David Salama – IR Luis Fernando Barbosa Martinez – Commercial Director Daniel dos Santos – Mining Director.

Renato Antunes – Brasil Plura Thiago Lofiego – Bank of America Merrill Lynch Marcelo Aguiar – Goldman Sachs Ivano Westin – Credit Suisse.

Welcome to CSN’s earnings conference call for the first quarter of 2014 result. Today we have company’s executive officers. (Operator Instructions). Today’s event results will be simultaneous webcast and this may be access through the CSN’s Investor Relation’s website at www.csn.com.br/ir where slide presentation can be downloaded from this slide.

Please feel free to go through the slide during the conference call. There will be a replay service for this call on the website. Before proceeding I would like to say that forward-looking statements are being made under the Safe Harbor of the Securities Litigation Reforms Act of 1996.

Forward-looking statements are based on the beliefs and assumptions of CSN management as well as on information currently available to the Company. They involve risks, uncertainties, and assumptions because they relate to future events, and therefore depend on circumstances that may or may not occur in the future.

Investors should understand that general economic conditions, industry conditions, and other operating factors could also affect the future results of CSN and could cause results to differ materially from those expressed in such forward-looking statements. Now, I’ll turn the conference over to Mr.

David Salama, CSN’s Executive Investor Relations Officer, who will present the Company’s operating and financial highlights for the period. Please Mr. Salama you may begin your conference..

Good morning everyone. Thank you for listening to CSN’s earnings presentation here with me today, the Executive Officer of the Company. I would like to start on slide number 3 where we have a consolidated results for the first quarter of 2014.

In the first quarter net consolidated revenue of R$4.4 billion had an increase of 20% basically the R$3.6 billion recorded on the first quarter of 2013 mainly thanks to higher revenues in mining and steel. When compared to the fourth quarter first thing the net revenue dropped 12% mainly due to lower revenue in mining.

Gross profit for the first quarter ’14 reached R$12. 6 billion, 6% to 9% higher vis-à-vis the first quarter of 2013 and comparing the fourth quarter of 2013 gross profit was lower 19%. CSN has reached net profit of 52 billion in the first three above our net profit in the first quarter of last year.

Adjusted EBITDA of 1.4 billion or 60% higher than the 902 million from the first quarter of 2013 led my mining and steel results compare into the 4Q of ’‘13, adjusted EBITDA was 18% lower. EBITDA margin on 1Q, ’14 was 30%, 8 percentage points higher than the 1Q ’13, and 12 percentage points lower than the EBITDA margin for fourth quarter of ’13.

Investments in the first quarter of ’14 totaled 355 million of which 114 million in steel for Casa de Pedra mine and the Port of Itaguaí, a 108 million in steel and basically because of renovations on the hot strip mill and so on the coke batteries. The 12 million [ph] on the extension of production capacity.

Now let’s start with slide number 4 where we will have the results for segment. On this slide we have net revenue and EBITDA by the main segments of CSN. In the first quarter of 2014 the steel represented 64% of the net income and 50% of EBITDA. Mining accounted for 26% of net income and 39% of EBITDA.

Now let’s turn to slide number 5 where we are going to have a breakdown for steel segment, starting by the top last chart. On the first quarter of ’14 the total sales volume of steel was 1.4 million tonnes, 4% lower deferred volume in 4Q, ’14.

This is analogy of sales in the domestic market, out of total sales 73% were in the domestic market, 25% were overseas subsidiary and 2% exporting.

Now on the top right chart, steel net revenue was R$3.1 billion, 1% higher than 4Q, ’13 basically thanks to higher prices that had reached an average of R$516 in the first quarter, an increase of 6% vis-à-vis the last quarter of last year. Now to the bottom of the slide, we have EBITDA information.

On 1Q, ’14 still adjusted EBITDA were 761 million, 20% higher than 4Q, ‘13, basically thanks to higher prices and it's been the highest EBITDA thanks to the third quarter of 2010 adjusted EBITDA margin of 24%. On 1Q, ’14 increased 3 percentage points basically the fourth quarter of 2013 also the highest EBITDA margins since the third quarter of 2011.

These results show a margin recovery for the steel segment. On the next slide, we will talk about mining. Once again let’s start with the top left chart. In the first quarter of 2014 sales of iron ore for CSN totaled 6.4 million, 18% lower vis-à-vis 4Q, ’13, the maintenance on Tecar at Itagua Port of that volume 2.2 billion tonnes were sold by Namisa.

