TABLE OF CONTENTS

(as per item 10 of Attachment 24 of CVM Rule 480 of December 7, 2009)

·        Maturities of loans, borrowings and debentures recorded under non-current liabilities

On December 31, 2013, the principal of loans, borrowings and long-term debentures were as follows, per year of maturity:  

Relevant loan and credit facility agreements as at December 31, 2012

In thousands of R$

Prepayment balances with the Company’s related parties totaled R$2,339,776 on December 31, 2012 (R$2,244,927 on December 31, 2011) and the balances of Fixed Rate Notes e Intercompany Bonds totaled R$3,545,340 (R$3,404,701 on December 31, 2011).

· Funding Transaction Costs

On December 31, 2012 the funding transaction costs were stated as follows:

In thousands of R$

(1) TJ – Annual contracted interest rates

(2) IRR – Annual internal rate of return

· Maturities of loans, borrowings and debentures recorded under non-current liabilities

On December 31, 2012, the principal of loans, borrowings and long-term debentures were as follows, per year of maturity:

In thousands of R$

· Amortization and raising of loans, borrowings and debentures

The table below shows the amortization and funding during current year:

(*) Including foreign currency and monetary variations.

The Company's loans and credit facility agreements provides for restrictive covenants, usual in agreements of this nature, which were fully met as at December 31, 2012.

In January 2012, the Company ensured loan contracted by its subsidiary CSN Steel S.L., in the amount of €120,000 thousand, destined to the partial financing to acquire 100% of shares held by Grupo Alfonso Gallardo, S.L.U. (“Gallardo Group”) in the companies Stahlwerk Thüringen GmbH (“SWT”) and Gallardo Sections S.L.U.

In January 2012, the Company, by means of its wholly-owned subsidiary CSN Resources S.A., priced an additional issue of bonds, in the amount of US$200,000 thousand, by reopening the US$1,000,000 thousand bonds and to mature in July 2020.

In September 2012, the Company settled the promissory notes, paying R$800,000 of principal and R$33,277 of interest rates.

· Debentures

i. Companhia Siderúrgica Nacional

4^th issue

In February 2012, the Company settled the fourth issue of debentures, paying R$600,000 of principal and R$35,285 of interest rates.

Comparison of results referring to the fiscal years ended December 31, 2013 and December 31, 2012:

Net revenue from sales and/or services

In 2013, the consolidated net revenue totaled R$17,312 million, 14% up on 2012, mainly due to higher revenue from steel and mining sectors.

Cost of products and services sold

In 2013, the consolidated cost of products sold totaled R$12,423 million, 10% up on 2012, basically due to higher volume sold by the steel segment and increased production costs of steel segment.

Gross profit

The gross profit totaled R$4,890 million in 2013, 23% up on 2012, due to the factors mentioned above.

Selling, general and administrative expenses

In 2013, selling, general and administrative expenses of R$1,360 million were 10% up on 2012, due to a greater sales effort.

Other Operating Income/Expenses

In 2013, “Other Operating Income/Expenses” totaled R$568 million, a 79% drop over the previous year, chiefly due to the non-recurring effect in 2012 of reclassification of accumulated investment losses in shares recorded as available for sale.

Equity in the earnings of subsidiaries

In 2013, the equity in the earnings of subsidiaries was positive at R$158 million compared to a positive result of R$641 million in 2012. This reduction is basically due to the adhesion of its jointly-controlled entity Namisa to the tax recovery program (REFIS) in 2013.

Net Financial Result

In 2013, the Company’s net financial result was negative at R$2,512 million compared to a negative net financial result in 2012 of R$2,151 million, basically due to:

• R$220 million decrease in financial income, from R$392 million in 2012 to R$172 million in 2013, mainly due to R$52 million decrease in earnings from financial investments and due to the non-recurring effect of R$115 million in 2012;
• R$192 million increase in financial expenses, from R$2,548 million in 2012 to R$2,740 million, chiefly from the R$277 million effect due to the Company’s adhesion to the tax recovery program (REFIS) in 2013.

