NEW WAYS AND GROWTH FOR ALL Profile Companhia de Concessões Rodoviárias (CCR) is the largest motorway concessions operator in Brazil. A strategic holding company, CCR, controls five concessionaires and
2002 T manages 1,290 kilometers of motorways, representing 14% of the Brazilian motorways. The revenue generated
Companhia de Concessões Rodoviárias by CCR’s concessionaires represents 35% of the sector’s
ANNUAL REPOR CCR 2 total revenue in Brazil.
CCR’s five concessionaires are:
• AutoBAn - (317 km) linking São Paulo to Campinas and Limeira
• NovaDutra - (402 km) linking São Paulo to Rio de Janeiro
• Rodonorte - (488 km) linking Curitiba to Apucarana, and Ponta Grossa to Jaguariaíva
• Ponte - (23 km) linking Rio de Janeiro to Niterói
• Via Lagos - (60 km) linking cities in the Lakes Region in the State of Rio de Janeiro The company was founded on September 23, 1998, when five large Brazilian business groups (Andrade Gutierrez, Camargo Corrêa, Odebrecht, Serveng, and SVE) which at the time were all separately managing motorway concessions, decided to come together and transfer their concessions to the new entity, CCR. In 2001, Brisa, the
largest Portuguese motorway concession operator joined PROFILE the group of shareholders, as a strategic partner,
2002 contributing its 30 years of management experience and know-how.
Companhia de Concessões Rodoviárias
CCR manages some of the nation’s most important
CCR 3 ANNUAL REPORT motorways, in terms of traffic volume, and has achieved high approval ratings for its operations, providing top quality service with the best cost/benefit ratio to its users.
CCR’s concessionaires activities go beyond motorway operation and maintenance. It includes a broad range of services offered to its users, from electronic toll collection Index systems to several types of assistance to motorists and vehicles on the motorways. Profile 2 Shareholder Structure 4 What distinguishes CCR from other concessionaires is its Operational Summary 5 ability to grow. Given its infrastructure and experience, the Highlights of 2002 6 Company is prepared to acquire other concessionaires and Administration 8 Message to Shareholders 10 immediately begin operating them, with the same high Activity Report 14 standards of quality as the ones it already operates. Analysis of Performance 26 CCR is a publicly traded company. Its common shares Stock Market 40 Strategic Management 44 started trading on the Novo Mercado of the São Paulo Human Resources 45 Stock Exchange (Bovespa), on February 1, 2002. To list on Social and Environmental Report 48 the Novo Mercado, the Company adopted strict rules of Motorway Concession Program 54 Awards and Recognition 57 corporate governance that guarantee transparency and Words of Appreciation 59 respect for all shareholders. Financial Statements 61 Addresses 102 Shareholder Structure
ANDRADE CAMARGO BRISA ODEBRECHT SERVENG SVE MARKET GUTIERREZ CORRÊA Part. (BR) 16.0% 16.9% 16.9% 12.3% 5.1% 17.0% 15.8%
CCR
Centralized Related Concessions Services Businesses
Shared Engineering
SHAREHOLDER STRUCTURE AutoBAn Nova Dutra Ponte Via lagos Rodonorte Parks Services Center Center 100,00% 100,00% 100,00% 100,00% 74.24% 100,00% 100,00% 74.24%
2002
T
Companhia de Concessões Rodoviárias In 2002, CCR created two new subsidiaries with the objective of improving service
CCR ANNUAL REPOR 4 quality, standardizing processes, and developing more advanced operating controls: • Actua is a “shared services center” that centralizes and coordinates all of the administrative areas of the concessionaires;
• Engelog is an “engineering center” that coordinates construction and develops engineering solutions with turn-key contracts, for the other subsidiaries of the group.
Controlling Group The control of the capital stock of CCR , representing 84.2% of the companies registered share capital, is held by its original five shareholders, and by Brisa, one of Europe’s main motorway concession companies.
Shareholders’ Agreement The controlling group signed a shareholders’ agreement, valid through 2026, which establishes the basis for their partnership, to avoid any potential conflicts of interest. Through this agreement the shareholders commit themselves to voting as a block at the general meetings, according to what was decided at a meeting of the controlling group held ahead of the general meeting. At these meetings, approval is reached by simple majority, except in certain situations that require a qualified majority of 67%.
This way, CCR will always have preference over the controlling shareholders and their affiliated companies, when participating in new business in the motorway concession sector.
