United States
Securities and Exchange Commission

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

November 2004

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 [X] Form 40-F [   ]

(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 [   ] No [X]

(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 [   ] No [X]

(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 [   ] No [X]

(If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b). 82-  .)

US GAAP

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

THE PERFORMANCE OF COMPANHIA VALE
 
DO RIO DOCE IN THE THIRD QUARTER 2004

Except where otherwise indicated, the operating and financial information contained in this press release is presented based on the consolidated figures in accordance with accounting principles generally accepted in the United States of America (US GAAP). Except for the information on investments and market behavior, this information is based on quarterly financial statements reviewed by independent auditors. The principal subsidiaries of CVRD that are consolidated are: Caemi, PPSA, Alunorte, Albras, RDM, RDME, RDMN, Urucum Mineração, Docenave, Ferrovia Centro-Atlântica (FCA), Itaco, CVRD Overseas and Rio Doce International Finance.

www.cvrd.com.br
rio@cvrd.com.br

Investor Relations Departament

Roberto Castello Branco
Rafael Campos
Barbara Geluda
Daniela Tinoco
Eduardo Mello Franco
Rafael Azevedo
Tel: (5521) 3814-4540

PROFITABLE GROWTH AND NEW RECORDS

Rio de Janeiro, November 10, 2004 – Companhia Vale do Rio Doce (CVRD) achieved a new record-high net earnings of US$943 million, US$0.82 per share, for the third quarter of 2004 (3Q04). This was 101.5% higher than the net earnings of US$468 million reported in third quarter 2003 (3Q03), and 87.1% more than the 2Q04 net earnings of US$504 million.

Net earnings in the first nine months of 2004 were US$1.852 billion compared with US$1.278 billion in the first nine months of 2003 (9M03).

ROE (return on equity), based on rolling last-12-months (LTM) earnings, was 32.7%, compared with 39.8% in 3Q03, and 31.8% in 2Q04.

Operating earnings – adjusted EBIT⁽¹⁾ – of US$886 million, were also a record, 76.9% more than in 3Q03 (US$501 million), and 6.5% higher than in 2Q04 (US$832 million). The adjusted EBIT margin of 40.8% was the second highest in the company’s history, the highest-ever being the 43.3% of 2Q04, and was 580 basis points (bp) higher than the operating margin of 35.0% for 3Q04.

Cash flow, measured as adjusted EBITDA⁽²⁾, reached a quarterly record of US$1.007 billion, 59.8% higher than a year before (3Q03), and 3.7% higher than in the previous quarter (2Q04).

Adjusted EBITDA in the first nine months of 2004 reached US$2.721 billion, compared to US$1.562 billion in the same period of 2003, which represents an increase of 74.2%.

CVRD distributed dividends of US$0.68 per share in 2004, 15.7% higher than in 2003 and 29.7% higher than in 2002.

1

US GAAP

Several other records were achieved in 3Q04:

3Q04 was the first full quarter of shipments of copper concentrate produced by Sossego, the copper mine located in the Carajás Mineral Province, in the state of Pará, Brazil – totaling 96 thousand tons of concentrate in the quarter, generating revenue of US$70 million.

CVRD’s capital expenditures in 3Q04 totaled US$424 million, and in the first nine months of the year totaled US$1.270 billion. In the quarter, US$238.1 million was spent in growth capex – on mineral exploration and projects. All these projects are on schedule and will become new platforms of value creation over the next two years.

The reduction of financial leverage and increase in interest coverage ratios, even with significant capital expenditure and dividend distribution, shows the company’s financial strength.

The continued profitable growth has been made possible by the good execution of the Company’s strategy, appropriate financial policy, and rigid cost control, while also being facilitated by the favorable world market for mineral products.

SELECTED FINANCIAL INDICATORS

US$ million

BUSINESS OUTLOOK

The global economy has been growing at 5% per year, the highest rate since 1976. This synchronized expansion has been accompanied by considerable pressure on the supply of mineral products and logistics infrastructure, especially due to intense consumption by China.

