Edgar Filing: VALLEY OF THE RIO DOCE CO

FORM 6-K

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

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- .)

COMPANHIA VALE DO RIO DOCE
Report on Form 6-K

Table of Contents

INDEX TO CONDENSED CONSOLIDATED FINANCIAL
INFORMATION (US GAAP)

SIGNATURES

This report on Form 6-K is hereby incorporated by reference into the Registration Statement on Form F-3 of Vale Overseas Limited, File No. 333-110867-01 and the Registration Statement on Form F-3 of Companhia Vale do Rio Doce, File No. 333-110867 and shall be deemed to be a part thereof from the date on which this report is furnished, to the extent not superseded by documents or reports subsequently filed or furnished.

COMPANHIA VALE DO RIO DOCE
INDEX TO CONDENSED CONSOLIDATED FINANCIAL INFORMATION


	Page
Consolidated Balance Sheets as of September 30, 2004 and December 31, 2003		F-3
Consolidated Statements of Income for the three-month periods ended September 30, 2004 and 2003 and June 30, 2004 and for the nine-month periods ended September 30, 2004 and 2003		F-5
Consolidated Statements of Cash Flows for the three-month periods ended September 30, 2004 and 2003 and June 30, 2004 and for the nine-month periods ended September 30, 2004 and 2003		F-6
Consolidated Statements of Changes in Stockholders’ Equity for the three-month periods ended September 30, 2004 and 2003 and June 30, 2004 and for the nine-month periods ended September 30, 2004 and 2003		F-7
Notes to the Condensed Consolidated Financial Information		F-8

F - 1

Condensed Consolidated Balance Sheets
Expressed in millions of United States dollars


	September		December 31,
	30, 2004		2003
	(unaudited)
Assets
Current assets
Cash and cash equivalents		1,939		585
Accounts receivable
Related parties		165		115
Unrelated parties		809		703
Loans and advances to related parties		48		56
Inventories		701		505
Deferred income tax		130		91
Others		454		419

		4,246		2,474

Property, plant and equipment, net and mining rights		7,727		6,484
Investments in affiliated companies and joint ventures and other investments, net of provision for losses on equity investments		1,053		1,034
Other assets
Goodwill on acquisition of subsidiaries		455		451
Loans and advances
Related parties		32		40
Unrelated parties		72		68
Prepaid pension cost		73		82
Deferred income tax		409		234
Judicial deposits		472		407
Unrealized gain on derivative instruments		1		5
Others		180		155

		1,694		1,442

TOTAL		14,720		11,434

F - 3

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

(Continued)


	September			December
	30, 2004			31, 2003
	(unaudited)
Liabilities and stockholders’ equity
Current liabilities
Suppliers		422			482
Payroll and related charges		118			78
Interest attributed to stockholders		287			118
Provision for income taxes		371			21
Current portion of long-term debt - unrelated parties		719			1,009
Short-term debt		201			129
Loans from related parties		62			119
Others		420			297

		2,600			2,253

Long-term liabilities
Employees post-retirement benefits		212			198
Long-term debt - unrelated parties		3,434			2,767
Loans from related parties		2			4
Provisions for contingencies (Note 11)		788			635
Unrealized loss on derivative instruments		165			96
Others		383			268

		4,984			3,968

Minority interests		656			329

Stockholders’ equity
Preferred class A stock - 1,800,000,000 no-par-value shares authorized and 415,727,739 issued		1,176			1,055
Common stock - 900,000,000 no-par-value shares authorized and 749,949,429 issued		2,121			1,902
Treasury stock - 11,967 (2003 - 12,549) preferred and 14,145,510 common shares		(88	)		(88	)
Additional paid-in capital		498			498
Other cumulative comprehensive loss		(4,214	)		(4,375	)
Appropriated retained earnings		2,719			3,035
Unappropriated retained earnings		4,268			2,857

		6,480			4,884

TOTAL		14,720			11,434

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)


										Nine months ended
	Three-month periods ended									September 30
	September			June 30,			September
	30, 2004			2004			30, 2003			2004			2003
Operating revenues, net of discounts, returns and allowances
Sales of ores and metals
Iron ore and pellets		1,386			1,262			918			3,709			2,425
Kaolin		41			39			25			119			55
Manganese and ferroalloys		193			164			81			488			245
Potash		35			31			28			89			70
Copper		70			24			—			94			—
Others		—			—			5			—			21

		1,725			1,520			1,057			4,499			2,816
Revenues from logistic services		232			220			159			643			412
Aluminum products		327			289			243			896			598
Other products and services		3			4			24			13			29

		2,287			2,033			1,483			6,051			3,855
Value-added tax		(114	)		(113	)		(51	)		(302	)		(143	)

Net operating revenues		2,173			1,920			1,432			5,749			3,712

Operating costs and expenses
Cost of ores and metals sold		(751	)		(647	)		(530	)		(2,041	)		(1,396	)
Cost of logistic services		(126	)		(117	)		(89	)		(358	)		(232	)
Cost of aluminum products		(174	)		(143	)		(185	)		(464	)		(484	)
Others		(2	)		(5	)		(8	)		(10	)		(11	)

		(1,053	)		(912	)		(812	)		(2,873	)		(2,123	)
Selling, general and administrative expenses		(112	)		(106	)		(74	)		(319	)		(168	)
Research and development		(36	)		(27	)		(22	)		(86	)		(45	)
Employee profit sharing plan		(17	)		(17	)		(2	)		(47	)		(23	)
Others		(69	)		(26	)		(21	)		(123	)		(101	)

		(1,287	)		(1,088	)		(931	)		(3,448	)		(2,460	)

Operating income		886			832			501			2,301			1,252

Non-operating income (expenses)
Financial income		10			19			27			41			84
Financial expenses		(165	)		(106	)		(83	)		(413	)		(229	)
Foreign exchange and monetary gains (losses), net		77			(245	)		(57	)		(210	)		250
Gain on sale of investments		314			—			—			314			—

		236			(332	)		(113	)		(268	)		105

Income before income taxes, equity results and minority interests		1,122			500			388			2,033			1,357

Income taxes
Current		(285	)		(41	)		41			(423	)		(100	)
Deferred		61			(23	)		(41	)		70			(131	)

		(224	)		(64	)		—			(353	)		(231	)

Equity in results of affiliates and joint ventures and change in provision for losses on equity investments		127			150			89			363			218
Minority interests		(82	)		(82	)		(9	)		(191	)		(56	)

Income from continuing operations		943			504			468			1,852			1,288

Change in accounting pratice for asset retirement obligations (Note 4)		—			—			—			—			(10	)

Net income for the period		943			504			468			1,852			1,278

Basic earnings per Preferred Class A Share		0.82			0.44			0.41			1.61			1.11

Basic earnings per Common Share		0.82			0.44			0.41			1.61			1.11

Weighted average number of shares outstanding (thousands of shares)
Common shares		735,804			735,804			735,804			735,804			735,804
Preferred Class A shares		415,714			415,713			415,713			415,713			415,713

See notes to condensed consolidated financial information.

F - 5

Condensed Consolidated Statements of Cash Flows
Expressed in millions of United States dollars (Unaudited)


										Nine months ended
	Three-month periods ended									September 30
	September			June 30,			September
	30, 2004			2004			30, 2003			2004			2003
Cash flows from operating activities:
Net income		943			504			468			1,852			1,278
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation, depletion and amortization		102			79			63			280			160
Dividends received		19			60			66			140			138
Equity in results of affiliates and joint ventures and change in provision for losses on equity investments		(127	)		(150	)		(89	)		(363	)		(218	)
Deferred income taxes		(61	)		23			41			(70	)		131
Gain on sale of investment		(314	)		—			—			(314	)		—
Impairment of property, plant and equipment		—			—			—			—			12
Change in accounting pratice for asset retirement obligations (Note 4)		—			—			—			—			10
Pension plan		3			3			3			9			8
Foreign exchange and monetary losses (gains)		(118	)		291			13			218			(386	)
Net unrealized derivative losses (gains)		36			(22	)		21			68			23
Minority interests		82			82			9			191			56
Interest payable, net		42			27			(6	)		55			10
Others		64			24			(14	)		67			(15	)
Decrease (increase) in assets:
Accounts receivable		—			(132	)		(24	)		(155	)		105
Inventories		(39	)		(67	)		(27	)		(121	)		(30	)
Others		(44	)		67			(1	)		(2	)		21
Increase (decrease) in liabilities:
Suppliers		26			(59	)		(2	)		(58	)		(67	)
Payroll and related charges		27			(18	)		(15	)		6			(8	)
Income Taxes		370			—			—			370			—
Others		96			(12	)		(71	)		231			25

