Good afternoon, and welcome to Gerdau's conference call about the results for the fourth quarter of 2013. [Operator Instructions] We would like to emphasize that any forward-looking statements that might be made during this conference call related to Gerdau's business outlook, projections and financial and operating goals, are mere assumptions based on management's expectations related to the future of the company. Even though Gerdau believes that it's comments are based on reasonable assumptions, there is no guarantee that future events will not affect this evaluation. Here today are Mr. André Gerdau Johannpeter, Director, President and CEO of the company; and Mr. André Pires, Vice President and IR Director. With no further ado, I would like to give the floor over to Mr. André Gerdau Johannpeter. You may proceed, sir. André Johannpeter Bier Gerdau: Thank you. Good afternoon, everyone, and welcome to Gerdau's conference call to talk about Gerdau's results in the last quarter. As we always do, we will initiate our analysis with the overall landscape for the steel market followed by information on Gerdau's performance in 2013 and the outlook for 2014. It is important to mention that we will talk about the performance of the year in addition to highlighting the main figures of Q4 2013. Right after my presentation, André Pires will elaborate on the financial performance of Gerdau. And after that, we will be available to take your questions. For those of you following us on the web, on Page 2 we start with the industry overview, starting with world steel production that reached 1.6 billion tonnes in 2013, up by 3.5%, vis-à-vis the year before. Excluding China, the world production was in keeping with that of 2012, amounting to 828 million tonnes. On the other hand, in the fourth quarter of 2013 worldwide steel production…

[Operator Instructions] Our first question comes from Thiago Lofiego, Merrill Lynch.

I have 2 questions. The first refers to your 2014 CapEx. You mentioned BRL 2.9 billion for this year, which is slightly above what you mentioned more recently. So could you please give me a breakdown of this CapEx? And also why is it that it's slightly above the BRL 2 billion figure that we had assumed before? The second question refers to the steel market in the United States. Could you please tell me a little bit about the metallic spread? And at what level does metal -- metal spread is today? And what is the impact of this very severe weather in the U.S. to your figures? André Pires de Oliveira Dias: Hello, Thiago, thanks for your question. This is André Pires. Well, in terms of CapEx, in fact, this is the number that we had in mind, although we expected and we were talking about it for a while. If you look at disbursements of CapEx or investments that took place throughout 2013 was BRL 2.6 billion. The expectation for 2014 of BRL 2.9 billion contemplates some projects that are already in the pipeline and some others that are yet to be approved. But it's always good to remember that when we translate CapEx into reais, there is the impact of the FX variation. So part of the equipment that we acquire, they come from abroad. They are included [ph] equipment. So to invest in an environment where the real currency is depreciated, that leads to a higher disbursement of reais, certainly it depends on the FX variation and the performance of the exchange rate throughout the year. But that's the number, BRL 2.9 billion. There hasn't been any changes. Now concerning the U.S. market, I think that you divided your question into the metal spread and also the severe winter. Starting with the weather, I mean, winter is indeed affecting the market as a whole from operations one way or another affected. I think you are all following what is happening. I think this is -- this has been the worst winter ever. And the economic activity is also demonstrating that the industry's been affected. And in terms of the metal spread, it continues to perform the way that you mentioned because of the situation in the U.S. And it is relatively low if you compare it to the levels that we experienced in 2011 and 2012, and in other words, half of 2012.

Now going back to the CapEx issue, you said that by 2017, your total CapEx will be BRL 8.5 billion. So you believe that we should see a decline in CapEx in the next coming years, or maybe not? So could you please tell me, give me a breakdown of what mining and steel milling still needs to do in that regard? André Pires de Oliveira Dias: Okay, Thiago. In fact, we decided to talk about CapEx -- use of CapEx on an annual basis rather than in a 5-year term. The main reason is that we are, in fact, reviewing our investment plans. And this review is occurring on a very frequent basis, focusing on working capital and also focusing on the economic landscape. So there is no decline in CapEx. But again, we must take into account the FX effect to foreign exchange variations. And I'm speaking more particularly about mining and steel milling. I would say that if you look at CapEx spending in 2014, I think more than 50% or 60% would go to Brazil. And in Brazil, mining plays a very important role because we still have our projects to expedite production of iron ore. As you know, we intend to reach a production capacity of 18 million tonnes by the end of 2016, and this will require important investment if we want to reach that goal. Our next question comes from Ivano Westin from Crédit Suisse. Ivano Westin - Crédit Suisse AG, Research Division: First, I would like to know about operations in Brazil. Can you please elaborate more about your energy self-sufficiency levels here in Brazil? And that was due to recurring decision of a possible savings program for energy. How do you see the demand for the first quarter? And what are…

Our next question comes from Carlos de Alba from Morgan Stanley.

