Provided by MZ Technologies
 
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 

 
FORM 6-K
 
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16 of the
Securities Exchange Act of 1934
 
For the month of August, 2009

Commission File Number 1-14732
 

 
COMPANHIA SIDERÚRGICA NACIONAL
(Exact name of registrant as specified in its charter)
 

National Steel Company
(Translation of Registrant's name into English)
 

Av. Brigadeiro Faria Lima 3400, 20º andar
São Paulo, SP, Brazil
04538-132
(Address of principal executive office)
 

Indicate by check mark whether the registrant files or will file annual reports
under cover Form 20-F or Form 40-F. 

Form 20-F ___X___ Form 40-F _______

 Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.  

Yes _______ No ___X____


(CONVENIENCE TRANSLATION INTO ENGLISH FROM THE ORIGINAL PREVIOUSLY ISSUED IN PORTUGUESE)

FEDERAL PUBLIC SERVICE     
CVM – BRAZILIAN SECURITIES AND EXCHANGE COMMISSION    Accounting Practices 
QUARTERLY INFORMATION  June 30, 2009  Adopted in Brazil 
COMMERCIAL, INDUSTRY & OTHER TYPES OF COMPANY     

REGISTRATION WITH CVM SHOULD NOT BE CONSTRUED AS AN EVALUATION OF THE COMPANY. COMPANY MANAGEMENT IS RESPONSIBLE FOR THE INFORMATION PROVIDED. 

01.01 – IDENTIFICATION

1 - CVM CODE 
00403-0 
2 - COMPANY NAME 
COMPANHIA SIDERÚRGICA NACIONAL
 
3 - CNPJ (Corporate Taxpayer’s ID)
33.042.730/0001-04
 
4 - NIRE (Corporate Registry ID)
33-3-00011595
 

01.02 – HEAD OFFICE

1 - ADDRESS 
R. SÃO JOSÉ, 20 GR, 1602 PARTE 
2 - DISTRICT
CENTRO 
3 - ZIP CODE 
22299-900 
4 - CITY   
RIO DE JANEIRO 
5 - STATE 
RJ 
6 - AREA CODE 
21 
7 - TELEPHONE 
2141-1800 
8 - TELEPHONE
 - 
9 - TELEPHONE
 - 
10 - TELEX 

11 - AREA CODE 
21 
12 - FAX 
2141-1809 
13 - FAX
 - 
14 – FAX
 - 
 
15 - E-MAIL 
invrel@csn.com.br 

01.03 – INVESTOR RELATIONS OFFICER (Company Mailing Address)

1- NAME 
PAULO PENIDO PINTO MARQUES 
2 - ADDRESS 
AV. BRIGADEIRO FARIA LIMA, 3400 20º ANDAR 
3 - DISTRICT 
ITAIM BIBI 
4 - ZIP CODE 
04538-132 
5 - CITY   
SÃO PAULO 
6 - STATE  
SP 
7 - AREA CODE 
11 
8 - TELEPHONE 
3049-7100 
9 - TELEPHONE
 - 
10 - TELEPHONE
 - 
11 - TELEX 

12 - AREA CODE 
11 
13 - FAX 
3049-7212 
14 - FAX
  - 
15 – FAX
 - 
 
16 - E-MAIL 
paulopenido@csn.com.br 

01.04 – REFERENCE AND AUDITOR INFORMATION

CURRENT YEAR  CURRENT QUARTER  PREVIOUS QUARTER 
1 - BEGINNING 2 - END  3 - QUARTER  4 - BEGINNING  5 - END  6 - QUARTER  7 - BEGINNING  8 - END 
1/1/2009 12/31/2009  4/1/2009  6/30/2009  1/1/2009  3/31/2009 
09 - INDEPENDENT ACCOUNTANT 
KPMG AUDITORES INDEPENDENTES 
10 - CVM CODE 
00418-9 
11. TECHNICIAN IN CHARGE 
ANSELMO NEVES MACEDO 
12 – TECHNICIAN’S CPF (INDIVIDUAL TAXPAYER’S ID)
033.169.788-28 

1


01.05 – CAPITAL STOCK

Number of Shares 
(In thousands)
1- CURRENT QUARTER 
6/30/2009 
2- PREVIOUS QUARTER 
3/31/2009 
3 – SAME QUARTER 
PREVIOUS YEAR 
6/30/2008 
Paid-in Capital 
     1 – Common  793,404  793,404  804,204 
     2 – Preferred 
     3 – Total  793,404  793,404  804,204 
Treasury Shares 
     4 – Common  34,734  34,734  34,734 
     5 – Preferred 
     6 – Total  34,734  34,734  34,734 

01.06 – COMPANY PROFILE

1 - TYPE OF COMPANY 
Commercial, Industry and Other Types of Company 
2 - STATUS 
Operational 
3 - NATURE OF OWNERSHIP 
Private National 
4 - ACTIVITY CODE 
1060 – Metallurgy and Steel Industry 
5 - MAIN ACTIVITY 
MANUFACTURING, TRANSFORMATION AND TRADING OF STEEL PRODUCTS 
6 - CONSOLIDATION TYPE 
Total 
7 - TYPE OF REPORT OF INDEPENDENT AUDITORS 
Unqualified 

01.07 – COMPANIES NOT INCLUDED IN THE CONSOLIDATED FINANCIAL STATEMENTS

1 - ITEM  2 - CNPJ (Corporate Taxpayer’s ID) 3 - COMPANY NAME 

01.08 - CASH DIVIDENDS APPROVED AND/OR PAID DURING AND AFTER THE QUARTER

1 - ITEM  2 - EVENT  3 - APPROVAL  4 - TYPE  5 - DATE OF PAYMENT  6 - TYPE OF SHARE  7 - AMOUNT PER SHARE 
01  AGO*  4/30/2009  Interest on Shareholders’ Equity  4/30/2009  Common  0.3537840000 
02  AGO*  6/25/2009  Dividend  6/25/2009  Common  1.0536500000 

*Annual General Meeting

2


01.09 - SUBSCRIBED CAPITAL AND CHANGES IN THE CURRENT YEAR

1 - ITEM  2 - DATE OF CHANGE  3 - CAPITAL STOCK 
(In thousands of reais)
4 - AMOUNT OF CHANGE 
(In thousands of reais)
5 - NATURE OF CHANGE  7 - NUMBER OF SHARES ISSUED 
(Thousand)
8 - SHARE PRICE WHEN ISSUED
(In reais)

01.10 - INVESTOR RELATIONS OFFICER

1 - DATE 
8/6/2009 
2 - SIGNATURE 

3


02.01 – BALANCE SHEET - ASSETS (in thousands of Reais)

1 - CODE  2 - DESCRIPTION  3 - 6/30/2009  4 -3/31/2009 
Total Assets  34,254,047  38,496,985 
1.01  Current Assets  8,636,527  12,624,221 
1.01.01  Cash and Cash Equivalents  100,992  231,864 
1.01.02  Receivable  2,600,972  2,821,483 
1.01.02.01  Clients  1,310,120  1,532,476 
1.01.02.01.01  Domestic Market  908,221  882,705 
1.01.02.01.02  Foreign Market  683,099  831,918 
1.01.02.01.03  Advance on Export Contracts (ACE) (58,548)
1.01.02.01.04  Allowance for Doubtful Accounts  (222,652) (182,147)
1.01.02.02  Sundry Receivable  1,290,852  1,289,007 
1.01.02.02.01  Employees  19,853  22,498 
1.01.02.02.02  Corporate Income Tax Recoverable  48,642  40,087 
1.01.02.02.03  Deferred Income Tax  321,049  460,925 
1.01.02.02.04  Deferred Social Contribution  115,739  165,855 
1.01.02.02.05  Prepaid Income Tax  272,700  40,543 
1.01.02.02.06  Other Taxes  304,578  164,810 
1.01.02.02.07  Proposed Dividends Receivable  104,003  308,545 
1.01.02.02.08  Loans with Subsidiaries  194  231 
1.01.02.02.09  Other Receivable  104,094  85,513 
1.01.03  Inventories  2,642,957  2,724,703 
1.01.04  Other  3,291,606  6,846,171 
1.01.04.01  Marketable Securities  3,270,240  6,831,375 
1.01.04.02  Prepaid Expenses  21,366  14,796 
1.02  Noncurrent Assets  25,617,520  25,872,764 
1.02.01  Long-Term Assets  5,507,569  6,187,175 
1.02.01.01  Sundry Receivables  944,939  919,257 
1.02.01.01.02  Securities Receivable  81,976  86,388 
1.02.01.01.03  Deferred Income Tax  508,378  498,201 
1.02.01.01.04  Deferred Social Contribution  169,699  166,875 
1.02.01.01.05  Other Taxes  184,886  167,793 
1.02.01.02  Receivable from Related Parties  3,614,265  4,339,363 
1.02.01.02.01  Associated and Related Companies 
1.02.01.02.02  Subsidiaries  1,409,572  1,723,917 
1.02.01.02.03  Other Related Parties  2,204,693  2,615,446 
1.02.01.03  Other  948,365  928,555 
1.02.01.03.01  Judicial Deposits  763,286  741,512 
1.02.01.03.03  Prepaid Expenses  31,690  34,951 
1.02.01.03.04  Other  153,389  152,092 
1.02.02  Permanent Assets  20,109,951  19,685,589 
1.02.02.01  Investments  12,832,015  12,706,858 
1.02.02.01.01  Interest in Associated/Related Companies 

4


1 - CODE  2 - DESCRIPTION  3 - 6/30/2009  4 -3/31/2009 
1.02.02.01.02  Interest in Associated/Related Companies - Goodwill 
1.02.02.01.03  Interest in Subsidiaries  12,831,984  12,706,827 
1.02.02.01.04  Interest in Subsidiaries - Goodwill 
1.02.02.01.05  Other Investments  31  31 
1.02.02.02  Property, Plant and Equipment  7,155,867  6,909,518 
1.02.02.02.01  In Operation, Net  6,083,817  5,612,780 
1.02.02.02.02  In Construction  982,641  1,210,999 
1.02.02.02.03  Land  89,409  85,739 
1.02.02.03  Intangible Assets  90,482  36,030 
1.02.02.04  Deferred Charges  31,587  33,183 

5


02.02 – BALANCE SHEET - LIABILITIES (in thousands of Reais)

1 - CODE  2 - DESCRIPTION  3 - 6/30/2009  4 -3/31/2009 
Total Liabilities  34,254,047  38,496,985 
2.01  Current Liabilities  5,823,889  7,805,142 
2.01.01  Loans and Financing  2,738,207  3,148,361 
2.01.02  Debentures  26,172  11,099 
2.01.03  Suppliers  1,240,240  1,668,275 
2.01.04  Taxes, Fees and Contributions  825,464  458,767 
2.01.04.01  Salaries and Social Contributions  86,020  68,342 
2.01.04.02  Taxes Payable  498,615  154,819 
2.01.04.05  Taxes Paid by Installments  240,829  235,606 
2.01.05  Dividends Payable  194,481  1,852,552 
2.01.06  Provisions  172,051  150,542 
2.01.06.01  Labor Contingencies  127,923  106,368 
2.01.06.02  Civil Contingencies  62,467  57,489 
2.01.06.03  Judicial Deposits  (74,642) (68,871)
2.01.06.04  Provision for Pension Fund  56,303  55,556 
2.01.07  Debts with Related Parties 
2.01.08  Other  627,274  515,546 
2.01.08.01  Accounts Payable - Subsidiaries  181,934  187,587 
2.01.08.02  Other  445,340  327,959 
2.02  Noncurrent Liabilities  21,439,646  23,762,964 
2.02.01  Long-Term Liabilities  21,439,646  23,762,964 
2.02.01.01  Loans and Financing  10,341,835  11,916,942 
2.02.01.02  Debentures  600,000  600,000 
2.02.01.03  Provisions  1,752,859  2,415,716 
2.02.01.03.01  Labor and Social Security Contingencies  26,678  20,804 
2.02.01.03.03  Tax Contingencies  3,701,647  3,640,265 
2.02.01.03.04  Environmental Contingencies  69,384  69,626 
2.02.01.03.05  Judicial Deposits  (2,044,850) (1,314,979)
2.02.01.04  Debts with Related Parties 
2.02.01.05  Advance for Future Capital Increase 
2.02.01.06  Other  8,744,952  8,830,306 
2.02.01.06.01  Accounts Payable – Subsidiaries  8,014,748  8,043,222 
2.02.01.06.02  Provision for Pension Fund  39,982  51,461 
2.02.01.06.03  Taxes Paid by Installments  542,671  589,802 
2.02.01.06.05  Other  147,551  145,821 
2.03  Deferred Income 
2.05  Shareholders’ Equity  6,990,512  6,928,879 
2.05.01  Paid-In Capital Stock  1,680,947  1,680,947 
2.05.02  Capital Reserves  30  30 
2.05.03  Revaluation Reserves 
2.05.03.01  Own Assets 

6


1 - CODE  2 - DESCRIPTION  3 - 6/30/2009  4 -3/31/2009 
2.05.03.02  Subsidiaries/Associated and Related Companies 
2.05.04  Profit Reserves  3,768,756  3,768,756 
2.05.04.01  Legal  336,190  336,190 
2.05.04.02  Statutory 
2.05.04.03  For Contingencies 
2.05.04.04  Unrealized Income  2,493,493 
2.05.04.05  Retention of Profits 
2.05.04.06  Special For Undistributed Dividends 
2.05.04.07  Other Profit Reserves  939,073  3,432,566 
2.05.04.07.01  From Investments  1,658,115  4,151,608 
2.05.04.07.02  Treasury Shares  (719,042) (719,042)
2.05.05  Equity Valuation Adjustments  401,412  1,248,814 
2.05.05.01  Securities Adjustments 
2.05.05.02  Accumulated Translation Adjustments  401,412  1,248,814 
2.05.05.03  Business Combination Adjustments 
2.05.06  Retained Earnings/ Accumulated Losses  1,139,367  230,332 
2.05.07  Advance for Future Capital Increase 

7


03.01 – STATEMENT OF INCOME (in thousands of Reais)

1 - CODE  2 - DESCRIPTION  3 - 4/1/2009 to 6/30/2009  4 - 1/1/2009 to 6/30/2009  5 - 4/1/2008 to 6/30/2008  6 - 1/1/2008 to 6/30/2008 
3.01  Gross Revenue from Sales and/or Services  2,516,244  4,798,504  3,500,195  6,604,477 
3.02  Gross Revenue Deductions  (579,945) (1,056,187) (914,986) (1,693,595)
3.03  Net Revenue from Sales and/or Services  1,936,299  3,742,317  2,585,209  4,910,882 
3.04  Cost of Goods Sold and/or Services Rendered  (1,223,773) (2,558,742) (1,347,053) (2,728,452)
3.04.01  Depreciation, Depletion and Amortization  (167,043) (279,487) (254,571) (527,025)
3.04.02  Other  (1,056,730) (2,279,255) (1,092,482) (2,201,427)
3.05  Gross Income  712,526  1,183,575  1,238,156  2,182,430 
3.06  Operating Income/Expenses  817,236  683,001  215,440  185,063 
3.06.01  Selling Expenses  (122,227) (228,786) (122,902) (223,931)
3.06.01.01  Depreciation and Amortization  (1,252) (2,378) (1,975) (3,844)
3.06.01.02  Other  (120,975) (226,408) (120,927) (220,087)
3.06.02  General and Administrative  (84,470) (155,247) (89,563) (158,515)
3.06.02.01  Depreciation and Amortization  (1,904) (3,732) (3,947) (8,073)
3.06.02.02  Other  (82,566) (151,515) (85,616) (150,442)
3.06.03  Financial  457,639  204,686  231,410  (24,742)
3.06.03.01  Financial Income  (96,997) 186,677  (113,778) (140,401)
3.06.03.02  Financial Expenses  554,636  18,009  345,188  115,659 
3.06.03.02.01  Foreign Exchange and Monetary Variation, net  1,124,992  1,233,933  627,015  632,501 
3.06.03.02.02  Financial Expenses  (570,356) (1,215,924) (281,827) (516,842)
3.06.04  Other Operating Income  30,603  105,423  9,510  14,608 
3.06.05  Other Operating Expenses  (144,605) (229,829) (111,762) (165,023)
3.06.06  Equity Pick-Up  680,296  986,754  298,747  742,666 
3.07  Operating Income  1,529,762  1,866,576  1,453,596  2,367,493 
3.08  Non-operating Income 
3.08.01  Income 
3.08.02  Expenses 
3.09  Income before Taxes/Profit Sharing  1,529,762  1,866,576  1,453,596  2,367,493 

8


1 - CODE  2 - DESCRIPTION  3 - 4/1/2009 to 6/30/2009  4 - 1/1/2009 to 6/30/2009  5 - 4/1/2008 to 6/30/2008  6 - 1/1/2008 to 6/30/2008 
3.10  Provision for Income and Social Contribution Taxes  (333,719) (418,704) (477,204) (553,508)
3.11  Deferred Income Tax  (176,991) (115,282) 74,551  8,056 
3.11.01  Deferred Income Tax  (129,699) (84,021) 52,262  3,835 
3.11.02  Deferred Social Contribution  (47,292) (31,261) 22,289  4,221 
3.12  Statutory Profit Sharing/Contributions 
3.12.01  Profit Sharing 
3.12.02  Contributions 
3.13  Reversal of Interest on Shareholders’ Equity 
3.15  Income/Loss for the Period  1,019,052  1,332,590  1,050,943  1,822,041 
  OUTSTANDING SHARES, EX-TREASURY (in thousands) 758,670  758,670  769,470  769,470 
  EARNINGS PER SHARE (in Reais) 1.34321  1.75648  1.36580  2.36792 
  LOSS PER SHARE (in Reais)        

9


04.01 – STATEMENT OF CASH FLOWSINDIRECT METHOD (in thousands of Reais)

1 - CODE  2 - DESCRIPTION  3 - 4/1/2009 to 6/30/2009  4 - 1/1/2009 to 6/30/2009  5 - 4/1/2008 to 6/30/2008  6 - 1/1/2008 to 6/30/2008 
4.01  Net Cash from Operating Activities  (426,863) (668,120) 1,072,278  1,489,781 
4.01.01  Cash Generated in the Operations  (1,303,799) (1,108,180) 795,091  1,313,007 
4.01.01.01  Net Income for the Year  1,019,052  1,332,590  1,050,944  1,822,042 
4.01.01.02  Provision for Charges on Loans and Financing  428,475  921,370  131,035  274,785 
4.01.01.03  Depreciation, Depletion and Amortization  170,197  285,596  260,493  538,942 
4.01.01.04  Income from Write-off and Disposal of Assets  15,733  15,733  1,357 
4.01.01.05  Income from Corporate Interest  (680,296) (986,754) (298,746) (742,665)
4.01.01.06  Gain and Loss in Percentage Variation 
4.01.01.07  Deferred Income and Social Contribution Taxes  176,991  115,282  (74,550) (8,056)
4.01.01.08  Provision for Swap/Forward Operations  4,320  9,264  475,366  12,451 
4.01.01.09  Provision for Actuarial Liability  (10,731) (21,283) (35,953) (71,616)
4.01.01.10  Monetary and Exchange Variation  (2,506,845) (2,852,695) (779,771) (643,248)
4.01.01.11  Provision for Contingencies  32,805  46,364  (5,117) 20,780 
4.01.01.12  Other Provisions  46,500  26,353  71,389  108,235 
4.01.02  Variation in Assets and Liabilities  876,936  440,060  277,187  176,774 
4.01.02.01  Accounts Receivable  71,307  81,953  (96,016) (108,834)
4.01.02.02  Inventories  135,839  185,276  (103,247) 121,728 
4.01.02.03  Receivables from Subsidiaries  1,103,355  997,520  292,055  223,807 
4.01.02.04  Taxes to Offset  (25,983) (93,257) (35,887) (22,233)
4.01.02.05  Prepaid Taxes  (371,589) (371,589)
4.01.02.06  Suppliers  (217,540) (325,674) 66,445  (104,672)
4.01.02.07  Salaries and Social Charges  17,679  10,372  23,564  18,293 
4.01.02.08  Taxes  305,251  374,633  356,529  192,261 
4.01.02.09  Accounts Payable - Subsidiaries  129,297  129,344  215,926  209,722 
4.01.02.10  Contingent Liabilities  7,308  19,957  88,099  160,219 
4.01.02.11  Financial Institutions – Interest Rates  (271,456) (591,097) (473,880) (618,897)
4.01.02.12  Financial Institutions - Swap  (4,278) (9,049)

10


1 - CODE  2 - DESCRIPTION  3 - 4/1/2009 to 6/30/2009  4 - 1/1/2009 to 6/30/2009  5 - 4/1/2008 to 6/30/2008  6 - 1/1/2008 to 6/30/2008 
4.01.02.13  Other  (2,254) 31,671  (56,401) 105,380 
4.01.03  Other 
4.02  Net Cash from Investment Activities  (1,630,093) (1,900,934) (514,852) (741,102)
4.02.01  Judicial Deposits  (710,936) (715,461) (9,565) (13,441)
4.02.02  Investments  (514,347) (624,337) (206,370) (206,370)
4.02.03  Property, Plant and Equipment  (404,810) (561,136) (279,728) (485,632)
4.02.04  Deferred Charges  (19,189) (35,659)
4.02.05  Deferred Charges 
4.03  Net Cash from Financing Activities  (1,635,051) (1,451,393) (570,184) (1,114,864)
4.03.01  Loans and Financing  542,676  1,028,879  829,757  1,234,098 
4.03.02  Receipt for share issue 
4.03.03  Debentures 
4.03.04  Financial Institutions – Principal  (409,638) (712,181) (85,257) (233,438)
4.03.05  Dividends and Interest on Shareholders’ Equity  (1,768,089) (1,768,091) (1,314,684) (2,115,524)
4.04  Foreign Exchange Variation on Cash and Cash Equivalents 
4.05  Increase (Decrease) in Cash and Cash Equivalents  (3,692,007) (4,020,447) (12,758) (366,185)
4.05.01  Opening Balance of Cash and Cash Equivalents  7,063,239  7,391,679  391,688  745,115 
4.05.02  Closing Balance of Cash and Cash Equivalents  3,371,232  3,371,232  378,930  378,930 

11


05.01 – STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY FROM 4/1/2009 TO 6/30/2009 (in R$ thousand)

1 - CODE  2 – DESCRIPTION  3 – CAPITAL 
STOCK 
4 – CAPITAL
RESERVES 
5 –REVALUATION
 RESERVES 
6 – PROFIT
RESERVES 
7 – RETAINED
EARNINGS/
ACCUMULATED
LOSSES 
8 –EQUITY
VALUATION
ADJUSTMENTS 
9 - TOTAL
SHAREHOLDERS'
EQUITY 
5.01  Opening Balance  1,680,947  30  3,768,756  230,332  1,248,814  6,928,879 
5.02  Prior Year Adjustments 
5.03  Adjusted Balance  1,680,947  30  3,768,756  230,332  1,248,814  6,928,879 
5.04  Income/Loss for the Period  1,019,052  1,019,052 
5.05  Distributions  (110,017) (110,017)
5.05.01  Dividends  (110,017) (110,017)
5.05.02  Interest on Shareholders’ Equity 
5.05.03  Other Distributions 
5.06  Profit Reserve Realization 
5.07  Equity Valuation Adjustments  (847,402) (847,402)
5.07.01  Securities Adjustments 
5.07.02  Accumulated Translation Adjustments  (847,402) (847,402)
5.07.03  Business Combination Adjustments 
5.08  Increase/Reduction in Capital 
5.09  Recording/Realization of Capital Reserves 
5.10  Treasury Shares 
5.11  Other Capital Transactions 
5.12  Other 
5.12.01  Unrealized Income 
5.13  Closing Balance  1,680,947  30  3,768,756  1,139,367  401,412  6,990,512 

12


05.02 – STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY FROM 1/1/2009 TO 6/30/2009 (in R$ thousand)

1 - CODE  2 – DESCRIPTION  3 – CAPITAL
STOCK 
4 – CAPITAL
RESERVES 
5 –REVALUATION
RESERVES 
6 – PROFIT
RESERVES 
7 – RETAINED
EARNINGS/
ACCUMULATED
LOSSES 
8 –EQUITY
VALUATION
ADJUSTMENTS 
9 - TOTAL
SHAREHOLDERS'
EQUITY 
5.01  Opening Balance  1,680,947  30  3,768,756  1,298,729  6,748,462 
5.02  Prior Year Adjustments 
5.03  Adjusted Balance  1,680,947  30  3,768,756  1,298,729  6,748,462 
5.04  Net Income/Loss for the Period  1,332,590  1,332,590 
5.05  Distributions  (193,223) (193,223)
5.05.01  Dividends 
5.05.02  Interest on Shareholders’ Equity  (193,223) (193,223)
5.05.03  Other Distributions 
5.06  Realization of Profit Reserves 
5.07  Equity Valuation Adjustments  (897,317) (897,317)
5.07.01  Securities Adjustments 
5.07.02  Accumulated Translation Adjustments  (897,317) (897,317)
5.07.03  Business Combination Adjustments 
5.08  Increase/Reduction in Capital Stock 
5.09  Recording/Realization of Capital Reserves 
5.10  Treasury Shares 
5.11  Other Capital Transactions 
5.12  Other 
5.13  Closing Balance  1,680,947  30  3,768,756  1,139,367  401,412  6,990,512 

13


08.01 – CONSOLIDATED BALANCE SHEET - ASSETS (in thousands of reais)

