On March 19, 2007, Standard&Poor's Ratings Services placed its 'BB+' long-term corporate credit rating on Gerdau S.A. on CreditWatch with positive implications, reflecting robust consolidated business and financial performance and our expectation that the company's financial policy will remain prudent despite an acquisitive growth strategy and healthy industry conditions. The action also reflects our expectations for reasonable, albeit lower, pricing to continue in both the U.S. and Brazil for the near-to-intermediate term. Gerdau's adjusted total consolidated debt was $4.5 billion as of Dec. 31, 2006. Thanks to favorable market conditions (especially in North America), Gerdau has been able to sustain an improved capital structure in the past several years while concurrently diversifying and expanding its operations. Gerdau's presence
