,659 |  | 28,030 |  | 2,161 |  | 1,900
Deposit of a guarantee |  |  |  |  |  | 12,460 |  | 12,182 |  |  |  |  |  |  |  | 563
|  | 659,357 |  | 792,456 |  | 351,684 |  | 347,950 |  | 461,318 |  | 602,933 |  | 246,417 |  | 255,595

Classification |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Current |  | 105,901 |  | 106,503 |  |  |  |  |  | 60,747 |  | 64,856 |  |  |  |
Non-current |  | 553,456 |  | 685,953 |  | 351,684 |  | 347,950 |  | 400,571 |  | 538,077 |  | 246,417 |  | 255,595
|  | 659,357 |  | 792,456 |  | 351,684 |  | 347,950 |  | 461,318 |  | 602,933 |  | 246,417 |  | 255,595

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

|  |  |  |  |  |  |  |  |  | Consolidated
|  |  |  |  |  |  |  |  |  | Current + Non-current
Nature |  | 12/31/2018 |  | Additions |  | Accrued charges |  | Net utilization of reversal |  | 09/30/2019
Tax |  | 118,490 |  | 16,892 |  | 3,221 |  | (18,188) |  | 120,415
Social security |  | 70,084 |  | 2,550 |  | 481 |  | (54,599) |  | 18,516
Labor |  | 362,228 |  | 25,742 |  | 45,286 |  | (130,422) |  | 302,834
Civil |  | 210,264 |  | 34,929 |  | 13,810 |  | (83,588) |  | 175,415
Environmental |  | 31,390 |  | 6,996 |  | 4,567 |  | (776) |  | 42,177
|  | 792,456 |  | 87,109 |  | 67,365 |  | (287,573) |  | 659,357

|  |  |  |  |  |  |  |  |  | Parent Company
|  |  |  |  |  |  |  |  |  | Current + Non-current
Nature |  | 12/31/2018 |  | Additions |  | Accrued charges |  | Net utilization of reversal |  | 09/30/2019
Tax |  | 48,789 |  | 15,528 |  | 1,064 |  | (15,572) |  | 49,809
Social security |  | 67,978 |  | 1,976 |  | 481 |  | (52,493) |  | 17,942
Labor |  | 277,590 |  | 14,589 |  | 27,726 |  | (103,749) |  | 216,156
Civil |  | 180,546 |  | 32,004 |  | 7,373 |  | (78,171) |  | 141,752
Environmental |  | 28,030 |  | 4,560 |  | 3,845 |  | (776) |  | 35,659
|  | 602,933 |  | 68,657 |  | 40,489 |  | (250,761) |  | 461,318

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 is 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 September 30, 2019 and December 31, 2018.

|  | Consolidated
|  | 09/30/2019 |  | 12/31/2018
Assessment Notice and imposition of fine (AIIM) - Income tax and social contribution - Capital gain on sale of Namisa's shares |  | 12,269,908 |  | 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. |  | 3,830,452 |  | 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 |  | 2,227,993 |  | 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 |  | 1,944,471 |  | 1,891,149
Tax foreclosures - ICMS - Electricity credits |  | 1,010,866 |  | 974,479
Offset of taxes that were not approved by the Federal Revenue Service - IRPJ/CSLL, PIS/COFINS and IPI |  | 1,715,213 |  | 1,481,382
Disallowance of the ICMS credits - Transfer of iron ore |  | 548,968 |  | 529,607
ICMS - Refers to the transfer of imported raw material at an amount lower than the price disclosed in the import documentation |  | 306,663 |  | 294,527
Disallowance of the tax loss and negative basis of social contribution arising from the adjustments in the SAPLI |  | 532,823 |  | 516,583
Assessment Notice- IRRF- Capital Gain of CFM vendors located abroad |  | 251,998 |  | 243,007
CFEM – difference of understanding between CSN and DNPM on the calculation basis |  | 324,455 |  | 311,582
Assessment Notice- ICMS- questions about sales for incentive area |  | 1,003,404 |  | 976,438
Other tax lawsuits (federal, state, and municipal) |  | 3,663,229 |  | 3,625,167
Social security lawsuits |  | 306,092 |  | 287,823
Enforcement action applied by Brazilian antitrust authorities (CADE) |  |  |  | 101,683
Other civil lawsuits |  | 1,131,822 |  | 922,171
Labor and social security lawsuits |  | 1,540,288 |  | 1,537,078
Tax foreclosures – Fine – Volta Redonda IV |  | 83,061 |  | 75,530
Annulment action – INEA fine – Paraíba do Sul river |  | 17,035 |  |
Other environmental lawsuits |  | 196,020 |  | 144,235
|  | 32,904,761 |  | 31,612,488

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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.

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 September 30, 2019.

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

|  |  | Consolidated |  |  |  | Parent Company
| 09/30/2019 |  | 12/31/2018 |  | 09/30/2019 |  | 12/31/2018
Environmental liabilities | 186,051 |  | 198,386 |  | 175,225 |  | 191,216
Asset retirement obligations | 103,592 |  | 83,380 |  | 783 |  | 668
| 289,643 |  | 281,766 |  | 176,008 |  | 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
|  | 09/30/2019 |  | 12/31/2018 |  | 09/30/2019 |  | 12/31/2018 |  | 09/30/2019 |  | 12/31/2018
Assets |  |  |  |  |  |  |  |  |  |  |  |
Trade receivables (note 6) |  | 184,139 |  | 93,317 |  |  |  |  |  | 184,139 |  | 93,317
Dividends receivable (note 8) |  | 46,171 |  | 46,171 |  |  |  |  |  | 46,171 |  | 46,171
Actuarial asset (note 8) |  |  |  |  |  | 81,172 |  | 99,894 |  | 81,172 |  | 99,894
Financial investments/ investments |  | 97,814 |  | 92,332 |  |  |  |  |  | 97,814 |  | 92,332
Loans (note 8) |  | 2,833 |  | 2,675 |  | 833,194 |  | 706,605 |  | 836,027 |  | 709,280
Other receivables (note 8) |  | 2,205 |  | 3,649 |  | 275,066 |  | 218,840 |  | 277,271 |  | 222,489
|  | 333,162 |  | 238,144 |  | 1,189,432 |  | 1,025,339 |  | 1,522,594 |  | 1,263,483
Liabilities |  |  |  |  |  |  |  |  |  |  |  |
Other payables (Note 14) |  |  |  |  |  |  |  |  |  |  |  |
Accounts payable |  | 22,759 |  | 29,286 |  | 85,075 |  | 96,629 |  | 107,834 |  | 125,915
Provision for consumption and services |  | 756 |  | 6,213 |  |  |  |  |  | 756 |  | 6,213
Trade payables |  | 292,319 |  | 135,801 |  |  |  |  |  | 292,319 |  | 135,801
Actuarial liabilities |  |  |  |  |  | 7,982 |  | 7,982 |  | 7,982 |  | 7,982
|  | 315,834 |  | 171,300 |  | 93,057 |  | 104,611 |  | 408,891 |  | 275,911

|  | 09/30/2019 |  | 09/30/2018 |  |  |  |  |  |  |  |
P&L |  |  |  |  |  |  |  |  |  |  |  |
Revenues |  |  |  |  |  |  |  |  |  |  |  |
Sales |  | 854,813 |  | 938,286 |  |  |  |  |  |  |  |
Interest (note 24) |  | 60,344 |  | 47,954 |  |  |  |  |  |  |  |
Expenses |  |  |  |  |  |  |  |  |  |  |  |
Purchases |  | (1,478,875) |  | (965,726) |  |  |  |  |  |  |  |
Foreing exchange and monetary variations, net |  | (6,661) |  | 16,580 |  |  |  |  |  |  |  |
|  | (570,379) |  | 37,094 |  |  |  |  |  |  |  |