The first question is also on India. How long more would it take for the operation to be completely ramped up? Based on the press release, you just started operations in January, and you still had a negative effect in the fourth quarter results. So I wonder if things are going well there. And when do you expect the operation there to bring that full capacity? André Johannpeter Bier Gerdau: Well, the question from Carlos de Alba is about India and our operation in that country and when we believe that the plant will be operating at full capacity 1 year after the start up. The capacity of that plant is 300,000 tonnes and the focus is on specialty steels. And to reach capacity because it's a specialty steel, it takes a little bit longer, maybe 2 or 3 years would be more realistic. And it's -- they operate differently than a rebar mill or a mill that produces other products. So 2 to 3 years would be the expectation in terms of reaching full capacity, but it certainly depends on the market. This is just based on our experience and our production curve. If there is more demand from the market, that may be different.

Understood. And if I may, on iron ore, what are your expectation of volumes for 2014? And then the last question is on working capital. It has been a key focus of the management team to reduce working capital. Can you do more in '15 and beyond to be in that point even further, the base of working capital that we saw in the fourth quarter? Because the reality, despite the great results on this and the cash generation that took place, the net debt to EBITDA remains around 2.5x, which is not necessarily low. And I just want -- how you see these 2 things, the working capital and the net debt levels? André Pires de Oliveira Dias: This is André Pires. Your first question refers to iron ore and what is our expectation in terms of iron ore production in 2014. And the second question refers to working capital. Taking into account the reduction that occurred in 2013, so what is our expectation for 2014 and how we see the net debt over EBITDA performance? Well, related to your first question on iron ore, as we said during the presentation, our purpose is that after the first half of 2014, after the results for the second quarter, we will start talking about numbers of production and deliveries of iron ore. And for that reason, we will not anticipate anything at the moment. We will give you more details when we report on the results for the second quarter -- for the first quarter of 2014. Now about working capital in 2013, as we said, our liquidity agenda was quite strong. And then we understand the repeating the same time of reduction in working capital, it's very difficult. However, we are still putting a lot of effort to operate at a more balanced or fair working capital level. And so the focus is to work with a cash conversion cycle a bit shorter. Now in terms of net debt over EBITDA of 2.5x, this is an objective that we pursued in the first half of 2013. We were pursuing 2.5x, but we understand that due to all of that work, we were able to have our investment grade reinstated by the main grading agencies. This is a comfortable level, and therefore, we will start to operate with this level of debt, focusing on 2.5x. There may be fluctuations upwards and downwards because it's very hard to have a very defined tuning of this number, but we will try to operate with a number around this number, the number that we had at the end of 2013, 2.5x.

Our next question comes from Renato Antunes, Brazil Plural.

First, it's about the United States and antidumping matter that is being studied there by American agencies. We have a negative preliminary view. But I would like to know your opinion, do you have a clear expectation that could help us about what's going on and what they are investigating there, especially in terms of antidumping regarding Turkey and Mexico? And also Brazil, in terms of iron ore, if I'm not mistaken, you already mentioned that you made 1.2 million tonnes of sales. I would like just to confirm, and analyzing some -- that figure, a large part of that was concentrated on fourth quarter, almost 700,000 tonnes in the fourth quarter. Can you help me understand how much of that is being exported and how much of that is being shipped to the domestic market? André Johannpeter Bier Gerdau: Renato, this is André. I will talk about the antidumping, and André Pires will talk more about Brazil. You talked our expectations. We are, along with other manufacturers, we are participating, contributing with [indiscernible] and it's very difficult to do any type of forecast. What we had coming out yesterday was about subsidies, and so we still have more to know about antidumping. And we're waiting for more information, and probably that's going to come out only in April. That is as much as I can tell you. Turkey -- and in that matter of the antidumping in Turkey and Mexico. André Pires de Oliveira Dias: This is André Pires, Renato. And I mentioned, in the past, in 2013, deliveries of iron ore for third parties reached 1.2 million tonnes. And a large part of that was in the fourth quarter. We started with that treatment units too in September, if I'm not mistaken -- if I'm -- end of September, beginning of October. So that helped us to expedite the iron ore treatment and therefore, production. Obviously, as you know, an important part of the production of our mines is to support Ouro Branco. In regards to what is sent to the export market, I can tell you that we have flexibility to export a large part of the production or to meet the demand of the domestic market. So it's going to depend upon where the demand is and about -- also, it's going to depend on the price equation. So I would say that we would like to export, but that doesn't mean that we are supporting the demand of the domestic market.

