6-K

FORM 6-K

U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16 UNDER THE

SECURITIES EXCHANGE ACT OF 1934

dated February 15, 2006

Commission File Number 1-14878

GERDAU S.A.

(Exact Name as Specified in its Charter)

        N/A       

(Translation of Registrant’s Name)

Av. Farrapos 1811

Porto Alegre, Rio Grande do Sul - Brazil CEP 90220-005

(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.

Form 20-F   X   Form 40-F

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ____

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ____

Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes No   X  

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): Not applicable.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused the Report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date:  February 15, 2006

GERDAU S.A.

By:/s/Osvaldo Burgos Schirmer       

Name:  Osvaldo Burgos Schirmer

Title:   Chief Financial Officer

EXHIBIT INDEX

Exhibit	Description of Exhibit
99.1	Release, 2005 Fiscal Year Results
99.2	Notice to Shareholders, Payment of Dividends, February 8, 2006

EX-99.1

Exhibit 99.1

Porto Alegre, February 8, 2006			GERDAU S.A. – CONSOLIDATED
			2005 Fiscal Year Results Brazilian Corporate Law

Conference Calls February 8, 2006 Portuguese: 11:00 a.m. (EST) English: 1:00 p.m. (EST) Todial-in: - Portuguese (password: GERDAU) In Brazil: 0800 702.5666 or 11 2101.1490 Other countries: +55 11 2101.1490 - English (password: 6939410) In the US: 1 800 514.5257 or +1 973 935.2800 In Brazil: 0800 891.3951 or +1 973 935.2800 In the UK: 0800 032.3836 or +1 973 935.2800 Other countries: +1 973 935.2800 -Internet:www.gerdau.com.br/ri/ing MarketCap.onDecember31,2005 GerdauS.A. Bovespa: US$ 7.5 billion  MetalúrgicaGerdauS.A. Bovespa: US$ 2.6 billion GerdauAmeristeelCorp. Toronto: US$ 1.7 billion Sharesoutstandingon
December31,2005 GerdauS.A. Bovespa: GGBR3 and GGBR4,  NYSE: GGB and Latibex: XGGB Common:  154,404,672 Preferred: 287,611,666 442,016,338 MetalúrgicaGerdauS.A. Bovespa: GOAU3 and GOAU4 Common:   41,584,395 Preferred:  81,721,590 123,305,985 GerdauAmeristeelCorp. Toronto: GNA.TO and NYSE: GNA Common: 304,471,493 Crude steel output hits new record and reaches 13.7 million metric tons in 2005, 1.7% greater than that of 2004. 2005 Highlights Gross revenue • Consolidated gross revenues in 2005 reached R$ 25.5 billion, 8.9% greater than that of 2004. • The consolidation of the North Star Steel (USA), Diaco (Colombia) and Sipar (Argentina) mills, the two latter in the 4th quarter, were important contributors to this improvement in results. • The improved demand in North America and in the South American countries where Gerdau operates along with the increase in exports contributed for the performance of fiscal year 2005. • The operations in Brazil generated revenues of R$ 13.2 billion, 51.8% of the consolidated figures. The North American units produced revenues of R$ 10.8 billion, 42.5% of the total, and companies in Uruguay, Chile, Argentina and Colombia totaled R$ 1.5 billion, 5.7% of consolidated figures. • The operations in Brazil generated revenues of R$ 13.2 billion, 51.8% of the consolidated figures. The North American units produced revenues of R$ 10.8 billion, 42.5% of the total, and companies in Uruguay, Chile, Argentina and Colombia totaled R$ 1.5 billion, 5.7% of consolidated figures. • The addition of revenues generated at units abroad and exports from Brazil represented 60.9% of total consolidated revenues in 2005. •   Net profit • The consolidated net profit reached R$ 3.2 billion in 2005, similar to that of 2004. • The Brazilian operations presented a net profit of R$ 2.4 billion, 10.6% greater than in 2004. In North America net profit reached R$ 685.1 million compared to R$ 896.3 million. Net profit in South America, except Brazil, was R$ 166.3 million compared to R$ 174.2 million. • Consolidated net margin in 2005 was 15.3%. •   Exports • Exports from Brazil totaled 2.8 million metric tons in 2005, 2.6% greater than in 2004. • Export revenues reached US$ 1.2 billion in 2005, compared to US$ 1.1 billion last year. •   EBITDA • EBITDA (gross profit minus SG&A plus depreciation and amortization), reached R$ 4.9 billion in the period. • EBITDA margin (EBITDA divided by net revenues) was 23.1% in the period. •   Output • The output of blooms, billets and slabs reached 13.7 million metric tons in 2005, 1.7% greater than that of 2004. • The output of rolled products totaled 10.8 million metric tons, 5.2% above the volume produced in 2004.

