FORM 6-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Ternium S.A.

(Translation of Registrant’s name into English)

(Address of principal executive offices)

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

Form 20-F þ     Form 40-F o

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 o     No þ

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b):

 

 

The attached material is being furnished to the Securities and Exchange Commission pursuant to Rule 13a-16 and Form 6-K under the Securities Exchange Act of 1934, as amended.

This report contains Ternium S.A.’s consolidated financial statements as of March 31, 2009.

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.

TERNIUM S.A.

By:		/s/ Roberto Philipps   Name: Roberto Philipps				By:		/s/ Daniel Novegil   Name: Daniel Novegil
		Title: Chief Financial Officer						Title: Chief Executive Officer

Dated: May 5, 2009

TERNIUM S.A.

CONSOLIDATED CONDENSED INTERIM
FINANCIAL STATEMENTS AS OF MARCH 31, 2009
AND FOR THE THREE-MONTH PERIODS
ENDED MARCH 31, 2009 AND 2008

46a, Avenue John F. Kennedy, 2^nd floor
L — 1855
R.C.S. Luxembourg: B 98 668

TERNIUM S.A.
Consolidated condensed interim financial statements as of March 31, 2009
and for the three-month periods ended March 31, 2009 and 2008
(All amounts in USD thousands)

CONSOLIDATED CONDENSED INTERIM INCOME STATEMENTS

				Three-month period
				ended March 31,
		Notes		2009				2008
				(Unaudited)
Continuing operations
Net sales		3			1,174,655				1,942,647
Cost of sales		3 & 4			(1,044,572	)			(1,447,745	)
Gross profit		3			130,083				494,902
Selling, general and administrative expenses		3 & 5			(136,166	)			(145,494	)
Other operating (expenses) income, net		3			(20,400	)			9,980
Operating (loss) income		3			(26,483	)			359,388
Interest expense					(27,706	)			(44,278	)
Interest income					5,096				12,109
Other financial (expenses) income, net		6			(165,005	)			2,985
Equity in earnings of associated companies					541				444
(Loss) income before income tax expense					(213,557	)			330,648
Income tax
Current and deferred income tax benefit (expense )					96,539				(106,145	)
Reversal of deferred statutory profit sharing		9			—				96,265
(Loss) income from continuing operations					(117,018	)			320,768
Discontinued operations
Income from discontinued operations		11			—				159,937
(Loss) profit for the period					(117,018	)			480,705
Attributable to:
Equity holders of the Company					(93,182	)			422,125
Minority interest					(23,836	)			58,580
					(117,018	)			480,705
Weighted average number of shares outstanding					2,004,743,442				2,004,743,442
Basic and diluted (losses) earnings per share for profit attributable to the equity holders of the Company (expressed in USD per share)					(0.05	)			0.21

The accompanying notes are an integral part of these consolidated condensed interim financial statements. These consolidated condensed interim financial statements should be read in conjunction with our audited Consolidated Financial Statements and notes for the fiscal year ended December 31, 2008.

TERNIUM S.A.
Consolidated condensed interim financial statements as of March 31, 2009
and for the three-month periods ended March 31, 2009 and 2008
(All amounts in USD thousands)

CONSOLIDATED CONDENSED INTERIM STATEMENTS OF COMPREHENSIVE INCOME

		Three-month period ended March 31, 2009												Three-month period ended March 31, 2008
		Attributable to												Attributable to
		the Company’s				Minority								the Company’s				Minority
		equity holders				interest				Total				equity holders				interest				Total
(Loss) profit for the period			(93,182	)			(23,836	)			(117,018	)			422,125				58,580				480,705
Other comprehensive income:
Currency translation adjustment			(145,197	)			(53,474	)			(198,671	)			27,858				901				28,759
Cash flow hedges			7,742				985				8,727				—				—				—
Income tax relating to cash flow hedges			(2,168	)			(276	)			(2,444	)			—				—				—
Other comprehensive (loss) income for the period, net of tax			(139,623	)			(52,765	)			(192,388	)			27,858				901				28,759
Total comprehensive (loss) income for the period (unaudited)			(232,805	)			(76,601	)			(309,406	)			449,983				59,481				509,464

The accompanying notes are an integral part of these consolidated condensed interim financial statements. These consolidated condensed interim financial statements should be read in conjunction with our audited Consolidated Financial Statements and notes for the fiscal year ended December 31, 2008.

