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A
AMORTIZATION
Accounting procedure
by which the original
cost value of an asset
with limited life, or
of an intangible
asset, is gradually
written off as an
expense against
results. In the case of
fixed assets, the term
used is “depreciation”
and for natural
resources the term
“exhaustion” is
employed. Both mean,
essentially, amortization.
ASSETS
Any goods or
property with
commercial or exchange
value belonging to a
society, institution
or individual.
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B
BASIS POINTS (BPS)
Interest rate measured as points. 100 basis points correspond to 1%.
BENCHMARK
Standard of
excellence.
BILLET
Steel section
(usually square) resulting
from continuous casting
or rolling of larger
sections. Used as raw
material for the
production of long
steel products.
BLAST FURNACE
A large scale furnace lined with refractory brick used in integrated steel mills to produce pig iron from iron ore.
BONUS SHARE DISTRIBUTION
Distribution to shareholders of shares resulting from increases in capital stock through incorporation of reserves or issuance of new shares.
BY-PRODUCT
Desirable or undesirable secondary product of the industrial process.
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C
CAPITAL STOCK
É a
Sum of
all resources, goods and
stocks used by partners
in constituting
a company.
COACHING
Interpersonal
relationship based on
an affective bond
through which one
person acts to identify
and maximize the
potential and
performance of an
individual or team in
search of personal
and professional growth.
COKE
A raw material used in the blast furnace to produce pig iron. Coke is produced from charcoal through a process known as coking. Coking removes the volatile components of charcoal.
CONTINUOUS CASTING
Process during which liquid steel is solidified. Steel may be cast into various shapes and gauges to produce billets, slabs or blooms, for example.
CORPORATE
GOVERNANCE
System by
which corporations are
managed and supervised,
involving the relationship
between shareholders, board of directors,
executive board,
independent auditors
and fiscal council.
Good corporate
governance practices
are aimed at increasing
the value of a
company’s shares,
facilitating
the access of companies
to capital resources
and contributing
to their continuity
(Brazilian Institute
for Corporate
Governance definition).
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D
DIVIDEND
Amount
distributed to
shareholders in cash,
proportional to the
number of shares
owned. Dividends are
usually paid from
the profit obtained
by a company in the
current or previous
fiscal year.
DRAWING
Cold process by which wire rod is transformed into wire.
DRAWN PRODUCT
Product obtained by drawing rolled bars or wire rod.
DUST REMOVAL
A highly efficient system for filtering the tiny solid particles resulting from steelmaking.
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E
EBITDA
Earnings Before
Interest, Taxes,
Depreciation and
Amortization. It is
calculated as gross
profit minus sales,
general and
administrative expenses
plus depreciation
and amortization.
EBITDA MARGIN
Equal to EBITDA divided by total revenue and expressed as a percentage. The percentage represents the amount of each dollar of revenue that results in EBITDA.
EQUITY PICKUP
Realization of equity
changes in a controlled
or subsidiary company
in the results of the
parent company.
EURO COMMERCIAL PAPER
Short or
medium term
securities that are issued
by companies in
international
financial markets.
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F
FASB 133
North American accounting standard.
FLAT STEEL
Product
category for steel
including plates
and strip. Flat steel is
used in car exteriors,
home appliances, etc.
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G
GROSS DEBT
Amount
referring to bank loans
plus issued debentures.
GROSS MARGIN
Equivalent to gross
income divided by net
sales revenues. Gross
margin is expressed
as a percentage
representing the
amounts (in different
currencies) of net sales
revenues that produced
gross income.
GROSS REVENUES
Total sales before cost of materials and services.
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H
HOLDING COMPANY
Company that
controls a group of
companies.
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L
LEVEL 1 CORPORATE
GOVERNANCE, BOVESPA
Set of conduct rules for
companies, managers
and controlling
shareholders, which
contribute to the
appreciation of
shares and other
assets issued
by a company.
Level 1 Companies
are mainly committed
to improving disclosure
to the market
and shareholding
dispersion.
LIBOR
London Inter-Bank Offer Rate. Reference interest rate in the United States.
LIQUIDITY
Ability of an asset to be converted into cash quickly.
LONG STEEL
Steel product in which one dimension (length) is predominant. Includes bars, profiles, wire rod, rebar, structural shapes and wires. Long steel is Gerdau's main product line.
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M
MAJORITY
SHAREHOLDER
Individual
or group holding a
sufficient number
of voting shares to
control a company.
Also called controlling
shareholder.
MARKET MILLS
Steel
mills focused on
purchasing raw
material and selling
their production in
the same region in
which they are based.
MELT SHOP
In a steel mill, the area where steel is produced.
