Edgar Filing: Companhia Vale do Rio Doce

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 2005

Companhia Vale do Rio Doce

Avenida Graça Aranha, No. 26
20005-900 Rio de Janeiro, RJ, Brazil
(Address of principal executive office)

(Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.)

(Check One) Form 20-F þ Form 40-F o

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

(Check One) Yes o No þ

(Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7))

(Check One) Yes o No þ

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

(Check One) Yes o No þ

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

TABLE OF CONTENTS


Incorporation by Reference Paragraph
USGAAP Financial Pages (F Pages)
Signature

Table of Contents

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333-110867 and shall be deemed to be a part thereof from the date on which this report is furnished, to the extent not superseded by documents or reports subsequently filed or furnished.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
Condensed Consolidated Balance Sheets as of September 30, 2005 and December 31, 2004		F-3

Condensed Consolidated Statements of Income for the three-month periods ended September 30, 2005 and 2004 and June 30, 2005 and for the nine month periods ended September 30, 2005 and 2004		F-5

Condensed Consolidated Statements of Cash Flows for the three-month periods ended September 30, 2005 and 2004 and June 30, 2005 and for the nine month periods ended September 30, 2005 and 2004		F-6

Condensed Consolidated Statements of Changes in Stockholders’ Equity for the three-month periods ended September 30, 2005 and 2004 and June 30, 2005 and for the nine month periods ended September 30, 2005 and 2004		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 30,		December 31,
	2005		2004
	(unaudited)
Assets

Current assets

Cash and cash equivalents		1,235		1,249
Accounts receivable, net
Related parties		202		124
Unrelated parties		1,391		905
Loans and advances to related parties		88		56
Inventories		1,133		849
Deferred income tax		255		203
Recoverable taxes		266		285
Others		436		219

		5,006		3,890


Property, plant and equipment, net		13,375		9,063

Investments in affiliated companies and joint ventures and other investments, net of provision for losses on equity investments		1,644		1,159

Other assets
Goodwill on acquisition of subsidiaries		577		486
Loans and advances
Related parties		6		55
Unrelated parties		63		56
Prepaid pension cost		292		170
Deferred income tax		—		70
Judicial deposits		690		531
Unrealized gain on derivative instruments		1		4
Advances to suppliers — energy		263		98
Others		186		133

		2,078		1,603

TOTAL		22,103		15,715

F - 3

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

(Continued)


	September 30,			December 31,
	2005			2004
	(unaudited)
Liabilities and stockholders’ equity

Current liabilities

Suppliers		966			689
Payroll and related charges		162			141
Current portion of long-term debt — unrelated parties		688			730
Short-term debt		171			74
Loans from related parties		51			52
Provision for taxes		553			459
Provision for operational expenses		93			64
Others		280			246

		2,964			2,455


Long-term liabilities
Employees post-retirement benefits		257			215
Long-term debt — unrelated parties		3,031			3,214
Loans from related parties		1			18
Provisions for contingencies (Note 10)		1,405			914
Unrealized loss on derivative instruments		173			236
Deferred income tax		101			—
Provisions for environmental liabilities		166			134
Others		356			350

		5,490			5,081

Minority interests		1,444			788


Stockholders’ equity
Preferred class A stock — 1,800,000,000 no-par-value shares authorized and 415,727,739		2,150			1,176
Common stock — 900,000,000 no-par-value shares authorized and 749,949,429 issued		3,806			2,121
Treasury stock — 11,803 (2004 — 11,951) preferred and 14,145,510 common shares		(88	)		(88	)
Additional paid-in capital		498			498
Other cumulative comprehensive loss		(2,105	)		(3,774	)
Appropriated retained earnings		1,936			4,143
Unappropriated retained earnings		6,008			3,315

		12,205			7,391

TOTAL		22,103			15,715

See notes to condensed consolidated financial information.

F - 4

Condensed Consolidated Balance Sheets

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


	Three-month									Nine month periods
	periods ended									ended September 30
	September			June			September
	30, 2005			30, 2005			30, 2004			2005			2004
Operating revenues, net of discounts, returns and allowances
Sales of ores and metals		2,887			3,077			1,725			7,712			4,499
Revenues from logistic services		359			316			232			907			643
Aluminum products		358			327			327			1,031			896
Other products and services		6			1			3			9			13

		3,610			3,721			2,287			9,659			6,051
Value-added tax		(165	)		(185	)		(114	)		(465	)		(302	)

Net operating revenues		3,445			3,536			2,173			9,194			5,749


Operating costs and expenses
Cost of ores and metals sold		(1,202	)		(1,134	)		(751	)		(3,248	)		(2,041	)
Cost of logistic services		(188	)		(169	)		(126	)		(500	)		(358	)
Cost of aluminum products		(249	)		(203	)		(174	)		(643	)		(464	)
Others		(6	)		(2	)		(2	)		(9	)		(10	)

		(1,645	)		(1,508	)		(1,053	)		(4,400	)		(2,873	)
Selling, general and administrative expenses		(160	)		(135	)		(112	)		(408	)		(319	)
Research and development		(104	)		(54	)		(36	)		(192	)		(86	)
Employee profit sharing plan		(24	)		(24	)		(17	)		(65	)		(47	)
Others		(107	)		(44	)		(69	)		(158	)		(123	)

		(2,040	)		(1,765	)		(1,287	)		(5,223	)		(3,448	)

Operating income		1,405			1,771			886			3,971			2,301


Non-operating income (expenses)
Financial income		36			27			10			92			41
Financial expenses		(216	)		(51	)		(165	)		(359	)		(413	)
Foreign exchange and monetary gains (losses), net		163			304			77			465			(210	)
Gain on sale of investments		126			—			314			126			314

		109			280			236			324			(268	)

Income before income taxes, equity results and minority interests		1,514			2,051			1,122			4,295			2,033

Income taxes
Current		(172	)		(330	)		(285	)		(662	)		(423	)
Deferred		(102	)		(107	)		61			(162	)		70

		(274	)		(437	)		(224	)		(824	)		(353	)


Equity in results of affiliates and joint ventures and change in provision for losses on equity investments		194			220			127			547			363
Minority interests		(117	)		(204	)		(82	)		(373	)		(191	)

Net income		1,317			1,630			943			3,645			1,852


Income available to preferred stockholders		476			588			341			1,316			669
Income available to common stockholders		841			1,042			602			2,329			1,183

Basic and diluted earnings per Preferred Class A Share		1.15			1.41			0.82			3.17			1.61
Basic and diluted earnings per Common Share		1.15			1.41			0.82			3.17			1.61

Weighted average number of shares outstanding (thousands of shares)
Preferred Class A shares		415,716			415,716			415,714			415,716			415,713
Common shares		735,804			735,804			735,804			735,804			735,804

See notes to condensed consolidated financial information.

