United States
Securities and Exchange Commission
Washington, D.C. 20549
FORM 6-K
Report of Foreign Private Issuer
Pursuant To Rule 13a-16 or 15d-16
of the
Securities Exchange Act of 1934
For the month of August 2002
Valley of the Doce River Company
(Translation of Registrant's name into English)
Avenida Graca Aranha, No. 26
20005-900 Rio de Janeiro, RJ, Brazil
(Address of principal executive office)
Indicate by check mark whether the registrant files or will file annual reports
under cover 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): 82-_____________________
Companhia Vale do Rio Doce
TABLE OF CONTENTS
This Form 6-K contains the following:
Sequential
Page
Item Number
---- ------
1. Press Release entitled "Performance of Companhia Vale do Rio Doce
in the Second Quarter of 2002," dated August 14, 2002................. 1
2. Condensed Consolidated Financial Information as of and for
the month ended June 30, 2002 ........................................ 21
BR [LOGO] Comphania
GAAP Vale do Rio Doce
Press Release 2Q02
BOVESPA:VALE3, VALE5 PERFORMANCE OF COMPANHIA VALE DO RIO DOCE IN THE
NYSE: RIO, RIOPR SECOND QUARTER OF 2002
LATIBEX: XVALO, XVALP
The financial and operational information released
in this report, unless otherwise indicated, were
calculated in accordance with the generally
accepted accounting principles in Brazil
(Brazilian GAAP).
Rio de Janeiro, 14 August 2002 - In the second
quarter of 2002 (2Q02) Companhia Vale do Rio Doce
(CVRD) obtained a net earnings of R$ 85 million,
corresponding to earnings per share of R$ 0.22.
Earnings accumulated in the first half amounted to
R$ 718 million, equivalent to
www.cvrd.com.br R$ 1.87 per share. Revenues, margins, cash
generation and sales presented an excellent
performance, with some new records being achieved.
The volatility in the exchange rate between the
Real (BRL) and the US Dollar (USD) was the
fundamental factor in reducing net earnings in the
quarter, from R$ 633 million in 1Q02 to R$ 85
million in 2Q02, producing foreign exchange losses
(monetary variation) of R$ 997 million.
The depreciation of the BRL causes different
impacts over time on CVRD's earnings. In the short
CVRD term, the negative impact on net liabilities in
Investor Relations: foreign currency has an unfavourable effect on
Roberto Castello Branco earnings. However, due to the asymmetry between
Andreia Reiis revenues and expenses - most of the Company's
Daniella Tinoco revenues are denominated in USD, 82% in 2Q02,
Barbara Gelluda while the majority of costs are denominated in
Rafael Azevedo BRL, 68% in 2Q02 - the impact on cash flow is very
Tel: (5521) 3814-4540 positive, more than compensating for the initial
rio@cvrd.com.br unfavourable effect on earnings. Normally, this
reversion tends to take approximately two
quarters.
In this quarter, the negative effect on net
earnings was much sharper. The appreciation of the
USD against the BRL between the end of 1Q02 and
the last day of 2Q02 - the figure needed to
calculate the negative accounting effect on
earnings in the quarter - amounted to 22.4%. On
the other hand, the fall in the average exchange
rate from 1Q02 to 2Q02, which is what affects the
behaviour of cash flow in BRL, was only 5%.
Therefore, the exchange rate trajectory during
2Q02 was detrimental to CVRD financial
performance.
The Company's operating result was very good.
Gross operating revenues totalled R$ 1.843 billion
in the quarter, the highest in CVRD's history,
slightly above the previous record of R$ 1.840
billion achieved in 3Q01, despite the limited
positive impact of the USD appreciation and the
iron ore price decline. Contrasting with this
scenario, 3Q01 revenues were benefited by a 11.1%
USD appreciation relatively to the previous
quarter and an iron ore price rise.
Cash generation, as measured by EBITDA (earnings
before interest, tax, depreciation and
amortization) amounted to R$ 864 million, was the
second best quarterly result in the Company's
history. The highest ever quarterly EBITDA, R$ 986
million, was
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achieved in 3Q01. It should be pointed out that CVRD made a provision of R$ 54
million, fully recognised in 2Q02, for the retrospective effect of a lowering of
iron ore and pellet prices, which had a negative effect on revenues, margins,
cash generation and earnings.
EBITDA margin, the ratio between EBITDA and net revenues, amounted to 49%, again
confirming CVRD's excellent capacity for transforming revenues into operating
profit. EBITDA margin in 2Q02 was slightly higher than the average for the
previous 17 quarters (1Q98 to 1Q02), of 48.7%.
The volume of iron ore and pellets shipped by the Parent Company constituted a
quarterly record of 36.330 million tons, exceeding the previous record of 34.769
million obtained in 3Q01 by 4.5%. Sales volume of the above mentioned products
in the first half of the year, 70 million tons, is also a new historical record.
The amount of general cargo transported for clients on CVRD's railroads (Vitoria
a Minas - EFVM and Carajas - EFC) also constituted a new quarterly record of
3.730 billion net ton kilometres (ntk).
CVRD's consolidated exports in the first half of 2002 amounted to US$ 1.865
billion. It was a significant contribution to Brazil's trade surplus and
ratifies CVRD position as the leading Brazilian exporter.
Capital expenditures carried out in the second quarter amounted to US$ 215.6
million. Of this total, US$ 114.7 million was dedicated to various projects and
US$ 50.4 million was spent acquiring full control of the Salobo copper project.
The purchase of partners' stakes in the Sossego and Salobo projects will allow
full exploitation of the synergies existing within the Carajas region and
improved value generation for the Company's shareholders. During the first half,
CVRD's capital expenditure totalled US$ 373.2 million.
Various important steps were taken in the execution of the Company's strategy,
especially in regard to the aluminum, copper and electricity businesses.
RELEVANT EVENTS
Strategy execution
Two important transactions took place in the implementation of CVRD's strategy
in the aluminum businesses, whose focus is the exploitation of opportunities in
the bauxite and alumina segments.
The first was the purchase, for R$ 118.9 million, of a 12.6% stake in Alunorte
by Aluvale, a wholly owned subsidiary of the Company, which thus now holds 62.1%
of the common shares and 19.1% of the preferred shares in Alunorte,
corresponding to 57% of the total share capital. Among other implications, this
means that CVRD will be able to capture greater value in the future expansion of
this alumina refinery.
The second transaction was the acquisition, for R$ 6.4 million, of total control
in Mineracao Vera Cruz (MVC). MVC has significant bauxite reserves located in an
area adjoining CVRD's own reserves in the Paragominas region, in the state of
Para. The geographical location of MVC's mineral resources significantly
increases flexibility in the use of the Company's logistics infrastructure.
In the non-ferrous segment, CVRD acquired full control of the Salobo copper
project for US$ 50.4 million and entered into a joint venture with Antofagasta
Plc, one of the largest copper producers in the Americas, for mineral
exploration in the south of Peru, an area with significant mineral resource
potential.
In June, the Company ceased extraction activities at the Igarape Bahia gold
reserve in Carajas. As a consequence, CVRD's estimated gold production for 2002
is 320,000 troy ounces, compared to the 514,400 troy ounces produced in 2001.
However, concurrently, there is an ongoing pre-feasibility study for the
development of Igarape Bahia Phase IV. From the middle of 2004, it is estimated
that this new
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phase will produce 36,000 tons of copper concentrate and 83,600 troy ounces of
gold annually. The estimated capex for the development of Igarape Bahia Phase IV
is US$ 54 million.
CVRD has obtained the concession for the construction and operation of the
Estreito hydroelectric power plant which will have a capacity of 1,087 MW.
CVRD's stake in the consortium that made the winning bid at the concession
auction is 30% and the Estreito plant will be the Company's tenth hydroelectric
power project, two of which, Igarapava and Porto Estrela, are already in
operation.
The Company is in the process of negotiating the sale of the assets of Florestas
Rio Doce to Bahia Sul Celulose S.A. and Aracruz Celulose S.A., concluding the
strategy of divesting out of the paper and pulp sector.
Bond issues
Vale Overseas, a wholly owned subsidiary of CVRD, has begun the offer to swap
bonds guaranteed by the Company, which fall due in 2007, with a coupon of
8.625%, political risk insurance and a total face value of US$ 300 million,
series A (old issue) for series B bonds (new issue). The new issue represent the
same debt with exactly identical characteristics. However, the new issue do not
carry restrictions on their purchase by retail investors and are registered with
the SEC (Securities and Exchange Commission) under the terms of the US
Securities Act of 1933, which will improve the liquidity of these bonds in the
secondary market.
Authorization was requested from the CVM (Brazilian Securities and Exchange
Commission) on June 28, 2002, to register shareholders debentures issued by CVRD
and distributed to its shareholders in April 1997, in the context of the
privatization program. Registration of these debentures will allow them to be
traded on Brazilian markets.
The Chicago Board Options Exchange (CBOE) and Pacific Exchange have begun
trading in options on RIO, the ADR representing the common shares of CVRD. These
options constitute a risk transfer vehicle, and it is hoped that they will help
to reduce volatility in the Company's share price.
Iron ore and pellet prices
Between the end of May and the beginning of June, CVRD concluded iron ore and
pellet price negotiations with European and Japanese clients for 2002 (April
2002 to March 2003 in the case of Japan). Reflecting the performance of the
steel industry in 2001, prices were down, by between 1% (iron ore fines from the
Southern System to Europe) and 5.5% (blast furnace pellets to Europe). The
impact of this drop in prices in the first half of the year is fully recognised
in the results for 2Q02.
SHORT TERM PROSPECTS
The increased risk aversion prevailing in the world financial market reflects
the suspicion generated by the cases of corporate fraud and doubts about the
strength of the global economic recovery.
Recent statistics on economic activity in the US and Europe suggest that
recovery in the global economy is likely to take place more slowly than we had
expected at the time of publishing CVRD's first quarterly results earlier this
year, on May 15, 2002.
In Brazil, uncertainty in world financial markets magnified the effects of the
uncertainties about the future of macro-economic policy under the next
government. This combination produced a high degree of financial assets price
volatility. It is hoped, as a result of the new agreement with the IMF, that
involves a credit line of US$ 30 billion, will produce positive effects on the
markets and, consequently, on the Brazilian economy.
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The 3.1% drop in global steel output (ex-China) in 2001 and the expansion of
industrial production in 2002, were the main factors behind the recovery of the
steel products markets this year. The average price of steel products rose
significantly: the Steel Price Index (CRUspi), computed by CRU, showed a rise of
32% between the end of last year and the beginning of August this year. Global
production of crude steel, according to data from the International Institute
for Steel and Iron (IISI), grew 3.9% in the first half of 2002, compared to the
same period in 2001. In the second quarter of 2002, this growth accelerated,
production increasing by 5.7% over the first quarter.
This scenario is reflected positively in the demand for iron ore and pellets.
China continues to be the principal driving force behind the growth in seaborne
demand for iron ore: its imports amounted to 51 million tons in the first half
of 2002 (1H02) compared to 41.9 million in 1H01, an increase of 21.9%. In Japan,
where the economy is still undergoing a fragile recovery, iron ore inventories
are down and import levels remained constant in 1H02, totalling 63 million tons.
Higher steel prices have stimulated a recovery in the global demand for pellets.
The prospects for continuing increase in Chinese imports, driven by a fast
growing GDP and replacement of domestically produced iron ore for the imported
product, combined with the fact that steel prices are expected to remain at
current levels, leads us to expect good sales performance for iron ore and
pellets of CVRD in the second half of 2002, consolidating the movement saw in
the 1H02.
On the other hand, given the current and expected short term demand evolution
for aluminum, we cannot anticipate a price recovery for the next few months.
Inventories on the London Metal Exchange (LME) continue to accumulate and prices
have reacted negatively to the turbulence in global financial markets,
converging to US$ 1,300 per ton, compared to the 2001 average of US$ 1,453 and
US$ 1,378 in the first seven months of 2002. In the case of alumina, demand from
China provides support for prices at their current level. For new contracts, the
alumina price has remained at around 11% of the aluminum price on the LME. Gold
prices have remained consistently above the level of US$ 300 per troy ounce, and
its resiliency may be associated to the asset price volatility in global
financial markets.
Despite the slow growth in the Brazilian economy, demand for logistics services
has been very strong, given the deficiencies that exist in Brazil's cargo
transport infrastructure. CVRD has been able to exploit opportunities in the
market, especially in the transport of grains and cement, as well as inter-modal
transportation. For instance, the winning of new contacts has made it feasible
to expand the Company's railroad activities in the transportation of products
for the car industry from 4Q02 onwards.
REVENUES AND SALES VOLUME
Sales volume of iron ore and pellets in 2Q02 reached a record level of 36.330
million tons, exceeding the previous record of 34.769 million tons recorded in
3Q01. It is worth pointing out that since 3Q01, the sales of iron ore from
Samitri's mines have been fully incorporated into the Parent Company's sales
figures. Shipments in the second quarter were up 7.9% on the previous quarter
and 16.5% on 2Q01. Sales volume by the Parent Company encompasses all pellet and
iron ore shipments, including the sales of pellet feed to the pellet joint
ventures (Nibrasco, Itabrasco, Hispanobras and Kobrasco).
Accumulated sales volume in the first half of the year amounted to 70 million
tons, 14.1% higher than in the same period a year earlier. 1H02 sales volumes
set a historical record as well.
In 2Q02, sales of iron ore fines accounted for 78.9% of shipments, lumps 10% and
pellets 11.1%. Sales of pellets increased the most, up 23.1% on the previous
quarter. The Parent Company bought 3.050 million tons of pellets for resale to
customers from the pellet joint ventures, compared to 1.769 million tons in 1Q02
and 2.847 million on 2Q01.
Sales of iron ore to China of 5 million tons were up 13.6% on the previous
quarter and 78.6% up on 2Q01. The CVRD increased penetration into the Chinese,
the fastest growing market in the world, is a
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consequence of a successful marketing policy, supported by a diversified
portfolio of high quality products. For Japan, volumes shipped of 4.3 million
tons were up 16.2% on 1Q02 and 4.9% on 2Q01. Another important source of sales
expansion was from Brazilian steel mills, where sales volume was up 13.7% qoq
and up 18.4% yoy.
SALES OF IRON ORE AND PELLETS - PARENT COMPANY
thousand tons
1Q 01 2Q 01 3Q 01 4Q 01 1Q 02 2Q 02
Iron Ore and Pellets 30,175 31,189 34,769 33,815 33,663 36,330
Iron Ore 26,546 27,038 30,996 29,983 30,379 32,289
Fines 23,512 24,226 27,617 26,044 27,016 28,648
Lump 3,034 2,812 3,379 3,939 3,363 3,641
Pellets 3,629 4,151 3,773 3,832 3,284 4,041
Consolidated sales volume of iron ore and pellets, calculated according to
managerial criteria, amounted to 40.901 million tons, compared to 38.034 million
in 1Q02. Pellet sales were up 19.6% and iron ore sales up 4.5%. Ferteco, a
wholly owned subsidiary of CVRD, saw its iron ore shipments rise by 17.6% qoq
and that of pellets increase by 78.4% qoq. A detailed description of the method
used to calculate consolidated sales volume, according to managerial criteria,
is to be found on CVRD's website, www.cvrd.com.br, under investor relations,
frequently asked questions.
CONSOLIDATED SALES OF IRON ORE AND PELLETS - Economic Concept
thousand tons
Iro Ore 2Q 01 1Q 02 2Q 02
Parent Company 21,486 25,815 26,673
Samitri 1,657 -- --
Samarco * 217 336 275
Urucum * 123 233 230
Ferteco * 3,395 2,503 2,943
MBR * -- 1,384 1,509
QCM * -- 68 67
Total 26,878 30,339 31,697
Pellets 2Q 01 1Q 02 2Q 02
Parent Company + JVs 6,174 5,266 6,178
Samarco * 1,205 1,315 1,443
Ferteco * 661 619 1,104
GIIC * 431 412 338
QCM * -- 83 141
Total 8,471 7,695 9,204
Total 35,349 38,034 40,901
* 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
The transportation of general cargo (products other than iron ore and pellets)
for customers on CVRD's railroads, amounted to 3.730 billion net ton kilometres
(ntk), a quarterly record, surpassing the previous record of 3.468 billion ntk
in 1Q02. Ferrovia Centro-Atlantica (FCA) also registered its best performance in
terms of general cargo transportation since its operation was taken over by CVRD
at the beginning of 2000: 2.712 billion nkt.
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In addition to transportation records, CVRD's railroads have been significantly
improving productivity. At EFVM, ntk per active locomotive, per day, rose from
0.87 million in 2Q01 to 0.95 million in 2Q02. Simultaneously fuel consumption
fell. EFVM's trains transported, on average, 300 ntks per litre of fuel consumed
in 2Q02, compared to 280 in 2Q01. Maximization of asset utilization and
operational cost reductions are contributing to increase returns on existing
assets.
GENERAL CARGO RAILROAD TRANSPORTATION
million ntk
1Q 01 2Q 01 3Q 01 4Q 01 1Q 02 2Q 02
EF Vitoria a Minas 2,643 2,890 2,844 2,791 2,803 2,880
EF Carajas 356 543 494 423 665 850
Total Parent Company 2,999 3,433 3,338 3,214 3,468 3,730
Ferrovia Centro Atlantica 1,962 2,236 2,167 1,993 2,257 2,712
Total 4,961 5,669 5,505 5,207 5,725 6,442
CVRD's ports handled 7.007 million tons, an increase of 27% on the previous
quarter.
Gold sales have been falling due to the exhaustion of the Igarape Bahia mine,
amounting to 111,854 troy ounces in the quarter. From the third quarter of 2002,
gold will be produced only from the mines of Fazenda Brasileiro and Itabira.
However, CVRD's gold production will rise strongly when operations begin at the
copper mines in Carajas. Annual production of 950,000 troy ounces is estimated
for 2007, by which time all the copper projects should be fully operational.
Potash shipments increased substantially, up by 69.9% qoq and 27.2% yoy.
SALES OF LOGISTICS SERVICES, GOLD AND POTASH - PARENT COMPANY
thousand tons
1Q 01 2Q 01 3Q 01 4Q 01 1Q 02 2Q 02
Gold (troy ounces ) 108,253 114,780 144,215 141,444 115,455 111,854
Potash 133 151 124 95 113 192
Logistics 25,966 24,613 21,306 20,204 18,775 21,919
Railroads 16,611 16,042 14,078 13,640 13,258 14,912
Ports 9,355 8,571 7,228 6,564 5,517 7,007
Gross operating revenues amounted to R$ 1.843 billion, 81.9% of which were
denominated in USD. External markets accounted for 61.4% of sales. Among them,
Europe accounted for 27.1% of revenues generated in 2Q02, China for 10.3%, Japan
for 8.1% and the rest of Asia for 3.6%.
Iron ore accounted for 61.1% of total revenues, pellets 15.2%, railroad
transportation for 11.1% and port services 3.7%.
GROSS REVENUES BY PRODUCT - PARENT COMPANY
million R$
2Q 01 % 1Q 02 % 2Q 02 %
Iron Ore 871 54.6% 989 61.8% 1,127 61.2%
Pellets 300 18.8% 246 15.4% 281 15.2%
Gold 73 4.6% 80 5.0% 89 4.8%
Railroads 220 13.8% 188 11.7% 204 11.1%
Ports 61 3.8% 42 2.6% 68 3.7%
Potash 50 3.1% 38 2.4% 62 3.4%
Others 19 1.2% 18 1.1% 12 0.7%
Total 1,594 100.0% 1,601 100.0% 1,843 100.0%
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GROSS REVENUES BY DESTINATION - PARENT COMPANY
million R$
2Q 02 %
Foreign Market
Latin America 65 3.5
United States 92 5.0
Europe 499 27.1
Middle East 69 3.7
Japan 150 8.1
China 189 10.3
Asia. except Japan and China 67 3.6
Domestic Market 712 38.6
Total 1,843 100.0
SECOND QUARTER EARNINGS
Net earnings in 2Q02 were strongly hit by monetary variation associated with the
depreciation of the BRL against the USD to the tune of R$ 997 million.
Compared to 2Q01, when earnings came to R$ 546 million, the main factor to
affect earnings was the increase in negative monetary variation of R$ 814
million.
Results of investment participation contributed favourably to earnings in 2Q02,
up R$ 169 million on 2Q01, chiefly due to the result of an increase of R$ 361
million in equity income. This item amounted to R$ 626 million in 2Q02, of which
R$ 596 million derived from the iron ore and pellets division, R$ 66 million
from manganese and ferro-alloys and R$ 63 million from steel assets. The
aluminum businesses contributed for a loss of R$ 127 million, mainly because of
the effect of the depreciation of the Real against the Dollar on the foreign
currency denominated debt of Albras and Alunorte. Despite the low aluminum
prices, the operational performance of all aluminum companies improved. For
example, EBITDA generated by Albras in 2Q02, of R$ 150.4 million, was up 10%
yoy, and 41.9% qoq.
RESULTS OF EQUITY INVESTMENTS - BY BUSINESS AREA
million R$
Business Area 2Q 01 1Q 02 2Q 02
Ferrous Minerals
Iron Ore and Pellets 151 155 528
Manganese and Ferro-Alloys 2 16 46
Non-Ferrous Minerals (5) 5 (41)
Logistics 24 (76) (57)
Steel 18 (9) 58
Pulp and Paper / Fertilizers 8 11 (1)
Aluminum 39 65 (127)
Others 1 (15) 1
Total 238 152 407
Net operating revenues raised R$ 222 million compared to 2Q01, while the cost of
goods sold (COGS) saw an increase of R$ 162 million, adversely affecting the
quarterly result. This was due primarily to an increase in depreciation and
amortization of R$ 54 million, payment of demurrage (fines for delayed
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shipments) of R$ 31 million, the result of sharply increased activity at the
port of Tubarao and an increase of R$ 30 million in material costs, the
consequence of increased activity within the Company.
COST OF GOODS SOLD
million R$
2Q 01 % 1Q 02 % 2Q 02 %
Personnel 105 13.0% 123 14.4% 131 13.5%
Materials 86 10.6% 114 13.4% 116 11.9%
Fuel 72 8.9% 80 9.4% 91 9.4%
Electrical Energy 22 2.7% 27 3.2% 30 3.1%
Outsourced Services 101 12.5% 128 15.0% 119 12.2%
Acquisition of Products 257 31.7% 143 16.8% 250 25.7%
Depreciation and Depletion 110 13.6% 173 20.3% 164 16.9%
Others 57 7.0% 64 7.5% 71 7.3%
Total 810 100.0% 852 100.0% 972 100.0%
EBITDA EVOLUTION
EBITDA in 2Q02 amounted to R$ 864 million, up 18.7% on the previous quarter and
11.6% higher than the same period a year earlier. This was the second highest
figure in CVRD's history, and 46.2% higher than the EBITDA average of R$ 591
million over the previous 17 quarters (1Q98 to 1Q02). EBITDA margin amounted to
49%, in line with previous quarterly results.
Compared to EBITDA obtained in 2Q01, of R$ 774 million, the main source of
improvement was in net sales growth up by R$ 222 million. On the other hand, the
increase in COGS of R$ 163 million was the most important factor in restricting
growth in this variable.
EBITDA COMPOSITION
million R$
2Q 02
Net Revenues 1,762
Cost of Goods Sold (972)
Selling Expenses (35)
General & Administrative Expenses (95)
Research & Development Expenses (32)
Other Operatiung Revenues / Expenses (77)
Adjustment for Exceptional Non-Cash Items 121
Depreciation. Depletion and Amortization 141
Dividends Received 52
EBITDA 864
CAPITAL EXPENDITURES
Investments made in 2Q02 amounted to US$ 215.6 million. This figure included US$
50.4 million of the acquisition costs of the 50% stake owned by Anglo American
plc in the Salobo copper project, and US$ 114.7 million which was allocated to
other projects.
Capital expenditures for the first half amounted to US$ 373.2 million.
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Most of the expenditure on projects was in the area of ferrous minerals,
totalling US$ 58.6 million. Of particular note were: the US$ 21.4 million spent
on the purchase of locomotives for iron ore transportation, work on the
construction of Pier III at the Ponta da Madeira maritime terminal (US$ 5.6
million) and US$ 24.0 million on the Sao Luis pellet plant and its supporting
infrastructure.
US$ 27.3 million were invested in the construction and the environmental
licensing of eight hydroelectric power projects. By the end of August
construction will begin on the Capim Branco I and II hydroelectric power plants.
Logistics projects absorbed US$ 19.6 million, the largest investment of US$ 7.7
million being spent on the purchase of transtainers and portainers for the Vila
Velha Terminal (TVV) and US$ 3.8 million on the enlarging of the Praia Mole
Terminal, both in the state of Espirito Santo. US$ 2.2 million was spent on
enlarging the capacity of the grain handling facilities at the port of Tubarao
and US$ 2.9 million spent on increasing transportation capacity, warehousing and
general cargo handling facilities in the Northern System.
