Edgar Filing: VALLEY OF THE RIO DOCE CO

FORM 6-K

United States
Securities and Exchange Commission

Washington, D.C. 20549

FORM 6-K

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

For the month of

May 2004

Valley of the Rio Doce Company

(Translation of Registrant’s name into English)

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

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

(Check One) Form 20-F [X] Form 40-F [ ]

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

(Check One) Yes [ ] No [X]

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

(Check One) Yes [ ] No [X]

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

(Check One) Yes [ ] No [X]

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

TABLE OF CONTENTS


	PERFORMANCE OF COMPANHIA VALE DO RIO DOCE IN THE FIRST QUARTER OF 2004 (US GAAP)
INDEX TO CONDENSED CONSOLIDATED FINANCIAL INFORMATION (US GAAP)
REPORT OF INDEPENDENT ACCOUNTANTS (US GAAP)
	SUPPLEMENTAL FINANCIAL STATEMENTS (US GAAP)
SIGNATURES

US GAAP

(COMPANHIA VALE DO RIO DOCE LOGO)

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

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

The financial and operational information contained in this press release, except where otherwise indicated, is based on consolidated figures, prepared in accordance with generally accepted accounting principles in the United States of America (“US GAAP”). This information, with the exception of that referring to investment and market behavior, is based on the quarterly financial statements, which have been reviewed by independent auditors. The main subsidiaries of CVRD which form part of these consolidated figures are: Caemi, Alunorte, RDM, RDME, RDMN, Urucum Mineração, Pará Pigmentos (PPSA), Docenave, Ferrovia Centro-Atlântica (FCA), Itaco, CVRD Overseas and Rio Doce International Finance.

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

Departamento de Relações com Investidores

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

IMPROVED PERFORMANCE: EARNINGS GROWTH AND PROFIT MARGIN EXPANSION WITH RECORD CASH GENERATION

Rio de Janeiro, May 12, 2004 – Companhia Vale do Rio Doce (CVRD) has reported net earnings of US$ 405 million for the first quarter of 2004, corresponding to earnings per share of US$ 1.06. This represents an increase of 14.4% compared to 1Q03 earnings of US$ 354 million, as well as of 50.0% vis-à-vis 4Q03 earnings.

Annualized return on equity (ROE) amounted to 31.4%, substantially higher than the figure of 20.9% reported in 1Q03.

Operating profit – adjusted EBIT⁽¹⁾ – amounted to a record US$ 529 million, 45.7% higher than that recorded in 1Q03 (US$ 363 million) and 34.9% higher than in 4Q03 (US$ 392 million). Operating margin amounted to 32.9%, higher than the margin reported in 1Q03, of 32.7%, and showing a strong recovery from the previous quarter’s figure of 23.9% (4Q03).

Cash generation, as measured by adjusted EBITDA⁽²⁾, set a new quarterly record for CVRD of US$ 685 million, an increase of 55.0% relative to 1Q03 and of 20.6% on the previous quarter (4Q03).

Other highlights were:

•

Gross revenues of US$ 1.685 billion, 46.1% higher than in 1Q03, and practically unchanged relative to 4Q03 revenues of US$ 1.690 billion.


1Q04			1

US GAAP

•

CVRD’s consolidated export revenues, calculated according to the generally accepted accounting principles in Brazil (BR GAAP), amounted to US$ 1.012 billion, an increase of 26.7% compared to 1Q03.

•

The Company’s net exports (exports minus imports) amounted to US$ 864 million, corresponding to 14% of Brazil’s trade surplus in 1Q04.

•

Iron ore and pellet shipments totaled 52.950 million tons, an increase of 24.5% on 1Q03.

•

Alumina sales amounted to 687 thousand tons, compared to 546 thousand tons in 1Q03.

•

Sales of ferro-alloys totaled 199 thousand tons, an increase of 76.1% compared to 1Q03 and a new quarterly record.

•

Kaolin sales of 285 thousand tons compared to 108 thousand tons in 1Q03.

•

Rail transportation of general cargo for clients amounted to 6.236 billion net ton kilometers (ntk), compared to 5.622 billion in 1Q03.

•

Total investment of US$ 358 million in 1Q04.

•

Reduction in debt leverage, with increased interest coverage and longer debt maturity profile.

The Company’s performance in the first quarter of this year clearly indicates the creation of shareholder value, resulting from the strong growth in global demand for ores and metals, and above all from the good execution of previously defined strategic objectives.

SELECTED FINANCIAL INDICATORS


	US$ million
	1Q03		4Q03		1Q04		D%		D%
	(A)		(B)		(C)		(C/A)		(C/B)
Gross Revenues		1,153		1,690		1,685		46.1		-0.3
Gross Margin (%)		42.3		38.6		42.4		—		—
Adjusted EBIT		363		392		529		45.7		34.9
Adjusted EBIT Margin (%)		32.7		23.9		32.9		—		—
Adjusted EBITDA		442		568		685		55.0		20.6
Net Earnings		354		270		405		14.4		50.0
Annualized ROE (%)		20.9		31.7		31.4		—		—
Total Debt/ LTM Adjusted EBITDA⁽³⁾ (x)		1.82		1.89		1.79		—		—
Investments*		240.3		468.8		358.0		49.0		-23.6

including acquisitions

EARNINGS GUIDANCE

CVRD does not provide guidance in the form of quantitative forecasts about future financial performance. The Company aims to release the maximum amount of information about its vision for the various markets in which it operates, explaining its strategic directives and execution; thereby, providing capital market participants with sufficient information to form their own expectations with regard to medium and long-term performance.


1Q04			2

US GAAP

BUSINESS OUTLOOK

The global economy has continued to experience a synchronized recovery, which began in the third quarter of 2003. The fastest growth is observed in China, the other emerging markets in Asia and in the United States and slower growth rates are observed in the Euro Zone, where consumption remains subdued. In Japan, economic growth, stimulated by exports and investment, continues to exceed expectations, and in Latin America, particularly in Brazil, there are signs that recovery is underway.

According to data from the International Iron and Steel Institute (IISI), global steel production increased 8.7% in 1Q04, compared to 1Q03. Excluding China, production increased 3.9%, which is much higher than the average growth rate observed in the period 1993/2003 of 1.5%. Chinese steel production grew 26.5% in 1Q04, compared to 1Q03, representing a significant increase in that country’s steel production rate vis-à-vis the growth rate observed at the end of last year, which amounted to 21.2%.

Chinese iron ore imports in 1Q04 reached a record 50.7 million tons, 48.2% higher than the volume recorded in 1Q03, bringing the total quantity imported in the 12 months to April, to 164.6 million tons. Japan imported 34.7 million tons in the quarter, an increase of 4.1% compared to 1Q03.

The global macroeconomic scenario remains favorable for continued expansion in the demand for ores and metals, which benefits the Company’s performance.

The measures taken by the Chinese economic authorities to reduce growth rates – restricting both the supply of and demand for credit – are extremely healthy, because the sooner China seeks to correct its excess demand situation, the lower is the probability of a crisis in the future, which would have an adverse effect on global demand for mineral products.

These measures discourage investments with a low expected rate of return. Such unproductive investments would contribute to lower China’s capacity for future economic growth, jeopardizing the buoyancy of demand for ores and metals. According to IMF estimates, one third of the GDP growth in China since 1978, when reforms were first introduced, is explained by productivity gains. Therefore, in preventing the waste of resources, the Chinese government is focused on the preservation of the economy’s growth dynamics, and consequently the vigor of the demand for mineral products.

CVRD’s commercial relationship with China with respect to the sale of iron ore is conducted via long-term contracts with the largest and most modern steel producers in that country. Long-term contracts help to minimize fluctuations in sales during down-cycles and allow customized solutions to be developed that generate value to the Company’s clients.

According to the long-term contracts in force, CVRD’s iron ore sales, excluding those of Caemi, to the Chinese market should increase from the level of 25.7 million tons in 2003, to approximately 55 million tons in 2008, implying an estimated average annual growth rate of 16.4% during the period 2003-2008.

The Sossego mine, in Carajás, is undergoing its copper concentrate production ramp-up phase, with the first shipment expected between the end of June and the beginning of July 2004. Sossego has a nominal production capacity of 140,000 tons a year, on average, of copper in concentrate equivalent.


1Q04			3

US GAAP

The startup of the Sossego operation, CVRD’s first copper project and the only greenfield copper project to be completed in 2004 in the world, constitutes an important milestone in the development of CVRD’s non-ferrous mineral businesses and creates a new platform for the creation of shareholder value.

RECENT DEVELOPMENTS

In April, CVRD entered into new long-term contracts with clients, distributed dividends to its shareholders and was successful in its initiative to purchase electricity via auction. Both Alunorte and GIIC obtained various international certifications, which is consistent with the Company’s focus on corporate social responsibility.

•

Long-term contracts for the supply of iron ore and pellets

CVRD and China Steel Corporation (CSC), one of the largest steel producers in Asia, have signed a contract for the supply of 600 thousand tons of pellets a year from 2005 to 2011. CSC has been a client of CVRD since 1979 and in addition to buying pellets, currently purchases some 2.4 million tons a year of iron ore, also under a long-term contract.

CVRD also signed a contract with Usiminas, one of the largest steelmakers in Latin America, for the supply of five million tons a year of iron ore for five years. The volume covered by this contract represents approximately 90% of Usiminas’ current iron ore consumption.

In 2003 and in the beginning of 2004, CVRD entered into several long-term contracts with important steelmakers, such as Arcelor, Baosteel and Corus. These contracts minimize future iron ore sales volatility and allow for the development of customized solutions that create value for our clients.

•

Dividends and debenture remuneration

On April 30, the first minimum dividend installment was paid to CVRD’s shareholders, in the amount of R$ 2.06 (US$ 0.70 as of April 30) per share, in accordance with the minimum dividend payment proposal for 2004, as announced to the market. The total disbursement by CVRD amounted to US$ 268.3 million.

On April 1, CVRD paid its first remuneration payment on debentures issued by the Company and distributed to shareholders before its privatization in 1997, of R$ 0,0120628 per debenture, amounting to a total disbursement by the Company of US$ 1.6 million.

•

Electricity auction

Albras was successful in its initiative to purchase electricity via an auction for a period of 20 years. The electricity bought will supply its needs starting in June 2004. The base purchase price is R$ 53.00 per MWh, indexed to the IGPM, which is the general price index published by the Getulio Vargas Foundation. In addition to the base price, the electricity supplier will have a stake on the portion of the primary aluminum price, at the London Metal Exchange (LME), which exceeds US$ 1,450 per ton. Under the agreement, Albras will make a prepayment for the purchase of this electricity of R$ 1.2 billion.

The terms obtained will help preserve Albras’ highly competitive position in the global aluminum industry.


1Q04			4

US GAAP

• Corporate social responsibility

GIIC, a joint venture between CVRD and The Gulf Investment Corporation, has received the ISO 9000 certification for the quality of its pellets and the ISO 14001 certification for excellence in environmental protection.

Alunorte, the alumina refinery controlled by CVRD, received three international certifications: the ISO 9001, for quality in alumina production, the ISO 14001, for excellence in environmental protection, and the OHSAS 18001, for health and safety in the workplace.

All of CVRD ´s iron ore and manganese mines, its maritime terminals, Tubarão ´s pelletizing plants, RDME, Albras and now Alunorte and GIIC have the ISO 14001 for excellence in environmental protection. Moreover, Albras has additional certifications for corporate social responsibility, quality, health and safety in the workplace.

Social responsibility, including environmental protection, social initiatives, the health and safety of its employees, is a priority for CVRD, which considers such responsibility a crucial factor to maintain its long-term competitiveness.

SIGNIFICANT IMPROVEMENT IN OPERATING PERFORMANCE

•

Gross revenues of US$1.7 billion

CVRD’s gross operating revenues in 1Q04 amounted to US$ 1.685 billion, an increase of 46.1% on 1Q03, practically unchanged vis-à-vis 4Q03. Due to the seasonal weather which influences both the demand for and the supply of various products and services, revenues in the first quarter tend naturally to be lower than the quarterly average for the year.

The increase of US$ 532 million in revenues for 1Q04, compared to 1Q03, resulted from sales volume expansion, which contributed with an increase of US$ 318 million, and from an increase in prices, which explained the remaining US$ 214 million.

The ferrous mineral businesses – iron ore, pellets, manganese ore and ferro-alloys –produced revenues of US$ 1.192 billion, representing 70.7% of total Company revenues. Sales of iron ore amounted to US$ 826 million, pellets, US$ 223 million, Tubarão pellet plant operation service fees, US$ 12 million, manganese ore, US$ 9 million and ferro-alloys, US$ 114 million.

Shipments of iron ore and pellets amounted to 52.950 million tons, an increase of 24.5% compared to the volume shipped in 1Q03, but 4.9% lower than in the previous quarter, 4Q03. The decrease in sales volume in 1Q04 compared to the last quarter of 2003 is due to seasonal factors. With the onset of the rainy season in Brazil, mineral production tends to be lower in the first quarter of each year, causing a reduction in shipments. The heavy rainfall also increases the risk of accidents on the Company’s railroads, despite the fact that the Vitória a Minas and the Carajás Railroads have one the lowest accident rates in the world. The long-term trend is for production and sales to continue to increase.

CVRD’s iron ore production decreased by 2.5 million tons in 1Q04, compared to 4Q03, given that accidents occurred on the Carajás and MRS Logística railroads.


1Q04			5

US GAAP

Additionally, there was a delay by suppliers in the delivery of new railcars for the transportation of iron ore, which also contributed to the shipment difficulties.

Shipments of iron ore amounted to 46.825 million tons, and of pellets to 6.125 million tons. CVRD purchased 3.071 million tons of iron ore from small mining operations in the so-called “Iron Quadrangle”, in the State of Minas Gerais, Brazil, to meet the growing demand of its clients.

The average iron ore sales price amounted to US$ 17.64 per ton, an increase of 17.3% in relation to 1Q03, and of 4.9% on the previous quarter (4Q03). At the same time the average pellet price increased 17.0% on 1Q03. The aforementioned average price increases do not fully reflect yet the full impact of the 2004 price adjustments of 18% and 19% for iron ore and pellets, respectively.

The chinese market was the main destination of CVRD’s iron ore and pellet exports in 1Q04, accounting for 16.3% of total sales. Other important markets were Japan, with 10.8% of the total, Germany with 9.6%, France with 4.9%, South Korea with 4.7%, and Italy with 4.1%. Domestic sales accounted for 24.8% of the total.

Sales of manganese ore amounted to 163 thousand tons, while ferro-alloy sales amounted to 199 thousand tons, exceeding the previous quarterly record of 176 thousand tons established in 3Q02.

Products within the aluminum production chain, bauxite, alumina and primary aluminum, generated revenues of US$ 234 million in 1Q04, accounting for 13.9% of CVRD’s total revenues.

Alumina sales amounted to 687 thousand tons, an increase of 25.8% on 1Q03, but a decrease of 9.1% compared to the previous record achieved in 4Q03, of 756 thousand tons. The reduction in alumina shipments occurred due to the product swap system with other players, undertaken in order to take advantage of the differences in freight rates. The average alumina price in 1Q04 amounted to US$ 213.97 per ton, an increase of 25.6% in relation to 1Q03 and of 8.6% on 4Q03.

Shipments of primary aluminum in 1Q04 amounted to 42 thousand tons, and bauxite shipments, to 545 thousand tons.

Sales of potash, which produced revenues of US$ 23 million in 1Q04, suffered from the seasonality in Brazil’s agricultural crops. Shipments in 1Q04 amounted to 138 thousand tons, a reduction of 12.7% in relation to 1Q03. Due to the execution of the project to expand production capacity at the Taquari-Vassouras mine, CVRD’s potash production will experience a slight drop this year. It is estimated that production will fall from 658 thousand tons in 2003, to 620 thousand tons for this year, which will be reflected in sales behavior, due to the low inventory levels.

Kaolin sales amounted to 285 thousand tons, an increase of 163.9% on 1Q03 and of 1.8% compared to 4Q03. The expansion in shipments, compared to 4Q03, is a good result considering that demand for kaolin is seasonally weaker at the beginning of the year. Revenues generated in 1Q04 amounted to US$ 39 million.

Logistics services generated revenue of US$ 191 million in 1Q04, compared to US$ 115 million in 1Q03 and US$ 192 million in 4Q03. The railroads contributed US$ 133 million to this figure, the ports contributed US$ 38 million and coastal shipping and port support services contributed US$ 20 million.

CVRD’s railroads – Carajás, Vitória a Minas and Centro-Atlântica – transported 6.236 billion ntk in general cargo for clients in 1Q04, 10.9% more than that transported in the same quarter in 2003. The decrease in relation to 4Q03, which


1Q04			6

US GAAP

saw a total of 6.402 billion ntk, is explained by the seasonal effect of agricultural crops.

For example, in 2003, 2.4 billion ntk and 2.6 billion ntk in agricultural products were transported in the second and third quarters, 1.8 billion ntk in the fourth quarter and only 1.3 billion ntk in the first quarter. In 1Q04, the railroads transported 1.7 billion ntk in agricultural products.

The Carajás railroad, having achieved a 51% reduction in accident rates in 2003, maintained the same level of operational safety in 1Q04. Vitória a Minas railroad experienced an improvement in this indicator of 25.6% in 1Q04 vis-à-vis 1Q03 and at FCA railroad this indicator remained constant. The attainment of high degrees of operational safety is a priority for the Company and the improvement obtained is the result of investments in training and equipment as well as of process reviews.

The Company’s ports and marine terminals handled 6.396 million tons for clients in the quarter, an increase of 14.7% on 1Q03.

Sales to European markets amounted to US$ 522 million, corresponding to 31.0% of CVRD’s total revenues. The domestic market accounted for US$ 519 million in sales, 30.8% of the total, China with US$ 171 million, 10.1% of the total, Japan with US$ 94 million and emerging Asia, with US$ 97 million.

VOLUME SOLD – IRON ORE AND PELLETS


	thousand tons
	1Q03		%		4Q03		%		1Q04		%
Iron ore		36.380		85.6		48.839		87.7		46.825		88.4
Pellets		6.139		14.4		6.837		12.3		6.125		11.6
Total		42.519		100.0		55.676		100.0		52.950		100.0

IRON ORE AND PELLETS SALES BY DESTINATION


	thousand tons
	1Q04		%
EU		15,288		28.9	%
Germany		5,087		9.6	%
France		2,616		4.9	%
Belgium		1,669		3.2	%
Italy		2,165		4.1	%
Others		3,751		7.1	%
China		8,632		16.3	%
Japan		5,698		10.8	%
South Korea		2,501		4.7	%
Middle East		1,866		3.5	%
USA		995		1.9	%
Rest of the World		4,830		9.1	%
Brazil		13,140		24.8	%
Total		52,950		100.0	%

VOLUME SOLD — ORE AND METALS


	thousand tons
	1Q03		4Q03		1Q04
Manganese		206		207		163
Ferro-alloys		113		152		199
Alumina		546		756		687


1Q04			7

US GAAP


	thousand tons
	1Q03		4Q03		1Q04
Primary Aluminum		49		56		42
Bauxite		189		501		545
Potash		158		169		138
Kaolin		108		280		285

LOGISTICS SERVICES


	1Q03		4Q03		1Q04
Railroads (million ntk)		5.622		6.402		6.236
Ports (thousand tons)		5.575		5.288		6.396

GROSS REVENUE BY PRODUCT


	US$ million
	1Q03		%		4Q03		%		1Q04		%
Ferrous Minerals		821		71.2		1,179		69.8		1,192		70.7
Iron Ore		547		47.4		821		48.6		826		49.0
Pellet plant operation services		8		0.7		14		0.8		12		0.7
Pellets		191		16.6		240		14.2		223		13.2
Manganese		11		1.0		11		0.7		9		0.5
Ferro-alloys		59		5.1		87		5.1		114		6.8
Others		5		0.4		6		0.4		8		0.4
Logistics Services		115		10.0		192		11.4		191		11.3
Railroads		66		5.7		127		7.5		133		7.9
Ports		28		2.4		38		2.2		38		2.3
Shipping		21		1.8		27		1.6		20		1.2
Aluminum Chain		167		14.5		254		15.0		234		13.9
Primary aluminum		69		6.0		82		4.9		68		4.0
Alumina		93		8.1		149		8.8		146		8.7
Bauxite		4		0.3		14		0.8		15		0.9
Others		1		0.1		9		0.5		5		0.2
Non Ferrous Minerals		37		3.2		65		3.8		62		3.7
Potash		21		1.8		24		1.4		23		1.4
Kaolin		16		1.4		41		2.4		39		2.3
Others		13		1.1		0		—		6		0.4
Total		1,153		100.0		1,690		100.0		1,685		100.0

GROSS REVENUE BY DESTINATION


	US$ million
	1Q03		%		4Q03		%		1Q04		%
Domestic market		356		30.9		481		28.5		519		30.8
External market		797		69.1		1,209		71.5		1,166		69.2
USA		57		4.9		37		2.2		79		4.7
Europe		378		32.8		614		36.3		522		31.0
Japan		86		7.5		98		5.8		94		5.6
Emerging Asia		42		3.6		86		5.1		97		5.8
China		107		9.3		190		11.2		171		10.1
Rest of the World		127		11.0		184		10.9		203		12.0
Total		1,153		100.0		1,690		100.0		1,685		100.0

•

Record operating profit


1Q04			8

US GAAP

There was a substantial improvement in operating performance in 1Q04, with adjusted EBIT amounting to US$ 529 million, the highest quarterly figure recorded by the Company to date. In relation to previous quarters, this figure was 45.7% higher than that achieved in 1Q03 and 34.9% higher than that achieved in 4Q03.

