Table of Contents

 

 

 

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

 

October, 2017

 

Vale S.A.

 

Avenida das Américas, No. 700
22640-100 Rio de Janeiro, RJ, Brazil

(Address of principal executive office)

 

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

 

(Check One) Form 20-F x Form 40-F 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 x

 

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

 

(Check One) Yes o No x

 

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

 

(Check One) Yes o No x

 

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

 

 

 



Table of Contents

 

 

Interim Financial Statements

September 30, 2017

 

 

BRGAAP in R$ (English)

 



Table of Contents

 

 

Vale S.A. Interim Financial Statements

Contents

 

 

Page

Report on the review of the quarterly information - ITR

3

Consolidated and Parent Company Income Statement

5

Consolidated and Parent Company Statement of Comprehensive Income

7

Consolidated and Parent Company Statement of Cash Flows

8

Consolidated and Parent Company Statement of Financial Position

10

Consolidated Statement of Changes in Equity

11

Consolidated and Parent Company Value Added Statement

12

Selected Notes to the Interim Financial Statements

13

1.           Corporate information

13

2.           Basis for preparation of the interim financial statements

13

3.           Information by business segment and by geographic area

14

4.           Special events occurred during the period

18

5.           Costs and expenses by nature

20

6.           Financial result

21

7.           Income taxes

21

8.           Basic and diluted earnings per share

23

9.           Accounts receivable

23

10.         Inventories

24

11.         Other financial assets and liabilities

24

12.         Non-current assets and liabilities held for sale and discontinued operations

24

13.         Acquisitions and divestitures

25

14.         Investments in associates and joint ventures

26

15.         Intangibles

28

16.         Property, plant and equipment

28

17.         Loans, borrowings, cash and cash equivalents and financial investments

29

18.         Liabilities related to associates and joint ventures

32

19.         Financial instruments classification

35

20.         Fair value estimate

36

21.         Derivative financial instruments

37

22.         Provisions

41

23.         Litigation

42

24.         Employee postretirement obligations

43

25.         Stockholders’ equity

44

26.         Related parties

45

27.         Commitments

46

28.         Parent Company information (individual interim information)

47

29.         Additional information about derivatives financial instruments

51

 

2



Table of Contents

 

 

KPMG Auditores Independentes

 

Central Tel

 

55 (21) 2207-9400

Rua do Passeio, 38 Setor 2 17º andar

Fax

55 (21) 2207-9000

20021-290 - Rio de Janeiro, RJ - Brasil

Internet

www.kpmg.com.br

 

Report on the review of quarterly information - ITR

 

(A free translation of the original report in Portuguese, as filed with the Brazilian Securities and Exchange Commission (CVM), prepared in accordance with the accounting practices adopted in Brazil, rules of the CVM and of the International Financial Reporting Standards - IFRS)

 

To

The Board of Directors and Stockholders of

Vale S.A.

Rio de Janeiro - RJ

 

Introduction

 

1.              We have reviewed the interim accounting information, individual and consolidated, of Vale S.A. (“the Company”), identified as Parent Company and Consolidated, respectively, included in the quarterly information form - ITR for the quarter ended September 30, 2017, which comprises the individual and consolidated balance sheet as of September 30, 2017 and the respective statements of income and comprehensive income for three and nine month periods ended on September 30, 2017, the individual and consolidated statements of changes in equity for the nine-month period and the individual statment of cash flows for the nine-month period and the consolidated statement of cash flows for the three and nine month periods then ended, including the explanatory notes.

 

2.              The Company`s Management is responsible for the preparation of these interim accounting information in accordance with the CPC 21(R1) — Demonstração Intermediária and the IAS 34 - Interim Financial Reporting, issued by the International Accounting Standards Board — IASB, as well as the presentation of these information in accordance with the standards issued by the Brazilian Securities and Exchange Commission, applicable to the preparation of quarterly information - ITR. Our responsibility is to express our conclusion on this interim accounting information based on our review.

 

Scope of the review

 

3.              We conducted our review in accordance with Brazilian and International Interim Information Review Standards (NBC TR 2410 - Revisão de Informações Intermediárias Executada pelo Auditor da Entidade and ISRE 2410 - Review of Interim Financial Information Performed by the Independent Auditor of the Entity, respectively). A review of interim information consists of making inquiries primarily of the management responsible for financial and accounting matters and applying analytical procedures and other review procedures. The scope of a review is significantly less than an audit conducted in accordance with auditing standards and, accordingly, it did not enable us to obtain assurance that we were aware of all the material matters that would have been identified in an audit. Therefore, we do not express an audit opinion.

