Edgar Filing: Companhia Vale do Rio Doce

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

March 2007

Companhia Vale do Rio Doce

Avenida Graça Aranha, No. 26 20030-900 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 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

BRGAAP Financial Pages

A - Financial Statements

1 - Balance Sheet

2 - Statement of Income

3 - Statement of Changes in Stockholders’ Equity

4 - Statement of Changes in Financial Position

5 - Statement of Cash Flows

6 - Statement of Value Added

7 - Notes to the Financial Statements at December 31, 2006 and 2005

7.1 - Operations

7.2 - Presentation of Financial Statements

7.3 - Accounting Pronouncements Recently-issued by Comissão de Valores Mobiliários

7.4 - Principles and Practices of Consolidation

7.5 - Significant Accounting Policies

7.6 - Independent Auditors Policy

7.7 - Stock Merger — CAEMI

7.8 - Inco acquisition

7.9 - Other acquisitions and disposals

7.10 - Cash and Cash Equivalents

7.11 - Accounts Receivable

7.12 - Related Parties

7.13 - Inventories

7.14 - Taxes to recover or offset

7.15 - Deferred Income Tax and Social Contribution

7.16 - Investments — Consolidated and Parent Company

7.17 - Intangible

7.18 - Property, Plant and Equipment

7.19 - Loans and Financing

7.20 - Contingent Liabilities

7.21 - Provision for asset retirement obligations

7.22 - Pension Plan

7.23 - Paid-up Capital

7.24 - ADR Program — American Depositary Receipts

7.25 - Treasury Stock

7.26 - Remuneration of Stockholders

7.27 - Financial Result

7.28 - Financial Instruments — Derivatives

7.29 - Selling, Administrative , Other Operating Expenses and Non Operating Income

7.30 - Concessions and Leases

7.31 - Effects on the Statements if Price-Level Restatement were Applied (unaudited)

7.32 - Insurance

7.33 - Profit Sharing Plan

7.34 - Information by segment and geographical information

7.35 - Social Report

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

9 - Report of the Independent Accountants

10 - Opinion of the Fiscal Council on the Annual Report and Financial Statements at December 31, 2006

11 - Opinion of the Board of Directors on the Annual Report and Financial Statements at December 31, 2006

B - Additional Information

12 - Cash generation (Unaudited)

13 - Board of Directors, Fiscal Council, Advisory Committees and Executive Officers

Signature Page

A-Financial Statements

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

1- Balance Sheet


Years ended December 31		In millions of reais


			Consolidated				Parent Company
	Notes		2006		2005		2006		2005
Assets
Current assets
Cash and cash equivalents		7.10		9,778		2,703		203		131
Accounts receivable from customers		7.11		7,892		4,183		4,912		2,038
Related parties		7.12		61		134		1,056		778
Inventories		7.13		6,369		3,235		1,105		1,127
Taxes to recover or offset		7.14		1,003		986		463		492
Deferred income tax and social contribution		7.15		885		428		404		334
Other				1,181		902		379		306

				27,169		12,571		8,522		5,206

Non-current assets
Long-term assets
Related parties		7.12		11		6		381		459
Loans and financing				234		143		110		107
Deferred income tax and social contribution		7.15		2,759		1,043		481		421
Judicial deposits				841		786		506		459
Taxes to recover or offset		7.14		809		314		220		170
Assets available for Sales				53		54		—		—
Advances to energy suppliers				945		727		—		—
Prepaid expenses				811		90		116		—
Outros				228		191		72		10

				6,691		3,354		1,886		1,626

Investments		7.16		1,856		1,396		54,572		16,415
Intangible		7.17		9,532		1,418		9,507		1,419
Property, plant and equipment		7.18		77,611		33,768		25,665		20,761
Deferred charges				150		206		—		—

				89,149		36,788		89,744		38,595

				123,009		52,713		100,152		45,427

Liabilities and stockholders’ equity
Current liabilities
Short-term debt		7.19		2,035		517		1,511		—
Current portion of long-term debt		7.19		1,626		2,940		515		882
Payable to suppliers and contractors				5,164		2,684		1,690		1,768
Related parties		7.12		30		81		4,502		3,609
Payroll and related charges				1,001		542		494		424
Pension Plan		7.22		230		70		78		70
Proposed dividends and interest on stockholders’ equity		7.25		3,189		2,750		3,189		2,750
Taxes and contributions		7.14 e 7.15		2,167		909		79		68
Other				1,202		1,174		426		490

				16,644		11,667		12,484		10,061

Non-current liabilities
Long-term liabilities
Long-term debt		7.19		46,004		9,066		26,013		2,146
Related parties		7.12		1		3		18,956		5,701
Provisions for contingencies		7.20		2,363		2,302		1,508		1,932
Deferred income tax and social contribution		7.15		4,319		—		—		—
Pension Plan		7.22		4,118		563		569		563
Provision for asset retirement obligations		7.21		1,476		549		619		336
Provisions for derivatives		7.28		1,566		610		69		63
Other				1,412		941		836		573

				61,259		14,034		48,570		11,314

Deferred income				7		9		—		—

Minority interest				6,001		2,951		—		—

Stockholders’ equity
Paid-up capital		7.23		19,492		14,000		19,492		14,000
Revenue reserves				19,606		10,052		19,606		10,052

				39,098		24,052		39,098		24,052

				123,009		52,713		100,152		45,427

The notes and attachment I are an integral part of the financial statements

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

2- Statement of Income


Years ended December 31		In millions of reais


			Consolidated															Parent Company
			Quarter (Unaudited)									Accumulated						Accumulated
	Notes		4Q/06			3Q/06			4Q/05			2006			2005			2006			2005
Gross revenues
Ores and metals				13,961			8,771			7,134			36,135			26,650			17,817			16,053
Transport services				849			956			781			3,405			3,291			1,864			1,801
Sales of aluminum-related products				1,496			1,440			933			5,533			3,857			102			189
Sales of steel products				333			414			338			1,478			1,509			—			—
Other products and services				53			61			18			195			43			91			55

				16,692			11,642			9,204			46,746			35,350			19,874			18,098
Value Added taxes				(370	)		(417	)		(288	)		(1,454	)		(1,357	)		(1,051	)		(1,004	)

Net operating revenues				16,322			11,225			8,916			45,292			33,993			18,823			17,094

Cost of products and services
Ores and metals				(5,872	)		(3,292	)		(2,945	)		(14,578	)		(10,585	)		(9,776	)		(8,833	)
Transport services				(441	)		(450	)		(535	)		(1,770	)		(1,977	)		(718	)		(637	)
Aluminum-related products				(829	)		(821	)		(626	)		(3,013	)		(2,361	)		(75	)		(111	)
Steel products				(310	)		(334	)		(295	)		(1,231	)		(1,364	)		—			—
Other products and services				(72	)		(39	)		(6	)		(164	)		(24	)		(62	)		(22	)

				(7,524	)		(4,936	)		(4,407	)		(20,756	)		(16,311	)		(10,631	)		(9,603	)

Gross profit				8,798			6,289			4,509			24,536			17,682			8,192			7,491
Gross margin				53.9	%		56.0	%		50.6	%		54.2	%		52.0	%		43.5	%		43.8	%
Operating expenses
Selling and Administrative		7.29		(602	)		(402	)		(436	)		(1,952	)		(1,620	)		(881	)		(688	)
Research and development				(375	)		(289	)		(209	)		(1,042	)		(672	)		(590	)		(415	)
Other operating expenses		7.29		(741	)		(348	)		(205	)		(1,453	)		(834	)		(856	)		(235	)

				(1,718	)		(1,039	)		(850	)		(4,447	)		(3,126	)		(2,327	)		(1,338	)

Operating profit before financial results and results of equity investments				7,080			5,250			3,659			20,089			14,556			5,865			6,153

Results of equity investments
Equity in results of affiliates and joint ventures		7.16		118			119			136			389			498			10,708			6,875
Provision for losses		7.16		—			—			—			—			—			(60	)		(308	)
Exchange variation in stockholders ´equity of companies abroad		7.16		—			(2	)		20			(25	)		(6	)		(760	)		(878	)
Amortization of goodwill		7.17		(262	)		(131	)		(51	)		(563	)		(223	)		(563	)		(223	)

		7.29		(144	)		(14	)		105			(199	)		269			9,325			5,466
Financial results, net		7.28		(771	)		(249	)		(764	)		(1,745	)		(1,276	)		(1,065	)		81
Non-operating income				(1,006	)		34			—			(215	)		298			278			—

Income before income tax and social contribution				5,159			5,021			3,000			17,930			13,847			14,403			11,700
Income tax and social contribution		7.15		(1,420	)		(792	)		(153	)		(3,390	)		(2,368	)		(972	)		(1,257	)

Income before minority interests				3,739			4,229			2,847			14,540			11,479			13,431			10,443
Minority interests				(371	)		(256	)		(210	)		(1,109	)		(1,036	)		—			—

Net income for the year				3,368			3,973			2,637			13,431			10,443			13,431			10,443

Number of shares outstanding at the end of the period (in thousands)				2,416,194			2,416,194			2,303,040			2,416,194			2,303,040			2,416,194			2,303,040

Net earnings per share outstanding at the end of the period (R$)				1.39			1.64			1.15			5.56			4.54			5.56			4.54

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

3- Statement of Changes in Stockholders’ Equity


Years ended December 31	In millions of reais
				Revenue reserves
		Paid-up		Expansion/			Treasury						Unrealized						Fiscal
	Notes	capital		Investments			stock			Depletion			income			Legal			incentives			Retained earnings			Total
December 31, 2004			7,300		8,206			(131	)		1,004			346			1,404			41			—			18,170

Net income for the year			—		—			—			—			—			—			—			10,443			10,443
Capitalization of reserves			6,700		(5,129	)		—			(1,004	)		—			(526	)		(41	)		—			—
Realization of reserves			—		—			—			—			(109	)		—			—			109			—
Interim interest on stockholders’ equity			—		—			—			—			—			—			—			(783	)		(783	)
Interim dividends			—		—			—			—			—			—			—			(1,028	)		(1,028	)
Stockholder’s remuneration proposed			—		—			—			—			—			—			—			(2,750	)		(2,750	)
Appropriation to revenue reserves			—		5,386			—			—			—			522			83			(5,991	)		—

December 31, 2005			14,000		8,463			(131	)		—			237			1,400			83			—			24,052

Capital Increase			5,492		—			—			—			—			—			—			—			5,492
Net income for the year			—		—			—			—			—			—			—			13,431			13,431
Realization of reserves			—		—			—			—			(114	)		—			—			114			—
Treasury stock			—		—			(659	)		—			—			—			—			—			(659	)
Appropriations:
Interim dividends			—		—			—			—			—			—			—			(29	)		(29	)
Stockholder’s remuneration proposed			—		—			—			—			—			—			—			(3,189	)		(3,189	)
Appropriation to revenue reserves			—		9,645			—			—			—			672			10			(10,327	)		—

December 31, 2006			19,492		18,108			(790	)		—			123			2,072			93			—			39,098

The notes and attachment I are an integral part of the financial statements

(A free translation of the original in Portuguese relating to the financial statements prepared in accordance with the requirements of Brazilian Corporate Law)

4- Statement of Changes in Financial Position


Years ended December 31	In millions of *reais*
	Consolidated						Parent Company
	2006			2005			2006			2005
Funds were provided by:
Net income for the year		13,431			10,443			13,431			10,443
Values not affecting working capital:
Result of equity investments		199			(269	)		(9,325	)		(5,466	)
Dividends/interest on stockholders’ equity		140			151			2,454			1,441
Depreciation, amortization and depletion		2,203			1,615			1,080			869
Long term deferred income tax and social contribution		61			(442	)		(69	)		102
Investments sales		1,489			298			770			—
Result on sale of assets		(1,212	)		(298	)		(278	)		—
Net monetary and exchange rate variations on long-term assets and liabilities		(484	)		(1,035	)		(565	)		(586	)
Disposal of property, plant and equipment		284			123			118			20
Amortization of goodwill in the cost of products sold		327			379			327			379
Net unrealized derivative losses		315			416			(14	)		31
Minority interests		1,109			1,036			—			—
Others		14			706			(347	)		729

Total funds from operations		17,876			13,123			7,582			7,962
Loans to related parties, transferred to current assets		12			234			45			138
Loans and financing obtained		49,388			4,489			38,035			813
Loans from related parties		31			11			14,840			3,392
Others		673			444			511			89

Total funds provided		67,980			18,301			61,013			12,394

Funds were used for:
Long-term debt transferred to current liabilities		15,860			3,187			15,025			2,180
Related parties		382			13			92			283
Additions to permanent assets		9,433			9,048			6,099			6,366
Additions to Investments		315			272			34,647			1,219
Dividends/interest on stockholders’ equity		3,218			4,561			3,218			4,561
Guarantees and deposits		190			217			129			107
Advances to energy suppliers		217			468			—			—
Others		507			516			910			369

Total funds used		30,122			18,282			60,120			15,085

Increase (decrease) in working capital		37,858			19			893			(2,691	)

Changes in working capital are as follows:
Initial working capital of new investments consolidated		28,237			1,621			—			—
Current assets:
At the end of the year		27,169			12,571			8,522			5,206
At the beginning of the year		12,571			11,832			5,206			4,629

		14,598			739			3,316			577

Current liabilities:
At the end of the year		16,644			11,667			12,484			10,061
At the beginning of the year		11,667			9,326			10,061			6,793

		4,977			2,341			2,423			3,268

Increase (decrease) in working capital		37,858			19			893			(2,691	)

The notes and attachment I are an integral part of the financial statements

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

5- Statement of Cash Flows


Years ended December 31	In millions of reais
	Quarter (Unaudited)									Consolidated Accumulated						Parent Company Accumulated
	4Q/06			3Q/06			4Q/05			2006			2005			2006			2005
Cash flows from operating activities:
Net income for the period		3,368			3,973			2,637			13,431			10,443			13,431			10,443
Adjustments to reconcile net income for the period with cash provided by operating activities:
Results of equity investments		144			14			(105	)		199			(269	)		(9,325	)		(5,466	)
Sale of assets		(421	)		(34	)		—			(1,212	)		(298	)		(278	)		—
Depreciation, amortization and depletion		827			510			446			2,203			1,615			1,080			869
Deferred income tax and social contribution		81			(258	)		(201	)		(158	)		(545	)		(139	)		114
Financial expenses and monetary and exchange rate variations on assets and liabilities, net		80			251			437			(193	)		(919	)		(385	)		(542	)
Minority interest		371			256			210			1,109			1,036			—			—
Disposal of property, plant and equipment		162			43			46			284			123			118			20
Amortization of goodwill in the cost of products sold		47			94			92			327			379			327			379
Net losses (gains) on derivatives		214			(162	)		252			315			416			(14	)		31
Dividends/interest on stockholders’ equity received		4			41			4			140			151			2,134			1,554
Other		80			(139	)		(22	)		(57	)		(6	)		39			7

		4,957			4,589			3,796			16,388			12,126			6,988			7,409

Decrease (increase) in assets:
Accounts receivable		264			(681	)		(376	)		(821	)		(1,005	)		(2,877	)		(188	)
Inventories		(1	)		(371	)		(21	)		(470	)		(228	)		159			(193	)
Advances to energy suppliers		(17	)		(66	)		(142	)		(217	)		(468	)		—			—
Other		(441	)		(269	)		328			(868	)		(931	)		(346	)		(488	)

		(195	)		(1,387	)		(211	)		(2,376	)		(2,632	)		(3,064	)		(869	)

Increase (decrease) in liabilities:
Suppliers and contractors		230			240			365			(130	)		401			(78	)		252
Payroll and related charges and Other		(159	)		108			93			(183	)		84			70			77
Taxes and contributions		(212	)		395			(980	)		122			591			(11	)		277
Other		242			299			217			108			(102	)		(269	)		(65	)

		101			1,042			(305	)		(83	)		974			(288	)		541

Net cash provided by operating activities		4,863			4,244			3,280			13,929			10,468			3,636			7,081

