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Companhia Siderúrgica Nacional (CSN) (BOVESPA: CSNA3) (NYSE: SID) announces its results for the third quarter of 2006 (3Q06), in accordance with Brazilian accounting principles and denominated in Brazilian Reais. The comments presented herein refer to consolidated results and comparisons refer to the third quarter of 2005 (3Q05), unless otherwise stated. On September 29, the Real/Dollar exchange rate was R$2.1742.

Main Highlights

• Net revenue of R$2.6 billion in the third quarter, higher than in the 3Q05 and 2Q06 due to higher prices and sales volumes.
  Year-to-date net revenue totaled R$ 6.5 billion.
• EBITDA of R$ 1.1 billion in the quarter, already including the adjustments for lost profits.
• Net income of R$1.1 billion in the first nine months, confirm that operations have fully recovered following the accident to Blast Furnace #3 (BF-3), in January, 2006. Third-quarter net income was at R$334 million.
• Third-quarter domestic sales and exports improved 16% and 90%, respectively, over the previous three months.
• Sales mix concentrated in the domestic market, which accounted for 63% of third-quarter sales.
• Average 3Q06 prices increased by 8% in Brazil and 6% abroad.
• Market share of the Distribution segment climbs from 29% to 34%.
• Quarter-over-quarter increase in raw material costs resulting from the return to operations of BF-3.
• Investments of R$380 million in the third-quarter and R$1,115 million over the nine months. In the quarter, the main investments went to technological improvements, repairs and maintenance, “Casa de Pedra” Mine expansion project, and the acquisition of the remaining 50% of Lusosider Projetos Siderúrgicos S.A, in Portugal.
• Anticipated payments of dividends of R$333 million, in 3Q06. Year-to-date, the total amount of distributed dividends is R$2,072 million.
• Lost profits (BF-3 insurance claim): In 3Q06, The Company booked R$253 million under “Other Operating Income/Expenses”. Until September 2006, adjustments for lost profits totaled R$923 million.

Consolidated Highlights		3Q05		2Q06		3Q06		9M05		9M06
Crude Steel Production (thousand t)		1.317		393		1.259		3.846		2.192
Sales Volume (thousand t)		1.181		933		1.261		3.515		3.191
Domestic Market		613		687		794		2.277		2.086
Exports		568		246		466		1.238		1.105
Net Revenue per unit (R$/t)		1.671		1.706		1.805		1.922		1.739
Financial Data (RS MM)
Net Revenue		2.222		1.918		2.593		7.630		6.464
Gross Income		907		436		913		3.505		2.086
EBITDA		920		477		912		3.541		2.176
Adjusted EBITDA		920		924		1.142		3.541		3.014
Net Income		517		409		334		1.653		1.084
Net Debt (R$ MM)		5.176		6.048		6.239		5.176		6.239

Consolidated Highlights		3Q06 X 3Q05		3Q06 X 2Q06		9M06 X 9M05
		(Ch.%)		(Ch.%)		(Ch.%)
Crude Steel Production (thousand t)		-4,4%		220,2%		-43,0%
Sales Volume (thousand t)		6,7%		35,1%		-9,2%
Domestic Market		29,5%		15,5%		-8,4%
Exports		-17,9%		89,8%		-10,7%
Net Revenue per unit (R$/t)		8,0%		5,8%		-9,5%
Financial Data (RS MM)
Net Revenue		16,7%		35,2%		-15,3%
Gross Income		0,6%		109,1%		-40,5%
EBITDA		-0,9%		91,4%		-38,5%
Adjusted EBITDA		24,1%		23,6%		-14,9%
Net Income		-35,3%		-18,4%		-34,4%
Net Debt (R$ MM)		20,5%		3,2%		20,5%

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Bovespa: CSNA3 R$ 62.00/share		Investor Relations Team
NYSE: SID US$ 28.43/ADR (1 ADR = 1 share)		José Marcos Treiger		David Moise Salama
Total shares = 272,067,946		Head of Investor Relations		Investor Relations Manager
Market Cap: R$ 16.9 billion / US$ 7.8 billion		treiger@csn.com.br		david.salama@csn.com.br
Prices on 09/29/2006		(55 11) 3049-7502		(55 11) 3049-7588

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Steel Sector & Economic Scenario

     On the international market, the third quarter was characterized by weaker demand and lower service-center inventories. Some plants have already announced production cut-backs in order to reduce pressures on prices. The market, therefore, is not expecting significant price swings in the fourth quarter.

     The Brazilian steel market performed better than its international counterpart. Domestic sales moved up 20.0% and 0.8%, respectively, over the 3Q05 and 2Q06 and by 1.7% year-on-year, in the first nine months of the current year. The main demand drivers were the auto industry, distribution, home-appliance & OEM (Original Equipment Manufacturing) market and, to a lesser extent, the civil construction industry.

     The auto industry sector presented a positive performance, with third-quarter consumption remaining flat over the previous three months and climbing 16% year-on-year. In year-to-date terms, consumption moved up 3.4% over the 9M05.