 

 

KPMG Auditores Independentes, uma sociedade simples brasileira e firma-membro da rede KPMG de firmas-membro independentes e afiliadas à KPMG International Cooperative (“KPMG International”), uma entidade suíça.

KPMG Auditores Independentes, a Brazilian entity and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity.

 

3



Table of Contents

 

 

Conclusion on the interim accounting information

 

4.              Based on our review, we are not aware of any fact that might lead us to believe that the individual and consolidated interim accounting information included in the aforementioned quarterly information was not prepared, in all material respects, in accordance with CPC 21(R1) and IAS 34, issued by the IASB, applicable to the preparation of the quarterly review - ITR, and presented in accordance with the standards issued by the Brazilian Securities and Exchange Commission.

 

Other matters

 

Statements of added value

 

5.              The individual and consolidated statements of value added for the quarter ended September 30, 2017, prepared under the responsibility of the Company’s management, and presented as supplementary information for the purposes of IAS 34, were submitted to the same review procedures followed together with the review of the Company’s interim financial information. In order to form our conclusion, we evaluated whether these statements were reconciliated to the interim financial information and to the accounting records, as applicable, and whether their form and content are in accordance with the criteria set on Technical Pronouncement CPC 09 - Statement of Value Added. Based on our review, nothing has come to our attention that causes us to believe that the accompanying statements of value added were not prepared, in all material respects, in accordance with the individual and consolidated interim financial information taken as a whole.

 

Rio de Janeiro, October 25, 2017

 

KPMG Auditores Independentes

CRC SP-014428/O-6 F-RJ

 

(Original report in Portuguese signed by)

Manuel Fernandes Rodrigues de Sousa

Accountant CRC RJ-052428/O-2

 

4



Table of Contents

 

 

Income Statement

In millions of Brazilian Reais, except earnings per share data

 

 

 

 

 

Consolidated

 

 

 

 

 

Three-month period ended
September 30,

 

Nine-month period ended
September 30,

 

 

 

Notes

 

2017

 

2016

 

2017

 

2016

 

 

 

 

 

 

 

(i)

 

 

 

(i)

 

Continuing operations

 

 

 

 

 

 

 

 

 

 

 

Net operating revenue

 

3(c)

 

28,600

 

21,831

 

78,705

 

63,981

 

Cost of goods sold and services rendered

 

5(a)

 

(17,099

)

(14,100

)

(48,426

)

(44,271

)

Gross profit

 

 

 

11,501

 

7,731

 

30,279

 

19,710

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses

 

 

 

 

 

 

 

 

 

 

 

Selling and administrative expenses

 

5(b)

 

(409

)

(444

)

(1,223

)

(1,309

)

Research and evaluation expenses

 

 

 

(285

)

(258

)

(748

)

(726

)

Pre operating and operational stoppage

 

 

 

(265

)

(377

)

(915

)

(1,144

)

Other operating revenues (expenses), net

 

5(c)

 

(484

)

218

 

(1,002

)

(426

)

 

 

 

 

(1,443

)

(861

)

(3,888

)

(3,605

)

Impairment and other results on non-current assets

 

13 and 16

 

(532

)

(110

)

345

 

(338

)

Operating income

 

 

 

9,526

 

6,760

 

26,736

 

15,767

 

 

 

 

 

 

 

 

 

 

 

 

 

Financial income

 

6

 

4,838

 

1,187

 

9,327

 

26,113

 

Financial expenses

 

6

 

(4,084

)

(4,578

)

(14,808

)

(17,763

)

Equity results in associates and joint ventures

 

14

 

367

 

144

 

509

 

1,386

 

Impairment and other results in associates and joint ventures

 

18

 

(78

)

(106

)

(379

)

(4,105

)

Income before income taxes

 

 

 

10,569

 

3,407

 

21,385

 

21,398

 

 

 

 

 

 

 

 

 

 

 

 

 

Income taxes

 

7

 

 

 

 

 

 

 

 

 

Current tax

 

 

 

(1,654

)

(203

)

(3,461

)

(2,895

)

Deferred tax

 

 

 

(1,407

)

(1,211

)

(1,660

)

(6,516

)

 

 

 

 

(3,061

)

(1,414

)

(5,121

)

(9,411

)

 

 

 

 

 

 

 

 

 

 

 

 

Net income from continuing operations

 

 

 

7,508

 

1,993

 

16,264

 

11,987

 

Net income attributable to noncontrolling interests

 

 

 

19

 

37

 

166

 

88

 

Net income from continuing operations attributable to Vale’s stockholders

 

 

 

7,489

 

1,956

 

16,098

 

11,899

 

 

 

 

 

 

 

 

 

 

 

 

 

Discontinued operations

 

12

 

 