This agreement also allows for the hiring of an independent specialized firm to check on any potential conflict of interest in the commercial relationships between CCR and its controllers. Operating Summary
consolidated ve= vehicle equivalent operating indicators 2001 2002 Var. No. of vehicle equivalent in millions 215.1 229.9 6.9 % 300 $5
Average toll per vehicle equivalent in R$ 4.15 4.51 8.8 % $4 Y 250 $3 economic indicators 2001* 2002 Var. 200 $2 Net operating income in R$ millions (a) 870.3 1,000.3 14.9% 150 $1 EBITDA in R$ millions (b) 300.9 286.6 -4.7% Operating margin (1) 34.6% 28.7% -5.9% 100 $0 1998 1999 2000 2001 2002
OPERATIONAL SUMMAR OPERATIONAL EBITDA in R$ millions (2) 441.7 472.2 7.0 % traffic in millions of vehicles EBITDA / total assets 22.2% 20.5% 1.7% toll in R$ Net profits in R$ millions -13.5 -119.5 na 2002 Net profits / net assets -3.8% -23.6% na Free cash flow in R$ millions (3) -81.0 158.9 na $1400 33%
Companhia de Concessões Rodoviárias $1200 28%
CCR $1000 5 ANNUAL REPORT main figures Dec/01* Dec/02 Var. 23% $800 18% Total assets in R$ millions 1,983 2,302 16.1% $600 13% Net assets in R$ millions 349 506 45.0% $400 Permanent assets in R$ millions 1,649 1,760 6.7% $200 8% $0 3% 1998 1999 2000 2001 2002 financial indexes Dec/01* Dec/02 Var. net revenue in R$ millions Net financial debt in R$ millions 1,178 1,309 11.1 % General liquidity 0,21x 0,30x —
$600 Shares 2001 2002 Var. $500 Volume traded Bovespa in R$ millions — 90,1 — $400 Share price appreciation (4) — -58,4% — $300 Share price on 12/30/2002 in R$/share — 7,40 — $200 $100 $0 1998 1999 2000 2001 2002 investments in R$ millions
* takes into account new accounting treatment (see following pages) 3000 $18 (1) operating profits = operating profits before the financial results 2500 $16 (2) EBITDA = earnings before interest, tax, depreciation, amortization $14 2000 (3) free cash flow = net profits + financial disbursements x (1 - marginal IT&SC tax) $12 + depreciation + amortization + other non-cash operating expenses - investments 1500 $10 in fixed assets - investments in operating capital 1000 $8 (4) related to the period running from the beginning of negotiations (02/01/2002) $6 to the last session of the year (12/30/2002), based on the closing price 500 $4 na= not applicable 0 $2 jul oct jun feb sep apr dec nov mar aug may shares traded in R$ millions share price in R$ 2002 Highlights Initial public offering (IPO) and start of trading on the Novo Mercado CCR was the first company to list its shares on Bovespa’s Novo Mercado. This event represented the beginning of the new growth period for the Company showing a strong commitment to its new shareholders. On February 1, 2002, CCR’s common shares began trading on the Bovespa, under the ticker CCRO3.
Restructuring and
HIGHLIGHTS OF 2002 consolidating the motorway management model
2002 The organizational restructuring, which began in August
T 2002, transformed CCR into the strategic controller of all its concessionaires. The planning, finance, engineering and
Companhia de Concessões Rodoviárias
service departments were centralized so that the
CCR ANNUAL REPOR 6 concessionaires could focus on their core business: operating motorways. The first objective of this restructuring was to establish a motorway management model based on the standardization of all processes, thus obtaining new synergies, more agile decision making, increased volume, efficiency, and better quality of the services provided. This way, CCR prepared itself to grow and acquire new concessions, while also strengthening its corporate governance practices.
Impact of the Real devaluation against the US dollar The increased risk aversion on the part of the international financial system, especially after the scandals that occurred in large US corporations, has caused international banks to suspend their commercial lines of credit to emerging economies, thus affecting the flow of foreign currency to Brazil. In addition, the economy suffered from uncertainties surrounding the election, the changing government and the fear that the Argentine crisis would spread. These factors pushed up the country-risk index to record levels and contributed to the destabilization of the financial and foreign exchange markets. The result was a steep devaluation of the Real against US dollar, which pushed internal costs and wholesale prices up, and negatively affected CCR’s results, since a portion of the Company’s debt is in US dollars.
Change in accounting treatment In November 2002, with the permission of the Comissão de Valores Mobiliários (CVM or Brazilian Securities and Exchange Commission), CCR changed the accounting treatment of the financial obligations of two of its concessionaires, AutoBAn and Via Lagos. This change had a positive and significant impact on CCR’s 2002 results.
Achievement of all operating goals
Despite the complex macroeconomic and political scenario 2002 throughout the past year, CCR and its concessionaires achieved
all their operating goals, including revenue forecasts. Companhia de Concessões Rodoviárias
CCR 7 ANNUAL REPORT Administration Board of Directors Name Position Date Elected Paulo de Tarso Camargo Opice Chairman 3/21/2002 Newton Sérgio de Souza Vice-Chairman 3/21/2002 Amin Farid Safatle Director 3/21/2002 Ana Dolores Moura Carneiro de Novaes Independent Director 3/21/2002 Eduardo Borges Andrade Director 3/21/2002 Fernando Márcio Queiros Director 3/21/2002 João Pedro Ribeiro de Azevedo Coutinho Director 3/21/2002 Julio César Borges Director 3/21/2002 Manoel Ailton Soares dos Reis Director 3/21/2002 Ricardo Bisordi de Oliveira Lima Director 3/21/2002 Ricardo Coutinho de Sena Director 3/21/2002 Vitor Paulo Saltão da Silva Director 3/21/2002
ADMINISTRATION Executive Board
2002
T Name Age Position Term of Office Renato Alves Vale 54 CEO until 2004 Formerly CEO of AutoBAn and Director of Engineering at NovaDutra. Before entering the toll road
Companhia de Concessões Rodoviárias business in 1995, Mr. Vale was a director in large domestic construction companies. He holds a Civil
CCR ANNUAL REPOR 8 Engineering degree from the Federal University of Minas Gerais.
