Edgar Filing: Companhia Vale do Rio Doce

Form 6-K

United States
Securities and Exchange Commission

Washington, D.C. 20549

FORM 6-K

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

For the month of
May 2009

Companhia Vale do Rio Doce

Avenida Graça Aranha, No. 26
20030-900 Rio de Janeiro, RJ, Brazil
(Address of principal executive office)

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


		(Check One) Form 20-F þ Form 40-F o

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


		(Check One) Yes o No þ

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


		(Check One) Yes o No þ

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


		(Check One) Yes o No þ

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

TABLE OF CONTENTS


Press Release
Signature Page

COMPANHIA VALE DO RIO DOCE
INDEX TO CONDENSED CONSOLIDATED FINANCIAL INFORMATION


	Page

Report of Independent Registered Public Accounting Firm		2

Condensed Consolidated Balance Sheets as of March 31, 2009 and December 31, 2008 .		4

Condensed Consolidated Statements of Income for the three-month periods ended March 31, 2009, December 31, 2008 and March 31, 2008		6

Condensed Consolidated Statements of Cash Flows for the three-month periods ended March 31, 2009, December 31, 2008 and March 31, 2008		7

Condensed Consolidated Statements of Changes in Stockholders’ Equity for the three-month periods ended March 31, 2009, December 31, 2008 and March 31, 2008		8

Notes to the Condensed Consolidated Financial Information		9

Supplemental Financial Information (unaudited)		35

Report of Independent Registered Public Accounting Firm

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

We have reviewed the accompanying condensed consolidated balance sheet of Companhia Vale do Rio Doce and its subsidiaries as of March 31, 2009, and the related condensed consolidated statements of income, of cash flows and of changes in stockholders’ equity for each of the three-month periods ended March 31, 2009, December 31, 2008 and March 31, 2008. This interim financial information is the responsibility of the Company’s management.

We conducted our review in accordance with the standards of the Public Company Accounting Oversight Board (United States). A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the Public Company Accounting Oversight Board (United States), 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 review, we are not aware of any material modifications that should be made to the accompanying condensed consolidated interim financial information for it to be in conformity with accounting principles generally accepted in the United States of America.

We have previously audited in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheet as of December 31, 2008, and the related consolidated statements of income, of cash flows and of changes in stockholders’ equity for the year then ended (not presented herein), and in our report dated February 19, 2009, 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, 2008, is fairly stated in all material respects in relation to the consolidated balance sheet from which it has been derived.

Companhia Vale do Rio Doce

As discussed in Note 4 (b) to the condensed consolidated interim financial information, the Company changed the manner in which it reports non-controlling interest in 2009.

PricewaterhouseCoopers
Auditores Independentes

Rio de Janeiro, Brazil
May 6, 2009

Condensed Consolidated Balance Sheets
Expressed in millions of United States Dollars


	March 31,		December 31,
	2009		2008
	(unaudited)
Assets
Current assets
Cash and cash equivalents		8,997		10,331
Short-term investments		3,217		2,308
Accounts receivable
Related parties		53		137
Unrelated parties		2,715		3,067
Loans and advances to related parties		53		53
Inventories		3,752		3,896
Deferred income tax		597		583
Recoverable taxes		1,657		1,993
Other		992		870

		22,033		23,238


Property, plant and equipment, net, and intangible assets		51,774		49,329
Investments in affiliated companies, joint ventures and other investments		2,734		2,408
Other assets
Goodwill on acquisition of subsidiaries		1,888		1,898
Loans and advances
Related parties		11		—
Unrelated parties		88		77
Prepaid pension cost		687		622
Prepaid expenses		192		223
Judicial deposits		1,183		1,141
Advances to suppliers — energy		405		408
Recoverable taxes		516		394
Unrealized gains on derivative instruments		66		32
Other		153		161

		5,189		4,956

TOTAL		81,730		79,931

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


				(Continued)
	March 31,			December 31,
	2009			2008
	(unaudited)
Liabilities and stockholders’ equity
Current liabilities
Suppliers		1,829			2,261
Payroll and related charges		456			591
Current portion of long-term debt		650			633
Short-term debt		48			—
Loans from related parties		68			77
Provision for income taxes		304			502
Taxes payable and royalties		86			55
Employees postretirement benefits		104			102
Railway sub-concession agreement payable		412			400
Unrealized losses on derivative instruments		3			—
Provisions for asset retirement obligations		38			48
Minimum mandatory dividends payable		2,088			2,068
Other		838			500

		6,924			7,237


Long-term liabilities
Employees postretirement benefits		1,485			1,485
Long-term debt		17,648			17,535
Provisions for contingencies (Note 17 (c))		1,709			1,685
Unrealized losses on derivative instruments		615			573
Deferred income tax		4,197			4,005
Provisions for asset retirement obligations		839			839
Other		1,773			1,525

		28,266			27,647


Redeemable noncontrolling interest (Note 4 (b))		628			599

Commitments and contingencies (Note 17)

Stockholders’ equity
Preferred class A stock — 7,200,000,000 no-par-value shares authorized and 2,108,579,618 (2008 — 2,108,579,618) issued		9,727			9,727
Common stock — 3,600,000,000 no-par-value shares authorized and 3,256,724,482 (2008 — 3,256,724,482) issued		15,262			15,262
Treasury stock — 77,625,704 (2008 — 76,854,304) preferred and 74,997,899 (2008 — 74,937,899) common shares		(1,151	)		(1,141	)
Additional paid-in capital		393			393
Mandatorily convertible notes — common shares		1,288			1,288
Mandatorily convertible notes — preferred shares		581			581
Other cumulative comprehensive loss		(11,566	)		(11,510	)
Undistributed retained earnings		18,513			18,340
Unappropriated retained earnings		10,780			9,616

Total Company stockholders’ equity		43,827			42,556
Noncontrolling interests		2,085			1,892

Total stockholders’ equity		45,912			44,448

TOTAL		81,730			79,931

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

Condensed Consolidated Statements of Income

Expressed in millions of United States Dollars
(Except per share amounts)


	Three-month period ended (unaudited)
	March 31,			December 31,			March 31,
	2009			2008			2008
Operating revenues, net of discounts, freight, returns and allowances
Sales of ores and metals		4,569			6,052			6,857
Aluminum products		442			779			362
Revenues from logistic services		199			310			646
Other products and services		211			301			183

		5,421			7,442			8,048
Taxes on revenues		(97	)		(187	)		(216	)

Net operating revenues		5,324			7,255			7,832


Operating costs and expenses
Cost of ores and metals sold		(2,169	)		(2,730	)		(3,440	)
Cost of aluminum products		(452	)		(529	)		(212	)
Cost of logistic services		(165	)		(190	)		(493	)
Other		(114	)		(71	)		(97	)

		(2,900	)		(3,520	)		(4,242	)
Selling, general and administrative expenses		(233	)		(708	)		(322	)
Research and development expenses		(189	)		(295	)		(190	)
Impairment of goodwill		—			(950	)		—
Other		(317	)		(719	)		(163	)

		(3,639	)		(6,192	)		(4,917	)


Operating income		1,685			1,063			2,915

Non-operating income (expenses)
Financial income		125			247			55
Financial expenses		(287	)		(399	)		(560	)
Gains (losses) on derivatives, net		18			(586	)		(294	)
Foreign exchange and indexation gains (losses), net		16			(241	)		88
Gain on sale of investments		—			—			80

		(128	)		(979	)		(631	)


Income before income taxes and equity results		1,557			84			2,284

Income taxes
Current		(477	)		966			(654	)
Deferred		171			219			296

		(306	)		1,185			(358	)

Equity in results of affiliates, joint ventures and other investments		72			125			119

Net income		1,323			1,394			2,045

Net (income) loss attributable to noncontrolling interests		40			(27	)		(24	)

Net income attributable to Company’s stockholders		1,363			1,367			2,021


Basic and diluted earmings per share attributable to Company’s stockholders
Earnings per preferred share		0.25			0.25			0.41
Earnings per common share		0.25			0.25			0.41
Earnings per prefered share linked to convertible mandatorily notes (*)		0.53			0.76			0.66
Earnings per common share linked to convertible mandatorily notes (*)		0.57			0.81			0.74


(*)		Basic earnings per share only, as dilution assumes conversion.

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

Condensed Consolidated Statements of Cash Flows
Expressed in millions of United States Dollars


	Three-month period ended (unaudited)
	March 31,			December 31,			March 31,
	2009			2008			2008
Cash flows from operating activities:
Net income attributable to Company’s stockholders		1,363			1,367			2,021
Net income (loss) attributable to noncontrolling interests		(40	)		27			24
Net income		1,323			1,394			2,045
Adjustments to reconcile net income to cash from operations:
Depreciation, depletion and amortization		559			568			766
Dividends received		37			116			48
Equity in results of affiliates, joint ventures and other investments		(72	)		(125	)		(119	)
Deferred income taxes		(171	)		(219	)		(296	)
Impairment of goodwill		—			950			—
Loss on disposal of property, plant and equipment		41			10			37
Gain on sale of investments		—			—			(80	)
Foreign exchange and indexation losses (gains), net		(57	)		740			(122	)
Unrealized derivative losses (gains), net		(18	)		586			294
Unrealized interest (income) expense, net		3			(3	)		81
Others		(16	)		17			(18	)
Decrease (increase) in assets:
Accounts receivable		391			1,615			202
Inventories		119			(43	)		(64	)
Others		(181	)		(171	)		(155	)
Increase (decrease) in liabilities:
Suppliers		(103	)		200			(54	)
Payroll and related charges		(139	)		(25	)		(248	)
Income taxes		216			119			(718	)
Others		233			564			(191	)

Net cash provided by operating activities		2,165			6,293			1,408

Cash flows from investing activities:
Short-term investments		(909	)		(1,674	)		—
Loans and advances receivable
Related parties
Loan proceeds		(23	)		(3	)		—
Repayments		7			18			25
Others		4			24			—
Judicial deposits		(19	)		(71	)		(34	)
Investments		(138	)		(19	)		(13	)
Additions to, property, plant and equipment		(1,688	)		(3,689	)		(1,625	)
Proceeds from disposal of investments		—			—			134
Acquisition of subsidiaries, net of cash acquired		(850	)		—			—

Net cash used in investing activities		(3,616	)		(5,414	)		(1,513	)

Cash flows from financing activities:
Short-term debt, additions		103			1			801
Short-term debt, repayments		(74	)		(125	)		(672	)
Loans
Related parties
Loan proceeds		—			33			18
Repayments		(68	)		—			(2	)
Issuances of long-term debt
Third parties		185			253			1,330
Repayments of long-term debt
Third parties		(110	)		(65	)		(105	)
Treasury stock		(10	)		(752	)		—
Dividends and interest attributed to Company’s stockholders		—			(1,600	)		—
Dividends to noncontrolling interest		—			(56	)		—

Net cash provided by (used in) financing activities		26			(2,311	)		1,370

Increase (decrease) in cash and cash equivalents		(1,425	)		(1,432	)		1,265
Effect of exchange rate changes on cash and cash equivalents		91			(2,863	)		(47	)
Cash and cash equivalents, beginning of period		10,331			14,626			1,046

Cash and cash equivalents, end of period		8,997			10,331			2,264

Cash paid during the period for:
Interest on short-term debt		—			—			(5	)
Interest on long-term debt		(277	)		(314	)		(279	)
Income tax		(143	)		(149	)		(1,672	)

Non-cash transactions
Interest capitalized		65			185			17

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

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


	Three-month period ended (unaudited)
	March 31, 2009			December 31, 2008			March 31, 2008
Preferred class A stock (including twelve special shares)
Beginning and end of the period		9,727			9,727			4,953

Common stock
Beginning and end of the period		15,262			15,262			7,742

Treasury stock
Beginning of the period		(1,141	)		(389	)		(389	)
Acquisitions		(10	)		(752	)		—

End of the period		(1,151	)		(1,141	)		(389	)

Additional paid-in capital
Beginning and end of the period		393			393			498

Mandatorily convertible notes — common shares
Beginning and end of the period		1,288			1,288			1,288

Mandatorily convertible notes — preferred shares
Beginning and end of the period		581			581			581

Other cumulative comprehensive (deficit) income
Cumulative translation adjustments
Beginning of the period		(11,493	)		(3,993	)		1,340
Change in the period		(104	)		(7,500	)		(205	)

