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Public Disclosure - Belo Horizonte April 25th, 2016 Usinas Siderrgicas de Minas Gerais S.A.

- Usiminas (BM&FBOVESPA: USIM3,


USIM5 e USIM6; OTC: USDMY and USNZY; LATIBEX: XUSIO and XUSI) today releases its first quarter results (1Q16). Operational
and financial information of the Company, except where otherwise stated, are presented based on consolidated figures, in Brazilian
Real, according to International Financial Reporting Standards (IFRS). All comparisons made in this release take into consideration
the fourth quarter of 2015 (4Q15), except where stated otherwise.

Release of 1Q16 Results


The main operational and financial indicators were:

Steel sales volume of 903 thousand tons;


Iron ore sales volume of 974 thousand tons;
Consolidated Adjusted EBITDA of R$51.6 million and Adjusted EBITDA margin of 2.5%;
Working capital on 03/31/16 of R$2.2 billion;
Cash position on 03/31/16 of R$1.7 million;
Investments of R$70.0 million.
Main Highlights
1Q16

4Q15

1Q15

Steel Sales Volume (000 t)


Iron Ore Sales Volume (000 t)
Net Revenue
COGS
Gross Profit (Loss)
Net Income (Loss)
EBITDA (Instruction CVM 527)
EBITDA Margin (Instruction CVM 527)

903
974
2,041
(2,081)
(41)
(151)
50
2%

1,205
670
2,404
(2,471)
(67)
(1,627)
(1,820)
-76%

1,256
1,139
2,680
(2,437)
244
(235)
354
13%

Chg.
1Q16/4Q15
-25%
45%
-15%
-16%
-39%
-91%
+ 7800 bps

Adjusted EBITDA
Adjusted EBITDA Margin
Investments (CAPEX)
Cash Position

52
3%
70
1,736

(250)
-10%
169
2,024

380
14%
232
2,621

+ 1300 bps
-59%
-14%

R$ million - Consolidated

Market Data 03/31/16

BM&FBOVESPA:

USIM5 R$ 1.81/share
USIM3 R$4.09/share

USA/OTC:

USNZY US$0.49/ADR

LATIBEX:

XUSI
0.45/share
XUSIO 1.03/share

1Q16 Results

Index
Consolidated results
Performance of the Business Units:
- Mining
- Steel
- Steel processing
- Capital goods
Events Subsequent to closing of the Quarter
Highlights
Capital markets
Balance sheet, Income and Cash Flow Statements

Economic Outlook

Expansionist policies once again supported the global economy, making a favorable economic
environment for emerging markets, even in a risk scenario. The U.S. Federal Reserve adopted
a conservative attitude and signaled that interest rates would rise less this year, and the
European Central Bank announced new incentive to credit measures. In China, in response to
the risk of a slowdown, the government implemented more expansionist policies. With Chinese
growth remaining stable in the first half of 2016, it was reduced investor concerns that China
would devalue its currency to seek greater competitiveness. At the same time, growth in the
main economies, including Japan, is stabilizing, reducing the recession risk.
The improvement in the economic outlook favored global financial conditions and commodities
prices, favoring the environment for Latin America. Nevertheless, for the two main economies
in the region, Brazil and Argentina, domestic issues have been preponderant, maintaining
them in recession. In spite of this, low growth and lower pressure on exchange rates have
created room for a more expansionist monetary policy.
In Brazil, after the drop of 3.8% in GDP in 2015, the expectation is that economic activity will
remain very weak, suggesting that the recession worsened in the 1Q16, although at a slower
rhythm than in the previous quarters. Additional downfalls in activity are expected, and Banco
Centrals Focus Report of 04/01/16 estimates a decline of 3.7% in GDP in 2016. Over this first
quarter, the combination of deep recession and exchange appreciation modified inflation
expectations, making it possible to anticipate the interest rate reduction cycle. Also according
to the Focus Report, projected inflation for 2016 is 7.0% with the Selic interest rate reaching
13.0% by the end of the year.

Economic Indicators Index

Indicators (%)

2015

2016*

GDP (IBGE)

-3.8

-3.7

Industrial Production (IBGE)

-8.3

-5.8

Inflation - IPCA

10.7

7.3

14.25

13.75

3.9

4.0

Local Interest Rate - Selic (End of Period)


FX Rate R$/USD (End of Period)
Source: IBGE, FOCUS Data (04/01/16) - Central Bank
*Estimated

1Q16 Results

Economic and Financial Performance


Comments on Consolidated Results
Net Revenue
Net revenue in the 1Q16 was R$2.0 billion, against R$2.4 billion in the 4Q15, due to lower
sales volume in the Steel and in the Capital Goods Units, partially compensated by higher sales
volume in the Mining and in the Steel Processing Units.

Net Revenue Breakdown


1Q16

4Q15

1Q15

Domestic Market

85%

79%

88%

Exports

15%

21%

12%

Total

100%

100%

100%

Cost of Goods Sold - COGS


COGS in the 1Q16 totaled R$2.1 billion, against R$2.5 billion in the 4Q15. For detailed
information, see each Business Unit sections in this document. Gross margin was a negative
2.0%, against a negative 2.8% in the 4Q15 and the gross net (loss) presented a 39.2%
recovery. The gross margin had the following pergormance:

Gross Margin
1Q16

4Q15

1Q15

-2.0%

-2.8%

9.1%

Operating Expense and Income


In the 1Q16, sales expenses were R$79.7 million, against R$63.8 million in the 4Q15, a 24.9%
increase, mainly due to higher distribution costs in function of exports in the Mining Unit and
higher provisions for doubtful accounts in the Steel Unit.
General and administrative expenses in the 1Q16 totaled R$89.7 million, against R$108.7
million in the 4Q15, a 17.4% decrease, mainly due to lower labor cost and lower third party
services by 24.6%.
Other operating expenses and income totaled R$110.1 million, against R$2.0 billion in the
4Q15, mainly due to the non-recurring effects in the 4Q15, referring to the reduction in the
accounting value of assets (impairment) and to provisions of expenses related to the business
restructuring in the Steel and in the Mining Units. In the 1Q16, there was a positive result of
the asset sale and write-off of R$72.0 million, composed by R$59.0 million from the sale of the
oxygen plant in Ipatinga and R$10.2 million from the sale of Rios Unidos Logstica e Transporte
de Ao, both in the Steel Unit, compensated by lower provisions for lawsuits by R$41.6 million
and the negative result of surplus electric energy sale, of R$40.8 million.
In this manner, the Companys operating margin presented the following performance:

EBIT Margin

1Q16 Results

1Q16

4Q15

1Q15

-15.7%

-92.6%

1.3%

Adjusted EBITDA
Adjusted EBITDA is calculated from net income (loss), reversing profit (loss) from
discontinued operations, income tax and social contribution, financial result, depreciation,
amortization and depletion, equity in the results of Associate, Joint Subsidiary and Subsidiary
Companies and not consider the impairment of assets. The adjusted EBITDA includes the
proportional participation of 70% of Unigal and others joint subsidiary companies.