TERNIUM S.A.
Consolidated condensed interim financial statements as of March 31, 2009
and for the three-month periods ended March 31, 2009 and 2008
(All amounts in USD thousands)

CONSOLIDATED CONDENSED STATEMENT OF FINANCIAL POSITION

		Notes		March 31, 2009								December 31, 2008
				(Unaudited)
ASSETS
Non-current assets
Property, plant and equipment, net		7			3,935,622								4,212,313
Intangible assets, net		8			1,036,068								1,136,367
Investments in associated companies					6,035								5,585
Other investments, net					16,518								16,948
Receivables, net					116,348				5,110,591				120,195				5,491,408
Current assets
Receivables					296,730								248,991
Derivative financial instruments					—								1,516
Inventories, net					1,344,973								1,826,547
Trade receivables, net					549,055								622,992
Available for sale assets — discontinued operations		11 (ii)			1,318,900								1,318,900
Other investments					90,876								90,008
Cash and cash equivalents					1,080,417				4,680,951				1,065,552				5,174,506
Non-current assets classified as held for sale									16,519								5,333
									4,697,470								5,179,839
Total assets									9,808,061								10,671,247
EQUITY
Capital and reserves attributable to the company’s equity holders									4,364,747								4,597,370
Minority interest									887,115								964,094
Total equity									5,251,862								5,561,464
LIABILITIES
Non-current liabilities
Provisions					21,339								24,400
Deferred income tax					701,802								810,160
Other liabilities					144,857								148,690
Derivative financial instruments					51,309								65,847
Borrowings					2,074,092				2,993,399				2,325,867				3,374,964
Current liabilities
Current tax liabilities					124,138								194,075
Other liabilities					90,480								103,376
Trade payables					411,063								438,711
Derivative financial instruments					73,594								57,197
Borrowings					863,525				1,562,800				941,460				1,734,819
Total liabilities									4,556,199								5,109,783
Total equity and liabilities									9,808,061								10,671,247

Contingencies, commitments and restrictions to the distribution of profits are disclosed in Note 10.

The accompanying notes are an integral part of these consolidated condensed interim financial statements. These consolidated condensed interim financial statements should be read in conjunction with our audited Consolidated Financial Statements and notes for the fiscal year ended December 31, 2008.

TERNIUM S.A.
Consolidated condensed interim financial statements as of March 31, 2009
and for the three-month periods ended March 31, 2009 and 2008
(All amounts in USD thousands)

CONSOLIDATED CONDENSED INTERIM STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

		Attributable to the Company’s equity holders (1)
						Initial public				Revaluation				Capital stock				Currency
						offering				and other				issue discount				translation				Retained								Minority				Total
		Capital stock (2)				expenses				reserves				(3)				adjustment				earnings				Total				interest				Equity
Balance at January 1, 2009			2,004,743				(23,295	)			1,702,285				(2,324,866	)			(528,485	)			3,766,988				4,597,370				964,094				5,561,464
(Loss) profit for the period																							(93,182	)			(93,182	)			(23,836	)			(117,018	)
Other comprehensive (loss) income for the period											5,574								(145,197	)							(139,623	)			(52,765	)			(192,388	)
Total comprehensive (loss) income for the period											5,574								(145,197	)			(93,182	)			(232,805	)			(76,601	)			(309,406	)
Acquisition of business (4)											182																182				(378	)			(196	)
Balance at March 31, 2009 (unaudited)			2,004,743				(23,295	)			1,708,041				(2,324,866	)			(673,682	)			3,673,806				4,364,747				887,115				5,251,862

As permitted by IFRS 3, the Company accounted for this acquisition under the economic entity model, which requires that the acquisition of an additional equity interest in a controlled subsidiary be accounted for at its carrying amount, with the difference arising on purchase price allocation being recorded directly in equity.

Dividends may be paid by Ternium to the extent distributable retained earnings calculated in accordance with Luxembourg law and regulations exist. Therefore, retained earnings included in these consolidated condensed interim financial statements may not be wholly distributable. See Note 10 (iii).

The accompanying notes are an integral part of these consolidated condensed interim financial statements. These consolidated condensed interim financial statements should be read in conjunction with our audited Consolidated Financial Statements and notes for the fiscal year ended December 31, 2008.

TERNIUM S.A.
Consolidated condensed interim financial statements as of March 31, 2009
and for the three-month periods ended March 31, 2009 and 2008
(All amounts in USD thousands)

CONSOLIDATED CONDENSED INTERIM STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (continued)

		Attributable to the Company’s equity holders (1)
						Initial public				Revaluation				Capital stock				Currency
						offering				and other				issue discount				translation				Retained								Minority				Total
		Capital stock (2)				expenses				reserves (3)				(3)				adjustment				earnings				Total				interest				Equity
Balance at January 1, 2008			2,004,743				(23,295	)			1,946,963				(2,324,866	)			(110,739	)			2,959,874				4,452,680				1,805,243				6,257,923
Profit for the period																							422,125				422,125				58,580				480,705
Other comprehensive income for the period																			27,858								27,858				901				28,759
Total comprehensive income for the period																			27,858				422,125				449,983				59,481				509,464
Balance at March 31, 2008 (unaudited)			2,004,743				(23,295	)			1,946,963				(2,324,866	)			(82,881	)			3,381,999				4,902,663				1,864,724				6,767,387

Dividends may be paid by Ternium to the extent distributable retained earnings calculated in accordance with Luxembourg law and regulations exist. Therefore, retained earnings included in these consolidated condensed interim financial statements may not be wholly distributable. See Note 10 (iii).

The accompanying notes are an integral part of these consolidated condensed interim financial statements. These consolidated condensed interim financial statements should be read in conjunction with our audited Consolidated Financial Statements and notes for the fiscal year ended December 31, 2008.