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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 |  | 98,117 |  | 85,075 |  | 183,192 |  |  |  | (816,778) |  |  |  |  |  | (816,778)
CBSI - Companhia Brasileira de Serviços e Infraestrutura |  | 5 |  |  |  | 5 |  | 76,800 |  |  |  | 76,800 |  | 20 |  | (180,417) |  |  |  |  |  | (180,397)
Transnordestina Logística S.A (1) |  | 499 |  | 1,097,263 |  | 1,097,762 |  |  |  |  |  |  |  | 262 |  | (10,990) |  | 45,032 |  |  |  | 34,304
|  | 46,675 |  | 1,097,263 |  | 1,143,938 |  | 177,076 |  | 85,075 |  | 262,151 |  | 282 |  | (1,008,185) |  | 45,032 |  |  |  | (962,871)
Other related parties |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
CBS Previdência |  |  |  | 81,172 |  | 81,172 |  |  |  | 7,982 |  | 7,982 |  |  |  |  |  |  |  |  |  |
Banco Fibra (2) |  | 97,812 |  |  |  | 97,812 |  |  |  |  |  |  |  |  |  |  |  | 15,124 |  | (6,661) |  | 8,463
Usiminas |  | 1,444 |  |  |  | 1,444 |  | 123,891 |  |  |  | 123,891 |  |  |  | (385,400) |  |  |  |  |  | (385,400)
Panatlântica (3) |  | 140,400 |  |  |  | 140,400 |  | 13,803 |  |  |  | 13,803 |  | 786,846 |  | (75,618) |  |  |  |  |  | 711,228
Vicunha Ind de Implementos |  |  |  |  |  |  |  |  |  |  |  |  |  | 146 |  | (238) |  |  |  |  |  | (92)
Outras related parties |  | 1,982 |  |  |  | 1,982 |  | 1,064 |  |  |  | 1,064 |  | 2,469 |  | (9,434) |  |  |  |  |  | (6,965)
|  | 241,638 |  | 81,172 |  | 322,810 |  | 138,758 |  | 7,982 |  | 146,740 |  | 789,461 |  | (470,690) |  | 15,124 |  | (6,661) |  | 327,234
Associates |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Arvedi Metalfer do Brasil S.A. |  | 44,849 |  | 10,997 |  | 55,846 |  |  |  |  |  |  |  | 65,070 |  |  |  | 188 |  |  |  | 65,258
Total at 09/30/2019 |  | 333,162 |  | 1,189,432 |  | 1,522,594 |  | 315,834 |  | 93,057 |  | 408,891 |  | 854,813 |  | (1,478,875) |  | 60,344 |  | (6,661) |  | (570,379)
Total em 12/31/2018 |  | 238,144 |  | 1,025,339 |  | 1,263,483 |  | 171,300 |  | 104,611 |  | 275,911 |  |  |  |  |  |  |  |  |  |
Total at 09/30/2018 |  |  |  |  |  |  |  |  |  |  |  |  |  | 938,286 |  | (965,726) |  | 47,954 |  | 16,580 |  | 37,094

1. Transnordestina Logística S.A: Assets: Refers mainly to loan agreements in R$: average rate interest from 126,98% of the CDI. As of September 30, 2019, the loans amounted to R$833,195 (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
|  | 09/30/2019 |  | 12/31/2018 |  | 09/30/2019 |  | 12/31/2018 |  | 09/30/2019 |  | 12/31/2018
Assets |  |  |  |  |  |  |  |  |  |  |  |
Trade receivables (1) (note 6) |  | 1,019,196 |  | 906,865 |  |  |  |  |  | 1,019,196 |  | 906,865
Dividends receivable (Note 8) |  | 24,154 |  | 259,186 |  |  |  |  |  | 24,154 |  | 259,186
Actuarial asset (note 8) |  |  |  |  |  | 70,717 |  | 85,415 |  | 70,717 |  | 85,415
Loans (note 8) |  | 24,452 |  | 22,807 |  | 799,155 |  | 588,285 |  | 823,607 |  | 611,092
Financial investments / Investments (2) |  | 105,391 |  | 99,109 |  | 76,779 |  | 103,640 |  | 182,170 |  | 202,749
Other receivables (3) (note 8) |  | 16,704 |  | 15,395 |  | 528,458 |  | 458,177 |  | 545,162 |  | 473,572
|  | 1,189,897 |  | 1,303,362 |  | 1,475,109 |  | 1,235,517 |  | 2,665,006 |  | 2,538,879
Liabilities |  |  |  |  |  |  |  |  |  |  |  |
Borrowings and financing |  |  |  |  |  |  |  |  |  |  |  |
Prepayment (note 12) |  | 647,655 |  | 1,363,140 |  | 5,810,026 |  | 4,250,264 |  | 6,457,681 |  | 5,613,404
Intercompany Bonds (nota 12) |  | 10,562 |  | 2,395 |  | 387,289 |  | 360,356 |  | 397,851 |  | 362,751
Intercompany Loans (note 12) |  | 1,524,816 |  | 1,704,888 |  | 2,146,634 |  |  |  | 3,671,450 |  | 1,704,888
|  | 2,183,033 |  | 3,070,423 |  | 8,343,949 |  | 4,610,620 |  | 10,526,982 |  | 7,681,043
Other payables (Note 14) |  |  |  |  |  |  |  |  |  |  |  |
Accounts payable |  | 8,437 |  | 8,060 |  |  |  | 14,501 |  | 8,437 |  | 22,561
Provision for consumption and services |  | 347,646 |  | 299,996 |  |  |  |  |  | 347,646 |  | 299,996
Trade payables |  | 700,444 |  | 344,076 |  |  |  |  |  | 700,444 |  | 344,076
Actuarial liabilities |  |  |  |  |  | 7,982 |  | 7,982 |  | 7,982 |  | 7,982
|  | 1,056,527 |  | 652,132 |  | 7,982 |  | 22,483 |  | 1,064,509 |  | 674,615
|  | 09/30/2019 |  | 09/30/2018 |  |  |  |  |  |  |  |
P&L |  |  |  |  |  |  |  |  |  |  |  |
Revenues |  |  |  |  |  |  |  |  |  |  |  |
Sales/Others |  | 2,298,339 |  | 2,444,553 |  |  |  |  |  |  |  |
Interest (note 24) |  |  |  | 42,558 |  |  |  |  |  |  |  |
Exclusive funds (note 24) |  | 1,332 |  | 741 |  |  |  |  |  |  |  |
Other operational revenues (expenses) |  |  |  | 101,324 |  |  |  |  |  |  |  |
Expenses |  |  |  |  |  |  |  |  |  |  |  |
Purchases |  | (1,987,465) |  | (1,499,607) |  |  |  |  |  |  |  |
Interest (note 24) |  | (182,175) |  | (308,309) |  |  |  |  |  |  |  |
Foreing exchange and monetary variations, net |  | (774,165) |  | (1,412,964) |  |  |  |  |  |  |  |
|  | (644,134) |  | (631,704) |  |  |  |  |  |  |  |

