Edgar Filing: Companhia Vale do Rio Doce

6-K

United States
Securities and Exchange Commission

Washington, D.C. 20549

FORM 6-K

Report of Foreign Private Issuer
Pursuant To Rule 13a-16 or 15d-16
of the
Securities Exchange Act of 1934

For the month of

May 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


USGAAP Financial Pages

Condensed Consolidated Balance Sheets as of March 31, 2007 and December 31, 2006

Condensed Consolidated Statements of Income for the three-month periods ended March 31, 2007, December 31, 2006 and March 31, 2006

Condensed Consolidated Statements of Cash Flows for the three-month periods ended March 31, 2007, December 31, 2006 and March 31, 2006

Condensed Consolidated Statements of Changes in Stockholders’ Equity for the three-month periods ended March 31, 2007, December 31, 2006 and March 31, 2006

Notes to the Condensed Consolidated Financial Information

Signature Page

This report on Form 6-K is hereby incorporated by reference into the Registration Statement on Form F-3 of Vale Overseas Limited, File No. 333-138617-01 and the Registration Statement on Form F-3 of Companhia Vale do Rio Doce, File No. 333-138617 and shall be deemed to be a part thereof from the date on which this report is furnished, to the extent not superseded by documents or reports subsequently filed or furnished.

USGAAP FINANCIAL PAGES

Condensed Consolidated Balance Sheets
Expressed in millions of United States dollars


	March 31,		December 31,
	2007		2006
	(unaudited)
Assets
Current assets
Cash and cash equivalents		3,954		4,448
Accounts receivable
Related parties		811		675
Unrelated parties		3,032		2,929
Loans and advances to related parties		79		40
Inventories		3,177		3,493
Deferred income tax		439		410
Recoverable taxes		452		414
Others		477		531

		12,421		12,940


Property, plant and equipment, net		41,165		38,007
Investments in affiliated companies and joint ventures and other investments, net of provision for losses on equity investments		2,930		2,353
Other assets
Goodwill on acquisition of subsidiaries		4,881		4,484
Loans and advances
Related parties		2		5
Unrelated parties		117		109
Prepaid pension cost		1,033		977
Prepaid expenses		287		360
Judicial deposits		949		852
Advances to suppliers — energy		493		443
Recoverable taxes		273		305
Unrealized gain on derivative instruments		155		22
Others		71		69

		8,261		7,626

TOTAL		64,777		60,926

The accompanying notes are an integral part of this condensed consolidated financial information.

F-1

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

(Continued)


	March 31,			December 31,
	2007			2006
	(unaudited)
Liabilities and stockholders’ equity
Current liabilities
Suppliers		2,474			2,382
Payroll and related charges		352			451
Minimum annual dividends attributed to stockholders		1,494			1,494
Current portion of long-term debt — unrelated parties		746			711
Short-term debt		1,021			723
Loans from related parties		30			25
Provision for income taxes		713			817
Taxes payable		103			119
Employees post-retirement benefits		108			107
Others		541			483

		7,582			7,312


Long-term liabilities
Employees post-retirement benefits		1,951			1,841
Long-term debt — unrelated parties		21,682			21,122
Provisions for contingencies (Note 14 (c))		1,710			1,641
Unrealized gain on derivative instruments		691			705
Deferred income tax		4,796			4,527
Provisions for asset retirement obligations		662			676
Others		857			618

		32,349			31,130

Minority interests		2,704			2,811


Commitments and contingencies (Note 14)

Stockholders’ equity
Preferred class A stock — 3,600,000,000 no-par-value shares authorized and 959,758,200 issued		4,702			4,702
Common stock — 1,800,000,000 no-par-value shares authorized and 1,499,898,858 issued		3,806			3,806
Treasury stock — 15,170,644 preferred and 28,291,020 common shares		(389	)		(389	)
Additional paid-in capital		498			498
Other cumulative comprehensive deficit		(809	)		(1,007	)
Undistributed retained earnings		9,992			9,555
Unappropriated retained earnings		4,342			2,508

		22,142			19,673

TOTAL		64,777			60,926

The accompanying notes are an integral part of this condensed consolidated financial information.

F-2

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


	Three-month periods ended
	March 31,			December 31,			March 31,
	2007			2006			2006
Operating revenues, net of discounts, returns and allowances
Sales of ores and metals		6,663			6,451			2,760
Revenues from logistic services		331			342			289
Aluminum products		649			674			429
Other products and services		37			27			12

		7,680			7,494			3,490
Taxes on revenues		(191	)		(181	)		(150	)

Net operating revenues		7,489			7,313			3,340

Operating costs and expenses
Cost of ores and metals sold		(3,813	)		(3,760	)		(1,256	)
Cost of logistic services		(188	)		(204	)		(174	)
Cost of aluminum products		(369	)		(392	)		(257	)
Others		(20	)		(31	)		(8	)

		(4,390	)		(4,387	)		(1,695	)
Selling, general and administrative expenses		(268	)		(269	)		(168	)
Research and development		(113	)		(175	)		(71	)
Others		(16	)		(302	)		(70	)

		(4,787	)		(5,133	)		(2,004	)

Operating income		2,702			2,180			1,336

Non-operating income (expenses)
Financial income		121			181			42
Financial expenses		(659	)		(708	)		(213	)
Foreign exchange and monetary gains, net		770			204			259
Gain on sale of investments		—			311			9

		232			(12	)		97

Income before income taxes, equity results and minority interests		2,934			2,168			1,433

Income taxes
Current		(833	)		(314	)		(242	)
Deferred		191			(237	)		(53	)

		(642	)		(551	)		(295	)

Equity in results of affiliates and joint ventures		138			183			156
Minority interests		(213	)		(227	)		(123	)

Net income		2,217			1,573			1,171

Basic and diluted earnings per Preferred Class A Share		0.92			0.65			0.51
Basic and diluted earnings per Common Share		0.92			0.65			0.51
Weighted average number of shares outstanding (thousands of shares)
Common shares		1,471,608			1,471,608			1,471,608
Preferred Class A shares		944,586			944,586			831,448

The accompanying notes are an integral part of this condensed consolidated financial information.