Investment of US$ 7.7 million was carried out in Mineracao Serra do Sossego, in
developing the copper mine. Capital expenditure on enlarging the potash mine at
Taquari-Vassouras amounted to US$ 1.5 million. This brownfield project involves
total investment of US$ 67.5 million from 2002 to 2005, to increase production
capacity from 600 to 850,000 tons a year by 3Q05. This is an investment with a
high expected rate of return, in a product whose sales produce strong cash
generation, which will increase CVRD's share in a market that is growing by an
average of 6% a year.
Mineral exploration continues to focus on the discovery of world class mineral
deposits. Investment in 2Q02 quarter amounted to US$ 8.3 million. Most of the
expenditure for this year is allocated to the exploration of copper, gold,
nickel, kaolin and platinum group metals. US$ 2.7 million was spent on
information technology and US$ 0.9 million on environmental protection.
CAPITAL EXPENDITURES* - 2Q 02
By Business Area US$ million % By Category US$ million %
Ferrous Minerals 91.6 55.4% Equity Investments 7.8 4.7%
Logistics 25.2 15.3% Maintenance 29.0 17.6%
Non Ferrous Minerals 18.5 11.2% Projects 114.7 69.5%
Energy 27.5 16.6% Mineral Exploration 8.3 5.0%
Others 2.4 1.5% Environmental Protection 0.9 0.5%
Information Technology 2.7 1.6%
Technological Research 1.7 1.0%
Total 165.2 100.0% Total 165.2 100.0%
* acquisitions not included
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SELECTED FINANCIAL INDICATORS
million R$
2Q 01 Q 02 2Q 02
Gross Revenues 1,593 1,601 1,843
Gross Margin (%) 47.4 44.8 44.8
Net Income 546 633 85
Net Income per Share (R$) 1.42 1.65 0.22
EBITDA 774 728 864
EBITDA Margin (%) 50.3 47.2 49.0
ROE annualized (%) 21.6 21.0 11.8
Investments (US$ million) * 124 158 165
* acquisitions not included
FINANCIAL STATEMENT
million R$
2Q 01 1Q 02 2Q02
Gross Operating Revenues 1,593 1,601 1,843
Value Added Tax (53) (57) (81)
Net Operating Revenues 1,540 1,544 1,762
Cost of Goods Sold (810) (852) (972)
Gross Income 730 692 790
Gross Margin (%) 47.4 44.8 44.8
Result of Investment Participation 238 152 407
Equity Income 265 284 626
Goodwill Amortization (27) (66) (104)
Provision for Losses - (67) (115)
Others 1 -
Operating Expenses (219) (178) (237)
Selling (28) (28) (35)
General & Administrative (69) (90) (94)
Research and Development (21) (22) (31)
Others (101) (38) (77)
Financial Results (301) (65) (1,146)
Financial Expenses (138) (121) (201)
Financial Revenues 21 32 52
Monetary Variation (184) 24 (997)
Operating Income 448 601 (186)
Discontinued Operations 56 - -
Income Taxes 42 31 272
Net Income 546 632 86
Net Income per Share (R$) 1.42 1.65 0.22
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EQUITY INCOME
million R$
COMPANY/PARTICIPATION % 2Q 01 1Q 02 2Q 02
DOCENAVE 100.00 25 17 34
ALUVALE 94.74 29 62 (133)
FLORESTAS RIO DOCE 99.85 3 3 2
RDE 99.80 81 34 220
ITACO 99.99 65 72 486
URUCUM 100.00 4 8 13
TERM,VILA VELHA 99.89 3 - -
NORPEL 99.90 - 1 1
M,ANDIRA (SOSSEGO) 99.50 (1) - -
PARA PIGMENTOS 75.50 - 5 (5)
SAMITRI 100.00 23 - -
VALEPONTOCOM 100.00 - (16) -
SIBRA 99.23 20 33 23
ZAGAIA (FERTECO) 100.00 (3) 29 19
BELEM 99.99 - 2 (2)
MSE 99.99 - - 1
KSG 99.99 - - 1
BRASAMERICAN LIMITED 99.70 - 1 7
BRASILUX 100.00 - - 20
Total from SUBSIDIARIES 249 251 687
MSG 51.00 2 1 2
CST 22.85 (1) (3) (29)
NIBRASCO 51.00 7 (2) 3
FOSFERTIL 11.12 1 4 1
HISPANOBRAS 50.89 3 3 1
ITABRASCO 50.90 9 1 3
NOVA ERA SILICON 49.00 1 1 -
USIMINAS 11.46 3 1 (26)
KOBRASCO 50.00 (4) 2 (9)
FERROBAN 3.75 (5) (4) -
SAMARCO 50.00 - 29 (10)
BAOVALE 50.00 - - 3
Total from AFFILIATES 16 33 (61)
Total from EQUITY INCOME 265 284 626
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COMPANY/PARTICIPATION % 2Q 01 1Q 02 2Q 02
PROVISION FOR LOSSES
KOBRASCO 50.00 - - (16)
CIA,FERROV,NORDESTE 30.00 - (2) (2)
DOCEPAR 100.00 - (59) (5)
FCA 45.65 - (6) (20)
PARA PIGMENTOS 75.50 - - (35)
FERROBAN 3.75 - - (4)
MRS 17.26 - - (33)
Total from PROVISION FOR LOSSES 0 (67) (115)
GOODWILL AMORTIZATION
FCA 45.65 - (31) (18)
PARA PIGMENTOS 75.50 (4) - -
CPFL 92.96 - (1) (1)
SIBRA 99.23 (19) (19) (19)
MINERACAO MATO GROSSO 100.00 (2) - -
USIMINAS 11.46 (2) - -
CAEMI 16.85 - (13) (14)
BELEM 99.99 - (2) (3)
MRS 17.26 - - (14)
FERTECO 100.00 - - (35)
Total from GOODWILL AMORTIZATION (27) (66) (104)
Gain on assets disposal and dividends - 1 -
Total 238 152 407
EQUITY PARTICIPATION ON DOCENAVE % 2Q 01 1Q 02 2Q 02
NAVEDOCE/Seamar 100.00 7 - (2)
Own operations 100.00 (5) 15 (34)
NAVEDOCE/Seamar (G/L Foreign Exchange) 100.00 23 2 70
Total Docenave 25 17 34
EQUITY PARTICIPATION ON ALUVALE % 2Q 01 1Q 02 2Q 02
ALUNORTE 57.58 (7) 5 (64)
MRN 40.00 22 10 3
ALBRAS 51.00 5 39 (95)
VALESUL 54.51 9 3 9
Equity on Alunorte - 1 2
Own operations 2 7 5
Total Aluvale 31 65 (140)
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EQUITY PARTICIPATION ON ITACO US$ million % 2Q 01 1Q 02 2Q 02
CSI 50.00 (2) - 6
RDL 100.00 - 2 3
RDME 100.00 (1) (1) 2
Caemi 16.85 - 3 (13)
Aluvale 5.26 (1) 1 (3)
GIIC (GULF) 50.00 1 2 1
CVRD Overseas 100.00 6 10 20
Own operations (1) 13 27
G/L Exchange 22 1 108
Total Itaco 24 31 151
EQUITY PARTICIPATION ON ZAGAIA % 2Q 01 1Q 02 2Q 02
Ferteco 100.00 2 29 19
MRS 10.89 - - (21)
Own operations (5) - (8)
Total Zagaia (3) 29 (10)
BALANCE SHEET
million R$
2Q 01 1Q 02 2Q 02
Assets
Current Assets 5,449 4,986 4,552
Long Term Assets 2,511 2,562 3,241
Permanent Assets 13,591 16,283 17,032
Total 21,551 23,831 24,825
Liabilities and Stockholders' Equity
Current Liabilities 4,222 4,649 4,167
Long Term Liabilities 6,154 7,099 8,532
Shareholders' Equity 11,175 12,083 12,126
Capital 4,000 4,000 5,000
Reserves 7,175 8,083 7,126
Total 21,551 23,831 24,825
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IRON ORE AND PELLETS SALES - PARENT COMPANY
thousand tons
FOREIGN MARKET 2Q 01 1Q 02 2Q 02
ASIA
China 2.8 4.4 5.0
South Korea 1.6 2.1 1.1
Philippines 0.2 0.6 0.5
Japan 4.1 3.7 4.3
Taiwan 0.2 0.4 0.4
Others - - -
Total 8.9 11.2 11.3
EUROPE
Germany 2.3 3.4 3.4
Spain 0.8 0.8 0.7
France 1.3 1.3 1.5
Italy 1.5 1.0 2.2
United Kingdom 0.4 0.7 0.4
Others 2.2 2.9 3.2
Total 8.5 10.1 11.4
AMERICAS
Argentina 0.5 0.4 0.6
United States 0.5 0.9 1.0
Others 0.5 0.3 0.5
Total 1.5 1.6 2.1
AFRICA/MIDDLE EAST / AUSTRALASIA
Bahrain 0.8 0.8 0.5
Others 1.5 0.8 0.7
Total 2.3 1.6 1.2
TOTAL 21.2 24.5 26.0
DOMESTIC MARKET 2Q 01 1Q 02 2Q 02
Steel Mills 4.9 5.1 5.8
Affiliated Pelletizing Companies 5.0 4.0 4.6
Total 9.9 9.1 10.4
TOTAL 31.1 33.6 36.4
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IRON ORE AND PELLETS - FINANCIAL INDICATORS - NON AUDITED
million R$
HISPANOBRAS 2Q 01 1Q 02 2Q 02
Sales (thousand tons) 896 907 835
Foreign Market 336 487 355
Domestic Market 560 420 480
Net Operating Revenues 64 67 59
Cost of Goods Sold (54) (58) (56)
Financial Results 1 1 6
Net Earnings 5 5 2
Gross Margin (%) 15.6 13.4 5.1
EBITDA 13 11 5
EBITDA Margin (%) 20.3 16.4 8.5
NIBRASCO 2Q 01 1Q 02 2Q 02
Sales (thousand tons) 2,169 1,000 2,257
Foreign Market 559 407 686
Domestic Market 1,610 593 1,571
Net Operating Revenues 151 71 164
Cost of Goods Sold (126) (70) (144)
Financial Results 1 (2) (4)
Net Earnings 13 (4) 13
Gross Margin (%) 16.6 1.4 12.2
EBITDA 21 5 26
EBITDA Margin (%) 13.9 7.0 15.9
Gross Debt (in US$ million)
- Short Term 5 4 2
- Long Term 2 2 2
Total 7 6 4
ITABRASCO 2Q 01 1Q 02 2Q 02
Sales (thousand tons) 775 877 702
Foreign Market 579 644 533
Domestic Market 196 233 169
Net Operating Revenues 57 66 50
Cost of Goods Sold (45) (57) (48)
Financial Results 2 (1) 9
Net Earnings 18 2 5
Gross Margin (%) 21.1 13.6 4.0
EBITDA 11 8 3
EBITDA Margin (%) 19.3 12.1 6.0
Gross Debt (in US$ million)
- Short Term - 18 17
- Long Term - - -
Total - 18 17
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IRON ORE AND PELLETS - FINANCIAL INDICATORS - NON AUDITED
million R$
KOBRASCO 2Q 01 1Q 02 2Q 02
Sales (thousand tons) 1,012 856 1,012
Foreign Market 523 436 534
Domestic Market 489 420 478
Net Operating Revenues 70 64 72
Cost of Goods Sold (56) (50) (67)
Financial Results (24) (4) (78)
Net Earnings (7) 3 (49)
Gross Margin (%) 20.0 21.9 6.9
EBITDA 16 15 9
EBITDA Margin (%) 22.9 23.4 12.5
Gross Debt (in US$ million)
- Short Term - - -
- Long Term 128 150 143
Total 128 150 143
SAMARCO 2Q 01 1Q 02 2Q 02
Sales (thousand tons) 2,919 3,301 3,436
Average Price (US$/ton) 30.00 28.48 28.78
Net Operating Revenues 191 213 239
Cost of Goods Sold (81) (109) (115)
Financial Results (45) (15) (96)
Net Earnings 29 58 (19)
Gross Margin (%) 57.6 48.8 51.9
EBITDA 98 93 114
EBITDA Margin (%) 51.3 43.7 47.7
Gross Debt (in US$ million)
- Short Term 164 169 180
- Long Term 133 93 87
Total 297 262 267
FERTECO 2Q 01 1Q 02 2Q 02
Sales (thousand tons) 3,955 3,259 4,777
Foreign Market 598 2,470 3,434
Domestic Market 4,553 789 1,343
Net Operating Revenues 159 127 195
Cost of Goods Sold (122) (70) (128)
Financial Results (19) (5) (44)
Net Earnings 18 29 (10)
Gross Margin (%) 23.3 44.9 34.4
EBITDA 44 52 63
EBITDA Margin (%) 27.7 40.9 32.3
Gross Debt (in US$ million)
- Short Term 86 55 58
- Long Term 101 94 88
Total 187 149 146
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IRON ORE AND PELLETS - FINANCIAL INDICATORS - NON AUDITED
million R$
GIIC* 2Q 01 1Q 02 2Q 02
Sales (thousand tons) 862 823 676
Net Operating Revenues 34,425 34,372 27,228
Cost of Goods Sold (29,905) (29,486) 23,,737)
Gross Profit 4,520 4,886 3,491
Other Income 482 112 79
S G & A (1,181) (1,102) (2,028)
Net Income 3,821 3,896 1,542
* financial indicators according to IASC (International Accounting Standards
Committee).
ITACO 2Q 01 1Q 02 2Q 02
Sales (thousand tons)
Iron Ore 9,765 14,266 16,650
Pellets 2,449 1,800 2,513
Manganese 368 246 250
Bauxite 152 140 407
Alumina 34 33 106
Aluminum 43 43 53
Net Operating Revenues 348,161 390,094 473,753
Cost of Goods Sold (321,506) (346,965) (434,940)
Equity Income 1,088 16,744 (46,637)
Net Income 10,117 24,743 (37,427)
EBITDA 25,327 37,493 32,833
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MANGANESE AND FERRO-ALLOYS - FINANCIAL INDICATORS - NON AUDITED
million R$
SIBRA 2Q 01 1Q 02 2Q 02
Sales - Ferro-alloys (thousand tons) 24 29 31
Foreign Market 9 10 15
Domestic Market 15 19 16
Average Price (US$/ton) 489.44 445.67 439.85
Sales - Manganese (thousand tons) 339 278 265
Foreign Market 337 242 213
Domestic Market 2 36 52
Average Price (US$/ton) 46.54 55.11 47.75
Net Operating Revenues 58 62 60
Cost of Goods Sold (25) (32) (36)
Financial Results (4) (2) (5)
Net Earnings 20 34 22
Gross Margin (%) 56.9 48.4 40.0
EBITDA 35 31 21
EBITDA Margin (%) 60.3 50.0 35.0
Gross Debt (in US$ million)
- Short Term 24 24 23
- Long Term 51 25 21
Total 76 49 44
CPFL 2Q 01 1Q 02 2Q 02
Sales (thousand tons) 37 37 37
Foreign Market 20 13 17
Domestic Market 17 24 20
Average Price (US$/ton) 583.02 517.01 569.36
Net Operating Revenues 45 39 47
Cost of Goods Sold (30) (27) (34)
Financial Results 1 1 1
Net Earnings 2 10 10
Gross Margin (%) 33.3 30.8 27.7
EBITDA 3 11 9
EBITDA Margin (%) 6.7 28.2 19.1
Gross Debt (in US$ million)
- Short Term 9 7 6
- Long Term 10 4 4
Total 20 11 9
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ALUMINUM - SELECTED FINANCIAL INDICATORS - ADJUSTED AND NON AUDITED
million R$
MRN 2Q 01 1Q 02 2Q 02
Sales (thousand tons) 2,832 1,781 2,610
Foreign Market 886 485 790
Domestic Market 1,946 1,296 1,820
Average Price (US$/ton) 21.08 19.80 16.31
Net Operating Revenues 124 76 111
Cost of Goods Sold (58) (40) (61)
Financial Results (2) (2) (32)
Net Earnings 55 24 8
Gross Margin (%) 53.2 47.4 45.0
EBITDA 75 46 59
EBITDA Margin (%) 60.5 60.5 53.2
Gross Debt (in US$ million)
- Short Term 1 14 19
- Long Term - 96 90
Total 1 110 109
ALUNORTE 2Q 01 1Q 02 2Q 02
Sales (thousand tons) 407 427 410
Foreign Market 212 222 175
Domestic Market 195 205 235
Average Price (US$/ton) 192.33 161.55 165.72
Net Operating Revenues 188 165 174
Cost of Goods Sold (129) (136) (135)
Financial Results (76) (11) (198)
Net Earnings (17) 10 (142)
Gross Margin (%) 31.4 17.6 22.4
EBITDA 65 35 49
EBITDA Margin (%) 34.6 21.2 28.2
Gross Debt (in US$ million)
- Short Term 47 - -
- Long Term 425 455 455
Total 472 455 455
ALBRAS 2Q 01 1Q 02 2Q 02
Sales (thousand tons) 92 88 110
Foreign Market 88 84 108
Domestic Market 4 4 2
Average Price (US$/ton) 1,470.68 1,319.81 1,332.13
Net Operating Revenues 308 274 366
Cost of Goods Sold (176) (171) (224)
Financial Results (114) (11) (333)
Net Earnings 9 76 (186)
Gross Margin (%) 42.9 37.6 38.8
EBITDA 137 106 150
EBITDA Margin (%) 44.5 38.7 41.0
Gross Debt (in US$ million)
- Short Term 167 73 49
- Long Term 496 524 507
Total 663 597 555
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ALUMINUM - SELECTED FINANCIAL INDICATORS - ADJUSTED AND NON AUDITED
million R$
VALESUL 2Q 01 1Q 02 2Q 02
Sales (thousand tons) 26 21 23
Foreign Market 9 9 12
Domestic Market 17 12 11
Average Price (US$/ton) 1,882.41 1,720.97 1,663.20
Net Operating Revenues 99 78 93
Cost of Goods Sold (68) (64) (72)
Financial Results 4 (1) 1
Net Earnings 16 6 15
Gross Margin (%) 31.3 17.9 22.6
EBITDA 22 14 24
EBITDA Margin (%) 22.2 17.9 25.8
Gross Debt (in US$ million)
- Short Term 10 1 1
- Long Term 2 2 1
Total 12 3 2
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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."
CONTENTS
PART I PAGE
1- Management's Discussion and Analysis of the Operating Results for Six
Months Ended June 30, 2002 Compared with Six Months Ended June 30, 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- Consolidated 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 10
1.3.8- Income Tax and Social Contribution 10
PART II
QUARTERLY INFORMATION AND NOTES TO THE QUARTERLY INFORMATION
2- Balance Sheet 11
3- Statement of Income 12
4- Statement of Changes in Stockholders' Equity 13
5- Statement of Cash Flows (Additional Information) 14
6- Notes to the Quarterly Information at June 30, 2002 and 2001 15
6.1- Operations 15
6.2- Presentation of Quarterly Information 15
6.3- Significant Accounting Policies 15
6.4- Cash and Cash Equivalents 15
6.5- Accounts Receivable from Customers 16
6.6- Transactions with Related Parties 16
6.7- Inventories 16
6.8- Deferred Income Tax and Social Contribution 17
6.9- Investments 18
6.10- Property, Plant and Equipment 21
6.11- Loans and Financing 22
6.12- Securitization Program 23
6.13- Contingent Liabilities 24
6.14- Environmental and Site Reclamation and Restoration Costs 25
6.15- Pension Plan - VALIA 26
6.16- Capital 26
6.17- American Depositary Receipts (ADR) Program 27
6.18- Treasury Stock 27
6.19- Financial Result 28
1
6.20- Financial Instruments - Derivatives 28
6.21- Exchange Rate Exposure 30
6.22- Other Net Operating Expenses 30
6.23- Subsequent Events 30
PART III
7- Other Information the Company Deems Relevant 32
7.1- Net Accumulated Income in R$ Million 32
7.2- Factors Affecting the Net Income in the Last 12 months in R$ Million 32
7.3- Business Performance Ratios 33
7.4- Segment and Geographic Information 33
7.5- Share Performance on Stock Exchanges (Unaudited) 35
7.6- Capital Expenditures (Unaudited) 35
7.7- Operations for the Period (Unaudited) 36
7.8- Changes in Prices (Unaudited) 36
7.9- Iron Ore and Pellet Sales (Main Markets) (Unaudited) 37
7.10- Shareholding Interests Organizational Chart at 06/30/02 38
7.11- Information about FERTECO (Unaudited) 39
7.12- Information about RDIF (Unaudited) 40
8- Attachment I - Equity Investment Information 41
8.1- Aluminum Area - ALBRAS (Adjusted and Unaudited) 41
8.2- Aluminum Area - ALUNORTE (Adjusted and Unaudited) 42
8.3- Aluminum Area - ALUVALE (Adjusted and Unaudited) 43
8.4- Aluminum Area - MRN (Adjusted and Unaudited) 44
8.5- Aluminum Area - VALESUL (Adjusted and Unaudited) 45
8.6- Pelletizing Affiliates - HISPANOBRAS (Adjusted and Unaudited) 46
8.7- Pelletizing Affiliates - ITABRASCO (Adjusted and Unaudited) 47
8.8- Pelletizing Affiliates - KOBRASCO (Adjusted and Unaudited) 48
8.9- Pelletizing Affiliates - NIBRASCO (Adjusted and Unaudited) 49
8.10- Pelletizing Affiliates - SAMARCO (Adjusted and Unaudited) 50
8.11- Iron Ore Area - FERTECO (Adjusted and Unaudited) 51
8.12- Manganese and Ferro Alloys Area - SIBRA (Adjusted and Unaudited) 52
8.13- Manganese and Ferro Alloys Area - CPFL (Adjusted and Unaudited) 53
9- Report of Independent Accountants 54
10- Members of the Board of Directors, Audit Committee,
Chief Executive Officer and Executive Directors 55
2
PART I
Expressed in thousands
1- MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE OPERATING RESULTS FOR SIX
MONTHS ENDED JUNE 30, 2002 COMPARED WITH SIX MONTHS ENDED JUNE 30, 2001
1.1- General Aspects
(a) The Company's segments of business are mining, logistics and energy, as
follows:
o Ferrous minerals: includes iron ore and pellets as well as manganese
and ferro-alloys;
o Non-ferrous minerals: includes gold, kaolin, potash and copper;
o Logistics: includes railroads, ports and maritime terminals and
shipping;
o Energy: includes electric power generation; and
o Shareholdings: includes interests in producers of aluminum, steel and
fertilizers.
(b) The variations of the main currencies and indexes at 06/30/02 and 06/30/01
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
-------------- --------------- ---------- ---------- ---------- ----------- ----------- ------------
06/30/02 22.6 34.3 14.7 3.5 4.8 2.8444 119.80
06/30/01 17.9 8.2 (1.8) 4.3 4.5 2.3049 124.93
About 62% of the Company's gross revenue at 06/30/02 and 67% 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
06/30/02 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);
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
06/30/02:
In thousands
of metric tons In thousands of
(except gold) reais
---------------- ----------------
Iron ore 67,329 2,777,536
Pellets 13,080 1,076,886
---------------- ----------------
80,409 3,854,422
Railroad transportation 25,081 425,408
Sea transportation 34,730 94,769
Port services 13,758 152,831
Gold (kg) 7,071 168,565
Manganese and Ferrou Alloys 505 392,239
Potash 305 99,685
Steel 942 682,419
Aluminum 1,865 842,853
Kaolin 179 73,664
Other products and services - 26,009
----------------
6,812,864
================
06/30/02 - R$6,812,864/US$2,791,228
PER MARKET PER PRODUCT
------------------------------- --------------------------
EM Brazil... 80% R$4,551,715 Iron Ore .............. 40%
US$1,864,837 Pellets ............... 17%
Aluminium ............. 12%
IM From Steel ................. 10%
Abroad....... 20% R$871,601 Transport ............. 10%
US$357,095 Manganese, Potash
and others ........... 9%
R$1,389,548 Gold .................. 2%
US$569,296
4
1.2.2- Consolidated Cost of Products and Services
By category
06/30/02
---------
Personnel 461,796
Material 726,807
Oil and gas 373,980
Outsourced services 455,702
Energy 254,928
Acquisition of products 695,222
Others 428,827
---------
Sub total 3,397,262
Depreciation and depletion 526,100
---------
Total 3,923,362
=========
1.3- Comments on the Parent Company Results
The net income of the Company for the first semester of 2002 was R$ 718,388 (net
income of R$ 633,138 in the first quarter and R$ 85,250 in the second quarter) a
40.4% decrease on the R$ 1,205,898 in the first semester of 2001, reducing the
earnings per share to R$ 1.87 on 06/30/02 from R$ 3.13 on 06/30/01. We point out
that the result of year 2001 includes gain on sales of investments, basically
Bahia Sul, in the amount of R$ 298,972.