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 |  | Sales/Others |  | Purchases |  | Other operational income/expenses |  | Financial income/expenses, net |  | Exchange rate variations, net |  | Total
Subsidiaries |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Companhia Metalúrgica Prada (1) |  | 275,818 |  | 121,336 |  | 397,154 |  | 10,245 |  |  |  | 10,245 |  | 558,438 |  | (58,905) |  |  |  |  |  |  |  | 499,533
Estanho de Rondônia S.A. |  | 23,215 |  | 11,495 |  | 34,710 |  | 1,196 |  |  |  | 1,196 |  |  |  | (30,613) |  |  |  | 1,457 |  |  |  | (29,156)
Sepetiba Tecon S.A. |  | 12,252 |  | 106,700 |  | 118,952 |  | 30,971 |  |  |  | 30,971 |  |  |  | (47,186) |  |  |  | 82 |  |  |  | (47,104)
Minérios Nacional S.A. |  | 18 |  |  |  | 18 |  | 25 |  |  |  | 25 |  | 52 |  | (41) |  |  |  |  |  |  |  | 11
CSN Mineração S.A. (2) |  | 90,863 |  |  |  | 90,863 |  | 364,758 |  |  |  | 364,758 |  | 73,788 |  | (827,416) |  |  |  |  |  |  |  | (753,628)
CSN Energia S.A. |  |  |  |  |  |  |  | 70,074 |  |  |  | 70,074 |  |  |  | (135,370) |  |  |  |  |  |  |  | (135,370)
Ferrovia Transnordestina Logística S.A. |  |  |  | 83,155 |  | 83,155 |  |  |  |  |  |  |  | 1,308 |  | (344) |  |  |  | 1,022 |  | (72) |  | 1,914
Companhia Siderúrgica Nacional, LLC (3) |  | 289,025 |  |  |  | 289,025 |  | 352,396 |  |  |  | 352,396 |  | 577,562 |  | (28,750) |  |  |  |  |  | (24,440) |  | 524,372
CSN Resources S.A. (4) |  |  |  |  |  |  |  | 638,916 |  | 5,076,761 |  | 5,715,677 |  |  |  |  |  |  |  | (206,182) |  | (404,077) |  | (610,259)
CSN Steel Corp |  |  |  |  |  |  |  | 15,164 |  | 928,407 |  | 943,571 |  |  |  |  |  |  |  | (26,546) |  | (17,232) |  | (43,778)
Lusosider Aços Planos, S.A. |  | 194,665 |  |  |  | 194,665 |  | 1 |  |  |  | 1 |  | 297,768 |  |  |  |  |  |  |  |  |  | 297,768
CSN Islands XI Corp. (5) |  |  |  |  |  |  |  | 26,724 |  | 1,805,560 |  | 1,832,284 |  |  |  |  |  |  |  |  |  | (114,849) |  | (114,849)
CSN Islands XII Corp. (6) |  |  |  |  |  |  |  | 1,496,282 |  | 250,224 |  | 1,746,506 |  |  |  |  |  |  |  |  |  | (195,021) |  | (195,021)
Companhia Florestal do Brasil |  | 1,103 |  | 50 |  | 1,153 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
CSN Steel Holdings 1, S.L.U. |  |  |  |  |  |  |  | 1,486 |  | 70,749 |  | 72,235 |  |  |  |  |  |  |  | (1,486) |  | (2,925) |  | (4,411)
CSN Productos Sider. S.L. |  |  |  |  |  |  |  | 4,459 |  | 212,248 |  | 216,707 |  |  |  |  |  |  |  | (4,459) |  | (8,888) |  | (13,347)
|  | 886,959 |  | 322,736 |  | 1,209,695 |  | 3,012,697 |  | 8,343,949 |  | 11,356,646 |  | 1,508,916 |  | (1,128,625) |  |  |  | (236,112) |  | (767,504) |  | (623,325)
Joint-venture and Joint-operation |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
MRS Logística S.A. |  | 23,091 |  |  |  | 23,091 |  | 19,892 |  |  |  | 19,892 |  |  |  | (253,434) |  |  |  |  |  |  |  | (253,434)
CBSI - Companhia Brasileira de Serviços e Infraestrutura |  | 5 |  |  |  | 5 |  | 69,049 |  |  |  | 69,049 |  | 20 |  | (140,620) |  |  |  |  |  |  |  | (140,600)
Transnordestina Logística S.A. (7) |  | 1 |  | 1,004,877 |  | 1,004,878 |  |  |  |  |  |  |  |  |  |  |  |  |  | 39,584 |  |  |  | 39,584
|  | 23,097 |  | 1,004,877 |  | 1,027,974 |  | 88,941 |  |  |  | 88,941 |  | 20 |  | (394,054) |  |  |  | 39,584 |  |  |  | (354,450)
Other related parties |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
CBS Previdência |  |  |  | 70,717 |  | 70,717 |  |  |  | 7,982 |  | 7,982 |  |  |  |  |  |  |  |  |  |  |  |
Banco Fibra |  | 97,075 |  |  |  | 97,075 |  |  |  |  |  |  |  |  |  |  |  |  |  | 14,166 |  | (6,661) |  | 7,505
Usiminas |  | 185 |  |  |  | 185 |  | 123,891 |  |  |  | 123,891 |  |  |  | (385,400) |  |  |  |  |  |  |  | (385,400)
Panatlântica (8) |  | 140,400 |  |  |  | 140,400 |  | 13,803 |  |  |  | 13,803 |  | 786,789 |  | (75,618) |  |  |  |  |  |  |  | 711,171
Vicunha Ind. de Implementos |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (238) |  |  |  |  |  |  |  | (238)
Other related parties |  | 1,982 |  |  |  | 1,982 |  | 228 |  |  |  | 228 |  | 2,614 |  | (3,530) |  |  |  |  |  |  |  | (916)
|  | 239,642 |  | 70,717 |  | 310,359 |  | 137,922 |  | 7,982 |  | 145,904 |  | 789,403 |  | (464,786) |  |  |  | 14,166 |  | (6,661) |  | 332,122
Associates |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Arvedi Metalfer do Brasil S.A. |  | 31,882 |  |  |  | 31,882 |  |  |  |  |  |  |  |  |  |  |  |  |  | 188 |  |  |  | 188
Exclusive funds |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Diplic, Caixa Vertice, VR1, BB Steel (9) |  | 8,317 |  | 76,779 |  | 85,096 |  |  |  |  |  |  |  |  |  |  |  |  |  | 1,331 |  |  |  | 1,331
Total at 09/30/2019 |  | 1,189,897 |  | 1,475,109 |  | 2,665,006 |  | 3,239,560 |  | 8,351,931 |  | 11,591,491 |  | 2,298,339 |  | (1,987,465) |  |  |  | (180,843) |  | (774,165) |  | (644,134)
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 09/30/2018 |  |  |  |  |  |  |  |  |  |  |  |  |  | 2,444,553 |  | (1,499,607) |  | 101,324 |  | (265,010) |  | (1,412,964) |  | (631,704)

1. Companhia Metalúrgica Prada: Refers mainly to receivables in the amount of R$275,818 (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$90,863 (119,952 as of December 31,2018).

3. Companhia Siderurgica Nacional, LLC: Receivables of R$289,025 (R$357,257 as of December 31, 2018), related to sale of steel for resale. Current liabilities refers mainly a commission expenses and logistics in the operations of sales steel to resale in the amount of R$ 352,396 (R$298,866 as of December 31,2018).

4. CSN Resources SA: Prepayment contracts in dollar and Fixed Rate Notes. As of September 30, 2019, the loans amounted to R$5,715,677 (R$4,961,357 as of December 31, 2018).

5. CSN Islands XI Corp.: Intercompany contracts in US dollars. As of September 30, 2019, the loans amounted to R$1,832,284 (R$179,677 as of December 31, 2018).

6. CSN Islands XII Corp.: Refers mainly to Intercompany contracts in dollar. As of September 30, 2019, the loans amounted to R$1,746,506 (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$729,813 (R$588,285 as of December 31,2018) and advance for future capital increase in the amount of R$275,066 (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$140,400 (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$8,317 (R$6,989 as of December 31,2018). Noncurrent assets: Refers to Usiminas S.A. shares in the amount of R$76,779 (R$103,640 as of December 31,2018). The funds VR1 and Diplic II are managed by Taquari Asset.

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19.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 September 30, 2019.

|  | 09/30/2019 |  | 09/30/2018
|  | Statement of income
Short-term benefits for employees and officers |  | 30,883 |  | 28,537
Post-employment benefits |  | 81 |  | 79
|  | 30,964 |  | 28,616

18.c) Garantees

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
|  |  |  |  | 09/30/2019 |  | 12/31/2018 |  | 09/30/2019 |  | 12/31/2018 |  | 09/30/2019 |  | 12/31/2018 |  | 09/30/2019 |  | 12/31/2018
Transnordestina Logísitca | R$ |  | Up to 09/19/2056 and indefinite |  | 2,428,194 |  | 2,108,917 |  | 36,244 |  | 35,336 |  | 8,499 |  | 8,231 |  | 2,472,937 |  | 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 |  |  |  |  |  | 457 |  | 333 |  | 2,783 |  | 11,942 |  | 3,240 |  | 12,275
CSN Energia | R$ |  | Up to 11/26/2023 and indefinite |  |  |  |  |  | 6,238 |  | 2,829 |  | 1,920 |  | 1,920 |  | 8,158 |  | 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 |  | 42,939 |  | 38,498 |  | 13,202 |  | 22,093 |  | 3,928,586 |  | 3,649,736
CSN Islands XI | US$ |  | 9/21/2019 |  | - |  | 547,094 |  |  |  |  |  |  |  |  |  | - |  | 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 |  | 1,958,603 |  | 1,402,906 |  |  |  |  |  |  |  |  |  | 1,958,603 |  | 1,402,906
Total in US$ |  |  |  |  | 2,958,603 |  | 2,950,000 |  |  |  |  |  |  |  |  |  | 2,958,603 |  | 2,950,000
CSN Steel S.L. | EUR |  | 1/31/2020 |  | 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$ |  |  |  |  | 12,656,951 |  | 11,976,657 |  |  |  |  |  |  |  |  |  | 12,656,951 |  | 11,976,657
|  |  |  |  | 16,529,396 |  | 15,565,802 |  | 42,939 |  | 38,498 |  | 13,202 |  | 22,093 |  | 16,585,537 |  | 15,626,393

19. SHAREHOLDERS’ EQUITY

19.a) Paid-in capital

Fully subscribed and paid-in capital as of September 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.