2

US GAAP

The US continues to lead the worldwide economic recovery, with GDP growth accelerating again in 3Q04, to an annual rate of 3.7%. After a brief period of slowdown, industrial production in Japan has shown signs of increased vitality in recent months. Japan’s Ministry of Economy, Trade and Industry (METI) forecasts steel production of 28.9 million tons in 4Q04, and 112.8 million tons in 2004, the highest annual volume since 1974.

In contrast, recovery in the Euro zone is very moderate, and still depends on export performance.

China, in accordance with its government’s objective of correcting imbalances in its economy, is showing macroeconomic performance indicators that suggest a process of soft landing.

The year-on-year rate of increase in bank credit in China is declining continuously – it reached 14% at the end of August, after a peak of 23.9% at the end of August 2003. Growth in fixed assets investment is also declining after a five-year peak in January of this year; and 12-month consumer price inflation shows signs of stabilizing at around 5.2% per year. Finally, annualized GDP growth, although still high, was 9.1% to the end of 3Q04, its lowest growth rate since 1Q03.

The recent increase in interest rates, in our view, aims to influence expectations, demonstrating to economic agents that the People’s Bank of China continues to have a firm determination to stabilize the economy – potentially facilitating this task. We see no significant reason to change our expectations for the future performance of the Chinese economy, and demand for ores and metals as a consequence of this movement.

Brazil has been posting annualized growth rates of more than 6% since 4Q03, and, in contrast to the successive shocks that slowed its performance in 1995–2002, its economy is now benefiting from the benign global scenario. The more stable domestic environment, created by appropriate macroeconomic policies, is creating the foundations to make the recovery sustainable.

The global economy is undergoing a new oil shock, apparently accompanied by a change in long-term equilibrium oil prices. Any correction of this situation will require efforts for conservation, and the development of alternative energy sources – significant results not being expected from either in the short term. We do, however, expect the impact on global growth and inflation to be very limited in comparison with the effects of similar shocks in the past. The credibility that the world’s principal central banks have won for combating inflation removes the stimulus to pass-through cost increases to prices, and makes the use of tight monetary policies – which could otherwise produce recessionary effects in the short term – unnecessary.

As with all economic cycles, the current expansion of the world economy, after a strong acceleration, is now entering a consolidation phase. Leading indicators of economic activity suggest growth rates should be lower in the future, but high enough to maintain the pressure on demand for ores and metals.

Significant growth in world steel production continues: 8.3% year-on-year in the first nine months of 2003, and 9.2% year-on-year in 3Q04.

China’s steel production in the first nine months of 2004, according to the International Iron and Steel Institute (IISI), was 191.6 million tons, 20% higher than in 9M03.

3

US GAAP

In the same nine-month period, China’s iron ore imports reached 151 million tons, a year-on-year increase of 40.4 million tons – or 36.5% – and 2.8 million tons more than in the whole of 2003.

There are no signs of a reduction in global demand; on the contrary, pressure on existing production capacity is stronger than last year. The market for fines, lumps and pellets continues to be firm, with strong demand in Asia, Europe and South America.

Simultaneously, with the continuing imbalance between global supply and demand for alumina, spot prices have again reached US$400 per ton FOB. The strong demand from China – which imported 4.43 million tons in the first nine months of this year – and problems on the supply side have increased relative scarcity. We expect this deficit to continue in 2005, helping to maintain a firm price level for producers.

IMPORTANT RECENT EVENTS

Among several important recent developments are (i) a forward split of our stock, and (ii) regularization of the situation of our Shareholder Debentures held by ADR holders.

Also important were (iii) signing of long-term contracts for the supply of iron ore and manganese ferro-alloys, and (iv) in terms of asset management, the startup of the Candonga hydroelectric power plant, and the sale of our stake in PPSA. Finally, (v) a cooperation agreement was signed with JBIC.

The Extraordinary General Shareholders Meeting held on August 18 approved a three-for-one forward split of the company’s shares, to reposition the stock price after a substantial rise and facilitate transactions by retail investors. The company now has 1,165,677,168 shares, of which 749,949,429 are common shares and 415,727,739 are preferred shares.