      The Distribution segment also played an important part, growing by 29% over the 3Q05 and 3.5% year-on-year in the first nine months, due to the improved performance of auto-parts and welded tubes.

     The home-appliance & OEM markets recorded growth of 24%, 3.8% and 4% over the 3Q05, 2Q06 and 9M05, respectively, pushed by industrial machinery and equipment, electrical and electronic goods, and home appliances.

     Civil Construction also did well, although more modestly, moving up 5.4 year-on-year in the third quarter and 8% over the previous three months.

     All in all, confirming predictions, the 3^rd quarter was one of increased sales as various sectors which integrate the steel consumption chain staged a recovery, leading to expectations of a probable annual growth.

Output

     In CSN, the third quarter was marked by the return to operations of CSN’s BF-3, which reached full capacity in the first two weeks of August.

     Crude and rolled steel output totaled 1,259,000 and 1,090,000 tonnes, respectively, 4% and 1% below the 3Q05. However, consumption of slabs acquired on the market led to an increase in the delivery of rolled products, when compared to 2005.

     Rolled product deliveries from the Presidente Vargas Steel Mill (UPV), in Volta Redonda, totaled 1,090,000 tonnes, in line with the 3Q05 figure. CSN Paraná plant and GalvaSud delivered 67,000 and 76,000 tonnes, respectively, 14% and 55% up year-on-year.

     In the first nine months, crude and rolled production fell by 1,654,000 and 480,000 tonnes, respectively, with deliveries dropping by 503,000 tonnes year-to-date, pulled down by the BF-3 accident, in January, 2006.

Output
(data in thousand t)		3Q05		2Q06		3Q06		9M05		9M06
Presidente Vargas Mill (UPV)
Crude Steel		1.317		393		1.259		3.846		2.192
Finished Products *		1.106		744		1.090		2.003		1.523
CSN Paraná *		59		67		67		205		210
GalvaSud *		49		46		76		208		180

* Products delivered for sale

“Return to operations of Blast Furnace #3, at full capacity”

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Sales

      The third quarter saw an important recovery in domestic sales volume, which moved up 16% over the 2Q06 and 30% year-on-year, and CSN’s total market share increased by 3 percentage points when compared to the same quarter last year. It is also worth noting that the export recovery, coupled with the BF-3’s return to operations, occurred when international prices were at higher levels.

     Sales volume per segment remained in line with the previous quarter. The distribution sector once again headed the consumption rankings, accounting for 40% of sales, followed by packaging, home appliances & OEM, civil construction and the auto industry, with 21%,15%,10% and 13%, respectively.

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Prices

     In the third quarter, average international steel prices have shown some weakening trend in North America and Asia after peaking last July. In Europe, however, prices closed the quarter at their June levels, due to effective production controls by the region’s more disciplined manufacturers.

     With BF-3 back on line, CSN’s exports climbed back to 37% of total sales volume. Thanks to the Company’s strategy of maintaining a local presence in the USA and Europe, it was able to successfully introduce an average of 10% price increase in those markets, versus the previous three months.

“Recovery of domestic and export sales volume”

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     The scenario was equally positive in Brazil – as a consequence of improved sales, CSN’s prices moved up 7% over the 2Q06. Given that the sales mix remained unaltered, the increase was due entirely to the interim price increases announced by CSN, which were well accepted by the local market. Prices are expected to remain at the same level in the 4^th quarter, 2006. Although, revenue could be slightly higher in 4Q06 due to a probable improvement in the domestic sales mix. CSN remains committed to increasing its share of the domestic market, while guaranteeing its competitiveness.

Net Revenue

      Third-quarter net revenue climbed by 35% over the 2Q06, due to the substantive upturn in sales volume and prices both at home and abroad. The year-on-year comparison, nine-month terms, was clearly affected by the reduction in output triggered by the BF-3 accident, last January.

“Third-quarter net revenue climbed by 35% over the 2Q06”

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Production Costs (Parent Company)

     Total production costs reached R$1,392 million in the third quarter, 17% up on the 2Q06 and 21% higher than the same period last year.

     In the quarter-over-quarter comparison, the total costs reflect a higher level of raw material consumption added to General Manufacturing Costs, although the impact was partially offset by the reduction in the purchase of slabs. On the other hand, the upturn over the 3Q05 was due to increased slab purchases.

     As for the raw materials themselves, average coal prices remained flat over the second quarter at US$136/t, while the inventory cost averaged US$120/t, in September, 2006. Coke prices averaged US$214/t for the quarter (it is important to highlight that no coke was consumed in the 2Q06), and the average inventory cost was US$232/t, at the close of the quarter.

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“CSN has the lowest cost of slab production globally”

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Operating Expenses/Income

     The main item was, once more, the adjustment for lost profits in the “Other Net Operating Income/Expenses” line. In the third quarter, a total adjustment of R$253 million was registered. Year-to-date, these adjustments totaled R$923 million or US$424 million.

     Based on specific data collected and analyzed by the insurers, the Company, under conservative assumptions, registered in “Other Net Operating Income/Expenses” the amount of R$923 million related to estimated indemnity for lost profits year-to-date.