Adjusted EBIT margin reached 32.9% compared to 32.7% in 1Q03 and 23.9% in 4Q03. The increase of 893 basis points (bp) in operating margin, compared to the previous quarter, was based on the following combined factors: (a) CVRD, excluding Caemi and FCA, contributed all other things constant with a 1155 bp increase in EBIT margin; (b) the provision for retrospective payment of real estate tax, a non-recurring event, contributed to a reduction of 37 bp; (c) the consolidation of Caemi, contributed with a reduction of 99 bp; (d) and the consolidation of FCA, with a reduction of 126 bp.

Caemi is a profitable company and its acquisition by CVRD is of strategic importance. The price paid for its shares, equivalent to a multiple of approximately five times EBITDA, took into account the lower operating margins of the company, which are due to lower production scale and higher transportation costs. This acquisition has added significant value to CVRD’s shareholders.

In the case of FCA, also consolidated starting in September 2003, its acquisition allowed CVRD to integrate an important asset into its logistics network for the transportation of agricultural products, an area in which Brazil is one of the largest producers and exporters in the world and where there is still a high degree of inefficiency. In addition, FCA is an asset with excellent strategic fit with CVRD’s inter-modal transportation efforts, acting as a feeder to the Vitória a Minas Railroad – Tubarão Port system, which already enjoys high standards of operating excellence. Currently, CVRD is developing various projects for FCA aimed at: (a) increasing productivity by 45% in terms of 1000 tkus per horse power (HP), from 1.38 to 2.00 until 2006; (b) improving operating safety; (c) improving energy efficiency, where the goal for 2004 is the reduction of 6% in fuel consumption per gross ton kilometer (gtk); and (d) introducing the best global operational and management practices.

In 1Q04, fuel consumption decreased 14%, from 7.90 liter/1,000 gtk in 1Q03 to 7.79 liter/1,000 gtk. Operational safety at FCA improved in 2003, when the number of accidents decreased 5.6% compared to 2002.

The increase of US$ 500 million in CVRD’s net operating revenues was the predominating factor in improving EBIT performance in 1Q04, compared to 1Q03. Of this amount, US$ 228 million derived from the consolidation of Caemi and FCA. The cost of goods sold (COGS) increased US$ 287 million, of which US$ 164 million was due to the consolidation of the two companies just mentioned.

The principal reasons behind the increase in COGS were; (a) a rise of US$ 109 million in outsourced services, with Caemi in 1Q04 spending US$ 36 million on the transportation services of the MRS railroad; (b) increased depreciation of US$ 52 million mainly due to the increase in the asset base; (c) an increase of US$ 43 million in the cost of products purchased, other than iron ore and pellets, basically due to the higher purchases of bauxite, required to expand alumina production by 37.9%.

OPERATING MARGINS BY SEGMENT — EBIT MARGIN


	1Q03			4Q03			1Q04
Ferrous minerals		38.3	%		32.6	%		36.9	%
Logistics		27.6	%		3.5	%		24.7	%
Aluminum		13.3	%		15.9	%		24.5	%


1Q04			9

US GAAP

Considerable operating improvement was achieved in 1Q04 vis-à-vis 4Q03, with EBIT increasing US$ 137 million. This occured mainly due to the reduction of US$ 77 million in COGS, US$ 5 million selling and administrative expenses, US$ 14 million in research and development expenses and US$ 73 million in other operating expenses.

The decrease in other operating expenses reflects the non-recurring nature of the increase which took place in 4Q03, as a result of asset write-offs and provisions, which had an significant negative impact on the operating performance in that quarter.

Payroll costs within COGS decreased US$ 16 million due to the reduction in the number of employees at FCA as well as the reduction in overtime, in addition to the non-recurring provisions which took place in the last quarter of 2003.

Demurrage costs decreased US$ 5 million, from US$ 17 million in 4Q03 to US$ 12 million in 1Q04. Fuel costs decreased US$ 10 million due to lower production level and cargo transportation in 1Q04 caused by seasonality. Sesonality was also the determining factor to explain the decrease of US$ 29 million in material costs.

The investments that are taking place in the Ponta da Madeira and Tubarão ports aim to increase port-handling capacity and to reduce demurrage costs. At the same time, efforts are being made to improve fuel eficiency in the railroads, pelletizing plants, and in the Alunorte alumina refinery. Such efforts will result in lower levels of fuel consumption for each production unit.

The reduction in outsourced service costs is explained by the lower costs, of US$ 18 million, incurred by Caemi with iron ore transportation, as a result of a discount given by MRS Logística, of PIS and Cofins fiscal credits and of the seasonal reduction in activitity in the first quarter of the year.

Adjusted EBIT margin in the ferrous minerals division reached 36.9% in 1Q04, a decline of 140 bp in relation to 1Q03, however showing an increase of 430 bp in comparison to 4Q03. The narrower margin compared to 1Q03 reflects the consolidation of Caemi, while the margin improvement on 4Q03 was influenced by the iron ore and pellet price increases announced in January, which had a positive impact of US$49 million in 1Q04.

Adjusted EBIT margin in the Company’s logistics services has fluctuated significantly, showing a sharp drop in 4Q03 followed by a strong recovery in 1Q04. This can be partially attributed to the effect of consolidating FCA and its operating improvement in 1Q04, determined in part by an increase in average revenue per 1000 ntk. This figure increased from US$ 19.47 in 1Q03, to US$ 19.83 in 4Q03, and to US$ 21.33 in 1Q04.

The Company’s aluminum businesses have shown significant improvement in their operating margins. Margin in 1Q04, of 24.5%, was 1120 bp higher than in 1Q03 and 860 bp higher than in 4Q03. These margin expansions were due to an increase of 25.6% in alumina prices and a reduction in operating costs at Alunorte, as a result of larger production scale with the addition of Module 3. It is worth pointing out that the operating margins in this business are artificially low because Albras is not consolidated in US GAAP financial statements. Only the gain obtained from the resale of primary aluminum bought from Albras is shown in the operating margin calculation.


1Q04			10

US GAAP

COGS BREAKDOWN


	US$ million
	1Q03		%		4Q03		%		1Q04		%
Personnel		54		8.4		100		10.0		84		9.1
Material		85		13.2		125		12.4		96		10.4
Fuel		69		10.8		107		10.7		97		10.4
Outsourced Services		83		12.9		239		23.8		192		20.7
Acquisition of Iron Ore and Pellets		120		18.7		66		6.6		102		11.0
Acquisition of Other Products		135		21.1		169		16.8		178		19.2
Depreciation and Exhaustion		41		6.4		77		7.7		93		10.0
Energy		21		3.3		56		5.6		41		4.4
Others		33		5.1		66		6.6		45		4.8
Total		641		100.0		1,005		100.0		928		100.0

RECORD CASH GENERATION IN 1Q04: US$ 685 MILLION

Cash generation, as measured by adjusted EBITDA, reached US$ 685 million, a new all-time quarterly record for CVRD. This represented an increase of 55.0% relative to 1Q03, and of 20.6% vis-à-vis 4Q03.

In the 12 months to April 2004, adjusted EBITDA amounted to US$ 2.373 billion. 1Q04 is the eighth consecutive quarter to see an increase in adjusted Last Twelve Months (LTM) adjusted EBITDA, reflecting CVRD’s trajectory of profitable growth and shareholder value creation.

The US$ 243 million increase in cash generation in 1Q04, compared to 1Q03, is basically explained by the US$ 166 million increase in adjusted EBIT and the US$ 25 million in dividends received from non-consolidated affiliates and joint ventures.

In 1Q04, CVRD received US$ 61 million in dividends, US$ 21 million from MRN, US$ 19 million from Samarco, US$ 13 million from Usiminas and US$ 8 million from various other companies.

Cash generation composition by business area in 1Q04 was as follows: ferrous minerals 73.9%, aluminum 12.1%, logistics 10.9%, non-ferrous minerals 1.2% and others 1.9%, which correspond to dividends received from steel companies.

ADJUSTED EBITDA


	US$ million
	1Q03		4Q03		1Q04
Net Operating Revenues		1,110		1,638		1,610
COGS		(641)		(1.005)		(928)
S,G &A		(49)		(97)		(92)
Research and Development		(11)		(37)		(23)
Other Operational Expenses		(46)		(107)		(38)
Adjusted EBIT		363		392		529

Depreciation, Amortization & Exhaustion		43		78		95
Dividends Received		36		59		61

Adjustment for Non-recurring Items (asset impairment)		—		39		—

Adjusted EBITDA		442		568		685


1Q04			11

US GAAP

ADJUSTED EBITDA BY BUSINESS AREA


	US$ million
	1Q03		%		4Q03		%		1Q04		%
Ferrous Minerals		355		80.3		446		78.5		506		73.9
Non- Ferrous Minerals		9		2.0		2		0.3		8		1.2
Logistics		38		8.6		31		5.5		75		10.9
Aluminum		32		7.3		75		13.2		83		12.1
Others		8		1.8		14		2.5		13		1.9
Total		442		100.0		568		100.0		685		100.0

EARNINGS OF US$ 405 MILLION

Net earnings obtained in 1Q04, of US$ 405 million, showed an increase of 14.4% on 1Q03, when earnings amounted to US$ 354 million, and an increase of 50.0% on the earnings of US$ 270 million reported in the previous quarter.

Basically the earnings growth in 1Q04, compared to 1Q03, was due to three factors: (a) an improvement of US$ 166 million in EBIT; (b) a reduction of US$ 18 million in income tax provisions; and (c) asset write-offs of US$ 10 million which occurred in 1Q03, and which were not repeated in 1Q04.

On the other hand, a number of factors partially offset the positive effects just mentioned: an increase of US$ 89 million in foreign exchange losses, a US$ 44 million rise in net financial expenses and US$ 4 million reduction in equity income.

The Brazilian Real appreciated 5.1% vis-à-vis the US dollar between the end of 1T03 and the end of December 2002. However, between the end of December 2003 and March 2004, the Real depreciated slightly (by 0.7%). Therefore, whereas there was a foreign exchange gain of US$ 50 million in 1T03, there was a foreign exchange loss of US$ 399 million in 1T04.

CVRD’s equity income from its non-consolidated subsidiaries improved significantly between 1Q03 and 1Q04 in all areas, with the exception of the results from the aluminum businesses, which incurred foreign exchange losses.

RESULTS FROM SHAREHOLDINGS


	US$ million
	1Q03			4Q03			1Q04
Steel		19			21			34
Aluminum, Alumina and bauxite		48			24			18
Logistics		(10	)		36			6
Iron Ore and Pellets		34			23			33
Others		3			(16	)		(1	)
Total		94			88			90

DEBT – COMMITTED CREDIT LINES

CVRD is to use committed credit line instruments with the aim of improving the efficiency of its cash management and alleviating debt refinancing risks during moments of instability in financial markets. To this end, US$500 million in global committed credit line facilities have been established with the main commercial


1Q04			12

US GAAP

banks, US$ 400 million of which can be used over a period of up to one year after the date of disbursement, with a repayment period of up to one year, and US$ 100 million, which can be used for a period of up to 24 months, with a repayment period of 36 months after the contract is signed. These credit lines will be made available to CVRD although the Company does not intend to use them unless liquidity becomes excessively tight.

The establishment of committed credit line facilities is consistent with the best financial management practices and contributes to achieve a decoupling from the sovereign risk.

The Company redeemed the CVRD 2004 bond at the beginning of April, which had a face value of US$ 300 million and a coupon of 10% per annum. At the same time, it obtained a syndicated loan of US$ 300 million, with a tenor of seven years and an average term of 4.25 years, at the cost of the six-month Libor rate plus 0.7% a year.

CVRD’s total debt at March 31, 2004 amounted to US$ 4.244 billion, an increase on the position reported at the end of 2003, of US$ 4.028 billion. This increase was the result of raising funds ahead of schedule, for 2004, to take advantage of the favorable conditions in financial markets at the beginning of this year. For example, in January, the Company issued a 30-year bond, with a coupon of 8.25% a year, and a yield to maturity of 8.35% a year, with a face value of US$ 500 million.

Short-term debt registered a decrease of US$ 304 million in relation to the position at the end of December 2003, while long-term debt increased US$ 520 million. The average term of the Company’s debt at the end of 1Q04 was 6.32 years, more than double of that registered at the end of 2002, without any significant increase in average debt cost, which remains below 7% a year.

Net debt ⁽⁴⁾ decreased US$ 200 million, from US$ 3.443 billion at the end of December 2003 to US$ 3.243 billion at the end of March 2004.

Guarantees provided to affiliates and non-consolidated joint ventures amounted to US$ 260 million, a reduction on the figure registered at the end of December last year, of US$ 283 million.

Due to the strong expansion in adjusted accumulated EBITDA in the last 12 months, which reached US$ 2.373 billion, the debt leverage indicator, Total Debt/LTM adjusted EBITDA, fell for the second quarter running to 1.79x. The ratio of Total Debt /Enterprise Value at the end of 1Q04 was 18.1%.

There was an improvement in interest coverage, as measured by the ratio LTM adjusted EBITDA /LTM interest paid ⁽⁵⁾. This metric increased from 11.51x at the end of 2003, to 11.69x in 1Q04.

All the Company’s debt indicators — leverage, interest coverage and average maturity profile — reveal the financial strength of the balance sheet, with the availability of committed credit lines, if needed, providing additional comfort to its creditors.

FINANCIAL EXPENSES


	US$ million
Financial Expenses on:	4Q03			1Q04
Local Debt		(9	)		(9	)
External Debt		(41	)		(43	)
Debt with Related Parties		(2	)		(3	)
Total Debt-related Financial Expenses		(52	)		(55	)


1Q04			13

US GAAP


	US$ million
Gross Interest on:	4Q03			1Q04
Tax and Labor Contingencies		(24	)		(6	)
Tax on Financial Transactions (CPMF)		(8	)		(3	)
Derivatives		5			(7	)
Others		(43	)		(38	)
Total Gross Interest		(70	)		(54	)
Total		(122	)		(109	)

DEBT INDICATORS


	US$ million
	1Q03		4Q03		1Q04
Gross Debt		3,314		4,028		4,244
Net Debt		2,030		3,443		3,243
Gross Debt / LTM Adjusted EBITDA (x)		1.82		1.89		1.79
LTM Adjusted EBITDA / LTM Interest Expenses (x)		8.45		11.51		11.69
Gross Debt / EV⁽⁶⁾ (x)		0.27		0.16		0.18

Enterprise Value = market capitalization + net debt

INVESTMENT OF US$ 358 MILLION IN THE QUARTER

During the first quarter of 2004, CVRD carried out investments of approximately US$ 358 million, representing 20% of the total 2004 capex budget, of US$ 1.815 billion.

Growth capex amounted to US$ 249 million, while stay-in-business capex totaled US$ 109 million.

Of the amount allocated to growth capex, US$ 14 million was spent on mineral exploration, 91% in Brazil and 9% in other countries, principally in Chile, Peru, Gabon, Angola and Mongolia. The mineral exploration efforts included prospecting for copper, nickel, gold, kaolin, bauxite, manganese and platinum group metals.

•

Status of main ongoing projects:

Budget

US$ million

Area

Project

1Q04

2004

Status

Ferrous Minerals

Expansion of Carajás iron ore mines to 70 Mtpy – Northern System

76.4

Carajás already set to produce 70 million tons in 2004.

Expansion of Carajás iron ore mines to 85 Mtpy – Northern System

28.8

This project will add 15 million tons a year to CVRD’s production capacity and is scheduled for completion in 2006. Completion of the Phase II of the Pier III at the Ponta da Madeira Maritime Terminal of is scheduled for completion in July 2005.


1Q04			14

US GAAP

Budget

US$ million

Area

Project

1Q04

2004

Status

Brucutu iron ore
mine Phase I
–Southern System

37.3

Brucutu is not a modular project and should produce 4 million tons this year. Phase I of the project will be completed in 2006, when nominal production capacity will reach 12 million tons a year.

Fábrica Nova iron
ore mine – Southern
System

31.1

First phase scheduled for completion in 2005, when the mine will have a nominal production capacity of 10 million tons a year. Start-up for the second phase is scheduled for 2007, when the mine is expected to reach production of 15 million tons a year.

Expansion of iron ore mines at Itabira –Southern System

13.2

Expansion of production capacity and modernization of operations at the Itabira mines in order to increase production capacity by 3 million tons a year, increasing nominal production capacity to 46 million tons a year. Completion is expected for 2006.

Non-ferrous Minerals

Expansion of potash mine at Taquari-Vassouras

21.2

Approximately 65% of the work related to capacity expansion has already been carried out. During March, mining activities were shut down in order to increase the capacity of the shaft through which production is moved out of the underground mine (allowing the extra potash production to be moved, with the capacity expansion scheduled for completion in 3Q05).

Aluminum

Paragominas I

83.2

Environmental licenses were obtained for the mine’s development and for the construction of a 230 kilometer mineral pipeline which will transport the bauxite to Alunorte’s refinery. Start-up of operations is scheduled for late 2006, with production capacity of 4.5 million tons of bauxite a year.

Alunorte modules 4 and 5

183.3

The project for the construction of these modules will increase the production capacity of the refinery to 4.2 million tons of alumina a year, with work scheduled for completion in 2006.

Logistics

Purchases of locomotives and railcars–EFVM/EFC/ FCA

312.6

In 1Q04, the Company received delivery of 1,378 railcars — 735 for the transportation of iron ore and 643 for general cargo, as well as 19 locomotives. Of these locomotives, eight are new and the others are re-conditioned, which will be utilized by FCA. Total deliveries programmed for 2004 amount to 3,178 railcars and 88 locomotives.

Power Generation

Aimorés
hydroelectric power
plant

19.0

The plant is located on the Doce river, in the state of Minas Gerais, Brazil, and will have a generation capacity of 330MW, with start-up scheduled for July 2005.

Candonga
hydroelectric power
plant

3.5

The work on the plant has already been completed. The reservoir is being filled and commercial operations will begin in June. By August, all the turbines will be generating electricity. The plant has a generating capacity of 140MW.