Provision for Deferred Income Tax and Social Contribution

In 2013, the Company recorded deferred income tax and social contribution expense of R$74 million, compared to deferred income tax and social contribution income of R$952 million in 2012.

Consolidated Net Income

In 2013, CSN recorded a consolidated net income of R$534 million, an increase of R$1.0 billion compared to the previous year, due to higher gross profit and the aforementioned non-recurring effects.

Comparison of results referring to the fiscal years ended December 31, 2012 and December 31,2011:

Net Revenues from Sales and/or Services

In 2012, the consolidated net revenue totaled R$15,229 million, a decrease of R$1,291 million compared to R$16,520 million recorded in 2011, mainly due to:

· R$1,667 million reduction in net revenues with the Company’s adoption of IFRS 10 and IFRS 11;

· R$376 million in net revenues, 19% increase in steel products sales, which reached 5.8 million tonnes in 2012.

Cost of products sold and services rendered

In 2012, the cost of products sold totaled R$11,259 million, a R$1,458 million increase compared to R$9,801 million recorded in 2011, basically due to:

· R$2,271 million increase in costs of goods sold, with higher volume of steel sold and increase in the production costs of steel and mining sectors;

· R$813 million reduction with the Company’s adoption of IFRS 10 and IFRS 11.

Gross profit

The gross profit totaled R$3,970 million in 2012, a R$2,749 million reduction compared to the gross profit of R$6,719 million recorded in 2011, due to:

· R$376 million increase in net revenues;

· R$2,271 million increase in the cost of products sold;

· R$854 million reduction with the Company’s adoption of IFRS 10 and IFRS 11.

Selling, general and administrative expenses

In 2012, the selling, general and administrative expenses totaled R$1,241 million, a R$61 million increase over 2011, chiefly due to:

· Increased iron ore freight expenses and consolidation of SWT results as of February 2012;

· R$267 million decrease with the Company’s adoption of IFRS 10 and IFRS 11.

Other Operating Income/Expenses

In 2012, “Other Operating Income/Expenses” of the Company recorded a negative result of R$2,651 million, compared to a positive result of R$218 million in 2011, chiefly due to:

· A non-recurring effect of R$2,023 million in 2012 due to the reclassification of accumulated losses of investments in shares recorded as available for sale;

· Non-recurring gain of R$698 million in 2011, referring to the CSN’s divestment in Riversdale Mining Limited’s capital.

Net Financial Result

In 2012, the Company’s net financial result was negative at R$2,151 million, compared to a negative result of R$2,006 million in 2011, chiefly due to the Company's adoption of IFRS 10 and IFRS 11.

Provision for Deferred Income Tax and Social Contribution

In 2012, the Company recorded deferred income tax and social contribution income of R$952 million, and deferred income tax and social contribution expense in 2011 of R$84 million.

Consolidated Net Income

In 2012, the Company recorded losses of R$480 million compared to a net income of R$3,667 million in 2011, chiefly due to:

· Non-recurring effect of R$1,335 million in 2012 net income due to the reclassification of accumulated losses of investments in shares recorded as available for sale;

· Non-recurring gain of R$698 million in 2011 referring to CSN’s divestment in Riversdale Mining Limited’s capital;

· Decrease in the aforementioned gross profit.

Balance Sheet of the Company (consolidated) – R$ thousand:

Comparison of main consolidated equity accounts as of December 31, 2013, December 31, 2012 and December 31, 2011 prepared under the IFRS and CPCs.

Comparison between the balance sheets as of December 31, 2013 and December 31, 2012

Current Assets

Cash and cash equivalents: the balance of cash and cash equivalents was R$9,995 million, 16% down over R$11,892 million recorded on December 31, 2012, mainly composed of financial investments in government and private bonds and investments at first-tier banks. On December 31, 2013, the variation of cash balance of R$1,896 million is chiefly due to R$1,026 million increase in the cash used in financing activities and R$331 million in cash generation deriving from operating activities, partially offset with R$856 million decrease in investment activities, due to the deconsolidation of TLSA, as described in 2013 Cash Flows.