     The policy’s maximum indemnification limit is US$750 million, including lost profits and material damages. It is worth noting that CSN has received US$75 million from insurance companies to date, in advance.

EBITDA

      Third-quarter EBITDA was R$912 million, or R$1,142 million if we include the adjustments for lost profits, or 24% up on the 2Q06. The year-to-date figure, also including these adjustments, totaled R$3,014 million.

     It is important to notice that the Company has not calculated the adjusted EBITDA margin since the adjustments for lost profits were not booked separately in each line impacted by the insurance claim (Net Revenue and Cost of Goods Sold), but only in Other Operating Expenses/Income. The adjustment would, therefore, lead to a distorted figure.

Consolidated EBITDA variation		3Q06 x 2Q06		3Q06 x 3Q05
EBITDA (var. %)		+91,5		-0,01
*Adjusted EBITDA (var. %)		+23,6		+24,1
*EBITDA considering the effect of the lost profits provision

“Even without adjustments, the 3Q06 EBITDA remained in line

with the 2005 average EBITDA level”

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Net Financial Result and Debt

     Third-quarter net debt increased by R$191 million over the previous three months, due to R$333 million in dividend payments, to CAPEX investments of R$380 million in 3Q06 and R$316 million in the cost of debt. As a result, the net debt/EBITDA ratio – using 2005 EBITDA, which was not affected by non-recurring events – climbed from 1.32x, in the second quarter, to 1.36x.

     The 3Q06 decline in the gross debt was due to the amortization of short-term loans, especially the US$300 million due in August, 2006. In terms of financial cost and average maturity, the average accumulated cost of debt was 12 p.a. in Brazilian Reais, or 76.4% of the CDI (The Interbank Interest Reference Rate) and the average maturity was 7.5 years for the Gross Debt.

     In 3Q06, Net Financial Expense was affected by operations with derivatives, since those assets are adjusted under mark to market conditions. When comparing the 3Q06 with the 2Q06, it is important to highlight the non recurrent effect of a reversion of a provision, which took place in the second quarter of the current year and producing a positive impact on the financial result of 2Q06, alone.

Income Taxes

Third-quarter income taxes totaled R$48 million, R$70 million less than the previous three months.

Net Income

     Third quarter net income was of R$334 million, 18% lower than the R$409 million reported on 2Q06. Year-to-date, CSN’s net income totaled R$1,084 million.

Capex

     Third-quarter investments totaled R$380 million, R$73 million of which went to projects related to the “Casa de Pedra” expansion (mine, port and pelletizing plant); R$138 million to technological upgrades/ repairs/maintenance ; R$29 million to MRS railway system and R$69 million to the acquisition of the remaining 50% of Lusosider, in Portugal. Year-to-date investments totaled more than R$1 billion (R$1,115 million).

Working Capital

     Working capital increased by R$99 million over the second quarter. This increase was mainly caused by a higher level of Accounts Receivable (sales improvement in the domestic and export market), which was partially offset by the upturn in Payments to Suppliers (due to the acquisitions of slabs).

“Year-to-date CAPEX already totaled R$1,115 million ”

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WORKING CAPITAL VARIATION:						In R$ MM
Account		2Q06		3Q06		Change
Assets		3.345		3.892		+547
Cash equivalents		157		159		+2
Accounts Receivables		917		1.311		+394
Domestic Market		795		976		+181
Export Market		238		464		+226
Allowance for Doubtful		(115)		(129)		(14)
Inventories		2.271		2.422		+151
Liability		1.769		2.217		(448)
Suppliers		1.256		1.599		(343)
Salaries and Social Contribution		104		119		(15)
Deffered Taxes		409		499		(90)
Working Capital		1.576		1.675		+99

Capital Markets

     Through September 2006, CSN’s shares have appreciated by 39%, despite the 9% slide in the third quarter, affected then by doubts surrounding the global economy (US interest rates) and political uncertainties in Brazil, itself.

Capital Markets - CSNA3/SID
		3Q05		4Q05		1Q06		2Q06		3Q06
N# of shares		272.067.946		272.067.946		272.067.946		272.067.946		272.067.946
Market Capitalization
Closing price (R$/share)		45,88		44,58		63,80		68,23		62,00
Closing price (US$/share)		16,30		23,25		21,05		31,70		32,57
Market Capitalization (R$ million)		12.483		12.129		17.359		18.562		16.868
Market Capitalization (US$ million)		5.617		5.182		7.991		8.577		7.758
Variation
CSNA3 (%)		34,1		(2,8)		43,1		6,9		(9,1)
SID (%)		(32,9)		42,6		(9,5)		50,6		2,7
Ibovespa - index		31.583		33.455		37.951		36.630		36.449
Ibovespa - variation (%)		26,1		5,9		13,4		(3,5)		(0,5)
Volume
Average daily (n# of shares)		869.511		825.845		844.315		695.989		528.695
Average daily (R$ Thousand)		39.741		37.706		50.665		48.106		35.177
Average daily (n# of ADR´s)		812.392		773.876		1.007.920		1.042.424		758.238
Average daily (US$ Thousand)		15.715		15.384		27.910		32.878		22.959
Source: Economática

“In the last five years, CSN’s share price appreciated over by 1,000%”

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Capital Markets

Recent Developments

• Investment grade:
     Following a review of CSN’s fundamentals by the risk rating agency Fitch, the Company was upgraded from BB+ to BBB- and granted Investment Grade status in Foreign Currency.