1- CODE  2 – DESCRIPTION  3 - 6/30/2009  4 -3/31/2009 
Total Assets  27,649,709  31,735,764 
1.01  Current Assets  13,528,284  17,806,200 
1.01.01  Cash and Cash Equivalents  182,004  295,815 
1.01.02  Receivable  2,617,068  2,566,416 
1.01.02.01  Clients  1,078,748  1,225,448 
1.01.02.01.01  Domestic Market  1,109,914  1,096,370 
1.01.02.01.02  Foreign Market  304,990  368,914 
1.01.02.01.03  Advance on Export Contracts (ACE) (58,548)
1.01.02.01.04  Allowance for Doubtful Accounts  (277,608) (239,836)
1.01.02.02  Sundry Receivable  1,538,320  1,340,968 
1.01.02.02.01  Employees  21,050  23,580 
1.01.02.02.03  Income and Social Contribution Taxes to Offset  79,314  71,326 
1.01.02.02.04  Deferred Income Tax  388,182  539,825 
1.01.02.02.05  Deferred Social Contribution  139,992  194,427 
1.01.02.02.06  Prepaid Income Tax  305,712  60,176 
1.01.02.02.07  Other Taxes  476,738  315,816 
1.01.02.02.08  Proposed Dividends Receivable  66,326 
1.01.02.02.09  Other Receivable  61,006  135,818 
1.01.03  Inventories  3,412,724  3,621,725 
1.01.04  Other  7,316,488  11,322,244 
1.01.04.01  Marketable Securities  5,898,877  8,860,907 
1.01.04.02  Prepaid Expenses  33,229  28,199 
1.01.04.05  Guarantee Margin of Financial Instruments  1,384,382  2,433,138 
1.02  Noncurrent Assets  14,121,425  13,929,564 
1.02.01  Long-Term Assets  3,053,173  3,082,429 
1.02.01.01  Sundry Receivables  1,381,293  1,379,881 
1.02.01.01.02  Securities Receivable  298,349  317,341 
1.02.01.01.03  Deferred Income Tax  608,024  585,831 
1.02.01.01.04  Deferred Social Contribution  205,814  198,663 
1.02.01.01.05  Other Taxes  269,106  278,046 
1.02.01.02  Receivable from Related Parties  479,120  479,120 
1.02.01.02.01  From Associated and Related Companies 
1.02.01.02.02  From Subsidiaries  479,120  479,120 
1.02.01.02.03  From Other Related Parties 
1.02.01.03  Other  1,192,760  1,223,428 
1.02.01.03.01  Judicial Deposits  779,768  757,818 
1.02.01.03.03  Prepaid Expenses  124,372  125,562 
1.02.01.03.04  Securities  23,152 
1.02.01.03.05  Other  288,620  316,896 
1.02.02  Permanent Assets  11,068,252  10,847,135 
1.02.02.01  Investments  1,127  1,326 

14


1- CODE  2- DESCRIPTION   3 - 6/30/2009  4 -3/31/2009 
1.02.02.01.01  Interest in Associated and Related Companies 
1.02.02.01.02  Interest in Subsidiaries 
1.02.02.01.03  Other Investments  1,127  1,326 
1.02.02.02  Property, Plant and Equipment  10,524,104  10,279,579 
1.02.02.02.01  In Operation, Net  8,792,643  8,052,296 
1.02.02.02.02  In Construction  1,597,818  2,095,282 
1.02.02.02.03  Land  133,643  132,001 
1.02.02.03  Intangible Assets  504,981  525,845 
1.02.02.04  Deferred Charges  38,040  40,385 

15


08.02 CONSOLIDATED BALANCE SHEET - LIABILITIES (in thousands of reais)

1 - CODE  2 - DESCRIPTION  3 - 6/30/2009  4 -3/31/2009 
Total Liabilities  27,649,709  31,735,764 
2.01  Current Liabilities  6,942,100  9,503,429 
2.01.01  Loans and Financing  2,906,818  3,101,098 
2.01.02  Debentures  35,279  22,163 
2.01.03  Suppliers  1,325,743  1,795,182 
2.01.04  Taxes, Fees and Contributions  1,106,517  701,668 
2.01.04.01  Salaries and Social Contributions  130,061  105,508 
2.01.04.02  Taxes Payable  714,121  339,563 
2.01.04.03  Deferred Income Tax 
2.01.04.04  Deferred Social Contribution 
2.01.04.05  Taxes Paid by Installments  262,335  256,597 
2.01.05  Dividends Payable  225,372  1,852,552 
2.01.06  Provisions  177,987  158,321 
2.01.06.01  Labor Contingencies  140,019  119,310 
2.01.06.02  Civil Contingencies  63,912  58,978 
2.01.06.04  Judicial Deposits  (82,247) (75,523)
2.01.06.05  Pension Fund Provision  56,303  55,556 
2.01.07  Debts with Related Parties 
2.01.08  Other  1,164,384  1,872,445 
2.01.08.01  Financial Instruments – Equity Swap  733,939  1,364,970 
2.01.08.02  Accounts payable – Subsidiaries  70,065  67,715 
2.01.08.03  Other  360,380  439,760 
2.02  Noncurrent Liabilities  13,780,068  15,324,744 
2.02.01  Long-Term Liabilities  13,780,068  15,324,744 
2.02.01.01  Loans and Financing  7,392,485  8,238,983 
2.02.01.02  Debentures  628,665  632,760 
2.02.01.03  Provisions  1,835,517  2,506,121 
2.02.01.03.01  Labor and Social Security Contingencies  83,458  75,280 
2.02.01.03.02  Civil Contingencies  17,355  16,875 
2.02.01.03.03  Tax Contingencies  3,722,687  3,670,933 
2.02.01.03.04  Environmental Contingencies  69,384  69,626 
2.02.01.03.05  Other Contingencies  57  128 
2.02.01.03.06  Judicial Deposits  (2,057,424) (1,326,721)
2.02.01.04  Debts with Related Parties 
2.02.01.05  Advance for Future Capital Increase 
2.02.01.06  Other  3,923,401  3,946,880 
2.02.01.06.03  Pension Fund Provision  44,563  53,761 
2.02.01.06.04  Taxes Paid by Installments  704,340  752,522 
2.02.01.06.05  Accounts Payable – Subsidiaries  2,936,373  2,897,924 
2.02.01.06.06  Other  238,125  242,673 
2.03  Deferred Income 

16


1 - CODE  2 - DESCRIPTION  3 - 6/30/2009  4 -3/31/2009 
2.04  Minority Interests 
2.05  Shareholders’ Equity  6,927,541  6,907,591 
2.05.01  Paid-In Capital  1,680,947  1,680,947 
2.05.02  Capital Reserves  30  30 
2.05.03  Revaluation Reserves 
2.05.03.01  Own Assets 
2.05.03.02  Subsidiaries/Associated and Related Companies 
2.05.04  Profit Reserves  3,705,786  3,747,467 
2.05.04.01  Legal  336,189  336,189 
2.05.04.02  Statutory 
2.05.04.03  For Contingencies 
2.05.04.04  Unrealized Income  2,493,493 
2.05.04.05  Profit Retention 
2.05.04.06  Special For Undistributed Dividends 
2.05.04.07  Other Profit Reserves  876,104  3,411,278 
2.05.04.07.01  Investments  1,658,114  4,151,608 
2.05.04.07.02  Treasury Shares  (719,042) (719,042)
2.05.04.07.03  Unrealized Income  (62,968) (21,288)
2.05.05  Equity Valuation Adjustments  401,412  1,172,239 
2.05.05.01  Securities Adjustments 
2.05.05.02  Accumulated Translation Adjustments  401,412  1,172,239 
2.05.05.03  Business Combination Adjustments 
2.05.06  Retained Earnings/Accumulated Losses  1,139,366  306,908 
2.05.07  Advance for Future Capital Increase 

17


09.01 CONSOLIDATED STATEMENT OF INCOME (in thousands of reais)

1 - CODE  2 - DESCRIPTION  3 - 4/1/2009 to 6/30/2009  4 - 1/1/2009 to 6/30/2009  5 - 4/1/2008 to 6/30/2008  6 - 1/1/2008 to 6/30/2008 
3.01  Gross Revenue from Sales and/or Services  3,286,842  6,479,230  4,615,183  8,567,064 
3.02  Deductions from Gross Revenue  (795,141) (1,543,546) (1,060,470) (1,982,126)
3.03  Net Revenue from Sales and/or Services  2,491,701  4,935,684  3,554,713  6,584,938 
3.04  Cost of Goods Sold and/or Services Rendered  (1,655,939) (3,298,024) (1,849,039) (3,655,789)
3.04.01  Depreciation and Amortization  (213,111) (369,593) (296,448) (608,335)
3.04.02  Other  (1,442,828) (2,928,431) (1,552,591) (3,047,454)
3.05  Gross Profit  835,762  1,637,660  1,705,674  2,929,149 
3.06  Operating Income/Expenses  (227,163) (575,325) (228,604) (486,364)
3.06.01  Selling expenses  (208,999) (384,518) (174,291) (335,613)
3.06.01.01  Depreciation and Amortization  (1,551) (2,966) (2,375) (4,641)
3.06.01.02  Other  (207,448) (381,552) (171,916) (330,972)
3.06.02  General and Administrative  (119,047) (227,764) (138,471) (242,909)
3.06.02.01  Depreciation and Amortization  (5,137) (12,171) (10,536) (21,624)
3.06.02.02  Other  (113,910) (215,593) (127,935) (221,285)
3.06.03  Financial  204,221  165,017  207,881  329,172 
3.06.03.01  Financial Income  493,844  868,082  521,579  852,935 
3.06.03.02  Financial Expenses  (289,623) (703,065) (313,698) (523,763)
3.06.03.02.01  Foreign Exchange and Monetary Variation, Net  311,660  363,246  279,804  404,199 
3.06.03.02.02  Financial Expenses  (601,283) (1,066,311) (593,502) (927,962)
3.06.04  Other Operating Income  53,339  143,777  49,912  60,432 
3.06.05  Other Operating Expenses  (156,669) (271,841) (115,905) (181,666)
3.06.06  Equity Pick-Up  (8) (57,730) (115,780)
3.07  Operating Income  608,599  1,062,335  1,477,070  2,442,785 

18


1 - CODE  2 - DESCRIPTION  3 - 4/1/2009 to 6/30/2009  4 - 1/1/2009 to 6/30/2009  5 - 4/1/2008 to 6/30/2008  6 - 1/1/2008 to 6/30/2008 
3.08  Non-Operating Income 
3.08.01  Income 
3.08.02  Expenses 
3.09  Income before Taxes/Profit Sharing  608,599  1,062,335  1,477,070  2,442,785 
3.10  Provision for Income and Social Contribution Taxes  (462,770) (577,423) (527,621) (654,619)
3.11  Deferred Income Tax  188,913  218,657  81,505  10,091 
3.11.01  Deferred Income Tax  139,585  161,445  56,744  4,896 
3.11.02  Deferred Social Contribution  49,328  57,212  24,761  5,195 
3.12  Statutory Profit Sharing/Contributions 
3.12.01  Profit Sharing 
3.12.02  Contributions 
3.13  Reversal of Interest on Shareholders’ Equity 
3.14  Minority Interest 
3.15  Income/Loss for the Period  334,742  703,569  1,030,954  1,798,257 
  OUTSTANDING SHARES, EX-TREASURY (in thousands) 758,670  758,670  769,470  769,470 
  EARNINGS PER SHARE (in reais) 0.44122  0.92737  1.33982  2.33701 
  LOSS PER SHARE (in reais)        

19


10.01 – CONSOLIDATED STATEMENT OF CASH FLOWSINDIRECT METHOD (in thousands of Reais)

1 - CODE  2 - DESCRIPTION  3 - 4/1/2009 to 6/30/2009  4 - 1/1/2009 to 6/30/2009  5 - 4/1/2008 to 6/30/2008  6 - 1/1/2008 to 6/30/2008 
4.01  Net Cash from Operating Activities  (1,509,337) (1,622,530) 1,088,991  1,628,538 
4.01.01  Cash Generated in the Operations  (281,733) 166,368  1,054,191  1,790,341 
4.01.01.01  Net Income for the Period  334,745  703,569  1,030,952  1,798,256 
4.01.01.02  Provision for Charges on Loans and Financing  254,805  547,077  154,870  316,866 
4.01.01.03  Depreciation, Depletion and Amortization  219,798  384,730  309,359  634,600 
4.01.01.04  Income from Write-Off and Disposal of Assets  8,831  9,047  (713) 8,067 
4.01.01.05  Income from Corporate Interest  57,707  115,757 
4.01.01.07  Deferred Income and Social Contribution Taxes  (188,913) (218,656) (81,505) (10,092)
4.01.01.08  Provision for Swap/Forward Operations  (209,725) (407,438) 150,356  (437,568)
4.01.01.09  Provision for Actuarial Liability  (10,731) (21,283) (35,953) (71,616)
4.01.01.10  Monetary and Exchange Variation  (702,798) (913,591) (543,540) (645,617)
4.01.01.11  Provision for Contingencies  25,392  53,497  1,020  30,744 
4.01.01.12  Other Provisions  (13,137) 29,416  11,638  50,944 
4.01.02  Variation in Assets and Liabilities  (1,227,604) (1,788,898) 34,800  (161,803)
4.01.02.01  Accounts Receivable  123,748  (35,974) (183,099) (198,879)
4.01.02.02  Inventories  163,371  103,322  (143,360) 94,430 
4.01.02.04  Taxes to Offset  (6,984) 52,134  (83,650) (54,081)
4.01.02.05  Suppliers  (106,368) (239,710) 152,838  (110,530)
4.01.02.06  Salaries and Social Charges  24,553  12,067  28,929  23,690 
4.01.02.07  Taxes  380,282  394,643  596,352  394,127 
4.01.02.08  Translation Exchange Effects  (1,114,852) (1,164,767)
4.01.02.09  Contingent Liabilities  8,978  21,709  53,142  124,001 
4.01.02.10  Financial Institutions – Interest Rates  (243,010) (468,236) (450,119) (649,555)
4.01.02.11  Financial Institutions – Swap Operations  (20,875) (55,333)
4.01.02.12  Prepaid Taxes  (397,463) (397,463)
4.01.02.13  Other  (38,984) (11,290) 63,767  214,994 
4.01.03  Other 

20


1 - CODE  2 - DESCRIPTION  3 – 4/1/2009 to 6/30/2009  4 - 1/1/2009 to 6/30/2009  5 - 4/1/2008 to 6/30/2008  6 - 1/1/2008 to 6/30/2008 
4.02  Net Cash from Investment Activities  (91,904) (281,191) (633,178) (1,012,336)
4.02.01  Realization of the Swap Operations  32,051  235,891 
4.02.02  Redemption – Equity Swap Margin of Guarantee  1,089,594  1,089,594 
4.02.03  Judicial Deposits  (712,810) (717,425) (9,401) (14,422)
4.02.04  Property, Plant and Equipment  (500,601) (887,950) (590,614) (948,242)
4.02.05  Deferred Charges  (33,163) (49,672)
4.02.06  Intangible Assets  (138) (1,301)
4.03  Net Cash from Financing Activities  (1,474,600) (1,239,511) (466,385) (1,303,565)
4.03.01  Loans and Financing  698,875  1,200,829  907,121  1,124,493 
4.03.04  Financial Institutions – Principal  (405,386) (672,249) (58,822) (312,534)
4.03.05  Dividends and Interest on Shareholders’ Equity  (1,768,089) (1,768,091) (1,314,684) (2,115,524)
4.04  Foreign Exchange Variation on Cash and Cash Equivalents 
4.05  Increase (Decrease) in Cash and Cash Equivalents  (3,075,841) (3,143,232) (10,572) (687,363)
4.05.01  Opening Balance of Cash and Cash Equivalents  9,156,722  9,224,113  1,690,562  2,367,353 
4.05.02  Closing Balance of Cash and Cash Equivalents  6,080,881  6,080,881  1,679,990  1,679,990 

21


11.01 – CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY FROM 4/1/2009 TO 6/30/2009 (in R$ thousand)

1 - CODE  2 – DESCRIPTION  3 – CAPITAL
STOCK 
4 – CAPITAL
RESERVES 
5 –REVALUATION
RESERVES 
6 – PROFIT
RESERVES 
7 – RETAINED
EARNINGS/
ACCUMULATED
LOSSES 
8 –EQUITY
VALUATION
ADJUSTMENTS 
9 - TOTAL
SHAREHOLDERS'
EQUITY 
5.01  Opening Balance  1,680,947  30  3,747,466  306,908  1,172,239  6,907,590 
5.02  Prior Year Adjustments 
5.03  Adjusted Balance  1,680,947  30  3,747,466  306,908  1,172,239  6,907,590 
5.04  Income/Loss for the Period  334,742  334,742 
5.05  Distributions  (110,017) (110,017)
5.05.01  Dividends 
5.05.02  Interest on Shareholders’ Equity  (110,017) (110,017)
5.05.03  Other Distributions 
5.06  Profit Reserve Realization 
5.07  Equity Valuation Adjustments  651,942  (770,827) (118,885)
5.07.01  Securities Adjustments 
5.07.02  Accumulated Translation Adjustments  651,942  (770,827) (118,885)
5.07.03  Business Combination Adjustments 
5.08  Increase/Reduction in Capital Stock 
5.09  Recording/Realization of Capital Reserves 
5.10  Treasury Shares 
5.11  Other Capital Transactions 
5.12  Other  (41,680) (44,209) (85,889)
5.12.01  Unrealized Income/Losses  (41,680) (44,209) (85,889)
5.13  Closing Balance  1,680,947  30  3,705,786  1,139,366  401,412  6,927,541 

22


11.02 – CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY FROM 1/1/2009 TO 6/30/2009 (in R$ thousand)

1 - CODE  2 – DESCRIPTION  3 – CAPITAL
STOCK 
4 – CAPITAL
RESERVES 
5 –REVALUATION
RESERVES 
6 – PROFIT
RESERVES 
7 – RETAINED
EARNINGS/
ACCUMULATED
LOSSES 
8 –EQUITY
VALUATION
ADJUSTMENTS 
9 - TOTAL
SHAREHOLDERS'
EQUITY 
5.01  Opening Balance  1,680,947  30  3,682,864  1,298,748  6,662,589 
5.02  Prior Year Adjustments 
5.03  Adjusted Balance  1,680,947  30  3,682,864  1,298,748  6,662,589 
5.04  Income/Loss for the Period  703,569  703,569 
5.05  Distributions  (193,223) (193,223)
5.05.01  Dividends 
5.05.02  Interest on Shareholders’ Equity  (193,223) (193,223)
5.05.03  Other Distributions 
5.06  Profit Reserve Realization 
5.07  Equity Valuation Adjustments  651,942  (897,336) (245,394)
5.07.01  Securities Adjustments 
5.07.02  Accumulated Translation Adjustments  651,942  (897,336) (245,394)
5.07.03  Business Combination Adjustments 
5.08  Increase/Reduction in Capital Stock 
5.09  Recording/Realization of Capital Reserves 
5.10  Treasury Shares 
5.11  Other Capital Transactions 
5.12  Other  22,922  (22,922)
5.12.01  Unrealized Income/Losses  22,922  (22,922)
5.13  Closing Balance  1,680,947  30  3,705,786  1,139,366  401,412  6,927,541 

23



     
                   00403-0  COMPANHIA SIDERÚRGICA NACIONAL  33.042.730/0001-04 
     
   
     
06.01 – NOTES TO THE FINANCIAL STATEMENTS 
   

(In thousands of Reais, unless otherwise stated)

1. OPERATIONS

The main activities of Companhia Siderúrgica Nacional (“CSN” or “Company”) are the production of flat steel products and its main industrial complex is the Presidente Vargas Steelworks (“UPV”) located in the city of Volta Redonda, State of Rio de Janeiro and iron ore production, where its main operation is developed in the city of Congonhas, state of Minas Gerais.

CSN is engaged in the mining of iron ore, limestone and dolomite in the branches in the State of Minas Gerais and tin in the State of Rondônia, by means of the subsidiary Estanho de Rondônia S.A. (“ERSA”), in order to meet the needs of UPV and the surplus raw materials are traded with subsidiaries and third parties. In order to provide greater synergy to the processes, the Company also maintains strategic investments in mining companies, railroad, electricity, and cement. In addition, the Company is establishing a long steel plant in Volta Redonda.

The Company, aiming to get closer to clients and exploit markets on a global level, has a steel distributor, metal packaging plants, in addition to a galvanized steel plant in the south and another in the southeast of Brazil to meet the demand of the home appliance and automotive industry, respectively. Abroad, the Company has a steel rolling mill in Portugal and another mill in the United States.

The Company’s shares are listed on the Stock Exchanges in Brazil (BOVESPA) and in the United States (NYSE).

2. PRESENTATION OF THE QUARTERLY INFORMATION

The individual (Company) and consolidated quarterly information was prepared in accordance with the accounting practices adopted in Brazil, based on the Brazilian Corporate Law, pronouncements issued by the Committee for Accounting Pronouncements – CPC and rules issued by the Brazilian Securities and Exchange Commission (“CVM”).

In compliance with Technical Pronouncement - CPC 02, approved by the CVM Resolution 534, the Company integrated the investments abroad which are not characterized as independent entities into the Parent Company’s quarterly information.

The Company, in order to enhance the disclosures to the market, presents the following supplementary information on the business segments, comprising the Parent Company and the consolidated financial information:

“A distinguishable component of the Company is a segment, goal of which is the manufacturing of products, the rendering of services, or the rendering of products and services within a particular economic environment, which is subject to risks and rewards that are different from other segments”.

24


The quarterly information includes the changes brought by Law 11,638/07 and Provisional Measure 449/08. The Company presents below a table with the effects related to the application of the new rules:

    06/30/08 
   
    Consolidated    Parent Company 
     
     Balance
disclosed at
 6/30/08 
  Adjustments of Law 11,638/07 and MP 449/08        Adjusted
   balance 
   Balance
disclosed at
 6/30/08 
  Adjustments of Law 11,638/07 and MP 449/08        Adjusted balance 
                     
                     
                     
                     
           
Shareholders' equity                                 
 Capital    1,680,947            1,680,947    1,680,947            1,680,947 
 Other    1,312,384    (297,759)   (2)   1,014,625    1,533,190    (417,748)   (2)   1,115,442 
Equity valuation adjustments                                 
 Investees foreign exchange variation        (457,794)   (9)   (457,794)       (457,794)   (9)   (457,794)
 Equity valuation adjustments                                 
   Reversal of revaluation reserve    4,438,093    (4,438,093)   (1)+(3)       4,438,093    (4,438,093)   (1)+(3)    
   Reversal of exchange rate variation - Intercompany pre-payment        229,430        229,430                 
   Reversal of intercompany loans variation        115,163        115,163                 
   Reversal of loan agreement exchange variation        44,092        44,092                 
Provision for deferred income and social contribution
taxes on equity valuation adjustments 
                               
      (142,784)   (8)   (142,784)                
Retained earnings (or accumulated losses)   1,798,258    424,651        2,222,909    1,686,495    840,878        2,527,373 
Reversal of realization of equity revaluation reserve        225,515        225,515    (135,547)   349,276        213,729 
 Reversal of income, social contribution taxes on portion of revaluation reserve        (76,757)       (76,757)       (72,750)       (72,750)
Deferred assets write-off related to 2007 balance        (22,302)   (6)   (22,302)       (22,302)   (6)   (22,302)
 Income for the year    1,798,258    298,195        2,096,453    1,822,042    586,654        2,408,697 
           
TOTAL SHAREHOLDERS' EQUITY    9,229,682    (4,523,094)       4,706,588    9,338,725    (4,472,757)       4,865,968 
                 
 
NET REVENUE    6,584,938            6,584,938    4,910,882            4,910,882 
 Cost of goods sold and services rendered    (3,655,790)   217,668    (2)   (3,438,122)   (2,728,452)   206,571    (2)   (2,521,881)
GROSS OPERATING REVENUE    2,929,148    217,668        3,146,816    2,182,430    206,571        2,389,001 
OPERATING REVENUES AND EXPENSES                                 
 Selling expenses    (335,612)   1,414    (2)   (334,198)   (223,930)   1,273    (2)   (222,657)
 General and administrative expenses    (242,909)   (26,436)   (2)   (269,345)   (158,515)   (11,586)   (2)   (170,101)
 Other operating expenses (revenues)   (237,013)   (29,587)   (2)+(5)   (266,600)   592,251    9,996    (2)+(5)   602,247 
 
OPERATING INCOME BEFORE FINANCIAL EFFECTS    2,113,614    163,059        2,276,673    2,392,236    206,254        2,598,490 
 Financial income and expenses    (81,995)           (81,995)   (657,243)   (84,847)       (742,090)
 Foreign exchange and monetary variations, net    411,166    69,109    (7)   480,275    632,501    537,998    (7)   1,170,499 
INCOME BEFORE INCOME AND SOCIAL                                 
   CONTRIBUTION TAXES    2,442,785    232,168        2,674,953    2,367,494    659,405        3,026,899 
 Current income and social contribution taxes    (654,619)   142,784        (511,835)   (553,508)           (553,508)
 Deferred income and social contribution taxes    10,092    (76,757)   (4)   (66,665)   8,056    (72,750)   (4)   (64,694)
           
NET INCOME FOR THE PERIOD    1,798,258    298,195        2,096,453    1,822,042    586,655        2,408,697 
                 

(1) Reversal of the revaluation
(2) Portion related to the reversal of the depreciation of the revaluation
(3) Income and social contribution tax reversal related to the revaluation
(4) Income and social contribution tax reversal related to the depreciation of the revaluation
(5) Write-off of revaluated assets
(6) Write-off of deferred assets referring to 2007 pursuant to law 11638
(7) Exchange rate variation of loans and financing from intercompany operations: Fixed rate notes, intercompany, prepayment and loan
(8) Income tax (IR) and social contribution on net income (CSLL) related to exchange rate variation of loans and financing from intercompany operations: Fixed rate notes, intercompany, prepayment and loan, revaluation depreciation.
(9) Equity valuation adjustment referring to equity pick-up effects.

3. MAIN ACCOUNTING PRACTICES

(a) Statement of income

The results of operations are recognized on the accrual basis and the revenue from the sales of products is recognized when the Company no longer controls or holds any responsibility for the property and all risks and rewards have been transferred to the buyer. Revenue from services rendered is recognized in proportion to the stage of completion of the service.

Revenue is not recognized if Management cannot measure its value precisely and if there is no significant certainty as to the realization of the economic benefit of the sale.

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(b) Current assets and noncurrent assets

Cash and cash equivalents

These are represented by immediate liquidity amounts, redeemable in up to 90 days from the balance sheet dates and with an insignificant risk of change in their market value. Financial assets included in this group are measured at fair value through the statement of income.

Trade accounts receivable

Trade accounts receivable are recorded at the invoiced amount, including the respective taxes and ancillary expenses and credits from clients in foreign currency are corrected at the exchange rate as of the date of the quarterly information. The allowance for doubtful accounts was recorded in an amount considered adequate to support possible losses and Management’s assessment takes into account the client’s history, the financial situation and the assessment of our legal advisors regarding the receipt of these credits for the recording of this provision.

Inventories

Inventories are stated at their average cost of acquisition or production and imports in transit are recorded at their cost of acquisition, not exceeding their market or realization values. Provisions for losses or obsolescence are recorded whenever Management considers it appropriate.

Investments

Investments in subsidiaries and jointly-owned subsidiaries are recorded using the equity method of accounting and recognized in the statement of income for the period as operating income (or expenses). Other investments are recorded and kept at cost.

When necessary, the accounting practices of the subsidiaries and jointly-owned subsidiaries are changed to ensure criteria consistency and uniformity with the practices adopted by the Company.

Accounting records of the dependent subsidiaries were consolidated to the parent Company’s quarterly statements, as established in the CPC Pronouncement 02.