Main data	Year 2005	Year 2004	Variation
Output (1,000 t) Slabs, blooms and billets (SBB) Rolled products	13,680 10,806	13,448 10,275	1.7% 5.2%
Shipments (1,000 t)	13,551	12,561	7.9%
Gross Revenues (R$ million)	25,486	23,408	8.9%
Net Revenues (R$ million)	21,246	19,597	8.4%
EBITDA (R$ million)	4,910	5,553	(11.6%)
EBTDA (R$ million)	4,880	5,377	(9.2%)
Net Profit (R$ million)	3,245	3,235	0.3%
Shareholders’ Equity (R$ million)	10,141	7,613	33.2%
Total Assets (R$ million)	21,879	18,664	17.2%
Gross Margin	27.0%	31.9%
EBITDA Margin	23.1%	28.3%
Net Margin	15.3%	16.5%
Net profit/Shareholders’ Equity1	32.0%	42.5%
Net Debt / Total capitalization2	17.7%	36.3%
Net debt / EBITDA	0.4x	0.8x
1) Last year’s net profit over shareholders’ equity at the end of 2005. 2) Total capitalization = Shareholders’ equity + Net debt

 

2

Gross revenues increase 8.9% and surpasses R$ 25 billion in 2005. Exports and companies abroad, together, contributed with 60.9% of this total. The balance sheet of 2005 reflects the consolidation of the North Star Steel (USA) units, Diaco (Colombia) and Sipar (Argentina), the latter two as of the 4^th quarter. Exports totaled 2.8 million metric tons in 2005, 2.6% greater when compared to 2004, and generated revenues of US$ 1.2 billion in the period. EBITDA (operational cash generation) reached R$ 4.9 billion in fiscal year 2005 and its margin at 23.1%. Net profit reached R$ 3.2 billion for the full year and stayed at the same levels as in 2004. Net margin reached 15.3%. Shareholders will be paid 4^th quarter dividends on March 2^nd. Metalúrgica Gerdau S.A. will pay R$ 0.69 per share and Gerdau S.A. R$ 0.42 per share. Stock dividend of 50% granted in March 2005 resulted in the increase of stock liquidity and increase access to stock purchasing by reducing the minimum purchase number of shares. Preferred shares of Metalúrgica Gerdau are part of the Bovespa Index as of May 2^nd. Both companies are now part of the Ibovespa. Gerdau issued its first ever Guaranteed Perpetual Senior Securities (Perpetual Bond) in September 2005 for a total of US$ 600 million and interests of 8.875% per annum. Gerdau concluded the acquisition of the 40% stake in Corporación Sidenor, Spain, in January 2006. The investment totaled € 185.3 million. Investor Relations Phone: +55 51 3323.2703 E-mail: inform@gerdau.com.br Additional Information This document and the complementary data regarding the fourth quarter and the full year 2005 are available at our site www.gerdau.com.br/ri/ing. •   Dividends • 4^th quarter • Payment on March 2^nd, 2006. • Based on stock owned on February 17^th, 2006. • Metalúrgica Gerdau S.A. shareholders will be paid R$ 85.1 million (R$ 0.69 per share – based on 123,730,185 shares outstanding). • Gerdau S.A. shareholders will be paid R$ 186.1 million (R$ 0.42 per share – based on 443,184,338 shares outstanding). • Accumulated Dividends for 2005 • Metalúrgica Gerdau S.A.: dividend total of R$ 364.1 million and a dividend yield of (dividends per share/stock price on February 6) of 5.2%. •  Gerdau S.A.: dividend total of R$ 796.4 million and a dividend yield to shareholders of 3.9%. •   Stock dividend • Authorized on March 31^st, 2005. • 50% for Metalúrgica Gerdau S.A. and 50% for Gerdau S.A. • Based on shareholdings on April 11^th, 2005. • Resulting from the capitalization of capital and working capital reserves. • Metalúrgica Gerdau S.A. increased its outstanding shares from 83.2 million to 124.8 million. • Gerdau S.A. increased its outstanding shares from 296.7 million to 445.1 million. •   Stock buyback program • Period: May 31^st to July 29^th. • Purpose: to hold in treasury and future cancellation. • Profit reserves were used. • Metalúrgica Gerdau S.A. bought back 424.2 thousand preferred shares. • Gerdau S.A. bought back 740.2 thousand preferred shares. •   