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19.b) Authorized capital

The Company’s bylaws in effect as of September 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 September 30, 2019, the Company’s shareholder structure was as follows:

|  |  |  |  |  | 09/30/2019 |  |  |  |  |  | 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) |  | 264,016,103 |  | 19.03% |  | 19.13% |  | 284,152,319 |  | 20.48% |  | 20.59%
Other shareholders |  | 378,382,687 |  | 27.27% |  | 27.41% |  | 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.

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
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 |  | Not applicable |  | Not applicable |  |  |  |  |  | 22,981,500 | (1) | 7,409,500

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

1. 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 September 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 09/30/2019 (*)
7,409,500 |  | R$ 58,264 |  | R$ 4.48 |  | R$ 10.07 |  | R$ 7.86 |  | R$ 98,028

(*) The average quotation as of September 30, 2019 in the amount R$ 13.23 per share was used.

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19.f) Policy on investments and payment of interest on equity 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.

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
| Nine months ended |  | Three months ended
| 09/30/2019 |  | 09/30/2018 |  | 09/30/2019 |  | 09/30/2018
| Common shares |  | Common shares
(Loss) profit for the year | 744,553 |  | 3,353,848 |  | (992,958) |  | 721,535
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 | 0.53949 |  | 2.45474 |  | (0.71948) |  | 0.52463

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 adjustment, according Notice to Shareholders disclosed on May 27, 2019.

The Board of Directors' Meeting held on September 18, 2019 approved the distribution of interim dividends based on the profits earned on the balance sheet as of June 30, 2019 in the amount of R$ 412,659, corresponding to R$ 0.299003394462 per share. Dividends were paid as of September 30, 2019, without monetary adjustment, according Notice to Shareholders disclosed on the date of approval.

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

In 2019, the distributions of dividends and interest on equity were approved as follows:

|  | Parent Company |  | Consolidated
Dividend |  | 1,310,991 |  | 1,773,093
Interest on equity |  |  |  | 48,413
|  | 1,310,991 |  | 1,821,506

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In 2019, dividends and interest on equity were paid as follows:

|  | Dividend |  | Interest on equity |  | TOTAL
Controlling shareholders |  | 1,310,679 |  |  |  | 1,310,679
Non-controlling shareholders (*) |  | 462,102 |  | 48,413 |  | 510,515
|  | 1,772,781 |  | 48,413 |  | 1,821,194

(*) Refers to dividends and interest on equity distributed to minority shareholders of CSN Mineração.

21. NET SALES REVENUE

Net sales revenue is comprised as follows:

|  |  |  |  |  |  |  | Consolidated
|  | Nine months ended |  | Three months ended
|  | 09/30/2019 |  | 09/30/2018 |  | 09/30/2019 |  | 09/30/2018
Gross revenue |  |  |  |  |  |  |  |
Domestic market |  | 10,620,045 |  | 10,916,113 |  | 3,486,516 |  | 4,117,311
Foreign market |  | 10,857,844 |  | 8,692,589 |  | 3,367,342 |  | 3,028,884
|  | 21,477,889 |  | 19,608,702 |  | 6,853,858 |  | 7,146,195
Deductions |  |  |  |  |  |  |  |
Sales returns and discounts |  | (212,162) |  | (172,123) |  | (77,153) |  | (53,893)
Taxes on sales |  | (2,353,126) |  | (2,518,626) |  | (770,312) |  | (927,313)
|  | (2,565,288) |  | (2,690,749) |  | (847,465) |  | (981,206)
Net revenue |  | 18,912,601 |  | 16,917,953 |  | 6,006,393 |  | 6,164,989

|  | Parent Company
|  | Nine months ended |  | Three months ended
|  | 09/30/2019 |  | 09/30/2018 |  | 09/30/2019 |  | 09/30/2018
Gross revenue |  |  |  |  |  |  |  |
Domestic market |  | 10,165,242 |  | 10,382,252 |  | 3,312,997 |  | 3,895,896
Foreign market |  | 894,635 |  | 1,504,102 |  | 144,722 |  | 378,993
|  | 11,059,877 |  | 11,886,354 |  | 3,457,719 |  | 4,274,889
Deductions |  |  |  |  |  |  |  |
Sales returns and discounts |  | (203,378) |  | (146,394) |  | (73,675) |  | (45,702)
Taxes on sales |  | (2,177,268) |  | (2,317,004) |  | (708,845) |  | (857,634)
|  | (2,380,646) |  | (2,463,398) |  | (782,520) |  | (903,336)
Net revenue |  | 8,679,231 |  | 9,422,956 |  | 2,675,199 |  | 3,371,553

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22. EXPENSES BY NATURE

|  |  |  |  |  |  |  | Consolidated
|  | Nine months ended |  | Three months ended
|  | 09/30/2019 |  | 09/30/2018 |  | 09/30/2019 |  | 09/30/2018
Raw materials and inputs |  | (5,519,570) |  | (5,276,706) |  | (1,813,582) |  | (1,872,602)
Labor cost |  | (2,066,609) |  | (2,025,346) |  | (735,982) |  | (700,028)
Supplies |  | (1,491,035) |  | (1,300,366) |  | (530,095) |  | (470,126)
Maintenance cost (services and materials) |  | (1,001,429) |  | (932,177) |  | (314,940) |  | (336,171)
Outsourcing services |  | (1,759,499) |  | (1,712,794) |  | (598,184) |  | (543,379)
Freight |  | (1,143,585) |  | (1,177,716) |  | (356,084) |  | (527,622)
Depreciation, amortization and depletion |  | (989,931) |  | (890,316) |  | (352,120) |  | (273,530)
Others |  | (675,435) |  | (620,119) |  | (236,703) |  | (250,161)
|  | (14,647,093) |  | (13,935,540) |  | (4,937,690) |  | (4,973,619)
Classified as: |  |  |  |  |  |  |  |
Cost of sales |  | (12,834,121) |  | (12,107,201) |  | (4,370,357) |  | (4,298,540)
Selling expenses |  | (1,429,593) |  | (1,497,306) |  | (429,836) |  | (569,294)
General and administrative expenses |  | (383,379) |  | (331,033) |  | (137,497) |  | (105,785)
|  | (14,647,093) |  | (13,935,540) |  | (4,937,690) |  | (4,973,619)

|  | Parent Company
|  | Nine months ended |  | Three months ended
|  | 09/30/2019 |  | 09/30/2018 |  | 09/30/2019 |  | 09/30/2018
Raw materials and inputs |  | (5,182,819) |  | (4,241,551) |  | (1,625,282) |  | (1,561,255)
Labor cost |  | (992,909) |  | (990,083) |  | (385,696) |  | (357,102)
Supplies |  | (1,069,087) |  | (944,901) |  | (393,973) |  | (356,717)
Maintenance cost (services and materials) |  | (481,337) |  | (497,714) |  | (150,584) |  | (178,118)
Outsourcing services |  | (556,623) |  | (714,826) |  | (120,265) |  | (227,297)
Freight |  | (272,380) |  | (301,697) |  | (120,350) |  | (132,362)
Depreciation, amortization and depletion |  | (469,972) |  | (441,529) |  | (159,313) |  | (147,551)
Others |  | (25,920) |  | (35,554) |  | (9,259) |  | (24,555)
|  | (9,051,047) |  | (8,167,855) |  | (2,964,722) |  | (2,984,957)
Classified as: |  |  |  |  |  |  |  |
Cost of sales |  | (8,473,275) |  | (7,518,935) |  | (2,765,033) |  | (2,773,360)
Selling expenses |  | (388,268) |  | (453,968) |  | (129,121) |  | (148,558)
General and administrative expenses |  | (189,504) |  | (194,952) |  | (70,568) |  | (63,039)
|  | (9,051,047) |  | (8,167,855) |  | (2,964,722) |  | (2,984,957)