 

 

 

 

 

 

 

Loss from discontinued operations

 

 

 

(338

)

(127

)

(983

)

(154

)

Net income attributable to noncontrolling interests

 

 

 

8

 

(13

)

21

 

7

 

Loss from discontinued operations attributable to Vale’s stockholders

 

 

 

(346

)

(114

)

(1,004

)

(161

)

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

 

 

7,170

 

1,866

 

15,281

 

11,833

 

Net income attributable to noncontrolling interests

 

 

 

27

 

24

 

187

 

95

 

Net income attributable to Vale’s stockholders

 

 

 

7,143

 

1,842

 

15,094

 

11,738

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share attributable to Vale’s stockholders:

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted earnings per share (restated in note 4):

 

8

 

 

 

 

 

 

 

 

 

Preferred share (R$)

 

 

 

1.38

 

0.35

 

2.92

 

2.27

 

Common share (R$)

 

 

 

1.38

 

0.35

 

2.92

 

2.27

 

 


(i) Period restated according to Note 12.

 

The accompanying notes are an integral part of these interim financial statements.

 

5



Table of Contents

 

 

Income Statement

In millions of Brazilian Reais, except earnings per share data

 

 

 

Parent company

 

 

 

Three-month period ended
September 30,

 

Nine-month period ended
September 30,

 

 

 

2017

 

2016

 

2017

 

2016

 

Continuing operations

 

 

 

 

 

 

 

 

 

Net operating revenue

 

14,369

 

11,941

 

47,033

 

32,315

 

Cost of goods sold and services rendered

 

(8,335

)

(7,552

)

(24,424

)

(21,599

)

Gross profit

 

6,034

 

4,389

 

22,609

 

10,716

 

 

 

 

 

 

 

 

 

 

 

Operating expenses

 

 

 

 

 

 

 

 

 

Selling and administrative expenses

 

(229

)

(265

)

(690

)

(754

)

Research and evaluation expenses

 

(171

)

(162

)

(444

)

(417

)

Pre operating and operational stoppage

 

(256

)

(167

)

(660

)

(506

)

Equity results from subsidiaries

 

3,224

 

1,288

 

4,840

 

4,745

 

Other operating expenses, net

 

(438

)

(312

)

(523

)

(830

)

 

 

2,130

 

382

 

2,523

 

2,238

 

Impairment and other results on non-current assets

 

(258

)

 

(326

)

 

Operating income

 

7,906

 

4,771

 

24,806

 

12,954

 

 

 

 

 

 

 

 

 

 

 

Financial income

 

4,278

 

1,296

 

7,793

 

25,006

 

Financial expenses

 

(3,169

)

(4,464

)

(12,848

)

(17,122

)

Equity results in associates and joint ventures

 

367

 

144

 

509

 

1,386

 

Impairment and other results in associates and joint ventures

 

(78

)

(106

)

(370

)

(4,105

)

Income before income taxes

 

9,304

 

1,641

 

19,890

 

18,119

 

 

 

 

 

 

 

 

 

 

 

Income taxes

 

 

 

 

 

 

 

 

 

Current tax

 

(1,278

)

137

 

(2,344

)

(2,161

)

Deferred tax

 

(537

)

178

 

(1,448

)

(4,059

)

 

 

(1,815

)

315

 

(3,792

)

(6,220

)

Net income from continuing operations

 

7,489

 

1,956

 

16,098

 

11,899

 

 

 

 

 

 

 

 

 

 

 

Discontinued operations

 

 

 

 

 

 

 

 

 

Loss from discontinued operations

 

(346

)

(114

)

(1,004

)

(161

)

 

 

 

 

 

 

 

 

 

 

Net income

 

7,143

 

1,842

 

15,094

 

11,738

 

 

The accompanying notes are an integral part of these interim financial statements.

 

6



Table of Contents

 

 

Statement of Comprehensive Income

In millions of Brazilian Reais

 

 

 

Consolidated

 

 

 

Three-month period ended
September 30,

 

Nine-month period ended
September 30,

 

 

 

2017

 

2016

 

2017

 

2016

 

Net income

 

7,170

 

1,866

 

15,281

 

11,833

 

Other comprehensive income:

 

 

 

 

 

 

 

 

 

Items that will not be reclassified subsequently to the income statement

 

 

 

 

 

 

 

 

 

Retirement benefit obligations

 

200

 

(128

)

(826

)

(1,100

)

Tax recognized within other comprehensive income

 

(58

)

43

 

253

 

340

 

Total items that will not be reclassified subsequently to the income statement

 

142

 

(85

)

(573

)

(760

)

 

 

 

 

 

 

 

 

 

 