End of the period		(11,597	)		(11,493	)		1,135

Unrealized gain (loss) — available-for-sale securities, net of tax
Beginning of the period		17			(79	)		211
Change in the period		96			96			(6	)

End of the period		113			17			205

Surplus (deficit) accrued pension plan
Beginning of the period		(34	)		(304	)		75
Change in the period		(48	)		270			(15	)

End of the period		(82	)		(34	)		60

Cash flow hedge
Beginning of the period		—			28			29
Change in the period		—			(28	)		(27	)

End of the period		—			—			2

Total other cumulative comprehensive (deficit) income		(11,566	)		(11,510	)		1,402

Undistributed retained earnings
Beginning of the period		18,340			14,183			15,317
Transfer from unappropriated retained earnings		173			4,157			191

End of the period		18,513			18,340			15,508

Unappropriated retained earnings
Beginning of the period		9,616			14,521			1,631
Net income attributable to Company’s stockholders		1,363			1,367			2,021
Interest on mandatorily convertible debt
Preferred class A stock		(8	)		(15	)		(8	)
Common stock		(18	)		(32	)		(18	)
Dividends and interest attributed to Company’s stockholders
Preferred class A stock		—			(806	)		—
Common stock		—			(1,262	)		—
Appropriation to undistributed retained earnings		(173	)		(4,157	)		(191	)

End of the period		10,780			9,616			3,435

Total Company stockholders’ equity		43,827			42,556			35,018

Noncontrolling interests
Beginning of the period		1,892			2,211			2,180
Cumulative translation adjustments		222			(343	)		(51	)
Cash flow hedge		—			(26	)		(22	)
Net income (loss) attributable to noncontrolling interests		(40	)		27			24
Dividends and interest attributable to noncontrolling interests		(1	)		(1	)		—
Capitalization of stockholders advances		12			24			9

End of the period		2,085			1,892			2,140

Total stockholders’ equity		45,912			44,448			37,158


Number of shares:
Preferred class A stock (including twelve special shares)		2,108,579,618			2,108,579,618			1,919,516,400
Common stock		3,256,724,482			3,256,724,482			2,999,797,716
Buy-backs
Beginning of the period		(151,792,203	)		(86,922,944	)		(86,923,184	)
Acquisitions		(831,400	)		(64,869,259	)		—
Sales		—			—			132

End of the period		(152,623,603	)		(151,792,203	)		(86,923,052	)

		5,212,680,497			5,213,511,897			4,832,391,064

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

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

The Company and its operation

Companhia Vale do Rio Doce (“Vale”, the “Company” or “we”) is a limited liability company incorporated in Brazil. Operations are carried out through Vale and our subsidiary companies, joint ventures and affiliates, and mainly consist of mining, non-ferrous metal production, logistics and steel activities.

At March 31, 2009, our principal consolidated operating subsidiaries are the following:

% voting

Head office

Subsidiary

% ownership

capital

location

Principal activity

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

57.03

59.02

Brazil

Alumina

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

51.00

Brazil

Aluminum

CADAM S.A (CADAM)

61.48

100.00

Brazil

Kaolin

CVRD Overseas Ltd.

100.00

Cayman Islands

Trading

Ferrovia Centro-Atlântica S. A.

100.00

Brazil

Logistics

Pará Pigmentos S.A. (“PPSA”)

86.17

85.57

Brazil

Kaolin

PT International Nickel Indonesia Tbk (“PT Inco”)

61.16

Indonesia

Nickel

Rio Doce Manganése Norway — RDMN

100.00

Norway

Ferroalloys

Vale Manganês S.A. (formely Rio Doce Manganês S.A.)

100.00

Brazil

Manganese and Ferroalloys

Vale Manganèse France (formely Rio Doce Manganèse Europe — RDME)

100.00

France

Ferroalloys

Vale Australia Pty Ltd.

100.00

Australia

Coal

Vale Inco Limited

100.00

Canada

Nickel

Vale International S.A (formerly CVRD International S.A)

100.00

Switzerland

Trading

Basis of consolidation

All majority-owned subsidiaries in which we have both share and management control are consolidated. All significant intercompany accounts and transactions are eliminated. Our variable interest entities in which we are the primary beneficiary are consolidated. Investments in unconsolidated affiliates and joint ventures are accounted for under the equity method (Note 10).

We evaluate the carrying value of our equity accounted investments in relation to publicly quoted market prices when available. 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 noncontrolling stockholder but with significant influence over the operating and financial policies of the investee.

Our participation in hydroelectric projects are made via consortium contracts under which we have undivided interests in the assets and are liable for our proportionate share of liabilities and expenses, which are based on our proportionate share of power output. We do not have joint liability for any obligations. No separate legal or tax status is granted to consortia under Brazilian law. Accordingly, we recognize our proportionate share of costs and our undivided interest in assets relating to hydroelectric projects.

Basis of presentation

Our condensed consolidated interim financial information for the three-month periods ended March 31, 2009, December 31, 2008 and March 31, 2008, prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”), are 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 periods ended March 31, 2009, are not necessarily indicative of the actual results expected for the full fiscal year ending December 31, 2009.

		This condensed consolidated financial information should be read in conjunction with our audited consolidated financial statements as of and for the year ended December 31, 2008, prepared in accordance with U.S. GAAP.

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

		The Brazilian Real is the parent Company’s functional currency. We have selected the U.S. Dollar as our reporting currency. The financial statements have been translated in accordance with the criteria set forth in Statement of Financial Accounting Standards (“SFAS”) 52 — “Foreign Currency Translation”.

		All assets and liabilities have been translated to U.S. Dollars at the closing rate of exchange at each balance sheet date (or, if unavailable, the first available exchange rate). All statement of income accounts have been translated to U.S. Dollars at the average exchange rates prevailing during the respective periods. Capital accounts are recorded at historical exchange rates. Translation gains and losses are recorded in the Cumulative Translation Adjustments account (“CTA”) in stockholders’ equity. The results of operations and financial position of our entities that have a functional currency other than the U.S. Dollar have been translated in accordance with SFAS 52.

		The exchange rates used to translate the assets and liabilities of the Brazilian operations at March 31, 2009 and December 31, 2008, were R$2.3152 and R$2.3370, respectively.

4		Accounting pronouncements

(a)		New accounting standards

		In April 2009, The FASB issued FAS 107-1 and APB 28-1, “Interim Disclosures about Fair Value of Financial Instruments” to require disclosures about fair value of financial instruments for interim reporting periods of publicly traded companies as well as in annual financial statements. This FSP also amends APB Opinion 28, Interim Financial Reporting, to require those disclosures in summarized financial information at interim reporting periods. This FSP shall be effective for interim reporting periods ending after June 15, 2009, we have not early adopted this pronouncement for the three-month period ended March 31, 2009. The application of FSP FAS 107 — 1 and APB 28 — 1 will expand the Company’s disclosures regarding the use of fair value in interim periods.

(b)		Accounting standards recently adopted

		From 2009, we fully adopted the accounting standards addressed by the following pronouncements.

		FAS 141(R) — 1, “Accounting for Assets Acquired and Liabilities Assumed in a Business Combination That Arise from Contingencies”. The FSP applies to all assets acquired and liabilities assumed in a business combination that arise from contingencies that would be within the scope of Statement 5 if not acquired or assumed in a business combination, except for assets or liabilities arising from contingencies that are subject to specific guidance in Statement 141(R).

		SFAS 161, Disclosures about Derivative Instruments and Hedging Activities an amendment of FASB Statement 133 (“SFAS 161”). SFAS 161 expands the current disclosure requirements of SFAS 133, Accounting for Derivative Instruments and Hedging Activities, such that entities must now provide qualitative disclosure about objectives and strategies for using derivatives, quantitative disclosures about fair value amounts of and gain and losses on derivative instruments and disclosures about credit-risk related contingent features in derivative agreements on a quarterly basis regarding how and why the entity uses derivatives, how derivatives and related hedged items are accounted for under SFAS 133 and how derivatives and related hedged items affect the entity’s financial position, performance and cash flow. The required information is disclosed in Note 20.

		SFAS 160, which clarifies that a noncontrolling interest in a subsidiary is an ownership interest in the consolidated entity that should be reported as equity in the consolidated financial statements, as showed on Note 14 and condensed consolidated statements of changes in stockholders’ equity. Noncontrolling interests that could be redeemed upon the occurrence of certain events outside the Company’s control have been classified as redeemable noncontrolling interest using the mezzanine presentation on the balance sheet between liabilities and stockholders’ equity, retroactively to all periods presented.

		SFAS 141(R), that applies prospectively to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008.

5		Major acquisitions and disposals

(a)		Diamond Coal Ltd

		In March 2009, we acquired 100% of the company Diamond Coal Ltd that owns coal assets in Colombia for US$300, from Cement Argos.

		The primary reason for the acquisition was that the coal assets are an important part of our growth strategy. Therefore, Vale is seeking to build a coal asset platform in Colombia, as it is the world’s third largest exporter of high-quality thermal coal, given its low level of sulfur and high calorific value.

		Due to the recent conclusion of the transaction, we are still in the process of identifying assets acquired and liabilities assumed.

		As a result, the condensed information presented below reflects our preliminary analysis of the expected purchase price allocation:


	Preliminary
	Valuation

Purchase price		300
Book value of assets acquired		(113	)


Adjustment to fair value of property, plant and equipment		187

The final accounting is pending conclusion of all identified assets and liabilities which is being internally carried out by us.

Such purchase price allocation will be finalized during next periods, and accordingly the preliminary information presented above is subject to revisions, which may be material.

(b)

Green Mineral Resources

In February 2009, we concluded the acquisition of Green Mineral Resources that owns Regina Project (Canada) and Colorado Project (Argentina), from Rio Tinto, for US$850.

The acquisition of potash assets is aligned with Vale’s strategy to become a large producer of fertilizers to benefit from the exposure to rising global consumption.

Also due to the recent closure of this transaction, information about the purchase price allocation presented below based on the fair values of identified assets acquired and liabilities assumed is preliminary. Such allocation, currently being performed internally by the Company, will be finalized during next periods, and accordingly, the preliminary purchase price allocation information set forth below are subject to revision, which may be material.

The condensed preliminary purchase price allocation information for Green Mineral Resources is as follows:


	Preliminary
	Valuation

Total disbursements		857
Cash acquired		(7	)

Purchase price		850

Book value of assets acquired, net of cash acquired		(105	)

Book value of liabilities assumed		8


Adjustment to fair value of property, plant and equipment		753

The final accounting is pending conclusion of all identified assets and liabilities which is being internally carried out by us.

(c)

Other transactions

In March 2009, we acquired 50% of the joint venture with African Rainbow Minerals Limited of Teal Minerals Incorporated for US$60.

In January 2009, we entered into a purchase and sale agreement with Rio Tinto Plc to acquire iron ore (in Brazil) assets, for an amount of US$750, this acquisition has not been finalized yet, and it subject to the approval of Administrative Council for Economic Defense.

In February 2008, we sold our interest in Jubilee Mines N.L. (held through Vale Inco), representing 4.83% of its common shares, for US$134 generating a gain of US$80.

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%. In other countries where we have operations, the applicable tax rates vary from 1.67% to 40%.

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


	Three-month period ended (unaudited)
	March 31, 2009									December 31, 2008									March 31, 2008
	Brazil			Foreign			Total			Brazil			Foreign			Total			Brazil			Foreign			Total
Income before income taxes, equity results and noncontrolling interests		1,409			148			1,557			(2,489	)		2,573			84			522			1,762			2,284


Tax at Brazilian composite rate		(479	)		(50	)		(529	)		846			(875	)		(29	)		(177	)		(599	)		(776	)
Adjustments to derive effective tax rate:
Tax benefit on interest attributed to stockholders		—			—			—			238			—			238			169			—			169
Difference on tax rates of foreign income		—			154			154			—			347			347			—			258			258
Exchange gains/losses — not taxable		—			(9	)		(9	)		—			667			667			—			(20	)		(20	)
Tax incentives		18			—			18			(48	)		—			(48	)		15			—			15
Tax deductible amortization of goodwill		20						20			26			—			26			27			—			27
Other non-taxable, income/non deductible expenses		(3	)		43			40			(94	)		78			(16	)		(86	)		55			(31	)

Income taxes per consolidated statements of income		(444	)		138			(306	)		968			217			1,185			(52	)		(306	)		(358	)

We have certain Brazilian income tax incentives relating to our manganese operations in Carajás, our potash operations in Rosario do Catete, our alumina and aluminum operations in Barcarena and our kaolin operations in Ipixuna and Mazagão. The incentives relating to manganese, aluminum and kaolin comprise partial exemption up to 2013. The incentive relating to alumina and potash comprise full income tax exemption on defined production levels, which expires in 2009 and 2013, respectively. An amount equal to the tax saving is appropriated from retained earnings to a reserve account within stockholders’ equity and may not be distributed in the form of cash dividends.