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

|  | Consolidated
|  | Nine months ended |  | Three months ended
|  | 09/30/2019 |  | 09/30/2018 |  | 09/30/2019 |  | 09/30/2018
Production cost |  | 965,331 |  | 870,360 |  | 343,661 |  | 267,090
Selling expenses |  | 5,548 |  | 4,813 |  | 2,133 |  | 1,557
General and administrative expenses |  | 19,052 |  | 15,143 |  | 6,326 |  | 4,883
|  | 989,931 |  | 890,316 |  | 352,120 |  | 273,530
Other operational (*) |  | 75,325 |  | 71,735 |  | 28,644 |  | 47,084
|  | 1,065,256 |  | 962,051 |  | 380,764 |  | 320,614

|  | Parent Company
|  | Nine months ended |  | Three months ended
|  | 09/30/2019 |  | 09/30/2018 |  | 09/30/2019 |  | 09/30/2018
Production cost |  | 454,695 |  | 427,751 |  | 153,948 |  | 143,156
Selling expenses |  | 4,388 |  | 3,617 |  | 1,721 |  | 1,162
General and administrative expenses |  | 10,889 |  | 10,161 |  | 3,644 |  | 3,233
|  | 469,972 |  | 441,529 |  | 159,313 |  | 147,551
Other operational (*) |  | 11,919 |  | 1,488 |  | 8,681 |  | 1,488
|  | 481,891 |  | 443,017 |  | 167,994 |  | 149,039

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

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23. OTHER OPERATING INCOME (EXPENSES)

|  | Consolidated
|  | Nine months ended |  | Three months ended
|  | 09/30/2019 |  | 09/30/2018 |  | 09/30/2019 |  | 09/30/2018
Other operating income |  |  |  |  |  |  |  |
Indemnities |  | 51,372 |  | 37,727 |  | 49,703 |  | 1,027
Rentals and leases |  | 6,792 |  | 3,088 |  | 2,334 |  | 2,168
Dividends received |  | 29,563 |  | 8,662 |  | 1,131 |  | 2,459
PIS and COFINS to compensate (1) |  | 87,394 |  | 446,331 |  |  |  | 446,331
Contractual fines |  | 2,733 |  | 3,615 |  | 847 |  | 586
Updated shares - VJR (Note 13II) |  | (365,305) |  | 1,547,265 |  | (245,835) |  | 129,721
Gain on disposal of LLC |  |  |  | 1,164,294 |  |  |  | 14,402
Other revenues |  | 23,527 |  | 16,920 |  | 8,730 |  | 1,764
|  | (163,924) |  | 3,227,902 |  | (183,090) |  | 598,458
Other operating expenses |  |  |  |  |  |  |  |
Taxes and fees |  | (61,007) |  | (15,844) |  | (44,384) |  | (4,806)
Expenses with environmental liabilities, net |  | (49,165) |  | (36,622) |  | (25,430) |  | (11,153)
Write-off/(Provision) of judicial lawsuits |  | 13,483 |  | (16,029) |  | (20,118) |  | 24,734
Contractual fines |  | (51,658) |  | (104,086) |  | (24,904) |  | (104,086)
Depreciation of equipment paralyzed and amortization of intangible assets (note 22) | (75,325) |  | (71,735) |  | (28,644) |  | (47,084)
Write- off PP&E and intangible assets (note 10) |  | (39,806) |  | (29,383) |  | (8,013) |  | (27,519)
Estimated (Loss)/reversal in inventories |  | (87,503) |  | (14,424) |  | (22,351) |  | (392)
Idleness in stocks and paralyzed equipment |  | (442,552) |  | (57,197) |  | (252,046) |  | (57,197)
Studies and project engineering expenses |  | (18,123) |  | (18,005) |  | (6,445) |  | (6,300)
Research and development expenses |  | (1,309) |  | (2,199) |  | (625) |  | (719)
Advisory expenses |  |  |  | (1,905) |  |  |  | (525)
Healthcare plan expenses |  | (90,480) |  | (80,880) |  | (32,940) |  | (32,246)
Reversal/(Provision) industrial reestructuring |  |  |  | (1,089) |  | (871) |  | 2,290
Cash flow hedge accounting realized (Note 13 b) |  | (632,681) |  | (196,783) |  | (186,022) |  | (183,051)
Actuarial Pension Plan |  | (1,512) |  |  |  |  |  |
Other expenses |  | (118,945) |  | (49,852) |  | (26,717) |  | 35,263
|  | (1,636,583) |  | (710,737) |  | (679,510) |  | (420,325)
Other operating income (expenses), net |  | (1,800,507) |  | 2,517,165 |  | (862,600) |  | 178,133

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|  |  |  | Parent Company
|  | Nine months ended |  | Three months ended
|  | 09/30/2019 |  | 09/30/2018 |  | 09/30/2019 |  | 09/30/2018
Other operating income |  |  |  |  |  |  |  |
Indemnities |  | 10,768 |  | 14,467 |  | 9,131 |  | 967
Rentals and leases |  | 6,517 |  | 2,788 |  | 2,184 |  | 2,048
Dividends received |  | 29,563 |  | 8,091 |  | 1,131 |  | 2,458
PIS and COFINS to compensate (1) |  | 87,394 |  | 446,331 |  |  |  | 446,331
Contractual fines |  | 2,072 |  | 1,964 |  | 615 |  | 343
Updated shares - VJR (Note 13II) |  | (365,305) |  | 1,547,265 |  | (245,835) |  | 129,721
Intercompany debt relief |  |  |  | 1,310,886 |  |  |  | 1,310,886
Other revenues |  | 2,039 |  | 5,138 |  | 1,592 |  | 441
|  | (226,952) |  | 3,336,930 |  | (231,182) |  | 1,893,195
Other operating expenses |  |  |  |  |  |  |  |
Taxes and fees |  | (37,062) |  | (7,779) |  | (33,098) |  | (3,766)
Expenses with environmental liabilities, net |  | (12,007) |  | (23,327) |  | (7,003) |  | (4,038)
Write-off/(Provision) of judicial lawsuits |  | 30,195 |  | (24,423) |  | (7,365) |  | 15,100
Contractual fines |  | (51,658) |  |  |  | (24,904) |  |
Depreciation of paralyzed equipment and amortization of intangible assets (Note 22) | (11,919) |  | (1,488) |  | (8,681) |  | (1,488)
Write- off PP&E and intangible assets (notes 10) |  | (18,324) |  | (13,201) |  | (3,292) |  | (13,187)
Estimated (Loss)/reversal in inventories |  | (23,255) |  | (11,297) |  | (4,632) |  | 1,621
Studies and project engineering expenses |  | (17,230) |  | (16,354) |  | (4,927) |  | (6,434)
Research and development expenses |  | (1,309) |  | (2,199) |  | (625) |  | (719)
Cash flowh hedge accounting realized (Note 13b) |  | (632,681) |  | (196,783) |  | (186,022) |  | (183,051)
Healthcare plan expenses |  | (90,113) |  | (80,803) |  | (32,792) |  | (32,163)
Advisory expenses |  |  |  | (1,784) |  |  |  | (523)
Idleness in stocks and paralysed equipments |  | (418,251) |  | (15,655) |  | (251,178) |  | (15,655)
Actuarial pension plan |  | (1,512) |  |  |  |  |  |
Other expenses |  | (60,915) |  | (67,191) |  | (8,253) |  | (5,801)
|  | (1,346,041) |  | (462,284) |  | (572,772) |  | (250,104)
Other operating income (expenses), net |  | (1,572,993) |  | 2,874,646 |  | (803,954) |  | 1,643,091

