For immediate release

For more information, contact: José Marcos Treiger Nicole Salas CSN –Investor Relations General Manager Citigate Dewe Rogerson, NY +55 21 586 1442 1 (212) 688 6840 [email protected] [email protected] www.csn.com.br www.latamsource.com

CSN ANNOUNCES 1999 FULL YEAR END RESULTS

(Rio de Janeiro, Brazil, February 29, 2000) – Companhia Siderúrgica Nacional (CSN) (BOVESPA: CSNA3) (NYSE: SID) announced today its financial results for the year ended December 31, 1999. The Company’s unconsolidated results are presented according to Brazilian GAAP Corporate Law Method and stated in Brazilian reais (R$). On December 31, 1999, one U.S. dollar was equivalent to R$1.789.

Highlights · In 1999, CSN recorded net income of R$331.9 million (R$4.63 per ADR), down 29% from 1998. In the fourth quarter of 1999, net income was R$278.8 million (R$3.89 per ADR), compared to a loss of R$131.7 million (R$1.84 per ADR) in the third quarter of the same year. This change is partly explained by the appreciation of the real against the US dollar during the last quarter of 1999 (6.9%), allowing CSN to recover part of the economic impact of the devaluation of the real on the Company’s accumulated results through the third quarter. · The Company registered a record crude steel production of 4,846 thousand tonnes in 1999, 3% above the production in 1998 and a record level of gross revenues of R$3,355 million, 17% above the amount reported in 1998. · For the full year ended December 31, 1999, CSN reported record sales of 4,545 thousand tonnes of finished products and slabs. This volume surpasses the Company’s prior record sales of 4,538 thousand tonnes of finished products recorded in 1997. In the fourth quarter of 1999, sales volume totaled 1,128 thousand tonnes of finished products and slabs, 9.6% below the record level of 1,248 thousand tonnes of finished products and slabs sold in the previous quarter. · EBITDA (Gross Income – SG&A Expenses + Depreciation and Depletion) in the fourth quarter of EBITDA 1999 amounted to R$278.2 million. During 1999, R$ Million EBITDA totaled R$1,101.2 million, representing a 1,101.2 28.5% increase compared to R$856.7 million in 1200 856.7 1998. EBITDA margin (EBITDA / Net Revenues) 800 was 39.2% in 1999, compared to an EBITDA 304.6 margin of 35.3% in 1998. 278.2 400 · CSN’s management proposed R$242.8 million (R$3.38 per ADR) of dividends as Interest on 0 Equity for FY1999, or 55% of the base income for 3Q 99 3Q 99 98 99 dividends. In 1998, a total of R$245.6 million (R$3.42 per ADR) was distributed as Interest on Equity.

-1 - For immediate release

Production and Production Costs

In 1999, CSN produced 4,846 thousand tonnes of crude steel; this figure is up 3.0% from the total production of 4,705 thousand tonnes in 1998. During the fourth quarter of 1999, CSN produced 1,218 thousand tonnes of crude steel, or 3.6% below the total volume produced the previous quarter.

In 1999, average production cost excluding depreciation and depletion was R$282 per tonne of crude steel, 4.8% above the average unit cost in 1998. This variation Production Cost primarily reflects the costs increase in reais of imported and Without depreciation and depletion - R$ / tonne other dollar-linked raw materials coupled with an increase in 330 local tariffs on energy and fuel. In the fourth quarter of 1999, 312,4 average production cost excluding depreciation and depletion was R$312 per tonne of crude steel, 11% above the previous 290 281,3 281,7 268,7 quarter, reflecting the same factors as well as a reduced production of crude steel during the period as explained in the 250 previous paragraph. 3Q99 4Q99 98 99

