===============================================================================
FORM 6-K
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 or 15d-16 OF
THE SECURITIES EXCHANGE ACT OF 1934
For November 13, 2001
Companhia Vale do Rio Doce
(Exact name of Registrant as specified in its charter)
Valley of the Doce River Company
(Translation of Registrant's name into English)
Federative Republic of Brazil
(Jurisdiction of incorporation or organization)
Avenida Graca Aranha, No. 26
20005-900 Rio de Janeiro, RJ, Brazil
(Address of principal executive offices)
[Indicate by check mark whether the registrant files or will file annual
reports under cover of Form 20-F or Form 40-F:]
FORM 20-F X FORM 40-F
--- ---
[Indicate by check mark whether the registrant by furnishing the information
contained in this form is also thereby furnishing the information to the
Commission pursuant to rule 12g3-2(b) under the Securities Exchange Act of
1934.]
YES NO X
--- ---
[If "Yes" is marked, indicate below the file number assigned to the registrant
in connection with Rule 12g3-2(b):] Not applicable
--------------
===============================================================================
Companhia Vale do Rio Doce
TABLE OF CONTENTS
This Form 6-K contains the following:
Item No. Description
-------- -----------
1. Third Quarter Financials
2. Press Release dated November 12, 2001 - Notice to Shareholders
3. Press Release 3Q01 - dated November 12,2001
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
COMPANHIA VALE DO RIO DOCE
By: /s/ Eduardo de Carvalho Duarte
-----------------------------------
Name: Eduardo de Carvalho Duarte
Title: Chief Accountant
Dated: November 13, 2001
Item 1
Contents
Part I Page
----
1- Management's Discussion and Analysis of the Operating Results for
Nine Months Ended September 30, 2001 Compared with Nine Months Ended
September 30, 2000 03
1.1- General Aspects 03
1.2- Comments on the Parent Company Results 03
1.2.1- Operating Revenue 04
1.2.2- Cost of Products and Services 05
1.2.3- Result of Investment Participations 05
1.2.4- Operating Income (Expenses) 07
1.2.5- Discontinued Operations 08
1.2.6- Cash Flow 08
1.2.7- Income Tax and Social Contribution 08
Part II
Quarterly Information and Notes to the Quarterly Information
2- Balance Sheet 09
3- Statement of Income 10
4- Statement of Changes in Stockholders' Equity 11
5- Statement of Cash Flows (Additional Information) 12
6- Notes to the Quarterly Information at September 30, 2001 and 2000 13
6.1- Operations 13
6.2- Presentation of Quarterly Information 13
6.3- Significant Accounting Policies 13
6.4- Cash and Cash Equivalents 13
6.5- Accounts Receivable from Customers 14
6.6- Transactions with Related Parties 14
6.7- Inventories 14
6.8- Deferred Income Tax and Social Contribution 15
6.9- Investments 16
6.10- Property, Plant and Equipment 20
6.11- Loans and Financing 21
6.12- Securitization Program 22
6.13- Contingent Liabilities 22
6.14- Labor Provision 23
6.15- Others - Long-term Liabilities 23
6.16- Pension Plan 23
6.17- Capital 24
1
6.18- Treasury Stock 25
6.19- Financial Result 25
6.20- Financial Instruments - Derivatives 25
6.21- Exchange Rate Exposure 27
6.22- Environmental and Site Reclamation and Restoration Costs 27
6.23- Income Statement Reclassifications 28
6.24- Subsequent Events 28
Part III
7- Other Information the Company Deems Relevant 30
7.1- Net Accumulated Income in R$ Million 30
7.2- Factors Affecting the Net Income in the Last 12 months in
R$ Million ` 30
7.3- Business Performance Ratios 31
7.4- Segment and Geographic Information 31
7.5- Share Performance on Stock Exchanges 34
7.6- Capital Expenditures (Non audited) 34
7.7- Operations for the Period Ended September (Non audited) 35
7.8- Changes in Prices (Non audited) 35
7.9- Iron Ore and Pellet Sales (Main Markets) (Non audited) 36
7.10- Shareholding Interests Organizational Chart at 09/30/01 37
7.11- Information about SAMITRI (Non audited) 38
8- Attachment I - Accounting Information
8.1- Aluminum Area - ALBRAS (Adjusted and Non Audited) 39
8.2- Aluminum Area - ALUNORTE (Adjusted and Non Audited) 40
8.3- Aluminum Area - ALUVALE (Adjusted and Non Audited) 41
8.4- Aluminum Area - MRN (Adjusted and Non Audited) 42
8.5- Aluminum Area - VALESUL (Adjusted and Non Audited) 43
8.6- Pulp and Paper Area - BAHIA SUL (Adjusted and Non Audited) 44
8.7- Pulp and Paper Area - CENIBRA (Adjusted and Non Audited) 45
8.8- Iron Ore Area - SAMITRI (Adjusted and Non Audited) 46
8.9- Iron Ore Area - SAMARCO (Adjusted and Non Audited) 47
8.10- Iron Ore Area - FERTECO (Adjusted and Non Audited) 48
8.11- Pelletizing Affiliates - HISPANOBRAS (Adjusted and
Non Audited) 49
8.12- Pelletizing Affiliates - ITABRASCO (Adjusted and Non Audited) 50
8.13- Pelletizing Affiliates - KOBRASCO (Adjusted and Non Audited) 51
8.14- Pelletizing Affiliates - NIBRASCO (Adjusted and Non Audited) 52
9- Review Report of Independent Accountants 53
10- Members of the Board of Directors, Audit Committee, Chief Executive
Officer and Executive Directors 54
2
Part I
(Expressed in thousands of reais)
1- Management's Discussion and Analysis of the Operating Results for Nine
Months Ended September 30, 2001 Compared with Nine Months Ended
September 30, 2000
1.1- General Aspects
Due to the diversified nature of the Company's operations, the following
factors should be taken into consideration in order to permit an adequate
analysis:
(a) The level of demand for iron ore and pellets and for our third-party
transportation services. In relation to iron ore export sales are
generally made pursuant to long-term supply contracts which provide for
annual price adjustments. Cyclical changes in the world demand for steel
products affect sales prices and volumes in the world iron ore market.
Different factors, such as the iron content of specific ore deposits,
the various beneficiation and purifying processes required to produce
the desired final product, particle size, moisture content, and the type
and concentration of contaminants (such as phosphorus, alumina and
manganese) in the ore influence contract prices for iron ore. Contract
prices also depend on transportation costs. Fines, lump ore and pellets
command different prices. We generally conduct annual price negotiations
from November to February of each year, with separate prices established
for the Asian and European iron ore markets. In the Asian market, the
renegotiated prices are effective as of April of each year. In the
European market, the renegotiated prices are effective as of January of
each year. Because of the wide variety of iron ore and pellet quality
and physical characteristics, iron ore and pellets are less
commodity-like than other minerals. This factor combined with the
structure of the market has prevented the development of an iron ore
futures market. Nowadays we do not hedge our exposure to iron ore price
volatility. Concerning logistics, CVRD is a lider in brazilian
transportation sector; we have extensive experience managing complex
logistics operations. Built originally to serve our iron ore business,
our logistics system includes our 898 km Vitoria-Minas Railroad and
Tubarao and Praia Mole ports in the Southern System, and our 892 km
Carajas Railroad and Ponta da Madeira marine terminal in the Northern
System. In addition, in the last five years we have acquired stakes in
three privatized railroads, including Centro-Atlantica, which
interconnects with the Vitoria-Minas Railroad using the same track
gauge, and therefore leverages its volumes. We made these investments to
expand our third-party cargo business. The principal cargo of the
Vitoria-Minas railroad is the transportation of our own iron ore and
other Brazilian mining companies, steel, coal and pig iron carried for
steel manufacturers located along the railroad, and limestone carried
for steel mills located in the States of Minas Gerais and Espirito
Santo. Market rates vary based upon the distance traveled and the
density of the freight in question;
(b) Fluctuations in the exchange rate between the two currencies have a
significant impact on the operating cash flows ;
(c) Approximately 95% of the short-term and long-term loans of the Company
as of 09/30/01 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);
(d) The variations of the main currencies and indices during the nine months
ended 09/30/01 and 09/30/00 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/Indices Parity
Period U.S. DOLLAR YEN GOLD IGPM (*) TJLP(**) US$ x Yen
------------------------------------------ ------------ ---------- ----------- ----------- ----------- ------------
09/30/01 36.6 30.9 6.8 7.7 6.9 119.7
09/30/00 3.1 (2.3) (5.6) 8.5 8.2 108.3
(*) IGPM - General Price Index - Market
(**) TJLP - Long-Term Interest Rate
3
1.2- Comments on the Parent Company Results
The net income of the Company for the period was R$ 2,411,580 (R$ 1,205,898 in
the first semester and R$ 1,205,682 in the third quarter) a 50.7% increase over
the R$ 1,600,329 reported for the same period of 2000, raising the earnings per
share to R$ 6.28 in 2001 from R$ 4.16 in 2000.
1.2.1- Operating Revenues
Operating revenues increased 27.7% (from R$ 3,765,045 in 2000 to R$ 4,806,738
in 2001). The increase in revenues reflects the strengthening of the U.S.
dollar against the real as well as a growth in iron ore and pellets sales
volume, offset in part by a decrease in the volumes of other products and
services. Increase in iron ore sales is due to SOCOIMEX incorporation and the
leasing of mines owned by SAMITRI (06/01). The operations mentioned above
though do not mean decrease in total revenues, caused change with railroad and
port services revenues, and these were basically substituted by the
commercialization of iron ore. The reduction in manganese sales volumes is
compensated by an increase in the sales of SIBRA (a subsidiary) due to capital
contribution in 12/31/00 of the Azul manganese mine.
The table below shows sales volume and revenues by products and services:
In thousands of metric tons (except gold) In thousands of reais
---------------------------------------- -------------------------------
09/30/01 09/30/00 (DELTA)% 09/30/01 09/30/00 (DELTA)%
------------- -------------- ---------- -------------- --------------- -----------
External market
Iron ore 56,320 49,251 14.4 1,937,397 1,351,405 43.4
Pellets 9,565 9,637 (0.7) 641,888 501,173 28.1
------------- -------------- -------------- ---------------
65,885 58,888 11.9 2,579,285 1,852,578 39.2
------------- -------------- -------------- ---------------
Internal market
Iron ore 28,260 25,702 10.0 810,200 631,467 28.3
Pellets 1,988 1,521 30.7 199,371 128,636 55.0
------------- -------------- -------------- ---------------
30,248 27,223 11.1 1,009,571 760,103 32.8
------------- -------------- -------------- ---------------
Total
Iron ore 84,580 74,953 12.8 2,747,597 1,982,872 38.6
Pellets 11,553 11,158 3.5 841,259 629,809 33.6
------------- -------------- -------------- ---------------
96,133 86,111 11.6 3,588,856 2,612,681 37.4
============= ============== -------------- ---------------
Railroad transportation 46,731 49,899 (6.3) 624,719 572,810 9.1
Port services 25,154 30,593 (17.8) 171,714 149,939 14.5
Gold (kg)
External market 11,425 12,505 (8.6) 232,470 203,646 14.2
Internal market - 17 - - 290 -
------------- -------------- -------------- ---------------
11,425 12,522 (8.8) 232,470 203,936 14.0
============= ============== -------------- ---------------
Manganese
External market 77 712 (89.2) 6,681 58,203 (88.5)
Internal market 133 266 (50.0) 15,126 33,602 (55.0)
------------- -------------- -------------- ---------------
210 978 (78.5) 21,807 91,805 (76.2)
============= ============== -------------- ---------------
Potash 408 434 (6.0) 132,464 118,295 12.0
Other products and services - - - 34,708 15,579 122.8
-------------- ---------------
4,806,738 3,765,045 27.7
============== ===============
4
09/30/02
PER PRODUCT
Gold 5
Railroad and port services 16%
Pellets 18%
Iron ore 57%
PER MARKET
US$
R$ 1,315 ]
US$ 577 ]
] IM 41%
R$ ]
R$ 673 ]
US$ 296 ]
PER CURRENCIES(*)
R$ 14%
US$ 86%
R$ 4,806,738
(*) Part of our sales to the internal market are related to U.S. dollar.
1.2.2- Cost of Products and Services
Increase of 29.8% in cost of products and services (from R$ 1,827,167 in 2000
to R$ 2,370,915 in 2001) resulting from the incorporation of SOCOIMEX mines,
leasing of SAMITRI mines (may/01), revision of depreciation rates (note 6.3
(g)), as well as expenses with reform of equipments, trucks and locomotives are
monthly provisioned, getting its impact along the period they are done.
Besides, increase in fuel oil prices and consumption, the devaluation of the
real against the U.S. dollar and increased purchase of pellets for resale also
contributed for the increase.
By Category
09/30/01 09/30/00 (DELTA)%
--------- --------- --------
Personnel 328,526 302,734 8.5
Material 286,968 282,622 1.5
Oil and gas 233,410 185,453 25.9
Outsourced services 318,110 232,309 36.9
Others 230,573 178,320 29.3
--------- ---------
Sub total 1,397,587 1,181,438 18.3
Acquisition of iron ore and pellets 627,296 442,862 41.6
Depreciation and depletion 346,032 202,867 70.6
--------- ---------
Total 2,370,915 1,827,167 29.8
========= =========
1.2.3- Result of Investments Participations
Through 09/30/01 equity earnings represented approximately -2.5% of net income
(38.5% in 09/30/00), decreasing from a gain of R$ 615,619 in 09/30/00 to (R$
59,875) in 09/30/01. This variation was basically due to a combination of the
following factors:
o Recognition of equity income of R$ 107,522 on the unwinding of the cross
participation between CVRD and CSN.
o The positive effects of the 36.6% devaluation of the real against the
U.S. dollar in 2001 (as compared to 3.1% in the same period of 2000) in
the companies operating abroad, offset by the negative effects in the
companies in Brazil with debt denominated in U.S. dollars as well as
reduction in prices and quantities sold for aluminum and steel products.
o Since this quarter recognition of provison for losses and integral
amortization of the goodwill of investments with unsecured liability.
5
Business Area 09/30/01 09/30/00
----------------------------------- -------- --------
Ferrous
. Iron ore and pellets 245,319 233,091
. Manganese and ferro-alloys (5,986) 6,917
Non-ferrous (186,769) (6,294)
Logistics (303,287) (40,032)
Investments
. Steel 229,299 124,447
. Pulp and paper 24,274 14,339
. Aluminum (68,698) 277,510
. Fertilizers 5,969 5,641
Energy 4 -
-------- -------
(59,875) 615,619
======== =======
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. Accordingly, the individual results are segregated by activity, and any
offsetting effects between companies have been disregarded.
Ferrous
(a) Iron ore and pellets
o ITABRASCO - Improvement in the equity result of R$ 8,653 due to the
increase in the average sales price of 2.4% (US$ 31.64 per ton in 2001
as compared to US$ 30.91per ton in 2000), and the increase of the
positive effects resulting from exchange variation on assets, offset in
part by the 23.3% decrease in sales volume (2,096 thousand tons in 2001
as compared to 2,734 thousand tons in 2000).
o ITACO - Improvement in the equity result of R$ 58,041 due to the equity
result of CVRD Overseas of R$ 86,320 (the company was constituted in
October 2000 as part of the receivables securitization process) and R$
10,642 of equity result in Gulf, partially offset by goodwill
amortization in the value of R$ 60,061. In operational an 1.4% increase
in the iron ore sales volume (40,317 thousand tons in 2001 as compared
to 39,772 thousand tons in 2000).
o KOBRASCO - Reduction in the equity result of R$ 49,307, due to an
increase in the negative effects of the exchange rate variation on the
company's debt and provision for value-added tax of R$ 26,000, partially
offset by the 5.5% increase in the average sale price (US$ 31.32 per ton
in 2001 against US$ 29.68 per ton in 2000).
o NIBRASCO - Reduction in the equity result of R$ 22,087, due to a
provision for value-added tax of R$ 21,000 and a 9.3% decrease of
quantities sold (5,622 thousand tons in 2001 against 6,199 thousand tons
in 2000), partially offset by the 10.3% increase in average sale price
(US$ 30.25 in 2001 compared to US$ 29,92 in 2000).
o RDE - Improvement in the equity result of R$ 148,471 basically due to
the devaluation of the real against the U.S. dollar (a positive exchange
rate variation of R$ 229,129 in 2001 as compared to a positive variation
of R$ 14,260 in 2000).
o SAMITRI - Reduction in the equity result of R$ 16,568 due to an increase
in the negative effects of the exchange rate variation on the SAMARCO's
debt.
o ZAGAIA - In 2001 the negative equity result of this subsidiary was R$
96,957 due to the effects of exchange rate variation on the company's
U.S. dollar denominated debt, offset in part by R$ 9,933 of positive
equity result in Ferteco.
(b) Manganese and ferro-alloys
o RDME - Improvement in the equity result of R$ 22,441, basically due to
the devaluation of the real against the French Franc in 2001.
o SIBRA - Investment resulting from the merger of VUPSA and FLN. A
positive equity result of R$ 19,558 was recorded in 2001, partially
offset by a goodwill amortization of R$ 59,589.
6
Non-ferrous
o PARA PIGMENTOS - A R$ 103,725 provision for loss was registered due to
the negative effects of the exchange rate variation on debt and R$
83,150 goodwill amortization in 2001 compared to R$ 6,027 in 2000.
Logistics
o DOCENAVE - Improvement in the equity result of R$ 6,889 due to the
devaluation of the real against the U.S. dollar in 2001 (positive
exchange variation of R$ 132,169 in 2001 compared to R$ 7,964 in 2000).
In operational terms the average freight rate was stable (US$ 7.28 per
ton in 2001 as compared to US$ 7.25 per ton in 2000). Volume transported
reduced by 14.3% (21,967 tons in 2001 against 25,635 tons in 2000),
docking costs increased to R$ 12.2 million in 2001 against R$ 2.7
million in 2000 and provisions were made of R$ 94.8 million for expected
losses on ship sales and R$ 25.2 million for tax credits unlikely to be
recovered.
o FCA - A R$ 107,965 provision for loss was registered due to the negative
effects of the exchange rate variation on debt and R$ 138,559 goodwill
amortization in 2001. We participate in this investment through our
subsidiary Tacuma.
o MRS - This investment is held through the subsidiary Ferteco Mineracao
S. A., which was acquired in April 2001, and represents a negative
equity result of R$ 13,000 in 2001.
Investments
(a) Steel
o CSI - Improvement in the equity result of R$ 77,625 due to the
devaluation of the real against the U.S. dollar (a positive exchange
variation of R$ 132,019 in 2001 against a positive variation of R$ 9,154
in 2000). In operational terms average sales prices of slabs were 14%
lower compared to the same period of 2000 and sales volume was stable
(1,378 thousand tons in 2001 and 2000).
o CSN - An equity result of R$ 107,522 was recorded in 2001 due to the
effects of unwinding CVRD/CSN interests completed on 03/15/01. In 2000,
equity result was R$ 26,256 recorded via DOCEPAR and R$ 7,705 in CVRD.
o CST - Reduction in the equity result of R$ 49,979 mainly due to the
effect of exchange rate variation on the company's debt.
o USIMINAS - Reduction in the equity result of R$ 19,745 mainly due to the
effect of exchange rate variation on the company's debt.
(b) Aluminum
o ALBRAS - Reduction in the equity result of R$ 205,794 due to an increase
in the negative effects of the exchange rate variation on the company's
debt. In operational terms, the average sales price decreased 3.2% (US$
1,468.08 per ton in 2001 compared to US$ 1,516.41 per ton in 2000). The
volume of sales decreased 5.1% (262 thousand tons in 2001 against 276
thousand tons in 2000).
o ALUNORTE - Reduction in the equity result of R$ 110,252 due to an
increase in the negative effects of exchange rate variation on the
company's debt. Operationally, the average sales price decreased by 1.9%
(US$ 192.04 per ton in 2001 as compared to US$ 195.84 per ton in 2000)
and the sales volume remained stable (1,180 thousand tons in 2001
against 1,177 thousand tons in 2000).
o MRN - Reduction in the equity result of R$ 687 due to a 7.6% decrease in
volume sold (7,777 thousand tons in 2001 against 8,416 thousand tons in
2000), an increase in cost of products sold of approximately 13% and a
R$ 23,698 loss resulting from the shareholders' participation in
ALUNORTE, partially offset by the positive effects of the exchange rate
variation on sales..
o VALESUL - Improvement in the equity results of R$ 4,512 due to the
positive effects of the exchange rate variation on sales, partially
offset by an 1.2% decrease in the average sales price (US$ 1,916.59 per
ton in 2001 against US$ 1,940.44 per ton in 2000) and by an increase in
costs of approximately 17%.
o ALUVALE - Reduction in the equity result (own operations) of R$ 24,047
mainly due to the recognition in 2000 of a R$ 24,593 gain in
participation in January 2000 relating to the premium on the capital
increase of Hydro in ALUNORTE.
o ITACO - Reduction in the equity result of R$ 9,940 due to R$ 4,666 of
negative equity result in ALUVALE, decreases in the volume of alumina,
aluminum and bauxite sold of 37.8%, 9% and 20.4%, respectively, and
decreases in average sales price of aluminum 3.4% and alumina 13.5%,
offset in part by an increase in the average sales price of bauxite of
3.4%.
1.2.4- Operating Income (Expenses)
Net operating expenses increased R$ 1,193,524 (R$ 958,906 of net expense in
2000 against R$ 2,152,430 in 2001), mainly due to the negative effect of R$
1,104,645 relating to exchange rate variation on the Company's debt (Note
6.19).
7
1.2.5- Discontinued Operations
In 2001 the result mainly reflects gains on sale of the Company's interests in
Bahia Sul and CENIBRA, of R$ 230,384 and R$ 1,471,544, respectively, as well as
the equity from these companies (note 6.23).
1.2.6- Cash Flow
The opeating cash generation measured by EBITDA is as follows:
Ferrous Non-ferrous Logistics Corporate Center TOTAL
----------- ------------- ------------- ---------------- ------------
Net operating revenues 3,994,138 366,239 446,361 - 4,806,738
Cost of products and services (1,962,368) (227,372) (181,175) - (2,370,915)
Depreciation, amortization and depletion 294,113 50,910 18,587 9,402 373,012
Value-added taxes (117,402) (12,031) (38,055) - (167,488)
Selling expenses (85,505) - - - (85,505)
Administrative expenses - - - (214,792) (214,792)
Research and development (12,614) (58,631) (104) - (71,349)
Dividends received 51,549 - - 199,969 251,518
Other operating expenses - - - (71,689) (71,689)
----------- ------------- ------------- ---------------- ------------
EBITDA 2,161,911 119,115 245,614 (77,110) 2,449,530
% 88% 5% 10% (3%) 100%
1.2.7- Income Tax and Social Contribution
Income tax and social contribution was a credit of R$ 585,034 (expense of R$
7,236 in 2000), after recognizing the benefit from paying interest on
stockholders' equity of R$ 603,002 in 2001 (R$ 267,536 in 2000) (note 6.8).
8
Part II
Quarterly Information and Notes to the Quarterly Information
(A free translation of the original in Portuguese relating to the quarterly information
prepared in accordance with the requirements of brazilian Corporate Law)
2- Balance Sheet In thousands of reais In thousands of reais
---------------------------------------------------------------------------------------------------
Notes 09/30/01 06/30/01
Assets
Current assets
Cash and cash equivalents 6.4 1,373,305 1,481,818
Accounts receivable from customers 6.5 961,063 796,635
Related parties 6.6 1,191,870 1,917,677
Inventories 6.7 462,920 426,450
Deferred income tax and social contribution 6.8 1,056,020 561,992
Others - 236,184 263,862
---------- ----------
5,281,362 5,448,434
---------- ----------
Long-term receivables
Related parties 6.6 1,471,854 1,770,057
Loans and financing - 314,748 157,280
Deferred income tax and social contribution 6.8 130,056 125,237
Judicial deposits 6.13 360,956 418,882
Others - 38,645 39,782
---------- ----------
2,316,259 2,511,238
---------- ----------
Permanent assets
Investments 6.9 8,727,677 6,676,052
Property, plant and equipment 6.10 7,258,326 6,915,187
15,986,003 13,591,239
---------- ----------
23,583,624 21,550,911
---------- ----------
Liabilities and stockholders' equity
Current liabilities
Short-term debt 6.11 1,335,269 1,815,474
Current portion of long-term debt 6.11 401,889 456,467
Payable to suppliers and contractors - 573,175 479,856
Related parties 6.6 707,714 590,622
Provision for interest on stockholders' equity - 1,773,475 602,949
Payroll and related charges - 115,924 91,273
Others - 166,435 185,458
5,073,881 4,222,099
Long-term liabilities
Long-term debt 6.11 3,571,105 3,157,426
Related parties 6.6 1,899,730 1,605,880
Deferred income tax and social contribution 6.8 81,967 84,494
Provisions for contingencies 6.13 840,065 776,990
Labor provision 6.14 382,471 370,883
Others 6.15 560,926 158,112
---------- ----------
7,336,264 6,153,785
---------- ----------
Stockholders' equity
Restated paid-up capital 6.17 4,000,000 4,000,000
Capital reserves - 443,822 443,822
Revenue reserves - 6,729,657 6,731,205
11,173,479 11,175,027
---------- ----------
23,583,624 21,550,911
========== ==========
9
A free translation of the original in Portuguese relating to the quarterly information prepared
in accordance with the requirements of Brazilian Corporate Law)
3- Statement of Income In thousands of reais
------------------------------------------------------------------------------------------------------------------------------
from 07/01/01 From 01/01/01 From 07/01/00 From 01/01/00
Notes to 09/30/01 to 09/30/01 to 09/30/00 to 09/30/00
Operating revenues
Sales of ore and metals
Iron ore and pellets 1,423,677 3,588,856 902,414 2,612,681
Gold 102,643 232,470 68,913 203,936
Others 45,685 154,271 83,802 210,100
------------ ----------- ----------- -----------
1,572,005 3,975,597 1,055,129 3,026,717
Railroad and port services 255,790 796,433 254,032 722,749
Others 9,829 34,708 5,596 15,579
------------ ----------- ----------- -----------
1,837,624 4,806,738 1,314,757 3,765,045
Value-added taxes (59,766) (167,488) (51,266) (132,819)
------------ ----------- ----------- -----------
Net operating revenues 1,777,858 4,639,250 1,263,491 3,632,226
------------ ----------- ----------- -----------
Cost of products and services
Ore and metals ( 757,732) (2,045,102) (560,997) (1,581,500)
Railroad and port services (97,956) (298,561) (79,533) (236,487)
Others (8,350) (27,252) (3,048) (9,180)
------------ ----------- ----------- -----------
(864,038) (2,370,915) (643,578) (1,827,167)
------------ ----------- ----------- -----------
Gross profit 913,820 2,268,335 619,913 1,805,059
------------ ----------- ----------- -----------
Gross margin 51.4% 48.9% 49.1% 49.7%
Result of investment participations 6.9/6.23
Gain on investments accounted for by the equity method (302,105) 557,630 242,711 631,457
Amortization of goodwill (99,606) (269,793) (5,289) (15,838)
Provision for losses (151,016) (347,712) -- --
------------ ----------- ----------- -----------
(552,727) (59,875) 237,422 615,619
------------ ----------- ----------- -----------
Operating income (expenses)
Selling (32,661) (85,505) (22,653) (48,572)
Administrative (88,998) (214,792) (62,101) (156,443)
Research and development (30,280) (71,349) (25,963) (59,456)
Other operating expenses, net (295,612) (462,751) (190,555) (481,047)
------------ ----------- ----------- -----------
(447,551) (834,397) (301,272) (745,518)
------------ ----------- ----------- -----------
Financial result, net 6.19 (655,184) (1,318,033) (132,342) (213,388)
(1,102,735) (2,152,430) (433,614) (958,906)
------------ ----------- ----------- -----------
Operating profit (741,642) 56,030 423,721 1,461,772
Discontinued operations 6.23 1,471,544 1,770,516 54,520 145,793
------------ ----------- ----------- -----------
Income before income tax and social contribution 729,902 1,826,546 478,241 1,607,565
Income tax and social contribution 6.8 475,780 585,034 21,220 (7,236)
------------ ----------- ----------- -----------
Net income for the period 1,205,682 2,411,580 499,461 1,600,329
============ =========== =========== ===========
Number of shares outstanding at the end of the period
(in thousands) 384,309 384,309 384,900 384,900
============ =========== =========== ===========
Net earnings per share outstanding at the end of the period (R$) 3.15 6.28 1.30 4.16
============ =========== =========== ===========
The additional information, notes and attachment I are an integral part of these statements.