Cash flows from investing activities:
Loans and advances receivable		(261	)		94			66			(322	)		123			155			(202	)
Guarantees and deposits		87			(131	)		(43	)		(190	)		(217	)		(129	)		(107	)
Additions to investments		(80	)		(122	)		(23	)		(315	)		(272	)		(34,647	)		(1,219	)
Additions to property, plant and equipment		(4,191	)		(1,777	)		(3,099	)		(10,102	)		(9,245	)		(6,144	)		(6,461	)
Proceeds from disposal of property, plant and equipment/investments		608			43			37			1,670			348			888			49
Net cash used in acquisitions and increase of funds to subsidiaries, net of the cash to subsidiary		(28,211	)		(26	)		(1,621	)		(28,237	)		(1,621	)		2			—

Net cash used in investing activities		(32,048	)		(1,919	)		(4,683	)		(37,496	)		(10,884	)		(39,875	)		(7,940	)

Cash flows from financing activities:
Short-term debt additions		2,767			3,080			—			11,475			2,461			7,053			3,071
Short-term debt repayments		(1,828	)		(2,648	)		(145	)		(10,004	)		(2,350	)		(5,638	)		(2,287	)
Long-term debt		45,855			445			3,406			49,419			4,500			52,783			4,205
Repayments:
Related parties		—			—			—			—			—			—			(266	)
Financial institutions		(14,949	)		(477	)		(334	)		(16,615	)		(2,319	)		(14,449	)		(949	)
Interest on stockholders’ equity paid to stockholders		(1,462	)		(79	)		(1,810	)		(2,974	)		(3,090	)		(2,779	)		(3,090	)
Treasure stock		—			(605	)		—			(659	)		—			(659	)		—

Net cash provided by (used in) financing activities		30,383			(284	)		1,117			30,642			(798	)		36,311			684

Increase (decrease) in cash and cash equivalents		3,198			2,041			(286	)		7,075			(1,214	)		72			(175	)
Cash and cash equivalents, beginning of the period		6,580			4,539			2,989			2,703			3,917			131			306

Cash and cash equivalents, end of the period		9,778			6,580			2,703			9,778			2,703			203			131

Cash paid during the period for:
Short-term interest		(14	)		(11	)		(18	)		(41	)		(49	)		(18	)		(11	)
Long-term interest		(562	)		(326	)		(135	)		(1,271	)		(686	)		(903	)		(284	)
Income tax and social contribution		(151	)		(580	)		(173	)		(1,264	)		(1,231	)		(912	)		(892	)
Non-cash transactions:
Additions to property, plant and equipment — interest capitalization		(7	)		100			(123	)		(38	)		372			(46	)		96
Transfer of advance for future capital increase to investments		—			—			—			—			—			(282	)		(1,009	)
Compensated income tax and social contribution		(81	)		(195	)		(315	)		(436	)		(483	)		(108	)		(261	)

The notes and attachment I are an integral part of the financial statements

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

6- STATEMENT OF VALUE ADDED


Years ended December 31	In millions of *reais*
	Consolidated												Parent Company
	2006			%			2005			%			2006			%			2005			%
Generation of Value Added Gross revenue		46,746			100			35,350			100			19,874			100			18,098			100
Less: Acquisition of products		(3,308	)		(7	)		(2,239	)		(6	)		(1,901	)		(10	)		(1,897	)		(10	)
Outsourced services		(4,556	)		(10	)		(3,784	)		(11	)		(2,925	)		(15	)		(2,356	)		(13	)
Materials		(3,524	)		(8	)		(3,125	)		(9	)		(1,945	)		(10	)		(1,891	)		(10	)
Fuel oil and gas		(2,361	)		(5	)		(1,829	)		(5	)		(951	)		(5	)		(868	)		(5	)
Research and development, selling and administrative		(1,642	)		(4	)		(1,142	)		(3	)		(669	)		(3	)		(491	)		(3	)
Other operating expenses		(3,672	)		(8	)		(2,524	)		(8	)		(962	)		(5	)		(706	)		(4	)

Gross Value Added		27,683			58			20,707			58			10,521			52			9,889			55
Depreciation, amortization and depletion		(2,530	)		(5	)		(1,994	)		(6	)		(1,407	)		(7	)		(1,248	)		(7	)

Net Value Added		25,153			53			18,713			52			9,114			45			8,641			48
Received from third parties
Financial revenue (a)		701			1			(319	)		(1	)		470			2			175			1
Results of equity investments		(199	)		—			269			1			9,325			47			5,466			30

Total Value Added		25,655			54			18,663			52			18,909			94			14,282			79

Distribution of Value Added
Employees		3,311			13			1,884			10			1,397			7			1,054			7
Government		5,693			22			4,510			24			2,799			15			2,792			20
Third parties’ capital (interest and monetary and exchange variances, net) (b)		2,111			8			790			4			1,282			7			(7	)		—
Stockholders’ remuneration		3,218			13			4,561			24			3,218			17			4,561			32
Minority interests		1,109			4			1,036			6			—			—			—			—
Retained earnings		10,213			40			5,882			32			10,213			54			5,882			41

Total Value added distributed		25,655			100			18,663			100			18,909			100			14,282			100

The notes and attachment I are an integral part of the financial statements


(a)		Includes monetary and exchange rate variation losses from assets;

(b)		Includes monetary and exchange rate variations gains from liabilities.

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

7- Notes to the Financial Statements at December 31, 2006 and 2005

Expressed In millions of reais

7.1- Operations

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

7.2- Presentation of Financial Statements

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

As part of the financial statements, the Company present as complemental information the calculation of the earnings before financing results , equity results, income tax and social contribution, depreciation and amortization — EBITDA

Although the EBITDA, as defined before, does not offer valuation for operational cash flow for Brazilian accounting principles, is often used by financial analysts on valuation of our business and Management uses this indicator to measure our operational performance.

Some figures related to the financial statements as of 2005 were reclassified to improve the comparability.

7.3- Accounting Pronouncements Recently-issued by Comissão de Valores Mobiliários

On 06/19/2006 the CVM disclosed Deliberation No. 505, that became compulsory the application of NPC 10 (Rules and Accounting Procedures) of IBRACON that settle about subsequent events to balance sheet date and the information that should be disclosed until the date that of the approval of the financial statements by the executive board.

On the same date, the CVM disclosed Deliberation No. 506, that became compulsory the application of NPC 12 of IBRACON that establish the criteria to the account treatment for changes on accounting estimates and amendment of error.

On 10/03/2005 the CVM disclosed the Deliberation No. 488, that approved the pronouncement NPC 27 of IBRACON about the presentation and disclosure of financial statements. The obligation was extent to fiscal years beginning after 12/31/2005 through of Deliberation No º 496 from 01/03/06.

At the same date, the CVM disclosed Deliberation No. 489, that approved pronouncement NPC 22 of IBRACON about provisions, liabilities, contingent assets and contingent liabilities.

The Company has already been following the principles in the above-mentioned Deliberations.

7.4- Principles and Practices of Consolidation

(a)		The consolidated financial statements show the balances of assets and liabilities on December 31, 2006 and 2005 and the operations of the Parent Company, its direct and indirect subsidiaries and its jointly-controlled companies for the years then ended;

(b)		Intercompany balances and the Parent Company’s investments in its direct and indirect subsidiaries and jointly-controlled companies were eliminated in the consolidation. Minority interests are shown separately on the balance sheet and statement of income;

(c)		In the case of investments in companies in which the control is shared with other stockholders, the components of assets and liabilities and revenues and expenses are included in the consolidated financial statements in proportion to the participation of the Parent Company in the capital of each investee;

(d)		The principal figures of the subsidiaries and jointly-controlled companies included in the consolidation are presented in Attachment I; and

(e)		The company participates in several jointly-owned hydroelectric plants, that are recorded as property, plant and equipment. The income from the jointly-owned hydroelectric plants, generated by sale of the excess of production are negotiated at Mercado Atacadista de

Energia and are presented in the results, net of expenses. Through its affiliates the company also has its own hydroelectric that are used in nickel business recorded also in property, plant and equipment.

7.5- Significant Accounting Policies

(a)		The Company adopts the accrual basis of accounting;

(b)		The preparation of financial statements requires management to make estimates to record some assets, liabilities and transactions. As a result, the financial statements of the company include some estimatives for useful lives of property, plant and equipment, provisions necessary for assets, contingent liabilities, operational provisions and other similar evaluations. Actual results could differ from those estimates;

(c)		Assets and liabilities that are realizable or due more than twelve months after the financial statements date are classified as non-current;

(d)		Revenues are recognized in the result when all the risks and benefits of the product or service are transferred to the customer. The income is not recognized when there is significant uncertainty of its realization;

(e)		The accounts receivable are recorded and states in the balance sheet by in nominal value increased by monetary or exchange variations, when applicable, reduced by provisions to cover extraordinary loss on its realization;

		The allowance for doubtful accounts is set up at an amount considered sufficient to cover eventual loss on the realization of these credits. The estimated value of the allowance for doubtful accounts can be modified based on the expectative of the management about the possibility to recover the amounts or changes in the financial situation of the customers. Generally the company classifies as allowance for doubtful accounts credits 180 days overdue, except in special cases;

(f)		Marketable securities, classified as cash and cash equivalents are represented by less than 90 days applications and are stated at cost plus accrued income earned to the financial statements date, limited to the market value;

(g)		Inventories are stated at average purchase or production cost, and imports in transit at the cost of each item, not exceeding market or realizable value;

(h)		Assets and liabilities in foreign currencies are translated at exchange rates in effect at the financial statements date, and those in local currency, when applicable, are restated based on contractual indices;

(i)		Amounts given in advance to Centrais Elétricas do Norte do Brasil S.A. — Eletronorte, due to long term contract to supply of energy, are classified as “Advances to energy suppliers”, in long-term receivables;

(j)		Investments in subsidiaries, jointly-controlled companies and affiliated companies are accounted for by the equity method, based on the stockholders’ equity of the investees, and when applicable, increased/decreased by goodwill/negative goodwill to be amortized and provision for losses. Other investments are recorded at cost, less provision for losses when applicable. At consolidated the exchange rate effect over stockholders equity from investees abroad is classified as monetary and exchange rate variation included as financial result, net;

(k)		Property, plant and equipment, including interest incurred during the construction period, are recorded at historical cost (increased by monetary restatement up to 1995) and depreciated on the straight-line method, based on the estimated useful lives of the assets. Depletion of mineral reserves is based on the ratio between effective production and the total probable and proven reserves;

(l)		Research and development costs are incurred as operational expenses until the proof of its economical feasibility to exploit commercially a mine. After this proof, the costs are capitalized as part of the costs of building and constructing of mine;

(m)		During the development of a mine, stripping costs registered are capitalized as part of the depreciable cost of building and developing the mine. Post-production stripping costs are recorded as production costs;

(n)		Pre-operating costs except for financial charges capitalized as mentioned in (k) , are deferred and amortized over a period of 10 years and refer basically to expansion projects of Alunorte and Albras;

(o)		The assets and liabilities of deferred taxes are based: (i) on the temporary differences between the booked value and the fiscal bases of our assets and liabilities; (ii) the tax loss of income tax; (iii) on the negative basis on the calculation of social contribution, based on the assumption of future taxable profits. If the company generate future loss, or if it is not able to generate future profit, or if there is a significantly change in the effective tax rates or in the necessary time to theses deferred taxes been deductible or taxable, the management may considered to be necessary to constitute a provison for losses of these deferred assets;

(p)		The derivatives contracts used to manage the associate risks on the variation of exchange rates, interest rates are recorded on the accrual basis of accounting and the gain and loss are recorded in financial income or expenses;

(q)		The interest attributed to stockholders received or paid/booked are recorded as financial income and expenses, respectively. For presentation purposes as the nature is similar to dividends, it was reclassified in the investments accounts and retained earnings respectively. The interest

		paid/booked are calculated in accordance with the limits established by Law 9249/95 based on the application of the long-term interest rate- TJLP on the stockholders equity and are paid as a substitute or complement of minimum dividend defined on the articles of association of the Company;

(r)		The Company follows the accounting practices laid down by Deliberation CVM 371/00 related to the recognition of liabilities and results from actuarial valuation of employees ´ pension plan;

(s)		The expenditures of the environmental impact caused by the activities of the Company are booked as asset retirement obligations;

(t)		The financial statements of the Parent Company reflect the Board of Directors’ proposal for appropriation of the net income for the year, on the assumed of the approval of the Annual General Meeting of Stockholder’s;

(u)		The approval of the Financial Statements by the Executive Ofiicers was on 03/05/07. There were no events subsequent to the Balance Sheet date that should be reported; and

(v)		According to the Deliberação CVM No. 207/96, the Company decided, in accordance with the fiscal rules, to record the interest on stockholders equity against the account “Financial Expenses”, and revert to a specific account, and not being presented in the statement of income, with the objective to have no impact on the net income, except for by the fiscal impact recognized on the “Income tax and social contribution”.

7.6- Independent Auditors Policy

The Company developed and formalized internal rules and procedures of pre-approval of the services contracted with its external auditors, for the purpose avoiding the conflict of interest, loss of independence or objective of its independent external auditors.

The policy concerning independent auditors in relation to non-audit services is based on the maintenance of their independence. According to best practices of corporate governance, all services rendered by independent auditors are pre-approved by the Fiscal Council.

According to CVM rule 381/2003, the services contracted with the actual auditors of the Company, Deloitte Touche Tohmatsu Auditores Independentes, during 2006 by CVRD and its direct and indirect subsidiaries and its jointly-controlled companies are as follows:


	2006
Audit Fees		2.1
Audit — Related Fees		0.4
Tax Fees		0.4
All other Fees		0.1

Total Fees		3.0

7.7- Stock Merger — CAEMI

At the Extraordinary General Shareholders Meeting held on March 31, 2006 the merger of outstanding shares issued by Caemi Mineração e Metalurgia — Caemi into the assets of CVRD, was approved with the issuance by CVRD of 64,151,361 (128,302,722 after the split) preferred shares class A.

CVRD held 100% of the common shares of Caemi and 40.06% of the preferred shares, totaling 60.23% of its Capital, after the merger, became wholly owned subsidiary of CVRD.

If CVRD owned 100% of Caemi shares since 01/01/2005 the results would be affected only in the expense of minoritary interest with the increase of R$ 117 representing the effect of the additional acquisition of 39.77% until march 2006 and R$ 699 in 2005.

7.8- Inco acquisition

In October 23, 2006 CVRD acquired Inco Limited (Inco), a leading Canadian-based nickel company, and the world’s largest nickel possessing capacity and reserve base, for about R$ 28 billions, corresponding to 174,623,019 common shares for Cdn$ 86.00 each share, representing 75.66% of its outstanding shares. Until December 31, 2006 CVRD had acquired 196,078,276 shares by approximately R$ 32 billion, representing 86.57% of Inco’s capital. Due to the issuing of new shares related to the convertible debt, on December 31, the company participation is 87.73% of the outstanding shares.

The difference between the acquisition value and the stockholder’s equity was R$ 24,072. Part of this value, (R$ 19,331) was allocated to property, plan and equipment based on the difference of the market value and the booked value of Inco’s assets and, the remaining R$ 4,741 was

classified as goodwill based on the expectance of future results. Of this amount, R$ 119 were amortized until 12/31/06 so the amount to be amortized, net from exchange variation, reaches R$ 4,624. The valuation was made based on internal studies are being complemented with the assistance of external specialists, so are subject to changes that may be significant.

On January 3, 2007 the special meeting of shareholders of Inco, approved the amalgamation of Inco with Itabira Canada Inc. (Itabira Canada), our wholly-owned subsidiary. Pursuant to the amalgamation CVRD owns 99.08% of Inco that changed its name to “CVRD Inco Limited” (CVRD Inco).

In December 2006 several transactions were concluded to take out the bridge loan aiming to extend the average debt maturity, lengthening it to a level near 10 years, as described in Note 7.19 (h).

To improve the comparability, the pro forma information considers that the acquisition of Inco as if it was completed at the beginning of 2005.