Items that may be reclassified subsequently to the income statement

 

 

 

 

 

 

 

 

 

Cumulative translation adjustments

 

(2,260

)

787

 

96

 

(13,435

)

Cash flow hedge

 

 

 

 

23

 

Net investments hedge

 

935

 

 

515

 

 

Equity results in associates and joint ventures, net of taxes

 

 

 

 

16

 

Transfer of realized results to net income, net of taxes

 

 

 

 

(276

)

Tax recognized within other comprehensive income

 

(582

)

55

 

(686

)

(470

)

Total of items that may be reclassified subsequently to the income statement

 

(1,907

)

842

 

(75

)

(14,142

)

Total comprehensive income (loss)

 

5,405

 

2,623

 

14,633

 

(3,069

)

 

 

 

 

 

 

 

 

 

 

Comprehensive income (loss) attributable to noncontrolling interests

 

(118

)

66

 

74

 

(835

)

Comprehensive income (loss) attributable to Vale’s stockholders

 

5,523

 

2,557

 

14,559

 

(2,234

)

 

 

 

Parent company

 

 

 

Three-month period ended
September 30,

 

Nine-month period ended
September 30,

 

 

 

2017

 

2016

 

2017

 

2016

 

Net income

 

7,143

 

1,842

 

15,094

 

11,738

 

Other comprehensive income:

 

 

 

 

 

 

 

 

 

Items that will not be reclassified subsequently to the income statement

 

 

 

 

 

 

 

 

 

Retirement benefit obligations

 

(40

)

(26

)

(80

)

(66

)

Tax recognized within other comprehensive income

 

14

 

10

 

27

 

23

 

Equity results in subsidiaries, associates and joint ventures, net of taxes

 

168

 

(69

)

(520

)

(717

)

Total items that will not be reclassified subsequently to the income statement

 

142

 

(85

)

(573

)

(760

)

 

 

 

 

 

 

 

 

 

 

Items that may be reclassified subsequently to the income statement

 

 

 

 

 

 

 

 

 

Cumulative translation adjustments

 

(2,378

)

800

 

(301

)

(12,972

)

Net investments hedge

 

935

 

 

515

 

 

Equity results in associates and joint ventures, net of taxes

 

 

 

 

26

 

Transfer of realized results to net income, net of taxes

 

 

 

 

(266

)

Tax recognized within other comprehensive income

 

(319

)

 

(176

)

 

Total of items that may be reclassified subsequently to the income statement

 

(1,762

)

800

 

38

 

(13,212

)

Total comprehensive income (loss)

 

5,523

 

2,557

 

14,559

 

(2,234

)

 

The accompanying notes are an integral part of these interim financial statements.

 

7



Table of Contents

 

 

Statement of Cash Flows

In millions of Brazilian Reais

 

 

 

Consolidated

 

 

 

Three-month period ended
September 30,

 

Nine-month period ended
September 30,

 

 

 

2017

 

2016

 

2017

 

2016

 

 

 

 

 

(i)

 

 

 

(i)

 

Cash flow from operating activities:

 

 

 

 

 

 

 

 

 

Income before income taxes from continuing operations

 

10,569

 

3,407

 

21,385

 

21,398

 

Continuing operations adjustments for:

 

 

 

 

 

 

 

 

 

Equity results in associates and joint ventures

 

(367

)

(144

)

(509

)

(1,386

)

Impairment and other results on non-current assets

 

532

 

110

 

(345

)

338

 

Impairment and other results in associates and joint ventures

 

78

 

 

379

 

3,999

 

Depreciation, amortization and depletion

 

2,916

 

2,766

 

8,674

 

8,764

 

Financial results, net

 

(754

)

3,391

 

5,481

 

(8,350

)

Changes in assets and liabilities:

 

 

 

 

 

 

 

 

 

Accounts receivable

 

(3,075

)

405

 

3,420

 

(2,854

)

Inventories

 

(173

)

(249

)

(1,488

)

(308

)

Suppliers and contractors

 

113

 

1,425

 

1,162

 

1,464

 

Provision - Payroll, related charges and others remunerations

 

632

 

(51

)

539

 

85

 

Deferred revenue - Gold stream

 

 

1,683

 

 

1,683

 

Other assets and liabilities, net

 

(855

)

(2,342

)

(2,824

)

(1,222

)

 

 

9,616

 

10,401

 

35,874

 

23,611

 

Interest on loans and borrowings paid

 

(1,289

)

(1,377

)

(4,235

)

(4,511

)

Derivatives paid, net

 

(361

)

(619

)

(714

)

(3,831

)

Interest on participative stockholders’ debentures paid

 

 

 

(221

)

(117

)