EBITDA Breakdown
Consolidated (R$ thousand)

1Q16

Net Income (Loss)


Income Tax / Social Contribution
Financial Result

4Q15

(151,377)

(1,626,643)

(235,380)

(15,360)

(569,249)

(78,071)

(101,553)

Depreciation, Amortization

318,086

EBITDA - Instruction CVM - 527

1Q15

49,796

24,089

360,900

352,200

306,430

(1,819,603)

353,879

Equity in the Results of Associate and Subsidiary


Companies

(51,845)

(53,880)

(11,971)

Joint Subsidiary Companies proportional EBITDA

45,597

49,401

37,626

8,030

1,574,161

Impairment of Assets
Adjusted EBITDA

51,578

(249,921)

379,534

Adjusted EBITDA was a positive R$51.6 million in the 1Q16, against a negative R$249.9 million
in the 4Q15, mainly due to better performance of the Steel, the Mining and the Steel Processing
Units. For detailed information, see each Business Unit section in this document. Adjusted
EBITDA margin in the 1Q16 was 2.5%, against a negative 10.4% in the 4Q15.
It is worthwhile mentioning that, even excluding the extraordinary effects referred to the positive
result of the asset sale and write-off in the amount of R$72.0 million and of the negative result
of surplus electric energy in the amount of R$40.8 million, Adjusted EBITDA would have been a
positive R$20.4 million in the 1Q16.
Adjusted EBITDA margins are shown below:

Adjusted EBITDA Margin

1Q16 Results

1Q16

4Q15

1Q15

2.5%

-10.4%

14.2%

Financial Results
In the 1Q16, net financial revenue was R$101.6 million, against net financial expenses of R$24.1
million in the 4Q15, mainly due to foreign exchange variation gains of R$347.0 million, against
R$67.3 million in the 4Q15, due to the appreciation of 8.9% of the Real against the Dollar in the
1Q16, against an appreciation of 1.7% in the 4Q15, partially compensated by lower amount of
swap transactions of R$142.6 million.

Financial Result - Consolidated


R$ thousand

1Q16

Net Currency Exchange Variation

4Q15

1Q15

Change
1Q16/4Q15

346,957

67,315

(390,815)

(129,051)

13,578

93,983

Income and Inflationary Variation over Financial Applications

56,180

66,355

42,646

-15%

Other Financial Income

50,032

67,597

47,569

-26%

(176,913)

(168,577)

(116,472)

Swap Transactions Market Cap.

Interest and Inflationary


Installments

Variation over Financing and Taxes

Other Financial Expenses

Payable

in

(45,652)

(70,357)

(37,811)

FINANCIAL RESULT

101,553

(24,089)

(360,900)

+ Appreciation / - Depreciation of Exchange Rate (R$/US$)

8.9%

1.7%

-20.8%

415%

5%
-35%
-522%
-

Equity in the Results of Associate and Subsidiary Companies


In the 1Q16, equity in the results of associate and subsidiary companies was R$51.8 million,
stable in relation to the 4Q15, which was R$53.9 million. There was lower participation of
Unigal and Codeme in the period, compensated by greater contribution of MRS Logstica.

Net Profit (Loss)


In the 1Q16, the Company accounted for net loss of R$151.4 million, against a net loss of R$1.6
billion in the 4Q15, mainly due to the impairment of assets in the amount of R$1.6 billion in the
4Q15, against R$8.0 million in the 1Q16.

Working Capital
The Company concluded in the 1Q16 with working capital of R$2.2 billion, against R$2.3 billion
in the 4Q15, representing a 5.7% decrease, mainly in function of the reduction in accounts
receivable of R$139.3 million and of the reduction in the steel and raw materials inventories of
R$266.5 million, partially compensated by the reduction in the accounts payable of R$147.3
million.

Investments (CAPEX)
CAPEX totaled R$70.1 million in the 1Q16, 58.6% lower compared to the 4Q15, which was
R$169.2 million. Investments were mainly applied to sustaining CAPEX, with approximately
92% in the Steel Unit, 5% in the Mining, 2% in the Steel Processing and 1% in the Capital
Goods. The significant reduction in investments was mainly due to the Companys effort to
adjust its investments to cash generation.

Indebtedness
In the 1Q16, there was an important progress the discussions related to the Usiminas debt
profile in view of the economic scenario and the decline in steel consumption. With the
1Q16 Results

approval of the Board of Directors of a capital increase of R$1.0 billion, the main lenders of
Usiminas agreed to a standstill of 120 days (see Material Fact of 03/17/16) in order to enable
the Company to renegotiate its debt to a more appropriate debt profile and financial covenants
in relation to the current leverage levels. The increase of capital will occur through issue of
200,000,000 ordinary shares, all nominal and without nominal value (New Shares), at the
issuance price of R$5.00 per share. Nippon Steel and Sumitomo Metals Corporation have
committed to subscribing up to R$1.0 billion, subjected to the signing of final documents with
lenders.
Also in the 1Q16, the Board of Directors approved a Capital Increase to the limit of the
authorized capital of its Corporate Bylaws in the amount of R$64,882,316.80 through the
issuance of 50,689,310 preferred class A shares, all bearer and without nominal value (New
Shares) at the issuance price of R$1.28 per share.
The funds obtained from the of Capital Increase transactions will be destined to the Companys
cash position for purposes of reinforcing its working capital.
On 03/31/16, consolidated gross debt was R$7.4 billion, against R$7.7 billion on 12/31/15, a
5.8% decrease, mainly in function of the appreciation of the Real against the Dollar of 8.9%,
which directly impacted the Dollar debt portion, which accounted for 44.9% of total debt. Debt
by maturity composition was 38.8% in the short term and 61.2% in the long term.
The chart below demonstrates the consolidated debt indexes:
Total Indebtedness by Index - Consolidated
31-Mar-16