Net cash provided by operating activities		1,107			700			435			2,404			1,253

Cash flows from investing activities:
Loans and advances receivable
Related parties
Additions		(6	)		(6	)		(15	)		(12	)		(92	)
Repayments		—			5			33			46			62
Others		(3	)		4			18			16			35
Guarantees and deposits		(48	)		(18	)		78			(90	)		(86	)
Additions to investments		(4	)		(6	)		(8	)		(19	)		(69	)
Additions to property, plant and equipment		(348	)		(416	)		(443	)		(1,145	)		(949	)
Proceeds from disposal of investments		415			—			21			415			58
Cash used to acquire subsidiaries, net of cash acquired		—			—			(426	)		—			(426	)

Net cash used in investing activities		6			(437	)		(742	)		(789	)		(1,467	)

Cash flows from financing activities:
Short-term debt, net issuances (repayments)		40			(44	)		(4	)		40			(37	)
Loans
Related parties
Additions		15			3			48			21			48
Repayments		(2	)		(1	)		(2	)		(9	)		(24	)
Issuances of long-term debt
Related parties		—			—			—			—			2
Others		43			227			779			935			996
Repayments of long-term debt
Related parties		(3	)		—			—			(3	)		(4	)
Others		(222	)		(201	)		(139	)		(893	)		(415	)
Interest attributed to stockholders		—			(269	)		(33	)		(269	)		(248	)

Net cash provided by (used in) financing activities		(129	)		(285	)		649			(178	)		318

Increase (decrease) in cash and cash equivalents		984			(22	)		342			1,437			104
Effect of exchange rate changes on cash and cash equivalents		(104	)		(2	)		(14	)		(109	)		99
Initial cash in new consolidated subsidiary		—			—			46			26			46
Cash and cash equivalents, beginning of period		1,059			1,083			966			585			1,091

Cash and cash equivalents, end of period		1,939			1,059			1,340			1,939			1,340

Cash paid during the period for:
Interest on short-term debt		—			—			—			(2	)		(7	)
Interest on long-term debt		(82	)		(51	)		(54	)		(213	)		(140	)
Income tax		—			—			(6	)		—			(39	)
Non-cash transactions
Conversion of loans receivable to investments		—			—			9			—			96

F - 6

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


										Nine months ended September
	Three-month periods ended									30
	September 30,			June			September 30,
	2004			30, 2004			2003			2004			2003
Preferred class A stock (including one special share)
Beginning of the period		1,176			1,055			1,055			1,055			904
Transfer from appropriated retained earnings		—			121			—			121			151

End of the period		1,176			1,176			1,055			1,176			1,055

Common stock
Beginning of the period		2,121			1,902			1,902			1,902			1,630
Transfer from appropriated retained earnings		—			219			—			219			272

End of the period		2,121			2,121			1,902			2,121			1,902

Treasury stock
Beginning and end of the period		(88	)		(88	)		(88	)		(88	)		(88	)

Additional paid-in capital
Beginning and end of the period		498			498			498			498			498

Other cumulative comprehensive loss
Cumulative translation adjustments
Beginning of the period		(4,757	)		(4,480	)		(4,406	)		(4,449	)		(5,185	)
Change in the period		461			(277	)		(67	)		153			712

End of the period		(4,296	)		(4,757	)		(4,473	)		(4,296	)		(4,473	)

Unrealized gain on available-for-sale securities
Beginning of the period		61			77			18			74			—
Change in the period		21			(16	)		(4	)		8			14

End of the period		82			61			14			82			14

Adjustments relating to investments in affiliates
Beginning and end of the period		—			—			10			—			10

Total other cumulative comprehensive loss		(4,214	)		(4,696	)		(4,449	)		(4,214	)		(4,449	)

Appropriated retained earnings
Beginning of the period		2,501			3,016			2,292			3,035			2,230
Transfer (to) from retained earnings		218			(175	)		(41	)		24			444
Transfer to capital stock		—			(340	)		—			(340	)		(423	)

End of the period		2,719			2,501			2,251			2,719			2,251

Retained earnings
Beginning of the period		3,667			3,119			3,281			2,857			3,288
Net income		943			504			468			1,852			1,278
Interest attributed to stockholders
Preferred class A stock		(45	)		(48	)		(115	)		(151	)		(235	)
Common stock		(79	)		(83	)		(203	)		(266	)		(415	)
Appropriation (to) from reserves		(218	)		175			41			(24	)		(444	)

End of the period		4,268			3,667			3,472			4,268			3,472

Total stockholders’ equity		6,480			5,179			4,641			6,480			4,641

Comprehensive income is comprised as follows:
Net income for the period		943			504			468			1,852			1,278
Cumulative translation adjustments		461			(277	)		(67	)		153			712
Unrealized gain (loss) on available-for-sale securities		21			(16	)		(4	)		8			14

Total comprehensive income		1,425			211			397			2,013			2,004

Shares
Preferred class A stock (including one special share)		415,727,739			415,727,739			415,727,739			415,727,739			415,727,739

Common stock		749,949,429			749,949,429			749,949,429			749,949,429			749,949,429

Treasury stock (1)
Beginning of the period		(14,158,059	)		(14,158,059	)		(14,158,707	)		(14,158,059	)		(14,158,953	)
Change in the period		582			—			648			582			894

End of the period		(14,157,477	)		(14,158,059	)		(14,158,059	)		(14,157,477	)		(14,158,059	)

		1,151,519,691			1,151,519,109			1,151,519,109			1,151,519,691			1,151,519,109

Interest attributed to stockholders (per share)
Preferred class A stock (including one special share)		0.11			0.11			0.28			0.36			0.56
Common stock		0.11			0.11			0.28			0.36			0.56

(1)

As of September 30, 2004, 14,145,510 common shares and 11,967 preferred shares were held in treasury in the amount of $88. The 14,145,510 common shares guarantee a loan of our subsidiary Alunorte.

See notes to condensed consolidated financial information.

F - 7

		Notes to the Condensed Consolidated Financial Information
		Expressed in millions of United States dollars, unless otherwise stated (Unaudited)

1		The Company and its operations

		Companhia Vale do Rio Doce (CVRD) is a limited liability company, duly organized and existing under the laws of the Federative Republic of Brazil. Our operations are carried out through CVRD and its subsidiary companies, joint ventures and affiliates, and mainly consist of mining, non-ferrous metal production and logistics, as well as energy, aluminum and steel activities. Further details of our operations and those of our joint ventures and affiliates are described in Note 8.

		The main operating subsidiaries we consolidate are as follows:


			Head office	Principal
Subsidiary	% ownership		location	activity
Alumina do Norte do Brasil S.A. - Alunorte		57	Brazil	Aluminum
Alumínio Brasileiro S.A. - Albras (8)		51	Brazil	Aluminum
CADAM S.A (CADAM) (2) (4)		37	Brazil	Kaolin
CELMAR S.A. - Indústria de Celulose e Papel (3)		100	Brazil	Forestry
CVRD Overseas Ltd.		100	Cayman Island	Trading
Ferrovia Centro-Atlântica S.A. (4)		100	Brazil	Logistics
Ferteco Mineração S.A. - FERTECO (3)		100	Brazil	Iron ore and Pellets
Itabira Rio Doce Company Ltd. - ITACO		100	Cayman Island	Trading
Mineração Serra do Sossego S.A. (5)		100	Brazil	Copper
Minerações Brasileiras Reunidas S.A. - MBR (4) (7)		56	Brazil	Iron ore
Navegação Vale do Rio Doce S.A. - DOCENAVE		100	Brazil	Shipping
Pará Pigmentos S.A.		76	Brazil	Kaolin
Rio Doce International Finance Ltd. - RDIF		100	Bahamas	International finance
Rio Doce Manganês S.A. (6)		100	Brazil	Manganese and Ferroalloys
Rio Doce Manganèse Europe - RDME		100	France	Ferroalloys
Rio Doce Manganese Norway - RDMN		100	Norway	Ferroalloys
Salobo Metais S.A. (1)		100	Brazil	Copper
Urucum Mineração S.A.		100	Brazil	Iron ore, Ferroalloys and
				Manganese

(1)		Development stage companies

(2)		Through Caemi Mineração e Metalurgia S.A. (CAEMI)

(3)		Merged with CVRD on August 29, 2003

(4)		Consolidated as from September 2003

(5)		Merged with CVRD on December 30, 2003

(6)		Formerly Sibra-Eletrosiderúrgica Brasileira S.A.