Márcio José Batista 54 Vice President until 2004 Formerly CEO of AutoBAn and a member of the Board of AutoBAn, NovaDutra, and Rodonorte. For 22 years, he worked at CBPO (Cia. Brasileira de Projetos e Obras), where he was Director of Planning and Development, Engineering, Equipment, Administration, Systems, and Information. He also held the positions of Director of the Securities Market and Regional Director of CBPO. He holds a Civil Engineering degree and has worked on several constructions projects for motorways, railroads, hydroelectric plants, subways, and underwater pipelines. Director of Finance and Líbano Miranda Barroso 38 Investor Relations until 2004 Former member of the project finance group of Andrade Gutierrez, from 1997 to 2000. Prior to that, for 17 years Mr. Barroso worked for large Brazilian-based financial institutions: Banco Safra, Banco Nacional, and Banco Real. He holds a degree in Economics from the Federal University of Minas Gerais as well as an Executive MBA in finance from the Instituto Brasileiro de Mercado de Capitais (IBMEC), and specialization in business law from Getúlio Vargas Foundation.
Manuel Eduardo Henriques de Andrade Lamego 46 Director of Planning and Controller until 2004 Mr. Lamego was formerly the head of the Department of Corporate Planning at Brisa Auto-estradas de Portugal S.A.. From 1984 to 1987, he worked in the Department of Corporate Studies and Planning of Centralcer (Portugal). From 1981 to 1984, he worked in the Central Planning Department of the Ministry of the Portuguese Plan. He holds a degree in Economics from Lisbon’s Instituto Superior.
Massami Uyeda Junior 33 Chief Legal Officer until 2004 For seven years, Mr. Uyeda was a staff lawyer for the Companhia Brasileira de Projetos e Obras (CBPO), a construction company part of the Odebrecht Group. He also worked for the law firm of Clifford Chance in New York. Mr. Uyeda holds a law degree from the University of São Paulo and in Business Administration from the Getúlio Vargas Foundation. Director of Development Leonardo de Couto Vianna 49 and Technology until 2004 Formerly Director of Works at NovaDutra for seven years. Prior to that, Mr. Vianna held the positions of Administrative Manager of Refrigerantes Minas Gerais and Cost and Control Manager for Construtora Mendes Júnior, for eight years, after an experience in Planning and Control. He was also Wo rks Manager for Expressways with Mendes Júnior International Company, in Iraq. He holds a degree in Civil Engineering degree from the Fundação Mineira de Educação e Cultura (Fumec). Restructuring and Committees of the Board of Directors In 2002, CCR underwent an organizational restructuring, making it a strategic controller of all of its concessionaires. The restructuring followed best practices of corporate governance, with the objective of increasing the strategic value of the Board of Directors, with the creation of six formal committees and by expanding the decision-making power of the executives. The six technical and consulting committees are:
• Audit Committee: aids the Board of Directors in
defining quality standards of the financial reports and ADMINISTRATION internal controls;
2002
• Strategy Committee: evaluates general objectives and
guidelines; Companhia de Concessões Rodoviárias
CCR • Finance Committee: examines the Company’s financial 9 ANNUAL REPORT policies, capital structure, and recommends corrective actions;
• Governance Committee: suggests the format and supervises the process of electing members to the Board of Directors; • New Business Committee: evaluates, at the Board of Directors request, studies for potential acquisitions and new businesses;
• Human Resources Committee: recommends changes to the compensation policy of CCR and its subsidiaries.
The objective of the committees is to bring efficiency and agility to the Board of Directors, as it performs its functions, and, thus, enrich the quality of the decision-making process. The committees have no executive functions and no decision- making power, and, therefore their opinions and proposals are forwarded to the Board of Directors. The committees are formed of no more than one member from each shareholder and an independent Director.
Dear Shareholders, The year 2002 was marked by events that were fundamentally important for the future of CCR. We worked hard to finish a cycle and to begin a new phase in the Company’s history, which we believe will place us among the largest motorway concession compa- nies in the world. We began the year by completing the process of listing our shares, which involved a long planning period. CCR was the first company to list its shares on the Bovespa’s Novo Mercado, on February 1, 2002. At the end of the year, our Board of Directors proposed the payment of our very first dividend to shareholders, which has already been ap- proved and paid. Once the listing process was concluded, we began an ambitious organizational restruc- turing, which transformed CCR into a strategic controller of all its concessionaires. Be-
MESSAGE TO SHAREHOLDERS fore the year ended, we had implemented all the necessary changes, with the support
2002 of our employees.
