VALLEY OF THE RIO DOCE COMPANY
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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

May 2005

Valley of the Rio Doce Company

(Translation of Registrant’s name into English)

Avenida Graça 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 of Form 20-F or Form 40-F.)

(Check One) Form 20-F þ Form 40-F o

(Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1))

(Check One) Yes o No þ

(Indicate by check mark if the registrant is submitting the Form 6-K in paper

as permitted by Regulation S-T Rule 101(b)(7))

(Check One) Yes o No þ

(Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.)

(Check One) Yes o No þ

(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
Report on Form 6-K
 
Table of Contents
   
PERFORMANCE OF COMPANHIA VALE DO RIO DOCE IN THE FIRST QUARTER OF 2005 (BRAZILIAN GAAP)  
MANAGEMENT REPORT  
INDEX TO CONSOLIDATED FINANCIAL INFORMATION (BRAZILIAN GAAP)  
SIGNATURES  


Table of Contents

(CVRD LOGO)

(QUARTERLY INFORMATION BRGAAP GRAPHICS)

Gerência Geral de Controladoria — GECOL

 


Table of Contents

(BR GAAP LOGO)

(COMPANHIA VALE DO RIO DOCE LOGO)

BOVESPA: VALE3, VALE5
NYSE: RIO, RIOPR
LATIBEX: XVALO, XVALP

THE PERFORMANCE OF COMPANHIA VALE

DO RIO DOCE IN THE FIRST QUARTER OF 2005


The financial and operational information contained in this press release, except where otherwise indicated, was consolidated in accordance with Brazilian generally accepted accounting principles (Brazilian GAAP). According to the criteria of Brazilian GAAP, those companies in which CVRD has effective control, or shared control as defined by shareholders agreement, are included in the consolidated figures. In the instances where CVRD has effective control, the consolidation is carried out on a 100% basis and the difference between this amount and the percentage of CVRD’s equity stake in the subsidiary is discounted at the minority shareholding line. CVRD’s main subsidiaries are Caemi, Alunorte, Albras, RDM, RDME, RDMN, Urucum Mineração, Docenave, Ferrovia Centro-Atlântica (FCA), Rio Doce Europa, Itaco, CVRD Overseas and Rio Doce International Finance. For companies in which control is shared, the consolidated figures are proportional to the equity stake held by CVRD in each company. The main companies in which CVRD has shared control are MRN, Valesul, Kobrasco, Nibrasco, Hispanobras, Itabrasco, GIIC, Samarco and CSI. From this quarter onwards, CVRD will be publishing financial and operational figures based on consolidated financial statements in Brazilian GAAP on a quarterly basis.

DELIVERING A STRONG PERFORMANCE

Rio de Janeiro, May 11, 2005 — Companhia Vale do Rio Doce (CVRD) hereby reports net earnings of R$ 1.615 billion for the first quarter 2005 (1Q05), which corresponds to earnings per share of R$ 1.40. The net earnings in 1Q05 were 69.3% higher than the one reported in 1Q04, of R$ 954 million.

The return on equity (ROE), calculated on an annualized quarterly earnings basis, amounted to 32.7%, compared to 24.7% in 1Q04.

Gross revenues amounted to R$ 7.052 billion, an increase of 18.9% in relation to 1Q04.

Consolidated exports amounted to US$ 1.336 billion, a yoy increase of 22.8%. The performance of the Company foreign sales consolidates its position as the largest exporter of Brazil.

Net exports (exports less imports) amounted to 1.095 billion, an increase of 17.5% compared to 1Q04. CVRD continues to make a relevant contribution to the Brazilian trade balance, accounting for 13.2% of the US$ 8.3 billion surplus obtained in this quarter.

Operational performance, as measured by EBIT (earnings before interest expenses and taxes), amounted to R$ 2.376 billion, 33.5% higher than the EBIT of 1Q04, of R$ 1.780 billion. Operating margin amounted to 35.3%, higher than that obtained in 1Q04, of 31.4%.

Cash generation, as measured by EBITDA (earnings before interest expenses, taxes, depreciation and amortization), amounted to R$ 2.849 billion, a yoy increase of 17.0%.

(1T05)

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(BR GAAP LOGO)

CVRD delivered very good results in 1Q05 in spite of adverse conditions, caused by (i) the strengthening of the Brazilian Real against the US dollar, (ii) cyclical cost pressures in labor, energy, raw materials, parts and equipment, and (iii) most importantly, the strong seasonal impact of the summer rains on mining production and the performance of the railroads. The new prices of iron ore and pellets negotiated with clients for 2005 are not reflected in the figures for 1Q05.

The Company’s capital expenditure, according to the generally accepted accounting principles in the United States (US GAAP), in 1Q05 was US$570.3 million, of which US$430.7 million, or 75.5%, was investment in growth — that is to say, greenfield and brownfield projects and research & development.

The Fábrica Nova mine started operating in April — adding one more platform for value creation. In the last 12 months CVRD has started up three iron ore capacity expansion projects: Carajás 70 Mtpy, Capão Xavier and Fábrica Nova. Meanwhile, in 2004 the third pier of the Ponta da Madeira Port was launched and the Company continues to invest in iron ore logistics infrastructure, increasing the capacity of its railroads and maritime terminals.

SELECTED FINANCIAL INDICATORS

                         
R$ million  
    1Q04     1Q05     %  
    (A)     (B)     (B/A)  
Gross operating revenues
    5,930       7,052       18.9  
Gross margin (%)
    44.1 %     43.7 %        
Net earnings
    954       1,615       69.3  
Net earnings per share (R$)
    0.83       1.40       68.7  
EBITDA
    2,436       2,849       17.0  
EBIT
    1,780       2,376       33.5  
EBIT margin (%)
    31.4 %     35.3 %        
Annualized ROE (%)
    24.7 %     32.7 %        
Exports (US$ million)
    1,088       1,336       22.8  

BUSINESS OUTLOOK

The world economy continues to expand. After averaging 6% per year between late 2003 and early 2004, global GDP growth slowed, in the context of a natural transition to a sustainable path.

The current expansion present some imbalances, with the US and China being the engines of the growth. The Chinese economy continues to expand more strongly than expected, in spite of the restraining measures. China’s GDP growth rate was 9.5% in 1Q05, its seventh successive quarter of expansion at a higher rate than 9%.

The economies of Europe and Japan are growing much less than previously expected. Their performance is excessively dependent on exports, which suffer the adverse effect of the strengthening of the euro and the yen, since domestic demand in the Euro Zone and Japan is growing very slowly.

The emerging economies continue to grow at higher rates than in prior recent years, although more slowly than in 2004.

(1T05)

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(BR GAAP LOGO)

Brazil accompanies the general trend of these economies, with its Central Bank responding to an increase in inflation rates by applying a contractionary monetary policy, and a fiscal policy that continues to post higher than expected primary surpluses. The increase in the current account surplus of the balance of payments, the result of vigorous growth of exports, will result in the Brazilian Real remaining strong in the coming months even while the current tightening cycle in domestic interest rates is gradually eased.

In spite of the moderation of global growth, oil prices remain high, with considerable volatility - reflecting strong demand, the uncertainties on Opec’s output plans, declines in production in the rest of the world and the low level of idle capacity.

The fundamentals of the global economy do not, however, justify pessimistic forecasts for the near future. Inflation rates continue to be contained, real interest rates are close to zero, and unless some supply shock and/or acceleration of economic growth takes place, the probability of a further sharp increase in oil prices is low.

World crude steel production was 6.5% higher year-on-year in first quarter 2005, compared to 8.8% growth in the whole of 2004. Chinese production was 23.8% higher year-on-year — accounting for 91% of worldwide expansion in this period.

We now expect to see some slowdown in the world steel production growth rate, reflecting forecasts of slower expansion of demand for finished steel products. The IISI expects consumption of these products to exceed 1 billion tons/year in 2005 for the first time in history, 3.7% higher than in 2004. In 1994-2004 apparent steel consumption, worldwide, grew at an annual average rate of 4.4%, increasing to 7.9% in the recent phase of 2001-2004.

The continuing substantial growth of China’s steel production contribute to an increase in its iron ore imports by 24% year-on-year in the first quarter, to an annualized level of 256 million tons, compared to 208 million tons in 2004. Iron ore inventories are at levels considered to be normal, and the differential between Brazil-Asia and Australia-Asia maritime freight rates, an indicator of demand, continues to break records.

China’s fixed assets investment is increasing at a rate of approximately 25%, much higher than the 16% target established by the Chinese government for 2005. Since investment in fixed assets is a good leading indicator for Chinese steel consumption, derivative demand for iron ore is expected to continue to expand significantly.

In alumina, the disequilibrium between demand and supply continues, reflected in the high spot price levels, around US$400 per ton FOB. The additional capacity programmed to come on stream does not make it possible to forecast correction of this imbalance at least until the end of 2005.

Aluminum inventories continued to decline, and are currently at eight weeks’ consumption, compared to almost 11 weeks at the beginning of 2004, and the high prices of alumina restrains expansion of output.

The increase in copper concentrate production since the second half of 2004, and the slow ramp-up of smelters’ production, is contributing to the considerable increase in prices charged (TC/RC) for transformation into metal. Refined copper stocks are at historically very low levels and, we believe, unlikely to change significantly during the year, tending to sustain copper prices.

CVRD continues to develop capacity expansion projects and seek increases in productivity, to benefit from the favorable world situation.

The Fábrica Nova iron ore mine, with nominal production capacity of 15 million tons/year, began operating in April. It is the third CVRD iron ore project to come on stream over the last twelve months.

(1T05)

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(BR GAAP LOGO)

Over time, the Company has succeeded in growing and providing good results independently of economic cycles. According to CRU, CVRD is number one metals and mining company in total shareholder return over the last ten years. To maintain this performance in the future, CVRD has developed a complete program to promote excellence in project execution, maintenance and operation.

TEOR, one of the programs in this initiative, aims to assess the operation of each of CVRD’s mines, identifying any inefficiencies and correcting them, so as to achieve marginal increases in production in each one, without incurring the cost of investments in additional capacity.

(LOGO) IMPORTANT RECENT EVENTS

Improving risk perception

CVRD increased its committed bank facilities, from US$500 million to US$750 million, building in lengthened maturities and lower costs.

A US$400 million line, with availability of one year for drawdown and one year for payment, was replaced by another of US$650 million, with availability for two years and payment time of two years. The cost consists of a commitment fee of 0.3%, and in the event of use of the line, Libor plus 0.75% p.a.

The Company has not used this credit line since the program began in May 2004.

The facility allows greater efficiency in cash management and increases risk perception, consistently with the strategy focus on reduction of cost of capital. There are no restrictions to the use of the facility linked to country risk.

Remuneration of shareholders and debenture holders

On April 29 CVRD paid R$ 1.11 per share to its common and preferred shareholders, the first installment of the minimum dividend for 2005, as announced on January 31. The total distributed was R$ 1.28 billion.

The remuneration to holders of CVRD’s “shareholders debentures”, R$0.019005992 per debenture, totaling R$ 7 million, was paid on April 1.

Ferrous minerals

•   Iron ore price negotiation for 2005 completed

With the agreement made on March 31 with ThyssenKrupp, Germany’s largest steelmaker, to increase the price of Carajás lumps by 79%, negotiation of prices for the principal iron ore products for 2005 was completed.

•   New contracts for supply of pellets and ferro-alloys

CVRD signed a contract to supply 2.66 million tons of direct reduction pellets for six years to Qatar Iron and Steel company (QASCO), one of the largest steel producers in the Middle East. A contract with Huttenwerke Krupp Mannesmann GmbH, a subsidiary of ThyssenKrupp, was signed for supply of 20,000 tons/year of manganese ferro-alloys, for two years. This contract follows the new trend in the commercial relationship between producers of ferro-alloys and their clients, aiming to optimize planning of output by both parties.

(1T05)

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(BR GAAP LOGO)

  •   Fábrica Nova mine starts up

The Fábrica Nova iron ore mine, in the Mariana region of Minas Gerais state, in the Brazilian Southern System, began operating in April. Its production capacity is 15 million tons/year; estimated production for 2005 is 10 million tons.

  •   Carajás 100 Mtpy

CVRD’s Board of Directors approved the project to increase Carajás iron ore production capacity to 100 million tons/year. This project is in the phase of detailed planning of engineering and initiating the equipment, works and services supply processes. Conclusion is scheduled for 2007.

  •   Mining rights

The company bought Mineração Estrela do Apolo, holder of mining rights on the reserves at Maquiné, in the iron ore quadrangle in Minas Gerais State, for US$9.3 million. Maquiné has reserves of iron ore and bauxite.

  (LOGO)   SALES VOLUMES AND REVENUES

CVRD’s gross revenues in 1Q05, of R$ 7.052 billion, were 18.9% higher than in 1Q04. The appreciation of the Real against the US dollar has a negative impact on the CVRD ´s gross revenues in Real currency, given that 86% of it is denominated or indexed to the US dollar.

The increase of R$ 1.122 billion in 1Q05 revenues, compared to 1Q04, was mainly due to higher prices, which contributed with R$ 1.499 billion. The startup of the Sossego copper mine in June 2004 also had a positive impact on CVRD’s gross revenues in 1Q05, generating R$ 200 million in revenues. On the other hand, the 7.8% appreciation of the Real against the US dollar and the divestiture of the company’s stake in CST reduced gross revenues by R$ 421 million and R$ 272 million, respectively.

In this quarter, Asia became CVRD’s major destination of sales with 26.4% of the total revenues, surpassing Europe, which accounted for 25.9%. Brazil is the most important country for CVRD’s sales destination, accounting for 25.0% of the total revenues in 1Q05.

China presented the highest rate of sales revenue growth, 44.7% yoy. The sales revenues to the USA increased by 23.2% yoy. Japan showed the lowest rate of sales revenue growth, 7.9% yoy.

In 1Q05 the gross margin achieved 43.7%, compared to 44.1% in 1Q04. The decrease was mainly due to a 22.4% raise in sales taxes, resulted from the increase of copper concentrates and alumina shipments to the domestic market.

  •   Ferrous minerals

Revenues from the sale of ferrous minerals — iron ore, pellets, manganese ore and ferro-alloys — in 1Q05 amounted to R$ 4.440 billion, higher than that obtained in 1Q04, of R$ 3.576 billion. Iron ore shipments generated R$ 2.753 billion, pellets R$ 1.167 billion, Tubarão pellet plant operation services R$ 21 million, manganese ore R$ 63 million and ferro-alloys R$ 435 million.

(1T05)

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(BR GAAP LOGO)

The figures for revenue from shipments of iron ore and pellets do not reflect the new prices agreed for 2005.

In spite of the heavy rains that affected the iron ore production of Carajás, iron ore and pellet shipments in 1Q05, at 58.884 million tons, were 11.5% higher than in the first quarter of 2004.

Shipments summed 49.159 million tons of iron ore and 9.725 million tons of pellets, a yoy increase of 13.3% and 3.2%, respectively.

During this quarter CVRD acquired 4.4 million tons of iron ore from other mining companies located in the Iron Ore Quadrangle in Brazil’s State of Minas Gerais, to complement its production and fulfill client contracts. These purchases totaled 15.9 million tons in 2004, being 3.3 million tons in the first quarter.

In 1Q05, 19.5% (11.5 million tons) of CVRD’s total volume of iron ore and pellets sold was shipped to China, 10.0% to Germany, 9.8% to Japan, 4.4% to France and 4.2% to South Korea. Sales to Brazil, 11.2 million tons, accounted for 19.0% of total sales volume.

Sales of manganese ore amounted to 198,000 tons in 1Q05, an increase of 23.0% yoy.

Sales of ferro-alloys amounted to 136,000 tons, down 33.0% compared to 1Q04, when shipments of ferro-alloys set a record of 203,000 tons, not only as a result of the fact that the Mo I Rana plant, in Norway, was operating at full capacity, but also due to the draw-down of existing stock levels.

