Document and Entity Information
Document and Entity Information | 12 Months Ended |
Dec. 31, 2021shares | |
Document and Entity Information | |
Entity Registrant Name | GERDAU S.A. |
Document Type | 20-F |
Document Registration Statement | false |
Document Annual Report | true |
Current Fiscal Year End Date | --12-31 |
Document Period End Date | Dec. 31, 2021 |
Document Transition Report | false |
Document Shell Company Report | false |
Entity File Number | 1-14878 |
Entity Incorporation, State or Country Code | D5 |
Entity Address, Address Line One | Av. Dra. Ruth Cardoso |
Entity Address, Address Line Two | 8,501 – 8° floor |
Entity Address, City or Town | São Paulo |
Entity Address, Country | BR |
Entity Address, Postal Zip Code | 05425-070 |
Security Exchange Name | NYSE |
Entity Common Stock, Shares Outstanding | 573,627,483 |
Entity Well-known Seasoned Issuer | Yes |
Entity Voluntary Filers | No |
Entity Current Reporting Status | Yes |
Entity Interactive Data Current | Yes |
Entity Filer Category | Large Accelerated Filer |
Entity Emerging Growth Company | false |
ICFR Auditor Attestation Flag | true |
Document Accounting Standard | International Financial Reporting Standards |
Entity Shell Company | false |
Entity Central Index Key | 0001073404 |
Document Fiscal Year Focus | 2021 |
Document Fiscal Period Focus | FY |
Amendment Flag | false |
Auditor Name | KPMG Auditores Independentes Ltda |
Auditor Firm ID | 1124 |
Auditor Location | Porto Alegre, Brazil |
American Depositary Shares | |
Document and Entity Information | |
Title of 12(b) Security | AmericanDepositary Shares |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - BRL (R$) R$ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
CURRENT ASSETS | ||
Cash and cash equivalents | R$ 4160654 | R$ 4617204 |
Short-term investments | 2,626,212 | 3,041,143 |
Trade accounts receivable - net | 5,414,075 | 3,737,270 |
Inventories | 16,861,488 | 9,169,417 |
Tax credits | 2,083,885 | 1,201,312 |
Income and social contribution taxes recoverable | 804,053 | 1,051,584 |
Dividends receivable | 7,671 | 0 |
Fair value of derivatives | 3,246 | 0 |
Other current assets | 679,193 | 591,523 |
TOTAL CURRENT ASSETS | 32,640,477 | 23,409,453 |
NON-CURRENT ASSETS | ||
Tax credits | 124,600 | 664,045 |
Deferred income taxes | 2,929,308 | 3,393,354 |
Related parties | 2,678 | 134,354 |
Judicial deposits | 1,659,379 | 1,825,791 |
Other non-current assets | 571,637 | 590,864 |
Prepaid pension cost | 4,942 | 39,196 |
Investments in associates and joint ventures | 3,340,775 | 2,271,629 |
Goodwill | 12,427,527 | 12,103,519 |
Leasing | 861,744 | 815,311 |
Other intangibles | 509,760 | 622,578 |
Property, plant and equipment, net | 18,741,786 | 17,252,915 |
TOTAL NON-CURRENT ASSETS | 41,174,136 | 39,713,556 |
TOTAL ASSETS | 73,814,613 | 63,123,009 |
CURRENT LIABILITIES | ||
Trade accounts payable | 8,017,140 | 5,437,953 |
Short-term debt | 234,537 | 1,424,043 |
Debentures | 1,531,956 | 7,463 |
Taxes payable | 548,173 | 600,089 |
Income and social contribution taxes payable | 863,136 | 810,125 |
Payroll and related liabilities | 1,199,143 | 591,653 |
Dividends payable | 0 | 510,348 |
Leasing payable | 275,086 | 231,703 |
Employee benefits | 39 | 208 |
Environmental liabilities | 231,711 | 125,992 |
Fair value of derivatives | 0 | 971 |
Obligations with FIDC | 45,497 | 944,513 |
Other current liabilities | 1,090,396 | 797,082 |
TOTAL CURRENT LIABILITIES | 14,036,814 | 11,482,143 |
NON-CURRENT LIABILITIES | ||
Long-term debt | 10,875,249 | 13,188,891 |
Debentures | 1,397,951 | 2,894,954 |
Related parties | 24,648 | 22,855 |
Deferred income taxes | 98,975 | 61,562 |
Provision for tax, civil and labor liabilities | 1,741,026 | 1,172,511 |
Environmental liabilities | 343,998 | 171,102 |
Employee benefits | 1,415,151 | 1,861,231 |
Obligations with FIDC | 0 | 42,893 |
Leasing payable | 643,279 | 624,771 |
Other non-current liabilities | 421,873 | 514,886 |
TOTAL NON-CURRENT LIABILITIES | 16,962,150 | 20,555,656 |
EQUITY | ||
Capital | 19,249,181 | 19,249,181 |
Treasury stocks | (152,409) | (229,309) |
Capital reserves | 11,597 | 11,597 |
Retained earnings | 17,838,494 | 7,292,332 |
Transactions with non-controlling interests without change of control | (2,870,825) | (2,870,825) |
Other reserves | 8,528,244 | 7,407,295 |
EQUITY ATTRIBUTABLE TO THE EQUITY HOLDERS OF THE PARENT | 42,604,282 | 30,860,271 |
NON-CONTROLLING INTERESTS | 211,367 | 224,939 |
EQUITY | 42,815,649 | 31,085,210 |
TOTAL LIABILITIES AND EQUITY | R$ 73814613 | R$ 63123009 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - BRL (R$) R$ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
CONSOLIDATED STATEMENTS OF INCOME | |||
NET SALES | R$ 78345081 | R$ 43814661 | R$ 39644010 |
Cost of sales | (57,527,721) | (37,884,102) | (35,440,726) |
GROSS PROFIT | 20,817,360 | 5,930,559 | 4,203,284 |
Selling expenses | (715,830) | (512,950) | (476,339) |
General and administrative expenses | (1,390,121) | (1,017,435) | (954,117) |
Other operating income | 979,760 | 1,763,684 | 636,847 |
Other operating expenses | (460,029) | (645,985) | (187,647) |
Eletrobras compulsory loan recovery | 1,391,280 | 0 | 0 |
Results in operations with subsidiary and joint ventures | (162,913) | 0 | 0 |
Impairment of financial assets | 357 | (64,132) | (21,044) |
Impairment of non-financial assets | 0 | (411,925) | 0 |
Equity in earnings of unconsolidated companies | 563,158 | 152,569 | (17,050) |
INCOME BEFORE FINANCIAL INCOME (EXPENSES) AND TAXES | 21,023,022 | 5,194,385 | 3,183,934 |
Financial income | 249,024 | 194,092 | 223,213 |
Financial expenses | (1,433,087) | (1,448,461) | (1,469,754) |
Bonds repurchase expenses | (264,687) | (239,273) | 0 |
Tax credits monetary update | 788,741 | 0 | 0 |
Exchange variations, net | (108,373) | (204,291) | (247,555) |
Gains and losses on derivative financial instruments, net | 17,928 | (774) | (15,118) |
INCOME BEFORE TAXES | 20,272,568 | 3,495,678 | 1,674,720 |
Current | (4,306,223) | (908,051) | (240,400) |
Deferred | (407,407) | (199,573) | (217,433) |
Income and social contribution taxes | (4,713,630) | (1,107,624) | (457,833) |
NET INCOME | 15,558,938 | 2,388,054 | 1,216,887 |
ATTRIBUTABLE TO: | |||
Owners of the parent | 15,494,111 | 2,365,763 | 1,203,736 |
Non-controlling interests | 64,827 | 22,291 | 13,151 |
NET INCOME | R$ 15558938 | R$ 2388054 | R$ 1216887 |
EARNINGS PER SHARE | |||
Basic earnings per share - preferred and common - (R$) | R$ 9.09 | R$ 1.39 | R$ 0.71 |
Diluted earnings per share - preferred and common - (R$) | R$ 9.04 | R$ 1.38 | R$ 0.70 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - BRL (R$) R$ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | |||
Net income for the year | R$ 15558938 | R$ 2388054 | R$ 1216887 |
Items that may be reclassified subsequently to profit or loss | |||
Other comprehensive income from associates and joint ventures | 225,507 | 358,816 | 55,038 |
Cumulative translation adjustment | 1,275,767 | 4,466,084 | 682,451 |
Recycling of cumulative translation adjustment to net income | 193,334 | 0 | 0 |
Unrealized Losses on net investment hedge | (695,102) | (2,504,914) | (322,948) |
Cash flow hedges | |||
Unrealized Gains (Losses) on Financial Instruments, net of tax | 1,907 | (1,972) | 3,502 |
Total items that may be reclassified subsequently to profit or loss | 1,001,413 | 2,318,014 | 418,043 |
Items that will not be reclassified subsequently to profit or loss | |||
Remeasurement of defined benefit pension plan, net of tax | 252,532 | (52,072) | (45,561) |
Total items that will not be reclassified subsequently to profit or loss | 252,532 | (52,072) | (45,561) |
Other comprehensive income, net of tax | 1,253,945 | 2,265,942 | 372,482 |
Total comprehensive income for the year, net of tax | 16,812,883 | 4,653,996 | 1,589,369 |
Total comprehensive income attributable to: | |||
Owners of the parent | 16,753,253 | 4,594,099 | 1,565,581 |
Non-controlling interests | 59,630 | 59,897 | 23,788 |
Total comprehensive income for the year, net of tax | R$ 16812883 | R$ 4653996 | R$ 1589369 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY - BRL (R$) R$ in Thousands | 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 instruments | Cumulative translation adjustment | Pension Plan | Stock Options | Non-controlling interests. | Total |
Balance at beginning of year 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$ 15564 | R$ 11035964 | R$ 320303 | R$ 159149 | R$ 207967 | R$ 25938571 |
Net income (loss) | 1,203,736 | 0 | 0 | 0 | 0 | 0 | 0 | 1,203,736 | 0 | 0 | 0 | 0 | 0 | 0 | 13,151 | 1,216,887 |
Other comprehensive income (loss) recognized in the year | 361,845 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | (322,942) | 3,502 | 726,845 | (45,560) | 0 | 10,637 | 372,482 |
Total comprehensive income (loss) recognized in the year | 1,565,581 | 0 | 0 | 0 | 0 | 0 | 0 | 1,203,736 | 0 | (322,942) | 3,502 | 726,845 | (45,560) | 0 | 23,788 | 1,589,369 |
Stock option expenses recognized in the year | (13,249) | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | (13,249) | 879 | (12,370) |
Stock option exercised during the year | 29,405 | 0 | 37,884 | 0 | 0 | 0 | (8,479) | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 6 | 29,411 |
Effect of interest changes in subsidiaries | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | (1,586) | (1,586) |
Complementary Dividends | (101) | 0 | 0 | 0 | 0 | 0 | (101) | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | (101) |
Destination of net income proposed to the shareholders | ||||||||||||||||
Legal reserve | 0 | 0 | 0 | 0 | 55,876 | 0 | 0 | (55,876) | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Tax incentives reserve | 0 | 0 | 0 | 0 | 0 | 86,216 | 0 | (86,216) | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Investments and working capital reserve | 0 | 0 | 0 | 0 | 0 | 0 | 705,105 | (705,105) | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Dividends/interest on capital | (356,539) | 0 | 0 | 0 | 0 | 0 | 0 | (356,539) | 0 | 0 | 0 | 0 | 0 | 0 | (13,628) | (370,167) |
Balance at end of year at Dec. 31, 2019 | 26,955,701 | 19,249,181 | (242,542) | 11,597 | 799,297 | 714,798 | 4,130,611 | 0 | (2,870,825) | (6,367,200) | (12,062) | 11,762,809 | (365,863) | 145,900 | 217,426 | 27,173,127 |
Net income (loss) | 2,365,763 | 0 | 0 | 0 | 0 | 0 | 0 | 2,365,763 | 0 | 0 | 0 | 0 | 0 | 0 | 22,291 | 2,388,054 |
Other comprehensive income (loss) recognized in the year | 2,228,336 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | (2,504,914) | (1,972) | 4,787,263 | (52,041) | 0 | 37,606 | 2,265,942 |
Total comprehensive income (loss) recognized in the year | 4,594,099 | 0 | 0 | 0 | 0 | 0 | 0 | 2,365,763 | 0 | (2,504,914) | (1,972) | 4,787,263 | (52,041) | 0 | 59,897 | 4,653,996 |
Stock option expenses recognized in the year | 15,375 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 15,375 | 15 | 15,390 |
Stock option exercised during the year | 9,596 | 0 | 13,233 | 0 | 0 | 0 | (3,637) | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 9,596 |
Effect of interest changes in subsidiaries | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 12,776 | 12,776 |
Complementary Dividends | (13) | 0 | 0 | 0 | 0 | 0 | (13) | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | (13) |
Destination of net income proposed to the shareholders | ||||||||||||||||
Legal reserve | 0 | 0 | 0 | 0 | 109,649 | 0 | 0 | (109,649) | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Tax incentives reserve | 0 | 0 | 0 | 0 | 0 | 172,792 | 0 | (172,792) | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Investments and working capital reserve | 0 | 0 | 0 | 0 | 0 | 0 | 1,368,835 | (1,368,835) | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Dividends/interest on capital | (714,487) | 0 | 0 | 0 | 0 | 0 | 0 | (714,487) | 0 | 0 | 0 | 0 | 0 | 0 | (65,175) | (779,662) |
Balance at end of year at Dec. 31, 2020 | 30,860,271 | 19,249,181 | (229,309) | 11,597 | 908,946 | 887,590 | 5,495,796 | 0 | (2,870,825) | (8,872,114) | (14,034) | 16,550,072 | (417,904) | 161,275 | 224,939 | 31,085,210 |
Net income (loss) | 15,494,111 | 0 | 0 | 0 | 0 | 0 | 0 | 15,494,111 | 0 | 0 | 0 | 0 | 0 | 0 | 64,827 | 15,558,938 |
Other comprehensive income (loss) recognized in the year | 1,259,142 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | (695,102) | 1,907 | 1,699,980 | 252,357 | 0 | (5,197) | 1,253,945 |
Total comprehensive income (loss) recognized in the year | 16,753,253 | 0 | 0 | 0 | 0 | 0 | 0 | 15,494,111 | 0 | (695,102) | 1,907 | 1,699,980 | 252,357 | 0 | 59,630 | 16,812,883 |
Stock option expenses recognized in the year | (138,193) | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | (138,193) | (59) | (138,252) |
Stock option exercised during the year | 143,929 | 0 | 76,900 | 0 | 0 | 0 | 67,029 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 53 | 143,982 |
Effect of interest changes in subsidiaries | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | (18,962) | (18,962) |
Complementary Dividends | (528) | 0 | 0 | 0 | 0 | 0 | (528) | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | (528) |
Destination of net income proposed to the shareholders | ||||||||||||||||
Legal reserve | 0 | 0 | 0 | 0 | 756,334 | 0 | 0 | (756,334) | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Tax incentives reserve | 0 | 0 | 0 | 0 | 0 | 367,430 | 0 | (367,430) | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Investments and working capital reserve | 0 | 0 | 0 | 0 | 0 | 0 | 9,014,747 | (9,014,747) | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Dividend - adjustment in excess of the minimum estatutory undistributed | 0 | 0 | 0 | 0 | 0 | 0 | 341,150 | (341,150) | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Dividends/interest on capital | (5,014,450) | 0 | 0 | 0 | 0 | 0 | 0 | (5,014,450) | 0 | 0 | 0 | 0 | 0 | 0 | (54,234) | (5,068,684) |
Balance at end of year at Dec. 31, 2021 | R$ 42604282 | R$ 19249181 | R$ 152409 | R$ 11597 | R$ 1665280 | R$ 1255020 | R$ 14918194 | R$ 0 | R$ 2870825 | R$ 9567216 | R$ 12127 | R$ 18250052 | R$ 165547 | R$ 23082 | R$ 211367 | R$ 42815649 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - BRL (R$) R$ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Cash flows from operating activities | |||
Net income for the year | R$ 15558938 | R$ 2388054 | R$ 1216887 |
Adjustments to reconcile net income for the year to net cash provided by operating activities | |||
Depreciation and amortization | 2,658,561 | 2,499,104 | 2,074,295 |
Impairment of assets | 0 | 411,925 | 0 |
Equity in earnings of unconsolidated companies | (563,158) | (152,569) | 17,050 |
Exchange variation, net | 108,373 | 204,291 | 247,555 |
Gains and losses on derivative financial instruments, net | (17,928) | 774 | 15,118 |
Post-employment benefits | 255,477 | 203,689 | 165,487 |
Long-term incentive plans | 65,289 | 62,801 | 43,895 |
Income tax | 4,713,630 | 1,107,624 | 457,833 |
(Gains) Losses on disposal of property, plant and equipment | (77,417) | (18,482) | 2,129 |
Results in operations with subsidiary and joint ventures | 162,913 | 0 | 0 |
Impairment of financial assets | (357) | 64,132 | 21,044 |
Provision (reversal) of tax, civil, labor and environmental liabilities, net | 125,641 | 477,518 | 38,417 |
Tax credits recovery | (1,182,082) | (1,358,744) | (402,499) |
Interest income on short-term investments | (170,671) | (99,359) | (72,784) |
Interest expense on loans | 1,059,841 | 1,022,460 | 938,120 |
Interest on loans with related parties | (6,089) | (8,277) | (4,767) |
(Reversal) Provision for net realisable value adjustment in inventory | (2,812) | (40,697) | 24,665 |
Cash flows from operations before changes in working capital | 22,688,149 | 6,764,244 | 4,782,445 |
Changes in assets and liabilities | |||
(Increase) Decrease in trade accounts receivable | (1,614,047) | (527,722) | 656,831 |
(Increase) Decrease in inventories | (7,704,329) | (428,263) | 1,556,713 |
Increase (Decrease) in trade accounts payable | 2,534,329 | 1,014,800 | (642,699) |
Decrease in other receivables | 290,658 | 369,076 | 146,825 |
(Decrease) Increase in other payables | (317,658) | 182,934 | (462,906) |
Dividends from joint ventures | 117,438 | 94,937 | 44,037 |
Purchases of short-term investments | (3,010,084) | (3,224,158) | (3,676,744) |
Proceeds from maturities and sales of short-term investments | 3,595,212 | 3,924,799 | 521,616 |
Cash provided by operating activities | 16,579,668 | 8,170,647 | 2,926,118 |
Interest paid on loans and financing | (1,100,826) | (1,079,981) | (945,027) |
Interest paid on lease liabilities | (68,789) | (61,727) | (83,620) |
Income and social contribution taxes paid | (2,893,120) | (621,033) | (254,679) |
Net cash provided by operating activities | 12,516,933 | 6,407,906 | 1,642,792 |
Cash flows from investing activities | |||
Purchases of property, plant and equipment | (3,026,023) | (1,650,778) | (1,746,600) |
Proceeds from sales of property, plant and equipment, investments and other intangibles | 82,635 | 61,275 | 21,805 |
Additions in other intangibles | (166,310) | (154,250) | (100,313) |
Advance for future investment in joint venture | 0 | 0 | (94,687) |
Capital decrease (increase) in joint venture | 113,595 | (42,782) | 20,344 |
Payment for business combination | 0 | (442,542) | 0 |
Net cash used by investing activities | (2,996,103) | (2,229,077) | (1,899,451) |
Cash flows from financing activities | |||
Dividends and interest on capital paid | (5,339,426) | (274,815) | (484,173) |
Proceeds from loans and financing | 609,703 | 3,120,745 | 5,585,573 |
Repayment of loans and financing | (5,116,621) | (5,084,028) | (4,885,083) |
Leasing payment | (275,854) | (247,914) | (161,824) |
Intercompany loans, net | 139,556 | (7,777) | (64,089) |
Net cash used in financing activities | (9,982,642) | (2,493,789) | (9,596) |
Exchange variation on cash and cash equivalents | 5,262 | 290,512 | 17,763 |
(Decrease) Increase in cash and cash equivalents | (456,550) | 1,975,552 | (248,492) |
Cash and cash equivalents at beginning of year | 4,617,204 | 2,641,652 | 2,890,144 |
Cash and cash equivalents at end of year | R$ 4160654 | R$ 4617204 | R$ 2641652 |
GENERAL INFORMATION
GENERAL INFORMATION | 12 Months Ended |
Dec. 31, 2021 | |
GENERAL INFORMATION | |
GENERAL INFORMATION | NOTE 1 — GENERAL INFORMATION Gerdau S.A. is a publicly traded corporation (sociedade anônima) The Consolidated Financial Statements of Gerdau S.A and subsidiaries were approved by the Board of Directors on March 30, 2022. |
CONSOLIDATED FINANCIAL STATEMEN
CONSOLIDATED FINANCIAL STATEMENTS | 12 Months Ended |
Dec. 31, 2021 | |
CONSOLIDATED FINANCIAL STATEMENTS | |
CONSOLIDATED FINANCIAL STATEMENTS | NOTE 3 — CONSOLIDATED FINANCIAL STATEMENTS 3.1 — Subsidiaries Listed below are the significant consolidated subsidiaries: Equity Interests Consolidated company Country Total capital (*) 2021 2020 2019 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. Brazil 99.86 99.86 99.83 Gerdau Aços Longos S.A. and subsidiaries (2) Brazil 99.83 99.82 99.82 Gerdau Steel Inc. Canada 100.00 100.00 100.00 Gerdau Holdings Inc. and subsidiary (3) USA 100.00 100.00 100.00 Paraopeba - Fixed-income investment fund (4) (**) Brazil 70.62 89.26 96.96 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 Gerdau GTL México, S.A. de C.V. and subsidiary (5) Mexico 100.00 100.00 100.00 Seiva S.A. - Florestas e Indústrias Brazil 97.73 97.73 97.73 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 (6) Argentina 99.98 99.98 99.98 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 Next S.A. and subsidiaries (7) Brazil 100.00 — — (*) The voting capital is substantially equal to the total capital. The interests reported represent the ownership percentage held directly and indirectly in the subsidiary. (**) The percentage of participation including interest of the parent company Metalúrgica Gerdau S.A. in the investment fund is 73.54% in 2021, 92.58% in 2020 and 98.07% in 2019 . (1) Subsidiaries: Gerdau Ameristeel US Inc., Chaparral Steel Company. (2) Subsidiaries: Gerdau Açominas Overseas Ltd. and Siderúrgica Latino-Americana S.A. (3) Subsidiary: Gerdau MacSteel Inc. (4) Fixed-income investment fund managed by Bank JP Morgan S.A. (5) Subsidiary: GTL Servicios Administrativos México, S.A. de C.V. (6) Subsidiary: Siderco S.A. (7) Subsidiaries: G2L Logística Ltda, G2base Fundações e Contenções Ltda and Gerdau Grafeno Ltda. In March 2022, the Company sold 100% of its interest in the subsidiary Sizuca - Siderúrgica Zuliana C.A., located in Venezuela. 3.2 — Joint ventures Listed below are the interests in joint ventures: Equity Interests Total capital (*) Joint ventures Country 2021 2020 2019 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 75.00 70.00 70.00 Gerdau Metaldom Corp. Dominican Rep. 50.00 50.00 50.00 Gerdau Summit Aços Fundidos e Forjados S.A. Brazil 58.73 58.73 58.73 Diaco S.A. Colombia 49.87 49.87 49.87 Juntos Somos Mais Fidelização S.A. Brazil 27.50 27.50 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. As a result of the corporate reorganization described in Note 3.4, the Company increased its interest in Gerdau Corsa from 70% to 75%, maintaining joint control of this company together with Grupo Córdova. The amount of the additional interest in Gerdau Corsa was R$ 511,514 and it was recorded in the investment account, as described in Note 9. The summarized financial information of these joint ventures, accounted for under the equity method, is shown on a combined basis as follows: Joint ventures 2021 2020 2019 Net income (loss) 959,116 249,158 (21,548) Total comprehensive income (loss) 959,116 249,158 (21,548) During the year of 2019, the Company made a capital increase in the company Gerdau Corsa S.A.P.I. of C.V. in the amount of R$ 463,990, which resulted in the change of the participation held by the Company in this company to 70.0%, maintaining joint control, according to the shareholders' agreement. 3.3 — Associate companies Listed below are the interests in associate companies: Equity interests Total capital (*) Associate company Country 2021 2020 2019 Dona Francisca Energética S.A. Brazil 51.82 51.82 51.82 (*) 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 company 2021 2020 2019 Net income 37,231 42,008 31,249 Total comprehensive income 37,231 42,008 31,249 During the year of 2019 the associate company Corsa Controladora, S.A. de C.V. was merged into the joint venture Gerdau Corsa S.A.P.I. de C.V. 3.4 — Results in operations with subsidiary and joint ventures On November 30, 2021, the Company, together with Grupo Córdova (comprised of Corcre, S.A.P.I. de C.V. and Juan Angel Córdova Creel), concluded the stages of the corporate reorganization of operations in Mexico involving its subsidiary Sidertúl, S.A. de C.V. ( Sidertúl) and the joint venture Gerdau Corsa, S.A.P.I. de C.V. (Gerdau Corsa) and its subsidiary Aceros Corsa, S.A. de C.V. (Aceros Corsa). The corporate reorganization was approved by the shareholders of the companies involved, as well as by the Comisión Federal de Competencia Económica – COFECE and took effect as of December 1, 2021. The corporate reorganization of the companies Sidertúl and Aceros Corsa by Gerdau Corsa is part of the process of reorganization and simplification of the corporate structure in Mexico, with the objective of: (i) strengthening the financial structure of Gerdau Corsa, with the reduction of leverage and financial expenses; (ii) centralizing the main business activities, generating greater operational efficiency for the companies involved; and (iii) optimizing internal processes, creating synergy in activities and economies of scale by reducing administrative, operational and tax costs. Additionally, the corporate reorganization reinforces the Company's commitment to its operations in Mexico. As a result of the corporate reorganization, the Company increased its interest in Gerdau Corsa from 70% to 75%, maintaining joint control of this company with Grupo Córdova. As a result of this corporate reorganization of operations in Mexico, the Company recognized a gain of R$ 193,651, which is calculated as the difference between the carrying amount and the fair value of Sidertúl and R$ 193,334 for the recycling to income of the cumulative translation adjustments, which is required as the Company lost Sidertúl control, as presented in the statement of comprehensive income. The corporate reorganization resulted in the loss of control of Sidertúl and as required by IFRS, the Company carried out a proportional write-off of goodwill from the North America segment in the amount of R$ 549,898, as described in Note 11, measured on the basis of the relative values of the operation disposed of and the portion of the cash-generating unit retained. The net result of this corporate reorganization was an expense of R$ 162,913 recognized in the line of Results in operations with subsidiary and joint ventures. 3.5 — Acquisition of subsidiary On November 30, 2020, the Company, through its subsidiary Gerdau Aços Longos SA, concluded, after complying with the respective precedent conditions, including the approval of the Administrative Council for Economic Defense - CADE, the acquisition of 96.35% of the total and voting shares issued by Siderúrgica Latino-Americana S.A. (“Silat”) for R$ 475,961, using cash resources. Silat is in Caucaia, in the metropolitan region of Fortaleza, State of Ceará and has an annual installed capacity of 600 thousand tons of long steel rolled. Through this transaction, Gerdau reinforces its long-term strategy and its position in the steel value chain through investments and acquisitions. The addition of this new unit helps the Company in the supply equation for the Brazilian market as a whole, as it is associated with our other capacities in the Northeast and Southeast regions. The Company concluded the fair value assessment of the assets and liabilities of Silat and the following table summarizes the fair value of such assets and liabilities at the date of business combination: Book Value Acquisition Adjustments Fair value upon acquisition Cash and cash equivalents 33,419 — 33,419 Trade accounts receivable - net 13,190 — 13,190 Inventories 24,160 — 24,160 Other current assets 11,091 — 11,091 Property, plant and equipment 233,541 253,216 486,757 Other non-current assets 34,410 — 34,410 Current liabilities (26,638) — (26,638) Non-current liabilities (359) (86,093) (86,452) Non-controlling interest (5,395) (6,100) (11,495) Assets (Liabilities) 317,419 161,023 478,442 Negative Goodwill — (2,481) (2,481) Net assets 317,419 158,542 475,961 Amounts related to net sales and accounts receivables, attributed to Silat and included in the Company’s Consolidated Financial Statements since the acquisition date are not material. Silat, since the acquisition date until December 31, 2020, did not generate significant amounts of net sales and net income. In addition, the amount of net sales and net profit generated by this entity during the period ended December 31, 2020, had it been acquired at the beginning of that period, would not have been material. The negative goodwill of R$2,481 was recorded in the Other operating income line in the Statements of Income. 3.6 - Total purchase price considered for the 2020 acquisition Subsidiary acquired 2020 Siderúrgica Latino-Americana S.A. 475,961 Total consideration paid 475,961 Less: Cash and cash equivalents of acquired subsidiary (33,419) 442,542 |
CASH AND CASH EQUIVALENTS, AND
CASH AND CASH EQUIVALENTS, AND SHORT AND LONG-TERM INVESTMENTS | 12 Months Ended |
Dec. 31, 2021 | |
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 2021 2020 Cash 14,667 9,060 Banks and immediately available investments 4,145,987 4,608,144 Cash and cash equivalents 4,160,654 4,617,204 Immediately available investments include investments with maturity up to 90 days at the time of acquisition, immediate liquidity and low risk of fair value variation. 2021 2020 Short-term investments 2,626,212 3,041,143 Short-term investments 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 |
Dec. 31, 2021 | |
TRADE ACCOUNTS RECEIVABLE. | |
TRADE ACCOUNTS RECEIVABLE | NOTE 5 — TRADE ACCOUNTS RECEIVABLE 2021 2020 Trade accounts receivable - in Brazil 2,640,011 2,081,740 Trade accounts receivable - exports from Brazil 249,834 26,121 Trade accounts receivable - outside of Brazil 2,632,002 1,766,555 (-) Impairment loss on trade receivables (107,772) (137,146) 5,414,075 3,737,270 Accounts receivable by aging are as follows: 2021 2020 Current 4,646,175 3,466,000 Past-due: Up to 30 days 494,866 259,756 From 31 to 60 days 139,415 48,905 From 61 to 90 days 32,245 9,355 From 91 to 180 days 169,959 13,636 From 181 to 360 days 8,220 15,899 Above 360 days 30,967 60,865 (-) Impairment on financial assets (107,772) (137,146) 5,414,075 3,737,270 The changes in the impairment on financial assets are as follows: Balance as of January 1, 2019 (158,157) Impairment on financial assets during the year (81,243) Recoveries in the year 60,199 Write-offs 78,635 Exchange variation 2,487 Balance as of December 31, 2019 (98,079) Impairment on financial assets during the year (148,548) Recoveries in the year 84,416 Write-offs 36,210 Exchange variation (11,145) Balance as of December 31, 2020 (137,146) Impairment on financial assets during the year (55,731) Recoveries in the year 56,088 Write-offs 9,892 Loss of control of subsidiary (note 3.4) 23,203 Exchange variation (4,078) Balance as of December 31, 2021 (107,772) The Company’s maximum exposure to credit risk, net of impairment on financial assets, 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 impairment on financial assets. |
INVENTORIES
INVENTORIES | 12 Months Ended |
Dec. 31, 2021 | |
INVENTORIES | |
INVENTORIES | NOTE 6 — INVENTORIES 2021 2020 Finished products 7,209,379 3,894,698 Work in progress 3,453,948 2,045,158 Raw materials 3,994,655 1,934,958 Storeroom supplies 1,061,666 786,401 Imports in transit 1,145,215 514,321 (-) Allowance for adjustments to net realizable value (3,375) (6,119) 16,861,488 9,169,417 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, 2019 (13,704) Provision for the year (46,693) Reversal of adjustments to net realizable value 22,028 Exchange rate variation (939) Balance as of December 31, 2019 (39,308) Provision for the year (6,562) Reversal of adjustments to net realizable value 47,259 Exchange rate variation (7,508) Balance as of December 31, 2020 (6,119) Provision for the year (6,331) Reversal of adjustments to net realizable value 9,143 Exchange rate variation (68) Balance as of December 31, 2021 (3,375) |
TAX CREDITS
TAX CREDITS | 12 Months Ended |
Dec. 31, 2021 | |
TAX CREDITS. | |
TAX CREDITS | NOTE 7 — TAX CREDITS 2021 2020 Current ICMS (state VAT) 155,373 297,926 Social security financing 1,456,593 632,927 Financing of social integration program 226,477 171,724 IPI (federal VAT) 67,166 38,174 IVA (value-added tax) 126,281 24,500 Others 51,995 36,061 2,083,885 1,201,312 Non-current ICMS (state VAT) 85,512 64,163 Social security financing 238 441,111 Financing of social integration program and Others 38,850 158,771 124,600 664,045 2,208,485 1,865,357 The estimates of realization of non-current tax credits are as follows: 2021 2020 2022 — 584,145 2023 64,426 22,433 2024 40,853 8,054 2025 11,660 49,413 2026 on 7,661 — 124,600 664,045 |
INCOME AND SOCIAL CONTRIBUTION
INCOME AND SOCIAL CONTRIBUTION TAXES | 12 Months Ended |
Dec. 31, 2021 | |
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 (IRPJ) and social contribution (CSLL), 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, 2021, 2020 and 2019. The foreign subsidiaries of the Company are subject to taxation at rates ranging between 23% and 35% , 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: 2021 2020 2019 Income (loss) before income taxes 20,272,568 3,495,678 1,674,720 Statutory tax rates 34 % 34 % 34 % Income and social contribution taxes at statutory rates (6,892,673) (1,188,531) (569,405) Tax adjustment with respect to: - Difference in tax rates in foreign companies 403,431 530,715 75,428 - Equity in earnings of unconsolidated companies 191,474 51,873 (5,797) - Interest on equity* 406,022 98,739 69 - Interests on tax lawsuits** 551,624 — — - Tax credits and incentives 112,521 31,800 8,852 - Deferred tax assets not recognized / Realization, net 482,497 (587,917) 1,097 - Other permanent differences, net 31,474 (44,303) 31,923 Income and social contribution taxes (4,713,630) (1,107,624) (457,833) Current (4,306,223) (908,051) (240,400) Deferred (407,407) (199,573) (217,433) * 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. This expense is not recognized for the purpose of preparing the financial statements and therefore does not impact net income. ** b) Breakdown and changes in deferred income and social contribution tax assets and liabilities at statutory tax rates: Balance as of Recognized in Comprehensive Balance as of December 31, 2020 income Others Income December 31, 2021 Tax loss carryforward 1,220,485 (556,480) (24,312) 10,156 649,849 Social contribution tax losses 290,276 (187,814) 20,625 — 123,087 Provision for tax, civil and labor liabilities 385,463 37,256 — 33 422,752 Benefits granted to employees 392,257 (35,812) — (57,828) 298,617 Other temporary differences 501,114 (144,352) — 2,312 359,074 Deferred exchange variance* 1,057,541 511,763 — 7 1,569,311 Provision for losses 35,520 6,576 — (5,832) 36,264 Fair value adjustments on businesses acquired (550,864) (38,544) — (39,213) (628,621) 3,331,792 (407,407) (3,687) (90,365) 2,830,333 Non-current assets 3,393,354 2,929,308 Non-current liabilities (61,562) (98,975) * Corresponds to deferred taxes over foreign exchange gains and loss which certain subsidiaries elected to tax on a cash basis Balance as of Recognized in Acquisition of Comprehensive Balance as of December 31, 2019 income subsidiary Income December 31, 2020 Tax loss carryforward 1,341,464 (157,207) — 36,228 1,220,485 Social contribution tax losses 350,810 (60,534) — — 290,276 Provision for tax, civil and labor liabilities 242,794 140,871 — 1,798 385,463 Benefits granted to employees 294,031 (6,848) — 105,074 392,257 Other temporary differences 575,719 (114,627) — 40,022 501,114 Deferred exchange variance* 1,177,428 (119,178) — (709) 1,057,541 Provision for losses 23,618 11,740 — 162 35,520 Fair value adjustments on businesses acquired (452,058) 106,210 (86,093) (118,923) (550,864) 3,553,806 (199,573) (86,093) 63,652 3,331,792 Non-current assets 4,071,219 3,393,354 Non-current liabilities (517,413) (61,562) * Corresponds to deferred taxes over foreign exchange gains and loss which certain subsidiaries elected to tax on a cash basis Balance as of Recognized in Comprehensive Balance as of January 1, 2019 income Others Income December 31, 2019 Tax loss carryforward 1,339,933 4,781 (36,226) 32,976 1,341,464 Social contribution tax losses 337,258 13,552 — — 350,810 Provision for tax, civil and labor liabilities 270,417 (27,848) — 225 242,794 Benefits granted to employees 286,494 (29,739) — 37,276 294,031 Other temporary differences 525,818 73,067 — (23,166) 575,719 Deferred exchange variance* 1,284,377 (106,640) — (309) 1,177,428 Provision for losses 83,837 (75,142) — 14,923 23,618 Fair value adjustments on businesses acquired (372,448) (69,464) — (10,146) (452,058) 3,755,686 (217,433) (36,226) 51,779 3,553,806 Non-current assets 3,874,054 4,071,219 Non-current liabilities (118,368) (517,413) * Corresponds to deferred taxes over foreign exchange gains and loss which certain subsidiaries elected to tax on a cash basis The recoverability analysis of deferred tax balances related to tax loss carryforward and social contribution tax losses performed by the Company and approved by its Board of Directors 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) Unrecognized deferred income tax assets: Due to the lack of expectation to use tax losses, negative social contribution base and deferred exchange variation arising from some operations in Brazil, the Company did not recognize a portion of tax assets of R$240,231 (R$764,845 on December 31, 2020), which do not have an expiration date. The subsidiaries abroad had R$1,256,438 (R$1,180,067 as of December 31, 2020) of tax credits on capital losses for which deferred tax assets have not been recognized and which expire between 2029 and 2035 and also several Unrecognized tax loss carryforwards from state credits in the United States in the amount of R$1,285,373 (R$1,623,459 as of December 31, 2020), which expire at various dates between 2022 and 2040. |
INVESTMENTS IN ASSOCIATES AND J
INVESTMENTS IN ASSOCIATES AND JOINT VENTURES | 12 Months Ended |
Dec. 31, 2021 | |
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, 2019 301,272 701,233 213,899 151,398 1,367,802 Equity in earnings (111,637) 66,468 6,779 21,340 (17,050) Other comprehensive income 28,182 21,282 3,523 2,051 55,038 Capital increase 463,990 — — 7,000 470,990 Capital reduction — (20,344) (20,344) Dividends/Interest on equity — (20,247) — (23,790) (44,037) Balance as of December 31, 2019 681,807 748,392 224,201 157,999 1,812,399 Equity in earnings 23,494 99,913 8,900 20,262 152,569 Other comprehensive income 165,479 195,286 (1,949) — 358,816 Capital increase 42,782 - — — 42,782 Dividends/Interest on equity (5,223) (67,546) — (22,168) (94,937) Balance as of December 31, 2020 908,339 976,045 231,152 156,093 2,271,629 Equity in earnings 279,948 268,291 28,831 (13,912) 563,158 Other comprehensive income 173,934 52,278 710 (1,415) 225,507 Capital increase — — — 27,500 27,500 Capital decrease — (141,095) — — (141,095) Results in operations with subsidiary and joint ventures (note 3.4) 511,514 — — — 511,514 Dividends/Interest on equity (2,460) (84,186) (9,025) (21,767) (117,438) Balance as of December 31, 2021 1,871,275 1,071,333 251,668 146,499 3,340,775 |
PROPERTY, PLANT AND EQUIPMENT
PROPERTY, PLANT AND EQUIPMENT | 12 Months Ended |
Dec. 31, 2021 | |
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 Land and Machines, equipment, Data electronic equipment under Cost of the property, plant, and equipment buildings and installations equipment construction Other Total Balances as of January 1, 2019 8,700,749 29,608,998 753,078 1,021,247 988,114 41,072,186 Additions 28,449 76,756 13,955 1,506,343 121,097 1,746,600 Capitalized interest — — — 24,676 — 24,676 Transfers 115,452 884,161 24,037 (1,038,693) 15,043 — Disposals (54,699) (165,139) (1,890) (40,314) (105,643) (367,685) Foreign exchange effect 122,992 626,432 13,369 42,470 10,797 816,060 Balances as of December 31, 2019 8,912,943 31,031,208 802,549 1,515,729 1,029,408 43,291,837 Additions 50,848 98,372 9,765 1,369,947 121,846 1,650,778 Capitalized interest — — — 24,622 — 24,622 Transfers 207,551 695,512 13,653 (939,231) 22,515 — Disposals (226,920) (505,580) (11,487) — (144,153) (888,140) Business Combination 275,076 173,453 29 36,563 1,636 486,757 Impairment of non-financial assets (198,196) (213,729) — — — (411,925) Foreign exchange effect 918,554 3,621,233 107,634 246,575 47,285 4,941,281 Balances as of December 31, 2020 9,939,856 34,900,469 922,143 2,254,205 1,078,537 49,095,210 Additions 20,661 159,387 21,595 2,649,417 174,963 3,026,023 Capitalized interest — — — 32,876 — 32,876 Transfers 224,789 1,125,706 48,827 (1,405,597) 6,275 — Disposals (41,475) (383,593) (2,982) (19,462) (87,574) (535,086) Loss of control of subsidiary (note 3.4) (168,222) (414,955) (2,545) (7,143) (5,367) (598,232) Foreign exchange effect 245,005 1,476,437 32,978 116,633 18,088 1,889,141 Balances as of December 31, 2021 10,220,614 36,863,451 1,020,016 3,620,929 1,184,922 52,909,932 Property, plant and Land and Machines, equipment, Data electronic equipment under Accumulated depreciation buildings and installations equipment construction Other Total Balances as of January 1, 2019 (4,181,805) (20,366,821) (686,946) — (290,133) (25,525,705) Depreciation (295,615) (1,136,040) (33,143) — (112,384) (1,577,182) Transfers — (20) — — 20 — Disposals 38,826 145,019 1,818 — 105,272 290,935 Foreign exchange effect (74,868) (483,549) (12,151) — (7,824) (578,392) Balances as of December 31, 2019 (4,513,462) (21,841,411) (730,422) — (305,049) (27,390,344) Depreciation (413,252) (1,354,559) (37,616) — (100,210) (1,905,637) Disposals 223,174 497,434 11,169 — 128,833 860,610 Foreign exchange effect (440,999) (2,835,685) (100,806) — (29,434) (3,406,924) Balances as of December 31, 2020 (5,144,539) (25,534,221) (857,675) — (305,860) (31,842,295) Depreciation (383,122) (1,468,513) (41,973) — (163,803) (2,057,411) Transfers 6,693 (1,201) — — (5,492) — Disposals 23,046 369,173 2,981 — 86,064 481,264 Loss of control of subsidiary (note 3.4) 84,286 332,312 2,542 — 3,462 422,602 Foreign exchange effect (126,758) (1,006,607) (28,879) — (10,062) (1,172,306) Balances as of December 31, 2021 (5,540,394) (27,309,057) (923,004) — (395,691) (34,168,146) Net property, plant and equipment Balances as of December 31, 2019 4,399,481 9,189,797 72,127 1,515,729 724,359 15,901,493 Balances as of December 31, 2020 4,795,317 9,366,248 64,468 2,254,205 772,677 17,252,915 Balances as of December 31, 2021 4,680,220 9,554,394 97,012 3,620,929 789,231 18,741,786 The average rate of capitalized interest in 2021 was 3.3% (3.8% in 2020 and 6.0% in 2019). The following useful lives are used to calculate depreciation: Useful lives of property, plant and equipment Buildings 10 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 c) Impairment of property, plant and equipment |