Sales

In 1999, sales volume totaled 4,545 thousand tonnes of finished products and slabs, 11.8% above the volume of 4,064 thousand tonnes reported in 1998. The domestic market absorbed 65% of this volume compared to 73% in 1998. Coated steel products (galvanized and tin mill products) represented 39% of total sales, compared to 44% in 1998. Sales volume in 1999 and 1998 does not include the finished products that CSN contributed to SALES VOLUME BY MARKET the capital of its wholly owned subsidiary and steel distributor INAL. Thousand tonnes These amounted to 31 thousand tonnes in 1999 and to 35 thousand 4545 tonnes 1998, respectively. (please see sales volume table). 5000 4064 4000 27% 35% In the fourth quarter of 1998, CSN decided to temporarily include 3000 steel slabs in its export mix. Since then, the Company has sold a 2000 1248 1128 73% 65% total of 440,000 tonnes of slabs. During the fourth quarter, 86,000 1000 tonnes were sold, bringing the total to 410 thousand tonnes of slabs 0 65% 70% 3Q 99 4Q 99 98 99 sold in 1999. In light of an expected increased demand for flat steel products in the Brazilian market in 2000, CSN plans to deliver in the Brazilian Market Export Market first quarter of 2000 only the balance of those slab orders already contracted.

In the fourth quarter of 1999, total sales volume was 1,128 thousand tonnes of finished products and slabs, 9.6% below the 1,248 thousand tonnes of finished products and slabs sold in the third quarter of 1999.

Also, in this last quarter of 1999, the Brazilian market absorbed 70% of the total sales volume, compared to 65% the previous quarter. Coated steel products represented 39% of the total sales volume, compared to 41% reported in the third quarter.

-2 - For immediate release

Operating results q Net revenues, Cost of Goods Sold & gross margin Net revenues for the full year ended December 31, 1999 were R$2,807.0 million, or 15.8% above the R$2,424.8 million reported in 1998. This positive variation in net revenues primarily reflects the following factors: an 11.8% increase in total sales volume; a higher income level in reais derived from exports, reflecting in part the 48% devaluation of the real in 1999; and, price readjustments set forth by the Company in the Brazilian market, which offset the negative impact associated with the inclusion of slabs in the Company´s sales mix during the year. Due to the seasonal economic conditions typical of the fourth quarter and the 6.9% appreciation of the real in this period, net revenues were R$738.1 million for the quarter, 3.5% below the R$765.2 million reported in the third quarter of 1999.

In 1999, cost of goods sold increased 16.4%, or R$1,743.8 million, compared to R$1,497.7 million reported in 1998. This variation reflects a higher level of sales volume coupled with a cost increase in reais of imported and other dollar-linked raw materials and a local tariff increase on power and fuels. In addition, non- cash expenses increased as a result of higher depreciation and depletion levels, associated with the revaluation of assets introduced on March 31, 1999. In 1999, these Gross Margin expenses totaled R$340,2 million, 30% above the R$261,0 million registered in 1998. 42,0% 37,1% 38,2% 37,9% In the fourth quarter of 1999, costs of goods sold totaled 38,0% 36,1% R$464.0 million, or 5.0% less than the R$488.6 million reported in the third quarter of 1999. This decrease is primarily 34,0% explained by the reduction in sales volume from one quarter to the other. 30,0% 3Q99 4Q99 98 99 Notwithstanding the increase in cost of goods sold, the higher levels of net revenues led to gross income of R$1,063 million, 14,7% above the R$927 million of gross income in 1998. This resulted in a gross margin of 37.9%, compared to 38.2% in 1998. In the fourth quarter of 1999, gross margin was 37.1% compared to 36.1% in the previous quarter. q SG&A expenses In 1999, selling, general and administrative expenses excluding depreciation reached R$302.2 million, 8.8% less than the R$331.3 million registered at the end of 1998. This reduction is primarily due to a lower provision for doubtful accounts, which in the first quarter of 1998 was affected by a non-recurring adjustment reflecting, at that time, the adoption of a more conservative credit policy by the Company. In the fourth quarter of 1999, SG&A Expenses excluding depreciation were R$87.7 million compared to R$70.5 million reported in the third quarter of 1999. The increase was due to a recent, but smaller, adjustment in the . provision for doubtful accounts. q EBITDA

EBITDA (gross income – SG&A expenses + depreciation and depletion) for 1999 was R$1,101.2 million, which was 28.5% higher than the R$856.7 million in 1998. The EBITDA margin for 1999 was 39.2%, compared to 35.3% in 1998.

In the fourth quarter of 1999, EBITDA totaled R$278.2 million, with a 37.7% margin, compared to R$304.6 million and a margin of 39.8% reported in the third quarter.