Results — Inco Consolidation


										Consolidated
	2006									2005
	CVRD			INCO			Total			CVRD			INCO			Total
Net operating revenues		39,267			17,719			56,986			33,993			10,997			44,990
Cost of products and services		(17,996	)		(9,613	)		(27,609	)		(16,311	)		(7,252	)		(23,563	)

Gross profit		21,271			8,106			29,377			17,682			3,745			21,427
Operating expenses		(4,098	)		(1,136	)		(5,234	)		(3,126	)		(828	)		(3,954	)

Operating profit before financial results and results of equity investments		17,173			6,970			24,143			14,556			2,917			17,473

Results of equity investments		(82	)		(1,013	)		(1,095	)		269			(1,108	)		(839	)
Financial results, net		(2,341	)		648			(1,693	)		(1,276	)		(377	)		(1,653	)
Non-operating income		1,212			(1,111	)		101			298			(61	)		237

Income before income tax and social contribution		15,962			5,494			21,456			13,847			1,371			15,218
Income tax and social contribution		(2,592	)		(2,502	)		(5,094	)		(2,368	)		(920	)		(3,288	)

Income before minority interests		13,370			2,992			16,362			11,479			451			11,930
Minority interests		(806	)		(796	)		(1,602	)		(1,036	)		(336	)		(1,372	)

Net income for the year		12,564			2,196			14,760			10,443			115			10,558

7.9- Other acquisitions and disposals

In February 2007, CVRD entered into a purchase and sale agreement to acquire 100% of AMCI Holdings Australia Pty — AMCI HÁ, a private company held in Australia, which operates and controls coal assets through joint ventures, for AUD 835 million (approximately R$ 1,381 million).

In December 2006, CVRD sold its total interest in Siderar — S.A.I.C, corresponding to 4.85%, to Ternium S.A. for R$ 230 with a net gain of R$ 197.

In November, 2006 CVRD sold Usinas Siderúrgicas de Minas Gerais S/A — Usiminas 5,362,928 common shares to Nippon Steel, Votorantim Participações S/A, and Camargo Correa S/A, totaling, by R$ 379, with a net gain of R$ 135. CVRD maintained the necessary shares to take part of the control group and still have 13,839,192 Usiminas common shares that will be sold through a public offer.

During 2006 third quarter CVRD sold 1,361,100 shares of Metalugica Gerdau S.A — Gerdau for R$ 40 generating a gain of R$ 34. In the fourth quarter, CVRD sold the 3,379,825 remnants shares by R$ 104 which generated a gain of approximately R$ 89.

In July, 2006 CVRD acquired for R$ 60, the remaining 45.5 % of Valesul Alumínio S.A — Valesul, an aluminum company jointly-controlled. As a result of this acquisition, Valesul is now a wholly owned subsidiary of CVRD.

In May 2006, CVRD sold its 50% stake in Gulf Industrial Investment Company — GIIC, for R$ 910, generating a net revenue of R$ 737.

In February 2006, CVRD sold to JFE Steel Corporation for R$ 30, its total participation in Nova Era Silicon (49% of the total capital) with a net earning of R$20.

In November and December, 2005 and in February, 2006, CVRD acquired 93%, 6.2% and 0.8% common shares of the Canico Resource Corp. — Canico, by R$ 1,651 R$ 112 and R$ 14, respectively. Canico is a Canadian company of mineral exploration focused on the development of the Onça-Puma, project of nickel laterite. After theses acquisitions the above-mentioned company to turned a wholly owned subsidiary of the CVRD.

7.10- Cash and Cash Equivalents


	Consolidated				Parent Company
	2006		2005		2006		2005
Cash and bank accounts		3,404		586		68		10
Marketable securities linked to the interbank deposit certificate rate		645		785		135		121
Time deposits / Overnight		5,729		1,332		—		—

		9,778		2,703		203		131

7.11- Accounts Receivable


	Consolidated						Parent Company
	2006			2005			2006			2005
Domestic		1,793			745			994			736
Foreign countries		6,258			3,574			4,006			1,382

		8,051			4,319			5,000			2,118
Allowance for doubtful accounts		(123	)		(101	)		(55	)		(49	)
Allowance for ore weight credits		(36	)		(35	)		(33	)		(31	)

		7,892			4,183			4,912			2,038

No individual client was responsible for more than 10% of total revenues.

7.12-Related Parties

Derived from sales and purchases of products and services or from loans under normal market conditions, with maturities up to the year 2008, as follows:


	Consolidated
	Assets								Liabilities
	2006				2005				2006				2005
	Customers		Related party		Customers		Related party		Suppliers		Related party		Suppliers		Related party

Companhia Nipo-Brasileira de Pelotização — NIBRASCO		73		10		54		—		40		—		70		25
Companhia Hispano-Brasileira de Pelotização — HISPANOBRÁS		60		1		27		15		51		—		36		12
Companhia Ítalo-Brasileira de Pelotização — ITABRASCO		53		—		27		12		16		3		16		3
Companhia Coreano-Brasileira de Pelotização — KOBRASCO		42		—		38		1		10		3		16		15
Usina Siderúrgica de Minas Gerais S.A. — USIMINAS		62		52		33		—		1		—		—		—
Samarco Mineração S.A		5		—		2		—		—		—		—		—
MRS Logistica S.A.		—		—		—		83		9		15		4		14
Baovale Mineração S.A		1		—		—		—		25		—		21		—
Mineração Rio do Norte S.A.		—		—		—		15		27		—		47		—
Minas da Serra Geral S.A.		—		—		—		3		10		5		9		1
Gulf Industrial Investment Co. — GIIC		—		—		11		—		—		—		27		—
Valepar S. A.		—		—		—		—		—		—		—		10
Taiwan Nickel Refining Corporation		774		—		—		—		—		—		—		—
Korea Nickel Corporation		120		—		—		—		—		—		—		—
Others		11		9		14		11		10		5		8		4

Total		1,201		72		206		140		199		31		254		84

Registered as:
Current		1,201		61		206		134		199		30		254		81
Non-current		—		11		—		6		—		1		—		3

		1,201		72		206		140		199		31		254		84

The principal results arising from commercial and financial transactions carried out by the Parent Company with related parties, classified in the statement of income as revenue and costs of sales and services and financial income and expenses, are as follows:


	Consolidated
	Income				Expense / Cost
	2006		2005		2006		2005
Baovale Mineração S.A.		—		—		15		15
Gulf Industrial Investment Co.-GIIC		80		163		3		3
Companhia Hispano-Brasileira de Pelotização — HISPANOBRÁS		216		182		332		347
Companhia Ítalo-Brasileira de Pelotização — ITABRASCO		192		168		119		151
Companhia Coreano-Brasileira de Pelotização — KOBRASCO		224		184		383		274
Companhia Nipo-Brasileira de Pelotização — NIBRASCO		350		299		548		572
Mineração Rio do Norte S.A.		—		—		280		243
MRS Logística S.A.		18		6		693		657
Samarco Mineração S.A.		81		52		—		—
Usinas Siderúrgicas de Minas Gerais — USIMINAS		912		617		—		—
Other		19		91		41		10

		2,092		1,762		2,414		2,272

7.13- Inventories


	Consolidated				Parent Company
	2006		2005		2006		2005
Finished products
. Iron ore and pellets		765		820		388		413
. Manganese and ferroalloys		199		378		—		—
. Aluminum products		321		185		—		—
. Copper		10		—		10		—
. Nickel, co-products and sub products Inco		2,793		6		—		6
. Steel products		74		81		—		—
. Other		134		47		5		5

		4,296		1,517		403		424
Spare parts and maintenance supplies		2,073		1,718		702		703

		6,369		3,235		1,105		1,127

7.14- Taxes to recover or offset


	Consolidated				Parent Company
	2006		2005		2006		2005
Income tax		517		354		131		149
Value-added tax — ICMS		612		672		453		481
PIS and COFINS		618		243		53		9
INSS		24		15		22		15
Others		41		16		24		8

Total		1,812		1,300		683		662

Current		1,003		986		463		492
Non-current		809		314		220		170

		1,812		1,300		683		662

7.15- Deferred Income Tax and Social Contribution

Income of the company is subject to the normal tax system. The net balances of deferred assets and liabilities are presented as follows:


	Net Deferred
	Consolidated						Parent Company
	12/31/06			12/31/05			12/31/06			12/31/05
Tax loss carryforward		218			469			—			—
Temporary differences:
. Pension Plan		2,116			215			220			215
. Contingent liabilities		895			677			648			593
. Provision for losses on assets		402			131			328			131
. Goodwill from propety, plan and equipaments acquired		(4,319	)		—			—			—
. Others		13			(21	)		(311	)		(184	)

		(893	)		1,002			885			755

Total		(675	)		1,471			885			755

Current		885			428			404			334
Non-current		2,759			1,043			481			421

ASSET		3,644			1,471			885			755

Non-current		(4,319	)		—			—			—

LIABILITY		(4,319	)		—			—			—

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


	Consolidated															Parent Company
	Quarter									Accumulated						Accumulated
	4Q/06			3Q/06			4Q/05			2006			2005			2006			2005
Income before income tax and social contribution		5,159			5,021			3,000			17,930			13,847			14,403			11,700
Results of equity investment		144			14			(105	)		199			(269	)		(9,325	)		(5,466	)

		5,303			5,035			2,895			18,129			13,578			5,078			6,234
Income tax and social contribution at combined tax rates		34	%		34	%		34	%		34	%		34	%		34	%		34	%

Federal income tax and social contribution at statutory rates		(1,803	)		(1,712	)		(984	)		(6,164	)		(4,617	)		(1,727	)		(2,120	)
Adjustments to net income which modify the effect on the results for the period:
Income tax benefit from interest on stockholders’ equity		178			173			150			734			701			734			701
Fiscal incentives		75			75			5			318			250			33			110
Results of overseas companies taxed by aliquot less than the parent company		330			694			833			1,739			1,239			—			—
Reduced incentive aliquot		18			34			28			96			116			—			—
Interest on stockholders’ equity received		—			—			—			—			—			(13	)		(11	)
Other		(218	)		(56	)		(185	)		(113	)		(57	)		1			63

Income tax and social contribution		(1,420	)		(792	)		(153	)		(3,390	)		(2,368	)		(972	)		(1,257	)

The deferred assets and liabilities related to income tax and social contribution arising from tax losses, negative social contribution bases and temporary differences are recognized from an accounting standpoint considering an analysis of likely future results, based on economic and financial projections prepared based on internal assumptions and macroeconomic, commercial and fiscal scenarios which could change in the future.

These temporary differences will be realized upon the occurrence of the corresponding taxable events, expected to be as follows:


	Net amount of credits
Years	Consolidated			Parent Company
2007		823			404
2008		628			142
2009		39			142
2010		(76	)		11
2011		(142	)		7
2012		(135	)		44
2013		(132	)		44
2014		(186	)		44
2015		(228	)		44
2016		(1,266	)		3

		(675	)		885

The Company has certain tax incentives relative to our manganese operations in Carajás, bauxite in Oriximiná, potash operations in Rosario do Catete, alumina and aluminum operations in Barcarena and kaolin operations in Ipixuna and Mazagão. The incentives relative to manganese comprise partial exemption up to 2013. The incentive relating to alumina and potash comprise full income tax exemption on defined production levels, which expire in 2009 and 2013, respectively, while the partial exemption incentives relative to aluminum and kaolin expire in 2013, and bauxite in 2008. An amount equal to the tax saving must be appropriated to a reserve account within stockholders’ equity and may not be distributed.

The Company has also taxes incentives related to Goro Project in New Caledonia. These incentives include an income tax holiday during the construction phase of the project and throughout a 15-year period commencing in the first year in which commercial production, as defined by the applicable legislation, is achieved followed by a five-year, 50% income tax holiday.

In addition, Goro qualifies for certain exemptions from indirect taxes such as import duties during the construction phase and throughout the commercial life of the project. Certain of these tax benefits, including the income tax holiday, are subject to an earlier phase out should the project achieve a specified cumulative rate of return. The company is subject to a branch profit tax commencing in the first year in which commercial production is achieved, as defined by the applicable legislation. To date, there is not any net income for New Caledonia tax purposes. The benefits of this legislation are expected to apply with respect to any taxes otherwise payable once the Goro project is in operation.

7.16- Investments — Consolidated and Parent Company

Consolidated


					Equity Results
	Investments				Quarter								Accumulated
	2006		2005		4Q/06			3Q/06			4Q/05		2006			2005
Investments in affiliated companies
Usinas Siderúrgicas de Minas Gerais S.A. — USIMINAS (a, b)		949		1,017		108			94			88		317			402
Shandong Yankuang International Company Ltd.		49		50		(9	)		—			—		(9	)		—
Henan Longyu Resources Co. Ltd. (b)		239		225		19			21			23		65			23
Other		6		7		—			—			17		—			—
Exchange variation in stockholders ´equity of companies abroad		—		—		1			(2	)		—		(21	)		—
Investments at cost
ThyssenKrupp CSA — Cia Siderúrgica		195		—		—			—			—		—			—
SIDERAR Sociedad Anonima Industrial Y Comercial (d)		—		35		—			—			—		—			—
Quadrem International Holdings Ltd.		10		11		—			—			—		—			—
Jubilee Mines N.L ( c )		103		—		—			—			—		—			—
Lion Ore Mining International Ltd ( c )		52		—		—			—			—		—			—
Mirabela Nickel Ltd ( c )		21		—		—			—			—		—			—
Skye Resources Inc ( c )		114		—		—			—			—		—			—
Heron Resources Inc ( c )		18		—		—			—			—		—			—
Other (b)		100		51		—			4			28		16			67
Exchange variation		—		—		(1	)		—			—		(4	)		—

		1,856		1,396		118			117			156		364			492


(a)		Interest at market price — Usiminas R$ 1,937;

(b)		The presented result includes Dividends received from Gerdau, R$ 4, Longyu R$ 32, and Usiminas R$ 103;

(c)		Investments held through Inco Limited; and

(d)		Investment sold.

PARENT COMPANY


			Segment			Adjusted net									Results of equity						Dividends
	Partici-		stockholders'			income (loss) for			Investments						investments						received
Investment by segment	tion %		equity			the year			12/31/06			12/31/05			12/31/06			12/31/05			2006
Iron ore and pellets
Minerações Brasileiras Reunidas S.A. — MBR		89.80		3,860			2,192			3,466			1,415			1,968			1,005			784
Companhia Coreano-Brasileira de Pelotização — KOBRASCO		50.00		95			78			48			94			40			61			48
Companhia Hispano-Brasileira de Pelotização — HISPANOBRÁS		50.89		144			64			73			57			32			69			30
Companhia Ítalo-Brasileira de Pelotização — ITABRASCO		50.90		127			51			65			52			26			55			25
Companhia Nipo-Brasileira de Pelotização — NIBRASCO		51.00		167			83			85			137			42			92			47
CVRD Overseas Ltd. (a)		100.00		471			783			471			646			783			660			—
Gulf Industrial Investment Co. — GIIC (a, d)		—		—			—			—			144			44			157			—
CVRD International S.A. / Rio Doce Europa S.A.R.L (a)		100.00		12,506			4,116			12,506			5,102			4,116			2,176			—
Minas da Serra Geral S.A. — MSG (g)		50.00		105			10			53			50			5			(4	)		2
Samarco Mineração S.A. (g)		50.00		906			997			451			443			499			615			491
Companhia Portuária da Baía de Sepetiba — CPBS		100.00		303			129			303			248			129			83			74
Others		—		—			—			444			281			52			30			41

										17,965			8,669			7,736			4,999			1,542
Manganese and ferroalloys
Rio Doce Manganèse Europe — RDME (a, g)		100.00		201			(3	)		201			204			(3	)		(76	)		—
Rio Doce Manganês S.A. (g)		100.00		414			(220	)		414			634			(220	)		58			16
Rio Doce Limited (a)		100.00		397			—			397			312			—			—			—
Urucum Mineração S.A. (g)		99.90		47			11			47			47			11			20			8
Others		—		—			—			39			36			14			(54	)		—

										1,098			1,233			(198	)		(52	)		24
Non-ferrous
Cadam S. A. (g)		61.48		343			—			211			127			—			(10	)		—
Pará Pigmentos S.A. (g)		82.05		94			(17	)		77			55			(14	)		(5	)		—
Ferro-Gusa Carajás (g)		77.97		53			(71	)		41			96			(55	)		(11	)		—
Salobo Metais S.A. (f, g)		100.00		276			—			276			262			—			—			—
Advanced for capital increase — Salobo Metais S.A.		—		—			—			17			12			—			—			—
Others		—		—			—			—			(1	)		—			(2	)		—