We also have income tax incentives related to our Goro project under development in New Caledonia (“The Goro Project”). These incentives include an income tax holiday during the construction phase of the project and throughout a 15-year period commencing in the first year in which commercial production, as defined by the applicable legislation, is achieved followed by a five-year, 50 per cent income tax holiday. The Goro Project also qualifies for certain exemptions from indirect taxes such as import duties during the construction phase and throughout the commercial life of the project. Certain of these tax benefits, including the income tax holiday, are subject to an earlier phase out should the project achieve a specified cumulative rate of return. We are subject to a branch profit tax commencing in the first year in which commercial production is achieved, as defined by the applicable legislation. To date, we have not recorded any taxable income for New Caledonian tax purposes. The benefits of this legislation are expected to apply with respect to taxes payable once The Goro Project is in operation.

We are subject to examination by the tax authorities for up to five years regarding our operations in Brazil, ten years for Indonesia, and five and six years for Canada, except for Newfoundland which has no limit.

Brazilian tax loss carryforwards have no expiration date though offset is restricted to 30% of annual taxable income.

Effective January 1, 2007, the Company adopted the provisions of FASB Interpretation 48, “Accounting for Uncertainty in Income Taxes”.

The reconciliation of the beginning and ending amounts of unrecognized tax benefits is as follows:


	March 31, 2009			December 31, 2008
	(unaudited)

Beginning of the period		657			1.046

Increase resulting from tax positions taken		14			103
Decrease resulting from tax positions taken		—			(261	)
Changes in tax legislation		—			2
Cumulative translation adjustments		(5	)		(233	)

End of the period		666			657

Cash and cash equivalents


	March 31, 2009		December 31, 2008
	(unaudited)

Cash		583		767
Short-term investments denominated in Brazilian Reais		7,610		7,548
Short-term investments denominated in other currencies, mainly U.S. dollars		804		2,016

		8,997		10,331

Short-term investments


	March 31, 2009		December 31, 2008
	(unaudited)

Time deposit (*)		3,217		2,308


(*)		Represent investments with due date over 90 days.

Inventories


Finished products	March 31, 2009		December 31, 2008
	(unaudited)
Nickel (co-products and by-products)		1,423		1,514
Iron ore and pellets		677		728
Manganese and ferroalloys		204		199
Aluminum products		145		150
Kaolin		36		40
Copper concentrate		19		26
Coal		37		43
Others		86		80
Spare parts and maintenance supplies		1,125		1,116

		3,752		3,896

At March 31, 2009, we recorded an adjustment of US$26, to reduce nickel inventory to its market value.

Investments in affiliated companies and joint ventures


														Equity in earnings (losses) of investee
	March 31, 2009									Investments				adjustments									Dividends received
														Three-month period ended (unaudited)									Three-month period ended (unaudited)
							Net income
	Participation in				Net		(loss) for the			March 31,		December		March 31,			December 31,			March 31,			March 31,		December		March 31,
	capital (%)				equity		year			2009		31, 2008		2009			2008			2008			2009		31, 2008		2008
	Voting		Total							(unaudited)
Ferrous
Companhia Nipo-Brasileira de Pelotização – NIBRASCO (1)		51.11		51.00		225		10			115		110		5			18			(4	)		20		—		—
Companhia Hispano-Brasileira de Pelotização — HISPANOBRÁS (1)		51.00		50.89		96		(6	)		48		73		(3	)		7			2			—		—		—
Companhia Coreano-Brasileira de Pelotização — KOBRASCO (1)		50.00		50.00		131		22			66		55		11			4			2			—		13		—
Companhia Ítalo-Brasileira de Pelotização — ITABRASCO (1)		51.00		50.90		121		6			61		58		3			14			1			—		—		—
Minas da Serra Geral S.A. — MSG		50.00		50.00		43		1			21		21		—			(1	)		1			—		—		—
SAMARCO Mineração S.A. — SAMARCO (2)		50.00		50.00		822		93			457		412		42			37			48			—		50		—
Baovale Mineração S.A. — BAOVALE		50.00		50.00		47		3			23		26		(3	)		1			2			—		—		—
Zhuhai YPM Pellet e Co.,Ltd. — ZHUHAI		25.00		25.00		35		(17	)		9		13		(4	)		3			—			—		—		—

											800		768		51			83			52			20		63		—
Logistics
LOG-IN Logística Intermodal S.A.		31.33		31.33		290		6			97		94		2			6			5			—		—		—
MRS Logística S.A		37.86		41.50		836		45			347		326		19			87			29			—		—		—

											444		420		21			93			34			—		—		—
Holdings
Steel
California Steel Industries Inc. — CSI		50.00		50.00		298		(22	)		149		160		(11	)		(35	)		6			—		13		—
THYSSENKRUPP CSA Companhia Siderúrgica (Cost $431) — available-for-sale		10.58		10.58		—		—			517		443		—			—			—			—		—		—
Usinas Siderúrgicas de Minas Gerais S.A. – USIMINAS (cost $120) — available-for-sale (5)
		—		—		—		—			257		164		—			—			—			—		—		—

											923		767		(11	)		(35	)		6			—		13		—
Bauxite
Mineração Rio do Norte S.A. — MRN		40.00		40.00		276		(2	)		110		140		(1	)		22			14			17		13		48

											110		140		(1	)		22			14			17		13		48
Coal
Henan Longyu Resources Co. Ltd		25.00		25.00		777		73			194		176		18			15			17			—		27		—
Shandong Yankuang International Company Ltd		25.00		25.00		16		(27	)		4		11		(7	)		(17	)		(1	)		—		—		—
Teal Minerals Incorpored (4)		50.00		50.00		194		—			97		—		—			—			—			—		—		—

											295		187		11			(2	)		16			—		27		—
Nickel
Heron Resources Inc (cost $25) — available-for-sale		—		—		—		—			3		2		—			—			—			—		—		—
Mirabela Nickel Ltd (cost $24) — available-for-sale		—		—		—		—			13		8		—			—			—			—		—		—
Hudbay Minerals (cost $31) available for sale		—		—		—		—			16		9		—			—			—			—		—		—
Korea Nickel Corp		—		—		—		—			24		21		1			—			—			—		—		—
Skye Resources (3)		—		—		—		—			—		—		—			(38	)		—			—		—		—
Others		—		—		—		—			15		13		—			4			—			—		—		—

											71		53		1			(34	)		—			—		—		—
Other affiliates and joint ventures
Others		—		—		—		—			91		73		—			(2	)		(3	)		—		—		—

											91		73		—			(2	)		(3	)		—		—		—

											1,490		1,220		—			(51	)		33			17		53		48

Total											2,734		2,408		72			125			119			37		116		48


(1)		Although Vale held a majority of the voting interest of investees accounted for under the equity method, existing veto rights held by noncontrolling shareholders under shareholder agreements preclude consolidation;

(2)		Investment includes goodwill of US$46 in March, 2009 and December, 2008;

(3)		Sold in 2008;

(4)		Acquired in March, 2009 (Note 5);

(5)		Sold in April, 2009 (subsequent period) for US$254, generating a gain US$134.

11		Short-term debt

		Short-term borrowings outstanding on March 31, 2009 are from commercial banks for export financing denominated in U.S. Dollars, with average annual interest rates of 2.24%.

12		Long-term debt


	Current liabilities				Long-term liabilities
	March 31,		December		March 31,		December
	2009		31, 2008		2009		31, 2008
	(unaudited)				(unaudited)
Foreign debt

Loans and financing denominated in the following currencies:
U.S. Dollars		211		210		5,827		5,905
Others		16		23		164		167

Fixed Rate Notes — U.S. Dollar denominated		—		—		6,507		6,510
Debt securities — export sales (*) — U.S. Dollar denominated		56		55		136		149
Perpetual notes		—		—		83		83
Accrued charges		169		217		—		—

		452		505		12,717		12,814


Brazilian debt

Brazilian Reais indexed to Long-Term Interest Rate — TJLP/CDI		44		33		2,172		1,989
Brazilian Reais indexed to General Price Index-Market (IGPM)		—		—		1		1
Basket of currencies		1		1		4		4
Non-convertible debentures		—		—		2,589		2,562
U.S. Dollars Denominated		—		—		165		165
Accrued charges		153		94		—		—

		198		128		4,931		4,721

Total		650		633		17,648		17,535


(*)		Secured by receivables from future export sales.

The long-term portion at March 31, 2009 falls due as follows:


2010			2,212
2011			2,630
2012			1,146
2013			2,590
2014 and thereafter			8,773
No due date (Perpetual notes and non-convertible debentures)			297

			17,648

At March 31, 2009 annual interest rates on long-term debt were as follows:


Up to 3%			5,077
3.1% to 5%			1,174
5.1% to 7% (*)			5,764
7.1% to 9% (*)			2,289
9.1% to 11%			91
Over 11% (*)			3,816
Variable (Perpetual notes)			87

			18,298


(*)		Includes non-convertible debentures and other Brazilian Real-denominated debt that bear interest at CDI (Brazilian interbank certificate of deposit) and TJLP (Brazilian government long-term interest) rates plus a spread. For these operations we have entered into derivative transactions to mitigate our exposure to the floating rate debt denominated in Brazilian Real, totaling US$4,608 of which US$3,739 has original interest rate above 11%. The average cost after taking into account the derivative transactions is 4.97%.

The indexation indices/ rates applied to our debt were as follows (unaudited):


	Three-month period ended
	March 31,			December			March 31,
	2009			31, 2008			2008

TJLP — Long-Term Interest Rate (effective rate)		1.5			1.5			1.5
IGP-M — General Price Index — Market		(0.9	)		1.2			2.4
Appreciation (Devaluation) of Real against U.S. Dollar		0.9			(18.1	)		1.3

		In January 2008 we entered into a trade finance agreement with a Brazilian bank in the amount of US$1,100 with final maturity in 2018.

		During 2008, we entered into agreements with Banco Nacional de Desenvolvimento Econômico e Social — BNDES, (the Brazilian National Development Bank) and with long-term Japanese financing agencies, Japan Bank for International Cooperation — JBIC and Nippon Export and Investment Insurance — NEXI related to future lines of credit to finance mining, logistics and power generation projects as part of our investment program for 2008-2012. Through March 31, 2009, Vale had drawn down US$212 of the committed credit facility with BNDES.

		Additionally, we have revolving credit lines available under which amounts can be drawn down and repaid at the option of the borrower. At March 31, 2009, the total amount available under revolving credit lines was US$1,900, of which US$1,150 was granted to Vale International and the balance to Vale Inco. As of March 31, 2009, neither Vale International nor Vale Inco had drawn any amounts under these facilities. Through March 31, 2009, Vale Inco had drawn down US$99 of letters of credit.

		At March 31, 2009 the U.S. Dollar denominated fixed rate notes of US$6,507 (December 31, 2008 – US$6,510) and other debt of US$11,254 (December 31, 2008 – US$11,102) are unsecured. The export securitization of US$194 (December 31, 2008 – US$204) represents debt securities collateralized by receivables from future export sales of CVRD Overseas Ltd. Loans from international lenders of US$45 (December 31, 2008 – US$57) are guaranteed by the Brazilian Federal Government, to which we have provided like counter guarantees. The remaining long-term debt of US$298 (December 31, 2008 – US$295) is collateralized mainly by receivables.

		Our principal covenants require us to maintain certain ratios, such as debt to EBITDA and interest coverage. We were in full compliance with our financial covenants as of March 31, 2009 and December 31, 2008.

13		Stockholders’ equity

		Each holder of common and preferred class A stock is entitled to one vote for each share on all matters brought before stockholders’ meetings, except for the election of the Board of Directors, which is restricted to the holders of common stock. The Brazilian Government holds twelve preferred special shares which confer permanent veto rights over certain matters.

		Both common and preferred stockholders are entitled to receive a mandatory minimum dividend of 25% of annual adjusted net income under Brazilian GAAP, once declared at the annual stockholders’ meeting. In the case of preferred stockholders, this dividend cannot be less than 6% of the preferred capital as stated in the statutory accounting records or, if greater, 3% of the Brazilian GAAP equity value per share. For the year ended December 31, 2008, this dividend corresponds to US$2,068, provided against stockholders’ equity.