(7)		Through Caemi Mineração e Metalurgia S.A. and Belém Administrações e Participações Ltda.

(8)		Consolidated as from January 1, 2004 (See Note 4)

2		Basis of consolidation

		All majority-owned subsidiaries where we have both share and management control are consolidated, with elimination of all significant intercompany accounts and transactions. Additionally Alumínio Brasileiro S.A. – ALBRAS is consolidated as from January 1, 2004 under FIN 46R (note 4). Investments in unconsolidated affiliates and joint ventures are reported at cost plus our equity in undistributed earnings or losses. Included in this category are certain joint ventures in which we have majority ownership but, by force of shareholders’ agreements, do not have effective management control. We provide for losses on equity investments with negative stockholders’ equity where applicable (see Note 8).

		We evaluate the carrying value of our listed investments relative to publicly available quoted market prices. If the quoted market price is below book value, and such decline is considered

F - 8

		other than temporary, we write-down our equity investments to quoted market value.
		We define joint ventures as businesses in which we and a small group of other partners each participate actively in the overall entity management, based on a shareholders agreement. We define affiliates as businesses in which we participate as a minority stockholder but with significant influence over the operating and financial policies of the investee.

		Investments in unincorporated joint ventures, formed for the purpose of investing in electrical energy projects, are proportionately consolidated.

3		Summary of significant accounting policies

		Our condensed consolidated interim financial information for the three-month periods ended September 30, 2004 and 2003 and June 30, 2004 and for the nine month periods ended September 30, 2004 and 2003 is unaudited. However, in our opinion, such condensed consolidated financial information includes all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the results for interim periods. The results of operations for the nine month period ended September 30, 2004 are not necessarily indicative of the results to be expected for the full fiscal year ending December 31, 2004.

		In preparing the consolidated financial statements, we are required to use estimates to account for certain assets, liabilities, revenues and expenses. Our consolidated financial statements therefore include various estimates concerning the selection of useful lives of property, plant and equipment, provisions necessary for contingent liabilities, fair values assigned to assets and liabilities acquired in business combinations, income tax valuation allowances, employee post-retirement benefits and other similar evaluations, actual results may vary from our estimates.

		Exchange rates at September 30, 2004 and December 31, 2003 were R$2.8586: US$1.00 and R$2.8892: US$1.00, respectively.

4		Change in accounting practices

		In June 2001, the FASB issued SFAS 143 - “Accounting for Asset Retirement Obligations”. We adopted SFAS 143 as from January 1, 2003, and as a consequence an additional $26 for asset retirement obligations was recorded as “Others - long-term liabilities”, a net increase of $11 in mine development costs was registered within “Property, plant and equipment” and a resulting charge of $10 was registered as “Change in Accounting Practice for Asset Retirement Obligations” on the Statement of Income, net of income tax ($15 gross of deferred income tax). Over time the liabilities will be accreted for the change in their present value and initial capitalized costs will be amortized over the useful lives of the related assets.

		In December 2003, the FASB issued FIN 46R – “Consolidation of Variable Interest Entities, (revised December 2003)”. The primary objectives of FIN 46R are to provide guidance on the identification of entities for which control is achieved through means other than through voting rights (variable interest entities or VIEs) and how to determine when and which business enterprise should consolidate the VIE (the primary beneficiary). This new model for consolidation applies to an entity in which either (1) the equity investors (if any) do not have a controlling financial interest or (2) the equity investment at risk is insufficient to finance that entity’s activities without receiving additional subordinated financial support from other parties. In addition, FIN 46R requires that both the primary beneficiary and all other enterprises with a significant variable interest in a VIE make additional disclosures regarding the nature, purpose, size and activities of the VIE and the enterprise’s maximum exposure to loss as a result of its involvement with the VIE. Alumínio Brasileiro S.A – ALBRAS was identified as a VIE and was consolidated as from January 1, 2004.

5		Recently-issued accounting pronouncements

F - 9

		Emerging Issue Task Force No. 04-03 (EITF 04-03), Mining assets: Impairment and Business Combinations and No. 03-01 (EITF 03-01), The Meaning of Other – Than – Temporary Impairment and its Application to Certain Investments were issued in March, 2004.

		The Company does not expect any significant impacts on its financial statements arising from these new pronouncements.

6		Income taxes

		Income taxes in Brazil comprise federal income tax and social contribution, which is an additional federal tax. The statutory composite enacted tax rate applicable in the periods presented is 34% represented by a 25% federal income tax rate plus a 9% social contribution rate.

		The amount reported as income tax expense in our consolidated financial statements is reconciled to the statutory rates as follows:


										Nine months ended
	Three-month periods ended									September 30
	September			June 30,			September
	30, 2004			2004			30, 2003			2004			2003
Income before income taxes, equity results and minority interests		1,122			500			388			2,033			1,357

Federal income tax and social contribution expense at statutory enacted rates		(381	)		(171	)		(132	)		(691	)		(461	)
Adjustments to derive effective tax rate:
Tax benefit on interest attributed to stockholders		50			44			107			149			229
Exempt foreign income (expenses)		143			21			9			178			(33	)
Difference on tax basis of equity investees		(75	)		(16	)		—			(105	)		—
Tax incentives		32			3			8			44			48
Valuation allowance reversal		19			52			4			71			13
Other non-taxable gains (losses)		(12	)		3			4			1			(27	)

Federal income tax and social contribution expense in consolidated statements of income		(224	)		(64	)		—			(353	)		(231	)

		We have certain tax incentives relative to our iron ore and manganese operations in Carajás and relative to alumina in Barcarena. The incentives relative to iron ore and manganese comprise full income tax exemption on defined production levels up to 2005 and partial exemption up to 2013. Both incentives relative to alumina expire in 2010. An amount equal to the tax saving must be appropriated to a reserve account within stockholders’ equity and may not be distributed in the form of cash dividends.

7		Inventories


	September 30,		December 31,
	2004		2003
Finished products
Iron ore and pellets		170		146
Manganese and ferroalloys		126		78
Alumina		18		20
Aluminum		53		—
Copper		7		—
Kaolin		16		16
Others		5		8
Spare parts and maintenance supplies		306		237

		701		505

F - 10

Investments in affiliated companies and joint ventures


	September 30, 2004
							Net income
	Participation in				Net		(loss) for the
	capital (%)				equity		period
	voting		total
Steel
Usinas Siderúrgicas de Minas Gerais S.A. - USIMINAS		22.99		11.46		634		453
Companhia Siderúrgica de Tubarão - CST (1)		20.51		7.91		742		393
California Steel Industries Inc. - CSI		50.00		50.00		264		74
SIDERAR (costs $15) - available for sale investments		4.85		4.85		—		—
Aluminum and bauxite
Mineração Rio do Norte S.A. - MRN		40.00		40.00		419		102
Valesul Alumínio S.A. - VALESUL		54.51		54.51		94		19
Alumínio Brasileiro S.A. - ALBRAS (5)		—		—		—		—
Alumínio Brasileiro S.A. - ALBRAS - change in provision for losses (5)
Ferrous
Caemi Mineração e Metalurgia S.A. (3)		—		—		—		—
Companhia Nipo-Brasileira de Pelotização - NIBRASCO		51.11		51.00		50		19
Companhia Hispano-Brasileira de Pelotização - HISPANOBRÁS		51.00		50.89		43		12
Companhia Coreano-Brasileira de Pelotização - KOBRASCO		50.00		50.00		15		13
Companhia Coreano-Brasileira de Pelotização - KOBRASCO - change in provision for losses
Companhia Ítalo-Brasileira de Pelotização - ITABRASCO		51.00		50.90		30		9
Gulf Industrial Investment Company - GIIC		50.00		50.00		86		20
SAMARCO Mineração S.A. - SAMARCO (4)		50.00		50.00		394		159
Minas da Serra Geral S.A. - MSG		50.00		50.00		35		(4	)
Others		—		—		—		—
Logistics
Ferrovia Centro-Atlântica S.A. - FCA - change in provision for losses (3)		—		—		—		—
MRS Logística S.A		—		—		—		—
MRS Logística S.A. - change in provision for losses		—		—		—		—
Others, mainly investments sold in 2003		—		—		—		—
Other affiliates and joint ventures
Fertilizantes Fosfatados S.A. - FOSFERTIL (2)		—		—		—		—
Others		—		—		—		—
Total