Property, plant and equipment

These are recorded at acquisition, formation or construction cost. Depreciation is calculated through the straight-line method, based on the remaining economic useful lives of the assets, and depletion of the Casa de Pedra mine is calculated based on the quantity of iron ore extracted. Loans costs related to funds raised for specific construction in progress are capitalized until the constructions are concluded.

Law 11,638/07, MP 449/08 and pronouncement CPC 01 require that the recoverability valuation of all items comprising this subgroup be carried out and if there is evidence of loss, as no item should remain recorded under property, plant and equipment at an amount higher than its recoverable value, then there may be the need of the performance of a recoverability valuation of this asset. The Company evaluated its property, plant and equipment items and did not identify any loss to be recorded.

26


Intangible assets

Intangible assets comprise of assets acquired from third parties, including by means of business combinations, and/or those internally generated by the Company.

These assets are recorded at the acquisition or formation cost, less amortization calculated through the straight-line method based on exploration or recovery terms.

Intangible assets with indefinite useful lives, as well as goodwill for expected future profitability, will no longer be amortized as of January 1, 2009, and their recoverable value will be tested on a yearly basis, or whenever it is deemed necessary.

Deferred charges

The Company maintains in this group just the remaining balances of deferred pre-operating expenses, which will be amortized in accordance with the criteria prior to Law 11,638/07 due to the option offered by technical pronouncement CPC - 13 (Initial adoption of Law 11,638/07) and Provisional Measure 449/08.

Impairment

The recoverable value of intangible assets and deferred charges are tested on a yearly basis or, whenever significant events or changes in circumstances indicate the book value may not be recovered.

In order to test the recoverability of an individual asset or a group of assets, the Company analyzes supporting evidence that their book values will not be recoverable and, should these evidences be confirmed and the Company identifies an impairment possibility, Management compares the residual book value of this group of assets with their recoverable value and records them.

Other current and noncurrent assets

Stated at their realization value, including, when applicable, the yields earned up to the date of the quarterly information or, in the case of prepaid expenses, at cost.

(c) Current and noncurrent liabilities

These are stated at their known or calculable values, plus, when applicable, the corresponding charges and monetary and foreign exchange variations incurred up to the date of the quarterly information.

Employees’ benefits

In compliance with Resolution 371/00, issued by the CVM, the Company has been recording the respective actuarial liabilities as from January 1, 2002, in accordance with the aforementioned reported resolution and based on independent actuary studies, which are carried out annually .

Income and social contribution taxes

Income tax is calculated at rates of 15% plus an additional of 10% on taxable basis and social contribution on net income at a 9% rate on the taxable basis. In the calculation of taxes, the offsetting of the tax loss carryforward and negative basis of social contribution is also considered, and it is limited to 30% of the taxable income.

27


The deferred tax assets deriving from tax loss carry forwards and negative basis of social contribution on net income were recorded in compliance with the CVM Resolution 371/02 and took into consideration the history of profitability and the expectations of generating future taxable income, based on a technical study.

(d) Derivative financial instruments

The financial instrument balances, recorded in accordance with the CPCTechnical Pronouncement 14, which was approved by the CVM Resolution 565/08, are classified and recorded at fair value and gains and losses are recognized in the statement of income by accrual period.

(e) Other derivative financial instruments

The Company maintains a financial instrument called total return equity swap, purpose of which is to increase the return on financial assets. This instrument is recorded at fair value and gains and losses are recognized in the statement of income by accrual period.

The Company recorded this instrument in other accounts payable, and its margin of guarantee in other accounts receivable.

(f) Nonderivatives financial instruments

Financial instruments are initially recognized at fair value, whereas those financial instruments not classified at fair value are recognized plus the transaction costs that are directly attributable to them. Subsequently to the initial recognition the financial instruments are measured as follows:

Financial asset or liability measured at fair value through the income

A financial instrument is classified as measured at fair value through the income if it is held for trading. These instruments are measured at fair value and the subsequent fluctuation is recognized in the income for the period.

Loans and receivable

These are measured at the amortized cost and by using the effective interest rate method, less impairment loss.

(g) Treasury Shares

As established by the CVM Instruction 10 of February 14, 1980, shares held in treasury are recorded at cost of acquisition, and the market value of these shares is calculated based on the average stock exchange quotation on the last day of the period.

(h) Accounting Estimates

The preparation of the quarterly information, in accordance with the accounting practices adopted in Brazil, requires that Management uses its judgment in determining and recording the accounting estimates, such as: allowance for doubtful accounts, provision for inventory losses, provisions for labor, civil, tax, environmental and social security liabilities, depreciation, amortization, depletion, provision for impairment, deferred taxes, financial instruments and employees’ benefits. The settlement of the transactions involving these estimates may result in amounts different from those estimated, due to lack of precision inherent to the process of their determination. The Company periodically reviews the estimates and assumptions.

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4. CONSOLIDATED QUARTERLY INFORMATION

The accounting practices reflect the changes introduced by the new pronouncements and were treated uniformly in all the consolidated companies.

The consolidated quarterly information for the periods ended June 30, 2009 and March 31, 2009, include the following direct and indirect subsidiaries and jointly-owned subsidiaries:

    Ownership interest (%)    
 
Companies    6/30/2009    3/31/2009    Main activities 
       
Direct investment: full consolidation             
CSN Energy    100.00    100.00    Equity interest 
CSN Export    100.00    100.00    Financial operations, trading of products and equity interest 
CSN Overseas    100.00    100.00    Financial operations and equity interest 
CSN Panama    100.00    100.00    Financial operations and equity interest 
CSN Steel    100.00    100.00    Financial operations and equity interest 
Arame Corporation    100.00    100.00    Dorment Company 
TdBB S.A    100.00    100.00    Dorment Company 
International Charitable Corporation    100.00    100.00    Dorment Company 
GalvaSud    99.99    99.99    Steel industry 
Sepetiba Tecon    99.99    99.99    Maritime port services 
Minas Pelotização    99.99    99.99    Mining and equity interest 
CSN Aços Longos    99.99    99.99    Steel and/or metal products industry and trade 
Itaguaí Logística (*)   99.99    99.99    Logistics 
Estanho de Rondônia - ERSA    99.99    99.99    Mining 
Cia Metalic Nordeste    99.99    99.99    Packaging production 
Companhia Metalúrgica Prada    99.99    99.99    Packaging production 
CSN Cimentos    99.99    99.99    Cement production 
Inal Nordeste    99.99    99.99    Steel products service center 
CSN Gestão de Recursos Financeiros    99.99    99.99    Dorment Company 
Congonhas Minérios    99.99    99.99    Mining and equity interest 
CSN Energia    99.90    99.90    Electricity trading 
Direct investment: proportional consolidation             
Transnordestina Logística    81.60    84.50    Railroad transport 
Nacional Minérios    59.99    59.99    Mining and equity interest 
Itá Energética    48.75    48.75    Electricity generation 
MRS Logística    27.27    27.27    Railroad transport 
Indirect investment: full consolidation             
CSN Aceros    100.00    100.00    Equity interest 
CSN Cayman    100.00    100.00    Financial operations, trading of products and equity interest 
CSN Iron    100.00    100.00    Financial operations 
Companhia Siderúrgica Nacional LLC    100.00    100.00    Steel industry 
CSN Holdings Corp    100.00    100.00    Equity interest 
Companhia Siderúrgica Nacional Partner LLC    100.00    100.00    Equity interest 
Energy I    100.00    100.00    Equity interest 
CSN Madeira    100.00    100.00    Financial operations, trading of products and equity interest 
Cinnabar    100.00    100.00    Financial operations and equity interest 
Hickory    100.00    100.00    Financial operations and trading of products 
Lusosider Projectos Siderúrgicos    100.00    100.00    Equity interest 
CSN Acquisitions    100.00    100.00    Financial operations and equity interest 
CSN Finance (Netherlands)   100.00    100.00    Financial operations and equity interest 
CSN Finance    100.00    100.00    Financial operations and equity interest 
CSN Holdings    100.00    100.00    Financial operations and equity interest 
Itamambuca Participações    100.00    99.93    Mining and equity interest 
Lusosider Aços Planos    99.94    99.94    Steel industry and equity interest 
CSN Energia    0.10    0.10    Electricity trading 
Indirect investment: proportional consolidation             
NMSA Madeira    60.00    60.00    Equity interest and trading of products and mining 
Inversiones CSN Espanha    60.00    60.00    Financial operations and equity interest 
Pelotização Nacional    59.99    59.99    Mining and equity interest 
MG Minérios    59.99    59.99    Mining and equity interest 
MRS Logística    6.00    6.00    Railroad transport 

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(*) As of March 31, 2009, Itaguaí Logística was named Nacional Siderurgia.

The following consolidation procedures were adopted in the preparation of the consolidated quarterly information:

• Elimination of the balances of asset and liability accounts between consolidated companies;
• Elimination of the balances of investments and shareholders’ equity between consolidated companies;
• Elimination of balances of income and expenses and unrealized income deriving from consolidated intercompany transactions;
• Presentation of income and social contribution taxes on the unearned income as deferred taxes in the consolidated quarterly information; and
• Reclassification of exchange rate variations of monetary items with net foreign investment characteristics from financial income to shareholders’ equity.

Pursuant to the CVM Instruction 408 of August 18, 2004, the Company consolidates the quarterly information of the exclusive investment funds Diplic and Mugen.

The base date for the subsidiaries’ and jointly-owned subsidiaries’ quarterly information coincides with that of the Parent Company.

The reconciliation between shareholders’ equity and net income for the period of the Parent Company and consolidated is as follows:

    Shareholders' equity    Net income for the year 
     
    6/30/2009    3/31/2009    6/30/2009    6/30/2008 
         
Parent company    6,990,512    6,928,879    1,332,590    1,822,041 
Elimination of income in inventories    (72,432)   (49,209)   13,460    (23,784)
Exchange rate variation adjustments- CPC02            (651,942)    
Other adjustments    9,461    27,921    9,461     
         
Consolidated    6,927,541    6,907,591    703,569    1,798,257 
         

Additionally, subsidiaries abroad which are not characterized as independent entities were included in the parent company’s quarterly information, pursuant to technical pronouncement CPC - 02, approved by the CVM Resolution 534/08:

    Ownership interest (%)    
     
Companies    6/30/2009    3/31/2009    Main activities 
       
Branches             
CSN Islands VII    100.00    100.00    Financial operations 
CSN Islands VIII    100.00    100.00    Financial operations 
CSN Islands IX    100.00    100.00    Financial operations 
CSN Islands X    100.00    100.00    Financial operations 
CSN Islands XI    100.00    100.00    Financial operations 
Tangua    100.00    100.00    Financial operations 
International Investment Fund    100.00    100.00    Equity interest 

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5. RELATED PARTIES TRANSACTIONS

a) Transactions with Parent Company

Vicunha Siderurgia S.A. is a holding company whose purpose is to hold interest in other companies. It is the Company’s main shareholder, with a 45.98% interest in the voting capital.

Vicunha Siderurgia’s corporate structure is as follows (unrevised information):

Rio Purus Participações S.A. – holds 60% of National Steel and 59.99% of Vicunha Steel S.A.
CFL Participações S.A. – holds 40% of National Steel and 39.99% of Vicunha Steel S.A.
National Steel – holds 33.04% of Vicunha Aços
Vicunha Steel – holds 66.96% of Vicunha Aços
Vicunha Aços – holds 99.99% of Vicunha Siderurgia

CSN recorded interest on shareholders’ equity for the period. In addition, the Company paid dividends and interest on shareholders’ equity for Vicunha Siderurgia in the amounts indicated in the table below, considering Vicunha Siderurgia percentage interest in CSN on the closing date of this quarterly information.

 Parent company    Proposed 
dividends 
  Proposed 
interest on 
shareholders'
 equity 
  Dividends 
paid in the 
period 
  Interest on 
shareholders' 
equity paid in 
the period 
         
Total at 6/30/2009        88,850         689,747    123,421 
         
Total at 3/31/2009        38,261         
         
Total at 12/31/2008     689,947    123,421         938,223    93,210 
         

b) Transactions with jointly-owned subsidiaries

The Company holds interest in jointly-owned subsidiaries in the strategic areas of mining, logistics and power generation. The characteristics, goals and transactions with these companies are stated as follows:

Assets

Companies    Accounts 
receivable 
  Dividends 
receivable 
  Loans / current 
accounts(*)
  Advance for future 
capital increase 
  Total 
           
Nacional Minérios    75,927        1,238,946        1,314,873 
MRS Logística    717    50,147            50,864 
Transnordestina                37,138    37,138 
           
Total at 6/30/2009    76,644    50,147    1,238,946    37,138    1,402,875 
           
Total at 3/31/2009    89,094    193,230    1,216,197    89,958    1,588,479 
           

(*) Loan agreement of US$500,000 thousand, starting on January 28, 2009, maturing on January 31, 2012 and with semiannual interest rate of 12% p.a..

31


Liabilities and shareholders’ equity

    Liabilities    Shareholders' equity 
         
Companies    Advance from 
clients 
  Loans / Current 
accounts 
  Other    Total    Equity Valuation 
Adjustments - Effects 
  Total 
             
Nacional Minérios    7,516,096    3,628    1,687    7,521,411    6,059    6,059 
MRS Logística        2,142    72,948    75,090         
Itá Energética            11,715    11,715         
             
Total at 6/30/2009    7,516,096    5,770    86,350    7,608,216    6,059    6,059 
             
Total at 3/31/2009    7,414,098    2,142    138,594    7,554,834    49,301    49,301 
             

Namisa: The advance from clients with the jointly-owned subsidiary Nacional Minérios S.A. is related to the contractual obligation of iron ore supply and port services by CSN. The contract has a 12.5% p.a. interest rate and maturity forecast for June 2042.

The valuation adjustment effects refer to an investee abroad whose functional currency is different from the real.

MRS: in other accounts payable from MRS Logística we recorded the amount provisioned by CSN to cover take-or-pay contractual expenses related to the rail transportation contract, agreed upon normal price conditions practiced in this market.

Itasa: it is related to the electric power supply billed under normal market conditions of the Brazilian energy market, ruled by Electric Power Trade Chamber.

Income

         
    Revenues    Expenses 
         
Companies    Products and 
services 
  Interest and monetary 
and exchange variations 
  Total    Products and 
services 
  Interest    Total 
             
Nacional Minérios    178,549    53,092    231,641    52,166       444,074    496,240 
MRS Logística    104        104    213,306        213,306 
Itá Energética                70,139        70,139 
             
Total at 6/30/2009    178,653    53,092    231,745    335,611       444,074    779,685 
             
Total at 6/30/2008    47,108    7,795    54,903    291,510        291,510 
             

Nacional Minérios S.A. (“Namisa”)

Its main purpose is to extract and sell own and third-party iron ore. The main operations are developed in the cities of Congonhas, Ouro Preto, Itabirito and Rio Acima in the state of Minas Gerais, and in Itaguaí, state of Rio de Janeiro. CSN maintains iron ore supply and port service provision transactions, in addition to maintaining operations related to administrative, operating and financial support.

Transnordestina Logística S.A.

Its main purpose is to exploit the public rail cargo transportation service concession and the development in the Northeast Network. The Company does not maintain operating transactions with the subsidiary, and the operations between the parties are related to financial support to projects and operations of the subsidiary.

32


MRS Logística S.A.

Its purpose is to exploit and develop the public rail cargo transportation service in the Southeast Network, which serves the Rio de Janeiro-São Paulo-Belo Horizonte stretch. MRS provides rail cargo transportation services for the supply and outflow of the CSN raw materials and finished products.

Itá Energética S.A. – Itasa

Itasa holds an interest in the Itá Hydroelectric Power Plant consortium and the operations between the parties are related to contracting electric power supply for the CSN operations.

c) Transactions with subsidiaries and special purpose entities (exclusive investment funds)

Assets

   
    Accounts                     
    receivable    Marketable    Loans/current    Dividends    Advance for future     
Companies     (***)   securities (**)   accounts(*)   receivable    capital increase    Total 
             
Cinnabar            1,864,055            1,864,055 
CSN Madeira    355,944        422,790            778,734 
Exclusive investment funds        659,505                659,505 
CSN Cimentos    380        939            1,319 
CSN Export    275,616                    275,616 
CSN Aços Longos                    174,634    174,634 
Prada    81,062        2,517            83,579 
GalvaSud    57,790                    57,790 
NMSA Madeira    40,399                    40,399 
Inal Nordeste    12,049                    12,049 
CSN Energia                6,007        6,007 
Estanho Rondônia                4,958        4,958 
Cia. Metalic Nordeste    3,864                    3,864 
Sepetiba Tecon    197        455            652 
Aceros            49            49 
             
Total at 6/30/2009    827,301    659,505    2,290,805    10,965    174,634    3,963,210 
             
Total at 3/31/2009    947,024    1,651,767    2,692,767    115,314    436,157    5,843,029 
             

 

(*) Cinnabar – Contract in US$; interest ranging from 5.58% p.a. to 10.42% p.a.; final maturity in January 2015.
  CSN Madeira - Contract in US$; interest ranging from 9.50% to 10.88 % p.a.; final maturity in January 2015.
   
(**) Financial investments in exclusive investment funds managed by Banco Pactual are backed by Brazilian government bonds and have daily liquidity.
   
(***) Accounts receivable derive from sales operations of products and services among the parent company and the subsidiaries.

33


Liabilities

    Loans and financing    Accounts payable     
         
            Loans and             
        Fixed Rate    Intercompany    Loans (3) / current         
Companies    Pre-payment (1)   Notes(2)   Bonds (2)   accounts    Other    Total 
             
Cinnabar    1,588,375    731,761    142,782    299,700        2,762,618 
CSN Iron    95,228        1,187,706            1,282,934 
CSN Madeira    380,045        20,234    343,860        744,139 
CSN Export    678,611            11,639        690,250 
GalvaSud                    183,194    183,194 
Aceros                19,619        19,619 
Ersa                    5,235    5,235 
Other(*)                   1,005    1,005 
             
Total at 6/30/2009    2,742,259    731,761    1,350,722    674,818    189,434    5,688,994 
             
Total at 3/31/2009    3,295,684    843,006    1,632,472    814,568    6,711    6,592,441 
             

The conditions of the transactions with these subsidiaries are shown as follows:

(1) Contracts in US$ - CSN Export: interest from 4.00% to 7.43% p.a. with maturity in May 2015.
  Contracts 33in US$ - Cinnabar: interest from 7.00% to 10.0% p.a. with maturity in June 2018.
  Contracts in US$ - CSN Madeira: interest of 7.25% p.a. with maturity in September 2016.
  Contracts in US$ - CSN Iron: interest of 7.00% p.a. with maturity in January 2012.
   
(2) Contracts in US$ - CSN Iron: Intercompany Bonds: interest of 9.125% p.a. with maturity on June 1, 2047.
  Contracts in YEN - Cinnabar: interest of 1.5% p.a. with maturity on July 13, 2010.
  Contracts in R$ - Cinnabar (part): IGPM + 6% p.a. with indefinite maturity.
  Contracts in US$ - CSN Madeira (part): semiannual Libor + 2.5% p.a. with maturity on September 15, 2011.
   
(3) Contracts in US$ - CSN Madeira (part): semiannual Libor + 3% p.a. with indefinite maturity.
  Contracts in US$ - CSN Export: semiannual Euribor + 0.5% p.a. with indefinite maturity.
  Contracts in US$ - Cinnabar (part): semiannual Libor + 3% p.a. with indefinite maturity.
   
(*) Other: Metalic, Inal Nordeste, Inal, Prada, CSN LLC.

Shareholders’ equity – accumulated translation adjustments (Law 11,638/07)

   
    Investment         
    Exchange    Investments exchange     
Companies    variation    variation effects    Total 
       
CSN Steel    154,327    (18,848)   135,479 
Overseas    89,555        89,555 
Panama    97,669        97,669 
Energy I    76,654        76,654 
CSN Export    (4,005)       (4,005)
       
Total at 6/30/2009    414,200    (18,848)   395,352 
       
Total at 3/31/2009    1,232,746    (33,232)   1,199,514 
       

Accumulated translation adjustments refer to investees overseas whose functional currencies are different from the Brazilian Real.

34


Income

       
    Revenues    Expenses 
         
        Interest and        COGS /    Interest and     
    Products and    monetary and        Products and    monetary and     
Companies       services    exchange variations    Total    services    exchange variations    Total 
             
CSN Export    273,667    (24,638)   249,029    226,290    (102,947)   123,343 
CSN Iron                    (193,163)   (193,163)
Cinnabar        100,013    100,013        (509,427)   (509,427)
CSN Madeira    386,218    (44,444)   341,774    115,004    (131,148)   (16,144)
NMSA Madeira    47,146    (6,747)   40,399    9,660        9,660 
Prada    456,663        456,663    243,396        243,396 
Ersa                12,120        12,120 
CSN Cimentos    3,404        3,404    2,520        2,520 
Sepetiba Tecon    1,404        1,404    790        790 
GalvaSud    244,651        244,651    152,986        152,986 
Cia. Metalic Nordeste    40,688        40,688    23,181        23,181 
Inal Nordeste    22,982        22,982    10,818        10,818 
Exclusive investment funds        (111,555)   (111,555)            
             
Total at 6/30/2009    1,476,823    (87,371)   1,389,452    796,765    (936,684)   (139,920)
             
Total at 6/30/2008    1,396,839    (254,777)   1,142,062    739,758    (335,469)   404,289 
             

During the period, the subsidiary CSN Export S.à r.l.’s exported to the CSN’s subsidiaries, Lusosider in Portugal and CSN LLC in the United States, intermediated by third parties. These transactions and their effects were eliminated from the consolidated quarterly information.

d) Other related parties

CBS Previdência

The Company is the main sponsor of CBS Previdência, not-for-profit civil association set up in July 1960, whose main purpose is to pay supplementary benefits to those paid by social security. As the CBS Previdência sponsor, CSN maintains payment transactions of contributions and actuarial liability recognition ascertained in defined benefit plans.

Fundação CSN

CSN develops socially responsible policies currently focused on Fundação CSN, whose sponsor is the Company. Transactions between the parties are related to operating and financial support for Fundação CSN to develop social projects, mainly in the localities where CSN operates.

Banco Fibra

Banco Fibra is under the same control structure of Vicunha Siderurgia, and financial transactions with this bank are limited to transactions in checking accounts and financial investments in fixed income.

The balances of transactions between the Company and these entities are shown as follows:

35


Assets and Liabilities

    Assets    Liabilities 
         
    Bank checking                 
    accounts and        Actuarial    Other accounts     
 Companies    marketable securities    Total    liabilities    payable    Total 
           
CBS Previdência            96,285        96,285 
Fundação CSN    906    906        66    66 
Banco Fibra    13,721    13,721             
           
Total at 6/30/2009    14,627    14,627    96,285    66    96,351 
           
Total at 3/31/2009    54,743    54,743    107,017    57    107,074 
           

Income

    Income    Expenses 
         
    Monetary and exchange        Pension fund         
Companies    variation    Total    expenses    Other expenses    Total 
           
CBS Previdência    116    116    34,656    49    34,705 
Fundação CSN                1,467    1,467 
Banco Fibra    140    140             
           
Total at 6/30/2009    256    256    34,656    1,516    36,172 
           
Total at 6/30/2008            (2,189)   2,129    (60)
           

e) Key management personnel

Key management personnel are responsible for planning, directing and controlling the Company’s activities and include the members of the Board of Directors, statutory officers and other officers. The Company presents, in the table below, information on compensations and balances existing as of June 30, 2009.

    6/30/2009     3/31/2009    6/30/2009    6/30/2008 
         
    Assets    Liabilities    Assets    Liabilities    Income    Income 
           
Short-term benefits for employees and manangement        1,258        1,076    23,043    24,018 
Post-employment benefits                    82    80 
Other long-term benefits     n/a    n/a     n/a    n/a         
Benefits of labor agreement termination     n/a    n/a     n/a    n/a         
Share-based compensation     n/a    n/a     n/a    n/a         
             
        1,258        1,076    23,125    24,098 
             

n/a – Not applicable

36


6. CASH AND CASH EQUIVALENTS z

    Consolidated    Parent Company 
         
    6/30/2009    3/31/2009    6/30/2009    3/31/2009 
         
Current                 
   Cash and cash equivalents                 
   Cash and Banks    182,004    295,815    100,992    231,864 
 
   Marketable securities                 
    In Brazil:                 
             Exclusive investment funds            659,505    1,651,767 
             Brazilian government bonds    1,017,261    2,097,217         
             Fixed income and debentures    979,774    1,040,170    2,057    149,641 
         
    1,997,035    3,137,387    661,562    1,801,408 
         
     Abroad:                 
           Time Deposits    3,901,842    5,723,520    2,608,678    5,029,967 
         
Total Marketable securities    5,898,877    8,860,907    3,270,240    6,831,375 
         
Cash and Cash Equivalents    6,080,881    9,156,722    3,371,232    7,063,239 
         

The available financial funds in the Parent Company and subsidiaries established in Brazil are primarily invested in exclusive investment funds, whose cash is mostly invested in repurchase operations pegged to Brazilian government bonds, with immediate liquidity. Additionally, a significant portion of the financial funds of the Company and its subsidiaries abroad is invested in Time Deposits in first-tier banks.

The exclusive investment funds, managed by UBS Pactual Serviços Financeiros S.A DTVM, and its assets, are accountable for possible losses in investments and operations carried out. The Company may bear the fund’s operation fees (management, custody and audit fees) and it may also be called to back the shareholders’ equity in the event of losses resulting from interest rate, exchange rate or other financial asset variations.

37


7. ACCOUNTS RECEIVABLE

    Consolidated    Parent Company 
       
    6/30/2009    3/31/2009    6/30/2009    3/31/2009 
         
Domestic market                 
Subsidiaries            231,987    217,768 
Other clients    1,109,914    1,096,370    676,234    664,937 
         
    1,109,914    1,096,370    908,221    882,705 
Foreign market                 
Subsidiaries            671,958    818,351 
Other clients    304,990    368,914    11,141    13,567 
         
    304,990    368,914    683,099    831,918 
Advance on Export Contracts (ACE)   (58,548)       (58,548)    
Allowance for doubtful accounts    (277,608)   (239,836)   (222,652)   (182,147)
         
    1,078,748    1,225,448    1,310,120    1,532,476 
         

The Company also maintains other long-term accounts receivable, and among these assets 77% are debentures issued by Companhia Brasileira de Latas in 2002, in the amount of R$212,870. On June 30, 2009, the Company recorded a provision for total loss of these debentures.