TERNIUM S.A.
Consolidated condensed interim financial statements as of March 31, 2009
and for the three-month periods ended March 31, 2009 and 2008
(All amounts in USD thousands)

CONSOLIDATED CONDENSED INTERIM STATEMENT OF CASH FLOWS

				Three-month period
				ended March, 31
		Notes		2009				2008
				(Unaudited)
Cash flows from operating activities
Income from continuing operations					(117,018	)			320,768
Adjustments for:
Depreciation and amortization		7 & 8			94,429				105,044
Income tax accruals less payments					(148,004	)			(67,342	)
Equity in earnings of associated companies					(541	)			(444	)
Interest accruals less payments					570				(87,685	)
Impairment charge		10 (ii)			27,022				—
Changes in provisions					(1,196	)			1,224
Changes in working capital					371,291				(230,138	)
Net foreign exchange losses (gains) and others					182,770				(39,700	)
Net cash provided by operating activities					409,323				1,727
Cash flows from investing activities
Capital expenditures		7 & 8			(68,298	)			(100,508	)
Proceeds from the sale of property, plant and equipment					347				662
Increase in other investments					(868	)			(806	)
Acquisition of business					(196	)			—
Proceeds from the sale of discontinued operations		11 (i)			—				722,523
Discontinued operations		11 (iv)			—				32,166
Net cash (used in) provided by investing activities					(69,015	)			654,037
Cash flows from financing activities
Proceeds from borrowings					74,219				104,984
Repayments of borrowings					(395,910	)			(891,163	)
Net cash used in financing activities					(321,691	)			(786,179	)
Increase/(Decrease) in cash and cash equivalents					18,617				(130,415	)
Movement in cash and cash equivalents
At January 1,					1,065,552				1,125,830
Effect of exchange rate changes					(3,752	)			971
Increase/(Decrease) in cash and cash equivalents					18,617				(130,415	)
Cash & cash equivalents of discontinued operations at March 31, 2008					—				(157,894	)
Cash and cash equivalents at March 31,					1,080,417				838,492

The accompanying notes are an integral part of these consolidated condensed interim financial statements. These consolidated condensed interim financial statements should be read in conjunction with our audited Consolidated Financial Statements and notes for the fiscal year ended December 31, 2008.

TERNIUM S.A.
Notes to the Consolidated Condensed Interim Financial Statements

INDEX TO THE NOTES TO THE CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS

1 General information and basis of presentation		9
2 Accounting policies		9
3 Segment information		10
4 Cost of sales		12
5 Selling, general and administrative expenses		12
6 Other financial (expenses) income, net		13
7 Property, plant and equipment, net		13
8 Intangible assets, net		13
9 Deferred statutory profit sharing		14
10 Contingencies, commitments and restrictions on the distribution of profits		14
11 Discontinued operations		15
12 Related party transactions		19
13 Recently issued accounting pronouncements		20

TERNIUM S.A.
Notes to the Consolidated Condensed Interim Financial Statements

1 General information and basis of presentation

Ternium S.A. (the “Company” or “Ternium”), a Luxembourg Corporation (Societé Anonyme), was incorporated on December 22, 2003 under the name of Zoompart Holding S.A. to hold investments in flat and long steel manufacturing and distributing companies. The extraordinary shareholders’ meeting held on August 18, 2005, changed the corporate name to Ternium S.A.

Following a corporate reorganization carried out during fiscal year 2005, in January 2006 the Company successfully completed its registration process with the United States Securities and Exchange Commission (“SEC”). As from February 1, 2006, the Company’s shares are listed in the New York Stock Exchange.

The name and percentage of ownership of subsidiaries that have been included in consolidation in these Consolidated Condensed Interim Financial Statements is disclosed in Note 2 to the audited Consolidated Financial Statements for the year ended December 31, 2008.

Certain comparative amounts have been reclassified to conform to changes in presentation in the current period.

The preparation of consolidated condensed interim financial statements requires management to make estimates and assumptions that might affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the balance sheet dates, and also the reported amounts of revenues and expenses for the reported periods. Actual results may differ from these estimates.

Material intercompany transactions and balances have been eliminated in consolidation. However, the fact that the functional currency of the Company’s subsidiaries differ, results in the generation of foreign exchange gains (losses) that are included in the consolidated condensed interim income statement under “Other financial (expenses) income, net”.

These Consolidated Condensed Interim Financial Statements were approved by the Board of Directors of Ternium on May 4, 2009.

2 Accounting policies

These Consolidated Condensed Interim Financial Statements have been prepared in accordance with IAS 34, “Interim Financial Reporting”. These Consolidated Condensed Interim Financial Statements should be read in conjunction with the audited Consolidated Financial Statements for the year ended December 31, 2008, which have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board.

Recently issued accounting pronouncements were applied by the Company as from their respective dates.