In addition to sales to customers CSN consumer 1.5 million tonnes of iron ore on the first quarter of 2014.

It's still on the chart on the top part but now to the right, we see that net revenue of R$1.2 billion in the first quarter was down 35% vis-à-vis 4Q, ’13 due to smaller volume sold as well as the lower prices that have reached $89 in the first quarter vis-à-vis $96 in the fourth quarter of last year and also in the fourth quarter of last year we received 323 million in insurance compensation due to lower of profits from a claim in the iron ore claim and about the claim [ph] of Tecar.

Now let’s turn to mining EBITDA on bottom of the slide. On the first quarter of 2014 EBITDA amounted 585 million, a 43% drop vis-à-vis the prior quarter and the EBITDA margin of 47% or 6 percentage points lower. On slide 7, we will look at EBITDA trends. EBITDA of R$1.4 billion in the first quarter was down 18% vis-à-vis 4Q, ’13.

Higher steel prices had a favorable impact on the EBITDA, on the other hand contributing to EBITDA reduction lower prices and volumes sold ore, smaller steel volume sold as well as insurance payment for Tecar posted in 4Q, ‘13. On slide 8, we will talk about the net debt trend.

On March 31, consolidated net debt totaled R$15.8 billion very close to ’12 and ’13 year-end figures. Net debt ratio was down from 2.91 times to 2.7 times at the end of March 2014.

Also contributing to the increase of net debt, dividends and interest on equity of R$4 million paid to shareholders, CapEx of R$300 million and also disbursement of 700 million for debt charges.

As an upside in fact as EBITDA reached 1.4 billion in the fourth quarter of this year, 60% of that debt in March was denominated in real, 40% in foreign exchange in American dollars. From that position 80% of debt -- 88% is long term and 12% of the debt is short term that concludes my presentation. Let’s now turn to the Q&A session..

(Operator Instructions). First question from Renato Antunes from Brasil Plura..

First about steel, could you just speak a bit more about how you view 2014 regarding the demand that is one of the big questions from the market and how do you view your demand now that we have recognitions with the automotive industry. This is my first question.

Second question about CapEx, could you speak a bit more specifically about what you expect for this year after the expansion of the mine and change in the -- we could see the CapEx number is low and I would like to understand how CapEx will evolve as we have the project to expand the mining operations?.

First of all to understand what CSN thinks about the market in 2014, demand et cetera, first we believe there is a lot of pessimism in the market because all of the action, holidays during the year and the FIFA World Cup.

Our view is that 2014 will be a good year, we have good way to income and enough consumption to sustain the economy during this year. Now the issues in the automotive industry also considering cars, trucks, plus we believe it is only an automated issue to our mining and steel issue.

It will be solved in the next few days so that this industry will resume growth. Another piece of important information is in which we believe are foreign exchange rate, it's an outlier today and we believe the foreign exchange will come back to more market level, it will come back to more realistic market levels.

Now speaking about CSN operations, we’re operating at full capacity today with approximately 100% of our production in the domestic market. Our margins have rebounded because of a new price alignment in the domestic market from 6% to 8% and also because we have had a very strong program of cost reductions.

In fact under this umbrella our cost reduction we have a very daring plan to improve operating excellence led by our production team, just because there were no idea [ph], the margin reflects steel considering for some of the first quarter is around 30% which is a favorable level compared to what we have seen in previous years.

And another point we firmly believe in hedging more value. In the first quarter of 2014 the coated products represented 40%, in the first quarter 2013 only 35%. So we have also improved our project mix during this period of time.

We also wish to highlight that our portfolio is quite rich that is we are not concentrated in specific market so that we have a very good market distribution of productions.

Now the good news as of May the 1st, we have had the first sale from the new operation of long steel and this year we will deliver to the market approximately a 106 million tonnes of long steel.

Also part of our operating excellent, we will reduce inventories as compared to the first quarter 2013 and this reduction was approximately 40% which has of course also contributed for our results. Regarding maintenance the last maintenance was in the HSM or it's hot strip mill, this was a 10 day stoppage.

Our production in 2014 was 14,000 tonnes per day so you can actually calculate the production loss we had because of the maintenance on the HSM which is our bottle neck today for our hot strip mill. So this slight drop in volume and the first quarter is certainly associated to this scheduled maintenance stoppage.