Capim Branco I & II
hydroelectric power
plants

33.6

Both plants are located on the Araguari river, in the state of Minas Gerais, Brazil, and will have a capacity of 240MW and 210MW, respectively. The start-up of both plants is scheduled for 2006.

SELECTED FINANCIAL INDICATORS – MAIN NON CONSOLIDATED AFFILIATES AND JOINT VENTURES

Selected financial indicators for the main non consolidated affiliates and joint ventures are available on CVRD Quarterly Financial Statements, on the Company’s website, www.cvrd.com.br, under “Investor Relations”.

CONFERENCE CALL/WEBCAST

On 14 May, Friday, a conference call/ webcast will be held at 12:00 pm, local time (Rio de Janeiro), 11:00 am Eastern Standard Time, USA and 4:00 pm British Standard Time. Instructions to participate in this event are available on CVRD’s website, www.cvrd.com.br, under “Investor Relations”. A recording of the conference call/webcast will be available on the site for the 90 days following the conference call on 14 May 2004.


1Q04			15

US GAAP

FINANCIAL STATEMENTS


	US$ million
	1Q03			4Q03			1Q04
Gross operating revenues		1,153			1,690			1,685
Taxes		(43	)		(52	)		(75	)
Net Operating Revenue		1,110			1,638			1,610
Cost of Goods Sold		(641	)		(1,005	)		(928	)
Gross Profit		469			633			682
Gross Margin (%)		42.3			38.6			42.4
Selling, General and Administrative Expenses		(49	)		(97	)		(92	)
Research and Development Expenses		(11	)		(37	)		(23	)
Employee Profit-Sharing		(12	)		(9	)		(13	)
Others		(34	)		(98	)		(25	)
Operating Profit		363			392			529
Financial Revenues		28			18			11
Financial Expenses		(82	)		(122	)		(109	)
Monetary Variation		50			(8	)		(39	)
Gains on Sale of Affiliates		—			17			—
Tax and Social Contribution (Current)		(6	)		10			(80	)
Tax and Social Contribution (Deferred)		(65	)		(76	)		27
Equity Income and Provision for Losses		94			88			90
Accounting Changes for Asset Write-offs		(10	)		—			—
Minority Shareholding Participation		(18	)		(49	)		(24	)
Net Earnings		354			270			405
Earnings per Share (US$)		0.92			0.70			1.06

BALANCE SHEET


	US$ million
	03/31/03		12/31/03		03/31/04
Assets
Current		2.696		2.474		2.938
Long-term		1.407		1.442		1.427
Fixed		4.485		7.518		7.796

Total		8.588		11.434		12.161

Liabilities
Current		1.638		2.253		2.147
Long Term		3.310		4.297		4.915
Shareholders’ Equity		3.640		4.884		5.099
Paid-up Capital		2.944		3.367		3.367
Reserves		696		1.517		1.732

Total		8.588		11.434		12.161


1Q04			16

US GAAP

CASH FLOW STATEMENT


	US$ million
	1Q03		4Q03		1Q04
Cash flows from operating activities:
Net income		354		270		405
Adjustments to reconcile net income with cash provided by operating activities:
Depreciation, depletion and amortization		43		78		95
Dividends received		36		59		61
Equity in results of affiliates and joint ventures and change in provision for losses on equity investments		(94)		(88)		(90)
Deferred income taxes		65		76		(27)
Provisions for contingencies		9		—		—
Impairment of property, plant and equipment		—		39		—
Gain on sale of investment		—		(17)		—
Change in accounting practice for asset retirement obligations		10		—		—
Pension plan		3		4		3
Foreign exchange and monetary losses		(142)		5		43
Net unrealized derivative losses		3		20		31
Minority interest		18		49		24
Others		6		6		(32)
Decrease (increase) in assets:
Accounts receivable		64		(68)		(25)
Inventories		24		6		—
Others		(1)		(36)		(25)
Increase (decrease) in liabilities:
Suppliers		(93)		59		(38)
Payroll and related charges		(6		(17)		(8)
Others		57		69		131
Net cash provided by operating activities		356		514		548
Cash flows from investing activities:
Loans and advances receivable		22		(56)		56
Guarantees and deposits		(12)		(13)		(20)
Additions to investments		—		1		(10)
Additions to property, plant and equipment		(198)		(594)		(379)
Proceeds from disposals of investment		—		83		—
Proceeds from disposals of property, plant and equipment		—		—		—
Net cash used to acquire subsidiaries		—		—		—
Net cash used in investing activities		(188)		(579)		(353)
Cash flows from financing activities:
Short-term debt, net issuances (repayments)		(93)		(1)		44
Loans		(16)		22		(34)
Long-term debt		179		41		665
Repayments of long-term debt		(101)		(351)		(451)
Interest attributed to stockholders		—		(427)		—
Net cash used in financing activities		(31)		(716)		224
Increase (decrease) in cash and cash equivalents		137		(781)		419
Effect of exchange rate changes on cash and cash equivalents		56		26		(3)
Cash and cash equivalents, beginning of period		1,091		1,340		585
Cash and cash equivalents, end of period		1,284		585		1,001
Cash paid during the period for:
Interest on short-term debt		(6)		—		—
Interest on long-term debt		(53)		(38)		(77)
Income tax		(6)		(16)		—
Non-cash transactions
Conversion of loans receivable to investments		(11)		(91)		—
Income tax paid with credits		—		—		—


1Q04			17

US GAAP

APPENDIX

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

(1)

Adjusted EBIT


	US$ million
	1Q03		4Q03		1Q04
Net operating revenues		1,110		1,638		1,610
COGS		(641)		(1,005)		(928)
SG&A		(49)		(97)		(92)
Research & Development		(11)		(37)		(23)
Other operating expenses		(46)		(107)		(38)
Adjusted EBIT		363		392		529

(2)

Adjusted EBITDA

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

RECONCILIATION BETWEEN ADJUSTED EBITDA VS. OPERATING CASH FLOW


	US$ million
	1Q03		4Q03		1Q04
Operating cash flow		356		514		548
Income tax		—		(26)		101
Income tax paid		6		16		—
Monetary and Foreign Exchange Losses		92		3		(4)
Financial Expenses		41		61		112
Net Working Capital		(45)		(13)		(56)
Others		(8)		13		(16)
Adjusted EBITDA		442		568		685


1Q04			18

US GAAP

(3)

Gross Debt / last 12 months’ Adjusted EBITDA


	1Q03		4Q03		1Q04
Gross Debt / LTM Adjusted EBITDA (x)		1.82		1.89		1.79
Gross Debt / LTM Operating cash flow (x)		1.55		2.29		2.18

(4)

Net Debt

RECONCILIATION BETWEEN GROSS DEBT VS. NET DEBT


	US$ million
	1Q03		4Q03		1Q04
Gross Debt		3,314		4,028		4,244
Cash and cash equivalents		1,284		585		1,001
Net Debt		2,030		3,443		3,243

(5)

LTM Adjusted EBITDA / LTM interest expenses


	1Q03		4Q03		1Q04
LTM Adjusted EBITDA / LTM interest expenses (x)		8.45		11.51		11.69
LTM Operating income / LTM interest expenses (x)		6.93		8.89		8.92

(6)

Gross Debt / Enterprise Value


	1T03		4T03		1T04
Gross Debt / EV (x)		0.27		0.16		0.18
Gross Debt / Total Assets (x)		0.39		0.35		0.35

Entreprise Value = net debt + market capitalization

“This communication may include declarations which represent the expectations of the Company’s Management about future results or events. All such declarations, when based on future expectations and not on historical facts, involve various risks and uncertainties. The Company cannot guarantee that such declarations turn out to be correct. Such risks and uncertainties include factors relative to the Brazilian economy and capital markets, which are volatile and may be affected by developments in other countries; factors relative to the iron ore business and its dependence on the steel industry, which is cyclical in nature; and factors relative to the high degree of competitiveness in industries in which CVRD operates. To obtain additional information on factors which could cause results to be different from those estimated by the Company, please consult the reports filed with the Comissão de Valores Mobiliários (CVM — Brazilian stock exchange regulatory authority) and the U.S. Securities and Exchange Commission — SEC, including the most recent Annual Report — CVRD Form 20F.”


1Q04			19

COMPANHIA VALE DO RIO DOCE

INDEX TO CONDENSED CONSOLIDATED FINANCIAL INFORMATION


	Page
Report of PricewaterhouseCoopers Auditores Independentes		F-2
Consolidated Balance Sheets as of March 31, 2004 and December 31, 2003		F-3
Consolidated Statements of Income for the three-month periods ended March 31, 2004 and 2003 and December 31, 2003		F-5
Consolidated Statements of Cash Flows for the three-month periods ended March 31, 2004 and 2003 and December 31, 2003		F-6
Consolidated Statements of Changes in Stockholders’ Equity for the three-month periods ended March 31, 2004 and 2003 and December 31, 2003		F-7
Notes to the Consolidated Financial Information		F-8
Supplemental Financial Information		S-1

F-1

REPORT OF INDEPENDENT ACCOUNTANTS

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

We have reviewed the accompanying unaudited condensed consolidated balance sheet of Companhia Vale do Rio Doce and subsidiaries as of March 31, 2004, and the unaudited condensed consolidated statements of income, of cash flows and of changes in stockholders’ equity for the three-month periods ended March 31, 2004 and 2003 and December 31, 2003. This financial information is the responsibility of the Company’s management. The unaudited financial information of certain affiliates, the investments in which total US$ 351 million at March 31, 2004 and equity in earnings which total US$ 20 million, US$ 10 million and US$ 24 million for the three-month periods ended March 31, 2004 and 2003 and December 31, 2003, respectively, and that of certain subsidiaries, which statements reflect total assets of US$ 798 million at March 31, 2004 and total revenues of US$ 138 million, US$ 34 million and US$ 114 million for the three-month periods ended March 31, 2004 and 2003 and December 31, 2003, respectively, were reviewed by other independent auditors whose reports thereon have been furnished to us.

We conducted our reviews in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists principally of applying analytical procedures to financial data and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with auditing standards generally accepted in the United States of America, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

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

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

As discussed in Note 4 to the financial statements, the Company changed its method of accounting for asset retirement obligations, as from January 1, 2003.

PricewaterhouseCoopers
Auditores Independentes

Rio de Janeiro, Brazil
May 7, 2004

F-2

Condensed Consolidated Balance Sheets
Expressed in millions of United States dollars


	March		December
	31, 2004		31, 2003
	(unaudited)
Assets
Current assets
Cash and cash equivalents		1,001		585
Accounts receivable
Related parties		127		115
Unrelated parties		710		703
Loans and advances to related parties		14		56
Inventories		502		505
Deferred income tax		144		91
Others		440		419

		2,938		2,474

Property, plant and equipment, net		6,727		6,484
Investments in affiliated companies and joint ventures and other investments, net of provision for losses on equity investments		1,069		1,034
Other assets
Goodwill on acquisition of subsidiaries		448		451
Loans and advances
Related parties		40		40
Unrelated parties		66		68
Prepaid pension cost		78		82
Deferred income tax		205		234
Judicial deposits		424		407
Unrealized gain on derivative instruments		1		5
Others		165		155

		1,427		1,442

TOTAL		12,161		11,434

F-3

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

(Continued)


	March			December
	31, 2004			31, 2003
	(unaudited)
Liabilities and stockholders’ equity
Current liabilities
Suppliers		441			482
Payroll and related charges		87			78
Interest attributed to stockholders		276			118
Current portion of long-term debt - unrelated parties		695			1,009
Short-term debt		171			129
Loans from related parties		87			119
Others		390			318

		2,147			2,253

Long-term liabilities
Employees post-retirement benefits		199			198
Long-term debt - unrelated parties		3,288			2,767
Loans from related parties		3			4
Provisions for contingencies (Note 10)		633			635
Unrealized loss on derivative instruments		121			96
Others		318			268

		4,562			3,968

Minority interests		353			329

Stockholders’ equity
Preferred class A stock - 600,000,000 no-par-value shares authorized and 138,575,913 issued		1,055			1,055
Common stock - 300,000,000 no-par-value shares authorized and 249,983,143 issued		1,902			1,902
Treasury stock - 4,183 (2003 - 4,183) preferred and 4,715,170 common shares		(88	)		(88	)
Additional paid-in capital		498			498
Other cumulative comprehensive income		(4,403	)		(4,375	)
Appropriated retained earnings		3,016			3,035
Unappropriated retained earnings		3,119			2,857

		5,099			4,884

TOTAL		12,161			11,434

See notes to condensed consolidated financial information.

F-4

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


	Three months ended
	March			March			December
	31, 2004			31, 2003			31, 2003
Operating revenues, net of discounts, returns and allowances
Sales of ores and metals
Iron ore and pellets		1,061			746			1,075
Kaolin		39			16			41
Manganese and ferroalloys		131			75			104
Potash		23			21			24
Others		—			9			—

		1,254			867			1,244
Revenues from logistic services		191			115			192
Aluminum products		234			167			254
Other products and services		6			4			—

		1,685			1,153			1,690
Value-added tax		(75	)		(43	)		(52	)

Net operating revenues		1,610			1,110			1,638

Operating costs and expenses
Cost of ores and metals sold		(643	)		(428	)		(670	)
Cost of logistic services		(115	)		(70	)		(138	)
Cost of aluminum products		(167	)		(142	)		(194	)
Others		(3	)		(1	)		(3	)

		(928	)		(641	)		(1,005	)
Selling, general and administrative expenses		(92	)		(49	)		(97	)
Research and development		(23	)		(11	)		(37	)
Employee profit sharing plan		(13	)		(12	)		(9	)
Others		(25	)		(34	)		(98	)

		(1,081	)		(747	)		(1,246	)

Operating income		529			363			392

Non-operating income (expenses)
Financial income		11			28			18
Financial expenses		(109	)		(82	)		(122	)
Foreign exchange and monetary gains (losses), net		(39	)		50			(8	)
Gain on sale of investments		—			—			17

		(137	)		(4	)		(95	)

Income before income taxes, equity results and minority interests		392			359			297

Income taxes
Current		(80	)		(6	)		10
Deferred		27			(65	)		(76	)

		(53	)		(71	)		(66	)

Equity in results of affiliates and joint ventures and change in provision for losses on equity investments		90			94			88
Minority interests		(24	)		(18	)		(49	)

Income from continuing operations		405			364			270

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

Net income		405			354			270

Basic earnings per Preferred Class A Share		1.06			0.92			0.70

Basic earnings per Common Share		1.06			0.92			0.70

Weighted average number of shares outstanding (thousands of shares)
Common shares		245.268			245.268			245.268
Preferred Class A shares		138.571			138.571			138.571

See notes to condensed consolidated financial information.

F-5

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


	Three months ended
	March			March			December
	31, 2004			31, 2003			31, 2003
Cash flows from operating activities:
Net income		405			354			270
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation, depletion and amortization		95			43			78
Dividends received		61			36			59
Equity in results of affiliates and joint ventures and change in provision for losses on equity investments		(90	)		(94	)		(88	)
Deferred income taxes		(27	)		65			76
Provisions for other contingencies		—			9			—
Impairment of property, plant and equipment		—			—			39
Gain on sale of investments		—			—			(17	)
Change in accounting pratice for asset retirement obligations (Note 4)		—			10			—
Pension plan		3			3			4
Foreign exchange and monetary losses (gains)		43			(142	)		5
Net unrealized derivative losses (gains)		31			3			20
Minority interests		24			18			49
Others		(32	)		6			6
Decrease (increase) in assets:
Accounts receivable		(25	)		64			(68	)
Inventories		—			24			6
Others		(25	)		(1	)		(36	)
Increase (decrease) in liabilities:
Suppliers		(38	)		(93	)		59
Payroll and related charges		(8	)		(6	)		(17	)
Others		131			57			69

Net cash provided by operating activities		548			356			514

Cash flows from investing activities:
Loans and advances receivable
Related parties
Additions		—			(23	)		(65	)
Repayments		42			29			9
Others		14			16			—
Guarantees and deposits		(20	)		(12	)		(13	)
Additions to investments		(10	)		—			1
Additions to property, plant and equipment		(379	)		(198	)		(594	)
Proceeds from disposal of investments		—			—			83

Net cash used in investing activities		(353	)		(188	)		(579	)

Cash flows from financing activities:
Short-term debt, net issuances (repayments)		44			(93	)		(1	)
Loans
Related parties
Additions		21			—			24
Repayments		(55	)		(16	)		(2	)
Issuances of long-term debt
Related parties		—			2			12
Others		665			177			29
Repayments of long-term debt
Related parties		—			—			—
Others		(451	)		(101	)		(351	)
Interest attributed to stockholders		—			—			(427	)

Net cash used in financing activities		224			(31	)		(716	)

Increase (decrease) in cash and cash equivalents		419			137			(781	)
Effect of exchange rate changes on cash and cash equivalents		(3	)		56			26
Cash and cash equivalents, beginning of period		585			1,091			1,340

Cash and cash equivalents, end of period		1,001			1,284			585

Cash paid during the period for:
Interest on short-term debt		(2	)		(6	)		—
Interest on long-term debt		(75	)		(53	)		(38	)
Income tax		—			(6	)		(16	)
Non-cash transactions
Conversion of loans receivable to investments		—			(11	)		(91	)

See notes to condensed consolidated financial information.

F-6

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


	Three months ended
	March			March			December
	31, 2004			31, 2003			31, 2003
Preferred class A stock (including one special share)

End of the period		1,055			904			1,055

Common stock

End of the period		1,902			1,630			1,902

Treasury stock

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

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

Other cumulative comprehensive income
Cumulative translation adjustments
Beginning of the period		(4,449	)		(5,185	)		(4,473	)
Change in the period		(31	)		186			24

End of the period		(4,480	)		(4,999	)		(4,449	)

Unrealized gain on available-for-sale securities
Beginning of the period		74			—			14
Change in the period		3			13			60

End of the period		77			13			74

Adjustments relating to investments in affiliates
Beginning of the period		—			10			10
Transfer to retained earnings		—			—			(10	)

End of the period		—			10			—

Total other cumulative comprehensive income		(4,403	)		(4,976	)		(4,375	)

Appropriated retained earnings
Beginning of the period		3,035			2,230			2,251
Transfer (to) from retained earnings		(19	)		121			784

End of the period		3,016			2,351			3,035

Retained earnings
Beginning of the period		2,857			3,288			3,472
Net income		405			354			270
Interest attributed to stockholders
Preferred class A stock		(58	)		(72	)		(40	)
Common stock		(104	)		(128	)		(71	)
Appropriation (to) from reserves		19			(121	)		(774	)

End of the period		3,119			3,321			2,857

Total stockholders’ equity		5,099			3,640			4,884

Comprehensive income is comprised as follows:
Net income		405			354			270
Cumulative translation adjustments		(31	)		186			24
Unrealized gain (loss) on available-for-sale securities		3			13			60

Total comprehensive income		377			553			354

Shares
Preferred class A stock (including one special share)		138,575,913			138,575,913			138,575,913

Common stock		249,983,143			249,983,143			249,983,143

Treasury stock (1)
Beginning of the period		(4,719,353	)		(4,719,651	)		(4,719,353	)
Sales		—			16			—

End of the period		(4,719,353	)		(4,719,635	)		(4,719,353	)

		383,839,703			383,839,421			383,839,703

Interest attributed to stockholders (per share)
Preferred class A stock (including one special share)		0.42			0.52			0.29
Common stock		0.42			0.52			0.29

(1)

As of March 31, 2004, 4,715,170 common shares and 4,183 preferred shares were held in treasury in the amount of $ 88. The 4,715,170 common shares guarantee a loan of to our subsidiary Alunorte.

See notes to condensed consolidated financial information.

