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8 INVESTMENTS | 12 Months Ended
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Dec. 31, 2019
Investments Abstract |
INVESTMENTS | 8 INVESTMENTS · Reduction of financial leverage With the primary objective of reducing the Company’s financial leverage, Management is committed to a plan to dispose of a set of assets, however, it is not possible to confirm that the sale within a period of 12 months is highly probable for any of the assets contemplated in the plan. The Company considers several sales scenarios that vary according to different macroeconomic and operational assumptions. In this context, the Company did not segregate and did not reclassify such assets in the financial statements as discontinued operations in accordance with IFRS 5. 8.a) Investments in joint ventures, joint operations, associates and other investments
|  | 12/31/2019 |  |  | 12/31/2018
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
Joint-venture and Joint-operation |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
MRS Logística S.A. |  | 4,145,205 |  | 2,616,218 |  | 1,528,987 |  | 433,635 |  | 187,597 |  | 3,125,912 |  | 1,693,200 |  | 1,432,712 |  | 445,383 |  | 194,403
MRS - fair value amortization (Note 8.b) |  |  |  |  |  |  |  |  |  | (11,747) |  |  |  |  |  |  |  |  |  | (11,746)
CBSI - Companhia Brasileira de Serviços de Infraestrutura |  |  |  |  |  |  |  |  |  | 6,695 |  | 25,941 |  | 19,997 |  | 5,944 |  |  |  | 4,501
Transnordestina Logística S.A. (*) |  | 4,398,434 |  | 3,209,378 |  | 1,189,056 |  | 271,116 |  | (17,100) |  | 4,065,604 |  | 2,883,851 |  | 1,181,753 |  | 271,116 |  | (20,429)
|  | 8,543,639 |  | 5,825,596 |  | 2,718,043 |  | 704,751 |  | 165,445 |  | 7,217,457 |  | 4,597,048 |  | 2,620,409 |  | 716,499 |  | 166,729
Associates |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Arvedi Metalfer do Brasil |  | 44,435 |  | 31,712 |  | 12,723 |  |  |  | (1,682) |  | 40,712 |  | 26,308 |  | 14,404 |  |  |  | (5,087)
|  | 44,435 |  | 31,712 |  | 12,723 |  |  |  | (1,682) |  | 40,712 |  | 26,308 |  | 14,404 |  |  |  | (5,087)
Classified at fair value through profit or loss (note 12 I) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Usiminas |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 2,250,623 |  |  |  |
Panatlântica |  |  |  |  |  | 47,300 |  |  |  |  |  |  |  |  |  | 28,566 |  |  |  |
|  |  |  |  |  | 47,300 |  |  |  |  |  |  |  |  |  | 2,279,189 |  |  |  |
Eliminations (Note 8.b) |  |  |  |  |  |  |  |  |  | (38,219) |  |  |  |  |  |  |  |  |  | (28,252)
Other Investiments |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Others |  |  |  |  |  | 157 |  |  |  | 171 |  |  |  |  |  | 112 |  |  |  | 2,316
|  |  |  |  |  | 157 |  |  |  | 171 |  |  |  |  |  | 112 |  |  |  | 2,316
Total Investiments in affiliated companies |  |  |  |  |  | 3,482,974 |  |  |  |  |  |  |  |  |  | 5,630,613 |  |  |  |
Total Equity in results of affiliated companies (Note 8.b) |  |  |  |  |  |  |  |  |  | 125,715 |  |  |  |  |  |  |  |  |  | 135,706
Investment properties |  |  |  |  |  | 101,195 |  |  |  |  |  |  |  |  |  |  |  |  |  |
Total Investments |  |  |  |  |  | 3,584,169 |  |  |  |  |  |  |  |  |  | 5,630,613
(*) As of December 31, 2019, and 2018, the Fair Value generated in the loss of control of Transnordestina Logística S.A. is R$ 659,105 and impairment of R$ 387,989. The number of shares, the carrying amounts of assets, liabilities and shareholders’ equity, and the amounts of profit or loss for the year refer to the equity interests held by CSN in those companies. 8.b) Changes of investments balances in joint ventures, joint operations, associates and other investments
|  |  | Consolidated
| 12/31/2019 |  | 12/31/2018
Opening balance of investments | 5,630,613 |  | 5,499,995
Capital increase | 27,909 |  |
Dividends (1) | (94,603) |  | (87,846)
Comprehensive income (2) | (2,592) |  | 272
Equity in results of affiliated companies (3) | 175,524 |  | 173,145
Receipt arising from the sale of Usiminas’ shares |  |  | (39,377)
Update of shares classified at fair value through profit or loss (Note 12 II) | (118,780) |  | 96,133
Reclassification of Usiminas shares | (2,114,620) |  |
Consolidation CBSI (Note 8d) | (8,775) |  |
Amortization of fair value - investment MRS | (11,747) |  | (11,746)
Others | 45 |  | 37
Closing balance of investments | 3,482,974 |  | 5,630,613
(1) In 2019, refers to the allocation of dividends of Itá Energética, CSN Energia, CSN Mineração, Sepetiba Tecon, CBSI – Companhia Brasileira de Serviços de Infraestrutura and joint venture MRS Logística. (2) Refers to translation to the reporting currency of the foreign investments of which functional currency is not the Brazilian Reais, actuarial gain/loss and gain/loss on investment hedge from investments accounted for under the equity method. (3) The table below shows the reconciliation of the equity in results of affiliated companies classified as joint venture and associates and the amount disclosed in the income statement and it is due to the elimination of the results of the CSN´s transactions with these companies.