These Consolidated Condensed Interim Financial Statements have been prepared following the same accounting policies used in the preparation of the audited Consolidated Financial Statements for the year ended December 31, 2008, except for the application of the following accounting pronouncements, which became effective on January 1, 2009:

1) Comprehensive income

Ternium has applied IAS 1 revised that, among other changes, has incorporated the following:

(a)

all changes in equity arising from transactions with owners in their capacity as owners (i.e. owner changes in equity) have been presented separately from non-owner changes in equity. Under IAS 1 revised, an entity is not permitted to present components of comprehensive income (i.e. non-owner changes in equity) in the statement of changes in equity;

(b)		income and expenses have been presented in two statements (a separate income statement and a statement of comprehensive income), separately from owner changes in equity;
(c)		components of other comprehensive income have been displayed in the statement of comprehensive income; and
(d)		total comprehensive income has been presented in the financial statements.

TERNIUM S.A.
Notes to the Consolidated Condensed Interim Financial Statements (Contd.)

2 Accounting policies (continued)

2) Borrowing costs

Beginning on January 1, 2009, and as required by IAS 23 revised, Ternium capitalizes the borrowing costs incurred to finance construction, acquisition or production of qualifying assets. In the case of specific borrowings, Ternium determines the amount of borrowing costs eligible for capitalization as the actual borrowing costs incurred on that borrowing during the period less any investment income on the temporary investment of those borrowings. For general borrowings, Ternium determines the amount of borrowing costs eligible for capitalization by applying a capitalization rate to the expenditures on that asset. The capitalization rate is the weighted average of the borrowing costs applicable to the borrowings that are outstanding during the period, other than borrowings made specifically for the purpose of obtaining a qualifying asset. The amount of borrowing costs that Ternium capitalizes during a period will not exceed the amount of borrowing costs incurred during that period.

At March 31, 2009, the capitalized borrowing costs are not material.

3 Segment information

Reportable operating segments

For management purposes, the Company is organized on a worldwide basis into the following segments: flat steel products, long steel products and others.

The flat steel products segment comprises the manufacturing and marketing of hot rolled coils and sheets, cold rolled coils and sheets, tin plate, welded pipes, hot dipped galvanized and electro-galvanized sheets, pre-painted sheets and other tailor-made products to serve its customers’ requirements.

The long steel products segment comprises the manufacturing and marketing of billets (steel in its basic, semi-finished state), wire rod and bars.

The other products segment includes products other than flat and long steel, mainly pig iron, pellets and pre-engineered metal buildings.

		Flat steel				Long steel
		products				products				Other				Total
		(Unaudited)
Three-month period ended March 31, 2009
Net sales			996,795				148,193				29,667				1,174,655
Cost of sales			(928,424	)			(97,690	)			(18,458	)			(1,044,572	)
Gross profit			68,371				50,503				11,209				130,083
Selling, general and administrative expenses			(119,627	)			(12,747	)			(3,792	)			(136,166	)
Other operating (expenses) income, net			(21,625	) (*)			952				273				(20,400	)
Operating (loss) income			(72,881	)			38,708				7,690				(26,483	)
Depreciation — PP&E			63,877				8,200				1,693				73,770

TERNIUM S.A.
Notes to the Consolidated Condensed Interim Financial Statements (Contd.)

3 Segment information (continued)

		Flat steel				Long steel
		products				products				Other				Total
		(Unaudited)
Three-month period ended March 31, 2008
Net sales			1,661,606				227,994				53,047				1,942,647
Cost of sales			(1,251,855	)			(164,812	)			(31,078	)			(1,447,745	)
Gross profit			409,751				63,182				21,969				494,902
Selling, general and administrative expenses			(124,873	)			(15,706	)			(4,915	)			(145,494	)
Other operating income, net			6,582				2,847				551				9,980
Operating income			291,460				50,323				17,605				359,388
Depreciation — PP&E			74,406				9,346				1,511				85,263

Geographical information

There are no revenues from external customers attributable to the Company’s country of incorporation (Luxembourg). Ternium sells its products to three main geographical areas: South and Central America, North America, and Europe and others. The North American area comprises principally United States, Canada and Mexico. The South and Central American area comprises principally Argentina, Brazil, Colombia, Chile, Paraguay and Ecuador.

		South and
		Central				North				Europe
		America				America				and others				Total
		(Unaudited)
Three-month period ended March 31, 2009
Net sales			372,908				700,177				101,570				1,174,655
Depreciation — PP&E			29,197				44,570				3				73,770
Three-month period ended March 31, 2008
Net sales			681,356				1,251,336				9,955				1,942,647
Depreciation — PP&E			32,576				52,678				9				85,263

TERNIUM S.A.
Notes to the Consolidated Condensed Interim Financial Statements (Contd.)

