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- .
Vale S.A. Interim Financial Statements
Contents
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Non-current assets and liabilities held for sale and discontinued operations |
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19 | |
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Loans, borrowings, cash and cash equivalents and financial investments |
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28 | ||
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Additional information about derivatives financial instruments |
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42 | |
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KPMG Auditores Independentes Rua do Passeio, 38 Setor 2 17º andar 20021-290 - Rio de Janeiro, RJ - Brasil |
Central Tel Fax Internet |
55 (21) 2207-9400 55 (21) 2207-9000 www.kpmg.com.br |
Report of independent registered public accounting firm
To the Board of Directors and Stockholders of
Vale S.A.
Rio de Janeiro - RJ
We have reviewed the accompanying condensed consolidated balance sheet of Vale S.A. (“the Company”) and subsidiaries as of September 30, 2017, the related condensed consolidated statements of income, comprehensive income and cash flows for the three and nine-month periods ended on September 30, 2017 and 2016, and the related condensed consolidated statement of changes in equity for the nine-month periods ended on September 30, 2017 and 2016. These condensed consolidated financial statements are 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 audit opinion.
Based on our review, we are not aware of any material modification that should be made to the condensed consolidated financial statements referred to above for them to be in conformity with the International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB).
We have previously audited, in accordance with standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheet of Vale S.A. and subsidiaries as of December 31, 2016 and the related consolidated statements of income, comprehensive income, changes in equity and cash flows for the year then ended (not presented herein); and in our report dated February 22, 2017, 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, 2016, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.
KPMG Auditores Independentes
Rio de Janeiro, Brazil
October 25, 2017
In millions of United States dollars, except earnings per share data
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Three-month period ended |
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Nine-month period ended |
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Notes |
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2017 |
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2016 |
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2017 |
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2016 |
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(i) |
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(i) |
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Continuing operations |
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Net operating revenue |
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3(c) |
|
9,050 |
|
6,726 |
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24,800 |
|
18,223 |
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Cost of goods sold and services rendered |
|
5(a) |
|
(5,412 |
) |
(4,345 |
) |
(15,248 |
) |
(12,547 |
) |
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Gross profit |
|
|
|
3,638 |
|
2,381 |
|
9,552 |
|
5,676 |
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|
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|
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Operating expenses |
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|
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|
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Selling and administrative expenses |
|
5(b) |
|
(129 |
) |
(137 |
) |
(385 |
) |
(371 |
) |
|
Research and evaluation expenses |
|
|
|
(91 |
) |
(80 |
) |
(236 |
) |
(207 |
) |
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Pre operating and operational stoppage |
|
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|
(83 |
) |
(116 |
) |
(288 |
) |
(323 |
) |
|
Other operating revenues (expenses), net |
|
5(c) |
|
(151 |
) |
63 |
|
(316 |
) |
(115 |
) |
|
|
|
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|
(454 |
) |
(270 |
) |
(1,225 |
) |
(1,016 |
) |
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Impairment and other results on non-current assets |
|
13 and 16 |
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(169 |
) |
(29 |
) |
123 |
|
(95 |
) |
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Operating income |
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3,015 |
|
2,082 |
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8,450 |
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4,565 |
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|
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Financial income |
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6 |
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1,513 |
|
362 |
|
2,911 |
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7,501 |
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Financial expenses |
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6 |
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(1,293 |
) |
(1,401 |
) |
(4,643 |
) |
(5,054 |
) |
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Equity results in associates and joint ventures |
|
14 |
|
115 |
|
45 |
|
164 |
|
390 |
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Impairment and other results in associates and joint ventures |
|
18 |
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(26 |
) |
(33 |
) |
(121 |
) |
(1,146 |
) |
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Income before income taxes |
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3,324 |
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1,055 |
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6,761 |
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6,256 |
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Income taxes |
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7 |
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Current tax |
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(522 |
) |
(64 |
) |
(1,092 |
) |
(818 |
) |
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Deferred tax |
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(457 |
) |
(370 |
) |
(561 |
) |
(1,906 |
) |
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(979 |
) |
(434 |
) |
(1,653 |
) |
(2,724 |
) |
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Net income from continuing operations |
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2,345 |
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621 |
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5,108 |
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3,532 |
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Net income attributable to noncontrolling interests |
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7 |
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11 |
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53 |
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25 |
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Net income from continuing operations attributable to Vale’s stockholders |
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2,338 |
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610 |
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5,055 |
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3,507 |
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Discontinued operations |
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12 |
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Loss from discontinued operations |
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(106 |
) |
(39 |
) |
(313 |
) |
(49 |
) |
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Net income attributable to noncontrolling interests |
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2 |
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(4 |
) |
6 |
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1 |
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Loss from discontinued operations attributable to Vale’s stockholders |
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(108 |
) |
(35 |
) |
(319 |
) |
(50 |
) |
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Net income |
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2,239 |
|
582 |
|
4,795 |
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3,483 |
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Net income attributable to noncontrolling interests |
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9 |
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7 |
|
59 |
|
26 |
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Net income attributable to Vale’s stockholders |
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2,230 |
|
575 |
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4,736 |
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3,457 |
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Earnings per share attributable to Vale’s stockholders: |
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Basic and diluted earnings per share(restated in note 4): |
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8 |
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Preferred share (US$) |
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0.43 |
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0.11 |
|
0.92 |
|
0.67 |
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Common share (US$) |
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0.43 |
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0.11 |
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0.92 |
|
0.67 |
|
(i) Period restated according to Note 12.