|  |  | Consolidated
| 12/31/2019 |  | 12/31/2018
Equity in results of affiliated companies |  |  |
MRS Logística S.A. | 187,597 |  | 194,403
CBSI - Companhia Brasileira de Serviços de Infraestrutura (1) | 6,695 |  | 4,501
Transnordestina Logística S.A. | (17,100) |  | (20,429)
Arvedi Metalfer do Brasil S.A. | (1,682) |  | (5,087)
Others | 14 |  | (243)
| 175,524 |  | 173,145
Eliminations |  |  |
To cost of sales | (57,908) |  | (42,806)
To taxes | 19,689 |  | 14,554
Others |  |  |
Amortization of fair value – investment in MRS | (11,747) |  | (11,746)
Others | 157 |  | 2,559
Equity in results adjusted | 125,715 |  | 135,706
(1) Refers to the equity in results of affiliated companies until November 30, 2019. 8.c) Additional information about the main operating subsidiaries · SEPETIBA TECON S.A. (“Tecon”) The Container Terminal was created to exploit the terminal no 1 in Itaguaí Port, located in the State of Rio de Janeiro. The terminal is connected to the UPV by the Southeast railroad network. The Southeast railroad network is the contract object of the concession that has been granted to MRS Logística S. A. The range of services includes the move operation of cargo, storage of containers and steel products, general cargo, cleaning and maintenance. Tecon won a bidding procedure and entered into the lease agreement in October 23, 1998 for operation of the port terminal for a period of 25 years, extendable for an equal period. Upon termination of the lease, it will return to the Union as well as all the rights and benefits transferred to Tecon, along with the ownership of assets and those resulting from investments, declared reversible by the Federal Government for being necessary to the continuity of terminal´s operation. The reversible assets will be indemnified by the Federal Government at the residual value of cost, based on the accounting records of Tecon after deducting depreciation. · ESTANHO DE RONDÔNIA S.A. (“ERSA”) Headquartered in the state of Rondônia, the subsidiary operates two units, which are based in the cities of Itapuã do Oeste/RO and Ariquemes/RO. In Itapuã do Oeste is extracted the cassiterite (tin ore) and in Ariquemes is located the casting operation, where the metallic tin is made, which is the raw material used in UPV for the production of tin plates. · COMPANHIA METALÚRGICA PRADA (“Prada”) Prada operates in the area of two segments: steel metal packaging, production and processing and distribution of flat steel. Metal packaging In the steel metal packaging segment, Prada produces its supply chain includes the chemical and food segments, providing packaging and printing services to leading companies in the market. Distribution Prada is a player in the market of processing and distribution regarding flat steel products, with a diversified product line. It provides coils, rolls, strips, blanks, metal sheets, profiles, tubes and tiles, among other products, to the most different industry segments - from automotive to construction. It is also specialized in providing service steel processing, meeting the demand of all national companies. · CSN ENERGIA S.A. Its main objective is the distribution of the excess electric power generated by CSN and Companies, consortiums or other entities in which CSN holds an interest. · FTL - FERROVIA TRANSNORDESTINA LOGÍSTICA S.A. (“FTL”) FTL was created on the purpose of incorporating the spun-off portion of Transnordestina Logística S.A, the Company holds the concession to operate the railway cargo transportation, the public service is provided in northeastern Brazil, which includes the railway between the towns of Sao Luis to Altos, Altos to Fortaleza, Fortaleza to Souza, Souza to Recife/Jorge Lins, Recife/Jorge Lins, Recife/Jorge Lins to Salgueiro, Jorge Lins to Propriá, Paula Cavalcante to Cabedelo (Cabedelo Branch) and Itabaiana to Macau (Macau Branch) ("Network I"). As of May 13, 2019, the CSN subscribed shares by capitalization of advances for future capital increase amounting R$27,670, therefore its participation in the share capital of the company increased from 91.69% to 92.38%. As a result of the operations described above that caused a change in the