Gerdau (GGB) 20-F29 Mar 192018 FY Annual report (foreign)Financial data

Company Profile

Document and Entity Information

Document and Entity Information	12 Months Ended
Document and Entity Information	Dec. 31, 2018shares
Document - Document and Entity Information
Entity Registrant Name	GERDAU S.A.
Entity Central Index Key	0001073404
Document Type	20-F
Document Period End Date	Dec. 31, 2018
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding	573,627,483
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	FY

CONSOLIDATED BALANCE SHEETS

CONSOLIDATED BALANCE SHEETS - BRL (R$) R$ in Thousands	Dec. 31, 2018	Dec. 31, 2017
CURRENT ASSETS
Cash and cash equivalents	R$ 2890144	R$ 2555338
Short-term investments	459,470	821,518
Trade account receivable - net	3,201,656	2,798,420
Inventories	9,167,689	6,701,404
Tax credits	527,428	402,429
Income and social contribution taxes recoverable	445,561	487,633
Unrealized gains on financial instruments	30,711
Assets held for sale		3,745,634
Other current assets	780,423	469,737
TOTAL CURRENT ASSETS	17,503,082	17,982,113
NON-CURRENT ASSETS
Tax credits	32,065	30,841
Deferred income taxes	3,874,054	3,054,393
Unrealized gains on financial instruments	2,706
Related parties	27,939	51,839
Judicial deposits	2,135,414	2,051,181
Other non-current assets	449,592	542,973
Prepaid pension cost	17,952	1,149
Advance for future investment in joint venture	375,456
Investments in associates and joint ventures	1,367,802	1,280,299
Goodwill	9,112,390	7,891,142
Other Intangibles	836,096	972,089
Property, plant and equipment, net	15,546,481	16,443,742
TOTAL NON-CURRENT ASSETS	33,777,947	32,319,648
TOTAL ASSETS	51,281,029	50,301,761
CURRENT LIABILITIES
Trade accounts payable	4,119,057	3,179,954
Short-term debt	1,822,183	2,004,341
Debentures	2,755
Taxes payable	351,545	284,101
Income and social contribution taxes payable	395,682	70,242
Payroll and related liabilities	588,627	443,859
Dividends payable	169,616
Employee benefits	157	253
Environmental liabilities	60,419	21,928
Unrealized losses on financial instruments	5,245
Liabilities held for sale		1,084,032
Other current liabilities	988,967	625,410
TOTAL CURRENT LIABILITIES	8,504,253	7,714,120
NON-CURRENT LIABILITIES
Long-term debt	11,545,658	14,457,315
Debentures	1,536,118	47,928
Related parties	1,350
Deferred income taxes	118,368	82,686
Unrealized losses on financial instruments		1,267
Provision for tax, civil, and labor liabilities	770,305	827,883
Environmental liabilities	72,228	63,263
Employee benefits	1,356,560	1,424,611
Obligations with FIDC	938,526	1,135,077
Other non-current liabilities	499,092	653,670
TOTAL NON-CURRENT LIABILITIES	16,838,205	18,693,700
EQUITY
Capital	19,249,181	19,249,181
Treasury stocks	(280,426)	(76,085)
Capital reserves	11,597	11,597
Retained earnings	4,806,089	3,315,374
Transactions with non-controlling interests without change of control	(2,870,825)	(2,870,831)
Other reserves	4,814,988	4,015,965
EQUITY ATTRIBUTABLE TO THE EQUITY HOLDERS OF THE PARENT	25,730,604	23,645,201
NON-CONTROLLING INTERESTS	207,967	248,740
EQUITY	25,938,571	23,893,941
TOTAL LIABILITIES AND EQUITY	R$ 51281029	R$ 50301761

CONSOLIDATED STATEMENTS OF INCO

CONSOLIDATED STATEMENTS OF INCOME/(LOSS) - BRL (R$) R$ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
CONSOLIDATED STATEMENTS OF INCOME/(LOSS)
NET SALES	R$ 46159478	R$ 36917619	R$ 37651667
Cost of sales	(40,010,100)	(33,312,995)	(34,187,941)
GROSS PROFIT	6,149,378	3,604,624	3,463,726
Selling expenses	(570,431)	(524,965)	(710,766)
Impairment loss on trade receivables	(9,914)
General and administrative expenses	(1,082,449)	(1,129,943)	(1,528,262)
Other operating income	235,421	260,618	242,077
Other operating expenses	(270,413)	(168,887)	(114,230)
Impairment of non-financial assets		(1,114,807)	(2,917,911)
Gains and losses on assets held for sale and sales of interest in subsidiaries	(414,507)	(721,682)	(58,223)
Reversal of provision for tax liabilities, net		929,711
Equity method investees	10,141	(34,597)	(12,771)
INCOME (LOSS) BEFORE FINANCIAL INCOME (EXPENSES) AND TAXES	4,047,226	1,100,072	(1,636,360)
Financial income	204,000	226,615	252,045
Financial expenses	(1,579,341)	(1,726,284)	(2,010,005)
Bonds Repurchases expenses	(223,925)
Exchange variations, net	(322,621)	(4,057)	851,635
Reversal of interest on provision for tax liabilities, net		369,819
Gains and losses on derivative financial instruments, net	32,092	(9,441)	(38,930)
INCOME (LOSS) BEFORE TAXES	2,157,431	(43,276)	(2,581,615)
Income and social contribution taxes
Current	(629,209)	(313,758)	(110,511)
Deferred	798,160	18,367	(193,803)
Income and social contribution taxes	168,951	(295,391)	(304,314)
NET INCOME (LOSS)	2,326,382	(338,667)	(2,885,929)
ATTRIBUTABLE TO:
Owners of the parent	2,303,868	(359,360)	(2,890,811)
Non-controlling interests	22,514	20,693	4,882
NET INCOME (LOSS)	R$ 2326382	R$ 338667	R$ 2885929
EARNINGS PER SHARE
Basic earnings/(loss) per share - preferred and common - (R$)	R$ 1.35	R$ 0.21	R$ 1.70
Diluted earnings/(loss) per share - preferred and common - (R$)	R$ 1.34	R$ 0.21	R$ 1.70

CONSOLIDATED STATEMENTS OF COMP

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME/(LOSS) - BRL (R$) R$ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME/(LOSS)
Net income (loss) for the year	R$ 2326382	R$ 338667	R$ 2885929
Items that may be reclassified subsequently to profit or loss
Other comprehensive income from associates and joint ventures	125,719	(16,745)	(251,195)
Cumulative translation adjustment	2,399,725	409,280	(5,036,586)
Recycling of cumulative translation adjustment to net income	(811,276)	(76,430)	(1,237,175)
Unrealized (Losses) Gains on net investment hedge	(1,491,534)	(148,560)	1,679,312
Cash flow hedges
Unrealized Gains (Losses) on Financial Instruments, net of tax	11,947	(11,364)	212
Total items that may be reclassified subsequently to profit or loss	234,581	156,181	(4,845,432)
Items that will not be reclassified subsequently to profit or loss
Remeasurement of defined benefit pension plan, net of tax	152,345	(115,880)	(42,181)
Total items that will not be reclassified subsequently to profit or loss	152,345	(115,880)	(42,181)
Other comprehensive income (loss), net of tax	386,926	40,301	(4,887,613)
Total comprehensive income (loss) for the year, net of tax	2,713,308	(298,366)	(7,773,542)
Total comprehensive income/(loss) attributable to:
Owners of the parent	2,668,728	(325,260)	(7,743,624)
Non-controlling interests	44,580	26,894	(29,918)
Total comprehensive income (loss) for the year, net of tax	R$ 2713308	R$ 298366	R$ 7773542

CONSOLIDATED STATEMENTS OF CHAN

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY - BRL (R$) R$ in Thousands	Total Parent company's interestInitial application of IFRS 9	Total Parent company's interest	Capital	Treasury Stocks	Capital Reserve	Legal reserve	Tax Incentives Reserve	Investments and working capital reserve	Retained earnings	Operations with noncontrolling interests	Gains and losses on net investment hedge	Gains and losses on financial instrumentsInitial application of IFRS 9	Gains and losses on financial instruments	Cumulative translation adjustment	Pension Plan	Stock Options	Non-controlling interestsInitial application of IFRS 9	Non-controlling interests	Initial application of IFRS 9	Total
Equity at beginning of period at Dec. 31, 2015		R$ 31685801	R$ 19249181	R$ 383363	R$ 11597	R$ 628228	R$ 611531	R$ 5668300	R$ 0	R$ 2877488	R$ 6083288		R$ 16084	R$ 15021878	R$ 314981	R$ 138122		R$ 284582		R$ 31970383
Net income (loss)		(2,890,811)							(2,890,811)									4,882		(2,885,929)
Other comprehensive income (loss) recognized in the year		(4,852,813)									1,678,852		239	(6,489,813)	(42,091)			(34,800)		(4,887,613)
Total comprehensive income (loss) for the year, net of tax		(7,743,624)							(2,890,811)		1,678,852		239	(6,489,813)	(42,091)			(29,918)		(7,773,542)
Stock option expenses recognized in the year		51,230														51,230		184		51,414
Treasury stocks		(95,343)		(95,343)														(27)		(95,370)
Assignment of preferred shares		205,800		369,499				(163,699)												205,800
Stock option exercised during the year		5,496		10,461				(4,965)										64		5,560
Effect of interest changes in subsidiaries		4,153								4,153								(6,405)		(2,252)
Absorption of net loss proposed to the shareholders								(2,890,811)	2,890,811
Dividends/interest on capital		(85,377)						(85,377)										(1,963)		(87,340)
Equity at end of period at Dec. 31, 2016		24,028,136	19,249,181	(98,746)	11,597	628,228	611,531	2,523,448	0	(2,873,335)	(4,404,436)		16,323	8,532,065	(357,072)	189,352		246,517		24,274,653
Net income (loss)		(359,360)							(359,360)									20,693		(338,667)
Other comprehensive income (loss) recognized in the year		34,100									(148,548)		(11,351)	309,385	(115,386)			6,201		40,301
Total comprehensive income (loss) for the year, net of tax		(325,260)							(359,360)		(148,548)		(11,351)	309,385	(115,386)			26,894		(298,366)
Stock option expenses recognized in the year		5,633														5,633		15		5,648
Stock option exercised during the year		19,650		22,661				(3,011)										32		19,682
Effect of interest changes in subsidiaries		2,504								2,504								(21,698)		(19,194)
Absorption of net loss proposed to the shareholders								(359,360)	359,360
Dividends/interest on capital		(85,462)						(85,462)										(3,020)		(88,482)
Equity at end of period at Dec. 31, 2017	R$ 23612848	23,645,201	19,249,181	(76,085)	11,597	628,228	611,531	2,075,615	0	(2,870,831)	(4,552,984)	R$ 27381	4,972	8,841,450	(472,458)	194,985	R$ 248706	248,740	R$ 23861554	23,893,941
Effects of IFRS 9 adoption, net of taxes		(32,353)											(32,353)					(34)		(32,387)
Net income (loss)		2,303,868							2,303,868									22,514		2,326,382
Other comprehensive income (loss) recognized in the year		364,860									(1,491,274)		11,817	1,692,162	152,155			22,066		386,926
Total comprehensive income (loss) for the year, net of tax		2,668,728							2,303,868		(1,491,274)		11,817	1,692,162	152,155			44,580		2,713,308
Stock option expenses recognized in the year		(35,836)														(35,836)		(97)		(35,933)
Treasury stocks		(243,396)		(243,396)														(327)		(243,723)
Effects of IAS 29 adoption in the subsidiary of Argentina		502,352												502,352				5,535		507,887
Assignment of preferred shares		18,984		11,622				7,362												18,984
Stock option exercised during the year		23,277		27,433				(4,156)										77		23,354
Effect of interest changes in subsidiaries		6								6								(85,483)		(85,477)
Complementary Dividends		(51,020)						(51,020)												(51,020)
Legal reserve						115,193			(115,193)
Tax incentives reserve							17,051		(17,051)
Investments and working capital reserve								1,406,285	(1,406,285)
Dividends/interest on capital		(765,339)							(765,339)									(5,024)		(770,363)
Equity at end of period at Dec. 31, 2018		R$ 25730604	R$ 19249181	R$ 280426	R$ 11597	R$ 743421	R$ 628582	R$ 3434086	R$ 0	R$ 2870825	R$ 6044258		R$ 16789	R$ 11035964	R$ 320303	R$ 159149		R$ 207967		R$ 25938571

CONSOLIDATED STATEMENTS OF CASH

CONSOLIDATED STATEMENTS OF CASH FLOWS - BRL (R$) R$ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Cash flows from operating activities
Net income (loss) for the year	R$ 2326382	R$ 338667	R$ 2885929
Adjustments to reconcile net income for the year to net cash provided by operating activities
Depreciation and amortization	1,891,814	2,092,551	2,535,955
Impairment of Assets		1,114,807	2,917,911
Equity method investees	(10,141)	34,597	12,771
Exchange variation, net	322,621	4,057	(851,635)
(Gains) Losses on financial instruments, net	(32,092)	9,441	38,930
Post-employment benefits	189,603	192,724	229,767
Stock based compensation	41,186	35,576	46,683
Income tax	(168,951)	295,391	304,314
Gains on disposal of property, plant and equipment	(41,109)	(69,510)	(43,340)
Results in operations with subsidiaries	414,507	721,682	58,223
Impairment loss on trade receivables	9,914	18,342	68,781
Provision for tax, labor and civil claims	(56,409)	(110,281)	347,882
Reversal of contingent liabilities, net		(929,711)
Interest income on short-term investments	(49,745)	(75,387)	(107,980)
Interest expense on loans	1,177,686	1,323,448	1,540,797
Reversal of monetary update of contingent liabilities, net		(369,819)
Interest on loans with related parties	(545)	(95)	2,457
Provision (Reversal) for net realisable value adjustment in inventory	8,228	(20,195)	(31,492)
Cash flows from operations before changes in working capital	6,022,949	3,928,951	4,184,095
Changes in assets and liabilities
Decrease (Increase) in trade accounts receivable	71,631	(54,690)	64,805
(Increase) Decrease in inventories	(2,427,473)	(1,269,455)	794,591
Increase in trade accounts payable	900,388	800,164	110,466
Increase in other receivables	(118,988)	(371,745)	(275,938)
Decrease in other payables	(1,160,626)	(56,909)	(287,487)
Dividends from joint ventures	55,357	40,644	124,495
Purchases of trading securities	(1,512,123)	(2,390,104)	(880,436)
Proceeds from maturities and sales of trading securities	1,629,595	2,905,411	1,089,972
Cash provided by operating activities	3,460,710	3,532,267	4,924,563
Interest paid on loans and financing	(1,162,364)	(1,330,116)	(1,240,165)
Income and social contributions taxes paid	(298,663)	(126,023)	(168,032)
Net cash provided by operating activities	1,999,683	2,076,128	3,516,366
Cash flows from investing activities
Purchases of property, plant and equipment	(1,194,934)	(873,329)	(1,323,891)
Proceeds from sales of property, plant and equipment, investments and other intangibles	4,021,251	554,457	308,694
Purchases of other intangibles	(67,388)	(37,939)	(54,044)
Advance for future investment in joint venture	(375,456)
Capital increase in joint venture		(178,670)
Net cash provided (used) in investing activities	2,383,473	(535,481)	(1,069,241)
Cash flows from financing activities
Purchase of treasury shares	(243,396)		(95,343)
Dividends and interest on capital paid	(599,099)	(86,386)	(85,962)
Proceeds from loans and financing	2,560,789	3,265,860	2,455,371
Repayment of loans and financing	(6,000,433)	(7,241,401)	(4,605,406)
Intercompany loans, net	25,755	5,797	(6,492)
Net cash used in financing activities	(4,256,384)	(4,056,130)	(2,337,832)
Exchange variation on cash and cash equivalents	208,034	7,438	(693,990)
Increase (Decrease) in cash and cash equivalents	334,806	(2,508,045)	(584,697)
Cash and cash equivalents at beginning of year	2,555,338	5,063,383	5,648,080
Cash and cash equivalents at end of year	R$ 2890144	R$ 2555338	R$ 5063383

GENERAL INFORMATION

GENERAL INFORMATION	12 Months Ended
GENERAL INFORMATION	Dec. 31, 2018
GENERAL INFORMATION
GENERAL INFORMATION	NOTE 1 — GENERAL INFORMATION Gerdau S.A. is a publicly traded corporation (sociedade anônima) with its corporate domicile in the city of São Paulo, Brazil. Gerdau S.A and subsidiaries (collectively referred to as the “Company”) is a leading producer of long steel in the Americas and one of the largest suppliers of special steel in the world. In Brazil, the Company also produces flat steel and iron ore, activities which expanded the product mix and made its operations even more competitive. The Company believes it is the largest recycler in Latin America and around the world it transforms each year millions of tons of scrap into steel, reinforcing its commitment to sustainable development of the regions where it operates. Gerdau is listed on the São Paulo, New York and Madrid stock exchanges. The Consolidated Financial Statements of Gerdau S.A and subsidiaries were approved by the Board of Directors on March 28, 2019.

SUMMARY OF SIGNIFICANT ACCOUNTI

SUMMARY OF SIGNIFICANT ACCOUNTING PRACTICES	12 Months Ended
SUMMARY OF SIGNIFICANT ACCOUNTING PRACTICES	Dec. 31, 2018
SUMMARY OF SIGNIFICANT ACCOUNTING PRACTICES
SUMMARY OF SIGNIFICANT ACCOUNTING PRACTICES	NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING PRACTICES 2.1 — Basis of Presentation The Company’s Consolidated Financial Statements have been prepared in accordance and are in compliance with the International Financial Reporting Standards (IFRS) issued by International Accounting Standards Board (IASB). The preparation of the Consolidated Financial Statements in accordance with IFRS requires Management to make accounting estimates. The areas that involve judgment or use of estimates relevant to the Consolidated Financial Statements are stated in Note 2.17. The Consolidated Financial Statements have been prepared using historical cost as its basis, except for the valuation of certain financial instruments, which are measured at fair value. The Company adopted all applicable standards and revisions of standards and interpretations issued by the IASB or the IFRS Interpretations Committee that are effective as of December 31, 2018. a) Investments in Subsidiaries The Company’s consolidated financial statements include the financial statements of Gerdau S.A. and all its subsidiaries. The Company controls an entity when it is exposed or has the right to variable returns arising from their involvement with the entity and has the ability to affect those returns due to the power exercised over the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Company. They are deconsolidated from the date that control ceases. Third parties’ interests in equity and net income of subsidiaries are reported separately in the consolidated balance sheet and in the consolidated statement of income, respectively, under the account “Non-controlling interests”. For business combinations, the assets, liabilities, and contingent liabilities of a subsidiary are reported at their respective fair value on the date of acquisition. Any excess of the acquisition cost over the fair value of the identifiable net assets acquired is recorded as goodwill. When the acquisition cost is less than the fair value of the net assets identified, the difference is recorded as a gain in the statement of income for the year in which the acquisition took place. The non-controlling interests are presented based on the proportion of the fair value of the identified assets and liabilities acquired. Intercompany transactions and balances are eliminated in the consolidation process. Gains or losses resulting from transactions among consolidated entities of the Company are also eliminated. b) Investments in Joint ventures and Associate companies Joint ventures are those in which the control is held jointly by the Company and one or more partners. An associate company is one in which the Company exercises significant influence, but over which it does not have control. Investments in joint ventures and associate companies are recorded under the equity accounting method. c) Equity Method According to this method, investments are recognized in the consolidated balance sheet at acquisition cost and are adjusted subsequently based on the Company’s share in the earnings and in other changes in the net assets of the Associates and Joint Ventures. The balances of the investments can also be reduced due to impairment losses. Furthermore, dividends received from these companies are recorded as reductions in the value of the investments. 2.2—Foreign Currency Translation a) Functional and Reporting Currency The functional currency of an entity is the currency of the primary economic environment where it operates. The Consolidated Financial Statements are presented in Brazilian Reais (R$), which is the functional and reporting currency of the Company. All balances were rounded to the nearest thousand, unless otherwise stated. b) Transactions and Balances For purposes of the Consolidated Financial Statements, the balances of each subsidiary of the Company are converted into Brazilian reais, which is the functional currency of the Company and the reporting currency of its Consolidated Financial Statements, at the exchange rates at the dates of the transactions. c) Group Companies The results of operations and financial position of all subsidiaries included in the consolidated financial statements, along with equity investments, which have functional currencies different from the Company’s reporting currency are translated into the reporting currency as follows: i) Asset and liability balances are translated at the exchange rate in effect at the balance sheet date; ii) Income and expenses are translated using the average monthly exchange rates for the year; iii) Translation gains and losses resulting from the above methodology are recognized in Equity, in the Statement of Comprehensive Income, in the account named “Other reserves - Cumulative translation adjustment”; and iv) The amounts presented in the cash flow are extracted from the converted changes in assets, liabilities and results. d) Hyperinflation in Venezuela Venezuela is considered a hyperinflationary economy and, for this reason, the financial statements of the Company’s subsidiary located in this country have been adjusted so that the amounts are stated in the measurement currency unit as of the end of the year, which considers the effects measured by the IPC - Índice de Preços ao Consumidor (Consumer Price Index) of Venezuela. The exchange rate used to translate the Venezuela subsidiary financial statements from local currency (Sovereign Bolivar in 2018 and Strong Bolivar in 2017) to Real considers the local exchange rate known as SIMADI ( Sistema Marginal de Divisas ), which is used in conversions from Strong Bolivar to American Dollar as a reference to local currency translation into Real. This rate is equivalent to 164.70 Sovereign Bolivars each 1 Real as of December 31, 2018 (1,011.19 Strong Bolivar to each 1 Real as of December 31, 2017). d) Hyperinflation in Argentina In July 2018, considering that the accumulated inflation in the last three years in Argentina was over 100%, the application of the Financial Reporting in Hyperinflationary Economies (IAS 29) is now required. In accordance with IAS 29, non-monetary assets and liabilities, Equity and the statement of income of subsidiaries operating in highly inflationary economies are adjusted by the change in the Consumer price index of the currency. As a result of that, the Company applied the concepts of IAS 29 to its subsidiaries in Argentina. The non-monetary assets and liabilities recorded at historical cost and the Equity of the subsidiaries in Argentina were updated for inflation. The statements of income for the year ended on 2017, and the respective balance sheets of the subsidiaries in Argentina, were not restated. The impacts of hyperinflation resulting from changes in general purchasing power up to June, 30 2018 were reported as equity adjustment and the impacts of changes in general purchasing power as from July 1, 2018 were reported as financial result in the statements of income of the Company. As a result of the above effects as of December 31, 2018, the Company recognized R$ 507,887 in its equity, net of tax effects, and in its consolidated statements of income, the amounts of R$ (38,105) in the financial result, and R$ (29,455) in the net income of the year. 2.3 — Financial Assets At initial recognition, a financial asset is classified as measured at amortized cost, at fair value through profit or loss or at fair value through other comprehensive income. Financial assets are not reclassified subsequent to initial recognition, unless the Company changes the business model for the management of financial assets. The Company performs an evaluation of the business model objective in which a financial asset is held in the portfolio because this better reflects the way in which the business is managed. a) Financial assets at amortized cost These assets are measured subsequently to initial recognition at the amortized cost using the effective interest method. The amortized cost is reduced by impairment losses. Interest income, foreign exchange gains and losses and impairment are recognized directly in income. Any gain or loss on derecognition is recognized on statement of income. b) Financial assets measured at fair value through profit or loss These assets are measured subsequently to initial recognition at the fair value. The net result, including interest, is recognized directly in income. c) Financial assets measured at fair value through other comprehensive income These assets are measured subsequently to initial recognition at fair value. Interest income calculated using the effective interest method, exchange gains and losses and impairment are recognized in the statement of income. Other net results are recognized in other comprehensive income. In derecognition, the accumulated result in other comprehensive income is reclassified to the statement of income. d) Impairment of financial assets The Company measures the allowance for doubtful accounts in an amount equal to the Expected credit loss. In determining whether the credit risk of a financial asset has increased significantly since the initial recognition and in estimating the expected credit losses, the Company considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes quantitative and qualitative information and analysis, based on the Company's historical experience, credit assessment and considering forward-looking information. The provision for credit risks was calculated based on the credit risk analysis, which includes the historical losses, the individual situation of the clients, the situation of the economic group to which they belong, the real guarantees for the debts and the evaluation of the legal advisors and is considered sufficient to cover possible losses on amounts receivable, in addition to a prospective assessment that takes into account the change or expectation of change in economic factors that affect expected credit losses, which will be determined based on probabilities weighted. The Company presents the impairment of the financial assets (Provision for credit risk) in the Statement of Income and in the line of Impairment loss on trade receivables. e) Derecognition The Company derecognizes a financial asset when expire the contractual rights of the cash flows of the asset, or when the Company transfers the contractual rights of that cash flows in a transaction in which substantially all the risks and benefits of the financial asset are transferred or in which the Company neither transfers nor maintains substantially all the risks and benefits of the financial asset and also does not retain control over the financial asset. f) Compensation Financial assets and liabilities are offset and the net amount presented in the balance sheet when, and only when, the Company currently has a legally enforceable right to offset the amounts and intends to settle them on a net basis or to realize the asset and settle the liability simultaneously. g) Financial Instruments – Accounting Policy applicable as from January 1 st , 2018 A financial asset is measured at amortized cost if it meets both of the following conditions and is not designated as measured at fair value through profit or loss: it is maintained within a business model whose objective is to maintain financial assets to receive contractual cash flows; and its contractual terms generate, at specific dates, cash flows that are related only to payment of principal and interest on the outstanding principal amount. A debt instrument is measured at fair value through other comprehensive income if it meets both of the following conditions and is not designated as measured at fair value through profit or loss: it is maintained within a business model whose objective is achieved both by receipt of contractual cash flows and sale of financial assets; and its contractual terms generate, on specific dates, cash flows that are only payments of principal and interest on the outstanding principal amount. In the initial recognition of an investment in an equity instrument that is not held for trading, the Company may irrevocably choose to present subsequent changes in the fair value of the investment in other comprehensive income. This choice is made investment by investment. The Company performs an evaluation of the business model objective in which a financial asset is held in the portfolio because this better reflects the way in which the business is managed and the information is provided to Management. The information considered includes: the policies and objectives stipulated for the portfolio and the practical operation of those policies. They include the question of whether Management's strategy focuses on obtaining contractual interest income, maintaining a certain interest rate profile, matching the duration of financial assets with the duration of related liabilities or expected outflows of cash, or the realization of cash flows through the sale of assets; how the performance of the portfolio is evaluated and reported to the Company's Management; the risks that affect the performance of the business model (and the financial asset held in that business model) and the manner in which those risks are managed; the frequency, volume and timing of sales of financial assets in prior periods, the reasons for such sales and their expectations about future sales. h) Evaluation on whether contractual cash flows are only payments of principal and interest For the purposes of this valuation, the 'principal' is defined as the fair value of the financial asset at the initial recognition. 'Interest' is defined as a consideration for the time value of money and for the credit risk associated with the principal amount outstanding over a given period of time and for the other underlying risks and costs of borrowing (e.g. liquidity risk and costs administrative costs), as well as a profit margin. The Company considers the contractual terms of the instrument to assess whether contractual cash flows are only principal and interest payments. This includes assessing whether the financial asset contains a contractual term that could change the timing or value of the contractual cash flows so that it would not meet that condition. In making this assessment, the Company considers: contingent events that modify the value or the time of cash flows; terms that may adjust the contractual rate, including variable rates; the prepayment and the extension of the term; and terms that limit the Company's access to cash flows of specific assets (for example, based on the performance of an asset). The prepayment is consistent with the principal and interest payments criterion if the prepayment amount represents, for the most part, unpaid principal and interest amounts on the outstanding principal amount - which may include additional compensation the early termination of the contract. i) Financial assets – Accounting Policy applicable before January 1 st , 2018 The Company classified the financial assets in the following categories: loans and receivables; financial assets measured at fair value through profit or loss. Financial assets classified as loans and receivables used amortized cost by the effective interest method as a measurement, and financial assets measured at fair value through profit or loss were measured at fair value and changes in fair value, including interest or dividend income, and were recognized in profit or loss. 2.4 — Inventories Inventories are measured at the lower of historical cost of acquisition or production and net realizable value. The acquisition and production costs include transportation, storage and non-recoverable taxes. Net realizable value is the estimated sale price in the ordinary course of business less the estimated costs of completion and selling expenses directly related. Information regarding the allowance for adjustments to net realizable value is presented in note 6. 2.5 — Property, Plant and Equipment Property, plant and equipment are stated at historical cost, monetarily adjusted when applicable, less depreciation, except for land, which is not depreciated. The Company recognizes monthly to the construction costs of qualified assets, which are assets that, necessarily, require a substantial period of time to be finished for its intended use, the borrowing costs as part of the acquisition cost of the property, plant and equipment under construction based on the following capitalization criteria: (a) the capitalization period begins when the property, plant and equipment item is under construction in process and the capitalization of borrowing costs ceases when the asset is available for use; (b) borrowing costs are capitalized considering the weighted average rate of loans existing on the capitalization date or a specific rate, in the case of loans for the acquisition of property, plant and equipment; (c) borrowing costs capitalized do not exceed the interest expenses during the capitalization period; and (d) capitalized borrowing costs are depreciated considering the same criteria and useful life determined for the property, plant and equipment item to which it was capitalized. Depreciation is calculated under the straight-line method at rates that take into consideration the estimated useful life of the asset, its level of utilization and the estimated residual value of the asset at the end of its useful life. The estimated residual value and useful life of the assets are reviewed and adjusted, if necessary, at each year-end. Subsequent costs are added to the carrying amount of property, plant and equipment or recognized as a specific item, as appropriate, only if the economic benefits associated to these items are probable and the amounts can be reliably measured. The carrying amount of replaced items is written-off. Other repairs and maintenance are recognized directly in income when incurred. Mining exploration rights are classified as Land and Buildings in the Property, plant and equipment account. Exploration expenditures are recognized as expenses until the feasibility of mining activity is established and thereafter subsequent costs are capitalized. Costs for the development of new iron ore reserves or to expand the capacity of operating mines are capitalized and amortized based on the amount of iron ore extracted. Stripping costs (costs associated with removal of waste and other residual materials) incurred during the development phase of a mine, before production phase, are registered as part of the depreciable cost of asset. Subsequently, these costs are depreciated over the useful life of the mine. Spending on waste removal, after the start of production of the mine, are treated as production costs. Depletion of mines is calculated based on the amount of ore extracted. The net book value of property, plant and equipment items is immediately impaired to its recoverable amount when the residual balance exceeds the recoverable amount. 2.6 — Goodwill Goodwill represents the excess of the acquisition cost over the fair value net of the assets acquired, liabilities assumed and identifiable contingent liabilities of a subsidiary, joint venture, or associate company, at the respective acquisition date. Goodwill is recorded as an asset and recorded under "Goodwill" account. Goodwill is not amortized and is subject to impairment tests annually or whenever there are indications of potential impairment. Any impairment loss is recorded as an expense in the income statement and cannot be reversed. Goodwill is allocated to the operating segments, which represents the lowest level at which goodwill is monitored by management. Goodwill that forms part of the carrying amount of an investment in an associate or a joint venture is not separately recognized. The entire carrying amount of the investment in associate or joint venture is tested for impairment as a single asset, by comparing its recoverable amount (higher of value in use and fair value less costs to sell) with its carrying amount, including impairment indicators described in IFRS 9. When a subsidiary, joint venture or associate is sold, goodwill is included in the determination of gains and losses on disposal. 2.7 — Other Intangible Assets Other intangible assets are stated at acquisition cost, less accumulated amortization and impairment losses, when applicable. Intangible assets consist mainly of assets which represent the capacity to generate economic benefits from companies acquired based on relationships with customers and suppliers, software and others. Intangible assets with definite useful lives are amortized taking into consideration their actual use or a method that reflects their consumption of economic benefits. The net book value of intangible assets is impaired immediately to its recoverable value when the residual balance exceeds the recoverable amount (note 2.8). Intangible assets acquired in a business combination are recorded at fair value, less accumulated amortization and impairment losses, when applicable. Intangible assets that have a defined useful life are amortized over their useful lives using an amortization method that reflects the economic benefit of the intangible asset and is recorded in the cost of sales account. The intangible relationship with customers and suppliers is amortized based on an accelerated method that considers the expected future economic benefit provided over time by these new acquired customers and suppliers. The Company reviews the amortization period and amortization method for its intangible assets with definite useful lives at the end of each year. 2.8 — Provision for Impairment of Assets and Reversal of Impairment At each balance sheet date, the Company performs an assessment to determine whether there is evidence that the carrying amount of long-lived assets might be impaired. If such evidence is identified, the recoverable amount of the assets is estimated by the Company. The recoverable amount of an asset is determined as the higher of: (a) its fair value less estimated costs to selling and (b) its value in use. The value in use is measured based on discounted cash flows (before taxes) derived from the continuous use of the asset until the end of its estimated useful life. Regardless of whether or not there is any indication that the carrying amount of the asset may be impaired, the balances of goodwill arising from business combinations and intangible assets with indefinite useful lives are tested for impairment at least once a year in December. When the carrying amount of the asset exceeds its recoverable amount, the Company recognizes a reduction in the book value of the asset (Impairment). The reduction to the recoverable amount of the asset is recorded as an expense. Except for an impairment of goodwill, a reversal of a previously recorded impairment loss is required. Reversal in these circumstances is limited to the amount of the depreciated balance of the asset at the time of the reversal, determined as if the impairment had not been recorded, as discussed in note 28.1. The Company does not believe there is a reasonable likelihood that may occur a material change in the estimates or assumptions used to calculate long-lived asset impairment losses. However, if actual results are not consistent with estimates and assumptions used in estimating future cash flows and asset fair values, the Company may be exposed to losses that could be material. 2.9 — Financial Liabilities and Equity Instruments a) Financial liabilities Financial liabilities are classified as amortized cost or at fair value through profit or loss. A financial liability is classified as fair value through profit or loss if it is classified as held for trading, it is a derivative or it is designated as such at initial recognition. Financial liabilities measured at fair value through profit or loss are measured at fair value and the net result, including interest, is recognized in the income statement. Other financial liabilities are subsequently measured at amortized cost using the effective interest method. Interest expense, exchange gains and losses are recognized in income. b) Derecognition The Company derecognizes a financial liability when its contractual obligation is withdrawn, canceled or expires. The Company also derecognizes a financial liability when the terms are modified and the cash flows of the modified liability are substantially different, in which case a new financial liability based on the modified terms is recognized at fair value. In the derecognition of a financial liability, the difference between the carrying amount extinguished and the consideration paid (including any non-cash assets transferred or liabilities assumed) is recognized in the income statement. c) Derivative Instruments and hedging The Company enters into derivative financial instruments mainly to manage its exposure to fluctuation in interest rates and exchange rates. The Company measures its derivative financial instruments, based on quotations obtained from market participants, at fair value at the balance sheet date. Changes in the fair value of a derivative that is highly effective and that is designated and qualifies as a cash flow hedge or a net investment hedge are recorded in the statement of comprehensive income. The Company assesses, both at the beginning of hedge coverage and on an ongoing basis, whether the derivatives used in hedge transactions are highly effective in offsetting changes in the fair value or cash flows of hedged items. When a cash flow hedge instrument is sold, terminated, expired or exercised, the hedge is discontinued prospectively, but the cumulative unrealized gain or loss is recognized in the comprehensive income statement. The cumulative gain and loss is transferred from the comprehensive income and recognized in the income statement when the hedged transaction is recognized in the statement of income. When no more than one transaction is expected to occur, the accumulated gain or loss is immediately transferred to the income statement. In cases of net investment hedges, the amount recorded in the statement of comprehensive income is written off and recognized in the statement of income when the disposal of the hedged investment occurs. In addition, changes in the fair value of financial instruments not characterized as hedges are recognized in the line of (Loss) Gains on financial instruments, net, in the statement of income. d) Equity instruments The equity component is initially recognized by the difference between the fair value of the compound financial instrument as a whole and the fair value of the liability component. Any directly attributable transaction costs are allocated to the liability and equity components in proportion to their initial carrying amounts. 2.10 — Current and Deferred Income and Social Contribution Taxes Current income and social contribution tax expense is calculated in conformity with enacted tax rate in effect at the balance sheet date in the countries where the Company’s subsidiaries, associates and joint venture operate and generate taxable income. Management periodically evaluates positions taken in relation to tax matters which are subject to interpretation and recognizes a provision when there is an expectation of payment of income tax and social contribution in accordance with the tax bases. The expense for income tax and social contribution taxes comprises current and deferred taxes. Current tax and deferred tax are recognized in income unless they are recognized for a business combination, or for items directly recognized in equity through other comprehensive income. Current tax is the estimated tax payable or receivable on the taxable income or loss for the year, at the tax rates effective at the balance sheet date. Deferred income tax and social contribution are recognized in its total on the differences generated between assets and liabilities recognized for tax purposes and corresponding to amounts recognized in the Financial Statements. However, deferred income and social contribution taxes are not recognized arising from the initial recognition of assets and liabilities in a transaction other than a business combination and that do not affect the tax basis. Income and social contribution taxes are determined based on tax rates (and laws) effective at the balance sheet date and applicable when the respective income and social contribution taxes is paid. Deferred income and social contribution tax assets are recognized only to the extent that it is probable that there will be taxable income for which the temporary differences can be used and tax losses can be compensated. Deferred tax assets recorded for tax loss carryforwards are supported by projections of taxable income based on technical feasibility studies submitted annually to the Board of Directors of the Company and its subsidiaries, when applicable. These studies consider historical profitability of the Company and its subsidiaries, expectations of continuous profitability and estimates of the recovery of deferred tax assets over future years. Other deferred tax assets arising from temporary differences, mainly tax provision, are recognized according to their estimate of realization. Deferred income tax and social contribution assets are reviewed at each reporting date and will be reduced to the extent that their realization is not more likely than not based on future taxable income. 2.11 — Employee Benefits The Company has several employee benefit plans including pension and retirement plans, health care benefits, profit sharing, bonus, and share-based payment, as well as other retirement and termination benefits. The main benefit plans granted to the Company’s employees are described at notes 19 and 25. The actuarial obligations related to the pension and retirement benefits and the actuarial obligations related to the health care plans are recorded based on actuarial calculations performed every year by independent actuaries, using the projected unit credit method, net of the plan assets, when applicable, and the related costs are recognized over the employees’ service period. Any employee benefit plan surpluses are also recognized up to the probable amount of reduction in future contributions by the Company. Actuarial remeasurement arising from adjustments and changes in actuarial assumptions of the pension and retirement benefit plans and actuarial obligations related to the health care plan are recognized directly in the Statement of Comprehensive Income as described in Note 19. In accounting for pension and post-retirement benefits, several statistical and other factors that attempt to anticipate future events are used to calculate plan expenses and liabilities. These factors include discount rate assumptions, return on plan assets, future increases in health care costs, and rate of future compensation increases. In addition, the Company and its actuarial uses other factors whose measurement involves judgment are used such as withdrawal, turnover, and mortality rates. The actuarial assumptions used by the Company may differ materially from actual results in future periods due to changing market and economic conditions, regulatory events, judicial rulings, higher or lower withdrawal rates, or longer or shorter participant life spans. 2.12 — Other Current and Non-current Assets and Liabilities Other current and non-current assets and liabilities are recorded at their realizable amounts (assets) and at their known or estimated amounts plus accrued charges and monetary adjustments (liabilities), when applicable. 2.13 — Related-Party Transactions Loan agreements between the entities in Brazil and abroad are adjusted by contractual financial charges plus foreign exchange variation, when applicable. These contracts have an expiration date, with the possibility of extension of time by agreement between the parties. Sales and purchases of raw materials and products are made under terms and conditions contractually established between the parties. 2.14 — Dividends and Interest on equity Dividend payments are recognized as liabilities at the time dividends are approved by the shareholders of Gerdau S.A. The bylaws of Gerdau S.A. required dividends of not less than 30% of the annual net income adjusted by 5% representing the constitution of legal reserve, and the constitution of tax incentives reserve; therefore, Gerdau S.A. records a liability at year-end for the minimum dividend amount that has not yet been paid during the year up to

CONSOLIDATED FINANCIAL STATEMEN

CONSOLIDATED FINANCIAL STATEMENTS	12 Months Ended
CONSOLIDATED FINANCIAL STATEMENTS	Dec. 31, 2018
CONSOLIDATED FINANCIAL STATEMENTS
CONSOLIDATED FINANCIAL STATEMENTS	NOTE 3 — CONSOLIDATED FINANCIAL STATEMENTS 3.1 — Subsidiaries Listed below are the significant consolidated subsidiaries, as follows: Equity Interests Total capital () Consolidated company Country 2018 2017 2016 Gerdau GTL Spain S.L. Spain 100.00 100.00 100.00 Gerdau Internacional Empreendimentos Ltda. - Grupo Gerdau Brazil 100.00 100.00 100.00 Gerdau Ameristeel Corporation and subsidiaries (1) USA/Canada 100.00 100.00 100.00 Gerdau Açominas S.A. and subsidiary (2) Brazil 99.83 99.36 99.35 Gerdau Aços Longos S.A. and subsidiary (3) Brazil 99.78 99.12 99.11 Gerdau Steel Inc. Canada 100.00 100.00 100.00 Gerdau Holdings Inc. and subsidiary (4) USA 100.00 100.00 100.00 Paraopeba - Fixed-income investment fund (5) () Brazil 91.40 10.69 70.93 Gerdau América Latina Participações S.A. Brazil — — 99.12 Aza Participaciones S.A. (note 3.4) Chile — 100.00 100.00 Gerdau Aços Especiais S.A. Brazil — — 99.55 Gerdau Hungria Holdings Limited Liability Company Hungary 100.00 100.00 100.00 GTL Equity Investments Corp. British Virgin Islands 100.00 100.00 100.00 Empresa Siderúrgica del Perú S.A.A. - Siderperú Peru 90.03 90.03 90.03 Diaco S.A. and subsidiary (6) Colombia — — 99.68 Gerdau GTL México, S.A. de C.V. and subsidiaries (7) Mexico 100.00 100.00 100.00 Seiva S.A. - Florestas e Indústrias Brazil 97.73 97.73 97.73 Itaguaí Com. Imp. e Exp. Ltda. Brazil — — 100.00 Gerdau Laisa S.A. Uruguai 100.00 100.00 100.00 Sipar Gerdau Inversiones S.A. Argentina 99.99 99.99 99.99 Sipar Aceros S.A. and subsidiary (8) Argentina 99.98 99.98 99.96 Sizuca - Siderúrgica Zuliana, C. A. Venezuela 100.00 100.00 100.00 GTL Trade Finance Inc. British Virgin Islands 100.00 100.00 100.00 Gerdau Trade Inc. British Virgin Islands 100.00 100.00 100.00 Gerdau Steel India Ltd. (note 3.4) India — 98.90 98.90 () (*) (1) Subsidiaries: Gerdau Ameristeel US Inc., Gerdau Ameristeel Sayreville Inc., Chaparral Steel Company. (2) Subsidiary: G2L Logistica Ltda. (3) Subsidiary: Gerdau Açominas Overseas Ltd. (4) Subsidiary: Gerdau MacSteel Inc. (5) Fixed-income investment fund managed by Bank JP Morgan S.A.. (6) Subsidiary: Cyrgo S.A. (7) Subsidiary: Sidertul S.A. de C.V. and GTL Servicios Administrativos México, S.A. de C.V.. (8) Subsidiary: Siderco S.A. 3.2 — Joint ventures Listed below are the interests in joint ventures: Equity Interests Total capital () Joint Ventures Country 2018 2017 2016 Bradley Steel Processors Canada 50.00 50.00 50.00 MRM Guide Rail Canada 50.00 50.00 50.00 Gerdau Corsa S.A.P.I. de CV Mexico 50.00 50.00 50.00 Gerdau Metaldom Corp. Dominican Rep. 50.00 45.00 45.00 Gerdau Summit Aços Fundidos e Forjados S.A. Brazil 58.73 58.73 — Diaco S.A. Colombia 49.87 49.87 — Juntos Somos Mais Fidelização S.A. Brazil 27.50 — — () The voting capital is substantially equal to the total capital. The interests reported represent the ownership percentage held directly and indirectly held in the joint venture. The summarized financial information of these joint ventures, accounted for under the equity method, is shown on a combined basis as follows: Joint ventures 2018 2017 2016 Net income (loss) (16,403) (91,553) (126,723) Total comprehensive income (loss) (16,403) (91,553) (126,723) 3.3 — Associate companies Listed below are the interests in associate companies: Equity interests Total capital () Associate companies Country 2018 2017 2016 Dona Francisca Energética S.A. Brazil 51.82 51.82 51.82 Corsa Controladora, S.A. de C.V. Mexico 49.00 49.00 49.00 (*) The voting capital is substantially equal to the total capital. The interests reported represent the ownership percentage held directly and indirectly. Although the Company owns more than 50% of Dona Francisca Energética S.A., it does not consolidate the financial statements of this associate because of the veto rights granted to minority shareholders that prevent the Company from controlling the decisions in conducting the associate’s business. The summarized financial information of the associate companies, accounted for under the equity method, is shown on a combined basis as follows: Associate Companies 2018 2017 2016 Net income 31,806 26,099 141,023 Total comprehensive income 31,806 26,099 141,023 3.4 — Gains and losses on assets held for sale and sales of interest in subsidiaries On March 30, 2018, the Company completed the sale of its wire rod mill located in Beaumont, Texas, and the Beaumont Wire Products and Carrollton Wire Products processing units for Optimus Steel LLC for US$ 99.5 million (equivalent to R$ 330.7 million). The mill has a melt shop capable of rolling wire rod and rebar in roll. On June 29, 2018, the Company concluded the sale of 100% of the shares of Aza Participações SpA and its subsidiaries, Gerdau AZA SA; Aceros Cox SA; Armacero - Matco SA; and Salomon Sack S.A., for the group of Chilean investors formed by Ingeniería e Inversiones Limitada; Inversiones Reyosan SpA; Los Andes SA de Inversiones and Matco Cables SpA. This sale includes three production plants of long recycled steel per year and its distribution network in Chile, which were presented until the conclusion of the sale within the South American segment. The transaction value attributed corresponds to US$ 154.1 million (equivalent to R$ 594.2 million on the date of the conclusion of the sale). On July 31, 2018, the Company concluded the sale of its two hydroelectric plants in Goiás for R$ 835 million to Kinross Brasil Mineração, a wholly owned subsidiary of Kinross Gold Corporation. The Caçu and Barra dos Coqueiros plants were inaugurated in 2010. On October 31, 2018, the Company concluded the sale of its participation interest in Gerdau Hungria KFT Y CIA Sociedad Regular Colectiva, a subsidiary of the Company located in Spain and owner of 98.89% of Gerdau Steel India Ltd. shares, to Blue Coral Investment Holdings Pte. Ltd and Mountainpeak Investment Holdings Ltd.. The transaction perimeter involves 100% of the operations and assets in India, including the special steels industrial unit located in Tadipatri. The enterprise value of the transaction corresponds to US$ 120 million (equivalent to R$ 490.2 million on the signing date of the agreement). The transaction will enable Gerdau to focus more on managing its strategic assets in the Americas, where its key markets, Brazil and the United States, are located. On November 5, 2018, the Company concluded the sale of its four rebar-producing mills, as well as steel cutting and bending units and distribution centers in the United States to Commercial Metals. The agreement includes the Jacksonville (Florida) , Knoxville (Tennessee), Rancho Cucamonga (California) and Sayreville (New Jersey), as well as all of Gerdau’s U.S. rebar fabrication facilities, presented within the North America segment up to the conclusion of the sale. The enterprise value of the transaction is US$ 600 million (equivalent to R$ 2,222.9 million) as well as working capital adjustments. On June 30, 2017, the Company concluded the operation to create a joint venture, based on the sale of 50% interest in Diaco S.A., in Colombia, to Putney Capital Management, which is already partner in its operation in the Dominican Republic. The new company’s assets are Gerdau’s long-steel industrial units in Colombia. The transaction attributed an economic value to the joint venture of US$ 165 million (equivalent to R$ 546 million). Due to this transaction, Diaco started to have accounting treatment of joint venture in Consolidated Financial Statements with a 49.87% interest. In the second quarter of 2016, the Company completed the sale of its special steel producer Gerdau Holdings Europa S.A. in Spain to Clerbil SL, an investment group with international experience formed by local executives of the Company. The enterprise value of the transaction was € 155 million (equivalent to R$ 621 million) and the sale agreement provides the possibility of receiving an additional up to € 45 million (equivalent to R$ 180 million) in the end of five years, depending on the future performance of the business. In the fourth quarter of 2016, the Company sold its interest in the associate company Corporación Centroamericana del Acero S.A. in Guatemala to the current controlling shareholders of this company for US$ 70 million (equivalent to R$ 222.7 million at the sale date) and its subsidiary Cleary Holdings Corp. coke producer and coking coal reserves holder in Colombia to Trinity Capital S.A.S. jointly with local executives, for US$ 30.2 million (equivalent to R$ 102.6 million at the selling date). As a result of the transactions above, the Company recognized an expense of R$ 414.5 million in the line of Gains and losses on assets held for sale and sales of interest in subsidiaries (expense of R$ 721.7 million as of December 31, 2017 and expense of R$ 58.2 million as of December 31, 2016) in its Income Statement.

CASH AND CASH EQUIVALENTS, AND

CASH AND CASH EQUIVALENTS, AND SHORT AND LONG-TERM INVESTMENTS	12 Months Ended
	Dec. 31, 2018
CASH AND CASH EQUIVALENTS, AND SHORT AND LONG-TERM INVESTMENTS
CASH AND CASH EQUIVALENTS, AND SHORT AND LONG-TERM INVESTMENTS	NOTE 4 — CASH AND CASH EQUIVALENTS, AND SHORT AND LONG-TERM INVESTMENTS 2018 2017 Cash 6,800 10,439 Banks and immediately available investments 2,883,344 2,544,899 Cash and cash equivalents 2,890,144 2,555,338 2018 2017 Held for trading 459,470 821,518 Short-term investments 459,470 821,518 Immediately available investments include investments with maturity up to 90 days, immediate liquidity and low risk of fair value variation. Held for trading securities include Bank Deposit Certificates and marketable securities, which are stated at their fair value. Income generated by these investments is recorded as financial income.