F-7

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

1		The Company and its operations

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

		The main operating subsidiaries we consolidate are as follows:


			Head office	Principal
Subsidiary	% ownership		location	activity
Alumina do Norte do Brasil S.A. - Alunorte		57	Brazil	Aluminum
CADAM S.A. (2) (4)		37	Brazil	Kaolin
CELMAR S.A. - Indústria de Celulose e Papel (3)		100	Brazil	Forestry
CVRD Overseas Ltd.		100	Cayman Island	Trading
Ferrovia Centro-Atlântica S.A. (4)		100	Brazil	Logistics
Ferteco Mineração S.A. - FERTECO (3)		100	Brazil	Iron ore and Pellets
Itabira Rio Doce Company Ltd. - ITACO		100	Cayman Island	Trading
Mineração Serra do Sossego S.A. (1) (5)		100	Brazil	Copper
Minerações Brasileiras Reunidas S.A. - MBR(4)(7)		56	Brazil	Iron ore
Navegação Vale do Rio Doce S.A. - DOCENAVE		100	Brazil	Shipping
Pará Pigmentos S.A.		82	Brazil	Kaolin
Rio Doce International Finance Ltd. - RDIF		100	Bahamas	International finance
Rio Doce Manganèse Europe - RDME		100	France	Ferroalloys
Rio Doce Manganese Norway - RDMN		100	Norway	Ferroalloys
Salobo Metais S.A. (1)		100	Brazil	Copper
Rio Doce Manganês S.A. (6)		100	Brazil	Manganese and Ferroalloys
Urucum Mineração S.A.		100	Brazil	Iron ore, Ferroalloys and Manganese
Vale do Rio Doce Alumínio S.A. - ALUVALE (5)		100	Brazil	Aluminum

(1)		Development stage companies

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

(3)		Merged with CVRD on August 29, 2003

(4)		Consolidated as from September 2003

(5)		Merged with CVRD on December 30, 2003

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

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

2		Basis of consolidation

		All majority-owned subsidiaries where we have both share and management control are consolidated, with elimination of all significant intercompany accounts and transactions. Investments in unconsolidated affiliates and joint ventures are reported at cost plus our equity in undistributed earnings or losses. Included in this category are certain joint ventures in which we have majority ownership but, by force of shareholders’ agreements, do not have effective management control. We provide for losses on equity investments with negative stockholders’ equity where applicable (see Note 8).

		We evaluate the carrying value of our listed investments relative to publicly available quoted market prices. If the quoted market price is below book value, and such decline is considered 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-8

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

3		Summary of significant accounting policies

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

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

4		Change in accounting practice

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

5		Recently-issued accounting pronouncements

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

		The implementation date of FIN 46R is the first period ending after December 15, 2003 for Special Purpose Entities (SPEs) and as from January 1, 2004 for previously existing variable interest entities which are not SPEs. FIN 46R may be applied prospectively with a cumulative adjustment as of the date on which it is first applied or by restating previously issued financing statements for one or more years with a cumulative-effect adjustment as of the beginning of the first year restated. It is possible that we will consolidate or disclose information in relation to certain joint ventures and equity investments.

F-9

		The adoption of FIN 46R did not result in consolidation of any additional entities nor any non SPE entities.

6		Income taxes

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

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


	Three months ended
	March			March			December
	31, 2004			31, 2003			31, 2003
Income before income taxes, equity results and minority interests		392			359			297

Federal income tax and social contribution expense at statutory enacted rates		(133	)		(122	)		(101	)
Adjustments to derive effective tax rate:
Tax benefit on interest attributed to stockholders		55			63			42
Exempt foreign income (expenses)		14			(16	)		(26	)
Difference on tax basis of equity investees		(14	)		—			(56	)
Tax incentives		9			—			12
Valuation allowance reversal (provision)		—			9			40
Other non-taxable gains (losses)		16			(5	)		23

Federal income tax and social contribution expense in consolidated statements of income		(53	)		(71	)		(66	)

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

Inventories


	March		December 31,
	31, 2004		2003
Finished products
Iron ore and pellets		144		146
Manganese and ferroalloys		80		78
Alumina		16		20
Kaolin		17		16
Others		6		8
Spare parts and maintenance supplies		239		237

		502		505

F-10

Investments in affiliated companies and joint ventures


	March 31, 2004									Investments
	Participation in				Net		Net income for			March 31,		December
	capital (%)				equity		the period			2004		31, 2003
	voting		total
Steel
Usinas Siderúrgicas de Minas Gerais S.A. - USIMINAS		22.99		11.46		319		157			37		31
Companhia Siderúrgica de Tubarão - CST (1)		26.93		28.79		364		62			102		86
California Steel Industries Inc. - CSI		50.00		50.00		205		(1	)		103		103
SIDERAR (costs $15) - available for sale investments		4.85		4.85		—		—			93		89

											335		309
Aluminum and bauxite
Mineração Rio do Norte S.A. - MRN		40.00		40.00		394		26			157		168
Valesul Alumínio S.A. - VALESUL		54.51		54.51		92		6			50		49
Alumínio Brasileiro S.A. - ALBRAS		51.00		51.00		226		7			115		112
Alumínio Brasileiro S.A. - ALBRAS - change in provision for losses											—		—

											322		329
Ferrous
Caemi Mineração e Metalurgia S.A. (3)		100.00		60.23		—		—			—		—
Companhia Nipo-Brasileira de Pelotização - NIBRASCO		51.11		51.00		40		5			20		18
Companhia Hispano-Brasileira de Pelotização - HISPANOBRÁS		51.00		50.89		33		1			17		17
Companhia Coreano-Brasileira de Pelotização - KOBRASCO		50.00		50.00		4		3			2		1
Companhia Coreano-Brasileira de Pelotização - KOBRASCO - change in provision for losses											—		—
Companhia Ítalo-Brasileira de Pelotização - ITABRASCO		51.00		50.90		23		1			12		11
Gulf Industrial Investment Company - GIIC		50.00		50.00		76		8			38		40
SAMARCO Mineração S.A. - SAMARCO (4)		50.00		50.00		379		51			226		221
Minas da Serra Geral S.A. - MSG		50.00		50.00		36		—			18		15
Others		—		—		—		—			20		21

											353		344
Logistics
Companhia Ferroviária do Nordeste - CFN - change in provision for losses (2)		—		—		—		—			—		—
Ferroban - Ferrovias Bandeirantes S.A. - change in provision for losses		—		—		—		—			1		1
Ferrovia Centro-Atlântica S.A. - FCA - change in provision for losses (3)		—		—		—		—			—		—
MRS Logística S.A		—		—		—		—			45		39
MRS Logística S.A. - change in provision for losses		—		—		—		—			—		—
Sepetiba Tecon S.A. - change in provision for losses		—		—		—		—			—		—
Others		—		—		—		—			5		4

											51		44
Other affiliates and joint ventures
Fertilizantes Fosfatados S.A. - FOSFERTIL (2)		—		—		—		—			—		—
Others		—		—		—		—			8		8

											8		8

Total											1,069		1,034

[Additional columns below]

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


	Equity Adjustments									Dividends received
																Quoted
	Three months ended									Three months ended						market
	March 31,			March 31,			December			March 31,		March 31,		December		March 31,
	2004			2003			31, 2003			2004		2003		31, 2003		2004
Steel
Usinas Siderúrgicas de Minas Gerais S.A. - USIMINAS		18			10			—			13		—		—		248
Companhia Siderúrgica de Tubarão - CST (1)		17			6			19			—		5		17		484
California Steel Industries Inc. - CSI		(1	)		3			2			—		—		—		—
SIDERAR (costs $15) - available for sale investments		—			—			—			—		—		—		93

		34			19			21			13		5		17		825
Aluminum and bauxite
Mineração Rio do Norte S.A. - MRN		11			4			12			21		5		11		—
Valesul Alumínio S.A. - VALESUL		3			4			2			2		—		6		—
Alumínio Brasileiro S.A. - ALBRAS		4			39			10			—		—		—		—
Alumínio Brasileiro S.A. - ALBRAS - change in provision for losses		—			1			—			—		—		—		—

		18			48			24			23		5		17		—
Ferrous
Caemi Mineração e Metalurgia S.A. (3)		—			5			—			—		—		—		—
Companhia Nipo-Brasileira de Pelotização - NIBRASCO		2			1			—			—		—		—		—
Companhia Hispano-Brasileira de Pelotização - HISPANOBRÁS		1			1			—			—		2		—		—
Companhia Coreano-Brasileira de Pelotização - KOBRASCO		1			—			1			—		—		—		—
Companhia Coreano-Brasileira de Pelotização - KOBRASCO - change in provision for losses		—			3			8			—		—		—		—
Companhia Ítalo-Brasileira de Pelotização - ITABRASCO		1			—			—			—		—		—		—
Gulf Industrial Investment Company - GIIC		4			2			3			6		5		—		—
SAMARCO Mineração S.A. - SAMARCO (4)		25			19			12			19		14		25		—
Minas da Serra Geral S.A. - MSG		—			1			—			—		—		—		—
Others		(1	)		2			(1	)		—		—		—		—

		33			34			23			25		21		25		—
Logistics
Companhia Ferroviária do Nordeste - CFN - change in provision for losses (2)		—			1			—			—		—		—		—
Ferroban - Ferrovias Bandeirantes S.A. - change in provision for losses		—			—			—			—		—		—		—
Ferrovia Centro-Atlântica S.A. - FCA - change in provision for losses (3)		—			(11	)		—			—		—		—		—
MRS Logística S.A		6			—			37			—		—		—		—
MRS Logística S.A. - change in provision for losses		—			1			—			—		—		—		—
Sepetiba Tecon S.A. - change in provision for losses		—			(1	)		(1	)		—		—		—		—
Others		—			—			—

		6			(10	)		36			—		—		—		—
Other affiliates and joint ventures
Fertilizantes Fosfatados S.A. - FOSFERTIL (2)		—			3			(9	)		—		5		—		—
Others		(1	)		—			(7	)		—		—		—		—

		(1	)		3			(16	)		—		5		—		—

Total		90			94			88			61		36		59		825

(1)		During the quarter ended June 30, 2003 CVRD acquired an additional 4.42% of the voting shares and 5.64% of the preferred shares, representing 5.17% of CST’s total capital for $ 60;

(2)		Investment sold in 2003;

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

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

F-11

Pension plans


	Three months ended
	March			March			December
	31, 2004			31, 2003			31, 2003
Service cost - benefits earned during the period		1			—			1
Interest cost on projected benefit obligation		38			31			32
Actual return on assets		(44	)		(31	)		(190	)
Amortization of initial transitory obligation		2			2			2
Net deferral		6			1			159

Net periodic pension cost		3			3			4

Employer contributions

We previously disclosed in our consolidated financial statements for the year ended December 31, 2003, that it expected to contribute $14 to our pension plan in 2004. As of March 31, 2004, $3 of contributions have been made. We do not expect any change in our previous estimate.

10		Commitments and contingencies

(a)		At March 31, 2004, we had extended guarantees for borrowings obtained by affiliates and joint ventures in the amount of $260, of which $221 is denominated in United States dollars and the remaining $39 in local currency, as follows:

Amount of

Denominated

Final

Counter

Affiliate or Joint Venture

guarantee

currency

Purpose

maturity

guarantees

ALBRAS

213

US$

Debt guarantee

2007

None

Debt guarantee

2010

None

SAMARCO

US$

Debt guarantee

2008

None

VALESUL

Debt guarantee

2007

None

Collateral

NIBRASCO

US$

Debt guarantee

2004

Pledge

260

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

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

(b)

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

F-12

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


	March 31, 2004				December 31, 2003
	Provision for		Judicial		Provision for		Judicial
	contingencies		deposits		contingencies		deposits
Labor claims		178		80		177		66
Civil claims		137		55		167		54
Tax - related actions		313		284		285		279
Others		5		5		6		8

		633		424		635		407

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

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

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

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

Our judicial deposits are made as required by the courts for us to be able to enter or continue a legal action. When judgment is favorable to us, we receive the deposits back; when unfavorable, the deposits are delivered to the prevailing party. An increase of $5 for tax deposits during 2003 refers mainly to an action in which we challenged the annual limitation on use to our tax loss carryforwards.

Contingencies settled in the three-month period ended March 31, 2004, and 2003 and December 31, 2003 aggregated $23, $21 and $19, respectively, and additional provisions aggregated $11, $30 and $73, respectively.

In addition to the contingencies for which we have made provisions we have possible losses in connection with tax contingencies totaling $309 and $214 at March 31, 2004 and 2003, respectively, for which no provision is maintained.

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

(d)		We are committed under a take-or-pay agreement to take annual delivery of approximately 226,950 metric tons per year of aluminum from ALBRAS at market prices. This estimate is based on 51% of ALBRAS expected production and, at a market price of $1,642.71 per metric ton, at March 31, 2004, represents an annual commitment of $373. Actual take from Albras was $65, $65 and $81 during three-month period ended March 31, 2004, and 2003 and December 31, 2003, respectively.

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

F-13

		development of such resources. Iron ore and manganese deposits already identified and subject to development are specifically excluded from the Mineral Risk Contract.

		Pursuant to the Mineral Risk Contract, we and BNDES each agreed to provide $ 205 million, which represents half of the $ 410 million in expenditures estimated as necessary to complete geological exploration and mineral resource development projects in the region over a period of five years, which had already been extended for an additional period of two years and on April 28, 2004 was extended again for another 5 years. We will oversee these projects and BNDES will advance us half of our costs on a quarterly basis. Under the Mineral Risk Contract, as of March 31, 2004, the remaining contributions towards exploration and development activities totaled US$ 77 million. In the event that either of us wishes to conduct further exploration and development after having spent such $ 205 million, the contract provides that each party may either choose to match the other party’s contributions, or may choose to have its financial interest proportionally diluted. If a party’s participation in the project is diluted to an amount lower than 40% of the amount invested in connection with exploration and development projects, then the Mineral Risk Contract provides that the diluted party will lose all the rights and benefits provided for in the Mineral Risk Contract and any amounts previously contributed to the project.

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

(f)		At the time of our privatization in 1997, we issued shareholder revenue interests known in Brazil as “debentures” to our then-existing shareholders, including the Brazilian Government. The terms of the “debentures”, were set to ensure that our pre-privatization shareholders, including the Brazilian Government, would participate alongside us in potential future financial benefits that we are able to derive from exploiting our mineral resources. On March 26, 2004 as a result of exploiting our mineral resources we declared a distribution of these “debentures” in the amount of $ 2, payable as from April 1, 2004.

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


Balance as of January 31, 2004	81
Increase due to new subsidiaries	—
Accretion expense	2
Revisions to estimated cash flows	—
Cumulative translation adjustment	(1	)

Balance as of March 31, 2004	82

F-14

11		Segment and geographical information

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

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

		Non-ferrous products - comprises the production of non-ferrous minerals.

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

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

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

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

F-15

Consolidated net income and principal assets are reconciled as follows:

Results by segment - before eliminations (Unaudited)

As of and for the three months ended


	March 31, 2004
										Holdings
				Non
	Ferrous			ferrous			Logistics			Aluminum			Others		Eliminations			Consolidated
Gross revenues - Export		1,562			34			19			221			—		(670	)		1,166
Gross revenues - Domestic		287			28			184			48			—		(28	)		519
Cost and expenses		(1,366	)		(53	)		(128	)		(209	)		—		698			(1,058	)
Depreciation, depletion and amortization		(78	)		(6	)		(7	)		(4	)		—		—			(95	)
Pension plan		(3	)		—			—			—			—		—			(3	)

Operating (loss) income		402			3			68			56			—		—			529
Financial income		44			—			4			(18	)		1		(20	)		11
Financial expenses		(116	)		(1	)		(4	)		(8	)		—		20			(109	)
Foreign exchange and monetary gains (losses), net		(32	)		—			(5	)		(3	)		1		—			(39	)
Gain on sale of investments		—			—			—			—			—		—			—
Equity in results of affiliates and joint ventures and change in provision for losses on equity investment		33			—			6			18			33		—			90
Income taxes		(54	)		—			(2	)		3			—		—			(53	)
Minority interests		(14	)		(1	)		—			(9	)		—		—			(24	)

Income from continuing operations		263			1			67			39			35		—			405
Change in accounting pratice for asset retirement obligations (note 4)		—			—			—			—			—		—			—

Net income		263			1			67			39			35		—			405

Sales classified by geographic destination:
Export market
America, except United States		158			—			15			70			—		(103	)		140
United States		107			—			—			25			—		(53	)		79
Europe		659			22			4			99			—		(262	)		522
Middle East/Africa/Oceania		89			—			—			—			—		(26	)		63
Japan		150			8			—			1			—		(65	)		94
China		238			4			—			26			—		(97	)		171
Asia, other than Japan and China		161			—			—			—			—		(64	)		97

		1,562			34			19			221			—		(670	)		1,166
Domestic market		287			28			184			48			—		(28	)		519

		1,849			62			203			269			—		(698	)		1,685

Assets:
Property, plant and equipment, net		4,646			1,060			455			565			1		—			6,727
Additions to Property, plant and equipment		156			71			132			20			—		—			379
Investments in affiliated companies and joint ventures and other investments, net of provision		353			—			51			322			343		—			1,069

Capital employed		4,316			245			404			506			28		—			5,499

[Additional columns below]

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


	March 31, 2003
										Holdings
				Non
	Ferrous			ferrous			Logistics			Aluminum			Others			Eliminations			Consolidated
Gross revenues - Export		1,080			23			21			149			—			(476	)		797
Gross revenues - Domestic		258			24			78			37			—			(41	)		356
Cost and expenses		(1,001	)		(38	)		(61	)		(159	)		(2	)		517			(744	)
Depreciation, depletion and amortization		(36	)		(3	)		(2	)		(2	)		—			—			(43	)
Pension plan		(3	)		—			—			—			—			—			(3	)

Operating (loss) income		298			6			36			25			(2	)		—			363
Financial income		45			1			3			3			1			(25	)		28
Financial expenses		(96	)		(2	)		(1	)		(5	)		(3	)		25			(82	)
Foreign exchange and monetary gains (losses), net		25			5			(3	)		23			—			—			50
Gain on sale of investments		—			—			—			—			—			—			—
Equity in results of affiliates and joint ventures and change in provision for losses on equity investment		34			—			(10	)		48			22			—			94
Income taxes		(66	)		(1	)		(1	)		(2	)		(1	)		—			(71	)
Minority interests		—			(2	)		—			(16	)		—			—			(18	)

Income from continuing operations		240			7			24			76			17			—			364
Change in accounting pratice for asset retirement obligations (note 4)		(10	)		—			—			—			—			—			(10	)

Net income		230			7			24			76			17			—			354

Sales classified by geographic destination:
Export market
America, except United States		116			—			14			31			—			(72	)		89
United States		101			4			—			2			—			(50	)		57
Europe		440			17			4			87			—			(170	)		378
Middle East/Africa/Oceania		51			—			3			—			—			(16	)		38
Japan		111			1			—			23			—			(49	)		86
China		184			1			—			6			—			(84	)		107
Asia, other than Japan and China		77			—			—			—			—			(35	)		42

		1,080			23			21			149			—			(476	)		797
Domestic market		258			24			78			37			—			(41	)		356

		1,338			47			99			186			—			(517	)		1,153

Assets:
Property, plant and equipment, net		2,563			464			162			430			27			—			3,646
Additions to Property, plant and equipment		91			51			32			23			1			—			198
Investments in affiliated companies and joint ventures and other investments, net of provision		423			—			(7	)		247			176			—			839

Capital employed		2,521			138			188			405			32			—			3,284

[Additional columns below]

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


	December 31, 2003
										Holdings
				Non
	Ferrous			ferrous			Logistics			Aluminum			Others			Eliminations			Consolidated
Gross revenues - Export		1,650			36			22			233			—			(732	)		1,209
Gross revenues - Domestic		296			30			156			41			—			(42	)		481
Cost and expenses		(1,549	)		(76	)		(146	)		(216	)		(3	)		774			(1,216	)
Depreciation, depletion and amortization		(60	)		(7	)		(6	)		(5	)		—			—			(78	)
Pension plan		(3	)		—			(1	)		—			—			—			(4	)