GOODWILL
GOODWILL | 12 Months Ended |
Dec. 31, 2021 | |
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, 2019 16,783,958 (7,671,568) 9,112,390 (+/-) Foreign exchange effect 661,247 (304,326) 356,921 Balance as of December 31, 2019 17,445,205 (7,975,894) 9,469,311 (+/-) Foreign exchange effect 4,976,383 (2,342,175) 2,634,208 Balance as of December 31, 2020 22,421,588 (10,318,069) 12,103,519 (+/-) Foreign exchange effect 1,469,190 (595,284) 873,906 Results in operations with subsidiary and joint ventures (note 3.4) (549,898) — (549,898) Balance as of December 31, 2021 23,340,880 (10,913,353) 12,427,527 The amounts of goodwill by segment are as follows: 2021 2020 2019 Brazil 373,135 373,135 373,135 Special Steel 4,111,619 3,828,841 2,969,752 North America 7,942,773 7,901,543 6,126,424 12,427,527 12,103,519 9,469,311 |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 12 Months Ended |
Dec. 31, 2021 | |
INTANGIBLE ASSETS | |
INTANGIBLE ASSETS | NOTE 12 — INTANGIBLE ASSETS Intangible assets consist mainly of relationships with customers and suppliers 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, 2019 26,719 415,640 387,299 6,438 836,096 Foreign exchange effect — 6,137 12,586 472 19,195 Acquisition — 100,313 — — 100,313 Amortization (5,304) (157,278) (116,462) (3,298) (282,342) Balance as of December 31, 2019 21,415 364,812 283,423 3,612 673,262 Foreign exchange effect — 42,890 83,806 1,074 127,770 Acquisition — 154,250 — — 154,250 Amortization (4,637) (188,083) (136,525) (3,459) (332,704) Balance as of December 31, 2020 16,778 373,869 230,704 1,227 622,578 Foreign exchange effect — 17,609 13,247 33 30,889 Acquisition — 166,310 — — 166,310 Amortization (4,055) (177,674) (127,028) (1,260) (310,017) Balance as of December 31, 2021 12,723 380,114 116,923 — 509,760 Estimated useful lives 5 to 20 years up to 5 years 5 to 20 years 5 years The composition of other intangible assets by segment is as follows: 2021 2020 2019 Brazil 207,053 220,303 238,243 Special Steel 130,719 156,557 132,934 South America 1,039 1,534 1,729 North America 170,949 244,184 300,356 509,760 622,578 673,262 |
LEASING
LEASING | 12 Months Ended |
Dec. 31, 2021 | |
LEASING | |
LEASING | NOTE 13 — LEASING a) Summary of changes in the leasing assets: Machines, equipment, Data electronic Right-of-use Cost Land and buildings and installations equipment Others Total Balances as of January 1, 2019 243,250 436,401 106,787 49,930 836,368 Additions 14,062 117,653 742 11,064 143,521 Disposals (10,493) (22,993) (162) (1,907) (35,555) Remeasurements 33,322 (2,346) — 1,236 32,212 Foreign exchange effect 3,853 4,571 46 2,119 10,589 Balances as of December 31, 2019 283,994 533,286 107,413 62,442 987,135 Additions 5,670 185,116 175 43,862 234,823 Disposals (14,583) (14,846) — (1,176) (30,605) Remeasurements 111 (3,035) 12,548 69 9,693 Foreign exchange effect 26,748 37,809 340 15,747 80,644 Balances as of December 31, 2020 301,940 738,330 120,476 120,944 1,281,690 Additions 48,504 135,652 291 36,599 221,046 Disposals (5,621) (109,947) (151) (22,066) (137,785) Remeasurements 40,024 55,866 6,456 4,045 106,391 Loss of control of subsidiary (note 3.4) — (2,894) (302) — (3,196) Foreign exchange effect 8,152 13,828 111 8,599 30,690 Balances as of December 31, 2021 392,999 830,835 126,881 148,121 1,498,836 Machines, equipment, Data electronic Accumulated depreciation Land and buildings and installations equipment Others Total Balances as of January 1, 2019 — — — — — Depreciation (50,080) (127,399) (15,419) (21,873) (214,771) Disposals 1,330 4,250 32 976 6,588 Foreign exchange effect (733) (128) (9) (768) (1,638) Balances as of December 31, 2019 (49,483) (123,277) (15,396) (21,665) (209,821) Depreciation (51,451) (166,741) (15,459) (27,110) (260,761) Disposals 8,601 13,453 — 1,027 23,081 Foreign exchange effect (5,286) (8,091) (70) (5,431) (18,878) Balances as of December 31, 2020 (97,619) (284,656) (30,925) (53,179) (466,379) Depreciation (59,284) (186,300) (13,800) (31,750) (291,134) Disposals 3,668 108,532 97 21,334 133,631 Loss of control of subsidiary (note 3.4) — 1,860 230 — 2,090 Foreign exchange effect (3,574) (7,889) (45) (3,792) (15,300) Balances as of December 31, 2021 (156,809) (368,453) (44,443) (67,387) (637,092) Right-of-use Assets Balances as of December 31, 2019 234,511 410,009 92,017 40,777 777,314 Balances as of December 31, 2020 204,321 453,674 89,551 67,765 815,311 Balances as of December 31, 2021 236,190 462,382 82,438 80,734 861,744 b) Leasing payable: Leasing payments are presented in the Statement of Cash Flow. The liabilities presented in the Balance Sheet are adjusted to present value, based on risk-free interest rates observed in each country where the Company has operations, adjusted by the Company's credit spread, where on December 31, 2021 the discount rates were between 3.5% p.a. to 16.3% p.a. (3.7% p.a. to 10.8% p.a. in December 31, 2020), varying according to the country and duration of the lease. The payment schedules of leasing are as follows: 2021 2020 2021 — 231,703 2022 275,086 193,314 2023 211,576 140,019 2024 127,718 90,812 2025 88,682 65,561 2026 on 215,303 135,065 918,365 856,474 Leasing payable Current 275,086 231,703 Non-current 643,279 624,771 Financial expense for the years ended on December 31, 2021 and 2020 68,789 61,727 |
TRADE ACCOUNTS PAYABLE
TRADE ACCOUNTS PAYABLE | 12 Months Ended |
Dec. 31, 2021 | |
TRADE ACCOUNTS PAYABLE | |
TRADE ACCOUNTS PAYABLE | NOTE 14 – TRADE ACCOUNTS PAYABLE 2021 2020 Trade accounts payable - domestic market 5,230,270 3,941,924 Trade accounts payable - debtor risk 807,915 726,045 Trade accounts payable - intercompany 47,597 8,958 Trade accounts payable - imports 1,931,358 761,026 8,017,140 5,437,953 The Company has contracts with financial institutions in order to allow its suppliers to receive in advance their receivables through an operation called "Trade accounts payable - debtor risk". In this operation, the suppliers transfer the right to receive their receivables to a financial institution, which in turn, becomes the holder of the rights to the suppliers' receivables. The Company constantly monitors the composition of the portfolio and the conditions established with its suppliers, which have not resulted in significant changes in relation to what had been practiced historically. |
SHORT-TERM DEBT AND LONG-TERM D
SHORT-TERM DEBT AND LONG-TERM DEBT | 12 Months Ended |
Dec. 31, 2021 | |
SHORT-TERM DEBT AND LONG-TERM DEBT | |
SHORT-TERM DEBT AND LONG-TERM DEBT | NOTE 15 – SHORT-TERM DEBT AND LONG-TERM DEBT Loans and financing are as follows: 2021 2020 Working capital 480,905 1,178,557 Financing of property, plant and equipment and others 102,232 333,797 Ten/Thirty Year Bonds 10,526,649 13,100,580 Total Loans and Financing 11,109,786 14,612,934 Current 234,537 1,424,043 Non-current 10,875,249 13,188,891 Principal amount of loans and Financing 10,952,983 14,413,188 Interest accrued of loans and Financing 156,803 199,746 Total 11,109,786 14,612,934 (*) Weighted average effective interest costs on December 31, 2021, which represents total of 5.76%. Loans and financing denominated in Brazilian reais are indexed to fixed rates or CDI (Interbank Deposit Certificate). Summary of loans and financing by currency: 2021 2020 Brazilian Real (BRL) 461,187 1,245,988 U.S. Dollar (USD) 10,535,532 13,366,946 Other currencies 113,067 — 11,109,786 14,612,934 The amortization schedules of long-term loans and financing are as follows: 2021 2020 2022 — 5,210 2023 1,115,211 2,108,324 2024 878,044 1,813,225 2025 405,788 682,422 2026 on 8,476,206 8,579,710 10,875,249 13,188,891 a) Credit Lines In October 2019, the Company completed the renewal of the Global Credit Line in the total amount of US$ 800 million (equivalent to R$4,464 million as of December 31, 2021). The transaction aims to provide liquidity to subsidiaries in North America and Latin America, including Brazil. The companies Gerdau S.A., Gerdau Açominas S.A. and Gerdau Aços Longos S.A. provide guarantee for this transaction, which matures in October 2024. As of December 31, 2021, the outstanding balance of this credit facility was US$ 85 million (equivalent to R$ 474 million as of December 31, 2021). b) Significant funding and settlements of financing in 2021 During the 4 th quarter of 2021, the Company repurchased Bonds, maturing in 2023, 2024 and 2027, in the total principal amount of US$ 395.8 million (equivalent to R$ 2,208 million). Additionally, the subsidiary Gerdau Açominas S.A. effected the early settlement of two bilateral loans in the total amount of R$ 775 million with the banks Santander and Bank of America. |
DEBENTURES
DEBENTURES | 12 Months Ended |
Dec. 31, 2021 | |
DEBENTURES. | |
DEBENTURES | General Quantity as of December 31, 2021 Issuance Meeting Issued Held in treasury Maturity 2021 2020 14th August 26, 2014 20,000 20,000 August 30, 2024 — — 15th November 09, 2018 1,500,000 — November 21, 2022 1,513,958 1,500,985 16th - A April 25, 2019 600,000 — May 6, 2023 607,031 600,759 16th - B April 25, 2019 800,000 — May 6, 2026 808,918 800,673 Total Consolidated 2,929,907 2,902,417 Current 1,531,956 7,463 Non-current 1,397,951 2,894,954 The amortization schedules of long-term are as follows: 2021 2020 2022 — 1,497,760 2023 599,390 598,960 2026 798,561 798,234 1,397,951 2,894,954 The debentures are denominated in Brazilian Reais, nonconvertible, and pay variable interest as a percentage of the CDI – Interbank Deposit Certificate. The average interest rate was 4.62% for the year ended on December 31, 2021 (2.90% for the year ended on December 31, 2020). |
FINANCIAL INSTRUMENTS
FINANCIAL INSTRUMENTS | 12 Months Ended |
Dec. 31, 2021 | |
FINANCIAL INSTRUMENTS | |
FINANCIAL INSTRUMENTS | NOTE 17 — FINANCIAL INSTRUMENTS a) General considerations - The Company uses derivative and non-derivative instruments as hedges for certain transactions and applies the hedge accounting methodology for some of these transactions. These operations are intended to protect the Company against changes in the exchange rates of loans denominated in foreign currency and fluctuations in interest rates. These transactions are carried out considering direct active or passive exposures, without leverage. b) Fair Value — 2021 2020 Book Fair Book Fair value value value value Assets Short-term investments 2,626,212 2,626,212 3,041,143 3,041,143 Related parties 2,678 2,678 134,354 134,354 Fair value of derivatives 3,246 3,246 — — Other current assets 679,193 679,193 591,523 591,523 Other non-current assets 571,637 571,637 590,864 590,864 Liabilities Loans and Financing 11,109,786 12,630,940 14,612,934 17,014,948 Debentures 2,929,907 2,911,424 2,902,417 2,775,619 Related parties 24,648 24,648 22,855 22,855 Fair value of derivatives — — 971 971 Obligations with FIDC (current liabilities) 45,497 45,497 944,513 944,513 Other current liabilities 1,090,396 1,090,396 797,082 797,082 Obligations with FIDC (non-current liabilities) — — 42,893 42,893 Other non-current liabilities 421,873 421,873 514,886 514,886 The fair values of Loans and Financing and Debentures 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 like 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 17.g. c) Risk factors that could affect the Company’s and its subsidiaries’ businesses: Price risk of commodities: Interest rate risk: Exchange rate risk: 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. Regarding short-term 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 Net debt/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: 2021 Contractual obligations Total Less than 1 year 1-3 years 4-5 years More than 5 years Trade accounts payable 8,017,140 8,017,140 — — — Loans and financing 17,885,671 851,225 2,227,608 2,308,361 12,498,477 Debentures 3,492,689 1,802,373 780,537 111,218 798,561 Related parties 24,648 — — — 24,648 Obligations with FIDC 45,497 45,497 — — — Other current liabilities 1,090,396 1,090,396 — — — Other non-current liabilities 421,873 — 35,406 — 386,467 30,977,914 11,806,631 3,043,551 2,419,579 13,708,153 2020 Contractual obligations Total Less than 1 year 1-3 years 4-5 years More than 5 years Trade accounts payable 5,437,953 5,437,953 — — — Loans and financing 21,962,204 2,131,402 3,465,577 3,531,312 12,833,913 Debentures 3,077,960 66,145 2,174,184 32,604 805,027 Related parties 22,855 — — — 22,855 Obligations with FIDC 987,406 944,513 42,893 — — Other current liabilities 797,082 797,082 — — — Other non-current liabilities 514,886 — 41,805 — 473,081 32,800,346 9,377,095 5,724,459 3,563,916 14,134,876 Sensitivity analysis: The Company performed a sensitivity analysis, which can be summarized as follows: Impacts on Statements of Income Assumptions Percentage of change 2021 2020 Foreign currency sensitivity analysis 5% 19,036 15,057 Interest rate sensitivity analysis 10 bps 55,964 85,147 Sensitivity analysis of changes in prices of products sold 1% 783,451 438,147 Sensitivity analysis of changes in raw material and commodity prices 1% 437,210 269,454 Currency forward contracts 5% — 3,703 Commodity contracts 5% 4,892 — Foreign currency sensitivity analysis: As of December 31, 2021, 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$ 19,036 after the effects arising from the changes in the net investment hedge described in Note 17.f - (R$ 15,047 as of December 31, 2020, respectively). If the Real depreciates against the Dollar this would represent an expense of the same value. Due to the net investment hedge, the variations are minimized when the exchange variation account and income tax are analyzed. The net amounts of trade accounts receivable and trade accounts payable denominated in foreign currency do not represent any significant risk in the case of any fluctuation of exchange rates. Interest rate sensitivity analysis: Sensitivity analysis of changes in sales price of products and price of raw materials and other inputs used in production: Sensitivity analysis of currency forward contracts: Sensitivity analysis of commodity contracts: same amount. Coal forward contracts were intended to cover liability positions and the mark to market effects of these contracts were recorded in the Consolidated Statement of Income. The commodity forward contracts to which the Company is exposed are presented in Note 17.e. d) Financial Instruments per Category Summary of the financial instruments per category: Financial asset at fair 2021 Financial asset at value through proft or Assets amortized cost loss Total Short-term investments — 2,626,212 2,626,212 Fair value of derivatives 3,246 — 3,246 Related parties 2,678 — 2,678 Other current assets 679,193 — 679,193 Other non-current assets 479,971 91,666 571,637 Total 1,165,088 2,717,878 3,882,966 Financial income (expenses) 1,226,743 210,988 1,437,731 Financial liability at fair value through profit or Financial liability at Liabilities loss amortized cost Total Loans and financing — 11,109,786 11,109,786 Debentures — 2,929,907 2,929,907 Related parties — 24,648 24,648 Obligations with FIDC (current liabilities) — 45,497 45,497 Other current liabilities — 1,090,396 1,090,396 Other non-current liabilities — 421,873 421,873 Total — 15,622,107 15,622,107 Financial income (expenses) (10,421) (2,177,764) (2,188,185) Financial asset at fair 2020 Financial asset at value through proft or Assets amortized cost loss Total Short-term investments — 3,041,143 3,041,143 Related parties 134,354 — 134,354 Other current assets 591,523 — 591,523 Other non-current assets 530,864 60,000 590,864 Total 1,256,741 3,101,143 4,357,884 Financial income (expenses) 487,631 109,396 597,027 Financial liability at fair value through profit or Financial liability at Liabilities loss amortized cost Total Loans and financing — 14,612,934 14,612,934 Debentures — 2,902,417 2,902,417 Related parties — 22,855 22,855 Obligations with FIDC (current liabilities) — 944,513 944,513 Other current liabilities — 797,082 797,082 Obligations with FIDC (non-current liabilities) — 42,893 42,893 Other non-current liabilities — 514,886 514,886 Fair value of derivatives 971 — 971 Total 971 19,837,580 19,838,551 Financial income (expenses) (1,632) (2,294,102) (2,295,734) e) Operations with derivative financial instruments Risk management objectives and strategies: The objective of derivative transactions is 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: Policy for determining fair value: Derivative transactions may include: interest rate and/or currency swaps, currency futures contracts and currency options contracts. Swap Contracts: The Company has contracted 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 always highly rated financial institutions with low credit risk. Currency forward contracts: The derivatives instruments can be summarized and categorized as follows: Notional value Amount receivable Amount payable Contracts Position 2021 2020 2021 2020 2021 2020 Swap of interest rate Maturity in 2022 buyed in US$ US$ 5.3 milion US$ 9.9 milion 3,246 — — (971) Total fair value of financial instruments 3,246 — — (971) Fair value of derivatives 2021 2020 Current assets 3,246 — 3,246 — Fair value of derivatives Current liabilities — 971 — 971 2021 2020 Net Income Gains on financial instruments 28,349 858 Losses on financial instruments (10,421) (1,632) 17,928 (774) Other comprehensive income Gains (Losses) on financial instruments 1,907 (1,972) 1,907 (1,972) 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 debts in the amount of US$ 1.4 billion (designated as hedges) is recognized in the Statement of Comprehensive Income. 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$ 695,102 and R$2,504,914 as of December 31, 2021 and December 31,2020, respectively. 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: 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, 2021, 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, 2021 and December 31, 2020, are as follows: Fair Value Measurements at Reporting Date Using Quoted Prices in Non-Active Markets for Similar Assets Balance per financial statements (Level 2) 2021 2020 2021 2020 Current assets Short-term investments 2,626,212 3,041,143 2,626,212 3,041,143 Fair value of derivatives 3,246 — 3,246 — Other current assets 679,193 591,523 679,193 591,523 Non-current assets Related parties 2,678 134,354 2,678 134,354 Other non-current assets 571,637 590,864 571,637 590,864 3,882,966 4,357,884 3,882,966 4,357,884 Current liabilities Short-term debt 234,537 1,424,043 234,537 1,424,043 Debentures 1,531,956 7,463 1,531,956 7,463 Fair value of derivatives — 971 — 971 Obligations with FIDC 45,497 944,513 45,497 944,513 Other current liabilities 1,090,396 797,082 1,090,396 797,082 Non-current liabilities Long-term debt 10,875,249 13,188,891 10,875,249 13,188,891 Debentures 1,397,951 2,894,954 1,397,951 2,894,954 Related parties 24,648 22,855 24,648 22,855 Obligations with FIDC — 42,893 — 42,893 Other non-current liabilities 421,873 514,886 421,873 514,886 15,622,107 19,838,551 15,622,107 19,838,551 h) Changes in liabilities from Cash flow from financing activities: 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 Interest expense on loans and Interest on Balances as of Proceeds/(Repayment) Interest paid on loans with related Exchange variation Balances as of January 01, 2019 from financing activities loans and financing parties and others December 31, 2019 Related parties, net (26,589) (64,089) — (4,767) — (95,445) Leasing payable 836,368 (161,824) (83,620) 83,620 129,725 804,269 Debt, Debentures and Losses/Gains on financial instruments, net - Derivative instruments 14,878,542 700,490 (945,027) 938,120 474,896 16,047,021 Cash transactions Non cash transactions Interest expense on loans and Interest on Balances as of Proceeds/(Repayment) Interest paid on loans with related Exchange variation Balances as of December 31, 2019 from financing activities loans and financing parties and others December 31, 2020 Related parties, net (95,445) (7,777) — (8,277) — (111,499) Leasing payable 804,269 (247,914) (61,727) 61,727 300,119 856,474 Debt, Debentures and Losses/Gains on financial instruments, net - Derivative instruments 16,047,021 (1,963,283) (1,079,981) 1,022,460 3,490,105 17,516,322 Cash transactions Non cash transactions Interest expense on loans and Interest on Balances as of Proceeds/(Repayment) Interest paid on loans with related Exchange variation Balances as of December 31, 2020 from financing activities loans and financing parties and others December 31, 2021 Related parties, net (111,499) 139,556 — (6,089) 2 21,970 Leasing payable 856,474 (275,944) (68,699) 68,699 337,835 918,365 Debt, Debentures and Losses/Gains on financial instruments, net - Derivative instruments 17,516,322 (4,506,918) (1,100,826) 1,059,841 1,068,028 14,036,447 |
TAXES PAYABLE
TAXES PAYABLE | 12 Months Ended |
Dec. 31, 2021 | |
TAXES PAYABLE | |
TAXES PAYABLE | NOTE 18 — TAXES PAYABLE 2021 2020 Payroll charges 136,428 100,301 ICMS (state VAT) 92,320 99,430 COFINS (tax on revenue) 26,139 51,444 IPI (federal VAT) 41,474 38,153 IVA (value-added tax) and others 251,812 310,761 548,173 600,089 |
TAX, CIVIL AND LABOR CLAIMS AND
TAX, CIVIL AND LABOR CLAIMS AND CONTINGENT ASSETS | 12 Months Ended |
Dec. 31, 2021 | |
TAX, CIVIL AND LABOR CLAIMS AND CONTINGENT ASSETS | |
TAX, CIVIL AND LABOR CLAIMS AND CONTINGENT ASSETS | NOTE 19 — 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 enough to cover expected probable losses. The balances of provisions are as follows: I) Provisions 2021 2020 a) Tax provisions 1,270,473 706,104 b) Labor provisions 435,803 428,821 c) Civil provisions 34,750 37,586 1,741,026 1,172,511 a) Tax Provisions Tax provisions refer mainly to discussions related to ICMS, IPI, tax uncertainties related to income tax and social contribution, social security contributions, offsetting of PIS and COFINS credits and incidence of PIS and COFINS on other revenues. b) Labor Provisions The Company is party to a group of individual and collective labor and/or administrative lawsuits involving various labor amounts and the provision arises from unfavorable decisions and/or the probability of loss in the ordinary course of proceedings with the expectation of outflow of financial resources by the Company. c) Civil Provisions The Company is party to a group of civil, arbitration and/or administrative lawsuits involving various claims and the provision arises from unfavorable decisions and/or probable losses in the ordinary course of proceedings with the expectation of outflow of financial resources for the Company. The changes in the tax, labor and civil provisions are shown below: 2021 2020 2019 Balance at the beginning of the year 1,172,511 809,299 770,305 (+) Additions 801,412 559,513 249,868 (+) Interests 42,435 104,473 70,788 (-) Reversal of accrued amounts (276,251) (304,678) (282,239) (+) Foreign exchange effect on provisions in foreign currency 919 3,904 577 Balance at the end of the year 1,741,026 1,172,511 809,299 II) Contingent liabilities for which provisions were not recorded Considering the opinion of legal advisors and management’s assessment, contingencies listed below have the probability of loss considered as possible (but not likely) and due to this classification, accruals have not been made. a) Tax contingencies a.1) a.2) a.3) lawsuits of the subsidiary Gerdau Aços Longos S.A. where, currently, four lawsuits are at the first instance of the Administrative Council for Tax Appeals (CARF) awaiting the judgment of the Voluntary Appeals filed by the Company, and, finally, another 3 lawsuits that are in the Superior Chamber of Tax Appeals (CSRF) of the CARF, for judgment of Special Appeals filed by the Company; and (ii) R$ 377,918 correspond to two lawsuits of Gerdau S.A., which are in the Superior Chamber of Tax Appeals (CSRF) of CARF, for judgment of Special Resources and Appeal filed by the Company. a.4) corresponds to a lawsuit in which the Company impugnation was rejected by the Federal Revenue Judgment Office (DRJ) and filed a Voluntary Appeal with the Administrative Tax Appeals Council (CARF), which is pending of judgment; (iii) R$ 79,626 correspond to a lawsuit in which the Company had its challenge partially provided and filed a Voluntary Appeal with the Administrative Council for Tax Appeals (CARF), which is pending of judgment; and (iv) R$ 149,996 correspond to a Notice of Infraction received by the Company on December 2, 2019, against which it presented an Objection on December 27, 2019, deemed partially valid by the Federal Revenue Judgment Office (DRJ), pending judgment by the Council Administrative Tax Appeals (CARF) the Voluntary Appeal filed. a.5) th a.6) th nd nd successor of Gerdau Aços Especiais S.A.), which is at the Superior Chamber of Tax Appeals (CSRF) of CARF for judgment of the Special Appeal filed by the Company; (ix) R$ 575,631 corresponds to a lawsuit filed by the subsidiary Gerdau Aços Longos S.A., which is pending in the first instance of the Administrative Council for Tax Appeals (CARF) awaiting judgment of the Voluntary Appeal filed by the Company; (x) R$ 502,804 pending before the first instance of the Administrative Council for Tax Appeals (CARF), which awaits judgment of the Voluntary Appeal filed by the Company; (xi) R$ 145,141 corresponds to a lawsuit of the subsidiary Gerdau Aços Longos S.A., separated from the process mentioned in item "vii" above, and which is currently in the judicial collection phase, with the appeal of motions for clarification pending of judgment against the sentence that dismissed the Embargoes on Tax Enforcement filed by the Company; and (xii) R$ 402,857 corresponds to a lawsuit of the subsidiary Gerdau Aços Longos S.A., separated from the lawsuit mentioned in item “vii” above, and that it is currently in the judicial collection stage, and the Embargoes on Tax Enforcement filed by the Company are pending of judgment. The Company's tax advisors confirm that the procedures adopted by the Company regarding the tax treatment of profits earned abroad and the goodwill amortization, which led to the aforementioned lawsuits, have complied with the strict legality and, therefore, these lawsuits are classified as possible loss (but not likely). 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. b) Civil contingencies b.1) 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. Both actions were dismissed, and their respective appeals were also rejected by the Federal Regional Court of the 1 st Against both decisions, appeals were lodged with the Superior Court of Justice and the Federal Supreme Court, after admissibility judgment, the appeal to the Superior Court of Justice was admitted and well as substitution of the guarantee offered by insurance guarantee in a decision of October 8, 2019. In the same order in which the Vice president Judge gave suspensive effect to the Special Appeal, in order to change the guarantee, the Extraordinary Appeal was dismissed, on the grounds of violation of res judicata with recognized general repercussion. Against this decision, the Company filed an Internal Appeal for the TRF1 Plenary, which was dismissed. Currently, the Company awaits judgment of the Special Appeal by the Superior Court of Justice. 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 it is certain that it has not practiced the conduct attributed to it, understanding shared by its legal consultants, who consider it is possible to reverse its condemnation. b.2) c) Labor Contingencies The Company and its subsidiaries are parties to other labor claims that together have an amount of approximately R$ 452,847. For these claims, no accounting provision was made, since these were considered as possible losses, based on the opinion of management with inputs of its legal counsel. III) Judicial deposits The Company has judicial deposits related to tax, labor and civil lawsuits as listed below: 2021 2020 Tax 1,449,699 1,597,995 Labor 73,709 95,234 Civil 135,971 132,562 1,659,379 1,825,791 The balance of tax judicial deposits as of December 31, 2021 includes the amount of R$ 1,354,340, which corresponds to judicial deposits made up to June 2017, referring to the same discussion on the inclusion of the ICMS in the tax base of PIS and COFINS and awaits termination of the lawsuits before the Brazilian courts in order to be returned to the Company. The Company and its subsidiaries 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 the nine judicial proceedings, due to its general repercussion. Seven of these lawsuits already have a final favorable decision, and the gain was recognized when the decision was final and unappealable, considering for the purposes of calculation the exclusion of the ICMS informed in the invoices, as recognized in the final and unappealable decisions, and is preparing the documents to carry out the qualification of its credit and be able to start the compensation procedures and/or have already qualified before the Federal Revenue Service of Brazil. It is worth noting that the Company still has two actions for repetition of undue payments, which are awaiting the respective final and unappealable decision. The first of these became final on July 19, 2019, assuring to the Company: i) the right to recover undue payments before the proposed action, in the amount of R$ 122 million (R$ 79 million net of related expenses), and ii) the right to withdraw the judicial deposits made during the course of this action, which was made on September 16, 2019, in the amount of R$ 179 million. The second became final on December 18, 2019, assuring to the Company: i) the right to recover undue payments made before the filing of the lawsuit, as well as during its processing, in the amount of R$ 280 million (R$ 185 million net of related expenses), and ii) the right to withdraw judicial deposits made during the course of this action, which was made on May 27, 2020, in the amount of R$ 189 million. The third became final on June 29, 2020, assuring to the Company: i) the right to recover undue payments made before the filing of the lawsuit, as well as during its processing, in the amount of R$ 147 million (R$ 135 million net of related expenses), and ii) the right to withdraw judicial deposits made during the course of this action in the amount of R$ 198 million. The fourth became final on November 18, 2020, assuring to the Company: i) the right to recover undue payments made before the filing of the lawsuit, as well as during its processing, in the amount of R$ 940 million (R$ 902 million, net of related expenses), and ii) the right to withdraw judicial deposits made during the course of this action in the amount of R$ 3 million. The fifth became final on February 24, 2021, assuring to the Company the right to recover undue payments made before the filing of the lawsuit (undue in respect of period of January/2009 to April/2009), in the amount of R$ 73.5 million (R$ 45.8 million, net of related expenses). The sixth became final on March 25, 2021, assuring to the Company the right to recover undue payments made before the filing of the lawsuit (undue in respect of period of January/2009 to April/2009), in the amount of R$ 5.7 million (R$ 3.6 million, net of related expenses). The seventh became final on July 14, 2021, assuring to the Company the right to recover undue payments made before the filing of the lawsuit (undue in respect of period of December/2006 to December/2010), in the amount of R$ 237 million (R$ 230 million, net of related expenses). The eighth and ninth actions for repetition of undue payment are still awaiting the respective final and unappealable decisions. In these lawsuits, the Company claims the recognition of R$ 683 million (R$ 643 million, net of related expenses) referring to credits prior to the filing of the lawsuits On May 13, 2021, the Federal Supreme Court ruled the Embargoes for Declaration that the National Treasury Attorney's Office had opposed, alleging that the Supreme Court's decision was silent on certain points, and requesting the modulation of the effects of the decision. In that judgment, the STF accepted, in part, the Embargoes for Declaration, to modulate the effects of the judgment whose production took place after March 15, 2017 (date on which RE No. 574.706 was judged), except for lawsuits or administrative proceedings filed up to that date, and rejected the embargoes regarding the allegation of omission, obscurity or contradiction and, in the point related to the ICMS excluded from the calculation basis of the PIS-COFINS contributions, it signed the understanding that it is the ICMS informed in the invoice. After this judgment, the concept of virtually certain for the purposes of the entry of economic benefits and recognition of the asset and the corresponding gain started to be demonstrated. Thus, even though there was no final and unappealable decision on two lawsuits that were pending of judgment, the Company recognized in the 2nd quarter of 2021, with sufficient reliability, the amounts of tax credits to which it is entitled, in the amount of R$ 683 million (R$ 643 million, net of related expenses) referring to credits prior to the filing of the lawsuits. The Company recognized in the 3 rd The amounts recognized in the Company's results related to the recovery of credits arising from the ICMS in the tax base of PIS and COFINS lawsuits (net of related expenses) was R$ 1.2 billion in 2021, of which, R$ 393.3 million in the Other Operating Income line and R$ 788.7 million in the Tax Credits Monetary Update line Due to the economic environment strongly impacted by the pandemic caused by Covid-19, as well as the fact that the procedural legislation expressly provides the equivalence of cash and guarantee insurance, the subsidiary Gerdau Aços Longos S.A. requested the replacement of the amounts deposited by it over the years regarding the Inclusion of ICMS in the tax base of PIS and COFINS for a guarantee insurance presented by the Company, in the amount of R$ 1.7 billion, which complies with all the requirements established by the PGFN (Attorney General of the National Treasury) and can be converted into income at any time, ensuring that the Public Treasury receives all the amounts that may eventually be due at the end of the process. In the lower court decision, therefore, there was a decision to release the funds deposited by the Company. The Public Treasury appealed to the Court and obtained a decision reversing the release of the amounts. The Company, then, filed a complaint to settle divergence between the decision handed down by Federal Judge Ferreira Neves, member of the 4 th nd Regarding the fine for bad faith litigation, applied due to the allegation of alleged attempt to mislead the Judiciary, the Company informs that it has always manifested itself in the file with procedural good faith and is confident that this will be clarified during the process. IV) Eletrobras Compulsory Loan — Centrais Elétricas Brasileiras S.A. (Eletrobras) 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 Eletrobras 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 Eletrobras, 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, default interest and other accessory amounts owed by Eletrobras due to the compulsory loans. The Company recognized in the 2020 result, the amount of R$ 436 million (net of expenses incurred for its realization), corresponding to four processes that evolved into its closing and liquidation phase. The Company still has other lawsuits pending before the Judiciary, dealing with the subject, with final and unappealable decisions on the merits, favorable to the Company. Regarding one of these processes, involving Gerdau S.A. and its subsidiary Seiva SA – Florestas e Indústrias, on November 25, 2020 a decision was issued that ratified the expert report prepared by the court expert appointed by the Court, establishing the amount to be received in favor of the companies. This decision was maintained by the Court of Justice of the State of Rio de Janeiro in judgment on August 10, 2021, and on September 10, 2021 Eletrobras made the judicial deposit/payment of the amount of the sentence determined by the Judiciary Branch of the State of Rio January, duly increased by interests and loss charges. Thus, considering the current procedural stage, the Company concludes that said asset, until then treated as contingent, due to uncertainties as to the term, form and amount that would be effectively paid and currently defined, fulfilled the accounting characteristics related to the entry of economic benefits, pursuant to paragraph 35 of IAS 37, which implied the recognition by the Company, in 2021, of gain in the statement of income in the amount of R$ 1,391,280, net of fees and related expenses. The Company clarifies that on December 21, 2021 the entire amount was deposited in the Company's account, after the presentation of a guarantee insurance. The Company reinforces that the decision that fixed the amount due in favor of Gerdau was maintained in all instances of the Judiciary Branch of the State of Rio de Janeiro, having been rejected the request for suspension by the Superior Court of Justice – STJ; and that it takes care of definitive execution, based on a final judicial enforcement order, no longer subject to deconstitution of any nature before the Judiciary, leaving only appeals and measures with remote possibilities of acceptance, in view of its only delaying nature. The other lawsuits pending before the Judiciary, dealing with this subject, with final and unappealable decisions on the merits, favorable to the Company, total approximately R$ 73 million. V) Other contingent assets The Company's management believes that the realization of certain contingent assets of a tax nature is probable. However, such assets were not recognized in the financial statements, due to the fact that they have not yet become final and/or that there are uncertainties regarding the term, form and amount that will be effectively realized, and it is not yet practicable to determine with certainty that the amount of the gain in the form of proceeds from these decisions has reached the level of virtually certain and that the Company has control over such assets, which implies that such gains are not recognized until such conditions are demonstrably present. The Company estimates that such contingent assets amount to approximately R$ 750 million as of December 31, 2021. |
RELATED-PARTY TRANSACTIONS
RELATED-PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2021 | |
RELATED-PARTY TRANSACTIONS | |