TRADE ACCOUNTS RECEIVABLE

TRADE ACCOUNTS RECEIVABLE	12 Months Ended
TRADE ACCOUNTS RECEIVABLE	Dec. 31, 2018
TRADE ACCOUNTS RECEIVABLE
TRADE ACCOUNTS RECEIVABLE	NOTE 5 — TRADE ACCOUNTS RECEIVABLE 2018 2017 Trade accounts receivable - in Brazil 1,056,625 1,265,431 Trade accounts receivable - exports from Brazil 373,593 139,162 Trade accounts receivable - outside of Brazil 1,929,595 1,525,466 (-) Impairment loss on trade receivables (158,157) (131,639) 3,201,656 2,798,420 Accounts receivable by aging are as follows: 2018 2017 Current 2,362,408 2,234,723 Past-due: Up to 30 days 792,569 467,901 From 31 to 60 days 63,294 96,852 From 61 to 90 days 10,133 17,636 From 91 to 180 days 22,261 27,841 From 181 to 360 days 26,003 22,985 Above 360 days 83,145 62,121 (-) Impairment loss on trade receivables (158,157) (131,639) 3,201,656 2,798,420 The Company's maximum exposure to credit risk, net of allowance for doubtful accounts, is the amount of accounts receivable. The credit quality of accounts receivable to maturity is considered adequate, and the value of the effective risk of possible losses on accounts receivable from customers is presented as allowance for doubtful accounts. The changes in the allowance for doubtful accounts are as follows: Balance as of January 1, 2016 (185,261) Provisions for bad debt during the year (85,661) Recoveries in the year 16,880 Write-offs 37,679 Loss of control by selling of subsidiary (note 3.4) 17,594 Exchange variation (537) Balance as of December 31, 2016 (199,306) Provisions for bad debt during the year (98,476) Recoveries in the year 80,134 Write-offs 73,591 Loss of control by joint venture creation 1,487 Assets held for sale 11,207 Exchange variation (276) Balance as of December 31, 2017 (131,639) Provisions for bad debt during the year (111,900) Recoveries in the year 101,986 Write-offs 39,943 Exchange variation (5,136) Effects of IFRS 9 adoption (48,063) Assets held for sale (3,348) Balance as of December 31, 2018 (158,157)

INVENTORIES

INVENTORIES	12 Months Ended
INVENTORIES	Dec. 31, 2018
INVENTORIES
INVENTORIES	NOTE 6 — INVENTORIES 2018 2017 Finished products 3,985,964 3,026,556 Work in progress 1,688,794 1,302,152 Raw materials 2,296,074 1,703,013 Storeroom supplies 784,517 298,100 Imports in transit 426,044 375,139 (-) Allowance for adjustments to net realizable value (13,704) (3,556) 9,167,689 6,701,404 The allowance for adjustment to net realizable value of inventories, on which the provision and write-offs are registered with impact on cost of sales, is as follows: Balance as of January 1, 2016 (101,121) Provision for the year (62,899) Reversal of adjustments to net realizable value 94,391 Loss of control by selling of subsidiary 30,105 Exchange rate variation 10,711 Balance as of December 31, 2016 (28,813) Provision for the year (26,545) Reversal of adjustments to net realizable value 46,740 Loss of control by joint venture creation 392 Assets held for sale 881 Exchange rate variation 3,789 Balance as of December 31, 2017 (3,556) Provision for the year (11,943) Reversal of adjustments to net realizable value 3,715 Exchange rate variation (871) Assets held for sale (1,049) Balance as of December 31, 2018 (13,704)

TAX CREDITS

TAX CREDITS	12 Months Ended
TAX CREDITS	Dec. 31, 2018
TAX CREDITS
TAX CREDITS	NOTE 7 — TAX CREDITS 2018 2017 Current ICMS (state VAT) 291,027 155,096 Social security financing 95,700 91,229 Financing of social integration program 23,473 20,242 IPI (federal VAT) 44,312 59,982 IVA (value-added tax) 32,967 48,139 Others 39,949 27,741 527,428 402,429 Non-current ICMS (state VAT) 27,527 26,135 Social security financing 1,980 360 Financing of social integration program and Others 2,558 4,346 32,065 30,841 559,493 433,270 The estimates of realization of non-current tax credits are as follows: 2018 2017 2019 — 18,017 2020 15,025 7,062 2021 10,846 5,762 2022 on 6,194 — 32,065 30,841

INCOME AND SOCIAL CONTRIBUTION

INCOME AND SOCIAL CONTRIBUTION TAXES	12 Months Ended
INCOME AND SOCIAL CONTRIBUTION TAXES	Dec. 31, 2018
INCOME AND SOCIAL CONTRIBUTION TAXES
INCOME AND SOCIAL CONTRIBUTION TAXES	NOTE 8 — INCOME AND SOCIAL CONTRIBUTION TAXES In Brazil, income taxes include federal income tax (IR) and social contribution (CS), which represents an additional federal income tax. The statutory rates for income tax and social contribution are 25% and 9%, respectively, and are applicable for the years ended December 31, 2018, 2017 and 2016. The foreign subsidiaries of the Company are subject to taxation at rates ranging between 22.6% and 34.0%, without considering there are subsidiaries abroad with zero tax rate, which have mainly financial activities. The differences between the Brazilian tax rates and the rates of other countries are presented under “Difference in tax rates in foreign companies” in the reconciliation of income tax and social contribution below. a) Reconciliations of income and social contribution taxes at statutory rates to amounts presented in the Statement of Income are as follows: 2018 2017 2016 Income (loss) before income taxes 2,157,431 (43,276) (2,581,615) Statutory tax rates 34 % 34 % 34 % Income and social contribution taxes at statutory rates (733,527) 14,714 877,749 Tax adjustment with respect to: - Difference in tax rates in foreign companies 663,116 (183,787) (1,162,174) - Equity in earnings of unconsolidated companies 3,448 (11,763) (4,342) - Interest on equity* 128,418 113 (162) - Tax credits and incentives 9,531 23,185 18,494 - Recognition of previously unrecognized tax losses 47,545 — (40,279) - Capital Gain** — (98,290) — - Other permanent differences, net 50,420 (39,563) 6,400 Income and social contribution taxes 168,951 (295,391) (304,314) Current (629,209) (313,758) (110,511) Deferred 798,160 18,367 (193,803) () Brazilian Law 9,249/95 provides that a company may, at its sole discretion, consider dividends distributions to shareholders to be considered as interest on own capital — subject to specific limitations - which has the effect of a taxable deduction in the determination of income tax and social contribution. The limitation is the greater of (i) shareholders’ equity multiplied by the TJLP (Long Term Interest Rate) rate or (ii) 50% of the net income in the fiscal year. () The merger of Gerdau Aços Especiais S.A. and Gerdau América Latina Part. S.A. at Gerdau S.A., generated a taxable capital gain. b) Breakdown and changes in deferred income and social contribution tax assets and liabilities at statutory tax rates: Effect of selling Balance as of Recognized in of subsidiary Comprehensive Balance as of January 1, 2016 income and others Income December 31, 2016 Tax loss carryforward 887,980 327,743 (263,297) (78,069) 874,357 Social contribution tax losses 191,638 120,254 — — 311,892 Provision for tax, civil and labor liabilities 639,566 118,526 (2,671) (223) 755,198 Benefits granted to employees 549,865 (67,133) 34,982 (85,177) 432,537 Other temporary differences 381,991 (21,985) 20,776 (30,020) 350,762 Deferred exchange variance 2,158,149 (907,690) — 1,083 1,251,542 Provision for losses 151,678 (34,059) (4,671) (12) 112,936 Fair value adjustments on businesses acquired (1,567,880) 270,541 2,984 216,925 (1,077,430) 3,392,987 (193,803) (211,897) 24,507 3,011,794 Non-current assets 4,307,462 3,407,230 Non-current liabilities (914,475) (395,436) * Effect of selling Balance as of Recognized in of subsidiary Comprehensive Balance as of December 31, 2016 income and Others Income December 31, 2017 Tax loss carryforward 874,357 157,402 (22,362) (35,759) 973,638 Social contribution tax losses 311,892 58,963 (15,073) — 355,782 Provision for tax, civil and labor liabilities 755,198 (479,836) 101 — 275,463 Benefits granted to employees 432,537 (48,466) (9,363) (91,905) 282,803 Other temporary differences 350,762 (81,627) 92,174 48,991 410,300 Deferred exchange variance* 1,251,542 (199,200) 8,185 — 1,060,527 Provision for losses 112,936 (2,208) — — 110,728 Fair value adjustments on businesses acquired (1,077,430) 613,339 (51,606) 18,163 (497,534) 3,011,794 18,367 2,056 (60,510) 2,971,707 Non-current assets 3,407,230 3,054,393 Non-current liabilities (395,436) (82,686) * Balance as of Recognized in Comprehensive Balance as of December 31, 2017 income Others Income December 31, 2018 Tax loss carryforward 973,638 341,664 36,445 (11,814) 1,339,933 Social contribution tax losses 355,782 (18,524) — — 337,258 Provision for tax, civil and labor liabilities 275,463 (5,214) 168 — 270,417 Benefits granted to employees 282,803 (16,564) 67,184 (46,929) 286,494 Other temporary differences 410,300 93,094 17,177 5,247 525,818 Deferred exchange variance* 1,060,527 223,850 — — 1,284,377 Provision for losses 110,728 (33,165) (12) 6,286 83,837 Fair value adjustments on businesses acquired (497,534) 213,019 (89,859) 1,926 (372,448) 2,971,707 798,160 31,103 (45,284) 3,755,686 Non-current assets 3,054,393 3,874,054 Non-current liabilities (82,686) (118,368) * The recoverability analysis of deferred tax balances related to tax loss carryforward and social contribution tax losses performed by the Company are based on its business plans and aligned with other projections and analysis performed by the Company as, for example, the impairment of assets tests. c) Estimated recovery and reversal of income and social contribution tax assets and liabilities are as follows: Assets 2018 2017 2018 — 326,356 2019 609,546 198,590 2020 585,047 400,597 2021 338,896 369,857 2022 306,130 168,125 2023 after 2,034,435 1,590,868 3,874,054 3,054,393 Liabilities 2018 2017 2018 — (2,680) 2019 (18,055) (6,116) 2020 (25,144) (6,498) 2021 (13,548) (4,745) 2022 (14,009) (18,514) 2023 after (47,612) (44,133) (118,368) (82,686) d) Unrecognized deferred income tax assets: Deferred tax assets have not been recognised in respect of the following items, because it is not probable that future taxable profit will be available against which the Company can use the benefits therefrom in some companies in Brazil. The Company has not recorded a portion of tax assets of R$ 265,403 (R$ 312,741 as of December 31, 2017), which do not have an expiration date. The subsidiaries abroad had R$ 398,364 (R$ 360,152 as of December 31, 2017) of tax credits on capital losses which deferred tax assets have not been booked and which expire between 2029 and 2035 and also several tax losses of state credits in the amount of R$ 795,775 (R$ 1,137,548 as of December 31, 2017), which expire at various dates between 2019 and 2038.

INVESTMENTS IN ASSOCIATES AND J

INVESTMENTS IN ASSOCIATES AND JOINT VENTURES	12 Months Ended
INVESTMENTS IN ASSOCIATES AND JOINT VENTURES	Dec. 31, 2018
INVESTMENTS IN ASSOCIATES AND JOINT VENTURES
INVESTMENTS IN ASSOCIATES AND JOINT VENTURES	NOTE 9 — INVESTMENTS IN ASSOCIATES AND JOINT VENTURES Investments in Investments in Investments in North America South America Special Steel Others Total Balance as of January 1, 2016 509,086 792,117 — 91,679 1,392,882 Equity in earnings (70,618) 40,067 — 17,780 (12,771) Cumulative Translation Adjustment (126,660) (124,185) — (350) (251,195) Effect of selling of subsidiary — (203,843) — (1,734) (205,577) Dividends/Interest on equity (8,282) (99,634) — (16,579) (124,495) Balance as of December 31, 2016 303,526 404,522 — 90,796 798,844 Equity in earnings (111,581) 41,553 15,460 19,971 (34,597) Cumulative Translation Adjustment (10,485) (6,260) — — (16,745) Capital increase 178,670 — 184,187 — 362,857 Joint venture creation — 145,084 — — 145,084 Contingent price complement — — — 65,500 65,500 Dividends/Interest on equity (14,050) — — (26,594) (40,644) Balance as of December 31, 2017 346,080 584,899 199,647 149,673 1,280,299 Equity in earnings (77,909) 51,648 15,629 20,773 10,141 Cumulative Translation Adjustment 33,101 96,045 (1,377) (2,050) 125,719 Capital increase — — — 7,000 7,000 Dividends/Interest on equity — (31,359) — (23,998) (55,357) Balance as of December 31, 2018 301,272 701,233 213,899 151,398 1,367,802 a) The Company made an advance for future investment in equity interest in the amount of R$ 375,456 in the joint venture Gerdau Corsa S.A.P.I. of C.V.

PROPERTY, PLANT AND EQUIPMENT

PROPERTY, PLANT AND EQUIPMENT	12 Months Ended
PROPERTY, PLANT AND EQUIPMENT	Dec. 31, 2018
PROPERTY, PLANT AND EQUIPMENT
PROPERTY, PLANT AND EQUIPMENT	NOTE 10 — PROPERTY, PLANT AND EQUIPMENT a) Summary of changes in property, plant and equipment: Property, plant and Machines, equipment, Data electronic equipment under Land and buildings and installations equipment construction Other Total Cost of the property, plant, and equipment Balances as of January 01, 2016 10,842,802 32,616,700 939,266 4,068,876 1,470,485 49,938,129 Additions 35,238 93,290 2,126 1,117,317 75,920 1,323,891 Capitalized interest — — — 187,375 — 187,375 Transfers 584,575 2,665,898 74,804 (3,314,746) (10,531) — Disposals (81,256) (271,104) (60,542) (1,550) (46,888) (461,340) Effect of selling of subsidiary (1,011,492) (1,726,440) (112,319) (53,630) (52,281) (2,956,162) Impairment (52,071) (183,788) (228) — (3,242) (239,329) Foreign exchange effect (834,043) (2,560,676) (81,033) (240,994) (74,219) (3,790,965) Balances as of December 31, 2016 9,483,753 30,633,880 762,074 1,762,648 1,359,244 44,001,599 Additions 2,028 124,136 1,770 687,019 58,376 873,329 Capitalized interest — — — 44,260 — 44,260 Transfers 700,318 716,685 19,340 (1,440,183) 3,840 — Disposals (157,625) (232,771) (12,963) (60,151) (49,962) (513,472) Loss of control by selling of subsidiary (119,928) (900,840) (16,426) (1,382) (53,129) (1,091,705) Impairment (10,063) (255,293) — — (13) (265,369) Transfer to assets held for sale (1,013,466) (2,734,923) (53,315) (107,677) (171,404) (4,080,785) Foreign exchange effect 200,681 665,730 11,158 66,146 28,745 972,460 Balances as of December 31, 2017 9,085,698 28,016,604 711,638 950,680 1,175,697 39,940,317 Additions 13,739 66,764 11,811 983,519 119,101 1,194,934 Capitalized interest — — — 23,999 — 23,999 Transfers 140,334 802,664 457 (949,888) 6,433 — Disposals (45,290) (285,860) (5,641) (3,352) (9,606) (349,749) Transfer to assets held for sale (784,464) (749,425) (14,914) (49,579) (300,618) (1,899,000) Effects of IAS 29 adoption — 699,724 — — — 699,724 Foreign exchange effect 290,732 1,058,527 49,727 65,868 (2,895) 1,461,959 Balances as of December 31, 2018 8,700,749 29,608,998 753,078 1,021,247 988,112 41,072,184 Property, plant and Machines, equipment, Data electronic equipment under Land and buildings and installations equipment construction Other Total Accumulated depreciation Balances as of January 01, 2016 (4,387,719) (21,415,018) (827,620) — (523,446) (27,153,803) Depreciation (334,365) (1,738,759) (44,437) — (100,259) (2,217,820) Transfers (12,015) (2,368) 968 — 13,415 — Disposals 14,696 243,429 56,466 — 31,589 346,180 Loss of control by selling of subsidiary 524,209 1,515,886 95,809 — 37,965 2,173,869 Foreign exchange effect 296,523 1,792,251 69,172 — 43,920 2,201,866 Balances as of December 31, 2016 (3,898,671) (19,604,579) (649,642) — (496,816) (24,649,708) Depreciation (343,373) (1,361,561) (40,915) — (61,506) (1,807,355) Transfers (38,467) 25,886 (400) — 12,981 — Disposals 67,598 218,590 12,790 — 43,067 342,045 Loss of control by selling of subsidiary 28,691 589,951 12,627 — 41,117 672,386 Transfer to assets held for sale 370,727 1,989,917 54,275 — 95,350 2,510,269 Foreign exchange effect (101,528) (435,040) (10,969) — (16,675) (564,212) Balances as of December 31, 2017 (3,915,023) (18,576,836) (622,234) — (382,482) (23,496,575) Depreciation (291,315) (1,128,138) (34,814) — (130,611) (1,584,878) Transfers 18,341 5,234 158 — (23,733) — Disposals 29,944 258,609 2,609 — 7,970 299,132 Transfer to assets held for sale 105,787 286,204 11,667 — 234,271 637,929 Effects of IAS 29 adoption — (265,654) — — — (265,654) Foreign exchange effect (129,539) (946,240) (44,332) — 4,454 (1,115,657) Balances as of December 31, 2018 (4,181,805) (20,366,821) (686,946) — (290,131) (25,525,703) Net property, plant and equipment Balances as of December 31, 2016 5,585,082 11,029,301 112,432 1,762,648 862,428 19,351,891 Balances as of December 31, 2017 5,170,675 9,439,768 89,404 950,680 793,215 16,443,742 Balances as of December 31, 2018 4,518,944 9,242,177 66,132 1,021,247 697,981 15,546,481 The average rate of capitalized interest in 2018 was 5.7% (6.6% in 2017 and 6.6% in 2016). The following useful lives are used to calculate depreciation: Useful lives of property, plant and equipment Buildings 20 to 33 years Machines, equipment, and installations 10 to 20 years Furniture and fixture 5 to 10 years Vehicles 3 to 5 years Data electronic equipment 2.5 to 6 years b) Guarantees — property, plant and equipment have been pledged as collateral for loans and financing in the amount of R$ 90,463 as of December 31, 2018 (R$ 609,116 and R$ 632,376 as of December 31, 2017 and 2016, respectively). c) Impairment of property, plant and equipment — At December 31, 2018, the carrying amount of items of property, plant and equipment for which an impairment loss has been recognized up to current year is R$ 126,790 for land, buildings and construction (R$ 118,348 as of December 31, 2017), R$ 569,303 for machines, equipment and installations (R$ 783,183 as of December 31, 2017), R$ 543,726 for Property, plant and equipment under construction (R$ 543,726 as of December 31, 2017). According to note 3.4, the Company deconsolidated subsidiaries and the amounts above contemplate these effects.

GOODWILL

GOODWILL	12 Months Ended
GOODWILL	Dec. 31, 2018
GOODWILL
GOODWILL	NOTE 11 — GOODWILL The changes in goodwill are as follows: Accumulated Goodwill after Goodwill impairment losses Impairment losses Balance as of January 1, 2016 18,099,186 (2,974,756) 15,124,430 (+/-) Foreign exchange effect (2,645,368) 63,516 (2,581,852) (-) Impairment — (2,678,582) (2,678,582) (-) Effect of selling of subsidiary (393,980) — (393,980) Balance as of December 31, 2016 15,059,838 (5,589,822) 9,470,016 (+/-) Foreign exchange effect 242,510 (169,979) 72,531 (-) Impairment — (849,438) (849,438) (-) Transfer to assets held for sale (801,967) — (801,967) Balance as of December 31, 2017 14,500,381 (6,609,239) 7,891,142 (+/-) Foreign exchange effect 2,283,577 (1,062,329) 1,221,248 Balance as of December 31, 2018 16,783,958 (7,671,568) 9,112,390 The amounts of goodwill by segment are as follows: 2018 2017 2016 Brazil 373,135 373,135 380,644 Special Steel 2,854,888 2,487,364 2,508,056 North America 5,884,367 5,030,643 6,581,316 9,112,390 7,891,142 9,470,016

INTANGIBLE ASSETS

INTANGIBLE ASSETS	12 Months Ended
INTANGIBLE ASSETS	Dec. 31, 2018
INTANGIBLE ASSETS
INTANGIBLE ASSETS	NOTE 12 — INTANGIBLE ASSETS Intangible assets consist mainly of relationships recognized upon business combinations and software development, with application in the management of the business: Customer Supplier Software contracts and relationships development relationships Others Total Balance as of January 01, 2016 47,571 808,482 911,483 68,225 1,835,761 Foreign exchange effect — (60,464) (140,812) (7,509) (208,785) Acquisition — 40,643 — 13,401 54,044 Disposal — (2,145) — (13,050) (15,195) Amortization (7,845) (149,911) (155,063) (5,316) (318,135) (-) Effect of selling of subsidiary — — — (27,749) (27,749) Balance as of December 31, 2016 39,726 636,605 615,608 28,002 1,319,941 Foreign exchange effect — 2,947 3,835 884 7,666 Acquisition — 37,939 — — 37,939 Disposal — — (27,652) — (27,652) Amortization (6,940) (149,150) (125,621) (3,486) (285,197) (-) Assets held for sale — (37,512) (25,396) (17,700) (80,608) Balance as of December 31, 2017 32,786 490,829 440,774 7,700 972,089 Foreign exchange effect — 28,598 77,593 1,243 107,434 Acquisition — 67,388 — — 67,388 Disposal — (3,791) (88) — (3,879) Amortization (6,067) (167,384) (130,980) (2,505) (306,936) Balance as of December 31, 2018 26,719 415,640 387,299 6,438 836,096 Estimated useful lives 5 to 20 years 7 years 5 to 20 years 5 years The composition of other intangible assets by segment is as follows: 2018 2017 2016 Brazil 295,107 351,578 412,134 Special Steel 136,910 152,640 219,878 South America 1,441 1,863 7,606 North America 402,638 466,008 680,323 836,096 972,089 1,319,941

LOANS AND FINANCING

LOANS AND FINANCING	12 Months Ended
LOANS AND FINANCING	Dec. 31, 2018
LOANS AND FINANCING
LOANS AND FINANCING	NOTE 13 — LOANS AND FINANCING Loans and financing are as follows: Annual charges () 2018 2017 Working capital 2,424,246 2,739,258 Financing of property, plant and equipment and others 1,205,281 2,108,216 Ten/Thirty Year Bonds 9,738,314 11,614,182 Total Loans and Financing 13,367,841 16,461,656 Current 1,822,183 2,004,341 Non-current 11,545,658 14,457,315 Principal amount of loans and Financing 13,178,457 16,207,120 Interest accrued of loans and Financing 189,384 254,536 Total of Debts 13,367,841 16,461,656 () Loans and financing denominated in Brazilian reais are indexed to the TJLP (long-term interest rate, CDI (Interbank Deposit Certificate), or by the IGP-M (general market price index) and IPCA (Amplified Consumer Price). Summary of loans and financing by currency: 2018 2017 Brazilian Real (BRL) 2,361,610 2,710,308 U.S. Dollar (USD) 10,924,355 13,333,669 Other currencies 81,876 417,679 13,367,841 16,461,656 The amortization schedules of long term loans and financing are as follows: 2018 2017 2019 — 873,274 2020 2,253,958 3,158,211 2021 1,199,045 1,730,177 2022 121,490 147,715 2023 1,209,109 1,296,597 2024 after 6,762,056 7,251,341 11,545,658 14,457,315 a) Main funding in 2018 In March 2018, the subsidiary Gerdau Açominas obtained a loan of R$ 400 million from Banco do Brasil, maturing on April 28, 2019 and clause of export verification obligations. In April 2018, the subsidiaries Gerdau Açominas S.A. and Gerdau Aços Longos S.A. obtained a loan of R$ 400 million from Citibank S.A. with guarantee from Gerdau S.A. and maturing on April 15, 2019. b) Monitoring Index Only operations with BNDES contemplate monitoring of the Company's indebtedness indexes (covenants) established in the agreement. In a possible breakdown of the indicator in the annual measurement, the Company would enter into a remediation period and a subsequent renegotiation of guarantees, and it is not an event of a default. c) Guarantees All loans contracted under the FINAME/BNDES program, totaling R$ 90.5 million on December 31, 2018, are guaranteed by the assets being financed. d) Credit Lines In June 2009, the Company and some of its subsidiaries in Brazil, obtained a pre-approved credit line with BNDES in the total amount of R$ 1.5 billion to be used for the revamp and modernization of several areas, an increase in the production capacity of certain product lines, investment in logistics and energy generation, and also environmental and sustainability projects. The funds are made available at the time each subsidiary starts its specific investment and presents to BNDES the evidence of the investment made. The interest rate for this credit line is determined at the time of each disbursement, and is composed by indexes linked to of TJLP + 2.16% p.a. As of December 31, 2018, the outstanding balance of this credit facility was R$ 253.7 million. In October 2017, the Company completed the renewal and reduction of the volume of the Senior Unsecured Global Working Capital Credit Agreement, a US$ 800 million (equivalent to R$ 3,100 million) revolving credit line to provide liquidity to its subsidiaries. The line is divided into two tranches, of which US$ 200 million (equivalent to R$ 775 million) is allocated to North American subsidiaries and US$ 600 million (equivalent to R$ 2,325 million) to subsidiaries in Latin America, including Brazil. The companies Gerdau S.A., Gerdau Açominas SA and Gerdau Aços Longos SA provide a guarantee and the operation expires in October 2020. As of December 31, 2018, the amount disbursed in this line was US$ 50 million (R$ 193.7 million as of December, 31, 2018).

DEBENTURES

DEBENTURES	12 Months Ended
DEBENTURES	Dec. 31, 2018
DEBENTURES
DEBENTURES	NOTE 14 — DEBENTURES General Quantity as of December 31, 2018 Issuance Meeting Issued Held in treasury Maturity 2018 2017 3rd- A and B May 27,1982 141,144 06/01/2021 18,871 21,377 7th July 14, 1982 68,271 07/01/2022 1,102 1,333 8th November 11, 1982 178,516 05/02/2023 8,080 14,557 9th June 10, 1983 125,365 09/01/2024 2,349 4,900 11th - A and B June 29, 1990 149,294 06/01/2020 5,716 5,761 15th November 09, 2018 — 11/21/2022 1,502,755 — Total Consolidated 1,538,873 47,928 Current 2,755 — Non-current 1,536,118 47,928 The amortization schedules of long term are as follows: 2018 2017 2020 5,716 5,761 2021 18,871 21,377 2022 1,501,102 1,333 2023 8,080 14,557 2024 on 2,349 4,900 1,536,118 47,928 15ª Issuance of Debentures: The Board of Directors Meeting held on November 9, 2018 approved the 15 th issuance of Simple Debentures and non-convertible into shares, in a Single Series. The value of the Issuance, subscribed and paid-in, was R$ 1.5 billion, represented by 1,500,000 debentures, with a par value of R$ 1,000.00, and the net proceeds were used to reinforce cash, with the objective of meet ordinary management business. Debentures are denominated in Brazilian reais, they are not convertible into shares and have variable interest at a percentage of the CDI (Interbank Deposit Rate). The nominal annual interest rate was 6.42% and 9.93% as of December 31, 2018 and December 31, 2017, respectively. The Company has guarantees provided by parent entity for debentures of the 7ª, 8ª, 9ª and 11ª issuances.

FINANCIAL INSTRUMENTS

FINANCIAL INSTRUMENTS	12 Months Ended
FINANCIAL INSTRUMENTS	Dec. 31, 2018
FINANCIAL INSTRUMENTS
FINANCIAL INSTRUMENTS	NOTE 15 — FINANCIAL INSTRUMENTS a) General considerations - Gerdau S.A. and its subsidiaries enter into transactions with financial instruments whose risks are managed by means of strategies and exposure limit controls. All financial instruments are recorded in the accounting books and presented as short-term investments, loans and financing, debentures, related-party transactions, unrealized gains on derivatives, unrealized losses on derivatives, obligations with FIDC, other current assets, other non-current assets, other current liabilities and other non-current liabilities. The Company has derivatives and non-derivative instruments, such as the hedge for some operations under hedge accounting. These operations are non-speculative in nature and are intended to protect the company against exchange rate fluctuations on foreign currency loans and against interest rate fluctuations. b) Market value — the market value of the aforementioned financial instruments is as follows: 2018 2017 Book Fair Book Fair value value value value Assets Short-term investments 459,470 459,470 821,518 821,518 Related parties 27,939 27,939 51,839 51,839 Unrealized gains on derivatives 33,417 33,417 — — Other current assets 780,423 780,423 469,737 469,737 Other non-current assets 449,592 449,592 542,973 542,973 Liabilities Loans and Financing 13,367,841 13,533,306 16,461,656 17,102,512 Debentures 1,538,873 1,538,873 47,928 47,928 Related parties 1,350 1,350 — — Unrealized losses on financial instruments 5,245 5,245 1,267 1,267 Obligations with FIDC 938,526 938,526 1,135,077 1,135,077 Other current liabilities 988,967 988,967 625,410 625,410 Other non-current liabilities 499,092 499,092 653,670 653,670 The fair values of Loans and Financing are based on market premises, which may take into consideration discounted cash flows using equivalent market rates and credit rating. All other financial instruments, which are recognized in the Consolidated Financial Statements at their carrying amount, are substantially similar to those that would be obtained if they were traded in the market. However, because there is no active market for these instruments, differences could exist if they were settled in advance. The fair value hierarchy of the financial instruments above are presented in Note 15.g. c) Risk factors that could affect the Company’s and its subsidiaries’ businesses: Price risk of commodities: this risk is related to the possibility of changes in prices of the products sold by the Company or in prices of raw materials and other inputs used in the productive process. Since the Company operates in a commodity market, net sales and cost of sales may be affected by changes in the international prices of their products or materials. In order to minimize this risk, the Company constantly monitors the price variations in the domestic and international markets. Interest rate risk: this risk arises from the possibility of losses (or gains) due to fluctuations in interest rates applied to the Company’s financial liabilities or assets and future cash flows and income. The Company evaluates its exposure to these risks: (i) comparing financial assets and liabilities denominated at fixed and floating interest rates and (ii) monitoring the variations of interest rates like Libor and CDI. Accordingly, the Company may enter into interest rate swaps in order to reduce this risk. Exchange rate risk: this risk is related to the possibility of fluctuations in exchange rates affecting the amounts of financial assets or liabilities or of future cash flows and income. The Company assesses its exposure to the exchange rate by measuring the difference between the amount of its assets and liabilities in foreign currency. The Company understands that the accounts receivables originated from exports, its cash and cash equivalents denominated in foreign currencies and its investments abroad are more than equivalent to its liabilities denominated in foreign currency. Since the management of these exposures occurs at each operation level, if there is a mismatch between assets and liabilities denominated in foreign currency, the Company may employ derivative financial instruments in order to mitigate the effect of exchange rate fluctuations. Credit risk: this risk arises from the possibility of the company not receiving amounts arising from sales to customers or investments made with financial institutions. In order to minimize this risk, the company adopt the procedure of analyzing in details of the financial position of their customers, establishing a credit limit and constantly monitoring their balances. If customers are classified by an independent agency, these ratings are used. If an independent assessment is not available, the Company’s credit area provides a credit rating assessment, taking into consideration its financial position, past experience and other factors. Regarding cash investments, the Company invests solely in financial institutions with low credit risk, as assessed by rating agencies. In addition, each financial institution has a maximum limit for investment, determined by the Company's Credit Committee. Capital management risk: this risk comes from the Company’s choice in adopting a financing structure for its operations. The Company manages its capital structure, which consists of a ratio between the financial debts and its own capital (Equity) based on internal policies and benchmarks. The level of financial leverage is defined by the Net Debt to Adjusted EBITDA indicator. Net Debt consists of debt reduced by cash, cash equivalents and financial investments (notes 4, 13 and 14). Another recently added key indicator is the maximum Gross Debt value that works with the objective of limiting indebtedness at different times in the financial cycle. The Company can change its capital structure, according to economic-financial conditions, in order to optimize its financial leverage and its debt management. At the same time, the Company seeks to improve its ROCE (Return on Capital Employed) through the implementation of working capital management and an efficient investment program in property, plant and equipment. In the long term, the Company seeks to remain within the parameters below, admitting occasional variations in the short term: Net debt/Adjusted EBITDA From 1.0 to 1.5 times Gross debt limit R$ 12 billion Average maturity more than 6 years These key indicators are used to monitor objectives described above and may not necessarily be used as indicators for other purposes, such as impairment tests. Liquidity risk: the Company’s management policy of indebtedness and cash on hand is based on using the committed lines and the currently available credit lines with or without a guarantee in export receivables for maintaining adequate levels of short, medium, and long-term liquidity. The maturity of long-term loans and financing, and debentures are presented in Notes 13 and 14, respectively. 2018 Contractual obligations Total Less than 1 year 1-3 years 4-5 years More than 5 years Trade accounts payable 4,335,054 4,335,054 — — — Loans and financings 20,613,734 2,817,346 5,053,827 2,509,962 10,232,599 Debentures 1,940,474 104,995 231,817 1,600,632 3,030 Unrealized losses on financial instruments 5,245 5,245 — — — Obligations with FIDC 938,526 — 827,137 111,389 — Other current liabilities 988,967 988,967 — — — Other non-current liabilities 499,092 — 13,295 — 485,797 29,321,092 8,251,607 6,126,076 4,221,983 10,721,426 2017 Contractual obligations Total Less than 1 year 1-3 years 4-5 years More than 5 years Trade accounts payable 3,179,954 3,179,954 — — — Loans and financings 24,470,751 3,191,793 6,060,187 3,168,144 12,050,627 Debentures 59,128 — 6,528 40,289 12,311 Unrealized losses on financial instruments 1,267 1,267 — — — Obligations with FIDC 1,135,077 — — — 1,135,077 Other current liabilities 625,410 625,410 — — — Other non-current liabilities 653,670 — 13,209 — 640,461 30,125,257 6,998,424 6,079,924 3,208,433 13,838,476 Sensitivity analysis: The Company performed a sensitivity analysis, which can be summarized as follows (assuming that other variables remain constant): Impacts on Statements of Income Assumptions Percentage of change 2018 2017 Foreign currency sensitivity analysis 113,445 129,209 Interest rate sensitivity analysis 10 bps 55,959 54,908 Sensitivity analysis of changes in prices of products sold 461,595 369,176 Sensitivity analysis of changes in raw material and commodity prices 296,234 234,239 Sensitivity analysis of interest rate and foreign currency swaps 10 bps/5% 11,073 6,479 Sensitivity analysis of Swap of interest rate 50bps 476 — Sensitivity analysis of NDF (Non Deliverable Forwards) 7,063 1,480 Foreign currency sensitivity analysis: As of December 31, 2018, the Company is mainly exposed to variations between the Real and the Dollar. The sensitivity analysis carried out by the Company considers the effects of a 5% increase or reduction between the Real and the Dollar in its non-hedged debt. In this analysis, if the Real appreciates against the Dollar, this would represent a gain of R$ 113,445 and R$ 74,457 after the effects arising from the changes in the net investment hedge described in note 15.g- (R$ 129,209 and R$ 79,088 as of December 31, 2017, respectively). If the Real depreciates against the Dollar this would represent an expense of the same value. Due to the investment hedge, the variations are minimized when the exchange variation accounts and income tax are analyzed. The net amounts of trade accounts receivable and trade accounts payable denominated in foreign currency do not represent any relevant risk in the case of any fluctuation of exchange rates. Interest rate sensitivity analysis: The interest rate sensitivity analysis made by the Company considers the effects of an increase or reduction of 10 basis point (bps) on the average interest rate applicable to the floating part of its debt. The calculated impact, considering this variation in the interest rate totals R$ 55,959 as of December 31, 2018 (R$ 54,908 as of December 31, 2017) and would impact the Financial expenses account in the Consolidated Statements of Income. The specific interest rates to which the Company is exposed are related to the loans, financing, and debentures presented in Notes 13 and 14, and are mainly comprised by Libor and CDI — Interbank Deposit Certificate. Sensitivity analysis of changes in sales price of products and price of raw materials and other inputs used in production: the Company is exposed to changes in the price of its products. This exposure is associated with the fluctuation of the sale price of the Company’s products and the price of raw materials and other inputs used in the production process, mainly for operating in a commodity market. The sensitivity analysis made by the Company considers the effects of an increase or of a reduction of 1% on both prices. The impact measured considering this variation in the price of products sold, considering the revenues and costs of the year ended on December 31, 2018, totals R$ 461,595 (R$ 369,176 as of December 31, 2017) and the variation in the price of raw materials and other inputs totals R$ 296,334 as of December 31, 2018 (R$ 234,239 as of December 31, 2017). The impact in the price of products sold and raw materials would be recorded in the accounts Net Sales and Cost of Sales, respectively, in the Consolidated Statements of Income. The Company does not expect to be more vulnerable to a change in one or more specific product or raw material. Sensitivity analysis of interest rate and foreign currency swaps: the Company has exposure to interest rate swaps for some of its loans and financing. The sensitivity analysis calculated by the Company considers the effects of either an increase or a decrease of 10 bps in the interest curve and of 5% in the exchange rate, and its impacts in the swaps mark to market for Cross Currency Swap operations, and 50 bps on the interest curve for Pre x DI operations. These variations represent an income or expense of R$ 11,549 (R$ 6,479 as of December 31, 2017). These effects would be recognized in the statement of comprehensive income. The interest rate swaps to which the Company is exposed to are presented in note 15.e. Sensitivity analysis of forward contracts in US Dollar: the Company has exposure to forward contracts for some of its assets and liabilities. The sensitivity analysis carried out by the Company considers the effects of a 5% increase or reduction of the US Dollar against the Argentinian Peso, and its effects on fair value of these derivatives. A 5% increase in the US Dollar against the Argentinian Peso represents an income of R$ 7,063 (income or expense of R$ 1,480 as of December 31, 2017, considering that in this position we had operations of the Dollar against Real and Argentinian Peso), and a 5% reduction of the US Dollar against the Real and Argentinian Peso represents an expense of the same amount. The US Dollar / Real and US Dollar / Argentinian Peso forward contracts had the objective of hedging the asset and liability positions in US Dollar and the fair value effects of these contracts were recorded in the Consolidated Income Statement. The forward contracts in US Dollars that the Company is exposed are presented in Note 15.e. d) Financial Instruments per Category Summary of the financial instruments per category: Financial asset at fair Financial asset at fair 2018 Financial asset at value through profit or value through other Assets amortized cost loss comprehensive income Total Short-term investments — 459,470 — 459,470 Unrealized gains on financial instruments — — 33,417 33,417 Related parties 27,939 — — 27,939 Other current assets 780,423 — — 780,423 Other non-current assets 449,592 — — 449,592 Total 1,257,954 459,470 33,417 1,750,841 Financial income 629,750 115,081 — 744,831 Financial liability at fair value through profit or Financial liability at Liabilities loss amortized cost Total Loans and financings — 13,367,841 13,367,841 Debentures — 1,538,873 1,538,873 Related parties — 1,350 1,350 Obligations with FIDC — 938,526 938,526 Other current liabilities — 988,967 988,967 Other non-current liabilities — 499,092 499,092 Unrealized losses on financial instruments 5,245 — 5,245 Total 5,245 17,334,649 17,339,894 Financial income (expenses) (17,484) (2,617,142) (2,634,626) Assets at fair value with 2017 gains and losses Assets Loans and receivables recognized in income Total Short-term investments — 821,518 821,518 Related parties 51,839 — 51,839 Other current assets 469,737 — 469,737 Other non-current assets 462,735 80,238 542,973 Total 984,311 901,756 1,886,067 Financial income 177,466 87,242 264,708 Liabilities at market value with gains and Other financial losses recognized in liabilities at amortized Liabilities income cost Total Loans and financings — 16,461,656 16,461,656 Debentures — 47,928 47,928 Obligations with FIDC — 1,135,077 1,135,077 Other current liabilities — 625,410 625,410 Other non-current liabilities — 653,670 653,670 Unrealized losses on financial instruments 1,267 — 1,267 Total 1,267 18,923,741 18,925,008 Financial income (expenses) (12,503) (1,395,553) (1,408,056) As of December 31, 2018, the Company has derivative financial instruments such as interest rate swaps and forward contracts in US Dollar. Part of these instruments is classified as cash flow hedges and their effectiveness can be measured, having their unrealized losses and /or gains classified directly in Other Comprehensive Income. The other derivative financial instruments have their realized and unrealized losses and/or gains presented in the account “Gains and losses on derivatives, net” in the Consolidated Statement of Income. e) Operations with derivative financial instruments Risk management objectives and strategies: In order to execute its strategy of sustainable growth, the Company implements risk management strategies in order to mitigate market risks. The objective of derivative transactions is always related to mitigating market risks as stated in our policies and guidelines. The monitoring of the effects of these transactions is performed monthly by the Financial Risk Management Committee, which validates the mark to market of these transactions. All derivative financial instruments are recognized at fair value in the Consolidated Financial Statements of the Company. Policy for use of derivatives: The Company is exposed to various market risks, including changes in exchange rates, commodities prices and interest rates. The Company uses derivatives and other financial instruments to reduce the impact of such risks on the fair value of its assets and liabilities or in future cash flows and income. The Company has established policies to evaluate the market risks and to approve the use of derivative transactions related to these risks. The Company enters into derivative financial instruments solely to manage the market risks mentioned above and never for speculative purposes. Derivative financial instruments are used only when they have a related position (asset or liability exposure) resulting from business operations, investments and financing. Policy for determining fair value: the fair value of derivative financial instruments is determined using models and other valuation techniques, including future prices and market curves. Derivative transactions may include: interest rate and/or currency swaps, currency futures contracts and currency options contracts. Swap Contracts The Company has contracted Cross Currency Swaps operations, whether or not qualified as cash flow hedge, through which it receives a variable interest rate based on Libor and/or a fixed US dollar rate and pays a fixed interest rate or floating currency based on the local currency. The company also contracted the Pre x DI swap operation, through which it receives a fixed interest rate and pays a floating interest rate, both in local currency. The counterparties to these operations are financial institutions with low credit risk. The derivatives instruments can be summarized and categorized as follows: Notional value Amount receivable Amount payable Contracts Position 2018 2017 2018 2017 2018 2017 Forward Maturity at 2019 purchase in US$ US$ 19.2 million — — — (4,069) — Maturity at 2019 sell in US$ US$ 18.3 million — 462 — (1,176) — Cross currency swap Maturity in 2018 INR 10.17% — US$ 40.0 million — — — (1,267) Maturity in 2019 CDI 111.50% R$ 230.5 million — 30,249 — — — Swap of interest rate Maturity in 2020 CDI 111.50% R$ 50.0 million — 2,706 — — — Total fair value of financial instruments 33,417 — (5,245) (1,267) Prospective and retrospective tests demonstrated the effectiveness of these instruments. 2018 2017 Unrealized gains on financial instruments Current assets 30,711 — Non-current assets 2,706 — 33,417 — Unrealized losses on financial instruments Current liabilities (5,245) — Non-current liabilities — (1,267) — (1,267) 2018 2017 Net Income Gains on financial instruments 49,576 9,666 Losses on financial instruments (17,484) (19,107) 32,092 (9,441) Other comprehensive income Gains (Losses) on financial instruments 11,947 (11,364) 11,947 (11,364) f) Net investment hedge The Company designated as hedge of part of its net investments in subsidiaries abroad the operations of Ten/Thirty Years Bonds. As a consequence, the effect of exchange rate changes on these debts has been recognized in the Statement of Comprehensive Income. The exchange variation generated on the operations of Ten/Thirty Years Bonds in the amount of US$ 1.8 billion (designated as hedges) is recognized in the Statement of Comprehensive Income, while the exchange rate on the portion of US$ 0.3 billion (not designated as hedges) is recognized in income. Additionally, the Company opted to designate as hedge of the net investment financing operations held by the subsidiary Gerdau Açominas SA, in the amount of US$ 0.1 billion, which were made in order to provide part of the funds to purchase these investments abroad. Based on the standards related to this subject, the Company demonstrated effectiveness of the hedge as of its designation dates and demonstrated the high effectiveness of the hedge from the contracting of each debt for the acquisition of these companies abroad, whose effects were measured and recognized directly in the Statement of Comprehensive Income as an unrealized loss, net of taxes, in the amount R$ 1,491,534 for the year ended on December 31, 2018 (loss of R$ 148,560 on December 31, 2017). The objective of the hedge is to protect, during the existence of the debt, the amount of part of the Company’s investment in the subsidiaries abroad mentioned above against positive and negative changes in the exchange rate. This objective is consistent with the Company’s risk management strategy. Prospective and retrospective tests demonstrated the effectiveness of these instruments. g) Measurement of fair value: The IFRS defines fair value as the amount for which an asset could be exchanged, or a liability settled, between knowledgeable, willing parties in an arm’s length transaction. The standard also establishes a three level hierarchy for the fair value, which prioritizes information when measuring the fair value by the company, to maximize the use of observable information and minimize the use of non-observable information. This IFRS describes the three levels of information to be used to measure fair value: Level 1 - quoted prices (unadjusted) in active markets for identical assets and liabilities. Level 2 - Inputs other than quoted prices included in Level 1 available, where (unadjusted) quoted prices are for similar assets and liabilities in non-active markets, or other data that is available or may be corroborated by market data for substantially the full term of the asset or liability. Level 3 - Inputs for the asset or liability that are not based on observable market data, because market activity is insignificant or does not exist. As of December 31, 2018, the Company had some assets which the fair value measurement is required on a recurring basis. These assets include investments in private securities and derivative instruments. Financial assets and liabilities of the Company, measured at fair value on a recurring basis and subject to disclosure requirements of IFRS 7 as of December 31, 2018 and December 31, 2017, are as follows: Fair Value Measurements at Reporting Date Using Quoted Prices in Non-Active Quoted Prices Active Markets for Markets for Similar Assets Identical Assets (Level 1) (Level 2) 2018 2017 2018 2017 2018 2017 Current assets Short-term investments 459,470 821,518 114,027 238,008 345,443 583,510 Unrealized gains on financial instruments 30,711 — — — 30,711 — Other current assets 780,423 469,737 — — 780,423 469,737 Non-current assets Related parties 27,939 51,839 — — 27,939 51,839 Unrealized gains on financial instruments 2,706 — — — 2,706 — Other non-current assets 449,592 542,973 — — 449,592 542,973 1,750,841 1,886,067 114,027 238,008 1,636,814 1,648,059 Current liabilities Short-term debt 1,822,183 2,004,341 — — 1,822,183 2,004,341 Unrealized losses on financial instruments 5,245 — — — 5,245 — Other current liabilities 988,967 625,410 — — 988,967 625,410 Non-current liabilities Long-term debt 11,545,658 14,457,315 — — 11,545,658 14,457,315 Debentures 1,538,873 47,928 — — 1,538,873 47,928 Related parties 1,350 — — — 1,350 — Unrealized losses on financial instruments — 1,267 — — — 1,267 Obligations with FIDC 938,526 1,135,077 — — 938,526 1,135,077 Other non-current liabilities 499,092 653,670 — — 499,092 653,670 17,339,894 18,925,008 — — 17,339,894 18,925,008 h) Changes in liabilities from Cash flow from financing activities: As required by IAS 7, the Company has summarized below the changes in the liabilities of cash flow from financing activities, from its Statement of Cash Flows: Cash transactions Non cash transactions Exchange variation, Interest expense on operations with Interest paid loans and Interest on subsidiaries and Balances as of Proceeds/(Repayment) on loans and loans with related associate company and Balances as of December 31, 2017 from financing activities financing parties others December 31, 2018 Related parties, net (51,839) 25,755 — (545) 40 (26,589) Debt, Debentures and Losses/Gains on financial instruments, net 16,510,851 (3,439,644) (1,162,364) 1,177,686 1,825,430 14,911,959 Cash transactions Non cash transactions Exchange variation, Interest expense on operations with Interest paid loans and Interest on subsidiaries and Balances as of Proceeds/(Repayment) on loans and loans with related associate company and Balances as of December 31, 2016 from financing activities financing parties others December 31, 2017 Related parties, net (57,541) 5,797 — (95) — (51,839) Debt, Debentures and Losses/Gains on financial instruments, net 20,576,866 (3,975,541) (1,330,116) 1,323,448 (83,806) 16,510,851 Cash transactions Non cash transactions Exchange variation, Interest expense on operations with Interest paid loans and Interest on subsidiaries and Balances as of Proceeds/(Repayment) on loans and loans with related associate company and Balances as of Januray 1, 2016 from financing activities financing parties others December 31, 2016 Related parties, net (53,506) (6,492) — 2,457 — (57,541) Debt, Debentures and Losses/Gains on financial instruments, net 26,417,256 (2,150,035) (1,240,165) 1,540,797 (3,990,987) 20,576,866

TAXES PAYABLE

TAXES PAYABLE	12 Months Ended
TAXES PAYABLE	Dec. 31, 2018
TAXES PAYABLE
TAXES PAYABLE	NOTE 16 — TAXES PAYABLE 2018 2017 Payroll charges 58,907 75,752 ICMS (state VAT) 25,385 37,444 COFINS (tax on revenue) 2,162 5,411 IPI (federal VAT) 14,372 17,305 IVA (value-added tax) and others 250,719 148,189 351,545 284,101