The accompanying notes are an integral part of these interim financial statements.
Consolidated Statement of Comprehensive Income
In millions of United States dollars
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Three-month period ended |
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Nine-month period ended |
| ||||
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2017 |
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2016 |
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2017 |
|
2016 |
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Net income |
|
2,239 |
|
582 |
|
4,795 |
|
3,483 |
|
|
Other comprehensive income: |
|
|
|
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|
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|
|
|
|
Items that will not be reclassified subsequently to the income statement |
|
|
|
|
|
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|
Cumulative translation adjustments |
|
1,797 |
|
(447 |
) |
1,158 |
|
6,660 |
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|
Retirement benefit obligations |
|
64 |
|
(43 |
) |
(249 |
) |
(311 |
) |
|
Tax recognized within other comprehensive income |
|
(19 |
) |
14 |
|
76 |
|
96 |
|
|
Total items that will not be reclassified subsequently to the income statement |
|
1,842 |
|
(476 |
) |
985 |
|
6,445 |
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|
|
|
|
|
|
|
|
|
|
|
|
Items that may be reclassified subsequently to the income statement |
|
|
|
|
|
|
|
|
|
|
Cumulative translation adjustments |
|
(603 |
) |
219 |
|
88 |
|
(3,459 |
) |
|
Cash flow hedge |
|
— |
|
— |
|
— |
|
6 |
|
|
Net investments hedge |
|
290 |
|
— |
|
162 |
|
— |
|
|
Equity results in associates and joint ventures, net of taxes |
|
— |
|
— |
|
— |
|
5 |
|
|
Transfer of realized results to net income, net of taxes |
|
— |
|
— |
|
— |
|
(78 |
) |
|
Tax recognized within other comprehensive income |
|
(180 |
) |
18 |
|
(209 |
) |
(124 |
) |
|
Total of items that may be reclassified subsequently to the income statement |
|
(493 |
) |
237 |
|
41 |
|
(3,650 |
) |
|
Total comprehensive income |
|
3,588 |
|
343 |
|
5,821 |
|
6,278 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income (loss) attributable to noncontrolling interests |
|
37 |
|
(3 |
) |
78 |
|
150 |
|
|
Comprehensive income attributable to Vale’s stockholders |
|
3,551 |
|
346 |
|
5,743 |
|
6,128 |
|
The accompanying notes are an integral part of these interim financial statements.