Also interesting we had a lower purchase, it was 102,000 tonnes in the first quarter. So in general we have an optimistic view of the market as we analyze value chains except for the automotive chain when you look at construction, white line consumer built goods also retail and distribution all of these industries expect growth in 2014.

Of course we cannot forget about two of our main [ph] issues, this market is important, it accounts for 30% of apparent consumption but as I’ve said I firmly believe this is only an isolated issue which will be solved in the next few days.

Now let us talk about CapEx this year, you have actually seen that in this quarter we disbursed 355 million basically in mining, or 140 million where we include Casa de Pedra mine and also Itaguaí Port or another 108 million in steel operations. Our guidance for this year is R$2.8 billion.

And the highlight is mining accounting for R$25 billion [ph] new investment, also R$628 million will be invested in the steel operations, 400 million in cement and other projects account for the remaining 239 million, I think up to 2.8 billion investments.

Now mining is highly relevant in 2014, investments of 1.5 billion out of 2.8 billion so it is our number one project in 2014 and let me now ask Daniel dos Santos, our Mining Director to provide more details about these efforts to expand our capacity in Casa de Pedra.

Daniel?.

Yes we have good news about the extension of Casa de Pedra mine. We now have this construction work being conducted in the dam. We needed more capacity for Tailings which is quite common in this area of iron ore exploration.

Now we have been able to implement a great capacity in our Tailings Dam as we have finished the construction work of Casa de Pedra dam, the construction work ended in March in the first quarter.

We finished the elevation work but as we had a dryer season in January and February we were able to advance this construction work so that it was concluded before the deadline in terms of the final decision of Tailings, we have enough capacity, we have a comfortable position not only for 2014 but also in the long term.

In addition as we have had a dryer summer we were able to move faster with some other projects.

When you look at raw materials or materials that cover the ore during mining operations, we have been able to make a lot of progress in the development of our main deposit of the raw material in Casa de Pedra for both, the Tailings Dam and also this new deposit having enough capacity to support our production plan for 2014 and further on in the next five years.

So we’re in a very comfortable position because of the efforts in the last two years were actually very big efforts but now we stay at an advantageous position.

We were quite successful in these efforts in terms of ore production as I have mentioned we are currently about to conclude the installation of additional line in the Casa de Pedra processing plant.

We already have the benefit of some mines that have been delivered that is we made progress as you can see looking at our project mix in the first quarter.

The quality of our pellet feed and the quality of the pellet feed is really very high and now in the second quarter we will begin to deliver the new loading lines in the railway yards so we have a few contracts fee negotiated, we will soon be able to sign these contract to be able to start the operations, to start the construction work now that we will begin the dry season between May and October.

So, we will need this CapEx as David mentioned and it will drive [ph] in Brazilian winter between May and October which is the best time for construction work.

We expect to conclude Casa de Pedra extension up until the first quarter next year and with the strategy we have adopted of delivery line by line production will increase gradually along this year according to our plan. Thank you..

Next question comes from Thiago Lofiego from Bank of America. Please Mr. Thiago..

I have two questions. I'll go next to Martinez.

Can you comment on the premium of the domestic market vis-a-vis imported, and do you think there could be price pressure for the next months due to the value, the amount of the exchange rate, and also the realized average price for the second quarter, considering the carryover that we had in the beginning of the year? And then my second question is to David.

Can you elaborate a little bit more about Namisa prudent [ph] that merging of Namisa and Casa de Pedra? How is that going? Please..

About the premiums, if you think the, a half of that -- that will be probably $530 per tonne and freight $45, we will have $575 that hot band here in Brazil would cost around $760. If you consider today the project we have in the domestic market under the same comparison basis not considering (indiscernible) taxes, the prices of around 8% to 9%.

When the importer brings the product in usually they have to finance and the price is added for $10 to $15 for 90 day payment.

So basically cold rolled product and zinc or galvanized is a little bit higher, Zinc galvanized is a little bit higher around 8% to 9% and as I said in the beginning when I was talking about the first question we believe in the improvement of the foreign exchange rate.

It really is an outlier exchange rate and the scenario for the exchange rate is the price stability but we’re going to do adjustments in any type of deviations whether it is a dollar or in the comp.

The idea is to keep the margins -- we are able to recover on the first quarter whether it is coming from the price or as a cost, which is very important..