R$ thousand

Short Term

Local Currency
TJLP
CDI
Others
Foreign Currency (*)
Gross Debt

Long Term

31-Dec-15

TOTAL

TOTAL

55%

Change
Mar16/Dec15

31-Mar-15
TOTAL

Change
Mar16/Mar15

1,792,575

2,303,721

4,096,296

4,161,127

-2%

4,286,353

-4%

140,156

239,980

380,136

413,518

-8%

563,763

-33%

1,618,884

1,964,286

3,583,170

3,611,509

-1%

3,643,021

-2%

33,535

99,455

132,990

136,100

-2%

79,569

67%

890,680

2,441,142

3,331,822

45%

3,725,360

-11%

2,862,430

16%

2,683,255

4,744,863

7,428,118

100%

7,886,487

-6%

7,148,783

4%

Cash and Cash Equivalents

1,735,627

2,024,457

-14%

2,621,043

-34%

Net Debt

5,692,491

5,862,030

-3%

4,527,740

26%

(*) 99% of total foreign currency is US dollars denominated

The graph below demonstrates the cash position and the amortization debt profile in million of
Reais on 03/31/16:
Duration: R$: 28 meses
US$: 24 meses

2,015

1,768

1,736

140

1,576

580
1,479

610

1,009
861

75

1,595
1,187

545

966

934

536

13
316

Cash

2016

2017

2018

2019

Local Currency

1Q16 Results

2020

11

0
13

0
11

30
0
30

2021

2022

2023 on

Foreign Currency

Performance of the Business Units


Intercompany transactions are an arms-length basis (market prices and conditions) and sales
between Business Units are carried out as sales between independent parties.

Usiminas - Unidades de Negcios

Minerao
Minerao Usiminas

Transformao do
Ao

Siderurgia
Usina de Ipatinga
Usina de Cubato
Unigal

Bens de Capital

Solues Usiminas

Usiminas Mecnica

Income Statement per Business Units - Non Audited - Quarterly


R$ million

Mining
1Q16

Net Revenue

Steel
Processing

Steel*

4Q15

1Q16

4Q15

1Q16

Capital Goods

4Q15

1Q16

4Q15

Adjustment
1Q16

Consolidated

4Q15

1Q16

4Q15

106

86

1,739

2,124

431

425

170

211

(405)

(441)

2,041

2,404

Domestic Market

56

86

1,476

1,632

431

425

170

210

(405)

(441)

1,728

1,911

Exports

50

263

492

(1,786)

(2,236)

(410)

(47)

(113)

21

18

17

34

(15)

(16)

COGS
Gross Profit (Loss)

(105)
1

(56)
30

(407)

(152)

313

493

(177)

372

406

(2,081)

(2,471)

(33)

(36)

(41)

(67)

(280)

(2,159)

(320)

(2,226)

Operating Income (Expenses)

(53)

(1,337)

(188)

(726)

(25)

(82)

EBIT

(52)

(1,307)

(235)

(838)

(4)

(64)

18

(12)

(102)

(1)

24

Adjusted EBITDA
Adj.EBITDA Margin

-11%

-119%

46
3%

(179)
-8%

1%

0%

5%

12%

(31)

(34)

6
-

8
-

52
3%

(250)
-10%

*Consolidates 70% of Unigal

I) M I N I N G
Recent steel price increases in the international market by China and the expectation of
government incentives to raise the Chinese economy affected positively thr PLATTS prices, which,
on average, reached US$48.3/t in the 1Q16, against US$46.7/t in the 4Q15 (62% Fe, CFR China).
At the end of the 1Q16, the iron ore price reached US$55.0/t.

Operational and Sales Performance - Mining


In the 1Q16, production volume was 701 thousand tons, against 660 thousand tons in the 4Q15.
Sales volume recorded in the 1Q16 was 974 thousand tons, against 670 thousand tons in the
4Q15. The lower sales volume for Usiminas due to the stoppage of production of pig iron at the
Cubato plant in function of the temporary shutdown of the primary areas of this plant, was
compensated by 344 thousand tons of iron ore were exported.

1Q16 Results

Production and sales volumes are demonstrated in the chart below:


Iron Ore
Thousand tons

Production

1Q16

4Q15

1Q15

Chg.
1Q16/4Q15

701

660

1,461

6%

16

12

91

33%

Sales - Exports

344

Sales to Usiminas

614

658

1,048

-7%

974

670

1,139

45%

Sales - Third Parties - Domestic Market

Total Sales

Comments on the Business Unit Results - Mining


Net revenue recorded in the 1Q16 was R$106.1 million, against R$85.8 million in the 4Q15, a
23.6% increase, due to higher iron ore exports volume in the period and to an average
devaluation of 2.9% of the Real against the Dollar in the period (the exchange rate used for
revenues in the Mining Unit is the average exchange rate of the previous month), which was
partially compensated by a 5.4% decrease in PLATTS iron ore prices (62% Fe CFR China) adjusted
for the period of sales price formation of the Mining Unit. Another effect that increased revenue of
1Q16 was the change of criteria of registering railway and sea freights, which, up to the 4Q15,
were considered as a deduction of gross revenue, that reduced gross revenue in R$12,0 million in
the 4Q15 and, as of this year, are being recorded in COGS.
In the 1Q16, cash cost per ton was R$54.5/t, against R$55.1/t in the 4Q15, a 1.2% decrease
mainly due to lower labor costs and third party services, electric energy and fuel. In the 1Q16,
Cost of Goods Sold COGS was R$105.5 million, against R$56.0 million in the 4Q15, mainly by
reason of higher sales volume by 45.5%. In the 1Q16, COGS per ton was R$107.9/t, against
R$84.3/t in the 4Q15, a 27.9% increase, mainly in function of the change of criteria for registering
railway and sea freights, which reduced COGS/t of the 4Q15 in R$16.8/t and due to inventories
adjustment.
Net operating expenses were R$52.6 million, against R$1.3 billion in the 4Q15, due to the
impairment of assets in the amount of R$1.2 billion and to the provision for expenses related to
the business restructuring in the Mining Unit both having occurred in the 4Q15. There were no
effects of this nature in the 1Q16. It is worthy to mention the negative results with the sale of
surplus electric energy of R$4.0 million in the 1Q16, against a positive result of R$0.8 million in
the 4Q15.
In this manner, Adjusted EBITDA was a negative R$11.9 million in the 1Q16, against a negative
R$102.3 million in the 4Q15, a recovery of R$90.4 million. Adjusted EBITDA margin was a
negative 11.3% in the 1Q16, against a negative 119.3% in the 4Q15, a growth of 10,800 basis
points.

