UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
Report of Foreign Private Issuer
Pursuant To Rule 13a-16 or 15d-16
of the
Securities Exchange Act of 1934
For the month of August 2002
Valley of the Doce River Company
(Translation of Registrant's name into English)
Avenida Graca Aranha, No. 26
20005-900 Rio de Janeiro, RJ, Brazil
(Address of principal executive office)
Indicate by check mark whether the registrant files or will file annual reports
under cover Form 20-F or Form 40-F.
Form 20-F [X] Form 40-F [ ]
Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes [ ] No [X]
If "Yes" is marked, indicate below the file number assigned to the registrant in
connection with Rule 12g3-2(b): 82-_____________________
Companhia Vale do Rio Doce
TABLE OF CONTENTS
This Form 6-K contains the following:
Sequential
Page
Item Number
---- ------
1. Press Release entitled "Companhia Vale do Rio Doce
Second Quarter Performance in 2002; US GAAP," dated
August 14, 2002................................................... 1
2. Condensed Consolidated Financial Information...................... 12
This current report on Form 6-K is hereby incorporated by reference into the
Registration Statement on Form F-4 of Companhia Vale do Rio Doce and Vale
Overseas Limited, File No. 333-84696.
US [LOGO] Comphania
GAAP Vale do Rio Doce
BOVESPA:VALE3, VALE5 Press Release 2Q02
NYSE: RIO, RIOPR
LATIBEX: XVALO, XVALP COMPANHIA VALE DO RIO DOCE
SECOND QUARTER PERFORMANCE IN 2002
The financial and operational information
contained in this press release, unless when
otherwise indicated, is based on consolidated
figures, according to generally accepted
accounting principles in the United States of
America ("US GAAP"). The main subsidiaries of CVRD
which form part of these consolidated figures are:
www.cvrd.com.br RDME, Sibra, Ferteco, Urucum Mineracao, Para
Pigmentos, Docenave, Aluvale, Florestas Rio Doce,
Celmar, Rio Doce Europa, Itaco, CVRD Overseas and
Rio Doce International Finance. From the end of
the second quarter 2002, Alunorte forms part of
the consolidated figures. Rio de Janeiro, August
14, 2002 - In the second quarter of 2002,
Companhia Vale do Rio Doce (CVRD) posted a loss of
US$ 14 million, equivalent to a loss per share of
US$ 0.04. In the first half, earnings accumulated
amounted to US$ 261 million, equal to an earnings
per share of US$ 0.68. Revenues, margins, cash
CVRD flow and sales volumes showed a very good
Investor performance and some record figures were
Relations: registered.
Roberto Castello Branco
Andreia Reiis The negative result was caused by the 22.4%
Daniella Tinoco appreciation of the US Dollar (USD) against the
Barbara Gelluda Real (BRL) which took place between the end of
Rafael Azevedo 1Q02 and the end of 2Q02. This generated a foreign
Tell: (5521) 3814-4540 exchange loss of US$ 312 million, due to the
riio@cvrd.com.br impact of this variation on net liabilities in
foreign currency.
The depreciation of the BRL favourably affects the
Company's cash flow over time through a reduction
in costs. As most of these costs are denominated
in domestic currency and fall in Dollar terms,
margins widen and cash flow in foreign currency
increases, tending to naturally compensate for the
negative effect of monetary variation on earnings.
Gross operating revenues amounted to US$ 1.071
billion, 8.5% higher than 1Q02, the highest figure
for the last six quarters. This occurred in spite
of the negative effect of lower iron ore prices.
Both CVRD, its subsidiaries, affiliates and joint
ventures made provisions to fully recognised in
2Q02 the retroactive effect of lower prices,
bearing in mind that negotiations were concluded
between the end of May and early June.
EBITDA (earnings before interest tax depreciation
and amortization) amounted to US$ 456 million, up
2.7% and 11.5%, compared to 1Q02 and 2Q01,
respectively. EBITDA margin amounted to 44.4%,
very high and in line with previous results. In
2Q02, the impact of exchange rate fluctuation on
EBITDA was very small. The appreciation of the USD
against the BRL, comparing the average daily
exchange rate in 2Q02 with that in 1Q02, the
change that affects cash flow, was only 5%.
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Vale do Rio Doce
Record sales of iron ore and pellets were achieved in 2Q02, with shipments
totalling 41.089 million tons. By the same token, general cargo transported
(products other than iron ore and pellets) for clients on CVRD's railroads
(Vitoria a Minas and Carajas) also reached record levels, recording 3.730
million net ton kilometres (ntk).
Debt leverage and interest coverage indicators were at very comfortable levels.
Total debt amounted to 2.2 times EBITDA accumulated over the last twelve months
and 27% of the enterprise value at the end of June. 2Q02 EBITDA was equal to
10.6 times interest payments. Therefore the depreciation of the BRL did not
affect the soundness of CVRD's balance sheet.
RELEVANT EVENTS
Strategy execution
Two important transactions took place in the implementation of CVRD's strategy
in the aluminum businesses, whose focus is the exploitation of opportunities in
the bauxite and alumina segments.
The first was the purchase, for R$ 118.9 million, of a 12.6% stake in Alunorte
by Aluvale, a wholly owned subsidiary of the Company, which thus now holds 62.1%
of the common shares and 19.1% of the preferred shares in Alunorte,
corresponding to 57% of the total share capital. Among other implications, this
means that CVRD will be able to capture greater value in the future expansion of
this alumina refinery.
The second transaction was the acquisition, for R$ 6.4 million, of total control
in Mineracao Vera Cruz (MVC). MVC has significant bauxite reserves located in an
area adjoining CVRD's own reserves in the Paragominas region, in the state of
Para. The geographical location of MVC's mineral resources significantly
increases flexibility in the use of the Company's logistics infrastructure.
In the non-ferrous segment, CVRD acquired full control of the Salobo copper
project for US$ 50.4 million and entered into a joint venture with Antofagasta
Plc, one of the largest copper producers in the Americas, for mineral
exploration in the south of Peru, an area with significant mineral resource
potential.
In June, the Company ceased extraction activities at the Igarape Bahia gold
reserve in Carajas. As a consequence, CVRD's estimated gold production for 2002
is 320,000 troy ounces, compared to the 514,400 troy ounces produced in 2001.
However, concurrently, there is an ongoing pre-feasibility study for the
development of Igarape Bahia Phase IV. From the middle of 2004, it is estimated
that this new phase will produce 36,000 tons of copper concentrate and 83,600
troy ounces of gold annually. The estimated capex for the development of Igarape
Bahia Phase IV is US$ 54 million.
CVRD has obtained the concession for the construction and operation of the
Estreito hydroelectric power plant which will have a capacity of 1,087 MW.
CVRD's stake in the consortium that made the winning bid at the concession
auction is 30%. The Estreito plant will be the Company's tenth hydroelectric
power project, two of which, Igarapava and Porto Estrela, are already in
operation.
The Company is in the process of negotiating the sale of the assets of Florestas
Rio Doce to Bahia Sul Celulose S.A. and Aracruz Celulose S.A., concluding the
strategy of divesting out of the paper and pulp sector. Bond issues
Vale Overseas, a wholly owned subsidiary of CVRD, has begun the offer to swap
bonds guaranteed by the Company, which fall due in 2007, with a coupon of
8.625%, political risk insurance (PRI) and a total face value of US$ 300
million, series A (old issue) for series B bonds (new issue). The new issue
represent the same debt with exactly identical characteristics. However, the new
issue do not carry
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Vale do Rio Doce
restrictions on their purchase by retail investors and are registered with the
SEC (Securities and Exchange Commission) under the terms of the US Securities
Act of 1933, which will improve the liquidity of these bonds in the secondary
market.
Authorization was requested from the CVM (Brazilian Securities and Exchange
Commission) on June 28, 2002, to register shareholders debentures issued by CVRD
and distributed to its shareholders in April 1997, in the context of the
privatization program. Registration of these debentures will allow them to be
publicly traded on Brazilian markets.
The Chicago Board Options Exchange (CBOE) and Pacific Exchange have begun
trading in options on RIO, the ADR representing the common shares of CVRD. These
options constitute a risk transfer vehicle, and it is hoped that they will help
to reduce volatility in the Company's stock price.
Iron ore and pellet prices
Between the end of May and the beginning of June, CVRD concluded iron ore and
pellet price settlements with European and Japanese clients for 2002 (April 2002
to March 2003 in the case of Japan). Reflecting the performance of the steel
industry in 2001, prices were down, by between 1% (iron ore fines from the
Southern System to Europe) and 5.5% (blast furnace pellets to Europe). The
impact of this drop in prices in the first half of the year is fully recognised
in the results for 2Q02.
SHORT TERM PROSPECTS
The increased risk aversion prevailing in the world financial market reflects
the suspicion generated by the cases of corporate fraud and doubts about the
strength of the global economic recovery.
Recent statistics on economic activity in the US and Europe suggest that
recovery in the global economy is likely to take place more slowly than we had
expected at the time of publishing CVRD's first quarter results earlier this
year, on May 15.
In Brazil, uncertainty in world financial markets magnified the effects of the
uncertainties about the future of macro-economic policy under the next
government. This combination produced a high degree of financial assets price
volatility. It is hoped that the new agreement with the IMF, involving a credit
line of US$ 30 billion to the Brazilian government, will produce positive
effects on the markets and, consequently, on the Brazilian economy.