Consolidated Statement of Cash Flows
In millions of United States dollars
|
|
|
Three-month period ended |
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Nine-month period ended |
| ||||
|
|
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2017 |
|
2016 |
|
2017 |
|
2016 |
|
|
|
|
|
|
(i) |
|
|
|
(i) |
|
|
Cash flow from operating activities: |
|
|
|
|
|
|
|
|
|
|
Income before income taxes from continuing operations |
|
3,324 |
|
1,055 |
|
6,761 |
|
6,256 |
|
|
Continuing operations adjustments for: |
|
|
|
|
|
|
|
|
|
|
Equity results in associates and joint ventures |
|
(115 |
) |
(45 |
) |
(164 |
) |
(390 |
) |
|
Impairment and other results on non-current assets |
|
169 |
|
29 |
|
(123 |
) |
95 |
|
|
Impairment and other results in associates and joint ventures |
|
26 |
|
— |
|
121 |
|
1,113 |
|
|
Depreciation, amortization and depletion |
|
920 |
|
853 |
|
2,732 |
|
2,475 |
|
|
Financial results, net |
|
(220 |
) |
1,039 |
|
1,732 |
|
(2,447 |
) |
|
Changes in assets and liabilities: |
|
|
|
|
|
|
|
|
|
|
Accounts receivable |
|
(936 |
) |
127 |
|
1,104 |
|
(787 |
) |
|
Inventories |
|
(52 |
) |
(72 |
) |
(496 |
) |
(87 |
) |
|
Suppliers and contractors |
|
37 |
|
436 |
|
363 |
|
462 |
|
|
Provision - Payroll, related charges and others remunerations |
|
205 |
|
(15 |
) |
162 |
|
28 |
|
|
Deferred revenue - Gold stream |
|
— |
|
524 |
|
— |
|
524 |
|
|
Other assets and liabilities, net |
|
(235 |
) |
(739 |
) |
(928 |
) |
(299 |
) |
|
|
|
3,123 |
|
3,192 |
|
11,264 |
|
6,943 |
|
|
Interest on loans and borrowings paid |
|
(407 |
) |
(422 |
) |
(1,334 |
) |
(1,243 |
) |
|
Derivatives paid, net |
|
(113 |
) |
(191 |
) |
(223 |
) |
(1,054 |
) |
|
Interest on participative stockholders’ debentures paid |
|
— |
|
— |
|
(70 |
) |
(37 |
) |
|
Income taxes |
|
(84 |
) |
(88 |
) |
(489 |
) |
(342 |
) |
|
Income taxes - Settlement program |
|
(124 |
) |
(116 |
) |
(365 |
) |
(304 |
) |
|
Net cash provided by operating activities from continuing operations |
|
2,395 |
|
2,375 |
|
8,783 |
|
3,963 |
|
|
Net cash provided by operating activities from discontinued operations |
|
87 |
|
34 |
|
78 |
|
88 |
|
|
Net cash provided by operating activities |
|
2,482 |
|
2,409 |
|
8,861 |
|
4,051 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flow from investing activities: |
|
|
|
|
|
|
|
|
|
|
Financial investments redeemed (invested) |
|
(34 |
) |
69 |
|
(53 |
) |
46 |
|
|
Loans and advances - Net receipts (payments) (note 18) |
|
(101 |
) |
(123 |
) |
(332 |
) |
(126 |
) |
|
Additions to investments |
|
(57 |
) |
(4 |
) |
(74 |
) |
(230 |
) |
|
Additions to property, plant and equipment and intangible |
|
(856 |
) |
(1,150 |
) |
(2,853 |
) |
(3,640 |
) |
|
Proceeds from disposal of assets and investments (note 13) |
|
198 |
|
326 |
|
721 |
|
350 |
|
|
Dividends received from associates and joint ventures |
|
21 |
|
— |
|
103 |
|
115 |
|
|
Others investments activities |
|
4 |
|
51 |
|
(30 |
) |
4 |
|
|
Proceeds from gold stream transaction |
|
— |
|
276 |
|
— |
|
276 |
|
|
Net cash used in investing activities from continuing operations |
|
(825 |
) |
(555 |
) |
(2,518 |
) |
(3,205 |
) |
|
Net cash used in investing activities from discontinued operations |
|
(71 |
) |
(103 |
) |
(215 |
) |
(208 |
) |
|
Net cash used in investing activities |
|
(896 |
) |
(658 |
) |
(2,733 |
) |
(3,413 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Cash flow from financing activities: |
|
|
|
|
|
|
|
|
|
|
Loans and borrowings |
|
|
|
|
|
|
|
|
|
|
Additions |
|
351 |
|
1,573 |
|
1,801 |
|
6,206 |
|
|
Repayments |
|
(2,818 |
) |
(1,979 |
) |
(5,788 |
) |
(4,940 |
) |
|
Transactions with stockholders: |
|
|
|
|
|
|
|
|
|
|
Dividends and interest on capital attributed to stockholders |
|
— |
|
— |
|
(1,454 |
) |
— |
|
|
Dividends and interest on capital paid to noncontrolling interest |
|
(116 |
) |
(129 |
) |
(124 |
) |
(204 |
) |
|
Transactions with noncontrolling stockholders (note 13) |
|
— |
|
— |
|
(98 |
) |
(17 |
) |
|
Net cash provided by (used in) financing activities from continuing operations |
|
(2,583 |
) |
(535 |
) |
(5,663 |
) |
1,045 |
|
|
Net cash used in financing activities from discontinued operations |
|
(34 |
) |
(8 |
) |
(34 |
) |
(13 |
) |
|
Net cash provided by (used in) financing activities |
|
(2,617 |
) |
(543 |
) |
(5,697 |
) |
1,032 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Increase (decrease) in cash and cash equivalents |
|
(1,031 |
) |
1,208 |
|
431 |
|
1,670 |
|
|
Cash and cash equivalents in the beginning of the period |
|
5,720 |
|
4,168 |
|
4,262 |
|
3,591 |
|
|
Effect of exchange rate changes on cash and cash equivalents |
|
28 |
|
(7 |
) |
38 |
|
108 |
|
|
Effects of disposals of subsidiaries and merger, net on cash and cash equivalents |
|
2 |
|
— |
|
(12 |
) |
— |
|
|
Cash and cash equivalents at end of the period |
|
4,719 |
|
5,369 |
|
4,719 |
|
5,369 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-cash transactions: |
|
|
|
|
|
|
|
|
|
|
Additions to property, plant and equipment - capitalized loans and borrowing costs |
|
111 |
|
172 |
|
297 |
|
562 |
|
(i) Period restated according to Note 12.