Investments (CAPEX)
Investments in the 1Q16 totaled R$3.7 million against R$45.7 million in the 4Q15, mainly
applied to sustaining CAPEX.

Stake in MRS Logstica


Minerao Usiminas holds a stake in the MRS Logstica through its subsidiary UPL Usiminas
Participaes e Logstica S.A.
MRS Logstica is a concession that controls, operates and monitors the Brazilian Southeastern
1Q16 Results

Federal Railroad Network (Malha Sudeste da Rede Ferroviria Federal). The company operates
in the railway transportation segment, connecting the states of Rio de Janeiro, Minas Gerais
and So Paulo, and its core business is transporting, with integrated logistics, cargo in general,
such as iron ore, finished steel products, cement, bauxite, agricultural products, pet coke and
containers.
In relation to the 4Q15, total volume transported by MRS fell 11%, reflecting seasonality that
typically favors rail cargo transportation at the years end in detriment to the first quarter.

II)

STEEL

Regarding the global crude steel production, the WSA registered a 3.6% decline in the first
three months of 2016 compared with the same period of 2015. The largest contributor to the
decline was China, which reduced production 3.2%. Installed capacity utilization advanced
from 64.9% at the end of December 2015 to 66.2% at the end of February. It, therefore,
continues below the 71.5% verified in the 1Q15. The first months of 2016 were marked by a
significant recovery in international steel prices after having reached historic lows and at
amounts below operational and marginal costs for a significant parcel of the global steel
industry.
The consumption expectation of the World Steel Association (WSA) for the year of 2016 is 1.5
billion tons, a decline of 0.8% compared with 2015. The greatest contribution to the reduction
in global consumption will come from China, where the slowdown, especially in Civil
Construction and Investments, should lead to a new decline in consumption of 4.0% in 2016,
after falls of 5.4% in 2015 and 3.3% in 2014. Global consumption excluding China should
return to a 1.8% growth in 2016, both among advanced economies, as well as in the block
emerging economies.
According to the Brazil Steel Institute (IABr), Brazilian crude steel production in the first
months of 2016 decreased 13.7% in relation to the same period in 2015 to an annualized
volume of 29.3 million tons. Flat steel production receded 18.4% in the period.
In relation to consumption, in the 1Q16, the Brazilian flat steel market consumed 2.2 million
ton, with 95% supplied by local plants and 5% by imports, which reached their lowest level
since third quarter 2007.
In comparison with the 4Q15, consumption practically remained stable. The rise in domestic
sales of 4.4% following the worst quarters of Brazilian plant deliveries since the peak of the
crisis in 2009 compensated the 45.8% fall in imports. In comparison with the 1Q15, apparent
consumption declined 30%. The Civil Construction and Industrial sectors, boosted by the
Shipbuilding, Agricultural and Highway Equipment segments, performed positively in relation
to the 4Q15, with growths of 5% and 4%, respectively. All other segments declined, with
White Goods being the negative highlight, with a 6% decline. Automotive consumption
remained practically stable, with a 1% less than in the 4Q15.
The figures in the 1Q16 reinforce the deterioration of the flat steel market in Brazil. The strong
decline in consumption occurred spread out over all consumer segments due to the strong
slowdown in industrial activity in the period. The lack of perspective in the economic outlook
and less optimistic prognoses about the economic recovery in the short term led customers to
reduce purchases, adjust inventories and postpone investments. In practical terms, all
consumer segments registered declines close or superior to 30%. In Civil Construction, the
decline in flat steel consumption is estimated to have been around 20%.

1Q16 Results

Production - Ipatinga and Cubato Plants


Crude steel production at the Ipatinga and Cubato plants was 794 thousand tons in the 1Q16,
against 1.2 million tons in the 4Q15, as a result of the production stoppage of pig iron at the
Cubato plant, due to the temporary shutdown of the primary areas at this plant.
Production (Crude Steel)
1Q16

4Q15

1Q15

Chg.
1Q16/4Q15

Ipatinga Mill

777

752

739

3%

Cubato Mill

17

436

640

-96%

794

1,188

1,379

-33%

Thousand tons

Total

Sales
Total sales in the 1Q16 were 903 thousand tons of steel, against 1.2 million tons in the 4Q15.
There was a 14.1% reduction in sales to the domestic market, which totaled 758 thousand tons
in the 1Q16, against 882 thousand tons in the 4Q15, result of the stagnation in the domestic
market. Besides this, there was a reduction of 55.0% in exports, which totaled 145.3 thousand
tons in the 1Q16, against 322.9 thousand tons in the 4Q15, due to greater selection of exports,
in function of the reduction of production excess as a result of the temporary shutdown of the
primary areas at Cubato Plant. There was a substantial improvement in sales mix, where sales
volume recorded 85.2% to the domestic market and 14.8% for exports. Prices practiced
presented an average 0.8% increase in the domestic market and 16.5% in the exports.