Our next question comes Rafael Oliveira from Itau BBA. Rafael Oliveira - Itaú Corretora de Valores S.A., Research Division: And this is my first question, refers to the Brazilian market. We're seeing imports of rebars and rods and there is a 15 -- a 20% growth. And now we saw imports, higher imports of rebars. How do you see that move? That's my first question. My second question relates to other operating expenses. The line that appears in your statement, you talked about an amount of BRL 99 million of properties sold, and we will see in the results that -- I would like to know what kind of properties you were referring to? André Johannpeter Bier Gerdau: Rafael, this is André. In fact, we saw from import growth in the next half year. But we have to look on a month-by-month basis because last month it was almost 0. Maybe there was a ship that didn't come in, so that number is posted in January. But we've been monitoring this volume very closely, taking the necessary actions to compete in the market because sometimes this comes into some regions and not others. So we are constantly monitoring this scenario, looking at international prices, the economic landscape. But we do not believe that the volume of imports will increase. Part [ph] will be taken into market, but we are working towards avoiding higher figures. André Pires de Oliveira Dias: Rafael, Pires. In terms of the other extraordinary revenues or operating expenses. In fact, in the case of the fourth quarter of 2014, there was an impact from the sales of real estate or property close to BRL 99 million, and this affected EBITDA. They referred to some sales of the momentum when we filed the opportunity there to sell the properties without necessarily leaving that area. These are sales, but we are still renting the property. There is no plan to use this same mechanism in the next quarters. This is considered on a case-by-case basis, depending on the opportunity of the moment. But we do not anticipate any further plan to do that in a more structural fashion.

Next question comes from Roy Yackulic from Bank of America.

Again, about the land side, I -- in the cash statement that were -- you realized, BRL 237 million from sale of PP&E. I assume that's the landfill. And I'm confused, are you saying BRL 99 million or is that -- or is it $99 million? And was that the impact on EBITDA, the BRL 237 million, or what was the impact on EBITDA? And I'm a bit curious, how much of the EBITDA in 2013 came from iron ore sales? André Johannpeter Bier Gerdau: Roy's question was about the impact of the real estate sale and the EBITDA, how much was that? If it was BRL 99 million or $99 million? And the second question is about the EBITDA impact in 2013 on the iron ore sale. So addressing the first question. Really the impact in the EBITDA of the fourth quarter of 2013, it was BRL 98.6 million, not dollars. Those had a positive impact in the sales value of the real estate. And the cost that we had in the balance sheet of those properties that brought the result of BRL 98.6 million was an impact in the EBITDA. So about the iron ore sales, as I have mentioned before, we are going to start disclosing separately that activity from the first quarter of 2014 on. Right now we'll tell more about the impact in terms of volumes, in terms of third-party sales and in terms of productivity comparing it to prior periods. So I would like to ask you for a little bit of more patience. Wait a little because when we start disclosing that information in an independent way, all that information will be available to you.

Our next question comes from Leonardo Correa from HSBC.

My first question relates to the competitive scenario. So I would just like to hear from you, your idea about the new entrants, CSN, starting as of April. And then likely [ph] and as mentioned previously, the level of import still bothers a little bit because there's a lot of material entering the country. So I would like to hear your opinion on how you intend to proceed in terms of your commercial strategy, given the scenario of new entrants with a different kind of imported goods coming into the country? And the second question refers to a previous subject that was raised during the call. Certainly there's still a lot of uncertainties in terms of the scenario concerning rationing and the drops in demand. Could you please tell me a little bit more about measures that could be taken by the company, or maybe you could increase the level of exports, considering a future exchange rate depreciation? Therefore, I would like to hear from you what would you do in case of a scenario similar to what we've had in 2001 and '02. So what is your plan b to -- in face of a scenario like that? André Johannpeter Bier Gerdau: Leonardo, this is André. Now, in terms of the competitive scenario with new entrants, and you mentioned CSN and Simec, they are about to come. We do not know exactly when. But the issue is coming toward this year. And about imported goods, I already talked about that. We are monitoring that very closely. It goes up and down depending on the month, so we continue to monitor that on a frequent basis. So in the south part of the country, at São Paulo and Rio, this is a good market. But -- so this does not…

But just to add, what about exports? Because in the past, we've heard a lot about what would be the ideal exchange rate so that you will be neutral in terms of domestic market and export. I know that this will vary per company, but if we think in terms of 2.40, 2.50, could you think about exporting more to offset a moment of lower demand in the domestic market? André Pires de Oliveira Dias: Well, Leonardo, I think it greatly depends on prices on the international market and on the entire situation of that international market. Well, there is a variation of the exchange rate, but you must also consider variations in the international market. So it's hard to tell what will be the ideal exchange rate, but what will be the ideal international landscape? Well, even with an exchange of 2.40, exports have not been using it as an interesting alternative. To that end, our export level has declined in the fourth quarter due to a very weak landscape abroad. So just basing -- looking at the variation of the exchange rate, that's not enough alone.

Our next question is from Marcelo Aguiar from Goldman Sachs.