The accompanying notes are an integral part of these interim financial statements.
Consolidated Statement of Financial Position
In millions of United States dollars
|
|
|
Notes |
|
September 30, |
|
December 31, |
|
|
Assets |
|
|
|
|
|
|
|
|
Current assets |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
17 |
|
4,719 |
|
4,262 |
|
|
Accounts receivable |
|
9 |
|
2,712 |
|
3,663 |
|
|
Other financial assets |
|
11 |
|
2,255 |
|
363 |
|
|
Inventories |
|
10 |
|
4,083 |
|
3,349 |
|
|
Prepaid income taxes |
|
|
|
333 |
|
159 |
|
|
Recoverable taxes |
|
|
|
1,125 |
|
1,625 |
|
|
Others |
|
|
|
337 |
|
557 |
|
|
|
|
|
|
15,564 |
|
13,978 |
|
|
|
|
|
|
|
|
|
|
|
Non-current assets held for sale |
|
12 |
|
4,325 |
|
8,589 |
|
|
|
|
|
|
19,889 |
|
22,567 |
|
|
Non-current assets |
|
|
|
|
|
|
|
|
Judicial deposits |
|
23(c) |
|
2,005 |
|
962 |
|
|
Other financial assets |
|
11 |
|
3,262 |
|
628 |
|
|
Prepaid income taxes |
|
|
|
539 |
|
527 |
|
|
Recoverable taxes |
|
|
|
651 |
|
727 |
|
|
Deferred income taxes |
|
7(a) |
|
6,651 |
|
7,343 |
|
|
Others |
|
|
|
309 |
|
274 |
|
|
|
|
|
|
13,417 |
|
10,461 |
|
|
|
|
|
|
|
|
|
|
|
Investments in associates and joint ventures |
|
14 |
|
3,855 |
|
3,696 |
|
|
Intangibles |
|
15 |
|
8,651 |
|
6,871 |
|
|
Property, plant and equipment |
|
16 |
|
56,280 |
|
55,419 |
|
|
|
|
|
|
82,203 |
|
76,447 |
|
|
Total assets |
|
|
|
102,092 |
|
99,014 |
|
|
|
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
|
|
|
Suppliers and contractors |
|
|
|
4,013 |
|
3,630 |
|
|
Loans and borrowings |
|
17 |
|
1,838 |
|
1,660 |
|
|
Other financial liabilities |
|
11 |
|
634 |
|
1,086 |
|
|
Taxes payable |
|
7(c) |
|
730 |
|
657 |
|
|
Provision for income taxes |
|
|
|
309 |
|
171 |
|
|
Liabilities related to associates and joint ventures |
|
18 |
|
301 |
|
292 |
|
|
Provisions |
|
22 |
|
1,197 |
|
952 |
|
|
Dividends and interest on capital |
|
|
|
— |
|
798 |
|
|
Others |
|
|
|
563 |
|
896 |
|
|
|
|
|
|
9,585 |
|
10,142 |
|
|
Liabilities associated with non-current assets held for sale |
|
12 |
|
1,132 |
|
1,090 |
|
|
|
|
|
|
10,717 |
|
11,232 |
|
|
Non-current liabilities |
|
|
|
|
|
|
|
|
Loans and borrowings |
|
17 |
|
23,952 |
|
27,662 |
|
|
Other financial liabilities |
|
11 |
|
2,963 |
|
2,127 |
|
|
Taxes payable |
|
7(c) |
|
5,168 |
|
4,961 |
|
|
Deferred income taxes |
|
7(a) |
|
1,604 |
|
1,700 |
|
|
Provisions |
|
22 |
|
6,877 |
|
5,748 |
|
|
Liabilities related to associates and joint ventures |
|
18 |
|
725 |
|
785 |
|
|
Deferred revenue - Gold stream |
|
|
|
1,922 |
|
2,090 |
|
|
Others |
|
|
|
1,682 |
|
1,685 |
|
|
|
|
|
|
44,893 |
|
46,758 |
|
|
Total liabilities |
|
|
|
55,610 |
|
57,990 |
|
|
|
|
|
|
|
|
|
|
|
Stockholders’ equity |
|
25 |
|
|
|
|
|
|
Equity attributable to Vale’s stockholders |
|
|
|
45,008 |
|
39,042 |
|
|
Equity attributable to noncontrolling interests |
|
|
|
1,474 |
|
1,982 |
|
|
Total stockholders’ equity |
|
|
|
46,482 |
|
41,024 |
|
|
Total liabilities and stockholders’ equity |
|
|
|
102,092 |
|
99,014 |
|
The accompanying notes are an integral part of these interim financial statements.