10
A free translation of the original in Portuguese relating to the quarterly information prepared
in accordance with the requirements of Brazilian Corporate Law)
4- Statement of Changes in Stockholders' Equity In thousands of reais
------------------------------------------------------------------------------------------------------------------------------
Capital Capital Revaluation Revenue Retained Total
reserves reserves reserves earnings
At December 31, 1999 3,000,000 472,157 743,756 6,286,089 - 10,502,002
--------- ------- --------- --------- ----------- ----------
Reversal of revaluation reserves
of subsidiaries and affiliated
companies - - (471,204) - - (471,204)
Transfer to special monetary
restatement Law 8,200 - 272,552 (272,552) - - -
-------- --------
Tax incentives - (3,820) - - - (3,820)
Sales of shares - (2) - - - (2)
Provision for pension plan
liabilities (see note 6.16) - - - - (312,079) (312,079)
Treasury shares - - - (273) - (273)
Net income for the year - - - - 2,132,658 2,132,658
Interest on stockholders' equity - - - - (1,281,692) (1,281,692)
Appropriation to revenue reserves - - - 538,887 (538,887) -
--------- ------- --------- --------- ----------- ----------
At December 31, 2000 3,000,000 740,887 - 6,824,703 - 10,565,590
--------- ------- --------- --------- ----------- ----------
Treasury shares (see note 6.9 (k)) - - - 2,924 - 2,924
Capitalization of reserves
(see note 6.17) 1,000,000 (300,629) - (699,371) - -
Result on exchange of shares - 3,564 - - - 3,564
Net income for the period - - - - 1,205,898 1,205,898
Proposed Interest on stockholders'
equity - - - - (602,949) (602,949)
--------- ------- --------- --------- ----------- ----------
At June 30, 2001 4,000,000 443,822 - 6,128,256 602,949 11,175,027
--------- ------- --------- --------- ----------- ----------
Treasury shares (see note 6.18) - - - (36,704) - (36,704)
Loss on exchange of shares - - - - - 0
Net income for the period - - - - 1,205,682 1,205,682
Proposed Interest on stockholders'
equity - - - - (1,170,526) (1,170,526)
--------- ------- --------- --------- ----------- ----------
At September 30, 2001 4,000,000 443,822 - 6,091,552 638,105 11,173,479
========= ======= ========= ========= =========== ==========
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 quarterly information prepared
in accordance with the requirements of Brazilian Corporate Law)
5- Statement of Cash Flows (Additional Information) In thousands of reais
09/30/01 09/30/00
---------- --------
Cash flows from operating activities:
Net income for the period 2,411,580 1,600,329
Adjustments to reconcile net income for the period with cash provided by operating
activities: 373,012 214,876
Depreciation, amortization and depletion 59,875 (615,619)
Result of investment participations (1,770,516) (145,793)
Discontinued operations 251,518 117,189
Dividends/interest on stockholders' equity received (585,034) 7,236
Deferred income tax and social contribution 166,336 239,927
Provision for contingencies 1,512,246 135,789
Net monetary and exchange rate variations on assets and liabilities 218,514 (38,140)
---------- ---------
Others 2,637,531 1,515,794
---------- ---------
Reduction (increase) in assets: 373,935 (308,963)
Accounts receivable (136,404) (28,594)
Inventories (29,983) (85,571)
---------- ---------
Others 207,548 (423,128)
---------- ---------
Increase in liabilities: 148,091 94,500
Suppliers and contractors 27,064 44,894
Payroll and related charges and others 136,891 116,789
---------- ---------
Others 312,046 256,183
---------- ---------
Net cash provided by operating activities 3,157,125 1,348,849
---------- ---------
Cash flows from investing activities:
Loans and advances receivable:
Related parties (1,316,869) (67,271)
Others 12,363 12,195
Guarantees and deposits (57,119) (142,207)
Additions to investments (1,432,923) (1,424,217)
Additions to property, plant and equipment (954,640) (341,367)
Proceeds from disposal of property, plant and equipment and investments 988,142 2,228
---------- ---------
Net cash used in investing activities (2,761,046) (1,960,639)
---------- ---------
Cash flows from financing activities:
Short-term debt:
Related parties 354,497 (23,875)
Financial institutions 309,199 (113,908)
Long-term debt:
Related parties 154,791 254,890
Financial institutions 243,017 525,036
Repayments:
Financial institutions (340,484) (427,841)
Interest on stockholders' equity paid (1,279,337) (451,645)
Treasury shares (33,642) -
---------- ---------
Net cash used in financing activities (591,959) (237,343)
---------- ---------
Decrease in cash and cash equivalents (195,880) (849,133)
Cash and cash equivalents, beginning of the period 1,569,185 1,909,002
---------- ---------
Cash and cash equivalents, end of the period 1,373,305 1,059,869
---------- ---------
Cash paid during the period for:
Short-term interest (47,903) (61,129)
Long-term interest net of capitalization (235,705) (196,207)
Income tax and social contribution paid (81,731) -
Non-cash transactions:
Conversion of loans and others into investments - 189,627
Swap with CVRD's treasury stock 3,426 -
Additions to property, plant and equipment with capitalizations 127,895 -
Pension obligation settled by transfer of CSN shares 520,589 -
12
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, manganese and potash, as well as port and railroad transportation
services. In addition, through its direct and indirect subsidiaries and jointly
controlled companies, CVRD operates in coastal shipping, logistics, geological
studies and technological research services, steel, aluminum, energy and
e-business.
6.2- Presentation of Quarterly Information
The financial statements 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 the IBRACON - Instituto dos Auditores Independentes
do Brasil (Institute of Independent Accountants of Brazil).
In order to provide better information to the market, the Company is presenting
as additional information the Statements of Cash Flows as shown on page 12.
Certain amounts and classifications in the 2000 financial statements have been
adjusted to the criteria used in 2001 for better comparability (Note 6.23).
Other values with no relevant effect were also reclassified on the financial
statements for the same purpose.
6.3- Significant Accounting Policies
(a) The accrual basis of accounting is adopted by the Company;
(b) Assets and liabilities that are realizable or due more than twelve months
after the quarterly information date are classified as long-term;
(c) Marketable securities are classified as cash and cash equivalents and
stated at cost plus accrued income earned through the quarterly
information 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 net
realizable value;
(e) Assets and liabilities in foreign currencies are translated at exchange
rates in effect at the quarterly information date, and those in local
currency are restated based on contractual indices;
(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; and
(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 computed by the
unit-of-production method. Since 2001 the Company, based on technical
studies, concluded for the revision of useful lives (depreciation rates)
of certain equipments/installations. The effects of such revision are
reflected in inventories and, mainly, in the results of 2001, which were
reduced by R$ 92 million.
6.4- Cash and Cash Equivalents
09/30/01 06/30/01
Marketable securities (*) 1,070,993 1,309,404
Fixed-yield bond investments (funds) 185,630 80,213
Government securities (NBC-E, NTN-D, LFT ) 115,160 89,829
Others 1,522 2,372
--------- ---------
1,373,305 1,481,818
========= =========
(*) For part of these investments the Company contracted swap operations with
financial institutions, mainly related to interest rate and/or currency
variations.
13
6.5- Accounts Receivable from Customers
09/30/01 06/30/01
Domestic 341,196 340,768
Export 658,339 491,588
------- -------
999,535 832,356
Allowance for doubtful accounts (22,462) (22,432)
Allowance for ore weight credits (16,010) (13,289)
------- -------
961,063 796,635
======= =======
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
--------------------- ---------------------
09/30/01 06/30/01 09/30/01 06/30/01
-------- -------- -------- --------
ALUNORTE - Alumina do Norte do Brasil S.A. 840,878 761,902 115,089 135,414
Celulose Nipo-Brasileira S.A. - CENIBRA - 235,460 - -
Companhia Coreano-Brasileira de Pelotizacao - KOBRASCO 96,310 73,603 56,739 29,414
Companhia Hispano-Brasileira de Pelotizacao - HISPANOBRAS 45,149 38,364 55,818 46,487
Companhia Italo-Brasileira de Pelotizacao - ITABRASCO 46,571 33,100 61,619 40,211
Companhia Nipo-Brasileira de Pelotizacao - NIBRASCO 64,977 68,278 30,513 75,188
CVRD Overseas Ltd. 76,708 474 958,883 707,338
DOCEPAR S.A. 62,922 59,800 117 113
Ferrovia Centro-Atlantica S.A. 141,255 136,778 - 662
S. A. Mineracao da T rindade - SAMIT RI 48,527 38,878 67,490 58,104
Itabira Rio Doce Company Limited - ITACO 407,933 362,696 104,524 59,847
Mineracao Tacuma Ltda. 114,912 74,993 - -
Rio Doce International Finance Ltd. 931,317 833,386 1,109,695 924,043
Salobo Metais S.A. 160,621 155,164 - -
Sibra Eletrosiderurgica Brasileira S.A. 45,237 45,168 20,805 10,358
Vale do Rio Doce Aluminio S.A. - ALUVALE 380 340 133,752 100,629
Vale do Rio Doce Navegacao S.A. - DOCENAVE 980 379 48,907 46,571
Zagaia Participacoes S/A (note 6.9 (o)) - 1,018,688 - -
Others 321,485 349,386 168,560 218,583
--------- --------- --------- ---------
3,406,162 4,286,837 2,932,511 2,452,962
========= ========= ========= =========
Represented by:
Commercial balances (sales and purchases of products and services) (* ) 742,438 599,103 325,067 256,460
Short-term financial balances 1,191,870 1,917,677 707,714 590,622
Long-term financial balances 1,471,854 1,770,057 1,899,730 1,605,880
--------- --------- --------- ---------
3,406,162 4,286,837 2,932,511 2,452,962
--------- --------- --------- ---------
(*) Included in "Accounts receivable from customers" and "Payable to suppliers and contractors."
6.7- Inventories
09/30/01 06/30/01
-------- --------
Finished products 215,334 201,567
. Iron ore and pellets 3,997 5,127
. Manganese 14,697 17,160
. Gold 5,100 3,654
------- -------
. Others 239,128 227,508
Spare parts and maintenance supplies 223,792 198,942
------- -------
462,920 426,450
======= =======
14
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
09/30/01 06/30/01 09/30/01 06/30/01
-------- -------- -------- --------
Fiscal result 603,002 205,003 - -
. Interest on stockholders's equity 258,622 258,622 - -
. Fiscal loss - 2000 (305,214) (236,204) - -
--------- ------- ------ ------
. Fiscal result - 2001 556,410 227,421 - -
Temporary differences:
. Labor provision 151,228 147,338 - -
. Contingent liabilities 268,422 216,846 - -
. Provision for losses on assets 77,122 19,573 - -
. Provision for losses on derivative financial instruments 33,660 - - -
. Others 33,344 35,753 - -
--------- ------- ------ ------
563,776 419,510 - -
Inflationary profit - - - -
Capital reserve - special monetary restatement - Law 8,200 - - 13,496 10,021
Long-term sales - - 23,783 29,451
--------- ------- ------ ------
1,120,186 646,931 44,688 45,022
Recoverable withholding tax 65,890 40,298 81,967 84,494
--------- ------- ------ ------
Total 1,186,076 687,229 - -
========= ======= ====== ======
Short-term 1,056,020 561,992 81,967 84,494
Long-term 130,056 125,237 - -
--------- ------- ------ ------
1,186,076 687,229 81,967 84,494
========= ======= ====== ======
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). It has
already obtained an injunction for compensation of credits corresponding to
42.72% instead of the 51.83% requested. The amount of these credits covered by
the injunction total approximately R$ 444,000, and the accounting effects have
not yet been recognized in the financial statements.
The amounts reported as income tax and social contribution which affected
income for the period are as follows:
09/30/01 09/30/00
-------- --------
Income before income tax and social contribution 1,826,546 1,607,565
(Less) Equity in results of subsidiaries and affiliated companies (261,256) (631,457)
(Less) Result from discontinued operations, except for gain on sale of Bahia Sul (1,540,132) (145,793)
---------- --------
Income tax and social contrbution at combined tax rates 25,158 830,315
Federal income tax and social contribution at statutory rates 34% 34%
---------- --------
Adjustments to net income which modify the effect on the result for the period: (8,554) (282,307)
. Income tax benefit from interest on stockholders' equity 603,002 267,536
. Fiscal incentives SUDAM/SUDENE 58,573 -
. Others (67,987) 7,535
---------- --------
Income tax and social contribution 585,034 (7,236)
========== ========
15
6.9- Investments
Adjusted
Net
Adjusted income
Partic- Stock- (loss) Investments Equity Investments
ipation holders' for the ------------------ -------------------
% equity period) 09/30/01 06/30/01 09/30/01 09/30/00
------ ------- ------- -------- -------- -------- --------
Subsidiaries
Vale do Rio Doce Aluminio S.A.
- ALUVALE (c, f, j) 94.74 627,385 (88,709) 594,385 715,009 (84,043) 252,225
DOCEPAR S.A. (c, g) 100.00 (34,008) (2,010) - - - 20,908
Navegacao Vale do Rio Doce S.A.
- DOCENAVE (c) 100.00 380,095 (14,604) 380,095 459,057 (14,604) (21,493)
Florestas Rio Doce S.A. (c) 99.85 89,614 8,334 89,480 138,248 8,322 4,600
Itabira Internacional Servicos
e Comercio Ltd. - ITACO (a, c, h) 99.99 902,119 384,742 902,029 658,680 384,704 178,275
Rio Doce Europa Servicos e
Comercio - RDE (a, c, i, j, m) 99.80 2,275,989 186,569 2,271,438 768,529 246,257 78,657
S.A. Mineracao da Trindade -
SAMITRI (c, d, k) 100.00 521,197 518 1,333,623 1,365,315 518 16,586
SIBRA Eletrosiderurgica Brasileira
S.A. (c, d, e) 98.16 161,011 19,925 480,450 494,066 19,558 -
Zagaia Participacoes S/A (c, o) 100.00 1,168,222 109,957) 1,168,222 - (109,957) -
Belem - Administracoes e
Participacoes Ltda (c, d, n) 99.99 21,012 - 68,229 - - -
Others 209,689 513,634 17,819 847
---------- ---------- -------- --------
7,497,640 5,112,538 468,574 530,605
---------- ---------- -------- --------
Jointly control l ed companies
Celulose Nipo-Brasileira S.A. - CENIBRA (b, c, m) - - - - 297,904 - -
Companhia Siderurgica de Tubarao - CST (b, c, d, e) 22.85 2,801,832 (56,795) 491,522 491,810 (12,978) 37,001
Companhia Siderurgica Nacional - CSN (c, l) - - - - - 107,522 7,705
Companhia Hispano-Brasileira de Pelotizacao
- HISPANOBRAS (b, c) 50.89 85,853 21,545 43,691 39,139 10,964 6,530
Companhia Italo-Brasileira de Pelotizacao
- ITABRASCO (b, c) 50.90 68,571 24,413 34,903 33,165 12,426 3,773
Companhia Coreano-Brasileira de Pelotizacao
- KOBRASCO (b, c) 50.00 (39,435) (90,644) - 16,287 (25,604) 3,985
Companhia Nipo-Brasileira de Pelotizacao
- NIBRASCO (b, c) 51.00 79,058 (17,761) 40,320 57,662 (9,058) 13,029
Minas da Serra Geral S.A. - MSG (b, c) 51.00 56,528 12,413 28,829 29,532 6,331 5,078
Others (b, c) 58,411 58,644 639 1,730
---------- ---------- -------- --------
697,676 1,024,143 90,242 78,831
---------- ---------- -------- --------
Affiliated companies
Ferroban - Ferrovias Bandeirantes S.A. (c) 18.74 77,735 (52,691) 14,568 15,194 (9,874) (6,084)
Fertilizantes Fosfatados S.A. - FOSFERTIL (c, e) 10.96 442,304 54,460 48,477 47,647 5,969 5,641
Usinas Siderurgicas de Minas Gerais S.A.
- USIMINAS (c, d, e) 11.46 3,637,684 23,727 465,591 472,805 2,719 22,464
---------- ---------- -------- --------
528,636 535,646 (1,186) 22,021
---------- ---------- -------- --------
Investments at cost 3,725 3,725 - -
---------- ---------- -------- --------
Total 8,727,677 6,676,052 557,630 631,457
---------- ---------- -------- --------
Provision for losses (19,718) -
Companhia Coreano-Brasileira de Pelotizacao - KOBRASCO (b, c) (32,887) -
Companhia Ferroviaria do Nordeste (c ) (5,498) -
DOCEPAR S.A. (c, g) (107,965) -
Ferrovia Centro-Atlantica S. A . (c ) (103,725) -
Para Pigmentos S. A . (c ) (269,793) -
Amortization of goodwill
Ferrovia Centro-Atlantica S. A . (c ) (138,559) -
Gulf Industrial Investment Co. (a, c, d, h, i) (60,061) -
Para Pigmentos S. A . (c ) (83,150) (6,027)
SIBRA Eletrosiderurgica Brasileira S. A . (c, d, e) (57,989) (3,490)
Others (7,953) (6,321)
(347,712) (15,838)
Result of investments participation (59,875) 615,619
Notes:
(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
changes, 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 the other partners;
(c) Companies with information not reviewed by independent accountants;
16
(d) Goodwill and negative goodwill on investments in subsidiaries, affiliated
and jointly controlled companies are presented together with their
respective investments as follows:
9/30/01 6/30/01
--------- ---------
Goodwill 322,402 341,732
SIBRA - 74,664
Para Pigmentos S.A. (classified in other subsidiaries) 812,426 812,855
SAMITRI 64,363 68,471
SOCOIMEX (merged with CVRD on 08/31/00) 48,712 50,830
USIMINAS 47,219 -
--------- ---------
Belem - Administracao e Participacoes Ltda 1,295,122 1,348,552
========= =========
Negative goodwill (148,697) (148,697)
--------- ---------
CST (148,697) (148,697)
========= =========
(e) Investments in companies that were listed on stock exchanges as of
09/30/01:
Book Value Market Value
---------- ------------
CST 491,522 215,139
FOSFERT IL 48,477 81,716
SIBRA (preferred shares) 239,952 84,047
USIMINAS 465,591 95,500
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:
Adjusted
Partic- Stock- Investments Equity Investments
ipation holders' ------------------ -------------------
% equity 09/30/01 06/30/01 09/30/01 09/30/00
------ ------- -------- -------- -------- --------
ALBRAS - Aluminio Brasileiro S.A. (c) 51.00 2,854 1,456 101,316 (95,917) 109,877
ALUNORTE - Alumina do Norte do Brasil S.A. (c) 46.60 334,924 156,075 199,875 (87,863) 22,389
Mineracao Rio do Norte S.A. (c) 40.00 544,062 217,625 231,035 57,763 58,450
Valesul Aluminio S.A. (c) 54.51 218,145 118,909 112,226 19,725 15,213
Own operations 100,320 70,557 22,249 46,296
------- ------- ------- -------
594,385 715,009 (84,043) 252,225
======= ======= ======= =======
(g) On 12/07/00, CVRD exchanged 1,346,690 shares of ACOMINAS for 810,000,000
preferred shares of Gerdau S.A. (GERDAU), with the intention of selling
these shares on the market at an opportune moment. This investment is
recorded in current assets as others in the amount of R$ 11,016.
On 09/30/01, a provision for losses in DOCEPAR in the amount of R$ 34,008
is recorded in other long-term liabilities.
17
(h) Indirect holdings through Itabira Internacional Servicos e Comercio Ltda:
Investments Equity Investments
--------------------- -----------------------
09/30/01 06/30/01 09/30/01 06/30/01
-------- -------- -------- --------
California Steel Industries, Inc - CSI (a, c) - 259,614 57,911 41,025
CVRD Overseas Ltd. (a, c) - 96,007 25,019 -
Gulf Industrial Investment Co. (a, c, d) - 197,192 2,602 -
Rio Doce Manganese Europe - RDME (a, c) - 78,483 7,564 (1,149)
Siderar Sociedad Anonima Industrial y Comercial (a, c) - 34,570 5,241 820
Vale do Rio Doce Aluminio S.A. - ALUVALE (c) - 39,694 2,029 -
Itabi raRi o Doce Company Limited (a) - (102,523) 35,187 124,639
Other participations (a) - 55,643 5,802 12,940
Own operations (a) 902,029 - 243,349 -
------- ------- ------- -------
902,029 658,680 384,704 178,275
======= ======= ======= =======
On July/01, Itabira Rio Doce Company Limited was sold to Rio Doce
International Finance Ltd, subsidiary of Rio Doce Servicos e Comercio -
RDE.
(i) Indirect holdings through Rio Doce Europa Servicos e Comercio - RDE:
Adjusted
Partic- Stock- Investments Equity Investments
ipation holders' ------------------ -------------------
% equity 09/30/01 06/30/01 09/30/01 09/30/00
------ ------- -------- -------- -------- --------
California Steel Industries, Inc - CSI (a, c) 50.00 590,180 295,090 - 60,739 -
CVRD Overseas Ltd. (a, c) 100.00 153,328 153,328 - 61,301 -
Gulf Industrial Investment Co. (a, c, d) 50.00 348,610 174,305 - 8,040 -
Itabira Rio Doce Company Limited - ITACO (a) 99.99 85,511 1,799,982 - (138,031) -
Rio Doce Manganese Europe - RDME (a, c) 100.00 826,175 85,511 - 13,728 -
Siderar Sociedad Anonima Industrial y Comercial (a, c) 4.85 627,385 40,065 - 5,495 -
Vale do Rio Doce Aluminio S.A. - ALUVALE (c, j) 5.26 33,000 - (6,695) -
Other participations (a) 39,054 - 14,552 78,657
Own operations (a) (348,898) 768,529 227,128 78,657
2,271,437 768,529 246,257 -
Amortization of goodwill - Gulf Industrial Investment Co. - - (60,061) 78,657
2,271,437 768,529 186,196
(j) The consolidated shareholding in Vale do Rio Doce Aluminio S.A. - ALUVALE
is 100.0% (the subsidiary Itabira Rio Doce Company Limited - ITACO owns
5.26% of the capital);
(k) On 01/24/01 CVRD announced its intention to incorporate the shares of S.A.
Mineracao Trindade - SAMITRI . With this operation, the Company is seeking
a gain in efficiency by reducing costs and rationalizing activities. On
02/19/01 an Extraordinary General Meeting approved the incorporation of
the shares. Due to the incorporation of the shares issued by SAMITRI, the
minority stockholders received preferred class A shares issued by CVRD,
which were in treasury, in the proportion of 1 CVRD share to 628 SAMITRI
shares;
On 08/01/01 an Extraordinary General Meeting approved the protocol and
justification for incorporation of Mineracao Trindade S. A. - SAMITRI. On
10/01/01 SAMITRI was merged with CVRD.
(l) On 03/15/01 CVRD terminated its investment in Companhia Siderurgica
Nacional ("CSN") by unwinding the cross participation relationship between
the companies. This transaction created the opportunity to address the
following questions:
(1) The signing of a contract with CSN which guarantees to the Company
certain preemptive rights, for a period of thirty years, as follows:
(a) purchase of any iron ore surplus produced by the Casa de Pedra
mine; (b) the leasing and acquisition of the Casa de Pedra mine; (c)
the development of a pelletizing plant supplied by iron ore produced
by the Casa de Pedra mine, if CSN decides to enter into a joint
venture with third parties. Conversely, CSN has the right of
preference in constructing, in conjunction with the Company, any
greenfield steel making project which the
18
Company decides to set up under its own control over the next five
years;
(2) The transfer to VALIA of its interest in CSN (10.33% of CSN total
capital), (which will not participate in the CSN shareholders'
agreement). These shares were valued at approximately R$ 520 million,
R$ 70.22 per lot of 1000 shares, based on the weighted average price
of the last thirty trading sessions at BOVESPA in the period ended on
03/09/01. This transaction generated a gain for the Company,
eliminates VALIA's actuarial deficit and significantly increases the
Company's borrowing capacity; and
(3) This operation resulted in a gain on investments accounted for by the
equity method of R$ 107,522 and a gain of R$ 10,406 on the sales of
shares to VALIA, which is recorded as "others - result of investments
participations".
(m) On 06/05/01, at a private auction for the sale of 86,562,480 ordinary
shares, 5,694,900 Class A preferred shares and 3,211,189 Class D preferred
shares of Celulose Nipo-Brasileira SA (CENIBRA) equivalent to 51.48% of
the capital, CVRD chose the best price offer presented by the Carthage
Investment Corp., a joint venture constituted by Votorantim Celulose e
Papel SA (VCP) and Aracruz Celulose SA (Aracruz), in the value of US$
670,500.
The conclusion of the purchase and sale operation was subject to certain
precedent conditions among which the most important relates to the
exercise, or not, of the preemptive rights detained by the Japan Brazil
Paper and Pulp Resources Development Co. Ltd. (JBP), a consortium of
Japanese companies which owns 48.52% of the total CENIBRA capital.
On 07/06/01, JBP exercised its preemptive rights to acquire the totality
of CVRD's participation in the CENIBRA capital. Under the same terms and
conditions governing the purchase and sale contract for the shares in
question that would have been celebrated with the Carthage Investment
Corp, the winner of the private auction held by CVRD on 06/05/01. On
09/14/01, CVRD concluded the sale of Celulose Nipo-Brasileira S. A. -
CENIBRA to Japan Brazil Paper and Pulp Resources Development Co., Ltda.,
with exercised its right to purchase 51.48% of the shares held by its
subsidiary Itabira Rio Doce Company Limited - ITACO. Accordingly, JBP
became sole owner of CENIBRA.
(n) On 09/26/01, CVRD acquired 99.99% of the quotas of Belem - Administracoes
e Participacoes Ltda for R$ 68,229, while its wholly owned subsidiary
Docepar S. A. acquired the remaining 0.01%.
Belem is a non-operational limited liability company that has a 9.9%
holding in Empreendimentos Brasileiros de Mineracao S. A. - EBM, which in
turn owns 51% of Mineracoes Brasileiras Reunidas S. A. - MBR, an unlisted
Brazilian company that produces iron ore.
(o) On 09/20/01, CVRD converted into capital the advances made for the future
capital increase in Zagaia in the amount of R$ 1,278,175. Zagaia is a non
operational company with limited liability that holds 100% of the social
capital of Ferteco Mineracao S. A ..
19
6.10- Property, Plant and Equipment
(a) By business area:
09/30/01 06/30/01
---------------------------------------- --------------------------------------
Accumulated Accumulated
Cost depreciation Net Cost depreciation Net
---- ------------ --- ---- ------------ ---
Ferrous - Northern System
Mining 1,496,296 (720,533) 775,763 1,476,719 (704,230) 772,489
Railroads 2,636,849 (954,371) 1,682,478 2,606,688 (927,854) 1,678,834
Ports 508,386 (237,095) 271,291 508,610 (233,739) 274,871
Construction in progress 376,225 - 376,225 269,232 - 269,232
---------- ----------- --------- ---------- ----------- ---------
5,017,756 (1,911,999) 3,105,757 4,861,249 (1,865,823) 2,995,426
---------- ----------- --------- ---------- ----------- ---------
Ferrous - Southern System
Mining 2,089,999 (1,311,517) 778,482 2,081,206 (1,300,747) 780,459
Railroads 3,026,757 (1,821,680) 1,205,077 2,979,604 (1,798,976) 1,180,628
Ports 558,481 (424,971) 133,510 557,116 (421,459) 135,657
Construction in progress 257,984 - 257,984 266,720 - 266,720
---------- ----------- --------- ---------- ----------- ---------
5,933,221 (3,558,168) 2,375,053 5,884,646 (3,521,182) 2,363,464
---------- ----------- --------- ---------- ----------- ---------
Pelletizing 579,063 (433,924) 145,139 582,131 (436,258) 145,873
Construction in progress 347,563 - 347,563 267,738 - 267,738
---------- ----------- --------- ---------- ----------- ---------
926,626 (433,924) 492,702 849,869 (436,258) 413,611
---------- ----------- --------- ---------- ----------- ---------
Energy (*) 350,690 (12,404) 338,286 148,344 (10,767) 137,577
Construction in progress 130,626 - 130,626 114,577 - 114,577
---------- ----------- --------- ---------- ----------- ---------
481,316 (12,404) 468,912 262,921 (10,767) 252,154
Total Ferrous 12,358,919 (5,916,495) 6,442,424 11,858,685 (5,834,030) 6,024,655
---------- ----------- --------- ---------- ----------- ---------
Non-Ferrous
Potash 110,145 (34,498) 75,647 108,718 (31,963) 76,755
Gold 607,485 (408,886) 198,599 606,784 (316,448) 290,336
Research and projects 41,598 (21,790) 19,808 41,157 (21,250) 19,907
Construction in progress 40,520 - 40,520 37,166 - 37,166
---------- ----------- --------- ---------- ----------- ---------
799,748 (465,174) 334,574 793,825 (369,661) 424,164
---------- ----------- --------- ---------- ----------- ---------
Logistics 892,992 (508,884) 384,108 880,167 (502,460) 377,707
Construction in progress 39,644 - 39,644 31,423 - 31,423
---------- ----------- --------- ---------- ----------- ---------
932,636 (508,884) 423,752 911,590 (502,460) 409,130
---------- ----------- --------- ---------- ----------- ---------
Corporate 86,976 (39,784) 47,192 86,278 (37,739) 48,539
Construction in progress 10,384 - 10,384 8,699 - 8,699
---------- ----------- --------- ---------- ----------- ---------
Total 97,360 (39,784) 57,576 94,977 (37,739) 57,238
---------- ----------- --------- ---------- ----------- ---------
14,188,663 (6,930,337) 7,258,326 13,659,077 (6,743,890) 6,915,187
========== ========== ========= ========== ========== =========
(b) By classification of asset:
09/30/01 06/30/01
---------------------------------------- --------------------------------------
Accumulated Accumulated
Cost depreciation Net Cost depreciation Net
---------- ------------ ---------- ---------- ------------ ----------
Land and buildings 1,421,365 (590,200) 831,165 1,427,002 (576,606) 850,396
Installations 4,117,011 (2,502,657) 1,614,354 3,926,266 (2,447,234) 1,479,032
Equipment 816,395 (500,713) 315,682 792,576 (469,459) 323,117
Railroads 5,120,127 (2,657,666) 2,462,461 5,037,137 (2,616,770) 2,420,367
Mineral rights 388,264 (146,034) 242,230 388,264 (141,534) 246,730
Others 1,122,555 (533,067) 589,488 1,092,277 (492,287) 599,990
Construction in progress 12,985,717 6,930,337) 6,055,380 12,663,522 (6,743,890) 5,919,632
Total 1,202,946 - 1,202,946 995,555 - 995,555
14,188,663 6,930,337) 7,258,326 13,659,077 (6,743,890) 6,915,187
(*) The increase in the energy area refers to the recording as a fixed asset of
the investment in the Porto Estrela hydroelectric Station. CVRD has an equal
1/3 interest in this undertaking along with the Companhia Energetica de Minas
Gerais (Cemig) and Coteminas. The project required investments of R$ 101
million, with CVRD's initial share of the power output being destined for the
Tubarao Complex in Espirito Santo State. The plant has been in commercial
operation since September 1, having been inaugurated on 10/09/01.