Income taxes

 

(282

)

(384

)

(1,539

)

(1,242

)

Income taxes - Settlement program

 

(393

)

(362

)

(1,159

)

(1,056

)

Net cash provided by operating activities from continuing operations

 

7,291

 

7,659

 

28,006

 

12,854

 

Net cash provided by operating activities from discontinued operations

 

275

 

150

 

238

 

282

 

Net cash provided by operating activities

 

7,566

 

7,809

 

28,244

 

13,136

 

 

 

 

 

 

 

 

 

 

 

Cash flow from investing activities:

 

 

 

 

 

 

 

 

 

Financial investments redeemed (invested)

 

(124

)

227

 

(176

)

181

 

Loans and advances - Net receipts (payments) (note 18)

 

(324

)

(396

)

(1,059

)

(401

)

Additions to investments

 

(217

)

(14

)

(223

)

(837

)

Additions to property, plant and equipment and intangible

 

(2,713

)

(3,719

)

(9,052

)

(12,998

)

Proceeds from disposal of assets and investments (note 13)

 

624

 

1,053

 

2,266

 

1,140

 

Dividends received from associates and joint ventures

 

64

 

1

 

330

 

406

 

Others investments activities

 

7

 

160

 

(95

)

12

 

Proceeds from gold stream transaction

 

 

885

 

 

885

 

Net cash used in investing activities from continuing operations

 

(2,683

)

(1,803

)

(8,009

)

(11,612

)

Net cash used in investing activities from discontinued operations

 

(224

)

(348

)

(684

)

(741

)

Net cash used in investing activities

 

(2,907

)

(2,151

)

(8,693

)

(12,353

)

 

 

 

 

 

 

 

 

 

 

Cash flow from financing activities:

 

 

 

 

 

 

 

 

 

Loans and borrowings

 

 

 

 

 

 

 

 

 

Additions

 

1,115

 

5,092

 

5,654

 

23,046

 

Repayments

 

(8,895

)

(6,430

)

(18,327

)

(17,364

)

Transactions with stockholders:

 

 

 

 

 

 

 

 

 

Dividends and interest on capital attributed to stockholders

 

 

 

(4,660

)

 

Dividends and interest on capital paid to noncontrolling interest

 

(372

)

(433

)

(395

)

(702

)

Transactions with noncontrolling stockholders (note 13)

 

 

 

(305

)

(69

)

Net cash provided by (used in) financing activities from continuing operations

 

(8,152

)

(1,771

)

(18,033

)

4,911

 

Net cash used in financing activities from discontinued operations

 

(107

)

(29

)

(108

)

(45

)

Net cash provided by (used in) financing activities

 

(8,259

)

(1,800

)

(18,141

)

4,866

 

 

 

 

 

 

 

 

 

 

 

Increase (decrease) in cash and cash equivalents

 

(3,600

)

3,858

 

1,410

 

5,649

 

Cash and cash equivalents in the beginning of the period

 

18,922

 

13,377

 

13,891

 

14,022

 

Effect of exchange rate changes on cash and cash equivalents

 

(380

)

193

 

(315

)

(2,243

)

Effects of disposals of subsidiaries and merger, net on cash and cash equivalents

 

7

 

 

(37

)

 

Cash and cash equivalents at end of the period

 

14,949

 

17,428

 

14,949

 

17,428

 

 

 

 

 

 

 

 

 

 

 

Non-cash transactions:

 

 

 

 

 

 

 

 

 

Additions to property, plant and equipment - capitalized loans and borrowing costs

 

351

 

556

 

938

 

1,995

 

 


(i) Period restated according to Note 12.

 

The accompanying notes are an integral part of these interim financial statements.

 

8



Table of Contents

 

 

Statement of Cash Flows

In millions of Brazilian Reais

 

 

 

Parent company

 

 

 

Nine-month period ended
September 30,

 

 

 

2017

 

2016

 

Cash flow from operating activities:

 

 

 

 

 

Income before income taxes from continuing operations

 

19,890

 

18,119

 

Equity results in associates, subsidiaries and joint ventures

 

(5,349

)

(6,131

)

Results on measurement or sale of non-current assets

 

326

 

 

Impairment and other results in associates and joint ventures

 

370

 

4,105

 

Depreciation, amortization and depletion

 

4,124

 

3,717

 

Financial results, net

 

5,055

 

(7,884

)

Changes in assets and liabilities:

 

 

 

 

 

Accounts receivable

 

13,517

 

4,634

 

Inventories

 

(346

)

87

 

Suppliers and contractors

 

81

 

333

 

Provision - Payroll, related charges and others remunerations

 

483

 

153

 

Other assets and liabilities, net

 