The decrease of 2.3% in the gross margin (44.8% on 06/30/02, against 47.1% on
06/30/01) was due to cost of products and services increase of 20.4% (from R$
1,515,092 on 06/30/01 to R$ 1,824,537 on 06/30/02), while gross revenue rose
16.0% (from R$ 2,969,114 on 06/30/01 to R$ 3,444,193 on 06/30/02). The market of
pellets decreased 5.8% in terms of sales volumes. This decrease was monetarily
offset by the valorization of the US dollar against the real, due to 82% of
Company's revenues are denominated in US dollar.
1.3.1- Gross Revenues
Gross revenues increased 16.0% (from R$ 2,969,114 on 06/30/01 to R$ 3,444,193 on
06/30/02). This reflects the strengthening of the U.S. dollar against the real
as well as a growth in iron ore, gold and potash 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 mining operations previously belonging to Samitri,
since 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 that Company and absorbed related costs.
5
The following table shows sales volume and revenues by products and services:
In thousands of metric tons
(except gold) In millions of reais
---------------------------- -------------------------------
06/30/02 06/30/01 (DELTA)% 06/30/02 06/30/01 (DELTA)%
------------- -------------- ----------- --------------- --------------- -----------
External market
Iron ore 44,562 35,060 27.1 1,574,904 1,134,314 38.8
Pellets 5,907 6,588 (10.3) 394,403 419,314 (5.9)
------------- -------------- --------------- ---------------
50,469 41,648 21.2 1,969,307 1,553,628 26.8
------------- -------------- --------------- ---------------
Internal market
Iron ore 18,106 18,524 (2.3) 541,204 495,744 9.2
Pellets 1,418 1,192 19.0 132,673 115,807 14.6
------------- -------------- --------------- ---------------
19,524 19,716 (1.0) 673,877 611,551 10.2
------------- -------------- --------------- ---------------
Total
Iron ore 62,668 53,584 17.0 2,116,108 1,630,058 29.8
Pellets 7,325 7,780 (5.8) 527,076 535,121 (1.5)
------------- -------------- --------------- ---------------
69,993 61,364 14.1 2,643,184 2,165,179 22.1
------------- -------------- --------------- ---------------
Railroad transportation 28,170 32,653 (13.7) 392,134 430,015 (8.8)
Port services 12,524 17,926 (30.1) 109,934 110,628 (0.6)
Gold (kg) 7,070 6,937 1.9 168,565 129,827 29.8
Potash 305 284 7.4 99,685 88,407 12.8
Other products and services - 197 (100.0) 30,691 45,058 (31.9)
--------------- ---------------
3,444,193 2,969,114 16.0
=============== ===============
Operating Revenue 06/30/02 - R$3,444,193/US$1,406,927
PER MARKET PER PRODUCT PER CURRENCIES*
---------------------- --------------------------- ---------------
EM.. 62% R$2,137,872 Iron Ore .............. 62% R$.. 18%
US$873,305 Pellets ............... 15%
Transport ............. 15% US$.. 82%
IM.. 38% US$ Gold .................. 5%
R$697,420 Potash and others ..... 3%
US$284,891
R$
R$608.901
US$248,731
4
(*) Part of sales to the internal market are in U.S. dollars.
6
1.3.2- Cost of Products and Services
The increase of 20.4% in the cost of products and services (from R$ 1,515,092 at
06/30/01 to R$ 1,824,537 at 06/30/02) is due principally to 17,0% increase in
sales volume of iron ore (in function of Samitri's incorporation), the exchange
rate variation of 32% of total costs and amortization of goodwill from Samitri
in 2002. The following table shows each component of the cost of products and
services, and the change between periods:
By category
Denominated
---------------------
R$ US$ 06/30/02 06/30/01 (DELTA)%
---------- ---------- ---------- ---------- ---------
Personnel 253,588 - 253,588 202,267 25.4
Material 155,146 75,041 230,187 178,550 28.9
Oil and gas 136,577 34,144 170,721 145,207 17.6
Outsourced services 237,444 9,893 247,337 195,243 26.7
Energy 57,289 - 57,289 39,621 44.6
Acquisition of iron ore and pellets 6,153 387,163 393,316 425,306 (7.5)
Others 52,808 81,793 134,601 103,718 29.8
---------- ---------- ---------- ----------
Subtotal 899,005 588,034 1,487,039 1,289,912 15.3
Depreciation and depletion 288,660 - 288,660 216,963 33.0
Amortization of goodwill 48,838 - 48,838 8,217 494.4
---------- ---------- ---------- ----------
Total 1,236,503 588,034 1,824,537 1,515,092 20.4
========== ========== ========== ==========
68% 32% 100%
========== ========== ==========
1.3.3- Result of Shareholdings
The results of shareholdings by business area are as follows:
Business Area 06/30/02 06/30/01
--------------------------------------- --------------- ----------------
Ferrous
.. Iron ore and pellets 682,921 254,024
.. Manganese and ferro-alloys 61,672 (16,478)
Non-ferrous (35,606) (8,736)
Logistics (133,435) 60,683
Investments
.. Steel 48,512 186,915
.. Pulp and paper 4,783 11,555
.. Aluminum (61,594) 55,835
.. Fertilizers 5,329 2,443
Others (13,995) -
--------------- ----------------
558,587 546,241
=============== ================
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, increasing from a gain of R$ 546,241 on 06/30/01 to R$ 558,587
on 06/30/02. This variation was due to a combination of the following factors:
Ferrous
(a) Iron ore and pellets
ITABRASCO - A reduction in the equity result of R$ 6,102 (gain of R$ 4,047
at 06/30/02 against a gain of R$ 10,149 at 06/30/01) due to a 4.5% decrease
in the average sale price (US$ 29.99 per ton at 06/30/02 against US$ 31.41
per ton at 06/30/01) offset partly by an increase in sales volume of 1.9%
(from 1,550 thousand tons at 06/30/01 to 1,579 thousand tons at 06/30/02).
7
.. ITACO - An improved equity result of R$ 83,301 (a gain of R$ 131,523 at
06/30/02 against a gain of R$ 48,222 at 06/30/01), due to 37.6% higher iron
ore sales volume (42,550 thousand tats in 2002 against 30,923 thousand tats
in 2001) including sales to its subsidiary CVRD Overseas.
.. ITABIRA INTERNATIONAL - In 2002, R$ 231,757 of exchange rate variation was
booked.
.. KOBRASCO - A reduction in the equity result of R$ 13,809 (a loss of R$
23,126 at 06/30/02 versus a loss of R$ 9,317 at 06/30/01), due to the
increased negative effects of exchange rate variation on debt, a 2.2%
reduction in the average sale price (US$ 30.39 per ton at 06/30/02 against
US$ 31.07 per ton at 06/30/01) and a 6.3% fall in volume sold (1,868
thousand tons at 06/30/02 against 1,993 thousand tons at 06/30/01).
.. NIBRASCO - A reduction in the equity result of R$ 7,613 (a gain of R$ 671 at
06/30/02 against a gain of R$ 8,284 at 06/30/01), caused by a 22.1% fall in
sales volume (3,257 thousand tons at 06/30/2002 against 4,179 thousand tons
at 06/30/2001), offset partly by a 1.3% increase in the average sales price
(US$ 31.06 per ton at 06/30/02 versus US$ 30.67 per ton at 06/30/01).
.. RDE - An increased equity result of R$ 99,049 (a gain of R$ 253,880 at
06/30/02 against a gain of R$ 154,831 at 06/30/01), due basically to the
fall in the value of the real against the dollar (a positive exchange rate
variation of R$ 172,355 at 06/30/02 versus a positive exchange rate
variation of R$ 109,929 at 06/30/01).
.. SAMARCO - The equity result remained virtually stable (a gain of R$ 19,464
at 06/30/02 against a gain of R$ 18,578 at 06/30/01). In operational terms,
sales volume increased 6.6% (6,737 thousand tons at 06/30/02 against 6,318
thousand tons at 06/30/01) offset by a 2.5% fall in the average sales price
(US$ 28.63 per ton at 06/30/02 against US$ 29.37 per ton at 06/30/01) and by
the negative effects of exchange rate variation on debt.
.. FERTECO - An increase in the equity result of R$ 45,366 (a gain of R$ 47,709
at 06/30/2002 against a gain of R$ 2,343 at 06/30/2001). The company was
acquired in April 2001.
(b) Manganese and Ferro-alloys
.. RDME - An increase in the equity result of R$ 25,573 (a gain of R$ 33,137 at
06/30/02 versus a gain of R$ 7,564 at 06/30/01), due basically to the fall
in the exchange rate between the real and the euro in 2002.
.. SIBRA - A better equity result of R$ 42,818 (a gain of R$ 56,662 at 06/30/02
versus a gain of R$ 13,844 at 06/30/01), due to a 22.4% increase in
ferroalloy sales (60 thousand tons at 06/30/02 against 49 thousand tons at
06/30/01) offset partly by a 16.6% fall in the price of ferroalloys (US$
448.03 per ton at 06/30/02 against US$ 536.93 per ton at 06/30/01) as well
as a 15.0% increase in the average manganese sales price (US$ 51.39 per ton
at 06/30/02 against US$ 44.70 per ton at 06/30/01) also partly offset by a
1.3% decrease in manganese sales volume (543 thousand tons at 06/30/02
against 550 thousand tons at 06/30/01).
.. URUCUM - An improved equity result of R$ 9,754 (a gain of R$ 11,253 at
06/30/02 against a gain of R$ 1,499 at 06/30/01), due mainly to an increase
of 140.3% in manganese sales (173 thousand tons at 06/30/02 against 72
thousand tons at 06/30/01).
Non-ferrous
.. PARA PIGMENTOS - A provision for losses of R$ 35,104 was booked on 06/30/02,
due to the negative effects of exchange rate variation on debt, against a
loss of R$ 8,486 at 06/30/01, arising from amortization of goodwill.
Logistics
.. DOCENAVE - A reduction in the equity result of R$ 12,817 (a gain of R$
51,541 at 06/30/02 against a gain of R$ 64,358 at 06/30/01), due to a 29.8%
decrease in average freight rates (US$ 5.36 per ton at 06/30/02 versus US$
7.64 per ton at 06/30/01), offset partly by the appreciation of the dollar
against the real.
.. DOCEPAR - R$ 50,735 basic refers to a provision for loss on tax assets.
.. FCA - R$ 49,285 of amortization of goodwill was booked on 06/30/02, along
with R$ 25,733 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.
.. MRS - R$ 14,286 of amortization of goodwill was booked on 06/30/02 along
with R$ 32,515 as a provision for losses, the latter arising from the
negative effects of exchange rate variation on debt. This investment is held
through Ferteco Mineracao S.A., Belem Administracoes e Participacoes Ltda.
and Caemi Mineracao e Metalurgia S.A.
8
Shareholdings
(a) Steel
.. CSI - An increase in the equity result of R$ 61,468 (a gain of R$ 119,379 at
06/30/02 against a gain of R$ 57,911 at 06/30/01), caused by an 13.8%
increase in sales volume and the appreciation of the dollar against the real
(positive exchange rate variation of R$ 101,066 at 06/30/02 versus a
positive variation of R$ 64,447 at 06/30/01).
.. CSN - An equity result of R$ 107,522 was recorded at 06/30/01 due to
unwinding the cross shareholdings between CVRD and CSN carried out in March
2001.
.. CST - A lower equity result of R$ 19,662 (a loss of R$ 32,352 at 06/30/02
against a loss of R$ 12,690 at 06/30/01), due mainly to the increased
negative effects of exchange rate variation on indebtedness, offset in part
by an 3.4% increase in sales volume (2,447 thousand tons in 2002 against
2,355 thousand tons in 2001).
USIMINAS - A reduction in the equity result of R$ 28,101 (a loss of R$
25,553 at 06/30/02 versus a gain of R$ 2,548 at 06/30/01) caused mainly by
the negative effects of exchange rate variation on indebtedness.
(b) Aluminum
.. ALBRAS - A reduced equity result of R$ 60,091 (a loss of R$ 56,148 at
06/30/02 against a gain of R$ 3,943 at 06/30/01), due to increased negative
effects of exchange rate variation on the company's debt. In operational
terms, the average aluminum sales price fell 11.6% (US$ 1,326.67 per ton at
06/30/02 compared with US$ 1,501.45 per ton at 06/30/01) and sales volume
rose by 8.8% (198 thousand tons at 06/30/02 against 182 thousand tons at
06/30/01).
.. ALUNORTE - A reduced equity result of R$ 31,297 (a loss of R$ 59,398 at
06/30/02 against a loss of R$ 28,101 at 06/30/01), due to increased negative
effects of exchange rate variation on the company's debt. Operationally, the
average sales price of alumina fell 16.3% (US$ 163.59 per ton at 06/30/02
versus US$ 195.39 per ton at 06/30/01) while sales volume increased 8.7%
(837 thousand tons at 06/30/02 versus 770 thousand tons at 06/30/01).
.. MRN - A reduction in the equity result of R$ 23,920 (a gain of R$ 12,893 at
06/30/02 against a gain of R$ 36,813 at 06/30/01), due to a decrease in
sales volume of 12.5% (4,391 thousand tons at 06/30/02 compared with 5,017
thousand tons at 06/30/01), average sales price fell 13.3% (US$ 18.39 per
ton at 06/30/02 against US$ 21.22 per ton at 06/30/01), as well as the
negative effects of the exchange variation on the Company's debt.
.. VALESUL - A reduction in the equity result of R$ 1,524 (a gain of R$ 11,518
at 06/30/02 against a gain of R$ 13,042 at 06/30/01), caused by a decrease
of 14.1% in the average sales price (US$ 1,690.23 per ton at 06/30/02
against US$ 1,967.99 per ton at 06/30/01), while sales volume rose 4.8% (44
thousand tons at 06/30/02 versus 42 thousand tons at 06/30/01)
.. ALUVALE - An increase in the equity result (own operations) of R$ 3,212 (a
gain of R$ 16,125 at 06/30/02 against a gain of R$ 12,913 at 06/30/01)
basically due to financial result.
.. ITACO - A reduction in the equity result of R$ 3,809 (a gain of R$ 13,416 at
06/30/02 against a gain of R$ 17,225 at 06/30/01), due to a fall in the
average sales prices of aluminum (12.2%), alumina (23.8%) and bauxite
(21.5%), offset partly by higher sales volume for all three: aluminum
(11.6%), alumina (98.6%) and bauxite (31.2%).
1.3.4- Operating Expenses
The operating expenses increased R$ 35,687 (R$ 379,020 on 06/30/01 against R$
414,707 on 06/30/02), basically due to an increase of administrative expenses.
1.3.5- Net Financial Result
The net financial result decreased R$ 494,997 (R$ 715,849 on 06/30/01 compared
to R$ 1,210,846 on 06/30/02), 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.
9
1.3.7- Cash Flow
The operating cash flow measured by EBITDA (earnings before interest, income
tax, depreciation, amortization and depletion) was R$ 1,592,461 on 06/30/02,
reflecting an increase of 8.7% over 06/30/01, which was R$ 1,464,677 (item 7.4).
1.3.8- Income Tax and Social Contribution
Income tax and social contribution was a credit of R$ 303,859 (credit of R$
109,254 on 06/30/01), after recognizing the benefit from paying interest on
stockholders' equity of R$ 122,126 on 06/30/02 (R$ 205,003 on 06/30/01) (Note
6.8).
10
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
----------------------------------------------------------------------------------------
Assets
Notes 06/30/02 03/31/02
----- -------- --------
Current assets
Cash and cash equivalents 6.4 521,835 1,260,372
Accounts receivable from customers 6.5 989,739 961,100
Related parties 6.6 1,687,540 1,356,024
Inventories 6.7 401,925 415,021
Taxes recoverable - 111,465 97,907
Deferred income tax and social contribution 6.8 569,017 638,759
Others - 270,114 256,986
---------- ----------
4,551,635 4,986,169
---------- ----------
Long-term receivables
Related parties 6.6 1,711,249 1,424,072
Loans and financing - 296,237 262,436
Deferred income tax and social contribution 6.8 636,922 297,262
Judicial deposits 6.13 558,310 539,226
Others - 38,587 38,889
---------- ----------
3,241,305 2,561,885
---------- ----------
Permanent assets
Investments 6.9 8,904,602 8,518,246
Property, plant and equipment 6.10 8,126,748 7,764,886
---------- ----------
17,031,350 16,283,132
---------- ----------
24,824,290 23,831,186
========== ==========
Liabilities and stockholders' equity
Current liabilities
Short-term debt 6.11 1,668,905 1,774,835
Current portion of long-term debt 6.11 627,483 356,672
Payable to suppliers and contractors - 518,574 446,208
Related parties 6.6 720,089 678,482
Provision for interest on stockholders' equity - 359,194 316,569
Interest on stockholders' equity - 2001 - 6,747 783,837
Payroll and related charges - 96,914 102,488
Pension Plan 6.15 64,533 63,896
Others - 104,391 126,016
---------- ----------
4,166,830 4,649,003
---------- ----------
Long-term liabilities
Long-term debt 6.11 4,052,689 3,359,584
Related parties 6.6 2,690,581 2,086,651
Deferred income tax and social contribution 6.8 75,158 81,692
Provisions for contingencies 6.13 1,028,605 903,816
Pension Plan 6.15 429,493 425,580
Others - 255,419 241,971
---------- ----------
8,531,945 7,099,294
---------- ----------
Stockholders' equity
Paid-up capital 6.16 5,000,000 4,000,000
Capital reserves - - 443,684
Revenue reserves - 7,125,515 7,639,205
---------- ----------
12,125,515 12,082,889
---------- ----------
24,824,290 23,831,186
========== ==========
The additional information, notes and attachment I are an integral part of these
statements.
11
(A free translation of the original in Portuguese relating to the financial
statements prepared in accordance with the requirements of Brazilian Corporate
Law)
3- STATEMENT OF INCOME In thousands of reais
------------------------------------------------------------------------------------------------------------------------------------
From From From From
04/01/02 01/01/02 04/01/02 01/01/02
Notes to 06/30/02 to 06/30/02 to 06/30/02 to 06/30/02
----- ----------- ----------- ----------- -----------
Operating revenues
Sales of ore and metals
Iron ore and pellets 1,408,409 2,643,184 1,171,332 2,165,179
Gold 88,633 168,565 72,364 129,827
Others 61,901 99,685 54,443 108,586
--------- --------- --------- ----------
1,558,943 2,911,434 1,298,139 2,403,592
Railroad and port services 271,696 502,068 281,229 540,643
Others 12,751 30,691 14,823 24,879
--------- --------- --------- ----------
1,843,390 3,444,193 1,594,191 2,969,114
Value Added taxes (81,613) (138,161) (53,551) (107,722)
--------- --------- --------- ----------
Net operating revenues 1,761,777 3,306,032 1,540,640 2,861,392
--------- --------- --------- ----------
Cost of products and services
Ore and metals (790,972) (1,464,296) (698,218) (1,295,585)
Railroad and port services (90,977) (179,169) (101,713) (200,605)
Others products and services (90,510) (181,072) (9,835) (18,902)
--------- --------- --------- ----------
(972,459) (1,824,537) (809,766) (1,515,092)
--------- --------- --------- ----------
Gross profit 789,318 1,481,495 730,874 1,346,300
Gross margin 44.8% 44.8% 47.4% 47.1%
Operating expenses
Selling (35,254) (63,426) (27,863) (52,844)
Administrative (94,357) (185,032) (69,720) (125,794)
Research and development (30,810) (52,067) (21,477) (41,069)
Other operating expenses, net 6.22 (77,298) (114,182) (102,294) (159,313)
--------- --------- --------- ----------
(237,719) (414,707) (221,354) (379,020)
--------- --------- --------- ----------
Operating profit before financial result and
result of investment participations 551,599 1,066,788 509,520 967,280
Result of investment participations 6.9
Gain on investments accounted for by the equity method 625,586 909,701 265,362 563,362
Amortization of goodwill (103,526) (169,714) (27,290) (52,981)
Provision for losses (115,378) (182,128) - 25,454
Others - 728 - 10,406
--------- --------- --------- ----------
406,682 558,587 238,072 546,241
Financial result, net 6.19
Financial expenses (income) (147,989) (236,788) (116,323) (200,589)
Monetary and exchange rate variation, net (997,527) (974,058) (184,169) (515,260)
--------- --------- --------- ----------
(1,145,516) (1,210,846) (300,492) (715,849)
--------- --------- --------- ----------
Operating profit (187,235) 414,529 447,100 797,672
Discontinued operations - - 56,406 298,972
--------- --------- --------- ----------
Income before income tax and social contribution (187,235) 414,529 503,506 1,096,644
Income tax and social contribution 6.8 272,485 303,859 42,414 109,254
--------- --------- --------- ----------
Net income for the period 85,250 718,388 545,920 1,205,898
========= ========= ========= ==========
Number of shares outstanding at the end of the period (in thousands) 383,839 383,839 385,026 385,026
========= ========= ========= ==========
Net earnings per share outstanding at the end of the period (R$) 0.22 1.87 1.42 3.13
========= ========= ========= ==========
The additional information, notes and attachment I are an integral part of these statements.
12
(A free translation of the original in Portuguese relating to the financial
statements prepared in accordance with the requirements of Brazilian Corporate
Law)
4- STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY In thousands of reais
-----------------------------------------------------------------------------------------------------------------------------------
Capital Revenue Retained
Notes 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
--------- ---------- ---------- ---------- ----------
Capitalization of reserves 6.16 1,000,000 (443,684) (556,316) - -
Treasury shares - - (242) - (242)
Net income for the period - - - 718,388 718,388
Provision for interest on stockholders' equity - - - (359,194) (359,194)
--------- ---------- ---------- ---------- ----------
On June 30, 2002 5,000,000 - 6,766,321 359,194 12,125,515
========= ========== ========== ========== ==========
The additional information, notes and attachment I are an integral part of these statements.
13
(A free translation of the original in Portuguese)
5- STATEMENT OF CASH FLOWS (ADDITIONAL INFORMATION) In thousands of reais
-------------------------------------------------------------------------------------------------------
06/30/02 06/30/01
-------- --------
Cash flows from operating activities:
Net income for the period 718,388 1,205,898
Adjustments to reconcile net income for the period
with cash provided by operating activities:
Result of investment participations (558,587) (546,241)
Depreciation, amortization and depletion 285,974 245,414
Deferred income tax and social contribution (307,826) (109,254)
Provision for contingencies 28,165 89,942
Discontinued operations - (298,972)
Net monetary and exchange rate variations on assets and liabilities 1,280,424 684,764
Provision for losses - ICMS 20,993 -
Loss on disposal of property, plant and equipment 18,140 (696)
Dividends/interest on stockholders' equity received 89,642 137,747
Others 117,375 23,900
---------- ----------
1,692,688 1,432,502
---------- ----------
Decrease (increase) in assets:
Accounts receivable (93,050) 564,804
Inventories 44,284 (99,934)
Others (33,330) 16,332
---------- ----------
(82,096) 481,202
---------- ----------
Increase (decrease) in liabilities:
Suppliers and contractors (4,231) 54,772
Payroll and related charges and others (21,298) 2,413
Others 1,336 17,409
(24,193) 74,594
---------- ----------
Net cash provided by operating activities 1,586,399 1,988,298
---------- ----------
Cash flows from investing activities:
Loans and advances receivable (874,745) (1,759,631)
Guarantees and deposits (41,450) (115,045)
Additions to investments (2,197) (55,262)
Additions to property, plant and equipment (706,876) (475,017)
Proceeds from disposal of property, plant and equipment and investments 2,063 688,957
---------- ----------
Net cash used in investing activities (1,623,205) (1,715,998)
---------- ----------
Cash flows from financing activities:
Short-term debt 430,486 1,249,581
Long-term debt 539,786 243,017
Repayments:
Related parties (89,764) (406,618)
Financial institutions (189,713) (166,364)
Interest on stockholders' equity paid (777,258) (1,279,283)
Treasury shares (242) -
---------- ----------
Net cash used in financing activities (86,705) (359,667)
---------- ----------
Decrease in cash and cash equivalents (123,511) (87,367)
Cash and cash equivalents, beginning of the period 645,346 1,569,185
---------- ----------
Cash and cash equivalents, end of the period 521,835 1,481,818
========== ==========
Cash paid during the period for:
Short-term interest (20,409) (26,285)
Long-term interest net of capitalization (104,921) (142,973)
Income tax and social contribution paid (3,966) (81,731)
Non-cash transactions:
Change in treasury stocks - CVRD - 3,564
Conversion of loans into investments 92,906 -
Receipt of dividneds form MSG net of other amounts 2,454 -
Increase in property, plant and equipment 145,171 53,468
14
(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 JUNE 30, 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 06/30/02 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
06/30/02 03/31/02
------------ -------------
Marketable securities related to CDI (*) 338,377 931,263
Fixed-yield bond investments (funds) 96,084 133,320
Government securities (NBC-E, NTN-D, LFT) 84,509 194,556
Others 2,865 1,233
------------ -------------
521,835 1,260,372
============ =============
(*) For part of these investments the Company, contracted swap operations with
financial institutions, related to interest rate and/or currency variations.
