Webcast

Fourth Quarter 2006 Earnings Results Paulo Penido Pinto Marques

CFO and Investor Relations Director

Disclaimer
Declarations relative to business perspectives of the Company, operating and financial results and projections, and references to the growth of the Company, constitute mere forecasts and were based on Managements expectations in relation to future performance. These expectations are highly dependent on market behavior, Brazils economic situation, the industry and international markets, and are therefore subject to change.

CONSOLIDATED RESULTS IN 4Q06 AND 2006

Highlights
R$ million
Total Sales Volume (000 t) Net Revenues Gross Profit Operating Result (EBIT) a Financial Result Net Income EBITDA b Ebitda Margin EBITDA (R$/t) Total Assets Net Debt Stockholders' Equity Chg. Chg. 4Q06/4Q05 4Q06/3Q06 1% 10% 28% 22% -72% -43% 30% +5,5 pp 30% 4% -62% 19% 1% 5% -2% -11% -51% 5% -3% -3,1 pp -4% 5% -54% 2% Chg. 06/05 8% -5% -21% -25% -50% -36% -21% -7,2 pp -27% 4% -62% 19%

4Q 2006 4Q 2005 3Q 2006

1,992 3,277 1,171 907 (45) 752 1,186 36.2% 595 18,975 760 10,418 1,981 2,969 912 743 (162) 1,325 910 30.7% 459 18,195 2,012 8,753 1,971 3,127 1,195 1,022 (91) 715 1,228 39.3% 623 18,124 1,669 10,166

2006
7,945 12,415 4,268 3,560 (332) 2,515 4,368 35.2% 550 18,975 760 10,418

2005
7,348 13,041 5,415 4,760 (666) 3,918 5,525 42.4% 752 18,195 2,012 8,753

(a) Earnings before interest, tax and participations. (b) Earnings before interest, taxes, depreciation, amortization and participations.

STEEL INDUSTRY

International scenario: scenario

Fast pace of growth in the global economy. China and India with GDP growth close to 10% per year World crude steel production in 2006: 1.2 billion tons, up 9% from 2005 Asia: Strong demand, but declining prices Europe: Growing demand. Increasing imports from China and price decrease USA: Slowdown in the pace of economic growth. Higher imports from China and increase in the supply from local mills
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Domestic scenario:

STEEL INDUSTRY

Weak performance in the domestic economy. Slow pace of GDP growth Appreciation of the Real against the US dollar by 8%, leading to export losses Crude steel production in 2006: 30.9 million tons, down 2% from 2005 Flat steel demand: 2006/2005: up 7%. Segments that stood out following increased consumption: automotive, industrial equipment, household appliances
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USIMINAS - CONSOLIDATED SALES

72%

Consolidated Sales (000 t)

2,119 2,170 1,910 1,971 2,011 1,768 1,9811,954 2,028 1,971 1,992 1,8291,770 32% 31% 32% 33%

1,830 25%

1,939

1,822

26% 35% 36% 28% 27% 29% 29% 22% 30% 31% 46% 38%

Total sales in 4Q06: 1.99 MMt, 4Q06/4Q05 = up 1% 4Q06/3Q06 = up 1% Domestic sales: up 25% from 4Q05 and stable from 3Q06

75 74% 65% 75% 74% 65%64% 72%73% 71% 71%78%70% 69%54% %

62%69% 68%

75% 74% 65% 64% 72% 73% 71% 71% 78% 70% 69% 75% 74% 65% 64% 72% 73% 71% 71% 78% 70% 69% 54% 62% 69% 68% 67%

Exports: down 29% from 4Q05 and up 4% from 3Q06 Total sales in 2006: 7.95 MMt, up 8% from 2005

1Q03 2Q03 3Q03 4Q03 1Q04 2Q04 3Q04 4Q04 1Q05 2Q05 3Q05 4Q05 1Q06 2Q06 3Q06 4Q06

Domestic Market

Export Market

SALES MIX BY PRODUCT

2006
ElectroGalvanized 3% Heavy Plates 22% Slabs 14%
ElectroGalvanized 3% Heavy Plates 20%

2005
Slabs 15%

Hot Rolled 27%

Processed Products 4%

Hot Rolled 25%

Processed Products 4% Cold Rolled 25%

Hot Dip Galvanized 5%

Cold Rolled 28%

Hot Dip Galvanized 5%

EXPORTS BY COUNTRY - 2006

Colombia 3% Thailand 6% India 6%

Germany 13%

Argentina 6% Chile 4% Canada 8% Mexico 12%

Others 13%

United States 22% South Korea 2% Spain 5%

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CONSOLIDATED EBITDA
EBITDA & EBITDA Margin
50% 49% 48% 47% 46% 42% 36% 33% 31% 39% 41% 39% 36%