•   Aluminum chain

The products in the Company’s aluminum chain — bauxite, alumina and primary aluminum — generated revenues of R$ 1.040 billion, 14.7% of CVRD’s total revenues. This amount was 15.2% higher than that recorded in 1Q04.

Sales volume of bauxite amounted to 1.233 million tons in 1Q05, an increase of 8.6% yoy.

464,000 tons of alumina were sold in 1Q05, practically in line with the figure recorded in 1Q04, of 467,000 tons.

Sales of primary aluminum amounted to 122,000 tons, a yoy increase of 10.9%.

•   Copper

In 1Q05, CVRD sold 85,000 tons of copper concentrates. Production at the Sossego copper mine was adversely affected in this quarter by the rainy season and by operational problems with mining equipment.

•   Industrial minerals

Sales of potash contributed R$ 80 million to the Company’s revenues in 1Q05, representing 1.1% of CVRD’s total revenues. This amount was 23.7% higher than that of 1Q04.

The volume sold, of 138,000 tons, was in line with the same period a year earlier.

Sales of kaolin accounted for R$ 105 million in revenues, 1.5% of CVRD’s total revenues, down 7.4% yoy. The decrease was mainly due to a decrease in the sales volume and appreciation of the Real against the US dollar.

(1T05)

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(BR GAAP LOGO)

Total volume of kaolin sold amounted to 280,000 tons, down 2.1% yoy. Considering the new contracts that were signed, shipments of kaolin are likely to increase from 2Q05 onwards.

•   Logistics

Logistics services reached R$ 725 million in 1Q05, an increase of 12.3% in relation to the R$ 645 million in 1Q04. Logistics services accounted for 10.2% of the Company’s total revenues in the quarter.

General cargo transported for clients on the CVRD railroads contributed with sales of R$ 506 million and port services, with R$ 114 million. Coastal shipping and port handling services accounted for R$ 105 million.

The railroads transported 5.679 billion ntk of general cargo for third parties, 8.6% less than in 1Q04. The strong rains in the Southeast Region caused landslides that restricted movement of general cargo on the EFVM, CVRD’s main railroad for third party cargo. The main cargos hauled were steel industry inputs and products, 49.7% of the total, agricultural products, 26.2%, and fuels, 10.5%.

The Company’s ports and maritime terminals handled 6.313 million tons of general cargo for clients, compared to 6.213 million in 1Q04.

•   Steel industry participations

Revenues generated by CVRD’s equity stakes in the steel industry amounted to R$ 452 million in 1Q05, down 26% compared to the amount of R$ 610 million in 1Q04. This variation is mainly due to the sales of CST in December 2004, which was partly compensated by the better results from CSI in this quarter compared to 1Q04. The equity stakes in the steel industry accounted for 6.4% of CVRD’s total revenues in 1Q05.

SALES VOLUME — IRON ORE AND PELLETS

                                 
Thousand tons  
    1Q04     %     1Q05     %  
Iron ore
    43,383       82 %     49,159       83 %
Pellets
    9,427       18 %     9,725       17 %
Total
    52,810       100 %     58,884       100 %

SALES VOLUME - ORES AND METALS

                 
Thousand tons  
    1Q04     1Q05  
Manganese
    161       198  
Ferro alloys
    203       136  
Copper concentrates
          85  
Potash
    138       138  
Kaolin
    286       280  
Bauxite
    1,135       1,233  
Alumina
    467       464  
Aluminum
    110       122  

(1T05)

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(BR GAAP LOGO)

VOLUME SOLD BY DESTINATION — IRON ORE AND PELLETS

                                 
Thousand tons  
    1Q04     %     1Q05     %  
ASIA
    20.2       38.3 %     22.7       38.5 %
China
    9.5       18.0 %     11.5       19.5 %
Japan
    5.3       10.0 %     5.8       9.8 %
South Corea
    2.8       5.3 %     2.5       4.2 %
Emerging Asia (ex China)
    2.6       4.9 %     2.9       4.9 %
Europe
    16.1       30.5 %     18.0       30.6 %
Germany
    5.2       9.8 %     5.9       10.0 %
France
    2.7       5.1 %     2.6       4.4 %
Italy
    2.6       4.9 %     2.2       3.7 %
Others
    5.6       10.6 %     7.3       12.4 %
Brazil
    9.8       18.6 %     11.2       19.0 %
USA
    1.0       1.9 %     1.3       2.2 %
Rest of the world
    5.7       10.8 %     5.7       9.7 %
Total
    52.8       100.0 %     58.9       100.0 %

LOGISTICS SERVICES

                 
    1Q04     1Q05  
Railroads (million ntk)
    6,215       5,679  
Ports (thousand tons)
    6,213       6,313  

GROSS REVENUES — BY PRODUCT

                                 
R$ million  
    1Q04     %     1Q05     %  
Iron ore and pellets
    3,194       53.9 %     3,920       55.6 %
Iron ore
    2,264       38.2 %     2,753       39.0 %
Pellets
    930       15.7 %     1,167       16.5 %
Pellet plant operation services
    14       0.2 %     21       0.3 %
Manganese and ferro-alloys
    368       6.2 %     498       7.1 %
Copper concentrates
          0.0 %     200       2.8 %
Potash
    65       1.1 %     80       1.1 %
Kaolin
    113       1.9 %     105       1.5 %
Aluminum
    903       15.2 %     1,040       14.7 %
Logistics
    645       10.9 %     725       10.3 %
Railroads
    457       7.7 %     506       7.2 %
Ports
    96       1.6 %     114       1.6 %
Shipping
    92       1.6 %     105       1.5 %
Steel products
    610       10.3 %     452       6.4 %
Others
    18       0.3 %     11       0.2 %
Total
    5,930       100.0 %     7,052       100.0 %

GROSS REVENUES — BY DESTINATION

                                 
R$ millions  
    1Q04     %     1Q05     %  
Brazil
    1,485       25.0 %     1,765       25.0 %
External market
    4,445       75.0 %     5,287       75.0 %
USA
    603       10.2 %     743       10.5 %
Europe
    1,576       26.6 %     1,828       25.9 %
Japan
    553       9.3 %     597       8.5 %
China
    578       9.7 %     836       11.9 %
Emerging Asia (ex-China)
    388       6.5 %     428       6.1 %
Rest of the World
    746       12.6 %     854       12.1 %
Total
    5,930       100.0 %     7,052       100.0 %

(1T05)

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(BR GAAP LOGO)

(LOGO) OPERATIONAL MARGIN IN EXPANSION

Operating profit, as measured by EBIT, amounted to R$ 2.376 billion, an increase of 33.5% compared to 1Q04.

EBIT margin amounted to 35.3%, higher than that reported in 1Q04, of 31.4%.

EBIT increased by R$ 596 million yoy, due to the increase in net revenues of R$ 1.062 billion, partly offset by the increase in the cost of goods sold (COGS) of R$ 620 million.

In general terms, the increase in COGS was due to higher prices determined by the current economic cycle, the start-up of the Sossego copper mine in mid-2004 and of course by the expansion in production.

The specific sources of the higher 1Q05 COGS relatively to 1Q04 were the growth in expenses with: (a) materials, R$ 191 million; (b) outsourced services, R$ 222 million; (c) energy, R$ 141 million; and (d) depreciation, R$ 32 million.

Higher prices of parts and components contributed to the increase of costs of materials. Energy costs were impacted by a 31% rise in fuel prices, and various increases in electricity rates. The increase in expenditure on contracted services is mainly due to price increases already scheduled in existing contracts, while the increased depreciation expense reflects the larger Company’s assets.

Demurrage expenses totaled R$ 56 million in 1Q05. Simultaneously with the investments in expansion of loading capacity at the Ports of Ponta da Madeira, Tubarão and Sepetiba, CVRD is making efforts to optimize interaction between production, rail transport and shipment timing, to reduce waiting time suffered by ships in ports.

Negative factors in 1Q05 EBIT — compared to 1Q04 — were: (a) SG&A expenses R$ 3 million higher, basically due to the annual increase in salaries in July 2004, and increased commissions on sales - resulting from increased sales volume; and (b) an increase of R$ 15 million in research and development expenditure, reflecting intensified exploration activities.

COGS BREAKDOWN

                                 
R$ million  
    1Q04     %     1Q05     %  
Personnel
    321       10.1 %     314       8.3 %
Material
    524       16.6 %     715       18.9 %
Fuel oil and gases
    347       11.0 %     407       10.7 %
Outsourced services
    536       16.9 %     758       20.0 %
Electric energy
    236       7.4 %     318       8.4 %
Acquisition of products
    600       19.0 %     593       15.7 %
Depreciation and exhaustion
    315       10.0 %     347       9.2 %
Goodwill amortization
    96       3.0 %     96       2.5 %
Others
    189       6.0 %     238       6.3 %
Total
    3,165       100.0 %     3,785       100.0 %

(LOGO) LTM EBITDA OF R$ 12.622 BILLION

Cash generation, as measured by EBITDA, amounted to R$ 2.849 billion, an increase of 17.0%, compared to 1Q04.

(1T05)

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In the twelve-month period to March 31, EBITDA amounted to R$ 12.662 billion. This represented a qoq growth of R$ 413 million.

Ferrous minerals operation — iron ore, pellets, manganese ore and ferro-alloys — contributed to 68% of CVRD cash generation in 1Q05, while the aluminum chain — bauxite, alumina and primary aluminum - contributed to 16%, logistics services to 10%, non-ferrous minerals to 4% and equity stakes in the steel industry to 2%.

QUARTERLY EBITDA

                 
R$ million  
    1Q04     1Q05  
Net operating revenues
    5,659       6,721  
COGS
    (3,165 )     (3,785 )
SG&A
    (355 )     (358 )
Research and development
    (66 )     (81 )
Other operational expenses
    (292 )     (121 )
EBIT
    1,780       2,376  
 
Adjustment for non-cash items
    183       -  
Depreciation, amortization & exhaustion
    437       473  
Dividends received
    36       -  
 
EBITDA
    2,436       2,849  

EBITDA BY BUSINESS AREA

                 
R$ million  
    1Q04     1Q05  
Ferrous minerals
    1,554       1,936  
Non-ferrous minerals
    21       104  
Logistics
    260       292  
Aluminum
    417       454  
Steel
    184       64  
Total
    2,436       2,849  

(LOGO) SOLID PERFORMANCE: NET EARNINGS OF R$ 1.615 BILLION

In the first quarter of 2005, CVRD obtained net earnings of R$ 1.615 billion, an increase of 69.3% compared to the same period a year earlier. The yoy rise of R$ 596 million in operating profit, the result of the growth achieved in practically all the Company’s business areas, was the main factor behind CVRD’s higher net earnings in the first quarter in 2005.

Net income in this quarter was also higher than the one achieved in 4Q04, of R$ 1.528 billion, which was positively impacted by non-recurring asset sales. Excluding these extraordinary events, 1Q05 net earnings would be approximately 11% higher than 4Q04.

It is also important to highlight the quality of this quarter net income: there was no influence on non-recurring items, such as results from asset sales, nor monetary variations, since the Real/US dollar exchange rate of March 31st, 2005, of R$ 2.6662, was basically the same of December 31st, 2004, of R$ 2.6544.

The net financial result also had a positive impact on net earnings in 1Q05, being down R$ 231 million compared to 1Q04. Of this amount, a reduction in financial

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expenses contributed with R$ 179 million, an increase in financial revenues, with R$ 44 million and monetary variation, with R$ 8 million.

The equity income result amounted to R$ 74 million, an increase of R$ 67 million, compared to 1Q04.

The good financial and equity income results more than compensated for the increase of R$ 155 million in expenses on income tax and social contribution, due to the higher taxable earnings base.

(LOGO) DEBT INDICATORS CONTINUE TO IMPROVE

According to US GAAP (United States generally accepted accounting principles), CVRD’s total debt at March 31, 2005 was US$4.182 billion, US$94 million more than at December 31, 2004 (US$4.088 billion). Net debt at the end of March 2005 was US$3.060 billion, vs. US$2.839 billion at the end of December 2004.

Trailing 12-month net debt/adjusted EBITDA increased from 1.10 on December 31, 2004 to 1.05 on March 31, 2005. The ratio of net debt to enterprise value was stable, with a change from 11.8% to 11.1%. Interest coverage as measured by trailing 12-month adjusted EBITDA/interest paid increased, from 12.41 at the end of 2004 to 13.24 on March 31, 2005. The changes in these indicators show the Company’s powerful cash flow and the strategic focus on preserving a healthy balance sheet.

FINANCIAL EXPENSES — US GAAP

                         
US$ million  
    1Q04     4Q04     1Q05  
Financial expenses:
                       
Debt with third parties
    (56 )     (63 )     (48 )
Debt with related parties
    (2 )           (2 )
Total debt-related financial expenses
    (58 )     (63 )     (50 )
                         
    1Q04     4Q04     1Q05  
Gross interest on:
                       
Tax and labour contingencies
    (6 )     (11 )     (11 )
Tax on financial transactions (CPMF)
    (4 )     (11 )     (9 )
Derivatives
    (59 )     (67 )     5  
Others
    (15 )     (106 )     (27 )
Total gross interest
    (84 )     (195 )     (42 )
 
Total
    (142 )     (258 )     (92 )

DEBT INDICATORS — US GAAP

                         
US$ million  
    1Q04     4Q04     1Q05  
Gross debt
    4,526       4,088       4,182  
Net debt
    3,443       2,839       3,060  
Gross debt / adjusted LTM EBITDA (x)
    1.86       1.10       1.05  
Adjusted LTM EBITDA / LTM interest expenses (x)
    11.69       12.41       13.24  
Gross debt / EV (x)
    0.19       0.12       0.11  

Enterprise Value = market capitalization + net debt

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(LOGO) CAPEX: FABRICA NOVA A NEW VALUE CREATION PLATFORM

According to US GAAP (United States generally accepted accounting principles), CVRD’s capital expenditure in 1Q05 totaled US$ 570.3 million, of which US$ 430.7 million was spent on organic growth — projects and R&D, and US$ 139.6 million on “stay-in-business Capex” — maintenance of existing operations1.

Expenditure on R&D was US$ 28.2 million. Ore exploration was concentrated on looking for deposits of copper, nickel, gold, bauxite and manganese.

The feasibility study for the Vermelho project — to be CVRD’s first nickel mine — was completed. A feasibility study for development of the Moatize coal deposit in Mozambique was started at the beginning of 2005 and is expected to be completed in June 2006.

The Fabrica Nova mine, which is part of the CVRD Southern System, started to operate in April, and its 2005 output is expected to reach 10 million tons. Fabrica Nova has a nominal capacity of 15 million tons per year. It is the third Company’s iron ore project to come on stream over the last twelve months.

Total capex with the development of Fabrica Nova is US$ 106 million. It will add approximately 15% to the Southern System total production capacity of iron ore. In 2004, the Southern System mines produced 98.8 million tons of iron ore.

(LOGO)   Main projects in progress
                                               
     
  Area     Project     Realized     Budgeted     Status  
                        US million        
              1Q05     2005     Total        
                                   
 


Ferrous minerals
    Expansion of the Carajás iron ore mines to 85 Mtpa - Northern System       41         140         296       This project will increase CVRD’s production capacity by 15 million tons/year, and is scheduled for completion in 2006. Works on the plant and port are in progress. Conclusion of works on the second phase of Pier III of the Ponta da Madeira Port terminal — an additional ship loading facility — is planned for July 2005, for total investment of US$70 million.  
                                   
 
    Brucutu iron ore mine — Southern System       24         205         448       We expect Brucutu to produce 6.5 million tons this year. Phase I should be completed in 2006, bringing nominal production capacity to 15 million tons/year. Phase II is scheduled for completion in 2007, bringing production capacity to 24 million tons/year. Works on Phase I are 55% completed.  
                                   
 
    Fábrica Nova iron ore mine — Southern System       7         37         106       Started operating in April. Reallocation of the Samarco ore duct is currently in progress — this will increase the workable area. Project conclusion scheduled for the end of this year.  
                                   
