===============================================================================
FORM 6-K
UNITED STATES
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
For MAY 16, 2002
Companhia Vale do Rio Doce
(Exact name of Registrant as specified in its charter)
Valley of the Doce River Company
(Translation of Registrant's name into English)
Federative Republic of Brazil
(Jurisdiction of incorporation or organization)
Avenida Graca Aranha, No. 26
20005-900 Rio de Janeiro, RJ, Brazil
(Address of principal executive offices)
[Indicate by check mark whether the registrant files or will file annual
reports under cover of Form 20-F or Form 40-F:]
FORM 20-F X FORM 40-F
--- ---
[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 NO X
--- ---
[If "Yes " is marked, indicate below the file number assigned to the registrant
in connection with Rule 12g3-2(b):] Not applicable
--------------
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Companhia Vale do Rio Doce
TABLE OF CONTENTS
This Form 6-K contains the following:
Sequential
Page
Item Number
---- ------
1. Management Discussion and Analysis of the Operating Results for
the Three Months Ended March 31, 2002 Compared with Three Months
Ended March 31, 2001..................................................4
2. Index to Consolidated Financial Statements............................66
3. Press Release entitled "Companhia Vale Do Rio Doce First
(Brazilian GAAP)Quarter Performance in 2002" dated May 15,
2002 .................................................................84
4. Press Release entitled "Companhia Vale Do Rio Doce First (US
GAAP) Quarter Performance in 2002" dated May 15, 2002 ...............106
This Report on Form 6-K is incorporated by reference into the registration
statement on Form F-4, filed by Companhia Vale Do Rio Doce on March 21, 2002,
and into the prospectus that forms part of that registration statement.
Item 1
CONTENTS
PART I PAGE
1- Management's Discussion and Analysis of the Operating Results for
Three Months Ended March 31, 2002 Compared with Three Months
Ended March 31, 2001 03
1.1- General Aspects 03
1.2- Comments on the Consolidated Results 04
1.2.1- Consolidated Gross Revenue 04
1.2.2- Cost of Products and Services 05
1.3- Comments on the Parent Company Results 05
1.3.1- Gross Revenues 05
1.3.2- Cost of Products and Services 07
1.3.3- Result of Shareholdings 07
1.3.4- Operating Expenses 09
1.3.5- Net Financial Result 09
1.3.6- Discontinued Operations - 2001 09
1.3.7- Cash Flow 09
1.3.8- Income Tax and Social Contribution 09
PART II
QUARTERLY INFORMATION AND NOTES TO THE QUARTERLY INFORMATION
2- Balance Sheet 10
3- Statement of Income 11
4- Statement of Changes in Stockholders' Equity 12
5- Statement of Cash Flows (Additional Information) 13
6- Notes to the Quarterly Information at March 31, 2002 and 2001 14
6.1- Operations 14
6.2- Presentation of Quarterly Information 14
6.3- Significant Accounting Policies 14
6.4- Cash and Cash Equivalents 14
6.5- Accounts Receivable from Customers 15
6.6- Transactions with Related Parties 15
6.7- Inventories 15
6.8- Deferred Income Tax and Social Contribution 16
6.9- Investments 17
6.10- Property, Plant and Equipment 20
6.11- Loans and Financing 21
6.12- Securitization Program 22
6.13- Contingent Liabilities 23
6.14- Environmental and Site Reclamation and Restoration Costs 24
6.15- Pension Plan - VALIA 24
6.16- Capital 25
6.17- American Depositary Receipts (ADR) Program 26
6.18- Treasury Stock 26
6.19- Financial Results 27
CVRD 1
6.20- Financial Instruments - Derivatives 27
6.21- Exchange Rate Exposure 29
6.22- Subsequent Events 29
PART III
7- Other Information the Company Deems Relevant 30
7.1- Net Accumulated Income in R$ Million 30
7.2- Factors Affecting the Net Income in the Last 12 months in
R$ Million 30
7.3- Business Performance Ratios 31
7.4- Segment and Geographic Information 31
7.5- Share Performance on Stock Exchanges (Unaudited) 33
7.6- Capital Expenditures (Unaudited) 34
7.7- Operations for the Period Ended March (Unaudited) 34
7.8- Changes in Prices (Unaudited) 35
7.9- Iron Ore and Pellet Sales (Main Markets) (Unaudited) 36
7.10- Shareholding Interests Organizational Chart at 03/31/02 37
7.11- Information about ZAGAIA (Unaudited) 38
7.12- Information about RDE (Unaudited) 38
8- Attachment I - Equity Investment Information 39
8.1- Aluminum Area - ALBRAS (Adjusted and Unaudited) 39
8.2- Aluminum Area - ALUNORTE (Adjusted and Unaudited) 40
8.3- Aluminum Area - ALUVALE (Adjusted and Unaudited) 41
8.4- Aluminum Area - MRN (Adjusted and Unaudited) 42
8.5- Aluminum Area - VALESUL (Adjusted and Unaudited) 43
8.6- Pelletizing Affiliates - HISPANOBRAS (Adjusted and Unaudited) 44
8.7- Pelletizing Affiliates - ITABRASCO (Adjusted and Unaudited) 45
8.8- Pelletizing Affiliates - KOBRASCO (Adjusted and Unaudited) 46
8.9- Pelletizing Affiliates - NIBRASCO (Adjusted and Unaudited) 47
8.10- Pelletizing Affiliates - SAMARCO (Adjusted and Unaudited) 48
8.11- Iron Ore Area - FERTECO (Adjusted and Unaudited) 49
8.12- Manganese and Ferro Alloys Area - SIBRA (Adjusted and Unaudited) 50
8.13- Manganese and Ferro Alloys Area - CPFL (Adjusted and Unaudited) 51
9- Report of Independent Accountants 52
10- Members of the Board of Directors, Audit Committee, Chief Executive
Officer and Executive Directors 53
2 CVRD
PART I
Expressed in thousands
1- MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE OPERATING RESULTS FOR THREE
MONTHS ENDED MARCH 31, 2002 COMPARED WITH THREE MONTHS ENDED MARCH 31,
2001
1.1- General Aspects
(a) The Company's segments of business are mining, logistics and energy, as
follows:
. Ferrous minerals: includes iron ore and pellets as well as manganese
and ferro-alloys;
. Non-ferrous minerals: includes gold, kaolin, potash and copper;
. Logistics: includes railroads, ports and maritime terminals and
shipping;
. Energy: includes electric power generation; and
. Shareholdings: includes interests in producers of aluminum, steel and
fertilizers.
(b) The variations of the main currencies and indexes at 03/31/02 and 03/31/01
in terms of percentages in relation to the real, which impacted the
results of the Company and its subsidiaries, jointly controlled companies
and affiliates, were as follows:
(DELTA)% Currencies / Indexes Parity
-------------------------------------------------------- ----------------------
Period U.S. DOLLAR YEN GOLD IGPM TJLP US$ x R$ US$ x Yen
-------------------- ------------ --------- --------- --------- --------- ---------- ----------
03/31/02 0.1 (1.1) 7.7 0.5 2.4 2.3236 132.85
03/31/01 10.6 0.2 (5.8) 1.4 2.2 2.1616 126.47
About 63% of the Company's gross revenue at 03/31/02 and 61% of the
consolidated revenue is derived from exports and, additionally, part of
domestic sales are denominated in U.S. dollars, while the costs are in
mainly incurred in reais. Consequently, fluctuations in the exchange rate
between the two currencies have a significant impact on the operating cash
flows;
Approximately 95% of the short-term and long-term loans of the Company at
03/31/02 are denominated in U.S. dollars. As a result, exchange rate
fluctuations have a significant impact on the financial expenses (Notes
6.11 and 6.19);
CVRD 3
1.2- Comments on the Consolidated Results
1.2.1- Consolidated Gross Revenue
The following table shows sales volume and revenues by products and services at
03/31/02:
In thousands
of metric tons In millions of
(except gold) reais
------------- -------------
Iron ore 32,566 1,157,520
Pellets 5,840 507,124
------------- -------------
38,406 1,664,644
Railroad transportation 15,892 206,168
Sea transportation 16,840 40,144
Port services 6,008 59,134
Gold (kg) 3,591 79,932
Manganese and Ferrou Alloys 312 176,557
Potash 113 37,794
Steel 430 259,661
Aluminum 2,268 229,331
Kaolin 63 24,436
Other products and services - 22,751
-------------
2,800,552
=============
03/31/02 - R$ 2,800,552 / US$ 1,176,667
[THE FOLLOWING TABLES WERE REPRESENTED BY PIE CHARTS IN THE PRINTED MATERIALS.]
PER MARKET
From Brazil From Abroad
----------- -----------
R$ 1,694,639 R$ 364,708
US$ 712,016 US$ 153,231
EM 74% R$ 741,205
US$ 311,420
IM 26%
PER PRODUCT
Manganese, potash and others 9%
Iron ore 42%
Pellets 18%
Steel 9%
Aluminum 8%
Transport 11%
Gold 3%
4 CVRD
1.2.2- Consolidated Cost of Products and Services
By category
03/31/02
------------
Personnel 192,830
Material 264,889
Oil and gas 127,351
Outsourced services 182,170
Energy 112,432
Others 141,115
------------
Sub total 1,020,787
Acquisition of products 262,951
Depreciation and depletion 246,297
------------
Total 1,530,035
============
1.3- Comments on the Parent Company Results
The net income of the Company for 03/31/02 was R$ 633,138, a 4% decrease on the
R$ 659,978 on 03/31/01, reducing the earnings per share to R$ 1.65 on 03/31/02
from R$ 1.71 on 03/31/01.
The decrease of 1.8% in the gross margin (44.8% on 03/31/02, against 46.6% on
03/31/01) was due to cost of products and services increase of 20.8% (from R$
705,326 on 03/31/01 to R$ 852,078 on 03/31/02), while gross revenue rose 16,4%
(from R$ 1,374,923 on 03/31/01 to _____ R$ 1,600,803 on 03/31/02). In the first
quarter of 2002, the market of pellets decreased in terms of sales' volumes.
This decrease was monetarily offset by the valorization of the US dollar
against the real, due to exports.
1.3.1- Gross Revenues
Gross revenues increased 16,4% (from R$ 1,374,923 on 03/31/01 to R$ 1,600,803
on 03/31/02). This reflects the strengthening of the U.S. dollar against the
real as well as a growth in iron ore and gold sales volume, offset in part by a
decrease in the volumes of other products and services sold. The increase in
iron ore sales is due to the acquisition of mining operations formerly
belonging to Samitri in May 2001. However, these events also resulted in a
decrease in gross revenue from railroad transport and port services since CVRD
ceased to sell these services to Socoimex and absorbed related costs.
CVRD 5
The following table shows sales volume and revenues by products and services:
In thousands of metric
tons (except gold) In millions of reais
----------------------------- --------------------------------
03/31/02 03/31/01 (DELTA)% 03/31/02 03/31/01 (DELTA)%
------------ ------------- -------------- --------------
External market
Iron ore 21,916 17,373 26.1 751,434 527,443 42.5
Pellets 2,563 3,045 (15.8) 174,914 181,655 (3.7)
------------ ------------- -------------- --------------
24,479 20,418 19.9 926,348 709,098 30.6
------------ ------------- -------------- --------------
Internal market
Iron ore 8,463 9,173 (7.7) 237,887 231,708 2.7
Pellets 721 584 23.5 70,540 53,041 33.0
------------ ------------- -------------- --------------
9,184 9,757 (5.9) 308,427 284,749 8.3
------------ ------------- -------------- --------------
Total
Iron ore 30,379 26,546 14.4 989,321 759,151 30.3
Pellets 3,284 3,629 (9.5) 245,454 234,696 4.6
------------ ------------- -------------- --------------
33,663 30,175 11.6 1,234,775 993,847 24.2
------------ ------------- -------------- --------------
Railroad transportation 13,258 16,611 (20.2) 187,918 209,743 (10.4)
Port services 5,517 9,355 (41.0) 42,454 49,671 (14.5)
Gold (kg) 3,591 3,367 6.7 79,932 57,463 39.1
Manganese - 161 (100.0) - 15,654 (100.0)
Potash 113 133 (15.0) 37,794 38,489 (1.8)
Other products and services - - - 17,930 10,056 78.3
-------------- --------------
1,600,803 1,374,923 16.4
============== ==============
Operating Revenue 03/31/02 - R$ 1,600,803 / US$ 675,586
[THE FOLLOWING TABLES WERE REPRESENTED BY PIE CHARTS IN THE PRINTED MATERIALS.]
PER MARKET
IM 37% EM 63%
R$ 320,180 R$ 1,006,280
US$ 134,525 US$ 425,794
R$
R$ 274,343
US$ 115,267
PER PRODUCT
Potash and others 4%
Iron ore 62%
Pellets 15%
Transport 14%
Gold 5%
PER CURRENCIES*
R$ 17%
US$ 83%
(*) Part of sales to the internal market are in U.S. dollars.
6 CVRD
1.3.2- Cost of Products and Services
The increase of 20.8% in the cost of products and services (from R$ 705,326 on
03/31/01 to R$ 852,078 on 03/31/02).The incorporation of Samitri also
contributed to the increase of cost of products and services. The following
table shows each component of the cost of products and services, and the change
between periods :
By category
Denominated
-------------------------
R$ US$ 03/31/02 03/31/01 (DELTA)%
----------- ----------- ----------- ----------- -----------
Personnel 122,249 - 122,249 96,773 26.3
Material 52,414 61,282 113,696 91,671 24.0
Oil and gas 55,888 23,952 79,840 74,255 7.5
Outsourced services 127,221 1,155 128,376 94,845 35.4
Energy 27,388 - 27,388 18,256 50.0
Others 27,551 35,360 62,911 46,147 36.3
----------- ----------- ----------- -----------
Subtotal 412,711 121,749 534,460 421,947 26.7
Acquisition of iron ore and pellets 5,292 138,009 143,301 168,054 (14.7)
Depreciation and depletion 149,898 - 149,898 111,217 34.8
Amortization of goodwill 24,419 - 24,419 4,108 494.4
----------- ----------- ----------- -----------
Total 592,320 259,758 852,078 705,326 20.8
=========== =========== =========== ===========
70% 30% 100%
=========== =========== ===========
1.3.3- Result of Shareholdings
The results of shareholdings by business area are as follows:
Business Area 03/31/02 03/31/01
----------------------------- ------------ ------------
Ferrous
.. Iron ore and pellets 151,354 103,079
.. Manganese and ferro-alloys 20,191 (18,765)
Non-ferrous 4,817 (4,223)
Logistics (75,883) 37,341
Investments
.. Steel (8,713) 168,119
.. Pulp and paper 6,832 3,943
.. Aluminum 65,111 17,313
.. Fertilizers 3,759 1,362
Others (15,563) -
------------ ------------
151,905 308,169
============ ============
The numbers reported per area do not necessarily reflect the individual results
of each company, but rather the amounts effectively applicable to the business
area.
Equity earnings, decreasing from a gain of R$ 308,169 on 03/31/01 to R$ 151,905
on 03/31/02. This variation was due to a combination of the following factors:
Ferrous
(a) Iron ore and pellets
.. ITACO - An improved equity result of R$ 30,456 (a gain of R$ 51,333 on
03/31/02 against a gain of R$ 20,877 on 03/31/01). In operational terms,
iron ore sales volume increased by 39.7% (14,266 thousand tons in 2002
against 10,213 thousand tons in 2001).
.. KOBRASCO - An improved equity result of R$ 7,516 (a gain of R$ 1,524 on
03/31/02 versus a loss of R$ 5,992 on 03/31/01), due to the reduced
negative effects of exchange rate variation on debt in 2002 compared with
2001 and an increase in the average sale price of
CVRD 7
2.9% (US$ 31.69 per ton on 03/31/02 against US$ 30.79 per ton on
03/31/01), offset in part by a 12.7% decrease in sales volume (856
thousand tons on 03/31/02 against 981 thousand tons on 03/31/01).
.. NIBRASCO - A reduction in the equity result of R$ 3,701 (a loss of R$
2,174 on 03/31/02 against a gain of R$ 1,527 on 03/31/01), caused by a
50.2% fall in sales volume (1,000 thousand tons in 2002 against 2,010
thousand tons in 2001), while the average sales price remained virtually
stable (US$ 30.39 per ton on 03/31/02 versus US$ 30.31 per ton on
03/31/01).
.. RDE - A reduction in the equity result of R$ 39,454 (a gain of R$ 34,103
on 03/31/02 against a gain of R$ 73,557 on 03/31/01), due basically to a
lesser appreciation of the dollar against the real (a positive exchange
rate variation of R$ 3,058 on 03/31/02 versus a positive exchange rate
variation of R$ 64,940 on 03/31/01).
.. SAMARCO - A positive equity result of R$ 25,200 (a gain of R$ 29,048 on
03/31/02 against a gain of R$ 3,848 on 03/31/01), due to a reduction of
negative effects at the exchange rate variation on debt. In operational
terms, sales volume fell by 2.9% (3,301 thousand tons on 03/31/02 against
3,399 thousand tons on 03/31/01) and the average sales price fell by 1.2%
(US$ 28.48 per ton on 03/31/02 against US$ 28.83 per ton on 03/31/01).
.. FERTECO - A positive equity result of R$ 29,051 was recorded in 2002. The
company was acquired in April 2001.
(b) Manganese and Ferro-alloys
.. RDME - A reduction in the equity result of R$ 6,482 (a loss of R$ 2,277 on
03/31/02 versus a gain of R$ 4,205 on 03/31/01), due basically to the
smaller appreciation of the French franc against the real as of 03/31/02.
.. SIBRA - A better result from shareholding interest of R$ 39,107 (a gain of
R$ 33,296 on 03/31/02 versus a loss of R$ 5,811 on 03/31/01), due to a
31.8% increase in manganese and ferroalloy sales of, respectively, 31.8%
(278 thousand tons on 03/31/02 against 211 thousand tons on 03/31/01) and
16.0% (29 thousand tons on 03/31/02 against 25 thousand tons on 03/31/01),
respectively, as well as a 32.0% increase in the average price of
manganese (US$ 55.11 per ton on 03/31/02 against US$ 41.74 per ton on
03/31/01), offset partly by a 23.5% fall in the price of ferroalloys (US$
445.67 per ton on 03/31/02 against US$ 582.53 per ton on 03/31/01),
.. URUCUM - An improved equity result of R$ 6,943 (a gain of R$ 8,685 on
03/31/02 against a gain of R$ 1,742 on 03/31/01), due mainly to an
increase of 167.6% in manganese sales (91 thousand tons on 03/31/02
against 34 thousand tons on 03/31/01).
Non-ferrous
.. PARA PIGMENTOS - A positive equity result of R$ 5,001 on 03/31/02 against
a loss of R$ 4,243 on 03/31/01, due to goodwill amortization.
Logistics
.. DOCENAVE - A reduction in the equity result of R$ 21,622 (a gain of R$
17,495 on 03/31/02 against a gain of R$ 39,117 on 03/31/01), due to the
lesser appreciation of the dollar against the real and a 30.0% decrease in
average freight rates (US$ 5.69 per ton carried on 03/31/02 against US$
8.13 per ton carried on 03/31/01).
.. DOCEPAR - A negative equity result of R$ 50,735 was recorded mainly due to
fiscal contingency.
.. FCA - R$ 30,767 of amortization of goodwill was booked on 03/31/02, along
with R$ 6.041 as a provision for losses, the latter arising from the
negative effects of exchange rate variation on debt. In 2001, the
provision was constituted starting in the third quarter. CVRD's interest
in FCA is held through its subsidiary Tacuma.
Shareholdings
(a) Steel
.. CSI - A reduction in the equity result of R$ 35,442 (a gain of R$ 617 on
03/31/02 against a gain of R$ 36,059 on 03/31/01), caused by the lesser
appreciation of the dollar against the real (positive exchange rate
variation of R$ 617 on 03/31/02 versus a positive variation of R$ 38,019
on 03/31/01).
.. CSN - An equity result of R$ 107,522 was recorded on 03/31/01 due to
unwinding the cross shareholdings between CVRD and CSN carried out in
March 2001.
.. CST - A better equity result of R$ 9,146 (a loss of R$ 2,638 on 03/31/02
against a loss of R$ 11,784 on 03/31/01), due mainly to the effect of
devaluation of the real on indebtedness.
8 CVRD
(b) Aluminum
.. ALBRAS - A better equity result of R$ 39,480 (a gain of R$ 38,731 on
03/31/02 against a loss of R$ 749 on 03/31/01), due to reduced negative
effects of exchange rate variation on the company's debt. In operational
terms, the average aluminum sales price fell 13.9% (US$ 1,319.81 per ton
on 03/31/02 compared with US$ 1,532.90 per ton on 03/31/01) and sales
volume fell by 2.2% (88 thousand tons on 03/31/02 against 90 thousand tons
on 03/31/01).
.. ALUNORTE - A better equity result of R$ 25,203 (a gain of R$ 4,526 on
03/31/02 against a loss of R$ 20,677 on 03/31/01), due to reduced negative
effects of exchange rate variation on the company's debt. Operationally,
the average sales price of alumina fell 18.7% (US$ 161.55 per ton on
03/31/02 versus US$ 198.83 per ton on 03/31/01) and sales volume increased
17.6% (427 thousand tons on 03/31/02 versus 363 thousand tons on
03/31/01).
.. MRN - A reduction in the equity result of R$ 5,091 (a gain of R$ 9,776 on
03/31/02 against a gain of R$ 14,867 on 03/31/01), due to a decrease in
sales volume of 18.5% (1,781 thousand tons on 03/31/02 compared with 2,185
thousand tons on 03/31/01).
.. VALESUL - A reduction in the equity result of R$ 979 (a gain of R$ 3,415
on 03/31/02 against a gain of R$ 4,394 on 03/31/01), caused by a decrease
of 18.3% in the average sales price (US$ 1,720.97 per ton on 03/31/02
against US$ 2,107.06 per ton on 03/31/01), offset partly by a 31.3% rise
in sales volume (21 thousand tons on 03/31/02 versus 16 thousand tons on
03/31/01)
.. ALUVALE - A reduction in the equity result (own operations) of R$ 2,520 (a
gain of R$ 8,477 on 03/31/02 against a gain of R$ 10,997 on 03/31/01).
.. ITACO - A reduction in the equity result of R$ 8,295 (a gain of R$ 186 on
03/31/02 against a gain of R$ 8,481 on 03/31/01), due to a 47% fall in
bauxite sales volume. The average sales prices of aluminum, alumina and
bauxite, fell, respectively, by 13.4%, 25.7% and 31.2%.
1.3.4- Operating Expenses
The operating expenses decreased R$ 7,322 (R$ 184,666 on 03/31/01 against R$
191,988 on 03/31/02), basically due to an increase of administrative expenses,
partially offset by a decrease in other operating expenses since contingent
liabilities registered R$ 36 millions of expenses on March, 2001 against R$ 2
millions of income on March, 2002.
1.3.5- Net Financial Result
The net financial result increased R$ 338,027 (R$ 388,357 on 03/31/01 compared
to R$ 50,330 on 03/31/02), mainly due to the exchange rate variations on the
net Company debt (Note 6.19).
1.3.6- Discontinued Operations - 2001
The result reflects basically gains on sale of the Company's interest in Bahia
Sul of R$ 230,384.
1.3.7- Cash Flow
The operating cash flow measured by EBITDA (earnings before interest, income
tax, depreciation, amortization and depletion) was R$ 727,811 on 03/31/02,
reflecting an increase of 5.5% over 2001, which was R$ 689.975 (item 7.4).
1.3.8- Income Tax and Social Contribution
Income tax and social contribution was a credit of R$ 31,374 (credit of R$
66,840 on 03/31/01), after recognizing the benefit from paying interest on
stockholders' equity of R$ 107,680 on 03/31/02 (R$ 112,196 on 03/31/01) (Note
6.8).
CVRD 9
PART II
QUARTERLY INFORMATION AND NOTES TO THE QUARTERLY INFORMATION
(A free translation of the original in Portuguese relating to the financial
statements prepared in accordance with the requirements of Brazilian Corporate
Law)
2- BALANCE SHEET In thousands of reais
-------------------------------------------------------------------------------
Notes 03/31/02 12/31/01
----- --------- ---------
Assets
Current assets
Cash and cash equivalents 6.4 1,260,372 645,346
Accounts receivable from customers 6.5 961,100 919,855
Related parties 6.6 1,356,024 1,010,878
Inventories 6.7 415,021 447,517
Taxes recoverable - 97,907 96,289
Deferred income tax and social contribution 6.8 638,759 613,375
Others - 256,986 256,911
---------- ----------
4,986,169 3,990,171
---------- ----------
Long-term receivables
Related parties 6.6 1,424,072 1,356,055
Loans and financing - 262,436 298,540
Deferred income tax and social contribution 6.8 297,262 296,677
Judicial deposits 6.13 539,226 516,268
Others - 38,889 39,153
---------- ----------
2,561,885 2,506,693
---------- ----------
Permanent assets
Investments 6.9 8,518,246 8,347,468
Property, plant and equipment 6.10 7,764,886 7,580,877
---------- ----------
16,283,132 15,928,345
---------- ----------
23,831,186 22,425,209
========== ==========
Liabilities and stockholders' equity
Current liabilities
Short-term debt 6.11 1,774,835 927,409
Current portion of long-term debt 6.11 356,672 386,866
Payable to suppliers and contractors - 446,208 522,805
Related parties 6.6 678,482 715,579
Provision for interest on stockholders' equity - 316,569 -
Interest on stockholders' equity - 2001 - 783,837 784,003
Payroll and related charges - 102,488 118,212
Pension Plan 6.15 63,896 64,506
Others - 126,016 103,568
---------- ----------
4,649,003 3,622,948
---------- ----------
Long-term liabilities
Long-term debt 6.11 3,359,584 3,325,614
Related parties 6.6 2,086,651 2,053,601
Deferred income tax and social contribution 6.8 81,692 87,097
Provisions for contingencies 6.13 903,816 893,726
Pension Plan 6.15 425,580 429,325
Others - 241,971 246,335
---------- ----------
7,099,294 7,035,698
---------- ----------
Stockholders' equity
Paid-up capital 6.16 4,000,000 4,000,000
Capital reserves - 443,684 443,684
Revenue reserves - 7,639,205 7,322,879
---------- ----------
12,082,889 11,766,563
---------- ----------
23,831,186 22,425,209
========== ==========
The additional information, notes and attachment I are an integral part of
these statements.
CVRD 11
(A free translation of the original in Portuguese relating to the quarterly
information prepared in accordance with the requirements of Brazilian Corporate
Law)
3- STATEMENT OF INCOME In thousands of reais
-------------------------------------------------------------------------------
Notes 03/31/02 03/31/01
----- --------- ---------
Operating revenues
Sales of ore and metals
Iron ore and pellets 1,234,775 993,847
Gold 79,932 57,463
Others 37,784 54,143
--------- ---------
1,352,491 1,105,453
Railroad and port services 230,372 259,414
Others 17,940 10,056
--------- ---------
1,600,803 1,374,923
Value Added taxes (56,548) (54,171)
--------- ---------
Net operating revenues 1,544,255 1,320,752
--------- ---------
Cost of products and services
Ore and metals (673,324) (522,759)
Railroad and port services (88,192) (98,892)
Others products and services (90,562) (83,675)
--------- ---------
(852,078) (705,326)
--------- ---------
Gross profit 692,177 615,426
Gross margin 44.8% 46.6%
Operating expenses
Selling (28,172) (24,981)
Administrative (98,751) (56,074)
Research and development (21,257) (19,592)
Other operating expenses, net (43,808) (84,019)
--------- ---------
(191,988) (184,666)
--------- ---------
Operating profit before financial result and
result of investment participations 500,189 430,760
Result of investment participations 6.9
Gain on investments accounted for by
the equity method 284,115 298,000
Amortization of goodwill (66,188) (25,691)
Provision for losses (66,750) 25,454
Others 728 10,406
--------- ---------
151,905 308,169
Financial result, net 6.19
Financial expenses (income) (73,799) (57,266)
Monetary and exchange rate variation, net 23,469 (331,091)
--------- ---------
(50,330) (388,357)
--------- ---------
Operating profit 601,764 350,572
Discontinued operations - 242,566
--------- ---------
Income before income tax and social contribution 601,764 593,138
Income tax and social contribution 6.8 31,374 66,840
--------- ---------
Net income for the period 633,138 659,978
========= =========
Number of shares outstanding at the end of
the period (in thousands) 383,839 385,032
========= =========
Net earnings per share outstanding at the
end of the period (R$) 1.65 1.71
========= =========
The additional information, notes and attachment I are an integral part of
these statements.
12 CVRD
(A free translation of the original in Portuguese relating to the quarterly
information prepared in accordance with the requirements of Brazilian Corporate
Law)
4- STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY In thousands of reais
-----------------------------------------------------------------------------------------------------------
Capital Revenue Retained
Capital reserves reserves earnings Total
--------- -------- --------- --------- ----------
On December 31, 2000 3,000,000 740,887 6,824,704 - 10,565,591
--------- -------- --------- --------- ----------
Treasury shares - - (57,528) - (57,528)
Capitalization of reserves 1,000,000 (300,629) (699,371) - -
Provision for pension plan liabilities - - - (22,160) (22,160)
Result on exchange of shares - 3,426 - - 3,426
Net income for the year - - - 3,050,710 3,050,710
Proposed appropriations:
Interest on stockholder's equity - - - (1,773,476) (1,773,476)
Appropriation to revenue reserves - - 1,255,074 (1,255,074) -
--------- -------- --------- --------- ----------
On December 31, 2001 4,000,000 443,684 7,322,879 - 11,766,563
--------- -------- --------- --------- ----------
Treasury shares - - (243) - (243)
Net income for the period - - - 633,138 633,138
Provision for interest on stockholders' equity - - - (316,569) (316,569)
--------- -------- --------- --------- ----------
On March 31, 2002 4,000,000 443,684 7,322,636 316,569 12,082,889
========= ======== ========= ========= ==========
The additional information, notes and attachment I are an integral part of
these statements.
CVRD 13
(A free translation of the original in Portuguese)
5- STATEMENT OF CASH FLOWS (ADDITIONAL INFORMATION) In thousands of reais
------------------------------------------------------------------------------------------
03/31/02 03/31/01
--------- ---------
Cash flows from operating activities:
Net income for the year 633,138 659,978
Adjustments to reconcile net income for the year
with cash provided by operating activities:
Result of investment participations (151,905) (308,169)
Depreciation, amortization and depletion 144,733 119,597
Deferred income tax and social contribution (31,374) (66,840)
Provision for contingencies (1,814) 36,345
Discontinued operations - (242,566)
Net monetary and exchangerate variations on assets
and liabilities (27,454) 358,392
Loss on disposal of property, plant and equipment 2,562 1,408
Dividends/interest on stockholders' equity received 37,873 82,378
Others (12,932) (7,595)
--------- ---------
592,827 632,928
--------- ---------
Decrease(increase) in assets:
Accounts receivable (41,813) 513,076
Inventories 32,496 (15,694)
Others (2,880) 24,622
--------- ---------
(12,197) 522,004
--------- ---------
Increase (decrease) in liabilities:
Suppliers and contractors (76,597) (37,068)
Payroll and related charges and others (15,724) (17,483)
Others 21,670 17,269
--------- ---------
(70,651) (37,282)
--------- ---------
Net cash provided by operating activities 509,979 1,117,650
--------- ---------
Cash flows from investing activities:
Loans and advances receivable (391,518) (209,089)
Guarantees and deposits (22,366) (16,895)
Additions to investments (2,153) (55,153)
Additions to property, plant and equipment (321,746) (215,617)
Proceeds from disposal of property, plant and equipment
and investments 623 1,146
--------- ---------
Net cash used in investing activities (737,160) (495,608)
--------- ---------
Cash flows from financing activities:
Short-term debt 856,712 845,938
Long-term debt 171,312 107,208
Repayments:
Related parties (69,087) (410,218)
Financial institutions (116,320) (111,447)
Interest on stockholders' equity paid (167) (1,279,205)
Treasury shares (243) -
--------- ---------
Net cash used in financing activities 842,207 (847,724)
--------- ---------
Increase (decrease) in cash and cash equivalents 615,026 (225,682)
Cash and cash equivalents, beginning of theperiod 645,346 1,569,185
--------- ---------
Cash and cash equivalents, end of the period 1,260,372 1,343,503
========= =========
Cash paid during the period for:
Short-term interest (9,409) (11,967)
Long-term interest net of capitalization (72,484) (90,358)
Incometax and social contribution paid - (81,731)
Non-cash transactions:
Change in treasury stocks - CVRD - 2,805
Conversion of loans into investments 45,993 -
14 CVRD
(A free translation of the original in Portuguese relating to the
quarterly information prepared in accordance with the requirements of
Brazilian Corporate Law)
6- NOTES TO THE QUARTERLY INFORMATION AT MARCH 31, 2002 AND 2001
Expressed in thousands
6.1- Operations
Companhia Vale do Rio Doce - CVRD is a publicly traded corporation whose
predominant activities are mining, processing and sale of iron ore, pellets,
gold and potash, as well as port and railroad transportation services and power
generation. In addition, through its direct and indirect subsidiaries and
jointly controlled companies, CVRD operates in logistics, geological studies
and technological research services, steel and aluminum.