• Merger between CSN LLC and Wheeling-Pittsburgh Corporation:
     On October 25th, 2006, Companhia Siderúrgica Nacional ("CSN") and Wheeling-Pittsburgh Corporation ("WPC") announced that they have entered into a definitive agreement to seal the strategic alliance between these two companies. The merger agreement is expected to create a strong, well-capitalized steel producer with a more flexible cost structure, broader value-added product offering, access to CSN’s product and process technology, and significant long-term earnings potential. This definitive agreement reflects the strategic arrangement announced on August 2006.

     On November 6th, 2006, CSN offered new enhanced conditions to WPC shareholders. Under these, for each share of Wheeling-Pittsburgh Corporation, shareholders will have the choice of electing to receive either i) a share of common stock in the new combined company (“A Share”); ii) a Depositary Share that requires CSN to pay $30 per share in cash four years after the merger (“B Share”); or iii) a combination of A and B Shares. Each B share will represent the same class of common stock as the A Share that is deposited with a depositary and will be subject to a mandatory purchase by CSN for $30 per share on the 4th anniversary of the merger. The total number of B Shares will be limited to approximately 50 percent of the total of A and B Shares issued to Wheeling-Pittsburgh shareholders in the merger. CSN and the Company are in discussions to finalize the enhancement, subject to an amendment of the existing definitive agreements.

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     The merger implementation still depends on certain conditions: election of WPC’s new Board of Directors, scheduled to take place on November 17, 2006; the approval of this transaction by local authorities and the approval of the Merger by WPC’s shareholders, on a Special Meeting of Stockholders scheduled for January 2007.

• CSN Cimentos:
     The Rio de Janeiro State Environmental Control Commission (CECA) and Environmental Engineering Foundation (FEEMA) granted CSN Cimentos S.A. an environmental license for the installation of its plant in the municipality of Volta Redonda.
     CSN Cimentos S.A. also signed an equipment supply contract with the Chinese firms- Shenyang Heavy Machinery Group and Chengdu Design Institute.

• Lusosider – Portugal:
     On August 31^st, 2006, all the shares in Lusosider Projectos Siderúrgicos S.A. held by Corus Staal B.V., a subsidiary of Corus Group Plc were transferred to CSN Steel Corp., a CSN subsidiary. Outright control of Lusosider Projectos Siderúrgicos S.A. was acquired for EUR 25 million.
     The transaction reinforces the Company’s globalization strategy of gaining access to the world’s leading steel consuming markets.

• Renewal of ISO9001 Certification:
     On November 1^st, 2006, the Presidente Vargas Plant’s ISO9001 TS 1649 certification (specific to the automotive sector) was renewed for three years by the certifying body ABS, following an audit of all the processes involved in the plant’s quality system.

• New Executive Appointment:
     Juarez Saliba Avelar, Director of Mining, was appointed Executive Officer for the mining area for a two-year term.
     Before joining CSN, Mr. Avelar was CEO of FERTECO Mineração and headed CVRD’s Southern and Northern Systems, respectively.

*     *     *

 

 

 

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Third Quarter 2006 Earnings Release Webcasts

CSN will host presentations to discuss its third quarter 2006 earnings as follows:

Portuguese Presentation  November 9 – Thursday  10:00 am – Brasília  7:00 am – US-ET  Dial-in:(11) 4003-9004  Code: CSN

English Presentation  November 9 – Thursday  12:00 pm – Brasília  9:00 am – US-ET  Dial-in: (1-973) 935-8893  Code: 7953256

Companhia Siderúrgica Nacional, located in the State of Rio de Janeiro, Brazil, is a steelcomplex comprising investments in infrastructure and logistics whose operations include captivemines, an integrated steel mill, service centers, ports and railways. With a total annualproduction capacity of 5.6 million tonnes of crude steel and consolidated gross revenues of R$12.3 billion in 2005, CSN is also the only tin-plate producer in Brazil and one of the five largesttin-plate producers worldwide. It is also one of the world’s most profitable steelmakers.

Certain of the statements contained herein are forward-looking statements, which express or imply results, performance or events that are expected in the future. They include future results that may be implied by historical results, the statements under “Outlook”, the expected cost of net debt compared to the CDI in 2005. Actual results, performances or events may differ materially from those expressed or implied by the forward-looking statements, as a result of several factors, such as the general and economic conditions in Brazil and other countries, interest rate and exchange rate levels, protectionist measures in the US, Brazil and other countries, changes in laws and regulations and general competitive factors (on a global, regional or national basis).