RELATED-PARTY TRANSACTIONS | NOTE 20 — RELATED-PARTY TRANSACTIONS a) Intercompany loans Maturity 2021 2020 Assets Joint venture Gerdau Corsa SAPI de C.V. — 117,092 Others Fundação Gerdau December 31, 2022 2,678 17,262 2,678 134,354 Liabilities Joint venture Bradley Steel Processors Inc. August 1, 2022 (24,648) (22,855) (24,648) (22,855) 2021 2020 2019 Net financial income 6,089 8,277 4,767 b) Operations with related parties During the years ended December 31, 2021, 2020 and 2019, the Company, through its subsidiaries, entered into commercial operations with some of its associate companies and joint ventures including sales of R$997,298 as of December 31, 2021 (R$887,945 and R$1,572,618 as of December 31, 2020 and 2019, respectively) and purchases in the amount of R$304,239 as of December 31, 2021 (R$208,948 and R$198,636 as of December 31, 2020 and 2019, respectively). The net amount totals R$693,058 as of December 31, 2021 (R$678,997 and R$1,373,982 as of December 31, 2020 and 2019, respectively). Additionally, the Company recorded income derived from rental agreement in the amount of R$ 670 as of December 31, 2021 (R$ 524 and R$ 554 as of December 31, 2020 and 2019, respectively). During the year ended on December 31, 2020, the Company and its subsidiaries carried out transactions with controlling shareholders referring to the sale of property in the amount of R$21,204 with receivement in six annual installments adjusted by the positive variation of the IPCA. The decision about the buyer was made through a competitive market process that considered several potential buyers to whom the asset was presented, under the coordination of an independent specialized company. The sale price was determined based on independent valuations and carried out by professionals specialized in valuing tangible assets. As a conclusion of this process, the best proposal was recommended under the terms of the independent appraisal and, as it is a related party, it was approved by the Board of Directors, observing the terms of the Company's Related Party Transactions Policy. During the year ended on December 31, 2019, 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 paid a fee of 0.95 % p.a. on the amount guaranteed. The effect of these transactions was an expense of R$68 as of December 31, 2019. Guarantees granted Original Related Party Relationship Object Amount Maturity 2021 2020 2019 Gerdau Corsa S.A.P.I. de C.V. Joint-venture Financing Agreements 4,905,367 Oct/24 2,157,290 2,242,865 1,784,868 Gerdau Summit Aços Fundidos e Forjados S.A. Joint-venture Financing Agreements 130,164 Aug/25 — 30,125 37,285 Gerdau Metaldom S.A. e Gerdau Corsa S.A.P.I. de C.V Joint-venture Financing Agreements 274,560 Feb/20 — — 241,842 c) 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. d) Key Management compensation The expense recognized related to key management salaries, variable compensation and benefits was R$61,747 for the year ended on December 31, 2021 (R$33,773 and R$13,963 for the years ended on December 31, 2020 and 2019, respectively). Contributions to management’s defined contribution pension plans totaled R$1,932 for the year ended on December 31, 2021 (R$1,416 and R$1,687 for the years ended on December 31, 2020 and 2019, respectively). 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$19,637 for the year ended on December 31, 2021 (R$19,328 and R$17,606 for the years ended on December 31, 2020 and 2019, respectively). The cost of social charges, related to the management of the Company, totaled R$ 23,266 for the year ended on December 31, 2021 (R$ 27,830 and R$15,247 for the years ended on December 31, 2020 and 2019, respectively). At the end of the year, quantity of Restricted and Performance Shares with the key management were: 2021 2020 2019 Available at beginning of the year 6,456,248 6,717,872 6,375,547 Granted 709,990 733,218 1,083,116 Exercised (3,453,802) (937,325) (627,076) Cancelled — (64,112) (38,553) Others — 6,595 (75,162) Available at the end of the year 3,712,436 6,456,248 6,717,872 Additional information on the long-term incentive plan are presented in Note 26. e) Other information from related parties The Company has contracted a convertible loan into equity interest with the company Brasil ao Cubo Construção modular Ltda., which is presented in the line of Other non-current assets, in the amount of R$ 91,666 on December 31, 2021. Contributions to the assistance entities Fundação Gerdau, Instituto Gerdau and Fundação Ouro Branco, classified as related parties, amounted R$35,595 (R$104,322 on December 31, 2020). The defined benefit pension plans and the post-employment health care benefit plan are related parties of the Company and the details of the balances and contributions are presented in Note 21. |
EMPLOYEE BENEFITS
EMPLOYEE BENEFITS | 12 Months Ended |
Dec. 31, 2021 | |
EMPLOYEE BENEFITS | |
EMPLOYEE BENEFITS | NOTE 21 — EMPLOYEE BENEFITS Total assets and liabilities of all types of employee benefits granted by the Company and its subsidiaries as of December 31, 2021 are as follows: 2021 2020 Plan assets - Defined contribution pension plan 4,942 39,196 Total assets 4,942 39,196 Actuarial liabilities - Defined benefit pension plan 1,083,719 1,441,592 Acturial liabilities - Post-employment health care benefit 318,181 362,944 Retirement and termination benefit liabilities 13,290 56,903 Total liabilities 1,415,190 1,861,439 Current 39 208 Non-current 1,415,151 1,861,231 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 (17,822) 10,392 The accumulated amount recognized in other Comprehensive Income for employee benefits is R$ (920,478) as of December 31, 2021 (R$ (1,173,010) as of December 31, 2020). Defined Benefit Pension Plan The current expenses of the defined benefit pension plans are as follows: 2021 2020 2019 Cost of current service 74,840 69,323 54,518 Interest expense 170,897 191,326 189,544 Return on plan assets (136,933) (156,475) (163,148) Past service cost 7,093 3,967 2,302 Settlement (847) (11,609) (4,712) Interest cost on unrecoverable surplus 4,371 7,413 16,247 Net pension cost 119,421 103,945 94,751 The reconciliations of assets and liabilities of the plans are as follows: 2021 2020 Present value of defined benefit obligation (5,409,065) (5,921,285) Fair value of plan assets 4,647,361 4,652,000 Asset ceiling restrictions on recognition of net funded assets (322,015) (172,307) Net (1,083,719) (1,441,592) Defined benefit obligation (1,083,719) (1,441,592) Changes in plan assets and actuarial liabilities were as follows: 2021 2020 2019 Variation of the plan obligations Obligation at the begining of the year 5,921,285 4,601,965 4,391,251 Cost of service 74,840 69,323 54,518 Interest expense 170,897 191,326 189,544 Payments of the benefits (486,310) (434,650) (309,817) Past service cost 7,093 3,967 2,302 Settlement (228,881) (190,948) (498,493) Acturial remeasurements (457,421) 467,106 546,911 Exchange Variance 407,562 1,213,196 225,749 Obligation at the end of the year 5,409,065 5,921,285 4,601,965 2021 2020 2019 Variation of the plan assets Fair value of the plan assets at the begining of the year 4,652,000 3,656,891 3,568,934 Return of the plan assets 136,933 156,475 163,148 Contributions from sponsors 244,123 224,979 162,650 Settlement (228,034) (179,339) (493,781) Payments of benefits (486,310) (434,650) (309,817) Remeasurement 25,498 334,675 386,767 Exchange Variance 303,151 892,969 178,990 Fair value of plan assets at the end of the year 4,647,361 4,652,000 3,656,891 The fair value of plan assets includes shares of the Company in the amount of R$17,785 as of December 31, 2021 (R$8,745 as of December 31, 2020). Amounts recognized as actuarial gains and losses in the Statement of Comprehensive Income are as follows: 2021 2020 2019 Remeasurements (25,498) (334,675) (386,767) Actuarial Remeasurements (457,421) 467,106 546,911 Restriction recognized in Other Comprehensive Income 178,941 (42,317) (94,198) Remeasurements recognized in Other Comprehensive Income (303,978) 90,114 65,946 The historical actuarial remeasurements are as follows: 2021 2020 2019 2018 2017 Present value of defined benefit obligation (5,409,065) (5,921,285) (4,601,965) (4,391,251) (4,314,592) Fair value of the plan assets 4,647,361 4,652,000 3,656,891 3,568,934 3,456,613 Surplus (Deficit) (761,704) (1,269,285) (945,074) (822,317) (857,979) Experience adjustments on plan liabilities (Gain) (457,421) 467,106 546,911 (370,083) 235,549 Experience adjustments on plan assets (Gain) (25,498) (334,675) (386,767) 253,301 (232,214) 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: 2021 Brazilian Plans American Plans Fixed income 99.2% 50.4% Variable income — 43.0% Others 0.8% 6.6% Total 100.0% 100.0% 2020 Brazilian Plans American Plans Fixed income 99.1% 46.6% Variable income — 47.1% Others 0.9% 6.3% Total 100.0% 100.0% 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 2021 and 2020, respectively: 2021 Brazilian Plan North America Plan Average discount rate 8.82% 2.80% -2.90% Rate of increase in compensation Not applicable 3.00% Mortality table AT-2000 per sex RP-2006 and MP-2021 Mortality table of disabled AT-2000 per sex RP-2006 and MP-2021 Rate of rotation Null Based on age and/or the service 2020 Brazilian Plan North America Plan Average discount rate 6.56% 2.25% - 2.50% Rate of increase in compensation Not applicable 3.00% Mortality table AT-2000 per sex RP-2006 and MP-2020 Mortality table of disabled AT-2000 per sex RP-2006 and MP-2020 Rate of rotation Null 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$162,133 in 2021 (R$133,963 in 2020). 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: 2021 2020 2019 Current service cost 3,458 4,964 3,302 Interest expense 8,239 11,311 10,656 Past service cost (32,434) (660) (2,717) Net cost pension benefit (20,737) 15,615 11,241 The funded status of the post-employment health benefits plans is as follows: 2021 2020 Present value of obligations (318,181) (362,944) Total net liabilities (318,181) (362,944) Changes in plan assets and actuarial liabilities were as follows: 2021 2020 2019 Change in benefit obligation Benefit obligation at beginning of the year 362,944 298,989 272,959 Cost of service 3,458 4,964 3,302 Interest expense 8,239 11,311 10,656 Past service cost (32,434) (660) (2,717) Contributions from participants 2,032 2,349 2,088 Payment of benefits (17,431) (20,870) (15,331) Remeasurements (36,938) (23,533) 11,202 Exchange variations 28,311 90,394 16,830 Benefit obligation at the end of the year 318,181 362,944 298,989 2021 2020 2019 Change in plan assets Contributions from sponsors 24,713 19,150 13,243 Contributions from participants 2,032 2,349 2,088 Payments of benefits (26,745) (21,499) (15,331) Fair value of plan assets at end of the year — — — The historical actuarial gains and losses of the plans are as follows: 2021 2020 2019 2018 2017 Present value of defined benefit obligation (318,181) (362,944) (298,989) (272,959) (316,364) Deficit (318,181) (362,944) (298,989) (272,959) (316,364) Experience adjustments on plan liabilities (36,938) (23,533) 11,202 (40,841) (14,452) The amounts recognized as actuarial gains and losses in other comprehensive income are as follows: 2021 2020 2019 Losses / Gains on actuarial obligation (36,938) (23,533) 11,202 Actuarial losses recognized in Equity (36,938) (23,533) 11,202 The accounting assumptions adopted for post-employment health benefits are as follows: 2021 2020 Average discount rate 2.80% - 2.90% 2.25% - 2.50% Health treatment - rate assumed next year 4.99% - 6.20% 6.10% - 6.50% Health treatment - Assumed rate of decline in the cost to achieve in the years of 2028 to 2041 3.20% - 4.50% 4.00% - 4.40% 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 1,710 (1,327) Effect over benefit plan obligations 32,082 (26,573) 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$13,290 as of December 31, 2021 (R$56,903 as of December 31, 2020). |
ENVIRONMENTAL LIABILITIES
ENVIRONMENTAL LIABILITIES | 12 Months Ended |
Dec. 31, 2021 | |
ENVIRONMENTAL LIABILITIES | |
ENVIRONMENTAL LIABILITIES | NOTE 22 — 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 balances of the provisions are as follows: 2021 2020 Provision for environmental liabilities 575,709 297,094 Current 231,711 125,992 Non-current 343,998 171,102 |
OBLIGATIONS WITH FIDC - INVESTM
OBLIGATIONS WITH FIDC - INVESTMENT FUND IN CREDIT RIGHTS | 12 Months Ended |
Dec. 31, 2021 | |
OBLIGATIONS WITH FIDC - INVESTMENT FUND IN CREDIT RIGHTS | |
OBLIGATIONS WITH FIDC - INVESTMENT FUND IN CREDIT RIGHTS | NOTE 23 — OBLIGATIONS WITH FIDC - INVESTMENT FUND IN CREDIT RIGHTS Part of the assets resulting from the favorable judgments of credits with Eletrobrás mentioned in Note 19 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”). 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 credit’s 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 with the contract subscribed. On April 5, 2021, the Fund decided to sell part of the credit rights and the Company exercised its right of first offer, acquiring such rights at their respective book values, upon payment of R$ 954,916. On December 31, 2021, the Company has the amount of R$45,497 recognized in the account “Obligations with FIDC” in the Current liabilities (R$944,513 and R$42,893 on December 31, 2020, as Current Liabilities and Non-current liabilities, respectively). |
EQUITY
EQUITY | 12 Months Ended |
Dec. 31, 2021 | |
EQUITY. | |
EQUITY | NOTE 24 — 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: 2021 2020 2019 Common shares Preferred shares Common shares Preferred shares Common shares Preferred shares Balance at beginning of the year 571,929,945 1,129,231,487 571,929,945 1,127,010,827 571,929,945 1,124,233,755 Exercise of long-term incentive plan — 4,585,414 — 2,220,660 — 2,777,072 Balance at the end of the year 571,929,945 1,133,816,901 571,929,945 1,129,231,487 571,929,945 1,127,010,827 As of December 31, 2021, 573,627,483 common shares and 1,146,031,245 preferred shares are subscribed and paid up, with a total capital of R$19,249,181 (net of share issuance costs). Ownership of the shares is presented below: Shareholders 2021 Shareholders Common % Pref. % Total % Metalúrgica Gerdau S.A. * 557,898,901 97.3 — — 557,898,901 32.4 Brazilian institutional investors 4,363,438 0.8 232,421,779 20.3 236,785,217 13.8 Foreign institutional investors 1,895,038 0.3 490,810,572 42.8 492,705,610 28.7 Other shareholders 7,772,568 1.4 410,584,550 35.8 418,357,118 24.3 Treasury stock 1,697,538 0.2 12,214,344 1.1 13,911,882 0.8 573,627,483 100.0 1,146,031,245 100.0 1,719,658,728 100.0 Shareholders 2020 Shareholders Common % Pref. % Total % Metalúrgica Gerdau S.A. * 557,898,901 97.3 2,147,800 0.2 560,046,701 32.6 Brazilian institutional investors 3,397,955 0.6 227,262,531 19.8 230,660,486 13.4 Foreign institutional investors 3,142,148 0.5 492,076,396 42.9 495,218,544 28.8 Other shareholders 7,490,941 1.3 407,744,760 35.6 415,235,701 24.1 Treasury stock 1,697,538 0.3 16,799,758 1.5 18,497,296 1.1 573,627,483 100.0 1,146,031,245 100.0 1,719,658,728 100.0 Shareholders 2019 Shareholders Common % Pref. % Total % Metalúrgica Gerdau S.A. * 557,898,901 97.3 69,852,184 6.1 627,751,085 36.5 Brazilian institutional investors 3,068,614 0.5 241,698,143 21.1 244,766,757 14.2 Foreign institutional investors 3,875,655 0.7 427,735,548 37.3 431,611,203 25.1 Other shareholders 7,086,775 1.2 387,724,952 33.8 394,811,727 23.0 Treasury stock 1,697,538 0.3 19,020,418 1.7 20,717,956 1.2 573,627,483 100.0 1,146,031,245 100.0 1,719,658,728 100.0 * Metalurgica Gerdau S.A. is the controlling shareholder and Indac – Ind. e Com. S.A. (holding of Gerdau’s family) is the utltimate controlling shareholder of the Company. Preferred shares do not have voting rights and cannot be redeemed but have the same rights as common shares in the distribution of dividends and priority in the capital distribution in case of liquidation of the Company. b) Treasury stocks Changes in treasury stocks are as follows: 2021 Common shares R$ Preferred shares R$ Opening balance 1,697,538 557 16,799,758 228,752 Exercise of long-term incentive plan — — (4,585,414) (76,900) Closing balance 1,697,538 557 12,214,344 151,852 2020 Common shares R$ Preferred shares R$ Opening balance 1,697,538 557 19,020,418 241,985 Exercise of long-term incentive plan — — (2,220,660) (13,233) Closing balance 1,697,538 557 16,799,758 228,752 2019 Common shares R$ Preferred shares R$ Opening balance 1,697,538 557 21,797,490 279,869 Exercise of long-term incentive plan — — (2,777,072) (37,884) Closing balance 1,697,538 557 19,020,418 241,985 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$12.43 during 2021 (R$13.62 and R$12.72 during the years ended on December 31, 2020 and 2019, respectively). c) Capital reserves — d) Retained earnings I) Legal reserves — II) Tax incentives reserve — III) Investments and working capital reserve — e) Operations with non-controlling interests The effects of interest changes in subsidiaries for the years presented are composed of: December 31, 2021 Attributed to parent Non-controlling company’s interest interests Total (i) Other changes — (18,962) (18,962) Effects of interest changes in subsidiaries — (18,962) (18,962) December 31, 2020 Attributed to parent Non-controlling company’s interest interests Total (i) Other changes — 12,776 12,776 Effects of interest changes in subsidiaries — 12,776 12,776 December 31, 2019 Attributed to parent Non-controlling company’s interest interests Total (i) Other changes — (1,586) (1,586) Effects of interest changes in subsidiaries — (1,586) (1,586) (i) Other changes in subsidiaries without losing control, which may include among others, capital increases, other acquisitions of interests and dilutions of any nature. f) Other reserves g) Dividends and interest on capital 2021 2020 2019 Net income 15,494,111 2,365,763 1,203,736 Constitution of legal reserve (756,334) (109,649) (55,876) Constitution of the tax incentives reserve (367,430) (172,792) (86,216) Net income before dividends and interest on capital 14,370,347 2,083,322 1,061,644 Dividends and interest on capital (5,014,450) (714,487) (356,539) Dividend - adjustment in excess of the minimum estatutory undistributed (341,150) — — Net income before constitution of investments and working capital reserve 9,014,747 1,368,835 705,105 Constitution of investments and working capital reserve (9,014,747) (1,368,835) (705,105) The dividends for the years 2021, 2020 and 2019 are presented below: Dividends and interest on capital in the years Outstanding shares Period Nature R$ /share (thousands) Credit Payment 2021 2020 2019 1 st Dividends 0.40 1,705,338 5/14/2021 5/26/2021 682,199 — 118,803 2 nd Dividends 0.54 1,705,576 8/16/2021 8/26/2021 921,011 — 118,817 3 rd Interest 0.38 1,705,582 9/27/2021 11/16/2021 648,122 — — 3 rd Interest 0.20 1,705,630 11/5/2021 11/16/2021 341,126 — — 3 rd Dividends 1.42 1,705,628 11/5/2021 11/16/2021 2,421,992 204,139 67,951 4 th Dividends 0.20 1,705,747 3/7/2022 3/16/2022 341,150 — 50,968 4 th Interest — 510,348 — Proposed Interest and Dividends 5,355,600 714,487 356,539 Credit per share (R$) 3.14 0.42 0.21 |
EARNINGS (LOSS) PER SHARE (EPS)
EARNINGS (LOSS) PER SHARE (EPS) | 12 Months Ended |
Dec. 31, 2021 | |
EARNINGS (LOSS) PER SHARE (EPS) | |
EARNINGS (LOSS) PER SHARE (EPS) | NOTE 25 — EARNINGS (LOSS) PER SHARE (EPS) The following tables reconcile net income to the amounts used to calculate basic and diluted earnings per share. Basic 2021 Common Preferred Total (in thousands, except share and per share data) Basic numerator Allocated net income available to common and preferred shareholders 5,198,011 10,296,100 15,494,111 Basic denominator Weighted-average outstanding shares, after deducting the average tresuary shares 571,929,945 1,132,865,567 Earnings per share (in R$) — Basic 9.09 9.09 2020 Common Preferred Total (in thousands, except share and per share data) Basic numerator Allocated net income available to common and preferred shareholders 795,617 1,570,146 2,365,763 Basic denominator Weighted-average outstanding shares, after deducting the average tresuary shares 571,929,945 1,128,700,478 Earnings per share (in R$) — Basic 1.39 1.39 2019 Common Preferred Total (in thousands, except share and per share data) Basic numerator Allocated net income available to common and preferred shareholders 405,607 798,129 1,203,736 Basic denominator Weighted-average outstanding shares, after deducting the average tresuary shares 571,929,945 1,125,408,180 Earnings per share (in R$) — Basic 0.71 0.71 Diluted 2021 2020 2019 Diluted numerator Allocated net income available to Common and Preferred shareholders Net income allocated to preferred shareholders 10,296,100 1,570,146 798,129 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 long-term incentive plans of Gerdau. 26,192 5,524 2,884 10,322,292 1,575,670 801,013 Net income allocated to common shareholders 5,198,011 795,617 405,607 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 long-term incentive plans of Gerdau. (26,192) (4,782) (2,884) 5,171,819 790,835 402,723 Diluted denominator Weighted - average number of shares outstanding Common Shares 571,929,945 571,929,945 571,929,945 Preferred Shares Weighted-average number of preferred shares outstanding 1,132,865,567 1,128,700,478 1,125,408,180 Potential increase in number of preferred shares outstanding in respect of long-term incentive plan of Gerdau 8,633,716 10,821,083 12,157,614 Total 1,141,499,283 1,139,521,561 1,137,565,794 Earnings per share — Diluted (Common and Preferred Shares) 9.04 1.38 0.70 |
LONG-TERM INCENTIVE PLANS
LONG-TERM INCENTIVE PLANS | 12 Months Ended |
Dec. 31, 2021 | |
LONG-TERM INCENTIVE PLANS | |
LONG-TERM INCENTIVE PLANS | NOTE 26 — LONG-TERM INCENTIVE PLANS a) Quantity Summary of Restricted Shares and Performance Shares: Balance on January 1, 2019 14,261,501 Granted 2,647,995 Cancelled (2,104,754) Exercised (1,786,335) Balance on December 31, 2019 13,018,407 Granted 3,146,696 Cancelled (1,777,100) Exercised (1,918,669) Balance on December 31, 2020 12,469,334 Granted 2,228,196 Cancelled (1,755,522) Exercised (4,407,441) Balance on December 31, 2021 8,534,567 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. The costs with long-term incentive plans recognized in the income statement on December 31, 2020 were R$ 65,289 (R$ 62,801 and R$ 43,895 on December 31, 2020 and 2019, respectively). As of December 31, 2021, the Company has a total of 12,214,344 preferred shares in treasury and, according to Note 24, these shares may be used for serving this plan. b) Stock Options Plan: 2021 2020 2019 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 — — — — 15,480 16.72 Options Forfeited — — — — (15,480) 16.72 Available at the end of the year — — — — — — |
SEGMENT REPORTING
SEGMENT REPORTING | 12 Months Ended |
Dec. 31, 2021 | |
SEGMENT REPORTING | |
SEGMENT REPORTING | NOTE 27 — SEGMENT REPORTING Business Segments 2021 North America South America Special Steel Eliminations and Brazil Operation Operation Operation Operation Adjustments Consolidated Net sales 34,757,720 27,838,000 6,856,766 10,980,191 (2,087,596) 78,345,081 Cost of sales (22,496,140) (22,416,578) (5,332,853) (9,427,221) 2,145,071 (57,527,721) Gross profit 12,261,580 5,421,422 1,523,913 1,552,970 57,475 20,817,360 Selling, general and administrative expenses (781,942) (639,370) (157,912) (233,348) (293,379) (2,105,951) Other operating income (expenses) 137,649 42,141 27,514 71,287 241,140 519,731 Eletrobras compulsory loan recovery — — — — 1,391,280 1,391,280 Results in operations with subsidiary and joint ventures (note 3.4) — — — — (162,913) (162,913) Impairment of financial assets 7,823 (7,668) (1,073) 1,275 — 357 Equity in earnings of unconsolidated companies — 279,948 268,291 28,831 (13,912) 563,158 Operational income before financial income (expenses) and taxes 11,625,110 5,096,473 1,660,733 1,421,015 1,219,691 21,023,022 Financial result, net (538,341) (156,437) (314,473) (238,249) 497,046 (750,454) Income (Loss) before taxes 11,086,769 4,940,036 1,346,260 1,182,766 1,716,737 20,272,568 Income and social contribution taxes (2,769,495) (1,092,146) (377,286) (287,292) (187,411) (4,713,630) Net income (Loss) 8,317,274 3,847,890 968,974 895,474 1,529,326 15,558,938 Supplemental information: Net sales between segments 1,352,079 70,904 16,297 648,316 — 2,087,596 Depreciation/amortization 1,330,963 627,483 213,001 487,114 — 2,658,561 Investments in associates and joint ventures — 1,871,274 1,071,333 251,668 146,500 3,340,775 Total assets 24,835,717 22,096,314 7,113,706 13,658,147 6,110,729 73,814,613 Total liabilities 8,105,443 4,603,424 2,376,176 2,801,071 13,112,850 30,998,964 Business Segments 2020 North America South America Special Steel Eliminations and Brazil Operation Operation Operation Operation Adjustments Consolidated Net sales 17,752,823 17,458,318 3,831,406 6,096,471 (1,324,357) 43,814,661 Cost of sales (14,179,991) (16,212,757) (3,015,189) (5,794,666) 1,318,501 (37,884,102) Gross profit 3,572,832 1,245,561 816,217 301,805 (5,856) 5,930,559 Selling, general and administrative expenses (562,019) (476,518) (116,479) (179,822) (195,547) (1,530,385) Other operating income (expenses) 31,500 97,751 16,684 55,097 916,667 1,117,699 Impairment of non-financial assets — (342,355) — (69,570) — (411,925) Impairment of financial assets (23,177) (36,286) (2,436) (2,233) — (64,132) Equity in earnings of unconsolidated companies (1,287) 23,512 99,341 8,899 22,104 152,569 Operational income before financial income (expenses) and taxes 3,017,849 511,665 813,327 114,176 737,368 5,194,385 Financial result, net (442,972) (206,405) (60,787) (215,433) (773,110) (1,698,707) Income (Loss) before taxes 2,574,877 305,260 752,540 (101,257) (35,742) 3,495,678 Income and social contribution taxes (652,126) (178,447) (195,440) 13,229 (94,840) (1,107,624) Net income (Loss) 1,922,751 126,813 557,100 (88,028) (130,582) 2,388,054 Supplemental information: Net sales between segments 1,149,618 60,370 41 114,328 — 1,324,357 Depreciation/amortization 1,135,294 777,369 142,143 444,298 — 2,499,104 Investments in associates and joint ventures 10,186 908,338 976,046 231,152 145,907 2,271,629 Total assets 21,099,735 18,583,439 5,448,922 11,233,676 6,757,237 63,123,009 Total liabilities 7,469,541 5,261,820 1,360,098 1,994,575 15,951,765 32,037,799 Business Segments 2019 North America South America Special Steel Eliminations and Brazil Operation Operation Operation Operation Adjustments Consolidated Net sales 16,122,171 14,656,028 3,259,253 6,701,900 (1,095,342) 39,644,010 Cost of sales (14,363,253) (13,351,209) (2,762,157) (6,167,502) 1,203,395 (35,440,726) Gross profit 1,758,918 1,304,819 497,096 534,398 108,053 4,203,284 Selling, general and administrative expenses (539,344) (444,326) (119,627) (170,170) (156,989) (1,430,456) Other operating income (expenses) 295,818 44,660 17,416 35,571 55,734 449,200 Impairment of financial assets (2,012) (14,612) (1,906) (2,513) — (21,044) Equity in earnings of unconsolidated companies (828) (110,959) 66,468 6,776 21,493 (17,050) Operational income before financial income (expenses) and taxes 1,512,552 779,582 459,447 404,062 28,291 3,183,934 Financial result, net (520,821) (99,029) (163,459) (109,116) (616,789) (1,509,214) Income (Loss) before taxes 991,731 680,553 295,988 294,946 (588,498) 1,674,720 Income and social contribution taxes (214,400) (188,458) (100,341) (60,749) 106,115 (457,833) Net income (Loss) 777,331 492,095 195,647 234,197 (482,383) 1,216,887 Supplemental information: Net sales between segments 920,659 62,196 — 112,487 — 1,095,342 Depreciation/amortization 1,008,713 571,015 120,462 374,105 — 2,074,295 Investments in associates and joint ventures 11,472 681,807 748,392 224,201 146,527 1,812,399 Total assets 17,195,824 15,178,053 4,562,604 8,597,180 8,469,309 54,002,970 Total liabilities 4,686,686 4,506,771 996,876 1,604,885 15,034,625 26,829,843 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) Consolidated 2021 2021 2021 2021 Net sales 37,733,918 8,567,310 32,043,853 78,345,081 Total assets 31,740,469 8,959,237 33,114,907 73,814,613 Geographic Area Brazil Latin America (1) North America (2) Consolidated 2020 2020 2020 2020 Net sales 18,798,384 4,996,434 20,019,843 43,814,661 Total assets 28,752,629 7,042,462 27,327,918 63,123,009 Geographic Area Brazil Latin America (1) North America (2) Consolidated 2019 2019 2019 2019 Net sales 17,573,278 4,201,165 17,869,567 39,644,010 Total assets 26,124,159 5,781,527 22,097,284 54,002,970 (1) Does not include operations of Brazil (2) Does not include operations of Mexico |
IMPAIRMENT OF ASSETS
IMPAIRMENT OF ASSETS | 12 Months Ended |
Dec. 31, 2021 | |
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 significant changes in the economy or financial market that result in increased perception of risk or reduction of liquidity and refinancing capacity. 28.1 Other assets Impairment test In 2021 and 2019, no impairment losses were recognized for other long-lived assets. In the fourth quarter of 2020, tests performed on other long-lived assets identified impairment losses in property, plant and equipment in the amount of R$411,925, of which R$69,570 in the Special Steel segment and R$342,355 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). These losses were recorded in the line of Impairment of non-financial assets in the Consolidated Statements of Income. The post-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 2021, 2020 and 2019, no impairment losses were recognized for goodwill. 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 competitive scenario, 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 2021 test were: a) North America: 3 % (3% in December 2020); b) Special Steel: 3 % (3% in December 2020); c) South America: 3 % (3% in December 2020); and d) Brazil: 3 % (3% in December 2020). The post-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 post-tax discount rates used were: a) North America: 9.50% (8.25% in December 2020); b) Special Steel: 10.50% (8.75% in December 2020); c) South America: 15.00 % (11.25% in December 2020); and d) Brazil 11.25%: (9.75% in December 2020). Discounted cash flows are compared to the book value of each segment and result in the recoverable amount that exceeded book value as shown below: a) North America: R$5,769 million (R$6,202 million in 2020); b) Special Steel: R$4,238 million (R$2,509 million in 2020); c) South America: R$2,248 million (R$4,141 million in 2020); and d) Brazil: R$8,994 million (R$13,424 million in 2020). 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 that exceeded book value as shown below: a) North America: R$4,337 million (R$4,589 million in 2020); b) Special Steel: R$3,301 million (R$1,568 million in 2020); c) South America: R$2,057 million (R$3,757 million in 2020); and d) Brazil: R$7,582 million (R$11,348 million in 2020). 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 that exceeded book value as shown below: a) North America: R$4,679 million (R$4,914 million in 2019); b) Special Steel: R$3,545 million (R$1,754 million in 2020); c) South America: R$2,135 million (R$3,867 million in 2020); and d) Brazil: R$7,962 million (R$11,809 million in 2020). 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 significant 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 |
Dec. 31, 2021 | |
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 are as follows: 2021 2020 2019 Depreciation and amortization (2,658,561) (2,499,104) (2,074,295) Labor expenses (7,249,811) (5,867,265) (5,175,373) Raw material and consumption material (43,720,989) (26,945,440) (25,890,618) Freight (3,898,360) (2,572,293) (2,300,439) Other expenses/income, net (1,585,863) (476,818) (1,002,301) Eletrobras compulsory loan recovery 1,391,280 — — Results in operations with subsidiary and joint ventures (162,913) — — Impairment of non-financial assets — (411,925) — (57,885,217) (38,772,845) (36,443,026) Classified as: Cost of sales (57,527,721) (37,884,102) (35,440,726) Selling expenses (715,830) (512,950) (476,339) General and administrative expenses (1,390,121) (1,017,435) (954,117) Other operating income 979,760 1,763,684 636,847 Other operating expenses (460,029) (645,985) (187,647) Eletrobras compulsory loan recovery 1,391,280 — — Results in operations with subsidiary and joint ventures (162,913) — — Impairment of financial assets 357 (64,132) (21,044) Impairment of non-financial assets — (411,925) — (57,885,217) (38,772,845) (36,443,026) |
FINANCIAL INCOME
FINANCIAL INCOME | 12 Months Ended |
Dec. 31, 2021 | |
FINANCIAL INCOME | |
FINANCIAL INCOME | NOTE 30 — FINANCIAL INCOME 2021 2020 2019 Income from short-term investments 182,639 108,057 87,241 Interest income and other financial income 66,385 86,035 135,972 Financial Income 249,024 194,092 223,213 Interest on debt (1,059,841) (1,022,460) (938,120) Monetary variation and other financial expenses (373,246) (426,001) (531,634) Financial Expenses (1,433,087) (1,448,461) (1,469,754) Exchange Variation, net (108,373) (204,291) (247,555) Bonds repurchase expenses (264,687) (239,273) — Tax credits monetary update 788,741 — — Gains and losses on derivative financial instruments, net 17,928 (774) (15,118) Financial result, net (750,454) (1,698,707) (1,509,214) |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING PRACTICES (Policies) | 12 Months Ended |
Dec. 31, 2021 | |
SUMMARY OF SIGNIFICANT ACCOUNTING PRACTICES | |
Basis of Presentation | 2.1 — Basis of Presentation The Company’s Consolidated Financial Statements have been prepared in accordance with and are in compliance with International Financial Reporting Standards (IFRS) issued by International Accounting Standards Board 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 significant 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, 2021. 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 in Earnings of Unconsolidated Companies 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) Translation of financial statements in foreign currency 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 and Argentina Argentina and Venezuela are considered countries with hyperinflation and for this reason, the Financial Statements of the subsidiaries located in these countries are being updated so that their values are shown in the monetary unit of measurement at the end of the year, which considers the effects measured by the inflation rates in these countries. |
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 impairment of financial assets 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 significant 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 impairment loss of financial assets 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 in the Statement of Income in the line of Impairment of financial assets. 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) Offset 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 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 outstanding amounts. 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 on the early termination of the contract. |
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 directly related selling expenses. 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 it carrying amount. 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 period of economic benefit use of the intangible asset to record amortization through the period of use of that intangible 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. Goodwill impairment, after recognized, is not allowed to be reversed, even if circunstances that resulted in the impairment changes. Other assets impairment may be reversed if circunstances that resulted in the impairment no longer exists, but in these circumstances the reversal of impairment is limited to the residual depreciated balance of the asset at the time of the reversal, determined as if the impairment had not been recorded. The Company does not believe there is a reasonable likelihood that a material change in the estimates or assumptions used to calculate long-lived asset impairment losses may occur. 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 expired. 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. The Company recognizes a provision for tax matters only if a past event gives rise to a present obligation. The Company determines whether a present obligation exists at the end of the year considering all available evidence, including, for example, the opinion of legal advisors. The Company also considers whether it is more likely than not that there will be an outflow of assets and whether a reliable estimate can be made. |
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 21 and 26. 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 21. 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 actuary use 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 The bylaws of Gerdau S.A. requires 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 significant 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 19), recoverability of deferred tax assets (Note 8), estimates in selecting interest rates, return on assets, mortality tables and expectations for salary increases (Note 21), and long-term incentive plans through the selection of the evaluation model and rates (Note 26). 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 increases/decreases in interest in subsidiaries, after the Company has obtained control, are treated as acquisitions/reductions 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/reductions and the net amount disbursed/received from the Company's proportional portion is recorded in 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 IFRS, 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, 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 25 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. |
Long-term incentive plans | 2.21 — Long-term incentive plans The Company settles its Long-term incentive plans by delivering its own shares, which are held in treasury until the exercise of the options by the employees. Additionally, the Company granted the following long-term incentive plans: Restricted Shares and Performance Shares, as presented in Note 26. |
Leasing Operations | 2.22 — Leasing Operations The Company, as 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. The Company recognizes new assets and liabilities for its operating leases. The Company recognizes a depreciation of rights of use assets and financial expense on lease obligations. Variable elements of payments related to leases (such as, for example, a lease for machinery and/or equipment with parts of payments based on the productivity of the asset) are not considered in the calculation of the liability, being recorded as operating expense. The discount rates used by the Company were obtained in accordance with market conditions. |
New IFRS and Interpretations of the IFRIC (International Financial Reporting Interpretations Committee) | 2.23 — New IFRS and Interpretations of the IFRIC (International Financial Reporting Interpretations Committee) The issued and/or reviewed IFRS standards made by the IASB that are effective for the year started in 2021 had no impact on the Company's Financial Statements. In addition, the IASB issued/reviewed some IFRS standards, which have mandatory adoption for the year 2022 and/or after, as presented below. - Amendment to IAS 1 - Classification of liabilities as Current or Non-current. It clarifies aspects to be considered for the classification of liabilities as Current Liabilities or Non-current Liabilities. This amendment to the standard is effective for fiscal years beginning on/or after January 1, 2023. The Company does not expect material impacts on its Financial Statements. - Annual improvements in IFRS 2018-2020 standards. It changes the IFRS 1, addressing aspects of first-time adoption in a subsidiary; IFRS 9, addressing the 10% test criterion for reversing financial liabilities; IFRS 16, covering illustrative examples of leasing and IAS 41, covering aspects of measurement at fair value. These changes are effective for fiscal years beginning on/or after January 1, 2022. The Company does not expect material impacts on its Financial Statements. - Amendment to IAS 16 - Property, plant and equipment: Result generated before reaching the expected conditions of use. It clarifies aspects to be considered for the classification of items produced before the asset is in the projected conditions of use. This amendment to the standard is effective for fiscal years beginning on/or after January 1, 2022. The Company does not expect material impacts on its Financial Statements. - Amendment to IAS 37 - Onerous contract: Cost of fulfilling a contract. It clarifies aspects to be considered for the classification of costs related to the fulfillment of an onerous contract. This amendment to the standard is effective for fiscal years beginning on/or after January 1, 2022. The Company does not expect material impacts on its Financial Statements. - Amendment to IFRS 3 - References to conceptual framework. It clarifies conceptual alignments of this standard with the IFRS conceptual framework. This amendment to the standard is effective for fiscal years beginning on/or after January 1, 2022. The Company does not expect material impacts on its Financial Statements. -Amendment to IAS 1 and IFRS Practice Statement 2 – Disclosure of Accounting Policies. It clarifies aspects to be considered in the disclosure of accounting policies. This amendment to the standard is effective for fiscal years beginning on/or after January 1, 2023. The Company does not expect material impacts on its Financial Statements. -Amendment to IAS 8 – Definition of Accounting Estimates. It clarifies aspects to be considered in the definition of accounting estimates. This amendment to the standard is effective for fiscal years beginning on/or after January 1, 2023. The Company does not expect material impacts on its Financial Statements. - Amendment to IFRS 16 - Leases. It clarifies aspects to be considered in rent concessions that have a direct relation with Covid-19 pandemic. This amendment to the standard is effective for fiscal years beginning on/or after April 1, 2021. The Company does not expect material impacts on its Financial Statements. - Amendment to IAS 12 – Deferred Tax related to Assets and Liabilities arising from a Single Transaction. It clarifies aspects to be considered when recognizing deferred tax assets and liabilities related to taxable temporary differences and deductible temporary differences. This amendment to the standard is effective for fiscal years beginning on/or after January 1, 2023. The Company does not expect material impacts on its Financial Statements. |