		In April 2009 (subsequent period) we paid US$1,250 as a first installment of the dividend to stockholders. The distribution was made in the form of dividends.

In July 2008, we issued 80,079,223 common ADS, 176,847,543 common shares, 63,506,751 preferred ADS and 100,896,048 preferred shares through a Global equity offering. Our capital increased by US$11,666, upon subscription of preferred stock of US$4,146 corresponding to 164,402,799 shares and common stock of US$7,520 corresponding to 256,926,766 shares. In August, 2008, we issued an additional 24,660,419 preferred shares, representing an increase of US$628. After the closing of the operation, our capital stock increased by US$12,294 in 2008; the transaction costs of US$105 were recorded as a reduction of the additional paid-in capital account.

In June 2007, we issued US$1,880 Mandatorily Convertible Notes due June 15, 2010 for total proceeds of US$1,869, net of commissions. The Notes bear interest at 5.50% per year payable quarterly and additional interest which will be payable based on the net amount of cash distribution paid to ADS holders. A tranche of US$1,296 Notes are mandatorily convertible into an aggregate maximum of 56,582,040 common shares and a tranche of US$584 Notes are mandatorily convertible into an aggregate maximum of 30,295,456 preferred class A shares. On the maturity date (whether at stated maturity or upon acceleration following an event of default), the Series RIO Notes will automatically convert into ADSs, each ADS representing one common share of Vale, and the Series RIO P Notes will automatically convert into ADSs, each ADS representing one preferred class A share of Vale. We currently hold the shares to be issued on conversion in treasury. The Notes are not repayable in cash. Holders of notes will have no voting rights. We will pay to the holders of our Series RIO Notes or RIO P Notes additional interest in the event that Vale makes cash distributions to all holders of RIO ADSs or RIO P ADSs, respectively. We determined, using a statistical model, that the potential variability in the number of shares to be converted is not a predominant feature of this hybrid financial instrument and thus classified it as an equity instrument within stockholders’ equity. Other than during the cash acquisition conversion period, holders of the notes have the right to convert their notes, in whole or in part, at any time prior to maturity in the case of the Series RIO Notes, into RIO ADSs at the minimum conversion rate of 0.8664 RIO ADSs per Series RIO Note, and in the case of Series RIO P Notes, into RIO P ADSs at the minimum conversion rate of 1.0283 RIO P ADSs per Series RIO P Note.

In April 2009, we announced-that the ticker symbols of its ADR will change from Rio and Rio PR to Vale and Vale P. The new ticker symbols will be effective at the starting of trading on Monday, May 4, 2009.

In April 2009 (subsequent period) we paid to holders of the mandatorily convertible notes of series Vale (formely RIO) and of series Vale (formely RIO P), the U.S. Dollar equivalent of US$0.490922 and US$0.582658, respectively.

Basic and diluted earnings per share

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


	Three-month period ended (unaudited)
	March 31,			December			March 31,
	2009			31, 2008			2008
Net income attributable to Company’s stockholders		1,363			1,367			2,021


Interest attributed to preferred convertible notes		(8	)		(15	)		(8	)
Interest attributed to common convertible notes		(18	)		(32	)		(18	)

Net income for the period adjusted		1,337			1,320			1,995

Basic and diluted earnings per share

Income available to preferred stockholders		512			507			766
Income available to common stockholders		803			791			1,193
Income available to convertible notes linked to preferred shares		8			8			12
Income available to convertible notes linked to common shares		14			14			24
Weighted average number of shares outstanding (thousands of shares) — preferred shares		2,031,027			2,042,341			1,889,173
Weighted average number of shares outstanding (thousands of shares) — common shares		3,181,732			3,185,750			2,943,216
Treasury preferred shares linked to mandatorily convertible notes		30,295			30,295			30,295
Treasury common shares linked to mandatorily convertible notes		56,582			56,582			56,582

Total		5,299,636			5,314,968			4,919,266


Earnings per preferred share		0.25			0.25			0.41
Earnings per common share		0.25			0.25			0.41
Earnings per convertible notes linked to preferred share (*)		0.53			0.76			0.66
Earnings per convertible notes linked to common share (*)		0.57			0.81			0.74


(*)		Basic earnings per share only, as dilution assumes conversion.

Had the conversion of the convertible notes been included in the calculation of diluted earnings per share they would have generated the following dilutive effect as shown below:


	Three-month period ended (unaudited)
	March 31,		December		March 31,
	2009		31, 2008		2008

Income available to preferred stockholders		528		530		786
Income available to common stockholders		835		837		1,235
Weighted average number of shares outstanding (thousands of shares) — preferred shares		2,061,322		2,072,636		1,919,468
Weighted average number of shares outstanding (thousands of shares) — common shares		3,238,314		3,242,332		2,999,798
Earnings per preferred share		0.26		0.26		0.41
Earnings per common share		0.26		0.26		0.41

Other cumulative comprehensive income (deficit)


	Three-month period ended (unaudited)
	March 31,			December			March 31,
	2009			31, 2008			2008

Comprehensive income (deficit) is comprised as follows:
Net income attributable to Company’s stockholders		1,363			1,367			2,021
Cumulative translation adjustments		(104	)		(7,500	)		(205	)
Unrealized gain (loss) — available-for-sale securities, net of tax		96			96			(6	)
Surplus (deficit) accrued pension plan		(48	)		270			(15	)
Cash flow hedge		—			(28	)		(27	)
Noncontrolling interests:
Cumulative translation adjustments		222			(343	)		(51	)
Cash flow hedge		—			(26	)		(22	)
Net income (loss) attributable to noncontrolling interests		(40	)		27			24
Dividends and interest attributable to noncontrolling interests		(1	)		(1	)		—
Capitalization of stockholders advances		12			24			9

Total comprehensive income (deficit)		1,500			(6,114	)		1,728


Tax effect on other comprehensive income allocated to each component

Unrealized gain (loss) — available-for-sale securities, net of tax
Gross balance as of the period end		173			42			294
Tax (expense) benefit		(60	)		(25	)		(89	)

Net balance as of the period end		113			17			205

Surplus accrued pension plan
Gross balance as of the period end		(93	)		(63	)		108
Tax (expense) benefit		11			29			(48	)

Net balance as of the period end		(82	)		(34	)		60

15		Pension cost

		We previously disclosed in our consolidated financial statements for the year ended December 31, 2008, that we expected to contribute US$338 to our defined benefit pension plan in 2009. As of March 31, 2009, total contributions of US$81 had been made. We do not expect any significant change in our previous estimate.


	Three-month period ended (unaudited)
	March 31, 2009
	Overfunded			Underfunded			Underfunded other
	pension plans			pension plans			benefits
Service cost — benefits earned during the period		1			11			4
Interest cost on projected benefit obligation		44			54			18
Expected return on assets		(60	)		(43	)		—
Amortization of initial transition obligation		2			7			—
Net deferral		—			1			(7	)

Net periodic pension cost		(13	)		30			15


	Three-month period ended (unaudited)
	December 31, 2008
	Overfunded			Underfunded			Underfunded other
	pension plans			pension plans			benefits
Service cost — benefits earned during the period		3			13			5
Interest cost on projected benefit obligation		86			53			21
Expected return on assets		(143	)		(57	)		(5	)
Amortization of initial transition obligation		4			(2	)		6
Net deferral		(1	)		11			(2	)

Net periodic pension cost		(51	)		18			25


	Three-month period ended (unaudited)
	March 31, 2008
	Overfunded			Underfunded			Underfunded other
	pension plans			pension plans			benefits
Service cost — benefits earned during the period		2			16			6
Interest cost on projected benefit obligation		54			62			23
Expected return on assets		(90	)		(65	)		—
Amortization of initial transition obligation		3			—			(1	)
Net deferral		(1	)		—			—

Net periodic pension cost		(32	)		13			28

Long-term incentive compensation plan

In 2008, the Board of Directors approved a long-term incentive compensation plan, which was implemented in April 2008, over a three-year cycle (2008 to 2010).

Under the terms of the plan, the participants, restricted to certain executives, may elect to allocate part of their annual bonus to the plan. The allocation is applied to purchase preferred shares of Vale, through a predefined financial institution, at market conditions and with no benefit provided by Vale.

The shares purchased by each executive are unrestricted and may, at the participant’s discretion, be sold at any time. However, the shares must be held for a three-year period and the executive must be continually employed by Vale during that period. The participant then becomes entitled to receive from Vale a cash payment equivalent to the total amount of shares held, based on market rates. The total shares linked to the plan at March 31, 2009 and December 31, 2008, is 2,029,585 and 711,005, respectively.

Additionally, as long term incentive certain eligible executives have the opportunity to receive at the end of the triennial cycle a certain number of shares at market rates, based on an evaluation of their career and performance factors measured as an indicator of total return to stockholders.

We account for the compensation cost provided to our executives under this long-term incentive compensation plan, following the requirements of FAS 123(R) “Accounting for Stock-Based Compensation”. Liabilities are measured at each reporting date at fair value, based on market rates. Compensation costs incurred are recognized, over the defined three-year vesting period. At March 31, 2009 and December 31, 2008, we recognized a liability of US$18 and US$7, respectively, through the Statement of Income.

Commitments and contingencies

(a)

At March 31, 2009, we had extended guarantees related to revolving agreement to our affiliate TEAL, in the amount of US$43, the denominated currency U.S. Dollar with final maturity at August 31, 2009.

(b)

We provided certain guarantees on behalf of The Goro Project (Goro) pursuant to which we guaranteed payments due from Goro of up to a maximum amount of US$100 (“Maximum Amount”) in connection with an indemnity. We also provided additional guarantees covering the amounts payable by Goro regarding (a) amounts exceeding the Maximum Amount in connection with the indemnity and (b) certain other amounts under lease agreements.

Sumic Nickel Netherlands B.V. — Sumic, a 21% shareholder of Goro, has a put option to sell to Vale Inco 25%, 50%, or 100% of its share in Goro. The put option can be exercised if the defined cost of the initial Goro project exceeds US$4,200 at project rates and an agreement cannot be reached on how to proceed with the project.

We provided guarantees covering certain termination payments by Goro to a supplier under an electricity supply agreement (“ESA”) entered into in October 2004 for the Goro nickel-cobalt project. The amount of the termination payments guaranteed depends upon a number of factors, including whether any termination of the ESA occurs as a result of a default by Goro and the date of such early termination. If Goro defaults under the ESA prior to the anticipated start date for electricity supply, the termination payment, which currently is at its maximum amount, would be $145 million. Once the supply of electricity under the ESA to the project begins, the guaranteed amounts will decrease over the life of the ESA.

(c)

We and our subsidiaries are defendants in numerous legal actions in the normal course of business. Based on the advice of our legal counsel, management believes that the amounts recognized are sufficient to cover probable losses in connection with such actions.

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


	March 31, 2009 (unaudited)				December 31, 2008
	Provision for				Provision for
	contingencies		Judicial deposits		contingencies		Judicial deposits
Labor and social security claims		474		398		458		378
Civil claims		400		247		386		242
Tax — related actions		820		534		828		518
Others		15		4		13		3

		1,709		1,183		1,685		1,141

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

Civil — actions principally related to claims made against us by contractors in Brazil in connection with losses alleged to have been incurred by them as a result of various past Government economic plans during which full inflation indexation of contracts was not permitted, as well, as for accidents and land appropriations disputes.

Tax — tax-related actions principally comprise challenges initiated by us, on certain taxes on revenues and value added taxes and uncertain tax positions. We continue to vigorously pursue our interests in all the above actions but recognize that we probably will incur some losses in the final instance, for which we have made provisions.

Judicial deposits are made by us following the court requirements, in order to be entitled to either initiate or continue a legal action. These amounts are released to us, upon receipt of a final favorable outcome from the legal action; in the case of an unfavorable outcome, the deposits are transferred to the prevailing party.

Contingencies settled during the three-month periods ended March 31, 2009, December 31, 2008 and March 31, 2008 totaled US$18, US$7, US$128, respectively. Provisions recognized in the three-month periods ended March 31, 2009, December 31, 2008 and March 31, 2008, totaled US$49, US$100, US$331, respectively, classified as other operating expenses.

In addition to the contingencies for which we have made provisions we are defendants in claims where in our opinion, and based on the advice of our legal counsel, the likelihood of loss is possible but not probable, in the total amount of US$2,419 at March 31, 2009, and for which no provision has been made (December 31, 2008 – US$2,476).