15
6.5- Accounts Receivable from Customers
06/30/02 03/31/02
------------ ------------
Domestic 388,086 360,666
Export 645,248 638,965
------------ ------------
1,033,334 999,631
Allowance for doubtful accounts (23,355) (22,436)
Allowance for ore weight credits (20,240) (16,095)
------------ ------------
989,739 961,100
============ ============
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
----------------------- -----------------------
06/30/02 03/31/02 06/30/02 03/31/02
------------------------------------------------
Subsidiaries
Rio Doce International Finance Ltd. 1,336,399 1,076,263 1,443,180 1,227,546
Itabira Rio Doce Company Limited - ITACO 492,065 417,609 489,611 226,460
Mineracao Tacuma Ltda. 359,460 392,907 756 674
CVRD Overseas Ltd. 146,250 105,019 1,009,242 728,284
Docepar S.A. 129,794 68,950 132 125
SIBRA Eletrosiderurgica Brasileira S.A. 17,260 23,461 1,029 13,745
Brasilux S.A. 16,014 50,410 26,046 24,188
Vale do Rio Doce Aluminio S.A. - ALUVALE 22,449 22,783 49,915 133,812
Others 314,179 162,946 290,955 225,115
----------- ----------- ----------- -----------
2,833,870 2,320,348 3,310,866 2,579,949
----------- ----------- ----------- -----------
Jointly controlled companies
ALUNORTE - Alumina do Norte do Brasil S.A. 879,060 708,046 29,619 112,694
Ferrovia Centro-Atlantica S.A. 28,515 7,445 - 11,796
Salobo Metais S.A. 170,443 164,777 - -
Companhia Coreano-Brasileira de Pelotizacao - KOBRASCO 94,825 80,413 97,764 75,211
Companhia Hispano-Brasileira de Pelotizacao - HISPANOBRAS 40,860 38,665 59,116 52,387
Companhia Nipo-Brasileira de Pelotizacao - NIBRASCO 68,029 48,993 42,406 21,103
Companhia Italo-Brasileira de Pelotizacao - ITABRASCO 38,884 37,741 43,551 33,453
Others 109,684 137,978 69,134 58,887
----------- ----------- ----------- -----------
1,430,300 1,224,058 341,590 365,531
----------- ----------- ----------- -----------
Affiliates 31,514 35,357 - 183
----------- ----------- ----------- -----------
4,295,684 3,579,763 3,652,456 2,945,663
=========== =========== =========== ===========
Represented by:
Commercial balances (sales and purchases
of products and services) (*) 896,895 799,667 241,786 180,530
Short-term financial balances 1,687,540 1,356,024 720,089 678,482
Long-term financial balances 1,711,249 1,424,072 2,690,581 2,086,651
----------- ----------- ----------- -----------
4,295,684 3,579,763 3,652,456 2,945,663
=========== =========== =========== ===========
(*) Included in "Accounts receivable from customers" and "Payable to suppliers
and contractors."
6.7- Inventories
06/30/02 03/31/02
------------------ -----------------
Finished products
. Iron ore and pellets 99,282 116,908
. Manganese 319 1,442
. Gold 13,187 15,546
. Others 18,504 23,240
------------------ -----------------
131,292 157,136
Spare parts and maintenance supplies 270,633 257,885
------------------ -----------------
401,925 415,021
================== =================
16
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
--------------------- ---------------------
06/30/02 03/31/02 06/30/02 03/31/02
--------- --------- --------- ---------
Tax loss carryforward 359,738 207,904 -- --
Temporary differences:
. Pension Plan 164,462 167,131 -- --
. Contingent liabilities 285,252 253,907 -- --
. Provision for losses on assets 308,946 242,515 -- --
. Provision for losses on derivative financial instruments 32,035 26,580 -- --
. Others 55,506 37,984 -- --
--------- --------- --------- ---------
1,205,939 936,021 -- --
Inflationary profit -- -- 4,253 12,501
Capital reserve - special monetary restatement - Law 8,200 -- -- 10,861 14,327
Accelerated depreciation -- -- 9,835 10,904
Long-term sales -- -- 50,209 43,960
--------- --------- --------- ---------
Total 1,205,939 936,021 75,158 81,692
========= ========= ========= =========
Short-term 569,017 638,759 -- --
Long-term 636,922 297,262 75,158 81,692
--------- --------- --------- ---------
1,205,939 936,021 75,158 81,692
========= ========= ========= =========
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 current expectation is to realize deferred income tax by the end of the year
2003.
The amounts reported as income tax and social contribution which affected income
for the period are as follows:
06/30/02 06/30/01
---------- ----------
Income before income tax and social contribution 414,529 1,096,644
(-) Equity in results of subsidiaries and affiliated companies (909,701) (563,362)
(+) Non deductible goodwill 77,048 --
---------- ----------
(418,124) 533,282
Income tax and social contribution at combined tax rates 34% 34%
---------- ----------
Federal income tax and social contribution at statutory rates 142,162 (181,316)
Adjustments to net income which modify the effect on the result for the period:
. Income tax benefit from interest on stockholders' equity 122,126 205,003
. Fiscal incentives -- 78,979
. Revision of prior period tax return 25,156 --
. Others 14,415 6,588
---------- ----------
Income tax and social contribution 303,859 109,254
========== ==========
17
6.9- Investments
Adjusted
Partici- Adjusted net income
pation stockholders' (loss) for
% equity the period
---------- ---------------- -------------
Subsidiaries
Florestas Rio Doce S.A. (c) 99.85 95,762 4,790
Itabira Internacional Servicos e Comercio Lda. (a, c, h) 99.99 990,861 231,780
Navegacao Vale do Rio Doce S.A. - DOCENAVE (c) 100.00 402,161 51,541
Rio Doce Europa - S.'a.r.l (a, c, i) 99.80 2,763,932 541,745
S.A. Mineracao da Trindade - SAMITRI (c, d) 100.00 - -
SIBRA Eletrosiderurgica Brasileira S.A. (c, d, e, m) 99.23 265,581 55,489
Vale do Rio Doce Aluminio S.A. - ALUVALE (c, f, j, m) 94.74 751,522 (75,010)
Ferteco Mineracao S.A. (c, d, m) 100.00 544,020 18,999
Others (c)
Jointly controlled companies
Companhia Coreano-Brasileira de Pelotizacao - KOBRASCO (b, c, m) 50.00 (32,692) (46,253)
Companhia Hispano-Brasileira de Pelotizacao - HISPANOBRAS (b, c, m) 50.89 85,790 7,200
Companhia Italo-Brasileira de Pelotizacao - ITABRASCO (b, c, m) 50.90 65,720 7,951
Companhia Nipo-Brasileira de Pelotizacao - NIBRASCO (b, c, m) 51.00 84,259 1,317
Companhia Siderurgica de Tubarao - CST (b, c, d, e) 22.85 2,715,352 (141,586)
Companhia Siderurgica Nacional - CSN (c, k) - - -
Minas da Serra Geral S.A. - MSG (b, c) 51.00 57,939 6,928
Samarco Mineracao S.A. (b, c, m) 50.00 417,935 38,732
Others (b, c)
Affiliated companies
Ferroban - Ferrovias Bandeirantes S.A. (c) 3.75 - -
Fertilizantes Fosfatados S.A. - FOSFERTIL (c, e) 11.12 518,617 47,927
Usinas Siderurgicas de Minas Gerais S.A. - USIMINAS (c, d, e) 11.46 3,345,992 (222,974)
Investments at cost
Provision for losses
CELMAR S.A. - Industria de Celulose e Papel (c)
Companhia Coreano-Brasileira de Pelotizacao - KOBRASCO (b, c)
Companhia Ferroviaria do Nordeste (b, c)
DOCEPAR S.A. (c)
Ferrovia Centro-Atlantica S.A. (c, g)
MRS Logistica S.A. (c)
Para Pigmentos S.A. (c)
Others
Amortization of goodwill
Others
Total
Result of
Investments investment participations
---------------------------- ---------------------------
06/30/02 03/31/02 06/30/02 06/30/01
------------- -------------- ------------- ------------
Subsidiaries
Florestas Rio Doce S.A. (c) 95,619 93,700 4,783 4,170
Itabira Internacional Servicos e Comercio Lda. (a, c, h) 990,762 760,436 231,757 141,355
Navegacao Vale do Rio Doce S.A. - DOCENAVE (c) 402,161 368,115 51,541 64,358
Rio Doce Europa - S.'a.r.l (a, c, i) 2,758,404 2,309,339 580,502 154,831
S.A. Mineracao da Trindade - SAMITRI (c, d) 751,495 771,805 - 31,782
SIBRA Eletrosiderurgica Brasileira S.A. (c, d, e, m) 527,949 524,669 56,662 13,844
Vale do Rio Doce Aluminio S.A. - ALUVALE (c, f, j, m) 711,992 844,565 (71,065) 36,581
Ferteco Mineracao S.A. (c, d, m) 1,202,484 1,242,372 47,709 2,343
Others (c) 332,924 314,072 35,947 4,336
------------- -------------- ------------- ------------
7,773,790 7,229,073 937,836 453,600
------------- -------------- ------------- ------------
Jointly controlled companies
Companhia Coreano-Brasileira de Pelotizacao - KOBRASCO (b, c, m) - 8,304 (6,780) (9,317)
Companhia Hispano-Brasileira de Pelotizacao - HISPANOBRAS (b, c, m) 43,658 43,499 3,664 5,680
Companhia Italo-Brasileira de Pelotizacao - ITABRASCO (b, c, m) 33,451 30,657 4,047 10,149
Companhia Nipo-Brasileira de Pelotizacao - NIBRASCO (b, c, m) 42,973 40,128 671 8,284
Companhia Siderurgica de Tubarao - CST (b, c, d, e) 471,761 501,091 (32,352) (12,690)
Companhia Siderurgica Nacional - CSN (c, k) - - - 107,522
Minas da Serra Geral S.A. - MSG (b, c) 29,549 27,354 3,533 3,517
Samarco Mineracao S.A. (b, c, m) 208,968 255,019 19,464 -
Others (b, c) 100,393 97,438 3,736 874
------------- -------------- ------------- ------------
930,753 1,003,490 (4,017) 114,019
------------- -------------- ------------- ------------
Affiliated companies
Ferroban - Ferrovias Bandeirantes S.A. (c) - - (3,894) (9,248)
Fertilizantes Fosfatados S.A. - FOSFERTIL (c, e) 57,670 56,100 5,329 2,443
Usinas Siderurgicas de Minas Gerais S.A. - USIMINAS (c, d, e) 383,451 416,176 (25,553) 2,548
------------- -------------- ------------- ------------
441,121 472,276 (24,118) (4,257)
------------- -------------- ------------- ------------
Investments at cost 3,889 3,889 - -
------------- -------------- ------------- ------------
9,149,553 8,708,728 909,701 563,362
------------- -------------- ------------- ------------
Provision for losses
CELMAR S.A. - Industria de Celulose e Papel (c) (59,246) (59,246) - -
Companhia Coreano-Brasileira de Pelotizacao - KOBRASCO (b, c) (16,346) - (16,346) -
Companhia Ferroviaria do Nordeste (b, c) (29,118) (35,156) (4,393) -
DOCEPAR S.A. (c) (100,451) (95,675) (63,697) 25,454
Ferrovia Centro-Atlantica S.A. (c, g) - - (25,733) -
MRS Logistica S.A. (c) - - (32,515) -
Para Pigmentos S.A. (c) (35,104) - (35,104) -
Others (4,686) (405) (4,340) -
------------- -------------- ------------- ------------
(244,951) (190,482) (182,128) 25,454
------------- -------------- ------------- ------------
Amortization of goodwill - - (169,714) (52,981)
------------- -------------- ------------- ------------
Others - - 728 10,406
------------- -------------- ------------- ------------
Total 8,904,602 8,518,246 558,587 546,241
============= ============== ============= ============
(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;
18
(d) Goodwill and negative goodwill on investments are as follows:
06/30/02 03/31/02
-------------- --------------
Goodwill
SIBRA Eletrosiderurgica Brasileira S.A. (included R$ 27,192 of goodwill on CPFL) 291,605 311,726
Caemi Mineracao e Metalurgia S.A. (indirectly through ITACO) 490,617 504,192
Ferteco Mineracao S.A. 658,464 1,027,314
S.A. Mineracao da Trindade - SAMITRI (merged on October 1, 2001) 751,495 771,805
Mineracao SOCOIMEX S.A. (merged on August 31, 2000) 52,038 56,147
Others 141,083 93,547
-------------- --------------
2,385,302 2,764,731
============== ==============
Negative goodwill
Companhia Siderurgica de Tubarao - CST (148,697) (148,697)
-------------- --------------
(148,697) (148,697)
============== ==============
Goodwill was amortized as follows:
06/30/02 06/30/01
----------- ---------
Ferrovia Centro-Atlantica S.A. (c, g) (49,285) -
Ferteco Mineracao S.A. (c, d, l, n) (34,656) -
Para Pigmentos S.A. (c) - (8,486)
SIBRA Eletrosiderurgica Brasileira S.A. (includes R$ 1,601 on CPFL) (c, e) (40,260) (38,659)
MRS Logistica S.A. (c) (14,286) -
Caemi Mineracao e Metalurgia S.A. (indirectly through ITACO) (c) (26,505) -
Others (a, c, i) (4,722) (5,836)
----------- ---------
(169,714) (52,981)
=========== =========
(e) Investments in companies that were listed on stock exchanges on 06/30/02:
Book Value Market Value
----------------- -----------------
Companhia Siderurgica de Tubarao - CST 471,761 325,677
Fertilizantes Fosfatados S.A. - FOSFERTIL 57,670 106,635
Usinas Siderurgicas de Minas Gerais S.A. - USIMINAS 383,451 161,317
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
Partici- Adjusted Investments investment participations
pation stockholders' ------------------------ ----------------------------
% equity 06/30/02 03/31/02 06/30/02 06/30/01
------- -------------- ------------ ------------ ------------- -------------
ALBRAS - Aluminio Brasileiro S.A. (c, n) 51.00 113,162 57,713 152,592 (56,148) 3,943
ALUNORTE - Alumina do Norte do Brasil S.A. (c, n) 57.58 451,686 309,977 258,046 (59,398) (28,101)
Mineracao Rio do Norte S.A. (c, n) 40.00 562,633 225,054 237,959 12,893 36,813
Valesul Aluminio S.A. (c, n) 54.51 246,030 134,111 126,008 11,518 13,042
Own operations (14,863) 69,960 20,070 10,884
------------ ------------ ------------- -------------
711,992 844,565 (71,065) 36,581
============ ============ ============= =============
On 06/27/02, ALUVALE acquired the entire interest detained by its
affiliated company Mineracao Rio do Norte S.A. in ALUNORTE - Alumina do
Norte do Brasil S.A., equivalent to 12.62% of the total capital, for R$
118,877.
(g) The investment of CVRD in Ferrovia Centro-Atlantica S.A. is held through
its subsidiary Mineracao Tacuma S.A.;
19
(h) Indirect holdings through Itabira Internacional Servicos e Comercio Lda.:
Result of
Investments investment participations
----------------------------- ------------------------------
06/30/02 03/31/02 06/30/02 06/30/01
------------- -------------- -------------- --------------
California Steel Industries, Inc. - CSI (a, c) - - - 57,911
CVRD Overseas Ltd. (a, c) - - - 25,019
Gulf Industrial Investment Co. - GIIC (a, c) - - - 2,602
Rio Doce Manganese Europe - RDME (a, c) - - - 7,564
Vale do Rio Doce Aluminio S.A. - ALUVALE (c) - - - 2,029
Itabira Rio Doce Company Limited - ITACO (a, c) - - - 40,428
Other participations (a, c) - - - 5,802
Itabira Internacional Servicos e Comercio Lda. (a, c) 990,762 760,436 231,757 -
------------- -------------- -------------- --------------
990,762 760,436 231,757 141,355
============= ============== ============== ==============
In July 2001, Itabira Rio Doce Company Limited - ITACO was sold to Rio
Doce International Finance Ltd., a wholly owned subsidiary of Rio Doce
Europa - S.'a.r.l;
(i) Indirect holdings through Rio Doce Europa - S.'a.r.l:
Result of
Partici- Adjusted Investments investment participations
pation stockholders' ----------------------- ---------------------------
% equity 06/30/02 03/31/02 06/30/02 06/30/01
------- ------------- ------------ ------------ ------------- -------------
Caemi Mineracao e Metalurgia S.A. (c, d) 16.85 888,214 640,281 662,492 11,146 -
California Steel Industries, Inc. - CSI (a, c) 50.00 655,582 327,791 252,815 119,379 -
CVRD Overseas Ltd. (a, c) 100.00 298,666 298,666 196,901 86,074 -
Camelback Corporation (c) 100.00 115,971 115,971 115,971 - -
Gulf Industrial Investment Co. - GIIC (a, c) 50.00 192,910 96,455 77,131 7,577 -
Itabira Rio Doce Company Limited - ITACO (a, c, j) 99.99 1,046,334 1,046,229 1,029,815 58,865 -
Rio Doce Manganese Europe - RDME (a, c) 100.00 114,746 114,746 79,332 33,137 -
Siderar Sociedad Anonima Industrial y Comercial (c) 4.85 879,588 42,660 34,849 - -
Vale do Rio Doce Aluminio S.A. - ALUVALE (c, j, n) 5.26 751,522 39,530 46,891 (3,945) -
Other participations (a, c) 34,622 31,466 14,389 -
Own operations (a, c) 1,453 (218,324) 253,880 154,831
------------ -------------- -------------- -----------
2,758,404 2,309,339 580,502 154,831
Provision for losses - MRS
(indirectly through CAEMI) - - (8,463) -
Amortization of goodwill - MRS
(indirectly through CAEMI) - - (4,873) -
Amortization of goodwill -
Caemi Mineracao e Metalurgia S.A. - - (26,505) -
------------- -------------- -------------- -----------
2,758,404 2,309,339 540,661 154,831
============ ============== ============== ===========
(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) On 06/19/02, CVRD acquired from Anglo American Brasil Ltda. (Anglo), a
subsidiary of Anglo American plc, 44,172,369 common shares, corresponding
to 50% of the total capital of Salobo Metais S.A., for R$ 136,159. This
transaction was carried out through the intermediation of Caulim do
Brasil Investimentos S/A, a wholly owned CVRD subsidiary. With this
acquisition, CVRD became sole owner of Salobo;
(m) Attachment I presents additional information about the companies in the
areas of aluminum, pellets, manganese and ferro-alloys.
20
6.10- Property, Plant and Equipment
(a) By business area:
06/30/02 03/31/02
------------------------------------------------- -------------------------------------------------
Accumulated Accumulated
Cost depreciation Net Cost depreciation Net
--------------- ----------------- -------------- --------------- ---------------- --------------
Ferrous - Northern System
Mining 1,576,633 (747,076) 829,557 1,592,258 (755,405) 836,853
Railroads 2,684,114 (1,025,490) 1,658,624 2,679,655 (1,007,093) 1,672,562
Ports 515,353 (242,306) 273,047 514,629 (242,609) 272,020
Construction in progress 504,480 - 504,480 386,827 - 386,827
--------------- ----------------- -------------- --------------- ---------------- --------------
5,280,580 (2,014,872) 3,265,708 5,173,369 (2,005,107) 3,168,262
--------------- ----------------- -------------- --------------- ---------------- --------------
Ferrous - Southern System
Mining 2,565,310 (1,518,964) 1,046,346 2,543,794 (1,497,489) 1,046,305
Railroads 3,091,414 (1,862,571) 1,228,843 3,039,752 (1,857,867) 1,181,885
Ports 561,448 (429,961) 131,487 560,319 (430,303) 130,016
Construction in progress 399,008 - 399,008 407,447 - 407,447
--------------- ----------------- -------------- --------------- ---------------- --------------
6,617,180 (3,811,496) 2,805,684 6,551,312 (3,785,659) 2,765,653
--------------- ----------------- -------------- --------------- ---------------- --------------
Pelletizing 606,144 (438,587) 167,557 606,595 (439,011) 167,584
Construction in progress 527,386 - 527,386 447,747 - 447,747
--------------- ----------------- -------------- --------------- ---------------- --------------
1,133,530 (438,587) 694,943 1,054,342 (439,011) 615,331
--------------- ----------------- -------------- --------------- ---------------- --------------
Non-ferrous
Potash 113,853 (40,586) 73,267 111,653 (37,936) 73,717
Gold 601,136 (439,139) 161,997 605,464 (428,469) 176,995
Research and projects 41,828 (21,354) 20,474 41,349 (21,479) 19,870
Construction in progress 58,729 - 58,729 55,177 - 55,177
--------------- ----------------- -------------- --------------- ---------------- --------------
815,546 (501,079) 314,467 813,643 (487,884) 325,759
--------------- ----------------- -------------- --------------- ---------------- --------------
Logistics 903,256 (528,085) 375,171 902,354 (522,882) 379,472
Construction in progress 115,788 - 115,788 73,430 - 73,430
--------------- ----------------- -------------- --------------- ---------------- --------------
1,019,044 (528,085) 490,959 975,784 (522,882) 452,902
--------------- ----------------- -------------- --------------- ---------------- --------------
Energy 204,187 (16,768) 187,419 190,128 (15,145) 174,983
Construction in progress 305,900 - 305,900 203,357 - 203,357
--------------- ----------------- -------------- --------------- ---------------- --------------
510,087 (16,768) 493,319 393,485 (15,145) 378,340
--------------- ----------------- -------------- --------------- ---------------- --------------
Corporate 90,264 (39,945) 50,319 89,712 (43,642) 46,070
Construction in progress 11,349 - 11,349 12,569 - 12,569
--------------- ----------------- -------------- --------------- ---------------- --------------
101,613 (39,945) 61,668 102,281 (43,642) 58,639
--------------- ----------------- -------------- --------------- ---------------- --------------
Total 15,477,580 (7,350,832) 8,126,748 15,064,216 (7,299,330) 7,764,886
=============== ================= ============== =============== ================ ==============
(b) By classification of asset:
06/30/02 03/31/02
------------------------------------------------- -------------------------------------------------
Accumulated Accumulated
Cost depreciation Net Cost depreciation Net
--------------- ----------------- -------------- --------------- ---------------- --------------
Land and buildings 1,475,967 (650,244) 825,723 1,490,747 (642,999) 847,748
Installations 4,192,712 (2,650,739) 1,541,973 4,150,147 (2,619,567) 1,530,580
Equipment 905,388 (543,787) 361,601 910,348 (550,620) 359,728
Railroads 5,226,065 (2,768,729) 2,457,336 5,158,847 (2,731,840) 2,427,007
Mineral rights 433,826 (169,853) 263,973 433,826 (165,444) 268,382
Others 1,320,981 (567,480) 753,501 1,333,747 (588,860) 744,887
--------------- ----------------- -------------- --------------- ---------------- --------------
13,554,939 (7,350,832) 6,204,107 13,477,662 (7,299,330) 6,178,332
Construction in progress 1,922,641 - 1,922,641 1,586,554 - 1,586,554
--------------- ----------------- -------------- --------------- ---------------- --------------
Total 15,477,580 (7,350,832) 8,126,748 15,064,216 (7,299,330) 7,764,886
=============== ================= ============== =============== ================ ==============
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.
21
Depreciation, amortization and depletion of property, plant and equipment have
been allocated to cost of production and services and to administrative expenses
as follows:
06/30/02 06/30/01
------------- --------------
Cost of production and services 275,144 236,522
Administrative expenses 10,830 8,892
------------- --------------
285,974 245,414
============= ==============
6.11- Loans and Financing
Short-term
06/30/02 06/30/01
------------ ------------
Trade finance 1,668,905 1,774,835
============ ============
The average annual interest rates on short-term loans and financing on 06/30/02
and 06/30/01 were, respectively, 3.46% and 5.52%.