Metalúrgica Gerdau S.A. in the IBOVESPA • On May 2^nd the preferred shares of Metalúrgica Gerdau S.A. were included in the theoretical portfolio that forms the Bovespa Index. • With this inclusion both Gerdau companies are now part of the index. •   Anefac-Fipecafi-Serasa Award • For the 6^th consecutive year Gerdau has been voted as top 10 companies that presented the best accounting reports in 2004. • The competition is between the best and greatest 500 corporations in Brazil in the fields of commerce, industry and services – financial services excepted -, along with the top 50 largest state-run companies. • The evaluation criteria were as follows: quality and degree of information, transparency, use of accounting principles, layout, readability, concision, clarity and the disclosure of data not legally required such as Cash Flow, Added Value, EBITDA and Social Report. •   Financial Operations • Guaranteed Perpetual Senior Securities (Perpetual Bond) • Banks: HSBC and Citigroup. • Amount: US$ 600 million (demand greater than US$ 3 billion). • Interest paid 8,875% per annum, to be paid quarterly starting December 22, 2005. • Callable at Gerdau’s discretion, starting September 22, 2010 or as of this date and at every interest payment. • Risk Classification: Ba1 (stable) by Moody’s Investor Service, Inc. BB- (stable) by Standard & Poor’s BB- (stable) by Fitch Ratings. • Euro Commercial Paper (third issue) • Bank: Santander. • Amount: US$ 200 million. • Interest of 5.0% per annum. • Maturity on October 11, 2006. • Equipment acquisition financing. • Banks: BNP Paribas and The Industrial and Commercial Bank of China, with the endorsement of Sinosure. • Amount: US$ 236.5 million. • Technology and equipment suppliers: MinMetals Development Co. and China Metallurgical Construction. •   Rating • On November 3^rd, Standard & Poor’s announced the re-classification of foreign currency risk for some Latin American, Asian and Pacific region companies. Gerdau, in particular, with a rating of BB- (stable) was upgraded to BB+ (stable), which means an improvement of 2 notches in this rating agency’s scale and only one notch short of investment grade. •   Acquisitions • Sipar (Argentina) • September 2005. • Acquisition of 35.98% of shares issued by Sipar Aceros S.A., an Argentinean rolling mill. • Gerdau’s stake is now 74.44% of the capital stock of Sipar Aceros S.A. • For this additional stake the investment required is of US$ 40.5 million throughout the next three years. • Diaco (Colombia) • End of the 3^rd quarter of 2005. • Concluded the operation to acquire 57.1% of Diaco S.A.’s capital stock, the largest rebar producer in Colombia. • Investment of US$ 75.2 million. • Sidenor (Spain) • January 11, 2006. • Acquisition of 40% of the capital stock of Corporación Sidenor S.A., the largest long specialty steel producer, forged parts and foundry in Spain and one of the major producers of forged parts by stamping in that country. • Investment of € 185.3 million. •   Operational and Corporate Reorganization • Objectives • To develop alternatives to future growth and to obtain greater strategic advantages in South America. •  Search for greater operational and managerial efficiencies by means of the specialization of specific units and business units. •  Concentrate organization efforts and main competencies via focused action and acquiring critical mass in each operation along with operational synergies. Implemented on July 29^th, 2005, shareholders of Gerdau Açominas S.A. approved the spinning off of its assets and the incorporation of these same assets in the new companies Gerdau Aços Longos S.A., Gerdau Aços Especiais S.A. and Gerdau Comercial de Aços S.A. Gerdau America do Sul Participações S.A. was also incorporated to control the remaining South American operations, Brazil excluded.