F-3

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


	Three-month periods ended
	March 31,			December 31,			March 31,
	2007			2006			2006
Cash flows from operating activities:
Net income		2,217			1,573			1,171
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation, depletion and amortization		392			379			181
Dividends received		90			64			112
Equity in results of affiliates and joint ventures and change in provision for losses on equity investments		(138	)		(183	)		(156	)
Deferred income taxes		(191	)		237			53
Gain on sale of investments		—			(311	)		(9	)
Foreign exchange and monetary losses (gains), net		(772	)		(576	)		(291	)
Unrealized derivative losses (gains), net		(85	)		94			44
Minority interests		213			227			123
Interest payable (receivable), net		173			79			(28	)
Others		23			(66	)		59
Decrease (increase) in assets:
Accounts receivable		103			37			162
Inventories		673			865			(17	)
Others		(404	)		124			(108	)
Increase (decrease) in liabilities:
Suppliers		46			189			(367	)
Payroll and related charges		(161	)		(72	)		(108	)
Income taxes		(54	)		(25	)		(178	)
Others		157			208			(172	)

Net cash provided by operating activities		2,282			2,843			471

Cash flows from investing activities:
Loans and advances receivable
Related parties
Additions		—			(10	)		(7	)
Repayments		10			—			3
Others		—			(49	)		48
Guarantees and deposits		(32	)		(17	)		(23	)
Additions to investments		(52	)		(46	)		(2	)
Additions to property, plant and equipment		(1,106	)		(1,781	)		(855	)
Proceeds from disposal of investments		—			405			14
Proceeds from disposals of property, plant and equipment		—			—			9
Cash used to acquire subsidiaries, net cash of acquired		(2,023	)		(13,195	)		—

Net cash used in investing activities		(3,203	)		(14,693	)		(813	)

Cash flows from financing activities:
Short-term debt, additions		497			1,151			622
Short-term debt, repayments		(206	)		(670	)		(572	)
Loans
Related parties
Additions		117			—			10
Repayments		(113	)		(22	)		(40	)
Issuances of long-term debt
Related parties		—			14			—
Others		6,463			20,630			1,347
Repayments of long-term debt
Related parties		—			—			(321	)
Others		(6,205	)		(6,908	)		—
Interest attributed to stockholders		—			(650	)		—
Dividends to minority interest		(61	)		(9	)		—

Net cash provided by financing activities		492			13,536			1,046

Increase (decrease) in cash and cash equivalents		(429	)		1,686			704
Effect of exchange rate changes on cash and cash equivalents		(65	)		(129	)		(101	)
Cash and cash equivalents, beginning of period		4,448			2,891			1,041

Cash and cash equivalents, end of period		3,954			4,448			1,644

Cash paid during the period for:
Interest on short-term debt		(1	)		(1	)		(1	)
Interest on long-term debt		(205	)		(252	)		(94	)
Income tax		(606	)		(121	)		(187	)
Non-cash transactions
Income tax paid with credits		(119	)		(25	)		(30	)
Interest capitalized		(22	)		(30	)		(31	)

The accom panying notes are an integral part of this condensed consolidated financial inform ation.

F-4

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


	Three-month periods ended
	March 31, 2007			December 31, 2006			March 31, 2006
Preferred class A stock (including six special shares)
Beginning of the period		4,702			4,702			2,150
Capital increase		—			—			2,552

End of the period		4,702			4,702			4,702

Common stock
Beginning and end of the period		3,806			3,806			3,806
Treasury stock
Beginning and end of the period		(389	)		(389	)		(88	)

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

Other cumulative comprehensive deficit
Cumulative translation adjustments
Beginning of the period		(1,631	)		(1,922	)		(2,856	)
Change in the period		(98	)		291			850

End of the period		(1,729	)		(1,631	)		(2,006	)

Unrealized gain on available-for-sale securities
Beginning of the period		271			130			127
Change in the period		315			141			5

End of the period		586			271			132
Superavit (deficit) accrued pension plan
Beginning of the period		353			—			—
Change in the period		(9	)		460			—
Initial recognition effect		—			(107	)		—

End of the period		344			353			—

Cash flow hedge
Change in the period		(10	)		—			—

End of the period		(10	)		—			—

Total other cumulative comprehensive deficit		(809	)		(1,007	)		(1,874	)

Undistributed retained earnings
Beginning of the period		9,555			4,706			4,357
Transfer from unappropriated retained earnings		437			4,849			330

End of the period		9,992			9,555			4,687

Unappropriated retained earnings
Beginning of the period		2,508			7,349			3,983
Net income		2,217			1,573			1,171
Dividends and interest attributed to stockholders
Preferred class A stock		—			(585	)		—
Common stock		—			(923	)		—
Appropriation to reserves		(383	)		(4,906	)		(330	)

End of the period		4,342			2,508			4,824

Total stockholders’ equity		22,142			19,673			16,555


Preferred class A stock (including six special shares)		959,758,200			959,758,200			959,758,200
Common stock		1,499,898,858			1,499,898,858			1,499,898,858
Treasury stock								—
Beginning of the period		(43,463,536	)		(43,463,536	)		(28,313,936	)
Sales		1,872			—			—

End of the period		(43,461,664	)		(43,463,536	)		(28,313,936	)

		2,416,195,394			2,416,193,522			2,431,343,122

Dividends and interest attributed to stockholders (per share):
Preferred class A stock (including six special shares)		—			0.61			—
Common stock		—			0.61			—

The accompanying notes are an integral part of this condensed consolidated interim financial information.

F-5

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

The Company and its operation


		Companhia Vale do Rio Doce (CVRD) is a limited liability company, duly organized and existing under the laws of the Federative Republic of Brazil. Our operations are carried out through CVRD and its subsidiary companies, joint ventures and affiliates, and mainly consist of mining, non-ferrous metal production and logistics, as well as energy, aluminum and steel activities. Further details of our joint ventures and affiliates are described in Note 9.

		On March 31, 2007, the main operating subsidiaries we consolidate are as follows:

% voting

Head office

Subsidiary

% ownership

capital

location

Principal activity

Alumina do Norte do Brasil S.A. — Alunorte (“Alunorte”)

57.03

61.74

Brazil

Alumina

Alumínio Brasileiro S.A. — Albras (“Albras”)

51.00

Brazil

Aluminum

CADAM S.A (CADAM)

61.48

100.00

Brazil

Kaolin

CVRD International S.A.

100.00

Swiss

Trading

CVRD Overseas Ltd.

100.00

Cayman Islands

Trading

CVRD Inco (2)

100.00

Canada

Nickel

Ferrovia Centro-Atlântica S. A.

100.00

Brazil

Logistics

Minerações Brasileiras Reunidas S.A. — MBR

89.80

Brazil

Iron ore

Mineração Onça Puma Ltda

100.00

Brazil

Nickel

Log-In Logística Intermodal S.A. (4)

100.00

Brazil

Logistics

Pará Pigmentos S.A. (“PPSA”)

86.17

85.57

Brazil

Kaolin

PT International Nickel Indonesia Tbk (“PT Inco”) (3)

61.16

Indonesia

Nickel

Rio Doce Manganês S.A.

100.00

Brazil

Manganese and Ferroalloys

Rio Doce Manganèse Europe — RDME

100.00

France

Ferroalloys

Rio Doce Manganese Norway — RDMN

100.00

Norway

Ferroalloys

Urucum Mineração S.A.