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

(2) Idleness in stocks: 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
|  | Nine months ended |  | Three months ended
|  | 09/30/2019 |  | 09/30/2018 |  | 09/30/2019 |  | 09/30/2018
Financial income |  |  |  |  |  |  |  |
Related parties (note 18 a) |  | 60,344 |  | 47,954 |  | 20,243 |  | 17,721
Income from financial investments |  | 78,059 |  | 82,375 |  | 27,388 |  | 30,850
Other income (1) |  | 172,591 |  | 296,330 |  | 66,582 |  | 287,314
|  | 310,994 |  | 426,659 |  | 114,213 |  | 335,885
Financial expenses |  |  |  |  |  |  |  |
Borrowings and Financing - foreign currency |  | (842,448) |  | (731,515) |  | (307,587) |  | (272,340)
Borrowings and Financing - local currency |  | (687,179) |  | (773,227) |  | (223,055) |  | (253,580)
Lease liabilities |  | (36,430) |  |  |  | (19,017) |  |
Capitalised interest (notes 10 and 28) |  | 61,040 |  | 52,808 |  | 19,644 |  | 18,323
Interest, fines e late payment charges |  | (78,382) |  | (66,793) |  | (11,101) |  | (62,391)
Commission and bank fees |  | (132,359) |  | (134,469) |  | (44,494) |  | (46,218)
PIS/COFINS over financial income |  | (17,333) |  | (42,958) |  | (9,861) |  | (35,383)
Losses on derivatives (*) (note 13) |  | (7,664) |  |  |  | (7,664) |  |
Other financial expenses |  | (205,507) |  | 12,944 |  | (68,928) |  | (19,858)
|  | (1,946,262) |  | (1,683,210) |  | (672,063) |  | (671,447)
Foreign exchange and monetary variation, net |  |  |  |  |  |  |  |
Monetary variation, net |  | (3,901) |  | (21,637) |  | 2,034 |  | (1,815)
Exchange variation, net |  | (198,301) |  | (728,472) |  | (288,306) |  | (82,686)
Exchange variation on derivatives |  | 4,621 |  | 667 |  | 4,048 |  | (3,162)
|  | (197,581) |  | (749,442) |  | (282,224) |  | (87,663)
Financial income (expenses), net |  | (1,832,849) |  | (2,005,993) |  | (840,074) |  | (423,225)
Statement of gain and (losses) on derivative transactions |  |  |  |
Dollar to euro swap |  | 4,621 |  | 667 |  | 4,048 |  | (3,162)
Swap CDI x Dollar (note 13) |  | (7,664) |  |  |  | (7,664) |  |
|  | (3,043) |  | 667 |  | (3,616) |  | (3,162)

(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$ 139,316 as of September 30,2019 (R$ 278,707 as of September 30,2018).

|  | Consolidado |  | Parent Company
|  | Nine months ended |  | Three months ended
|  | 09/30/2019 |  | 09/30/2018 |  | 09/30/2019 |  | 09/30/2018
Financial income |  |  |  |  |  |  |  |
Related parties (note 18 a) |  | 57,829 |  | 43,299 |  | 19,592 |  | 15,903
Income from financial investments |  | 46,094 |  | 53,572 |  | 15,523 |  | 22,930
Other income |  | 99,287 |  | 378,376 |  | 17,270 |  | 371,743
|  | 203,210 |  | 475,247 |  | 52,385 |  | 410,576
Financial expenses |  |  |  |  |  |  |  |
Borrowings and Financing - foreign currency |  | (223,711) |  | (182,585) |  | (67,453) |  | (82,567)
Borrowings and Financing - local currency |  | (607,879) |  | (675,201) |  | (197,718) |  | (222,715)
Related parties (note 18 a) |  | (238,672) |  | (308,309) |  | (87,219) |  | (85,772)
Lease liabilities |  | (2,029) |  |  |  | (406) |  |
Capitalised interest (notes 10 and 28) |  | 16,126 |  | 11,923 |  | 5,094 |  | 4,394
Losses on derivatives (*) (note 13) |  | (7,664) |  |  |  | (7,664) |  |
Interest, fines e late payment charges |  | (74,294) |  | (3,113) |  | (9,947) |  | (2,307)
Commission and bank fees |  | (123,790) |  | (120,321) |  | (41,634) |  | (42,417)
PIS/COFINS over financial income |  | (9,241) |  | (25,449) |  | (2,069) |  | (19,988)
Other financial expenses |  | (36,253) |  | 66,430 |  | (17,678) |  | 6,875
|  | (1,307,407) |  | (1,236,625) |  | (426,694) |  | (444,497)
Foreign exchange and monetary variation, net |  |  |  |  |  |  |  |
Monetary variation, net |  | 8,851 |  | (9,144) |  | 2,870 |  | (1,920)
Exchange variation, net |  | (109,283) |  | (699,988) |  | (192,347) |  | (25,879)
|  | (100,432) |  | (709,132) |  | (189,477) |  | (27,799)
Financial income (expenses), net |  | (1,204,629) |  | (1,470,510) |  | (563,786) |  | (61,720)
Statement of gain and (losses) on derivative transactions |  |  |  |  |  |  |  |
Swap CDI x Dollar (note 13) |  | (7,664) |  |  |  | (7,664) |  |
|  | (7,664) |  |  |  | (7,664) |  |

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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:

|  | Nine months ended
|  | 09/30/2019
P&L |  | Steel |  | Mining |  | Logistics |  |  |  | Energy |  | Cement |  | Corporate expenses/elimination |  | Consolidated
|  |  | Port |  | Railroads |  |  |  |
Metric tons (*) |  | 3,407,746 |  | 28,210,619 |  |  |  |  |  |  |  |  |  | (2,695,819) |  |
Net revenues |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Domestic market |  | 7,498,693 |  | 685,061 |  | 184,960 |  | 1,028,947 |  | 221,877 |  | 426,452 |  | (1,855,996) |  | 8,189,994
Foreign market |  | 3,100,928 |  | 6,820,833 |  |  |  |  |  |  |  |  |  | 800,846 |  | 10,722,607
Total net revenue (note 21) |  | 10,599,621 |  | 7,505,894 |  | 184,960 |  | 1,028,947 |  | 221,877 |  | 426,452 |  | (1,055,150) |  | 18,912,601
Cost of sales and services |  | (9,791,477) |  | (3,073,458) |  | (133,946) |  | (770,001) |  | (183,037) |  | (466,563) |  | 1,584,361 |  | (12,834,121)
Gross profit |  | 808,144 |  | 4,432,436 |  | 51,014 |  | 258,946 |  | 38,840 |  | (40,111) |  | 529,211 |  | 6,078,480
General and administrative expenses |  | (605,472) |  | (143,020) |  | (25,985) |  | (78,120) |  | (21,595) |  | (67,114) |  | (871,666) |  | (1,812,972)
Depreciation (note 22) |  | 471,676 |  | 342,202 |  | 23,427 |  | 287,744 |  | 13,079 |  | 96,551 |  | (244,748) |  | 989,931
Proportionate EBITDA of joint ventures |  |  |  |  |  |  |  |  |  |  |  |  |  | 415,646 |  | 415,646
Adjusted EBITDA |  | 674,348 |  | 4,631,618 |  | 48,456 |  | 468,570 |  | 30,324 |  | (10,674) |  | (171,557) |  | 5,671,085
Sales by geographic area |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Asia |  | 2,980 |  | 4,772,174 |  |  |  |  |  |  |  |  |  | 800,846 |  | 5,576,000
North America |  | 635,722 |  |  |  |  |  |  |  |  |  |  |  |  |  | 635,722
Latin America |  | 128,980 |  |  |  |  |  |  |  |  |  |  |  |  |  | 128,980
Europe |  | 2,331,861 |  | 2,048,659 |  |  |  |  |  |  |  |  |  |  |  | 4,380,520
Others |  | 1,385 |  |  |  |  |  |  |  |  |  |  |  |  |  | 1,385
Foreign market |  | 3,100,928 |  | 6,820,833 |  |  |  |  |  |  |  |  |  | 800,846 |  | 10,722,607
Domestic market |  | 7,498,693 |  | 685,061 |  | 184,960 |  | 1,028,947 |  | 221,877 |  | 426,452 |  | (1,855,996) |  | 8,189,994
Total |  | 10,599,621 |  | 7,505,894 |  | 184,960 |  | 1,028,947 |  | 221,877 |  | 426,452 |  | (1,055,150) |  | 18,912,601
|  | Three months ended
|  | 09/30/2019
P&L |  | Steel |  | Mining |  | Logistics |  |  |  | Energy |  | Cement |  | Corporate expenses/elimination |  | Consolidated
|  |  | Port |  | Railroads |  |  |  |
Metric tons (*) |  | 1,072,210 |  | 9,209,162 |  |  |  |  |  |  |  |  |  | (387,919) |  |
Net revenues |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Domestic market |  | 2,416,785 |  | 141,580 |  | 69,029 |  | 354,201 |  | 74,348 |  | 160,601 |  | (539,890) |  | 2,676,654
Foreign market |  | 917,267 |  | 2,194,089 |  |  |  |  |  |  |  |  |  | 218,383 |  | 3,329,739
Total net revenue (note 21) |  | 3,334,052 |  | 2,335,669 |  | 69,029 |  | 354,201 |  | 74,348 |  | 160,601 |  | (321,507) |  | 6,006,393
Cost of sales and services |  | (3,189,615) |  | (1,070,900) |  | (43,299) |  | (258,399) |  | (55,556) |  | (179,820) |  | 427,232 |  | (4,370,357)
Gross profit |  | 144,437 |  | 1,264,769 |  | 25,730 |  | 95,802 |  | 18,792 |  | (19,219) |  | 105,725 |  | 1,636,036
General and administrative expenses |  | (198,426) |  | (50,974) |  | (8,663) |  | (26,451) |  | (7,501) |  | (24,734) |  | (250,584) |  | (567,333)
Depreciation (note 22) |  | 159,255 |  | 138,292 |  | 2,337 |  | 97,090 |  | 4,397 |  | 33,277 |  | (82,528) |  | 352,120
Proportionate EBITDA of joint ventures |  |  |  |  |  |  |  |  |  |  |  |  |  | 146,065 |  | 146,065
Adjusted EBITDA |  | 105,266 |  | 1,352,087 |  | 19,404 |  | 166,441 |  | 15,688 |  | (10,676) |  | (81,322) |  | 1,566,888
Sales by geographic area |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Asia |  | 1,236 |  | 1,322,203 |  |  |  |  |  |  |  |  |  | 218,383 |  | 1,541,822
North America |  | 207,877 |  |  |  |  |  |  |  |  |  |  |  |  |  | 207,877
Latin America |  | 45,262 |  |  |  |  |  |  |  |  |  |  |  |  |  | 45,262
Europe |  | 661,239 |  | 871,886 |  |  |  |  |  |  |  |  |  |  |  | 1,533,125
Others |  | 1,653 |  |  |  |  |  |  |  |  |  |  |  |  |  | 1,653
Foreign market |  | 917,267 |  | 2,194,089 |  |  |  |  |  |  |  |  |  | 218,383 |  | 3,329,739
Domestic market |  | 2,416,785 |  | 141,580 |  | 69,029 |  | 354,201 |  | 74,348 |  | 160,601 |  | (539,890) |  | 2,676,654
Total |  | 3,334,052 |  | 2,335,669 |  | 69,029 |  | 354,201 |  | 74,348 |  | 160,601 |  | (321,507) |  | 6,006,393

