FORM 6 - K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Report of Foreign Private Issuer
Pursuant to Rule 13a - 16 or 15d - 16 of
the Securities Exchange Act of 1934

As of 11/2/2011

Ternium S.A.

(Translation of Registrant’s name into English)

Ternium S.A.

29, Avenue de la Porte-Neuve
L-2227 Luxembourg
(352) 2668-3152
(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or 40-F.

Form 20-F þ      Form 40-F o

Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12G3-2(b) under the Securities Exchange Act of 1934.

Yes o      No þ

If “Yes” is marked, indicate below the file number assigned to the registrant in
connection with Rule 12g3-2(b):
Not applicable

 

 

The attached material is being furnished to the Securities and Exchange Commission pursuant to Rule 13a-16 and Form 6-K under the Securities Exchange Act of 1934, as amended.

This report contains Ternium S.A.’s consolidated financial statements as of September 30, 2011.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

TERNIUM S.A.

By:

/s/ Pablo Brizzio

By:

/s/ Daniel Novegil

Name:

Pablo Brizzio

Name:

Daniel Novegil

Title:

Chief Financial Officer

Title:

Chief Executive Officer

Dated: November 2, 2011

TERNIUM S.A.

CONSOLIDATED CONDENSED INTERIM
FINANCIAL STATEMENTS AS OF SEPTEMBER 30, 2011
AND FOR THE NINE-MONTH PERIODS
ENDED SEPTEMBER 30, 2011 AND 2010

29 Avenue de la Porte-Neuve, 3^rd floor
L — 2227
R.C.S. Luxembourg : B 98 668

TERNIUM S.A.
Consolidated condensed interim financial statements as of September 30, 2011
and for the nine-month periods ended September 30, 2011 and 2010
(All amounts in USD thousands)

CONSOLIDATED CONDENSED INTERIM INCOME STATEMENTS

				Three-month period ended								Nine-month period ended
				September 30,								September 30,
		Notes		2011				2010				2011				2010
				(Unaudited)								(Unaudited)
Net sales		3			2,467,072				1,877,234				6,959,573				5,454,473
Cost of sales		3 & 4			(1,909,476	)			(1,448,149	)			(5,354,645	)			(4,060,783	)
Gross profit		3			557,596				429,085				1,604,928				1,393,690
Selling, general and administrative expenses		3 & 5			(203,949	)			(170,105	)			(602,700	)			(482,623	)
Other operating (expenses) income, net		3			(1,682	)			8,587				(10,594	)			9,186
Operating income		3			351,965				267,567				991,634				920,253
Interest expense					(28,293	)			(17,868	)			(68,732	)			(55,249	)
Interest income					4,808				10,244				24,672				18,177
Interest income — Sidor financial asset		11			2,419				11,604				9,291				56,685
Other financial (expenses) income, net		6			(291,692	)			29,539				(197,639	)			91,617
Equity in (losses) earnings of associated companies					(402	)			71				51				(813	)
Income before income tax expense					38,805				301,157				759,277				1,030,670
Income tax expense					(15,384	)			(100,321	)			(245,805	)			(354,049	)
Profit for the period					23,421				200,836				513,472				676,621
Attributable to:
Equity holders of the Company					6,404				151,684				408,810				544,569
Non-controlling interest					17,017				49,152				104,662				132,052
					23,421				200,836				513,472				676,621
Weighted average number of shares outstanding					1,963,076,776				2,004,743,442				1,970,097,533				2,004,743,442
Basic and diluted earnings per share for profit attributable to the equity holders of the company (expressed in USD per share)					0.00				0.08				0.21				0.27

The accompanying notes are an integral part of these consolidated condensed interim financial statements. These consolidated condensed interim financial statements should be read in conjunction with our audited Consolidated Financial Statements and notes for the fiscal year ended December 31, 2010.

TERNIUM S.A.
Consolidated condensed interim financial statements as of September 30, 2011
and for the nine-month periods ended September 30, 2011 and 2010
(All amounts in USD thousands)

CONSOLIDATED CONDENSED INTERIM STATEMENTS OF COMPREHENSIVE INCOME

		Three-month period ended								Nine-month period ended
		September 30,								September 30,
		2011				2010				2011				2010
		(Unaudited)								(Unaudited)
Profit for the period			23,421				200,836				513,472				676,621
Other comprehensive income:
Currency translation adjustment			(359,744	)			18,398				(304,124	)			25,152
Changes in the fair value of derivatives classified as cash flow hedges			6,147				3,973				17,606				7,215
Income tax relating to cash flow hedges			(1,844	)			(1,192	)			(5,282	)			(2,164	)
Other comprehensive (loss) income for the period, net of tax			(355,442	)			21,179				(291,800	)			30,203
Total comprehensive (loss) income for the period			(332,021	)			222,015				221,672				706,824
Attributable to:
Equity holders of the Company			(293,270	)			173,100				177,469				588,194
Non-controlling interest			(38,751	)			48,915				44,203				118,630
			(332,021	)			222,015				221,672				706,824

The accompanying notes are an integral part of these consolidated condensed interim financial statements. These consolidated condensed interim financial statements should be read in conjunction with our audited Consolidated Financial Statements and notes for the fiscal year ended December 31, 2010.