F - 5

Condensed Consolidated Statements of Cash Flows

Expressed in millions of United States dollars (Unaudited)


										Nine month periods
	Three-month periods ended									ended September 30
	September			June			September
	30, 2005			30, 2005			30, 2004			2005			2004
Cash flows from operating activities:
Net income		1,317			1,630			943			3,645			1,852
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation, depletion and amortization		171			136			102			436			280
Dividends received		158			126			19			353			140
Equity in results of affiliates and joint ventures and change in provision for losses on equity investments		(194	)		(220	)		(127	)		(547	)		(363	)
Deferred income taxes		102			107			(61	)		162			(70	)
Gain on sale of investments		(126	)		—			(314	)		(126	)		(314	)
Impairment of property, plant and equipment		18			12			—			34			—
Pension plan					—			3			—			9
Foreign exchange and monetary losses (gains)		(201	)		(298	)		(118	)		(472	)		218
Net unrealized derivative losses (gains)		65			(85	)		36			(25	)		68
Minority interests		117			204			82			373			191
Interest payable, net		12			38			42			48			55
Others		(5	)		(71	)		64			(96	)		67
Decrease (increase) in assets:
Accounts receivable		281			(472	)		—			(283	)		(155	)
Inventories		(44	)		(50	)		(39	)		(114	)		(121	)
Others		(441	)		(187	)		(44	)		(702	)		(2	)
Increase (decrease) in liabilities:
Suppliers		(21	)		142			26			166			(58	)
Payroll and related charges		22			13			27			—			6
Taxes payable		396			325			370			642			370
Others		161			76			96			151			231

Cash provided by operating activities		1,788			1,426			1,107			3,645			2,404

Cash flows from investing activities:
Loans and advances receivable
Related parties
Additions		(1	)		(27	)		(6	)		(28	)		(12	)
Repayments		28			22			—			53			46
Others		(1	)		—			(3	)		—			16
Guarantees and deposits		(32	)		(3	)		(48	)		(52	)		(90	)
Additions to investments		—			(90	)		(4	)		(91	)		(19	)
Additions to property, plant and equipment		(1,302	)		(777	)		(348	)		(2,740	)		(1,145	)
Proceeds from disposal of investments		126			—			415			126			415
Proceeds from disposals of property, plant and equipment		1			1			—			4			—

Cash provided by (used in) investing activities		(1,181	)		(874	)		6			(2,728	)		(789	)

Cash flows from financing activities:
Short-term debt, net issuances (repayments)		(194	)		216			40			43			40
Loans
Related parties
Additions		—			3			15			7			21
Repayments		(17	)		(9	)		(2	)		(43	)		(9	)
Issuances of long-term debt
Related parties		—			11			—			15			—
Others		22			114			43			371			935
Repayments of long-term debt
Related parties					—			(3	)		—			(3	)
Others		(156	)		(432	)		(222	)		(744	)		(893	)
Interest attributed to stockholders		—			(500	)		—			(500	)		(269	)

Cash used in financing activities		(345	)		(597	)		(129	)		(851	)		(178	)

Increase (decrease) in cash and cash equivalents		262			(45	)		984			66			1,437
Effect of exchange rate changes on cash and cash equivalents		17			(121	)		(104	)		(80	)		(109	)
Initial cash in new consolidated subsidiary		—			—			—			—			26
Cash and cash equivalents, beginning of period		956			1,122			1,059			1,249			585

Cash and cash equivalents, end of period		1,235			956			1,939			1,235			1,939

Cash paid during the period for:
Interest on short-term debt		(1	)		—			—			(1	)		(2	)
Interest on long-term debt		(71	)		(35	)		(82	)		(188	)		(213	)
Income tax		(202	)		(171	)		—			(452	)		—
Non-cash transactions
Interest capitalized		(10	)		(9	)		(11	)		(34	)		(22	)
Income tax paid with credits		(16	)		(53	)		—			(74	)		—

See notes to condensed consolidated financial information.

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 month periods ended
	Three-month periods ended									September 30
	September			June			September
	30, 2005			30, 2005			30, 2004			2005			2004
Preferred class A stock (including three special shares)
Beginning of the period		2,150			1,176			1,176			1,176			1,055
Transfer from appropriated retained earnings		—			974			—			974			121

End of the period		2,150			2,150			1,176			2,150			1,176

Common stock
Beginning of the period		3,806			2,121			2,121			2,121			1,902
Transfer from appropriated retained earnings		—			1,685			—			1,685			219

End of the period		3,806			3,806			2,121			3,806			2,121

Treasury stock

End of the period		(88	)		(88	)		(88	)		(88	)		(88	)

Additional paid-in capital
End of the period		498			498			498			498			498

Other cumulative comprehensive loss
Cumulative translation adjustments
Beginning of the period		(2,859	)		(3,891	)		(4,757	)		(3,869	)		(4,449	)
Change in the period		590			1,032			461			1,600			153

End of the period		(2,269	)		(2,859	)		(4,296	)		(2,269	)		(4,296	)

Unrealized gain on available-for-sale securities
Beginning of the period		115			116			61			95			74
Change in the period		49			(1	)		21			69			8

End of the period		164			115			82			164			82

Total other cumulative comprehensive loss		(2,105	)		(2,744	)		(4,214	)		(2,105	)		(4,214	)

Appropriated retained earnings
Beginning of the period		1,829			4,126			2,501			4,143			3,035
Transfer (to) from retained earnings		107			362			218			452			24
Transfer to capital stock		—			(2,659	)		—			(2,659	)		(340	)