Statement of Changes in Equity
In millions of United States dollars
|
|
|
Share capital |
|
Results on |
|
Capital reserve |
|
Results from |
|
Profit |
|
Treasury |
|
Unrealized |
|
Cumulative |
|
Retained |
|
Equity |
|
Equity |
|
Total |
|
|
Balance at December 31, 2016 |
|
61,614 |
|
(152 |
) |
— |
|
(699 |
) |
4,203 |
|
(1,477 |
) |
(1,147 |
) |
(23,300 |
) |
— |
|
39,042 |
|
1,982 |
|
41,024 |
|
|
Net income |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
4,736 |
|
4,736 |
|
59 |
|
4,795 |
|
|
Other comprehensive income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retirement benefit obligations |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
(173 |
) |
— |
|
— |
|
(173 |
) |
— |
|
(173 |
) |
|
Net investments hedge (note 17 (vi)) |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
107 |
|
— |
|
107 |
|
— |
|
107 |
|
|
Translation adjustments |
|
— |
|
— |
|
— |
|
— |
|
127 |
|
— |
|
(18 |
) |
936 |
|
28 |
|
1,073 |
|
19 |
|
1,092 |
|
|
Transactions with stockholders: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends and interest on capital of Vale’s stockholders |
|
— |
|
— |
|
— |
|
— |
|
(658 |
) |
— |
|
— |
|
— |
|
— |
|
(658 |
) |
— |
|
(658 |
) |
|
Dividends of noncontrolling interest |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
(107 |
) |
(107 |
) |
|
Acquisitions and disposal of noncontrolling interest (note 13) |
|
— |
|
— |
|
— |
|
(277 |
) |
— |
|
— |
|
— |
|
— |
|
— |
|
(277 |
) |
(512 |
) |
(789 |
) |
|
Capitalization of noncontrolling interest advances |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
33 |
|
33 |
|
|
Merger of Valepar - Note 4 |
|
— |
|
— |
|
1,158 |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
1,158 |
|
— |
|
1,158 |
|
|
Balance at September 30, 2017 |
|
61,614 |
|
(152 |
) |
1,158 |
|
(976 |
) |
3,672 |
|
(1,477 |
) |
(1,338 |
) |
(22,257 |
) |
4,764 |
|
45,008 |
|
1,474 |
|
46,482 |
|
|
|
|
Share capital |
|
Results on |
|
Capital reserve |
|
Results from |
|
Profit |
|
Treasury |
|
Unrealized |
|
Cumulative |
|
Retained |
|
Equity |
|
Equity |
|
Total |
|
|
Balance at December 31, 2015 |
|
61,614 |
|
(152 |
) |
— |
|
(702 |
) |
985 |
|
(1,477 |
) |
(992 |
) |
(25,687 |
) |
— |
|
33,589 |
|
2,115 |
|
35,704 |
|
|
Net income |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
3,457 |
|
3,457 |
|
26 |
|
3,483 |
|
|
Other comprehensive income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
|
|
Retirement benefit obligations |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
(215 |
) |
— |
|
— |
|
(215 |
) |
— |
|
(215 |
) |
|
Cash flow hedge |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
7 |
|
— |
|
— |
|
7 |
|
— |
|
7 |
|
|
Translation adjustments |
|
— |
|
— |
|
— |
|
— |
|
200 |
|
— |
|
(90 |
) |
2,608 |
|
161 |
|
2,879 |
|
124 |
|
3,003 |
|
|
Transactions with stockholders: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends of noncontrolling interest |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
(174 |
) |
(174 |
) |
|
Acquisitions and disposal of noncontrolling interest (note 13) |
|
— |
|
— |
|
— |
|
2 |
|
— |
|
— |
|
— |
|
— |
|
— |
|
2 |
|
— |
|
2 |
|
|
Capitalization of noncontrolling interest advances |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
21 |
|
21 |
|
|
Balance at September 30, 2016 |
|
61,614 |
|
(152 |
) |
— |
|
(700 |
) |
1,185 |
|
(1,477 |
) |
(1,290 |
) |
(23,079 |
) |
3,618 |
|
39,719 |
|
2,112 |
|
41,831 |
|
The accompanying notes are an integral part of these interim financial statements.