(d)

At the time of our privatization in 1997, we issued shareholder revenue interest instruments known in Brazil as “debentures participativas” (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 could be able to derive from exploiting our mineral resources.

In April 2009 (subsequent period) we paid remuneration on these debentures of US$3.

(e)

Asset retirement obligations:

We use various judgments and assumptions when measuring our 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 in the provisions for asset retirement obligations are as follows:


	Three-month period ended (unaudited)
	March 31, 2009			December 31, 2008
Beginning of period		887			1,000
Accretion expense		6			50
Liabilities settled in the current period		(3	)		(2	)
Revisions in estimated cash flows		(9	)		(45	)
Cumulative translation adjustment		(4	)		(116	)

End of period		877			887


Current liabilities		38			48
Long-term liabilities		839			839

Total		877			887

Fair value disclosure of financial assets and liabilities

In September 2006, the FASB issued SFAS 157, “Fair Value Measurements”, which defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. SFAS 157 does not require any new fair value measurements, but provides guidance on how to measure fair value by providing a fair value hierarchy used to classify the source of the information.

In February 2007, the FASB issued SFAS 159, “The Fair Value Option for Financial Assets and Financial Liabilities — including an amendment of FASB Statement 115”. SFAS 159 permits the choice of measuring financial instruments and certain other items at fair value. SFAS 159 is effective for financial statements issued for fiscal years beginning after November 15, 2007.

At January 1, 2008, the Company adopted SFAS 159 and elected not to apply the provisions of SFAS 159 to its eligible financial assets and financial liabilities on the date of adoption. Accordingly, the initial application of both SFAS 157 and SFAS 159 had no effect on the Company.

Under SFAS 157, the inputs used to measure fair value must be classified into one of three levels as follows:

Level 1 — Quoted prices in an active market for identical assets or liabilities;

Level 2 — Observable inputs other than Level 1, quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, and model-derived prices whose inputs are observable or whose significant value drivers are observable; and

Level 3 — Assets and liabilities whose significant value drivers are unobservable.

The valuation of assets measured at fair value in the Company’s Consolidated Balance Sheet at March 31, 2009 is summarized below (unaudited):


				Fair value measurements
				Quoted prices in active
				markets for identical		Significant other			Significant
				assets or liabilities,		observable inputs			unobservable inputs
	Carrying amount			(Level 1)		(Level 2)			(Level 3)
Available-for-sale securities		2,714			2,714		—			—

Unrealized losses on derivatives		(548	)		—		(548	)		—
Other financial liabilities		(361	)		—		(361	)		—

During the three-month period ended March 31, 2009, except for the accounting of the purchase of Diamond Coal and Green Mineral Resources, whose are still in process (Note 5), there was no other assets or liabilities measured at fair value on a nonrecurring basis.

Our long-term debt is measured and reported at amortized cost, however its fair value measurement at March 31, 2009 is as follows (unaudited):


	Carrying amount (*)		Fair value		Level 1		Level 2

Long-term debt		17,976		17,355		8,521		8,834


(*)		Less accrued charges US$322

The carrying amount of our current financial instruments generally approximates fair market value because of the short-term maturity or frequent pricing of these instruments.

The market value of our listed long-term investments, where available, is disclosed in Note 10.

Segment and geographical information

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

Consolidated net income and principal assets are reconciled as follows:

Results by segment — before eliminations (aggregated)


	Three-month period ended (unaudited)
	March 31, 2009																					December 31, 2008																					March 31, 2008
				() Non*																					() Non*																					() Non*
	Ferrous			ferrous			Aluminum			Logistics			Others			Eliminations			Consolidated			Ferrous			ferrous			Aluminum			Logistics			Others			Eliminations			Consolidated			Ferrous			ferrous			Aluminum			Logistics			Others			Eliminations			Consolidated

RESULTS
Gross revenues — Foreign		5,988			1,051			599			5			154			(2,987	)		4,810			7,540			1,416			1,001			6			212			(3,848	)		6,327			5,578			2,861			859			21			72			(2,727	)		6,664
Gross revenues — Domestic		252			107			129			201			58			(136	)		611			685			71			179			303			53			(176	)		1,115			880			91			193			365			56			(201	)		1,384
Cost and expenses		(4,048	)		(1,028	)		(720	)		(177	)		(138	)		3,123			(2,988	)		(5,764	)		(1,515	)		(929	)		(217	)		(165	)		4,024			(4,566	)		(4,500	)		(1,302	)		(925	)		(244	)		(134	)		2,928			(4,177	)
Research and development		(42	)		(68	)		—			(16	)		(63	)		—			(189	)		(107	)		(112	)		—			(17	)		(59	)		—			(295	)		(50	)		(70	)		—			(20	)		(50	)		—			(190	)
Depreciation, depletion and amortization		(197	)		(280	)		(49	)		(24	)		(9	)		—			(559	)		(171	)		(318	)		(38	)		(26	)		(15	)		—			(568	)		(288	)		(399	)		(42	)		(30	)		(7	)		—			(766	)
Impairment of goodwill		—			—			—			—			—			—			—			—			(950	)		—			—			—			—			(950	)		—			—			—			—			—			—			—

Operating income		1,953			(218	)		(41	)		(11	)		2			—			1,685			2,183			(1,408	)		213			49			26			—			1,063			1,620			1,181			85			92			(63	)		—			2,915
Financial income		660			163			3			1			1			(703	)		125			883			154			10			3			1			(804	)		247			665			217			3			2			—			(832	)		55
Financial expenses		(664	)		(298	)		(14	)		(6	)		(8	)		703			(287	)		(825	)		(309	)		(18	)		(10	)		(41	)		804			(399	)		(988	)		(379	)		(20	)		(3	)		(2	)		832			(560	)
Gains (losses) on derivatives, net		34			(16	)		—			—			—			—			18			(635	)		(15	)		64			—			—			—			(586	)		(46	)		(123	)		(125	)		—			—			—			(294	)
Foreign exchange and indexation gains (losses), net		29			(16	)		10			(1	)		(6	)		—			16			35			25			(206	)		12			(107	)		—			(241	)		112			(28	)		18			(2	)		(12	)		—			88
Gain on sale of investments		—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			80			—			—			—			—			80
Equity in results of affiliates and joint ventures and change in provision for losses on equity investments		54			—			(1	)		21			(2	)		—			72			80			(38	)		22			93			(32	)		—			125			52			—			14			34			19			—			119
Income taxes		(466	)		154			19			(4	)		(9	)		—			(306	)		968			203			12			4			(2	)		—			1,185			(21	)		(331	)		(17	)		—			11			—			(358	)
Net income (loss) attributable to noncontrolling interests		10			18			15			—			(3	)		—			40			(6	)		(6	)		(20	)		—			5			—			(27	)		2			(46	)		20			—			—			—			(24	)

Net income attributable to Company’s stockholders		1,610			(213	)		(9	)		—			(25	)		—			1,363			2,683			(1,394	)		77			151			(150	)		—			1,367			1,396			571			(22	)		123			(47	)		—			2,021


Sales classified by geographic destination:
Foreign market
America, except United States		44			120			159			—			9			(84	)		248			335			116			348			—			—			(271	)		528			323			341			192			1			—			(203	)		654
United States		11			182			37			—			8			(18	)		220			44			259			108			—			9			(70	)		350			80			583			104			1			—			(75	)		693
Europe		1,169			246			279			—			4			(884	)		814			2,715			464			353			(2	)		—			(1,639	)		1,891			1,883			689			373			16			1			(1,067	)		1,895
Middle East/Africa/Oceania		281			38			34			—			—			(229	)		124			543			15			50			—			54			(304	)		358			240			58			44			—			—			(130	)		212
Japan		511			73			77			—			81			(258	)		484			1,609			230			142			—			74			(703	)		1,352			618			341			136			1			39			(260	)		875
China		3,483			186			13			5			4			(1,268	)		2,423			1,240			127			—			8			—			(420	)		955			1,874			296			10			1			—			(796	)		1,385
Asia, other than Japan and China		489			206			—			—			48			(246	)		497			1,054			205			—			—			75			(441	)		893			560			553			—			1			32			(196	)		950

		5,988			1,051			599			5			154			(2,987	)		4,810			7,540			1,416			1,001			6			212			(3,848	)		6,327			5,578			2,861			859			21			72			(2,727	)		6,664
Domestic market		252			107			129			201			58			(136	)		611			685			71			179			303			53			(176	)		1,115			880			91			193			365			56			(201	)		1,384

		6,240			1,158			728			206			212			(3,123	)		5,421			8,225			1,487			1,180			309			265			(4,024	)		7,442			6,458			2,952			1,052			386			128			(2,928	)		8,048


(*)		Other than Aluminum.

Operating segment — after eliminations (disaggregated)


																		As of and for the three-month period ended (unaudited)
																		March 31, 2009
																								Property,		Addition to
																								plant and		property,
																								equipment,		plant and
																		Depreciation,						net and		equipment
	Revenues						Value			Net		Cost and						depletion and			Operating			intangible		and
	Foreign		Domestic		Total		added tax			revenues		expenses			Net			amortization			income			assets		intangible		Investments
Ferrous
Iron ore		2,964		165		3,129		(32	)		3,097		(998	)		2,099			(181	)		1,918			15,044		736		44
Pellets		241		32		273		(8	)		265		(219	)		46			(10	)		36			645		27		756
Manganese		13		2		15		—			15		(18	)		(3	)		(2	)		(5	)		18		1		—
Ferroalloys		51		27		78		(7	)		71		(60	)		11			(2	)		9			189		18		—
Pig iron		11		—		11		—			11		(13	)		(2	)		—			(2	)		144		16		—

		3,280		226		3,506		(47	)		3,459		(1,308	)		2,151			(195	)		1,956			16,040		798		800

Non ferrous
Nickel and other products (*)		860		3		863		—			863		(833	)		30			(253	)		(223	)		21,420		425		71
Potash		—		65		65		(2	)		63		(28	)		35			(3	)		32			159		—		—
Kaolin		30		9		39		(2	)		37		(34	)		3			(6	)		(3	)		209		—		—
Copper concentrate		79		28		107		(6	)		101		(106	)		(5	)		(17	)		(22	)		3,609		189		—
Aluminum products		408		34		442		(8	)		434		(426	)		8			(50	)		(42	)		3,837		41		110

		1,377		139		1,516		(18	)		1,498		(1,427	)		71			(329	)		(258	)		29,234		655		181

Logistics
Railroads		—		157		157		(22	)		135		(125	)		10			(21	)		(11	)		1,457		21		347
Ports		—		42		42		(6	)		36		(34	)		2			(5	)		(3	)		1,441		37		—
Ships		—		—		—		—			—		—			—			—			—			373		—		97

		—		199		199		(28	)		171		(159	)		12			(26	)		(14	)		3,271		58		444

Others		153		47		200		(4	)		196		(186	)		10			(9	)		1			3,229		177		1,309

		4,810		611		5,421		(97	)		5,324		(3,080	)		2,244			(559	)		1,685			51,774		1,688		2,734


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

Operating segment — after eliminations (disaggregated)


																					As of and for the three-month period ended (unaudited)
																					December 31, 2008
																											Property,		Addition to
																											plant and		property,
																											equipment,		plant and
																		Depreciation,									net and		equipment
	Revenues						Value			Net		Cost and						depletion and						Operating			intangible		and
	Foreign		Domestic		Total		added tax			revenues		expenses			Net			amortization			Impairment			income			assets		intangible		Investments
Ferrous
Iron ore		3,105		431		3,536		(64	)		3,472		(1,497	)		1,975			(147	)		—			1,828			14,595		1,360		47
Pellets		914		114		1,028		(25	)		1,003		(522	)		481			(19	)		—			462			645		76		708
Manganese		19		5		24		(4	)		20		(17	)		3			—			—			3			18		1		—
Ferroalloys		92		83		175		(21	)		154		(69	)		85			(3	)		—			82			166		18		—
Pig iron		—		—		—		—			—		—			—			—			—			—			144		116		—

		4,130		633		4,763		(114	)		4,649		(2,105	)		2,544			(169	)		—			2,375			15,568		1,571		755