20
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.
Depreciation, amortization and depletion of property, plant and equipment have
been allocated to cost of production and services and to administrative
expenses as follows:
09/30/01 09/30/00
-------- --------
Cost of production and services 358,710 203,865
Administrative expenses 14,302 11,011
-------- --------
373,012 214,876
-------- --------
6.11- Loans and Financing
Current Liabilities Long-Term Liabilities
------------------------ -----------------------
09/30/01 06/30/01 09/30/01 06/30/01
--------- --------- --------- ---------
FOREIGN OPERATIONS
Short-term debt 272,620 279,587 - -
Long-term debt: 287,525 329,067 2,008,813 1,799,290
Loans and financing maturing up to 2011, in:
U.S. dollars 24,591 20,324 79,635 66,407
Yen 643 519 1,608 1,413
Other currencies - - 1,335,650 1,152,450
Notes in U.S. dollars 44,189 64,657 - -
--------- --------- --------- ---------
Accrued charges 356,948 414,567 3,425,706 3,019,560
--------- --------- --------- ---------
LOCAL OPERATIONS
Short-term debt 1,062,649 1,535,887 - -
--------- --------- --------- ---------
Long-term debt:
Indexed by TJLP, TR(* ) and IGP-M 8,469 10,732 47,173 47,224
Basket of currencies 31,796 27,065 82,141 75,705
Loans in U.S. dollars 2,596 2,397 8,651 7,903
Non-convertible debentures - - 7,434 7,034
Accrued charges 2,080 1,706 - -
--------- --------- --------- ---------
44,941 41,900 145,399 137,866
--------- --------- --------- ---------
1,737,158 2,271,941 3,571,105 3,157,426
========= ========= ========= =========
Notes:
(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$ 2.6713 at 09/30/01 (R$ 2.3049 at 06/30/01) and 1.00 Yen equal to R$
0.022362 at 09/30/01 (R$ 0.018482 at 06/30/01).
(b) Of the total loans and financing, R$ 822,081 are guaranteed by the federal
government (with full counter-guarantees) and R$ 120,559 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
09/30/01:
2002 86,900
2003 1,289,568
2004 1,535,655
2005 onward 658,982
---------
3,571,105
=========
21
(d) Long-term external and domestic loans and financing were subject to annual
interest rates as of 09/30/01 as follows:
Up to 7% 2,389,084
7.1 to 9% 133,794
9.1 to 11% 1,335,650
Over 11% 114,466
---------
3,972,994
=========
(e) Based on borrowing rates currently available to the Company for bank loans
with similar terms and average maturities, the market value of long-term
debt at 09/30/01 approximates fair market value.
(f) The Company's loans and financing, by currencies/index at:
09/30/01 06/30/01
Basket of currencies 2% Basket of currencies 2%
Others 3% Others 3%
Dollar 95% Dollar 95%
R$ 5,308,263 R$ 5,429,367
6.12 - Securitization Program
On 09/29/00 CVRD finalized the financial conditions for a US$ 300 million
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, United States
and Asia, was structured by Bank of America Securities LLC, and is divided in
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 1-/15/2010 3 8.926%
The balance of this operation on 09/30/01 totals R$ 881,316 (R$ 11,926 in
current liabilities and R$ 801,390 in long-term liabilities) and is included in
related party liabilities to the subsidiary CVRD Overseas Ltd. (Note 6.6).
6.13 - Contingent Liabilities
At the quarterly information date 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:
Provisions for
Judicial deposits contingencies
--------------------- --------------------
09/30/01 06/30/01 09/30/01 06/30/01
-------- -------- -------- --------
Tax contingencies 137,180 124,182 250,060 203,230
Labor and civil claims
and others 114,520 117,485 590,005 573,760
Bank deposits (* ) 109,256 177,215 840,065 --
------- ------- ------- -------
Total 360,956 418,882 -- 776,990
======= ======= ======= =======
(*) Refers to bank deposits associated basically with pending civil suits,
classified as "Judicial deposits".
22
(b) Guarantees given to subsidiary and jointly controlled companies (normally
in proportion to the Company's percentage of participation) are as
follows:
09/30/01 06/30/01
--------- ---------
ALBRAS - Aluminio Brasileiro S.A. 993,639 869,057
ALUNORT E - Alumina do Norte do Brasil S.A. 207,365 188,547
Bahia Sul Celulose S.A. (* ) 246,094 107,241
CELMAR S.A. - Industria de Celulose e Papel 111,484 98,713
Companhia Coreano-Brasileira de Pelotizacao - 106,879 46,990
KOBRASCO 287,840 229,460
FCA - Ferrovia Centro-Atlantica S.A. 478,483 498,657
ITACO - Itabira Rio Doce Company Limited 134,628 133,126
Para Pigmentos S.A. 158,918 149,747
Salobo Metais S.A. 103,846 95,188
Seamar Shipping Corporation 61,743 55,007
--------- ---------
Others 2,890,919 2,471,733
========= =========
09/30/01 06/30/01
--------- ---------
The breakdown of guarantees by currency is:
U.S. Dollar 2,304,664 1,959,405
Real 572,209 501,127
French Franc 14,046 11,201
--------- ---------
2,890,919 2,471,733
========= =========
(*) The guarantees given to Bahia Sul were extinguished with the sale of this
investment, except for EUROBONDS in the amount of US$ 92 million, for
which counter-guarantees were received from Suzano.
6.14 - Labor provision
This provision is the result of the Company's responsibility to provide
supplementary pensions relating to the early retirement programs of 1987 and
1989. Part of the amount is recorded in current liabilities as "Others", R$
62,263 (R$ 60,376 at 06/30/01), and part in long-term liabilities, R$ 382,471
(R$ 370,883 at 06/30/01). These liabilities were calculated by an independent
actuary for 09/30/01 and represent the current value of the benefits and
pensions.
6.15 - Others - Long-term liabilities
09/30/01 06/30/01
-------- --------
Derivative Financial instruments (Note 6.20) 102,978 -
Provision for environmental recover 40,000 -
Companhia Energetica de Minas Gerais - Cemig(*) 165,539 -
Provision for loss on DOCEPAR 34,008 28,510
Provision for loss on CFN 32,887 -
Provision for loss on PPSA 32,839 -
152,675 129,602
Others ------- -------
560,926 158,112
======= =======
(*) Long-term part of the debt refers to value "Contract of concession of
public use to exploit hidroeletric benefits and system of associated
transmission" of Porto Estrela hydroeletric station.
6.16 - Pension Plan
Fundacao Vale do Rio Doce de Seguridade Social - VALIA is a non-profit legal
entity established in 1973 for the purpose of supplementing the social security
benefits of the employees of the Company and its subsidiaries and affiliated
companies that participate or will participate in the plan.
On 12/28/99 the Secretariat of Complementary Social Security, through Rule No.
866-SPC/COJ, approved a new Mixed-Benefits Plan. This plan, which was
implemented in the second quarter of 2000, is based on the most modern concepts
of private pension plans; programmed benefits are based on defined
contributions not associated with the government social security benefits, and
those entailing risks have the characteristic of defined benefit. A plan for
deferred benefits upon severance ("vesting") was also introduced, allowing
participants to remain
23
associated without the obligation for future contributions. Another advantage
offered by the new plan is that it allows full repayment of all employee
contributions in case of leaving the plan, along with up to 80% of the
sponsor's contributions, plus gains on investments.
Over 98% of active employees migrated to the new plan, thus requiring an
actuarial appraisal of the new situation, using the group evaluation
methodology of the former Defined Benefit Plan.
This appraisal, conducted by independent actuaries, found a deficit in the
mathematical reserves of the old plan, whose value was assumed by CVRD, as
previously foreseen, up to the limit stated in the Company's privatization
rules (disclosed through a "relevant fact" in the Official Gazette of
04/11/97).
This deficit amounted to R$ 489,531 as of 04/30/00 (the final date for closing
the plan to new entrants), to be amortized over 20 years, subject to monetary
restatement by the IGP-DI index and interest of 6% per annum.
Accordingly, considering that this deficit was formed over many years since
VALIA's inception, CVRD recognized its portion up to 12/31/99 as a liability in
the amount of R$ 472,847 and charged retained earnings with R$ 312,079 (net of
tax effects corresponding to R$ 160,768), recorded as long-term assets under
deferred income tax and social contribution.
On 12/31/00 the balance totaled R$ 520,618, recorded as related party
liabilities with VALIA, R$ 28,551 in current liabilities and R$ 492,067 in
long-term liabilities . On 03/15/01 the Company settled its obligation by
transferring the total of its interest (10.33%) in CSN to VALIA. (Note 6.9 (l))
6.17 - Capital
The Company's capital consists of 388,559,056 shares, of which 249,983,143 are
common shares, 138,575,912 are preferred shares, and one is a special preferred
share ("Golden Share"), all with no par value.
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 iron ore systems, mining,
transportation and shipping and other matters determined in the by-laws.
The Extraordinary General Meeting held on 04/25/01 approved the increase of
capital from R$ 3 billion to R$ 4 billion, without issue of new shares, through
the capitalization of reserves in the amount of R$ 1 billion.
On 09/30/01 the Company's capital is comprised as follows:
Number of shares
-----------------------------------------------------------------
Stockholders Common % Preferred % Total %
---------------------------------------------- ----------- --- ----------------- ------------------
Valepar S.A. 105,443,070 42 - - 105,443,070 27
Foreign Funds 5,079,645 2 37,399,946 27 42,479,591 11
Brazilian Government (Brazilian Treasury/BNDES
/BNDESPar/INSS/FPS) (a) 90,461,112 37 6,764,063 5 97,225,175 25
American Depositary Receipts - ADRs - - 52,388,007 38 52,388,007 13
Litel Participacoes S.A . (b) 25,272,641 10 - - 25,272,641 6
Pension Funds 3,803,550 2 14,755,289 11 18,558,839 5
Clube de Investimentos dos Empregados da
Vale - INVESTVALE 10,409,169 4 190,700 - 10,599,869 3
Public 5,263,986 2 27,077,817 19 32,341,803 9
Treasury stock 4,249,970 1 91 - 4,250,061 1
Total 249,983,143 100 138,575,913 100 388,559,056 10
=========== === =========== === =========== ==
(a) Includes common shares owned by the National Treasury, BNDES and BNDESPAR.
Excludes shares held by Investvale.
(b) 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 us and Valepar.
24
Notes:
As of 09/30/01, the number of holders of record who are residents of Brazil is
23,630. These shareholders own 293,691,458 shares, which represents 75.6% of
our capital stock.
Members of our board of directors, as a whole, hold 19 shares.
6.18 - Treasury Stock
At the Extraordinary Meeting held on 07/18/01, the Board of Directors
authorized the acquisition of up to 21 million nominal bookentry shares, with
no par value, 11 million of common shares and 10 million of preferred shares,
to be held in treasury and later sold or canceled with no reduction of the
social capital. On 09/30/01, 4,249,970 common shares and 91 preferred shares
had been acquired and were held in treasury, in the amount of R$ 107,219.
Average quoted
Class Quantity Unit acquisition cost market price
--------- ---------------------- ------------------------- ------------------
09/30/01 06/30/01 Average Low High 09/30/01 06/30/01
--------- --------- ------- ----- ----- -------- --------
Preferred 91 3,519,288 20.03 14.02 52.40 52.81 52.34
Common 4,249,970 13,270 25.23 20.07 52.09 51.09 50.44
--------- ---------
4,250,061 3,532,558
========= =========
On 07/25/01 the Company exchanged on the Sao Paulo Stock Exchange (BOVESPA),
3,519,285 preferred shares, maintained previously in treasury, for 3,520,000
common shares, an operation with Bank of America Liberal S.A. - Corretora de
Cambio e Valores Mobiliarios as intermediary.
6.19 - Financial Result
The amounts included in the income statement are as follows:
09/30/01 09/30/00
---------- --------
Financial expenses
Foreign debt (192,920) (162,735)
Local debt (64,530) (65,932)
Related parties, net (6,662) 1,682
Others(* ) (140,974) (40,073)
(405,086) (267,058)
(2,071,465) (217,473)
Monetary and exchange rate variation
on liabilities
Financial income
Marketable securities 43,167 98,420
Other 31,556 13,502
---------- --------
74,723 111,922
---------- --------
Monetary and exchange rate variation on assets 1,083,795 159,221
---------- --------
Financial income (expenses), net (1,318,033) (213,388)
========== ========
(*) Includes net losses on derivative financial instruments (note 6.15)
6.20 - Derivative Financial Instruments
Volatility of interest rates, exchange rates and commodity prices are the main
market risks to which we are exposed - all three are managed through derivative
operations. These have the exclusive aim of reducing exposure to risk. We do
not use derivatives for speculation purposes.
25
We monitor and evaluate our derivative positions on a regular basis and adjust
our strategy in response to market conditions. We also periodically review the
credit limits and credit worthiness of our counter-parties in these
transactions. In view of the policies and practices established for operations
with derivatives, management considers the occurrence of non-measurable risk
situations as unlikely.
All derivatives have been adjusted to fair market value at quarterly
information date and the change included in current earnings. For the period
ended 09/30/01 the movement of unrealized gains or losses on derivative
financial instruments is as follows:
Net Gains (Losses)
-------------------------------------------------
Interest rates
Gold (libor) Currencies Total
------ -------------- ---------- --------
Gross (losses) at 09/30/01 15,861 (110,3100 (8,529) (102,978)
====== ========= ====== ========
Final maturity dates December 2005 October 2007 April 2005
(a) Interest Rate and Exchange Rate Risk
Interest rate risks mainly relate to that part of the debt borrowed at
floating rates. The foreign currency debt is largely subject to
fluctuations in the London Interbank Offered Rate - LIBOR. That portion
of local currency denominated debt that is subject to floating rates is
linked to the Long Term Interest Rate - TJLP, fixed quarterly by the
Brazilian Central Bank. Since May 1998, we have used derivative
instruments to protect overselves against fluctuations in the LIBOR
rate.
There is an exchange rate risk associated with our foreign currency
denominated debt. On the other hand, a substantial proportion of our
revenues are denominated in, or automatically indexed to, the U.S.
dollar, while the majority of costs are expressed in reais. This
provides a natural hedge against any devaluation of the Brazilian real
against the U.S. dollar. When events of this nature occur, the immediate
negative impact on foreign currency denominated debt is offset over time
by the positive effect of devaluation on future cash flows.
With the advent of a floating exchange rate regime in Brazil in January
1999, we adopted a strategy of monitoring market fluctuations, using
derivatives to protect against specific risks from exchange rate
variation.
From time to time we enter into foreign exchange derivative swap
transactions seeking to change the characteristics of our
real-denominated cash investments to US dollar-indexed instruments. The
extent of such transactions depends on our perception of market and
currency risk, but is never speculative in nature. All such operations
are marked-to-market at quarterly information date and the effect
included in financial income or expense. During the nine months ended
09/30/01 our use of such instruments was not significant.
(b) Commodity Risk
We also use derivative instruments to manage exposure to changing gold
prices. Derivatives allow the fixing of an average minimum profit level
for future gold production. However, they may also have the effect of
eliminating potential gains on certain price increases in the spot
market for gold. We manage our contract positions actively, and the
results are reviewed at least monthly, allowing adjustments to targets
and strategy to be made in response to changing market conditions.
In the case of gold derivatives, our policy has been to settle all
contracts through cash payments or receipts, without physical delivery
of product.
(c) Fair Value of Financial Instruments
The market values of investments are indicated in Note 6.9 (e).
26
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(*)
-----------------------------------------------------
09/30/01 06/30/00 09/30/01 06/30/10
-----------------------------------------------------
Assets
Current
Cash and banks and Financial
investments 184 792 172 59
Others 2,049 1,757 771 816
-------- -------- -------- --------
2,233 2,549 943 875
Long-term receivables 1,329 1,199 32 33
Investments 3,537 1,810 50 42
-------- -------- -------- --------
Total 7,099 5,558 1,025 950
======== ======== ======== ========
Liabilities
Current
Short-term loans and financing 1,727 2,260 1,306 1,071
Others 530 283 304 364
-------- -------- -------- --------
2,257 2,543 1,610 1,435
Long-term liabilities
Loans and financing 3,518 3,105 2,389 1,682
Others 1,608 1,313 157 531
-------- -------- -------- --------
5,126 4,418 2,546 2,213
-------- -------- -------- --------
Total 7,383 6,961 4,156 3,648
======== ======== ======== ========
Net Assets (Liabilities) - R$ (284) 1,403) (3,131) 2,698)
======== ======== ======== ========
Net Assets (Liabilities) - US$ (106) (609) (1,172) 1,171)
======== ======== ======== ========
(*) Proportional to the percentage of participation
6.22 - 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 09/30/01 the provision for
environmental liabilities amounted to R$ 66,962 (R$ 27,492 on 06/30/01).
27
6.23- Income Statement Reclassifications
To facilitate comparison of the financial statements, we reclassified the
balances from 2000 due to the segregation of the accounting lines for the
result of operations with Cenibra and Bahia Sul, which were discontinued by the
Company after sale of the holdings in these companies, and the creation of the
title "Result of investment participations".
09/30/01 06/30/00
--------- ---------
Equity result
Equity result 2,097,762 777,250
Gain on sale of investments - CENIBRA (1,471,544) -
Equity result - CENIBRA (14,189) (51,266)
Equity result - Bahia Sul (CVRD e Florestas) (54,399) (94,527)
--------- ---------
557,630 631,457
========= =======
Discontinued operations
Gain on sale of investments 1,701,928 -
Equity result - CENIBRA 14,189 51,266
Equity result - Bahia Sul (CVRD e Florestas) 54,399 94,527
--------- ---------
1,770,516 145,793
========= =======
Other operational expenses (revenues) (774,976) (496,885)
Other operational expenses (revenues) 161,415 15,870
Amortization of goodwill 161,828 -
Provision for losses (11,018) (32)
--------- ---------
Others (462,751) (481,047)
========= =======
Amortization of goodwill (347,712) (15,832)
========= =======
Provision for losses (269,793) -
========= =======
On 02/22/01 CVRD signed a contract with Companhia Suzano de Papel e Celulose
(Suzano) for the sale of its total interest in Bahia Sul Celulose S.A.
represented by 682,178,428 common shares and 347,224,408 preferred shares class
A for US$ 317,600 thousand (equivalent to R$ 686,524). On 04/27/01 the
operation was concluded, with agreement of BNDES Participacoes S.A. - BNDESPAR.
The financial settlement in reais equivalent to US$ 317,600 thousand occurred
on 05/07/01. The Company recorded a gain on this sale of R$ 230,384 (R$ 156,890
after income tax and social contribution), included in "discontinued
operations".
6.24- Subsequent Events
Custodian Change
On 10/08/01 the Brazilian Securities Commission approved the change of the
custodian of the Company's ADR program. From 10/15/01 onwards the new custodian
will be Banco Bradesco S. A.. This change will not affect the characteristics
of the ADR program and remained as follows: RDE9600146, ADR Level II program,
Class A Preferred Shares, 01 (one) ADR is equivalent to 1 (one) share, Code
ISIN: BRVALEACNPA3.
Merger of SAMITRI
On 10/01/01 SAMITRI was merged with CVRD, according to the approval of the
Extraordinary General Meeting held on 08/01/01.
Conclusion of Negotiation with Baosteel
On 10/18/01 having fulfilled all terms and conditions established in the
contracts signed on August 21 of this year, with Shanghai Baosteel Group
Corporation (BAOSTEEL), both companies formalized proceedings on 08/21/01, for
implementing a business partnership. This includes the creation and
co-management of a company in Brazil, BAOVALE MINERACAO S. A., as well as a
long-term iron ore supply contract between CVRD and BAOSTEEL. CVRD is expected
to earn a total revenue of US$ 2billion over the next twenty years as a result
of this business deal.
Acquisition of the Sossego Project confirming CVRD copper strategy
28
On 10/24/01 the Sossego Project was acquired by CVRD, which has an estimated
313 million tons of copper ore reserves. The Sossego project is expected to
start copper and gold production by mid-2004, with an annual capacity of
140,000 tons of high-grade copper concentrate and 3 tons of gold.
Share buyback program
On 10/24/01 the Board of Directors authorized a share buyback program,
according to the following conditions: (a) it will be limited to 5,027,429
common shares and 13,692,872 class "A" preferred shares; (b) the Company will
buy the shares at the Sao Paulo Stock Exchange (BOVESPA), respecting limit
prices that may be authorized during the buyback prize, up to the legal high
price allowed; (c) the acquisition of these shares will be made through the
following brokerage houses: Liberal S.A. Corretora de Cambio e Valores
Mobiliarios, and Bradesco S.A. CTVM; (d) the share buyback program will be
effective up to three months after 10/24/01.
European commission approval of the CAEMI acquisition
On 10/30/01 the European Commission in Brussels approved Companhia Vale do Rio
Doce (CVRD) and Mitsui & Co., Ltd. (Mitsui) joint acquisition of the Brazilian
mining concern CAEMI Mineracao e Metalurgia S.A. (Caemi). Once the transaction
is completed CVRD and Mitsui will each own 50% of Caemi's voting shares.
The European Commission cleared the transaction on the basis of an undertaking
to divest Caemi's holding in Quebec Cartier Mining Company (QCM), a Canadian
iron ore and pellet producer. This undertaking addresses the only competition
concerns identified by the European Commission.
Caemi is a Brazilian company, headquartered in Rio de Janeiro, which holds
equity investments in iron ore, kaolin, refractory bauxite and railroad
transportation.
29
Part III
7- Other information the company deems relevant
7.1- Net Accumulated Income in R$ Million
7.2- Factors Affecting the Net Income in the Last 12 Months in R$ Million
[GRAPHIC OMITTED]
1999 1000 2001
------ ----- ------
1st Quarter 323 639 660
2nd Quarter 609 1,101 1,206
3rd Quarter 801 1,600 2,412
4th Quarter 1,251 2,133
7.2- Factors Affecting the Net Income in the Last 12 Months in R$ Million
Net income at 09/30/00 1,600
Net Operating revenue 1,007
Cost of products and services (544)
Results of investment participations (675)
Financial results (1,104)
Operating expense net (89)
Discountinued operations 1,625
Income tax 592
Net income at 09/30/01 2,412
30
7.3 - Business Perfomance Ratios
09/30/01 06/30/00
-------- --------
CAPITAL RAT IOS
1 - Capital assets to stockholders' equity (Permanent assets/Equity * 100) - (%) 143.07 121.62
2 - Capital assets to total liabilities (Permanent assets/Total liabilities * 100) - (%) 128.81 130.99
3 - Total liabilities to stockholders' equity (Total liabilities/Equity * 100) - (%) 111.07 92.85
4 - Short to total liabilities (Short-term liabilities/Total liabilities * 100) - (%) 40.88 40.69
5 - Stockholders' equity to total liabilities (Equity/Total liabilities *100) - (%) 90.04 107.70
6 - Capital assets to non-current funds (Permanent assets/(Equity + Long-term
liabilities)) *100) - (%) 86.37 78.43
7 - Net Debt/Stockholders' equity (Net debt (a)/Equity) 0.35 0.22
8 - Net Debt (a)/Total Assets 0.16 0.11
9 - Leverage (Total Assets/Equity) 2.11 1.93
09/30/01 09/30/00
-------- --------
PROFITABILITY AND OTHER RATIOS
1 - Gross Margin (Gross profit/Net operating revenues * 100) - (%) 48.89 49.70
2 - Operating Margin (Operating income/Net operating revenues * 100) - (%) 33.80 44.48
3 - Net Margin (Net incomeNet operating revenues * 100) - (%) 51.98 44.06
4 - Return on Assets (Net income (annualized)/Total assets *100) - ROA (%) 13.63 11.48
5 - Return on Equity (Net income (annualized)/Equity *100) - ROE (%) 28.78 20.16
6 - Total asset turnover (Net operating revenues (annualized)Total assets) 0.26 0.26
7 - P/E (Price of preferred class A shareEarnings per share (annualized)) 6.31 8.25
8 - Price /Book Value (Price of preferred class A shareBook value per share) 1.82 1.66
9 - Net income per outstanding share (Net income (annualized)Number of shares
outstanding) 8.37 5.54
10 - NOPLATOperating Income (% ) 39.34 40.01
11 - EBITDA + Dividends receivedFinancial expenses on financing 9.84 7.81
12- EBITDA + Dividends ReceivedOperating Income (% ) 52.80 49.15
13- Net Debt (a)EBITDA + Dividends Received(annualized) 1.19 1.06
14- FCOLFinancial expenses on financing 12.68 5.90
15- ROCE 47.32 27.68
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.
7.4 - Segment and Geographic Information
The Company's business areas as follows:
Ferrous - mining of iron ore and manganese and production of pellets, as well
as their commercialization and respective rail transport, port handling (both
for the Northern and Southern Systems) and shipment.
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 services.
31
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.
Corporate center - comprises the functional areas of control, finance, legal
affairs, human resources, administration, information technology and investor
relations.
Information presented to top management with respect to the performance of each
segment is generally derived directly from the accounting records maintained in
accordance with Brazilian corporate law together with certain minor
inter-segment allocations, and is focused primarily on return on capital
employed (ROCE), net operating profit less taxes (NOPLAT) as well as net
income.