André, please, can you comment -- you talked about metal spread comparing 2011 to 2012. Can you talk about it, about that metal spread in American operation in the first quarter compared to what you have seen in the fourth quarter? And my second question is about the operations that you have of ramp-up. How much do you expect in terms of production, Pindamonhangaba, Ouro Branco, and in the South? So that we can have an idea where is the potential growth of volume in tonnes. And my last question, if you can please tell me a little bit about costs, especially about coal, energy and how have how you started the year? And what is the perspective that you have in the short and medium terms? André Pires de Oliveira Dias: Marcelo, this is Pires. Let me tell you a little bit more about metal spreads. We still see a challenging scenario for metal spread in the U.S. As I said before, obviously we are operating at a lower margin, vis-à-vis 2011, the first half of 2012. About the fourth quarter, I would say that it's flat. It is stable, vis-à-vis fourth quarter of 2013. You also probably have seen that in despite of a very strong winter in the U.S., there's scrap that, under these conditions, that would raise prices due to logistics problems as those have fallen. They are dropping contrary to expectations, and that is due especially to export to Turkey. So in a scenario where we are having dropped in the scrap, the American market is difficult to recover the margin. But we are still looking at the macro data and also about investment expectations and the nonresidential factor, and we still see an improvement in the American landscape. We think that investment growth of…

Our next question comes from Fernando Leitão from Hoya Corretora. Fernando Leitão: I have 2 questions. The first is on the scrap market in the U.S., and I would like to refer to that market. Obviously when you took over the U.S. unit, I think the landscape was very different from the current one. And we see that the EBITDA margin is significantly higher in the Brazilian market. Even when the unit is recent, like in the case of India, the numbers are still much different when compared to Brazilian numbers. So your entry in the market of flat steel, which in my view, I believe has a tighter EBITDA when compared to long steel, what is Gerdau's strategy to that end? The averages of EBITDA in new markets, do you think that they tend to shrink? André Johannpeter Bier Gerdau: Okay. About scrap, in North America, we use our Gerdau business system, which is the way we work in terms of scrap processing to look for cost efficiencies. And this has worked quite well in North America. In some regions, better than others, so this is the model that we use there, which is similar to the operation way of acting in other areas. Not only for scrap, but this gets us good gains, and this is the strategy used in Brazil that was replicated in North America. About EBITDA, I think you were referring to flat steels when we were talking about the margin. We have now a coiled hot-rolled strip rolling mill, and we will not be so influential because it is a very vast market. But we also understand that profitability is also linked to the fact that we used to sell flat. But once you turn those into coiled hot-rolled strips, we have some advantages. In terms of flat steels, the margins are within our expectations to pay for the investments that was done in coil hot-rolled strips. We have our own distribution, but we are selling to other clients in the market. And we understand, therefore, that we will be able to get the returns within our expectations and within the figures estimated for coiled hot-rolled strips. So we still need some time in order to do a better evaluation.

Our next question comes from Juliana Chu from Votorantim Corretora.

I have 2 questions. First, about North America and the United States, how is the capacity in the year? And considering that 2013, it is good year, you knew that you turned to several efforts on North American operations. What do you expect in terms of profitability? Can we expect something higher for 2014? Something more similar to 2012? And also about coiled hot-rolled strips, do you have an expectation of volume sales for domestic and export markets for 2014? André Pires de Oliveira Dias: Juliana, this is André Pires. About North America, we are operating now at a capacity of 63%. That is the figure that we have now, that is working now. As you've said, in 2013, it was a difficult year in terms of profitability and we are working strongly. And we do believe, considering what we have seen in the macroeconomic KPIs that, in 2014, we should have better profitability, that is a better EBITDA margin than in 2013. But it's difficult to have a very clear estimate because we're just in the beginning of the year. It just started with this strong winter. It was unexpected. But we think it's going to be better. And now I'll turn to André for your second question. André Johannpeter Bier Gerdau: About the yield, I'll turn to a figure that we just mentioned. We have a yield of 40% to 50% of the capacity of the coiled hot-rolled strips rolling mill for 2014. That sale will depend of what we are going to do in terms of the line, which gauges we are going to use on the lines, we are already working on rolling products. So we can give you more data of that on production, 40% to 50% of the used capacity for this year.

So we conclude now our session of questions and answers. I would like to turn the floor to Mr. André Gerdau Johannpeter and Mr. André Pires for their final remarks. André Johannpeter Bier Gerdau: Thank you all for your participation and your interest on our conference call. And if you have any questions, our IR team is available to address any further details. And I would like to invite you to our call from the first quarter of 2014, and it's going to be on May 7. Thank you very much, and have you all a good day.

The conference call from Gerdau is concluded. Thank you all for participating. Have a good afternoon.