T The restructuring consolidated CCR’s and concessionaires’ management teams. There- fore, today CCR has a single Board of Directors, which is stronger and more strategically
Companhia de Concessões Rodoviárias
Companhia de Concessões Rodoviárias involved in the business, while each concessionaire is now able to focus purely on oper-
CCR ANNUAL REPOR 10 ating matters. The new organizational structure has allowed for the rationalization of processes and creation of greater synergies. It has also brought previously unrecognized talent to the forefront. A single corporate culture is being created, in order for the Company to achieve excellence in all its concessionaires. This structure also reinforces the best prac- tices required for corporate governance, providing better flow, agility and transpar- ency for our management actions. With these changes, CCR entered another phase in its history, with a solid platform for self-sustaining growth. The restructuring also included creating two new subsidiaries: Actua and Engelog. Actua’s objective is to provide services to all the concessionaires. Engelog will centralize engi- neering services. In creating the two support service centers with competent profes- sionals from the different concessionaires, enormous synergies were achieved, further increasing the quality level of our services. A highly complex macroeconomic scenario was the hallmark of 2002. The expectations created by the presidential elections, the change in government, the near economic stagnation, inflation pressures, in addition to such factors as the crisis in neighboring Argentina and the fear of a war in the middle east, caused the markets to be tremen- dously volatile. Furthermore, the increased aversion to the Brazil country risk, brought on by scandals in large US companies, caused international banks to suspend some of their commercial lines of credit, jeopardizing Brazil and other developing economies. The result was a significant devaluation of the Brazilian Real against the US dollar, followed by increased inflation. CCR’s consolidated EBITDA rose 4% to R$ 472 million year-over-year. Net losses im- proved by 5% year-over-year, to R$ 120 million. This figure could have been signifi- cantly better had it not been for the 52.6% devaluation of the Real versus the US dollar. As a result of this, CCR adopted a hedging policy to reduce the impact of currency ex- change variations, minimizing the potential effect of further devaluations of the Real. On a more positive note, net consolidated profits rose to R$ 360 million, from a loss of R$ 125 million for the previous year. This improvement was achieved, mainly due to the change in the accounting treatment for the concession fee at two of our concessionaires. Gross consolidated income grew 15% to 1.074 billion, in line with our expectations. Consolidated operating profits before financial expenses declined 2% to 287 million. I would like to add that all the objectives set forth by concessionaires’ agreements were met and, thus, all the mechanisms for adjusting toll rates were also met by the respec- MESSAGE TO SHAREHOLDERS
tive granting authorities. 2002 Throughout the year, CCR invested R$ 318 million in improving and modernizing its motorways, making it possible to improve the quality of the services provided, while
Companhia de Concessões Rodoviárias
Companhia de Concessões Rodoviárias also providing more safety for its users. The accident rates on our motorways have
CCR 11 ANNUAL REPORT declined in relation to traffic volume. It should also be noted that traffic fatalities have also dropped and user satisfaction rates have increased, according to several polls. Furthermore, we continued to carry out our social and environmental programs, bring- ing the concessionaires closer to their local communities. CCR’s social program received regional and international recognition. Rodonorte was awarded the Toll Excellence Award from the International Bridge, Tunnel and Turnpike Association (IBTTA) for the best social responsibility program. A new government in Brazil was inaugurated in January of 2003 with new promises and expectations, which assures CCR of its own future and that of the Nation. CCR is adequately prepared for this new government. The Company is waiting for the public bidding for the second phase of the Federal Concession Program, for which we have been pre-qualified. CCR’s goals, going forward, are: (1) to continue growing, based on the equilibrium between return on the capital invested by shareholders and safeguarding investments; and (2) to continue social responsibility programs required by its role as a corporation, guaranteeing safety for users and sharing the results with all shareholders.
Renato Alves Vale Paulo de Tarso Camargo Opice CEO Council President 2002
T
Companhia de Concessões Rodoviárias
CCR ANNUAL REPOR 12 AUTOBAN
2002
Companhia de Concessões Rodoviárias
CCR 13 ANNUAL REPORT Review of Activities Economic Environment The Brazilian economy grew by approximately 1.5%, in 2002, with most of the growth concentrated in agriculture, agribusiness, and exports. The modest growth in GDP reflected the difficult economic environment in Brazil, which was mainly characterized by a steep devaluation of
T the Real against the US dollar, the return of inflation, rising interest rates, income concentration, increased unemployment, and a decline in real wages.