 

3

Fouth Quarter 2005 Performance

Gerdau S.A. - Consolidated

Output and Sales

• The output of blooms, billets and slabs reached 3.4 million metric tons in the 4^th quarter, 4.8% greater than that of the 3^rd quarter. For the full year output reached 13.7 million metric tons, an increase of 1.7% compared to 2004.

Output (1,000 metric tons)	4Q05	3Q05	Variation	Year 2005	Year 2004	Variation
Crude Steel (slabs, blooms and billets)
Brazil	1,695.5	1,651.8	2.6%	6,888.8	7,284.5	(5.4%)
North America	1,531.9	1,500.9	2.1%	6,257.1	5,735.5	9.1%
South America	194.5	111.1	75.1%	534.0	428.2	24.7%
Total	3,421.9	3,263.8	4.8%	13,679.9	13,448.2	1.7%
Rolled Products
Brazil	1,040.2	1,003.2	3.7%	4,012.5	4,338.9	(7.5%)
North America	1,532.6	1,484.7	3.2%	6,153.2	5,451.4	12.9%
South America	267.1	123.7	116.0%	640.0	484.3	32.2%
Total	2,839.9	2,611.6	8.7%	10,805.7	10,274.6	5.2%

• The output of rolled products reached 2.8 million metric tons in the 4^th quarter and 10.8 million metric tons in 2005, presenting increases of 8.7% and 5.2%, respectively.

Output of Slabs, blooms and billets (1,000 metric tons)	Output of Rolled Products (1,000 metric tons)

• Consolidated shipments totaled 3.4 million metric tons in the 4^th quarter, a volume similar to that of the 3^rd quarter. For the full year of 2005, sales reached 13.6 million metric tons, 7.9% greater than those of the full year of 2004.

• This performance is explained in great extent due to the consolidation of the steel mills incorporated to Gerdau in North America (North Star Steel) and South America (Diaco and Sipar).

4

Shipments (1,000 metric tons)	4Q05	3Q05	Variation	Year 2005	Year 2004	Variation
Brazil
Domestic market	853.7	912.3	(6.4%)	3,508.7	3,881.4	(9.6%)
Exports	680.0	622.0	9.3%	2,819.3	2,748.2	2.6%
Total	1,533.7	1,534.3	-	6,328.0	6,629.6	(4.5%)
Abroad
North America	1,505.5	1,700.8	(11.5%)	6,420.7	5,410.9	18.7%
South America	330.6	155.4	112.8%	801.8	520.4	54.1%
Total	1,836.1	1,856.2	(1.1%)	7,222.5	5,931.3	21.8%
Consolidated Total	3,369.8	3,390.5	(0.6%)	13,550.5	12,560.9	7.9%

• In Brazil, as a result of a lower economic activity throughout the year, sales to Brazilian clients dropped 9.6% in the period. • Part of this reduction was compensated with exports which increased 2.6% for the full year, reaching 2.8 million metric tons. These shipments generated revenues of US$ 1.2 billion in the period. • The increase in exports in the 4th quarter fully compensated the reduction in domestic sales. Revenues generated by exports reached US$ 275.7 million in the period.

Shipments (1,000 metric tons)

Results

• Net revenue for the quarter of consolidated shipments totaled R$ 4.9 billion, 4.0% less than that of the 3^rd quarter. This reduction reflects the smaller volume shipped to the domestic markets and the impact of FX on sales abroad considering that the average US dollar rate for the last quarter was lower than that of the previous quarter.

• Net revenues for the full year reached R$ 21.3 billion, 8.4% higher than that of 2004. The Brazilian based operations contributed with 47.1% of this total, that is R$ 10.0 billion. The units in North America contributed with R$ 10.1 billion (47.3% of the total) and the companies in Uruguay, Chile, Argentina and Colombia with R$ 1.2 billion, 5.6% of the consolidated net revenues.

