Companhia Siderurgica Nacional · BMFBOVESPA:CSNA3
Companhia Siderurgica Nacional — National Steel — Q3 2002 Earnings Presentation
47 slides from Companhia Siderurgica Nacional's earnings presentation, Dec 20, 2002
Slide 1: Quarterly Information: Balance Sheet - Assets
(CTranshtion of the report origina lly issued in Portaguese. See Note 29 toh financial eutament) FEDERAL PUBLIC SERVICE VM BRAZILIAN SECURITIES COMMISSION QUARTERLY INFORMATION. 17% COMMERCIAL, , INDUSTRY & OTHER TYPES OF COMPANY 01.01 DENTIFIC ATION CORPORATE LAW DATE: 09002002 I- CVA CODE [2 NAME
Slide 2: Balance Sheet - Assets (continued)
FEDERAL PUBLIC SERVICE CORPORA TELAW VM. BRAZILIAN SECURITIES COMMISSION QUARTELY INFORMATION. ITR COMMERCIAL, INDUSTRY & OTHER TYPES OF COMPANY DATE 09/7202 0101- ENTIFICATION [- CvaECODE p- NAMEG COMPANY - OcATER ow3.0 comantHIA SIDERIMRGIC A NACIONAL bn 7anmno108 0201. BALANCE SHEET. ASSETS(IN TH
Slide 3: Balance Sheet - Liabilities
(CTrans tion of the report originally issued in Portuguese. See Note 29 tothe func statement) FEDERAL PUBLIC SERVICE CVM - BRAEILIAN SECURITIES COMMISSION QUARTERLY INFORMATION. 1TR COMMERCIAL, INDUSTRY & OTHER TYPES OF COMPANY 0.01 IDENTIFICATION CORPORATELAW DATE. ona02002 I evn cope pos03.0 hp NA
Slide 4: Balance Sheet - Liabilities (continued)
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Slide 5: Statement of Operations
FEDERAL PUBLIC SERVICE EVM BRAZILIAN SECURITIES COMMISSION QUARTERLY INFORMATION ITR COMMERCIAL, INDUSTRY & OTHER TYYES OF COMPANY 0.01. DENTIICATION (Translation of the report orignaly issued im Portugues ‘See Note 20 to he Stancil steno CORPORATE LA DATE- 09002002 I CV CODE) NAME OF COMPANY powozo
Slide 6: 1. Operating Context
1. OPERATING CONTEXT Companhia Siderurgica Nacional ("CSN") is engaged in the production of flat steel products, with its main industrial complex being the Presidente Vargas Mill in the City of Volta Redonda, State of Rio de Janeiro, Southeast Brazil. Additionally, CSN is engaged in the mining of ir
Slide 7: Notes on subsidiaries and consolidation
(1) On March 28, 2002, NEPAR's stockholders decided to sell the company , because the Pacem thermoelectric construction project became economically non viable. (2) Considering the indirect share in Sepetiba Tecon S.A., through CSN Panama, S.A., the total percentage share is 50%. The financial statem
Slide 8: Related party transactions
* CSN Cayman and CSN Iron - Indirect Participation through its subsidiaries Energy I Corp. and CSN Panama S.A **Others: CFN, FCA, CSC, CSN Foundation, CBS - CSN Employee's Pension Fund, FEM, NEPAR, Sepetiba Tecon S.A., CSN Energia S.A. and CSN Participacoes Energeticas S.A. These operations were ent
Slide 9: 6. Marketable Securities
Company management has been investing their financial resources in Investment Fund comprised of Brazilian government bonds and fixed income bonds with monetary or foreign exchange variation, issued in Brazil and Swap contracts and exchange options . 7. ACCOUNTS RECEIVABLE
Slide 10: 7. Accounts Receivable
Damestic Market Subsidiary and Associated Company Other Clients Foreign Market Subsidiary and Associated Company Other Clients Allowance for doubtful accounts Parent Company Consolidated aavs0/2002 _os/s02002 “aara0v2002 —_ 06/30/2002, 542,009 623,898” 1,053,830 1,085,031 58,078 94.216 489,931 629,6
Slide 11: Deferred social contribution and income tax
The sources of the deferred social contribution and income tax of the Parent Company are shown as follows:
Slide 12: Deferred tax assets on income tax losses
The deferred assets related to income tax losses and social contribution negative basis were set up based on the historical CSN profitability and on the consequent expectation of future profitability. These credits are expected to be completely offset in 5 years. In addition to the credits already r
Slide 13: 10. Recoverable PIS/PASEP Levies
10. RECOVERABLE PIS/PASEP LEVIES As a result of a favorable final decision by the Federal Supreme Court and on the basis of Federal Senate Resolution no. 49/95 ruling that Decrees no. 2.445/88 and no. 2.449/88 were unconstitutional, an opinion which was further supported by CSN's legal counsel, the
Slide 14: Investments
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Slide 15: Metalic acquisition
o Metalic The CSN Stockholders'General Meeting, realized on September 26, 2002 approved the acquisition by the Company of all Metalic's issued shares. The price of acquisition is R$ 108,500 indexed, as of July 1, 2002, by the General Market Price Index announced by Fundacao Getulio Vargas, plus inte