-3 - For immediate release

q Other net operating income/expenses

In1999, other net operating expenses totaled R$18.6 million, down from R$28.0 million reported in 1998. A major part of this variation is explained by a non-recurring income of R$28.8 million registered in the second quarter of 1999 and related to a judicial ruling in favor of CSN for previous excessive “PIS/PASEP” tax payments.

In the fourth quarter of 1999, other net operating expenses were R$15.0 million, compared to other net operating income of R$1.8 million in the third quarter. This variation was primarily due to a provision of R$13.2 million compared to R$0.3 million in the third quarter and was related to the Company’s Employees’ Profit Sharing Program. The total amount provided in 1999 for the Profit Sharing Program reached R$24.3 million, or 7.4% above the R$22.6 million provided in 1998. q Net financial results

In 1999, CSN reported negative net financial results (financial income - financial expenses and net Monetary/Exchange variation) of R$213.4 million, compared to positive financial results of R$37.0 million in 1998. This result reflects the 48.0% devaluation of the Brazilian real in 1999, as a large portion of the Company’s indebtedness is denominated in foreign currency.

During the fourth quarter of 1999, CSN reported positive net financial results of R$27.7 million, compared to a negative R$252.0 million, in the previous quarter. This variation reflects the impact of a 6.9% appreciation of the Brazilian real in the last quarter of the year.

Deferred expenses: In the fourth quarter of 1999, the Company reported a total of R$47.9 million in amortization related to the deferral of the monetary variation losses that occurred in January 1999. As of December 31, 1999, the balance to be amortized during the following 36 months was R$405.3 million.

q Equity results at subsidiaries

Equity results at the Company’s subsidiaries was a negative R$212.3 million, compared to a negative R$106.4 million reported in 1998. This result is primarily explained by the local currency devaluation and is due to the fact that the Company has investments in foreign subsidiaries, which hold foreign currency denominated liabilities against real denominated assets. The resulting registered loss includes the positive impact of R$118 million from the repurchasing of Euronotes formerly issued by the Company’s integral subsidiary CSN Iron S.A. in the first quarter of 1999.

In the fourth quarter of 1999, equity results at the Company’s subsidiaries were a positive R$86.9 million, compared to a negative R$112.7 million reported in the third quarter. The main reason for this variation was the 6.9% appreciation of the Brazilian real during this period. q Non-operating income

In 1999, the Company reported non-operating income of R$62.8 million, compared to a non-operating loss of R$6.2 million in 1998. This variation is primarily attributable to the sale in the first quarter of 1999 of the

-4 - For immediate release

Company’s interest in a cement company – Companhia de Cimento Ribeirão Grande - which generated non- operating income of approximately R$42.0 million

In the fourth quarter of 1999, non-operating income was R$17.1 million compared to R$1.3 million registered in the third quarter. This variation stems from the decrease of CSN’s direct interest in its subsidiary CSN Steel, which generated a gain of R$23.7 million. q Income tax and social contribution

In 1999, CSN registered a provision for income tax and social contribution of R$25.9 million compared to R$8.8 million in 1998.

In the fourth quarter of 1999, the Company reported a provision for income tax and social contribution of R$19.7 million against a credit of R$29.1 million registered in the third quarter. q Net income and interest on equity In 1999, net income was R$331.9 million (R$4.63 per ADR), compared to R$464.4 million (R$6.47 per ADR) in 1998.

Net income for the fourth quarter of 1999 was R$278.8 million (R$3.89 per ADR), compared to a net loss of R$131.7 million (negative R$1.84 per ADR) registered in the third quarter.

CSN’s management proposed R$242.8 million (R$3.38 per ADR) of dividends as Interest on Equity for FY1999, or 55% of the base income for dividends. In 1998, a total of R$245.6 million (R$3.42 per ADR) was distributed as Interest on Equity.