shareholder’s participation, the Company recorded a loss in the amount of R$293, recorded in shareholders' equity in other comprehensive income. · CSN MINERAÇÃO S.A. (“CSN Mineração”) Headquartered in Congonhas, Minas Gerais, it is primarily engaged in the production, purchase and sale of iron ore and commercializes its products mainly in the overseas market. From November 30,2015, the CSN Mineração S.A. has centralized mining operations of CSN, including the establishments of the mine Casa de Pedra, the port TECAR and the participation of 18.63% in MRS. The participation of the CSN in this subsidiary is 87.52%. · MINÉRIOS NACIONAL S.A. (“Minérios Nacional”) Headquartered in Congonhas, Minas Gerais, Mineração Nacional is mainly engaged in the production and commercialization of iron ore. This subsidiary concentrates the mining rights assets related to the Fernandinho, Cayman and Casa de Pedra mines transferred to this subsidiary in the business combination process that took place in 2015. 8.d) Joint ventures and joint operations financial information The balances of the balance sheets and income statements of joint venture and joint operation are presented as follows and refer to 100% of the companies´ results:
|  |  |  |  |  | 12/31/2019 |  |  |  |  |  |  |  | 12/31/2018
|  | Joint-Venture |  | Joint-Operation |  | Joint-Venture |  | Joint-Operation
Equity interest (%) |  | MRS Logística |  | Transnordestina Logística |  | Itá Energética |  | MRS Logística |  | CBSI |  | Transnordestina Logística |  | Itá Energética
| 34.94% |  | 47.26% |  | 48.75% |  | 34.94% |  | 50.00% |  | 46.30% |  | 48.75%
Balance sheet |  |  |  |  |  |  |  |  |  |  |  |  |  |
Current assets |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cash and cash equivalents |  | 670,296 |  | 17,166 |  | 65,793 |  | 345,962 |  | 2,091 |  | 19,234 |  | 29,870
Advances to suppliers |  | 20,100 |  | 3,240 |  | 363 |  | 17,750 |  | 73 |  | 1,734 |  | 937
Other current assets |  | 1,326,281 |  | 59,405 |  | 15,955 |  | 736,768 |  | 41,284 |  | 108,851 |  | 16,718
Total current assets |  | 2,016,677 |  | 79,811 |  | 82,111 |  | 1,100,480 |  | 43,448 |  | 129,819 |  | 47,525
Non-current assets |  |  |  |  |  |  |  |  |  |  |  |  |  |
Other non-current assets |  | 789,562 |  | 258,391 |  | 24,361 |  | 804,570 |  | 2,111 |  | 222,630 |  | 25,840
Investments, PP&E and intangible assets |  | 8,316,033 |  | 8,968,447 |  | 426,403 |  | 6,482,292 |  | 6,324 |  | 8,428,567 |  | 457,578
Total non-current assets |  | 9,105,595 |  | 9,226,838 |  | 450,764 |  | 7,286,862 |  | 8,435 |  | 8,651,197 |  | 483,418
Total Assets |  | 11,122,272 |  | 9,306,649 |  | 532,875 |  | 8,387,342 |  | 51,883 |  | 8,781,016 |  | 530,943
Current liabilities |  |  |  |  |  |  |  |  |  |  |  |  |  |
Borrowings and financing |  | 653,784 |  | 103,877 |  |  |  | 422,793 |  | 4,350 |  | 75,906 |  |
Leases |  | 256,034 |  |  |  |  |  |  |  |  |  |  |  |
Other current liabilities |  | 1,561,684 |  | 171,821 |  | 16,793 |  | 1,368,290 |  | 33,844 |  | 179,816 |  | 18,298
Total current liabilities |  | 2,471,502 |  | 275,698 |  | 16,793 |  | 1,791,083 |  | 38,194 |  | 255,722 |  | 18,298
Non-current liabilities |  |  |  |  |  |  |  |  |  |  |  |  |  |
Borrowings and financing |  | 2,369,615 |  | 6,084,424 |  |  |  | 2,111,518 |  | 1,262 |  | 5,754,073 |  |
Leases |  | 1,650,758 |  |  |  |  |  |  |  |  |  |  |  |
Other non-current liabilities |  | 527,871 |  | 430,603 |  | 16,550 |  | 640,535 |  | 539 |  | 218,839 |  | 15,113
Total non-current liabilities |  | 4,548,244 |  | 6,515,027 |  | 16,550 |  | 2,752,053 |  | 1,801 |  | 5,972,912 |  | 15,113
Shareholders’ equity |  | 4,102,526 |  | 2,515,924 |  | 499,532 |  | 3,844,206 |  | 11,888 |  | 2,552,382 |  | 497,532
Total liabilities and shareholders’ equity |  | 11,122,272 |  | 9,306,649 |  | 532,875 |  | 8,387,342 |  | 51,883 |  | 8,781,016 |  | 530,943
|  | 01/01/2019 a 11/30/2019 |  |  |  |  |  | 01/01/2019 a 12/31/2019 |  |  |  |  |  |  |  | 01/01/2018 a 12/31/2018
|  |  |  | Joint-Venture |  | Joint-Operation |  | Joint-Venture |  | Joint-Operation
Participação (%) |  | CBSI |  | MRS Logística |  | Transnordestina Logística |  | Itá Energética |  | MRS Logística |  | CBSI |  | Transnordestina Logística |  | Itá Energética
