Good afternoon, and welcome to Gerdau's conference call to discuss the results for the third quarter of 2014. [Operator Instructions] We would like to emphasize that any forward-looking statement 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 its 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 André Pires, CFO and IR officer. With no further ado, I would like to give the floor to Mr. André Gerdau Johannpeter. You may proceed, sir. André Bier Gerdau Johannpeter: Thank you. Good afternoon, everyone, and welcome to our conference call to talk about Gerdau's results. I would like to initiate our analysis with an overview of the world steel landscape. After that, I will talk about Gerdau's performance in the third quarter of 2014, and I will give you, then, details about investments in the period. It's also important to highlight that we will analyze the performance of the third quarter vis-à-vis the same period of the year before. Further on, André Pires will give you details about the financial performance of Gerdau, and later on, we will be available to take your questions. For those of you who follow us on the web, I will start by discussing the very challenging landscape of the steel industry with increasing competitiveness, margin pressures and rate volatility. And that's because we are still facing an overcapacity of the steel production, while at the same time, we face a lower pace of growth of global steel consumption. Just to give you…

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

I have 2 questions. The first one refers to your BO in America. Could you please refer to your margin sustainability in the U.S., whether it is possible for us to assume margins around 8% to 12% as being a sustainable margin, considering that there are some ups and downs in some quarters? And the second question is about scrap prices in Brazil, whether you could tell me a little bit about this scrap market, whether we could envision a gain in the metal spread in Brazil in the fourth quarter, considering these 2 variables of the steel price. André Pires de Oliveira Dias: All right, Thiago. This is André Pires. Well, on North America, and referring to the sustainability of that margin, it's a bit difficult to give you a forecast for the next quarters because some factors must be taken into account. On the positive side, we still see great consistency in the recovery of the economic growth in North America, particularly in the United States. We also see an increase in the number of nonresidential constructions, if we get the information from that bullet, [ph] If the growth in the last 12 months until September is 8.7%, which shows consistency in this recovery process. But by the same token, there is also the issue of the international price of longs in general, and also imports that still play an important role in the U.S. market. So it's an equation between a firm demand, but also a very aggressive offer of products coming into the U.S. market. And you must also factor in seasonality. The price of scrap is stable, which improves the margin, but we have the seasonality impact of the winter season. Therefore, I think it's too soon to tell or to give you any outlook of consistency or speak about its sustainability capacity.

Still referring to the United States. If we were to talk to you about a year ago, your margin was close to 0, almost something like that. And we knew that you will get close to 10%, which is indeed what you delivered, and that's what happened. So today, we can understand that what could have been done to improve your position in the market was done, so whatever increases will not be too large. So are we close to a margin equilibrium? André Pires de Oliveira Dias: It's difficult to give you a precise answer, Thiago. In terms of our internal measures to improve efficiency gains and to promote cost reductions, this is something that we can continue to do, and we will do so. But it will depend on the level of imports and also the competition capacity of the U.S. market vis-à-vis imported goods, and it also depends on the international prices. There is pressure coming from the international market, as André had referred to in his presentation, with this overcapacity in the global market, and this pushes down the -- on the supply side. But we believe that if things remain the same, this margin could be consistent. But it's difficult now to make a projection and tell you how things will be in the next 3 quarters. I think this is the point. Now referring to scrap in Brazil, we've seen a stable movement, also, slightly down. It's difficult to speak about a target for a spread in Brazil because when you calculate cost in Brazil, you have to factor some things in. But referring to the price of scrap, there hasn't been any specific pressure.

Our next question is from Marcelo Aguiar from Goldman Sachs.

My 2 questions are related to the strategic side of the business, and the question is addressed to André. If you look at the evolution of Gerdau's leverage, I'm seeing a very big effort in the last quarters. But your net debt over EBITDA level hasn't changed too much. If you compare it to your other quarters, nothing changed despite everything that has been done in the last quarters. So I just want to understand, what else the company could do so that we could see Gerdau generating a more relevant free cash flow? And I know that prices in the market cannot be controlled by you, but what is it necessary for us to see Gerdau with a net debt over EBITDA around 1.5 or something like that? And also, if you could tell me something about your CapEx for next year, it would be nice. And my next question refers to something that has been mentioned by André in several other occasions related to this very bad moment in the overall steel market because the company has been carrying irrelevant assets in Latin America, which deteriorates the return on capital, and the situation tends to get worse because the markets are open to imported products. I just want to understand up to what point Gerdau is comfortable in carrying over these assets in your balance sheet? Because I don't think that the global steel market will change anytime soon. André Pires de Oliveira Dias: Marcelo, this is André Pires. And referring to net debt over EBITDA, I don't know whether I agree with you when you said that there hasn't been any changes in that number from January to now. But if you consider the exchange rate variation, it was more than 15%. If you recall in the…