6.2- Presentation of Financial Statements
The quarterly information have been prepared according to the accounting
principles provided for in Brazilian corporate legislation as well as the rules
and guidelines issued by the Comissao de Valores Mobiliarios - CVM (Brazilian
Securities Commission) and IBRACON - Instituto dos Auditores Independentes do
Brasil (Brazilian Independent Auditors Institute).
In order to provide better information to the market, the Company is presenting
Statements of Cash Flow. The disclosure of this statement is stimulated by CVM
acording to the rule 01/00 from 01/31/00.
Certain amounts and classifications in the 2001 quarterly information have been
adjusted to the criteria used on 03/31/02 for better comparability.
6.3- Significant Accounting Policies
(a) The Company adopts the accrual basis of accounting;
(b) Assets and liabilities that are realizable or due more than twelve months
after the balance sheet date are classified as long-term;
(c) Marketable securities classified as cash and cash equivalents are stated
at cost plus accrued income earned through the balance sheet date;
(d) Inventories are stated at average purchase or production cost, and imports
in transit at the cost of each item, not exceeding market or realizable
value;
(e) Assets and liabilities in foreign currencies are translated at exchange
rates in effect at the balance sheet date, and those in local currency are
restated based on contractual indexes;
(f) Investments in subsidiaries, jointly controlled companies and affiliated
companies are accounted for by the equity method, based on the
stockholders' equity of the investees, and when applicable
increased/decreased by goodwill and negative goodwill to be amortized and
provision for losses. Other investments are recorded at cost, less
provision for unrealized losses when applicable;
(g) Property, plant and equipment, including interest incurred during the
construction period of large-scale projects, are recorded at historic cost
(increased by monetary restatement up to 1995) and depreciated by the
straight-line method, at rates that take into consideration the useful
lives of the assets. Depletion of mineral reserves is based on the
relation obtained between production and estimated capacity.
6.4- Cash and Cash Equivalents
03/31/02 12/31/01
------------ ------------
Marketable securities related to CDI (*) 931,263 292,264
Fixed-yield bond investments (funds) 133,320 163,153
Government securities (NBC-E, NTN-D, LFT) 194,556 188,923
Others 1,233 1,006
------------ ------------
1,260,372 645,346
============ ============
(*) For part of these investments the Company, contracted swap operations with
financial institutions, related to interest rate and/or currency
variations.
14 CVRD
6.5- Accounts Receivable from Customers
03/31/02 03/31/01
----------- -----------
Domestic 360,666 359,782
Export 638,965 600,928
----------- -----------
999,631 960,710
Allowance for doubtful accounts (22,436) (22,432)
Allowance for ore weight credits (16,095) (18,423)
----------- -----------
961,100 919,855
=========== ===========
6.6- Transactions with Related Parties
Derived from sales and purchases of products and services or from loans under
normal market conditions, with maturities up to the year 2010, as follows:
Assets Liabilities
--------------------------- ---------------------------
03/31/02 12/31/01 03/31/02 12/31/01
------------- ------------ ------------ ------------
Subsidiaries
Rio Doce International Finance Ltd. 1,076,263 674,665 1,227,546 1,152,937
Itabira Rio Doce Company Limited - ITACO 417,609 397,896 226,460 235,143
Mineracao Tacuma Ltda. 392,907 215,364 674 674
CVRD Overseas Ltd. 105,019 76,107 728,284 837,768
Docepar S.A. 68,950 65,917 125 122
SIBRA Eletrosiderurgica Brasileira S.A. 23,461 58,076 13,745 37,292
Brasilux S.A. 50,410 56,302 24,188 14,857
Vale do Rio Doce Aluninio S.A. - ALUVALE 22,783 32,378 133,812 122,520
Others 162,947 121,083 225,114 186,357
------------- ------------ ------------ ------------
2,320,349 1,697,788 2,579,948 2,587,670
------------- ------------ ------------ ------------
Jointly controlled companies
ALUNORTE - Alumina do Norte do Brasil S.A. 708,046 741,346 112,694 175,522
Ferrovia Centro-Atlantica S.A. 7,445 176,999 11,796 3,958
Salobo Metais S.A. 164,777 163,777 - -
Companhia Coreano-Brasileira de Pelotizacao - KOBRASCO 80,413 80,437 75,211 57,735
Companhia Hispano-Brasileira de Pelotizacao - HISPANOBRAS 38,665 47,809 52,387 64,561
Companhia Nipo-Brasileira de Pelotizacao - NIBRASCO 48,993 45,789 21,103 10,769
Companhia Italo-Brasileira de Pelotizacao - ITABRASCO 37,741 41,001 33,453 40,234
Others 137,977 108,569 58,888 52,066
------------- ------------ ------------ ------------
1,224,057 1,405,727 365,532 404,845
------------- ------------ ------------ ------------
Affiliates 35,357 36,607 183 129
------------- ------------ ------------ ------------
3,579,763 3,140,122 2,945,663 2,992,644
============= ============ ============ ============
Represented by:
Commercial balances (sales and purchases of products and services) (*) 799,667 773,189 180,530 223,464
Short-term financial balances 1,356,024 1,010,878 678,482 715,579
Long-term financial balances 1,424,072 1,356,055 2,086,651 2,053,601
------------- ------------ ------------ ------------
3,579,763 3,140,122 2,945,663 2,992,644
============= ============ ============ ============
(*) Included in "Accounts receivable from customers" and "Payable to suppliers
and contractors."
6.7- Inventories
03/31/02 12/31/01
----------- -----------
Finished products
. Iron ore and pellets 116,908 167,430
. Manganese 1,442 2,516
. Gold 15,546 11,509
. Others 23,240 17,451
----------- -----------
157,136 198,906
Spare parts and maintenance supplies 257,885 248,611
----------- -----------
415,021 447,517
=========== ===========
CVRD 15
6.8- Deferred Income Tax and Social Contribution
Income of the Company is subject to the normal tax system. The balances of
deferred assets and liabilities are presented as follows:
Deferred assets Deferred liabilities
----------------------------- -----------------------------
03/31/02 12/31/01 03/31/02 12/31/01
-------------- -------------- -------------- --------------
Tax loss carryforward 207,904 224,389 - -
Temporary differences:
. Pension Plan 167,131 168,282 - -
. Contingent liabilities 253,907 243,317 - -
. Provision for losses on assets 242,515 191,978 - -
. Provision for losses on derivative financial instruments 26,580 25,913 - -
. Others 37,984 56,173 - -
-------------- -------------- -------------- --------------
936,021 910,052 - -
Inflationary profit - - 12,501 12,980
Capital reserve - special monetary restatement - Law 8,200 - - 14,327 19,104
Accelerated depreciation - - 10,904 11,055
Long-term sales - - 43,960 43,958
-------------- -------------- -------------- --------------
Total 936,021 910,052 81,692 87,097
============== ============== ============== ==============
Short-term 638,759 613,375 - -
Long-term 297,262 296,677 81,692 87,097
-------------- -------------- -------------- --------------
936,021 910,052 81,692 87,097
============== ============== ============== ==============
The realization of tax credits arising from temporary differences occurs at the
time of effective payment of the provisions made, in accordance with tax law.
In addition to the credits recorded, the Company has a lawsuit pending claiming
an additional 51.83% monetary restatement for tax purposes applied to the
months of January and February 1989 ("Plano Verao" monetary plan). A favorable
ruling has already been obtained for compensation of credits corresponding to
42.72% instead of the 51.83% requested. The amount of these credits covered by
the ruling total approximately R$ 405,000, and the accounting effects have not
yet been recognized in the quarterly information.
The amounts reported as income tax and social contribution which affected
income for the period are as follows:
03/31/02 03/31/01
------------ ------------
Income before income tax and social contribution 601,764 593,138
(-) Result of investment participations (151,905) (300,169)
(-) Provision for losses on investments (66,750) 25,454
------------ ------------
383,109 318,423
Income tax and social contribution at combined tax rates 34% 34%
------------ ------------
Federal income tax and social contribution at statutory rates (130,257) (108,264)
Adjustments to net income which modify the effect on the result for the period:
. Income tax benefit from interest on stockholders' equity 107,680 112,196
. Fiscal incentives 17,862 59,617
. Revision of prior period tax return 37,038 -
. Others (949) 3,291
------------ ------------
Income tax and social contribution 31,374 66,840
============ ============
16 CVRD
6.9- Investments
Adjusted
Partici- Adjusted net income
pation stockholders' (loss) for
% equity the period
------------- -------------- ------------
Subsidiaries
Florestas Rio Doce S.A. (c) 99.85 93,841 2,868
Itabira Internacional Servicos e Comercio Lda. (a, c, h) 99.99 760,512 1,431
Navegacao Vale do Rio Doce S.A. - DOCENAVE (c) 100.00 368,115 17,495
Rio Doce Europa Servicos e Comercio - RDE (a, c, i) 99.80 2,313,967 91,780
S.A. Mineracao da Trindade - SAMITRI (d) 100.00 - -
SIBRA Eletrosiderurgica Brasileira S.A. (c, d, e, m) 99.21 242,845 33,561
Vale do Rio Doce Aluminio S.A. - ALUVALE (c, f, j, m) 94.74 891,456 64,923
Ferteco Mineracao S.A. (c, d, l, m) 100.00 215,058 29,051
Others (c)
Jointly controlled companies
Companhia Coreano-Brasileira de Pelotizacao - KOBRASCO (b, c, m) 50.00 16,608 3,048
Companhia Hispano-Brasileira de Pelotizacao - HISPANOBRAS (b, c, m) 50.89 85,476 5,015
Companhia Italo-Brasileira de Pelotizacao - ITABRASCO (b, c, m) 50.90 60,230 2,461
Companhia Nipo-Brasileira de Pelotizacao - NIBRASCO (b, c, m) 51.00 78,682 (4,262)
Companhia Siderurgica de Tubarao - CST (b, d, e) 22.85 2,843,712 (11,543)
Companhia Siderurgica Nacional - CSN (c, k) - - -
Minas da Serra Geral S.A. - MSG (b, c) 51.00 53,635 2,623
Samarco Mineracao S.A. (b, c, m) 50.00 510,038 58,096
Others (b, c)
Affiliated companies
Ferroban - Ferrovias Bandeirantes S.A. (c) 18.74 - (20,777)
Fertilizantes Fosfatados S.A. - FOSFERTIL (c, e) 10.96 511,859 34,296
Usinas Siderurgicas de Minas Gerais S.A. - USIMINAS (d, e) 11.46 3,631,550 12,627
Investments at cost
Provision for losses
CELMAR S.A. - Industria de Celulose e Papel (c)
Companhia Ferroviaria do Nordeste (c)
DOCEPAR S.A. (c)
Ferrovia Centro-Atlantica S.A. (c, g)
Others
Amortization of goodwill
Others
Total
Result of investment
Investments participations
---------------------------- --------------------------
03/31/02 12/31/01 03/31/02 03/31/01
------------ ------------- ------------ ------------
Subsidiaries
Florestas Rio Doce S.A. (c) 93,700 90,836 2,864 772
Itabira Internacional Servicos e Comercio Lda. (a, c, h) 760,436 759,005 1,431 76,487
Navegacao Vale do Rio Doce S.A. - DOCENAVE (c) 368,115 350,620 17,495 39,117
Rio Doce Europa Servicos e Comercio - RDE (a, c, i) 2,309,339 2,217,743 104,526 73,557
S.A. Mineracao da Trindade - SAMITRI (d) 771,805 792,116 - 9,250
SIBRA Eletrosiderurgica Brasileira S.A. (c, d, e, m) 524,669 509,350 33,296 (5,811)
Vale do Rio Doce Aluminio S.A. - ALUVALE (c, f, j, m) 844,565 783,057 61,508 8,368
Ferteco Mineracao S.A. (c, d, l, m) 1,242,372 1,218,141 29,051 -
Others (c) 314,072 314,668 1,053 2,276
------------ ------------- ------------ ------------
7,229,073 7,035,536 251,224 204,016
------------ ------------- ------------ ------------
Jointly controlled companies
Companhia Coreano-Brasileira de Pelotizacao - KOBRASCO (b, c, m) 8,304 6,780 1,524 (5,992)
Companhia Hispano-Brasileira de Pelotizacao - HISPANOBRAS (b, c, m) 43,499 40,947 2,552 2,977
Companhia Italo-Brasileira de Pelotizacao - ITABRASCO (b, c, m) 30,657 29,404 1,253 789
Companhia Nipo-Brasileira de Pelotizacao - NIBRASCO (b, c, m) 40,128 42,302 (2,174) 1,527
Companhia Siderurgica de Tubarao - CST (b, d, e) 501,091 504,053 (2,638) (11,784)
Companhia Siderurgica Nacional - CSN (c, k) - - - 107,522
Minas da Serra Geral S.A. - MSG (b, c) 27,354 26,016 1,338 1,383
Samarco Mineracao S.A. (b, c, m) 255,019 225,971 29,048 -
Others (b, c) 97,438 96,762 676 429
------------ ------------- ------------ ------------
1,003,490 972,235 31,579 96,851
------------ ------------- ------------ ------------
Affiliated companies
Ferroban - Ferrovias Bandeirantes S.A. (c) - 3,894 (3,894) (3,717)
Fertilizantes Fosfatados S.A. - FOSFERTIL (c, e) 56,100 56,138 3,759 1,362
Usinas Siderurgicas de Minas Gerais S.A. - USIMINAS (d, e) 416,176 414,729 1,447 (512)
------------ ------------- ------------ ------------
472,276 474,761 1,312 (2,867)
------------ ------------- ------------ ------------
Investments at cost 3,889 3,894 - -
------------ ------------- ------------ ------------
8,708,728 8,486,426 284,115 298,000
------------ ------------- ------------ ------------
Provision for losses
CELMAR S.A. - Industria de Celulose e Papel (c) (59,246) (59,246) - -
Companhia Ferroviaria do Nordeste (c) (35,156) (33,427) (1,729) -
DOCEPAR S.A. (c) (95,675) (36,754) (58,921) 25,454
Ferrovia Centro-Atlantica S.A. (c, g) - (9,185) (6,041) -
Others (405) (346) (59) -
------------ ------------- ------------ ------------
(190,482) (138,958) (66,750) 25,454
------------ ------------- ------------ ------------
Amortization of goodwill - - (66,188) (25,691)
------------ ------------- ------------ ------------
Others - - 728 10,406
------------ ------------- ------------ ------------
Total 8,518,246 8,347,468 151,905 308,169
============ ============= ============ ============
(a) Equity in companies located abroad is converted into local currency at
rates in effect on the quarterly information date. The calculation of the
equity method adjustment comprises the difference due to exchange rate
variations, as well as participation in results;
(b) Notwithstanding the stockholdings, the classification as a jointly
controlled company results from the degree of control exercised by the
Company, which is shared with other partners;
(c) Companies whose quarterly information were not reviewed by independent
accountants;
CVRD 17
(d) Goodwill and negative goodwill on investments are as follows:
03/31/02 12/31/01
------------ ------------
Goodwill
SIBRA Eletrosiderurgica Brasileira S.A. (included R$ 27,984 of goodwill on CPFL) 311,726 331,863
Caemi Mineracao e Metalurgia S.A. (indirectly through ITACO) 504,192 517,122
Ferteco Mineracao S.A. (indirectly through Zagaia) 1,027,314 1,027,314
S.A. Mineracao da Trindade - SAMITRI (merged on October 1, 2001) 771,805 792,116
Mineracao SOCOIMEX S.A. (merged on August 31, 2000) 56,147 60,255
Others 93,547 95,908
------------ ------------
2,764,731 2,824,578
============ ============
Negative goodwill
Companhia Siderurgica de Tubarao - CST (148,697) (148,697)
------------ ------------
(148,697) (148,697)
============ ============
Goodwill was amortized as follows:
03/31/02 03/31/01
------------ ------------
Ferrovia Centro-Atlantica S.A. (c, g) (30,767) -
Para Pigmentos S.A. (c) - (4,243)
SIBRA Eletrosiderurgica Brasileira S.A. (c, e) (20,130) (19,330)
Caemi Mineracao e Metalurgia S.A. (indirectly through ITACO) (12,930) -
Others (a, c, i) (2,361) (2,118)
------------ ------------
(66,188) (25,691)
============ ============
(e) Investments in companies that were listed on stock exchanges on 03/31/02:
Book Value Market Value
------------ ------------
Companhia Siderurgica de Tubarao - CST 501,091 271,577
Fertilizantes Fosfatados S.A. - FOSFERTIL 56,100 101,097
SIBRA Eletrosiderurgica Brasileira S.A. (preferred shares only) 269,649 100,609
Usinas Siderurgicas de Minas Gerais S.A. - USIMINAS 416,176 189,709
The market value of these investments does not necessarily reflect the
value that could be realized from selling a representative group of
shares. The other investments refer to companies that have no shares
listed on stock exchanges;
(f) Indirect holdings through ALUVALE:
Result of investment
Partici- Adjusted Investments participations
pation stockholders' -------------------------- ---------------------------
% equity 03/31/02 12/31/01 03/31/02 03/31/01
-------- -------------- ------------ ------------ ------------- -------------
ALBRAS - Aluminio Brasileiro S.A. (c, m) 51.00 299,202 152,592 113,861 38,731 (749)
ALUNORTE - Alumina do Norte do Brasil S.A. (c, m) 44.96 573,946 258,046 239,856 4,526 (20,677)
Mineracao Rio do Norte S.A. (c, m) 40.00 594,895 237,959 242,156 9,776 14,867
Valesul Aluminio S.A. (c, m) 54.51 231,170 126,008 122,593 3,415 4,394
Own operations 69,960 64,591 5,060 10,533
------------ ------------ ------------- -------------
844,565 783,057 61,508 8,368
============ ============ ============= =============
(g) The investment of CVRD in Ferrovia Centro-Atlantica S.A. is held through
its subsidiary Mineracao Tacuma S.A.;
18 CVRD
(h) Indirect holdings through Itabira Internacional Servicos e Comercio Lda.:
Result of investment
Investments participations
----------------------- ------------------------
03/31/02 12/31/01 03/31/02 03/31/01
---------- ---------- ----------- ----------
California Steel Industries, Inc. - CSI (a, c) - - - 36,059
CVRD Overseas Ltd. (a, c) - - - 10,807
Gulf Industrial Investment Co. - GIIC (a, c) - - - 1,439
Rio Doce Manganese Europe - RDME (a, c) - - - 4,205
Siderar Sociedad Anonima Industrial y Comercial (a, c) - - - 3,092
Vale do Rio Doce Aluminio S.A. - ALUVALE (c) - - - 464
Itabira Rio Doce Company Limited - ITACO (a) - - - 17,112
Other participations (a) - - - 3,309
Itabira Internacional Servicos e Comercio Lda. (a) 760,436 759,005 1,431 -
---------- ---------- ----------- ----------
760,436 759,005 1,431 76,487
========== ========== =========== ==========
In July 2001, Itabira Rio Doce Company Limited - ITACO was sold to Rio
Doce International Finance Ltd., a wholly owned subsidiary of Rio Doce
Servicos e Comercio - RDE;
(i) Indirect holdings through Rio Doce Europa Servicos e Comercio - RDE:
Result of investment
Partici- Adjusted Investments participations
pation stockholders' ------------------------ ------------------------
% equity 03/31/02 12/31/01 03/31/02 03/31/01
-------- -------------- ----------- ----------- ------------ ----------
Caemi Mineracao e Metalurgia S.A. (d) 16.82 941,141 662,492 668,976 5,948 -
California Steel Industries, Inc. - CSI (a, c) 50.00 505,630 252,815 255,947 617 -
CVRD Overseas Ltd. (a) 100.00 196,901 196,901 173,428 23,234 -
Camelback Corporation (a,c) 100.00 115,971 115,971 115,971 - -
Gulf Industrial Investment Co. - GIIC (a, c) 50.00 154,262 77,131 87,584 4,526 -
Itabira Rio Doce Company Limited - ITACO (a, c, j) 99.99 1,029,918 1,029,815 977,846 30,741 -
Rio Doce Manganese Europe - RDME (a, c) 100.00 79,332 79,332 81,609 (2,277) -
Siderar Sociedad Anonima Industrial y Comercial (a, c) 4.85 718,536 34,849 34,802 47 -
Vale do Rio Doce Aluminio S.A. - ALUVALE (c, j, m) 5.26 891,456 46,891 43,474 3,417 -
Other participations (a) 31,466 29,533 4,170 -
Own operations (a) (218,324) (251,427) 34,103 73,557
---------- ---------- ----------- ----------
2,309,339 2,217,743 104,526 73,557
Amortization of goodwill - Caemi Mineracao e Metalurgia S.A. - - (12,930) -
---------- ---------- ----------- ----------
2,309,339 2,217,743 91,596 73,557
========== ========== =========== ==========
(j) The consolidated shareholding in Vale do Rio Doce Aluminio S.A. - ALUVALE
is 100%, the subsidiary Itabira Rio Doce Company Limited - ITACO owns
5.26% of the capital;
(k) In March 2001, CVRD withdrew from CSN by unwinding the cross-participation
relationship between the companies;
(l) CVRD's participation in Ferteco Mineral S.A. is held through its
subsidiary Zagaia Participacoes S.A.;
(m) Attachment I presents additional information about the companies in the
areas of aluminum, pellets and manganese and ferro-alloys.
CVRD 19
6.10- Property, Plant and Equipment
(a) By business area:
03/31/02 12/31/01
--------------------------------------------- ---------------------------------------------
Accumulated Accumulated
Cost depreciation Net Cost depreciation Net
----------- ----------- ----------- ----------- ----------- -----------
Ferrous - Northern System
Mining 1,592,258 (755,405) 836,853 1,536,437 (745,623) 790,814
Railroads 2,679,655 (1,007,093) 1,672,562 2,658,190 (973,272) 1,684,918
Ports 514,629 (242,609) 272,020 514,242 (240,588) 273,654
Construction in progress 386,827 - 386,827 384,781 - 384,781
----------- ----------- ----------- ----------- ----------- -----------
5,173,369 (2,005,107) 3,168,262 5,093,650 (1,959,483) 3,134,167
----------- ----------- ----------- ----------- ----------- -----------
Ferrous - Southern System
Mining 2,543,794 (1,497,489) 1,046,305 2,478,385 (1,466,010) 1,012,375
Railroads 3,039,752 (1,857,867) 1,181,885 3,027,185 (1,836,874) 1,190,311
Ports 560,319 (430,303) 130,016 559,119 (428,586) 130,533
Construction in progress 407,447 - 407,447 386,509 - 386,509
----------- ----------- ----------- ----------- ----------- -----------
6,551,312 (3,785,659) 2,765,653 6,451,198 (3,731,470) 2,719,728
----------- ----------- ----------- ----------- ----------- -----------
Pelletizing 606,595 (439,011) 167,584 604,912 (436,303) 168,609
Construction in progress 447,747 - 447,747 388,273 - 388,273
----------- ----------- ----------- ----------- ----------- -----------
1,054,342 (439,011) 615,331 993,185 (436,303) 556,882
----------- ----------- ----------- ----------- ----------- -----------
Energy 190,128 (15,145) 174,983 190,128 (14,840) 175,288
Construction in progress 203,357 - 203,357 149,221 - 149,221
----------- ----------- ----------- ----------- ----------- -----------
393,485 (15,145) 378,340 339,349 (14,840) 324,509
----------- ----------- ----------- ----------- ----------- -----------
Total ferrous 13,172,508 (6,244,922) 6,927,586 12,877,382 (6,142,096) 6,735,286
----------- ----------- ----------- ----------- ----------- -----------
Non-ferrous
Potash 111,653 (37,936) 73,717 110,232 (35,154) 75,078
Gold 605,464 (428,469) 176,995 614,651 (418,325) 196,326
Research and projects 41,349 (21,479) 19,870 41,961 (22,091) 19,870
Construction in progress 55,177 - 55,177 57,617 - 57,617
----------- ----------- ----------- ----------- ----------- -----------
813,643 (487,884) 325,759 824,461 (475,570) 348,891
----------- ----------- ----------- ----------- ----------- -----------
Logistics 902,354 (522,882) 379,472 901,447 (515,251) 386,196
Construction in progress 73,430 - 73,430 50,799 - 50,799
----------- ----------- ----------- ----------- ----------- -----------
975,784 (522,882) 452,902 952,246 (515,251) 436,995
----------- ----------- ----------- ----------- ----------- -----------
- - - - 0 -
Corporate 89,712 (43,642) 46,070 87,505 (40,778) 46,727
Construction in progress 12,569 - 12,569 12,978 - 12,978
----------- ----------- ----------- ----------- ----------- -----------
102,281 (43,642) 58,639 100,483 (40,778) 59,705
----------- ----------- ----------- ----------- ----------- -----------
Total 15,064,216 (7,299,330) 7,764,886 14,754,572 (7,173,695) 7,580,877
=========== =========== =========== =========== =========== ===========
(b) By classification of asset:
03/31/02 12/31/01
--------------------------------------------- ---------------------------------------------
Accumulated Accumulated
Cost depreciation Net Cost depreciation Net
----------- ----------- ----------- ----------- ----------- -----------
Land and buildings 1,490,747 (642,999) 847,748 1,483,833 (625,926) 857,907
Installations 4,150,147 (2,619,567) 1,530,580 4,165,371 (2,596,482) 1,568,889
Equipment 910,348 (550,620) 359,728 892,912 (533,765) 359,147
Railroads 5,158,847 (2,731,840) 2,427,007 5,137,431 (2,692,599) 2,444,832
Mineral rights 433,826 (165,444) 268,382 428,805 (161,372) 267,433
Others 1,333,747 (588,860) 744,887 1,216,042 (563,551) 652,491
----------- ----------- ----------- ----------- ----------- -----------
13,477,662 (7,299,330) 6,178,332 13,324,394 (7,173,695) 6,150,699
Construction in progress 1,586,554 - 1,586,554 1,430,178 - 1,430,178
----------- ----------- ----------- ----------- ----------- -----------
Total 15,064,216 (7,299,330) 7,764,886 14,754,572 (7,173,695) 7,580,877
=========== =========== =========== =========== =========== ===========
The average annual depreciation rates are 3% for buildings, from 2% to 10% for
installations, from 10% to 20% for equipment, and from 1% to 4% for railroads.
Mineral reserve depletion is calculated annually as a function of the volume of
ore extracted in relation to the proven and probable reserves.
20 CVRD
Depreciation, amortization and depletion of property, plant and equipment have
been allocated to cost of production and services and to administrative
expenses as follows:
03/31/02 03/31/01
------------ ------------
Cost of production and services 139,456 115,359
Administrative expenses 5,277 4,238
------------ ------------
144,733 119,597
============ ============
6.11- Loans and Financing
Short-term
03/31/02 03/31/01
------------ ------------
Trade finance 1,774,835 927,409
============ ============
The average annual interest rates on short-term loans and financing on 03/31/02
and 2000 were, respectively, 2.43% and 5.51%.
Long-term
Current liabilities Long-term liabilities
----------------------- ---------------------
03/31/02 12/31/01 03/31/02 12/31/01
---------- ---------- --------- ---------
Foreign operations Loans and financing in:
U.S. dollars 265,303 281,641 1,801,544 1,773,680
Yen 18,964 19,166 61,833 63,058
Other currencies 535 545 1,070 1,212
Notes in U.S. dollars - - 1,161,800 1,160,200
Accrued charges 28,807 46,222 - -
---------- ---------- --------- ---------
313,609 347,574 3,026,247 2,998,150
---------- ---------- --------- ---------
Local operations
Indexed by TJLP, TR(*) and IGP-M 9,707 8,928 61,514 47,333
Basket of currencies 26,716 26,765 55,658 62,452
Loans in U.S. dollars 1,770 1,768 210,156 210,308
Non-convertible debentures - - 6,009 7,371
Accrued charges 4,870 1,831 - -
---------- ---------- --------- ---------
43,063 39,292 333,337 327,464
---------- ---------- --------- ---------
356,672 386,866 3,359,584 3,325,614
========== ========== ========= =========
(*) TR - Reference Rate
(a) Foreign currency loans and financing were converted into reais at exchange
rates effective on the quarterly information date, with US$ 1.00 equal to
R$ 2.3236 on 03/31/02 (R$ 2.3204 on 12/31/01) and (Y) 1.00 equal to R$
0.017520 on 03/31/02 (R$ 0.017707 on 12/31/01);
(b) Of the total loans and financing, R$ 654,511 are guaranteed by the federal
government (with full counter-guarantees) and R$ 90,888 have third-party
guarantees.
(c) Amortization of principal and finance charges incurred on long-term loans
and financing obtained abroad and domestically mature as follows as of
03/31/02:
2003 1,047,531
2004 1,455,598
2005 333,833
2006 174,684
2007 onward 347,938
------------
3,359,584
============
CVRD 21
(d) Long-term external and domestic loans and financing were subject to annual
interest rates on 03/31/02 as follows:
Up to 3% 838,941
3.1 to 5% 1,254,152
5.1 to 7% 235,540
7.1 to 9% 98,677
9.1 to 11% 1,175,011
Over 11% 113,935
------------
3,716,256
============
(e) The estimated market values of long-term loans and financing calculated to
present value based on available interest rates as of 03/31/02 are close
to their market values;
(f) The loans and financing, by currencies/index in:
[THE FOLLOWING TABLE WAS REPRESENTED BY A PIE CHART IN THE PRINTED MATERIALS.]
Basket of currencies 2%
Yen 1%
Others 2%
Dollar 95%
R$ 5,491,091
6.12 - Securitization Program
On September 29, 2000, CVRD finalized the financial conditions for a US$ 300
securitization program based on existing and future receivables generated by
its subsidiary CVRD Overseas Ltd.. This transaction, relating to exports of
iron ore and pellets to six of CVRD's major customers in Europe, the United
States and Asia, was structured by Bank of America Securities LLC, and is
divided into three tranches as follows:
Amount Grace Period Yield to Investor
Tranches (US$ million) Maturity (years) (p.y.)
-------- ------------- ------------- ------------- -----------------
1 25 10/15/2007 2 8.682%
2 (insured) 125 10/15/2007 2 Libor+0.65%
3 150 10/15/2010 3 8.926%
The balance of this operation on 03/31/02 totals R$ 706,111 (R$ 9,031 in
current liabilities and R$ 697,080 in long-term liabilities) and is included in
related party liabilities to the subsidiary CVRD Overseas Ltd. (Note 6.6).
22 CVRD
6.13 - Contingent Liabilities
At the quaterly information and financial statement dates the contingent
liabilities of the Company were:
(a) Provisions for contingencies and respective judicial deposits, considered
by management and its legal counsel as sufficient to cover possible losses
from any type of lawsuit, were as follows:
Judicial deposits Provisions for contingencies
------------------------------- ---------------------------------
03/31/02 12/31/01 03/31/02 12/31/01
-------------- --------------- --------------- ----------------
Tax contingencies 303,138 284,396 323,978 307,509
Labor claims 110,170 109,065 310,216 300,303
Civil claims 3,820 3,587 249,750 273,361
Marketable securities 117,980 113,838 - -
Others 4,118 5,382 19,872 12,553
-------------- --------------- --------------- ----------------
Total 539,226 516,268 903,816 893,726
============== =============== =============== ================
The Company and its subsidiaries are parties to labor, civil, tax and
other suits have been contesting these matters both administratively and
in the courts. When necessary, these are backed by judicial deposits.