TERNIUM S.A.
Consolidated condensed interim financial statements as of September 30, 2011
and for the nine-month periods ended September 30, 2011 and 2010
(All amounts in USD thousands)

CONSOLIDATED CONDENSED INTERIM STATEMENTS OF FINANCIAL POSITION

		Notes		September 30, 2011								December 31, 2010
				(Unaudited)
ASSETS
Non-current assets
Property, plant and equipment, net		7			4,107,414								4,262,896
Intangible assets, net		8			1,028,676								1,129,348
Investments in associated companies					8,180								8,212
Sidor financial asset		11			—								74,549
Other investments					33,163								35,575
Deferred tax assets					8,606								12,387
Receivables, net					114,875								56,471
Trade receivables, net					7,177				5,308,091				—				5,579,438
Current assets
Receivables					157,476								94,573
Derivative financial instruments					1,259								212
Inventories, net					2,313,236								1,953,390
Trade receivables, net					834,266								663,502
Sidor financial asset		11			134,196								183,439
Other investments					657,760								848,400
Cash and cash equivalents					1,485,503				5,583,696				1,779,416				5,522,932
Non-current assets classified as held for sale									10,765								9,961
									5,594,461								5,532,893
Total assets									10,902,552								11,112,331
EQUITY
Capital and reserves attributable to the company’s equity holders									5,760,978								5,880,740
Non-controlling interest									1,078,185								1,135,361
Total equity									6,839,163								7,016,101
LIABILITIES
Non-current liabilities
Provisions					17,051								16,144
Deferred income tax					775,510								877,742
Other liabilities					220,295								201,312
Trade payables					21,578								—
Derivative financial instruments					—								18,822
Borrowings					941,595				1,976,029				1,426,574				2,540,594
Current liabilities
Current tax liabilities					147,147								294,902
Other liabilities					126,449								123,610
Trade payables					721,895								588,086
Derivative financial instruments					44,650								35,955
Borrowings					1,047,219				2,087,360				513,083				1,555,636
Total liabilities									4,063,389								4,096,230
Total equity and liabilities									10,902,552								11,112,331

Contingencies, commitments and restrictions to the distribution of profits are disclosed in Note 10.

The accompanying notes are an integral part of these consolidated condensed interim financial statements. These consolidated condensed interim financial statements should be read in conjunction with our audited Consolidated Financial Statements and notes for the fiscal year ended December 31, 2010.

TERNIUM S.A.
Consolidated condensed interim financial statements as of September 30, 2011
and for the nine-month periods ended September 30, 2011 and 2010
(All amounts in USD thousands)

CONSOLIDATED CONDENSED INTERIM STATEMENTS OF CHANGES IN EQUITY

		Attributable to the Company’s equity holders (1)
										Initial								Capital
		Capital				Treasury				public								stock issue				Currency												Non-
		stock				shares				offering				Reserves				discount				translation				Retained								controlling
		(2)				(3)				expenses				(4)				(5)				adjustment				earnings				Total				interest				Total Equity
Balance at January 1, 2011			2,004,743				—				(23,295	)			1,635,126				(2,324,866	)			(517,432	)			5,106,464				5,880,740				1,135,361				7,016,101
Profit for the period																											408,810				408,810				104,662				513,472
Other comprehensive income (loss) for the period
Currency translation adjustment																							(242,274	)							(242,274	)			(61,850	)			(304,124	)
Cash flow hedges, net of tax															10,933																10,933				1,391				12,324
Total comprehensive income for the period			—				—				—				10,933				—				(242,274	)			408,810				177,469				44,203				221,672
Dividends paid in cash (3)															(99,329	)											(47,902	)			(147,231	)							(147,231	)
Repurchase of own shares to Usiminas (3)							(150,000	)																							(150,000	)							(150,000	)
Dividends paid in cash by subsidiary companies (6)																															—				(140,579	)			(140,579	)
Contributions from non-controlling shareholders in consolidated subsidiaries (7)																															—				39,200				39,200
Balance at September 30, 2011 (Unaudited)			2,004,743				(150,000	)			(23,295	)			1,546,730				(2,324,866	)			(759,706	)			5,467,372				5,760,978				1,078,185				6,839,163

Dividends may be paid by Ternium to the extent distributable retained earnings calculated in accordance with Luxembourg law and regulations exist. Therefore, retained earnings included in these consolidated condensed interim financial statements may not be wholly distributable. See Note 10 (iii).

The accompanying notes are an integral part of these consolidated condensed interim financial statements. These consolidated condensed interim financial statements should be read in conjunction with our audited Consolidated Financial Statements and notes for the fiscal year ended December 31, 2010.