09/30/01
----------------------------------------------------------------------------------------------------------
Investment
----------------------------------------------------------------------------------------------------------
Non- Pulp and Corporate
Ferrous ferrous Logistics paper Alumium Steel Others Center Total
-------------------------------- --------- ---------- --------- -------- --------- ----------------------------------
Gross revenue -
external market 2,585,966 232,470 - - - - - - 2,818,436
Gross revenue -
internal market 1,408,172 133,769 446,361 - - - - - 1,988,302
Costs and expenses (1,883,776) (246,434) (200,747) - - - - (1,656,501) (3,987,458)
Discontinued
operations - - - 1,770,516 - - - - 1,770,516
Financial income - - - - - - - 74,723 74,723
Financial expenses - - - - - - - 405,086) (405,086
Depreciation (294,113) (50,910) (18,587) - - - - (9,402) (373,012
Equity 240,936 (195,673) (294,381) 24,274(*) (68,698) 227,698 5,969 - (59,875
Income tax and social
contribution - - - - - - - 585,034 585,034
--------- -------- ---------- --------- -------- -------- -------- -------- ----------
Net income for the
period 2,057,185 (126,778) (67,354) 1,794,790 (68,698) 227,698 5,969 (1,411,232) 2,411,580
========= ======== ======= ========= ======= ======= ===== ========== =========
(*) Refers to the equity on Florestas that is in process of sale
Sales classified by geographic destination
External market
Latin America 149,299 - - - - - - - 149,299
USA 124,763 232,470 - - - - - - 357,233
Europe 921,730 - - - - - - - 921,730
Middle East 273,749 - - - - - - - 273,749
Japan 426,627 - - - - - - - 426,627
China 264,347 - - - - - - - 264,347
Asia, except
Japan/China 425,451 - - - - - - - 425,451
--------- -------- ---------- --------- -------- -------- -------- -------- ----------
2,585,966 232,470 - - - - - - 2,818,436
Internal market 1,408,172 133,769 446,361 - - - - - 1,988,302
--------- -------- ---------- --------- -------- -------- -------- -------- ----------
3,994,138 366,239 446,361 - - - - - 4,806,738
========= ======== ======= ========= ======== ======== ======== ======== =========
Property, plant and
equipment 6,442,424 334,574 423,752 - - - - 57,576 7,258,326
Less: construction
in progress (1,112,398) (40,520) (39,644) - - - - (10,384) (1,202,946)
--------- -------- ---------- --------- -------- --------- -------- -------- ----------
Property, plant and
equipment in
operation 5,330,026 294,054 384,108 - - - - 47,192 6,055,380
========= ======== ======= ========= ======== ========= ======== ======== =========
Investments 5,860,851 59,832 420,269 144,834 701,594 1,488,095 48,477 3,725 8,727,677
Capital employed (a) 6,066,285 332,942 405,052 634 2,509 27,093 2,332 (46,583) 6,790,264
Net operating profit
less taxes -
NOPLAT(b) 1,816,249 68,895 227,027 - - - 297,864 2,410,035
Return on capital
employed - ROCE
(b/a) 29.9% 20.7% 56.0% - - - - 35.5%
32
09/30/00
----------------------------------------------------------------------------------------------------------
Investments
----------------------------------------------------------------------------------------------------------
Non- Pulp and Corporate
Ferrous ferrous Logistics paper Alumium Steel Others Center Total
--------- -------- ---------- --------- -------- --------- -------- ---------- ----------
Gross revenue -
external market 1,910,782 203,646 - - - - - - 2,114,428
Gross revenue -
internal market 1,144,219 119,584 386,814 - - - - - 1,650,617
Costs and expenses (1,488,637) (215,893) (150,408) - - - - 693,943) (2,548,881)
Discontinued
operations - - - 145,793 - - - - 145,793
Financial income - - - - - - - 111,922 111,922
Financial expenses - - - - - - - 267,058) (267,058)
Depreciation (151,516) (42,218) (15,173) - - - - (5,968) (214,875)
Equity 233,981 (267) (40,032) 14,339 277,510 124,447 5,641 - 615,619
Income tax and social
contribution - - - - - - - (7,236) (7,236)
--------- -------- ---------- --------- -------- --------- -------- -------- ----------
Net income for the
period 1,648,829 64,852 181,201 160,132 277,510 124,447 5,641 (862,283) 1,600,329
========= ======== ======= ========= ======== ========= ======== ======== =========
Sales classified by geographic destination
External market
Latin America 117,243 - - - - - - - 117,243
USA 142,496 203,646 - - - - - - 346,142
Europe 680,310 - - - - - - - 680,310
Middle East 208,786 - - - - - - - 208,786
Japan 364,049 - - - - - - - 364,049
China 194,772 - - - - - - - 194,772
Asia, except
Japan/China 203,126 - - - - - - - 203,126
--------- -------- ---------- --------- -------- --------- -------- -------- ----------
1,910,782 203,646 - - - - - - 2,114,428
Internal market 1,144,219 119,584 386,814 - - - - - 1,650,617
--------- -------- ---------- --------- -------- --------- -------- -------- ----------
3,055,001 323,230 386,814 - - - - - 3,765,045
========= ======== ======= ========= ======== ========= ======== ======== =========
Property, plant and
equipment 5,443,977 454,078 394,609 - - - - 47,758 6,340,422
Less: construction
in progress (517,968) (52,005) (7,433) - - - - (9,827) (587,233)
--------- -------- ---------- --------- -------- --------- -------- -------- ----------
Property, plant and
equipment in
operation 4,926,009 402,073 387,176 - - - - 37,931 5,753,189
========= ======== ======= ========= ======== ========= ======== ======== =========
Investments 2,114,789 148,638 654,057 1,001,076 727,384 1,614,460 44,148 3,782 6,308,334
Capital employed (a) 6,100,346 458,078 427,278 1,732 855 18,922 8,002 (49,788) 6,965,425
Net operating
profit less taxes -
NOPLAT(b) 1,414,848 65,119 221,233 - - - - (255,237) 1,445,963
Return on capital
employed -
ROCE (b/a) 23.2% 23.2% 51.8% 20.8%
Calculation of ROCE
09/30/01 09/30/00
--------- ---------
EB IT 1,825,000 1,453,199
Income tax and s ocial contribution 585,034 (7,236)
--------- ---------
Net operating profit less taxes -
NOP LT (b) 2,410,034 1,445,963
========= =========
Capital employed (a)
Property, plant and equipment in
operation 6,055,380 5,753,189
Inventories 462,920 339,972
Accounts receivable 961,063 1,341,778
Supplies (573,175) (339,832)
Salaries and related charges (115,924) (129,682)
--------- ---------
6,790,264 6,965,425
========= =========
Return on capital employed -
ROCE (b/a)
To date 35.5% 20.8%
Annualized 47.3% 27.7%
33
7.5- Share Performance on Stock Exchanges
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 Preferred ADRs in the United States over-the-counter market. On
06/20/00 the Company obtained registration from the United States Securities
and Exchange Commission (SEC) and its shares are now traded on the New York
Stock Exchange (NYSE), (each ADR equals 1 preferred share class A).
[OBJECT OMITTED]
7. 6- Capital Expenditures (Non Audited)
[OBJECT OMITTED]
7.7- Operations for the period ended September (Non Audited)
In reais In US$
-------------------------------- --------------
Preferred
Class A Shares Common Shares ADRs
-------------- -------------- --------------
High Low High Low High Low
----- ----- ----- ----- ----- -----
2000
First Quarter 59.00 45.00 52.40 45.00 33.12 22.75
Second Quarter 53.50 40.01 46.00 35.00 29.00 22.61
Third Quarter 54.00 44.07 49.00 41.21 29.75 24.43
Fourth Quarter 47.80 38.82 46.50 37.00 25.56 19.75
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
7.8- Changes in Prices (Non Audited)
The following table sets forth the prices for the products of the Company and
its subsidiary and jointly controlled companies for the periods indicated:
In thousands of reais
----------------------
ACTUAL BUDGET %
UP TO 09/01 FOR 2001 ACTUAL
----------- --------- ------
Ongoing Capital Expenditures
Replacement/Refurbishment/Improvement 306,926 574,567 53.4
Geological Research 40,306 78,988 51.0
Technological Research/Development 8,657 29,415 29.4
Environment 1,090 3,105 35.1
lnformatics/Telecommunications 22,301 57,567 38.7
--------- --------- ------
379,280 743,642 51.0
--------- --------- ------
Equity Investments 226,900 285,513 79.5
Direct Investments 517,830 780,110 66.4
--------- --------- ------
Total Capital Expenditures 1,124,010 1,809,265 62.1
========= ========= ======
34
7.7- Operations for the period ended September (Non Audited)
(Million metric tons)
---------------------------------------
2001 2000 VAR %
----------------------- --------------
PRODUCTION/PURCHASE
IRON ORE 93.8 77.3 21.3
PELLETS 11.8 11.6 1.7
MANGANESE (*) - 1.1 (100.0)
POTASH 0.4 0.4 -
GOLD (thousand Kg) 11.7 12.5 (6.4)
RAILROAD OPERATIONS - GENERAL CARGO
EFVM 18.8 17.9 5.0
FCA 16.3 14.8 10.1
EFC 2.3 2.0 15.0
EFVM - TKU 8.3 8.1 2.5
FCA - TKU 6.4 6.0 6.7
EFC - TKU 1.4 1.1 27.3
PORT OPERATIONS
TUBARAO 13.2 11.2 17.9
TERMINAL MARITIMO INACIO BARBOSA 0.6 0.6 -
SAO LUIZ 1.9 1.6 18.8
DOCENAVE OPERATIONS
BULK CARGO 22.0 25.6 (14.1)
GENERAL CARGO 45.3 38.2 18.6
MANOEVERS 4.9 1.7 188.2
(*) Manganese operations were transferred to our subsidiary SIBRA.
7.8- Changes in Prices (Non Audited)
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 Europe
(SSF) (SFCJ) Gold Pulp - CIF Aluminum
(US$/ton) (US$/ton) (US$/ounce) (US$/ton) (US$/ton)
------------------- -------------------- -------------------- -------------------- --------------------
2000
March 14.48 17.82 276.75 598.00 1,577.41
June 15.35 17.82 288.15 660.00 1,506.73
September 15.35 17.82 273.85 680.00 1,580.48
December 15.35 17.82 274.45 690.00 1,515.14
2001
March 15.35 18.68 257.70 570.00 1,569.59
June 16.32 18.68 269.50 420.00 1,536.30
September 16.32 18.68 293.10 - 1,405.96
35
7.9- Iron Ore and Pellet Sales (Main Markets) (Non Audited)
(Millons of tons)
---------------------------------------------------------------------------------------------------
JAN to SEP JAN to SEP
--------------- ---------------
1997 % 1998 % 1999 % 2000 % 2000 % 2001 %
--------------- -------- ------ -------- ------ -------- ------ -------- ------ -------- ------
FOREIGN MARKET
ASIA
CHINA 6.2 6 5.7 6 7.3 8 9.2 8 6.6 8 11.5 12
KOREA 7.4 7 7.1 7 7.9 8 7.0 6 5.1 6 4.7 5
PHILIPPINES 1.9 2 0.9 1 1.6 2 1.4 1 1.0 1 0.7 1
JAPAN 18.8 18 17.3 17 16.9 17 17.5 15 13.5 16 12.7 13
TAIWAN 2.2 2 1.6 2 1.8 2 1.6 2 1.3 2 1.6 2
OTHERS 1.2 1 1.1 1 0.6 - 0.4 - 0.2 - 0.5 1
--------------- -------- ------ -------- ------ -------- ------ -------- ------ -------- ------
37.7 36 33.7 34 36.1 37 37.1 32 27.7 33 31.7 33
--------------- -------- ------ -------- ------ -------- ------ -------- ------ -------- ------
EUROPE
GERMANY 10.8 11 9.4 9 8.0 8 8.2 7 5.9 6 7.2 7
SPAIN 3.9 4 3.6 4 3.6 4 2.9 2 2.1 2 1.9 2
FRANCE 2.8 3 3.0 3 2.1 2 2.9 2 2.0 2 2.8 3
ITALY 5.8 6 6.1 6 5.0 5 4.8 4 3.9 5 3.7 4
UNITED KINGDOM 2.3 2 2.4 2 1.6 2 1.5 2 1.2 1 1.1 1
OTHERS 4.7 5 5.7 6 4.7 5 8.2 7 5.8 7 7.4 8
--------------- -------- ------ -------- ------ -------- ------ -------- ------ -------- ------
30.3 31 30.2 30 25.0 26 28.5 24 20.9 23 24.1 25
--------------- -------- ------ -------- ------ -------- ------ -------- ------ -------- ------
AMERICAS
ARGENTINA 2.4 2 2.3 2 1.6 2 1.4 1 0.9 1 1.4 2
UNITED STATES 2.4 2 3.1 3 3.0 3 3.5 3 2.9 3 2.3 2
OTHERS 2.0 2 2.2 2 1.8 2 2.0 2 1.6 2 1.3 1
--------------- -------- ------ -------- ------ -------- ------ -------- ------ -------- ------
6.8 6 7.6 7 6.4 7 6.9 6 5.4 6 5.0 5
--------------- -------- ------ -------- ------ -------- ------ -------- ------ -------- ------
AFRICA/MID.EAST/OCEANIA
BAHREIN 2.1 2 1.2 1 1.5 2 2.0 2 1.5 2 1.4 1
OTHERS 3.1 3 3.2 3 3.6 4 5.2 4 3.4 4 3.7 4
--------------- -------- ------ -------- ------ -------- ------ -------- ------ -------- ------
5.2 5 4.4 4 5.1 6 7.2 6 4.9 6 5.1 5
--------------- -------- ------ -------- ------ -------- ------ -------- ------ -------- ------
80.0 78 75.9 75 72.6 76 79.7 68 58.9 68 65.9 68
=============== ======== ====== ======== ====== ======== ====== ======== ====== ======== ======
DOMESTIC MARKET
STEEL MILLS 13.8 14 15.0 15 13.6 14 15.5 13 11.0 13 14.9 16
PELLETING AFFILIATES 8.1 8 8.6 10 10.1 10 21.6 19 16.2 19 15.3 16
--------------- -------- ------ -------- ------ -------- ------ -------- ------ -------- ------
21.9 22 23.6 25 23.7 24 37.1 32 27.2 32 30.2 32
--------------- -------- ------ -------- ------ -------- ------ -------- ------ -------- ------
TOTAL 101.9 100 99.5 100 96.3 100 116.8 100 86.1 100 96.1 100
=============== ======== ====== ======== ====== ======== ====== ======== ====== ======== ======
EXPORTS BY SYSTEM
(Millons of tons)
-----------------------------------------------------------------------------------------------------------
JAN to SEP JAN to SEP
------------------------------------
1997 % 1998 % 1999 % 2000 % 2000 % 2001 %
------ ------ --------- ------- ---------- ------- --------- ------- ---------- ------- --------- -------
NORTHERN SYSTEM 40.8 51 41.8 55 40.5 56 43.3 54 32.1 54 34.2 52
SOUTHERN SYSTEM 39.2 49 34.1 45 32.1 44 36.4 46 26.8 46 31.7 48
------ ------ --------- ------- ---------- ------- --------- ------- ---------- ------- --------- -------
80.0 100 75.9 100 72.6 100 79.7 100 58.9 100 65.9 100
===== ====== ========= ======= ========== ======= ========= ======= ========== ======= ========= =======
36
7.10- Shareholding Interests (Organizational Chart at 09/30/01)
============================================
Companhia Vale do Rio Doce |
Valepar 27.14 Pulic 72.86|
============================================
|
|----------------
|
============ ================== ==========------------------------------------
Ferrous | Non Ferrous | Logistics|
============---- ========================== ============================-----------================
Iron Ore and Pellets | | Precious Metals, | Railroads and Ports | Shipping |
| | Base Metals | | |
| | and Industry Minerals | ------------------------- | ---------------------- |
| | | |TVV - Terminal de | | |Docenave |--|
------------------------ | | ----------------------- | |Vila Velha S.A. | | |CVRD 100.00|--|
|Minas da Serra Geral**| | | |Docegeo | | |CVRD 99.58|--| ---------------------- |
|CVRD 51.00| | | |CVRD 98.998|--| |Min. Tacuma 0.02| | | |
|Kawasaki 24.50|--| | |Others 0.002| | |Employees 0.40| | ---------------------- |
|Japanese Group 24.50| | | ----------------------- | ------------------------- | |Navedoce* | |
------------------------ | | ----------------------- | ------------------------- | |Docenave 82.00| |
------------------------ | | |24 Empresas de | | |Ferrovia | | |Navedoce 18.00| |
|S/A Min. Trindade | | | |Mineracao |--| |Centro Atlantica S.A. | | ---------------------- |
|SAMITRI | | | |CVRD 100.00| | |Min. Tacuma 45.65| | | |
|CVRD 100.00| | | ----------------------- | |VALIA 9.99| | ---------------------- |
------------------------ | | ----------------------- | |KRJ 12.31|--| |Seamar* | |
| | | |Para Pigmentos | | |CARMO 9.99| | |Navedoce 100.00| |
------------------------ | | |CVRD 80.11| | |CPP 1.03| | ---------------------- |
|Samarco Mineracao S/A | | | |Mitsubishi 14.27|--| |CSN 11.95| | | |
|SAMITRI 50.00| | | |IFC 5.62| | |Others 9.08| | ---------------------- |
|BHP Brasil 50.00| | | ----------------------- | ------------------------- | |Wilsea* | |
------------------------ | | | | ------------------------- | |Seamar 50.00| |
------------------------ | | ----------------------- | |Companhia | | |W. Wilhelmsen 50.00| |
|Hispanobras** | | | |PPSA Overseas | | |Ferroviaria do Nordeste| | ---------------------- |
|CVRD 50.89|--| | |PPSA 100.00| | |CVRD 30.00| | ---------------------- |
|Aceralia CS 49.11| | | ----------------------- | |Taquari 30.00|--| |Nippon Bulkcarriers*| |
------------------------ | | ----------------------- | |CSN 30.00| | |Docenave 50.00| |
------------------------ | | |Salobo Metals** | | |Employees 10.00| | |Mitsui 25.00|--|
|Itabrasco** | | | |CVRD 50.00|--| ------------------------- | |Nissho Iwai 25.00| |
|CVRD 50.90|--| | |Anglo-American 50.00| | ------------------------- | ----------------------
|Ilva 49.10| | | ----------------------- | |Ferroban | |
------------------------ | | ----------------------- | |Eerropasa 37.91| |
------------------------ | | |Mineracao Sossego | | |CVRD 18.74| |
|Nibrasco** | | | |Min. Andira 49.01|--| |Capmelissa 6.96|--|
|CVRD 51.00| | | |Phelps Dodge 50.99| |Dasaiev (LAIF) 6.96| |
|Nippon Steel 25.39|--| | ----------------------- |Funcel 6.79| |
|Japanese Group 23.61| | | |Previ 6.79| |
------------------------ | ----------------------------- |Others 15.85| |
------------------------ | Manganese and Alloys | ------------------------- |
|Kobrasco** | | ----------------------- | ------------------------- |
|CVRD 50.00|--| |Uracum Mineraco S.A. |--| |Cia de | |
|POSCO 50.00| | |CVRD 100.00| | |Desenvolvimento | |
------------------------ | ----------------------- | |do Sudeste - CDSE | |
| | ----------------------- | |Bechtel 25.00| |
------------------------ | |RDME* |--| |BNDESPAR 24.00|--|
|Kobin | | |ITACO 100.00| | |Serrana 12.70| |
|Kobrasco 100.00| | ----------------------- | |Unibanco 12.80| |
------------------------ | ----------------------- | |CVRD 12.80| |
------------------------ | |SIBRA | | |CSN 12.70| |
|GIIC* | | |CVRD 98.16|--| ------------------------- |
|ITACO 50.00|--| |Others 1.84| | ------------------------- |
|Gulf Invest Co. 50.00| | ----------------------- | |CSN Aceros S.A.* | |
------------------------ | ----------------------- | |ITACO 62.50|--|
------------------------ | |CPFL | | |CSN Panama 37.50|
|NORPEL - Pelotizacao | | |SIBRA 93.59| | -------------------------
|do Norte S.A |--| |Others 6.41| |
|CVRD 99.90| | ----------------------- |
|Min. Araguaia 0.10| | ----------------------- |
------------------------ | |Nova Era Silicon** | |
------------------------ | |CVRD 49.00| |
|ZAGAIA Participacoes | | |Mitsubishi 25.50|--|
|CVRD 99.99|--| |Kawasaki 22.50| |
|Min. Andira 0.01| | |Mizushima 3.00| |
------------------------ | ----------------------- |
| | ----------------------- |
------------------------ | |Mineracao Mato Grosso|--|
|Ferteco | | |CVRD 100.00|
|ZAGAIA 100.00| | -----------------------
------------------------ |
------------------------ |
|Baovale Mineracao S.A.| |
|CVRD 90.00|--|
|Docepar 10.00| |
------------------------ |
------------------------ |
|Belem-Adm e Part. Ltda| |
|CVRD 99.99|--|
|Docepar 0.01| |
------------------------
Companies of the CVRD Group
Holding in Total Stock (%)
-------------------------------------------------------------------------------====================-------------====================
================== Energy | Other Abroad |
Holdings | | |
----------=================----------------=================== | |
Bauxite, Alumina| Timber,| -------------------------- | -------------------------- |
and Aluminum| Pulp & Paper| |Vale do Rio Doce | | |Rio Doce | |
| | |Energia S.A. |--| |International* |--|
| ----------------------- | ------------------------ | |CVRD 90.00| | |CVRD 100.00| |
| |Aluvale |--| |Florestas Rio Doce | | |Aluvale 10.00| | -------------------------- |
| |CVRD 94.74| | |CVRD 99.85|--| -------------------------- | |
| |ITACO 5.26|--| |Others 0.15| | -------------------------- | -------------------------- |
| ----------------------- | ------------------------ | |Consortium Igarapava | | |Rio Doce Asia* | |
| ----------------------- | ------------------------ | |Usina Hidreletrica | | |Rio Doce | |
| |Albras** | | |Celmar | | |Cia Mineira Metals 23.93|--| |International | |
| |Aluvale 51.00|--| |CVRD 85.00|--| |CSN 17.92| | -------------------------- |
| |NAAC 49.00| | |Nissho Iwai 15.00| | |CEMIG 14.50| | -------------------------- |
| ----------------------- | ------------------------ | |Min. Morro Velho 5.50| | |Rio Doce Europa | |
| ----------------------- | | -------------------------- | |S.'a.r.l.* | |
| |Valesul** | | | -------------------------- | |CVRD 99.80|--|
| |Aluvale 54.51|--| | |Consortium | | |Outros 0.20| |
| |Billiton 45.49| | ============== |Porto Estrela | | -------------------------- |
| ----------------------- | Steel| |Usina Hidreletrica |--| | |
| ----------------------- | -----------------------| | |CVRD 33.33| | -------------------------- |
| |Alunorte** | | |CST** | | |CEMIG 33.33| | |Rio Doce | |
| |Aluvale 46.60| | |CVRD 22.85| | |Coteminas 33.33| | |International Finance* | |
| |Norsk Hydro 30.75| | |Acesita/Usinor 37.29|--| -------------------------- | |Rio Doce Europa 100.00| |
| |MRN 12.62|--| |Kawasaki 7.91| | -------------------------- | -------------------------- |
| |NAAC 4.88| | |Others 31.95| | |Consortium Airmores | | | |
| |CBA 3.62| | ------------------------ | |Usina Hidreletrica | | -------------------------- |
| |JAIC 1.53| | ------------------------ | |CVRD 51.00|--| |Itabira Rio Doce | |
| ----------------------- | |California Steel* | | |CEMIG 49.00| | --|Company Ltd.-ITACO* | |
| ----------------------- | |Rio Doce Ltd. 50.00|--| -------------------------- | | |RDIF 100.00| |
| |Min. Rio do Norte** | | |Kawasaki 50.00| | -------------------------- | | -------------------------- |
| |Aluvale 40.00| | ------------------------ | |Consortium Candonga | | | | |
| |Billiton 14.80| | ------------------------ | |Usina Hidreletrica | | | -------------------------- |
| |Alcan 12.00| | |Usimina | | |CVRD 50.00|--| | |Rio Doce America* | |
| |CBA 10.00| | |CVRD 11.46| | |EPP 50.00| | | |ITACO 100.00| |
| |Alcoa 8.58|--| |Nippon Usiminas 9.45| | -------------------------- | | -------------------------- |
| |Reynolds 5.00| | |Previ 8.02|--| -------------------------- | | | |
| |Norsk Hydro 5.00| | |CIU 4.95| | |Consortium Funil | | | -------------------------- |
| |Abalco 4.62| | |Others 66.12| | |Usina Hidreletrica | | | |Rio Doce Ltd.* | |
| ----------------------- | ------------------------ | |CVRD 51.00|--| | |Rico Doce America 100.00| |
| ----------------------- | ------------------------ | |CEMIG 49.00| | | -------------------------- |
| |Min. Vera Cruz | | |Siderar(*) | | -------------------------- | | -------------------------- |
| |Aluvale 36.00|--| |Italbira Rio Doce 4.85| | -------------------------- | | |CVRD Overseas | |
| |Paraibuna 42.88| |Usiminas 5.32| | |Consortium Vitoria | | --|ITACO 100.00| |
| |Fina Emp. Part. 21.12| |Grupo Techint 52.98| | |Energia | | -------------------------- |
| ----------------------- |ISA (employees) 10.47| | |CVRD 33.33|--| |
| |Others 26.38| | |Escelsa 33.33| | -------------------------- |
| ------------------------ | |Petrobras 33.33| | |CVRD Finance | |
| | -------------------------- | |CVRD Overseas 100.00| |
| ====================== -------------------------- | -------------------------- |
===================== e-Business | |Consortium Capim | | -------------------------- |
| Fertilizers | |Branco I e II - Usina | | |CVRD Europe Trading | |
| ------------------------ | |Hidreletrica | | |Energy B.V.-CETE |--|
| ----------------------- |Valepontocom | | |CVRD 46.00| | |CVRD 100.00| |
| |Fosfertil | |CVRD 98.20|--| |CEMIG 20.00|--| -------------------------- |
|--|CVRD 10.96| --|Others 1.80| | |Suzano 17.00| | -------------------------- |
|Fertifos 55.35| | ------------------------ | |Votorantim 12.00| | |Ferteco International |--|
|Others 33.69| | ------------------------ | |Camargo Correa 5.00| | |Ferteco 100.00| |
----------------------- | |Solostrata S/A | | -------------------------- | -------------------------- |
|--|Valepontocom 99.90| | -------------------------- | -------------------------- |
| |CVRD 0.10| | |Consortium | | |Brasilux |--|
| ------------------------ | |Foz do Chapeco | | |Samitri 100.00| |
| ------------------------ | |Usina Hidreletrica | | -------------------------- |
| |Multistrata S/A | | |CVRD 40.00|--| -------------------------- |
-- |Valepontocom 99.90| | |Serra da Mesa S.A. 40.00| |Rio Doce Comercio | |
|CVRD 0.10| | |CEEE 20.00| |Internacional ApS* |--|
------------------------ | -------------------------- |CVRD 100.00|
------------------------ | --------------------------
|Quadrem Int. Holdings | | |
|LTD | | --------------------------
|ITACO 9.00| | |Itabira Internacional |
|Others 91.00| | |Servicos e Comercio* |
------------------------ |RDCI Aps 99.99|
|Others 0.01|
--------------------------
--------------------------------
| [ ] Subsidiary |
| [ ] Affiliated |
| [ ] Other Participations | * Companies with head offices abroad
| [ ] Consortium | ** Holding linked to a Stockholders Agreement
--------------------------------
37
7.11- Information About SAMITRI (Non Audited)
Statement of Income In thousands of reais
-------------------------------------------------------------------------------------------------------------------------------
From 07/01/01 From 01/01/01 From 07/01/00 From 01/01/00
to 09/30/01 to 09/30/01 to 09/30/00 to 09/30/00
Operating revenues 4,696 220,535 91,833 269,207
Value-added taxes (142) (11,856) (2,056) (7,120)
---------- ---------- ---------- ----------
Net operating revenues 4,554 208,679 89,777 262,087
---------- ---------- ---------- ----------
Cost of products and services -- (96,883) (33,679) (101,521)
Gross profit 4,554 111,796 56,098 160,566
Gain on investments accounted for by the equity method (27,183) 665 14,015 (1,279)
Operating income (expenses)
Selling (70) (74,788) (40,346) (124,154)
Administrative (10,777) (16,119) (2,451) (14,705)
Financial expenses (22,163) (59,567) (9,146) (24,637)
Financial income 15,498 35,685 2,510 4,852
Other operating expenses, net 7,649 10,041 (3,332) (45,945)
---------- ---------- ---------- ----------
(9,863) (104,748) (52,765) (204,589)
---------- ---------- ---------- ----------
Operating profit (32,492) 7,713 17,348 (45,302)
Non operating income (expenses), net (453) (3,573) (156) (700)
---------- ---------- ---------- ----------
Income before income tax and social contribution (32,945) 4,140 17,192 (46,002)
Income tax and social contribution 1,681 (3,622) (211) (2,213)
---------- ---------- ---------- ----------
Net income for the period (31,264) 518 16,981 (48,215)
========== ========== ========== ==========
Number of shares outstanding at the end of the period (in thousands) 13,095,590 13,095,590 13,095,590 13,095,590
========== ========== ========== ==========
Net earnings per share outstanding at the end of the period (R$) (0.0024) 0.0000 0.0013 (0.0037)
========== ========== ========== ==========
Result
The net result of SAMITRI for the first nine months of 2001 was a net income of
R$ 518 against a net income of R$ 48.215 for the same period of 2000.
Despite the increase in sales, the result for the first quarter of 2001 was
substantially affected by the appreciation of the U.S. dollar against the real,
impacting positively on export revenue but negatively on the debt of SAMITRI
and its affiliate SAMARCO.
In the third quarter of 2001, SAMITRI did not have any activities in the
production and sale of iron ore, only maintaining the leasing of its mines to
CVRD.
Investments
Investments are budgeted for 2001 only for replacement of the production
capacity, research and environment.
Leasing
According to an agreement relating to mineral rights and assets and facilities
signed on 04/10/01, since 05/01/01 CVRD has operated SAMITRI's mines. On the
other hand, CVRD will pay SAMITRI based on a monthly fixed amount agreed by
both parties in the amount of R$ 2,763. The agreement was registered at
"Departamento Nacional de Producao Mineral - DNPM", the National Mineral
Production Department, through Relation n 272/2001.
Incorporation
On October 1, 2001 SAMITRI was merged with CVRD (note 6.9 (k)).