Selected Notes to the Interim Financial Statements
Expressed in millions of United States dollar, unless otherwise stated
Vale S.A. (the “Parent Company”) is a public company headquartered in the city of Rio de Janeiro, Brazil with securities traded on the stock exchanges of São Paulo — B3 S.A. (Vale3 and Vale5), New York - NYSE (VALE and VALE.P), Paris - NYSE Euronext (Vale3 and Vale5) and Madrid — LATIBEX (XVALO and XVALP).
Vale S.A. and its direct and indirect subsidiaries (“Vale” or “Company”) are global producers of iron ore and iron ore pellets, key raw materials for steelmaking, and producers of nickel, which is used to produce stainless steel and metal alloys employed in the production of several products. The Company also produces copper, metallurgical and thermal coal, manganese ore, ferroalloys, platinum group metals, gold, silver and cobalt. The information by segment is presented in note 3.
2. Basis for preparation of the interim financial statements
a) Statement of compliance
The condensed consolidated interim financial statements of the Company (“interim financial statements”) present the accounts of the Company and have been prepared in accordance with IAS 34 Interim Financial Reporting of the International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”).
b) Basis of presentation
The interim financial statements have been prepared under the historical cost convention as adjusted to reflect: (i) the fair value of financial instruments measured at fair value through the income statement or available-for-sale financial instruments measured at fair value through the statement of comprehensive income; and (ii) impairment of assets.
The accounting practices, accounting estimates and judgments, risk management and measurement methods are the same as those adopted when preparing the financial statements for the year ended December 31, 2016. The accounting policy for recognizing and measuring income taxes in the interim period is described in note 7. These interim financial statements were prepared to update users about relevant information presented in the period and should be read in conjunction with the financial statements for the year ended December 31, 2016.
The consolidated comparative information for the periods ended September 30, 2016 was restated for the purposes of applying IFRS 5 “Non-current assets held for sale and discontinued operations” after approval by the Board of Directors of the sale of the fertilizers assets, as presented in Note 12. Also earnings per share were restated as disclosed in note 4.
The interim financial statements of the Company and its associates and joint ventures are measured using the currency of the primary economic environment in which the entity operates (“functional currency”), which in the case of the Parent Company is the Brazilian real (“BRL” or “R$”). For presentation purposes, these interim financial statements are presented in United States dollar (“USD” or “US$”) as the Company believes that this is how international investors analyze the interim financial statements.
The exchange rates used by the Company for major currencies to translate its operations are as follows:
|
|
|
|
|
|
|
Average rate for the |
| ||||||
|
|
|
Closing rate |
|
Three-month period ended |
|
Nine-month period ended |
| ||||||
|
|
|
September 30, |
|
December 31, |
|
September 30, |
|
September 30, |
|
September 30, |
|
September 30, |
|
|
US Dollar (“US$”) |
|
3.1680 |
|
3.2591 |
|
3.1639 |
|
3.2460 |
|
3.1750 |
|
3.5450 |
|
|
Canadian dollar (“CAD”) |
|
2.5334 |
|
2.4258 |
|
2.5235 |
|
2.4881 |
|
2.4319 |
|
2.6802 |
|
|
Australian dollar (“AUD”) |
|
2.4837 |
|
2.3560 |
|
2.4969 |
|
2.4616 |
|
2.4320 |
|
2.6273 |
|
|
Euro (“EUR” or “€”) |
|
3.7430 |
|
3.4384 |
|
3.7162 |
|
3.6232 |
|
3.5392 |
|
3.9549 |
|
Subsequent events were evaluated through October 25, 2017, which is the date the interim financial statements were approved by the Board of Directors.
c) Accounting standards issued but not yet effective
The standards and interpretations issued by IASB relevant to the Company but not yet effective are the same as those applicable when preparing the financial statements for the year ended December 31, 2016.