The 3.1% drop in global steel output (ex-China) in 2001 and the expansion of
global industrial production in 2002, were the main factors behind recovery of
the steel products markets this year. The average price of steel products rose
significantly: the Steel Price Index (CRUspi), computed by CRU, showed a rise of
32% between the end of last year and the beginning of August this year. Global
production of crude steel, according to data from the International Institute
for Steel and Iron (IISI), grew 3.9% in the first half of 2002, compared to the
same period in 2001. In the second quarter of 2002, this growth accelerated,
production increasing by 5.7% over the first quarter.
This scenario is reflected positively in the demand for iron ore and pellets.
China continues to be the principal driving force behind the growth in seaborne
demand for iron ore: its imports amounted to 51 million tons in the first half
of 2002 (1H02) compared to 41.9 million in 1H01, an increase of 21.9%. In Japan,
where the economy is still undergoing a fragile recovery, iron ore inventories
are down and import levels remained constant in 1H02, totalling 63 million tons.
Higher steel prices have stimulated a recovery in the global demand for pellets.
The prospects for continuing increase in Chinese imports, driven by a fast
growing GDP and replacement of domestically produced iron ore by the imported
product, combined with the fact that steel prices are
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[LOGO] Comphania US GAAP 2Q02
Vale do Rio Doce
expected to remain at current levels, leads us to expect good sales performance
for iron ore and pellets of CVRD in the second half of 2002, consolidating the
movement observed in 1H02.
On the other hand, given the current and expected short term demand evolution
for aluminum, we cannot anticipate a price recovery for the next few months.
Inventories on the London Metal Exchange (LME) continue to accumulate and prices
have reacted negatively to the turbulence in global financial markets,
converging to US$ 1,300 per ton, compared to the 2001 average of US$ 1,453 and
US$ 1,378 in the first seven months of 2002. In the case of alumina, demand from
China provides support for prices at their current level. For new contracts, the
alumina price has remained at around 11% of the aluminum price on the LME. Gold
prices have remained consistently above the level of US$ 300 per troy ounce, and
its resiliency may be associated to the asset price volatility in global
financial markets.
Despite the slow growth in the Brazilian economy, demand for logistics services
has been very strong, given the deficiencies that exist in Brazil's cargo
transportation infrastructure. CVRD has been able to exploit opportunities in
the market, especially in the transport of grains and cement, as well as inter-
modal transportation. For instance, the winning of new contacts has made it
feasible to expand the Company's railroad activities in the transportation of
products for the car industry from 4Q02 onwards.
REVENUES AND SALES VOLUMES
Sales volume of iron ore and pellets in the second quarter reached new record
level of 41.089 million tons, 11.9% higher than the previous quarter and up 7.3%
YoY. In 1H02, the volume accumulated amounted to 77.8 million tons, which was
also a record. This figure represents a 7.% increase over the 72.7 million tons
sold in 1H01.
CONSOLIDATED SALES OF IRON ORE AND PELLETS
thousand tons
2Q 01 % 1Q 02 % 2Q02 %
Iron ore 33,469 87.4 33,001 89.9 35,963 87.5
Pellets 4,812 12.6 3,715 10.1 5,126 12.5
Total 38,281 100.0 36,716 100.0 41,089 100.0
Sales statistics in 2Q02 showed a cyclical recovery in pellet demand - the level
recorded of 5.1 million tons was 38% higher than the previous quarter. Demand
for pellets has a close correlation with the steel price cycle, which after a
very weak year began a recovery trend in 2002.
As with iron ore, ferro-alloys produced by CVRD have been experiencing increased
demand. Sales of these products were up 3.1% on the previous quarter and 7.5%
YoY.
The transportation of general cargo (products other than iron ore and pellets)
for customers on CVRD's railroads, amounted to 3.730 billion net ton kilometres
(ntk), a quarterly record, surpassing the previous record of 3.468 billion ntk
in 1Q02. Ferrovia Centro-Atlantica (FCA) also registered its best performance in
terms of general cargo transportation since its operation was taken over by CVRD
at the beginning of 2000: 2.712 billion nkt.
In addition to transportation records, CVRD's railroads have been significantly
improving productivity. At EFVM, ntk per active locomotive, per day, rose from
0.87 million in 2Q01 to 0.95 million in 2Q02. Simultaneously, fuel consumption
fell. EFVM's trains transported, on average, 300 tkus per litre of fuel consumed
in 2Q02, compared to 280 in 2Q01. Maximization of asset utilization and
operational cost reductions are contributing to increase returns on existing
assets.
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Vale do Rio Doce
GENERAL CARGO RAILROAD TRANSPORTATION
million ntk
1Q 01 2Q 01 3Q 01 4Q 01 1Q 02 2Q 02
EF Vitoria a Minas 2,643 2,890 2,844 2,791 2,803 2,880
EF Carajas 356 543 494 423 665 850
Total Parent Company 2,999 3,433 3,338 3,214 3,468 3,730
Ferrovia Centro Atlantica 1,962 2,236 2,167 1,993 2,257 2,712
Grand Total 4,961 5,669 5,505 5,207 5,725 6,442
CVRD's ports handled 7.007 million tons, an increase of 27% on the previous
quarter.
Gold sales have been falling due to the exhaustion of the Igarape Bahia mine,
amounting to 111,854 troy ounces in the quarter. From the third quarter of 2002,
gold will be produced only from the mines of Fazenda Brasileiro and Itabira.
However, CVRD's gold production will rise strongly when operations begin at the
copper mines in Carajas. Annual production of 950,000 troy ounces is estimated
for 2007, by which time all the copper projects should be fully operational.
Potash shipments increased substantially, up by 69.9% QoQ and 27.2% YoY.
Gross operating revenues in 2Q02 amounted to US$ 1.071 billion, up 8.5% on the
previous quarter and 4.1% higher than 2Q01. Revenues from the sale of iron ore
and pellets amounted to US$ 703 million, representing 65.6% of total revenues in
the quarter. Average sale prices of iron ore and pellets in 2Q02 were,
respectively, US$ 15.34 and US$ 31.64 per ton.
Transportation services contributed 12.2% and aluminum products, bauxite,
alumina and primary aluminum, 9.2%. Total accumulated gross revenues in 1H02
amounted to US$ 2.058 billion, of which sales of iron ore and pellets
contributed US$ 1.369 billion. 1H02 total gross revenues grew 1.2% YoY.
The domestic market accounted for US$ 345 million of Company gross revenues in
2Q02. In the principal overseas markets, Europe accounted for US$ 384 million
and Asia, US$ 211 million.
VOLUME SOLD - OTHER PRODUCTS
thousand tons
2Q 01 1Q 02 2Q 02
Gold (troy ounces) 114,780 115,455 111,854
Manganese 151 257 133
Ferro-alloys 93 97 100
Alumina 34 118 21
Aluminum 43 33 63
Bauxite 152 294 253
Potash 151 113 192
Kaolin 80 63 60
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Vale do Rio Doce
GROSS REVENUE BY PRODUCT
US$ million
2T 01 % 1T 02 % 2T 02 %
Iron Ore 503 48.9 545 55.2 550 51.4
Pellets 173 16.8 121 12.3 153 14.3
Gold 32 3.1 34 3.4 35 3.3
Transportation 131 12.7 111 11.2 131 12.2
Aluminum, Alumina and Bauxite 78 7.6 68 6.9 98 9.2
Manganese and Ferro-alloys 39 3.8 73 7.4 65 6.1
Potash 22 2.1 16 1.6 24 2.2
Kaolin 23 2.2 11 1.1 9 0.8
Wood and Pulp 17 1.7 1 0.1 2 0.2
Others 11 1.1 7 0.7 4 0.4
Total 1,029 100.0 987 100.0 1.071 100.0
GROSS REVENUES BY DESTINATION
US$ million
2T 01 % 1T 02 % 2T 02 %
Domestic Market 312 30.3 293 29.7 345 32.2
Foreign Market
United States 56 5.4 65 6.6 30 2.8
Europe 323 31.4 342 34.7 384 35.9
Middle East and Africa 49 4.8 39 4.0 35 3.3
Japan 87 8.5 62 6.3 69 6.4
Asia except Japan 117 11.4 135 13.7 142 13.3
Latin America and others 85 8.3 51 5.2 66 6.2
Total 1,029 100.0 987 100.0 1 .071 100.0
SECOND QUARTER EARNINGS
According to US GAAP criteria, CVRD posted a loss of US$ 14 million, caused by
the negative effect of depreciation in the BRL on net liabilities in foreign
currency, of some US$ 312 million.
The negative effect of exchange rate variation was also felt in equity income,
with a loss of US$ 37 million in the aluminum related businesses. As in the case
of the Parent Company, this negative result was caused by the exchange rate loss
effect on net liabilities in foreign currency.
EBITDA OF US$ 456 MILLION
EBITDA of CVRD in 2Q02 amounted to US$456 million, 44.4% of net revenues in the
quarter. The effect of the BRL's depreciation against the USD on the Company's
cash flow, which in the case of US GAAP financial statements is reflected in a
lower cost of goods sold (COGS), was not significant, given that the average
exchange rate in the second quarter only varied by 5% on the previous quarter.