Trade accounts receivable: on December 31, 2013, trade accounts receivable totaled R$2,522 million, 5% down on 2012. This variation is chiefly due to dividends received from Namisa referring to 2011 and reduction of receivable average term, from 32 days in 2012 to 30 days in 2013.

Inventories: On December 31, 2013, CSN’s inventories totaled R$3,161 million, 7% down on December 31, 2012, due to better management of inventories, reducing the inventories average turnover from 78 days in 2012 to 64 days in 2013.

Other current assets: 37% decrease, from R$1,152 million on December 31, 2012 to R$723 million on December 31, 2013, a R$429 million variation, chiefly due to the termination of escrow deposit with CSN Island VII which in December 2012 recorded the amount of R$426 million.

Non-current assets

Deferred taxes: on December 31, 2013, the long-term deferred taxes totaled R$2,770 million, 27% up on 2012. This positive variation of R$593 million is chiefly due to an increase of deferred income tax and social contribution on tax losses generated in 2013.

Investments: on December 31, 2013, the investments account was R$13,487 million, 24% up on the balance recorded on December 31, 2012 of R$10,840 million, basically composed of investments in the jointly-controlled entities Namisa, MRS and CBSI, which previously were proportionally consolidated and now are recorded under the equity method. In addition, due to the partial spin-off of Transnordestina Logística S/A on December 27, 2013 and the resulting effectiveness of a new shareholders’ agreement, the Company no longer consolidates Transnordestina Logística S/A and now record it by the equity method.

Property, plant and equipment: on December 31, 2013, the balance of property, plant and equipment totaled R$14,911 million, a 20% reduction, or R$3,608 million chiefly due to the deconsolidation of property, plant and equipment, mainly works in progress of the jointly-controlled entity Transnordestina Logística S/A.

Liabilities

Trade accounts payable: on December 31, 2013, the balance of trade accounts payable was R$1,102 million, 46% down on December 31, 2012. In the period, the average term of trade accounts payable decreased from 62 days in 2012 to 26 days in 2013, mainly due to higher settlement of suppliers’ invoices with the inauguration of the long steel plant by the end of 2013.

Loans, Borrowings and Debentures: the Company’s consolidated gross indebtedness totaled R$27,746 million, 5% down on R$29,305 million recorded on December 31, 2012. The main factors which influenced the decrease of net indebtedness in the period were:

- Deconsolidation of Transnordestina Logística S.A.’s debt in the amount of R$3,201 million, mostly composed of debentures;

- Full redemption of Guaranteed Bonds issued in 2003, by means of its wholly-owned subsidiary CSN Islands VIII Corp., collateralized by CSN, at an annual rate of 9.75% in the amount of R$1,271 million (principal) and R$62 million (interest rates);

- Other effects which increased net indebtedness by R$309 million.

Pension plan and health insurance: the balance of R$485 million on December 31, 2013 basically refers to the post-employment health insurance, in the amount of R$474 million, and the decrease compared to December 31, 2012 is basically due to an increase of nominal discount rate.

Shareholders’ equity: on December 31, 2013, the shareholders’ equity was R$8,069 million, a decrease of R$938 million compared to shareholders’ equity on December 31, 2012, chiefly due to (i) R$800 million referring to the payment of dividends and interest on equity, (ii) R$400 million reduction referring to the non-controlling interest due to the loss of control and subsequent deconsolidation of Transnordestina Logística S/A (iii) partially offset by comprehensive income of R$331 million.