The Central Bank of Brazil issued an authorization for investors who held shares in the company through ADRs on April 18, 1997 to regularize the registry of their Shareholder Debentures, issued by CVRD in 1997. This enables these investors who held CVRD’s ADRs prior to privatization to benefit freely from these assets – i.e., allowing these investors proper use of their rights.

In this quarter, CVRD signed three new long-term contracts for supply of iron ore:

In the last 12 months CVRD has signed contracts with clients for supply of a total of 555 million tons of iron ore and pellets over periods of up to 10 years. This helps establish a good degree of predictability for the future performance of the company’s sales, facilitating planning of expansion of production capacity.

The company also signed a contract for sale of manganese ferro-alloys to Corus, totaling annual supply of 30,000 tons over three years.

4

US GAAP

This contract represents a change in the paradigm of the commercial relationship in the global ferro-alloys market. Previously this raw material was supplied through spot market transactions. The change is very positive for suppliers and consumers, enabling the optimization of production planning.

The Candonga power plant, with installed capacity of 140 MW and average output of 64.5 MW, equivalent to 565,020 MWh/year, started up commercial generation. CVRD’s share of this output is the same as its 50% share in the consortium that built the plant, and is being channeled to supply its operational units in the States of Minas Gerais and Espírito Santo.

This is the fourth CVRD project to start up in 2004. The others are Pier III of the Ponta da Madeira maritime terminal, iron ore capacity expansion at Carajás to 70 million tons/year, and the Sossego copper mine.

CVRD sold all of its interest in PPSA to its subsidiary Caemi for US$117.8 million. The shares sold were 85.6% of PPSA’s voting stock and 82.0% of its total capital. The aim of the transaction was to consolidate the kaolin business in Caemi, which already operates in kaolin through Cadam. Completion of the sale is still subject to some conditions precedent.

The company signed a cooperation agreement with Japan Bank for International Cooperation (JBIC), to stimulate the flow of information on CVRD’s projects for expansion in infrastructure and mining. In the past, JBIC has taken part in the financing of projects that have been important for the growth of the company, and is consolidating its role as a source of long-term funding for the company for this purpose.

SALES VOLUME AND REVENUE

CVRD’s gross operating revenue in 3Q04 was US$2.287 billion, a quarterly record for the company and 12.5% higher than in 2Q04.

The main factor in the US$254 million increase in revenue from 2Q04 was the expansion in unit volume, representing US$ 180 million (70.9% of the increase). The increase in prices was responsible for the remaining US$74 million.

Total revenue in the first nine months of this year reached US$6.051 billion, 57.0% higher than in 9M03 of US$3.855 billion.

Record shipments of iron ore and pellets

Sales of ferrous minerals – iron ore, pellets, manganese and ferro-alloys – produced revenue of US$1.579 billion in 3Q04, 69.0% of the company’s total revenue. Shipments of iron ore generated US$1.093 billion, pellets US$281 million, pelletizing plant operation services at Tubarão US$12 million, manganese ore US$20 million and ferro-alloys US$169 million.

5

US GAAP

The total revenue from sales to Europe, CVRD’s main market, was US$699 million, or 30.6% of the company’s total revenue. The domestic market contributed US$621 million (27.2% of the total), China US$277 million (12.1%), Japan US$200 million (8.7%), and the rest of Asia US$87 million (3.8%).

Shipments of iron ore and pellets totaled 60.453 million tons, 29.7% more than in 3Q03 and 8.3% higher than in 2Q04. In the first nine months of the year unit volume of iron ore and pellets reached 169.2 million tons – compared with 130.6 million in 9M03, representing an increase of 29.6%.

Sales of iron ore in 3Q04 were 53.606 million tons and sales of pellets were 6.847 million tons.

The company acquired 4.023 million tons of iron ore from mining companies operating in the “Iron Quadrangle”, in the state of Minas Gerais, to complement its own production and meet the growing demand from clients. These purchases were 11.5 million tons in the first nine months of the year, 59.2% higher than in 9M03.