 

 

Eight pages with tables to follow

 

 

*     *     *

 

 

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		3Q2005		1Q2006		2Q2006		3Q2006		9M2005		9M2006
Gross Revenue		2.714.016		2.408.857		2.413.126		3.211.791		9.440.566		8.033.774
Gross Revenue deductions		(491.654)		(455.910)		(494.924)		(618.883)		(1.810.526)		(1.569.717)
Net Revenus		2.222.362		1.952.947		1.918.202		2.592.908		7.630.040		6.464.057
Domestic Market		1.472.519		1.345.188		1.508.637		1.815.855		5.491.752		4.669.680
Export Market		749.843		607.759		409.565		777.053		2.138.288		1.794.377
Cost of Good Sold (COGS)		(1.315.291)		(1.216.783)		(1.481.707)		(1.679.998)		(4.125.490)		(4.378.488)
COGS, excluding depreciation		(1.096.646)		(983.655)		(1.263.440)		(1.447.788)		(3.470.084)		(3.694.883)
Depreciation allocated to COGS		(218.645)		(233.128)		(218.267)		(232.210)		(655.406)		(683.605)
Gross Profit		907.071		736.164		436.495		912.910		3.504.550		2.085.569
Gross Margin (%)		40,8%		37,7%		22,8%		35,2%		45,9%		32,3%
Selling Expenses		(138.930)		(110.942)		(90.282)		(142.521)		(411.539)		(343.745)
General and andminstrative expenses		(66.827)		(70.884)		(87.949)		(90.491)		(207.775)		(249.324)
Depreciation allocated to SG&A		(13.145)		(12.752)		(13.121)		(13.123)		(40.072)		(38.996)
Other operation income (expense), net		148.977		136.255		408.398		179.363		76.889		724.016
Operating income before financial equity interests		837.146		677.841		653.541		846.138		2.922.053		2.177.520
Net Financial Result		(38.679)		(106.634)		(101.138)		(436.994)		(356.709)		(644.766)
Financial Expenses		(301.920)		(343.806)		(238.431)		(402.344)		(1.006.968)		(984.581)
Financial Income		49.869		(23.363)		51.633		(24.282)		193.551		3.988
Net monetary and forgain exchange variations		213.372		260.535		85.660		(10.368)		456.708		335.827
Equity interest in subsidiary		(19.049)		(10.789)		(24.571)		(28.204)		(35.192)		(63.564)
Operating Income (loss)		779.418		560.418		527.832		380.940		2.530.152		1.469.190
Non-operating income (expenes), Net		2.391		201		(363)		1.578		(4.175)		1.416
Income Before Income and Social Contribution Taxes		781.809		560.619		527.469		382.518		2.525.977		1.470.606
(Provition)/Credit for Income Tax		(192.493)		(165.028)		(95.808)		(30.281)		(644.522)		(291.117)
(Provition)/Credit for Social Contribution		(72.423)		(55.173)		(22.197)		(17.994)		(228.528)		(95.364)
Minority Interest		-		-		-		(15)		-		(15)
Net Income (Loss)		516.893		340.418		409.464		334.228		1.652.927		1.084.110
EBITDA*		919.959		787.466		476.531		912.108		3.540.642		2.176.105
EBITDA Margin (%)		41,4%		40,3%		24,8%		35,2%		46,4%		33,7%
Adjusted EBITDA		919.959		947.744		924.125		1.141.794		3.540.642		3.013.664

* EBITDA = Gross income excluding selling, general and adminstrative expenses added to depreciation, amortization and exhaustion.