[Additional columns below]

[Continued from above table, first column(s) repeated]


	Investments				Equity Adjustments
														Nine months ended
					Three-month periods ended									September 30
	September		December		September			June 30,			September
	30, 2004		31, 2003		30, 2004			2004			30, 2003			2004			2003
Steel
Usinas Siderúrgicas de Minas Gerais S.A. - USIMINAS		73		31		18			16			14			52			34
Companhia Siderúrgica de Tubarão - CST (1)		59		86		9			61			14			87			26
California Steel Industries Inc. - CSI		132		103		23			15			(2	)		37			1
SIDERAR (costs $15) - available for sale investments		102		89		—			—			—			—			—

		366		309		50			92			26			176			61
Aluminum and bauxite
Mineração Rio do Norte S.A. - MRN		168		168		16			14			11			41			21
Valesul Alumínio S.A. - VALESUL		51		49		4			4			2			11			7
Alumínio Brasileiro S.A. - ALBRAS (5)		—		112		—			—			14			—			93
Alumínio Brasileiro S.A. - ALBRAS - change in provision for losses (5)		—		—		—			—			—			—			1

		219		329		20			18			27			52			122
Ferrous
Caemi Mineração e Metalurgia S.A. (3)		—		—		—			—			3			—			15
Companhia Nipo-Brasileira de Pelotização - NIBRASCO		26		18		3			5			3			10			3
Companhia Hispano-Brasileira de Pelotização - HISPANOBRÁS		22		17		2			3			1			6			4
Companhia Coreano-Brasileira de Pelotização - KOBRASCO		7		1		4			1			—			6			—
Companhia Coreano-Brasileira de Pelotização - KOBRASCO - change in provision for losses		—		—		—			—			1			—			10
Companhia Ítalo-Brasileira de Pelotização - ITABRASCO		15		11		1			3			1			5			2
Gulf Industrial Investment Company - GIIC		43		40		4			2			3			10			9
SAMARCO Mineração S.A. - SAMARCO (4)		235		221		35			20			17			80			59
Minas da Serra Geral S.A. - MSG		17		15		—			(2	)		1			(2	)		3
Others		22		21		1			—			5			—			7

		387		344		50			32			35			115			112
Logistics
Ferrovia Centro-Atlântica S.A. - FCA - change in provision for losses (3)		—		—		—			—			(9	)		—			(93	)
MRS Logística S.A		63		39		8			8			—			22			—
MRS Logística S.A. - change in provision for losses		—		—		—			—			4			—			8
Others, mainly investments sold in 2003		7		5		—			—			1			—			(2	)

		70		44		8			8			(4	)		22			(87	)
Other affiliates and joint ventures
Fertilizantes Fosfatados S.A. - FOSFERTIL (2)		—		—		—			—			5			—			10
Others		11		8		(1	)		—			—			(2	)

		11		8		(1	)		—			5			(2	)		10

Total		1,053		1,034		127			150			89			363			218

[Additional columns below]

[Continued from above table, first column(s) repeated]


	Dividends received
							Nine months ended				Quoted
	Three-month periods ended						September 30				market
	September		June 30,		September						September
	30, 2004		2004		30, 2003		2004		2003		30, 2004
Steel
Usinas Siderúrgicas de Minas Gerais S.A. - USIMINAS		—		—		3		13		3		334
Companhia Siderúrgica de Tubarão - CST (1)		—		—		30		—		35		176
California Steel Industries Inc. - CSI		—		2		2		2		5		—
SIDERAR (costs $15) - available for sale investments		—		—		—		—		—		102

		—		2		35		15		43		612
Aluminum and bauxite
Mineração Rio do Norte S.A. - MRN		—		20		11		41		16		—
Valesul Alumínio S.A. - VALESUL		—		7		—		9		3		—
Alumínio Brasileiro S.A. - ALBRAS (5)		—		—		—		—		—		—
Alumínio Brasileiro S.A. - ALBRAS - change in provision for losses (5)		—		—		—		—		—		—

		—		27		11		50		19		-
Ferrous
Caemi Mineração e Metalurgia S.A. (3)		—		—		—		—		—		—
Companhia Nipo-Brasileira de Pelotização - NIBRASCO		—		—		—		—		—		—
Companhia Hispano-Brasileira de Pelotização - HISPANOBRÁS		—		—		—		—		2		—
Companhia Coreano-Brasileira de Pelotização - KOBRASCO		—		—		—		—		—		—
Companhia Coreano-Brasileira de Pelotização - KOBRASCO - change in provision for losses		—		—		—		—		—		—
Companhia Ítalo-Brasileira de Pelotização - ITABRASCO		—		—		—		—		1		—
Gulf Industrial Investment Company - GIIC		—		1		4		7		9		—
SAMARCO Mineração S.A. - SAMARCO (4)		19		30		14		68		53		—
Minas da Serra Geral S.A. - MSG		—		—		—		—		1		—
Others		—		—		—		—		—		—

		19		31		18		75		66		-
Logistics
Ferrovia Centro-Atlântica S.A. - FCA - change in provision for losses (3)		—		—		—		—		—		—
MRS Logística S.A		—		—		—		—		—		—
MRS Logística S.A. - change in provision for losses		—		—		—		—		—		—
Others, mainly investments sold in 2003		—		—		—		—

Other affiliates and joint ventures		—		—		—		—		—		—
Fertilizantes Fosfatados S.A. - FOSFERTIL (2)		—		—		2		—		9		—
Others		—		—		—		—		1		—

		—		—		2		—		10		-

Total		19		60		66		140		138		612

(1)		During the quarter ended September 30, 2003 CVRD acquired an additional 4.42% of the voting shares and 5.64% of the preferred shares, representing 5.17% of CST’s total capital for $60. On July 30,2004 we sold 4.42% of the voting shares and 20.11% of the preferred shares;

(2)		Investment sold in 2003;

(3)		Consolidated as from September, 2003, after acquisition of control;

(4)		Investment includes goodwill of $38 in 2004 and $ 37 in 2003;

(5)		Albras was consolidated as from January 1, 2004.

F - 11

9		Stockholders’ equity

		On August 18, 2004 the Extraordinary General Shareholders´ Meeting approved the forward stock split. Each existing share, common and preferred, was split into three shares.

		After the split the Company’s capital comprises 1,165,677,168 shares, of which 749,949,429 common shares 415,727,739 class “A” preferred shares, including three special class shares without par value (“Golden Share”). The share/ADR proportion will be maintained at 1/1; therefore, each common and preferred share, will continue to be represented by one ADR supported by one common share (NYSE: RIO) or by one ADR supported by one class “A” preferred share (NYSE: RIOPR) respectively.

		For comparative purposes we considered the effects of the split as it had occurred consistently in all periods presented.

10		Pension plans


										Nine months ended
	Three-Month period ended									September 30
	September			June 30,			September
	30, 2004			2004			30, 2003			2004			2003
Service cost - benefits earned during the period		1			—			—			2			1
Interest cost on projected benefit obligation		42			36			37			116			104
Actual return on assets		(42	)		(32	)		(38	)		(118	)		(106	)
Amortization of initial transitory obligation		3			2			3			7			7
Net deferral		(1	)		(3	)		1			2			2

Net periodic pension cost		3			3			3			9			8

		Employer contributions

		We previously disclosed in our consolidated financial statements for the year ended December 31, 2003, that we expected to contribute $14 to our pension plan in 2004. As of September 30, 2004, $11 of contributions have been made. We do not expect any change in our previous estimate.

11		Commitments and contingencies

(a)		At September 30, 2004, we had extended guarantees for borrowings obtained by affiliates and joint ventures in the amount of $7, of which $6 is denominated in United States dollars and the remaining $1 in local currency, as follows:

Amount of

Denominated

Final

Counter

Affiliate or Joint Venture

guarantee

currency

Purpose

maturity

guarantees

SAMARCO

US$

Debt guarantee

2008

None

VALESUL

Debt guarantee

2007

None

		We expect no losses to arise as a result of the above guarantees. We charge commission for extending these guarantees in the case of Samarco.

		We have not provided any significant guarantees since January 1, 2003 which would require fair value adjustments under FIN 45 – “Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others”.

F - 12

(b)		CVRD and its subsidiaries are defendants in numerous legal actions in the normal course of business. Based on the advice of our legal counsel, management believes that the provision made against contingent losses is sufficient to cover probable losses in connection with such actions.

