3rd Quarter 2005

World Steel Production

(million t.)

Substantial growth in the past few years ...

Years

World Prod.

1,100 1,000 900 800 700 600

1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

200 270 350 450 595 644 716 719 770 752 750 799 777 788 848 850 902 965 1,033

500
400 300 200 100

Average Growth Rates % per annum Years World 1970-75 1.6 1975-80 2.2 1980-85 0.1 1985-90 1.4 1990-95 -0.5 1995-00 2.4 2000-02 3.2

2002-03 2003-04

6.6 7.0

1950

1960

1970

1980

1990

2000

Source: International Iron and Steel Institute - IISI - 2005

Steel Production
... mainly coming from China

(million t.)

2004

269.3

112.7

98.5 64.3 47.5 46.4 38.7

32.9

32.6
India

28.4
Italy

China

Japan

USA

Russia

Korea

Germany

Ukraine

Brazil

Source: International Iron and Steel Institute - IISI - 2005

World Steel Trade

Trade ~ 200 million tons per year Trend may continue through 2005
Top net importers
million t.

Top net Exporters

million t.

Japan Ukraine Russia Brazil Belgium / Luxembourg Germany Turkey -5.0 -6.0 -6.1 -9.2 -13.2 -24.7 -30 -25 -20 -15 -10 -5 0 4.2 8.4 7.2 11.0

30.5 28.2 28.2

Vietnam Italy Hong Kong Thailand China USA

5 10 15 20 25 30 35

Source: International Iron and Steel Institute - IISI - 2005

Usiminas Leading Producer

Usiminas System is the 23rd largest producer in the world and 1st flat steel producer in Latin America Major Steel Plants 2004
(crude steel production)
million t.
1 - Arcelor 2 - Mittal Steel 3 - Nippon Steel 4 - JFE 5 - Posco 6 - Baosteel 7 - US Steel 8 - Corus 9 - Nucor 10 - Thyssen Krupp

Top Brazilian Steel Producers - 2004

million t.
46,9 42,8

32,4 31,6 30,2 21,4 20,8 19,0 17,9 17,6

Acesita 2.5%

Others 6.4%

USIMINAS SYSTEM 27.2%

Arcelor 25.0%

C SN 16.8%
Source: IBS - 2005

Gerdau 22.1%

23 - USIMINAS
Source: IISI - 2005

8,9

Steel in Brazil
Its competitive conditions make the country a global leader

High quality iron ore

Well located plants and modern technology

Qualified labor and management

Product quality and environmental management

Competitive Costs

Cost Competitiveness
Brazil has the lowest production cost in the world Production Cost (US$/t) Slabs (Jun 2005)
302 303 309 316 321 329 337

262 232

271

285

286

289

In di a

IS

hi na

ic o

M in i

te g

pa n

ad a

al ia

EU

ra

M ex

EU

In

an

us tr

Ja

W es t

Ea st

SA

K or

Source: WSD - August 2005

SA

ea

In

te g

zi l

Cost Competitiveness
Usiminas has one of the highest operating margins in the world

Operating Margin % - 2004

Data: Integer Research, Company Annual Reports September, 2005 7

Usiminas is strategically located

BAHIA

MINAS GERAIS

Ipatinga

Usiminas Usiminas Headquarters

Belo Horizonte Itabira CVRD

Port of Praia Mole Vitria

Usiminas Location: Ipatinga, State of Minas Gerais

Cosipa Cubato, State of So Paulo

RAILROAD HIGHWAY

SO PAULO
Rio de Janeiro Sepetiba Port Cosipa

So Paulo

Santos Cubato

ATLANTIC OCEAN

Close to main markets 2 ports Railroad (MRS)

8

Products
Complete product lines: from slabs to coated products
Capacity (tonnage/year)
Capacity: 5.0 million t.

Major consumers
Capacity: 4.5 million t.

Slab Heavy plate

5,000,000 1,000,000

4,500,000 1,000,000

Rolling mills. Pipelines, pressure vessels, shipbuilding, general structures. Agricultural machinery, pipe and tube, chassis, gas cylinders, containers, general structures. Auto industry, household appliances, packaging. Auto industry, household appliances. Auto industry, household appliances, civil construction.

Hot coil

3,550,000

2,100,000

Cold coil

2,500,000

1,200,000

Electrogalvanized coil

360,000 400,000

Hot dip galvanized coil

Sales
(thousand t.)

Domestic market is a priority

As of September, 2005

Usiminas + Cosipa
7,722 6,602
18% 30%

7,710
31%

8,062

28%

5,367
28%

82%

70%

69%

72% 72%

2001

2002

2003

2004

9M05
10

Domestic Market

Foreign Market

Domestic Sales - 9M05

Combination of market leadership and diversified customer base reduces market risk
As of September, 2005

Usiminas + Cosipa Volume: 3.88 million t.