Comparison between the balance sheets as of December 31, 2012 and December 31, 2011

Current assets

Cash and cash equivalents: mainly composed of financial investments in government, private bonds and investments in first-tier banks. On December 31, 2012, the balance of cash and cash equivalents was R$11,892 million, 22% down on R$15,417 million on December 31, 2011. The variation of cash balance of R$3,525 million is chiefly due to the R$2,553 million reduction in cash and cash equivalents, with the Company’s adoption of IFRS 10 and IFRS 11, besides cash generation deriving from operating activities of R$2,529 million, partially offset by cash used in financing activities of R$856 million and in investment activities of R$3,102 million, as described in 2012 Cash Flows.

Trade accounts receivable: on December 31, 2012, trade accounts receivable totaled R$2,661 million, 64% up on 2011. This variation is chiefly due to a R$867 million increase with the Company’s adoption of IFRS 10 and IFRS 11 and an increase of steel products sale in the domestic and foreign markets.

Inventories: on December 31, 2012, CSN’s inventories totaled R$3,393 million, 9% down on December 31, 2011, due to R$187 million reduction in inventories with the Company’s adoption of IFRS 10 and IFRS 11 and better inventory management.

Non-current assets

Deferred taxes: on December 31, 2012, the long-term deferred taxes totaled R$2,177 million, 18% up on 2011. This positive variation of R$336 million is chiefly due to R$195 million reduction with the Company’s adoption of IFRS 10 and IFRS 11 and an approximate increase of R$478 million in deferred income tax and social contribution over tax losses.

Investments: on December 31, 2012, the investment account was R$10,840 million, 419% up on the balance recorded on December 31, 2011 of R$2,088 million, due to the adoption of IFRS 10 Consolidated Financial Statements as of January 1, 2013, corresponding to CPC 36 (R3) – “Consolidated Financial Statements” and IFRS 11 – Joint Arrangements, corresponding to CPC 19 (R2) - “Joint Ventures”, no longer consolidating its jointly-controlled entities Namisa, MRS Logística and CBSI, and now recording them by the equity method. In addition, the available-for-sale securities recorded a variation 13% up on the balance recorded in December 2011.

Property, plant and equipment: on December 31, 2012, the balance of property, plant and equipment totaled R$18,519 million, a 6% increase chiefly due to the Company’s consolidated investments made in the period, mainly in the projects: (i) expansion of Casa de Pedra mine and Itaguaí Port (R$381 million) and (ii) the construction of long steel plant in Volta Redonda (R$454 million). On the other hand, a reduction of R$1,890 million was recorded due to the Company’s adoption of IFRS 10 and IFRS 11.

Intangible assets: on December 31, 2012, the balance of intangible assets was R$905 million, an increase of R$301 million compared to December 31, 2011, basically due to the goodwill deriving from SWT acquisition in January 2012. On the other hand, a reduction of R$371 million was recorded due the Company’s adoption of IFRS 10 and IFRS 11.

Liabilities

Loans, borrowings and debentures: the Company’s consolidated gross indebtedness totaled R$29,305 million, 5% up on R$27,889 million recorded on December 31, 2011. The main factors that contributed to debt increase in the period were:

- New funding in the amount of R$3,722 million;

- Other effects that increased debt by R$3,363 million.

- Disbursements of R$4,822 million offset these effects with debt amortization.

- R$847 million reduction with the Company’s adoption of IFRS 10 and IFRS 11;

Provisions: on December 31, 2012, this item recorded a balance of R$1,953 million, 5% up on the balance as of December 31, 2011.

Other liabilities: on December 31, 2012, the balance of R$10,591 million is chiefly due to a R$4,981 million increase, with the Company’s adoption of IFRS 10 and IFRS 11, besides tax installment payment, in the amount of R$1,252 million and liabilities with related parties in the amount of R$3,387 million. The liabilities with related parties mainly refer to advance from clients received from the jointly-controlled entity Nacional Minérios S.A., due to the Company’s contractual obligation to supply iron ore and port services.

Pension plan and health insurance: the balance of R$566 million on December 31, 2012 basically refers to the post-employment health insurance, in the amount of R$548 million.

