Good day, everyone and welcome to the Ternium fourth quarter 2012 earnings results conference call. This call is being recorded. At this time, I would like to turn the call over to Mr. Sebastian Marti. Please go ahead, Sir.

Good morning and thank you for joining us today. My name is Sebastian Marti and I am Ternium's Director of Investor Relations. Ternium issued a press release earlier today detailing its' results for the fourth quarter and full year, 2012. This call is complimentary to that presentation. Joining me today are Ternium's CEO, Mr. Daniel Novegil and Ternium's CFO, Mr. Pablo Brizzio who will discuss our performance. At the conclusion of our prepared remarks, we will open up the call to your questions. Before we begin, I would like to remind you that this conference call contains forward-looking information and that actual results may vary from those expressed or implied. Factors that could affect results are contained in our filings with the Securities and Exchange Commission and in our press release issued today. With that, I'll turn the call over to Mr. Novegil.

All right, thank you, Sebastian. Good morning to everyone. I just would like to start by doing some remarks about our results in 2012. And after a while and before we enter into the Q&A session, Pablo Brizzio will comment on our quarterly results and the outlook that we foresee for the first quarter of 2013. Ternium net income in 2012 was $187 million or $0.71 per share compared to $650 million in 2011 or $2.61 per share. The two main reasons for this yearly decrease in net income were a $364 million loss related to our investment in Usiminas, including a $275 million impairment and in our lowering operating income that we will discuss afterwards. We performed an impairment taste of the investment in Usiminas. And subsequently, we wrote down this investment by $275 million. This charge was included in the fourth quarter, 2012 that we are discussing today. The impairment was mainly due to expectations of a weaker industrial environment in Brazil where industrial production and consequently steel demand have been suffering downward adjustments. In addition, a higher degree of uncertainty regarding future prices of iron ore led to a reduction in our forecast of long-term iron ore prices that affected the cash flow expectations. I do remain totally convinced that the Brazilian market continues to offer great opportunities and prospects for Usiminas. And also I remain totally convinced that the turnaround of [inaudible] through Usiminas is doing very well. And it will end up turning over Usiminas into a very competitive and efficient company with a capacity to offer high value added products and services in Brazil and the whole Latin American market also taking advantage of turning commercial network and capabilities in the region. As Usiminas' CEO mentioned in yesterday's conference call, Usiminas is performing an…

Thanks Daniel and good morning to everybody. I would like now to provide a brief comment on our performance in the fourth quarter of 2012 and the outlook for the following quarter. But before that, I would like to mention the changing segment reporting that Ternium is taking. Following a new internalization and reporting Ternium, we changed the reporting of the operating segments from flat long [inaudible] product to steel mining. In addition, we changed the reporting of [inaudible] information from North America, South, and Central America, and Europe, and others to Mexico, Southern Region, and other markets. The Southern Region excludes [Inaudible] Argentina, Bolivia, Chile, Paraguay, and Uruguay. And other markets covers the rest of the world, although the majority of it is usually Columbia, the U.S., and Central America. Let me remind you here Ternium had two mining companies, Las Encinas and Peña Colorada. Ternium owns 100% of Las Encinas. And consequently, Las Encinas is rated in Ternium financials. On the other hand, Ternium owns 50% of Peña Colorada. So according to how we operate, Peña Colorada is not considered in Ternium financial and is accounted for under the equity methods. The consequences of this is that Ternium mining segments all includes the Las Encinas operations. So you will see [inaudible] about two million tons per year in the mining segment. While the other approximately two million tons we got from Peña Colorada are not included in the segment. Let's go back to the performance of the company. [Inaudible] in the fourth quarter, 2012, was $227 million. $113 million lower than the [inaudible] in the third quarter 2012 mainly as a result of 6% lower net sales and 3% higher steel operating cost per ton, which increased mainly due to higher cost of third part [inaudible] in Mexico…

(Operator instructions). Our first question comes from the Diego LaSaga of Merrill Lynch. Your line is open. Diego LaSaga – Merrill Lynch: Thank you. I have two questions. First one, you continue to evaluate options to close your [inaudible] in Mexico, so in this context, is TSA still an option for Ternium or are you evaluating other options and what would those be? The second question, if you could give us some additional color on the North American steel market performance in the first quarter. Are you seeing any signs of [inaudible] recovery and what’s the price tend from here in your view? And then if you could tell us about specific factors that you’re seeing any kind of signs of recovery, that would be great. Thank you.