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|  | Nine months ended
|  | 09/30/2018
P&L |  | Steel |  | Mining |  | Logistics |  |  |  | Energy |  | Cement |  | Corporate expenses/elimination |  | Consolidated
|  |  | Port |  | Railroads |  |  |  |
Metric tons (*) |  | 3,888,265 |  | 24,891,751 |  |  |  |  |  |  |  |  |  | (3,823,122) |  |
Net revenues |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Domestic market |  | 7,610,721 |  | 672,167 |  | 194,276 |  | 1,107,657 |  | 307,750 |  | 442,965 |  | (1,950,807) |  | 8,384,729
Foreign market |  | 4,255,677 |  | 3,469,921 |  |  |  |  |  |  |  |  |  | 807,626 |  | 8,533,224
Total net revenue (note 21) |  | 11,866,398 |  | 4,142,088 |  | 194,276 |  | 1,107,657 |  | 307,750 |  | 442,965 |  | (1,143,181) |  | 16,917,953
Cost of sales and services |  | (9,556,095) |  | (2,531,586) |  | (141,805) |  | (774,072) |  | (209,413) |  | (395,308) |  | 1,501,078 |  | (12,107,201)
Gross profit |  | 2,310,303 |  | 1,610,502 |  | 52,471 |  | 333,585 |  | 98,337 |  | 47,657 |  | 357,897 |  | 4,810,752
General and administrative expenses |  | (718,718) |  | (102,843) |  | (26,766) |  | (72,805) |  | (21,027) |  | (64,662) |  | (821,518) |  | (1,828,339)
Depreciation (note 22) |  | 459,533 |  | 278,171 |  | 14,724 |  | 193,075 |  | 12,944 |  | 88,747 |  | (156,878) |  | 890,316
Proportionate EBITDA of joint ventures |  |  |  |  |  |  |  |  |  |  |  |  |  | 415,455 |  | 415,455
Adjusted EBITDA |  | 2,051,118 |  | 1,785,830 |  | 40,429 |  | 453,855 |  | 90,254 |  | 71,742 |  | (205,044) |  | 4,288,184
Sales by geographic area |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Asia |  | 18,122 |  | 3,176,157 |  |  |  |  |  |  |  |  |  | 807,626 |  | 4,001,905
North America |  | 1,318,242 |  |  |  |  |  |  |  |  |  |  |  |  |  | 1,318,242
Latin America |  | 301,343 |  |  |  |  |  |  |  |  |  |  |  |  |  | 301,343
Europe |  | 2,569,223 |  | 293,764 |  |  |  |  |  |  |  |  |  |  |  | 2,862,987
Others |  | 48,747 |  |  |  |  |  |  |  |  |  |  |  |  |  | 48,747
Foreign market |  | 4,255,677 |  | 3,469,921 |  |  |  |  |  |  |  |  |  | 807,626 |  | 8,533,224
Domestic market |  | 7,610,721 |  | 672,167 |  | 194,276 |  | 1,107,657 |  | 307,750 |  | 442,965 |  | (1,950,807) |  | 8,384,729
Total |  | 11,866,398 |  | 4,142,088 |  | 194,276 |  | 1,107,657 |  | 307,750 |  | 442,965 |  | (1,143,181) |  | 16,917,953
|  | Three months ended
|  | 09/30/2018
|  | Steel |  | Mining |  | Logistics |  |  |  | Energy |  | Cement |  | Corporate expenses/elimination |  | Consolidated
|  |  |  | Port |  | Railroads |  |  |  |
Metric tons (*) |  | 1,290,027 |  | 9,287,731 |  |  |  |  |  |  |  |  |  | (1,137,925) |  |
Net revenues |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Domestic market |  | 2,898,729 |  | 228,645 |  | 64,346 |  | 406,446 |  | 104,436 |  | 160,394 |  | (677,592) |  | 3,185,404
Foreign market |  | 1,199,959 |  | 1,430,691 |  |  |  |  |  |  |  |  |  | 348,935 |  | 2,979,585
Total net revenue (note 21) |  | 4,098,688 |  | 1,659,336 |  | 64,346 |  | 406,446 |  | 104,436 |  | 160,394 |  | (328,657) |  | 6,164,989
Cost of sales and services |  | (3,379,554) |  | (881,730) |  | (46,869) |  | (268,036) |  | (69,537) |  | (148,135) |  | 495,321 |  | (4,298,540)
Gross profit |  | 719,134 |  | 777,606 |  | 17,477 |  | 138,410 |  | 34,899 |  | 12,259 |  | 166,664 |  | 1,866,449
General and administrative expenses |  | (220,858) |  | (36,523) |  | (8,259) |  | (24,199) |  | (7,120) |  | (23,288) |  | (354,832) |  | (675,079)
Depreciation (note 22) |  | 154,186 |  | 69,730 |  | 5,597 |  | 64,632 |  | 4,315 |  | 28,215 |  | (53,145) |  | 273,530
Proportionate EBITDA of joint ventures |  |  |  |  |  |  |  |  |  |  |  |  |  | 162,118 |  | 162,118
Adjusted EBITDA |  | 652,462 |  | 810,813 |  | 14,815 |  | 178,843 |  | 32,094 |  | 17,186 |  | (79,195) |  | 1,627,018
Sales by geographic area |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Asia |  | 87 |  | 1,329,650 |  |  |  |  |  |  |  |  |  | 348,935 |  | 1,678,672
North America |  | 279,335 |  |  |  |  |  |  |  |  |  |  |  |  |  | 279,335
Latin America |  | 87,336 |  |  |  |  |  |  |  |  |  |  |  |  |  | 87,336
Europe |  | 821,798 |  | 101,041 |  |  |  |  |  |  |  |  |  |  |  | 922,839
Others |  | 11,403 |  |  |  |  |  |  |  |  |  |  |  |  |  | 11,403
Foreign market |  | 1,199,959 |  | 1,430,691 |  |  |  |  |  |  |  |  |  | 348,935 |  | 2,979,585
Domestic market |  | 2,898,729 |  | 228,645 |  | 64,346 |  | 406,446 |  | 104,436 |  | 160,394 |  | (677,592) |  | 3,185,404
Total |  | 4,098,688 |  | 1,659,336 |  | 64,346 |  | 406,446 |  | 104,436 |  | 160,394 |  | (328,657) |  | 6,164,989