ACTIVITY REPOR This was not a favorable scenario for the flow of light vehicles on the motorways, although the owners of this
2002
T type of vehicles belong to the upper middle class. The increase in the cost of diesel fuel (67%), alcohol (32%), and
Companhia de Concessões Rodoviárias
gasoline (21%, retail) resulted in a decline of 3.1% in net
ANNUAL REPOR CCR 14 real income according to the CNI(1) index, with a rise in interest rates from 19% to 25% according to the CDI(2),
(1) CNI = National Industry Confederation and increased unemployment from 5.6% to 7.1% (2) CDI = Interbank Interest Rate Certificate (3) IBGE = Brazilian Institute of Geography and Statistics according to the IBGE(3).
On the positive side, the dynamic nature of agribusiness and exports stimulated the flow of heavy vehicles on the CCR’s motorways, especially during the period in which crops and agriproducts are sold and shipped. However, this was delayed due to the expectations of a rising exchange rate.
The Motorway Concession Sector in Brazil Vehicle traffic on motorways under concession increased 1.7%, in 2002, with most of the growth coming from heavy Annual growth rate of vehicles, which due to a good harvest and exports, rose by vehicle traffic on 5.1%. The traffic of light vehicles, which depends more on motorways under real income, increased only 0.4%. concession in Brazil, in 2002 (accum. 12 mo. 2002 / accum. 12 mo. 2001) Type of Vehicle Rate Light Vehicles 0.4% Heavy Vehicles 5.1% Total 1.7%
Source: ABCR (Brazilian Association of Motorway Concessionaires) In August 2002, as export shipments were at their peak in a record harvest, traffic reached its highest level in the last four years (without seasonal adjustments). This trend did not continue, as traffic declined from that point forward through the end of the year.
ABCR Activity Index
106 base 100 = 1999 - seasonal adjustment
104 T
102
100
ACTIVITY REPOR 98
2002 96 jan/99 jun/99 jun/00 jun/01 jun/02 dec/00 dec/01 dec/02 dec/99
Companhia de Concessões Rodoviárias
CCR 15 ANNUAL REPORT Note: The ABCR (Brazilian Association of Motorway Concessionaires) index is based on toll traffic of motorways under concession in Brazil’s Southeast and Southern regions. Performance of CCR’s Concessionaires In 2002, the traffic on CCR’s motorways recorded an increase of 6.9%. However, when considering each motorway, separately, there were important traffic volume differences. AutoBAn registered a growth in commercial traffic. Due to their similar characteristics NovaDutra and Rodonorte, experienced growth close to the national average for heavy vehicles. Ponte (Rio-Niterói Bridge) recorded good growth as it is less sensitive to economic trends, because its urban traffic. The Lagos Motorway System, showed a drop in traffic since it depends mostly on weekend tourist traffic.
1000 vehicle equivalent * CCR Concessionaire 2001 2002 Var. AutoBAn 69,189 76,704 10.9% NovaDutra 72,280 75,873 5.0% Rodonorte 43,418 45,992 5.9% Ponte 25,519 26,789 5.0% Via Lagos 4,604 4,553 -1.1% Total 215,010 229,912 6.9%
* equivalent is the number obtained by dividing total toll revenue by the toll rate for a passenger car at the respective plaza. Since the multiplication factor used to calculate vehicle equivalent differs from concessionaire to concessionaire, this number must not be used to compare vehicle equivalent from different concessionaires. CCR Market Share In 2002, CCR share of the overall motorway concession market in Brazil was 14%. When considering the total length of motorways managed by the Company, CCR’s market share was 30%. This combined with good quality of services provided by its concessionaires and the relevance of CCR’s motorways, explains its higher market share (35%) in terms of revenues earned.
T CCR’s Concessionaires’ Activities AutoBAn Concession agreement details and motorway characteristics
ACTIVITY REPOR Granting Authority São Paulo State Government Motorway System Anhangüera-Bandeirantes
2002 Length 317.0 km
T Concession Period / Period Completed 20 years / 5 years Type of Public Bid Largest offer for the Granting Authority
Companhia de Concessões Rodoviárias
Value and means of concession payment Fixed amount of R$ 1,642,200,000,
CCR ANNUAL REPOR 16 paid in eight equal installments of 0.9%, plus 232 subsequent fixed installments of 0.4% + 3% of the gross cooperating revenues paid monthly for the concession term. Month during which tolls are readjusted July Formula for toll readjustment IGP-M The Anhangüera-Bandeirantes (Dom Gabriel Paulino Bueno e Couto system is located in one of the nation’s most important economic regions. It links the city of São Paulo to the Campinas region and connects the major cities in outside the city of São Paulo. It is the motorway with the greatest flow and income in the country. A recent study by the National Transportation Confederation (CNT) indicated that the only part of the motorway considered to be in excellent condition was the one linking São Paulo, SP, to Uberaba, MG, the Anhangüera-Bandeirantes system, SP-330. AutoBAn traffic is predominantly automobiles and light vehicles, although it has a good flow of trucks and buses. The traffic is heavier near the city of São Paulo. There is a slight seasonal influence on the traffic, which tends to be stronger during the school vacation months. AutoBAn has 114 manual and 44 Nonstop booths, 544 emergency phones, 26 electronic message panels, 250,000 electronic tags , 70 video traffic control cameras, and 640 kilometers of fiber optical cable.