The average sale price of iron ore was US$20.39 per ton and that of pellets was US$41.04 per ton.

The Chinese market, with 11.340 million tons, continues to be the main export destination for iron ore and pellets, accounting for 18.8% of CVRD’s volume sold in 3Q04. In the first nine months of 2004 sales to China reached 28.4 million tons against 19.3 million in 9M03. Germany accounted for 10.3%, Japan for 9.5%, and France for 4.7%. The domestic market accounted for 23.5% of CVRD’s sales.

Manganese ore sales, at 313 thousand tons in the quarter, were 31.5% higher year-on-year, and 54.2% higher than in 2Q04. The considerable expansion in manganese shipments, and the increase in average price – of 38.3% year-on-year, and 17.9% from 2Q04 – reflect the resumption of full production at the Azul mine in Carajás, and the strong global demand. Between January and August 2004, total Chinese manganese ore imports reached 2.9 million tons, an increase of 53.7% compared to the same period in 2003, which illustrates the strong global demand.

Sales of ferro-alloys, of 156 thousand tons, were 16.4% higher than in 3Q03 and 13.9% higher than in 2Q04. In the first nine months of the year shipments totaled 492 thousand tons, 40.6% higher year-on-year.

Revenue of US$327 million from aluminum products

The aluminum production chain – bauxite, alumina and primary aluminum – provided revenue of US$327 million, 13.1% higher than in 2Q04 and 14.3% of CVRD’s total revenue.

Alumina sales were 508 thousand tons, 51.2% more than in 2Q04 (336 thousand tons). On the other hand, sales in the first nine months of 2004 amounted to 1.326 million tons, compared to 1.897 million tons in the same period of 2003. This reduction can be explained by the swaps, which impacted sales positively last year. In counterbalance for the higher volumes computed last year, the total volume shipped this year might be lower than what would be possible according to the production level of Alunorte, that reached 1.905 million tons in September, 2004.

Average price for alumina shipments in 3Q04 was US$255.91, up 28.3% vis-à-vis 3Q03, and 3.6% from 2Q04.

Sales of primary aluminum, at 101 thousand tons, were 15.1% lower than in 2Q04 (119 thousand tons), due to temporal differences in shipment dates. Average sale price was US$1,752.48/ton, 6.4% higher than in 2Q04.

6

US GAAP

First full quarter of copper shipments

This was the first full quarter of shipments from the Sossego copper mine: 96 thousand tons of copper concentrate were sold, generating revenue of US$70 million.

Good performance in industrial minerals; record kaolin sales

Potash provided sales revenue of US$35 million, 1.5% of CVRD’s 3Q04 revenue, up 25.0% year-on-year, and 12.9% from the previous quarter.

The Taquari-Vassouras mine still has some operating restrictions since the capacity expansion project is in progress. As a result, there was a slight reduction in volumes sold in the quarter, from 161 thousand tons in 2Q04 to 166 thousand tons. The increase in revenue came from the increase in average price, to US$217.39 per ton in the quarter, reflecting the strong demand for the product. This is an increase of 53.7% vis-à-vis 3Q03, and 16.4% from 2Q04.

Kaolin sales produced revenue of US$41 million, 1.8% of CVRD’s total and 5.1% higher than in 2Q04, with record unit sales volume of 319 thousand tons, 8.9% higher than the 293 thousand tons sold in 2Q04. Increase in kaolin sales will be possible in the future by the use of the idle capacity of PPSA.

Logistics: record in railroad transportation, productivity gains and safety improvement

CVRD’s logistics services provided revenue of US$232 million in 3Q04, an increase of 45.9% from the US$159 million of 3Q03, and an increase of 5.5% from US$220 million in 2Q04. Logistic services provided 10.1% of the company’s revenue in the quarter.