 
    Expansion of the Itabira iron ore mines — Southern System       3         16         75       Modernization of operations and expansion of production capacity of the Itabira mines to 46 million tons/year. Conclusion and startup planned for 2006. Surface removal has been completed. Work on processing facilities scheduled to start 2Q05.  
                                   
 
    Fazendão iron ore mine — Southern System       -         52         100       Project to produce 14 million of ROM (unprocessed) iron ore/year. Works planned to start in second half 2005, with completion and startup in 2006.  
                                   
 
    Fábrica iron ore mine — Southern System       -         38         144       Project to expand production capacity at the Fábrica mine by 5 million tons, from 12 million to 17 million tons/year. Startup planned for 2007.  
                                   


1   Capex data is based on effective financial disbursements.

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  Area     Project     Realized     Budgeted     Status  
              US million        
              1Q05     2005     Total        
                                   
 
    Timbopeba iron ore mine       -         25         25       Extension of the useful life of this mine to 2008, with estimated annual production of 2.7 million tons. US$7.8 million will be invested in development, purchase of small-scale equipment and new access to the rock face. US$17.6 million will be invested in acquisition of rolling stock for the EFVM railroad.  
                                   
 
    Tubarão Port
expansion -
Southern System
      5         22         65       Project to expand the conveyor belt systems and loading machinery, and building of new stockyard. Half the works have been completed. Conclusion planned for 2006.  
                                   
 
    São Luis
pelletizing plant - expansion
      3         18         18       Expansion of the plant capacity to 7 million tons/year, with startup planned for second half 2005.  
                                   
 


Coal
    Anthracite       0         86         86       Agreement to acquire 25% stake in the Chinese anthracite producer Henan Longyu Energy Resources Ltd., in partnership with Yoncheng and Baosteel. In 2005 the mine will produce 1.7 million tons of high quality anthracite.  
                                   
 
    Coking coal       0         16         26       Acquisition, in association with the Chinese coal producer Yankuang, of 25% of Shandong Yankuang International Coking Ltd, for production of Coking coal. Production capacity is estimated at 2 million tons/year of coke and 200,000 tons/year of methanol. The coke plant is being assembled, and startup is timetabled for 2006.  
                                   
 


Non-ferrous minerals
    Expansion of the Taquari-Vassouras potash mine       3         9         78       Project to expand nominal potash production capacity from 600,000 to 850,000 tons/year. Approximately 90% of works completed. Operation scheduled to start in second half 2005.  
                                   
 
    The 118 copper mine       -         32         218       Project to produce 36,000 tons of copper cathode. Planning at assessment phase.  
                                   
 
    Vermelho nickel mine       -         34         875       Project to produce 45,000 tons of nickel cathode and 2,000 tons of cobalt per year. Planning at assessment stage.  
                                   
 


Aluminum
    Modules 4 and 5 of Alunorte — alumina       83         306         583       The project for construction of modules 4 and 5 will increase the refinery’s production capacity to 4.2 million tons of alumina per year. Conclusion scheduled for 2006. Approx. 70% of works completed.  
                                   
 
    Paragominas I
bauxite mine
      14         154         352       We expect this mine to start producing 4.5 million of bauxite/year at the end of 2006. The tubes for the 244 km pipeline to transport bauxite from Paragominas to the alumina refinery in Barcarena, in the State of Pará, have been purchased, and production startup is programmed for June 2005. Approximately 20% of works have been completed.  
                                   
 


Logistics
    Acquisition of locomotives and wagons for the EFVM/EFC/FCA railroads       86         559         559       1,067 wagons and 26 locomotives were bought in the first quarter of 2005.  
                                   
 


Electric energy
    Aimorés
hydroelectric power plant
      5         12         144       This plant, on the Rio Doce River in the Brazilian state of Minas Gerais, will have generating capacity of 330MW with startup scheduled for 3Q05. By the end of 1Q05, 95% of the works had been completed. CVRD’s share in the project is 51.0%.  
                                   
 
    Capim Branco I and II hydroelectric plants       16         73         181       Both plants are located on the Araguari River in Brazil’s State of Minas Gerais. They will have generation capacity of 240MW and 210MW respectively. Startup of the projects is scheduled for 2006. 57% of the works on Capim Branco I have been concluded, and 31% for Capim Branco II. CVRD’s stake in these project is 48.4%.  
                                   

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CAPEX BY BUSINESS AREA

                                 
US$ million  
    Realized 1Q05     Budgeted 2005  
Ferrous minerals
    200       35.1 %     1,266       38.0 %
Non-ferrous minerals
    36       6.3 %     303       9.1 %
Logistics
    154       27.0 %     760       22.8 %
Aluminum
    127       22.2 %     537       16.1 %
Coal
    3       0.4 %     136       4.1 %
Electric energy
    24       4.2 %     109       3.3 %
Other
    28       4.9 %     221       6.6 %
Total
    570       100.0 %     3.32       100.0 %

(LOGO) SELECTED FINANCIAL INDICTORS FOR THE MAIN NON-CONSOLIDATED COMPANIES

These are available in the quarterly financial statements of CVRD, on the company’s website www.cvrd.com.br, in the sub-section Investor Relations.

(LOGO) CONFERENCE CALL/WEBCAST

A conference call and webcast will be held on Friday, May 13, at 10 a.m. Rio de Janeiro time, 9 am US Eastern Standard Time and 1 pm United Kingdom time. Instructions for participation are on the CVRD website www.cvrd.com.br, under Investor Relations. A recording of the conference call and webcast will be available on CVRD’s website for 90 days after May 13, 2005.

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FINANCIAL STATEMENTS

                 
R$ million  
    1Q04     1Q05  
Gross operating revenues
    5,930       7,052  
Taxes
    (271 )     (332 )
Net operating revenues
    5,659       6,721  
Cost of goods sold
    (3,165 )     (3,785 )
Gross profit
    2,494       2,936  
Gross margin (%)
    44.1 %     43.7 %
Operational expenses
    (714 )     (560 )
Sales
    (113 )     (100 )
Administrative
    (242 )     (258 )
Research and development
    (66 )     (81 )
Other operational expenses
    (110 )     (121 )
Samitri
    (183 )      
Result from shareholdings
    7       74  
Equity income
    64       130  
Goodwill amortization
    (57 )     (57 )
Provision for losses
           
Financial result
    (505 )     (274 )
Financial expenses
    (474 )     (295 )
Financial revenues
    69       113  
Monetary variation
    (100 )     (92 )
Operating profit
    1,281       2,175  
Result of discontinued operations
           
Change in accounting method
           
Income tax and social contribution
    (236 )     (391 )
Minority interest
    (92 )     (169 )
Net earnings
    954       1,615  

BALANCE SHEET

                 
R$ million  
    12/31/2004     03/31/2005  
Asset
               
Current
    11,930       11,937  
Long term
    3,710       3,787  
Fixed
    27,831       29,159  
Total
    43,471       44,884  
Liabilities
               
Current
    9,327       8,712  
Long term
    13,935       14,225  
Others
    2,041       2,162  
Shareholders’ equity
    18,169       19,785  
Paid-up capital
    7,300       7,300  
Reserves
    10,869       12,485  
Total
    43,471       44,884  

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CASH FLOW

                 
R$ million  
    1Q04     1Q05  
Cash flows from operating activities:
               
Net income
    954       1,615  
Adjustments to reconcile net income with cash provided by operating activities:
               
Result from shareholdings
    (7 )     (74 )
Depreciation, depletion and amortization
    129       385  
Deferred income tax and social contribution
    (93 )     (113 )
Result from sale of investment
           
Financial expenses and foreign exchange and monetary net variation
    180       46  
Minority interest
    92       169  
Impairment of property, plant and equipment
    15       15  
Goodwill amortization in the COGS
    96       96  
Non-recurring item — Goodwill for Samitri
    183        
Net unrealized derivative losses
    153       5  
Dividends/interest attributed to stocKholders received
    36        
Others
    (70 )     (81 )
Decrease (increase) in assets:
               
Accounts receivable
    (163 )     (338 )
Inventories
    (78 )     (70 )
Others
    (454 )     (122 )
Increase (decrease) in liabilities:
               
Suppliers and contractors
    (94 )     49  
Payroll and related charges
    34       (94 )
Taxes and Contributions
    275       (579 )
Others
    569       (257 )
Net cash provided by operating activities
    1,755       652  
Cash Flow from investing activities:
               
Loans and advances receivable
    63       12  
Guarantees and deposits
    (60 )     (52 )
Additions to investments
    (105 )     (10 )
Additions to property, plant and equipment
    (929 )     (1,755 )
Proceeds from disposals of investments/property, plant and equipment
    0       6  
Net cash used I investing activities
    (1,031 )     (1,798 )
Cash flows from financing activities:
               
Short-term debt, net issuances (repayments)
    173       221  
Long-term debt
    2,141       726  
Repayments:
               
Related parties
           
Financial institutions
    (1,663 )     (477 )
Ações em tesouraria
          0  
Net cash used in financing activities
    650       470  
Increase (decrease) in cash and cash equivalents
    1,374       (677 )
Cash and equivalents, beginning of period
    2,129       3,917  
Cash and equivalents, end of period
    3,503       3,240  
Cash paid during the period for:
               
Interest on short-term debt
    (18 )     (2 )
Interest on long-term debt
    (282 )     (226 )
Paid income tax and social contribution
    (9 )     (211 )
Non-cash transactions:
               
Additions to property, plant and equipment — interest capitalization
    (22 )     (27 )
Transfer of advance for future capital increase to investments
           
Income tax and social contribution paid with credits
          (49 )

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“This communication may include declarations which represent the expectations of the Company’s Management about future results or events. All such declarations, when based on future expectations and not on historical facts, involve various risks and uncertainties. The Company cannot guarantee that such declarations turn out to be correct. Such risks and uncertainties include factors relative to the Brazilian economy and capital markets, which are volatile and may be affected by developments in other countries; factors relative to the iron ore business and its dependence on the steel industry, which is cyclical in nature; and factors relative to the high degree of competitiveness in industries in which CVRD operates. To obtain additional information on factors which could cause results to be different from those estimated by the Company, please consult the reports filed with the Comissão de Valores Mobiliários (CVM - Brazilian stock exchange regulatory authority) and the U.S. Securities and Exchange Commission - SEC, including the most recent Annual Report — CVRD Form 20F.”

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Contents

         
Part I
    2  
 
       
1- Management’s Discussion and Analysis of the Operating Results at March 31, 2005 Compared With March 31, 2004
    2  
1.1- General Aspects
    2  
1.2- Comments on the Consolidated Results
    4  
1.2.1- Consolidated Gross Revenue
    4  
1.2.2- Consolidated Cost of Products and Services
    5  
1.2.3- Cash Generation Consolidated
    6  
1.3- Comments on the Parent Company Results
    7  
1.3.1- Gross Revenue
    7  
1.3.2- Cost of Products and Services
    8  
1.3.3- Results of Shareholdings by Business Area
    9  
1.3.4- Other Operating Expenses
    10  
1.3.5- Net Financial Results
    10  
1.3.6- Income Tax and Social Contribution
    10  
 
       
Part II
    11  
 
       
Quarterly Information and Notes to the Quarterly Information
    11  
2- Balance Sheet
    11  
3- Statement of Income
    12  
4- Statement of Changes in Stockholders’ Equity (additional Information)
    14  
5- Statement of Cash Flows (Additional Information)
    15  
6- Notes to the Quarterly Information at March 31, 2005 and 2004
    16  
6.1- Operations
    16  
6.2- Presentation of Quarterly Information
    16  
6.3- Significant Accounting Policies
    16  
6.4- Principles of Consolidation
    17  
6.5- Cash and Cash Equivalents
    17  
6.6- Accounts Receivable from Customers
    17  
6.7- Inventories
    17  
6.8- Related parties
    18  
6.9- Taxes to recover or offset
    18  
6.10- Deferred Income Tax and Social Contribution
    19  
6.11- Consolidated investments
    20  
6.12- Property, Plant and Equipment
    20  
6.13- Loans and Financing
    21  
6.14- Contingent Liabilities
    22  
6.15- Environmental and Site Reclamation and Restoration Costs
    23  
6.16- Paid-up Capital
    24  
6.17- Treasury Stock
    24  
6.18- Financial Results - Parent company and consolidated
    25  
6.19- Financial Instruments - Derivatives
    26  
6.20- Administrative and Other Operating Expenses
    27  
6.21- Subsequent Events
    27  
 
       
Part III
    29  
 
       
9- Attachment I - Statement of Investments in Subsidiaries and Jointly-Controlled Companies
    29  
10- Other Information the Company Deems Relevant
    30  
10.1- Consolidated Iron Ore and Pellet Sales (Main Markets) (Not Reviewed)
    30  
11- Report of the Independent Accountants
    31  
12- Board of Directors, Fiscal Council, Advisory Committees and Executive Officers
    32  
             
  CVRD     1

 


Table of Contents

Part I

Expressed In thousands of reais

1-  Management’s Discussion and Analysis of the Operating Results at March 31, 2005 Compared With March 31, 2004

1.1- General Aspects

(a) Companhia Vale do Rio Doce’s segments of business are as follows:

  •   Ferrous minerals: iron ore and pellets as well as manganese and ferroalloys;
 
  •   Non-ferrous minerals: potash, kaolin and copper;
 
  •   Logistics: railroads, ports and maritime terminals and shipping; and
 
  •   Holdings: equity holdings in producers of aluminum, steel and electric power generation.

    Ferrous Minerals

    Iron Ore and Pellets
 
    Operating through two world-class integrated systems for ore production and distribution. The Southern System, based in the states of Minas Gerais and Espírito Santo and the Northern System, based in the states of Pará and Maranhão, each consisting of mines, railroads and maritime terminals. Besides those, there is a third system that consists of mines and port facilities from Caemi.
 
    Currently CVRD operates nine pelletizing plants in Brazil, five of them in joint ventures with international partners. The Company also has an interest in Samarco, which owns and operates two pelletizing plants in Espírito Santo, and an interest in GIIC, a pelletizing plant in Bahrein.
 
    Iron ore and pellets sales are generally made pursuant to long-term supply contracts which provide for annual price negotiations. 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 processes required to produce the desired final product, granulometric, 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.
 
    Annual price negotiations generally occur from November to February, 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 period up to March of the next period. In the European market, the renegotiated prices are effective as of January of each period. For 2005 prices increased by 71.5%.
 
    Manganese and Ferroalloys
 
    This activity is carried out through the subsidiaries RDM located in the state of Bahia and Minas Gerais, Urucum located in the state of Mato Grosso do Sul, Rio Doce Manganèse Europe in France and Rio Doce Manganese Norway in Norway.
 
    Non-Ferrous Minerals
 
    Potash
 
    The Company through a leasing contract with Petroleo Brasileiro S.A . - PETROBRAS, has a potash leased mine from Operational Unit Taquari-Vassouras (UOTV), located in state of Sergipe. It is the only producer of potash chloride in activity in Brazil, The potash explored by the Company is raw material to fertilizers producers.
 
    In November, 2004, CVRD won an international competition for the research evaluation and exploration of a potash deposit in the Neuquen Province, Argentina.
 
    Copper
 
    CVRD’s copper activities have been operating since June, 2004 the Sossego mine in Pará. Sossego is the first copper mine of CVRD.

Kaolin
 
    Kaolin is a fine white aluminum silicate clay, used in the paper, ceramic and pharmaceutical industries as a coating and filler. Kaolin commercial activities are conducted through Caemi, controller of Pará Pigmentos S.A. and Cadam.
             
  CVRD     2

 


Table of Contents

    Logistics
 
    The logistics system includes the Vitória to Minas Railroad and the Tubarão port complex in the Southern System, and the Carajás Railroad and Ponta da Madeira Marine Terminal in the Northern System. In addition, CVRD controls the railroad Ferrovia Centro-Atlântica S.A. - FCA, and has interest in MRS Logística.
 
    The principal cargo of CVRD’s railroad is the Company’s own iron ore, along with steel, coal, pig iron, agricultural products and fuel. The Company charges market rates for third-party cargo, which vary based upon the distance traveled and the density of the freight in question.
 