34% 31% 31%

EBITDA totaled R$ 1.2 billion (US$ 551 million) in 4Q06 and R$ 4.4 billion in 2006 (US$ 2.0 billion) EBITDA margin of 36% in 4Q06 and 35% in 2006

258

255

225

263

318

422

538

652

646

655

539

404

414

479

565

1Q 03 2Q 03 3Q 03 4Q 03 1Q 04 2Q 04 3Q 04 4Q 04 1Q 05 2Q 05 3Q 05 4Q 05 1Q 06 2Q 06 3Q 06 4Q 06

EBITDA (US$ million)

EBITDA Margin

551

CONSOLIDATED NET DEBT

2.7 2.6

2.5

Consolidated Net Debt / EBITDA

2.3 2.1 1.6 1.1 0.7 0.4 0.4 0.4 0.4 0.3 0.4 0.4

CND/EBITDA at low levels, 0.2 x Debt profile: Short Term - 22% Long Term - 78% Debt by currency: Domestic - 27% Foreign - 73%
0.4

0.2

2.4 2.6

2.5

2.3

2.2

1.9

1.7

1.3

1.0

1.0

1.0

0.9

0.7
1Q06

0.7

1Q03

2Q03 3Q03 4Q03

1Q04

2Q04 3Q04 4Q04

1Q05

2Q05 3Q05 4Q05

2Q06 3Q06 4Q06

0.8

CND (US$ billion)

CND/EBITDA

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4Q06 CONSOLIDATED CASH FLOW Brazilian GAAP (Brazilian Corporation Law) - R$ million
1,186 2,000 226 325 88 77 159 3 45 2,721

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Usiminas cash position totaled R$ 2.7 billion in 2006

2006 - STOCK PERFORMANCE

ADR Level I
USIM5 and USM3 vs Ibovespa
From 12/29/2005 to 12/28/2006
210 190 170 150 130 110 90 70 50 Dec-05 Jan-06 Feb-06 Mar-06 Apr-06 May-06 Jun-06 Jul-06 Aug-06 Sep-06 Oct-06 Nov-06 Dec-06 USIM3

187,1

144,8 132,9

PNA and ON shares rose 45% and 87% in 2006, respectively, while the Ibovespa rose 33% PNA shares continues the fourth most traded at the So Paulo Stock Exchange
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IBOVESPA

USIM5

OUTLOOK
International market: Inventory adjustments in the US and in Europe. Rising freight costs Likely reduction in Chinese exports due to expectations for the elimination of rebates and to the reaction of several countries against the exported volume Price recovery expected to start in the first half of 2007 Offer / demand stability during the second half of 2007

Domestic market: Expectation for demand growth over 8% (IBS). Demand will be spurred by recovery in volumes of heavy plates and by performance of industrial sectors Factors that can influence demand: - reduction in interest rates and maintenance of high credit volumes; - increase in investments on important steel consuming sectors and increased demand from the main industrial sectors

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USIMINAS OUTLOOK FOR 2007

Total sales: approximately 8.0 million tons, stable compared with 2006 Domestic Market: 70% of total sales volume = 6% growth, spurred by demand increase, notably heavy plates Exports: 30% of total sales

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OTHER HIGHLIGHTS

Investment grade rating from Fitch Ratings Social Statement Award Guide of the 500 Best Companies Award, granted by the Isto Dinheiro magazine (Usiminas and Usiparts) Finalist in the 10th Transparency Award 2006 Finalist in all APIMEC Award categories
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For further information:

Investor Relations Team

Bruno Seno Fusaro brunofusaro@usiminas.com.br Phone: 55 31 3499-8710 Matheus Perdigo Rosa mprosa@usiminas.com.br Phone: 55 31 3499-8056

Luciana Valadares dos Santos lsantos@usiminas.com.br Phone: 55 31 3499-8619 Gilson Rodrigues Bentes gilson@cosipa.com.br Phone: 55 11 5070-8980 So Paulo 55 31 3499-8617 B. Horizonte

www.usiminas.com.br/ri_investidores
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