| 50.00% |  | 34.94% |  | 47.26% |  | 48.75% |  | 34.94% |  | 50.00% |  | 46.30% |  | 48.75%
Statements of Income |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net revenue |  | 267,436 |  | 3,200,809 |  |  |  | 163,048 |  | 3,726,448 |  | 166,080 |  |  |  | 166,358
Cost of sales and services |  | (233,830) |  | (2,382,828) |  |  |  | (83,129) |  | (2,476,628) |  | (142,254) |  |  |  | (77,829)
Gross profit |  | 33,606 |  | 817,981 |  |  |  | 79,919 |  | 1,249,820 |  | 23,826 |  | - |  | 88,529
Operating (expenses) income |  | (12,328) |  | 207,840 |  | (18,077) |  | (62,660) |  | (313,606) |  | (10,884) |  | (18,020) |  | (60,104)
Financial income (expenses), net |  | (1,460) |  | (268,089) |  | (18,386) |  | 1,183 |  | (151,839) |  | (179) |  | (26,103) |  | (126)
Income before income tax and social contribution |  | 19,818 |  | 757,732 |  | (36,463) |  | 18,442 |  | 784,375 |  | 12,763 |  | (44,123) |  | 28,299
Current and deferred income tax and social contribution |  | (6,428) |  | (254,378) |  |  |  | (6,147) |  | (262,760) |  | (3,761) |  |  |  | (9,452)
(Loss) profit for the year, net |  | 13,390 |  | 503,354 |  | (36,463) |  | 12,295 |  | 521,615 |  | 9,002 |  | (44,123) |  | 18,847
· ITÁ ENERGÉTICA S.A. - (“ITASA”) ITASA is a corporation established in July 1996 that was engaged to operate under a concession, the Itá Hydropower Plant (“UHE Itá”), with 1,450 MW of installed power, located on the Uruguay River, on the Santa Catarina and Rio Grande do Sul state border. The UHE Itá concession is shared with ENGIE Brasil Energia S.A., with CSN holding 48.75%. · MRS LOGÍSTICA S.A. (“MRS”) With registered offices in the City of Rio de Janeiro-RJ, this subsidiary is engaged in public railroad transportation, on the basis of an onerous concession, on the domain routes of the Southeast Grid of the federal railroad network (Rede Ferroviária Federal S.A. – RFFSA), located in the Southeast (Rio de Janeiro, São Paulo and Belo Horizonte. The concession has a 30-year term as from December 1, 1996, extendable for an equal term by exclusive decision of the concession grantor. MRS may further engage in services involving transportation modes related to railroad transportation and participate in projects aimed at expanding the railroad service concessions granted. For performance of the services covered by the concession, MRS leased from RFFSA for the same concession period, the assets required for operation and maintenance of the freight railroad transportation activities. At the end of the concession, all the leased assets are to be transferred to the ownership of the railroad transportation operator designated at that time. The Company had a direct equity interest of 18.64% in the capital stock of MRS and an indirect equity interest of 18.63% through its subsidiary CSN Mineração S.A., consequently the total participation is 34.94%. · CONSÓRCIO DA USINA HIDRELÉTRICA DE IGARAPAVA The Igarapava Hydroelectric Power Plant is located on the Grande River, in the city of Conquista, MG, and has installed capacity of 210 MW. It consists of 5 bulb-type generating units. CSN holds a 17.92% investment in the consortium, whose specific purpose is the distribution of electric power, which is made according to the percentage equity interest of each company. The balance of property, plant and equipment less depreciation as of December 31, 2019 is R$22,441 (R$23,596 as of December 31, 2018) and the expense in 2019 amounted to R$6,497 (R$5,827 in 2018). · CBSI - COMPANHIA BRASILEIRA DE SERVIÇOS DE INFRAESTRUTURA (“CBSI”) CBSI is the result of a joint venture between CSN and CKTR Brasil Ltda, which CSN held 50% interest. Based in the city of Araucária, PR, CBSI is primarily engaged in providing services to CSN and other third-party entities, and can operate activities related to the refurbishment and maintenance of industrial machinery and equipment, construction maintenance, industrial cleaning, logistic preparation of products, among other activities. - Business Combination: Acquisition of control of the company CBSI – Companhia Brasileira de