Rail transportation of general cargo for clients on the Carajás Railroad (EFC), the Vitória-Minas Railroad (EFVM) and the Centro-Atlântica Railroad (FCA) contributed US$164 million, port services provided US$43 million and coastal shipping and port support services US$25 million.

CVRD’s railroads carried 7.968 billion ntk of general cargo for clients, 8.1% more than in 3Q03 and 4.4% higher than in 2Q04. The main cargos were steel industry raw materials and products (43.5%), farm products (35.5%) and fuels (9.8%).

In the 9M04, CVRD railroads transported 21.8 billion ntk compared to 19.9 ntk in 9M03.

Revenue per 1,000 ntk increased on the three railroads: on EFVM, from US$16.08 in 2Q04 to US$16.48 in 3Q04; on EFC, from US$13.94 to US$15.63, and on FCA from US$20.62 to US$20.80.

Both EFVM and EFC made productivity gains in locomotive operation: in ntk per HP, EFVM increased from 8.53 in 2Q04 to 9.11 in the third quarter; and EFC increased from 15.18 to 16.57. There was a small reduction in locomotive operational productivity in the FCA, from 1.33 in 2Q04 to 1.28 this quarter.

In energy efficiency, there was also progressive improvement. EFVM consumed 2.24 liters per gross ton-kilometer (gtk), and EFC consumed 1.40 liters/gtk – compared with 2.28 and 1.41 liters/gtk, respectively, in 2Q04. FCA showed a slight increase, from 7.55 in 2Q04 to 7.64 in 3Q04, but this is lower than its 1Q04 result of 7.79 liters/gtk.

7

US GAAP

One of the most important goals of CVRD in the railroad operation has been the increase in safety. Therefore, the comparison between the number of accidents which occurred in 2000 with the annualized numbers corresponding to the recorded accidents which occured in the first ten months of 2004 shows significant improvement: there was a reduction of 22.7% at FCA, 69.1% at EFVM and of 42.1% at EFC. The number of accidents is higher at FCA, where efforts are being undertaken to obtain significant improvement in its indices.

The company’s ports and port terminals handled 7.634 million tons of cargo for clients, in line with that of 2Q04.

VOLUME SOLD – IRON ORE AND PELLETS

’000 tons

VOLUME SOLD — MINERALS AND METALS

’000 tons

IRON ORE AND PELLET SALES BY DESTINATION

’000 tons

LOGISTICS SERVICES

8

US GAAP

AVERAGE PRICES REALIZED

US$  per ton

GROSS REVENUES BY PRODUCT

US$ million

GROSS REVENUES BY DESTINATION

US$ million

9

US GAAP

3Q04 operating earnings, measured as adjusted EBIT, reached US$886 million, a new record: 6.5% higher than the previous record of US$832 million of 2Q04 – and 76.8% higher than the US$501 million of 3Q03.

In the first nine months of 2004, the operating earnings reached US$2.301 billion, a growth of 83.8% vis-a-vis the US$1.252 billion reached in the first nine months of 2003.

Adjusted EBIT margin was 40.8%, 250 bp less than the record 43.3% margin of 2Q04, and 580 bp above the 35.0% of a year earlier (3Q03).

EBIT was US$54 million higher than in the prior quarter, reflecting the increase of US$253 million in net revenue, partially offset by the US$141 million increase in cost of goods sold (COGS).

Fundamentally, the increase in COGS resulted from the production expansion and the marginal impact of the real appreciation during the period as most of CVRD’s costs are real-denominated. The main causes of the increase in COGS from 2Q04 to 3Q04 were: (a) increase of US$46 million on cost of outsourced services; (b) increase of US$24 million on material; (c) US$19 million increase in acquisition of other products; (d) increase of US$10 million in depreciation and exhaustion.

COGS BREAKDOWN

US$ million

Demurrage expenses, an indicator of the disequilibrium between global iron ore supply and demand, reached US$14 million in the 3Q04, amounting to US$40 million in the first nine months of 2004, compared to US$29 million in the first nine months of last year.