Highlights In 2002, commercial vehicles on AutoBAn began to be charged in both directions (North and South). This contributed to a reduction in the use of alternate routes by commercial vehicles, since now they are charged only the toll equivalent to the section of the motorway travelled. As a result, traffic grew 10.9% and toll revenues increased 21.1%. The average toll increased from R$ 5.37 to R$ 5.87, or 9.3% in 2002. Investments and Works A total of R$ 122.6 million were invested in the motorway system, to continue improving its quality, including structural restoration of bridges and viaducts, remodeling intersections, constructing viaducts, concrete barriers, parts of service roads, overpasses, third lanes, and widening of bridges, in addition to constructing bi-directional toll plazas for commercial vehicles.
Service Calls, Accident Rates and Recognition
The User Service System, with teams and vehicles working 24 hours a day, ensured T the safety of users of the Anhangüera and Bandeirantes motorways. A total of 487,976 service calls were made:
ACTIVITY REPOR
Traffic inspection 73,360 Rescue 13,312 2002 Light and heavy towing 119,349 Water tankers and animal removal 4,252
Companhia de Concessões Rodoviárias Dial AutoBAn 0800 55 55 50 277,703
CCR 17 ANNUAL REPORT Total 487,976
In 2002 the number of accidents increased at a lower level than the traffic volume. More importantly: the number of fatalities remained practically unchanged. The current indexes improved since AutoBAn took over the operation of the system’s motorways. The efforts made to guarantee the best quality service are reflected in users’ opinion polls. In 2002, AutoBAn once again received the Quality System Certification, according to NBR ISO 9001/2000 standards, granted by BVQI (Bureau Veritas Quality International). Accidents - Monthly Averages
Description 1997 * 1998 ** 1999 2000 2001 2002 % 2002/1997 Accidents 471.00 425.75 433.83 419.00 379.08 415.58 11.8% Injuries 253.30 184.13 193.75 182.08 165.25 188.25 25.7% Fatalities 19.80 13.38 13.92 12.83 8.65 8.67 56.2%
* At the time, it was operated by DERSA / DER-SP ** May Source: AutoBAn / DERSA / DER-SP Pedestrians Accidents - Monthly Averages
Description 1998 1999 2000 2001 2002 % 2002/1998 Accidents 18.1 18.7 15.7 13.1 13.0 28.1% Injuries 12.1 12.9 13.3 9.8 10.4 14.1% Fatalities 7.2 7.2 6.3 3.5 5.0 56.2%
Source: AutoBAn / DERSA / DER-SP Projects for 2003 In 2003, AutoBAn will implement bi-directional toll plazas for passenger vehicles. Investments will continue to be made in works and improvements, as well as iniciatives aimed at reducing the number and seriousness of the accidents.
NovaDutra Details of the concession agreement; motorway characteristics T Granting Authority Federal Government Motorway System Presidente Dutra Motorway Length 402 km Concession Period / Period Completed 25 years / 5 years
ACTIVITY REPOR Type of Public Bid Lowest toll rate Value and means of concession payment Only Investments
2002
T Month during which tolls are readjusted August Formula for toll readjustment 34% IP + 32% IOAE + 20% IC + 14% IT The Via Dutra (BR-116) is the main corridor between Brazil’s two most important
Companhia de Concessões Rodoviárias metropolitan areas: São Paulo and Rio de Janeiro. It also links two other large industrial
CCR ANNUAL REPOR 18 centers in the State of Rio de Janeiro - Resende and Volta Redonda/Barra Mansa - to the State of São Paulo - Taubaté, São José dos Campos, and Jacareí. The motorway passes through agricultural regions and through mountains: Serra das Araras. The motorway received high quality ratings in a recent study by the National Transportation Confederation (CNT). NovaDutra traffic consists mainly of trucks, buses, and heavy vehicles, although it also has a heavy flow of automobiles. Traffic is heavier near the city of Rio de Janeiro, due to the increased traffic flow between the capital and the cities in the mountains region. Seasonal factors do not influence the traffic flow on NovaDutra as much as Brazil’s macroeconomic situation. NovaDutra has 54 manual, 10 electronic and 44 mixed toll booths, 800 emergency telephones, 30 electronic message panels, 23 video traffic control cameras, and 402 kilometers of fiber optic cable.
Highlights In 2002, the toll plaza at Jacareí, SP, became operational, increasing revenues, while at the same time benefiting users with a reduced toll rate between Jacareí and São Paulo. Motorway traffic grew 5% and revenues rose 12.5%. The average toll tariff increased 7.1%.
A partnership was established with VISA allowing tolls to be paid using credit cards, which is an innovation in terms of electronic payment in Brazil. Investments and Works There were R$ 35.4 million invested in works and improvements, which include, in addition to the Jacareí plaza, the construction and remodeling of intersections, bridges, and viaducts, and the opening to traffic of another section of the service road on Rio’s lowlands.