End of the period		1,936			1,829			2,719			1,936			2,719

Retained earnings
Beginning of the period		4,798			4,030			3,667			3,315			2,857
Net income		1,317			1,630			943			3,645			1,852
Interest attributed to stockholders
Preferred class A stock		—			(180	)		(45	)		(180	)		(151	)
Common stock		—			(320	)		(79	)		(320	)		(266	)
Appropriation (to) from reserves		(107	)		(362	)		(218	)		(452	)		(24	)

End of the period		6,008			4,798			4,268			6,008			4,268

Total stockholders’ equity		12,205			10,249			6,480			12,205			6,480


Comprehensive income is comprised as follows:
Net income		1,317			1,630			943			3,645			1,852
Cumulative translation adjustments		590			1,032			461			1,600			153
Unrealized gain on available-for-sale securities		49			(1	)		21			69			8

Total comprehensive income		1,956			2,661			1,425			5,314			2,013


Shares
Preferred class A stock (including three special shares)		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		(14,157,313	)		(14,157,325	)		(14,158,059	)		(14,157,461	)		(14,158,059	)
Sales					12			582			148			582

End of the period		(14,157,313	)		(14,157,313	)		(14,157,477	)		(14,157,313	)		(14,157,477	)

		1,151,519,855			1,151,519,855			1,151,519,691			1,151,519,855			1,151,519,691


Interest attributed to stockholders (per share)
Preferred class A stock (including three special shares)		0.43			0.43			0.11			0.43			0.36
Common stock		0.43			0.43			0.11			0.43			0.36


(1)		As of September 30, 2005, 14,145,510 common shares and 11,803 preferred shares were held in treasury in the amount of US$ 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, organized 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 joint ventures and affiliates are described in Note 8.

		The main operating subsidiaries we consolidate are as follows:


		% voting
Subsidiary	% ownership	capital	Head office location	Principal activity
Alumina do Norte do Brasil S.A. — Alunorte (“Alunorte”)	57	61	Brazil	Alumina
Alumínio Brasileiro S.A. — Albras (“Albras”)	51	51	Brazil	Aluminum
CADAM S.A (CADAM) (1)	37	100	Brazil	Kaolin
CVRD Overseas Ltd.	100	100	Cayman Islands	Trading
Ferrovia Centro-Atlântica S. A.	100	100	Brazil	Logistics
Itabira Rio Doce Company Ltd. — ITACO	100	100	Cayman Islands	Trading
Minerações Brasileiras Reunidas S.A. — MBR (2)	56	90	Brazil	Iron ore
Navegação Vale do Rio Doce S.A. — DOCENAVE	100	100	Brazil	Shipping
Pará Pigmentos S.A. (1)	76	86	Brazil	Kaolin
Rio Doce International Finance Ltd. — RDIF	100	100	Bahamas	International finance
Rio Doce Manganês S.A.	100	100	Brazil	Manganese and Ferroalloys
Rio Doce Manganèse Europe — RDME	100	100	France	Ferroalloys
Rio Doce Manganese Norway — RDMN	100	100	Norway	Ferroalloys
Salobo Metais S.A.	100	100	Brazil	Copper
Urucum Mineração S.A.	100	100	Brazil	Iron ore, Ferroalloys and
				Manganese


(1)		Through Caemi Mineração e Metalurgia S.A. CVRD holds 60.2% of the total capital and 100% of the voting capital.

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

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, variable interest entities in which we are the primary beneficiary (FASB Interpretation FIN No. 46 “Consolidation of Variable Interest Entities (revised December 2003)”) are consolidated as from January 1, 2004. 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.

		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 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 hydroelectric power projects, are proportionately consolidated.

F - 8

3		Summary of significant accounting policies

		Our condensed consolidated interim financial information for the three-month periods ended September 30, 2005, June 30, 2005 and September 30, 2004 and for the nine-month periods ended September 30, 2005 and 2004 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 three and nine month period ended September 30, 2005 are not necessarily indicative of the results to be expected for the full fiscal year ending December 31, 2005.

		In management’s opinion, the information set forth in the accompanying condensed consolidated balance sheet as of December 31, 2004 is fairly stated in all material respects in relation to the consolidated balance sheet from which it has been derived.

		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, 2005, June 30, 2005 and December 31, 2004 were R$2.2222: US$1.00, R$2.3504: US$1.00 and R$2.6544: US$1.00, respectively.

4		Recently-issued accounting pronouncements

		In July 2005, the FASB issued FSP No. APB 18-1, “Accounting by an investor for its proportionate share of accumulated other comprehensive income of an investee accounted for under the equity method in accordance with APB Opinion nº 18 upon a loss of significant influence” which sets reporting on how an investor should account for its proportionate share of an investee’s equity adjustments for other comprehensive income upon a loss of significant influence. We will apply this statement in the event it occurs in fiscal periods beginning after July 2005.

		In June 2005, the FASB issued SFAS No. 154, “Accounting Changes and Error Corrections” which sets reporting of a change in accounting principles or errors. We do not expect FASB No. 154 to have a significant impact on our financial position, results of operations or cash flows.

		In March 2005, the FASB issued FSP FIN 46(R)-5, “Consolidation of Variable Interests Entities” to address whether a reporting enterprise should consider whether it holds an implicit variable interest in a variable interest entity (VIE) or potential VIE when specific conditions exist. We adopted FIN 46R and we do not expect FSP FIN 46(R)-5 to have any impact on our financial position, results of operations or cash flows.

		In March 2005, the FASB issued FASB Interpretation No. 47, “Accounting for Conditional Asset Retirement Obligations” which refers to legal obligation to perform an asset retirement activity. We do not expect FASB Interpretation No. 47 to have a significant impact on our financial position, results of operations or cash flows.

		In December 2004, the FASB issued SFAS No. 153, “Exchanges of Nonmonetary Assets” an amendment of APB No. 29. We have already adopted this new Statement, which did not have a significant impact on our financial position, results of operations or cash flows.

		In November 2004, the FASB issued SFAS No. 151, “Inventory Costs” an amendment of ARB No. 43, Chapter 4 that deals with inventory pricing. We have already adopted this new

F - 9

		Statement, which did not have a significant impact on our financial position, results of operations or cash flows.