Next question from Ivano Westin from Crédit Suisse. Ivano Westin - Crédit Suisse AG, Research Division: Referring to the Brazilian demand or demand in Brazil, I think, André, you already referred to a very challenging landscape for next year. And if we look at the landscape, I think we can also add another competitor in terms of your longs mill. Could you please tell me what is the volume or the shipment expectation year-on-year until 2015, whether the best scenario would be flat or whether there is more room to increase exports, so that by the end of the year in terms of Brazil consolidated figures, it will be flat year-on-year? And I think that you're already closing your budget for next year, and so this will be my first point. The second, referring the mining. I think you already said that the landscape is challenging. A competitor of yours, a few days ago, talked about a possible reduction in the cost around $5 to $10. I would like you also to tell me whether you see some room for maneuver there in terms of expansion with this possible delay. What about your volumes for the period 2015, 2017 and CapEx for the mining area? André Pires de Oliveira Dias: Ivano, this is André Pires. Thank you for your question. Well, about the landscape in Brazil, you know that we never give any guidance about what we believe that could be the growth in the market. In Brazil, steel has had a 1.5% growth from now into 2015, which is pretty much in keeping with what we see. It's about 1% growth of GDP, is what people are talking about. So this number that Aço Brasil mentioned seems to be reasonable, but the landscape is still very cloudy. It's very…

Next question is from André Pinheiro from Itaú BBA. André Pinheiro - Itaú Corretora de Valores S.A., Research Division: I have 2 questions. We have heard in some other conference call from competitors that some of them are talking to the government to supervise and to look at imports of other materials, and this would be affecting the market. Are you also engaged in these debates? Do you see any possibilities of seeing an increase in import taxes? And are you taking any measures to supply -- I mean, to say about the domestic market? And the second question is still talking about sales of non-core assets and the optimization of your asset base as you did with Gallatin more recently. Do you see any further possibilities of doing anything else that -- I mean, or maybe any assets that could be sold? Or what would be the potential size of non-core assets? André Bier Gerdau Johannpeter: André, referring to imported products, at Aço Brasil we are doing some work with them with the ABNT or the institute of standards and norms. We want to ensure that products that come into the country are certified and comply with the standards, and we've seen -- I mean, we work together with the customs authority, and we are helping them to monitor the import of products. We have to verify whether they comply with the standards or maybe there is any alloy in the product that changes the composition. It changes sometimes slightly, but it changes the category. So this is something that we've been doing on a regular basis, and Aço Brasil is also participating in that. In terms of exports, I don't have anything to tell you at the moment. André Pires de Oliveira Dias: This is Pires. In relation to non-core assets, we don't have anything else from Gallatin. It's difficult to say whether there are other opportunities. Opportunities from now on of other operations similar to Forjanor, like I mentioned, they will always exist, and we are always looking. There is nothing in the radar, but we are still focused on the optimization of the assets that we may have that are not necessarily linked to our core business. In the case of Gallatin, it was much bigger, and something of that magnitude, it's more difficult.

Next question is from Milton Sullyvan from Brazil Plural. Milton Sullyvan - Brasil Plural Corretora de Cambio, Titulose Valores Mobiliários S.A., Research Division: I have 2 questions. The first is related to the domestic market. The prices in the domestic market increased quarter-on-quarter. Could you tell us a little bit what could be expected -- or what could be understood in addition to the change in the mix? And how do you see prices evolving from now on? And the second question is on Specialty Steels. We see that the truck market is not showing signs of recovery. And to that end, I would like to ask 2 things. First, how do you see the volumes in margins of Specialty Steels from now on? And whether you can tell me anything about the price negotiation with the automotive industry because you -- we've been hearing some news lately about that. André Pires de Oliveira Dias: Milton, this is Pires. In terms of the price, this is basically change in the mix, lower sales of finished goods in the third quarter, and also, I talked about a 5% growth in finished longs. And this improved the mix, allowing the net sales per tonne increase. Well, we do not have any particular outlook, but we will continue to work to improve our mix. I think your second question was about Specialty Steels, and I'll give the floor to André. André Bier Gerdau Johannpeter: Milton, referring to the Specialty Steels, the numbers about trucks that you mentioned, and also vehicles, are so far very similar to what we've seen throughout the year with a decline vis-à-vis the year before because it was a year of the World Cup and election. So after this period, we hope that, next year, we should experience some growth. We do not have any figures yet, but we've heard the government saying that there might be some incentives or lower taxes to boost the sales of vehicles and trucks, maybe, allowing for more credit measures that had an effect in the past. But then we see that there will weakened sales and then a decline. So the forecast is 1% of GDP, GDP next year, which is relatively low, and this should have an impact on the automotive industry after the election, when the elections are over. But it's still too soon to tell whether there will be substantial changes. But we think that Brazil will resume growth going beyond 1%.

Next question from Leonardo Correa from BTG Pactual.