Accidents - Monthly Averages
T Description 1997 1998 1999 2000 2001 2002 2002/1997 Accidents 773,2 802,3 811,5 767,5 761,1 780,1 – Injuries 422,8 381,8 393,3 379,7 387,9 367,7 13.0% Fatalities 40,0 25,4 25,1 21,5 20,1 21,6 46.0%
ACTIVITY REPOR Operations initiated in March 1996
Pedestrians Accidents - Monthly Averages 2002
Description 1997 1998 1999 2000 2001 2002 2002/1997
Companhia de Concessões Rodoviárias Accidents 66,9 52,9 39,1 36,5 33,5 33,0 50.7%
CCR 19 ANNUAL REPORT Injuries 38,4 35,0 30,8 31,2 31,0 25,5 33.6% Fatalities 22,6 15,8 13,0 12,0 11,5 12,3 45.6%
Operations initiated in March 1996
Rodonorte Details of the concession contract; motorway characteristics Granting Authority Government of the State of Paraná Motorway System Curitiba-Apucarana and Ponta Grossa-Jaguariaíva Length 488 km Concession Period / Period Completed 24 years / 6 years Type of Public Bid Biggest offer for maintaining the access sections Value and means of concession payment Only Investments Month during which tolls are readjusted December Formula for toll readjustment 30% IC + 20% IOAE + 10% IT + 20% IP + 10% INCC + 10% IGPM The Rodonorte System is divided into two main sections: one linking Curitiba, the state’s capital, to Apucarana, Londrina and Maringá, the agricultural and industrial center of Northern Paraná. The other section of Rodonorte links Ponta Grossa to Jaguariaíva, and the northeast, towards São Paulo. The first section is a natural transportation route to the Port of Paranaguá. The motorway received high quality rating in a recent study by the National Transportation Confederation. Rodonorte traffic is well distributed between light and heavy vehicles. There is seasonality factor between March and July, due to the flow of agricultural production to the Port of Paranaguá. Near Curitiba, the proportion of automobiles and light vehicles increases. Rodonorte has 57 mixed toll booths, 23,000 non-contact smart cards, and 30 video traffic control cameras. Highlights In 2002, 23.000 users utilized non-contact electronic cards for paying tolls (Rodocard), representing 16% of Rodonorte’s total toll collection. Traffic and revenues grew 5.9% and 14.6%, respectively and the average toll rate rose by 8.3%.
Investments and Works
T A total of R$ 145.8 million were invested to improve motorway conditions, carrying out several construction projects benefiting regional development, facilitating the
ACTIVITY REPOR flow of agricultural and industrial products, and
2002 stimulating tourism, commerce, and the services sectors.
T One of the highlights was the use of new technologies for resurfacing motorway pavement. These investments also
Companhia de Concessões Rodoviárias
included restoring 200 kilometers of pavement,
CCR ANNUAL REPOR 20 constructing 72 kilometers of third lanes, building of pedestrian overpasses, electronic speed bumps, reinforcing structures, and widening of bridges and viaducts.
In Paraná, Rodonorte was a pioneer in using asphalt with rubber, or “ecological asphalt”, and in recycling pavement, which is an ecologically friendly solution allowing for the reuse of 100% of the existing materials.
Service Calls and Recognition The User Services System performed:
• 2,639 pre-hospital service calls • 31,221 mechanical service calls • 31,419 accident service calls An opinion poll showed that 90.9% of Rodonorte’s users are satisfied with the services provided and works done on the motorway. Rodonorte, was awarded an ISO 9001 certification from BVQI (Bureau Veritas Quality International), an important recognition for services provided. Ponte Details of the concession agreement and characteristics of the bridge Granting Authority Federal Government Motorway System Rio-Niterói Bridge Length 23 km Concession Period / Period Completed 20 years / 8 years Type of Public Bid Lowest toll rate Value and means of concession payment Only investments Month during which tolls are readjusted August Formula for toll readjustment 70% IOAE + 15% IP + 15% IC T The Ponte Rio-Niterói is the main link between the cities of Rio de Janeiro and Niterói. It is a part of the BR-101 motorway accessing neighboring regions, especially the Lagos (Lakes) Region. Since the bridge links urban centers, there is more automobile and light vehicle traffic than trucks, buses, and heavy vehicles traffic, although cargo transportation ACTIVITY REPOR is very significant. The Bridge has 8 manual, 2 electronic and 4 mixed toll booths, 9 electronic message panels, 2002 60,000 electronic tags, 22 video traffic control cameras, and 14 kilometers of fiber optical cable.
Companhia de Concessões Rodoviárias Highlights
CCR 21 ANNUAL REPORT The first advanced operating base, located on Caju Island, was inaugurated as a part of the plan for increasing capacity and improving traffic flow on Ponte. Traffic and revenues grew 5% and 15.2% respectively, and the average toll rate rose 9.6%.