8. INVENTORIES

    Consolidated    Parent Company 
         
    6/30/2009    3/31/2009    6/30/2009    3/31/2009 
         
Finished products    638,189    737,004    422,732    423,955 
Work in process    872,063    1,179,645    808,896    1,060,226 
Raw materials    749,614    700,232    476,923    380,978 
Supplies    732,973    729,512    622,245    615,071 
Advance to suppliers    382,352    288,647    316,574    261,674 
Provision for losses    (26,819)   (26,815)   (22,846)   (22,846)
Materials in transit    64,352    13,500    18,433    5,645 
         
    3,412,724    3,621,725    2,642,957    2,724,703 
         

9. DEFERRED INCOME AND SOCIAL CONTRIBUTION TAXES

(a) Deferred income and social contribution taxes

Deferred income and social contribution taxes are recognized in order to reflect future tax effects attributable to temporary differences between the tax base of assets, liabilities and the respective carrying value.

38


    Consolidated    Parent Company 
       
    6/30/2009    3/31/2009    6/30/2009    3/31/2009 
         
Current assets                 
Income tax    388,182    539,825    321,049    460,925 
Social contribution    139,992    194,427    115,739    165,855 
         
    528,174    734,252    436,788    626,780 
         
Long-term assets                 
Income tax    608,024    585,831    508,378    498,201 
Social contribution    205,814    198,663    169,699    166,875 
         
    813,838    784,494    678,077    665,076 
         
 
         
    6/30/2009    6/30/2008    6/30/2009    6/30/2008 
         
Income                 
Income tax    161,445    4,896     (84,021)   3,835 
Social contribution    57,212    5,195     (31,261)   4,221 
         
    218,657    10,091    (115,282)   8,056 
         

Pursuant to the CVM Instruction 371/02, some companies of the group, recorded tax credits on tax loss carryforwards and social contribution on a negative basis that are not subject to statute of limitations based on the expectations of future taxable income determined in technical valuation approved by the Management.

The book value of deferred tax assets is reviewed monthly and projections are reviewed annually, and are subject to any material aspects that might change realization projections. These studies indicate the realization of these companies’ tax assets within the term established by the CVM Instruction and within the 30% limit of the taxable income, fact which is shown as follows:

                6/30/2009 
   
    Consolidated    Parent Company 
     
    Corporate income tax    Social contribution    Corporate income tax    Social contribution 
Year    Tax loss    Negative basis    Tax loss    Negative basis 
         
2009    125,352    43,954    100,108    36,200 
2010    5,781    2,081         
2011    5,400    1,944         
2012    4,971    1,790         
2013    4,577    1,648         
2014    13,409    5,068         
         
Total    159,490    56,485    100,108    36,200 
         

(b) The sources of the deferred income and social contribution taxes of the Parent Company are shown as follows:

39


    6/30/2009    3/31/2009 
         
    Income tax    Social contribution    Income tax    Social contribution 
         
    Short-Term    Long-Term    Short-Term    Long-Term    Short-Term    Long-Term    Short-Term    Long-Term 
               
Assets                                 
Provisions for contingencies    47,597    327,709    17,135    117,975    40,964    317,262    14,747    114,214 
Provision for interest on shareholders’ equity    48,319        17,395        87,916        31,650     
Provision for payment of private pension plans    14,076    9,996    5,067    3,598    13,889    12,865    5,000    4,631 
Taxes under litigation        24,450                23,775         
Tax credits – Income and social contribution taxes    100,108        36,200        206,349        74,207     
Other provisions    110,949    146,223    39,942    48,126    111,807    144,299    40,251    48,030 
                 
    321,049    508,378    115,739    169,699    460,925    498,201    165,855    166,875 
                 

(c) The reconciliation between the income and social contribution tax expenses and income of the parent company and consolidated, and the result of the rate on net income before Income tax (IR) and Social Contribution (CSLL) in force are shown as follows:

    Consolidated    Parent Company 
       
    6/30/2009    6/30/2008    6/30/2009    6/30/2008 
         
Income before income and social contribution taxes    1,062,335    2,442,785    1,866,576    2,367,493 
 Rate    34%    34%    34%    34% 
Income and social contribution taxes at the combined tax rate    (361,194)   (830,547)   (634,636)   (804,948)
Adjustments to reflect the effective tax rate:                 
 Benefit of Interest on shareholders’ equity – JCP    65,696    37,715    65,696    37,715 
 Equity income of subsidiaries at different rates or which are not taxable    209,321    171,933    335,496    221,982 
 Goodwill amortization        (38,635)       (2,029)
 Tax incentives    5,326    10,901    4,312    10,901 
 Effect deriving from the not taxed functional currency    (259,111)       (282,666)    
 Other permanent (additions) deductions    (18,804)   4,105    (22,188)   (9,073)
         
Income and social contribution taxes on net income for the period    (358,766)   (644,528)   (533,986)   (545,452)
         
Effective rate    34%    26%    29%    23% 

40


10. INVESTMENTS

a) Direct interest in subsidiaries and jointly-owned subsidiaries

    6/30/2009    3/31/2009 
     
Companies    Number of shares
(in units)
   %
Direct
interest 
  Net
income
 (loss)
for the period
  Shareholders'
 equity 
   %
Direct 
interest 
  Net
income
(loss)
for the period 
  Shareholders'
   equity 
 
  Common    Preferred             
                 
Steel                                 
Cia. Metalic Nordeste    87,868,185    4,424,971    99.99    (2,657)   92,713    99.99    1,249    95,370 
INAL Nordeste    43,985,567        99.99    (4,535)   40,273    99.99    (2,730)   38,808 
CSN Aços Longos    41,830,119        99.99        36,807    99.99        36,807 
GalvaSud    11,610,671,043        99.99    27,787    723,610    99.99    20,988    708,916 
CSN Steel    480,726,588        100.00    2,371    1,567,239    100.00    (52,235)   1,846,303 
CSN Overseas    7,173,411        100.00    24,945    1,092,350    100.00    (24,553)   1,268,328 
CSN Panama    4,240,032        100.00    99,404    733,071    100.00    3,093    763,275 
CSN Energy    3,675,319        100.00    360,533    902,655    100.00    177,507    684,822 
CSN Export    1,036,429        100.00    4,528    266,807    100.00    19,167    311,774 
Cia. Metalurgica Prada    3,155,036        100.00    5,209    567,252    100.00    (2,522)   625,552 
Logistics                                 
MRS Logística    188,332,667    151,667,313    27.27    131,570    1,782,694    27.27    99,906    1,651,733 
Transnordestina Logística    550,722,199    45,513,333    81.60    (10,246)   414,022    84.50    (5,197)   281,988 
Sepetiba Tecon    254,015,053        99.99    5,538    187,077    99.99    13,867    181,540 
Itaguaí Logística    1,000,000        99.99        998    99.99    (1)   998 
Energy                                 
Itá Energética    520,219,172        48.75    19,921    630,774    48.75    12,793    610,853 
CSN Energia    1,000        99.99    (923)   63,085    99.90    685    84,983 
Mining                                 
ERSA    34,236,307        99.99    (1,788)   18,069    99.99    (2,024)   20,499 
Congonhas Minérios    5,010,000        99.99    96    5,729    99.99    115    5,633 
Minas Pelotização    1,000,000        99.99        998    99.99    (1)   998 
Nacional Minérios    475,052,685        59.99    222,809    8,454,103    59.99    209,605    8,303,363 
Cement                                 
CSN Cimentos    722,113,330        99.99    (10,231)   329,324    99.99    (666)   63,882 

41


b) Investment breakdown

    3/31/2009                        6/30/2009 
     
Companies     Opening
balance of
investments 
  Additions (write-offs)   Equity pick-up and provision for losses     Closing balance of investments 
 
    Capital increase    Dividends    Adjustments foreign exchange variation CPC 02    Gain and loss in percentage variation    Other     
                 
Steel                                 
Cia Metalurgica Prada (1)   625,552                    (63,510)   5,210    567,252 
Cia. Metalic Nordeste    95,370                        (2,657)   92,713 
INAL Nordeste    38,808    6,000                    (4,535)   40,273 
CSN Aços Longos    36,807                            36,807 
GalvaSud (1)   708,916                    (13,090)   27,784    723,610 
CSN Steel (2)   1,846,303            (279,330)       (2,105)   2,371    1,567,239 
CSN Overseas    1,268,328            (200,923)           24,945    1,092,350 
CSN Panama    763,275            (129,608)           99,404    733,071 
CSN Energy    684,821            (142,699)           360,533    902,655 
CSN Export    311,774            (49,496)           4,529    266,807 
                 
    6,379,954    6,000        (802,056)       (78,705)   517,584    6,022,777 
Logistics                                 
MRS Logistica    450,252                        35,879    486,131 
Transnordestina Logística    238,279    114,973            (6,803)       (8,616)   337,833 
Sepetiba Tecon    181,540                        5,537    187,077 
Itaguaí Logística    998                            998 
                 
    871,069    114,973            (6,803)       32,800    1,012,039 
Energy                                 
Itá Energética    297,791                        9,711    307,502 
CSN Energia    84,983        (20,976)               (922)   63,085 
                 
    382,774        (20,976)               8,789    370,587 
Mining                                 
ERSA    20,499                        (2,430)   18,069 
Nacional Minérios (2)   4,982,018                    (43,244)   133,687    5,072,461 
Congonhas Minérios    5,633                        96    5,729 
Pelotização Nacional    998                            998 
                 
    5,009,148                    (43,244)   131,353    5,097,257 
Cement                                 
CSN Cimentos    63,882    275,672                    (10,230)   329,324 
                 
Total MEP    12,706,827    396,645    (20,976)   (802,056)   (6,803)   (121,949)   680,296    12,831,984 
                 
Other investments    31                            31 
                 
Total Investments    12,706,858    396,645    (20,976)   (802,056)   (6,803)   (121,949)   680,296    12,832,015 
                 

(1) Adjustments related to the goodwill on reverse merger pursuant to Provisional Measure 449/08.
(2) Other adjustments to subsidiaries according to the rules of CPC 02 – classified into shareholders’ equity under translation accumulated adjustments.

c) Additional Information on the main operating subsidiaries

• GALVASUD

Located in Porto Real, in the State of Rio de Janeiro, the Company has as its main corporate purpose all industrial, commercial and sales promotion activities related to: i) installation and operation of a steel products service center; ii) installation and operation of a hot-immersion galvanization line, iii) installation and operation of laser welding lines for the production of welded blanks destined for the automobile production; iv) just-in-time supply to the automotive industry; and v) promotion and sales of the products of the Company and of third parties, shareholders inclusively, to the automotive industry.

• INAL NORDESTE

Based in Camaçari, State of Bahia, the Company has as its main purpose to reprocess and distribute the CSN steel products, operating as a service and distribution center in the Northeast region of the country.

42


• COMPANHIA METALÚRGICA PRADA

Based in the city of São Paulo, Prada has branches in several states of the country and has as its main activities the rolled steel reprocessing and distribution, the manufacturing and trading of metallic products, manufacturing and trading of metallic packaging, as well as the import and export of these products.

On December 30, 2008, in order to achieve greater synergy, optimization of operations, cost reduction and, also, become more efficient, Prada incorporated the net assets of Indústria Nacional de Aços Laminados – INAL.

• CIA. METALIC NORDESTE

The Company, with its head office located in Maracanaú, State of Ceará, has as its main corporate purpose the manufacturing of metallic packaging destined to the beverage industry.

Its operation unit can be characterized as one of the world’s most modern ones and counts on two different production lines: the can production line, whose raw material is tin-coated steel, supplied by the parent company CSN, and the lid production line, whose raw material is aluminum.

Its production is mainly geared towards the Brazilian northern and northeastern markets, with the surplus production of lids sold abroad.

The subsidiary received an incentive from PROVIN – Incentive Program for the Companies’ Operations, established by the Government of the State of Ceará, main purpose of which is the promotion of the industrial development and job generation in the State.

• SEPETIBA TECON

Company whose objective is to exploit the No.1 Containers Terminal of the Itaguaí Port, located in Itaguaí, State of Rio de Janeiro. This terminal is linked to Presidente Vargas Steelworks by the Southeast railroad network, which is granted to MRS Logística.

Sepetiba Tecon was the winner of the auction that occurred on September 3, 1998 for the takeover of the terminal concession and this concession allows the exploitation of the aforementioned terminal for the term of 25 years, extendable for another term of 25 years.

• CSN ENERGIA

Its main purpose is distributing and trading the surplus electric power generated by CSN and by companies, consortiums or other entities in which Company holds an interest.

CSN Energia holds a balance receivable related to the electric power sales under the scope of the Electric Power Trade Chamber (“Câmara de Comercialização de Energia Elétrica”) – CCEE, in the amount of R$54,224 (R$54,224 as of March 31, 2009), which are due by concessionaires that present injunctions suspending the corresponding payments. Management understands that recording an allowance for doubtful accounts is not necessary in view of the judicial measures taken by the official entities of the sector.

• CSN CIMENTOS

Based in Volta Redonda, State of Rio de Janeiro, CSN Cimentos has the production and trading of cement as its main purpose. CSN Cimentos use as one of its raw material the blast furnace slag from the pig iron production of the Presidente Vargas Steelworks. The company started to operate on May 14, 2009 and its results are also related to remaining expenditures deriving from discontinued activities in 2002, when the Company name was FEM – Projetos, Construções e Montagens.

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• ESTANHO DE RONDÔNIA - ERSA

Ersa is a subsidiary based in the State of Rondônia, where it operates two units, one in the city of Itapuã do Oeste and the other in the city of Ariquemes.

The subsidiary’s mining operation for cassiterite (tin ore) is located in Itapuã do Oeste and the casting operation from which metallic tin is obtained, which is the raw material used in UPV for the production of tin plates, is located in Ariquemes.

d) Additional information on the main jointly-owned subsidiaries

The amounts of the balance sheet and of the statement of income of the companies whose control is shared are shown as follows. These amounts were consolidated in the Company’s quarterly information, in accordance with the interest described in item (a) of this note.

    6/30/2009    3/31/2009 
     
    NAMISA    TRANSNORDESTINA    MRS    ITASA    NAMISA   TRANSNORDESTINA   MRS    ITASA 
                 
Current assets    1,856,386    188,719    891,919    64,473    1,937,005    52,316    801,069    70,962 
Noncurrent assets    8,629,319    629,042    3,552,857    914,230    8,601,214    607,593    3,521,755    921,938 
 Long-term assets    7,377,204    40,591    673,503    5,151    7,298,256    39,905    635,549    5,057 
 Investments, property, plant and equipment and deferred charges    1,252,115    588,451    2,879,354    909,079    1,302,958    567,688    2,886,206    916,881 
                 
Total assets    10,485,705    817,761    4,444,776    978,703    10,538,219    659,909    4,322,824    992,900 
                 
 
Current liabilities    349,410    39,352    858,930    103,988    463,793    31,258    970,032    115,910 
Noncurrent liabilities    1,682,192    364,387    1,803,152    243,941    1,771,063    346,663    1,701,059    266,137 
Shareholders’ equity    8,454,103    414,022    1,782,694    630,774    8,303,363    281,988    1,651,733    610,853 
                 
Total liabilities and shareholders’ equity    10,485,705    817,761    4,444,776    978,703    10,538,219    659,909    4,322,824    992,900 
                 

    6/30/2009    6/30/2008 
     
    NAMISA   TRANSNORDESTINA    MRS    ITASA    NAMISA    TRANSNORDESTINA    MRS    ITASA 
                 
 
Net revenue    572,546    29,862    983,516    111,813    262,699    32,105    1,609,144    103,798 
 Cost of goods sold and services rendered    (393,565)   (29,034)   (573,851)   (32,163)   (184,362)   (30,186)   (998,846)   (26,130)
                 
Gross income (loss)   178,981    828    409,665    79,650    78,337    1,919    610,298    77,668 
 Operating revenues (expenses)    (91,053)   (4,797)   (54,656)   (19,553)   (71,145)   (5,456)   18,593    (25,614)
 Net financial income    518,195    (11,474)   (11,488)   (13,127)   33,202    (9,231)   (202,000)   (24,839)
                 
Income (loss) before income and social contribution taxes    606,123    (15,443)   343,521    46,970    40,394    (12,768)   426,891    27,215 
 Current and deferred income and social contribution taxes    (173,708)       (112,653)   (14,255)      (5,049)       (157,026)   (9,279)
                 
Net income (loss) for the period    432,415    (15,443)   230,868    32,715    35,345    (12,768)   269,865    17,936 
                 

• NACIONAL MINÉRIOS – NAMISA

Headquartered in Congonhas, state of Minas Gerais, NAMISA’s main purpose is the production, purchase and sale of iron ore. NAMISA sells its products mainly in the foreign market. NAMISA’s main operations are developed in the municipalities of Congonhas, Ouro Preto, Itabirito and Rio Acima, state of Minas Gerais, and in Itaguaí, state of Rio de Janeiro.

In December 2008, CSN sold 2,271,825 shares of the voting capital of Nacional Minérios S.A. (“NAMISA”) to Big Jump Energy Participações S.A. ("Big Jump"), whose shareholders are the companies Posco e Brazil Japan Iron One Corp, Itochu Corporation, JFE Steel Corporation, Sumitomo Metal Industries, Ltd., Kobe Steel, Ltd., Nisshin Steel Co., Ltd.. Subsequently to this sale, Big Jump subscribed new shares, paying in cash the total of US$3.041.473 thousand, corresponding to R$7,286,154 thousand, R$6,707,886 thousand of which were recorded as goodwill at the subscription of the shares.

Due to the new corporate structure of the jointly-owned subsidiary, in which Big Jump holds 40% and CSN 60% and, due to the shareholders’ agreement entered into between the parties, CSN consolidated NAMISA in a proportional manner.

44


• TRANSNORDESTINA LOGÍSTICA

Transnordestina has as its main purpose the exploitation and development of the public rail cargo transport service for the Northeast network of Brazil.

Transnordestina entered into a concession agreement with the Federal Government on December 31, 1997 for a period of 30 years, extendable for another equal period. The agreement allows the development of the public service of exploitation of the northeast network which comprises seven States of the Federation in an extension of 4,534 km. The concession also comprises the lease of assets of Rede Ferroviária Federal S.A. (RFFSA) which serve this network and include, among others, constructions, permanent tracks, locomotives, railcars, vehicles, tracks and accessories.

• MRS LOGÍSTICA

The Company’s main purpose is to exploit, by onerous concession, the public rail cargo transport service in the right of way of the Southeast network, located in the stretch connecting Rio de Janeiro, São Paulo and Belo Horizonte, of Rede Ferroviária Federal S.A. - RFFSA, privatized on September 20, 1996. CSN paid in Namisa 10% of its interest in MRS, and decreased this direct interest from 32.93% to 22.93% .

In addition to this direct interest, the Company also holds an indirect interest of 6% through Nacional Minérios S.A. – Namisa, a proportionally consolidated company, and 4.3377% through International Investment Fund, which integrates the Company’s quarterly information as per the CPC Technical Pronouncement 02.

MRS may also exploit modal transportation services regarding the rail transport and take part in developments aiming at the extension of rail transport services granted.

To provide the services which are the purpose of the concession obtained for a 30-year period, as from December 1, 1996, and extendable for another equal period at the exclusive discretion of the grantor, MRS leased from RFFSA, for the same period of the concession, the assets necessary to operate and maintain rail cargo transportation activities.

• ITÁ ENERGÉTICA S.A. - ITASA

Itasa holds a 60.5% interest in the Itá Consortium, which was created for the exploitation of the Itá Hydroelectric Power Plant pursuant to the concession agreement of December 28, 1995, and its Addendum 1 dated July 31, 2000, entered into between the consortium holders (Itasa and Centrais Geradoras do Sul do Brasil - Gerasul, formerly called Tractebel Energia S.A.) and the Brazilian Agency for Electric Energy (ANEEL).

CSN holds 48.75% of the subscribed capital and the total amount of common shares issued by Itasa, a special purpose entity (SPE) originally established to make feasible the construction of the Itá Hydroelectric Power Plant, the contracting of the supply of goods and services necessary to carry out the venture and the obtainment of financing through the offering of the corresponding guarantees.

e) Additional information on indirect interests abroad

• COMPANHIA SIDERURGICA NACIONAL - LLC

Incorporated in 2001 with the assets and liabilities of the extinct Heartland Steel Inc., headquartered in Wilmington, State of Delaware – USA, it has an industrial plant in Terre Haute, State of Indiana – USA, where there is a complex comprising a cold rolling line, a hot pickling line for spools and a galvanization line. CSN LLC is a wholly-owned indirect subsidiary of CSN Panama.

45


• 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 sector to produce cold-re-rolled flat steel, with a corrosion-resistant coating. The company presents in Paio Pires an installed capacity of around 550 thousand tonnes/year to produce four large groups of steel products: galvanized plate, cold-rolled plate, pickled and oiled plate.

Products manufactured by Lusosider may be used in the packaging industry, civil construction (piping and metallic structures), and in home appliance components.

11. PROPERTY, PLANT AND EQUIPMENT

    Consolidated 
   
    Depreciation, depletion and amortization rate (p.a%)   Cost   Accumulated depreciation, depletion and amortization    Residual value 
   
          6/30/2009   3/31/2009
           
Machinery and equipment        7,527,337    (1,453,264)   6,074,073    5,672,918 
Mines and mineral deposits        5,332    (769)   4,563    4,703 
Buildings        1,524,441    (171,468)   1,352,973    1,019,935 
Furniture and fixtures        136,455    (113,158)   23,297    23,996 
Land        133,643        133,643    132,001 
Construction in progress        1,597,818        1,597,818    2,095,282 
Other assets        1,858,934    (521,197)   1,337,737    1,330,744 
           
        12,783,960    (2,259,856)   10,524,104    10,279,579 
           
    Parent Company 
                   
Machinery and equipment    8.78    6,172,269    (1,019,340)   5,152,929    4,876,675 
Mines and mineral deposits    0.05    2,323    (3)   2,320    2,320 
Buildings    3.56    778,705    (45,850)   732,855    540,087 
Furniture and fixtures    10.00    111,727    (95,364)   16,363    16,883 
Land        89,409        89,409    85,739 
Construction in progress        982,641        982,641    1,210,999 
Other assets    20.00    255,684    (76,334)   179,350    176,815 
           
        8,392,758    (1,236,891)   7,155,867    6,909,518 
           

The loan costs that were capitalized in the Parent Company amounted to R$29,003 (R$20,559 in the first half-year of 2008) and R$31,668 (R$22,328 in the first half-year of 2008) in the consolidated. These costs are determined on the financing contracts for the mining, cement and long steel projects.

The Company analyzed the circumstances to verify if there was a possibility of impairment, and based on the analyses performed it did not identify any evidence that the residual book value of the assets or groups of assets was recorded at a value higher than the recovery value, in accordance with its the cash generating units.

As of June 30, 2009, the assets provided as collateral for financial operations totaled R$47,985 (R$47,985 as of March 31, 2009).

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12. INTANGIBLE ASSETS

    Consolidated 
   
    Useful life terms   Amortization annual rates %   Cost    Accumulated amortization    Residual value 
   
            6/30/2009    3/31/2009 
             
Software    05 years    20    47,939    (21,113)   26,826    25,801 
Goodwill from expected future profitability            793,379    (315,224)   478,155    500,044 
             
            841,318    (336,337)   504,981    525,845 
             

    Parent Company 
   
    Useful life terms    Amortization annual rates %    Cost    Accumulated amortization    Residual value 
   
            6/30/2009    3/31/2009 
             
Software    05 years    20    20,129    (6,248)   13,881    12,893 
Goodwill from expected future profitability            283,529    (206,928)   76,601    23,137 
             
            303,658    (213,176)   90,482    36,030 
             

Software: This is valued at the cost of acquisition, less accumulated amortization and, when applicable, less impairment losses.

Goodwill: This refers to the goodwill effects of the subsidiaries Galvasud and Prada related to mergers performed by the Companies. The goodwill economic basis is the expected future profitability and, in accordance with the new pronouncements, these amounts are not amortized in the accounting as from January 1, 2009, when they started to be subject only to impairment tests.

    Balance at        Balance at     
Goodwill in investments:    3/31/2009    Additions/Write-offs    6/30/2009    Investor 
         
Parent Company                 
Ersa    23,137    (23,137)       CSN 
Subtotal - Parent Company    23,137    (23,137)        
CSN I    19,837        19,837    GalvaSud 
Inal    86,412        86,412    Prada 
CFM    347,118        347,118    Namisa 
Other    23,540    1,248    24,788     
         
Total - Consolidated    500,044    (21,889)   478,155     
         

In 2009, due to changes in circumstances indicating the loss of goodwill recoverability recorded under the expectation of future profitability, the Company recorded a goodwill impairment verified in the acquisition of Estanho de Rondônia S.A. - ERSA.

47


13. DEFERRED CHARGES

In compliance with Law 11,638/07 and the CPC Technical Pronouncement 13, the Company maintains a record of the remaining balance of deferred assets referring to pre-operating expenses recognized up to December 31, 2007.

These assets will be kept in the Company’s accounting up to their total amortization and/or write-off due to impairment. As of June 30, 2009, the balance of these assets was R$31,587 (R$33,183 as of March 31, 2009) in the Parent Company and R$38,040 (R$40,385 as of March 31, 2009) in the consolidated.