TERNIUM S.A.
Consolidated condensed interim financial statements as of September 30, 2011
and for the nine-month periods ended September 30, 2011 and 2010
(All amounts in USD thousands)

CONSOLIDATED CONDENSED INTERIM STATEMENTS OF CHANGES IN EQUITY

		Attributable to the Company’s equity holders (1)
														Capital stock
						Initial public								issue				Currency												Non-
		Capital stock				offering				Reserves				discount				translation				Retained								controlling
		(2)				expenses				(3)				(4)				adjustment				earnings				Total				interest				Total Equity
Balance at January 1, 2010			2,004,743				(23,295	)			1,726,216				(2,324,866	)			(570,844	)			4,484,388				5,296,342				964,897				6,261,239
Profit for the period																							544,569				544,569				132,052				676,621
Other comprehensive income (loss) for the period
Currency translation adjustment																			39,144								39,144				(13,992	)			25,152
Cash flow hedges, net of tax											4,481																4,481				570				5,051
Total comprehensive income for the period			—				—				4,481				—				39,144				544,569				588,194				118,630				706,824
Dividends paid in cash											(100,237	)															(100,237	)			—				(100,237	)
Dividends paid in cash by subsidiary companies																															(38,304	)			(38,304	)
Acquisition of business																											—				62,808				62,808
Balance at September 30, 2010 (Unaudited)			2,004,743				(23,295	)			1,630,460				(2,324,866	)			(531,700	)			5,028,957				5,784,299				1,108,031				6,892,330

Dividends may be paid by Ternium to the extent distributable retained earnings calculated in accordance with Luxembourg law and regulations exist. Therefore, retained earnings included in these consolidated financial statements may not be wholly distributable. See Note 10 (iii).

The accompanying notes are an integral part of these consolidated condensed interim financial statements. These consolidated condensed interim financial statements should be read in conjunction with our audited Consolidated Financial Statements and notes for the fiscal year ended December 31, 2010.

TERNIUM S.A.
Consolidated condensed interim financial statements as of September 30, 2011
and for the nine-month periods ended September 30, 2011 and 2010
(All amounts in USD thousands)

CONSOLIDATED CONDENSED INTERIM STATEMENTS OF CASH FLOWS

				Nine-month period ended
				September 30,
		Notes		2011				2010
				(Unaudited)
Cash flows from operating activities
Profit for the period					513,472				676,621
Adjustments for:
Depreciation and amortization		7 & 8			309,822				280,020
Income tax accruals less payments					(246,565	)			231,157
Equity in (earnings) losses of associated companies					(51	)			813
Interest accruals less payments					18,136				(8,386	)
Changes in provisions					28,049				4,221
Changes in working capital					(572,264	)			(484,961	)
Interest income — Sidor financial asset		11			(9,291	)			(56,685	)
Net foreign exchange results and others					160,881				(61,405	)
Net cash provided by operating activities					202,189				581,395
Cash flows from investing activities
Capital expenditures		7 & 8			(444,987	)			(219,983	)
Acquisition of business:
Purchase consideration					—				(75,000	)
Cash acquired					—				6,593
Decrease (Increase) in other investments					193,035				(255,280	)
Proceeds from the sale of property, plant and equipment					1,377				1,213
Proceeds from Sidor financial asset		11			133,084				767,382
Net cash (used in) provided by investing activities					(117,491	)			224,925
Cash flows from financing activities
Dividends paid in cash to company’s shareholders					(147,231	)			(100,237	)
Dividends paid in cash by subsidiary companies					(140,579	)			(38,304	)
Contributions from non-controlling shareholders in consolidated subsidiaries					39,200				—
Repurchase of treasury shares					(150,000	)			—
Proceeds from borrowings					612,205				18,486
Repayments of borrowings					(572,081	)			(555,496	)
Net cash used in financing activities					(358,486	)			(675,551	)
(Decrease) Increase in cash and cash equivalents					(273,788	)			130,769
Movement in cash and cash equivalents
At January 1,					1,779,416				2,095,798
Effect of exchange rate changes					(20,125	)			434
(Decrease) Increase in cash and cash equivalents					(273,788	)			130,769
Cash and cash equivalents at September 30, (1)					1,485,503				2,227,001

The accompanying notes are an integral part of these consolidated condensed interim financial statements. These consolidated condensed interim financial statements should be read in conjunction with our audited Consolidated Financial Statements and notes for the fiscal year ended December 31, 2010.

TERNIUM S.A.
Notes to the Consolidated Condensed Interim Financial Statements

INDEX TO THE NOTES TO THE CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS

1 General information and basis of presentation
2 Accounting policies
3 Segment information
4 Cost of sales
5 Selling, general and administrative expenses
6 Other financial income (expenses), net
7 Property, plant and equipment, net
8 Intangible assets, net
9 Distribution of dividends
10 Contingencies, commitments and restrictions on the distribution of profits
11 Nationalization of Sidor
12 Repurchase of Shares from Usiminas concurrently with secondary public offering
13 Debt refinancing in Ternium Mexico
14 Recent developments involving Siderar S.A.I.C.
15 Related party transactions
16 Recently issued accounting pronouncements

TERNIUM S.A.
Notes to the Consolidated Condensed Interim Financial Statements (Contd.)

1 General information and basis of presentation

Ternium S.A. (the “Company” or “Ternium”), was incorporated on December 22, 2003 to hold investments in flat and long steel manufacturing and distributing companies. The Company has an authorized share capital of a single class of 3.5 billion shares having a nominal value of USD 1.00 per share. As of September 30, 2011, there were 2,004,743,442 shares issued. All issued shares are fully paid.