		In September 2004, the FASB issued FSP EITF Issue 03-1-1, which delayed the effective date of paragraphs 10-20 of EITF Issue No. 03-1, The Meaning of Other-Than-Temporary Impairment and Its Application to Certain Investments. We do not expect EITF Issue No. 03-01 to have any impact on our financial position, results of operations or cash flows.

5		Disposal of investment

		In July 2005, we sold our equity investee, Quebec Cartier Mining Company (QCM) to Dofasco Inc. (Dofasco) for US$ 126. The accounting value of the investment had previously been completely written-off and therefore all proceeds were recorded as gain.

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 condensed consolidated financial information is reconciled to the statutory rates as follows:


	Three-month									Nine months periods
	periods ended									ended September 30
	September			June 30,			September
	30, 2005			2005			30, 2004			2005			2004
Income before income taxes, equity results and minority interests		1,514			2,051			1,122			4,295			2,033


Federal income tax and social contribution expense at statutory enacted rates		(515	)		(697	)		(381	)		(1,460	)		(691	)
Adjustments to derive effective tax rate:
Tax benefit on interest attributed to stockholders		50			131			50			235			149
Exempt foreign income (expenses)		143			82			143			271			178
Difference on tax basis of equity investees		(9	)		(17	)		(75	)		(30	)		(105	)
Tax incentives		54			59			32			135			44
Valuation allowance reversal (provision)		—			—			19			—			71
Other non-taxable gains (losses)		3			5			(12	)		25			1

Federal income tax and social contribution expense in consolidated statements of income		(274	)		(437	)		(224	)		(824	)		(353	)

We have certain tax incentives relative to our iron ore and manganese operations in Carajás, potash in Sergipe and relative to alumina and aluminum 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. The incentive relating to alumina and potash comprise full income tax exemption on defined production levels which expires in 2010 and 2013, respectively, while the partial exemption incentives relative to aluminum expire in 2013. An amount equal to the tax saving must be appropriated to a reserve account within stockholders’ equity and may not be distributed in the form of cash dividends.

F - 10

Inventories


	September		December
	30, 2005		31, 2004
Finished products
Iron ore and pellets		316		205
Manganese and ferroalloys		94		156
Aluminum		28		54
Alumina		3		20
Kaolin		21		17
Others		39		11
Spare parts and maintenance supplies		632		386

		1,133		849

F - 11

Investments in affiliated companies and joint ventures


	September 30, 2005									Investments				Equity Adjustments															Dividends received										Quoted
	Participation in													Three-month periods ended									Nine month periods						Three-month periods ended						Nine month periods				market value
	capital (%)				Net		Net income for			September		December		September			June 30,			September			ended September 30						September		June 30,		September		ended September 30				September
	voting		total		equity		the period			30, 2005		31, 2004		30, 2005			2005			30, 2004			2005			2004			30, 2005		2005		30, 2004		2005		2004		30, 2005
Ferrous
Companhia Nipo-Brasileira de Pelotização - NIBRASCO (2)		51.11		51.00		93		50			48		30		13			11			3			26			10			—		—		—		—		—		n/a
Companhia Hispano-Brasileira de Pelotização — HISPANOBRÁS (2)		51.00		50.89		68		47			35		26		8			14			2			24			6			16		3		—		20		—		n/a
Companhia Coreano-Brasileira de Pelotização — KOBRASCO		50.00		50.00		74		40			37		13		3			14			4			20			6			—		—		—		—		—		n/a
Companhia Ítalo-Brasileira de Pelotização — ITABRASCO (2)		51.00		50.90		63		37			32		18		5			13			1			19			5			10		—		—		10		—		n/a
Gulf Industrial Investment Company — GIIC		50.00		50.00		127		98			63		45		14			23			4			49			10			20		11		—		31		7		n/a
SAMARCO Mineração S.A. — SAMARCO (3)		50.00		50.00		632		344			364		261		82			56			35			172			80			75		35		19		130		68		n/a
Minas da Serra Geral S.A. — MSG		50.00		50.00		44		(4	)		22		18		2			(4	)		—			(2	)		(2	)		—		—		—		—		—		n/a
Others		—		—		—		—			28		24		—			1			1			(1	)		—			—		—		—		—		—		n/a

											629		435		127			128			50			307			115			121		49		19		191		75		n/a

Logistics
MRS Logística S.A		37.23		29.35		323		118			97		78		17			12			8			39			22			—		5		—		5		—		n/a
Others		—		—		—		—			—		1		—			—			—			—			—			—		—		—		—		—		n/a

											97		79		17			12			8			39			22			—		5		—		5		—		n/a

Holdings

Steel
Usinas Siderúrgicas de Minas Gerais S.A. - USIMINAS		22.99		11.46		2,197		1,178			252		140		36			57			18			135			52			29		34		—		63		13		545
Companhia Siderúrgica de Tubarão — CST (1)						—		—			—		—		—			—			9			—			87			—		—		—		—		—		n/a
California Steel Industries Inc. — CSI		50.00		50.00		307		31			154		149		(1	)		5			23			15			37			8		—		—		28		2		n/a
SIDERAR (cost $15) - available for sale investments		4.85		4.85		—		—			179		110		—			—			—			—			—			—		—		—		—		—		179

											585		399		35			62			50			150			176			37		34		—		91		15		724

Aluminum and bauxite
Mineração Rio do Norte S.A. - MRN		40.00		40.00		404		122			162		171		17			17			16			49			41			—		30		—		58		41		n/a
Valesul Alumínio S.A. - VALESUL		54.51		54.51		117		4			64		55		(2	)		1			4			2			11			—		8		—		8		9		n/a

											226		226		15			18			20			51			52			—		38		—		66		50		n/a

Coal
Henan Longyu Resources Co. Ltd(4)		—		—		—		—			86		—		—			—			—			—			—			—		—		—		—		—		n/a
Shandong Yankuang International Company Ltd(4)		—		—		—		—			11		10		—			—			—			—			—			—		—		—		—		—		n/a

											97		10		—			—			—			—			—			—		—		—		—		—		n/a

Other affiliates and joint ventures		—		—		—		—			10		10		—			—			(1	)		—			(2	)		—		—		—		—		—		n/a


											918		645		50			80			69			201			226			37		72		—		157		65		724

Total											1,644		1,159		194			220			127			547			363			158		126		19		353		140		724


(1)		During 2004 we sold our interest in CST;

(2)		We held a majority of the voting power of several entities that were accounted for under the equity method in accordance with EITF 96-16 due to veto rights held by minority under shareholders agreements;

(3)		Investment includes goodwill of US$45 in periods presented;

(4)		Preoperating investiments.