Thiago, about Namisa, what I can tell you, both parties are still negotiating and we’re analyzing our possibilities in terms of margin. We have a schedule for us to reach a consensus up to September.

We have already extended that date but you should understand that this is a complex negotiation and it involves a lot of people with high values but what we can see is that there is goodwill among all involved and we expect to come into a good agreement in the negotiations. Thank you..

Our next question is from Marcelo Aguiar from Goldman Sachs. Please Mr. Marcelo, the floor is yours..

About price in the domestic market, it's a question for Martinez, can you elaborate a little bit more on a slower demand scenario in Brazil? And you always have that expectation of the depreciation of the foreign exchange rate, but what happens if there's lower demand in Brazil? Do you see higher competition among Brazilian players that could cause a drop in prices in the Brazilian market? And also, I would like to know how do you see imports in the Brazilian market? And my second question has to do with mining, to Daniel.

Daniel, you talked about the lines delivering.

Can you tell us how many lines you have operating now, and how many will be operating from next year on, when I believe you will be reaching 40 million capacity in Casa de Pedra? Just to have an idea of the sizing, what you have operating today, and how many lines you’ve operating in the future? And also, you talked about CapEx for 2014.

Can you talk about the CapEx for the long term, 2015, 2016? That would help. Thank you..

David Salama:.

:.

I will start by import, first the good news indirect import which is a figure that I always mention on the call and I say that this is the problem of our industrialization process. The problem is what we already have in Brazil that is finished but the final product, the finished product, that considers it.

The first quarter of 2014 had an import in indirect import level of 1.2 million tonnes. If annualize the figure and obviously this is not a simple math but that already shows a drop in the indirect import of 11% vis-à-vis 2013 which was 5.6%.

So that is excellent news because it shows a recovery of some sectors in the industrialization and therefore this volume as -- is being provision -- being provided by local industries. So about direct import that has increased from 6% to 7% in the first quarter of 2014 vis-à-vis the fourth quarter of 2013, basically coated products.

Now about coated products, that is not an import where you’re bringing the coil. In spite of having 40% of our mix in that sector of coated products we deliver much more than coils, also serving white line, auto sector, civil construction. So the package of services that we have in the market does not explain any type of increase in imports.

In addition to that in this insulated market we should have good news this quarter, we’re fighting a series of import that coming below the specs, used in the Brazilian market. So CSN is refusing or better is going to the correct agencies so that we can have the same comparisons basis off those imported products to fulfill.

And in my understanding these are fraudulent imports in terms of the specs and they could cause problems in your future.

About the market premiums, we talk a lot about the foreign exchange rate but when I talk about the premium of 8% to 9% and the hot band I’m considering the exchange rate of 223 considering 8% to 9% and let’s not forget about the $10 to $15 financing for those import is not worth to increase that import level, the risk is still high when compared to the benefit that the imports we might have when taking on a short term.

And finally about the demand, no matter what is the demand, CSN is going to operate a full capacity providing products in the domestic market and I would say once again there is a lot of pessimism in the market.

The distribution sector is going well in the last quarter it was better than last year, machinery equipment, capital goods, civil construction, white line, all of those we have posted growth. We’re only having a specific problem in the auto sector and I believe this is going to be addressed very quickly.

That market represents 30% to 35% of the steel consumption, of the apparent consumption. That is very important not only for steel but also for the whole business and economy..

Let’s now speak about mining. Let me provide you with some background information before I answer your question. In the first quarter we have produced at a very strong pace in mining operations and also at Casa de Pedra and we continue to deliver our expansion program, our production has been growing ever since January.

The first quarter closed with very strong pace. We have reached 27 million tonnes in the end of the first quarter and this number will continue to grow as the new mines come into operation. And also with the new facility -- I will provide you with some more details on the new facilities especially Casa de Pedra.

We have a high level of inventories at Casa de Pedra and also at Itaguaí Port and if you ask about this we will keep our guidance at 37 million tonnes of sales in the foreign market or in international market.

The port has an installed capacity of 44 million since May last year when we concluded the expansion work and we also have third party ore, we purchased to achieve our targets this year and also next year. So our port capacity surplus will be filled in by providing port services as we have done in the last six years.

In the last week of March and also during April, we came to a point at the port where we truly have used the full capacity of Tecar equipment. So as we could conclude the implementation of the new installations.