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		3Q2005		1Q2006		2Q2006		3Q2006		9M2005		9M2006
Gross Revenue		2.219.569		1.872.179		1.801.541		2.598.645		8.030.429		6.272.365
Gross Revenue deductions		(418.926)		(367.492)		(405.611)		(503.733)		(1.622.679)		(1.276.836)
Net Revenus		1.800.643		1.504.687		1.395.930		2.094.912		6.407.750		4.995.529
Domestic Market		1.271.697		1.103.673		1.255.470		1.521.054		4.987.990		3.880.197
Export Market		528.946		401.014		140.460		573.858		1.419.760		1.115.332
Cost of Good Sold (COGS)		(1.075.699)		(1.003.240)		(1.157.006)		(1.356.242)		(3.438.714)		(3.516.488)
COGS, excluding depreciation		(883.341)		(798.130)		(970.833)		(1.160.456)		(2.863.998)		(2.929.419)
Depreciation allocated to COGS		(192.358)		(205.110)		(186.173)		(195.786)		(574.716)		(587.069)
Gross Profit		724.944		501.447		238.924		738.670		2.969.036		1.479.041
Gross Margin (%)		40,3%		33,3%		17,1%		35,3%		46,3%		29,6%
Selling Expenses		(62.740)		(63.662)		(59.682)		(78.285)		(189.114)		(201.629)
General and andminstrative expenses		(45.007)		(48.350)		(61.731)		(67.315)		(144.660)		(177.396)
Depreciation allocated to SG&A		(5.722)		(5.769)		(6.091)		(6.061)		(18.254)		(17.921)
Other operation income (expense), net		113.194		130.065		434.305		165.578		60.917		729.948
Operating income before financial equity interests		724.669		513.731		545.725		752.587		2.677.925		1.812.043
Net Financial Result		62.253		(150.433)		(130.820)		(312.035)		212.956		(593.288)
Financial Expenses		(141.040)		(271.419)		(140.516)		(310.968)		(658.939)		(722.903)
Financial Income		(237.615)		(340.591)		(11.477)		(61.719)		(492.406)		(413.787)
Net monetary and forgain exchange variations		440.908		461.577		21.173		60.652		1.364.301		543.402
Equity interest in subsidiary		(129.596)		82.948		25.373		35.217		(645.111)		143.538
Operating Income (loss)		657.326		446.246		440.278		475.769		2.245.770		1.362.293
Non-operating income (expenes), Net		2.466		104		(130)		1.253		(4.017)		1.227
Income Before Income and Social Contribution Taxes		659.792		446.350		440.148		477.022		2.241.753		1.363.520
(Provition)/Credit for Income Tax		(141.370)		(109.125)		(59.095)		(42.164)		(530.611)		(210.384)
(Provition)/Credit for Social Contribution		(55.717)		(39.197)		(10.764)		(26.219)		(194.231)		(76.180)
Net Income (Loss)		462.705		298.028		370.289		408.639		1.516.911		1.076.956
EBITDA*		809.555		594.545		303.684		788.856		3.209.978		1.687.085
EBITDA Margin (%)		45,0%		39,5%		21,8%		37,7%		50,1%		33,8%
Adjusted EBITDA		809.555		754.823		751.278		1.018.542		3.209.978		2.524.644
Additional Information
Delibetated Dividends and Interest on Equity		-		-		1.324.087		-		2.303.045		1.324.087
Advanced Dividends and Interest on Equity		-		-		415.000		333.000		-		748.000
Proposed Dividends and Interest on Equity		62.721		43.796		46.698		41.667		184.176		132.161
Number of Shares** - thousands		264.431		257.413		257.413		257.413		264.431		257.413
Earnings Loss per Share - R$		1,75		1,16		1,44		1,59		5,74		4,18

* EBITDA = Gross income excluding selling, general and adminstrative expenses added to depreciation, amortization and exhaustion.
** Excluding shares held in treasury

13

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		Parent Company				Consolidated
		09/30/2006		06/30/2006		09/30/2006		06/30/2006
Current Assets		5.978.372		5.603.694		8.799.894		9.083.267
Cash		69.697		43.378		159.026		156.528
Trade Accounts Receiveble		1.518.533		935.404		1.310.875		916.988
Inventory		1.557.134		1.625.502		2.422.014		2.271.499
Marketable securities		1.203.225		1.528.252		2.958.527		4.042.235
Deferred Income Tax and Social Contribution		294.845		301.971		398.593		340.269
Insurance claims		924.377		636.226		924.377		636.226
Other		410.561		532.961		626.482		719.522
Long-term Assets		1.436.975		1.350.912		1.665.150		1.563.228
Permanet Assets		17.635.745		17.712.728		14.444.235		14.514.597
Investments		5.449.106		5.400.580		298.848		319.403
PP&E		12.026.372		12.139.383		13.888.985		13.919.724
Deffered		160.267		172.765		256.402		275.470
TOTAL ASSETS		25.051.092		24.667.334		24.909.279		25.161.092
Current Liabilities		6.328.788		6.016.224		5.164.300		5.480.598
Loans and Financing		3.481.542		3.494.263		2.311.982		3.173.764
Suppliers		1.345.541		1.086.213		1.598.656		1.256.491
Taxes and Contributions		545.602		531.565		763.197		696.574
Dividends Payable		133.893		92.342		133.893		92.342
Other		822.210		811.841		356.572		261.427
Long-term Liabilities		12.006.041		11.968.959		13.115.670		13.010.512
Loans and Financing		6.097.333		6.203.099		7.188.950		7.217.021
Provisions for contingences		3.291.341		3.143.168		3.383.070		3.233.232
Deffered Income and Social Contributions Taxes		2.070.115		2.101.432		2.093.513		2.125.617
Other		547.252		521.260		450.137		434.642
Future Period Results		-		-		5.361		5.930
Minority Interest		-		-		144		-
Shareholdres' Equity		6.716.263		6.682.151		6.623.804		6.664.052
Capital		1.680.947		1.680.947		1.680.947		1.680.947
Capital Reserve		23.248		23.248		23.248		23.248
Revaluation Reserve		4.337.850		4.398.642		4.337.850		4.398.642
Earnings Reserve		973.800		973.800		911.051		911.051
Treasury Stock		(676.721)		(676.721)		(676.721)		(676.721)
Retained Earnings		377.139		282.235		347.429		326.885
TOTAL LIABILITIES AND SHAREHOLDERS´		25.051.092		24.667.334		24.909.279		25.161.092
EQUITY