This contrasts with the impact of exchange rate fluctuation on net liabilities
in foreign currency, and consequently on quarterly earnings. In this case, the
significant variation, for accounting purposes, is the difference between the
USD/BRL rate on the last day of 2Q02 (R$ 2.8444) and the last day of 1Q02 (R$
2.3236), 22.4%.
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Vale do Rio Doce
The main factor behind the increase in EBITDA in 2Q02, compared with 2Q01, of
US$ 47 million, was the US$ 36 million increase in net operating revenue. This
in turn reflected increased sales volume, given that the prices of CVRD's main
products, iron ore and pellets, were lower than in 2001. There was an increase
of US$ 20 million in dividends received, which in the second quarter totalled
US$ 30 million (Samarco US$ 17 million, MRN US$ 10 million and Caemi US$ 3
million). COGS, on which exchange rate variation had little effect, came down by
US$ 3 million, 0.5% YoY. Partly offsetting these positive effects, sales,
general and administrative expenses increased by US$ 11 million in 2Q02,
compared with the same period a year earlier.
EBITDA COMPOSITION
US$ million
1Q 02
Net Operating Revenues 1,027
COGS (594)
SG&A (64)
Research and Development (12)
Other Operational Expenses (27)
Adjustment for Exceptional Non-Cash Items 35
EBIT 365
Depreciation, Depletion and Amortization 61
Dividends received 30
EBITDA 456
The ferrous mineral businesses - iron and manganese ore, pellets and
ferro-alloys - accounted for 87.3% of EBITDA in 2Q02. Logistics services
contributed with 5.9% and non-ferrous businesses - gold, potash and kaolin -
with 5.7%.
EBITDA BY BUSINESS AREA
US$ million
2Q 01 % 1Q 02 % 2Q 02 %
Ferrous Minerals 316 77.8 349 78.6 398 87.3
Non Ferrous Minerals 18 4.4 12 2.7 26 5.7
Logistics Services 70 17.2 63 14.2 27 5.9
Aluminum 1 0.2 18 4.1 6 1.3
Steel 1 0.2 2 0.5 (1) (0.2)
Total 406 100.0 444 100.0 456 100.0
CAPITAL EXPENDITURES
Investments made by the Parent Company in 2Q02 amounted to US$ 215.6 million.
This figure included US$ 50.4 million of the acquisition costs of the 50% stake
owned by Anglo American plc in the Salobo copper project, and US$ 114.7 million
which was allocated to several greenfield and brownfield projects.
Capital expenditures for 1H02 amounted to US$ 373.2 million.
Most of the expenditure on projects was in the area of ferrous minerals,
totalling US$ 58.6 million. Of particular note were: the US$ 21.4 million spent
on the purchase of locomotives for iron ore transportation, work on the
construction of Pier III at the Ponta da Madeira maritime terminal (US$ 5.6
million) and US$ 24.0 million on the Sao Luis pellet plant and its supporting
infrastructure.
US$ 27.3 million were invested in the construction and the environmental
licensing of eight hydroelectric power projects. By the end of August
construction will begin on the Capim Branco I and II hydroelectric power plants.
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Logistics projects absorbed US$ 19.6 million, the largest investment of US$ 7.7
million being spent on the purchase of transtainers and portainers for the Vila
Velha Terminal (TVV) and US$ 3.8 million on the enlarging of the Praia Mole
Terminal, both in the state of Espirito Santo. US$ 2.2 million was spent on
enlarging the capacity of the grain handling facilities at the port of Tubarao
and US$ 2.9 million spent on increasing transportation capacity, warehousing and
general cargo handling facilities in the Northern System.
Investment of US$ 7.7 million was carried out in Mineracao Serra do Sossego, in
developing the copper mine. Capital expenditure on enlarging the potash mine at
Taquari-Vassouras amounted to US$ 1.5 million. This brownfield project involves
a total investment of US$ 67.5 million from 2002 to 2005, to increase production
capacity from 600 to 850,000 tons a year by 3Q05. This is an investment with a
high expected rate of return, in a product whose sales produce strong cash
generation, which will increase CVRD's share in a market that is growing by an
average of 6% a year. Mineral exploration continues to focus on the discovery of
world class mineral deposits. Investment in 2Q02 quarter amounted to US$ 8.3
million. Most of the expenditure for this year is allocated to the exploration
of copper, gold, nickel, kaolin and platinum group metals. US$ 2.7 million was
spent on information technology and US$ 0.9 million on environmental protection.
CAPITAL EXPENDITURES* - 2Q 02
By Business Area US$ million % By Category US$ million %
Ferrous Minerals 91.6 55.4 Equity Investments 7.8 4.7
Logistics 25.2 15.3 Maintenance 29.0 17.6
Non Ferrous Minerals 18.5 11.2 Projects 114.7 69.5
Energy 27.5 16.6 Mineral Exploration 8.3 5.0
Others 2.4 1.5 Environmental Protection 0.9 0.5
Information Technology 2.7 1.6
Technological Research 1.7 1.0
Total 165.2 100.0 Total 165.2 100.0
* acquisition not included
Among the subsidiaries and affiliates in the area of ferrous minerals, Ferteco
invested US$ 2.6 million in maintenance, bringing the total to US$ 4.9 million
for 1H02. Samarco invested US$ 3.0 million in the quarter and US$ 9.4 million in
1H02, US$ 6.9 million of which was spent on a roller press for pellet feed
milling, which saves energy consumption in the pelletizing process.
MRN, a bauxite producer, invested US$ 29.1 million in 2Q02 and US$ 53.9 million
in 1H02. Most of this, US$ 42.5 million, was spent on expanding production
capacity from 11 to 16.3 million tons a year, which should be concluded by the
end of this year.
Alunorte invested US$ 41.8 million in 2Q02 and US$ 86.2 million in 1H02.
Investment in expanding the production of alumina, from 1.6 million to 2.4
million tons a year, amounted to US$ 83.5 million. This project is scheduled for
completion also at the end of 2002.
Albras' capital expenditure in the quarter amounted to US$ 4.8 million in 2Q02
and US$ 10.2 million in 1H02. Of this total, US$ 4.8 million was spent on a
project to increase the productivity of the smelter.
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INDEBTEDNESS
CVRD's total debt level fell slightly, falling from US$ 3.935 billion in 1Q02 to
US$ 3.914 billion as of June 30, 2002. This occurred despite the fact that
Alunorte's debt of US$ 455 million was consolidated into CVRD's financial
statements, representing therefore an immediate increase in debt by this amount.
The Company's cash levels fell by US$ 436 million, meaning that net debt rose
from US$ 1.927 billion to US$ 2.342 billion at the end of 2Q02. This drop in
cash was influenced by an interest on shareholders equity payment of US$ 329
million in April and capital expenditures during 2Q02 of US$ 215.6 million.
Debt leverage and interest coverage indicators were at very comfortable levels.
Total debt amounted to 2.2 times EBITDA accumulated over the last twelve months,
while total debt represented 27% of Company's enterprise value. 2Q02 EBITDA
amounted to 10.6 times interest payments.
DEBT INDICATORS
US$ million
2Q 01 1Q 02 2Q 02
Gross Debt 3,557 3,935 3,914
Net Debt 2,198 1,927 2,342
Gross Debt/LTM EBITDA 1.99x 2.27x 2.20x
EBITDA/Interest Coverage 6.8x 10.8x 10.6x
Gross Debt/Total Assets 0.28x 0.27x 0.27x
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SELECTED FINANCIAL INDICATORS
US$ million
2Q 01 1Q 02 2Q 02
Gross Operating Revenues 1,029 987 1,071
Gross Margin (%) 39.8 43.7 42.2
Net Income 100 275 (14)
EBITDA 409 444 456
EBITDA margin (%) 41.3 46.6 44.4
FINANCIAL STATEMENT
US$ million
2Q 01 1Q 02 2Q 02
Gross Operating Revenues 1,029 987 1,071
Value Added Tax (38) (34) (44)
Net Operating Revenues 991 953 1,027
Cost of Goods Sold (597) (537) (594)
Gross Income 394 416 433
Gross Margin (%) 39.8 43.7 42.2
SG&A Expenses (53) (59) (64)
R&D Expenses (10) (9) (12)
Employee Profit Sharing Plan (4) (9) 3
Others (59) (46) (30)
Operational Income 268 293 330
Financial Income 17 33 44
Financial Expenses (84) (62) (117)
Foreign Exchange and Monetary Gain (loss) (150) (3) (312)
Others (2) -- (10)
Income Taxes - Current 49 (7) 3
Income Taxes - Deferred 3 (12) 126
Equity in Results of Affiliates and Joint Ventures 7 29 (37)
Change in Provisions for Losses on Equity Investments (11) 5 (45)
Minority Interests 3 (1) 4
Net Income 100 275 (14)
Earnings per Share (US$) 0.26 0.72 (0.04)
BALANCE SHEET
US$ million
1Q02 2Q02
Assets
Current Assets 3,566 3,069
Long Term Assets 1,820 1,459
Permanent Assets 5,100 4,733
Total 10,486 9,261
Liabilities and Stockholders' Equity
Current Liabilities 2,364 1,915
Long Term Liabilities 3,345 3,374
Shareholders' Equity 4,777 3,972
Capital 2,709 2,944
Reserves 2,068 1,028
Total 10,486 9,261
11
[LOGO] Comphania US GAAP 2Q02
Vale do Rio Doce
"This press release may contain statements that express management's
expectations about future events or results rather than historical facts. These
forward-looking statements involve risks and uncertainties that could cause
actual results to differ materially from those projected in forward-looking
statements, and CVRD cannot give assurance that such statements will prove
correct. These risks and uncertainties include factors: relating to the
Brazilian economy and securities markets, which exhibit volatility and can be
adversely affected by developments in other countries; relating to the iron ore
business and its dependence on the global steel industry, which is cyclical in
nature; and relating to the highly competitive industries in which CVRD
operates. For additional information on factors that could cause CVRD's actual
results to differ from expectations reflected in forward-looking statements,
please see CVRD's reports filed with the Comissao de Valores Mobiliarios and the
U.S. Securities and Exchange."