TAX, CIVIL AND LABOR CLAIMS AND

TAX, CIVIL AND LABOR CLAIMS AND CONTINGENT ASSETS	12 Months Ended
TAX, CIVIL AND LABOR CLAIMS AND CONTINGENT ASSETS	Dec. 31, 2018
TAX, CIVIL AND LABOR CLAIMS AND CONTINGENT ASSETS
TAX, CIVIL AND LABOR CLAIMS AND CONTINGENT ASSETS	NOTE 17 — TAX, CIVIL AND LABOR CLAIMS AND CONTINGENT ASSETS The Company and its subsidiaries are party in judicial and administrative proceedings involving labor, civil and tax matters. Based on the opinion of its legal advisors, Management believes that the provisions recorded for these judicial and administrative proceedings is sufficient to cover probable and reasonably estimable losses from unfavorable court decisions, and that the final decisions will not have significant effects on the financial position, operational results and liquidity of the Company and its subsidiaries. For claims whose expected loss is considered probable, the provisions have been recorded considering the judgment of the Management of the Company with the assistance of its legal advisors and the provisions are considered sufficient to cover expected probable losses. The balances of the provisions are as follows: I) Provisions 2018 2017 a) Tax provisions 268,009 257,621 b) Labor provisions 449,350 517,329 c) Civil provisions 52,946 52,933 770,305 827,883 As the net result of the reversal of the accounting provision described below (tax provisions), related to the discussion of the exclusion of the ICMS (“Imposto sobre a circulação de Mercadorias e Serviços” – ICMS – State VAT) from the tax base for contributions to PIS (“Contribuição ao Programa de Integração Social”- PIS) and COFINS (“Contribuição para o Financiamento da Seguridade Social” - COFINS), and the recognition of other accounting provisions for the year ended on December 31, 2017, the Company recorded the amounts of R$ 929,711 on the line “Reversal of provision for tax liabilities, net” (Operating Result), and R$ 369,819, on the line “Reversal of interest on provision for tax liabilities, net” (Financial Income), in its Consolidated Statements of Income. a) Tax Provisions The Company and its subsidiaries are parties to lawsuits related to the exclusion of the ICMS from the tax base for contributions to PIS and COFINS, with respect to which the Company made judicial deposits and accounting provisions, which in turn were updated in accordance with the SELIC rate, which were referred to the unpaid amounts of PIS and COFINS since 2009, because the collection of which was fully suspended, due to the mentioned judicial deposits. On March 15, 2017, the Brazilian Federal Supreme Court (STF – Supremo Tribunal Federal) ruled on a claim related to this matter, and by 6 votes to 4, concluded: "The ICMS does not comprise the tax base for PIS and COFINS assessment purposes". The STF decision, in principle, affects all of the judicial proceedings in progress, due to its general repercussion. However, after the publication of the decision on October 02, 2017, the Attorney of the National Treasury filed an appeal, claiming that the decision of the Supreme Court was silent on certain points, and requested a modulation of the decision effects, which may limit its effects to the taxpayers. Provisions, Contingent Liabilities and Contingent Assets, a provision is recognized only when "it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation", among other requirements. On March 31, 2017 the Company, based on (i) the conclusion of this judgment by the STF in Extraordinary Appeal No. 574,706/RG with general repercussion, which ruled that the inclusion of the ICMS in the PIS and COFINS calculation tax base was unconstitutional, and (ii) the International Financial Reporting Standards (IFRS), reversed the aforementioned accounting provision, through the recognition of R$ 929,711 in the line Reversal of contingent liabilities, net (Operational result) and R$ 369,819 in the line Reversal of monetary update of contingent liabilities, net (Financial Result), in its income statement. The Company's decision is supported by the position of its legal advisors who, when reassessing the likelihood of loss in the ongoing lawsuits related to the matter, concluded that the probability of loss, as to the merits of these lawsuits, became remote as of the date of the enactment of this decision. The Company emphasizes, however, that in view of the possibility that the STF may understand that the modulation mechanism necessarily applies to its decision, and that the application of such a mechanism could limit the effects of the same, a revaluation of the risk of loss associated with the aforementioned lawsuits may be required. Accordingly, depending on the terms of the modulation, as defined by the STF, such revaluation may result in the need to record new provisions in connection with this matter in the future. The balance of judicial deposits as of December 31, 2018, in the amount of R$ 1,763,085, referring to the same discussion on the inclusion of the ICMS in the tax base of PIS and COFINS, awaits termination of the relevant lawsuits before the Brazilian courts in order to be returned to the Company. The other tax provisions refer substantially to the discussions regarding the offset of PIS credits and the incidence of PIS and COFINS on other revenues. b) Labor Provisions The Company and its subsidiaries are party to labor claims. None of these claims involves individually significant amounts and corresponds mainly to overtime pay, additional night work, hours in itinere, health hazard premium, and hazardous duty premium, indemnity for occupational accidents, occupational illness and moral damages, among others. c) Civil Provisions The Company and its subsidiaries are also a party to civil lawsuits arising in the normal course of its business, which totaled as of December 31, 2018 the amount shown as provision liabilities. The changes in the tax, labor and civil provisions are shown below: 2018 2017 2016 Balance at the beginning of the year 827,883 2,239,226 1,904,730 (+) Additions 177,684 527,543 313,246 (+) Monetary correction 85,626 77,257 178,661 (-) Reversal of contingent liabilities — (929,711) — (-) Reversal of monetary update of contingent liabilities — (369,819) — (-) Reversal of accrued amounts (319,719) (715,081) (144,025) (+) Foreign exchange effect on provisions in foreign currency (1,169) (201) (3,235) (-) Loss of control of subsidiary — (1,331) (10,151) Balance at the end of the year 770,305 827,883 2,239,226 II) Contingent liabilities for which provisions were not recorded Considering the opinion of legal advisors and management’s assessment, contingencies listed below have chance of loss considered as possible (but not likely) and due to this classification, accruals have not been made in accordance with IFRS. a) Tax contingencies a.1) The Company and its subsidiaries Gerdau Aços Longos S.A. and Gerdau Açominas S.A., have other lawsuits related to the ICMS (state VAT) which are mostly related to credit rights and rate differences, whose demands totaled R$ 613,642. a.2) The Company and certain of its subsidiaries in Brazil are parties to claims related to: (i) Imposto sobre Produtos Industrializados - IPI, substantially related to IPI credit on inputs, whose demands total the updated amount of R$ 341,659; (ii) PIS and COFINS, substantially related to non-approval of compensation of credits on inputs totaling R$ 968,047, (iii) social security contributions in the total of R$ 88,374 and (iv) other taxes , whose updated total amount is currently R$ 641,782. a.3) The Company and its subsidiary Gerdau Aços Longos SA are parties to three administrative proceedings related to Withholding Income Tax, levied on interest remitted abroad, linked to export financing formalized through "Prepayment of Exports Agreements "(PPE) or" Prepayment of Exports "(RAE), in the updated amount of R$ 410,893, of which: (i) R$ 125,365 corresponds to a lawsuit of the subsidiary Gerdau Aços Longos, which had its Voluntary Appeal judged at the first instance of the Administrative Council of Tax Appeals (CARF), which was dismissed by the quality vote, by means of the judgment published on September 3, 2018, in the face of which the Company objected Embargoes of Declaration, which awaits judgment;; (ii) R$ 132,643 corresponds to a lawsuit filed by the subsidiary Gerdau Aços Longos, which was challenged and dismissed and filed a Voluntary Appeal at the first instance of CARF, on August 28, 2018, which is pending of judgment; and; (iii) R$ 152,885, corresponds to a lawsuit filed by the Company, which was challenged and dismissed and filed a Voluntary Appeal at the first instance of CARF, on August 31, 2018, which is pending of judgment. a.4) The Company (as successor of Gerdau Aços Especiais S.A.) and its subsidiary Gerdau Internacional Empreendimentos Ltda. are parties to administrative and judicial proceedings relating to IRPJ — Corporate Income Tax and CSLL — Social Contribution Tax, in the current amount of R$ 1,200,672. Such proceedings relate to profits generated abroad, of which (i) R$ 1,023,337 correspond to two lawsuits of the subsidiary Gerdau Internacional Empreendimentos Ltda., of which (i.a) R$ 988,819 correspond to a lawsuit whose administrative discussion has already been closed and are currently in Fiscal Execution, in relation to which the Company filed Execution Embargoes, which are pending of judgment by the first instance and (i.b) R$ 34,518 are remaining from a notice originally of R$ 372,213 and correspond to a suit partially provided by the Superior Court of Tax Appeals (CSRF), in a decision published on May 25, 2017 and has already become final; currently the process is awaiting proceedings by the first instance of the Administrative Council of Tax Appeals (CARF), for analysis of matters not previously analyzed, as determined by the CSRF decision; and (ii) R $ 177,335 corresponds to a lawsuit filed by the Company, which had its Voluntary Appeal adjudicated by the first instance of CARF, which was dismissed, reason why a Special Appeal was filed with the Superior Court of Tax Appeals (CSRF), known in part and pending of judgment. a.5) The Company (as successor of Gerdau Aços Especiais S.A.) and its subsidiaries Gerdau Aços Longos S.A. and Gerdau Açominas S.A. are parties to administrative proceedings relating to the disallowance of the deductibility of goodwill generated in accordance with Article 7 and 8 of Law 9,532/97 — as a result of a corporate restructuring carried out in 2004/2005 — from the tax base of the Corporate Income tax - IRPJ and Social Contribution on Net Income - CSLL. The total updated amount of the proceedings is R$ 7,062,878, of which (i) R$ 5,128,470 correspond to four proceedings involving the Company and its subsidiaries Gerdau Aços Longos S.A. and Gerdau Açominas S.A., for which administrative discussions already ended and are currently in the judicial collection stage; and the Companies obtained injunctive relief to permit it to offer a judicial guarantee using a liability insurance policy, for judicial discussions on Embargoes to Execution in the respective proceedings, and in the Embargoes to Execution filed by the Company (as successor of Gerdau Aços Especiais S.A.), on May 17, 2018, a judgment was rendered dismissing the fiscal launch, in the face of which the National Treasury filed an appeal, which is pending of judgment in the Federal Regional Court of the 4 th Region; (ii) R$ 629,753 correspond to a lawsuit filed by the subsidiary Gerdau Aços Longos SA, which had its Voluntary Appeal judged at the first instance of CARF on September 18, 2018, which was given partial relief and it is pending of publication of the judgment, in the light of which the Company will take the appropriate measures; (iii) R$ 255,531 correspond to a lawsuit filed by the subsidiary Gerdau Aços Longos SA, which had a Voluntary Appeal rejected by the first instance of CARF, which is why a Special Appeal was filed in the CSRF, which was partially dispatched by an order of which it became aware on July 6, 2018 and in the face of which it filed Regimental Grievance, which is awaiting judgment; (iv) R$ 297,033 correspond to a lawsuit filed by the subsidiary Gerdau Aços Longos SA, which had its Voluntary Appeal rejected, reason for which was filed a Special Appeal, which was given partial follow-up; currently, the company awaits judgment of its Special Appeal in so far as it is known and awaits collection of the amounts corresponding to the part in which its Special Appeal was not known, in order to adopt the appropriate judicial measures; (v) R$ 128,404 correspond to a lawsuit filed by the Company (as successor to Gerdau Aços Especiais SA), which had its Voluntary Appeal rejected by the first instance of CARF, which is why a Special Appeal was filed, by an order of which it became aware on September 12, 2018 and in the face of which it filed a regimental grievance that awaits judgment; (vi) R$ 100,686 corresponds to a lawsuit filed by the Company (as successor to Gerdau Aços Especiais SA), which was rejected as unfounded, by decision of which it became aware on September 17, 2018 and in the face of which it filed Voluntary Appeal in the first instance of CARF, currently pending of judgment; and (vii) R$ 522,731 correspond to a lawsuit filed by the subsidiary Gerdau Aços Longos S.A., which was challenged as unfounded, by decision of which it became aware on November 27, 2018 and in the face of which it filed a Voluntary Appeal at the first instance of CARF, which is currently pending of judgment. The Company, supported by the advise of its legal counsel, understand that the procedures adopted by the Company with respect to the tax treatment of profits abroad and the deductibility of goodwill were strictly legal, and, therefore, the likelihood of loss with respect to said proceedings is possible (but not likely). In connection with the so-called Operation Zelotes and other matters, Brazilian federal authorities and the judiciary branch are investigating certain issues relating to CARF proceedings, as well as specific political contributions made by the Company, with the purpose of determining whether the Company engaged in any illegal conduct. The Company previously disclosed that, in addition to its interactions with Brazilian authorities, the Company was providing information requested by the U.S. Securities and Exchange Commission (“SEC”). The Company has since been informed by the SEC’s staff that it has closed its inquiry and therefore is not seeking any further information from the Company regarding these matters. The Company believes it is not possible at this time to predict the term or outcome of the proceedings in Brazil, and that there currently is not enough information to determine whether a provision for losses is required or any additional disclosures. Furthermore, as previously disclosed, the Company retained outside counsel, reporting to a Special Committee of the Board of Directors, to investigate certain matters relating to CARF proceedings and ultimately political donations by Company entities. That investigation by outside counsel has now been concluded and its results have been reported to the Board of Directors and the SEC. b) Civil contingencies b.1) A lawsuit arising from the request by two civil construction unions in the state of São Paulo alleging that Gerdau S.A. and other long steel producers in Brazil share customers, thus, violating the antitrust legislation. After investigations carried out by the Economic Law Department (SDE – Secretaria de Direito Econômico), the final opinion was that a cartel exists. The lawsuit was therefore forwarded to the Administrative Council for Economic Defense (CADE) for judgment, which resulted in a fine to the Company and other long steel producers, on September 23, 2005, an amount equivalent to 7% of gross revenues in the year before the Administrative Proceeding was commenced, excluding taxes (fine of R$ 245,070, updated by the judicial accountant on August 01, 2013 to R$ 417,820). Two lawsuits challenge the investigation conducted by the Competition Defense System and its merits judgment, whose grounds are procedural irregularities, especially the production of evidence, based on an economic study, to prove the inexistence of a cartel. The Court, upon offer of bank guarantee letter, granted the suspension of the effects of CADE’s decision. Sentences were handed down for the dismissal of the actions and both are found in appeal phase. With respect to the first lawsuit, filed in 2003, in which irregularities are questioned in the administrative proceeding, the Federal Regional Court of the first Region rendered an unfavorable decision to the Company. Against this decision, appeals were directed to the Superior Court of Justice and to the Federal Supreme Court, which are still awaiting admissibility analysis by the Court. With regard to the second lawsuit, filed in 2006, in which the nullity of the CADE judgment is questioned, the Federal Regional Court of the first Region issued a recent unfavorable decision to the Company. Due to procedural defect and omission in the respective judgment, there were opposing Embargoes of Declaration, which are still awaiting judgment by the Federal Regional Court of the first Region. Regardless of the result of its resources, the Company will continue to seek all legal remedies to defend its rights. The Company denies having been engaged in any type of anti-competitive conduct and believes based on information available, including the opinion of its legal counsel, that it is possible that the decision will be reverted. b.2) The Company and its subsidiaries are parties to other demands of a civil nature that collectively have a discussion amount of approximately R$ 234,626. For these demands, no accounting provision was recorded, since they were considered as possible losses, based on the opinion of its legal advisors. c) Administrative proceeding – Brazilian Securities Commission (CVM) On July 14, 2015, the Company acquired non-controlling interests in the following companies: Gerdau Aços Longos S.A. (4.77%), Gerdau Açominas S.A. (3.50%), Gerdau Aços Especiais S.A. (2.39%) and Gerdau América Latina Participações S.A. (4.90%), having as counterparties Itaú Unibanco S.A. and ArcelorMittal Netherlands BV. This transaction was approved by the Board of Directors of Gerdau S.A. by unanimous vote of the directors on July 13, 2015, based on the market opportunity and the analysis that the prices were appropriate considering: economic evaluations conducted by independent report, the financial instruments used, the payment terms, capturing value through a more concentrated cash flow and long-term vision for the Company. The Company, in compliance with CVM requests for the clarification on the acquisition, disclosed that the decision to its acquisition had exclusively business purpose and was duly considered and unanimously approved by the Board of Directors. The terms and conditions for the acquisition considered long-term market prospects. On October 21, 2016, Metalúrgica Gerdau S.A. and certain directors and former directors of Gerdau S.A. filed a defense for the administrative proceeding brought by CVM on the acquisition of non-controlling interests in the subsidiaries, in the sense that the operation was businesslike justified, as above stated. There is no estimate for a final decision of the matter. Metalúrgica Gerdau S.A. believes that, currently, there is not enough information to disclose or determine if a provision for losses is required. III) Judicial deposits The Company has judicial deposits related to tax, labor and civil lawsuits as listed below: 2018 2017 Tax 1,963,859 1,883,562 Labor 126,620 128,849 Civil 44,935 38,770 2,135,414 2,051,181 IV) Contingent Asset - Eletrobrás Compulsory Loan — Centrais Elétricas Brasileiras S.A. (Eletrobrás) The Compulsory Loan, instituted by the Brazilian government in order to expand and improve the energy sector of the country was charged and collected from industrial consumers with monthly consumption equal or greater than to 2000kwh through the “electricity bills” issued by the electric power distribution companies, was converted into credits to the taxpayers based on the annual value of these contributions made between 1977 and 1993. The legislation sets a maximum 20 years period to return the compulsory loan to the taxpayers, providing Eletrobrás the possibility of anticipating this return through the conversion of those loans in shares of its own issuance. Prior to the conversion of the credits into shares, those credits were monetary corrected through an indexer and quantifier, called Standard Unit (SU). However, the compulsory loan was charged to the companies in their monthly electricity bills, consolidated during the year, and only indexed by the SU in January of the following year, resulting in a lack of monthly monetary correction during the years of collection, as well as interest. This procedure imputed to taxpayers considerable financial losses, particularly during the periods when the monthly inflation rates stood at high levels. In order to claim the appropriate interest and monetary correction subtracted by the methodology applied by Eletrobrás, the Company (understood to be legally entities existing at the time and that later became part of Gerdau S.A.) filed lawsuits claiming credits resulting from differences on the monetary correction of principal, interest, moratory and other accessory amounts owed by Eletrobrás due to the compulsory loans, totaling approximately R$ 1,260 million. Recently, particularly in 2015, processes involving representative amounts were definitively judged by the Superior Court of Justice - STJ favorable to the Company so that no further appeals against such decisions apply (“final judgment”). For claims with a final judgment, it yet remains the enforcement of ruling (or execution phase) where the actual amounts to be settled will finally be calculated. Obtaining favorable decisions represented by the final judgment mentioned above, suggests that an inflow of economic benefits may occur in the future. However, there are still substantial uncertainties on the timing, the way and the amount to be realized so that it is not yet practicable to reasonably determine that the realization of the gain arising from these decisions has reached a level of virtually certain and that the Company has control over such assets, which implies that such gains are not recorded until such conditions are demonstrably present.

RELATED-PARTY TRANSACTIONS

RELATED-PARTY TRANSACTIONS	12 Months Ended
RELATED-PARTY TRANSACTIONS	Dec. 31, 2018
RELATED-PARTY TRANSACTIONS
RELATED-PARTY TRANSACTIONS	NOTE 18 — RELATED-PARTY TRANSACTIONS a) Intercompany loans 2018 2017 Assets Joint venture Gerdau Corsa SAPI de C.V. 72 7 Others Fundação Gerdau 27,867 51,832 27,939 51,839 Liabilities Joint venture Diaco S.A. (1,350) — (1,350) — 2018 2017 2016 Net financial income 545 95 (2,457) b) Operations with related parties During the years ended December 31, 2018, 2017 and 2016, the Company, through its subsidiaries, entered into commercial operations with some of its associate companies and joint ventures including sales of R$ 1,382,584 as of December 31, 2018 (R$ 630,190 and R$421,415 as of December 31, 2017 and 2016, respectively) and purchases in the amount of R$ 129,513 as of December 31, 2018 (R$ 121,618 and R$141,275 as of December 31, 2017 and 2016, respectively). The net amount totals R$ 1,253,071 as of December 31, 2018 (R$ 508,572 and R$280,140 as of December 31, 2017 and 2016, respectively). During the years ended December 31, 2018, 2017 and 2016, the Company and its subsidiaries made transactions with controlling shareholders, directly or indirectly, mainly of guarantees provided by the controlling in guarantees of debentures, on which the Company pays a fee of 0.95 % p.a. on the amount guaranteed. The effect of these transactions was an expense of R$ 194 (R$ 689 and R$4,732 as of December 31, 2017 and 2016, respectively). Additionally, the Company recorded income of R$ 445 (R$ 801 and R$1,001 as of December 31, 2017 and 2016, respectively), derived from rental agreement. Guarantees granted Original Related Party Relationship Object Amount Maturity 2018 2017 2016 Diaco S.A. Joint-venture Financing Agreements 137,700 Aug/18 — 128,019 — Gerdau Corsa S.A.P.I. de C.V. Joint-venture Financing Agreements 1,875,345 Jan/19 - Dec/21 1,933,929 1,797,856 2,016,260 Gerdau Summit Aços Fundidos e Forjados S.A. Joint-venture Financing Agreements 130,164 Aug/25 41,571 6,550 — Gerdau Metaldom S.A.; Aceros Corsa S.A. de C.V. and Gerdau Corsa S.A.P.I de C.V.; Subsidiary and Joint-venture Financing Agreements — Oct/20 198,619 178,200 — c) Debentures Debentures are held by direct or indirect shareholders in the amount of R$ 0 as of December 31, 2018 (R$ 348 as of December 31, 2017), which corresponds to 0 debentures (63 as of December 31, 2017). d) Price and interest Loan agreements between Brazilian companies carry interest based on the CDI (Interbank Deposit Certificate) and Libor rate plus exchange variance, when applicable. Sales of products and purchases of inputs are made under terms and conditions agreed between the parties. e) Key Management compensation The cost of the key management salaries, variable compensation and benefits was R$ 50,310 during 2018 (R$ 38,510 in 2017). In 2018, contributions to management’s defined contribution pension plans totaled R$ 1,595 (R$ 1,158 in 2017). Stock options granted to management are as follows: Number of Weighted shares exercise price R$ Available at beginning of the year 198,000 18.19 Options Cancelled (198,000) 18.62 Available at the end of the year — — At the end of the year, the Restricted Shares resulting from the conversion process within the key management were: 2018 2017 Available at beginning of the year 5,945,310 4,831,999 Granted 1,255,286 1,353,930 Exercised (511,333) (240,619) Shares adjustment (313,716) — Available at the end of the year 6,375,547 5,945,310 Additional information on the long-term incentive plan are presented in Note 25. The cost of long-term incentive plans recognized in income and attributable to key management (members of Board of Directors and executive officers) totaled R$ 23,189 during 2018 (R$ 10,451 and R$ 14,095 during 2017 and 2016, respectively).

EMPLOYEE BENEFITS

EMPLOYEE BENEFITS	12 Months Ended
EMPLOYEE BENEFITS	Dec. 31, 2018
EMPLOYEE BENEFITS
EMPLOYEE BENEFITS	NOTE 19 — EMPLOYEE BENEFITS Total assets and liabilities of all types of employee benefits granted by the Company and its subsidiaries as of December 31, 2018 are as follows: 2018 2017 Plan assets - Defined contribution pension plan 17,952 1,149 Total assets 17,952 1,149 Actuarial liabilities - Defined benefit pension plan 1,057,846 1,084,758 Acturial liabilities - Post-employment health care benefit 272,369 316,230 Retirement and termination benefit liabilities 26,502 23,876 Total liabilities 1,356,717 1,424,864 Current 157 253 Non-current 1,356,560 1,424,611 a) Post-employment defined benefit pension plan The Company’s Canadian and US subsidiaries sponsor defined benefit plans (Canadian Plan and American Plan), collectively referred to as the North-American Plans, that cover substantially all their employees and provide supplemental benefits to employees during retirement. Additionally, the Company and its subsidiaries in Brazil sponsored a defined benefit pension plan (Brazilian plans), which are managed through Gerdau - Sociedade de Previdência Privada, a closed supplementary pension entity. In 2010, it was approved the settlement of a defined benefit plan, in which the participants had the rights for the benefit settled. All participants of those plans, which are now settled, were able to: (i) choose to adhere to a new defined contribution plan, when it was authorized to transfer the amount related to the individual mathematical reserve from the settled plan for the new plan and add amounts to this reserve through future contributions and sponsors, plus the resources profitability; or (ii) do not transfer the reserve and maintain the benefit settled in the defined benefit plan, adjusted by the INPC (National Index of Consumer Prices). The assumptions adopted for pension plans can have a significant effect on the amounts disclosed and recorded for these plans. Due to the migration process and the closing of the Brazilian pension plans in 2010, the Company is not calculating the potential effects of changes in discount rates and expected return rate on assets for these plans. The potential effects of changes to the North-American Plans on the Consolidated Statement of Income are presented below: 1% Increase 1% Decrease Discount rate (14,689) 10,346 The accumulated amount recognized in other Comprehensive Income for employee benefits is R$ (1,075,377) as of December 31, 2018 (R$ (1,227,722) as of December 31, 2017). Defined Benefit Pension Plan The current expenses of the defined benefit pension plans are as follows: 2018 2017 2016 Cost of current service 60,803 60,595 57,619 Interest expense 82,513 90,381 199,389 Return on plan assets (59,692) (64,128) (186,856) Past service cost 7,065 1,082 2,788 Settlement 3,220 (566) 609 Interest cost on unrecoverable surplus 20,023 21,211 22,916 Net pension cost 113,932 108,575 96,465 The reconciliations of assets and liabilities of the plans are as follows: 2018 2017 Present value of defined benefit obligation (4,391,251) (4,314,592) Fair value of plan assets 3,568,934 3,456,613 Asset ceiling restrictions on recognition of net funded assets (235,532) (226,779) Net (1,057,849) (1,084,758) Plan assets — — Defined benefit obligation (1,057,849) (1,084,758) Changes in plan assets and actuarial liabilities were as follows: 2018 2017 2016 Variation of the plan obligations Obligation at the begining of the year 4,314,592 4,174,653 4,739,299 Cost of service 60,803 60,595 57,619 Interest expense 188,729 195,557 199,389 Payments of the benefits (318,198) (335,471) (317,505) Past service cost 7,065 1,082 2,788 Supplementary amounts of the plan 17,078 — — Settlement (61,369) (52,035) 609 Acturial remeasurements (370,083) 235,549 186,905 Liabilities held for sale — (101,794) — Exchange Variance 552,634 136,456 (694,451) Obligation at the end of the year 4,391,251 4,314,592 4,174,653 2018 2017 2016 Variation of the plan assets Fair value of the plan assets at the begining of the year 3,456,613 3,292,890 3,865,411 Return of the plan assets 165,908 169,304 186,857 Contributions from sponsors 197,828 111,450 (47,574) Settlement (64,868) (51,469) (6,710) Payments of benefits (318,198) (335,471) (317,505) Remeasurement (253,301) 232,214 109,153 Assets held for sale — (73,127) — Exchange Variance 384,952 110,822 (496,742) Fair value of plan assets at the end of the year 3,568,934 3,456,613 3,292,890 The fair value of plan assets include shares of the Company in the amount of R$ 3,427 as of December 31, 2018 (R$ 3,558 as of December 31, 2017). Amounts recognized as actuarial gains and losses in the Statement of Comprehensive Income are as follows: 2018 2017 2016 Remeasurements 253,301 (232,214) (109,153) Actuarial Remeasurements (370,083) 235,549 186,905 Restriction recognized in Other Comprehensive Income (43,197) (1,696) 3,065 Remeasurements recognized in Other Comprehensive Income (159,979) 1,639 80,817 The historical actuarial remeasurements are as follows: 2018 2017 2016 2015 2014 Present value of defined benefit obligation (4,391,251) (4,314,592) (4,174,653) (4,739,299) (3,791,670) Fair value of the plan assets 3,568,934 3,456,613 3,292,890 3,865,411 3,319,133 Surplus (Deficit) (822,317) (857,979) (881,763) (873,888) (472,537) Experience adjustments on plan liabilities (Gain) (370,083) 235,549 186,905 (202,749) 466,829 Experience adjustments on plan assets (Gain) 253,301 (232,214) (109,153) 235,275 (69,748) Actuarial remeasurements are recognized in the period in which they occur and are recorded directly in comprehensive income. The allocations for plan assets are presented below: 2018 Brazilian Plans American Plans Fixed income Variable income — Others Total 2017 Brazilian Plans American Plans Fixed income Variable income — Others Total The investment strategy for the Brazilian Plan is based on a long-term macroeconomic scenario. This scenario assumes a reduction in Brazil’s sovereign risk, moderate economic growth, stable levels of inflation, exchange rates and moderate interest rates. The Canadian and American subsidiaries have an Investment Committee that defines the investment policy for the defined benefit plans. The primary investment objective is to ensure the security of benefits that were accrued under the plans, providing an adequately funded asset pool which is separated and independent of the Company. To reach this objective, the fund must invest in a manner that adheres to safeguards and diversification to which a prudent investor of pension funds would normally adhere. These subsidiaries retain specialized consultants that advice and support Investment Committee decisions and recommendations. The asset mix policy considers the principles of diversification and long-term investment goals, as well as liquidity requirements. To do this, the target allocation ranges between 50% in shares, 40% in debt securities and 10% in alternative securities, and for Brazilian Plan it is close to 100% in fixed income. The tables below show a summary of the assumptions used to calculate the defined benefit plans in 2018 and 2017, respectively: 2018 Brazilian Plan North America Plan Average discount rate 3.50% - 4.25% Rate of increase in compensation Not applicable Mortality table AT-2000 per sex RP-2006 and MP-2018 Mortality table of disabled AT-2000 per sex RP-2006 and MP-2018 Rate of rotation Based on plan background Based on age and/or the service 2017 Brazilian Plan North America Plan Average discount rate 3.25% - 4.25% Rate of increase in compensation Not applicable Mortality table AT-2000 per sex RP-2006 and MP-2017 Mortality table of disabled AT-2000 per sex RP-2006 and MP-2017 Rate of rotation Based on plan background Based on age and/or the service b) Post-employment defined contribution pension plan The Company and its subsidiaries in Brazil, in the United States and in Canada maintain a defined contribution plan to which contributions are made by the sponsor in proportion to the contributions made by its participating employees. The total cost of these plans was R$ 123,225 in 2018 (R$ 132,399 in 2017). c) Post-employment health care benefit plan The North American plans include, in addition to pension benefits, specific health care benefits for employees who retire after a certain age and with a certain number of years of service. The Americans and Canadian subsidiaries have the right to change or eliminate these benefits, and the contributions are actuarially calculated. The net periodic costs of post-employment health care benefits are as follows: 2018 2017 2016 Current service cost 4,144 4,441 4,481 Interests expense 11,082 12,162 15,494 Past service cost (40,740) 5,769 (75,787) Net cost pension benefit (25,514) 22,372 (55,812) The funded status of the post-employment health benefits plans is as follows: 2018 2017 Present value of obligations (272,959) (316,364) Total net liabilities (272,959) (316,364) Changes in plan assets and actuarial liabilities were as follows: 2018 2017 2016 Change in benefit obligation Benefit obligation at beginning of the year 316,364 305,447 446,842 Cost of service 4,144 4,441 4,481 Interest expense 11,082 12,162 15,494 Past service cost (40,740) 5,769 (75,787) Contributions from participants 1,496 1,556 2,212 Payment of benefits (18,655) (14,230) (14,799) Remeasurements (40,841) (14,452) (3,673) Exchange variations 40,109 15,671 (69,323) Benefit obligation at the end of the year 272,959 316,364 305,447 2018 2017 2016 Change in plan assets Contributions from sponsors 17,159 12,572 12,463 Contributions from participants 1,496 1,556 2,212 Payments of benefits (18,655) (14,128) (14,675) Fair value of plan assets at end of the year — — — The historical actuarial gains and losses of the plans are as follows: 2018 2017 2016 2015 2014 Present value of defined benefit obligation (272,959) (316,364) (305,447) (446,843) (351,538) Deficit (272,959) (316,364) (305,447) (446,843) (351,538) Experience adjustments on plan liabilities (40,841) (14,452) (3,673) (45,884) 42,345 The amounts recognized as actuarial gains and losses in other comprehensive income are as follows: 2018 2017 2016 Losses on actuarial obligation (40,841) (14,452) (3,673) Actuarial losses recognized in Equity (40,841) (14,452) (3,673) The accounting assumptions adopted for post-employment health benefits are as follows: 2018 2017 Average discount rate 3.75% - 4.25% 3.25% - 3.50% Health treatment - rate assumed next year 6.60% - 6.75% 6.88% - 7.60% Health treatment - Assumed rate of decline in the cost to achieve in the years of 2026 to 2041 4.00% - 4.40% 4.00% - 4.50% The assumptions adopted for post-employment health benefits have a significant effect on the amounts disclosed and recorded for post-employment health benefits plans. The change of one point percentage on discount rates would have the following effects: 1% Increase 1% Decrease Effect over total service costs and interest costs 2,051 (1,612) Effect over benefit plan obligations 27,517 (22,743) d) Other retirement and termination benefits The benefits of this plan provide a compensation supplement up to retirement date, cost of living allowance, and other benefits as a result of termination and retirement of the employees. The Company estimates that the total obligation for these benefits was R$ 26,502 as of December 31, 2018 (R$ 23,876 as of December 31, 2017).

ENVIRONMENTAL LIABILITIES

ENVIRONMENTAL LIABILITIES	12 Months Ended
ENVIRONMENTAL LIABILITIES	Dec. 31, 2018
ENVIRONMENTAL LIABILITIES
ENVIRONMENTAL LIABILITIES	NOTE 20 — ENVIRONMENTAL LIABILITIES The steel industry uses and generates substances that may damage the environment. The Company and its subsidiaries believe they are compliant with all the applicable environmental regulations in the countries where they operate. The Company’s management performs frequent analysis with the purpose of identifying potentially impacted areas and a liability is recorded based on the best estimate of costs for investigation, treatment and cleaning of potentially affected sites. The Company uses estimates and assumptions to determine the amounts involved, which may change in the future, as result of the final investigations and the determination of the actual environmental impact. The balances of the provisions are as follows: 2018 2017 Provision for environmental liabilities 132,647 85,191 Current 60,419 21,928 Non-current 72,228 63,263

OBLIGATIONS WITH FIDC - INVESTM

OBLIGATIONS WITH FIDC - INVESTMENT FUND IN CREDIT RIGHTS	12 Months Ended
OBLIGATIONS WITH FIDC - INVESTMENT FUND IN CREDIT RIGHTS	Dec. 31, 2018
OBLIGATIONS WITH FIDC - INVESTMENT FUND IN CREDIT RIGHTS
OBLIGATIONS WITH FIDC - INVESTMENT FUND IN CREDIT RIGHTS	NOTE 21 — OBLIGATIONS WITH FIDC - INVESTMENT FUND IN CREDIT RIGHTS Part of the assets resulting from the favorable judgments of credits with Eletrobras mentioned in Note 17 iv, were used to set up a Non Standardized Credit Right Investment Fund, constituted and duly authorized to operate by the Securities and Exchange Commission of Brazil (“FIDC NP Barzel”), whose fair value at the FIDC Inception date was R$ 800 million. On July 14, 2015, the single quota of that FIDC was sold in the acquisition of minority interests transaction in subsidiaries of Gerdau S.A. The Company assures the FIDC, through the transfer agreement price adjustments clause, minimum return on the transferred amount of the credits rights on the lawsuits. However, where the amounts received in the lawsuits exceed the transferred amount, monetarily adjusted, the Company will be entitled to a percentage of that gain. Additionally, the Company has the right of first offer to repurchase those receivables in the event of sale by the Fund, in accordance to the contract subscribed, and has the amount of R$ 938,526 as of December 31, 2018 (R$ 1,135,077 as of December 31, 2017) recognized in the account “Obligations with FIDC”.

EQUITY

EQUITY	12 Months Ended
EQUITY	Dec. 31, 2018
EQUITY
EQUITY	NOTE 22 — EQUITY a) Capital The Board of Directors may, without need to change the bylaws, issue new shares (authorized capital), including the capitalization of profits and reserves up to the authorized limit of 1,500,000,000 common shares and 3,000,000,000 preferred shares, all without nominal value. In the case of capital increase through subscription of new shares, the right of preference shall be exercised in up to 30 days, except in the case of a public offering, when the limit is not less than 10 days. Reconciliations of common and preferred outstanding shares are presented below: 2018 2017 2016 Common shares Preferred shares Common shares Preferred shares Common shares Preferred shares Balance at beginning of the year 571,929,945 1,137,327,184 571,929,945 1,137,018,570 571,929,945 1,114,744,538 Acquisition of Treasury shares — (16,000,000) — — — (10,000,000) Exercise of stock options — 1,597,235 — 308,614 — 2,274,032 Transfer of shares — 1,309,336 — — — 30,000,000 Balance at the end of the year 571,929,945 1,124,233,755 571,929,945 1,137,327,184 571,929,945 1,137,018,570 As of December 31, 2018, 573,627,483 common shares and 1,146,031,245 preferred shares are subscribed and paid up, with a total capital of R$ 19,249,181 (net of share issuance costs). Ownership of the shares is presented below: Shareholders 2018 Shareholders Common % Pref. % Total % Metalúrgica Gerdau S.A. * 557,898,901 97.3 95,469,922 8.3 653,368,823 38.0 Brazilian institutional investors 2,383,207 0.4 224,073,547 19.6 226,456,754 13.2 Foreign institutional investors 4,836,488 0.8 410,387,290 35.8 415,223,778 24.1 Other shareholders 6,811,349 1.2 394,302,996 34.4 401,114,345 23.3 Treasury stock 1,697,538 0.3 21,797,490 1.9 23,495,028 1.4 573,627,483 100.0 1,146,031,245 100.0 1,719,658,728 100.0 Shareholders 2017 Shareholders Common % Pref. % Total % Metalúrgica Gerdau S.A. * 557,898,901 97.3 95,471,131 8.3 653,370,032 38.0 Brazilian institutional investors 254,785 155,227,424 13.5 155,482,209 9.0 Foreign institutional investors 7,254,556 1.3 708,109,387 61.8 715,363,943 41.6 Other shareholders 6,521,703 1.1 178,519,242 15.6 185,040,945 10.8 Treasury stock 1,697,538 0.3 8,704,061 0.8 10,401,599 0.6 573,627,483 100.0 1,146,031,245 100.0 1,719,658,728 100.0 Shareholders 2016 Shareholders Common % Pref. % Total % Metalúrgica Gerdau S.A.* 449,712,654 78.4 202,806,626 17.7 652,519,280 37.9 Brazilian institutional investors 41,883,032 7.3 92,721,295 8.1 134,604,327 7.8 Foreign institutional investors 11,122,498 1.9 705,652,715 61.5 716,775,213 41.8 Other shareholders 69,211,761 12.1 135,837,934 11.9 205,049,695 11.9 Treasury stock 1,697,538 0.3 9,012,675 0.8 10,710,213 0.6 573,627,483 100.0 1,146,031,245 100.0 1,719,658,728 100.0 * Preferred shares do not have voting rights and cannot be redeemed but have the same rights as common shares in the distribution of dividends and also priority in the capital distribution in case of liquidation of the Company. b) Treasury stocks Changes in treasury stocks are as follows: 2018 Common shares R$ Preferred shares R$ Opening balance 1,697,538 557 8,704,061 75,528 Repurchases — — 16,000,000 243,396 Exercise of stock options — — (1,597,235) (27,433) Transfer of shares — — (1,309,336) (11,622) Closing balance 1,697,538 557 21,797,490 279,869 2017 Common shares R$ Preferred shares R$ Opening balance 1,697,538 557 9,012,675 98,189 Exercise of stock options — — (308,614) (22,661) Closing balance 1,697,538 557 8,704,061 75,528 2016 Common shares R$ Preferred shares R$ Opening balance 1,697,538 557 31,286,707 382,806 Repurchases — — 10,000,000 95,343 Exercise of stock options — — (2,274,032) (10,461) Transfer of shares — — (30,000,000) (369,499) Closing balance 1,697,538 557 9,012,675 98,189 These shares are held in treasury for subsequent cancellation, selling in the market or to be granted under the long-term incentive plan of the Company. The average acquisition cost of these shares was R$ 12.84 during 2017 (R$ 8.68 and R$ 10.89 during the years ended on December 31, 2017 and 2016, respectively). c) Capital reserves — consists of premium on issuance of shares. d) Retained earnings I) Legal reserves — under Brazilian Corporate Law, the Company must transfer 5% of the annual net income determined on its statutory books in accordance with Brazilian accounting practices to the legal reserve until this reserve equals 20% of the paid-in capital. The legal reserve can be utilized to increase capital or to absorb losses, but cannot be used for dividend purposes. II) Tax incentives reserve — under Brazilian Corporate Law, the Company may transfer to this account part of net income resulting from government benefits which can be excluded from the basis for dividend calculation. III) Investments and working capital reserve — consists of earnings not distributed to shareholders and includes the reserves required by the Company’s by-laws. The Board of Directors may propose to the shareholders the transfer of at least 5% of the profit for each year determined in its statutory books in accordance with accounting practices adopted in Brazil to this reserve. Amount can be allocated to the reserve only after the minimum dividend requirements have been met and its balance cannot exceed the amount of paid-in capital. The reserve can be used to absorb losses, if necessary, for capitalization, for payment of dividends or for the repurchase of shares. e) Operations with non-controlling interests — Corresponds to amounts recognized in equity from changes in non-controlling interests. The effects of interest changes in subsidiaries for the years presented are composed of: December 31, 2018 Attributed to parent company’s Non-controlling interest interests Total (i) Other changes — (85,483) (85,483) Effects of interest changes in subsidiaries — (85,483) (85,483) December 31, 2017 Attributed to parent company’s Non-controlling interest interests Total (i) Other changes — (21,698) (21,698) Effects of interest changes in subsidiaries — (21,698) (21,698) December 31, 2016 Attributed to parent company’s Non-controlling interest interests Total (i) Other changes — (6,405) (6,405) Effects of interest changes in subsidiaries — (6,405) (6,405) (i) f) Other reserves - Include: gains and losses on available for sale securities, gains and losses on net investment hedge, gains and losses on derivatives accounted as cash flow hedge, cumulative translation adjustments and expenses recorded for stock option plans. g) Dividends and interest on capital - the shareholders have a right to receive a minimum annual mandatory dividend equal to 30% of adjusted net income as determined in its corporate records prepared in accordance with the accounting practices adopted in Brazil. The Company calculates interest on shareholders´ capital in accordance with the terms established by Law 9249/95. The corresponding amount was recorded as a financial expense for tax purposes. For presentation purposes, this amount was recorded as dividends and did not affect net income. The related tax benefit from the reduction in income tax and social contribution on net income was R$ 127,311 in 2018. 2018 2017 2016 Net income (loss) 2,303,868 (359,360) (2,890,811) Constitution of legal reserve (115,193) — — Constitution of the tax incentives reserve (17,051) — — Net income (loss) before dividends and interest on capital 2,171,624 (359,360) (2,890,811) Dividends and interest on capital (765,339) — — Net income (loss) before constitution of investments and working capital reserve 1,406,285 (359,360) (2,890,811) Constitution of investments and working capital reserve (1,406,285) — — Absorption of net loss by investments and working capital reserve — 359,360 2,890,811 The dividends and interest for the year 2018 amounted to R$ 765,339, as shown below: Dividends and interest on capital in the years Outstanding shares Period Nature R$ /share (thousands) Credit Payment 2018 2017 2016 1 st quarter Interest 0.08 1,701,894 05/21/2018 06/01/2018 136,152 — — 2 nd quarter Interest 0.14 1,702,095 08/21/2018 08/31/2018 238,293 — — 2 nd quarter Dividends — 34,184 51,225 3 rd quarter Dividends 0.13 1,702,138 11/21/2018 12/03/2018 221,278 51,278 34,152 4 th quarter Dividends 0.10 1,696,164 03/06/2019 03/18/2019 169,616 51,020 — Interest and Dividends 765,339 136,482 85,377 Credit per share (R$) 0.45 0.08 0.05

EARNINGS (LOSS) PER SHARE (EPS)

EARNINGS (LOSS) PER SHARE (EPS)	12 Months Ended
EARNINGS (LOSS) PER SHARE (EPS)	Dec. 31, 2018
EARNINGS (LOSS) PER SHARE (EPS)
EARNINGS (LOSS) PER SHARE (EPS)	NOTE 23 — EARNINGS (LOSS) PER SHARE (EPS) The following tables reconcile net income to the amounts used to calculate basic and diluted earnings per share. Basic 2018 Common Preferred Total (in thousands, except share and per share data) Basic numerator Allocated net income (loss) available to common and preferred shareholders 774,279 1,529,589 2,303,868 Basic denominator Weighted-average outstanding shares, after deducting the average tresuary shares 571,929,945 1,129,851,598 Earnings per share (in R$) — Basic 1.35 1.35 2017 Common Preferred Total (in thousands, except share and per share data) Basic numerator Allocated net income (loss) available to common and preferred shareholders (120,267) (239,093) (359,360) Basic denominator Weighted-average outstanding shares, after deducting the average tresuary shares 571,929,945 1,137,012,265 Loss per share (in R$) — Basic (0.21) (0.21) 2016 Common Preferred Total (in thousands, except share and per share data) Basic numerator Allocated net income (loss) available to common and preferred shareholders (969,954) (1,920,857) (2,890,811) Basic denominator Weighted-average outstanding shares, after deducting the average tresuary shares 571,929,945 1,132,626,373 Loss per share (in R$) — Basic (1.70) (1.70) Diluted Diluted numerator 2018 Allocated net income available to Common and Preferred shareholders Net income allocated to preferred shareholders 1,529,589 Add: Adjustment to net income allocated to preferred shareholders in respect to the potential increase in number of preferred shares outstanding, as a result of options granted to acquire stock of Gerdau. 6,515 1,536,104 Net income allocated to common shareholders 774,279 Less: Adjustment to net income allocated to preferred shareholders in respect to the potential increase in number of preferred shares outstanding, as a result of options granted to acquire stock of Gerdau. (6,515) 767,764 Diluted denominator Weighted - average number of shares outstanding Common Shares 571,929,945 Preferred Shares Weighted-average number of preferred shares outstanding 1,129,851,598 Potential increase in number of preferred shares outstanding in respect of stock option plan 14,440,860 Total 1,144,292,458 Earnings per share — Diluted (Common and Preferred Shares) 1.34 Due to the net loss in the years of 2017 and 2016, the Company is considering for these two years the same basic and diluted loss, without considering the effects on the diluted calculation of the potential increase in preferred shares as a result of the long-term incentive plans.

NET SALES

NET SALES	12 Months Ended
NET SALES	Dec. 31, 2018
NET SALES
NET SALES	NOTE 24 — NET SALES The net sales revenues for the year are composed of: 2018 2017 2016 Gross sales 51,861,423 42,156,553 42,935,022 Taxes on sales (3,793,516) (2,956,896) (2,765,957) Discounts (1,908,429) (2,282,038) (2,517,398) Net sales 46,159,478 36,917,619 37,651,667

LONG-TERM INCENTIVE PLANS

LONG-TERM INCENTIVE PLANS	12 Months Ended
LONG-TERM INCENTIVE PLANS	Dec. 31, 2018
LONG-TERM INCENTIVE PLANS
LONG-TERM INCENTIVE PLANS	NOTE 25 — LONG-TERM INCENTIVE PLANS a) Restricted Shares and Performance Shares Summary: Balance on January 1, 2016 12,525,256 Granted 13,357,922 Cancelled (3,046,593) Exercised (2,403,094) Balance on December 31, 2016 20,433,491 Granted 3,170,952 Cancelled (1,901,782) Exercised (2,727,577) Balance on December 31, 2017 18,975,084 Granted 2,411,345 Cancelled (3,150,635) Exercised (3,974,293) Balance on December 31, 2018 14,261,501 The Company recognizes the cost of the long-term incentive plan through Restricted Shares and Performance Shares based on the fair value of the options granted on the grant date during the vesting period of each grant. The grace period for the year is 3 years for grants made as from 2017 and 5 years for grants made up to 2016. The costs with long-term incentive plans recognized in the income statement on December 31, 2018 were R$ 41,186 (R$ 25,403 on December 31, 2017). As of December 31, 2018 the Company has a total of 21,797,490 preferred shares in treasury and, according to note 22, these shares may be used for serving this plan. b) Stock Options Plan: 2018 2017 2016 Average exercise Average exercise Average exercise Number of shares price in the year Number of shares price in the year Number of shares price in the year R$ R$ R$ Available at beginning of the year 292,391 17.91 569,115 16.64 1,074,246 18.36 Options Exercised (33,499) 14.86 — — — — Options Forfeited (243,412) 18.62 (276,724) 15.11 (505,131) 20.49 Available at the end of the year 15,480 16.72 292,391 17.91 569,115 16.64 The average market price of the share in the year ended December 31, 2018 was R$ 15.70 (R$ 11.19 and R$ 11.68 in the years ended on December 31, 2017 and 2016, respectively). Number Average period of Average exercisable at Exercise price Quantity grace (in years) exercise price December 31, 2018* R$ R$ 16.86 10,754 0.2 15.90 10,754 R$ 18.58 4,726 4.0 18.58 4,726 15,480 15,480 *

SEGMENT REPORTING

SEGMENT REPORTING	12 Months Ended
SEGMENT REPORTING	Dec. 31, 2018
SEGMENT REPORTING
SEGMENT REPORTING	NOTE 26 — SEGMENT REPORTING Business Segments 2018 North America South America Special Steels Eliminations and Brazil Operation Operation Operation Operation Adjustments Consolidated Net sales 15,745,161 19,927,390 3,801,210 8,158,626 (1,472,909) 46,159,478 Cost of sales (13,044,433) (18,164,834) (3,230,952) (7,064,608) 1,494,727 (40,010,100) Gross profit 2,700,728 1,762,556 570,258 1,094,018 21,818 6,149,378 Selling, general and administrative expenses (564,031) (607,581) (136,707) (186,037) (168,438) (1,662,794) Other operating income (expenses) (33,814) 19,114 (11,421) 10,081 (18,952) (34,992) Results in operations with subsidiaries and associate company — — — — (414,507) (414,507) Equity in earnings of unconsolidated companies (1,700) (77,872) 51,648 15,629 22,436 10,141 Operational (Loss) income before financial income (expenses) and taxes 2,101,183 1,096,217 473,778 933,691 (557,643) 4,047,226 Financial result, net (442,966) (37,351) (117,270) (112,109) (1,180,099) (1,889,795) Income (Loss) before taxes 1,658,217 1,058,866 356,508 821,582 (1,737,742) 2,157,431 Income and social contribution taxes (410,651) (224,897) (86,667) (191,386) 1,082,552 168,951 Net income (Loss) 1,247,566 833,969 269,841 630,196 (655,190) 2,326,382 Supplemental information: Net sales between segments 1,280,770 84,335 4,988 102,816 — 1,472,909 Depreciation/amortization 951,826 511,154 88,537 340,297 — 1,891,814 Investments in associates and jointly-controlled entities 3,250 301,271 701,233 213,899 148,149 1,367,802 Total assets 17,473,039 14,659,926 4,421,487 8,825,830 5,900,747 51,281,029 Total liabilities 8,072,380 4,935,210 1,053,007 1,736,085 9,545,776 25,342,458 Business Segments 2017 North America South America Special Steels Eliminations and Brazil Operation Operation Operation Operation 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) Results in operations with 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 North America South America Special Steels Eliminations and Brazil Operation Operation Operation Operation 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) Results in operations with 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 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 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 2018 2018 2018 2018 2018 Net sales 17,284,473 4,785,281 23,524,381 565,343 46,159,478 Total assets 26,283,287 5,251,637 19,746,105 — 51,281,029 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 (1) (2) 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.