Following a corporate reorganization carried out during fiscal year 2005, in January 2006 the Company successfully completed its registration process with the United States Securities and Exchange Commission (“SEC”). Ternium’s ADSs began trading on the New York Stock Exchange under the symbol “TX” on February 1, 2006. The Company’s initial public offering was settled on February 6, 2006. On January 31, 2011, the Company filed with the SEC a registration statement on form F-3 relating to sales of equity and debt securities.

The Company was initially established as a public limited liability company (société anonyme) under Luxembourg’s 1929 holding company regime. Until termination of such regime on December 31, 2010, holding companies incorporated under the 1929 regime (including the Company) were exempt from Luxembourg corporate and withholding tax over dividends distributed to shareholders.

On January 1, 2011, the Company became an ordinary public limited liability company (société anonyme) and, effective as from that date, the Company is subject to all applicable Luxembourg taxes (including, among others, corporate income tax on its worldwide income) and its dividend distributions will generally be subject to Luxembourg withholding tax. However, dividends received by the Company from subsidiaries in high income tax jurisdictions, as defined under Luxembourg law, will continue to be exempt from corporate income tax in Luxembourg under Luxembourg’s participation exemption.

In light of the impending termination of Luxembourg’s 1929 holding company regime, in the fourth quarter of 2010, the Company carried out a multi-step corporate reorganization, which included, among other transactions, the contribution of all of the Company’s assets and liabilities to a wholly-owned, newly-incorporated Luxembourg subsidiary and the restructuring of indirect holdings in certain subsidiaries. The reorganization was completed in December 2010, and resulted in a non-taxable revaluation of the accounting value (under Luxembourg GAAP) of the Company’s assets.

Following the completion of the corporate reorganization, and upon its conversion into an ordinary Luxembourg holding company, the Company recorded a special reserve for tax purposes in a significant amount. The Company expects that, as a result of its corporate reorganization, its current overall tax burden will not increase, as all or substantially all of its dividend income will come from high income tax jurisdictions. In addition, the Company expects that dividend distributions for the foreseeable future will be imputed to the special reserve and therefore should be exempt from Luxembourg withholding tax under current Luxembourg law.

The name and percentage of ownership of subsidiaries that have been included in consolidation in these Consolidated Condensed Interim Financial Statements is disclosed in Note 2 to the audited Consolidated Financial Statements for the year ended December 31, 2010.

Certain comparative amounts have been reclassified to conform to changes in presentation in the current period.

The preparation of consolidated condensed interim financial statements requires management to make estimates and assumptions that might affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the statement of financial position, and also the reported amounts of revenues and expenses for the reported periods. Actual results may differ from these estimates.

Material intercompany transactions and balances have been eliminated in consolidation. However, the fact that the functional currency of the Company’s subsidiaries differ, results in the generation of foreign exchange gains and losses that are included in the consolidated condensed interim income statement under “Other financial income (expenses), net”.

These Consolidated Condensed Interim Financial Statements have been approved for issue by the Board of Directors of Ternium on November 2, 2011.

TERNIUM S.A.
Notes to the Consolidated Condensed Interim Financial Statements (Contd.)

2 Accounting policies

These Consolidated Condensed Interim Financial Statements have been prepared in accordance with IAS 34, “Interim Financial Reporting” and are unaudited. These Consolidated Condensed Interim Financial Statements should be read in conjunction with the audited Consolidated Financial Statements for the year ended December 31, 2010, which have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board, and adopted by the European Union.

Recently issued accounting pronouncements were applied by the Company as from their respective dates.

These Consolidated Condensed Interim Financial Statements have been prepared following the same accounting policies used in the preparation of the audited Consolidated Financial Statements for the year ended December 31, 2010.

3 Segment information

Reportable operating segments

For management purposes, the Company is organized on a worldwide basis into the following segments: flat steel products, long steel products and others.

The flat steel products segment comprises the manufacturing and marketing of hot rolled coils and sheets, cold rolled coils and sheets, tin plate, welded pipes, hot dipped galvanized and electro-galvanized sheets, pre-painted sheets and other tailor-made products to serve its customers’ requirements.

The long steel products segment comprises the manufacturing and marketing of billets (steel in its basic, semi-finished state), wire rod and bars.

The other products segment includes products other than flat and long steel, mainly pig iron, pellets and pre-engineered metal buildings.

		Nine-month period ended September 30, 2011 (Unaudited)
		Flat steel				Long steel
		products				products				Other				Total
Net sales			5,935,257				911,046				113,270				6,959,573
Cost of sales			(4,629,429	)			(658,703	)			(66,513	)			(5,354,645	)
Gross profit			1,305,828				252,343				46,757				1,604,928
Selling, general and administrative expenses			(517,890	)			(72,900	)			(11,910	)			(602,700	)
Other operating income (expenses), net			(14,053	)			3,061				398				(10,594	)
Operating income			773,885				182,504				35,245				991,634
Depreciation — PP&E			231,975				20,615				4,884				257,474

		Nine-month period ended September 30, 2010 (Unaudited)
		Flat steel				Long steel
		products				products				Other				Total
Net sales			4,708,323				604,524				141,626				5,454,473
Cost of sales			(3,534,276	)			(450,649	)			(75,858	)			(4,060,783	)
Gross profit			1,174,047				153,875				65,768				1,393,690
Selling, general and administrative expenses			(424,257	)			(44,890	)			(13,476	)			(482,623	)
Other operating income (expenses), net			8,108				869				209				9,186
Operating income			757,898				109,854				52,501				920,253
Depreciation — PP&E			209,649				14,521				4,668				228,838

TERNIUM S.A.
Notes to the Consolidated Condensed Interim Financial Statements (Contd.)