100.00

Brazil

Iron ore, Ferroalloys and Manganese

Valesul Aumínio S.A. (1)

100.00

Brazil

Aluminum


(1)		Subsidiary consolidated as from July, 2006 (Note 9);

(2)		Subsidiary consolidated as from October, 2006 (Note 9);

(3)		Through Inco Limited; and

(4)		Previously known as Navegação Vale do Rio Doce S.A. — Docenave

2		Basis of consolidation

		All majority-owned subsidiaries in which we have both share and management control are consolidated. All significant intercompany accounts and transactions are eliminated. Our variable interest entities in which we are the primary beneficiary are consolidated. Investments in unconsolidated affiliates and joint ventures are accounted for under the equity method. Included in this category are certain joint ventures in which we have majority ownership but, by force of shareholders’ agreements, do not have effective management control. We provide for losses on equity investments with negative stockholders’ equity where applicable (Note 9).

		We evaluate the carrying value of our listed investments relative to publicly available quoted market prices. If the quoted market price is below book value, and such decline is considered other than temporary, we write-down our equity investments to quoted market value.

		We define joint ventures as businesses in which we and a small group of other partners each participate actively in the overall entity management, based on a shareholders agreement. We define affiliates as businesses in which we participate as a minority stockholder but with significant influence over the operating and financial policies of the investee.

F-6

		Our investments in hydroelectric projects are made via consortium contracts under which we have an undivided interest in assets and are liable for our proportionate share of liabilities and expenses, which is based on our proportionate share of power output. We do not have joint liability for any obligations, and all our recorded costs, income, assets and liabilities relate to the entities within our group. Since there is no separate legal entity for the project, there are no separate financial statements, income tax return, net income or shareholders’ equity. Brazilian corporate law explicitly provides that no separate legal entity exists as a result of a consortium contract, and our external legal counsel has confirmed this conclusion. So, we recognize our proportionate share of costs and our undivided interest in assets relating to hydroelectric projects.

3		Summary of significant accounting policies

		Our condensed consolidated interim financial information for the three-month periods ended March 31, 2007, December 31, 2006, and March 31, 2006 is unaudited. However, in our opinion, such condensed consolidated financial information includes all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the results for interim periods. The results of operations for the three-month period ended March 31, 2007 are not necessarily indicative of the results to be expected for the full fiscal year ending December 31, 2007.

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

		We have remeasured all assets and liabilities into U.S. dollars at the current exchange rate at each balance sheet date (R$2.0478 and R$2.1342 at March 31, 2007 and December 31, 2006, respectively to US$1.00 or the first available exchange rate if exchange on the last day of the period, was not available), and all accounts in the statements of income (including amounts relative to local currency indexation and exchange variances on assets and liabilities denominated in foreign currency) at the average rates prevailing during the period. The translation gain or loss resulting from this remeasurement process is included in the cumulative translation adjustments account in stockholders’ equity.

		Effective January 1, 2007, the Company adopted the provisions of FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes. FIN 48 prescribes a comprehensive model for how a company should recognize, measure, present, and disclose in its financial statements uncertain tax positions that the company has taken or expects to take on a tax return (including a decision whether to file or not to file a return in a particular jurisdiction). Under the Interpretation, the financial statements reflects expected future tax consequences of such positions presuming the taxing authorities’ full knowledge of the position and all relevant facts, but without considering time values.

4		Recently-issued accounting pronouncements

		In February 2007, the Financial Accounting Standards Board issued SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities”. SFAS No. 159 permits entities to choose to measure many financial instruments and certain other items at fair value. The objective is to improve financial reporting by providing entities with the opportunity to mitigate volatility in reported earnings caused by measuring related assets and liabilities differently without having to apply complex hedge accounting provisions. This Statement is expected to expand the use of fair value measurement, which is consistent with the Board’s long-term measurement objectives for accounting for financial instruments. The fair value option established by this Statement permits all entities to choose to measure eligible items at fair value at specified election dates. This standard is effective for fiscal years ending on or after November 15, 2007. We are currently studying the impact of this standard.

F - 7

5		Major acquisitions, disposals and restructuring

		In March 2007, we acquired the remaining 18% minority interest in Ferro-Gusa held by Nucor do Brasil S.A. for US$20 and it became a wholly-owned subsidiary.

		In December 2006, we sold our total interest in Siderar — S.A.I.C, corresponding to 4.85%, a steel plant located in Argentina to Ternium S.A. for US$108 generating a gain of US$96.

		In November 2006, we sold 5,362,928 common shares issued by Usinas Siderúrgicas Minas Gerais —USIMINAS (“Usiminas”) to Nippon Steel, Votorantim Participações S/A, and Camargo Corrêa S/A, for the amount of US$176, generating a gain of US$175. We will keep 6.608.608 common shares which are bound by the current shareholders agreement of Usiminas and are necessary in order for us to be a member of the controlling shareholder group of Usiminas and the remaining 13,839,190 common shares are being object of a secondary public offering currently in place.

		During the third quarter of 2006, we sold 1,361,100 shares of Gerdau S.A. for US$19. During the forth quarter we sold the remaining 3,379,825 shares of Gerdau S.A. for US$48. The total gain related to this operation amounted to US$56.

		In April 2007, we concluded the acquisition of 100% of AMCI Holdings Australia Pty — AMCI HÁ, a private company held in Australia, which operates and controls coal assets through joint ventures, for US$656.

6		Acquisition of Inco (unaudited)

		In October, 2006 we acquired Inco Limited (Inco), a Canadian-based nickel company, and the world’s largest nickel prossessing capacity and reserve base, for US$13 billion, corresponding to 174,623,019 common shares for Cdn$ 86.00 each share, representing 75.66% of its outstanding shares. By November 3, 2006 we had already acquired a total of 196,078,276 shares by aproximatelly US$15 billion, representing 86.57% of Inco’s capital. Due to the issuing of new shares related to the convertible debt, on December 31, we had 87.73% of the outstanding shares. 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 indirect subsidiary.

		Pursuant to the amalgamation, Inco changed its name to “CVRD Inco Limited” (CVRD Inco) and we now own 100.00% of share capital for which we paid US$2 billion.

		In December 2006 we concluded several transactions to take out the bridge loan aiming to extend our average debt maturity close to the pre-acquisition level, which is close to ten years, as described in Note 10.

		The purchase price allocations based on the fair values of acquired assets and liabilities was based on management’s preliminary internal valuation estimates. Such allocations will be finalized based on valuation and other studies which are in course, performed by us with the assistance of outside valuation specialists. Accordingly, the purchase price allocation adjustments set forth bellow are preliminary and are subject to revision, which may be material.

		Fair values used herein were calculated using current pension and post retirement benefits obligation funded status, current interest rates and sales prices for finished goods, estimated future production, investment, costs, commodity prices and cash flows.

		The purchase price allocation in relation to the fair value of assets and liabilities acquired will be finalized in 2007.

F - 8

On the preparation of this information our acquisition is of 100.00% of Inco’s shares.


Total disbursements	17,023
Transaction costs	38

Purchase price	17,061
Book value of assets acquired and liabilities assumed, net	(4,657	)
Adjustment to fair value of inventory	(2,008	)
Adjustment to fair value of property, plant and equipment	(10,309	)
Change of control obligations	949
Adjustment to fair value of other liabilities assumed	834
Deferred taxes on the above adjustments	2,384

Goodwill	4,254

Pro forma information considers that our acquisition of 100.00% of Inco as if it was completed at the beginning of each period.