Long-term
Current Long-term
liabilities liabilities
------------------- -------------------
06/30/02 03/31/02 06/30/02 03/31/02
--------- --------- --------- ---------
Foreign operations
Loans and financing in:
U.S. dollars 500,622 265,303 2,162,742 1,801,544
Yen 25,747 18,964 83,950 61,833
Other currencies 746 535 1,286 1,070
Notes in U.S. dollars - - 1,422,200 1,161,800
Accrued charges 49,124 28,807 - -
--------- --------- --------- ---------
576,239 313,609 3,670,178 3,026,247
--------- --------- --------- ---------
Local operations
Indexed by TJLP, TR and IGP-M 10,758 9,707 58,282 61,514
Basket of currencies 33,450 26,716 61,326 55,658
Loans in U.S. dollars 2,167 1,770 255,010 210,156
Non-convertible debentures - - - 6,009
Accrued charges 4,869 4,870 7,893 -
--------- --------- --------- ---------
51,244 43,063 382,511 333,337
--------- --------- --------- ---------
627,483 356,672 4,052,689 3,359,584
========= ========= ========= =========
(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$ 2.8444 on 06/30/02 (R$ 2.3236 on 03/31/01) and (Y) 1.00 equal
to R$ 0.023787 on 06/30/02 (R$ 0.017520 on 03/31/01);
(b) Of the total loans and financing, R$ 801,210 are guaranteed by the
federal government (with full counter-guarantees) and R$ 94,390 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
06/30/02:
2003 1,132,999
2004 1,738,071
2005 445,774
2006 261,323
2007 onward 474,522
-------------------
4,052,689
===================
22
(d) Long-term external and domestic loans and financing were subject to annual
interest rates on 06/30/02 as follows:
Up to 3% 1,086,752
3.1 to 5% 1,626,852
5.1 to 7% 279,990
7.1 to 9% 107,175
9.1 to 11% 1,446,107
Over 11% 133,296
------------------
4,680,172
==================
(e) The estimated market values of long-term loans and financing calculated to
present value based on available interest rates as of 06/30/02 are close
to their market values;
(f) The loans and financing, by currencies/index in:
R$ 6,349,077
-----------------------
Dollar ......... 95%
Yen ............ 2%
Basket of
currencies ... 2%
Others ......... 1%
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 06/30/02 totals R$ 864,637 (R$ 11,317 in
current liabilities and R$ 853,320 in long-term liabilities) and is included in
related party liabilities to the subsidiary CVRD Overseas Ltd. (Note 6.6).
23
6.13 - Contingent Liabilities
At the quarterly 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
---------------------------------- -----------------------------------
06/30/02 03/31/02 06/30/02 03/31/02
---------------- ---------------- ----------------- -----------------
Tax contingencies 322,700 303,138 382,726 323,978
Labor claims 123,637 110,170 363,518 310,216
Civil claims 4,471 3,820 264,813 249,750
Marketable securities 101,385 117,980 - -
Others 6,117 4,118 17,548 19,872
---------------- ---------------- ----------------- -----------------
Total 558,310 539,226 1,028,605 903,816
================ ================ ================= =================
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:
06/30/02 03/31/02
---------------- ----------------
ALBRAS - Aluminio Brasileiro S.A. 1,015,684 828,431
ALUNORTE - Alumina do Norte do Brasil S.A. 179,508 167,690
Companhia Coreano-Brasileira de Pelotizacao - KOBRASCO 75,871 92,981
Ferrovia Centro-Atlantica S.A. 322,097 287,114
Salobo Metais S.A. 177,360 167,069
Sepetiba Tecon S.A. 68,931 58,864
Others 3,270 2,647
---------------- ----------------
1,842,721 1,604,796
================ ================
The breakdown of guarantees by currency is:
06/30/02 03/31/02
---------------- ----------------
U.S. Dollar 1,296,063 1,103,070
Real 546,658 501,726
---------------- ----------------
1,842,721 1,604,796
================ ================
(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.
On 06/28/02 CVRD protocoled a debentures registration request at Comissao
de Valores Mobiliarios - CVM. The obtainment of the above mentioned
registration with the CVM has the purpose to enable the Debentures to be
traded in the secondary market together with SND - Sistema Nacional de
Debentures (National Debentures System), under the management of ANDIMA -
Associacao
24
Nacional das Instituicoes do Mercado Aberto (National
Association of Open Market Institutions) and operationally by CETIP -
Central de Custodia e de Liquidacao Financeira de Titulos (Clearing House
for the Custody and Financial Settlement of Securities).
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 (Including Urucum) Iron ore 1.8% of net revenue, after total sales
volume from May 1997 exceeds 1.7 billion tons
Northern System Iron ore 1.8% of net revenue, after total sales
volume from May 1997 exceeds 1.2 billion tons
Pojuca, Andorinhas, Gold and copper 2.5% of net revenue, after total sales
Liberdade and Sossego and by-products volume from May 1997 exceeds 1.2 billion tons
2.5% of net revenue, (i) from the beginning
of commercial sales with regard to copper
and by-products, and (ii) after total sales
volume from May 1997 exceeds 70 tons of
gold with regard to gold, as adjusted in
Igarape Bahia and Alemao Gold proportion to our interest in these projects
2.5% of net revenue, after total sales
Fazenda Brasileiro Gold volume from May 1997 exceeds 26 tons of gold
Other areas, excluding Gold and copper 2.5% of net revenue from the beginning
Carajas/ Serra Leste and Salobo and by-products of commercial production
Other areas owned as of May 1997 Other minerals 1% of net revenue, 4 years after the
beginning of commercial sales
All areas Sale of mineral rights
owned as of May 1997 1% of the sales price
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 207,060 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$ 1,375.00 per ton on June 30, 2002, representing an
annual commitment of R$ 694,918 based on the final exchange rate of
06/30/02. The same applies to 683,135 tons of alumina per year produced by
ALUNORTE, which at a market price of US$ 170.28 per ton on June 30, 2002
represents a yearly commitment of R$ 283,926 on the same exchange rate
mentioned. The effective take of ALBRAS was R$ 312,266 and R$ 278,206 in
06/30/02 and 06/30/01, respectively, and directly from ALUNORTE (net of
the take assigned to ALBRAS), was R$ 57,525 and R$ 29,655 in 06/30/02 and
06/30/01, 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 06/30/02, the provision for environmental
liabilities amounted to R$ 59,651 (R$ 62,899 on 03/31/02), which was accounted
in "Others" in long-term liabilities.
25
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.
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:
o 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$1,383.86 in
December 2001).
o Extraordinary contribution - This can be made at any time, at the
discretion of the sponsors.
o Normal contribution - To fund the risk plan and administrative
expenses, fixed by the actuary based on actuarial appraisals.
o Special contribution - Destined to cover any special commitment that
may arise.
During 2001, the Company made contributions to VALIA in the amount of R$
6,947 (R$ 4,881 on 06/30/01) 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$ 460,951 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$ 64,533 (R$ 63,896 on 03/31/02)
and part in long-term liabilities - R$ 429,493 (R$ 425,580 on 03/31/02).
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$ 5 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, without new shares issues, but through
capitalization of reserves in the amount of R$ 1 billion.
26
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.
On 06/30/02 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 49,251,140 20 59,899,411 42 109,150,551 28
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 9,995,369 4 - - 9,995,369 3
Foreign - institutional investors 6,262,806 2 40,042,079 29 46,304,885 12
Brazil - institutional investors 29,690,495 12 15,961,946 12 45,652,441 12
Brazil - retail investors 7,680,181 3 16,340,405 12 24,020,586 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 06/30/02, the number of holders of record who are residents of Brazil was
31,812. These stockholders owned 232,714,623 shares, representing 59.9% 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
06/30/02, 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.
27
Shares
-------------------------------------------
Class Quantity Unit acquisition cost Average quoted market price
------------- --------------------------- ---------------------------------------------- ---------------------------
06/30/02 03/31/02 Average Low High 06/30/02 03/31/02
------------ ------------ ---------------- ------------ ------------ ------------ ------------
Preferred 4,751 4,751 51.45 14.02 52.40 78.50 61.51
Common 4,715,170 4,715,170 27.80 20.07 52.09 73.08 63.05
------------ ------------
4,719,921 4,719,921
============ ============
6.19- Financial Result
The amounts included in the income statement are as follows:
06/30/02 06/30/01
----------------- -----------------
Financial expenses
Foreign debt (90,997) (114,400)
Local debt (39,205) (40,900)
Related parties, net (28,773) (11,433)
Others (*) (161,925) (94,321)
----------------- -----------------
(320,900) (261,054)
----------------- -----------------
Monetary and exchange rate variation on liabilities (1,091,961) (670,196)
----------------- -----------------
Financial income
Marketable securities 62,779 46,901
Others 21,333 13,564
----------------- -----------------
84,112 60,465
----------------- -----------------
Monetary and exchange rate variation on assets 117,903 154,936
----------------- -----------------
Financial income (expenses), net (1,210,846) (715,849)
================= =================
(*) 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 to the Executive Board and monthly recognized in CVRD
result.
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.
28
The table below provides information regarding the interest rate derivatives
portfolio for 06/30/02 and 06/30/01.
06/30/02 06/30/01
------------------------------------------------------------------ ---------------------------------------------
Notional value Unrealized gain (loss) Notional value Unrealized gain (loss)
Type (in US$ thousand) Rate range (in R$ thousand) Final maturity (in US$ thousand) Rate range (in R$ thousand)
---------- ---------------- ------------ ------------------- --------------- ---------------- ---------- -----------------
Cap 1,150 5.7 - 11.0% 3,811 May/07 1,400 5.7 - 11.0% (12,714)
Floor 1,150 5.7 - 6.3% (51,521) May/07 975 5.7 - 6.3% (42,350)
Swap 350 5.8 - 6.7% (31,569) May/07 125 6.7% (30,565)
------------------ ---------------
Total (79,279) (85,629)
================== ===============
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 06/30/02 and
06/30/01. These operations are range forwards which were structured to ensure
the purchase price of the following currencies:
06/30/02 06/30/01
------------------------------------------------------------------ ---------------------------------------------
Notional value Unrealized gain (loss) Notional value Unrealized gain (loss)
Type (in US$ thousand) Rate range (in R$ thousand) Final maturity (in US$ million) Rate range (in R$ thousand)
---------- ---------------- ------------ ------------------- --------------- ---------------- ---------- -----------------
Yen purchased 3 (Y) 79 - 91 per US$ (1,399) May/05 31 (Y) 90 - 110 per US$ (12,285)
Euros purchased 6 E 1.18 - 1.23 per US$ (3,875) May/05 13 E 1.10 - 1.24 per US$ (14,138)
---------- -----------
Total (5,274) (26,423)
========== ===========
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
06/30/02 and 06/30/01.
06/30/02 06/30/01
------------------------------------------------------------------
Unrealized Unrealized
Price gain (loss) Price gain (loss)
Quantity Range (in R$ Final Quantity Range (in R$
Type (oz) US$/oz thousand) maturity (oz) US$/oz thousand)
---------------- -------- -------- ----------- -------- -------- ------- -----------
Puts purchased 496,000 270 - 355 21,470 Dec/06 462,000 270 - 355 79,141
Calls sold 736,000 316 - 407 (31,234) Dec/06 878,000 308 - 379 (21,101)
Hybrids instrument 20,000 - 96 Nov/06 15,000 1,966
----------- -----------
Total (9,668) 60,006
=========== ===========
29
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 06/30/02 03/31/02 06/30/02 03/31/02
--------------- -------------- -------------- --------------
Current
Cash and banks and marketable securities 101 196 233 126
Others 2,373 2,062 887 600
--------------- -------------- -------------- --------------
2,474 2,258 1,120 726
Long-term receivables 1,130 922 45 32
Investments 3,388 2,593 114 37
--------------- -------------- -------------- --------------
Total 6,992 5,773 1,279 795
=============== ============== ============== ==============
Liabilities
Current
Short-term loans and financing 2,285 2,120 1,546 1,012
Others 437 233 406 205
--------------- -------------- -------------- --------------
2,722 2,353 1,952 1,217
Long-term liabilities
Loans and financing 3,988 3,292 1,996 1,382
Others 2,393 1,791 643 454
--------------- -------------- -------------- --------------
6,381 5,083 2,639 1,836
--------------- -------------- -------------- --------------
Total 9,103 7,436 4,591 3,053
=============== ============== ============== ==============
Liabilities - R$ (2,111) (1,663) (3,312) (2,258)
=============== ============== ============== ==============
Liabilities - US$ (742) (716) (1,165) (972)
=============== ============== ============== ==============
( * ) Proportional to the percentage of participation
6.22- Other Operating Expenses, Net
06/30/02 06/30/01
-----------------------
Provisions for contingencies 28,165 89,942
Provision for loss on ICMS recoverable 20,993 -
Provision for losses on loans to Celmar 20,161 -
Provision for profit sharing 10,000 27,000
Provision for early retirement program 10,268 13,857
Others 24,595 28,514
---------- -----------
114,182 159,313
========== ===========
6.23- Subsequent Events
Sale of Pulp Assets
On 06/10/02, CVRD and its subsidiary Florestas Rio Doce S.A (FRDSA) signed a
letter of intent with Aracruz Celulose S.A. (Aracruz) and Bahia Sul Celulose
S.A. (Bahia Sul), agreeing on general lines and the basic conditions for the
purchase and sale of assets (planted eucalyptus forest lands) owned by FRDSA in
the Sao Mateus region of the state of Espirito Santo.
The completion of this operation is conditional on a forest, legal and financial
audit, which is being conducted by Aracruz and Bahia Sul, along with negotiation
and formalization of all the contracts and other documents necessary for the
transaction.
30
CVRD and Antofagasta Establish a Joint Venture
On 07/19/02, CVRD and Antofagasta Plc (Antofagasta), one of the largest copper
producers in Chile, constituted Cordillera de las Minas S.A. (Cordillera), whose
purpose is to develop mineral research and exploration activities in the south
of Peru, near Cuzco. The area of interest covers approximately 60 thousand
square kilometers. Other important mining operations are located in this region,
which has great potential mineral wealth. This joint venture was formalized
through the Memorandum of Understanding signed by CVRD and Antofagasta,
disclosed on June 6, 2002.
The corporate documents signed on July 18, 2002 involve the following events:
(i) Anaconda Peru S.A. (Anaconda), a company controlled by Antofagasta,
transferred mineral rights to Cordillera, in which it detains 99.9% of the total
capital; (ii) CVRD constituted Compania Minera Andino-Brasilera Ltda (CMAB),
which owns 0.1% of the capital of Cordillera; (iii) CVRD/CMAB has the option of
acquiring 50% of the capital of Cordillera, through the realization over a
three-year period of investments of US$ 6,700,000 for geological research and
exploration of the mining rights held by Cordillera.
The Investment Agreement signed that same day between CVRD, CMAB, Antofagasta,
Anaconda and Cordilllera, assures the participation, influence and rights of
CVRD/CMAB in the management of Cordillera, particularly in directing the
investments to be made and the exercise of the option contracted.
This deal represents an important step by CVRD to internationalize its
activities and ratifies its interest in copper mining, already shown by its
acquisition of sole control of Mineracao Serra do Sossego S/A and Salobo Metais
S.A and by the start of development of the Sossego project in Carajas, Para.
CVRD Acquires Mineracao Vera Cruz
At 07/01/02 CVRD through its subsidiary, Vale do Rio Doce Aluminio S.A. -
ALUVALE (Aluvale), acquired 64% of the total capital of its affiliated company,
Mineracao Vera Cruz S.A. (MVC), which was previously held by the Paranapanema
Group, for R$ 6.4 millions. With this acquisition, Aluvale will hold 100% of
MVC. Paranapanema holds 18 active mining rights in the Paragominas region, in
the state of Para, with total metallurgical bauxite resources estimated at 878
million tons.
New Stage of the Igarape Bahia Mine
On July CVRD, after twelve years of activities, discontinued the exploitation of
the gold ore reserves in the Igarape Bahia mine, in Carajas. During the period
Igarape Bahia produced a total of 3,119,000 troy ounces of gold.
As of 07/08/02, this operational unit has been integrated into the CVRD Carajas
Department of Operations, which will initiate the Igarape Bahia Phase IV
project. In accordance with a pre-feasibility study under development, the ore
deposit is estimated to have an annual production capacity of 36,000 tons of
copper and 83,600 troy ounces of gold. It is estimated that the development of
the mine will begin in mid-2003 and production will begin in 2004.
31
PART III
7- OTHER INFORMATION THE COMPANY DEEMS RELEVANT
7.1 Net Accumulated Income (in R$ Million)
Quarters
1st Quarter 2nd Quarter 3rd Quarter 4th Quarter
----------- ----------- ----------- -----------
2001 639 1,101 1,600 2,133
2001 660 1,206 2,412 3,051
2002 633 718
7.2- Factors Affecting Net Income in the Last 12 Months (in R$ Million)
Net income
at 6/30/01 .......... 1,206
Net operating
revenue ............ 446
Cost of products
and services ....... (309)
Results of investment
partcipations ...... 13
Financial result ..... (495)
Operating espenses
net ................ (38)
Discontinued
operations ......... (298)
Income tax ........... 194
Net income at
6/30/02 ............ 718
32
7.3 - Business Perfomance Ratios
06/30/02 03/31/02
--------- ---------
Capital Ratios
1 - Capital assets to stockholders' equity (Permanent assets/Equity * 100) - (%) 140.46 121.62
2 - Capital assets to total liabilities (Permanent assets/Total liabilities * 100) - (%) 134.12 130.99
3 - Total liabilities to stockholders' equity (Total liabilities/Equity * 100) - (%) 104.73 92.85
4 - Short to total liabilities (Short-term liabilities/Total liabilities * 100) - (%) 32.81 40.69
5 - Stockholders' equity to total liabilities (Equity/Total liabilities *100) - (%) 95.49 107.70
6 - Capital assets to non-current funds (Permanent assets/(Equity + Long-term liabilities)) *100) - (%) 82.45 78.43
7 - Net Debt / Stockholders' equity (Net debt (a) / Equity) 0.48 0.22
8 - Net Debt (a) / Total Assets 0.24 0.11
9 - Leverage (Total Assets / Equity) 2.05 1.93
06/30/02 06/30/01
--------- ---------
Profitability and Other Ratios
1 - Gross Margin (Gross profit / Net operating revenues * 100) - (%) 44.81 47.05
2 - Operating Margin (Operating income / Net operating revenues * 100) - (%) 12.70 29.55
3 - Net Margin (Net income / Net operating revenues * 100) - (%) 21.73 42.14
4 - Return on Assets (Net income (annualized) / Total assets *100) - ROA (%) 5.79 11.19
5 - Return on Equity (Net income (annualized) / Equity *100) - ROE (%) 11.85 21.58
6 - Total asset turnover (Net operating revenues (annualized) / Total assets) 0.27 0.27
7 - P/E (Price of preferred class A share / Earnings per share (annualized)) 19.54 8.36
8 - Price /Book Value (Price of preferred class A share / Book value per share) 2.31 1.80
9 - Net income per outstanding share (Net income (annualized) / Number of shares outstanding) 3.74 6.26
10 - NOPLAT / Operating Income (%) 46.00 43.05
11 - EBITDA + Dividends received / Financial expenses on financing 10.40 8.84
12- EBITDA + Dividends Received / Operating Income (%) 48.17 51.17
13- Net Debt (a) / EBITDA + Dividends Received(annualized) 1.83 0.84
14- FCOL / Financial expenses on financing 10.36 12.00
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.
33
Corporate center - comprises the functional areas of control, finance, legal
affairs, human resources, administration, information technology and investor
relations.
06/30/02
----------------------------------------------------------------------------
Holdings
-----------------------------------------
Non- Pulp
Ferrous ferrous Logistics and paper Aluminum Steel Others
------------ ---------- ---------- ---------- ------------ ------- ---------
Results
Sales classified by geographic destination
External market
Latin America 108,877 - - - - - -
United States 104,633 69,503 - - - - -
Europe 813,801 99,062 - - - - -
Middle East 156,523 - - - - - -
Japan 274,284 - - - - - -
China 345,137 - - - - - -
Asia, other than Japan and China 166,052 - - - - - -
------------ ---------- ---------- ---------- ------------------------------
Operating revenues - external market 1,969,307 168,565 - - - - -
Operating revenues - internal market 869,356 99,970 336,995 - - - -
------------ ---------- ---------- ---------- ------------ ------- ---------
Total operating revenues 2,838,663 268,535 336,995 - - - -
Value-added taxes (76,589) (22,254) (39,318) - - - -
------------ ---------- ---------- --------- ------------- ------- ---------
Net operating revenues 2,762,074 246,281 297,677 - - - -
------------ ---------- ---------- --------- ------------- ------- ---------
Cost of products and services (1,533,904) (163,945) (126,688) - - - -
Selling and administrative expenses (63,426) - - - - - -
Research and development (6,063) (45,844) (160) - - - -
Other operating expenses, net (64,068) - - (20,161) - - -
------------ ---------- ---------- ---------- ------------ ------- ---------
Operation profit before financial result and
result of investment participations 1,094,613 36,492 170,829 (20,161) - - -
Financial result, net - - - - - - -
Result of investments/participations 744,593 (35,606) (133,435) 4,783 (61,594) 48,512 5,329
Income taxes - - - - - - -
------------ ---------- ---------- ---------- ------------ ------- ---------
Net income for the year 1,839,206 886 37,394 (15,378) (61,594) 48,512 5,329
============ ========== ========== ========== ============ ======= =========
EBITDA demonstration:
Operation profit before financial result and
result of investment participations 1,094,613 36,492 170,829 (20,161) - - -
Depreciation, amortization and depletion 219,508 47,775 12,697 - - - -
Dividend received - cash 53,819 - - - 11,622 20,404 3,797
Adjustments in non-cash itens:
- Provision for contingencies 28,165 - - - - - -
- Provision for loss on ICMS recoverable 20,993 - - - - - -
- Write-off of property, plant and equipment 11,700 - - - - - -
- Provision for early-retirement programs 10,268 - - - - - -
- Provision for losses - - - 20,161 - - -
- Amortization of goodwill 48,838 - - - - - -
- Others 4,642 - - - - - -
------------ ---------- ---------- --------- ------------ ------- ---------
EBITDA 1,492,546 84,267 183,526 - 11,622 20,404 3,797
EBITDA % of total 93.7% 5.3% 11.5% - 0.7% 1.3% 0.3%
EBITDA margin % 54.0% 34.2% 61.7% - - - -
============ ========== ========== ========= ============= ======= =========
06/30/02
--------------------------
Corporate
Center Total
------------ ------------
Results
Sales classified by geographic destination
External market
Latin America - 108,877
United States - 174,136
Europe - 912,863
Middle East - 156,523
Japan - 274,284
China - 345,137
Asia, other than Japan and China - 166,052
- ------------ ------------
Operating revenues - external market - 2,137,872
Operating revenues - internal market - 1,306,321
------------ ------------
Total operating revenues - 3,444,193
Value-added taxes - (138,161)
------------ ------------
Net operating revenues - 3,306,032
------------ ------------
Cost of products and services - (1,824,537)
Selling and administrative expenses (185,032) (248,458)
Research and development - (52,067)
Other operating expenses, net (29,953) (114,182)
------------ ------------
Operation profit before financial result and
result of investment participations (214,985) 1,066,788
Financial result, net (1,210,846) (1,210,846)
Result of investments/participations (13,995) 558,587
Income taxes 303,859 303,859
------------ ------------
Net income for the year (1,135,967) 718,388
============ ============
EBITDA demonstration:
Operation profit before financial result and
result of investment participations (214,985) 1,066,788
Depreciation, amortization and depletion 5,994 285,974
Dividend received - cash - 89,642
Adjustments in non-cash itens:
- Provision for contingencies - 28,165
- Provision for loss on ICMS recoverable - 20,993
- Write-off of property, plant and equipment - 11,700
- Provision for early-retirement programs - 10,268
- Provision for losses - 20,161
- Amortization of goodwill - 48,838
- Others 5,290 9,932
------------ ------------
EBITDA (203,701) 1,592,461
EBITDA % of total (12.8%) 100.0%
EBITDA margin % - 48.2%
============ ============
Information related to period ended 06/30/01 is as follows:
06/30/01
----------------------------------------------------------------------------------
Ferrous Non-ferrous Logistics Holdings Corporate Center TOTAL
------------ ----------- ----------- -------------- ----------------------------
EBITDA 1,244,589 69,589 162,026 109,615 (121,142) 1,464,677
EBITDA % of total 85.0% 4.7% 11.1% 7.5% (8.3%) 100.0%
EBITDA margin % 52.2% 33.0% 61.0% - - 51.0%
34
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).