Risk of disease outbreaks and health pandemic: Covid-19 | 2.24 - Risk of disease outbreaks and health pandemic: Covid-19 The Covid-19 pandemic continues to impact global economic activity and represents the risk that the Company, employees, service providers, suppliers, customers and other business partners may be prevented from carrying out certain business activities for an indefinite period, including due to stoppages that can be requested or mandated by government authorities or elected by companies as a preventive measure. The Covid-19 pandemic may have an adverse effect on business and, given the uncertainty as to the extent and timing of a possible spread or its future mitigation and the imposition or relaxation of protective measures, it is not possible to reasonably estimate the impact on future results of operations, cash flows or the future financial condition of the Company. The demand for steel products is directly linked to the general economic activity in the international markets where the Company sells these products. A decline in the level of activity in the domestic or international markets in which the Company operates, as a consequence of the Covid-19 pandemic and measures to contain it, may adversely affect the demand and the price of these products and have a significant effect. The Company is following all Covid-19 prevention guidelines issued by the competent health agencies in the countries in which it operates. For this reason, the Company has adopted a series of measures to mitigate the risk of transmission in the workplace, such as using home office, creating crisis committees, canceling national and international trips and participation in external events. The Company also reinforces that the health and safety of people are non-negotiable values. The Company has monitored the evolution of the pandemic scenario and the impacts that this situation brings to the routines of employees, their families and, also, to the business. The nature of our business is complex and, in order to continue operating, much of our work cannot be done remotely. Therefore, our focus is to reduce the risk of the virus spreading through our operations, as operational continuity is essential for jobs, for neighboring communities and for the economies of the countries and regions where we operate. Our mills and offices, therefore, have contingency plans to deal with the ongoing impact of the pandemic, which will continue to be reviewed as the situation evolves. 2.24.1 Main associated risks a) Risk of impairment losses - Goodwill and Other Long-lived Assets The recoverability of goodwill and other long-lived assets is assessed based on the analysis and identification of facts or circumstances that may cause the need to perform the recoverability test. The Company carried out impairment tests on goodwill and other long-lived assets, which results are presented in Note 28. b) Liquidity risk and the Company's ability to meet its financial obligations The long-term portion of loans and financing (Note 15) and debentures (Note 16) has its most significant maturities as from 2026. In addition, the Company's management constantly monitors liquidity risk through the management of its cash and cash equivalents and financial investments (Note 4) and the availability of credit lines and guaranteed accounts that allow it to manage its level of indebtedness (Note 15). c) Risk of losses due to the non-recoverability of financial assets The losses due to the non-recoverability of financial assets were 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 debts and the assessment of management with input from legal advisors, and is considered sufficient to cover possible losses on the amounts receivable, in addition to a prospective assessment that takes into account the change or expected change in economic factors that affect expected credit losses, which are determined based on in weighted and measured probabilities in an amount equal to the expected credit loss for life. The maximum exposure to the Company's credit risk, net of losses due to the non-recoverability of financial assets, is the value of accounts receivable. The credit quality of accounts receivable falling due is considered adequate, and the amount of the effective risk of possible losses in accounts receivable from customers is presented as losses due to the non-recoverability of financial assets. The Company will continue, throughout 2022, our constant monitoring of the market in order to identify any deterioration, especially as a result of the Covid-19 pandemic, a significant drop in demand from the steel consuming sectors (notably automotive and construction), significant changes in the economy or financial market that lead to an increase in the perception of credit risk on accounts receivable from customers. Eventual changes that deteriorate the economic and business environment, if manifested at a greater intensity than anticipated in the scenarios contemplated by Management, may result in losses due to the non-recoverability of financial assets, notably accounts receivable from customers. d) Risk of losses based on the net realizable value in inventories Inventories are valued based on the lowest value between the historical cost of acquisition and production and the net realizable value. The acquisition and production cost is increased by expenses related to transport, storage and non-recoverable taxes. The net realizable value is the estimated sale price in the normal course of business, less estimated costs for completion and directly related selling expenses. Information regarding the breakdown of the net realizable value is shown in Note 6. The Company used the estimated sale price in the normal course of business as a premise of the net realizable value, therefore, a decline in the level of activity in the domestic or international markets in which the Company operates. e) Risk on recoverability analysis of deferred tax assets In December 2021, the Company prepared analysis on the recoverability of deferred tax balances related to tax losses and negative social contribution base, which were approved by the Board of Directors and are based on its business plans and in line with the other projections used by the Company as, for example, in asset impairment tests. Eventual changes that deteriorate the economic and business environment, especially as a result of the Covid-19 pandemic, if manifested in a greater intensity than anticipated in the scenarios contemplated by the Management, may lead the Company to review its projections and, eventually, may affect the maintenance of deferred tax assets in the Company's Financial Statements. f) Continuity risk The risks arising from disease outbreaks and health epidemics, notably those arising from the Covid-19 pandemic, can contribute significantly to the deterioration of economic conditions in Brazil and globally and could, among other consequences, (i) negatively impact further global demand for steel or even lower market prices for products, which may result in a continued reduction in the Company's sales, operating income and cash flows; (ii) making it more difficult or costly to obtain financing for operations or refinance debt in the future; (iii) impair the financial condition of some of the customers and suppliers; and (iv) reduce investment programs. The Company constantly monitors the risks of commodity prices, interest rates and exchange rates, credit risk management and capital management (Note 17.c). The Company believes that it has no evidence of any risk of operational continuity, however, changes that deteriorate the economic and business environment, or significant changes in the economy or financial market that result in increased risk perception or reduced liquidity and capacity to refinancing, if manifested at a greater intensity than anticipated in the scenarios contemplated by Management, may lead the Company to revise its projections and, eventually, may affect the Company's ability to meet its obligations and / or lead to the recognition of impairment of assets. |
CONSOLIDATED FINANCIAL STATEM_2
CONSOLIDATED FINANCIAL STATEMENTS (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
CONSOLIDATED FINANCIAL STATEMENTS | |
Schedule of significant consolidated subsidiaries | Equity Interests Consolidated company Country Total capital (*) 2021 2020 2019 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. Brazil 99.86 99.86 99.83 Gerdau Aços Longos S.A. and subsidiaries (2) Brazil 99.83 99.82 99.82 Gerdau Steel Inc. Canada 100.00 100.00 100.00 Gerdau Holdings Inc. and subsidiary (3) USA 100.00 100.00 100.00 Paraopeba - Fixed-income investment fund (4) (**) Brazil 70.62 89.26 96.96 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 Gerdau GTL México, S.A. de C.V. and subsidiary (5) Mexico 100.00 100.00 100.00 Seiva S.A. - Florestas e Indústrias Brazil 97.73 97.73 97.73 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 (6) Argentina 99.98 99.98 99.98 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 Next S.A. and subsidiaries (7) Brazil 100.00 — — (*) The voting capital is substantially equal to the total capital. The interests reported represent the ownership percentage held directly and indirectly in the subsidiary. (**) The percentage of participation including interest of the parent company Metalúrgica Gerdau S.A. in the investment fund is 73.54% in 2021, 92.58% in 2020 and 98.07% in 2019 . (1) Subsidiaries: Gerdau Ameristeel US Inc., Chaparral Steel Company. (2) Subsidiaries: Gerdau Açominas Overseas Ltd. and Siderúrgica Latino-Americana S.A. (3) Subsidiary: Gerdau MacSteel Inc. (4) Fixed-income investment fund managed by Bank JP Morgan S.A. (5) Subsidiary: GTL Servicios Administrativos México, S.A. de C.V. (6) Subsidiary: Siderco S.A. (7) Subsidiaries: G2L Logística Ltda, G2base Fundações e Contenções Ltda and Gerdau Grafeno Ltda. |
Schedule of interests in joint ventures | Equity Interests Total capital (*) Joint ventures Country 2021 2020 2019 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 75.00 70.00 70.00 Gerdau Metaldom Corp. Dominican Rep. 50.00 50.00 50.00 Gerdau Summit Aços Fundidos e Forjados S.A. Brazil 58.73 58.73 58.73 Diaco S.A. Colombia 49.87 49.87 49.87 Juntos Somos Mais Fidelização S.A. Brazil 27.50 27.50 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 2021 2020 2019 Net income (loss) 959,116 249,158 (21,548) Total comprehensive income (loss) 959,116 249,158 (21,548) |
Schedule of interests in associate companies | Equity interests Total capital (*) Associate company Country 2021 2020 2019 Dona Francisca Energética S.A. Brazil 51.82 51.82 51.82 (*) 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 company 2021 2020 2019 Net income 37,231 42,008 31,249 Total comprehensive income 37,231 42,008 31,249 |
Schedule of fair value assessment of assets and liabilities and total purchase price paid for business combination | The Company concluded the fair value assessment of the assets and liabilities of Silat and the following table summarizes the fair value of such assets and liabilities at the date of business combination: Book Value Acquisition Adjustments Fair value upon acquisition Cash and cash equivalents 33,419 — 33,419 Trade accounts receivable - net 13,190 — 13,190 Inventories 24,160 — 24,160 Other current assets 11,091 — 11,091 Property, plant and equipment 233,541 253,216 486,757 Other non-current assets 34,410 — 34,410 Current liabilities (26,638) — (26,638) Non-current liabilities (359) (86,093) (86,452) Non-controlling interest (5,395) (6,100) (11,495) Assets (Liabilities) 317,419 161,023 478,442 Negative Goodwill — (2,481) (2,481) Net assets 317,419 158,542 475,961 3.6 - Total purchase price considered for the 2020 acquisition Subsidiary acquired 2020 Siderúrgica Latino-Americana S.A. 475,961 Total consideration paid 475,961 Less: Cash and cash equivalents of acquired subsidiary (33,419) 442,542 |
CASH AND CASH EQUIVALENTS, AN_2
CASH AND CASH EQUIVALENTS, AND SHORT AND LONG-TERM INVESTMENTS (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
CASH AND CASH EQUIVALENTS, AND SHORT AND LONG-TERM INVESTMENTS | |
Schedule of cash and cash equivalents and investments | 2021 2020 Cash 14,667 9,060 Banks and immediately available investments 4,145,987 4,608,144 Cash and cash equivalents 4,160,654 4,617,204 Immediately available investments include investments with maturity up to 90 days at the time of acquisition, immediate liquidity and low risk of fair value variation. 2021 2020 Short-term investments 2,626,212 3,041,143 |
TRADE ACCOUNTS RECEIVABLE (Tabl
TRADE ACCOUNTS RECEIVABLE (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
TRADE ACCOUNTS RECEIVABLE. | |
Schedule of trade accounts receivable | 2021 2020 Trade accounts receivable - in Brazil 2,640,011 2,081,740 Trade accounts receivable - exports from Brazil 249,834 26,121 Trade accounts receivable - outside of Brazil 2,632,002 1,766,555 (-) Impairment loss on trade receivables (107,772) (137,146) 5,414,075 3,737,270 |
Schedule of accounts receivable by aging | 2021 2020 Current 4,646,175 3,466,000 Past-due: Up to 30 days 494,866 259,756 From 31 to 60 days 139,415 48,905 From 61 to 90 days 32,245 9,355 From 91 to 180 days 169,959 13,636 From 181 to 360 days 8,220 15,899 Above 360 days 30,967 60,865 (-) Impairment on financial assets (107,772) (137,146) 5,414,075 3,737,270 |
Schedule of the changes in impairment on financial assets | Balance as of January 1, 2019 (158,157) Impairment on financial assets during the year (81,243) Recoveries in the year 60,199 Write-offs 78,635 Exchange variation 2,487 Balance as of December 31, 2019 (98,079) Impairment on financial assets during the year (148,548) Recoveries in the year 84,416 Write-offs 36,210 Exchange variation (11,145) Balance as of December 31, 2020 (137,146) Impairment on financial assets during the year (55,731) Recoveries in the year 56,088 Write-offs 9,892 Loss of control of subsidiary (note 3.4) 23,203 Exchange variation (4,078) Balance as of December 31, 2021 (107,772) |
INVENTORIES (Tables)
INVENTORIES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
INVENTORIES | |
Schedule of inventories | 2021 2020 Finished products 7,209,379 3,894,698 Work in progress 3,453,948 2,045,158 Raw materials 3,994,655 1,934,958 Storeroom supplies 1,061,666 786,401 Imports in transit 1,145,215 514,321 (-) Allowance for adjustments to net realizable value (3,375) (6,119) 16,861,488 9,169,417 |
Schedule of the changes in the allowance for adjustment to net realizable value of inventories | Balance as of January 1, 2019 (13,704) Provision for the year (46,693) Reversal of adjustments to net realizable value 22,028 Exchange rate variation (939) Balance as of December 31, 2019 (39,308) Provision for the year (6,562) Reversal of adjustments to net realizable value 47,259 Exchange rate variation (7,508) Balance as of December 31, 2020 (6,119) Provision for the year (6,331) Reversal of adjustments to net realizable value 9,143 Exchange rate variation (68) Balance as of December 31, 2021 (3,375) |
TAX CREDITS (Tables)
TAX CREDITS (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
TAX CREDITS. | |
Schedule of current and non-current tax credits | 2021 2020 Current ICMS (state VAT) 155,373 297,926 Social security financing 1,456,593 632,927 Financing of social integration program 226,477 171,724 IPI (federal VAT) 67,166 38,174 IVA (value-added tax) 126,281 24,500 Others 51,995 36,061 2,083,885 1,201,312 Non-current ICMS (state VAT) 85,512 64,163 Social security financing 238 441,111 Financing of social integration program and Others 38,850 158,771 124,600 664,045 2,208,485 1,865,357 |
Schedule of estimates of realization of non-current tax credits | 2021 2020 2022 — 584,145 2023 64,426 22,433 2024 40,853 8,054 2025 11,660 49,413 2026 on 7,661 — 124,600 664,045 |
INCOME AND SOCIAL CONTRIBUTIO_2
INCOME AND SOCIAL CONTRIBUTION TAXES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
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 | 2021 2020 2019 Income (loss) before income taxes 20,272,568 3,495,678 1,674,720 Statutory tax rates 34 % 34 % 34 % Income and social contribution taxes at statutory rates (6,892,673) (1,188,531) (569,405) Tax adjustment with respect to: - Difference in tax rates in foreign companies 403,431 530,715 75,428 - Equity in earnings of unconsolidated companies 191,474 51,873 (5,797) - Interest on equity* 406,022 98,739 69 - Interests on tax lawsuits** 551,624 — — - Tax credits and incentives 112,521 31,800 8,852 - Deferred tax assets not recognized / Realization, net 482,497 (587,917) 1,097 - Other permanent differences, net 31,474 (44,303) 31,923 Income and social contribution taxes (4,713,630) (1,107,624) (457,833) Current (4,306,223) (908,051) (240,400) Deferred (407,407) (199,573) (217,433) * 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. This expense is not recognized for the purpose of preparing the financial statements and therefore does not impact net income. ** |
Schedule of breakdown and changes in deferred income and social contribution tax assets and liabilities at statutory tax rates | Balance as of Recognized in Comprehensive Balance as of December 31, 2020 income Others Income December 31, 2021 Tax loss carryforward 1,220,485 (556,480) (24,312) 10,156 649,849 Social contribution tax losses 290,276 (187,814) 20,625 — 123,087 Provision for tax, civil and labor liabilities 385,463 37,256 — 33 422,752 Benefits granted to employees 392,257 (35,812) — (57,828) 298,617 Other temporary differences 501,114 (144,352) — 2,312 359,074 Deferred exchange variance* 1,057,541 511,763 — 7 1,569,311 Provision for losses 35,520 6,576 — (5,832) 36,264 Fair value adjustments on businesses acquired (550,864) (38,544) — (39,213) (628,621) 3,331,792 (407,407) (3,687) (90,365) 2,830,333 Non-current assets 3,393,354 2,929,308 Non-current liabilities (61,562) (98,975) * Corresponds to deferred taxes over foreign exchange gains and loss which certain subsidiaries elected to tax on a cash basis Balance as of Recognized in Acquisition of Comprehensive Balance as of December 31, 2019 income subsidiary Income December 31, 2020 Tax loss carryforward 1,341,464 (157,207) — 36,228 1,220,485 Social contribution tax losses 350,810 (60,534) — — 290,276 Provision for tax, civil and labor liabilities 242,794 140,871 — 1,798 385,463 Benefits granted to employees 294,031 (6,848) — 105,074 392,257 Other temporary differences 575,719 (114,627) — 40,022 501,114 Deferred exchange variance* 1,177,428 (119,178) — (709) 1,057,541 Provision for losses 23,618 11,740 — 162 35,520 Fair value adjustments on businesses acquired (452,058) 106,210 (86,093) (118,923) (550,864) 3,553,806 (199,573) (86,093) 63,652 3,331,792 Non-current assets 4,071,219 3,393,354 Non-current liabilities (517,413) (61,562) * Corresponds to deferred taxes over foreign exchange gains and loss which certain subsidiaries elected to tax on a cash basis Balance as of Recognized in Comprehensive Balance as of January 1, 2019 income Others Income December 31, 2019 Tax loss carryforward 1,339,933 4,781 (36,226) 32,976 1,341,464 Social contribution tax losses 337,258 13,552 — — 350,810 Provision for tax, civil and labor liabilities 270,417 (27,848) — 225 242,794 Benefits granted to employees 286,494 (29,739) — 37,276 294,031 Other temporary differences 525,818 73,067 — (23,166) 575,719 Deferred exchange variance* 1,284,377 (106,640) — (309) 1,177,428 Provision for losses 83,837 (75,142) — 14,923 23,618 Fair value adjustments on businesses acquired (372,448) (69,464) — (10,146) (452,058) 3,755,686 (217,433) (36,226) 51,779 3,553,806 Non-current assets 3,874,054 4,071,219 Non-current liabilities (118,368) (517,413) * Corresponds to deferred taxes over foreign exchange gains and loss which certain subsidiaries elected to tax on a cash basis |
INVESTMENTS IN ASSOCIATES AND_2
INVESTMENTS IN ASSOCIATES AND JOINT VENTURES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
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, 2019 301,272 701,233 213,899 151,398 1,367,802 Equity in earnings (111,637) 66,468 6,779 21,340 (17,050) Other comprehensive income 28,182 21,282 3,523 2,051 55,038 Capital increase 463,990 — — 7,000 470,990 Capital reduction — (20,344) (20,344) Dividends/Interest on equity — (20,247) — (23,790) (44,037) Balance as of December 31, 2019 681,807 748,392 224,201 157,999 1,812,399 Equity in earnings 23,494 99,913 8,900 20,262 152,569 Other comprehensive income 165,479 195,286 (1,949) — 358,816 Capital increase 42,782 - — — 42,782 Dividends/Interest on equity (5,223) (67,546) — (22,168) (94,937) Balance as of December 31, 2020 908,339 976,045 231,152 156,093 2,271,629 Equity in earnings 279,948 268,291 28,831 (13,912) 563,158 Other comprehensive income 173,934 52,278 710 (1,415) 225,507 Capital increase — — — 27,500 27,500 Capital decrease — (141,095) — — (141,095) Results in operations with subsidiary and joint ventures (note 3.4) 511,514 — — — 511,514 Dividends/Interest on equity (2,460) (84,186) (9,025) (21,767) (117,438) Balance as of December 31, 2021 1,871,275 1,071,333 251,668 146,499 3,340,775 |
PROPERTY, PLANT AND EQUIPMENT (
PROPERTY, PLANT AND EQUIPMENT (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
PROPERTY, PLANT AND EQUIPMENT. | |
Summary of changes in property, plant and equipment | Property, plant and Land and Machines, equipment, Data electronic equipment under Cost of the property, plant, and equipment buildings and installations equipment construction Other Total Balances as of January 1, 2019 8,700,749 29,608,998 753,078 1,021,247 988,114 41,072,186 Additions 28,449 76,756 13,955 1,506,343 121,097 1,746,600 Capitalized interest — — — 24,676 — 24,676 Transfers 115,452 884,161 24,037 (1,038,693) 15,043 — Disposals (54,699) (165,139) (1,890) (40,314) (105,643) (367,685) Foreign exchange effect 122,992 626,432 13,369 42,470 10,797 816,060 Balances as of December 31, 2019 8,912,943 31,031,208 802,549 1,515,729 1,029,408 43,291,837 Additions 50,848 98,372 9,765 1,369,947 121,846 1,650,778 Capitalized interest — — — 24,622 — 24,622 Transfers 207,551 695,512 13,653 (939,231) 22,515 — Disposals (226,920) (505,580) (11,487) — (144,153) (888,140) Business Combination 275,076 173,453 29 36,563 1,636 486,757 Impairment of non-financial assets (198,196) (213,729) — — — (411,925) Foreign exchange effect 918,554 3,621,233 107,634 246,575 47,285 4,941,281 Balances as of December 31, 2020 9,939,856 34,900,469 922,143 2,254,205 1,078,537 49,095,210 Additions 20,661 159,387 21,595 2,649,417 174,963 3,026,023 Capitalized interest — — — 32,876 — 32,876 Transfers 224,789 1,125,706 48,827 (1,405,597) 6,275 — Disposals (41,475) (383,593) (2,982) (19,462) (87,574) (535,086) Loss of control of subsidiary (note 3.4) (168,222) (414,955) (2,545) (7,143) (5,367) (598,232) Foreign exchange effect 245,005 1,476,437 32,978 116,633 18,088 1,889,141 Balances as of December 31, 2021 10,220,614 36,863,451 1,020,016 3,620,929 1,184,922 52,909,932 Property, plant and Land and Machines, equipment, Data electronic equipment under Accumulated depreciation buildings and installations equipment construction Other Total Balances as of January 1, 2019 (4,181,805) (20,366,821) (686,946) — (290,133) (25,525,705) Depreciation (295,615) (1,136,040) (33,143) — (112,384) (1,577,182) Transfers — (20) — — 20 — Disposals 38,826 145,019 1,818 — 105,272 290,935 Foreign exchange effect (74,868) (483,549) (12,151) — (7,824) (578,392) Balances as of December 31, 2019 (4,513,462) (21,841,411) (730,422) — (305,049) (27,390,344) Depreciation (413,252) (1,354,559) (37,616) — (100,210) (1,905,637) Disposals 223,174 497,434 11,169 — 128,833 860,610 Foreign exchange effect (440,999) (2,835,685) (100,806) — (29,434) (3,406,924) Balances as of December 31, 2020 (5,144,539) (25,534,221) (857,675) — (305,860) (31,842,295) Depreciation (383,122) (1,468,513) (41,973) — (163,803) (2,057,411) Transfers 6,693 (1,201) — — (5,492) — Disposals 23,046 369,173 2,981 — 86,064 481,264 Loss of control of subsidiary (note 3.4) 84,286 332,312 2,542 — 3,462 422,602 Foreign exchange effect (126,758) (1,006,607) (28,879) — (10,062) (1,172,306) Balances as of December 31, 2021 (5,540,394) (27,309,057) (923,004) — (395,691) (34,168,146) Net property, plant and equipment Balances as of December 31, 2019 4,399,481 9,189,797 72,127 1,515,729 724,359 15,901,493 Balances as of December 31, 2020 4,795,317 9,366,248 64,468 2,254,205 772,677 17,252,915 Balances as of December 31, 2021 4,680,220 9,554,394 97,012 3,620,929 789,231 18,741,786 |
Summary of useful lives of property, plant and equipment | Useful lives of property, plant and equipment Buildings 10 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 |
Dec. 31, 2021 | |
GOODWILL. | |
Summary of changes in goodwill | Accumulated Goodwill after Goodwill impairment losses Impairment losses Balance as of January 1, 2019 16,783,958 (7,671,568) 9,112,390 (+/-) Foreign exchange effect 661,247 (304,326) 356,921 Balance as of December 31, 2019 17,445,205 (7,975,894) 9,469,311 (+/-) Foreign exchange effect 4,976,383 (2,342,175) 2,634,208 Balance as of December 31, 2020 22,421,588 (10,318,069) 12,103,519 (+/-) Foreign exchange effect 1,469,190 (595,284) 873,906 Results in operations with subsidiary and joint ventures (note 3.4) (549,898) — (549,898) Balance as of December 31, 2021 23,340,880 (10,913,353) 12,427,527 |
Schedule of goodwill by segment | 2021 2020 2019 Brazil 373,135 373,135 373,135 Special Steel 4,111,619 3,828,841 2,969,752 North America 7,942,773 7,901,543 6,126,424 12,427,527 12,103,519 9,469,311 |
INTANGIBLE ASSETS (Tables)
INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
INTANGIBLE ASSETS | |
Summary of intangible assets | Customer Supplier Software contracts and relationships development relationships Others Total Balance as of January 01, 2019 26,719 415,640 387,299 6,438 836,096 Foreign exchange effect — 6,137 12,586 472 19,195 Acquisition — 100,313 — — 100,313 Amortization (5,304) (157,278) (116,462) (3,298) (282,342) Balance as of December 31, 2019 21,415 364,812 283,423 3,612 673,262 Foreign exchange effect — 42,890 83,806 1,074 127,770 Acquisition — 154,250 — — 154,250 Amortization (4,637) (188,083) (136,525) (3,459) (332,704) Balance as of December 31, 2020 16,778 373,869 230,704 1,227 622,578 Foreign exchange effect — 17,609 13,247 33 30,889 Acquisition — 166,310 — — 166,310 Amortization (4,055) (177,674) (127,028) (1,260) (310,017) Balance as of December 31, 2021 12,723 380,114 116,923 — 509,760 Estimated useful lives 5 to 20 years up to 5 years 5 to 20 years 5 years |
Summary of intangible assets by segment | 2021 2020 2019 Brazil 207,053 220,303 238,243 Special Steel 130,719 156,557 132,934 South America 1,039 1,534 1,729 North America 170,949 244,184 300,356 509,760 622,578 673,262 |
LEASING (Tables)
LEASING (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
LEASING | |
Summary of changes in the Right-of-use assets | Machines, equipment, Data electronic Right-of-use Cost Land and buildings and installations equipment Others Total Balances as of January 1, 2019 243,250 436,401 106,787 49,930 836,368 Additions 14,062 117,653 742 11,064 143,521 Disposals (10,493) (22,993) (162) (1,907) (35,555) Remeasurements 33,322 (2,346) — 1,236 32,212 Foreign exchange effect 3,853 4,571 46 2,119 10,589 Balances as of December 31, 2019 283,994 533,286 107,413 62,442 987,135 Additions 5,670 185,116 175 43,862 234,823 Disposals (14,583) (14,846) — (1,176) (30,605) Remeasurements 111 (3,035) 12,548 69 9,693 Foreign exchange effect 26,748 37,809 340 15,747 80,644 Balances as of December 31, 2020 301,940 738,330 120,476 120,944 1,281,690 Additions 48,504 135,652 291 36,599 221,046 Disposals (5,621) (109,947) (151) (22,066) (137,785) Remeasurements 40,024 55,866 6,456 4,045 106,391 Loss of control of subsidiary (note 3.4) — (2,894) (302) — (3,196) Foreign exchange effect 8,152 13,828 111 8,599 30,690 Balances as of December 31, 2021 392,999 830,835 126,881 148,121 1,498,836 Machines, equipment, Data electronic Accumulated depreciation Land and buildings and installations equipment Others Total Balances as of January 1, 2019 — — — — — Depreciation (50,080) (127,399) (15,419) (21,873) (214,771) Disposals 1,330 4,250 32 976 6,588 Foreign exchange effect (733) (128) (9) (768) (1,638) Balances as of December 31, 2019 (49,483) (123,277) (15,396) (21,665) (209,821) Depreciation (51,451) (166,741) (15,459) (27,110) (260,761) Disposals 8,601 13,453 — 1,027 23,081 Foreign exchange effect (5,286) (8,091) (70) (5,431) (18,878) Balances as of December 31, 2020 (97,619) (284,656) (30,925) (53,179) (466,379) Depreciation (59,284) (186,300) (13,800) (31,750) (291,134) Disposals 3,668 108,532 97 21,334 133,631 Loss of control of subsidiary (note 3.4) — 1,860 230 — 2,090 Foreign exchange effect (3,574) (7,889) (45) (3,792) (15,300) Balances as of December 31, 2021 (156,809) (368,453) (44,443) (67,387) (637,092) Right-of-use Assets Balances as of December 31, 2019 234,511 410,009 92,017 40,777 777,314 Balances as of December 31, 2020 204,321 453,674 89,551 67,765 815,311 Balances as of December 31, 2021 236,190 462,382 82,438 80,734 861,744 |
Schedule of leasing payables | 2021 2020 2021 — 231,703 2022 275,086 193,314 2023 211,576 140,019 2024 127,718 90,812 2025 88,682 65,561 2026 on 215,303 135,065 918,365 856,474 Leasing payable Current 275,086 231,703 Non-current 643,279 624,771 Financial expense for the years ended on December 31, 2021 and 2020 68,789 61,727 |
TRADE ACCOUNTS PAYABLE (Tables)
TRADE ACCOUNTS PAYABLE (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
TRADE ACCOUNTS PAYABLE | |
Schedule of trade accounts payable | 2021 2020 Trade accounts payable - domestic market 5,230,270 3,941,924 Trade accounts payable - debtor risk 807,915 726,045 Trade accounts payable - intercompany 47,597 8,958 Trade accounts payable - imports 1,931,358 761,026 8,017,140 5,437,953 |
SHORT-TERM DEBT AND LONG-TERM_2
SHORT-TERM DEBT AND LONG-TERM DEBT (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
SHORT-TERM DEBT AND LONG-TERM DEBT | |
Schedule of loans and financing | 2021 2020 Working capital 480,905 1,178,557 Financing of property, plant and equipment and others 102,232 333,797 Ten/Thirty Year Bonds 10,526,649 13,100,580 Total Loans and Financing 11,109,786 14,612,934 Current 234,537 1,424,043 Non-current 10,875,249 13,188,891 Principal amount of loans and Financing 10,952,983 14,413,188 Interest accrued of loans and Financing 156,803 199,746 Total 11,109,786 14,612,934 (*) Weighted average effective interest costs on December 31, 2021, which represents total of 5.76%. |
Schedule of loans and financing by currency | 2021 2020 Brazilian Real (BRL) 461,187 1,245,988 U.S. Dollar (USD) 10,535,532 13,366,946 Other currencies 113,067 — 11,109,786 14,612,934 |
Schedule of amortization of long term loans and financing | 2021 2020 2022 — 5,210 2023 1,115,211 2,108,324 2024 878,044 1,813,225 2025 405,788 682,422 2026 on 8,476,206 8,579,710 10,875,249 13,188,891 |
DEBENTURES (Tables)
DEBENTURES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
DEBENTURES. | |
Schedule of debentures | General Quantity as of December 31, 2021 Issuance Meeting Issued Held in treasury Maturity 2021 2020 14th August 26, 2014 20,000 20,000 August 30, 2024 — — 15th November 09, 2018 1,500,000 — November 21, 2022 1,513,958 1,500,985 16th - A April 25, 2019 600,000 — May 6, 2023 607,031 600,759 16th - B April 25, 2019 800,000 — May 6, 2026 808,918 800,673 Total Consolidated 2,929,907 2,902,417 Current 1,531,956 7,463 Non-current 1,397,951 2,894,954 |
Schedule of amortization of long term debentures | 2021 2020 2022 — 1,497,760 2023 599,390 598,960 2026 798,561 798,234 1,397,951 2,894,954 |
FINANCIAL INSTRUMENTS (Tables)
FINANCIAL INSTRUMENTS (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
FINANCIAL INSTRUMENTS | |
Summary of fair value of financial instruments | 2021 2020 Book Fair Book Fair value value value value Assets Short-term investments 2,626,212 2,626,212 3,041,143 3,041,143 Related parties 2,678 2,678 134,354 134,354 Fair value of derivatives 3,246 3,246 — — Other current assets 679,193 679,193 591,523 591,523 Other non-current assets 571,637 571,637 590,864 590,864 Liabilities Loans and Financing 11,109,786 12,630,940 14,612,934 17,014,948 Debentures 2,929,907 2,911,424 2,902,417 2,775,619 Related parties 24,648 24,648 22,855 22,855 Fair value of derivatives — — 971 971 Obligations with FIDC (current liabilities) 45,497 45,497 944,513 944,513 Other current liabilities 1,090,396 1,090,396 797,082 797,082 Obligations with FIDC (non-current liabilities) — — 42,893 42,893 Other non-current liabilities 421,873 421,873 514,886 514,886 |
Summary of capital management risk | Net debt/EBITDA From 1.0 to 1.5 times Gross debt limit R$ 12 billion Average maturity more than 6 years |
Schedule of maturity of long-term loans and financing, and debentures | 2021 Contractual obligations Total Less than 1 year 1-3 years 4-5 years More than 5 years Trade accounts payable 8,017,140 8,017,140 — — — Loans and financing 17,885,671 851,225 2,227,608 2,308,361 12,498,477 Debentures 3,492,689 1,802,373 780,537 111,218 798,561 Related parties 24,648 — — — 24,648 Obligations with FIDC 45,497 45,497 — — — Other current liabilities 1,090,396 1,090,396 — — — Other non-current liabilities 421,873 — 35,406 — 386,467 30,977,914 11,806,631 3,043,551 2,419,579 13,708,153 2020 Contractual obligations Total Less than 1 year 1-3 years 4-5 years More than 5 years Trade accounts payable 5,437,953 5,437,953 — — — Loans and financing 21,962,204 2,131,402 3,465,577 3,531,312 12,833,913 Debentures 3,077,960 66,145 2,174,184 32,604 805,027 Related parties 22,855 — — — 22,855 Obligations with FIDC 987,406 944,513 42,893 — — Other current liabilities 797,082 797,082 — — — Other non-current liabilities 514,886 — 41,805 — 473,081 32,800,346 9,377,095 5,724,459 3,563,916 14,134,876 |
Schedule of sensitivity analysis of financial instrument | Assumptions Percentage of change 2021 2020 Foreign currency sensitivity analysis 5% 19,036 15,057 Interest rate sensitivity analysis 10 bps 55,964 85,147 Sensitivity analysis of changes in prices of products sold 1% 783,451 438,147 Sensitivity analysis of changes in raw material and commodity prices 1% 437,210 269,454 Currency forward contracts 5% — 3,703 Commodity contracts 5% 4,892 — |
Schedule of financial instruments per category | Financial asset at fair 2021 Financial asset at value through proft or Assets amortized cost loss Total Short-term investments — 2,626,212 2,626,212 Fair value of derivatives 3,246 — 3,246 Related parties 2,678 — 2,678 Other current assets 679,193 — 679,193 Other non-current assets 479,971 91,666 571,637 Total 1,165,088 2,717,878 3,882,966 Financial income (expenses) 1,226,743 210,988 1,437,731 Financial liability at fair value through profit or Financial liability at Liabilities loss amortized cost Total Loans and financing — 11,109,786 11,109,786 Debentures — 2,929,907 2,929,907 Related parties — 24,648 24,648 Obligations with FIDC (current liabilities) — 45,497 45,497 Other current liabilities — 1,090,396 1,090,396 Other non-current liabilities — 421,873 421,873 Total — 15,622,107 15,622,107 Financial income (expenses) (10,421) (2,177,764) (2,188,185) Financial asset at fair 2020 Financial asset at value through proft or Assets amortized cost loss Total Short-term investments — 3,041,143 3,041,143 Related parties 134,354 — 134,354 Other current assets 591,523 — 591,523 Other non-current assets 530,864 60,000 590,864 Total 1,256,741 3,101,143 4,357,884 Financial income (expenses) 487,631 109,396 597,027 Financial liability at fair value through profit or Financial liability at Liabilities loss amortized cost Total Loans and financing — 14,612,934 14,612,934 Debentures — 2,902,417 2,902,417 Related parties — 22,855 22,855 Obligations with FIDC (current liabilities) — 944,513 944,513 Other current liabilities — 797,082 797,082 Obligations with FIDC (non-current liabilities) — 42,893 42,893 Other non-current liabilities — 514,886 514,886 Fair value of derivatives 971 — 971 Total 971 19,837,580 19,838,551 Financial income (expenses) (1,632) (2,294,102) (2,295,734) |
Summary of derivative instruments | Notional value Amount receivable Amount payable Contracts Position 2021 2020 2021 2020 2021 2020 Swap of interest rate Maturity in 2022 buyed in US$ US$ 5.3 milion US$ 9.9 milion 3,246 — — (971) Total fair value of financial instruments 3,246 — — (971) |
Summary of effectiveness testing of derivative financial instruments | Fair value of derivatives 2021 2020 Current assets 3,246 — 3,246 — Fair value of derivatives Current liabilities — 971 — 971 2021 2020 Net Income Gains on financial instruments 28,349 858 Losses on financial instruments (10,421) (1,632) 17,928 (774) Other comprehensive income Gains (Losses) on financial instruments 1,907 (1,972) 1,907 (1,972) |
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 Markets for Similar Assets Balance per financial statements (Level 2) 2021 2020 2021 2020 Current assets Short-term investments 2,626,212 3,041,143 2,626,212 3,041,143 Fair value of derivatives 3,246 — 3,246 — Other current assets 679,193 591,523 679,193 591,523 Non-current assets Related parties 2,678 134,354 2,678 134,354 Other non-current assets 571,637 590,864 571,637 590,864 3,882,966 4,357,884 3,882,966 4,357,884 Current liabilities Short-term debt 234,537 1,424,043 234,537 1,424,043 Debentures 1,531,956 7,463 1,531,956 7,463 Fair value of derivatives — 971 — 971 Obligations with FIDC 45,497 944,513 45,497 944,513 Other current liabilities 1,090,396 797,082 1,090,396 797,082 Non-current liabilities Long-term debt 10,875,249 13,188,891 10,875,249 13,188,891 Debentures 1,397,951 2,894,954 1,397,951 2,894,954 Related parties 24,648 22,855 24,648 22,855 Obligations with FIDC — 42,893 — 42,893 Other non-current liabilities 421,873 514,886 421,873 514,886 15,622,107 19,838,551 15,622,107 19,838,551 |
Summary of changes in liabilities of cash flow from financing activities | Cash transactions Non cash transactions Interest expense on loans and Interest on Balances as of Proceeds/(Repayment) Interest paid on loans with related Exchange variation Balances as of January 01, 2019 from financing activities loans and financing parties and others December 31, 2019 Related parties, net (26,589) (64,089) — (4,767) — (95,445) Leasing payable 836,368 (161,824) (83,620) 83,620 129,725 804,269 Debt, Debentures and Losses/Gains on financial instruments, net - Derivative instruments 14,878,542 700,490 (945,027) 938,120 474,896 16,047,021 Cash transactions Non cash transactions Interest expense on loans and Interest on Balances as of Proceeds/(Repayment) Interest paid on loans with related Exchange variation Balances as of December 31, 2019 from financing activities loans and financing parties and others December 31, 2020 Related parties, net (95,445) (7,777) — (8,277) — (111,499) Leasing payable 804,269 (247,914) (61,727) 61,727 300,119 856,474 Debt, Debentures and Losses/Gains on financial instruments, net - Derivative instruments 16,047,021 (1,963,283) (1,079,981) 1,022,460 3,490,105 17,516,322 Cash transactions Non cash transactions Interest expense on loans and Interest on Balances as of Proceeds/(Repayment) Interest paid on loans with related Exchange variation Balances as of December 31, 2020 from financing activities loans and financing parties and others December 31, 2021 Related parties, net (111,499) 139,556 — (6,089) 2 21,970 Leasing payable 856,474 (275,944) (68,699) 68,699 337,835 918,365 Debt, Debentures and Losses/Gains on financial instruments, net - Derivative instruments 17,516,322 (4,506,918) (1,100,826) 1,059,841 1,068,028 14,036,447 |
TAXES PAYABLE (Tables)
TAXES PAYABLE (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
TAXES PAYABLE | |
Schedule of taxes payable | 2021 2020 Payroll charges 136,428 100,301 ICMS (state VAT) 92,320 99,430 COFINS (tax on revenue) 26,139 51,444 IPI (federal VAT) 41,474 38,153 IVA (value-added tax) and others 251,812 310,761 548,173 600,089 |
TAX, CIVIL AND LABOR CLAIMS A_2