	Three-month periods ended
	March 31, 2006
	CVRD
	Consolidated			Inco			Pro forma
Net operating revenues		3,340			1,211			4,551
Operating costs and expenses		(2,004	)		(923	)		(2,927	)

Operating income		1,336			288			1,624
Non-operating income		97			(250	)		(153	)

Income before income taxes, equity results and minority interests		1,433			38			1,471
Income taxes		(295	)		(5	)		(300	)
Equity in results of affiliates and joint ventures		156			—			156
Minority interests		(123	)		(18	)		(141	)

Net income		1,171			15			1,186

F - 9

7		Income taxes

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

		In other countries where we have operations the applicable tax rate varied from 3.29% to 43.15%.

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


	Three-month periods ended (unaudited)
										December 31,
	March 31, 2007									2006			March 31, 2006
	Brazil			Foreing			Total
Income before income taxes, equity results and minority interests		1,601			1,333			2,934			2,168			1,433

Federal income tax and social contribution expense at statutory enacted rates		(544	)		(454	)		(998	)		(737	)		(487	)
Adjustments to derive effective tax rate:
Tax benefit on interest attributed to stockholders		103			—			103			87			91
Difference on tax rates of foreign income		—			193			193			241			114
Difference on tax basis of equity investees		(64	)		32			(32	)		(93	)		(66	)
Tax incentives		52			—			52			47			32
Other non-taxable gains (losses)		45			(5	)		40			(96	)		21

Federal income tax and social contribution expense in consolidated statements of income		(408	)		(234	)		(642	)		(551	)		(295	)

		We have certain tax incentives relative to our manganese operations in Carajás, our potash operations in Rosario do Catete, our alumina and aluminum operations in Barcarena and our 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 expires in 2009 and 2013, respectively, while the partial exemption incentives relative to aluminum and kaolin expire in 2013. An amount equal to the tax saving must be appropriated to a reserve account within stockholders’ equity and may not be distributed in the form of cash dividends. Brazilian tax loss carry forwards have no expiration date.

		We have 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 per cent 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. We are 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, we have not realized 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.

		Effective January 1, 2007 for U.S. GAAP purposes, we adopted Financial Accounting Standards Board Interpretation No. 48 “Accounting for Uncertainty in Income Taxes”. This interpretation prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken, or expected to be taken, in a tax return. This interpretation also provides guidance on derecognition classification, interest and penalties, accounting in interim periods disclosure and transition. The effect of first applying the provision of this interpretation was immaterial. In applying this interpretation, our policy is to record interest and penalties associated with underpayment of income taxes as interest expense.

F - 10

Inventories


	March 31, 2007		December 31,
	(unaudited)		2006
Finished products

Iron ore and pellets		368		325
Manganese and ferroalloys		105		94
Alumina		47		33
Aluminum		107		110
Kaolin		29		23
Copper concentrate		17		5
Nickel (co-products and by-products)		1,611		2,046
Others		42		40
Spare parts and maintenance supplies		851		817

		3,177		3,493

F - 11

Investments in affiliated companies and joint ventures


	March 31, 2007								Investments				Equity Adjustments								Dividends received
													Three-month periods ended (unaudited)								Three-m onth periods ended (unaudited)
							Net income		March 31,
	Participation in				Net		(loss) for the		2007		December		March 31,		December			March 31,			March 31,		December		March 31,
	capital (%)				equity		period		(unaudited)		31, 2006		2007		31, 2006			2006			2007		31, 2006		2006
	voting		total
Ferrous
Companhia Nipo-Brasileira de Pelotização — NIBRASCO (1)		51.11		51.00		93		13		47		40		6		2			9			—		—		22
Companhia Hispano-Brasileira de Pelotização — HISPANOBRÁS (1)		51.00		50.89		89		11		45		42		6		4			5			—		—		13
Companhia Coreano-Brasileira de Pelotização — KOBRASCO		50.00		50.00		84		10		42		40		5		—			9			—		10		—
Companhia Ítalo-Brasileira de Pelotização — ITABRASCO (1)		51.00		50.90		76		8		39		37		4		3			4			—		—		12
SAMARCO Mineração S.A. — SAMARCO (2)		50.00		50.00		689		120		397		370		60		66			39			50		25		25
Minas da Serra Geral S.A. — MSG		50.00		50.00		47		1		24		25		1		2			—			—		—		—
Gulf Industrial Investment Company — GIIC (4)		—		—		—		—		—		—		—		—			14			—		—		—
Others		—		—		—		—		20		23		1		1			(2	)		—		—		—

										614		577		83		78			78			50		35		72
Logistics
MRS Logística S.A		37.23		40.45		631		58		256		222		23		27			14			—		22		—

										256		222		23		27			14			—		22		-
Holdings
Steel
Usinas Siderúrgicas de Minas Gerais S.A. — USIMINAS (cost $407) (3)		—		—		—		—		1,197		744		—		50			26			—		7		—
California Steel Industries Inc. — CSI		50.00		50.00		330		1		165		175		1		4			15			11		—		3

										1,362		919		1		54			41			11		7		3
Aluminum and bauxite
Mineração Rio do Norte S.A. — MRN		40.00		40.00		305		56		122		164		22		20			12			29		—		37
Valesul Alumínio S.A. — VALESUL (5)		100.00		100.00		—		—		—		—		—		—			4			—		—		—

										122		164		22		20			16			29		—		37
Coal
Henan Longyu Resources Co. Ltd		25.00		25.00		483		36		121		112		9		9			7			—		—		—
Shandong Yankuang International Company Ltd		25.00		25.00		92		—		23		23		—		(5	)		—			—		—		—

										144		135		9		4			7			—		—		-
Nickel — available-for-sale investments (6)
Jubilee Mines N.L (cost $30)		4.87		4.87		—		—		90		79		—		—			—			—		—		—
Lion Ore Mining International Ltd (cost $21)		1.80		1.80		—		—		67		45		—		—			—			—		—		—
Mirabela Nickel Ltd (cost $12)		9.30		9.30		—		—		31		21		—		—			—			—		—		—
Skye Resources Inc (cost $-18)		13.70		13.70		—		—		63		36		—		—			—			—		—		—
Heron Resources Inc (cost $3)		9.80		9.80		—		—		17		12		—		—			—			—		—		—
Others		—		—		—		—		26		29		—		—			—			—		—		—

										294		222		—		—			—			—		—		-
Other affiliates and joint ventures
Others		—		—		—		—		138		114		—		—			—			—		—		-

										138		114		—		—			—			—		—		-

										2,060		1,554		32		78			64			40		7		40

Total		—		—		—		—		2,930		2,353		138		183			156			90		64		112


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

(2)		Investment includes goodwill of US$ 52 and US$ 50 in 2007 and 2006, respectively;

(3)		Equity method used through November 2006, and available-for-sale subsequently;

(4)		Sold for US$ 418 in May, 2006;

(5)		Subsidiary consolidated as from July, 2006;

(6)		Investment held through Inco Limited.

