NOTE 26 — SEGMENT REPORTING

	Business Segments
	2017
	Brazil Operation		North America Operation		South America Operation		Special Steels Operation		Eliminations and Adjustments		Consolidated
Net sales	12,562,727		15,433,380		4,025,736		6,228,543		(1,332,767	)	36,917,619
Cost of sales	(10,996,383	)	(14,823,590	)	(3,523,394	)	(5,301,172	)	1,331,544		(33,312,995	)

Gross profit	1,566,344		609,790		502,342		927,371		(1,223	)	3,604,624
Selling, general and administrative expenses	(539,613	)	(569,696	)	(202,862	)	(166,656	)	(176,081	)	(1,654,908	)
Other operating income (expenses)	(11,513	)	29,113		11,260		14,989		47,882		91,731
Impairment of assets	(45,279	)	(1,069,528	)	—		—		—		(1,114,807	)
Gains and losses on assets held for sale and sales of interest in subsidiaries and associate company	—		—		—		—		(721,682	)	(721,682	)
Reversal of contingent liabilities, net	—		—		—		—		929,711		929,711
Equity in earnings of unconsolidated companies	—		(111,581	)	41,554		15,460		19,970		(34,597	)

Operational (Loss) income before financial income (expenses) and taxes	969,939		(1,111,902	)	352,294		791,164		98,577		1,100,072
Financial result, net	(564,397	)	(46,184	)	(74,301	)	(122,837	)	(335,629	)	(1,143,348	)

Income (Loss) before taxes	405,542		(1,158,086	)	277,993		668,327		(237,052	)	(43,276	)
Income and social contribution taxes	(103,263	)	201,807		(123,552	)	(192,902	)	(77,481	)	(295,391	)

Net income (Loss)	302,279		(956,279	)	154,441		475,425		(314,533	)	(338,667	)

Supplemental information:
Net sales between segments	1,216,526		59,478		6,490		50,273		—		1,332,767

Depreciation/amortization	909,333		684,121		155,038		344,059		—		2,092,551

Investments in associates and jointly-controlled entities	—		346,080		584,898		199,647		149,674		1,280,299
Total assets	17,051,262		14,872,755		5,208,265		8,834,041		4,335,438		50,301,761
Total liabilities	9,592,948		3,315,546		1,711,963		2,753,091		9,034,272		26,407,820

	Business Segments
	2016
	Brazil Operation		North America Operation		South America Operation		Special Steels Operation		Eliminations and Adjustments		Consolidated
Net sales	11,634,862		15,430,814		4,775,598		6,884,733		(1,074,340	)	37,651,667
Cost of sales	(10,405,078	)	(14,514,789	)	(4,103,231	)	(6,238,749	)	1,073,906		(34,187,941	)

Gross profit	1,229,784		916,025		672,367		645,984		(434	)	3,463,726
Selling, general and administrative expenses	(678,369	)	(778,218	)	(253,177	)	(284,962	)	(244,302	)	(2,239,028	)
Other operating income (expenses)	2,111		26,223		41,396		14,166		43,951		127,847
Impairment of assets	—		(2,779,146	)	(138,765	)	—		—		(2,917,911	)
Gains and losses on assets held for sale and sales of interest in subsidiaries and associate company	—		—		—		—		(58,223	)	(58,223	)
Equity in earnings of unconsolidated companies	—		(46,917	)	16,366		—		17,780		(12,771	)

Operational (Loss) income before financial income (expenses) and taxes	553,526		(2,662,033	)	338,187		375,188		(241,228	)	(1,636,360	)
Financial result, net	(603,373	)	(63,654	)	(96,822	)	(148,313	)	(33,093	)	(945,255	)

Income (Loss) before taxes	(49,847	)	(2,725,687	)	241,365		226,875		(274,321	)	(2,581,615	)
Income and social contribution taxes	13,140		133,818		(107,124	)	(64,348	)	(279,800	)	(304,314	)

Net income (Loss)	(36,707	)	(2,591,869	)	134,241		162,527		(554,121	)	(2,885,929	)

Supplemental information:
Net sales between segments	885,050		90,267		6,386		92,637		—		1,074,340

Depreciation/amortization	952,848		874,299		182,672		526,136		—		2,535,955

Investments in associates and jointly-controlled entities	—		303,526		404,522		—		90,796		798,844
Total assets	18,672,770		16,459,784		5,582,926		11,970,202		1,949,459		54,635,141
Total liabilities	10,761,705		3,407,444		1,651,590		6,519,255		8,020,494		30,360,488