		The provision for contingencies and the related judicial deposits are composed as follows:


	September 30, 2004				December 31, 2003
	Provision for		Judicial		Provision for		Judicial
	contingencies		deposits		contingencies		deposits
Labor claims		192		89		177		66
Civil claims		162		64		167		54
Tax — related actions		427		315		285		279
Others		7		4		6		8

		788		472		635		407

		Labor — related actions principally comprise employee claims for (i) payment of time spent traveling from their residences to the work-place, (ii) additional payments for alleged dangerous or unhealthy working conditions and (iii) various other matters, often in connection with disputes about the amount of indemnities paid upon dismissal.

		Civil actions principally relate to claims made against us by contractors in connection with losses alleged to have been incurred by them as a result of various past government economic plans during which full indexation of contracts for inflation was not permitted.

		Tax — related actions principally comprise our challenges of certain revenue taxes, VAT and of the tax on financial movements – CPMF.

		We continue to vigorously pursue our interests in all the above actions but recognize that probably we will incur some losses in the final instance, for which we have made provisions.

		Our judicial deposits are made as required by the courts for us to be able to enter or continue a legal action. When judgment is favorable to us, we receive the deposits back; when unfavorable, the deposits are delivered to the prevailing party.

		Contingencies settled in the nine-month period ended September 30, 2004 and 2003, three-month period ended September 30, 2004, and 2003 and June 30, 2004 aggregated $39, $191, $2, $138 and $14, respectively, and additional provisions aggregated $63, $114, $11, $66 and $13, respectively.

		In addition to the contingencies for which we have made provisions we have possible losses in connection with tax contingencies totaling $320 at September 30, 2004, for which no provision is maintained.

(c)		We are defendants in two actions seeking substantial compensatory damages brought by the Municipality of Itabira, State of Minas Gerais, which we believe are without merit. Due to the remote likelihood that any loss will arise there from no provision has been made in the financial statements with respect to these two actions.

(d)		We are committed under a take-or-pay agreement to purchase approximately 42,391 thousand metric tons of bauxite from Mineração Rio do Norte S.A. - MRN at a formula price, calculated based on the current London Metal Exchange (LME) quotation for aluminum. Based on a market price of US$20.45 per metric ton as of September 30, 2004, it represents the following total commitment:

F- 13


2004 as from July			14,210
2005			56,840
2006			56,840
2007			56,840
2008			56,840
2009 and thereafter			625,326

			866,896

(e)		We and BNDES entered into a contract, known as the Mineral Risk Contract, in March 1997, relating to prospecting authorizations for mining regions where drilling and exploration are still in their early stages. The Mineral Risk Contract provides for the joint development of certain unexplored mineral deposits in approximately two million identified hectares of land in the Carajás region, as well as proportional participation in any financial benefits earned from the development of such resources. Iron ore and manganese deposits already identified and subject to development are specifically excluded from the Mineral Risk Contract.

		Pursuant to the Mineral Risk Contract, we and BNDES each agreed to provide $205, which represents half of the $410 in expenditures estimated as necessary to complete geological exploration and mineral resource development projects in the region through to April 28, 2009. We will oversee these projects and BNDES will advance us half of our costs on a quarterly basis. Under the Mineral Risk Contract, as of September 30, 2004, the remaining contributions towards exploration and development activities totaled $68. In the event that either of us wishes to conduct further exploration and development after having spent such $205, the contract provides that each party may either choose to match the other party’s contributions, or may choose to have its financial interest proportionally diluted. If a party’s participation in the project is diluted to an amount lower than 40% of the amount invested in connection with exploration and development projects, then the Mineral Risk Contract provides that the diluted party will lose all the rights and benefits provided for in the Mineral Risk Contract and any amounts previously contributed to the project.

		Under the Mineral Risk Contract, BNDES has agreed to compensate us through a finder’s fee production royalty on their share of mineral resources that are discovered and placed into production. This finder’s fee is equal to 3.5% of the revenues derived from the sale of gold, silver and platinum group metals and 1.5% of the revenues derived from the sale of other minerals, including copper, except for gold and other minerals discovered at Serra Leste, for which the finder’s fee is equal to 6.5% of revenues.

(f)		At the time of our privatization in 1997, we issued shareholder revenue interests known in Brazil as “debentures” to our then-existing shareholders, including the Brazilian Government. The terms of the “debentures”, were set to ensure that our pre-privatization shareholders, including the Brazilian Government, would participate alongside us in potential future financial benefits that we are able to derive from exploiting our mineral resources. On March 26, 2004 as a result of exploiting our mineral resources we declared a distribution on these “debentures” in the amount of $2, payable as from April 1, 2004. There is no significant difference between the book value and quoted market price of these debentures.

(g)		We use various judgments and assumptions when measuring our environmental liabilities and asset retirement obligations. Changes in circumstances, law or technology may affect our estimates and we periodically review the amounts accrued and adjust them as necessary. Our accruals do not reflect unasserted claims because we are currently not aware of any such issues. Also the amounts provided are not reduced by any potential recoveries under cost sharing, insurance or indemnification arrangements because such recoveries are considered uncertain. The changes are demonstrated as follows:

F- 14


Balance as of April 01, 2004	82
Accretion expense	4
Cumulative translation adjustment	(4	)

Balance as of June 30, 2004	82

Accretion expense	3
Cumulative translation adjustment	6

Balance as of September 30, 2004	91

Balance as of January 01, 2004	81
Accretion expense	9
Cumulative translation adjustment	1

Balance as of September 30, 2004	91

12		Segment and geographical information

		In 1999 we adopted SFAS 131 “Disclosures about Segments of an Enterprise and Related Information” with respect to the information we present about our operating segments. SFAS 131 introduced a “management approach” concept for reporting segment information, whereby such information is required to be reported on the basis that the chief decision-maker uses internally for evaluating segment performance and deciding how to allocate resources to segments. Our business segments are currently organized as follows:

		Ferrous products — comprises iron ore mining and pellet production, as well as the Northern and Southern transportation systems, including railroads, ports and terminals, as they pertain to mining operations. Manganese mining and ferroalloys are also included in this segment.

		Non-ferrous products – comprises the production of kaolin, potash and copper.

		Logistics – comprises our transportation systems as they pertain to the operation of our ships, ports and railroads for third-party cargos.

		Holdings – divided into the following sub-groups:

•		Aluminum — comprises aluminum trading activities, alumina refining, aluminum metal smelting and investments in joint ventures and affiliates engaged in bauxite mining.

•		Others — comprises our investments in joint ventures and affiliates engaged in other businesses.

		Information presented to top management with respect to the performance of each segment is generally derived directly from the accounting records maintained in accordance with accounting practices generally accepted in Brazil together with certain minor inter-segment allocations.

F- 15

Consolidated net income and principal assets are reconciled as follows:

Results by segment - before eliminations (Unaudited)


	As of and for the three-month periods ended
	September 30, 2004
										Holdings
				Non						(1)
	Ferrous			ferrous			Logistics			Aluminum			Others			Eliminations			Consolidated
Gross revenues - Export		2,041			150			24			419			—			(968	)		1,666
Gross revenues - Domestic		376			55			234			53			—			(97	)		621
Cost and expenses		(1,711	)		(172	)		(158	)		(320	)		—			1,065			(1,296	)
Depreciation, depletion and amortization		(72	)		(12	)		(9	)		(9	)		—			—			(102	)
Pension plan		(3	)		—			—			—			—			—			(3	)

Operating income (loss)		631			21			91			143			—			—			886
Financial income		39			—			5			6			—			(40	)		10
Financial expenses		(150	)		—			(4	)		(52	)		1			40			(165	)
Foreign exchange and monetary gains (losses), net		22			3			6			46			—			—			77
Gain on sale of investments		—			—			—			—			314			—			314
Equity in results of affiliates and joint ventures and change in provision for losses on equity investments		50			—			8			20			49			—			127
Income taxes		(197	)		—			(3	)		(23	)		(1	)		—			(224	)
Minority interests		(39	)		(2	)		—			(41	)		—			—			(82	)

Net income		356			22			103			99			363			—			943

Sales classified by geographic destination:
Export market
America, except United States		198			—			13			29			—			(102	)		138
United States		132			—			9			64			—			(87	)		118
Europe		871			80			2			205			—			(459	)		699
Middle East/Africa/Oceania		132			63			—			—			—			(48	)		147
Japan		164			2			—			81			—			(47	)		200
China		401			—			—			40			—			(164	)		277
Asia, other than Japan and China		143			5			—			—			—			(61	)		87