    Energy
 
    The Company participates in nine hydroelectric plants, four of which are in operation. CVRD’s investments in the sector seek to optimize the Group’s supply of electric power.
 
    Holdings
 
    Aluminum Operations
 
    The Company sells aluminum, alumina and bauxite to an active world market in which prices are determined based on prices for the primary aluminum quoted on the London Metals Exchange and the Commodity Exchange, Inc (Comex) at the time of delivery.
 
    Bauxite extraction operation works through our jointly-controlled company Mineração Rio do Norte S.A. - MRN.
 
    Alumina refine works through ALUNORTE - Alumina do Norte do Brasil S.A. and the smelts of aluminum through ALBRAS - Aluminio Brasileiro S.A. and the jointly-controlled company Valesul Alumínio S.A..
 
    Steel
 
    Commercial activities in the steel industry are conducted through the jointly-controlled company California Steel Industries Inc., located in California and through the affiliated company Usiminas.
 
(b)   The variations of the main currencies and indices in relation to the real, which impacted the results of the Company and its subsidiaries, jointly-controlled companies and affiliates, were as follows:
                                                 
    D%   Parity - end of period
Currencies / Indices   U.S.                    
Period   DOLLAR   YEN   IGP-M   TJLP   US$ x R$   US$ x Yen
From 01/01/05 to 03/31/05
    0.4       (4.1 )     1.6       2.4       2.6662       107.39  
From 10/01/04 to 12/31/04
    (7.1 )     (0.2 )     2.0       2.4       2.6544       102.55  
From 01/01/04 to 03/31/04
    0.7       3.3       2.7       2.4       2.9086       104.48  

    About 86% of the consolidated gross revenue (88% parent company) on 03/31/05 is linked to the U.S. dollar. About 33% (32% parent company) of total consolidated costs are linked to the U.S. dollar. Consequently, fluctuations in the exchange rate between the two currencies have a significant impact on the operating cash flows.
 
    Approximately 91% (97% parent company) of the short-term and long-term loans of the consolidated on 03/31/05 are denominated in U.S. dollars. As a result, exchange rate fluctuations have a significant impact on the financial expenses (Notes 6.13 and 6.18).
 
(c)   On 03/31/05, the consolidated trade balance of US$ 1,095 million was generated as follows:
                 
    Consolidated (in US$ million)  
    03/31/05     03/31/04  
Exports
    1,336       1,088  
Imports
    (241 )     (156 )
 
           
 
    1,095       932  
 
           
             
  CVRD     3

 


Table of Contents

1.2- Comments on the Consolidated Results

1.2.1- Consolidated Gross Revenue

Sales volume and revenues by products and services:

                                                 
    In thousands of metric tons                      
    (except railroad transportation)             In thousands of reais        
    03/31/05     03/31/04     D%     03/31/05     03/31/04     D%  
Iron ore
    49,159       43,383       13       2,753,407       2,263,635       22  
Pellets (*)
    9,725       9,427       3       1,188,131       944,042       26  
 
                                       
 
    58,884       52,810       12       3,941,538       3,207,677       23  
 
                                       
Manganese
    198       161       23       63,355       22,667       180  
Ferroalloys
    136       203       (33 )     434,884       345,469       26  
Copper
    85                   199,980              
Potash
    138       138             80,373       65,272       23  
Kaolin
    280       286       (2 )     104,576       112,594       (7 )
Railroad transportation (millions of TKU)
    8,333       8,795       (5 )     505,512       456,958       11  
Port services
    6,313       6,213       2       114,375       96,086       19  
Maritime transportation
                      104,576       92,490       13  
Aluminum
    122       110       11       611,222       525,091       16  
Alumina
    464       467       (1 )     358,703       306,752       17  
Bauxite
    1,233       1,135       9       70,043       70,835       (1 )
Steel
                      452,153       609,651       (26 )
Other products and services
                      11,073       18,013       (39 )
 
                                           
 
                            7,052,363       5,929,555       19  
 
                                           


(*)   Includes revenues derived from services provided to pelletizing join ventures in the amount of R$ 21,213 and R$ 13,776, referring to the first quarter of 2005 and 2004, respectively.

    Revenues from iron ore and pellets increased by 23% (R$ 3,941,538 on 03/31/05 against R$ 3,207,677 on 03/31/04) due to modification of the product mix and higher prices on 03/31/05.
 
    Revenues from manganese and ferroalloys increased by 35% (R$ 498,239 on 03/31/05 against R$ 368,136 on 03/31/04) and reflect increase in prices and change of mix of products related to the companies of the segment discussed in Item 1.3.3 Ferrous Minerals — Manganese and ferroalloys.
 
    Revenues from kaolin decreased by 7% (R$ 104,576 on 03/31/05 against R$ 112,594 on 03/31/04). This effect was basically due to the sales decrease in volumes and the devaluation of the US American dollar compared to the real.
 
    Revenues from transportation rose 11% (R$ 505,512 on 03/31/05 against R$ 456,958 on 03/31/04), due mainly to higher railway freight rates.
 
    Revenues in the aluminum area rose 15% (R$ 1,039,968 on 03/31/05 versus R$ 902,678 on 03/31/04), due to increase of production capacity of bauxite and alumina plants as well as the average selling prices, discussed in Item 1.3.3 Holdings - Aluminum.
 
    Revenues from steel products decreased by 26% (R$ 452,153 on 03/31/05 compared with R$ 609,651 on 03/31/04). This reflects the sale of CST on December 2004, offset by the performance of CSI, discussed in Item 1.3.3 Holdings - Steel.

(PIE CHART)

             
  CVRD     4

 


Table of Contents

Gross Consolidated Revenue by Segment

                                                                                 
            Non -             Holdings             Total  
    Ferrous     Ferrous                                                  
    Minerals     Minerals     Logistics     Aluminum     Steel     Eliminations     03/31/05     %     03/31/04     %  
External market
                                                                               
America, except United States
    606,447       328       29,699       294,618             (412,834 )     518,258       7       473,064       8  
United States
    339,020             7,767       246,431       452,153       (301,982 )     743,389       11       603,193       10  
Europe
    2,289,882       132,649       15,552       374,606             (984,563 )     1,828,126       26       1,575,853       27  
Middle East/Africa/Oceania
    447,831                   14,916             (127,073 )     335,674       5       273,346       5  
Japan
    558,736       16,858             257,435             (235,832 )     597,197       8       553,443       9  
China
    1,154,378       71,554             67,434             (457,142 )     836,224       12       578,045       10  
Ásia, other than Japan and China
    548,773       181,784                         (302,123 )     428,434       6       387,736       7  
 
                                                           
 
    5,945,067       403,173       53,018       1,255,440       452,153       (2,821,549 )     5,287,302       75       4,444,680       76  
Internal Market
    1,169,045       131,728       745,093       353,363             (634,168 )     1,765,061       25       1,484,875       24  
 
                                                             
 
                                                                               
Total operating revenues
    7,114,112       534,901       798,111       1,608,803       452,153       (3,455,717 )     7,052,363       100       5,929,555       100  
 
                                                           

1.2.2- Consolidated Cost of Products and Services

By Nature

                                                         
    Denominated in                                
    R$     US$     03/31/05     %     03/31/04     %     D%  
Personnel
    282,325       31,846       314,171       8       320,893       10       (2 )
Material
    552,674       162,347       715,021       19       524,117       17       36  
Oil and gas
    328,666       77,843       406,509       11       347,319       11       17  
Outsourced services
    552,127       206,035       758,162       20       536,195       17       41  
Energy
    299,490       18,055       317,545       8       235,584       7       35  
Raw Material
    12,577       580,427       593,004       16       600,323       19       (1 )
Depreciation and depletion
    331,830       14,903       346,733       9       315,075       10       10  
Amortization of goodwill
    96,095             96,095       3       96,096       3        
Others
    95,412       142,327       237,739       6       189,417       6       26  
 
                                               
 
Total
    2,551,196       1,233,783       3,784,979       100       3,165,019       100       20  
 
                                               
 
    67 %     33 %                                        
 
                                                   

The 20% (R$ 619,960) increase in the cost of products and services (R$ 3,784,979 on 03/31/05 against R$ 3,165,019 on 03/31/04) is due to changes in consolidated entities, increases in sales volumes and changes in the prices of the various elements which comprise production cost during the period.

             
  CVRD     5

 


Table of Contents

1.2.3- Cash Generation Consolidated

The operating cash generation consolidated measured by EBITDA (earnings before financial results, results of equity investments, interest, income tax and depreciation, amortization and depletion plus dividends received) was R$ 2,849,394 on 03/31/05, against R$ 2,435,668 on 03/31/04, an increase of 17%.

EBITDA

                 
    03/31/05     03/31/04  
Net operating revenue
    6,720,573       5,658,625  
Cost of products and services
    (3,784,979 )     (3,165,019 )
Operating expenses
    (559,695 )     (714,153 )
 
           
 
               
Operating profit
    2,375,899       1,779,453  
Depreciation / amortization of goodwill
    473,495       437,356  
 
           
 
    2,849,394       2,216,809  
Dividends received
          36,063  
Goodwill Samitri
          182,796  
 
           
EBITDA R$
    2,849,394       2,435,668  
 
           
 
               
Current liabilities
               
Current portion of long-term debt - unrelated parties
    2,058,984       2,525,818  
Short-term debt
    702,853       515,202  
Loans from related parties
    108,801       72,976  
 
           
 
    2,870,638       3,113,996  
 
           
 
               
Long-term liabilities
               
Long-term debt - unrelated parties
    9,336,284       9,044,631  
Loans from related parties
    31,131       41,158  
 
           
 
    9,367,415       9,085,789  
 
           
Gross debt
    12,238,053       12,199,785  
 
           
 
               
Interest paid
    227,668       300,396  
Stockholders’ equity
    19,784,523       18,169,333  
 
               
EBITDA / Interest paid
    12.52       8.11  
EBITDA Margin
    42 %     43 %
EBIT Margin
    35 %     31 %
Gross debt / EBITDA
    4.29       5.01  
Gross debt / Equity Capitalization
    38       40  

Consolidated EBITDA by Segment

                                 
    03/31/05     03/31/04  
    EBITDA     EBITDA  
    Segments     % of total     Segments     % of total  
Ferrous minerals
    1,935,966       68 %     1,553,513       64 %
Non - ferrous minerals
    103,739       4 %     20,757       0 %
Logistics
    292,033       10 %     260,265       11 %
Holdings
                               
Aluminum
    453,984       16 %     416,862       17 %
Steel
    63,672       2 %     184,271       8 %
 
                       
 
    2,849,394       100 %     2,435,668       100 %
 
                       
             
  CVRD     6

 


Table of Contents

1.3- Comments on the Parent Company Results

The net income of the Company on 03/31/05 was R$ 1,615,190 compared with net income of R$ 953,714 on 03/31/04 (the earnings per share corresponds to R$ 1.40 on 03/31/05 versus R$ 0.83 on 03/31/04).

The gross margin declined from 43.4% on 03/31/04 to 36.3% on 03/31/05. The gross revenue rose R$ 674,492 (to R$ 2,731,147 on 03/31/05 from R$ 2,057,802 on 03/31/04), while the cost of products and services increased R$ 581,873 (from R$ 1,475,929 on 03/31/04 to R$ 2,057,802 on 03/31/05).

1.3.1- Gross Revenue

The 25% increase in gross revenue (R$ 3,405,639 on 03/31/05 against R$ 2,731,147 on 03/31/04) is the result of the 11% higher volume sold of iron ore and pellets and the increase of prices of products and services. The revenues of the period includes the sale of copper (85 thousands of tons - R$ 188,079) began in June, 2004 and alumina, began in December 2004. This effect was compensated in part by the average valuation of the real against the United States Dollar by 8%, incident on 88% of the revenue of the Company.

                                                 
    In thousands of metric tons (except        
    railroad transportations)     In thousands of reais  
    03/31/05     03/31/04     D%     03/31/05     03/31/04     D%  
External market
                                               
Iron ore - fines
    28,143       24,757       14       1,359,765       1,159,327       17  
Iron ore - lump ore
    1,629       2,087       (22 )     81,172       109,027       (26 )
Pellets
    5,797       5,214       11       560,873       479,596       17  
 
                                       
 
    35,569       32,058       11       2,001,810       1,747,950       15  
 
                                       
 
                                               
Internal market
                                               
Iron ore - fines
    8,434       7,853       7       385,934       331,256       17  
Iron ore - lump ore
    2,559       2,204       16       118,943       97,225       22  
Pellets (*)
    1,271       1,141       11       195,023       151,278       29  
 
                                       
 
    12,264       11,198       10       699,900       579,759       21  
 
                                       
 
                                               
Total
                                               
Iron ore - fines
    36,577       32,610       12       1,745,699       1,490,583       17  
Iron ore - lump ore
    4,188       4,291       (2 )     200,115       206,252       (3 )
Pellets
    7,068       6,355       11       755,896       630,874       20  
 
                                       
 
    47,833       43,256       11       2,701,710       2,327,709       16  
 
                                       
Copper
    85                   188,079              
Potash
    138       138             80,373       65,272       23  
Railroad transportation (millions of TKU) (**)
    5,674       5,526       3       289,037       261,142       11  
Port services
    5,499       5,635       (2 )     76,895       71,485       8  
Alumina
    52                   59,963              
Other products and services
                      9,582       5,539       73  
 
                                           
 
                            3,405,639       2,731,147       25  
 
                                           


(*)   Includes revenues derived from services provided to pelletizing joint ventures in the amounts of R$ 52,456 and R$ 35,777 in the first quarter of 2005 and 2004, respectively.
 
(**)   The Company carried through its railroad system 3,987 and 3,959 million of TKUs of general cargo and 1,687 and 1,567 million of TKUs of iron ore and pellets in the first quarter of 2005 and 2004, respectively.
             
  CVRD     7

 


Table of Contents

(PIE CHART)

Gross revenue by segment

                                                         
    Ferrous     Non-Ferrous                     Total  
    Minerals     Minerals     Logistics     3/31/2005     %     3/31/2004     %  
External market
                                                       
Americas, except the United States
    157,700                   157,700       5       156,185       6  
United States
    72,101                   72,101       2       83,199       3  
Europe
    750,603       34,980             785,583       23       706,484       26  
Middle East/Africa/Oceania
    200,067                   200,067       6       162,124       6  
Japan
    207,820                   207,820       6       192,041       7  
China
    423,744       33,030             456,774       13       265,615       10  
Asia, other than Japan and China
    189,775       81,962             271,737       8       182,302       7  
 
                                         
 
    2,001,810       149,972             2,151,782       63       1,747,950       65  
Internal market
    709,482       178,443       365,932       1,253,857       37       983,197       35  
 
                                         
Total gross revenues
    2,711,292       328,415       365,932       3,405,639       100       2,731,147       100  
 
                                         

1.3.2- Cost of Products and Services

The 39% increase (R$ 581,873) in products and services costs (R$ 2,057,802 on 03/31/05 against R$ 1,475,029 on 03/31/04) is mainly due to increase of sales, increase of expenses related to maintenance of assets and equipment, price increase, exchange rate impact on part of costs linked to US dollars and the sales of copper, that began in June 2004.

By Nature

                                                         
    Denominated                                
    R$     US$     03/31/05     %     03/31/04     %     D%  
Personnel
    162,803             162,803       8       149,942       10       9  
Material
    357,742       73,273       431,015       21       230,902       16       87  
Oil and gas
    203,518             203,518       10       160,025       11       27  
Outsourced services
    276,970       56,729       333,699       16       205,210       14       63  
Outsourced transportation
    5,345       101,548       106,893       5       83,281       6       28  
Energy
    77,514             77,514       4       43,871       3       77  
Acquisition of iron ore and pellets
          313,217       313,217       15       268,222       18       17  
Tolling industrialization
          16,379       16,379       1       14,991       1       9  
Depreciation and depletion
    191,226             191,226       9       148,533       10       29  
Amortization of goodwill
    96,095             96,095       5       96,096       6        
Others
    33,781       91,662       125,443       6       74,856       5       68  
 
                                           
Total
    1,404,994       652,808       2,057,802       100       1,475,929       100       39  
 
                                         
 
    68 %     32 %                                        
 
                                                   
             
  CVRD     8

 


Table of Contents

(PIE CHART)

1.3.3- Results of Shareholdings by Business Area

The numbers below do not necessarily reflect the individual results of each company, but rather the amounts effectively applicable to the business area.