• The consolidation of North Star Steel (USA), Diaco (Colombia) and Sipar (Argentina) mills, the latter two in the 4^th quarter of 2005, contributed in an important manner to this growth.

• The improved demand in North America and in the South American countries where Gerdau is present and exports were important factors for the performance of fiscal year 2005.

• Net revenues from units abroad added to exports from Brazil represented 66.5% of the consolidated net revenues of 2005.

Net Sales Revenue (R$ millions)	4Q05	3Q05	Variation	Year 2005	Year 2004	Variation
Brazil	2,247.2	2,416.3	(7.0%)	9,997.6	9,975.8	0.2%
North America	2,238.0	2,424.1	(7.7%)	10,054.0	8,857.6	13.5%
South America	401.1	251.8	59.3%	1,194.1	763.9	56.3%
Total	4,886.3	5,092.2	(4.0%)	21,245.7	19,597.3	8.4%

 

5

• With a slight increase in costs in the 4^th quarter, gross profit presented a slight reduction of 5.6% compared to that of the 3^rd quarter. Gross margin, consequently, went from 26.8% to 26.4%. Gross margin for the full year was 27.0%.

• SG&A expenses totaled R$ 457.5 million in the 4^th quarter of 2005, 5.6% greater than those of the 3^rd quarter as a consequence of the increase in expenses with port services as a result of a greater volume exported and the increase in the long term incentives for Gerdau Ameristeel employees. As a result the stake of these expenses in net revenues increased from 8.5%, in the 3^rd quarter, to 9.4%, in the 4^th quarter of 2005.

Net Sales Revenue per ton (R$ per metric ton)*	Gross Margin (%)

* Prices on the chart are influenced by the eventual change in product mix and FX variations.

EBITDA (R$ millions)	4Q05	3Q05	Variation	Year 2005	Year 2004	Variation
Brazil	602.7	733.3	(17.8%)	3,137.0	3,704.5	(15.3%)
North America	334.4	350.0	(4.5%)	1,480.4	1,597.2	(7.3%)
South America	99.4	61.9	60.6%	292.4	251.0	16.5%
Total	1,036.5	1,145.2	(9.5%)	4,909.8	5,552.7	(11.6%)

• EBITDA (operational cash generation) reached R$ 1.0 billion in the 4^th quarter, resulting in a margin of 21.2% for the period. EBITDA for the full year reached 4.9 billion and the margin reached 23.1%.

EBITDA (R$ millions)	EBITDA Margin (%)

NOTE: EBITDA, in reais, of companies abroad is influenced by FX variations in the period.

6

• Net financial expenses (financial expenses minus financial income) totaled R$ 219.6 million in the last quarter of the year. Excluding expenses with FX variations resulting from the depreciation of the real vis-à-vis the US dollar in the 4^th quarter (September 30 to December 31) on debt in foreign currency (R$ 196.6 million) and monetary variations (R$ 12.4 million), net financial expenses totaled R$ 10.6 million in the period. For the full year of 2005, net financial expenses totaled R$ 29.9 million, including R$ 19.8 million monetary variations and R$ 166.5 million in revenues from FX variations.

EBTDA (R$ millions)	4Q05	3Q05	Variation	Year 2005	Year 2004	Variation
Gross profit	1,289.2	1,366.2	(5.6%)	5,725.9	6,245.0	(8.3%)
Cost of sales	(142.7)	(128.0)	11.5%	(514.4)	(455.2)	13.0%
G&A	(314.7)	(305.3)	3.1%	(1,140.3)	(1,003.8)	13.6%
Depreciation and amortization	204.7	212.3	(3.6%)	838.6	766.7	9.4%
EBITDA	1,036.5	1,145.2	(9.5%)	4,909.8	5,552.7	(11.6%)
Net financial expenses (excluding monetary and FX variations)	(10.6)	25.8	-	(176.6)	(280.8)	(37.1%)
Monetary and FX variations	(209.0)	164.5	-	146.7	104.7	40.1%
EBTDA	816.9	1,335.5	(38.8%)	4,879.9	5,376.6	(9.2%)

• R$ 69.6 million were accrued in Other Operating Revenues in the 4th quarter as a result of gains resulting from the reversal of contingency provisions made after Gerdau S.A. won a legal suite on the illegal collection of PIS (tax), based on Decrees Laws 2.445/88 and 2.449/88.