F - 12

Long-term debt


	Current liabilities				Long-Term liabilities
	March 31,				March 31,
	2007		December		2007		December
	(unaudited)		31, 2006		(unaudited)		31, 2006
Foreign debt
Loans and financing denominated in the following currencies:
United States dollars		180		192		10,550		10,622
Others		3		4		13		13

Fixed Rate Notes — US$ denominated		—		112		6,782		6,785
Debt securities — export sales (*) — US$ denominated		78		86		245		259
Perpetual notes		—		—		86		86
Accrued charges		205		139		—		—

		466		533		17,676		17,765

Local debt

Denominated in Long-Term Interest Rate — TJLP/CDI		17		16		1,047		511
Denominated in General Price Index-Market (IGPM)		21		20		1		1
Basket of currencies		2		2		7		7
Non-convertible debentures		—		—		2,895		2,774
Denominated by U.S. dollars		98		107		56		64
Accrued charges		142		33		—		—

		280		178		4,006		3,357

Total		746		711		21,682		21,122


(*)		Debt securities secured by future receivables arising from certain export sales.

The long-term portion as of March 31, 2007 falls due in the following years (unaudited):


2009			2,487
2010			287
2011			1,027
2012 thereafter			17,699
No due date (Perpetual notes and non-convertible debentures)			182

			21,682

As of March 31, 2007 annual interest rates on long-term debt were as follows (unaudited):


3.1% to 5%			11,463
5.1% to 7%			3,656
7.1% to 9%			5,320
9.1% to 11%			1,740
Over 11%			158
Variable (Perpetual notes)			91

			22,428

The indices applied to debt and respective percentage variations in each year were as follows (unaudited):


	%
	March 31, 2007			December 31, 2006

TJLP — Long-Term Interest Rate (effective rate)		1.6			7.9
IGP-M — General Price Index-Market		1.1			3.8
Devaluation of United States Dollar against Real		(4.1	)		(8.7	)

F - 13

		Pursuant the acquisition of Inco we executed various financial operations through December, 2006. After the execution of transactions, we completed a the take out of the initial US$ 14.6 billion bridge loan, used to finance the Inco acquisition.

		One of these transactions, on November 16, 2006, we issued a US$ 3.75 billion 10-year and 30-year notes. The US$ 1.25 billion notes due in January 2017 bear a coupon rate of 6.25% per year, payable semi-annually. The US$ 2.50 billion notes due in November 2036 bear a coupon rate of 6.875% per year, payable semi-annually, and were priced with a yield to maturity of 6.997% per year.

		The other transaction involved the issue on December 20, 2006 in the Brazilian market of non-convertible debentures (debentures) in the amount of US$ 2.5 billion, in two series, with four and seven-year maturities. The first series, due on November 20, 2010, US$ 700, will be remunerated at 101.75% of the accumulated variation of the Brazilian CDI (interbank certificate of deposit) interest rate, payable semi-annually. The second series, due on November 20, 2013, US$ 1.8 million, will be remunerated at the Brazilian CDI interest rate plus 0.25% per year, also payable semi-annually. These debentures can be traded in the secondary market, through the Sistema Nacional de Debêntures (SND).

		The other transaction which closed on December 21, 2006, was a pre-export finance transaction of US$ 6.0 billion, defining the final allocation among the members of a bank syndicate. The transaction includes a US$ 5.0 billion 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.

		The last transaction involved the settlement of the bridge loan with cash and advance on export contracts, totaling US$ 2.25 billion occurred on April.

11		Stockholders’ equity

		Each holder of common and preferred class A stock is entitled to one vote for each share on all matters that come before a stockholders’ meeting, except for the election of the Board of Directors, which is restricted to the holders of common stock. The Brazilian Government holds six preferred special share which confers to it permanent veto rights over certain matters.

		On May 22, 2006 a stock split was effected which had been approved by the Extraordinary General Shareholders’ Meeting on April 27, 2006. Each existing, common and preferred, share was split into two shares. After the split our capital comprises 2,459,657,058 shares, of which 959,758,200 class “A” preferred shares and 1,499,898,858 common shares, 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, continued to be represented by one ADR supported by one common share (NYSE: RIO) or by one ADR supported by one class “A” preferred share (NYSE: RIOPR) respectively. All numbers of share and per share amounts included herein reflect retroactive application of the stock split.

		On June 21, 2006 the Board of Directors approved a buy-back program of our preferred shares, executed during 180 days. As of December 31, 2006, when the program came to an end, we had acquired 15,149,600 shares held in treasury for subsequent disposal or cancellation at an average weighted unit cost of US$ 19.98 (minimum cost of US$ 18.89 and maximum of US$ 20.74).

		Both common and preferred stockholders are entitled to receive a dividend of at least 25% of annual adjusted net income based on the statutory accounting records, upon approval at the annual stockholders’ meeting. In the case of preferred stockholders, this dividend cannot be less than 6% of the preferred capital as stated in the statutory accounting records or, if greater, 3% of the statutory book equity value per share.

		In April, 2007, we paid US$ 850 to stockholders. The distribution was made in the form of interest on stockholders’ equity and dividends.

		In April 2007, through an Extraordinary Shareholders´ meeting the paid-in capital increased of US$4,187 million through reserves, without issue of shares. From that day the total paid-in capital is US$ 12,695 million.

F - 14

		Basic and diluted earnings per share (unaudited)

		Basic and diluted earnings per share amounts have been calculated as follows:


			Weighted
	Income		average		Basic and diluted
	(Numerator)		(Thousands)		per-share amount
	(US$ million)		(Denominator)		(US$ per share)
Net income for the three-month period ended March 31, 2007		2,217

Income available to preferred stockholders		867		944,586		0.92
Income available to common stockholders		1,350		1,471,608		0.92

Net income for the three-month period ended December 31, 2006		1,573

Income available to preferred stockholders		615		944,586		0.65
Income available to common stockholders		958		1,471,608		0.65

Net income for the three-month period ended March 31, 2006		1,171

Income available to preferred stockholders		423		831,448		0.51
Income available to common stockholders		748		1,471,608		0.51

There are no securities outstanding with generate a dilutive effect on earnings per shares.


