Reference Form 2012
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Reference Form 2012 1.1. Stament and Identification of the Responsible Individual Name of the individual responsible Murilo Pinto Ferreira for the content of the Reference Form Position of responsible individual Executive Director Name of the individual responsible Luciano Siani Pires for the content of the Reference Form Position of responsible individual CFO and Director of Investor Relations The above-mentioned directors stated that: a. They have reviewed the Reference Form; b. All the information contained in the Reference Form complies with Instruction CVM No. 480, in particular Articles 14 through 19; c. All the information contained therein is an accurate, precise and complete representation of the economic and financial situation of the issuer and of the risks inherent to its activities and the securities issued by it. 2.1/2.2 Identification and remuneration of Auditors: Does it have auditor? YES CVM (Securities Commission) 287-9 Code Type of Auditor Domestic Name/Corporate name PricewaterhouseCoopers Auditores Independentes CPF/CNPJ 61.562.112/0002-01 Service start date: 07/24/2009 Service end date: Description of the service Provision of professional services for auditing the annual report from Vale contracted and controlled companies, both for domestic and international purposes, comfort letters for issuance of debts and equities at the Brazilian and international market, certification of internal controls in order to comply with “Section 404” of Sarbanes-Oxley Act of 2002; provision of services related to the audit. Total amount of the In the fiscal year ended December 31, 2012, the fees received by company remuneration of independent independent auditors for the provision of services to Vale and its affiliates auditors itemized per service were the following: Reais (thousand): Financial audit: 17,278 Sarbanes-Oxley Act Audit: 2,986 Audit-related services: 1,142 Total independent audit expenses: 21,406 Other (**) 516 – 2% (*) Total of services 21,922 (*) Percentage of independent audit service fees (**) These services are retained for periods shorter than one year Justification for replacement Reason submitted by the auditor in case of disagreement of the issuer justification Name of the supervisor Period of provision of CPE Address responsible service João César de Oliveira Lima 06/01/2012 744.808.477-15 Avenida José da Silva de Junior Azevedo Neto nº 200 – Bloco 3 - Torre Evolution IV – rooms 101, 103 to 108 and 201 to 208, Barra da Tijuca, City and State do Rio de Janeiro-RJ. e-mail: [email protected] Phone: (21) 3232-6000 Marcos Donizete Panassol 07/24/2009 to 05/31/2012 063.702.238-67 Rua da Candelaria, 65/ 11,14,15 andares, Centro, Rio de Janeiro, RJ, Brasil, CEP 20091-020 Email: [email protected] Telephone: (21) 3232-6112 2.3 Other relevant information Vale has specific internal procedures for pre-approval of engagements for their external auditors in order to avoid conflict of interest or loss of objectivity by its independent external auditors. Vale’s policies regarding independent auditors and other services unrelated to external auditing are grounded in principles that safeguard their independence. In line with best corporate governance practices, all services provided by the independent auditors are pre-approved by the Supervisory Board, and the independent auditors provide us with an independence letter. 3.1 Consolidated Financial Information (Reais/Unit) Fiscal Year (12/31/2012) Fiscal Year (12/31/2011) Fiscal year (12/31/2010) Shareholders’ equity 155,633,216,000.00 146,690,367,000.00 116,326,864,000.00 Total Assets 266,921,654,000.00 241,783,112,000.00 214,662,114,000.00 Realized Net 93,511,477,000.00 103,195,407,000.00 83,225,006,000.00 Revenue/Temporary Revenue/Insurance Premium Gross Income 41,514,098,000.00 62,706,537,000.00 49,468,940,000.00 Net Income 9,733,695,883.37 37,813,724,944.02 30,070,050,530.41 Number of Shares, 5,153,374,926 5,097,293,079 5,218,279,135 excluding treasury Asset Value of Share 29.57 28.78 22.29 (in R$/unit) Earnings per Share 1.91 7.21 5.76 3.2 Non-Accounting measurements a. value of non-accounting measurements The Company uses EBITDA as a non-accounting measurement. In 2012, the EBITDA of the Company was established in the amount of R$ 27,086,636 thousand, while in 2011 and 2010 these amounts were R$ 58,817,827 thousand and R$ 46,378,648 thousand respectively. b. reconciliations between amounts reported and the values of audited financial statements In R$ thousands 2012 2011 2010 Operating profit - EBIT 17,757,589 50,416,740 40,490,338 Depreciation / Amortization of goodwill 8,397,427 6,637,733 5,741,372 EBITDA (LAJIDA) 26,155,016 57,054,473 46,231,710 