INSURANCE

INSURANCE	12 Months Ended
INSURANCE	Dec. 31, 2018
INSURANCE
INSURANCE	NOTE 27 — INSURANCE The subsidiaries have insurance coverage determined by management with the assistance of specialists’ advice, taking into consideration the nature and the level of risk, in amounts that cover significant losses on their assets and/or liabilities. The main types of insurance are as follows: Type Scope 2018 2017 Equity Inventories and property, plant and equipment items are insured against fire, electrical damage, explosion, machine breakage and overflow (leakage of material in fusion state). 64,676,890 57,062,113 Business Interruption Net income plus fixed expenses 6,610,851 6,464,512 Civil Liability Industrial operations 627,718 535,896

IMPAIRMENT OF ASSETS

IMPAIRMENT OF ASSETS	12 Months Ended
IMPAIRMENT OF ASSETS	Dec. 31, 2018
IMPAIRMENT OF ASSETS
IMPAIRMENT OF ASSETS	NOTE 28 — IMPAIRMENT OF ASSETS The Company performs tests for impairment of assets, notably goodwill and other long-lived assets, based on projections of discounted cash flows, which take into account assumptions such as: cost of capital, growth rate and adjustments applied to flows in perpetuity, methodology for working capital determination, investment plans, and long-term economic-financial forecasts. The impairment test of these assets are assessed based on the analysis of facts or circumstances that may indicate the need to perform the impairment test and are performed at least annually, for groups of cash generating units containing goodwill, in December, or whenever changes in events or circumstances indicate that the goodwill and other long-lived assets may be impaired. To determine the recoverable amount of each cash generating unit, the Company uses the discounted cash flow method, using as basis, financial and economic projections for each one. The projections are prepared by taking into consideration observed changes in the economic scenario in the market where the Company operates, as well as assumptions with respect to future results and the historical profitability of each segment. The Company maintains its monitoring of the steel market in order to identify any deterioration, significant drop in demand from steel consuming sectors (notably automotive and construction), stoppage of industrial plants or relevant changes in the economy or financial market that result in increased perception of risk or reduction of liquidity and refinancing capacity. In 2018, no impairment losses were recognized for goodwill and other long-lived assets. During the fourth quarter of 2017, the Company identified an increase in the pre-tax discount rate at a higher intensity than that contemplated in the quarterly monitoring conducted during the year in the North America segment. As a result, the Company performed the impairment test for goodwill and other long-lived assets, in which impairment losses were recognized in the amount of R$ 1,114,807, of which R$ 265,369 as a result of the impairment test of other long-lived assets (note 28.1) and R$ 849,438 as a result of the goodwill impairment test (note 28.2). 28.1 Other assets Impairment test In 2018, no impairment losses were recognized for other long-lived assets. In the fourth quarter of 2017, due to the lack of expectation of future use of some assets in some industrial plants, tests performed on other long-lived assets identified impairment losses in property, plant and equipment in the amount of R$ 265,369, of which R$ 45,279 in the Brazil segment and R$ 220,090 in the North America segment, resulting from a recoverable amount below the book value. These losses were determined based on the difference between the book value and the recoverable amount of these assets, which represents their value in use (higher between the fair value net of disposal expenses and their value in use). The pre-tax discount rates used for this test are the same as presented in note 28.2 of the goodwill impairment test. 28.2 Goodwill impairment test The Company has four operating segments, which represents the lowest level in which goodwill is monitored by the Company. In 2018, no impairment losses were recognized for goodwill. In the fourth quarter of 2017, the Company evaluated the recoverability of the goodwill of its segments. Based on the aforementioned events, notably the increment in the pre tax discount rate in the North America segment, the analyzes carried out identified a loss due to non-recoverability of goodwill in the amount of R$ 849,438 for the North America segment. The period for projecting the cash flows for the goodwill impairment test was five years. The assumptions used to determine the value in use based on the discounted cash flow method include analysis prepared in dollars, such as: projected cash flows based on management estimates for future cash flows, exchange rates, discount rates and growth rates on perpetuity. The cash flow projections already reflect a more challenging competitive scenario than projected in previous years, resulting from a deterioration in the steel consuming markets and overcapacity in the industry, as well as macroeconomic challenges in some geographies in which the Company operates. The perpetuity was calculated considering stable operating margins, levels of working capital and investments. The perpetuity growth rates considered in the 2018 test were: a) North America: 3% (3% in December 2017); b) Special Steel: 3% (3% in December 2017); c) South America: 3% (3% in December 2017); and d) Brazil: 3% (3% in December 2017). The pre-tax discount rates used were determined taking into consideration market information available on the date of performing the impairment test. The Company adopted distinct rates for each business segment tested with the purpose of reflecting the differences among the markets in which each segment operates, as well as the risks associated to each of them. The pre-tax discount rates used were: a) North America: 13.8% (13.6% in December 2017); b) Special Steel: 14.7% (13.1% in December 2017); c) South America: 17.1% (14.7% in December 2017); and d) Brazil 16.4%: (15.2% in December 2017). Discounted cash flows are compared to the book value of each segment and result in the recoverable amount as shown below: a) North America: exceeded the book value by R$ 2,157 million (below the book value by R$ 849 million in 2017); b) South America: exceeded the book value by R$ 730 million (exceeded the book value by R$ 437 million in 2017); c) Special Steel: exceeded the book value by R$ 3,019 million (exceeded the book value by R$ 3,989 million in 2017); and d) Brazil: exceeded the book value by R$ 3,924 million (exceeded the book value by R$ 1,747 million in 2017). The Company performed a sensitivity analysis in the assumptions of discount rate and perpetuity growth rate, due to the potential impact in the discounted cash flows. An increase of 0.5 percentage points in the discount rate of each segment’s cash flow would result in a recoverable amount below the book value and / or that exceeded the book value as shown below: a) North America: exceeded book value by R$ 1,474 million (below the book value by R$ 506 million in 2017); b) Special Steel: exceeded book value by R$ 2,483 million (exceeded the book value by R$ 3,422 million in 2017); c) South America: exceeded book value by R$ 593 million (exceeded the book value by R$ 265 million in 2017); and d) Brazil: exceeded the book value by R$ 3,048 million (exceeded the book value by R$ 999 million in 2017). On the other hand, a decrease of 0.5 percentage points in the perpetuity growth rate of the cash flow of each business segment would result in a recoverable amount below the book value and / or that exceeded the book value as shown below: a) North America: exceeded the book value by R$ 1,672 million (below the book value by R$ 310 million in 2017); b) Special Steel: exceeded the book value by R$ 2,645 million (exceeded the book value by R$ 3,596 million in 2017); c) South America: exceeded the book value by R$ 640 million (exceeded the book value by R$ 318 million in 2017); and d) Brazil: exceeded the book value by R$ 3,318 million (exceeded the book value by R$ 1,254 million in 2017). The Company will maintain over the next year its constant monitoring of the steel market in order to identify any deterioration, significant drop in demand from steel consuming sectors (notably automotive and construction), stoppage of industrial plants or activities relevant changes in the economy or financial market that result in increased perception of risk or reduction of liquidity and refinancing capacity. Although the projections made by the Company provide a more challenging scenario than that in recent years, the events mentioned above, if manifested in a greater intensity than that anticipated in the assumptions made by management, may lead the Company to revise its projections of value in use and eventually result in impairment losses.

EXPENSES BY NATURE

EXPENSES BY NATURE	12 Months Ended
EXPENSES BY NATURE	Dec. 31, 2018
EXPENSES BY NATURE
EXPENSES BY NATURE	NOTE 29 — EXPENSES BY NATURE The Company opted to present its Consolidated Income Statement by function. As required by IAS 1, the expenses classified by nature is as follows: 2018 2017 2016 Depreciation and amortization (1,891,814) (2,092,551) (2,535,955) Labor expenses (5,724,352) (5,514,721) (6,508,834) Raw material and consumption material (29,623,418) (23,423,950) (22,863,693) Freight (2,770,516) (2,281,773) (2,279,459) Impairment of assets — (1,114,807) (2,917,911) Gains and losses on assets held for sale and sales of interest in subsidiaries (414,507) (721,682) (58,223) Reversal of provision for tax liabilities, net — 929,711 — Other expenses/income, net (1,697,786) (1,563,177) (2,111,181) (42,122,393) (35,782,950) (39,275,256) Classified as: Cost of sales (40,010,100) (33,312,995) (34,187,941) Selling expenses (570,431) (524,965) (710,766) Allowance for doubtful accounts (9,914) — — General and administrative expenses (1,082,449) (1,129,943) (1,528,262) Other operating income 235,421 260,618 242,077 Other operating expenses (270,413) (168,887) (114,230) Impairment of assets — (1,114,807) (2,917,911) Gains and losses on assets held for sale and sales of interest in subsidiaries (414,507) (721,682) (58,223) Reversal of provision for tax liabilities, net — 929,711 — (42,122,393) (35,782,950) (39,275,256)

FINANCIAL INCOME

FINANCIAL INCOME	12 Months Ended
FINANCIAL INCOME	Dec. 31, 2018
FINANCIAL INCOME
FINANCIAL INCOME	NOTE 30 — FINANCIAL INCOME 2018 2017 2016 Income from short-term investments 68,721 85,153 142,965 Interest income and other financial income 135,279 141,462 109,080 Financial Income 204,000 226,615 252,045 Interest on debt (1,177,686) (1,323,448) (1,540,797) Monetary variation and other financial expenses (401,655) (402,836) (469,208) Financial Expenses (1,579,341) (1,726,284) (2,010,005) Bonds repurchases (223,925) — — Exchange Variation, net (322,621) (4,057) 851,635 Reversal of interest on provision for tax liabilities, net — 369,819 — Gains and losses on derivative financial instruments, net 32,092 (9,441) (38,930) Financial result, net (1,889,795) (1,143,348) (945,255)

SUMMARY OF SIGNIFICANT ACCOUN_2

SUMMARY OF SIGNIFICANT ACCOUNTING PRACTICES (Policies)	12 Months Ended
SUMMARY OF SIGNIFICANT ACCOUNTING PRACTICES (Policies)	Dec. 31, 2018
SUMMARY OF SIGNIFICANT ACCOUNTING PRACTICES
Basis of Presentation	2.1 — Basis of Presentation The Company’s Consolidated Financial Statements have been prepared in accordance and are in compliance with the International Financial Reporting Standards (IFRS) issued by International Accounting Standards Board (IASB). The preparation of the Consolidated Financial Statements in accordance with IFRS requires Management to make accounting estimates. The areas that involve judgment or use of estimates relevant to the Consolidated Financial Statements are stated in Note 2.17. The Consolidated Financial Statements have been prepared using historical cost as its basis, except for the valuation of certain financial instruments, which are measured at fair value. The Company adopted all applicable standards and revisions of standards and interpretations issued by the IASB or the IFRS Interpretations Committee that are effective as of December 31, 2018. a) Investments in Subsidiaries The Company’s consolidated financial statements include the financial statements of Gerdau S.A. and all its subsidiaries. The Company controls an entity when it is exposed or has the right to variable returns arising from their involvement with the entity and has the ability to affect those returns due to the power exercised over the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Company. They are deconsolidated from the date that control ceases. Third parties’ interests in equity and net income of subsidiaries are reported separately in the consolidated balance sheet and in the consolidated statement of income, respectively, under the account “Non-controlling interests”. For business combinations, the assets, liabilities, and contingent liabilities of a subsidiary are reported at their respective fair value on the date of acquisition. Any excess of the acquisition cost over the fair value of the identifiable net assets acquired is recorded as goodwill. When the acquisition cost is less than the fair value of the net assets identified, the difference is recorded as a gain in the statement of income for the year in which the acquisition took place. The non-controlling interests are presented based on the proportion of the fair value of the identified assets and liabilities acquired. Intercompany transactions and balances are eliminated in the consolidation process. Gains or losses resulting from transactions among consolidated entities of the Company are also eliminated. b) Investments in Joint ventures and Associate companies Joint ventures are those in which the control is held jointly by the Company and one or more partners. An associate company is one in which the Company exercises significant influence, but over which it does not have control. Investments in joint ventures and associate companies are recorded under the equity accounting method. c) Equity Method According to this method, investments are recognized in the consolidated balance sheet at acquisition cost and are adjusted subsequently based on the Company’s share in the earnings and in other changes in the net assets of the Associates and Joint Ventures. The balances of the investments can also be reduced due to impairment losses. Furthermore, dividends received from these companies are recorded as reductions in the value of the investments.
Foreign Currency Translation	2.2—Foreign Currency Translation a) Functional and Reporting Currency The functional currency of an entity is the currency of the primary economic environment where it operates. The Consolidated Financial Statements are presented in Brazilian Reais (R$), which is the functional and reporting currency of the Company. All balances were rounded to the nearest thousand, unless otherwise stated. b) Transactions and Balances For purposes of the Consolidated Financial Statements, the balances of each subsidiary of the Company are converted into Brazilian reais, which is the functional currency of the Company and the reporting currency of its Consolidated Financial Statements, at the exchange rates at the dates of the transactions. c) Group Companies The results of operations and financial position of all subsidiaries included in the consolidated financial statements, along with equity investments, which have functional currencies different from the Company’s reporting currency are translated into the reporting currency as follows: i) Asset and liability balances are translated at the exchange rate in effect at the balance sheet date; ii) Income and expenses are translated using the average monthly exchange rates for the year; iii) Translation gains and losses resulting from the above methodology are recognized in Equity, in the Statement of Comprehensive Income, in the account named “Other reserves - Cumulative translation adjustment”; and iv) The amounts presented in the cash flow are extracted from the converted changes in assets, liabilities and results. d) Hyperinflation in Venezuela Venezuela is considered a hyperinflationary economy and, for this reason, the financial statements of the Company’s subsidiary located in this country have been adjusted so that the amounts are stated in the measurement currency unit as of the end of the year, which considers the effects measured by the IPC - Índice de Preços ao Consumidor (Consumer Price Index) of Venezuela. The exchange rate used to translate the Venezuela subsidiary financial statements from local currency (Sovereign Bolivar in 2018 and Strong Bolivar in 2017) to Real considers the local exchange rate known as SIMADI ( Sistema Marginal de Divisas ), which is used in conversions from Strong Bolivar to American Dollar as a reference to local currency translation into Real. This rate is equivalent to 164.70 Sovereign Bolivars each 1 Real as of December 31, 2018 (1,011.19 Strong Bolivar to each 1 Real as of December 31, 2017). d) Hyperinflation in Argentina In July 2018, considering that the accumulated inflation in the last three years in Argentina was over 100%, the application of the Financial Reporting in Hyperinflationary Economies (IAS 29) is now required. In accordance with IAS 29, non-monetary assets and liabilities, Equity and the statement of income of subsidiaries operating in highly inflationary economies are adjusted by the change in the Consumer price index of the currency. As a result of that, the Company applied the concepts of IAS 29 to its subsidiaries in Argentina. The non-monetary assets and liabilities recorded at historical cost and the Equity of the subsidiaries in Argentina were updated for inflation. The statements of income for the year ended on 2017, and the respective balance sheets of the subsidiaries in Argentina, were not restated. The impacts of hyperinflation resulting from changes in general purchasing power up to June, 30 2018 were reported as equity adjustment and the impacts of changes in general purchasing power as from July 1, 2018 were reported as financial result in the statements of income of the Company. As a result of the above effects as of December 31, 2018, the Company recognized R$ 507,887 in its equity, net of tax effects, and in its consolidated statements of income, the amounts of R$ (38,105) in the financial result, and R$ (29,455) in the net income of the year.
Financial Assets	2.3 — Financial Assets At initial recognition, a financial asset is classified as measured at amortized cost, at fair value through profit or loss or at fair value through other comprehensive income. Financial assets are not reclassified subsequent to initial recognition, unless the Company changes the business model for the management of financial assets. The Company performs an evaluation of the business model objective in which a financial asset is held in the portfolio because this better reflects the way in which the business is managed. a) Financial assets at amortized cost These assets are measured subsequently to initial recognition at the amortized cost using the effective interest method. The amortized cost is reduced by impairment losses. Interest income, foreign exchange gains and losses and impairment are recognized directly in income. Any gain or loss on derecognition is recognized on statement of income. b) Financial assets measured at fair value through profit or loss These assets are measured subsequently to initial recognition at the fair value. The net result, including interest, is recognized directly in income. c) Financial assets measured at fair value through other comprehensive income These assets are measured subsequently to initial recognition at fair value. Interest income calculated using the effective interest method, exchange gains and losses and impairment are recognized in the statement of income. Other net results are recognized in other comprehensive income. In derecognition, the accumulated result in other comprehensive income is reclassified to the statement of income. d) Impairment of financial assets The Company measures the allowance for doubtful accounts in an amount equal to the Expected credit loss. In determining whether the credit risk of a financial asset has increased significantly since the initial recognition and in estimating the expected credit losses, the Company considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes quantitative and qualitative information and analysis, based on the Company's historical experience, credit assessment and considering forward-looking information. The provision for credit risks was calculated based on the credit risk analysis, which includes the historical losses, the individual situation of the clients, the situation of the economic group to which they belong, the real guarantees for the debts and the evaluation of the legal advisors and is considered sufficient to cover possible losses on amounts receivable, in addition to a prospective assessment that takes into account the change or expectation of change in economic factors that affect expected credit losses, which will be determined based on probabilities weighted. The Company presents the impairment of the financial assets (Provision for credit risk) in the Statement of Income and in the line of Impairment loss on trade receivables. e) Derecognition The Company derecognizes a financial asset when expire the contractual rights of the cash flows of the asset, or when the Company transfers the contractual rights of that cash flows in a transaction in which substantially all the risks and benefits of the financial asset are transferred or in which the Company neither transfers nor maintains substantially all the risks and benefits of the financial asset and also does not retain control over the financial asset. f) Compensation Financial assets and liabilities are offset and the net amount presented in the balance sheet when, and only when, the Company currently has a legally enforceable right to offset the amounts and intends to settle them on a net basis or to realize the asset and settle the liability simultaneously. g) Financial Instruments – Accounting Policy applicable as from January 1 st , 2018 A financial asset is measured at amortized cost if it meets both of the following conditions and is not designated as measured at fair value through profit or loss: it is maintained within a business model whose objective is to maintain financial assets to receive contractual cash flows; and its contractual terms generate, at specific dates, cash flows that are related only to payment of principal and interest on the outstanding principal amount. A debt instrument is measured at fair value through other comprehensive income if it meets both of the following conditions and is not designated as measured at fair value through profit or loss: it is maintained within a business model whose objective is achieved both by receipt of contractual cash flows and sale of financial assets; and its contractual terms generate, on specific dates, cash flows that are only payments of principal and interest on the outstanding principal amount. In the initial recognition of an investment in an equity instrument that is not held for trading, the Company may irrevocably choose to present subsequent changes in the fair value of the investment in other comprehensive income. This choice is made investment by investment. The Company performs an evaluation of the business model objective in which a financial asset is held in the portfolio because this better reflects the way in which the business is managed and the information is provided to Management. The information considered includes: the policies and objectives stipulated for the portfolio and the practical operation of those policies. They include the question of whether Management's strategy focuses on obtaining contractual interest income, maintaining a certain interest rate profile, matching the duration of financial assets with the duration of related liabilities or expected outflows of cash, or the realization of cash flows through the sale of assets; how the performance of the portfolio is evaluated and reported to the Company's Management; the risks that affect the performance of the business model (and the financial asset held in that business model) and the manner in which those risks are managed; the frequency, volume and timing of sales of financial assets in prior periods, the reasons for such sales and their expectations about future sales. h) Evaluation on whether contractual cash flows are only payments of principal and interest For the purposes of this valuation, the 'principal' is defined as the fair value of the financial asset at the initial recognition. 'Interest' is defined as a consideration for the time value of money and for the credit risk associated with the principal amount outstanding over a given period of time and for the other underlying risks and costs of borrowing (e.g. liquidity risk and costs administrative costs), as well as a profit margin. The Company considers the contractual terms of the instrument to assess whether contractual cash flows are only principal and interest payments. This includes assessing whether the financial asset contains a contractual term that could change the timing or value of the contractual cash flows so that it would not meet that condition. In making this assessment, the Company considers: contingent events that modify the value or the time of cash flows; terms that may adjust the contractual rate, including variable rates; the prepayment and the extension of the term; and terms that limit the Company's access to cash flows of specific assets (for example, based on the performance of an asset). The prepayment is consistent with the principal and interest payments criterion if the prepayment amount represents, for the most part, unpaid principal and interest amounts on the outstanding principal amount - which may include additional compensation the early termination of the contract. i) Financial assets – Accounting Policy applicable before January 1 st , 2018 The Company classified the financial assets in the following categories: loans and receivables; financial assets measured at fair value through profit or loss. Financial assets classified as loans and receivables used amortized cost by the effective interest method as a measurement, and financial assets measured at fair value through profit or loss were measured at fair value and changes in fair value, including interest or dividend income, and were recognized in profit or loss.
Inventories	2.4 — Inventories Inventories are measured at the lower of historical cost of acquisition or production and net realizable value. The acquisition and production costs include transportation, storage and non-recoverable taxes. Net realizable value is the estimated sale price in the ordinary course of business less the estimated costs of completion and selling expenses directly related. Information regarding the allowance for adjustments to net realizable value is presented in note 6.
Property, Plant and Equipment	2.5 — Property, Plant and Equipment Property, plant and equipment are stated at historical cost, monetarily adjusted when applicable, less depreciation, except for land, which is not depreciated. The Company recognizes monthly to the construction costs of qualified assets, which are assets that, necessarily, require a substantial period of time to be finished for its intended use, the borrowing costs as part of the acquisition cost of the property, plant and equipment under construction based on the following capitalization criteria: (a) the capitalization period begins when the property, plant and equipment item is under construction in process and the capitalization of borrowing costs ceases when the asset is available for use; (b) borrowing costs are capitalized considering the weighted average rate of loans existing on the capitalization date or a specific rate, in the case of loans for the acquisition of property, plant and equipment; (c) borrowing costs capitalized do not exceed the interest expenses during the capitalization period; and (d) capitalized borrowing costs are depreciated considering the same criteria and useful life determined for the property, plant and equipment item to which it was capitalized. Depreciation is calculated under the straight-line method at rates that take into consideration the estimated useful life of the asset, its level of utilization and the estimated residual value of the asset at the end of its useful life. The estimated residual value and useful life of the assets are reviewed and adjusted, if necessary, at each year-end. Subsequent costs are added to the carrying amount of property, plant and equipment or recognized as a specific item, as appropriate, only if the economic benefits associated to these items are probable and the amounts can be reliably measured. The carrying amount of replaced items is written-off. Other repairs and maintenance are recognized directly in income when incurred. Mining exploration rights are classified as Land and Buildings in the Property, plant and equipment account. Exploration expenditures are recognized as expenses until the feasibility of mining activity is established and thereafter subsequent costs are capitalized. Costs for the development of new iron ore reserves or to expand the capacity of operating mines are capitalized and amortized based on the amount of iron ore extracted. Stripping costs (costs associated with removal of waste and other residual materials) incurred during the development phase of a mine, before production phase, are registered as part of the depreciable cost of asset. Subsequently, these costs are depreciated over the useful life of the mine. Spending on waste removal, after the start of production of the mine, are treated as production costs. Depletion of mines is calculated based on the amount of ore extracted. The net book value of property, plant and equipment items is immediately impaired to its recoverable amount when the residual balance exceeds the recoverable amount.
Goodwill	2.6 — Goodwill Goodwill represents the excess of the acquisition cost over the fair value net of the assets acquired, liabilities assumed and identifiable contingent liabilities of a subsidiary, joint venture, or associate company, at the respective acquisition date. Goodwill is recorded as an asset and recorded under "Goodwill" account. Goodwill is not amortized and is subject to impairment tests annually or whenever there are indications of potential impairment. Any impairment loss is recorded as an expense in the income statement and cannot be reversed. Goodwill is allocated to the operating segments, which represents the lowest level at which goodwill is monitored by management. Goodwill that forms part of the carrying amount of an investment in an associate or a joint venture is not separately recognized. The entire carrying amount of the investment in associate or joint venture is tested for impairment as a single asset, by comparing its recoverable amount (higher of value in use and fair value less costs to sell) with its carrying amount, including impairment indicators described in IFRS 9. When a subsidiary, joint venture or associate is sold, goodwill is included in the determination of gains and losses on disposal.
Other Intangible Assets	2.7 — Other Intangible Assets Other intangible assets are stated at acquisition cost, less accumulated amortization and impairment losses, when applicable. Intangible assets consist mainly of assets which represent the capacity to generate economic benefits from companies acquired based on relationships with customers and suppliers, software and others. Intangible assets with definite useful lives are amortized taking into consideration their actual use or a method that reflects their consumption of economic benefits. The net book value of intangible assets is impaired immediately to its recoverable value when the residual balance exceeds the recoverable amount (note 2.8). Intangible assets acquired in a business combination are recorded at fair value, less accumulated amortization and impairment losses, when applicable. Intangible assets that have a defined useful life are amortized over their useful lives using an amortization method that reflects the economic benefit of the intangible asset and is recorded in the cost of sales account. The intangible relationship with customers and suppliers is amortized based on an accelerated method that considers the expected future economic benefit provided over time by these new acquired customers and suppliers. The Company reviews the amortization period and amortization method for its intangible assets with definite useful lives at the end of each year.
Provision for Impairment of Assets and Reversal of Impairment	2.8 — Provision for Impairment of Assets and Reversal of Impairment At each balance sheet date, the Company performs an assessment to determine whether there is evidence that the carrying amount of long-lived assets might be impaired. If such evidence is identified, the recoverable amount of the assets is estimated by the Company. The recoverable amount of an asset is determined as the higher of: (a) its fair value less estimated costs to selling and (b) its value in use. The value in use is measured based on discounted cash flows (before taxes) derived from the continuous use of the asset until the end of its estimated useful life. Regardless of whether or not there is any indication that the carrying amount of the asset may be impaired, the balances of goodwill arising from business combinations and intangible assets with indefinite useful lives are tested for impairment at least once a year in December. When the carrying amount of the asset exceeds its recoverable amount, the Company recognizes a reduction in the book value of the asset (Impairment). The reduction to the recoverable amount of the asset is recorded as an expense. Except for an impairment of goodwill, a reversal of a previously recorded impairment loss is required. Reversal in these circumstances is limited to the amount of the depreciated balance of the asset at the time of the reversal, determined as if the impairment had not been recorded, as discussed in note 28.1. The Company does not believe there is a reasonable likelihood that may occur a material change in the estimates or assumptions used to calculate long-lived asset impairment losses. However, if actual results are not consistent with estimates and assumptions used in estimating future cash flows and asset fair values, the Company may be exposed to losses that could be material.
Financial Liabilities and Equity Instruments	2.9 — Financial Liabilities and Equity Instruments a) Financial liabilities Financial liabilities are classified as amortized cost or at fair value through profit or loss. A financial liability is classified as fair value through profit or loss if it is classified as held for trading, it is a derivative or it is designated as such at initial recognition. Financial liabilities measured at fair value through profit or loss are measured at fair value and the net result, including interest, is recognized in the income statement. Other financial liabilities are subsequently measured at amortized cost using the effective interest method. Interest expense, exchange gains and losses are recognized in income. b) Derecognition The Company derecognizes a financial liability when its contractual obligation is withdrawn, canceled or expires. The Company also derecognizes a financial liability when the terms are modified and the cash flows of the modified liability are substantially different, in which case a new financial liability based on the modified terms is recognized at fair value. In the derecognition of a financial liability, the difference between the carrying amount extinguished and the consideration paid (including any non-cash assets transferred or liabilities assumed) is recognized in the income statement. c) Derivative Instruments and hedging The Company enters into derivative financial instruments mainly to manage its exposure to fluctuation in interest rates and exchange rates. The Company measures its derivative financial instruments, based on quotations obtained from market participants, at fair value at the balance sheet date. Changes in the fair value of a derivative that is highly effective and that is designated and qualifies as a cash flow hedge or a net investment hedge are recorded in the statement of comprehensive income. The Company assesses, both at the beginning of hedge coverage and on an ongoing basis, whether the derivatives used in hedge transactions are highly effective in offsetting changes in the fair value or cash flows of hedged items. When a cash flow hedge instrument is sold, terminated, expired or exercised, the hedge is discontinued prospectively, but the cumulative unrealized gain or loss is recognized in the comprehensive income statement. The cumulative gain and loss is transferred from the comprehensive income and recognized in the income statement when the hedged transaction is recognized in the statement of income. When no more than one transaction is expected to occur, the accumulated gain or loss is immediately transferred to the income statement. In cases of net investment hedges, the amount recorded in the statement of comprehensive income is written off and recognized in the statement of income when the disposal of the hedged investment occurs. In addition, changes in the fair value of financial instruments not characterized as hedges are recognized in the line of (Loss) Gains on financial instruments, net, in the statement of income. d) Equity instruments The equity component is initially recognized by the difference between the fair value of the compound financial instrument as a whole and the fair value of the liability component. Any directly attributable transaction costs are allocated to the liability and equity components in proportion to their initial carrying amounts.
Current and Deferred Income and Social Contribution Taxes	2.10 — Current and Deferred Income and Social Contribution Taxes Current income and social contribution tax expense is calculated in conformity with enacted tax rate in effect at the balance sheet date in the countries where the Company’s subsidiaries, associates and joint venture operate and generate taxable income. Management periodically evaluates positions taken in relation to tax matters which are subject to interpretation and recognizes a provision when there is an expectation of payment of income tax and social contribution in accordance with the tax bases. The expense for income tax and social contribution taxes comprises current and deferred taxes. Current tax and deferred tax are recognized in income unless they are recognized for a business combination, or for items directly recognized in equity through other comprehensive income. Current tax is the estimated tax payable or receivable on the taxable income or loss for the year, at the tax rates effective at the balance sheet date. Deferred income tax and social contribution are recognized in its total on the differences generated between assets and liabilities recognized for tax purposes and corresponding to amounts recognized in the Financial Statements. However, deferred income and social contribution taxes are not recognized arising from the initial recognition of assets and liabilities in a transaction other than a business combination and that do not affect the tax basis. Income and social contribution taxes are determined based on tax rates (and laws) effective at the balance sheet date and applicable when the respective income and social contribution taxes is paid. Deferred income and social contribution tax assets are recognized only to the extent that it is probable that there will be taxable income for which the temporary differences can be used and tax losses can be compensated. Deferred tax assets recorded for tax loss carryforwards are supported by projections of taxable income based on technical feasibility studies submitted annually to the Board of Directors of the Company and its subsidiaries, when applicable. These studies consider historical profitability of the Company and its subsidiaries, expectations of continuous profitability and estimates of the recovery of deferred tax assets over future years. Other deferred tax assets arising from temporary differences, mainly tax provision, are recognized according to their estimate of realization. Deferred income tax and social contribution assets are reviewed at each reporting date and will be reduced to the extent that their realization is not more likely than not based on future taxable income.
Employee Benefits	2.11 — Employee Benefits The Company has several employee benefit plans including pension and retirement plans, health care benefits, profit sharing, bonus, and share-based payment, as well as other retirement and termination benefits. The main benefit plans granted to the Company’s employees are described at notes 19 and 25. The actuarial obligations related to the pension and retirement benefits and the actuarial obligations related to the health care plans are recorded based on actuarial calculations performed every year by independent actuaries, using the projected unit credit method, net of the plan assets, when applicable, and the related costs are recognized over the employees’ service period. Any employee benefit plan surpluses are also recognized up to the probable amount of reduction in future contributions by the Company. Actuarial remeasurement arising from adjustments and changes in actuarial assumptions of the pension and retirement benefit plans and actuarial obligations related to the health care plan are recognized directly in the Statement of Comprehensive Income as described in Note 19. In accounting for pension and post-retirement benefits, several statistical and other factors that attempt to anticipate future events are used to calculate plan expenses and liabilities. These factors include discount rate assumptions, return on plan assets, future increases in health care costs, and rate of future compensation increases. In addition, the Company and its actuarial uses other factors whose measurement involves judgment are used such as withdrawal, turnover, and mortality rates. The actuarial assumptions used by the Company may differ materially from actual results in future periods due to changing market and economic conditions, regulatory events, judicial rulings, higher or lower withdrawal rates, or longer or shorter participant life spans.
Other Current and Non-current Assets and Liabilities	2.12 — Other Current and Non-current Assets and Liabilities Other current and non-current assets and liabilities are recorded at their realizable amounts (assets) and at their known or estimated amounts plus accrued charges and monetary adjustments (liabilities), when applicable.
Related -Party Transactions	2.13 — Related-Party Transactions Loan agreements between the entities in Brazil and abroad are adjusted by contractual financial charges plus foreign exchange variation, when applicable. These contracts have an expiration date, with the possibility of extension of time by agreement between the parties. Sales and purchases of raw materials and products are made under terms and conditions contractually established between the parties.
Dividends and Interest on equity	2.14 — Dividends and Interest on equity Dividend payments are recognized as liabilities at the time dividends are approved by the shareholders of Gerdau S.A. The bylaws of Gerdau S.A. required dividends of not less than 30% of the annual net income adjusted by 5% representing the constitution of legal reserve, and the constitution of tax incentives reserve; therefore, Gerdau S.A. records a liability at year-end for the minimum dividend amount that has not yet been paid during the year up to the limit of the mandatory minimum dividend described above.
Revenue Recognition	2.15 — Revenue Recognition Net sales are presented net of taxes and discounts. Revenues from sales of products are recognized to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The related costs of freight are included in cost of sales.
Investments in Environmental Protection and Environmental liabilities	2.16 — Investments in Environmental Protection and Environmental liabilities Environmental costs that relate to current operations are expensed or capitalized as appropriate. Environmental costs that relate to an existing condition caused by past operations, and which do not contribute to current or future revenue generation or cost reduction are recorded as expense. Liabilities are recorded when environmental assessments or remedial efforts are probable and the cost can be reasonably estimated based on discussions with the environmental authorities and other assumptions relevant to the nature and extent of the remediation that may be required. The ultimate cost to the Company is dependent upon factors beyond its control such as the scope and methodology of the remedial action requirements to be established by environmental and public health authorities, new laws or government regulations, rapidly changing technology and the outcome of any potential related litigation. Environmental liabilities are adjusted to present value when the aggregate amount of the obligation and the amount and timing of cash disbursements are established or can be reliably estimated.
Use of Judgements and Estimates	2.17 — Use of Judgements and Estimates The preparation of the Consolidated Financial Statements requires estimates to record certain assets, liabilities and other transactions. To make these estimates, Management uses the best information available on the date of preparation of the Consolidated Financial Statements and the experience of past and/or current events, also considering assumptions related to future events. As such, the Consolidated Financial Statements include estimates with respect to the recoverable amount of long-lived assets (note 28), with respect to the need and the amount of provisions for tax, civil and labor liabilities (note 17), estimates in selecting interest rates, return on assets, mortality tables and expectations for salary increases (note 19), and long-term incentive plans through the selection of the evaluation model and rates (note 25). Actual results could differ from those estimates.
Business Combinations for the Financial Statements	2.18 — Business Combinations for the Financial Statements a) Step-acquisitions in which control is obtained When a business combination is achieved in stages, the interest previously held by the Company in the acquired entity is remeasured at fair value at acquisition date (i.e. the date when the Company acquires the control) and the resulting gain or loss, if any, is recognized in profit or loss. Amounts related to the Company’s interest in the acquired company before the acquisition date, and that were recognized in “Other comprehensive income,” are reclassified to profit or loss, where such treatment would be appropriate if that interest were disposed of. b) Acquisitions in which control is obtained initially Acquisitions of businesses are accounted for under the acquisition method. The cost of the acquisition is measured at the fair values (at the date of the transaction) of the assets transferred, liabilities incurred or assumed and equity instruments issued by the Company in exchange for control of the acquired business entity. The acquiree’s identifiable assets, liabilities and contingent liabilities are recognized at their fair values at the acquisition date. The interest of non-controlling shareholders in the acquiree is initially measured at the non-controlling shareholders’ proportion of the net fair value of the assets, liabilities and contingent liabilities recognized. Expenses related to the acquisition are recognized in the income statement when incurred. c) Increases/decreases in non-controlling interests Subsequent purchases, after the Company has obtained control, are treated as acquisitions of shares from non-controlling shareholders: the identifiable assets and liabilities of the acquired entity are not subject to a further revaluation and the positive or negative difference between the cost of such subsequent acquisitions and the net value of the additional proportion of the company is accounted for within equity. d) Loss of control of a subsidiary When control of a subsidiary is lost as a result of a transaction, event or other circumstance, the Company derecognizes all assets, liabilities and non-controlling interests at their carrying amount. Any retained interest in the former subsidiary is recognized at its fair value at the date that control is lost. This fair value is reflected in the calculation of the gain or loss on disposal attributable to the parent, and becomes the initial carrying amount for subsequent accounting for the retained interest.
Segment Information	2.19 — Segment Information The bodies responsible for making operational decisions, allocating resources and evaluating performance include the Board of Executive Officers and the Board of Directors. The information presented to the senior management with the respective performance of each segment is derived from the records kept in accordance with accounting practices, with some reallocations between the segments. The Company’s segments are as follows: Brazil Operations (includes operations of steel and iron ore in Brazil, except Special Steel), North America Operations (includes all operations in North America, including the joint venture in Mexico and associate company in Mexico, with the exception of Special Steel), South America Operations (includes all operations in South America, except Brazil and includes the Joint venture in Dominican Republic and Colombia) and Special Steel Operations (including special steel operations in Brazil and in the United States and the joint venture in Brazil).
Earnings per Share	2.20 — Earnings per Share The tables presented in note 23 reconcile net income to the amounts used to calculate basic and diluted earnings per share. The Company has no instruments considered antidilutive that should be excluded from the calculation of diluted EPS. The calculation of basic EPS has been based on the profit attributable to shareholders and weighted-average number of shares outstanding. The calculation of diluted EPS has been based on the profit attributable to shareholders and weighted-average number of shares outstanding after adjustment for the effects of all dilutive potential shares. The average market value of the Company's shares for the purpose of calculating the dilutive effect of share options was based on quoted market prices for the year during which the options were outstanding.
Long-term incentive plans	2.21 — Long-term incentive plans The Company settles the stock options plans by delivering its own shares, which are held in treasury until the exercise of the options by the employees. Additionally, the Company has also granted the following long-term incentive plans: Stock Options, Restricted Shares, Share Appreciation Rights and Performance Shares, as presented in note 25.
Assets and liabilities held for sale	2.22 — Assets and liabilities held for sale The Company presents assets and liabilities of entities held for sale in specific lines of the Balance Sheet, denominated Assets held for sale and Liabilities held for sale, respectively, until the closing of the sale operation, which is expected to be completed in up to one year from the date of classification as held for sale. The Company measures the net assets classified as held for sale at the lower of their carrying amount and fair value less costs to sell.
New IFRS and Interpretations of IFRIC	2.23 — New IFRS and Interpretations of the IFRIC (International Financial Reporting Interpretations Committee) The Company adopted IFRS 15 - Revenue from Contracts with Customers and IFRS 9 - Financial Instruments, as from January 1, 2018. a) IFRS 15 - Revenue from contract with customers. IFRS 15 establishes a comprehensive framework for determining whether, when, and by how much revenue is recognized. The Company adopted IFRS 15 using the cumulative effect method, however, this adoption did not generate any change in amounts previously recognized as revenue, given the non-significant of the change in the standard for the Company. As a result, the information presented for the years 2017 and 2016 have not been restated and, therefore, the information for the years of 2017 and 2016 continue to be presented as disclosed in accordance with IAS 18 and related interpretations. Revenues are currently recognized when products are delivered to the customer and the performance obligation is met. b) IFRS 9 - Financial instruments. IFRS 9 establishes requirements for recognizing and measuring financial assets, financial liabilities and certain contracts for the purchase or sale of non-financial items. This standard replaces IAS 39 - Financial Instruments: Recognition and Measurement. In relation to the classification and measurement of financial assets and liabilities, IFRS 9 largely retains the requirements in IAS 39 for the classification and measurement of financial liabilities, however, it eliminates the following categories of IAS 39 for financial assets: held to maturity, loans and receivables and available for sale. The adoption of IFRS 9 did not have a significant effect on the Company's accounting policies related to financial liabilities and derivative financial instruments. The impact of IFRS 9 on the Classification and Measurement of Financial Assets is described below. According to IFRS 9, at the initial recognition, a financial asset is classified in the following measurement categories: at amortized cost or at fair value through other comprehensive income or at fair value through profit or loss. The classification of financial assets under IFRS 9 is based on the business model in which a financial asset is managed and its characteristics of contractual cash flows. The following accounting policies apply to the subsequent measurement of financial assets: - Financial assets at fair value through profit or loss: these assets are subsequently measured at fair value. Net income, including interest, is recognized directly in income. - Financial assets at amortized cost: these assets are measured subsequently to the amortized cost using the effective interest method. The amortized cost is reduced by impairment losses. Interest income, foreign exchange gains and losses and impairment are recognized directly in income. Any gain or loss on derecognition is recognized in profit or loss. - Financial assets measured at fair value through other comprehensive income: these assets are subsequently measured at fair value. Interest income calculated using the effective interest method, exchange gains and losses and impairment are recognized in the income statement. Other net income is recognized in other comprehensive income. In derecognition, the accumulated result in other comprehensive income is reclassified to the income statement. The following table sets forth the original measurement categories in IAS 39 and the new measurement categories of IFRS 9 for each class of financial assets and liabilities of the Company: Balance as of Balance as of December 31, January 1, 2018 2017 according to according to Original classification according to IAS 39 New classification according to IFRS 9 IAS 39 IFRS 9 Cash and cash equivalents Loans and receivables Financial assets at fair value through profit or loss 2,555,338 2,555,338 Short-term investments Assets at fair value with gains and losses recognized in income Financial assets at fair value through profit or loss 821,518 821,518 Trade accounts receivable - net Loans and receivables Financial assets at amortized cost 2,798,420 2,750,357 Related parties Loans and receivables Financial assets at amortized cost 51,839 51,839 Other current assets Loans and receivables Financial assets at amortized cost 469,737 469,737 Other non-current assets Loans and receivables Financial assets at amortized cost 462,735 462,735 Other non-current assets Assets at fair value with gains and losses recognized in income Financial assets at fair value through profit or loss 80,238 80,238 Total of financial assets 7,239,825 7,191,762 Trade accounts payable Other financial liabilities at amortized cost Financial liabilities at amortized cost 3,179,954 3,179,954 Short-term debt Other financial liabilities at amortized cost Financial liabilities at amortized cost 16,461,656 16,461,656 Debentures Other financial liabilities at amortized cost Financial liabilities at amortized cost 47,928 47,928 Unrealized losses on financial instruments Liabilities at market value with gains and losses recognized in income Financial liabilities at fair value through profit or loss 1,267 1,267 Obligations with FIDC Other financial liabilities at amortized cost Financial liabilities at amortized cost 1,135,077 1,135,077 Other current liabilities Other financial liabilities at amortized cost Financial liabilities at amortized cost 625,410 625,410 Other non-current liabilities Other financial liabilities at amortized cost Financial liabilities at amortized cost 653,670 653,670 Total of financial liabilities 22,104,962 22,104,962 The change in the classification of cash and cash equivalents from Loans and receivables in accordance with IAS 39 for Financial Assets at fair value through profit or loss in accordance with IFRS 9 was based on the Company's business model. Note 15.d discloses the measurement categories of IFRS 9 for each class of financial assets and liabilities of the Company on January 1, 2018 and December 31, 2018. In relation to the Impairment of Financial Assets, IFRS 9 replaces the "loss incurred" model of IAS 39 by an expected credit loss model. The new impairment model applies to financial assets measured at amortized cost. Under IFRS 9, credit losses are recognized earlier than under IAS 39. The Company measures the provision for loss in an amount equal to the Expected credit loss for life. In determining whether the credit risk of a financial asset has increased significantly since the initial recognition and in estimating the expected credit losses, the Company considers reasonable and bearable information that is relevant and available without undue cost or effort. This includes quantitative and qualitative information and analysis, based on the Company's historical experience, credit assessment and considering forward-looking information. The provision for credit risks was calculated based on the credit risk analysis, which includes historical losses, the individual situation of the clients, the situation of the economic group to which they belong, the real guarantees for debits and the evaluation of the consultants and is considered sufficient to cover possible losses on amounts receivable, in addition to a prospective assessment that takes into account the change or expectation of change in economic factors that affect the expected credit losses, which will be determined based on probabilities weighted. The provision for credit risk considers the maturity date of the accounts receivable securities, where the Company uses different percentages according to the maturity period, in order to measure the probability of loss, increasing the percentage of the provision of credit risk as the accounts receivable mature longer. Due to the transition methods chosen by the Company in the application of this standard, the comparative information of these financial statements was not restated to reflect the requirements of the new standards. The impacts of the adoption of IFRS 9 on January 1, 2018 due to the effect of expected credit losses were R$ (32,387), net of taxes. When the entity applies this standard for the first time, it may choose whether its accounting policy continues to apply the hedge accounting requirements of IAS 39 instead of IFRS 9. In this case, the Company chose to continue applying the requirements of IAS 39. c) In addition, the IASB issued/revised some IFRS standards, which have adoption in 2019 or after, and the Company presents below the evaluation of the impacts of adopting these standards in its Financial Statements: · Issuance of IFRS 16 - Lease. - Issuance of IFRS 16 - Lease. This standard is effective for years beginning on or after January 1, 2019 and introduces a single model for accounting for leases in the balance sheet for lessees. A lessee recognizes a right of use asset that represents its right to use the leased asset and a lease liability that represents its obligation to make lease payments. Exemptions are available for short term leases and low value items. This standard replaces existing lease standards, including IAS 17 - Leasing Operations and IFRIC 4, SIC 15 and SIC 27 - Complementary Aspects of Leasing Operations. The Company will recognize as from 2019 new assets and liabilities for its operating leases. The nature of the expenses related to these leases will change because the Company will recognize a depreciation of right of use assets and financial expense on lease obligations. The Company recognized until 2018 an operating lease expense during the lease term. No significant impact is expected on the Company's financial leases. The new standard provides practical expedient whose election is optional. The Company adopted the following practical expedient: 1) It will not reassess whether the contract is or contains lease at the initial application date, instead will apply IAS 17 to contracts that were previously identified as a lease using IAS 17 and IFRIC 4; 2) It will not separate non-lease components from leasing components by considering them as a single lease component; 3) It will not register contracts with a term exceeding 12 months, which on the date of transition, will end within 12 months of the date of initial application; 4) It will not register contracts of low value, according to policy defined by the Company; 5) It will exclude initial direct costs of measuring the right to use asset on the date of initial application; 6) It will make use of judgement in determining the term of the lease, if the contract contains options to extend or terminate the lease, among others; and 7) It will apply a single discount rate to the lease portfolio with fairly similar characteristics (such as similar remaining lease term, similar classes of underlying assets in a similar economic environment). Variable elements of payments related to leases (such as a lease of machinery and/or equipment with parts of payments based on asset productivity) are not included in the liability calculation and are recorded as operating expense. The discount rates used by the Company were obtained according to market conditions. The Company does not expect significant changes in the leasing activities in the period comprising the issuance of these financial statements and the date of initial application. Based on the information currently available, the Company estimates that it will recognize a lease liability and a right of use asset in the amount of R$ 996,873 on January 1, 2019; this estimate takes into account reasonable assumptions available to the Company and may vary in the initial adoption. The Company intends to apply a retrospective approach modified on January 1, 2019, with the accounting of the effects of adjustments directly on the opening balance of net equity without updating the comparative information, as well as applying the standard for all contracts entered before January 1, 2019 that were identified as leases in accordance with IAS 17 and IFRIC 4. Until the date of these financial statements, the Company is developing processes and controls to meet the new requirements. · IFRIC 23 — Uncertainty over Income Tax Treatments. Establishes aspects of recognition and measurement of the IAS 12 when there are uncertainties about the treatment of income tax related to tax assets or liabilities and current or deferred taxes, based on taxable income, tax losses, taxable bases, unused tax losses, unused tax credits and tax rates. This interpretation is effective for fiscal years beginning on or after January 1, 2019. The Company does not expect material impact in its Financial Statements. · Amendment of IAS 19 - Changes in the plan in cases of curtailment or settlement. Clarifies aspects of measurement and recognition in the result of the effects of curtailments and settlements in employee benefit plans. This change in the standard is effective for years beginning on or after January 1, 2019. The Company does not expect significant impacts on possible future events of curtailments and settlements in employee benefit plans. · Amendment of IFRS 3 - Definition of business. Clarifies aspects for the definition of business, in order to clarify when a transaction must have accounting treatment of business combination or acquisition of assets. This change in the standard is effective for years beginning on or after January 1, 2020. The Company does not expect significant impacts on possible future events of business combinations or acquisition of assets. · Amendment of IAS 1 and IAS 8 - Definition of materiality Clarifies definition of materiality to the framework of the accounting standard where this concept is applicable. These changes are effective for years beginning on or after January 1, 2020. The Company does not expect material impacts on its Financial Statements.