Provisions for eventual losses are estimated and restated monetarily by
management upon the advice of the legal department and outside counsel.
Tax contingencies relate principally to a legal process claiming
unconstitutionality of the change in the calculation basis of PIS and
COFINS social contribution introduced by Law 9,718/98.
Labor-related actions principally comprise employee claims in connection
with disputes about the amount of indemnities paid upon dismissal.
Civil actions principally relate to claims made against the Company by
contractors in connection with losses alleged to have been incurred as a
result of various past government economic plans during which full
indexation of contracts for inflation was not permitted.
Marketable securities are related to guarantees of civil claims.
(b) Guarantees given to jointly controlled companies (normally in proportion
to the Company's percentage of participation) are as follows:
03/31/02 12/31/01
-------------- --------------
ALBRAS - Aluminio Brasileiro S.A. 828,431 839,667
ALUNORTE - Alumina do Norte do Brasil S.A. 167,690 170,206
Companhia Coreano-Brasileira de Pelotizacao - KOBRASCO 92,981 92,852
Ferrovia Centro-Atlantica S.A. 287,114 270,991
Salobo Metais S.A. 167,069 165,504
Sepetiba Tecon S.A. 58,864 58,837
Others 2,647 5,383
-------------- --------------
1,604,796 1,603,440
============== ==============
The breakdown of guarantees by currency is:
03/31/02 12/31/01
-------------- --------------
U.S. Dollar 1,103,070 1,118,198
Real 501,726 485,242
-------------- --------------
1,604,796 1,603,440
============== ==============
(c) Upon privatization of the Company in 1997, debentures were issued to the
then stockholders, including the federal government. The maturity dates of
these debentures were established to guarantee that pre-privatization
stockholders, including the federal government, would share any future
benefits from subsequent mineral discoveries.
At present, the debentures cannot be traded. They may only be traded three
months after March 2002 when the Company will be obliged to register the
debentures with the CVM to allow their negotiation.
CVRD 23
According to the regulations of the Brazilian Central Bank, the
pre-privatization stockholders who held their shares through American
Depositary Receipts (ADRs) were not authorized to receive debentures
or any other financial benefits related to same. The Company will
present a new request to the Central Bank, but there is no guarantee
that it will be granted.
The debenture holders are entitled to receive semi-annual payments
equivalent to a percentage of the net revenues from determined mineral
resources held by the Company in May 1997, as per the table below:
Area Mineral Required payments by CVRD
------------------------------------------- ---------------------------- -------------------------------------------
Southern System Iron ore 1.8% of net revenue, after total production
from May 1997 exceeds 1.7 billion tons.
Northern System Iron ore 1.8% of net revenue, after total production
from May 1997 exceeds 1.2 billion tons.
Pojuca, Andorinhas, Liberdade and Sossego Gold and copper 2.5% of net revenue from the beginning of
commercial production.
Igarape Bahia and Alemao Gold and copper 2.5% of net revenue, after total production
from the beginning of commercial
production exceeds 70 tons of gold.
Fazenda Brasileiro Gold 2.5% of net revenue after total production
from the beginning of commercial
production exceeds 26 tons.
Other areas, excluding Carajas/ Serra Leste Gold
2.5% of net revenue.
Other areas owned as of May 1997 Other minerals 1% of net revenue, four years after the
beginning of commercial production.
All areas Sale of mineral rights owned 1% of the sales price.
as of May 1997
Based on current production levels and estimates for new projects, the
forecast is to start payments referring to copper resources in 2004, iron
ore in approximately 2012, and other types of minerals in later years. The
obligation to make payment to the debenture holders will expire when the
pertinent mineral resources are depleted.
(d) The Company has commitments under a take-or-pay contract to acquire
approximately 207,000 tons of aluminum per year from ALBRAS at market
prices. This estimate is based on 51% of the estimated output of ALBRAS at
a market price of US$ 1,421.00 per ton on March 31, 2002, representing an
annual commitment of R$ 683,480 based on the final exchange rate of
03/31/02. The same applies to 537,272 tons of alumina per year produced by
ALUNORTE, which at a market price of US$ 172.21 per ton on March 31, 2002
represents a yearly commitment of R$ 214,990 on the same exchange rate
mentioned. The effective take of ALBRAS was R$ 139,493 and R$ 149,970 in
03/31/02 and 03/31/01, respectively, and directly from ALUNORTE (net of
the take assigned to ALBRAS), was R$ 12,771 and R$ 16,476 in 03/31/02 and
03/31/01, respectively.
6.14 - Environmental and Site Reclamation and Restoration Costs
Expenditures relating to ongoing compliance with environmental regulations are
charged to production costs or capitalized as incurred. The Company manages its
environmental policies according to the specifications of ISO 14,001 and
maintains ongoing programs to minimize the environmental impact of its mining
operations as well as to reduce the costs that will be incurred upon
termination of activities at each mine. On March 31, 2002, the provision for
environmental liabilities amounted to R$ 62,899 (R$ 65,675 on 03/31/01), which
was accounted in "Others" in long-term liabilities.
6.15 - Pension Plan - VALIA
The Fundacao Vale do Rio Doce de Seguridade Social - VALIA is a non-profit
entity, legally separate from the CVRD, founded in 1973 to provide
supplementary social security benefits to the employees of the Company, its
subsidiaries, affiliated companies and others that participate or may in the
future participate in plans administered by the Foundation.
24 CVRD
The Company and various of its subsidiaries and affiliated companies are
sponsors of VALIA, in the following benefit plans:
(a) Benefit Plan
Defined Benefit Plan - " BD"
A pure defined benefit plan, now being phased out, instituted in 1973 upon
establishment of VALIA. This plan has been closed to new members and is
maintained only for existing retired participants and their beneficiaries
and a few residual active participants.
Mixed-Benefit Plan - " Vale Mais"
A mixed plan which offers programmable retirement income benefits of the
defined contribution type, independent of government Social Security. It
also includes a deferred severance benefit (vesting), as well as risk
benefits: retirement for disability, death benefits and sick-leave
assistance. This new plan has more modern, transparent and flexible rules
that make it more attractive for employees and more economical for the
sponsors.
" Vale Mais" was established in May 2000 and nearly 98.7% of the active
participants migrated to this new plan.
The contributions of the sponsors are as follows:
. Ordinary contribution - Destined to accrue the resources necessary to
grant income benefits, sponsor contributions are matched equally by
participants, up to 9% of their participation salaries, which may not
exceed ten "plan reference units" (this limit was R$1,383.86 in
December 2001).
. Extraordinary contribution - This can be made at any time, at the
discretion of the sponsors.
. Normal contribution - To fund the risk plan and administrative
expenses, fixed by the actuary based on actuarial appraisals.
. Special contribution - Destined to cover any special commitment that
may arise.
During 2001, the Company made contributions to VALIA in the amount of R$
6,947 (R$ 4,881 on 03/31/01) to fund the benefit plans it sponsors.
(b) Actuarial liability
This provision is the result of the Company's responsibility to provide
supplementary pensions relating to the early retirement programs of 1987
and 1989, in the amount of R$ 456,401 and an additional amount of R$
33,075 as required by CVM Deliberation 371. These liabilities were
calculated by an independent actuary for the year 2001 and represent the
current value of the benefits and pensions. Part is recorded in "Pension
Plan" account in current liabilities - R$ 63,896 (R$ 64,506 on 12/31/01)
and part in long-term liabilities - R$ 425,580 (R$ 429,325 on 12/31/01).
The actuarial assumptions and economics' hypothesis adopted in the
actuarial calculations for the year 2001, were disclosed in the Financial
Statements ended December 31, 2001.
(c) Subsidiaries and affiliated companies
Some subsidiary and affiliated companies that do not participate in the
social security plan through VALIA also record their actuarial liabilities
referring to the plans they sponsor as set forth in CVM Deliberation 371
of December 13, 2000.
6.16 - Capital
The Company's capital is R$ 4 billion, corresponding to 388,559,056 book
shares, of which 249,983,143 are common shares, 138,575,913 are preferred class
"A" shares, the latter including one special preferred share ("Golden Share"),
all with no par value. On April 29, 2002, the Extraordinary Stockholders'
General Meeting approved a capital increase from R$ 4 billion to R$ 5 billion,
without new shares issues, but through capitalization of reserves in the amount
of R$ 1 billion.
Preferred shares have the same rights as common shares, except for the right to
elect the members of the Board of Directors. They have priority to a minimum
annual dividend of 6% on the portion of capital represented by this class of
share.
The special "Golden Share" created during the privatization in 1997 belongs to
the Brazilian Government. This share gives it the right to a permanent veto of
changes in the Company's name, headquarters location, nature as a mining
enterprise, continuous operation of the integrated mining, transportation and
loading systems and other matters determined in the Bylaws.
CVRD 25
On 03/31/02 the Company's capital is comprised as follows:
Number of shares
-------------------------------------------------------------------------
Stockholders Commom % Preferred % Total %
------------------------------------------------- --------------- ------ --------------- ------ --------------- ------
Valepar S.A. 105,443,070 42 - - 105,443,070 27
Brasilian Government (National Treasury / BNDES/
INSS / FPS) (b) - - 5,075,341 4 5,075,341 1
American Depositary Receipts - ADRs 44,795,640 18 59,089,911 42 103,885,551 27
Litel Participacoes S.A. (a) 25,272,641 10 - - 25,272,641 7
BNDESPar 11,672,271 5 1,251,980 1 12,924,251 3
Clube de Investimentos dos Empregados da
Vale - INVESTVALE 10,735,369 4 - - 10,735,369 3
Foreign - institutional investors 6,258,258 3 42,840,671 31 49,098,929 13
Brazil - institutional investors 33,335,998 13 15,092,702 11 48,428,700 12
Brazil - retail investors 7,754,726 3 15,220,557 11 22,975,283 6
Treasury stock 4,715,170 2 4,751 - 4,719,921 1
--------------- ------ --------------- ------ --------------- ------
Total 249,983,143 100 138,575,913 100 388,559,056 100
=============== ====== =============== ====== =============== ======
(a) Litel is the corporate vehicle pursuant to which Previ, Petros, Funcef and
Fundacao CESP, each of which is a Brazilian pension fund, hold common
shares in CVRD and Valepar.
(b) The National Bank for Economic and Social Development (BNDES), in its own
name and on behalf of the Brazilian Government, continued the
privatization process started in 1997, as per the terms of the
Privatization Rules, sold on 03/21/02 78,787,838 common shares of CVRD.
As of 03/31/02, the number of holders of record who are residents of Brazil was
32,770. These stockholders owned 235,624,631 shares, representing 66.6% of the
capital stock.
Members of the Board of Directors and Executive Board, as a group, hold 17
common shares and 209 preferred shares.
6.17- American Depositary Receipts (ADR) Program
On 06/20/00, the Company obtained ADR registration (Level 2) from the United
States Securities and Exchange Commission (SEC), beginning a process for its
preferred shares to be traded on the New York Stock Exchange (NYSE). On
03/21/02, in connection with the sale of shares of BNDES and Government's
shares, the common shares began to be traded on NYSE. Each ADR represents 1
(one) preferred Class "A" or common share, traded under the code "RIOPR" and
"Rio", respectively.
6.18- Treasury Stock
The Board of Directors, under the terms of subparagraph XV from Article 13 of
the Bylaws and based on Article 30 of Law 6,404/76 and CVM Instructions 10 of
02/14/80 and 268 of 11/13/97, approved the acquisition by the Company of its
own shares to be held in treasury for later sale or cancellation.
On October 24, 2001, an Extraordinary General Meeting authorized the
acquisition of up to 19 million nominative book shares, with no par value, with
14 million being common shares and 5 million preferred shares, in order to hold
in treasury for later sale or cancellation, without decreasing in capital
stock. Up to 03/31/02, 4,715,170 common and 4,751 preferred shares had been
acquired at a cost of R$ 131,347, and had been held in treasury.
26 CVRD
Shares
------------------------------------------------
Average
Class Quantity Unit acquisition cost quoted market price
-------------- ------------------------------- ---------------------------------------------- --------------------------
03/31/02 12/31/01 Average Low High 03/31/02 12/31/01
-------------- -------------- ------------- ------------ ------------- ----------- -----------
Preferred 4,751 91 51.45 14.02 52.40 61.51 52.44
Common 4,715,170 4,715,170 27.80 20.07 52.09 63.05 50.21
-------------- --------------
4,719,921 4,715,261
============== ==============
6.19- Financial Result
The amounts included in the income statement are as follows:
03/31/02 03/31/01
----------- -----------
Financial expenses
Foreign debt (52,465) (61,387)
Local debt (18,179) (14,635)
Related parties, net (14,485) (7,090)
Others (*) (20,715) (13,220)
----------- -----------
(105,844) (96,332)
----------- -----------
Monetary and exchange rate variation on liabilities 11,520 (372,947)
----------- -----------
Financial income
Marketable securities 23,266 32,393
Others 8,779 6,673
----------- -----------
32,045 39,066
----------- -----------
Monetary and exchange rate variation on assets 11,949 41,856
----------- -----------
Financial income (expenses), net (50,330) (388,357)
=========== ===========
(*) Includes net losses on derivative financial instruments (Note 6.20).
6.20 - Financial Instruments - Derivatives
The main market risks the Company faces are related to interest rates, exchange
rates and commodities prices. CVRD has a policy of managing risks through the
use of derivatives instruments.
The Company's risk management follows policies and guidelines reviewed and
approved by the Board of Directors and Executive Board. These policies and
guidelines generally prohibit speculative trading and short selling and require
diversification of transactions and counterparties. The policy of the Company
is to settle all contracts financially without physical delivery of the
products. The overall position of the portfolio is assessed and monitored daily
to measure the financial results and the impact on cash flow. The credit limits
and creditworthiness of counterparties are also reviewed periodically. The
results of hedging are reported monthly to the Executive Board.
Interest Rate Risk
Interest rate risk derives from floating-rate debt, mainly from trade finance
operations. The portion of floating-rate debt denominated in foreign currency
is mainly subject to fluctuations in the LIBOR (London Interbank Offered Rate).
The portion of floating-rate debt expressed in reais refers basically to the
Brazilian long-term interest rate (TJLP), established by the Brazilian Central
Bank. Since May 1998, CVRD has been using derivatives to limit its exposure to
fluctuations in the LIBOR, through LIBOR's swap instruments based on fixed
rates.
The interest rate derivatives portfolio consists mainly of options trades
aiming to cap exposure to interest rate fluctuations, establishing upper and
lower limits. Some operations are subject to knock-out provisions which, if
triggered, eliminate the protection provided by the cap.
CVRD 27
The table below provides information regarding the interest rate derivatives
portfolio for 03/31/02 and 03/31/01.
03/31/02 03/31/01
------------------------------------------------------- ----------------------------------------------
Notional value Unrealize gain Notional value Unrealize gain
(in US$ (loss) Final (in US$ (loss)
Type thousand) Rate range (in R$ thousand) maturity thousand) Rate range (in R$ thousand)
--------- -------------- ---------- ---------------- -------- -------------- ---------- ----------------
Cap 1,350 5.0 - 8.0% 6,866 Aug/05 1,325 5.0 - 8.0% 5,235
Floor 1,000 5.0 - 6.5% (46,242) Aug/05 975 5.0 - 6.5% (34,428)
Swap 125 5.5 - 7.5% (19,171) Oct/07 125 5.5 - 7.5% (15,475)
------------ ------------
Total (58,547) (44,668)
============ ============
Exchange Rate Risk
Exchange rate risk comes from foreign currency debts. On the other hand, a
substantial part of the Company's revenues are denominated or indexed in U.S.
dollars, while the majority of costs are in reais. This provides a natural
hedge against possible devaluations of Brazilian currency against the dollar.
Events of this nature have an immediate negative impact on foreign currency
debt, offset by the positive effect on future cash flows.
The Company adopts a strategy of monitoring market fluctuations and, if
necessary, carrying out derivatives operations to cover risks related to these
variations.
The portion of debt denominated in euros and Japanese yen is protected by
derivatives to cover risks of exchange rate movements of these currencies.
The table below shows the exchange rate derivatives portfolio for 03/31/02 and
03/31/01. These operations are range forwards which were structured to ensure
the purchase price of the following currencies:
03/31/02 03/31/01
------------------------------------------------------------------- --------------------------------------------------
Notional Unrealize Notional Unrealize
value gain value gain
(in US$ (loss) in R$ Final (in US$ (loss) (in R$
Type million) Rate range thousand) maturity thousand) Rate range thousand)
--------- -------------- -------------------- ------------- -------- ----------- -------------------- -------------
Yen purchased 5 Yen 70 - 110 per US$ (9,278) Apr/05 44 Yen 70 - 110 per US$ (9,042)
Euros purchased 8 E 1.10 - 1.30 per US$ (5,384) Apr/05 12 E 1.10 - 1.30 per US$ (5,739)
Euros sold 9 E 0.90 - 1.20 per US$ 2 May/02 4 E 0.90 - 1.20 per US$ 333
----------- ------------
Total (14,660) (14,448)
============ ============
Commodities Price Risk
The prices of iron ore, the Company's main product, are set in annual
negotiations between producers and consumers and are notably stable over time.
The Company does not enter into derivatives operations to hedge iron ore
exposure.
The Company uses hedge instruments to manage its exposure to changes in the
price of gold. These derivatives operations allow establishment of a minimum
profit level for future gold output. The Company actively manages its open
positions, with the results reported monthly to senior management to allow
adjustment of targets and strategies in response to market conditions.
The following table shows the gold derivatives portfolio of the Company on
03/31/02 and 03/31/01.
03/31/02 03/31/01
------------------------------------------------------- ----------------------------------------------
Price Unrealize gain Price Unrealize gain
Quantity range (loss) Final Quantity range (loss)
Type (oz) US$/oz (in R$ thousand) maturity (oz) US$/oz (in R$ thousand)
-------------- -------------- ---------- ---------------- -------- -------------- ---------- ----------------
Puts purchased 509,000 270 - 350 18,577 Dec/06 292,000 300 - 355 35,610
Calls sold 658,500 300 - 390 (23,131) Dec/06 769,800 300 - 380 (3,227)
Puts hybrid 10,000 337 Nov-05 175,000 2,529
Calls hybrid 10,000 (420) Nov-05 135,000 (525)
---------- ---------
Total (4,637) 34,387
========== =========
28 CVRD
6.21 - Exchange Rate Exposure
The exchange rate exposure is predominantly in U.S. dollars.
In millions of reais
------------------------------------------------------------------
Subsidiaries and
Parent Company Affiliated Companies (*)
------------------------------ ------------------------------
Assets 03/31/02 12/31/01 03/31/02 12/31/01
------------ ------------ ------------ ------------
Current
Cash and banks and marketable securities 196 508 126 86
Others 2,062 1,709 600 821
------------ ------------ ------------ ------------
2,258 2,217 726 907
Long-term receivables 922 1,238 32 71
Investments 2,593 2,524 37 72
------------ ------------ ------------ ------------
Total 5,773 5,979 795 1,050
============ ============ ============ ============
Liabilities
Current
Short-term loans and financing 2,120 1,304 1,012 1,191
Others 233 398 205 203
------------ ------------ ------------ ------------
2,353 1,702 1,217 1,394
Long-term liabilities
Loans and financing 3,292 3,271 1,382 1,961
Others 1,791 1,760 454 178
------------ ------------ ------------ ------------
5,083 5,031 1,836 2,139
------------ ------------ ------------ ------------
Total 7,436 6,733 3,053 3,533
============ ============ ============ ============
Liabilities - R$ (1,663) (754) (2,258) (2,483)
============ ============ ============ ============
Liabilities - US$ (716) (325) (972) (1,070)
============ ============ ============ ============
(*) Proportional to the percentage of participation
6.22- Subsequent Events
On May 8, 2002, the Company through its subsdiaries Itabira Rio Doce Company
Limited and Caulim do Brasil Investimentos S.A., and Anglo American plc (Anglo)
concluded the terms of an acquisition and sale of shares' contract in order to
transfer the total interest held by Anglo on Salobo Metais S.A.'s (Salobo)
capital which corresponds to 44,172,369 shares, representing 50% of Salobo's
capital stock, in the amount of US$ 50,9 millions. The enforcement of the
negotiation is subjected to certain conditions usually taken in this kind of
transaction. With this acquisition, the Company will hold, directly or
indirectly through its subsidiries, 100% of Salobo's capital stock.
CVRD 29
PART III
7- OTHER INFORMATION THE COMPANY DEEMS RELEVANT
7.1 Net Accumulated Income (in R$ Million)
[THE FOLLOWING TABLE WAS REPRESENTED BY A BAR CHART IN THE PRINTED MATERIALS.]
2000
----
1st Quarter 639
2nd Quarter 1,101
3rd Quarter 1,600
4th Quarter 2,133
2001
----
1st Quarter 660
2nd Quarter 1,206
3rd Quarter 2,412
4th Quarter 3,051
2002
----
1st Quarter 633
2nd Quarter
3rd Quarter
4th Quarter
7.2- Factors Affecting Net Income in the Last 12 Months (in R$ Million)
[THE FOLLOWING TABLE WAS REPRESENTED BY A BAR CHART IN THE PRINTED MATERIALS.]
Result of
Net income at Net operating Cost of products investment Financial Operating Discontinued Income tax Net income at
03/31/01 revenue and services participations result expenses net operations 03/31/02
------------------------------------------------------------------------------------------------------------------------------------
660 223 (147) (156) 338 (7) (242) (36) 633
30 CVRD
7.3 - Business Perfomance Ratios
03/31/02 12/31/01
------------- -------------
Capital Ratios
1 - Capital assets to stockholders' equity (Permanent assets/Equity * 100) - (%) 134.76 135.37
2 - Capital assets to total liabilities (Permanent assets/Total liabilities * 100) - (%) 138.60 149.44
3 - Total liabilities to stockholders' equity (Total liabilities/Equity * 100) - (%) 97.23 90.58
4 - Short to total liabilities (Short-term liabilities/Total liabilities * 100) - (%) 39.57 34.44
5 - Stockholders' equity to total liabilities (Equity/Total liabilities *100) - (%) 102.85 110.39
6 - Capital assets to non-current funds (Permanent assets/(Equity + Long-term liabilities)) *100) - (%) 84.89 84.93
7 - Net Debt / Stockholders' equity (Net debt (a) / Equity) 0.35 0.37
8 - Net Debt (a) / Total Assets 0.18 0.19
9 - Leverage (Total Assets / Equity) 1.97 1.91
03/31/02 03/31/01
------------- -------------
Profitability and Other Ratios
1 - Gross Margin (Gross profit / Net operating revenues * 100) - (%) 44.82 46.60
2 - Operating Margin (Operating income / Net operating revenues * 100) - (%) 38.59 26.44
3 - Net Margin (Net income / Net operating revenues * 100) - (%) 41.00 49.97
4 - Return on Assets (Net income (annualized) / Total assets *100) - ROA (%) 10.63 13.34
5 - Return on Equity (Net income (annualized) / Equity *100) - ROE (%) 20.96 24.22
6 - Total asset turnover (Net operating revenues (annualized) / Total assets) 0.26 0.27
7 - P/E (Price of preferred class A share / Earnings per share (annualized)) 9.32 7.62
8 - Price /Book Value (Price of preferred class A share / Book value per share) 1.95 1.85
9 - Net income per outstanding share (Net income (annualized) / Number of shares outstanding) 6.60 6.86
10 - NOPLAT / Operating Income (%) 37.34 41.70
11 - EBITDA + Dividends received / Financial expenses on financing 13.96 9.08
12- EBITDA + Dividends Received / Operating Income (%) 47.13 52.24
13- Net Debt (a) / EBITDA + Dividends Received(annualized) 1.45 1.20
14- FCOL / Financial expenses on financing 9.78 14.70
Note:
The income statement data has been annualized.
a) Net Debt = short and long-term debt, net of related party loans, less cash
and cash equivalents; annualized with the income then ended.
7.4- Segment and Geographic Information
The Company's business areas are as follows:
Ferrous - mining of iron ore and manganese and production of pellets, as well
as their commercialization and respective rail transport and port handling
(both for the Northern and Southern Systems).
Non-ferrous - includes gold production, potash, geological prospecting and
other non-ferrous minerals.
Logistics - activities related to railroads and ports together with investments
in the area of maritime and rail transport and port services.
Investments - includes commercialization of aluminum products and investments
in joint ventures and affiliates involved in the production of bauxite, alumina
refining and aluminum smelting, as well as holdings in companies in the pulp
and paper sector and in steel making.
CVRD 31
Corporate center - comprises the functional areas of control, finance, legal
affairs, human resources, administration, information technology and investor
relations.
Information presented to top management with respect to the performance of each
segment is generally derived directly from the accounting records maintained in
accordance with Brazilian corporate law together with certain minor
inter-segment allocations, and is focused primarily on return on capital
employed (ROCE), net operating profit less taxes (NOPLAT) as well as net
income.
Information related to period ended 03/31/01 is as follows:
03/31/01
----------------------------------------------------------------------
Ferrous Non-ferrous Logistics Corporate Center TOTAL
------------ ----------- --------- ---------------- ----------
EBITDA 622,611 31,475 70,949 (35,060) 689,975
EBITDA % of total 90.2% 4.6% 10.3% (5.1%) 100.0%
EBITDA margin % 56.2% 34.0% 59.1% - 52.2%
32 CVRD
7.5- Share Performance on Stock Exchanges (Unaudited)
The following table shows the high and low closing sale prices for the
Preferred Class A Shares and Common Shares on the Sao Paulo Stock Exchange, and
for the ADRs in the New York Stock Exchange (NYSE) (each ADR represents 1
preferred share class A).