4 Cost of sales

		Three-month period ended March 31,
		2009								2008
		(Unaudited)
Inventories at the beginning of the year			1,826,547								1,904,489
Adjustment corresponding to inventories from discontinued operations			—				1,826,547				(455,013	)			1,449,476
Translation differences							(102,090	)							11,920
Plus: Charges for the period
Raw materials and consumables used and other movements							320,055								1,270,173
Services and fees							28,471								35,229
Labor cost							81,706								102,097
Depreciation of property, plant and equipment							72,625								83,679
Amortization of intangible assets							5,433								5,590
Maintenance expenses							44,102								62,552
Office expenses							1,322								1,901
Freight and transportation							5,686								11,192
Insurance							2,206								1,942
(Recovery) Provision for obsolescence							(22,176	)							1,485
Valuation allowance							123,058								—
Recovery from sales of scrap and by-products							(4,358	)							(19,922	)
Others							6,958								14,277
Less: Inventories at the end of the period			(1,344,973	)							(2,119,653	)
Adjustment corresponding to inventories from discontinued operations			—				(1,344,973	)			535,807				(1,583,846	)
Cost of sales							1,044,572								1,447,745

5 Selling, general and administrative expenses

		Three-month period
		ended March 31,
		2009				2008
		(Unaudited)
Services and fees			11,305				12,305
Labor cost			36,220				45,173
Depreciation of property plant and equipment			1,145				1,584
Amortization of intangible assets			15,226				14,191
Maintenance expenses			1,617				2,401
Taxes			15,775				15,184
Office expenses			7,051				6,635
Freight and transportation			43,172				41,703
Decrease of allowances for doubtful accounts			(601	)			(321	)
Others			5,256				6,639
Selling, general and administrative expenses			136,166				145,494

TERNIUM S.A.
Notes to the Consolidated Condensed Interim Financial Statements (Contd.)

6 Other financial (expenses) income, net

		Three-month period
		ended March 31,
		2009				2008
		(Unaudited)
Net foreign exchange (losses) gains (i)			(160,534	)			40,236
Change in fair value of derivative instruments			(1,431	)			(20,906	)
Debt issue costs			(1,394	)			(7,189	)
Others			(1,646	)			(9,156	)
Other financial (expenses) income, net			(165,005	)			2,985

7 Property, plant and equipment, net

		Three-month period ended March 31,
		2009								2008
		(Unaudited)
At the beginning of the year			4,212,313								6,776,630
Adjustments corresponding to PP&E from discontinued operations			—				4,212,313				(1,975,269	)			4,801,361
Currency translation differences							(250,524	)							45,073
Additions							61,027								89,642
Disposals							(507	)							(413	)
Depreciation charge							(73,770	)							(85,263	)
Transfers							(12,917	)							—
At the end of the period							3,935,622								4,850,400

8 Intangible assets, net

		Three-month period ended March 31,
		2009								2008
		(Unaudited)
At the beginning of the year			1,136,367								1,449,320
Adjustments corresponding to intangible assets from discontinued operations			—				1,136,367				(12,731	)			1,436,589
Currency translation differences							(59,889	)							20,920
Additions							7,271								10,866
Amortization charge							(20,659	)							(19,781	)
Impairment charge (see note 10 (ii))							(27,022	)							—
At the end of the period							1,036,068								1,448,594

TERNIUM S.A.
Notes to the Consolidated Condensed Interim Financial Statements (Contd.)

9 Deferred statutory profit sharing

As mentioned in Note 4 (n) to the audited Consolidated Financial Statements at December 31, 2008, Mexican laws require local companies to pay its employees a profit sharing bonus calculated on a basis similar to that used for local income tax purposes. The Company accounted for temporary differences arising between the statutory calculation and the reported expense determined under IFRS in a manner similar to calculation of deferred income tax.

In 2008, one of Ternium’s Mexican subsidiaries (Hylsa S.A. de C.V., “Hylsa”) entered into a spin off that became effective on March 31, 2008. After this corporate reorganization, all of Hylsa’s employees are included in the payroll of a company that is expected to generate non-significant taxable income and non-significant temporary differences. The Company agreed to pay its employees a bonus salary that will be calculated on a basis similar to that used for income tax purposes. Accordingly, during the three-month period ended March 31, 2008, the Company reversed the outstanding balance of the liability as of December 31, 2007 (amounting to USD 96 million) within Income tax (expense) benefit line item in the Consolidated Condensed Interim Income Statement.

10 Contingencies, commitments and restrictions on the distribution of profits

This note should be read in conjunction with Note 27 to the Company’s audited Consolidated Financial Statements for the year ended December 31, 2008. Significant changes or events since the date of issue of such financial statements are as follows:

(i) Siderar

(a) Expansion project

Within the investment plan to increase its production capacity, Siderar invested as of March 31, 2009, USD 202.9 million and additionally has entered into several commitments to acquire new production equipment for a total consideration of USD 187.2 million. Furthermore, related to operating activities and to the investment plan, Siderar entered into an agreement with Air Liquide Argentina S.A. for the supply of oxygen, nitrogen and argon for a contracted amount of USD 176.1 million which is due to terminate in 2025. Given the severe international financial crisis, its impact on the steel global market and the uncertainty about the evolution of steel demand, Siderar rescheduled the execution of its investment plan and entered into a renegotiation process to reduce the outflow of cash.

(b) Raw material contracts

Siderar, following global steel industry trends, entered into several renegotiation processes regarding prices related to certain relevant raw material contracts for a total consideration of USD 207.8 million, considering that the existing contractual terms do not reflect the current market conditions. At the date of issue of these financial statements, negotiations are still under way.