12
COMPANHIA VALE DO RIO DOCE
INDEX TO CONDENSED CONSOLIDATED FINANCIAL INFORMATION
Page
Report of PricewaterhouseCoopers Auditores Independentes.................................................. F-2
Condensed Consolidated Balance Sheets as of June 30, 2002 and December 31, 2001........................... F-3
Condensed Consolidated Statements of Income for the Six-month periods
ended June 30, 2002 and 2001 ......................................................................... F-5
Condensed Consolidated Statements of Cash Flows for the Six-month periods
ended June 30, 2002 and 2001 ......................................................................... F-6
Condensed Consolidated Statements of Changes in Stockholders' Equity for
the Six-month periods ended June 30, 2002 and 2001.................................................... F-7
Notes to the Condensed Consolidated Financial Information................................................. F-8
13
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors
and Stockholders of Companhia Vale do Rio Doce
We have reviewed the accompanying unaudited condensed consolidated balance sheet
of Companhia Vale do Rio Doce and subsidiaries as of June 30, 2002, and the
unaudited condensed consolidated statements of income, cash flows and of changes
in stockholders' equity for the six-month periods ended June 30, 2002 and 2001.
These financial statements are the responsibility of the Company's management.
The unaudited financial information of certain affiliates, the investments in
which total US$238 million at June 30, 2002, the provision for losses on equity
investments which total US$29 at June 30, 2002, equity in earnings which total
US$4 million and US$13 million, respectively for the six month periods ended
June 30, 2002 and 2001, and change in provision for losses which total US$33
million for the six-month period ended June 30, 2002, and that of the
majority-owned shipping and ferrous alloy subsidiaries, which statements reflect
total assets of US$427 million at June 30, 2002 and total revenues of US$143
million and US$235 million for the six-month periods ended June 30, 2002 and
2001, respectively, were reviewed by other independent accountants whose reports
thereon have been furnished to us.
We conducted our reviews in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures to
financial data and making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an audit conducted in
accordance with auditing standards generally accepted in the United States of
America, the objective of which is the expression of an opinion regarding the
financial statements taken as a whole. Accordingly, we do not express such an
opinion.
Based on our reviews and the reports of other accountants, we are not aware of
any material modifications that should be made to the condensed consolidated
interim financial statements referred to above for them to be in conformity with
accounting principles generally accepted in the United States of America.
We have previously audited, in accordance with auditing standards generally
accepted in the United States of America, the consolidated balance sheet of
Companhia Vale do Rio Doce and subsidiaries as of December 31, 2001, and the
related consolidated statements of income, shareholders' equity, and cash flows
for the year then ended (not presented herein). In our report dated March 28,
2002, we expressed an unqualified opinion on those consolidated financial
statements. In our opinion, the information set forth in the accompanying
condensed consolidated balance sheet as of December 31, 2001 is fairly stated in
all material respects, in relation to the consolidated balance sheet from which
it has been derived.
PricewaterhouseCoopers
Auditores Independentes
Rio de Janeiro, Brazil
August 14, 2002
F - 2
Condensed Consolidated Balance Sheets
Expressed in millions of United States dollars
(Except for numbers of shares)
June 30, December 31,
2002 2001
------ ------
(Unaudited)
Assets
Current assets
Cash and cash equivalents ...................................................... 1,572 1,117
Accounts receivable:
Related parties ........................................................ 118 106
Unrelated parties ...................................................... 490 443
Loans and advances to related parties .......................................... 65 160
Inventories .................................................................... 315 323
Deferred income tax ............................................................ 290 265
Others ......................................................................... 219 224
------ ------
3,069 2,638
Property, plant and equipment, net ............................................. 3,846 3,813
Investments in affiliated companies and joint ventures and other investments ... 925 1,227
Provision for losses on equity investments ..................................... (38) (9)
Goodwill on acquisition of consolidated subsidiaries ........................... 516 540
Loans and advances:
Related parties ........................................................ 137 555
Unrelated parties ...................................................... 95 100
Judicial deposits .............................................................. 234 235
Other assets ................................................................... 477 423
------ ------
TOTAL .......................................................................... 9,261 9,522
====== ======
F - 3
Condensed Consolidated Balance Sheets
Expressed in millions of United States dollars
(Continued)
June 30, December
2002 31, 2001
----------- --------
(Unaudited)
Liabilities and stockholders' equity
Current liabilities
Suppliers ................................................................................ 281 296
Payroll and related charges .............................................................. 73 85
Interest attributed to stockholders ...................................................... 124 340
Current portion of long-term debt
Related parties ........................................................................ -- 22
Unrelated parties ...................................................................... 481 274
Short-term debt .......................................................................... 707 589
Loans from related parties ............................................................... 85 168
Others ................................................................................... 164 147
------ ------
1,915 1,921
------ ------
Long-term liabilities
Employees postretirement benefits ........................................................ 140 187
Long-term debt
Related parties ......................................................................... -- 156
Unrelated parties ....................................................................... 2,638 2,014
Loans from related parties ............................................................... 3 21
Provisions for contingencies (Note 8) .................................................... 447 452
Unrealized loss on derivative instruments ................................................ 33 40
Others ................................................................................... 72 86
------ ------
3,333 2,956
------ ------
Minority interests ......................................................................... 41 5
Stockholders' equity
Preferred class A stock - 600,000,000 no-par-value shares authorized
and 138,575,913 issued ................................................................... 904 820
Common stock - 300,000,000 no-par-value
shares authorized and 249,983,143 issued ............................................... 1,630 1,479
Treasury stock -4,751 (2001 - 91) preferred and 4,715,170
(2001 - 4,715,170) common shares ......................................................... (88) (88)
Additional paid-in capital ............................................................... 498 498
Other cumulative comprehensive income .................................................... (4,243) (3,465)
Appropriated retained earnings ........................................................... 2,425 3,212
Unappropriated retained earnings ......................................................... 2,846 2,184
------ ------
3,972 4,640
------ ------
TOTAL ...................................................................................... 9,261 9,522
====== ======
See notes to condensed consolidated financial information.
F - 4
Condensed Consolidated Statements of Operations
Expressed in milions of United States dollars
(except number of shares and per-share amounts)
(Unaudited)
Six months ended June 30
2002 2001
---- ----
Operating revenues, net of discounts, returns and allowances
Iron ore and pellets ..................................... 1,369 1,256
Gold ..................................................... 69 60
Other metals ............................................. 198 178
-------- --------
1,636 1,494
Revenues from transportation services ............................ 242 322
Aluminum products ................................................ 166 161
Other products and services ...................................... 14 57
-------- --------
2,058 2,034
Value-added tax .................................................. (78) (68)
-------- --------
Net operating revenues ........................................... 1,980 1,966
-------- --------
Operating costs and expenses
Cost of ores and metals sold ..................................... (824) (798)
Cost of transportation services .................................. (133) (205)
Cost of aluminum products ........................................ (160) (153)
Others ........................................................... (14) (43)
-------- --------
(1,131) (1,199)
Selling, general and administrative expenses ..................... (123) (93)
Research and development ......................................... (21) (20)
Employee profit sharing plan ..................................... (6) (14)
Others ........................................................... (76) (81)
-------- --------
(1,357) (1,407)
-------- --------
Operating income ................................................. 623 559
-------- --------
Non-operating income (expenses)
Financial income ................................................. 77 65
Financial expenses ............................................... (179) (168)
Foreign exchange and monetary loss ............................... (315) (349)
Gain on sale of investments ...................................... -- 277
Others ........................................................... (10) (2)
-------- --------
(427) (177)
-------- --------
Income before income taxes, equity results
and minority interests ......................................... 196 382
-------- --------
Income taxes
Current .......................................................... (4) 41
Deferred ......................................................... 114 33
-------- --------
110 74
-------- --------
Equity in results of affiliates and joint ventures ............... (10) 14
Change in provision for losses on equity investments ............. (38) (20)
Minority interests ............................................... 3 4
-------- --------
Net income ....................................................... 261 454
======== ========
Basic earnings per Common and Preferred Class A Share ............ 0.68 1.18
-------- --------
Weighted average number of shares outstanding
(thousands of shares)
Common shares .................................................. 245,268 249,975
Preferred Class A shares ....................................... 138,571 134,935
See notes to condensed consolidated financial information.