F - 12

Pension costs


										Nine month periods
	Three month periods ended									ended September 30
	September			June 30,			September
	30, 2005			2005			*30, 2004 ()**			2005			*2004 ()**
Service cost — benefits earned during the period		1			1			1			2			2
Interest cost on projected benefit obligation		63			60			47			179			141
Expected return on assets		(80	)		(75	)		(53	)		(224	)		(159	)
Amortization of initial transitory obligation		3			2			2			8			6
Net deferral		(3	)		(4	)		(6	)		(11	)		(18	)

Net periodic pension cost		(16	)		(16	)		(9	)		(46	)		(28	)


	(*)	Based on 2004 annual periodic pension cost.

		In addition to benefits provided under the Pension Plan, accruals have been made relative to supplementary health care benefits extended in previous periods as part of early-retirement programs. Such accruals included in long-term liabilities totaled US$257 and US$215, at September 30, 2005 and December 31, 2004, respectively, plus US$30 and US$34, respectively, in current liabilities — others.

		The cost recognized for the three-month ended September 30, 2005, June 30, 2005, and September 30, 2004 relative to the defined contribution element of the New Plan was US$2, in each period.

		We previously disclosed in our consolidated financial statements for the year ended December 31, 2004, that we expected to contribute US$16 to our defined benefit pension plan in 2005. As of September 30, 2005, we had contributed US$15. We do not expect any material change in our previous estimate.

10		Commitments and contingencies

(a)		At September 30, 2005, we had extended guarantees for borrowings obtained by affiliates and joint ventures in the amount of US$6, 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 a 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”.

(b)		We and our 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.

F - 13

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


	September 30, 2005				December 31, 2004
	Provision for		Judicial		Provision for		Judicial
	contingencies		deposits		contingencies		deposits
Labor claims		263		145		221		109
Civil claims		237		101		185		72
Tax — related actions		879		440		473		341
Others		26		4		35		9

		1,405		690		914		531

		Labor — related actions principally comprise employee claims for (i) payment of time spent travelling from their residences to the work-place, (ii) health and safety premium claims and (iii) various other matters, often in connection with disputes over 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 income tax, revenue taxes, Value Added Tax and of the tax on checking account transaction — CPMF.

		We continue to vigorously pursue our interests in all the above actions but recognize that losses are probable for which we have made provisions.

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

		Contingencies settled in the three-month periods ended September 30, 2005, June 30, 2005 and September 30, 2004 aggregated US$86, US$56 and US$14, respectively, and additional provisions aggregated US$96, US$44 and US$39, respectively.

		In addition to the contingencies for which we have made provisions, we have possible losses in connection with tax contingencies totaling US$725 at September 30, 2005, for which, no provision is maintained.

(c)		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 US$205, which represents half of the US$410 in expenditures estimated as necessary to complete geological exploration and mineral resource development projects in the region. 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, 2005, the remaining contributions towards exploration and development activities totaled US$34. In the event that either of us wishes to conduct further exploration and development after having spent such US$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

F - 14

		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.

(d)		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 September 27, 2005 we declared a distribution on these “debentures” in the amount of US$2, paid as from October 3, 2005.

(e)		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:


	Three-month periods ended								Nine month periods
	(unaudited)								ended September 30
	September			June 30,			September
	30, 2005			2005			30, 2004		2005			2004
Environmental liabilities beginning of period		159			137			82		134			81
Accretion expense		—			10			3		14			9
Liabilities settled in the current period		(2	)		(4	)		—		(6	)		—
Cumulative translation adjustment		9			16			6		24			1

Environmental liabilities end of period		166			159			91		166			91

11		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 non-ferrous minerals, including potash, kaolin, copper and research of others minerals, mainly nickel.

F - 15

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 and aluminum metal smelting and investments in joint ventures and affiliates engaged in bauxite mining.

•		Steel — comprises our investments in joint ventures and affiliates operating in the steel industry.

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

F-16

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, 2005																					June 30, 2005																					September 30, 2004
			Non																					Non																					Non
	Ferrous		ferrous			Logistics			Aluminum			Others			Eliminations			Consolidated			Ferrous			ferrous			Logistics			Aluminum			Others			Eliminations			Consolidated			Ferrous			ferrous			Logistics			Aluminum			Others			Eliminations			Consolidated
Gross revenues — Export	3,387			166			17			432			—			(1,398	)		2,604			3,539			206			17			422			—			(1,476	)		2,708			2,041			150			24			419			—			(968	)		1,666
Gross revenues — Domestic	586			70			353			87			—			(90	)		1,006			679			42			318			81			—			(107	)		1,013			376			55			234			53			—			(97	)		621
Cost and expenses	(2,572	)		(219	)		(256	)		(408	)		(67	)		1,488			(2,034	)		(2,580	)		(203	)		(210	)		(392	)		(12	)		1,583			(1,814	)		(1,711	)		(172	)		(158	)		(320	)		—			1,065			(1,296	)
Depreciation, depletion and amortization	(130	)		(14	)		(9	)		(18	)		—			—			(171	)		(97	)		(17	)		(10	)		(12	)		—			—			(136	)		(72	)		(12	)		(9	)		(9	)		—			—			(102	)
Pension plan	—			—			—			—			—			—			—			—			—			—			—			—			—			—			(3	)		—			—			—			—			—			(3	)

Operating income (loss)	1,271			3			105			93			(67	)		—			1,405			1,541			28			115			99			(12	)		—			1,771			631			21			91			143			—			—			886