                         
Business Area   03/31/05     03/31/04     %  
Ferrous Minerals
                       
• Iron ore
    377,308       139,778       170  
• Pellets
    148,809       100,349       48  
• Manganese and ferroalloys
    145,929       76,537       91  
Non-Ferrous Minerals
    (3,807 )     5,635       (168 )
Logistics
    46,337       35,189       32  
Holdings
                       
• Steel
    140,930       121,249       16  
• Aluminum
    200,863       89,613       124  
Others
    272       3,697       (93 )
 
                   
Gain on investments accounted for by the equity method
    1,056,641       572,047       85  
 
                   
 
                       
Provision for losses
    (10,998 )     (28,402 )     61  
 
                       
Amortization of goodwill
    (57,270 )     (57,270 )      
 
                       
Exchange variation in Stockholders’ Equity of companies abroad
    37,827       23,184       63  
 
                   
 
                       
Results of equity investments
    1,026,200       509,559       101  
 
                   

The effects of exchange rate variation on debt generated a sharp negative variation impacting the results of equity investments due to the real devaluation against US dollar of only 0.4% and 0.7% in the first quarter of 2005 and 2004, respectively.

Ferrous Minerals

Iron Ore and Pellets

Operationally, there occurred increases in iron ore and pellets sales volume and prices.

Manganese and Ferroalloys

Equity in the results of investees had an increase, mainly due to the increases in sales volume and selling average prices of manganese and ferroalloys.

Non-Ferrous Minerals

Operating income was stable despite the increase in sales volume and increase in average prices in US. The gains were offset by the negative exchange rate of the euro over costs and costs with mineral researches and expenses.

             
  CVRD     9

 


Table of Contents

Logistic

Equity in the results of investees increased substantially, due to the increase in volume transported through the railroads and shipments as well as increase in port services. Selling average prices increased mainly due to the strong demand for transportation services, especially from the exporters.

Holdings

Aluminum

Better results mainly due to increase in price and volume.

Steel

Although we divested CST, the equity in the results increased due to exceptional results obtained mainly by the jontly-controlled company Usiminas.

1.3.4- Other Operating Expenses

The other operating expenses, except for non recurring item referring to Samitri’s goodwill amortization, increased R$ 17,398 (R$ 274,581 on 03/31/05 compared to R$ 257,183 on 03/31/04) (Note 6.20).

1.3.5- Net Financial Results

The net financial result on 03/31/05 had a impact of R$ 14,304 (expense of R$ 190,607 on 03/31/05 compared to expense of R$ 204,911 on 03/31/04).

1.3.6- Income Tax and Social Contribution

Income tax and social contribution reflect an expense of R$ 116,268 on 03/31/05 compared with an expense of R$ 43,224 on 03/31/04, mainly caused by increase of taxable income. (Note 6.10)

             
  CVRD     10

 


Table of Contents

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 Accounting Practices Generally Accepted in Brazil)

2- Balance Sheet

                                         
March 31   In thousands of reais  
            Parent Company     Consolidated  
    Notes     03/31/05     12/31/04     03/31/05     12/31/04  
Assets
                                       
 
                                       
Current assets
                                       
 
                                       
Cash and cash equivalents
    6.5       300,355       305,927       3,239,768       3,916,758  
Accounts receivable from customers
    6.6       1,619,253       1,849,954       3,413,896       3,076,060  
Related parties
    6.8       963,991       588,563       131,320       73,360  
Inventories
    6.7       935,812       870,197       2,963,736       2,893,837  
Taxes to recover or offset
    6.9       477,741       512,246       815,259       898,174  
Deferred income tax and social contribution
    6.10       473,668       345,967       587,969       428,358  
Others
          369,524       252,096       785,162       643,507  
 
                               
 
            5,140,344       4,724,950       11,937,110       11,930,054  
 
                               
 
                                       
Long-term receivables
                                       
 
                                       
Related parties
    6.8       562,107       586,668       115,325       108,973  
Loans and financing
          103,322       106,324       147,951       149,843  
Deferred income tax and social contribution
    6.10       528,869       523,355       1,011,684       1,057,986  
Judicial deposits
    6.14       1,181,151       1,147,433       1,731,461       1,679,901  
Prepaid expenses
                      101,154       94,908  
Accounts receivable - sale of assets
                      34,375       38,465  
Assets for sale
                      92,496       111,419  
Advances to energy suppliers
                      302,394       260,264  
Others
          51,209       27,768       250,618       208,635  
 
                               
 
            2,426,658       2,391,548       3,787,458       3,710,394  
 
                               
 
                                       
Permanent assets
                                       
 
                                       
Investments
    6.11       13,932,719       12,975,425       2,773,384       2,829,997  
Property, plant and equipment
    6.12       16,386,783       15,246,012       26,181,260       24,797,944  
Deferred charges
                      204,558       203,079  
 
                               
 
            30,319,502       28,221,437       29,159,202       27,831,020  
 
                               
 
            37,886,504       35,337,935       44,883,770       43,471,468  
 
                               
 
                                       
Liabilities and stockholders’ equity
                                       
 
                                       
Current liabilities
                                       
 
                                       
Short-term debt
    6.13                   702,853       515,202  
Current portion of long-term debt
    6.13       724,782       670,297       2,058,984       2,525,818  
Payable to suppliers and contractors
          1,584,524       1,515,901       2,020,679       1,972,062  
Related parties
    6.8       3,083,308       2,042,670       108,801       106,302  
Payroll and related charges
          198,376       288,452       305,163       399,428  
Pension Plan - Valia
          90,790       91,121       90,790       91,121  
Proposed dividends and interest on stockholders’ equity
          1,278,513       1,278,513       1,516,322       1,286,231  
Taxes and contributions
          575,053       527,324       977,842       1,556,718  
Others
          335,266       378,797       930,504       873,716  
 
                               
 
            7,870,612       6,793,075       8,711,938       9,326,598  
 
                               
 
                                       
Long-term liabilities
                                       
 
                                       
Long-term debt
    6.13       2,939,859       2,910,794       9,336,284       9,044,631  
Related parties
    6.8       3,569,389       3,783,952       31,131       41,158  
Provisions for contingencies
    6.14       1,994,756       1,952,786       2,630,271       2,603,969  
Pension Plan - Valia
          576,209       569,671       576,209       569,671  
Provision for environmental liabilities
          263,281       255,464       263,281       255,464  
Provisions for derivatives
          43,778       55,268       379,396       432,483  
Others
          844,097       847,592       1,008,431       987,318  
 
                               
 
            10,231,369       10,375,527       14,225,003       13,934,694  
 
                               
 
                                       
Deferred income
                      8,909       9,538  
 
                               
Minority interests
                      2,153,397       2,031,305  
 
                               
 
                                       
Stockholders’ equity
                                       
 
                                       
Paid-up capital
    6.16       7,300,000       7,300,000       7,300,000       7,300,000  
Revenue reserves
          12,484,523       10,869,333       12,484,523       10,869,333  
 
                               
 
            19,784,523       18,169,333       19,784,523       18,169,333  
 
                               
 
            37,886,504       35,337,935       44,883,770       43,471,468  
 
                               

The additional information, notes and attachment I are an integral part of the quarterly information.

             
  CVRD     11

 


Table of Contents

(A free translation of the original in Portuguese relating to the Quarterly Information prepared in accordance with the requirements
of Accounting Practices Generally Accepted in Brazil)

3- Statement of Income

                                         
Periods ended March 31   In thousands of reais  
            Parent Company     Consolidated  
    Notes     03/31/05     03/31/04     03/31/05     03/31/04  
Operating revenues
    1.2.1/                                  
Sales of ore and metals
    1.3.1                                  
Iron ore and pellets
            2,701,710       2,327,709       3,941,538       3,207,677  
Manganese and ferroalloys
                        498,239       368,136  
Copper
            188,079             199,980        
Potash
            80,373       65,272       80,373       65,272  
Kaolin
                        104,576       112,594  
 
                               
 
            2,970,162       2,392,981       4,824,706       3,753,679  
 
                                       
Transport services
            365,932       332,627       724,463       645,534  
Sales of aluminum-related products
            59,963             1,039,968       902,678  
Sales of steel products
                        452,153       609,651  
Other products and services
            9,582       5,539       11,073       18,013  
 
                               
 
            3,405,639       2,731,147       7,052,363       5,929,555  
 
                                       
Value Added taxes
            (177,391 )     (122,949 )     (331,790 )     (270,930 )
 
                               
 
                                       
Net operating revenues
            3,228,248       2,608,198       6,720,573       5,658,625  
 
                               
 
                                       
Cost of products and services
    1.2.2/                                  
Ores and metals
    1.3.2       (1,883,331 )     (1,374,289 )     (2,405,412 )     (1,889,836 )
Transport services
            (133,552 )     (98,616 )     (440,795 )     (408,193 )
Aluminum-related products
            (32,918 )           (549,292 )     (463,879 )
Steel products
                        (383,660 )     (392,482 )
Other products and services
            (8,001 )     (3,024 )     (5,820 )     (10,629 )
 
                               
 
            (2,057,802 )     (1,475,929 )     (3,784,979 )     (3,165,019 )
 
                               
 
                                       
Gross profit
            1,170,446       1,132,269       2,935,594       2,493,606  
 
                                       
Gross margin
            36.3 %     43.4 %     43.7 %     44.1 %
 
                                       
Operating expenses
                                       
Selling
            (85 )     (4,655 )     (100,149 )     (112,941 )
Administrative
    6.20       (123,026 )     (104,589 )     (257,549 )     (242,388 )
Research and development
            (72,657 )     (63,339 )     (81,129 )     (66,431 )
Other operating expenses
            (78,813 )     (84,600 )     (120,868 )     (109,597 )
Non recurring item - Samitri’s Goodwill amortization
                  (182,796 )           (182,796 )
 
                               
 
            (274,581 )     (439,979 )     (559,695 )     (714,153 )
 
                               
Operating profit before financial results and results of equity investments
            895,865       692,290       2,375,899       1,779,453  
Results of equity investments
    6.11                                  
Gain on investments accounted for by the equity method
            1,056,641       572,047       130,359       64,131  
Amortization of goodwill
            (57,270 )     (57,270 )     (57,270 )     (57,270 )
Provision for losses
            (10,998 )     (28,402 )            
Exchange variation in stockholders ´equity of companies abroad
            37,827       23,184       430       422  
 
                               
 
            1,026,200       509,559       73,519       7,283  
Financial results
    6.18       (190,607 )     (204,911 )     (274,447 )     (505,474 )
 
                               
Income before income tax and social contribution
            1,731,458       996,938       2,174,971       1,281,262  
Income tax and social contribution
    6.10       (116,268 )     (43,224 )     (390,544 )     (235,548 )
 
                               
Income before minority interests
            1,615,190       953,714       1,784,427       1,045,714  
Minority interests
                        (169,237 )     (92,000 )
 
                               
 
                                       
Net income for the period
            1,615,190       953,714       1,615,190       953,714  
 
                               
 
                                       
Number of shares outstanding at the end of the period (in thousands) (a)
            1,151,520       1,151,520       1,151,520       1,151,520  
 
                               
 
                                       
Net Earnings per share outstanding at the end of the period (R$)
            1.40       0.83       1.40       0.83  
 
                             

The additional information, notes and attachment I are an integral part of the quarterly information.

             
  CVRD     12

 


Table of Contents

(a) Reflects as if the stocks split had occurred on 03/31/04

             
  CVRD     13

 


Table of Contents

(A free translation of the original in Portuguese relating to the Quarterly Information prepared in accordance with the requirements
of Accounting Practices Generally Accepted in Brazil)

4- Statement of Changes in Stockholders’ Equity (Additional Information)

                                                                         
Periods ended March 31   In thousands of reais  
            Revenue reserves              
    Paid-up     Expansion/             Unrealized             Fiscal     Treasury     Retained        
    capital     Investments     Depletion     income     Legal     incentives     stock     earnings     Total  
December 31, 2003
    6,300,000       6,039,326       1,004,166       557,266       1,080,141       89,993       (131,318 )           14,939,574  
 
                                                     
 
                                                                       
Capitalization of reserves
    1,000,000       (910,007 )                       (89,993 )                  
Realization of reserve
                      (211,538 )                       211,538        
Net income for the year
                                              6,459,519       6,459,519  
Interim interest on stockholders’ equity
                                              (1,671,484 )     (1,671,484 )
Interim dividends
                                              (279,763 )     (279,763 )
Additional remuneration proposed
                                              (1,278,513 )     (1,278,513 )
Appropriation to revenue reserves
          3,077,659                   322,976       40,662             (3,441,297 )      
 
                                                     
December 31, 2004
    7,300,000       8,206,978       1,004,166       345,728       1,403,117       40,662       (131,318 )           18,169,333  
 
                                                     
 
                                                                       
Net income for the period
                                              1,615,190       1,615,190  
 
                                                     
December 31, 2004
    7,300,000       8,206,978       1,004,166       345,728       1,403,117       40,662       (131,318 )     1,615,190       19,784,523  
 
                                                     

The additional information, notes and attachment I are an integral part of the quarterly information.

             
  CVRD     14

 


Table of Contents

(A free translation of the original in Portuguese)
5- Statement of Cash Flows (Additional Information)

                                 
Periods ended March 31   In thousands of reais  
    Parent Company     Consolidated  
    03/31/05     03/31/04     03/31/05     03/31/04  
Cash flows from operating activities:
                               
Net income for the period
    1,615,190       953,714       1,615,190       953,714  
Adjustments to reconcile net income for the period with cash provided by operating activities:
                               
Results of equity investments
    (1,026,200 )     (509,559 )     (73,519 )     (7,283 )
Depreciation, amortization and depletion
    208,998       164,571       385,025       128,543  
Deferred income tax and social contribution
    (133,215 )     (149,214 )     (113,309 )     (93,075 )
Result on sale of assets
                       
Financial expenses and monetary and exchange rate variations on assets and liabilities, net
    45,163       88,268       46,291       180,134  
Minority interests
                169,237       92,000  
Disposal of property, plant and equipment
    1,775       1,309       15,247       15,003  
Amortization of goodwill in the cost of products sold
    96,095       96,096       96,095       96,095  
Non recurring item - goodwill of Samitri
          182,796             182,796  
Net losses on derivatives
    (3,350 )     34,420       4,595       152,966  
Dividends/interest on stockholders’ equity
    158,857       210,315             36,063  
Others
    18,223       (17,925 )     (81,327 )     (69,949 )
 
                       
 
    981,536       1,054,791       2,063,525       1,667,007  
 
                       
 
                               
Decrease (increase) in assets:
                               
Accounts receivable
    230,701       87,003       (337,836 )     (162,674 )
Inventories
    (65,615 )     (43,291 )     (69,899 )     (78,392 )
Others
    (105,270 )     (19,103 )     (122,327 )     (453,855 )
 
                       
 
    59,816       24,609       (530,062 )     (694,921 )
 
                       
 
                               
Increase (decrease) in liabilities:
                               
Suppliers and contractors
    68,623       63,410       48,617       (94,185 )
Payroll and related charges and others
    (90,076 )     (21,523 )     (94,265 )     33,841  
Taxes and contributions
    (47,729 )     192,438       (578,876 )     274,581  
Others
    29,213       19,732       (256,754 )     569,026  
 
                       
 
    (39,969 )     254,057       (881,278 )     783,263  
 
                       
Net cash provided by operating activities
    1,001,383       1,333,457       652,185       1,755,349  
 
                       
Cash flows from investing activities:
                               
Loans and advances receivable
    (14,892 )     352,072       12,030       62,743  
Guarantees and deposits
    (33,718 )     (48,456 )     (51,560 )     (60,082 )
Additions to investments
    (516,037 )     (73,626 )     (10,182 )     (105,188 )
Additions to property, plant and equipment
    (1,319,756 )     (873,446 )     (1,755,264 )     (929,033 )
Proceeds from disposal of property, plant and equipment/investments
    6,477       306       6,477       306  
 
                       
Net cash used in investing activities
    (1,877,926 )     (643,150 )     (1,798,499 )     (1,031,254 )
 
                       
 
                               
Cash flows from financing activities:
                               
Short-term debt
    798,557       (471,792 )     220,852       172,596  
Long-term debt
    700,165       991,498       725,819       2,141,162  
Repayments:
                               
Related parties
    (438,489 )                  
Financial institutions
    (189,262 )     (1,170,187 )     (477,347 )     (1,663,462 )
 
                       
Net cash provided by (used in) financing activities
    870,971       (650,481 )     469,324       650,296  
 
                       
Increase (decrease) in cash and cash equivalents
    (5,572 )     39,826       (676,990 )     1,374,391  
Cash and cash equivalents, beginning of the period
    305,927       342,008       3,916,758       2,128,544  
 
                       
Cash and cash equivalents, end of the period
    300,355       381,834       3,239,768       3,502,935  
 
                       
Cash paid during the period for:
                               
Short-term interest
          (4,016 )     (1,544 )     (18,339 )
Long-term interest
    (76,731 )     (105,368 )     (226,124 )     (282,057 )
Income tax and social contribution paid
    (166,634 )           (210,771 )     (9,255 )
Non-cash transactions:
                               
Additions to property, plant and equipment - interest capitalization
    (38,265 )     (22,461 )     (26,792 )     (21,919 )
Transfer of advance for future capital increase to investments
    (503,880 )                  
Additions to property, plant and equipment - mergers
                (48,681 )      

The additional information, notes and attachment I are an integral part of the quarterly information.