F - 5
Condensed Consolidated Statements of Cash Flows
Expressed in milions of United States dollars
(Unaudited)
Six months ended June 30
2002 2001
-------- --------
Cash flows from operating activities:
Net income. ............................................................................. 261 454
Adjustments to reconcile net income
with cash provided by operating activities:
Depreciation, depletion and amortization.............................................. 127 128
Equity in results of affiliates and joint ventures, net of dividends received......... 65 82
Change in provision for losses on equity investments.................................. 38 20
Deferred income taxes................................................................. (114) (33)
Provisions for contingencies.......................................................... 69 66
Loss on disposals of property, plant and equipment.................................... 76 39
Gain on sale of investments........................................................... - (277)
Pension plan.......................................................................... 6 17
Foreign exchange and monetary (gains) losses.......................................... 466 371
Others............................................................................... 73 4
Decrease (increase) in assets:
Accounts receivable................................................................... (82) (57)
Inventor.............................................................................. (25) (5)
Others................................................................................ (30) (19)
Increase (decrease) in liabilities:
Suppliers ............................................................................ (14) 1
Payroll and related charges........................................................... 5 1
Others................................................................................ 6 (30)
-------- --------
Net cash provided by operating activities................................................ 927 762
-------- --------
Cash flows from investing activities:
Loans and advances receivable
Related parties
Additions......................................................................... (29) (30)
Repayments........................................................................ 29 83
Others............................................................................... 2 3
Guarantees and deposits.................................................................. (39) (48)
Additions to investments................................................................. (1) (16)
Additions to property, plant and equipment............................................... (317) (281)
Proceeds from disposals of property, plant and equipment................................. 1 1
Proceeds from disposal of investment..................................................... - 318
Net cash used to acquire subsidiaries.................................................... (45) (516)
-------- --------
Net cash used in investing activities.................................................... (399) (486)
-------- --------
Cash flows from financing activities:
Short-term debt, net issuances........................................................... 211 484
Loans
Related parties
Additions......................................................................... 12 53
Repayments........................................................................ (19) (36)
Long-term debt
Related parties....................................................................... 11 6
Others................................................................................ 513 242
Repayments of long-term debt
Related parties.......................................................................... (15) (19)
Others.... (140) (142)
Interest attributed to stockholders........................................................ (329) (639)
-------- --------
Net cash provided by (used in) financing activities........................................ 244 (51)
-------- --------
Increase in cash and cash equivalents...................................................... 772 225
Effect of exchange rate changes on cash and cash equivalents............................... (317) (77)
Cash and cash equivalents, beginning of period............................................. 1,117 1,211
-------- --------
Cash and cash equivalents, end of period................................................... 1,572 1,359
======== ========
Cash paid during the period for:
Interest on short-term debt .......................................................... (16) (14)
Interest, net of interest capitallized of $10 in 2002 and $5 in 2001 ................. (68) (101)
Income tax............................................................................ (4) 41
Non-cash transactions
Special pension plan contribution in shares of CSN.................................... - 249
Exchange of loans receivable for investments.......................................... 20 35
See notes to condensed consolidated financial information.
F - 6
Condensed Consolidated Statements of Changes in Stockholders' Equity
Expressed in millions of United States dollars
(except number of shares and per-share amounts)
Six months ended June 30,
------------------------------
2002 2001
----------- --------------
Shares (Unaudited)
-------------
Preferred class A stock (including one special share)
Balance January 1.............................................................. 138,575,913 820 820
Transfer from appropriated retained earnings................................... - 84 -
------------- ----------- --------------
Balance June 30, 2002 and 2001................................................. 138,575,913 904 820
------------- ----------- --------------
Common stock
Balance January 1.............................................................. 249,983,143 1,479 1,479
Transfer from appropriated retained earnings................................... - 151 -
------------- ----------- --------------
Balance June 30, 2002 and 2001................................................. 249,983,143 1,630 1,479
------------- ----------- --------------
Treasury stock
Balance January 1.............................................................. (4,719,921) (88) (61)
Sales in 2001.................................................................. - - 1
------------- ----------- --------------
Balance January 1.............................................................. (4,719,921) (88) (60)
------------- ----------- --------------
Additional paid-in capital
Balance January 1.............................................................. 498 498
----------- --------------
Other cumulative comprehensive income
Amounts not recognized as net periodic pension cost
Balance January 1.............................................................. - (100)
Excess of additional minimum liability......................................... - 151
Tax effect on above............................................................ - (51)
----------- --------------
Balance January 1.............................................................. - -
----------- --------------
Cumulative translation adjustments
Balance January 1.............................................................. (3,475) (2,972)
Change in the period........................................................... (778) (564)
----------- --------------
Balance January 1.............................................................. (4,253) (3,536)
----------- --------------
Unrealized gain on available-for-sale security
Balance January 1.............................................................. - 24
Change in the period .......................................................... - (11)
----------- --------------
Balance January 1.............................................................. - 13
----------- --------------
Adjustments relating to investments in affiliates
Balance January 1.............................................................. 10 8
Change in the period........................................................... - 2
----------- --------------
Balance January 1.............................................................. 10 10
----------- --------------
Total other cumulative comprehensive income.................................... (4,243) (3,513)
----------- --------------
Appropriated retained earnings
Balance January 1.............................................................. 3,212 3,537
Transfer to retained earnings.................................................. (235) (536)
Transfer to capital stock...................................................... (552) (311)
----------- --------------
Balance January 1.............................................................. 2,425 2,690
----------- --------------
Retained earnings
Balance January 1.............................................................. 2,184 1,648
Net income..................................................................... 261 454
Interest attributed to stockholders
Preferred class A stock ($0.39 per share in June 2002 and $0.68 in June 2001) (54) (92)
Common stock ($0.39 per share in June 2002 and $0.68 in June 2001)........... (97) (170)
Appropriation from reserves.................................................... 552 536
----------- --------------
Balance January 1................................................................ 2,846 2,376
------------- ----------- --------------
Total stockholders' equity..................................................... 383,839,135 3,972 4,290
============= =========== ==============
Comprehensive income is comprised as follows:
Net income..................................................................... 261 454
Amounts not recognized as net periodic pension cost............................ - 100
Cumulative translation adjustments............................................. (778) (564)
Unrealized loss on available-for-sale security................................. - (11)
Adjustments relating to investments in affiliates.............................. - 2
----------- --------------
Total comprehensive income..................................................... (517) (19)
=========== ==============
See notes to condensed consolidated financial information.
F - 7
Notes to the Condensed Consolidated Financial Information Expressed
in millions of United States dollars, unless otherwise stated
1 The Company and its operations
Companhia Vale do Rio Doce CVRD is a limited liability company, duly
organized and existing under the laws of the Federative Republic of
Brazil. Our operations are carried out through CVRD and its
subsidiary companies, joint ventures and affiliates, and mainly
consist of mining, non-ferrous metal production and logistics, as
well as forestry, aluminum and steel activities. Further details of
our operations and those of our joint ventures and affiliates are
described in Note 9.
The main consolidated operating subsidiaries are as follows:
Head office Principal
Subsidiary % ownership location activity
----------------------------------------------------------- ----------------- ------------------ -----------------------
Ferteco Mineracao S.A. - FERTECO 100 Brazil Iron ore and pellets
Para Pigmentos S.A. 80 Brazil Kaolin
SIBRA - Eletrosiderurgica Brasileira S.A. 98 Brazil Ferrous alloys
Navegacao Vale do Rio Doce S.A. - DOCENAVE 100 Brazil Shipping
Vale do Rio Doce Aluminio S.A. - ALUVALE 100 Brazil Aluminum
Itabira Rio Doce Company Ltd. - ITACO 100 Cayman Island Trading
Rio Doce International Finance Ltd. - RDIF 100 Bahamas International finance
CELMAR S.A. - Industria de Celulose e Papel 85 Brazil Forestry
Florestas Rio Doce S.A. 100 Brazil Forestry
Rio Doce Manganese Europe - RDME 100 France Ferrous alloys
Urucum Mineracao S.A. 100 Brazil Iron ore
2 Basis of consolidation
All majority-owned subsidiaries where we have both share and
management control are consolidated with elimination of all
significant intercompany accounts and transactions. Investments in
unconsolidated affiliates and joint ventures are reported at cost less
amortized goodwill plus our equity in undistributed earnings or
losses. Included in this category are certain joint ventures in which
we have majority ownership but, by force of shareholders' agreements,
do not have effective management control. We provide for losses on
equity investments with negative stockholders' equity and for other
than temporary decreases in market value below carrying value where
applicable.
3 Summary of significant accounting policies
Our condensed consolidated interim financial information as of June
30, 2002 and for the periods of six months ended June 30, 2002 and
2001 is unaudited. However, in our opinion, such condensed
consolidated financial information includes all adjustments,
consisting only of normal recurring adjustments, necessary for a fair
presentation of the results for interim periods. The results of
operations for the six month period ended June 30, 2002 are not
necessarily indicative of the results to be expected for the full
fiscal year ending December 31, 2002.
This condensed interim financial information should be read in
conjunction with our consolidated financial statements for the year
ended December 31, 2001.
4 Recently issued accounting pronouncement
In accordance with SFAS 142 "Goodwill and Other Intangible Assets", as
from January 1, 2002 (or immediately for acquisitions after June 30,
2001):
o Goodwill relative to consolidated subsidiaries is no longer
amortized, but is aggregated to reporting units and subject at
least annually to testing for impairment, considering the
reporting unit as a whole.