Financial income	159			—			7			2			7			(139	)		36			78			—			11			3			1			(66	)		27			39			—			5			6			1			(40	)		11
Financial expenses	(268	)		1			(14	)		(75	)		1			139			(216	)		(159	)		(4	)		(4	)		50			—			66			(51	)		(150	)		—			(4	)		(52	)		—			40			(166	)
Foreign exchange and monetary gains (losses), net	126			1			(9	)		46			(1	)		—			163			201			3			(7	)		107			—			—			304			22			3			6			46			—			—			77
Gain on sale of investments	—			—			—			—			126			—			126			—			—			—			—			—			—			—			—			—			—			—			314			—			314
Equity in results of affiliates and joint ventures and change in provision for losses on equity investments	127			—			17			15			35			—			194			128			—			12			18			62			—			220			50			—			8			20			49			—			127
Income taxes	(248	)		2			(5	)		(22	)		(1	)		—			(274	)		(390	)		(1	)		(5	)		(40	)		(1	)		—			(437	)		(197	)		—			(3	)		(23	)		(1	)		—			(224	)
Minority interests	(104	)		—			(1	)		(12	)		—			—			(117	)		(105	)		—			—			(99	)		—			—			(204	)		(39	)		(2	)		—			(41	)		—			—			(82	)

Net income	1,063			7			100			47			100			—			1,317			1,294			26			122			138			50			—			1,630			356			22			103			99			363			—			943


Sales classified by geographic destination:
Export market
America, except United States	413			—			10			66			—			(286	)		203			334			—			11			81			—			(144	)		282			198			—			13			29			—			(102	)		138
United States	56			3			—			43			—			(17	)		85			166			—			—			42			—			(89	)		119			132			—			9			64			—			(87	)		118
Europe	1,303			82			7			205			—			(582	)		1,015			1,518			125			6			185			—			(685	)		1,149			871			80			2			205			—			(459	)		699
Middle East/Africa/Oceania	155			20			—			9			—			24			208			277			34			—			—			—			(75	)		236			132			63			—			—			—			(48	)		147
Japan	345			20			—			97			—			(120	)		342			353			6			—			98			—			(133	)		324			164			2			—			81			—			(47	)		200
China	858			17			—			12			—			(319	)		568			641			10			—			—			—			(220	)		431			401			—			—			40			—			(164	)		277
Asia, other than Japan and China	257			24			—			—			—			(98	)		183			250			31			—			16			—			(130	)		167			143			5			—			—			—			(61	)		87

	3,387			166			17			432			—			(1,398	)		2,604			3,539			206			17			422			—			(1,476	)		2,708			2,041			150			24			419			—			(968	)		1,666
Domestic market	586			70			353			87			—			(90	)		1,006			679			42			318			81			—			(107	)		1,013			376			55			234			53			—			(97	)		621

	3,973			236			370			519			—			(1,488	)		3,610			4,218			248			335			503			—			(1,583	)		3,721			2,417			205			258			472			—			(1,065	)		2,287


Assets:

Property, plant and equipment, net	8,857			1,595			947			1,862			114			—			13,375			7,511			1,478			827			1,572			126			—			11,514			5,050			1,147			577			952			1			—			7,727
Additions to Property, plant and equipment	953			35			79			202			33			—			1,302			525			46			52			153			1			—			777			131			40			114			63			—			—			348
Investments in affiliated companies and joint ventures and other investments, net of provision for losses	629			—			97			226			692			—			1,644			597			—			75			207			629			—			1,508			387			—			70			219			377			—			1,053

Capital employed	7,441			1,167			989			1,117			16			—			10,730			6,468			1,001			827			1,079			22			—			9,397			4,557			913			565			819			31			—			^6,885

F-17

Operating income by product — after eliminations (unaudited)


																																									As of and for the three-month periods ended
	September 30, 2005																							June 30, 2005																							September 30, 2004
	Revenues						Value											Depreciation,						Revenues						Value											Depreciation,						Revenues							Value											Depreciation,
							added			Net		Cost and						depletion and			Operating									added			Net		Cost and						depletion and			Operating										added			Net		Cost and						depletion and			Operating
	Export		Domestic		Total		tax			revenues		expenses			Net			amortization			income			Export		Domestic		Total		tax			revenues		expenses			Net			amortization			income			Export		Domestic			Total		tax			revenues		expenses			Net			amortization			income
Ferrous
Iron ore		1,649		416		2,065		(66	)		1,999		(693	)		1,306			(120	)		1,186			1,694		472		2,166		(81	)		2,085		(668	)		1,417			(87	)		1,330			880		213			1,093		(34	)		1,059		(463	)		596			(67	)		529
Pellets		438		91		529		(22	)		507		(347	)		160			(7	)		153			462		107		569		(27	)		542		(333	)		209			(4	)		205			229		64			293		(12	)		281		(239	)		42			(2	)		40
Manganese		14		6		20		(2	)		18		(25	)		(7	)		(1	)		(8	)		14		5		19		(1	)		18		(14	)		4			—			4			16		4			20		(2	)		18		(17	)		1			—			1
Ferroalloys		61		31		92		(9	)		83		(87	)		(4	)		(5	)		(9	)		98		56		154		(14	)		140		(96	)		44			(5	)		39			113		60			173		(15	)		158		(43	)		115			(3	)		112

		2,162		544		2,706		(99	)		2,607		(1,152	)		1,455			(133	)		1,322			2,268		640		2,908		(123	)		2,785		(1,111	)		1,674			(96	)		1,578			1,238		341			1,579		(63	)		1,516		(762	)		754			(72	)		682
Non ferrous
Potash		—		47		47		(4	)		43		(32	)		11			(1	)		10			—		31		31		(2	)		29		(15	)		14			(2	)		12			—		35			35		(5	)		30		(16	)		14			(1	)		13
Kaolin		36		6		42		(2	)		40		(56	)		(16	)		(3	)		(19	)		38		7		45		(1	)		44		(38	)		6			(6	)		—			36		5			41		(1	)		40		(23	)		17			(4	)		13
Copper		75		17		92		(1	)		91		(59	)		32			(9	)		23			89		4		93		(1	)		92		(44	)		48			(9	)		39			56		14			70		(3	)		67		(40	)		27			(7	)		20