• The impact of the devaluation of the real vis-à-vis the US dollar (September 30 to December 31) over Gerdau investments abroad resulted in a positive equity pick up of R$ 195.9 million. This total also includes fiscal incentive reserves and goodwill amortized in the period.

• Net profit for the quarter reached R$ 730.5 million, presenting a net margin of 14.9% compared to 15.9% in the previous quarter. For the full year net profit reached R$ 3.2 billion, an increase of 0.3% over that of 2004, and a net margin of 15.3%.

Net profit (R$ millions)	4Q05	3Q05	Variation	Year 2005	Year 2004	Variation
Brazil	461.6	666.2	(30.7%)	2,393.8	2,164.4	10.6%
North America	207.1	118.6	74.6%	685.1	896.3	(23.6%)
South America	61.8	26.8	130.6%	166.3	174.2	(4.5%)
Total	730.5	811.6	(10.0%)	3,245.2	3,234.9	0.3%

Investments

• The continuation of its investment program as determined by the company, led to disbursements that totaled, in the 4^th quarter, US$ 188.8 million in fixed assets. Additionally, US$ 10.6 million were destined to the conclusion of the acquisition of Sidelpa, in Colombia, a subsidiary of Diaco. This acquisition was concluded at the end of the 3^rd quarter.

Investments (US$ millions)	4Q05	3Q05	Year 2005
Brazil	158.4	131.1	568.8
Abroad	41.0	163.5	289.2
North America	21.5	42.4	135.9
South America	19.5	121.1	153.43
Total	199.4	294.6	858.0

 

7

Indebtedness

• Net debt (loans and financing plus debentures minus cash and cash equivalents), as of December 31^st, 2005, totaled R$ 2.2 billion, 14.4% less than that of September 30^th, 2005.

• As for Gross Debt (loans and financing plus debentures), 17.4% were short term (R$ 1.3 billion) and 82.6% were long term (R$ 6.3 billion).

• With the goal of extending the average life span of its indebtedness, financial transactions conducted throughout 2005 contributed substantially in achieving this objective. The average debt duration more than doubled in the period stretching from 4 to 9 years.

• On December 31^st, gross debt was composed of 22.5% in domestic currency, 47.0% in foreign currency in Brazil and 30.5% in different currencies at companies abroad.

• On October 12 the 3^rd issue of a Euro Commercial Paper for US$ 200 million was completed. Its maturity is October 11^th, 2006 and bears interests of 5.0% per annum.

• On December 31st, cash and cash equivalents totaled R$ 5.5 billion, of which R$ 2.2 billion (41.0%) were pegged to foreign currencies, mainly to the US dollar.

Indebtedness (R$ millions)	12.31.2005	09.30.2005	12.31.2004
Short term
Domestic Currency - Brazil	228.4	237.3	201.8
Foreign Currency - Brazil	349.6	335.5	704.8
Companies Abroad	751.9	693.5	1,064.8
Total	1,329.9	1,266.3	1,971.4
Long Term
Domestic Currency - Brazil	1,497.2	1,536.2	1,211.3
Foreign Currency - Brazil	3,245.3	2,950.4	1,653.1
Companies Abroad	1,579.0	1,492.5	1,541.0
Total	6,321.5	5,979.1	4,405.4
Gross Debt	7,651.4	7,245.4	6,376.8
Cash & Cash Equivalents	5,464.7	4,691.7	2,042.0
Net Debt	2,186.7	2,553.7	4,334.8

• The main debt indicators for the Gerdau companies were, at the end of the period, as follows:

Ratios	12.31.2005	09.30.2005	12.31.2004
Net debt / Total capitalization2	17.7%	20.9%	36.3%
EBITDA1 / Net financial expenses1 (excluding FX and monetary variations)	21.0x	23.3x	19.8x
Gross Debt / EBITDA1	1.6x	1.4x	1.1x
Net Debt / EBITDA1	0.4x	0.5x	0.8x

1 - Last twelve months

2 - Total capitalization = Shareholders’ equity + Net debt

APIMEC Meeting

• On November 23^rd, Gerdau held a meeting with analysts and investment professionals in São Paulo with the purpose of presenting the nine months results for 2005 and presenting the outlook for the ensuing months.