Non ferrous
Nickel and other products (*)		1,111		7		1,118		—			1,118		(1,298	)		(180	)		(295	)		(950	)		(1,425	)		21,729		1,233		53
Potash		—		23		23		(2	)		21		(15	)		6			(1	)		—			5			159		35		—
Kaolin		35		10		45		(2	)		43		(40	)		3			(5	)		—			(2	)		199		2		—
Copper concentrate		73		30		103		(6	)		97		(285	)		(188	)		(17	)		—			(205	)		3,543		89		—
Aluminum products		713		66		779		(3	)		776		(543	)		233			(38	)		—			195			3,831		115		140

		1,932		136		2,068		(13	)		2,055		(2,181	)		(126	)		(356	)		(950	)		(1,432	)		29,461		1,474		193

Logistics
Railroads		—		240		240		(40	)		200		(152	)		48			(22	)		—			26			1,431		10		326
Ports		—		70		70		(10	)		60		(41	)		19			(4	)		—			15			1,441		113		—
Ships		—		—		—		—			—		—			—			—			—			—			374		342		94

		—		310		310		(50	)		260		(193	)		67			(26	)		—			41			3,246		465		420

Others		265		36		301		(10	)		291		(195	)		96			(17	)		—			79			1,054		179		1,040

		6,327		1,115		7,442		(187	)		7,255		(4,674	)		2,581			(568	)		(950	)		1,063			49,329		3,689		2,408


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

Operating segment — after eliminations (disaggregated)


																		As of and for the three-month period ended (unaudited)
																		March 31, 2008
																								Property,		Addition to
																								plant and		property,
																								equipment,		plant and
																		Depreciation,						net and		equipment
	Revenues						Value			Net		Cost and						depletion and			Operating			intangible		and
	Foreign		Domestic		Total		added tax			revenues		expenses			Net			amortization			income			assets		intangible		Investments
Ferrous
Iron ore		2,606		510		3,116		(73	)		3,043		(1,467	)		1,576			(245	)		1,331			17,304		664		61
Pellets		506		173		679		(40	)		639		(470	)		169			(29	)		140			766		12		798
Manganese		31		9		40		(2	)		38		(20	)		18			(1	)		17			82		1		—
Ferroalloys		177		113		290		(28	)		262		(124	)		138			(6	)		132			160		2		—
Pig iron		29		—		29		—			29		(14	)		15			(2	)		13			198		—		—

		3,349		805		4,154		(143	)		4,011		(2,095	)		1,916			(283	)		1,633			18,510		679		859

Non ferrous
Nickel and other products (*)		2,378		13		2,391		—			2,391		(980	)		1,411			(372	)		1,039			23,376		481		148
Potash		—		64		64		(4	)		60		(29	)		31			(7	)		24			218		3		—
Kaolin		42		11		53		(2	)		51		(56	)		(5	)		(7	)		(12	)		264		7		—
Copper concentrate		222		1		223		—			223		(106	)		117			(17	)		100			1,898		52		—
Aluminum products		561		85		646		(17	)		629		(510	)		119			(42	)		77			4,703		104		99

		3,203		174		3,377		(23	)		3,354		(1,681	)		1,673			(445	)		1,228			30,459		647		247

Logistics
Railroads		—		296		296		(37	)		259		(172	)		87			(25	)		62			1,748		13		375
Ports		11		55		66		(5	)		61		(45	)		16			(6	)		10			1,677		44		—
Ships		—		—		—		—			—		—			—			—			—			34		—		110

		11		351		362		(42	)		320		(217	)		103			(31	)		72			3,459		57		485

Others		101		54		155		(8	)		147		(158	)		(11	)		(7	)		(18	)		2,951		242		1,351

		6,664		1,384		8,048		(216	)		7,832		(4,151	)		3,681			(766	)		2,915			55,379		1,625		2,942


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

Derivative financial instruments

Risk management policy

Vale risk management strategy encompasses an enterprise risk management approach where we, evaluate not only market risk impacts on the business but also the impacts arising from credit and operating risks. An enterprise wide risk management approach is considered by us to be mandatory for Vale as traditional market risk measures, such as VaR (Value at Risk), is not sufficient to evaluate the group exposures once our main goal is to avoid a possible lack of cash to fulfill our future obligations and needs.

We also consider, when evaluating our exposures, the correlations between different market risk factors. By doing so we are able to evaluate the net impact in cash flows from our corporate strategy, considering the natural economic hedges presented in the Company’s portfolio. Using this framework we identify a natural diversification of our portfolio due to the mix of products and currencies. This diversification benefit implies in a natural reduction of the overall risk of the Company. Any risk mitigation strategy is only implemented, whenever necessary, if it contributes significantly for the reduction of the volatility in our cash flows beyond the levels initially observed, and, to acceptable levels of risk.

Vale considers that the effective management of risk is a key objective to support its growth strategy and financial flexibility. The risk reduction on Vale’s future cash flow contributes to a better perception of the Company’s credit quality, improving its ability to access different markets. As a commitment to the risk management strategy the Board of Directors has established an enterprise-wide risk management policy and a risk management committee. The risk management policy determines that Vale must regularly evaluate its cash flow risks and, risk mitigation strategies. Whenever necessary mitigation strategies should be put in place to reduce cash flow volatility. The executive board is responsible for the evaluation and approval of long term risk mitigation strategies recommended by the risk management committee.

The risk management committee assists our executive officers in overseeing and reviewing our enterprise risk management activities including the principles, policies, process and procedures, and instruments employed to manage risk. The risk management committee reports periodically to the executive board on how risks have been monitored, what are the most important risks we are exposed to and their impact in cash flows.

The risk management policy and the risk management norms, that complement the normative of risk management governance model, explicitly prohibit speculative transactions with derivatives and require the diversification of operations and counterparties.

Besides the risk management governance model, Vale has in place a well defined corporate governance structure. The recommendation and execution of the derivative transactions are implemented by different and independent areas. It is the responsibility of the risk management department to define and propose to the risk management committee, market risk mitigation strategies, consistent with Vale’s and it’s wholly owned subsidiaries corporate strategy. It is the responsibility of the finance department the execution of the risk mitigation strategies though the use of derivatives. The independence of the areas guarantees an effective control on these operations.

The consolidated market risk exposure and the portfolio of derivatives is monthly measured and monitored in order to evaluate the financial results and possible market risk impacts in our cash flow, and guarantee that the initial goals will be achieved. The mark-to-market on the derivatives portfolio is reported weekly to management.

All derivatives positions were recognized in our balance sheet at fair value, and gains or losses in fair value were accrued in Vale’s current earnings.

Considering the nature of Vale’s business and operations, the main market risk factors which the Company is exposed are:

	•		Interest rates;

	•		Foreign exchange;

	•		Products prices and input costs

Foreign exchange and interest rate risk

Vale’s cash flows are exposed to volatility of several different currencies. While most of our product prices are indexed to U.S. Dollars, representing around 94% of the total revenue, most of our costs, disbursements and investments are indexed to currencies other than the U.S. Dollar, mainly Brazilian Real and Canadian Dollars.

Derivatives instruments may be used in order to reduce Vale’s potential cash flow volatility arising from the currencies mismatch between the currencies witch the debt is denominated and revenues are generated. Vale’s foreign exchange and interest rate derivative portfolio consists, basically, of interest rate swaps to convert floating cash flows in Brazilian Real to fixed or floating U.S. Dollar cash flows, without any leverage.

Vale is also exposed to interest rate risks on loans and financings. Our U.S. Dollar denominated floating rate debt consists mainly of loans including export pre-payments, commercial banks and multilateral organizations loans. In general, our U.S. Dollars floating rate debt is subject to changes in the LIBOR (London Interbank Offer Rate in U.S. Dollars). To mitigate the impact of the interest rate volatility on its cash flows, Vale takes advantage of natural hedges resulting from the positive correlation of metal prices and U.S. Dollar floating rates. When natural hedges are not present, we may opt to realize the same effect by using financial instruments.

Our Real denominated debt subject to floating interest rates are debentures, loans obtained from Banco Nacional de Desenvolvimento Econômico e Social (BNDES) and property and services acquisition financing in the Brazilian market. These debts are mainly linked to CDI and TJLP.

The swap transactions entered into have settlement dates similar to the interest and principal payment dates, taking into account the liquidity restrictions of the market. At each settlement date, the results on the swap transactions partially offset the impact of the U.S. Dollar / Brazilian Real exchange rate in our obligations, contributing to a stable flow of cash disbursements in U.S. Dollars for interest and/or principal payment of our Real denominated debt.

In the event of an appreciation (depreciation) of the Brazilian Real against U.S. Dollar, the negative (positive) impact on our Real denominated debt obligations (interest and/or principal payment) measured in U.S. Dollars will be almost totally offset by a positive (negative) effect from any existing swap transaction, regardless of the U.S. Dollar / Brazilian Real exchange rate on the payment date.

We have other exposures associated with our outstanding debt portfolio. In order to reduce cash flow volatility associated with a financing from KFW (Kreditanstalt Für Wiederaufbau) indexed to Euribor, Vale entered into a swap contract where the cash flows in Euros are converted into cash flows in U.S. Dollars.

In order to reduce the cash-flow volatility associated with the foreign exchange exposure from coal fixed price sales, Vale forward purchased Australian Dollars.

Product price risk

Vale is also exposed to several market risks associated with global commodities prices volatilities.

Currently, derivative transactions entered into related to commodities prices are nickel, copper, natural gas and bunker oil derivatives and all have the same purpose of mitigating Vale’s cash flow volatility.

Nickel — The Company has purchased nickel future contracts in the London Metal Exchange (LME), with the purpose of maintaining its exposure to nickel price variation, regarding the fact that, in some cases, the commodity is sold at a fixed price to some customers. Vale has also sold nickel futures in the LME, in order to minimize the risk of mismatch between the pricing on the costs of intermediate products and finished goods.

Copper — Vale Inco Ltd., Vale’s wholly-owned subsidiary, makes use of hedging to reduce the cash flow volatility due to the quotation period mismatch between the pricing period of copper scrap purchase and the pricing period of final products sale to the clients.

Natural gas — Vale uses natural gas swap contracts to minimize the impact of price fluctuation of this input cost in the cash flow.

Bunker Oil — In order to reduce the impact of bunker oil price fluctuation on Vale’s freight hiring and consequently on Vale’s cash flow, Vale implemented a hedge program that consists of forward purchases and swaps.

Embedded derivatives — In addition to the contracts mentioned above, Vale Inco Ltd., Vale’s wholly-owned subsidiary, has nickel concentrate and raw materials purchase agreements, where there are provisions based on nickel and copper prices behavior. These provisions are considered embedded derivatives. There is also an embedded derivative related to energy in our subsidiary Albras on which we have no unrealized gain as of March 31, 2009 and December 31, 2008.