[GRAPHIC OMITTED]
In reais In US$
----------------------------------------- ----------------------------------------
Preferred ADRs - ADRs -
Class A Shares Common Shares Preferred Shares Common Shares
-------------------- ------------------- ------------------- -------------------
High Low High Low High Low High Low
--------- ---------- --------- --------- --------- --------- --------- --------
2001
First Quarter 53.60 44.00 51.00 42.70 26.98 23.05 - -
Second Quarter 58.60 49.05 54.00 46.50 25.70 22.05 - -
Third Quarter 55.00 45.50 55.00 46.40 23.15 18.65 - -
Fourth Quarter 54.00 53.52 53.40 52.60 23.61 21.35 - -
2002
First Quarter 62.00 61.00 63.69 62.00 27.49 21.52 27.39 26.15
CVRD 33
7. 6- Capital Expenditures (Unaudited)
In thousands of reais
-----------------------------------
ACTUAL APPROVED
UP TO 03/02 FOR 2002 % ACTUAL
---------------- ---------------- --------------
Ongoing Capital Expenditures
Replacement/Refurbishment/Improvement 174,158 515,916 33.8
Geological Research 16,628 102,536 16.2
Technological Research/Development 4,366 37,750 11.6
Environment 541 1,293 41.8
lnformatics / Telecommunications 10,884 109,644 9.9
---------------- ---------------- --------------
206,577 767,139 26.9
---------------- ---------------- --------------
Equity Investments 340,317 649,755 52.4
Direct Investments 253,040 1,021,106 24.8
---------------- ---------------- --------------
Total Capital Expenditures 799,934 2,438,000 32.8
================ ================ ==============
7.7- Operations for the period ended March (Unaudited)
(Million metric tons)
-------------------------------------------
2002 2001 VAR %
------------- -------------- --------------
PRODUCTION/PURCHASE
IRON ORE 28.4 27.9 1.8
PELLETS 3.4 3.6 (5.6)
POTASH 0.1 0.1 -
GOLD (thousand Kg) 3.6 3.3 9.1
RAILROAD OPERATIONS - GENERAL CARGO
EFVM 6.4 6.0 6.7
FCA 5.0 5.2 (3.8)
EFC 1.0 0.9 11.1
EFVM - TKU 2.7 2.6 3.8
FCA - TKU 1.8 2.0 (10.0)
EFC - TKU 0.7 0.3 133.3
PORT OPERATIONS
TUBARAO 4.0 4.0 -
SAO LUIZ 0.4 0.8 (50.0)
DOCENAVE OPERATIONS
BULK CARGO 1,702 9,217 (81.5)
GENERAL CARGO (TEUS) 16,182 13,189 22.7
MANOEVERS 1,596 1,400 14.0
34 CVRD
7.8- Changes in Prices (Unaudited)
The following table sets forth the prices for the products of the Company and
its subsidiary and jointly controlled companies for the periods indicated:
Asia Europe
Iron Ore Iron Ore
(SSF) (SFCJ) Gold Aluminum
(US$/ton) (US$/ton) (US$/ounce) (US$/ton)
----------- ----------- ------------ -----------
2001
March 15.35 18.68 257.70 1,569.59
June 16.32 18.68 269.50 1,536.30
September 16.32 18.68 293.10 1,405.96
December 16.32 18.68 277.70 1,362.36
2002
March 16.32 18.68 299.00 1,405.40
CVRD 35
7.9- Iron Ore and Pellet Sales (Main Markets) (Unaudited)
(Millons of tons)
---------------------------------------------------------------------------------------------
JAN to MAR JAN to MAR
------------- -------------
1998 % 1999 % 2000 % 2001 % 2001 % 2002 %
----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----
FOREIGN MARKET
ASIA
CHINA 5.7 6 7.3 8 9.2 8 14.9 12 3.1 10 4.4 13
KOREA 7.1 7 7.9 8 7.0 6 6.0 5 1.5 5 2.1 6
PHILIPPINES 0.9 1 1.6 2 1.4 1 1.2 1 0.4 1 0.6 2
JAPAN 17.3 17 16.9 17 17.5 15 17.1 13 4.3 14 3.7 11
TAIWAN 1.6 2 1.8 2 1.6 2 2.2 2 0.8 3 0.4 1
OTHERS 1.1 1 0.6 - 0.4 - 1.1 1 0.1 - - -
----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----
33.7 34 36.1 37 37.1 32 42.5 34 10.2 33 11.2 33
----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----
EUROPE
GERMANY 9.4 9 8.0 8 8.2 7 10.1 8 2.2 7 3.4 10
SPAIN 3.6 4 3.6 4 2.9 2 2.9 2 0.6 2 0.8 2
FRANCE 3.0 3 2.1 2 2.9 2 3.9 3 0.6 2 1.3 4
ITALY 6.1 6 5.0 5 4.8 4 5.1 4 1.2 4 1.0 3
UNITED KINGDOM 2.4 2 1.6 2 1.5 2 1.6 1 0.4 1 0.7 2
OTHERS 5.7 6 4.7 5 8.2 7 10.8 8 2.0 7 2.9 9
----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----
30.2 30 25.0 26 28.5 24 34.4 26 7.0 23 10.1 30
----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----
AMERICAS
ARGENTINA 2.3 2 1.6 2 1.4 1 1.9 1 0.5 2 0.4 1
UNITED STATES 3.1 3 3.0 3 3.5 3 2.9 2 0.9 3 0.9 2
OTHERS 2.2 2 1.8 2 2.0 2 1.5 1 0.3 1 0.3 1
----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----
7.6 7 6.4 7 6.9 6 6.3 4 1.7 6 1.6 4
----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----
AFRICA/MID.EAST/OCEANIA
BAHREIN 1.2 1 1.5 2 2.0 2 1.7 1 0.3 1 0.8 3
OTHERS 3.2 3 3.6 4 5.2 4 5.1 4 1.2 4 0.8 3
----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----
4.4 4 5.1 6 7.2 6 6.8 5 1.5 5 1.6 6
----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----
75.9 75 72.6 76 79.7 68 90.0 69 20.4 67 24.5 73
===== ===== ===== ===== ===== ===== ===== ===== ===== ===== ===== =====
DOMESTIC MARKET
STEEL MILLS 15.0 15 13.6 14 15.5 13 20.2 16 4.8 16 5.1 15
PELLETING AFFILIATES 8.6 10 10.1 10 21.6 19 19.7 15 5.0 17 4.0 12
----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----
23.6 25 23.7 24 37.1 32 39.9 31 9.8 33 9.1 27
----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----
TOTAL 99.5 100 96.3 100 116.8 100 129.9 100 30.2 100 33.6 100
===== ===== ===== ===== ===== ===== ===== ===== ===== ===== ===== =====
Exports by System
(Millons of tons)
---------------------------------------------------------------------------------------------
JAN to MAR JAN to MAR
------------- -------------
1998 % 1999 % 2000 % 2001 % 2001 % 2002 %
----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----
NORTHERN SYSTEM 41.8 55 40.5 56 43.3 54 50.8 39 12.4 61 10.8 44
SOUTHERN SYSTEM 34.1 45 32.1 44 36.4 46 79.1 61 8.0 39 13.7 56
----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----
75.9 100 72.6 100 79.7 100 129.9 100 20.4 100 24.5 100
===== ===== ===== ===== ===== ===== ===== ===== ===== ===== ===== =====
36 CVRD
7.10- Shareholding Interests (Organizational Chart at 03/31/02)
Companhia | Valepar 27.14% Companies of the CVRD Group
Vale do Rio Doce | Public 72.86% Holding in Total Stock (%)
---------------- ----------- -------------
Ferrous Non Ferrous Logistics
--------------------- ----------------------- ----------------------- ------------------------
Iron Ore and Pellets Manganese and Alloys Precious Metals, Railroads and Ports
Base Metals
and Industry Minerals
----------------------- -------------------------
------------------------ |Urucum Mineracao S.A.| ----------------------- |TVV-Terminal de |
|ZAGAIA Participacoes | |CVRD 100.00| |Docegeo | |Vila Velha S.A. |
|CVRD 100.000 | ----------------------- |CVRD 99.998| |CVRD 99.887 |
------------------------ |Others 0.002| |Min. Tacuma 0.005 |
----------------------- ----------------------- |Employees 0.108 |
------------------------ |RDME* | ----------------------- -------------------------
|Ferteco | |ITACO 100.00| |24 Empresas de | -------------------------
|ZAGAIA 100.000 | ----------------------- |Mineracao | |Ferrovia |
------------------------ |CVRD 100.00| |Centro Atlantica S.A. |
----------------------- ----------------------- |Min. Tacuma 45.65|
------------------------ |SIBRA | ----------------------- |VALIA 9.99|
|Ferteco International | |CVRD 99.21| |PPSA | |KRJ 12.31|
|Ferteco 100.000 | |Others .79| |CVRD 75.50| |CARMO 9.99|
------------------------ ----------------------- |Mitsubishi 18.88| |CPP 1.03|
------------------------ |IFC 5.62| |CSN 11.95|
|Belem-Adm e Part. Ltda| ----------------------- ----------------------- |Others 9.08|
|CVRD 99.99| |CPFL | ----------------------- -------------------------
|Docepar 0.01| |SIBRA 93.59| |PPSA Overseas |
------------------------ |CVRD 0.23| |PPSA 100.00| -------------------------
------------------------ |Others 6.17| ----------------------- |Companhia |
|Baovale Mineracao S.A.| ---------------------- |Ferroviaria do Nordeste|
|CVRD 50.00| ----------------------- ----------------------- |CVRD 30.00|
|Baoster 50.00| |Nova Era Silicon** | |Salobo Metais** | |Taquari 30.00|
------------------------ |CVRD 49.00| |CVRD 50.00| |CSN 30.00|
|Mitsubishi 25.50| |Anglo-American 50.00| |Employees 10.00|
------------------------ |Kawasaki 22.52| ----------------------- -------------------------
|Minas da Serra Geral**| |Mizushima 2.98|
|CVRD 51.00| ----------------------- ------------------------ --------------------------
|Kawasaki 24.50| |Mineracao Sossego | |Ferroban |
|Japanese Group 24.50| |Min. Andira 49.85| |Ferropasa 37.91|
------------------------ |Camelback (Itaco)50.15| |CVRD 18.74|
------------------------ |Capmelissa 6.96|
------------------------ |Dasaiev (LAIF) 6.96|
|CAEMI | |Funcef 6.79|
|Amazon (Itaco) 16.82| |Previ 6.79|
|Mitsui 43.37| |Others 15.85|
|Others 39.81| --------------------------
------------------------
--------------------------
------------------------ |CSN Aceros S.A. * |
|Samarco Mineracao S/A | |ITACO 62.50|
|CVRD 50.00| |CSN Panama 37.50|
|BHP Brasil 50.00| --------------------------
------------------------
------------------------ --------------------------
|Hispanobras** | |Sepetiba Tecon |
|CVRD 50.89| |CSN Aceros S.A. 80.00|
|Aceralia CS 49.11| |CSN 20.00|
------------------------ --------------------------
------------------------
|Itabrasco** |
|CVRD 50.90| ------------------
|Ilva 49.10| Shipping
------------------------
------------------------
|Nibrasco** | -------------------------
|CVRD 51.00| |Docenave |
|Nippon Steel 25.39| |CVRD 100.00|
|Japanese Group 23.61| -------------------------- -------------------------
------------------------ |___ Subsidiary |
------------------------ |___ Affiliated | -------------------------
|Kobrasco** | |___ Other Participations| |Navedoce * |
|CVRD 50.00| |___ Consortium | |Docenave 100.00|
|POSCO 50.00| -------------------------- -------------------------
------------------------
------------------------ -------------------------
Kobin** | |Seamar * |
Kobrasco 100.00| |Navedoce 100.00|
------------------------ -------------------------
------------------------
|GIIC * |
|ITACO 50.00| * Companies with head offices abroad
|Gulf Invest. Co. 50.00| ** Holding linked to a Stockholders Agreement
------------------------
CVRD 51
-------------- -------------- -------------
Holdings Energy Others Abroad
------------------- ----------------------- ---------------------- ------------------------
Bauxite, Alumina Timber,
and Aluminum Pulp & Paper
-------------------------- -------------------------
------------------------ ----------------------- |Consortium Igarapava | |Rio Doce |
|Aluvale | |Florestas Rio Doce | |Usina Hidreletrica | |International* |
|CVRD 94.74 | |CVRD 99.85| |CVRD 38.15| |CVRD 100.00|
|ITACO 5.26 | |Others 0.15| |Cia Mineira Metais 23.93| -------------------------
------------------------ ----------------------- |CSN 17.92| -------------------------
------------------------ ----------------------- |CEMIG 14.50| |Rio Doce Asia * |
|Albras | |Celmar | |Min. Morro Velho 5.50| |Rio Doce |
|Aluvale 51.00| |CVRD 85.00| -------------------------- |International 100.00|
|NAAC 49.00| |Nissho Iwai 15.00| -------------------------- -------------------------
------------------------ ----------------------- |Consortium | -------------------------
|Valesul** | |Porto Estrela | |Rio Doce Europa |
|Aluvale 54.51| |Usina Hidreletrica | |S.'a.r.l. * |
|Billiton 45.49| -------------- |CVRD 33.3333| |CVRD 99.80|
------------------------ Steel |CEMIG 33.3333| |Others 0.20|
------------------------ |Coteminas 33.3333| -------------------------
|Alunorte ** | ----------------------- -------------------------- -------------------------
|Aluvale 45.58| |CST** | -------------------------- |Rio Doce |
|Norsk Hydro 32.28| |CVRD 22.85| |Consortium Aimores | |International Finance *|
|MRN 12.62| |Acesita/Usinor 37.29| |Usina Hidreletrica | |Rio Doce Europa 100.00|
|NAAC 4.49| |Kawasaki 7.91| |CVRD 51.00| -------------------------
|CBA 3.62| |Others 31.95| |CEMIG 49.00| -------------------------
|JAIC 1.41| ----------------------- -------------------------- |Itabira Rio Doce |
------------------------ |Company Ltd. - ITACO * |
------------------------ ----------------------- -------------------------- |RDIF 100.00|
|Min. Rio do Norte** | |California Steel* | |Consortium Candonga | -------------------------
|Aluvale 40.00| |Rio Doce Ltd. 50.00| |Usina Hidreletrica |
|Billiton 14.80| |Kawasaki 50.00| |CVRD 50.00| -------------------------
|Alcan 12.00| ----------------------- |EPP 50.00| |Rio Doce America * |
|CBA 10.00| -------------------------- |ITACO 100.00|
|Alcoa 8.58| ----------------------- -------------------------- -------------------------
|Reynolds 5.00| |Usiminas | |Consortium Funil | -------------------------
|Norsk Hydro 5.00| |CVRD 11.46| |Usina Hidreletrica | |Rio Doce Ltd. * |
|Abalco 4.62| |Nippon Usiminas 9.45| |CVRD 51.00| |Rio Doce America 100.00|
------------------------ |Previ 8.02| |CEMIG 49.00| -------------------------
----------------------- |CIU 4.95| -------------------------- -------------------------
|Min. Vera Cruz | |Others 66.12| -------------------------- |CVRD Overseas |
|Aluvale 36.00| ----------------------- |Consortium Capim | |ITACO 100.00|
|Paraibuna 42.88| |Branco I e II - Usina | -------------------------
|Fina Emp. Part. 21.12| ----------------------- |Hidreletrica | -------------------------
------------------------ |Siderar (*) | |CVRD 48.42| |CVRD Finance |
|Itabria Rio Doce 4.85| |CEMIG 21.05| |CVRD Overseas 100.00|
--------------- |Usiminas 5.32| |Suzano 17.90| -------------------------
Fertilizers |Sidertubes S/A 50.21| |Votorantim 12.63| -------------------------
|ISA (employees) 9.95| -------------------------- |CVRD Europe Trading |
|Others 29.67| |Energy B.V. - CETE |
----------------------- -------------------------- |CVRD 100.00|
|Consortium | -------------------------
----------- |Foz do Chapeco | -------------------------
----------------------- e-Business |Usina Hidreletrica | |Brasilux |
|Fosfertil | |CVRD 40.00| |CVRD 100.00|
|CVRD 10.96| ----------------------- |Foz do Chapeco | -------------------------
|Fertifos 55.35| |Valepontocom | | Energia S.A. 60.00| -------------------------
|Others 33.69| |CVRD 98.20| -------------------------- |Rio Doce Comercio |
----------------------- |Others 1.80| -------------------------- |Internacional ApS * |
----------------------- |Consortium | |CVRD 100.00|
----------------------- |Santa Isabel | -------------------------
|Solostrata S/A | |Usina Hidreletrica | -------------------------
|Valepontocom 100.00| |CVRD 43.85| |Itabira Internacional |
----------------------- |Billiton 20.60| |Servicos e Comercio * |
|Alcoa 20.00| |RDCI Aps 99.99|
----------------------- |Votorantin 10.00| |Others 0.01|
|Multistrata S/A | |C. Correa Cimentos 5.55| -------------------------
|Valepontocom 100.00| --------------------------
-----------------------
-----------------------
|Infostrata S/A |
|Valepontocom 100.00|
-----------------------
-----------------------
|Quadrem Int. Holdings|
|LTD |
|ITACO 9.00|
|Others 91.00|
-----------------------
CVRD 37
7.11- Information About ZAGAIA (Unaudited)
Statement of Income In thousands of reais
------------------------------------------------------------------------------------------------------
03/31/02
-------------
Operating revenues -
Value-added taxes -
-------------
Net operating revenues -
-------------
Cost of products and services -
Gross profit -
Gain on investments accounted for by the equity method 29,051
Operating income (expenses)
Selling -
Administrative -
Financial expenses -
Financial income -
Other operating expenses, net -
-------------
-
-------------
Net income for the period 29,051
=============
Number of shares outstanding at the end of the period (in thousands) 1,278,180
=============
Net earnings per share outstanding at the end of the period (R$) 0.0227
=============
7.12- Information About RDE (Unaudited)
Statement of Income In thousands of reais
------------------------------------------------------------------------------------------------------
03/31/02 03/31/01
------------ ------------
Operating revenues - 1,846
Value-added taxes - -
------------ ------------
Net operating revenues - 1,846
------------ ------------
Cost of products and services - -
------------ ------------
Gross profit - 1,846
Gain on investments accounted for by the equity method 91,780 71,858
Operating income (expenses)
Selling - -
Administrative - -
Financial expenses - -
Financial income - -
Other operating expenses, net - -
------------ ------------
- -
------------ ------------
Operating profit 91,780 73,704
Non operating income (expenses), net - -
------------ ------------
Income before income tax and social contribution 91,780 73,704
Income tax and social contribution - -
------------ ------------
Net income for the period 91,780 73,704
============ ============
Number of shares outstanding at the end of the period (in thousands) 1,000 1,000
============ ============
Net earnings per share outstanding at the end of the period (R$) 91.7800 73.7040
============ ============
38 CVRD
------------------------------------------------------------------------------------------------------------------------------------
P A R T III
------------------------------------------------------------------------------------------------------------------------------------
8- EQUITY INVESTEE INFORMATION
8.1 - Aluminum Area - ALBRAS (Adjusted and Non-Audited) Attachment I
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
Information 2002 2001
------------------------------------------------------------------------------------------------------------------------------------
1st 2nd 3rd 4th 1st 2nd 3rd 4th
Quarter Quarter Quarter Quarter Total Quarter Quarter Quarter Quarter Total
-------------------------------------------------------------------------------------------
Quantity sold - external
market MT (thousand) 84 - - - 84 87 88 76 66 317
Quantity sold - internal
market MT (thousand) 4 - - - 4 3 4 4 4 15
--------------------------------------------------------------------------------------------
Quantity sold - total MT (thousand) 88 - - - 88 90 92 80 70 332
===========================================================================================
Average sales price -
external market US$ 1,318.33 - - - 1,318.33 1,530.02 1,468.13 1,387.58 1,279.75 1,426.64
Average sales price -
internal market US$ 1,352.12 - - - 1,352.12 1,606.92 1,528.21 1456.,51 1,330.54 1,477.68
Average sales price -
total US$ 1,319.81 - - - 1,319.81 1,532.90 1,470.68 1,390.89 1,282.77 1,428.99
Long-term indebtedness,
gross US$ 524,095 - - - 524,095 527,685 496,058 496,941 450,400 450,400
Short-term indebtedness,
gross US$ 72,938 - - - 72,938 176,879 167,370 137,258 183,017 183,017
--------------------------------------------------------------------------------------------
Total indebtedness, gross US$ 597,033 - - - 597,033 704,564 663,428 634,199 633,417 633,417
===========================================================================================
Long-term indebtedness,
net US$ 524,095 - - - 524,095 527,685 496,058 496,941 450,400 450,400
Short-term indebtedness,
net US$ 30,082 - - - 30,082 130,373 126,931 95,074 140,569 140,569
--------------------------------------------------------------------------------------------
Total indebtedness, net US$ 554,177 - - - 554,177 658,058 622,989 592,015 590,969 590,969
===========================================================================================
Stockholders' equity R$ 299,202 - - - 299,202 189,460 198,660 2,854 223,256 223,256
===========================================================================================
Net operating revenues R$ 273,853 - - - 273,853 277,094 307,826 278,080 231,638 1,094,638
Cost of products R$ (170,834) - - - (170,834) (161,707) (176,460) (161,136) (147,148) (646,451)
Other expenses/revenues R$ (12,562) - - - (12,562) (12,828) (9,735) (43,619) (12,542) (78,724)
Depreciation, amortization
and depletion R$ 15,555 - - - 15,555 19,149 15,091 15,417 18,539 68,196
--------------------------------------------------------------------------------------------
EBITDA ------------------------> R$ 106,012 - - - 106,012 121,708 136,722 88,742 90,487 437,659
Depreciation, amortization
and depletion R$ (15,555) - - - (15,555) (19,149) (15,091) (15,417) (18,539) (68,196)
--------------------------------------------------------------------------------------------
EBIT --------------------------> R$ 90,457 - - - 90,457 102,559 121,631 73,325 71,948 369,463
Non-operating result R$ (746) - - - (746) 582 (406) (1,157) 23,285 22,304
Net financial result R$ (11,141) - - - (11,141) (119,075) (114,009) (251,524) 221,785 (262,823)
--------------------------------------------------------------------------------------------
Income before income tax
and social contribution R$ 78,570 - - - 78,570 (15,934) 7,216 (179,356) 317,018 128,944
Income tax and social
contribution R$ (2,627) - - - (2,627) 14,467 1,982 (16,449) (96,706) (96,706)
--------------------------------------------------------------------------------------------
Net income R$ 75,943 - - - 75,943 (1,467) 9,198 (195,805) 220,312 32,238
------------------------------------------------------------------------------------------------------------------------------------
CVRD 39
8.2 - Aluminum Area - ALUNORTE (Adjusted and Non-Audited) Attachment I
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
Information 2002 2001
------------------------------------------------------------------------------------------------------------------------------------
1st 2nd 3rd 4th 1st 2nd 3rd 4th
Quarter Quarter Quarter Quarter Total Quarter Quarter Quarter Quarter Total
-------------------------------------------------------------------------------------------
Quantity sold - external MT (thousand)
market 222 - - - 222 170 212 205 232 819
Quantity sold - internal MT (thousand)
market 205 - - - 205 193 195 160 173 721
-------------------------------------------------------------------------------------------
Quantity sold - total MT (thousand) 427 - - - 427 363 407 365 405 1,540
===========================================================================================
Average sales price -
external market US$ 148.20 - - - 148.20 195.23 189.14 181.98 156.88 179.47
Average sales price -
internal market US$ 175.94 - - - 175.94 202.01 195.80 188.73 181.10 192.36
Average sales price -
total US$ 161.55 - - - 161.55 198.83 192.33 184.94 167.23 185.51
Long-term indebtedness,
gross US$ 455,061 - - - 455,061 434,772 424,815 429,162 425,221 425,221
Short-term indebtedness,
gross US$ - - - - - 43,410 47,102 20,186 45,940 45,940
-------------------------------------------------------------------------------------------
Total indebtedness, gross US$ 455,061 - - - 455,061 478,182 471,917 449,348 471,161 471,161
===========================================================================================
Long-term indebtedness,
net US$ 455,061 - - - 455,061 405,254 394,715 429,162 425,221 425,221
Short-term indebtedness,
net US$ (60,110) - - - (60,110) - - - - -
-------------------------------------------------------------------------------------------
Total indebtedness, net US$ 394,951 - - - 394,951 405,254 394,715 429,162 425,221 425,221
===========================================================================================
Stockholders' equity R$ 573,946 - - - 573,946 433,497 417,974 334,924 526,231 526,231
===========================================================================================
Net operating revenues R$ 164,875 - - - 164,875 149,709 188,075 177,200 171,700 686,684
Cost of products R$ (135,765) - - - (135,765) (106,856)(128,775)(122,317) (139,731) (497,679)
Other expenses/revenues R$ (7,377) - - - (7,377) (4,729) (6,886) (3,869) (7,857) (23,341)
Depreciation, amortization
and depletion R$ 12,802 - - - 12,802 12,904 12,861 12,773 12,927 51,465
-------------------------------------------------------------------------------------------
EBITDA ------------------------> R$ 34,535 - - - 34,535 51,028 65,275 63,787 37,039 217,129
Depreciation, amortization
and depletion R$ (12,802) - - - (12,802) (12,904) (12,861) (12,773) (12,927) (51,465)
-------------------------------------------------------------------------------------------
EBIT --------------------------> R$ 21,733 - - - 21,733 38,124 52,414 51,014 24,112 165,664
Non-operating result R$ (4) - - - (4) 749 (721) 104 31 163
Net financial result R$ (10,936) - - - (10,936) (97,766) (75,812)(156,652) 126,209 (204,021)
-------------------------------------------------------------------------------------------
Income before income tax
and social contribution R$ 10,793 - - - 10,793 (58,893) (24,119)(105,534) 150,352 (38,194)
Income tax and social
contribution R$ (726) - - - (726) 15,653 7,153 (22,808) (11,305) (11,307)
-------------------------------------------------------------------------------------------
Net income R$ 10,067 - - - 10,067 (43,240) (16,966)(128,342) 139,047 (49,501)
------------------------------------------------------------------------------------------------------------------------------------
40 CVRD
8.3 - Aluminum Area - ALUVALE (Adjusted and Non-Audited) Attachment I
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
Information 2002 2001
------------------------------------------------------------------------------------------------------------------------------------
1st 2nd 3rd 4th 1st 2nd 3rd 4th
Quarter Quarter Quarter Quarter Total Quarter Quarter Quarter Quarter Total
-------------------------------------------------------------------------------------------
Quantity sold - external
market MT (thousand) - - - - - - - - - -
Quantity sold - internal
market MT (thousand) - - - - - - - 7 9 16
-------------------------------------------------------------------------------------------
Quantity sold - total MT (thousand) - - - - - - - 7 9 16
===========================================================================================
Average sales price -
external market US$ - - - - - - - - - -
Average sales price -
internal market US$ - - - - - - - 1,966.10 1,748.02 1,843.43
Average sales price - total US$ - - - - - - - 1,966.10 1,748.02 1,843.43
Short-term indebtedness,
gross US$ - - - - - 310 259 - - -
-------------------------------------------------------------------------------------------
Total indebtedness, gross US$ - - - - - 310 259 - - -
===========================================================================================
Stockholders' equity R$ 891,456 - - - 891,456 724,927 754,707 627,385 826,533 826,533
===========================================================================================
Net operating revenues R$ 288 - - - 288 323 438 599 507 1,867
Cost of products R$ (22) - - - (22) - - (15) (34) (49)
Other expenses/revenues R$ 4,571 - - - 4,571 3,650 315 2,547 4,824 11,336
Depreciation, amortization
and depletion R$ - - - - - 8 9 9 9 35
-------------------------------------------------------------------------------------------
EBITDA ------------------------> R$ 4,837 - - - 4,837 3,981 762 3,140 5,306 13,189
Depreciation, amortization
and depletion R$ - - - - - (8) (9) (9) (9) (35)
-------------------------------------------------------------------------------------------
EBIT --------------------------> R$ 4,837 - - - 4,837 3,973 753 3,131 5,297 13,154
Gain on investments
accounted for by the
equity method R$ 57,892 - - - 57,892 (2,165) 27,928 (132,056) 222,617 116,324
Net financial result R$ 4,917 - - - 4,917 3,155 3,916 4,293 4,557 15,921
-------------------------------------------------------------------------------------------
Income before income tax and
social contribution R$ 67,646 - - - 67,646 4,963 32,597 (124,632) 232,471 145,399
Income tax and social
contribution R$ (2,723) - - - (2,723) 3,870 (2,818) (2,689) 2,211 574
-------------------------------------------------------------------------------------------
Net income R$ 64,923 - - - 64,923 8,833 29,779 (127,321) 234,682 145,973
------------------------------------------------------------------------------------------------------------------------------------
CVRD 41
8.4 - Aluminum Area - MRN (Adjusted and Non-Audited) Attachment I
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
Information 2002 2001
------------------------------------------------------------------------------------------------------------------------------------
1st 2nd 3rd 4th 1st 2nd 3rd 4th
Quarter Quarter Quarter Quarter Total Quarter Quarter Quarter Quarter Total
-------------------------------------------------------------------------------------------
Quantity sold - external
market MT (thousand) 485 - - - 485 581 886 954 992 3,413
Quantity sold - internal
market MT (thousand) 1,296 - - - 1,296 1,604 1,946 1,806 2,183 7,539
-------------------------------------------------------------------------------------------
Quantity sold - total MT (thousand) 1,781 - - - 1,781 2,185 2,832 2,760 3,175 10,952
===========================================================================================
Average sales price -
external market US$ 20.56 - - - 20.56 22.70 21.99 22.16 22.32 22.27
Average sales price -
internal market US$ 19.39 - - - 19.39 20.08 20.16 20.37 21.00 20.36
Average sales price - total US$ 19.46 - - - 19.46 21.39 21.08 20.99 21.67 20.95
Long-term indebtedness,
gross US$ 95,892 - - - 95,892 700 - 7,929 22,038 22,038
Short-term indebtedness,
gross US$ 14,436 - - - 14,436 1,456 1,400 11,594 706 706
-------------------------------------------------------------------------------------------
Total indebtedness, gross US$ 110,328 - - - 110,328 2,156 1,400 19,523 22,744 22,744
===========================================================================================
Stockholders' equity R$ 594,895 - - - 594,895 522,722 577,587 544,062 605,387 605,387
===========================================================================================
Net operating revenues R$ 76,448 - - - 76,448 86,629 124,021 139,255 154,020 503,925
Cost of products R$ (39,697) - - - (39,697) (38,030) (58,247) (59,943) (65,360)(221,580)
Other expenses/revenues R$ (569) - - - (569) (2,192) (2,172) (2,075) (2,204) (8,643)
Depreciation, amortization
and depletion R$ 304 - - - 304 11,199 11,244 10,520 12,534 45,497
-------------------------------------------------------------------------------------------
EBITDA --------------------> R$ 36,486 - - - 36,486 57,606 74,846 87,757 98,990 319,199
Depreciation, amortization
and depletion R$ (304) - - - (304) (11,199) (11,244) (10,520) (12,534) (45,497)
-------------------------------------------------------------------------------------------
EBIT ----------------------> R$ 36,182 - - - 36,182 46,407 63,602 77,237 86,456 273,702
Gain on investments accounted
for by the equity method R$ (3,403) - - - (3,403) (5,540) (2,050) (10,763) 16,868 (1,485)
Non-operating result R$ (13) - - - (13) (79) 82 133 (18) 118
Net financial result R$ (1,804) - - - (1,804) 225 (1,895) (2,541) (3,574) (7,785)
-------------------------------------------------------------------------------------------
Income before income tax
and social contribution R$ 30,962 - - - 30,962 41,013 59,739 64,066 99,732 264,550
Income tax and social
contribution R$ (6,522) - - - (6,522) (3,845) (4,875) (11,692) 237 (20,175)
-------------------------------------------------------------------------------------------
Net income R$ 24,440 - - - 24,440 37,168 54,864 52,374 99,969 244,375
------------------------------------------------------------------------------------------------------------------------------------
42 CVRD
8.5 - Aluminum Area - VALESUL (Adjusted and Non-Audited) Attachment I
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
Information 2002 2001
------------------------------------------------------------------------------------------------------------------------------------
1st 2nd 3rd 4th 1st 2nd 3rd 4th
Quarter Quarter Quarter Quarter Total Quarter Quarter Quarter Quarter Total
-------------------------------------------------------------------------------------------
Quantity sold - external
market MT (thousand) 9 - - - 9 2 9 7 5 23
Quantity sold - internal
market MT (thousand) 12 - - - 12 14 17 11 11 53
-------------------------------------------------------------------------------------------
Quantity sold - total MT (thousand) 21 - - - 21 16 26 18 16 76
===========================================================================================
Average sales price -
external market US$ 1,467.44 - - - 1,467.44 1,733.37 1,585.14 1,554.56 1,490.00 1,590.39
Average sales price -
internal market US$ 1,906.21 - - - 1,906.21 2,155.46 2,047.69 1,934.35 1,887.58 2,054.36
Average sales price -
total US$ 1,720.97 - - - 1,720.97 2,107.06 1,882.41 1,784.68 1,757.16 1,916.59
Long-term indebtedness,
gross US$ 1,868 - - - 1,868 2,568 2,273 2,598 2,002 2,002
Short-term indebtedness,
gross US$ 685 - - - 685 33,619 9,700 939 1,412 1,412
-------------------------------------------------------------------------------------------
Total indebtedness, gross US$ 2,553 - - - 2,553 36,187 11,973 3,537 3,414 3,414
===========================================================================================
Long-term indebtedness, net US$ 1,868 - - - 1,868 2,568 2,273 2,598 2,002 2,002
Short-term indebtedness, net US$ 668 - - - 668 33,174 1,949 - 1,394 1,394
-------------------------------------------------------------------------------------------
Total indebtedness, net US$ 2,536 - - - 2,536 35,742 4,222 2,598 3,396 3,396
===========================================================================================
Stockholders' equity R$ 231,170 - - - 231,170 190,016 205,881 218,141 224,900 224,900
===========================================================================================
Net operating revenues R$ 77,727 - - - 77,727 59,652 98,954 77,239 66,811 302,656
Cost of products R$ (63,576) - - - (63,576) (40,859) (68,267) (54,855) (49,928)(213,909)
Other expenses/revenues R$ (3,223) - - - (3,223) (5,104) (11,433) 1,814 (5,956) (20,679)
Depreciation, amortization
and depletion R$ 3,332 - - - 3,332 3,510 3,027 3,912 3,307 13,756
-------------------------------------------------------------------------------------------
EBITDA -----------------------> R$ 14,260 - - - 14,260 17,199 22,281 28,110 14,234 81,824
Depreciation, amortization
and depletion R$ (3,332) - - - (3,332) (3,510) (3,027) (3,912) (3,307) (13,756)
-------------------------------------------------------------------------------------------
EBIT ------------------------> R$ 10,928 - - - 10,928 13,689 19,254 24,198 10,927 68,068
Non-operating result R$ 55 - - - 55 49 (1,392) 13 (194) (1,524)
Net financial result R$ (597) - - - (597) (3,079) 3,513 (8,500) (1,087) (9,153)
-------------------------------------------------------------------------------------------
Income before income tax
and social contribution R$ 10,386 - - - 10,386 10,659 21,375 15,711 9,646 57,391
Income tax and social
contribution R$ (4,122) - - - (4,122) (2,597) (5,510) (3,451) (2,887) (14,445)
-------------------------------------------------------------------------------------------
Net income R$ 6,264 - - - 6,264 8,062 15,865 12,260 6,759 42,946
------------------------------------------------------------------------------------------------------------------------------------
CVRD 43
8.6 - Pelletizing Affiliates - HISPANOBRAS (Adjusted and Non-Audited) Attachment I
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
Information 2002 2001
------------------------------------------------------------------------------------------------------------------------------------
1st 2nd 3rd 4th 1st 2nd 3rd 4th
Quarter Quarter Quarter Quarter Total Quarter Quarter Quarter Quarter Total
-------------------------------------------------------------------------------------------
Quantity sold - external
market MT (thousand) 487 - - - 487 312 336 422 148 1,218
Quantity sold - internal
market - CVRD MT (thousand) 420 - - - 420 520 560 460 850 2,390
-------------------------------------------------------------------------------------------
Quantity sold - total MT (thousand) 907 - - - 907 832 896 882 998 3,608
===========================================================================================
Average sales price -
external market US$ 31.33 - - - 31.33 30.80 30.79 32.84 31.46 31.44
Average sales price -
internal market US$ 31.43 - - - 31.43 30.57 31.55 32.44 31.05 31.41
Average sales price -
total US$ 31.38 - - - 31.38 30.65 31.26 32.64 31.12 31.42
-------------------------------------------------------------------------------------------