(ii) Steel supply contracts

On December 16, 2004, Ternium México (former Grupo Imsa) entered into a ten-year steel slab supply agreement (the “Agreement”) with Corus UK Limited (“Corus”) together with Grupo Marcegaglia (Italy), Duferco International (Switzerland), Donkuk Steel (South Korea) (collectively referred to as the “Off-takers”).

Ternium acquired commitments to make predetermined cash payments during the term of the contract in addition to the purchase price paid for the steel slab, as follows: (i) an initial payment of USD 14.3 million, (ii) twenty semi-annual payments distributed proportionately in different percentages until 2014 for a total of USD 16.5 million, and (iii) additional payments for future capital investments in Corus’ Teeside plant amounting to approximately USD 15.1 million. The initial payment and the due payments included in (ii) and (iii) above have been made prior to the acquisition of Ternium México by Ternium. In December 2007, the rights and obligations established in this contract were transferred to Alvory S.A.

TERNIUM S.A.
Notes to the Consolidated Condensed Interim Financial Statements (Contd.)

10 Contingencies, commitments and restrictions on the distribution of profits (continued)

(ii) Steel supply contracts (continued)

During the term of the contract, Alvory will be entitled to purchase 15.4% of the production of Corus’ Teeside plant, estimated between 3.2 and 3.6 million tons of steel slab per year, approximately 0.5 million tons. This represents approximately 20% of Ternium México’s actual steel slab needs. The Agreement also establishes a supply schedule for each of the Off-takers.

At the acquisition of Ternium Mexico by Ternium, the Company valued the intangible asset related to this contract at USD 29.7 million. As of March 31, 2009, the Company decided to fully impair the remaining value of this intangible asset for a total amount of USD 27.0 million, as the value of such intangible asset is not representative of the current market condition.

(iii) Restrictions on the distribution of profits

Under Luxembourg law, at least 5% of net income per year calculated in accordance with Luxembourg law and regulations must be allocated to a reserve until such reserve equals 10% of the share capital. At March 31, 2009, this reserve reached the above-mentioned threshold.

Ternium may pay dividends to the extent that it has distributable retained earnings and distributable reserves calculated in accordance with Luxembourg law and regulations. Therefore, retained earnings included in these consolidated condensed interim financial statements may not be wholly distributable.

Shareholders’ equity under Luxembourg law and regulations comprises the following captions:

		At March
		31, 2009
		(Unaudited)
Share capital			2,004,743
Legal reserve			200,474
Distributable reserves			201,674
Non distributable reserves			1,414,123
Accumulated profit at January 1, 2009			1,457,281
Profit for the period			(3,336	)
Total shareholders’ equity under Luxembourg GAAP			5,274,959

11 Discontinued operations

(i) Sale of non strategic U.S. assets

On February 1, 2008, Ternium, through its subsidiary Imsa Acero S.A. de C.V., completed the sale of its interests in Steelscape Inc., ASC Profiles Inc., Varco Pruden Buildings Inc. and Metl-Span LLC to BlueScope Steel North America Corporation, a subsidiary of BlueScope Steel Limited, for a total consideration of USD 723 million on a cash-free and debt-free basis, net of working capital and other adjustments. Direct transaction costs paid by the Company in connection with this sale totaled USD 4.1 million. The Company continues to own Steelscape’s Shreveport, LA plant. Ternium has also retained its pre-engineered metal buildings and insulated steel panels businesses in Mexico. As of March 31, 2008, the result of this transaction was a gain of USD 101.4 million, calculated as the net proceeds of the sale less the book value of discontinued net assets and the corresponding tax effect. Afterwards, the Company recognized an additional charge of USD 3.9 million related to this discontinued operation.

TERNIUM S.A.
Notes to the Consolidated Condensed Interim Financial Statements (Contd.)

11 Discontinued operations (continued)

(ii) Available for sale assets — Sidor

On March 31, 2008, the Company controlled approximately 59.7% of Sidor, while Corporación Venezolana de Guayana, or CVG (a Venezuelan governmental entity), and Banco de Desarrollo Económico y Social de Venezuela, or BANDES (a bank owned by the Venezuelan government), held approximately 20.4% of Sidor and certain Sidor employees and former employees held the remaining 19.9% interest.

Further to several threats of nationalization and various adverse interferences with management in preceding years, on April 8, 2008, the Venezuelan government announced its intention to take control over Sidor. Following the confirmation of the Venezuelan government’s decision to nationalize Sidor, on April 16, 2008, the Company, Sidor and the Venezuelan government entered into an agreement providing for the creation of a transition committee, composed of representatives of the government, the union and Sidor’s class B employee shareholders, which was charged with ensuring the normal conduct of Sidor’s production and commercial processes, acting in coordination with Sidor’s board of directors, during the transition period until the nationalization was completed. In the meantime, the Venezuelan Government took control of the process of negotiation of the collective labor agreement and excluded Sidor from that process.