	Business Segments
	2015
	Brazil Operation		North America Operation		South America Operation		Special Steels Operation		Eliminations and Adjustments		Consolidated
Net sales	12,977,327		17,312,166		5,477,228		8,882,071		(1,067,551	)	43,581,241
Cost of sales	(11,433,115	)	(15,800,270	)	(4,800,063	)	(8,333,189	)	1,076,111		(39,290,526	)

Gross profit	1,544,212		1,511,896		677,165		548,882		8,560		4,290,715
Selling, general and administrative expenses	(821,152	)	(814,393	)	(313,521	)	(371,481	)	(261,938	)	(2,582,485	)
Other operating income (expenses)	3,638		18,379		2,985		21,791		50,207		97,000
Impairment of assets	(834,665	)	(1,882,239	)	(354,468	)	(1,924,868	)	—		(4,996,240	)
Equity in earnings of unconsolidated companies	—		(72,774	)	36,550		—		11,722		(24,502	)

Operational (Loss) income before financial income (expenses) and taxes	(107,967	)	(1,239,131	)	48,711		(1,725,676	)	(191,449	)	(3,215,512	)
Financial result, net	(624,526	)	(234,183	)	(98,557	)	(288,021	)	(1,633,609	)	(2,878,896	)

Income (Loss) before taxes	(732,493	)	(1,473,314	)	(49,846	)	(2,013,697	)	(1,825,058	)	(6,094,408	)
Income and social contribution taxes	60,804		5,196		(104,308	)	(283,633	)	1,820,363		1,498,422

Net income (Loss)	(671,689	)	(1,468,118	)	(154,154	)	(2,297,330	)	(4,695	)	(4,595,986	)

Supplemental information:
Net sales between segments	817,494		121,292		685		128,080		—		1,067,551

Depreciation/amortization	928,861		836,660		192,014		650,374		—		2,607,909

Investments in associates and jointly-controlled entities	—		725,356		575,845		2,082		89,599		1,392,882
Total assets	20,791,119		27,324,285		7,046,438		17,077,208		(2,144,341	)	70,094,709
Total liabilities	12,831,815		7,214,899		2,451,835		9,369,552		6,256,225		38,124,326

The main products sold in each segment are:

Brazil Operations: rebar, bars, shapes, drawn products, billets, blooms, slabs, wire rod, structural shapes and iron ore.

North America Operations: rebar, bars, wire rod, light and heavy structural shapes.

South America Operations: rebar, bars and drawn products.

Special Steel Operations: stainless steel, round, square and flat bars, wire rod.

The column of eliminations and adjustments includes the elimination of sales between segments, corporate expenses, gains and losses on assets held for sale and sales of interest in subsidiaries and associate company, reversal of contingent liabilities, net, reversal of monetary update of contingent liabilities, net in the context of the Consolidated Financial Statements.

The Company’s geographic information with revenues classified according to the geographical region where the products were shipped is as follows:

					Geographic Area
	Brazil	Latin America (1)	North America (2)	Europe/Asia	Consolidated
	2017	2017	2017	2017	2017
Net sales	13,450,378	4,769,526	18,142,218	555,497	36,917,619
Total assets	23,872,075	6,009,394	19,629,950	790,342	50,301,761

	Brazil	Latin America (1)	North America (2)	Europe/Asia	Consolidated
	2016	2016	2016	2016	2016
Net sales	12,229,582	5,828,564	17,917,485	1,676,036	37,651,667
Total assets	24,266,983	6,159,387	23,463,447	745,324	54,635,141

	Brazil	Latin America (1)	North America (2)	Europe/Asia	Consolidated
	2015	2015	2015	2015	2015
Net sales	14,033,792	6,653,980	19,813,519	3,079,950	43,581,241
Total assets	22,803,505	9,327,457	36,048,019	1,915,728	70,094,709

(1) Does not include operations of Brazil

(2) Does not include operations of Mexico

IFRS requires the Company to disclose revenue per product unless the information is not available and the cost to obtain it would be excessive. Management does not consider this information useful for its decision making process, because it would aggregate sales in different markets and in different currencies, subject to the effects of changes in exchange rates. Furthermore, the trends of steel consumption and the price dynamics of each product or group of products in different countries and different markets within these countries are poorly correlated and, as a result, the information would not be useful and would not serve to conclude about historical trends. Considering this scenario and considering that the information of revenue by product is not maintained by the Company on a consolidated basis and the cost to obtain the revenue per product information would be excessive compared to the benefits of the information, the Company does not present revenue by product.