Stockholders' equity R$ 85,476 - - - 85,476 73,036 76,910 85,853 80,461 80,461
===========================================================================================
Net operating revenues R$ 67,353 - - - 67,353 52,089 64,459 73,261 78,924 268,733
Cost of products R$ (57,628) - - - (57,628) (44,565) (53,537) (60,310) (64,358)(222,770)
Other expenses/revenues R$ (737) - - - (737) (502) (487) 1,274 (2,620) (2,335)
Depreciation, amortization
and depletion R$ 2,458 - - - 2,458 2,377 2,378 2,376 2,437 9,568
-------------------------------------------------------------------------------------------
EBITDA -----------------> R$ 11,446 - - - 11,446 9,399 12,813 16,601 14,383 53,196
Depreciation, amortization
and depletion R$ (2,458) - - - (2,458) (2,377) (2,378) (2,376) (2,437) (9,568)
-------------------------------------------------------------------------------------------
EBIT -------------------> R$ 8,988 - - - 8,988 7,022 10,435 14,225 11,946 43,628
Non-operating result R$ (1,465) - - - (1,465) (1,471) (2,537) (2,622) (3,135) (9,765)
Net financial result R$ 854 - - - 854 2,460 833 4,127 (5,038) 2,382
-------------------------------------------------------------------------------------------
Income before income tax
and social contribution R$ 8,377 - - - 8,377 8,011 8,731 15,730 3,773 36,245
Income tax and social
contribution R$ (3,362) - - - (3,362) (2,161) (3,419) (5,347) 62 (10,865)
-------------------------------------------------------------------------------------------
Net income R$ 5,015 - - - 5,015 5,850 5,312 10,383 3,835 25,380
------------------------------------------------------------------------------------------------------------------------------------
44 CVRD
8.7 - Pelletizing Affiliates - ITABRASCO (Adjusted and Non-Audited) Attachment I
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
Information 2002 2001
------------------------------------------------------------------------------------------------------------------------------------
1st 2nd 3rd 4th 1st 2nd 3rd 4th
Quarter Quarter Quarter Quarter Total Quarter Quarter Quarter Quarter Total
-------------------------------------------------------------------------------------------
Quantity sold - external
market MT (thousand) 644 - - - 644 497 579 471 700 2,247
Quantity sold - internal
market - CVRD MT (thousand) 233 - - - 233 278 196 271 295 1,040
-------------------------------------------------------------------------------------------
Quantity sold - total MT (thousand) 877 - - - 877 775 775 742 995 3,287
===========================================================================================
Average sales price -
external market US$ 31.16 - - - 31.16 31.13 31.96 31.80 31.67 31.63
Average sales price -
internal market US$ 31.90 - - - 31.90 31.29 32.66 31.50 32.44 31.93
Average sales price -
total US$ 31.35 - - - 31.35 31.19 31.62 31.69 31.90 31.72
Long-term indebtedness,
gross US$ - - - - - - - - - -
Short-term indebtedness,
gross US$ 18,023 - - - 18,023 503 - 407 522 522
-------------------------------------------------------------------------------------------
Total indebtedness,
gross US$ 18,023 - - - 18,023 503 - 407 552 522
===========================================================================================
Stockholders' equity R$ 60,230 - - - 60,230 46,768 65,160 68,571 58,164 58,164
===========================================================================================
Net operating revenues R$ 65,575 - - - 65,575 48,950 56,985 59,432 80,318 245,685
Cost of products R$ (56,551) - - - (56,551) (45,783) (44,756) (52,288) (59,804)(202,631)
Other expenses/revenues R$ (1,020) - - - (1,020) (1,086) (1,379) 2,177 (4,673) (4,961)
Depreciation, amortization
and depletion R$ 327 - - - 327 288 309 338 363 1,298
-------------------------------------------------------------------------------------------
EBITDA ------------------> R$ 8,331 - - - 8,331 2,369 11,159 9,659 16,204 39,391
Depreciation, amortization
and depletion R$ (327) - - - (327) (288) (309) (338) (363) (1,298)
-------------------------------------------------------------------------------------------
EBIT --------------------> R$ 8,004 - - - 8,004 2,081 10,850 9,321 15,841 38,093
Non-operating result R$ (2,494) - - - (2,494) (12) 6,437 15 (8,246) (1,806)
Net financial result R$ (637) - - - (637) 2,770 1,808 2,369 (5,604) 1,343
-------------------------------------------------------------------------------------------
Income before income tax
and social contribution R$ 4,873 - - - 4,873 4,839 19,095 11,705 1,991 37,630
Income tax and social
contribution R$ (2,412) - - - (2,412) (3,288) (707) (7,231) 2,419 (8,807)
-------------------------------------------------------------------------------------------
Net income R$ 2,461 - - - 2,461 1,551 18,388 4,474 4,410 28,823
------------------------------------------------------------------------------------------------------------------------------------
CVRD 45
8.8 - Pelletizing Affiliates - KOBRASCO (Adjusted and Non-Audited) Attachment I
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
Information 2002 2001
------------------------------------------------------------------------------------------------------------------------------------
1st 2nd 3rd 4th 1st 2nd 3rd 4th
Quarter Quarter Quarter Quarter Total Quarter Quarter Quarter Quarter Total
-------------------------------------------------------------------------------------------
Quantity sold - external
market MT (thousand) 436 - - - 436 561 523 493 558 2,135
Quantity sold - internal
market - CVRD MT (thousand) 420 - - - 420 420 489 630 510 2,049
Quantity sold - internal
market - Others - - - - - - - - - -
-------------------------------------------------------------------------------------------
Quantity sold - total MT (thousand) 856 - - - 856 981 1,012 1,123 1,068 4,184
===========================================================================================
Average sales price -
external market US$ 31.31 - - - 31.31 30.04 31.38 33.26 30.80 30.56
Average sales price -
internal market US$ 32.08 - - - 32.08 31.80 31.29 30 31.64 31.32
Average sales price - total US$ 31.69 - - - 31.69 30.79 31.34 31.19 31.20 30.93
Long-term indebtedness,
gross US$ 149,583 - - - 149,583 128,282 128,006 128,915 128,797 128,797
Short-term indebtedness,
gross US$ - - - - - - - - - -
-------------------------------------------------------------------------------------------
Total indebtedness, gross US$ 149,583 - - - 149,583 128,282 128,006 128,915 128,797 128,797
===========================================================================================
Long-term indebtedness, net US$ 149,583 - - - 149,583 128,282 128,006 128,915 128,797 128,797
Short-term indebtedness, net US$ - - - - - - - - - -
-------------------------------------------------------------------------------------------
Total indebtedness, net US$ 149,583 - - - 149,583 128,282 128,006 128,915 128,797 128,797
===========================================================================================
Stockholders' equity R$ 16,608 - - - 16,608 39,224 32,574 (39,435) 13,560 13,560
===========================================================================================
Net operating revenues R$ 63,984 - - - 63,984 61,210 70,414 90,720 84,647 306,991
Cost of products R$ (50,027) - - - (50,027) (46,868) (56,123) (68,213) (66,792)(237,996)
Other expenses/revenues R$ (1,109) - - - (1,109) (734) (755) (781) (695) (2,965)
Depreciation, amortization
and depletion R$ 2,248 - - - 2,248 2,225 2,226 2,221 2,260 8,932
-------------------------------------------------------------------------------------------
EBITDA -------------------> R$ 15,096 - - - 15,096 15,833 15,762 23,947 19,420 74,962
Depreciation, amortization
and depletion R$ (2,248) - - - (2,248) (2,225) (2,226) (2,221) (2,260) (8,932)
-------------------------------------------------------------------------------------------
EBIT ---------------------> R$ 12,848 - - - 12,848 13,608 13,536 21,726 17,160 66,030
Other expenses - non cash R$ (2,984) - - - (2,984) - - (52,000) 14,086 (37,914)
Gain on investments accounted
for by the equity method R$ 57 - - - 57 316 229 (545) 618 618
Non-operating result R$ 31 - - - 31 12 (46) 126 (39) 53
Net financial result R$ (3,811) - - - (3,811) (32,118) (23,780) (51,598) 41,253 (66,243)
-------------------------------------------------------------------------------------------
Income before income tax
and social contribution R$ 6,141 - - - 6,141 (18,182) (10,061) (82,291) 73,078 (37,456)
Income tax and social
contribution R$ (3,093) - - - (3,093) 6,198 3,411 10,281 (20,072) (182)
-------------------------------------------------------------------------------------------
Net income R$ 3,048 - - - 3,048 (11,984) (6,650) (72,010) 53,006 (37,638)
------------------------------------------------------------------------------------------------------------------------------------
46 CVRD
8.9 - Pelletizing Affiliates - NIBRASCO (Adjusted and Non-Audited) Attachment I
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
Information 2002 2001
------------------------------------------------------------------------------------------------------------------------------------
1st 2nd 3rd 4th 1st 2nd 3rd 4th
Quarter Quarter Quarter Quarter Total Quarter Quarter Quarter Quarter Total
-------------------------------------------------------------------------------------------
Quantity sold - external
market MT (thousand) 407 - - - 407 806 559 514 432 2,311
Quantity sold - internal
market - CVRD MT (thousand) 584 - - - 584 1,169 1,572 929 871 4,541
Quantity sold - internal
market - Others MT (thousand) 9 - - - 9 35 38 - 68 141
-------------------------------------------------------------------------------------------
Quantity sold - total MT (thousand) 1,000 - - - 1,000 2,010 2,169 1,443 1,371 6,993
===========================================================================================
Average sales price -
external market US$ 30.25 - - - 30.25 30.16 30.00 30.48 30.10 30.20
Average sales price -
internal market US$ 30.49 - - - 30.49 30 31 29 27 29.70
Average sales price - total US$ 30.39 - - - 30.39 30.31 31.00 29.22 27.90 29.80
Long-term indebtedness,
gross US$ 3,600 - - - 3,600 6,000 4,800 4,800 3,600 3,600
Short-term indebtedness,
gross US$ 2,484 - - - 2,484 2,619 2,400 2,505 2,400 2,400
-------------------------------------------------------------------------------------------
Total indebtedness, gross US$ 6,084 - - - 6,084 8,619 7,200 7,305 6,000 6,000
===========================================================================================
Stockholders' equity R$ 78,682 - - - 78,682 122,313 113,062 79,058 82,945 82,945
===========================================================================================
Net operating revenues R$ 70,936 - - - 70,936 122,876 151,327 109,356 98,864 482,423
Cost of products R$ (70,397) - - - (70,397) (107,077)(125,975)(102,174) (87,913)(423,139)
Other expenses/revenues R$ 144 - - - 144 (10,534) (8,049) 12,922 1,747 (3,914)
Depreciation, amortization
and depletion R$ 4,217 - - - 4,217 4,086 4,086 4,128 4,130 16,430
-------------------------------------------------------------------------------------------
EBITDA --------------------> R$ 4,900 - - - 4,900 9,351 21,389 24,232 16,828 71,800
Depreciation, amortization
and depletion R$ (4,217) - - - (4,217) (4,086) (4,086) (4,128) (4,130) (16,430)
-------------------------------------------------------------------------------------------
EBIT ----------------------> R$ 683 - - - 683 5,265 17,303 20,104 12,698 55,370
Other expenses - non cash R$ (2,548) - - - (2,548) - - (42,000) (2,960) (44,960)
Net financial result R$ (2,463) - - - (2,463) 902 679 (8,420) (41) (6,880)
-------------------------------------------------------------------------------------------
Income before income tax
and social contribution R$ (4,328) - - - (4,328) 6,167 17,982 (30,316) 9,697 3,530
Income tax and social
contribution R$ 66 - - - 66 (3,172) (4,734) (3,688) (2,851) (14,445)
-------------------------------------------------------------------------------------------
Net income R$ (4,262) - - - (4,262) 2,995 13,248 (34,004) 6,846 (10,915)
------------------------------------------------------------------------------------------------------------------------------------
CVRD 47
8.10 - Pelletizing Affiliates - SAMARCO (Adjusted and Non-Audited) Attachment I
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
Information 2002 2001
------------------------------------------------------------------------------------------------------------------------------------
1st 2nd 3rd 4th 1st 2nd 3rd 4th
Quarter Quarter Quarter Quarter Total Quarter Quarter Quarter Quarter Total
-------------------------------------------------------------------------------------------
Quantity sold - total MT (thousand) 3,301 - - - 3,301 3,399 2,919 2,312 2,571 11,201
===========================================================================================
Average sales price - total US$ 28.48 - - - 28.48 28.83 30.00 29.44 29.55 29.70
Long-term indebtedness,
gross US$ 92,788 - - - 92,788 166,257 132,655 119,394 109,691 109,691
Short-term indebtedness,
gross US$ 169,170 - - - 169,170 188,795 164,003 158,204 171,223 171,223
-------------------------------------------------------------------------------------------
Total indebtedness, gross US$ 261,958 - - - 261,958 355,052 296,658 277,598 280,914 280,914
===========================================================================================
Long-term indebtedness, net US$ 92,788 - - - 92,788 126,810 132,655 119,394 109,691 109,691
Short-term indebtedness, net US$ 154,260 - - - 154,260 170,389 142,181 139,989 166,703 166,703
-------------------------------------------------------------------------------------------
Total indebtedness, net US$ 247,048 - - - 247,048 297,199 274,836 259,383 276,394 276,394
===========================================================================================
Stockholders' equity R$ 510,038 - - - 510,038 418,290 447,693 399,275 451,942 451,942
===========================================================================================
Net operating revenues R$ 212,909 - - - 212,909 197,904 190,671 166,905 208,039 763,519
Cost of products R$ (108,837) - - - (108,837) (95,771) (80,978) (73,499) (102,700)(352,948)
Other expenses/revenues R$ (18,632) - - - (18,632) (18,514) (19,602) (12,796) (16,464) (67,376)
Depreciation, amortization
and depletion R$ 7,745 - - - 7,745 9,268 8,113 5,793 2,503 25,677
-------------------------------------------------------------------------------------------
EBITDA --------------------> R$ 93,185 - - - 93,185 92,887 98,204 86,403 91,378 368,872
Depreciation, amortization
and depletion R$ (7,745) - - - (7,745) (9,268) (8,113) (5,793) (2,503) (25,677)
-------------------------------------------------------------------------------------------
EBIT ----------------------> R$ 85,440 - - - 85,440 83,619 90,091 80,610 88,875 343,195
Other expenses/revenues -
non cash R$ (1,815) - - - (1,815) (5,275) (2,993) (4,433) (19,675) (32,376)
Gain on investments accounted
for by the equity method R$ 2,213 - - - 2,213 (3,570) (4,541) (9,266) 16,582 (795)
Non-operating result R$ 50 - - - 50 - 16 (19,440) (461) (19,885)
Net financial result R$ (15,237) - - - (15,237) (63,754) (45,453) (97,984) 50,563 (156,628)
-------------------------------------------------------------------------------------------
Income before income tax
and social contribution R$ 70,651 - - - 70,651 11,020 37,120 (50,513) 135,884 133,511
Income tax and social
contribution R$ (12,555) - - - (12,555) (3,324) (7,657) 2,093 (18,503) (27,391)
-------------------------------------------------------------------------------------------
Net income R$ 58,096 - - - 58,096 7,696 29,463 (48,420) 117,381 106,120
------------------------------------------------------------------------------------------------------------------------------------
48 CVRD
8.11 - Iron Ore Area - FERTECO (Adjusted and Non-Audited) Attachment I
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
Information 2002 2001
------------------------------------------------------------------------------------------------------------------------------------
1st 2nd 3rd 4th 1st 2nd 3rd 4th
Quarter Quarter Quarter Quarter Total Quarter Quarter Quarter Quarter Total
(*) (*)
-------------------------------------------------------------------------------------------
Quantity sold - external
market MT (thousand) 2,470 - - - 2,470 - 3,955 3,556 3,653 11,164
Quantity sold - internal
market MT (thousand) 789 - - - 789 - 598 455 699 1,752
-------------------------------------------------------------------------------------------
Quantity sold - total MT (thousand) 3,259 - - - 3,259 - 4,553 4,011 4,352 12,916
===========================================================================================
Average sales price -
external market US$ 16.91 - - - 16.91 - 16.50 17.50 18.43 17.05
Average sales price -
internal market US$ 12.98 - - - 12.98 - 5.35 14.72 8.79 9.40
Average sales price - total US$ 15.96 - - - 15.96 - 15.16 17.18 16.83 16.11
Long-term indebtedness, gross US$ 94,359 - - - 94,359 - 101,394 103,737 95,887 95,887
Short-term indebtedness, gross US$ 55,244 - - - 55,244 - 86,257 72,200 52,696 52,696
-------------------------------------------------------------------------------------------
Total indebtedness, gross US$ 149,603 - - - 149,603 - 187,651 175,937 148,583 148,583
===========================================================================================
Long-term indebtedness, net US$ 94,359 - - - 94,359 - 101,394 103,737 94,576 94,576
Short-term indebtedness, net US$ 27,626 - - - 27,626 - 85,250 71,620 51,650 51,650
-------------------------------------------------------------------------------------------
Total indebtedness, net US$ 121,985 - - - 121,985 - 186,644 175,357 146,226 146,226
===========================================================================================
Stockholders' equity R$ 215,058 - - - 215,058 - 225,625 204,610 193,506 193,506
===========================================================================================
Net operating revenues R$ 126,846 - - - 126,846 - 158,518 170,286 187,051 515,855
Cost of products R$ (85,388) - - - (85,388) - (121,815)(126,972) (138,794)(387,581)
Other expenses/revenues R$ 2,894 - - - 2,894 - 5,315 (14,355) 4,756 (4,284)
Depreciation, amortization
and depletion R$ 7,273 - - - 7,273 - 2,235 3,375 3,794 9,404
-------------------------------------------------------------------------------------------
EBITDA ---------------------> R$ 51,625 - - - 51,625 - 44,253 32,334 56,807 133,394
Depreciation, amortization
and depletion R$ (7,273) - - - (7,273) - (2,235) (3,375) (3,794) (9,404)
-------------------------------------------------------------------------------------------
EBIT -----------------------> R$ 44,352 - - - 44,352 - 42,018 28,959 53,013 123,990
Gain on investments accounted
for by the equity method R$ 9 - - - 9 - 286 (5,400) 315 (4,799)
Non-operating result R$ (216) - - - (216) - (107) (12,281) 12,012 (376)
Net financial result R$ (4,575) - - - (4,575) - (19,170) (44,417) (7,068) (70,655)
-------------------------------------------------------------------------------------------
Income before income tax
and social contribution R$ 39,570 - - - 39,570 - 23,027 (33,139) 58,272 48,160
Income tax and social
contribution R$ (10,519) - - - (10,519) - (5,223) 12,268 (124) 6,921
-------------------------------------------------------------------------------------------
Net income R$ 29,051 - - - 29,051 - 17,804 (20,871) 58,148 55,081
CVRD 49
8.12 - Manganese and Ferro Alloys Area - SIBRA (Adjusted and Non-Audited) Attachment I
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
Information 2002 2001
------------------------------------------------------------------------------------------------------------------------------------
1st 2nd 3rd 4th 1st 2nd 3rd 4th
Quarter Quarter Quarter Quarter Total Quarter Quarter Quarter Quarter Total
-------------------------------------------------------------------------------------------
Quantity sold - external
market - ferro alloy MT (thousand) 10 - - - 10 10 9 7 10 36
Quantity sold - internal
market - ferro alloy MT (thousand) 19 - - - 19 15 15 14 81 125
-------------------------------------------------------------------------------------------
Quantity sold - total MT (thousand) 29 - - - 29 25 24 21 91 161
===========================================================================================
Quantity sold - external
market - manganese MT (thousand) 242 - - - 242 189 337 284 288 1,098
Quantity sold - internal
market - manganese MT (thousand) 36 - - - 36 22 2 22 26 72
-------------------------------------------------------------------------------------------
Quantity sold - total MT (thousand) 278 - - - 278 211 339 306 314 1,170
===========================================================================================
Average sales price -
external market - ferro
alloy US$ 465.60 - - - 465.60 650.08 570.11 542.65 475.42 519.40
Average sales price -
internal market - ferro
alloy US$ 434.86 - - - 434.86 538.29 441.24 422.62 236.53 196.92
Average sales price - total US$ 445.67 - - - 445.67 582.53 489.44 460.70 314.01 267.67
Average sales price -
external market - manganese US$ 52.99 - - - 52.99 39.41 45.61 47.71 49.44 46.27
Average sales price -
internal market - manganese US$ 69.56 - - - 69.56 61.44 245.17 67.07 48.72 60.15
Average sales price - total US$ 55.11 - - - 55.11 41.74 46.54 49.13 49.38 47.13
Long-term indebtedness,
gross US$ 24,720 - - - 24,720 41,322 51,374 43,986 23,937 23,937
Short-term indebtedness,
gross US$ 24,465 - - - 24,465 35,241 24,292 20,457 25,102 25,102
-------------------------------------------------------------------------------------------
Total indebtedness, gross US$ 49,185 - - - 49,185 76,563 75,666 64,443 49,039 49,039
===========================================================================================
Long-term indebtedness, net US$ 23,800 - - - 23,800 41,046 51,106 43,713 23,436 23,436
Short-term indebtedness, net US$ 18,512 - - - 18,512 32,774 19,087 11,627 24,444 24,444
-------------------------------------------------------------------------------------------
Total indebtedness, net US$ 42,312 - - - 42,312 73,820 70,193 55,340 47,880 47,880
===========================================================================================
Stockholders' equity R$ 242,845 - - - 242,845 135,167 155,189 161,011 210,144 210,144
===========================================================================================
Net operating revenues R$ 62,105 - - - 62,105 44,719 58,425 16,260 104,173 223,577
Cost of products R$ (31,569) - - - (31,569) (28,943) (25,469) (9,957) (63,997)(128,366)
Other expenses/revenues R$ (2,024) - - - (2,024) (20,865) (3,627) 247 10,018 (14,227)
Depreciation, amortization
and depletion R$ (2,186) - - - (2,186) - (5,278) (1,984) (3,246) (10,508)
-------------------------------------------------------------------------------------------
EBITDA ---------------------> R$ 26,326 - - - 26,326 (5,089) 24,051 4,566 46,948 70,476
Depreciation, amortization
and depletion R$ 2,186 - - - 2,186 - 5,278 1,984 3,246 10,508
-------------------------------------------------------------------------------------------
EBIT -----------------------> R$ 28,512 - - - 28,512 (5,089) 29,329 6,550 50,194 80,984
Gain on investments accounted
for by the equity method R$ 9,061 - - - 9,061 4,922 1,617 307 9,607 16,453
Non-operating result R$ (234) - - - (234) (481) (2,722) (662) (2,158) (6,023)
Net financial result R$ (1,784) - - - (1,784) (5,272) (4,009) 641 (14,040) (22,680)
-------------------------------------------------------------------------------------------
Income before income tax
and social contribution R$ 35,555 - - - 35,555 (5,920) 24,215 6,836 43,603 68,734
Income tax and social
contribution R$ (1,994) - - - (1,994) - (4,192) (1,014) 5,531 325
-------------------------------------------------------------------------------------------
Net income R$ 33,561 - - - 33,561 (5,920) 20,023 5,822 49,134 69,059
------------------------------------------------------------------------------------------------------------------------------------
50 CVRD
8.13 - Manganese and Ferro Alloys Area - CPFL (Adjusted and Non-Audited) Attachment I
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
Information 2002 2001
------------------------------------------------------------------------------------------------------------------------------------
1st 2nd 3rd 4th 1st 2nd 3rd 4th
Quarter Quarter Quarter Quarter Total Quarter Quarter Quarter Quarter Total
-------------------------------------------------------------------------------------------
Quantity sold - external
market MT (thousand) 13 - - - 13 18 20 14 13 65
Quantity sold - internal
market MT (thousand) 24 - - - 24 16 17 14 43 90
-------------------------------------------------------------------------------------------
Quantity sold - total MT (thousand) 37 - - - 37 34 37 28 56 155
===========================================================================================
Average sales price -
external market US$ 568.10 - - - 568.10 475.61 593.98 703.40 670.68 570.12
Average sales price -
internal market US$ 489.47 - - - 489.47 598.83 570.29 1,035.79 237.39 462.01
Average sales price - total US$ 517.01 - - - 517.01 533.34 583.02 868.73 338.37 507.35
Long-term indebtedness, gross US$ 3,932 - - - 3,932 7,707 10,390 8,544 3,582 3,582
Short-term indebtedness,
gross US$ 6,682 - - - 6,682 12,853 9,427 8,003 8,107 8,107
-------------------------------------------------------------------------------------------
Total indebtedness, gross US$ 10,614 - - - 10,614 20,560 19,817 16,547 11,689 11,689
===========================================================================================
Long-term indebtedness, net US$ - - - - - - - - - -
Short-term indebtedness, net US$ 2,363 - - - 2,363 12,343 7,989 9,725 6,151 6,151
-------------------------------------------------------------------------------------------
Total indebtedness, net US$ 2,363 - - - 2,363 12,343 7,989 9,725 6,151 6,151
-------------------------------------------------------------------------------------------
Stockholders' equity R$ 138,780 - - - 138,780 110,615 112,711 119,849 128,747 128,747
===========================================================================================
Net operating revenues R$ 38,973 - - - 38,973 36,776 44,610 46,947 42,476 170,809
Cost of products R$ (27,073) - - - (27,073) (26,004) (30,109) (35,119) (27,538)(118,770)
Other expenses/revenues R$ (2,192) - - - (2,192) (4,884) (12,191) (1,191) (11,243) (29,509)
Depreciation, amortization
and depletion R$ (1,046) - - - (1,046) (56) (54) (54) (3,472) (3,636)
-------------------------------------------------------------------------------------------
EBITDA ------------------> R$ 8,662 - - - 8,662 5,832 2,256 10,583 223 18,894
Depreciation, amortization
and depletion R$ 1,046 - - - 1,046 56 54 54 3,472 3,636
-------------------------------------------------------------------------------------------
EBIT --------------------> R$ 9,708 - - - 9,708 5,888 2,310 10,637 3,695 22,530
Gain on investments accounted
for by the equity method R$ 71 - - - 71 (93) (242) - (1,586) (1,921)
Non-operating result R$ (966) - - - (966) (164) (671) (871) (127) (1,833)
Net financial result R$ 1,220 - - - 1,220 (497) 1,030 (138) 3,123 3,518
-------------------------------------------------------------------------------------------
Income before income tax and
social contribution R$ 10,033 - - - 10,033 5,134 2,427 9,628 5,105 22,294
Income tax and social
contribution R$ - - - - - - (336) (2,484) 3,793 973
-------------------------------------------------------------------------------------------
Net income R$ 10,033 - - - 10,033 5,134 2,091 7,144 8,898 23,267
CVRD 51
(A free translation of the original opinion in Portuguese
expressed on quarterly
9- OPINION OF INDEPENDENT ACCOUNTANTS information prepared in accordance
with the accounting principles
prescribed by Brazilian
Corporate Law)
May 3, 2002
To the Board of Directors
Companhia Vale do Rio Doce
1 We have carried out limited reviews of the Quarterly Financial Information
- ITR of Companhia Vale do Rio Doce for the quarters ended March 31, 2002
and 2001. This financial information is the responsibility of the
Company's management.
2 Except as mentioned in paragraph three, our limited reviews were carried
out in accordance with the specific procedures established by the
Brazilian Institute of Accountants - IBRACON, in conjunction with the
Federal Accounting Board, and consisted mainly of: (a) inquires and
discussion with the officers responsible for the Company's accounting,
financial and operational areas about the procedures adopted for preparing
the Quarterly Financial Information - ITR, and (b) review of the
information and subsequent events which have, or may have, relevant
effects on the Company's financial position and operations.
3 The financial statements at March 31, 2002 and 2001, of subsidiary,
jointly-owned and associated companies, in which there are relevant
investments, have not been reviewed by independent accountants. Thus, the
conclusions resulting from our reviews do not cover the amounts of R$
6,088,805 thousand (2001 - R$ 6,322,860 thousand) of these investments and
R$ 284,115 thousand (2001 - R$ 308,169 thousand) of the income produced by
these investments for quarters then ended.
4 Based on our limited reviews, except for the effects of any adjustments
which might have been required if the financial statements of the
subsidiary, jointly-owned and associated companies mentioned in paragraph
3 had been reviewed by independent accountants, we are not aware of any
relevant adjustments which should be made to the Quarterly Financial
Information - ITR, referred to in paragraph 1, for it to be in accordance
with the rules issued by the Brazilian Securities Commission - CVM
specifically applicable to the preparation of obligatory Quarterly
Financial Information - ITR.
5 The Quarterly Financial Information - ITR also contains accounting and
financial information relating to the quarter ended December 31, 2001. We
examined this information at the time of its preparation, together with
the audit of the financial statements at that date, on which we expressed
our opinion, without qualification, dated March 22, 2002.
PricewaterhouseCoopers
Independent Accountants
CRC-SP-160-S-RJ
Douglas H. Woods
Partner
Accountant CRC-SP-101.652/O-0-S-RJ
CVRD
52
10- MEMBERS OF THE BOARD OF DIRECTORS, AUDIT COMMITTEE, CHIEF EXECUTIVE OFFICER
AND EXECUTIVE DIRECTORS
BOARD OF DIRECTORS Executive Director of Human Resources and
Luiz Tarquinio Sardinha Ferro Corporate Services
Chairman Carla Grasso
Erik Persson Marcus Roger
Director of Human Resources
Renato Augusto Zagallo Villela dos Santos
Gerson Petterle
Francisco Valadares Povoa Director of Supplies
Joao Moises Oliveira Adriana Ferreira
Director of Information Technology
Jose Marques de Lima Joao Luiz Fonseca
Director of Information Technology Development
Octavio Lopes Castello Branco Neto
Renato da Cruz Gomes Eustaquio Lott
VALIA
Romeu do Nascimento Teixeira
Executive Director of the Iron Ore Area
Audit Commitee Armando de Oliveira Santos Neto
Claudio Bernardo Guimaraes de Moraes
Eduardo Marcos de Barros Faria
Eliseu Martins Director of Commercialization
Marcos Fabio Coutinho Joaquim Martino Ferreira
Director of the Northern System
Pedro Carlos de Mello
Jose Francisco Martins
Viveiros Ricardo Wiering de Barros Director of the Southern System
Marconi Tarbes Vianna
Chief Executive Officer Director of Manganese and Alloys
Roger Agnelli
Director of Legal Affairs Executive Director of Logistics Area
Paulo Francisco de Almeida Lopes Guilherme Rodolfo Laager
Francisco Nuno
Executive Director of Control and Planning and Director of Operational Planning
Acting Executive Director of Finance
Gabriel Stoliar Jayme Nicolato Correa
Director of Operations
Otto de Souza Marques Junior
Director of Control Mauro Dias
Director of Commercialization
Tito Botelho Martins Junior Carlos Ebner
Director of Finance and Treasury Director of Logistics Business Development
Department
Eduardo Beauclair
Director of Strategic Planning and Budget
Orlando Lima
Director of Management Performance
Reinaldo Castanheira
Director of Investments' Performance
Rogerio Caporali
Director of Technical Services
CVRD 53
Executive Director of the Shareholdings Area and
Businesses Development and Acting Executive Director of
Non-Ferrous Area
Antonio Miguel Marques
Murilo Ferreira
Director of ALUVALE
Dalton Nose
Director of Development
Edward Dias da Silva
Director of Energy
Paulo Eduardo Libanio
Director of Basic Metals Projects
Helcio Roberto Martins Guerra
Director of Industrial Minerals and Basic Metals
Roberto Moretzsohn
Director of Commercialization of Basic Metal
Marcelo Bastos
Director of Carajas' Operations
Eduardo de Carvalho Duarte Otto de Souza Marques
Gerente Geral de Controladoria Diretor de Controle
Contador CRC-RJ 57439
CVRD
54
Item 2
COMPANHIA VALE DO RIO DOCE
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
Page
----
Report of PricewaterhouseCoopers Auditores Independentes................. F-2
Consolidated Balance Sheets as of March 31, 2002 and December 31, 2001... F-3
Consolidated Statements of Income for the Three-month periods
ended March 31, 2002 and 2001 ....................................... F-5
Consolidated Statements of Cash Flows for the Three-month periods
ended March 31, 2002 and 2001 ....................................... F-6
Consolidated Statements of Changes in Stockholders' Equity for
the Three-month periods ended March 31, 2002 and 2001................ F-7
Notes to the Consolidated Financial Information.......................... F-8
F-1
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors
and Stockholders of Companhia Vale do Rio Doce
We have reviewed the accompanying unaudited condensed consolidated balance
sheet of Companhia Vale do Rio Doce and subsidiaries as of March 31, 2002, and
the unaudited condensed consolidated statements of income and cash flows for
the three-month periods ended March 31, 2002 and 2001. These financial
statements are the responsibility of the Company's management. The unaudited
financial information of certain affiliates, the investments in which total
US$454 million at March 31, 2002 and equity in earnings total US$26 million and
US$17 million for the three-month periods then ended, and that of the
majority-owned shipping and ferrous alloy subsidiaries, which statements
reflect total assets of US$494 million at March 31, 2002 and total revenues of
US$71 million and US$127 million for the three-month periods then ended, were
reviewed by other independent accountants whose reports thereon have been
furnished to us.
We conducted our reviews in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures to
financial data and making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an audit conducted
in accordance with auditing standards generally accepted in the United States
of America, the objective of which is the expression of an opinion regarding
the financial statements taken as a whole. Accordingly, we do not express such
an opinion.
Based on our reviews, we are not aware of any material modifications that
should be made to the condensed consolidated interim financial statements
referred to above for them to be in conformity with accounting principles
generally accepted in the United States of America.
We have previously audited, in accordance with auditing standards generally
accepted in the United States of America, the consolidated balance sheet of
Companhia Vale do Rio Doce and subsidiaries as of December 31, 2001, and the
related consolidated statements of income, shareholders' equity, and cash flows
for the year then ended (not presented herein). In our report dated March 28,
2002, we expressed an unqualified opinion on those consolidated financial
statements. In our opinion, the information set forth in the accompanying
condensed consolidated balance sheet as of December 31, 2001, is fairly stated,
in all material respects, in relation to the consolidated balance sheet from
which it has been derived.
