Diversified asset base with operations in 14 countries, including its businesses in Brazil and the U.S. Strong market position in long steel, largest producer in the Americas Cyclicality in the steel industry Weak economic recovery with a sluggish demand for steel Strong liquidity Positive free operating cash flow in 2013 Increased debt ratios as a result of decline in profitability The stable outlook reflects our opinion that Brazil-based steel producer Gerdau S.A. (Gerdau) will gradually reduce its debt over the next 12 to 24 months improving metrics even if operating margins remain at around 11-12% in 2013. We could raise the ratings if the company successfully implements its investment program, and if it reports stronger profitability and a more conservative