• The event had an attendance of more than 250 persons. For those that could not be at the meeting in person, the company made the live broadcast available through the internet.

8

Non-Consolidated Data

Metalúrgica Gerdau S.A.

• Dividends

• 4^th Quarter – Payment on March 2^nd, 2006.

	Based on shareholdings on February 17th, 2006.
Shareholders will be paid R$ 85.1 million (R$ 0.69 per share).

• Accumulated Dividends – Dividends of R$ 364.1 million and a dividend yield (dividends per

share/stock quote on February 6) of 5.2%.

Period	Dividends (R$ millions)	Per share (R$)	Number of shares (million)	Payment Date
1st quarter	89.1	0.72	123.7	05/24/05
2nd quarter	97.4	0.79	123.3	08/24/05
3rd quarter	92.5	0.75	123.3	11/30/05
4th quarter	85.1	0.69	123.3	03/02/06
Total	364.1	2.95	123.3	-

• Metalúrgica Gerdau S.A. (GOAU) trades at BOVESPA in 2005: • Financial Volume: R$ 2.7 billion (+32.6% over 2004). • Average daily financial volume: R$ 10.2 million (R$ 7.5 million in 2004). • Number of trades: 123,361 (+95.2% compared to the previous year). • Shares traded: 65.8 million (+80.4% over 2004).	BOVESPA (Base 100)

• Results

• Metalúrgica Gerdau S.A. had a net profit of R$ 297.8 million in the 4^th quarter, 8.0% less than in the 3^rd quarter (R$ 2.42 per share).

• Net Profit for the full year was R$ 1.3 billion, 11.2% less than in 2004 (R$ 10.34 per share).

• On December 31^st, 2005, the Company’s Shareholders’ Equity was R$ 3.9 billion, representing a net worth of R$ 31.30 per share.

Gerdau S.A.

• Dividends

• 4^th quarter - Payment on March 2^nd, 2006.

Based on shareholdings on February 17^th, 2006.

Shareholders will be paid R$ 186.1 million (R$ 0.42 per share).

• Accumulated Dividends – Dividends of R$ 796.4 million and a dividend yield (dividends per

share/stock quote on February 6) of 3.9%.

 

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Period	Dividends (R$ millions)	Per share (R$)	Number of shares (million)	Payment Data
1st quarter	199.2	0.45	442.7	05/24/05
2nd quarter	212.2	0.48	442.0	08/24/05
3rd quarter	198.9	0.45	442.0	11/30/05
4th quarter	186.1	0.42	443.2	03/02/06
Total	796.4	1.80	443.2	-

• Gerdau S.A. trades at BOVESPA in 2005

• At BOVESPA - GGBR

Financial Volume: R$ 9.1 billion (+25.1% over 2004).

Average daily financial volume: R$ 34.8 million (R$ 26.4 million in 2004).

Number of trades: 345,572 (+54.3% compared to the previous year).

Number of shares traded: 292.6 million shares (+83.5% over 2004).

• At the NYSE – GGB (ADR Level 2)

Financial Volume: US$ 2.9 billion (+127.1% over 2004).

Average daily financial volume: US$ 11.6 million (US$ 5.1 million in 2004).

Shares traded: 219.7 million shares (+174.6% over 2004).

• At Latibex (Bolsa de Valores de Madrid) – XGGB

Financial Volume: € 19,5 million (+214.5% over 2004).

Average daily financial volume: € 75.8 thousand (€ 24.0 thousand in 2004).

Shares traded: 1.9 million shares (+290.2% over 2004).

BOVESPA (Base 100)	NYSE (Base 100)

• Results

• Gerdau S.A. had a net profit of R$ 642.4 million, 8.3% less than in the 3^rd quarter (R$ 1.45 per share).