14. LOANS, FINANCING AND DEBENTURES

    Consolidated    Parent Company 
     
    Current liabilities    Noncurrent Liabilities    Current liabilities    Noncurrent Liabilities 
         
    6/30/2009    3/31/2009    6/30/2009    3/31/2009    6/30/2009    3/31/2009    6/30/2009    3/31/2009 
                 
FOREIGN CURRENCY                                 
Long-Term Loans                                 
 Advance on Export Contracts    1,920,560    2,192,845        242,182    1,920,560    2,192,845        242,182 
 Pre-payment    256,065    283,581    1,898,808    1,861,861    390,832    378,298    3,827,673    4,206,151 
 Perpetual Bonds    29,355    34,824    1,463,700    1,736,400    29,355    34,824    1,463,700    1,736,400 
 Fixed Rate Notes    42,728    60,204    1,854,020    2,199,440    53,736    104,870    3,754,340    4,428,800 
 Import Financing    78,580    124,606    159,640    204,372    65,725    82,180    73,839    94,369 
 BNDES/Finame    17,494    16,034    94,452    118,475    15,768    14,714    85,442    107,088 
 Other    225,523    247,894    153,042    126,989    91,008    93,896    91,654    13,544 
                 
    2,570,305    2,959,988    5,623,662    6,489,719    2,566,984    2,901,627    9,296,648    10,828,535 
                 
LOCAL CURRENCY                                 
Long-Term Loans                                 
 BNDES/Finame    250,749    198,784    1,568,658    1,561,980    161,135    126,796    941,338    984,207 
 Debentures    35,279    22,163    628,665    632,760    26,172    11,099    600,000    600,000 
 Pre-payment    1,604    5,332    100,000    100,000    1,604    5,332    100,000    100,000 
 Loan                        105,660         
 Other    21,187    35,773    89,776    89,308    6,395    6,899    3,849    4,200 
                 
    308,819    262,052    2,387,099    2,384,048    195,306    255,786    1,645,187    1,688,407 
                 
Total Loans and Financing    2,879,124    3,222,041    8,010,761    8,873,767    2,762,290    3,157,413    10,941,835    12,516,942 
                 
 
Derivatives    62,973    (98,779)   10,389    (2,024)   2,089    2,047         
                 
Total Loans, Financing and                                 
Derivatives    2,942,097    3,123,261    8,021,150    8,871,743    2,764,379    3,159,460    10,941,835    12,516,942 
                 

As of June 30, 2009, the principal of long-term loans, financing and debentures presents the following composition, by year of maturity:

    Consolidated    Parent Company 
     
2010    319,481    4.0%    1,105,744    10.1% 
2011    908,863    11.3%    941,008    8.6% 
2012    1,511,859    18.8%    1,517,840    13.9% 
2013    1,809,099    22.6%    1,899,638    17.4% 
2014    656,030    8.2%    869,240    7.9% 
After 2014    1,352,119    16.9%    3,144,666    28.7% 
Perpetual Bonds    1,463,699    18.2%    1,463,699    13.4% 
         
    8,021,150    100.0%    10,941,835    100.0% 
         

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Loans, financing and debentures are subject to interest, annual rates of which, as of June 30, 2009, are presented as follows:

    Consolidated    Parent Company 
     
    Local currency    Foreign currency    Local currency    Foreign currency 
         
Up to 7%    164,475    4,303,433        5,551,576 
From 7.1 to 9%    801,021    368,873    498,442    1,334,602 
From 9.1 to 11%    1,358,351    3,451,104    1,240,446    4,977,454 
Above 11%    251,451    58,251         
Derivatives        73,362        2,089 
Variable    120,620    12,306    101,605     
         
    2,695,918    8,267,329    1,840,493    11,865,721 
         
        10,963,247        13,706,214 
         

Percentage composition of total loans, financing and debentures, by currency/index of origin:

    Consolidated    Parent Company 
     
    6/30/2009    3/31/2009    6/30/2009    3/31/2009 
         
Local Currency                 
   CDI    7.36    6.65    5.31    4.57 
   IGPM    0.34    0.37        0.67 
   TJLP    16.64    14.71    8.04    7.09 
   IGP-DI    0.09    0.09    0.07    0.07 
   Other indexes    0.17    0.34       
         
    24.60    22.16    13.42    12.40 
         
Foreign Currency                 
   US dollar    74.75    78.60    81.22    82.21 
   Yen            5.34    5.38 
   Euro    0.08    0.08         
   Other currencies    0.57    (0.84)   0.02    0.01 
    75.40    77.84    86.58    87.60 
         
    100.00    100.00    100.00    100.00 
         

In July 2005, the Company issued perpetual bonds amounting to US$750 million through its subsidiary CSN Islands X Corp. These indefinite maturity bonds pay 9.5% p.a. and the Company has the right to settle the transaction at its face value after 5 years, on the maturity dates for the interest.

The guarantees provided for loans comprise fixed asset items, sureties, bank guarantees and securitization operations (exports), as shown in the following table and do not include the guarantees provided to subsidiaries and jointly-owned subsidiaries mentioned in Note 18.

    06/30/2009    03/31/2009 
     
Property, plant and equipment    47,985    47,985 
Personal guarantee    81,751    95,788 
Imports    57,524    80,761 
Securitizations (exports)   117,841    123,811 
     
    305,101    348,345 
     

49


The following tables show the amortization and funding in the current period:

Amortization 
 
Company    Description    Principal (million)   Payment date    Interest rate (p.a.)
         
CSN    BNDES    R$ 16    Feb / 2009    2.20% up to 3.20% 
CSN    Debentures    R$ 41    Feb / 2009    103.6% CDI (4th issue)
CSN    BNDES    R$ 5    Mar / 2009    2.20% up to 3.20% 
CSN    BNDES    R$ 28    Apr up to Jun / 2009    2.20% up to 3.20% 
CSN    Pre-payment of third parties    R$ 6    May / 2009    CDI 
CSN Cimentos    BNDES    R$ 2    May / 2009    2.70 and 3.20% 
         
Total amortization in R$        R$ 98         
         
 
Island IX    Fixed Rates Notes    US$39    Jan / 2009    9.50 and 10.5% 
CSN    BNDES    US$1    Jan / 2009    1.70% and 2.70% 
CSN    ACC    US$7    Jan / 2009    6.0% 
CSN    Pre-payment of third parties    US$2    Jan / 2009    5.65% and 6.43% 
CSN Export    Pre-payment of third parties    US$28    Feb / 2009    7.28% and 7.43% 
CSN    Loans from third parties    US$1    Feb / 2009    6.24% 
CSN    Pre-payment of third parties    US$10    Feb / 2009    5.19% and 5.81% 
CSN    Pre-payment of third parties    US$2    Mar / 2009    4.78% up to 6.04% 
CSN    ACC    US$21    Mar / 2009    3.25% 
CSN    Equipment import    US$1    Mar / 2009    5.00% up to 8.40% 
CSN    Pre-payment of third parties    US$2.5    Apr up to Jun / 2009    1.87% up to 5.65% 
CSN    ACC    US$126    Apr up to Jun / 2009    4.35% up to 8.00% 
CSN    BNDES    US$1.6    Apr up to Jun / 2009    1.7% and 2.7% 
CSN    Loans from third parties    US$3    Apr up to Jun / 2009    6.30% 
CSN    Equipment import    US$3    Apr up to Jun / 2009    6.3% up to 8.5% 
Island X    Fixed Rates Notes    US$18    Apr / 2009    9.50 and 10.5% 
CSN Export    Pre-payment of third parties    US$28    Apr / 2009    7.28% and 7.43% 
Island VIII    Fixed Rate Notes    US$27    Jun / 2009    9.75% 
Cinnabar    Loans from third parties    US$1    Apr / 2009    4.49% 
         
Total amortization in US$        US$322         
         

Funding 
 
Company    Description    Principal (million)   Issue    Term    Maturity    Interest rate (p.a.)
             
CSN Cimentos    BNDES    R$ 54    2/26/2009    5 years    2/17/2014    TJLP + 2.7% 
CSN    BNDES    R$ 90    2/26/2009    5 years    2/17/2014    TJLP + 2.7% 
CSN    BNDES    R$ 215    3/16/2009    18 years    12/15/2027    TJLP + 1.3% 
             
Funding in R$        $359                 
             
CSN Cimentos    BNDES    US$ 3    2/26/2009    5 years    4/15/2014    UM006 + 2.7% 
CSN    BNDES    US$ 24    2/26/2009    5 years    4/15/2014    UM006 + 2.7% to 3.2%
CSN    ACC    US$ 25    3/16/2009    1 year    3/5/2010    4.35% 
CSN    ACC    US$ 75    5/26/2009    6 months    11/17/2009    2.75% 
CSN    Pre-payment of third parties    US$ 200    6/17/2009    5 years    6/16/2014    5.06% 
             
Funding in US$        US$ 327                 
             

a) Loans and financing with certain financial institutions have limiting contractual clauses (covenants) that are common in financial contracts in general, which the Company has properly complied with as of June 30, 2009. Some of the main covenants are informed as follows:

50


In export and import financing operations:

“The Company must maintain all authorizations necessary to comply with the obligations established in the contract.”

“The Company undertakes to export in an amount sufficient to cover the principal and interest added value due on the respective payment dates.”

In financing obtained with the Brazilian Development Bank – BNDES

“The Company undertakes to prove the investment of own funds established in the project.”

“The Company undertakes not to promote acts or measures which may jeopardize or change the economic-financial equilibrium of the loan Beneficiary.”

Debenture issuances:

“The Company must immediately notify the Fiduciary Agent on the call for any general debenture holders’ meeting by the issuer.”

b) The Company and its subsidiaries also assume covenants which are specific to certain contracts, but usual in operations of the same nature, which had also been complied with as of June 30, 2009. As follows:

Covenants of the Company for Eurobonds issued by its subsidiaries:

“In foreign currency and debt operations represented by securities traded on stock exchanges outside Brazil, the Company must not constitute guarantees on its assets, except for those allowed in the operation agreements, without simultaneously guaranteeing the notes.”

Covenants applicable to the Company’s subsidiaries:

CSN Export S.à.r.l (Securitization): “CSN Export must not assume debts except for those established in the operation documentation and debts resulting from law and which do not have a materially adverse effect.”

On July 2, 2009, CSN (1) notified the creditors of 2003-1 series notes about its irrevocable intention of redeeming such notes in advance and payment occurred on August 5 and (2) started a consent solicitation process with creditors related to the 2004-1 and 2005-1 series notes of the Securitization program, in order to obtain therefrom consent or waiver in relation to the following matters: (i) include iron ore receivables in the Securitization program; (ii) flexible dates in early redemption of notes; (iii) change few exports coverage ratios provided for in the program; and (iv) disregard Accumulation Events occurred in the 21st and 23rd quarters of the program, for the purposes of an eventual identification of early amortization event. On August 5, 2009, the Bank of New York Mellon confirmed to have received the creditors consents for both series in sufficient amount to approve all the aforementioned matters.

CSN Islands X Corp. and CSN Islands IX Corp. (Eurobonds): “The issuer must not assume debts, except for those represented by the notes, or debts representing commissions, costs or indemnifications due in accordance with the established in the operation documentation.”

Transnordestina (BNDES financing): “Transnordestina commits not to change, without prior and express authorization of BNDES, its share control.”

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15. DEBENTURES

Fourth issue

As approved at the Board of Directors Meeting held on December 20, 2005 and ratified on April 24, 2006, the Company issued, on February 1, 2006, 60,000 non-convertible and unsecured debentures, in one single tranche, with a unit face value of R$10. These debentures were issued in the total issuance value of R$600,000. The credits from the negotiations with the financial institutions were received on May 3, 2006.

Compensation interest is applied on the face value of these debentures corresponding to 103.6% of the Clearing House for the Custody and Financial Settlement of Securities (Cetip) Interbank Deposit Certificate (CDI), and the maturity of the face value is scheduled for February 1, 2012, without early redemption option.

The deeds of this debenture issue contain restrictive contractual covenants, usual to this kind of operation, described as follows, which have been duly complied with by the Company:

a) Provision of information: the Company must provide to the trustee any information that the latter may reasonably require the former in up to ten business days counting from the date of the respective requirement;

b) Audit: the Company must submit, pursuant to the law, its accounts and balance sheets to examination by an independent audit firm registered with CVM; and

c) General Debenture holders’ Meeting: it must immediately notify the trustee on the call for any General Meeting by the Issuer.

16. FINANCIAL INSTRUMENTS

I – Derivatives

a) Policies for the use of hedging derivatives

The Company’s financial policy reflects the liquidity parameters, credit and market risk approved by the Audit Committee and Board of Directors. The use of derivative instruments, with the purpose of preventing interest rate and foreign exchange rate fluctuations from having a negative impact on the Company’s balance sheet and statement of income, should comply with these same parameters. Pursuant to the Company’s internal rules, this financial investment policy was approved and is managed by the financial department.

As a routine, the financial department presents and discusses, at the meetings of the Board of Executive Officers and Board of Directors, the Company’s financial positions. Pursuant to the Bylaws, significant amount operations require previous approval by the Company’s Management. The use of other derivative instruments is subject to prior approval by the Board of Directors. In this context, considering that equity instruments historically present higher yield than fixed income instruments, and with the purpose of reducing third party capital cost, the Company contracted a total return equity swap operation on ADRs of its own issuance (see Note 17).

In order to finance its activities, the Company often resorts to capital markets, either domestic or international ones, and due to the debt profile it seeks, part of the Company’s debt is pegged to foreign currency, mainly to the U.S. dollar, which motivates the Company to seek hedge for its indebtedness through derivative financial instruments.

In order to contract financial instruments derivatives with the purpose of hedge in compliance with the structure of internal controls, the Company adopts the following policies:

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• Continuous ascertainment of the exchange exposure, which occurs by means of the assessment of assets and liabilities exposed to foreign currency, within the following terms: (i) accounts receivable and payable in foreign currency; (ii) cash and cash equivalents and debt in foreign currency;

• presentation of the Company’s financial position and foreign exchange exposure, as a routine, at meetings of the Board of Executive Officers and of the Board of Directors which approve this hedging strategy; and

• contracting of hedge derivative operations only with first-tier banks.

The Company’s consolidated net exposure to the foreign exchange rate as of June 30, 2009 is shown as follows:

    Amounts in US$ thousand 
   
    6/30/2009 
   
Cash and cash equivalents abroad    2,016,517 
Guarantee (margin) surplus    333,288 
Accounts receivable - foreign market clients    98,023 
Advances to suppliers    134,891 
Other assets    315,920 
   
Total assets    2,898,639 
Loans and financing    (4,088,219)
Suppliers    (514,582)
Other liabilities    (31,728)
   
Total liabilities    (4,634,529)
Gross exposure    (1,735,890)
   
Notional value of contracted derivatives (*)   2,156,250 
 
Net exposure    420,360 
   

(*) Exchange swap and U.S. futures contracts.

The results obtained with these operations are in accordance with the policies and strategies defined by the Company’s Management.

b) Main risks resulting from the Company’s operations

• Exchange rate risk

Although most of the Company’s revenues are denominated in Brazilian Reais, as of June 30, 2009, R$8,193,967 or 75% of the Company’s consolidated loans and financing were denominated in foreign currency (R$9,449,708 or 79% as of March 31, 2009). As a result, the Company is subject to variations in exchange and interest rates and it manages the risk of the fluctuations in the amounts in Brazilian Reais that will be necessary to pay the obligations in foreign currency using a number of financial instruments, including cash invested in dollar and derivatives (derivative contracts without financial leverage, such as foreign currency put and call option), mainly swaps and futures contracts.

• Interest rate risk

The Company has short and long-term liabilities, indexed to floating interest rates and inflation indexes. Due to this exposure, the Company may maintain derivatives to manage these risks better.

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• Credit risk

The exposure to credit risk of financial institutions complies with the parameters established in the Company’s financial policy. The exposure to credit risk of our clients and suppliers complies with the parameters established by the Company’s credit policy.

Since part of the Companies’ funds is invested in Brazilian government bonds, there is also exposure to the Company’s credit risk.

In order to mitigate market risks, as foreign exchange and interest rate, the Company’s Management contracts operations with derivatives, as shown below:

Exchange swap transactions

Exchange swap transactions aim to protect its liabilities denominated in foreign currency against the depreciation of the Real. The Company carried out swaps of its U.S. dollar-denominated liabilities, in which the Company will receive the difference between the exchange variation observed in the period plus interest rate which ranges between 4.35% and 9.00% p.a., multiplied by the notional value (long position) and pays interest based on the Interbank Deposit Certificate – CDI, with rates ranging between 93% and 117.3% on the amount in Reais of the notional value on the date of the contracting (short position). The notional value of these swaps as of June 30, 2009, was US$823,000 thousand (US$343,000 thousand on March 31, 2009). The gains and losses from these contracts are directly related to exchange (dollar) and CDI fluctuations. These transactions are related to operations in the Brazilian over-the-counter market, primarily having first-tier financial institutions as counterparts, contracted within exclusive investment funds.

As of June 30, 2009, the position of these contracts is as follows:

a) Outstanding operations

    Notional value (US$ thousand)      Valuation - 2009     Valuation - 2008    Fair value (market) (R$thousand)   Amount payable or receivable 
      (R$ thousand)   (R$ thousand)     in the period (R$ thousand)
             
 Counterparts    2009    Operation maturity    2008    Operation  maturity    Long-termposition    Short-termposition    Long-term position    Short-term position    2009    2008    Amount receivable/ received    Amount payable/paid 
                         
Itau BBA    20,000    Jul-31-09    20,000    Jul-31-09    40,902    (35,042)   47,780    (33,220)   5,860    14,560        (8,700)
ABN Amro    95,000    Aug-14-09    95,000    Aug-14-09    194,576    (172,959)   226,869    (163,809)   21,617    63,060        (41,443)
ABN Amro    50,000    Aug-24-09    50,000    Aug-24-09    102,341    (90,136)   119,144    (85,309)   12,205    33,835        (21,630)
Itau BBA    60,000    Nov-16-09    60,000    Nov-16-09    124,554    (155,246)   143,655    (147,212)   (30,692)   (3,557)       (27,135)
Itau BBA    18,000    Nov-19-09    18,000    Nov-19-09    36,818    (43,428)   42,454    (41,106)   (6,610)   1,348        (7,958)
Santander    30,000    Nov-30-09    30,000    Nov-30-09    63,378    (80,660)   72,984    (76,845)   (17,282)   (3,861)       (13,421)
Itau BBA    25,000    Dec-11-09    25,000    Dec-11-09    52,064    (63,960)   59,894    (60,596)   (11,896)   (702)       (11,194)
Goldman Sachs    10,000    Dec-11-09    10,000    Dec-11-09    20,680    (25,295)   23,790    (23,836)   (4,615)   (47)       (4,568)
Itau BBA    10,000    Dec-11-09            25,037    (20,202)           4,835        4,835     
Santander    25,000    Mar-5-10            50,365    (59,433)           (9,068)           (9,068)
Santander    50,000    Jul-1-09            99,357    (97,976)           1,382        1,382     
Santander    50,000    Jul-1-09            97,986    (99,357)           (1,371)           (1,371)
Santander    50,000    Jul-1-09            97,976    (97,459)           518        518     
Santander    50,000    Jul-1-09            97,995    (97,584)           410        410     
Santander    15,000    Jul-1-09            29,399    (29,317)           82        82     
Santander    20,000    Jul-1-09            39,197    (38,969)           228        228     
Santander    15,000    Jul-1-09            29,398    (29,197)           201        201     
Itau BBA    10,000    Jul-1-09            19,600    (19,588)           12        12     
Santander    15,000    Jul-1-09            29,402    (29,367)           36        36     
Westlb    10,000    Jul-1-09            19,593    (19,553)           40        40     
Santander    50,000    Jul-1-09            98,021    (98,244)           (223)           (223)
Santander    50,000    Jul-1-09            98,043    (98,114)           (71)           (71)
Santander    10,000    Jul-1-09            19,597    (19,776)           (179)           (179)
Santander    20,000    Jul-1-09            39,202    (39,421)           (219)           (219)
Westlb    20,000    Jul-1-09            39,191    (39,562)           (370)           (370)
Westlb    20,000    Jul-1-09            39,197    (39,331)           (134)           (134)
Santander    25,000    Jul-1-09            48,994    (48,992)                    
                         
    823,000        308,000        1,652,864    (1,688,167)   736,570    (631,933)   (35,303)   104,636    7,745    (147,685)
                         

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b) Settled operations

        Notional value US$ thousand    Valuation - 2009 (R$ thousand)        Valuation - 2008 (R$ thousand)   Fair value (market) (R$ thousand)   Amount payable or receivable in the period (R$ thousand)
                       
Date of settlement     Counterparts    2009    2008    Long-term position    Short-term position    Long-term position    Short-term position    2009    2008    Amount receivable/ received    Amount payable/paid 
                       
Jan-2-09    Itau BBA    150,000    150,000    356,273    (296,669)   355,456    (296,518)   59,604    58,938    666     
Jan-2-09    Santander    5,000    5,000    11,707    (11,795)   11,680    (11,789)   (88)   (109)   21     
Jan-2-09    Santander    50,000    50,000    116,990    (117,951)   116,722    (117,891)   (961)   (1,169)   208     
Jan-2-09    Santander    47,000    47,000    110,039    (110,874)   109,787    (110,818)   (835)   (1,031)   196     
Jan-2-09    Itau BBA    400,000    400,000    934,883    (943,609)   932,738    (943,131)   (8,726)   (10,393)   1,667     
Jan-2-09    Itau BBA    50,000    50,000    116,902    (117,951)   116,633    (117,892)   (1,049)   (1,259)   210     
Jan-2-09    itau BBA    50,000    50,000    116,933    (117,951)   116,665    (117,892)   (1,018)   (1,227)   209     
Jan-2-09    itau BBA    50,000    50,000    116,881    (117,951)   116,613    (117,892)   (1,070)   (1,279)   209     
Jan-2-09    itau BBA    58,000    58,000    134,569    (135,644)   134,260    (135,575)   (1,075)   (1,315)   240     
Jan-2-09    itau BBA    50,000    50,000    118,277    (117,570)   118,006    (117,510)   707    496    211     
Jan-13-09(1)   ABN Amro    20,000    20,000    48,059    (37,412)   48,190    (37,261)   10,647    10,929        (282)
Jan-23-09(2)   Itau BBA    60,000    60,000    145,828    (100,378)   143,360    (99,570)   45,450    43,790    1,660     
Jan-23-09(6)   Santander    30,000    30,000    72,634    (71,874)   71,369    (71,230)   760    139    621     
Jan-23-09(6)   Santander    10,000    10,000    24,303    (24,160)   23,879    (23,938)   143    (59)   202     
Jan-27-09(3)   ABN Amro    30,000    30,000    71,715    (49,965)   71,650    (49,515)   21,750    22,135        (385)
Jan-26-09(4)   Santander    10,000    10,000    23,887    (17,136)   23,823    (16,989)   6,751    6,834        (83)
Jan-26-09(5)   Itau BBA    20,000    20,000    47,857    (34,834)   47,853    (34,399)   13,023    13,454        (431)
Jan-2-09(6)   Itau BBA    10,000    10,000    24,693    (24,340)   23,790    (23,807)   353    (17)   370     
Jan-2-09(6)   Goldman Sachs    20,000    20,000    49,549    (48,737)   47,579    (47,673)   812    (93)   905     
Jan-3-09(5)   Itau BBA    80,000    80,000    199,182    (140,520)   191,413    (137,598)   58,662    53,815    4,848     
Apr-20-09    Itau BBA    40,000    40,000    45,674    (49,386)   48,348    (47,719)   (3,712)   629        (4,341)
                       
        1,240,000    1,240,000    2,886,835    (2,686,707)   2,869,814    (2,676,607)   200,128    193,208    12,443    (5,522)
                       

(1) Early settlement – original maturity March 16, 2009
(2) Early settlement – original maturity July 24, 2009
(3) Early settlement – original maturity July 27, 2009
(4) Early settlement – original maturity August 03, 2009
(5) Early settlement – original maturity August 13, 2009
(6) Early settlement – original maturity December 11, 2009

The net position of the aforementioned contracts is recorded in loans and financing as loss in the amount of R$35,303 as of June 30, 2009 (gain of R$94,925 as of March 31, 2009) and its effects are recognized in the Company’s financial result as gain in the amount of R$133,018. The jointly-owned subsidiary MRS Logística has derivative (swap) operations which caused proportional losses to the Company’s interest, in the amount of R$39,795 in income, recognized in the consolidated balance sheet of CSN as of June 30, 2009.

Libor x CDI Swap transactions

The purpose of these transactions is to hedge liabilities indexed to US Dollar Libor from Brazilian interest rate fluctuations. The Company has basically executed swaps of its liabilities indexed to Libor, in which it receives interest of 1.25% p.a. on the notional value in dollar (long position) and pays 96% of the Interbank Deposit Certificate – CDI on the notional value in Reais on the date of the contracting (short position). The notional value of these swaps as of June 30, 2009 was US$150,000 thousand, hedging an export pre-payment operation in the same amount. The gains and losses from these contracts are directly related to exchange (dollar), Libor and CDI fluctuations. They are related to operations in the Brazilian over-the-counter market, in general, having first-tier financial institutions as counterparts.

55


As of June 30, 2009, the position of these contracts is as follows:

a) Outstanding operations

        Notional    Valuation - 2009 (R$ thousand)   Fair value    Amount payable or 
        value US$      (market) (R$    receivable in the period 
        thousand      thousand)   (R$ thousand)
               
Date of                         
maturity     Counterparts    2009    Long-term   Short-term    2009   Amount payable 
               
Aug-12-09    CSFB    150,000    255,209   (257,298)     (2,089)   (2,089)

b) Settled operations

        Notional value US$ thousand    Valuation - 2009 (R$ thousand)   Valuation - 2008 (R$ thousand)   Fair value (market) (R$ thousand)    
                         
Date of settlement     Counterparts    2009    2008    Long-term    Short-term    Long-term    Short-term    2009    2008    Amount paid 
                       
Feb-12-09    CSFB     150,000    150,000    257,290    (262,062)   256,524   (258,398)            (4,772)   (1,874)   (2,898)
May-12-09    CSFB     150,000        256,121    (260,398)                    (4,277)       (4,277)

The net position of the aforementioned contracts is recorded in loans and financing as loss in the amount of R$2,089 as of June 30, 2009 (loss of R$2,047 as of March 31, 2009) and its effects are recognized in the Company’s financial result as loss in the amount of R$9,264.

Real-U.S. Dollar Commercial Exchange Rate Futures Contract

It seeks to hedge foreign-denominated liabilities against the Real devaluation. The Company may buy or sell commercial U.S. dollar futures contracts on the Commodities and Futures Exchange (BM&F) to mitigate the foreign currency exposure of its US dollar-denominated liabilities. The specifications of the Real-U.S. dollar exchange rate futures contract, including detailed explanation on the contracts’ characteristics and calculation of daily adjustments, are published by BM&F and disclosed on its website (www.bmf.com.br). As of June 30, 2009, the Company had a long position in its exclusive investment fund of US$1,333,250 thousand. During the first quarter, the Company paid R$640,309 and received R$622,069 in adjustments, thus having a net result of R$18,238. Gains and losses from these contracts are directly related to the currency fluctuations.

As of June 30, 2009, the position of these operations is as follows:

    Notional value US$             
    thousand    Fair value    Amount payable or receivable in the period 
       
 Description    6/30/2009    6/30/2009    Amount received in R$    Amount paid in R$ 
         
Purchase commitment                 
Foreign currency (US Dollar*                 
AUG-09 BMF)   1,333,250    (10,702)   622,070    (640,308)

56


II – Methods and assumptions used to calculate and measure financial instruments - derivatives

Foreign exchange swap transactions, Libor x CDI swap transactions

The Company uses an exclusive fund for its foreign exchange swap operations. The fund’s manager, Banco UBS Pactual, calculates and discloses the market value of the fund assets (NAV – Net Asset Value) on a daily basis, using the following pricing methodology to ascertain the market value of the foreign exchange swap.

Dollar

Pricing Methodology

The first step in order to calculate the swap is to correct its notional financial value at the foreign exchange rate variation.


The second step consists of calculating which value the corrected notional value would have on the maturity date.


The third and last stage of the calculation is to carry the swap value on the maturity date to the calculation date.