										622			551			(69	)		(28	)		—
Logistics
Ferrovia Centro-Atlântica S.A.		100.00		(151	)		(30	)		(166	)		(121	)		(30	)		(160	)		—
Advanced for capital increase — Ferrovia Centro-Atlântica S.A.		—		—			—			1,788			1,525			—			—			—
MRS Logística S.A. (b,g)		40.45		913			542			369			185			207			120			20
Navegação Vale do Rio Doce S/A — Docenave (g)		100.00		90			35			90			322			35			86			100
TVV — Terminal de Vila Velha S.A. (g)		99.89		84			22			—			80			17			20			19
CPP Participações S.A.		100.00		2			(1	)		2			(14	)		(1	)		2			—
Others		—		—			—			130			(14	)		2			(1	)		—

										2,213			1,963			230			67			139
Steel
California Steel Industries, Inc — CSI (a)		50.00		747			179			374			374			89			29			—
Usinas Siderúrgicas de Minas Gerais S.A. — USIMINAS (e)		9.08		10,451			2,458			949			1,017			317			402			106
Others		—		—			—			194			46			—			(5	)		—

										1,517			1,437			406			426			106
Aluminum
ALBRAS — Alumínio Brasileiro S.A.		51.00		1,397			451			713			577			231			91			63
ALUNORTE — Alumina do Norte do Brasil S.A.		57.03		3,182			640			1,815			1,188			365			190			31
CVRD International S.A. (a)		—		—			—			—			—			162			130			—
Mineração Rio do Norte S.A. (g)		40.00		585			346			234			373			138			170			165
Valesul Alumínio S.A. (g)		100.00		247			69			247			139			51			1			34

										3,009			2,277			947			582			293
Nickel
CVRD Inco (a)		87.73		29,564			1,122			25,936			—			985			—			—
Canico Resource Corp (a)		100.00		1,809			—			1,809			—			—			—			—

										27,745			—			985			—			—
Others
DOCEPAR S.A. (g)		100.00		30			(14	)		30			43			(14	)		5			—
Quadrem International Holdings Ltd (a)		9.00		—			—			10			11			(1	)		(1	)		—
Florestas Rio Doce S.A.		99.90		24			24			24			54			24			(12	)		30
Henan Longyu Energy Resources Co. Ltd (a)		25.00		956			184			239			225			46			30			—
Tethys Mining LLC (a)		100.00		—			(10	)		—			(3	)		(10	)		(15	)		—
Compagnie Miniere Trois Riviere — CMTR (a)		100.00		5			(29	)		5			4			(29	)		(48	)		—
Compañia Minera Andino-Brasileira Ltd-CMAB (a)		100.00		—			—			—			—			—			(4	)		—
Compañia Minera Latino Americana — CMLA (a)		100.00		—			(82	)		—			—			(82	)		(45	)		—
Rio Doce South Africa (a)		100.00		1			(49	)		1			6			(49	)		(54	)		—
Rio Doce Moçambique (a)		100.00		10			(83	)		10			5			(83	)		(14	)		—
Rio Doce Argentina (a)		100.00		4			(16	)		4			7			(16	)		(2	)		—
Gevale-Indústria Mineira Ltda. (a,g)		51.00		14			(20	)		7			1			(10	)		(5	)		—
Rio Doce Austrália Pty Ltd. (a)		100.00		2			(34	)		2			5			(34	)		(15	)		—
CVRD Holdings GMBh (a)		100.00		37			97			37			(103	)		97			(103	)		—
Shandong Yankuang International Coking Co. Ltd. (a)		25.00		196			56			49			50			14			(4	)		—
Others		—		—			—			(30	)		(35	)		(2	)		(18	)		—
Advances for capital increase — other companies		—		—			—			15			15			—			—			—

										403			285			(149	)		(305	)		30

										54,572			16,415			9,888			5,689			2,134


(a)		The net equity of companies located abroad is converted into local currency at rates in effect on the financial statements date. The equity method comprises the difference due to the exchange rate variations as well as participation in results;

(b)		The company interest in MRS Logística S.A is held directly and indirectly through Minerações Brasileiras Reunidas S.A.;

(c)		Merged companies (Ferteco, Socoimex e Samitri) — amortization of goodwill recorded in the cost of products sold of the Parent Com pany;

(d)		Company sold;

(e)		Investment in company listed on stock exchanges in 2006. The market value of this investment does not necessarily reflect the valu e that could be realized from selling a representative group of shares;

(f)		Company in pre-operating phase;

(g)		Audited by our independent auditors

7.17- Intangible

Refers basically to goodwill based on future results expectative.


	Consolidated										Parent Company
					Goodwill										Goodwill
	Intangible				amortization						Intangible				amortization
Intangible by segment	12/31/06		12/31/05		12/31/06			12/31/05			12/31/06		12/31/05		12/31/06			12/31/05
Iron ore and pellets
Goodwill of Caemi Mineração e Metalurgia S.A (Note 7.7)		4,806		1,005		(435	)		(142	)		4,807		1,014		(435	)		(142	)
Goodwill incorporated companies (a)		51		379		—			—			51		379		—			—
Goodwill of Sociedade Mineira de Mineração		25		26		—			—			25		26		—			—
Other companies		26		8		(9	)		(10	)		—		—		(9	)		(10	)

		4,908		1,418		(444	)		(152	)		4,883		1,419		(444	)		(152	)
Manganese and ferroalloys
Goodwill of Rio Doce Manganês S.A.		—		—		—			(71	)		—		—		—			(71	)
Nickel
Goodwill of Inco Limited. (Note 7.8)		4,624		—		(119	)		—			4,624		—		(119	)		—

		4,624		—		(119	)		—			4,624		—		(119	)		—

Total		9,532		1,418		(563	)		(223	)		9,507		1,419		(563	)		(223	)

7.18- Property, Plant and Equipment

(a) By type of asset:


				Consolidated									Parent Company
				2006							2005		2006							2005
	Average
	deprecia-tion					Accumulated									Accumulated
	rates			Cost		depreciation			Net		Net		Cost		depreciation			Net		Net
Buildings		2.78	%		6,001		(1,543	)		4,458		1,781		2,360		(782	)		1,578		1,213
Installations		2.97	%		20,591		(7,022	)		13,569		9,171		9,821		(3,235	)		6,586		4,687
Equipments		7.37	%		7,597		(2,435	)		5,162		3,515		3,178		(1,072	)		2,106		1,527
Information technology equipment		20	%		1,347		(534	)		813		682		1,158		(435	)		723		625
Railroads		3.20	%		9,893		(3,671	)		6,222		4,476		8,621		(3,349	)		5,272		4,617
Mineral rights (note 7.4 (m))		4.95	%		19,933		(731	)		19,202		1,146		1,443		(225	)		1,218		1,148
Others		9.89	%		4,488		(1,372	)		3,116		1,883		2,298		(887	)		1,411		1,012

					69,850		(17,308	)		52,542		22,654		28,879		(9,985	)		18,894		14,829
Construction in progress		—			25,069		—			25,069		11,114		6,771		—			6,771		5,932

Total					94,919		(17,308	)		77,611		33,768		35,650		(9,985	)		25,665		20,761

(b) By business area:


	Consolidated
	2006							2005
			Accumulated
	Cost		depreciation			Net		Net
Ferrous
In operation		28,762		(11,102	)		17,660		14,094
Construction in Progress		5,939		—			5,939		4,983

		34,701		(11,102	)		23,599		19,077

Non — Ferrous
In operation		27,678		(1,160	)		26,518		2,249
Construction in Progress		15,544		—			15,544		2,950

		43,222		(1,160	)		42,062		5,199

Logistics
In operation		4,382		(1,491	)		2,891		2,151
Construction in Progress		284		—			284		232

		4,666		(1,491	)		3,175		2,383

Holdings
In operation		7,785		(3,136	)		4,649		3,481
Construction in Progress		2,616		—			2,616		2,341

		10,401		(3,136	)		7,265		5,822

Corporate Center
In operation		1,243		(419	)		824		680
Construction in Progress		686		—			686		607

		1,929		(419	)		1,510		1,287

Total		94,919		(17,308	)		77,611		33,768

The total assets given as a guarantee at judicial deposits is R$ 330 on consolidated and R$ 188 on the parent company.

7.19- Loans and Financing

Current


	Consolidated				Parent Company
	2006		2005		2006		2005
Trade finance		1,842		354		1,511		—
Working capital		193		163		—		—

		2,035		517		1,511		—

Non-current


					Consolidated								Parent Company
	Current liabilities				Long-term liabilities				Current liabilities				Long-term liabilities
	2006		2005		2006		2005		2006		2005		2006		2005
Foreign operations
Loans and financing in:
U.S. dollars		444		2,013		23,423		4,040		374		775		19,323		1,903
Other currencies		8		8		28		36		8		8		28		36
Notes in U.S. dollars		238		101		14,484		2,836		—		—		—		—
Export securitization		184		191		552		805		—		—		—		—
Perpetual notes		—		—		183		176		—		—		—		—
Accrued charges		298		74		—		—		64		46		—		—

		1,172		2,387		38,670		7,893		446		829		19,351		1,939

Local operations
Indexed by TJLP, TR and IGP-M		131		175		1,224		290		39		46		1,089		187
Basket of currencies		3		4		21		20		3		4		15		—
Loans in U.S. dollars		241		318		172		531		—		1		—		20
Non-convertible debentures		—		1		5,917		330		—		1		5,558		—
Accrued charges		79		55		—		2		27		1		—		—

		454		553		7,334		1,173		69		53		6,662		207

		1,626		2,940		46,004		9,066		515		882		26,013		2,146

(a)		Foreign currency loans and financing were converted into reais at exchange rates effective on the Financial Statements date, being US$ 1.00 = R$ 2.1380 in 12/31/06 (R$ 2.3407 on 12/31/05) and ¥ 1.00 = R$ 0.0180 on 12/31/06 (R$ 0.019833 on 12/31/05);

(b)		At December 31, 2006, the consolidated debt was secured as follows:

	•		Loans guaranteed by the Federal Government, to which we gave counter-guarantees of R$227;

	•		Securitization program of R$743;

	•		Other assets R$974.

(c)

Amortization of principal and financing charges incurred on long-term loans and financing obtained abroad and domestically mature as follows, as of 12/31/06:


	Consolidated				Parent Company
2008		18,353	39	%		18,063	70	%
2009		1,152	3	%		387	1	%
2010		2,634	6	%		1,893	7	%
2011 onward		23,318	51	%		5,670	22	%
No due date (perpetual notes and debentures)		547	1	%		—	0	%

		46,004	100	%		26,013	100	%

(d)

Long-term foreign and domestic loans and financing are subject to annual interest rates (plus exchange rate and monetary variation) in 2006 as follows:


Long-term	Consolidated				Parent Company
Up to 3%		221	0	%		—	0	%
3.1 to 5%		1,560	3	%		31	0	%
5.1 to 7%		33,095	69	%		18,845	71	%
7.1 to 9%		11,995	26	%		7,457	28	%
9.1 to 11%		266	1	%		195	1	%
Over 11%		298	1	%		—	0	%
Variable (perpetual notes)		195	0	%		—	0	%

		47,630	100	%		26,528	100	%

(e)		In October 2005, the subsidiary Vale Overseas Limited launched a US$ 300 million notes issue maturing in 2034. The notes carry a coupon of 7.65% p.a. The notes form a single series with the US$ 500 million notes issued in January 2004 and 8.25% p.a. coupon.

(f)		In January, 2006, the subsidiary Vale Overseas Limited issued US$ 1 billion 10-year 6.25% p.a. notes, payable semi-annually due 2016, at a price of 99.97% p.a. of the principal amount.

(g)		In January, 2006, the subsidiary Vale Overseas Limited concluded its tender offer for any and all of its US$ 300 millions aggregate principal amount outstanding 9.00% p.a. Guaranteed Notes due 2013.

(h)		Pursuant to the acquisition of Inco the Company concluded three transactions with total estimated value of US$ 12.3 billions, completing a significant part of the take out of the initial US$ 14.6 billions bridge loan, whose original term was 2-year, used to finance the Inco acquisition.

		In the first of these three transactions, on November, 2006, the Company issued a US$ 3.75 billions 10-year and 30-year notes. The US$ 1.25 billions notes due in January 2017 bear a coupon rate of 6.25% per year, payable semi-annually. The US$ 2.5 billions notes due in 2036 bear a coupon rate of 6.875% per year, payable semi-annually.

		The second transaction involved the issue on December 20, 2006 in the Brazilian market of non-convertible debentures in the amount of R$ 5.5 billions, in two series. The first series, due on November 20, 2010, R$ 1.5 billions, will be remunerated at 101.75% of the accumulated variation of the Brazilian CDI (interbank certificate of deposit) interest rate, payable semi-annually while the second series, due on November 20, 2013, R$ 4.0 billions, will be remunerated at the Brazilian CDI interest rate plus 0.25% per year, also payable semi-annually.

		This debentures can be traded at a secondary market, through the Sistema Nacional de Debentures (SND).

The third transaction, closed in December, 2006, was a pre-export finance transaction of US$ 6.0 billions, defining the final allocation among the members of a bank syndicate. The transaction includes a US$ 5.0 billions tranche, five-year maturity, at Libor plus 0.625% per year, and a US$ 1.0 billion tranche, seven-year maturity, at Libor plus 0.75% per year.

7.20- Contingent Liabilities

At the Financial Statements dates the contingent liabilities of the Company were:

(a)

Provisions for contingencies net from judicial deposits, considered by management and its legal counsel as sufficient to cover losses from any type of lawsuit, were as follows:


	Consolidated						Parent Company
	12/31/06			12/31/05			12/31/06			12/31/05
a) Tax contingencies		2,218			2,054			1,404			1,686
(-) Judicial deposits		(1,046	)		(658	)		(742	)		(404	)

		1,172			1,396			662			1,282
b) Civil contingencies		565			508			378			364
(-) Judicial deposits		(265	)		(223	)		(201	)		(167	)

		300			285			177			197
c) Labor contingencies		826			549			642			423
d) Environmental contingencies		65			72			27			30

Total accrued liabilities		2,363			2,302			1,508			1,932


					2006						2005

Balance in the beginning of the year					2,302						1,932
Provisions, net from reversals					676						130
Payment					(587	)					(570	)
Monetary update					401						388
Increase of judicial deposits					(429	)					(372	)

Balance December, 31					2,363						1,508

The Company and its subsidiaries are party to labor, civil, tax and other suits and has been contesting these matters both administratively and in court. Such as, when applicable, these are backed by judicial deposits. Provisions for losses are estimated and restated monetarily by management based on the opinions of the legal department and outside counsel.

	a)		Tax Contingencies:

			The major suits are:

Value-Added Tax on Sales and Services (ICMS) — The contingent figure refers to the credit right of differential rate regarding the transfer of assets between company branches.

Services Tax (ISS) — The major claims are regarding local tax collecting dispute.

Tax for Social Security Financing (COFINS) — The major contingencies refer to the increase of rate form 2% to 3% between 1999 and 2000 of merged companies.

Import Duty (II) — The provision made is related to the Fiscal classification of equipments importation of merged companies

Additional Compensation to harbour workers (AITP) — Figures regarding the collection of compensation to public harbour workers equalized to Private Harbour.

Income Tax and Social Contribution — Essentially regarding a Fiscal loss compensation and negative bases of Social Contribution disputing the over the limit of 30% of taxable earnings and monetary variation of asset from merged companies.

Ohers — Regarding dispute of tax credit compensations and base of calculation of Finance Compensation by Exploration of Mineral Resources — CFEM.

Civil Contingencies:

The civil actions principally related 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 , accidents and return of land.

Labor Contingencies:

Labor and social security — related actions principally comprise claims for (i) payment of time spent traveling from their residences to the work-place, (ii) additional health and safety related payments and (iii) disputes about the amount of indemnities paid upon dismissal and the one-third extra holiday pay.

In addition to the contingencies for which we have made provisions we have possible losses totaling R$ 3,344 (R$ 1,961 parent company). Based on the advice of our legal counsel, no provision is maintained.

(b)

Guarantees given to jointly controlled companies are as follows:

Amount of guarantee

Denominated

Counter

Affiliate

2006

2005

currency

Purpose

Final maturity

guarantees

SAMARCO

US$

Debt guarantee IFC

2008

None

VALESUL

—

Debt guarantee BNDES

2007

None

(c)		The company provides a guarantee covering certain termination payments to the supplier under an electricity supply agreement entered in October 2004 for Goro nickel-cobalt development project in New Caledonia. The amount of the termination payments guaranteed depends upon a number of factors. If Goro defaults under the contract, the termination payment could reach up to an amount of 145 millions euros. Once the supply of electricity under the contract to the project begins the guaranteed amounts will decrease over the life of the contract.