3 Segment information (continued)

Geographical information

Ternium sells its products to three main geographical areas: South and Central America, North America, and Europe and others. The North American area comprises principally United States, Canada and Mexico. The South and Central American area comprises principally Argentina, Colombia, Chile, Paraguay, Ecuador, Guatemala, Costa Rica and Brazil.

		Nine-month period ended September 30, 2011 (Unaudited)
		South and
		Central America				North America				Europe and other				Total
Net sales			3,043,223				3,874,743				41,607				6,959,573
Depreciation — PP&E			105,786				151,672				16				257,474

		Nine-month period ended September 30, 2010 (Unaudited)
		South and
		Central America				North America				Europe and other				Total
Net sales			2,209,330				3,149,242				95,901				5,454,473
Depreciation — PP&E			83,656				145,169				13				228,838

4 Cost of sales

		Nine-month period ended
		September 30,
		2011				2010
		(Unaudited)
Inventories at the beginning of the year			1,953,390				1,350,568
Acquisition of business			—				76,771
Translation differences			(161,223	)			22,125
Plus: Charges for the period
Raw materials and consumables used and other movements			4,689,766				3,623,516
Services and fees			185,684				130,054
Labor cost			434,267				370,975
Depreciation of property, plant and equipment			244,671				215,836
Amortization of intangible assets			12,926				13,619
Maintenance expenses			259,098				252,410
Office expenses			6,370				4,748
Freight and transportation			41,462				27,279
Insurance			5,244				5,750
Charge of obsolescence allowance			6,948				5,032
Recovery from sales of scrap and by-products			(30,624	)			(32,437	)
Others			19,902				20,718
Less: Inventories at the end of the period			(2,313,236	)			(2,026,181	)
Cost of Sales			5,354,645				4,060,783

TERNIUM S.A.
Notes to the Consolidated Condensed Interim Financial Statements (Contd.)

5 Selling, general and administrative expenses

		Nine-month period ended
		September 30,
		2011				2010
		(Unaudited)
Services and fees			52,372				42,897
Labor cost			139,402				115,057
Depreciation of property plant and equipment			12,803				13,002
Amortization of intangible assets			39,422				37,563
Maintenance and expenses			12,479				6,494
Taxes			91,550				65,351
Office expenses			25,104				22,641
Freight and transportation			210,726				166,340
Increase (Decrease) of allowance for doubtful accounts			208				(841	)
Others			18,634				14,119
Selling, general and administrative expenses			602,700				482,623

6 Other financial income (expenses), net

		Nine-month period ended
		September 30,
		2011				2010
		(Unaudited)
Net foreign exchange (loss) gain			(164,319	)			100,220
Change in fair value of financial instruments			(24,194	)			(729	)
Debt issue costs			(3,888	)			(3,407	)
Others			(5,238	)			(4,467	)
Other financial (expenses) income, net			(197,639	)			91,617

7 Property, plant and equipment, net

		Nine-month period ended
		September 30,
		2011				2010
		(Unaudited)
At the beginning of the year			4,262,896				4,040,415
Acquisition of business			—				140,118
Currency translation differences			(299,274	)			67,514
Additions			408,790				202,744
Disposals			(7,524	)			(3,800	)
Depreciation charge			(257,474	)			(228,838	)
Transfers and other movements			—				(3,914	)
At the end of the period			4,107,414				4,214,239

TERNIUM S.A.
Notes to the Consolidated Condensed Interim Financial Statements (Contd.)

8 Intangible assets, net

		Nine-month period ended
		September 30,
		2011				2010
		(Unaudited)
At the beginning of the year			1,129,348				1,085,412
Acquisition of business			—				25,473
Currency translation differences			(84,521	)			46,105
Additions			36,197				17,239
Amortization charge			(52,348	)			(51,182	)
Transfers and other movements			—				3,914
At the end of the period			1,028,676				1,126,961

9 Distribution of dividends

During the annual general shareholders’ meeting held on June 1, 2011, the shareholders approved the consolidated financial statements and unconsolidated annual accounts for the year ended December 31, 2010 and a distribution of dividends of USD 0.075 per share (USD 0.75 per ADS), or USD 150.4 million. The dividends were paid on June 9, 2011. See note 12.

10 Contingencies, commitments and restrictions on the distribution of profits

This note should be read in conjunction with Note 27 to the Company’s audited Consolidated Financial Statements for the year ended December 31, 2010. Significant changes or events since the date of issue of such financial statements are as follows:

(i) Siderar

Siderar, within the investment plan, has entered into several commitments to acquire new production equipment for a total consideration of USD 136.5 million.