Slide 16: Property, plant and equipment revaluation
In the Extraordinary General Shareholders' Meeting held March 31, 1999 the stockholders approved a revaluation report prepared by an independent specialized firm considering land, equipment, installations and real estate property in the plants of the Presidente Vargas Mill, Casa de Pedra and Arcos a
Slide 17: Deferred charges and IT projects
The IT projects are represented by automation projects of operating processes that aim at reducing costs and increase the competitiveness of the Company. The total amortization of the IT projects and of other projects until September of 2002 amounted to R$23,713 (2001 - R$14,255); of which R$12,492
Slide 18: Deferred exchange variation
Deferted exchange variation Accumulated amortzation, including settlamant of loare ‘90a 200 01 Third semester of 2002 Amertizable balance Expected amortization znt2 (Beober to December) 208 04 — Quarterended = ‘Year ended = 0/90/2002 eee 201 mugs genes 2.060,470 04z78) 04z7e) Gram) Grr) car) 618.173
Slide 19: Long-term amortization schedule
As of September 30, 2002, the long-term amortization schedule is shown below:
Slide 20: Loans, financing and debentures
The Company hires out derivative operations, in accordance with Note 16, with the aim of minimizing the risk of relevant oscillation in foreign currency parity. On August 2, 2002, the Company paid notes amounting to US$ 350 million with two years maturity, issued by its subsidiary CSN Islands Corp.
Slide 21: Derivatives, market value and guarantees
The net loss on the exchange rate operation shown above in the amount of R$182,961 is reflected in the financial results. (c) Market Value The amounts presented as "market value adjustment" were calculated according to the conditions that were used in local and foreign markets on September 30, 2002,
Slide 22: 18. Contingent Liabilities and Judicial Deposits
18. CONTINGENT LIABILITIES AND JUDICIAL DEPOSITS The Company is currently party to several administrative and court proceedings involving different actions, suits and complaints, as shown bellow:
Slide 23: Labor litigations and contingencies
The contingent liability is recorded as Others (current and long-term), except to the Income Tax and Social Contribution contingence that are recorded in a specific account. a) Labor litigations: As of September 30, 2002,CSN was the defendant, of 1,920 labor claims, which generated a provision in th
Slide 24: Capital stock and reserves
(a) Capital stock The Company's capital stock as of September 30, 2002 and June 30, 2002 is comprised of 71,729,261 thousand common shares, all recorded and without par value. Each common share entitles the owner to one vote at the General Meetings of Stockholders. (b) Revaluation reserve (Parent Co
Slide 25: 21. Consolidated Income and Profit by Business Areas
21. CONSOLIDATED INCOME AND PROFIT BY BUSINESS AREAS The information by line of business is based on the accounting books in accordance with Corporation Law. The disclosure by line of business followed the concept of IAS14, as suggested by the Brazilian Securities Commission ("CVM"), providing the m
Slide 26: Executive responsibilities and MAE disputes
The Chief Executive Officer is responsible for the strategic planning, CSN Foundation and press relations of the Company. The Corporate Center Executive Officer is responsible for the financial management, controlling area and information technology, legal matters, investors relations, human capital
Slide 27: 23. Non-Operating Income (Expenses)
23. NON-OPERATING INCOME (EXPENSES)
Slide 28: 24. Value-Added (Parent Company)
24. VALUE-ADDED (PARENT COMPANY)
Slide 29: 25. EBITDA
25. EBITDA The Company's EBITDA (gross profit minus selling, general and administrative expenses, plus depreciation and depletion) is as follows:
Slide 30: 26. Employees' Pension Fund
26. EMPLOYEES' PENSION FUND (a) Private Pension Administration The Company is the principal sponsor of the CSN Employees' Pension Fund ("CBS"), a private non-profit pension fund established in July 1960, whose principal objective is to pay benefits complementing those of the official social security
Slide 31: CBS tax assessment notices