[LINE GRAPH OBJECT OMITTED]
In reais In US$
----------------------------------------------------- ----------------------------------------------------
Preferred Class A Shares Common Shares ADRs - Preferred Shares ADRs - 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
Second Quarter 75.90 59.80 78.10 61.50 29.51 23.50 30.00 25.68
7. 6- Capital Expenditures (Unaudited)
In thousands of reais
----------------------------------
ACTUAL APPROVED
UP TO 06/02 FOR 2002 % ACTUAL
---------------- ---------------- --------------
Ongoing Capital Expenditures
Replacement/Refurbishment/Improvement 264,390 515,916 51.2
Geological Research 37,743 102,536 36.8
Technological Research/Development 8,650 37,750 22.9
Environment 862 1,293 66.7
lnformatics / Telecommunications 18,461 109,644 16.8
---------------- ---------------- --------------
330,106 767,139 43.0
---------------- ---------------- --------------
Equity Investments 597,798 649,755 92.0
Direct Investments 525,085 1,021,106 51.4
---------------- ---------------- --------------
Total Capital Expenditures 1,452,989 2,438,000 59.6
================ ================ ==============
35
7.7- Operations for the period (Unaudited)
(Million metric tons)
------------------------------------
06/30/02 06/30/01 VAR %
----------------------- ------------
PRODUCTION/PURCHASE
IRON ORE 60.0 58.9 1.9
PELLETS 8.0 8.0 -
POTASH 0.3 0.3 -
GOLD (thousand Kg) 7.1 7.4 (4.1)
RAILROAD OPERATIONS - GENERAL CARGO
EFVM 12.9 12.3 4.9
FCA 10.8 10.8 0.0
EFC 2.3 1.5 53.3
EFVM - TKU 5.5 5.4 1.9
FCA - TKU 4.5 4.2 7.1
EFC - TKU 1.5 0.9 66.7
PORT OPERATIONS
TUBARAO 9.5 7.6 25.0
SAO LUIZ 1.4 1.1 27.3
DOCENAVE OPERATIONS
BULK CARGO 3.7 16.6 (77.7)
GENERAL CARGO (TEUS) 34.7 28.5 21.8
MANOEVERS 3.4 3.1 9.7
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
June 16.08 18.29 318.50 1,354.25
36
7.9- Iron Ore and Pellet Sales (Main Markets) (Unaudited)
(Millons of tons)
--------------------------------------------------------------------------
JAN to JUN JAN to JUN
----------- ------------
1998 % 1999 % 2000 % 2001 % 2001 % 2002 %
------- ---- ------ ---- ------ ----------------- ------ ---- ------ -----
FOREIGN MARKET
ASIA
CHINA 5.7 6 7.3 8 9.2 8 14.9 12 5.9 10 9.4 13
KOREA 7.1 7 7.9 8 7.0 6 6.0 5 3.1 5 3.2 5
PHILIPPINES 0.9 1 1.6 2 1.4 1 1.2 1 0.6 1 1.1 2
JAPAN 17.3 17 16.9 17 17.5 15 17.1 13 8.4 15 8.0 11
TAIWAN 1.6 2 1.8 2 1.6 2 2.2 2 1.0 2 0.8 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 19.1 33 22.5 32
------- ---- ------ ---- ------ ----------------- ------ ---- ------ -----
EUROPE
GERMANY 9.4 9 8.0 8 8.2 7 10.1 8 4.5 7 6.8 10
SPAIN 3.6 4 3.6 4 2.9 2 2.9 2 1.4 2 1.5 2
FRANCE 3.0 3 2.1 2 2.9 2 3.9 3 1.9 3 2.8 4
ITALY 6.1 6 5.0 5 4.8 4 5.1 4 2.7 4 3.2 5
UNITED KINGDOM 2.4 2 1.6 2 1.5 2 1.6 1 0.8 1 1.1 2
OTHERS 5.7 6 4.7 5 8.2 7 10.8 8 4.2 7 6.1 9
------- ---- ------ ---- ------ ----------------- ------ ---- ------ -----
30.2 30 25.0 26 28.5 24 34.4 26 15.5 24 21.5 32
------- ---- ------ ---- ------ ----------------- ------ ---- ------ -----
AMERICAS
ARGENTINA 2.3 2 1.6 2 1.4 1 1.9 1 1.0 2 1.0 1
UNITED STATES 3.1 3 3.0 3 3.5 3 2.9 2 1.4 2 1.9 3
OTHERS 2.2 2 1.8 2 2.0 2 1.5 1 0.8 1 0.8 1
------- ---- ------ ---- ------ ----------------- ------ ---- ------ -----
7.6 7 6.4 7 6.9 6 6.3 4 3.2 5 3.7 5
------- ---- ------ ---- ------ ----------------- ------ ---- ------ -----
AFRICA/MID.EAST/OCEANIA
BAHREIN 1.2 1 1.5 2 2.0 2 1.7 1 1.1 2 1.3 2
OTHERS 3.2 3 3.6 4 5.2 4 5.1 4 2.7 4 1.5 2
------- ---- ------ ---- ------ ----------------- ------ ---- ------ -----
4.4 4 5.1 6 7.2 6 6.8 5 3.8 6 2.8 4
------- ---- ------ ---- ------ ----------------- ------ ---- ------ -----
------- ---- ------ ---- ------ ----------------- ------ ---- ------ -----
75.9 75 72.6 76 79.7 68 90.0 69 41.6 68 50.5 73
======= ==== ====== ==== ====== ================= ====== ==== ====== =====
DOMESTIC MARKET
STEEL MILLS 15.0 15 13.6 14 15.5 13 20.2 16 9.7 16 10.9 15
PELLETING AFFILIATES 8.6 10 10.1 10 21.6 19 19.7 15 10.0 16 8.6 12
------- ---- ------ ---- ------ ----------------- ------ ---- ------ -----
23.6 25 23.7 24 37.1 32 39.9 31 19.7 32 19.5 27
------- ---- ------ ---- ------ ----------------- ------ ---- ------ -----
TOTAL 99.5 100 96.3 100 116.8 100 129.9 100 61.3 100 70.0 100
======= ==== ====== ==== ====== ================= ====== ==== ====== =====
Exports by System
(Millons of tons)
-------------------------------------------------------------------------------------
JAN to JUN JAN to JUN
------------- --------------
1998 % 1999 % 2000 % 2001 % 2001 % 2002 %
------- ----- ------- -------------- ----- ------- ----- ------- ----- ------- ------
NORTHERN SYSTEM 44.0 44 42.8 44 46.6 40 50.8 39 25.4 41 24.6 35
SOUTHERN SYSTEM 55.5 56 53.5 56 70.2 60 79.1 61 35.9 59 45.4 65
------- ----- ------- -------------- ----- ------- ----- ------- ----- ------- ------
99.5 100 96.3 100 116.8 100 129.9 100 61.3 100 70.0 100
======= ===== ======= ============== ===== ======= ===== ======= ===== ======= ======
37
7.10- Shareholding Interests (Organizational Chart at 06/30/02)
Main Companies of the CVRD Group Holding in Total Stock (%)
COMPANHIA VALE DO RIO DOCE
Valepar 27.14%
Public 72.86%
FERROUS
IRON ORE AND PELLETS
Ferteco
CVRD.................................................. 100.00
Ferteco International*
Ferteco............................................... 100.00
Belem-Adm e Part. Ltda
CVRD.................................................. 99.99
Docepar............................................... 0.01
Baovale Mineracao S.A.
CVRD.................................................. 50.00
Shanghai Baosteel..................................... 50.00
Minas de Serra Geral**
CVRD.................................................. 51.00
Kawasaki.............................................. 24.50
Japanese Group........................................ 24.50
CAEMI
Amazon (Itaco)........................................ 16.85
Mitsui................................................ 43.37
Others................................................ 39.78
Samarco Mineracao S/A
CVRD.................................................. 50.00
BHP Brasil............................................ 50.00
Hispanobras**
CVRD.................................................. 50.89
Aceralia CS........................................... 49.11
Itabrasco**
CVRD.................................................. 50.90
Ilva.................................................. 49.10
Nibrasco**
CVRD.................................................. 51.00
Nippon Steel.......................................... 25.39
Japanese Group........................................ 23.61
Kobrasco**
CVRD.................................................. 50.00
POSCO................................................. 50.00
Kobin**
Kobrasco.............................................. 100.00
GIIC*
ITACO................................................. 50.00
Gulf Invest. Co....................................... 50.00
MANGANESE AND ALLOYS
Urucum Meneracao S.A.
CVRD.................................................. 100.00
RDME*
ITACO................................................. 100.00
SIBRA
CVRD.................................................. 99.23
Others................................................ 0.77
CPFL
SIBRA................................................. 93.68
Others................................................ 6.32
Nova Era Silicon**
CVRD.................................................. 49.00
Mitsubishi............................................ 25.50
Kawasaki.............................................. 22.50
Mizushima............................................. 3.00
NON FERROUS
PRECIOUS METALS, BASE METALS AND INDUSTRY MINERALS
Docegeo
CVRD................................................... 99.998
Others................................................. 00.002
33 Mining Companies
CVRD................................................... 100.00
PPSA
CVRD................................................... 75.50
Mitsubishi............................................. 18.88
IFC.................................................... 5.62
PPSA Overseas*
PPSA................................................... 100.00
Salobo Metais
CVRD................................................... 50.00
CBI (CVRD)............................................. 50.00
Mineracao Sossego
Min. Andira............................................ 56.82
Camelback (Itaco)...................................... 43.18
Compania Minera Andino-Brasilera Limitada - CMAB*
CVRD................................................... 99.90
Docepar................................................ 0.10
LOGISTICS
RAILROADS AND PORTS
TTV-Terminal de Vila Velha S.A.
CVRD.................................................. 99.887
Min. Tacuma........................................... 0.005
Employees............................................. 0.108
Ferrovia Centro Atlantica S.A.
Min. Tacuma........................................... 45.65
VALIA................................................. 9.99
KRJ................................................... 12.31
CARMO................................................. 9.99
CPP................................................... 1.03
CSN................................................... 11.95
Others................................................ 9.08
Companhia Ferroviaria do Nordeste
CVRD.................................................. 30.00
Taquari............................................... 30.00
CSN................................................... 30.00
Employees............................................. 10.00
Ferroban
Previ................................................. 26.42
Funcef................................................ 23.62
LAIF XV Ltda.......................................... 15.10
Gaborone.............................................. 14.59
Brasil Ferrovias S.A.................................. 8.35
CVRD.................................................. 3.75
Others................................................ 8.17
CSN Aceros S.A.*
ITACO................................................. 62.50
CSN Panama............................................ 37.50
Sepetiba Tecon
CSN Aceros S.A........................................ 80.00
CSN................................................... 20.00
SHIPPING
Docenave
CVRD.................................................. 100.00
Navedoce*
Docenave.............................................. 100.00
Seamar*
Docenave.............................................. 100.00
HOLDING
BAUXITE, ALUMINA AND ALUMINUM
Aluvale
CVRD.................................................. 94.74
ITACO................................................. 5.26
Albras**
Aluvale............................................... 51.00
NAAC.................................................. 49.00
Valesul**
Aluvale............................................... 54.51
Billiton.............................................. 45.49
Alunorte**
Aluvale............................................... 57.58
Norsk Hydro........................................... 33.20
NAAC.................................................. 4.25
CBA................................................... 3.62
JAIC.................................................. 1.35
Min. Rio do Norte**
Aluvale............................................... 40.00
Billiton.............................................. 14.80
Alcan................................................. 12.00
CBA................................................... 10.00
Alcoa................................................. 8.58
Reynolds.............................................. 5.00
Norsk Hydro........................................... 5.00
Abalco................................................ 4.62
Min. Vera Cruz
Aluvale............................................... 36.00
Paraibuna............................................. 42.88
Fina Emp. Part........................................ 21.12
FERTILIZERS
Fosfertil
CVRD.................................................. 11.12
Fertifos.............................................. 56.14
Others................................................ 32.74
TIMBER, PULP & PAPER
Florestas Rio Doce
CVRD.................................................. 99.85
Others................................................ 0.15
Celmar
CVRD.................................................. 85.00
Nissho Iwai........................................... 15.00
Steel
CST**
CVRD.................................................. 22.85
Acesita/Usinor........................................ 37.29
Kawasaki.............................................. 7.91
Others................................................ 31.95
Califonia Steel*
Rio Doce Ltd.......................................... 50.00
Kawasaki.............................................. 50.00
Usiminas
CVRD................................................... 11.46
Nippon Usiminas........................................ 9.45
Previ.................................................. 8.02
CIU.................................................... 4.95
Others................................................. 66.12
Sidear(*)
Itabira Rio Doce....................................... 4.85
Usiminas............................................... 5.32
Sidertubes S/A......................................... 50.21
ISA (Employees)........................................ 9.78
Others................................................. 29.84
ENERGY
Consortium Igarapava Usina Hidrelectrica
CVRD................................................... 38.15
Cia Mineira Metais..................................... 23.93
CSN.................................................... 17.92
CEMIG.................................................. 14.50
Min. Morro Velho....................................... 5.50
Consortium Porto Estrela Usina Hidrelectrica
CVRD................................................... 33.33
CEMIG.................................................. 33.33
Coteminas.............................................. 33.33
Consortium Aimores Usina Hidrelectrica
CVRD................................................... 51.00
CEMIG.................................................. 49.00
Consortium Candonga Usina Hidrelectrica
CVRD................................................... 50.00
EPP.................................................... 50.00
Consortium Funil Usina Hidrelectrica
CVRD................................................... 51.00
CEMIG.................................................. 49.00
Consortium Capim Branco I e II - Usina Hidrelectrica
CVRD................................................... 48.42
CEMIG.................................................. 21.05
Suzano................................................. 17.90
Votorantim............................................. 12.63
Consortium Foz do Chapeco Usina Hidrelectrica
CVRD................................................... 40.00
Foz do Chapeco Energia S.A............................. 60.00
Consortium Santa Isabel Usina Hidrelectrica
CVRD................................................... 43.85
Billiton............................................... 20.60
Alcoa.................................................. 20.00
Votorantim............................................. 10.00
C. Correa e Cimentos................................... 5.55
OTHERS ABROAD
Rio Doce International*
CVRD................................................... 100.00
Rio Doce Asia*
Rio Doce International................................. 100.00
Rio Doce Europa S.'a.r.l.*
CVRD................................................... 99.80
Others................................................. 0.20
Rio Doce International Finance*
Rio Doce Europa........................................ 100.00
Itabira Rio Doce Company Ltd. - ITACO*
RDIF................................................... 100.00
Rio Doce America
ITACO.................................................. 100.00
Rio Doce Ltd.
Rio Doce America....................................... 100.00
CVRD Overseas*
ITACO.................................................. 100.00
CVRD Finance*
CVRD Overseas.......................................... 100.00
CVRD Europe Trading Energy B.V. - CETE*
CVRD................................................... 100.00
Brasilux
CVRD................................................... 100.00
Rio Doce Comercio International ApS*
CVRD................................................... 100.00
Itabira Internacional Servicos e Comercio
RDCI ApS*.............................................. 99.99
Others................................................. 0.01
Vale Overseas Ltd*
CVRD................................................... 100.00
38
7.11- Information About FERTECO (Unaudited)
Statement of Income In thousands of reais
---------------------------------------------------------------------------------------------------------
From From From
04/01/02 01/01/02 01/05/01
to 06/30/02 to 06/30/02 to 06/30/01
----------- ----------- -----------
Operating revenues 223,624 358,292 171,286
Value-added taxes (28,334) (36,150) (3,490)
--------- --------- -----------
Net operating revenues 195,290 322,142 167,796
--------- --------- -----------
Cost of products and services (127,765) (197,784) (101,601)
--------- --------- -----------
Gross profit 67,525 124,358 66,195
Gain on investments accounted for by the equity method (28,710) (28,701) (3,671)
Operating income (expenses)
Selling and administrative (12,121) (24,602) (23,309)
Financial expenses (45,818) (51,914) (31,867)
Financial income 1,558 3,079 455
Operating income (expenses) (16,951) (16,951) -
--------- --------- -----------
(73,332) (90,388) (54,721)
--------- --------- -----------
Operating profit (34,517) 5,269 7,803
Non operating income (expenses), net 121 (95) (106)
--------- --------- -----------
Income before income tax and social contribution (34,396) 5,174 7,697
Income tax and social contribution 24,344 13,825 (5,354)
--------- --------- -----------
Net income for the period (10,052) 18,999 2,343
========= ========= ===========
Number of shares outstanding
at the end of the period (in thousands) 225,775 225,775 225,775
========= ========= ===========
Net earnings per share outstanding
at the end of the period (R$) (0.04) 0.08 0.01
========= ========= ===========
CVRD acquired Ferteco on May/01.
Investments
For 2002 Ferteco budgeted investments for maintainance of production capacity,
research, training and environment.
39
7.12- Information About RDIF (Unaudited)
Statement of Income In thousands of reais
------------------------------------------------------------------------------------------------------------------------------------
From From From From
04/01/ 02 01/01/ 02 04/01/01 01/01/01
to 06/30/02 to 06/30/02 to 06/30/01 to 06/30/01
----------- ----------- ----------- -----------
Operating revenues 40,427 66,480 35,795 60,273
Value-added taxes - - - -
-------- -------- -------- --------
Net operating revenues 40,427 66,480 35,795 60,273
-------- -------- -------- --------
Cost of products and services (9,905) (15,148) (5,131) (11,296)
-------- -------- -------- --------
Gross profit 30,522 51,332 30,664 48,977
Gain on investments accounted for by the equity method (93,567) (36,077) - -
Operating income (expenses)
Selling (211) (356) - -
Administrative - - - -
Financial expenses (12,171) (20,498) (9,053) (15,964)
Financial income 32,629 52,136 8,512 21,795
Monetary and exchange rate variation, net (107) (681) 1,265 1,498
Other operating expenses, net (207) (246) 154 154
-------- -------- -------- --------
19,933 30,355 878 7,483
-------- -------- -------- --------
Operating profit (43,112) 45,610 31,542 56,460
Non operating income (expenses), net - - - -
-------- -------- -------- --------
Income before income tax and social contribution (43,112) 45,610 31,542 56,460
Income tax and social contribution - - - -
-------- -------- -------- --------
Net income for the period (43,112) 45,610 31,542 56,460
======== ======== ======== ========
Number of shares outstanding at the end of the period (in thousands) 10 10 10 10
======== ======== ======== ========
Net earnings per share out standing at the end of the period (R$) (4,311.20) 4,561.00 3,154.20 5,646.00
======== ======== ======== ========
The company registered a net income of R$ 45,610 in 2002 against R$ 56,460 in
2001, due to:
Commission Income
The company receives commission from Brasilux on sales to the external market
from its indirect controlled CVRD, and registered income of R$ 66,480 in 2002
against R$ 60,273 in 2001.
Result of Investments Participation
On July 2001, the Company acquired the capital of Itabira Rio Doce Company Ltd.
("ITACO"), registering a negative result of R$ 36,077 by equity method.