Since this was done for the first time we had a few maintenance issues as we mentioned in the press release especially related to our conveyor belt. As we have mentioned the problem was solved in the end of April and now in May we operating at a very fast pace in-line with what we have planned for.

All-in-all regarding mining operations we have been able to attain the planned results despite these issues we had in Tecar in March and April.

Now regarding the details of this expansion in Casa de Pedra bringing it down to very simple terms so that I can explain to you the new lines, I mean I should actually have a flow chart so you would understand the processes in Casa de Pedra.

But in simple terms the production of lump ore and since we have seven production lines that have already been in operation and now we’re implementing eight new lines.

Out of these eight new lines, four are currently contributing not in full capacity but they are already contributing significantly for us to reach our production targets up until October, the other line will probably be ready to operate. This is sinter feed and lump ore, you also have to consider the fines generated from this process.

But now with a new process we will generate two new flow, one will be tailings going to the dam, the other one will be feeding the concentration circuit to produce pellet feeds.

So, we do concentration by flotation and there in the flotation area and bringing it again down to very simple terms, we currently have seven lines in operation but there are five new mines to be implemented until June.

So by late June our flotation loop will be ready and it will add capacity in the production of pellet feed but more importantly it will help us improve the prices of products sold.

Basically, this is what I can tell you about Casa de Pedra and the second half of this year as we have announced previously we will begin the conclusion of the electric electromechanical assembly of the railway yards installation. So with that we will have concluded the expansion of Casa de Pedra.

As you can see we’re now coming to the end of the construction work in this expansion program which shall be concluded as announced so that we will be able to use our full port capacity as soon as possible..

Our next question comes from Mr. Ivano Westin from Credit Suisse. Please Mr. Ivano..

The first is about purchasing slabs from third parties. You already mentioned that it was 102,000 tonnes for this quarter.

What can we expect here? What is the Company's target? The company wishes to go back to self-sufficiency in slabs, can we expect a higher reduction in the next months? And that will be my second question for you, you talked about cutting in costs.

What can we expect there? You have reported a significant reduction in the first quarter, also a reduction in SG&A.

What can we expect for the next quarter?.

Just to go back a little bit, we were purchasing slabs last year and I won't go too deep into that but there are several reasons that is part of this.

Since the last quarter of 2012 we had the renovation of the blast furnace, the quality of the iron ore, the reclaimer, the beginning of maintenance of coke ovens and then we also had a renovation of the hot roll mill that started in December.

So the trend is to reducing purchasing slabs by the end of the year and we want to be self-sufficient and the slab production as we have always been. Obviously any kind of market opportunity will be analyzed because in spite of having purchased the slabs last year and this year we did have a positive result this year than ’12.

In summary we will go back to being self-sufficient, in fact we will also take into consideration opportunities in the market to purchase the slab..

Ivano, about cost and expenses, I have been saying that we are doing work on that area and I have been saying that from the last call. We have started efforts a little while ago and in several ongoing programs both for production as well as administrative area in terms of cost reduction.

So I believe the results have started to show, you saw that we had a favorable impact. Sometimes it's difficult to effectively quantify the figures because that involves a series of programs that are running simultaneously.

But what I can say is that we still have that purchase, that objective, and that is going to be seen both in the operational as well as in the administrative areas. We are aiming for that goal along this year and along next year as well. Thank you very much..

(Operator Instructions). Thank you. Since there are no more questions I would like to turn the floor to Mr. David Salama, Executive Director of Investor Relations for his final remarks..

I would like to thank you all for participating on this call and just would like to go back and highlight a few topics, showing our point of view. You have seen that we are at a strong pace in mining, our production is back to normal. We did have a specific problem along the first quarter due to the port shipments, and that has been solved already.

And something else that I would like to highlight, our commercial strategy for our mining along the first quarter that also has brought important results and it has helped increase the possibility in mining.

On the other hand, for steel as I just said we have a lot of programs for cost reduction and we do have a favorable -- we foresee a favorable scenario ahead. We have seen some reports that are not as optimistic but we still carry out that optimism for the year and that’s why we bring you the figures for the first quarter.

So that was the message that I wanted to convey and also to say that the IR team is available for all of you. If you’ve any other questions we will be available to address them. Thank you very much and have a good day. .

The conference call for CSN’s earnings results is concluded. Have a nice day..