Consolidated debt CSN’s gross consolidated debt as of December 31, 1999 totaled R$4,562.6 million, compared to R$3,377.6 million as of December 31, 1998. At the end of 1999, cash and marketable securities reached R$1,477.4 million, compared to R$1,186.5million as of December 31, 1998. During 1999, the Company continued to hold a substantial part of its cash invested in domestic U.S. dollar-linked instruments, maintaining its hedging strategy in place since the fourth quarter of 1998. As of December 31, 1999, net consolidated debt was R$3,085.2 million, compared to R$2,191.1 million reported on December 31, 1998. When measured in U.S. dollars, net consolidated debt fell from US$1,813 million on December 31, 1998 to US$1,724 million on December 31, 1999.

Capital Expenditures In 1999, total accumulated CAPEX in the Volta Redonda Steel Mill was R$685.9 million, compared to R$424.4 million invested during 1998. This increase is due to the investments made in the Thermoelectric Co-generation power plant, in the start-up of the Continuous Casting Machine No.#4 and the non-cash capitalization of financial expenditures in various projects and works in progress during 1999.

In the fourth quarter of 1999, CSN invested R$ 122.9 million in its Volta Redonda Steel facility, compared to R$226.5 million invested at the same facility during the third quarter. Of this total, an amount of R$31.7 million was directed to the final assembly of the Co-generation Thermoelectric power plant, plus R$44.4 million invested in technological improvements and R$46.8 million in maintenance and others.

-5 - For immediate release

Recent Events

· Thermoelectric Start-up: On December 22, 1999, CSN inaugurated – with the presence of the Brazilian President, Mr. Fernando Henrique Cardoso, its Thermoelectric Co-generation power plant (CTE), one of the largest undertakings in private thermoelectric power generation ever made in Brazil. The Company invested US$250 million in this project. CTE represents a generation capacity of 238 megawatts and is expected to provide CSN with approximately 60% of its energy needs for its steel mill in Volta Redonda, providing a cost reduction of more than US$30 million per year.

In addition to operational improvements, it will reduce production costs and benefit the surrounding environment, as it eliminates the flares that burn the steel processing gases in the atmosphere, which are used as fuel. CTE was constructed in accordance with stringent international environmental standards that exceed even the demands of Brazil’s environmental regulations. CSN is the third largest individual consumer of electricity in the country.

Besides the generation of 238 MW of energy, this facility has the ability to supply CSN’s strip mills with steam and to provide blown air for the Company’s blast furnaces.

· CISA’s Construction: CISA, whose initial cornerstone was laid in February 2000, will specialize in the production of value-added coated steel products for the civil construction and home appliances (white goods) industries. CISA, located in the municipality of Araucária in Paraná State (southern Brazil), will represent a total investment of US$222 million. The initial project schedule was revised. According to the project’s current configuration, CISA`s galvanizing line is expected to begin operations in 2001, followed by a cold rolling and pickling line at the end of 2002. The start-up of the service center is expected to occur in the second half of 2000.

· Start-up of the Containers Terminal at the Sepetiba Port (Tecon): This joint-venture project between CSN and Companhia Vale do Rio Doce (CVRD), the Containers Terminal, a federal concession acquired in 1998, began functioning in February 2000 with the first container-loading operation performed at this facility. In 1999, CSN invested US$7 million in this project. Total investment through 2003 is expected to be US$75 million. The loading of steel products through the general cargo berth started in the second half of 1999.

· “TAC” Environmental Agreement: Beginning in 2000, under the TAC (“Terms of Conduct Adjustments”) environmental agreement signed with FEEMA and the State of Rio de Janeiro’s government, CSN has committed itself to environmental investments surpassing R$180 million, in 2000-2002. These investments aim to reach standards comparable to those of the steel mills with the best environmental performances.

· U.S. Dumping:

1. Hot Rolled Products: Following the suspension agreement signed in July 1999 with the U.S. government, CSN reinstated its hot rolled exports to that market in February 2000, according to the limitations imposed by the agreement: total volume of Brazilian exports were 295,000 tonnes a year at a minimum price of US$327 per tonne (delivered duty-paid).

2. Cold Rolled Products: The U.S. Department of Commerce announced on January 19, 2000, the imposition of a 63% dumping tax and a 7% countervailing duty tax for the export of these products. CSN’s cold rolled exports to the U.S. market totaled 23,000 tonnes in 1999 and 85,000 tonnes in 1998.