12		Other Cumulative Comprehensive income (deficit) (unaudited)


	Three-month periods ended
	March 31, 2007			December 31, 2006			March 31, 2006

Comprehensive income is comprised as follows:
Net income		2,217			1,573			1,171
Cumulative translation adjustments		(98	)		291			850
Unrealized gain (loss) on available-for-sale securities		315			141			5
Superavit (deficit) accrued pension plan		(9	)		(107	)		—
Cash flow hedge		(10	)		—			—

Total comprehensive income		2,415			1,898			2,026


Taxes effect on other comprehensive income (expense) allocated to each component
Unrealized gain on investments available-for-sales
Tax (expense) benefit		(306	)		(124	)		—
Net effect		586			271			—
Superavit (deficit) accrued pension plan
Tax (expense) benefit		(184	)		(187	)		—
Net effect		344			353			—

Pension costs (unaudited)


	Three-month periods ended
	March 31, 2007								December 31, 2006								March 31, 2006
	Overfunded			Underfunded			Underfunded		Overfunded			Underfunded			Underfunded		Overfunded			Underfunded			Underfunded
	pension plans			pension plans			other benefits		pension plans			pension plans			other benefits		pension plans			pension plans			other benefits
Service cost — benefits earned during the period		1			14			4		2			14			4		1			—			—
Interest cost on projected benefit obligation		46			48			16		82			56			18		40			6			2
Expected return on assets		(86	)		(55	)		—		(131	)		(56	)		—		(64	)		(2	)		—
Amortization of initial transitory obligation		2			—			—		4			—			—		2			—			—
Net deferral		(2	)		—			—		(10	)		—			—		(4	)		—			—

Net periodic pension cost		(39	)		7			20		(53	)		14			22		(25	)		4			2

We previously disclosed in our consolidated financial statements for the year ended December 31, 2007, that we expected to contribute US$ 238 to our defined benefit pension plan in 2007. As of March 31, 2007, contribution of US$ 66 had been made. We do not expect any significant change in our previous estimate.

F - 15

14		Commitments and contingencies

(a)		At March 31, 2007, we had extended guarantees for borrowings obtained by affiliates in the amount of US$ 3, as follows:

Amount of

Denominated

Final

Counter

Affiliate

guarantee

currency

Purpose

maturity

guarantees

SAMARCO

US$

Debt guarantee

2008

None

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

(b)		We provided a guarantee covering certain termination payments to the supplier under an electricity supply agreement (“ESA”) entered into in October 2004 for our 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 ESA, the termination payment could reach up to an amount of 131 million euros as at March 31, 2007. Once the supply of electricity under the ESA to the project begins, the guaranteed amounts will decrease over the life of the ESA.

		Additionally, in connection with the Girardin Financing, a special tax-advantage lease financing sponsored by the French Government related with this project we provided certain guarantees pursuant to which we guaranteed, in certain events of default, payments up to a maximum amount of US$ 100.

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

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


	March 31, 2007				December 31, 2006
	Provision for				Provision for
	contingencies		Judicial deposits		contingencies		Judicial deposits
Labor and social security claims		402		288		378		234
Civil claims		278		132		260		117
Tax — related actions		1,005		528		972		500
Others		25		1		31		1

		1,710		949		1,641		852

		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) various other matters, often in connection with disputes about the amount of indemnities paid upon dismissal and the one-third extra holiday pay.

		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 and accidents and return of land.

		Tax — related actions principally comprise our challenges of certain revenue taxes, value added tax, income tax and uncertain tax position — FIN 48. Uncertain tax position generated provisions in the amount of US$ 808 and US$ 784 at March 31, 2007 and December 31, 2006.

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

		Our judicial deposits are made as required by the courts for us to be able to enter or continue a

F - 16

		legal action. When judgment is favorable to us, we receive the deposits back; when unfavorable, the deposits are delivered to the prevailing party.

		Contingencies settled in the three-month periods ended March 31, 2007, December 31, 2006 and March 31, 2006 aggregated US$ 48, US$ 424 and US$ 603, respectively, and additional provisions aggregated US$ 45, US$ 439 and US$ 416, respectively, classified in other operating expenses.

		In addition to the contingencies for which we have made provisions we are defending claims which in our opinion, and based on the advice of our legal counsel, the likelihood of loss is possible losses, which total US$ 1,506 at March 31, 2007, for which no provision has been made.

(d)		At the time of our privatization in 1997, we issued shareholder revenue interests known in Brazil as “debentures” to our then-existing shareholders, including the Brazilian Government. The terms of the “debentures”, were set to ensure that our pre-privatization shareholders, including the Brazilian Government, would participate alongside us in potential future financial benefits that we are able to derive from exploiting our mineral resources.

		On April 2007 we paid as remuneration of these “debentures” the amounts of $6.

(e)		We use various judgments and assumptions when measuring our environmental liabilities and asset retirement obligations. Changes in circumstances, law or technology may affect our estimates and we periodically review the amounts accrued and adjust them as necessary. Our accruals do not reflect unasserted claims because we are currently not aware of any such issues. Also the amounts provided are not reduced by any potential recoveries under cost sharing, insurance or indemnification arrangements because such recoveries are considered uncertain. On March 31, 2007, US$ 37 of environmental liabilities and asset retirement obligations was classified in current liabilities (Others).

		The changes are demonstrated as follows:


	Three-month periods ended (unaudited)
				December 31,
	March 31, 2007			2006			March 31, 2006

Provisions for asset retirement obligations beginning of period		676			258			225
Liability recognized upon consolidation of Inco		—			178			—
Accretion expense		12			186			6
Liabilities settled in the current period		(3	)		(4	)		—
Revisions in estimated cash flows		—			59			—
Cumulative translation adjustment		14			(1	)		17


Provisions for asset retirement obligations end of period		699			676			248

F - 17

15		Segment and geographical information

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

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

		Non-ferrous — comprises the production of non-ferrous minerals, including potash, kaolin, copper and nickel (co-products and by-products).

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

		Holdings — divided into the following sub-groups:

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

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

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

F - 18

Consolidated net income and principal assets are reconciled as follows:

Results by segment — before eliminations (Aggregated)


	As of and for the three-month periods ended (unaudited)
	March 31, 2007																					December 31, 2006																					March 31, 2006
										Holdings																					Holdings																					Holdings
				Non																					Non																					Non
	Ferrous			ferrous			Logistics			Aluminum			Others			Eliminations			Consolidated			Ferrous			ferrous			Logistics			Aluminum			Others			Eliminations			Consolidated			Ferrous			ferrous			Logistics			Aluminum			Others			Eliminations			Consolidated
RESULTS
Gross revenues — Export		4,415			3,482			14			813			22			(2,204	)		6,542			4,237			3,182			23			841			15			(1,953	)		6,345			3,303			180			16			590			—			(1,449	)		2,640
Gross revenues — Domestic		770			109			331			159			—			(231	)		1,138			736			100			336			136			—			(159	)		1,149			536			55			294			89			7			(131	)		850
Cost and expenses		(3,407	)		(2,564	)		(220	)		(697	)		(20	)		2,435			(4,473	)		(3,340	)		(2,591	)		(226	)		(709	)		(6	)		2,112			(4,760	)		(2,577	)		(161	)		(230	)		(510	)		(4	)		1,580			(1,902	)
Research and development		(16	)		(59	)		(2	)		—			(36	)		—			(113	)		(36	)		(85	)		(5	)		—			(49	)		—			(175	)		(22	)		(25	)		(1	)		—			(23	)		—			(71	)
Depreciation, depletion and amortization		(197	)		(149	)		(25	)		(20	)		(1	)		—			(392	)		(182	)		(149	)		(25	)		(21	)		(2	)		—			(379	)		(134	)		(19	)		(14	)		(14	)		—			—			(181	)