F - 8
o Goodwill relative to affiliates and joint ventures is no longer
amortized but is allocated to the respective investment and
included in the measurement of the gain or loss on sale, or the
loss arising from an other than temporary decline in the value of
the investment.
o Goodwill charged against earnings for the six months ended June
30, 2001 totaled $14 relating to subsidiaries and $8 relating to
equity investees which were classified as other operating
expenses and equity in results of affiliates and joint ventures,
respectively.
SFAS 144 "Accounting for the Impairment or Disposal of Long-Lived
Assets" has been applied as from January 1, 2002 and the provisions
thereof are applied prospectively.
5 Income tax
Income taxes in Brazil comprise federal income tax and social
contribution, which is an additional federal tax. The statutory
enacted tax rates applicable in the periods presented are as follows:
Six months ended June 30 - %
----------------------------
2002 2001
------------ --------------
Federal income tax ............................. 25.00 25.00
Social contribution (*) ........................ 9.00 9.00
------------ --------------
Composite tax rate ............................. 34.00 34.00
============ ==============
(*) From February 1, 2000 to December 31, 2002 the social contribution
rate is 9% and as from January 1, 2003 it will be 8%.
The amount reported as income tax benefit in this consolidated
financial information is reconciled to the statutory rates as
follows:
Six months ended June 30
----------------------------------
2002 2001
----------------- ----------------
Income before income taxes, equity results and minority interests......................... 196 382
================= ================
Federal income tax and social contribution expense at statutory enacted rates............ (67) (130)
Adjustments to derive effective tax rate:
Tax benefit on interest attributed to stockholders..................................... 43 89
Exempt foreign income.................................................................. 92 27
Tax incentives......................................................................... 2 34
Valuation allowance reversal (provision)............................................... 6 29
Adjustments to reflect expected annual effective rate.................................. 24 20
Other non-taxable gains ............................................................... 10 5
----------------- ----------------
Federal income tax and social contribution expense in consolidated
statements of income................................................................... 110 74
================= ================
In 2000, we obtained approval of certain tax incentives relative to
our iron ore and manganese operations in Carajas. The incentives
comprise full income tax exemption on defined production levels up to
2005 and partial exemption up to 2013. An amount equal to the tax
saving must be appropriated to a reserve account within stockholders'
equity and may not be distributed in the form of cash dividends.
F - 9
6 Inventories
June 30, 2002 December 31, 2001
------------- -----------------
Finished products
Iron ore .............................. 81 110
Gold ................................... 5 5
Manganese .............................. 21 27
Ferrous alloys ......................... 18 28
Others ................................. 31 16
Spare parts and maintenance supplies ...... 159 137
----------- ----------------
315 323
=========== ================
F - 10
7 Investments
June Equity
30, 2002 Investments Adjustments
------------------------------- --------------------- -------------
(1)Net
income Six months
(loss) ended June 30,
Participation (Net for the June December 31,------------
in capital (%) equity period 30, 2002 2002 2002 2001
-------------- ------ ------ -------- ---- ---- ----
Investments in affiliated companies and joint ventures voting total
Steel ------ -----
Usinas Siderurgicas de Minas Gerais S.A - USIMINAS (2)...... 22.99 11.46 140 (70) 16 32 (8) 1
Companhia Siderurgica Nacional - CSN (3) ................... - - - - - - - 9
Companhia Siderurgica de Tubarao - CST (4).................. 20.51 22.85 48 (22) 11 18 (5) -
California Steel Industries Inc. - CSI ..................... 50.00 50.00 208 13 104 98 6 (1)
Paper and pulp
Celulose Nipo-Brasileira S.A. - CENIBRA (3)................. - - - - - - - 9
Bahia-Sul Celulose S.A - BSC (3)........................... - - - - - - - 2
Aluminum and bauxite
Mineracao Rio do Norte S.A. - MRN........................... 40.00 40.00 377 47 151 154 19 13
Valesul Aluminio S.A. - VALESUL............................ 54.51 54.51 83 7 45 51 4 5
Alumina do Norte do Brasil S.A. - ALUNORTE ................. 62.18 57.58 - (51) - 89 (23) (19)
Pellets
Companhia Nipo-Brasileira de Pelotizacao - NIBRASCO........ 51.11 51.00 28 2 14 16 1 5
Companhia Hispano-Brasileira de Pelotizacao - HISPANOBRAS... 51.00 50.89 31 6 16 18 3 2
Companhia Coreano Brasileira de Pelotizacao - KOBRASCO ..... 50.00 50.00 (14) (14) - 2 (2) (4)
Companhia Italo-Brasileira de Pelotizacao - ITABRASCO....... 51.00 50.90 24 3 12 13 2 2
Gulf Industrial Investment Company - GIIC................... 50.00 50.00 68 5 34 38 3 3
SAMARCO Mineracao S.A....................................... 50.00 50.00 333 16 200 258 8 7
Others
Fertilizantes Fosfatados S.A. - FOSFERTIL (5)............... 10.96 10.96 220 20 24 29 2 1
Caemi Mineracao e Metalurgia S.A............................ 50.00 16.82 1,385 4 233 289 1 -
Salobo Metais S.A (6)....................................... 50.00 50.00 - - - 22 - -
Ferrovia Centro-Atlantica S.A - FCA......................... 20.00 45.65 - - - - - (16)
Others...................................................... 53 62 (1) (5)
-------- ---------------------------
913 1,189 10 14
Investments at cost
SIDERAR (market value $11and $31 in June 30, 2002
and 2001, respectively)................................... 4.85 4.85 11 15 - -
Unrealized holding gains on equity security................. - (4) - -
MRS Logistica S.A........................................... 17.19 9.76 - 22 (20) -
Others...................................................... 1 5 - -
-------- ---------------------------
925 1,227 (10) 14
======== ===========================
Change in provision for losses on equity investments:
Aluminio Brasileiro S.A. - ALBRAS........................... (12) (13)
Cia Ferroviaria do Nordeste ................................ (2) (7)
Companhia Coreano Brasileira de Pelotizacao - KOBRASCO ..... (5) -
Ferroban ................................................... (2) -
Ferrovia Centro-Atlantica S.A. - FCA ....................... (10) -
MRS Logistica S.A. ......................................... (7) -
--------------
(38) (20)
==============
(1) Based on US GAAP financial information.
(2) Value based on quoted market price at June 30, 2002 is $57 compared to net book value of $16.
(3) Investments sold in 2001
(4) Value based on quoted market price at June 30, 2002 is $114 compared to net book value of $11.
(5) Value based on quoted market price at June 30, 2002 is $37 compared to net book value of $24.
(6) Development stage enterprise
F - 11
Goodwill which is no longer amortized as from January 1, 2002 in
accordance with SFAS 142, included in the above investments is as
follows:
June 30, December 31,
Investee 2002 2001
---------------------------------------------------------- ------------------ ------------------
Alumina do Norte do Brasil S.A. - ALUNORTE .................................. -- 24
Samarco Mineracao S.A........................................................ 34 41
------------------ ------------------
34 65
================== ==================
Information with respect to other major affiliates' financial position
and results of operations is as follows:
CAEMI (*) ALUNORTE ALBRAS MRN
-------------------------------------------------------------------------------------------
June 30, December 31, June 30, December 31, June 30, December 31, June 30, December 31
2002 2001 2002 2001 2002 2001 2002 2001
--------- ------------ -------- ------------ -------- --------- ------------ -------------
Balance Sheet
Current assets................... 348 398 - 159 138 158 71 55
Mining rights.................... 1,084 1,325
Other noncurrent assets.......... 628 729 - 509 449 510 474 425
Current liabilities.............. (305) (307) - (95) (188) (219) (44) (35)
Noncurrent liabilities.......... (370) (427) - (431) (442) (463) (124) (59)
--------- ------------ -------- ------------ -------- --------- ------------ ---------------
Stockholders' equity............. 1,385 1,718 - 142 (43) (14) 377 386
========= ============ ======== ============ ======== ========= ============ ===============
Our participation................... 16.82% 16.82% - 45.58% 51.00% 51.00% 40.00% 40.00%
--------- ------------ -------- ------------ -------- --------- ------------ ---------------
Investments......................... 233 289 - 65 (22) (7) 151 154
========= ============ ======== ============ ======== ========= ============ ===============
Six months ended June 30
-----------------------------------------------------------------------------------
CAEMI ALUNORTE ALBRAS MRN
------------ --------------------- -----------------------------------------------
2002 2002 2001 2002 2001 2002 2001
------------ -------- ------------ -------- --------- ------------ ---------------
Statement of Operations
Net sales........................ 360 138 157 260 272 75 95
Costs and expenses............... (349) (189) (197) (284) (297) (14) (53)
Income (loss) before income
taxes ........................ 11 (51) (40) (24) (25) 61 42
Income taxes..................... (8) - - - - (9) (4)
Equity in results of affiliates.. 1 - - - - (5) (6)
------------ -------- ------------ -------- --------- ------------ ---------------
Net income (loss) 4 (51) (40) (24) (25) 47 32
============ ======== ============ ======== ========= ============ ===============
Our participation .................. 16.85% 44.96% 47.82% 51.00% 51.00% 40.00% 40.00%
Participation in results............ 1 (23) (19) (12) (13) 19 13
Change in provision for losses...... - - - - 13 - -
------------ -------- ------------ -------- --------- ------------ ---------------
Equity in results................... 1 (23) (19) (12) - 19 13
============ ======== ============ ======== ========= ============ ===============
(*) The fair value allocation of the initial investment in Caemi is still
under analysis.