SUMMARY OF SIGNIFICANT ACCOUN_3

SUMMARY OF SIGNIFICANT ACCOUNTING PRACTICES (Tables)	12 Months Ended
SUMMARY OF SIGNIFICANT ACCOUNTING PRACTICES (Tables)	Dec. 31, 2018
SUMMARY OF SIGNIFICANT ACCOUNTING PRACTICES
Summary of initial application of IFRS 9 as it relates to measurement categories of financial assets and liabilities	Balance as of Balance as of December 31, January 1, 2018 2017 according to according to Original classification according to IAS 39 New classification according to IFRS 9 IAS 39 IFRS 9 Cash and cash equivalents Loans and receivables Financial assets at fair value through profit or loss 2,555,338 2,555,338 Short-term investments Assets at fair value with gains and losses recognized in income Financial assets at fair value through profit or loss 821,518 821,518 Trade accounts receivable - net Loans and receivables Financial assets at amortized cost 2,798,420 2,750,357 Related parties Loans and receivables Financial assets at amortized cost 51,839 51,839 Other current assets Loans and receivables Financial assets at amortized cost 469,737 469,737 Other non-current assets Loans and receivables Financial assets at amortized cost 462,735 462,735 Other non-current assets Assets at fair value with gains and losses recognized in income Financial assets at fair value through profit or loss 80,238 80,238 Total of financial assets 7,239,825 7,191,762 Trade accounts payable Other financial liabilities at amortized cost Financial liabilities at amortized cost 3,179,954 3,179,954 Short-term debt Other financial liabilities at amortized cost Financial liabilities at amortized cost 16,461,656 16,461,656 Debentures Other financial liabilities at amortized cost Financial liabilities at amortized cost 47,928 47,928 Unrealized losses on financial instruments Liabilities at market value with gains and losses recognized in income Financial liabilities at fair value through profit or loss 1,267 1,267 Obligations with FIDC Other financial liabilities at amortized cost Financial liabilities at amortized cost 1,135,077 1,135,077 Other current liabilities Other financial liabilities at amortized cost Financial liabilities at amortized cost 625,410 625,410 Other non-current liabilities Other financial liabilities at amortized cost Financial liabilities at amortized cost 653,670 653,670 Total of financial liabilities 22,104,962 22,104,962

CONSOLIDATED FINANCIAL STATEM_2

CONSOLIDATED FINANCIAL STATEMENTS (Tables)	12 Months Ended
CONSOLIDATED FINANCIAL STATEMENTS (Tables)	Dec. 31, 2018
CONSOLIDATED FINANCIAL STATEMENTS
Schedule of significant consolidated subsidiaries	Equity Interests Total capital () Consolidated company Country 2018 2017 2016 Gerdau GTL Spain S.L. Spain 100.00 100.00 100.00 Gerdau Internacional Empreendimentos Ltda. - Grupo Gerdau Brazil 100.00 100.00 100.00 Gerdau Ameristeel Corporation and subsidiaries (1) USA/Canada 100.00 100.00 100.00 Gerdau Açominas S.A. and subsidiary (2) Brazil 99.83 99.36 99.35 Gerdau Aços Longos S.A. and subsidiary (3) Brazil 99.78 99.12 99.11 Gerdau Steel Inc. Canada 100.00 100.00 100.00 Gerdau Holdings Inc. and subsidiary (4) USA 100.00 100.00 100.00 Paraopeba - Fixed-income investment fund (5) () Brazil 91.40 10.69 70.93 Gerdau América Latina Participações S.A. Brazil — — 99.12 Aza Participaciones S.A. (note 3.4) Chile — 100.00 100.00 Gerdau Aços Especiais S.A. Brazil — — 99.55 Gerdau Hungria Holdings Limited Liability Company Hungary 100.00 100.00 100.00 GTL Equity Investments Corp. British Virgin Islands 100.00 100.00 100.00 Empresa Siderúrgica del Perú S.A.A. - Siderperú Peru 90.03 90.03 90.03 Diaco S.A. and subsidiary (6) Colombia — — 99.68 Gerdau GTL México, S.A. de C.V. and subsidiaries (7) Mexico 100.00 100.00 100.00 Seiva S.A. - Florestas e Indústrias Brazil 97.73 97.73 97.73 Itaguaí Com. Imp. e Exp. Ltda. Brazil — — 100.00 Gerdau Laisa S.A. Uruguai 100.00 100.00 100.00 Sipar Gerdau Inversiones S.A. Argentina 99.99 99.99 99.99 Sipar Aceros S.A. and subsidiary (8) Argentina 99.98 99.98 99.96 Sizuca - Siderúrgica Zuliana, C. A. Venezuela 100.00 100.00 100.00 GTL Trade Finance Inc. British Virgin Islands 100.00 100.00 100.00 Gerdau Trade Inc. British Virgin Islands 100.00 100.00 100.00 Gerdau Steel India Ltd. (note 3.4) India — 98.90 98.90 () (**) (1) Subsidiaries: Gerdau Ameristeel US Inc., Gerdau Ameristeel Sayreville Inc., Chaparral Steel Company. (2) Subsidiary: G2L Logistica Ltda. (3) Subsidiary: Gerdau Açominas Overseas Ltd. (4) Subsidiary: Gerdau MacSteel Inc. (5) Fixed-income investment fund managed by Bank JP Morgan S.A.. (6) Subsidiary: Cyrgo S.A. (7) Subsidiary: Sidertul S.A. de C.V. and GTL Servicios Administrativos México, S.A. de C.V.. (8) Subsidiary: Siderco S.A.
Schedule of interests in joint ventures	Equity Interests Total capital () Joint Ventures Country 2018 2017 2016 Bradley Steel Processors Canada 50.00 50.00 50.00 MRM Guide Rail Canada 50.00 50.00 50.00 Gerdau Corsa S.A.P.I. de CV Mexico 50.00 50.00 50.00 Gerdau Metaldom Corp. Dominican Rep. 50.00 45.00 45.00 Gerdau Summit Aços Fundidos e Forjados S.A. Brazil 58.73 58.73 — Diaco S.A. Colombia 49.87 49.87 — Juntos Somos Mais Fidelização S.A. Brazil 27.50 — — () The voting capital is substantially equal to the total capital. The interests reported represent the ownership percentage held directly and indirectly held in the joint venture.
Schedule of summarized financial information of the joint ventures	Joint ventures 2018 2017 2016 Net income (loss) (16,403) (91,553) (126,723) Total comprehensive income (loss) (16,403) (91,553) (126,723)
Schedule of interests in associate companies	Equity interests Total capital () Associate companies Country 2018 2017 2016 Dona Francisca Energética S.A. Brazil 51.82 51.82 51.82 Corsa Controladora, S.A. de C.V. Mexico 49.00 49.00 49.00 () The voting capital is substantially equal to the total capital. The interests reported represent the ownership percentage held directly and indirectly.
Schedule of summarized financial information of the associate companies	Associate Companies 2018 2017 2016 Net income 31,806 26,099 141,023 Total comprehensive income 31,806 26,099 141,023

CASH AND CASH EQUIVALENTS, AN_2

CASH AND CASH EQUIVALENTS, AND SHORT AND LONG-TERM INVESTMENTS (Tables)	12 Months Ended
	Dec. 31, 2018
CASH AND CASH EQUIVALENTS, AND SHORT AND LONG-TERM INVESTMENTS
Schedule of cash and cash equivalents and investments	2018 2017 Cash 6,800 10,439 Banks and immediately available investments 2,883,344 2,544,899 Cash and cash equivalents 2,890,144 2,555,338 2018 2017 Held for trading 459,470 821,518 Short-term investments 459,470 821,518

TRADE ACCOUNTS RECEIVABLE (Tabl

TRADE ACCOUNTS RECEIVABLE (Tables)	12 Months Ended
TRADE ACCOUNTS RECEIVABLE (Tables)	Dec. 31, 2018
TRADE ACCOUNTS RECEIVABLE
Schedule of trade accounts receivable	2018 2017 Trade accounts receivable - in Brazil 1,056,625 1,265,431 Trade accounts receivable - exports from Brazil 373,593 139,162 Trade accounts receivable - outside of Brazil 1,929,595 1,525,466 (-) Impairment loss on trade receivables (158,157) (131,639) 3,201,656 2,798,420
Schedule of accounts receivable by aging	2018 2017 Current 2,362,408 2,234,723 Past-due: Up to 30 days 792,569 467,901 From 31 to 60 days 63,294 96,852 From 61 to 90 days 10,133 17,636 From 91 to 180 days 22,261 27,841 From 181 to 360 days 26,003 22,985 Above 360 days 83,145 62,121 (-) Impairment loss on trade receivables (158,157) (131,639) 3,201,656 2,798,420
Schedule of the changes in the allowance for doubtful accounts	Balance as of January 1, 2016 (185,261) Provisions for bad debt during the year (85,661) Recoveries in the year 16,880 Write-offs 37,679 Loss of control by selling of subsidiary (note 3.4) 17,594 Exchange variation (537) Balance as of December 31, 2016 (199,306) Provisions for bad debt during the year (98,476) Recoveries in the year 80,134 Write-offs 73,591 Loss of control by joint venture creation 1,487 Assets held for sale 11,207 Exchange variation (276) Balance as of December 31, 2017 (131,639) Provisions for bad debt during the year (111,900) Recoveries in the year 101,986 Write-offs 39,943 Exchange variation (5,136) Effects of IFRS 9 adoption (48,063) Assets held for sale (3,348) Balance as of December 31, 2018 (158,157)

INVENTORIES (Tables)

INVENTORIES (Tables)	12 Months Ended
INVENTORIES (Tables)	Dec. 31, 2018
INVENTORIES
Schedule of inventories	2018 2017 Finished products 3,985,964 3,026,556 Work in progress 1,688,794 1,302,152 Raw materials 2,296,074 1,703,013 Storeroom supplies 784,517 298,100 Imports in transit 426,044 375,139 (-) Allowance for adjustments to net realizable value (13,704) (3,556) 9,167,689 6,701,404
Schedule of the changes in the allowance for adjustment to net realizable value of inventories	Balance as of January 1, 2016 (101,121) Provision for the year (62,899) Reversal of adjustments to net realizable value 94,391 Loss of control by selling of subsidiary 30,105 Exchange rate variation 10,711 Balance as of December 31, 2016 (28,813) Provision for the year (26,545) Reversal of adjustments to net realizable value 46,740 Loss of control by joint venture creation 392 Assets held for sale 881 Exchange rate variation 3,789 Balance as of December 31, 2017 (3,556) Provision for the year (11,943) Reversal of adjustments to net realizable value 3,715 Exchange rate variation (871) Assets held for sale (1,049) Balance as of December 31, 2018 (13,704)

TAX CREDITS (Tables)

TAX CREDITS (Tables)	12 Months Ended
TAX CREDITS (Tables)	Dec. 31, 2018
TAX CREDITS
Schedule of current and non-current tax credits	2018 2017 Current ICMS (state VAT) 291,027 155,096 Social security financing 95,700 91,229 Financing of social integration program 23,473 20,242 IPI (federal VAT) 44,312 59,982 IVA (value-added tax) 32,967 48,139 Others 39,949 27,741 527,428 402,429 Non-current ICMS (state VAT) 27,527 26,135 Social security financing 1,980 360 Financing of social integration program and Others 2,558 4,346 32,065 30,841 559,493 433,270
Schedule of estimates of realization of non-current tax credits	2018 2017 2019 — 18,017 2020 15,025 7,062 2021 10,846 5,762 2022 on 6,194 — 32,065 30,841

INCOME AND SOCIAL CONTRIBUTIO_2

INCOME AND SOCIAL CONTRIBUTION TAXES (Tables)	12 Months Ended
INCOME AND SOCIAL CONTRIBUTION TAXES (Tables)	Dec. 31, 2018
INCOME AND SOCIAL CONTRIBUTION TAXES
Schedule of reconciliations of income and social contribution taxes at statutory rates to amounts presented in the Statement Of Income	2018 2017 2016 Income (loss) before income taxes 2,157,431 (43,276) (2,581,615) Statutory tax rates 34 % 34 % 34 % Income and social contribution taxes at statutory rates (733,527) 14,714 877,749 Tax adjustment with respect to: - Difference in tax rates in foreign companies 663,116 (183,787) (1,162,174) - Equity in earnings of unconsolidated companies 3,448 (11,763) (4,342) - Interest on equity* 128,418 113 (162) - Tax credits and incentives 9,531 23,185 18,494 - Recognition of previously unrecognized tax losses 47,545 — (40,279) - Capital Gain** — (98,290) — - Other permanent differences, net 50,420 (39,563) 6,400 Income and social contribution taxes 168,951 (295,391) (304,314) Current (629,209) (313,758) (110,511) Deferred 798,160 18,367 (193,803) () Brazilian Law 9,249/95 provides that a company may, at its sole discretion, consider dividends distributions to shareholders to be considered as interest on own capital — subject to specific limitations - which has the effect of a taxable deduction in the determination of income tax and social contribution. The limitation is the greater of (i) shareholders’ equity multiplied by the TJLP (Long Term Interest Rate) rate or (ii) 50% of the net income in the fiscal year. (*) The merger of Gerdau Aços Especiais S.A. and Gerdau América Latina Part. S.A. at Gerdau S.A., generated a taxable capital gain.
Schedule of breakdown and changes in deferred income and social contribution tax assets and liabilities at statutory tax rates	Effect of selling Balance as of Recognized in of subsidiary Comprehensive Balance as of January 1, 2016 income and others Income December 31, 2016 Tax loss carryforward 887,980 327,743 (263,297) (78,069) 874,357 Social contribution tax losses 191,638 120,254 — — 311,892 Provision for tax, civil and labor liabilities 639,566 118,526 (2,671) (223) 755,198 Benefits granted to employees 549,865 (67,133) 34,982 (85,177) 432,537 Other temporary differences 381,991 (21,985) 20,776 (30,020) 350,762 Deferred exchange variance* 2,158,149 (907,690) — 1,083 1,251,542 Provision for losses 151,678 (34,059) (4,671) (12) 112,936 Fair value adjustments on businesses acquired (1,567,880) 270,541 2,984 216,925 (1,077,430) 3,392,987 (193,803) (211,897) 24,507 3,011,794 Non-current assets 4,307,462 3,407,230 Non-current liabilities (914,475) (395,436) * Effect of selling Balance as of Recognized in of subsidiary Comprehensive Balance as of December 31, 2016 income and Others Income December 31, 2017 Tax loss carryforward 874,357 157,402 (22,362) (35,759) 973,638 Social contribution tax losses 311,892 58,963 (15,073) — 355,782 Provision for tax, civil and labor liabilities 755,198 (479,836) 101 — 275,463 Benefits granted to employees 432,537 (48,466) (9,363) (91,905) 282,803 Other temporary differences 350,762 (81,627) 92,174 48,991 410,300 Deferred exchange variance* 1,251,542 (199,200) 8,185 — 1,060,527 Provision for losses 112,936 (2,208) — — 110,728 Fair value adjustments on businesses acquired (1,077,430) 613,339 (51,606) 18,163 (497,534) 3,011,794 18,367 2,056 (60,510) 2,971,707 Non-current assets 3,407,230 3,054,393 Non-current liabilities (395,436) (82,686) * Balance as of Recognized in Comprehensive Balance as of December 31, 2017 income Others Income December 31, 2018 Tax loss carryforward 973,638 341,664 36,445 (11,814) 1,339,933 Social contribution tax losses 355,782 (18,524) — — 337,258 Provision for tax, civil and labor liabilities 275,463 (5,214) 168 — 270,417 Benefits granted to employees 282,803 (16,564) 67,184 (46,929) 286,494 Other temporary differences 410,300 93,094 17,177 5,247 525,818 Deferred exchange variance* 1,060,527 223,850 — — 1,284,377 Provision for losses 110,728 (33,165) (12) 6,286 83,837 Fair value adjustments on businesses acquired (497,534) 213,019 (89,859) 1,926 (372,448) 2,971,707 798,160 31,103 (45,284) 3,755,686 Non-current assets 3,054,393 3,874,054 Non-current liabilities (82,686) (118,368) *
Schedule of estimated recovery and reversal of income and social contributions tax assets and liabilities	Assets 2018 2017 2018 — 326,356 2019 609,546 198,590 2020 585,047 400,597 2021 338,896 369,857 2022 306,130 168,125 2023 after 2,034,435 1,590,868 3,874,054 3,054,393 Liabilities 2018 2017 2018 — (2,680) 2019 (18,055) (6,116) 2020 (25,144) (6,498) 2021 (13,548) (4,745) 2022 (14,009) (18,514) 2023 after (47,612) (44,133) (118,368) (82,686)

INVESTMENTS IN ASSOCIATES AND_2

INVESTMENTS IN ASSOCIATES AND JOINT VENTURES (Tables)	12 Months Ended
INVESTMENTS IN ASSOCIATES AND JOINT VENTURES (Tables)	Dec. 31, 2018
INVESTMENTS IN ASSOCIATES AND JOINT VENTURES
Summary of investments in associates and joint ventures	Investments in Investments in Investments in North America South America Special Steel Others Total Balance as of January 1, 2016 509,086 792,117 — 91,679 1,392,882 Equity in earnings (70,618) 40,067 — 17,780 (12,771) Cumulative Translation Adjustment (126,660) (124,185) — (350) (251,195) Effect of selling of subsidiary — (203,843) — (1,734) (205,577) Dividends/Interest on equity (8,282) (99,634) — (16,579) (124,495) Balance as of December 31, 2016 303,526 404,522 — 90,796 798,844 Equity in earnings (111,581) 41,553 15,460 19,971 (34,597) Cumulative Translation Adjustment (10,485) (6,260) — — (16,745) Capital increase 178,670 — 184,187 — 362,857 Joint venture creation — 145,084 — — 145,084 Contingent price complement — — — 65,500 65,500 Dividends/Interest on equity (14,050) — — (26,594) (40,644) Balance as of December 31, 2017 346,080 584,899 199,647 149,673 1,280,299 Equity in earnings (77,909) 51,648 15,629 20,773 10,141 Cumulative Translation Adjustment 33,101 96,045 (1,377) (2,050) 125,719 Capital increase — — — 7,000 7,000 Dividends/Interest on equity — (31,359) — (23,998) (55,357) Balance as of December 31, 2018 301,272 701,233 213,899 151,398 1,367,802

PROPERTY, PLANT AND EQUIPMENT (

PROPERTY, PLANT AND EQUIPMENT (Tables)	12 Months Ended
PROPERTY, PLANT AND EQUIPMENT (Tables)	Dec. 31, 2018
PROPERTY, PLANT AND EQUIPMENT
Summary of changes in property, plant and equipment	Property, plant and Machines, equipment, Data electronic equipment under Land and buildings and installations equipment construction Other Total Cost of the property, plant, and equipment Balances as of January 01, 2016 10,842,802 32,616,700 939,266 4,068,876 1,470,485 49,938,129 Additions 35,238 93,290 2,126 1,117,317 75,920 1,323,891 Capitalized interest — — — 187,375 — 187,375 Transfers 584,575 2,665,898 74,804 (3,314,746) (10,531) — Disposals (81,256) (271,104) (60,542) (1,550) (46,888) (461,340) Effect of selling of subsidiary (1,011,492) (1,726,440) (112,319) (53,630) (52,281) (2,956,162) Impairment (52,071) (183,788) (228) — (3,242) (239,329) Foreign exchange effect (834,043) (2,560,676) (81,033) (240,994) (74,219) (3,790,965) Balances as of December 31, 2016 9,483,753 30,633,880 762,074 1,762,648 1,359,244 44,001,599 Additions 2,028 124,136 1,770 687,019 58,376 873,329 Capitalized interest — — — 44,260 — 44,260 Transfers 700,318 716,685 19,340 (1,440,183) 3,840 — Disposals (157,625) (232,771) (12,963) (60,151) (49,962) (513,472) Loss of control by selling of subsidiary (119,928) (900,840) (16,426) (1,382) (53,129) (1,091,705) Impairment (10,063) (255,293) — — (13) (265,369) Transfer to assets held for sale (1,013,466) (2,734,923) (53,315) (107,677) (171,404) (4,080,785) Foreign exchange effect 200,681 665,730 11,158 66,146 28,745 972,460 Balances as of December 31, 2017 9,085,698 28,016,604 711,638 950,680 1,175,697 39,940,317 Additions 13,739 66,764 11,811 983,519 119,101 1,194,934 Capitalized interest — — — 23,999 — 23,999 Transfers 140,334 802,664 457 (949,888) 6,433 — Disposals (45,290) (285,860) (5,641) (3,352) (9,606) (349,749) Transfer to assets held for sale (784,464) (749,425) (14,914) (49,579) (300,618) (1,899,000) Effects of IAS 29 adoption — 699,724 — — — 699,724 Foreign exchange effect 290,732 1,058,527 49,727 65,868 (2,895) 1,461,959 Balances as of December 31, 2018 8,700,749 29,608,998 753,078 1,021,247 988,112 41,072,184 Property, plant and Machines, equipment, Data electronic equipment under Land and buildings and installations equipment construction Other Total Accumulated depreciation Balances as of January 01, 2016 (4,387,719) (21,415,018) (827,620) — (523,446) (27,153,803) Depreciation (334,365) (1,738,759) (44,437) — (100,259) (2,217,820) Transfers (12,015) (2,368) 968 — 13,415 — Disposals 14,696 243,429 56,466 — 31,589 346,180 Loss of control by selling of subsidiary 524,209 1,515,886 95,809 — 37,965 2,173,869 Foreign exchange effect 296,523 1,792,251 69,172 — 43,920 2,201,866 Balances as of December 31, 2016 (3,898,671) (19,604,579) (649,642) — (496,816) (24,649,708) Depreciation (343,373) (1,361,561) (40,915) — (61,506) (1,807,355) Transfers (38,467) 25,886 (400) — 12,981 — Disposals 67,598 218,590 12,790 — 43,067 342,045 Loss of control by selling of subsidiary 28,691 589,951 12,627 — 41,117 672,386 Transfer to assets held for sale 370,727 1,989,917 54,275 — 95,350 2,510,269 Foreign exchange effect (101,528) (435,040) (10,969) — (16,675) (564,212) Balances as of December 31, 2017 (3,915,023) (18,576,836) (622,234) — (382,482) (23,496,575) Depreciation (291,315) (1,128,138) (34,814) — (130,611) (1,584,878) Transfers 18,341 5,234 158 — (23,733) — Disposals 29,944 258,609 2,609 — 7,970 299,132 Transfer to assets held for sale 105,787 286,204 11,667 — 234,271 637,929 Effects of IAS 29 adoption — (265,654) — — — (265,654) Foreign exchange effect (129,539) (946,240) (44,332) — 4,454 (1,115,657) Balances as of December 31, 2018 (4,181,805) (20,366,821) (686,946) — (290,131) (25,525,703) Net property, plant and equipment Balances as of December 31, 2016 5,585,082 11,029,301 112,432 1,762,648 862,428 19,351,891 Balances as of December 31, 2017 5,170,675 9,439,768 89,404 950,680 793,215 16,443,742 Balances as of December 31, 2018 4,518,944 9,242,177 66,132 1,021,247 697,981 15,546,481
Summary of useful lives of property, plant and equipment	Useful lives of property, plant and equipment Buildings 20 to 33 years Machines, equipment, and installations 10 to 20 years Furniture and fixture 5 to 10 years Vehicles 3 to 5 years Data electronic equipment 2.5 to 6 years

GOODWILL (Tables)

GOODWILL (Tables)	12 Months Ended
GOODWILL (Tables)	Dec. 31, 2018
GOODWILL
Summary of changes in goodwill	Accumulated Goodwill after Goodwill impairment losses Impairment losses Balance as of January 1, 2016 18,099,186 (2,974,756) 15,124,430 (+/-) Foreign exchange effect (2,645,368) 63,516 (2,581,852) (-) Impairment — (2,678,582) (2,678,582) (-) Effect of selling of subsidiary (393,980) — (393,980) Balance as of December 31, 2016 15,059,838 (5,589,822) 9,470,016 (+/-) Foreign exchange effect 242,510 (169,979) 72,531 (-) Impairment — (849,438) (849,438) (-) Transfer to assets held for sale (801,967) — (801,967) Balance as of December 31, 2017 14,500,381 (6,609,239) 7,891,142 (+/-) Foreign exchange effect 2,283,577 (1,062,329) 1,221,248 Balance as of December 31, 2018 16,783,958 (7,671,568) 9,112,390
Schedule of goodwill by segment	2018 2017 2016 Brazil 373,135 373,135 380,644 Special Steel 2,854,888 2,487,364 2,508,056 North America 5,884,367 5,030,643 6,581,316 9,112,390 7,891,142 9,470,016

INTANGIBLE ASSETS (Tables)

INTANGIBLE ASSETS (Tables)	12 Months Ended
INTANGIBLE ASSETS (Tables)	Dec. 31, 2018
INTANGIBLE ASSETS
Summary of intangible assets	Customer Supplier Software contracts and relationships development relationships Others Total Balance as of January 01, 2016 47,571 808,482 911,483 68,225 1,835,761 Foreign exchange effect — (60,464) (140,812) (7,509) (208,785) Acquisition — 40,643 — 13,401 54,044 Disposal — (2,145) — (13,050) (15,195) Amortization (7,845) (149,911) (155,063) (5,316) (318,135) (-) Effect of selling of subsidiary — — — (27,749) (27,749) Balance as of December 31, 2016 39,726 636,605 615,608 28,002 1,319,941 Foreign exchange effect — 2,947 3,835 884 7,666 Acquisition — 37,939 — — 37,939 Disposal — — (27,652) — (27,652) Amortization (6,940) (149,150) (125,621) (3,486) (285,197) (-) Assets held for sale — (37,512) (25,396) (17,700) (80,608) Balance as of December 31, 2017 32,786 490,829 440,774 7,700 972,089 Foreign exchange effect — 28,598 77,593 1,243 107,434 Acquisition — 67,388 — — 67,388 Disposal — (3,791) (88) — (3,879) Amortization (6,067) (167,384) (130,980) (2,505) (306,936) Balance as of December 31, 2018 26,719 415,640 387,299 6,438 836,096 Estimated useful lives 5 to 20 years 7 years 5 to 20 years 5 years
Summary of intangible assets by segment	2018 2017 2016 Brazil 295,107 351,578 412,134 Special Steel 136,910 152,640 219,878 South America 1,441 1,863 7,606 North America 402,638 466,008 680,323 836,096 972,089 1,319,941

LOANS AND FINANCING (Tables)

LOANS AND FINANCING (Tables)	12 Months Ended
LOANS AND FINANCING (Tables)	Dec. 31, 2018
LOANS AND FINANCING
Schedule of loans and financing	Annual charges () 2018 2017 Working capital 2,424,246 2,739,258 Financing of property, plant and equipment and others 1,205,281 2,108,216 Ten/Thirty Year Bonds 9,738,314 11,614,182 Total Loans and Financing 13,367,841 16,461,656 Current 1,822,183 2,004,341 Non-current 11,545,658 14,457,315 Principal amount of loans and Financing 13,178,457 16,207,120 Interest accrued of loans and Financing 189,384 254,536 Total of Debts 13,367,841 16,461,656 ()
Schedule of loans and financing by currency	2018 2017 Brazilian Real (BRL) 2,361,610 2,710,308 U.S. Dollar (USD) 10,924,355 13,333,669 Other currencies 81,876 417,679 13,367,841 16,461,656
Schedule of amortization of long term loans and financing	2018 2017 2019 — 873,274 2020 2,253,958 3,158,211 2021 1,199,045 1,730,177 2022 121,490 147,715 2023 1,209,109 1,296,597 2024 after 6,762,056 7,251,341 11,545,658 14,457,315

DEBENTURES (Tables)

DEBENTURES (Tables)	12 Months Ended
DEBENTURES (Tables)	Dec. 31, 2018
DEBENTURES
Schedule of debentures	General Quantity as of December 31, 2018 Issuance Meeting Issued Held in treasury Maturity 2018 2017 3rd- A and B May 27,1982 141,144 06/01/2021 18,871 21,377 7th July 14, 1982 68,271 07/01/2022 1,102 1,333 8th November 11, 1982 178,516 05/02/2023 8,080 14,557 9th June 10, 1983 125,365 09/01/2024 2,349 4,900 11th - A and B June 29, 1990 149,294 06/01/2020 5,716 5,761 15th November 09, 2018 — 11/21/2022 1,502,755 — Total Consolidated 1,538,873 47,928 Current 2,755 — Non-current 1,536,118 47,928
Schedule of amortization of long term debentures	2018 2017 2020 5,716 5,761 2021 18,871 21,377 2022 1,501,102 1,333 2023 8,080 14,557 2024 on 2,349 4,900 1,536,118 47,928

FINANCIAL INSTRUMENTS (Tables)

FINANCIAL INSTRUMENTS (Tables)	12 Months Ended
FINANCIAL INSTRUMENTS (Tables)	Dec. 31, 2018
FINANCIAL INSTRUMENTS
Summary of fair value of financial instruments	2018 2017 Book Fair Book Fair value value value value Assets Short-term investments 459,470 459,470 821,518 821,518 Related parties 27,939 27,939 51,839 51,839 Unrealized gains on derivatives 33,417 33,417 — — Other current assets 780,423 780,423 469,737 469,737 Other non-current assets 449,592 449,592 542,973 542,973 Liabilities Loans and Financing 13,367,841 13,533,306 16,461,656 17,102,512 Debentures 1,538,873 1,538,873 47,928 47,928 Related parties 1,350 1,350 — — Unrealized losses on financial instruments 5,245 5,245 1,267 1,267 Obligations with FIDC 938,526 938,526 1,135,077 1,135,077 Other current liabilities 988,967 988,967 625,410 625,410 Other non-current liabilities 499,092 499,092 653,670 653,670
Schedule of capital management risk	Net debt/Adjusted EBITDA From 1.0 to 1.5 times Gross debt limit R$ 12 billion Average maturity more than 6 years
Schedule of maturity of contractual obligations for liquidity risk	2018 Contractual obligations Total Less than 1 year 1-3 years 4-5 years More than 5 years Trade accounts payable 4,335,054 4,335,054 — — — Loans and financings 20,613,734 2,817,346 5,053,827 2,509,962 10,232,599 Debentures 1,940,474 104,995 231,817 1,600,632 3,030 Unrealized losses on financial instruments 5,245 5,245 — — — Obligations with FIDC 938,526 — 827,137 111,389 — Other current liabilities 988,967 988,967 — — — Other non-current liabilities 499,092 — 13,295 — 485,797 29,321,092 8,251,607 6,126,076 4,221,983 10,721,426 2017 Contractual obligations Total Less than 1 year 1-3 years 4-5 years More than 5 years Trade accounts payable 3,179,954 3,179,954 — — — Loans and financings 24,470,751 3,191,793 6,060,187 3,168,144 12,050,627 Debentures 59,128 — 6,528 40,289 12,311 Unrealized losses on financial instruments 1,267 1,267 — — — Obligations with FIDC 1,135,077 — — — 1,135,077 Other current liabilities 625,410 625,410 — — — Other non-current liabilities 653,670 — 13,209 — 640,461 30,125,257 6,998,424 6,079,924 3,208,433 13,838,476
Schedule of sensitivity analysis	Assumptions Percentage of change 2018 2017 Foreign currency sensitivity analysis 113,445 129,209 Interest rate sensitivity analysis 10 bps 55,959 54,908 Sensitivity analysis of changes in prices of products sold 461,595 369,176 Sensitivity analysis of changes in raw material and commodity prices 296,234 234,239 Sensitivity analysis of interest rate and foreign currency swaps 10 bps/5% 11,073 6,479 Sensitivity analysis of Swap of interest rate 50bps 476 — Sensitivity analysis of NDF (Non Deliverable Forwards) 7,063 1,480
Schedule of financial instruments per category	Financial asset at fair Financial asset at fair 2018 Financial asset at value through profit or value through other Assets amortized cost loss comprehensive income Total Short-term investments — 459,470 — 459,470 Unrealized gains on financial instruments — — 33,417 33,417 Related parties 27,939 — — 27,939 Other current assets 780,423 — — 780,423 Other non-current assets 449,592 — — 449,592 Total 1,257,954 459,470 33,417 1,750,841 Financial income 629,750 115,081 — 744,831 Financial liability at fair value through profit or Financial liability at Liabilities loss amortized cost Total Loans and financings — 13,367,841 13,367,841 Debentures — 1,538,873 1,538,873 Related parties — 1,350 1,350 Obligations with FIDC — 938,526 938,526 Other current liabilities — 988,967 988,967 Other non-current liabilities — 499,092 499,092 Unrealized losses on financial instruments 5,245 — 5,245 Total 5,245 17,334,649 17,339,894 Financial income (expenses) (17,484) (2,617,142) (2,634,626) Assets at fair value with 2017 gains and losses Assets Loans and receivables recognized in income Total Short-term investments — 821,518 821,518 Related parties 51,839 — 51,839 Other current assets 469,737 — 469,737 Other non-current assets 462,735 80,238 542,973 Total 984,311 901,756 1,886,067 Financial income 177,466 87,242 264,708 Liabilities at market value with gains and Other financial losses recognized in liabilities at amortized Liabilities income cost Total Loans and financings — 16,461,656 16,461,656 Debentures — 47,928 47,928 Obligations with FIDC — 1,135,077 1,135,077 Other current liabilities — 625,410 625,410 Other non-current liabilities — 653,670 653,670 Unrealized losses on financial instruments 1,267 — 1,267 Total 1,267 18,923,741 18,925,008 Financial income (expenses) (12,503) (1,395,553) (1,408,056)
Summary of derivative instruments	Notional value Amount receivable Amount payable Contracts Position 2018 2017 2018 2017 2018 2017 Forward Maturity at 2019 purchase in US$ US$ 19.2 million — — — (4,069) — Maturity at 2019 sell in US$ US$ 18.3 million — 462 — (1,176) — Cross currency swap Maturity in 2018 INR 10.17% — US$ 40.0 million — — — (1,267) Maturity in 2019 CDI 111.50% R$ 230.5 million — 30,249 — — — Swap of interest rate Maturity in 2020 CDI 111.50% R$ 50.0 million — 2,706 — — — Total fair value of financial instruments 33,417 — (5,245) (1,267)
Summary of prospective and retrospective tests of derivative financial instruments	2018 2017 Unrealized gains on financial instruments Current assets 30,711 — Non-current assets 2,706 — 33,417 — Unrealized losses on financial instruments Current liabilities (5,245) — Non-current liabilities — (1,267) — (1,267) 2018 2017 Net Income Gains on financial instruments 49,576 9,666 Losses on financial instruments (17,484) (19,107) 32,092 (9,441) Other comprehensive income Gains (Losses) on financial instruments 11,947 (11,364) 11,947 (11,364)
Schedule of financial assets and liabilities measures at fair value on recurring basis	Fair Value Measurements at Reporting Date Using Quoted Prices in Non-Active Quoted Prices Active Markets for Markets for Similar Assets Identical Assets (Level 1) (Level 2) 2018 2017 2018 2017 2018 2017 Current assets Short-term investments 459,470 821,518 114,027 238,008 345,443 583,510 Unrealized gains on financial instruments 30,711 — — — 30,711 — Other current assets 780,423 469,737 — — 780,423 469,737 Non-current assets Related parties 27,939 51,839 — — 27,939 51,839 Unrealized gains on financial instruments 2,706 — — — 2,706 — Other non-current assets 449,592 542,973 — — 449,592 542,973 1,750,841 1,886,067 114,027 238,008 1,636,814 1,648,059 Current liabilities Short-term debt 1,822,183 2,004,341 — — 1,822,183 2,004,341 Unrealized losses on financial instruments 5,245 — — — 5,245 — Other current liabilities 988,967 625,410 — — 988,967 625,410 Non-current liabilities Long-term debt 11,545,658 14,457,315 — — 11,545,658 14,457,315 Debentures 1,538,873 47,928 — — 1,538,873 47,928 Related parties 1,350 — — — 1,350 — Unrealized losses on financial instruments — 1,267 — — — 1,267 Obligations with FIDC 938,526 1,135,077 — — 938,526 1,135,077 Other non-current liabilities 499,092 653,670 — — 499,092 653,670 17,339,894 18,925,008 — — 17,339,894 18,925,008
Summary of changes in liabilities of cash flow from financing activities	Cash transactions Non cash transactions Exchange variation, Interest expense on operations with Interest paid loans and Interest on subsidiaries and Balances as of Proceeds/(Repayment) on loans and loans with related associate company and Balances as of December 31, 2017 from financing activities financing parties others December 31, 2018 Related parties, net (51,839) 25,755 — (545) 40 (26,589) Debt, Debentures and Losses/Gains on financial instruments, net 16,510,851 (3,439,644) (1,162,364) 1,177,686 1,825,430 14,911,959 Cash transactions Non cash transactions Exchange variation, Interest expense on operations with Interest paid loans and Interest on subsidiaries and Balances as of Proceeds/(Repayment) on loans and loans with related associate company and Balances as of December 31, 2016 from financing activities financing parties others December 31, 2017 Related parties, net (57,541) 5,797 — (95) — (51,839) Debt, Debentures and Losses/Gains on financial instruments, net 20,576,866 (3,975,541) (1,330,116) 1,323,448 (83,806) 16,510,851 Cash transactions Non cash transactions Exchange variation, Interest expense on operations with Interest paid loans and Interest on subsidiaries and Balances as of Proceeds/(Repayment) on loans and loans with related associate company and Balances as of Januray 1, 2016 from financing activities financing parties others December 31, 2016 Related parties, net (53,506) (6,492) — 2,457 — (57,541) Debt, Debentures and Losses/Gains on financial instruments, net 26,417,256 (2,150,035) (1,240,165) 1,540,797 (3,990,987) 20,576,866

TAXES PAYABLE (Tables)

TAXES PAYABLE (Tables)	12 Months Ended
TAXES PAYABLE (Tables)	Dec. 31, 2018
TAXES PAYABLE
Schedule of taxes payable	2018 2017 Payroll charges 58,907 75,752 ICMS (state VAT) 25,385 37,444 COFINS (tax on revenue) 2,162 5,411 IPI (federal VAT) 14,372 17,305 IVA (value-added tax) and others 250,719 148,189 351,545 284,101

TAX, CIVIL AND LABOR CLAIMS A_2

TAX, CIVIL AND LABOR CLAIMS AND CONTINGENT ASSETS (Tables)	12 Months Ended
TAX, CIVIL AND LABOR CLAIMS AND CONTINGENT ASSETS (Tables)	Dec. 31, 2018
TAX, CIVIL AND LABOR CLAIMS AND CONTINGENT ASSETS
Schedule of provisions for tax, civil and labor claims	2018 2017 a) Tax provisions 268,009 257,621 b) Labor provisions 449,350 517,329 c) Civil provisions 52,946 52,933 770,305 827,883
Schedule of changes in the tax, labor and civil provisions	2018 2017 2016 Balance at the beginning of the year 827,883 2,239,226 1,904,730 (+) Additions 177,684 527,543 313,246 (+) Monetary correction 85,626 77,257 178,661 (-) Reversal of contingent liabilities — (929,711) — (-) Reversal of monetary update of contingent liabilities — (369,819) — (-) Reversal of accrued amounts (319,719) (715,081) (144,025) (+) Foreign exchange effect on provisions in foreign currency (1,169) (201) (3,235) (-) Loss of control of subsidiary — (1,331) (10,151) Balance at the end of the year 770,305 827,883 2,239,226
Schedule of judicial deposits related to tax, labor and civil lawsuits	2018 2017 Tax 1,963,859 1,883,562 Labor 126,620 128,849 Civil 44,935 38,770 2,135,414 2,051,181

RELATED-PARTY TRANSACTIONS (Tab

RELATED-PARTY TRANSACTIONS (Tables)	12 Months Ended
RELATED-PARTY TRANSACTIONS (Tables)	Dec. 31, 2018
RELATED-PARTY TRANSACTIONS
Schedule of intercompany loans	2018 2017 Assets Joint venture Gerdau Corsa SAPI de C.V. 72 7 Others Fundação Gerdau 27,867 51,832 27,939 51,839 Liabilities Joint venture Diaco S.A. (1,350) — (1,350) — 2018 2017 2016 Net financial income 545 95 (2,457)
Summary of guarantees granted	Original Related Party Relationship Object Amount Maturity 2018 2017 2016 Diaco S.A. Joint-venture Financing Agreements 137,700 Aug/18 — 128,019 — Gerdau Corsa S.A.P.I. de C.V. Joint-venture Financing Agreements 1,875,345 Jan/19 - Dec/21 1,933,929 1,797,856 2,016,260 Gerdau Summit Aços Fundidos e Forjados S.A. Joint-venture Financing Agreements 130,164 Aug/25 41,571 6,550 — Gerdau Metaldom S.A.; Aceros Corsa S.A. de C.V. and Gerdau Corsa S.A.P.I de C.V.; Subsidiary and Joint-venture Financing Agreements — Oct/20 198,619 178,200 —
Schedule of key management compensation	Stock options granted to management are as follows: Number of Weighted shares exercise price R$ Available at beginning of the year 198,000 18.19 Options Cancelled (198,000) 18.62 Available at the end of the year — — At the end of the year, the Restricted Shares resulting from the conversion process within the key management were: 2018 2017 Available at beginning of the year 5,945,310 4,831,999 Granted 1,255,286 1,353,930 Exercised (511,333) (240,619) Shares adjustment (313,716) — Available at the end of the year 6,375,547 5,945,310

EMPLOYEE BENEFITS (Tables)

EMPLOYEE BENEFITS (Tables)	12 Months Ended
EMPLOYEE BENEFITS (Tables)	Dec. 31, 2018
EMPLOYEE BENEFITS
Schedule of total assets and liabilities of all types of employee benefits granted	2018 2017 Plan assets - Defined contribution pension plan 17,952 1,149 Total assets 17,952 1,149 Actuarial liabilities - Defined benefit pension plan 1,057,846 1,084,758 Acturial liabilities - Post-employment health care benefit 272,369 316,230 Retirement and termination benefit liabilities 26,502 23,876 Total liabilities 1,356,717 1,424,864 Current 157 253 Non-current 1,356,560 1,424,611
Post-employment defined benefit pension plans
EMPLOYEE BENEFITS
Summary of sensitivity analysis	1% Increase 1% Decrease Discount rate (14,689) 10,346
Defined benefit pension plan
EMPLOYEE BENEFITS
Schedule of current expenses of benefit plans	2018 2017 2016 Cost of current service 60,803 60,595 57,619 Interest expense 82,513 90,381 199,389 Return on plan assets (59,692) (64,128) (186,856) Past service cost 7,065 1,082 2,788 Settlement 3,220 (566) 609 Interest cost on unrecoverable surplus 20,023 21,211 22,916 Net pension cost 113,932 108,575 96,465
Schedule of reconciliations of assets and liabilities of benefit plans	2018 2017 Present value of defined benefit obligation (4,391,251) (4,314,592) Fair value of plan assets 3,568,934 3,456,613 Asset ceiling restrictions on recognition of net funded assets (235,532) (226,779) Net (1,057,849) (1,084,758) Plan assets — — Defined benefit obligation (1,057,849) (1,084,758)
Schedule of variation of plan obligations and assets	2018 2017 2016 Variation of the plan obligations Obligation at the begining of the year 4,314,592 4,174,653 4,739,299 Cost of service 60,803 60,595 57,619 Interest expense 188,729 195,557 199,389 Payments of the benefits (318,198) (335,471) (317,505) Past service cost 7,065 1,082 2,788 Supplementary amounts of the plan 17,078 — — Settlement (61,369) (52,035) 609 Acturial remeasurements (370,083) 235,549 186,905 Liabilities held for sale — (101,794) — Exchange Variance 552,634 136,456 (694,451) Obligation at the end of the year 4,391,251 4,314,592 4,174,653 2018 2017 2016 Variation of the plan assets Fair value of the plan assets at the begining of the year 3,456,613 3,292,890 3,865,411 Return of the plan assets 165,908 169,304 186,857 Contributions from sponsors 197,828 111,450 (47,574) Settlement (64,868) (51,469) (6,710) Payments of benefits (318,198) (335,471) (317,505) Remeasurement (253,301) 232,214 109,153 Assets held for sale — (73,127) — Exchange Variance 384,952 110,822 (496,742) Fair value of plan assets at the end of the year 3,568,934 3,456,613 3,292,890
Summary of actuarial gains and losses recognized in other comprehensive income	2018 2017 2016 Remeasurements 253,301 (232,214) (109,153) Actuarial Remeasurements (370,083) 235,549 186,905 Restriction recognized in Other Comprehensive Income (43,197) (1,696) 3,065 Remeasurements recognized in Other Comprehensive Income (159,979) 1,639 80,817
Summary of historical actuarial remeasurements	2018 2017 2016 2015 2014 Present value of defined benefit obligation (4,391,251) (4,314,592) (4,174,653) (4,739,299) (3,791,670) Fair value of the plan assets 3,568,934 3,456,613 3,292,890 3,865,411 3,319,133 Surplus (Deficit) (822,317) (857,979) (881,763) (873,888) (472,537) Experience adjustments on plan liabilities (Gain) (370,083) 235,549 186,905 (202,749) 466,829 Experience adjustments on plan assets (Gain) 253,301 (232,214) (109,153) 235,275 (69,748)
Summary of allocation for plan assets	2018 Brazilian Plans American Plans Fixed income Variable income — Others Total 2017 Brazilian Plans American Plans Fixed income Variable income — Others Total
Summary of assumptions	2018 Brazilian Plan North America Plan Average discount rate 3.50% - 4.25% Rate of increase in compensation Not applicable Mortality table AT-2000 per sex RP-2006 and MP-2018 Mortality table of disabled AT-2000 per sex RP-2006 and MP-2018 Rate of rotation Based on plan background Based on age and/or the service 2017 Brazilian Plan North America Plan Average discount rate 3.25% - 4.25% Rate of increase in compensation Not applicable Mortality table AT-2000 per sex RP-2006 and MP-2017 Mortality table of disabled AT-2000 per sex RP-2006 and MP-2017 Rate of rotation Based on plan background Based on age and/or the service
Post-employment health care benefit
EMPLOYEE BENEFITS
Summary of sensitivity analysis	1% Increase 1% Decrease Effect over total service costs and interest costs 2,051 (1,612) Effect over benefit plan obligations 27,517 (22,743)
Schedule of current expenses of benefit plans	2018 2017 2016 Current service cost 4,144 4,441 4,481 Interests expense 11,082 12,162 15,494 Past service cost (40,740) 5,769 (75,787) Net cost pension benefit (25,514) 22,372 (55,812)
Schedule of reconciliations of assets and liabilities of benefit plans	2018 2017 Present value of obligations (272,959) (316,364) Total net liabilities (272,959) (316,364)
Schedule of variation of plan obligations and assets	2018 2017 2016 Change in benefit obligation Benefit obligation at beginning of the year 316,364 305,447 446,842 Cost of service 4,144 4,441 4,481 Interest expense 11,082 12,162 15,494 Past service cost (40,740) 5,769 (75,787) Contributions from participants 1,496 1,556 2,212 Payment of benefits (18,655) (14,230) (14,799) Remeasurements (40,841) (14,452) (3,673) Exchange variations 40,109 15,671 (69,323) Benefit obligation at the end of the year 272,959 316,364 305,447 2018 2017 2016 Change in plan assets Contributions from sponsors 17,159 12,572 12,463 Contributions from participants 1,496 1,556 2,212 Payments of benefits (18,655) (14,128) (14,675) Fair value of plan assets at end of the year — — —
Summary of actuarial gains and losses recognized in other comprehensive income	2018 2017 2016 Losses on actuarial obligation (40,841) (14,452) (3,673) Actuarial losses recognized in Equity (40,841) (14,452) (3,673)
Summary of historical actuarial remeasurements	2018 2017 2016 2015 2014 Present value of defined benefit obligation (272,959) (316,364) (305,447) (446,843) (351,538) Deficit (272,959) (316,364) (305,447) (446,843) (351,538) Experience adjustments on plan liabilities (40,841) (14,452) (3,673) (45,884) 42,345
Summary of assumptions	2018 2017 Average discount rate 3.75% - 4.25% 3.25% - 3.50% Health treatment - rate assumed next year 6.60% - 6.75% 6.88% - 7.60% Health treatment - Assumed rate of decline in the cost to achieve in the years of 2026 to 2041 4.00% - 4.40% 4.00% - 4.50%

ENVIRONMENTAL LIABILITIES (Tabl

ENVIRONMENTAL LIABILITIES (Tables)	12 Months Ended
ENVIRONMENTAL LIABILITIES (Tables)	Dec. 31, 2018
ENVIRONMENTAL LIABILITIES
Schedule of provision for environmental liabilities	2018 2017 Provision for environmental liabilities 132,647 85,191 Current 60,419 21,928 Non-current 72,228 63,263

EQUITY (Tables)

EQUITY (Tables)	12 Months Ended
EQUITY (Tables)	Dec. 31, 2018
EQUITY
Schedule of reconciliations of common and preferred outstanding shares	2018 2017 2016 Common shares Preferred shares Common shares Preferred shares Common shares Preferred shares Balance at beginning of the year 571,929,945 1,137,327,184 571,929,945 1,137,018,570 571,929,945 1,114,744,538 Acquisition of Treasury shares — (16,000,000) — — — (10,000,000) Exercise of stock options — 1,597,235 — 308,614 — 2,274,032 Transfer of shares — 1,309,336 — — — 30,000,000 Balance at the end of the year 571,929,945 1,124,233,755 571,929,945 1,137,327,184 571,929,945 1,137,018,570
Schedule of ownership of shares	Shareholders 2018 Shareholders Common % Pref. % Total % Metalúrgica Gerdau S.A. * 557,898,901 97.3 95,469,922 8.3 653,368,823 38.0 Brazilian institutional investors 2,383,207 0.4 224,073,547 19.6 226,456,754 13.2 Foreign institutional investors 4,836,488 0.8 410,387,290 35.8 415,223,778 24.1 Other shareholders 6,811,349 1.2 394,302,996 34.4 401,114,345 23.3 Treasury stock 1,697,538 0.3 21,797,490 1.9 23,495,028 1.4 573,627,483 100.0 1,146,031,245 100.0 1,719,658,728 100.0 Shareholders 2017 Shareholders Common % Pref. % Total % Metalúrgica Gerdau S.A. * 557,898,901 97.3 95,471,131 8.3 653,370,032 38.0 Brazilian institutional investors 254,785 155,227,424 13.5 155,482,209 9.0 Foreign institutional investors 7,254,556 1.3 708,109,387 61.8 715,363,943 41.6 Other shareholders 6,521,703 1.1 178,519,242 15.6 185,040,945 10.8 Treasury stock 1,697,538 0.3 8,704,061 0.8 10,401,599 0.6 573,627,483 100.0 1,146,031,245 100.0 1,719,658,728 100.0 Shareholders 2016 Shareholders Common % Pref. % Total % Metalúrgica Gerdau S.A.* 449,712,654 78.4 202,806,626 17.7 652,519,280 37.9 Brazilian institutional investors 41,883,032 7.3 92,721,295 8.1 134,604,327 7.8 Foreign institutional investors 11,122,498 1.9 705,652,715 61.5 716,775,213 41.8 Other shareholders 69,211,761 12.1 135,837,934 11.9 205,049,695 11.9 Treasury stock 1,697,538 0.3 9,012,675 0.8 10,710,213 0.6 573,627,483 100.0 1,146,031,245 100.0 1,719,658,728 100.0 *
Schedule of changes in treasury stocks	2018 Common shares R$ Preferred shares R$ Opening balance 1,697,538 557 8,704,061 75,528 Repurchases — — 16,000,000 243,396 Exercise of stock options — — (1,597,235) (27,433) Transfer of shares — — (1,309,336) (11,622) Closing balance 1,697,538 557 21,797,490 279,869 2017 Common shares R$ Preferred shares R$ Opening balance 1,697,538 557 9,012,675 98,189 Exercise of stock options — — (308,614) (22,661) Closing balance 1,697,538 557 8,704,061 75,528 2016 Common shares R$ Preferred shares R$ Opening balance 1,697,538 557 31,286,707 382,806 Repurchases — — 10,000,000 95,343 Exercise of stock options — — (2,274,032) (10,461) Transfer of shares — — (30,000,000) (369,499) Closing balance 1,697,538 557 9,012,675 98,189
Schedule of effects of interest changes in subsidiaries	December 31, 2018 Attributed to parent company’s Non-controlling interest interests Total (i) Other changes — (85,483) (85,483) Effects of interest changes in subsidiaries — (85,483) (85,483) December 31, 2017 Attributed to parent company’s Non-controlling interest interests Total (i) Other changes — (21,698) (21,698) Effects of interest changes in subsidiaries — (21,698) (21,698) December 31, 2016 Attributed to parent company’s Non-controlling interest interests Total (i) Other changes — (6,405) (6,405) Effects of interest changes in subsidiaries — (6,405) (6,405) (i)
Schedule of dividend amounts considered as distributed using the balance of the Investments and Working Capital Reserve	2018 2017 2016 Net income (loss) 2,303,868 (359,360) (2,890,811) Constitution of legal reserve (115,193) — — Constitution of the tax incentives reserve (17,051) — — Net income (loss) before dividends and interest on capital 2,171,624 (359,360) (2,890,811) Dividends and interest on capital (765,339) — — Net income (loss) before constitution of investments and working capital reserve 1,406,285 (359,360) (2,890,811) Constitution of investments and working capital reserve (1,406,285) — — Absorption of net loss by investments and working capital reserve — 359,360 2,890,811
Schedule of dividends and interest on capital	Dividends and interest on capital in the years Outstanding shares Period Nature R$ /share (thousands) Credit Payment 2018 2017 2016 1 st quarter Interest 0.08 1,701,894 05/21/2018 06/01/2018 136,152 — — 2 nd quarter Interest 0.14 1,702,095 08/21/2018 08/31/2018 238,293 — — 2 nd quarter Dividends — 34,184 51,225 3 rd quarter Dividends 0.13 1,702,138 11/21/2018 12/03/2018 221,278 51,278 34,152 4 th quarter Dividends 0.10 1,696,164 03/06/2019 03/18/2019 169,616 51,020 — Interest and Dividends 765,339 136,482 85,377 Credit per share (R$) 0.45 0.08 0.05

EARNINGS (LOSS) PER SHARE (EP_2

EARNINGS (LOSS) PER SHARE (EPS) (Tables)	12 Months Ended
EARNINGS (LOSS) PER SHARE (EPS) (Tables)	Dec. 31, 2018
EARNINGS (LOSS) PER SHARE (EPS)
Schedule of basic and diluted earnings (loss) per share	Basic 2018 Common Preferred Total (in thousands, except share and per share data) Basic numerator Allocated net income (loss) available to common and preferred shareholders 774,279 1,529,589 2,303,868 Basic denominator Weighted-average outstanding shares, after deducting the average tresuary shares 571,929,945 1,129,851,598 Earnings per share (in R$) — Basic 1.35 1.35 2017 Common Preferred Total (in thousands, except share and per share data) Basic numerator Allocated net income (loss) available to common and preferred shareholders (120,267) (239,093) (359,360) Basic denominator Weighted-average outstanding shares, after deducting the average tresuary shares 571,929,945 1,137,012,265 Loss per share (in R$) — Basic (0.21) (0.21) 2016 Common Preferred Total (in thousands, except share and per share data) Basic numerator Allocated net income (loss) available to common and preferred shareholders (969,954) (1,920,857) (2,890,811) Basic denominator Weighted-average outstanding shares, after deducting the average tresuary shares 571,929,945 1,132,626,373 Loss per share (in R$) — Basic (1.70) (1.70) Diluted Diluted numerator 2018 Allocated net income available to Common and Preferred shareholders Net income allocated to preferred shareholders 1,529,589 Add: Adjustment to net income allocated to preferred shareholders in respect to the potential increase in number of preferred shares outstanding, as a result of options granted to acquire stock of Gerdau. 6,515 1,536,104 Net income allocated to common shareholders 774,279 Less: Adjustment to net income allocated to preferred shareholders in respect to the potential increase in number of preferred shares outstanding, as a result of options granted to acquire stock of Gerdau. (6,515) 767,764 Diluted denominator Weighted - average number of shares outstanding Common Shares 571,929,945 Preferred Shares Weighted-average number of preferred shares outstanding 1,129,851,598 Potential increase in number of preferred shares outstanding in respect of stock option plan 14,440,860 Total 1,144,292,458 Earnings per share — Diluted (Common and Preferred Shares) 1.34