		Additionally, in connection with a special tax-advantage lease financing related with this project the company provides certain guarantees pursuant to which the company guarantee in certain events of default, payments up to a maximum amount of US$ 100 millions.

		The Company expects such guarantees to be not executed and therefore no provisions for losses have been made.

(d)		Upon privatization of the Company in 1997, issued a non-convertible debentures (Debentures) to the stockholders of record, including the federal government. The maturity dates of these Debentures were established to guarantee that pre-privatization stockholders, including the federal government, would share with us in any future benefits from the Company mineral resources.

		A total of 388,559,056 Debentures were issued at a par value of R$ 0.01 (one cent), whose value is to be restated in accordance with the variation in the General Market Price Index (IGP-M), as set forth in the Issue Deed.

		On 10/04/02 Comissão de Valores Mobiliários — CVM (Brazilian Securities Commission) approved the Company’s registration request, for public trading of the Debentures. As from 10/28/02, the Debentures can be traded on the secondary market.

		The debenture holders are entitled to receive semi-annual payments equivalent to a percentage of the net revenue deriving from certain mineral resources owned in May 1997 and included in the Issue Deed.

		According to the Debenture Issue Deed, the amount of the premium must include interest up to the month prior to that of effective payment, plus 1% in the month in which the funds are made available to the debenture holder. Pursuant to this Deed, the payment date shall take place each semester in March and September.

		On the start-up of copper projects in 2004, CVRD began calculating the premium referring to these minerals rights. Considering the iron ore sale, the Company estimates that the threshold for payment will be reached by approximately 2032 and 2019 for the Southern and Northern systems, respectively. Regarding other minerals, such as bauxite and nickel, the forecast for exploitation is for the second half of the decade, and according to the criteria established in the Deed, payment will be due on the net sales revenue in the fourth year after the date of first commercialization. The obligation to make payments to the debenture holders will cease when the pertinent mineral resources are exhausted.

		On 04/03/06 e 10/02/2006 we made available payment related to debentures in the amount of R$ 4 and R$ 8, respectively.

(e)		CVRD is compromised by a contract of take-or-pay to buy approximately 33,733 thousand metric tons of bauxite from Mineração Rio do Norte S. A. — MRN by a price calculated on the quoted aluminum London Metal Exchange — LME.

		Based on the market price of US$ 26.00 (R$ 55.59) per metric ton, in December 31, 2006, this represents an amount of R$ 1,384 millions, as follows:


2007			538
2008			538
2009 onward			308

			1,384

7.21- Provision for asset retirement obligations

Expenditures relating to ongoing compliance with environmental regulations are charged to production costs or capitalized as incurred. The Company manages its relations with the environment as a strategic factor, having as assumption the full compliance with applicable government rules and its environmental policies according to the specifications of ISO 14,001 and maintains ongoing programs to minimize the environmental impact of its mining operations as well as to reduce the costs that will be incurred upon termination of activities at each mine. On 12/31/06, the consolidated provision for asset retirement obligations amounted to R$ 1,476 (R$ 619 parent company), which was accounted for in “Provision for asset retirement obligations” in non-current liabilities and R$ 59 (R$ 59 parent company) in “Other” in current liabilities. The Company adopts the concepts of the Accounting for Asset Retirement Obligations, as follows:

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

7.22- Pension Plan

Since 1973 CVRD has sponsored a complementary pension plan that presents a defined benefit characteristics (the “Old Plan”) covering substantially all employees, with valuation of benefits based on years of service, age, contribution salary and social security benefits completion. This plan is administered by Fundação Vale do Rio Doce de Seguridade Social — VALIA and was funded by monthly contributions made by CVRD and its employees, calculated based on periodic actuarial appraisals.

In May 2000, the Company implemented a new complementary pension plan, with a variable contribution characteristic regarding the programmed retirement income and the risk benefits (death pension, disability retirement and health care help). When the launch of the “New Plan” (Plano Misto de Benefícios — Vale Mais), it was offered to our active employees the opportunity of transferring to it. Over 98% of our active employees opted to the transference. The Old Plan continues in existence, covering almost exclusively retired participants and their beneficiaries.

Additionally the Company provides a specific group of ex-employees, covered by Resolutions 05/87 and 07/89, with supplementary benefit payments through the “Abono Complementação” plus a post-retirement medical, odontological and pharmaceutical benefit for that same group, in an equal model of those practiced to actual employees.
Pursuant to the acquisition of Inco CVRD assumed benefits through defined benefit pensions that cover essentially all its employees and post-retirement benefits other than pensions that provide certain health care and life insurance benefits for retired employees as well.

The following information details the status of the defined benefit elements of the Company plans in accordance with Deliberation CVM 371/00.

(a)		Benefit plan

		Fair value of assets development


	2006								2005
	Overfunded			Underfunded			Underfunded		Overfunded
	pension plans			pension plans			other benefits		pension plans
Fair value of assets at the begining of the year		6,506			—			—		5,516
Asset recognized upon consolidation of Inco		—			6,250			9		—
Actual return of assets		1,298			416			—		1,289
Contribution from sponsor		55			96			—		54
Benefits paid		(376	)		(124	)		—		(353	)
Effect of exchange rate changes		—			(252	)		—		—

Fair value of assets at the end of the year		7,483			6,386			9		6,506

Evolution of present value of obligation


	2006									2005
	Overfunded			Underfunded			Underfunded			Overfunded
	pension plans			pension plans			other benefits			pension plans
Fair value of plan assets at beginning of year		4,174			—			—			3,983
Liability recognized upon consolidation of Inco		—			7,735			2,618			—
Cost of current service		12			30			9			5
Cost of interest		534			98			33			510
Benefits paid		(376	)		(126	)		(33	)		(353	)
Plan amendment		—			(165	)		—			—
Hypotheses changes		993			—			—			25
Actuarial loss		65			(2	)		—			4
Effect of exchange rate changes		—			(277	)		(104	)		—

Fair value of plan assets at end of year		5,402			7,293			2,523			4,174

Conciliation of assets and liabilities recognized in the balance sheet


	2006									2005
	*() Overfunded**			Underfunded			*Underfunded ()**			Overfunded
	pension plans			pension plans			other benefits			pension plans
Present value of actuarial obligations		(5,402	)		(7,293	)		(2,523	)		(4,174	)
Fair value of asets		7,483			6,386			9			6,506
Net gains not recognized on the balance sheet		—			(280	)		—			(1,795	)

Actuarial assets/liabilities to be recorded in the balance sheet		2,081			(1,187	)		(2,514	)		537


(*)		The Company has not recorded the actuarial asset on its balance sheet, since there is no clear evidence as to its realization, as established by item 49 of NPC 26.

		Investment target and composition of plan assets

		The asset fair value of these plans is R$ 13,878 and R$6,506 at the end of 2006 and 2005, respectively. The assets allocations for the Company pension plan at the end of 2006 and 2005 and the target allocation for 2007, by asset category are as follows:


	Local
				Percentage of plan assets at December
	Target allocation for 2007			31,
Composition of assets	(unaudited)			2006			2005
Equity securities		24	%		28	%		28	%
Real estate		6	%		4	%		5	%
Loans		5	%		4	%		3	%
Fixed Income		65	%		64	%		64	%

Total		100	%		100	%		100	%


	Foreign
				Percentage of plan assets at December
	Target allocation for 2007			31, 2006
Composition of assets	(unaudited)
Equity securities		60	%		61	%
Fixed Income		40	%		39	%

Total		100	%		100	%

		The fixed income allocation target was established in order to match the asset with the benefit payments. The proposal for 2007 is to re-establish the investments in inflation-indexed funds. The remaining investments in fixed income will be used for the payment of short-term plan benefits.

		The increase of allocation target reflects the expected appreciation of the Brazilian stock markets as well as the Brazilian interest rates.

(b)		Actuarial liability

		Complementary Value and Health Insurance Plan

		Refers to the responsibility of the Company to complement the retirements, pensions and health assistance related to the incentive to the disconnecting of some employees occurred between 1987 e 1989.

		The results of the actuarial evaluation of this liability are as follows:

		*Change of fair value of assets ()**


	Complementary plan
	2006			2005
Fair value of assets at the begining of the year		146			76
Actual return of assets		23			26
Contribution from sponsor		88			102
Benefits paid in the year		(61	)		(58	)

Fair value of assets at the end of the year		196			146


(*)		Does not apply to fair value of assets for purposes of the health plan.

Change in the present value of obligations


	Health plan						Complementary plan
	2006			2005			2006			2005
Fair value of plan assets at beginning of year		183			174			584			582
Cost of interest		24			23			74			74
Benefits paid in the year		(14	)		(12	)		(61	)		(58	)
Assumptions changes		27			—			111			—
Loss (gain) on liabilities		9			(2	)		—			(14	)

Fair value of plan assets at end of year		229			183			708			584

Reconciliation of assets and liabilities recognized on the balance sheet


	Health plan						Complementary plan
	2006			2005			2006			2005
Present value of totally or partially covered actuarial obligations		(229	)		(183	)		(708	)		(584	)
Fair value of assets		—			—			196			146
Net (gains) loss not recognized on the balance sheet		23			11			71			(23	)

Actuarial liabilities net accrued in the balance sheet		(206	)		(172	)		(441	)		(461	)

Costs recognized in the income statement


	Health plan				Complementary plan
	2006		2005		2006			2005
Cost of interest		24		23		74			74
Actual return of assets		—		—		(23	)		(26	)

Total of costs, net		24		23		51			48

(c)

Sponsor contributions


	2006			2005
Mixed benefit plan — “VALE MAIS” — income		(29	)		(23	)
Mixed benefit plan — “VALE MAIS” — risk and proportional benefit		(55	)		(54	)
Pension plans in the foreign		(363	)		—
Complementary value (*)		(88	)		(102	)
Health insurance plan for retired employee (*)		(14	)		(12	)

Total contributions		(549	)		(191	)


(*)		Refers to actuarial liabilities

(d)		Actuarial and economic hypotheses

		All calculation includes future projections in relation to certain parameters, for example: salaries, interest, inflation, benefits from social security, mortality, invalidity and others. No actuarial results can be analyzed without knowledge of the scenarios utilized in the evaluation.

		The actuarial economic hypotheses were considering the long-term for their maturity, and must be analyzed from this point of view. They not necessarily are realizable in the short-term.

		The evaluation was based on the following economic hypotheses:

2006

2005

Economic assumptions

Local pension

Foreign pension

Local pension

plans

Discount rate

11.30% p.a.

5.00% p.a.

13.40% p.a.

Rate expected return of assets

14.98% p.a.

7.50% p.a.

13.40% p.a.

Rate of compensation increase — up to 47 years

8.15% p.a.

3.00% p.a.

8.15% p.a.

Rate of compensation increase — over 47 years

—

3.00% p.a.

—

Inflation

5.00% p.a.

1.80% p.a.

5.00% p.a.

Health care cost trend rate

8.67% p.a.

5.05% p.a.

9.20% p.a.

All assumptions were revised in 2006.

7.23- Paid-up Capital

At the Extraordinary Shareholders’ Meeting held 03/31/06 the Capital Stock was increased to R$19,492 millions, corresponding to 1,229,828,529 shares, being R$ 9,007 millions divided into 749,949,429 common shares and R$ 10,485 millions, divided into 479,879,100 preferred Class “A”, including three (3) special Class shares, all without par value.

On 05/22/06 the Company split the capital stock approved at the Extraordinary Shareholders’ Meeting held on 04/27/2006. Each existing share, both common and preferred, became two shares. After the split the capital of the Company in the amount of R$19.5 billion, corresponds to 2,459,657,058 shares, being 1,499,898,858 common shares and 959,758,200 preferred Class “A”, including six special class shares without par value (Golden share). The share/ADR proportion was maintained at 1/1, therefore, each common and preferred share will continue to be represented by one ADR .

For comparative purposes, the effects of the split were considered retroactively in the calculation of net income per share presented in the statement of income

Preferred shares have the same rights as common shares, except for the right to elect the members of the Board of Directors. They have priority to a minimum annual dividend of 6% on the portion of capital represented by this class of share or 3% of the book net equity value of the share, whichever is greater.

On 12/31/06 the Company’s capital is held as follows:


	Number of shares
Stockholders	Commom		%		Preferred		%		Total		%
Valepar S.A.		784,294,266		52		—		—		784,294,266		32
Brazilian Government (National Treasury / BNDES/ INSS / FPS)		28,356		—		30,452,052		3		30,480,408		1
American Depositary Receipts — ADRs		396,824,983		26		433,511,951		46		830,336,934		34
FMP — FGTS		70,765,599		5		—		—		70,765,599		3
PIBB — BNDES		2,981,656		—		4,215,866		—		7,197,522		—
BNDESPar		100,578,860		7		728,668		—		101,307,528		4
Foreign — institutional investors		32,263,098		2		163,372,822		17		195,635,920		8
Brazil — institutional investors		55,815,144		4		165,832,908		17		221,648,052		9
Brazil — retail investors		28,055,876		2		146,471,417		15		174,527,293		7
Treasury stock in Brazil		28,291,020		2		15,172,516		2		43,463,536		2

Total		1,499,898,858		100		959,758,200		100		2,459,657,058		100

The members of the Board of Directors and Executive Board together own 58,480 common shares and 342,583 preferred shares.

On 12/31/2006, after the purposed appropriations of the net income of the year, the Company had excess profit reserves in relation to the social capital. Following the Statutory Legislation, Management will recommend at the Ordinary Shareholders’ Meeting the increase of the capital of the Company with profit reserves of R$ 8,508 million, without new share issuance.

7.24- ADR Program — American Depositary Receipts

The Company has the registration with the United States Securities and Exchange Commission (SEC), that permits its preferred shares to be traded on the New York Stock Exchange (NYSE) as ADR — American Depositary Receipts since June, 2000 and March, 2002, respectively. As consequence of share split each ADR was also split maintaining thus the proportion of 1 (one) class “A” preferred share or common, traded with codes “RIOPR” E “RIO”, respectively.

For maintenance of this registration the Company also discloses its financial statements according to U.S.A. Principles — USGAAP showing net income for 2006 of R$ 14,195 which has differences from the net income presented according to Brazilian Principles in respect of non-amortization of goodwill and the recognition of exchange variation of foreign investments with functional currency different from that of the parent company directly into shareholders equity.

7.25-Treasury Stock

On 06/21/06 The Board of Directors approved, under the terms of Subparagraph XXXII of Article 14 of the Bylaws and based on Article 30 of Law 6404/76 and CVM Instructions 10 of 02/14/80 and 268 of 11/13/97, a buy-back program of its preferred shares, during a maximum term of 180 days, involving the acquisition of up to 47,986,763 preferred shares, corresponding to 5% of its outstanding preferred shares on May 31, 2006.

Until 12/21/06, due date of buy-back program 15,149,600 preferred shares have been acquired.

On 12/31/06, the Company had 28,291,020 common shares and 15,172,516 preferred shares, which are held in treasury in the amount of R$ 790. The 28,291,020 common shares guarantee a loan of the subsidiary Alunorte. On December 31, 2006, 3,617,821 of this shares at the market value would be sufficient to offset the balance of the debt.


Shares
Class	Quantity				Unit acquisition cost						Average quoted market price
	2006		2005		Average		Low		High		2006		2005
Preferred		15,172,516		22,916		43.45		41.13		45.15		44.84		35.49
Common		28,291,020		28,291,020		4.63		3.34		8.68		52.21		41.18

		43,463,536		28,313,936

7.26- Remuneration of Stockholders

The total remuneration proposed stockholders’ in 2006 was as follows:


Net income for the year	13,431
Legal reserve	(672	)
Realization of unrealized income reserve (*)	114

Adjusted net income	12,873

Mandatory dividend amount - 25% (R$1.33 per outstanding share)	3,218

Statutory dividend on preferred shares (3% of net equity, R$0,48 per outstanding share)	458

Statutory dividend on preferred shares (6% of paid-up capital, R$0.66 per outstanding share)	629

Dividends/ Interest on stockholders ´equity	3,218
Antecipated dividends	(29	)

Dividends/ Interest on stockholders ´equity proposed	3,189


(*)		The realization is based on the dividends received, write-off or disposal of investments and depreciation, write-off and disposal of property, plant and equipment.