80

 

320

 

 

 

38,231

 

17,453

 

Interest on loans and borrowings paid

 

(4,311

)

(4,185

)

Derivatives paid, net

 

(439

)

(790

)

Interest on participative stockholders’ debentures paid

 

(221

)

(117

)

Dividends received from interest on capital and associates

 

1,602

 

186

 

Income taxes

 

(735

)

(60

)

Income taxes - Settlement program

 

(1,136

)

(1,035

)

Net cash provided by operating activities

 

32,991

 

11,452

 

 

 

 

 

 

 

Cash flow from investing activities:

 

 

 

 

 

Financial investments redeemed (invested)

 

(195

)

(34

)

Loans and advances - Net receipts (payments)

 

(482

)

(341

)

Additions to investments

 

(1,205

)

(1,334

)

Additions to property, plant and equipment and intangible

 

(6,306

)

(9,070

)

Proceeds from disposal of assets and investments

 

21

 

115

 

Dividends and interest on capital received from associates and joint ventures

 

300

 

403

 

Others investments activities

 

(87

)

 

Net cash used in investing activities

 

(7,954

)

(10,261

)

 

 

 

 

 

 

Cash flow from financing activities:

 

 

 

 

 

Loans and borrowings

 

 

 

 

 

Additions

 

7,875

 

11,590

 

Repayments

 

(26,114

)

(12,803

)

Transactions with stockholders:

 

 

 

 

 

Dividends attributed to stockholders

 

(4,660

)

 

Net cash used in financing activities

 

(22,899

)

(1,213

)

 

 

 

 

 

 

Increase (decrease) in cash and cash equivalents

 

2,138

 

(22

)

Cash and cash equivalents in the beginning of the period

 

1,203

 

518

 

Effects of disposals of subsidiaries and merger, net on cash and cash equivalents

 

7

 

 

Cash and cash equivalents at end of the period

 

3,348

 

496

 

 

 

 

 

 

 

Non-cash transactions:

 

 

 

 

 

Additions to property, plant and equipment - capitalized loans and borrowing costs

 

938

 

827

 

 

The accompanying notes are an integral part of these interim financial statements.

 

9



Table of Contents

 

 

Statement of Financial Position

In millions of Brazilian Reais

 

 

 

 

 

Consolidated

 

Parent company

 

 

 

Notes

 

September 30,
2017

 

December 31,
2016

 

September 30,
2017

 

December 31,
2016

 

Assets

 

 

 

 

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

17

 

14,949

 

13,891

 

3,348

 

1,203

 

Accounts receivable

 

9

 

8,592

 

11,937

 

12,156

 

26,223

 

Other financial assets

 

11

 

7,144

 

1,184

 

906

 

1,231

 

Inventories

 

10

 

12,934

 

10,913

 

4,429

 

3,982

 

Prepaid income taxes

 

 

 

1,054

 

518

 

894

 

312

 

Recoverable taxes

 

 

 

3,564

 

5,296

 

2,068

 

3,962

 

Others

 

 

 

1,068

 

1,814

 

393

 

406

 

 

 

 

 

49,305

 

45,553

 

24,194

 

37,319

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-current assets held for sale

 

12

 

13,700

 

27,994

 

8,406

 

8,936

 

 

 

 

 

63,005

 

73,547

 

32,600

 

46,255

 

Non-current assets

 

 

 

 

 

 

 

 

 

 

 

Judicial deposits

 

23(c)

 

6,352

 

3,135

 

5,933

 

2,681

 

Other financial assets

 

11

 

10,333

 

2,046

 

1,873

 

2,178

 

Prepaid income taxes

 

 

 

1,707

 

1,718

 

 

 

Recoverable taxes

 

 

 

2,062

 

2,368

 

1,933

 

2,223

 

Deferred income taxes

 

7(a)

 

21,069

 

23,931

 

13,703

 

15,299

 

Others

 

 

 

980

 

894

 

698

 

618

 

 

 

 

 

42,503

 

34,092

 

24,140

 

22,999

 

 

 

 

 

 

 

 

 

 

 

 

 

Investments

 

14

 

12,214

 

12,046

 

114,435

 

107,539

 

Intangibles

 

15

 

27,405

 

22,395

 

13,109

 

11,314

 

Property, plant and equipment

 

16

 

178,296

 

180,616

 

102,253

 

102,056

 

 

 

 

 

260,418

 

249,149

 

253,937

 

243,908

 

Total assets

 

 

 

323,423

 

322,696

 

286,537

 

290,163

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

 

 

 

 

Suppliers and contractors

 

 

 

12,712

 

11,830

 

7,431

 

7,116

 

Loans and borrowings

 