Three other factors had a negative effect on operating earnings from 2Q04 to 3Q04. First, other operational expenses increased US$43 million, on provisions for tax-related contingencies. Second, research and development expenses increased US$9 million, reflecting the acceleration of the company’s mineral exploration program. Third, sales, general and administrative expenses increased US$6 million accompanying the increase in production and sales.

Adjusted EBIT margin in the ferrous minerals division was 45.0%, 80 bp less than the 45.8% adjusted EBIT margin of 2Q04, and 610 bp higher than in 3Q03.

The adjusted EBIT margin of the aluminum business was 44.4%, close to the record margin of 47.5% obtained in 2Q04, which was due not only to price increases but also to operational excellence.

10

US GAAP

Adjusted EBIT margin in logistics services was 27.2%, 90 bp lower than the 28.1% achieved in 2Q04 and 310 bp lower than the 3Q03 adjusted EBIT margin of 30.3%.

OPERATING MARGINS BY BUSINESS AREA – Adjusted EBIT MARGIN

QUARTERLY CASH FLOW SURPASSES THE ONE BILLION DOLLAR MARK

Cash flow, measured as adjusted EBITDA was US$1.007 billion, the first time in CVRD’s history that its quarterly cash flow has exceeded US$1 billion. This new record is a symbol of the change in the scale of CVRD’s operations and efficiency standards.

Also, this record took place in a quarter when the Brazilian currency, the Real, appreciated against the US dollar, a negative factor in the dollar-denominated value for adjusted EBITDA.

Adjusted EBITDA in the 12 months to September 30, 2004 was US$3.289 billion. 3Q04 is the tenth successive quarter in which CVRD posted growth in LTM adjusted EBITDA – which was 64.5% higher than that of 3Q03.

The increase of US$36 million in adjusted EBITDA from 2Q04 to 3Q04 basically reflects: the US$54 million increase in adjusted EBIT, the US$23 million increase in depreciation, amortization and depletion, partially offset by the US$41 million reduction in dividends received.

In 3Q04 CVRD received dividends of US$19 million, from Samarco, vis-à-vis US$60 million in 2Q04.

The business areas contributed to the company’s adjusted EBITDA in the quarter in the following proportions: ferrous minerals 71.7%, aluminum 15.1%, logistics 9.9% and non-ferrous minerals 3.3%.

ADJUSTED EBITDA

US$ million

11

US GAAP

ADJUSTED EBITDA BY BUSINESS AREA

US$ million

NET EARNINGS REACHED AN ALL-TIME HIGH: US$943 MILLION

CVRD’s 3Q04 net earnings of US$943 million were 101.5% higher than in 3Q03 (US$468 million), and up 87.1% from 2Q04 (US$504 million).

3Q04 earnings were positively influenced by a US$314 million profit on the sale of the 20.11% interest in CST (4.42% of CST’s voting stock and 29.96% of its non-voting stock). The sale of CVRD’s remaining 7.91% stake in CST will take place until May 2005, as announced in the press release published on June 28, 2004.

Other than this capital gain, the increase in net earnings from 2Q04 to 3Q04 reflect: (a) a US$54 million increase in operating earnings; and (b) an increase of US$322 million in the result of monetary and exchange rate variation, derived from the appreciation of the Real.

On the other hand, factors reducing the 3Q04 net earnings were:

(a) US$160 million increase in income tax and social contribution;

(b) Reduction of approximately US$23 million in equity income, from US$150 million in 2Q04 to US$127 million in 3Q04.

(c) US$68 million increase in net financial expenses.

The fall in equity income is due to the reduction in the participation in CST. The contribution from the participations in steel industry decreased from US$92 million in the 2Q04 to US$50 million in 3Q04, while those of the aluminum and iron ore/pellet participations increased, respectively, from US$18 million and US$32 million in 2Q04 to US$20 million and US$50 million in 3Q04.

Losses of US$36 million were realized in 3Q04 on hedge transactions to protect against market risks (volatility of FX rates, interest rates and commodity prices). In 2Q04, hedge transactions produced a gain of US$23 million.