Combining all steps in one single equation we would have the following:


57


Where:

FinSwapcalc    Swap’s financial value on calculation date 
FinNocSwap    Swap’s notional financial value (initial financial value)
FinNocSwapcorr    Swap’s notional financial value restated to calculation date 
FinSwapvcto    Swap’s estimated financial value on maturity 
PtaxVcalc    Sale PTAX800 on calculation date. Source: BC 
PtaxVini    Sale PTAX800 on initial swap date. Source: BC 
DCvcto.ini    Days elapsed between initial swap and maturity 
DCvcto.hoje    Days elapsed between initial swap and calculation date 
i    Swap’s remuneration rate 
tx    Current market foreign exchange coupon rate. Primary Source: BM&F 

The rates used for all swaps are the ones disclosed by BM&F. In their absence, or in situations of liquidity squeeze or systemic crisis situations, coupons of the government bonds of each of the respective indexes are used as a notion for calculation. In the absence of the rate for the specific vertex to be calculated, the BM&F interpolated rates are used.

The Libor x CDI swap was directly contracted by the Company and, therefore, its market value was calculated as follows:

• Long position (purchased): carried to future value by current Libor and discounted to present value by the prefixed US Dollar curve.

• Short position (sold): carried to future value of current CDI and discounted to present value by the prefixed Brazilian Real curve.

The data sources for the mark-to-market of these instruments are the following: BBA (British Bankers Association), BM&F, BOVESPA and CETIP, and all data were taken from Bloomberg.

III – Sensitivity analysis

For the following operations, based on the foreign exchange rate as of June 30, 2009 of R$1.9516 per US$1.00, adjustments to the swap contract amounts were estimated for three scenarios: scenario 1: rate of R$1.9706 per US$1.00; scenario 2: (25% devaluation) rate of R$1.4780 per US$1.00; scenario 3: (50% devaluation) rate of R$0.9853 per US$1.00.

58


                    6/30/2009 
     
            US$ Notional        Additional result 
    Risk    Scenario         value    Exchange rate               R$ 
           
 
Exchange Swap    U.S. Dollar devaluation    1*    823,000    1.9706    15,671 
              1.4780    (389,789)
              0.9853    (795,248)
 
Swap CDI vs. Libor    U.S. Dollar devaluation    1*    150,000    1.9706    2,856 
              1.4780    (71,043)
              0.9853    (144,942)
 
U.S. dollar futures    U.S. Dollar devaluation    1*    1,333,250    1.9706    25,386 
              1.4780    (631,453)
              0.9853    (1,288,292)
 
Consolidated exchange position    U.S. Dollar devaluation      420,360    1.9706    7,987 
              1.4780    (199,082)
              0.9853    (406,194)

(*) Source: U.S. Dollar futures closing rate as of August 2009 and June 30, 2009.

The scenarios of devaluation of the Real versus the Dollar would increase losses in the operations.

IV – Classification of financial instruments

            6/30/2009            3/31/2009 
         
                    Fair value     
        Fair value    Loans and receivables -        through    Loans and receivables - 
Consolidated - R$ thousand    Balances    through income    Effective interest rate    Balances    income    Effective interest rate 
             
Assets                         
Current assets                         
 Cash and cash equivalents    6,080,881    6,080,881        9,156,722    9,156,722     
 Net accounts receivable    1,082,175        1,082,175    1,225,448        1,225,448 
 Advances to suppliers    355,525        355,525    288,647        288,647 
 Guarantee (margin) of financial instruments    1,384,382    1,384,382        2,433,138    2,433,138     
Noncurrent assets                         
 Marketable securities                23,152    23,152     
 Other securities receivable    133,079        133,079    137,153        137,153 
Liabilities                         
Current liabilities                         
 Loans and financing    2,923,499        2,923,499    3,199,877        3,199,877 
 Debentures    7,895        7,895    22,163        22,163 
 Derivatives    52,271    52,271        (98,779)   (98,779)    
 Suppliers    1,265,861        1,265,861    1,795,182        1,795,182 
 Advances to clients    65,295        65,295    60,937        60,937 
 Salaries and social contribution    130,061        130,061    105,508        105,508 
 Equity swap financial instrument    733,939    733,939        1,364,970    1,364,970     
 Dividends, Interest on shareholders' equity and profit    256,646        256,646    1,928,950        1,928,950 
Noncurrent liabilities                         
 Loans and financing    7,382,096        7,382,096    8,241,007        8,241,007 
 Debentures    628,665        628,665    632,760        632,760 
 Derivatives    10,389    10,389        (2,024)   (2,024)    

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17. FINANCIAL INSTRUMENTS ASSOCIATED TO OTHER FINANCIAL ASSET PRICE FLUCTUATION RISKS

Total return equity swap contracts

The Company contracted a new total return equity swap operation on September 5, 2008, as presented below:

Issuance date    Agreement maturity date    Notional value (US$    Assets    Liabilities    Assets    Liabilities    Market value 
           
    thousand)   6/30/2009    6/30/2009    3/31/2009    3/31/2009    6/30/2009    3/31/2009 
                 
9/5/2008    9/10/2009    1,050,763    1,326,117    (2,060,055)   1,080,081    (2,445,051)   (733,938)   (1,364,970)

Despite this operation’s accumulated losses as from September 5, 2008 in the amount of R$733,938, in the first half-year of 2009 the operation generated a profit totaling R$854,005. Short position interest is paid quarterly and the first payment in the amount of R$31,055 was made on January 9, 2009, and the second in the amount of R$12,442, made on April 6, 2009.

Swap contract without cash, having as counterpart Banco Goldman Sachs International, is pegged to 29,684,400 American Depositary Receipts (“ADR”) of Companhia Siderúrgica Nacional (long position) and Libor of 3 months + spread of 0.75% p.a. (short position).

The gains and losses from this contract are directly related to foreign exchange fluctuations, the Company’s ADRs and Libor quotation. This instrument is recorded in other accounts payable in the balance sheet, and gains and loss, by accrual period, in the Company’s financial results.

This operation has deposit related to the guarantee margin with the counterpart and, as of June 30, 2009, this margin totaled US$709,358 remunerated daily at the FedFund rate. The guarantee margin is recorded in the other accounts receivables in the Company’s current assets.

I – Methods and assumptions used to calculate and measure financial instruments – derivatives

The market value pricing of the total return equity swap consists of the correction of the swap’s notional financial value, by having the 29,684,400 notional number of ADRs multiplied by the CSN ADR closing price (ticker: “SID”) on the New York Stock Exchange. We subtracted from this amount the opening notional value, corrected at the contractual interest rate and carried to the calculation date.

II – Sensitivity analysis

Based on the foreign exchange rate as of June 30, 2009 R$1.9516 per US$1.00 and on the ADR price of US$22.35 and, also, in compliance with the historical return correlation between these assets, adjustments to the derivative contract amounts were estimated for three dollar and ADR scenarios: scenario 1 - exchange rate of R$1.9706 per US$1.00 and the ADR quotation at US$25.00; scenario 2 – 25% additional depreciation in relation to the rate of June 30, 2009, with exchange rate of R$2.4395 per US$1.00 and the ADR quotation at US$16.76; and scenario 3 – 50% devaluation in relation to the rate of June 30, 2009, with exchange rate of R$2.9274 per US$1.00 and the ADR quotation at US$11.18.

For the total return equity swap, in addition to the foreign exchange rate variation scenarios above, we also used the variation scenarios of ADRs listed on NYSE.

The scenario 1 follows the perspective of a worldwide economic recovery and the expected growing appreciation of the quotations of the Company’s securities.

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                        6/30/2009 
   
                ADR Notional
value 
       
    Risk    Scenario    ADR Price      Exchange rate    Additional result R$ 
             
            22.35         29,684,400    1.9516     
Swap ADRs    ADR price decrease and dollar appreciation      25.00        1.9706    155,018 
          16.76        2.4395    (404,619)
          11.18         2.9274    (971,086)

18. SURETIES AND GUARANTEES

The Company has the following liabilities with its subsidiaries and jointly-owned subsidiaries, in the amount of R$3,918 million (R$4,535 million as of March 31, 2009), for guarantees provided:

    In million         
       
       Companies    Currency    6/30/2009    3/31/2009    Maturity    Conditions 
           
Transnordestina    R$    24.0    24.0    11/13/2009    BNDES loan guarantee 
Transnordestina    R$    20.0    20.0    11/15/2020    BNDES loan guarantee 
Transnordestina    R$    13.0    13.0    11/15/2015    BNDES loan guarantee 
Transnordestina    R$    23.0    23.0    4/1/2010    BNDES loan guarantee 
Transnordestina    R$    19.2    19.2    4/23/2010    BNDES loan guarantee 
Transnordestina    R$    18.0    18.0    9/18/2009    BNDES loan guarantee 
Transnordestina    R$    20.0    20.0    2/11/2010    BNDES loan guarantee 
Transnordestina    R$    5.0    5.0    5/26/2009    BNDES loan guarantee 
Transnordestina    R$    90.0    90.0    11/2/2009    BNDES loan guarantee 
Transnordestina    R$    6.5    6.5    1/11/2010    BNDES loan guarantee 
Transnordestina    R$    2.7    2.7    9/14/2009    BNDES loan guarantee 
Transnordestina    R$    45.0        5/21/2010    BNDES loan guarantee 
Transnordestina    R$    2.0        5/21/2010    BNDES loan guarantee 
CSN Cimentos S.A.    R$    27.0    27.0    Indefinite    To guarantee the Warrantee’s liability in the writ of summons, pledge, appraisal and registration 
CSN Cimentos S.A.    R$    7.9    7.9    Indefinite    To guarantee the Warrantee’s liability regarding Tax Foreclosure 
Prada    R$    0.8    0.8    Indefinite    To guarantee the Warrantee’s liability regarding Tax Foreclosure 
Prada    R$    2.8    2.8    Indefinite    To guarantee the Warrantee’s liability regarding Tax Foreclosure 
Prada    R$    0.2    0.2    Indefinite    To guarantee the Warrantee’s liability regarding ICMS 
Prada    R$    6.1    6.1    Indefinite    To guarantee the Warrantee’s liability regarding Tax Foreclosure filed by Paraná State 
Prada    R$    0.1    0.1    Indefinite    To guarantee the payment of the value discussed in the Tax Foreclosure Proceeding 2004.51.01.54.1327-8 
Prada    R$    0.1    0.1    Indefinite    To guarantee the payment of the value discussed in the Tax Foreclosure Proceeding 2004.61.09.007744-7 
Prada    R$    0.4    0.4    1/3/2012    To guarantee the Warrantee's liability regarding the purchase and sale of electric power 
Prada    R$    1.2        3/10/2010    To guarantee the Private Instrument of Termination and acknowledgment of indebtedness as of 9/9/2005 
Metalic    R$    0.9    0.9    Indefinite    To guarantee the Warrantee’s liability regarding the tax deficiency notices 2006.19291 and 2006.24557-7 to the Revenue Service of the Ceará State 
CSN Energia    R$    1.0    1.0    Indefinite    To guarantee the Warrantee’s liability regarding Tax Foreclosure 
Sepetiba Tecon    R$    5.0    5.0    6/1/2010    To guarantee the Warrantee’s liability in the rendering of guarantee agreement no. 181020518 
Sepetiba Tecon    R$    15.0    15.0    5/5/2011    Guarantee by CSN in the issue of export credit note 
 
Total in R$        356.9    308.7         
 
CSN Islands VIII    US$    550.0    550.0    12/16/2013    Guarantee in Bond issue 
CSN Islands IX    US$    400.0    400.0    1/15/2015    Guarantee in Bond issue 
CSN Islands X    US$    750.0    750.0    Perpetual    Guarantee in Bond issue 
Cinnabar    US$    20.0    20.0    10/29/2009    Guarantee in the Promissory Notes issue 
CSN Madeira    US$    76.8    76.8    8/21/2009    Guarantee in Import Loan 
Namisa    US$    20.0    20.0    12/31/2009    Guarantee in agreement for the rendering of external guarantee 
Aços Longos    US$    7.7    8.5    6/30/2009    Letter of Credit for equipment acquisition 
CSN Cimentos    US$    0.2    0.4    8/30/2009    Letter of Credit for equipment acquisition 
 
Total in US$        1,824.7    1,825.6         
 

19. TAXES PAID BY INSTALLMENTS

The parent company filed an action pleading the right to the presumed credit of Excise Tax (“IPI”) on the acquisition of exempt, immune inputs, not taxed or taxed at zero rate and, in May 2003, an injunction was obtained authorizing the use of the aforementioned credits, which it offset with other federal taxes. The Regional Federal Court of the 2nd Region, through the appeal filed by the Federal Government, revoked the aforementioned authorization and on August 27, 2007, the proceeding had an unfavorable decision. In view of this decision, the Company will pay the debit related to the offset taxes in 60 months.

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In 2008, jointly-owned subsidiary MRS Logística will pay the ICMS debit with the State of Minas Gerais in 120 installments.

The parent company and the jointly-owned subsidiary MRS Logística are regularly complying with the payment by installments and as of June 30, 2009, the position of these installments was the following:

    Consolidated    Parent Company 
       
    6/30/2009    3/31/2009    6/30/2009    3/31/2009 
       
Corporate Income tax (IRPJ)   266,171    280,430    266,171    280,430 
Social Contribution on Net Income (CSLL)   44,466    46,848    44,466    46,848 
Excise Tax (IPI)   209,356    220,506    209,356    220,506 
Social Integration Program (PIS)   41,162    43,367    41,162    43,367 
Contribution for Social Security Financing (COFINS)   222,345    234,257    222,345    234,257 
Value-added tax on sales and services (State of Minas Gerais) (ICMS)   183,175    183,711     
       
    966,675    1,009,119    783,500    825,408 
       
Current Liabilities    262,335    256,597    240,829    235,606 
Noncurrent Liabilities    704,340    752,522    542,671    589,802 

20. PROVISIONS AND JUDICIAL DEPOSITS

The Company is currently party, at the competent situations, to several proceedings involving actions and complaints of a number of issues. The breakdown of the amounts recorded as provisions and the respective judicial deposits related to those actions are shown as follows:

            06/30/2009            03/31/2009 
     
    Judicial
Deposits 
  Liabilities
provisioned 
  Net Provisions    Judicial
Deposits 
  Liabilities
provisioned 
  Net Provisions 
             
             
           
Current                         
Provisions:                         
 Labor    (49,285)   127,923    78,638    (46,312)   106,368    60,056 
 Civil    (25,357)   62,467    37,110    (22,559)   57,489    34,930 
             
Parent Company    (74,642)   190,390    115,748    (68,871)   163,857    94,986 
             
Consolidated    (82,247)   203,931    121,684    (75,523)   178,288    102,765 
             
Noncurrent                         
Provisions:                         
 Labor        26,678    26,678        20,804    20,804 
 Environmental    (208)   69,385    69,177    (208)   69,626    69,418 
 Tax        1,302    1,302        1,286    1,286 
             
    (208)   97,365    97,157    (208)   91,716    91,508 
Legal liabilities questioned in court:                         
 Tax                         
     IPI premium credit    (1,955,196)   2,221,432    266,236    (1,226,007)   2,191,915    965,908 
     CSLL credit on exports        1,204,097    1,204,097        1,182,178    1,182,178 
     SAT        78,225    78,225        71,602    71,602 
     Education Allowance    (33,121)   33,121        (33,121)   33,121     
     CIDE    (28,539)   29,112    573    (27,857)   27,857     
     Income tax / “Plano Verão”    (20,892)   20,892        (20,892)   20,892     
     Other provisions    (6,894)   113,465    106,571    (6,894)   111,414    104,520 
             
    (2,044,642)   3,700,344    1,655,702    (1,314,771)   3,638,979    2,324,208 
Parent Company    (2,044,850)   3,797,709    1,752,859    (1,314,979)   3,730,695    2,415,716 
             
Consolidated    (2,057,424)   3,892,941    1,835,517    (1,326,721)   3,832,842    2,506,121 
             
Total Parent Company    (2,119,492)   3,988,099    1,868,607    (1,383,850)   3,894,552    2,510,702 
             
Total Consolidated    (2,139,671)   4,096,872    1,957,201    (1,402,244)   4,011,130    2,608,886 
             

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The change in provisions for contingencies for the periods ended June 30, 2009 and March 31, 2009, are as follows:

                    Consolidated 
 
Nature    3/31/2009    Additions    Correction    Utilization    6/30/2009 
           
Civil    75,852    6,817    1,888    (3,290)   81,267 
Labor    164,658    18,570    14,927    (7,292)   190,863 
Tax    3,599,459    640    57,384    (12,964)   3,644,519 
Environmental    69,628    167    313    (723)   69,385 
Pension Plan    101,534        9,304        110,838 
           
Total    4,011,130    26,194    83,816    (24,269)   4,096,872 
           
                Parent Company 
 
Nature    3/31/2009    Additions    Correction    Utilization    6/30/2009 
           
Civil    57,489    6,816    1,249    (3,087)   62,467 
Labor    127,172    16,990    13,550    (3,111)   154,601 
Tax    3,568,664        54,758        3,623,422 
Environmental    69,625    167    313    (720)   69,385 
Pension Plan    71,602        6,622        78,224 
           
Total    3,894,552    23,973    76,492    (6,918)   3,988,099 
           

The provisions for civil, labor, tax, environmental and social security liabilities were estimated by the Company’s Management substantially based on the opinion of its legal counsel, and only the cases classified as risk of probable loss were recorded. Additionally, the provisions include tax liabilities arising from actions taken on the Company’s initiative, plus SELIC (Special Settlement and Custody System) interest.

The Company and its subsidiaries are defendants in other judicial and administrative proceedings (labor, civil and tax) in the approximate amount of R$5.7 billion, R$4.5 billion of which corresponds to tax proceedings, R$0.3 billion to civil actions and R$0.9 billion to labor and social security lawsuits. According to the Company’s legal counsel, these administrative and legal proceedings are assessed as possible risk of loss. These proceedings were not provided for in accordance with the Management’s judgment and with accounting practices adopted in Brazil.

a) Labor actions

As of June 30, 2009, the Company and its subsidiaries were defendant in 9,540 labor claims, with a provision in the amount of R$202,884 (R$164,658 on March 31, 2009). Most of the pleadings of the actions are related to joint and/or subsidiary liability, wage parity, additional allowances for unhealthy and hazardous activities, overtime and differences related to the 40% fine on FGTS (severance pay) resulting from the federal government’s economic plans and profit sharing differences in 1997 and 1999.

b) Civil actions

Among the civil judicial proceedings to which the Company and its subsidiaries are parties, there are mainly actions with indemnification request. Such proceedings, in general, arise from occupational accidents and diseases related to the Company’s industrial activities. A provision in the amount of R$81,267 as of June 30, 2009 (R$75,852 as of March 31, 2009) was recorded for proceedings involving these matters.

63


c) Environmental actions

As of June 30, 2009, the Company and its subsidiaries have a provision in the amount of R$69,385 (R$69,628 as of March 31, 2009) for use in expenses related to services for environmental investigation and recovery of areas potentially polluted within the Company’s plants in the States of Rio de Janeiro, Minas Gerais and Santa Catarina.

d) Tax proceedings

Income and Social Contribution Taxes

(i) The parent company claims the recognition of the financial-tax effects on the calculation of the income and social contribution taxes on net income, related to the 51.87% inflation write-down of the Consumer Price Index (IPC), which occurred in January and February 1989 (“Plano Verão”).

In 2004, the proceeding was concluded and a final and unappealable decision was reached, granting to CSN the right to apply the index of 42.72% (January 1989), from which the 12.15% already applied should be deducted. The use of the index of 10.14% (February 1989) was also granted. The proceeding is currently under expert accounting inspection.

CSN maintains a judicial deposit in the amount of R$338,611 as of June 30, 2009 (R$338,084 as of March 31, 2009) and a provision of R$20,892 (R$20,892 as of March 31, 2009), which represents the portion not recognized by the courts.

(ii) The parent company filed an action questioning the levying of Social Contribution on Net Income (CSLL) on export revenues, based on Constitutional Amendment 33/01 and in March 2004 the Company obtained an injunction authorizing the exclusion of these revenues from the aforementioned calculation basis, as well as the offsetting of the amounts paid as from 2001. The lower court decision was favorable and the decision made by a court of second instance, pronounced before the appeal filed by the Federal Government at the Regional Federal Court (TRF), judged this proceeding unfavorably for CSN. In view of these facts an Extraordinary Appeal was filed at the STF, which has not been judged yet. An injunction suspending the effects of the decision by the Regional Federal Court was obtained at the Federal Supreme Court (STF) until the judgment of the aforementioned Extraordinary Appeal. Up to June 30, 2009, the amount of suspended liability and the credits offset based on the aforementioned proceeding was R$1,204,097 (1,182,178 as of March 31, 2009), plus SELIC interest rate.

Contribution for intervention in the Economic Domain - CIDE

The parent company questions the legality of Law 10168/00, which established the payment of CIDE on the amounts paid, credited or remitted to beneficiaries not resident in Brazil, for royalties or remuneration purposes on supply contracts, technical assistance, trademark license agreement and exploitation of patents.

The parent company maintains judicial deposits and a provision in the amount of R$29,112 as of June 30, 2009 (R$27,857 as of March 31, 2009), which includes legal charges.

The lower court decision was unfavorable, which was ratified by the 2nd Regional Federal Court (TRF). Appeals for Clarification of Judgment were filed, which were rejected, and an Extraordinary Appeal was filed at STF, which is awaiting decision as to its admissibility.

Education Allowance

The parent company discussed the unconstitutionality of the education allowance and the possible recovery of the amounts paid in the period from January 5, 1989 to October 16, 1996. The proceeding was judged unfounded, and the Federal Regional Court maintained its unfavorable decision, which is final and unappealable.

64


In view of this fact, CSN attempted to pay the amount due, but FNDE and INSS did not reach an agreement about who should receive it. A fine was also demanded, but CSN did not agree.

CSN filed new proceedings questioning the above-mentioned facts and deposited in court the amounts due. In the first proceeding, the 1st level sentence judged partially favorable the CSN pleading, in which the Judge removed the amount of the fine, maintaining, however, the SELIC rate. The Company presented brief of respondent to the defendant’s appeal, and appealed concerning the SELIC rate.

The amount provided for and deposited in court as of June 30 and March 31, 2009 totals R$33,121.

Workers’ Compensation Insurance (SAT)

The parent company understands that it should pay the SAT at the rate of 1% in all of its establishments, and not 3%, as determined by the current legislation.

In addition to the aforementioned thesis, the Company also discussed the raise in SAT for purposes of Contribution to Special Retirement, whose rate was set at 6%, in accordance with the legislation, for employees who are exposed to harmful agents.

As for the first proceeding mentioned above, the lower court decision was unfavorable and the proceeding is under judgment in the 2nd Region of the Federal Regional Court. As for the second proceeding it ended up unfavorably for the Company, and the total amount due in this proceeding of R$33,077, which was deposited in court, was converted into revenue for the benefit of INSS.

The amount provided for as of June 30, 2009, totals R$78,225 (R$71,602 as March 31, 2009), which includes legal additions and is exclusively related to the process of rate difference from 1% to 3% for all establishments of the Company.

IPI premium credit on exports

The Brazilian tax laws allowed companies to recognize IPI premium credit until 1983, when the Brazilian government, through Executive act, cancelled these benefits, prohibiting companies to use these credits.

The parent company challenged the constitutionality of this act and filed a claim to obtain the right to use the IPI premium credit on exports from 1992 to 2002, once only laws enacted by the legislative branch may cancel or revoke benefits prepared by prior legislation.

In August 2003 the Company obtained a favorable lower court decision, authorizing the use of the credits aforementioned. The national treasury appealed against this decision and obtained a favorable decision, and the Company then filed a special and extraordinary appeal against this decision at the Superior Court of Justice and at the Federal Supreme Court, respectively, and is currently awaiting for decisions of these courts.

Between September 2006 and May 2007, the Treasury filed 5 tax foreclosures and 3 administrative proceedings against the Company requesting the payment in the amount of approximately R$3.9 billion as of June 30, 2009 related to the payment of taxes which were offset with IPI premium credits.

On August 29, 2007, CSN offered assets in lien represented by treasury shares in the amount of R$536 million. 25% of this amount will be replaced by judicial deposits in monthly installments performed up to December 31, 2007 and as these substitutions take place, it was requested that the equivalent amount in shares was released from the lien, at the share price determined at the closing price of the day prior to the deposit. The requirement is still pending decision.

The Parent Company maintains provisioned the amount of credits already offset, plus default charges up to June 30, 2009, which total R$2,221,432 (R$2,191,915 as of March 31, 2009). The difference between the total amount in litigation and the amount recorded as provision is part of the R$4.5 billion reported above as tax proceedings considered as possible loss.

65


As of June 30, 2009, CSN has judicial deposits for referred liabilities, in the amount of R$1,955,196 (R$1,226,007 as of March 31, 2009). During the quarter, part of blocked account ordered by the 6th Federal Tax Foreclosure Court of Rio de Janeiro Section was converted into judicial deposit, in the amount of R$704,516 (see Note 22).

In the middle of 2007, the Superior Court of Justice issued a contrary decision to another taxpayer denying the use of these credits. This decision is subject to revision by the Federal Supreme Court, which, in that event, is the highest court. The parent company observed that a number of other Brazilian companies are challenging in court the same prohibition and it has been monitoring their progress.

Other

The parent company also recorded provisions for proceedings related to Severance Pay (FGTS) - Supplementary Law 110, COFINS Law 10,833/03, PIS - Law 10,637/02 and PIS/COFINS - Manaus Free-Trade Zone, amount of which totaled R$114,767 as of June 30, 2009 (R$112,700 as of March 31, 2009), which includes legal accruals.

