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Ternium S.A. Form 6-K Summary

Business Context and Reporting Period

This Form 6-K, filed on May 4, 2007, serves as a notice of the Annual General Meeting of Shareholders scheduled for June 6, 2007. The filing includes the Shareholder Meeting Brochure, Proxy Statement, and the Company's 2006 Annual Report. Ternium S.A. is a leading steel producer in the Americas with integrated manufacturing facilities in Mexico, Argentina, and Venezuela. The financial data presented covers the fiscal year ended December 31, 2006, which was the Company's first full year as a publicly listed entity following its Initial Public Offering (IPO) in February 2006.

Key Financial Metrics (Year Ended Dec 31, 2006)

Operational Highlights: Total shipments of flat and long products reached 9.035 million tons (up from 6.600 million tons in 2005). The Company produced nearly 10 million tons of crude steel. Basic earnings per share were $0.41, and basic earnings per ADS were $4.11.

Material Changes vs. Prior Period

• Revenue Growth: Net sales increased by 48% to $6.6 billion, driven by higher shipment volumes (up 37%) and favorable pricing environments in core markets.
• Debt Reduction: Total financial debt decreased by $1.8 billion (60%) to $1.1 billion. This reduction was achieved through the IPO proceeds, the conversion of subordinated convertible loans into shares, and strong operating cash flows.
• Profitability: While total net income decreased slightly due to minority interest allocations, net income attributable to equity holders increased by 13% to $795.4 million. Operating margin improved to 25% of net sales.
• Acquisitions: The Company completed several strategic acquisitions in 2006, including the remaining 50% stake in Acerex (Mexico), tube manufacturing assets from Acindar (Argentina), and an additional 4.85% equity stake in Siderar (Argentina).

Guidance, Outlook, and Risks

Dividend Proposal: The Board proposes a dividend of US$0.05 per share (US$0.50 per ADS), payable on June 12, 2007, totaling approximately $100.2 million.

Outlook: Management anticipates continued growth in steel consumption in Latin America, though at a slightly lower rate than 2006. The North American outlook is mixed, with expected growth in Mexico but a slight shrinkage in the U.S. market due to de-stocking. The Company plans capital expenditures of approximately $1.7 billion for the 2007-2010 period to expand capacity in Mexico, Argentina, and Venezuela.

Risks and Contingencies:

• Operational Disruptions: A union-led work slowdown at the Ternium Sidor mill in Venezuela during Q4 2006 reduced shipments by an estimated 170,000 tons. The mill returned to full production in November 2006.
• Legal and Tax: The Company faces ongoing litigation regarding gas pricing with PDVSA-Gas (Venezuela) and tax claims in Argentina (Siderar) and Venezuela (Sidor). Provisions have been recorded for probable outflows.
• Commodity Prices: The Company is exposed to volatility in iron ore, coal, and energy prices, though it utilizes hedging mechanisms and long-term contracts to mitigate risk.

Investor Verification Checklist

• Dividend Payout: Verify the final approval of the $0.50 per ADS dividend at the June 6, 2007 meeting.
• Debt Covenants: Confirm continued compliance with financial covenants under the Ternium Credit Facility and Siderar Credit Facility, particularly regarding dividend restrictions.
• Operational Stability: Monitor the status of labor relations at the Sidor facility in Venezuela to ensure no recurrence of work stoppages.
• Capital Expenditure Execution: Track progress on the $1.7 billion investment plan, specifically the expansion of hot strip mills in Mexico and Argentina.
• Minority Interest: Review the allocation of net income between equity holders and minority interests, as minority interest represented a significant portion of total net income in 2006.