14

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CASH FLOW STATEMENT
CONSOLIDATED - Corporate Law - thounsands of R$

		3Q2005		2Q2006		3Q2006		9M2005		9M2006
Cash Flow from Operating Activities		533.604		660.578		745.166		2.462.147		1.705.541
Net Income for the period		516.893		409.464		334.228		1.652.927		1.084.110
Net exchange and monetary variations		(449.237)		(62.776)		19.398		(1.256.653)		(505.832)
Provision for financial expenses		271.972		236.051		237.744		726.816		659.714
Depreciation, exhaustion and amortization		229.881		231.389		245.449		693.568		722.716
Equity results		19.049		24.570		28.205		35.192		63.565
Deferred income taxes and social contributions		86.298		194.230		(206.468)		(55.082)		(1.646)
Provisions		(340.765)		(813.323)		95.818		(106.853)		(851.156)
Working Capital		199.513		440.973		(9.208)		772.232		534.070
Accounts Receivable		(7.678)		140.733		(407.707)		359.283		35.663
Inventory		89.732		(412.403)		(151.308)		367.361		(513.396)
Suppliers		(18.170)		221.297		339.188		237.666		353.449
Taxes		(209.920)		(35.825)		185.904		134.749		270.393
Others		345.549		527.171		24.715		391.739		387.961
Cash Flow from Investment Activities		(288.727)		(576.039)		(387.519)		(761.368)		(1.208.837)
Investments		(81)		(90.748)		(7.206)		(81.430)		(93.626)
Fixed Assets/Deferred		(288.646)		(485.291)		(380.313)		(679.938)		(1.115.211)
Cash Flow from Financing Activities		416.410		466.715		(1.357.572)		(874.355)		(1.342.614)
Issuances		1.868.355		1.674.924		300.330		4.321.812		2.828.967
Amortizations		(984.127)		(214.588)		(1.056.587)		(1.819.330)		(1.450.164)
Interests Expenses		(201.617)		(193.086)		(268.340)		(537.469)		(612.582)
Dividends/Interest on own capital		(512)		(800.535)		(332.975)		(2.268.931)		(2.069.725)
Shares in treasury		(265.689)		-		-		(570.437)		(39.110)
Free Cash Flow		661.287		551.254		(999.925)		826.424		(845.910)

15

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Net Financial Result
Consolidated - Corporate Law - thousands of R$

		3Q2005		2Q2006		3Q2006		9M2005		9M2006
Financial Expenses		(301.920)		(238.431)		(402.344)		(1.006.968)		(984.581)
Loans and financing		(275.506)		(242.638)		(215.767)		(725.889)		(659.714)
Local currency		(44.383)		54.887		(70.169)		(135.112)		(180.521)
Foreign currency		(231.123)		(297.525)		(145.598)		(590.777)		(479.193)
Taxes		25.206		59.709		(125.326)		(155.757)		(197.034)
Other financial expenses		(51.620)		(55.502)		(61.251)		(125.322)		(127.833)
Financial Income		49.869		51.633		(24.282)		193.551		3.988
Income from cash investments		215.716		52.658		(133.614)		40.516		(40.896)
Other income		(165.307)		(1.025)		109.332		153.035		44.884
Exchange and monetary variations		213.372		85.660		(10.368)		456.708		335.827
Net monetary change		8.132		(24.933)		(6.530)		158		(39.860)
Net exchange change		205.240		110.593		(3.838)		456.550		375.687
Net Financial Result		(38.679)		(101.138)		(436.994)		(356.709)		(644.766)

Net Financial Result
Parent Company - Corporate Law - thousands of R$

		3Q2005		2Q2006		3Q2006		9M2005		9M2006
Financial Expenses		(141.040)		(140.516)		(310.968)		(658.939)		(722.903)
Loans and financing		(108.210)		(44.149)		(62.153)		(294.998)		(188.692)
Local currency		(43.529)		(63.102)		(51.788)		(129.550)		(161.531)
Foreing currency		(64.681)		18.953		(10.365)		(165.448)		(27.161)
Transaction with subsidiaries		(61.655)		(146.284)		(121.749)		(216.824)		(326.580)
Taxes		31.263		51.734		(123.068)		(138.129)		(197.938)
Other financial expenses		(2.438)		(1.817)		(3.998)		(8.988)		(9.693)
Financial Income		(237.615)		(11.477)		(61.719)		(492.406)		(413.787)
Transaction with subsidiaries		-		-		10.886		-		10.886
Income from cash investments		(276.619)		7.459		(464.937)		(565.375)		(449.656)
Other income		39.004		(18.936)		392.332		72.969		24.983
Exchange and monetary variations		440.908		21.173		60.652		1.364.301		543.402
Net monetary change		4.516		(19.754)		(3.895)		(1.529)		(33.119)
Net exchange change		436.392		40.927		64.547		1.365.830		576.521
Net Financial Result		62.253		(130.820)		(312.035)		212.956		(593.288)

16

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SALES VOLUME
Consolidated - Thousand of tons