1,256
151

1,275

1,179

424

427

1,205

323

903

145
1,106

1Q15

850

751

2Q15

3Q15

Domestic Market

1Q16 Results
10

882

4Q15
Exports

758

1Q16

The main export destinations are shown in the charts below:

1Q16
Argentina

6%

2% 5%
2%
5%

Germany
USA

25%

Taiwan
India
Spain

7%

Mexico

10%

Italy

20%

Portugal
Others

19%

Sales Volume Breakdown


Thousand tons
Total Sales

1Q16

4Q15

Change
1Q16/4Q15

1Q15

903

100%

1,205

100%

1,256

100%

-25%

Heavy Plates

145

16%

162

13%

287

23%

-11%

Hot Rolled

260

29%

362

30%

418

33%

-28%

Cold Rolled

239

26%

313

26%

312

25%

-24%

Galvanized

229

25%

248

21%

214

17%

-8%

0%

0%

1%

30

3%

118

10%

19

2%

-74%
-14%

Processed Products
Slabs
Domestic Market

758

84%

882

73%

1,105

88%

Heavy Plates

135

15%

138

11%

261

24%

-2%

Hot Coils

219

24%

276

23%

341

31%

-21%

Cold Coils

205

23%

248

21%

285

26%

-17%

Galvanized

179

20%

194

16%

194

18%

-8%

0%

0%

1%

20

2%

25

2%

19

2%

-20%

145

16%

323

27%

151

12%

-55%

Heavy Plates

10

1%

24

2%

27

18%

-58%

Hot Rolled

40

4%

86

7%

77

51%

-53%

Cold Rolled

34

4%

65

5%

27

18%

-47%

Galvanized

51

6%

54

4%

21

14%

-6%

Processed Products

0%

0%

0%

Slabs

1%

94

8%

0%

Processed Products
Slabs
Exports

1Q16 Results
11

Comments on the Business Unit Results - Steel


In the 1Q16, net revenue in the Steel Unit was R$1.7 billion, 18.1% lower than in the 4Q15,
which was R%2.1 billion, due to a 14.1% decline in sales to the domestic market and to a
55.0% in exports. Average steel prices in the domestic market were 0.8% higher and 16.5% in
the exports in relation to the 4Q15. Net revenue of the 1Q16 was also affected by the change
of criteria of registering railway and sea freights, which, up until the 4Q15 were considered as a
deduction to gross revenue, that reduced gross revenue in R$82.9 million in the 4Q15 and, as of
this year, are being recorded in COGS.
In the 1Q16, cash cost per rolled ton was R$1,446/t, against R$1,473/t in the 4Q15, a 1.8%
reduction when comparing both periods, mainly due to prices and coke and iron ore cheaper
mix, partially compensated by higher expenses with wages and charges in function of a lower
fixed costs dilution.
The Cost of Goods Sold COGS was R$1,786 million on the 1Q16, against R$2,236 million in the
4Q15, mainly due to lower sales of steel volume of 25.1%. The COGS per ton was R$1,978/t
against R$1,856/t in the 4Q15, an increase of 6.6%, mainly in function of the change of criteria
of registering railway and sea freights, which had reduced the COGS/t in the 4Q15 in R$68.7/t and
in function of the effect of inventories reduction in 154 thousand tons on the 1Q16.
Sales expenses were R$44.5 million in the 1Q16, 26.7% higher than those in the 4Q15, mainly
due to higher provisions for doubtful accounts partially compensated by lower distribution
costs in function of lower export volume.
General and administrative expenses totaled R$64.5 million, against R$81.9 million in the
4Q15, a reduction of 21.3%, mainly due to the reduction of 14.1% in direct labor expenses
and of 5.7% in third-party services.
Other operating expenses and revenues totaled R$79.3 million in the 1Q16, against R$608.7
million in the 4Q15, mainly due to non-recurring effects in the 4Q15 (impairment of assets in
the amount of R$357.2 million, provisions related to business restructuring in the Steel Unit in
the amount of R$93.8 million), partially compensated by the positive result of asset sale and
write-off in the amount of R$72.0 million in the 1Q16 (composed by R$59.0 million from the
sale of the oxygen plant in Ipatinga and R$10.2 million from the sale of Rio Unidos Logstica e
Transporte de Ao), against a negative R$51.8 million in the 4Q15. In this manner, net
operating expenses totaled R$188.2 million, against R$725.6 million in the 4Q15.
Thus, Adjusted EBITDA in the 1Q16 was a positive R$46.0 million, against a negative R$178.7
million in the 4Q15. Adjusted EBITDA margin was a positive 2.6% in the 1Q16, against a
negative 8.4% in the 4Q15, an increase of 1100 basis points.

Investments (CAPEX)
In the 1Q16, investments totaled R$64.3 million, against R$107.6 million in the 4Q15, mainly
applied to sustaining CAPEX. The significant reduction in investments was mainly due to the
temporary shutdown of the primary areas at Cubato Plant and to the Companys effort to adjust
its investments to cash generation.

I) S T E E L P R O C E S S I N G

Solues Usiminas SU
Solues Usiminas operates in the distribution, services and small-diameter tubes markets
nationwide, offering its customers high-value added products. It serves several economic
segments, such as automotive, autoparts, civil construction, distribution, electro-electronics,
machinery and equipment and household appliances, among others.

1Q16 Results
12

In the 1Q16, sales of the Distribution, Services/Just-in-Time and Tubes Business Units were
responsible for 52%, 39% and 9%, respectively, of total sales volume.

Comments of the Results of the Business Units - Steel Processing


Net revenue in the 1Q16 was R$430.9 million, 1.4% higher than in the 4Q15, due lower
production costs by 3.3%.
In the 1Q16, cost of goods sold was R$409.7 million, practically stable in relation to the 4Q15,
which was R$407.3 million.
Operating expenses were R$25.2 million in the 1Q16, against R$82.2 million in the 4Q15, a
69.3% reduction, mainly due to the impairment of assets in the amount of R$56.7 million
occurred in the 4Q15.
Thus, Adjusted EBITDA in the 1Q16 was a positive R$3.0 million, against a negative R$1.0
million in the 4Q15. Adjusted EBITDA margin was 0.7% in the 1Q16, against a negative 0.2% in
the 4Q15.

II)

CAPITAL GOODS

Usiminas Mecnica S.A.