PricewaterhouseCoopers
Auditores Independentes
Rio de Janeiro, Brazil
May 8, 2002
F-2
Condensed Consolidated Balance Sheets
Expressed in millions of United States dollars
March 31, December
2002 31, 2001
--------- --------
(Unaudited)
Assets
Current assets
Cash and cash equivalents ........................ 2,008 1,117
Accounts receivable
Related parties ................................ 112 106
Unrelated parties .............................. 502 443
Loans and advances to related parties ............ 113 160
Inventories ...................................... 322 323
Deferred income tax .............................. 294 265
Others ........................................... 215 224
------ -----
3,566 2,638
Property, plant and equipment, net ................. 3,857 3,813
Investments in affiliated companies and
joint ventures and other investments ............. 1,245 1,227
Provision for losses on equity investments ......... (2) (9)
Goodwill on acquisition of consolidated subsidiaries 539 540
Loans and advances
Related parties .................................. 574 555
Unrelated parties ................................ 102 100
Other assets ....................................... 605 658
------ -----
TOTAL .............................................. 10,486 9,522
====== =====
F-3
Condensed Consolidated Balance Sheets
Expressed in millions of United States dollars
(Continued)
March 31, December
2002 31, 2001
--------- --------
(Unaudited)
Liabilities and stockholders' equity
Current liabilities
Suppliers ........................................ 287 296
Payroll and related charges ...................... 83 85
Interest attributed to stockholders .............. 476 340
Current portion of long-term debt
Related parties ................................ - 22
Unrelated parties .............................. 306 274
Short-term debt .................................. 931 589
Loans from related parties ....................... 147 168
Others ........................................... 134 147
------ ------
2,364 1,921
------ ------
Long-term liabilities
Employees postretirement benefits ................ 184 187
Long-term debt
Related parties ................................ - 156
Unrelated parties .............................. 2,549 2,014
Loans from related parties ....................... 2 21
Provisions for contingencies (Note 8) ............ 483 452
Unrealized loss on derivative instruments ........ 33 40
Others ........................................... 83 86
------ ------
3,334 2,956
------ ------
Minority interests ................................. 11 5
------ ------
Stockholders' equity
Preferred class A stock - 600,000,000
no-par-value shares authorized and
138,575,913 issued ............................. 820 820
Common stock - 300,000,000 no-par-value
shares authorized and 249,983,143 issued ....... 1,479 1,479
Treasury stock -4,751 (2001 - 91) preferred and
4,715,170 (2001 - 4,715,170) common shares ..... (88) (88)
Additional paid-in capital ....................... 498 498
Other cumulative comprehensive income ............ (3,467) (3,465)
Appropriated retained earnings 3,207 3,212
Unappropriated retained earnings ................. 2,328 2,184
------ ------
4,777 4,640
------ ------
TOTAL ............................................ 10,486 9,522
====== =====
F-4
Condensed Consolidated Statement of Operations
Expressed in millions of United States dollars
(except number of shares and per-share amounts)
Three moonths ended March 31
----------------------------
2002 2001
------- -------
Operating revenues, net of discounts, returns
and allowances
Iron ore and pellets ........................... 666 580
Gold ........................................... 34 28
Other metals ................................... 100 94
------- -------
800 702
Revenues from transportation services ............ 111 191
Aluminum products ................................ 68 83
Other products and services ...................... 8 29
------- -------
987 1,005
Value-added tax .................................. (34) (30)
------- -------
Net operating revenues ........................... 953 975
------- -------
Operating costs and expenses
Cost of ores and metals sold ..................... (407) (362)
Cost of transportation services .................. (59) (129)
Cost of aluminum products ........................ (65) (79)
Others ........................................... (6) (32)
------- -------
(537) (602)
Selling, general and administrative expenses ..... (59) (40)
Research and development ......................... (9) (10)
Employee profit sharing plan ..................... (9) (10)
Others ........................................... (46) (22)
------- -------
................................................... (660) (684)
------- -------
Operating income ................................... 293 291
------- -------
Non-operating income (expenses)
Financial income ................................. 33 48
Financial expenses ............................... (62) (84)
Foreign exchange and monetary gains (loss) ....... (3) (199)
Gain on sale of investments ...................... - 277
------- -------
(32) 42
------- -------
Income before income taxes, equity results
and minority interests ............................ 261 333
------- -------
Income taxes
Current .......................................... (7) (8)
Deferred ......................................... (12) 30
------- -------
................................................... (19) 22
------- -------
Equity in results of affiliates and joint ventures.. 29 7
Change in provision for losses on equity
investments ...................................... 5 (9)
Minority interests ................................. (1) 1
------- -------
Net income 275 354
======= =======
Basic earnings per Common and Preferred Class
A Share ........................................... 0.72 0.92
------- -------
Weighted average number of shares outstanding
(thousands of shares)
Common shares .................................... 245,268 249,983
Preferred Class A shares ......................... 138,575 134,917
See notes to consolidated financial information.
Condensed Consolidated BStatement of Cash Flows
Expressed in millions of United States dollars
Three months ended March 31
---------------------------
2002 2001
------- -------
Cash flows from operating activities:
Net income ......................................... 275 354
Adjustments to reconcile net income
with cash provided by operating activities:
Depreciation, depletion and amortization ......... 66 67
Equity in results of affiliates and joint ventures,
net of dividends received (4) 79
Change in provision for losses on equity
investments .................................... (5) 9
Deferred income taxes ............................ 12 (30)
Provisions for contingencies ..................... 23 18
Loss on disposals of property, plant and
equipment ...................................... 31 28
Gain on sale of investments ...................... -- (277)
Pension plan ..................................... 3 9
Foreign exchange and monetary (gains) losses ..... (1) 215
Others ........................................... (2) (4)
Decrease (increase) in assets:
Accounts receivable .............................. (66) (46)
Inventories ...................................... 1 --
Others ........................................... 9 111
Increase (decrease) in liabilities:
Suppliers ........................................ (9) 25
Payroll and related charges ...................... (2) (1)
Others ........................................... (16) (22)
----- -----
Net cash provided by operating activities ......... 315 535
----- -----
Cash flows from investing activities:
Loans and advances receivable
Related parties
Additions ..................................... (23) (57)
Repayments .................................... 3 60
Others .......................................... 1 --
Guarantees and deposits ......................... (10) (8)
Additions to investments ........................ (1) (27)
Additions to property, plant and equipment ...... (145) (114)
Proceeds from disposals of property, plant and
equipment ..................................... -- 1
----- -----
Net cash used in investing activities ........... (175) (145)
----- -----
Cash flows from financing activities:
Short-term debt, net issuances .................. 377 312
Loans
Related parties
Additions ................................... 12 11
Repayments .................................. (15) (15)
Long-term debt
Related parties ................................ 10 --
Others ......................................... 442 53
Repayments of long-term debt
Related parties ............................... (15) (14)
Others ........................................ (61) (73)
Interest attributed to stockholders .............. -- (639)
Treasury stock ................................... -- 1
----- -----
Net cash used in financing activities ............ 750 (364)
----- -----
Increase in cash and cash equivalents ............ 890 26
Effect of exchange rate changes on cash and cash
equivalents .................................... 1 (61)
Cash and cash equivalents, beginning of period ... 1,117 1,211
----- -----
Cash and cash equivalents, end of period ......... 2,008 1,176
===== =====
Cash paid during the period for:
Interest on short-term debt ...................... (6) (6)
Interest, net of interest capitalized of $5 in
2002 and $2 in 2001 .......................... (35) (49)
Income tax ...................................... -- (46)
Non-cash transactions
Special pension plan contribution in shares of
CSN ........................................... -- 249
Exchange of loans receivable for investments .... 20 35
See notes to consolidated financial information
F-6
Condensed Consolidated Statement of Changes in Stockholders' Equity
Expressed in millions of United States dollars
(except numbe rof shares and per-share amounts)
Three months
ended March 31
--------------------
2002 2001
---------- --------
Shares (Unaudited)
-----------
Preferred class A stock (including one special share)
Balance March 31, 2002 and 2001 .................. 138,575,913 820 709
----------- -------- -------
----------- -------- -------
Common stock
Balance March 31, 2002 and 2001 .................. 249,983,143 1,479 1,279
----------- -------- -------
Treasury stock
Balance January 1 ................................ (4,715,261) (88) (61)
Acquisitions in 2002 ............................. (4,660) -- 1
----------- -------- -------
Balance March 31, 2002 and 2001 .................. (4,719,921) (88) (60)
----------- -------- -------
Additional paid-in capital
Balance March 31, 2002 and 2001 .................. 498 498
Other cumulative comprehensive income
Amounts not recognized as net periodic pension cost
Balance January 1 ................................ -- (100)
Excess of additional minimum liability ........... -- 151
Tax effect on above .............................. -- (51)
-------- -------
Balance March 31, 2002 and 2001 .................. -- --
-------- -------
Cumulative translation adjustments
Balance January 1 ................................ (3,475) (2,972)
Change in the period ............................. (2) (380)
-------- -------
Balance March 31, 2002 and 2001 .................. (3,477) (3,352)
-------- -------
Unrealized gain on available-for-sale security
Balance January 1 ................................ -- 24
Change in the period ............................. -- 1
-------- -------
Balance March 31, 2002 and 2001 .................. -- 25
-------- -------
Adjustments relating to investments in affiliates
Balance January 1 ................................ 10 8
Change in the period ............................. -- 1
-------- -------
Balance March 31, 2002 and 2001 .................. 10 9
-------- -------
Total other cumulative comprehensive income ........ (3,467) (3,318)
-------- -------
Appropriated retained earnings
Balance January 1 ................................ 3,212 3,537
Transfer to retained earnings .................... (5) (338)
-------- -------
Balance March 31, 2002 and 2001 .................. 3,207 3,199
-------- -------
Retained earnings
Balance January 1 ................................ 2,184 1,647
Net income ..................................... 275 354
Interest attributed to stockholders
Preferred class A stock ($0.35 per share in
March 2002 and $0.40 in December 2001) ...... (49) (54)
Common stock ($0.35 per share in March 2002
and $0.40 in December 2001) .................. (87) (99)
Appropriation from reserves ..................... 5 338
-------- -------
Balance March 31, 2002 and 2001 ................... 2,328 2,186
----------- -------- -------
Total stockholders' equity ......................... 383,839,135 4,777 4,493
=========== ======== =======
Comprehensive income is comprised as follows:
Net income ....................................... 275 354
Amounts not recognized as net periodic pension cost -- 100
Cumulative translation adjustments ............... (2) (380)
Unrealized gain on available-for-sale security ... -- 1
Adjustments relating to investments in affiliates -- 1
-------- -------
Total comprehensive income ......................... 273 76
======== =======
See notes to consolidated financial information
F-7
Notes to the Condensed Consolidated Financial Information
Expressed in millions of United States dollars, unless otherwise stated
1 The Company and its operations
Companhia Vale do Rio Doce CVRD is a limited liability company, duly
organized and existing under the laws of the Federative Republic of
Brazil. Our operations are carried out through CVRD and its subsidiary
companies, joint ventures and affiliates, and mainly consist of mining,
non-ferrous metal production and logistics, as well as pulp and paper,
aluminum and steel activities. Further details of our operations and those
of our joint ventures and affiliates are described in Note 9.
The main consolidated operating subsidiaries are as follows:
Head office Principal
Subsidiary % ownership location activity
------------------------------------------ ----------- ----------- ---------------------
Ferteco Mineracao S.A. - FERTECO 100 Brazil Iron ore and pellets
Para Pigmentos S.A. 80 Brazil Kaolin
SIBRA - Eletrosiderurgica Brasileira S.A. 98 Brazil Ferrous alloys
Navegacao Vale do Rio Doce S.A. - DOCENAVE 100 Brazil Shipping
Vale do Rio Doce Aluminio S.A. - ALUVALE 100 Brazil Aluminum
Itabira Rio Doce Company Ltd. - ITACO 100 Cayman Island Trading
Rio Doce International Finance Ltd. - RDIF 100 Bahamas International finance
CELMAR S.A. - Industria de Celulose e Papel 85 Brazil Pulp
Florestas Rio Doce S.A. 100 Brazil Pulp
Rio Doce Manganese Europe - RDME 100 France Ferrous alloys
Urucum Mineracao S.A. 100 Brazil Iron ore
2 Basis of consolidation
All majority-owned subsidiaries where we have both share and management
control are consolidated with elimination of all significant intercompany
accounts and transactions. Investments in unconsolidated affiliates and
joint ventures are reported at cost less amortized goodwill plus our
equity in undistributed earnings or losses. Included in this category are
certain joint ventures in which we have majority ownership but, by force
of shareholders' agreements, do not have effective management control. We
provide for losses on equity investments with negative stockholders'
equity and for other than temporary decreases in market value below
carrying value where applicable.
3 Summary of significant accounting policies
Our condensed consolidated interim financial information as of March 31,
2002 and for the periods of three months ended March 31, 2002 and 2001 is
unaudited. However, in our management's opinion, such consolidated
financial information includes all adjustments, consisting only of normal
recurring adjustments, necessary for a fair presentation of the results
for interim periods. The results of operations for the three month period
ended March 31, 2002 are not necessarily indicative of the results to be
expected for the full fiscal year ending December 31, 2002.
This condensed interim financial information should be read in conjunction
with our consolidated financial statements for the year ended December 31,
2001.
4 Recently issued accounting pronouncement
In accordance with SFAS 142 "Goodwill and Other Intangible Assets", as
from January 1, 2002 (or immediately for acquisitions after June 30,
2001):
o Goodwill relative to consolidated subsidiaries is no longer
amortized, but is aggregated to reporting units and subject at least
annually to testing for impairment, considering the reporting unit as
a whole.
F-8
o Goodwill relative to affiliates and joint ventures is no longer
amortized but is allocated to the respective investment and included
in the measurement of the gain or loss on sale, or the loss arising
from an other than temporary decline in the value of the investment.
o Goodwill charged against earnings for the three months ended March
31, 2001 totaled $10 relating to subsidiaries and $3 relating to
equity investees which were classified as other operating expenses
and equity in results of affiliates and joint ventures, respectively.
SFAS 144 "Accounting for the Impairment or Disposal of Long-Lived Assets"
has been applied as from January 1, 2002 and the provisions thereof are
applied prospectively.
5 Income tax
Income taxes in Brazil comprise federal income tax and social
contribution, which is an additional federal tax. The statutory enacted
tax rates applicable in the periods presented are as follows:
Three months ended March 31 - %
-------------------------------
2002 2001
--------- --------------
Federal income tax 25.00 25.00
Social contribution (*) 9.00 9.00 to 12.00
--------- --------------
Composite tax rate 34.00 34.00 to 37.00
========= ==============
(*) From February 1, 2000 to December 31, 2002 the social contribution rate
is 9% and as from January 1, 2003 it will be 8%.
The amount reported as income tax benefit in this consolidated financial
information is reconciled to the statutory rates as follows:
Three months ended March 31
---------------------------
2002 2001
-------- --------
Income before income taxes, equity results and minority interests 261 333
======== ========
Federal income tax and social contribution expense at statutory
enacted rates ................................................. (89) (113)
Adjustments to derive effective tax rate:
Tax benefit on interest attributed to stockholders ............ 46 52
Exempt foreign income ......................................... 17 6
Tax incentives ................................................ 7 28
Valuation allowance reversal (provision) ...................... 9 18
Other non-taxable gains ....................................... (3) 9
Adjustment to reflect expected annual effective tax rate ...... (6) 22
-------- --------
Federal income tax and social contribution expense in
consolidated statements of income ............................. (19) 22
======== ========
In 2000, we obtained approval of certain tax incentives relative to our
iron ore and manganese operations in Carajas. The incentives comprise full
income tax exemption on defined production levels up to 2005 and partial
exemption up to 2013. An amount equal to the tax saving must be
appropriated to a reserve account within stockholders' equity and may not
be distributed in the form of cash dividends.
F-9
6 Inventories
March 31, December 31,
2002 2001
--------- ------------
Finished products
Iron ore ............................................ 94 110
Gold ................................................ 7 5
Manganese ........................................... 26 27
Ferrous alloys ...................................... 27 28
Others .............................................. 24 16
Spare parts and maintenance supplies ................ 144 137
--------- ------------
322 323
========= ============
7 Investments
Equity
March 31, 2002 Investments Adjustments
-------------------------------------------------------------------------
(1)Net Three months
income ended March
Participation loss 31,
in capital (1)Net for the March December --------------
(%) equity period 31, 2002 31, 2001 2002 2001
------------- ------ ------ -------- -------- ---- ----
voting total
------ -----
Investments in affiliated companies and joint
ventures
Steel
Usinas Siderurgicas de Minas Gerais S.A - .... 22.99 11.46 288 28 33 32 3 (2)
USIMINAS (2)
Companhia Siderurgica Nacional - CSN (3) ..... - - - - - - - 9
Companhia Siderurgica de Tubarao - CST (4) ... 20.51 22.85 48 (30) 11 18 (7) 1
California Steel Industries Inc. - CSI ....... 50.00 50.00 194 (2) 97 98 (1) (1)
Paper and pulp
Celulose Nipo-Brasileira S.A. - CENIBRA (3) .. - - - - - - - 6
Bahia-Sul Celulose S.A - BSC (3) ............. - - - - - - - 2
Aluminum and bauxite
Mineracao Rio do Norte S.A. - MRN ............ 40.00 40.00 364 9 145 154 4 6
Valesul Aluminio S.A. - VALESUL .............. 54.51 54.51 95 3 52 51 1 2
Aluminio Brasileiro S.A. - ALBRAS ............ 51.00 51.00 17 30 9 - 9 -
Alumina do Norte do Brasil S.A. - ALUNORTE ... 50.30 44.96 168 10 100 89 5 (10)
Pellets
Companhia Nipo-Brasileira de Pelotizacao -
NIBRASCO ................................... 51.11 51.00 31 (1) 16 16 (1) 1
Companhia Hispano-Brasileira de Pelotizacao -
HISPANOBRAS ................................ 51.00 50.89 36 3 18 18 1 2
Companhia Coreano Brasileira de Pelotizacao -
KOBRASCO ................................... 50.00 50.00 5 1 3 2 1 (3)
Companhia Italo-Brasileira de Pelotizacao -
ITABRASCO .................................. 51.00 50.90 27 1 14 13 1 3
Gulf Industrial Investment Company - GIIC 50.00 50.00 66 4 33 38 2 1
SAMARCO Mineracao S.A ........................ 50.00 50.00 454 22 269 258 11 1
Others
Fertilizantes Fosfaltados S.A. -
FOSFERTIL (5) ............................... 10.96 10.96 263 14 29 29 2 1
Caemi Mineracao e Metalurgia S.A ............. 50.00 16.82 398 5 289 289 1 -
Salobo Metais S.A (6) ........................ 50.00 50.00 44 - 22 22 -
Ferrovia Centro-Atlantica S.A - FCA .......... 20.00 45.65 - (6) - - (3) (10)
Others 69 62 - (2)
----- ----- ----- -----
1,209 1,189 29 7
Investments at cost
SIDERAR (market value $11 in 2002 and 2001) .. 4.85 4.85 15 15 -
Unrealized holding gains on equity security .. (4) (4) -
MRS Logistica S.A ............................ 17.19 9.76 25 22 -
Others ....................................... - 5 -
----- ----- ----- -----
1,245 1,227 29 7
===== ===== ===== =====
Change in provision for losses on equity
investments:
Aluminio Brasileiro S.A. - ALBRAS ............ 6 (3)
Cia Ferroviaia do Nordeste ................... (1) (6)
----- -----
5 (9)
===== =====
(1) Based on US GAAP financial information.
(2) Value based on quoted market price at March 31, 2002 is $36 compared to net book value of $33.
(3) Investments sold in 2001
(4) Value based on quoted market price at March 31, 2002 is $81 compared to net book value of $11.
(5) Value based on quoted market price at March 31, 2002 is $ 31 compared to net book value of $29.
(6) Development stage enterprise
F-10
Goodwill which is no longer amortized as from January 1, 2002 in
accordance with SFAS 142, included in the above investments is as follows:
March 31 December 31
Investee 2002 2001
-------- -----------
-----------------------------------------
Alumina do Norte do Brasil S.A. - ALUNORTE ...... 24 24
Samarco Mineracao S.A ........................... 41 41
Caemi Mineracao e Metalurgia S.A ................ 223 223
----- -----
288 288
===== =====
Information with respect to other major affiliates' financial position and
results of operations is as follows:
CAEM ALLNORTE ALBRAS MRN
------------------- ----------------------- ----------------------- -----------------------
March 31, December March 31, December 31, March 31, December 31, March 31, December 31,
2002 31, 2001 2002 2001 2002 2001 2002 2001
--------- -------- --------- ------------ --------- ------------ --------- ------------
Balance Sheet
Current assets ............ 385 398 123 159 163 158 59 55
Noncurrent assets ......... 724 729 554 509 510 510 459 425
Current liabilities ....... (303) (307) (86) (95) (207) (219) (33) (35)
Noncurrent liabilities .... (408) (427) (423) (431) (449) (463) (121) (59)
----- ----- ----- ----- ----- ----- ----- -----
Stockholders' equity ...... 398 393 168 142 17 (14) 364 386
===== ===== ===== ===== ===== ===== ===== =====
Our participation ........... 16.82% 16.82% 44.96% 45.58% 51.00% 51.00% 40.00% 40.00%
----- ----- ----- ----- ----- ----- ----- -----
Investments ................. 66 66 76 65 9 (7) 145 154
===== ===== ===== ===== ===== ===== ===== =====
Three months ended March 31
----------------------------------------------------------- -----------------------
CAEM ALLNORTE ALBRAS MRN
-------- ----------------------- ----------------------- -----------------------
2002 2002 2001 2002 2001 2002 2001
-------- --------- ------------ --------- ------------ --------- ------------
Statement of Operations
Net sales ......................... 163 69 74 115 137 32 42
Costs and expenses (149) (59) (102) (85) (146) (21) (22)
Income (loss) before income
taxes ........................... 14 10 (28) 30 (9) 11 20
Income taxes ...................... (9) 7 - 4 (1) (2)
Equity in results of affiliates ... - - - - - (1) (4)
----- ----- ----- ----- ----- ----- -----
Net income (loss) ................. 5 10 (21) 30 (5) 9 14
===== ===== ===== ===== ===== ===== =====
Our participation ................... 16.82% 44.96% 50.27% 51.00% 51.00% 40.00% 40.00%
Participation in results ............ 1 5 (10) 15 (3) 4 6
Change in provision for losses....... - - - (6) - - -
----- ----- ----- ----- ----- ----- -----
Equity in results .................. 1 5 (10) 9 (3) 4 6
===== ===== ===== ===== ===== ===== =====
The provision for losses on equity investments of $2 and $9 at March 31,
2002 and December 31, 2001, respectively, relates to our investments in
affiliates which have reported negative stockholders' equity in their
financial statements prepared in accordance with US GAAP and in
circumstances where we have assumed commitments to fund our share of the
accumulated losses, if necessary, through additional capital contributions
or other means. Accordingly we (a) first reduce the value of the
investment to zero and (b) subsequently provide for our portion of
negative equity. The provision is comprised as follows:
F-11
Cia
Ferroviaria
do Nordeste ALBRAS TOTAL
----------- ------ -----
Provision at January 1, 2001 (6) (15) (21)
Change in provision - results (6) (3) (9)
----------- ------ -----
(12) (18) (30)
Payment of capital 7 - 7
Translation adjustment 1 2 3
----------- ------ -----
Provision at March 31, 2001 (4) (16) (20)
=========== ====== =====
Provision at January 1, 2002 (2) (7) (9)
Change in provision - results (1) 6 5
----------- ------ -----
(3) (1) (4)
Payment of capital 1 - 1
Translation adjustment - 1 1
----------- ------ -----
Provision at March 31, 2002 (2) - (2)
=========== ====== =====
Dividends received from investees aggregated $25 and $86 in three month
periods ended March 31, 2002 and 2001, respectively.
8 Commitments and contingencies
(a) At March 31, 2002, we had extended guarantees for borrowings obtained by
affiliates and joint ventures in the amount of $703, of which $485 is
denominated in United States dollars and the remaining $218 in local
currency. These guarantees include $357 relative to ALBRAS and $72
relative to ALUNORTE.
(b) We are defendants in numerous legal actions in the normal course of
business. Based on the advice of our legal counsel, management believes
that the provision made against contingent losses is sufficient to cover
probable losses in connection with such actions.
The provision for contingencies and the related judicial deposits are
composed as follows:
March 31, 2002 December 31, 2001
------------------------ -------------------------
Provision for Judicial Provision for Judicial
contingencies deposits contingencies deposits
------------- -------- ------------- --------
Labor claims 152 50 147 50
Civil claims 118 55 123 53
Tax - related actions 207 139 177 131
Others 6 2 5 1
--- --- --- ---
483 246 452 235
=== === === ===
Current - - - -
Long-term 483 246 452 235
--- --- --- ---
483 246 452 235
=== === === ===
Labor -related actions principally comprise employee claims for (i)
payment of time spent travelling from their residences to the work-place,
(ii) additional payments for alleged dangerous or unhealthy working
conditions and (iii) various other matters, often in connection with
disputes about the amount of indemnities paid upon dismissal.
Civil actions principally relate to claims made against us by contractors
in connection with losses alleged to have been incurred by them as a
result of various past government economic plans during which full
indexation of contracts for inflation was not permitted.
Tax-related actions principally comprise our challenges of changes in
basis of calculation and rates of certain revenue taxes and of the tax on
financial movements - CPMF.
We continue to vigorously pursue our interests in all the above actions
but recognize that probably we
F-12
will incur some losses in the final instance, for which we have made
provisions.
Our judicial deposits are made as required by the courts for us to be able
to enter or continue a legal action. When judgment is favorable to us, we
receive the deposits back; when unfavorable, the deposits are delivered to
the prevailing party.
Contingencies settled in the three months period ended March 31, 2002 and
2001 aggregated $5 and $ 2, respectively, and additional provisions
aggregated $23 and $18 in the three months periods ended March 31, 2002
and 2001, respectively.
(c) We are defendants in two actions seeking substantial compensatory damages
brought by the Municipality of Itabira, State of Minas Gerais, which we
believe are without merit. Due to the remote likelihood that any loss will
arise therefrom no provision has been made in the financial statements
with respect to these two actions.
(d) We are committed under a take-or-pay agreement to take delivery of
approximately 207,000 metric tons per year of aluminum from ALBRAS at
market prices. This estimate is based on 51% of ALBRAS expected production
and, at a market price of $1,421.00 per metric ton at March 31, 2002,
represents an annual commitment of $294. We are also committed to
take-or-pay 537,272 metric tons per year of alumina produced by ALUNORTE
which at a market price of $172.21 per metric ton at March 31, 2002,
represents an annual commitment of $93. Actual take from ALBRAS was $60
and $69 during the three month periods ended March 31, 2002 and 2001,
respectively, and direct from ALUNORTE (net of take ceded to ALBRAS) was
$5 and $8 during the three month periods ended March 31, 2002 and 2001
respectively.
(e) We and BNDES entered into a contract, known as the Mineral Risk Contract,
in March 1997, relating to prospecting authorizations for mining regions
where drilling and exploration are still in their early stages. The
Mineral Risk Contract provides for the joint development of certain
unexplored mineral deposits in approximately two million identified
hectares of land in the Carajas region, as well as proportional
participation in any financial benefits earned from the development of
such resources. Iron ore and manganese deposits already identified and
subject to development are specifically excluded from the Mineral Risk
Contract.
(f) At the time of our privatization in 1997, we issued shareholder revenue
interests known in Brazil as "debentures" to our then-existing
shareholders, including the Brazilian Government. The terms of the
"debentures", which are more fully described in our consolidated financial
statements for the year ended December 31, 2001, were set to ensure that
our pre-privatization shareholders, including the Brazilian Government,
would participate alongside us in potential future financial benefits that
we are able to derive from exploiting our mineral resources.
(g) At March 31, 2002 we have provided $27 for environmental liabilities. Such
provisions relate to site restoration at mines already closed or which are
expected to be closed in the next two years.
We use various judgments and assumptions when measuring our environmental
liabilities. Changes in circumstances, law or technology may affect our
estimates and we periodically review the amounts accrued and adjust them
as necessary. Our accruals do not reflect unasserted claims because we are
currently not aware of any such issues. Also the amounts provided are not
reduced by any potential recoveries under cost sharing, insurance or
indemnification arrangements because such recoveries are considered
uncertain.
F-13
9 Segment and geographical information
Consolidated net income and principal assets are reconciled as follows:
2001
-------------------------------------------------------------------------------
Holdings
-----------------------
Pulp
Non and
Ferrous ferrous Logistic paper Aluminum Steel Eliminations Consolidated
------- ------- -------- ----- -------- ----- ------------ ------------
RESULTS
Revenues - Export ........... 949 44 10 - 68 - (377) 694
Revenues - Domestic ......... 216 17 81 1 - - (22) 293
Cost and expenses ........... (856) (48) (55) - (62) - 392 (629)
Interest revenue ............ 41 - 3 - 1 - (12) 33
Interest expense ............ (70) (2) (1) - - (1) 12 (62)
Depreciation ................ (53) (6) (6) (1) - - - (66)
Pension plan ................ (3) - - - - - - (3)
Equity ...................... 17 - (3) - 25 (5) - 34
Income taxes ................ (17) - (1) - (1) - - (19)
----- ---- ---- ----- ---- ---- ----- -----
Net income .................. 224 5 28 - 31 (6) (7) 275
===== ==== ==== ==== ==== ==== ===== =====
Sales classified by geographic destination:
Export market
Latin America ............... 64 - 5 - 7 - (25) 51
United States ............... 89 13 3 - - - (40) 65
Europe ...................... 393 29 2 - 61 - (143) 342
Middle East ................. 43 - - - - - (4) 39
Japan ....................... 113 1 - - - - (52) 62
Asia, other than Japan ...... 247 1 - - - - (113) 135
----- ---- ---- ----- ---- ---- ----- -----
949 44 10 - 68 - (377) 694
Domestic market ............. 216 17 81 1 - - (22) 293
----- ---- ---- ----- ---- ---- ----- -----
1,165 61 91 1 68 - (399) 987
===== ==== ==== ==== ==== ==== ===== =====
Assets :
Property, plant and equipment,
net ....................... 3,196 287 280 94 - - - 3,857
Capital expenditures ........ 130 3 9 3 - - - 145
Investments in affiliated
companies and joint ventures
and other investments,
net provision for ......... 718 28 39 - 306 152 - 1,243
===== ==== ==== ==== ==== ==== ===== =====
losses
Capital employed ............ 2,619 293 285 50 (13) 24 413 3,671
NOPLT ....................... 241 6 56 - 5 - (7) 301
ROCE ........................ 9% 2% 20% - - - - 8%
F-14
2002
----------------------------------------------------------------------------------
Holdings
--------------------------
Pulp
Non and
Ferrous ferrous Logistic paper Aluminum Steel Eliminations Consolidated
------- ------- -------- ----- -------- ----- ------------ ------------
RESULTS
Revenues - Export ........... 780 41 59 20 84 - (306) 678
Revenues - Domestic ......... 251 19 95 4 - - (42) 327
Cost and expenses ........... (921) (53) (112) 147(1) (77) 109(2) 348 (559)
Interest revenue ............ 49 - 1 1 2 - (5) 48
Interest expense ............ (83) (3) (2) - - (1) 5 (84)
Depreciation ................ (53) (5) (7) (2) - - - (67)
Pension plan ................ (7) (1) (1) - - - - (9)
Equity and provision for
losses .................... 7 - (19) 8 (5) 7 - (2)
Income taxes 20 - - - 2 - - 22
----- ---- ---- ---- ----- ---- ----- -----
Net income .................. 43 (2) 14 178 6 115 - 354
===== ==== ==== ==== ===== ==== ===== =====
Sales classified by geographic destination:
Export market
Latin America ............... 53 - - - 8 - (21) 40
United States ............... 53 28 27 14 16 - (22) 116
Europe ...................... 300 5 22 6 48 - (103) 278
Middle East ................. 37 6 2 - - - (2) 43
Japan ....................... 131 1 5 - 12 - (64) 85
Asia, other than Japan ...... 206 1 3 - - - (94) 116
----- ---- ---- ---- ----- ---- ----- -----
780 41 59 20 84 - (306) 678
Domestic market ............. 251 19 95 4 - - (42) 327
----- ---- ---- ---- ----- ---- ----- -----
1,031 60 154 24 84 - (348) 1,005
===== ==== ==== ==== ===== ==== ===== =====
Assets :
Property, plant and
equipment, net ............ 2,849 292 356 135 - - - 3,632
Capital expenditures ........ 99 14 1 - - - - 114
Investments in affiliated
companies and joint
ventures and other
investments, net provision
for losses ................ 479 28 164 184 240 207 - 1,302
===== ==== ==== ==== ===== ==== ===== =====
Capital employed 2,778 275 352 142 (11) (1) 14 3,549
NOPLT 334 12 37 5 9 - - 397
ROCE 12% 4% 11% 4% - - - 11%
(1) - Includes $170 profit on sale of Bahia - BSC Sul Celulose S.A.