3. Information by business segment and by geographic area
The information presented to the Executive Board on the performance of each segment is derived from the accounting records, adjusted for reallocations between segments.
a) Adjusted EBITDA
Adjusted EBITDA is used by management to support the decision making process for segments. The definition of adjusted EBITDA for the Company is the operating income or loss excluding (i) the depreciation, depletion and amortization, (ii) results on measurement or sales of non-current assets, (iii) impairment, (iv) onerous contracts and plus (v) dividends received and interest from associates and joint ventures.
|
|
|
Three-month period ended September 30, 2017 |
| ||||||||||||
|
|
|
Net operating |
|
Cost of goods |
|
Sales, |
|
Research and |
|
Pre operating |
|
Dividends |
|
Adjusted |
|
|
Ferrous minerals |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Iron ore |
|
5,131 |
|
(2,086 |
) |
(89 |
) |
(22 |
) |
(47 |
) |
1 |
|
2,888 |
|
|
Iron ore Pellets |
|
1,441 |
|
(733 |
) |
(21 |
) |
(5 |
) |
(3 |
) |
— |
|
679 |
|
|
Ferroalloys and manganese |
|
131 |
|
(71 |
) |
(4 |
) |
— |
|
1 |
|
— |
|
57 |
|
|
Other ferrous products and services |
|
117 |
|
(77 |
) |
(2 |
) |
— |
|
— |
|
12 |
|
50 |
|
|
|
|
6,820 |
|
(2,967 |
) |
(116 |
) |
(27 |
) |
(49 |
) |
13 |
|
3,674 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Coal |
|
360 |
|
(368 |
) |
(9 |
) |
(4 |
) |
— |
|
67 |
|
46 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Base metals |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nickel and other products |
|
1,168 |
|
(883 |
) |
(44 |
) |
(14 |
) |
— |
|
— |
|
227 |
|
|
Copper |
|
594 |
|
(246 |
) |
(8 |
) |
(6 |
) |
— |
|
— |
|
334 |
|
|
|
|
1,762 |
|
(1,129 |
) |
(52 |
) |
(20 |
) |
— |
|
— |
|
561 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Others |
|
108 |
|
(80 |
) |
(86 |
) |
(40 |
) |
1 |
|
8 |
|
(89 |
) |
|
Total of continuing operations |
|
9,050 |
|
(4,544 |
) |
(263 |
) |
(91 |
) |
(48 |
) |
88 |
|
4,192 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Discontinued operations (Fertilizers) |
|
533 |
|
(490 |
) |
(23 |
) |
(3 |
) |
(5 |
) |
— |
|
12 |
|
|
Total |
|
9,583 |
|
(5,034 |
) |
(286 |
) |
(94 |
) |
(53 |
) |
88 |
|
4,204 |
|
|
|
|
Three-month period ended September 30, 2016 |
| ||||||||||
|
|
|
Net operating |
|
Cost of goods sold |
|
Sales, |
|
Research and |
|
Pre operating and |
|
Adjusted EBITDA |
|
|
Ferrous minerals |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Iron ore |
|
3,782 |
|
(1,648 |
) |
(80 |
) |
(25 |
) |
(40 |
) |
1,989 |
|
|
Iron ore Pellets |
|
991 |
|
(512 |
) |
(8 |
) |
(4 |
) |
(5 |
) |
462 |
|
|
Ferroalloys and manganese |
|
76 |
|
(63 |
) |
(6 |
) |
— |
|
(3 |
) |
4 |
|
|
Other ferrous products and services |
|
110 |
|
(70 |
) |
(1 |
) |
— |
|
(1 |
) |
38 |
|
|
|
|
4,959 |
|
(2,293 |
) |
(95 |
) |
(29 |
) |
(49 |
) |
2,493 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Coal |
|
163 |
|
(157 |
) |
3 |
|
(3 |
) |
(13 |
) |
(7 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Base metals |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nickel and other products |
|
1,159 |
|
(792 |
) |
(31 |
) |
(21 |
) |
(26 |
) |
289 |
|
|
Copper |
|
420 |
|
(255 |
) |
(2 |
) |
(2 |
) |
— |
|
161 |
|
|
Other base metals products |
|
— |
|
— |
|
150 |
|
— |
|
— |
|
150 |
|
|
|
|
1,579 |
|
(1,047 |
) |
117 |
|
(23 |
) |
(26 |
) |
600 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Others |
|
25 |
|
(58 |
) |
(64 |
) |
(25 |
) |
— |
|
(122 |
) |
|
Total of continuing operations |
|
6,726 |
|
(3,555 |
) |
(39 |
) |
(80 |