38
8.1 - Aluminum Area - ALBRAS (Adjusted and Non-Audited) Attachment I
-------------------------------------------------------------------------------
Information 2001
----------- ----
1st Quarter 2nd Quarter 3rd Quarter Total
----------- ----------- ----------- -----
Quantity sold - external mark MT (thousand) 87 88 76 251
Quantity sold - internal mark MT (thousand) 3 4 4 11
--------- --------- --------- ---------
Quantity sold - total MT (thousand) 90 92 80 262
========= ========= ========= =========
Average sales price - external mark US$ 1,530.02 1,468.13 1,387.58 1,465.21
Average sales price - internal mark US$ 1,606.92 1,528.21 1,456.51 1,493.46
Average sales price - total US$ 1,532.90 1,470.68 1,390.89 1,468.08
Long-term indebtedness, gross US$ 527,685 496,058 496,941 496,941
Short-term indebtedness, gross US$ 176,879 167,370 137,258 137,258
--------- --------- --------- ---------
Total indebtedness, gross US$ 704,564 663,428 634,199 634,199
========= ========= ========= =========
Long-term indebtedness, net US$ 527,685 496,058 496,941 496,941
Short-term indebtedness, net US$ 130,373 126,931 95,074 95,074
--------- --------- --------- ---------
Total indebtedness, net US$ 658,058 622,989 592,015 592,015
========= ========= ========= =========
Stockholders' equity R$ 189,460 198,660 2,854 2,854
========= ========= ========= =========
Net operating revenues R$ 277,094 307,826 278,080 863,000
Cost of products R$ (161,707) (176,460) (168,893) (507,060)
Other expenses/revenues R$ (12,828) (9,735) (99,178) (121,741)
Depreciation, amortization and
depletion R$ 19,149 15,091 15,417 49,657
--------- --------- --------- ---------
EBITDA >> 121,708 136,722 25,426 283,856
Depreciation, amortization and
depletion R$ (19,149) (15,091) (15,417) (49,657)
--------- --------- --------- ---------
EBIT >> 102,559 121,631 10,009 234,199
Non-operating result R$ 582 (406) (1,794) (1,618)
Net financial result R$ (119,075) (114,009) (187,571) (420,655)
Income before income tax and social
contribution R$ (15,934) 7,216 (179,356) (188,074)
Income tax and social contribution R$ 14,467 1,982 (16,449) --
--------- --------- --------- ---------
Net income R$ (1,467) 9,198 (195,805) (188,074)
========= ========= ========= =========
Property, plant and equipment in
operation R$ 1,017,273 1,005,835 1,008,357 1,008,357
Inventories R$ 97,450 96,893 100,020 100,020
Accounts receivable R$ 52,323 51,300 5,596 5,596
Payable to suppliers and contractors R$ (68,409) (70,442) (55,751) (55,751)
Salaries and social charges R$ (8,361) (9,730) (11,125) (11,125)
--------- --------- --------- ---------
Capital employed >> 1,090,276 1,073,856 1,047,097 1,047,097
========= ========= ========= =========
ROCE after taxes (annualized) 42.9% 46.0% (2.5%) 29.8%
--------- --------- --------- ---------
ROE (annualized) (3.1%) 18.5% (27442.9) (8786.5%)
--------- --------- --------- ---------
Information 2000
----------- ----
1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Total
----------- ----------- ----------- ----------- -----
Quantity sold - external mark MT (thousand) 87 89 88 87 351
Quantity sold - internal mark MT (thousand) 3 4 5 3 15
--------- --------- --------- --------- ---------
Quantity sold - total MT (thousand) 90 93 93 90 366
========= ========= ========= ========= ========
Average sales price - external mark US$ 1,590.78 1,464.45 1,494.34 1,485.04 1,508.21
Average sales price - internal mark US$ 1,600.56 1,503.00 1,505.99 1,488.25 1,513.79
Average sales price - total US$ 1,591.07 1,465.98 1,494.58 1,484.70 1,508.42
Long-term indebtedness, gross US$ 612,544 586,197 575,942 536,012 536,012
Short-term indebtedness, gross US$ 230,512 207,989 181,007 193,278 193,278
--------- --------- --------- --------- ---------
Total indebtedness, gross US$ 843,056 794,186 756,949 729,290 729,290
========= ========= ========= ========= ========
Long-term indebtedness, net US$ 612,544 586,197 575,942 536,012 536,012
Short-term indebtedness, net US$ 170,975 166,159 143,128 160,329 160,329
--------- --------- --------- --------- ---------
Total indebtedness, net US$ 783,519 752,356 719,070 696,341 696,341
========= ========= ========= ========= =========
Stockholders' equity R$ 106,739 74,682 162,355 190,928 190,928
========= ========= ========= ========= =========
Net operating revenues R$ 254,504 242,838 250,908 258,545 1,006,795
Cost of products R$ (142,035) (151,468) (146,959) (143,744) (584,206)
Other expenses/revenues R$ (14,990) (20,324) (14,352) (14,528) (64,194)
Depreciation, amortization and
depletion R$ 16,982 16,929 16,856 17,210 67,977
EBITDA >> 114,461 87,975 106,453 117,483 426,372
Depreciation, amortization and
depletion R$ (16,982) (16,929) (16,856) (17,210) (67,977)
--------- --------- --------- --------- ---------
EBIT >> 97,479 71,046 89,597 100,273 358,395
Non-operating result R$ 1,016 407 4,516 (7,514) (1,575)
Net financial result R$ 613 (46,519) (48,253) (79,528) (173,687)
--------- --------- --------- --------- ---------
Income before income tax and social
contribution R$ 99,108 24,934 45,860 13,231 183,133
Income tax and social contribution R$ (6,654) 6,384 45,814 15,340 60,884
Net income R$ 92,454 31,318 91,674 28,571 244,017
========= ========= ========= ========= =========
Property, plant and equipment in
operation R$ 1,072,021 1,057,687 1,039,748 1,031,680 1,031,680
Inventories R$ 83,882 82,997 84,699 103,383 103,383
Accounts receivable R$ 55,231 40,812 42,127 45,616 45,616
Payable to suppliers and contractors R$ (70,132) (73,887) (89,585) (97,090) (97,090)
Salaries and social charges R$ (7,564) (9,231) (9,778) (8,076) (8,076)
--------- --------- --------- --------- ---------
Capital employed >> 1,133,438 1,098,378 1,067,211 1,075,513 1,075,513
========= ========= ========= ========= =========
ROCE after taxes (annualized) 32.1% 28.2% 50.8% 43.0% 39.0%
ROE (annualized) 346.5% 167.7% 225.9% 59.9% 127.8%
39
8.2 - Aluminum Area - ALUNORTE (Adjusted and Non-Audited) Attachment I
-------------------------------------------------------------------------------
Information 2001
----------- ----
1st Quarter 2nd Quarter 3rd Quarter Total
----------- ----------- ----------- -----
Quantity sold - external mark MT (thousand) 170 212 249 631
Quantity sold - internal mark MT (thousand) 193 195 160 548
--------- --------- --------- ---------
Quantity sold - total MT (thousand) 363 407 409 1,179
========= ========= ========= =========
Average sales price - external mark US$ 195.23 189.14 181.98 188.41
Average sales price - internal mark US$ 202.01 195.80 188.73 195.42
Average sales price - total US$ 198.83 192.33 184.94 192.04
Long-term indebtedness, gross US$ 434,772 424,815 429,162 429,162
Short-term indebtedness, gross US$ 43,410 47,102 20,186 20,186
--------- --------- --------- ---------
Total indebtedness, gross US$ 478,182 471,917 449,348 449,348
========= ========= ========= =========
Long-term indebtedness, net US$ 405,254 394,715 429,162 429,162
Short-term indebtedness, net US$ - - - -
--------- --------- --------- ---------
Total indebtedness, net US$ 405,254 394,715 429,162 429,162
========= ========= ========= =========
Stockholders' equity R$ 433,497 417,974 334,924 334,924
========= ========= ========= =========
Net operating revenues R$ 149,709 188,075 177,200 514,984
Cost of products R$ (106,856) (128,775) (122,317) (357,948)
Other expenses/revenues R$ (4,729) (6,886) (3,869) (15,484)
Depreciation, amortization and
depletion R$ 12,904 12,861 12,773 38,538
--------- --------- --------- ---------
EBITDA >> 51,028 65,275 63,787 180,090
Depreciation, amortization and
depletion R$ (12,904) (12,861) (12,773) (38,538)
--------- --------- --------- ---------
EBIT >> 38,124 52,414 51,014 141,552
Non-operating result R$ 749 (721) 104 132)
Net financial result R$ (97,766) (75,812) (156,652) (330,230)
--------- --------- --------- ---------
Income before income tax and social
contribution R$ (58,893) (24,119) (105,534) (188,546)
Income tax and social contribution R$ 15,653 7,153 (22,808) (2)
--------- --------- --------- ---------
Net income R$ (43,240) (16,966) (128,342) (188,548)
========= ========= ========= =========
Property, plant and equipment in
operation R$ 910,598 902,738 894,823 894,823
Inventories R$ 85,758 88,446 112,654 112,654
Accounts receivable R$ 46,243 47,800 33,930 33,930
Payable to suppliers and contractors R$ (63,162) (67,888) (88,087) (88,087)
Salaries and social charges R$ (3,302) (3,559) (3,582) (3,582)
--------- --------- --------- ---------
Capital employed >> 976,135 967,537 949,738 949,738
========= ========= ========= =========
ROCE after taxes (annualized) 22.0% 24.6% 11.9% 19.9%
--------- --------- --------- ---------
ROE (annualized) (39.9%) (16.2%) (153.3%) (75.1%)
--------- --------- --------- ---------
Information 2000
----------- ----
1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Total
----------- ----------- ----------- ----------- -----
Quantity sold - external mark MT (thousand) 191 214 180 210 795
Quantity sold - internal mark MT (thousand) 206 192 194 209 801
--------- --------- --------- --------- ---------
Quantity sold - total MT (thousand) 397 406 374 419 1,l596
========= ========= ========= ========= ========
Average sales price - external mark US$ 198.56 192.77 194.35 195.38 198.04
Average sales price - internal mark US$ 195.01 194.49 200.15 202.31 195.21
Average sales price - total US$ 196.72 193.58 197.37 198.83 196.63
Long-term indebtedness, gross US$ 443,234 433,844 420,433 451,036 451,036
Short-term indebtedness, gross US$ 55,860 49,971 48,360 39,838 39,838
--------- --------- --------- --------- ---------
Total indebtedness, gross US$ 499,094 483,815 468,793 490,874 490,874
========= ========= ========= ========= ========
Long-term indebtedness, net US$ 443,234 433,844 420,433 436,981 436,981
Short-term indebtedness, net US$ 33,108 29,593 38,990 - -
--------- --------- --------- --------- ---------
Total indebtedness, net US$ 476,342 463,437 459,423 436,981 436,981
========= ========= ========= ========= =========
Stockholders' equity R$ 412,315 407,576 424,675 430,118 430,118
========= ========= ========= ========= =========
Net operating revenues R$ 139,337 147,087 138,987 164,507 589,918
Cost of products R$ (96,494) (102,754) (99,487) (116,172) (414,907)
Other expenses/revenues R$ (5,188) (12,227) (7,374) (26,155) (50,944)
Depreciation, amortization and
depletion R$ 12,941 12,868 12,818 12,813 51,440
--------- --------- --------- --------- ---------
EBITDA >> 50,596 44,974 44,944 34,993 175,507
Depreciation, amortization and
depletion R$ (12,941) (12,868) (12,818) (12,813) (51,440)
--------- --------- --------- --------- ---------
EBIT >> 37,655 32,106 32,126 22,180 124,067
Non-operating result R$ (1) (6) (36) 246 203
Net financial result R$ (2,344) (40,075) (35,030) (61,741) (139,190)
--------- --------- --------- --------- ---------
Income before income tax and social
contribution R$ 35,310 (7,975) (2,940) (39,315) (14,920)
Income tax and social contribution R$ (3,132) 3,236 20,039 18,119 38,262
--------- --------- --------- --------- ---------
Net income R$ 32,178 (4,739) 17,099 (21,196) 23,342
========= ========= ========= ========= =========
Property, plant and equipment in
operation R$ 936,780 928,878 923,193 918,375 918,375
Inventories R$ 65,788 61,985 64,306 73,644 73,644
Accounts receivable R$ 40,360 53,166 49,660 68,668 68,668
Payable to suppliers and contractors R$ (42,063) (47,007) (48,916) (70,323) (70,323)
Salaries and social charges R$ (2,984) (3,366) (3,399) (3,045) (3,045)
--------- --------- --------- --------- ---------
Capital employed >> 997,881 993,656 984,844 987,319 987,319
========= ========= ========= ========= =========
ROCE after taxes (annualized) 13.8% 14.2% 21.2% 16.3% 16.4%
ROE (annualized) 31.2% (4.7%) 16.1% (19.7%) 5.4%
40
8.3 - Aluminum Area - ALUVALE (Adjusted and Non-Audited) Attachment I
Information 2001
----------- ----
1st Quarter 2nd Quarter 3rd Quarter Total
----------- ----------- ----------- -----
Quantity sold - external mark MT (thousand) - - - -
Quantity sold - internal mark MT (thousand) - - 7 7
--------- --------- --------- ---------
Quantity sold - total MT (thousand) - - 7 7
========= ========= ========= =========
Average sales price - external mark US$ - - - -
Average sales price - internal mark US$ - - 5 5
Average sales price - total US$ - - 5 5
Short-term indebtedness, gross US$ 310 259 - -
--------- --------- --------- ---------
Total indebtedness, gross US$ 310 259 - -
========= ========= ========= =========
Stockholders' equity R$ 724,927 754,707 627,385 627,385
========= ========= ========= =========
Net operating revenues R$ 323 438 599 1,360
Cost of products R$ - - (15) (15)
Other expenses/revenues R$ 3,650 315 2,547 6,512
Depreciation, amortization and
depletion R$ 8 9 9 26
--------- --------- --------- ---------
EBITDA >> 3,981 762 3,140 7,883
Depreciation, amortization and
depletion R$ (8) (9) (9) (26)
--------- --------- --------- ---------
EBIT >> 3,973 753 3,131 7,857
Gain on investments accounted for by
the equity method R$ (2,165) 27,928 (132,056) (106,293)
Net financial result R$ 3,155 3,916 4,293 11,364
--------- --------- --------- ---------
Income before income tax and social
contribution R$ 4,963 32,597 (124,632) (87,072)
Income tax and social contribution R$ 3,870 (2,818) (2,689) (1,637)
--------- --------- --------- ---------
Net income R$ 8,833 29,779 (127,321) (88,709)
========= ========= ========= =========
Property, plant and equipment in
operation R$ 100 96 102 102
Inventories R$ 35 35 20 20
Accounts receivable R$ - - - -
Payable to suppliers and contractors R$ - - - -
--------- --------- --------- ---------
Capital employed >> 135 131 122 122
========= ========= ========= =========
ROCE after taxes (annualized) - - - -
--------- --------- --------- ---------
ROE (annualized) 4.9% 15.8% (81.2%) (18.9%)
--------- --------- --------- ---------
Information 2000
----------- ----
1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Total
----------- ----------- ----------- ----------- -----
Quantity sold - external mark MT (thousand) - - - - -
Quantity sold - internal mark MT (thousand) 3 - - - 3
--------- --------- --------- --------- ---------
Quantity sold - total MT (thousand) 3 - - - 3
========= ========= ========= ========= ========
Average sales price - external mark US$ 1,743.77 - - - 1,784.42
Average sales price - internal mark US$ 2,338.90 2,028.93 - - 2,285.67
Average sales price - total US$ 2,281.55 2,028.93 - - 2,244.41
Short-term indebtedness, gross US$ 19,272 - - - -
--------- --------- --------- --------- ---------
Total indebtedness, gross US$ 19,272 - - - -
========= ========= ========= ========= ========
Stockholders' equity R$ 859,549 871,845 727,384 716,093 716,093
========= ========= ========= ========= =========
Net operating revenues R$ 13,906 1,950 1,048 700 17,604
Cost of products R$ (9,832) (1,121) (392) (236) (11,581)
Other expenses/revenues R$ (97) 2,308 2,293 (3,634) 870
Depreciation, amortization and
depletion R$ - - - - -
--------- --------- --------- --------- ---------
EBITDA >> 3,977 3,137 2,949 (3,170) 6,893
Depreciation, amortization and
depletion R$ - - - - -
--------- --------- --------- --------- ---------
EBIT >> 3,977 3,137 2,949 (3,170) 6,893
Gain on investments accounted
for by the equity method R$ 105,971 34,856 78,006 38,887 257,720
Net financial result R$ 12,401 11,638 11,109 8,198 43,346
--------- --------- --------- --------- ---------
Income before income tax and social
contribution R$ 122,349 49,631 92,064 43,915 307,959
Income tax and social contribution R$ (2,032) (5,014) (4,773) 2,387 (9,432)
--------- --------- --------- --------- ---------
Net income R$ 120,317 44,617 87,291 46,302 298,527
========= ========= ========= ========= =========
Property, plant and equipment in
operation R$ 119 115 107 107 107
Inventories R$ 1,801 680 291 35 35
Accounts receivable R$ 4,378 651 313 - -
Payable to suppliers and contractors R$ (635) (632) (632) (630) (630)
--------- --------- --------- --------- ---------
Capital employed >> 5,663 814 79 (488) (488)
========= ========= ========= ========= =========
ROCE after taxes (annualized) - - - - -
ROE (annualized) 56.0% 20.5% 48.0% 25.9% 41.7%
41
8.4 - Aluminum Area - MRN (Adjusted and Non-Audited) Attachment I
Information 2001
----------- ----
1st Quarter 2nd Quarter 3rd Quarter Total
----------- ----------- ----------- -----
Quantity sold - external market MT (thousand) 581 886 954 2,421
Quantity sold - internal market MT (thousand) 1,604 1,946 1,806 5,356
---------------------------------------------------------
Quantity sold - total MT (thousand) 2,185 2,832 2,760 7,777
=========================================================
Average sales price -
external market US$ 22.70 21.99 22.16 22.27
Average sales price -
internal market US$ 20.08 20.16 20.37 20.36
Average sales price - total US$ 21.39 21.08 20.99 20.95
Long-term indebtedness, gross US$ 700 - 7,929 7,929
Short-term indebtedness, gross US$ 1,456 1,400 11,594 11,594
---------------------------------------------------------
Total indebtedness, gross US$ 2,156 1,400 19,523 19,523
=========================================================
Stockholders' equity R$ 522,722 577,587 544,062 544,062
=========================================================
Net operating revenues R$ 86,629 124,021 139,255 349,905
Cost of products R$ (38,030) (58,247) (59,943) (156,220)
Other expenses/revenues R$ (2,192) (2,172) (2,075) (6,439)
Depreciation, amortization
and depletion R$ 11,199 11,244 10,520 32,963
---------------------------------------------------------
EBITDA >> 57,606 74,846 87,757 220,209
Depreciation, amortization and
depletion R$ (11,199) (11,244) (10,520) (32,963)
---------------------------------------------------------
EBIT >> 46,407 63,602 77,237 187,246
Gain on investments accounted for by
the equity method R$ (5,540) (2,050) (10,763) (18,353)
Non-operating result R$ (79) 82 133 136
Net financial result R$ 225 (1,895) (2,541) (4,211)
---------------------------------------------------------
Income before income tax and social
contribution R$ 41,013 59,739 64,066 164,818
Income tax and social contribution R$ (3,845) (4,875) (11,692) (20,412)
---------------------------------------------------------
Net income R$ 37,168 54,864 52,374 144,406
=========================================================
Property, plant and equipment in
operation R$ 465,185 505,559 389,425 389,425
Inventories R$ 32,813 29,451 27,650 27,650
Accounts receivable R$ 35,320 49,183 60,467 60,467
Payable to suppliers and contractors R$ (7,542) (14,845) (6,610) (6,610)
Salaries and social charges R$ (3,289) (4,293) (7,431) (7,431)
---------------------------------------------------------
Capital employed >> 522,487 565,055 463,501 463,501
=========================================================
ROCE after taxes (annualized) 32.6% 41.6% 56.6% 48.0%
---------------------------------------------------------
ROE (annualized) 28.4% 38.0% 38.5% 35.4%
Information 2000
----------- ----
1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Total
----------- ----------- ----------- ----------- -----
Quantity sold - external market MT (thousand) 1,092 981 1,107 811 3,991
Quantity sold - internal market MT (thousand) 1,626 1,697 1,913 2,015 7,251
------------------------------------------------------------------------
Quantity sold - total MT (thousand) 2,718 2,678 3,020 2,826 11,242
========================================================================
Average sales price - external market US$ 21.77 22.30 23.65 22.06 22.48
Average sales price - internal market US$ 19.79 20.06 21.25 20.01 20.30
Average sales price - total US$ 20.58 20.88 22.13 21.04 21.18
Long-term indebtedness, gross US$ 2,030 1,400 1,400 700 700
Short-term indebtedness, gross US$ 2,740 2,071 1,952 1,490 1,490
------------------------------------------------------------------------
Total indebtedness, gross US$ 4,770 3,471 3,352 2,190 2,190
========================================================================
Stockholders' equity R$ 506,906 551,060 536,382 541,908 541,908
========================================================================
Net operating revenues R$ 91,155 93,028 111,384 102,966 398,533
Cost of products R$ (44,478) (51,984) (52,646) (50,651) (199,759)
Other expenses/revenues R$ (1,861) (2,273) (2,575) (3,142) (9,851)
Depreciation, amortization and
depletion R$ 11,120 11,113 11,331 11,476 45,040
------------------------------------------------------------------------
EBITDA >> 55,936 49,884 67,494 60,649 233,963
Depreciation, amortization and
depletion R$ (11,120) (11,113) (11,331) (11,476) (45,040)
EBIT >> 44,816 38,771 56,163 49,173 188,923
Gain on investments accounted for
by the equity method R$ 4,061 489 795 (3,231) 2,114
Non-operating result R$ 3,837 13,591 2,920 (2,620) 17,728
Net financial result R$ 2,723 1,877 1,416 1,022 7,038
------------------------------------------------------------------------
Income before income tax and social
contribution R$ 55,437 54,728 61,294 44,344 215,803
Income tax and social contribution R$ (10,787) (10,574) (3,973) (4,228) (29,562)
------------------------------------------------------------------------
Net income R$ 44,650 44,154 57,321 40,116 186,241
========================================================================
Property, plant and equipment in
operation R$ 408,354 400,010 391,244 394,515 394,515
Inventories R$ 21,464 17,961 19,580 21,037 21,037
Accounts receivable R$ 33,586 34,896 43,827 41,491 41,491
Payable to suppliers and contractors R$ (5,771) (7,603) (7,388) (10,437) (10,437)
Salaries and social charges R$ (3,164) (4,264) (4,700) (3,290) (3,290)
------------------------------------------------------------------------
Capital employed >> 454,469 441,000 442,563 443,316 443,316
========================================================================
ROCE after taxes (annualized) 30.0% 25.6% 47.2% 40.6% 35.9%
------------------------------------------------------------------------
ROE (annualized) 35.2% 32.1% 42.7% 29.6% 34.4%
42
Information 2001
----------- ----
1st Quarter 2nd Quarter 3rd Quarter Total
----------- ----------- ----------- -----
Quantity sold - external market MT (thousand) 2 9 7 18
Quantity sold - internal market MT (thousand) 14 17 11 42
------------------------------------------------
Quantity sold - total MT (thousand) 16 26 18 60
================================================
Average sales price - external market US$ 1,733.37 1,585.14 1,554.56 1,590.39
Average sales price - internal market US$ 2,155.46 2,047.69 1,934.35 2,054.36
Average sales price - total US$ 2,107.06 1,882.41 1,784.68 1,916.59
Long-term indebtedness, gross US$ 2,568 2,273 2,598 2,598
Short-term indebtedness, gross US$ 33,619 9,700 939 939
------------------------------------------------
Total indebtedness, gross US$ 36,187 11,973 3,537 3,537
================================================
Long-term indebtedness, net US$ 2,568 2,273 2,598 2,598
Short-term indebtedness, net US$ 33,174 1,949 -- --
------------------------------------------------
Total indebtedness, net US$ 35,742 4,222 2,598 2,598
================================================
Stockholders' equity R$ 190,016 205,881 218,141 218,141
================================================
Net operating revenues R$ 59,652 98,954 77,239 235,845
Cost of products R$ (40,859) (68,267) (54,855) (163,981)
Other expneses/revenues R$ (5,104) (11,433) 1,814 (14,723)
Depreciation, amortization and
depletion R$ 3,510 3,027 3,912 10,449
------------------------------------------------
EBITDA >> 17,199 22,281 28,110 67,590
Depreciation, amoritzation and
depletion R$ (3,510) (3,027) (3,912) (10,449)
------------------------------------------------
EBIT >> 13,689 19,254 24,198 57,141
Non-operating result R$ 49 (1,392) 13 (1,330)
Net financial result R$ (3,079) 3,513 (8,500) (8,066)
------------------------------------------------
Income before income tax and social
contribution R$ 10,659 21,375 15,711 47,745
Income tax and social contribution R$ (2,597) (5,510) (3,451) (11,558)
------------------------------------------------
Net income R$ 8,062 15,865 12,260 36,187
================================================
Property, plant and equipment in
operation R$ 143,532 142,921 100,497 100,497
Inventories R$ 81,215 66,065 66,063 66,063
Accounts receivable R$ 36,673 40,020 32,886 32,886
Payable to suppliers and contractors R$ (10,176) (10,413) (8,534) (8,534)
Salaries and social changes R$ (3,749) (3,294) (3,983) (3,983)
------------------------------------------------
Capital employed >> 247,495 235,299 186,929 186,929
================================================
ROCE after taxes (annualized) 17.9% 23.4% 44.4% 32.5%
------------------------------------------------
ROE (annualized) 17.0% 30.8% 22.5% 22.1%
Information 2000
----------- ----
1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Total
----------- ---------- ----------- ----------- -----
Quantity sold - external market MT (thousand) 1 10 10 9 30
Quantity sold - internal market MT (thousand) 11 15 14 16 56
-------------------------------------------------------------
Quantity sold - total MT (thousand) 12 25 24 25 86
=============================================================
Average sales price - external market US$ 1,851.23 1,644.13 1,644.19 1,602.09 1,638.44
Average sales price - internal market US$ 2,147.88 2,035.89 2,044.72 2,071.30 2,070.21
Average sales price - total US$ 2,123.16 1,912.84 1,877.83 1,844.00 1,912.41
Long-term indebtedness, gross US$ 4,399 3,931 3,493 3,014 3,014
Short-term indebtedness, gross US$ 18,045 15,988 23,189 26,325 26,325
-------------------------------------------------------------
Total indebtedness, gross US$ 22,444 19,919 26,682 29,339 29,339
=============================================================
Long-term indebtedness, net US$ 4,399 3,931 3,493 3,014 3,014
Short-term indebtedness, net US$ 14,751 9,709 22,190 25,707 25,707
-------------------------------------------------------------
Total indebtedness, net US$ 19,150 13,640 25,683 28,721 28,721
=============================================================
Stockholders' equity R$ 165,029 173,578 181,494 181,960 181,960
=============================================================
Net operating revenues R$ 42,581 74,950 75,265 78,381 271,177
Cost of products R$ (25,919) (58,278) (55,626) (59,011) (198,834)
Other expneses/revenues R$ (665) (4,481) (5,359) (2,768) (13,273)
Depreciation, amortization and
depletion R$ 19,361 15,468 17,736 20,258 72,823
-------------------------------------------------------------
EBITDA >> 35,358 27,659 32,016 36,860 131,893
Depreciation, amoritzation and
depletion R$ (19,361) (15,468) (17,736) (20,258) (72,823)
-------------------------------------------------------------
EBIT >> 15,997 12,191 14,280 16,602 59,070
Non-operating result R$ 124 958 (750) (168) 164
Net financial result R$ (5,410) 3,595 (1,138) (757) (3,710)
-------------------------------------------------------------
Income before income tax and social
contribution R$ 10,711 16,744 12,392 15,677 55,524
Income tax and social contribution R$ (3,809) (3,652) (4,478) (2,755) (14,694)
-------------------------------------------------------------
Net income R$ 6,902 13,092 7,914 12,922 40,830
=============================================================
Property, plant and equipment in
operation R$ 114,350 111,842 110,611 103,564 103,564
Inventories R$ 62,643 58,677 52,889 59,909 59,909
Accounts receivable R$ 26,954 6,633 50,712 49,613 49,613
Payable to suppliers and contractors R$ (17,176) (20,952) (14,561) (12,491) (12,491)
Salaries and social changes R$ (1,934) (2,445) (2,746) (2,152) (2,152)
-------------------------------------------------------------
Capital employed >> 184,837 153,755 196,905 198,443 198,443
=============================================================
ROCE after taxes (annualized) 26.4% 22.2% 19.9% 27.9% 22.4%
-------------------------------------------------------------
ROE (annualized) 16.7% 30.2% 17.4% 28.4% 22.4%
43
8.6 - Pulp and Paper Area - BAHIA SUL (Adjusted and Non-Audited) Attachment I
1st* 2nd* 3rd* 4th 2001 1st 2nd 3rd 4th 2000
Information Qtr Qtr Qtr Qtr Total Qtr Qtr Qtr Qtr Total
----------- --- --- --- --- ----- --- --- --- --- -----
PULP:
Quantity sold -
external market MT 63,684 -- 63,684 73,827 76,433 86,420 73,658 310,338
Quantity sold -
internal market MT 14,807 -- 14,807 17,235 15,565 13,533 10,010 56,343
--------------------------------------------------------------------------------------------------------
Quantity sold -
total MT 78,491 -- -- -- 78,491 91,062 91,998 99,953 83,668 366,681
========================================================================================================
Average sales price US$ 578.00 -- 578.00 576.00 612.00 645.00 637.00 618.00
PAPER:
Quantity sold -
external market MT 11,532 -- 11,532 27,239 25,384 17,047 7,613 77,283
Quantity sold -
internal market MT 34,481 -- 34,481 26,331 33,401 40,678 33,695 134,105
--------------------------------------------------------------------------------------------------------