Usiminas Mecnica is a capital goods company in Brazil, which operates in the following
business areas: steel structures, shipbuilding and offshore, oil and gas, industrial equipment
and assembly and foundry and railcars.

Main Contracts
In the 1Q16, additional contracts with Vale S.A. and Petrobras were signed, allowing the order
portfolio to remain at the same level as in the 4Q15, which was around R$400.0 million.

Comments of the Business Unit Results Capital Goods


In the 1Q16, net revenue was R$169.7 million, 19.5% lower than in the 4Q15, which was
R$210.7 million, due to the reduction in the portfolio order in the equipment, structures and
assemblies segments, result of the stagnation of projects in the oil and gas and infrastructure
segments in the country.
Gross profit was R$17.3 million in the 1Q16, against R$34.0 million in the 4Q15, a reduction of
49.2%, in function of lower revenues obtained in all segments in and of lower margins in the
projects executed in the industrial assembly segment.
Adjusted EBITDA in the 1Q16 totaled R$8.3 million, against R$24.3 million in the 4Q15.
Adjusted EBITDA margin in the 1Q16 was 4.9%, against 11.5% in the 4Q15, a reduction of
660 basis points.

1Q16 Results
13

Events Subsequent to the Closing of the Quarter


General Extraordinary Shareholders Meeting (GESM): On 04/18/16, a capital increased
was approved by the Company by means of a private subscription in the amount of
R$1,000,000,000.00 (one billion Reais), through the issue of 200,000,000.00 (two hundred
million) new ordinary shares, identical to the already existing shares at the issue price of
R$5.00 (five Reais) per share.
Documents pertinent to the issuance are at disposition on the CVM site (www.cvm.gov.br),
BM&FBOVESPA (www.bmfbovespa.com.br) and the Company proper (www.usiminas.com/ri).
Capital Increase: The Companys capital will be increase to R$12,214,882,316.80, in the
limit of authorized capital by its Corporate Bylaws in the amount of R$64,882,316.80.
The Capital Increase will occur through issue of 50,689,310 preferred class A shares, all
bearer and without nominal value (New Shares) at the issue price of R$1.28 per share. The
funds obtained by means of the Capital Increase will be destined to the cash position of the
Company to reinforce working capital.
General Ordinary Shareholders Meeting (GOSM): On 04/28/16, the GOSM will be held
and will deliberate on the following matters: (1) Receive managements accounting report,
examine, discuss and vote on the Financial Report and Annual Report referring to fiscal year
2015, ended on 12/31/15; (2) Establish the global amount of remuneration of the Executive
Board and Board of Directors, effective and substitute members, for a mandate until the GOSM
of 2018, including deliberation on the number of positions to be filled in the election; (4)
Election of the Chairman of the Board; and (5) Election of the Members of the Fiscal Council,
effective and substitute members, for a mandate until the GOSM of 2017, as well as
establishment of respective remuneration. The pertinent documents to the matters on the
schedule of the Business of the Day are at the disposition of the Shareholders at the Company
Headquarters and on the CVM (www.cvm.gov.br), BM&FBOVESPA (www.bmfbovespa.com.br)
and the Company proper (www.usiminas.com/ri).

Highlights
Standstill Agreement: In March 2016, an Agreement between Usiminas and its main bank
creditors suspending the liability of the principal amount of debt obligations, as well as
obligations of fulfillment of covenants of financial indicators contained in the financing
contracts signed with the respective creditors was signed for a period of 120 days counting
from the documents signing.
Usiminas will continue to negotiate a financial restructuring project with the banks in such a
manner as to adjust its debt profile to short, medium and long term perspectives, with the
purpose of preserving the financial and operational capacity of the Company.
Employees elected representative to the Board of Directors: The Board of Directors will
have the participation of Luiz Carlos de Miranda Faria and his substitute Jorge Malta, who will
occupy the positions in the period from 2016 GOSM to 2018 GOSM. This card was elected as
representative of the employees on Usiminas Board of Directors in a vote held on 03/22/16 at
Company facilities. The election was organized to comply with changes in procedures relative
to the election of employee representatives on the Usiminas Board of Directors, defined during
the General Extraordinary Shareholders Meeting held on 01/21/16.
Toyota Global Suppliers Award: Usiminas was awarded during the Global Suppliers
Convention 2016, an annual event that recognizes the best suppliers of the Japanese
automaker all over the world. The award, received by Usiminas CEO Romel Erwin de Souza,
was conferred by Chairman of Toyota Motor Corporation, Takeshi Uchiyamada in a ceremony
held in February in Nagoya, Japan.
1Q16 Results
14

Usiminas is responsible for the supply of steel used by Toyota in its three Brazilian plants
located in Idaiatuba, Sorocaba and So Bernardo do Campo, in the State of So Paulo. Besides
this, Solues Usiminas processes products destined to the Idaiatuba and So Bernardo do
Campo plants and delivers parts to the auto makers that will be transformed into internal
metallic parts, exposed parts and structural reinforcement of the brands vehicles.

1Q16 Results
15

Capital Markets
Usiminas Performance Summary - BM&FBOVESPA (USIM5)
1Q16
Number of Deals
Daily Average
Traded - thousand shares
Daily Average
Financial Volume - R$ million
Daily Average

Change
1Q16/4Q15

4Q15

Change
1Q16/1Q15

1Q15

719,719

632,176

14%

488,983

11,995

9,578

25%

8,016

1,304,536

651,550

100%

21,742

9,872

120%

8,590

153%

1,763

1,692

4%

2,237

-21%

50%
149%

29

26

37

-21%

Maximum

2.11

3.73

-43%

5.19

-59%

Minimum

0.85

1.45

-41%

3.35

-75%

Closing

1.81

1.55

17%

4.97

-64%

1,834

1,571

17%

5,039

-64%

Market Capitalization - R$ million

13%

523,965

47%

Performance on the BM&FBOVESPA


Usiminas Common shares (USIM3) closed the 1Q15 quoted at R$4.09 and its Preferred shares
(USIM5) at R$1.81. In the quarter, USIM3 appreciated 1.7% and USIM5, 16.8%, respectively.
In the same period, the IBOVESPA index appreciated 15.5%.