All right. So firstly related to this lab, to the lab issue, the first I mentioned in my opening remarks that we are expanding capacity of the lab in Argentina, in [inaudible] ½ a millon tons because of entering operation in [inaudible]. As I said in the opening remarks, we’ll start of in first quarter of 2014. As you know, CSA in Brazil is a lab producer and we are a big buyer of [inaudible] in the market, maybe the largest worldwide. So that makes sense for us to check the integration opportunity for there. In this respect, we are following the process. Let me mention on the same token that we are not looking at dis-enrolling in facilities in the U.S., Alabama. We are looking not looking. So at the end, we are following the process, we are participating in the process and at least what I have to say right now because, you know, because of confidentiality issues. Second, regarding the U.S. as well as the Mexican market that also has to – it would influence coming from the U.S., we see an expansion in the marketplace first coming from the automotive industry. That also means that the U.S. market will be in 2013 at the same level or slightly over the record levels that the automotive industry had in 2007 before the last economic crisis in North America. So these markets is performing quite well as well as other [inaudible] effectors like [inaudible] home appliances. The real estate market is – the construction market has not recovered in years but is having a good [inaudible] first because of a decrease in inventory levels because no houses can be built in residential as well as industrial or in building spaces in the last four years, so this inventory…

Yes. No, no, we are [inaudible] the TSA standing alone up to this moment. You know that Usiminas – really, it’s not a target now is starting in turning around and [inaudible] through and also, you know, any factors that you know. So we are announcing the CSA as a standing alone project of Ternium and we are not looking at the [inaudible]. Diego LaSaga – Merrill Lynch: All right. Thank you.

Thank you.

We did not do that, but we always have a chance of doing that, even that close relationship that we have had with them over the years. Carolos De Alba – Morgan Stanley : All right, thank you.

Thank you, Carolos.

Our next question will come from Marcos Assumpcao of Itau. Your line is open. Marcos Assumpcao – Itau: Hi, good morning, everyone. My first question, if you could comment the difference between, or the possibility between increasing the lab capacity max now that natural gas has becoming increasingly available there versus buying the asset from scratch like CSA for example, how do you compare the two options?

Well, the two options can be compared, you know, on different fields, Marcos. First, in order to have a right, a proper supply of labs to our needs in Mexico, it will require either to make an acquisition of a manufacturing facility in Mexico, the only one is the one that [inaudible] and as we know, they are not as [inaudible]. The second one would need to be in build a new facility in Mexico, that, you know, four years, five years to do so and to be capacity you see rate of reduction to supply our needs of this lab. In the case of CSA, we have a new facility we can adapt from the very beginning to [inaudible] to fit our needs and also a facility of CSA in Mexico in Brazil is ready to produce high-end kind of products. So the difference would be, one the difference in building against buying, price per ton, and second, the timing getting into the market with both projects with weather. Having said that, we consider that facility is not in sale and so we have either two choices to go for CSA to cover our lack of [inaudible] or to be in a brand new facility and it would take, as I said before, four years at least. Marcos Assumpcao – Itau: Perfect. And can you give us – can you provide us an idea of timing for this deal because we heard it was a little bit delayed but the buying offers should be submitted by February 15th and then now it’s going to be delayed. Can we have a sense of when this deal could be finalized?

Marcos, as you know in every process, this is settled by the seller, so what we are doing is following the process. So in time this process will have an end, but this is dependant of the time scale that the seller has put in place. Marcos Assumpcao – Itau: All right. Thanks.