Distributors { Fasal, Rio Negro and Dufer 7% 23% Autoparts 15% Others 16% Packaging 2% Household Appliances 2% Shipbuilding 1% Elect. Equipment Pipelines 9% 5% Auto Industry 13% Civil Construction 7% Small Diam. Tubes 7%
11

Domestic Market Share (%) 9M05

Combination of market leadership and diversified customer base reduces market risk
TOTAL Auto Industry Autoparts Small Diam. Tubes Pipelines Household Appliances Elect. Equipment Shipbuilding Civil Construction Packaging Distributors
0%

As of September, 2005

32% 51% 52% 12% 42%

21% 7% 7%

47% 42% 41% 46%

77% 28% 51% 25% 31% 6% 7% 15%

20%

17%
66%

6%

6% 14%

35%

75% 14%
87% 55%

30%
40% 60%

55%
80% 100%

Usiminas

Cosipa

Others
12

Usiminas + Cosipa = 53%

Domestic Market Outlook

Flat Steel Demand (1,000 t.)
10,109 8,368 8,650 8,576 8,908

Vehicle Production (1,000 vehicles)

2,210 1,682 1,817 1,793 1,828 2,400

9,200

8.6%

-9.0%

2000

2001

2002

2003

2004

2005E

Source: IBS / Usiminas

2000 2001 2002 Source: Anfavea / Usiminas

2003

2004

2005E

Sector Auto Autoparts Shipbuilding Agricultural/Road Mach. Industrial Machinery Household Appliances Civil Construction Small Diam. Tubes Distributors Pipelines Others TOTAL

2003 817 928 32 213 173 287 800 757 2,794 310 1,797 8,908

2004 1,142 1,188 84 247 178 343 868 743 3,097 344 1,875 10,109

04/03 (%) 39.8 28.0 162.5 16.0 2.9 19.5 8.5 -1.8 10.8 11.0 4.3 13.5 Source: Usiminas

13

International Market
Diversified geographic sales
As of September, 2005

Usiminas + Cosipa Volume: 1.5 million t. - 9M 2005

Chile Argentina 6% Mexico 3% 9% Colombia 3% Germany Spain 10% 2% Others 8%

South Korea 7% Canada 1% Portugal 1%

Taiwan 6% United States 22%

China 22%

14

Investments & Technology

(US$ million)

Commitment to the best technology

More than US$ 3 billion invested in the last decade

Partnership with Nippon Steel assures access to state-of-the-art technology in steel production, including high value-added products
6th Technology Transfer Agreement with Nippon Steel, valid until 2009

407 registered patents, of which 23 are international 150 researchers In the last 3 years, for each US$ 1 spent in technology Usiminas sells US$ 3

15

Investments & Technology

(US$ million)

Commitment to the best technology

737
212

740
162

Usiminas
Cosipa
500
31

546

New Investments

390
292
452 135

525

578

469

156

200 111 119

36 83

117
52 65

140
60 80
9M05

70 130
2005E

136
1997 1998 1999 2000

94
2001

79 32
2002

255

2003

2004

2006E

16

Investments & Technology

(US$ million)

Commitment to the best technology Next 2 years: Maintenance - approximately US$ 120 million per year Projects approved by the Board Increase of self-generated energy from 16% to 33% Power Plant 60 MW - Usiminas BF Top blowing turbine 12 MW - Cosipa Self-sufficiency in coke production by 2007 550.000 tons/year Coke plant - Usiminas Productivity Revamping of Continuos Casting Machine - Cosipa Projects under study Production Capacity Increase (on-going studies) 1.0 ~ 2.0 million tons

17

Creation of Ternium
Consolidate control of Hylsamex, Sidor and Siderar Ternium will have ~ 11.5 million t. capacity

Present Situation
Usiminas

Proposed Situation
Techint G.
Initial 83.7%

Usiminas
16.3%

16.6%

Ternium
C. Amaznia 5.3% Control Amaznia 59.7% Sidor Siderar 59.7% Control Sidor Siderar Control Hylsamex

18

Ebitda Evolution

Consolidated

(US$ million)
As of September, 2005

Investment return and market conditions have allowed consistent cash generation ...

45% 37% 27% 31%

42% 36% 33% 31%

46% 39%

49% 48% 50% 47% 41%

652 646 655 538 422 318 539

274 258 255 225 263 200 150 170

AVG. 1Q02 2Q02 3Q02 4Q02 1Q03 2Q03 3Q03 4Q03 1Q04 2Q04 3Q04 4Q04 1Q05 2Q05 3Q05 US$ 2.3220 2.5840 3.3697 3.7141 3.4929 2.9810 2.9326 2.8999 2.8985 3.0429 2.9782 2.7862 2.6672 2.4819 2.3454

Ebitda

Ebitda Margin
19

Ebitda Evolution

Consolidated

(US$ million)
As of September, 2005

Investment return and market conditions have allowed consistent cash generation ...