7.27- Financial Result

Consolidated (unaudited)


	Quarter
	4Q/06 (unaudited)									3Q/06 (unaudited)									4Q/05 (unaudited)
													Monetary
				Monetary and									and									Monetary and
				exchange									exchange									exchange
	Financial			rate variation						Financial			rate variation						Financial			rate variation
	expenses			on liabilities			Total			expenses			on liabilities			Total			expenses			on liabilities			Total
Foreign debt		(583	)		(32	)		(615	)		(128	)		(22	)		(150	)		12			(714	)		(702	)
Local debt		(74	)		19			(55	)		(39	)		4			(35	)		(25	)		(75	)		(100	)
Related parties		(1	)		—			(1	)		(2	)		—			(2	)		(3	)		—			(3	)

		(658	)		(13	)		(671	)		(169	)		(18	)		(187	)		(16	)		(789	)		(805	)
Labor, tax and civil contingencies		(61	)		(20	)		(81	)		(63	)		(121	)		(184	)		(23	)		(27	)		(50	)
Derivatives, net of gain/losses (interest and currencies)		(109	)		—			(109	)		71			1			72			4			—			4
Derivatives, net of gain/losses (gold, aluminum, alumina, copper, nickel and platinum)		(104	)		11			(93	)		91			(1	)		90			(257	)		(30	)		(287	)
Call option premium		—			—			—			(187	)		—			(187	)		—			—			—
CPMF		(186	)		—			(186	)		(42	)		—			(42	)		(48	)		—			(48	)
Other		(308	)		264			(44	)		(101	)		(3	)		(104	)		(187	)		159			(28	)

		(1,426	)		242			(1,184	)		(400	)		(142	)		(542	)		(527	)		(687	)		(1,214	)


													Monetary
				Monetary and									and								Monetary and
				exchange									exchange								exchange
	Financial			rate variation						Financial			rate variation					Financial			rate variation
	income			on assets			Total			income			on assets		Total			income			on assets			Total
Related parties		2			—			2			1			—		1			(6	)		4			(2	)
Marketable securities		198			(17	)		181			103			14		117			70			237			307
Other		210			20			230			34			141		175			39			106			145

		410			3			413			138			155		293			103			347			450

Financial income (expenses), net		(1,016	)		245			(771	)		(262	)		13		(249	)		(424	)		(340	)		(764	)


	Accumulated
	2006									2005
				Monetary and									Monetary and
				exchange									exchange
	Financial			rate variation						Financial			rate variation
	expenses			on liabilities			Total			expenses			on liabilities			Total
Foreign debt		(950	)		265			(685	)		(323	)		445			122
Local debt		(191	)		77			(114	)		(162	)		279			117
Related parties		(7	)		—			(7	)		(20	)		1			(19	)

		(1,148	)		342			(806	)		(505	)		725			220
Labor, tax and civil contingencies		(236	)		(163	)		(399	)		(152	)		(39	)		(191	)
Derivatives, net of gain/losses (interest and currencies)		(33	)		1			(32	)		6			3			9
Derivatives, net of gain/losses (gold, aluminum, alumina, copper, nickel and platinum)		(283	)		61			(222	)		(423	)		22			(401	)
Call option premium		(187	)		—			(187	)		—			—			—
CPMF		(320	)		—			(320	)		(152	)		—			(152	)
Other		(702	)		57			(645	)		(354	)		(96	)		(450	)

		(2,909	)		298			(2,611	)		(1,580	)		615			(965	)


				Monetary and									Monetary and
				exchange									exchange
	Financial			rate variation						Financial			rate variation
	income			on assets			Total			income			on assets			Total
Related parties		9			(1	)		8			9			(1	)		8
Marketable securities		425			(65	)		360			225			(83	)		142
Other		327			171			498			105			(566	)		(461	)

		761			105			866			339			(650	)		(311	)

Financial income (expenses), net		(2,148	)		403			(1,745	)		(1,241	)		(35	)		(1,276	)

Parent company


	Accumulated
	2006									2005
				Monetary and									Monetary and
				exchange									exchange
	Financial			rate variation						Financial			rate variation
	expenses			on liabilities			Total			expenses			on liabilities			Total
Foreign debt		(489	)		(105	)		(594	)		(59	)		145			86
Local debt		(68	)		(57	)		(125	)		(18	)		64			46
Related parties		(415	)		680			265			(223	)		396			173

		(972	)		518			(454	)		(300	)		605			305
Labor, tax and civil contingencies		(225	)		(158	)		(383	)		(141	)		(36	)		(177	)
Derivatives, net of gain/losses (interest and currencies)		3			—			3			(4	)		—			(4	)
Derivatives, net of gain/losses (gold)		10			5			15			(27	)		4			(23	)
CPMF		(246	)		—			(246	)		(89	)		—			(89	)
Other		(311	)		106			(205	)		(114	)		181			67

		(1,741	)		471			(1,270	)		(675	)		754			79


				Monetary									Monetary
				and exchange									and exchange
	Financial			rate variation						Financial			rate variation
	income			on assets			Total			income			on assets			Total
Related parties		71			(165	)		(94	)		51			(131	)		(80	)
Marketable securities		56			—			56			51			13			64
Other		26			217			243			37			(19	)		18

		153			52			205			139			(137	)		2

Financial income (expenses), net		(1,588	)		523			(1,065	)		(536	)		617			81

7.28- Financial Instruments — Derivatives

The main market risks CVRD faces are interest rate risk, exchange rate risk and commodity price risk. Some of these risks are managed through the use of derivative instruments. The Company risk management activities follow the risk management policy, which requires diversification of transactions and counter-parties. CVRD monitors and evaluates the overall position regularly in order to evaluate financial results and impact on cash flow. CVRD also periodically reviews the credit limits and creditworthiness of hedging counter-parties.

Interest Rate and Exchange Rate Risk

The Company is exposed to interest rate risk on outstanding borrowings and in future debt issuances. The floating rate debt of CVRD consists principally of U.S. dollar borrowings related to trade finance and loans from commercial banks and Real borrowings indexed to CDI (Interbank Certificate of Deposit), related to the debentures issued in 2006 in the local market.

To mitigate the effects of interest rate volatility on the foreign debt CVRD sometimes makes use of natural hedges allowed by the positive correlation between floating interest rates and metals prices. When natural hedges are not effective, CVRD tries replicate the hedging effect by using derivatives.

The floating rate debt denominated in reais of CVRD is mainly subject to changes in CDI, related to the debentures issued in 2006, and associated with the takeout strategy of Inco acquisition.

To mitigate the foreign exchange exposure component in cash flows, associated with the issuance of debt in Brazilian reais, the Company has entered into swap agreements to convert cash flows in Brazilian reais indexed to CDI into U.S. dollar cash flows indexed to a fixed rate in dollars.

The Company is exposed to exchange rate risk associated with foreign currency denominated debt. On the other hand, a substantial proportion of revenues is denominated in, or automatically indexed to, the U.S. dollar. This provides a natural hedge against any devaluation of the Brazilian real against the U.S. dollar. When devaluation occurs, the immediate negative impact on foreign currency denominated debt is offset over time by the positive effect of devaluation on future cash flows. In light of this framework, derivative instruments are generally not used to manage the

currency exposure on your long-term dollar-denominated debt. However, CVRD may occasionally use derivatives to minimize the effects of the volatility of the exchange rates between Brazilian reais and U.S. dollars in the cash flow.

The Company uses forward currency contracts to eliminate the risk of exchange rate movements on a portion of future construction cost of capital assets at Ontario operations and the planned production facilities for the Goro project. These transactions are performed under CVRD Inco. The outstanding transactions are mainly executed to protect the risks arising from the volatility of Euro, AUD, CNY and GBP.

Commodities Price Risk

Used by CVRD derivative instruments to manage exposure to the fluctuation of commodity prices.

Nickel — Not used derivatives instruments to hedge the exposure to fluctuating nickel prices. The Company does not enter into LME forward purchase contracts which are substantially offset by fixed price customer contracts in order to maintain the exposure to nickel price risk.

Copper — There was outstanding put option contracts, giving the right, but not the obligation, to sell copper, and sold call option contracts, giving the buyer the right, but not the obligation, to purchase copper, during the period extending to 2008.

Gold — There is a small position in gold derivative instruments, structured to manage the exposure associated with the production of gold as a by-product of copper concentrate.

Aluminum — There was outstanding option contracts and forwards to protect the exposure to aluminum prices in the aluminum and alumina operations.

Platinum — Derivatives are used to guarantee certain minimum price in respect of a portion of production of that metal.

Fuel Oil and Natural Gas — Fuel oil and natural gas swap contracts are used to reduce the effect of energy price volatility on the operational costs.

Most of our commodity derivative transactions have been settled in cash, without physical delivery of product.

The nickel, platinum, fuel oil and natural gas derivative trades are performed under CVRD Inco. Copper derivative trades are performed to protect CVRD and CVRD Inco production and provide minimum cash flow requirements in accordance with our risk management policy.

The asset (liability) balances and the change in fair value of derivative financial instruments are as follows:


	Consolidated
	4Q/06
	Interest rates									Products of
	(libor)			Currencies			Gold			aluminium			Copper			Nickel			Platinum			Total
Gains / (losses) unrealized on 09/30/06		(3	)		77			(111	)		(422	)		6			—			—			(453	)
Gains / (Losses) recognized upon consolidation of Inco		9			20			—			—			(778	)		132			(47	)		(664	)
Financial settlement		—			(14	)		14			48			(1	)		(188	)		—			(141	)
Financial expenses, net		7			(116	)		(20	)		(314	)		135			90			5			(213	)
Monetary variations, net		—			—			2			9			—			—			—			11

Gains / (losses) unrealized on 12/31/06		13			(33	)		(115	)		(679	)		(638	)		34			(42	)		(1,460	)


	3Q/06
	Interest rates								Products of
	(libor)			Currencies		Gold			aluminium			Copper		Nickel		Platinum		Total
Gains / (losses) unrealized on 06/30/06		(2	)		4		(131	)		(546	)		—		—		—		(675	)
Financial settlement		—			—		10			50			—		—		—		60
Financial expenses, net		(1	)		72		10			75			6		—		—		162
Monetary variations, net		—			1		—			(1	)		—		—		—		—

Gains / (losses) unrealized on 09/30/06		(3	)		77		(111	)		(422	)		6		—		—		(453	)


	4Q/05
	Interest rates								Products of
	(libor)			Currencies		Gold			aluminium			Copper		Nickel		Platinum		Total
Gains / (losses) unrealized on 09/30/05		(15	)		2		(81	)		(288	)		—		—		—		(382	)
Financial settlement		2			—		9			47			—		—		—		58
Financial expenses, net		5			—		(30	)		(227	)		—		—		—		(252	)
Monetary variations, net		(1	)		—		(5	)		(26	)		—		—		—		(32	)

Gains / (losses) unrealized on 12/31/05		(9	)		2		(107	)		(494	)		—		—		—		(608	)


	2006
	Interest
	rates									Products of
	(libor)			Currencies			Gold			aluminium			Copper			Nickel			Platinum			Total
Gains / (losses) unrealized on 12/31/05		(9	)		2			(107	)		(494	)		—			—			—			(608	)
Gains / (Losses) recognized upon consolidation of Inco		9			20			—			—			(778	)		132			(47	)		(664	)
Financial settlement		4			(14	)		41			224			(1	)		(188	)		—			66
Financial expenses, net		8			(41	)		(58	)		(461	)		141			90			5			(316	)
Monetary variations, net		1			—			9			52			—			—			—			62

Gains / (losses) unrealized on 12/31/06		13			(33	)		(115	)		(679	)		(638	)		34			(42	)		(1,460	)


	2005
	Interest
	rates									Products of
	(libor)			Currencies			Gold			aluminium			Copper		Nickel		Platinum		Total
Gains / (losses) unrealized on 12/31/04		(45	)		9			(97	)		(299	)		—		—		—		(432	)
Financial settlement		21			(2	)		27			170			—		—		—		216
Financial expenses, net		11			(5	)		(44	)		(378	)		—		—		—		(416	)
Monetary variations, net		4			—			7			13			—		—		—		24

Gains / (losses) unrealized on 12/31/05		(9	)		2			(107	)		(494	)		—		—		—		(608	)


	Parent Company
	2006
	Interest rates
	(libor)		Currencies		Gold			Copper		Total
Gains / (losses) unrealized on 12/31/05		—		2		(63	)		—		(61	)
Financial settlement		—		—		25			—		25
Financial expenses, net		—		3		(36	)		46		13
Monetary variations, net		—		—		5			—		5

Gains / (losses) unrealized on 12/31/06		—		5		(69	)		46		(18	)


	2005
	Interest rates
	(libor)			Currencies			Gold			Copper		Total
Gains / (losses) unrealized on 12/31/04		(9	)		9			(55	)		—		(55	)
Financial settlement		8			(2	)		15			—		21
Financial expenses, net		1			(5	)		(27	)		—		(31	)
Monetary variations, net		—			—			4			—		4

Gains / (losses) unrealized on 12/31/05		—			2			(63	)		—		(61	)

Non-realized gains, are registered in account Others Long Assets in an amount of R$ 106, R$ 83 e R$2 in December 31,2006, September 30, 2006 and December 31,2005, respectively on the consolidate and in the amount of R$ 51 and R$2 in December 31,2006 and December 31,2005 respectively to the parent company.

Final maturity dates for the above instruments are as follows:


Gold		December 2008
Interest rates (LIBOR)		December 2011
Currencies		December 2011
Aluminum products		December 2008
Copper		December 2008
Nickel		September 2008
Platinum		December 2008

7.29- Selling, Administrative , Other Operating Expenses and Non Operating Income


	Consolidated										Parent Company
	Quarter (Unaudited)						Accumulated				Accumulated
Administrative	4Q/06		3Q/06		4Q/05		2006		2005		2006		2005
Personnel		113		152		115		546		460		309		263
Services of technical consulting		47		44		31		162		130		106		94
Advertising and publicity		38		25		44		145		113		141		112
Depreciation		72		62		49		239		141		168		68
Travel expenses		8		13		14		46		48		38		41
Rents and taxes		15		14		16		54		56		27		31
Community aborigine		5		8		4		21		17		21		17
Administrative Expenses of acquired company		99		—		—		99		—		—		—
Other		84		58		110		257		315		63		59
Sales		88		26		53		350		340		8		3
Selling Expenses of acquired company		33		—		—		33		—		—		—

Total		602		402		436		1,952		1,620		881		688


	Consolidated												Parent Company
	Quarter (Unaudited)								Accumulated				Accumulated
Other operating expenses (income), net	4Q/06			3Q/06		4Q/05			2006		2005		2006		2005
Provisions for contingencies		77			74		97			226		275		112		86
Provision for loss on ICMS credits		31			24		23			159		40		88		—
Provision for profit sharing		347			76		70			563		230		312		180
Fundação Vale do Rio Doce — FVRD		26			15		34			47		76		38		66
Asset retirement obligation		264			—		—			264		—		178		—
Other		(4	)		159		(19	)		194		213		128		(97	)

Total		741			348		205			1,453		834		856		235


	Consolidated												Parent Company
	Quarter (Unaudited)							Accumulated					Accumulated
Non operating results	4Q/06			3Q/06		4Q/05		2006			2005		2006		2005
Gerdau		89			34		—		123			—		123		—
Usiminas		135			—		—		135			—		135		—
Siderar		197			—		—		197			—		—		—
Gulf Investment Co. — GIIC		—			—		—		737			—		—		—
Nova Era Silicon — NES		—			—		—		20			—		20		—
Quebec Carter Mining — QCM		—			—		—		—			298		—		—

		421			34		—		1,212			298		278		—
Non operating expenses from company adcquired		(1,427	)		—		—		(1,427	)		—		—		—

Total		(1,006	)		34		—		(215	)		298		278		—

7.30- Concessions and Leases

(a)		Railroad — Companies

		The Company and some of its group companies entered into agreements with the Brazilian government, through the Ministry of Transport, for concession, exploitation and development of public rail cargo transport services and for lease of the assets destined for rendering these services.

		The concessions periods are, for railroad:


Railroad		End of concession period
Vitória-Minas (direct) (*)		June 2027
Carajás (direct) (*)		June 2027
Malha Centro-Leste (indirect via FCA)		August 2026
Malha Sudeste (indirect via MRS)		December 2026


(*)		Concessions with no disbursement

The concessions will expire upon one of the following events: termination of the contractual term, cancellation, forfeiture, rescission, annulment and bankruptcy or extinction of the concessionaire.