Foreign Stock Markets


OTC New York
Usiminas has American Depositary Receipts (ADRs) traded on the over-the-counter market:
USDMY is backed by common shares and USNZY, by Class A preferred shares. On 03/31/16,
USNZY ADRs, that have higher liquidity, were quoted at US$0.49 and appreciated 32.4% in
the quarter.
Latibex Madrid
Usiminas shares are traded on the LATIBEX the Madrid Stock Exchange: XUSI as preferred
shares and XUSIO as common shares. On 03/31/16, XUSI closed quoted at 0.45,
appreciating 28.6% in the quarter. XUSIO shares closed quoted at 01.03, appreciating 5.1%
in the period.

1Q16 Results
16

For further information:

GERNCIA GERAL DE RELAES COM INVESTIDORES

Cristina Morgan C. Drumond

cristina.drumond@usiminas.com 31 3499-8772

Leonardo Karam Rosa

leonardo.rosa@usiminas.com

31 3499-8550

Diogo Dias Gonalves

diogo.goncalves@usiminas.com

31 3499-8710

Renata Costa Couto

r.couto@usiminas.com

31 3499-8619

Press: please contact us through e-mail imprensa@usiminas.com

Visite o Visit the Investor Relations site: www.usiminas.com/ri


or access by your mobile phone: m.usiminas.com/ri

1Q16 Conference Call Results - Date 04/25/2016


In Portuguese - Simultaneous Translation into English
Braslia time: at 01:00 p.m.

New York time: at 12:00 p.m.

Dial-in Numbers:

Dial-in Numbers:

Brazil: (55 11) 3193-1001 / 2820-4001

USA: (1 786) 924-6977

Audio replay available at (55 11) 3193-1012


Pincode for replay: 1494981# - Portuguese

Pincode for replay: 3357910# - English

Audio of the conference call will be transmitted live via Internet

See the slide presentation on our website: www.usiminas.com/ri

Statements contained in this release, relative to the business outlook of the Company, forecasts of operating and financial income and references
to growth prospects are mere forecasts and were based on the expectations of Management in relation to future performance. These
expectations are highly dependent on market conduct, the economic situation in Brazil, its industry and international markets and, therefore, are
subject to change.

1Q16 Results
17

Balance Sheet - Assets - Consolidated | IFRS - R$ thousand


Assets
Current Assets
Cash and Cash Equivalents
Trade Accounts Receivable
Taxes Recoverable
Inventories
Advances to suppliers
Financial Instruments
Other Securities Receivables

31-Mar-16

31-Dec-15

6,099,534
1,735,627
1,289,168
317,430
2,481,868
10,574
78,040
186,827

6,894,842
2,024,457
1,428,421
377,198
2,748,417
12,477
152,560
151,312

Long-Term Receivable
Deferred Income Tax & Social Contribution
Deposits at Law
Accounts Receiv. Affiliated Companies
Taxes Recoverable
Financial Instruments
Others
Investments
Property, Plant and Equipment
Intangible

20,516,248
4,553,616
3,322,746
610,238
4,302
87,722
342,097
186,511
1,122,739
14,491,957
347,936

20,863,490
4,697,628
3,281,063
597,392
4,412
81,263
559,654
173,844
1,084,311
14,743,629
337,922

Total Assets

26,615,782

27,758,332

Non-Current Assets

31-Mar-15
8,542,517
2,621,043
1,380,296
383,123
3,910,490
22,120
72,225
153,220
22,441,466
3,426,528
2,134,632
584,473
4,722
90,810
386,038
225,853
1,155,951
15,492,069
2,366,918
30,983,983

Balance Sheet - Liabilities and Shareholders' Equity - Consolidated | IFRS - R$ thousand


Liabilities and Shareholders' Equity
31-Mar-16
31-Dec-15
31-Mar-15
Current Liabilities
Loans and Financing and Taxes Payable in Installments
Suppliers, Subcontractors and Freight
Wages and Social Charges
Taxes and Taxes Payables
Accounts Payable Forfaiting
Financial Instruments
Dividends Payable
Customers Advances
Others

4,884,036
2,683,255
836,683
241,759
128,740
706,873
131,505
140
59,002
96,079

4,495,923
1,919,692
820,571
278,149
91,698
954,161
199,657
142
40,799
191,054

5,048,230
1,731,091
1,179,751
280,196
133,509
1,297,193
135,708
38,368
101,687
150,727

Long-Term Liabilities
Loans and Financing and Taxes Payable in Installments
Actuarial Liability
Provision for Legal Liabilities
Financial Instruments
Environmental Protection Provision
Others

6,920,481
4,744,863
1,158,741
572,214
78,248
130,913
235,502

8,268,552
5,966,795
1,153,379
557,455
203,845
127,103
259,975

7,445,663
5,417,692
1,202,560
497,117
205,489
89,372
33,433

Shareholders' Equity
Capital
Reserves & Revenues from Fiscal Year
Non-controlling shareholders participation
Total Liabilities and Shareholders' Equity

1Q16 Results
18

14,811,265
12,150,000
1,074,987
1,586,278

14,993,857
12,150,000
1,258,978
1,584,879

18,490,090
12,150,000
4,294,558
2,045,532

28,202,060

27,758,332

30,983,983

Income Statement - Consolidated | IFRS


R$ thousand
Net Revenues
Domestic Market
Exports
COGS
Gross Profit
Gross Margin
Operating Income (Expenses)
Selling Expenses
Provision for Doubtful Accounts
Other Selling Expenses

General and Administrative


Other Operating Income (expenses)
Reintegra Program (Brazilian Government Export Benefit)
Net Cost of Actuarial Obligations
Provision for Legal Liabilities
Result of the Non Operating Asset Sale/Write-Off
Result of the Sale of the Surplus Electric Energy
Cubato Reestructure
Mining Unit Reestructure (MRS Renegotiation)
MRSTake or Pay
Impairment of Assets
Other Operating Income (Expenses), Net