TAX, CIVIL AND LABOR CLAIMS AND CONTINGENT ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
TAX, CIVIL AND LABOR CLAIMS AND CONTINGENT ASSETS | |
Schedule of provisions for tax, civil and labor claims | 2021 2020 a) Tax provisions 1,270,473 706,104 b) Labor provisions 435,803 428,821 c) Civil provisions 34,750 37,586 1,741,026 1,172,511 |
Schedule of changes in the tax, labor and civil provisions | 2021 2020 2019 Balance at the beginning of the year 1,172,511 809,299 770,305 (+) Additions 801,412 559,513 249,868 (+) Interests 42,435 104,473 70,788 (-) Reversal of accrued amounts (276,251) (304,678) (282,239) (+) Foreign exchange effect on provisions in foreign currency 919 3,904 577 Balance at the end of the year 1,741,026 1,172,511 809,299 |
Schedule of judicial deposits related to tax, labor and civil lawsuits | 2021 2020 Tax 1,449,699 1,597,995 Labor 73,709 95,234 Civil 135,971 132,562 1,659,379 1,825,791 |
RELATED-PARTY TRANSACTIONS (Tab
RELATED-PARTY TRANSACTIONS (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
RELATED-PARTY TRANSACTIONS | |
Schedule of intercompany loans | Maturity 2021 2020 Assets Joint venture Gerdau Corsa SAPI de C.V. — 117,092 Others Fundação Gerdau December 31, 2022 2,678 17,262 2,678 134,354 Liabilities Joint venture Bradley Steel Processors Inc. August 1, 2022 (24,648) (22,855) (24,648) (22,855) 2021 2020 2019 Net financial income 6,089 8,277 4,767 |
Summary of guarantees granted | Original Related Party Relationship Object Amount Maturity 2021 2020 2019 Gerdau Corsa S.A.P.I. de C.V. Joint-venture Financing Agreements 4,905,367 Oct/24 2,157,290 2,242,865 1,784,868 Gerdau Summit Aços Fundidos e Forjados S.A. Joint-venture Financing Agreements 130,164 Aug/25 — 30,125 37,285 Gerdau Metaldom S.A. e Gerdau Corsa S.A.P.I. de C.V Joint-venture Financing Agreements 274,560 Feb/20 — — 241,842 |
Schedule of key management compensation | 2021 2020 2019 Available at beginning of the year 6,456,248 6,717,872 6,375,547 Granted 709,990 733,218 1,083,116 Exercised (3,453,802) (937,325) (627,076) Cancelled — (64,112) (38,553) Others — 6,595 (75,162) Available at the end of the year 3,712,436 6,456,248 6,717,872 |
EMPLOYEE BENEFITS (Tables)
EMPLOYEE BENEFITS (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
EMPLOYEE BENEFITS | |
Schedule of total assets and liabilities of all types of employee benefits granted | 2021 2020 Plan assets - Defined contribution pension plan 4,942 39,196 Total assets 4,942 39,196 Actuarial liabilities - Defined benefit pension plan 1,083,719 1,441,592 Acturial liabilities - Post-employment health care benefit 318,181 362,944 Retirement and termination benefit liabilities 13,290 56,903 Total liabilities 1,415,190 1,861,439 Current 39 208 Non-current 1,415,151 1,861,231 |
Post-employment defined benefit pension plans | |
EMPLOYEE BENEFITS | |
Summary of sensitivity analysis | 1% Increase 1% Decrease Discount rate (17,822) 10,392 |
Defined benefit pension plan | |
EMPLOYEE BENEFITS | |
Schedule of current expenses of benefit plans | 2021 2020 2019 Cost of current service 74,840 69,323 54,518 Interest expense 170,897 191,326 189,544 Return on plan assets (136,933) (156,475) (163,148) Past service cost 7,093 3,967 2,302 Settlement (847) (11,609) (4,712) Interest cost on unrecoverable surplus 4,371 7,413 16,247 Net pension cost 119,421 103,945 94,751 |
Schedule of reconciliations of assets and liabilities of benefit plans | 2021 2020 Present value of defined benefit obligation (5,409,065) (5,921,285) Fair value of plan assets 4,647,361 4,652,000 Asset ceiling restrictions on recognition of net funded assets (322,015) (172,307) Net (1,083,719) (1,441,592) Defined benefit obligation (1,083,719) (1,441,592) |
Schedule of variation of plan obligations and assets | 2021 2020 2019 Variation of the plan obligations Obligation at the begining of the year 5,921,285 4,601,965 4,391,251 Cost of service 74,840 69,323 54,518 Interest expense 170,897 191,326 189,544 Payments of the benefits (486,310) (434,650) (309,817) Past service cost 7,093 3,967 2,302 Settlement (228,881) (190,948) (498,493) Acturial remeasurements (457,421) 467,106 546,911 Exchange Variance 407,562 1,213,196 225,749 Obligation at the end of the year 5,409,065 5,921,285 4,601,965 2021 2020 2019 Variation of the plan assets Fair value of the plan assets at the begining of the year 4,652,000 3,656,891 3,568,934 Return of the plan assets 136,933 156,475 163,148 Contributions from sponsors 244,123 224,979 162,650 Settlement (228,034) (179,339) (493,781) Payments of benefits (486,310) (434,650) (309,817) Remeasurement 25,498 334,675 386,767 Exchange Variance 303,151 892,969 178,990 Fair value of plan assets at the end of the year 4,647,361 4,652,000 3,656,891 |
Summary of actuarial gains and losses recognized in other comprehensive income | 2021 2020 2019 Remeasurements (25,498) (334,675) (386,767) Actuarial Remeasurements (457,421) 467,106 546,911 Restriction recognized in Other Comprehensive Income 178,941 (42,317) (94,198) Remeasurements recognized in Other Comprehensive Income (303,978) 90,114 65,946 |
Summary of historical actuarial remeasurements | 2021 2020 2019 2018 2017 Present value of defined benefit obligation (5,409,065) (5,921,285) (4,601,965) (4,391,251) (4,314,592) Fair value of the plan assets 4,647,361 4,652,000 3,656,891 3,568,934 3,456,613 Surplus (Deficit) (761,704) (1,269,285) (945,074) (822,317) (857,979) Experience adjustments on plan liabilities (Gain) (457,421) 467,106 546,911 (370,083) 235,549 Experience adjustments on plan assets (Gain) (25,498) (334,675) (386,767) 253,301 (232,214) |
Summary of allocation for plan assets | 2021 Brazilian Plans American Plans Fixed income 99.2% 50.4% Variable income — 43.0% Others 0.8% 6.6% Total 100.0% 100.0% 2020 Brazilian Plans American Plans Fixed income 99.1% 46.6% Variable income — 47.1% Others 0.9% 6.3% Total 100.0% 100.0% |
Summary of assumptions | 2021 Brazilian Plan North America Plan Average discount rate 8.82% 2.80% -2.90% Rate of increase in compensation Not applicable 3.00% Mortality table AT-2000 per sex RP-2006 and MP-2021 Mortality table of disabled AT-2000 per sex RP-2006 and MP-2021 Rate of rotation Null Based on age and/or the service 2020 Brazilian Plan North America Plan Average discount rate 6.56% 2.25% - 2.50% Rate of increase in compensation Not applicable 3.00% Mortality table AT-2000 per sex RP-2006 and MP-2020 Mortality table of disabled AT-2000 per sex RP-2006 and MP-2020 Rate of rotation Null Based on age and/or the service |
Post-employment health care benefit | |
EMPLOYEE BENEFITS | |
Schedule of current expenses of benefit plans | 2021 2020 2019 Current service cost 3,458 4,964 3,302 Interest expense 8,239 11,311 10,656 Past service cost (32,434) (660) (2,717) Net cost pension benefit (20,737) 15,615 11,241 |
Schedule of reconciliations of assets and liabilities of benefit plans | 2021 2020 Present value of obligations (318,181) (362,944) Total net liabilities (318,181) (362,944) |
Schedule of variation of plan obligations and assets | 2021 2020 2019 Change in benefit obligation Benefit obligation at beginning of the year 362,944 298,989 272,959 Cost of service 3,458 4,964 3,302 Interest expense 8,239 11,311 10,656 Past service cost (32,434) (660) (2,717) Contributions from participants 2,032 2,349 2,088 Payment of benefits (17,431) (20,870) (15,331) Remeasurements (36,938) (23,533) 11,202 Exchange variations 28,311 90,394 16,830 Benefit obligation at the end of the year 318,181 362,944 298,989 2021 2020 2019 Change in plan assets Contributions from sponsors 24,713 19,150 13,243 Contributions from participants 2,032 2,349 2,088 Payments of benefits (26,745) (21,499) (15,331) Fair value of plan assets at end of the year — — — |
Summary of actuarial gains and losses recognized in other comprehensive income | 2021 2020 2019 Losses / Gains on actuarial obligation (36,938) (23,533) 11,202 Actuarial losses recognized in Equity (36,938) (23,533) 11,202 |
Summary of historical actuarial remeasurements | 2021 2020 2019 2018 2017 Present value of defined benefit obligation (318,181) (362,944) (298,989) (272,959) (316,364) Deficit (318,181) (362,944) (298,989) (272,959) (316,364) Experience adjustments on plan liabilities (36,938) (23,533) 11,202 (40,841) (14,452) |
Summary of assumptions | 2021 2020 Average discount rate 2.80% - 2.90% 2.25% - 2.50% Health treatment - rate assumed next year 4.99% - 6.20% 6.10% - 6.50% Health treatment - Assumed rate of decline in the cost to achieve in the years of 2028 to 2041 3.20% - 4.50% 4.00% - 4.40% |
Summary of sensitivity analysis | 1% Increase 1% Decrease Effect over total service costs and interest costs 1,710 (1,327) Effect over benefit plan obligations 32,082 (26,573) |
ENVIRONMENTAL LIABILITIES (Tabl
ENVIRONMENTAL LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
ENVIRONMENTAL LIABILITIES | |
Schedule of provision for environmental liabilities | 2021 2020 Provision for environmental liabilities 575,709 297,094 Current 231,711 125,992 Non-current 343,998 171,102 |
EQUITY (Tables)
EQUITY (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
EQUITY. | |
Schedule of reconciliations of common and preferred outstanding shares | 2021 2020 2019 Common shares Preferred shares Common shares Preferred shares Common shares Preferred shares Balance at beginning of the year 571,929,945 1,129,231,487 571,929,945 1,127,010,827 571,929,945 1,124,233,755 Exercise of long-term incentive plan — 4,585,414 — 2,220,660 — 2,777,072 Balance at the end of the year 571,929,945 1,133,816,901 571,929,945 1,129,231,487 571,929,945 1,127,010,827 |
Schedule of ownership of shares | Shareholders 2021 Shareholders Common % Pref. % Total % Metalúrgica Gerdau S.A. * 557,898,901 97.3 — — 557,898,901 32.4 Brazilian institutional investors 4,363,438 0.8 232,421,779 20.3 236,785,217 13.8 Foreign institutional investors 1,895,038 0.3 490,810,572 42.8 492,705,610 28.7 Other shareholders 7,772,568 1.4 410,584,550 35.8 418,357,118 24.3 Treasury stock 1,697,538 0.2 12,214,344 1.1 13,911,882 0.8 573,627,483 100.0 1,146,031,245 100.0 1,719,658,728 100.0 Shareholders 2020 Shareholders Common % Pref. % Total % Metalúrgica Gerdau S.A. * 557,898,901 97.3 2,147,800 0.2 560,046,701 32.6 Brazilian institutional investors 3,397,955 0.6 227,262,531 19.8 230,660,486 13.4 Foreign institutional investors 3,142,148 0.5 492,076,396 42.9 495,218,544 28.8 Other shareholders 7,490,941 1.3 407,744,760 35.6 415,235,701 24.1 Treasury stock 1,697,538 0.3 16,799,758 1.5 18,497,296 1.1 573,627,483 100.0 1,146,031,245 100.0 1,719,658,728 100.0 Shareholders 2019 Shareholders Common % Pref. % Total % Metalúrgica Gerdau S.A. * 557,898,901 97.3 69,852,184 6.1 627,751,085 36.5 Brazilian institutional investors 3,068,614 0.5 241,698,143 21.1 244,766,757 14.2 Foreign institutional investors 3,875,655 0.7 427,735,548 37.3 431,611,203 25.1 Other shareholders 7,086,775 1.2 387,724,952 33.8 394,811,727 23.0 Treasury stock 1,697,538 0.3 19,020,418 1.7 20,717,956 1.2 573,627,483 100.0 1,146,031,245 100.0 1,719,658,728 100.0 * Metalurgica Gerdau S.A. is the controlling shareholder and Indac – Ind. e Com. S.A. (holding of Gerdau’s family) is the utltimate controlling shareholder of the Company. |
Schedule of changes in treasury stocks | 2021 Common shares R$ Preferred shares R$ Opening balance 1,697,538 557 16,799,758 228,752 Exercise of long-term incentive plan — — (4,585,414) (76,900) Closing balance 1,697,538 557 12,214,344 151,852 2020 Common shares R$ Preferred shares R$ Opening balance 1,697,538 557 19,020,418 241,985 Exercise of long-term incentive plan — — (2,220,660) (13,233) Closing balance 1,697,538 557 16,799,758 228,752 2019 Common shares R$ Preferred shares R$ Opening balance 1,697,538 557 21,797,490 279,869 Exercise of long-term incentive plan — — (2,777,072) (37,884) Closing balance 1,697,538 557 19,020,418 241,985 |
Schedule of effects of interest changes in subsidiaries | December 31, 2021 Attributed to parent Non-controlling company’s interest interests Total (i) Other changes — (18,962) (18,962) Effects of interest changes in subsidiaries — (18,962) (18,962) December 31, 2020 Attributed to parent Non-controlling company’s interest interests Total (i) Other changes — 12,776 12,776 Effects of interest changes in subsidiaries — 12,776 12,776 December 31, 2019 Attributed to parent Non-controlling company’s interest interests Total (i) Other changes — (1,586) (1,586) Effects of interest changes in subsidiaries — (1,586) (1,586) (i) Other changes in subsidiaries without losing control, which may include among others, capital increases, other acquisitions of interests and dilutions of any nature. |
Schedule of dividend amounts considered as distributed using the balance of the Investments and Working Capital Reserve | 2021 2020 2019 Net income 15,494,111 2,365,763 1,203,736 Constitution of legal reserve (756,334) (109,649) (55,876) Constitution of the tax incentives reserve (367,430) (172,792) (86,216) Net income before dividends and interest on capital 14,370,347 2,083,322 1,061,644 Dividends and interest on capital (5,014,450) (714,487) (356,539) Dividend - adjustment in excess of the minimum estatutory undistributed (341,150) — — Net income before constitution of investments and working capital reserve 9,014,747 1,368,835 705,105 Constitution of investments and working capital reserve (9,014,747) (1,368,835) (705,105) |
Schedule of dividends and interest on capital | Dividends and interest on capital in the years Outstanding shares Period Nature R$ /share (thousands) Credit Payment 2021 2020 2019 1 st Dividends 0.40 1,705,338 5/14/2021 5/26/2021 682,199 — 118,803 2 nd Dividends 0.54 1,705,576 8/16/2021 8/26/2021 921,011 — 118,817 3 rd Interest 0.38 1,705,582 9/27/2021 11/16/2021 648,122 — — 3 rd Interest 0.20 1,705,630 11/5/2021 11/16/2021 341,126 — — 3 rd Dividends 1.42 1,705,628 11/5/2021 11/16/2021 2,421,992 204,139 67,951 4 th Dividends 0.20 1,705,747 3/7/2022 3/16/2022 341,150 — 50,968 4 th Interest — 510,348 — Proposed Interest and Dividends 5,355,600 714,487 356,539 Credit per share (R$) 3.14 0.42 0.21 |
EARNINGS (LOSS) PER SHARE (EP_2
EARNINGS (LOSS) PER SHARE (EPS) (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
EARNINGS (LOSS) PER SHARE (EPS) | |
Schedule of basic and diluted earnings (loss) per share | Basic 2021 Common Preferred Total (in thousands, except share and per share data) Basic numerator Allocated net income available to common and preferred shareholders 5,198,011 10,296,100 15,494,111 Basic denominator Weighted-average outstanding shares, after deducting the average tresuary shares 571,929,945 1,132,865,567 Earnings per share (in R$) — Basic 9.09 9.09 2020 Common Preferred Total (in thousands, except share and per share data) Basic numerator Allocated net income available to common and preferred shareholders 795,617 1,570,146 2,365,763 Basic denominator Weighted-average outstanding shares, after deducting the average tresuary shares 571,929,945 1,128,700,478 Earnings per share (in R$) — Basic 1.39 1.39 2019 Common Preferred Total (in thousands, except share and per share data) Basic numerator Allocated net income available to common and preferred shareholders 405,607 798,129 1,203,736 Basic denominator Weighted-average outstanding shares, after deducting the average tresuary shares 571,929,945 1,125,408,180 Earnings per share (in R$) — Basic 0.71 0.71 Diluted 2021 2020 2019 Diluted numerator Allocated net income available to Common and Preferred shareholders Net income allocated to preferred shareholders 10,296,100 1,570,146 798,129 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 long-term incentive plans of Gerdau. 26,192 5,524 2,884 10,322,292 1,575,670 801,013 Net income allocated to common shareholders 5,198,011 795,617 405,607 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 long-term incentive plans of Gerdau. (26,192) (4,782) (2,884) 5,171,819 790,835 402,723 Diluted denominator Weighted - average number of shares outstanding Common Shares 571,929,945 571,929,945 571,929,945 Preferred Shares Weighted-average number of preferred shares outstanding 1,132,865,567 1,128,700,478 1,125,408,180 Potential increase in number of preferred shares outstanding in respect of long-term incentive plan of Gerdau 8,633,716 10,821,083 12,157,614 Total 1,141,499,283 1,139,521,561 1,137,565,794 Earnings per share — Diluted (Common and Preferred Shares) 9.04 1.38 0.70 |
LONG-TERM INCENTIVE PLANS (Tabl
LONG-TERM INCENTIVE PLANS (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
LONG-TERM INCENTIVE PLANS | |
Summary of changes in restricted and performance shares | Balance on January 1, 2019 14,261,501 Granted 2,647,995 Cancelled (2,104,754) Exercised (1,786,335) Balance on December 31, 2019 13,018,407 Granted 3,146,696 Cancelled (1,777,100) Exercised (1,918,669) Balance on December 31, 2020 12,469,334 Granted 2,228,196 Cancelled (1,755,522) Exercised (4,407,441) Balance on December 31, 2021 8,534,567 |
Summary of stock options by exercise price | 2021 2020 2019 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 — — — — 15,480 16.72 Options Forfeited — — — — (15,480) 16.72 Available at the end of the year — — — — — — |
SEGMENT REPORTING (Tables)
SEGMENT REPORTING (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
SEGMENT REPORTING | |
Schedule of company's segment information classified according to the business segments | Business Segments 2021 North America South America Special Steel Eliminations and Brazil Operation Operation Operation Operation Adjustments Consolidated Net sales 34,757,720 27,838,000 6,856,766 10,980,191 (2,087,596) 78,345,081 Cost of sales (22,496,140) (22,416,578) (5,332,853) (9,427,221) 2,145,071 (57,527,721) Gross profit 12,261,580 5,421,422 1,523,913 1,552,970 57,475 20,817,360 Selling, general and administrative expenses (781,942) (639,370) (157,912) (233,348) (293,379) (2,105,951) Other operating income (expenses) 137,649 42,141 27,514 71,287 241,140 519,731 Eletrobras compulsory loan recovery — — — — 1,391,280 1,391,280 Results in operations with subsidiary and joint ventures (note 3.4) — — — — (162,913) (162,913) Impairment of financial assets 7,823 (7,668) (1,073) 1,275 — 357 Equity in earnings of unconsolidated companies — 279,948 268,291 28,831 (13,912) 563,158 Operational income before financial income (expenses) and taxes 11,625,110 5,096,473 1,660,733 1,421,015 1,219,691 21,023,022 Financial result, net (538,341) (156,437) (314,473) (238,249) 497,046 (750,454) Income (Loss) before taxes 11,086,769 4,940,036 1,346,260 1,182,766 1,716,737 20,272,568 Income and social contribution taxes (2,769,495) (1,092,146) (377,286) (287,292) (187,411) (4,713,630) Net income (Loss) 8,317,274 3,847,890 968,974 895,474 1,529,326 15,558,938 Supplemental information: Net sales between segments 1,352,079 70,904 16,297 648,316 — 2,087,596 Depreciation/amortization 1,330,963 627,483 213,001 487,114 — 2,658,561 Investments in associates and joint ventures — 1,871,274 1,071,333 251,668 146,500 3,340,775 Total assets 24,835,717 22,096,314 7,113,706 13,658,147 6,110,729 73,814,613 Total liabilities 8,105,443 4,603,424 2,376,176 2,801,071 13,112,850 30,998,964 Business Segments 2020 North America South America Special Steel Eliminations and Brazil Operation Operation Operation Operation Adjustments Consolidated Net sales 17,752,823 17,458,318 3,831,406 6,096,471 (1,324,357) 43,814,661 Cost of sales (14,179,991) (16,212,757) (3,015,189) (5,794,666) 1,318,501 (37,884,102) Gross profit 3,572,832 1,245,561 816,217 301,805 (5,856) 5,930,559 Selling, general and administrative expenses (562,019) (476,518) (116,479) (179,822) (195,547) (1,530,385) Other operating income (expenses) 31,500 97,751 16,684 55,097 916,667 1,117,699 Impairment of non-financial assets — (342,355) — (69,570) — (411,925) Impairment of financial assets (23,177) (36,286) (2,436) (2,233) — (64,132) Equity in earnings of unconsolidated companies (1,287) 23,512 99,341 8,899 22,104 152,569 Operational income before financial income (expenses) and taxes 3,017,849 511,665 813,327 114,176 737,368 5,194,385 Financial result, net (442,972) (206,405) (60,787) (215,433) (773,110) (1,698,707) Income (Loss) before taxes 2,574,877 305,260 752,540 (101,257) (35,742) 3,495,678 Income and social contribution taxes (652,126) (178,447) (195,440) 13,229 (94,840) (1,107,624) Net income (Loss) 1,922,751 126,813 557,100 (88,028) (130,582) 2,388,054 Supplemental information: Net sales between segments 1,149,618 60,370 41 114,328 — 1,324,357 Depreciation/amortization 1,135,294 777,369 142,143 444,298 — 2,499,104 Investments in associates and joint ventures 10,186 908,338 976,046 231,152 145,907 2,271,629 Total assets 21,099,735 18,583,439 5,448,922 11,233,676 6,757,237 63,123,009 Total liabilities 7,469,541 5,261,820 1,360,098 1,994,575 15,951,765 32,037,799 Business Segments 2019 North America South America Special Steel Eliminations and Brazil Operation Operation Operation Operation Adjustments Consolidated Net sales 16,122,171 14,656,028 3,259,253 6,701,900 (1,095,342) 39,644,010 Cost of sales (14,363,253) (13,351,209) (2,762,157) (6,167,502) 1,203,395 (35,440,726) Gross profit 1,758,918 1,304,819 497,096 534,398 108,053 4,203,284 Selling, general and administrative expenses (539,344) (444,326) (119,627) (170,170) (156,989) (1,430,456) Other operating income (expenses) 295,818 44,660 17,416 35,571 55,734 449,200 Impairment of financial assets (2,012) (14,612) (1,906) (2,513) — (21,044) Equity in earnings of unconsolidated companies (828) (110,959) 66,468 6,776 21,493 (17,050) Operational income before financial income (expenses) and taxes 1,512,552 779,582 459,447 404,062 28,291 3,183,934 Financial result, net (520,821) (99,029) (163,459) (109,116) (616,789) (1,509,214) Income (Loss) before taxes 991,731 680,553 295,988 294,946 (588,498) 1,674,720 Income and social contribution taxes (214,400) (188,458) (100,341) (60,749) 106,115 (457,833) Net income (Loss) 777,331 492,095 195,647 234,197 (482,383) 1,216,887 Supplemental information: Net sales between segments 920,659 62,196 — 112,487 — 1,095,342 Depreciation/amortization 1,008,713 571,015 120,462 374,105 — 2,074,295 Investments in associates and joint ventures 11,472 681,807 748,392 224,201 146,527 1,812,399 Total assets 17,195,824 15,178,053 4,562,604 8,597,180 8,469,309 54,002,970 Total liabilities 4,686,686 4,506,771 996,876 1,604,885 15,034,625 26,829,843 |
Schedule of company's geographic information classified according to the geographical region | Geographic Area Brazil Latin America (1) North America (2) Consolidated 2021 2021 2021 2021 Net sales 37,733,918 8,567,310 32,043,853 78,345,081 Total assets 31,740,469 8,959,237 33,114,907 73,814,613 Geographic Area Brazil Latin America (1) North America (2) Consolidated 2020 2020 2020 2020 Net sales 18,798,384 4,996,434 20,019,843 43,814,661 Total assets 28,752,629 7,042,462 27,327,918 63,123,009 Geographic Area Brazil Latin America (1) North America (2) Consolidated 2019 2019 2019 2019 Net sales 17,573,278 4,201,165 17,869,567 39,644,010 Total assets 26,124,159 5,781,527 22,097,284 54,002,970 (1) Does not include operations of Brazil (2) Does not include operations of Mexico |
EXPENSES BY NATURE (Tables)
EXPENSES BY NATURE (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
EXPENSES BY NATURE | |
Schedule of expenses classified by nature | 2021 2020 2019 Depreciation and amortization (2,658,561) (2,499,104) (2,074,295) Labor expenses (7,249,811) (5,867,265) (5,175,373) Raw material and consumption material (43,720,989) (26,945,440) (25,890,618) Freight (3,898,360) (2,572,293) (2,300,439) Other expenses/income, net (1,585,863) (476,818) (1,002,301) Eletrobras compulsory loan recovery 1,391,280 — — Results in operations with subsidiary and joint ventures (162,913) — — Impairment of non-financial assets — (411,925) — (57,885,217) (38,772,845) (36,443,026) Classified as: Cost of sales (57,527,721) (37,884,102) (35,440,726) Selling expenses (715,830) (512,950) (476,339) General and administrative expenses (1,390,121) (1,017,435) (954,117) Other operating income 979,760 1,763,684 636,847 Other operating expenses (460,029) (645,985) (187,647) Eletrobras compulsory loan recovery 1,391,280 — — Results in operations with subsidiary and joint ventures (162,913) — — Impairment of financial assets 357 (64,132) (21,044) Impairment of non-financial assets — (411,925) — (57,885,217) (38,772,845) (36,443,026) |
FINANCIAL INCOME (Tables)
FINANCIAL INCOME (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
FINANCIAL INCOME | |
Schedule of financial income | 2021 2020 2019 Income from short-term investments 182,639 108,057 87,241 Interest income and other financial income 66,385 86,035 135,972 Financial Income 249,024 194,092 223,213 Interest on debt (1,059,841) (1,022,460) (938,120) Monetary variation and other financial expenses (373,246) (426,001) (531,634) Financial Expenses (1,433,087) (1,448,461) (1,469,754) Exchange Variation, net (108,373) (204,291) (247,555) Bonds repurchase expenses (264,687) (239,273) — Tax credits monetary update 788,741 — — Gains and losses on derivative financial instruments, net 17,928 (774) (15,118) Financial result, net (750,454) (1,698,707) (1,509,214) |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING PRACTICES (Details) | 12 Months Ended |
Dec. 31, 2021shares | |
Dividends and Interest on equity | |
Minimum annual mandatory dividend (as a percent) | 30.00% |
Legal reserve, as a percent of net income | 5.00% |
Earnings per Share | |
Antidilutive shares excluded from calculation of diluted EPS | 0 |
CONSOLIDATED FINANCIAL STATEM_3
CONSOLIDATED FINANCIAL STATEMENTS - Subsidiaries (Details) | 12 Months Ended | |||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | ||
Gerdau GTL Spain S.L. | ||||
Significant consolidated subsidiaries | ||||
Equity Interests (as a percent) | [1] | 100.00% | 100.00% | 100.00% |
Gerdau Internacional Empreendimentos Ltda. - Grupo Gerdau | ||||
Significant consolidated subsidiaries | ||||
Equity Interests (as a percent) | [1] | 100.00% | 100.00% | 100.00% |
Gerdau Ameristeel Corporation and subsidiaries | ||||
Significant consolidated subsidiaries | ||||
Equity Interests (as a percent) | [1],[2] | 100.00% | 100.00% | 100.00% |
Gerdau Acominas S.A. | ||||
Significant consolidated subsidiaries | ||||
Equity Interests (as a percent) | [1] | 99.86% | 99.86% | 99.83% |
Gerdau Acos Longos S.A. and subsidiary | ||||
Significant consolidated subsidiaries | ||||
Equity Interests (as a percent) | [1],[3] | 99.83% | 99.82% | 99.82% |
Gerdau Steel Inc. | ||||
Significant consolidated subsidiaries | ||||
Equity Interests (as a percent) | [1] | 100.00% | 100.00% | 100.00% |
Gerdau Holdings Inc. and subsidiary | ||||
Significant consolidated subsidiaries | ||||
Equity Interests (as a percent) | [1],[4] | 100.00% | 100.00% | 100.00% |
Paraopeba - Fixed-income investment fund | ||||
Significant consolidated subsidiaries | ||||
Equity Interests (as a percent) | [1],[5],[6] | 70.62% | 89.26% | 96.96% |
Percent of participation in investment fund | 73.54% | 92.58% | 98.07% | |
Gerdau Hungria Holdings Limited Liability Company | ||||
Significant consolidated subsidiaries | ||||
Equity Interests (as a percent) | [1] | 100.00% | 100.00% | 100.00% |
GTL Equity Investments Corp. | ||||
Significant consolidated subsidiaries | ||||
Equity Interests (as a percent) | [1] | 100.00% | 100.00% | 100.00% |
Empresa Siderurgica del Peru S.A.A. - Siderperu | ||||
Significant consolidated subsidiaries | ||||
Equity Interests (as a percent) | [1] | 90.03% | 90.03% | 90.03% |
Gerdau GTL Mxico, S.A. de C.V. and subsidiary | ||||
Significant consolidated subsidiaries | ||||
Equity Interests (as a percent) | [1],[7] | 100.00% | 100.00% | 100.00% |
Seiva S.A. Florestas e Industrias | ||||
Significant consolidated subsidiaries | ||||
Equity Interests (as a percent) | [1] | 97.73% | 97.73% | 97.73% |
Gerdau Laisa S.A. | ||||
Significant consolidated subsidiaries | ||||
Equity Interests (as a percent) | [1] | 100.00% | 100.00% | 100.00% |
Sipar Gerdau Inversiones S.A. | ||||
Significant consolidated subsidiaries | ||||
Equity Interests (as a percent) | [1] | 99.99% | 99.99% | 99.99% |
Sipar Aceros S.A. and subsidiary | ||||
Significant consolidated subsidiaries | ||||
Equity Interests (as a percent) | [1],[8] | 99.98% | 99.98% | 99.98% |
Sizuca - Siderrgica Zuliana, C. A. | ||||
Significant consolidated subsidiaries | ||||
Equity Interests (as a percent) | [1] | 100.00% | 100.00% | 100.00% |
GTL Trade Finance Inc. | ||||
Significant consolidated subsidiaries | ||||
Equity Interests (as a percent) | [1] | 100.00% | 100.00% | 100.00% |
Gerdau Trade Inc. | ||||
Significant consolidated subsidiaries | ||||
Equity Interests (as a percent) | [1] | 100.00% | 100.00% | 100.00% |
Gerdau Next S.A. and subsidiaries | ||||
Significant consolidated subsidiaries | ||||
Equity Interests (as a percent) | [1],[9] | 100.00% | ||
[1] | The voting capital is substantially equal to the total capital. The interests reported represent the ownership percentage held directly and indirectly in the subsidiary. | |||
[2] | Subsidiaries: Gerdau Ameristeel US Inc., Chaparral Steel Company. | |||
[3] | Subsidiaries: Gerdau Açominas Overseas Ltd. and Siderúrgica Latino-Americana S.A. | |||
[4] | Subsidiary: Gerdau MacSteel Inc. | |||
[5] | Fixed-income investment fund managed by Bank JP Morgan S.A. | |||
[6] | The percentage of participation including interest of the parent company Metalúrgica Gerdau S.A. in the investment fund is 73.54% in 2021, 92.58% in 2020 and 98.07% in 2019 | |||
[7] | Subsidiary: GTL Servicios Administrativos México, S.A. de C.V. | |||
[8] | Subsidiary: Siderco S.A. | |||
[9] | Subsidiaries: G2L Logística Ltda, G2base Fundações e Contenções Ltda and Gerdau Grafeno Ltda. |
CONSOLIDATED FINANCIAL STATEM_4
CONSOLIDATED FINANCIAL STATEMENTS - Joint ventures (Details) - BRL (R$) R$ in Thousands | 12 Months Ended | |||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | ||
Joint ventures | ||||
Net income (loss) | R$ 15558938 | R$ 2388054 | R$ 1216887 | |
Total comprehensive income (loss) | 16,812,883 | 4,653,996 | 1,589,369 | |
Results in operations with subsidiary and joint ventures (note 3.4) | 511,514 | |||
Amount of the additional interest | 511,514 | |||
Joint ventures | ||||
Joint ventures | ||||
Net income (loss) | 959,116 | 249,158 | (21,548) | |
Total comprehensive income (loss) | R$ 959116 | R$ 249158 | R$ 21548 | |
Bradley Steel Processors | ||||
Joint ventures | ||||
Equity Interests (as a percent) | [1] | 50.00% | 50.00% | 50.00% |
MRM Guide Rail | ||||
Joint ventures | ||||
Equity Interests (as a percent) | [1] | 50.00% | 50.00% | 50.00% |
Gerdau Corsa S.A.P.I de C.V. | ||||
Joint ventures | ||||
Equity Interests (as a percent) | [1] | 75.00% | 70.00% | 70.00% |
Capital increase | R$ 463990 | |||
Results in operations with subsidiary and joint ventures (note 3.4) | R$ 511514 | |||
Amount of the additional interest | R$ 511514 | |||
Gerdau Corsa S.A.P.I de C.V. | Minimum | ||||
Joint ventures | ||||
Equity Interests (as a percent) | 70.00% | |||
Gerdau Corsa S.A.P.I de C.V. | Maximum | ||||
Joint ventures | ||||
Equity Interests (as a percent) | 75.00% | |||
Gerdau Metaldom Corp. | ||||
Joint ventures | ||||
Equity Interests (as a percent) | [1] | 50.00% | 50.00% | 50.00% |
Gerdau Summit Acos Fundidos e Forjados S.A. | ||||
Joint ventures | ||||
Equity Interests (as a percent) | [1] | 58.73% | 58.73% | 58.73% |
Diaco S.A. | ||||
Joint ventures | ||||
Equity Interests (as a percent) | [1] | 49.87% | 49.87% | 49.87% |
Juntos Somos Mais Fidelizacao S.A. | ||||
Joint ventures | ||||
Equity Interests (as a percent) | [1] | 27.50% | 27.50% | 27.50% |
[1] | 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. |
CONSOLIDATED FINANCIAL STATEM_5
CONSOLIDATED FINANCIAL STATEMENTS - Associate companies (Details) - BRL (R$) R$ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Interest in Associate companies | |||
Net income | R$ 15558938 | R$ 2388054 | R$ 1216887 |
Total comprehensive income (loss) recognized in the year | 16,812,883 | 4,653,996 | 1,589,369 |
Associate companies | |||
Interest in Associate companies | |||
Net income | 37,231 | 42,008 | 31,249 |
Total comprehensive income (loss) recognized in the year | R$ 37231 | R$ 42008 | R$ 31249 |
Dona Francisca Energtica S.A. | |||
Interest in Associate companies | |||
Equity Interests (as a percent) | 51.82% | 51.82% | 51.82% |
CONSOLIDATED FINANCIAL STATEM_6
CONSOLIDATED FINANCIAL STATEMENTS - Results in operations with subsidiary and joint ventures (Details) - BRL (R$) R$ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Disclosure of Significant Investments in Subsidiary and Joint Ventures [Line Items] | |||
Recycling to income of the cumulative translation adjustments | R$ 193334 | R$ 0 | R$ 0 |
Write-off of goodwill | (549,898) | ||
Results in operations with subsidiary and joint ventures | (162,913) | R$ 0 | R$ 0 |
Gerdau Corsa S.A.P.I de C.V. | North America Operation | |||
Disclosure of Significant Investments in Subsidiary and Joint Ventures [Line Items] | |||
Write-off of goodwill | 549,898 | ||
Results in operations with subsidiary and joint ventures | R$ 162913 | ||
Gerdau Corsa S.A.P.I de C.V. | Minimum | |||
Disclosure of Significant Investments in Subsidiary and Joint Ventures [Line Items] | |||
Equity Interests (as a percent) | 70.00% | ||
Gerdau Corsa S.A.P.I de C.V. | Maximum | |||
Disclosure of Significant Investments in Subsidiary and Joint Ventures [Line Items] | |||
Equity Interests (as a percent) | 75.00% | ||
Sidertul, S.A. de C.V. | |||
Disclosure of Significant Investments in Subsidiary and Joint Ventures [Line Items] | |||
Gain due to the fair value adjustment of the interest held | R$ 193651 | ||
Recycling to income of the cumulative translation adjustments | R$ 193334 |
CONSOLIDATED FINANCIAL STATEM_7
CONSOLIDATED FINANCIAL STATEMENTS - Acquisition of subsidiary (Details) T in Thousands, R$ in Thousands | 12 Months Ended | ||||
Dec. 31, 2021BRL (R$) | Dec. 31, 2020BRL (R$) | Dec. 31, 2019BRL (R$) | Nov. 30, 2020BRL (R$)T | Dec. 31, 2018BRL (R$) | |
Book Value | |||||
Cash and cash equivalents, Book Value | R$ 4160654 | R$ 4617204 | R$ 2641652 | R$ 2890144 | |
Trade accounts receivable - net, Book Value | 5,414,075 | 3,737,270 | |||
Inventories, Book Value | 16,861,488 | 9,169,417 | |||
Other current assets, Book Value | 679,193 | 591,523 | |||
Property, plant and equipment, Book Value | 18,741,786 | 17,252,915 | 15,901,493 | ||
Current liabilities, Book Value | (14,036,814) | (11,482,143) | |||
Non-current liabilities, Book Value | (16,962,150) | (20,555,656) | |||
Non-controlling interest, Book Value | (211,367) | (224,939) | |||
TOTAL ASSETS | 73,814,613 | 63,123,009 | 54,002,970 | ||
Fair value upon acquisition | |||||
Total consideration paid | 475,961 | ||||
Less: Cash and cash equivalents of acquired subsidiary | (33,419) | ||||
Total | R$ 0 | 442,542 | R$ 0 | ||
Siderurgica Latino-Americana SA ("SILAT") | |||||
Acquisition Adjustments | |||||
Property, plant and equipment, Acquisition Adjustments | R$ 253216 | ||||
Non-current liabilities, Acquisition Adjustments | (86,093) | ||||
Non-controlling Interest, Acquisition Adjustments | (6,100) | ||||
Assets (Liabilities), Acquisition Adjustments | 161,023 | ||||
Negative Goodwill, Acquisition Adjustments | (2,481) | ||||
Net assets, Acquisition Adjustments | 158,542 | ||||
Book Value | |||||
Cash and cash equivalents, Book Value | 33,419 | ||||
Trade accounts receivable - net, Book Value | 13,190 | ||||
Inventories, Book Value | 24,160 | ||||
Other current assets, Book Value | 11,091 | ||||
Property, plant and equipment, Book Value | 233,541 | ||||
Other non-current assets, Book Value | 34,410 | ||||
Current liabilities, Book Value | (26,638) | ||||
Non-current liabilities, Book Value | (359) | ||||
Non-controlling interest, Book Value | (5,395) | ||||
TOTAL ASSETS | 317,419 | ||||
Net assets, Book Value | 317,419 | ||||
Fair value upon acquisition | |||||
Cash and cash equivalents, Fair value upon acquisition | 33,419 | ||||
Trade accounts receivable - net, Fair value upon acquisition | 13,190 | ||||
Inventories, Fair value upon acquisition | 24,160 | ||||
Other current assets, Fair value upon acquisition | 11,091 | ||||
Property, plant and equipment, Fair value upon acquisition | 486,757 | ||||
Other non-current assets, Fair value upon acquisition | 34,410 | ||||
Current liabilities, Fair value upon acquisition | (26,638) | ||||
Non-controlling interest, Fair value upon acquisition | (11,495) | ||||
Non-current liabilities, Fair value upon acquisition | (86,452) | ||||
Assets (Liabilities), Fair value upon acquisition | 478,442 | ||||
Negative Goodwill, Fair value upon acquisition | 2,481 | 2,481 | |||
Net assets | R$ 475961 | R$ 475961 | |||
Gerdau Acos Longos S.A. | Siderurgica Latino-Americana SA ("SILAT") | |||||
Acquisition of subsidiary | |||||
Percentage of equity interest acquired (as a percent) | 96.35% | ||||
Fair value upon acquisition | |||||
Net assets | R$ 475961 | ||||
Gerdau Acos Longos S.A. | Siderurgica Latino-Americana SA ("SILAT") | Long steel rolled | |||||
Acquisition of subsidiary | |||||
Production capacity (in tons) | T | 600 |
CASH AND CASH EQUIVALENTS, AN_3
CASH AND CASH EQUIVALENTS, AND SHORT AND LONG-TERM INVESTMENTS (Details) - BRL (R$) R$ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
CASH AND CASH EQUIVALENTS, AND SHORT AND LONG-TERM INVESTMENTS | ||||
Cash | R$ 14667 | R$ 9060 | ||
Banks and immediately available investments | 4,145,987 | 4,608,144 | ||
Cash and cash equivalents | 4,160,654 | 4,617,204 | R$ 2641652 | R$ 2890144 |
Short-term investments | R$ 2626212 | R$ 3041143 |
TRADE ACCOUNTS RECEIVABLE - Sum
TRADE ACCOUNTS RECEIVABLE - Summary (Details) - BRL (R$) R$ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
TRADE ACCOUNTS RECEIVABLE | ||
Trade accounts receivable - net, Book Value | R$ 5414075 | R$ 3737270 |
Gross cost | in Brazil | ||
TRADE ACCOUNTS RECEIVABLE | ||
Trade accounts receivable - net, Book Value | 2,640,011 | 2,081,740 |
Gross cost | exports from Brazil | ||
TRADE ACCOUNTS RECEIVABLE | ||
Trade accounts receivable - net, Book Value | 249,834 | 26,121 |
Gross cost | outside of Brazil | ||
TRADE ACCOUNTS RECEIVABLE | ||
Trade accounts receivable - net, Book Value | 2,632,002 | 1,766,555 |
Accumulated impairment losses | ||
TRADE ACCOUNTS RECEIVABLE | ||
Trade accounts receivable - net, Book Value | R$ 107772 | R$ 137146 |
TRADE ACCOUNTS RECEIVABLE - Acc
TRADE ACCOUNTS RECEIVABLE - Accounts receivable by aging (Details) - BRL (R$) R$ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
TRADE ACCOUNTS RECEIVABLE | ||
Trade accounts receivable - net, Book Value | R$ 5414075 | R$ 3737270 |
Accumulated impairment losses | ||
TRADE ACCOUNTS RECEIVABLE | ||
Trade accounts receivable - net, Book Value | (107,772) | (137,146) |
Current | Gross cost | ||
TRADE ACCOUNTS RECEIVABLE | ||
Trade accounts receivable - net, Book Value | 4,646,175 | 3,466,000 |
Past due: Up to 30 days | Gross cost | ||
TRADE ACCOUNTS RECEIVABLE | ||
Trade accounts receivable - net, Book Value | 494,866 | 259,756 |
Past due: From 31 to 60 days | Gross cost | ||
TRADE ACCOUNTS RECEIVABLE | ||
Trade accounts receivable - net, Book Value | 139,415 | 48,905 |
Past due: From 61 to 90 days | Gross cost | ||
TRADE ACCOUNTS RECEIVABLE | ||
Trade accounts receivable - net, Book Value | 32,245 | 9,355 |
Past-due: From 91 to 180 days | Gross cost | ||
TRADE ACCOUNTS RECEIVABLE | ||
Trade accounts receivable - net, Book Value | 169,959 | 13,636 |
Past-due: From 181 to 360 days | Gross cost | ||
TRADE ACCOUNTS RECEIVABLE | ||
Trade accounts receivable - net, Book Value | 8,220 | 15,899 |
Past due: Above 360 days | Gross cost | ||
TRADE ACCOUNTS RECEIVABLE | ||
Trade accounts receivable - net, Book Value | R$ 30967 | R$ 60865 |
TRADE ACCOUNTS RECEIVABLE - Cha
TRADE ACCOUNTS RECEIVABLE - Changes in impairment (Details) - Trade accounts receivable - BRL (R$) R$ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Changes in the impairment on financial assets on financial assets | |||
Balance, beginning of year | R$ 137146 | R$ 98079 | R$ 158157 |
Impairment on financial assets during the year | (55,731) | (148,548) | (81,243) |
Recoveries in the year | 56,088 | 84,416 | 60,199 |
Write-offs | 9,892 | 36,210 | 78,635 |
Loss of control of subsidiary (note 3.4) | 23,203 | ||
Exchange variation | (4,078) | (11,145) | 2,487 |
Balance, end of year | R$ 107772 | R$ 137146 | R$ 98079 |
INVENTORIES - Summary (Details)
INVENTORIES - Summary (Details) - BRL (R$) R$ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
INVENTORIES | ||
Inventories, Book Value | R$ 16861488 | R$ 9169417 |
Gross cost | ||
INVENTORIES | ||
Finished products | 7,209,379 | 3,894,698 |