Siderar is a party to a long-term contract with Air Liquide Argentina S.A. for the supply of oxygen, nitrogen and argon. The agreement requires Siderar to take or pay minimum daily amounts of these gases for an aggregate amount of USD 63.0 million to satisfy Siderar’s current production needs through 2021, and to make incremental purchases of these gases for an aggregate amount of USD 115.5 million to satisfy the requirements through 2025 of a new separation facility to be constructed as part of Siderar’s expansion plan. As a result of the several global crisis that began in 2008 and the uncertainties surrounding the evolution of steel demand in the domestic and global markets, the parties engaged in discussions for the renegotiation of the contract. In February 2011, Siderar and Air Liquide Argentina reached agreement on the terms of the renegotiation; the obligations of the parties under the agreement related to the new separation facility were suspended through March 31, 2012, and Siderar agreed to purchase from Air Liquide Argentine certain equipment for an aggregate amount of approximately USD 22.2 million (as of September 30, 2011, Siderar paid advances in an amount of USD 11.7 million). If Siderar were to resume its expansion plan on or prior to March 31, 2012, Air Liquide would be required to repurchase that equipment, and all of the parties’ obligations under the contract would be reinstated; otherwise, all rights and obligations relating to the new separation plant and the related supply of gases would terminate automatically on March 31, 2012, and Siderar would be required to pay to Air Liquide Argentina an aggregate amount currently estimated at USD 12 million.

Siderar assumed fixed commitments for the purchase of raw materials for a total amount of USD 1.5 billion to be expended during the next 3 years.

TERNIUM S.A.
Notes to the Consolidated Condensed Interim Financial Statements (Contd.)

10 Contingencies, commitments and restrictions on the distribution of profits (continued)

(ii) Steel supply contracts

Grupo Imsa (now Ternium Mexico), together with Grupo Marcegaglia, Duferco International Investment Holding and DonkukDongkuk Steel Mill Co., were parties to a ten-year steel slab off-take framework agreement with Corus UK Limited (now Tata Steel UK Limited) dated as of December 16, 2004, which was supplemented by bilateral off-take agreements. Under the agreements, the off-takers could be required to purchase, in the aggregate, approximately 78% of the steel slab production of Corus’ Teesideformer Teesside facility in the North East of England, of which Grupo Imsa’s share was 15.38%, or approximately USD 0.5 million tons per year, of the total production.

In addition, the off-takers were required to make, in the aggregate and according to their respective pro rata shares, significant payments to Corus to finance capital expenditures. In December 2007, all of Grupo Imsa’s rights and obligations under this contract were assigned to Ternium Procurement S.A. (formerly known as Alvory S.A.).

On April 7, 2009, Ternium Procurement S.A., together with the other off-takers, declared the early termination of the off-take framework agreement and their respective off-take agreements with Corus pursuant to a provision allowing the off-takers to terminate the agreements upon the occurrence of certain events specified in the off-take framework agreement. Corus initially denied the occurrence of the alleged termination event, stated that it would pursue specific performance and initiated an arbitration proceeding against the off-takers and Ternium Mexico (as guarantor of Ternium Procurement’s obligations) seeking damages arising out of the alleged wrongful termination of the off-take agreements, which damages Corus did not quantify but stated that would exceed USD 150 million (approximately USD 29.7 million in the case of Ternium Procurement), the maximum aggregate cap on liability that the off-takers would have under the off-take framework agreement (a limitation that Corus disputed). In addition, Corus threatened to submit to arbitration further claims in tort against the off-takers, and also threatened to submit such claims against certain third-parties to such agreements, including the Company. The off-takers and Ternium Mexico, in turn, denied Corus’ claims and brought counterclaims against Corus which, in the aggregate, would also be greater than USD 150 million.

On May 12, 2009, Corus, by a letter from its lawyers, alleged that the off-takers’s termination notice amounted to a repudiatory breach of the agreements and stated that it accepted that the agreements had come to an end and that it would no longer pursue a claim for specific performance in the arbitration; the claim for damages, for all losses caused by the alleged off-takers’ wrongful repudiation of the agreements, however, would be maintained. On July 9, 2009, Corus submitted an amended request for arbitration adding tortious claims against the off-takers and adding to its claims the payment of punitive or exemplary damages.

On December 21, 2010, the arbitration tribunal issued a partial final award where it held that the off-takers had invalidly terminated the off-take agreements. The tribunal also held that the maximum aggregate USD 150 million liability cap (out of which approximately USD 29.7 million corresponds to Ternium Procurement) provided in the off-take framework agreement applied to all of Corus’s claims against the off-takers, including tort as well as contract claims. The tribunal formally admitted new claims and counterclaims into the arbitration proceedings on April 10, 2011.

On April 15, 2011, the arbitration tribunal issued a second partial final award where it held that the off-takers should pay to the claimant GBP 1.6 million for its reasonable legal and other costs incurred before the first partial final award. The off-takers paid that amount around mid May. In addition, on May 27, 2011, the off-takers paid to Tata an aggregate amount of USD 16.3 million (of which Ternium Procurement paid USD 3.2 million) as indemnification for one of its claims under the arbitration proceedings.