             
  CVRD     15

 


Table of Contents

(A free translation of the original in Portuguese relating to the Quarterly Information prepared in accordance with the requirements
of Accounting, Practices Generally Accepted in Brazil)

6- Notes to the Quarterly Information at March 31, 2005 and 2004

Expressed In thousands of reais

6.1- Operations

Companhia Vale do Rio Doce is a publicly traded corporation whose predominant activities are mining, processing and sale of iron ore, pellets, copper and potash, as well as logistic services, power generation and mineral research and development. In addition, through its direct and indirect subsidiaries and jointly-controlled companies, CVRD operates in iron ore and pellets, manganese and ferroalloys, kaolin, steel, aluminum-related products and logistics.

6.2- Presentation of Quarterly Information

The quarterly information have been prepared in conformity with accounting practices adopted in Brazil, based on corporate legislation, as well as the rules and guidelines issued by the Comissão de Valores Mobiliários - CVM (Brazilian Securities Commission) and Instituto dos Auditores Independentes do Brasil - IBRACON (Brazilian Independent Auditors Institute).

In order to provide better information to the market, the Company is presenting the following additional information regarding the Parent Company and Consolidated:

a)   Statement of Cash Flows - based on the criteria of NPC 20 of IBRACON; and
 
b)   Statement of Results by Business Segment - prepared in accordance with the business areas of the Company: ferrous minerals, non-ferrous minerals, aluminum, steel, logistics, others and corporate center.

Certain amounts have been adjusted for better comparability.

6.3- Significant Accounting Policies

(a)   The Company adopts the accrual basis of accounting;
 
(b)   Assets and liabilities that are realizable or due more than twelve months after the quarterly information date are classified as long-term;
 
(c)   Marketable securities, classified as cash and cash equivalents, are stated at cost plus accrued income earned to 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 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, when applicable, 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 losses when applicable;
 
(g)   Property, plant and equipment, including interest and financial charges incurred during the construction period of large-scale projects, are recorded at historical cost (increased by monetary restatement up to 1995) and depreciated on the straight-line method, based on the useful lives of the assets. Depletion of mineral reserves is based on the ratio between production and estimated capacity;
 
(h)   Research and development costs are registered as operational expenses until the proof of its economical feasibility to commercially exploit the mine. After this proof, the costs are capitalized as part of the costs of the mine operation;
 
(i)   During the development of a mine, stripping costs registered are capitalized as part of the depreciable cost of building and constructing the mine. Post-production stripping costs are recorded as cost of production when incurred; and
 
(j)   Pre-operating costs except for financial charges capitalized as mentioned in (g) above, are deferred and amortized over a period of 10 years. The deferred charges (consolidated) refer basically to copper projects and expansion of Alunorte and Albras.
             
  CVRD     16

 


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6.4- Principles of Consolidation

(a)   The consolidated quarterly information show the balances of assets and liabilities on March 31, 2005 and 2004 and the operations of the Parent Company on March, 31 2005 and December 31, 2004, its direct and indirect subsidiaries and its jointly-controlled companies for the periods then ended;
 
(b)   Intercompany balances and the Parent Company’s investments in its direct and indirect subsidiaries and jointly-controlled companies were eliminated in the consolidation. Minority interests are shown separately on the balance sheet and statement of income;
 
(c)   In the case of investments in companies in which the control is shared with other stockholders, the components of assets and liabilities and revenues and expenses are included in the consolidated quarterly information in proportion to the participation of the Parent Company in the capital of each investee;
 
(d)   The principal figures of the subsidiaries and jointly-controlled companies included in the consolidation are presented in Attachment I.

6.5- Cash and Cash Equivalents

                                 
    Parent Company     Consolidated  
    03/31/05     12/31/04     03/31/05     12/31/04  
Cash and bank accounts
    23,414       89,667       434,263       416,086  
Marketable securities linked to the interbank deposit certificate rate
    276,941       216,260       966,996       820,736  
Time deposits / overnight investments
                1,470,828       1,945,613  
Others
                367,681       734,323  
 
                       
 
    300,355       305,927       3,239,768       3,916,758  
 
                       

6.6- Accounts Receivable from Customers

                                 
    Parent Company     Consolidated  
    03/31/05     12/31/04     03/31/05     12/31/04  
Domestic
    526,084       567,849       592,708       587,010  
Export
    1,178,719       1,378,177       3,073,705       2,753,238  
 
                       
 
    1,704,803       1,946,026       3,666,413       3,340,248  
 
Allowance for doubtful accounts
    (46,948 )     (54,948 )     (211,942 )     (221,179 )
Allowance for ore weight credits
    (38,602 )     (41,124 )     (40,575 )     (43,009 )
 
    1,619,253       1,849,954       3,413,896       3,076,060  
 
                       

6.7- Inventories

                                 
    Parent Company     Consolidated  
    03/31/05     12/31/04     03/31/05     12/31/04  
Finished products
                               
. Iron ore and pellets
    345,213       363,265       597,138       592,115  
. Manganese and ferroalloys
                424,620       389,203  
. Aluminum
                215,123       231,847  
. Steel products
                104,539       93,159  
. Copper
    22,981       6,860       22,981       6,860  
. Others
    8,145       5,066       76,541       70,957  
 
                       
 
    376,339       375,191       1,440,942       1,384,141  
Spare parts and maintenance supplies
    559,473       495,006       1,522,794       1,509,696  
 
                       
 
    935,812       870,197       2,963,736       2,893,837  
 
                       
             
  CVRD     17

 


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6.8- Related parties

                                                                 
    Consolidated  
    Assets     Liabilities  
    03/31/05     12/31/04     03/31/05     12/31/04  
            Related             Related             Related             Related  
            party -             party -             party -             party -  
    Customers     assets     Customers     assets     Suppliers     liabilities     Suppliers     liabilities  
Nibrasco
    35,723             37,198       1       36,188       2,805       20,803       17,353  
Hispanobras
    33,512       131       32,097       132       44,181       9,227       39,482       10,960  
Itabrasco
    31,811       19       31,655       1       21,447       6,412       33,744       3,107  
Kobrasco
    26,089       30,113       25,346       29,717       24,380       5,104       7,935       15,705  
Gulf industrial investment Co. - GIIC
    22,932             13,713             2,552             131        
Usiminas
    20,902       75,679       21,207                         102        
Valesul
    14,077       263       30       244       41             28        
Samarco Mineração S.A
    3,432       273       2,262       126                          
PASA
    2,884             648             1,533                    
MRS Logistica
    802       13,411       3,704       26,372       1,912       45,819       3,912       41,742  
Baovale Mineração S.A
    531             336             19,795             17,535        
Ferroban
    526       103,005       526       102,200             27,442             22,373  
California Steel Industries, Inc.
    302             923             162             136        
Mineração Rio do Norte
    284       230       173             20,255             32,333        
Valepar S.A.
    247             178                   13,156             12,820  
Minas da Serra Geral
    242             224       34       205       3,747       182       157  
FVRD
    206       8,535       163       6,249             11,617       1,419       11,244  
Nova Era Silicon
    151       3,864             3,825                          
Others
    26,528       11,122       24,675       13,432       18,833       14,603       1,940       11,999  
 
                                               
Total
    221,181       246,645       195,058       182,333       191,484       139,932       159,682       147,460  
 
                                               
Registered as:
                                                               
Short-term
    221,181       131,320       195,058       73,360       191,484       108,801       159,682       106,302  
Long-term
          115,325             108,973             31,131             41,158  
 
                                               
 
    221,181       246,645       195,058       182,333       191,484       139,932       159,682       147,460  
 
                                               

6.9- Taxes to recover or offset

                                 
    Parent Company     Consolidated  
    03/31/05     12/31/04     03/31/05     12/31/04  
Witholding income tax on marketable securities and stockholders’ equit
    23,852       36,204       50,634       67,702  
Value-added tax
    350,029       358,780       432,977       403,314  
PIS and COFINS
    74,871       90,340       169,894       180,043  
Other credits derived from PIS and COFINS
    8,808       5,208       9,696       6,899  
Others
    20,181       21,714       152,058       240,216  
 
                       
 
    477,741       512,246       815,259       898,174  
 
                       
             
  CVRD     18

 


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6.10- 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:

                                 
    Net Deferred  
    Parent Company     Consolidated  
    03/31/05     12/31/04     03/31/05     12/31/04  
Tax loss carryforward
    145,000             738,046       558,129  
 
                       
 
                               
Temporary differences:
                               
. Pension Plan
    235,935       247,110       235,935       247,110  
. Contingent liabilities
    549,090       535,798       599,427       593,137  
. Provision for losses on assets
    122,678       156,123       126,538       166,038  
. Others
    (50,166 )     (69,709 )     (100,293 )     (78,070 )
 
                       
 
    857,537       869,322       861,607       928,215  
 
                       
 
                               
Total
    1,002,537       869,322       1,599,653       1,486,344  
 
                       
 
                               
Short-term
    473,668       345,967       587,969       428,358  
Long-term
    528,869       523,355       1,011,684       1,057,986  
 
                       
 
 
    1,002,537       869,322       1,599,653       1,486,344  
 
                       

There is no direct correlation between the net income of the Company and the income tax and social contribution result. In this way, the use of fiscal credits evolution can not be considered as indicative of future income of the Company.

The amounts reported as income tax and social contribution, which affected the results for the period, are as follows:

                                 
    Parent Company     Consolidated  
    03/31/05     03/31/04     03/31/05     03/31/04  
Income before income tax and social contribution
    1,731,458       996,938       2,174,971       6,047  
Equity in results of subsidiaries and affiliated companies
    (1,056,641 )     (572,047 )     (130,359 )     (64,131 )
Exchange rate variation on equity
    (37,827 )     (23,184 )     (430 )     (422 )
Non-deductable goodwill and provision for losses
    65,897       54,909       54,909       225  
 
                       
 
    702,887       456,616       2,099,091       (58,281 )
 
                               
Income tax and social contribution at combined tax rates
    34 %     34 %     34 %     34 %
 
                       
Federal income tax and social contribution at statutory rates
    (238,982 )     (155,249 )     (713,691 )     (432,350 )
Adjustments to net income which modify the effect on the results for the period:
                               
. Income tax benefit from interest on stockholders’ equity
    145,000       160,841       145,000       160,841  
. Fiscal incentives
    3,001             58,481       26,209  
. Interest on stockholders’ equity received
          (44,171 )           (44,171 )
. Results of overseas companies
                121,605       40,720  
. Reversal of provision for losses
    (17,765 )                  
. Others
    (7,522 )     (4,645 )     (1,939 )     13,203  
 
                       
Income tax and social contribution
    (116,268 )     (43,224 )     (390,544 )     (235,548 )
 
                       
         
    CVRD   19

 


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6.11- Consolidated investments

                                 
                    Results of investment  
    Investments     participations  
    03/31/05     12/31/04     03/31/05     03/31/04  
Usinas Siderúrgicas de Minas Gerais SA - USIMINAS (a) and (b)
    795,141       759,314       111,506       45,000  
YANKUANG
    28,347       28,222       125        
SIDERAR (a)
    39,993       39,816       177       291  
Rio Doce Argentina
    933       664       2        
Quadrem
    12,435       12,380       55       88  
LARKO
    7,999       7,963       36       42  
INDEBE
    17,082       7,963       35        
Goodwill in consolidated companies
    1,841,427       1,994,793       (57,270 )     (57,270 )
Others
    30,027       (21,118 )     18,853       19,132  
 
                       
 
    2,773,384       2,829,997       73,519       7,283  
 
                       


(a)   Interest by market price – Usiminas R$ 722,442 and Siderar R$ 349,606; and
 
(b)   Dividends received from Usiminas in the first quarter/2004, R$ 36,063.

6.12- Property, Plant and Equipment

(a) By type of asset:

                                         
            Consolidated  
            03/31/05     12/31/04  
    Average depreciation             Accumulated              
    rates     Cost     depreciation     Net     Net  
Buildings
    3.00 %     1,932,401       (725,741 )     1,206,660       1,068,301  
Installations
    3.42 %     6,507,283       (2,857,455 )     3,649,828       3,492,896  
Equipment
    9.32 %     1,861,937       (824,941 )     1,036,996       758,710  
Railroads
    3.85 %     6,445,658       (3,019,439 )     3,426,219       3,215,714  
Mineral rights (*)
    1.87 %     1,100,349       (133,849 )     966,500       908,177  
Others
    8.85 %     1,981,937       (894,595 )     1,087,342       840,627  
 
                               
 
            19,829,565       (8,456,020 )     11,373,545       10,284,425  
Construction in progress
          5,013,238             5,013,238       4,961,587  
 
                               
 
                                       
Total
            24,842,803       (8,456,020 )     16,386,783       15,246,012  
 
                               


(*) Calculation based on the volume of ore extracted in relation to the proven and probable reserves.
         