		111		70		181		(7	)		174		(147	)		27			(13	)		14			127		42		169		(4	)		165		(97	)		68			(17	)		51			92		54			146		(9	)		137		(79	)		58			(12	)		46
Aluminum
Alumina		116		30		146		(4	)		142		(130	)		12			(7	)		5			94		16		110		(11	)		99		(95	)		4			(6	)		(2	)		127		3			130		(4	)		126		(102	)		24			(5	)		19
Aluminum		191		11		202		(2	)		200		(105	)		95			(11	)		84			194		10		204		(1	)		203		(93	)		110			(6	)		104			172		8			180		(1	)		179		(54	)		125			(4	)		121
Bauxite		10		—		10		—			10		(10	)		—			—			—			13		—		13		—			13		(12	)		1			—			1			17		—			17		—			17		(14	)		3			—			3

		317		41		358		(6	)		352		(245	)		107			(18	)		89			301		26		327		(12	)		315		(200	)		115			(12	)		103			316		11			327		(5	)		322		(170	)		152			(9	)		143
Logistics
Railroads		—		267		267		(38	)		229		(161	)		68			(5	)		63			—		232		232		(37	)		195		(124	)		71			(9	)		62			—		164			164		(27	)		137		(88	)		49			(9	)		40
Ports		—		67		67		(6	)		61		(32	)		29			(2	)		27			—		60		60		(10	)		50		(33	)		17			—			17			—		43			43		(8	)		35		(20	)		15			(1	)		14
Ships		14		11		25		(3	)		22		(26	)		(4	)		—			(4	)		12		12		24		(2	)		22		(19	)		3			(2	)		1			16		9			25		(2	)		23		(25	)		(2	)		1			(1	)

		14		345		359		(47	)		312		(219	)		93			(7	)		86			12		304		316		(49	)		267		(176	)		91			(11	)		80			16		216			232		(37	)		195		(133	)		62			(9	)		53
Others		—		6		6		(6	)		—		(106	)		(106	)		—			(106	)		—		1		1		3			4		(45	)		(41	)		—			(41	)		4		(1	)		3		—			3		(41	)		(38	)		—			(38	)

		2,604		1,006		3,610		(165	)		3,445		(1,869	)		1,576			(171	)		1,405			2,708		1,013		3,721		(185	)		3,536		(1,629	)		1,907			(136	)		1,771			1,666		621			2,287		(114	)		2,173		(1,185	)		988			(102	)		886

F-18

Results by segment — before eliminations (Unaudited)


																															Nine month periods ended September 30,
	2005																					2004
				Non																					Non
	Ferrous			ferrous			Logistics			Aluminum			Others			Eliminations			Consolidated			Ferrous			ferrous			Logistics			Aluminum			Others			Eliminations			Consolidated
Gross revenues — Export		8,985			525			54			1,299			—			(3,875	)		6,988			5,478			265			65			1,180			—			(2,626	)		4,362
Gross revenues — Domestic		1,651			161			899			261			—			(301	)		2,671			1,027			118			637			159			—			(252	)		1,689
Cost and expenses		(6,944	)		(584	)		(624	)		(1,197	)		(79	)		4,176			(5,252	)		(4,674	)		(314	)		(428	)		(932	)		—			2,878			(3,470	)
Depreciation, depletion and amortization		(324	)		(44	)		(28	)		(40	)		—			—			(436	)		(207	)		(24	)		(24	)		(25	)		—			—			(280	)

Operating (loss) income		3,368			58			301			323			(79	)		—			3,971			1,624			45			250			382			—			—			2,301
Financial income		306			1			26			7			8			(256	)		92			146			—			11			9			2			(127	)		41
Financial expenses		(556	)		(4	)		(21	)		(35	)		1			256			(359	)		(405	)		(3	)		(13	)		(119	)		—			127			(413	)
Foreign exchange and monetary gains (losses), net		322			7			(16	)		153			(1	)		—			465			(212	)		1			—			(2	)		3			—			(210	)
Gain on sale of investments		—			—			—			—			126			—			126			—			—			—			—			314			—			314
Equity in results of affiliates and joint ventures and change in provision for losses on equity investments		307			—			39			51			150			—			547			115			—			22			52			174			—			363
Income taxes		(705	)		(1	)		(15	)		(101	)		(2	)		—			(824	)		(338	)		(4	)		(6	)		(1	)		(4	)		—			(353	)
Minority interests		(233	)		—			(1	)		(139	)		—			—			(373	)		(84	)		(2	)		—			(105	)		—			—			(191	)

Net income		2,809			61			313			259			203			—			3,645			846			37			264			216			489			—			1,852


Sales classified by geographic destination:
Export market
America, except United States		963			—			32			253			—			(575	)		673			528			—			46			140			—			(303	)		411
United States		348			3			3			163			—			(215	)		302			360			—			9			109			—			(223	)		255
Europe		3,645			257			19			522			—			(1,626	)		2,817			2,387			170			10			566			—			(1,206	)		1,927
Middle East/Africa/Oceania		556			92			—			15			—			(102	)		561			308			64			—			—			—			(93	)		279
Japan		890			32			—			292			—			(332	)		882			501			14			—			266			—			(213	)		568
China		1,898			55			—			38			—			(713	)		1,278			939			9			—			99			—			(396	)		651
Asia, other than Japan and China		685			86			—			16			—			(312	)		475			455			8			—			—			—			(192	)		271

		8,985			525			54			1,299			—			(3,875	)		6,988			5,478			265			65			1,180			—			(2,626	)		4,362
Domestic market		1,651			161			899			261			—			(301	)		2,671			1,027			118			637			159			—			(252	)		1,689

		10,636			686			953			1,560			—			(4,176	)		9,659			6,505			383			702			1,339			—			(2,878	)		6,051


Assets:

Property, plant and equipment, net		8,857			1,595			947			1,862			114			—			13,375			5,050			1,147			577			952			1			—			7,727
Additions to Property, plant and equipment		1,959			110			173			464			34			—			2,740			453			173			399			120			—			—			1,145
Investments in affiliated companies and joint ventures and other investments, net of provision for losses		629			—			97			226			692			—			1,644			387			—			70			219			377			—			1,053

Capital employed		7,441			1,167			989			1,117			16			—			10,730			4,557			913			565			819			31			—			6,885