The assets and liabilities balances of derivatives measured at fair value and the effects of its recognition in earnings are shown on the following tables:

March 31, 2009 (unaudited)

December 31, 2008

Balance Sheet

Outstanding Balances - Assets

Location

Fair Value

Location

Fair Value

Derivatives not designated as hedge under SFAS 133

Foreign exchange and interest rate risk

EURO floating rate vs. USD floating rate swap

long-term

AUD floating rate vs. fixed USD rate swap

long-term

Commodities price risk

Nickel

Purchase program

short-term

Embedded derivatives:

For nickel concentrate costumer sales

long-term

Customer raw material contracts

short-term

long-term

Total Assets


	March 31, 2009 (unaudited)				December 31, 2008
	Balance Sheet				Balance Sheet
Outstanding Balances - Liabilities	Location	Fair Value			Location	Fair Value

Derivatives not designated as hedge under SFAS 133

Foreign exchange and interest rate risk

CDI vs. USD fixed rate swap	long-term		(406	)	long-term		(373	)
CDI vs. USD floating rate swap	long-term		(40	)	long-term		(95	)
TJLP vs. USD fixed rate swap	long-term		(70	)	long-term		(62	)
TJLP vs. USD floating rate swap	long-term		(39	)	long-term		(30	)

USD floating rate vs. USD fixed rate swap	long-term		(12	)	long-term		(14	)

Commodities price risk

Nickel
Fixed price program	long-term		(48	)	long-term		(50	)
Purchase program					long-term		(7	)

Natural gas hedge	short-term		(3	)	long-term		(2	)


Total Liabilities			(618	)			(633	)

The following table presents the unaudited effects of derivatives for the three-month period ended:


	Amount of gain or (loss) recognized in																Location of gain or	Amount of gain or (loss) reclassified from
	financial income (expense)									Amount of gain or (loss) recognized in OCI							(loss) reclassified from	accumulated OCI into earnings
	March 31,			December			March 31,			March 31,		December		March 31,			accumulated OCI into	March 31,		December		March 31,
	2009			31, 2008			2008			2009		31, 2008		2008			earnings	2009		31, 2008		2008

Derivatives not designated as hedge under SFAS 133

Foreign exchange and interest rate risk

CDI vs. USD fixed rate swap		—			16			—
Swap BRL denominated Brazilian payrol into USD		—			—			14
CDI & TJLP vs. USD fixed and floating rate swap		32			(656	)		(28	)
EURO floating rate vs. USD floating rate swap		(1	)		2			1
USD floating rate vs. USD fixed rate swap		(1	)		(10	)		(7	)
AUD floating rate vs. fixed USD rate swap		3			—			—

Commodities price risk

Nickel
Fixed price program		(18	)		(39	)		26
Purchase program		10			7			(10	)

Copper
Purchased scrap protection program		—			10			(72	)
Strategic hedging program		—			39			(45	)

Platinum		—			(2	)		(16	)

Gold		—			(12	)		(8	)

Natural gas		(3	)		(1	)		10

Embedded derivatives:
For nickel concentrate costumer sales		2			(1	)		(36	)
Customer raw material contracts		(6	)		(3	)		(16	)
Energy — Aluminum options		—			21			(28	)

Derivatives designated as hedge under SFAS 133

Aluminum		—			43			(79	)		—		1		(43	)	Cost of sales		—		51		—

		18			(586	)		(294	)		—		1		(43	)	Cost of sales		—		51		—

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

Final maturity dates for the above instruments are as follows:


Interest rates/ Currencies		December 2019
Bunker Oil		April 2010
Natural Gas		October 2009
Copper		July 2009
Nickel		May 2011

Under SFAS 133 “Accounting for Derivative Financial Instruments and Hedging Activities”, all derivatives, whether designated in hedging relationships or not, are required to be recorded in the balance sheet at fair value and the gain or loss in fair value is included in current earnings, unless if qualified as hedge accounting. A derivative must be designated in a hedging relationship in order to qualify for hedge accounting. These requirements include a determination of what portions of hedges are deemed to be effective versus ineffective. In general, a hedging relationship is effective when a change in the fair value of the derivative is offset by an equal and opposite change in the fair value of the underlying hedged item. In accordance with these requirements, effectiveness tests are performed in order to assess effectiveness and quantify ineffectiveness for all designated hedges.

At March 31, 2009, we had outstanding cash flow hedges. A cash flow hedge is a hedge of the exposure to variability in expected future cash flows that is attributable to a particular risk such as a forecasted purchase or sale. If a derivative is designated as a cash flow hedge, the effective portions of the changes in the fair value of the derivative are recorded in other comprehensive income and are recognized in earnings when the hedged item affects earnings. Ineffective portions of changes in the fair value of the derivatives designated as hedges are recognized in earnings. If a portion of a derivative contract is excluded for purposes of effectiveness testing, such as time value, the value of such excluded portion is included in earnings. At March 31, 2009, December 31, 2008 and March 31, 2008, the unrealized net gain and (losses) in respect of derivative instruments which were not qualified for hedge accounting amounted to US$18, US$(586) and US$(294), respectively.

Supplemental Financial Information (unaudited)

The following unaudited information provides additional details in relation to certain financial ratios.

EBITDA — Earnings Before Financial Income (Expenses), Noncontrolling Interests, Gain on Sale of Investments, Foreign Exchange and Indexation Gains (Losses), Equity in Results of Affiliates and Joint Ventures and Change in Provision for Losses on Equity Investments, Income Taxes, Depreciation and Amortization

	(a)		EBITDA represents operating income plus depreciation, amortization and depletion plus impairment plus dividends received from equity investees.

	(b)		EBITDA is not a U.S. 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 U.S. GAAP measure of operating cash flows, our management uses it to measure our operating performance and financial analysts in evaluating our business commonly use it.

Selected financial indicators for the main affiliates and joint ventures are available on our website, www.vale.com, under “investor relations”

Indexes on Vale’s Consolidated Debt (Supplemental information — unaudited)


	Three-month period ended
	March 31, 2009			December 31, 2008			March 31, 2008

Current debt
Current portion of long-term debt — unrelated parties		650			633			1,301
Short-term debt		48			—			291
Loans from related parties		68			77			22


		766			710			1,614
Long-term debt
Long-term debt — unrelated parties		17,648			17,535			18,909

Gross debt (current plus long-term debt)		18,414			18,245			20,523


Interest paid over:
Short-term debt		—			—			(5	)
Long-term debt		(277	)		314			(279	)

Interest paid		(277	)		314			(284	)
EBITDA		2,281			2,697			3,729
Company stockholders’ equity		43,827			42,556			35,018
LTM (1) EBITDA / LTM (1) Interest paid		13.96			15.02			11.52
Gross Debt / LTM (1) EBITDA		1.05			0.96			1.26
Gross debt / Equity Capitalization (%)		30			13			37

Financial expenses
Interest expense		(239	)		(334	)		(313	)
Labor and civil claims and tax-related actions		(16	)		(23	)		(45	)
Others		(32	)		(42	)		(202	)

		(287	)		(399	)		(560	)


Financial income
Cash and cash equivalents		114			217			29
Others		11			30			26

		125			247			55


Derivatives		18			(586	)		(294	)


Financial income (expenses), net		(144	)		(738	)		(799	)

Foreign exchange and indexation gain (losses), net
Cash and cash equivalents		(69	)		1,427			(6	)
Loans		113			(2,266	)		164
Others		(28	)		598			(70	)

		16			(241	)		88

Financial result, net		(128	)		(979	)		(711	)

Calculation of EBITDA (Supplemental information — unaudited)


	Three-month period ended
	March 31, 2009			December 31, 2008			March 31, 2008

Operating income		1,685			1,063			2,915
Depreciation		559			568			766
Impairment		—			950			—

		2,244			2,581			3,681
Dividends received		37			116			48

EBITDA		2,281			2,697			3,729


Net operating revenues		5,324			7,255			7,832
Margin EBITDA		42.8	%		37.2	%		47.6	%

Adjusted EBITDA x Operating Cash Flows (Supplemental information — unaudited)


	Three-month period ended
	March 31, 2009						December 31, 2008						March 31, 2008
				Operating						Operating						Operating
	EBITDA			cash flows			EBITDA			cash flows			EBITDA			cash flows
Net income attributable to Company’s stockholders		1,363			1,363			1,367			1,367			2,021			2,021
Income tax — deferred		(171	)		(171	)		(219	)		(219	)		(296	)		(296	)
Income tax — current		477			—			(966	)		—			654			—
Equity in results of affiliates and joint ventures and other investments		(72	)		(72	)		(125	)		(125	)		(119	)		(119	)
Foreign exchange and indexation gains, net		(16	)		(57	)		241			740			(112	)		(122	)
Financial expenses, net		144			3			738			(3	)		823			81
Noncontrolling interests		(40	)		(40	)		27			27			24			24
Gain on sale of investments		—			—			—			—			(80	)		(80	)
Net working capital		—			536			—			2,259			—			(1,228	)
Others		—			7			—			613			—			313

Operating income		1,685			1,569			1,063			4,659			2,915			594

Depreciation, depletion and amortization		559			559			568			568			766			766
Impairment of goodwill		—			—			950			950			—			—
Dividends received		37			37			116			116			48			48

		2,281			2,165			2,697			6,293			3,729			1,408


Operating cash flows					2,165						6,293						1,408

Income tax					477						(966	)					654
Foreign exchange and indexation gains (losses)					41						(499	)					10
Financial expenses					141						741						742
Net working capital					(536	)					(2,259	)					1,228
Others					(7	)					(613	)					(313	)

EBITDA					2,281						2,697						3,729

Board of Directors, Fiscal Council, Advisory committees and Executive Officers


Board of Directors		Governance and Sustainability Committee
		Jorge Luiz Pacheco
Sérgio Ricardo Silva Rosa		Renato da Cruz Gomes
Chairman		Ricardo Simonsen

Mário da Silveira Teixeira Júnior		Fiscal Council
Vice-President		Marcelo Amaral Moraes

Eduardo Fernando Jardim Pinto		Chairman
Francisco Augusto da Costa e Silva
Jorge Luiz Pacheco		Aníbal Moreira dos Santos
José Ricardo Sasseron		Antônio José de Figueiredo Ferreira
Ken Abe		Bernard Appy
Luciano Galvão Coutinho
Oscar Augusto de Camargo Filho		Alternate
Renato da Cruz Gomes		Cícero da Silva
Sandro Kohler Marcondes		Marcus Pereira Aucélio
		Oswaldo Mário Pêgo de Amorim Azevedo

Alternate
		Executive Officers
Deli Soares Pereira
Hidehiro Takahashi		Roger Agnelli
João Moisés de Oliveira		Chief Executive Officer
Luiz Augusto Ckless Silva
Luiz Carlos de Freitas		Carla Grasso
Luiz Felix Freitas		Executive Officer for Human Resources and Corporate
Paulo Sérgio Moreira da Fonseca		Services
Raimundo Nonato Alves Amorim
Rita de Cássia Paz Andrade Robles		Eduardo de Salles Bartolomeo
Wanderlei Viçoso Fagundes		Executive Officer for Logistics, Engineering and Project
		Management

Advisory Committees of the Board of Directors
		Fabio de Oliveira Barbosa
Controlling Committee		Chief Financial Officer and Investor Relations
Luiz Carlos de Freitas
Paulo Ricardo Ultra Soares		José Carlos Martins
Paulo Roberto Ferreira de Medeiros		Executive Officer for Ferrous Minerals

Executive Development Committee		Tito Botelho Martins
João Moisés de Oliveira		Executive Officer for Non Ferrous
José Ricardo Sasseron
Oscar Augusto de Camargo Filho

Strategic Committee
Roger Agnelli
Mário da Silveira Teixeira Júnior
Oscar Augusto de Camargo Filho
Sérgio Ricardo Silva Rosa		Marcus Vinícius Dias Severini
		Chief Officer of Accounting and Control Department

Finance Committee
Fabio de Oliveira Barbosa		Vera Lúcia de Almeida Pereira Elias
Ivan Luiz Modesto Schara		Chief Accountant
Luiz Maurício Leuzinger		CRC-RJ — 043059/O-8
Wanderlei Viçoso Fagundes

Equity Investee Information — 03/31/2009

Aluminum Area — Valesul (Additional information — unaudited)


		2009												2008
		As of and for the three-month periods ended												As of and for the three-month periods ended
Information		March 31			June 30		September 30		December 31		Total			March 31			June 30			September 30			December 31			Total


Quantity sold — external market	MT (thousand)		2			—		—		—		2			4			7			6			4			21
Quantity sold — internal market	MT (thousand)		13			—		—		—		13			16			15			19			16			66

Quantity sold — total	MT (thousand)		15			—		—		—		15			20			22			25			20			87


Average sales price — external market	US$		2,392.81			—		—		—		2,392.81			2,653.70			2,846.14			2,679.23			2,818.91			2,861.40
Average sales price — internal market	US$		2,133.06			—		—		—		2,133.06			3,786.95			4,168.23			3,321.93			2,575.30			3,695.60
Average sales price — total	US$		2,167.50			—		—		—		2,167.50			3,560.30			3,747.56			3,148.89			2,624.02			3,494.25


Stockholders’ equity	US$		271			—		—		—		271			391			453			330			272			272


Net operating revenues	US$		26			—		—		—		26			58			70			81			44			253
Cost of products	US$		(27	)		—		—		—		(27	)		(48	)		(55	)		(75	)		(38	)		(216	)
Other expenses / revenues	US$		(3	)		—		—		—		(3	)		(4	)		(9	)		(6	)		(5	)		(24	)
Depreciation, amortization and depletion	US$		3			—		—		—		3			4			4			4			3			15

EBITDA	US$		(1	)		—		—		—		(1	)		10			10			4			4			28
Depreciation, amortization and depletion	US$		(3	)		—		—		—		(3	)		(4	)		(4	)		(4	)		(3	)		(15	)

EBIT	US$		(4	)		—		—		—		(4	)		6			6			—			1			13
Net financial result	US$	—				—		—		—		—			(1	)		—			7			4			10

Income before income tax and social contribution	US$		(4	)		—		—		—		(4	)		5			6			7			5			23
Income tax and social contribution	US$	—				—		—		—		—			(2	)		(4	)		(3	)		(2	)		(11	)