		2,041			150			24			419			—			(968	)		1,666
Domestic market		376			55			234			53			—			(97	)		621

		2,417			205			258			472			—			(1,065	)		2,287

Assets:
Property, plant and equipment, net		5,050			1,147			577			952			1			—			7,727
Additions to Property, plant and equipment		131			40			114			63			—			—			348
Investments in affiliated companies and joint ventures and other investments, net of provision for losses		387			—			70			219			377			—			1,053

Capital employed		4,557			913			565			819			31			—			6,885

[Additional columns below]

[Continued from above table, first column(s) repeated]


	As of and for the three-month periods ended
	June 30, 2004
										Holdings
				Non						(1)
	Ferrous			ferrous			Logistics			Aluminum			Others			Eliminations			Consolidated
Gross revenues - Export		1,875			81			22			398			—			(923	)		1,453
Gross revenues - Domestic		364			35			219			47			—			(85	)		580
Cost and expenses		(1,588	)		(89	)		(142	)		(308	)		—			1,008			(1,119	)
Depreciation, depletion and amortization		(57	)		(6	)		(8	)		(8	)		—			—			(79	)
Pension plan		(3	)		—			—			—			—			—			(3	)

Operating income (loss)		591			21			91			129			—			—			832
Financial income		63			—			2			20			1			(67	)		19
Financial expenses		(139	)		(2	)		(5	)		(26	)		(1	)		67			(106	)
Foreign exchange and monetary gains (losses), net		(202	)		(2	)		(1	)		(42	)		2			—			(245	)
Gain on sale of investments		—			—			—			—			—			—			—
Equity in results of affiliates and joint ventures and change in provision for losses on equity investments		32			—			8			18			92			—			150
Income taxes		(87	)		(4	)		(1	)		31			(3	)		—			(64	)
Minority interests		(31	)		1			—			(52	)		—			—			(82	)

Net income		227			14			94			78			91			—			504

Sales classified by geographic destination:
Export market
America, except United States		172			—			18			41			—			(98	)		133
United States		121			—			—			7			—			(70	)		58
Europe		857			68			4			212			—			(435	)		706
Middle East/Africa/Oceania		87			1			—			—			—			(19	)		69
Japan		187			4			—			105			—			(99	)		197
China		300			5			—			33			—			(135	)		203
Asia, other than Japan and China		151			3			—			—			—			(67	)		87

		1,875			81			22			398			—			(923	)		1,453
Domestic market		364			35			219			47			—			(85	)		580

		2,239			116			241			445			—			(1,008	)		2,033

Assets:
Property, plant and equipment, net		4,542			1,020			483			826			1			—			6,872
Additions to Property, plant and equipment		165			62			153			35			1			—			416
Investments in affiliated companies and joint ventures and other investments, net of provision for losses		330			—			56			195			385			—			966

Capital employed		4,307			679			449			816			26			—			6,277

[Additional columns below]

[Continued from above table, first column(s) repeated]


	As of and for the three-month periods ended
	September 30, 2003
				Non						Holdings
	Ferrous			ferrous			Logistics			Aluminum			Others			Eliminations			Consolidated
Gross revenues — Export		1,411			28			14			218			—			(651	)		1,020
Gross revenues — Domestic		309			31			130			46			—			(53	)		463
Cost and expenses		(1,282	)		(38	)		(91	)		(210	)		1			704			(916	)
Depreciation, depletion and amortization		(50	)		(6	)		(3	)		(4	)		—			—			(63	)
Pension plan		(3	)		—			—			—			—			—			(3	)

Operating income (loss)		385			15			50			50			1			—			501
Financial income		49			1			3			2			1			(29	)		27
Financial expenses		(89	)		(2	)		(2	)		(18	)		(1	)		29			(83	)
Foreign exchange and monetary gains (losses), net		(48	)		(4	)		3			(8	)		—			—			(57	)
Gain on sale of investments		—			—			—			—			—			—			—
Equity in results of affiliates and joint ventures and change in provision for losses on equity investments		35			—			(4	)		27			31			—			89
Income taxes		(1	)		—			(1	)		(1	)		3			—			—
Minority interests		(3	)		—			—			(6	)		—			—			(9	)

Net income		328			10			49			46			35			—			468

Sales classified by geographic destination:
Export market
America, except United States		142			—			10			44			—			(87	)		109
United States		91			2			—			6			—			(46	)		53
Europe		532			19			4			96			—			(236	)		415
Middle East/Africa/Oceania		85			—			—			—			—			(20	)		65
Japan		162			6			—			26			—			(79	)		115
China		275			1			—			46			—			(132	)		190
Asia, other than Japan and China		124			—			—			—			—			(51	)		73

		1,411			28			14			218			—			(651	)		1,020
Domestic market		309			31			130			46			—			(53	)		463

		1,720			59			144			264			—			(704	)		1,483

Assets:
Property, plant and equipment, net		4,024			858			439			529			38			—			5,888
Additions to Property, plant and equipment		235			170			16			22			—			—			443
Investments in affiliated companies and joint ventures and other investments, net of provision for losses		338			—			7			320			325			—			990

Capital employed		3,818			246			473			477			26			—			5,040

(1)

Albras was consolidated as from January 1, 2004 and generated contribution to net revenues and operating income of $39 and $70 in the three-month periods ended September 30, 2004 (June 30, 2004, $61 and $74, respectively).

F-16

Operating income by product — after eliminations (Unaudited)


	For the three-month periods ended
	September 30, 2004
																			Impairment/
																			Gain on sale
	Revenues							Value											of property,		Depreciation,
								added			Net		Cost and						plant and		depletion and			Operating
	Export		Domestic			Total		tax			revenues		expenses			Net			equipment		amortization			income
Ferrous
Iron ore		880		213			1,093		(34	)		1,059		(463	)		596			—		(67	)		529
Pellets		229		64			293		(12	)		281		(239	)		42			—		(2	)		40
Manganese		16		4			20		(2	)		18		(17	)		1			—		—			1
Ferroalloys		113		60			173		(15	)		158		(43	)		115			—		(3	)		112

		1,238		341			1,579		(63	)		1,516		(762	)		754			—		(72	)		682
Non ferrous
Gold		—		—			—		—			—		—			—			—		—			—
Potash		—		35			35		(5	)		30		(16	)		14			—		(1	)		13
Kaolin		36		5			41		(1	)		40		(23	)		17			—		(4	)		13
Copper		56		14			70		(3	)		67		(40	)		27			—		(7	)		20

		92		54			146		(9	)		137		(79	)		58			—		(12	)		46
Aluminum
Alumina		127		3			130		(4	)		126		(102	)		24			—		(5	)		19
Aluminum		172		8			180		(1	)		179		(54	)		125			—		(4	)		121
Bauxite		17		—			17		—			17		(14	)		3			—		—			3

		316		11			327		(5	)		322		(170	)		152			—		(9	)		143
Logistics
Railroads		—		164			164		(27	)		137		(88	)		49			—		(9	)		40
Ports		—		43			43		(8	)		35		(20	)		15			—		(1	)		14
Ships		16		9			25		(2	)		23		(25	)		(2	)		—		1			(1	)

		16		216			232		(37	)		195		(133	)		62			—		(9	)		53
Others		4		(1	)		3		—			3		(41	)		(38	)		—		—			(38	)

		1,666		621			2,287		(114	)		2,173		(1,185	)		988			—		(102	)		886

[Additional columns below]

[Continued from above table, first column(s) repeated]


	For the three-month periods ended
	June 30, 2004
																		Impairment/
																		Gain on sale
	Revenues						Value											of property,		Depreciation,
							added			Net		Cost and						plant and		depletion and			Operating
	Export		Domestic		Total		tax			revenues		expenses			Net			equipment		amortization			income
Ferrous
Iron ore		732		211		943		(38	)		905		(394	)		511			—		(55	)		456
Pellets		251		68		319		(11	)		308		(207	)		101			—		—			101
Manganese		8		3		11		(2	)		9		(7	)		2			—		—			2
Ferroalloys		103		50		153		(13	)		140		(72	)		68			—		(3	)		65

		1,094		332		1,426		(64	)		1,362		(680	)		682			—		(58	)		624
Non ferrous
Gold		—		—		—		—			—		—			—			—		—			—
Potash		—		31		31		(6	)		25		(13	)		12			—		(1	)		11
Kaolin		34		5		39		(1	)		38		(21	)		17			—		(4	)		13
Copper		24		—		24		—			24		(4	)		20			—		(2	)		18