Work in progress | 3,453,948 | 2,045,158 |
Raw materials | 3,994,655 | 1,934,958 |
Storeroom supplies | 1,061,666 | 786,401 |
Imports in transit | 1,145,215 | 514,321 |
Accumulated impairment losses | ||
INVENTORIES | ||
Inventories, Book Value | R$ 3375 | R$ 6119 |
INVENTORIES - Allowance for adj
INVENTORIES - Allowance for adjustment to net realizable value of inventories (Details) - Inventories - BRL (R$) R$ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Allowance for adjustment to net realizable value of inventories | |||
Balance, beginning of year | R$ 6119 | R$ 39308 | R$ 13704 |
Provision for the year | (6,331) | (6,562) | (46,693) |
Reversal of adjustments to net realizable value | 9,143 | 47,259 | 22,028 |
Exchange rate variation | (68) | (7,508) | (939) |
Balance, end of year | R$ 3375 | R$ 6119 | R$ 39308 |
TAX CREDITS - Current and Non-c
TAX CREDITS - Current and Non-current (Details) - BRL (R$) R$ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Disclosure of Tax credits | ||
Tax credits - current | R$ 2083885 | R$ 1201312 |
Tax credits - non-current | 124,600 | 664,045 |
Tax credits | ||
Disclosure of Tax credits | ||
Tax credits - current | 2,083,885 | 1,201,312 |
Tax credits - non-current | 124,600 | 664,045 |
Tax credits - current and non-current | 2,208,485 | 1,865,357 |
ICMS (state VAT) | ||
Disclosure of Tax credits | ||
Tax credits - current | 155,373 | 297,926 |
Tax credits - non-current | 85,512 | 64,163 |
Social security financing | ||
Disclosure of Tax credits | ||
Tax credits - current | 1,456,593 | 632,927 |
Tax credits - non-current | 238 | 441,111 |
Financing of social integration program | ||
Disclosure of Tax credits | ||
Tax credits - current | 226,477 | 171,724 |
Financing of social integration program and others | ||
Disclosure of Tax credits | ||
Tax credits - non-current | 38,850 | 158,771 |
IPI (federal VAT) | ||
Disclosure of Tax credits | ||
Tax credits - current | 67,166 | 38,174 |
IVA (Value-added tax) | ||
Disclosure of Tax credits | ||
Tax credits - current | 126,281 | 24,500 |
Other tax credits | ||
Disclosure of Tax credits | ||
Tax credits - current | R$ 51995 | R$ 36061 |
TAX CREDITS - Realization of no
TAX CREDITS - Realization of non-current tax credits (Details) - BRL (R$) R$ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Estimates of realization of non-current tax credits | ||
Tax credits - non-current | R$ 124600 | R$ 664045 |
Tax credits | ||
Estimates of realization of non-current tax credits | ||
Tax credits - non-current | 124,600 | 664,045 |
Tax credits | 2022. | ||
Estimates of realization of non-current tax credits | ||
Tax credits - non-current | 584,145 | |
Tax credits | 2023. | ||
Estimates of realization of non-current tax credits | ||
Tax credits - non-current | 64,426 | 22,433 |
Tax credits | 2024. | ||
Estimates of realization of non-current tax credits | ||
Tax credits - non-current | 40,853 | 8,054 |
Tax credits | 2025. | ||
Estimates of realization of non-current tax credits | ||
Tax credits - non-current | 11,660 | R$ 49413 |
Tax credits | 2026 and after | ||
Estimates of realization of non-current tax credits | ||
Tax credits - non-current | R$ 7661 |
INCOME AND SOCIAL CONTRIBUTIO_3
INCOME AND SOCIAL CONTRIBUTION TAXES - Reconciliation (Details) - BRL (R$) R$ in Thousands | 12 Months Ended | |||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Reconciliations of taxes at statutory rates to amounts presented in the Statement of Income | ||||
Income (loss) before income taxes | R$ 20272568 | R$ 3495678 | R$ 1674720 | |
Statutory tax rates | 34.00% | 34.00% | 34.00% | |
Income and social contribution taxes at statutory rates | R$ 6892673 | R$ 1188531 | R$ 569405 | |
Tax adjustment with respect to: | ||||
Difference in tax rates in foreign companies | 403,431 | 530,715 | 75,428 | |
Equity in earnings of unconsolidated companies | 191,474 | 51,873 | (5,797) | |
Interest on equity | 406,022 | 98,739 | 69 | |
Interests on tax lawsuits | 551,624 | |||
Tax credits and incentives | 112,521 | 31,800 | 8,852 | |
Deferred tax assets not recognized / Realization, net | 482,497 | (587,917) | 1,097 | |
Other permanent differences, net | 31,474 | (44,303) | 31,923 | |
Income and social contribution taxes | (4,713,630) | (1,107,624) | (457,833) | |
Current | (4,306,223) | (908,051) | (240,400) | |
Deferred | R$ 407407 | R$ 199573 | R$ 217433 | |
Income taxes | ||||
Reconciliations of taxes at statutory rates to amounts presented in the Statement of Income | ||||
Statutory tax rates | 25.00% | 25.00% | 25.00% | |
Social contribution taxes | ||||
Reconciliations of taxes at statutory rates to amounts presented in the Statement of Income | ||||
Statutory tax rates | 9.00% | 9.00% | 9.00% | |
Foreign subsidiaries | Minimum | ||||
Reconciliations of taxes at statutory rates to amounts presented in the Statement of Income | ||||
Foreign tax rate | 23.00% | 23.00% | 23.00% | |
Foreign subsidiaries | Maximum | ||||
Reconciliations of taxes at statutory rates to amounts presented in the Statement of Income | ||||
Foreign tax rate | 35.00% | 35.00% | 35.00% | |
Foreign subsidiaries with mainly financial activities | ||||
Reconciliations of taxes at statutory rates to amounts presented in the Statement of Income | ||||
Foreign tax rate | 0.00% | 0.00% | 0.00% |
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, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Breakdown and changes in deferred income and social contribution tax assets and liabilities at statutory tax rates | |||
Balance as of beginning of the year | R$ 3331792 | R$ 3553806 | R$ 3755686 |
Recognized in income | (407,407) | (199,573) | (217,433) |
Others | (3,687) | (86,093) | |
Effect of selling of subsidiary and Others | (36,226) | ||
Comprehensive Income | (90,365) | 63,652 | 51,779 |
Balance as of end of the year | 2,830,333 | 3,331,792 | 3,553,806 |
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 the year | 1,220,485 | 1,341,464 | 1,339,933 |
Recognized in income | (556,480) | (157,207) | 4,781 |
Others | (24,312) | ||
Effect of selling of subsidiary and Others | (36,226) | ||
Comprehensive Income | 10,156 | 36,228 | 32,976 |
Balance as of end of the year | 649,849 | 1,220,485 | 1,341,464 |
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 the year | 290,276 | 350,810 | 337,258 |
Recognized in income | (187,814) | (60,534) | 13,552 |
Others | 20,625 | ||
Balance as of end of the year | 123,087 | 290,276 | 350,810 |
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 the year | 385,463 | 242,794 | 270,417 |
Recognized in income | 37,256 | 140,871 | (27,848) |
Comprehensive Income | 33 | 1,798 | 225 |
Balance as of end of the year | 422,752 | 385,463 | 242,794 |
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 the year | 392,257 | 294,031 | 286,494 |
Recognized in income | (35,812) | (6,848) | (29,739) |
Comprehensive Income | (57,828) | 105,074 | 37,276 |
Balance as of end of the year | 298,617 | 392,257 | 294,031 |
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 the year | 501,114 | 575,719 | 525,818 |
Recognized in income | (144,352) | (114,627) | 73,067 |
Comprehensive Income | 2,312 | 40,022 | (23,166) |
Balance as of end of the year | 359,074 | 501,114 | 575,719 |
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 the year | 1,057,541 | 1,177,428 | 1,284,377 |
Recognized in income | 511,763 | (119,178) | (106,640) |
Comprehensive Income | 7 | (709) | (309) |
Balance as of end of the year | 1,569,311 | 1,057,541 | 1,177,428 |
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 the year | 35,520 | 23,618 | 83,837 |
Recognized in income | 6,576 | 11,740 | (75,142) |
Comprehensive Income | (5,832) | 162 | 14,923 |
Balance as of end of the year | 36,264 | 35,520 | 23,618 |
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 the year | (550,864) | (452,058) | (372,448) |
Recognized in income | (38,544) | 106,210 | (69,464) |
Others | (86,093) | ||
Comprehensive Income | (39,213) | (118,923) | (10,146) |
Balance as of end of the year | R$ 628621 | R$ 550864 | R$ 452058 |
INCOME AND SOCIAL CONTRIBUTIO_5
INCOME AND SOCIAL CONTRIBUTION TAXES - Classification of net deferred asset (liability) (Details) - BRL (R$) R$ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
INCOME AND SOCIAL CONTRIBUTION TAXES | ||||
Total | R$ 2830333 | R$ 3331792 | R$ 3553806 | R$ 3755686 |
Non-current assets | 2,929,308 | 3,393,354 | 4,071,219 | 3,874,054 |
Non-current liabilities | R$ 98975 | R$ 61562 | R$ 517413 | R$ 118368 |
INCOME AND SOCIAL CONTRIBUTIO_6
INCOME AND SOCIAL CONTRIBUTION TAXES - Unrecognized deferred income tax assets (Details) - BRL (R$) R$ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
INCOME AND SOCIAL CONTRIBUTION TAXES | ||
Tax assets which have no expiration date | R$ 240231 | R$ 764845 |
Foreign subsidiaries | ||
INCOME AND SOCIAL CONTRIBUTION TAXES | ||
Tax credits on capital losses for which no deferred tax asset recognised | 1,256,438 | 1,180,067 |
Tax losses of state credits for which no deferred tax asset recognised | R$ 1285373 | R$ 1623459 |
INVESTMENTS IN ASSOCIATES AND_3
INVESTMENTS IN ASSOCIATES AND JOINT VENTURES (Details) - BRL (R$) R$ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
INVESTMENTS IN ASSOCIATES AND JOINT VENTURES | |||
Balance at beginning of year | R$ 2271629 | R$ 1812399 | R$ 1367802 |
Equity in earnings | 563,158 | 152,569 | (17,050) |
Other comprehensive income | 225,507 | 358,816 | 55,038 |
Capital increase | 27,500 | 42,782 | 470,990 |
Capital reduction | (141,095) | (20,344) | |
Results in operations with subsidiary and joint ventures (note 3.4) | 511,514 | ||
Dividends/Interest on equity | (117,438) | (94,937) | 44,037 |
Balance at end of year | 3,340,775 | 2,271,629 | 1,812,399 |
Investments in North America | |||
INVESTMENTS IN ASSOCIATES AND JOINT VENTURES | |||
Balance at beginning of year | 908,339 | 681,807 | 301,272 |
Equity in earnings | 279,948 | 23,494 | (111,637) |
Other comprehensive income | 173,934 | 165,479 | 28,182 |
Capital increase | 42,782 | 463,990 | |
Results in operations with subsidiary and joint ventures (note 3.4) | 511,514 | ||
Dividends/Interest on equity | (2,460) | (5,223) | |
Balance at end of year | 1,871,275 | 908,339 | 681,807 |
Investments in South America | |||
INVESTMENTS IN ASSOCIATES AND JOINT VENTURES | |||
Balance at beginning of year | 976,045 | 748,392 | 701,233 |
Equity in earnings | 268,291 | 99,913 | 66,468 |
Other comprehensive income | 52,278 | 195,286 | 21,282 |
Capital reduction | (141,095) | (20,344) | |
Dividends/Interest on equity | (84,186) | (67,546) | 20,247 |
Balance at end of year | 1,071,333 | 976,045 | 748,392 |
Investments in Special Steel | |||
INVESTMENTS IN ASSOCIATES AND JOINT VENTURES | |||
Balance at beginning of year | 231,152 | 224,201 | 213,899 |
Equity in earnings | 28,831 | 8,900 | 6,779 |
Other comprehensive income | 710 | (1,949) | 3,523 |
Dividends/Interest on equity | (9,025) | ||
Balance at end of year | 251,668 | 231,152 | 224,201 |
Other investments | |||
INVESTMENTS IN ASSOCIATES AND JOINT VENTURES | |||
Balance at beginning of year | 156,093 | 157,999 | 151,398 |
Equity in earnings | (13,912) | 20,262 | 21,340 |
Other comprehensive income | (1,415) | 2,051 | |
Capital increase | 27,500 | 7,000 | |
Dividends/Interest on equity | (21,767) | (22,168) | 23,790 |
Balance at end of year | R$ 146499 | R$ 156093 | R$ 157999 |
PROPERTY, PLANT AND EQUIPMENT -
PROPERTY, PLANT AND EQUIPMENT - Changes (Details) - BRL (R$) R$ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
PROPERTY, PLANT AND EQUIPMENT | |||
Balance, beginning of the year | R$ 17252915 | R$ 15901493 | |
Impairment of non-financial assets | 0 | (411,925) | R$ 0 |
Balance, end of the year | R$ 18741786 | R$ 17252915 | R$ 15901493 |
Average rate of capitalized interest | 3.30% | 3.80% | 6.00% |
Gross cost | |||
PROPERTY, PLANT AND EQUIPMENT | |||
Balance, beginning of the year | R$ 49095210 | R$ 43291837 | R$ 41072186 |
Additions | 3,026,023 | 1,650,778 | 1,746,600 |
Capitalized interest | 32,876 | 24,622 | 24,676 |
Disposals | (535,086) | (888,140) | (367,685) |
Business Combination | 486,757 | ||
Loss of control of subsidiary (note 3.4) | (598,232) | ||
Impairment of non-financial assets | (411,925) | ||
Foreign exchange effect | 1,889,141 | 4,941,281 | 816,060 |
Balance, end of the year | 52,909,932 | 49,095,210 | 43,291,837 |
Accumulated depreciation | |||
PROPERTY, PLANT AND EQUIPMENT | |||
Balance, beginning of the year | (31,842,295) | (27,390,344) | (25,525,705) |
Depreciation | (2,057,411) | (1,905,637) | (1,577,182) |
Disposals | 481,264 | 860,610 | 290,935 |
Loss of control of subsidiary (note 3.4) | 422,602 | ||
Foreign exchange effect | (1,172,306) | (3,406,924) | (578,392) |
Balance, end of the year | (34,168,146) | (31,842,295) | (27,390,344) |
Land and buildings | |||
PROPERTY, PLANT AND EQUIPMENT | |||
Balance, beginning of the year | 4,795,317 | 4,399,481 | |
Balance, end of the year | 4,680,220 | 4,795,317 | 4,399,481 |
Land and buildings | Gross cost | |||
PROPERTY, PLANT AND EQUIPMENT | |||
Balance, beginning of the year | 9,939,856 | 8,912,943 | 8,700,749 |
Additions | 20,661 | 50,848 | 28,449 |
Transfers | 224,789 | 207,551 | 115,452 |
Disposals | (41,475) | (226,920) | (54,699) |
Business Combination | 275,076 | ||
Loss of control of subsidiary (note 3.4) | (168,222) | ||
Impairment of non-financial assets | (198,196) | ||
Foreign exchange effect | 245,005 | 918,554 | 122,992 |
Balance, end of the year | 10,220,614 | 9,939,856 | 8,912,943 |
Land and buildings | Accumulated depreciation | |||
PROPERTY, PLANT AND EQUIPMENT | |||
Balance, beginning of the year | (5,144,539) | (4,513,462) | (4,181,805) |
Depreciation | (383,122) | (413,252) | (295,615) |
Transfers | 6,693 | ||
Disposals | 23,046 | 223,174 | 38,826 |
Loss of control of subsidiary (note 3.4) | 84,286 | ||
Foreign exchange effect | (126,758) | (440,999) | (74,868) |
Balance, end of the year | (5,540,394) | (5,144,539) | (4,513,462) |
Machines, equipments, and installations | |||
PROPERTY, PLANT AND EQUIPMENT | |||
Balance, beginning of the year | 9,366,248 | 9,189,797 | |
Balance, end of the year | 9,554,394 | 9,366,248 | 9,189,797 |
Machines, equipments, and installations | Gross cost | |||
PROPERTY, PLANT AND EQUIPMENT | |||
Balance, beginning of the year | 34,900,469 | 31,031,208 | 29,608,998 |
Additions | 159,387 | 98,372 | 76,756 |
Transfers | 1,125,706 | 695,512 | 884,161 |
Disposals | (383,593) | (505,580) | (165,139) |
Business Combination | 173,453 | ||
Loss of control of subsidiary (note 3.4) | (414,955) | ||
Impairment of non-financial assets | (213,729) | ||
Foreign exchange effect | 1,476,437 | 3,621,233 | 626,432 |
Balance, end of the year | 36,863,451 | 34,900,469 | 31,031,208 |
Machines, equipments, and installations | Accumulated depreciation | |||
PROPERTY, PLANT AND EQUIPMENT | |||
Balance, beginning of the year | (25,534,221) | (21,841,411) | (20,366,821) |
Depreciation | (1,468,513) | (1,354,559) | (1,136,040) |
Transfers | (1,201) | (20) | |
Disposals | 369,173 | 497,434 | 145,019 |
Loss of control of subsidiary (note 3.4) | 332,312 | ||
Foreign exchange effect | (1,006,607) | (2,835,685) | (483,549) |
Balance, end of the year | (27,309,057) | (25,534,221) | (21,841,411) |
Data electronic equipment | |||
PROPERTY, PLANT AND EQUIPMENT | |||
Balance, beginning of the year | 64,468 | 72,127 | |
Balance, end of the year | 97,012 | 64,468 | 72,127 |
Data electronic equipment | Gross cost | |||
PROPERTY, PLANT AND EQUIPMENT | |||
Balance, beginning of the year | 922,143 | 802,549 | 753,078 |
Additions | 21,595 | 9,765 | 13,955 |
Transfers | 48,827 | 13,653 | 24,037 |
Disposals | (2,982) | (11,487) | (1,890) |
Business Combination | 29 | ||
Loss of control of subsidiary (note 3.4) | (2,545) | ||
Foreign exchange effect | 32,978 | 107,634 | 13,369 |
Balance, end of the year | 1,020,016 | 922,143 | 802,549 |
Data electronic equipment | Accumulated depreciation | |||
PROPERTY, PLANT AND EQUIPMENT | |||
Balance, beginning of the year | (857,675) | (730,422) | (686,946) |
Depreciation | (41,973) | (37,616) | (33,143) |
Disposals | 2,981 | 11,169 | 1,818 |
Loss of control of subsidiary (note 3.4) | 2,542 | ||
Foreign exchange effect | (28,879) | (100,806) | (12,151) |
Balance, end of the year | (923,004) | (857,675) | (730,422) |
Property, plant and equipment under construction | |||
PROPERTY, PLANT AND EQUIPMENT | |||
Balance, beginning of the year | 2,254,205 | 1,515,729 | |
Balance, end of the year | 3,620,929 | 2,254,205 | 1,515,729 |
Property, plant and equipment under construction | Gross cost | |||
PROPERTY, PLANT AND EQUIPMENT | |||
Balance, beginning of the year | 2,254,205 | 1,515,729 | 1,021,247 |
Additions | 2,649,417 | 1,369,947 | 1,506,343 |
Capitalized interest | 32,876 | 24,622 | 24,676 |
Transfers | (1,405,597) | (939,231) | (1,038,693) |
Disposals | (19,462) | (40,314) | |
Business Combination | 36,563 | ||
Loss of control of subsidiary (note 3.4) | (7,143) | ||
Foreign exchange effect | 116,633 | 246,575 | 42,470 |
Balance, end of the year | 3,620,929 | 2,254,205 | 1,515,729 |
Other | |||
PROPERTY, PLANT AND EQUIPMENT | |||
Balance, beginning of the year | 772,677 | 724,359 | |
Balance, end of the year | 789,231 | 772,677 | 724,359 |
Other | Gross cost | |||
PROPERTY, PLANT AND EQUIPMENT | |||
Balance, beginning of the year | 1,078,537 | 1,029,408 | 988,114 |
Additions | 174,963 | 121,846 | 121,097 |
Transfers | 6,275 | 22,515 | 15,043 |
Disposals | (87,574) | (144,153) | (105,643) |
Business Combination | 1,636 | ||
Loss of control of subsidiary (note 3.4) | (5,367) | ||
Foreign exchange effect | 18,088 | 47,285 | 10,797 |
Balance, end of the year | 1,184,922 | 1,078,537 | 1,029,408 |
Other | Accumulated depreciation | |||
PROPERTY, PLANT AND EQUIPMENT | |||
Balance, beginning of the year | (305,860) | (305,049) | (290,133) |
Depreciation | (163,803) | (100,210) | (112,384) |
Transfers | (5,492) | 20 | |
Disposals | 86,064 | 128,833 | 105,272 |
Loss of control of subsidiary (note 3.4) | 3,462 | ||
Foreign exchange effect | (10,062) | (29,434) | (7,824) |
Balance, end of the year | R$ 395691 | R$ 305860 | R$ 305049 |
PROPERTY, PLANT AND EQUIPMENT_2
PROPERTY, PLANT AND EQUIPMENT - Useful Lives (Details) | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Buildings | Minimum | |||
PROPERTY, PLANT AND EQUIPMENT | |||
Useful lives of property, plant, and equipment | 10 years | 10 years | 10 years |
Buildings | Maximum | |||
PROPERTY, PLANT AND EQUIPMENT | |||
Useful lives of property, plant, and equipment | 33 years | 33 years | 33 years |
Machines, equipments, and installations | Minimum | |||
PROPERTY, PLANT AND EQUIPMENT | |||
Useful lives of property, plant, and equipment | 10 years | 10 years | 10 years |
Machines, equipments, and installations | Maximum | |||
PROPERTY, PLANT AND EQUIPMENT | |||
Useful lives of property, plant, and equipment | 20 years | 20 years | 20 years |
Furniture and fixture | Minimum | |||
PROPERTY, PLANT AND EQUIPMENT | |||
Useful lives of property, plant, and equipment | 5 years | 5 years | 5 years |
Furniture and fixture | Maximum | |||
PROPERTY, PLANT AND EQUIPMENT | |||
Useful lives of property, plant, and equipment | 10 years | 10 years | 10 years |
Vehicles | Minimum | |||
PROPERTY, PLANT AND EQUIPMENT | |||
Useful lives of property, plant, and equipment | 3 years | 3 years | 3 years |
Vehicles | Maximum | |||
PROPERTY, PLANT AND EQUIPMENT | |||
Useful lives of property, plant, and equipment | 5 years | 5 years | 5 years |
Data electronic equipment | Minimum | |||
PROPERTY, PLANT AND EQUIPMENT | |||
Useful lives of property, plant, and equipment | 2 years 6 months | 2 years 6 months | 2 years 6 months |
Data electronic equipment | Maximum | |||
PROPERTY, PLANT AND EQUIPMENT | |||
Useful lives of property, plant, and equipment | 6 years | 6 years | 6 years |
PROPERTY, PLANT AND EQUIPMENT_3
PROPERTY, PLANT AND EQUIPMENT - Impairment (Details) - BRL (R$) R$ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Land, buildings and construction | ||
PROPERTY, PLANT AND EQUIPMENT | ||
Carrying value of impaired assets | R$ 352287 | R$ 345087 |
Machines, equipments, and installations | ||
PROPERTY, PLANT AND EQUIPMENT | ||
Carrying value of impaired assets | 622,382 | 710,476 |
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, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Changes in goodwill | |||
Goodwill at beginning of the year | R$ 12103519 | R$ 9469311 | R$ 9112390 |
Foreign exchange effect | 873,906 | 2,634,208 | 356,921 |
Results in operations with subsidiary and joint ventures (note 3,4) | (549,898) | ||
Goodwill at end of the year | 12,427,527 | 12,103,519 | 9,469,311 |
Gross cost | |||
Changes in goodwill | |||
Goodwill at beginning of the year | 22,421,588 | 17,445,205 | 16,783,958 |
Foreign exchange effect | 1,469,190 | 4,976,383 | 661,247 |
Results in operations with subsidiary and joint ventures (note 3,4) | (549,898) | ||
Goodwill at end of the year | 23,340,880 | 22,421,588 | 17,445,205 |
Accumulated impairment losses | |||
Changes in goodwill | |||
Goodwill at beginning of the year | (10,318,069) | (7,975,894) | (7,671,568) |
Foreign exchange effect | (595,284) | (2,342,175) | (304,326) |
Goodwill at end of the year | R$ 10913353 | R$ 10318069 | R$ 7975894 |
GOODWILL - Goodwill by segment
GOODWILL - Goodwill by segment (Details) - BRL (R$) R$ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Goodwill by segment | ||||
Goodwill | R$ 12427527 | R$ 12103519 | R$ 9469311 | R$ 9112390 |
Brazil | ||||
Goodwill by segment | ||||
Goodwill | 373,135 | 373,135 | 373,135 | |
Special Steel | ||||
Goodwill by segment | ||||
Goodwill | 4,111,619 | 3,828,841 | 2,969,752 | |
North America | ||||
Goodwill by segment | ||||
Goodwill | R$ 7942773 | R$ 7901543 | R$ 6126424 |
INTANGIBLE ASSETS - Changes in
INTANGIBLE ASSETS - Changes in intangible assets by type (Details) - BRL (R$) R$ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
INTANGIBLE ASSETS | |||
Balance at beginning of the year | R$ 622578 | R$ 673262 | R$ 836096 |
Foreign exchange effect | 30,889 | 127,770 | 19,195 |
Acquisition | 166,310 | 154,250 | 100,313 |
Amortization | (310,017) | (332,704) | (282,342) |
Balance at end of the year | 509,760 | 622,578 | 673,262 |
Supplier relationships | |||
INTANGIBLE ASSETS | |||
Balance at beginning of the year | 16,778 | 21,415 | 26,719 |
Amortization | (4,055) | (4,637) | (5,304) |
Balance at end of the year | 12,723 | 16,778 | 21,415 |
Software development | |||
INTANGIBLE ASSETS | |||
Balance at beginning of the year | 373,869 | 364,812 | 415,640 |
Foreign exchange effect | 17,609 | 42,890 | 6,137 |
Acquisition | 166,310 | 154,250 | 100,313 |
Amortization | (177,674) | (188,083) | (157,278) |
Balance at end of the year | R$ 380114 | 373,869 | 364,812 |
Estimated useful lives | 5 years | ||
Customers contracts and relationships | |||
INTANGIBLE ASSETS | |||
Balance at beginning of the year | R$ 230704 | 283,423 | 387,299 |
Foreign exchange effect | 13,247 | 83,806 | 12,586 |
Amortization | (127,028) | (136,525) | (116,462) |
Balance at end of the year | 116,923 | 230,704 | 283,423 |
Other intangible assets | |||
INTANGIBLE ASSETS | |||
Balance at beginning of the year | 1,227 | 3,612 | 6,438 |
Foreign exchange effect | 33 | 1,074 | 472 |
Amortization | R$ 1260 | (3,459) | (3,298) |
Balance at end of the year | R$ 1227 | R$ 3612 | |
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, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Composition of other intangible assets by segment | ||||
Other intangible assets | R$ 509760 | R$ 622578 | R$ 673262 | R$ 836096 |
Brazil Operation | ||||
Composition of other intangible assets by segment | ||||
Other intangible assets | 207,053 | 220,303 | 238,243 | |
Special Steel Operation | ||||
Composition of other intangible assets by segment | ||||
Other intangible assets | 130,719 | 156,557 | 132,934 | |
South America Operation | ||||
Composition of other intangible assets by segment | ||||
Other intangible assets | 1,039 | 1,534 | 1,729 | |
North America Operation | ||||
Composition of other intangible assets by segment | ||||
Other intangible assets | R$ 170949 | R$ 244184 | R$ 300356 |
LEASING - Right-of-use assets (
LEASING - Right-of-use assets (Details) - BRL (R$) R$ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Summary of changes in the Right-of-use assets | |||
Balance at beginning of the year | R$ 815311 | ||
Balance at end of the year | 861,744 | R$ 815311 | |
Gross cost | |||
Summary of changes in the Right-of-use assets | |||
Balance at beginning of the year | 1,281,690 | 987,135 | R$ 836368 |
Additions | 221,046 | 234,823 | 143,521 |
Disposals | (137,785) | (30,605) | (35,555) |
Remeasurements | 106,391 | 9,693 | 32,212 |
Loss of control of subsidiary (note 3.4) | (3,196) | ||
Foreign exchange effect | 30,690 | 80,644 | 10,589 |
Balance at end of the year | 1,498,836 | 1,281,690 | 987,135 |
Accumulated impairment losses | |||
Summary of changes in the Right-of-use assets | |||
Balance at beginning of the year | (466,379) | (209,821) | |
Depreciation | (291,134) | (260,761) | (214,771) |
Disposals | 133,631 | 23,081 | 6,588 |
Loss of control of subsidiary (note 3.4) | 2,090 | ||
Foreign exchange effect | (15,300) | (18,878) | (1,638) |
Balance at end of the year | (637,092) | (466,379) | (209,821) |
Right-of-use assets. | |||
Summary of changes in the Right-of-use assets | |||
Balance at beginning of the year | 815,311 | 777,314 | |
Balance at end of the year | 861,744 | 815,311 | 777,314 |
Land and buildings | Gross cost | |||
Summary of changes in the Right-of-use assets | |||
Balance at beginning of the year | 301,940 | 283,994 | 243,250 |
Additions | 48,504 | 5,670 | 14,062 |
Disposals | (5,621) | (14,583) | (10,493) |
Remeasurements | 40,024 | 111 | 33,322 |
Foreign exchange effect | 8,152 | 26,748 | 3,853 |
Balance at end of the year | 392,999 | 301,940 | 283,994 |
Land and buildings | Accumulated impairment losses | |||
Summary of changes in the Right-of-use assets | |||
Balance at beginning of the year | (97,619) | (49,483) | |
Depreciation | (59,284) | (51,451) | (50,080) |
Disposals | 3,668 | 8,601 | 1,330 |
Foreign exchange effect | (3,574) | (5,286) | (733) |
Balance at end of the year | (156,809) | (97,619) | (49,483) |
Land and buildings | Right-of-use assets. | |||
Summary of changes in the Right-of-use assets | |||
Balance at beginning of the year | 204,321 | 234,511 | |
Balance at end of the year | 236,190 | 204,321 | 234,511 |
Machines, equipments, and installations | Gross cost | |||
Summary of changes in the Right-of-use assets | |||
Balance at beginning of the year | 738,330 | 533,286 | 436,401 |
Additions | 135,652 | 185,116 | 117,653 |
Disposals | (109,947) | (14,846) | (22,993) |
Remeasurements | 55,866 | (3,035) | (2,346) |
Loss of control of subsidiary (note 3.4) | (2,894) | ||
Foreign exchange effect | 13,828 | 37,809 | 4,571 |
Balance at end of the year | 830,835 | 738,330 | 533,286 |
Machines, equipments, and installations | Accumulated impairment losses | |||
Summary of changes in the Right-of-use assets | |||
Balance at beginning of the year | (284,656) | (123,277) | |
Depreciation | (186,300) | (166,741) | (127,399) |
Disposals | 108,532 | 13,453 | 4,250 |
Loss of control of subsidiary (note 3.4) | 1,860 | ||
Foreign exchange effect | (7,889) | (8,091) | (128) |
Balance at end of the year | (368,453) | (284,656) | (123,277) |
Machines, equipments, and installations | Right-of-use assets. | |||
Summary of changes in the Right-of-use assets | |||
Balance at beginning of the year | 453,674 | 410,009 | |
Balance at end of the year | 462,382 | 453,674 | 410,009 |
Data electronic equipment | Gross cost | |||
Summary of changes in the Right-of-use assets | |||
Balance at beginning of the year | 120,476 | 107,413 | 106,787 |
Additions | 291 | 175 | 742 |
Disposals | (151) | (162) | |
Remeasurements | 6,456 | 12,548 | |
Loss of control of subsidiary (note 3.4) | (302) | ||
Foreign exchange effect | 111 | 340 | 46 |
Balance at end of the year | 126,881 | 120,476 | 107,413 |
Data electronic equipment | Accumulated impairment losses | |||
Summary of changes in the Right-of-use assets | |||
Balance at beginning of the year | (30,925) | (15,396) | |
Depreciation | (13,800) | (15,459) | (15,419) |
Disposals | 97 | 32 | |
Loss of control of subsidiary (note 3.4) | 230 | ||
Foreign exchange effect | (45) | (70) | (9) |
Balance at end of the year | (44,443) | (30,925) | (15,396) |
Data electronic equipment | Right-of-use assets. | |||
Summary of changes in the Right-of-use assets | |||
Balance at beginning of the year | 89,551 | 92,017 | |
Balance at end of the year | 82,438 | 89,551 | 92,017 |
Other | Gross cost | |||
Summary of changes in the Right-of-use assets | |||
Balance at beginning of the year | 120,944 | 62,442 | 49,930 |
Additions | 36,599 | 43,862 | 11,064 |
Disposals | (22,066) | (1,176) | (1,907) |
Remeasurements | 4,045 | 69 | 1,236 |
Foreign exchange effect | 8,599 | 15,747 | 2,119 |
Balance at end of the year | 148,121 | 120,944 | 62,442 |
Other | Accumulated impairment losses | |||
Summary of changes in the Right-of-use assets | |||
Balance at beginning of the year | (53,179) | (21,665) | |
Depreciation | (31,750) | (27,110) | (21,873) |
Disposals | 21,334 | 1,027 | 976 |
Foreign exchange effect | (3,792) | (5,431) | (768) |
Balance at end of the year | (67,387) | (53,179) | (21,665) |
Other | Right-of-use assets. | |||
Summary of changes in the Right-of-use assets | |||
Balance at beginning of the year | 67,765 | 40,777 | |
Balance at end of the year | R$ 80734 | R$ 67765 | R$ 40777 |
LEASING - Leasing payable (Deta
LEASING - Leasing payable (Details) - BRL (R$) R$ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Leasing payable | ||
Leasing payable | R$ 918365 | R$ 856474 |
Current | 275,086 | 231,703 |
Non-current | 643,279 | 624,771 |
Financial expense for the year | R$ 68789 | R$ 61727 |
Minimum | ||
Leasing payable | ||
Discount rate | 3.50% | 3.70% |
Maximum | ||
Leasing payable | ||
Discount rate | 16.30% | 10.80% |
2021 | ||
Leasing payable | ||
Leasing payable | R$ 231703 | |
2022 | ||
Leasing payable | ||
Leasing payable | R$ 275086 | 193,314 |
2023 | ||
Leasing payable | ||
Leasing payable | 211,576 | 140,019 |
2024 | ||
Leasing payable | ||
Leasing payable | 127,718 | 90,812 |
2025 | ||
Leasing payable | ||
Leasing payable | 88,682 | 65,561 |
2026 | ||
Leasing payable | ||
Leasing payable | R$ 215303 | R$ 135065 |
TRADE ACCOUNTS PAYABLE (Details
TRADE ACCOUNTS PAYABLE (Details) - BRL (R$) R$ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
TRADE ACCOUNTS PAYABLE | ||
Trade accounts payable | R$ 8017140 | R$ 5437953 |
Domestic market | ||
TRADE ACCOUNTS PAYABLE | ||
Trade accounts payable | 5,230,270 | 3,941,924 |
Debtor risk | ||
TRADE ACCOUNTS PAYABLE | ||
Trade accounts payable | 807,915 | 726,045 |
Intercompany | ||
TRADE ACCOUNTS PAYABLE | ||
Trade accounts payable | 47,597 | 8,958 |
Imports | ||
TRADE ACCOUNTS PAYABLE | ||
Trade accounts payable | R$ 1931358 | R$ 761026 |
SHORT-TERM DEBT AND LONG-TERM_3
SHORT-TERM DEBT AND LONG-TERM DEBT - Summary (Details) - BRL (R$) R$ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
LOANS AND FINANCING | ||
Total Loans and Financing | R$ 11109786 | R$ 14612934 |
Current | 234,537 | 1,424,043 |
Non-current | R$ 10875249 | 13,188,891 |
Weighted average | ||
LOANS AND FINANCING | ||
Annual charges (as a percent) | 5.76% | |
Working capital | ||
LOANS AND FINANCING | ||
Total Loans and Financing | R$ 480905 | 1,178,557 |
Financing of property, plant and equipment and others | ||
LOANS AND FINANCING | ||
Total Loans and Financing | 102,232 | 333,797 |
Ten/Thirty Year Bonds | ||
LOANS AND FINANCING | ||
Total Loans and Financing | R$ 10526649 | R$ 13100580 |
SHORT-TERM DEBT AND LONG-TERM_4
SHORT-TERM DEBT AND LONG-TERM DEBT - Principal and Interest (Details) - BRL (R$) R$ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
SHORT-TERM DEBT AND LONG-TERM DEBT | ||
Principal amount of loans and Financing | R$ 10952983 | R$ 14413188 |
Interest accrued of loans and Financing | 156,803 | 199,746 |
Total Loans and Financing | R$ 11109786 | R$ 14612934 |
SHORT-TERM DEBT AND LONG-TERM_5
SHORT-TERM DEBT AND LONG-TERM DEBT - By Currency (Details) - BRL (R$) R$ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
LOANS AND FINANCING | ||
Total Loans and Financing | R$ 11109786 | R$ 14612934 |
Brazilian Real (BRL) | ||
LOANS AND FINANCING | ||
Total Loans and Financing | 461,187 | 1,245,988 |
U.S. Dollar (USD) | ||
LOANS AND FINANCING | ||
Total Loans and Financing | 10,535,532 | R$ 13366946 |
Other currencies | ||
LOANS AND FINANCING | ||
Total Loans and Financing | R$ 113067 |
SHORT-TERM DEBT AND LONG-TERM_6
SHORT-TERM DEBT AND LONG-TERM DEBT - Amortization schedules (Details) - BRL (R$) R$ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Amortization schedules of long-term loans and financing | ||
Long-term debt | R$ 10875249 | R$ 13188891 |
2022 | ||
Amortization schedules of long-term loans and financing | ||
Long-term debt | 5,210 | |
2023 | ||
Amortization schedules of long-term loans and financing | ||
Long-term debt | 1,115,211 | 2,108,324 |
2024 | ||
Amortization schedules of long-term loans and financing | ||
Long-term debt | 878,044 | 1,813,225 |
2025 | ||
Amortization schedules of long-term loans and financing | ||
Long-term debt | 405,788 | 682,422 |
2026 | ||
Amortization schedules of long-term loans and financing | ||
Long-term debt | R$ 8476206 | R$ 8579710 |
SHORT-TERM DEBT AND LONG-TERM_7
SHORT-TERM DEBT AND LONG-TERM DEBT - Additional disclosures (Details) R$ in Thousands, $ in Millions | 3 Months Ended | 12 Months Ended | ||||
Dec. 31, 2021BRL (R$) | Dec. 31, 2021BRL (R$) | Dec. 31, 2020BRL (R$) | Dec. 31, 2019BRL (R$) | Dec. 31, 2021USD ($) | Oct. 31, 2019BRL (R$) | |
LOANS AND FINANCING | ||||||
Loans and financing | R$ 11109786 | R$ 11109786 | R$ 14612934 | |||
Principal amount | 2,208,000 | 2,208,000 | $ 395.8 | |||
IFRS, Debt Instrument, Face Amount | R$ 2208000 | 2,208,000 | 395.8 | |||
Number of Bilateral Loans Early Settled | 2 | |||||
Repayments of borrowings, classified as financing activities | R$ 775000 | 5,116,621 | 5,084,028 | R$ 4885083 | ||
Working capital | ||||||
LOANS AND FINANCING | ||||||
Loans and financing | 480,905 | 480,905 | R$ 1178557 | |||
Global Credit Line | ||||||
LOANS AND FINANCING | ||||||
Amount of outstanding balance credit facility | 474,000 | 474,000 | $ 85 | |||
Maximum borrowing capacity | R$ 4464000 | R$ 4464000 | R$ 800000 |
DEBENTURES - Summary (Details)
DEBENTURES - Summary (Details) R$ in Thousands | 12 Months Ended | |
Dec. 31, 2021BRL (R$)instrument | Dec. 31, 2020BRL (R$) | |
DEBENTURES | ||
Total Debentures | R$ 2929907 | R$ 2902417 |
Current debentures | 1,531,956 | 7,463 |
Non-current debentures | R$ 1397951 | 2,894,954 |
14th | ||
DEBENTURES | ||
Quantity Issued | instrument | 20,000 | |
Quantity Held in treasury | instrument | 20,000 | |
15th | ||
DEBENTURES | ||
Quantity Issued | instrument | 1,500,000 | |
Total Debentures | R$ 1513958 | 1,500,985 |
16th - A | ||
DEBENTURES | ||
Quantity Issued | instrument | 600,000 | |
Total Debentures | R$ 607031 | 600,759 |
16th - B | ||
DEBENTURES | ||
Quantity Issued | instrument | 800,000 | |
Total Debentures | R$ 808918 | R$ 800673 |
DEBENTURES - Amortization sched
DEBENTURES - Amortization schedule (Details) - BRL (R$) R$ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
DEBENTURES | ||
Non-current debentures | R$ 1397951 | R$ 2894954 |
2022 | ||
DEBENTURES | ||
Non-current debentures | 1,497,760 | |
2023 | ||
DEBENTURES | ||
Non-current debentures | 599,390 | 598,960 |
2026 | ||
DEBENTURES | ||
Non-current debentures | R$ 798561 | R$ 798234 |
DEBENTURES - Additional disclos
DEBENTURES - Additional disclosures (Details) R$ in Millions, $ in Millions | Dec. 31, 2021USD ($) | Dec. 31, 2021BRL (R$) | Dec. 31, 2020 |
DEBENTURES | |||
Face amount | $ 395.8 | R$ 2208.0 | |
Liabilities, Debentures | CDI | Average | |||
DEBENTURES | |||
Interest rate (as a percent) | 4.62% | 4.62% | 2.90% |
FINANCIAL INSTRUMENTS - Fair va
FINANCIAL INSTRUMENTS - Fair value of financial instruments (Details) - BRL (R$) R$ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
FINANCIAL INSTRUMENTS | ||
Financial assets | R$ 3882966 | R$ 4357884 |
Financial liabilities | 15,622,107 | 19,838,551 |
Liabilities, Loans and Financing | ||
FINANCIAL INSTRUMENTS | ||
Financial liabilities | 11,109,786 | 14,612,934 |
Financial liabilities, at fair value | 12,630,940 | 17,014,948 |
Liabilities, Debentures | ||
FINANCIAL INSTRUMENTS | ||
Financial liabilities | 2,929,907 | 2,902,417 |
Financial liabilities, at fair value | 2,911,424 | 2,775,619 |
Liabilities, Related parties | ||
FINANCIAL INSTRUMENTS | ||
Financial liabilities | 24,648 | 22,855 |
Financial liabilities, at fair value | 24,648 | 22,855 |
Fair value of derivatives | ||
FINANCIAL INSTRUMENTS | ||
Financial liabilities | 971 | |
Financial liabilities, at fair value | 971 | |
Liabilities, Other current liabilities | ||
FINANCIAL INSTRUMENTS | ||
Financial liabilities | 1,090,396 | 797,082 |
Financial liabilities, at fair value | 1,090,396 | 797,082 |
Liabilities, Other non-current liabilities | ||
FINANCIAL INSTRUMENTS | ||
Financial liabilities | 421,873 | 514,886 |
Financial liabilities, at fair value | 421,873 | 514,886 |
Obligations with FIDC (current liabilities) | ||
FINANCIAL INSTRUMENTS | ||
Financial liabilities | 45,497 | 944,513 |
Financial liabilities, at fair value | 45,497 | 944,513 |
Obligations with FIDC (non-current liabilities) | ||
FINANCIAL INSTRUMENTS | ||
Financial liabilities | 42,893 | |
Financial liabilities, at fair value | 42,893 | |
Assets, Short-term investments | ||
FINANCIAL INSTRUMENTS | ||
Financial assets | 2,626,212 | 3,041,143 |
Financial assets, at fair value | 2,626,212 | 3,041,143 |
Assets, Related parties | ||
FINANCIAL INSTRUMENTS | ||
Financial assets | 2,678 | 134,354 |
Financial assets, at fair value | 2,678 | 134,354 |
Assets, Fair value of derivatives | ||
FINANCIAL INSTRUMENTS | ||
Financial assets | 3,246 | |
Financial assets, at fair value | 3,246 | |
Assets, Other current assets | ||
FINANCIAL INSTRUMENTS | ||
Financial assets | 679,193 | 591,523 |
Financial assets, at fair value | 679,193 | 591,523 |
Assets, Other non-current assets | ||
FINANCIAL INSTRUMENTS | ||
Financial assets | 571,637 | 590,864 |
Financial assets, at fair value | R$ 571637 | R$ 590864 |
FINANCIAL INSTRUMENTS - Capital
FINANCIAL INSTRUMENTS - Capital management risk (Details) - Capital management risk R$ in Billions | 12 Months Ended |
Dec. 31, 2021BRL (R$) | |
FINANCIAL INSTRUMENTS | |
Average maturity | 6 years |
Minimum | |
FINANCIAL INSTRUMENTS | |
Net debt/EBITDA | 1 |
Maximum | |
FINANCIAL INSTRUMENTS | |
Net debt/EBITDA | 1.5 |
Gross debt limit | R$ 12 |
FINANCIAL INSTRUMENTS - Liquidi
FINANCIAL INSTRUMENTS - Liquidity risk (Details) - Liquidity risk - BRL (R$) R$ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Disclosure of maturity analysis for financial liabilities held for managing liquidity risk | ||
Contractual obligations | R$ 30977914 | R$ 32800346 |
Less than 1 year | ||
Disclosure of maturity analysis for financial liabilities held for managing liquidity risk | ||
Contractual obligations | 11,806,631 | 9,377,095 |
1-3 years | ||
Disclosure of maturity analysis for financial liabilities held for managing liquidity risk | ||
Contractual obligations | 3,043,551 | 5,724,459 |
4-5 years | ||
Disclosure of maturity analysis for financial liabilities held for managing liquidity risk | ||
Contractual obligations | 2,419,579 | 3,563,916 |
2026 | ||
Disclosure of maturity analysis for financial liabilities held for managing liquidity risk | ||
Contractual obligations | 13,708,153 | 14,134,876 |
Liabilities, Trade accounts payable | ||
Disclosure of maturity analysis for financial liabilities held for managing liquidity risk | ||
Contractual obligations | 8,017,140 | 5,437,953 |
Liabilities, Trade accounts payable | Less than 1 year | ||
Disclosure of maturity analysis for financial liabilities held for managing liquidity risk | ||
Contractual obligations | 8,017,140 | 5,437,953 |
Liabilities, Loans and Financing | ||
Disclosure of maturity analysis for financial liabilities held for managing liquidity risk | ||
Contractual obligations | 17,885,671 | 21,962,204 |
Liabilities, Loans and Financing | Less than 1 year | ||
Disclosure of maturity analysis for financial liabilities held for managing liquidity risk | ||
Contractual obligations | 851,225 | 2,131,402 |
Liabilities, Loans and Financing | 1-3 years | ||
Disclosure of maturity analysis for financial liabilities held for managing liquidity risk | ||
Contractual obligations | 2,227,608 | 3,465,577 |