Operating (loss) income		334			(17	)		25			53			(3	)		—			392
Financial income		50			—			3			2			—			(37	)		18
Financial expenses		(136	)		—			(4	)		(19	)		—			37			(122	)
Foreign exchange and monetary gains (losses), net		(12	)		1			(2	)		6			(1	)		—			(8	)
Gain on sale of investments		17			—			—			—			—			—			17
Equity in results of affiliates and joint ventures and change in provision for losses on equity investment		23			—			36			24			5			—			88
Income taxes		(60	)		(3	)		(1	)		—			(2	)		—			(66	)
Minority interests		(39	)		1			—			(11	)		—			—			(49	)

Income from continuing operations		177			(18	)		57			55			(1	)		—			270
Change in accounting pratice for asset retirement obligations (note 4)		—			—			—			—			—			—			—

Net income		177			(18	)		57			55			(1	)		—			270

Sales classified by geographic destination:
Export market
America, except United States		147			—			10			45			—			(86	)		116
United States		75			—			—			7			—			(45	)		37
Europe		750			26			10			150			—			(322	)		614
Middle East/Africa/Oceania		88			—			—			—			—			(20	)		68
Japan		165			4			—			—			—			(71	)		98
China		290			5			—			12			—			(117	)		190
Asia, other than Japan and China		135			1			2			19			—			(71	)		86

		1,650			36			22			233			—			(732	)		1,209
Domestic market		296			30			156			41			—			(42	)		481

		1,946			66			178			274			—			(774	)		1,690

Assets:
Property, plant and equipment, net		4,495			1,000			424			564			1			—			6,484
Additions to Property, plant and equipment		318			125			121			30			—			—			594
Investments in affiliated companies and joint ventures and other investments, net of provision		344			—			44			329			317			—			1,034

Capital employed		4,137			266			429			498			20			—			5,350

F-16

Operating income by product — after eliminations (unaudited)

As of and for the three months ended


	March 31, 2004

	Revenues																	Impairment/ Gain on sale
							Value											of property,		Depreciation,
							added			Net		Cost and						plant and		depletion and			Operating
	Export		Domestic		Total		tax			revenues		expenses			Net			equipment		amortization			income
Ferrous
Iron ore		652		174		826		(23	)		803		(402	)		401			—		(53	)		348
Pellets		183		52		235		(8	)		227		(172	)		55			—		(3	)		52
Manganes		6		3		9		(1	)		8		(7	)		1			—		—			1
Ferroalloys		91		31		122		(8	)		114		(86	)		28			—		(4	)		24

		932		260		1,192		(40	)		1,152		(667	)		485			—		(60	)		425
Non ferrous
Gold		—		—		—		—			—		—			—			—		—			—
Potash		—		23		23		(3	)		20		(9	)		11			—		(2	)		9
Kaolin		34		5		39		(2	)		37		(22	)		15			—		(3	)		12

		34		28		62		(5	)		57		(31	)		26			—		(5	)		21
Aluminum
Alumina		98		48		146		(5	)		141		(90	)		51			—		(4	)		47
Aluminum		73		—		73		—			73		(66	)		7			—		—			7
Bauxite		15		—		15		—			15		(13	)		2			—		—			2

		186		48		234		(5	)		229		(169	)		60			—		(4	)		56
Logistics
Railroads		—		133		133		(19	)		114		(51	)		63			—		(23	)		40
Ports		—		38		38		(3	)		35		(21	)		14			—		(3	)		11
Ships		11		9		20		(3	)		17		(27	)		(10	)		—		—			(10	)

		11		180		191		(25	)		166		(99	)		67			—		(26	)		41
Others		3		3		6		—			6		(20	)		(14	)		—		—			(14	)

		1,166		519		1,685		(75	)		1,610		(986	)		624			—		(95	)		529

[Additional columns below]

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


	March 31, 2003

	Revenues																	Impairment/ Gain on sale
							Value											of property,		Depreciation,
							added			Net		Cost and						plant and		depletion and			Operating
	Export		Domestic		Total		tax			revenues		expenses			Net			equipment		amortization			income
Ferrous
Iron ore		421		126		547		(18	)		529		(249	)		280			—		(18	)		262
Pellets		152		47		199		(5	)		194		(163	)		31			—		(3	)		28
Manganes		9		2		11		(1	)		10		(4	)		6			—		—			6
Ferroalloys		47		17		64		(4	)		60		(50	)		10			—		(2	)		8

		629		192		821		(28	)		793		(466	)		327			—		(23	)		304
Non ferrous
Gold		9		—		9		—			9		(8	)		1			—		—			1
Potash		—		21		21		(3	)		18		(9	)		9			—		(1	)		8
Kaolin		13		3		16		—			16		(10	)		6			—		(1	)		5

		22		24		46		(3	)		43		(27	)		16			—		(2	)		14
Aluminum
Alumina		59		34		93		(2	)		91		(71	)		20			—		(2	)		18
Aluminum		70		—		70		—			70		(66	)		4			—		—			4
Bauxite		4		—		4		—			4		(4	)		—			—		—			—

		133		34		167		(2	)		165		(141	)		24			—		(2	)		22
Logistics
Railroads		—		66		66		(7	)		59		(15	)		44			—		(14	)		30
Ports		—		28		28		(1	)		27		(8	)		19			—		(2	)		17
Ships		13		8		21		(2	)		19		(37	)		(18	)		—		—			(18	)

		13		102		115		(10	)		105		(60	)		45			—		(16	)		29
Others		—		4		4		—			4		(10	)		(6	)		—		—			(6	)

		797		356		1,153		(43	)		1,110		(704	)		406			—		(43	)		363

[Additional columns below]

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

As of and for the three months ended


	December 31, 2003

	Revenues																			Impairment/ Gain on sale
								Value												of property,			Depreciation,
								added			Net			Cost and						plant and			depletion and			Operating
	Export			Domestic		Total		tax			revenues			expenses			Net			equipment			amortization			income
Ferrous
Iron ore		675			146		821		(13	)		808			(442	)		366			(10	)		(36	)		320
Pellets		198			56		254		—			254			(179	)		75			—			(2	)		73
Manganes		8			3		11		(2	)		9			(15	)		(6	)		—			(1	)		(7	)
Ferroalloys		62			31		93		(6	)		87			(76	)		11			(17	)		(3	)		(9	)

		943			236		1,179		(21	)		1,158			(712	)		446			(27	)		(42	)		377
Non ferrous
Gold		—			—		—		—			—			—			—			—			—			—
Potash		—			24		24		(3	)		21			(9	)		12			—			(4	)		8
Kaolin		36			5		41		(2	)		39			(27	)		12			(12	)		(3	)		(3	)

		36			29		65		(5	)		60			(36	)		24			(12	)		(7	)		5
Aluminum
Alumina		111			38		149		(1	)		148			(107	)		41			—			(5	)		36
Aluminum		91			—		91		—			91			(88	)		3			—			—			3
Bauxite		12			2		14		(1	)		13			(12	)		1			—			—			1

		214			40		254		(2	)		252			(207	)		45			—			(5	)		40
Logistics
Railroads		—			127		127		(14	)		113			(84	)		29			—			(23	)		6
Ports		—			38		38		(5	)		33			(21	)		12			—			(3	)		9
Ships		18			9		27		—			27			(36	)		(9	)		—			—			(9	)

		18			174		192		(19	)		173			(141	)		32			—			(26	)		6
Others		(2	)		2		—		(5	)		(5	)		(33	)		(38	)		—			2			(36	)

		1,209			481		1,690		(52	)		1,638			(1,129	)		509			(39	)		(78	)		392

F-17

12		Derivative financial instruments

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

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

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


				Interest
				rates
	Gold			(LIBOR)			Currencies			Alumina			Total
Unrealized gains (losses) at January 1, 2004		(32	)		(46	)		5			(18	)		(91	)
Financial settlement		—			3			(2	)		—			1
Unrealized gains (losses) in the period		(5	)		(6	)		(2	)		(18	)		(31	)
Effect of exchange rate changes		—			1			—			—			1

Unrealized gains (losses) at March 31, 2004		(37	)		(48	)		1			(36	)		(120	)

Unrealized gains (losses) at January 1, 2003		(15	)		(60	)		(1	)		3			(73	)
Financial settlement		—			4			—			—			4
Unrealized gains (losses) in the period		5			(8	)		—			—			(3	)
Effect of exchange rate changes		—			(4	)		—			—			(4	)

Unrealized gains (losses) at March 31, 2003		(10	)		(68	)		(1	)		3			(76	)

Unrealized gains (losses) at October 1, 2003		(22	)		(60	)		2			(5	)		(85	)
Financial settlement		3			12			—			—			15
Unrealized gains (losses) in the period		(12	)		2			3			(13	)		(20	)
Effect of exchange rate changes		(1	)		—			—			—			(1	)

Unrealized gains (losses) at December 31, 2003		(32	)		(46	)		5			(18	)		(91	)

		Unrealized gains (losses) in the period are included in our income statement under the following captions:

		Gold – financial expenses; Interest rates – financial expenses; Currencies – financial expenses; Alumina – financial expenses.

		Final maturity dates for the above instruments are as follows:


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

F - 18

(a)		Interest Rate and Exchange Rate Risk

		Interest rate risks mainly relate to that part of the foreign debt borrowed at floating rates. The foreign currency debt is largely subject to fluctuations in the London Interbank Offered Rate - LIBOR. That portion of local currency denominated debt that is subject to floating rates is linked to the Long Term Interest Rate - TJLP, fixed quarterly by the Brazilian Central Bank. We have used derivative instruments to protect ourselves against fluctuations in the LIBOR rate.

		There is an exchange rate risk associated with our foreign currency denominated debt. On the other hand, the majority of our revenues is denominated in, or automatically indexed to, the U.S. dollar, while the majority of our costs is denominated in reais. This provides a natural hedge against any devaluation of the Brazilian real against the U.S. dollar. When events of this nature occur, the immediate negative impact on foreign currency denominated debt is offset over time by the positive effect of devaluation on future cash flows.

		With the floating exchange rate regime in Brazil, we adopt a strategy of monitoring market fluctuations, using derivatives to protect against specific risks from exchange rate variation.

		From time to time we enter into foreign exchange derivative swap transactions seeking to change the characteristics of our real-denominated cash investments to US dollar-indexed instruments. The extent of such transactions depends on our perception of market and currency risk, but is never speculative in nature. All such operations are marked-to-market at each balance sheet date and the effect included in financial income or expense. During the periods presented our use of such instruments was not significant.

(b)		Commodity Price Risk

		We also use derivative instruments to manage exposure to changing gold prices and to ensure an average minimum profit level for future and alumina production. However, they may also have the effect of eliminating potential gains on certain price increases in the spot market. We manage our contract positions actively, and the results are reviewed at least monthly, allowing adjustments to targets and strategy to be made in response to changing market conditions.

		In the case of gold and alumina derivatives, our policy has been to settle all contracts through cash payments or receipts, without physical delivery of product.

13		Subsequents Events

		On April 1, 2004, we obtained a syndicated loan in the amount of $ 300 million. The loan has a term of seven years and bears interest at 6-month LIBOR plus 0.7% per annum.

* * *

F - 19

		Supplemental Financial Statements

		The following unaudited information provides additional details in relation to the balance sheet and financial performance of equity investees as well as certain financial ratios.

		EBITDA – Earnings Before Interest, Income Tax, Depreciation and Amortization

(a)		EBITDA represents operating income plus depreciation, amortization and depletion plus impairment/gain on sale of property, plant and equipment plus dividends received from equity investees.

(b)		EBITDA is not a US 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.

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

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

S - 1

Aluminum Area – Valesul (Additional information - Unaudited)


			2004
			As of and for the three-months ended
Information			March 31			June 30		September 30		December 31		Total
Quantity sold - external market	MT (thousand)			15									15
Quantity sold - internal market	MT (thousand)			10									10

Quantity sold - total	MT (thousand)			25			—		—		—		25

Average sales price - external market		US$		1,676.30									1,676.29
Average sales price - internal market		US$		2,240.26									2,240.26
Average sales price - total		US$		1,903.80									1,903.83
Long-term indebtedness, gross		US$		1									1
Short-term indebtedness, gross		US$		1									1

Total indebtedness, gross		US$		2			—		—		—		2

Stockholders’ equity		US$		92									92

Net operating revenues		US$		44									44
Cost of products		US$		(35	)								(35	)
Other expenses/revenues		US$		(1	)								(1	)
Depreciation, amortization and depletion		US$		1									1

EBITDA		US$		9			—		—		—		9
Depreciation, amortization and depletion		US$		(1	)		—		—		—		(1	)

EBIT		US$		8			—		—		—		8
Net financial result		US$		—									—

Income before income tax and social contribution		US$		8			—		—		—		8
Income tax and social contribution		US$		(2	)								(2	)

Net income		US$		6			—		—		—		6

[Additional columns below]

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


			2003
			As of and for the three-months ended
Information			March 31			June 30			September 30			December 31			Total
Quantity sold - external market	MT (thousand)			9			15			17			17			58
Quantity sold - internal market	MT (thousand)			10			9			9			12			40

Quantity sold - total	MT (thousand)			19			24			26			29			98

Average sales price - external market		US$		1,505.49			1,516.01			1,518.30			1,570.41			1,530.98
Average sales price - internal market		US$		1,933.02			1,970.53			1,974.21			1,957.43			1,958.05
Average sales price - total		US$		1,730.60			1,685.83			1,668.32			1,731.60			1,703.44
Long-term indebtedness, gross		US$		1			1			1			1			1
Short-term indebtedness, gross		US$		1			1			1			1			1

Total indebtedness, gross		US$		2			2			2			2			2

Stockholders’ equity		US$		84			92			96			90			90

Net operating revenues		US$		31			38			41			47			157
Cost of products		US$		(20	)		(30	)		(33	)		(40	)		(123	)
Other expenses/revenues		US$		(2	)		(5	)		(1	)		(2	)		(10	)
Depreciation, amortization and depletion		US$		1			2			1			2			6

EBITDA		US$		10			5			8			7			30
Depreciation, amortization and depletion		US$		(1	)		(2	)		(1	)		(2	)		(6	)

EBIT		US$		9			3			7			5			24
Net financial result		US$		—			—			—			—			—

Income before income tax and social contribution		US$		9			3			7			5			24
Income tax and social contribution		US$		(1	)		(2	)		(2	)		(2	)		(7	)

Net income		US$		8			1			5			3			17

S - 2

Aluminum Area – MRN (Additional information – Unaudited)


			2004
			As of and for the three-months ended
Information			March 31			June 30		September 30		December 31		Total
Quantity sold - external market	MT (thousand)			1,106									1,106
Quantity sold - internal market	MT (thousand)			2,198									2,198

Quantity sold - total	MT (thousand)			3,304			—		—		—		3,304

Average sales price - external market		US$		22.00									22.00
Average sales price - internal market		US$		18.84									18.84
Average sales price - total				19.90									19.90
Long-term indebtedness, gross		US$		40									40
Short-term indebtedness, gross		US$		192									192

Total indebtedness, gross		US$		232			—		—		—		232

Stockholders’ equity		US$		394									394

Net operating revenues		US$		62									62
Cost of products		US$		(29	)								(29	)
Other expenses/revenues		US$		(1	)								(1	)
Depreciation, amortization and depletion		US$		13									13

EBITDA		US$		45			—		—		—		45
Depreciation, amortization and depletion		US$		(13	)		—		—		—		(13	)

EBIT		US$		32			—		—		—		32
Impairment		US$		—									—
Loss on investments accounted for by the equity method		US$		—									—
Net financial result		US$		(2	)								(2	)

Income before income tax and social contribution		US$		30			—		—		—		30
Income tax and social contribution		US$		(4	)								(4	)

Net income		US$		26			—		—		—		26

[Additional columns below]

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


			2003
			As of and for the three-months ended
Information			March 31			June 30			September 30			December 31			Total
Quantity sold - external market	MT (thousand)			711			958			1,324			1,347			4,340
Quantity sold - internal market	MT (thousand)			1,485			2,554			2,725			3,016			9,780

Quantity sold - total	MT (thousand)			2,196			3,512			4,049			4,363			14,120

Average sales price - external market		US$		21.31			21.20			21.27			21.61			21.37
Average sales price - internal market		US$		18.24			18.15			18.21			18.50			18.29
Average sales price - total				19.23			18.98			19.21			19.46			19.23
Long-term indebtedness, gross		US$		69			66			58			49			49
Short-term indebtedness, gross		US$		44			134			145			162			162

Total indebtedness, gross		US$		113			200			203			211			211

Stockholders’ equity		US$		402			417			419			420			420

Net operating revenues		US$		40			64			73			77			254
Cost of products		US$		(25	)		(34	)		(39	)		(41	)		(139	)
Other expenses/revenues		US$		(1	)		(1	)		(1	)		(1	)		(4	)
Depreciation, amortization and depletion		US$		10			10			12			13			45

EBITDA		US$		24			39			45			48			156
Depreciation, amortization and depletion		US$		(10	)		(10	)		(12	)		(13	)		(45	)

EBIT		US$		14			29			33			35			111
Impairment		US$		—			—			—			—			—
Loss on investments accounted for by the equity method		US$		—			—			—			—			—
Net financial result		US$		(2	)		(12	)		(1	)		(2	)		(17	)

Income before income tax and social contribution		US$		12			17			32			33			94
Income tax and social contribution		US$		(2	)		(2	)		(4	)		(5	)		(13	)

Net income		US$		10			15			28			28			81

S - 3

Aluminum Area – Albras (Additional information – Unaudited)


			2004
			As of and for the three-months ended
Information			March 31			June 30		September 30		December 31		Total
Quantity sold - external market	MT (thousand)			94									94
Quantity sold - internal market	MT (thousand)			3									3

Quantity sold - total	MT (thousand)			97			—		—		—		97

Average sales price - external market		US$		1,565.46									1,565.46
Average sales price - internal market		US$		1,611.11									1,611.11
Average sales price - total		US$		1,567.28									1,567.28
Long-term indebtedness, gross		US$		319									319
Short-term indebtedness, gross		US$											—

Total indebtedness, gross		US$		319			—		—		—		319

Stockholders’ equity		US$		226									226

Net operating revenues		US$		153									153
Cost of products		US$		(88	)								(88	)
Other expenses/revenues		US$		(11	)								(11	)
Depreciation, amortization and depletion		US$		4									4

EBITDA		US$		58			—		—		—		58
Depreciation, amortization and depletion		US$		(4	)		—		—		—		(4	)

EBIT		US$		54			—		—		—		54
Impairment		US$											—
Net financial result		US$		(36	)								(36	)

Income (loss) before income tax and social contribution		US$		18			—		—		—		18
Income tax and social contribution		US$		(11	)								(11	)

Net income (loss)		US$		7			—		—		—		7

[Additional columns below]

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


			2003
			As of and for the three-months ended
Information			March 31			June 30			September 30			December 31			Total
Quantity sold - external market	MT (thousand)			99			102			107			110			418
Quantity sold - internal market	MT (thousand)			4			4			4			4			16

Quantity sold - total	MT (thousand)			103			106			111			114			434

Average sales price - external market		US$		1,336.40			1,324.49			1,365.02			1,417.96			1,362.28
Average sales price - internal market		US$		1,376.14			1,365.10			1,398.92			1,455.46			1,398.91
Average sales price - total		US$		1,337.98			1,326.07			1,366.25			1,419.37			1,363.68
Long-term indebtedness, gross		US$		451			400			387			337			337
Short-term indebtedness, gross		US$		—			—			—			—			—