40
PART III
PART III
8- EQUITY INVESTEE INFORMATION
8.1 - Aluminum Area - ALBRAS (Adjusted and Non-Audited) Attachment I
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
Information 2002
------------------------------------------------------------------------------------------------------------------------------------
1st 2nd 3rd 4th
Quarter Quarter Quarter Quarter Total
------------------------------------------------------------------------------------------------------------------------------------
Quantity sold - external market MT (thousand) 84 108 - - 192
Quantity sold - internal market MT (thousand) 4 2 - - 6
----------------------------------------------------
Quantity sold - total MT (thousand) 88 110 - - 198
====================================================
Average sales price - external market US$ 1,318.33 1,409.42 - - 1,325.16
Average sales price - internal market US$ 1,352.12 1,330.47 - - 1,373.01
Average sales price - total US$ 1,319.81 1,332.13 - - 1,326.67
Long-term indebtedness, gross US$ 524,095 506,633 - - 506,633
Short-term indebtedness, gross US$ 72,938 48,840 - - 48,840
----------------------------------------------------
Total indebtedness, gross US$ 597,033 555,473 - - 555,473
====================================================
Stockholders' equity R$ 299,202 113,162 - - 113,162
====================================================
Net operating revenues R$ 273,853 366,494 - - 640,347
Cost of products R$ (170,834) (223,590) - - (394,424)
Other expenses/revenues R$ (12,562) (9,587) - - (22,149)
Depreciation, amortization and depletion R$ 15,555 17,076 - - 32,631
----------------------------------------------------
EBITDA R$ 106,012 150,393 - - 256,405
Depreciation, amortization and depletion R$ (15,555) (17,076) - - (32,631)
----------------------------------------------------
EBIT R$ 90,457 133,317 - - 223,774
Non-operating result R$ (746) (467) - - (1,213)
Net financial result R$ (11,141) (332,532) - - (343,673)
----------------------------------------------------
Income before income tax and social contribution R$ 78,570 (199,682) - - (121,112)
Income tax and social contribution R$ (2,627) 13,645 - - 11,018
----------------------------------------------------
Net income R$ 75,943 186,037 - - 110,094
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
Information 2001
------------------------------------------------------------------------------------------------------------------------------------
1st 2nd 3rd 4th
Quarter Quarter Quarter Quarter Total
------------------------------------------------------------------------------------------------------------------------------------
Quantity sold - external market MT (thousand) 87 88 76 66 317
Quantity sold - internal market MT (thousand) 3 4 4 4 15
---------------------------------------------------------------
Quantity sold - total MT (thousand) 90 92 80 70 332
===============================================================
Average sales price - external market US$ 1,530.02 1,468.13 1,387.58 1,279.75 1,426.64
Average sales price - internal market US$ 1,606.92 1,528.21 1456.,51 1,330.54 1,477.68
Average sales price - total US$ 1,532.90 1,470.68 1,390.89 1,282.77 1,428.99
Long-term indebtedness, gross US$ 527,685 496,058 496,941 450,400 450,400
Short-term indebtedness, gross US$ 176,879 167,370 137,258 183,017 183,017
---------------------------------------------------------------
Total indebtedness, gross US$ 704,564 663,428 634,199 633,417 633,417
===============================================================
Stockholders' equity R$ 189,460 198,660 2,854 223,256 223,256
===============================================================
Net operating revenues R$ 277,094 307,826 278,080 231,638 1,094,638
Cost of products R$ (161,707) (176,460) (161,136) (147,148) (646,451)
Other expenses/revenues R$ (12,828) (9,735) (43,619) (12,542) (78,724)
Depreciation, amortization and depletion R$ 19,149 15,091 15,417 18,539 68,196
---------------------------------------------------------------
EBITDA R$ 121,708 136,722 88,742 90,487 437,659
Depreciation, amortization and depletion R$ (19,149) (15,091) (15,417) (18,539) (68,196)
---------------------------------------------------------------
EBIT R$ 102,559 121,631 73,325 71,948 369,463
Non-operating result R$ 582 (406) (1,157) 23,285 22,304
Net financial result R$ (119,075) (114,009) (251,524) 221,785 (262,823)
---------------------------------------------------------------
Income before income tax and social contribution R$ (15,934) 7,216 (179,356) 317,018 128,944
Income tax and social contribution R$ 14,467 1,982 (16,449) (96,706) (96,706)
---------------------------------------------------------------
Net income R$ 1,467 9,198 (195,805) 220,312 32,238
------------------------------------------------------------------------------------------------------------------------------------
41
8.1 - Aluminum Area - ALUNORTE (Adjusted and Non-Audited) Attachment I
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
Information 2002
------------------------------------------------------------------------------------------------------------------------------------
1st 2nd 3rd 4th
Quarter Quarter Quarter Quarter Total
------------------------------------------------------------------------------------------------------------------------------------
Quantity sold - external market MT (thousand) 222 175 - - 397
Quantity sold - internal market MT (thousand) 205 235 - - 440
----------------------------------------------------
Quantity sold - total MT (thousand) 427 410 - - 837
====================================================
Average sales price - external market US$ 148.20 152.79 - - 150.23
Average sales price - internal market US$ 175.94 175.38 - - 175.64
Average sales price - total US$ 161.55 165.72 - - 163.59
Long-term indebtedness, gross US$ 455,061 455,194 - - 455,194
Short-term indebtedness, gross US$ - - - - -
----------------------------------------------------
Total indebtedness, gross US$ 455,061 455,194 - - 455,194
====================================================
Stockholders' equity R$ 573,946 451,686 - - 451,686
====================================================
Net operating revenues R$ 164,875 173,891 - - 338,766
Cost of products R$ (135,765) (134,556) - - (270,321)
Other expenses/revenues R$ (7,377) (3,787) - - (11,164)
Depreciation, amortization and depletion R$ 12,802 13,351 - - 26,153
----------------------------------------------------
EBITDA R$ 34,535 48,899 - - 83,434
Depreciation, amortization and depletion R$ (12,802) (13,351) - - (26,153)
----------------------------------------------------
EBIT R$ 21,733 35,548 - - 57,281
Non-operating result R$ (4) - - - (4)
Net financial result R$ (10,936) (198,404) - - (209,340)
----------------------------------------------------
Income before income tax and social contribution R$ 10,793 (162,856) - - (152,063)
Income tax and social contribution R$ (726) 20,677 - - 19,951
----------------------------------------------------
Net income R$ 10,067 (142,179) - - (132,112)
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
Information 2001
------------------------------------------------------------------------------------------------------------------------------------
1st 2nd 3rd 4th
Quarter Quarter Quarter Quarter Total
------------------------------------------------------------------------------------------------------------------------------------
Quantity sold - external market MT (thousand) 170 212 205 232 819
Quantity sold - internal market MT (thousand) 193 195 160 173 721
---------------------------------------------------------------
Quantity sold - total MT (thousand) 363 407 365 405 1,540
===============================================================
Average sales price - external market US$ 195.23 189.14 181.98 156.88 179.47
Average sales price - internal market US$ 202.01 195.80 188.73 181.10 192.36
Average sales price - total US$ 198.83 192.33 184.94 167.23 185.51
Long-term indebtedness, gross US$ 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$ 478,182 471,917 449,348 471,161 471,161
===============================================================
Stockholders' equity R$ 433,497 417,974 334,924 526,231 526,231
===============================================================
Net operating revenues R$ 149,709 188,075 177,200 171,700 686,684
Cost of products R$ (106,856) (128,775) (122,317) (139,731) (497,679)
Other expenses/revenues R$ (4,729) (6,886) (3,869) (7,857) (23,341)
Depreciation, amortization and depletion R$ 12,904 12,861 12,773 12,927 51,465
---------------------------------------------------------------
EBITDA R$ 51,028 65,275 63,787 37,039 217,129
Depreciation, amortization and depletion R$ (12,904) (12,861) (12,773) (12,927) (51,465)
---------------------------------------------------------------
EBIT R$ 38,124 52,414 51,014 24,112 165,664
Non-operating result R$ 749 (721) 104 31 163
Net financial result R$ (97,766) (75,812) (156,652) 126,209 (204,021)
---------------------------------------------------------------
Income before income tax and social contribution R$ (58,893) (24,119) (105,534) 150,352 (38,194)
Income tax and social contribution R$ 15,653 7,153 (22,808) (11,305) (11,307)
---------------------------------------------------------------
Net income R$ (43,240) (16,966) (128,342) 139,047 (49,501)
------------------------------------------------------------------------------------------------------------------------------------
42
8.3 - Aluminum Area - ALUVALE (Adjusted and Non-Audited) Attachment I
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
Information 2002
------------------------------------------------------------------------------------------------------------------------------------
1st 2nd 3rd 4th
Quarter Quarter Quarter Quarter Total
------------------------------------------------------------------------------------------------------------------------------------
Quantity sold - internal market MT (thousand) - - - - -
----------------------------------------------------
Quantity sold - total MT (thousand) - - - - -
====================================================
Average sales price - internal market US$ - - - - -
Average sales price - total US$ - - - - -
Short-term indebtedness, gross US$ - - - - -
----------------------------------------------------
Total indebtedness, gross US$ - - - - -
====================================================
Stockholders' equity R$ 891,456 751,522 - - 751,522
====================================================
Net operating revenues R$ 288 616 - - 904
Cost of products R$ (22) (47) - - (69)
Other expenses/revenues R$ 4,571 1,361 - - 5,932
Depreciation, amortization and depletion R$ - 13 - - 13
----------------------------------------------------
EBITDA R$ 4,837 1,943 - - 6,780
Depreciation, amortization and depletion R$ - (13) - - (13)
----------------------------------------------------
EBIT R$ 4,837 1,930 - - 6,767
Gain on investments accounted for by the equity method R$ 57,892 (145,352) - - (87,460)
Net financial result R$ 4,917 5,351 - - 10,268
----------------------------------------------------
Income before income tax and social contribution R$ 67,646 (138,071) - - (70,425)
Income tax and social contribution R$ (2,723) (1,862) - - (4,585)
----------------------------------------------------
Net income R$ 64,923 (139,933) - - (75,010)
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
Information 2001
------------------------------------------------------------------------------------------------------------------------------------
1st 2nd 3rd 4th
Quarter Quarter Quarter Quarter Total
------------------------------------------------------------------------------------------------------------------------------------
Quantity sold - internal market MT (thousand) - - 7 9 16
---------------------------------------------------------------
Quantity sold - total MT (thousand) - - 7 9 16
===============================================================
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$ 724,927 754,707 627,385 826,533 826,533
===============================================================
Net operating revenues R$ 323 438 599 507 1,867
Cost of products R$ - - (15) (34) (49)
Other expenses/revenues R$ 3,650 315 2,547 4,824 11,336
Depreciation, amortization and depletion R$ 8 9 9 9 35
---------------------------------------------------------------
EBITDA R$ 3,981 762 3,140 5,306 13,189
Depreciation, amortization and depletion R$ (8) (9) (9) (9) (35)
---------------------------------------------------------------
EBIT R$ 3,973 753 3,131 5,297 13,154
Gain on investments accounted for by the equity method R$ (2,165) 27,928 (132,056) 222,617 116,324
Net financial result R$ 3,155 3,916 4,293 4,557 15,921
---------------------------------------------------------------
Income before income tax and social contribution R$ 4,963 32,597 (124,632) 232,471 145,399
Income tax and social contribution R$ 3,870 (2,818) (2,689) 2,211 574
---------------------------------------------------------------
Net income R$ 8,833 29,779 (127,321) 234,682 145,973
------------------------------------------------------------------------------------------------------------------------------------
43
8.4 - Aluminum Area - MRN (Adjusted and Non-Audited) Attachment I
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
Information 2002
------------------------------------------------------------------------------------------------------------------------------------
1st 2nd 3rd 4th
Quarter Quarter Quarter Quarter Total
------------------------------------------------------------------------------------------------------------------------------------
Quantity sold - external market MT (thousand) 485 790 - - 1,275
Quantity sold - internal market MT (thousand) 1,296 1,820 - - 3,116
----------------------------------------------------
Quantity sold - total MT (thousand) 1,781 2,610 - - 4,391
====================================================
Average sales price - external market US$ 20.56 19.09 - - 19.60
Average sales price - internal market US$ 19.46 18.01 - - 18.61
Average sales price - total US$ 19.80 16.31 - - 18.39
Long-term indebtedness, gross US$ 95,892 90,312 - - 90,312
Short-term indebtedness, gross US$ 14,436 18,780 - - 18,780
----------------------------------------------------
Total indebtedness, gross US$ 110,328 109,092 - - 109,092
====================================================
Stockholders' equity R$ 594,895 562,633 - - 562,633
====================================================
Net operating revenues R$ 76,448 111,452 - - 187,900
Cost of products R$ (39,697) (60,627) - - (100,324)
Other expenses/revenues R$ (569) (5,271) - - (5,840)
Depreciation, amortization and depletion R$ 9,840 13,325 - - 23,165
----------------------------------------------------
EBITDA R$ 46,022 58,879 - - 104,901
Depreciation, amortization and depletion R$ (9,840) (13,325) - - (23,165)
----------------------------------------------------
EBIT R$ 36,182 45,554 - - 81,736
Gain on investments accounted for by the equity method R$ (3,403) (1,347) - - (4,750)
Non-operating result R$ (13) 11 - - (2)
Net financial result R$ (1,804) (32,286) - - (34,090)
----------------------------------------------------
Income before income tax and social contribution R$ 30,962 11,932 - - 42,894
Income tax and social contribution R$ (6,522) (4,139) - - (10,661)
----------------------------------------------------
Net income R$ 24,440 7,793 - - 32,233
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
Information 2001
------------------------------------------------------------------------------------------------------------------------------------
1st 2nd 3rd 4th
Quarter Quarter Quarter Quarter Total
------------------------------------------------------------------------------------------------------------------------------------
Quantity sold - external market MT (thousand) 581 886 954 992 3,413
Quantity sold - internal market MT (thousand) 1,604 1,946 1,806 2,183 7,539
---------------------------------------------------------------
Quantity sold - total MT (thousand) 2,185 2,832 2,760 3,175 10,952
===============================================================
Average sales price - external market US$ 22.70 21.99 22.16 22.32 22.27
Average sales price - internal market US$ 20.08 20.16 20.37 21.00 20.36
Average sales price - total US$ 21.39 21.08 20.99 21.67 20.95
Long-term indebtedness, gross US$ 700 - 7,929 22,038 22,038
Short-term indebtedness, gross US$ 1,456 1,400 11,594 706 706
---------------------------------------------------------------
Total indebtedness, gross US$ 2,156 1,400 19,523 22,744 22,744
===============================================================
Stockholders' equity R$ 522,722 577,587 544,062 605,387 605,387
===============================================================
Net operating revenues R$ 86,629 124,021 139,255 154,020 503,925
Cost of products R$ (38,030) (58,247) (59,943) (65,360) (221,580)
Other expenses/revenues R$ (2,192) (2,172) (2,075) (2,204) (8,643)
Depreciation, amortization and depletion R$ 11,199 11,244 10,520 12,534 45,497
---------------------------------------------------------------
EBITDA R$ 57,606 74,846 87,757 98,990 319,199
Depreciation, amortization and depletion R$ (11,199) (11,244) (10,520) (12,534) (45,497)
---------------------------------------------------------------
EBIT R$ 46,407 63,602 77,237 86,456 273,702
Gain on investments accounted for by the equity method R$ (5,540) (2,050) (10,763) 16,868 (1,485)
Non-operating result R$ (79) 82 133 (18) 118
Net financial result R$ 225 (1,895) (2,541) (3,574) (7,785)
---------------------------------------------------------------
Income before income tax and social contribution R$ 41,013 59,739 64,066 99,732 264,550
Income tax and social contribution R$ (3,845) (4,875) (11,692) 237 (20,175)
---------------------------------------------------------------
Net income R$ 37,168 54,864 52,374 99,969 244,375
------------------------------------------------------------------------------------------------------------------------------------
44
8.5 - Aluminum Area - VALESUL (Adjusted and Non-Audited) Attachment I
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
Information 2002
------------------------------------------------------------------------------------------------------------------------------------
1st 2nd 3rd 4th
Quarter Quarter Quarter Quarter Total
------------------------------------------------------------------------------------------------------------------------------------
Quantity sold - external market MT (thousand) 9 12 - - 21
Quantity sold - internal market MT (thousand) 12 11 - - 23
----------------------------------------------------
Quantity sold - total MT (thousand) 21 23 - - 44
====================================================
Average sales price - external market US$ 1,467.44 1,481.49 - - 1,475.68
Average sales price - internal market US$ 1,906.21 1,865.52 - - 1,886.59
Average sales price - total US$ 1,720.97 1,663.20 - - 1,690.23
Long-term indebtedness, gross US$ 1,868 1,416 - - 1,416
Short-term indebtedness, gross US$ 685 555 - - 555
----------------------------------------------------
Total indebtedness, gross US$ 2,553 1,971 - - 1,971
====================================================
Stockholders' equity R$ 231,170 246,030 - - 246,030
====================================================
Net operating revenues R$ 77,727 92,816 - - 170,543
Cost of products R$ (63,576) (71,701) - - (135,277)
Other expenses/revenues R$ (3,223) (1,164) - - (4,387)
Depreciation, amortization and depletion R$ 3,332 3,600 - - 6,932
----------------------------------------------------
EBITDA R$ 14,260 23,551 - - 37,811
Depreciation, amortization and depletion R$ (3,332) (3,600) - - (6,932)
----------------------------------------------------
EBIT R$ 10,928 19,951 - - 30,879
Non-operating result R$ 55 (54) - - 1
Net financial result R$ (597) 621 - - 24
----------------------------------------------------
Income before income tax and social contribution R$ 10,386 20,518 - - 30,904
Income tax and social contribution R$ (4,122) (5,652) - - (9,774)
----------------------------------------------------
Net income R$ 6,264 14,866 - - 21,130
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
Information 2001
------------------------------------------------------------------------------------------------------------------------------------
1st 2nd 3rd 4th
Quarter Quarter Quarter Quarter Total
------------------------------------------------------------------------------------------------------------------------------------
Quantity sold - external market MT (thousand) 2 9 7 5 23
Quantity sold - internal market MT (thousand) 14 17 11 11 53
---------------------------------------------------------------
Quantity sold - total MT (thousand) 16 26 18 16 76
===============================================================
Average sales price - external market US$ 1,733.37 1,585.14 1,554.56 1,490.00 1,590.39
Average sales price - internal market US$ 2,155.46 2,047.69 1,934.35 1,887.58 2,054.36
Average sales price - total US$ 2,107.06 1,882.41 1,784.68 1,757.16 1,916.59
Long-term indebtedness, gross US$ 2,568 2,273 2,598 2,002 2,002
---------------------------------------------------------------
Short-term indebtedness, gross US$ 33,619 9,700 939 1,412 1,412
---------------------------------------------------------------
Total indebtedness, gross US$ 36,187 11,973 3,537 3,414 3,414
===============================================================
Stockholders' equity R$ 190,016 205,881 218,141 224,900 224,900
===============================================================
Net operating revenues R$ 59,652 98,954 77,239 66,811 302,656
Cost of products R$ (40,859) (68,267) (54,855) (49,928) (213,909)
Other expenses/revenues R$ (5,104) (11,433) 1,814 (5,956) (20,679)
Depreciation, amortization and depletion R$ 3,510 3,027 3,912 3,307 13,756
---------------------------------------------------------------
EBITDA R$ 17,199 22,281 28,110 14,234 81,824
Depreciation, amortization and depletion R$ (3,510) (3,027) (3,912) (3,307) (13,756)
---------------------------------------------------------------
EBIT R$ 13,689 19,254 24,198 10,927 68,068
Non-operating result R$ 49 (1,392) 13 (194) (1,524)
Net financial result R$ (3,079) 3,513 (8,500) (1,087) (9,153)
---------------------------------------------------------------
Income before income tax and social contribution R$ 10,659 21,375 15,711 9,646 57,391
Income tax and social contribution R$ (2,597) (5,510) (3,451) (2,887) (14,445)
---------------------------------------------------------------
Net income R$ 8,062 15,865 12,260 6,759 42,946
------------------------------------------------------------------------------------------------------------------------------------
45
8.6 - Pelletizing Affiliates - HISPANOBRAS (Adjusted and Non-Audited) Attachment I
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
Information 2002
------------------------------------------------------------------------------------------------------------------------------------
1st 2nd 3rd 4th
Quarter Quarter Quarter Quarter Total
-----------------------------------------------------------------------------------------------------------------------------------
Quantity sold - external market MT (thousand) 487 355 - - 842
Quantity sold - internal market - CVRD MT (thousand) 420 480 - - 900
----------------------------------------------------
Quantity sold - total MT (thousand) 907 835 - - 1,742
====================================================
Average sales price - external market US$ 31.33 31.49 - - 31.40
Average sales price - internal market US$ 31.43 31.63 - - 31.54
Average sales price - total US$ 31.38 31.56 - - 31.47
----------------------------------------------------
Stockholders' equity R$ 85,476 85,790 - - 85,790
====================================================
Net operating revenues R$ 67,353 59,359 - - 126,712
Cost of products R$ (57,628) (55,855) - - (113,483)
Other expenses/revenues R$ (737) (804) - - (1,541)
Depreciation, amortization and depletion R$ 2,458 2,458 - - 4,916
----------------------------------------------------
EBITDA R$ 11,446 5,158 - - 16,604
Depreciation, amortization and depletion R$ (2,458) (2,458) - - (4,916)
----------------------------------------------------
EBIT R$ 8,988 2,700 - - 11,688
Non-operating result R$ (1,465) (4,923) - - (6,388)
Net financial result R$ 854 5,888 - - 6,742
----------------------------------------------------
Income before income tax and social contribution R$ 8,377 3,665 - - 12,042
Income tax and social contribution R$ (3,362) (1,480) - - (4,842)
----------------------------------------------------
Net income R$ 5,015 2,185 - - 7,200
-----------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
Information 2001
------------------------------------------------------------------------------------------------------------------------------------
1st 2nd 3rd 4th
Quarter Quarter Quarter Quarter Total
------------------------------------------------------------------------------------------------------------------------------------
Quantity sold - external market MT (thousand) 312 336 422 148 1,218
Quantity sold - internal market - CVRD MT (thousand) 520 560 460 850 2,390
---------------------------------------------------------------
Quantity sold - total MT (thousand) 832 896 882 998 3,608
===============================================================
Average sales price - external market US$ 30.80 30.79 32.84 31.46 31.44
Average sales price - internal market US$ 30.57 31.55 32.44 31.05 31.41
Average sales price - total US$ 30.65 31.26 32.64 31.12 31.42
---------------------------------------------------------------
Stockholders' equity R$ 73,036 76,910 85,853 80,461 80,461
===============================================================
Net operating revenues R$ 52,089 64,459 73,261 78,924 268,733
Cost of products R$ (44,565) (53,537) (60,310) (64,358) (222,770)
Other expenses/revenues R$ (502) (487) 1,274 (2,620) (2,335)
Depreciation, amortization and depletion R$ 2,377 2,378 2,376 2,437 9,568
---------------------------------------------------------------
EBITDA R$ 9,399 12,813 16,601 14,383 53,196
Depreciation, amortization and depletion R$ (2,377) (2,378) (2,376) (2,437) (9,568)
---------------------------------------------------------------
EBIT R$ 7,022 10,435 14,225 11,946 43,628
Non-operating result R$ (1,471) (2,537) (2,622) (3,135) (9,765)
Net financial result R$ 2,460 833 4,127 (5,038) 2,382
---------------------------------------------------------------
Income before income tax and social contribution R$ 8,011 8,731 15,730 3,773 36,245
Income tax and social contribution R$ (2,161) (3,419) (5,347) 62 (10,865)
---------------------------------------------------------------
Net income R$ 5,850 5,312 10,383 3,835 25,380
------------------------------------------------------------------------------------------------------------------------------------
46
8.7 - Pelletizing Affiliates - ITABRASCO (Adjusted and Non-Audited) Attachment I
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
Information 2002
------------------------------------------------------------------------------------------------------------------------------------
1st 2nd 3rd 4th
Quarter Quarter Quarter Quarter Total
------------------------------------------------------------------------------------------------------------------------------------
Quantity sold - external market MT (thousand) 644 533 - - 1,177
Quantity sold - internal market - CVRD MT (thousand) 233 169 - - 402
----------------------------------------------------
Quantity sold - total MT (thousand) 877 702 - - 1,579
====================================================
Average sales price - external market US$ 31.16 28.46 - - 29.94
Average sales price - internal market US$ 31.90 27.79 - - 30.17
Average sales price - total US$ 31.35 28.30 - - 29.99
Long-term indebtedness, gross US$ - - - - -
Short-term indebtedness, gross US$ 18,023 17,133 - - 17,133
----------------------------------------------------
Total indebtedness, gross US$ 18,023 17,133 - - 17,133
====================================================
Stockholders' equity R$ 60,230 65,720 - - 65,720
====================================================
Net operating revenues R$ 65,575 49,920 - - 115,495
Cost of products R$ (56,551) (47,528) - - (104,079)
Other expenses/revenues R$ (1,020) 105 - - (915)
Depreciation, amortization and depletion R$ 327 328 - - 655
----------------------------------------------------
EBITDA R$ 8,331 2,825 - - 11,156
Depreciation, amortization and depletion R$ (327) (328) - - (655)
----------------------------------------------------
EBIT R$ 8,004 2,497 - - 10,501
Non-operating result R$ (2,494) (2,599) - - (5,093)
Net financial result R$ (637) 9,279 - - 8,642
----------------------------------------------------
Income before income tax and social contribution R$ 4,873 9,177 - - 14,050
Income tax and social contribution R$ (2,412) (3,687) - - (6,099)
----------------------------------------------------
Net income R$ 2,461 5,490 - - 7,951
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
Information 2001
------------------------------------------------------------------------------------------------------------------------------------
1st 2nd 3rd 4th
Quarter Quarter Quarter Quarter Total
------------------------------------------------------------------------------------------------------------------------------------
Quantity sold - external market MT (thousand) 497 579 471 700 2,247
Quantity sold - internal market MT (thousand) 278 196 271 295 1,040
---------------------------------------------------------------
Quantity sold - total MT (thousand) 775 775 742 995 3,287
===============================================================
Average sales price - external market US$ 31.13 31.96 31.80 31.67 31.63
Average sales price - internal market US$ 31.29 32.66 31.50 32.44 31.93
Average sales price - total US$ 31.19 31.62 31.69 31.90 31.72
Long-term indebtedness, gross US$ - - - - -
Short-term indebtedness, gross US$ 503 - 407 522 522
---------------------------------------------------------------
Total indebtedness, gross US$ 503 - 407 552 522
===============================================================
Stockholders' equity R$ 46,768 65,160 68,571 58,164 58,164
===============================================================
Net operating revenues R$ 48,950 56,985 59,432 80,318 245,685
Cost of products R$ (45,783) (44,756) (52,288) (59,804) (202,631)
Other expenses/revenues R$ (1,086) (1,379) 2,177 (4,673) (4,961)
Depreciation, amortization and depletion R$ 288 309 338 363 1,298
---------------------------------------------------------------
EBITDA R$ 2,369 11,159 9,659 16,204 39,391
Depreciation, amortization and depletion R$ (288) (309) (338) (363) (1,298)
---------------------------------------------------------------
EBIT R$ 2,081 10,850 9,321 15,841 38,093
Non-operating result R$ (12) 6,437 15 (8,246) (1,806)
Net financial result R$ 2,770 1,808 2,369 (5,604) 1,343
---------------------------------------------------------------
Income before income tax and social contribution R$ 4,839 19,095 11,705 1,991 37,630
Income tax and social contribution R$ (3,288) (707) (7,231) 2,419 (8,807)
---------------------------------------------------------------
Net income R$ 1,551 18,388 4,474 4,410 28,823
------------------------------------------------------------------------------------------------------------------------------------
47
8.8 - Pelletizing Affiliates - KOBRASCO (Adjusted and Non-Audited) Attachment I
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
Information 2002
------------------------------------------------------------------------------------------------------------------------------------
1st 2nd 3rd 4th
Quarter Quarter Quarter Quarter Total