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(b) By business area:

                                 
    Consolidated  
    03/31/05     12/31/04  
            Accumulated              
    Cost     depreciation     Net     Net  
Ferrous
                               
In operation
    19,254,633       (9,266,149 )     9,988,484       8,877,955  
Construction in progress
    3,380,626             3,380,626       3,705,203  
 
                       
 
    22,635,259       (9,266,149 )     13,369,110       12,583,158  
 
                       
 
                               
Non-Ferrous
                               
In operation
    2,585,211       (615,206 )     1,970,005       1,863,304  
Construction in progress
    1,690,443             1,690,443       1,909,528  
 
                       
 
    4,275,654       (615,206 )     3,660,448       3,772,832  
 
                       
 
                               
Logistics
                               
In operation
    1,820,651       (552,726 )     1,267,925       2,020,249  
Construction in progress
    212,566             212,566       300,920  
 
                       
 
    2,033,217       (552,726 )     1,480,491       2,321,169  
 
                       
 
                               
Holdings
                               
In operation
    7,710,497       (3,434,115 )     4,276,382       3,975,906  
Construction in progress
    1,120,623             1,120,623       644,808  
 
                       
 
    8,831,120       (3,434,115 )     5,397,005       4,620,714  
 
                       
 
                               
Energy
                               
In operation
    577,279       (52,059 )     525,220       490,990  
Construction in progress
    547,859             547,859       486,370  
 
                       
 
    1,125,138       (52,059 )     1,073,079       977,360  
 
                       
 
                               
Corporate
                               
In operation
    703,287       (245,785 )     457,502       125,602  
Construction in progress
    743,625             743,625       397,109  
 
                       
 
    1,446,912       (245,785 )     1,201,127       522,711  
 
                       
 
                               
Total
    40,347,300       (14,166,040 )     26,181,260       24,797,944  
 
                       

6.13- Loans and Financing

Short-term

                 
    Consolidated  
    03/31/05     12/31/04  
Trade finance
    375,739       254,242  
Working capital
    327,114       260,960  
 
           
 
    702,853       515,202  
 
           

Long-term

                                                                 
    Parent Company     Consolidated  
    Current liabilities     Long-term liabilities     Current liabilities     Long-term liabilities  
    03/31/05     12/31/04     03/31/05     12/31/04     03/31/05     12/31/04     03/31/05     12/31/04  
Foreign operations
                                                               
 
                                                               
Loans and financing in:
                                                               
U.S. dollars
    616,224       544,713       2,714,345       2,668,360       1,111,607       1,345,148       3,497,103       3,232,885  
Yen
    1,587       1,655       3,968       4,964       1,587       1,655       3,968       4,964  
Other currencies
    7,697       8,739       50,392       52,228       9,444       8,739       55,928       60,372  
Notes in U.S. dollars
                                  92,501       2,691,539       2,627,867  
Export securitization
                            169,333       145,952       1,081,528       1,129,784  
Perpetual notes
                                        186,437       173,553  
Accrued charges
    25,373       34,857                   105,088       213,548              
 
                                               
 
    650,881       589,964       2,768,705       2,725,552       1,397,059       1,807,543       7,516,503       7,229,425  
 
                                               
 
                                                               
Local operations
                                                               
 
                                                               
Indexed by TJLP, TR and IGP-M
    21,176       20,182       36,741       39,306       176,119       167,766       419,116       392,399  
Basket of currencies
    2,820       10,915       680       747       11,923       21,060       43,215       110,931  
Loans in U.S. dollars
    48,407       48,193       132,922       144,382       418,277       471,422       1,028,704       996,020  
Non-convertible debentures
                811       807                   319,666       310,790  
Accrued charges
    1,498       1,043                   55,606       58,027       9,080       5,066  
 
                                               
 
                                                               
 
    73,901       80,333       171,154       185,242       661,925       718,275       1,819,781       1,815,206  
 
                                               
 
    724,782       670,297       2,939,859       2,910,794       2,058,984       2,525,818       9,336,284       9,044,631  
 
                                               
         
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(a)   Foreign currency loans and financing were converted into reais at exchange rates effective on the quarterly information date, being US$ 1.00 = R$ 2.6662 on 03/31/05 (R$ 2.6544 in 12/31/04) and ¥ 1.00 = R$ 0.024875 on 03/31/05 (R$ 0.025935 on 12/31/04);
 
(b)   At 03/31/05, our consolidated debt was secured as follows:

  •   Loans guaranteed by the Federal Government, to which we gave counter-guarantees of R$ 418;
 
  •   Securitization program of R$ 1,251;
 
  •   Property, plant and equipment of R$ 610;
 
  •   Others assets R$ 753.

(c)   Amortization of principal and financing charges incurred on long-term loans and financing obtained abroad and domestically mature as follows, as of 03/31/05:
                                 
    Parent Company     Consolidated  
2006
    891,621       30 %     1,588,089       17 %
2007
    471,667       16 %     1,539,249       17 %
2008
    404,063       14 %     848,489       9 %
2009 onward
    1,172,508       40 %     4,855,165       52 %
No due date (perpetual notes and debentures)
                505,292       5 %
 
                       
 
    2,939,859       100 %     9,336,284       100 %
 
                       

(d)   The estimated market values of long-term loans and financing calculated at present value based on available interest rates as of 03/31/05 approximate their book values.
 
(e)   On March 8, 2002, the Company, through its subsidiary Vale Overseas Limited issued US$ 300 million of Notes bearing interest at 8.625% p.a and maturing on March 8, 2007 (which may be extended to September 2008). In December, 2004, by public offering, CVRD bought back US$ 186,996 thousands of the principal outstanding notes for US$ 1,117.34 per each US$ 1,000.00. This transaction is guaranteed by the Company with political risk protection and is registered with the U.S. Securities and Exchange Commission (SEC). The Notes are listed on the Luxembourg Stock Exchange.
 
(f)   On August 1,2003 Vale Overseas Limited launched a US$ 300 million bonds issue maturing in 10 years. The bonds carry a coupon of 9.00% p.a with semiannual payment of interest. The bonds are unsecured and non-subordinated obligations of Vale Overseas Limited and have the full and unconditional guarantee of CVRD.
 
(g)   On 01/09/04 Vale Overseas Limited launched a US$ 500 millions of bonus maturing in 2034. The securities have coupons of 8.25% per period with half-periodly installment. The obligations are non-guaranteed and non-subordinated of Vale Overseas Limited and have full and unconditional guarantee by CVRD.

6.14- Contingent Liabilities

At the quarterly information dates the contingent liabilities of the Company were:

(a)   Provisions for contingencies and judicial deposits (booked under long-term liabilities and long-term assets, respectively), considered by management and its legal counsel as sufficient to cover losses from any type of lawsuit, were as follows:
                                                                 
    Parent Company     Consolidated  
                    Provisions for                     Provisions for  
    Judicial deposits     contingencies     Judicial deposits     contingencies  
    03/31/05     12/31/04     03/31/05     12/31/04     03/31/05     12/31/04     03/31/05     12/31/04  
Tax contingencies
    765,197       749,601       1,067,634       1,000,646       1,201,553       1,174,937       1,515,781       1,434,597  
Labor and social security claims
    230,212       226,540       489,888       500,900       301,137       292,502       591,693       605,551  
Civil claims
    169,083       155,883       419,720       434,402       212,702       197,044       503,242       546,983  
Other
    16,659       15,409       17,514       16,838       16,069       15,418       19,555       16,838  
 
                                               
Total
    1,181,151       1,147,433       1,994,756       1,952,786       1,731,461       1,679,901       2,630,271       2,603,969  
 
                                               

      The Company is party to labor, civil, tax and other suits and has been contesting these matters both administratively and in court. When applicable, these are backed by judicial deposits. Provisions for losses are estimated and restated monetarily by management based on the opinions of the legal department and outside counsel.
         
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    Tax contingencies relate principally to a legal action claiming unconstitutionality of CPMF (tax on bank transactions) and other actions relating to value-added tax (ICMS).
 
    Labor-related actions principally comprise employee claims in connection with disputes about the amount of indemnities paid upon dismissal and the one-third extra holidays pay.
 
    Civil actions principally relate to claims made against the Company by contractors in connection with losses alleged to have been incurred as a result of various past government economic plans.
 
    In addition to the contingencies for which we have made provisions we have possible losses totaling R$ 1,134,831 (R$ 1,962,613 consolidated). Based on the advice of our legal counsel, no provision is maintained.
 
(b)   Guarantees given to jointly-controlled companies are as follows:
                                         
    Amount of                          
    guarantee R$                          
            Denominated           Final   Counter
Affiliate or Joint Venture   03/31/05   currency   Purpose   maturity   guarantees
SAMARCO
  17,064   US$   Debt guarantee IFC   2008   None
VALESUL
  910   R$   Debt guarantee BNDES   2007   None

    The Company does not expect such guarantees to be executed and therefore no provisions for losses have been made. CVRD does not charge Valesul for granting these guarantees.
 
(c)   Upon privatization of the Company in 1997, the Brazilian government stipulated the issuance of non-convertible debentures (Debentures) to the stockholders of record, including the federal government. The maturity dates of these Debentures were established to guarantee that pre-privatization stockholders, including the federal government, would share any future benefits from mineral resources held by the Company and its subsidiary and affiliated companies that were not evaluated at the time of setting the minimum price of CVRD shares at the privatization auction.
 
    A total of 388,559,056 Debentures were issued at a par value of R$ 0.01 (one centavo), whose value is to be restated in accordance with the variation in the General Market Price Index (IGP-M), as set forth in the Issue Deed.
 
    On October 4, 2002, Comissão de Valores Mobiliários — CVM (Brazilian Securities Commission) approved the Company’s registration request, filed on June 28, 2002, for public trading of the Debentures. As from October 28, 2002, the Debentures can be traded on the secondary market.
 
    The debenture holders are entitled to receive semi-annual payments equivalent to a percentage of the net revenue deriving from certain mineral resources owned in May 1997 and included in the Issue Deed.
 
    According to the Debenture Issue Deed, the amount of the premium must include interest up to the month prior to that of effective payment, plus 1% in the month in which the funds are made available to the debenture holder. Pursuant to this Deed, the payment date shall take place each semester in March and September.
 
    As of 03/22/05 payments to Debentures holders related to copper operations, aggregated of R$ 7 million.
 
    Based on estimates of the operational start-up of copper projects, CVRD began calculating the premium referring to these minerals rights. Considering the iron ore sale, the Company estimates that the threshold for payment will be reached in approximately 2030 and 2020 for the Southern and Northern systems, respectively. Regarding other minerals, such as bauxite and nickel, the forecast for exploitation is for the second half of the decade, and according to the criteria established in the Deed, payment will be due on the net sales revenue in the fourth period after the date of first commercialization. The obligation to make payments to the debenture holders will cease when the pertinent mineral resources are exhausted.

6.15- 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 03/31/05, the provision for environmental liabilities amounted to R$ 263,281 (R$ 255,464 on 12/31/04), which was accounted for in

         
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“Provision for environmental liabilities” in long-term liabilities. The Company adopts the concepts of the Accounting for Asset Retirement Obligations, as follows:

.   Costs for mine closure are recorded as part of the cost of these assets and a corresponding provision is made for such future expenditure.
 
.   The estimated costs are accounted for at the present value of the obligations, discounted using a risk free rate; and
 
.   The estimated costs are reviewed annually and changes in the present value are adjusted in the recorded values of the assets and liabilities.

6.16- Paid-up Capital

At the Ordinary General Meeting of 04/28/04, the Company’s capital was increased to R$ 7.3 billion through capitalization of part of the expansion reserve in the amount of R$ 1 billion.

On August 18, 2004 the Extraordinary General Stockholders ´ Meeting approved the forward stock split. Each share, common and preferred, is represented by three shares. After the split the Company’s capital comprises 1,165,677,168, of which 749,949,429 common shares 415,727,739 class “A” preferred shares.

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 or 3% of the book net equity value of the share, whichever is greater.

6.17- Treasury Stock

The Board of Directors, under the terms of subparagraph XV of Article 13 of the Bylaws and based on Article 30 of Law 6404/76 and CVM Instructions 10 of 02/14/80 and 268 of 11/13/97, approved the acquisition by the Company of its own shares to be held in treasury for later sale or cancellation.

On 03/31/05, the Company had acquired 14,145,510 common shares and 11,815 preferred shares, which are held in treasury in the amount of R$ 131,318. In 03/31/05, 136 preferred shares were in treasury and were exchanged for Samitri’s shares, a merged company. The 14,145,510 common shares guarantee a loan of the subsidiary Alunorte.

                                                         
Shares                             Average  
Class   Quantity     Unit acquisition cost     quoted market price  
    03/31/05     12/31/04     Average     Low     High     03/31/05     12/31/04  
Preferred
    11,815       11,951       17.12       4.67       17.47       47.93       47.93  
Common
    14,145,510       14,145,510       9.27       6.69       17.36       56.13       56.13  
 
                                                   
 
    14,157,325       14,157,461                                          
 
                                                   
         
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6.18- Financial Results – Parent company and consolidated

Parent Company

                                                 
    03/31/05     03/31/04  
            Monetary and                     Monetary and        
            exchange rate                     exchange rate        
    Financial     variation on             Financial     variation on        
    expenses     liabilities     Total     expenses     liabilities     Total  
Foreign debt
    (4,914 )     (5,338 )     (10,252 )     (36,095 )     (34,599 )     (70,694 )
Local debt
    (4,165 )     (1,687 )     (5,852 )     (5,916 )     (3,064 )     (8,980 )
Related parties
    (67,075 )     (37,040 )     (104,115 )     (46,726 )     (16,227 )     (62,953 )
 
                                   
 
    (76,154 )     (44,065 )     (120,219 )     (88,737 )     (53,890 )     (142,627 )
Labor, tax and civil contingencies
    (31,011 )     (22,796 )     (53,807 )     (17,481 )     (24,141 )     (41,622 )
Derivatives, net of gain/losses (interest and currencies)
    (1,039 )     66       (973 )     (19,341 )     (815 )     (20,156 )
Derivatives, net of gain/losses (gold)
    4,389       (265 )     4,124       (15,079 )     (759 )     (15,838 )
CPMF
    (15,051 )           (15,051 )     (4,133 )           (4,133 )
Others
    (27,498 )     (32,785 )     (60,283 )     (19,830 )     (33,606 )     (53,436 )
 
                                   
 
    (146,364 )     (99,845 )     (246,209 )     (164,601 )     (113,211 )     (277,812 )
 
                                   
                                                 
            Monetary and                     Monetary and        
            exchange rate                     exchange rate        
    Financial     variation on             Financial     variation on        
    income     assets     Total     income     assets     Total  
Related parties
    13,284       16,688       29,972       18,883       21,729       40,612  
Marketable securities
    9,536       5,966       15,502       5,347       15,043       20,390  
Others
    16,303       (6,175 )     10,128       5,080       6,819       11,899  
 
                                   
 
    39,123       16,479       55,602       29,310       43,591       72,901  
 
                                   
Financial income (expenses), net
    (107,241 )     (83,366 )     (190,607 )     (135,291 )     (69,620 )     (204,911 )
 
                                   

Consolidated

                                                 
    03/31/05     03/31/04  
            Monetary and                     Monetary and        
            exchange rate                     exchange rate        
    Financial     variation on             Financial     variation on        
    expenses     liabilities     Total     expenses     liabilities     Total  
Foreign debt
    (80,710 )     (9,599 )     (90,309 )     (133,817 )     (79,378 )     (213,195 )
Local debt
    (64,570 )     (11,428 )     (75,998 )     (53,581 )     (23,762 )     (77,343 )
Related parties
    (27,373 )     (4,111 )     (31,484 )     (31,290 )     (18,150 )     (49,440 )
 
                                   
 
    (172,653 )     (25,138 )     (197,791 )     (218,688 )     (121,290 )     (339,978 )
Labor, tax and civil contingencies
    (31,011 )     (23,715 )     (54,726 )     (17,481 )     (24,141 )     (41,622 )
Derivatives, net of gain/losses (interest and currencies)
    4,588       (71 )     4,517       (19,341 )     (815 )     (20,156 )
Derivatives, net of gain/losses (gold, aluminum and alumina)
    (9,183 )     (3,183 )     (12,366 )     (133,625 )     (759 )     (134,384 )
CPMF
    (23,584 )           (23,584 )     (15,121 )           (15,121 )
Others
    (63,164 )     (75,171 )     (138,335 )     (69,942 )     (61,443 )     (131,385 )
 
                                   
 
    (295,007 )     (127,278 )     (422,285 )     (474,198 )     (208,448 )     (682,646 )
 
                                   
                                                 
            Monetary and                     Monetary and        
            exchange rate                     exchange rate        
    Financial     variation on             Financial     variation on        
    income     assets     Total     income     assets     Total  
Related parties
    28,993       13,107       42,100       17,727       17,847       35,574  
Marketable securities
    43,101       14,259       57,360       27,707       53,219       80,926  
Others
    40,746       7,632       48,378       23,752       36,920       60,672  
 
                                   
 
    112,840       34,998       147,838       69,186       107,986       177,172  
 
                                   
Financial income (expenses), net
    (182,167 )     (92,280 )     (274,447 )     (405,012 )     (100,462 )     (505,474 )
 
                                   
 
    CVRD   25

 


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6.19- Financial Instruments - Derivatives

The main market risks the Company faces are related to interest rates, exchange rates and commodities prices. CVRD has a policy of managing risks through the use of derivative instruments.