MINORITY SHAREHOLDER
Individual or group holding a number of shares that is not sufficient to control the company.
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N
NET DEBT
Gross debt
minus cash and financial
applications.
NET MARGIN
Equivalent to net income divided by net sales revenues. Net margin is expressed as a percentage representing the amounts (in different currencies) of net sales revenues that produced net income.
NET PROFIT
Earnings
in a given period
of time, determined by
subtracting a
company’s total expenses from total
revenue.
NET SALES REVENUE
Gross revenues
minus sales taxes,
freight and discounts.
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P
PAPERS (STOCK MARKET)
Negotiable securities
representing the smallest
part of the capital
of a limited liability
corporation.
PIG IRON
Produced in the blast furnace, pig iron results from the chemical reduction of iron ore with charcoal or coke. It is the liquid or solid raw material used to produce steel in melt shops.
PREFERRED SHARE
Securities representing the smallest portion of capital stock in a corporation, providing privileges in terms of dividend distribution and/or reimbursement of capital in the case of dissolution. In general, preferred stock holders do not enjoy voting rights.
PRODUCTIVITY
Ratio
between what is
produced and the
necessary resources
for producing it in a
given time. In the steel
industry, one
of the most widely used
productivity indicators is
ton/man/year.
PUBLIC COMPANY
Company whose shares are registered with stock market regulating bodies.
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R
REBAR
A steel rod with ridges for use in reinforced concrete.
RECYCLING
Process
through which iron
scrap is re-used to
produce steel.
RIBBED REINFORCING
MESH
Grid frame made
of ribbed rebar used in
the construction of
concrete slabs.
ROLLED PRODUCT
Product resulting from the rolling process, in which raw material is successively compressed until acquiring the desired shape and dimensions.
ROLLING
Cold or hot mechanical process that changes the cross-sectional dimensions or shape of steel produced in the melt shop.
ROLLING BLOCK
Rolling equipment, including a set of cages assembled as a single structure, used in the high-speed production of high quality wire rod.
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S
SARBANES-OXLEY
A law enacted by the U.S. Congress to protect investors from accounting fraud in corporations. The rules and regulations of the Sarbanes-Oxley Act amend and supplement the preexisting laws ruling publicly traded companies.
SCALE
Substance
resulting from iron
oxidation on the surface
of steel. Scale is formed
during the hot rolling
process or when steel is
exposed to high
temperatures.
SCRAP
Iron material that is reprocessed for steel production.
SINTERING
Clustering of iron ore fines in a mixture containing approximately 5% of finely separated charcoal. Heating this mixture results in bonding of iron ore particles, producing a uniform and porous matter known as “sinter.”
SLAG
A mixture of
metallic and non-metallic
oxides formed on the
surface of steel during
the production process.
SPECIALTY LONG STEEL
Steel product in which one dimension (length) is predominant. In addition, this type of steel is produced with specific physical and metallurgical characteristics required for special applications, such as in the automotive, oil, tool, machinery and equipment industries.
STEEL
An iron and carbon alloy with carbon content not exceeding 1.5%, which may also contain other chemical elements aimed at improving its properties.
STIRRUP
Product made
of CA-60 ribbed steel,
fabricated in various
shapes and used to
manufacture columns
and beams for small
constructions.
STRUCTURAL PROFILES
Category of steel
product including I and
H beams, wide flange
beams and
sheet piles. Used in
buildings, industrial
installations, bridge
reinforcements, etc.
SLAB A steel product
that serves as the basis
for the production of
plates and strips.
SUSTAINABILITY
Sustainability
(or sustainable
development) is the
balance between
economic, environmental
and social aspects to
avoid compromising the
future growth
of a company.
SWAP
Hedge operation
designed to protect a company from financial
risks such as interest and
exchange rates.
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T
TRAINEE
Recent
university graduate who
is being consistently and
rapidly prepared to
assume a position
in a company.
TRUSS FRAMES
Triangular-shaped frame
made of CA-60 ribbed
steel. Found in
prefabricated slabs
used in buildings, bridges
and overpasses and in
floor and slab spacers,
among other applications.
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W
WIRE ROD
Round steel product obtained from the rolling process. Wire rod is usually drawn and used in the production of wire, screws and nails.
WORKING CAPITAL
Portion of the capital
used to finance current
assets and which ensures
a safety margin for
operating activities.
WORLD-CLASS
COMPANY
A company
that adopts international
excellence standards,
providing proactive and
innovative solutions,
achieving outstanding
results and being
considered as a
benchmark for other
companies.
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Y
YIELD
The annual rate
of return on a share
expressed as dividends or
interest on capital stock.
It refers to the
relationship between
annual dividends and
interest on capital stock
and the price of a share
at the end of a
specific period.
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