Quantity sold -
total MT 46,013 -- -- -- 46,013 53,570 58,785 57,725 41,308 211,388
========================================================================================================
Average sales price US$ 796.00 -- 796.00 793.00 814.00 848.00 844.00 824.00
Long-term
indebtedness, net US$ 279,103 -- 279,103 322,971 307,944 297,115 283,125 283,125
Short-term
indebtedness, net US$ 96,490 -- 96,490 178,074 148,858 132,590 112,240 112,240
--------------------------------------------------------------------------------------------------------
Total indebtedness,
net US$ 375,593 -- -- -- 375,593 501,045 456,802 429,705 395,365 395,365
========================================================================================================
Stockholders'
equity R$ 1,406,199 -- 1,406,199 1,290,533 1,337,270 1,381,821 1,423,107 1,423,107
========================================================================================================
Net operating
revenues R$ 167,653 -- 167,653 167,051 191,496 214,079 161,634 734,260
Cost of products R$ (79,128) -- (79,128) (74,450) (81,781) (91,296) (74,190) (321,717)
Other expenses/
revenues R$ (16,586) -- (16,586) (13,686) (14,605) (15,402) (18,641) (62,334)
Depreciation,
amortization and
depletion R$ 18,723 -- 18,723 20,528 20,991 65,159 19,026 125,704
--------------------------------------------------------------------------------------------------------
EBITDA >> 90,662 -- 90,662 99,443 116,101 172,540 87,829 475,913
Depreciation,
amortization and
depletion R$ (18,723) -- (18,723) (20,528) (20,991) (65,159) (19,026) (125,704)
--------------------------------------------------------------------------------------------------------
EBIT >> 71,939 -- 71,939 78,915 95,110 107,381 68,803 350,209
Non-operating result R$ 514 -- 514 (74) (36) 67 (161) (204)
Net financial result R$ (63,465) -- (63,465) (15,040) (44,064) (41,024) (40,244) (140,372)
--------------------------------------------------------------------------------------------------------
Income before income
tax and social
contribution R$ 8,988 -- -- -- 8,988 63,801 51,010 66,424 28,398 209,633
Income tax and social
contribution R$ (919) -- (919) 25 (4,273) (2,195) 12,610 6,167
--------------------------------------------------------------------------------------------------------
Net income R$ 8,069 -- -- -- 8,069 63,826 46,737 64,229 41,008 215,800
========================================================================================================
Property, plant
and equipment
in operation R$ 1,808,898 -- 1,808,898 1,827,505 1,817,068 1,810,406 1,814,966 1,814,966
Inventories R$ 96,875 -- 96,875 64,845 71,281 65,597 80,329 80,329
Accounts receivable R$ 110,275 -- 110,275 92,184 97,011 96,611 96,583 96,583
Payable to suppliers
and contractors R$ 22,348 -- 22,348 (18,352) (19,840) (24,792) (21,274) (21,274)
Salaries and social
charges R$ 8,678 -- 8,678 (7,530) (10,545) (12,040) (9,977) (9,977)
--------------------------------------------------------------------------------------------------------
Capital employed >> 2,047,074 -- -- -- 2,047,074 1,958,652 1,954,975 1,935,782 1,960,627 1,960,627
========================================================================================================
ROCE after taxes
(annualized) 13.9% 0.0% 0.0% 0.0% 13.9% 16.1% 18.6% 21.7% 16.6% 18.2%
--------------------------------------------------------------------------------------------------------
ROE (annualized) 2.3% 0.0% 0.0% 0.0% 2.3% 19.8% 14.0% 18.6% 11.5% 15.2%
---------
* Participation sold
44
8.7 - Pulp and Paper Area - CENIBRA (Adjusted and Non-Audited) Attachment I
1st 2nd 2001 1st 2nd 3rd 4th 2000
Information Qtr Qtr Total Qtr Qtr Qtr Qtr Total
----------- --- --- ----- --- --- --- --- -----
PULP:
Quantity sold -
external market MT 148,042 199,916 347,958 168,228 193,284 180,612 188,836 730,960
Quantity sold -
internal market MT 16,142 12,679 28,821 14,664 12,815 16,559 13,744 57,782
-------------------------------------------------------------------------------------------------
Quantity sold - total MT 164,184 212,595 376,779 182,892 206,099 197,171 202,580 788,742
==================================================================================================
Average sales price US$ 498.80 349.74 414.69 534.30 589.50 620.03 606.36 587.54
Long-term indebtedness,
gross US$ 52,948 52,350 52,350 273,310 230,363 183,187 52,917 52,917
Short-term indebtedness,
gross US$ 180,198 177,973 177,973 256,221 248,735 218,172 205,291 205,291
-------------------------------------------------------------------------------------------------
Total indebtedness, gross US$ 233,146 230,323 230,323 529,531 479,098 401,359 258,208 258,208
==================================================================================================
Long-term indebtedness, net US$ 180,198 177,973 177,973 256,221 248,735 218,172 205,291 205,291
Short-term indebtedness, net US$ 22,071 48,351 48,351 200,768 143,136 127,788 50,272 50,272
-------------------------------------------------------------------------------------------------
Total indebtedness, net US$ 202,269 226,324 226,324 456,989 391,871 345,960 255,563 255,563
==================================================================================================
Stockholders' equity R$ 580,068 578,679 578,679 470,672 530,919 594,462 609,610 609,610
==================================================================================================
Net operating revenues R$ 168,993 167,642 336,635 169,774 218,554 216,365 233,994 838,687
Cost of products R$ (68,805) (91,053) (159,858) (68,410) (73,239) (67,998) (80,779) (290,426)
Other expenses/revenues R$ (28,018) (25,135) (53,153) (26,132) (30,665) (33,338) (58,309) (148,444)
Depreciation, amortization
and depletion R$ 25,889 23,789 49,678 26,033 23,073 25,158 27,118 101,382
-------------------------------------------------------------------------------------------------
EBITDA >> 98,059 75,243 173,302 101,265 137,723 140,187 122,024 501,199
Depreciation, amortization
and depletion R$ (25,889) (23,789) (49,678) (26,033) (23,073) (25,158) (27,118) (101,382)
-------------------------------------------------------------------------------------------------
EBIT
for by the equity method R$ (2,709) (13,304) (16,013) 738 (1,579) 3,011 (180) 1,990
Non-operating result R$ 638 2,898 3,536 207 1,125 1,314 1,670 4,316
Net financial result R$ (38,677) (30,837) (69,514) (114) (32,432) (23,158) (37,013) (92,717)
-------------------------------------------------------------------------------------------------
Income before income tax
and social contribution R$ 31,422 10,211 41,633 76,063 81,764 96,196 59,383 313,406
Income tax and social
contribution R$ (12,767) (1,304) (14,071) (26,408) (21,519) (32,651) (9,194) (89,772)
-------------------------------------------------------------------------------------------------
Net income R$ 18,655 8,907 27,562 49,655 60,245 63,545 50,189 223,634
==================================================================================================
Property, plant and
equipment in operation R$ 825,615 847,833 847,833 801,058 790,222 781,586 834,224 834,224
Inventories R$ 82,233 79,180 79,180 48,180 46,612 60,702 66,236 66,236
Accounts receivable R$ 132,492 142,453 142,453 223,807 209,852 232,614 153,837 153,837
Payable to suppliers and
contractors R$ (26,773) (32,861) (32,861) (16,263) (18,167) (18,920) (23,942) (23,942)
Salaries and social charges R$ (9,271) (10,886) (10,886) (6,216) (9,932) (13,951) (13,112) (13,112)
-------------------------------------------------------------------------------------------------
Capital employed >> 1,004,296 1,025,719 1,025,719 1,050,566 1,018,587 1,042,031 1,017,243 1,017,243
==================================================================================================
ROCE after taxes (annualized) 23.7% 19.6% 21.4% 18.6% 36.6% 31.6% 33.7% 30.5%
ROE (annualized) 12.9% 6.2% 9.5% 42.2% 45.4% 42.8% 32.9% 36.7%
45
8.8 - Iron Ore Area - SAMITRI (Adjusted and Non-Audited) Attachment I
-----------------------------------------------------------------------------------------------------------------------------
Information 2001 2000
-----------------------------------------------------------------------------------------------------------------------------
1st 2nd 3rd 1st 2nd 3rd 4th
Quarter Quarter Quarter Total Quarter Quarter Quarter Quarter Total
---------------------------------------------------------------------------------------------
Quantity sold - MT
external market (thousand) 3,573 1,651 -- 5,224 2,725 2,911 2,723 1,971 10,330
Quantity sold -
internal market - MT
CVRD (thousand) 981 4,143 -- 5,124 1,059 983 947 847 3,836
-------------------------------------------------------------------------------------------
Quantity sold - MT
total (thousand) 4,554 5,794 -- 10,348 3,784 3,894 3,670 2,818 14,166
===========================================================================================
Average sales price -
external market US$ 14.03 1 4.96 -- 14.33 14.63 15.89 15.83 13.51 15.01
Average sales price -
internal market US$ 6.46 4.89 -- 5.19 6.63 6.18 7.85 6.10 6.67
Average sales price -
total US$ 12.40 7.76 -- 9.80 12.39 13.46 13.77 11.28 12.81
Long-term
indebtedness,
gross US$ 11,078 8,646 -- -- 23,821 19,688 16,754 13,681 13,681
Short-term
indebtedness,
gross US$ 21,354 24,475 18,565 18,565 54,623 58,499 48,268 53,521 53,521
-------------------------------------------------------------------------------------------
Total
indebtedness,
gross US$ 32,432 33,121 18,565 18,565 78,444 78,187 65,022 67,202 67,202
===========================================================================================
Long-term
indebtedness,
net US$ 11,078 8,646 -- -- 23,821 19,688 16,754 13,681 13,681
Short-term
indebtedness,
net US$ 19,526 24,111 10,576 10,576 38,548 50,010 48,079 42,515 42,515
-------------------------------------------------------------------------------------------
Total indebtedness,
net US$ 30,604 32,757 10,576 10,576 62,369 69,698 64,833 56,196 56,196
===========================================================================================
Stockholders'
equity R$ 529,928 552,460 521,197 521,197 859,686 512,147 529,128 521,213 521,213
===========================================================================================
Net operating
revenues R$ 111,931 92,194 4,554 208,679 80,414 91,896 89,777 59,699 321,786
Cost of products R$ (41,737) (55,146) - (96,883) (29,795) (38,047) (33,679) (23,240) (124,761)
Other expenses/
revenues R$ (53,279) (24,389) (3,198) (80,866) (41,708) (47,491) (46,130) (21,197) 156,526)
Depreciation,
amortization and
depletion R$ 6,587 11,467 5,020 23,074 6,154 5,993 5,204 4,149 21,500
-------------------------------------------------------------------------------------------
EBITDA 23,502 24,126 6,376 54,004 15,065 12,351 15,172 19,411 61,999
Depreciation,
amortization and
depletion R$ (6,587) (11,467) (5,020) 23,074) (6,154) (5,993) (5,204) (4,149) (21,500)
EBIT 16,915 12,659 1,356 30,930 8,911 6,358 9,968 15,262 40,499
Other expenses/
revenues - non cash -- -- -- -- (509) (48,966) -- (13,798) (63,273)
Gain on investments
accounted for by
the equity method R$ 8,308 19,540 (27,665) 655 18,135 (33,428) 14,014 (3,048) (4,327)
Non-operating
result R$ (3,153) 33 (453) (3,573) 99 (644) (156) (2,599) (3,300)
Net financial
result R$ (10,815) (6,402) (6,665) (23,882) (3,825) (9,325) (6,635) (11,543) (31,328)
-------------------------------------------------------------------------------------------
Income before
income tax and
social contribution R$ 11,255 25,830 (32,945) 4,140 22,811 (86,005) 17,191 (15,726) (61,729)
Income tax
and social
contribution R$ (2,005) (3,298) 1,681 (3,622) (2,448) 446 (210) 7,811 5,599
-------------------------------------------------------------------------------------------
Net income R$ 9,250 22,532 (31,264) 518 20,363 (85,559) 16,981 (7,915) (56,130)
===========================================================================================
Property, plant
and equipment in
operation R$ 287,385 289,865 284,844 284,844 328,569 305,417 302,312 288,862 288,862
Inventories R$ 48,528 208 -- -- 48,746 46,129 49,292 55,791 55,791
Accounts
receivable R$ 31,743 69,008 33,458 33,458 16,596 16,063 16,665 20,202 20,202
Payable to
suppliers and
contractors R$ (30,879) (30,585) (64,663) (64,663) (18,698) (17,535) (23,620) (21,398) (21,398)
Salaries and
social charges R$ (5,621) (5,275) (4,558) (4,558) (5,237) (10,359) (8,346) (7,705) (7,705)
-------------------------------------------------------------------------------------------
Capital employed 331,156 323,221 249,081 249,081 369,976 339,715 336,303 335,752 335,752
===========================================================================================
ROCE after taxes
(annualized) 18.0% 11.6% 4.9% 14.6% 7.0% 8.0% 11.6% 27.5% 13.7%
-------------------------------------------------------------------------------------------
ROE (annualized) 7.0% 16.3% (24.0%) 0.1% 9.5% (66.8%) 12.8% (6.1%) (10.8%)
46
8.9 - Iron Ore Area - SAMARCO (Adjusted and Non-Audited) Attachment I
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
Information 2001 2000
------------------------------------------------------------------------------------------------------------------------------------
1st 2nd 3rd 1st 2nd 3rd 4th
Quarter Quarter Quarter Total Quarter Quarter Quarter Quarter Total
--------------------------------------------------------------------------------------------------
Quantity sold - total MT (thousand) 3,399 2,919 2,312 8,630 3,496 3,500 3,331 4,295 14,622
==================================================================================================
Average sales price -
total US$ 28.83 30.00 29.44 29.58 27.74 29.13 29.34 31.03 29.40
Long-term indebtedness,
gross US$ 166,257 132,655 119,394 119,394 171,445 136,486 167,716 146,208 146,208
Short-term indebtedness,
gross US$ 188,795 164,003 158,204 158,204 180,425 185,910 185,191 176,740 176,740
--------------------------------------------------------------------------------------------------
Total indebtedness,
gross US$ 355,052 296,658 277,598 277,598 351,870 322,396 352,907 322,948 322,948
==================================================================================================
Long-term indebtedness,
net US$ 126,810 132,655 119,394 119,394 171,445 136,486 167,716 146,208 146,208
Short-term indebtedness,
net US$ 170,389 142,181 139,989 139,989 164,077 165,976 157,756 176,597 176,597
--------------------------------------------------------------------------------------------------
Total indebtedness, net US$ 297,199 274,836 259,383 259,383 335,522 302,462 325,472 322,805 322,805
==================================================================================================
Stockholders' equity R$ 4 18,290 447,693 399,275 399,275 1,017,316 466,699 491,355 463,521 463,521
==================================================================================================
Net operating revenues R$ 197,904 190,671 166,905 555,480 170,222 182,697 160,595 242,749 756,263
Cost of products R$ (95,771) (80,978) (73,499) (250,248) (91,554) (98,364) (77,796) (135,214) (402,928)
Other expenses/revenues R$ (23,789) (35,699) (4,129) (63,617) (20,826) (17,454) (2,160) (31,031) (71,471)
Depreciation, amortization
and depletion R$ 15,872 14,445 (7,143) 23,174 15,565 15,433 14,292 13,314 58,604
--------------------------------------------------------------------------------------------------
EBITDA --------------------> 94,216 88,439 82,134 264,789 73,407 82,312 94,931 89,818 340,468
Depreciation, amortization
and depletion R$ (15,872) (14,445) 7,143 (23,174) (15,565) (15,433) (14,292) (13,314) (58,604)
--------------------------------------------------------------------------------------------------
EBIT --------------------> 78,344 73,994 89,277 241,615 57,842 66,879 80,639 76,504 281,864
Other expenses/revenues -
non cash - - - - (2,155) (66,359) (16,130) 4,218 (80,426)
Gain on investments
accounted for by the
equity method R$ (3,570) (4,541) (9,265) (17,376) (2,673) (8,804) (358) (2,559) (14,394)
Non-operating result R$ - 16 (19,440) (19,424) 858 1,510 73 (175) 2,266
Net financial result R$ (63,754) (32,350) (111,084) (207,188) (14,390) (84,475) (25,983) (43,544) (168,392)
--------------------------------------------------------------------------------------------------
Income before income tax
and social contribution R$ 11,020 37,119 (50,512) (2,373) 39,482 (91,249) 38,241 34,444 20,918
Income tax and social
contribution R$ (3,324) (7,657) 2,093 (8,888) (7,652) 14,469 (6,939) (9,923) (10,045)
--------------------------------------------------------------------------------------------------
Net income R$ 7,696 29,462 (48,419) (11,261) 31,830 (76,780) 31,302 24,521 10,873
==================================================================================================
Property, plant and
equipment in operation R$ 825,763 823,100 823,902 823,902 1,449,490 964,014 954,078 830,605 830,605
Inventories R$ 75,612 102,738 119,144 119,144 49,292 55,353 64,570 60,184 60,184
Accounts receivable R$ 153,749 147,026 150,580 150,580 85,474 63,688 130,408 184,713 184,713
Payable to suppliers and
contractors R$ (13,955) (26,813) (21,596) (21,596) (24,107) (23,326) (19,474) (23,250) (23,250)
Salaries and social
charges R$ (19,266) (17,003) (15,472) (15,472) (7,856) (18,102) (17,091) (16,521) (16,521)
--------------------------------------------------------------------------------------------------
Capital employed ----------> 1,021,903 1,029,048 1,056,558 1,056,558 1,552,293 1,041,627 1,112,491 1,035,731 1,035,731
==================================================================================================
ROCE after taxes
(annualized) 29.4% 25.8% 34.6% 29.4% 12.9% 31.2% 26.5% 25.7% 26.2%
--------------------------------------------------------------------------------------------------
ROE (annualized) 7.4% 26.3% (48.5%) (3.8%) 12.5% (65.8%) 25.5% 21.2% 2.3%
--------------------------------------------------------------------------------------------------
47
8.10 - Iron Ore Area - FERTECO (Adjusted and Non-Audited) Attachment I
---------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------
Information 2001
---------------------------------------------------------------------------------------
1st 2nd 3rd 4th
Quarter Quarter Quarter Quarter Total
-----------------------------------------------------
Quantity sold - external MT
market (thousand) - 3,955 3,556 7,511
Quantity sold - internal MT
market (thousand) - 598 455 1,053
-----------------------------------------------------
Quantity sold - total MT
(thousand) - 4,553 4,011 - 8,564
=====================================================
Average sales price -
external market US$ - 16.50 17.50 17.05
Average sales price -
internal market US$ - 5.35 14.72 9.40
Average sales price -
total US$ - 15.16 17.18 16.11
Long-term indebtedness,
gross US$ - 101,394 103,737 103,737
Short-term indebtedness,
gross US$ - 86,257 72,200 72,200
-----------------------------------------------------
Total indebtedness,
gross US$ - 187,651 175,937 - 175,937
=====================================================
Long-term indebtedness,
net US$ - 101,394 103,737 103,737
Short-term indebtedness,
net US$ - 85,250 71,620 71,620
-----------------------------------------------------
Total indebtedness, net US$ - 186,644 175,357 - 175,357
=====================================================
Stockholders' equity R$ - 225,625 204,610 204,610
=====================================================
Net operating revenues R$ - 158,518 170,286 328,804
Cost of products R$ - (121,815) (126,972) (248,787)
Other expenses/revenues R$ - 5,315 (14,355) (9,040)
Depreciation, amortization
and depletion R$ - 2,235 3,375 5,610
-----------------------------------------------------
EBITDA --------------------> - 44,253 32,334 76,587
Depreciation, amortization
and depletion R$ - (2,235) (3,375) (5,610)
EBIT --------------------> - 42,018 28,959 70,977
Gain on investments
accounted for by the
equity method 286 (5,400) (5,114)
Non-operating result R$ - (107) (12,281) (12,388)
Net financial result R$ - (19,170) (44,417) (63,587)
-----------------------------------------------------
Income before income tax
and social contribution R$ - 23,027 (33,139) - (10,112)
Income tax and social
contribution R$ - (5,223) 12,268 7,045
-----------------------------------------------------
Net income R$ - 17,804 (20,871) - (3,067)
=====================================================
Property, plant and
equipment in operation R$ - 396,583 397,803 397,803
Inventories R$ - 77,593 85,216 85,216
Accounts receivable R$ - 144,005 199,841 199,841
Payable to suppliers and
contractors R$ - (40,656) (26,238) (26,238)
Salaries and social
charges R$ - (645) (835) (835)
-----------------------------------------------------
Capital employed ----------> - 576,880 655,787 - 655,787
=====================================================
ROCE after taxes - 38.3% 25.1% 0.0% 28.6%
-----------------------------------------------------
ROE - 47.3% (40.8%) 0.0% (3.6%)
-----------------------------------------------------
48
8.11 - Pelletizing Affiliates - HISPANOBRAS (Adjusted and Non-Audited) Attachment I
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
Information 2001 2000
------------------------------------------------------------------------------------------------------------------------------------
1st 2nd 3rd 1st 2nd 3rd 4th
Quarter Quarter Quarter Total Quarter Quarter Quarter Quarter Total
--------------------------------------------------------------------------------------------------
Quantity sold - external MT
market (thousand) 312 336 422 1,070 335 335 293 480 1,443
Quantity sold - internal MT
market - CVRD (thousand) 520 560 460 1,540 640 400 850 600 2,490
--------------------------------------------------------------------------------------------------
Quantity sold - total MT (thousand) 832 896 882 2,610 975 735 1,143 1,080 3,933
==================================================================================================
Average sales price -
external market US$ 30.80 30.79 32.84 31.60 28.91 29.01 33.98 30.91 30.63
Average sales price -
internal market US$ 30.57 31.55 32.44 31.44 29.00 29.34 31.49 31.59 30.53
Average sales price -
total US$ 30.65 31.26 32.64 31.52 28.97 29.19 32.13 31.28 30.56
--------------------------------------------------------------------------------------------------
Stockholders' equity R$ 73,036 76,910 85,853 85,853 71,751 75,494 76,476 68,461 68,461
==================================================================================================
Net operating revenues R$ 52,089 64,459 73,261 189,809 49,988 38,562 69,784 65,337 223,671
Cost of products R$ (44,565) (53,537) (60,310) (158,412) (43,800) (34,474) (55,159) (52,989) (186,422)
Other expenses/revenues R$ (502) (487) 1,274 285 (395) (436) (503) (649) (1,983)
Depreciation, amortization
and depletion R$ 2,377 2,378 2,376 7,131 2,272 2,335 2,368 2,379 9,354
--------------------------------------------------------------------------------------------------
EBITDA --------------------> 9,399 12,813 16,601 38,813 8,065 5,987 16,490 14,078 44,620
Depreciation, amortization
and depletion R$ (2,377) (2,378) (2,376) (7,131) (2,272) (2,335) (2,368) (2,379) (9,354)
--------------------------------------------------------------------------------------------------
EBIT --------------------> 7,022 10,435 14,225 31,682 5,793 3,652 14,122 11,699 35,266
Non-operating result R$ (1,471) (2,537) (2,622) (6,630) 162 371 (5,213) (2,778) (7,458)
Net financial result R$ 2,460 833 4,127 7,420 (513) 2,230 865 1,928 4,510
--------------------------------------------------------------------------------------------------
Income before income tax
and social contribution R$ 8,011 8,731 15,730 32,472 5,442 6,253 9,774 10,849 32,318
Income tax and social
contribution R$ (2,161) (3,419) (5,347) (10,927) (2,101) (2,510) (4,026) (2,976) (11,613)
--------------------------------------------------------------------------------------------------
Net income R$ 5,850 5,312 10,383 21,545 3,341 3,743 5,748 7,873 20,705
==================================================================================================
Property, plant and
equipment in operation R$ 33,955 31,665 29,377 29,377 41,656 47,175 38,020 35,738 35,738
Inventories R$ 11,890 11,703 18,019 18,019 10,255 21,088 15,638 12,675 12,675
Accounts receivable R$ 48,444 55,767 70,208 70,208 45,726 25,315 46,669 53,878 53,878
Payable to suppliers
and contractors R$ (34,095) (40,876) (54,066) (54,066) (43,481) (36,498) (35,865) (36,751) (36,751)
Salaries and social
charges R$ (93) (76) (210) (210) (162) (111) (150) 380 380
--------------------------------------------------------------------------------------------------
Capital employed ----------> 60,101 58,183 63,328 63,328 53,994 56,969 64,312 65,920 65,920
==================================================================================================
ROCE after taxes
(annualized) 32.4% 48.2% 56.1% 43.7% 27.4% 8.0% 62.8% 52.9% 35.9%
--------------------------------------------------------------------------------------------------
ROE (annualized) 32.0% 27.6% 48.4% 33.5% 18.6% 19.8% 30.1% 46.0% 30.2%
--------------------------------------------------------------------------------------------------
49
8.12 - Pelletizing Affiliates - ITABRASCO (Adjusted and Non-Audited) Attachment I
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
Information 2001 2000
------------------------------------------------------------------------------------------------------------------------------------
1st 2nd 3rd 1st 2nd 3rd 4th
Quarter Quarter Quarter Total Quarter Quarter Quarter Quarter Total
--------------------------------------------------------------------------------------------------
Quantity sold - external MT
market (thousand) 497 579 325 1,401 844 757 664 539 2,804
Quantity sold - internal MT
market - CVRD (thousand) 278 196 221 695 - 206 263 213 682
--------------------------------------------------------------------------------------------------
Quantity sold - total MT (thousand) 775 775 546 2,096 844 963 927 752 3,486
==================================================================================================
Average sales price -
external market US$ 31.13 31.96 31.80 31.60 29.39 32.58 31.10 31.11 30.99
Average sales price -
internal market US$ 31.29 32.66 31.50 31.73 0.00 31.43 31.27 31.33 31.34
Average sales price -
total US$ 31.19 31.62 31.69 31.64 29.39 32.01 31.15 31.22 30.98
Long-term indebtedness,
gross US$ - - - - - - - - -
Short-term indebtedness,
gross US$ 503 - 407 407 592 575 561 556 556
--------------------------------------------------------------------------------------------------
Total indebtedness, gross US$ 503 - 407 407 592 575 561 556 556
==================================================================================================
Stockholders' equity R$ 46,768 65,160 68,571 68,571 54,123 49,461 51,762 45,221 45,221
==================================================================================================
Net operating revenues R$ 48,950 56,985 59,432 165,367 44,227 56,048 52,346 45,661 198,282
Cost of products R$ (45,783) (44,756) (52,288) (142,827) (40,209) (48,482) (47,332) (34,595) (170,618)
Other expenses/revenues R$ (1,086) (1,379) 2,177 (288) (799) (1,006) (805) (950) (3,560)
Depreciation, amortization
and depletion R$ 288 309 338 935 221 271 270 1,032 1,794
--------------------------------------------------------------------------------------------------
EBITDA --------------------> 2,369 11,159 9,659 23,187 3,440 6,831 4,479 11,148 25,898
Depreciation, amortization
and depletion R$ (288) (309) (338) (935) (221) (271) (270) (1,032) (1,794)
--------------------------------------------------------------------------------------------------
EBIT --------------------> 2,081 10,850 9,321 22,252 3,219 6,560 4,209 10,116 24,104
Non-operating result R$ (12) 6,437 15 6,440 250 (31) 67 (5,236) (4,950)
Net financial result R$ 2,770 1,808 2,369 6,947 (774) 1,518 232 2,707 3,683
--------------------------------------------------------------------------------------------------
Income before income tax
and social contribution R$ 4,839 19,095 11,705 35,639 2,695 8,047 4,508 7,587 22,837
Income tax and social
contribution R$ (3,288) (707) (7,231) (11,226) (2,053) (3,577) (2,642) (494) (8,766)
--------------------------------------------------------------------------------------------------
Net income R$ 1,551 18,388 4,474 24,413 642 4,470 1,866 7,093 14,071
==================================================================================================
Property, plant and
equipment in operation R$ 10,883 10,556 10,228 10,228 8,724 8,743 8,488 8,234 8,234
Inventories R$ 11,516 10,170 20,477 20,477 14,249 11,442 7,648 9,617 9,617
Accounts receivable R$ 43,384 35,920 45,389 45,389 23,194 36,213 40,485 40,968 40,968
Payable to suppliers