) |
(88 |
) |
2,964 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Discontinued operations (Fertilizers) |
|
598 |
|
(501 |
) |
(29 |
) |
(5 |
) |
(4 |
) |
59 |
|
|
Total |
|
7,324 |
|
(4,056 |
) |
(68 |
) |
(85 |
) |
(92 |
) |
3,023 |
|
|
|
|
Nine-month period ended September 30, 2017 |
| ||||||||||||
|
|
|
Net operating |
|
Cost of goods |
|
Sales, |
|
Research and |
|
Pre operating |
|
Dividends |
|
Adjusted |
|
|
Ferrous minerals |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Iron ore |
|
13,501 |
|
(5,648 |
) |
(181 |
) |
(61 |
) |
(128 |
) |
1 |
|
7,484 |
|
|
Iron ore Pellets |
|
4,231 |
|
(2,097 |
) |
(43 |
) |
(13 |
) |
(5 |
) |
37 |
|
2,110 |
|
|
Ferroalloys and manganese |
|
334 |
|
(196 |
) |
(8 |
) |
— |
|
(3 |
) |
— |
|
127 |
|
|
Other ferrous products and services |
|
365 |
|
(230 |
) |
6 |
|
(1 |
) |
— |
|
12 |
|
152 |
|
|
|
|
18,431 |
|
(8,171 |
) |
(226 |
) |
(75 |
) |
(136 |
) |
50 |
|
9,873 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Coal |
|
1,165 |
|
(921 |
) |
(32 |
) |
(11 |
) |
(4 |
) |
67 |
|
264 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Base metals |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nickel and other products |
|
3,309 |
|
(2,563 |
) |
(119 |
) |
(34 |
) |
(50 |
) |
— |
|
543 |
|
|
Copper |
|
1,562 |
|
(723 |
) |
(15 |
) |
(10 |
) |
— |
|
— |
|
814 |
|
|
|
|
4,871 |
|
(3,286 |
) |
(134 |
) |
(44 |
) |
(50 |
) |
— |
|
1,357 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Others |
|
333 |
|
(304 |
) |
(239 |
) |
(106 |
) |
(2 |
) |
53 |
|
(265 |
) |
|
Total of continuing operations |
|
24,800 |
|
(12,682 |
) |
(631 |
) |
(236 |
) |
(192 |
) |
170 |
|
11,229 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Discontinued operations (Fertilizers) |
|
1,304 |
|
(1,201 |
) |
(58 |
) |
(8 |
) |
(26 |
) |
— |
|
11 |
|
|
Total |
|
26,104 |
|
(13,883 |
) |
(689 |
) |
(244 |
) |
(218 |
) |
170 |
|
11,240 |
|
|
|
|
Nine-month period ended September 30, 2016 |
| ||||||||||||
|
|
|
Net operating |
|
Cost of goods |
|
Sales, |
|
Research and |
|
Pre operating |
|
Dividends |
|
Adjusted |
|
|
Ferrous minerals |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Iron ore |
|
10,208 |
|
(4,609 |
) |
(386 |
) |
(52 |
) |
(107 |
) |
— |
|
5,054 |
|
|
Iron ore Pellets |
|
2,611 |
|
(1,408 |
) |
(43 |
) |
(8 |
) |
(17 |
) |
60 |
|
1,195 |
|
|
Ferroalloys and manganese |
|
185 |
|
(162 |
) |
(3 |
) |
— |
|
(9 |
) |
— |
|
11 |
|
|
Other ferrous products and services |
|
300 |
|
(192 |
) |
2 |
|
(1 |
) |
(2 |
) |
— |
|
107 |
|
|
|
|
13,304 |
|
(6,371 |
) |
(430 |
) |
(61 |
) |
(135 |
) |
60 |
|
6,367 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Coal |
|
463 |
|
(687 |
) |
46 |
|
(8 |
) |
(24 |
) |
— |
|
(210 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Base metals |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nickel and other products |
|
3,209 |
|
(2,332 |
) |
(55 |
) |
(57 |
) |
(84 |
) |
— |
|
681 |
|
|
Copper |
|
1,170 |
|
(684 |
) |
(9 |
) |
(3 |
) |
— |
|
— |
|
474 |
|
|
Other base metals products |
|
— |
|
— |
|
150 |
|
— |
|
— |
|
— |
|
150 |
|
|
|
|
4,379 |
|
(3,016 |
) |
86 |
|
(60 |
) |
(84 |
) |
— |
|
1,305 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Others |
|
77 |
|
(158 |
) |
(106 |
) |
(78 |
) |
(2 |
) |
55 |
|
(212 |
) |
|
Total of continuing operations |
|
18,223 |
|
(10,232 |
) |
(404 |
) |
(207 |
) |
(245 |
) |
115 |
|
7,250 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Discontinued operations (Fertilizers) |
|
1,446 |
|
(1,190 |
) |
(68 |
) |
(16 |
) |
(14 |
) |
3 |
|
161 |
|
|
Total |
|
19,669 |
|
(11,422 |
) |
(472 |
) |
||||||||