Operating income		1,565			819			98			255			(35	)		—			2,702			1,415			457			103			247			(42	)		—			2,180			1,106			30			65			155			(20	)		—			1,336
Financial income		528			83			2			4			25			(521	)		121			265			95			8			7			—			(194	)		181			161			—			8			2			4			(133	)		42
Financial expenses		(1,003	)		(160	)		(2	)		(14	)		(1	)		521			(659	)		(646	)		(80	)		(3	)		(169	)		(4	)		194			(708	)		(276	)		(2	)		(2	)		(62	)		(4	)		133			(213	)
Foreign exchange and monetary gains (losses), net		735			(8	)		(3	)		45			1			—			770			(26	)		209			(4	)		23			2			—			204			126			58			(11	)		86			—			—			259
Gain on sale of investments		—			—			—			—			—			—			—			80			—			—			—			231			—			311			9			—			—			—			—			—			9
Equity in results of affiliates and joint ventures and change in provision for losses on equity investments		83			—			23			22			10			—			138			77			—			27			20			59			—			183			78			—			14			16			48			—			156
Income taxes		(394	)		(200	)		(3	)		(45	)		—			—			(642	)		(235	)		(251	)		(9	)		(56	)		—			—			(551	)		(246	)		—			(3	)		(46	)		—			—			(295	)
Minority interests		(21	)		(88	)		(2	)		(102	)		—			—			(213	)		(19	)		(190	)		—			(18	)		—			—			(227	)		(67	)		—			—			(56	)		—			—			(123	)

Net income		1,493			446			113			165			—			—			2,217			911			240			122			54			246			—			1,573			891			86			71			95			28			—			1,171


Sales classified by geographic destination:
Export market America, except United States		300			376			6			203			—			(217	)		668			326			437			9			206			—			(249	)		729			271			1			6			131			—			(172	)		237
United States		95			650			—			69			22			(79	)		757			86			440			—			66			15			(49	)		558			104			3			—			3			—			(41	)		69
Europe		1,373			551			3			348			—			(734	)		1,541			1,575			497			6			316			—			(700	)		1,694			1,150			95			6			288			—			(580	)		959
Middle East/Africa/Oceania		194			111			—			44			—			(103	)		246			198			60			1			73			—			(58	)		274			183			4			—			32			—			(68	)		151
Japan		425			526			—			149			—			(214	)		886			536			473			—			143			—			(220	)		932			362			29			—			126			—			(144	)		373
China		1,662			268			4			—			—			(695	)		1,239			1,281			446			8			26			—			(486	)		1,275			956			10			3			—			—			(316	)		653
Asia, other than Japan and China		366			1,000			1			—			—			(162	)		1,205			235			828			(1	)		11			—			(190	)		883			277			38			1			10			—			(128	)		198

		4,415			3,482			14			813			22			(2,204	)		6,542			4,237			3,181			23			841			15			(1,952	)		6,345			3,303			180			16			590			—			(1,449	)		2,640
Domestic market		770			109			331			159			—			(231	)		1,138			736			100			336			136			—			(159	)		1,149			536			55			294			89			7			(131	)		850

		5,185			3,591			345			972			22			(2,435	)		7,680			4,973			3,281			359			977			15			(2,111	)		7,494			3,839			235			310			679			7			(1,580	)		3,490

F - 19

Operating segment — after eliminations (Disaggregated)


	As of and for the three-month periods ended (unaudited)
	March 31, 2007
	Revenues
																								Property,		Addition to
																		Depreciation,						Plant and		Property,
							Value			Net		Cost and						depletion and			Operating			Equipment,		Plant and
	Export		Domestic		Total		added tax			revenues		expenses			Net			amortization			income			Net		Equipment		Investments
Ferrous
Iron ore		1,975		475		2,450		(72	)		2,378		(800	)		1,578			(173	)		1,405			13,747		347		44
Pellets		508		106		614		(23	)		591		(409	)		182			(18	)		164			709		10		570
Manganese		3		3		6		(1	)		5		(9	)		(4	)		(1	)		(5	)		65		—		—
Ferroalloys		94		43		137		(11	)		126		(107	)		19			(4	)		15			172		3		—

		2,580		627		3,207		(107	)		3,100		(1,325	)		1,775			(196	)		1,579			14,693		360		614

Non ferrous
Nickel and other products (*)		3,185		43		3,228		—			3,228		(2,333	)		895			(126	)		769			18,588		434		294
Potash		—		32		32		(2	)		30		(21	)		9			(5	)		4			187		6		—
Kaolin		42		8		50		(2	)		48		(50	)		(2	)		(7	)		(9	)		280		31		—
Copper concentrate		121		25		146		(5	)		141		(77	)		64			(11	)		53			1,482		40		—

		3,348		108		3,456		(9	)		3,447		(2,481	)		966			(149	)		817			20,537		511		294

Aluminum
Alumina		243		—		243		(3	)		240		(175	)		65			(11	)		54			1,941		70		—
Aluminum		324		72		396		(15	)		381		(179	)		202			(9	)		193			435		15		—
Bauxite		10		—		10		—			10		(10	)		—			—			—			687		44		122

		577		72		649		(18	)		631		(364	)		267			(20	)		247			3,063		129		122

Logistics
Railroads		—		242		242		(41	)		201		(111	)		90			(21	)		69			748		8		256
Ports		3		63		66		(12	)		54		(38	)		16			(3	)		13			837		7		—
Ships		11		12		23		(2	)		21		(23	)		(2	)		(2	)		(4	)		52		8		—

		14		317		331		(55	)		276		(172	)		104			(26	)		78			1,637		23		256

Others		23		14		37		(2	)		35		(53	)		(18	)		(1	)		(19	)		1,235		83		1,644

		6,542		1,138		7,680		(191	)		7,489		(4,395	)		3,094			(392	)		2,702			41,165		1,106		2,930


		(*) Includes the product nickel co-products and by products (copper, precious metals, cobalt and others).