The Company’s risk management follows policies and guidelines reviewed and approved by the Board of Directors and Executive Board. These policies and guidelines prohibit speculative trading and short selling and require diversification of transactions and counterparties. The policy of the Company is to settle all contracts financially without physical delivery of the products. The credit limits and creditworthiness of counterparties are also reviewed periodically and are defined according to the rules approved by the Company’s management. The results of hedging are recognized monthly in the financial results.

The following table shows the movement of gains/loss on derivatives:

                                 
    Parent Company  
    03/31/05  
    Interest rates                    
    (libor)     Currencies     Gold     Total  
Gains/ (losses) unrealized on 12/31/04
    (9,268 )     9,405       (55,406 )     (55,269 )
Financial settlement
    5,147       (206 )     3,399       8,340  
Financial expenses, net
    984       (2,023 )     4,389       3,350  
Monetary variations, net
    51       15       (265 )     (199 )
 
                       
Gains/(losses) unrealized on 03/31/05
    (3,086 )     7,191       (47,883 )     (43,778 )
 
                       
                                 
    03/31/04  
    Interest rates                    
    (libor)     Currencies     Gold     Total  
Gains / (losses) unrealized on 12/31/03
    (135,977 )     15,856       (91,980 )     (212,101 )
Financial settlement
    11,122       (6,959 )     523       4,686  
Financial expenses, net
    (14,202 )     (5,139 )     (15,079 )     (34,420 )
Monetary variations, net
    (918 )     103       (759 )     (1,574 )
 
                       
Gains/(losses) unrealized on 03/31/04
    (139,975 )     3,861       (107,295 )     (243,409 )
 
                       
                                                 
    Consolidated  
    03/31/05  
    Interest rates                                
    (libor)     Currencies     Gold     Aluminum     Alumina     Total  
Gains/ (losses) unrealized on 12/31/04
    (44,887 )     9,405       (97,430 )     (152,280 )     (147,290 )     (432,482 )
Financial settlement
    7,786       (206 )     5,894       26,756       20,706       60,936  
Financial expenses, net
    6,611       (2,023 )     8,606       (10,982 )     (6,807 )     (4,595 )
Monetary variations, net
    (87 )     16       (731 )     (1,797 )     (655 )     (3,254 )
 
                                   
Gains/(losses) unrealized on 03/31/05
    (30,577 )     7,192       (83,661 )     (138,303 )     (134,046 )     (379,395 )
 
                                   
                                                 
    03/31/04  
    Interest rates                                
    (libor)     Currencies     Gold     Aluminum     Alumina     Total  
Gains / (losses) unrealized on 12/31/03
    (135,977 )     15,856       (91,980 )     (58,511 )     (52,046 )     (322,658 )
Financial settlement
    11,122       (6,959 )     523                   4,686  
Financial expenses, net
    (14,202 )     (5,139 )     (15,079 )     (67,014 )     (51,532 )     (152,966 )
Monetary variations, net
    (918 )     103       (759 )                 (1,574 )
 
                                   
Gains/(losses) unrealized on 03/31/04
    (139,975 )     3,861       (107,295 )     (125,525 )     (103,578 )     (472,512 )
 
                                   
 
    CVRD   26

 


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Maturity dates of the instruments above are as follows:

     
Gold
  December 2008
Interest (LIBOR)
  October 2007
Currencies
  December 2011
Alumina
  December 2008
Aluminum
  December 2008

6.20- Administrative and Other Operating Expenses

                                 
    Parent Company     Consolidated  
    03/31/05     03/31/04     03/31/05     03/31/04  
Administrative
                               
 
                               
Personnel
    52,286       41,430       103,750       87,619  
Technical consulting
    14,092       22,468       21,002       27,097  
Advertising and publicity
    13,689       5,698       14,600       6,007  
Depreciation
    12,969       10,580       29,807       25,371  
Travel expenses
    6,293       4,583       9,004       6,329  
Rents and taxes
    6,685       4,686       12,300       8,490  
Others (*)
    17,012       15,144       67,086       81,475  
 
                       
 
    123,026       104,589       257,549       242,388  
 
                       


(*)   Refers basically to maintenance expenses.
                                 
    Parent Company     Consolidated  
    03/31/05     03/31/04     03/31/05     03/31/04  
Other operating expenses (income)
                               
Provisions for contingencies
    27,000       27,245       25,638       26,643  
Provision for loss on ICMS credits
                19,560        
Provision for profit sharing
    45,000       38,000       46,689       38,000  
Agreement of Itabira’s taxes
          16,687             16,687  
Donation
                       
Provision for loss on asstes
                       
Others
    6,813       2,668       28,981       28,267  
 
                       
 
    78,813       84,600       120,868       109,597  
 
                       

6.21- Subsequent Events

Payment and Remuneration of Shareholder Debentures

According the meeting realized 04/14/05, the Board of Directors of Companhia Vale do Rio Doce approved the payment of the first installment of the minimum dividend for 2005 in accordance to the Board of Directors proposal. The first installment of the minimum dividend will be paid according to the procedures as follows.

The payment of the first quote were paid according to this terms:

(a)   Distribution of interest on shareholders’ equity in the amount of R$ 1,279,900,000.00 (one billion two hundred seventy nine million nine hundred thousand Brazilian reais) equivalent to BRL 1.11 (one Brazilian real and eleven cents) per outstanding preferred share or common share. The value of R$ 1.11 per share is equal to US$ 0.435 per share converted into Brazilian reais by the 2.5598 BRL/USD exchange rate for the sale of USD (Ptax – option 5 code), as informed by the Central Bank of Brazil on April 13, 2005.
 
(b)   The payment will take place from April 29, 2005, onwards. The distribution of interest on shareholders’ equity is subject to withholding income tax in accordance to the applicable law.
 
    CVRD   27

 


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Capital Increase

On April 27, 2005, the Extraordinary Shareholders’ Meeting approved a proposal of the Executive Board for a capital increase without issuing new shares, with the favorable opinions by the Board of directors and Fiscal Council, through capitalization of part of the Expansion/Investments Reserve in the amount of R$ 5,129,318, tax reserves of R$ 525,853, exhaustion reserve of R$ 1,004,166 and capitalization of tax reserves in the amount of R$ 40,663 increasing its share capital from R$ 7,300 millions to R$ 14,000 millions.

CVRD enhances committed bank facilities

On April 7, 2005 CVRD increased the size of its program of committed bank facilities. The program has been enlarged from US$ 500 million to US$ 750 million, the increase being accompanied by an extension in tenure and a cost reduction. The changes result from the rollover of a US$ 400 million tranche of the bank line contracted by CVRD in May 2004, which is due in May 2005.

CVRD has contracted a committed bank facility of US$ 650 million with a syndicate of commercial banks from the USA, Europe and Asia, led by HSBC, which includes Santander, ABN Amro, JP Morgan, Calyon, Bankboston, WestLB, Bank of Tokyo-Mitsubishi, Société Générale, BNP Paribas and Mizuho Bank. The transaction was structured in such a way as not to have any restriction related to sovereign risk on the disbursement of committed funds.

The new facility has a utilization term of two years, and a payback period - if drawn down - of two years. The commission fee is 0.3% a year, and the cost of the credit line, in the event of being drawn down, is 0.75% over Libor.

Since the beginning of the program, in May 2004, CVRD has never made use of the funds available.

 

    CVRD   28

 


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Part III

9- Attachment I — Statement of Investments in Subsidiaries and Jointly-Controlled Companies

                                                                                                                 
Period ended March 31, 2005     In thousands of reais  
    Accounting information  
    Participation (%)     Assets     Liabilities     Statement of income  
                                                                                                    Income     Adjusted  
                                                            Adjusted             Cost of     Operating     Non-     tax and     net  
                                                            stockholders’     Net     products     income     operating     social     income  
    Total     Voting     Current     Long-term     Permanent     Current     Long-term     equity     revenues     and services     (expenses)     result     contribution     (loss)  
Subsidiaries (a)
                                                                                                               
Amazon Iron Ore Overseas Co. Ltd.
    100.00       100.00       175,387       8,151       1,995,557             1,168,675       1,010,420                   49,326                   49,326  
ALBRAS — Alumínio Brasileiro S.A.
    51.00       51.00       595,575       618,310       1,068,932       669,686       444,348       1,168,783       520,606       (352,950 )     (52,158 )     3       (23,012 )     92,489  
ALUNORTE — Alumina do Norte do Brasil S.A.
    57.03       61.74       581,129       203,942       2,541,532       401,852       1,197,197       1,727,554       406,830       (237,985 )     (41,055 )           (12,328 )     115,462  
Brasilux S.A.
    100.00       100.00       9,458       45,803       691       29,129             26,823                   (19 )                 (19 )
Caemi Mineração e Metalurgia S.A.(b)
    60.23       100.00       1,410,018       85,317       1,786,079       1,022,272       796,815       1,462,327       726,569       (404,932 )     (46,861 )     (29,800 )     (82,646 )     162,330  
Companhia Paulista de Ferro Ligas
    100.00       100.00       175,833       32,762       2,570       136,225       39,672       35,268       112       (195 )     3,307       18       (1,729 )     1,513  
Companhia Portuária Baia de Sepetiba
    100.00       100.00       111,625       5,950       146,922       79,665             184,832       43,678       (16,668 )     2,398       (181 )     (9,904 )     19,323  
CVRD Overseas Ltd.
    100.00       100.00       1,156,885       1,081,527             400,481       1,135,102       702,829       471,303       (385,357 )     (6,650 )                 79,296  
Docepar S.A.
    100.00       100.00       12,146       157,523       147       12,800       115,824       41,192                   2,561             (169 )     2,392  
Ferrovia Centro — Atlântica S.A.
    99.99       100.00       555,413       190,122       979,424       229,228       1,472,121       23,610       131,332       (147,696 )     1,132                   (15,232 )
Florestas Rio Doce S.A.
    100.00       100.00       73,506       48,714       3,749       31,217       18,602       76,150                   1,704             (3,715 )     (2,011 )
Itabira Rio Doce Company Limited — ITACO
    100.00       100.00       3,881,001       2,367,904       3,467,443       2,857,688       3,583,655       3,275,005       2,531,093       (2,149,212 )     116,026                   497,907  
Mineração Tacumã Ltda.
    100.00       100.00       1,061       1,032,500       23,612       16,210       1,031,000       9,963                   (15,397 )                 (15,397 )
Navegação Vale do Rio Doce S.A. — DOCENAVE
    100.00       100.00       407,790       113,480       8,891       152,252       112,329       265,580       108,816       (63,704 )     (3,997 )     37       (11,716 )     29,436  
Rio Doce Limited
    100.00       100.00       232,333       389,196       388,604       229,798       32,162       748,173       145,359       (153,977 )     32,128             (2,116 )     21,394  
Rio Doce Manganèse Europe — RDME
    100.00       100.00       349,570       232       94,622       185,361       (22,340 )     281,403       181,526       (151,958 )     (19,486 )     (371 )     (7,950 )     1,761  
Rio Doce Manganése Norway AS
    100.00       100.00       160,971             72,906       63,597       57,778       112,502       23,696       (9,024 )     (6,405 )           (2,314 )     5,953  
Rio Doce Manganês S.A.
    100.00       100.00       887,947       168,367       298,195       568,417       101,704       684,388       278,912       (144,693 )     (11,784 )     1,805       (31,287 )     92,953  
Salobo Metais S.A.
    100.00       100.00       377             842,277       855       608,514       233,285                                      
TVV — Terminal de Vila Velha S.A.
    99.89       99.89       39,258       4,717       53,891       18,722       2,727       76,417       25,178       (16,854 )     446             (2,979 )     5,791  
Urucum Mineração S.A.
    100.00       100.00       65,380       12,187       51,693       31,717       51,940       45,603       41,203       (18,685 )     (5,784 )     217       (5,798 )     11,153  
Valeoverseas Ltd.
    100.00       100.00       41,631       2,469,483             41,651       2,469,482       (19 )                 (3 )                 (3 )
 
                                                                                                               
Jointly-controlled companies (a)
                                                                                                               
California Steel Industries, Inc.
    50.00       50.00       1,110,344       6,352       677,302       353,584       663,796       776,618       904,306       (775,278 )     (22,854 )           (43,670 )     62,504  
Companhia Coreano-Brasileira de Pelotização — KOBRASCO
    50.00       50.00       110,408       79,458       212,754       248,815       75,860       77,945       130,246       (97,776 )     (12,622 )     (211 )     (8,962 )     10,675  
Companhia Hispano-Brasileira de Pelotização — HISPANOBRÁS
    50.89       51.00       147,654       41,855       61,858       96,433       29,915       125,019       114,013       (93,146 )     (3,875 )     134       (6,606 )     10,520  
Companhia Ítalo-Brasileira de Pelotização — ITABRASCO
    50.90       51.00       176,213       62,662       58,628       162,657       41,253       93,593       98,767       (83,847 )     (2,984 )     (3,874 )     (3,878 )     4,184  
Companhia Nipo-Brasileira de Pelotização — NIBRASCO
    51.00       51.11       175,700       57,182       106,109       133,294       31,423       174,274       185,387       (153,750 )     (7,813 )           (10,969 )     12,855  
Gulf Industrial Investment Co.-GIIC
    50.00       50.00       313,608             100,203       84,391       26,688       302,732       166,558       (99,987 )     (4,331 )                 62,240  
Minas da Serra Geral S.A. — MSG
    50.00       50.00       19,458       7,556       103,077       2,131       21,264       106,696       372       (1,632 )     (1,035 )     498             (1,797 )
Mineração Rio do Norte S.A.
    40.00       40.00       165,363       423,419       1,009,334       563,829       185,113       849,174       231,231       (104,499 )     (7,517 )     (2,986 )     (13,265 )     102,964  
MRS Logística S.A.
    29.35       28.75       576,787       292,194       887,455       644,519       606,401       505,516       392,088       (212,336 )     (47,984 )     (1,706 )     (38,382 )     91,680  
Samarco Mineração S.A.
    50.00       50.00       520,258       90,180       964,952       552,617       256,055       766,718       410,681       (167,808 )     (8,044 )           (37,136 )     197,693  
Valesul Alumínio S.A.
    54.51       54.51       237,478       64,149       130,633       71,354       74,133       286,773       127,649       (110,835 )     3,117       414       (6,560 )     13,785  
Baovale Mineração
    50.00       100.00       41,838             57,176       19,166             79,848       7,232       (1,208 )     (274 )           (812 )     4,938  
Nova Era Silicon S.A.
    49.00       49.00       27,129       9,241       43,952       16,885       30,978       32,459       27,150       (20,993 )     (5,282 )     (25 )     (870 )     (20 )

Observation:


(a)   The amounts above refer to figures presented at financial statements of the companies on 03/31/05 and not only the part consolidated.
 
(b)   Caemi financial statements are consolidated and include $ 28,764 of minority interest registered at non operating result.
 
     
    CVRD   29

 


Table of Contents

10- Other Information the Company Deems Relevant

10.1- Consolidated Iron Ore and Pellet Sales (Main Markets) (Not Reviewed)

                                 
    (Millions of tons)  
    03/31/05     %     03/31/04     %  
FOREIGN MARKET
                               
 
                               
ÁSIA
                               
CHINA
    11.5       20       9.5       18  
CORÉIA
    2.5       4       2.8       5  
PHILIPPINES
    1.0       2       0.8       2  
JAPAN
    5.8       10       5.3       10  
TAIWAN
    1.2       2       1.1       2  
OTHERS
    0.7       1       0.7       1  
 
                       
 
                               
 
    22.7       39       20.2       38  
 
                       
 
                               
EUROPE
                               
GERMANY
    5.9       10