21. SHAREHOLDERS’ EQUITY

i.Paid-in capital stock

The Company’s fully subscribed and paid-in capital stock as of June 30, 2009 amounted to R$1,680,947 (R$1,680,947 as of March 31, 2009), split into 793,403,838 common book-entry shares, with no par value. Each share is entitled to one vote in the resolutions of the General Meeting.

ii.Authorized capital stock

The Company’s bylaws in force as of June 30, 2009, determine that the capital stock can be increased up to 1,200,000,000 shares, by decision of the Board of Directors.

iii.Legal reserve

Recorded at the proportion of 5% on the net income determined in each period, pursuant to Article 193 of Law 6,404/76. The Company reached the limit for recording the legal reserve, as determined by the current legislation.

iv.Treasury shares

The Board of Directors authorized several share repurchase programs, with the purpose of holding those shares in treasury for subsequent disposal and/or cancellation, which are shown as follows:

Board
authorization 
  Number of
 shares
authorized 
  Program term    Number of
shares
acquired 
  Shares cancellation    Average weighted
acquisition cost 
  Maximum and minimum
acquisition cost 
  Balance in
treasury 
             
             
               
12/21/2007    4,000,000    From 1/23/2008 to 2/27/2008 (1)           Not applicable    Not applicable     34,734,384 
3/20/2008    10,800,000(2)   Up to 4/28/2008            Not applicable    Not applicable     34,734,384 
5/6/2008    10,800,000    Up to 5/28/2008            Not applicable    Not applicable     34,734,384 
6/2/2008    10,800,000    Up to 6/26/2008            Not applicable    Not applicable     34,734,384 
6/27/2008    10,800,000    From 6/30/2008 to 7/29/2008            Not applicable    Not applicable     34,734,384 
8/1/2008    10,800,000    From 8/4/2008 to 8/27/2008            Not applicable    Not applicable     34,734,384 
9/26/2008    10,800,000    From 9/29/2008 to 10/29/2008    10,800,000(3)       29.40    24.99 and 41.85     45,534,384 
12/3/2008                (10,800,000)   Not applicable    Not applicable     34,734,384 
12/3/2008    9,720,000    From 12/4/2008 to 1/4/2009            Not applicable    Not applicable     34,734,384 
1/7/2009    9,720,000    From 1/8/2009 to 1/28/2009            Not applicable    Not applicable     34,734,384 
2/2/2009    9,720,000    From 2/3/2009 to 2/25/2009            Not applicable    Not applicable     34,734,384 

66


(1) The start of this program only occurred after the cancellation of shares approved at the Extraordinary General Meeting (AGE) of January 22, 2008.
(2) As from this share repurchase program the number of shares informed already reflects the split and cancellation of shares approved at the AGE of January 22, 2008.
(3) All shares acquired in this program were repurchased as from October 2008.

The Company did not acquire, sell or cancel treasury shares in the period.

As of June 30, 2009, the position of treasury shares was as follows:

Number of    Total amount                Share 
shares acquired    paid for the        Share unit cost        market value 
       
(in units)   shares    Minimum         Maximum    Average    at 6/30/2009 (*)
           
34,734,384    R$ 719,042    R$ 13.27         R$ 41.85    R$ 20.70    R$ 1,515,114 

(*)Average quote of shares on BOVESPA as of June 30, 2009 at the value of R$43.62 per share.

v. Shareholding structure

As of June 30, 2009, the Company’s shareholding structure was as follows:

    6/30/2009 
   
    Number of    Total % of    % excluding 
    Common Shares    shares    treasury shares 
       
Vicunha Siderurgia S.A.    348,859,995    43.97%    45.98% 
BNDESPAR    28,886,758    3.64%    3.81% 
Caixa Beneficente dos Empregados da CSN - CBS    35,490,867    4.47%    4.68% 
Sundry (ADR - NYSE)   190,859,245    24.06%    25.16% 
Other shareholders (approximately 10 thousand)   154,572,589    19.48%    20.37% 
       
    758,669,454    95.62%    100.00% 
Treasury shares    34,734,384    4.38%     
       
Total shares    793,403,838    100.00%     

vi. Investment policy and payment of interest on shareholders’ equity and dividends distribution

As of December 11, 2000, the CSN Board of Directors decided to adopt a profit distribution policy which will result in the full distribution of net income to its shareholders, in compliance with Law 6,404/76 amended by Law 9,457/97, provided that the following priorities are preserved, irrespective of their order: (i) business strategy; (ii) compliance with liabilities; (iii) execution of the necessary investments; and (iv) maintenance of the Company’s good financial standing.

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22. INTEREST ON SHAREHOLDERS’ EQUITY AND DIVIDENDS

Interest on shareholders’ equity

The calculation of interest on shareholders’ equity is based on the variation of the Long-Term Interest Rate (TJLP) on shareholders’ equity, limited to 50% of the income for the period before income tax or 50% of retained earnings and profit reserves, in which case the higher of the two limits may be used, pursuant to the legislation in force.

In compliance with the CVM Resolution 207, of December 31, 1996, and with tax rules, the Company opted to record the proposed interest on shareholders’ equity in the amount of R$193,332 in the half-year, corresponding to the remuneration of R$0.14501349 per share, as corresponding entry against the financial expenses account, and reverse it in the same account, and not presenting it in the statement of income and not generating effects on net income, except with respect to tax effects recognized in income and social contribution taxes. Management will propose that the amount of interest on shareholders’ equity be attributed to the mandatory minimum dividend.

Dividends

At the Board of Directors’ ordinary meeting held on March 24, 2009, shareholders approved the distribution of R$1,500,000 on a dividends basis, corresponding to R$1.977146 per share, available as from March 31, 2009. However, the Company received an order of the 6th Federal Tax Foreclosure Court of the Rio de Janeiro Section, determining the online blocking of R$799,372, resulting in the partial distribution of dividends in the amount of R$700,628. The Company took all legal measures necessary to release the blocked amounts, however, it was not successful and, aiming at complying with its legal obligations, on June 26, 2009 the Company paid the remaining balance, in the amount of R$799,372, referring to dividends approved on March 24, 2009. Management will continue taking all necessary measures to release the blocked amounts.

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23. NET REVENUES AND COST OF GOODS SOLD

                        Consolidated 
   
            6/30/2009            6/30/2008 
     
    Tonnes (thousand)
(unrevised)
  Net revenue    Cost of Goods
Sold 
  Tonnes (thousand)
(unrevised)
  Net revenue    Cost of
Goods Sold 
             
             
Steel products                         
Domestic market    1,354    2,991,118    (1,946,477)   2,218    4,333,341    (2,177,912)
Foreign market    236    391,845    (420,847)   501    847,900    (675,064)
             
    1,590    3,382,963    (2,367,324)   2,719    5,181,241    (2,852,976)
             
Mining products                         
Domestic market    1,434    40,400    (7,700)   2,294    119,887    (59,185)
Foreign market    8,323    975,454    (445,746)   6,089    584,213    (235,547)
           
    9,757    1,015,854    (453,446)   8,383    704,100    (294,732)
             
Other sales                         
Domestic market        527,060    (458,090)       660,288    (486,173)
Foreign market        9,807    (19,164)       39,309    (21,908)
             
        536,867    (477,254)       699,597    (508,081)
             
        4,935,684    (3,298,024)       6,584,938    (3,655,789)
             

    Parent Company 
   
            6/30/2009            6/30/2008 
     
    Tonnes (thousand)
(unrevised)
  Net revenue    Cost of Goods
Sold 
  Tonnes (thousand)
(unrevised)
  Net revenue    Cost of
Goods Sold 
             
             
             
Steel products                         
Domestic market    1,341    2,733,398    (1,918,482)   2,248    4,155,748    (2,215,415)
Foreign market    189    291,926    (261,714)   258    367,488    (289,585)
           
    1,530    3,025,324    (2,180,196)   2,506    4,523,236    (2,505,000)
             
Mining products                         
Domestic market    2,798    57,780    (20,096)   3,238    121,296    (41,205)
Foreign market    4,243    433,364    (184,294)   2,131    125,326    (88,826)
             
    7,041    491,144    (204,390)   5,369    246,622    (130,031)
             
Other sales                         
Domestic market        223,594    (167,931)       134,160    (88,032)
Foreign market        2,255    (6,225)       6,864    (5,389)
           
        225,849    (174,156)       141,024    (93,421)
             
        3,742,317    (2,558,742)       4,910,882    (2,728,452)
             

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24. FINANCIAL INCOME AND MONETARY AND FOREIGN EXCHANGE VARIATIONS, NET

        Consolidated    Parent Company 
     
    6/30/2009    6/30/2008    6/30/2009    6/30/2008 
         
Financial expenses:                 
Loans and financing - foreign currency    (288,973)   (223,188)   (234,814)   (104,307)
Loans and financing - domestic currency    (79,527)   (94,050)   (71,290)   (81,210)
Related parties    (178,576)       (615,265)   (89,267)
PIS/COFINS on other revenues    (625)   (1,026)   (625)   (1,026)
Interest, fines and tax delays    (196,193)   (222,931)   (173,135)   (153,977)
Losses from derivative instruments (*)   (200,316)   (355,457)   (9,264)   (63,657)
Other financial expenses    (122,101)   (31,310)   (111,531)   (23,398)
         
    (1,066,311)   (927,962)   (1,215,924)   (516,842)
         
Financial income:                 
Related parties    21,245    3,480    68,370    10,167 
Income on financial investments    103,109    49,172    7,564    (277,587)
Derivatives gains (*)   607,756    715,216        51,206 
Other income    135,972    85,067    110,743    75,813 
         
    868,082    852,935    186,677    (140,401)
         
Net financial result    (198,229)   (75,027)   (1,029,247)   (657,243)
         
 
Monetary variations:                 
- Gains    881    512    778    2,672 
- Losses    50,091    (34,941)   4,543    (38,825)
         
    50,972    (34,429)   5,321    (36,153)
         
Exchange variations:                 
- Gains    (174,585)   (66,669)   (195,022)   (36,192)
- Losses    240,608    712,501    1,423,634    704,846 
- Exchange variations with derivatives (*)   246,251    (207,204)        
         
    312,274    438,628    1,228,612    668,654 
         
Net monetary and exchange variations    363,246    404,199    1,233,933    632,501 
       
 
(*) Statement of income from derivative operations                 
 
Swap CDI x USD    (133,018)   (353,058)       (61,258)
Swap Libor x CDI    (9,264)   (2,399)   (9,264)   (2,399)
U.S. Dollar Futures    (18,238)            
Total return equity swap    854,006    508,012         
Other (MRS)   (39,795)            
         
    653,691    152,555    (9,264)   (63,657)
         

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25. OTHER OPERATING (EXPENSES) AND INCOME

    Consolidated    Parent Company 
     
    6/30/2009    6/30/2008    6/30/2009    6/30/2008 
         
Other operating expenses    (271,841)   (181,666)   (229,829)   (165,023)
   Provision for actuarial liabilities    (11,121)   45,417    (6,540)   45,417 
   Provision for contingencies    (70,159)   (39,970)   (52,414)   (29,203)
   Contractual fines    (3,507)   (30,472)   (11,157)   (35,335)
   Taxes and fees    (48,801)   (1,155)   (46,103)   (66)
   Equipment Stoppage    (23,066)   (17,258)   (20,915)   (17,092)
   Impairmaint ERSA    (23,137)       (23,137)    
   Equity loss    (20,466)   (63,951)   (19,850)   (61,632)
   Other expenses    (71,584)   (74,277)   (49,713)   (67,112)
Other operating income    143,777    60,432    105,423    14,608 
   Investments sold    21,479        21,479     
   Indemnifications    3,717    (7,291)   3,457    3,240 
   Reversal of provision for contingencies    71,648        71,648     
   Other income    46,933    67,723    8,839    11,368 
         
Other operating income and (expenses)   (128,064)   (121,234)   (124,406)   (150,415)
         

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26. INFORMATION BY BUSINESS SEGMENT

(i) Consolidated balance sheet by business segment

    6/30/2009 
   
    Steel    Mining    Logistics, Energy 
and Cement 
  Total 
         
Current assets    11,593,572    1,294,204    640,508    13,528,284 
 Financial investments    4,827,041    874,230    197,606    5,898,877 
 Clients    903,114    46,305    129,329    1,078,748 
 Advance to suppliers    338,533    11,168    32,652    382,353 
 Taxes recoverable    1,251,994    22,868    115,075    1,389,937 
 Pledge and deposits    1,384,382            1,384,382 
 Inventories    2,671,097    325,961    34,474    3,031,532 
 Other assets    217,411    13,672    131,372    362,455 
Noncurrent assets    10,888,517    461,920    2,770,988    14,121,425 
 Long-term assets    2,673,415    22,102    357,656    3,053,173 
 Investments, property, plant and equipment and intangible assets    8,215,102    439,818    2,413,332    11,068,252 
         
Total assets    22,482,089    1,756,124    3,411,496    27,649,709 
         
 
Current liabilities    6,267,376    214,193    460,532    6,942,101 
 Loans, financing and debentures    2,614,696    129,138    198,263    2,942,097 
 Suppliers    1,272,266    10,147    43,330    1,325,743 
 Tax payable    812,069    45,931    118,455    976,455 
 Accounts payable    1,126,733    12,258    55,235    1,194,226 
 Provisions and contigencies    291,914    2,939    12,620    307,473 
 Other liabilities    149,698    13,780    32,629    196,107 
Noncurrent liabilities    11,760,904    564,745    1,454,417    13,780,066 
 Loans, financing and debentures    6,279,865    547,235    1,194,050    8,021,150 
 Net contingencies – judicial deposits    1,772,866    3,065    59,586    1,835,517 
 Obligations and taxes paid by installments    711,284    796    161,669    873,749 
 Accounts payable long-term    2,956,940    472    26,329    2,983,741 
 Other noncurrent liabilities    39,949    13,177    12,783    65,909 
Shareholders' equity    6,927,542            6,927,542 
         
Total liabilities and shareholders' equity    24,955,822    778,938    1,914,949    27,649,709 
         

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(ii) Consolidated statement of gross income by business segment

    6/30/2009 
   
    Steel    Mining    Logistics, Energy 
and Cement 
  Consolidated 
         
Net revenues from sales    3,385,073    1,015,909    534,702    4,935,684 
Cost of goods sold and services rendered    (2,471,231)   (465,146)   (361,646)   (3,298,024)
         
Gross profit    913,841    550,763    173,056    1,637,660 
         

In view of the CPC Technical Pronouncement 22, which is undergoing a process of approval and, consequently, of the changes that will be introduced by this regulatory instrument, the Company chose to maintain the disclosure, and for this quarter only gross profit by segment will be presented.

(iii) Other consolidated information by business segment

    6/30/2009 
   
    Steel    Mining    Logistics, Energy 
and Cement 
  Consolidated 
         
Depreciation, Amortization and Depletion    279,161    20,223    85,346    384,730 
Provisions net of Judicial Deposits    1,889,955    3,100    64,146    1,957,201 
   Tax    1,509,096    1,919    6,870    1,517,885 
   Labor and Social Security    239,147    34    39,459    278,640 
   Civil    37,156        17,185    54,341 
   Other    104,556    1,147    632    106,335 

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27. STATEMENT OF VALUE ADDED

    Consolidated    Parent Company 
     
    6/30/2009    6/30/2008    6/30/2009    6/30/2008 
         
Revenues                 
   Sales of goods, products and services    6,619,412    8,277,094    5,074,022    6,368,412 
   Other revenues/expenses    1,372    (62,825)   1,988    (61,436)
   Allowance for / Reversal of doubtful accounts    (62,132)   (27,349)   (60,524)   (27,816)
         
    6,558,652    8,186,920    5,015,486    6,279,160 
         
Input Acquired from Third Parties                 
   Costs of products, goods and services sold    (3,746,647)   (1,634,847)   (2,950,806)   (1,445,894)
   Materials, energy – Third party services - other    (483,378)   (1,146,563)   (309,012)   (617,820)
   Loss/recovery of asset amounts    (7,075)   (447,242)   (5,210)   (334,982)
         
    (4,237,100)   (3,228,652)   (3,265,028)   (2,398,696)
         
Gross Value Added    2,321,552    4,958,268    1,750,458    3,880,464 
         
Retention                 
   Depreciation, amortization and depletion    (377,297)   (634,600)   (285,596)   (538,942)
         
Net value added produced    1,944,255    4,323,668    1,464,862    3,341,522 
         
Value added received in transfers                 
   Equity pick-up      (115,780)   986,753    742,665 
   Financial income / assets exchange variation    494,063    217,150    50,627    (237,578)
   Other    5,125        4,579     
         
    499,192    101,370    1,041,959    505,087 
         
Total value added to distribute    2,443,447    4,425,038    2,506,821    3,846,609 
         
 
         
DISTRIBUTION OF VALUE ADDED                 
 Personnel    465,998    360,509    323,889    210,849 
       Direct compensation    368,273        246,566     
       Benefits    68,373        53,218     
       Government Severance Indemnity Fund for Employees (FGTS)   29,352        24,105     
 Taxes, Fees and Contributions    943,894    2,381,195    1,004,531    2,029,182 
       Federal    739,028        836,990     
       State    192,862        160,692     
       Municipal    12,004        6,849     
 Third party capital remuneration    329,986    (114,923)   (154,189)   (215,463)
       Interest    327,715    (114,923)   (155,359)   (215,463)
       Rentals    2,271        1,170     
 Remuneration of shareholders’ equity    703,569    1,822,042    1,332,590    1,822,041 
       Interest on shareholders’ equity    193,223    110,927    193,223    110,927 
       Dividends                 
       Retained earnings    1,139,367    1,711,115    1,139,367    1,711,114 
Minority interest in retained earnings    (629,021)            
Unrealized income        (23,785)        
         
    2,443,447    4,425,038    2,506,821    3,846,609 
         

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28. EMPLOYEES’ PENSION FUND

(i) Management of the Private Pension Plan

The Company is the main sponsor of CBS Previdência, a private not-for-profit pension fund established in July 1960, main purpose of which is to pay supplementary benefits to participants in the official Pension Plan. CBS Previdência is composed of employees of CSN, CSN-related companies and the entity itself, provided they sign the adherence agreement.

(ii) Description of characteristics of the plans

CBS Previdência has three benefit plans:

35%-of-average-salary plan

It is a defined benefit plan (BD), which began on February 1, 1966, for the purpose of paying retirements (due to time in service, special cases, disability or age) on a life-long basis, equivalent to 35% of the participant’s last average 12 salaries. The plan also guarantees the payment of a sickness allowance to a participant on sick leave through the Official Pension Plan and it also guarantees the payment of death grant and a cash grant. The active and retired participants and the sponsors make thirteen contributions per year, which is the same as the number of benefits paid. This plan became inactive on October 31, 1977, when the supplementation of the average salary plan, which is in process of extinction, came into force.

Supplementation plan for the average salary

The defined benefit plan (BD) began on November 1, 1977. The purpose of this plan is to supplement the difference between the 12 last average salaries and the benefit paid by the Social Security Pension Plan (Previdência Oficial) benefit, to the retired employees, on a life-long basis. Like in the 35% Average Salary Plan, there is sickness allowance, death grant and pension coverage. Thirteen contributions are paid per year, the same number of benefits paid. This plan became inactive on December 26, 1995, after the combined supplementary benefits plan has been implemented.

Combined supplementary benefit plan

Begun on December 27, 1995, this is a combined variable contribution plan (CV). Besides the programmed pension benefit, there is the payment of risk benefits (pension in activity, disability and sickness benefit). In this plan, the retirement benefit is calculated based on the total accumulated sponsor’s and participant’s contributions (thirteen per year). Upon the participant’s retirement grant, the plan starts having a defined benefit plan and thirteen benefits are paid per year.

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As of June 30 and March 31, 2009, the plans are composed as follows:

    35%-of-Average-Salary Plan    Supplementation Plan
for
 the Average Salary 
  Combined Supplementary
 Benefit Plan 
  Total members 
         
    6/30/2009    3/31/2009    6/30/2009    3/31/2009    6/30/2009    3/31/2009    6/30/2009    3/31/2009 
                 
Members                                 
   In service    10    13    22    26    11,631    11,689    11,663    11,728 
   Retired    4,789    4,829    4,732    4,750    711    699    10,232    10,278 
                 
    4,799    4,842    4,754    4,776    12,342    12,388    21,895    22,006 
                 
Related beneficiaries:                                 
                 
   Beneficiaries    3,942    3,965    1,404    1,396    86    84    5,432    5,445 
                 
Total participants                                 
                 
(members/ beneficiaries)   8,741    8,807    6,158    6,172    12,428    12,472    27,327    27,451 
                 

(iii) Solution approaches for the payment of the actuarial deficit

According to Official Letter 1555/SPC/GAB/COA of August 22, 2002, confirmed by Official Letter 1598/SPC/GAB/COA of August 28, 2002, a proposal for refinancing the reserves to amortize the sponsors’ liability in 240 consecutive monthly installments, monetarily indexed by INPC + 6% p.a., starting as from June 28, 2002 was approved.

The agreement establishes the prepayment of installments should there be a need for cash in the defined benefit plan and the incorporation to the updated debit balance of the eventual deficits/surpluses under the sponsors’ responsibility, so as to preserve the equilibrium of the plans without exceeding the maximum period of amortization stipulated in the agreement.

(iv) Actuarial Liabilities

Due to the CVM Resolution 371/00, which approved the NPC 26 of IBRACON – “Accounting of the Employee’s benefits” and which established new accounting practices for the calculation and disclosure, the Management, through a study performed by external actuaries, determined the effects arising from this practice, and the Company has kept records in conformity with the actuarial report issued on January 9, 2009.

    Plans status on 12/31/2008 
   
    Plans 
   
    35%-of- Average- Salary    Supplementation Plan
 for the Average
Salary 
  Combined
 Supplementary
Benefit Plan 
  Total 
         
Present value of the actuarial liabilities with guarantee    248,736                       988,578                 866,700    2,104,014 
Plan's assets fair value    (191,517)   (866,909)   (851,450)   (1,909,876)
         
Present value of the actuarial obligations exceeding the assets fair value    57,219                       121,669    15,250    194,138 
Adjustments by allowed deferral:    (25,603)                        (11,309)   (75,350)   (112,262)
 - Unrecognized actuarial gains    (25,603)                        (11,309)   (94,341)   (131,253)
 - Unrecognized cost of service rendered            18,991    18,991 
Present value of the amortizing contributions of members    (5,420)   (18,988)       (24,408)
         
Actuarial liabilities/ (assets)   26,196    91,372    (60,100)   57,468 
         
Provisioned Actuarial liabilities/ (assets) (Long-term liabilities/Other)   26,196    91,372        117,568 
         

Actuarial liability recognition

Management decided to recognize the adjustments of the actuarial liabilities in income, as established in Paragraphs 83 and 84 of NPC 26. As of June 30, 2009, the balance of the provision for the coverage of the actuarial liability amounts to R$96,285 (R$107,017 as of March 31, 2009).

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As far as the recognition of the actuarial liability is concerned, the amortizing contribution related to the portion of the participants in the settlement of the reserve insufficiency was deducted from the present value of total actuarial liabilities of the respective plans. Some participants are questioning this amortizing contribution in court, but the Company, grounded on the opinion of its legal and actuarial advisers, understands that this amortizing contribution was duly approved by the Brazilian Department of Supplementary Private Pensions – SPC and, therefore, is legally due by the participants.

According to the actuarial calculations prepared using the projected credit unit method, the amounts to be appropriated in 2009 are as follows:

           ESTIMATES PER PLAN - 2009 
   
    35%-of-    Supplementation Plan    Combined     
    Average-    for the Average    Supplementary    Total 
    Salary    Salary    Benefit Plan     
         
Cost of current service    (42)   (207)   (3,682)   (3,931)
Expected contribution of members    28    100        128 
Interest on actuarial liabilities    (30,057)   (119,630)   (18,535)   (168,222)
Expected income from assets    23,860    109,176    17,182    150,218 
Cost of amortizations    (530)       (3,538)   (4,068)
   - Unrecognized actuarial gains    (530)       (4,629)   (5,159)
   - Unrecognized cost of service rendered            1,091    1,091 
         
Expected impact on the 2009 result    (6,741)   (10,561)   (8,573)   (25,875)
         

Main actuarial assumptions adopted in the calculation of the actuarial liability as of December 31, 2008

Actuarial financing method    Projected Credit Unit 
Functional Currency 
Real (R$)
     
Accounting for the plan assets 
Market Value 
     
Amount used as estimate for the closing shareholders’ equity for the period 
Best estimate for shareholders’ equity on the closing date of the fiscal year obtained based on the projection of the amounts recorded in November 
     
Nominal annual rate of return on investments 
35% of the average: 12.93%; Supplementation: 12.93%; Millennium: 13.21% 
     
Nominal annual rate for discount of the actuarial liability 
35% of the average: 13.07%; Supplementation: 12.96%; Millennium: 12.76% 
     
Nominal annual rate of salary growth 
5.55% 
     
Nominal annual index for social security benefits correction 
4.50% 
     
Long-term annual inflation rate 
4.50% 

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Administrative expenses 
The amounts used are net of administrative expenses 
     
General mortality table 
AT83 segregated by gender 
     
Disability table 
Mercer Disability with probabilities multiplied by 2 
     
Disabled mortality table 
Winklevoss 
     
Turnover table 
Millennium Plan 2% per annum, null for BD plans 
     
Retirement age 
100% on the first date on which the employee becomes eligible to a retirement benefit scheduled by the plan 
     
Family composition of the participants in activity 
95% will be married at the time of retirement, and the wife is 4 years younger than the husband 

CSN does not have other post-employment benefit plans.

29. INSURANCE

In view of the nature of its operations, the Company renewed, for the period from February 21, 2008 to February 21, 2009, and with international reinsurance companies, the All Risks coverage for operational risks for the Presidente Vargas Steelworks, Casa de Pedra Mine, Arcos Mine, Paraná Branch, Coal Terminal - Tecar, GalvaSud (property damages and loss of profits), Container Terminal -Tecon and ERSA Estanho de Rondônia (loss of profits), in the total risk amount of US$9.57 billion (property damages and loss of profit) and maximum indemnification amount, in the event of a claim, of US$750 million (property damages and loss of profits), equivalent to R$1.3 billion. For the period comprised from February 22, 2009 to February 19, 2010, the Company is negotiating coverage for operational risks with insurance and reinsurance companies in Brazil and abroad.

The risk assumptions adopted, given their nature, are not part of the scope of a quarterly information review, and, consequently, they were not reviewed by our independent auditors.

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07.01 – COMMENTS ON THE COMPANY’S PERFORMANCE IN THE QUARTER 
 

See comments on the Company’s consolidated performance – Chart 11.

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12.01 – COMMENTS ON THE COMPANY’S CONSOLIDATED PERFORMANCE IN THE QUARTER 
 

Production 

The Presidente Vargas Steelworks produced 869,000 tonnes of crude steel in the second quarter of 2009, 20% down on the previous quarter due to the programmed maintenance stoppage at Blast Furnace 2 between April and June. The furnace resumed production on June 18.

However, the Company’s strategy of stockpiling semi-finished products in the two quarters preceding the maintenance has not affected the production of rolled steel, which posted a substantial increase of 54% over the first quarter of 2009, due to increasing domestic demand.

It is worth noting that, by the second quarter of 2009, CSN had already exhausted its inventories of slabs and hot-rolled coils acquired from third parties in 2008, which had a negative impact on production costs.