It will take some time, Marcos. It will take some time. Marcos Assumpcao – Itau: Okay, all right. Last question; regarding the write off of the [inaudible] investment, you mentioned that you are also considering a lower forecast for long-term iron-ore prices. Can you provide us the long-term price that you are using now in your models and if you also use it lower long term iron ore, if you consider that also to write down the asset?

Regarding the permit of Usiminas, we were explaining to you in the call, the write down we performed was based upon mainly two reasons, two main reasons. The first one being weaker growth forecast than the one that we had originally inspected in that production in Brazil. At the same token, we’ve considered that measures are being taken by the facility and the government and so we expect today that they are going to cover it beneficial and possible effect from the [inaudible] industry in the future. But you know, we have been expecting better volumes in Brazil in 2013 in matters related in industrial development of Brazil. The second reason, you know, is the increasing and uncertainty and volatility in the pricing of iron ore during 2013. These brought about a lower long-term price of iron ore in our projections. And that impacted is our cash flow expectations. You asked me which are the numbers which we are using in our model in dollars [inaudible]. Regarding volumes, we didn’t make any important consideration in volume production. The main reason of the permit was the low expectation in iron ore prices that we put in our model. Marcos Assumpcao – Itau: Perfect. Thank you very much.

Thank you, Marcos.

Our next question comes from Alex Hacking of Citibank. Your line is open. Alexander Hacking – Citibank: Hi. Good morning. Thanks for the call and taking questions. First question is, whether you have any update on the potential of the palletizing facility in Brazil or should we assume that this decision is on hold until CSA is resolved? And then the second question is a technical question. Do you require any certification from automotive companies for the new galvanized product or you could effectively start selling to them immediately? Thanks.

Well, related to the [inaudible] project, we have written down in this quarter that we are announcing today – we have been [inaudible] this project. And the reason for doing that is that as I mentioned in our last investor day as well as in some of our calls is because this project was based upon first their ability of natural gas in the area because if you remember, we – at one point of time we said that we switch in some sense from – on licensing the blast furnace against [inaudible] reductions. And second, also this project was based upon the ability of iron ore in quantity and in quality in the area. Now, as you also know, there have been delays and investment overruns, important overruns in the American and [inaudible] project. So for these two reasons, we consider that we had to make a write up or write down of the expenses that we have committed in relationship with Port De Su. Even when – even when – and at the end of everything, I know it’s taking into consideration what happened with CSA and so on and so forth, we will maintain for a while our options open. I mean, we will not close the page because it’s – that’s not – we will not be entering into expenses for doing so and so as you know we also like to have flexibility and options open for the future. Regarding the automotive industry, we have been working in these last two years, when we do the decision of going ahead with the investment together with Nippon Steel, we have been working very actively in Mexico in product specification, high-end developments, research and development, visiting customers, adjusting the logistics needed to serve a sophisticated market because…

I will say yes. I would say to compliment my answer to your question, Alex, that you know, we have a certification process that we have to follow, no doubt. You have to work in [inaudible] the customer to improve the performance of our samples to go back and forth to make adjustments. But we have been working on that. And also, because of having these [inaudible] it will give us a very good support and a very good back half to this activity where we are working together in a normal 50/50. As I said, with Nippon Steel, they have been in this market for years and it may be the number one company in the world. Though I would say that we are pretty optimistic that the ramp up will be recent and we’ll be able to pass this certification process at a good speed, you know. A reasonable speed. Alexander Hacking – Citibank: Thank you. It’s very clear and thank you for all the detailed answer that you give.

Thank you, Alex, thank you for your questions.

Our next question comes from Marcelo Aguiar with Goldman Sachs. Your line is open. Marcelo Aguiar – Goldman Sachs: Hi, good morning. Thank you for the opportunity. A quick question again on CSA. Can you share some thoughts, I suspect you guys have visited the facility. Just, I mean, first to have a sense of – in your view, do you guys need to make additional investments to make that facility feasible for your operations? And if you can show it as least a ballpark number or a range, you know, that’s the first question.