Serviços de Infraestrutura (“CBSI”) On November 29, 2019, the Company acquired 50% of the capital of the company CBSI, of which it already held another 50%, becoming the holder of 100% of the shares. The value of the transaction was R$24,000 (twenty-four million reais) for 1,875,146 (one million eight hundred seventy-five thousand one hundred forty-six) common, nominative shares with no par value. The parties involved recognize that the price has been established considering the liabilities, contingencies, assets and results, past and future, of CBSI, and that no additional claim will be accepted from any of the parties at any time in relation to the value of the transaction. The market values of the assets acquired, and liabilities assumed do not differ from the book values on the acquisition date. Determination of the purchase price:
Description |  | R$ |  | Reference
Fair value of the interest held by the acquirer in the acquiree immediately before the combination |  | 8,775 |  | (i)
Amount paid on the acquisition of CBSI |  | 24,000 |  | (ii)
Purchase price considered for the business combination |  | 32,775 |  |
i. 50% of the stake held prior to the acquisition; ii. Total amount paid for another 50% of the CBSI company. In accordance with IFRS 3 - Business Combination, the interest held by the Company is part of the consideration transferred. Below are the values resulting from the business combination:
Assumptions |  | R$
Consideration paid for the acquisition of the remaining 50% interest in CBSI |  | 24,000
Fair value of the stake previously held by CSN |  | 8,775
Total consideration paid for the acquisition of CBSI |  | 32,775
Fair value of CBSI's shareholders' equity on the acquisition date |  | (17,550)
Goodwill |  | 15,225
Goodwill is an asset that represents future economic benefits resulting from other assets acquired in a business combination, which are not individually identified and separately recognized. It is allocated to a separate account in the individual financial statements in the investment group and in the intangible group in the consolidated financial statements. The balance sheet of the assets acquired, and liabilities assumed on November 29, 2019 is shown below:
ASSETS |  |
Cash and cash equivalents |  | 2,656
Accounts receivable |  | 67,340
Deferred taxes |  | 476
Other assets |  | 11,301
Inventory |  | 16,939
Fixed assets |  | 9,123
Intangible assets |  | 348
Total assets acquired |  | 108,183
LIABILITIES |  |
Borrowings and financing |  | 19,781
Trade payables |  | 15,564
Payroll and related taxes |  | 32,855
Tax payables |  | 1,950
Provisions |  | 5,369
Other liabilities |  | 15,114
Total liabilities assumed |  | 90,633
Equity acquired |  | 17,550
· TRANSNORDESTINA LOGÍSTICA S.A. (“TLSA”) TLSA is primarily engaged in the public service operation and development of a railroad network in the Northeast of Brazil network, comprising the rail segments Eliseu Martins to Trindade, Trindade to Salgueiro, Salgueiro to Porto Suape, Salgueiro to Missão Velha and Missão Velha to Pecém (“Railway System II”). It is in pre-operational phase and will remain so until the completion of Rail Network II. The approved schedule, which considered the completion of the work by January 2017, is currently under discussion with the responsible agencies, according described in the item 27.b. The Management understands that new deadlines for project completion will not have material adverse effects on the expected return on investment. During the year 2017, the other shareholders of TLSA subscribed 2,912,997 shares in amounting to R$153,253, diluting CSN on TLSA share capital to 46.30%. Therefore, due to the transactions described above and the participation change of the shareholders in the share capital of TLSA on 2017, the Company recognized a gain of R$2,814, recorded in equity in other comprehensive income. In May 2019, the Northeast Investment Fund - FINOR transferred to CSN, BNDES and BNDESPAR, 1,677,816 (one million six hundred seventy-seven thousand, eight hundred and sixteen) class “B preferred shares, of which 501,789 (five hundred and one thousand, seven hundred and eighty-nine) shares were transferred