(2) - Includes $107 profit on sale of Companhia Siderurgica Nacional - CSN
For more information on segments see the segment disclosures
included in our consolidated financial statements for the year ended December
31, 2001.
10 Derivative financial instruments
Volatility of interest rates, exchange rates and commodity prices are the
main market risks to which we are exposed - all three are managed through
derivative operations. These have the exclusive aim of reducing exposure
to risk. We do not use derivatives for speculation purposes.
We monitor and evaluate our derivative positions on a regular basis and
adjust our strategy in response to market conditions. We also periodically
review the credit limits and credit worthiness of our counter-parties in
these transactions. In view of the policies and practices established for
operations with derivatives, management considers the occurrence of
non-measurable risk situations as unlikely.
F-15
As from January 1, 2001 we adopted SFAS 133 "Accounting for Derivative
Financial Instruments and Hedging Activities", as amended by SFAS 137 and
SFAS 138, and began to recognize all derivatives on our balance sheet at
fair value. Accordingly we recognized an initial transition adjustment of
$3 as a charge in our statement of income relative to net unrealized
losses on contracts open as of December 31, 2000. Subsequently to January
1, 2001 all derivatives have been adjusted to fair market value at each
balance sheet date and the change included in current earnings.
For the three month periods ended March 31, 2002 and 2001 the movement of
unrealized and realized gains or losses on derivative financial
instruments is as follows:
Net Gains (losses)
------------------------------------------
Interest
Gold rates (libor) Currencies Total
---- ------------- ---------- -----
Initial unrealized gains and losses at January 1, 2001 ..... 9 (8) (4) (3)
Change in the period ....................................... 10 (13) (4) (7)
(Gains) and losses realized in the period .................. (3) 1 1 (1)
---- ---- ---- ----
Unrealized gains and (losses) at March 31, 2001 ............ 16 (20) (7) (11)
==== ==== ==== ====
Unrealized gains and losses at January 1, 2002 ............. 7 (36) (4) (33)
Change in the period ....................................... (10) 18 (2) 6
(Gains) and losses realized in the period .................. 1 (7) - (6)
---- ---- ---- ----
Unrealized gains and (losses) at March 31, 2002 ............ (2) (25) (6) (33)
==== ==== ==== ====
Realized and unrealized gains and losses are included in our income statement
under the following captions:
Gold - other operating costs and expenses;
Interest rates - financial expenses;
Currencies - foreign exchange and monetary losses, net.
Final maturity dates for the above instruments are as follows:
Gold ....................................................... December 2005
Interest rates (libor) ..................................... October 2007
Currencies ................................................. April 2005
(a) Interest Rate and Exchange Rate Risk
Interest rate risks mainly relate to that part of the debt borrowed at
floating rates. The foreign currency debt is largely subject to
fluctuations in the London Interbank Offered Rate - LIBOR. That portion of
local currency denominated debt that is subject to floating rates is
linked to the Long Term Interest Rate - TJLP, fixed quarterly by the
Brazilian Central Bank. Since May 1998, we have used derivative
instruments to protect overselves against fluctuations in the LIBOR rate.
There is an exchange rate risk associated with our foreign currency
denominated debt. On the other hand, a substantial proportion of our
revenues are denominated in, or automatically indexed to, the U.S. dollar,
while the majority of costs are expressed in reais. This provides a
natural hedge against any devaluation of the Brazilian real against the
U.S. dollar. When events of this nature occur, the immediate negative
impact on foreign currency denominated debt is offset over time by the
positive effect of devaluation on future cash flows.
With the advent of a floating exchange rate regime in Brazil in January
1999, we adopted a strategy of monitoring market fluctuations, using
derivatives to protect against specific risks from exchange rate
F-16
variation. From time to time we enter into foreign exchange derivative
swap transactions seeking to change the characteristics of our
real-denominated cash investments to US dollar-indexed instruments. The
extent of such transactions depends on our perception of market and
currency risk, but is never speculative in nature. All such operations are
marked-to-market at each balance sheet date and the effect included in
financial income or expense. During the three months ended March 31, 2002
and 2001 our use of such instruments was not significant.
(b) Commodity Price Risk
We also use derivative instruments to manage exposure to changing gold
prices. Derivatives allow the fixing of an average minimum profit level
for future gold production. However, they may also have the effect of
eliminating potential gains on certain price increases in the spot market
for gold. We manage our contract positions actively, and the results are
reviewed at least monthly, allowing adjustments to targets and strategy to
be made in response to changing market conditions.
In the case of gold derivatives, our policy has been to settle all
contracts through cash payments or receipts, without physical delivery of
product.
Our affiliates Albras and Alunorte manage the risk of fluctuating aluminum
prices using derivatives, allowing an average minimum profit level for
future production and ensuring stable cash generation. However, they may
also have the effect of eliminating potential gains on certain price
increases in the spot market for aluminum. We account for both affiliates
using the equity method.
In December 2000, we introduced a new risk management system to evaluate,
measure and manage the market risk associated with our financial
activities, using the value-at-risk - VAR method. VAR incorporates a
variety of risk factors which affect our results, including commodity
prices, interest and exchange rate volatilities, as well as the
correlation between all these variables.
11 Long-term Debt
On March 8, 2002, we issued $300 of 8.625% Enhanced Guaranteed Notes due
March 8, 2007.
In March 2002, the BNDES sold shares it held in CVRD and at March 31,2002
was no longer considered a related party.
12 Subsequent events
(a) On May 8, 2002 we signed a purchase agreement to acquire the remaining 50%
of Salobo Metais S.A.'s outstanding common stock for $51. The
acquisition is still subject to the implementation of the usual conditions
in this type of transaction.
(b) On April 29, 2002 an increase in capital of $235, without issue of new
shares, was approved by the shareholders as a result of a transfer from
appropriated retained earnings.
F-17
Item 3
logo BR GAAP logo Companhia
Vale do Rio Doce
BOVESPA: vale3, vale5,
NYSE: RIO, RIOPR
LATIBEX: XVALO, XVALP
www.cvrd.com.br
CVRD
Investor Relations:
Roberto Castello Branco
Andreia Reis
Daniela Tinoco
Barbara Geluda
Rafael Azevedo
Tel: (5521) 3814-4540
rio@cvrd.com.br
Press Release 1Q02
COMPANHIA VALE DO RIO DOCE
FIRST QUARTER PERFORMANCE IN 2002
The results of CVRD reported in this press release refer to the Parent Company
only and were calculated according to general accepted accounting principles in
Brazil (Brazilian GAAP).
Rio de Janeiro, May 15, 2002 - For the first quarter of 2002, Companhia Vale do
Rio Doce (CVRD) has presented a very solid performance, reporting net earnings
of R$ 738 million. Net earnings including exceptional non recurrent items as
provisions for losses on equity investments, was R$ 633 million, the equivalent
of R$ 1.65 per share.
Gross operating revenues totalled R$ 1.601 billion and cash generation, as
measured by EBITDA (earnings before interest, tax, depreciation and
amortization), amounted to R$ 728 million. EBITDA margin, the ratio between
EBITDA and net revenue, was 47.2%, confirming CVRD's capacity for converting
revenues into operating profit and reflecting its operational excellence. These
results were obtained in a scenario of appreciation of the Brazilian real
against the US dollar and were not positively affected by non recurrent items,
as capital gains from asset sales. The exchange rate volatility contributed
negatively to the revenue, EBITDA and net income generation.
This is the first time that CVRD releases consolidated quarterly financial
information in US GAAP. The US GAAP figures are being released simultaneously
to Parent Company's quarterly financial statements in Brazilian GAAP.
Consolidated adjusted net earnings, according to the US GAAP method, amounted
to US$ 304 million, and EBITDA totaled US$ 444 million.
Sales volume of iron ore and pellets in the Parent Company amounted to 33.663
million tons, almost the same as 4Q01, despite an unfavourable seasonal effect,
as the first quarter use to be the weaker quarter of the year. Consolidated
sales reached 38.019 million tons.
Capital expenditures reached US$ 157.6 million. Investment in greenfield (Sao
Luis, Sossego, and hydroelectric power plants) and brownfield projects ( Gongo
Soco iron ore mine, Taquari-Vassouras potash mine, and pier III at Ponta da
Madeira port) amounted to US$ 81.1 million. The expected rate of return on
these projects are much than the Company's weighted average cost of
capital. Therefore, they will contribute in the near future to shareholder
value creation.
1
2
RELEVANT EVENTS
On the completion of CVRD's global offering of common shares belonging to the
Brazilian Federal Government and the BNDES, a US$ 1.9 billion transaction,
the Company's capital free float has risen to 58.5%. CVRD's common shares began
trading on the New York Stock Exchange (NYSE) on March 21, 2002, as ADRs level
III, with ticker symbol RIO. As consequence of this successful deal, there was
a surge in liquidity of CVRD shares traded on BOVESPA and NYSE.
In March, CVRD successfully completed a US$ 300 million 5-year bond issue with
a spread of 455 basis points over US Treasuries. Despite the rise seen over the
last few weeks in the Emerging Market Bond Index Brazil (EMBI Brazil), which
reflects Brazilian sovereign debt spreads, bonds issued by CVRD continue to
trade above their initial issue price, reflecting the confidence of capital
markets in the Company's solid financial situation.
The construction works for development of the Sossego copper mine started
this quarter. Sossego is expected to be commissioned in 2004 to produce 140,000
tons of copper concentrate and 3 tons of gold per year.
In May, CVRD acquired the stake owned by Anglo American plc in Salobo Metais
for US$ 50.9 million, so obtaining full ownership of the company. The
pre-feasibility study for the Salobo copper project is due to be completed by
the end of 2002.
The Sao Luis pellet plant was inaugurated in March and has a nominal production
capacity of 6 million tpy. The plant is still in the experimental operational
phase and is expected to begin commercial production in June this year, being a
new cash generation source for the Company.
CVRD has signed a co-operation agreement with Nucor, the largest steelworks in
the US, with a view to jointly exploiting opportunities in the production of
metallics.
SHORT TERM PROSPECTS
There are growing indications of the start of a synchronized global recovery,
with the exception of Japan, although it is expected to be lower than the
recovery seen in 1999.
In the USA, Europe and Emerging Asia, leading indicators of economic activity,
growing consumer and business confidence levels and the behavior of industrial
output, all suggest that global economic conditions are on the road to
recovery, which will have positive implications for ore and metal demand. In
Brazil's case, despite the fact that economic recovery is proceeding more
slowly than previously predicted, there is no doubt that it is nonetheless
happening.
Global production of crude steel, as reported by the International Iron and
Steel Institute (IISI), increased by 2.1% in 1Q02 compared to the same period
in the previous year. The most notable growth was seen in Asia, where
production expanded by 10.7%, more than compensating for the cutback in other
regions, such as the European Union (- 5%) and North America (- 4.8%).
Production in China was up by a substantial 26%, Taiwan 6.8%, and South Korea
2.9%, while production in Japan was down by 3.1%.
In 1Q02, imports by China, totaling 23.8 million tons, were up 21.9% yoy,
helping to sustain strong demand for iron ore.
Signs of recovery in the demand for pellets began to appear earlier than
expected, leading CVRD to alter its original production plans for 2002.
Basically, it will no longer be necessary to shut down production at the
Company's pellet plants over the next quarters to avoid accumulation of
inventories, even with the Sao Luis pellet plant coming fully on stream in June
this year.
3
The US Geological Survey leading indicator of non ferrous metals prices, which
usually anticipates commodity prices three quarters ahead, has been showing
rises in recent months, despite the growth in inventory levels. As a matter of
fact, metals prices area already recovering since November 2001, but a stronger
recovery is expected to take place in 2H02.
Persistently low nominal interest rates have led gold prices to appreciate
significantly, and these are expected to remain around US$ 300 per troy ounce
for the short term.
SALES VOLUME AND REVENUES
Iron ore and pellet sales volume in 1Q02, despite the seasonality, which
usually means that the first quarter is the weakest for the year, was very
high. The Parent Company sold 33.663 million tons of iron ore and pellets,
exceeding the volume sold in 1Q01 by 11.6% and practically the same as that
sold in the previous quarter - 33.815 million tons. Parent Company sales volume
covers its shipments of iron ore and pellets, including the sale of pellet feed
to the pelletizing joint ventures (Nibrasco, Itabrasco, Hispanobras and
Kobrasco).
Sales of ore fines accounted for 80.3% of iron ore and pellets shipments, lumps
10%, and pellets 9.7%. In the quarter, the Parent Company acquired 1.769
million tons of pellets from the pelletizing joint ventures, compared to 2.729
million in 4Q01.
Consolidated sales volumes of iron ore and pellets amounted to 38.019 million
tons compared to 38.660 million tons in 4Q01 and 33.066 million tons in 1Q01.
These sales affect the results of the Parent Company either directly or
indirectly through equity income.
CONSOLIDATED SALES OF IRON ORE AND PELLETS
thousand tons
--------------------------------------
Iron Ore 1Q 01 4Q 01 1Q 02
---------- ---------- ----------
Parent Company 21,394 25,294 25,787
Samitri* 3,657 -- --
Samarco * 195 272 336
Urucum * 162 186 233
Ferteco * -- 3,639 2,503
MBR * -- -- 1,384
QCM * -- -- 68
---------- ---------- ----------
Total 25,408 29,391 30,311
========== ========== ==========
Pellets 1Q 01 4Q 01 1Q 02
---------- ---------- ----------
Parent Company + JVs 5,816 5,626 5,279
Samarco * 1,470 1,121 1,315
Ferteco * -- 2,130 619
GIIC * 372 392 412
QCM * -- -- 83
Total 7,658 9,269 7,708
---------- ---------- ----------
Total 33,066 38,660 38,019
========== ========== ==========
* sales attributed in proportion to size of stake held by CVRD
JVs: Nibrasco, Itabrasco, Hispanobras and Kobrasco
Samitri: acquired on May 30, 2000 and consolidated into CVRD on October 1, 2001
Samarco: acquired on May 30, 2000
GIIC: acquired on October 9, 2000
Ferteco: acquired on April 27, 2001
MBR and QCM: Caemi acquired on December 07, 2001
4
If we were to disregard the volume attributed to CVRD's stake in Caemi -
Mineracoes Brasileiras Reunidas (MBR) and Quebec Cartier Mining Company (QCM) -
whose acquisition was concluded in December 2001, the volume shipped amounted
to 36.484 million tons, up 10.3% in relation to 1Q01 and 5.6% lower than in
4Q01. The fall in volume shipped in 1Q02 compared to 4Q01, of 2.176 million
tons, is explained by the 2.647 million ton drop in Ferteco's sales. The Parent
Company, together with all the other subsidiaries and affiliates, as shown in
the table above, presented a higher sales volumes compared to 4Q01.
Some 85% of iron ore and pellets shipments were exported. Sales of iron ore
amounted to 30.311 million tons, while sales of pellets totalled 7.708 million
tons.
Sales of manganese ore by subsidiaries Sibra and Urucum, amounted to 345,200
tons, compared to 306,700 tons in 4Q01. Shipments to international markets
accounted for 88.2% of sales in 1Q02. Sales of ferro-alloys, by Sibra, CPFL,
RDME and Urucum, totaled 96,700 tons, down 3.4% on 4Q01.
Sales of gold amounted to 115,400 ounces in 1Q02, compared to 141,100 in 4Q01
and 108,300 in 1Q01.
General cargo (products other than iron ore and pellets) transported by
railroad, measured in net ton kilometres (ntk), amounted to 5.2 billion ntk
(Vitoria a Minas 2.7 billion ntk, Carajas 665 million ntk and Centro-Atlantica
1.8 billion ntk). This performance was practically the same as in 4Q01 and 5.4%
higher than 1Q01. General cargo handling in the ports and maritime terminals of
CVRD was 12.7% down compared to 4Q01, but 9.1% higher than in 1Q01.
GENERAL CARGO RAILROAD TRANSPORTATION
million ntk
--------------------------------
1Q 01 4Q 01 1Q 02
----- ----- -----
EF Vitoria a Minas 2,643 2,791 2,737
EF Carajas 356 423 665
----- ----- -----
Total Parent Company 2,999 3,214 3,402
===== ===== =====
Ferrovia Centro Atlantica 1,962 1,993 1,829
----- ----- -----
Total 4,961 5,207 5,231
===== ===== =====
The end of power rationing resulted in a recovery in alumina and aluminum
sales. Alunorte sold 439,000 tons of alumina in 1Q02, up 8.4% in relation to
the previous quarter and up 20.9% on 1Q01. Albras shipped 88,000 tons in 1Q02,
25.7% more than in 4Q01. Sales of Valesul amounted to 21,000 tons, compared to
16,000 tons in 4Q01.
Gross operating revenues amounted to R$ 1.601 billion, 82.8% of which was
either denominated in, or linked to, the US dollar. Exports accounted for 62.8%
of sales. Besides the Brazilian market, the main markets for CVRD's products
were Europe (25.9%) and Asia (23.7%).
Due to growing exports of iron ore to China, which were up 29.4% in relation to
4Q01 and 41.9% compared to 1Q01, the percentage of Parent Company revenue from
sales to that country of 9.7% exceeded that to Japan, 7.7%. In volume terms, in
1Q02 China accounted for 13% of pellets and iron ore sales, compared to Japan's
11%, Germany's 10% and South Korea's 6%.
Iron ore sales rose as a percentage of total revenue, from 59.2% in 4Q01 to
61.8% in 1Q02. Pellet sales accounted for 15.4% of total revenues, while
transportation represented 14.3%.
5
GROSS REVENUE - PARENT COMPANY
million R$
------------------------------------------------------
1Q 01 % 4Q 01 % 1Q 02 %
----- ---- ----- ---- ----- ----
Iron Ore 759 55,2 1.071 59,2 989 61,8
Pellets 235 17,1 305 16,9 246 15,4
Gold 57 4,1 99 5,5 80 5,0
Railroads 210 15,3 210 11,6 188 11,7
Ports 50 3,6 60 3,3 42 2,6
Potash 38 2,8 34 1,9 38 2,4
Others 26 1,9 31 1,6 18 1,1
----- ---- ----- ---- ----- ----
Total 1.375 100 1.810 100 1.601 100
===== ==== ===== ==== ===== ====
EARNINGS STABILITY
Net earnings on 1Q02, excluding non recurrent exceptional items, was R$ 738
million. Such items, amounting to R$ 76 million, include provisions for losses
on equity investments (Docepar - R$ 56 million, FCA - R$ 37 million,
Valepontocom - R$ 15 million) and the reversion of provision for contingencies
(R$ 32 million).
1Q02 earnings were negatively affected by the volatility of the Real/US dollar
exchange rate, through its impact on net operating revenues and monetary
variation.
Net earnings including non recurrent exceptional items was R$ 633 million, in
line with the R$ 639 million reached on 4Q01.
The results from subsidiaries and affiliates were up by R$ 92 million,
contributing R$ 152 million to quarterly earnings. Iron ore and pellets
companies generated a R$ 151 million contribution to earnings, manganese and
ferro-alloys contributed R$ 20 million, and aluminum, R$ 65 million, despite
the fact that aluminum average prices on the London Metal Exchange remained
below US$ 1,400 per ton. Transportation companies contributed with a R$ 76
million loss, mainly because of provisions for tax contingencies made in
Docepar.
RESULTS OF EQUITY INVESTMENTS - BY BUSINESS AREA
million R$
--------------------------------
Business Area 1Q 01 4Q 01 1Q 02
------------- ----- ----- -----
Ferrous Minerals
Iron Ore and Pellets 103 10 151
Manganese and Ferro-Alloys (19) 16 20
Non-Ferrous Minerals (4) 47 5
Transportation 37 (31) (76)
Steel 169 (90) (9)
Pulp and Paper / Fertilizers 5 (109) 11
Aluminum 17 239 65
Others -- (22) (15)
--- -- ---
Total 308 60 152
=== == ===
The cost of goods sold (COGS), of R$ 852 million, was R$ 64 million lower in
relation to 4Q01, due mainly to the R$ 52 million drop in the cost of pellet
purchases and a R$ 14 million drop in the price of fuel oil and gas.
6
COST OF GOODS SOLD
million R$
------------------------------------------------------
1Q 01 % 4Q 01 % 1Q 02 %
----- ---- ----- ---- ----- ----
Personnel 97 13.8 127 13.9 123 14.4
Materials 92 13.0 116 12.7 114 13.4
Fuel 74 10.5 94 10.3 80 9.4
Electrical Energy 18 2.6 29 3.2 27 3.2
Outsourced Services 95 13.5 137 15.0 128 15.0
Acquisition of Products 168 23.8 195 21.3 143 16.8
Depreciation and Depletion 115 16.3 154 16.8 173 20.3
Others 46 6.5 64 7.0 64 7.5
----- ----- ---- ---- ---- ----
Total 705 100 916 100 852 100
===== ===== ==== ==== ==== ====
Operational expenses were reduced by a significant R$ 215 million in 1Q02,
compared with 4Q01. As well as a cut in operational expenses of R$ 178 million,
sales & administrative expenses, and research & development costs were also
down.
Monetary variation, reflecting the difference in the exchange rate between the
end of 4Q01 and the end of 1Q02, amounted to R$ 443 million and net operating
revenues decreased R$ 201 million.
EBITDA OF R$ 728 MILLION
EBITDA generated in 1Q02 amounted to R$ 728 million, 9.5% lower than the R$ 804
million reported in 4Q01. Fluctuations in quarterly EBITDA tended to reflect
the volatility in the Brazilian real/US dollar exchange rate. Average Real/US
dollar exchange rate has moved from R$ 2.5187/USD in 4Q01 to R$ 2.3801/USD in
1Q02.
The drop in net operating revenues of R$ 201 million, driven by the
appreciation in the Brazilian real against the US dollar, was the main reason
for the drop in EBITDA, compared with the previous quarter.
Dividends received from subsidiaries and affiliates amounted to R$ 38 million,
and non-cash adjustments for non-recurrent exceptional items amounted to R$ 45
million.
Ferrous minerals accounted for 85% of EBITDA in the Parent Company, logistics
10% and non-ferrous minerals (gold and potash) 5%.
INVESTMENTS
Investments carried out in the first quarter of 2002 amounted to US$ 157.6
million. The US$ 81.1 million spent on projects accounted for 51.5% of this
sum.
Disbursements on projects in the iron ore area amounted to US$ 43.6 million.
US$ 15.5 million was invested in the construction of the Sao Luis pellet plant,
US$ 14.3 million on the infrastructure needed for its operation, and US$ 10.7
million on iron ore logistics (locomotives, pier III at the port of Ponta da
Madeira and enlargement of the stock yards).
Investments in hydroelectric power plants absorbed US$ 22.3 million: US$ 13.8
million on Aimores, US$ 4.3 million on Candonga, US$ 3.5 million on Funil and
the remainder on other projects still in the development phase where
construction has yet to begin (Capim Branco I & II and Foz do Chapeco).
7
Logistics projects required investments of US$ 10 million, while production
expansion of the potash mine absorbed US$ 1.6 million.
US$ 3.4 million of capital was injected into Mineracao Serra do Sossego to
finance the development of the copper mine.
Investments in mineral prospecting amounted to US$ 5 million, while US$ 3.8
million was spent on information technology and US$ 2.6 million on
environmental protection measures.