As you know, we are – as we said, we are following the process in the capacity of the moment to [inaudible] to answer these types of questions. We are [inaudible] and at some point in time if this moves ahead, of course we will run the full disclosure of these issues. Marcelo Aguiar – Goldman Sachs: Okay. The other questions will be more related to the fourth quarter results given. Some of my questions have already been made. Regarding your higher cost of flats, I didn’t understand, I mean, if you look to the lab prices having fallen, it seems, I think, mid-year, and you have the higher cost of those labs in the fourth quarter, we expect you’re going to have lower costs lab given [inaudible]. So is that because of the accident in Argentina not receiving [inaudible] for Argentina and having to buy more on the market? What happened there?

I believe we anticipated this in a prior call. We are still receiving due to FIFO due to fourth quarter flats that we worked basically in the second quarter of the year that were higher priced as the ones that we are seeing today. That’s why we are saying that we are optimistic in moving to the third quarter in which we will start to see or going through the [inaudible] line, the flats of lower prices of flats which are more related what you see today in the market. So this was something expected, of course, it’s also included in this increasing cost, the less efficient operation in Argentina due to the stoppage of one blast furnace. Marcelo Aguiar – Goldman Sachs: Can you quantify the impact of Argentina side? I remember you didn’t expect anything major.

In fact, so we are still behind the same assumptions. There is not a significant impact [inaudible]. In both cases we are expected to recover entering into 2013. Marcelo Aguiar – Goldman Sachs: Okay, but you don’t have a number for Argentina?

No because, in fact, it was not that big, the difference that we saw in the fourth quarter in comparison to the third quarter and between – these are the two main issues that impacted increase in cost and basically all the issues impacting the cost line into the quarter. Marcelo Aguiar – Goldman Sachs: Okay, thanks.

(Operator Instructions). Our next question comes from Rodrigo Barros with Deutsche Bank. Your line is open. Rodrigo Barros – Deutsche Bank : Yes, thanks for taking my questions. I have a couple of questions. The first one on CSA again, one issue that concerns me somewhat is that it’s probably going to be a difficult operation to turn around otherwise they would have done it and I wonder if you feel comfortable that you have the people to turn around CSA and finish the [inaudible] project, do the expansion in Argentina. So my first question is do you have such a number of engineers to do all those projects together? And my second question is on the synergies between [inaudible], how well they are doing. If you can talk a little bit about the share distribution matchbook project that you had. Anything that you can say on it would be great.

Well, the first question is CSA, as I said in my remarks, we are following that the process. You know, we couldn’t do that if [inaudible] in the right place and we are the largest buyer of flats worldwide, so we – so that’s why we are entering into this analysis. [Inaudible] and we did all the homework and we do have it with a staff of people either to go ahead with these project or to educate these people in a facility or to [inaudible]. So we have very good professionals, we have covered the most important area for the most important areas of [inaudible] we have a good [inaudible] of alternatives in people. This is the kind of facility that is familiar to us and to our history. I don’t see any special requirement there where we do not have people available, even to follow up these or to enter into [inaudible]. As I said in my remarks, we are very happy with the activity on the turnaround of Usiminas. They are doing well, they are working very hard, they are working in reducing working capital and increasing labor productivity and so on. So we expect that Usiminas will break through, will turn around and these will be reflected in the quarters to come. Maybe we can talk about this issue on our Investor Day on the 27th of June because this question about Usiminas and the synergies and then [inaudible] is a question that you like. Rodrigo Barros – Deutsche Bank : That’s great. Thank you very much.

Thank you. I’ll know hand the call back to Pablo Brizzio for closing remarks.

Okay, thank you for your interest in Ternium for your time today. We look forward to remaining in touch with you. As always, please contact us is you have any other questions. Thanks a lot. Bye, bye.

I appreciate the questions and I hope to see you on the 27th of June. Before that we will be having another call on April, April the 28th or 29th. So good luck and thank you for your questions.

Thank you. Ladies and gentlemen, this concludes the conference for today. You may all disconnect.