specifically to CSN. On 12/31/2019, the Company's interest in the capital of TLSA is 47.26% of the total capital and 92.60% of the voting capital. The Management receives funds from its shareholders and third parties for completion of the works, according described in the item 27.b, which are expected to be available, based on agreements previously entered into and recent discussions between the involved parties. After analyzing this matter, Management concluded as adequate the use of the accounting base of the project’s going concern in the preparation of the financial statements for the year ended December 31, 2019. TLSA performed an impairment test of its own long-live assets using the discount cash flow method and considered the main assumptions, as follows: Measurement of recoverable value:
Cash Flow Projection | Until 2057
Gross Margin | Based on market studies to capture operations costs and loads, based on studies of market trends.
Estimated Costs | Costs based on studies and market trends.
Growth rate in perpetuity | Growth rate was not considered due to the projection model until the end of the concession.
Discount rate | Between 5.09% to 6.98% in real terms.
In addition, CSN, as an investor, performed an impairment test of its stake in TLSA, through TLSA ability to distribute dividends, methodology known as Dividend Discount Model, or DDM, to remunerate the capital invested by shareholders. In order to perform this test, some aspects were taken into account, such as: · The flow of dividends was obtained from the TLSA nominal cash flow; · The flow of dividends was calculated considering the annual percentages of participation, considering the dilutions of the CSN’s stakes due to the amortization of debts; · This flow of dividends was discounts at present value using cost of equity (Ke) embedded in the WACC rate of TLSA; and · This Ke obtained was the one calculated in the “rolling WACC” of TLSA. Due to the sharing of investors risks, and by the fact that the asset that is being tested represents the cash-generating unit itself, which is equal to the legal entity, the risk determined by CSN Management is the same applied by TLSA when the evaluation of their own investments, not applying an additional risk factor to the model. As a result, it was not necessary to recognize an impairment in the surplus-value of the investments in the year ended on December 31, 2019. 8.e) Additional information on indirect participation in abroad operations · STAHLWERK THÜRINGEN GMBH (“SWT”) SWT was formed from the former industrial steel complex of Maxhütte, located in the Germany city of Unterwellenborn, which produces steel shapes used for construction in accordance with international quality standards. Its main raw material is steel scrap; the Company has an installed production capacity of 1.1 million metric tons’ steel/year. The SWT is a wholly owned indirect subsidiary of CSN Steel S.L.U, a subsidiary of CSN. · COMPANHIA SIDERURGICA NACIONAL – LLC (“CSN LLC”) Incorporated in 2001 with the assets and liabilities from the extinct Heartland Steel Inc., CSN LLC has an industrial plant in Terre Haute, Indiana State - USA, where the cold rolled and galvanized steel production lines are located, its installed production capacity is 800 thousand tons/year. CSN LLC is a wholly owned indirect subsidiary through CSN Steel S.L.U. after Merger, previously named CSN Americas S.L.U, a subsidiary of CSN. On June 5, 2018 CSN LLC had its corporate name changed to "Heartland Steel Processing, LLC". On the same date, a new company was incorporated under the name "Companhia Siderúrgica Nacional, LLC", a wholly owned subsidiary of Heartland Steel Processing, LLC. On June 28, 2018, Companhia Siderúrgica Nacional, LLC., became a wholly-owned subsidiary of CSN Steel and, on June 29, 2018, Heartland Steel Processing, LLC was sold to Steel Dynamics, Inc for the base transaction price of R$400million. The new "Companhia Siderúrgica Nacional, LLC" imports and comercializes steel products and maintains its activities in the United States. · LUSOSIDER AÇOS PLANOS S.A. (‘Lusosider’’) Incorporated in 1996 in succession to Siderurgia Nacional (a company privatized by the Portuguese government that year), Lusosider is the only Portuguese company of the steel industry to produce cold rolled and galvanized anti-corrosion steel. Based in Paio Pires, The Lusosider has an installed capacity of about 550,000 tons / year to produce four large groups of steel products: galvanized sheet, cold rolled sheet, pickled and oiled plate. The products are manufactured by Lusosider and may be used in the packaging industry, construction (pipes and metallic structures) and in home appliance components. 