Concessions and leasing from controlled companies are accounting treated as operating leasing and present the following characteristics:


	FCA		MRS
1) Total installments		112		117
2) Frequency of payment	Quarterly		Quarterly
3) Update index	IGP-DI FGV		IGP-DI FGV
4) Total installment paid		35		38
5) Installment current value
Concession	R$	2	R$	2
Leasing	R$	29	R$	42

(b)

Ports The Company owns specialized port terminals as listed below:


		End of concession
*Terminal ()**	Localization	period
Tubarão Terminal	Vitória — ES		2020
Praia Mole Terminal	Vitória — ES		2020
Various Products Terminal	Vitória — ES		2020
Vila Velha Terminal	Vila Velha — ES		2023
Liquid Bulk Terminal	Vitória — ES		2020
Ponta da Madeira Maritime Terminal — Pier I	São Luís — MA		2018
Ponta da Madeira Maritime Terminal — Pier II	São Luís — MA		2010
Ponta da Madeira Maritime Terminal — Pier III	São Luís — MA		2018
Inácio Barbosa Maritime Terminal	Aracaju — SE		2012


(*)		Concessions with no disbursement.

(c)

Hydroelectric Projects

The Company develops projects of electricity generation with the objective of self-supply. The projects in which the Company has investments are:


		% Participation on
Project	Start-up of operations	energy generation
Funil	In operation		51.00
Candonga	In operation		50.00
Igarapava	In operation		38.15
Porto Estrela	In operation		33.33
Aimorés	In operation		51.00
Capim Branco I	In operation		48.42
Machadinho	In operation		8.77
Larona (*)	In operation		53.66
Balambano (*)	In operation		53.66
Capim Branco II	March of 2007		48.42
Estreito	September of 2010		30.00


(*)		Refers to the inderect participation trought CVRD Inco

7.31- Effects on the Statements if Price-Level Restatement were Applied (unaudited)

The main difference between the financial statements prepared according to Statutory Accounting Practices and those according to the price-level restatement method is due to the recognition, in the latter, of the net monetary restatement of permanent assets and stockholders’ equity.

The Balance Sheet and the Statement of Income by monetary restatement, at December 31, 2006 price levels were prepared shortly indexed by the IGP-M of FGV.:

BALANCE SHEET


Years ended December 31
	Consolidated				Parent Company
	2006		2005		2006		2005
Assets
Current assets		27,022		12,900		8,522		5,405
Non-Current
Long — Term Receivable		6,957		3,765		1,964		1,773
Investments		4,147		3,675		70,371		31,159
Intangible		12,066		3,734		12,960		4,656
Property, plant and equipment		100,951		55,302		34,587		29,552
Deferred charges		1,109		1,523		—		—

		125,230		67,999		119,882		67,140

		152,252		80,899		128,404		72,545

Liabilities and stockholders’ equity
Current assets		16,644		12,114		12,484		10,446
Non-Current
Income tax		761		—		2,830		—
Other		64,285		17,720		48,566		14,107
Deferred income		7		9		—		—
Minority interests		6,031		3,064		—		—
Stockholders’ equity
Paid-up capital		19,492		14,536		19,492		14,654
Capital reserves		7,019		6,336		7,019		6,218
Revenue reserves		38,013		27,120		38,013		27,120

		64,524		47,992		64,524		47,992

		152,252		80,899		128,404		72,545

STATEMENT OF INCOME


Years ended December 31
	Consolidated						Parent Company
	2006			2005			2006			2005
Operating revenues		47,914			36,741			20,383			18,808
Value Added taxes		(1,491	)		(1,411	)		(1,078	)		(1,044	)

Net operating revenues		46,423			35,330			19,305			17,764
Cost of products and services		(21,281	)		(16,954	)		(10,908	)		(9,979	)

Gross profit		25,142			18,376			8,397			7,785
Gross margin		54.2	%		52.0	%		43.5	%		43.8	%
Operating expenses, net		(4,355	)		(4,573	)		(2,194	)		(1,259	)

Operating profit before results of equity investments		20,787			13,803			6,203			6,526
Results of equity investments		(202	)		280			9,583			5,721

Operating profit		20,585			14,083			15,786			12,247
Non operating income		(218	)		309			285			—

Income before income tax and social contribution		20,367			14,392			16,071			12,247
Income tax and social contribution		(4,237	)		(2,462	)		(1,076	)		(1,392	)

Income before minority interest		16,130			11,930			14,995			10,855
Minority interest		(1,135	)		(1,075	)		—			—

Net income for the year		14,995			10,855			14,995			10,855

7.32- Insurance

Operational Risks

CVRD has an extensive risk management program that provides coverage and protection for all its assets as well as against possible losses from production interruptions, through All Risks policy. This program includes on-site inspection and training carried out by the various risk committees constituted by the Company, its subsidiaries and associated companies. The Company tries to harmonize risks in all areas and provide single and uniform treatment, and also seeking coverage in the domestic and international markets at levels compatible with an enterprise the size of CVRD.

Insurance

In order to provide the best instruments for more efficient risk management, in 2002, CVRD established a captive reinsurer, created for the purpose of improving risk management and to provide a more efficient instrument for negotiation, serving exclusively to underwrite the risks of the companies of the Group, in Brazil and abroad. Besides this, intensified action by the risk committees is being undertaken to accomplish technical recommendation from insurance and reinsurance market during annual inspections and are aligned with the group investments in operating and maintenance.

7.33- Profit Sharing Plan

The Company ’s profit sharing plan for the employees is consisting of a portion that is subject to the financial results measured through indicators as operating cash flow and for the achievement of the performance target of the units and individual.

7.34- Information by segment and geographical information

The informations by business segment, additionally presented, were prepared according to North America accounting rule — SFAS 131 “Disclosures about Segments of Enterprise and Related Information” issued by FASB “ Financial Accounting Standards Board”

The financial statements by business area are structured in accordance with the following segments: Ferrous products, Non-ferrous, Logistics, Aluminum, Steel, Corporate and other.

Consolidated Statement of Income by segment


Years ended December 31
	In million of reais
	2006
										Holdings
	Ferrous			Non-ferrous															Corporate
	minerals			minerals			Logistics			Aluminium			Steel			Others			center			Total
Operating revenues
Sales of ore and metals
Iron ore and pellets		26,410			—			—			—			—			—			—			26,410
Manganese and ferroalloys		1,225			—			—			—			—			—			—			1,225
Copper concentrate		—			1,692			—			—			—			—			—			1,692
Potash		—			310			—			—			—			—			—			310
Kaolin		—			473			—			—			—			—			—			473
Nickel and other products (*)		—			6,025			—			—			—			—			—			6,025

		27,635			8,500			—			—			—			—			—			36,135

Transport services		—			—			3,405			—			—			—			—			3,405
Sales of aluminum-related products		—			—			—			5,533			—			—			—			5,533
Sales os steel products		—			—			—			—			1,478			—			—			1,478
Other products and services		55			—			—			13			—			127			—			195

		27,690			8,500			3,405			5,546			1,478			127			—			46,746

Vale Added taxes		(714	)		(80	)		(548	)		(112	)		—			—			—			(1,454	)

Net operational revenues		26,976			8,420			2,857			5,434			1,478			127			—			45,292

Cost of products and services
Ores and metals		(10,632	)		(3,946	)		—			—			—			—			—			(14,578	)
Transport services		—			—			(1,770	)		—			—			—			—			(1,770	)
Aluminum-related products		—			—			—			(3,013	)		—			—			—			(3,013	)
Steel products		—			—			—			—			(1,231	)		—			—			(1,231	)
Other products and services		(59	)		—			—			—			—			(105	)		—			(164	)

		(10,691	)		(3,946	)		(1,770	)		(3,013	)		(1,231	)		(105	)		—			(20,756	)

Gross profit		16,285			4,474			1,087			2,421			247			22			—			24,536

Gross margin		60.4	%		53.1	%		38.0	%		44.6	%		16.7	%		—			—			54.2	%

Operational expenses
Selling and admnistrative		(1,424	)		(244	)		(92	)		(160	)		(15	)		(17	)		—			(1,952	)
Research and development		(269	)		(361	)		(22	)		—			—			(390	)		—			(1,042	)
Other operating expenses		(1,307	)		(136	)		—			(17	)		(19	)		26			—			(1,453	)

		(3,000	)		(741	)		(114	)		(177	)		(34	)		(381	)		—			(4,447	)

Operating profit (loss) before financial results and result of equity investments		13,285			3,733			973			2,244			213			(359	)		—			20,089

Results of equity investments		(435	)		(102	)		—			—			335			3			—			(199	)

Financial result, net		—			—			—			—			—			—			(1,745	)		(1,745	)

Operating profit (loss)		12,850			3,631			973			2,244			548			(356	)		(1,745	)		18,145

Non operating income		954			(1,427	)		—			—			135			123			—			(215	)

Income (loss) before income tax and social contribution		13,804			2,204			973			2,244			683			(233	)		(1,745	)		17,930

Income tax and social contribution		(1,931	)		(805	)		(144	)		(427	)		(79	)		(4	)		—			(3,390	)

Income (loss) before minority interests		11,873			1,399			829			1,817			604			(237	)		(1,745	)		14,540
Minority interests		(33	)		(301	)		(278	)		(497	)		—			—			—			(1,109	)

Income (loss) for the year		11,840			1,098			551			1,320			604			(237	)		(1,745	)		13,431


(*)		Nickel and other products by-products (copper, precious metals, cobalt e others) of CVRD Inco


	2005
										Holdings
	Ferrous			Non-ferrous															Corporate
	minerals			minerals			Logistics			Aluminium			Steel			Others			center			Total
Operating revenues
Sales of ore and metals
Iron ore and pellets		23,438			—			—			—			—			—			—			23,438
Manganese and ferroalloys		1,488			—			—			—			—			—			—			1,488
Copper concentrate		—			937			—			—			—			—			—			937
Potash		—			359			—			—			—			—			—			359
Kaolin		—			428			—			—			—			—			—			428

		24,926			1,724			—			—			—			—			—			26,650
Transport services		—			—			3,291			—			—			—			—			3,291
Sales of aluminum-related products		—			—			—			3,857			—			—			—			3,857
Sales os steel products		—			—			—			—			1,509			—			—			1,509
Other products and services		33			1			—			9			—			—			—			43

		24,959			1,725			3,291			3,866			1,509			—			—			35,350
Vale Added taxes		(701	)		(62	)		(494	)		(100	)		—			—			—			(1,357	)

Net operational revenues		24,258			1,663			2,797			3,766			1,509			—			—			33,993

Cost of products and services
Ores and metals		(9,531	)		(1,054	)		—			—			—			—			—			(10,585	)
Transport services		—			—			(1,977	)		—			—			—			—			(1,977	)
Aluminum-related products		—			—			—			(2,361	)		—			—			—			(2,361	)
Steel products		—			—			—			—			(1,364	)		—			—			(1,364	)
Other products and services		(21	)		(2	)		—			(1	)		—			—			—			(24	)

		(9,552	)		(1,056	)		(1,977	)		(2,362	)		(1,364	)		—			—			(16,311	)

Gross profit		14,706			607			820			1,404			145			—			—			17,682

Gross margin		60.6	%		36.5	%		29.3	%		37.3	%		9.6	%		—			—			52.0	%

Operational expenses
Selling and admnistrative		(1,232	)		(99	)		(93	)		(168	)		(26	)		(2	)		—			(1,620	)
Research and development		(210	)		(184	)		(10	)		(14	)		—			(254	)		—			(672	)
Other operating expenses		(716	)		(51	)		(52	)		3			(2	)		(16	)		—			(834	)

		(2,158	)		(334	)		(155	)		(179	)		(28	)		(272	)		—			(3,126	)

Operating profit (loss) before financial results and result of equity investments		12,548			273			665			1,225			117			(272	)		—			14,556

Results of equity investments

Gain on investments accounted by the equity method		94			—			—			—			397			1			—			492
Amortization of goodwill		(223	)		—			—			—			—			—			—			(223	)

		(129	)		—			—			—			397			1			—			269
Financial result, net
Financial expenses, net		—			—			—			—			—			—			(1,240	)		(1,240	)
Monetary and exchange rate variation, net		—			—			—			—			—			—			(36	)		(36	)

		—			—			—			—			—			—			(1,276	)		(1,276	)

Operating profit (loss)		12,419			273			665			1,225			514			(271	)		(1,276	)		13,549
Non operating income		—			—			—			—			—			298			—			298

Income (loss) before income tax and social contribution		12,419			273			665			1,225			514			27			(1,276	)		13,847
Income tax and social contribution		(2,136	)		(3	)		(98	)		(95	)		(46	)		10			—			(2,368	)

Income (loss) before minority interests		10,283			270			567			1,130			468			37			(1,276	)		11,479
Minority interests		(619	)		—			(121	)		(230	)		—			(66	)		—			(1,036	)

Income (loss) for the year		9,664			270			446			900			468			(29	)		(1,276	)		10,443

7.35- Social Report

The social report presents the social indicators, environmental, the functional, quantitative and relevant information about the exercise of business citizenship and was prepared in accordance with the resolution of Conselho Federal de Contabilidade — CFC No. 1003. The information presented was obtained from the auxiliary records and some management information of the Company direct and indirect subsidiaries and jointly controlled companies.


	Consolidated (unaudited)				Parent Company
Calculation Base	2006		2005		2006		2005
Gross Revenue		46,746		35,350		19,874		18,098
Operating income before financial results and equity results		20,089		14,556		5,865		6,153
Gross pay roll		2,025		1,217		868		695


			% of								% of								% of								% of
						Operating								Operating								Operating								Operating
Labor indicators	value		payroll			income			value		payroll			income			value		payroll			income			value		payroll			income
Nutrition		150		7	%		1	%		122		10	%		1	%		91		10	%		2	%		72		10	%		1	%
Compulsory payroll charges		524		26	%		3	%		460		38	%		3	%		332		38	%		6	%		287		41	%		5	%
Transportation		109		5	%		1	%		—		—			—			63		7	%		1	%		47		7	%		1	%
Private Pension		260		13	%		1	%		102		8	%		1	%		99		11	%		2	%		85		12	%		1	%
Health		150		7	%		1	%		91		7	%		1	%		70		8	%		1	%		54		8	%		1	%
Education		112		6	%		1	%		113		9	%		1	%		69		8	%		1	%		70		10	%		1	%
Employee profit sharing plan		563		28	%		3	%		235		19	%		2	%		312		36	%		5	%		180		26	%		3	%
Other		119		6	%		1	%		160		13	%		1	%		59		7	%		1	%		30		4	%		—

Total — Labor indicators		1,987		98	%		10	%		1,283		104	%		10	%		1,095		126	%		19	%		825		118	%		13	%


			% of								% of								% of								% of
			Operating			Net operating					Operating			Net operating					Operating			Net operating					Operating			Net operating
Social Indicators	value		income			revenue			value		income			revenue			value		income			revenue			value		income			revenue
Taxes (excluding payroll charges)		5,980		30	%		13	%		4,219		29	%		12	%		2,566		44	%		13	%		2,593		42	%		14	%
Citizenship investments		341		2	%		1	%		108		1	%		—			285		5	%		1	%		77		1	%		—
Social actions and projects		310		2	%		1	%		90		1	%		—			265		5	%		1	%		59		1	%		—
Community Aborigine		31		0	%		—			18		—			—			20		0	%		—			18		—			—
Environmental investments		474		2	%		1	%		197		1	%		1	%		317		5	%		2	%		129		2	%		1	%
Operating		369		2	%		1	%		175		1	%		—			303		5	%		2	%		108		2	%		1	%
External programs and/or projects		105		1	%		—			22		0	%		—			14		0	%		—			21		—			—

Total — Social Indicators		6,795		34	%		15	%		4,524		31	%		13	%		3,168		54	%		16	%		2,799		45	%		15	%


Workforce Indicators
Number of employees at the end of the period							55,819								38,828								26,006								21,882
Number of hirings during the period							8,117								6,910								5,364								4,424

Social and environmental projects developed by the Company are defined by:

( )

directors

(x)

directors and managers

( )

all employees

Occupational health and safety standards were defined by:

(x)

directors and managers

( )

all employees

( )

all + CIPA

Concerning Unions and the right to negotiate collectively and have internal representation of the employees, the Company:

(x )

is not involved in

( )

follows the standards of ILO

( )

encoureges and follows the ILO

The private pension system covers:

( )

directors

( )

directors and managers

(x)

all employees

Profits/ results sharing covers:

( )

directors

( )

directors and managers

(x)

all employees

On selecting suppliers, the same ethical standards of social and environmental responsibility adopted by the Company:

( )

will not be considered

( )

are suggested

(x)

are required

Concerning the participation of employees in voluntary work programs, the Company:

( )

is not involved in

( )

support

(x)

organizes and encoureges

Social responsabitlity criteria to select suppliers

Besides technical and economic aspects, the Company considers legal, environment, and health and security aspects in the selection of its suppliers.