F-19

Operating income by product — after eliminations (unaudited)


																																			Nine month periods ended September 30,
																					2005																							2004
	Revenues																									Revenues
							Value											Depreciation,												Value											Depreciation,
							added			Net		Cost and						depletion and			Operating									added			Net		Cost and						depletion and			Operating
	Export		Domestic		Total		tax			revenues		expenses			Net			amortization			income			Export		Domestic		Total		tax			revenues		expenses			Net			amortization			income
Ferrous
Iron ore		4,208		1,113		5,321		(177	)		5,144		(1,890	)		3,254			(291	)		2,963			2,264		598		2,862		(95	)		2,767		(1,242	)		1,525			(192	)		1,333
Pellets		1,167		272		1,439		(60	)		1,379		(917	)		462			(14	)		448			663		184		847		(31	)		816		(618	)		198			(5	)		193
Manganese		44		15		59		(5	)		54		(48	)		6			(1	)		5			30		10		40		(5	)		35		(31	)		4			—			4
Ferroalloys		261		138		399		(37	)		362		(265	)		97			(13	)		84			307		141		448		(36	)		412		(201	)		211			(10	)		201

		5,680		1,538		7,218		(279	)		6,939		(3,120	)		3,819			(319	)		3,500			3,264		933		4,197		(167	)		4,030		(2,092	)		1,938			(207	)		1,731

Non ferrous
Potash		—		108		108		(9	)		99		(61	)		38			(5	)		33			—		89		89		(14	)		75		(38	)		37			(4	)		33
Kaolin		108		18		126		(5	)		121		(114	)		7			(19	)		(12	)		104		15		119		(4	)		115		(66	)		49			(11	)		38
Copper		225		35		260		(5	)		255		(143	)		112			(26	)		86			80		14		94		(3	)		91		(44	)		47			(9	)		38

		333		161		494		(19	)		475		(318	)		157			(50	)		107			184		118		302		(21	)		281		(148	)		133			(24	)		109

Aluminum
Alumina		324		68		392		(23	)		369		(323	)		46			(19	)		27			308		9		317		(13	)		304		(258	)		46			(14	)		32
Aluminum		576		30		606		(4	)		602		(288	)		314			(21	)		293			519		20		539		(2	)		537		(175	)		362			(11	)		351
Bauxite		33		—		33		—			33		(31	)		2			—			2			40		—		40		—			40		(35	)		5			—			5

		933		98		1,031		(27	)		1,004		(642	)		362			(40	)		322			867		29		896		(15	)		881		(468	)		413			(25	)		388
Logistics
Railroads		—		658		658		(102	)		556		(376	)		180			(22	)		158			—		450		450		(71	)		379		(235	)		144			(21	)		123
Ports		—		173		173		(25	)		148		(91	)		57			(3	)		54			—		126		126		(21	)		105		(64	)		41			(3	)		38
Ships		41		35		76		(7	)		69		(70	)		(1	)		(2	)		(3	)		37		30		67		(5	)		62		(77	)		(15	)		—			(15	)

		41		866		907		(134	)		773		(537	)		236			(27	)		209			37		606		643		(97	)		546		(376	)		170			(24	)		146
Others		1		8		9		(6	)		3		(170	)		(167	)		—			(167	)		10		3		13		(2	)		11		(84	)		(73	)		—			(73	)

		6,988		2,671		9,659		(465	)		9,194		(4,787	)		4,407			(436	)		3,971			4,362		1,689		6,051		(302	)		5,749		(3,168	)		2,581			(280	)		2,301

F-20

12 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 instruments. 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 change in fair value of derivative financial instruments are as follows (the quarterly information is unaudited):


	Interest
	rates
	(LIBOR)			Currencies			Gold			Alumina			Aluminum			Total
Unrealized gains (losses) at july 1, 2005		(9	)		2			(30	)		(22	)		(54	)		(113	)
Financial settlement		—			(1	)		3			7			7			16
Unrealized gains (losses) in the period		2			—			(8	)		(13	)		(47	)		(66	)
Effect of exchange rate changes		—			—			(2	)		(2	)		(5	)		(9	)

Unrealized gains (losses) at September 30, 2005		(7	)		1			(37	)		(30	)		(99	)		(172	)


Unrealized gains (losses) at April 1, 2005		(12	)		3			(31	)		(50	)		(113	)		(203	)
Financial settlement		4			—			2			9			9			24
Unrealized gains (losses) in the period		—			(1	)		3			24			59			85
Effect of exchange rate changes		(1	)		—			(4	)		(5	)		(9	)		(19	)

Unrealized gains (losses) at June 30, 2005		(9	)		2			(30	)		(22	)		(54	)		(113	)


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 January 1, 2005		(17	)		4			(37	)		(55	)		(127	)		(232	)
Financial settlement		8			(1	)		7			23			26			63
Unrealized gains (losses) in the period		4			(2	)		(2	)		8			16			24
Effect of exchange rate changes		(2	)		—			(5	)		(6	)		(14	)		(27	)

Unrealized gains (losses) at September 30, 2005		(7	)		1			(37	)		(30	)		(99	)		(172	)


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) in the period are included in our statement of income under the caption of financial expenses and foreign exchange on liabilities.

F-21

Final maturity dates for the above instruments are as follows:


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

13 Subsequent events

(a)

On October 26, 2005, we issued notes of US$ 300 due 2034, bearing interest of 7.65% per year in the same form as the US$ 500, 8.25% guaranteed notes issued on January 15, 2004.

(b)

On October 14, 2005, we approved the payment of the second installment of the 2005 minimum dividend to stockholders of US$ 500 as well as an additional dividend of US$ 300. The total payment of US$ 800, equivalent to US$ 0.69 per outstanding share was paid on October 31, 2005. The value correspondig to US$ 0.30 per common or preferred share outstanding was paid in the form of interest attributed to stockholders and the remaining US$ 0.39 per share in from of dividends.

* * *

F-22

SIGNATURES

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


	COMPANHIA VALE DO RIO DOCE
	(Registrant)

Date: November 15, 2005
	By:	/s/ Fabio de Oliveira Barbosa
		Fabio de Oliveira Barbosa
		Chief Financial Officer