EBIT
EBIT Margin
Financial Result
Financial Income
Financial Expenses
Equity in the Results of Associate and Subsidiary Companies
Operating Profit (Loss)
Income Tax / Social Contribution
Net Income (Loss)
Net Margin
Attributable:
Shareholders
Minority Shareholders
EBITDA (Instruction CVM 527)
EBITDA Margin (Instruction CVM 527)
Adjusted EBITDA - Joint Subsidiary Companies proportional EBITDA
Adjusted EBITDA Margin
Depreciation and Amortization

1Q16 Results
19

1Q16

4Q15

1Q15

Chg.
1Q16/4Q15

2,040,890
1,727,749
313,141
(2,081,470)
(40,580)
-2.0%
(279,555)
(79,690)
(16,910)
(62,780)
(89,744)
(110,121)
244
350
(14,609)
71,972
(40,797)
(8,030)
(119,251)
(320,135)
-15.7%
101,553
99,122
2,431
51,845
(166,737)
15,360
(151,377)
-7.4%

2,404,124
1,910,870
493,254
(2,470,876)
(66,752)
-2.8%
(2,158,931)
(63,802)
(2,901)
(60,901)
(108,661)
(1,986,468)
2,645
(4,121)
(56,216)
(50,121)
(1,262)
(93,811)
(162,957)
33,875
(1,574,161)
(80,339)
(2,225,683)
-92.6%
(24,089)
125,187
(149,276)
53,880
(2,195,892)
569,249
(1,626,643)
-67.7%

2,680,422
2,349,706
330,716
(2,436,800)
243,622
9.1%
(208,144)
(51,154)
1,185
(52,339)
(122,471)
(34,519)
7,525
(3,954)
(44,708)
373
27,865
(8,383)
(13,237)
35,478
1.3%
(360,900)
368,863
(729,763)
11,971
(313,451)
78,071
(235,380)
-8.8%

-15%
-10%
-37%
-16%
-39.2%
-850 b.p
-87%
25%
483%
3%
-17%
-94%
-91%
-74%
3133%
-99%
48%
-86%
+76900 b.p
-21%
-4%
-92%
-97%
-91%
-60200 b.p

(152,770)
1,393
49,796
2.4%
51,578
2.5%
318,086

(1,356,843)
(269,800)
(1,819,603)
-75.7%
(249,921)
-10.4%
352,200

(247,460)
12,080
353,879
13.2%
379,534
14.2%
306,430

-89%
+78100 b.p
-12900 b.p
-10%

Cash Flow - Consolidated | IFRS


R$ thousand
Operating Activities Cash Flow
Net Income (Loss) in the Period
Financial Expenses and Monetary Var. / Net Exchge Var.
Interest Expenses
Depreciation and Amortization
Losses/(gains) on Sale of Property, Plant and Equipment
Equity in the Results of Subsidiaries/Associated Companies
Impairment of Assets
Difered Income Tax and Social Contribution
Constitution (reversal) of Provisions
Actuarial Gains and losses
Stock Option Plan
Total
(Increase)/Decrease of Assets
Accounts Receivables Customer
Inventories
Recovery of Taxes
Judicial Deposits
Accounts Receiv. Affiliated Companies
Others
Total
Increase /(Decrease) of Liabilities
Suppliers, Contractors and Freights
Amounts Owed to Affiliated Companies
Customers Advances
Tax Payable
Securities Payable Forfaiting
Actuarial Liability Payments
Others
Total
Cash Generated from Operating Activities
Interest Paid
Income Tax and Social Contribution
Net Cash Generated from Operating Activities
Investments activities cash flow
Marketable Securities
Amount Received on Disposal of Investments
Amount Paid on the Acquisition of Investments
Fixed Asset Acquisition
Fixed Asset Sale Receipt
Additions to / Payments of Intangible Assets
Dividends Received
Purchase of Software

1Q16

4Q15

(151,377)
(54,411)
70,502
318,086
(1,972)
(51,845)
8,030
(20,441)
2,572
(350)
1,209
120,003

(1,626,643)
29,454
65,178
352,200
50,314
(25,318)
1,574,648
(558,581)
93,441
4,121
985
(40,201)

127,563
288,733
51,389
(12,844)
110
(32,793)
422,158

(63,942)
156,622
(23,347)
(32,663)
125
115,938
152,733

16,112
(24,262)
18,203
38,016
(184,626)
(51,384)
(137,779)
(325,720)

(255,043)
262,354
(13,854)
4,596
88,125
(56,548)
46,619
76,249

216,441
(240,115)
(4,135)
(27,809)
111,194
(64,859)
2,364
855
(4,576)

188,781
(120,911)
(21,555)
46,315
(1,003,543)
(152,985)
9,263
83,238
(8,777)

Net Cash Employed on Investments Activities

44,978

Financial Activities Cash Flow


Assigned Credits
Settled Credits assignments
Inflow of Loans, Financing and Debentures
Payment of Loans, Financ. & Debent.
Payment of Taxes Installments
Swap Operations Liquidations
Dividends and Interest on Capital

24,825
(87,487)
(90,104)
(552)
(30,723)
(2)

477,357
(593,585)
(207,420)
(304)
(23,332)
(2)

(184,043)

(231,058)

Net Cash Generated from (Employed on) Financial Activities


Exchange Variation on Cash and Cash Equivalents

(1,072,804)

(10,762)

(1,927)

(177,636)

(1,375,702)

Cash and Cash Equivalents at the Beginning of the Period

800,272

(3,668,001)

Cash and Cash Equivalents at the End of The Period

622,636

(5,043,703)

Cash and Cash Equivalents at the Beginning of the Period


Marketable Securities at the Beginning of the Period
Cash and Cash Equivalents at the Beginning of the Period
Net Increase (Decrease) of Cash and Cash Equivalentes
Net Increase (Decrease) of Marketable Securities

800,272
1,224,185
2,024,457
(177,636)
(111,194)

2,175,974
220,642
2,396,616
(1,375,702)
1,003,543

at the End of the Period


Marketable Securities at the End of the Period
Cash and Cash Equivalents at the End of the Period

622,636
1,112,991
1,735,627

800,272
1,224,185
2,024,457

Net Increase (Decrease) of Cash and Cash Equivalents

RECONCILIATION WITH BALANCE SHEET

1Q16 Results
20Cash and Cash Equivalents