RESULTS FROM SHAREHOLDINGS

US$ million

12

US GAAP

DEBT: LEVERAGE AND COVERAGE INDICES CONTINUE TO IMPROVE

CVRD’s total debt on September 30, 2004 was US$4.418 billion, US$96 million less than the US$4.514 billion outstanding as of June 30, 2004.

Short-term debt was reduced by US$43 million from the end of 2Q04, and long-term debt by US$53 million. In percentage terms short-term debt was significantly reduced from 32.0% of total debt at the end of 3Q03, to 22.2% at the end of 3Q04.

Net debt (4) fell substantially, from US$3.455 billion at the end of June to US$2.479 billion on September 30, 2004. This was due to the increase in the cash balance which was generated by the strong cash flow from operations during the quarter, of US$1.1 billion, and the proceeds from the sale of shares of CST of US$415 million. Such cash position should change as a result of the payment of dividends at the end of October 2004.

Due to the considerable increase in 12-month rolling adjusted EBITDA, which was US$3.289 billion at the end of September, the leverage ratio total debt / LTM adjusted EBITDA fell to 1.34x at end of 3Q04, and total debt / enterprise value(5) was 16.2%, vis-à-vis 21.7% at the end of 2Q04.

There was a strong improvement in interest coverage as well, measured as LTM adjusted Ebitda / LTM interest payments (6), from 11.51x at the end of 2003 to 13.00x at the end of 3Q04.

FINANCIAL EXPENSES

US$ million

DEBT INDICATORS

US$ million

Enterprise Value = market capitalization + net debt

13

US GAAP

SOWING SEEDS FOR FUTURE GROWTH: CAPEX OF US$424 MILLION

CVRD’s capital expenditure totaled US$424 million in 3Q04, and US$1,270.3 billion in the first nine months of the year.

The figures on capital expenditure are preliminary and subject to revision due to the implementation of the Enterprise Resource Planning system, as informed in the 2003 20-F report.

US$238.1 million was allocated to growth capex, of which US$21.5 million was spent in mineral exploration, and US$185.9 million was allocated to maintenance of existing operations (“stay-in-business capex”). For the first nine months of 2004, growth capex was US$798.4 million and stay in business capex, US$471.9 million.

Of the amount invested in mineral exploration on 3Q04, 39.7% was spent in the Brazilian state of Pará (including Carajás), 22.3% in Minas Gerais, 6.3% in Piauí, 4.8% in other Brazilian states, and 26.9% in other countries. Exploration efforts in the quarter were primarily directed to prospecting for copper, nickel, gold, bauxite and manganese.

All the projects that are being developed by the company are progressing according to their established timetables. Furthermore, all the projects to expand production capacity in iron ore and alumina that are currently in progress are supported by medium and long-term sales contracts.

In 2004 CVRD concluded the Sossego Copper Mine, the expansion of iron ore production at Carajás to 70 million tons, the Pier III Maritime Terminal at the Ponta da Madeira Port, and the Candonga hydroelectric power plant.

14

US GAAP

SELECTED FINANCIAL INDICATORS FOR THE MAIN NON-CONSOLIDATED AFFILIATES AND JOINT VENTURES

Selected financial indicators for the Company’s main non-consolidated affiliates and joint ventures are available on CVRD’s Quarterly Financial Statements, on the Company’s website, www.cvrd.com.br, investor relations.

CONFERENCE CALL/WEBCAST

On Friday, November 12, CVRD will be holding a conference call/webcast at 12:00 pm, local time (Rio de Janeiro, Brazil), 9:00 am United States Eastern Standard Time and 2:00 pm British Standard Time. Instructions to participate in these events are available on CVRD’s website, www.cvrd.com.br, investor relations. A recording of CVRD’s conference call/webcast will be available for a period of 90 days after November 12, 2004.