I have just some very particular questions, and the first refers to your business in the United States. Can you please comment on the metal spread level? When we look at the prices on the screen, scrap, there has been a stronger variation on recent prices of scrap. Some said that there were drops -- there will be drops of $20 to $30 in November. But in the year, there was a decline of about $80 in the scrap price in the last few months. I just want to hear from you whether you see the landscape of metal spread increases, and what will be the level of the third quarter? And the second question is about capital allocation. We saw a reduction of BRL 300 million in your CapEx to BRL 2.1 billion. So what should we expect for the next few years? In your speech, you seemed to be cautious in terms of the economic landscape in Brazil, low productivity. I just want to understand whether there is any change in the heavy plate project from now on. And another question refers to the ore business. How to allocate the excess capacity that you have or your transfers to Ouro Branco, whether whatever is left? I mean, it could be allocated to the domestic market, and whether the domestic market will be able to accommodate all of that supply because the export market is still a bit complicated with the spot price below $80. André Pires de Oliveira Dias: Leonardo, this is Pires. About North America, today, our -- the level of metal spread in the third quarter was about $425, $430 for short tonne, and you have to convert it to metrics. And this -- the lowest, I mean, I think the lowest level occurred in the…

Yes. I just want to understand your strategy. Because when we break down Gerdau's cost in the export market, we see a level of cash cost deliver in China over $30. Therefore, I think that the profitability in the domestic market is much higher today considering this price level. So I just want to know whether you have buyers to accommodate all of this material in the domestic market. André Bier Gerdau Johannpeter: No, we do not have buyers to buy all of this volume. And great part of what we sell is export, and our focus with this price of ore is to supply to ourselves, so that we can be more competitive in our Ouro Branco mill, which is important to continue to export and also to offer billet to other markets. We do not have a large enough domestic market to accommodate the entire volume.

[Operator Instructions] Next question from Alan Glezer, Bradesco BBI. Alan Glezer - Bradesco S.A. Corretora de Títulos e Valores Mobiliários, Research Division: I have 2 questions. First about Latin America. We've noted that net revenue per tonne in dollars was up by $47 per tonne quarter-on-quarter in the third quarter and -- so given the amount of imports that we've seen coming from China, how is it possible to increase the net sales per tonne that way? I understand that the cost per tonne was up just the same way and the margins were not improving. But on the contrary, I just want to know what happened in the market that led to this increase in net sales per tonne, the way it happened. And the second question is about the strategy of selling slabs to the foreign market rather than the domestic market. I just want to know whether you could please tell me the difference between the profitability margins of slabs and exports of iron ore. Can you give us something that allows us to differentiate these 2 strategies? So these are my questions. André Pires de Oliveira Dias: Alan, this is André Pires. Well, first referring to Latin America. As André said earlier on, in Latin America, we are in 9 countries, and each country is very peculiar and very specific. In some instances, there are countries where inflation moves faster than the exchange rate we use to translate the results into our balance sheet. Therefore, there might be distortions. That is a fact. So this is my answer in terms of Latin America. But now speaking about slabs and ore. We do not have any specific calculation that considering this price of ore is worth at selling slabs or if the level changes, it is more worth it to export ore. But we just have to look at the opportunities where the exchange rate is favorable to export slabs and when the foreign market has a consistent and stable demand at good prices that allow us to have a positive margin, so this is what we consider in our decision-making process. But we do not consider increasing exports of slabs just because there was a decrease in the price of ore.

Next question from Milton Sullyvan from Brasil Plural. Milton Sullyvan - Brasil Plural Corretora de Cambio, Titulose Valores Mobiliários S.A., Research Division: I have 2 other questions. First, going back to Latin America and looking at the global market. I would like to know whether you have any expectation concerning what we've just heard about a possible removal of tax incentives from China related to tax reimbursements. That's the first question. The second question is even referring to the parity now, even with the exchange rate depreciation, and we see a dropping prices of steel in Turkey, how do you see this parity now? And how do you see the evolution of the Turkish steel prices from now on? André Bier Gerdau Johannpeter: Milton, this is André. Well, imports from China to Latin America and the rebate, which is a discount to import, that's one of the practices that we monitor not only in Brazil, but in the other countries of Latin America. And also, producers are constantly looking to see whether that is happening, and that has to be avoided. So this is one of the things that we monitor. We have that also for iron ore for [Audio Gap] In terms of the parity of the exchange rate, well, it's difficult to talk about prices around the world. You talked about Turkey -- but what is your question about risk rate? It does fluctuate according to the market, so we do not have any specific comments about that.

Now we conclude our Q&A session. I would like to give the floor to Mr. André Gerdau Johannpeter for his final remarks. André Bier Gerdau Johannpeter: Well thank you, all, very much for your interest, for your questions. If you still have any remaining question that -- or if we didn't answer your questions, please refer to our IR team. And I would like to invite you to participate in the results for our fourth quarter on March 4, 2015. Thank you very much, and have a good day.

Gerdau's conference call is now over. I would like to thank you, all, very much for participating, and have a very pleasant afternoon.