NET SALES (Tables)

NET SALES (Tables)	12 Months Ended
NET SALES (Tables)	Dec. 31, 2018
NET SALES
Schedule of net sales revenues	2018 2017 2016 Gross sales 51,861,423 42,156,553 42,935,022 Taxes on sales (3,793,516) (2,956,896) (2,765,957) Discounts (1,908,429) (2,282,038) (2,517,398) Net sales 46,159,478 36,917,619 37,651,667

LONG-TERM INCENTIVE PLANS (Tabl

LONG-TERM INCENTIVE PLANS (Tables)	12 Months Ended
LONG-TERM INCENTIVE PLANS (Tables)	Dec. 31, 2018
LONG-TERM INCENTIVE PLANS
Summary of changes in restricted and performance shares	Balance on January 1, 2016 12,525,256 Granted 13,357,922 Cancelled (3,046,593) Exercised (2,403,094) Balance on December 31, 2016 20,433,491 Granted 3,170,952 Cancelled (1,901,782) Exercised (2,727,577) Balance on December 31, 2017 18,975,084 Granted 2,411,345 Cancelled (3,150,635) Exercised (3,974,293) Balance on December 31, 2018 14,261,501
Schedule of stock option activity	2018 2017 2016 Average exercise Average exercise Average exercise Number of shares price in the year Number of shares price in the year Number of shares price in the year R$ R$ R$ Available at beginning of the year 292,391 17.91 569,115 16.64 1,074,246 18.36 Options Exercised (33,499) 14.86 — — — — Options Forfeited (243,412) 18.62 (276,724) 15.11 (505,131) 20.49 Available at the end of the year 15,480 16.72 292,391 17.91 569,115 16.64
Summary of stock options by exercise price	Number Average period of Average exercisable at Exercise price Quantity grace (in years) exercise price December 31, 2018* R$ R$ 16.86 10,754 0.2 15.90 10,754 R$ 18.58 4,726 4.0 18.58 4,726 15,480 15,480 *

SEGMENT REPORTING (Tables)

SEGMENT REPORTING (Tables)	12 Months Ended
SEGMENT REPORTING (Tables)	Dec. 31, 2018
SEGMENT REPORTING
Schedule of company's segment information classified according to the business segments	Business Segments 2018 North America South America Special Steels Eliminations and Brazil Operation Operation Operation Operation Adjustments Consolidated Net sales 15,745,161 19,927,390 3,801,210 8,158,626 (1,472,909) 46,159,478 Cost of sales (13,044,433) (18,164,834) (3,230,952) (7,064,608) 1,494,727 (40,010,100) Gross profit 2,700,728 1,762,556 570,258 1,094,018 21,818 6,149,378 Selling, general and administrative expenses (564,031) (607,581) (136,707) (186,037) (168,438) (1,662,794) Other operating income (expenses) (33,814) 19,114 (11,421) 10,081 (18,952) (34,992) Results in operations with subsidiaries and associate company — — — — (414,507) (414,507) Equity in earnings of unconsolidated companies (1,700) (77,872) 51,648 15,629 22,436 10,141 Operational (Loss) income before financial income (expenses) and taxes 2,101,183 1,096,217 473,778 933,691 (557,643) 4,047,226 Financial result, net (442,966) (37,351) (117,270) (112,109) (1,180,099) (1,889,795) Income (Loss) before taxes 1,658,217 1,058,866 356,508 821,582 (1,737,742) 2,157,431 Income and social contribution taxes (410,651) (224,897) (86,667) (191,386) 1,082,552 168,951 Net income (Loss) 1,247,566 833,969 269,841 630,196 (655,190) 2,326,382 Supplemental information: Net sales between segments 1,280,770 84,335 4,988 102,816 — 1,472,909 Depreciation/amortization 951,826 511,154 88,537 340,297 — 1,891,814 Investments in associates and jointly-controlled entities 3,250 301,271 701,233 213,899 148,149 1,367,802 Total assets 17,473,039 14,659,926 4,421,487 8,825,830 5,900,747 51,281,029 Total liabilities 8,072,380 4,935,210 1,053,007 1,736,085 9,545,776 25,342,458 Business Segments 2017 North America South America Special Steels Eliminations and Brazil Operation Operation Operation Operation 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) Results in operations with 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 North America South America Special Steels Eliminations and Brazil Operation Operation Operation Operation 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) Results in operations with 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
Schedule of company's geographic information classified according to the geographical region	Geographic Area Brazil Latin America (1) North America (2) Europe/Asia Consolidated 2018 2018 2018 2018 2018 Net sales 17,284,473 4,785,281 23,524,381 565,343 46,159,478 Total assets 26,283,287 5,251,637 19,746,105 — 51,281,029 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 (1) (2)

INSURANCE (Tables)

INSURANCE (Tables)	12 Months Ended
INSURANCE (Tables)	Dec. 31, 2018
INSURANCE
Schedule of types of insurance	Type Scope 2018 2017 Equity Inventories and property, plant and equipment items are insured against fire, electrical damage, explosion, machine breakage and overflow (leakage of material in fusion state). 64,676,890 57,062,113 Business Interruption Net income plus fixed expenses 6,610,851 6,464,512 Civil Liability Industrial operations 627,718 535,896

EXPENSES BY NATURE (Tables)

EXPENSES BY NATURE (Tables)	12 Months Ended
EXPENSES BY NATURE (Tables)	Dec. 31, 2018
EXPENSES BY NATURE
Schedule of expenses classified by nature	2018 2017 2016 Depreciation and amortization (1,891,814) (2,092,551) (2,535,955) Labor expenses (5,724,352) (5,514,721) (6,508,834) Raw material and consumption material (29,623,418) (23,423,950) (22,863,693) Freight (2,770,516) (2,281,773) (2,279,459) Impairment of assets — (1,114,807) (2,917,911) Gains and losses on assets held for sale and sales of interest in subsidiaries (414,507) (721,682) (58,223) Reversal of provision for tax liabilities, net — 929,711 — Other expenses/income, net (1,697,786) (1,563,177) (2,111,181) (42,122,393) (35,782,950) (39,275,256) Classified as: Cost of sales (40,010,100) (33,312,995) (34,187,941) Selling expenses (570,431) (524,965) (710,766) Allowance for doubtful accounts (9,914) — — General and administrative expenses (1,082,449) (1,129,943) (1,528,262) Other operating income 235,421 260,618 242,077 Other operating expenses (270,413) (168,887) (114,230) Impairment of assets — (1,114,807) (2,917,911) Gains and losses on assets held for sale and sales of interest in subsidiaries (414,507) (721,682) (58,223) Reversal of provision for tax liabilities, net — 929,711 — (42,122,393) (35,782,950) (39,275,256)

FINANCIAL INCOME (Tables)

FINANCIAL INCOME (Tables)	12 Months Ended
FINANCIAL INCOME (Tables)	Dec. 31, 2018
FINANCIAL INCOME
Schedule of financial income	2018 2017 2016 Income from short-term investments 68,721 85,153 142,965 Interest income and other financial income 135,279 141,462 109,080 Financial Income 204,000 226,615 252,045 Interest on debt (1,177,686) (1,323,448) (1,540,797) Monetary variation and other financial expenses (401,655) (402,836) (469,208) Financial Expenses (1,579,341) (1,726,284) (2,010,005) Bonds repurchases (223,925) — — Exchange Variation, net (322,621) (4,057) 851,635 Reversal of interest on provision for tax liabilities, net — 369,819 — Gains and losses on derivative financial instruments, net 32,092 (9,441) (38,930) Financial result, net (1,889,795) (1,143,348) (945,255)

SUMMARY OF SIGNIFICANT ACCOUN_4

SUMMARY OF SIGNIFICANT ACCOUNTING PRACTICES (Details) R$ in Thousands	12 Months Ended
	Dec. 31, 2018BRL (R$)shares	Dec. 31, 2017
Hyperinflation
Effects of application of IAS 29, recognized in equity, net of tax	R$ 507887
Dividends
Minimum annual mandatory dividend (as a percent)	30.00%
Legal reserve, as a percent of net income	5.00%
Dilutive effect of instruments on EPS
Antidilutive shares excluded from calculation of diluted EPS \| shares	0
Subsidiaries in Argentina
Hyperinflation
Effects of application of IAS 29, recognized in equity, net of tax	R$ 507887
Effects of application of IAS 29, recognized in financial results	(38,105)
Effects to net income of application of IAS 29	R$ 29455
Venezuelan Bolivar Forte
Hyperinflation
Foreign Currency Hyperinflation Exchange Rate	164.70	1,011.19

SUMMARY OF SIGNIFICANT ACCOUN_5

SUMMARY OF SIGNIFICANT ACCOUNTING PRACTICES - New IFRS and Interpretations of the IFRIC (Details) - BRL (R$) R$ in Thousands	Jan. 01, 2018	Jan. 01, 2019	Dec. 31, 2018	Dec. 31, 2017
FINANCIAL INSTRUMENTS
Financial assets			R$ 1750841	R$ 1886067
Financial liabilities			17,339,894	18,925,008
Financial liabilities at amortized cost
FINANCIAL INSTRUMENTS
Financial liabilities			17,334,649	18,923,741
Financial liability at fair value through profit or loss
FINANCIAL INSTRUMENTS
Financial liabilities			5,245	1,267
Debentures
FINANCIAL INSTRUMENTS
Financial liabilities			1,538,873	47,928
Debentures \| Financial liabilities at amortized cost
FINANCIAL INSTRUMENTS
Financial liabilities			1,538,873	47,928
Unrealized losses on financial instruments
FINANCIAL INSTRUMENTS
Financial liabilities			5,245	1,267
Unrealized losses on financial instruments \| Financial liability at fair value through profit or loss
FINANCIAL INSTRUMENTS
Financial liabilities			5,245	1,267
Obligation with FIDC
FINANCIAL INSTRUMENTS
Financial liabilities			938,526	1,135,077
Obligation with FIDC \| Financial liabilities at amortized cost
FINANCIAL INSTRUMENTS
Financial liabilities			938,526	1,135,077
Other current liabilities
FINANCIAL INSTRUMENTS
Financial liabilities			988,967	625,410
Other current liabilities \| Financial liabilities at amortized cost
FINANCIAL INSTRUMENTS
Financial liabilities			988,967	625,410
Other non-current liabilities
FINANCIAL INSTRUMENTS
Financial liabilities			499,092	653,670
Other non-current liabilities \| Financial liabilities at amortized cost
FINANCIAL INSTRUMENTS
Financial liabilities			499,092	653,670
Financial asset at fair value through profit or loss
FINANCIAL INSTRUMENTS
Financial assets			459,470	901,756
Loans and receivables
FINANCIAL INSTRUMENTS
Financial assets				984,311
Financial asset at amortised cost
FINANCIAL INSTRUMENTS
Financial assets			1,257,954
Short-term investments
FINANCIAL INSTRUMENTS
Financial assets			459,470	821,518
Short-term investments \| Financial asset at fair value through profit or loss
FINANCIAL INSTRUMENTS
Financial assets			459,470	821,518
Related parties
FINANCIAL INSTRUMENTS
Financial assets			27,939	51,839
Financial liabilities			1,350
Related parties \| Loans and receivables
FINANCIAL INSTRUMENTS
Financial assets				51,839
Related parties \| Financial asset at amortised cost
FINANCIAL INSTRUMENTS
Financial assets			27,939
Other current assets
FINANCIAL INSTRUMENTS
Financial assets			780,423	469,737
Other current assets \| Loans and receivables
FINANCIAL INSTRUMENTS
Financial assets				469,737
Other current assets \| Financial asset at amortised cost
FINANCIAL INSTRUMENTS
Financial assets			780,423
Other non-current assets
FINANCIAL INSTRUMENTS
Financial assets			449,592	542,973
Other non-current assets \| Financial asset at fair value through profit or loss
FINANCIAL INSTRUMENTS
Financial assets				80,238
Other non-current assets \| Loans and receivables
FINANCIAL INSTRUMENTS
Financial assets				462,735
Other non-current assets \| Financial asset at amortised cost
FINANCIAL INSTRUMENTS
Financial assets			R$ 449592
IAS 39
FINANCIAL INSTRUMENTS
Financial assets				7,239,825
Financial liabilities				22,104,962
IAS 39 \| Trade accounts payable \| Financial liabilities at amortized cost
FINANCIAL INSTRUMENTS
Financial liabilities				3,179,954
IAS 39 \| Short-term debt \| Financial liabilities at amortized cost
FINANCIAL INSTRUMENTS
Financial liabilities				16,461,656
IAS 39 \| Debentures \| Financial liabilities at amortized cost
FINANCIAL INSTRUMENTS
Financial liabilities				47,928
IAS 39 \| Unrealized losses on financial instruments \| Financial liability at fair value through profit or loss
FINANCIAL INSTRUMENTS
Financial liabilities				1,267
IAS 39 \| Obligation with FIDC \| Financial liabilities at amortized cost
FINANCIAL INSTRUMENTS
Financial liabilities				1,135,077
IAS 39 \| Other current liabilities \| Financial liabilities at amortized cost
FINANCIAL INSTRUMENTS
Financial liabilities				625,410
IAS 39 \| Other non-current liabilities \| Financial liabilities at amortized cost
FINANCIAL INSTRUMENTS
Financial liabilities				653,670
IAS 39 \| Cash and cash equivalents \| Loans and receivables
FINANCIAL INSTRUMENTS
Financial assets				2,555,338
IAS 39 \| Short-term investments \| Financial asset at fair value through profit or loss
FINANCIAL INSTRUMENTS
Financial assets				821,518
IAS 39 \| Trade accounts receivable \| Loans and receivables
FINANCIAL INSTRUMENTS
Financial assets				2,798,420
IAS 39 \| Related parties \| Loans and receivables
FINANCIAL INSTRUMENTS
Financial assets				51,839
IAS 39 \| Other current assets \| Loans and receivables
FINANCIAL INSTRUMENTS
Financial assets				469,737
IAS 39 \| Other non-current assets \| Financial asset at fair value through profit or loss
FINANCIAL INSTRUMENTS
Financial assets				80,238
IAS 39 \| Other non-current assets \| Loans and receivables
FINANCIAL INSTRUMENTS
Financial assets				R$ 462735
IFRS 9
FINANCIAL INSTRUMENTS
Financial assets	R$ 7191762
Financial liabilities	22,104,962
Expected credit losses	(32,387)
IFRS 9 \| Trade accounts payable \| Financial liabilities at amortized cost
FINANCIAL INSTRUMENTS
Financial liabilities	3,179,954
IFRS 9 \| Short-term debt \| Financial liabilities at amortized cost
FINANCIAL INSTRUMENTS
Financial liabilities	16,461,656
IFRS 9 \| Debentures \| Financial liabilities at amortized cost
FINANCIAL INSTRUMENTS
Financial liabilities	47,928
IFRS 9 \| Unrealized losses on financial instruments \| Financial liability at fair value through profit or loss
FINANCIAL INSTRUMENTS
Financial liabilities	1,267
IFRS 9 \| Obligation with FIDC \| Financial liabilities at amortized cost
FINANCIAL INSTRUMENTS
Financial liabilities	1,135,077
IFRS 9 \| Other current liabilities \| Financial liabilities at amortized cost
FINANCIAL INSTRUMENTS
Financial liabilities	625,410
IFRS 9 \| Other non-current liabilities \| Financial liabilities at amortized cost
FINANCIAL INSTRUMENTS
Financial liabilities	653,670
IFRS 9 \| Cash and cash equivalents \| Financial asset at fair value through profit or loss
FINANCIAL INSTRUMENTS
Financial assets	2,555,338
IFRS 9 \| Short-term investments \| Financial asset at fair value through profit or loss
FINANCIAL INSTRUMENTS
Financial assets	821,518
IFRS 9 \| Trade accounts receivable \| Financial asset at amortised cost
FINANCIAL INSTRUMENTS
Financial assets	2,750,357
IFRS 9 \| Related parties \| Financial asset at amortised cost
FINANCIAL INSTRUMENTS
Financial assets	51,839
IFRS 9 \| Other current assets \| Financial asset at amortised cost
FINANCIAL INSTRUMENTS
Financial assets	469,737
IFRS 9 \| Other non-current assets \| Financial asset at fair value through profit or loss
FINANCIAL INSTRUMENTS
Financial assets	80,238
IFRS 9 \| Other non-current assets \| Financial asset at amortised cost
FINANCIAL INSTRUMENTS
Financial assets	R$ 462735
IFRS 16
Leases
Lease assets		R$ 996873
Lease liabilities		R$ 996873

CONSOLIDATED FINANCIAL STATEM_3

CONSOLIDATED FINANCIAL STATEMENTS - Subsidiaries (Details)	12 Months Ended
CONSOLIDATED FINANCIAL STATEMENTS - Subsidiaries (Details)	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Gerdau GTL Spain S.L.
Significant consolidated subsidiaries
Equity interest in significant consolidated subsidiaries (as a percent)	100.00%	100.00%	100.00%
Gerdau Internacional Empreendimentos Ltda. - Grupo Gerdau
Significant consolidated subsidiaries
Equity interest in significant consolidated subsidiaries (as a percent)	100.00%	100.00%	100.00%
Gerdau Ameristeel Corporation and subsidiaries
Significant consolidated subsidiaries
Equity interest in significant consolidated subsidiaries (as a percent)	100.00%	100.00%	100.00%
Gerdau Acominas S.A. and subsidiary
Significant consolidated subsidiaries
Equity interest in significant consolidated subsidiaries (as a percent)	99.83%	99.36%	99.35%
Gerdau Aos Longos S.A. and subsidiary
Significant consolidated subsidiaries
Equity interest in significant consolidated subsidiaries (as a percent)	99.78%	99.12%	99.11%
Gerdau Steel Inc.
Significant consolidated subsidiaries
Equity interest in significant consolidated subsidiaries (as a percent)	100.00%	100.00%	100.00%
Gerdau Holdings Inc. and subsidiary
Significant consolidated subsidiaries
Equity interest in significant consolidated subsidiaries (as a percent)	100.00%	100.00%	100.00%
Paraopeba - Fixed-income investment fund
Significant consolidated subsidiaries
Equity interest in significant consolidated subsidiaries (as a percent)	91.40%	10.69%	70.93%
Percent of participation in investment fund	98.60%	51.11%	91.58%
Gerdau America Latina Participacoes S.A.
Significant consolidated subsidiaries
Equity interest in significant consolidated subsidiaries (as a percent)			99.12%
Aza Participaciones S.A.
Significant consolidated subsidiaries
Equity interest in significant consolidated subsidiaries (as a percent)		100.00%	100.00%
Gerdau Acos Especiais S.A.
Significant consolidated subsidiaries
Equity interest in significant consolidated subsidiaries (as a percent)			99.55%
Gerdau Hungria Holdings Limited Liability Company
Significant consolidated subsidiaries
Equity interest in significant consolidated subsidiaries (as a percent)	100.00%	100.00%	100.00%
GTL Equity Investments Corp.
Significant consolidated subsidiaries
Equity interest in significant consolidated subsidiaries (as a percent)	100.00%	100.00%	100.00%
Empresa Siderurgica del Peru S.A.A. - Siderperu
Significant consolidated subsidiaries
Equity interest in significant consolidated subsidiaries (as a percent)	90.03%	90.03%	90.03%
Diaco S.A. and subsidiary
Significant consolidated subsidiaries
Equity interest in significant consolidated subsidiaries (as a percent)			99.68%
Gerdau Gtl Mexico S.A. de C.V. and subsidiaries
Significant consolidated subsidiaries
Equity interest in significant consolidated subsidiaries (as a percent)	100.00%	100.00%	100.00%
Seiva S.A. Florestas e Industrias
Significant consolidated subsidiaries
Equity interest in significant consolidated subsidiaries (as a percent)	97.73%	97.73%	97.73%
Itagua Com. Imp. e Exp. Ltda
Significant consolidated subsidiaries
Equity interest in significant consolidated subsidiaries (as a percent)			100.00%
Gerdau Laisa S.A.
Significant consolidated subsidiaries
Equity interest in significant consolidated subsidiaries (as a percent)	100.00%	100.00%	100.00%
Sipar Gerdau Inversiones S.A.
Significant consolidated subsidiaries
Equity interest in significant consolidated subsidiaries (as a percent)	99.99%	99.99%	99.99%
Sipar Aceros S.A. and subsidiary
Significant consolidated subsidiaries
Equity interest in significant consolidated subsidiaries (as a percent)	99.98%	99.98%	99.96%
Sizuca - Siderurgica Zuliana C.A.
Significant consolidated subsidiaries
Equity interest in significant consolidated subsidiaries (as a percent)	100.00%	100.00%	100.00%
GTL Trade Finance Inc.
Significant consolidated subsidiaries
Equity interest in significant consolidated subsidiaries (as a percent)	100.00%	100.00%	100.00%
Gerdau Trade Inc.
Significant consolidated subsidiaries
Equity interest in significant consolidated subsidiaries (as a percent)	100.00%	100.00%	100.00%
Gerdau Steel India Ltd.
Significant consolidated subsidiaries
Equity interest in significant consolidated subsidiaries (as a percent)		98.90%	98.90%

CONSOLIDATED FINANCIAL STATEM_4

CONSOLIDATED FINANCIAL STATEMENTS - Joint ventures (Details) - BRL (R$) R$ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Joint ventures
Net income (loss)	R$ 2326382	R$ 338667	R$ 2885929
Total comprehensive income (loss)	2,713,308	(298,366)	(7,773,542)
Joint ventures
Joint ventures
Net income (loss)	(16,403)	(91,553)	(126,723)
Total comprehensive income (loss)	R$ 16403	R$ 91553	R$ 126723
Bradley Steel Processors
Joint ventures
Equity interest in joint venture	50.00%	50.00%	50.00%
MRM Guide Rail
Joint ventures
Equity interest in joint venture	50.00%	50.00%	50.00%
Gerdau Corsa S.A.P.I de C.V.
Joint ventures
Equity interest in joint venture	50.00%	50.00%	50.00%
Gerdau Metaldom Corp.
Joint ventures
Equity interest in joint venture	50.00%	45.00%	45.00%
Gerdau Summit Aos Fundidos e Forjados S.A.
Joint ventures
Equity interest in joint venture	58.73%	58.73%
Diaco S.A.
Joint ventures
Equity interest in joint venture	49.87%	49.87%
Juntos Somos Mais Fidelizao S.A.
Joint ventures
Equity interest in joint venture	27.50%

CONSOLIDATED FINANCIAL STATEM_5

CONSOLIDATED FINANCIAL STATEMENTS - Associate companies (Details) - BRL (R$) R$ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Interest in Associate companies
Net income	R$ 2326382	R$ 338667	R$ 2885929
Total comprehensive income	2,713,308	(298,366)	(7,773,542)
Associate companies
Interest in Associate companies
Net income	31,806	26,099	141,023
Total comprehensive income	R$ 31806	R$ 26099	R$ 141023
Dona Francisca Energtica S.A.
Interest in Associate companies
Equity interest in associate companies (as a percent)	51.82%	51.82%	51.82%
Corsa Controladora, S.A. de C.V. and subsidiaries
Interest in Associate companies
Equity interest in associate companies (as a percent)	49.00%	49.00%	49.00%

CONSOLIDATED FINANCIAL STATEM_6

CONSOLIDATED FINANCIAL STATEMENTS - Gains and losses on assets held for sale and sale of interest in subsidiaries (Details) R$ in Thousands, € in Millions, $ in Millions

Nov. 05, 2018USD ($)item

Oct. 31, 2018USD ($)

Jul. 31, 2018BRL (R$)Plant

Jun. 29, 2018USD ($)Plant

Jun. 30, 2017USD ($)

Jun. 30, 2016EUR (€)

Dec. 31, 2018BRL (R$)

Dec. 31, 2017BRL (R$)

Dec. 31, 2016BRL (R$)

Nov. 05, 2018BRL (R$)

Oct. 31, 2018BRL (R$)

Jun. 29, 2018BRL (R$)

Mar. 30, 2018USD ($)

Mar. 30, 2018BRL (R$)

Jun. 30, 2017BRL (R$)

Dec. 31, 2016USD ($)

Dec. 31, 2016BRL (R$)

Jun. 30, 2016BRL (R$)

Results in operations with subsidiaries and associate company

Gains and losses on assets held for sale and sales of interest in subsidiaries | R$

R$ 414507

R$ 721682

R$ 58223

Wire rod mill and processing units

Results in operations with subsidiaries and associate company

Enterprise value of the transaction

$ 99.5

R$ 330700

Hydroelectric plants

Results in operations with subsidiaries and associate company

Enterprise value of the transaction | R$

R$ 835000

Number of hydroelectric plants | Plant

Rebar-producing mills

Results in operations with subsidiaries and associate company

Enterprise value of the transaction

$ 600

R$ 2222900

Number of rebar-producing mills | item

Aza Participaes SpA and Subsidiaries

Results in operations with subsidiaries and associate company

Proportion of ownership interest in subsidiary sold

100.00%

Number of production plants | Plant

Economic value of transaction

$ 154.1

R$ 594200

Gerdau Hungria KFT Y CIA Sociedad Regular Colectiva

Results in operations with subsidiaries and associate company

Enterprise value of the transaction

$ 120

R$ 490200

Proportion of ownership interest in subsidiary sold

98.89%

Percentage of Perimeter

100.00%

Diaco S.A.

Results in operations with subsidiaries and associate company

Proportion of ownership interest in subsidiary sold

50.00%

Economic value of transaction

$ 165

R$ 546000

Gerdau Holdings Europa S.A. and subsidiaries

Results in operations with subsidiaries and associate company

Enterprise value of the transaction

€ 155

R$ 621000

Maximum additional contingent consideration receivable

€ 45

R$ 180000

Period of time over which contingent consideration may be received

5 years

Corporacin Centroamericana del Acero S.A. and subsidiaries

Results in operations with subsidiaries and associate company

Enterprise value of the transaction

$ 70

R$ 222700

Cleary Holdings Corp.

Results in operations with subsidiaries and associate company

Enterprise value of the transaction

$ 30.2

R$ 102600

Diaco S.A.

Results in operations with subsidiaries and associate company

Proportion of ownership interest in joint venture

49.87%

CASH AND CASH EQUIVALENTS, AN_3

CASH AND CASH EQUIVALENTS, AND SHORT AND LONG-TERM INVESTMENTS (Details) - BRL (R$) R$ in Thousands	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
CASH AND CASH EQUIVALENTS, AND SHORT AND LONG-TERM INVESTMENTS
Cash	R$ 6800	R$ 10439
Banks and immediately available investments	2,883,344	2,544,899
Total cash and cash equivalents	2,890,144	2,555,338	R$ 5063383	R$ 5648080
Held for trading	459,470	821,518
Short-term investments	R$ 459470	R$ 821518

TRADE ACCOUNTS RECEIVABLE - Sum

TRADE ACCOUNTS RECEIVABLE - Summary (Details) - BRL (R$) R$ in Thousands	Dec. 31, 2018	Dec. 31, 2017
TRADE ACCOUNTS RECEIVABLE
Trade account receivable - net	R$ 3201656	R$ 2798420
Gross \| Trade accounts receivable - in Brazil
TRADE ACCOUNTS RECEIVABLE
Trade account receivable - net	1,056,625	1,265,431
Gross \| Trade accounts receivable - exports from Brazil
TRADE ACCOUNTS RECEIVABLE
Trade account receivable - net	373,593	139,162
Gross \| Trade accounts receivable - outside of Brazil
TRADE ACCOUNTS RECEIVABLE
Trade account receivable - net	1,929,595	1,525,466
Impairment loss on trade receivables
TRADE ACCOUNTS RECEIVABLE
Trade account receivable - net	R$ 158157	R$ 131639

TRADE ACCOUNTS RECEIVABLE - Acc

TRADE ACCOUNTS RECEIVABLE - Accounts receivable by aging (Details) - BRL (R$) R$ in Thousands	Dec. 31, 2018	Dec. 31, 2017
TRADE ACCOUNTS RECEIVABLE
Trade account receivable - net	R$ 3201656	R$ 2798420
Impairment loss on trade receivables
TRADE ACCOUNTS RECEIVABLE
Trade account receivable - net	(158,157)	(131,639)
Current \| Gross
TRADE ACCOUNTS RECEIVABLE
Trade account receivable - net	2,362,408	2,234,723
Past due: Up to 30 days \| Gross
TRADE ACCOUNTS RECEIVABLE
Trade account receivable - net	792,569	467,901
Past due: From 31 to 60 days \| Gross
TRADE ACCOUNTS RECEIVABLE
Trade account receivable - net	63,294	96,852
Past due: From 61 to 90 days \| Gross
TRADE ACCOUNTS RECEIVABLE
Trade account receivable - net	10,133	17,636
Past due: From 91 to 180 days \| Gross
TRADE ACCOUNTS RECEIVABLE
Trade account receivable - net	22,261	27,841
Past due: From 181 to 360 days \| Gross
TRADE ACCOUNTS RECEIVABLE
Trade account receivable - net	26,003	22,985
Past due: Above 360 days \| Gross
TRADE ACCOUNTS RECEIVABLE
Trade account receivable - net	R$ 83145	R$ 62121

TRADE ACCOUNTS RECEIVABLE - Cha

TRADE ACCOUNTS RECEIVABLE - Changes in allowance (Details) - Trade accounts receivable - BRL (R$) R$ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Changes in the allowance
Allowance at beginning of period	R$ 131639	R$ 199306	R$ 185261
Provisions for bad debt during the year	(111,900)	(98,476)	(85,661)
Recoveries in the year	101,986	80,134	16,880
Write-offs	39,943	73,591	37,679
Loss of control by selling of subsidiary			17,594
Loss of control by joint venture creation		1,487
Assets held for sale	(3,348)	11,207
Exchange variation	(5,136)	(276)	(537)
Effects of IFRS 9 adoption	(48,063)
Allowance at end of period	R$ 158157	R$ 131639	R$ 199306

INVENTORIES - Components of inv

INVENTORIES - Components of inventory at net realizable value (Details) - BRL (R$) R$ in Thousands	Dec. 31, 2018	Dec. 31, 2017
INVENTORIES
Finished products	R$ 3985964	R$ 3026556
Work in progress	1,688,794	1,302,152
Raw materials	2,296,074	1,703,013
Storeroom supplies	784,517	298,100
Imports in transit	426,044	375,139
Allowance for adjustments to net realizable value	(13,704)	(3,556)
Total current inventories	R$ 9167689	R$ 6701404

INVENTORIES - Changes in net re

INVENTORIES - Changes in net realizable value of inventories (Details) - BRL (R$) R$ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Allowance for adjustment to net realizable value of inventories
Balance at the beginning of the year	R$ 3556
Balance at the end of the year	(13,704)	R$ 3556
Inventories
Allowance for adjustment to net realizable value of inventories
Balance at the beginning of the year	(3,556)	(28,813)	R$ 101121
Provision for the year	(11,943)	(26,545)	(62,899)
Reversal of adjustment to net realizable value	3,715	46,740	94,391
Loss of control by selling of subsidiary			30,105
Loss of control by joint venture creation		392
Assets held for sale	(1,049)	881
Exchange rate variation	(871)	3,789	10,711
Balance at the end of the year	R$ 13704	R$ 3556	R$ 28813

TAX CREDITS - Current and Non-c

TAX CREDITS - Current and Non-current (Details) - BRL (R$) R$ in Thousands	Dec. 31, 2018	Dec. 31, 2017
Disclosure of Tax credits
Tax credits - current	R$ 527428	R$ 402429
Tax credits - non-current	32,065	30,841
Tax credits
Disclosure of Tax credits
Tax credits - current	527,428	402,429
Tax credits - non-current	32,065	30,841
Tax credits - current and non-current	559,493	433,270
ICMS (state VAT)
Disclosure of Tax credits
Tax credits - current	291,027	155,096
Tax credits - non-current	27,527	26,135
Social security financing
Disclosure of Tax credits
Tax credits - current	95,700	91,229
Tax credits - non-current	1,980	360
Financing of social integration program
Disclosure of Tax credits
Tax credits - current	23,473	20,242
IPI (federal VAT)
Disclosure of Tax credits
Tax credits - current	44,312	59,982
IVA (Value-added tax)
Disclosure of Tax credits
Tax credits - current	32,967	48,139
Others
Disclosure of Tax credits
Tax credits - current	39,949	27,741
Financing of social integration program and others
Disclosure of Tax credits
Tax credits - non-current	R$ 2558	R$ 4346

TAX CREDITS - Realization of no

TAX CREDITS - Realization of non-current tax credits (Details) - BRL (R$) R$ in Thousands	Dec. 31, 2018	Dec. 31, 2017
Disclosure of temporary difference, unused tax losses and unused tax credits
Tax credits - non-current	R$ 32065	R$ 30841
Tax credits
Disclosure of temporary difference, unused tax losses and unused tax credits
Tax credits - non-current	32,065	30,841
Tax credits \| Year Two
Disclosure of temporary difference, unused tax losses and unused tax credits
Tax credits - non-current	15,025	18,017
Tax credits \| Year Three
Disclosure of temporary difference, unused tax losses and unused tax credits
Tax credits - non-current	10,846	7,062
Tax credits \| After Year Three
Disclosure of temporary difference, unused tax losses and unused tax credits
Tax credits - non-current	R$ 6194	R$ 5762

INCOME AND SOCIAL CONTRIBUTIO_3

INCOME AND SOCIAL CONTRIBUTION TAXES - Reconciliations of income and social contribution taxes at statutory rates to amounts presented in the Statement of Income (Details) - BRL (R$) R$ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
INCOME AND SOCIAL CONTRIBUTION TAXES
Applicable tax rate	25.00%	25.00%	25.00%
Social contribution tax	9.00%	9.00%	9.00%
Tax rates for foreign subsidiaries mainly in financial activities	0.00%	0.00%	0.00%
Reconciliations of taxes at statutory rates to amounts presented in the Statement of Income
Income (loss) before income taxes	R$ 2157431	R$ 43276	R$ 2581615
Statutory tax rates	34.00%	34.00%	34.00%
Income and social contribution taxes at statutory rates	R$ 733527	R$ 14714	R$ 877749
Tax adjustment with respect to:
Difference in tax rates in foreign companies	663,116	(183,787)	(1,162,174)
Equity in earnings of unconsolidated companies	3,448	(11,763)	(4,342)
Interest on equity	128,418	113	(162)
Tax credits and incentives	9,531	23,185	18,494
Recognition of previously unrecognized tax losses	47,545		(40,279)
Capital Gain		(98,290)
Other permanent differences, net	50,420	(39,563)	6,400
Income and social contribution taxes	168,951	(295,391)	(304,314)
Current	(629,209)	(313,758)	(110,511)
Deferred	R$ 798160	R$ 18367	R$ 193803
Minimum
INCOME AND SOCIAL CONTRIBUTION TAXES
Tax rate for foreign subsidiaries	22.60%	22.60%	22.60%
Maximum
INCOME AND SOCIAL CONTRIBUTION TAXES
Tax rate for foreign subsidiaries	34.00%	34.00%	34.00%

INCOME AND SOCIAL CONTRIBUTIO_4

INCOME AND SOCIAL CONTRIBUTION TAXES - Changes in net deferred asset (liability) (Details) - BRL (R$) R$ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Breakdown and changes in deferred income and social contribution tax assets and liabilities at statutory tax rates
Balance as of beginning of period	R$ 2971707	R$ 3011794	R$ 3392987
Recognized in income	798,160	18,367	(193,803)
Effect of selling of subsidiary and others		2,056	(211,897)
Others	31,103
Comprehensive Income	(45,284)	(60,510)	24,507
Balance as of end of period	3,755,686	2,971,707	3,011,794
Tax loss carryforward
Breakdown and changes in deferred income and social contribution tax assets and liabilities at statutory tax rates
Balance as of beginning of period	973,638	874,357	887,980
Recognized in income	341,664	157,402	327,743
Effect of selling of subsidiary and others		(22,362)	(263,297)
Others	36,445
Comprehensive Income	(11,814)	(35,759)	(78,069)
Balance as of end of period	1,339,933	973,638	874,357
Social contribution tax losses
Breakdown and changes in deferred income and social contribution tax assets and liabilities at statutory tax rates
Balance as of beginning of period	355,782	311,892	191,638
Recognized in income	(18,524)	58,963	120,254
Effect of selling of subsidiary and others		(15,073)
Balance as of end of period	337,258	355,782	311,892
Provision for tax, civil and labor liabilities
Breakdown and changes in deferred income and social contribution tax assets and liabilities at statutory tax rates
Balance as of beginning of period	275,463	755,198	639,566
Recognized in income	(5,214)	(479,836)	118,526
Effect of selling of subsidiary and others		101	(2,671)
Others	168
Comprehensive Income			(223)
Balance as of end of period	270,417	275,463	755,198
Benefits granted to employees
Breakdown and changes in deferred income and social contribution tax assets and liabilities at statutory tax rates
Balance as of beginning of period	282,803	432,537	549,865
Recognized in income	(16,564)	(48,466)	(67,133)
Effect of selling of subsidiary and others		(9,363)	34,982
Others	67,184
Comprehensive Income	(46,929)	(91,905)	(85,177)
Balance as of end of period	286,494	282,803	432,537
Other temporary differences
Breakdown and changes in deferred income and social contribution tax assets and liabilities at statutory tax rates
Balance as of beginning of period	410,300	350,762	381,991
Recognized in income	93,094	(81,627)	(21,985)
Effect of selling of subsidiary and others		92,174	20,776
Others	17,177
Comprehensive Income	5,247	48,991	(30,020)
Balance as of end of period	525,818	410,300	350,762
Deferred exchange variance
Breakdown and changes in deferred income and social contribution tax assets and liabilities at statutory tax rates
Balance as of beginning of period	1,060,527	1,251,542	2,158,149
Recognized in income	223,850	(199,200)	(907,690)
Effect of selling of subsidiary and others		8,185
Comprehensive Income			1,083
Balance as of end of period	1,284,377	1,060,527	1,251,542
Provision for losses
Breakdown and changes in deferred income and social contribution tax assets and liabilities at statutory tax rates
Balance as of beginning of period	110,728	112,936	151,678
Recognized in income	(33,165)	(2,208)	(34,059)
Effect of selling of subsidiary and others			(4,671)
Others	(12)
Comprehensive Income	6,286		(12)
Balance as of end of period	83,837	110,728	112,936
Fair value adjustments on businesses acquired
Breakdown and changes in deferred income and social contribution tax assets and liabilities at statutory tax rates
Balance as of beginning of period	(497,534)	(1,077,430)	(1,567,880)
Recognized in income	213,019	613,339	270,541
Effect of selling of subsidiary and others		(51,606)	2,984
Others	(89,859)
Comprehensive Income	1,926	18,163	216,925
Balance as of end of period	R$ 372448	R$ 497534	R$ 1077430

INCOME AND SOCIAL CONTRIBUTIO_5

INCOME AND SOCIAL CONTRIBUTION TAXES - Classification of net deferred asset (liability) (Details) - BRL (R$) R$ in Thousands	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
INCOME AND SOCIAL CONTRIBUTION TAXES
Total	R$ 3755686	R$ 2971707	R$ 3011794	R$ 3392987
Non-current assets	3,874,054	3,054,393	3,407,230	4,307,462
Non-current liabilities	R$ 118368	R$ 82686	R$ 395436	R$ 914475

INCOME AND SOCIAL CONTRIBUTIO_6

INCOME AND SOCIAL CONTRIBUTION TAXES - Estimated recovery and reversal of income and social contributions tax assets and liabilities (Details) - BRL (R$) R$ in Thousands	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Deferred income and social contribution tax assets and liabilities at statutory tax rates
Non-current assets	R$ 3874054	R$ 3054393	R$ 3407230	R$ 4307462
Non-current liabilities	(118,368)	(82,686)	R$ 395436	R$ 914475
Next 12 months
Deferred income and social contribution tax assets and liabilities at statutory tax rates
Non-current assets	609,546	326,356
Non-current liabilities	(18,055)	(2,680)
Year Two
Deferred income and social contribution tax assets and liabilities at statutory tax rates
Non-current assets	585,047	198,590
Non-current liabilities	(25,144)	(6,116)
Year Three
Deferred income and social contribution tax assets and liabilities at statutory tax rates
Non-current assets	338,896	400,597
Non-current liabilities	(13,548)	(6,498)
Year Four
Deferred income and social contribution tax assets and liabilities at statutory tax rates
Non-current assets	306,130	369,857
Non-current liabilities	(14,009)	(4,745)
After Year Four
Deferred income and social contribution tax assets and liabilities at statutory tax rates
Non-current assets	2,034,435
Non-current liabilities	R$ 47612
Year Five
Deferred income and social contribution tax assets and liabilities at statutory tax rates
Non-current assets		168,125
Non-current liabilities		(18,514)
More than 5 years
Deferred income and social contribution tax assets and liabilities at statutory tax rates
Non-current assets		1,590,868
Non-current liabilities		R$ 44133

INCOME AND SOCIAL CONTRIBUTIO_7

INCOME AND SOCIAL CONTRIBUTION TAXES - Unrecognized deferred income tax assets (Details) - BRL (R$) R$ in Thousands	Dec. 31, 2018	Dec. 31, 2017
Domestic
INCOME AND SOCIAL CONTRIBUTION TAXES
Unused tax losses for which no deferred tax asset recognised	R$ 265403	R$ 312741
Foreign
INCOME AND SOCIAL CONTRIBUTION TAXES
Unused tax losses for which no deferred tax asset recognised	795,775	1,137,548
Unused tax credits for which no deferred tax asset recognised	R$ 398364	R$ 360152

INVESTMENTS IN ASSOCIATES AND_3

INVESTMENTS IN ASSOCIATES AND JOINT VENTURES (Details) - BRL (R$) R$ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
INVESTMENTS IN ASSOCIATES AND JOINT VENTURES
Balance at beginning of period	R$ 1280299	R$ 798844	R$ 1392882
Equity in earnings	10,141	(34,597)	(12,771)
Cumulative Translation Adjustment	125,719	(16,745)	(251,195)
Capital increase	7,000	362,857
Joint venture creation		145,084
Contingent price complement		65,500
Effect of selling of subsidiary			(205,577)
Dividends/Interest on equity	(55,357)	(40,644)	(124,495)
Balance at end of period	1,367,802	1,280,299	798,844
Advance for future investment in joint venture	375,456
Investments in North America
INVESTMENTS IN ASSOCIATES AND JOINT VENTURES
Balance at beginning of period	346,080	303,526	509,086
Equity in earnings	(77,909)	(111,581)	(70,618)
Cumulative Translation Adjustment	33,101	(10,485)	(126,660)
Capital increase		178,670
Dividends/Interest on equity		(14,050)	(8,282)
Balance at end of period	301,272	346,080	303,526
Investments in South America
INVESTMENTS IN ASSOCIATES AND JOINT VENTURES
Balance at beginning of period	584,899	404,522	792,117
Equity in earnings	51,648	41,553	40,067
Cumulative Translation Adjustment	96,045	(6,260)	(124,185)
Joint venture creation		145,084
Effect of selling of subsidiary			(203,843)
Dividends/Interest on equity	(31,359)		(99,634)
Balance at end of period	701,233	584,899	404,522
Investments in Special Steel
INVESTMENTS IN ASSOCIATES AND JOINT VENTURES
Balance at beginning of period	199,647	0	0
Equity in earnings	15,629	15,460
Cumulative Translation Adjustment	(1,377)
Capital increase		184,187
Balance at end of period	213,899	199,647	0
Others
INVESTMENTS IN ASSOCIATES AND JOINT VENTURES
Balance at beginning of period	149,673	90,796	91,679
Equity in earnings	20,773	19,971	17,780
Cumulative Translation Adjustment	(2,050)		(350)
Capital increase	7,000
Contingent price complement		65,500
Effect of selling of subsidiary			(1,734)
Dividends/Interest on equity	(23,998)	(26,594)	(16,579)
Balance at end of period	151,398	R$ 149673	R$ 90796
Gerdau Corsa S.A.P.I de C.V.
INVESTMENTS IN ASSOCIATES AND JOINT VENTURES
Advance for future investment in joint venture	R$ 375456

PROPERTY, PLANT AND EQUIPMENT -

PROPERTY, PLANT AND EQUIPMENT - Cost (Details) - BRL (R$) R$ in Thousands	3 Months Ended	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
PROPERTY, PLANT AND EQUIPMENT
Balance, beginning of period		R$ 16443742	R$ 19351891
Impairment	R$ 265369	0	(265,369)
Balance, end of period	16,443,742	15,546,481	16,443,742	R$ 19351891
Gross
PROPERTY, PLANT AND EQUIPMENT
Balance, beginning of period		39,940,317	44,001,599	49,938,129
Additions		1,194,934	873,329	1,323,891
Capitalized interest		23,999	44,260	187,375
Disposals		(349,749)	(513,472)	(461,340)
Loss of control by selling of subsidiary			(1,091,705)	(2,956,162)
Impairment			(265,369)	(239,329)
Transfer to assets held for sale		(1,899,000)	(4,080,785)
Effects of IAS 29 adoption		699,724
Foreign exchange effect		1,461,959	972,460	(3,790,965)
Balance, end of period	39,940,317	41,072,184	39,940,317	44,001,599
Land and buildings
PROPERTY, PLANT AND EQUIPMENT
Balance, beginning of period		5,170,675	5,585,082
Balance, end of period	5,170,675	4,518,944	5,170,675	5,585,082
Land and buildings \| Gross
PROPERTY, PLANT AND EQUIPMENT
Balance, beginning of period		9,085,698	9,483,753	10,842,802
Additions		13,739	2,028	35,238
Transfers		140,334	700,318	584,575
Disposals		(45,290)	(157,625)	(81,256)
Loss of control by selling of subsidiary			(119,928)	(1,011,492)
Impairment			(10,063)	(52,071)
Transfer to assets held for sale		(784,464)	(1,013,466)
Foreign exchange effect		290,732	200,681	(834,043)
Balance, end of period	9,085,698	8,700,749	9,085,698	9,483,753
Machines, equipment, and installations
PROPERTY, PLANT AND EQUIPMENT
Balance, beginning of period		9,439,768	11,029,301
Balance, end of period	9,439,768	9,242,177	9,439,768	11,029,301
Machines, equipment, and installations \| Gross
PROPERTY, PLANT AND EQUIPMENT
Balance, beginning of period		28,016,604	30,633,880	32,616,700
Additions		66,764	124,136	93,290
Transfers		802,664	716,685	2,665,898
Disposals		(285,860)	(232,771)	(271,104)
Loss of control by selling of subsidiary			(900,840)	(1,726,440)
Impairment			(255,293)	(183,788)
Transfer to assets held for sale		(749,425)	(2,734,923)
Effects of IAS 29 adoption		699,724
Foreign exchange effect		1,058,527	665,730	(2,560,676)
Balance, end of period	28,016,604	29,608,998	28,016,604	30,633,880
Data electronic equipment
PROPERTY, PLANT AND EQUIPMENT
Balance, beginning of period		89,404	112,432
Balance, end of period	89,404	66,132	89,404	112,432
Data electronic equipment \| Gross
PROPERTY, PLANT AND EQUIPMENT
Balance, beginning of period		711,638	762,074	939,266
Additions		11,811	1,770	2,126
Transfers		457	19,340	74,804
Disposals		(5,641)	(12,963)	(60,542)
Loss of control by selling of subsidiary			(16,426)	(112,319)
Impairment				(228)
Transfer to assets held for sale		(14,914)	(53,315)
Foreign exchange effect		49,727	11,158	(81,033)
Balance, end of period	711,638	753,078	711,638	762,074
Property, plant and equipment under construction
PROPERTY, PLANT AND EQUIPMENT
Balance, beginning of period		950,680	1,762,648
Balance, end of period	950,680	1,021,247	950,680	1,762,648
Property, plant and equipment under construction \| Gross
PROPERTY, PLANT AND EQUIPMENT
Balance, beginning of period		950,680	1,762,648	4,068,876
Additions		983,519	687,019	1,117,317
Capitalized interest		23,999	44,260	187,375
Transfers		(949,888)	(1,440,183)	(3,314,746)
Disposals		(3,352)	(60,151)	(1,550)
Loss of control by selling of subsidiary			(1,382)	(53,630)
Transfer to assets held for sale		(49,579)	(107,677)
Foreign exchange effect		65,868	66,146	(240,994)
Balance, end of period	950,680	1,021,247	950,680	1,762,648
Other
PROPERTY, PLANT AND EQUIPMENT
Balance, beginning of period		793,215	862,428
Balance, end of period	793,215	697,981	793,215	862,428
Other \| Gross
PROPERTY, PLANT AND EQUIPMENT
Balance, beginning of period		1,175,697	1,359,244	1,470,485
Additions		119,101	58,376	75,920
Transfers		6,433	3,840	(10,531)
Disposals		(9,606)	(49,962)	(46,888)
Loss of control by selling of subsidiary			(53,129)	(52,281)
Impairment			(13)	(3,242)
Transfer to assets held for sale		(300,618)	(171,404)
Foreign exchange effect		(2,895)	28,745	(74,219)
Balance, end of period	R$ 1175697	R$ 988112	R$ 1175697	R$ 1359244