· Operational Halt: CSN’s crude steel production in the first quarter of 2000 will be affected by a scheduled stoppage of Blast Furnace No. 3 and by an accident of minor proportions in the metallurgical area, which

-6 - For immediate release

occurred in January 2000. The Company expects that the impact on first quarter production volume will be recovered during the balance of 2000. The impact on sales volume, as compared to CSN´s budget figures for January and February, was not material.

· Construction of GalvaSud S.A.: Of the expected US$ 250 million to be invested in the GalvaSud project, US$180 million are earmarked for the galvanizing line, which is at an advanced stage of construction. The founding cornerstones of GalvaSud’s service center and laser welding unit, corresponding to the remaining investment portion of US$70 million, were laid on December 6, in Porto Real, Rio de Janeiro State. GalvaSud S.A. is a joint-venture between CSN (51%) and Thyssen Krupp Stahl (49%), specializing in galvanizing products for the auto industry. The start-up of the service center is expected for the end of 2000 and the full operation of the plant is planned for the beginning of 2001.

Companhia Siderúrgica Nacional, located in the state of Rio de Janeiro, Brazil, is a steel complex integrated by investments in infrastructure and logistics, that combines in its operation captive mines, an integrated steel mill, service centers, ports and railways . With a total annual production capacity of 5,000,000 tonnes of crude steel and gross revenues of R$3.4 billion reported in 1999, CSN is also the only tin-plate producer in Brazil and one of the five largest tin-plate producers worldwide

Certain of the statements contained herein, including but not limited to those with respect to the future economic performance of the Company, the expected growth in demand for flat steel products in the domestic market, the expected sale of slabs by the Company, the expected amount invested and scheduled start-up of CISA, the amount invested in environment, the expected investment at the Sepetiba Port, the impact of the operational halts in the first quarter and the expected start-up and investment in GalvaSud are forward-looking statements. Such statements are based on management’s current views and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in such statements. Examples of such risks and uncertainties include but are not limited to: general and macroeconomic conditions in Brazil, interest rate and exchange rate levels, future renegotiation or pre-payment of liabilities or credits denominated in foreign currencies, changes in laws and regulations and general competitive factors (on a global, regional or national basis), delays in the impact of price increases on the Company's revenues, unanticipated changes in the prices for the Company's products and delays in the investment programs in GalvaSud, CISA and in the environment.

Three pages of tables follow

-7 - For immediate release

INCOME STATEMENT Brazilian GAAP – Unconsolidated Results In thousands of reais 4th Qtr. 1999 3rd Qtr. 1999 4th Qtr. 1998 1999 1998 Gross revenues from sales & services 902,535 914,641 625,864 3,354,991 2,875,399 Deductions from gross revenues (164,442) (149,438) (99,911) (548,045) (450,638) Net revenues from sales & services 738,093 765,203 525,953 2,806,946 2,424,761 Cost of sales (464,003) (488,616) (332,921) (1,743,776) (1,497,662) Cost of sales, net depreciation/depletion (372,254) (390,051) (273,423) (1,403,594) (1,236,649) Depreciation/depletion related to cost of sales (91,749) (98,565) (59,498) (340,182) (261,013) Gross income 274,090 276,587 193,032 1,063,170 927,099 Selling expenses (46,052) (34,928) (32,488) (152,490) (178,149) General and administrative expenses (41,653) (35,604) (38,000) (149,676) (153,258) Depreciation related to SG&A (4,617) (5,210) (5,746) (21,728) (18,929) Other operating income (expenses), net (14,958) 1,777 (285) (18,551) (27,997) Financial expenses (83,985) (106,467) (30,069) (332,907) (205,081) Financial income (29,634) 196,129 97,976 565,059 383,597 Equity in results of subsidiaries 86,901 (112,706) (36,399) (212,297) (106,419) Monetary variations, net 141,327 (341,662) (34,713) (445,638) (141,468) Operating income (loss) 281,419 (162,084) 113,310 294,942 479,395 Non-operating income (expenses), net 17,094 1,308 4,185 62,847 (6,223) Income (loss) before IT and social contribution 298,513 (160,776) 117,495 357,789 473,172 Income tax credit (provision) (28,194) 24,950 (5,637) (35,077) (7,295) Social contribution tax credit (provision) 8,549 4,171 (9) 9,212 (1,445) Net income (loss) 278,868 (131,655) 111,845 331,924 464,432 Number of shares (in thousands), excluding 71,729,261 71,729,261 71,731,461 71,729,261 71,731,461 treasury stocks Net income (loss) per 1000 shares – R$ 3,89 (1,84) 1,56 4,63 6,47 Additional information Interest on equity (Distributed + Proposed) 122,800 - 99,600 242,800 245,614 EBITDA (*) 278,134 304,620 182,042 1,101,186 856,705 (*) EBITDA = gross income – SG&A expenses + depreciation and depletion.