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
Quantity sold - external market MT (thousand) 436 534 - - 970
Quantity sold - internal market - CVRD MT (thousand) 420 478 - - 898
Quantity sold - internal market - Others - - - - -
----------------------------------------------------
Quantity sold - total MT (thousand) 856 1,012 - - 1,868
====================================================
Average sales price - external market US$ 31.31 29.34 - - 30.23
Average sales price - internal market US$ 32.08 29.24 - - 30.57
Average sales price - total US$ 31.69 29.30 - - 30.39
Long-term indebtedness, gross US$ 149,583 143,378 - - 143,378
Short-term indebtedness, gross US$ - - - - -
----------------------------------------------------
Total indebtedness, gross US$ 149,583 143,378 - - 143,378
====================================================
Stockholders' equity R$ 16,608 (32,692) - - (32,692)
====================================================
Net operating revenues R$ 63,984 72,449 - - 136,433
Cost of products R$ (50,027) (67,075) - - (117,102)
Other expenses/revenues R$ (1,109) 1,471 - - 362
Depreciation, amortization and depletion R$ 2,248 2,248 - - 4,496
----------------------------------------------------
EBITDA R$ 15,096 9,093 - - 24,189
Depreciation, amortization and depletion R$ (2,248) (2,248) - - (4,496)
----------------------------------------------------
EBIT R$ 12,848 6,845 - - 19,693
Other expenses - non cash R$ (2,984) (3,617) - - (6,601)
Gain on investments accounted for by the equity method R$ 57 939 - - 996
Non-operating result R$ 31 27 - - 58
Net financial result R$ (3,811) (78,006) - - (81,817)
----------------------------------------------------
Income before income tax and social contribution R$ 6,141 (73,812) - - (67,671)
Income tax and social contribution R$ (3,093) 24,511 - - 21,418
----------------------------------------------------
Net income R$ 3,048 (49,301) - - (46,253)
------------------------------------------------------------------------------------------------------------------------------------
Information 2001
------------------------------------------------------------------------------------------------------------------------------------
1st 2nd 3rd 4th
Quarter Quarter Quarter Quarter Total
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
Quantity sold - external market MT (thousand) 561 523 493 558 2,135
Quantity sold - internal market - CVRD MT (thousand) 420 489 630 510 2,049
Quantity sold - internal market - Others - - - - -
---------------------------------------------------------------
Quantity sold - total MT (thousand) 981 1,012 1,123 1,068 4,184
===============================================================
Average sales price - external market US$ 30.04 31.38 33.26 30.80 30.56
Average sales price - internal market US$ 31.80 31.29 30 31.64 31.32
Average sales price - total US$ 30.79 31.34 31.19 31.20 30.93
Long-term indebtedness, gross US$ 128,282 128,006 128,915 128,797 128,797
Short-term indebtedness, gross US$ - - - - -
---------------------------------------------------------------
Total indebtedness, gross US$ 128,282 128,006 128,915 128,797 128,797
===============================================================
Stockholders' equity R$ 39,224 32,574 (39,435) 13,560 13,560
===============================================================
Net operating revenues R$ 61,210 70,414 90,720 84,647 306,991
Cost of products R$ (46,868) (56,123) (68,213) (66,792) (237,996)
Other expenses/revenues R$ (734) (755) (781) (695) (2,965)
Depreciation, amortization and depletion R$ 2,225 2,226 2,221 2,260 8,932
---------------------------------------------------------------
EBITDA R$ 15,833 15,762 23,947 19,420 74,962
Depreciation, amortization and depletion R$ (2,225) (2,226) (2,221) (2,260) (8,932)
---------------------------------------------------------------
EBIT R$ 13,608 13,536 21,726 17,160 66,030
Other expenses - non cash R$ - - (52,000) 14,086 (37,914)
Gain on investments accounted for by the equity method R$ 316 229 (545) 618 618
Non-operating result R$ 12 (46) 126 (39) 53
Net financial result R$ (32,118) (23,780) (51,598) 41,253 (66,243)
---------------------------------------------------------------
Income before income tax and social contribution R$ (18,182) (10,061) (82,291) 73,078 (37,456)
Income tax and social contribution R$ 6,198 3,411 10,281 (20,072) (182)
---------------------------------------------------------------
Net income R$ (11,984) (6,650) (72,010) 53,006 (37,638)
------------------------------------------------------------------------------------------------------------------------------------
48
8.9 - Pelletizing Affiliates - NIBRASCO (Adjusted and Non-Audited) Attachment I
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
Information 2002
------------------------------------------------------------------------------------------------------------------------------------
1st 2nd 3rd 4th
Quarter Quarter Quarter Quarter Total
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
Quantity sold - external market MT (thousand) 407 686 - - 1,093
Quantity sold - internal market - CVRD MT (thousand) 584 1,544 - - 2,128
Quantity sold - internal market - Others MT (thousand) 9 27 - - 36
----------------------------------------------------
Quantity sold - total MT (thousand) 1,000 2,257 - - 3,257
====================================================
Average sales price - external market US$ 30.25 30.88 - - 30.64
Average sales price - internal market US$ 30.49 31.58 - - 31.28
Average sales price - total US$ 30.39 31.36 - - 31.06
Long-term indebtedness, gross US$ 3,600 2,400 - - 2,400
Short-term indebtedness, gross US$ 2,484 2,400 - - 2,400
Total indebtedness, gross US$ 6,084 4,800 - - 4,800
----------------------------------------------------
Stockholders' equity R$ 78,682 84,259 - - 84,259
====================================================
Net operating revenues R$ 70,936 163,815 - - 234,751
Cost of products R$ (70,397) (144,430) - - (214,827)
Other expenses/revenues R$ 144 2,006 - - 2,150
Depreciation, amortization and depletion R$ 4,217 4,218 - - 8,435
----------------------------------------------------
EBITDA R$ 4,900 25,609 - - 30,509
Depreciation, amortization and depletion R$ (4,217) (4,218) - - (8,435)
----------------------------------------------------
EBIT R$ 683 21,391 - - 22,074
Other expenses - non cash R$ (2,548) (7,041) - - (9,589)
Net financial result R$ (2,463) (4,034) - - (6,497)
----------------------------------------------------
Income before income tax and social contribution R$ (4,328) 17,357 - - 5,988
Income tax and social contribution R$ 66 (4,737) - - (4,671)
----------------------------------------------------
Net income R$ (4,262) 12,620 - - 1,317
------------------------------------------------------------------------------------------------------------------------------------
Information 2001
------------------------------------------------------------------------------------------------------------------------------------
1st 2nd 3rd 4th
Quarter Quarter Quarter Quarter Total
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
Quantity sold - external market MT (thousand) 806 559 514 432 2,311
Quantity sold - internal market - CVRD MT (thousand) 1,169 1,572 929 871 4,541
Quantity sold - internal market - Others MT (thousand) 35 38 - 68 141
---------------------------------------------------------------
Quantity sold - total MT (thousand) 2,010 2,169 1,443 1,371 6,993
===============================================================
Average sales price - external market US$ 30.16 30.00 30.48 30.10 30.20
Average sales price - internal market US$ 30 31 29 27 29.70
Average sales price - total US$ 30.31 31.00 29.22 27.90 29.80
Long-term indebtedness, gross US$ 6,000 4,800 4,800 3,600 3,600
Short-term indebtedness, gross US$ 2,619 2,400 2,505 2,400 2,400
---------------------------------------------------------------
Total indebtedness, gross US$ 8,619 7,200 7,305 6,000 6,000
===============================================================
Stockholders' equity R$ 122,313 113,062 79,058 82,945 82,945
===============================================================
Net operating revenues R$ 122,876 151,327 109,356 98,864 482,423
Cost of products R$ 107,077) (125,975) (102,174) (87,913) (423,139)
Other expenses/revenues R$ (10,534) (8,049) 12,922 1,747 (3,914)
Depreciation, amortization and depletion R$ 4,086 4,086 4,128 4,130 16,430
---------------------------------------------------------------
EBITDA R$ 9,351 21,389 24,232 16,828 71,800
Depreciation, amortization and depletion R$ (4,086) (4,086) (4,128) (4,130) (16,430)
---------------------------------------------------------------
EBIT R$ 5,265 17,303 20,104 12,698 55,370
Other expenses - non cash R$ - - (42,000) (2,960) (44,960)
Net financial result R$ 902 679 (8,420) (41) (6,880)
---------------------------------------------------------------
Income before income tax and social contribution R$ 6,167 17,982 (30,316) 9,697 3,530
Income tax and social contribution R$ (3,172) (4,734) (3,688) (2,851) (14,445)
---------------------------------------------------------------
Net income R$ 2,995 13,248 (34,004) 6,846 (10,915)
------------------------------------------------------------------------------------------------------------------------------------
49
8.10 - Pelletizing Affiliates - SAMARCO (Adjusted and Non-Audited) Attachment I
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
Information 2002
------------------------------------------------------------------------------------------------------------------------------------
1st 2nd 3rd 4th
Quarter Quarter Quarter Quarter Total
------------------------------------------------------------------------------------------------------------------------------------
Quantity sold - total MT (thousand) 3,301 3,436 - - 6,737
====================================================
Average sales price - total US$ 28.48 28.78 - - 28.63
Long-term indebtedness, gross US$ 92,788 86,584 - - 86,584
Short-term indebtedness, gross US$ 169,170 180,539 - - 180,539
----------------------------------------------------
Total indebtedness, gross US$ 261,958 267,123 - - 267,123
====================================================
Stockholders' equity R$ 510,038 417,935 - - 417,935
====================================================
Net operating revenues R$ 212,909 239,124 - - 452,033
Cost of products R$ (108,837) (114,932) - - (223,769)
Other expenses/revenues R$ (18,632) (19,474) - - (38,106)
Depreciation, amortization and depletion R$ 7,745 9,358 - - 17,103
----------------------------------------------------
EBITDA R$ 93,185 114,076 - - 207,261
Depreciation, amortization and depletion R$ (7,745) (9,358) - - (17,103)
----------------------------------------------------
EBIT R$ 85,440 104,718 - - 190,158
Other expenses/revenues - non cash R$ (1,815) (9,221) - - (11,036)
Gain on investments accounted for by the equity method R$ 2,213 (11,509) - - (9,296)
Non-operating result R$ 50 (35) - - 15
Net financial result R$ (15,237) (95,886) - - (111,123)
----------------------------------------------------
Income before income tax and social contribution R$ 70,651 (11,933) - - 58,718
Income tax and social contribution R$ (12,555) (7,431) - - (19,986)
----------------------------------------------------
Net income R$ 58,096 (19,364) - - 38,732
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
Information 2001
------------------------------------------------------------------------------------------------------------------------------------
1st 2nd 3rd 4th
Quarter Quarter Quarter Quarter Total
------------------------------------------------------------------------------------------------------------------------------------
Quantity sold - total MT (thousand) 3,399 2,919 2,312 2,571 11,201
===============================================================
Average sales price - total US$ 28.83 30.00 29.44 29.55 29.70
Long-term indebtedness, gross US$ 166,257 132,655 119,394 109,691 109,691
Short-term indebtedness, gross US$ 188,795 164,003 158,204 171,223 171,223
---------------------------------------------------------------
Total indebtedness, gross US$ 355,052 296,658 277,598 280,914 280,914
===============================================================
Stockholders' equity R$ 418,290 447,693 399,275 451,942 451,942
===============================================================
Net operating revenues R$ 197,904 190,671 166,905 208,039 763,519
Cost of products R$ (95,771) (80,978) (73,499) (102,700) (352,948)
Other expenses/revenues R$ (18,514) (19,602) (12,796) (16,464) (67,376)
Depreciation, amortization and depletion R$ 9,268 8,113 5,793 2,503 25,677
---------------------------------------------------------------
EBITDA R$ 92,887 98,204 86,403 91,378 368,872
Depreciation, amortization and depletion R$ (9,268) (8,113) (5,793) (2,503) (25,677)
---------------------------------------------------------------
EBIT R$ 83,619 90,091 80,610 88,875 343,195
Other expenses/revenues - non cash R$ (5,275) (2,993) (4,433) (19,675) (32,376)
Gain on investments accounted for by the equity method R$ (3,570) (4,541) (9,266) 16,582 (795)
Non-operating result R$ - 16 (19,440) (461) (19,885)
Net financial result R$ (63,754) (45,453) (97,984) 50,563 (156,628)
---------------------------------------------------------------
Income before income tax and social contribution R$ 11,020 37,120 (50,513) 135,884 133,511
Income tax and social contribution R$ (3,324) (7,657) 2,093 (18,503) (27,391)
---------------------------------------------------------------
Net income R$ 7,696 29,463 (48,420) 117,381 106,120
------------------------------------------------------------------------------------------------------------------------------------
50
8.11 - Iron Ore Area - FERTECO (Adjusted and Non-Audited) Attachment I
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
Information 2002
------------------------------------------------------------------------------------------------------------------------------------
1st 2nd 3rd 4th
Quarter Quarter Quarter Quarter Total
-----------------------------------------------------------------------------------------------------------------------------------
Quantity sold - external market MT (thousand) 2,470 3,434 - - 5,904
Quantity sold - internal market MT (thousand) 789 1,343 - - 2,132
----------------------------------------------------
Quantity sold - total MT (thousand) 3,259 4,777 - - 8,036
====================================================
Average sales price - external market US$ 16.91 19.00 - - 18.13
Average sales price - internal market US$ 12.98 17.10 - - 15.58
Average sales price - total US$ 15.96 18.47 - - 17.45
Long-term indebtedness, gross US$ 94,359 88,367 - - 88,367
Short-term indebtedness, gross US$ 55,244 58,473 - - 58,473
----------------------------------------------------
Total indebtedness, gross US$ 149,603 146,840 - - 146,840
====================================================
Stockholders' equity R$ 215,058 544,020 - - 544,020
====================================================
Net operating revenues R$ 126,852 195,290 - - 322,142
Cost of products R$ (70,019) (127,765) - - (197,784)
Other expenses/revenues R$ (12,481) (12,121) - - (24,602)
Depreciation, amortization and depletion R$ 7,273 7,591 - - 14,864
----------------------------------------------------
EBITDA R$ 51,625 62,995 - - 114,620
Depreciation, amortization and depletion R$ (7,273) (7,591) - - (14,864)
----------------------------------------------------
EBIT R$ 44,352 55,404 - - 99,756
Result of Investments Participation (* * ) R$ 9 (28,710) - - (28,701)
Non-operating result R$ (216) 121 - - (95)
Net financial result R$ (4,575) (44,260) - - (48,835)
----------------------------------------------------
Income before income tax and social contribution R$ 39,570 (34,396) - - 5,174
Income tax and social contribution R$ (10,519) 24,344 - - 13,825
----------------------------------------------------
Net income R$ 29,051 (10,052) - - 18,999
-----------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
Information 2001
------------------------------------------------------------------------------------------------------------------------------------
1st 2nd 3rd 4th
Quarter Quarter Quarter Quarter Total
------------------------------------------------------------------------------------------------------------------------------------
Quantity sold - external market MT (thousand) - 3,955 3,556 3,653 11,164
Quantity sold - internal market MT (thousand) - 598 455 699 1,752
---------------------------------------------------------------
Quantity sold - total MT (thousand) - 4,553 4,011 4,352 12,916
===============================================================
Average sales price - external market US$ - 16.50 17.50 18.43 17.05
Average sales price - internal market US$ - 5.35 14.72 8.79 9.40
Average sales price - total US$ - 15.16 17.18 16.83 16.11
Long-term indebtedness, gross US$ - 101,394 103,737 95,887 95,887
Short-term indebtedness, gross US$ - 86,257 72,200 52,696 52,696
---------------------------------------------------------------
Total indebtedness, gross US$ - 187,651 175,937 148,583 148,583
===============================================================
Stockholders' equity R$ - 225,625 204,610 193,506 193,506
===============================================================
Net operating revenues R$ - 167,796 175,874 200,643 544,313
Cost of products R$ - (101,601) (86,911) (183,464) (371,976)
Other expenses/revenues R$ - (23,309) (24,832) (16,032) (64,173)
Depreciation, amortization and depletion R$ - 2,235 3,375 3,794 9,404
EBITDA R$ - 45,121 67,506 4,941 117,568
---------------------------------------------------------------
Depreciation, amortization and depletion R$ - (2,235) (3,375) (3,794) (9,404)
EBIT R$ - 42,886 64,131 1,147 108,164
---------------------------------------------------------------
Result of Investments Participation (* * ) R$ - (3,671) (2,041) 16 (5,696)
Non-operating result R$ - (106) (95) (173) (374)
Net financial result R$ - (31,412) (76,425) 44,716 (63,121)
---------------------------------------------------------------
Income before income tax and social contribution R$ - 7,697 (14,430) 45,706 38,973
Income tax and social contribution R$ - (5,354) 9,020 4,067 7,733
---------------------------------------------------------------
Net income R$ - 2,343 (5,410) 49,773 46,706
------------------------------------------------------------------------------------------------------------------------------------
(*) After acquisition on 04/01
(**) Includes R$ 21,040 of provision for loss at MRS and R$ 7,670 of
amortization of goodwill at MRS.
51
8.12 - Manganese and Ferro Alloys Area - SIBRA (Adjusted and Non-Audited) Attachment I
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
Information 2002
------------------------------------------------------------------------------------------------------------------------------------
1st 2nd 3rd 4th
Quarter Quarter Quarter Quarter Total
------------------------------------------------------------------------------------------------------------------------------------
Quantity sold - external market - ferro alloy MT (thousand) 10 15 - - 25
Quantity sold - internal market - ferro alloy MT (thousand) 19 16 - - 35
----------------------------------------------------
Quantity sold - total MT (thousand) 29 31 - - 60
====================================================
Quantity sold - external market - manganese MT (thousand) 242 213 - - 455
Quantity sold - internal market - manganese MT (thousand) 36 52 - - 88
----------------------------------------------------
Quantity sold - total MT (thousand) 278 265 - - 543
====================================================
Average sales price - external market - ferro alloy US$ 465.60 379.66 - - 412.73
Average sales price - internal market - ferro alloy US$ 434.86 496.27 - - 466.81
Average sales price - total US$ 445.67 439.85 - - 448.03
Average sales price - external market - manganese US$ 52.99 46.36 - - 48.70
Average sales price - internal market - manganese US$ 69.56 53.46 - - 59.78
Average sales price - total US$ 55.11 47.75 - - 51.39
Long-term indebtedness, gross US$ 24,720 21,499 - - 21,499
Short-term indebtedness, gross US$ 24,465 22,503 - - 22,503
----------------------------------------------------
Total indebtedness, gross US$ 49,185 44,002 - - 44,002
====================================================
Stockholders' equity R$ 242,845 265,581 - - 265,581
====================================================
Net operating revenues R$ 62,105 59,941 - - 122,046
Cost of products R$ (31,569) (35,842) - - (67,411)
Other expenses/revenues R$ (2,024) (5,017) - - (7,041)
Depreciation, amortization and depletion R$ 2,186 2,240 - - 4,426
----------------------------------------------------
EBITDA R$ 30,698 21,322 - - 52,020
Depreciation, amortization and depletion R$ (2,186) (2,240) - - (4,426)
----------------------------------------------------
EBIT R$ 28,512 19,082 - - 47,594
Gain on investments accounted for by the equity method R$ 9,061 9,057 - - 18,118
Non-operating result R$ (234) 133 - - (101)
Net financial result R$ (1,784) (5,100) - - (6,884)
----------------------------------------------------
Income before income tax and social contribution R$ 35,555 23,172 - - 58,727
Income tax and social contribution R$ (1,994) (1,244) - - (3,238)
----------------------------------------------------
Net income R$ 33,561 21,928 - - 55,489
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
Information 2001
------------------------------------------------------------------------------------------------------------------------------------
1st 2nd 3rd 4th
Quarter Quarter Quarter Quarter Total
------------------------------------------------------------------------------------------------------------------------------------
Quantity sold - external market - ferro alloy MT (thousand) 10 9 7 10 36
Quantity sold - internal market - ferro alloy MT (thousand) 15 15 14 81 125
---------------------------------------------------------------
Quantity sold - total MT (thousand) 25 24 21 91 161
===============================================================
Quantity sold - external market - manganese MT (thousand) 189 337 284 288 1,098
Quantity sold - internal market - manganese MT (thousand) 22 2 22 26 72
---------------------------------------------------------------
Quantity sold - total MT (thousand) 211 339 306 314 1,170
===============================================================
Average sales price - external market - ferro alloy US$ 650.08 570.11 542.65 475.42 519.40
Average sales price - internal market - ferro alloy US$ 538.29 441.24 422.62 236.53 196.92
Average sales price - total US$ 582.53 489.44 460.70 314.01 267.67
Average sales price - external market - manganese US$ 39.41 45.61 47.71 49.44 46.27
Average sales price - internal market - manganese US$ 61.44 245.17 67.07 48.72 60.15
Average sales price - total US$ 41.74 46.54 49.13 49.38 47.13
Long-term indebtedness, gross US$ 41,322 51,374 43,986 23,937 23,937
Short-term indebtedness, gross US$ 35,241 24,292 20,457 25,102 25,102
---------------------------------------------------------------
Total indebtedness, gross US$ 76,563 75,666 64,443 49,039 49,039
===============================================================
Stockholders' equity R$ 135,167 155,189 161,011 210,144 210,144
===============================================================
Net operating revenues R$ 44,719 58,425 16,260 104,173 223,577
Cost of products R$ (28,943) (25,469) (9,957) (63,997) (128,366)
Other expenses/revenues R$ (20,865) (3,627) 247 10,018 (14,227)
Depreciation, amortization and depletion R$ - 5,278 1,984 3,246 10,508
---------------------------------------------------------------
EBITDA R$ (5,089) 34,607 8,534 53,440 91,492
Depreciation, amortization and depletion R$ - (5,278) (1,984) (3,246) (10,508)
---------------------------------------------------------------
EBIT R$ (5,089) 29,329 6,550 50,194 80,984
Gain on investments accounted for by the equity method R$ 4,922 1,617 307 9,607 16,453
Non-operating result R$ (481) (2,722) (662) (2,158) (6,023)
Net financial result R$ (5,272) (4,009) 641 (14,040) (22,680)
---------------------------------------------------------------
Income before income tax and social contribution R$ (5,920) 24,215 6,836 43,603 68,734
Income tax and social contribution R$ - (4,192) (1,014) 5,531 325
---------------------------------------------------------------
Net income R$ (5,920) 20,023 5,822 49,134 69,059
------------------------------------------------------------------------------------------------------------------------------------
52
8.13 - Manganese and Ferro Alloys Area - CPFL (Adjusted and Non-Audited) Attachment I
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
Information 2002
------------------------------------------------------------------------------------------------------------------------------------
1st 2nd 3rd 4th
Quarter Quarter Quarter Quarter Total
------------------------------------------------------------------------------------------------------------------------------------
Quantity sold - external market MT (thousand) 13 17 - - 30
Quantity sold - internal market MT (thousand) 24 20 - - 44
---------------------------------------------------------------
Quantity sold - total MT (thousand) 37 37 - - 74
===============================================================
Average sales price - external market US$ 568.10 687.76 - - 635.91
Average sales price - internal market US$ 489.47 468.73 - - 480.04
Average sales price - total US$ 517.01 569.36 - - 543.19
Long-term indebtedness, gross US$ 3,932 3,853 - - 3,853
Short-term indebtedness, gross US$ 6,682 5,580 - - 5,580
---------------------------------------------------------------
Total indebtedness, gross US$ 10,614 9,433 - - 9,433
===============================================================
Stockholders' equity R$ 138,780 148,438 - - 148,438
===============================================================
Net operating revenues R$ 38,973 46,525 - - 85,498
Cost of products R$ (27,073) (33,506) - - (60,579)
Other expenses/revenues R$ (2,192) (4,729) - - (6,921)
Depreciation, amortization and depletion R$ 1,046 1,060 - - 2,106
---------------------------------------------------------------
EBITDA R$ 10,754 9,350 - - 20,104
Depreciation, amortization and depletion R$ (1,046) (1,060) - - (2,106)
---------------------------------------------------------------
EBIT R$ 9,708 8,290 - - 17,998
Gain on investments accounted for by the equity method R$ 71 421 - - 492
Non-operating result R$ (966) (250) - - (1,216)
Net financial result R$ 1,220 1,197 - - 2,417
---------------------------------------------------------------
Income before income tax and social contribution R$ 10,033 9,658 - - 19,691
Income tax and social contribution R$ - - - - -
---------------------------------------------------------------
Net income R$ 10,033 9,658 - - 19,691
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
Information 2001
------------------------------------------------------------------------------------------------------------------------------------
1st 2nd 3rd 4th
Quarter Quarter Quarter Quarter Total
------------------------------------------------------------------------------------------------------------------------------------
Quantity sold - external market MT (thousand) 18 20 14 13 65
Quantity sold - internal market MT (thousand) 16 17 14 43 90
---------------------------------------------------------------
Quantity sold - total MT (thousand) 34 37 28 56 155
===============================================================
Average sales price - external market US$ 475.61 593.98 703.40 670.68 570.12
Average sales price - internal market US$ 598.83 570.29 1,035.79 237.39 462.01
Average sales price - total US$ 533.34 583.02 868.73 338.37 507.35
Long-term indebtedness, gross US$ 7,707 10,390 8,544 3,582 3,582
Short-term indebtedness, gross US$ 12,853 9,427 8,003 8,107 8,107
---------------------------------------------------------------
Total indebtedness, gross US$ 20,560 19,817 16,547 11,689 11,689
===============================================================
Stockholders' equity R$ 110,615 112,711 119,849 128,747 128,747
===============================================================
Net operating revenues R$ 36,776 44,610 46,947 42,476 170,809
Cost of products R$ (26,004) (30,109) (35,119) (27,538) (118,770)
Other expenses/revenues R$ (4,884) (12,191) (1,191) (11,243) (29,509)
Depreciation, amortization and depletion R$ 909 909 909 909 3,636
---------------------------------------------------------------
EBITDA R$ 6,797 3,219 11,546 4,604 26,166
Depreciation, amortization and depletion R$ (909) (909) (909) (909) (3,636)
---------------------------------------------------------------
EBIT R$ 5,888 2,310 10,637 3,695 22,530
Gain on investments accounted for by the equity method R$ (93) (242) - (1,586) (1,921)
Non-operating result R$ (164) (671) (871) (127) (1,833)
Net financial result R$ (497) 1,030 (138) 3,123 3,518
---------------------------------------------------------------
Income before income tax and social contribution R$ 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$ 5,134 2,091 7,144 8,898 23,267
------------------------------------------------------------------------------------------------------------------------------------
53
9- OPINION OF INDEPENDENT ACCOUNTANTS
(A free translation of the original opinion in Portuguese expressed on quarterly
information prepared in accordance with the accounting principles prescribed by
Brazilian Corporate Law)
--------------------------------------------------------------------------------
August 14, 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 June 30, 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
Institute of Independent Auditors of Brazil (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 June 30, 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$
6,909,059 thousand (2001 - R$ 6,603,856 thousand) of these investments and
R$ 909,701 thousand (2001 - R$ 321,767 thousand) of the income produced by
them for the 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 March 31, 2002. We
reviewed this information at the time of its preparation and issued our
respective report on May 3, 2002, including the limitation mentioned in
paragraph 3.
PricewaterhouseCoopers
Independent Accountants
CRC-SP-160-S-RJ
Douglas H. Woods
Partner
Accountant CRC-SP-101.652/O-0-S-RJ
54
10- MEMBERS OF THE BOARD OF DIRECTORS, AUDIT COMMITTEE, CHIEF EXECUTIVE
OFFICER AND EXECUTIVE DIRECTORS
Board of Directors Chief Executive Officer
Roger Agnelli
Luiz Tarquinio Sardinha Ferro
Chairman
Director of Legal Affairs
Erik Persson Francisco Rohan de Lima
Renato Augusto Zagallo Villela dos Santos
Diretor de Desenvolvimento de Projetos Minerais
Francisco Valadares Povoa Jose Lancaster
Joao Moises Oliveira
Executive Director of Finance
Jose Marques de Lima Fabio de Oliveira Barbosa
Octavio Lopes Castello Branco Neto
Executive Director of Planning
Renato da Cruz Gomes Gabriel Stoliar
Romeu do Nascimento Teixeira
Executive Director of Human Resources and
Corporate Services
Audit Commitee Carla Grasso
Claudio Bernardo Guimaraes de Moraes
Executive Director of the Iron Ore Area
Eliseu Martins Armando de Oliveira Santos Neto
Marcos Fabio Coutinho
Executive Director of Logistics Area
Pedro Carlos de Mello Guilherme Rodolfo Laager
Ricardo Wiering de Barros
Executive Director of the Shareholdings Area and
Businesses Development
Antonio Miguel Marques
Executive Director of Non-Ferrous Area
Diego Cristobal Hernandez Cabrera
Eduardo de Carvalho Duarte Otto de Souza Marques Junior
Chief Accountant Director of Control
CRC-RJ 57439
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
(Registrant)
Date: August 20, 2002
By: /s/ Eduardo de Carvalho Duarte
------------------------------
Eduardo de Carvalho Duarte
Chief Accountant