On June 16, 2011, Tata, the off-takers and Ternium Mexico settled the dispute, and the off-takers, in exchange for a full release and discharge of each of them and their respective representatives and affiliates, from all claims and disputes that Tata may have against any of them in relation to the off-take framework agreement and its related agreements, agreed to pay to Tata an aggregate amount of USD 124 million (including the USD16.3 million previously paid) and authorized their agent under the off-take agreements to transfer to Tata UK£1.8 million and €0.5 million which had been received by the agent from the off-takers under the off-take framework agreement before the early termination of such agreement. Ternium Procurement paid to Tata its share of the settlement amount (i.e., USD21.3 million) on June 17, 2011.

TERNIUM S.A.
Notes to the Consolidated Condensed Interim Financial Statements (Contd.)

10 Contingencies, commitments and restrictions on the distribution of profits (continued)

On June 21, 2011, Tata notified the arbitration tribunal that the arbitration proceedings were withdrawn. On July 8, 2011 and as a consequence of the settlement reached among the parties, the tribunal declared the termination of the arbitration proceedings.

(iii) Restrictions on the distribution of profits

Under Luxembourg law, at least 5% of net income per year calculated in accordance with Luxembourg law and regulations must be allocated to a reserve until such reserve equals 10% of the share capital. At December 31, 2010, this reserve reached the above-mentioned threshold.

As of December 31, 2010, Ternium may pay dividends up to USD 6.3 billion in accordance with Luxembourg law and regulations.

Shareholders’ equity under Luxembourg law and regulations comprises the following captions:

		At December 31,
		2010
Share capital			2,004,743
Legal reserve			200,474
Distributable reserves			101,437
Non distributable reserves (1)			1,414,122
Accumulated profit at December 31, 2010			6,201,934
Total shareholders’ equity under Luxembourg GAAP			9,922,710

11 Nationalization of Sidor

On March 31, 2008, Ternium S.A. (the “Company”) controlled approximately 59.7% of Sidor, while Corporación Venezolana de Guayana, or CVG (a Venezuelan governmental entity), and Banco de Desarrollo Económico y Social de Venezuela, or BANDES (a bank owned by the Venezuelan government), held approximately 20.4% of Sidor and certain Sidor employees and former employees held the remaining 19.9% interest.

Further to several threats of nationalization and various adverse interferences with management in preceding years, on April 8, 2008, the Venezuelan government announced its intention to take control over Sidor. On April 29, 2008, the National Assembly of Venezuela passed a resolution declaring that the shares of Sidor, together with all of its assets, were of public and social interest, and authorizing the Venezuelan government to take any action it deemed appropriate in connection with any such assets, including expropriation. Subsequently, Decree Law 6058 of the President of Venezuela dated April 30, 2008, ordered that Sidor and its subsidiaries and associated companies be transformed into state-owned enterprises (“empresas del Estado”), with the government owning not less than 60% of their share capital. On July 12, 2008, Venezuela, acting through CVG, assumed operational control and complete responsibility for Sidor’s operations, and Sidor’s board of directors ceased to function. However, negotiations between the Venezuelan government and the Company regarding the terms of the compensation continued over several months, and the Company retained formal title over the Sidor shares during that period.

On May 7, 2009, the Company completed the transfer of its entire 59.7% interest in Sidor to CVG. The Company agreed to receive an aggregate amount of USD 1.97 billion as compensation for its Sidor shares. Of that amount, CVG paid USD 400 million in cash at closing. The balance was divided in two tranches: the first tranche of USD 945 million was scheduled to be paid in six equal quarterly installments beginning in August 2009 until November 2010, while the second tranche would be due in November 2010, subject to quarterly mandatory prepayment events based on the increase of the WTI crude oil price over its May 6, 2009 level. Under the agreements with CVG and Venezuela, in the event of non-compliance by CVG with its

TERNIUM S.A.
Notes to the Consolidated Condensed Interim Financial Statements (Contd.)

11 Nationalization of Sidor (continued)

payment obligations, the Company reserved the rights and remedies that it had prior to the transfer of the Sidor shares in relation to any claim against Venezuela, subject to certain limitations, including that the Company may not claim an amount exceeding the outstanding balance due from CVG.

CVG made all payments required to be made under the agreements governing the transfer of Sidor to Venezuela except for the final payment due on November 8, 2010. On December 18, 2010, Ternium reached an agreement with CVG, on the rescheduling of the unpaid balance, which amounted to USD 257.4 million. As provided in the refinancing agreement, CVG paid USD 7.0 million to Ternium in January 2011, and CVG is required to pay the remainder in five quarterly installments, beginning on February 15, 2011 and ending on February 15, 2012. In addition, Ternium continues to reserve all of its rights under contracts, investment treaties and Venezuelan and international law in the event of non-payment of the amounts still owing to it. As security for the payment of the outstanding balance, Ternium received, duly endorsed in its favor, promissory notes issued by Energía Argentina S.A. (“Enarsa”) and Compañía Administradora del Mercado Mayorista Eléctrico S.A. (“Cammesa”) (both companies owned by the Argentine government) to PDVSA Petróleo S.A. (a company owned by the Venezuelan government). The first and second installments (of USD 31.2 million each) were paid on February 16 and May 17, 2011, respectively. The third installment of USD 56.3 million was paid on August 15, 2011.