Net income	US$		(4	)		—		—		—		(4	)		3			2			4			3			12

Aluminum Area — MRN (Additional information — unaudited)


		2009												2008
		As of and for the three-month periods ended												As of and for the three-month periods ended
Information		March 31			June 30		September 30		December 31		Total			March 31			June 30			September 30			December 31			Total

Quantity sold — external market	MT (thousand)		798			—		—		—		798			1,369			1,573			1,496			1,557			5,995
Quantity sold — internal market	MT (thousand)		2,640			—		—		—		2,640			2,621			2,949			3,268			3,415			12,253

Quantity sold — total	MT (thousand)		3,438			—		—		—		3,438			3,990			4,522			4,764			4,972			18,248


Average sales price — external market	US$		35.19			—		—		—		35.19			61.52			34.93			34.71			36.96			41.47
Average sales price — internal market	US$		30.96			—		—		—		30.96			53.89			31.24			31.96			33.35			36.87
Average sales price — total	US$		31.94			—		—		—		31.94			56.51			32.52			32.83			35.16			38.56

Long-term indebtedness, gross	US$		84			—		—		—		84			46			115			97			90			90
Short-term indebtedness, gross	US$		181			—		—		—		181			245			221			226			163			163

Total indebtedness, gross	US$		265			—		—		—		265			292			336			323			253			253


Stockholders’ equity	US$		276			—		—		—		276			493			432			315			347			347


Net operating revenues	US$		96			—		—		—		96			117			130			139			150			536
Cost of products	US$		(49	)		—		—		—		(49	)		(63	)		(82	)		(81	)		(75	)		(301	)
Other expenses / revenues	US$		(1	)		—		—		—		(1	)		(8	)		2			(3	)		—			(9	)
Depreciation, amortization and depletion	US$		12			—		—		—		12			14			17			10			13			54

EBITDA	US$		58			—		—		—		58			60			67			65			88			280
Depreciation, amortization and depletion	US$		(12	)		—		—		—		(12	)		(14	)		(17	)		(10	)		(13	)		(54	)

EBIT	US$		46			—		—		—		46			46			50			55			75			226
Net financial result	US$		(1	)		—		—		—		(1	)		(2	)		(11	)		(3	)		1			(15	)

Income before income tax and social contribution	US$		45			—		—		—		45			44			39			52			76			211
Income tax and social contribution	US$		(15	)		—		—		—		(15	)		(10	)		(19	)		(5	)		(21	)		(55	)

Net income	US$		30			—		—		—		30			34			20			47			55			156

Aluminum Area — Albras (Additional information — unaudited) — Consolidated Subsidiary


		2009												2008
		As of and for the three-month periods ended												As of and for the three-month periods ended
Information		March 31			June 30		September 30		December 31		Total			March 31			June 30			September 30			December 31			Total

Quantity sold — external market	MT (thousand)		107			—		—		—		107			109			99			117			108			433
Quantity sold — internal market	MT (thousand)		5			—		—		—		5			7			6			7			6			26

Quantity sold — total	MT (thousand)		112			—		—		—		112			116			105			124			114			459


Average sales price — external market	US$		1,388.35			—		—		—		1,388.35			2,486.87			2,939.31			2,888.76			2,150.39			2,589.98
Average sales price — internal market	US$		1,783.09			—		—		—		1,783.09			2,307.59			2,640.89			2,625.72			2,380.23			2,827.94
Average sales price — total	US$		1,405.98			—		—		—		1,405.98			2,476.70			2,920.77			2,874.64			2,162.48			2,603.46

Long-term indebtedness, gross	US$		250			—		—		—		250			283			301			267			250			250
Short-term indebtedness, gross	US$		156			—		—		—		156			111			90			128			133			133

Total indebtedness, gross	US$		406			—		—		—		406			394			391			395			383			383


Stockholders’ equity	US$		778			—		—		—		778			973			1,098			948			782			782


Net operating revenues	US$		156			—		—		—		156			292			310			346			245			1,193
Cost of products	US$		(161	)		—		—		—		(161	)		(222	)		(222	)		(254	)		(194	)		(892	)
Other expenses / revenues	US$		(13	)		—		—		—		(13	)		(18	)		(20	)		(18	)		(24	)		(80	)
Depreciation, amortization and depletion	US$		5			—		—		—		5			8			8			9			6			31

EBITDA	US$		(13	)		—		—		—		(13	)		60			76			83			33			252
Depreciation, amortization and depletion	US$		(5	)		—		—		—		(5	)		(8	)		(8	)		(9	)		(6	)		(31	)

EBIT	US$		(18	)		—		—		—		(18	)		52			68			74			27			221
Net financial result	US$		(1	)		—		—		—		(1	)		(66	)		37			(38	)		(6	)		(73	)

Income (loss) before income tax and social contribution	US$		(19	)		—		—		—		(19	)		(14	)		105			36			21			148
Income tax and social contribution	US$		8			—		—		—		8			(9	)		(37	)		(9	)		7			(48	)

Net income (loss)	US$		(11	)		—		—		—		(11	)		(23	)		68			27			28			100

Aluminum Area — Alunorte (Additional information — unaudited) — Consolidated Subsidiary


		2009												2008
		As of and for the three-month periods ended												As of and for the three-month periods ended
Information		March 31			June 30		September 30		December 31		Total			March 31			June 30			September 30			December 31			Total

Quantity sold — external market	MT (thousand)		1,225			—		—		—		1,225			814			832			975			1,336			3,957
Quantity sold — internal market	MT (thousand)		216			—		—		—		216			235			258			301			250			1,044

Quantity sold — total	MT (thousand)		1,441			—		—		—		1,441			1,049			1,090			1,276			1,586			5,001


Average sales price — external market	US$		192.84			—		—		—		192.84			322.36			372.73			378.60			286.74			334.79
Average sales price — internal market	US$		170.69			—		—		—		170.69			287.59			340.49			342.74			324.54			358.65
Average sales price — total	US$		195.62			—		—		—		195.62			314.57			365.10			370.14			292.70			339.77

Long-term indebtedness, gross	US$		845			—		—		—		845			740			829			855			855			855
Short-term indebtedness, gross	US$		53			—		—		—		53			20			—			29			31			31

Total indebtedness, gross	US$		898			—		—		—		898			760			829			884			886			886


Stockholders’ equity	US$		1,789			—		—		—		1,789			2,287			2,633			2,217			1,794			1,794


Net operating revenues	US$		278			—		—		—		278			331			399			473			456			1,659
Cost of products	US$		(304	)		—		—		—		(304	)		(274	)		(288	)		(352	)		(331	)		(1,245	)
Other expenses / revenues	US$		(7	)		—		—		—		(7	)		(13	)		(14	)		(12	)		(20	)		(59	)
Depreciation, amortization and depletion	US$		24			—		—		—		24			19			20			16			15			70

EBITDA	US$		(9	)		—		—		—		(9	)		63			117			125			120			425
Depreciation, amortization and depletion	US$		(24	)		—		—		—		(24	)		(19	)		(20	)		(16	)		(15	)		(70	)

EBIT	US$		(33	)		—		—		—		(33	)		44			97			109			105			355
Net financial result	US$		—			—		—		—		—			(57	)		58			(117	)		(97	)		(213	)

Income (loss) before income tax and social contribution	US$		(33	)		—		—		—		(33	)		(13	)		155			(8	)		8			142
Income tax and social contribution	US$		11			—		—		—		11			(7	)		(34	)		22			7			(12	)

Net income (loss)	US$		(22	)		—		—		—		(22	)		(20	)		121			14			15			130

Pelletizing Affiliates — Hispanobras (Additional information — unaudited)


		2009												2008
		As of and for the three-month periods ended												As of and for the three-month periods ended
Information		March 31			June 30		September 30		December 31		Total			March 31			June 30			September 30			December 31			Total

Quantity sold — external market	MT (thousand)		—			—		—		—		—			404			400			618			—			1,422
Quantity sold — internal market	MT (thousand)		—			—		—		—		—			710			805			554			396			2,465

Quantity sold — total	MT (thousand)		—			—		—		—		—			1,114			1,205			1,172			396			3,887


Average sales price — external market	US$		—			—		—		—		—			71.45			203.07			227.18			—			176.15
Average sales price — internal market	US$		—			—		—		—		—			75.95			203.58			236.04			146.47			164.94
Average sales price — total	US$		—			—		—		—		—			74.32			203.41			231.37			146.47			169.04

Short-term indebtedness, gross	US$		—			—		—		—		—			75			58			7			—			—

Total indebtedness, gross	US$		—			—		—		—		—			75			58			7			—			—


Stockholders’ equity	US$		96			—		—		—		96			90			166			158			143			143


Net operating revenues	US$		—			—		—		—		—			83			248			164			52			547
Cost of products	US$		—			—		—		—		—			(75	)		(143	)		(118	)		(36	)		(372	)
Other expenses / revenues	US$		(7	)		—		—		—		(7	)		(2	)		(2	)		(2	)		(2	)		(8	)
Depreciation, amortization and depletion	US$		2			—		—		—		2			1			1			1			1			4

EBITDA	US$		(5	)		—		—		—		(5	)		7			104			45			15			171
Depreciation, amortization and depletion	US$		(2	)		—		—		—		(2	)		(1	)		(1	)		(1	)		(1	)		(4	)

EBIT	US$		(7	)		—		—		—		(7	)		6			103			44			14			167
Net financial result	US$		1			—		—		—		1			1			(4	)		7			9			13

Income (loss) before income tax and social contribution	US$		(6	)		—		—		—		(6	)		7			99			51			23			180
Income before income tax and social contribution	US$		—			—		—		—		—			(3	)		(34	)		(18	)		(8	)		(63	)

Net income	US$		(6	)		—		—		—		(6	)		4			65			33			15			117

Pelletizing Affiliates — Samarco (Additional information — unaudited)


		2009												2008
		As of and for the three-month periods ended												As of and for the three-month periods ended
Information		March 31			June 30		September 30		December 31		Total			March 31			June 30			September 30			December 31			Total

Quantity sold — Pellets	MT (thousand)		2,141			—		—		—		2,141			3,010			4,327			5,519			3,413			16,269
Quantity sold — Iron ore	MT (thousand)		714			—		—		—		714			168			140			154			202			664

Quantity sold — total	MT (thousand)		2,855			—		—		—		2,855			3,178			4,467			5,673			3,615			16,933


Average sales price — Pellets	US$		98.56			—		—		—		98.56			105.51			142.07			152.30			156.17			141.95
Average sales price — Iron ore	US$		62.56			—		—		—		62.56			47.61			98.95			73.86			85.18			76.08
Long-term indebtedness, gross	US$		769,734									769,734			800			799			800			800			800

Short-term indebtedness, gross	US$		698,816									698,816			591			846			987			783			783

Total indebtedness, gross	US$		1,468,550			—		—		—		1,468,550			1,391			1,645			1,787			1,583			1,583


Stockholders’ equity	US$		822									822			1,078			1,213			926			732			732


Net operating revenues	US$		260			—		—		—		260			331			613			843			553			2,340
Cost of products	US$		(97	)		—		—		—		(97	)		(164	)		(277	)		(314	)		(155	)		(910	)
Other expenses / revenues	US$		(59	)		—		—		—		(59	)		(43	)		(98	)		(55	)		(67	)		(263	)
Depreciation, amortization and depletion	US$		18			—		—		—		18			12			16			30			22			80

EBITDA	US$		122			—		—		—		122			136			254			504			353			1,247
Depreciation, amortization and depletion	US$		(18	)		—		—		—		(18	)		(12	)		(16	)		(30	)		(22	)		(80	)

EBIT	US$		104			—		—		—		104			124			238			474			331			1,167
Gain on investments accounted for by the equity method	US$		—			—		—		—		—			3			(3	)		1			3			4
Net financial result	US$		(3	)		—		—		—		(3	)		4			122			(281	)		(244	)		(399	)

Income (loss) before income tax and social contribution	US$		101			—		—		—		101			131			357			194			90			772
Income tax and social contribution	US$		(18	)		—		—		—		(18	)		66			(162	)		(30	)		(17	)		(143	)

Net income (loss)	US$		83			—		—		—		83			197			195			164			73			629

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 6, 2009	COMPANHIA VALE DO RIO DOCE (Registrant)
	By:	/s/ Roberto Castello Branco
		Roberto Castello Branco
		Director of Investor Relations