15

US GAAP

FINANCIAL STATEMENTS

US$ million

BALANCE SHEET

US$ million

16

US GAAP

CASH FLOW STATEMENT

US$ million

17

US GAAP

APPENDIX

Reconciliation of “non-GAAP” information with corresponding US GAAP figures

(1) Adjusted EBIT

US$ million

(2) Adjusted EBITDA

The term “EBITDA” refers to a financial measure that is defined as earnings (losses) before interest, taxes, depreciation and amortisation; we use the term “Adjusted EBITDA” to reflect that our financial measure also excludes monetary gains/losses, equity in results of affiliates and joint ventures less dividends received from those companies, changes in provision for losses on equity investments, adjustments for changes in accounting practices, minority interests and non-recurring expenses. However, Adjusted EBITDA is not a measure determined under GAAP in the United States of America and may not be comparable to similarly titled measures reported by other companies. Adjusted EBITDA should not be construed as a substitute for operating income or as a better measure of liquidity than cash flow from operating activities, which are determined in accordance with GAAP. We have presented Adjusted EBITDA to provide additional information with respect to our ability to meet future debt service, capital expenditure and working capital requirements. The following schedule reconciles Adjusted EBITDA to net cash provided by (used in) operating activities reported on our Consolidated Statements of Cash Flows, which we believe is the most directly comparable GAAP measure:

RECONCILIATION BETWEEN ADJUSTED EBITDA VS. OPERATING CASH FLOW

US$ million

(3) Gross debt Debt / last 12 months Adjusted EBITDA

18

US GAAP

(4) Net Debt

RECONCILIATION BETWEEN GROSS DEBT VS. NET DEBT

US$ million

(5) Total Debt / Enterprise Value

Entreprise Value = net debt + market capitalization

(6) LTM Adjusted EBITDA / LTM interest expenses

“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.”

19

COMPANHIA VALE DO RIO DOCE
INDEX TO CONDENSED CONSOLIDATED FINANCIAL INFORMATION

F - 1

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders of Companhia Vale do Rio Doce

We have reviewed the accompanying unaudited condensed consolidated balance sheet of Companhia Vale do Rio Doce and subsidiaries as of September 30, 2004, and the unaudited condensed consolidated statements of income, of cash flows and of changes in stockholders’ equity for the three-month periods ended September 30 and June 30, 2004 and September 30, 2003 and for the nine-month periods ended September 30, 2004 and 2003, respectively. This interim financial information is the responsibility of the Company’s management. The unaudited financial information of certain affiliates, the equity in earnings which total US$15 million and US$37 million for the three and nine-month periods ended September 30, 2003, respectively, were reviewed by other independent accountants whose reports thereon have been furnished to us.

We conducted our reviews in accordance with the standards of the Public Company Accounting Oversight Board (United States). A review of interim financial information consists principally of applying analytical procedures to financial data and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the Public Company Accounting Oversight Board, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

Based on our reviews and the reports of the other accountants, we are not aware of any material modifications that should be made to the condensed consolidated interim financial information referred to above for them to be in conformity with accounting principles generally accepted in the United States of America.

We previously audited in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheet of Companhia Vale do Rio Doce and subsidiaries as of December 31, 2003, and the related consolidated statements of income, of cash flows and of changes in stockholders’ equity for the year then ended (not presented herein) and in our report dated February 20, 2004, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as of December 31, 2003 is fairly stated in all material respects in relation to the consolidated balance sheet from which it has been derived.

As discussed in Note 4 to the financial statements, the Company changed its method of accounting for asset retirement obligations, as from January 1, 2003 and, as discussed in Note 5 to the financial statements, the Company also changed its accounting policy for consolidation of variable interest entities as from January 1, 2004.

PricewaterhouseCoopers
Auditores Independentes

Rio de Janeiro, Brazil
November 10, 2004

F - 2

Condensed Consolidated Balance Sheets
Expressed in millions of United States dollars

F - 3

Condensed Consolidated Balance Sheets
Expressed in millions of United States dollars
(Except number of shares)

(Continued)

See notes to condensed consolidated financial information.

F - 4

Condensed Consolidated Statements of Income
Expressed in millions of United States dollars (Unaudited)
(except number of shares and per-share amounts)