The payments so rescheduled bear interest at 6.3% annual rate and, accordingly, the carrying amount of the receivable does not differ significantly from the net present value, at market rates, of the expected cash flows thereunder. At September 30, 2011, following the receipt of USD 1,854.1 million in cash payments in the aggregate, the carrying amount of the Sidor financial asset amounted to USD 134.2 million (all of which were current).

In the nine-month period ended September 30, 2011 and 2010, the Company recorded gains in the amount of USD 9.3 million and USD 56.7 million, respectively. These gains are included in “Interest income — Sidor financial asset” in the Income Statement and represent the accretion income over the receivable held against CVG.

12 Repurchase of Shares from Usiminas concurrently with secondary public offering

On January 31, 2011, Ternium entered into a transaction and registration rights agreement with its 14.3% shareholder Usinas Siderúrgicas de Minas Gerais S.A. — Usiminas (“Usiminas”) and Techint Holdings S.à.r.l. (“Techint”). The transaction and registration rights agreement provided, among other things, for a SEC-registered underwritten public offering of up to all of Ternium shares held by Usiminas (less the number of shares that Ternium and Techint agreed to purchase as discussed below) in the form of ADSs listed on the New York Stock Exchange. Neither Ternium nor Techint offered to sell any Ternium shares or ADSs in the public offering.

On February 9, 2011, Ternium and Techint, following the pricing of the underwritten public offering mentioned above, entered into purchase agreements with Usiminas relating to their concurrent purchase transactions of Ternium shares. Under these agreements, on February 15, 2011, Ternium and Techint purchased from Usiminas 41,666,666 and 27,777,780 Ternium shares for a total consideration of USD 150 million and USD 100 million, respectively. In connection with the sale of Ternium’s shares by Usiminas, Ternium collected a USD 10.2 million fee, included in “Other operating income (expenses), net” and was reimbursed of all expenses relating to the offering and concurrent purchase.

Following consummation of these transactions, Techint owns directly 62.02% of the Company’s share capital and Tenaris holds directly 11.46% of the Company’s share capital (both including treasury shares) and Usiminas will no longer own any Ternium shares. In addition, the two members of Ternium’s board of directors nominated by Usiminas resigned from the Ternium board.

Related to the dividends distributed on June 9, 2011, and as these treasury shares are hold by one of Ternium’s subsidiaries, the dividends attributable to these treasury shares amounting to USD 3.1 million were included in equity as less dividend paid.

TERNIUM S.A.
Notes to the Consolidated Condensed Interim Financial Statements (Contd.)

13 Debt refinancing in Ternium Mexico

On April 6, 2011, the Company’s subsidiary Ternium Mexico, S.A. de C.V. (Ternium Mexico), Crédit Agricole Corporate and Investment Bank, acting as Administrative Agent, and certain banks parties to a loan agreement dated as of July 12, 2007, partially refinanced a syndicated loan facility that had been incurred to finance Ternium’s 2007 acquisition of Grupo Imsa, a company subsequently merged into Ternium Mexico.

The outstanding balance of the facility refinanced amounted to USD 1.0 billion. As part of the refinancing, the final maturity date of bank loans in a principal amount of USD 0.8 billion was extended to July 23, 2014 (with the extended loans being payable in four consecutive and equal semi-annual installments commencing on January 26, 2013), and the applicable margin structure for the extended loans was amended. On July 26, 2012, Ternium Mexico will repay the remaining USD 0.2 billion principal amount of the loans that were not refinanced.

14 Recent developments involving Siderar S.A.I.C.

On July 21, 2011, the general meeting of Siderar’s shareholders approved (with the vote of all shareholders present, including the directors of Administracion Nacional de Seguridad Social, Argentina’s governmental social security agency) a dividend of approximately USD 360 million, payable out of Siderar’s 2010 results. The payment of such dividends was received on September 7, 2011.

15 Related party transactions

As of September 30, 2011, Techint owned 62.02% of the Company’s share capital and Tenaris held 11.46%, of the Company’s share capital. Each of Techint and Tenaris were controlled by San Faustin S.A., a Luxembourg company (“San Faustin”). Rocca & Partners Stichting Administratiekantoor Aandelen San Faustin (“RP STAK”), a Dutch private foundation (Stichting), held shares in San Faustin sufficient in number to control San Faustin. No person or group of persons controls RP STAK.

The following transactions were carried out with related parties:

		Nine-month period ended
		September 30,
		2011				2010
		(Unaudited)
(i) Transactions
(a) Sales of goods and services
Sales of goods to other related parties			108,575				138,302
Sales of services and others to associated parties			65				51
Sales of services and others to other related parties			1,576				1,395
			110,216				139,748
(b) Purchases of goods and services
Purchases of goods from other related parties			(39,989	)			(34,463	)
Purchases of services and others from associated parties			(32,089	)			(26,049	)
Purchases of services and others from other related parties			(91,710	)			(89,854	)
			(163,788	)			(150,366	)
(c) Financial results
Income with associated parties			83				55
			83				55