PROPERTY, PLANT AND EQUIPMENT_2

PROPERTY, PLANT AND EQUIPMENT - Accumulated Depreciation (Details) - BRL (R$) R$ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
PROPERTY, PLANT AND EQUIPMENT
Balance, beginning of period	R$ 16443742	R$ 19351891
Balance, end of period	15,546,481	16,443,742	R$ 19351891
Accumulated depreciation
PROPERTY, PLANT AND EQUIPMENT
Balance, beginning of period	(23,496,575)	(24,649,708)	(27,153,803)
Depreciation	(1,584,878)	(1,807,355)	(2,217,820)
Disposals	299,132	342,045	346,180
Loss of control by selling of subsidiary		672,386	2,173,869
Transfer to assets held for sale	637,929	2,510,269
Effects of IAS 29 adoption	(265,654)
Foreign exchange effect	(1,115,657)	(564,212)	2,201,866
Balance, end of period	(25,525,703)	(23,496,575)	(24,649,708)
Land and buildings
PROPERTY, PLANT AND EQUIPMENT
Balance, beginning of period	5,170,675	5,585,082
Balance, end of period	4,518,944	5,170,675	5,585,082
Land and buildings \| Accumulated depreciation
PROPERTY, PLANT AND EQUIPMENT
Balance, beginning of period	(3,915,023)	(3,898,671)	(4,387,719)
Depreciation	(291,315)	(343,373)	(334,365)
Transfers	18,341	(38,467)	(12,015)
Disposals	29,944	67,598	14,696
Loss of control by selling of subsidiary		28,691	524,209
Transfer to assets held for sale	105,787	370,727
Foreign exchange effect	(129,539)	(101,528)	296,523
Balance, end of period	(4,181,805)	(3,915,023)	(3,898,671)
Machines, equipment, and installations
PROPERTY, PLANT AND EQUIPMENT
Balance, beginning of period	9,439,768	11,029,301
Balance, end of period	9,242,177	9,439,768	11,029,301
Machines, equipment, and installations \| Accumulated depreciation
PROPERTY, PLANT AND EQUIPMENT
Balance, beginning of period	(18,576,836)	(19,604,579)	(21,415,018)
Depreciation	(1,128,138)	(1,361,561)	(1,738,759)
Transfers	5,234	25,886	(2,368)
Disposals	258,609	218,590	243,429
Loss of control by selling of subsidiary		589,951	1,515,886
Transfer to assets held for sale	286,204	1,989,917
Effects of IAS 29 adoption	(265,654)
Foreign exchange effect	(946,240)	(435,040)	1,792,251
Balance, end of period	(20,366,821)	(18,576,836)	(19,604,579)
Data electronic equipment
PROPERTY, PLANT AND EQUIPMENT
Balance, beginning of period	89,404	112,432
Balance, end of period	66,132	89,404	112,432
Data electronic equipment \| Accumulated depreciation
PROPERTY, PLANT AND EQUIPMENT
Balance, beginning of period	(622,234)	(649,642)	(827,620)
Depreciation	(34,814)	(40,915)	(44,437)
Transfers	158	(400)	968
Disposals	2,609	12,790	56,466
Loss of control by selling of subsidiary		12,627	95,809
Transfer to assets held for sale	11,667	54,275
Foreign exchange effect	(44,332)	(10,969)	69,172
Balance, end of period	(686,946)	(622,234)	(649,642)
Property, plant and equipment under construction
PROPERTY, PLANT AND EQUIPMENT
Balance, beginning of period	950,680	1,762,648
Balance, end of period	1,021,247	950,680	1,762,648
Other
PROPERTY, PLANT AND EQUIPMENT
Balance, beginning of period	793,215	862,428
Balance, end of period	697,981	793,215	862,428
Other \| Accumulated depreciation
PROPERTY, PLANT AND EQUIPMENT
Balance, beginning of period	(382,482)	(496,816)	(523,446)
Depreciation	(130,611)	(61,506)	(100,259)
Transfers	(23,733)	12,981	13,415
Disposals	7,970	43,067	31,589
Loss of control by selling of subsidiary		41,117	37,965
Transfer to assets held for sale	234,271	95,350
Foreign exchange effect	4,454	(16,675)	43,920
Balance, end of period	R$ 290131	R$ 382482	R$ 496816

PROPERTY, PLANT AND EQUIPMENT_3

PROPERTY, PLANT AND EQUIPMENT - Useful Lives (Details) - BRL (R$) R$ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
PROPERTY, PLANT AND EQUIPMENT
Average rate of capitalized interest	5.70%	6.60%	6.60%
Amount of property, plant and equipment pledged as collateral for loans and financing	R$ 90463	R$ 609116	R$ 632376
Buildings \| Minimum
PROPERTY, PLANT AND EQUIPMENT
Useful lives of property, plant, and equipment	20 years
Buildings \| Maximum
PROPERTY, PLANT AND EQUIPMENT
Useful lives of property, plant, and equipment	33 years
Machines, equipment, and installations \| Minimum
PROPERTY, PLANT AND EQUIPMENT
Useful lives of property, plant, and equipment	10 years
Machines, equipment, and installations \| Maximum
PROPERTY, PLANT AND EQUIPMENT
Useful lives of property, plant, and equipment	20 years
Furniture and fixture \| Minimum
PROPERTY, PLANT AND EQUIPMENT
Useful lives of property, plant, and equipment	5 years
Furniture and fixture \| Maximum
PROPERTY, PLANT AND EQUIPMENT
Useful lives of property, plant, and equipment	10 years
Vehicles \| Minimum
PROPERTY, PLANT AND EQUIPMENT
Useful lives of property, plant, and equipment	3 years
Vehicles \| Maximum
PROPERTY, PLANT AND EQUIPMENT
Useful lives of property, plant, and equipment	5 years
Data electronic equipment \| Minimum
PROPERTY, PLANT AND EQUIPMENT
Useful lives of property, plant, and equipment	2 years 6 months
Data electronic equipment \| Maximum
PROPERTY, PLANT AND EQUIPMENT
Useful lives of property, plant, and equipment	6 years

PROPERTY, PLANT AND EQUIPMENT_4

PROPERTY, PLANT AND EQUIPMENT - Impairment (Details) - BRL (R$) R$ in Thousands	Dec. 31, 2018	Dec. 31, 2017
Land, buildings and construction
PROPERTY, PLANT AND EQUIPMENT
Carrying value of impaired assets	R$ 126790	R$ 118348
Machines, equipment, and installations
PROPERTY, PLANT AND EQUIPMENT
Carrying value of impaired assets	569,303	783,183
Property, plant and equipment under construction
PROPERTY, PLANT AND EQUIPMENT
Carrying value of impaired assets	R$ 543726	R$ 543726

GOODWILL - Changes in Goodwill

GOODWILL - Changes in Goodwill (Details) - BRL (R$) R$ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Changes in goodwill
Goodwill at beginning of period	R$ 7891142	R$ 9470016	R$ 15124430
Foreign exchange effect	1,221,248	72,531	(2,581,852)
Impairment	0	(849,438)	(2,678,582)
Effect of selling of subsidiary			(393,980)
Transfer to assets held for sale		(801,967)
Goodwill at end of period	9,112,390	7,891,142	9,470,016
Gross
Changes in goodwill
Goodwill at beginning of period	14,500,381	15,059,838	18,099,186
Foreign exchange effect	2,283,577	242,510	(2,645,368)
Effect of selling of subsidiary			(393,980)
Transfer to assets held for sale		(801,967)
Goodwill at end of period	16,783,958	14,500,381	15,059,838
Accumulated impairment losses
Changes in goodwill
Goodwill at beginning of period	(6,609,239)	(5,589,822)	(2,974,756)
Foreign exchange effect	(1,062,329)	(169,979)	63,516
Impairment		(849,438)	(2,678,582)
Goodwill at end of period	R$ 7671568	R$ 6609239	R$ 5589822

GOODWILL - Goodwill by segment

GOODWILL - Goodwill by segment (Details) - BRL (R$) R$ in Thousands	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Goodwill by segment
Goodwill	R$ 9112390	R$ 7891142	R$ 9470016	R$ 15124430
Brazil
Goodwill by segment
Goodwill	373,135	373,135	380,644
Special Steel
Goodwill by segment
Goodwill	2,854,888	2,487,364	2,508,056
North America
Goodwill by segment
Goodwill	R$ 5884367	R$ 5030643	R$ 6581316

INTANGIBLE ASSETS - Changes in

INTANGIBLE ASSETS - Changes in intangible assets by type (Details) - BRL (R$) R$ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
INTANGIBLE ASSETS
Other intangible assets at beginning of period	R$ 972089	R$ 1319941	R$ 1835761
Foreign exchange effect	107,434	7,666	(208,785)
Acquisition	67,388	37,939	54,044
Disposal	(3,879)	(27,652)	(15,195)
Amortization	(306,936)	(285,197)	(318,135)
Effect of selling of subsidiary			(27,749)
Assets held for sale		(80,608)
Other intangible assets at end of period	836,096	972,089	1,319,941
Supplier relationships
INTANGIBLE ASSETS
Other intangible assets at beginning of period	32,786	39,726	47,571
Amortization	(6,067)	(6,940)	(7,845)
Other intangible assets at end of period	26,719	32,786	39,726
Software development
INTANGIBLE ASSETS
Other intangible assets at beginning of period	490,829	636,605	808,482
Foreign exchange effect	28,598	2,947	(60,464)
Acquisition	67,388	37,939	40,643
Disposal	(3,791)		(2,145)
Amortization	(167,384)	(149,150)	(149,911)
Assets held for sale		(37,512)
Other intangible assets at end of period	R$ 415640	490,829	636,605
Estimated useful lives	7 years
Customers contracts and relationships
INTANGIBLE ASSETS
Other intangible assets at beginning of period	R$ 440774	615,608	911,483
Foreign exchange effect	77,593	3,835	(140,812)
Disposal	(88)	(27,652)
Amortization	(130,980)	(125,621)	(155,063)
Assets held for sale		(25,396)
Other intangible assets at end of period	387,299	440,774	615,608
Others
INTANGIBLE ASSETS
Other intangible assets at beginning of period	7,700	28,002	68,225
Foreign exchange effect	1,243	884	(7,509)
Acquisition			13,401
Disposal			(13,050)
Amortization	(2,505)	(3,486)	(5,316)
Effect of selling of subsidiary			(27,749)
Assets held for sale		(17,700)
Other intangible assets at end of period	R$ 6438	R$ 7700	R$ 28002
Estimated useful lives	5 years
Minimum \| Supplier relationships
INTANGIBLE ASSETS
Estimated useful lives	5 years
Minimum \| Customers contracts and relationships
INTANGIBLE ASSETS
Estimated useful lives	5 years
Maximum \| Supplier relationships
INTANGIBLE ASSETS
Estimated useful lives	20 years
Maximum \| Customers contracts and relationships
INTANGIBLE ASSETS
Estimated useful lives	20 years

INTANGIBLE ASSETS - Intangible

INTANGIBLE ASSETS - Intangible assets by segment (Details) - BRL (R$) R$ in Thousands	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Composition of other intangible assets by segment
Other Intangibles	R$ 836096	R$ 972089	R$ 1319941	R$ 1835761
Brazil
Composition of other intangible assets by segment
Other Intangibles	295,107	351,578	412,134
Special Steel
Composition of other intangible assets by segment
Other Intangibles	136,910	152,640	219,878
South America
Composition of other intangible assets by segment
Other Intangibles	1,441	1,863	7,606
North America
Composition of other intangible assets by segment
Other Intangibles	R$ 402638	R$ 466008	R$ 680323

LOANS AND FINANCING - Summary (

LOANS AND FINANCING - Summary (Details) - BRL (R$) R$ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
LOANS AND FINANCING
Total Loans and Financing	R$ 13367841	R$ 16461656
Current	1,822,183	2,004,341
Non-current	R$ 11545658	14,457,315
Annual charges (as a percent)	6.66%
Working capital
LOANS AND FINANCING
Total Loans and Financing	R$ 2424246	2,739,258
Annual charges (as a percent)	6.78%
Financing of property, plant and equipment and others
LOANS AND FINANCING
Total Loans and Financing	R$ 1205281	2,108,216
Annual charges (as a percent)	14.28%
Ten/Thirty Year Bonds
LOANS AND FINANCING
Total Loans and Financing	R$ 9738314	R$ 11614182
Annual charges (as a percent)	5.81%

LOANS AND FINANCING - Principal

LOANS AND FINANCING - Principal and Interest (Details) - BRL (R$) R$ in Thousands	Dec. 31, 2018	Dec. 31, 2017
LOANS AND FINANCING
Principal amount of loans and Financing	R$ 13178457	R$ 16207120
Interest accrued of loans and Financing	189,384	254,536
Total Loans and Financing	R$ 13367841	R$ 16461656

LOANS AND FINANCING - By Curren

LOANS AND FINANCING - By Currency (Details) - BRL (R$) R$ in Thousands	Dec. 31, 2018	Dec. 31, 2017
LOANS AND FINANCING
Total Loans and Financing	R$ 13367841	R$ 16461656
Brazilian Real (BRL)
LOANS AND FINANCING
Total Loans and Financing	2,361,610	2,710,308
U.S. Dollar (USD)
LOANS AND FINANCING
Total Loans and Financing	10,924,355	13,333,669
Other currencies
LOANS AND FINANCING
Total Loans and Financing	R$ 81876	R$ 417679

LOANS AND FINANCING - Amortizat

LOANS AND FINANCING - Amortization Schedule (Details) - BRL (R$) R$ in Thousands	Dec. 31, 2018	Dec. 31, 2017
Amortization schedules of long term loans and financing
Long-term debt	R$ 11545658	R$ 14457315
Year Two
Amortization schedules of long term loans and financing
Long-term debt	2,253,958	873,274
Year Three
Amortization schedules of long term loans and financing
Long-term debt	1,199,045	3,158,211
Year Four
Amortization schedules of long term loans and financing
Long-term debt	121,490	1,730,177
Year Five
Amortization schedules of long term loans and financing
Long-term debt	1,209,109	147,715
More than 5 years
Amortization schedules of long term loans and financing
Long-term debt	R$ 6762056
Year Six
Amortization schedules of long term loans and financing
Long-term debt		1,296,597
After Year Six
Amortization schedules of long term loans and financing
Long-term debt		R$ 7251341

LOANS AND FINANCING - Additiona

LOANS AND FINANCING - Additional Disclosures (Details) R$ in Thousands, $ in Millions	12 Months Ended
	Dec. 31, 2018USD ($)	Dec. 31, 2018BRL (R$)	Apr. 30, 2018BRL (R$)	Mar. 31, 2018BRL (R$)	Dec. 31, 2017BRL (R$)	Oct. 31, 2017USD ($)tranche	Oct. 31, 2017BRL (R$)tranche	Jun. 30, 2009BRL (R$)
LOANS AND FINANCING
Notional value		R$ 13178457			R$ 16207120
Loans and financing		13,367,841			R$ 16461656
Banco do Brasil \| Gerdau Aominas
LOANS AND FINANCING
Notional value				R$ 400000
Citibank S.A. \| Gerdau Aominas S.A. and Gerdau Aos Longos S.A
LOANS AND FINANCING
Notional value			R$ 400000
FINAME/BNDES program
LOANS AND FINANCING
Loan amount guaranteed by asset being financed		R$ 90500
Credit line with BNDES
LOANS AND FINANCING
Maximum borrowing capacity								R$ 1500000
Interest rate basis	TJLP
Adjustment to interest rate basis (as a percent)	2.16%	2.16%
Loans and financing		R$ 253700
Senior Unsecured Global Working Capital Credit Agreement
LOANS AND FINANCING
Maximum borrowing capacity						$ 800	R$ 3100000
Number of tranches \| tranche						2	2
Loans and financing	$ 50	R$ 193700
Senior Unsecured Global Working Capital Credit Agreement \| Gerdau's North American subsidiaries
LOANS AND FINANCING
Maximum borrowing capacity						$ 200	R$ 775000
Senior Unsecured Global Working Capital Credit Agreement \| Gerdau's Latin American subsidiaries
LOANS AND FINANCING
Maximum borrowing capacity						$ 600	R$ 2325000

DEBENTURES - Summary (Details)

DEBENTURES - Summary (Details) R$ in Thousands	Nov. 09, 2018BRL (R$)	Dec. 31, 2018BRL (R$)instrument	Dec. 31, 2017BRL (R$)
DEBENTURES
Total Debentures \| R$		R$ 1538873	R$ 47928
Current debentures \| R$		2,755
Non-current debentures \| R$		R$ 1536118	47,928
3rd- A and B
DEBENTURES
Quantity Issued		144,000
Quantity Held in treasury		141,144
Total Debentures \| R$		R$ 18871	21,377
7th
DEBENTURES
Quantity Issued		68,400
Quantity Held in treasury		68,271
Total Debentures \| R$		R$ 1102	1,333
8th
DEBENTURES
Quantity Issued		179,964
Quantity Held in treasury		178,516
Total Debentures \| R$		R$ 8080	14,557
9th
DEBENTURES
Quantity Issued		125,640
Quantity Held in treasury		125,365
Total Debentures \| R$		R$ 2349	4,900
11th - A and B
DEBENTURES
Quantity Issued		150,000
Quantity Held in treasury		149,294
Total Debentures \| R$		R$ 5716	R$ 5761
15th
DEBENTURES
Quantity Issued	1,500,000	1,500,000
Total Debentures \| R$	R$ 1500000	R$ 1502755

DEBENTURES - Amortization sched

DEBENTURES - Amortization schedules (Details) R$ / shares in Units, R$ in Thousands	Nov. 09, 2018BRL (R$)R$ / shares	Dec. 31, 2018BRL (R$)instrument	Dec. 31, 2017BRL (R$)
DEBENTURES
Debentures		R$ 1538873	R$ 47928
Non-current portion of non-current notes and debentures issued		1,536,118	47,928
Year Two
DEBENTURES
Non-current portion of non-current notes and debentures issued		5,716
Year Three
DEBENTURES
Non-current portion of non-current notes and debentures issued		18,871	5,761
Year Four
DEBENTURES
Non-current portion of non-current notes and debentures issued		1,501,102	21,377
Year Five
DEBENTURES
Non-current portion of non-current notes and debentures issued		8,080	1,333
Year Six
DEBENTURES
Non-current portion of non-current notes and debentures issued			14,557
More than 5 years
DEBENTURES
Non-current portion of non-current notes and debentures issued		R$ 2349
Later Than Six Years
DEBENTURES
Non-current portion of non-current notes and debentures issued			R$ 4900
Debentures
DEBENTURES
Nominal annual interest rate (as a percent)		6.42%	9.93%
15th
DEBENTURES
Debentures	R$ 1500000	R$ 1502755
Quantity Issued	1,500,000	1,500,000
Par value per debenture \| R$ / shares	R$ 1000.00

FINANCIAL INSTRUMENTS - Fair va

FINANCIAL INSTRUMENTS - Fair value of financial instruments (Details) - BRL (R$) R$ in Thousands	Dec. 31, 2018	Dec. 31, 2017
FINANCIAL INSTRUMENTS
Financial assets	R$ 1750841	R$ 1886067
Financial liabilities	17,339,894	18,925,008
Loans and Financing
FINANCIAL INSTRUMENTS
Financial liabilities	13,367,841	16,461,656
Financial liabilities, at fair value	13,533,306	17,102,512
Debentures
FINANCIAL INSTRUMENTS
Financial liabilities	1,538,873	47,928
Financial liabilities, at fair value	1,538,873	47,928
Unrealized losses on financial instruments
FINANCIAL INSTRUMENTS
Financial liabilities	5,245	1,267
Financial liabilities, at fair value	5,245	1,267
Obligation with FIDC
FINANCIAL INSTRUMENTS
Financial liabilities	938,526	1,135,077
Financial liabilities, at fair value	938,526	1,135,077
Other current liabilities
FINANCIAL INSTRUMENTS
Financial liabilities	988,967	625,410
Financial liabilities, at fair value	988,967	625,410
Other non-current liabilities
FINANCIAL INSTRUMENTS
Financial liabilities	499,092	653,670
Financial liabilities, at fair value	499,092	653,670
Short-term investments
FINANCIAL INSTRUMENTS
Financial assets	459,470	821,518
Financial assets, at fair value	459,470	821,518
Related parties
FINANCIAL INSTRUMENTS
Financial assets	27,939	51,839
Financial assets, at fair value	27,939	51,839
Financial liabilities	1,350
Unrealized gains on financial instruments
FINANCIAL INSTRUMENTS
Financial assets	33,417
Financial assets, at fair value	33,417
Other current assets
FINANCIAL INSTRUMENTS
Financial assets	780,423	469,737
Financial assets, at fair value	780,423	469,737
Other non-current assets
FINANCIAL INSTRUMENTS
Financial assets	449,592	542,973
Financial assets, at fair value	R$ 449592	R$ 542973

FINANCIAL INSTRUMENTS - Capital

FINANCIAL INSTRUMENTS - Capital management risk (Details) - Capital management risk R$ in Billions	12 Months Ended
	Dec. 31, 2018BRL (R$)
Disclosure of objectives, policies and processes for managing capital [line items]
Average maturity	6 years
Minimum
Disclosure of objectives, policies and processes for managing capital [line items]
Net debt/Adjusted EBITDA	1
Maximum
Disclosure of objectives, policies and processes for managing capital [line items]
Net debt/Adjusted EBITDA	1.5
Gross debt limit	R$ 12

FINANCIAL INSTRUMENTS - Liquidi

FINANCIAL INSTRUMENTS - Liquidity risk (Details) - Liquidity risk - BRL (R$) R$ in Thousands	Dec. 31, 2018	Dec. 31, 2017
Disclosure of maturity analysis for financial liabilities held for managing liquidity risk
Contractual obligations	R$ 29321092	R$ 30125257
Next 12 months
Disclosure of maturity analysis for financial liabilities held for managing liquidity risk
Contractual obligations	8,251,607	6,998,424
1-3 years
Disclosure of maturity analysis for financial liabilities held for managing liquidity risk
Contractual obligations	6,126,076	6,079,924
4-5 years
Disclosure of maturity analysis for financial liabilities held for managing liquidity risk
Contractual obligations	4,221,983	3,208,433
More than 5 years
Disclosure of maturity analysis for financial liabilities held for managing liquidity risk
Contractual obligations	10,721,426	13,838,476
Trade accounts payable
Disclosure of maturity analysis for financial liabilities held for managing liquidity risk
Contractual obligations	4,335,054	3,179,954
Trade accounts payable \| Next 12 months
Disclosure of maturity analysis for financial liabilities held for managing liquidity risk
Contractual obligations	4,335,054	3,179,954
Loans and Financing
Disclosure of maturity analysis for financial liabilities held for managing liquidity risk
Contractual obligations	20,613,734	24,470,751
Loans and Financing \| Next 12 months
Disclosure of maturity analysis for financial liabilities held for managing liquidity risk
Contractual obligations	2,817,346	3,191,793
Loans and Financing \| 1-3 years
Disclosure of maturity analysis for financial liabilities held for managing liquidity risk
Contractual obligations	5,053,827	6,060,187
Loans and Financing \| 4-5 years
Disclosure of maturity analysis for financial liabilities held for managing liquidity risk
Contractual obligations	2,509,962	3,168,144
Loans and Financing \| More than 5 years
Disclosure of maturity analysis for financial liabilities held for managing liquidity risk
Contractual obligations	10,232,599	12,050,627
Debentures
Disclosure of maturity analysis for financial liabilities held for managing liquidity risk
Contractual obligations	1,940,474	59,128
Debentures \| Next 12 months
Disclosure of maturity analysis for financial liabilities held for managing liquidity risk
Contractual obligations	104,995
Debentures \| 1-3 years
Disclosure of maturity analysis for financial liabilities held for managing liquidity risk
Contractual obligations	231,817	6,528
Debentures \| 4-5 years
Disclosure of maturity analysis for financial liabilities held for managing liquidity risk
Contractual obligations	1,600,632	40,289
Debentures \| More than 5 years
Disclosure of maturity analysis for financial liabilities held for managing liquidity risk
Contractual obligations	3,030	12,311
Unrealized losses on financial instruments
Disclosure of maturity analysis for financial liabilities held for managing liquidity risk
Contractual obligations	5,245	1,267
Unrealized losses on financial instruments \| Next 12 months
Disclosure of maturity analysis for financial liabilities held for managing liquidity risk
Contractual obligations	5,245	1,267
Obligation with FIDC
Disclosure of maturity analysis for financial liabilities held for managing liquidity risk
Contractual obligations	938,526	1,135,077
Obligation with FIDC \| 1-3 years
Disclosure of maturity analysis for financial liabilities held for managing liquidity risk
Contractual obligations	827,137
Obligation with FIDC \| 4-5 years
Disclosure of maturity analysis for financial liabilities held for managing liquidity risk
Contractual obligations	111,389
Obligation with FIDC \| More than 5 years
Disclosure of maturity analysis for financial liabilities held for managing liquidity risk
Contractual obligations		1,135,077
Other current liabilities
Disclosure of maturity analysis for financial liabilities held for managing liquidity risk
Contractual obligations	988,967	625,410
Other current liabilities \| Next 12 months
Disclosure of maturity analysis for financial liabilities held for managing liquidity risk
Contractual obligations	988,967	625,410
Other non-current liabilities
Disclosure of maturity analysis for financial liabilities held for managing liquidity risk
Contractual obligations	499,092	653,670
Other non-current liabilities \| 1-3 years
Disclosure of maturity analysis for financial liabilities held for managing liquidity risk
Contractual obligations	13,295	13,209
Other non-current liabilities \| More than 5 years
Disclosure of maturity analysis for financial liabilities held for managing liquidity risk
Contractual obligations	R$ 485797	R$ 640461

FINANCIAL INSTRUMENTS - Sensiti

FINANCIAL INSTRUMENTS - Sensitivity analysis (Details) - BRL (R$) R$ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Interest Rate risk and Foreign Currency risk \| Interest rate swaps and foreign currency swaps \| Loans and Financing
Sensitivity analysis
Impact on income statement based on change in assumption	R$ 11073	R$ 6479
Foreign currency risk
Sensitivity analysis
Percentage of change	5.00%	5.00%
Impact on income statement based on change in assumption	R$ 113445	R$ 129209
Impact on income statement based on change in assumption, after effects of changes in net investment hedge	R$ 74457	R$ 79088
Foreign currency risk \| Non-Deliverable Forwards
Sensitivity analysis
Percentage of change	5.00%	5.00%
Impact on income statement based on change in assumption	R$ 7063	R$ 1480
Interest rate risk
Sensitivity analysis
Interest rate change (as a percent)	0.10%	0.10%
Impact on income statement based on change in assumption	R$ 55959	R$ 54908
Interest rate risk \| Interest Rate Swap
Sensitivity analysis
Interest rate change (as a percent)	0.50%	0.50%
Impact on income statement based on change in assumption	R$ 476
Interest rate risk \| Interest Rate Swap \| Loans and Financing
Sensitivity analysis
Interest rate change (as a percent)	0.10%	0.10%
Products sold price risk
Sensitivity analysis
Percentage of change	1.00%	1.00%
Impact on income statement based on change in assumption	R$ 461595	R$ 369176
Raw materials and commodity price risk
Sensitivity analysis
Percentage of change	1.00%	1.00%
Impact on income statement based on change in assumption	R$ 296234	R$ 234239

FINANCIAL INSTRUMENTS - Financi

FINANCIAL INSTRUMENTS - Financial instruments per category (Details) - BRL (R$) R$ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
FINANCIAL INSTRUMENTS
Financial assets	R$ 1750841	R$ 1886067
Financial liabilities	17,339,894	18,925,008
Financial income from assets	744,831	264,708
Financial income (expenses) from liabilities	(2,634,626)	(1,408,056)
Financial liability at fair value through profit or loss
FINANCIAL INSTRUMENTS
Financial liabilities	5,245	1,267
Financial income (expenses) from liabilities	(17,484)	(12,503)
Financial liabilities at amortized cost
FINANCIAL INSTRUMENTS
Financial liabilities	17,334,649	18,923,741
Financial income (expenses) from liabilities	(2,617,142)	(1,395,553)
Financial asset at amortised cost
FINANCIAL INSTRUMENTS
Financial assets	1,257,954
Financial income from assets	629,750
Loans and receivables
FINANCIAL INSTRUMENTS
Financial assets		984,311
Financial income from assets		177,466
Financial asset at fair value through profit or loss
FINANCIAL INSTRUMENTS
Financial assets	459,470	901,756
Financial income from assets	115,081	87,242
Financial assets at fair value through other comprehensive income
FINANCIAL INSTRUMENTS
Financial assets	33,417
Loans and Financing
FINANCIAL INSTRUMENTS
Financial liabilities	13,367,841	16,461,656
Loans and Financing \| Financial liabilities at amortized cost
FINANCIAL INSTRUMENTS
Financial liabilities	13,367,841	16,461,656
Debentures
FINANCIAL INSTRUMENTS
Financial liabilities	1,538,873	47,928
Debentures \| Financial liabilities at amortized cost
FINANCIAL INSTRUMENTS
Financial liabilities	1,538,873	47,928
Related parties
FINANCIAL INSTRUMENTS
Financial liabilities	1,350
Related parties \| Financial liabilities at amortized cost
FINANCIAL INSTRUMENTS
Financial liabilities	1,350
Obligation with FIDC
FINANCIAL INSTRUMENTS
Financial liabilities	938,526	1,135,077
Obligation with FIDC \| Financial liabilities at amortized cost
FINANCIAL INSTRUMENTS
Financial liabilities	938,526	1,135,077
Other current liabilities
FINANCIAL INSTRUMENTS
Financial liabilities	988,967	625,410
Other current liabilities \| Financial liabilities at amortized cost
FINANCIAL INSTRUMENTS
Financial liabilities	988,967	625,410
Other non-current liabilities
FINANCIAL INSTRUMENTS
Financial liabilities	499,092	653,670
Other non-current liabilities \| Financial liabilities at amortized cost
FINANCIAL INSTRUMENTS
Financial liabilities	499,092	653,670
Unrealized losses on financial instruments
FINANCIAL INSTRUMENTS
Financial liabilities	5,245	1,267
Unrealized losses on financial instruments \| Financial liability at fair value through profit or loss
FINANCIAL INSTRUMENTS
Financial liabilities	5,245	1,267
Short-term investments
FINANCIAL INSTRUMENTS
Financial assets	459,470	821,518
Short-term investments \| Financial asset at fair value through profit or loss
FINANCIAL INSTRUMENTS
Financial assets	459,470	821,518
Unrealized gains on financial instruments
FINANCIAL INSTRUMENTS
Financial assets	33,417
Unrealized gains on financial instruments \| Financial assets at fair value through other comprehensive income
FINANCIAL INSTRUMENTS
Financial assets	33,417
Related parties
FINANCIAL INSTRUMENTS
Financial assets	27,939	51,839
Financial liabilities	1,350
Related parties \| Financial asset at amortised cost
FINANCIAL INSTRUMENTS
Financial assets	27,939
Related parties \| Loans and receivables
FINANCIAL INSTRUMENTS
Financial assets		51,839
Other current assets
FINANCIAL INSTRUMENTS
Financial assets	780,423	469,737
Other current assets \| Financial asset at amortised cost
FINANCIAL INSTRUMENTS
Financial assets	780,423
Other current assets \| Loans and receivables
FINANCIAL INSTRUMENTS
Financial assets		469,737
Other non-current assets
FINANCIAL INSTRUMENTS
Financial assets	449,592	542,973
Other non-current assets \| Financial asset at amortised cost
FINANCIAL INSTRUMENTS
Financial assets	R$ 449592
Other non-current assets \| Loans and receivables
FINANCIAL INSTRUMENTS
Financial assets		462,735
Other non-current assets \| Financial asset at fair value through profit or loss
FINANCIAL INSTRUMENTS
Financial assets		R$ 80238

FINANCIAL INSTRUMENTS - Swap Co

FINANCIAL INSTRUMENTS - Swap Contracts (Details) R$ in Thousands, $ in Millions	Dec. 31, 2018USD ($)	Dec. 31, 2018BRL (R$)	Dec. 31, 2017USD ($)	Dec. 31, 2017BRL (R$)
Swap Contracts
Notional value		R$ 13178457		R$ 16207120
Assets, Fair value
Swap Contracts
Amount receivable		33,417
Amount payable		(5,245)		(1,267)
Forward contract \| Forward contracts maturing at 2019 long position
Swap Contracts
Notional value \| $	$ 19.2
Amount payable		(4,069)
Forward contract \| Forward contracts maturing at 2019 short position
Swap Contracts
Notional value \| $	$ 18.3
Amount receivable		462
Amount payable		R$ 1176
Currency swap \| Currency swap maturing in 2018
Swap Contracts
Notional value \| $			$ 40
Amount payable				R$ 1267
Currency swap \| Currency swap maturing in 2018 \| INR
Swap Contracts
Fixed interest rate (as a percent)	10.17%	10.17%	10.17%	10.17%
Currency swap \| Currency swap maturing in 2019
Swap Contracts
Notional value		R$ 230500
Amount receivable		R$ 30249
Currency swap \| Currency swap maturing in 2019 \| CDI
Swap Contracts
Floating interest rate (as a percent)	111.50%	111.50%	111.50%	111.50%
Interest Rate Swap \| Interest rate swap maturing in 2020
Swap Contracts
Notional value		R$ 50000
Amount receivable		R$ 2706
Interest Rate Swap \| Interest rate swap maturing in 2020 \| CDI
Swap Contracts
Floating interest rate (as a percent)	111.50%	111.50%	111.50%	111.50%

FINANCIAL INSTRUMENTS - Prospec

FINANCIAL INSTRUMENTS - Prospective and retrospective tests (Details) - BRL (R$) R$ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Unrealized gains on financial instruments
Current assets	R$ 30711
Non-current assets	2,706
Unrealized losses on financial instruments
Current liabilities	(5,245)
Non-current liabilities		R$ 1267
Net Income
Gains on financial instruments	49,576	9,666
Losses on financial instruments	(17,484)	(19,107)
Gains (losses) on financial instruments recognized in Net Income	32,092	(9,441)	R$ 38930
Other comprehensive income
Gains (Losses) on financial instruments	11,947	(11,364)	R$ 212
Gains (Losses) on financial instruments recognized in other comprehensive income	11,947	(11,364)
Unrealized gains on financial instruments
Unrealized gains on financial instruments
Current assets	30,711
Non-current assets	2,706
Unrealized gains on financial instruments	33,417
Unrealized losses on financial instruments
Unrealized losses on financial instruments
Current liabilities	R$ 5245
Non-current liabilities		(1,267)
Unrealized losses on financial instruments		R$ 1267

FINANCIAL INSTRUMENTS - Net inv

FINANCIAL INSTRUMENTS - Net investment hedge (Details) R$ in Thousands, $ in Billions	12 Months Ended
	Dec. 31, 2018BRL (R$)	Dec. 31, 2017BRL (R$)	Dec. 31, 2016BRL (R$)	Dec. 31, 2018USD ($)
Net investment hedge
Unrealized gain (loss) on net investment hedge, net of tax \| R$	R$ 1491534	R$ 148560	R$ 1679312
Ten/Thirty Years Bonds
Net investment hedge
Liabilities (not designated as hedges) at fair value through income statement				$ 0.3
Ten/Thirty Years Bonds \| Hedges of net investment in foreign operations
Net investment hedge
Hedging instrument, liabilities				1.8
Unrealized gain (loss) on net investment hedge, net of tax \| R$	R$ 1491534	R$ 148560
Ten/Thirty Years Bonds \| Gerdau Acominas S.A. and subsidiary \| Hedges of net investment in foreign operations
Net investment hedge
Hedging instrument, liabilities				$ 0.1

FINANCIAL INSTRUMENTS - Measure

FINANCIAL INSTRUMENTS - Measurement of fair value (Details) - BRL (R$) R$ in Thousands	Dec. 31, 2018	Dec. 31, 2017
FINANCIAL INSTRUMENTS
Total financial assets	R$ 1750841	R$ 1886067
Total financial liabilities	17,339,894	18,925,008
Fair Value - Measured at Fair Value on a Recurring Basis
FINANCIAL INSTRUMENTS
Total financial assets	1,750,841	1,886,067
Total financial liabilities	17,339,894	18,925,008
Short-term debts \| Fair Value - Measured at Fair Value on a Recurring Basis
FINANCIAL INSTRUMENTS
Current financial liabilities	1,822,183	2,004,341
Unrealized losses on financial instruments
FINANCIAL INSTRUMENTS
Total financial liabilities	5,245	1,267
Unrealized losses on financial instruments \| Fair Value - Measured at Fair Value on a Recurring Basis
FINANCIAL INSTRUMENTS
Current financial liabilities	5,245
Non-current financial liabilities		1,267
Other current liabilities
FINANCIAL INSTRUMENTS
Total financial liabilities	988,967	625,410
Other current liabilities \| Fair Value - Measured at Fair Value on a Recurring Basis
FINANCIAL INSTRUMENTS
Current financial liabilities	988,967	625,410
Long-term debt \| Fair Value - Measured at Fair Value on a Recurring Basis
FINANCIAL INSTRUMENTS
Non-current financial liabilities	11,545,658	14,457,315
Debentures
FINANCIAL INSTRUMENTS
Total financial liabilities	1,538,873	47,928
Debentures \| Fair Value - Measured at Fair Value on a Recurring Basis
FINANCIAL INSTRUMENTS
Non-current financial liabilities	1,538,873	47,928
Obligation with FIDC
FINANCIAL INSTRUMENTS
Total financial liabilities	938,526	1,135,077
Obligation with FIDC \| Fair Value - Measured at Fair Value on a Recurring Basis
FINANCIAL INSTRUMENTS
Non-current financial liabilities	938,526	1,135,077
Other non-current liabilities
FINANCIAL INSTRUMENTS
Total financial liabilities	499,092	653,670
Other non-current liabilities \| Fair Value - Measured at Fair Value on a Recurring Basis
FINANCIAL INSTRUMENTS
Non-current financial liabilities	499,092	653,670
Short-term investments
FINANCIAL INSTRUMENTS
Total financial assets	459,470	821,518
Short-term investments \| Fair Value - Measured at Fair Value on a Recurring Basis
FINANCIAL INSTRUMENTS
Current financial assets	459,470	821,518
Unrealized gains on financial instruments
FINANCIAL INSTRUMENTS
Total financial assets	33,417
Unrealized gains on financial instruments \| Fair Value - Measured at Fair Value on a Recurring Basis
FINANCIAL INSTRUMENTS
Current financial assets	30,711
Other current assets
FINANCIAL INSTRUMENTS
Total financial assets	780,423	469,737
Other current assets \| Fair Value - Measured at Fair Value on a Recurring Basis
FINANCIAL INSTRUMENTS
Current financial assets	780,423	469,737
Related parties
FINANCIAL INSTRUMENTS
Total financial assets	27,939	51,839
Total financial liabilities	1,350
Related parties \| Fair Value - Measured at Fair Value on a Recurring Basis
FINANCIAL INSTRUMENTS
Non-current financial assets	27,939	51,839
Non-current financial liabilities	1,350
Unrealized gains on financial instruments, noncurrent \| Fair Value - Measured at Fair Value on a Recurring Basis
FINANCIAL INSTRUMENTS
Non-current financial assets	2,706
Other non-current assets
FINANCIAL INSTRUMENTS
Total financial assets	449,592	542,973
Other non-current assets \| Fair Value - Measured at Fair Value on a Recurring Basis
FINANCIAL INSTRUMENTS
Non-current financial assets	449,592	542,973
Quoted Prices Active Markets for Identical Assets (Level 1) \| Fair Value - Measured at Fair Value on a Recurring Basis
FINANCIAL INSTRUMENTS
Total financial assets	114,027	238,008
Quoted Prices Active Markets for Identical Assets (Level 1) \| Short-term investments \| Fair Value - Measured at Fair Value on a Recurring Basis
FINANCIAL INSTRUMENTS
Current financial assets	114,027	238,008
Quoted Prices in Non-Active Markets for Similar Assets (Level 2) \| Fair Value - Measured at Fair Value on a Recurring Basis
FINANCIAL INSTRUMENTS
Total financial assets	1,636,814	1,648,059
Total financial liabilities	17,339,894	18,925,008
Quoted Prices in Non-Active Markets for Similar Assets (Level 2) \| Short-term debts \| Fair Value - Measured at Fair Value on a Recurring Basis
FINANCIAL INSTRUMENTS
Current financial liabilities	1,822,183	2,004,341
Quoted Prices in Non-Active Markets for Similar Assets (Level 2) \| Unrealized losses on financial instruments \| Fair Value - Measured at Fair Value on a Recurring Basis
FINANCIAL INSTRUMENTS
Current financial liabilities	5,245
Non-current financial liabilities		1,267
Quoted Prices in Non-Active Markets for Similar Assets (Level 2) \| Other current liabilities \| Fair Value - Measured at Fair Value on a Recurring Basis
FINANCIAL INSTRUMENTS
Current financial liabilities	988,967	625,410
Quoted Prices in Non-Active Markets for Similar Assets (Level 2) \| Long-term debt \| Fair Value - Measured at Fair Value on a Recurring Basis
FINANCIAL INSTRUMENTS
Non-current financial liabilities	11,545,658	14,457,315
Quoted Prices in Non-Active Markets for Similar Assets (Level 2) \| Debentures \| Fair Value - Measured at Fair Value on a Recurring Basis
FINANCIAL INSTRUMENTS
Non-current financial liabilities	1,538,873	47,928
Quoted Prices in Non-Active Markets for Similar Assets (Level 2) \| Obligation with FIDC \| Fair Value - Measured at Fair Value on a Recurring Basis
FINANCIAL INSTRUMENTS
Non-current financial liabilities	938,526	1,135,077
Quoted Prices in Non-Active Markets for Similar Assets (Level 2) \| Other non-current liabilities \| Fair Value - Measured at Fair Value on a Recurring Basis
FINANCIAL INSTRUMENTS
Non-current financial liabilities	499,092	653,670
Quoted Prices in Non-Active Markets for Similar Assets (Level 2) \| Short-term investments \| Fair Value - Measured at Fair Value on a Recurring Basis
FINANCIAL INSTRUMENTS
Current financial assets	345,443	583,510
Quoted Prices in Non-Active Markets for Similar Assets (Level 2) \| Unrealized gains on financial instruments \| Fair Value - Measured at Fair Value on a Recurring Basis
FINANCIAL INSTRUMENTS
Current financial assets	30,711
Quoted Prices in Non-Active Markets for Similar Assets (Level 2) \| Other current assets \| Fair Value - Measured at Fair Value on a Recurring Basis
FINANCIAL INSTRUMENTS
Current financial assets	780,423	469,737
Quoted Prices in Non-Active Markets for Similar Assets (Level 2) \| Related parties \| Fair Value - Measured at Fair Value on a Recurring Basis
FINANCIAL INSTRUMENTS
Non-current financial assets	27,939	51,839
Non-current financial liabilities	1,350
Quoted Prices in Non-Active Markets for Similar Assets (Level 2) \| Unrealized gains on financial instruments, noncurrent \| Fair Value - Measured at Fair Value on a Recurring Basis
FINANCIAL INSTRUMENTS
Non-current financial assets	2,706
Quoted Prices in Non-Active Markets for Similar Assets (Level 2) \| Other non-current assets \| Fair Value - Measured at Fair Value on a Recurring Basis
FINANCIAL INSTRUMENTS
Non-current financial assets	R$ 449592	R$ 542973

FINANCIAL INSTRUMENTS - Changes

FINANCIAL INSTRUMENTS - Changes in liabilities from Cash Flow from financing activities (Details) - BRL (R$) R$ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Related parties, net
Changes in liabilities from Cash flow from financing activities
Beginning of year	R$ 51839	R$ 57541	R$ 53506
Cash transactions
Proceeds/(Repayment) from financing activities	25,755	5,797	(6,492)
Non cash transactions
Interest expense on loans and Interest on loans with related parties	(545)	(95)	2,457
Exchange variation, operations with subsidiaries and associate company and others	40
End of year	(26,589)	(51,839)	(57,541)
Debt, Debentures And Losses/Gains On Financial Instruments, Net
Changes in liabilities from Cash flow from financing activities
Beginning of year	16,510,851	20,576,866	26,417,256
Cash transactions
Proceeds/(Repayment) from financing activities	(3,439,644)	(3,975,541)	(2,150,035)
Interest paid on loans and financing	(1,162,364)	(1,330,116)	(1,240,165)
Non cash transactions
Interest expense on loans and Interest on loans with related parties	1,177,686	1,323,448	1,540,797
Exchange variation, operations with subsidiaries and associate company and others	1,825,430	(83,806)	(3,990,987)
End of year	R$ 14911959	R$ 16510851	R$ 20576866

TAXES PAYABLE (Details)

TAXES PAYABLE (Details) - BRL (R$) R$ in Thousands	Dec. 31, 2018	Dec. 31, 2017
TAXES PAYABLE
Payroll charges	R$ 58907	R$ 75752
ICMS (state VAT)	25,385	37,444
COFINS (tax on revenue)	2,162	5,411
IPI (federal VAT)	14,372	17,305
IVA (value-added tax) and others	250,719	148,189
Taxes payable	R$ 351545	R$ 284101

TAX, CIVIL AND LABOR CLAIMS A_3

TAX, CIVIL AND LABOR CLAIMS AND CONTINGENT ASSETS - Provisions (Details) - BRL (R$) R$ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2018	Dec. 31, 2016	Dec. 31, 2015
Other provisions disclosures
Provision for tax, civil, and labor liabilities	R$ 827883	R$ 770305
Reversal of provision for tax liabilities, net	929,711
Reversal of interest on provision for tax liabilities, net	369,819
Judicial deposits, ICMS legal proceeding		1,763,085
Legal proceedings provision
Other provisions disclosures
Provision for tax, civil, and labor liabilities	827,883	770,305	R$ 2239226	R$ 1904730
Reversal of provision for tax liabilities, net	(929,711)
Reversal of interest on provision for tax liabilities, net	(369,819)
Tax Provisions
Other provisions disclosures
Provision for tax, civil, and labor liabilities	257,621	268,009
Labor provisions
Other provisions disclosures
Provision for tax, civil, and labor liabilities	517,329	449,350
Civil provisions
Other provisions disclosures
Provision for tax, civil, and labor liabilities	R$ 52933	R$ 52946

TAX, CIVIL AND LABOR CLAIMS A_4

TAX, CIVIL AND LABOR CLAIMS AND CONTINGENT ASSETS - Changes in Provisions (Details) - BRL (R$) R$ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Changes in the tax, labor and civil provisions :
Balance at the beginning of the year	R$ 827883
Reversal of contingent liabilities, net		R$ 929711
Reversal of interest on provision for tax liabilities, net		369,819
Balance at the end of the year	770,305	827,883
Legal proceedings provision
Changes in the tax, labor and civil provisions :
Balance at the beginning of the year	827,883	2,239,226	R$ 1904730
Additions	177,684	527,543	313,246
Monetary correction	85,626	77,257	178,661
Reversal of contingent liabilities, net		(929,711)
Reversal of interest on provision for tax liabilities, net		(369,819)
Reversal of accrued amounts	(319,719)	(715,081)	(144,025)
Foreign exchange effect on provisions in foreign currency	(1,169)	(201)	(3,235)
Loss of control by joint venture creation		(1,331)	(10,151)
Balance at the end of the year	R$ 770305	R$ 827883	R$ 2239226

TAX, CIVIL AND LABOR CLAIMS A_5

TAX, CIVIL AND LABOR CLAIMS AND CONTINGENT ASSETS - Tax contingencies (Details) - Tax contingencies R$ in Thousands	Dec. 31, 2018BRL (R$)claimitem	Nov. 27, 2018BRL (R$)	Sep. 18, 2018BRL (R$)	Sep. 17, 2018BRL (R$)	Sep. 12, 2018BRL (R$)	Sep. 03, 2018BRL (R$)	Aug. 31, 2018BRL (R$)	Aug. 28, 2018BRL (R$)	Jul. 06, 2018BRL (R$)	May 25, 2017BRL (R$)
IPI credit on inputs
Contingencies
Estimated financial effect of contingent liabilities	R$ 341659
Non-approval of compensation of credits on inputs
Contingencies
Estimated financial effect of contingent liabilities	968,047
Social security contributions
Contingencies
Estimated financial effect of contingent liabilities	88,374
Other Taxes
Contingencies
Estimated financial effect of contingent liabilities	641,782
Gerdau Acos Longos S.A. and Gerdau Acominas S.A. \| Credit rights and rate differences
Contingencies
Estimated financial effect of contingent liabilities	613,642
Gerdau Acos Longos S.A. and Gerdau Acominas S.A. \| Goodwill Deductibility \| Administrative collection
Contingencies
Estimated financial effect of contingent liabilities	R$ 5128470
Number of proceedings \| claim	4
Gerdau Acos Longos S.A. \| Withholding Income Tax
Contingencies
Estimated financial effect of contingent liabilities	R$ 410893
Number of proceedings \| item	3
Gerdau Acos Longos S.A. \| Withholding Income Tax \| Pending
Contingencies
Estimated financial effect of contingent liabilities							R$ 152885	R$ 132643
Gerdau Acos Longos S.A. \| Withholding Income Tax \| Voluntary Appeal Dismissed
Contingencies
Estimated financial effect of contingent liabilities						R$ 125365
Gerdau Acos Longos S.A. \| Goodwill Deductibility \| Pending
Contingencies
Estimated financial effect of contingent liabilities		R$ 522731	R$ 629753
Gerdau Acos Longos S.A. \| Goodwill Deductibility \| Special appeal filed
Contingencies
Estimated financial effect of contingent liabilities	R$ 297033								R$ 255531
Gerdau Internacional Empreendimentos Ltda. and Gerdau Acos Especiais S.A \| Corporate Income Tax and Social Contribution Tax
Contingencies
Estimated financial effect of contingent liabilities	1,200,672
Gerdau Internacional Empreendimentos Ltda \| Corporate Income Tax and Social Contribution Tax
Contingencies
Estimated financial effect of contingent liabilities	R$ 1023337
Number of proceedings \| claim	2
Gerdau Internacional Empreendimentos Ltda \| Corporate Income Tax and Social Contribution Tax \| Pending
Contingencies
Estimated financial effect of contingent liabilities	R$ 988819
Gerdau Internacional Empreendimentos Ltda \| Corporate Income Tax and Social Contribution Tax \| Voluntary Appeal Partially Granted
Contingencies
Estimated financial effect of contingent liabilities										R$ 372213
Remaining tax Contingency liability from a notice	34,518
Gerdau Internacional Empreendimentos Ltda \| Corporate Income Tax and Social Contribution Tax \| Special appeal filed
Contingencies
Estimated financial effect of contingent liabilities	177,335
Gerdau Acominas S.A., Gerdau Acos Longos S.A., and Gerdau Acos Especiais S.A. \| Goodwill Deductibility \| Administrative collection
Contingencies
Estimated financial effect of contingent liabilities	R$ 7062878
Gerdau Acos Especiais S.A. \| Goodwill Deductibility \| Pending
Contingencies
Estimated financial effect of contingent liabilities				R$ 100686
Gerdau Acos Especiais S.A. \| Goodwill Deductibility \| Special appeal filed
Contingencies
Estimated financial effect of contingent liabilities					R$ 128404

TAX, CIVIL AND LABOR CLAIMS A_6

TAX, CIVIL AND LABOR CLAIMS AND CONTINGENT ASSETS - Civil Contingencies and Administrative proceedings (Details) R$ in Thousands	Aug. 01, 2013BRL (R$)	Sep. 23, 2005BRL (R$)item	Dec. 31, 2018BRL (R$)item	Jul. 14, 2015
Civil contingencies \| Antitrust Legislation
Contingencies
Number of civil construction unions \| item		2
Fine for existence of cartel on gross revenues (in percentage)		7.00%
Fine for existence of cartel		R$ 245070
Fine for existence of cartel updated by judicial accounting	R$ 417820
Number of lawsuits that challenged the investigation \| item			2
Civil contingencies \| Other Demands Of a Civil Nature
Contingencies
Estimated financial effect of contingent liabilities			R$ 234626
Gerdau Acos Longos S.A. \| Administrative proceedings contingencies
Administrative proceedings disclosures
Percentage of voting equity interests acquired				4.77%
Gerdau Acominas S.A. and subsidiary \| Administrative proceedings contingencies
Administrative proceedings disclosures
Percentage of voting equity interests acquired				3.50%
Gerdau Acos Especiais S.A. \| Administrative proceedings contingencies
Administrative proceedings disclosures
Percentage of voting equity interests acquired				2.39%
Gerdau America Latina Participacoes S.A. \| Administrative proceedings contingencies
Administrative proceedings disclosures
Percentage of voting equity interests acquired				4.90%