(*) 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
|  | Nine months ended |  | Three months ended
|  | 09/30/2019 |  | 09/30/2018 |  | 09/30/2019 |  | 09/30/2018
Net income (loss) for the year |  | 1,110,569 |  | 3,428,346 |  | (870,656) |  | 752,164
Depreciation/Amortization/Depletion (note 22) |  | 989,931 |  | 890,316 |  | 352,120 |  | 273,530
Income tax and social contribution (note 15) |  | (359,449) |  | 161,249 |  | 300,754 |  | 237,960
Financial income (expenses) (note 24) |  | 1,832,849 |  | 2,005,993 |  | 840,074 |  | 423,225
EBITDA |  | 3,573,900 |  | 6,485,904 |  | 622,292 |  | 1,686,879
Other operating income (expenses) (note 23) |  | 1,800,507 |  | (2,517,165) |  | 862,600 |  | (178,133)
Equity in results of affiliated companies (note 9.b) |  | (118,968) |  | (96,010) |  | (64,069) |  | (43,846)
Proportionate EBITDA of joint ventures |  | 415,646 |  | 415,455 |  | 146,065 |  | 162,118
Adjusted EBITDA (*) |  | 5,671,085 |  | 4,288,184 |  | 1,566,888 |  | 1,627,018

(*) 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 to 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 September 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:

| 09/30/2019 |  | 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:

| 09/30/2019 |  | 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:

| 09/30/2019 |  | 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:

| 09/30/2019 |  | 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:

| 09/30/2019 |  | 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 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.

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.

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28. ADDITIONAL INFORMATION TO CASH FLOWS

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

|  |  | Consolidated |  | Parent Company
| 09/30/2019 |  | 09/30/2018 |  | 09/30/2019 |  | 09/30/2018
Income tax and social contribution paid (1) | 957,084 |  | 201,124 |  |  |  |
Addition to PP&E with interest capitalization (notes 10 and 24) | 61,040 |  | 52,808 |  | 16,126 |  | 11,923
Initial adoption CPC 06 – Right of use (note 14a) | 640,989 |  |  |  | 61,072 |  |
Remeasurement – Right of use (note 14 a) | (142,040) |  |  |  | (12,072) |  |
Acquisition of fixed assets without cash | 56,609 |  | 10,670 |  | 25,187 |  | 1,746
Acquisition of fixed assets by auction | 25,187 |  |  |  |  |  |
Capitalization in subsidiaries without cash |  |  |  |  | 28,409 |  | 36,214
| 1,598,869 |  | 264,602 |  | 118,722 |  | 49,883

(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.

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29. STATEMENT OF COMPREHENSIVE INCOME

|  |  |  |  |  |  |  | Consolidated
|  | Nine months ended |  | Three months ended
|  | 09/30/2019 |  | 09/30/2018 |  | 09/30/2019 |  | 09/30/2018
Profit for the year |  | 1,110,569 |  | 3,428,346 |  | (870,656) |  | 752,164
Other comprehensive income |  |  |  |  |  |  |  |
Items that will not be subsequently reclassified to the statement of income |  |  |  |  |  |  |  |
Actuarial (losses)/gains on defined benefit plan from investments in subsidiaries, net of taxes |  | 95 |  | 95 |  | 32 |  | 32
Actuarial (losses)/gains on defined benefit pension plan |  | 93,894 |  |  |  |  |  |
|  | 93,989 |  | 95 |  | 32 |  | 32
Items that could be subsequently reclassified to the statement of income |  |  |  |  |  |  |  |
Cumulative translation adjustments for the period |  | 36,700 |  | (17,175) |  | 64,636 |  | (29,171)
Fair value through other comprehensive income |  |  |  | (1,559,680) |  |  |  |
(Loss)/gain on the percentage change in investments |  | (1,995) |  | (105) |  |  |  |
(Loss)/gain on cash flow hedge accounting |  | (959,789) |  | (1,724,818) |  | (1,038,192) |  | (372,883)
Realization on cash flow hedge accounting reclassified to income statement |  | 632,681 |  | 196,783 |  | 186,022 |  | 183,051
(Loss)/gain on investments hedge in foreign subsidiaries |  | 2,184 |  | (32,196) |  | (4,411) |  | (7,263)
(Loss)/gain on business combination |  |  |  | (651) |  |  |  |
|  | (290,219) |  | (3,137,842) |  | (791,945) |  | (226,266)
|  | (196,230) |  | (3,137,747) |  | (791,913) |  | (226,234)
Total comprehensive income for the period |  | 914,339 |  | 290,599 |  | (1,662,569) |  | 525,930
Attributable to: |  |  |  |  |  |  |  |
Controlling shareholders |  | 548,317 |  | 216,095 |  | (1,784,873) |  | 495,299
Non-controlling shareholders |  | 366,022 |  | 74,504 |  | 122,304 |  | 30,631
|  | 914,339 |  | 290,599 |  | (1,662,569) |  | 525,930

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|  |  |  |  |  |  |  | Parent Company
|  | Nine months ended |  | Three months ended
|  | 09/30/2019 |  | 09/30/2018 |  | 09/30/2019 |  | 09/30/2018
Profit for the year |  | 744,553 |  | 3,353,848 |  | (992,958) |  | 721,535
Other comprehensive income |  |  |  |  |  |  |  |
Items that will not be subsequently reclassified to the statement of income |  |  |  |  |  |  |  |
Actuarial (losses)/gains on defined benefit plan from investments in subsidiaries, net of taxes |  | 89 |  | 89 |  | 30 |  | 30
Actuarial (losses)/gains on defined benefit pension plan |  | 93,894 |  |  |  |  |  |
|  | 93,983 |  | 89 |  | 30 |  | 30
Items that could be subsequently reclassified to the statement of income |  |  |  |  |  |  |  |
Cumulative translation adjustments for the period |  | 36,700 |  | (17,175) |  | 64,636 |  | (29,171)
Fair value through other comprehensive income |  |  |  | (1,559,680) |  |  |  |
(Loss)/gain on the percentage change in investments |  | (1,995) |  | (105) |  |  |  |
(Loss)/gain on cash flow hedge accounting |  | (959,789) |  | (1,724,818) |  | (1,038,192) |  | (372,883)
Realization on cash flow hedge accounting reclassified to income statement |  | 632,681 |  | 196,783 |  | 186,022 |  | 183,051
(Loss)/gain on investments hedge in subsidiaries |  | 2,184 |  | (32,196) |  | (4,411) |  | (7,263)
(Loss)/gain on business combination |  |  |  | (651) |  |  |  |
|  | (290,219) |  | (3,137,842) |  | (791,945) |  | (226,266)
|  | (196,236) |  | (3,137,753) |  | (791,915) |  | (226,236)
Total comprehensive income for the period |  | 548,317 |  | 216,095 |  | (1,784,873) |  | 495,299

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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$7,5 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$7.5 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.

The projected period of iron ore production comprises 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$7.5 billion for 2019, we estimate in the year iron ore prices levels (Platts – 62% Fe) above those estimated in 2018, when the reference indices close in average of US$ 69,46/ton. We consider it more feasible to maintain price levels (Platts - 62%) near US$ 90/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.

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, generating 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 production and purchase of third-party iron ore.

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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. | 7,500 | 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% | n.a. | n.a. | n.a. | n.a. | n.a. | n.a.
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 |  |

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.

We maintain our estimated iron ore production of 33Mton in 2019 and 33Mton in 2020.

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CSN maintains an estimated iron ore sales volume of 40million tons (Mton) in 2019, due to the increased availability of third party ore for sale and good performance in its own production.

Estimates replaced:

We adjusted the annualized adjusted EBTIDA estimate from R$ 8.5 billion to R$ 7.5 billion in 2019, mainly due to the below than expected iron ore price (Platts - 62%) and lower steel sales volume than previously estimated.

# b) In relation to the projections for periods that have already occurred, 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 % | n.a | 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 % | n.a | -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 |  |

# 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$ 7.5 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) in 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 third quarter of 2019 does not bring any material variation to the results projections previously presented, which can therefore be maintained.

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

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

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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 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 nine-month period ended September 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, October 23, 2019

Nelson Fernandes Barreto Filho

Assurance Partner

Grant Thornton Auditores Independentes

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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 September 30,2019.

São Paulo, October 23th, 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 September 30,2019.

São Paulo, October 23th, 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: November 23, 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.