On April 29, 2008, the National Assembly of Venezuela passed a resolution declaring that the shares of Sidor, together with all of its assets, were of public and social interest. This resolution authorized the Venezuelan government to take any action it deemed appropriate in connection with any such assets, including expropriation.

On May 11, 2008, the Decree Law 6058 of the President of Venezuela regulating the steel production activity in the Guayana, Venezuela region (the “Decree”), dated April 30, 2008, was published. The Decree ordered that Sidor and its subsidiaries and associated companies be transformed into state-owned enterprises (“empresas del Estado”), with the government owning not less than 60% of their share capital. The Decree required the Venezuelan government to create two committees: a transition committee to be incorporated into Sidor’s management and to ensure that control over the current operations of Sidor and its subsidiaries and associated companies was transferred to the government on or prior to July 12, 2008, and a separate technical committee, composed of representatives of the government and the private shareholders of Sidor and its subsidiaries and associated companies, to negotiate over a 60-day period (extendable by mutual agreement) a fair price for the shares to be transferred to Venezuela, together with the terms and conditions of the possible participation of such private shareholders in the share capital of the state-owned enterprises.

The Decree also stated that, in the event the parties failed to reach agreement regarding the terms and conditions for the transformation of Sidor and its subsidiaries and associated companies into state-owned enterprises by the expiration of the 60-day period, the Ministry of Basic Industries and Mining (the “MIBAM”) would assume control and exclusive operation, and the Executive Branch would order the expropriation of the shares of the relevant companies. Finally, the Decree specified that all facts and activities thereunder would be subject to Venezuelan law and any disputes would be submitted to Venezuelan courts.

On May 2, 2008, the Company communicated to the MIBAM, among other things, its consent to submit any controversy between the Company or its subsidiaries and Venezuela relating to Sidor’s nationalization to arbitration administered by the International Center for Settlement of Investment Disputes (“ICSID”) established by the Convention on the Settlement of Investment Disputes between States and the Nationals of Other States (the “ICSID Convention”). On May 14, 2008, the Company informed the MIBAM, among other things, that the determination of the compensation for the transfer of the Company’s interest in Sidor to Venezuela and the solution of any controversy between the Company or its subsidiaries and Venezuela relating to Sidor’s nationalization would be governed by the applicable investment treaties signed by Venezuela, and would not be submitted to Venezuelan courts.

TERNIUM S.A.
Notes to the Consolidated Condensed Interim Financial Statements (Contd.)

11 Discontinued operations (continued)

(ii) Available for sale assets — Sidor (continued)

Upon expiration of the term contemplated under the Decree, on July 12, 2008, Venezuela, acting through CVG, assumed operational control of Sidor. Following the change in operational control, CVG assumed complete responsibility for Sidor’s operations and Sidor’s board of directors ceased to function. Thereafter, Sidor’s operations were to be managed by a temporary operating committee; this committee, which could act by simple majority, was to have six members, with the majority of such members being appointed by CVG and one of CVG’s appointees to become the committee’s president and Sidor’s general manager. However, the temporary operating committee has subsequently become non-operational and, accordingly, Sidor’s operations are exclusively controlled and managed by Venezuela through CVG and MIBAM.

The term provided in the Decree for the negotiation of the conditions under which all or a significant part of the Company’s interest in Sidor would be transferred to Venezuela was extended until August 18, 2008. Negotiations continued even after this additional term expired. On August 29, 2008, the President of Venezuela publicly stated his rejection of the latest proposal submitted by the Company to the Venezuelan authorities as part of their ongoing negotiations. The negotiations were subsequently resumed and continue to be under way. As the date of issuance of these financial statements, Ternium continues to retain formal title over the shares.

On August 29, 2008, Ternium gave further notice to the MIBAM regarding the existence of a controversy under the applicable bilateral investment treaties as a consequence of the nationalization ordered by the President of Venezuela without payment of adequate compensation, and reserved the right to initiate arbitration proceedings before ICSID.

The Company’s investment in Sidor is protected under several bilateral investment treaties, including the treaty between Venezuela and the Belgium-Luxembourg Economic Union, and, as noted above, the Company has consented to the jurisdiction of the ICSID in connection with the Sidor nationalization process.
The Company continues to reserve all of its rights under contracts, investment treaties and Venezuelan and international law and will continue to evaluate its options in realizing the fair value of its interest in Sidor prior to state intervention. In addition, the Company will defend itself vigorously against any attempt by the Venezuelan government to lower the compensation for its interest in Sidor as a result of any government claims.

Based on the facts and circumstances described above and following the guidance set forth by IAS 27, the Company ceased consolidating Sidor’s results of operations and cash flows as from April 1, 2008 and classified its investment in Sidor as a financial asset based on the definitions contained in paragraphs 11(c)(i) and 13 of IAS 32.

The Company classified its interest in Sidor as an available-for-sale investment since management believes it does not fulfill the requirements for classification within any of the remaining categories provided by IAS 39 and such classification is the most appropriate accounting treatment applicable to non-voluntary dispositions of assets.