Shareholders’ Equity: on December 31, 2012, the shareholders’ equity was R$9,008 million, R$591 million increase in relation to the shareholders’ equity on December 31, 2011, basically due to an increase of R$2,859 million in the Company’s capital stock approved at the Board of Directors’ meeting of May 10, 2012 and the R$1,753 million variation in other comprehensive income, partially offset by a reduction of R$3,981 million in the profit reserve.

Cash Flows

R$ thousand

As of January 1,2013, with the adoption of IFRS 10 Consolidated Financial Statements, corresponding to CPC 36 (R3) – “Consolidated Financial Statements” and IFRS 11 – Joint Arrangements, corresponding to CPC 19 (R2) - “Joint Ventures, the Company no longer consolidates its jointly-controlled entities Namisa, MRS Logística and CBSI and now record them by the equity method”. For comparison purposes, the 2012 consolidated cash flows were adjusted in order to reflect this change.

Comparison between 2013 and 2012 cash flows

The Company’s free cash flow in 2013 was negative at R$1,896 million, compared to a negative cash flow of R$1,549 million in 2012.

Operating Activities

The generation of operating cash was R$2,198 million and R$2,529 million in 2013 and 2012, respectively. The R$330 million reduction in the cash deriving from operating activities is mainly due to R$269 million increase in the Company’s working capital, basically due to a variation in the trade accounts payable.

Investment Activities

The cash flow used in investment activities was R$2,245 million in 2013 and R$3,102 million in 2012. The R$857 million reduction is chiefly due to:

· Receivables deriving from derivative operations of approximately R$426 million in 2013, due to the settlement of CSN Island VIII’s swap;

· R$301 million variation basically due to the effect of SWT acquisition in 2012;

· R$246 million reduction of investments in fixed assets;

· Deconsolidation of cash and cash equivalents when sharing control of TLSA in the total amount of R$ 146 million.

Financing Activities

The cash flow used in financing activities in 2013 was R$1,881 million. The R$1,025 million variation compared to 2012, due to a reduction of R$1,317 million in funding and amortizations, an increase of R$461 million of dividends and interest on equity, partially offset by R$800 million variation, due to a disbursement in 2012 related to SWT acquisition.

Comparison between 2012 and 2011 cash flows

The Company’s free cash flow in 2012 was negative at R$1,549 million compared to a positive free cash flow of R$5,178 million in 2011.

Operating Activities

The generation of operating cash was R$2,529 million and R$4,202 million in 2012 and 2011, respectively. A R$1,673 million reduction in cash deriving from operating activities, is chiefly due to a R$2,253 million reduction in view of a cash effect of net income and R$580 million reduction in the Company’s working capital.

Investment Activities

The cash flow used in investment activities was R$3,102 million in 2012 and R$5,275 million in 2011. A reduction of R$2,173 million is mainly due to a R$1,664 million reduction of investments in fixed assets.

Financing Activities

The cash flow used in financing activities in 2012 was R$856 million compared to a cash flow generated by financing activities of R$4,741 million in 2011. The difference of R$5,596 million derives from the following factors:

· R$4,303 million reduction in loans and borrowings;

· R$960 million increase in amortizations; and

· R$803 million referring to SWT acquisition.

These effects were partially offset by R$657 million reduction in payments of dividends and interest on equity.

In 2013, Tecar shipped 28.9 million tonnes of own and third parties iron ore and 3.1 million tonnes of coal, coke and other reducers were unloaded, besides 55,000 tonnes of clinker for own consumption.

In 2012, Tecar shipped 27 million tonnes of own and third parties iron ore and 3.2 million tonnes of coal, coke and other reducers were unloaded, besides 87,000 tonnes of clinker for own consumption.

In 2011, Tecar shipped 29.8 million tonnes of own and third parties iron ore and 3.6 million tonnes of coal and coke for own consumption and several clients were unloaded.

2. Steel

Dominating the entire steel production chain, the Company serves several industry segments, with a diversified line of high added-value line of products. The Company produces the most varied types of galvanized covered anti-corrosion materials and less susceptible to price fluctuations in the international market.