8.f) Other investments · PANATLÂNTICA S. A. (“Panatlântica”) Panatlântica is a publicly-held company, headquartered in the city of Gravataí, State of Rio Grande do Sul, engaged in the manufacturing, trade, import, export and processing of steel and ferrous or non-ferrous metals, coated or not. This investment is classified as fair value through profit or loss. The Company currently holds 11.31% (11.33% as of December 31, 2018) of Panatlântica’s total share capital. · USINAS SIDERURGICAS DE MINAS GERAIS S.A. – USIMINAS (“USIMINAS”) Usiminas, headquartered in Belo Horizonte, State of Minas Gerais, is engaged in steel and related operations. Usiminas produces flat rolled steel in the Intendente Câmara and José Bonifácio de Andrada e Silva plants, located in Ipatinga, Minas Gerais, and Cubatão, São Paulo, respectively, the final product is sold in the domestic and foreign market. Usiminas also exploits iron ore mines located in Itaúna, Minas Gerais, to meet its verticalization and production cost optimization strategies. Usiminas also has service and distribution centers located in several regions of Brazil, and the Cubatão, São Paulo, and Praia Mole in Espírito Santo, all centers are located in strategic locations for the shipment of its production. On April 9, 2014, the Administrative Council for Economic Defense (CADE - Conselho Administrativo de Defesa Econômica) issued its decision on the matter about the Usiminas shares held by CSN signing a Performance Commitment Agreement), also called TCD, between CADE and CSN. Under the terms of the decision of CADE and TCD, CSN must reduce its interest in USIMINAS, within a specified period. The deadline and percentage reduction are confidential. In addition, the political rights in Usiminas will continue suspended until the Company reaches the limits established in the TCD. In February 2018, were sold 3,136,100 of preferred shares (USIM5) in the amount of R$39,377, by the exclusive fund “VR1 - Multi-Credit Private Investment Fund. As of December 31, 2019, and 2018, the Company’s interest in Usiminas’s capital was 15.19% in common shares and 20.29% in preferred shares. In December 2019, the Company opted to reclassify the investment measured at fair value through profit or loss to current assets through a new management decision regarding the maintenance of shares in line with its asset sale strategy. USIMINAS is listed on the São Paulo Stock Exchange (“B3 S.A.”: USIM3 and USIM5). • ARVEDI METALFER DO BRASIL S.A. (“Arvedi”) Arvedi, headquartered in Salto, State of São Paulo, is engaged in pipe production. As of December 31, 2019 and 2018 CSN held 20.00% of Arvedi’s share capital. 8.g) Investment Property The Company maintains several properties for the purpose of using them in its operations, whether for industrial expansions, or for the benefit of its employees and the communities adjacent to its industrial plants. During the year of 2019, the Company started technical studies for the exploration of real estate activities aiming at earning income and capital appreciation. Already with a view to implementing these activities, during 2019 some land and buildings that were classified as fixed assets were reclassified to investment properties as shown below:
|  |  |  |  | Consolidated
| Land |  | Buildings |  | Total
Cost | 68,877 |  | 53,816 |  | 122,693
Accumulated depreciation |  |  | (21,498) |  | (21,498)
Balance at December 31,2019 | 68,877 |  | 32,318 |  | 101,195
On December 31, 2019, the Company's management estimated the fair value of investment properties in R$1,7 billion.

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