Consistent with that treatment, the cost on initial measurement of the Sidor financial asset was its carrying amount at March 31, 2008 (IAS 27, paragraphs 31 and 32), and any difference between the carrying amount and the fair value of the Sidor financial asset at each reporting date shall be recognized directly in equity, except for impairment charges, foreign exchange gains/losses and the application of the effective interest method (IAS 39, paragraph 55(b)).

Ternium is entitled to receive compensation in an amount equal to the fair value of Sidor just before the nationalization measures were announced as provided, among others, by Article 4 of the bilateral investment treaty between the Belgian-Luxembourg Economic Union and Venezuela. In addition, Ternium is entitled to submit the dispute concerning the nationalization to arbitration administered by ICSID, and in accordance with the ICSID Convention, a judgment by ICSID awarding compensation to Ternium would be binding upon the parties and immediately enforceable as if it were a final judgment of a court of each of the 143 States, including Venezuela, that have ratified the ICSID Convention.

TERNIUM S.A.
Notes to the Consolidated Condensed Interim Financial Statements (Contd.)

11 Discontinued operations (continued)

(ii) Available for sale assets — Sidor (continued)

In determining fair value though several valuation techniques, as further explained below, in all cases Ternium concluded that the amount of the expected compensation for the Sidor financial asset would be higher than the carrying amount. However, the variability in the range of fair value estimates is significant and the probabilities of the various estimates within that range cannot be reasonably assessed. Accordingly, and following the guidance set forth by paragraphs 46 (c), AG 80 and AG 81 of IAS 39, Ternium continues to record the Sidor financial asset at its carrying amount.

Ternium tests the Sidor financial asset for impairment at each reporting period. In measuring fair value, Ternium employs several different valuation techniques. Specifically, Ternium performed fair value estimates on the basis of discounted cash flows, FV/EBITDA multiples based on market capitalization of public steel companies and capacity multiples of public steel companies, as well as multiples of transactions that took place in the period preceding the nationalization, using FV/EBITDA and capacity multiples. In all of the scenarios evaluated by the Company, the estimated fair value of Ternium’s interest in Sidor, as calculated by the Company, exceeds the carrying amount of the Sidor asset at March 31, 2009 (USD 1.3 billion). Consequently, the Company did not recognize any impairment loss in connection with the Sidor financial asset.

The results of operations and cash flows generated by Sidor prior to its classification as an available-for-sale asset were presented as discontinued operations in these financial statements. Comparative figures were re-presented for consistency as required by IFRS 5.

(iii) Analysis of the result of discontinued operations:

		Three-month period
		ended March 31,
		2009				2008
		(Unaudited)
Net sales			—				467,618
Cost of sales			—				(306,744	)
Gross profit			—				160,874
Selling, general and administrative expenses			—				(90,362	)
Other operating income, net			—				1,080
Operating income			—				71,592
Financial expenses, net			—				(15,329	)
Loss from Participation Account — Sidor			—				(96,525	)
Income from Participation Account			—				57,654
Equity in losses of associated companies			—				(150	)
Income before income tax			—				17,242
Income tax benefit			—				41,326
Subtotal			—				58,568
Results from the sale of non strategic U.S. assets			—				101,369
Income from discontinued operations			—				159,937

TERNIUM S.A.
Notes to the Consolidated Condensed Interim Financial Statements (Contd.)

11 Discontinued operations (continued)

(iv) Analysis of cash flows from discontinued operations:

		Three-month period
		ended March 31,
		2009				2008
		(Unaudited)
Cash flows from discontinued operating activities
Net income of from discontinued operations			—				159,937
Adjustments for:
Depreciation and amortization			—				50,820
Income tax accruals less payments			—				(41,613	)
Results from the sale of non strategic U.S. assets			—				(101,369	)
Changes in working capital and others			—				49,530
Cash flows from discontinued operating activities			—				117,305
Net cash used by discontinued investing activities			—				(54,923	)
Net cash used in discontinued financing activities			—				(30,216	)
Net cash from discontinued activities			—				32,166

12 Related party transactions

The Company is controlled by San Faustín, which at March 31, 2009 indirectly owned 72.10% of Ternium’s shares and voting rights. Rocca & Partners S.A. controls a significant portion of the voting power of San Faustin N.V. and has the ability to influence matters affecting, or submitted to a vote of the shareholders of San Faustin N.V., such as the election of directors, the approval of certain corporate transactions and other matters concerning the Company’s policies. There are no controlling shareholders for Rocca & Partners S.A.

The following transactions were carried out with related parties:

		Three-month period
		ended March, 31
		2009				2008
		(Unaudited)
(i) Transactions
(a) Sales of goods and services
Sales of goods to other related parties			5,086				8,286
Sales of services and others to associated parties			33				—
Sales of services and others to other related parties			55				107
			5,174				8,393
(b) Purchases of goods and services
Purchases of goods from other related parties			9,077				9,564
Purchases of services and others from associated parties			8,456				6,659
Purchases of services and others from other related parties			24,596				30,410
			42,129				46,633
(c) Financial results
Income with associated parties			306				191
Expenses with other related parties			(16	)			—
			290				191