The main markets serviced by the Company are: automotive; civil construction; large chains (distribution); white goods (household appliances); OEM (capital goods) and metal packages.

The Company has five lines of galvanization in Brazil, thus distributed: three lines in Presidente Vargas steel mill, in Volta Redonda, one line in Porto Real, state of Rio de Janeiro and another one in CSN branch located in the state of Paraná, in Araucária, where it operates cold strip mill and pre-painting processes.

CSN also relies on three foreign subsidiaries: CSN LLC, installed in Terre Haute, in the State of Indiana, USA, which operates cold strip mill and galvanization, Lusosider in Paio Pires, Portugal, which also produces covered rolled steel and Stahlwerk Thüringen GmbH (“SWT”), installed in Unterwellenborn, Germany, which produces steel shapes, with annual production capacity of 1.1 million tonnes. SWT acquisition in 2012 sets CSN’s entry into the long steel segment.

CSN has an installed capacity of 1 million tonnes/year of tin plate, largely used in the package sector. The Company also produces the Galvalume, steel covered with zinc and aluminum, which combines brightness and durability, besides pre-painted steel, both largely applied in the civil construction and white goods sectors.

At the end of 2013, a unit in Volta Redonda was inaugurated, which manufacturers, long steel, with annual production capacity of 500,000 tonnes, among concrete reinforcing bars and wire rod.

2.1 - Presidente Vargas steel mill

The Company’s main steel unit, the Presidente Vargas steel mill has an annual installed capacity of 5.6 million tonnes of raw steel. In 2013, the production of raw steel reached 4.5 million tonnes. The production of rolled steel reached 4.6 million tonnes. In 2012, 4.8 million tonnes of raw steel were produced and 4.6 million tonnes of rolled steel. In 2011, 4.9 million tonnes of raw steel and 4.7 million tonnes of rolled steel were produced.

2.2- Porto Real Branch

CSN’s branch in Porto Real is strategically located between the cities of Rio de Janeiro and São Paulo, mainly serving the automotive sector, with a wide range of international standard products and services. It relies on one line of hot galvanization, cutting services and a modern laser solder center. In 2013, its production reached 354,000 tonnes, basically targeting the automotive sector, while in 2012, the production reached 300,000 tonnes and in 2011, the production totaled 242,000 tonnes.

2.3 – Cia. Metalic Nordeste

CSN’s subsidiary, Cia. Metalic Nordeste, with head offices in the state of Ceará, is a manufacturer of two piece steel beverage cans, also produces aluminum cover caps for beverage cans.

In 2013, Metalic sold 507 million cans and 681 million caps, while in 2012 and 2011, 518 million and 686 million cans were sold, respectively.

2.4- Companhia Metalúrgica Prada

Founded in 1936, Companhia Metalúrgica Prada (“Prada”) was acquired by CSN in 2006. With the Latin America’s largest industrial complex concerned with the production of steel packages and lithograph services, Prada has two plants located in São Paulo where its lithographic complex is located and the manufacturing of packages for chemical aerosol products and one in Uberlândia-MG concerned with food packages, representing a relevant tin mill steel client of CSN. Prada also operates in the distribution and services market. Currently, in the Southeast region, it owns a Services Center and six distribution centers of productions, such as: sheets, blanks, coils, UDC shapes, welded tubes, steel deck and metal roof for the most diverse industry segments. Prada is amongst the largest companies in the flat steel distribution and processing segment and by means of a wide range of cutting services, structure and logistics, adding value to CSN’s product portfolio.

Its lines are capable of meeting volumes and technical specifications required by food, chemistry, aerosol and services industries.

In 2013, Prada by means of the distribution segment sold 386,000 thousand tonnes of products, besides providing processing services in 43,000 tonnes of steel. In 2012 and 2011, 435,000 and 468,000 tonnes were sold, respectively, through the distribution segment.