Production (in thousand t)   2Q08    1Q09    2Q09   
Change 
                2Q09 x 2Q08    2Q09 x 1Q09 
Crude Steel (Presidente Vargas Mill)   1,291    1,087    869    -33%    -20% 
Purchased Slabs from Third Parties          -    - 
Total Crude Steel    1,291    1,087    869    -33%    -20% 
 
Rolled Products * (Presidente Vargas Mill)   1,208    608    968    -20%    59% 
HR from Third Parties Consumption      19      -    - 
Rolled Products * (Presidente Vargas Mill)   1,208    627    968    -20%    54% 

* Products delivered for sale, including shipments to CSN Paraná and GalvaSud.

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Production Costs (Parent Company)

CSN’s total production costs reduced to R$933 million in the second quarter of 2009, a strong 35% decrease on the first quarter of 2009 figure of R$1,438 million. The quarter-on-quarter reduction of R$505 million was basically due to the following factors:

Raw materials – total cost of R$397 million in the second quarter of 2009, R$520 million less than the first quarter of 2009, caused by:

- Coal: decline of R$95 million due to lower purchase prices and the appreciation of the Real in the second quarter of 2009;
- Coke: reduction of R$325 million in the second quarter of 2009 costs, since there was no further use of coke acquired from third parties;
- Iron ore and pellets: reduction of R$32 million due to lower consumption thanks to reduced crude steel output in the second quarter of 2009;
-
Scrap and other raw materials: decrease of R$68 million, also due to reduced production in the second quarter of 2009.

Labor - labor costs totaled R$ 109 million in the second quarter of 2009, virtually flat when compared to the first quarter of 2009 figure.

General costs – general production costs amounted to R$324 million, 5% up on the R$308 million recorded in the first quarter of 2009, chiefly due to higher expenses with natural gas, caused by the reduced availability of blast-furnace gases.

Depreciation – remained flat over the first quarter of 2009 at close to R$103 million.

STEEL PRODUCTION COSTS - PARENT COMPANY 

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Sales 

Total Sales Volume

CSN’s flat steel sales volume totaled 947,000 tonnes in the second quarter of 2009, a hefty 47% growth on the previous quarter and 29% down year-on-year.

Domestic Market

Domestic sales came to 795,000 tonnes, 42% up on the first quarter of 2009 and 28% down on the 1.1 million tonnes recorded in the second quarter of 2008. Eighty-four percent of the second quarter of 2009 sales volume went to the domestic market. As previously mentioned, certain industrial sectors recorded increased demand in the second quarter, favoring the Company’s positive result.

Exports

Steel product exports totaled 153,000 tonnes in the second quarter of 2009, 84% up on the previous three months and 32% down year-on-year due to shrinking international demand.

Market Share and Product Mix

The Company’s share of the overall domestic flat steel market (hot-rolled, cold-rolled, galvanized and tin plate) stood at 40% in the second quarter of 2009, 3 p.p. higher than in the first quarter of 2009, led by tin plate, galvanized, hot-rolled and cold-rolled, where CSN achieved market shares of 100%,46%, 34% and 29%, respectively.

Also in the second quarter of 2009, CSN reached a 24% share of the automotive market, 45% of the construction market, 100% of the steel packaging market, 43% of the distribution market and a 43% share of the home appliance/OEM market, besides a consolidated position of 100% of the steel packaging market.

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Coated products accounted for 48% of the Company’s total sales volume in the second quarter of 2009.


83


Prices 

As the effect of reduced prices and lower share of coated items in the product mix, net revenue per tonne averaged R$ 2,069 in the domestic market in the second quarter of 2009, 14% down on the first quarter of 2009 and 1% up year-on-year.

Average net export revenue per tonne in Reais fell by 36% over the first quarter of 2009, chiefly due to reduced prices, different mix and the period exchange variation.

Mining 

PRODUCTION

Own iron ore production plus purchases from third parties totaled 7.3 million tonnes in the second quarter of 2009, 5.8 million of which from Casa de Pedra, 0.9 million from Namisa and 0.6 million from third parties. Of own production of 6.7 million tonnes, 5.2 million referred to finished products* and 1.5 million was run-of-mine.


Sales

Second-quarter iron-ore sales totaled 4.0 million tones, 1.4 million less than the first quarter of 2009 figure mainly due to the decline in export volume caused by the reduced availability of ships for loading in May and June, which negatively affected CSN’s overseas sales in that period. Exports came to 3.3 million tonnes, accounting for 83% of total sales volume. The domestic market absorbed 0.7 million tonnes, 0.6 million of which run-of-mine.

In the first half of 2009 ore sales stood at 9.4 million tonnes, 22% up year-on-year. Exports came to 8.3 million tonnes, 36% more year-on-year, and accounted for 87% of total sales in the period, while the domestic market accounted for the remaining 1.1 million tonnes, including 0.8 million of run-of-mine sales.

The Presidente Vargas Steelworks absorbed 1.3 million tonnes in the second quarter and 2.9 million tonnes in the first half of 2009.

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INVENTORIES

Iron ore inventories closed the second quarter of 2009 at around 13.9 million tonnes, 9.6 million of which finished products*.

* Finished products: lump, sinter feed, pellet feed, hematite and mixed hematite.

Net Revenue 

Net revenue totaled R$2.49 billion in the second quarter of 2009, 2% up on the R$2.44 billion recorded in the first quarter of 2009, due to the 47% upturn in steel products sales volume, partially offset by the reduction in average quarterly prices and lower iron ore sales volume.

85


Selling, General and Administrative Expenses 

Selling, general and administrative expenses totaled R$321 million in the second quarter of 2009, R$46 million up on the previous quarter, chiefly due to greater sales efforts and higher provisions for doubtful accounts.

Other Revenue and Expenses 

In the second quarter of 2009, CSN recorded a negative R$103 million in the “Other Revenue and Expenses” line, R$79 million higher than the previous quarter, chiefly due to the reversal of R$72 million in provisions for CPMF (financial transaction tax) occurred in the first quarter of 2009.

In the in the first half of 2009, expenses totaled R$128 million, in line with the first six months of 2008.

EBITDA 

Second-quarter EBITDA totaled R$728 million, 7% up on the first quarter of 2009, primarily due to the increase in steel product sales volume and the decline in production costs.

In the first half of 2009 EBITDA stood at R$1.4 billion, 53% down year-on-year, due to the lower demand in the domestic and export markets.

Despite the adverse effects of the crisis, CSN showed strong resilience recording an EBITDA margin of 29% in the second quarter of 2009, 1 p.p. up on the previous three months.

86


Financial Result and Debt 

The second quarter of 2009 net financial result was positive by R$204 million, chiefly due to the following factors:

• Provisions for interest on loans and financing totaling R$255 million;
• Monetary restatement of tax provisions in accordance with the SELIC rate, amounting to R$92 million;
• Gains of R$344 million from derivative transactions, including the corresponding exchange variation;
• Monetary and exchange rate variation gain of R$143 million;
• Returns on financial investments, totaling R$55 million.

Consolidated net debt moved up by R$2.1 billion, from R$2.8 billion on March 31 to R$4.9 billion on June 30, 2009, due to the following factors:

• EBITDA of R$0.7 billion in the second quarter of 2009;
• Exchange gain variation of R$0.8 billion in the second quarter of 2009;
• Reduction of R$0.1 billion in the working capital invested in the business;
• Investments of R$0.5 billion;
• Payment of dividends and interest on equity of R$1.8 billion;
• A R$0.7 billion increase in judicial deposits;
• Payment of taxes (income tax + social contribution) totaling R$0.4 billion;
• Effect of R$0.3 billion related to cost of debt allocated to the business.

The net debt/EBITDA ratio, based on EBITDA of R$5.02 billion of the last 12 months, came to 0.97 time at the end of the second quarter, a 0.50 time increase over the 0.47 time recorded at the end of the first quarter of 2009.

87


Income Taxes 

In the second quarter of 2009, income tax and social contribution totaled R$274 million, R$189 million up on the first quarter of 2009, chiefly due to higher taxable income in the quarter and the impact of the appreciation of the Real against the US dollar on income tax and social contribution in the period. The effective income tax rate in the in the first half of 2009 was 34%.

Net Income 

CSN posted in the second quarter of 2009 a net income of R$335 million, 9% down on the first quarter of 2009, chiefly due to the increase in income tax and social contribution. Pre-tax income totaled R$609 million in the second quarter of 2009, a 34% quarter-over-quarter improvement.

Investments 

CSN invested R$501 million in the second quarter of 2009, R$405 million of which went to the parent company, mostly to the following projects:

• Expansion of the Casa de Pedra mine: R$179 million;
• Maintenance and repairs: R$80 million;
• Technological improvements: R$77 million;
• Expansion of the Port of Itaguaí: R$11 million;
• Works plan: R$11 million.

Investments in the subsidiaries accounted for the remaining R$96 million, mostly in:

• MRS Logística: R$26 million;
• CSN Cimentos: R$23 million;
• CSN Aços Longos: R$14 million;
• NAMISA: R$10 million;
• Transnordestina Logística: R$9 million;
• CSN LLC: R$7 million.

It is worth noting that after around 90 days of programmed maintenance stoppage at Blast Furnace 2, the equipment resumed operations in June 2009. CSN invested R$93 million in the modernization project, including the remodeling of regenerators. These amounts were booked under technological improvements in the in the first half of 2009.

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Cement 

At the end of the second quarter of 2009, the Company began producing and selling cement under the CSN brand in the recently built plant adjacent to the Presidente Vargas Steelworks in the Volta Redonda complex.

With estimated production and sales of 300,000 tonnes in 2009, the plant marks CSN’s entry into yet another new business that has strong synergies with its existing activities, given that the project’s main advantages lie in its raw materials self-sufficiency and the use of previously existing logistics. The slag used in cement production comes from the Company’s blast furnace and the clinker currently acquired from third parties will shortly be produced in the CSN’s Arcos mine in the state of Minas Gerais. CSN also has its own railway and distribution infrastructure, which is essential for the sales process.

Working Capital 

Working capital closed June at R$2.4 billion, R$89 million down on the March 31 figure, mainly thanks to the R$148 million decrease in assets, chiefly pressured by the R$426 downturn in “Inventories” and partially offset by the R$337 million increase in estimated tax payments made during the second quarter of 2009. This effect was partially offset by a R$60 million decline in liabilities, mostly due to the R$469 million decrease in the “Suppliers” account , partially reduced by the increase in Taxes Payable (R$380 million).

The average supplier payment period in June stood at 72 days, 27 days less when compared to March 2009, while the average receivables period shortened from 35 to 30 days. The inventory turnover period averaged 165 days, 24 days down on the previous quarter, mainly due to the reduction in semi-finished product inventories.

        R$ MILLION 
 
WORKING CAPITAL    Mar/09    Jun/09    Change 
Assets    5,048    4,900    148 
 
Accounts Receivable    1,225    1,079    146 
- Domestic Market    1,096    1,110    (14)
- Export Market    369    246    122 
- Allowance for Doubtful Accounts    (240)   (278)   38 
Inventory    3,457    3,030    426 
Advances to Suppliers    289    377    (88)
Prepaid Taxes    77    414    (337)
 
Liabilities    2,558    2,498    60 
 
Suppliers    1,795    1,326    469 
Salaries and Social Contribution    106    130    (24)
Taxes Payable    596    976    (380)
Advances from Clients    61    66    (5)
 
Working Capital    2,491    2,402    89 
 
 
TURN OVER RATIO             
Average Periods    Mar/09    Jun/09    Change 
Receivables    35    30    5 
Supplier Payment    99    72    27 
Inventory Turnover    189    165    24 
 

89


Capital Market 

Share Performance

CSN’s shares appreciated by a hefty 61% in the in the first half of 2009, the fourth highest upturn among those companies making up the IBOVESPA index, versus 37% for the IBOVESPA itself. In the second quarter of 2009 CSN’s shares increased by 28%, while the IBOVESPA climbed by 26% in the same period.

On the NYSE, CSN’s ADRS moved up by an even more substantial 86% in the in the first half of 2009, which is especially significant given that the Dow Jones index fell by 4% in the same period. In the second quarter of 2009, CSN’s ADRs appreciated by 52%, versus an 11% upturn by the Dow Jones.

Second-quarter daily traded volume averaged R$108 million on the BOVESPA, versus R$103 million in the first quarter of 2009, and US$74 million on the NYSE, versus the previous quarter’s US$69 million.

CAPITAL MARKETS - CSNA3 / SID / IBOVESPA / DOW JONES 
 
    1Q09    2Q09    1H09 
Number of shares    793,403,838    793,403,838    793,403,838 
 
Market Capitalization             
 Closing Price (R$/share)   34.40    43.62    43.62 
 Closing Price (US$/ADR)   14.84    22.35    22.35 
 Market Capitalization (R$ million)   26,098    33,093    33,093 
 Market Capitalization (US$ million)   11,259    16,956    16,956 
 
Total return including dividends and interest on equity         
 CSNA3    26%    28%    61% 
 SID    23%    52%    86% 
 Ibovespa    9%    26%    37% 
 Dow Jones    -13%    11%    -4% 
 
Volume             
 Average daily (thousand shares)   2,983    2,520    2,752 
 Average daily (R$ thousand)   103,340    107,974    105,657 
 Average daily (thousand ADRs)   4,609    3,544    4,068 
 Average daily (US$ thousand)   69,180    74,196    71,729 
 
Source: Economática             

90



The Company’s financial information presented herein complies with criteria of the Brazilian Corporation Law, with reviewed financial information. The non-financial information, as well as other operating information was not reviewed by independent auditors.

91


09.01 - EQUITY IN SUBSIDIARIES AND/OR ASSOCIATED COMPANIES

1 - ITEM  2 - NAME OF SUBSIDIARY/AFFILIATED COMPANY  3 - CNPJ (Corporate Taxpayer’s ID) 4 - CLASSIFICATION  5 - PARTICIPATION IN CAPITAL 
OF INVESTEE - % 
6 – INVESTOR’S 
SHAREHOLDERS' EQUITY - % 
7 - TYPE OF COMPANY  8 - NUMBER OF SHARES HELD IN CURRENT QUARTER 
(in thousands)
9 - NUMBER OF SHARES HELD IN PREVIOUS QUARTER
(in thousands)

 01  CSN OVERSEAS  05.722.388/0001-58  PRIVATE SUBSIDIARY  100.00  15.63 
COMMERCIAL, INDUSTRY AND OTHER TYPES OF COMPANY  7,173  7,173 
02  CSN STEEL  05.706.345/0001-89  PRIVATE SUBSIDIARY  100.00  22.41 
COMMERCIAL, INDUSTRY AND OTHER TYPES OF COMPANY  480,727  480,727 
03  COMPANHIA METALURGICA PRADA  56.993.900/0001-31 PRIVATE SUBSIDIARY 99.99  8.11 
COMMERCIAL, INDUSTRY AND OTHER TYPES OF COMPANY  3,155  3,155 
04  CSN ENERGY  06.202.987/0001-03  PRIVATE SUBSIDIARY  100.00  12.91 
COMMERCIAL, INDUSTRY AND OTHER TYPES OF COMPANY  3,675  3,675 
05  ITAGUAÍ LOGÍSTICA  09.295.323/0001-24  PRIVATE SUBSIDIARY  99.99  0.01 
COMMERCIAL, INDUSTRY AND OTHER TYPES OF COMPANY  1,000  1,000 
06  AÇOS LONGOS  05.023.529/0001-44  PRIVATE SUBSIDIARY  99.99  0.53 
COMMERCIAL, INDUSTRY AND OTHER TYPES OF COMPANY  41,826  41,826 
07  CSN CIMENTOS  42.564.807/0001-05  PRIVATE SUBSIDIARY  99.99  4.71 
COMMERCIAL, INDUSTRY AND OTHER TYPES OF COMPANY  722,041  122,814 
08  CIA METALIC DO NORDESTE  01.183.070/0001-95  PRIVATE SUBSIDIARY  99.99  1.33 
COMMERCIAL, INDUSTRY AND OTHER TYPES OF COMPANY  92,284  92,284 
09  INAL NORDESTE  00.904.638/0001-57  PRIVATE SUBSIDIARY  99.99  0.58 
COMMERCIAL, INDUSTRY AND OTHER TYPES OF COMPANY  43,981  37,796 

92


10  CSN PANAMA  05.923.777/0001-41  PRIVATE SUBSIDIARY  100.00  10.49 
COMMERCIAL, INDUSTRY AND OTHER TYPES OF COMPANY  4,240  4,240 
11  CSN ENERGIA  03.537.249/0001-29  PRIVATE SUBSIDIARY  99.99  0.90 
COMMERCIAL, INDUSTRY AND OTHER TYPES OF COMPANY 
12 MINAS PELOTIZAÇÃO 09.295.323/0001-24 PRIVATE SUBSIDIARY 99.99 0.01
COMMERCIAL, INDUSTRY AND OTHER TYPES OF COMPANY 1,000 1,000
13  CONGONHAS MINÉRIOS  08.902.291/0001-15  PRIVATE SUBSIDIARY  99.99  0.08 
COMMERCIAL, INDUSTRY AND OTHER TYPES OF COMPANY  5,009  5,009 
14  GALVASUD  02.618.456/0001-45  PRIVATE SUBSIDIARY  99.99  10.35 
COMMERCIAL, INDUSTRY AND OTHER TYPES OF COMPANY  11,609,510  11,609,510 
15 NACIONAL MINÉRIOS 08.446.702/0001-05 PRIVATE SUBSIDIARY  59.99  120.94 
COMMERCIAL, INDUSTRY AND OTHER TYPES OF COMPANY  284,984 284,984

93


16  SEPETIBA TECON  02.394.276/0001-27  PRIVATE SUBSIDIARY  99.99  2.68 
COMMERCIAL, INDUSTRY AND OTHER TYPES OF COMPANY  253,990  253,990 
17  TRANSNORDESTINA LOGÍSTICA S.A  02.281.836/0001-37  PUBLICLY-HELD SUBSIDIARY  81.60  5.92 
COMMERCIAL, INDUSTRY AND OTHER TYPES OF COMPANY  486,516  214,523 
18  ITÁ ENERGÉTICA  01.355.994/0002-02  PUBLICLY-HELD  SUBSIDIARY  48.75  9.02 
COMMERCIAL, INDUSTRY AND OTHER TYPES OF COMPANY  253,607  253,607 
19  MRS LOGÍSTICA  01.417.222/0001-77  PUBLICLY-HELD  SUBSIDIARY  27.27  25.50 
COMMERCIAL, INDUSTRY AND OTHER TYPES OF COMPANY  92,718  92,718 
20  ESTANHO DE RONDÔNIA ERSA  00.684.808/0001-35  PRIVATE SUBSIDIARY  99.99  0.26 
COMMERCIAL, INDUSTRY AND OTHER TYPES OF COMPANY  34,233  34,233 
21 CSN EXPORT  05.760.237/0001-94  PRIVATE SUBSIDIARY  100.00  3.82 
COMMERCIAL, INDUSTRY AND OTHER TYPES OF COMPANY  1,036  1,036 

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14.01 – CHARACTERISTICS OF PUBLIC OR PRIVATE ISSUANCE OF DEBENTURES

1 – ITEM  05 
2 –ORDER No. 
3 –REGISTRATION No. AT CVM  CVM/SRE/DEB/2006/01 1 
4 – REGISTRATION DATE AT CVM  4/28/2006 
5 – SERIES ISSUED  UNIT 
6 – TYPE OF ISSUANCE  SIMPLE 
7 – NATURE OF ISSUANCE  PUBLIC 
8 – DATE OF ISSUANCE  2/1/2006 
9 – EXPIRATION DATE  2/1/2012 
10 – TYPE OF DEBENTURE  WITHOUT PREFERENCE 
11 – CONDITION FOR CURRENT REMUNERATION   
12 – PREMIUM/DISCOUNT   
13 – NOMINAL VALUE (Reais) 10,000.00 
14 – AMOUNT ISSUED (Thousands of Reais) 600,000 
15 NUMBER OF SECURITIES ISSUED (UNIT) 60,000 
16 – OUTSTANDING SECURITIES (UNIT) 60,000 
17 – TREASURY SECURITIES (UNIT)
18 – SECURITIES REDEEMED (UNIT)
19 – CONVERTED SECURITIES (UNIT)
20 – SECURITIES TO BE DISTRIBUTED (UNIT)
21 – DATE OF THE LAST RENEGOTIATION   
22 – DATE OF NEXT EVENT  8/1/2009 

95


 
19.01 – INVESTMENT PROJECTS 
 

We highlight, among the Company’s main investments, the expansion in the production capacity of the Casa de Pedra mine, of Aços Longos and of Itaguaí Port as of June 30,2009. The Company also maintains investment project balances in the amounts of R$628,998, R$36,447 and R$14,189, respectively.

For further information, see comments on the consolidated quarterly performance.

96


 
20.01 – OTHER INFORMATION DEEMED AS RELEVANT BY THE COMPANY 
 

97


 
21.01 – SPECIAL REVIEW REPORT - UNQUALIFIED 
 

Independent auditor’s review report
(a free translation from the original in Portuguese)

To the Board of Directors of
Companhia Siderúrgica Nacional
Rio de Janeiro - RJ

1. We have reviewed the accounting information contained in the Quarterly Financial Information of Companhia Siderúrgica Nacional (the Company) and in the consolidated Quarterly Financial Information of the Company and its subsidiaries for the quarter ended June 30, 2009, comprising the balance sheet, the statements of income, of changes in shareholders’ equity, cash flows, added value, explanatory notes and the management report, which are the responsibility of its management.

2. Our review was conducted in accordance with the standards set by IBRACON - The Brazilian Institute of Independent Auditors, in conjunction with the Federal Accounting Council - CFC and consisted mainly of the following: (a) inquiry and discussion with management responsible for the accounting, financial and operational areas of the Company and its subsidiaries, regarding the main criteria adopted in the preparation of the Quarterly Financial Information; and (b) reviewing information and subsequent events that have or may have relevant effects on the financial position and operations of the Company and its subsidiaries.

3. Based on our review, we are not aware of any material modifications that should be made to the accounting information contained in the Quarterly Financial Information referred above, in order to be in accordance with the standards issued by the Brazilian Securities and Exchange Commission (CVM), applicable to the preparation of the Quarterly Financial Information, including CVM Instruction 469/08.

98


4. As mentioned in Note 2, the accounting practices adopted in Brazil changed during 2008 and the effects of the first time adoption were only recorded by the Company and its subsidiaries during the fourth quarter of 2008 and incorporated into in the annual financial statements as of December 31, 2008. The statements of income, changes in shareholders’ equity, cash flows and added value, for the quarter ended June 30, 2008, presented in conjunction with the current quarterly information, are not being restated for comparison purposes, as permitted by Circular Notice /CVM/SNC/SEP 02/2009.

5. As mentioned in Note 29, the Company has been negotiating with insurance and reinsurance companies in Brazil and abroad, in order to obtain insurance coverage for its operational risks.

August 6, 2009

KPMG Auditores Independentes     
CRC 2SP014428/O-6-F-RJ     
     
Original in Portuguese signed by     
Anselmo Neves Macedo    Carla Bellangero 
Accountant CRC 1SP160482/O-6-S-RJ    Accountant CRC 1SP196751/O-4-S-RJ 

99


TABLE OF CONTENTS

GROUP TABLE  DESCRIPTION  PAGE 
01  01  IDENTIFICATION 
01  02  HEAD OFFICE 
01  03  INVESTOR RELATIONS OFFICER (Company Mailing Address)
01  04  ITR REFERENCE 
01  05  CAPITAL STOCK 
01  06  COMPANY PROFILE 
01  07  COMPANIES NOT INCLUDED IN THE CONSOLIDATED FINANCIAL STATEMENTS 
01  08  CASH DIVIDENDS 
01  09  SUBSCRIBED CAPITAL AND CHANGES IN THE CURRENT YEAR 
01  10  INVESTOR RELATIONS OFFICER 
02  01  BALANCE SHEET – ASSETS 
02  02  BALANCE SHEET – LIABILITIES 
03  01  STATEMENT OF INCOME 
04  01  04 - STATEMENT OF CASH FLOWS  10 
05  01  05 - STATEMENT OF CHANGES IN SHAHOLDERS’ EQUITY FROM 4/1/2009 TO 6/30/2009  12 
05  02  05 - STATEMENT OF CHANGES IN SHAHOLDERS’ EQUITY FROM 1/1/2009 TO 6/30/2009  13 
08  01  CONSOLIDATED BALANCE SHEET – ASSETS  14 
08  02  CONSOLIDATED BALANCE SHEET – LIABILITIES  16 
09  01  CONSOLIDATED STATEMENT OF INCOME  18 
10  01  10.01 - CONSOLIDATED STATEMENT OF CASH FLOWS  20 
11  01  11 – CONSOLIDATED STATEMENT OF CHANGES IN SHAHOLDERS’ EQUITY FROM 4/1/2009 TO 6/30/2009  22 
11  02  11 – CONSOLIDATED STATEMENT OF CHANGES IN SHAHOLDERS’ EQUITY FROM 1/1/2009 TO 6/30/2009  23 
06  01  NOTES TO THE FINANCIAL STATEMENTS  24 
07  01  COMMENTS ON THE COMPANY’S PERFORMANCE IN THE QUARTER  79 
12  01  COMMENTS ON THE CONSOLIDATED PERFORMANCE IN THE QUARTER  80 
13  01  EQUITY IN SUBSIDIARIES AND/OR ASSOCIATED COMPANIES  92 
14  01  CHARACTERISTICS OF PUBLIC OR PRIVATE ISSUANCE OF DEBENTURES  95 
19  01  INVESTMENT PROJECTS  96 
20  01  OTHER INFORMATION DEEMED AS RELEVANT BY THE COMPANY  97 
21  01  SPECIAL REVIEW REPORT  98 
    CSN OVERSEAS   
    CSN STEEL   
    COMPANHIA METALURGICA PRADA   
    CSN ENERGY   
    ITAGUAÍ LOGÍSTICA   
    AÇOS LONGOS   
    CSN CIMENTOS   
    CIA METALIC DO NORDESTE   
    INAL NORDESTE   
    CSN PANAMA   
    CSN ENERGIA   
    MINAS PELOTIZAÇÃO   

100


TABLE OF CONTENTS

GROUP 
TABLE 
DESCRIPTION 
PAGE 
    CONGONHAS MINÉRIOS   
    GALVASUD   
    NACIONAL MINÉRIOS   
    SEPETIBA TECON   
    TRANSNORDESTINA LOGÍSTICA S.A   
    ITÁ ENERGÉTICA   
    MRS LOGÍSTICA   
    ESTANHO DE RONDÔNIA ERSA   
    CSN EXPORT   

101


 

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

Date: August 28, 2009

 
COMPANHIA SIDERÚRGICA NACIONAL
By:
/S/ Benjamin Steinbruch

 
Benjamin Steinbruch
Chief Executive Officer

 

 

 
By:
/S/ Paulo Penido Pinto Marques

 
Paulo Penido Pinto Marques
Chief Financial Officer 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.