Total indebtedness, gross		US$		451			400			387			337			337

Stockholders’ equity		US$		79			172			197			220			220

Net operating revenues		US$		137			142			152			161			592
Cost of products		US$		(80	)		(91	)		(92	)		(100	)		(363	)
Other expenses/revenues		US$		(4	)		(5	)		(2	)		(9	)		(20	)
Depreciation, amortization and depletion		US$		3			4			4			4			15

EBITDA		US$		56			50			62			56			224
Depreciation, amortization and depletion		US$		(3	)		(4	)		(4	)		(4	)		(15	)

EBIT		US$		53			46			58			52			209
Impairment		US$		—			(3	)		—						(3	)
Net financial result		US$		30			58			(31	)		(23	)		34

Income (loss) before income tax and social contribution		US$		83			101			27			29			240
Income tax and social contribution		US$		(4	)		(24	)		—			(9	)		(37	)

Net income (loss)		US$		79			77			27			20			203

S - 4

Aluminum Area – Alunorte (Additional information - Unaudited) - Consolidated Subsidiary


			2004
			As of and for the three-months ended
Information			March 31			June 30		September 30		December 31		Total
Quantity sold - external market	MT (thousand)			439									439
Quantity sold - internal market	MT (thousand)			231									231

Quantity sold - total	MT (thousand)			670			—		—		—		670

Average sales price - external market		US$		204.29									204.29
Average sales price - internal market		US$		207.14									207.14
Average sales price - total		US$		205.30									205.30
Long-term indebtedness, gross		US$		361									361
Short-term indebtedness, gross		US$		90									90

Total indebtedness, gross		US$		451			—		—		—		451

Stockholders’ equity		US$		278									278

Net operating revenues		US$		133									133
Cost of products		US$		(83	)								(83	)
Other expenses/revenues		US$		(2	)								(2	)
Depreciation, amortization and depletion		US$		4									4

EBITDA		US$		52			—		—		—		52
Depreciation, amortization and depletion		US$		(4	)		—		—		—		(4	)

EBIT		US$		48			—		—		—		48
Non-operating result		US$											—
Net financial result		US$		(29	)								(29	)

Income (loss) before income tax and social contribution		US$		19			—		—		—		19
Income tax and social contribution		US$		2									2

Net income (loss)		US$		21			—		—		—		21

[Additional columns below]

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


			2003
			As of and for the three-months ended
Information			March 31			June 30			September 30			December 31			Total
Quantity sold - external market	MT (thousand)			289			303			395			410			1,397
Quantity sold - internal market	MT (thousand)			201			234			236			207			878

Quantity sold - total	MT (thousand)			490			537			631			617			2,275

Average sales price - external market		US$		170.93			172.57			190.01			182.59			180.10
Average sales price - internal market		US$		173.60			175.13			178.71			184.00			177.83
Average sales price - total		US$		172.03			173.68			185.78			183.07			179.23
Long-term indebtedness, gross		US$		482			494			479			490			490
Short-term indebtedness, gross		US$		—			4			8			—			—

Total indebtedness, gross		US$		482			498			487			490			490

Stockholders’ equity		US$		91			170			201			224			224

Net operating revenues		US$		84			91			116			114			405
Cost of products		US$		(64	)		(76	)		(79	)		(81	)		(300	)
Other expenses/revenues		US$		—			(1	)		(2	)		—			(3	)
Depreciation, amortization and depletion		US$		3			3			4			4			14

EBITDA		US$		23			17			39			37			116
Depreciation, amortization and depletion		US$		(3	)		(3	)		(4	)		(4	)		(14	)

EBIT		US$		20			14			35			33			102
Non-operating result		US$		—			—			—			—			—
Net financial result		US$		20			66			(23	)		(13	)		50

Income (loss) before income tax and social contribution		US$		40			80			12			20			152
Income tax and social contribution		US$		(4	)		(20	)		(1	)		—			(25	)

Net income (loss)		US$		36			60			11			20			127

S - 5

Pelletizing Affiliates – Kobrasco (Additional information - Unaudited)


			2004
			As of and for the three-months ended
Information			March 31			June 30		September 30		December 31		Total
Quantity sold - external market	MT (thousand)			617									617
Quantity sold - internal market	MT (thousand)			623									623

Quantity sold - total	MT (thousand)			1,240			—		—		—		1,240

Average sales price - external market		US$		34.27									34.27
Average sales price - internal market		US$		33.26									33.26
Average sales price - total		US$		33.76									33.76
Long-term indebtedness, gross		US$		97									97

Total indebtedness, gross		US$		97			—		—		—		97

Stockholders’ equity		US$		4									4

Net operating revenues		US$		42									42
Cost of products		US$		(37	)								(37	)
Other expenses/revenues		US$		1									1
Depreciation, amortization and depletion		US$		1									1

EBITDA		US$		7			—		—		—		7
Depreciation, amortization and depletion		US$		(1	)		—		—		—		(1	)

EBIT		US$		6			—		—		—		6
Impairment		US$											—
Net financial result		US$		(1	)								(1	)

Income (loss) before income tax and social contribution		US$		5			—		—		—		5
Income tax and social contribution		US$		(2	)								(2	)

Net income (loss)		US$		3			—		—		—		3

[Additional columns below]

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


			2003
			As of and for the three-months ended
Information			March 31			June 30			September 30			December 31			Total
Quantity sold - external market	MT (thousand)			453			667			800			722			2,642
Quantity sold - internal market	MT (thousand)			681			461			200			360			1,702

Quantity sold - total	MT (thousand)			1,134			1,128			1,000			1,082			4,344

Average sales price - external market		US$		29.89			29.98			33.57			32.04			31.61
Average sales price - internal market		US$		30.72			30.90			38.68			33.33			32.26
Average sales price - total		US$		30.39			30.35			34.59			32.47			31.86
Long-term indebtedness, gross		US$		124			102			102			96			96

Total indebtedness, gross		US$		124			102			102			96			96

Stockholders’ equity		US$		(28	)		(20	)		(18	)		1			1

Net operating revenues		US$		34			34			35			34			137
Cost of products		US$		(27	)		(30	)		(28	)		(32	)		(117	)
Other expenses/revenues		US$		(2	)		(2	)		(1	)		4			(1	)
Depreciation, amortization and depletion		US$		1			—			1			1			3

EBITDA		US$		6			2			7			7			22
Depreciation, amortization and depletion		US$		(1	)		—			(1	)		(1	)		(3	)

EBIT		US$		5			2			6			6			19
Impairment		US$		—			—			—			24			24
Net financial result		US$		5			16			(2	)		(17	)		2

Income (loss) before income tax and social contribution		US$		10			18			4			13			45
Income tax and social contribution		US$		(4	)		(7	)		(1	)		4			(8	)

Net income (loss)		US$		6			11			3			17			37

S - 6

Pelletizing Affiliates – Hispanobras (Additional information - Unaudited)


			2004
			As of and for the three-months ended
Information			March 31			June 30		September 30		December 31		Total
Quantity sold - external market	MT (thousand)			425									425
Quantity sold - internal market	MT (thousand)			460									460

Quantity sold - total	MT (thousand)			885			—		—		—		885

Average sales price - external market		US$		32.48									32.48
Average sales price - internal market		US$		31.18									31.18
Average sales price - total		US$		31.83									31.83

Stockholders’ equity		US$		33									33

Net operating revenues		US$		28									28
Cost of products		US$		(27	)								(27	)
Other expenses/revenues		US$		1									1
Depreciation, amortization and depletion		US$		1									1

EBITDA		US$		3			—		—		—		3
Depreciation, amortization and depletion		US$		(1	)		—		—		—		(1	)

EBIT		US$		2			—		—		—		2
Non-operating result		US$		—									—
Impairment				—									—
Net financial result		US$		—									—

Income (loss) before income tax and social contribution		US$		2			—		—		—		2
Income tax and social contribution		US$		(1	)								(1	)

Net income		US$		1			—		—		—		1

[Additional columns below]

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


			2003
			As of and for the three-months ended
Information			March 31			June 30			September 30			December 31			Total
Quantity sold - external market	MT (thousand)			268			625			94			386			1,373
Quantity sold - internal market	MT (thousand)			637			265			730			580			2,212

Quantity sold - total	MT (thousand)			905			890			824			966			3,585

Average sales price - external market		US$		29.54			33.75			32.62			33.06			32.66
Average sales price - internal market		US$		29.95			38.90			32.56			33.13			32.72
Average sales price - total		US$		29.75			36.33			32.59			33.10			32.94

Stockholders’ equity		US$		27			34			34			32			32

Net operating revenues		US$		27			32			27			31			117
Cost of products		US$		(23	)		(28	)		(21	)		(32	)		(104	)
Other expenses/revenues		US$		(1	)		2			(5	)		(1	)		(5	)
Depreciation, amortization and depletion		US$		1			—			1			—			2

EBITDA		US$		4			6			2			(2	)		10
Depreciation, amortization and depletion		US$		(1	)		—			(1	)		—			(2	)

EBIT		US$		3			6			1			(2	)		8
Non-operating result		US$		—			—			—			—			—
Impairment				—			—			1			—			1
Net financial result		US$		(1	)		(2	)		(1	)		1			(3	)

Income (loss) before income tax and social contribution		US$		2			4			1			(1	)		6
Income tax and social contribution		US$		(1	)		—			(1	)		1			(1	)

Net income		US$		1			4			—			—			5

S - 7

Pelletizing Affiliates – Itabrasco (Additional information - Unaudited)


			2004
			As of and for the three-months ended
Information			March 31			June 30		September 30		December 31		Total
Quantity sold - external market	MT (thousand)			762									762
Quantity sold - internal market	MT (thousand)												—

Quantity sold - total	MT (thousand)			762			—		—		—		762

Average sales price - external market		US$		32.84									32.84
Average sales price - internal market		US$		0.00									0.00
Average sales price - total		US$		32.84									32.84
Long-term indebtedness, gross		US$		1									1

Total indebtedness, gross		US$		1			—		—		—		1

Stockholders’ equity		US$		23									23

Net operating revenues		US$		25									25
Cost of products		US$		(24	)								(24	)
Other expenses/revenues		US$		—									—
Depreciation, amortization and depletion		US$		—									—

EBITDA		US$		1			—		—		—		1
Depreciation, amortization and depletion		US$		—			—		—		—		—

EBIT		US$		1			—		—		—		1
Net financial result		US$		—									—

Income before income tax and social contribution		US$		1			—		—		—		1
Income tax and social contribution		US$		—									—

Net income		US$		1			—		—		—		1

[Additional columns below]

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


			2003
			As of and for the three-months ended
Information			March 31			June 30			September 30			December 31			Total
Quantity sold - external market	MT (thousand)			306			778			838			700			2,622
Quantity sold - internal market	MT (thousand)			507			65			—			81			653

Quantity sold - total	MT (thousand)			813			843			838			781			3,275

Average sales price - external market		US$		29.97			33.53			32.96			32.97			32.78
Average sales price - internal market		US$		29.20			55.87			—			33.20			32.35
Average sales price - total		US$		29.54			35.25			32.96			33.00			32.71
Long-term indebtedness, gross		US$		5			—			1			1			1

Total indebtedness, gross		US$		5			—			1			1			1

Stockholders’ equity		US$		20			23			24			22			22

Net operating revenues		US$		25			31			27			25			108
Cost of products		US$		(21	)		(26	)		(25	)		(24	)		(96	)
Other expenses/revenues		US$		(2	)		2			(1	)		(2	)		(3	)
Depreciation, amortization and depletion		US$		—			—			—			—			—

EBITDA		US$		2			7			1			(1	)		9
Depreciation, amortization and depletion		US$		—			—			—			—			—

EBIT		US$		2			7			1			(1	)		9
Net financial result		US$		(1	)		(2	)		1			1			(1	)

Income before income tax and social contribution		US$		1			5			2			—			8
Income tax and social contribution		US$		(1	)		(2	)		—			—			(3	)

Net income		US$		—			3			2			—			5

S - 8

Pelletizing Affiliates – Nibrasco (Additional information - Unaudited)


			2004
			As of and for the three-months ended
Information			March 31			June 30		September 30		December 31		Total
Quantity sold - external market	MT (thousand)			563									563
Quantity sold - internal market - CVRD	MT (thousand)			1,327									1,327
Quantity sold - internal market - Others	MT (thousand)			33									33

Quantity sold - total	MT (thousand)			1,923			—		—		—		1,923

Average sales price - external market		US$		31.45									31.45
Average sales price - internal market		US$		31.51									31.50
Average sales price - total		US$		31.49									31.48
Long-term indebtedness, gross		US$		—									—
Short-term indebtedness, gross		US$		1									1

Total indebtedness, gross		US$		1			—		—		—		1

Stockholders’ equity		US$		40									40

Net operating revenues		US$		65									65
Cost of products		US$		(59	)								(59	)
Other expenses/revenues		US$		2									2
Depreciation, amortization and depletion		US$		1									1

EBITDA		US$		9			—		—		—		9
Depreciation, amortization and depletion		US$		(1	)		—		—		—		(1	)

EBIT		US$		8			—		—		—		8
Impairment		US$		—									—
Net financial result		US$		—									—

Income (loss) before income tax and social contribution		US$		8			—		—		—		8
Income tax and social contribution		US$		(3	)								(3	)

Net income (loss)		US$		5			—		—		—		5

[Additional columns below]

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


			2003
			As of and for the three-months ended
Information			March 31			June 30			September 30			December 31			Total
Quantity sold - external market	MT (thousand)			469			513			509			761			2,252
Quantity sold - internal market - CVRD	MT (thousand)			1,303			1,180			1,085			874			4,442
Quantity sold - internal market - Others	MT (thousand)			28			26			32			33			119

Quantity sold - total	MT (thousand)			1,800			1,719			1,626			1,668			6,813

Average sales price - external market		US$		28.76			27.69			32.96			32.41			30.70
Average sales price - internal market		US$		27.38			28.23			34.18			30.44			29.87
Average sales price - total		US$		27.75			28.07			33.79			31.35			30.14
Long-term indebtedness, gross		US$		1			—			—			—			—
Short-term indebtedness, gross		US$		2			2			2			1			1

Total indebtedness, gross		US$		3			2			2			1			1

Stockholders’ equity		US$		25			28			33			35			35

Net operating revenues		US$		50			50			60			57			217
Cost of products		US$		(48	)		(51	)		(53	)		(54	)		(206	)
Other expenses/revenues		US$		—			—			(1	)		—			(1	)
Depreciation, amortization and depletion		US$		1			1			1			1			4

EBITDA		US$		3			—			7			4			14
Depreciation, amortization and depletion		US$		(1	)		(1	)		(1	)		(1	)		(4	)

EBIT		US$		2			(1	)		6			3			10
Impairment		US$		—			—			1			—			1
Net financial result		US$		—			—			(1	)		(1	)		(2	)

Income (loss) before income tax and social contribution		US$		2			(1	)		6			2			9
Income tax and social contribution		US$		(1	)		—			—			(1	)		(2	)

Net income (loss)		US$		1			(1	)		6			1			7

S - 9

Pelletizing Affiliates – Samarco (Additional information - Unaudited)


		2004
		As of and for the three-months ended
Information		March 31			June 30		September 30		December 31		Total
Quantity sold - Pellets	MT(thousand)		3,462									3,462
Quantity sold - Iron ore	MT(thousand)		497									497

Quantity sold - total	MT(thousand)		3,959			—		—		—		3,959

Average sales price - Pellets	US$		39.31									39.31
Average sales price - Iron ore	US$		16.88									16.88
Average sales price - total	US$		36.49									36.49
Long-term indebtedness, gross	US$		21									21
Short-term indebtedness, gross	US$		174									174

Total indebtedness, gross	US$		195			—		—		—		195

Stockholders’ equity	US$		379									379

Net operating revenues	US$		129									129
Cost of products	US$		(59	)								(59	)
Other expenses/revenues	US$		(13	)								(13	)
Depreciation, amortization and depletion	US$		6									6

EBITDA	US$		63			—		—		—		63
Depreciation, amortization and depletion	US$		(6	)		—		—		—		(6	)

EBIT	US$		57			—		—		—		57
Impairment			—									—
Gain on investments accounted for by the equity method	US$		4									4
Net financial result	US$		—									—

Income (loss) before income tax and social contribution	US$		61			—		—		—		61
Income tax and social contribution	US$		(10	)								(10	)

Net income (loss)	US$		51			—		—		—		51

[Additional columns below]

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


		2003
		As of and for the three-months ended
Information		March 31			June 30			September 30			December 31			Total
Quantity sold - Pellets	MT(thousand)		3,338			3,339			3,359			3,454			13,490
Quantity sold - Iron ore	MT(thousand)		650			938			569			319			2,476

Quantity sold - total	MT(thousand)		3,988			4,277			3,928			3,773			15,966

Average sales price - Pellets	US$		29.78			35.03			35.47			35.85			34.05
Average sales price - Iron ore	US$		16.39			16.57			17.56			14.36			16.47
Average sales price - total	US$		27.59			30.98			32.88			34.03			31.32
Long-term indebtedness, gross	US$		56			50			38			25			25
Short-term indebtedness, gross	US$		123			138			136			167			167

Total indebtedness, gross	US$		179			188			174			192			192

Stockholders’ equity	US$		336			395			392			369			369

Net operating revenues	US$		103			125			119			118			465
Cost of products	US$		(48	)		(59	)		(58	)		(57	)		(222	)
Other expenses/revenues	US$		(4	)		(15	)		(13	)		(12	)		(44	)
Depreciation, amortization and depletion	US$		5			6			6			7			24

EBITDA	US$		56			57			54			56			223
Depreciation, amortization and depletion	US$		(5	)		(6	)		(6	)		(7	)		(24	)

EBIT	US$		51			51			48			49			199
Impairment			—			(12	)		—			(25	)		(37	)
Gain on investments accounted for by the equity method	US$		(1	)		6			(2	)		3			6
Net financial result	US$		—			8			(5	)		(1	)		2

Income (loss) before income tax and social contribution	US$		50			53			41			26			170
Income tax and social contribution	US$		(12	)		(7	)		(8	)		(3	)		(30	)

Net income (loss)	US$		38			46			33			23			140

S - 10

Pelletizing Affiliates – GIIC (Additional information - Unaudited)


		2004
		As of and for the three-months ended
Information		March 31			June 30		September 30		December 31		Total
Quantity sold - external market	MT (thousand)		906									906

Quantity sold - total	MT (thousand)		906			—		—		—		906

Average sales price - external market	US$		52.68									52.68
Average sales price - total	US$		52.68									52.68
Long-term indebtedness, gross	US$		20									20

Total indebtedness, gross	US$		20			—		—		—		20

Stockholders’ equity	US$		76									76

Net operating revenues	US$		48									48
Cost of products	US$		(36	)								(36	)
Other expenses/revenues	US$		(4	)								(4	)
Depreciation, amortization and depletion	US$		1									1

EBITDA	US$		9			—		—		—		9
Depreciation, amortization and depletion	US$		(1	)		—		—		—		(1	)

EBIT	US$		8			—		—		—		8
Net financial result	US$		—									—

Net income	US$		8			—		—		—		8

[Additional columns below]

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


		2003
		As of and for the three-months ended
Information		*March 31()**			June 30			September 30			December 31			Total
Quantity sold - external market	MT (thousand)		772			1,178			900			1,089			3,939

Quantity sold - total	MT (thousand)		772			1,178			900			1,089			3,939

Average sales price - external market	US$		41.00			43.30			41.18			43.11			42.31
Average sales price - total	US$		41.00			43.30			41.18			43.11			42.31
Long-term indebtedness, gross	US$		35			35			30			25			25

Total indebtedness, gross	US$		35			35			30			25			25

Stockholders’ equity	US$		67			75			75			80			80

Net operating revenues	US$		32			51			43			49			175
Cost of products	US$		(25	)		(39	)		(33	)		(38	)		(135	)
Other expenses/revenues	US$		(3	)		(2	)		(6	)		(6	)		(17	)
Depreciation, amortization and depletion	US$		1			—			1			1			3

EBITDA	US$		5			10			5			6			26
Depreciation, amortization and depletion	US$		(1	)		—			(1	)		(1	)		(3	)

EBIT	US$		4			10			4			5			23
Net financial result	US$		—			—			—			1			1

Net income	US$		4			10			4			6			2 4

(*) Refers to the statements up to February 2003.