2.5- Companhia Siderúrgica Nacional, LLC

Companhia Siderúrgica Nacional LLC (“CSN LLC”) located in the United States administers a cold rolled steel and galvanization mill, installed in the State of Indiana. In 2013, 297,000 tonnes of cold rolled and galvanized coils were produced and sold in LLC. While in 2012 and 2011, this unit produced 258,000 tonnes and 260,000 tonnes, respectively of these same products.

2.6- Lusosider Projectos Siderurgicos S.A.

Installed in Paio Pires, Portugal, Lusosider Projectos Siderúrgicos, S.A. (“Lusosider”) operates the cold rolling and hot galvanization. In 2013, it produced and sold in the European market, 276,000 tonnes of galvanized products, cold rolled steel and pickled oil/oiled coil, while in 2012 and 2011, these volumes reached 208,000 and 242,000 tonnes, respectively.

2.7- Stahlwerk Thüringen GmbH (SWT)

In 2012, CSN acquired Stahlwerk Thüringen GmbH (“SWT”), consolidating its results as of February 2012. Located in Unterwellenborn, Germany, the plant is specialized in the production of steel shapes employed in construction.  In 2013, SWT produced and sold in the European market, 755,000 tonnes of steel shapes and in 2012, this volume added 724,000 tonnes of shapes.

3. Logistics

3.1 Port

Tecon, containers and general cargo terminal, administered by Sepetiba Tecon S.A., a CSN’s subsidiary, in 2013 handled over 257,000 containers, 33.8 thousand tonnes of steel products and 21.6 thousand tonnes of general cargo.

3.2 Railway

CSN holds interest in three railway companies: MRS Logística S.A. (“MRS”), FTL – Ferrovia Transnordestina Logística S.A. (“FTL”) and Transnordestina Logística S.A. (“TLSA”).

MRS

MRS operates the railway which connects Casa de Pedra mine to Presidente Vargas steel mill and to the terminals at the Itaguaí Port. In 2013, MRS carried 156 million tonnes, volume 0.43% higher than in 2012 when 155 million tonnes were carried, a volume 2% higher than in 2011.

CSN directly and indirectly holds 33.27% of MRS Logística’s voting capital, which operates the former Southeast Network of Rede Ferroviária Federal S.A (RFFSA), in the Rio de Janeiro – São Paulo - Belo Horizonte connection.

MRS’s main performance segment is those clients referred to as heavy haul (ore, coal and coke loads), carrying approximately 115 million tonnes, corresponding to 74% of total amount carried by the Company, as well as long-term agreements.

In the containers sector, MRS maintained its position among the largest domestic railway sector carriers, by carrying 61.6 thousand containers in 2013.

The railway transportation services rendered by MRS are essential in the supply of raw materials and flow of final products. The total amount of iron ore, coal and coke consumed by Presidente Vargas steel mill is carried by MRS, as well as part of steel produced by CSN.

TLSA

TLSA, with the federal government’s support is building the railway Nova Transnordestina, with an extension of 1,728 km, which will connect the railway terminal in Eliseu Martins (PI) to the Ports of Suape (PE) and Pecém (CE), crossing several cities in the states of Piauí, Pernambuco and Ceará.

The railway’s projected operation capacity is 30 million tonnes/year which must play an important role in the development of the Northeast region and create a logistics option for the local economic development, in the oil and byproducts, grains, mining, agriculture and other sectors. On December 31, 2013 CSN’s stake in TLSA was 77.3%.

On December 27, 2013, the partial spin-off of TLSA was approved, as well as the merger of spun-off portion by FTL – Ferrovia Transnordestina Logística. The spin-off comprises part of a business reorganization proposal and resulted in the separation to FTL, of almost the total assets connected to the Network I which comprises the railway stretches between the cities of São Luís to Mucuripe, Arrojado to Recife, Itabaiana to Cabedelo and Recife to Macau, and the maintenance in TLSA of assets and liabilities connected to the Network II which comprises the railway stretches between the cities of Missão Velha – Salgueiro, Salgueiro – Trindade, Trindade – Eliseu Martins, Salgueiro – Porto de Suape and Missão Velha – Porto de Pecém.  