• Net Profit for the full year was R$ 2.8 billion, 1.8% less than in 2004 (R$ 6.29 per share).

• On December 31^st, 2005, the Company’s Shareholders’ Equity was R$ 8.0 billion, representing a net worth of R$ 18.19 per share.

 

10

Gerdau Ameristeel Corporation

• Gerdau Ameristeel Corporation trading in 2005

• At the Toronto Stock Exchange – GNA.TO

Financial volume: Cdn$ 692.6 million (+38.4% over 2004).

Average daily financial volume: Cdn$ 2.8 million (Cdn$ 2.0 million in 2004).

Shares traded: 104.1 million shares (+24.2% over 2004).

• At the NYSE – GNA (beginning of trading - October 2004)

Financial volume: US$ 307.3 million.

Average daily financial volume: US$ 1.2 million.

Shares traded: 55.9 million shares.

TORONTO (Base 100)	NYSE (Base 100)

• Results

• Net revenues in the 4^th quarter, adjusted to Brazilian GAAP, reached R$ 2.2 billion, 7.7% lower than those of the 3^rd quarter. This was the consequence of a reduction of 11.5% in tons shipped in the period. For the full year, net revenues reached R$ 10.1 billion, 13.5% greater than that of 2004, due mainly to the consolidation of the units acquired throughout 2004.

• EBITDA reached R$ 334.4 million in the 4^th quarter, 4.5% lower than that of the 3^rd quarter. EBITDA margin presented a slight increase in the period due to the increase in the metallic spread (difference between the final products’ price and the cost of steel scrap) which went from 14.4% to 14.9%. For the full year, EBITDA was R$ 1.5 billion, with a margin of 14.7%.

• Net profit reached R$ 207.1 million in the 4^th quarter, 74.6% greater than that of the 3^rd quarter. Net profit for the full year reached R$ 685.1 million compared to R$ 896.3 million in 2004.

MANAGEMENT

 

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This press release can contain statements which constitute forward-looking statements. Such forward-looking statements are dependent on estimates, data or methods that may be incorrect or imprecise and that may be incapable of being realized. These estimates also are subject to risk, uncertainties and suppositions and include, among other, overall economic, political and commercial environment, in Brazil and in the markets we are present in addition to government regulations, present and future. Prospective investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties. The Company does not undertake, and specifically disclaims any obligation to update any forward-looking statements, which speak only as of the date made.

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This press release can contain statements which constitute forward-looking statements. Such forward-looking statements are dependent on estimates, data or methods that may be incorrect or imprecise and that may be incapable of being realized. These estimates also are subject to risk, uncertainties and suppositions and include, among other, overall economic, political and commercial environment, in Brazil and in the markets we are present in addition to government regulations, present and future. Prospective investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties. The Company does not undertake, and specifically disclaims any obligation to update any forward-looking statements, which speak only as of the date made.

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EX-99.2

Exhibit 99.2

NOTICE TO SHAREHOLDERS

PAYMENT OF DIVIDENDS

We would like to inform our Shareholders that the Boards of the companies listed below, in meetings held on February 8^th, 2006, deliberated about the proposals presented by management with regards to the payment of dividends for the forth quarter of the fiscal year ended on December 31^st, 2005. The amounts will be calculated and paid based on the position held by shareholders on February 17^th, 2006. The payment date will be March 2^nd, 2006, and constitute an anticipation of the annual minimum dividend, as stated in the by-laws, as follows:

Company	Amount per share Common and Preferred Shares
MetalÚrgica Gerdau S.A.	R$ 0.69
Gerdau S.A.	R$ 0.42

Please note that shares acquired on February 20^th, 2006, and thereafter, will be traded EX-DIVIDEND.

Additional information can be obtained at our Shareholders Department, located at

Av. Farrapos 1811, 90220-005 Porto Alegre / RS – Brazil

Phone: +55 (51) 3323.2211 – Fax: +55 (51) 3323.2281

E-mail acionistas@gerdau.com.br

Porto Alegre, February 8^th, 2006.

Osvaldo Burgos Schirmer

Vice President

Investor Relations Director