F - 20

Operating segment — after eliminations (Disaggregated)


	As of and for the three-month periods ended (unaudited)
	December 31, 2006
	Revenues
																								Property,		Addition to
																		Depreciation,						Plant and		Property,
							Value			Net		Cost and						depletion and			Operating			Equipment,		Plant and
	Export		Domestic		Total		added tax			revenues		expenses			Net			amortization			income			Net		Equipment		Investments
Ferrous
Iron ore		2,163		484		2,647		(59	)		2,588		(1,183	)		1,405			(152	)		1,253			13,235		820		48
Pellets		432		112		544		(24	)		520		(311	)		209			(17	)		192			593		61		529
Manganese		11		4		15		—			15		(56	)		(41	)		(1	)		(42	)		65		7		—
Ferroalloys		99		48		147		(12	)		135		(120	)		15			(5	)		10			186		11		—

		2,705		648		3,353		(95	)		3,258		(1,670	)		1,588			(175	)		1,413			14,079		899		577

Non ferrous
Nickel and other products (*)		2,786		16		2,802		—			2,802		(2,267	)		535			(124	)		411			17,193		483		222
Potash		—		43		43		(2	)		41		(26	)		15			(7	)		8			178		7		—
Kaolin		62		8		70		(4	)		66		(63	)		3			(6	)		(3	)		249		19		—
Copper concentrate		152		31		183		(8	)		175		(67	)		108			(16	)		92			1,386		41		—

		3,000		98		3,098		(14	)		3,084		(2,423	)		661			(153	)		508			19,006		550		222

Aluminum
Alumina		338		—		338		2			340		(238	)		102			(13	)		89			1,805		170		—
Aluminum		263		65		328		(14	)		314		(143	)		171			(7	)		164			415		26		—
Bauxite		8		—		8		—			8		(8	)		—			—			—			609		95		164

		609		65		674		(12	)		662		(389	)		273			(20	)		253			2,829		291		164

Logistics
Railroads		—		247		247		(45	)		202		(110	)		92			(17	)		75			720		26		222
Ports		4		65		69		(12	)		57		(39	)		18			(4	)		14			222		6		—
Ships		12		14		26		(1	)		25		(16	)		9			(3	)		6			45		2		—

		16		326		342		(58	)		284		(165	)		119			(24	)		95			987		34		222

Others		15		12		27		(2	)		25		(107	)		(82	)		(7	)		(89	)		1,106		7		1,168

		6,345		1,149		7,494		(181	)		7,313		(4,754	)		2,559			(379	)		2,180			38,007		1,781		2,353


		(*) Includes the product nickel co-products and by products (copper, precious metals, cobalt and others).

F - 21

Operating segment — after eliminations (Disaggregated)


	As of and for the three-month periods ended (unaudited)
	March 31, 2006
	Revenues
																								Property,		Addition to
																		Depreciation,						Plant and		Property,
							Value			Net		Cost and						depletion and			Operating			Equipment,		Plant and
	Export		Domestic		Total		added tax			revenues		expenses			Net			amortization			income			Net		Equipment		Investments
Ferrous
Iron ore		1,633		367		2,000		(57	)		1,943		(860	)		1,083			(113	)		970			11,404		591		43
Pellets		375		87		462		(19	)		443		(295	)		148			(12	)		136			480		7		592
Manganese		8		3		11		(1	)		10		(7	)		3			(1	)		2			60		8		—
Ferroalloys		71		35		106		(9	)		97		(84	)		13			(4	)		9			198		—		—

		2,087		492		2,579		(86	)		2,493		(1,246	)		1,247			(130	)		1,117			12,142		606		635

Non ferrous
Potash		—		22		22		(1	)		21		(14	)		7			(2	)		5			178		6		—
Kaolin		41		7		48		(3	)		45		(41	)		4			(6	)		(2	)		242		—		—
Copper concentrate		90		21		111		(5	)		106		(53	)		53			(8	)		45			1,286		35		—

		131		50		181		(9	)		172		(108	)		64			(16	)		48			1,706		41		—

Aluminum
Alumina		150		10		160		(2	)		158		(138	)		20			(8	)		12			1,428		61		—
Aluminum		247		13		260		(2	)		258		(112	)		146			(6	)		140			382		1		67
Bauxite		9		—		9		—			9		(9	)		—			—			—			356		48		151

		406		23		429		(4	)		425		(259	)		166			(14	)		152			2,166		110		218

Logistics
Railroads		—		214		214		(39	)		175		(114	)		61			(16	)		45			674		26		183
Ports		—		54		54		(9	)		45		(31	)		14			(3	)		11			237		1		—
Ships		14		7		21		(1	)		20		(25	)		(5	)		(1	)		(6	)		3		—		—

		14		275		289		(49	)		240		(170	)		70			(20	)		50			914		27		183
Others		2		10		12		(2	)		10		(40	)		(30	)		(1	)		(31	)		1,021		71		784

		2,640		850		3,490		(150	)		3,340		(1,823	)		1,517			(181	)		1,336			17,949		855		1,820

F - 22

16		Derivative financial instruments

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

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

		For new derivative contracts entered into since January 1, 2007, to protect against commodity prices on 80% aluminum product sales over the next two years we have designated such derivatives (forwards and zero-cost collars) as cash flow hedges. The effect of hedge accounting was not relevant to date.

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


	Interest
	rates									Aluminum
	(LIBOR)			Currencies			Gold			Products			Copper			Nickel			Platinum			Total
Unrealized gains (losses) at January 1, 2007		6			(16	)		(53	)		(318	)		(298	)		16			(20	)		(683	)
Financial settlement		(3	)		5			12			29			38			(12	)		—			69
Unrealized gains (losses) in the period		(1	)		160			(3	)		8			(49	)		(24	)		(6	)		85
Effect of exchange rate changes		—			4			(2	)		(12	)		3			—			—			(7	)


Unrealized gains (losses) at March 31, 2007		2			153			(46	)		(293	)		(306	)		(20	)		(26	)		(536	)

Unrealized gains (losses) at October 1, 2006		(1	)		35			(51	)		(195	)		3			—			—			(209	)
Gain (Loss) recognized upon consolidation of Inco		4			9			—			—			(364	)		62			(22	)		(311	)
Financial settlement		—			(6	)		7			22			—			(88	)		—			(65	)
Unrealized gains (losses) in the period		3			(54	)		(8	)		(142	)		63			42			2			(94	)
Effect of exchange rate changes		—			—			(1	)		(3	)		—			—			—			(4	)


Unrealized gains (losses) at December 31, 2006		6			(16	)		(53	)		(318	)		(298	)		16			(20	)		(683	)

Unrealized gains (losses) at January 1, 2006		(4	)		1			(46	)		(210	)		—			—			—			(259	)
Financial settlement		—			—			4			28			—			—			—			32
Unrealized gains (losses) in the period		1			—			(12	)		(33	)		—			—			—			(44	)
Effect of exchange rate changes		—			—			(4	)		(21	)		—			—			—			(25	)


Unrealized gains (losses) at March 31, 2006		(3	)		1			(58	)		(236	)		—			—			—			(296	)

		Except as described above unrealized gains (losses) in the period are included in our income statement under the caption of financial expenses and foreign exchange and monetary gains (losses), net.

		Final maturity dates for the above instruments are as follows:


Gold		December 2008
Interest rates(LIBOR)		December 2011
Currencies		December 2011
Products Aluminum		December 2008
Copper concentrate		December 2008
Nickel		April 2009
Platinum		December 2008

F - 23

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: May 9, 2007	By:	/s/ Fabio de Oliveira Barbosa

		Fabio de Oliveira Barbosa
		Chief Financial Officer