CAPITAL EXPENDITURES - 1Q 02
By Business Area US$ million % By Category US$ million %
------------------- ----------- ------ ---------------------- ----------- ------
Ferrous Minerals 104.7 66.4% Equity Investments 3.1 2.0%
Transportation 13.7 8.7% Maintenance 60.7 38.5%
Non Ferrous Minerals 12.2 7.7% Projects 81.1 51.5%
Energy 22.7 14.4% Mineral Exploration 5.0 3.2%
Others 4.4 2.8% Environmental Protection 2.6 1.7%
Information Technology 3.8 2.4%
Technological Research 1.3 0.9%
----- ----- ----- -----
Total 157.6 100.0% Total 157.6 100.0%
===== ===== ===== =====
8
SELECTED FINANCIAL INDICATORS
million R$
-----------------------------------
1Q 01 4Q 01 1Q 02
------- ------- -------
Gross Revenues 1,375 1,809 1,601
Gross Margin (%) 46.6 48.9 44.8
Net Income * 660 639 633
Net Income per Share (R$)* 1.71 1.66 1.65
EBITDA 689 804 728
EBITDA Margin (%) 52.2 46.1 47.2
ROE annualized (%) 24.2 25.9 21.0
Gross Debt (US$ million) 2,172 2,000 2,566
Net Debt (US$ million) 1,550 1,722 1,648
Exports (US$ million) 382 428 427
Investments (US$ million) ** 101 243 158
* net earnings including the effect of exceptional items, non recurrent
** not included acquisitions
NET INCOME
million R$
----------
1Q 02
-----
Excluding Exceptional Non Recurrent Items 738
Including Exceptional Non Recurrent Items 633
9
FINANCIAL STATEMENT
million R$
-----------------------------------
1Q 01 4Q 01 1Q 02
---------- ---------- ----------
Gross Operating Revenues 1,375 1,809 1,601
Value Added Tax (54) (64) (57)
---------- ---------- ----------
Net Operating Revenues 1,321 1,745 1,544
---------- ---------- ----------
Cost of Goods Sold (705) (916) (852)
Gross Income 616 854 692
Gross Margin (%) 46.6 48.9 44.8
---------- ---------- ----------
Result of Investment Participation 308 60 152
---------- ---------- ----------
Equity Income 298 150 284
Goodwill Amortization (26) (89) (66)
Provision for Losses 25 (1) (67)
Others 11 0 1
---------- ---------- ----------
Operating Expenses (185) (407) (192)
---------- ---------- ----------
Selling (25) (33) (28)
General & Administrative (56) (123) (99)
Research and Development (20) (30) (22)
Others (84) (221) (43)
Financial Results (388) 385 (50)
Financial Expenses (96) (95) (106)
Financial Revenues 39 13 32
Monetary Variation (331) 467 24
---------- ---------- ----------
Operating Income 351 867 602
---------- ---------- ----------
Discontinued Operations 242 -- --
Income Taxes 67 (228) 31
---------- ---------- ----------
Net Income* 660 639 633
---------- ---------- ----------
Net Income per Share (R$)* 1.71 1.66 1.65
========== ========== ==========
* net earnings including the effect of exceptional items, non recurrent
BALANCE SHEET
million R$
--------------------------------------
1Q 01 4Q 01 1Q 02
---------- ---------- ----------
Assets
Current Assets 4,673 3,990 4,986
Long Term Assets 1,989 2,506 2,562
Permanent Assets 13,134 15,928 16,283
---------- ---------- ----------
Total 19,796 22,425 23,831
---------- ---------- ----------
Liabilities and Stockholders' Equity
Current Liabilities 3,244 3,623 4,649
Long Term Liabilities 5,654 7,036 7,099
Shareholders' Equity 10,898 11,767 12,083
Capital 3,000 4,000 4,000
Reserves 7,898 7,767 8,083
---------- ---------- ----------
Total 19,796 22,425 23,831
========== ========== ==========
10
SALES VOLUMES - PARENT COMPANY
thousand tons
--------------------------------------
IRON ORE AND PELLETS 1Q 01 4Q 01 1Q 02
---------- ---------- ----------
Foreign Market 20,418 24,154 24,479
---------- ---------- ----------
Southern System 7,978 11,548 13,628
---------- ---------- ----------
Fines 4,379 7,672 10,409
Lump 554 843 656
Pellets 3,045 3,033 2,563
Northern System 12,440 12,606 10,851
---------- ---------- ----------
Fines 11,450 11,299 9,746
Lump 990 1,307 1,105
Domestic Market 9,757 9,661 9,184
---------- ---------- ----------
Southern System 8,504 8,751 8,296
---------- ---------- ----------
Fines 7,218 6,956 6,651
Lump 702 996 924
Pellets 584 799 721
Northern System 1,253 910 888
---------- ---------- ----------
Fines 465 117 210
Lump 788 793 678
Iron Ore 26,546 29,983 30,379
---------- ---------- ----------
Fines 23,512 26,044 27,016
Lump 3,034 3,939 3,363
---------- ---------- ----------
Pellets 3,629 3,832 3,284
---------- ---------- ----------
Total 30,175 33,815 33,663
========== ========== ==========
OTHER PRODUCTS AND SERVICES 1Q 01 4Q 01 1Q 02
---------- ---------- ----------
Gold (Kg) 3,367 4,390 3,591
---------- ---------- ----------
Foreign Market 3,367 4,390 3,591
Domestic Market -- --
Manganese 161 202 --
---------- ---------- ----------
Foreign Market 77 77 --
Domestic Market 84 125 --
Potash 133 95 113
---------- ---------- ----------
Transportation Services 25,966 20,204 18,775
---------- ---------- ----------
Railroads 16,611 13,640 13,258
---------- ---------- ----------
Southern System 15,223 12,078 11,574
Northern System 1,388 1,562 1,684
---------- ---------- ----------
Port Services 9,355 6,564 5,517
---------- ---------- ----------
Southern System 8,940 5,974 4,745
Northern System 415 590 772
11
IRON ORE AND PELLETS SALES - PARENT COMPANY
million tons
--------------------------------------
FOREIGN MARKET 1Q 01 4Q 01 1Q 02
---------- ---------- ----------
ASIA
China 3.1 3.4 4.4
South Korea 1.5 1.3 2.1
Philippines 0.4 0.5 0.6
Japan 4.3 4.4 3.7
Taiwan 0.8 0.6 0.4
Others 0.1 0.6 --
---------- ---------- ----------
Total 10.2 10.8 11.2
---------- ---------- ----------
EUROPE
Germany 2.2 2.9 3.4
Spain 0.6 1.0 0.8
France 0.6 1.1 1.3
Italy 1.2 1.4 1.0
United Kingdom 0.4 0.5 0.7
Others 2.0 3.4 2.9
---------- ---------- ----------
Total 7.0 10.3 10.1
---------- ---------- ----------
AMERICAS
Argentina 0.5 0.5 0.4
United States 0.9 0.6 0.9
Others 0.3 0.2 0.3
---------- ---------- ----------
Total 1.7 1.3 1.6
---------- ---------- ----------
AFRICA/MIDDLE EAST /
AUSTRALASIA
Bahrain 0.3 0.3 0.8
Others 1.2 1.4 0.8
---------- ---------- ----------
Total 1.5 1.7 1.6
---------- ---------- ----------
TOTAL 20.4 24.1 24.5
========== ========== ==========
DOMESTIC MARKET 1Q 01 4Q 01 1Q 02
---------- ---------- ----------
Steel Mills 4.8 5.3 5.1
Affiliated Pelletizing
Companies 5.0 4.4 4.0
---------- ---------- ----------
Total 9.8 9.7 9.1
---------- ---------- ----------
TOTAL 30.2 33.8 33.6
========== ========== ==========
ORIGIN 1Q 01 4Q 01 1Q 02
---------- ---------- ----------
Northern System 13.7 13.5 11.7
Southern System 16.5 20.3 21.9
---------- ---------- ----------
TOTAL 30.2 33.8 33.6
========== ========== ==========
AVERAGE PRICE OF IRON ORE AND PELLETS
US$/ton
--------------------------------------
DESTINATION 1Q 01 4Q 01 1Q 02
---------- ---------- ----------
Iron Ore - Foreign Market 15.03 14.69 14.51
Iron Ore - Domestic Market 12.53 12.28 11.64
Pellets 29.21 29.17 28.81
12
EQUITY INCOME
million R$
--------------------------------------------
COMPANY/PARTICIPATION % 1Q 01 4Q 01 1Q 02
------ ------ ------ ------
DOCENAVE 100.00 39 (29) 17
ALUVALE 94.74 8 222 62
FLORESTAS RIO DOCE 99.85 1 2 3
RDE 99.80 74 (55) 34
ITACO 99.99 77 (133) 72
DOCEGEO 99.99 -- -- --
RDI 100.00 -- (1) --
TACUMA (FCA) 100.00 -- -- --
URUCUM 100.00 2 (5) 8
TERM.VILA VELHA 99.89 -- 1 --
NORPEL 99.90 -- 1 1
PARA PIGMENTOS 75.50 -- -- 5
SAMITRI 100.00 9 -- --
VALEPONTOCOM 100.00 -- -- (16)
SIBRA 99.21 (6) 51 33
ZAGAIA (FERTECO) 100.00 -- 50 29
BELEM 99.99 -- 9 2
KSG 99.99 -- 1 --
CELMAR 85.00 -- (56) --
BRASAMERICAN LIMITED 99.70 -- (2) 1
BRASILUX 100.00 -- (2) --
------ ------ ------
Total from SUBSIDIARIES 204 54 251
------ ------ ------
MSG 51.00 1 -- 1
CST 22.85 (12) 27 (3)
NIBRASCO 51.00 2 2 (2)
FOSFERTIL 10.96 1 8 4
HISPANOBRAS 50.89 3 2 3
ITABRASCO 50.90 1 2 1
NOVA ERA SILICON 49.00 -- 2 1
USIMINAS 11.46 -- (2) 1
KOBRASCO 50.00 (6) 7 2
FERROBAN 18.74 (4) (11) (4)
CSN -- 108 -- --
SAMARCO 50.00 -- 59 29
------ ------ ------
Total from AFFILIATES 94 96 33
====== ====== ======
Total from EQUITY INCOME 298 150 284
====== ====== ======
% 1Q 01 4Q 01 1Q 02
------ ------ ------ ------
PROVISION FOR LOSSES
VALEPONTOCOM 100.00 -- (18) --
KOBRASCO 50.00 -- 19 --
CIA.FERROV.NORDESTE 30.00 -- -- (2)
DOCEPAR 100.00 25 -- (59)
FCA 45.65 -- 11 (6)
PARA PIGMENTOS 75.50 -- 46 --
CELMAR 85.00 -- (59) --
------ ------ ------
Total from PROVISION FOR LOSSES 25 -- (67)
====== ====== ======
13
COMPANY/PARTICIPATION % 1Q 01 4Q 01 1Q 02
------ ------ ------ ------
GOODWILL AMORTIZATION
FCA 45.65 -- (9) (31)
GIIC 50.00 -- -- --
PARA PIGMENTOS 75.50 (4) -- --
RDME 100.00 -- (9) --
CPFL 91.87 -- (3) (1)
SIBRA 99.21 (20) (19) (19)
USIMINAS 11.46 (2) (49) --
CAEMI 16.82 -- -- (13)
BELEM 99.99 -- -- (2)
Total from GOODWILL AMORTIZATION (26) (89) (66)
Gain on assets disposal and dividends 11 1 1
------ ------ ------
Total 308 60 152
====== ====== ======
EQUITY PARTICIPATION ON DOCENAVE % 1Q 01 4Q 01 1Q 02
------ ------ ------ ------
NAVEDOCE/Seamar 100.00 7 (12) --
Own operations 100.00 -- 55 15
NAVEDOCE/Seamar
(G/L Foreign Exchange) 100.00 32 (73) 2
------ ------ ------
Total Docenave 39 (30) 17
====== ====== ======
EQUITY PARTICIPATION ON ALUVALE % 1Q 01 4Q 01 1Q 02
------ ------ ------ ------
ALUNORTE 45.58 (21) 65 5
MRN 40.00 15 40 10
ALBRAS 51.00 (1) 112 39
VALESUL 54.51 4 4 3
Equity on Alunorte -- 1 1
Own operations 11 12 7
------ ------ ------
Total Aluvale 8 234 65
====== ====== ======
14
EQUITY INCOME ON ITACO % 1Q 01 4Q 01 1Q 02
US$ million ------ ------ ------ ------
CSI 50.00 (1) -- --
RDL 100.00 1 1 2
RDA 100.00 -- -- --
RDME 100.00 (2) 4 (1)
CSN Aceros 62.50 -- (1) --
Caemi 16.82 -- -- 3
Aluvale 5.26 -- 5 1
GIIC 50.00 1 2 2
CVRD Overseas 100.00 5 11 10
Quadrem 9.00 -- (2) --
Own operations 6 57 13
G/L Exchange 25 (111) 1
------ ------ ------
Total Itaco 35 (34) 31
====== ====== ======
EQUIVALENCIA NA ZAGAIA % 1Q 01 4Q 01 1Q 02
------ ------ ------ ------
Ferteco 100.00 -- 42 29
MRS 10.48 -- 8 --
------ ------ ------
Total Zagaia 0 50 29
====== ====== ======
15
IRON ORE AND PELLETS - FINANCIAL INDICATORS - NON AUDITED
million R$
-------- -------- -------
HISPANOBRAS 1Q 01 4Q 01 1Q 02
-------- -------- -------
Sales (thousand tons) 832 998 907
Foreign Market 312 148 487
Domestic Market 520 850 420
Average Price (US$/ton) 30.65 31.12 31.38
Net Operating Revenues 52 79 67
Cost of Goods Sold (45) (64) (58)
Financial Results 2 (5) 1
Net Earnings 6 4 5
Gross Margin (%) 13.5 19.0 13.4
EBITDA 9 14 11
EBITDA Margin (%) 17.3 17.7 16.4
NIBRASCO 1T 01 4T 01 1T 02
-------- -------- -------
Sales (thousand tons) 2,010 1,371 1,000
Foreign Market 806 432 407
Domestic Market 1,204 939 593
Average Price (US$/ton) 30.31 27.90 30.39
Net Operating Revenues 123 99 71
Cost of Goods Sold (107) (88) (70)
Financial Results 1 0 (2)
Net Earnings 3 7 (4)
Gross Margin (%) 13.0 11.1 1.4
EBITDA 9 17 5
EBITDA Margin (%) 7.3 17.2 7.0
ITABRASCO 1T 01 4T 01 1T 02
-------- -------- -------
Sales (thousand tons) 775 995 877
Foreign Market 497 700 644
Domestic Market 278 295 233
Average Price (US$/ton) 31.19 31.90 31.35
Net Operating Revenues 49 80 66
Cost of Goods Sold (46) (60) (57)
Financial Results 3 (6) (1)
Net Earnings 2 4 2
Gross Margin (%) 6.1 25.0 13.6
EBITDA 2 16 8
EBITDA Margin (%) 4.1 20.0 12.1
16
IRON ORE AND PELLETS - FINANCIAL INDICATORS - NON AUDITED
million R$
------------------------------------
KOBRASCO 1Q 01 4Q 01 1Q 02
-------- -------- -------
Sales (thousand tons) 981 1,068 856
Foreign Market 561 558 436
Domestic Market 420 510 420
Average Price (US$/ton) 30.79 31.20 31.69
Net Operating Revenues 61 85 64
Cost of Goods Sold (47) (67) (50)
Financial Results (32) 41 (4)
Net Earnings (12) 53 3
Gross Margin (%) 23.0 21.2 21.9
EBITDA 16 19 15
EBITDA Margin (%) 26.2 22.4 23.4
Net Debt (in US$ million)
- Short Term -- -- --
- Long Term 128 129 150
-------- -------- -------
Total 128 129 150
======== ======== =======
SAMARCO 1T 01 4T 01 1T 02
-------- -------- -------
Sales (thousand tons) 3,399 2,571 3,301
Average Price (US$/ton) 28.83 29.55 28.48
Net Operating Revenues 198 208 213
Cost of Goods Sold (96) (103) (109)
Financial Results (64) 51 (15)
Net Earnings 8 117 58
Gross Margin (%) 51.5 50.5 48.8
EBITDA 93 91 93
EBITDA Margin (%) 47.0 43.8 43.7
Net Debt (in US$ million)
- Short Term 170 167 154
- Long Term 127 109 93
-------- -------- -------
Total 297 276 247
======== ======== =======
FERTECO 1T 01 4T 01 1T 02
-------- -------- -------
Sales (thousand tons) n.a 4,352 3,259
Foreign Market n.a 3,653 2,470
Domestic Market n.a 699 789
Average Price (US$/ton) n.a 16.83 15.96
Net Operating Revenues n.a 187 127
Cost of Goods Sold n.a (139) (85)
Financial Results n.a (7) (5)
Net Earnings n.a 58 29
Gross Margin (%) n.a 25.7 33.1
EBITDA n.a 57 52
EBITDA Margin (%) n.a 30.5 40.9
Net Debt (in US$ million)
- Short Term n.a 52 28
- Long Term n.a 94 94
-------- -------- -------
Total n.a 146 122
======== ======== =======
17
IRON ORE AND PELLETS - FINANCIAL INDICATORS - NON AUDITED
million R$
------------------------------------
GIIC* 1Q 01 4Q 01 1Q 02
-------- -------- -------
Sales (thousand tons) 744 785 823
Net Operating Revenues 28,561 29,031 34,372
Cost of Goods Sold (26,112) (23,004) (29,486)
Gross Profit 2,449 6,027 4,886
Other Income 610 244 112
S G & A (1,163) (1,284) (1,102)
Net Income 1,896 4,987 3,896
* financial indicators according to IASC (International Accounting Standards
Committee)
ITACO 1Q 01 4Q 01 1Q 02
-------- -------- -------
Sales (thousand tons)
Iron Ore 10,213 14,254 14,266
Pellets 2,128 1,727 1,800
Manganese 275 342 246
Bauxite 265 283 140
Alumina 36 57 33
Aluminum 43 32 43
Net Operating Revenues 344,642 381,037 390,094
Cost of Goods Sold (322,102) (342,010) (346,965)
Equity Income 8,025 19,833 16,744
Net Income 10,055 81,692 24,743
EBITDA 33,453 26,799 37,493
18
MANGANESE AND FERRO-ALLOYS - FINANCIAL INDICATORS - NON AUDITED
million R$
------------------------------------
SIBRA 1Q 01 4Q 01 1Q 02
-------- -------- -------
Sales - Ferro-alloys (thousand tons) 25 91 29
Foreign Market 10 10 10
Domestic Market 15 81 19
Average Price (US$/ton) 582.53 314.01 445.67
Sales - Manganese (thousand tons) 211 314 278
Foreign Market 189 288 242
Domestic Market 22 26 36
Average Price (US$/ton) 41.74 49.38 55.11
Net Operating Revenues 45 104 62
Cost of Goods Sold (29) (64) (32)
Financial Results (5) (14) (2)
Net Earnings (6) 49 34
Gross Margin (%) 35.6 38.5 48.4
EBITDA (5) 47 26
EBITDA Margin (%) (11.1) 45.2 41.9
Net Debt (in US$ million)
- Short Term 33 24 18
- Long Term 41 24 24
-------- -------- -------
Total 74 48 42
======== ======== =======
CPFL 1Q 01 4Q 01 1Q 02
-------- -------- -------
Sales (thousand tons) 34 56 37
Foreign Market 18 13 13
Domestic Market 16 43 24
Average Price (US$/ton) 533.34 338.37 517.01
Net Operating Revenues 38 42 39
Cost of Goods Sold (26) (28) (27)
Financial Results 0 3 1
Net Earnings 5 9 10
Gross Margin (%) 31.6 33.3 30.8
EBITDA 6 0 9
EBITDA Margin (%) 15.8 -- 23.1
Net Debt (in US$ million)
- Short Term 12 6 2
- Long Term -- -- --
-------- -------- -------
Total 12 6 2
======== ======== =======
19
ALUMINUM - SELECTED FINANCIAL INDICATORS - ADJUSTED AND NON AUDITED
million R$
------------------------------------
MRN 1Q 01 4Q 01 1Q 02
-------- -------- --------
Sales (thousand tons) 2,185 3,175 1,781
Foreign Market 581 992 485
Domestic Market 1,604 2,183 1,296
Average Price (US$/ton) 21.39 21.67 19.46
Net Operating Revenues 87 154 76
Cost of Goods Sold (38) (65) (40)
Financial Results -- (4) (2)
Net Earnings 37 100 24
Gross Margin (%) 56.1 57.8 47.4
EBITDA 58 99 36
-------- -------- --------
EBITDA Margin (%) 67.0 64.3 47.4
-------- -------- --------
ALUNORTE 1Q 01 4Q 01 1Q 02
Sales (thousand tons) 363 405 427
Foreign Market 170 232 222
Domestic Market 193 173 205
Average Price (US$/ton) 198.83 167.23 161.55
Net Operating Revenues 150 172 165
Cost of Goods Sold (107) (140) (136)
Financial Results (98) 126 (11)
Net Earnings (43) 139 10
Gross Margin (%) 28.7 18.6 17.6
EBITDA 51 37 35
EBITDA Margin (%) 34.0 21.5 21.2
Net Debt (in US$ million)
- Short Term -- -- (60)
- Long Term 405 425 455
-------- -------- --------
Total 405 425 395
======== ======== ========
ALBRAS 1Q 01 4Q 01 1Q 02
-------- -------- --------
Sales (thousand tons) 90 70 88
Foreign Market 87 66 84
Domestic Market 3 4 4
Average Price (US$/ton) 1,532.90 1,282.77 1,319.81
Net Operating Revenues 277 232 274
Cost of Goods Sold (162) (147) 171
Financial Results (119) 222 (11)
Net Earnings (1) 220 76
Gross Margin (%) 41.5 36.6 162.4
EBITDA 122 90 106
EBITDA Margin (%) 44.0 38.8 38.7
Net Debt (in US$ million)
- Short Term 130 141 30
- Long Term 528 450 524
-------- -------- --------
Total 658 591 554
======== ======== ========
20
ALUMINUM - SELECTED FINANCIAL INDICATORS - ADJUSTED AND NON AUDITED
million R$
------------------------------------
VALESUL 1Q 01 4Q 01 1Q 02
------- -------- -------- --------
Sales (thousand tons) 16 16 21
Foreign Market 2 5 9
Domestic Market 14 11 12
Average Price (US$/ton) 2,107.06 1,757.16 1,720.97
Net Operating Revenues 60 67 78
Cost of Goods Sold (41) (50) (64)
Financial Results (3) (1) (1)
Net Earnings 8 7 6
Gross Margin (%) 31.5 25.4 17.9
EBITDA 17 14 14
EBITDA Margin (%) 28.5 20.9 17.9
Net Debt (in US$ million)
- Short Term 33 1 1
- Long Term 3 2 2
------- -------- -------- --------
Total 36 3 3
======== ======== ========
================================================================================
"This press release may contain statements that express management's
expectations about future events or results rather than historical facts. These
forward-looking statements involve risks and uncertainties that could cause
actual results to differ materially from those projected in forward-looking
statements, and CVRD cannot give assurance that such statements will prove
correct. These risks and uncertainties include factors: relating to the
Brazilian economy and securities markets, which exhibit volatility and can be
adversely affected by developments in other countries; relating to the iron ore
business and its dependence on the global steel industry, which is cyclical in
nature; and relating to the highly competitive industries in which CVRD
operates. For additional information on factors that could cause CVRD's actual
results to differ from expectations reflected in forward-looking statements,
please see CVRD's reports filed with the Comissao de Valores Mobiliarios and
the U.S. Securities and Exchange."
Item 4
logo BR GAAP logo Companhia
Vale do Rio Doce
BOVESPA: vale3, vale5,
NYSE: RIO, RIOPR
LATIBEX: XVALO, XVALP
www.cvrd.com.br
CVRD
Investor Relations:
Roberto Castello Branco
Andreia Reis
Daniela Tinoco
Barbara Geluda
Rafael Azevedo
Tel: (5521) 3814-4540
rio@cvrd.com.br
Press Release 1Q02
COMPANHIA VALE DO RIO DOCE
FIRST QUARTER PERFORMANCE IN 2002
The financial and operational information contained in this press release,
except whether otherwise indicated, is based on consolidated figures, according
to generally accepted accounting principles in the United Sates of America ("US
GAAP"). The main subsidiaries of CVRD which form part of these consolidated
figures are: RDME, Sibra, Ferteco, Urucum Mineracao, Para Pigmentos, Docenave,
Aluvale, Florestas Rio Doce, Celmar, Rio Doce Europa, Itaco and CVRD Overseas.
Rio de Janeiro, May 15, 2002 - For the first quarter of 2002, Companhia Vale do
Rio Doce (CVRD) has presented a very solid performance. Net earnings, excluding
non-recurrent exceptional items, was US$ 304 million. Net earnings, including
non-recurrent exceptional items, was US$ 275 million.
Gross revenues totaled US$ 987 million and cash generation, as measured by
EBITDA (earnings before interest, taxes, depreciation and amortization),
amounted to US$ 444 million. EBITDA margin, the ratio between EBITDA and net
revenue s, amounted to 46.6%, confirming CVRD's capacity for converting
revenues into operating profit, given its operational excellence.
These results were obtained against the background of an appreciating Real -
against the US dollar - which had an unfavourable influence on the behaviour of
revenues, EBITDA and net earnings. At the same time, earnings were not boosted
by any non-recurring factors, such as capital gains derived from the sale of
assets.
As of March 31, 2002, the Company's cash holdings amounted to US$ 2.008
billion, net debt being US$ 1.778 billion. Net debt was equal to 1.03 times
last twelve months EBITDA.
Iron ore and pellet shipments in the first quarter amounted to 38.019 million
tons.
Capital expenditure by the Parent Company totalled US$ 157.6 million.
Investment in greenfield (Sao Luis, Sossego, and hydroelectric power plants)
and brownfield projects (Gongo Soco iron ore mine, Taquari-Vassouras potash
mine, and port facilities) amounted to US$ 81.1 million.
1
2
RELEVANT EVENTS
On the completion of the global offering of CVRD's common shares belonging
to the Brazilian Federal Government and the BNDES, a US$ 1.9 billion
transaction, the Company's capital free float rose to 58.5%, 69% of this being
held by foreign investors. CVRD's common shares began trading on the New York
Stock Exchange (NYSE) on March 21, 2002, in the form of ADRs level III, ticker
code RIO. As consequence of this successful deal, there was a surge in
liquidity of CVRD shares traded on Bovespa and NYSE.
In March, CVRD successfully completed a US$ 300 million 5-year bond issue with
a spread of 455 basis points over US Treasuries . Despite the rise seen over
the last few weeks in the Emerging Market Bond Index Brazil (EMBI Brazil),
which reflects Brazilian sovereign debt spreads, bonds issued by CVRD continue
to trade above their initial issue price, reflecting the confidence of capital
markets in the Company's solid financial situation.
The Sao Luis pellet plant was inaugurated in March and has a production
capacity of 6 million tpy. The plant is still in the experimental operational
phase, expected to begin commercial production in June this year, thus
constituting a new cash generation platform for the Company.
The construction works for development of the Sossego copper mine started this
quarter. Sossego is expected to be commissioned in 2004 to produce 140,000 tons
of copper concentrate and 3 tons of gold per year.
In May, CVRD acquired the stake owned by Anglo American plc in Salobo Metais
for US$ 50.9 million, so obtaining full ownership of the company. The
pre-feasibility study for the Salobo copper project is due to be completed by
the end of 2002.
CVRD has signed a co-operation agreement with Nucor, the largest steelworks in
the US, with a view to jointly exploiting opportunities in the production of
metallics.
SHORT TERM PROSPECTS
There are growing indications of the start of a synchronized global recovery,
with the exception of Japan, although it is expected to be slower than the
recovery seen in 1999.
In the USA, Europe and Emerging Asia, leading indicators of economic activity,
growing consumer and business confidence levels and the behavior of industrial
output, all suggest that the global economy is on the road to recovery, which
will have positive implications for ore and metal demand. In Brazil's case,
despite the fact that economic recovery is proceeding more slowly than
previously predicted, there is no doubt that it is nonetheless happening.
Global production of crude steel, as reported by the International Iron and
Steel Institute (IISI), increased by 2.1% in 1Q02 compared to the same period
in the previous year. The most notable growth was seen in Asia, where
production expanded by 10.7%, more than compensating for the cutback in other
regions, such as the European Union (-5%) and North America (-4.8%). Production
in China was up by a substantial 26%, Taiwan 6.8%, and South Korea 2.9%, while
production in Japan was down by 3.1%.
1Q02 imports by China, totalled 23.8 million tons, and were up 21.9% yoy ,
helping to sustain the strong demand for iron ore.
Signs of recovery in the demand for pellets began to appear earlier than
expected, leading CVRD to alter its original production plans for 2002.
Basically, it will no longer be necessary to shut down production at the
Company's pellet plants over the next quarters to prevent accumulation of
inventories, even with the Sao Luis pellet plant coming fully on stream from
the beginning of June this year.
The US Geological Survey leading indicator of non ferrous metals prices, which
usually anticipates commodity prices three quarters ahead, has been showing
rises in recent months, despite the growth in inventory levels. As a matter of
fact, metals prices are already recovering since November 2001, but a stronger
recovery is expected to take place in 2H02.
Persistently low nominal interest rates have led gold prices to appreciate
significantly, and these are expected to remain around US$ 300 per troy ounce
for the short term.
SALES VOLUME AND REVENUES
Iron ore and pellet sales volume in 1Q02, counting the shipments of CVRD, its
subsidiaries and affiliates, excluding inter-company transactions , such as the
sale of pellet feed to the pellet joint ventures (Nibrasco, Itabrasco,
Hispanobras, Kobrasco), amounted to 38.019 million tons in 1Q02. They were 15%
higher yoy and 1.7% lower qoq. These sales affect the results of the Company
either directly, or indirectly through equity income.
CONSOLIDATED SALES OF IRON ORE AND PELLETS
thousand tons
-------------------------------------------------------------------------------
Iron Ore 1Q 01 4Q 01 1Q 02
-------------------------------------------------------------------------------
Parent Company 21,394 25,294 25,787
Samitri 3,657 - -
Samarco * 195 272 336
Urucum * 162 186 233
Ferteco * - 3.639 2.503
MBR * - - 1.384
QCM * - - 68
Total 25,408 29,391 30,311
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Pellets 1Q 01 4Q 01 1Q 02
-------------------------------------------------------------------------------
Parent Company + JVs 5,816 5,626 5,279
Samarco * 1,470 1,121 1,315
Ferteco * - 2,130 619
GIIC * 372 392 412
QCM * - - 83
Total 7,658 9,269 7,708
Total 33,066 38,660 38,019
* sales attributed in proportion to size of stake held by CVRD
JVs: Nibrasco, Itabrasco, Hispanobras and Kobrasco
Samitri: acquired on May 30, 2000 and consolidated into CVRD on October 1, 2001
Samarco: acquired on May 30, 2000
GIIC: acquired on October 9, 2000
Ferteco: acquired on April 27, 2001
MBR and QCM: Caemi acquired on December 07, 2001
Some 85% of iron ore and pellets shipments were exported. Sales of iron ore
amounted to 30.311 million tons, while sales of pellets came to 7.708 million
tons.
Iron ore and pellet sales, computed according to US GAAP consolidation
criteria, amounted to 36.716 million tons in 1Q02 against 37.986 million tons
in 4Q01 and 34.433 million tons in 1Q01.
4
Sales of manganese ore in the quarter by subsidiaries Sibra and Urucum,
amounted to 345,200 tons, compared to 306,700 tons in 4Q01. Shipments to
international markets accounted for 88.2% of sales in 1Q02. Sales of
ferro-alloys, by Sibra, CPFL, RDME and Urucum, totalled 96,700 tons, down 3.4%
on 4Q01.
Sales of gold amounted to 115,400 ounces in 1Q02, compared to 141,100 in 4Q01
and 108,300 in 1Q01.
General cargo (products other than iron ore and pellets) transported by
railroad, measured in net ton kilometres (ntk), amounted to 5.2 billion ntk
(Vitoria a Minas 2.7 billion ntk, Carajas 665 million ntk and Centro-Atlantica
1.8 billion ntk). This performance was practically the same as in 4Q01 and 5.4%
higher than 1Q01. General cargo handling in the ports and terminals of CVRD was
12.7% down compared to 4Q01, but 9.1% higher than that reported in 1Q01.
GENERAL CARGO RAILROAD TRANSPORTATION
million ntk
-------------------------------------------------------------------------------
1Q 01 4Q 01 1Q 02
-------------------------------------------------------------------------------
EF Vitoria a Minas 2,643 2,791 2,737
EF Carajas 356 423 665
Total Parent Company 2,999 3,214 3,402
Ferrovia Centro Atlantica 1,962 1,993 1,829
Total 4,961 5,207 5,231
Gross revenues in 1Q02 of US$ 987 million were slightly lower than figure of
US$ 1.005 billion reported in the same quarter last year.
Sales of iron ore and pellets amounted to US$ 666 million, 67% of total
revenues, up 15% on 1Q01. Transportation services generated revenues of US$ 111
million, down US$ 80 million YoY. The cutback in activities at Docenave and the
acquisition of Ferteco, which therefore ceased to be a client of CVRD, explains
this fall in revenue. Another important change came as the result of the
divestment of paper and pulp assets, with revenues from the sale of wood and
pulp dropping from a previous US$ 24 million in 1Q01 to US$ 1 million in 1Q02.
GROSS REVENUE BY PRODUCT
million US$
-------------------------------------------------------------------------------
1Q 01 4Q 01 1Q 02
-------------------------------------------------------------------------------
Iron Ore 465 504 542
Pellets 115 159 124
Gold 28 39 34
Transportation 191 144 111
Aluminum 83 60 68
Manganese and Ferro-alloys 74 114 73
Potash 19 13 16
Kaolin 1 - 11
Wood and Pulp 24 - 1
Others 5 - 7
Total 1,005 1,033 987
5
EARNINGS OF US$ 304 MILLION
1Q02 net earnings amounted to US$ 304 million, down 14.1% on that obtained in
1Q01, of US$ 354 million.
The main reason for this fall was that in 1Q01, earnings were strongly boosted
by capital gains from asset sales - CVRD's stakes in Bahia Sul and CSN. An
increase of US$ 43 million in income tax provision and a reduction of US$ 22
million in net revenues also contributed to producing a lower result in 1Q02.
On the other hand, the cost of goods sold (COGS) in 1Q02 was down US$ 65
million, YoY.
1Q02 net earnings including exceptional non-recurrent items - provisions for
tax contingencies at Docepar US$ 24 million, provisions for losses in equity
investments, FCA US$ 13 million and Valepontocom US$ 7 million and the
reversion of provision for contingencies of US$ 13 million - amounted to US$
275 million.
EBITDA OF US$ 444 MILLION
EBITDA generated in 1Q02 amounted to US$ 444 million, up 15.3% on 4Q01, but
lower than that reported in 1Q01, of US$ 489 million.
The drop of US$ 61 million in dividends received from subsidiaries and
affiliates, the rise of US$ 19 million in sales and administrative expenses,
mainly as a result of restructuring costs, and the US$ 18 million fall in gross
revenues, were the main factors behind the lower EBITDA in the first quarter,
when compared with the same period a year earlier.
The EBITDA breakdown in 1Q02 by business area was as follows: ferrous minerals
78.6%, logistics 14.2%, aluminum 4.1%, non-ferrous minerals 2.7% and steel
0.4%. The contribution from steel came from dividends received from
non-consolidated companies.
EBITDA BY BUSINESS AREA
million US$
-------------------------------------------------------------------------------
1Q 01 4Q 01 1Q 02
-------------------------------------------------------------------------------
Ferrous Minerals 379 235 349
Non-Ferrous Minerals 17 (7) 12
Logistics 44 147 63
Aluminum 25 9 18
Steel 24 1 2
Total 489 385 444
CAPITAL EXPENDITURES
Capital expenditures of the Parent Company in 1Q02 amounted to US$ 157.6
million. Project investments of US$ 81.1 million, accounted for 51.5% of this
sum.
Expenditure on projects in the area of iron ore amounted to US$ 43.6 million.
US$ 15.5 million was invested in the construction of the Sao Luis pellet plant,
US$ 14.3 million on the infrastructure needed for its operation, and US$ 10.7
million on iron ore logistics (locomotives, pier III at the port of Ponta da
Madeira and enlargement of the stock yards).
Investment in hydroelectric power plants absorbed US$ 22.3 million, US$ 13.8
million on Aimores, US$ 4.3 million on Candonga, US$ 3.5 million on Funil and
the remainder on other projects still in the development phase where
construction has yet to begin (Capim Branco I & II and Foz do Chapeco).
6
Logistics projects absorbed US$ 10 million and US$ 1.6 million was spent on
expanding production in the potash mine.
US$ 3.4 million of capital was injected into Mineracao Serra do Sossego for
financing the development of the copper mine.
Investment in mineral exploration amounted to US$ 5 million, while US$ 3.8
million was spent on information technology and US$ 2.6 million on
environmental protection.
CAPITAL EXPENDITURES - PARENT COMPANY - 1Q 02
By Business Area US$ million % By Category US$ million %
--------------------------------------------- ---------------------------------------------------
Ferrous Minerals 104.7 66.4% Equity investments 3.1 2.0%
Transportation 13.7 8.7% Maintenance 60.7 38.5%
Non-Ferrous Minerals 12.2 7.7% Projects 81.1 51.5%
Energy 22.7 14.4% Mineral exploration 5.0 3.2%
Others 4.4 2.8% Environment 2.6 1.7%
Information Technology 3.8 2.4%
Technological Research 1.3 0.9%
Total 157.6 100.0% Total 157.6 100.0%
Mineracao Rio do Norte (MRN) and Alunorte, affiliated companies of CVRD,
continued to invest in their capacity expansion projects, respective
expenditure being US$ 34.3 million and US$ 39.4 million. MRN is expanding its
bauxite production capacity from 11 million tpy to 16.3 million tons tpy while
Alunorte is increasing capacity of its alumina refinery from 1.6 million tpy to
2.4 million tpy. Both MRN and Alunorte brownfield projects have low capex cost
per ton, US$ 34 and US$ 347, respectively.
DEBT
Despite the investments carried out in 2001 and the dividend payment of US$
1.066 billion, the Company's net debt position fell slightly between 1Q01 and
1Q02, from US$ 1.864 billion to US$ 1.778 billion.
As of March 31, 2002, CVRD's total debt amounted to US$ 3.786 billion. Net debt
corresponded to 27% of asset book value and just 1.03 times EBITDA accumulated
in the past twelve months. EBITDA in 1Q02 was 10.8 times interest paid,
reflecting a very comfortable level of interest rate coverage.
SELECTED FINANCIAL INDICATORS
million US$
-------------------------------------------------------------------------------
1Q 01 4Q 01 1Q 02
-------------------------------------------------------------------------------
Gross Operating Revenues 1,005 1,033 987
Gross Margin (%) 38.3 38.4 43.7
Net Earnings* 354 702 275
Net Earnings per share (US$)* 0.92 1.82 0.72
EBITDA 489 385 444
EBITDA Margin (%) 50.2 38.8 46.6
Gross Debt 3.040 3.055 3.786
Net Debt 1.864 1.938 1.778
Net Debt/(Net Debt + Shareholders' Equity) 0.29 0.29 0.27
*including exceptional non-recurrent items
7
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"This press release may contain statements that express management's
expectations about future events or results rather than historical facts. These
forward-looking statements involve risks and uncertainties that could cause
actual results to differ materially from those projected in forward-looking
statements, and CVRD cannot give assurance that such statements will prove
correct. These risks and uncertainties include factors: relating to the
Brazilian economy and securities markets, which exhibit volatility and can be
adversely affected by developments in other countries; relating to the iron ore
business and its dependence on the global steel industry, which is cyclical in
nature; and relating to the highly competitive industries in which CVRD
operates. For additional information on factors that could cause CVRD's actual
results to differ from expectations reflected in forward-looking statements,
please see CVRD's reports filed with the Comissao de Valores Mobiliarios and
the U.S. Securities and Exchange."
SIGNATURES
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.
COMPANHIA VALE DO RIO DOCE
By: /s/ Roberto Castello Branco
-------------------------------
Name: Roberto Castello Branco
Title: Head of Investor Relations
Dated: May 16, 2002