46% 31% 35% 32% 35% 35% 1,930

46% 1,840

1,001 742 530 671 794

AVG. 1999 US$ 1.8133

2000 1.8300

2001 2.3539

2002 2.9236

2003 3.0746

2004 2.9262

9M05 2.4981

Ebitda

Ebitda Margin
20

Total Debt Evolution Consolidated

(US$ million)
As of September, 2005

... and have made it possible to considerably reduce debt

5.2

5.0

Total Debt

Total Debt / Ebitda

4,500

4.2

3.4

2.9

2.8

2.7

2.6

3,500

3,387

2.4 1.9

1.4

1.1

3,111

0.8

0.7

0.7

2,811

2,699 2,593 2,764 2,705 2,626 2,598

2,500

2,316 2,204

2,033

1,847 1,812 1,817

1,500

500

R$ / US$

1Q02 2.3236

2Q02 2.8444

3Q02 3.8949

4Q02 3.5333

1Q03 3.3531

2Q03 2.8720

3Q03 2.9234

4Q03 2.8892

1Q04 2.9086

2Q04 3.1075

3Q04 2.8586

4Q04 2.6544

1Q05 2.6662

2Q05 2.3504

3Q05 22,222

21

Debt Maturity Consolidated

(US$ million)

Debt has an adequate maturity profile Stand by Facility - Export Pre-Payment US$ 250 million
808

As of September, 2005

524 388 239 82 309 79 47 83 12

2013 2014 on

35
2012

Cash 2005 2006 2007 2008 2009 2010 2011 Note: Principal, 2005- October to December maturities

TERM

CURRENCY

Short 26% US$ 473 mi Long 74% US$ 1,344 mi

Swap CDI 44%

Local 31%

Foreign 69%

US$ 56%
22

Shareholder Structure
As of September, 2005

Control Group: 53%

Voting Capital Excellence of the main shareholders

Board of Directors from solid Brazilian and foreign groups Long-term relationships with steel business and Usiminas
CVRD 23.0%

Usiminas

Nippon Usiminas 18.4% Caixa dos Empregados da Usiminas 13.4% Camargo Corra 7.3% Votorantim 7.3% Bradesco 2.6% Sudameris (ABN Amro) 1,9%

Previ 14.9%

Committed to add excellence and experience to business management

Others (Distributors) 2.3%

Others 8.8%

23

Potential value creation for shareholders

Creation of Value for Usiminas and the steel industry has been considerable over the last few years ... Annual shareholder return (2003 - Jul 2005)
107
Arcelor Posco China Steel International Avg.

... and Usiminas still has strong potential for additional value creation

Multiples
EV / Ebitda
2005e 3.6 2.5 3.9 3.3

% p.a.

120 100 80 60 40 20 0 57 50 72

P / E
2005e 5.0 5.2 5.8 5.4

78

46

Usiminas
CSN Gerdau Arcelor Brasil Brazil Avg.

2.2
3.2 3.2 3.8 3.1

3.7
7.2 5.5 7.5 6.0

Ibovespa = 28%
Belgo CST Gerdau CSN

Usiminas

Acesita
24

Source: Economtica, Banco Ita (Oct./05)

Positive stock market reaction

Steel Sector Bovespa 2004
Others 10% Sid Tubarao PN 9% Sid Nacional ON 29%
# of trades Shares (000) # of trades Shares (000) # of trades Shares (000) Vol. (R$ 000) Ibov. Portf. Position 232 567 3,924 1.25% 26th Vol. (R$ 000) Ibov. Portf. Position 265 628 4,067 1.49% 21st Vol. (R$ 000) Ibov. Portf. Position 457 800 12,745 2.67% 11th

Usiminas PNA 31%

Ibovespa Portfolio
# of trades Shares (000) Vol. (R$ 000) Ibov. Portf. Position 1,060 1,040 40,005 4.05% 5th

Gerdau PN 21%

2004
New Ibov. Portfolio

2003

2002

5.72% 4th
2005 (*)
(*) Theoretical Ibovespa portfolio Sept/Dec 2005

2001

... & ADR I e Latibex

25

Other Highlights

Consolidated Figures - USIMINAS

Sept 30/05 Crude Steel Production (thsd t) Sales (thsd t) Net sales (US$ million) EBITDA (US$ million) Net Profit (US$ million) Gross Debt (US$ million) Gross Debt / EBITDA EBITDA / Interest Expenses 6,517 5,367 4,035 1,840 1,167 1,817 0.7 16.9 Dec 31/04 8,951 8,062 4,197 1,930 1,032 2,033 1.1 11.3 Dec 31/03 8,621 7,710 2,845 1,002 426 2,626 2.5 4.3 Dec 31/02 8,447 7,722 2,250 794 (152) 2,699 3.9 3.7

26

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, of Brazils economic situation, on the industry and on international markets, and are therefore subject to change. www.usiminas.com.br
Investor Relations:

Bruno Seno Fusaro brunofusaro@usiminas.com.br Tel.: + 55-31-3499-8772 Fax: + 55-31-3499-9357

Luciana Valadares dos Santos lsantos@usiminas.com.br Tel.: + 55-31-3499-8619

Matheus Perdigo Rosa mprosa@usiminas.com.br Tel.: + 55-31-3499-8056

Gilson Rodrigues Bentes - COSIPA (So Paulo Office) gilson@cosipa.com.br Tel.: + 55 11 5070-8980

27