		58		36		94		(7	)		87		(38	)		49			—		(7	)		42
Aluminum
Alumina		83		—		83		(4	)		79		(66	)		13			—		(5	)		8
Aluminum		197		1		198		(1	)		197		(67	)		130			—		(3	)		127
Bauxite		8		—		8		—			8		(8	)		—			—		—			—

		288		1		289		(5	)		284		(141	)		143			—		(8	)		135
Logistics
Railroads		—		153		153		(25	)		128		(81	)		47			—		(4	)		43
Ports		—		45		45		(3	)		42		(21	)		21			—		(1	)		20
Ships		10		12		22		(7	)		15		(25	)		(10	)		—		(1	)		(11	)

		10		210		220		(35	)		185		(127	)		58			—		(6	)		52
Others		3		1		4		(2	)		2		(23	)		(21	)		—		—			(21	)

		1,453		580		2,033		(113	)		1,920		(1,009	)		911			—		(79	)		832

[Additional columns below]

[Continued from above table, first column(s) repeated]


	For the three-month periods ended
	September 30, 2003
																		Impairment/
																		Gain on sale
	Revenues						Value											of property,		Depreciation,
							added			Net		Cost and						plant and		depletion and			Operating
	Export		Domestic		Total		tax			revenues		expenses			Net			equipment		amortization			income
Ferrous
Iron ore		554		147		701		(16	)		685		(344	)		341			—		(31	)		310
Pellets		159		58		217		(7	)		210		(151	)		59			—		(2	)		57
Manganese		7		4		11		(1	)		10		(14	)		(4	)		—		—			(4	)
Ferroalloys		46		24		70		(6	)		64		(46	)		18			—		(3	)		15

		766		233		999		(30	)		969		(555	)		414			—		(36	)		378
Non ferrous
Gold		5		—		5		—			5		13			18			—		—			18
Potash		—		28		28		(4	)		24		(12	)		12			—		(1	)		11
Kaolin		21		4		25		—			25		(24	)		1			—		(3	)		(2	)
Copper		—		—		—		—			—		—			—			—		—			—

		26		32		58		(4	)		54		(23	)		31			—		(4	)		27
Aluminum
Alumina		107		42		149		(3	)		146		(99	)		47			—		(4	)		43
Aluminum		77		4		81		—			81		(73	)		8			—		—			8
Bauxite		12		1		13		—			13		(11	)		2			—		—			2

		196		47		243		(3	)		240		(183	)		57			—		(4	)		53
Logistics
Railroads		—		101		101		(10	)		91		(35	)		56			—		(17	)		39
Ports		1		39		40		(3	)		37		(19	)		18			—		(2	)		16
Ships		10		8		18		(1	)		17		(28	)		(11	)		—		—			(11	)

		11		148		159		(14	)		145		(82	)		63			—		(19	)		44
Others		21		3		24		—			24		(25	)		(1	)		—		—			(1	)

		1,020		463		1,483		(51	)		1,432		(868	)		564			—		(63	)		501

F-17

Results by segment — before eliminations (Unaudited)


	Nine-month periods ended September 30
	2004
										Holdings
				Non
	Ferrous			ferrous			Logistics			Aluminum			Others			Eliminations			Consolidated
Gross revenues — Export		5,478			265			65			1,180			—			(2,626	)		4,362
Gross revenues — Domestic		1,027			118			637			159			—			(252	)		1,689
Cost and expenses		(4,665	)		(314	)		(428	)		(932	)		—			2,878			(3,461	)
Depreciation, depletion and amortization		(207	)		(24	)		(24	)		(25	)		—			—			(280	)
Pension plan		(9	)		—			—			—			—			—			(9	)

Operating (loss) income		1,624			45			250			382			—			—			2,301
Financial income		146			—			11			9			2			(127	)		41
Financial expenses		(405	)		(3	)		(13	)		(119	)		—			127			(413	)
Foreign exchange and monetary gains (losses), net		(212	)		1			—			(2	)		3			—			(210	)
Gain on sale of investments		—			—			—			—			314			—			314
Equity in results of affiliates and joint ventures and change in provision for losses on equity investments		115			—			22			52			174			—			363
Income taxes		(338	)		(4	)		(6	)		(1	)		(4	)		—			(353	)
Minority interests		(84	)		(2	)		—			(105	)		—			—			(191	)

Income from continuing operations		846			37			264			216			489			—			1,852
Change in accounting pratice for asset retirement obligations (note 4)		—			—			—			—			—			—			—

Net income		846			37			264			216			489			—			1,852

Sales classified by geographic destination:
Export market
America, except United States		528			—			46			140			—			(303	)		411
United States		360			—			9			109			—			(223	)		255
Europe		2,387			170			10			566			—			(1,206	)		1,927
Middle East/Africa/Oceania		308			64			—			—			—			(93	)		279
Japan		501			14			—			266			—			(213	)		568
China		939			9			—			99			—			(396	)		651
Asia, other than Japan and China		455			8			—			—			—			(192	)		271

		5,478			265			65			1,180			—			(2,626	)		4,362
Domestic market		1,027			118			637			159			—			(252	)		1,689

		6,505			383			702			1,339			—			(2,878	)		6,051

Assets:
Property, plant and equipment, net		5,050			1,147			577			952			1			—			7,727
Additions to Property, plant and equipment		453			173			399			120			—			—			1,145
Investments in affiliated companies and joint ventures and other investments, net of provision for losses		387			—			70			219			377			—			1,053

Capital employed		4,557			913			565			819			31			—			6,885

[Additional columns below]

[Continued from above table, first column(s) repeated]


	Nine-month periods ended September 30
	2003
										Holdings
				Non
	Ferrous			ferrous			Logistics			Aluminum			Others			Eliminations			Consolidated
Gross revenues — Export		3,606			69			53			525			—			(1,622	)		2,631
Gross revenues — Domestic		846			77			316			124			—			(139	)		1,224
Cost and expenses		(3,322	)		(116	)		(220	)		(544	)		6			1,761			(2,435	)
Depreciation, depletion and amortization		(131	)		(11	)		(8	)		(10	)		—			—			(160	)
Pension plan		(8	)		—			—			—			—			—			(8	)

Operating (loss) income		991			19			141			95			6			—			1,252
Financial income		145			1			11			8			4			(85	)		84
Financial expenses		(270	)		(4	)		(5	)		(30	)		(5	)		85			(229	)
Foreign exchange and monetary gains (losses), net		162			15			(12	)		87			(2	)		—			250
Gain on sale of investments		—			—			—			—			—			—			—
Equity in results of affiliates and joint ventures and change in provision for losses on equity investments		110			—			(85	)		122			71			—			218
Income taxes		(206	)		—			(1	)		(27	)		3			—			(231	)
Minority interests		(5	)		(4	)		—			(47	)		—			—			(56	)

Income from continuing operations		927			27			49			208			77			—			1,288
Change in accounting pratice for asset retirement obligations (note 4)		(10	)		—			—			—			—			—			(10	)

Net income		917			27			49			208			77			—			1,278

Sales classified by geographic destination:
Export market
America, except United States		379			—			28			111			—			(243	)		275
United States		262			8			—			25			—			(143	)		152
Europe		1,463			50			20			228			—			(591	)		1,170
Middle East/Africa/Oceania		204			—			4			—			—			(50	)		158
Japan		404			9			—			96			—			(188	)		321
China		607			2			—			65			—			(284	)		390
Asia, other than Japan and China		287			—			1			—			—			(123	)		165

		3,606			69			53			525			—			(1,622	)		2,631
Domestic market		846			77			316			124			—			(139	)		1,224

		4,452			146			369			649			—			(1,761	)		3,855

Assets:
Property, plant and equipment, net		4,024			858			439			529			38			—			5,888
Additions to Property, plant and equipment		503			315			65			65			1			—			949
Investments in affiliated companies and joint ventures and other investments, net of provision for losses		338			—			(6	)		320			338			—			990

Capital employed		3,818			246			473			477			26			—			5,040

F-18

Operating income by product — after eliminations (Unaudited)


	Nine-month periods ended September 30
	2004
																		Impairment/
																		Gain on sale
	Revenues						Value											of property,		Depreciation,
							added			Net		Cost and						plant and		depletion and			Operating
	Export		Domestic		Total		tax			revenues		expenses			Net			equipment		amortization			income
Ferrous
Iron ore		2,264		598		2,862		(95	)		2,767		(1,242	)		1,525			—		(192	)		1,333
Pellets		663		184		847		(31	)		816		(618	)		198			—		(5	)		193
Manganese		30		10		40		(5	)		35		(31	)		4			—		—			4
Ferroalloys		307		141		448		(36	)		412		(201	)		211			—		(10	)		201