Liabilities, Loans and Financing | 4-5 years | ||
Disclosure of maturity analysis for financial liabilities held for managing liquidity risk | ||
Contractual obligations | 2,308,361 | 3,531,312 |
Liabilities, Loans and Financing | 2026 | ||
Disclosure of maturity analysis for financial liabilities held for managing liquidity risk | ||
Contractual obligations | 12,498,477 | 12,833,913 |
Liabilities, Debentures | ||
Disclosure of maturity analysis for financial liabilities held for managing liquidity risk | ||
Contractual obligations | 3,492,689 | 3,077,960 |
Liabilities, Debentures | Less than 1 year | ||
Disclosure of maturity analysis for financial liabilities held for managing liquidity risk | ||
Contractual obligations | 1,802,373 | 66,145 |
Liabilities, Debentures | 1-3 years | ||
Disclosure of maturity analysis for financial liabilities held for managing liquidity risk | ||
Contractual obligations | 780,537 | 2,174,184 |
Liabilities, Debentures | 4-5 years | ||
Disclosure of maturity analysis for financial liabilities held for managing liquidity risk | ||
Contractual obligations | 111,218 | 32,604 |
Liabilities, Debentures | 2026 | ||
Disclosure of maturity analysis for financial liabilities held for managing liquidity risk | ||
Contractual obligations | 798,561 | 805,027 |
Liabilities, Related parties | ||
Disclosure of maturity analysis for financial liabilities held for managing liquidity risk | ||
Contractual obligations | 24,648 | 22,855 |
Liabilities, Related parties | 2026 | ||
Disclosure of maturity analysis for financial liabilities held for managing liquidity risk | ||
Contractual obligations | 24,648 | 22,855 |
Liabilities, Obligation with FIDC | ||
Disclosure of maturity analysis for financial liabilities held for managing liquidity risk | ||
Contractual obligations | 45,497 | 987,406 |
Liabilities, Obligation with FIDC | Less than 1 year | ||
Disclosure of maturity analysis for financial liabilities held for managing liquidity risk | ||
Contractual obligations | 45,497 | 944,513 |
Liabilities, Obligation with FIDC | 1-3 years | ||
Disclosure of maturity analysis for financial liabilities held for managing liquidity risk | ||
Contractual obligations | 42,893 | |
Liabilities, Other current liabilities | ||
Disclosure of maturity analysis for financial liabilities held for managing liquidity risk | ||
Contractual obligations | 1,090,396 | 797,082 |
Liabilities, Other current liabilities | Less than 1 year | ||
Disclosure of maturity analysis for financial liabilities held for managing liquidity risk | ||
Contractual obligations | 1,090,396 | 797,082 |
Liabilities, Other non-current liabilities | ||
Disclosure of maturity analysis for financial liabilities held for managing liquidity risk | ||
Contractual obligations | 421,873 | 514,886 |
Liabilities, Other non-current liabilities | 1-3 years | ||
Disclosure of maturity analysis for financial liabilities held for managing liquidity risk | ||
Contractual obligations | 35,406 | 41,805 |
Liabilities, Other non-current liabilities | 2026 | ||
Disclosure of maturity analysis for financial liabilities held for managing liquidity risk | ||
Contractual obligations | R$ 386467 | R$ 473081 |
FINANCIAL INSTRUMENTS - Sensiti
FINANCIAL INSTRUMENTS - Sensitivity analysis (Details) R$ in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021BRL (R$) | Dec. 31, 2021USD ($) | Dec. 31, 2020BRL (R$) | |
Interest Rate Swap | |||
Sensitivity analysis | |||
Impact on income statement based on change in assumption | R$ 55964 | R$ 85147 | |
Foreign currency risk | |||
Sensitivity analysis | |||
Percentage of change | 5.00% | 5.00% | 5.00% |
Impact on income statement based on change in assumption | R$ 19036 | R$ 15057 | |
Impact on income statement based on change in assumption, after effects of changes in net investment hedge | R$ 19036 | R$ 15047 | |
Foreign currency risk | Interest Rate Swap | |||
Sensitivity analysis | |||
Interest rate change (as a percent) | 5.00% | 5.00% | 5.00% |
Foreign currency risk | Non-Deliverable Forwards | |||
Sensitivity analysis | |||
Percentage of change | 5.00% | 5.00% | 5.00% |
Impact on income statement based on change in assumption | R$ 0 | R$ 3703 | |
Interest rate risk | |||
Sensitivity analysis | |||
Interest rate change (as a percent) | 0.10% | 0.10% | 0.10% |
Impact on income statement based on change in assumption | R$ 55964 | R$ 85147 | |
Interest rate risk | Interest Rate Swap | |||
Sensitivity analysis | |||
Impact on income statement based on change in assumption | R$ 3703 | ||
Products sold price risk | |||
Sensitivity analysis | |||
Percentage of change | 1.00% | 1.00% | 1.00% |
Impact on income statement based on change in assumption | R$ 783451 | R$ 438147 | |
Products sold price risk | Cross currency swap | |||
Sensitivity analysis | |||
Impact on income statement based on change in assumption | R$ 438147 | ||
Raw materials and commodity price risk | |||
Sensitivity analysis | |||
Percentage of change | 1.00% | 1.00% | 1.00% |
Impact on income statement based on change in assumption | R$ 437210 | R$ 269454 | |
Raw materials and commodity price risk | Interest rate swaps and foreign currency swaps | |||
Sensitivity analysis | |||
Impact on income statement based on change in assumption | 269,454 | ||
Commodity contracts | |||
Sensitivity analysis | |||
Interest rate change (as a percent) | 5.00% | 5.00% | |
Impact on income statement based on change in assumption | $ | $ 4,892 | ||
Impact on income statement based on change in assumption, after effects of changes in net investment hedge | R$ 0 | ||
Commodity contracts | Non-Deliverable Forwards | |||
Sensitivity analysis | |||
Impact on income statement based on change in assumption | R$ 4892 |
FINANCIAL INSTRUMENTS - Financi
FINANCIAL INSTRUMENTS - Financial instruments per category (Details) - BRL (R$) R$ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
FINANCIAL INSTRUMENTS | ||
Financial assets | R$ 3882966 | R$ 4357884 |
Financial liabilities | 15,622,107 | 19,838,551 |
Financial income (expenses) from assets | 1,437,731 | 597,027 |
Financial income (expenses) from liabilities | (2,188,185) | (2,295,734) |
Loans and Financing | ||
FINANCIAL INSTRUMENTS | ||
Financial liabilities | 11,109,786 | 14,612,934 |
Debentures | ||
FINANCIAL INSTRUMENTS | ||
Financial liabilities | 2,929,907 | 2,902,417 |
Related parties | ||
FINANCIAL INSTRUMENTS | ||
Financial liabilities | 24,648 | 22,855 |
Obligations with FIDC (current liabilities) | ||
FINANCIAL INSTRUMENTS | ||
Financial liabilities | 45,497 | 944,513 |
Other current liabilities | ||
FINANCIAL INSTRUMENTS | ||
Financial liabilities | 1,090,396 | 797,082 |
Other non-current liabilities | ||
FINANCIAL INSTRUMENTS | ||
Financial liabilities | 421,873 | 514,886 |
Fair value of derivatives | ||
FINANCIAL INSTRUMENTS | ||
Financial liabilities | 971 | |
Liabilities, Obligations with FIDC (non-current liabilities) | ||
FINANCIAL INSTRUMENTS | ||
Financial liabilities | 42,893 | |
Liabilities at market value with gains and losses recognized in income | ||
FINANCIAL INSTRUMENTS | ||
Financial liabilities | 971 | |
Financial income (expenses) from liabilities | (10,421) | (1,632) |
Liabilities at market value with gains and losses recognized in income | Fair value of derivatives | ||
FINANCIAL INSTRUMENTS | ||
Financial liabilities | 971 | |
Other financial liabilities at amortized cost | ||
FINANCIAL INSTRUMENTS | ||
Financial liabilities | 15,622,107 | 19,837,580 |
Financial income (expenses) from liabilities | (2,177,764) | (2,294,102) |
Other financial liabilities at amortized cost | Loans and Financing | ||
FINANCIAL INSTRUMENTS | ||
Financial liabilities | 11,109,786 | 14,612,934 |
Other financial liabilities at amortized cost | Debentures | ||
FINANCIAL INSTRUMENTS | ||
Financial liabilities | 2,929,907 | 2,902,417 |
Other financial liabilities at amortized cost | Related parties | ||
FINANCIAL INSTRUMENTS | ||
Financial liabilities | 24,648 | 22,855 |
Other financial liabilities at amortized cost | Obligations with FIDC (current liabilities) | ||
FINANCIAL INSTRUMENTS | ||
Financial liabilities | 45,497 | 944,513 |
Other financial liabilities at amortized cost | Other current liabilities | ||
FINANCIAL INSTRUMENTS | ||
Financial liabilities | 1,090,396 | 797,082 |
Other financial liabilities at amortized cost | Other non-current liabilities | ||
FINANCIAL INSTRUMENTS | ||
Financial liabilities | 421,873 | 514,886 |
Other financial liabilities at amortized cost | Liabilities, Obligations with FIDC (non-current liabilities) | ||
FINANCIAL INSTRUMENTS | ||
Financial liabilities | 42,893 | |
Short-term investments | ||
FINANCIAL INSTRUMENTS | ||
Financial assets | 2,626,212 | 3,041,143 |
Fair value of derivatives | ||
FINANCIAL INSTRUMENTS | ||
Financial assets | 3,246 | |
Related parties | ||
FINANCIAL INSTRUMENTS | ||
Financial assets | 2,678 | 134,354 |
Other current assets | ||
FINANCIAL INSTRUMENTS | ||
Financial assets | 679,193 | 591,523 |
Other non-current assets | ||
FINANCIAL INSTRUMENTS | ||
Financial assets | 571,637 | 590,864 |
Financial asset at amortised cost | ||
FINANCIAL INSTRUMENTS | ||
Financial assets | 1,165,088 | 1,256,741 |
Financial income (expenses) from assets | 1,226,743 | 487,631 |
Financial asset at amortised cost | Fair value of derivatives | ||
FINANCIAL INSTRUMENTS | ||
Financial assets | 3,246 | |
Financial asset at amortised cost | Related parties | ||
FINANCIAL INSTRUMENTS | ||
Financial assets | 2,678 | 134,354 |
Financial asset at amortised cost | Other current assets | ||
FINANCIAL INSTRUMENTS | ||
Financial assets | 679,193 | 591,523 |
Financial asset at amortised cost | Other non-current assets | ||
FINANCIAL INSTRUMENTS | ||
Financial assets | 479,971 | 530,864 |
Assets at fair value with gains and losses recognized in income | ||
FINANCIAL INSTRUMENTS | ||
Financial assets | 2,717,878 | 3,101,143 |
Financial income (expenses) from assets | 210,988 | 109,396 |
Assets at fair value with gains and losses recognized in income | Short-term investments | ||
FINANCIAL INSTRUMENTS | ||
Financial assets | 2,626,212 | 3,041,143 |
Assets at fair value with gains and losses recognized in income | Other non-current assets | ||
FINANCIAL INSTRUMENTS | ||
Financial assets | R$ 91666 | R$ 60000 |
FINANCIAL INSTRUMENTS - Swap Co
FINANCIAL INSTRUMENTS - Swap Contracts (Details) R$ in Thousands, $ in Millions | Dec. 31, 2021BRL (R$)USD ($) | Dec. 31, 2020BRL (R$)USD ($) |
Swap Contracts | ||
Amount receivable | R$ 3246 | |
Amount payable | R$ 971 | |
Interest Rate Swap | Maturity in 2022 | ||
Swap Contracts | ||
Notional value | $ | 5.3 | 9.9 |
Amount receivable | R$ 3246 | |
Amount payable | R$ 971 |
FINANCIAL INSTRUMENTS - Effecti
FINANCIAL INSTRUMENTS - Effectiveness testing for derivatives (Details) - BRL (R$) R$ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
FINANCIAL INSTRUMENTS | |||
Current assets | R$ 3246 | R$ 0 | |
Total derivative assets | 3,246 | ||
Current liabilities | 0 | 971 | |
Total derivative liabilities | 971 | ||
Net Income | |||
Gains on financial instruments | 28,349 | 858 | |
Losses on financial instruments | (10,421) | (1,632) | |
Total gains (losses) on financial instruments | 17,928 | (774) | R$ 15118 |
Other comprehensive income | |||
Gains (Losses) on financial instruments | 1,907 | (1,972) | R$ 3502 |
Total gains (Losses) on financial instruments | R$ 1907 | R$ 1972 |
FINANCIAL INSTRUMENTS - Net inv
FINANCIAL INSTRUMENTS - Net investment hedge (Details) R$ in Thousands, $ in Billions | 12 Months Ended | 24 Months Ended | ||
Dec. 31, 2021BRL (R$) | Dec. 31, 2020BRL (R$) | Dec. 31, 2019BRL (R$) | Dec. 31, 2021USD ($) | |
Net investment hedge | ||||
Gain (loss) on net investment hedge, recognized in OCI | R$ 695102 | R$ 2504914 | R$ 322948 | |
Ten/Thirty Years Bonds | ||||
Net investment hedge | ||||
Gain (loss) on net investment hedge, recognized in income | R$ 2504914000 | |||
Ten/Thirty Years Bonds | Hedges of net investment in foreign operations | ||||
Net investment hedge | ||||
Gain (loss) on net investment hedge, recognized in OCI | $ | $ 1.4 | |||
Gain (loss) on net investment hedge, recognized in income | R$ 695102000 |
FINANCIAL INSTRUMENTS - Measure
FINANCIAL INSTRUMENTS - Measurement of fair value (Details) - BRL (R$) R$ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
FINANCIAL INSTRUMENTS | ||
Total financial assets | R$ 3882966 | R$ 4357884 |
Total financial liabilities | 15,622,107 | 19,838,551 |
Fair Value - Measured at Fair Value on a Recurring Basis | ||
FINANCIAL INSTRUMENTS | ||
Total financial assets | 3,882,966 | 4,357,884 |
Total financial liabilities | 15,622,107 | 19,838,551 |
Liabilities, Short-term debts | Fair Value - Measured at Fair Value on a Recurring Basis | ||
FINANCIAL INSTRUMENTS | ||
Current financial liabilities | 234,537 | 1,424,043 |
Liabilities, Long-term debt | Fair Value - Measured at Fair Value on a Recurring Basis | ||
FINANCIAL INSTRUMENTS | ||
Non-current financial liabilities | 10,875,249 | 13,188,891 |
Liabilities, Debentures | ||
FINANCIAL INSTRUMENTS | ||
Total financial liabilities | 2,929,907 | 2,902,417 |
Liabilities, Debentures | Fair Value - Measured at Fair Value on a Recurring Basis | ||
FINANCIAL INSTRUMENTS | ||
Current financial liabilities | 1,531,956 | 7,463 |
Non-current financial liabilities | 1,397,951 | 2,894,954 |
Fair value of derivatives | ||
FINANCIAL INSTRUMENTS | ||
Total financial liabilities | 971 | |
Fair value of derivatives | Fair Value - Measured at Fair Value on a Recurring Basis | ||
FINANCIAL INSTRUMENTS | ||
Current financial liabilities | 971 | |
Liabilities, Related parties | ||
FINANCIAL INSTRUMENTS | ||
Total financial liabilities | 24,648 | 22,855 |
Liabilities, Related parties | Fair Value - Measured at Fair Value on a Recurring Basis | ||
FINANCIAL INSTRUMENTS | ||
Non-current financial liabilities | 24,648 | 22,855 |
Liabilities, Obligation with FIDC | Fair Value - Measured at Fair Value on a Recurring Basis | ||
FINANCIAL INSTRUMENTS | ||
Current financial liabilities | 45,497 | 944,513 |
Non-current financial liabilities | 42,893 | |
Liabilities, Obligations with FIDC (non-current liabilities) | ||
FINANCIAL INSTRUMENTS | ||
Total financial liabilities | 42,893 | |
Liabilities, Other current liabilities | ||
FINANCIAL INSTRUMENTS | ||
Total financial liabilities | 1,090,396 | 797,082 |
Liabilities, Other current liabilities | Fair Value - Measured at Fair Value on a Recurring Basis | ||
FINANCIAL INSTRUMENTS | ||
Current financial liabilities | 1,090,396 | 797,082 |
Liabilities, Other non-current liabilities | ||
FINANCIAL INSTRUMENTS | ||
Total financial liabilities | 421,873 | 514,886 |
Liabilities, Other non-current liabilities | Fair Value - Measured at Fair Value on a Recurring Basis | ||
FINANCIAL INSTRUMENTS | ||
Non-current financial liabilities | 421,873 | 514,886 |
Assets, Short-term investments | ||
FINANCIAL INSTRUMENTS | ||
Total financial assets | 2,626,212 | 3,041,143 |
Assets, Short-term investments | Fair Value - Measured at Fair Value on a Recurring Basis | ||
FINANCIAL INSTRUMENTS | ||
Current financial assets | 2,626,212 | 3,041,143 |
Assets, Fair value of derivatives | ||
FINANCIAL INSTRUMENTS | ||
Total financial assets | 3,246 | |
Assets, Fair value of derivatives | Fair Value - Measured at Fair Value on a Recurring Basis | ||
FINANCIAL INSTRUMENTS | ||
Current financial assets | 3,246 | |
Assets, Related parties | ||
FINANCIAL INSTRUMENTS | ||
Total financial assets | 2,678 | 134,354 |
Assets, Related parties | Fair Value - Measured at Fair Value on a Recurring Basis | ||
FINANCIAL INSTRUMENTS | ||
Non-current financial assets | 2,678 | 134,354 |
Assets, Other current assets | ||
FINANCIAL INSTRUMENTS | ||
Total financial assets | 679,193 | 591,523 |
Assets, Other current assets | Fair Value - Measured at Fair Value on a Recurring Basis | ||
FINANCIAL INSTRUMENTS | ||
Current financial assets | 679,193 | 591,523 |
Assets, Other non-current assets | ||
FINANCIAL INSTRUMENTS | ||
Total financial assets | 571,637 | 590,864 |
Assets, Other non-current assets | Fair Value - Measured at Fair Value on a Recurring Basis | ||
FINANCIAL INSTRUMENTS | ||
Non-current financial assets | 571,637 | 590,864 |
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 | 3,882,966 | 4,357,884 |
Total financial liabilities | 15,622,107 | 19,838,551 |
Quoted Prices in Non-Active Markets for Similar Assets (Level 2) | Liabilities, Short-term debts | Fair Value - Measured at Fair Value on a Recurring Basis | ||
FINANCIAL INSTRUMENTS | ||
Current financial liabilities | 234,537 | 1,424,043 |
Quoted Prices in Non-Active Markets for Similar Assets (Level 2) | Liabilities, Long-term debt | Fair Value - Measured at Fair Value on a Recurring Basis | ||
FINANCIAL INSTRUMENTS | ||
Non-current financial liabilities | 10,875,249 | 13,188,891 |
Quoted Prices in Non-Active Markets for Similar Assets (Level 2) | Liabilities, Debentures | Fair Value - Measured at Fair Value on a Recurring Basis | ||
FINANCIAL INSTRUMENTS | ||
Current financial liabilities | 1,531,956 | 7,463 |
Non-current financial liabilities | 1,397,951 | 2,894,954 |
Quoted Prices in Non-Active Markets for Similar Assets (Level 2) | Fair value of derivatives | Fair Value - Measured at Fair Value on a Recurring Basis | ||
FINANCIAL INSTRUMENTS | ||
Current financial liabilities | 971 | |
Quoted Prices in Non-Active Markets for Similar Assets (Level 2) | Liabilities, Related parties | Fair Value - Measured at Fair Value on a Recurring Basis | ||
FINANCIAL INSTRUMENTS | ||
Non-current financial liabilities | 24,648 | 22,855 |
Quoted Prices in Non-Active Markets for Similar Assets (Level 2) | Liabilities, Obligation with FIDC | Fair Value - Measured at Fair Value on a Recurring Basis | ||
FINANCIAL INSTRUMENTS | ||
Current financial liabilities | 45,497 | 944,513 |
Non-current financial liabilities | 42,893 | |
Quoted Prices in Non-Active Markets for Similar Assets (Level 2) | Liabilities, Other current liabilities | Fair Value - Measured at Fair Value on a Recurring Basis | ||
FINANCIAL INSTRUMENTS | ||
Current financial liabilities | 1,090,396 | 797,082 |
Quoted Prices in Non-Active Markets for Similar Assets (Level 2) | Liabilities, Other non-current liabilities | Fair Value - Measured at Fair Value on a Recurring Basis | ||
FINANCIAL INSTRUMENTS | ||
Non-current financial liabilities | 421,873 | 514,886 |
Quoted Prices in Non-Active Markets for Similar Assets (Level 2) | Assets, Short-term investments | Fair Value - Measured at Fair Value on a Recurring Basis | ||
FINANCIAL INSTRUMENTS | ||
Current financial assets | 2,626,212 | 3,041,143 |
Quoted Prices in Non-Active Markets for Similar Assets (Level 2) | Assets, Fair value of derivatives | Fair Value - Measured at Fair Value on a Recurring Basis | ||
FINANCIAL INSTRUMENTS | ||
Current financial assets | 3,246 | |
Quoted Prices in Non-Active Markets for Similar Assets (Level 2) | Assets, Related parties | Fair Value - Measured at Fair Value on a Recurring Basis | ||
FINANCIAL INSTRUMENTS | ||
Non-current financial assets | 2,678 | 134,354 |
Quoted Prices in Non-Active Markets for Similar Assets (Level 2) | Assets, Other current assets | Fair Value - Measured at Fair Value on a Recurring Basis | ||
FINANCIAL INSTRUMENTS | ||
Current financial assets | 679,193 | 591,523 |
Quoted Prices in Non-Active Markets for Similar Assets (Level 2) | Assets, Other non-current assets | Fair Value - Measured at Fair Value on a Recurring Basis | ||
FINANCIAL INSTRUMENTS | ||
Non-current financial assets | R$ 571637 | R$ 590864 |
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, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Related parties, net | |||
Changes in liabilities from Cash flow from financing activities | |||
Beginning of year | R$ 111499 | R$ 95445 | R$ 26589 |
Cash transactions | |||
Proceeds/(Repayment) from financing activities | 139,556 | (7,777) | (64,089) |
Non cash transactions | |||
Interest expense on loans and Interest on loans with related parties | (6,089) | (8,277) | (4,767) |
Exchange variation and others | 2 | ||
End of year | 21,970 | (111,499) | (95,445) |
Leasing payable | |||
Changes in liabilities from Cash flow from financing activities | |||
Beginning of year | 856,474 | 804,269 | 836,368 |
Cash transactions | |||
Proceeds/(Repayment) from financing activities | (275,944) | (247,914) | (161,824) |
Interest paid on loans and financing | (68,699) | (61,727) | (83,620) |
Non cash transactions | |||
Interest expense on loans and Interest on loans with related parties | 68,699 | 61,727 | 83,620 |
Exchange variation and others | 337,835 | 300,119 | 129,725 |
End of year | 918,365 | 856,474 | 804,269 |
Debt, Debentures and Losses/Gains on financial instruments, net - Derivative instruments | |||
Changes in liabilities from Cash flow from financing activities | |||
Beginning of year | 17,516,322 | 16,047,021 | 14,878,542 |
Cash transactions | |||
Proceeds/(Repayment) from financing activities | (4,506,918) | (1,963,283) | 700,490 |
Interest paid on loans and financing | (1,100,826) | (1,079,981) | (945,027) |
Non cash transactions | |||
Interest expense on loans and Interest on loans with related parties | 1,059,841 | 1,022,460 | 938,120 |
Exchange variation and others | 1,068,028 | 3,490,105 | 474,896 |
End of year | R$ 14036447 | R$ 17516322 | R$ 16047021 |
TAXES PAYABLE (Details)
TAXES PAYABLE (Details) - BRL (R$) R$ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
TAXES PAYABLE | ||
Payroll charges | R$ 136428 | R$ 100301 |
ICMS (state VAT) | 92,320 | 99,430 |
COFINS (tax on revenue) | 26,139 | 51,444 |
IPI (federal VAT) | 41,474 | 38,153 |
IVA (value-added tax) and others | 251,812 | 310,761 |
Taxes payable | R$ 548173 | R$ 600089 |
TAX, CIVIL AND LABOR CLAIMS A_3
TAX, CIVIL AND LABOR CLAIMS AND CONTINGENT ASSETS - Provisions (Details) - BRL (R$) R$ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Other provisions disclosures | ||||
Provision for tax, civil and labor liabilities | R$ 1741026 | R$ 1172511 | ||
Legal proceedings provision | ||||
Other provisions disclosures | ||||
Provision for tax, civil and labor liabilities | 1,741,026 | 1,172,511 | R$ 809299 | R$ 770305 |
Tax Provisions | ||||
Other provisions disclosures | ||||
Provision for tax, civil and labor liabilities | 1,270,473 | 706,104 | ||
Labor provisions | ||||
Other provisions disclosures | ||||
Provision for tax, civil and labor liabilities | 435,803 | 428,821 | ||
Civil provisions | ||||
Other provisions disclosures | ||||
Provision for tax, civil and labor liabilities | R$ 34750 | R$ 37586 |
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, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Changes in the tax, labor and civil provisions : | |||
Balance at the beginning of the year | R$ 1172511 | ||
Balance at the end of the year | 1,741,026 | R$ 1172511 | |
Legal proceedings provision | |||
Changes in the tax, labor and civil provisions : | |||
Balance at the beginning of the year | 1,172,511 | 809,299 | R$ 770305 |
Additions | 801,412 | 559,513 | 249,868 |
Interests | 42,435 | 104,473 | 70,788 |
Reversal of accrued amounts | (276,251) | (304,678) | (282,239) |
Foreign exchange effect on provisions in foreign currency | 919 | 3,904 | 577 |
Balance at the end of the year | R$ 1741026 | R$ 1172511 | R$ 809299 |
TAX, CIVIL AND LABOR CLAIMS A_5
TAX, CIVIL AND LABOR CLAIMS AND CONTINGENT ASSETS - Tax contingencies (Details) - BRL (R$) R$ in Thousands | Dec. 31, 2021 | Apr. 08, 2021 | Jul. 07, 2020 | Dec. 27, 2019 | May 17, 2019 |
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$ 8221463 | ||||
Gerdau Acos Longos S.A. and Gerdau Acominas S.A. | Goodwill Deductibility | Voluntary Appeal, Filed | |||||
Contingencies | |||||
Estimated financial effect of contingent liabilities | 5,456,742 | ||||
Gerdau Acos Longos S.A. | Pending | |||||
Contingencies | |||||
Estimated financial effect of contingent liabilities | 502,804 | ||||
Gerdau Acos Longos S.A. | Goodwill Deductibility | Embargo to Enforcement, Filed | |||||
Contingencies | |||||
Estimated financial effect of contingent liabilities | 402,857 | ||||
Gerdau Acos Longos S.A. | Goodwill Deductibility | Motion for clarification filed | |||||
Contingencies | |||||
Estimated financial effect of contingent liabilities | 299,937 | ||||
Gerdau Acos Longos S.A. | Goodwill Deductibility | Notice of judgment received | |||||
Contingencies | |||||
Estimated financial effect of contingent liabilities | 324,014 | ||||
Gerdau Acos Longos S.A. | Goodwill Deductibility | Pending | |||||
Contingencies | |||||
Estimated financial effect of contingent liabilities | 575,631 | R$ 83699 | |||
Gerdau Acos Longos S.A. | Goodwill Deductibility | Special Appeal, Filed | |||||
Contingencies | |||||
Estimated financial effect of contingent liabilities | 4,390 | R$ 177218 | |||
Gerdau Acos Longos S.A. | Goodwill Deductibility | Voluntary Appeal, Filed | |||||
Contingencies | |||||
Estimated financial effect of contingent liabilities | 145,141 | ||||
Gerdau Acos Especiais S.A. | Goodwill Deductibility | Special Appeal, Filed | |||||
Contingencies | |||||
Estimated financial effect of contingent liabilities | 110,462 | ||||
Gerdau Acos Especiais S.A. | Goodwill Deductibility | Special appeal, pending | |||||
Contingencies | |||||
Estimated financial effect of contingent liabilities | 138,568 | ||||
Tax contingencies | IPI credit on inputs | Pending | |||||
Contingencies | |||||
Estimated financial effect of contingent liabilities | 481,501 | ||||
Tax contingencies | Non-approval of compensation of credits on inputs | Pending | |||||
Contingencies | |||||
Estimated financial effect of contingent liabilities | 1,513,111 | ||||
Tax contingencies | Social security contributions. | Pending | |||||
Contingencies | |||||
Estimated financial effect of contingent liabilities | 135,625 | ||||
Tax contingencies | Other Taxes | Pending | |||||
Contingencies | |||||
Estimated financial effect of contingent liabilities | 671,593 | ||||
Tax contingencies | Goodwill Deductibility | Pending | |||||
Contingencies | |||||
Estimated financial effect of contingent liabilities | 471,829 | R$ 149996 | |||
Tax contingencies | Goodwill Deductibility | Special Appeal, Filed | |||||
Contingencies | |||||
Estimated financial effect of contingent liabilities | 25,090 | ||||
Tax contingencies | Goodwill Deductibility | Voluntary Appeal, Pending | |||||
Contingencies | |||||
Estimated financial effect of contingent liabilities | 217,117 | ||||
Tax contingencies | Goodwill Deductibility | Voluntary Appeal, Filed | |||||
Contingencies | |||||
Estimated financial effect of contingent liabilities | 79,626 | ||||
Tax contingencies | Gerdau Acos Longos S.A. and Gerdau Acominas S.A. | ICMS (State Value Added Tax) | Pending | |||||
Contingencies | |||||
Estimated financial effect of contingent liabilities | 498,889 | ||||
Tax contingencies | Gerdau Acos Longos S.A. | Withholding Income Tax | |||||
Contingencies | |||||
Estimated financial effect of contingent liabilities | 1,362,842 | ||||
Tax contingencies | Gerdau Acos Longos S.A. | Withholding Income Tax | Special Appeal, Filed | |||||
Contingencies | |||||
Estimated financial effect of contingent liabilities | R$ 984924 | ||||
Tax contingencies | Gerdau Internacional Empreendimentos Ltda. and Gerdau Acos Especiais S.A | IRPJ - Corporate Income Tax and CSLL - Social Contribution Tax [Member] | Pending | |||||
Contingencies | |||||
Estimated financial effect of contingent liabilities | 1,274,156 | ||||
Tax contingencies | Gerdau Internacional Empreendimentos Ltda | Corporate Income Tax and Social Contribution Tax | Pending | |||||
Contingencies | |||||
Estimated financial effect of contingent liabilities | 1,047,608 | ||||
Tax contingencies | Gerdau Acos Especiais S.A. | Withholding Income Tax | Special Appeal, Filed | |||||
Contingencies | |||||
Estimated financial effect of contingent liabilities | R$ 377918 | ||||
Tax contingencies | Gerdau Acos Especiais S.A. | Corporate Income Tax and Social Contribution Tax | Embargo to Execution, Filed | |||||
Contingencies | |||||
Estimated financial effect of contingent liabilities | R$ 226548 |
TAX, CIVIL AND LABOR CLAIMS A_6
TAX, CIVIL AND LABOR CLAIMS AND CONTINGENT ASSETS - Civil Contingencies, Labor Contingencies and Administrative proceedings (Details) R$ in Thousands | Aug. 01, 2013BRL (R$) | Sep. 23, 2005BRL (R$)item | Dec. 31, 2021BRL (R$)item |
Contingencies | |||
Number of lawsuits that challenged the investigation | item | 2 | ||
Civil contingencies | Antitrust Legislation | |||
Contingencies | |||
Number of civil construction unions | item | 2 | ||
Fine for existence of cartel on gross revenues (in percentage) | 7.00% | ||
Fine for existence of cartel | R$ 245070 | ||
Fine for existence of cartel updated by judicial accounting | R$ 417820 | ||
Civil contingencies | Other Demands Of a Civil Nature | |||
Contingencies | |||
Estimated financial effect of contingent liabilities | R$ 456848 | ||
Labor Contingencies | |||
Contingencies | |||
Estimated financial effect of contingent liabilities | R$ 452847 |
TAX, CIVIL AND LABOR CLAIMS A_7
TAX, CIVIL AND LABOR CLAIMS AND CONTINGENT ASSETS - Judicial Deposits (Details) - BRL (R$) R$ in Thousands | 12 Months Ended | ||||||||||||
Dec. 31, 2021 | Sep. 30, 2021 | Jul. 14, 2021 | Jun. 30, 2021 | Mar. 25, 2021 | Feb. 24, 2021 | Dec. 31, 2020 | Nov. 18, 2020 | Jun. 29, 2020 | May 27, 2020 | Dec. 18, 2019 | Sep. 16, 2019 | Jul. 19, 2019 | |
Disclosure of other provisions [line items] | |||||||||||||
Tax | R$ 1449699 | R$ 1597995 | |||||||||||
Labor | 73,709 | 95,234 | |||||||||||
Civil | 135,971 | 132,562 | |||||||||||
Judicial deposits | 1,659,379 | R$ 1825791 | |||||||||||
Balance judicial deposits | 1,354,340 | ||||||||||||
Amount of undue payments before proposed action | R$ 683000 | R$ 73500 | |||||||||||
Amount of undue payments before proposed action, net of related expenses | R$ 643000 | ||||||||||||
Procedure to collect differences, amount | R$ 326000 | ||||||||||||
Amount of deposits for which replacement has been requested | 1,700,000 | ||||||||||||
Recovery of Tax Credits Arising From Law suits | 1,200,000 | ||||||||||||
Other operating income lawsuits | 393,300 | ||||||||||||
Tax Credits Monetary Update line | 788,700 | ||||||||||||
Final and unappealable decision, first lawsuit | |||||||||||||
Disclosure of other provisions [line items] | |||||||||||||
Amount of undue payments before proposed action | R$ 122000 | ||||||||||||
Amount of undue payments before proposed action, net of related expenses | R$ 79000 | ||||||||||||
Right to withdraw judicial deposits | R$ 179000 | ||||||||||||
Final and unappealable decision, second lawsuit | |||||||||||||
Disclosure of other provisions [line items] | |||||||||||||
Amount of undue payments before proposed action | R$ 280000 | ||||||||||||
Amount of undue payments before proposed action, net of related expenses | R$ 185000 | ||||||||||||
Right to withdraw judicial deposits | R$ 189000 | ||||||||||||
Final and unappealable decision, third lawsuit | |||||||||||||
Disclosure of other provisions [line items] | |||||||||||||
Amount of undue payments before proposed action | R$ 147000 | ||||||||||||
Amount of undue payments before proposed action, net of related expenses | 135,000 | ||||||||||||
Right to withdraw judicial deposits | R$ 198000 | ||||||||||||
Final and unappealable decision, fourth lawsuit | |||||||||||||
Disclosure of other provisions [line items] | |||||||||||||
Amount of undue payments before proposed action | R$ 940000 | ||||||||||||
Amount of undue payments before proposed action, net of related expenses | 902,000 | ||||||||||||
Right to withdraw judicial deposits | R$ 3000 | ||||||||||||
Final and unappealable decision, fifth lawsuit | |||||||||||||
Disclosure of other provisions [line items] | |||||||||||||
Amount of undue payments before proposed action | 73,500 | ||||||||||||
Amount of undue payments before proposed action, net of related expenses | R$ 45800 | ||||||||||||
Final and unappealable decision, sixth lawsuit | |||||||||||||
Disclosure of other provisions [line items] | |||||||||||||
Amount of undue payments before proposed action | R$ 5700 | ||||||||||||
Amount of undue payments before proposed action, net of related expenses | R$ 3600 | ||||||||||||
Final and unappealable decision, seventh lawsuit | |||||||||||||
Disclosure of other provisions [line items] | |||||||||||||
Amount of undue payments before proposed action | R$ 237000 | ||||||||||||
Amount of undue payments before proposed action, net of related expenses | R$ 230000 | ||||||||||||
Eighth and ninth actions for repetition | |||||||||||||
Disclosure of other provisions [line items] | |||||||||||||
Amount of undue payments before proposed action | 683,000 | ||||||||||||
Amount of undue payments before proposed action, net of related expenses | R$ 643000 |
TAX, CIVIL AND LABOR CLAIMS A_8
TAX, CIVIL AND LABOR CLAIMS AND CONTINGENT ASSETS - Contingent Assets (Details) R$ in Thousands | 3 Months Ended | 12 Months Ended | |
Sep. 30, 2021BRL (R$) | Jun. 30, 2020BRL (R$) | Dec. 31, 2021BRL (R$)kW | |
TAX, CIVIL AND LABOR CLAIMS AND CONTINGENT ASSETS | |||
Minimum industrial consumers monthly electricity consumption limit (in Kilo watt hour) | kW | 2,000 | ||
Maximum period to return the compulsory loan to taxpayers | 20 years | ||
Gain on settlement of litigation, net of expenses incurred | R$ 1391280 | R$ 436000 | |
Amount of other pending lawsuits | R$ 73000 |
TAX, CIVIL AND LABOR CLAIMS A_9
TAX, CIVIL AND LABOR CLAIMS AND CONTINGENT ASSETS - Other contingent assets (Details) R$ in Millions | 12 Months Ended |
Dec. 31, 2021BRL (R$) | |
TAX, CIVIL AND LABOR CLAIMS AND CONTINGENT ASSETS | |
Amount of other pending lawsuits | R$ 73 |
Estimation of Contingent Assets | R$ 750 |
RELATED-PARTY TRANSACTIONS - In
RELATED-PARTY TRANSACTIONS - Intercompany loans (Details) - BRL (R$) R$ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
RELATED PARTY TRANSACTIONS | |||
Assets | R$ 2678 | R$ 134354 | |
Liabilities | (24,648) | (22,855) | |
Net financial income | 6,089 | 8,277 | R$ 4767 |
Fundacao Gerdau | |||
RELATED PARTY TRANSACTIONS | |||
Assets | 2,678 | 17,262 | |
Gerdau Corsa S.A.P.I de C.V. | |||
RELATED PARTY TRANSACTIONS | |||
Assets | 117,092 | ||
Bradley Steel Processors | |||
RELATED PARTY TRANSACTIONS | |||
Liabilities | R$ 24648 | R$ 22855 |
RELATED-PARTY TRANSACTIONS - Op
RELATED-PARTY TRANSACTIONS - Operations with related parties (Details) R$ in Thousands | 12 Months Ended | ||
Dec. 31, 2021BRL (R$) | Dec. 31, 2020BRL (R$)installment | Dec. 31, 2019BRL (R$) | |
Investments | |||
RELATED PARTY TRANSACTIONS | |||
Sales to related parties | R$ 997298 | R$ 887945 | R$ 1572618 |
Purchases from related parties | 304,239 | 208,948 | 198,636 |
Sales to related parties, net of purchases | 693,058 | 678,997 | 1,373,982 |
Controlling shareholders | |||
RELATED PARTY TRANSACTIONS | |||
Sale of property to related party | R$ 21204 | ||
Number of annual installments | installment | 6 | ||
Rental income from related party | R$ 670 | R$ 524 | R$ 554 |
Guarantee fee percentage | 0.95% | ||
Expenses resulting from debenture guarantees | R$ 68 |
RELATED-PARTY TRANSACTIONS - Gu
RELATED-PARTY TRANSACTIONS - Guarantees granted (Details) - Joint-venture - Financial guarantees - BRL (R$) R$ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Gerdau Corsa S.A.P.I de C.V. | |||
Guarantees granted | |||
Original Amount | R$ 4905367 | ||
Carrying Amount | 2,157,290 | R$ 2242865 | R$ 1784868 |
Gerdau Summit Acos Fundidos e Forjados S.A. | |||
Guarantees granted | |||
Original Amount | 130,164 | ||
Carrying Amount | R$ 30125 | 37,285 | |
Gerdau Metaldom S.A; Aceros Corsa S.A De C.V | |||
Guarantees granted | |||
Original Amount | R$ 274560 | ||
Carrying Amount | R$ 241842 |
RELATED-PARTY TRANSACTIONS - Ke
RELATED-PARTY TRANSACTIONS - Key Management compensation and other information from related parties (Details) R$ in Thousands | 12 Months Ended | ||
Dec. 31, 2021BRL (R$)EquityInstruments | Dec. 31, 2020BRL (R$)EquityInstruments | Dec. 31, 2019EquityInstruments | |
RELATED PARTY TRANSACTIONS | |||
Cost of social charges, related to the management | R$ | R$ 23266 | R$ 27830 | |
Key Management personnel (Board of Directors and executive officers) | |||
RELATED PARTY TRANSACTIONS | |||
Key management salaries, variable compensation and benefits | R$ | 61,747 | 33,773 | |
Contributions to management's defined contribution pension plans | R$ | 1,932 | 1,416 | |
Key management long-term incentive plans | R$ | 19,637 | 19,328 | |
Fundacao Gerdau, Instituto Gerdau and Fundacao Ouro Branco | |||
RELATED PARTY TRANSACTIONS | |||
Contributions to defined contribution pension plans | R$ | 35,595 | R$ 104322 | |
Brasil ao Cubo Construo modular Ltda | |||
RELATED PARTY TRANSACTIONS | |||
Other non-current assets related party transaction | R$ | R$ 91666 | ||
Restricted and Performance Shares | Key Management personnel (Board of Directors and executive officers) | |||
Restricted shares granted to Management | |||
Balance, beginning of year | EquityInstruments | 6,456,248 | 6,717,872 | 6,375,547 |
Granted | EquityInstruments | 709,990 | 733,218 | 1,083,116 |
Exercised | EquityInstruments | (3,453,802) | (937,325) | (627,076) |
Cancelled | EquityInstruments | (64,112) | (38,553) | |
Others | EquityInstruments | (6,595) | 75,162 | |
Balance, end of year | EquityInstruments | 3,712,436 | 6,456,248 | 6,717,872 |
EMPLOYEE BENEFITS - Summary (De
EMPLOYEE BENEFITS - Summary (Details) - BRL (R$) R$ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
EMPLOYEE BENEFITS | ||
Plan assets | R$ 4942 | R$ 39196 |
Total liabilities | 1,415,190 | 1,861,439 |
Current | 39 | 208 |
Non-current | 1,415,151 | 1,861,231 |
Defined contribution pension plan | ||
EMPLOYEE BENEFITS | ||
Plan assets | 4,942 | 39,196 |
Defined benefit pension plan | ||
EMPLOYEE BENEFITS | ||
Total liabilities | 1,083,719 | 1,441,592 |
Post-employment health care benefit | ||
EMPLOYEE BENEFITS | ||
Total liabilities | 318,181 | 362,944 |
Retirement and termination benefits | ||
EMPLOYEE BENEFITS | ||
Total liabilities | R$ 13290 | R$ 56903 |
EMPLOYEE BENEFITS - Post-employ
EMPLOYEE BENEFITS - Post-employment defined benefit pension plan (Details) - BRL (R$) R$ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
American 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$ 17822 | |
Increase (decrease) in defined benefit obligation due to decrease in actuarial assumption | 10,392 | |
Post-employment defined benefit pension plans | ||
EMPLOYEE BENEFITS | ||
Accumulated other comprehensive income | R$ 920478 | R$ 1173010 |
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, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Current expenses of the defined benefit pension plans | |||
Cost of current service | R$ 74840 | R$ 69323 | R$ 54518 |
Interest expense | 170,897 | 191,326 | 189,544 |
Return on plan assets | (136,933) | (156,475) | (163,148) |
Past service cost | 7,093 | 3,967 | 2,302 |
Settlement | (847) | (11,609) | (4,712) |
Interest cost on unrecoverable surplus | 4,371 | 7,413 | 16,247 |
Net pension cost (benefit) | R$ 119421 | R$ 103945 | R$ 94751 |
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, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Reconciliations of assets and liabilities of the plans | ||||
Net | R$ 1083719 | R$ 1441592 | ||
Defined benefit obligation | (1,083,719) | (1,441,592) | ||
Present value of the defined benefit obligations | ||||
Reconciliations of assets and liabilities of the plans | ||||
Net | (5,409,065) | (5,921,285) | R$ 4601965 | R$ 4391251 |
Plan assets | ||||
Reconciliations of assets and liabilities of the plans | ||||
Net | 4,647,361 | 4,652,000 | R$ 3656891 | R$ 3568934 |
Asset ceiling restrictions on recognition of net funded assets | ||||
Reconciliations of assets and liabilities of the plans | ||||
Net | R$ 322015 | R$ 172307 |
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, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
EMPLOYEE BENEFITS | |||
Obligation at the beginning of the year | R$ 1441592 | ||
Cost of service | 74,840 | R$ 69323 | R$ 54518 |
Interest expense | 170,897 | 191,326 | 189,544 |
Past service cost | 7,093 | 3,967 | 2,302 |
Obligation at the end of the year | 1,083,719 | 1,441,592 | |
Present value of the defined benefit obligations | |||
EMPLOYEE BENEFITS | |||
Obligation at the beginning of the year | 5,921,285 | 4,601,965 | 4,391,251 |
Cost of service | 74,840 | 69,323 | 54,518 |
Interest expense | 170,897 | 191,326 | 189,544 |
Payment of benefits | (486,310) | (434,650) | (309,817) |
Past service cost | 7,093 | 3,967 | 2,302 |
Settlement | (228,881) | (190,948) | (498,493) |
Gain (loss) on remeasurement | (457,421) | 467,106 | 546,911 |