The provision for losses on equity investments of $38 and $9 at June
30, 2002 and December 31, 2001, respectively, relates to our
investments in affiliates which have reported negative stockholders'
equity in their financial statements prepared in accordance with US
GAAP and in circumstances where we have assumed commitments to fund
our share of the accumulated losses, if necessary, through additional
capital contributions or other means. Accordingly we (a) first reduce
the value of the investment to zero and (b) subsequently provide for
our portion of negative equity. The provision is comprised as follows:
F - 12
Cia
Coreano- Ferrovia Cia
MRS Brasileira de Centro- Ferroviaria
Ferroban Logistica Pelotizacao Atlantica do Nordeste ALBRAS TOTAL
------------ -------------------------------------------------------------------- ----------
Provision at January 1, 2001 - - - - - (15) (15)
Change in provision - results - - - - - (13) (13)
------------ ------------ ---------------- ------------ ----------- ------------ ----------
- - - - - (28) (28)
Payment of capital - - - - - - -
Translation adjustment - - - - - 3 3
------------ ------------ ---------------- ------------ ----------- ------------ ----------
Provision at June 30, 2001 - - - - - (25) (25)
============ ============ ================ ============ =========== ============ ==========
Provision at January 1, 2002 - - - - (2) (7) (9)
Change in provision - results (2) (7) (5) (10) (2) (12) (38)
------------ ------------ ---------------- ------------ ----------- ------------ ----------
(2) (7) (5) (10) (4) (19) (47)
Payment of capital - - - 10 2 - 12
Translation adjustment - - (1) - 1 (3) (3)
------------ ------------ ---------------- ------------ ----------- ------------ ----------
Provision at June 30, 2002 (2) (7) (6) - (1) (22) (38)
============ ============ ================ ============ =========== ============ ==========
Dividends received from investees aggregated $55 and $96 in six month periods
ended June 30, 2002 and 2001, respectively.
8 Commitments and contingencies
(a) At June 30, 2002, we had extended guarantees for borrowings obtained
by affiliates and joint ventures in the amount of $531, of which $417
is denominated in United States dollars and the remaining $114 in
local currency. These guarantees include $357 relative to ALBRAS.
(b) We are defendants in numerous legal actions in the normal course of
business. Based on the advice of our legal counsel, management
believes that the provision made against contingent losses is
sufficient to cover probable losses in connection with such actions.
The provision for contingencies and the related judicial deposits are
composed as follows:
June 30, 2002 December 31, 2001
---------------------------------- ----------------------------------
Provisions for Judicial Provisions for Judicial
contingencies deposits contingencies deposits
------------------ -------------- ------------------ --------------
Labor claims........................ 144 54 147 50
Civil claims........................ 102 37 123 53
Tax - related actions .............. 193 141 177 131
Others.............................. 8 2 5 1
------------------ -------------- ----------------- ---------------
447 234 452 235
================== ============== ================= ===============
Long-term........................... 447 234 452 235
================== ============== ================= ===============
Labor -related actions principally comprise employee claims for (i)
payment of time spent travelling from their residences to the
work-place, (ii) additional payments for alleged dangerous or
unhealthy working conditions and (iii) various other matters, often in
connection with disputes about the amount of indemnities paid upon
dismissal.
Civil actions principally relate to claims made against us by
contractors in connection with losses alleged to have been incurred by
them as a result of various past government economic plans during
which full indexation of contracts for inflation was not permitted.
Tax-related actions principally comprise our challenges of changes in
basis of calculation and rates of certain revenue taxes and of the tax
on financial movements - CPMF.
F - 13
We continue to vigorously pursue our interests in all the above
actions but recognize that probably we will incur some losses in the
final instance, for which we have made provisions.
Our judicial deposits are made as required by the courts for us to be
able to enter or continue a legal action. When judgment is favorable
to us, we receive the deposits back; when unfavorable, the deposits
are delivered to the prevailing party.
Contingencies settled in the six months period ended June 30, 2002
and 2001 aggregated $40 and $22, respectively, and additional
provisions aggregated $102 and $107 in the six months periods ended
June 30, 2002 and 2001, respectively.
(c) We are defendants in two actions seeking substantial compensatory
damages brought by the Municipality of Itabira, State of Minas
Gerais, which we believe are without merit. Due to the remote
likelihood that any loss will arise therefrom no provision has been
made in the financial statements with respect to these two actions.
(d) We are committed under a take-or-pay agreement to take delivery of
approximately 207,060 metric tons per year of aluminum from ALBRAS at
market prices. This estimate is based on 51% of ALBRAS expected
production and, at a market price of $1,375.00 per metric ton at June
30, 2002, represents an annual commitment of $285. We are also
committed to take-or-pay 683,135 metric tons per year of alumina
produced by ALUNORTE which at a market price of $170.28 per metric ton
at June 30, 2002, represents an annual commitment of $116. Actual take
from ALBRAS was $128 during the six month periods ended June 30, 2002
and 2001, and direct from ALUNORTE (net of take ceded to ALBRAS) was
$23 and $14 during the six month periods ended June 30, 2002 and 2001
respectively.
(e) We and BNDES entered into a contract, known as the Mineral Risk
Contract, in June 1997, relating to prospecting authorizations for
mining regions where drilling and exploration are still in their
early stages. The Mineral Risk Contract provides for the joint
development of certain unexplored mineral deposits in approximately
two million identified hectares of land in the Carajas region, as
well as proportional participation in any financial benefits earned
from the development of such resources. Iron ore and manganese
deposits already identified and subject to development are
specifically excluded from the Mineral Risk Contract.
(f) At the time of our privatization in 1997, we issued shareholder
revenue interests known in Brazil as "debentures" to our
then-existing shareholders, including the Brazilian Government. The
terms of the "debentures", which are more fully described in our
consolidated financial statements for the year ended December 31,
2001, were set to ensure that our pre-privatization shareholders,
including the Brazilian Government, would participate alongside us in
potential future financial benefits that we are able to derive from
exploiting our mineral resources.
(g) At June 30, 2002 we have provided $27 for environmental liabilities.
Such provisions relate to site restoration at mines already closed or
which are expected to be closed in the next two years.
We use various judgments and assumptions when measuring our
environmental liabilities. Changes in circumstances, law or
technology may affect our estimates and we periodically review the
amounts accrued and adjust them as necessary. Our accruals do not
reflect unasserted claims because we are currently not aware of any
such issues. Also the amounts provided are not reduced by any
potential recoveries under cost sharing, insurance or indemnification
arrangements because such recoveries are considered uncertain.
F - 14
9 Segment and geographical information
Consolidated net income and principal assets are reconciled as follows:
June 30, 2002
---------------------------------------------------------------------
Holdings
-------------------
Non Fores- Alu- Eli- Consoli-
Ferrous ferrous Logistics try minum Steel minations dated
------- ------- --------- ----- ----- ----- --------- -----
RESULTS
Revenues - Export............................................ 2,001 86 19 - 167 - (853) 1,420
Revenues - Domestic.......................................... 485 43 179 3 - - (72) 638
Cost and expenses............................................ (2,086) (113) (153) (8) (165) (24) 925 (1,624)
Interest revenue............................................. 93 - 6 - 4 1 (27) 77
Interest expense............................................. (196) (3) (3) - - (4) 27 (179)
Depreciation................................................. (98) (19) (9) (1) - - - (127)
Pension plan................................................. (6) - - - - - - (6)
Equity....................................................... 14 - (42) - (12) (8) - (48)
Income taxes................................................. 113 - (1) - (2) - - 110
--------- ------ ------ ------- ------- ------ --------- ---------
Net income................................................... 320 (6) (4) (6) (8) (35) - 261
========= ====== ====== ======= ======= ====== ========= =========
Sales classified by geographic destination:
Export market
Latin America................................................ 217 - 12 - 13 - (125) 117
United States................................................ 147 29 3 - 1 - (85) 95
Europe....................................................... 851 55 2 - 142 - (324) 726
Middle East.................................................. 85 - - - - - (11) 74
Japan........................................................ 243 1 - - - - (113) 131
Asia, other than Japan....................................... 458 1 2 - 11 - (195) 277
--------- ------ ------ ------- ------- ------ --------- ---------
2,001 86 19 - 167 - (853) 1,420
Domestic market.............................................. 485 43 179 3 - - (72) 638
--------- ------ ------ ------- ------- ------ --------- ---------
2,486 129 198 3 167 - (925) 2,058
========= ====== ====== ======= ======= ====== ========= =========
Assets :
Property, plant and equipment, net........................... 2,709 392 252 83 410 - - 3,846
Capital expenditures......................................... 283 18 26 - - - - 327
Investments in affiliated companies
and joint ventures and other investments..................... 573 - (2) - 174 142 - 887
========= ====== ====== ======= ======= ====== ========= =========
Capital employed............................................. 2,036 345 248 40 266 18 539 3,492
EBITDA....................................................... 747 38 90 - 24 1 - 900
F - 15
June 30, 2001
---------------------------------------------------------------------
Holdings
-------------------
(3)
Non Fores- Alu- Eli- Consoli-
Ferrous ferrous Logistics try minum Steel minations dated
------- ------- --------- ----- ----- ----- --------- -----
RESULTS
Revenues - Export.............................................. 1,617 81 97 49 160 - (609) 1,395
Revenues - Domestic............................................ 501 44 198 6 - - (110) 639
Cost and expenses.............................................. (1,911) (103) (188) 128 (152) 107 719 (1,400)
Interest revenue............................................... 87 9 - 6 - - (37) 65
Interest expense............................................... (193) (7) (5) - - - 37 (168)
Depreciation................................................... (98) (17) (12) (1) - - - (128)
Pension plan................................................... (14) (2) (1) - - - - (17)
Equity......................................................... 14 - (29) 11 (14) 12 - (6)
Income taxes................................................... 75 - - (1) - - - 74
-------- ------ ----- ------- ----- ----- ------- ------
Net income..................................................... 78 5 60 198 (6) 119 - 454
======== ====== ===== ======= ===== ===== ======= =====
Sales classified by geographic destination:
Export market
Latin America.................................................. 171 - 38 - 8 - (92) 125
United States.................................................. 79 60 9 43 22 - (41) 172
Europe......................................................... 627 19 35 6 107 - (193) 601
Middle East.................................................... 103 - - - - - (11) 92
Japan.......................................................... 261 2 9 - 12 - (112) 172
Asia, other than Japan......................................... 376 - 6 - 11 - (160) 233
-------- ------ ----- ------- ----- ----- ------- ------
1,617 81 97 49 160 - (609) 1,395
Domestic market................................................ 501 44 198 6 - - (110) 639
-------- ------ ----- ------- ----- ----- ------- ------
2,118 125 295 55 160 - (719) 2,034
======== ====== ===== ======= ===== ===== ======= =====
Assets :
Property, plant and equipment, net............................. 2,924 271 345 131 - - - 3,671
Capital expenditures........................................... 246 18 16 1 - - - 281
Investments in affiliated companies
and joint ventures and other investments....................... 460 22 135 173 224 208 - 1,222
======= ============= =============== ===========================
Capital employed............................................... 3,043 264 363 115 (12) - - 3,773
EBITDA......................................................... 695 35 114 - 26 25 - 895
(1) - Includes $170 profit on sale of Bahia Sul Celulose S.A. - BSC.