Dividends received 931,620 1,763,354 146,938 EBITDA (LAJIDA) - adjusted 27,086,636 58,817,827 46,378,648 Depreciation / Amortization of goodwill (8,397,427) (6,637,733) (5,741,372) Dividends received (931,620) (1,763,354) (146,938) Reduction in recoverable value of intangible assets (4,001,986) Corporate results 1,240,589 1,857,458 (48,081) Operations -- (221,708) Net financial income (8,405,110) (6,352,526) (2,763,398) Income and social contribution 2,641,850 (8,513,816) (7,035,459) Minority interests -- - Net income 9,232,932 37,407,856 30,421,692 Loss (profit) to non-controlling shareholders (500,764) (405,868) 351,641 Profit to non-controlling shareholders 9,733,696 37,813,724 30,070,051 c. why the Company believes that this measurement is more appropriate for a correct understanding of its financial situation and results of operations EBITDA is a measure of the company’s cash generation, aiming to assist the assessment by the Administration of the performance of operations. The analysis of operating results through EBITDA has the benefit of canceling the effect of non-operating gains or losses generated by financial transactions or the effect of taxes. We calculate the EBIDTA according to the terms set forth in CMV Instruction no. 527, from October 4, 2012, as follows: the term’s net results, plus the taxes over the profit, of the net financial expenses, of financial revenues, and of depreciation, amortization, and exhaustion. We also calculate the adjusted EBITDA according to the net EBITDA from the corporate interest, from reduction in the recoverable asset of values, from non-recurrent items, and from depreciations, amortizations and exhaustions, plus dividends from joint ventures and sister companies. We understand that the adjusted EBITDA has a more precise measure of cash generation in the Company, since it excludes non-recurring and non-cash effects. The consolidated cash generation measured by EBITDA (earnings before financial results, income from corporate interests, income tax and social contributions, depreciation, depletion and amortization, and plus dividends received) is not a BR GAAP/IFRS measurement and does not represent cash flow for the periods presented and therefore should not be considered as an alternative to net income (loss), as an isolated indicator of operating performance or as an alternative to cash flow as a source of liquidity. The EBITDA definition used by Vale may not be comparable with EBITDA, by definition, for other companies. 3.3 Events subsequent to the latest financial statements Vale does not provide guidance in the form of quantitative predictions about its future financial performance. The Company seeks to disseminate as much information about its vision of the various markets where it operates, guidelines, and implementation strategies in order to provide investors in the capital markets a basis for the formation of expectations about its performance in the medium and long term. The financial statements for the year ended December 31, 2012 were issued and filed with the CVM on February 27, 2013. Below is a description of subsequent events, which were included in the financial statements in compliance with the rules in IAS 24, approved by CVMº 593/09: Sales of Gold by-products On February 5, 2013, Vale signed a contract with Silver Wheaton Corp. (”SLW”) to sell 25% of payable gold flow produced at the Salobo copper mine over its lifetime, and 70% of payable gold flow produced at the Sudbury nickel mines -- Sudbury – Coleman, Copper Cliff, Creighton, Garson, Stobie, Totten and Victor – 20 years. Vale will receive an initial payment in the amount of US$ 1.9 billion (approximately R$ 3.8 billion), plus another ten million from SLW warrants with a unit price in the amount of US$ 65 for ten years. The amount of US$ 1.33 billion (approximately R$ 2.64 billion) will be paid with 25% of the payable gold produced at Salobo, while US$ 570 million (approximately R$ 1,133 million) plus the ten million in SLW warrants that will be receive in exchange for the 70% of payable gold produced at the Sudbury mines. Additionally, in the future, Vale will receive payments in cash for each ounce (oz) of gold delivered to SLW as per the terms of the agreements. The payments are equal to the lowest value obtained between US$ 400.00 ounces (plus an annual inflation adjustment of 1% starting in 2016 in the case of Salobo) and the market price. Also, depending on its decision to expand the capacity of Salobo’s copper ore processing to more than 28 Mtpa before 2031, Vale may receive an additional amount that will be set within a range of US$ 67.00 (approximately R$ 133.00) to US$ 400.00 (approximately R$ 795.00), depending on the time and extent of the expansion.