and contractors R$ (33,146) (36,645) (51,259) (51,259) (39,331) (33,915) (31,673) (29,394) (29,394)
Salaries and social
charges R$ (197) (78) (189) (189) (174) (187) (179) (220) (220)
--------------------------------------------------------------------------------------------------
Capital employed ----------> 32,440 19,923 24,646 24,646 6,662 22,296 24,769 29,205 29,205
==================================================================================================
ROCE after taxes
(annualized) (14.9%) 203.6% 33.9% 59.6% 70.0% 53.5% 25.3% 131.8% 52.5%
--------------------------------------------------------------------------------------------------
ROE (annualized) 13.3% 112.9% 26.1% 47.5% 4.7% 36.1% 14.4% 62.7% 31.1%
--------------------------------------------------------------------------------------------------
50
8.13 - Pelletizing Affiliates - KOBRASCO (Adjusted and Non-Audited) Attachment I
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
Information 2001 2000
------------------------------------------------------------------------------------------------------------------------------------
1st 2nd 3rd 1st 2nd 3rd 4th
Quarter Quarter Quarter Total Quarter Quarter Quarter Quarter Total
--------------------------------------------------------------------------------------------------
Quantity sold - external MT
market (thousand) 561 523 493 1,577 861 1,024 973 824 3,682
Quantity sold - internal MT
market - CVRD (thousand) 420 489 630 1,539 224 39 - 470 733
--------------------------------------------------------------------------------------------------
Quantity sold - total MT (thousand) 981 1,012 1,123 3,116 1,085 1,063 973 1,294 4,415
==================================================================================================
Average sales price -
external market US$ 30.04 31.38 33.26 31.82 28.95 30.25 29.77 30.68 29.92
Average sales price -
internal market US$ 31.80 31.29 29.77 30.84 29.10 31.58 - 31.52 30.78
Average sales price -
total US$ 30.79 31.34 31.19 31.32 28.98 30.30 29.77 30.95 30.05
Long-term indebtedness,
gross US$ 127,269 100,893 119,766 119,766 45,298 125,750 189,229 126,662 126,662
Short-term indebtedness,
gross US$ 1,173 27,114 9,148 9,148 117,160 61,164 63,023 617 617
--------------------------------------------------------------------------------------------------
Total indebtedness, gross US$ 128,442 128,007 128,914 128,914 162,458 186,914 252,252 127,279 127,279
==================================================================================================
Long-term indebtedness,
net US$ 122,728 100,893 119,766 119,766 45,298 125,001 188,794 122,032 122,032
Short-term indebtedness,
net US$ - 20,346 - - 75,784 - - - -
--------------------------------------------------------------------------------------------------
Total indebtedness, net US$ 122,728 121,239 119,766 119,766 121,082 125,001 188,794 122,032 122,032
==================================================================================================
Stockholders' equity R$ 39,224 32,574 (39,435) (39,435) 53,654 54,868 53,590 51,208 51,208
==================================================================================================
Net operating revenues R$ 61,210 70,414 90,720 222,344 55,259 57,655 51,639 76,017 240,570
Cost of products R$ (46,868) (56,123) (68,213) (171,204) (44,187) (44,259) (40,939) (59,070) (188,455)
Other expenses/revenues R$ (734) (755) (781) (2,270) (1,069) (1,352) (450) 442 (2,429)
Depreciation, amortization
and depletion R$ 2,225 2,226 2,221 6,672 2,229 2,227 2,228 2,224 8,908
--------------------------------------------------------------------------------------------------
EBITDA ------------------> 15,833 15,762 23,947 55,542 12,232 14,271 12,478 19,613 58,594
Depreciation, amortization
and depletion R$ (2,225) (2,226) (2,221) (6,672) (2,229) (2,227) (2,228) (2,224) (8,908)
--------------------------------------------------------------------------------------------------
EBIT ------------------> 13,608 13,536 21,726 48,870 10,003 12,044 10,250 17,389 49,686
Other expenses - non cash - - (52,000) (52,000)
Gain on investments
accounted for by the
equity method R$ 316 229 (545) - 449 (79) 846 980 2,196
Non-operating result R$ 12 (46) 126 92 73 14 19 155 261
Net financial result R$ (32,118) (23,780) (51,598) (107,496) 1,650 (11,186) (13,212) (21,921) (44,669)
--------------------------------------------------------------------------------------------------
Income before income tax
and social contribution R$ (18,182) (10,061) (82,291) (110,534) 12,175 793 (2,097) (3,397) 7,474
Income tax and social
contribution R$ 6,198 3,411 10,281 19,890 (4,138) 420 817 1,016 (1,885)
--------------------------------------------------------------------------------------------------
Net income R$ (11,984) (6,650) (72,010) (90,644) 8,037 1,213 (1,280) (2,381) 5,589
==================================================================================================
Property, plant and
equipment in operation R$ 214,661 212,703 212,886 212,886 234,442 234,449 218,717 216,619 216,619
Inventories R$ 18,374 16,645 19,104 19,104 10,980 11,807 11,807 13,007 13,007
Accounts receivable R$ 22,137 24,771 39,384 39,384 - - - 19,191 19,191
Payable to suppliers
and contractors R$ (28,947) (29,174) (41,184) (41,184) (29,148) (23,618) (27,512) (28,527) (28,527)
Salaries and social
charges R$ (35) (41) (80) (80) (104) (67) (65) (55) (55)
--------------------------------------------------------------------------------------------------
Capital employed 226,190 224,904 230,110 230,110 216,170 222,571 202,947 220,235 220,235
==================================================================================================
ROCE after taxes
(annualized) 35.0% 30.1% 55.6% 39.8% 10.9% 22.4% 21.8% 33.4% 21.7%
--------------------------------------------------------------------------------------------------
ROE (annualized) (122.2%) (81.7%) 730.4% (306.5%) 59.9% 8.8% (9.6%) (18.6%) 10.9%
--------------------------------------------------------------------------------------------------
51
8.14 - Pelletizing Affiliates - NIBRASCO (Adjusted and Non-Audited) Attachment I
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
Information 2001 2000
------------------------------------------------------------------------------------------------------------------------------------
1st 2nd 3rd 1st 2nd 3rd 4th
Quarter Quarter Quarter Total Quarter Quarter Quarter Quarter Total
--------------------------------------------------------------------------------------------------
Quantity sold - external MT
market (thousand) 806 559 514 1,879 369 742 660 627 2,398
Quantity sold - internal MT
market - CVRD (thousand) 1,169 1,572 929 3,670 1,711 1,344 1,240 1,902 6,197
Quantity sold - internal MT
market - Others (thousand) 35 38 - 73 43 48 42 36 169
--------------------------------------------------------------------------------------------------
Quantity sold - total MT (thousand) 2,010 2,169 1,443 5,622 2,123 2,134 1,942 2,565 8,764
==================================================================================================
Average sales price -
external market US$ 30.16 30.00 30.48 30.17 27.11 28.93 31.16 29.95 29.52
Average sales price -
internal market US$ 30.41 31.00 28.57 30.29 29 30 32 31 30.36
Average sales price -
total US$ 30.31 31.00 29.22 30.25 29.01 29.32 31.54 30.65 30.13
Long-term indebtedness,
gross US$ 6,000 4,800 7,300 7,300 8,400 7,200 7,200 6,000 6,000
Short-term indebtedness,
gross US$ 2,619 2,400 977 977 2,619 2,400 2,622 2,400 2,400
--------------------------------------------------------------------------------------------------
Total indebtedness,
gross US$ 8,619 7,200 8,277 8,277 11,019 9,600 9,822 8,400 8,400
==================================================================================================
Long-term indebtedness,
net US$ 847 - 7,300 7,300 - - - - -
--------------------------------------------------------------------------------------------------
Total indebtedness, net US$ 847 - 7,300 7,300 - - - - -
==================================================================================================
Stockholders' equity R$ 122,313 113,062 79,058 79,058 162,617 171,322 121,077 119,317 119,317
==================================================================================================
Net operating revenues R$ 122,876 151,327 109,356 383,559 106,790 111,167 110,190 149,867 478,014
Cost of products R$ (107,077) (125,975) (102,174) (335,226) (92,162) (95,665) (89,698) (126,810) (404,335)
Other expenses/revenues R$ (10,534) (8,049) 12,922 (5,661) (8,814) (4,826) (2,619) (14,746) (31,005)
Depreciation, amortization
and depletion R$ 4,086 4,086 4,128 12,300 4,321 4,318 4,087 4,083 16,809
--------------------------------------------------------------------------------------------------
EBITDA ------------------> 9,351 21,389 24,232 54,972 10,135 14,994 21,960 12,394 59,483
Depreciation, amortization
and depletion R$ (4,086) (4,086) (4,128) (12,300) (4,321) (4,318) (4,087) (4,083) (16,809)
--------------------------------------------------------------------------------------------------
EBIT ------------------> 5,265 17,303 20,104 42,672 5,814 10,676 17,873 8,311 42,674
Other expenses - non cash - - (42,000) (42,000)
Net financial result R$ 902 679 (8,420) (6,839) 4,702 3,370 (572) (1,833) 5,667
--------------------------------------------------------------------------------------------------
Income before income tax
and social contribution R$ 6,167 17,982 (30,316) (6,167) 10,516 14,046 17,301 6,478 48,341
Income tax and social
contribution R$ (3,172) (4,734) (3,688) (11,594) (4,479) (5,341) (6,496) 2,263 (14,053)
--------------------------------------------------------------------------------------------------
Net income R$ 2,995 13,248 (34,004) (17,761) 6,037 8,705 10,805 8,741 34,288
==================================================================================================
Property, plant and
equipment in operation R$ 55,656 51,571 47,514 47,514 82,791 78,686 75,313 59,760 59,760
Inventories R$ 23,062 18,948 46,720 46,720 12,725 17,946 12,731 18,183 18,183
Accounts receivable R$ 44,086 36,276 38,024 38,024 23,215 29,190 26,615 49,651 49,651
Payable to suppliers and
contractors R$ (61,010) (69,013) (63,116) (63,116) (55,267) (58,065) (60,902) (59,800) (59,800)
Salaries and social
charges R$ (370) (299) (269) (269) (961) (214) (214) (395) (395)
--------------------------------------------------------------------------------------------------
Capital employed ---------> 61,424 37,483 68,873 68,873 62,503 67,543 53,543 67,399 67,399
ROCE after taxes
(annualized) 13.6% 134.1% 95.3% 60.2% 8.5% 31.6% 85.0% 62.8% 42.5%
--------------------------------------------------------------------------------------------------
ROE (annualized) 9.8% 46.9% (172.0%) (30.0%) 14.8% 20.3% 35.7% 29.3% 28.7%
--------------------------------------------------------------------------------------------------
52
Report of Independent Accountants on Limited Review
October 22, 2001
To the Board of Directors and Stockholders
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 September 30,
2001 and 2000. 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 IBRACON
- Brazilian Institute of Independent Accountants, 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 September 30, 2001 and 2000, 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$
8,659,589 thousand (2000 - R$ 6,304,552 thousand) of these investments and
R$ 1,169,439 thousand (2000 - R$ 297,231 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 June 30, 2001. We
reviewed this information at the time of its preparation and issued our
respective report on July 18, 2001, including the limitation mentioned in
paragraph 3.
PricewaterhouseCoopers
Auditores Independentes
CRC-SP-160-S-RJ
Douglas H. Woods
Socio
Contador CRC-SP-101.652/O-0-S-RJ
53
BOARD OF DIRECTORS Executive Director of Human Resources and
Luiz Tarquinio Sardinha Ferro Corporate Services
Chairman Carla Grasso
Erik Persson Executive Director of the Iron Ore Area
Armando Santos
Fabio de Oliveira Barbosa Eduardo Marcos de Barros Faria
Director of Commercialization
Francisco Valadares Povoa Jayme Nicolato Correa
Director of Iron Ore for the Northern System
Joao Moises Oliveira Joaquim Martino Ferreira
Director of Pelletization and Metallurgy
Jose Marques de Lima Jose Francisco Martins Viveiros
Director of Iron Ore for the Southern System
Octavio Lopes Castello Branco Neto Marconi Tarbes Vianna
Director of Manganese and Alloys
Renato da Cruz Gomes
Executive Director of Logistics Area
Guilherme Laager
Romeu do Nascimento Teixeira
Elias David Nigri
Director of Logistics
AUDIT COMMITTEE
Claudia Torres Teixeira
Executive Director of the Shareholdings Area and
Eliseu Martins Businesses Development and Acting Executive Director of
Non-Ferrous Area
Antonio Miguel Marques
Luiz Carlos Angelotti
Antonio Carlos Varela
Marcos Fabio Coutinho Director of Pulp and Paper
Ronaldo Camillo Dalton Nose
Director of Development
Edward Dias da Silva
CHIEF EXECUTIVE OFFICER Director of Energy
Roger Agnelli
Helcio Roberto Martins Guerra
Director of Legal Affairs Director of Precious Metals
Paulo Francisco de Almeida Lopes
Paulo Eduardo Libanio
Executive Director of Control and Planning and Director of Basic Metals and Industrial Minerals
Acting Executive Director of Finance
Gabriel Stoliar
Otto de Souza Marques Junior
Director of Control of the Corporate Center
Tito Botelho Martins Junior
Director of Finance Eduardo de Carvalho Duarte Otto de Souza Marques Junior
Chief Accountant Director of Control of the
CRC-RJ 57439 Corporate Center
54
Item 2
[GRAPHIC OMITTED] Companhia Press Release
Vale do Rio Doce
NOTICE TO SHAREHOLDERS
Rio de Janeiro, November 12, 2001 - The Board of Directors of Companhia Vale do
Rio Doce (CVRD), will meet extraordinarily, on November 22, 2001 to deliberate
about the distribution of interest on shareholders' equity related to year
2001.
--------------------------------------------------------------------------------
For further information, please contact:
Roberto Castello Branco: castello@cvrd.com.br +55-21-3814-4540
--------------------
Andreia Reis: andreis@cvrd.com.br +55-21-3814-4643
-------------------
Barbara Geluda: geluda@cvrd.com.br +55-21-3814-4557
------------------
Daniela Tinoco: daniela@cvrd.com.br +55-21-3814-4946
-------------------
This release includes "forward-looking statements" that express expectations of
future events or results. All statements based on future expectations rather
than on historical facts are forward-looking statements that involve a number
of risks and uncertainties, and the company cannot give assurance that such
statements will prove to be correct.
Item 3
[GRAPHIC OMITTED] Companhia
Vale do Rio Doce
Press Release 3Q01
COMPANHIA VALE DO RIO DOCE
PERFORMANCE IN THE THIRD QUARTER
OF 2001 (3Q01)
Rio de Janeiro, November 12, 2001 -- Companhia Vale do Rio Doce
(CVRD) posted a solid R$ 1.206 billion net earnings in 2Q01, equal to
earnings per share of R$ 3.15, a historical record.
The gains with the sale of Cenibra, a strategic movement to focus on
mining, logistics and power generation, contributed to this result.
Accumulated earnings for the first nine months of 2001 amounted to R$
2.412 billion, 50.8% higher than the R$ 1.600 billion achieved in the same
period of last year.
3Q01 EBITDA reached an all time high of R$ 986 million. In the first nine
months of 2001 EBITDA was R$2.450 billion, 37.2 % higher than in the
same period of 2000. 3Q01 EBITDA margin was 55.5%, an all time high.
Consolidated gross revenue for the first nine months of 2001 was R$ 9.016
billion. Sales of iron ore and pellets were responsible for 54% of that
amount.
During the same period, volumes of consolidated sales of iron ore and
pellets reached 104.1 million tonnes.
CVRD exports reached US$ 2.448 billion in the first nine months of 2001,
accounting for 5.5% of total Brazilian exports.
CVRD delivered a stronger financial and operational performance despite
the slowdown in the global economy. The quality of its world class asset
base is key to weather the current global recession throughout the next
quarters.
[GRAPHIC OMITTED] THE MACROECONOMIC SCENARIO AND ITS EFFECTS ON CVRD
2
[GRAPHIC OMITTED] Companhia Press Release 3Q01
Vale do Rio Doce
A global recession but growth prospects are well alive
Even prior to September 11, macroeconomic developments already pointed to
weaker growth in every region of the globe. The synchronized slowdown has
reflected the strong global linkages among the developed economies and between
them and the developing economies, the continued weakness in the information
technology sector, the deteriorating situation in Japan and worsening financing
conditions for emerging markets.
The United States had been the unquestioned driver of global growth since 1995.
Now, with the broadening of the economic slowdown, the world economy found
itself without a growth engine.
The estimates indicate that the world economy is suffering its fifth recession
in the last thirty years -- 1975, 1982, 1991, 1998 and 2001.
While the near-term outlook is downbeat, despite the existing risks and
uncertainties derived from the war against terrorism, there is a reasonable
prospect for a global recovery to start by the end of 1H02.
There are a number of reasons for cautious optimism.
First, the main central banks of the world eased their monetary policies,
acting much earlier than in previous cycles. The US short term interest rate is
the lowest since 1962 and it is negative in real terms. There is room for
additional easing, the main opportunities lie with the ECB and the BOJ. On the
fiscal side, there is a sizable policy stimulus in the United States.
Second, economic activity is likely to be bolstered by the abatement of the
food and oil price shocks.
Third, economic fundamentals across the globe are stronger than they were a few
years ago, reflected in lower inflation, greater monetary policy credibility
and more balanced public budgets. In many emerging markets, in a sharp contrast
with 1997/98, more flexible exchange rate regimes are in place and external
vulnerabilities were reduced, with smaller current account deficits and greater
reliance on foreign direct investment flows than on short term speculative
flows.
Although the iron ore market is reasonably stable, the deepening of the global
economic slowdown is potentially harmful to CVRD's performance. On the other
hand, the continued weakness of the Brazilian Real (BRL) contributes to
increase its margins, cash flow generation and return on invested capital.
Additionally, an undervalued BRL stimulates export growth and, therefore, the
demand for railroad and port services, one of the main CVRD businesses.
Iron ore and metals markets
Global steel output has fallen only marginally and the demand for iron ore
remained strong. According to the International Institute for Steel and Iron
(IISI), in the first nine months of 2001 steel production reached 620.0 million
tonnes against 620.7 million tonnes in the same period of last year. US
production has declined substantially, 11.4%, while in Asia it was up 4.6%.
Japanese production declined 1.3%, with China and Taiwan showing the highest
increases, 10.1% and 12.5%, respectively. In the European Union, there was a
slight output reduction of 1.6%.
However, since there is a close correlation between global steel crude
production and global industrial production, we could expect supply cutbacks in
the near future. In the last global recessions, 1991 and 1998, global crude
steel production showed a similar pattern: moderate cutbacks, distributed over
the recession year and the following. In 1991, reduction was 4.7% followed by a
1.9% cut in 1992. In 1998, the production cut was smaller, 2.8%, followed by an
additional 0.7% in 1999.
The main impact of the global steel downcycle on the demand for iron ore is a
shift towards lower priced products. According to the IISI, global direct
reduced iron (DRI) production, used in mini-mills, in the first nine months of
2001 is 8.4% lower than in the same period of last year. This development has a
negative effect on the demand for direct reduction pellets, the highest priced
iron ore product. Blast furnace mills are switching demand out of blast furnace
pellets to iron ore fines. Therefore, the demand for pellets is slowing down
and it will bear most of the burden of the negative outlook for steel.
CVRD pellet production is expected to remain at levels below its nominal
capacity throughout the next three quarters. The sales of Samarco, an
affiliated company, were the first to be hurt by the negative economic
environment, declining, on a quarter over quarter basis, since 1Q01.
On the positive side, there are two factors. China demand for steel has
remained firm and growing substantially. At the same time, in order to boost
productivity, it is relying more and more on imported iron ore: on an
annualized basis, iron ore imports over the January to September 2001 period
reached 88.4 million tonnes, showing a dramatic 26% increase over year 2000
purchases of 70 million tonnes. In the early nineties, Chinese imports
represented only 7.5% of global seaborne trade. It is
3
[GRAPHIC OMITTED] Companhia Press Release 3Q01
Vale do Rio Doce
likely that its market share will amount to approximately 20% this year.
According to some estimates, China is forecast to import 130 million tonnes in
2005. CVRD managed to increase its penetration into this fast growing market as
evidenced by the long term contract with Baosteel, the largest Chinese
steelmaker.
The slowing of global trade flows is diminishing temporarily CVRD geographic
disadvantage in the Asian market. Brazil-Australia freight differential into
Asia is currently at the lower end of its normal range, providing CVRD more
opportunities to supply the Asian market, given the superior quality and
diversification of its iron ore products.
Although a capacity of almost 2.0 million tonnes per year remains idled due to
power shortages in the United States (Pacific Northwest), Canada and Brazil,
aluminum price levels are the lowest since mid-1999, given concerns over the
outlook for consumption.
The Economist Metals Price Index, which comprises aluminum, copper, nickel,
zinc, lead and tin prices, reached in the last few days its lowest level since
1993. At that time, it had reached the bottom of the downward trend started
with the emergence of the 1991 global recession.
Gold prices reacted positively in the aftermath of the terrorist attacks.
However, this price hike looks like much more a spike than the beginning of an
upward trend, replicating the pattern showed in the aftermath of the Iraqi
invasion of Kuwait in 1990/91. Inflation rates are at low levels worldwide,
central banks credibility as inflation fighters are at a historical high and
the weak global economic environment has a negative impact on jewelry demand,
which represents an important component of the demand for gold.
CVRD aluminum and gold low cash costs and its hedging policy are helping to
weather the storm in metals prices. However, the electricity rationing
mandatory aluminum production curtailments, 48,000 tonnes at Albras and 11,000
tonnes at Valesul, are hurting the operating performance of its aluminum
division.
The recovery of global GDP growth will face a limited supply growth of primary
aluminum, with brownfield additions partially offset by likely permanent
smelter closures, thereby bringing opportunities for a solid price recovery.
Electricity rationing in the North of Brazil is expected to be abolished by
year end, reducing CVRD electricity costs in the iron ore, manganese, gold and
kaolin mining operations and freeing Albras to resume its normal operations at
a pace of 407,000 tonnes per year. Electricity saving targets for the Southeast
region are expected to be relaxed in early 2002, lowering electricity costs in
CVRD iron ore and pellets in the Southern System and allowing Valesul and the
ferro-alloys subsidiary CPFL to increase production.
[GRAPHIC OMITTED] CONSOLIDATED SELECTED INDICES
Sales of iron ore and pellets: 104.1 million tons
CVRD plans to start releasing consolidated quarterly financial statements in
1Q02. In this release, there is some information, referring to sales volumes,
revenues and exports at the consolidated level.
Consolidated iron ore and pellet sales comprised of: (a) sales realized by CVRD
and the joint venture companies - Nibrasco, Itabrasco, Kobrasco and
Hispanobras; and (b) sales by subsidiaries and affiliates, calculated in
proportion to the stake held in the company by CVRD. The volume of consolidated
sales is net of inter-company transactions within the CVRD group, such as, for
example, the sale of pellet feed by the Parent Company to the joint venture
pellet companies. This volume amounted to 5.3 million tons in 3Q01 and 15.3
million tons in the first nine months of 2001.
In the first nine months of this year, the accumulated consolidated sales of
104.1 million tons was 21.7% higher than the same period in 2000. Acquisitions
carried out by CVRD -- Socoimex, Samitri, Samarco, GIIC and Ferteco --
contributed to 18% of sales in 2001, 18.7 million tons, compared to 9% in the
first nine months of the year.
In 2001, 88.5 million tons - 85% of consolidated sales - were to external
markets. The percentage sold to the domestic market in the last two years has
remained practically constant for each quarter, at around 15%.
Consolidated iron ore and pellet sales volume amounted to 35.8 million tons in
3Q01 and was the largest quarterly volume in CVRD's history.
In the third quarter, consolidated iron ore sales increased 6.8% on the
previous quarter, and 17.2% compared with the same period a year earlier.
Consolidated pellet sales in 3Q01 fell 15.6% and 8.2%, compared to 2Q01 and
3Q00, respectively -
4
[GRAPHIC OMITTED] Companhia Press Release 3Q01
Vale do Rio Doce
reflecting a cyclical change in the demand profile for iron ore. Japan, for
example has cut its total imports of lump ore and pellets by 10.7% for the
first nine months of 2001, when compared with the same period a year earlier,
while purchases of iron ore fines fell by only 2.2%.
5
[GRAPHIC OMITTED] Companhia Press Release 3Q01
Vale do Rio Doce
Consolidated Sales Volumes -- in million tonnes
Iron Ore Pellets
9M 01 9M 01
Iron Ore 64.8 Iron Ore 80.9
Pellets 20.8 Pellets 23.2
Iron Ore Pelletss
1Q 00 17.4 6.5
2Q 00 22.9 6.6
3Q 00 24.4 7.8
4Q 00 23.4 9.1
1Q 01 25.3 7.7
2Q 01 26.8 8.5
3Q 01 28.7 7.1
Consolidated Sales Volumes -- in million tonnes
Iron Ore and Pellets
9M 00 9M 01
CVRD 77.6 CVRD 84.9
Aquisitions* 8 Aquisitions 19.2
CVRD Aquisitions
1Q 00 23.9
2Q 00 27.1 2.4
3Q 00 26.7 5.5
4Q 00 27.7 4.8
1Q 01 27.2 5.8
2Q 01 27.3 8
3Q 01 30.5 5.3
* Acquisitions: SOCOIMEX, SAMITRI, SAMARCO, GIIC, FERTECO.
6
[GRAPHIC OMITTED] Companhia Press Release 3Q01
Vale do Rio Doce
EXPORTS OF US$ 2.446 BILLION
CVRD's consolidated gross revenues for the period January to September 2001
amounted to R$ 9.016 billion. The breakdown of the main items that made up
these revenues was as follows: iron ore and pellets (53.6%), transport services
(13.0%), aluminum (10.5%), steel (10.5%) and manganese and ferro alloys (5.3%).
Exports totalling US$ 2.446 billion accounted for 62% of total revenues, sales
by subsidiaries and foreign affiliates, 15.1% and 22.9% to the domestic market.
Thus 84.9% of CVRD's consolidated revenues was denominated in U.S. dollars.
Consolidated Gross Revenue by Product -- in R$ billion
Iron Ore and Pellets 3944 Iron Ore and Pellets 4836
Transportation Services 1567 Transportation Services 1172
Aluminum 1127 Aluminum 947
Steel Producs 1135 Steel Producs 952
Manganese and Ferro-alloys 586 Manganese and Ferro-alloys 476
Gold 285 Gold 233
Potash and Kaolin 246 Potash and Kaolin 218
Others 930 Others 182
Consolidated Gross Revenue by Origin -- in R$ billion
Domestic Market 25% Domestic Market 23%
Foreign Market - Brazilian Origin 60% Foreign Market - Brazilian Origin 62%
Foreign Market - Foreign Origin 15% Foreign Market - Foreign Origin 15%
[GRAPHIC OMITTED] CVRD 3Q01 RESULTS
Record net quarterly earnings: R$ 1.206 billion
The net profit achieved in 3Q01, of R$ 1.206 billion, was 2.2 times that
reported in the previous quarter and 2.4 times the result reported in 3Q00. For
the first nine months of 2001, accumulated earnings amounted to R$ 2.412
billion, 50.8% higher than the same period last year and 13.1% more than that
recorded for the whole of 2000 (R$ 2.133 billion).
On an annualized basis, return on equity (ROE) in 2001 amounted to 28.2%
against 20.2% in 2000.
Gross margin widened from 47.7% in 2Q01 to 51.4% in 3Q01, the highest since
2Q00. Net operating revenues rose by R$ 237 million, while the cost of goods
sold (COGS) increased by R$ 58 million.
Power rationing was an influencing factor in pushing up COGS. Increases in
costs of contracted services - up by R$ 21.2 million, and consumption of fuel
oil - up by R$ 15.3 million, were partially explained by the rent and use of
diesel oil electricity generators.