TAX, CIVIL AND LABOR CLAIMS A_7

TAX, CIVIL AND LABOR CLAIMS AND CONTINGENT ASSETS - Judicial Deposits (Details) - BRL (R$) R$ in Thousands	Dec. 31, 2018	Dec. 31, 2017
TAX, CIVIL AND LABOR CLAIMS AND CONTINGENT ASSETS
Tax	R$ 1963859	R$ 1883562
Labor	126,620	128,849
Civil	44,935	38,770
Judicial deposits	R$ 2135414	R$ 2051181

TAX, CIVIL AND LABOR CLAIMS A_8

TAX, CIVIL AND LABOR CLAIMS AND CONTINGENT ASSETS - Contingent Assets (Details) R$ in Millions	12 Months Ended
	Dec. 31, 2018BRL (R$)kW
TAX, CIVIL AND LABOR CLAIMS AND CONTINGENT ASSETS
Minimum industrial consumers monthly electricity consumption limit (in Kilo watt hour) \| kW	2,000
Maximum period to return the compulsory loan to taxpayers	20 years
Claims receivable from monetary correction of principal, interest, moratory and others due to compulsory loans \| R$	R$ 1260

RELATED-PARTY TRANSACTIONS - In

RELATED-PARTY TRANSACTIONS - Intercompany loans (Details) - BRL (R$) R$ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
RELATED PARTY TRANSACTIONS
Assets	R$ 27939	R$ 51839
Liabilities	(1,350)
Net financial income	545	95	R$ 2457
Diaco S.A.
RELATED PARTY TRANSACTIONS
Liabilities	(1,350)
Gerdau Corsa S.A.P.I de C.V.
RELATED PARTY TRANSACTIONS
Assets	72	7
Fundacao Gerdau
RELATED PARTY TRANSACTIONS
Assets	R$ 27867	R$ 51832

RELATED-PARTY TRANSACTIONS - Op

RELATED-PARTY TRANSACTIONS - Operations with related parties (Details) - BRL (R$) R$ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Controlling shareholders
RELATED PARTY TRANSACTIONS
Guarantee fee percentage	0.95%	0.95%	0.95%
Debenture guarantee fees	R$ 194	R$ 689	R$ 4732
Revenue from rental agreement	445	801	1,001
Investments
RELATED PARTY TRANSACTIONS
Sales to Related parties	1,382,584	630,190	421,415
Purchases from related parties	129,513	121,618	141,275
Net amount, related party transactions	R$ 1253071	R$ 508572	R$ 280140

RELATED-PARTY TRANSACTIONS - _2

RELATED-PARTY TRANSACTIONS - Operations with related parties, guarantees granted (Details) - Financing Agreements - BRL (R$) R$ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Joint-venture \| Diaco S.A.
Guarantees granted
Original Amount	R$ 137700
Carrying Amount		R$ 128019
Joint-venture \| Gerdau Corsa S.A.P.I de C.V.
Guarantees granted
Original Amount	1,875,345
Carrying Amount	1,933,929	1,797,856	R$ 2016260
Joint-venture \| Gerdau Summit Aos Fundidos e Forjados S.A.
Guarantees granted
Original Amount	130,164
Carrying Amount	41,571	6,550
Subsidiary and Joint-venture \| Gerdau Metaldom S.A; Aceros Corsa S.A De C.V
Guarantees granted
Carrying Amount	R$ 198619	R$ 178200

RELATED-PARTY TRANSACTIONS - De

RELATED-PARTY TRANSACTIONS - Debentures (Details) - Direct or indirect shareholders R$ in Thousands	Dec. 31, 2018BRL (R$)instrument	Dec. 31, 2017BRL (R$)instrument
RELATED PARTY TRANSACTIONS
Debentures held \| R$	R$ 0	R$ 348
Number of debentures held \| instrument	0	63

RELATED-PARTY TRANSACTIONS - Ke

RELATED-PARTY TRANSACTIONS - Key Management compensation (Details)	12 Months Ended
	Dec. 31, 2018BRL (R$)OptionsEquityInstruments	Dec. 31, 2017BRL (R$)OptionsEquityInstruments	Dec. 31, 2016BRL (R$)OptionsEquityInstruments
Key Management personnel
RELATED PARTY TRANSACTIONS
Key management salaries, variable compensation and benefits	R$ 50310000	R$ 38510000
Contributions to defined contribution pension plans	1,595,000	1,158,000
Long term incentive plan attributable to key management	R$ 23189000	R$ 10451000	R$ 14095000
Stock options
Number of shares
Balance, beginning of year \| Options	292,391	569,115	1,074,246
Options Cancelled \| Options	(243,412)	(276,724)	(505,131)
Balance, end of year \| Options	15,480	292,391	569,115
Weighted exercise price
Beginning of year	R$ 17.91	R$ 16.64	R$ 18.36
Options Cancelled	18.62	15.11	20.49
End of year	R$ 16.72	R$ 17.91	R$ 16.64
Stock options \| Key Management personnel
Number of shares
Balance, beginning of year \| Options	198,000
Options Cancelled \| Options	(198,000)
Balance, end of year \| Options		198,000
Weighted exercise price
Beginning of year	R$ 18.19
Options Cancelled	R$ 18.62
End of year		R$ 18.19
Restricted shares \| Key Management personnel
Restricted shares granted to Management
Balance, beginning of year \| EquityInstruments	5,945,310	4,831,999
Granted \| EquityInstruments	1,255,286	1,353,930
Exercised \| EquityInstruments	(511,333)	(240,619)
Shares adjustment \| EquityInstruments	(313,716)
Balance, end of year \| EquityInstruments	6,375,547	5,945,310	4,831,999

EMPLOYEE BENEFITS - Summary (De

EMPLOYEE BENEFITS - Summary (Details) - BRL (R$) R$ in Thousands	Dec. 31, 2018	Dec. 31, 2017
EMPLOYEE BENEFITS
Plan assets	R$ 17952	R$ 1149
Total liabilities	1,356,717	1,424,864
Current	157	253
Non-current	1,356,560	1,424,611
Defined contribution pension plan
EMPLOYEE BENEFITS
Plan assets	17,952	1,149
Defined benefit pension plan
EMPLOYEE BENEFITS
Total liabilities	1,057,846	1,084,758
Post-employment health care benefit
EMPLOYEE BENEFITS
Total liabilities	272,369	316,230
Retirement and termination benefits
EMPLOYEE BENEFITS
Total liabilities	R$ 26502	R$ 23876

EMPLOYEE BENEFITS - Post-employ

EMPLOYEE BENEFITS - Post-employment defined benefit pension plan (Details) - BRL (R$) R$ in Thousands	Dec. 31, 2018	Dec. 31, 2017
Post-employment defined benefit pension plans
EMPLOYEE BENEFITS
Accumulated other comprehensive income	R$ 1075377	R$ 1227722
North-American defined benefit plans \| Discount rate
EMPLOYEE BENEFITS
Increase in actuarial assumption (as a percent)	1.00%
Decrease in actuarial assumption (as a percent)	1.00%
Increase (decrease) in defined benefit obligation due to increase in actuarial assumption	R$ 14689
Increase (decrease) in defined benefit obligation due to decrease in actuarial assumption	R$ 10346

EMPLOYEE BENEFITS - Defined ben

EMPLOYEE BENEFITS - Defined benefit pension plan - Current expenses (Details) - Defined benefit pension plan - BRL (R$) R$ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Current expenses of the defined benefit pension plans
Cost of current service	R$ 60803	R$ 60595	R$ 57619
Interest expense	82,513	90,381	199,389
Return on plan assets	(59,692)	(64,128)	(186,856)
Past service cost	7,065	1,082	2,788
Settlement	3,220	(566)	609
Interest cost on unrecoverable surplus	20,023	21,211	22,916
Net pension cost (benefit)	R$ 113932	R$ 108575	R$ 96465

EMPLOYEE BENEFITS - Defined b_2

EMPLOYEE BENEFITS - Defined benefit pension plan - Reconciliation of plan assets and liabilities (Details) - Defined benefit pension plan - BRL (R$) R$ in Thousands	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Reconciliations of assets and liabilities of the plans
Net	R$ 1057849	R$ 1084758
Defined benefit obligation	(1,057,849)	(1,084,758)
Present value of the defined benefit obligations
Reconciliations of assets and liabilities of the plans
Net	(4,391,251)	(4,314,592)	R$ 4174653	R$ 4739299
Plan assets
Reconciliations of assets and liabilities of the plans
Net	3,568,934	3,456,613	R$ 3292890	R$ 3865411
Asset ceiling restrictions on recognition of net funded assets
Reconciliations of assets and liabilities of the plans
Net	R$ 235532	R$ 226779

EMPLOYEE BENEFITS - Defined b_3

EMPLOYEE BENEFITS - Defined benefit pension plan - Variation of the plan obligations (Details) - Defined benefit pension plan - BRL (R$) R$ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
EMPLOYEE BENEFITS
Obligation at the beginning of the year	R$ 1084758
Cost of service	60,803	R$ 60595	R$ 57619
Interest expense	82,513	90,381	199,389
Past service cost	7,065	1,082	2,788
Obligation at the end of the year	1,057,849	1,084,758
Present value of the defined benefit obligations
EMPLOYEE BENEFITS
Obligation at the beginning of the year	4,314,592	4,174,653	4,739,299
Cost of service	60,803	60,595	57,619
Interest expense	188,729	195,557	199,389
Payment of benefits	(318,198)	(335,471)	(317,505)
Past service cost	7,065	1,082	2,788
Supplementary amounts of the plan	17,078
Settlement	(61,369)	(52,035)	609
Gain (loss) on remeasurement	(370,083)	235,549	186,905
Liabilities held for sale		(101,794)
Exchange Variance	552,634	136,456	(694,451)
Obligation at the end of the year	R$ 4391251	R$ 4314592	R$ 4174653

EMPLOYEE BENEFITS - Defined b_4

EMPLOYEE BENEFITS - Defined benefit pension plan - Variation of the plan assets (Details) - Defined benefit pension plan - BRL (R$) R$ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
EMPLOYEE BENEFITS
Fair value of the plan assets at the beginning of the year	R$ 1084758
Return of the plan assets	59,692	R$ 64128	R$ 186856
Fair value of plan assets at the end of the year	(1,057,849)	(1,084,758)
Plan assets
EMPLOYEE BENEFITS
Fair value of the plan assets at the beginning of the year	3,456,613	3,292,890	3,865,411
Return of the plan assets	165,908	169,304	186,857
Contributions from sponsors	197,828	111,450	(47,574)
Settlement	(64,868)	(51,469)	(6,710)
Payment of benefits	(318,198)	(335,471)	(317,505)
Remeasurement	(253,301)	232,214	109,153
Assets held for sale		(73,127)
Exchange Variance	384,952	110,822	(496,742)
Fair value of plan assets at the end of the year	3,568,934	3,456,613	R$ 3292890
Value of shares included in fair value of plan assets	R$ 3427	R$ 3558

EMPLOYEE BENEFITS - Defined b_5

EMPLOYEE BENEFITS - Defined benefit pension plan - Actuarial gains and losses (Details) - Defined benefit pension plan - BRL (R$) R$ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Amounts recognized as actuarial gains and losses in the statement of comprehensive income
Restriction recognized in Other Comprehensive Income	R$ 43197	R$ 1696	R$ 3065
Remeasurements recognized in Other Comprehensive Income	(159,979)	1,639	80,817
Plan assets
Amounts recognized as actuarial gains and losses in the statement of comprehensive income
Gain (loss) on remeasurement	253,301	(232,214)	(109,153)
Present value of the defined benefit obligations
Amounts recognized as actuarial gains and losses in the statement of comprehensive income
Gain (loss) on remeasurement	R$ 370083	R$ 235549	R$ 186905

EMPLOYEE BENEFITS - Defined b_6

EMPLOYEE BENEFITS - Defined benefit pension plan - Historical actuarial remeasurements (Details) - Defined benefit pension plan - BRL (R$) R$ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Historical actuarial remeasurements
Present value of defined benefit obligation	R$ 4391251	R$ 4314592	R$ 4174653	R$ 4739299	R$ 3791670
Fair value of plan assets	3,568,934	3,456,613	3,292,890	3,865,411	3,319,133
Surplus (Deficit)	(822,317)	(857,979)	(881,763)	(873,888)	(472,537)
Present value of the defined benefit obligations
Historical actuarial remeasurements
Experience adjustments on plan liabilities	(370,083)	235,549	186,905	(202,749)	466,829
Plan assets
Historical actuarial remeasurements
Experience adjustments on plan assets	R$ 253301	R$ 232214	R$ 109153	R$ 235275	R$ 69748

EMPLOYEE BENEFITS - Defined b_7

EMPLOYEE BENEFITS - Defined benefit pension plan - Allocation of plan assets (Details)	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Brazil
Allocation for plan assets
Fixed income	98.00%	98.00%
Others	2.00%	2.00%
Total	100.00%	100.00%
North America
Allocation for plan assets
Fixed income	58.10%	48.30%
Variable income	36.50%	45.00%
Others	5.40%	6.70%
Total	100.00%	100.00%
Defined benefit pension plan
Allocation for plan assets
Target allocation of shares (as a percent)	50.00%	50.00%
Target allocation of debt securities (as a percent)	40.00%	40.00%
Target allocation of alternative securities (as a percent)	10.00%	10.00%

EMPLOYEE BENEFITS - Defined b_8

EMPLOYEE BENEFITS - Defined benefit pension plan - Assumptions used to calculate defined benefit plans (Details) - Defined benefit pension plan	Dec. 31, 2018	Dec. 31, 2017
Brazil
Summary of assumptions used to calculate the defined benefit plans
Average discount rate	9.10%	9.84%
North America
Summary of assumptions used to calculate the defined benefit plans
Rate of increase in compensation	3.00%	3.00%
North America \| Minimum
Summary of assumptions used to calculate the defined benefit plans
Average discount rate	3.50%	3.25%
North America \| Maximum
Summary of assumptions used to calculate the defined benefit plans
Average discount rate	4.25%	4.25%

EMPLOYEE BENEFITS - Post-empl_2

EMPLOYEE BENEFITS - Post-employment defined contribution pension plan (Details) - BRL (R$) R$ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Defined contribution pension plan
EMPLOYEE BENEFITS
Total cost	R$ 123225	R$ 132399

EMPLOYEE BENEFITS - Post-empl_3

EMPLOYEE BENEFITS - Post-employment health care benefit plan - Net periodic costs (Details) - Post-employment health care benefit - BRL (R$) R$ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Net periodic costs of post-employment health care benefits
Cost of current service	R$ 4144	R$ 4441	R$ 4481
Interests expense	11,082	12,162	15,494
Past service cost	(40,740)	5,769	(75,787)
Net pension cost (benefit)	R$ 25514	R$ 22372	R$ 55812

EMPLOYEE BENEFITS - Post-empl_4

EMPLOYEE BENEFITS - Post-employment health care benefit plan - Funded status (Details) - Post-employment health care benefit - BRL (R$) R$ in Thousands	Dec. 31, 2018	Dec. 31, 2017
Funded status of the post-employment health benefits plans
Total net liabilities	R$ 272959	R$ 316364
Present value of the defined benefit obligations
Funded status of the post-employment health benefits plans
Total net liabilities	R$ 272959	R$ 316364

EMPLOYEE BENEFITS - Post-empl_5

EMPLOYEE BENEFITS - Post-employment health care benefit plan - Change in obligation (Details) - Post-employment health care benefit - BRL (R$) R$ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
EMPLOYEE BENEFITS
Cost of service	R$ 4144	R$ 4441	R$ 4481
Interest expense	11,082	12,162	15,494
Present value of the defined benefit obligations
EMPLOYEE BENEFITS
Obligation at the beginning of the year	316,364	305,447	446,842
Cost of service	4,144	4,441	4,481
Interest expense	11,082	12,162	15,494
Past service cost	(40,740)	5,769	(75,787)
Contributions from participants	1,496	1,556	2,212
Payment of benefits	(18,655)	(14,230)	(14,799)
Gain (loss) on remeasurement	(40,841)	(14,452)	(3,673)
Exchange variations	40,109	15,671	(69,323)
Obligation at the end of the year	R$ 272959	R$ 316364	R$ 305447

EMPLOYEE BENEFITS - Post-empl_6

EMPLOYEE BENEFITS - Post-employment health care benefit plan - Change in plan assets (Details) - Post-employment health care benefit - Plan assets - BRL (R$) R$ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
EMPLOYEE BENEFITS
Fair value of the plan assets at the beginning of the year	R$ 0	R$ 0
Contributions from sponsors	17,159	12,572	R$ 12463
Contributions from participants	1,496	1,556	2,212
Payment of benefits	(18,655)	(14,128)	(14,675)
Fair value of plan assets at the end of the year	R$ 0	R$ 0	R$ 0

EMPLOYEE BENEFITS - Post-empl_7

EMPLOYEE BENEFITS - Post-employment health care benefit plan - Gains and losses (Details) - Post-employment health care benefit - BRL (R$) R$ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Historical actuarial remeasurements
Present value of defined benefit obligation	R$ 272959	R$ 316364	R$ 305447	R$ 446843	R$ 351538
Surplus (Deficit)	(272,959)	(316,364)	(305,447)	(446,843)	(351,538)
Experience adjustments on plan liabilities	(40,841)	(14,452)	(3,673)	R$ 45884	R$ 42345
Amounts recognized as actuarial gains and losses in the statement of comprehensive income
Losses on actuarial obligation	(40,841)	(14,452)	(3,673)
Pension Plan
Amounts recognized as actuarial gains and losses in the statement of comprehensive income
Actuarial losses recognized in Equity	R$ 40841	R$ 14452	R$ 3673

EMPLOYEE BENEFITS - Post-empl_8

EMPLOYEE BENEFITS - Post-employment health care benefit plan - Assumptions (Details) - Post-employment health care benefit	Dec. 31, 2018	Dec. 31, 2017
Minimum
Summary of assumptions used to calculate the defined benefit plans
Average discount rate	3.75%	3.25%
Health treatment - rate assumed next year	6.60%	6.88%
Health treatment - Assumed rate of decline in the cost to achieve in the years of 2026 to 2041	4.00%	4.00%
Maximum
Summary of assumptions used to calculate the defined benefit plans
Average discount rate	4.25%	3.50%
Health treatment - rate assumed next year	6.75%	7.60%
Health treatment - Assumed rate of decline in the cost to achieve in the years of 2026 to 2041	4.40%	4.50%

EMPLOYEE BENEFITS - Post-empl_9

EMPLOYEE BENEFITS - Post-employment health care benefit plan - Sensitivity Analysis (Details) - Post-employment health care benefit - Discount rate R$ in Thousands	Dec. 31, 2018BRL (R$)
Sensitivity analysis
Increase in actuarial assumption (as a percent)	1.00%
Decrease in actuarial assumption (as a percent)	1.00%
Total service costs and interest costs
Sensitivity analysis
Increase (decrease) in defined benefit obligation due to increase in actuarial assumption	R$ 2051
Increase (decrease) in defined benefit obligation due to decrease in actuarial assumption	(1,612)
Present value of the defined benefit obligations
Sensitivity analysis
Increase (decrease) in defined benefit obligation due to increase in actuarial assumption	27,517
Increase (decrease) in defined benefit obligation due to decrease in actuarial assumption	R$ 22743

EMPLOYEE BENEFITS - Other retir

EMPLOYEE BENEFITS - Other retirement and termination benefits (Details) - BRL (R$) R$ in Thousands	Dec. 31, 2018	Dec. 31, 2017
Retirement and termination benefits
EMPLOYEE BENEFITS
Total obligation	R$ 26502	R$ 23876

ENVIRONMENTAL LIABILITIES (Deta

ENVIRONMENTAL LIABILITIES (Details) - BRL (R$) R$ in Thousands	Dec. 31, 2018	Dec. 31, 2017
ENVIRONMENTAL LIABILITIES
Provision for environmental liabilities	R$ 132647	R$ 85191
Current	60,419	21,928
Non-current	R$ 72228	R$ 63263

OBLIGATIONS WITH FIDC - INVES_2

OBLIGATIONS WITH FIDC - INVESTMENT FUND IN CREDIT RIGHTS (Details) - BRL (R$) R$ in Thousands	Jul. 14, 2015	Dec. 31, 2018	Dec. 31, 2017
OBLIGATIONS WITH FIDC - INVESTMENT FUND IN CREDIT RIGHTS
Non standardized credit right investment, fair value at inception date	R$ 800000
Obligations with FIDC		R$ 938526	R$ 1135077

EQUITY - Common and preferred s

EQUITY - Common and preferred shares outstanding (Details) - BRL (R$) R$ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Capital
Shares exercise period when not a public offering	30 days
Shares exercise period for public offering	10 days
Total capital	R$ 19249181	R$ 19249181
Reconciliations of common and preferred outstanding shares
Number of shares outstanding at end of period	1,696,164,000
Common shares
Capital
Authorized capital	1,500,000,000
Shares subscribed and paid up	573,627,483
Reconciliations of common and preferred outstanding shares
Number of shares outstanding at beginning of the year	571,929,945	571,929,945	571,929,945
Number of shares outstanding at end of period	571,929,945	571,929,945	571,929,945
Preferred shares
Capital
Authorized capital	3,000,000,000
Shares subscribed and paid up	1,146,031,245
Reconciliations of common and preferred outstanding shares
Number of shares outstanding at beginning of the year	1,137,327,184	1,137,018,570	1,114,744,538
Acquisition of Treasury shares	(16,000,000)		(10,000,000)
Exercise of stock options	1,597,235	308,614	2,274,032
Transfer of shares	1,309,336		30,000,000
Number of shares outstanding at end of period	1,124,233,755	1,137,327,184	1,137,018,570

EQUITY - Ownership of shares (D

EQUITY - Ownership of shares (Details) - shares	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Capital
Number of shares held	1,719,658,728	1,719,658,728	1,719,658,728
Shares Issued, Percentage	100.00%	100.00%	100.00%
Metalurgica Gerdau S.A.
Capital
Number of shares held	653,368,823	653,370,032	652,519,280
Shares Issued, Percentage	38.00%	38.00%	37.90%
Brazilian institutional investors
Capital
Number of shares held	226,456,754	155,482,209	134,604,327
Shares Issued, Percentage	13.20%	9.00%	7.80%
Foreign institutional investors
Capital
Number of shares held	415,223,778	715,363,943	716,775,213
Shares Issued, Percentage	24.10%	41.60%	41.80%
Other shareholders
Capital
Number of shares held	401,114,345	185,040,945	205,049,695
Shares Issued, Percentage	23.30%	10.80%	11.90%
Common shares
Capital
Number of shares held	573,627,483	573,627,483	573,627,483
Shares Issued, Percentage	100.00%	100.00%	100.00%
Common shares \| Metalurgica Gerdau S.A.
Capital
Number of shares held	557,898,901	557,898,901	449,712,654
Shares Issued, Percentage	97.30%	97.30%	78.40%
Common shares \| Brazilian institutional investors
Capital
Number of shares held	2,383,207	254,785	41,883,032
Shares Issued, Percentage	0.40%	0.00%	7.30%
Common shares \| Foreign institutional investors
Capital
Number of shares held	4,836,488	7,254,556	11,122,498
Shares Issued, Percentage	0.80%	1.30%	1.90%
Common shares \| Other shareholders
Capital
Number of shares held	6,811,349	6,521,703	69,211,761
Shares Issued, Percentage	1.20%	1.10%	12.10%
Preferred shares
Capital
Number of shares held	1,146,031,245	1,146,031,245	1,146,031,245
Shares Issued, Percentage	100.00%	100.00%	100.00%
Preferred shares \| Metalurgica Gerdau S.A.
Capital
Number of shares held	95,469,922	95,471,131	202,806,626
Shares Issued, Percentage	8.30%	8.30%	17.70%
Preferred shares \| Brazilian institutional investors
Capital
Number of shares held	224,073,547	155,227,424	92,721,295
Shares Issued, Percentage	19.60%	13.50%	8.10%
Preferred shares \| Foreign institutional investors
Capital
Number of shares held	410,387,290	708,109,387	705,652,715
Shares Issued, Percentage	35.80%	61.80%	61.50%
Preferred shares \| Other shareholders
Capital
Number of shares held	394,302,996	178,519,242	135,837,934
Shares Issued, Percentage	34.40%	15.60%	11.90%
Treasury Stocks
Capital
Number of shares held	23,495,028	10,401,599	10,710,213
Shares Issued, Percentage	1.40%	0.60%	0.60%
Treasury Stocks \| Common shares
Capital
Number of shares held	1,697,538	1,697,538	1,697,538
Shares Issued, Percentage	0.30%	0.30%	0.30%
Treasury Stocks \| Preferred shares
Capital
Number of shares held	21,797,490	8,704,061	9,012,675
Shares Issued, Percentage	1.90%	0.80%	0.80%

EQUITY - Treasury stocks (Detai

EQUITY - Treasury stocks (Details) - BRL (R$) R$ / shares in Units, R$ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Capital
Number of shares outstanding at end of period	1,696,164,000
Equity at beginning of period	R$ 23893941	R$ 24274653	R$ 31970383
Repurchases	243,723		95,370
Exercise of stock options	23,354	19,682	5,560
Transfer of shares	18,984		205,800
Equity at end of period	R$ 25938571	R$ 23893941	R$ 24274653
Investments and working capital reserve
Investments and working capital reserve, annual percentage	5.00%
Common shares
Capital
Number of shares outstanding at beginning of the year	571,929,945	571,929,945	571,929,945
Number of shares outstanding at end of period	571,929,945	571,929,945	571,929,945
Preferred shares
Capital
Number of shares outstanding at beginning of the year	1,137,327,184	1,137,018,570	1,114,744,538
Repurchases	16,000,000		10,000,000
Exercise of stock options	1,597,235	308,614	2,274,032
Transfer of shares	1,309,336		30,000,000
Number of shares outstanding at end of period	1,124,233,755	1,137,327,184	1,137,018,570
Treasury Stocks
Capital
Equity at beginning of period	R$ 76085	R$ 98746	R$ 383363
Repurchases	243,396		95,343
Exercise of stock options	27,433	22,661	10,461
Transfer of shares	11,622		369,499
Equity at end of period	R$ 280426	R$ 76085	R$ 98746
Average acquisition cost	R$ 12.84	R$ 8.68	R$ 10.89
Treasury Stocks \| Common shares
Capital
Number of shares outstanding at beginning of the year	1,697,538	1,697,538	1,697,538
Number of shares outstanding at end of period	1,697,538	1,697,538	1,697,538
Equity at beginning of period	R$ 557	R$ 557	R$ 557
Equity at end of period	R$ 557	R$ 557	R$ 557
Treasury Stocks \| Preferred shares
Capital
Number of shares outstanding at beginning of the year	8,704,061	9,012,675	31,286,707
Repurchases	16,000,000		10,000,000
Exercise of stock options	(1,597,235)	(308,614)	(2,274,032)
Transfer of shares	(1,309,336)		(30,000,000)
Number of shares outstanding at end of period	21,797,490	8,704,061	9,012,675
Equity at beginning of period	R$ 75528	R$ 98189	R$ 382806
Repurchases	243,396		95,343
Exercise of stock options	(27,433)	(22,661)	(10,461)
Transfer of shares	(11,622)		(369,499)
Equity at end of period	R$ 279869	R$ 75528	R$ 98189

EQUITY - Operations with non-co

EQUITY - Operations with non-controlling interests (Details) - BRL (R$) R$ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Capital
Effect of interest changes in subsidiaries	R$ 85477	R$ 19194	R$ 2252
Total Parent company's interest
Capital
Effect of interest changes in subsidiaries	6	2,504	4,153
Non-controlling interests
Capital
Changes in the Paraopeba- Fixed Income Investment Fund	(85,483)	(21,698)	(6,405)
Effect of interest changes in subsidiaries	R$ 85483	R$ 21698	R$ 6405

EQUITY - Dividends and interest

EQUITY - Dividends and interest on capital (Details) - BRL (R$) R$ / shares in Units, R$ in Thousands

3 Months Ended

12 Months Ended

Dec. 31, 2018

Sep. 30, 2018

Jun. 30, 2018

Mar. 31, 2018

Dec. 31, 2017

Sep. 30, 2017

Jun. 30, 2017

Sep. 30, 2016

Jun. 30, 2016

Dec. 31, 2018

Dec. 31, 2017

Dec. 31, 2016

Dividends and interest on capital

Minimum annual mandatory dividend (as a percent)

30.00%

Related tax benefit arising from the recording of interest on shareholders' capital as financial expense for tax purposes

R$ 127311

Appropriation of retained earnings

Net income (loss) available to owners of parent

2,303,868

R$ 359360

R$ 2890811

Dividends and interest on capital

R$ 770363

Dividends and interest on capital

Interest on capital paid (in R$/share)

R$ 0.14

R$ 0.08

Dividends paid (in R$/share)

R$ 0.10

R$ 0.13

R$ 0.10

Outstanding shares

1,696,164,000

1,702,138,000

1,702,095

1,701,894,000

1,696,164,000

Retained earnings

Appropriation of retained earnings

Net income (loss) available to owners of parent

R$ 2303868

(359,360)

(2,890,811)

Constitution of legal reserve

(115,193)

Constitution of the tax incentives reserve

(17,051)

Net income (loss) before dividends and interest on capital

2,171,624

(359,360)

(2,890,811)

Dividends and interest on capital

(765,339)

Net income (loss) before constitution of investments and working capital reserve

1,406,285

(359,360)

(2,890,811)

Constitution of investments and working capital reserve

(1,406,285)

Absorption of net loss by investments and working capital reserve

359,360

2,890,811

Total Parent company's interest

Appropriation of retained earnings

Dividends and interest on capital

(765,339)

Dividends and interest on capital

Interest

R$ 238293

R$ 136152

Dividends

R$ 169616

R$ 221278

R$ 51020

R$ 51278

R$ 34184

R$ 34152

R$ 51225

Interest and Dividends

R$ 765339

R$ 136482

R$ 85377

Credit per share (R$)

R$ 0.45

R$ 0.08

R$ 0.05

EARNINGS (LOSS) PER SHARE (EP_3

EARNINGS (LOSS) PER SHARE (EPS) - Basic (Details) - BRL (R$) R$ / shares in Units, R$ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Basic numerator
Net income (loss) available to owners of parent	R$ 2303868	R$ 359360	R$ 2890811
Basic denominator
Basic earnings/(loss) per share	R$ 1.35	R$ 0.21	R$ 1.70
Common shares
Basic numerator
Net income (loss) available to owners of parent	R$ 774279	R$ 120267	R$ 969954
Basic denominator
Weighted-average outstanding shares, after deducting the average treasury shares	571,929,945	571,929,945	571,929,945
Basic earnings/(loss) per share	R$ 1.35	R$ 0.21	R$ 1.70
Preferred shares
Basic numerator
Net income (loss) available to owners of parent	R$ 1529589	R$ 239093	R$ 1920857
Basic denominator
Weighted-average outstanding shares, after deducting the average treasury shares	1,129,851,598	1,137,012,265	1,132,626,373
Basic earnings/(loss) per share	R$ 1.35	R$ 0.21	R$ 1.70

EARNINGS (LOSS) PER SHARE (EP_4

EARNINGS (LOSS) PER SHARE (EPS) - Diluted (Details) - BRL (R$) R$ / shares in Units, R$ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Allocated net income available to Common and Preferred shareholders
Net income (loss) available to owners of parent	R$ 2303868	R$ 359360	R$ 2890811
Weighted - average number of shares outstanding
Earnings per share - Diluted (Common and Preferred Shares)	R$ 1.34	R$ 0.21	R$ 1.70
Common shares
Allocated net income available to Common and Preferred shareholders
Net income (loss) available to owners of parent	R$ 774279	R$ 120267	R$ 969954
Adjustment to net income in respect to the potential increase in number of shares outstanding, as a result of options granted to acquire stock of Gerdau	(6,515)
Net income (loss) available to owners of parent including effects of dilutive shares	R$ 767764
Weighted - average number of shares outstanding
Weighted-average number of shares outstanding	571,929,945
Preferred shares
Allocated net income available to Common and Preferred shareholders
Net income (loss) available to owners of parent	R$ 1529589	R$ 239093	R$ 1920857
Adjustment to net income in respect to the potential increase in number of shares outstanding, as a result of options granted to acquire stock of Gerdau	6,515
Net income (loss) available to owners of parent including effects of dilutive shares	R$ 1536104
Weighted - average number of shares outstanding
Weighted-average number of shares outstanding	1,129,851,598
Potential increase in number of preferred shares outstanding in respect of stock option plan	14,440,860
Total	1,144,292,458

NET SALES (Details)

NET SALES (Details) - BRL (R$) R$ in Thousands	12 Months Ended
NET SALES (Details) - BRL (R$) R$ in Thousands	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
NET SALES
Gross sales	R$ 51861423	R$ 42156553	R$ 42935022
Taxes on sales	(3,793,516)	(2,956,896)	(2,765,957)
Discounts	(1,908,429)	(2,282,038)	(2,517,398)
Net sales	R$ 46159478	R$ 36917619	R$ 37651667

LONG-TERM INCENTIVE PLANS - Res

LONG-TERM INCENTIVE PLANS - Restricted Shares and Performance Shares (Details) - Restricted Shares and Performance Shares R$ in Thousands	12 Months Ended
	Dec. 31, 2018BRL (R$)EquityInstrumentsshares	Dec. 31, 2017BRL (R$)EquityInstruments	Dec. 31, 2016EquityInstruments
LONG-TERM INCENTIVE PLANS
Balance, beginning of year	18,975,084	20,433,491	12,525,256
Granted	2,411,345	3,170,952	13,357,922
Cancelled	(3,150,635)	(1,901,782)	(3,046,593)
Exercised	(3,974,293)	(2,727,577)	(2,403,094)
Balance, end of year	14,261,501	18,975,084	20,433,491
Expense from equity-settled long-term incentive plan \| R$	R$ 41186	R$ 25403
Grace period		3 years	5 years
Preferred shares
LONG-TERM INCENTIVE PLANS
Treasury shares \| shares	21,797,490

LONG-TERM INCENTIVE PLANS - Sto

LONG-TERM INCENTIVE PLANS - Stock option activity (Details) - Stock options	12 Months Ended
	Dec. 31, 2018BRL (R$)Options	Dec. 31, 2017BRL (R$)Options	Dec. 31, 2016BRL (R$)Options
Number of shares
Balance, beginning of year \| Options	292,391	569,115	1,074,246
Options Exercised \| Options	(33,499)
Options Forfeited \| Options	(243,412)	(276,724)	(505,131)
Balance, end of year \| Options	15,480	292,391	569,115
Average exercise price in the year
Beginning of year	R$ 17.91	R$ 16.64	R$ 18.36
Options Exercised	14.86
Options Forfeited	18.62	15.11	20.49
End of year	16.72	17.91	16.64
Average market price of the share	R$ 15.70	R$ 11.19	R$ 11.68

LONG-TERM INCENTIVE PLANS - Exe

LONG-TERM INCENTIVE PLANS - Exercise of stock options (Details) - Stock options	Dec. 31, 2018BRL (R$)YOptions	Dec. 31, 2017BRL (R$)Options	Dec. 31, 2016BRL (R$)Options	Dec. 31, 2015BRL (R$)Options
Exercise price of options
Quantity (in shares)	15,480	292,391	569,115	1,074,246
Average exercise price \| R$	R$ 16.72	R$ 17.91	R$ 16.64	R$ 18.36
Number exercisable at end of the period (in shares)	15,480	57,668	57,678
R$ 16.86
Exercise price of options
Exercise price \| R$	R$ 16.86
Quantity (in shares)	10,754
Average period of grace (in years) \| Y	0.2
Average exercise price \| R$	R$ 15.90
Number exercisable at end of the period (in shares)	10,754
R$ 18.58
Exercise price of options
Exercise price \| R$	R$ 18.58
Quantity (in shares)	4,726
Average period of grace (in years) \| Y	4
Average exercise price \| R$	R$ 18.58
Number exercisable at end of the period (in shares)	4,726

SEGMENT REPORTING - Summary (De

SEGMENT REPORTING - Summary (Details) - BRL (R$) R$ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Segment reporting as per business segments
Net sales	R$ 46159478	R$ 36917619	R$ 37651667
Cost of sales	(40,010,100)	(33,312,995)	(34,187,941)
GROSS PROFIT	6,149,378	3,604,624	3,463,726
Selling, general and administrative expenses	(1,662,794)	(1,654,908)	(2,239,028)
Other operating income (expenses)	(34,992)	91,731	127,847
Impairment of assets		(1,114,807)	(2,917,911)
Results in operations with subsidiaries and associate company	(414,507)	(721,682)	(58,223)
Reversal of provision for tax liabilities, net		929,711
Equity in earnings of unconsolidated companies	10,141	(34,597)	(12,771)
INCOME (LOSS) BEFORE FINANCIAL INCOME (EXPENSES) AND TAXES	4,047,226	1,100,072	(1,636,360)
Financial result, net	(1,889,795)	(1,143,348)	(945,255)
INCOME (LOSS) BEFORE TAXES	2,157,431	(43,276)	(2,581,615)
Income and social contribution taxes	168,951	(295,391)	(304,314)
Net income (loss)	2,326,382	(338,667)	(2,885,929)
Depreciation/amortization	1,891,814	2,092,551	2,535,955
Investments in associates and jointly-controlled entities	1,367,802	1,280,299	798,844	R$ 1392882
Total assets	51,281,029	50,301,761	54,635,141
Total liabilities	25,342,458	26,407,820	30,360,488
Operating Segments \| Brazil
Segment reporting as per business segments
Net sales	15,745,161	12,562,727	11,634,862
Cost of sales	(13,044,433)	(10,996,383)	(10,405,078)
GROSS PROFIT	2,700,728	1,566,344	1,229,784
Selling, general and administrative expenses	(564,031)	(539,613)	(678,369)
Other operating income (expenses)	(33,814)	(11,513)	2,111
Impairment of assets		(45,279)
Equity in earnings of unconsolidated companies	(1,700)
INCOME (LOSS) BEFORE FINANCIAL INCOME (EXPENSES) AND TAXES	2,101,183	969,939	553,526
Financial result, net	(442,966)	(564,397)	(603,373)
INCOME (LOSS) BEFORE TAXES	1,658,217	405,542	(49,847)
Income and social contribution taxes	(410,651)	(103,263)	13,140
Net income (loss)	1,247,566	302,279	(36,707)
Depreciation/amortization	951,826	909,333	952,848
Investments in associates and jointly-controlled entities	3,250
Total assets	17,473,039	17,051,262	18,672,770
Total liabilities	8,072,380	9,592,948	10,761,705
Operating Segments \| North America
Segment reporting as per business segments
Net sales	19,927,390	15,433,380	15,430,814
Cost of sales	(18,164,834)	(14,823,590)	(14,514,789)
GROSS PROFIT	1,762,556	609,790	916,025
Selling, general and administrative expenses	(607,581)	(569,696)	(778,218)
Other operating income (expenses)	19,114	29,113	26,223
Impairment of assets		(1,069,528)	(2,779,146)
Equity in earnings of unconsolidated companies	(77,872)	(111,581)	(46,917)
INCOME (LOSS) BEFORE FINANCIAL INCOME (EXPENSES) AND TAXES	1,096,217	(1,111,902)	(2,662,033)
Financial result, net	(37,351)	(46,184)	(63,654)
INCOME (LOSS) BEFORE TAXES	1,058,866	(1,158,086)	(2,725,687)
Income and social contribution taxes	(224,897)	201,807	133,818
Net income (loss)	833,969	(956,279)	(2,591,869)
Depreciation/amortization	511,154	684,121	874,299
Investments in associates and jointly-controlled entities	301,271	346,080	303,526
Total assets	14,659,926	14,872,755	16,459,784
Total liabilities	4,935,210	3,315,546	3,407,444
Operating Segments \| South America
Segment reporting as per business segments
Net sales	3,801,210	4,025,736	4,775,598
Cost of sales	(3,230,952)	(3,523,394)	(4,103,231)
GROSS PROFIT	570,258	502,342	672,367
Selling, general and administrative expenses	(136,707)	(202,862)	(253,177)
Other operating income (expenses)	(11,421)	11,260	41,396
Impairment of assets			(138,765)
Equity in earnings of unconsolidated companies	51,648	41,554	16,366
INCOME (LOSS) BEFORE FINANCIAL INCOME (EXPENSES) AND TAXES	473,778	352,294	338,187
Financial result, net	(117,270)	(74,301)	(96,822)
INCOME (LOSS) BEFORE TAXES	356,508	277,993	241,365
Income and social contribution taxes	(86,667)	(123,552)	(107,124)
Net income (loss)	269,841	154,441	134,241
Depreciation/amortization	88,537	155,038	182,672
Investments in associates and jointly-controlled entities	701,233	584,898	404,522
Total assets	4,421,487	5,208,265	5,582,926
Total liabilities	1,053,007	1,711,963	1,651,590
Operating Segments \| Special Steel
Segment reporting as per business segments
Net sales	8,158,626	6,228,543	6,884,733
Cost of sales	(7,064,608)	(5,301,172)	(6,238,749)
GROSS PROFIT	1,094,018	927,371	645,984
Selling, general and administrative expenses	(186,037)	(166,656)	(284,962)
Other operating income (expenses)	10,081	14,989	14,166
Equity in earnings of unconsolidated companies	15,629	15,460
INCOME (LOSS) BEFORE FINANCIAL INCOME (EXPENSES) AND TAXES	933,691	791,164	375,188
Financial result, net	(112,109)	(122,837)	(148,313)
INCOME (LOSS) BEFORE TAXES	821,582	668,327	226,875
Income and social contribution taxes	(191,386)	(192,902)	(64,348)
Net income (loss)	630,196	475,425	162,527
Depreciation/amortization	340,297	344,059	526,136
Investments in associates and jointly-controlled entities	213,899	199,647
Total assets	8,825,830	8,834,041	11,970,202
Total liabilities	1,736,085	2,753,091	6,519,255
Eliminations and Adjustments
Segment reporting as per business segments
Net sales	(1,472,909)	(1,332,767)	(1,074,340)
Cost of sales	1,494,727	1,331,544	1,073,906
GROSS PROFIT	21,818	(1,223)	(434)
Selling, general and administrative expenses	(168,438)	(176,081)	(244,302)
Other operating income (expenses)	(18,952)	47,882	43,951
Results in operations with subsidiaries and associate company	(414,507)	(721,682)	(58,223)
Reversal of provision for tax liabilities, net		929,711
Equity in earnings of unconsolidated companies	22,436	19,970	17,780
INCOME (LOSS) BEFORE FINANCIAL INCOME (EXPENSES) AND TAXES	(557,643)	98,577	(241,228)
Financial result, net	(1,180,099)	(335,629)	(33,093)
INCOME (LOSS) BEFORE TAXES	(1,737,742)	(237,052)	(274,321)
Income and social contribution taxes	1,082,552	(77,481)	(279,800)
Net income (loss)	(655,190)	(314,533)	(554,121)
Investments in associates and jointly-controlled entities	148,149	149,674	90,796
Total assets	5,900,747	4,335,438	1,949,459
Total liabilities	9,545,776	9,034,272	8,020,494
Eliminations and Adjustments \| Brazil
Segment reporting as per business segments
Net sales	(1,280,770)	(1,216,526)	(885,050)
Eliminations and Adjustments \| North America
Segment reporting as per business segments
Net sales	(84,335)	(59,478)	(90,267)
Eliminations and Adjustments \| South America
Segment reporting as per business segments
Net sales	(4,988)	(6,490)	(6,386)
Eliminations and Adjustments \| Special Steel
Segment reporting as per business segments
Net sales	R$ 102816	R$ 50273	R$ 92637

SEGMENT REPORTING - Revenues by

SEGMENT REPORTING - Revenues by Geographical Region (Details) - BRL (R$) R$ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Segment reporting as per geographical areas
Net sales	R$ 46159478	R$ 36917619	R$ 37651667
Total assets	51,281,029	50,301,761	54,635,141
Brazil
Segment reporting as per geographical areas
Net sales	17,284,473	13,450,378	12,229,582
Total assets	26,283,287	23,872,075	24,266,983
Latin America
Segment reporting as per geographical areas
Net sales	4,785,281	4,769,526	5,828,564
Total assets	5,251,637	6,009,394	6,159,387
North America
Segment reporting as per geographical areas
Net sales	23,524,381	18,142,218	17,917,485
Total assets	19,746,105	19,629,950	23,463,447
Europe/Asia
Segment reporting as per geographical areas
Net sales	R$ 565343	555,497	1,676,036
Total assets		R$ 790342	R$ 745324

INSURANCE (Details)

INSURANCE (Details) - BRL (R$) R$ in Thousands	Dec. 31, 2018	Dec. 31, 2017
Equity
INSURANCE
Amount of assets or liabilities covered under insurance contracts	R$ 64676890	R$ 57062113
Business Interruption
INSURANCE
Amount of assets or liabilities covered under insurance contracts	6,610,851	6,464,512
Civil Liability
INSURANCE
Amount of assets or liabilities covered under insurance contracts	R$ 627718	R$ 535896

IMPAIRMENT OF ASSETS (Details)

IMPAIRMENT OF ASSETS (Details) R$ in Thousands	3 Months Ended		12 Months Ended
IMPAIRMENT OF ASSETS (Details) R$ in Thousands	Sep. 30, 2018	Dec. 31, 2017BRL (R$)	Dec. 31, 2018BRL (R$)segment	Dec. 31, 2017BRL (R$)	Dec. 31, 2016BRL (R$)
Impairment of assets
Total impairment of non-financial assets				R$ 1114807	R$ 2917911
Impairment of property, plant and equipment		R$ 265369	R$ 0	265,369
Impairment of goodwill			R$ 0	R$ 849438	R$ 2678582
Number of operating segments \| segment			4
Period for projecting the cash flows for the goodwill impairment test	P5Y
Discount rate
Impairment of assets
Sensitivity analysis, percent of increase		0.50%	0.50%	0.50%
Perpetuity growth rate
Impairment of assets
Sensitivity analysis, percent of decrease		0.50%	0.50%	0.50%
North America
Impairment of assets
Impairment of property, plant and equipment		R$ 220090
Impairment of goodwill		R$ 849438
Perpetuity growth rate		3.00%	3.00%	3.00%
Pre-tax discount rate		13.60%	13.80%	13.60%
Amount by which unit's recoverable amount is (below) exceeds its carrying value		R$ 849000	R$ 2157	R$ 849000
North America \| Discount rate
Impairment of assets
Sensitivity analysis, amount above (below) book value		(506,000)	1,474,000	(506,000)
North America \| Perpetuity growth rate
Impairment of assets
Sensitivity analysis, amount above (below) book value		R$ 310000	R$ 1672000	R$ 310000
South America
Impairment of assets
Perpetuity growth rate		3.00%	3.00%	3.00%
Pre-tax discount rate		14.70%	17.10%	14.70%
Amount by which unit's recoverable amount is (below) exceeds its carrying value		R$ 437000	R$ 730000	R$ 437000
South America \| Discount rate
Impairment of assets
Sensitivity analysis, amount above (below) book value		265,000	593,000	265,000
South America \| Perpetuity growth rate
Impairment of assets
Sensitivity analysis, amount above (below) book value		318,000	R$ 640000	R$ 318000
Brazil
Impairment of assets
Impairment of property, plant and equipment		R$ 45279
Perpetuity growth rate		3.00%	3.00%	3.00%
Pre-tax discount rate		15.20%	16.40%	15.20%
Amount by which unit's recoverable amount is (below) exceeds its carrying value		R$ 1747000	R$ 3924000	R$ 1747000
Brazil \| Discount rate
Impairment of assets
Sensitivity analysis, amount above (below) book value		999,000	3,048,000	999,000
Brazil \| Perpetuity growth rate
Impairment of assets
Sensitivity analysis, amount above (below) book value		R$ 1254000	R$ 3318000	R$ 1254000
Special Steel
Impairment of assets
Perpetuity growth rate		3.00%	3.00%	3.00%
Pre-tax discount rate		13.10%	14.70%	13.10%
Amount by which unit's recoverable amount is (below) exceeds its carrying value		R$ 3989000	R$ 3019000	R$ 3989000
Special Steel \| Discount rate
Impairment of assets
Sensitivity analysis, amount above (below) book value		3,422,000	2,483,000	3,422,000
Special Steel \| Perpetuity growth rate
Impairment of assets
Sensitivity analysis, amount above (below) book value		R$ 3596000	R$ 2645000	R$ 3596000

EXPENSES BY NATURE - Classified

EXPENSES BY NATURE - Classified by nature (Details) - BRL (R$) R$ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
EXPENSES BY NATURE
Depreciation and amortisation	R$ 1891814	R$ 2092551	R$ 2535955
Labor expenses	(5,724,352)	(5,514,721)	(6,508,834)
Raw material and consumption material	(29,623,418)	(23,423,950)	(22,863,693)
Freight	(2,770,516)	(2,281,773)	(2,279,459)
Impairment of assets		(1,114,807)	(2,917,911)
Gains and losses on assets held for sale and sales of interest in subsidiaries	(414,507)	(721,682)	(58,223)
Reversal of provision for tax liabilities, net		929,711
Other expenses/income, net	(1,697,786)	(1,563,177)	(2,111,181)
Total Expenses	R$ 42122393	R$ 35782950	R$ 39275256

EXPENSES BY NATURE - Classifi_2

EXPENSES BY NATURE - Classified by function (Details) - BRL (R$) R$ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
EXPENSES BY NATURE
Cost of sales	R$ 40010100	R$ 33312995	R$ 34187941
Selling expenses	(570,431)	(524,965)	(710,766)
Allowance for doubtful accounts	(9,914)
General and administrative expenses	(1,082,449)	(1,129,943)	(1,528,262)
Other operating income	235,421	260,618	242,077
Other operating expenses	(270,413)	(168,887)	(114,230)
Impairment of assets		(1,114,807)	(2,917,911)
Gains and losses on assets held for sale and sales of interest in subsidiaries	(414,507)	(721,682)	(58,223)
Reversal of provision for tax liabilities, net		929,711
Total Expenses	R$ 42122393	R$ 35782950	R$ 39275256

FINANCIAL INCOME (Details)

FINANCIAL INCOME (Details) - BRL (R$) R$ in Thousands	12 Months Ended
FINANCIAL INCOME (Details) - BRL (R$) R$ in Thousands	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
FINANCIAL INCOME
Income from short-term investments	R$ 68721	R$ 85153	R$ 142965
Interest income and other financial income	135,279	141,462	109,080
Financial Income	204,000	226,615	252,045
Interest on debt	(1,177,686)	(1,323,448)	(1,540,797)
Monetary variation and other financial expenses	(401,655)	(402,836)	(469,208)
Financial expenses	(1,579,341)	(1,726,284)	(2,010,005)
Bonds repurchases	(223,925)
Exchange Variation, net	(322,621)	(4,057)	851,635
Reversal of monetary update of contingent liabilities, net		369,819
Gains and losses on financial instruments, net	32,092	(9,441)	(38,930)
Financial result, net	R$ 1889795	R$ 1143348	R$ 945255