17

 

5,824

 

5,410

 

4,533

 

4,171

 

Other financial liabilities

 

11

 

2,008

 

3,539

 

5,045

 

10,845

 

Taxes payable

 

7(c)

 

2,312

 

2,144

 

1,935

 

1,883

 

Provision for income taxes

 

 

 

979

 

556

 

 

 

Liabilities related to associates and joint ventures

 

18

 

954

 

951

 

954

 

951

 

Provisions

 

22

 

3,793

 

3,103

 

2,200

 

1,792

 

Dividends and interest on capital

 

 

 

 

2,602

 

 

2,602

 

Others

 

 

 

1,782

 

2,921

 

1,751

 

353

 

 

 

 

 

30,364

 

33,056

 

23,849

 

29,713

 

Liabilities associated with non-current assets held for sale

 

12

 

3,590

 

3,554

 

 

 

 

 

 

 

33,954

 

36,610

 

23,849

 

29,713

 

Non-current liabilities

 

 

 

 

 

 

 

 

 

 

 

Loans and borrowings

 

17

 

75,878

 

90,154

 

35,661

 

47,877

 

Other financial liabilities

 

11

 

9,385

 

6,932

 

56,607

 

59,681

 

Taxes payable

 

7(c)

 

16,374

 

16,170

 

16,046

 

15,838

 

Deferred income taxes

 

7(a)

 

5,081

 

5,540

 

 

 

Provisions

 

22

 

21,783

 

18,730

 

6,626

 

4,396

 

Liabilities related to associates and joint ventures

 

18

 

2,296

 

2,560

 

2,296

 

2,560

 

Deferred revenue - Gold stream

 

 

 

6,090

 

6,811

 

 

 

Others

 

 

 

5,351

 

5,487

 

2,892

 

2,857

 

 

 

 

 

142,238

 

152,384

 

120,128

 

133,209

 

Total liabilities

 

 

 

176,192

 

188,994

 

143,977

 

162,922

 

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders’ equity

 

25

 

 

 

 

 

 

 

 

 

Equity attributable to Vale’s stockholders

 

 

 

142,560

 

127,241

 

142,560

 

127,241

 

Equity attributable to noncontrolling interests

 

 

 

4,671

 

6,461

 

 

 

Total stockholders’ equity

 

 

 

147,231

 

133,702

 

142,560

 

127,241

 

Total liabilities and stockholders’ equity

 

 

 

323,423

 

322,696

 

286,537

 

290,163

 

 

The accompanying notes are an integral part of these interim financial statements.

 

10



Table of Contents

 

 

Statement of Changes in Equity

In millions of Brazilian Reais

 

 

 

Share
capital

 

Results on
conversion
of shares

 

Capital reserves

 

Results from
operation with
noncontrolling
interest

 

Profit
reserves

 

Treasury
stocks

 

Unrealized
fair value
gain (losses)

 

Cumulative
translation
adjustments

 

Retained
earnings

 

Equity
attributable to
Vale’s
stockholders

 

Equity
attributable to
noncontrolling
interests

 

Total
stockholders’
equity

 

Balance at December 31, 2016

 

77,300

 

50

 

 

(1,870

)

13,698

 

(2,746

)

(3,739

)

44,548

 

 

127,241

 

6,461

 

133,702

 

Net income

 

 

 

 

 

 

 

 

 

15,094

 

15,094

 

187

 

15,281

 

Other comprehensive income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Retirement benefit obligations

 

 

 

 

 

 

 

(573

)

 

 

(573

)

 

(573

)

Net investments hedge (note 17 (vi))

 

 

 

 

 

 

 

 

339

 

 

339

 

 

339

 

Translation adjustments

 

 

 

 

 

 

 

72

 

(373

)

 

(301

)

(113

)

(414

)

Transactions with stockholders:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dividends and interest on capital of Vale’s stockholders

 

 

 

 

 

(2,064

)

 

 

 

 

(2,064

)

 

(2,064

)

Dividends of noncontrolling interest

 

 

 

 

 

 

 

 

 

 

 

(341

)

(341

)

Acquisitions and disposal of noncontrolling interest (note 13)

 

 

 

 

(868

)

 

 

 

 

 

(868

)

(1,629

)

(2,497

)

Capitalization of noncontrolling interest advances

 

 

 

 

 

 

 

 

 

 

 

106

 

106

 

Merger of Valepar - Note 4

 

 

 

3,692

 

 

 

 

 

 

 

3,692

 

 

3,692

 

Balance at September 30, 2017

 

77,300

 

50

 

3,692

 

(2,738

)

11,634

 

(2,746

)

(4,240

)

44,514

 

15,094

 