FTL

CSN holds 88.4% interest in FTL, operator of RFFSA’s former northeast network, which crosses seven states: Maranhão, Piauí, Ceará, Rio Grande do Norte, Paraíba, Pernambuco and Alagoas, with total extension of 4,534 km, with current transportation capacity of approximately two million tonnes/year, pointing out the transportation of fuel, cement, aluminum and ore, among other products.

In December 2013, first month of FTL operation, 100,000 tonnes were carried, pointing out the transportation of fuel, cement, aluminum and ore, among other products, especially in the stretch between São Luís, Teresina and Fortaleza.

4. Energy

CSN is one of Brazil’s largest electricity industrial consumers, which ranks it in an outstanding position together with other large Electro-intensive Groups. Thus, since 1999, CSN has been investing in electricity generation projects, aiming to ensure its self-sufficiency. Its assets in this segment are Itá hydroelectric power plant in Santa Catarina, where CSN holds 29.5%, corresponding to an average 167 MW, by means of 48.75% equity interest in Itá Energética S. A., the Igarapava hydroelectric power plant in the state of Minas Gerais, with 23 MW capacity and 17.9% interest and the Thermoelectric co-generation center, at the Presidente Vargas steel mill, in Volta Redonda, with installed capacity of 235 MW. This unit uses own residual gases from steel production as fuel. 

These assets ensure to CSN a generation capacity sufficient to meet the group’s electricity needs.

The installation of a top-rotor shaft is under conclusion and will add 21 MW to the Group's current generation capacity. Thinking of future expansions, CSN still studies new investments in electricity generation, aiming its self-sufficiency.

5. Cement

The cement industry is complementary to steel industry and supplies the entire civil construction segment, a sector of essential relevance for the country’s economic development.

CSN Cimentos S.A. (“CSN Cimentos”), the Company’s subsidiary, by means of its first plant located in Volta Redonda/RJ sold approximately 2 million tonnes of cement in 2013, a 4% growth compared to the previous year.

The cement produced by CSN of CP-III type is currently traded in the region of Baixada Fluminense, south of the state of Rio de Janeiro, Paraíba Valley and Greater São Paulo, besides the south of the state of Minas Gerais. Currently, CSN has six distribution centers, essential factor to increase sales dissemination and ensure its competitiveness.

Net Revenues

Tables and graphs below show the Company’s consolidated net revenue:

(ii) Factors materially affecting the operating results

The most relevant sources of the Company’s revenues derive from the production and trading of steel products and iron ore. Thus, Brazil’s and the world’s economic activity level has strong influence on its results.

The largest amount of the Company’s steel sales occurs in the domestic market. Therefore, a relevant factor of influence on results is the domestic economy’s growth pace, especially the most intensive sectors in the use of steel, especially the automotive, white goods sectors and civil construction. These sectors are directly influenced by the availability and cost of credit to consumer. The macroeconomic politics decision, such as the level of interest rates, or which affect credit, such as taxes or other mechanisms are continuously monitored. The impact of infrastructure works is also a relevant factor, whether related to events, such as the World Cup and the Olympic Games or the growth of productive sectors, such as oil or civil construction, PAC works, amongst others.

Another factor of influence is the balance between world’s steel supply and demand, which determines the price levels and also influences the imports level.

In the mining sector, results are directly influenced by the balance between world’s iron ore supply and demand. The highest amount of the Company’s net revenues refers to the sale of iron ore deriving from exports mainly to Asia, especially China.

Referring to costs, metal coal and coke prices, metals such as aluminum, zinc and tin, as well as the foreign exchange rates, are relevant factors in steel production. In case of mining and logistics (railway transportation), the cost of diesel is a relevant component and as the Company has expansion projects, the cost of equipment and services is an essential variable to be monitored.