(2) - Includes $107 profit on sale of Companhia Siderurgica Nacional - CSN.
(3) - Up to September 2001 includes pulp and paper operation.
For more information on segments see the segment disclosures included in our
consolidated financial statements for the year ended December 31, 2001.
10 Derivative financial instruments
Volatility of interest rates, exchange rates and commodity prices are
the main market risks to which we are exposed - all three are managed
through derivative operations. These have the exclusive aim of
reducing exposure to risk. We do not use derivatives for speculation
purposes.
We monitor and evaluate our derivative positions on a regular basis
and adjust our strategy in response to market conditions. We also
periodically review the credit limits and credit worthiness of our
counter-parties in these transactions. In view of the policies and
practices established for operations with derivatives, management
considers the occurrence of non-measurable risk situations as
unlikely.
As from January 1, 2001 we adopted SFAS 133 "Accounting for
Derivative Financial Instruments and Hedging Activities", as amended
by SFAS 137 and SFAS 138, and began to recognize all derivatives on
our balance sheet at fair value. Accordingly we recognized an initial
transition adjustment of $3 as a charge in our statement of income
relative to net unrealized losses on contracts open as of December
31, 2000. Subsequently to January 1, 2001 all derivatives have been
adjusted to fair market value at each balance sheet date and the
change included in current earnings.
F - 16
For the six month periods ended June 30, 2002 and 2001 the movement
of unrealized and realized gains or losses on derivative financial
instruments is as follows:
Net Gains (losses)
-------------------------------------------------
Gold Interest rates (Currencies Total
---------- --------------------------- ----------
Initial unrealized gains and losses at January 1, 2001 ........... 9 (8) (4) (3)
Change in the period ............................................. 21 (31) (11) (21)
(Gains) and losses realized in the period ........................ (4) 2 3 1
---------- ------------- ------------- ----------
Unrealized gains and (losses) at June 30, 2001 ................... 26 (37) (12) (23)
========== ============= ============= ==========
Unrealized gains and losses at January 1, 2002 .................. 7 (36) (4) (33)
Change in the period ............................................ (11) 21 3 13
(Gains) and losses realized in the period ....................... 1 (13) (1) (13)
---------- ------------- ------------- ----------
Unrealized gains and (losses) at June 30, 2002 .................. (3) (28) (2) (33)
========== ============= ============= ==========
Realized and unrealized gains and losses are included in our income
statement under the following captions:
Gold - other operating costs and expenses; Interest rates - financial
expenses; Currencies - foreign exchange and monetary losses, net.
Final maturity dates for the above instruments are as follows:
Gold.......................................................... December 2006
Interest rates (libor)........................................ May 2007
Currencies.................................................... May 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 ourselves 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 each balance sheet date and the
effect included in financial income or expense. During the six months
ended June 30, 2002 and 2001 our use of such instruments was not
significant.
F - 17
(b) Commodity Price Risk
We also use derivative instruments to manage exposure to changing
gold prices. Derivatives allow the fixing of an average minimum
profit level for future gold production. However, they may also have
the effect of eliminating potential gains on certain price increases
in the spot market for gold. We manage our contract positions
actively, and the results are reviewed at least monthly, allowing
adjustments to targets and strategy to be made in response to
changing market conditions.
In the case of gold derivatives, our policy has been to settle all
contracts through cash payments or receipts, without physical
delivery of product.
Our affiliates Albras and Alunorte manage the risk of fluctuating
aluminum prices using derivatives, allowing an average minimum profit
level for future production and ensuring stable cash generation.
However, they may also have the effect of eliminating potential gains
on certain price increases in the spot market for aluminum. We
account for both affiliates using the equity method.
In December 2000, we introduced a new risk management system to
evaluate, measure and manage the market risk associated with our
financial activities, using the value-at-risk - VAR method. VAR
incorporates a variety of risk factors which affect our results,
including commodity prices, interest and exchange rate volatilities,
as well as the correlation between all these variables.
11 Long-term Debt
On March 8, 2002, we issued $300 of 8.625% Enhanced Guaranteed Notes
due March 8, 2007.
In March 2002, the BNDES sold shares it held in CVRD and at June
30,2002 was no longer considered a related party.
12 Subsequent events
(a) Sale of Pulp Assets
On June 10, 2002, CVRD and its subsidiary Florestas Rio Doce S.A
(FRDSA) signed a letter of intent for the sale of assets (planted
eucalyptus forest lands) owned by FRDSA in the Sao Mateus region of
the state of Espirito Santo, to Aracruz Celulose S.A. (Aracruz) and
Bahia Sul Celulose S.A. (Bahia Sul).
The completion of this sale is conditional on a forest, legal and
financial audit, negotiation and formalization of all the contracts
and other documents necessary for the transaction.
(b) CVRD and Antofagasta establish a Joint Venture
On July 19, 2002, CVRD and Antofagasta Plc (Antofagasta), one of the
largest copper producers in Chile, constituted Cordillera de las
Minas S.A. (Cordillera), whose purpose is to develop mineral research
and exploration activities in the south of Peru, near Cuzco. The area
of potential mining covers approximately 60 thousand square
kilometers.
On July 18, 2002 CVRD received the option to acquire up to 50% of the
capital of Cordillera, which holds the rights to mineral exploration
in the area mentioned above, through a $7 investment over a
three-year period for geological research and exploration of
Cordillera, and the right to significant influence over the
operations of Cordillera, particularly in relation to the future
investments.
(c) Acquisition of Mineracao Vera Cruz (MVC)
On July 1, 2002 CVRD acquired the remaining 64% of the shares of
MVC, from Parapanema group for $2.
F - 18
Members of the Board of Directors, Audit Committee, Chief Executive Officer and
Executive Directors
--------------------------------------------------------------------------------
Board of Directors Chief Executive Officer
Luiz Tarquinio Sardinha Ferro Roger Agnelli
Chairman
Erik Persson Director of Legal Affairs
Francisco Rohan de Lima
Renato Augusto Zagallo Villela dos Santos
Francisco Valadares Povoa Diretor de Desenvolvimento de Projetos Minerais
Jose Lancaster
Joao Moises Oliveira
Jose Marques de Lima Executive Director of Finance
Fabio de Oliveira Barbosa
Octavio Lopes Castello Branco Neto
Renato da Cruz Gomes Executive Director of Planning
Gabriel Stoliar
Romeu do Nascimento Teixeira
Executive Director of Human Resources and
Audit Commitee Corporate Services
Claudio Bernardo Guimaraes de Moraes Carla Grasso
Eliseu Martins
Executive Director of the Iron Ore Area
Marcos Fabio Coutinho Armando de Oliveira Santos Neto
Pedro Carlos de Mello
Executive Director of Logistics Area
Ricardo Wiering de Barros Guilherme Rodolfo Laager
Executive Director of the Shareholdings Area and
Businesses Development
Antonio Miguel Marques
Executive Director of Non-Ferrous Area
Diego Cristobal Hernandez Cabrera
Eduardo de Carvalho Duarte Otto de Souza Marques Junior
Chief Accountant Director of Control
CRC-RJ 57439
F - 19
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
COMPANHIA VALE DO RIO DOCE
(Registrant)
Date: August 16, 2002
By: /s/ Eduardo de Carvalho Duarte
------------------------------
Eduardo de Carvalho Duarte
Chief Accountant