		3,264		933		4,197		(167	)		4,030		(2,092	)		1,938			—		(207	)		1,731
Non ferrous
Gold		—		—		—		—			—		—			—			—		—			—
Potash		—		89		89		(14	)		75		(38	)		37			—		(4	)		33
Kaolin		104		15		119		(4	)		115		(66	)		49			—		(11	)		38
Copper		80		14		94		(3	)		91		(44	)		47			—		(9	)		38

		184		118		302		(21	)		281		(148	)		133			—		(24	)		109
Aluminum
Alumina		308		9		317		(13	)		304		(258	)		46			—		(14	)		32
Aluminum		519		20		539		(2	)		537		(175	)		362			—		(11	)		351
Bauxite		40		—		40		—			40		(35	)		5			—		—			5

		867		29		896		(15	)		881		(468	)		413			—		(25	)		388
Logistics
Railroads		—		450		450		(71	)		379		(235	)		144			—		(21	)		123
Ports		—		126		126		(21	)		105		(64	)		41			—		(3	)		38
Ships		37		30		67		(5	)		62		(77	)		(15	)		—		—			(15	)

		37		606		643		(97	)		546		(376	)		170			—		(24	)		146
Others		10		3		13		(2	)		11		(84	)		(73	)		—		—			(73	)

		4,362		1,689		6,051		(302	)		5,749		(3,168	)		2,581			—		(280	)		2,301

[Additional columns below]

[Continued from above table, first column(s) repeated]


	Nine-month periods ended September 30
	2003
																		Impairment/
																		Gain on sale
	Revenues						Value											of property,			Depreciation,
							added			Net		Cost and						plant and			depletion and			Operating
	Export		Domestic		Total		tax			revenues		expenses			Net			equipment			amortization			income
Ferrous
Iron ore		1,433		408		1,841		(52	)		1,789		(876	)		913			—			(69	)		844
Pellets		429		155		584		(19	)		565		(448	)		117			(12	)		(9	)		96
Manganese		30		8		38		(3	)		35		(20	)		15			—			(1	)		14
Ferroalloys		139		68		207		(15	)		192		(142	)		50			—			(7	)		43

		2,031		639		2,670		(89	)		2,581		(1,486	)		1,095			(12	)		(86	)		997
Non ferrous
Gold		21		—		21		—			21		(2	)		19			—			(2	)		17
Potash		—		70		70		(9	)		61		(31	)		30			—			(3	)		27
Kaolin		47		8		55		(1	)		54		(43	)		11			—			(4	)		7
Copper		—		—		—		—			—		—			—			—			—			—

		68		78		146		(10	)		136		(76	)		60			—			(9	)		51
Aluminum
Alumina		231		115		346		(7	)		339		(256	)		83			—			(10	)		73
Aluminum		221		8		229		—			229		(207	)		22			—			—			22
Bauxite		22		1		23		—			23		(21	)		2			—			—			2

		474		124		598		(7	)		591		(484	)		107			—			(10	)		97
Logistics
Railroads		—		246		246		(25	)		221		(69	)		152			—			(47	)		105
Ports		1		105		106		(9	)		97		(54	)		43			—			(6	)		37
Ships		36		24		60		(3	)		57		(86	)		(29	)		—			—			(29	)

		37		375		412		(37	)		375		(209	)		166			—			(53	)		113
Others		21		8		29		—			29		(33	)		(4	)		—			(2	)		(6	)

		2,631		1,224		3,855		(143	)		3,712		(2,288	)		1,424			(12	)		(160	)		1,252

F-19

13		Derivative financial instruments

		Volatility of interest rates, exchange rates and commodity prices are the main market risks to which we are exposed - all three are managed through derivative operations. These have the exclusive aim of reducing exposure to risk. We do not use derivatives for speculation purposes.

		We monitor and evaluate our derivative positions on a regular basis and adjust our strategy in response to market conditions. We also periodically review the credit limits and credit worthiness of our counter-parties in these transactions. In view of the policies and practices established for operations with derivatives, management considers the occurrence of non-measurable risk situations as unlikely.

		The asset (liability) balances and the movement in fair value of derivative financial instruments is as follows (the quarterly information is unaudited):


				Interest
				rates
	Gold			(LIBOR)			Currencies			Alumina			Aluminum			Total
Unrealized gains (losses) at April 1, 2004		(37	)		(48	)		1			(36	)		(43	)		(163	)
Financial settlement		1			11			—			—			—			12
Unrealized gains (losses) in the period		9			5			—			4			4			22
Effect of exchange rate changes		2			2			—			2			2			8

Unrealized gains (losses) at June 30, 2004		(25	)		(30	)		1			(30	)		(37	)		(121	)

Unrealized gains (losses) at July 1, 2004		(25	)		(30	)		1			(30	)		(37	)		(121	)
Financial settlement		—			3			—									3
Unrealized gains (losses) in the period		(5	)		(1	)		—			(5	)		(25	)		(36	)
Effect of exchange rate changes		(2	)		(3	)		—			(2	)		(3	)		(10	)

Unrealized gains (losses) at September 30, 2004		(32	)		(31	)		1			(37	)		(65	)		(164	)

Unrealized gains (losses) at July 1, 2003		(11	)		(65	)		(1	)		1			—			(76	)
Financial settlement		5			4			—			—			—			9
Unrealized gains (losses) in the period		(17	)		(1	)		3			(6	)		—			(21	)
Effect of exchange rate changes		1			2			—			—			—			3

Unrealized gains (losses) at September 30, 2003		(22	)		(60	)		2			(5	)		—			(85	)

Unrealized gains (losses) at January 1, 2004		(32	)		(46	)		5			(18	)		—			(91	)
Initial consolidation of Albras		—			—			—			—			(20	)		(20	)
Financial settlement		1			17			(2	)		—			—			16
Unrealized gains (losses) in the period		(1	)		(2	)		(2	)		(19	)		(44	)		(68	)
Effect of exchange rate changes		—			—			—			—			(1	)		(1	)

Unrealized gains (losses) at September 30, 2004		(32	)		(31	)		1			(37	)		(65	)		(164	)

Unrealized gains (losses) at January 1, 2003		(15	)		(60	)		(1	)		3			—			(73	)
Financial settlement		5			18			—			—			—			23
Unrealized gains (losses) in the period		(12	)		(5	)		3			(9	)		—			(23	)
Effect of exchange rate changes		—			(13	)		—			1			—			(12	)

Unrealized gains (losses) at September 30, 2003		(22	)		(60	)		2			(5	)		—			(85	)

Unrealized gains (losses) in the period are included in our income statement under the caption of financial expenses.

F-20

Final maturity dates for the above instruments are as follows:


Gold		Dec 2008
Interest rates (LIBOR)		Oct 2007
Currencies		Dec 2011
Alumina		Dec 2008
Aluminum		Dec 2006

		Albras entered into a 20 years contract to purchase power from Eletronorte to provide power for its industrial activities which became effective as from June 1, 2004. The contract includes a price adjustment related to LME aluminum prices.

		The price adjustment related to LME is an embedded derivative as defined by SFAS 133, which is valued at fair value with variations recorded in the income statement. The fair value variation for the period up to September 30, 2004 was $22.

14		Subsequent Event

		Additional dividend payment on October 29

		On October 13, 2004 the Board of Directors of CVRD, approved the payment of an additional dividend in the amount of $250 to be paid on October 29, 2004, $150 of which in the form of interest shareholders’ equity and $100 in the form of dividends.

		Therefore, on October 29, 2004, a total amount of $525 was distributed to shareholders, which includes the second installment of the minimum dividend announced on January 28, of $275 and the additional dividend of $250.

		CVRD sells its stake in PPSA

		On October 20, 2004 CVRD announces that it has transferred its stake in Pará Pigmentos S.A. (PPSA) to its subsidiary Caemi. CVRD owned 82.0% of the total capital of PPSA and 60.2% of the total capital of Caemi. The objective of this sale is the consolidation of CVRD´s kaolin business in Caemi which is already a player in the global kaolin market through its subsidiary CADAM.

* * *

F-21

Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


Date: November 12, 2004	COMPANHIA VALE DO RIO DOCE (Registrant)
	By:	/s/ Fabio de Oliveira Barbosa
		Fabio de Oliveira Barbosa
		Chief Financial Officer