7
[GRAPHIC OMITTED] Companhia Press Release 3Q01
Vale do Rio Doce
Quarterly Net Income and Gross Margin
R$ millions
1Q 00 639 0.473
2Q 00 462 0.525
3Q 00 499 0.491
4Q 00 533 0.478
1Q 01 660 0.469
2Q 01 546 0.477
3Q 01 1206 0.514
Cost of Goods Sold* - Parent Company
3Q 01
R$ 661 million
R$ millions
1Q 00 2Q 00 3Q 00 4Q 00 1Q 01 2Q 01 3Q 01
Personnel 95 104 104 104 97 104.8 127
Material 88 95 100 92 92 86.2 109
Fuel 55 61 69 71 74 71.7 87
Electrical Energy 15 18 19 19 18 21.8 31
Outsourced Services 56 61 64 87 95 100.8 122
Depreciation and Depletion 68 67 68 67 111 106.4 129
Others 56 61 60 57 46 57.2 56
---------
* Excludes expenses with product acquisitions
8
[GRAPHIC OMITTED] Companhia Press Release 3Q01
Vale do Rio Doce
The evolution of operational revenues
The Parent Company's net operating revenues amounted to R$ 1.778 billion in the
third quarter, compared to R$ 1.541 billion in 2Q01 and R$ 1.264 billion in
3Q00, reflecting the positive impact of exchange rate devaluation and the
growth in iron ore sales. In the first nine months of 2001, the net revenue
achieved of R$ 4.640 billion, was 27.8% higher than that reported in the same
period in 2000, which saw revenues of R$ 3.632 billion.
Gross revenue in the third quarter from pellet and iron ore sales amounted to
R$ 1.423 billion, up 21.5% on the previous quarter, and up 57.8% YoY.
Iron ore and pellet sales volumes in the Parent Company amounted to 34.8
million tons of in 3Q01, 11.5% higher than the previous quarter and up 16.7% on
3Q00. From June 2001, Samitri's iron ore sales were handled by CVRD.
Sales by the Parent Company consisted of: (a) iron ore sales, including pellet
feed to joint venture companies (JVs); and (b) the sale of pellets produced by
CVRD's two pellet plants and those pellets acquired from the JVs. In 3Q01, CVRD
purchased 2.3 million tons of pellets from the JVs, which brought total pellet
purchases in the first nine months of 2001 to 7.6 million tons, compared to 7.0
million tons in the same period last year.
The average sales price for iron ore and pellets in 3Q01 amounted to US$16.68
per ton, slightly higher than that recorded in 2Q01 - of US$ 16.04 per ton and
in 3Q00 -- of US$16.31 per ton. The rise in average sales prices was lower than
the 2001 increase in reference prices due to the change in product mix.
The 3.6 million ton increase in the sales of iron ore and pellets in the third
quarter, compared to 2Q01, was in part due to expansion seen in Asian markets.
China's foreign purchases of iron ore in 3Q01, which amounted to 24.2 million
tons, were up 7.8% on the previous quarter. CVRD's exports to China doubled
from 2.8 million to 5.6 million tons, comparing the same two periods. China,
therefore, became the Parent Company's main iron ore market in 3Q01, exceeding
sales to Brazilian steel plants -- 5.2 million tons -- and Japan -- 4.3 million
tons.
In the first nine months of this year, CVRD's sales to China jumped 76.9%
compared to the same period in 2000. This reflected CVRD's successful marketing
policy in exporting to the world's fastest growing economy - China has
increased its iron ore imports by an annual average of 15% during the period
1992/2001.
General cargo (all cargo except for iron ore and pellets) transported by CVRD's
railroads of Carajas and Vitoria to Minas - amounted to 3.325 billion ton
kilometers in 3Q01. This is practically the same as the figure achieved in 2Q01
of 3.350 billion ton kilometers, but 3.9% less than that seen in 3Q00,
reflecting the slowdown in the growth of the Brazilian economy.
General cargo handled for clients in the Parent Company's ports (Tubarao, Ponta
da Madeira and TMIB) totalled 5.9 million tons in 3Q01, an increase of 7.3% on
the previous quarter and up 18% YoY.
Revenues generated from providing railfreight and port services amounted to R$
256 million in 3Q01, compared to R$ 281 million in 2Q01 and R$256 million in
3Q00.
Gold sales totalled 4.49 tons, an increase of 25.7% on the previous quarter and
up 5.1% compared to 3Q00. The average sales price in the first nine months of
the year was US$ 272.86 per ounce, 1.5% higher than the average COMEX price of
US$ 268.89 per ounce.
Revenues derived from gold sales amounted to R$ 102.6 million, 41.8% higher
than the previous quarter and up 48.9% YoY.
9
[GRAPHIC OMITTED] Companhia Press Release 3Q01
Vale do Rio Doce
Sales Volumes
Iron Ore and Pellets - Parent Company General Cargo Transportation* -
million tonnes Railways Parent Company - million of TKU
Iron Ore Pellets EFVM EFC
-------- ------- ---- ---
1Q 00 22.6 4.1 1Q 00 2389 308
2Q 00 26.3 3.3 2Q 00 2702 398
3Q 00 26 3.8 3Q 00 3054 407
4Q 00 26.2 4.4 4Q 00 2805 380
1Q 01 26.6 3.6 1Q 01 2642 346
2Q 01 27 4.2 2Q 01 2803 547
3Q 01 31 3.8 3Q 01 2839 486
-------------
* except iron ore and pellets
General Cargo Transportation - FCA General Cargo Handling* - Ports
millions of TKU Parent Company - million tonnes
EFVM Ports
---- -----
1Q 00 2014 1Q 00 3.9
2Q 00 2074 2Q 00 4.5
3Q 00 1903 3Q 00 5
4Q 00 1661 4Q 00 5.1
1Q 01 1961 1Q 01 4.4
2Q 01 2236 2Q 01 5.5
3Q 01 2161 3Q 01 5.9
-------------
* except iron ore and pellets
Iron Ore and Pellets Sales by Market
Parent Company -- in million tonnes
9M 00 9M 01
----- -----
Brazil - JV's 19% Brazil - JV's 16%
Brazil - Steel Mills 13% Brazil - Steel Mills 16%
Europe 24% Europe 25%
Japan 16% Japan 13%
China 7% China 12%
Asia - others 9% Asia - others 8%
Others 12% Others 10%
Gross Revenue by Product -- Parent Company -- R$ billion
9M 00 9M 01
----- -----
Iron Ore 53% Iron Ore 57%
Pellets 17% Pellets 17%
Railroad Services 15% Railroad Services 13%
Port Services 4% Port Services 4%
Potash 3% Potash 3%
Manganese and Others 3% Gold 5%
Gold 5% Others 1%
10
[GRAPHIC OMITTED] Companhia Press Release 3Q01
Vale do Rio Doce
Sources of earnings growth
Comparing earnings in 3Q01 with that of the previous quarter, the main reason
for the increase in the result was the non-operational item of R$ 1.420
billion, from the profit of R$ 1.472 billion derived from the sale of Cenibra.
The drop in equity income of R$ 275 million, the R$ 289 million negative impact
caused by the rise in the USD against the BRL on the Company's dollar-
denominated debt, and a R$ 684 million increase in other operating expenses,
all combined to partially offset the increased profit recorded by CVRD for
3Q01.
Equity income was a negative R$ 5 million, and reflected the worst performance
by CVRD's subsidiaries and affiliates since 3Q99. The segments to show a loss
in the period were logistics - a loss of R$ 86 million, and aluminum, with a
loss of R$ 125 million.
The negative result in the logistics segment was due to a loss of R$ 13 million
by MRS Logistica and provisions made by Docenave for losses from the sale of
ships and non-use of tax credits, of R$ 95 million and R$ 25 million,
respectively.
Losses in the aluminum segment consisted of a R$ 196 million loss by Albras and
a loss of R$ 128 million by Alunorte. Losses in both these companies were
basically due to the effect of the BRL depreciation against the USD, on
dollar-denominated debt.
Production of primary aluminum by Albras was down due to power rationing,
falling from 93,400 tons in 2Q01 to 76,800 tons in 3Q01. As a consequence,
sales totalled 80,000 tons compared to 92,000 tons in 2T01 and 93,000 in 3Q00.
The average sales price in the period January/September was US$ 1,463 per ton,
4.1% higher than the average London Metal Exchange three month contract of US$
1,406 per ton.
EBITDA for Albras in 3Q01 amounted to R$ 25 million, down 81.7% on the previous
quarter and down 76.4%, YoY. In the case of Alunorte, EBITDA has remained
steady at around R$ 64 million, quarter on quarter, but was up 42.2% YoY.
Equity income from subsidiaries and affiliates in the iron ore segment amounted
to R$ 83 million in 3Q01, down R$ 59 million on the previous quarter. This
deterioration was mainly due to losses suffered by Samarco of R$48 million, a
loss by Kobrasco of R$ 72 million, and Nibrasco of R$ 34 million.
Samarco's pellet and pellet feed sales volume totalled 2.2 million tons in
3Q01. For the third consecutive quarter, Samarco showed shrinking sales. GIIC's
pellet sales volume came to 662,000 tons in the third quarter, compared to
861,000 in 2Q01 and 1.05 million in 3Q00. Samarco's EBITDA was R$ 82.1 million
in 3Q01, down 7.1% QoQ and 13.5% YoY.
Ferteco sold 3.3 million tons of iron ore and 549,000 tons of pellets in 3Q01.
Ferteco's 3Q01 EBITDA was R$ 32.3 million.
Equity income from the manganese and ferro alloy segments was practically
unchanged at R$ 26 million.
Sales of manganese ore by Sibra and Urucum amounted to 197,000 tons in 3Q01, up
44.4% on 2Q01 and up 61.2% YoY. Volume sold in the first nine months of 2001
amounted to 564,300 tons, 21.9% higher than in the same period a year earlier.
The rationing of electricity consumption was the main factor behind the drop in
sales of ferro alloys in 3Q01. With the exception of RDME, located in France,
all the subsidiaries, SIBRA, CPFL and Urucum, were forced to cut back
production. Sales, therefore, in the third quarter amounted to 82,600 tons,
compared to 92,800 in 2Q01 and 104,000 in 3Q00.
The rise of R$ 684 million in other operational expenses is explained by the
increase in provisions made for losses in subsidiaries and affiliates, and
goodwill amortization of R$ 535 million, the reversal of ICMS tax credits of R$
127 million, exhaustion of the gold mines in Igarape Bahia and Fazenda
Brasileiro (R$ 55 million), and the restoration of environmentally degraded
areas (R$ 40 million).
The main provisions for losses in subsidiaries and affiliates are comprised by:
FCA (R$ 108 million), PPSA (R$ 104 million), and CFN (R$ 33 million). Goodwill
amortization totaled R$ 297 million comprised by FCA (R$ 139 million), PPSA (R$
75 million), GIIC (R$ 60 million) and SIBRA (R$ 19 million).
11
[GRAPHIC OMITTED] Companhia Press Release 3Q01
Vale do Rio Doce
Factors that Affected Net Earnings
R$ million
2Q 01 546
Non Operational Income 546 1420
Income Tax 1966 434
Net Revenue 2400 237
COGS 2579 58
Financial Result 2487 92
Monetary Variation 2198 289
Equity Income 1923 275
Operating Expenses 1206 717
3Q 01 1206
Equity Income *
R$ million
1Q 00 251
2Q 00 229
3Q 00 297
4Q 00 206
1Q 01 202
2Q 01 270
3Q 01 -5
-------------
* Excluding capital gains from assets sales
12
[GRAPHIC OMITTED] Companhia Press Release 3Q01
Vale do Rio Doce
EBITDA - Aluminum
R$ million
ALBRAS ALUNORTE
------ --------
1Q 00 114 51
2Q 00 88 45
3Q 00 106 45
4Q 00 117 35
1Q 01 122 51
2Q 01 137 65
3Q 01 25 64
RECORD QUARTERLY EBITDA: R$ 986 MILLION
EBITDA in 3Q01 amounted to R$ 986 million, the highest quarterly figure
achieved in the Company's history. This was 27.2% higher than that reported in
2Q01 and almost double that achieved in 3Q00. Dividends received totalled R$
114 million, representing 11.6% of EBITDA.
EBITDA margin in 3Q01 was recorded at 55.5%, also the highest in CVRD's
history. Company's capacity to convert revenues into operational profits was
enhanced by the weakness of the BRL.
The quarter-on-quarter EBITDA increase of R$ 211 million was the result of a R$
237 million rise in net operating revenues and R$ 58 million in dividends
received, though this was partially offset by a rise in the cost of goods sold
(COGS) of R$ 58 million and an increase in administrative expenses of R$ 19
million.
In the first nine months of 2001, EBITDA totalled R$ 2.450 billion, compared to
R$ 1.786 billion in the same period a year earlier, up, therefore by 37.0%.
Operational cash generation in 3Q01 amounted to R$ 1.169 billion, 34.4% higher
than in the previous quarter and up 160.4% YoY. In the first nine months of
2001, operating cash flow amounted to R$ 3.157 billion, some 2.3 times the
amount generated in the same period last year of R$ 1.349 billion.
13
[GRAPHIC OMITTED] Companhia Press Release 3Q01
Vale do Rio Doce
EBITDA X EBITDA Margin
(R$ million)
EBITDA EBITDA margin (%)
------ -----------------
1Q 00 543 0.484
2Q 00 632 0.507
3Q 00 611 0.483
4Q 00 618 0.458
1Q 01 689 0.522
2Q 01 775 0.503
3Q 01 986 0.555
1Q 00 2Q 00 3Q 00 4Q 00 1Q 01 2Q 01 3Q 01
----- ----- ----- ----- ----- ----- -----
Dividends Received 27 24 66 5 82 56 114
EBITDA adjusted by the inclusion of dividends received
Factors that Affected EBITDA
R$ million
2Q 01 775
Net Revenues 775 237
Dividends Received 1012 58
Other Expenses 1070 6
Depreciation, Depletion
and Amortization 1076 1
Research and Development 1068 9
SG&A 1044 24
COGS 986 58
3Q 01 986
14
[GRAPHIC OMITTED] Companhia Press Release 3Q01
Vale do Rio Doce
Operational Cash Flow -- R$ million
1Q 00 305
2Q 00 595
3Q 00 449
4Q 00 498
1Q 01 1118
2Q 01 870
3Q 01 1169
[GRAPHIC OMITTED] INVESTMENTS
Investments made in 3Q01 amounted to US$ 199.4 million, compared to US$ 123.9
million in 2Q01. In the first nine months of this year, excluding acquisitions,
capital expenditure amounted to US$ 423.0 million, compared to US$ 376 million
in the same period last year. Adding the US$ 566 million spent on the
acquisition of Ferteco, capital expenditure for the year to date amounted to
US$ 989.9 million.
Construction of the Sao Luis pellet plant has already absorbed US$ 106.9
million in 2001, US$ 66.5 million of which was spent on industrial
installations and US$ 40.4 million on mine, railroad and port infrastructure.
Also in the iron ore mining segment, further investments of US$ 20.5 million
were made in the purchase of railcars and locomotives, US$ 3.1 million for the
construction of a third stock marshalling yard in the Northern System, US$ 2.4
million on extending the useful life of the Timbopeba mine in the Southern
System, and US$ 1.6 million on Pier III at the Ponta da Madeira terminal in Sao
Luis.
In the non-ferrous minerals segment, the main investments were: a US$ 17.8
million capital injection into PPSA, a producer of kaolin, US$ 8.0 million on
the Sossego copper project and US$ 2.8 million on enlarging the production
capacity of the potash mine. In the logistics segment, the main capital
expenditure items were: the purchase of railcars and locomotives, US$ 8.0
million, and expansion of the Praia Mole maritime terminal, US$ 1.7 million.
Hydroelectric plant construction has absorbed US$ 28.3 million so far in 2001.
Maintenance expenses accounted for US$ 134.3 million and geological research,
US$ 17.6 million, in the period from January to September of this year.
DEBT
As of September 30, 2001, CVRD total debt, adjusted for debts and credits
against subsidiaries and affiliates, was US$ 1.88 billion. Net debt, as
measured by the difference between total debt and cash and marketable
securities holdings of CVRD and its wholly-owned overseas subsidiaries, was
only US$ 236 million.
Therefore, Company's financial leverage was extremely low, 5.3%. Debt coverage
indicators were very good as well: net debt/EBITDA was 0.21x and EBITDA/gross
interest expenses 6.85x.
DEBT LEVERAGE AND COVERAGE
3T 00 2T 01 3T 01 9M 00 9M 01
----- ----- ----- ----- -----
Net Debt / (Net Debt + Equity) (%) 13.8% 12.5% 5.3% 13.8% 5.3%
Net Debt / LTM EBITDA 0.72 0.59 0.21 0.72 0.21
EBITDA / Gross Interest Expenses 4.30 5.70 6.85 5.10 6.06
15
[GRAPHIC OMITTED] Companhia Press Release 3Q01
Vale do Rio Doce
SELECTED FINANCIAL INDICATORS - PARENT COMPANY R$ million
---------------------------------------------- ----------
3Q 00 2Q 01 3Q 01 9M 00 9M 01
----- ----- ----- ----- -----
Gross Revenues 1,315 1,594 1,838 3,765 4,807
Gross Margin (%) 49.1 47.7 51.4 49.7 48.9
Net Earnings 499 546 1,206 1,600 2,412
EBITDA * 611 775 986 1,786 2,450
EBITDA Margin (%) 48.3 50.3 55.5 49.2 52.8
Net Operating Cash Flow 449 870 1,169 1,349 3,157
ROE annualized (%) 18.9 19.5 43.2 20.2 28.8
Gross Debt (US$ million) 3,005 3,309 2,877 3,005 2,877
Net Debt (US$ million) 1,976 2,295 1,233 1,976 1,233
Exports (US$ million) 405 397 449 1,176 1,228
Investments (US$ million) ** 102 124 199 376 424
------------------
* adjusted by the inclusion of dividends received
** acquisitions not included
FINANCIAL STATEMENT - PARENT COMPANY R$ million
------------------------------------ ----------
3Q 00 2Q 01 3Q 01 9M 00 9M 01
----- ----- ----- ----- -----
Gross Operating Revenues 1,315 1,594 1,838 3,765 4,807
Value Added Tax (51) (53) (60) (133) (167)
Net Operating Revenues 1,264 1,541 1,778 3,632 4,640
Cost of Goods Sold (644) (806) (864) (1,827) (2,371)
Gross Income 620 735 914 1,805 2,269
Gross Margin (%) 49.1 47.7 51.4 49.7 48.9
Equity Income * 297 270 (5) 777 467
Operating Expenses (429) (560) (1,361) (966) (2,502)
Selling (23) (28) (33) (49) (86)
General & Administrative (62) (70) (89) (156) (215)
Financial Expenses (142) (136) (144) (350) (404)
Financial Revenues 42 46 (38) 195 75
Monetary Variation (33) (184) (473) (58) (988)
Research & Development (26) (21) (30) (60) (71)
Others (185) (167) (851) (488) (1,109)
Operating Income 488 445 (749) 1,616 (63)
Non Operating Income (10) 59 1,479 (9) 1,890
Income Taxes 21 42 476 (7) 585
Net Earnings 499 546 1,206 1,600 2,412
Earnings per Share (R$) 1.296 1.418 3.138 4.157 6.276
-----------------
* excluding capital gains from asset sales
16
[GRAPHIC OMITTED] Companhia Press Release 3Q01
Vale do Rio Doce
BALANCE SHEET - PARENT COMPANY R$ million
------------------------------ ----------
3Q 00 2Q 01 3Q 01 9M 00 9M 01
----- ----- ----- ----- -----
Assets
Current Assets 3,867 5,449 5,281 3,867 5,281
Long Term Assets 2,066 2,511 2,316 2,066 2,316
Permanent Assets 12,649 13,591 15,986 12,649 15,986
------ ------ ------ ------ ------
Total 18,582 21,551 23,583 18,582 23,583
====== ====== ====== ====== ======
Liabilities and Stockholders' Equity
Current Liabilities 3,335 4,223 5,074 3,335 5,074
Long Term Liabilities 4,665 6,153 7,336 4,665 7,336
Stockholders' Equity 10,582 11,175 11,174 10,582 11,174
Capital 3,000 4,000 4,000 3,000 4,000
Reserves 7,582 7,175 7,174 7,582 7,174
------ ------ ------ ------ ------
Total 18,582 21,551 23,584 18,582 23,584
====== ====== ====== ====== ======
EQUITY INCOME BY BUSINESS AREA* R$ million
------------------------------- ----------
3Q 00 2Q 01 3Q 01 9M 00 9M 01
----- ----- ----- ----- -----
Ferrous
Iron Ore and Pellets 106 141 93 233 337
Manganese and Ferro-Alloys 4 27 26 10 54
Non-Ferrous -- -- -- -- --
Transportation (4) 24 (86) (40) (25)
Shareholding Interests
Steel 32 26 70 131 123
Pulp and Paper 58 12 13 160 41
Aluminum 98 39 (125) 278 (69)
Fertilizers 3 1 4 5 6
Energy -- -- --
---- ---- ---- ---- ----
Total 297 270 (5) 777 467
==== ==== ==== ==== ====
------------
* excluding capital gains from asset sales
CAPEX - 9M 01
US$ US$
By business area million % By category million %
---------------- ------- ---- ----------- ------- -----
Ferrous Minerals 272.1 64.2% Equity Investment 31.3 7.4%
Transportation 19.0 4.5% Maintenance 134.3 31.7%
Non Ferrous Minerals 51.9 12.2% Projects 226.6 53.4%
Energy 71.7 16.9% Geological Exploration 17.6 4.2%
Others 9.2 2.2% Environmental Protection 0.5 0.1%
Information Technology 9.8 2.3%
Technological Research 3.8 0.9%
-------------------------------------------------------------------------------------
Total 423.9 100.0% Total 423.9 100.0%
17
[GRAPHIC OMITTED] Companhia Press Release 3Q01
Vale do Rio Doce
ALUMINUM - SELECTED FINANCIAL INDICATORS - NON-AUDITED
R$ million
MRN 3Q 00 2Q 01 3Q 01 9M 00 9M 01
--- ----- ----- ----- ----- -----
Net Operating Revenues 111 124 139 296 350
Cost of Goods Sold (53) (58) (60) (149) (156)
Financial Results 1 (2) (2) 6 (4)
Net Earnings 57 55 52 146 144
Gross Margin (%) 52.7 53.2 56.8 49.7 55.4
EBITDA 67 75 88 173 220
EBITDA Margin (%) 60.6 60.5 63.3 58.4 62.9
ALUNORTE 3Q 00 2Q 01 3Q 01 9M 00 9M 01
-------- ----- ----- ----- ----- -----
Net Operating Revenues 139 188 177 425 515
Cost of Goods Sold (99) (129) (122) (299) (358)
Financial Results (35) (76) (157) (77) (330)
Net Earnings 17 (17) (128) 44 (189)
Gross Margin (%) 28.4 31.4 31.1 29.6 30.5
EBITDA 45 65 64 141 180
EBITDA Margin (%) 32.3 34.6 36.2 33.2 35.0
Net Debt (in US$ million)
- Short Term 39 - - 39 -
- Long Term 420 395 429 420 429
---- ---- ---- ---- ----
Total 459 395 429 459 429
==== ==== ==== ==== ====
ALBRAS 3Q 00 2Q 01 3Q 01 9M 00 9M 01
------ ----- ----- ----- ----- -----
Net Operating Revenues 251 308 278 748 863
Cost of Goods Sold (147) (176) (169) (440) (507)
Financial Results (48) (114) (188) (94) (421)
Net Earnings 92 9 (196) 215 (188)
Gross Margin (%) 41.4 42.9 39.2 41.2 41.3
EBITDA 106 137 25 309 284
EBITDA Margin (%) 42.4 44.5 9.0 41.3 32.9
Net Debt (in US$ million)
- Short Term 143 127 95 143 95
- Long Term 576 496 497 576 497
Total 719 623 592 719 592
==== ==== ==== ==== ====
VALESUL 3Q 00 2Q 01 3Q 01 9M 00 9M 01
------- ----- ----- ----- ----- -----
Net Operating Revenues 75 99 77 193 236
Cost of Goods Sold (56) (68) (55) (140) (164)
Financial Results (1) 4 (9) (3) (8)
Net Earnings 8 16 12 28 36
Gross Margin (%) 26.1 31.3 28.6 27.5 30.5
EBITDA 32 22 28 95 68
EBITDA Margin (%) 42.5 22.2 36.4 49.2 28.8
Net Debt (in US$ million)
- Short Term 22 2 - 22 -
- Long Term 3 2 3 3 3
---- ---- ---- ---- ----
Total 26 4 3 26 3
==== ==== ==== ==== ====
18
[GRAPHIC OMITTED] Companhia Press Release 3Q01
Vale do Rio Doce
IRON ORE AND PELLETS - SELECTED FINANCIAL INDICATORS - NON-AUDITED
R$ million
HISPANOBRAS 3Q 00 2Q 01 3Q 01 9M 00 9M 01
----------- ----- ----- ----- ----- -----
Net Operating Revenues 70 64 73 159 190
Cost of Goods Sold (55) (54) (60) (133) (158)
Financial Results 1 1 4 3 7
Net Earnings 6 5 10 13 22
Gross Margin (%) 21.0 15.6 17.8 16.4 16.8
EBITDA 16 13 17 31 39
EBITDA Margin (%) 23.6 20.3 23.3 19.5 20.5
NIBRASCO 3Q 00 2Q 01 3Q 01 9M 00 9M 01
-------- ----- ----- ----- ----- -----
Net Operating Revenues 110 151 109 328 384
Cost of Goods Sold (90) (126) (102) (277) (335)
Financial Results (1) 1 (8) 8 (7)
Net Earnings 11 13 (34) 25 (18)
Gross Margin (%) 18.6 16.6 6.4 15.5 12.8
EBITDA 22 21 24 47 55
EBITDA Margin (%) 19.9 13.9 22.0 14.3 14.3
Net Debt (in US$ million)
- Short Term - - - - -
- Long Term - - 7 - 7
Total - - 7 - 7
ITABRASCO 3Q 00 2Q 01 3Q 01 9M 00 9M 01
--------- ----- ----- ----- ----- -----
Net Operating Revenues 52 57 59 152 165
Cost of Goods Sold (47) (45) (52) (136) (143)
Financial Results - 2 2 1 7
Net Earnings 2 18 4 7 24
Gross Margin (%) 9.6 21.1 11.9 10.5 13.3
EBITDA 4 11 10 15 23
EBITDA Margin (%) 8.6 19.3 16.9 9.9 13.9
KOBRASCO 3Q 00 2Q 01 3Q 01 9M 00 9M 01
-------- ----- ----- ----- ----- -----
Net Operating Revenues 52 70 91 165 222
Cost of Goods Sold (41) (56) (68) (129) (171)
Financial Results (13) (24) (52) (23) (107)
Net Earnings (1) (7) (72) 8 (91)
Gross Margin (%) 20.7 20.0 25.3 21.8 23.0
EBITDA 12 16 24 39 56
EBITDA Margin (%) 24.2 22.9 26.4 23.6 25.2
Net Debt (in US$ million)
- Short Term -- 20 -- -- --
- Long Term 189 101 120 189 120
Total 189 121 120 189 120
19
[GRAPHIC OMITTED] Companhia Press Release 3Q01
Vale do Rio Doce
IRON ORE AND PELLETS - SELECTED FINANCIAL INDICATORS - NON-AUDITED
R$ million
SAMARCO 3Q 00 2Q 01 3Q 01 9M 00 9M 01
------- ----- ----- ----- ----- -----
Net Operating Revenues 161 191 167 513 555
Cost of Goods Sold (78) (81) (73) (268) (250)
Financial Results (26) (32) (111) (124) (207)
Net Earnings 31 29 (48) (14) (11)
Gross Margin (%) 51.6 57.6 56.3 47.8 55.0
EBITDA 95 88 82 250 264
EBITDA Margin (%) 59.1 46.1 49.1 48.7 47.6
Net Debt (in US$ million)
- Short Term 158 142 140 158 140
- Long Term 168 133 119 168 119
Total 325 275 259 325 259
SAMITRI 3Q 00 2Q 01 3Q 01 9M 00 9M 01
------- ----- ----- ----- ----- -----
Net Operating Revenues 90 92 5 262 209
Cost of Goods Sold (34) (55) 0 (102) (97)
Equity Income 14 20 (27) (1) 1
Financial Results (7) (6) (7) (19) (24)
Net Earnings 17 23 (31) (48) 1
Gross Margin (%) 62.5 40.2 100.0 61.1 53.6
EBITDA 15 24 6 43 54
EBITDA Margin (%) 16.9 26.1 120.0 16.4 25.8
Net Debt (in US$ million)
- Short Term 48 24 11 48 11
- Long Term 17 9 - 17 -
Total 65 33 11 65 11
For further information, contact:
Roberto Castello Branco castello@cvrd.com.br +55-21-3814-4540
Andreia Reis andreis@cvrd.com.br +55-21-3814-4643
Barbara Geluda geluda@cvrd.com.br +55-21-3814-4557
Daniela Tinoco daniela@cvrd.com.br +55-21-3814-4946
Website: www.cvrd.com.br
-------------------------------------------------------------------------------
"Some of the statements included in this report are forward-looking statements.
These statements are subject to specific products market changes and general
local and global macroeconomic performance. In addition, they involve known and
unknown risks, uncertainties and other factors which may cause the actual
results, performance or achievements of CVRD to be materially different from
any future results, performance or achievements of CVRD expressed or implied by
the forward-looking statements."