Exchange Variance | 407,562 | 1,213,196 | 225,749 |
Obligation at the end of the year | R$ 5409065 | R$ 5921285 | R$ 4601965 |
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, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
EMPLOYEE BENEFITS | |||
Fair value of the plan assets at the beginning of the year | R$ 1441592 | ||
Return of the plan assets | 136,933 | R$ 156475 | R$ 163148 |
Fair value of plan assets at the end of the year | (1,083,719) | (1,441,592) | |
Plan assets | |||
EMPLOYEE BENEFITS | |||
Fair value of the plan assets at the beginning of the year | 4,652,000 | 3,656,891 | 3,568,934 |
Return of the plan assets | 136,933 | 156,475 | 163,148 |
Contributions from sponsors | 244,123 | 224,979 | 162,650 |
Settlement | (228,034) | (179,339) | (493,781) |
Payment of benefits | (486,310) | (434,650) | (309,817) |
Remeasurement | 25,498 | 334,675 | 386,767 |
Exchange Variance | 303,151 | 892,969 | 178,990 |
Fair value of plan assets at the end of the year | 4,647,361 | 4,652,000 | R$ 3656891 |
Value of shares included in fair value of plan assets | R$ 17785 | R$ 8745 |
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, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Amounts recognized as actuarial gains and losses in the statement of comprehensive income | |||
Restriction recognized in Other Comprehensive Income | R$ 178941 | R$ 42317 | R$ 94198 |
Remeasurements recognized in Other Comprehensive Income | (303,978) | 90,114 | 65,946 |
Plan assets | |||
Amounts recognized as actuarial gains and losses in the statement of comprehensive income | |||
Gain (loss) on remeasurement | (25,498) | (334,675) | (386,767) |
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$ 457421 | R$ 467106 | R$ 546911 |
EMPLOYEE BENEFITS - Defined b_6
EMPLOYEE BENEFITS - Defined benefit pension plan - Historical actuarial remeasurements (Details) - BRL (R$) R$ in Thousands | 12 Months Ended | ||||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Historical actuarial remeasurements | |||||
Present value of defined benefit obligation | R$ 5409065 | R$ 5921285 | R$ 4601965 | R$ 4391251 | R$ 4314592 |
Fair value of plan assets | 4,647,361 | 4,652,000 | 3,656,891 | 3,568,934 | 3,456,613 |
Surplus (Deficit) | (761,704) | (1,269,285) | (945,074) | (822,317) | (857,979) |
Defined benefit pension plan | Present value of the defined benefit obligations | |||||
Historical actuarial remeasurements | |||||
Experience adjustments on plan liabilities | (457,421) | 467,106 | 546,911 | (370,083) | 235,549 |
Defined benefit pension plan | Plan assets | |||||
Historical actuarial remeasurements | |||||
Experience adjustments on plan assets | R$ 25498 | R$ 334675 | R$ 386767 | R$ 253301 | R$ 232214 |
EMPLOYEE BENEFITS - Defined b_7
EMPLOYEE BENEFITS - Defined benefit pension plan - Allocation of plan assets (Details) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Brazilian Plans | ||
Allocation for plan assets | ||
Fixed income | 99.20% | 99.10% |
Others | 0.80% | 0.90% |
Total | 100.00% | 100.00% |
American Plans | ||
Allocation for plan assets | ||
Fixed income | 50.40% | 46.60% |
Variable income | 43.00% | 47.10% |
Others | 6.60% | 6.30% |
Total | 100.00% | 100.00% |
Defined benefit pension plan | ||
Allocation for plan assets | ||
Target allocation of shares (as a percent) | 50.00% | |
Target allocation of debt securities (as a percent) | 40.00% | |
Target allocation of alternative securities (as a percent) | 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, 2021 | Dec. 31, 2020 |
Brazilian Plans | ||
Summary of assumptions used to calculate the defined benefit plans | ||
Average discount rate | 8.82% | 6.56% |
North America Plan | ||
Summary of assumptions used to calculate the defined benefit plans | ||
Rate of increase in compensation | 3.00% | 3.00% |
North America Plan | Minimum | ||
Summary of assumptions used to calculate the defined benefit plans | ||
Average discount rate | 2.80% | 2.25% |
North America Plan | Maximum | ||
Summary of assumptions used to calculate the defined benefit plans | ||
Average discount rate | 2.50% |
EMPLOYEE BENEFITS - Post-empl_2
EMPLOYEE BENEFITS - Post-employment defined contribution pension plan (Details) - BRL (R$) R$ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Defined contribution pension plan | ||
EMPLOYEE BENEFITS | ||
Total cost | R$ 162133 | R$ 133963 |
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, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Net periodic costs of post-employment health care benefits | |||
Cost of current service | R$ 3458 | R$ 4964 | R$ 3302 |
Interests expense | 8,239 | 11,311 | 10,656 |
Past service cost | (32,434) | (660) | (2,717) |
Net pension cost (benefit) | R$ 20737 | R$ 15615 | R$ 11241 |
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, 2021 | Dec. 31, 2020 |
Funded status of the post-employment health benefits plans | ||
Total net liabilities | R$ 318181 | R$ 362944 |
Present value of the defined benefit obligations | ||
Funded status of the post-employment health benefits plans | ||
Total net liabilities | R$ 318181 | R$ 362944 |
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, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
EMPLOYEE BENEFITS | |||
Cost of service | R$ 3458 | R$ 4964 | R$ 3302 |
Interest expense | 8,239 | 11,311 | 10,656 |
Present value of the defined benefit obligations | |||
EMPLOYEE BENEFITS | |||
Obligation at the beginning of the year | 362,944 | 298,989 | 272,959 |
Cost of service | 3,458 | 4,964 | 3,302 |
Interest expense | 8,239 | 11,311 | 10,656 |
Past service cost | (32,434) | (660) | (2,717) |
Contributions from participants | 2,032 | 2,349 | 2,088 |
Payment of benefits | (17,431) | (20,870) | (15,331) |
Gain (loss) on remeasurement | (36,938) | (23,533) | 11,202 |
Exchange variations | 28,311 | 90,394 | 16,830 |
Obligation at the end of the year | R$ 318181 | R$ 362944 | R$ 298989 |
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, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
EMPLOYEE BENEFITS | |||
Fair value of the plan assets at the beginning of the year | R$ 0 | R$ 0 | |
Contributions from sponsors | 24,713 | 19,150 | R$ 13243 |
Contributions from participants | 2,032 | 2,349 | 2,088 |
Payment of benefits | (26,745) | (21,499) | (15,331) |
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) - BRL (R$) R$ in Thousands | 12 Months Ended | ||||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Historical actuarial remeasurements | |||||
Present value of defined benefit obligation | R$ 5409065 | R$ 5921285 | R$ 4601965 | R$ 4391251 | R$ 4314592 |
Surplus (Deficit) | (761,704) | (1,269,285) | (945,074) | (822,317) | (857,979) |
Post-employment health care benefit | |||||
Historical actuarial remeasurements | |||||
Present value of defined benefit obligation | (318,181) | (362,944) | (298,989) | (272,959) | (316,364) |
Surplus (Deficit) | (318,181) | (362,944) | (298,989) | (272,959) | (316,364) |
Experience adjustments on plan liabilities | (36,938) | (23,533) | 11,202 | R$ 40841 | R$ 14452 |
Amounts recognized as actuarial gains and losses in the statement of comprehensive income | |||||
Losses on actuarial obligation | (36,938) | (23,533) | 11,202 | ||
Post-employment health care benefit | Pension Plan | |||||
Amounts recognized as actuarial gains and losses in the statement of comprehensive income | |||||
Actuarial losses recognized in Equity | R$ 36938 | R$ 23533 | R$ 11202 |
EMPLOYEE BENEFITS - Post-empl_8
EMPLOYEE BENEFITS - Post-employment health care benefit plan - Assumptions (Details) - Post-employment health care benefit | Dec. 31, 2020 | Dec. 31, 2019 |
Minimum | ||
Summary of assumptions used to calculate the defined benefit plans | ||
Average discount rate | 2.80% | 2.25% |
Health treatment - rate assumed next year | 4.99% | 6.10% |
Health treatment - Assumed rate of decline in the cost to achieve in the years of 2028 to 2041 | 3.20% | 4.00% |
Maximum | ||
Summary of assumptions used to calculate the defined benefit plans | ||
Average discount rate | 2.90% | 2.50% |
Health treatment - rate assumed next year | 6.20% | 6.50% |
Health treatment - Assumed rate of decline in the cost to achieve in the years of 2028 to 2041 | 4.50% | 4.40% |
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, 2021BRL (R$) |
Sensitivity analysis | |
Increase in actuarial assumption (as a percent) | 1.00% |
Decrease in actuarial assumption (as a percent) | 1.00% |
Total service costs and interest costs | |
Sensitivity analysis | |
Increase (decrease) in defined benefit obligation due to increase in actuarial assumption | R$ 1710 |
Increase (decrease) in defined benefit obligation due to decrease in actuarial assumption | (1,327) |
Present value of the defined benefit obligations | |
Sensitivity analysis | |
Increase (decrease) in defined benefit obligation due to increase in actuarial assumption | 32,082 |
Increase (decrease) in defined benefit obligation due to decrease in actuarial assumption | R$ 26573 |
EMPLOYEE BENEFITS - Other retir
EMPLOYEE BENEFITS - Other retirement and termination benefits (Details) - BRL (R$) R$ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
EMPLOYEE BENEFITS | |||||
Total obligation | R$ 5409065 | R$ 5921285 | R$ 4601965 | R$ 4391251 | R$ 4314592 |
Retirement and termination benefits | |||||
EMPLOYEE BENEFITS | |||||
Total obligation | R$ 13290 | R$ 56903 |
ENVIRONMENTAL LIABILITIES (Deta
ENVIRONMENTAL LIABILITIES (Details) - BRL (R$) R$ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
ENVIRONMENTAL LIABILITIES | ||
Provision for environmental liabilities | R$ 575709 | R$ 297094 |
Current | 231,711 | 125,992 |
Non-current | R$ 343998 | R$ 171102 |
OBLIGATIONS WITH FIDC - INVES_2
OBLIGATIONS WITH FIDC - INVESTMENT FUND IN CREDIT RIGHTS (Details) - BRL (R$) R$ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
OBLIGATIONS WITH FIDC - INVESTMENT FUND IN CREDIT RIGHTS | ||
Current obligations with FIDC | R$ 45497 | R$ 944513 |
Non-current obligations with FIDC | 0 | R$ 42893 |
Book value of acquistion of credit rights | R$ 954916 |
EQUITY - Common and preferred s
EQUITY - Common and preferred shares outstanding (Details) - shares | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
EQUITY | |||
Shares exercise period, excluding public offerings | 30 days | ||
Shares exercise period for public offering | 10 days | ||
Common shares | |||
EQUITY | |||
Authorized capital | 1,500,000,000 | ||
Reconciliations of common and preferred outstanding shares | |||
Balance at beginning of the year | 571,929,945 | 571,929,945 | 571,929,945 |
Balance at end of period | 571,929,945 | 571,929,945 | 571,929,945 |
Preferred shares | |||
EQUITY | |||
Authorized capital | 3,000,000,000 | ||
Reconciliations of common and preferred outstanding shares | |||
Balance at beginning of the year | 1,129,231,487 | 1,127,010,827 | 1,124,233,755 |
Exercise of stock options | 4,585,414 | 2,220,660 | 2,777,072 |
Balance at end of period | 1,133,816,901 | 1,129,231,487 | 1,127,010,827 |
EQUITY - Ownership of shares (D
EQUITY - Ownership of shares (Details) - BRL (R$) R$ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
EQUITY | |||
Shares subscribed and paid up | 1,719,658,728 | 1,719,658,728 | 1,719,658,728 |
Ownership of shares, as a percentage of total issued shares | 100.00% | 100.00% | 100.00% |
Total capital | R$ 19249181 | R$ 19249181 | |
Common shares | |||
EQUITY | |||
Shares subscribed and paid up | 573,627,483 | 573,627,483 | 573,627,483 |
Ownership of shares, as a percentage of total issued shares | 100.00% | 100.00% | 100.00% |
Preferred shares | |||
EQUITY | |||
Shares subscribed and paid up | 1,146,031,245 | 1,146,031,245 | 1,146,031,245 |
Ownership of shares, as a percentage of total issued shares | 100.00% | 100.00% | 100.00% |
Treasury Stocks | |||
EQUITY | |||
Shares subscribed and paid up | 13,911,882 | 18,497,296 | 20,717,956 |
Ownership of shares, as a percentage of total issued shares | 0.80% | 1.10% | 1.20% |
Treasury Stocks | Common shares | |||
EQUITY | |||
Shares subscribed and paid up | 1,697,538 | 1,697,538 | 1,697,538 |
Ownership of shares, as a percentage of total issued shares | 0.20% | 0.30% | 0.30% |
Treasury Stocks | Preferred shares | |||
EQUITY | |||
Shares subscribed and paid up | 12,214,344 | 16,799,758 | 19,020,418 |
Ownership of shares, as a percentage of total issued shares | 1.10% | 1.50% | 1.70% |
Metalurgica Gerdau S.A. | |||
EQUITY | |||
Shares subscribed and paid up | 557,898,901 | 560,046,701 | 627,751,085 |
Ownership of shares, as a percentage of total issued shares | 32.40% | 32.60% | 36.50% |
Metalurgica Gerdau S.A. | Common shares | |||
EQUITY | |||
Shares subscribed and paid up | 557,898,901 | 557,898,901 | 557,898,901 |
Ownership of shares, as a percentage of total issued shares | 97.30% | 97.30% | 97.30% |
Metalurgica Gerdau S.A. | Preferred shares | |||
EQUITY | |||
Shares subscribed and paid up | 2,147,800 | 69,852,184 | |
Ownership of shares, as a percentage of total issued shares | 0.20% | 6.10% | |
Brazilian institutional investors | |||
EQUITY | |||
Shares subscribed and paid up | 236,785,217 | 230,660,486 | 244,766,757 |
Ownership of shares, as a percentage of total issued shares | 13.80% | 13.40% | 14.20% |
Brazilian institutional investors | Common shares | |||
EQUITY | |||
Shares subscribed and paid up | 4,363,438 | 3,397,955 | 3,068,614 |
Ownership of shares, as a percentage of total issued shares | 0.80% | 0.60% | 0.50% |
Brazilian institutional investors | Preferred shares | |||
EQUITY | |||
Shares subscribed and paid up | 232,421,779 | 227,262,531 | 241,698,143 |
Ownership of shares, as a percentage of total issued shares | 20.30% | 19.80% | 21.10% |
Foreign institutional investors | |||
EQUITY | |||
Shares subscribed and paid up | 492,705,610 | 495,218,544 | 431,611,203 |
Ownership of shares, as a percentage of total issued shares | 28.70% | 28.80% | 25.10% |
Foreign institutional investors | Common shares | |||
EQUITY | |||
Shares subscribed and paid up | 1,895,038 | 3,142,148 | 3,875,655 |
Ownership of shares, as a percentage of total issued shares | 0.30% | 0.50% | 0.70% |
Foreign institutional investors | Preferred shares | |||
EQUITY | |||
Shares subscribed and paid up | 490,810,572 | 492,076,396 | 427,735,548 |
Ownership of shares, as a percentage of total issued shares | 42.80% | 42.90% | 37.30% |
Other shareholders | |||
EQUITY | |||
Shares subscribed and paid up | 418,357,118 | 415,235,701 | 394,811,727 |
Ownership of shares, as a percentage of total issued shares | 24.30% | 24.10% | 23.00% |
Other shareholders | Common shares | |||
EQUITY | |||
Shares subscribed and paid up | 7,772,568 | 7,490,941 | 7,086,775 |
Ownership of shares, as a percentage of total issued shares | 1.40% | 1.30% | 1.20% |
Other shareholders | Preferred shares | |||
EQUITY | |||
Shares subscribed and paid up | 410,584,550 | 407,744,760 | 387,724,952 |
Ownership of shares, as a percentage of total issued shares | 35.80% | 35.60% | 33.80% |
EQUITY - Treasury stocks (Detai
EQUITY - Treasury stocks (Details) - BRL (R$) R$ / shares in Units, R$ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Value of shares | |||
Balance at beginning of year | R$ 31085210 | R$ 27173127 | R$ 25938571 |
Exercise of stock options | 143,982 | 9,596 | 29,411 |
Balance at end of year | R$ 42815649 | R$ 31085210 | R$ 27173127 |
Common shares | |||
Number of shares | |||
Balance at beginning of the year | 571,929,945 | 571,929,945 | 571,929,945 |
Balance at end of period | 571,929,945 | 571,929,945 | 571,929,945 |
Preferred shares | |||
Number of shares | |||
Balance at beginning of the year | 1,129,231,487 | 1,127,010,827 | 1,124,233,755 |
Exercise of long-term incentive plan | 4,585,414 | 2,220,660 | 2,777,072 |
Balance at end of period | 1,133,816,901 | 1,129,231,487 | 1,127,010,827 |
Treasury Stocks | |||
EQUITY | |||
Average acquisition cost | R$ 12.43 | R$ 13.62 | R$ 12.72 |
Value of shares | |||
Balance at beginning of year | R$ 229309 | R$ 242542 | R$ 280426 |
Exercise of stock options | 76,900 | 13,233 | 37,884 |
Balance at end of year | R$ 152409 | R$ 229309 | R$ 242542 |
Treasury Stocks | Common shares | |||
Number of shares | |||
Balance at beginning of the year | 1,697,538 | 1,697,538 | 1,697,538 |
Balance at end of period | 1,697,538 | 1,697,538 | 1,697,538 |
Value of shares | |||
Balance at beginning of year | R$ 557 | R$ 557 | R$ 557 |
Balance at end of year | R$ 557 | R$ 557 | R$ 557 |
Treasury Stocks | Preferred shares | |||
Number of shares | |||
Balance at beginning of the year | 16,799,758 | 19,020,418 | 21,797,490 |
Exercise of long-term incentive plan | (4,585,414) | (2,220,660) | (2,777,072) |
Balance at end of period | 12,214,344 | 16,799,758 | 19,020,418 |
Value of shares | |||
Balance at beginning of year | R$ 228752 | R$ 241985 | R$ 279869 |
Exercise of stock options | (76,900) | (13,233) | (37,884) |
Balance at end of year | R$ 151852 | R$ 228752 | R$ 241985 |
EQUITY - Reserves (Details)
EQUITY - Reserves (Details) | 12 Months Ended |
Dec. 31, 2021 | |
EQUITY. | |
Minimum legal reserve transfer as a percentage of net income | 5.00% |
Maximum legal reserve balance as a percentage of total paid-in capital | 20.00% |
Investments and working capital reserve, annual percentage | 5.00% |
EQUITY - Operations with non-co
EQUITY - Operations with non-controlling interests (Details) - BRL (R$) R$ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Effects of changes in ownership interests in subsidiaries | |||
Effect of interest changes in subsidiaries | R$ 18962 | R$ 12776 | R$ 1586 |
Total Parent company's interest | |||
Effects of changes in ownership interests in subsidiaries | |||
Effect of interest changes in subsidiaries | 0 | 0 | 0 |
Non-controlling interests. | |||
Effects of changes in ownership interests in subsidiaries | |||
Other changes | (18,962) | 12,776 | (1,586) |
Effect of interest changes in subsidiaries | R$ 18962 | R$ 12776 | R$ 1586 |
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, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Mar. 31, 2020 | |
Dividends and interest on capital | |||||||||||||
Minimum annual mandatory dividend (as a percent) | 30.00% | ||||||||||||
Appropriation of retained earnings | |||||||||||||
Net income | R$ 15494111 | R$ 2365763 | R$ 1203736 | ||||||||||
Constitution of legal reserve | 0 | 0 | 0 | ||||||||||
Constitution of the tax incentives reserve | 0 | 0 | 0 | ||||||||||
Dividends and interest on capital | (5,068,684) | (779,662) | (370,167) | ||||||||||
Dividend - adjustment in excess of the minimum estatutory undistributed | 0 | ||||||||||||
Constitution of investments and working capital reserve | R$ 0 | 0 | 0 | ||||||||||
Credit: May 14, 2021 | |||||||||||||
Dividends and interest on capital | |||||||||||||
Dividends paid (in R$/share) | R$ 0.40 | ||||||||||||
Number of shares outstanding used for dividend payment | 1,705,338 | ||||||||||||
Credit: August 16, 2021 | |||||||||||||
Dividends and interest on capital | |||||||||||||
Dividends paid (in R$/share) | R$ 0.54 | ||||||||||||
Number of shares outstanding used for dividend payment | 1,705,576 | ||||||||||||
Credit: September 27, 2021 | |||||||||||||
Dividends and interest on capital | |||||||||||||
Interest on capital paid (in R$/share) | R$ 0.38 | ||||||||||||
Number of shares outstanding used for interest payment | 1,705,582 | ||||||||||||
Credit: November 5, 2021 | |||||||||||||
Dividends and interest on capital | |||||||||||||
Dividends paid (in R$/share) | R$ 1.42 | ||||||||||||
Interest on capital paid (in R$/share) | R$ 0.20 | ||||||||||||
Number of shares outstanding used for dividend payment | 1,705,628 | ||||||||||||
Number of shares outstanding used for interest payment | 1,705,630 | ||||||||||||
Credit: March 7, 2022 | |||||||||||||
Dividends and interest on capital | |||||||||||||
Dividends paid (in R$/share) | R$ 0.20 | R$ 0.20 | |||||||||||
Number of shares outstanding used for dividend payment | 1,705,747 | 1,705,747 | |||||||||||
Retained Earnings | |||||||||||||
Appropriation of retained earnings | |||||||||||||
Net income | R$ 15494111 | 2,365,763 | 1,203,736 | ||||||||||
Constitution of legal reserve | (756,334) | (109,649) | (55,876) | ||||||||||
Constitution of the tax incentives reserve | (367,430) | (172,792) | (86,216) | ||||||||||
Net income (loss) before dividends and interest on capital | 14,370,347 | 2,083,322 | 1,061,644 | ||||||||||
Dividends and interest on capital | (5,014,450) | (714,487) | (356,539) | ||||||||||
Dividend - adjustment in excess of the minimum estatutory undistributed | (341,150) | ||||||||||||
Net income (loss) before constitution of investments and working capital reserve | 9,014,747 | 1,368,835 | 705,105 | ||||||||||
Constitution of investments and working capital reserve | (9,014,747) | (1,368,835) | (705,105) | ||||||||||
Total Parent company's interest | |||||||||||||
Appropriation of retained earnings | |||||||||||||
Constitution of legal reserve | 0 | 0 | 0 | ||||||||||
Constitution of the tax incentives reserve | 0 | 0 | 0 | ||||||||||
Dividends and interest on capital | (5,014,450) | (714,487) | (356,539) | ||||||||||
Dividend - adjustment in excess of the minimum estatutory undistributed | 0 | ||||||||||||
Constitution of investments and working capital reserve | R$ 0 | R$ 0 | R$ 0 | ||||||||||
Dividends and interest on capital | |||||||||||||
Interest | R$ 510348 | ||||||||||||
Interest and Dividends | R$ 5355600 | R$ 714487 | R$ 356539 | ||||||||||
Credit per share (R$) | R$ 3.14 | R$ 0.42 | R$ 0.21 | ||||||||||
Total Parent company's interest | Credit: May 14, 2021 | |||||||||||||
Dividends and interest on capital | |||||||||||||
Dividends | R$ 682199 | R$ 118803 | |||||||||||
Total Parent company's interest | Credit: August 16, 2021 | |||||||||||||
Dividends and interest on capital | |||||||||||||
Interest | R$ 921011 | R$ 118817 | |||||||||||
Total Parent company's interest | Credit: September 27, 2021 | |||||||||||||
Dividends and interest on capital | |||||||||||||
Dividends | R$ 648122 | ||||||||||||
Total Parent company's interest | Credit: November 5, 2021 | |||||||||||||
Dividends and interest on capital | |||||||||||||
Dividends | R$ 2421992 | R$ 204139 | R$ 67951 | ||||||||||
Interest | R$ 341126 | ||||||||||||
Total Parent company's interest | Credit: March 7, 2022 | |||||||||||||
Dividends and interest on capital | |||||||||||||
Dividends | R$ 341150 | R$ 50968 |
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, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Basic numerator | |||
Net income | R$ 15494111 | R$ 2365763 | R$ 1203736 |
Basic denominator | |||
Earnings per share (in R$) - Basic | R$ 9.09 | R$ 1.39 | R$ 0.71 |
Common shares | |||
Basic numerator | |||
Net income | R$ 5198011 | R$ 795617 | R$ 405607 |
Basic denominator | |||
Weighted-average outstanding shares, after deducting the average treasury shares | 571,929,945 | 571,929,945 | 571,929,945 |
Earnings per share (in R$) - Basic | R$ 9.09 | R$ 1.39 | R$ 0.71 |
Preferred shares | |||
Basic numerator | |||
Net income | R$ 10296100 | R$ 1570146 | R$ 798129 |
Basic denominator | |||
Weighted-average outstanding shares, after deducting the average treasury shares | 1,132,865,567 | 1,128,700,478 | 1,125,408,180 |
Earnings per share (in R$) - Basic | R$ 9.09 | R$ 1.39 | R$ 0.71 |
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, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Allocated net income available to Common and Preferred shareholders | |||
Net income | R$ 15494111 | R$ 2365763 | R$ 1203736 |
Weighted - average number of shares outstanding | |||
Earnings per share - Diluted (Common and Preferred Shares) | R$ 9.04 | R$ 1.38 | R$ 0.70 |
Common shares | |||
Allocated net income available to Common and Preferred shareholders | |||
Net income | R$ 5198011 | R$ 795617 | R$ 405607 |
Adjustment to net income allocated to preferred shareholders in respect to the potential increase in number of preferred shares outstanding, as a result of long-term incentive plans of Gerdau. | (26,192) | (4,782) | (2,884) |
Net income available to owners of parent including effects of dilutive shares | R$ 5171819 | R$ 790835 | R$ 402723 |
Weighted - average number of shares outstanding | |||
Weighted-average number of shares outstanding | 571,929,945 | 571,929,945 | 571,929,945 |
Preferred shares | |||
Allocated net income available to Common and Preferred shareholders | |||
Net income | R$ 10296100 | R$ 1570146 | R$ 798129 |
Adjustment to net income allocated to preferred shareholders in respect to the potential increase in number of preferred shares outstanding, as a result of long-term incentive plans of Gerdau. | 26,192 | 5,524 | 2,884 |
Net income available to owners of parent including effects of dilutive shares | R$ 10322292 | R$ 1575670 | R$ 801013 |
Weighted - average number of shares outstanding | |||
Weighted-average number of shares outstanding | 1,132,865,567 | 1,128,700,478 | 1,125,408,180 |
Potential increase in number of preferred shares outstanding in respect of long-term incentive plan of Gerdau | 8,633,716 | 10,821,083 | 12,157,614 |
Total | 1,141,499,283 | 1,139,521,561 | 1,137,565,794 |
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, 2021BRL (R$)EquityInstrumentsshares | Dec. 31, 2020BRL (R$)EquityInstruments | Dec. 31, 2019BRL (R$)EquityInstruments | |
LONG-TERM INCENTIVE PLANS | |||
Balance, beginning of year | 12,469,334 | 13,018,407 | 14,261,501 |
Granted | 2,228,196 | 3,146,696 | 2,647,995 |
Cancelled | (1,755,522) | (1,777,100) | (2,104,754) |
Exercised | (4,407,441) | (1,918,669) | (1,786,335) |
Balance, end of year | 8,534,567 | 12,469,334 | 13,018,407 |
Expense from equity-settled long-term incentive plan | R$ | R$ 65289 | R$ 62801 | R$ 43895 |
Awards granted in 2017 and later | |||
LONG-TERM INCENTIVE PLANS | |||
Grace period | 3 years | ||
Preferred shares | |||
LONG-TERM INCENTIVE PLANS | |||
Treasury shares | shares | 12,214,344 |
LONG-TERM INCENTIVE PLANS - Sto
LONG-TERM INCENTIVE PLANS - Stock option activity (Details) - Stock options | 12 Months Ended |
Dec. 31, 2019OptionsR$ / shares | |
Number of shares | |
Balance, beginning of year | Options | 15,480 |
Options Forfeited | Options | (15,480) |
Average exercise price in the year | |
Beginning of year | R$ / shares | R$ 16.72 |
Options Forfeited | R$ / shares | R$ 16.72 |
SEGMENT REPORTING - Summary (De
SEGMENT REPORTING - Summary (Details) - BRL (R$) R$ in Thousands | 12 Months Ended | |||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Segment reporting as per business segments | ||||
Net sales | R$ 78345081 | R$ 43814661 | R$ 39644010 | |
Cost of sales | (57,527,721) | (37,884,102) | (35,440,726) | |
GROSS PROFIT | 20,817,360 | 5,930,559 | 4,203,284 | |
Selling, general and administrative expenses | (2,105,951) | (1,530,385) | (1,430,456) | |
Other operating income (expenses) | 519,731 | 1,117,699 | 449,200 | |
Eletrobras compulsory loan recovery | 1,391,280 | 0 | 0 | |
Results in operations with subsidiary and joint ventures (note 3.4) | (162,913) | 0 | 0 | |
Impairment of non-financial assets | 0 | (411,925) | 0 | |
Impairment of financial assets | 357 | (64,132) | (21,044) | |
Equity in earnings of unconsolidated companies | 563,158 | 152,569 | (17,050) | |
INCOME BEFORE FINANCIAL INCOME (EXPENSES) AND TAXES | 21,023,022 | 5,194,385 | 3,183,934 | |
Financial result, net | (750,454) | (1,698,707) | (1,509,214) | |
INCOME BEFORE TAXES | 20,272,568 | 3,495,678 | 1,674,720 | |
Income and social contribution taxes | (4,713,630) | (1,107,624) | (457,833) | |
NET INCOME | 15,558,938 | 2,388,054 | 1,216,887 | |
Depreciation/amortization | 2,658,561 | 2,499,104 | 2,074,295 | |
Investments in associates and joint ventures | 3,340,775 | 2,271,629 | 1,812,399 | R$ 1367802 |
Total assets | 73,814,613 | 63,123,009 | 54,002,970 | |
Total liabilities | 30,998,964 | 32,037,799 | 26,829,843 | |
North America Operation | ||||
Segment reporting as per business segments | ||||
Impairment of non-financial assets | (342,355) | |||
Special Steel Operation | ||||
Segment reporting as per business segments | ||||
Impairment of non-financial assets | (69,570) | |||
Operating Segments | Brazil Operation | ||||
Segment reporting as per business segments | ||||
Net sales | 34,757,720 | 17,752,823 | 16,122,171 | |
Cost of sales | (22,496,140) | (14,179,991) | (14,363,253) | |
GROSS PROFIT | 12,261,580 | 3,572,832 | 1,758,918 | |
Selling, general and administrative expenses | (781,942) | (562,019) | (539,344) | |
Other operating income (expenses) | 137,649 | 31,500 | 295,818 | |
Impairment of financial assets | 7,823 | (23,177) | (2,012) | |
Equity in earnings of unconsolidated companies | (1,287) | (828) | ||
INCOME BEFORE FINANCIAL INCOME (EXPENSES) AND TAXES | 11,625,110 | 3,017,849 | 1,512,552 | |
Financial result, net | (538,341) | (442,972) | (520,821) | |
INCOME BEFORE TAXES | 11,086,769 | 2,574,877 | 991,731 | |
Income and social contribution taxes | (2,769,495) | (652,126) | (214,400) | |
NET INCOME | 8,317,274 | 1,922,751 | 777,331 | |
Depreciation/amortization | 1,330,963 | 1,135,294 | 1,008,713 | |
Investments in associates and joint ventures | 10,186 | 11,472 | ||
Total assets | 24,835,717 | 21,099,735 | 17,195,824 | |
Total liabilities | 8,105,443 | 7,469,541 | 4,686,686 | |
Operating Segments | North America Operation | ||||
Segment reporting as per business segments | ||||
Net sales | 27,838,000 | 17,458,318 | 14,656,028 | |
Cost of sales | (22,416,578) | (16,212,757) | (13,351,209) | |
GROSS PROFIT | 5,421,422 | 1,245,561 | 1,304,819 | |
Selling, general and administrative expenses | (639,370) | (476,518) | (444,326) | |
Other operating income (expenses) | 42,141 | 97,751 | 44,660 | |
Impairment of non-financial assets | (342,355) | |||
Impairment of financial assets | (7,668) | (36,286) | (14,612) | |
Equity in earnings of unconsolidated companies | 279,948 | 23,512 | (110,959) | |
INCOME BEFORE FINANCIAL INCOME (EXPENSES) AND TAXES | 5,096,473 | 511,665 | 779,582 | |
Financial result, net | (156,437) | (206,405) | (99,029) | |
INCOME BEFORE TAXES | 4,940,036 | 305,260 | 680,553 | |
Income and social contribution taxes | (1,092,146) | (178,447) | (188,458) | |
NET INCOME | 3,847,890 | 126,813 | 492,095 | |
Depreciation/amortization | 627,483 | 777,369 | 571,015 | |
Investments in associates and joint ventures | 1,871,274 | 908,338 | 681,807 | |
Total assets | 22,096,314 | 18,583,439 | 15,178,053 | |
Total liabilities | 4,603,424 | 5,261,820 | 4,506,771 | |
Operating Segments | South America Operation | ||||
Segment reporting as per business segments | ||||
Net sales | 6,856,766 | 3,831,406 | 3,259,253 | |
Cost of sales | (5,332,853) | (3,015,189) | (2,762,157) | |
GROSS PROFIT | 1,523,913 | 816,217 | 497,096 | |
Selling, general and administrative expenses | (157,912) | (116,479) | (119,627) | |
Other operating income (expenses) | 27,514 | 16,684 | 17,416 | |
Impairment of financial assets | (1,073) | (2,436) | (1,906) | |
Equity in earnings of unconsolidated companies | 268,291 | 99,341 | 66,468 | |
INCOME BEFORE FINANCIAL INCOME (EXPENSES) AND TAXES | 1,660,733 | 813,327 | 459,447 | |
Financial result, net | (314,473) | (60,787) | (163,459) | |
INCOME BEFORE TAXES | 1,346,260 | 752,540 | 295,988 | |
Income and social contribution taxes | (377,286) | (195,440) | (100,341) | |
NET INCOME | 968,974 | 557,100 | 195,647 | |
Depreciation/amortization | 213,001 | 142,143 | 120,462 | |
Investments in associates and joint ventures | 1,071,333 | 976,046 | 748,392 | |
Total assets | 7,113,706 | 5,448,922 | 4,562,604 | |
Total liabilities | 2,376,176 | 1,360,098 | 996,876 | |
Operating Segments | Special Steel Operation | ||||
Segment reporting as per business segments | ||||
Net sales | 10,980,191 | 6,096,471 | 6,701,900 | |
Cost of sales | (9,427,221) | (5,794,666) | (6,167,502) | |
GROSS PROFIT | 1,552,970 | 301,805 | 534,398 | |
Selling, general and administrative expenses | (233,348) | (179,822) | (170,170) | |
Other operating income (expenses) | 71,287 | 55,097 | 35,571 | |
Impairment of non-financial assets | (69,570) | |||
Impairment of financial assets | 1,275 | (2,233) | (2,513) | |
Equity in earnings of unconsolidated companies | 28,831 | 8,899 | 6,776 | |
INCOME BEFORE FINANCIAL INCOME (EXPENSES) AND TAXES | 1,421,015 | 114,176 | 404,062 | |
Financial result, net | (238,249) | (215,433) | (109,116) | |
INCOME BEFORE TAXES | 1,182,766 | (101,257) | 294,946 | |
Income and social contribution taxes | (287,292) | 13,229 | (60,749) | |
NET INCOME | 895,474 | (88,028) | 234,197 | |
Depreciation/amortization | 487,114 | 444,298 | 374,105 | |
Investments in associates and joint ventures | 251,668 | 231,152 | 224,201 | |
Total assets | 13,658,147 | 11,233,676 | 8,597,180 | |
Total liabilities | 2,801,071 | 1,994,575 | 1,604,885 | |
Eliminations and Adjustments | ||||
Segment reporting as per business segments | ||||
Net sales | (2,087,596) | (1,324,357) | (1,095,342) | |
Cost of sales | 2,145,071 | 1,318,501 | 1,203,395 | |
GROSS PROFIT | 57,475 | (5,856) | 108,053 | |
Selling, general and administrative expenses | (293,379) | (195,547) | (156,989) | |
Other operating income (expenses) | 241,140 | 916,667 | 55,734 | |
Eletrobras compulsory loan recovery | 1,391,280 | |||
Results in operations with subsidiary and joint ventures (note 3.4) | (162,913) | |||
Equity in earnings of unconsolidated companies | (13,912) | 22,104 | 21,493 | |
INCOME BEFORE FINANCIAL INCOME (EXPENSES) AND TAXES | 1,219,691 | 737,368 | 28,291 | |
Financial result, net | 497,046 | (773,110) | (616,789) | |
INCOME BEFORE TAXES | 1,716,737 | (35,742) | (588,498) | |
Income and social contribution taxes | (187,411) | (94,840) | 106,115 | |
NET INCOME | 1,529,326 | (130,582) | (482,383) | |
Investments in associates and joint ventures | 146,500 | 145,907 | 146,527 | |
Total assets | 6,110,729 | 6,757,237 | 8,469,309 | |
Total liabilities | 13,112,850 | 15,951,765 | 15,034,625 | |
Eliminations and Adjustments | Brazil Operation | ||||
Segment reporting as per business segments | ||||
Net sales | (1,352,079) | (1,149,618) | (920,659) | |
Eliminations and Adjustments | North America Operation | ||||
Segment reporting as per business segments | ||||
Net sales | (70,904) | (60,370) | (62,196) | |
Eliminations and Adjustments | South America Operation | ||||
Segment reporting as per business segments | ||||
Net sales | (16,297) | (41) | ||
Eliminations and Adjustments | Special Steel Operation | ||||
Segment reporting as per business segments | ||||
Net sales | R$ 648316 | R$ 114328 | R$ 112487 |
SEGMENT REPORTING - Revenues by
SEGMENT REPORTING - Revenues by Geographical Region (Details) - BRL (R$) R$ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Segment reporting as per geographical areas | |||
Net sales | R$ 78345081 | R$ 43814661 | R$ 39644010 |
Total assets | 73,814,613 | 63,123,009 | 54,002,970 |
Brazil | |||
Segment reporting as per geographical areas | |||
Net sales | 37,733,918 | 18,798,384 | 17,573,278 |
Total assets | 31,740,469 | 28,752,629 | 26,124,159 |
Latin America | |||
Segment reporting as per geographical areas | |||
Net sales | 8,567,310 | 4,996,434 | 4,201,165 |
Total assets | 8,959,237 | 7,042,462 | 5,781,527 |
North America | |||
Segment reporting as per geographical areas | |||
Net sales | 32,043,853 | 20,019,843 | 17,869,567 |
Total assets | R$ 33114907 | R$ 27327918 | R$ 22097284 |
IMPAIRMENT OF ASSETS (Details)
IMPAIRMENT OF ASSETS (Details) R$ in Thousands | 12 Months Ended | ||
Dec. 31, 2021BRL (R$)segment | Dec. 31, 2020BRL (R$) | Dec. 31, 2019BRL (R$) | |
Impairment of assets | |||
Impairment | R$ 0 | R$ 411925 | R$ 0 |
Impairment of goodwill | R$ 0 | R$ 0 | R$ 0 |
Number of operating segments | segment | 4 | ||
Period for projecting the cash flows for the goodwill impairment test | five | ||
Discount rate | |||
Impairment of assets | |||
Sensitivity analysis, percent of increase | 0.50% | 0.50% | |
Perpetuity growth rate | |||
Impairment of assets | |||
Sensitivity analysis, percent of decrease | 0.50% | 0.50% | |
North America Operation | |||
Impairment of assets | |||
Impairment | R$ 342355 | ||
Perpetuity growth rate | 3.00% | 3.00% | |
Pre-tax discount rate | 9.50% | 8.25% | |
Amount by which unit's recoverable amount is (below) exceeds its carrying value | R$ 5769000 | R$ 6202000 | |
North America Operation | Discount rate | |||
Impairment of assets | |||
Sensitivity analysis, amount above (below) book value | 4,337,000 | 4,589,000 | |
North America Operation | Perpetuity growth rate | |||
Impairment of assets | |||
Sensitivity analysis, amount above (below) book value | R$ 4679000 | 4,914,000 | |
Special Steel Operation | |||
Impairment of assets | |||
Impairment | R$ 69570 | ||
Perpetuity growth rate | 3.00% | 3.00% | |
Pre-tax discount rate | 10.50% | 8.75% | |
Amount by which unit's recoverable amount is (below) exceeds its carrying value | R$ 4238000 | R$ 2509000 | |
Special Steel Operation | Discount rate | |||
Impairment of assets | |||
Sensitivity analysis, amount above (below) book value | 3,301,000 | 1,568,000 | |
Special Steel Operation | Perpetuity growth rate | |||
Impairment of assets | |||
Sensitivity analysis, amount above (below) book value | R$ 3545000 | R$ 1754000 | |
South America Operation | |||
Impairment of assets | |||
Perpetuity growth rate | 3.00% | 3.00% | |
Pre-tax discount rate | 15.00% | 11.25% | |
Amount by which unit's recoverable amount is (below) exceeds its carrying value | R$ 2248000 | R$ 4141000 | |
South America Operation | Discount rate | |||
Impairment of assets | |||
Sensitivity analysis, amount above (below) book value | 2,057,000 | 3,757,000 | |
South America Operation | Perpetuity growth rate | |||
Impairment of assets | |||
Sensitivity analysis, amount above (below) book value | R$ 2135000 | R$ 3867000 | |
Brazil Operation | |||
Impairment of assets | |||
Perpetuity growth rate | 3.00% | 3.00% | |
Pre-tax discount rate | 11.25% | 9.75% | |
Amount by which unit's recoverable amount is (below) exceeds its carrying value | R$ 8994000 | R$ 13424000 | |
Brazil Operation | Discount rate | |||
Impairment of assets | |||
Sensitivity analysis, amount above (below) book value | 7,582,000 | 11,348,000 | |
Brazil Operation | Perpetuity growth rate | |||
Impairment of assets | |||
Sensitivity analysis, amount above (below) book value | R$ 7962000 | R$ 11809000 |
EXPENSES BY NATURE - Classified
EXPENSES BY NATURE - Classified by nature (Details) - BRL (R$) R$ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
EXPENSES BY NATURE | |||
Depreciation and amortisation | R$ 2658561 | R$ 2499104 | R$ 2074295 |
Labor expenses | (7,249,811) | (5,867,265) | (5,175,373) |
Raw material and consumption material | (43,720,989) | (26,945,440) | (25,890,618) |
Freight | (3,898,360) | (2,572,293) | (2,300,439) |
Other expenses/income, net | (1,585,863) | (476,818) | (1,002,301) |
Eletrobras compulsory loan recovery | 1,391,280 | 0 | 0 |
Results in operations with subsidiary and joint ventures | (162,913) | 0 | 0 |
Impairment of non-financial assets | 0 | (411,925) | 0 |
Total Expenses | R$ 57885217 | R$ 38772845 | R$ 36443026 |
EXPENSES BY NATURE - Classifi_2
EXPENSES BY NATURE - Classified by function (Details) - BRL (R$) R$ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
EXPENSES BY NATURE | |||
Cost of sales | R$ 57527721 | R$ 37884102 | R$ 35440726 |
Selling expenses | (715,830) | (512,950) | (476,339) |
General and administrative expenses | (1,390,121) | (1,017,435) | (954,117) |
Other operating income | 979,760 | 1,763,684 | 636,847 |
Other operating expenses | (460,029) | (645,985) | (187,647) |
Eletrobras compulsory loan recovery | 1,391,280 | 0 | 0 |
Results in operations with subsidiary and joint ventures | (162,913) | 0 | 0 |
Impairment of financial assets | 357 | (64,132) | (21,044) |
Impairment of non-financial assets | 0 | (411,925) | 0 |
Total Expenses | R$ 57885217 | R$ 38772845 | R$ 36443026 |
FINANCIAL INCOME (Details)
FINANCIAL INCOME (Details) - BRL (R$) R$ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
FINANCIAL INCOME | |||
Income from short-term investments | R$ 182639 | R$ 108057 | R$ 87241 |
Interest income and other financial income | 66,385 | 86,035 | 135,972 |
Financial Income | 249,024 | 194,092 | 223,213 |
Interest on debt | (1,059,841) | (1,022,460) | (938,120) |
Monetary variation and other financial expenses | (373,246) | (426,001) | (531,634) |
Financial Expenses | (1,433,087) | (1,448,461) | (1,469,754) |
Exchange Variation, net | (108,373) | (204,291) | (247,555) |
Bonds repurchase expenses | (264,687) | (239,273) | 0 |
Tax credits monetary update | 788,741 | 0 | 0 |
Gains and losses on derivative financial instruments, net | 17,928 | (774) | (15,118) |
Financial result, net | R$ 750454 | R$ 1698707 | R$ 1509214 |