From the legal point of view, it is required a regular situation on legal aspects and labour and social social security. The environment aspect is verified through documents which confirm the regular situation for the suppliers with the governmental agencies, besides evidence of preservation and environment policies. The engagement with health and security is estimated through questionary form which considers action of preventive policies. Also it is considers the performance of the suppliers with the local community. The Company hires suppliers considering the criteria above, moreover the Company implemented “Program a de Desenvolvim ento de Fornecedores (PDF). Promoting the suppliers´s development, the PDF extends the benefits to the local community and the bussiness área, supporting the socioeconomic development.

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


Period ended december 31, 2006														In thousands of reais
						Accounting information
	Participation (%)				Assets							Liabilities and stockholders’ equity							Statement of income
								Non-current
								assets						Non-Current assets
										Investments,
										property plant				Long-term,
										and				deferred							Cost of
										equipment				income and		Adjusted					products			Operating			Non-			Income tax			Adjusted
										and deferred				minority		stockholder			Net		and			income			operating			and Social			net income
	Total		Voting			Circulante		Long-term		charges		Current		interest		s’ equity			revenues		services			(expenses)			result			contribution			(loss)
Subsidiaries (a)
ALBRAS — Aluminio Brasileiro S.A.		51.00		51.00			506		1,443		1,067		504		1,115		1,397			2,335		(1,490	)		(234	)		—			(160	)		451
ALUNORTE — Alumina do Norte Brasil S.A.		57.03		61.74			833		100		4,042		591		1,203		3,182			2,703		(1,561	)		(282	)		—			(220	)		640
Brasilux S.A.		100.00		100.00			2		33		1		13		—		23			—		—			(1	)		—			—			(1	)
Companhia Paulista de Ferro Ligas		100.00		100.00			59		183		1		140		99		4			—		—			4			11			(11	)		4
Companhia Portuaria Baia de Sepetiba — CPBS		100.00		100.00			174		6		153		30		—		303			285		(99	)		10			—			(67	)		129
CVRD Inco		87.73		87.73			9,644		372		37,285		4,198		13,539		29,564			6,025		(2,760	)		82			(1,427	)		(798	)		1,122
CVRD International S.A. (b)		100.00		100.00			11,728		18,780		34,608		6,552		42,570		15,992			17,609		(13,190	)		719			949			(107	)		5,980
CVRD Overseas Ltd.		100.00		100.00			706		552		895		1,640		43		471			2,751		(1,875	)		(49	)		—			—			783
Docepar S.A.		100.00		100.00			12		321		—		27		277		30			—		—			(13	)		—			—			(14	)
Ferrovia Centro — Atlantica S.A.		100.00		100.00			275		128		1,511		146		1,919		(151	)		711		(701	)		(40	)		—			—			(30	)
Ferro Gusa Carajas S.A.		77.97		77.97			114		1		297		359		1		53			119		(135	)		(55	)		—			—			(71	)
Florestas Rio Doce S.A.		99.90		100.00			30		29		4		31		9		24			—		—			28			—			(4	)		24
Mineracoes Brasileiras Reunidas S.A. — MBR		89.80		89.80			1,630		77		3,444		759		182		4,210			3,779		(1,929	)		1,161			6			(544	)		2,473
Mineracao Tacuma Ltda.		100.00		100.00			—		—		1,638		17		1,788		(166	)		—		—			(50	)		—			—			(50	)
Navegacao Vale do Rio Doce S.A. — DOCENAVE		100.00		100.00			104		46		132		98		93		90			61		(18	)		17			—			(25	)		35
Rio Doce International Finance Ltd.		100.00		100.00			1		—		—		8		—		(8	)		—		(1	)		192			—			—			191
Rio Doce Manganese Europe- RDME		100.00		100.00			219		—		74		89		3		201			444		(426	)		(26	)		2			(1	)		(3	)
Rio Doce Manganese Norway AS		100.00		100.00			105		8		63		87		12		75			172		(133	)		(28	)		—			—			11
Rio Doce Manganes S.A.		100.00		100.00			421		159		361		273		254		414			626		(556	)		(232	)		(72	)		15			(220	)
Salobo Metais S.A.		100.00		100.00			1		—		888		1		612		276			—		—			—			—			—			—
TVV — Terminal de Vila Velha S.A.		100.00		99.89			46		8		58		19		8		84			120		(86	)		(1	)		—			(11	)		22
Urucum Mineracao S.A.		100.00		100.00			100		21		67		29		113		47			152		(90	)		(44	)		(3	)		(5	)		11
Vale Overseas Ltd.		100.00		100.00			447		12,362		—		447		12,362		—			—		—			—			—			—			—
Valesul Aluminio S.A.		100.00		100.00			168		74		135		99		32		247			566		(438	)		(31	)		6			(34	)		69

Jointly-controlled companies (a)
California Steel Industries, Inc.		50.00		50.00			877		5		525		338		320		747			2,957		(2,483	)		(80	)		—			(157	)		179
Companhia Coreano-Brasileira de Pelotizacao — KOBRASCO		50.00		50.00			147		22		254		180		147		95			755		(613	)		(15	)		—			(49	)		78
Companhia Hispano-Brasileira de Pelotizacao — HISPANOBRAS		50.89		51.00			242		47		90		182		54		144			674		(540	)		(28	)		—			(42	)		64
Companhia italo-Brasileira de Pelotizacao — ITABRASCO		50.90		51.00			194		58		95		156		64		127			616		(507	)		(25	)		—			(33	)		51
Companhia Nipo-Brasileira de Pelotizacao — NIBRASCO		51.00		51.11			304		66		190		334		59		167			1,192		(982	)		(57	)		—			(70	)		83
Minas da Serra Geral S.A. — MSG		50.00		50.00			34		14		81		3		19		105			25		(11	)		(1	)		—			(3	)		10
Mineracao Rio do Norte S.A.		40.00		40.00			174		519		962		846		224		585			926		(521	)		(7	)		(6	)		(46	)		346
MRS Logistics S.A.		40.45		37.23			726		286		1,464		980		582		913			1,964		(1,039	)		(103	)		(7	)		(273	)		542
Samarco Mineracao S.A.		50.00		50.00			739		213		2,119		863		1,303		906			2,462		(883	)		(351	)		4			(235	)		997
Baovale Mineracao S. A.		50.00		100.00			50		—		51		4		—		98			30		(5	)		(17	)		—			(3	)		5

Notes:

(a)		The amounts above correspond to totals presented in the Financial Statements of these companies on December 31, 2006 adjusted and unaudited;

(b)		Previously known as Itabira Rio Doce Company Ltd. — ITACO.

Additional information of the main investee companies available on the CVRD website, www.cvrd.com.br, investor relations.

9- Report of the Independent Accountants
(Convenience Translation into English from the Original Previously Issued in Portuguese)

1. We have audited the accompanying balance sheets of Companhia Vale do Rio Doce, holding company and consolidated, as of December 31, 2006 and 2005, and the related statements of income, changes in stockholders’ equity, and changes in financial position for the years then ended, prepared under the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits. The audits of the financial statements for the years ended December 31, 2006 and 2005 of certain subsidiaries, jointly-owned and associated companies, mentioned in note 7.16, accounted for by the equity method, were carried out by other independent auditors and our opinion, in regard to these investments as of December 31, 2006 in the amount of R$22,042 million and as of December 31, 2005, in the amount of R$7,386 million and the earnings therefrom for the years ended December 31, 2006 and 2005 in the amounts of R$2,806 million and R$4,058 million, respectively, is based solely on the reports of these other auditors.

2. Our audits were conducted in accordance with auditing standards generally accepted in Brazil and included: (a) planning of the audit, considering the materiality of the amounts presented, the volume of transactions and the Company’s and its investees accounting and internal control systems; (b) examining, on a test basis, the evidence supporting the amounts and disclosures in the financial statements; and (c) the evaluation of the accounting practices followed and significant estimates made by management, as well as the presentation of the financial statements taken as a whole.

3. In our opinion, based on our audits and on the reports of the other auditors, the financial statements referred to in paragraph 1 present fairly, in all material respects, the financial position of Companhia Vale do Rio Doce, holding company and consolidated, as of December 31, 2006 and 2005, the results of its operations, the changes in its stockholders’ equity and the changes in its financial position for the years then ended, in conformity with accounting practices followed in Brazil.

4. Our audits were conducted for the purpose of forming an opinion on the financial statements referred to in paragraph 1, taken as a whole. The statements of cash flows (holding company and consolidated), of value added (holding company and consolidated), of labor and social indicators (holding company) and segmentation of business (consolidated), are presented for purposes of additional information on Companhia Vale do Rio Doce and are not a required part of the basic financial statements according to the accounting practices followed in Brazil. The statements of cash flows (holding company and consolidated), of value added (holding company and consolidated), of labor and social indicators (holding company) and segmentation of business (consolidated), have been subjected to the same audit procedures as those described in paragraph 2 and, in our opinion, this additional information is fairly presented in all material respects in relation to the financial statements for the years ended December 31, 2006 and 2005, taken as a whole.

Rio de Janeiro, March 7, 2007


DELOITTE TOUCHE TOHMATSU		Marcelo Cavalcanti Almeida
Auditores Independentes		Accountant
CRC-SP 011609/O-8 “F”-RJ		CRC-RJ 036-206/O-5

10- Opinion of the Fiscal Council on the Annual Report and Financial Statements at December 31, 2006

The Fiscal Council of Companhia Vale do Rio Doce, in carrying out its legal and statutory duties, after examining the Company’s Annual Report, Balance Sheet, Statement of Income, Statement of Changes in Stockholders’ Equity, Statement of Changes in Financial Position and the respective Notes to the Financial Statements relative to the fiscal year ended December 31, 2006, and based on the opinion of the independent accountants, is of the opinion that the mentioned information, examined in light of applicable corporate legislation should be approved by the Annual Stockholders’ General Meeting.

Rio de Janeiro, March 7, 2007


Marcelo Amaral Moraes		Aníbal Moreira dos Santos
Chairman


Joaquim Vieira Ferreira Levy		José Bernardo de Medeiros Neto

11- Opinion of the Board of Directors on the Annual Report and Financial Statements at December 31, 2006

The Board of Directors of Companhia Vale do Rio Doce, having examined the Annual Report, Balance Sheet and other Financial Statements of the Company relative to the fiscal year ended December 31, 2006, unanimously approved said proposal.

In view of this, the Board is of the opinion that the above mentioned documents should be approved by the Annual Stockholders’ General Meeting.

Rio de Janeiro, March 7, 2007


Sérgio Ricardo Silva Rosa		Mário da Silveira Teixeira Júnior
Chairman		Member


Arlindo Magno de Oliveira		Oscar Augusto de Camargo Filho
Member		Member


Erik Person		Eduardo Fernando Jardim Pinto
Member		Member


Jaques Wagner		Francisco Augusto da Costa e Silva
Member		Member


Hiroshi Tada		Jorge Luiz Pacheco
Member		Member


Renato da Cruz Gomes
Member

B — Additional Information

12 — Cash generation (Unaudited)

The operating cash generation measured by EBITDA (earnings before financial results, results of equity investments, interest, income tax and depreciation, amortization and depletion, more dividends received) was R$ 22,759 on 2006, against R$16,701 on 2005, an increase of 36 %.

EBITDA is not a BR GAAP measure and does not represent cash flow for the periods presented and should not be considered as an alternative to net income (loss), as an indicator of our operating performance or as an alternative to cash flow as a source of liquidity.

Our definition of EBITDA may not be comparable with EBITDA as defined by other companies.

Although EBITDA, as defined above, it does not provide a US GAAP measure of operating cash flows, our management uses it to measure our operating performance and financial analysts in evaluating our business commonly use it.

EBITDA


	Quarter									Accumulated
	4Q/06			3Q/06			4Q/05			2006			2005
Operating profit — EBIT		7,080			5,250			3,659			20,089			14,556
Depreciation / amortization of goodwill		873			604			538			2,530			1,994

		7,953			5,854			4,197			22,619			16,550
Dividends received		4			41			4			140			151

EBITDA		7,957			5,895			4,201			22,759			16,701

Depreciation / amortization of goodwill		(873	)		(604	)		(538	)		(2,530	)		(1,994	)
Dividends received		(4	)		(41	)		(4	)		(140	)		(151	)
Equity Results		(144	)		(14	)		105			(199	)		269
Non-operating income		(1,006	)		34			—			(215	)		298
Financial results, net		(771	)		(249	)		(764	)		(1,745	)		(1,276	)
Income tax and social contribution		(1,420	)		(792	)		(153	)		(3,390	)		(2,368	)
Minority interests		(371	)		(256	)		(210	)		(1,109	)		(1,036	)

Net income		3,368			3,973			2,637			13,431			10,443

Consolidated EBITDA by segment


	EBITDA
	Quarter									Accumulated
Segments	4Q/06			3Q/06			4Q/05			2006			2005
Ferrous minerals		3,665			4,446			3,529			14,706			13,582
Non-ferrous minerals		3,347			428			157			4,231			428
Logistics		384			447			221			1,400			1,217
Holdings
Aluminum		631			596			339			2,435			1,446
Steel		24			111			46			336			298
Others		(94	)		(133	)		(91	)		(349	)		(270	)

		7,957			5,895			4,201			22,759			16,701

13- Board of Directors, Fiscal Council, Advisory Committees and Executive Officers

Board of Directors

Sérgio Ricardo Silva Rosa
Chairman

Arlindo Magno de Oliveira
Vice Chairman

Eduardo Fernando Jardim Pinto

Erik Persson

Francisco Augusto da Costa e Silva

Hiroshi Tada

Jorge Luiz Pacheco

Julio Sérgio Gomes de Almeida

Mário da Silveira Teixeira Júnior

Oscar Augusto de Camargo Filho

Renato da Cruz Gomes

Advisory Committees of the Board of Directors

Controlling Committee
Antonio José de Figueiredo Ferreira
Inácio Clemente da Silva
Paulo Roberto Ferreira de Medeiros

Executive Development Committee
Arlindo Magno de Oliveira
João Moisés de Oliveira
Olga Nietta Loffredi
Oscar Augusto de Camargo Filho

Strategic Committee
Roger Agnelli
Gabriel Stoliar
Demian Fiocca
Mário da Silveira Teixeira Júnior
Oscar Augusto de Camargo Filho
Sérgio Ricardo Silva Rosa

Finance Committee
Fábio de Oliveira Barbosa
Wanderlei Viçoso Fagundes
Ivan Luiz Modesto Schara

Governance and Sustainability Committee
Renato da Cruz Gomes
Ricardo Carvalho Giambroni
Ricardo Simonsen

Fiscal Council

Marcelo Amaral Moraes
Chairman

Anibal Moreira dos Santos

Bernard Appy

José Bernardo de Medeiros Neto

Executive Officers

Roger Agnelli
Chief Executive Officer

Carla Grasso
Executive Officer for Human Resources and Corporate Services

Eduardo de Salles Bartolomeo
Executive Officer for Logistics

Fábio de Oliveira Barbosa
Chief Financial Officer and Investor Relations

Gabriel Stoliar
Executive Officer for Planning

José Carlos Martins
Executive Officer for Ferrous Minerals

José Lancaster
Executive Officer for Copper, Coal and Aluminum

Murilo de Oliveira Ferreira
Executive Officer for Nickel

Tito Botelho Martins
Executive Officer for Corporate Affairs

Marcus Vinícius Dias Severini
Chief Officer of Control Department

Vera Lúcia de Almeida P. Elias
Chief Accountant
CRC-RJ — 043059/O-8

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: March 9, 2007	By:	/s/ Fabio de Oliveira Barbosa
		Fabio de Oliveira Barbosa
		Chief Financial Officer