		3Q2005		2Q2006		3Q2006		9M2005		9M2006
DOMESTIC MARKET		613		687		794		2.277		2.086
Slabs		11		7		6		30		25
Hot Rolled		192		248		294		868		734
Cold Rolled		70		110		135		313		343
Galvanized		177		177		200		549		537
Tin Plate		163		145		158		518		447
EXPORT MARKET		568		246		466		1.238		1.105
Slabs		5		24		61		5		84
Hot Rolled		237		30		108		375		218
Cold Rolled		91		29		40		144		112
Galvanized		156		140		198		489		531
Tin Plate		78		23		59		224		160
TOTAL MARKET		1.181		933		1.261		3.515		3.191
Slabs		16		31		67		35		109
Hot Rolled		430		278		402		1.243		952
Cold Rolled		161		139		176		457		455
Galvanized		333		316		399		1.038		1.068
Tin Plate		241		169		217		742		607

SALES VOLUME
Parent Company - Thousand of tons

		3Q2005		2Q2006		3Q2006		9M2005		9M2006
DOMESTIC MARKET		637		707		800		2.399		2.118
Slabs		11		7		6		30		25
Hot Rolled		200		243		289		897		714
Cold Rolled		131		144		153		486		418
Galvanized		132		161		184		463		498
Tin Plate		163		151		167		523		463
EXPORT MARKET		468		104		427		995		858
Slabs		5		-		118		41		118
Hot Rolled		270		35		125		444		273
Cold Rolled		94		15		35		168		96
Galvanized		29		38		98		143		237
Tin Plate		69		16		49		198		134
TOTAL MARKET		1.105		810		1.226		3.393		2.976
Slabs		16		7		125		71		143
Hot Rolled		470		278		414		1.341		988
Cold Rolled		225		159		188		654		514
Galvanized		161		199		282		606		735
Tin Plate		232		167		217		721		597

17

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NET REVENUE PER UNIT
Consolidated - In R$/tonne

		3Q2005		2Q2006		3Q2006		9M2005		9M2006
DOMESTIC MARKET		2.019		1.755		1.889		2.061		1.821
Slabs		700		651		643		787		648
Hot Rolled		1.553		1.297		1.361		1.705		1.333
Cold Rolled		1.696		1.546		1.637		2.020		1.587
Galvanized		2.304		2.001		2.179		2.325		2.071
Tin Plate		2.488		2.451		2.771		2.475		2.568
EXPORT MARKET		1.296		1.568		1.662		1.667		1.584
Slabs		833		726		1.092		833		990
Hot Rolled		999		1.119		1.320		1.163		1.179
Cold Rolled		1.169		1.450		1.534		1.383		1.488
Galvanized		1.457		1.785		1.958		1.885		1.769
Tin Plate		2.056		1.836		1.969		2.239		1.904
TOTAL MARKET		1.671		1.706		1.805		1.922		1.739
Slabs		743		709		1.049		794		912
Hot Rolled		1.247		1.278		1.350		1.541		1.298
Cold Rolled		1.398		1.526		1.613		1.819		1.562
Galvanized		1.907		1.906		2.069		2.118		1.921
Tin Plate		2.348		2.366		2.552		2.404		2.393

NET REVENUE PER UNIT
Parent Company - In R$/tonne

		3Q2005		2Q2006		3Q2006		9M2005		9M2006
DOMESTIC MARKET		1.827		1.647		1.772		1.939		1.700
Slabs		700		651		643		787		649
Hot Rolled		1.424		1.259		1.342		1.607		1.295
Cold Rolled		1.493		1.398		1.554		1.792		1.456
Galvanized		2.188		1.909		2.138		2.307		1.963
Tin Plate		2.372		2.275		2.356		2.385		2.319
EXPORT MARKET		1.124		1.317		1.341		1.406		1.289
Slabs		615		-		1.046		1.267		1.046
Hot Rolled		909		1.023		1.213		1.076		1.058
Cold Rolled		1.104		1.119		1.315		1.277		1.199
Galvanized		1.498		1.549		1.669		1.704		1.520
Tin Plate		1.875		1.598		1.740		2.069		1.629
TOTAL MARKET		1.529		1.605		1.622		1.783		1.581
Slabs		672		651		1.026		1.065		977
Hot Rolled		1.128		1.230		1.303		1.431		1.229
Cold Rolled		1.330		1.372		1.509		1.659		1.408
Galvanized		2.065		1.840		1.974		2.164		1.820
Tin Plate		2.224		2.212		2.216		2.298		2.164

18

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EXCHANGE RATE
In R$/US$

		1Q2005		2Q2005		3Q2005		4Q2005		1Q2006		2Q2006		3Q2006
Average		2,6652		2,4818		2,3428		2,2509		2,1959		2,1852		2,1713
% change		-4,3%		-6,9%		-5,6%		-3,9%		-2,4%		-0,5%		-0,6%
End of Period		2,6662		2,3504		2,2222		2,3407		2,1724		2,1643		2,1742
% change		0,4%		-11,8%		-5,5%		5,3%		-7,2%		-0,4%		0,5%

19

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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.

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