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Ternium S.A. Form 6-K Summary

Business Context and Reporting Period

This Form 6-K, filed on January 31, 2011, presents excerpts from Ternium S.A.'s previously published press release and consolidated condensed interim financial statements for the nine-month period ended September 30, 2010. The filing was submitted in connection with a Registration Statement on Form F-3. Ternium is a global steel manufacturer with operations primarily in Latin America and North America.

Key Financial Metrics (Nine Months Ended Sept 30, 2010)

Operational Highlights: Shipments totaled 5.95 million tons, a 26% increase year-over-year. Revenue per ton rose 20% to $893. Operating margin improved to 17% of net sales from 2% in the prior period.

Material Changes vs. Prior Period

• Revenue Growth: Driven by a 26% increase in shipments and a 20% increase in revenue per ton due to higher steel prices and recovering demand in Latin America and North America.
• Operating Income Surge: The 1,046% increase in operating income was primarily due to higher volumes and prices, partially offset by increased operating costs per ton (raw materials, labor, maintenance).
• Discontinued Operations: The 9M 2009 period included a $428.0 million gain from the transfer of Sidor shares to Venezuela. No such gain occurred in 9M 2010.
• Foreign Exchange: A $100.2 million non-cash foreign exchange gain in 2010 (vs. $10.9 million in 2009) resulted from the revaluation of the Mexican Peso against the US dollar on Ternium Mexico's debt.
• Cash Flow: Operating cash flow decreased significantly despite higher operating income due to a $485 million increase in working capital (primarily inventory buildup) compared to a working capital decrease in 2009.

Guidance, Outlook, and Risks

Outlook: Management anticipates steel demand in Latin America will continue to recover. However, shipments in the coming quarters are expected to remain relatively stable compared to Q3 2010 due to seasonal patterns. Operating margins are expected to decrease in Q4 2010 due to lower prices and higher costs per ton, as increased raw material and slab prices from Q2 and Q3 are reflected in cost of sales.

Recent Developments & Risks:

• Ferrasa Acquisition: Completed acquisition of a 54% interest in Ferrasa S.A.S. (Colombia) for $74.5 million in August 2010.
• Mexico Joint Venture: Signed an agreement with Nippon Steel to form "Tenigal," a joint venture to build a $350 million hot-dip galvanizing plant in Mexico, expected to produce in 2013.
• Sidor Compensation: The final payment of $257.4 million from the Venezuelan government (CVG) was rescheduled in December 2010. Payments are secured by third-party promissory notes.
• Corus Arbitration: A partial final award in December 2010 held that Ternium's liability for the wrongful termination of a steel slab off-take agreement is capped at approximately $29.7 million. Damages and counterclaims remain pending.
• Tax Regime Change: Effective January 1, 2011, Ternium converted from a 1929 holding company regime to an ordinary public limited liability company, subjecting it to Luxembourg corporate and withholding taxes, though a special reserve is expected to mitigate withholding tax on dividends.

Investor Verification Checklist

• Verify the sustainability of the 20% increase in revenue per ton against rising raw material costs in Q4 2010.
• Monitor the collection status of the rescheduled $257.4 million Sidor compensation balance from CVG.
• Assess the impact of the Corus arbitration final award on potential liabilities beyond the $29.7 million cap.
• Review the execution timeline and capital requirements for the Tenigal joint venture in Mexico ($350 million) and the associated Ternium Mexico expansion ($700 million).
• Confirm the impact of the new Luxembourg tax regime on future dividend distributions and effective tax rates.