S - 11

Manganese and Ferroalloys Area – RDM (Additional information - Unaudited) - Consolidated Subsidiary


		2004
		As of and for the three-months ended
Information		March 31			June 30		September 30		December 31		Total
Quantity sold - external market - Ferroalloys	MT (thousand)		37									37
Quantity sold - internal market - Ferroalloys	MT (thousand)		45									45

Quantity sold - total	MT (thousand)		82			—		—		—		82

Quantity sold - external market - Manganese	MT (thousand)		213									213
Quantity sold - internal market - Manganese	MT (thousand)		72									72

Quantity sold - total	MT (thousand)		285			—		—		—		285

Average sales price - external market - Ferroalloys	US$		713.01									713.01
Average sales price - internal market - Ferroalloys	US$		700.76									700.76
Average sales price - total	US$		706.34									706.34
Average sales price - external market - Manganese	US$		44.98									44.98
Average sales price - internal market - Manganese	US$		45.15									45.15
Average sales price - total	US$		45.02									45.02
Long-term indebtedness, gross	US$		12									12
Short-term indebtedness, gross	US$		40									40

Total indebtedness, gross	US$		52			—		—		—		52

Stockholders’ equity	US$		218									218

Net operating revenues	US$		62									62
Cost of products	US$		(38	)								(38	)
Other expenses/revenues	US$		(10	)								(10	)
Depreciation, amortization and depletion	US$		2									2

EBITDA	US$		16			—		—		—		16
Depreciation, amortization and depletion	US$		(2	)		—		—		—		(2	)

EBIT	US$		14			—		—		—		14
Impairment	US$		—									—
Gain on sale of investments	US$		—									—
Net financial result	US$		1									1
Minority interest	US$		—									—

Income before income tax and social contribution	US$		15			—		—		—		15
Income tax and social contribution	US$		(2	)								(2	)

Net income	US$		13			—		—		—		13

[Additional columns below]

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


		2003
		As of and for the three-months ended
Information		March 31			June 30			September 30			December 31			Total
Quantity sold - external market - Ferroalloys	MT (thousand)		30			40			47			51			168
Quantity sold - internal market - Ferroalloys	MT (thousand)		37			38			43			46			164

Quantity sold - total	MT (thousand)		67			78			90			97			332

Quantity sold - external market - Manganese	MT (thousand)		147			306			261			294			1,008
Quantity sold - internal market - Manganese	MT (thousand)		94			76			83			76			329

Quantity sold - total	MT (thousand)		241			382			344			370			1,337

Average sales price - external market - Ferroalloys	US$		573.88			549.79			534.97			621.32			571.66
Average sales price - internal market - Ferroalloys	US$		505.02			664.75			607.37			623.79			602.18
Average sales price - total	US$		536.68			606.47			569.57			622.52			587.07
Average sales price - external market - Manganese	US$		46.71			42.17			43.96			43.14			43.58
Average sales price - internal market - Manganese	US$		36.35			46.00			50.48			43.29			43.75
Average sales price - total	US$		42.65			42.93			45.52			43.17			43.61
Long-term indebtedness, gross	US$		20			39			39			19			19
Short-term indebtedness, gross	US$		37			25			18			42			42

Total indebtedness, gross	US$		57			64			57			61			61

Stockholders’ equity	US$		89			112			119			207			207

Net operating revenues	US$		41			58			59			69			227
Cost of products	US$		(24	)		(31	)		(38	)		(47	)		(140	)
Other expenses/revenues	US$		(7	)		(10	)		(8	)		(14	)		(39	)
Depreciation, amortization and depletion	US$		2			2			2			1			7

EBITDA	US$		12			19			15			9			55
Depreciation, amortization and depletion	US$		(2	)		(2	)		(2	)		(1	)		(7	)

EBIT	US$		10			17			13			8			48
Impairment	US$		—			—			—			(17	)		(17	)
Gain on sale of investments	US$		—			—			—			61			61
Net financial result	US$		(3	)		(8	)		(1	)		(2	)		(14	)
Minority interest	US$		—			—			—			(3	)		(3	)

Income before income tax and social contribution	US$		7			9			12			47			75
Income tax and social contribution	US$		(2	)		(1	)		(2	)		11			6

Net income	US$		5			8			10			58			81

S - 12

Manganese and Ferroalloys Area – Urucum (Additional information - Unaudited) - Consolidated Subsidiary


		2004
		As of and for the three-months ended
Information		March 31			June 30		September 30		December 31		Total
Quantity sold - external market - Iron ore	MT (thousand)		127									127
Quantity sold - internal market - Iron ore	MT (thousand)											—

Quantity sold - total	MT (thousand)		127			—		—		—		127

Quantity sold - external market - Manganese	MT (thousand)		22									22
Quantity sold - internal market - Manganese	MT (thousand)		50									50

Quantity sold - total	MT (thousand)		72			—		—		—		72

Quantity sold - external market - Ferroalloys	MT (thousand)		4									4
Quantity sold - internal market - Ferroalloys	MT (thousand)		1									1

Quantity sold - total	MT (thousand)		5			—		—		—		5

Average sales price - external market - Iron ore	US$		15.05									15.05
Average sales price - internal market - Iron ore	US$		—									—
Average sales price - total	US$		15.05									15.05
Average sales price - external market - Manganese	US$		49.84									49.84
Average sales price - internal market - Manganese	US$		44.19									44.19
Average sales price - total	US$		45.92									45.92
Average sales price - external market - Ferroalloys	US$		564.53									564.53
Average sales price - internal market - Ferroalloys	US$		394.48									394.48
Average sales price - total	US$		546.44									546.44
Long-term indebtedness, gross	US$		—									—
Short-term indebtedness, gross	US$		4									4

Total indebtedness, gross	US$		4			—		—		—		4

Stockholders’ equity	US$		15									15

Net operating revenues	US$		7									7
Cost of products	US$		(3	)								(3	)
Other expenses/revenues	US$		(2	)								(2	)
Depreciation, amortization and depletion	US$		—									—

EBITDA	US$		2			—		—		—		2
Depreciation, amortization and depletion	US$		—			—		—		—		—

EBIT	US$		2			—		—		—		2
Net financial result	US$		—									—

Income before income tax and social contribution	US$		2			—		—		—		2
Income tax and social contribution	US$		(1	)								(1	)

Net income	US$		1			—		—		—		1

[Additional columns below]

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


		2003
		As of and for the three-months ended
Information		March 31			June 30			September 30			December 31			Total
Quantity sold - external market - Iron ore	MT (thousand)		238			174			214			261			887
Quantity sold - internal market - Iron ore	MT (thousand)		7			—			3			—			10

Quantity sold - total	MT (thousand)		245			174			217			261			897

Quantity sold - external market - Manganese	MT (thousand)		18			43			52			30			143
Quantity sold - internal market - Manganese	MT (thousand)		46			66			55			82			249

Quantity sold - total	MT (thousand)		64			109			107			112			392

Quantity sold - external market - Ferroalloys	MT (thousand)		5			3			8			4			20
Quantity sold - internal market - Ferroalloys	MT (thousand)		—			—			—			1			1

Quantity sold - total	MT (thousand)		5			3			8			5			21

Average sales price - external market - Iron ore	US$		13.70			15.03			15.86			14.99			14.86
Average sales price - internal market - Iron ore	US$		3.26			—			2.21			—			2.95
Average sales price - total	US$		13.43			15.03			15.67			14.99			14.74
Average sales price - external market - Manganese	US$		36.35			35.81			38.95			37.07			37.28
Average sales price - internal market - Manganese	US$		32.91			38.10			42.22			42.84			39.61
Average sales price - total	US$		33.87			37.18			40.66			41.30			38.77
Average sales price - external market - Ferroalloys	US$		509.35			503.55			483.38			483.45			492.91
Average sales price - internal market - Ferroalloys	US$		—			—			—			388.80			388.80
Average sales price - total	US$		509.35			503.55			483.38			470.78			489.44
Long-term indebtedness, gross	US$		—			—			—			—			—
Short-term indebtedness, gross	US$		—			5			5			8			8

Total indebtedness, gross	US$		—			5			5			8			8

Stockholders’ equity	US$		17			10			12			14			14

Net operating revenues	US$		8			8			11			9			36
Cost of products	US$		(3	)		(3	)		(6	)		(5	)		(17	)
Other expenses/revenues	US$		(2	)		—			(2	)		(2	)		(6	)
Depreciation, amortization and depletion	US$		—			—			—			—			—

EBITDA	US$		3			5			3			2			13
Depreciation, amortization and depletion	US$		—			—			—			—			—

EBIT	US$		3			5			3			2			13
Net financial result	US$		—			(2	)		—			—			(2	)

Income before income tax and social contribution	US$		3			3			3			2			11
Income tax and social contribution	US$		(1	)		—			(2	)		—			(3	)

Net income	US$		2			3			1			2			8

S - 13

Manganese and Ferroalloys Area – RDME (Additional information - Unaudited) - Consolidated Subsidiary


		2004
		As of and for the three-months ended
Information		March 31			June 30		September 30		December 31		Total
Quantity sold - external market - Sinter	MT (thousand)		66									66

Quantity sold - total	MT (thousand)		66			—		—		—		66

Quantity sold - external market - Manganese	MT (thousand)		55									55

Quantity sold - total	MT (thousand)		55			—		—		—		55

Quantity sold - external market - Ferroalloys	MT (thousand)		64									64

Quantity sold - total	MT (thousand)		64			—		—		—		64

Average sales price - external market - Sinter	US$		103.70									103.70
Average sales price - total	US$		103.70									103.70
Average sales price - external market - Manganese	US$		73.22									73.22
Average sales price - total	US$		73.22									73.22
Average sales price - external market - Ferroalloys	US$		588.12									588.12
Average sales price - total	US$		588.12									588.12
Long-term indebtedness, gross	US$		3									3
Short-term indebtedness, gross	US$		—									—

Total indebtedness, gross	US$		3			—		—		—		3

Stockholders’ equity	US$		67									67

Net operating revenues	US$		51									51
Cost of products	US$		(47	)								(47	)
Other expenses/revenues	US$		(1	)								(1	)
Depreciation, amortization and depletion	US$		1									1

EBITDA	US$		4			—		—		—		4
Depreciation, amortization and depletion	US$		(1	)		—		—		—		(1	)

EBIT	US$		3			—		—		—		3
Impairment	US$		—									—
Net financial result	US$		—									—

Income before income tax and social contribution	US$		3			—		—		—		3
Income tax and social contribution	US$		—									—

Net income	US$		3			—		—		—		3

[Additional columns below]

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


		2003
		As of and for the three-months ended
Information		March 31			June 30			September 30			December 31			Total
Quantity sold - external market - Sinter	MT (thousand)		34			82			23			30			169

Quantity sold - total	MT (thousand)		34			82			23			30			169

Quantity sold - external market - Manganese	MT (thousand)		31			64			51			51			197

Quantity sold - total	MT (thousand)		31			64			51			51			197

Quantity sold - external market - Ferroalloys	MT (thousand)		43			36			40			53			172

Quantity sold - total	MT (thousand)		43			36			40			53			172

Average sales price - external market - Sinter	US$		114.14			109.89			107.72			101.00			108.87
Average sales price - total	US$		114.14			109.89			107.72			101.00			108.87
Average sales price - external market - Manganese	US$		105.84			75.29			83.72			81.70			83.94
Average sales price - total	US$		105.84			75.29			83.72			81.70			83.94
Average sales price - external market - Ferroalloys	US$		609.69			583.89			546.69			572.76			578.26
Average sales price - total	US$		609.69			583.89			546.69			572.76			578.26
Long-term indebtedness, gross	US$		2			2			5			4			4
Short-term indebtedness, gross	US$		—			—			—			—			—

Total indebtedness, gross	US$		2			2			5			4			4

Stockholders’ equity	US$		59			60			63			65			65

Net operating revenues	US$		36			35			30			40			141
Cost of products	US$		(32	)		(32	)		(27	)		(36	)		(127	)
Other expenses/revenues	US$		(1	)		(1	)		(1	)		(2	)		(5	)
Depreciation, amortization and depletion	US$		1			1			1			1			4

EBITDA	US$		4			3			3			3			13
Depreciation, amortization and depletion	US$		(1	)		(1	)		(1	)		(1	)		(4	)

EBIT	US$		3			2			2			2			9
Impairment	US$		—			—			—			—			—
Net financial result	US$		—			—			—			—			—

Income before income tax and social contribution	US$		3			2			2			2			9
Income tax and social contribution	US$		—			—			—			—			—

Net income	US$		3			2			2			2			9

S - 14

Steel Area – CST (Additional information - Unaudited)


		2004
		As of and for the three-months ended
Information		March 31			June 30		September 30		December 31		Total
Quantity sold - external market	MT (thousand)		809									809
Quantity sold - internal market	MT (thousand)		340									340

Quantity sold - total	MT (thousand)		1,149			—		—		—		1,149

Average sales price - external market	US$		262.65									262.65
Average sales price - internal market	US$		304.12									304.12
Average sales price - total	US$		274.92									274.92
Long-term indebtedness, gross	US$		585									585
Short-term indebtedness, gross	US$		131									131

Total indebtedness, gross	US$		716			—		—		—		716

*Stockholders’ equity ()**	US$		2,468									2,468

Net operating revenues	US$		351									351
Cost of products	US$		(215	)								(215	)
Other expenses/revenues	US$		(45	)								(45	)
Depreciation, amortization and depletion	US$		47									47

EBITDA	US$		138			—		—		—		138
Depreciation, amortization and depletion	US$		(47	)		—		—		—		(47	)

EBIT	US$		91			—		—		—		91
Result of equity investments	US$		(1	)								(1	)
Impairment	US$		—									—
Net financial result	US$		(13	)								(13	)

Income (loss) before income tax and social contribution	US$		77			—		—		—		77
Income tax and social contribution	US$		(15	)								(15	)

Net income (loss)	US$		62			—		—		—		62

[Additional columns below]

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


		2003
		As of and for the three-months ended
Information		March 31			June 30			September 30			December 31			Total
Quantity sold - external market	MT (thousand)		1,013			964			902			802			3,681
Quantity sold - internal market	MT (thousand)		2			1			2			2			7

Quantity sold - total	MT (thousand)		1,015			965			904			804			3,688

Average sales price - external market	US$		229.78			238.69			244.16			235.70			236.93
Average sales price - internal market	US$		219.12			255.89			253.93			256.56			245.02
Average sales price - total	US$		229.76			238.71			244.18			235.75			236.94
Long-term indebtedness, gross	US$		619			628			635			633			633
Short-term indebtedness, gross	US$		168			148			150			143			143

Total indebtedness, gross	US$		787			776			785			776			776

*Stockholders’ equity ()**	US$		2,410			2,380			2,382			2,407			2,407

Net operating revenues	US$		299			331			332			322			1,284
Cost of products	US$		(197	)		(213	)		(215	)		(230	)		(855	)
Other expenses/revenues	US$		(30	)		(42	)		(36	)		(54	)		(162	)
Depreciation, amortization and depletion	US$		44			49			46			43			182

EBITDA	US$		116			125			127			81			449
Depreciation, amortization and depletion	US$		(44	)		(49	)		(46	)		(43	)		(182	)

EBIT	US$		72			76			81			38			267
Result of equity investments	US$		(5	)		(4	)		(3	)		6			(6	)
Impairment	US$		—			—			—			—			—
Net financial result	US$		(12	)		(19	)		(2	)		(17	)		(50	)

Income (loss) before income tax and social contribution	US$		55			53			76			27			211
Income tax and social contribution	US$		(34	)		(26	)		(23	)		41			(42	)

Net income (loss)	US$		21			27			53			68			169

(*) The amount of the stockholders’ equity differs from that of the note 8 due to the write-down at cost.

S - 15

Steel Area – CSI (Additional information - Unaudited)


		2004
		As of and for the three-months ended
Information		March 31			June 30		September 30		December 31		Total
Quantity sold - external market	MT (thousand)		566									566

Quantity sold - total	MT (thousand)		566			—		—		—		566

Average sales price - external market	US$		419.00									419.00
Average sales price - total	US$		419.00									419.00

Stockholders’ equity	US$		205									205

Net operating revenues	US$		233									233
Cost of products / Other expenses	US$		(226	)								(226	)
Other expenses/revenues	US$		—									—
Depreciation, amortization and depletion	US$		7									7

EBITDA	US$		14			—		—		—		14
Depreciation, amortization and depletion	US$		(7	)		—		—		—		(7	)

EBIT	US$		7			—		—		—		7
Net financial result	US$		(5	)								(5	)
Gain on investments accounted for by the equity method	US$		(2	)								(2	)

Income (loss) before income tax and social contribution	US$		—			—		—		—		—
Income tax and social contribution	US$		(1	)								(1	)

Net income (loss)	US$		(1	)		—		—		—		(1	)

[Additional columns below]

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


		2003
		As of and for the three-months ended
Information		March 31			June 30			September 30			December 31			Total
Quantity sold - external market	MT (thousand)		442			447			507			489			1,885

Quantity sold - total	MT (thousand)		442			447			507			489			1,885

Average sales price - external market	US$		445.80			401.96			374.08			389.72			401.57
Average sales price - total	US$		445.80			401.96			374.08			389.72			401.57

Stockholders’ equity	US$		218			212			204			206			206

Net operating revenues	US$		199			182			191			192			764
Cost of products / Other expenses	US$		(179	)		(174	)		(189	)		(178	)		(720	)
Other expenses/revenues	US$		(8	)		(5	)		(6	)		(6	)		(25	)
Depreciation, amortization and depletion	US$		7			8			7			7			29

EBITDA	US$		19			11			3			15			48
Depreciation, amortization and depletion	US$		(7	)		(8	)		(7	)		(7	)		(29	)

EBIT	US$		12			3			(4	)		8			19
Net financial result	US$		(3	)		(3	)		(2	)		(3	)		(11	)
Gain on investments accounted for by the equity method	US$		—			—			—			—			—

Income (loss) before income tax and social contribution	US$		9			—			(6	)		5			8
Income tax and social contribution	US$		(4	)		—			3			(2	)		(3	)

Net income (loss)	US$		5			—			(3	)		3			5

S - 16

Logistics Area – Docenave (Additional information - Unaudited) - Consolidated Subsidiary


		2004
		As of and for the three-months ended
Information		March 31			June 30		September 30		December 31		Total
Shipping: Quantity sold - External market:
. Bulk transportation (ore oil)	MT (thousand)		1,426									1,426
. Containers (TEUS)	TEUS		7,444									7,444
. TUG (maneuver)	Maneuver		698									698
Shipping: Quantity sold - Domestic market:
. Bulk transportation (ore oil)	MT (thousand)		129									129
. Containers (TEUS)	TEUS		14,532									14,532
. TUG (maneuver)	Maneuver		912									912
Average sales price - Shipping - external market:
. Bulk transportation (ore oil)	US$		10.83									10.83
. Containers (TEUS)	US$		569.99									569.99
. TUG (maneuver)	US$		3,005.73									3,005.73
Average sales price - Shipping - domestic market:
. Bulk transportation (ore oil)	US$		3.81									3.81
. Containers (TEUS)	US$		594.62									594.62
. TUG (maneuver)	US$		3,003.29									3,003.29
Long-term indebtedness, gross	US$		1									1
Short-term indebtedness, gross	US$		1									1