142,560

 

4,671

 

147,231

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Share
capital

 

Results on
conversion
of shares

 

Capital reserves

 

Results from
operation with
noncontrolling
interest

 

Profit
reserves

 

Treasury
stocks

 

Unrealized
fair value
gain (losses)

 

Cumulative
translation
adjustments

 

Retained
earnings

 

Equity
attributable to
Vale’s 
stockholders

 

Equity
attributable to 
noncontrolling
interests

 

Total
stockholders’
equity

 

Balance at December 31, 2015

 

77,300

 

50

 

 

(1,881

)

3,846

 

(2,746

)

(3,873

)

58,464

 

 

131,160

 

8,259

 

139,419

 

Net income

 

 

 

 

 

 

 

 

 

11,738

 

11,738

 

95

 

11,833

 

Other comprehensive income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Retirement benefit obligations

 

 

 

 

 

 

 

(760

)

 

 

(760

)

 

(760

)

Cash flow hedge

 

 

 

 

 

 

 

26

 

 

 

26

 

 

26

 

Translation adjustments

 

 

 

 

 

 

 

420

 

(13,658

)

 

(13,238

)

(930

)

(14,168

)

Transactions with stockholders:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dividends of noncontrolling interest

 

 

 

 

 

 

 

 

 

 

 

(645

)

(645

)

Acquisitions and disposal of noncontrolling interest (note 13)

 

 

 

 

8

 

 

 

 

 

 

8

 

(1

)

7

 

Capitalization of noncontrolling interest advances

 

 

 

 

 

 

 

 

 

 

 

78

 

78

 

Balance at September 30, 2016

 

77,300

 

50

 

 

(1,873

)

3,846

 

(2,746

)

(4,187

)

44,806

 

11,738

 

128,934

 

6,856

 

135,790

 

 

The accompanying notes are an integral part of these interim financial statements.

 

11



Table of Contents

 

 

Value Added Statement

In millions of Brazilian Reais

 

 

 

Consolidated

 

Parent company

 

 

 

Nine-month period ended September 30,

 

Generation of value added from continuing operations

 

2017

 

2016

 

2017

 

2016

 

 

 

 

 

(i)

 

 

 

 

 

Gross revenue

 

 

 

 

 

 

 

 

 

Revenue from products and services

 

79,771

 

64,911

 

47,793

 

32,841

 

Results on measurement or sale of non-current assets

 

345

 

(604

)

(326

)

(266

)

Revenue from the construction of own assets

 

4,657

 

10,107

 

4,165

 

7,921

 

Allowance for doubtful accounts

 

(19

)

(9

)

6

 

(2

)

Other revenues

 

396

 

1,237

 

313

 

315

 

Less:

 

 

 

 

 

 

 

 

 

Acquisition of products

 

(1,483

)

(1,264

)

(516

)

(572

)

Material, service and maintenance

 

(19,353

)

(22,380

)

(12,183

)

(14,576

)

Oil and gas

 

(3,015

)

(3,140

)

(2,074

)

(2,029

)

Energy

 

(2,226

)

(1,733

)

(1,057

)

(757

)

Freight

 

(7,374

)

(6,052

)

(81

)

(49

)

Impairment of non-current assets and other results

 

(379

)

(3,839

)

(370

)

(3,839

)

Impairment of discontinued operations

 

 

 

(1,004

)

(161

)

Other costs and expenses

 

(4,582

)

(4,828

)

(763

)

(1,315

)

Gross value added

 

46,738

 

32,406

 

33,903

 

17,511

 

Depreciation, amortization and depletion

 

(8,674

)

(8,764

)

(4,124

)

(3,717

)

Net value added

 

38,064

 

23,642

 

29,779

 

13,794

 

 

 

 

 

 

 

 

 

 

 

Received from third parties:

 

 

 

 

 

 

 

 

 

Equity results from entities

 

509

 

1,386

 

4,345

 

5,970

 

Equity results from discontinued operations

 

 

 

1,004

 

161

 

Financial income

 

1,054

 

432

 

302

 

241

 

Monetary and exchange variation of assets

 

(276

)

(6,526

)

(404

)

(6,461

)

Total value added from continuing operations to be distributed

 

39,351

 

18,934

 

35,026

 

13,705

 

Value added from discontinued operations to be distributed

 

482

 

1,985

 

 

 

Total value added to be distributed

 

39,833

 

20,919

 

35,026

 

13,705

 

 

 

 

 

 

 

 

 

 

 

Personnel

 

5,502

 

5,481

 

2,648

 

2,141

 

Taxes and contributions

 

5,559

 

4,883

 

5,390

 

4,911

 

Current income tax

 

3,461