-8 - For immediate release

Balance Sheet Brazilian GAAP – Unconsolidated Results In thousands of reais

December 31,1999 September 31, 1999

Current assets 2,596,274 2,630,473 Cash & marketable securities 1,347,659 1,355,937 Trade accounts receivable 533,417 475,551 Inventories 494,611 509,275 Others 220,587 289,710 Long-term receivables 1,055,733 1,039,517 Permanent assets 8,434,780 8,562,631 Investments 879,517 786,645 Fixed assets 7,072,775 7,262,709 Deferred charges 482,488 513,277 Total assets 12,086,787 12,232,621 Current Liabilities 1,776,787 1,485,334 Loans and financing 1,158,584 994,235 Others 618,203 491,099 Long-term liabilities 4,278,353 4,731,546 Loans & financing 2,468,776 2,798,277 Taxes on revaluation reserve 1,263,570 1,363,631 Others 546,007 569,638 Shareholders’ equity 6,031,647 6,015,741 Capital 1,680,947 1,680,947 Capital reserve 1,258 1,258 Revaluation reserves 2,526,984 2,702,953 Revenue reserves 1,822,458 1,607,208 Retained earnings - 23,375 Total Liabilities and Shareholders’ equity 12,086,787 12,232,621

-9 - For immediate release

Sales Volume In thousands of tonnes

BRAZILIAN MARKET (1) 4th Qtr. 1999 3rd Qtr. 1999 4th Qtr. 1998 1999 1998 Hot Rolled 284 270 180 1,009 1,036 Cold Rolled 144 158 99 551 585 Galvanized 192 193 190 734 684 Tin Mill Products 167 188 151 662 660 TOTAL 787 809 620 2,956 2,965

EXPORT MARKET 4th Qtr. 1999 3rd Qtr. 1999 4th Qtr. 1998 1999 1998 Hot Rolled 153 163 137 697 498 Cold Rolled 22 31 36 85 147 Galvanized 6 29 2 51 89 Tin Mill Products 74 99 72 346 335 Slab 86 118 30 410 30 TOTAL 341 440 277 1,589 1,099

TOTAL MARKET 4th Qtr. 1999 3rd Qtr. 1999 4th Qtr. 1998 1999 1998 Hot Rolled 437 433 317 1,706 1,534 Cold Rolled 166 189 135 636 732 Galvanized 198 222 192 785 773 Tin Mill Products 241 287 223 1,008 995 Slab 86 118 30 410 30 TOTAL 1,128 1,249 897 4,545 4,064 (1) Sales volume in 1999 and 1998 does not include the finished products that CSN contributed to the capital of its wholly owned subsidiary and steel distributor INAL. These amounted to 31 thousand tonnes in 1999 (15,5 thousand tonnes in the third quarter and 16,1 thousand tonnes in the fourth quarter) and to 35 thousand tonnes 1998 (14 thousand tonnes in the third quarter and 21 thousand tonnes in the fourth quarter).

INVESTMENTS IN CSN’S STEEL MILL In millions of reais

4th Qtr. 1999 3rd Qtr. 1999 4th Qtr. 1998 1999 1998 Technological improvements 44.4 48.5 82.3 240.0 184.6 Co-generation power plant 31.7 70.0 24.3 206.7 65.7 Others* 46.8 108.0 91.1 239.2 174.1 TOTAL 122.9 226.5 197.7 685.9 424.4 *general construction work, materials, maintenance, logistics, etc.

-10 -