Four tax assessment notices were filed against CBS by the income tax authorities, three in 1991 and one in 1996. On September 14, 2000, the Superior Chamber of Tax Appeals (Camara Superior de Recursos Fiscais), the last administrative instance of the Ministry of Finance (Ministerio da Fazenda), admi
Slide 32: 27. Business Internationalization
CSN does not have obligations on other post - employment benefits. 27. BUSINESS INTERNATIONALIZATION (a) In accordance with CSN's international business development strategy, on June 19, 2001, CSN obtained the right to acquire assets, with the approximate value of US$50 million that belonged to Hear
Slide 33: Income Statement - Parent Company
INCOME STATEMENT Parent Company - BR GAAP - In thousands of R$ 3 Q2002| 2 Q2002| 3% Qz001| omz001 | 9m2002 (Gross revenues from sales & services 1.348.607] 1213,775| 692,048] 2,940,437] 3,681,890 [Deductions ffom gross revenues (175,043)] 204797] 165805)) 42,174] 87,927) Netrevenues from sakes & ser
Slide 34: Income Statement - Consolidated
INCOME STATEMENT Consolidated - BR GAAP — In thousands of R$ 3 Q2002| 2" Q2002| 3% Q2001| exr2001 | 9nr2002 Gross revenues fromsales & services 1539,745] 1330,715| 1,239,112] 3,531,628] 411,978 Deductions fom gross revenues (219361)| @2gsisy] 193,17) (628,288) (667,085) [Net revenues from sales & se
Slide 35: Balance Sheet
BALANCE SHEET BR GAAP —In thousands of R$ Parent Compam Consolidated cos0n0t [oncsso2002 | onesse20e2| — onecse20e2 Current seis 5444332 | 3,927,761] 6,024,293 4,791,205 Cash & marketable sommes 2,486,736 | g6a.n1| — 2898,218 2,436,419 ‘Trade accounts eceivable 1083061) 817,860) 1,322,368 1,176,031
Slide 36: Net revenue by product
Net revenue by product In R$ftonne 3" Q02 24 Q02 3 QOL smor] 902 TOTAL MARKET 961 793 847 799 832 Hot Rolled I 610 586 351 636 cota Rolled am 155 m5 695 86 Galvanized 1,242 1,123 1,089 1,039 1,156 Tin Mil Products 1,346 1,168 1,109 1,053 1,21 Slabs 666 01 290 290 435
Slide 37: Sales Volume
SALES VOLUME In thousands of tonnes 3% Q2002] 2 Q2002 3° Q2001 9M 2001 9M 2002 BRAZILIANMARKET 700 204 720 2,464 2,461 Hot Rolled 244 354 253 907 936 ‘old Rolled 120 213 192 345 60 Ivanized 109 146 147 03 at Tin Mill Products 156 168 164 05 479 lbs nm 13 4 4 34 EXPORT MARKET 451 306 8 381 1,086 Hot
Slide 38: Investments in Fixed and Deferred Assets - Parent Company
INVESTMENTS IN FIXED AND DEFERRED ASSETS - PARENT COMPANY In millions of reais 32002] 2 Q2002] 3 Qz001| — 9nt2001 9M 2002 “Technological aysoversents 39 123 146 359 232 Cold Strip Ml #23 : 03 : : oa] BRB 37 62 oud m3 105 Hot Stip MIM2 102 25 1874 224.5 134] Environmental projects 149 193 16 580 380
Slide 39: Consolidated Balance Sheet - Assets
‘(Crane ation of the report originally issued in Portuguese. See Note 29 tothe Func statement) FEDERAL PUBLIC SERVICE VM - BRAEILIAN SECURITIES COMMISSION QUARTERLY INFORMATION. ITR COMMERCIAL, 0.0. DENTE | INDUSTRY & OTHER TYPES OF COMPANY ‘ICATION CORPORATELAW DATE. ona02002 T- eva CODE pos03.0 [2
Slide 40: Consolidated Balance Sheet - Assets (continued)
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Slide 41: Consolidated Balance Sheet - Liabilities
FEDERAL PUBLIC SERVICE CM - BRALILIAN SECURITIES COMMISSION QUARTERLY INFORMATION. ITR COMMERCIAL, INDUSTRY & OTHER TYPES OF COMPANY 0.01 IDENTIFICATION CORPORA TELAW DATE. ona02002 I CVE CODE f2- NAME OF COMPANY [p- TAXPAYER os03-0 lcOnPANvEIA SIDERURGICA NACIONAL f3.042.730/0001-04 06.02. CONSOLID
Slide 42: Consolidated Balance Sheet - Liabilities (continued)
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Slide 43: Consolidated Statement of Operations
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Slide 44: Consolidated Statement of Operations (continued)
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Slide 45: 15.01 Projects of Investment
(Tianslation of the report oniginally ismued in Poxtaguese, See Note 29 to the financial statements) FEDERAL PUBLIC SERVICE CORPORATE LAW (VM - BRAZILIAN SE CURITIE § COMMISSION (QUARTERLY INFORMATION. ITR COMMERCIAL, INDUSTRY & OTHER TYPES OF COMPANY DATE - 09/30/2002 —_00403- COMPANHIA SIDERURGICA
Slide 46: Quarterly Information supplementary tables
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Slide 47: Report of Independent Public Accountants on Special Review
Report of Independent Public Accountants on Special Review (Translation of the report originally issued in Portuguese. See Note 29 to the quarterly financial statements.) To the Administration Council and Shareholders of Companhia Siderurgica Nacional: 1. We have made a special review of the quarter