Total indebtedness, gross	US$		2			—		—		—		2

Stockholders’ equity	US$		89									89

Net operating revenues	US$		33									33
Cost of products	US$		(27	)								(27	)
Other expenses/revenues	US$		(3	)								(3	)
Depreciation, amortization and depletion	US$		—									—

EBITDA	US$		3			—		—		—		3
Depreciation, amortization and depletion	US$		—			—		—		—		—

EBIT	US$		3			—		—		—		3
Impairment	US$		—									—
Net financial result	US$		5									5

Income (loss) before income tax and social contribution	US$		8			—		—		—		8
Income tax and social contribution	US$		(1	)								(1	)

Net income (loss)	US$		7			—		—		—		7

[Additional columns below]

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


		2003
		As of and for the three-months ended
Information		March 31			June 30			September 30			December 31			Total
Shipping: Quantity sold - External market:
. Bulk transportation (ore oil)	MT (thousand)		2,559			1,837			1,703			1,835			7,934
. Containers (TEUS)	TEUS		2,360			3,427			4,682			6,797			17,266
. TUG (maneuver)	Maneuver		632			776			773			983			3,164
Shipping: Quantity sold - Domestic market:
. Bulk transportation (ore oil)	MT (thousand)		441			251			410			285			1,387
. Containers (TEUS)	TEUS		9,682			11,987			12,053			14,872			48,594
. TUG (maneuver)	Maneuver		1,114			1,242			1,132			1,448			4,936
Average sales price - Shipping - external market:
. Bulk transportation (ore oil)	US$		7.18			8.73			6.79			9.39			8.01
. Containers (TEUS)	US$		525.00			451.12			576.68			684.27			587.05
. TUG (maneuver)	US$		2,446.20			2,695.88			2,733.51			2,237.03			2,512.64
Average sales price - Shipping - domestic market:
. Bulk transportation (ore oil)	US$		5.56			3.69			6.37			3.85			5.11
. Containers (TEUS)	US$		744.16			621.84			629.55			635.56			652.32
. TUG (maneuver)	US$		2,447.94			2,706.12			2,749.12			2,212.02			2,512.76
Long-term indebtedness, gross	US$		1			1			1			1			1
Short-term indebtedness, gross	US$		1			1			1			1			1

Total indebtedness, gross	US$		2			2			2			2			2

Stockholders’ equity	US$		134			104			86			82			82

Net operating revenues	US$		33			31			28			37			129
Cost of products	US$		(33	)		(25	)		(28	)		(31	)		(177	)
Other expenses/revenues	US$		1			20			(9	)		(8	)		4
Depreciation, amortization and depletion	US$		—			—			—			—			—

EBITDA	US$		1			26			(9	)		(2	)		16
Depreciation, amortization and depletion	US$		—			—			—			—			—

EBIT	US$		1			26			(9	)		(2	)		16
Impairment	US$		—			—			—			—			—
Net financial result	US$		—			(20	)		14			(1	)		(7	)

Income (loss) before income tax and social contribution	US$		1			6			5			(3	)		9
Income tax and social contribution	US$		(1	)		1			—			(1	)		(1	)

Net income (loss)	US$		—			7			5			(4	)		8

S - 17

Logistics Area – FCA (Additional information - Unaudited) - Consolidated Subsidiary


		2004
		As of and for the three-months ended
Information		March 31			June 30		September 30		December 31		Total
Quantity sold - internal market - Railroad Service	(thousand)		5,807									5,807

Quantity sold - total	(thousand)		5,807			—		—		—		5,807

Average sales price - internal market - Railroad Service	US$		7.86									7.86
Average sales price - total	US$		7.86									7.86
Long-term indebtedness, gross	US$		111									111
Short-term indebtedness, gross	US$		18									18

Total indebtedness, gross	US$		129			—		—		—		129

Stockholders’ equity	US$		29									29

Net operating revenues	US$		39									39
Cost of products	US$		(43	)								(43	)
Other expenses/revenues	US$		1									1
Depreciation, amortization and depletion	US$		4									4

EBITDA	US$		1			—		—		—		1
Depreciation, amortization and depletion	US$		(4	)		—		—		—		(4	)

EBIT	US$		(3	)		—		—		—		(3	)
Impairment	US$											—
Net financial result	US$		(4	)								(4	)
Minority interest	US$											—

Net income (loss)	US$		(7	)		—		—		—		(7	)

[Additional columns below]

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


		2003
		As of and for the three-months ended
Information		March 31			June 30			September 30			December 31			Total
Quantity sold - internal market - Railroad Service	(thousand)		5,431			6,024			6,336			6,028			23,819

Quantity sold - total	(thousand)		5,431			6,024			6,336			6,028			23,819

Average sales price - internal market - Railroad Service	US$		5.58			7.05			7.86			7.69			7.09
Average sales price - total	US$		5.58			7.05			7.86			7.69			7.09
Long-term indebtedness, gross	US$		103			120			115			115			115
Short-term indebtedness, gross	US$		13			16			16			17			17

Total indebtedness, gross	US$		116			136			131			132			132

Stockholders’ equity	US$		16			40			29			37			37

Net operating revenues	US$		26			38			44			41			149
Cost of products	US$		(29	)		(51	)		(45	)		(55	)		(180	)
Other expenses/revenues	US$		(5	)		(3	)		(7	)		(11	)		(26	)
Depreciation, amortization and depletion	US$		2			1			3			4			10

EBITDA	US$		(6	)		(15	)		(5	)		(21	)		(47	)
Depreciation, amortization and depletion	US$		(2	)		(1	)		(3	)		(4	)		(10	)

EBIT	US$		(8	)		(16	)		(8	)		(25	)		(57	)
Impairment	US$		(2	)		—			—			—			(2	)
Net financial result	US$		—			6			(4	)		(2	)		—
Minority interest	US$		—			—			—			—			—

Net income (loss)	US$		(10	)		(10	)		(12	)		(27	)		(59	)

S - 18

Others – PPSA (Additional information - Unaudited) - Consolidated Subsidiary


		2004
		As of and for the three-months ended
Information		March 31			June 30		September 30		December 31		Total
Quantity sold - external market	MT (thousand)		85									85
Quantity sold - internal market	MT (thousand)		13									13

Quantity sold - total	MT (thousand)		98			—		—		—		98

Average sales price - external market	US$		153.43									153.43
Average sales price - internal market	US$		157.45									157.45
Average sales price - total	US$		153.94									153.94
Long-term indebtedness, gross	US$		39									39
Short-term indebtedness, gross	US$		5									5

Total indebtedness, gross	US$		44			—		—		—		44

Stockholders’ equity	US$		29									29

Net operating revenues	US$		15									15
Cost of products	US$		(9	)								(9	)
Other expenses/revenues	US$		(2	)								(2	)
Depreciation, amortization and depletion	US$		1									1

EBITDA	US$		5			—		—		—		5
Depreciation, amortization and depletion	US$		(1	)		—		—		—		(1	)

EBIT	US$		4			—		—		—		4
Impairment	US$		—									—
Net financial result	US$		(1	)								(1	)

Income (loss) before income tax and social contribution	US$		3			—		—		—		3
Income tax and social contribution	US$		—									—

Net income (loss)	US$		3			—		—		—		3

[Additional columns below]

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


		2003
		As of and for the three-months ended
Information		March 31			June 30			September 30			December 31			Total
Quantity sold - external market	MT (thousand)		91			71			101			104			367
Quantity sold - internal market	MT (thousand)		17			13			13			13			56

Quantity sold - total	MT (thousand)		108			84			114			117			423

Average sales price - external market	US$		156.52			159.99			143.15			153.80			152.74
Average sales price - internal market	US$		127.82			165.77			156.85			159.62			150.75
Average sales price - total	US$		152.00			160.88			144.71			154.45			152.48
Long-term indebtedness, gross	US$		77			72			44			44			44
Short-term indebtedness, gross	US$		13			3			12			9			9

Total indebtedness, gross	US$		90			75			56			53			53

Stockholders’ equity	US$		(15	)		(5	)		28			26			26

Net operating revenues	US$		16			11			16			20			63
Cost of products	US$		(8	)		(9	)		(11	)		(10	)		(38	)
Other expenses/revenues	US$		(2	)		(7	)		(3	)		(3	)		(15	)
Depreciation, amortization and depletion	US$		1			1			1			2			5

EBITDA	US$		7			(4	)		3			9			15
Depreciation, amortization and depletion	US$		(1	)		(1	)		(1	)		(2	)		(5	)

EBIT	US$		6			(5	)		2			7			10
Impairment	US$		—			—			—			(5	)		(5	)
Net financial result	US$		5			13			(5	)		—			13

Income (loss) before income tax and social contribution	US$		11			8			(3	)		2			18
Income tax and social contribution	US$		(1	)		1			—			(2	)		(2	)

Net income (loss)	US$		10			9			(3	)		—			16

S - 19

Others – Caemi (Additional information - Unaudited) - Consolidated Subsidiary


		2004
		As of and for the three-months ended
Information		March 31			June 30		September 30		December 31		Total
IRON ORE
Quantity sold - external market	MT (thousand)		7,855									7,855
Quantity sold - internal market	MT (thousand)		1,941									1,941

Quantity sold - total	MT (thousand)		9,796			—		—		—		9,796

Average sales price - external market	US$		19.00									19.00
Average sales price - internal market	US$		14.00									14.00
Average sales price - total	US$		18.00									18.00
BAUXITE
Quantity sold - external market	MT (thousand)		19									19
Quantity sold - internal market	MT (thousand)		1									1

Quantity sold - total	MT (thousand)		20			—		—		—		20

Average sales price - external market	US$		148.20									148.20
Average sales price - internal market	US$		158.00									158.00
Average sales price - total	US$		148.67									148.67
KAOLIN
Quantity sold - external market	MT (thousand)		169									169
Quantity sold - internal market	MT (thousand)		18									18

Quantity sold - total	MT (thousand)		187			—		—		—		187

Average sales price - external market	US$		153.64									153.64
Average sales price - internal market	US$		210.17									210.17
Average sales price - total	US$		159.08									159.08
Long-term indebtedness, gross	US$		189									189
Short-term indebtedness, gross	US$		14									14

Total indebtedness, gross	US$		203			—		—		—		203

Stockholders’ equity	US$		979									979

Net operating revenues	US$		189									189
Cost of products	US$		(121	)								(121	)
Other expenses/revenues	US$		(20	)								(20	)
Depreciation, amortization and depletion	US$		29									29

EBITDA	US$		77			—		—		—		77
Depreciation, amortization and depletion	US$		(29	)		—		—		—		(29	)

EBIT	US$		48			—		—		—		48
Impairment	US$		—									—
Gain on investments accounted for by the equity method	US$		5									5
Net financial result	US$		(4	)								(4	)

Income before income tax and social contribution	US$		49			—		—		—		49
Income tax and social contribution	US$		(16	)								(16	)
Minority interest	US$		(7	)								(7	)

Net income	US$		26			—		—		—		26

[Additional columns below]

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


		2003
		As of and for the three-months ended
Information		*March 31 ()**		*June 30 ()**		September 30			December 31			Total
IRON ORE
Quantity sold - external market	MT (thousand)		—		—		2,798			8,598			11,396
Quantity sold - internal market	MT (thousand)		—		—		612			1,868			2,480

Quantity sold - total	MT (thousand)		—		—		3,410			10,466			13,876

Average sales price - external market	US$		—		—		18.74			18.64			18.66
Average sales price - internal market	US$		—		—		11.81			10.89			11.12
Average sales price - total	US$		—		—		17.85			17.25			17.40
BAUXITE
Quantity sold - external market	MT (thousand)		—		—		4			13			17
Quantity sold - internal market	MT (thousand)		—		—		5			13			18

Quantity sold - total	MT (thousand)		—		—		9			26			35

Average sales price - external market	US$		—		—		163.50			154.08			156.30
Average sales price - internal market	US$		—		—		141.00			168.62			160.95
Average sales price - total	US$		—		—		151.00			161.35			158.69
KAOLIN
Quantity sold - external market	MT (thousand)		—		—		61			145			206
Quantity sold - internal market	MT (thousand)		—		—		7			18			25

Quantity sold - total	MT (thousand)		—		—		68			163			231

Average sales price - external market	US$		—		—		145.67			167.13			160.78
Average sales price - internal market	US$		—		—		179.00			152.96			160.25
Average sales price - total	US$		—		—		149.10			165.05			160.35
Long-term indebtedness, gross	US$		—		—		199			194			194
Short-term indebtedness, gross	US$		—		—		8			16			16

Total indebtedness, gross	US$		—		—		207			210			210

Stockholders’ equity	US$		—		—		911			959			959

Net operating revenues	US$		—		—		66			200			266
Cost of products	US$		—		—		(51	)		(116	)		(167	)
Other expenses/revenues	US$		—		—		(6	)		(24	)		(30	)
Depreciation, amortization and depletion	US$		—		—		(8	)		(11	)		(19	)

EBITDA	US$		—		—		1			49			50
Depreciation, amortization and depletion	US$		—		—		8			11			19
EBIT	US$		—		—		9			60			69
Impairment	US$		—		—		—			(16	)		(16	)
Gain on investments accounted for by the equity method	US$		—		—		3			28			31
Net financial result	US$		—		—		1			(5	)		(4	)

Income before income tax and social contribution	US$		—		—		13			67			80
Income tax and social contribution	US$		—		—		(2	)		(13	)		(15	)
Minority interest	US$		—		—		3			(14	)		(11	)

Net income	US$		—		—		14			40			54

(*) Consolidated as from September 1, 2003.

S - 20

Indexes on CVRD’s Consolidated Debt (Additional information - Unaudited)


	As of and for the three months ended
							December 31,
	March 31, 2004			March 31, 2003			2003
Current debt
Current portion of long-term debt - unrelated parties		695			789			1,009
Short-term debt		171			61			129
Loans from related parties		87			56			119

		953			906			1,257
Long-term debt
Long-term debt — unrelated parties		3,288			2,401			2,767
Loans from related parties		3			7			4

		3,291			2,408			2,771

Gross debt (current plus long-term debt)		4,244			3,314			4,028

Interest paid over:
Short-term debt		(2	)		(6	)		—
Long-term debt		(75	)		(53	)		(38	)

Interest paid		(77	)		(59	)		(38	)
EBITDA		685			442			568
Stockholders’ equity		5,099			3,640			4,884
EBITDA / Interest paid		8.90			7.49			14.95
Gross Debt / EBITDA		1.55			1.87			1.77
Gross debt / Equity Capitalization (%)		45			48			45
Financial expenses
Third party — local debt		(9	)		(5	)		(9	)
Third party — foreign debt		(43	)		(39	)		(41	)
Related party debt		(3	)		(5	)		(2	)

Gross interest		(55	)		(49	)		(52	)
Labor and civil claims and tax-related actions		(6	)		(6	)		(24	)
Tax on financial transactions — CPMF		(3	)		(4	)		(8	)
Derivatives (Interest rate / Currencies)		(7	)		(8	)		5
Derivatives (gold / alumina)		(25	)		5			(25	)
Others		(13	)		(20	)		(18	)

		(109	)		(82	)		(122	)

Financial income
Cash and cash equivalents		8			10			14
Others		3			18			4

		11			28			18

Financial expenses, net		(98	)		(54	)		(104	)

Foreign exchange and monetary gain (losses) on liabilities		(62	)		276			303
Foreign exchange and monetary gain (losses) on assets		23			(226	)		(311	)

Foreign exchange and monetary gain (losses), net		(39	)		50			(8	)

Financial result, net		(137	)		(4	)		(112	)

S - 21

Calculation of EBITDA (Additional information - Unaudited)


	As of and for the three months ended
	March 31,			March 31,			December
	2004			2003			31, 2003
Operating income		529			363			392
Depreciation		95			43			78

		624			406			470
Write-down of assets		—			—			39
Dividends received		61			36			59

EBITDA		685			442			568

Net operating revenues		1,610			1,110			1,638
Margin EBITDA		42.5	%		39.8	%		34.7	%

Adjusted EBITDA x Operating Cash Flows (Additional information - Unaudited)


	As of and for the three months ended
	March 31, 2004						March 31, 2003						December 31, 2003
				Operating						Operating						Operating
				cash						cash						cash
	EBITDA			flows			EBITDA			flows			EBITDA			flows
Net income		405			405			354			354			270			270
Income tax		53			(48	)		65			65			50			76
Income tax cash		—			—			6			—			16			—
Equity in results of affiliates and joint ventures and change in provision for losses on equity investments		(90	)		(90	)		(94	)		(94	)		(88	)		(88	)
Foreign exchange and monetary losses		39			43			(50	)		(142	)		8			5
Financial expenses		98			(14	)		54			13			104			43
Minority interests		24			24			18			18			49			49
Change in accounting pratice for asset retirement obligations					—			10			10			—			—
Gain on sold of investments		—			—			—			—			(17	)		(17	)
Net working capital		—			56			—			45			—			13
Others		—			16			—			8			—			(13	)

Operating income		529			392			363			277			392			338
Depreciation, depletion and amortization		95			95			43			43			78			78
Dividends received		61			61			36			36			59			59
Impairment of property, plant and equipment		—			—			—			—			39			39

		685			548			442			356			568			514

Operating cash flows					548						356						514

Income tax					101						—						(26	)
Foreign exchange and monetary losses					(4	)					92						3
Financial expenses					112						41						61
Net working capital					(56	)					(45	)					(13	)
Others					(16	)					(2	)					29

EBITDA					685						442						568

S - 22

Board of Directors, Fiscal Council and Executive Officers


Board of Directors		Fiscal Council

Sérgio Ricardo Silva Rosa Chairman		Pedro Carlos de Mello Chairman

Mário da Silveira Teixeira Júnior		Marcelo Amaral Moraes Azevedo

Arlindo Magno de Oliveira		Oswaldo Mário Rêgo de Amorim

Cláudio Bernardo Guimarães de Moraes		Wilson Risolia Rodrigues

Erik Persson

		Executive Officers
Francisco Valadares Póvoa Jaques Wagner Katsuto Momii Oscar Augusto de Camargo Filho Renato da Cruz Gomes Ricardo Carvalho Giambroni Advisory Committees of the Board of Directors Audit Committee Antonio José de Figueiredo Ferreira Marcos Fábio Coutinho Paulo Roberto Ferreira de Medeiros Ricardo Wiering de Barros Executive Development Committee Arlindo Magno de Oliveira Francisco Valadares Póvoa João Moisés de Oliveira Olga Loffredi Oscar Augusto de Camargo Filho		Roger Agnelli Chief Executive Officer Armando de Oliveira Santos Neto Executive Officer for Ferrous Minerals Carla Grasso Executive Officer for Human Resources and Corporate Services Antonio Miguel Marques Executive Officer for Non-Ferrous Minerals Fábio de Oliveira Barbosa Chief Financial Officer Gabriel Stoliar Executive Officer for Planning Guilherme Rodolfo Laager Executive Officer for Logistics Otto de Souza Marques Junior Chief Officer of Control Department Eduardo de Carvalho Duarte Chief Accountant CRC-RJ 57439
Strategic Committee
Roger Agnelli
Fábio de Oliveira Barbosa Cézar Manoel de Medeiros
José Roberto Mendonça de Barros
Samir Zraick
Finance Committee
Roger Agnelli
Fábio de Oliveira Barbosa
Luiz Carlos Siqueira Aguiar
Rômulo de Mello Dias
Wanderlei Viçoso Fagundes
Governance and Ethics Committee
Renato da Cruz Gomes
Ricardo Simonsen
Ricardo Carvalho Giambroni

S - 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.


Date: May 17, 2004	COMPANHIA VALE DO RIO DOCE
		(Registrant)

	By:	/s/ Fabio de Oliveira Barbosa

		Fabio de Oliveira Barbosa
		Chief Financial Officer