Investments and Works A total of R$ 13.4 million were invested in installing the first advanced operating base, the beginning of construction on another section of the bridge, the restoration of the flexible pavement on the access ramps in Niterói, and introducing more modern toll booths, in line with international ergonomic standards. Service Calls and Recognition The User Services System handled 46,752 occurrences in 2002, as follows:
• Mechanical: 44,586 • Medical: 1,255 • Traffic Accidents: 911
An opinion poll placed the Bridge among the Nation’s best service providers. The level of satisfaction of users increased from 89%, in 2001, to 94%, in 2002. Accidents - Monthly Averages
Description 1998 * 1999 2000 2001 2002 2002/1998 Accidents 83.10 77.70 85.80 71.80 66.20 20.3% Injuries 19.20 14.00 12.30 16.30 10.70 44.3% Fatalities 0.75 0.40 0.20 0.40 0.30 -60.0% * Comparing 2002 and 1998 Pedestrians Accidents - Monthly Averages
Description 1998 1999 2000 2001 2002 2002/1998
T Accidents 1.30 0.58 1.08 0.83 0.42 67.7% Injuries - 0.58 1.08 0.83 0.33 43.1% Fatalities - - - - -
Accidents 1995: 0.70 / Accidents 1996 : 0.70 / Accidents 1997: 0.90 / Injuries and Fatalities - unavailable
ACTIVITY REPOR
2002
T Via Lagos Details of the concession agreement; motorway characteristics
Companhia de Concessões Rodoviárias Granting Authority State Government of Rio de Janeiro
CCR ANNUAL REPOR 22 Motorway System Rio Bonito-Araruama-São Pedro da Aldeia Length 60 km Concession Period / Period Completed 25 years / 6 years Type of Public Bid Biggest offer for the Granting Authority Value and means of concession payment R$ 61.2 million in 23 annual installments, readjusted by the same index as the tolls Month during which tolls are readjusted August Formula for toll readjustment 50% IC + 20% IP + 15% IT + 15% IOAE The System consists of three motorways serving the Lagos (Lakes) Region in Rio de Janeiro and linking Araruama, São Pedro da Aldeia, Cabo Frio, Búzios, and Arraial do Cabo. Traffic is composed predominantly of automobiles and light vehicles, mainly during the summer months, since the Lagos Region is a popular tourist destination. The Lagos Motorway System has 8 manual, 2 electronic, and 2 mixed tool booths, 52 emergency telephones, 3 electronic message panels, and 30 kilometers of fiber optical cable.
Highlights Traffic, composed mainly by tourist vehicles, dropped 1.1% in 2002. Toll revenues increased by 6% and the average toll rose 7.1%.
Investments and Works Investments of R$ 740,000 were made to install rigid barriers, paint, and repair lanes. Service Calls and Recognition In 2002, the User Services System handled 8,773 occurrences, as follows:
• Mechanical = 8,131 • Medical = 441 • Traffic Accidents = 201
An opinion poll showed that 62% of the users were satisfied or very satisfied with Via Lagos’ overall condition, including the quality of the pavement, signs, and
T rescue services. Via Lagos was given an overall grade of 82%.
Accidents - Monthly Averages
ACTIVITY REPOR
Description 1998 1999 2000 2001 2002 2002/1998 2002 Accidents 29.08 26.25 16.58 16.83 16.75 42.4% Injuries 17.33 18.50 11.75 9.25 14.00 19.1%
Companhia de Concessões Rodoviárias
Fatalities 1.42 1.17 1.25 1.08 1.00 29.6%
CCR 23 ANNUAL REPORT Pedestrians Accidents - Monthly Averages
Description 1998 1999 2000 2001 2002 2002/1998 Accidents 2.67 2.00 1.25 1.25 1.58 40.8% Injuries 2.83 1.42 0.58 1.25 1.42 49.8% Fatalities 0.50 0.58 0.67 0.25 0.33 34.0% 2002
T
Companhia de Concessões Rodoviárias
CCR ANNUAL REPOR 24 NOVA DUTRA NOVA
2002
Companhia de Concessões Rodoviárias
CCR 25 ANNUAL REPORT Analysis of Economic and Financial Performance Macroeconomic scenario In 2002, Brazil was once again subject to the effect of volatility in the international markets.
Internationally, an increased aversion to country-risk following the events of September 11, 2001 in the US, and
YSIS the scandals involving important US corporations, caused the large banks to significantly reduce their lines of credit to many countries, especially developing countries. Brazil’s change in government was an additional risk factor
PERFORMANCE ANAL considered, in addition to the Argentine crisis, which given
2002 its geographical proximity, was at risk of negatively
T affecting Brazil’s economy. In 2002, the Brazil country risk reached a record 2,436 points.
Companhia de Concessões Rodoviárias
CCR ANNUAL REPOR 26 Locally in Brazil, the scarcity of international credit lines and analysts’ concerns regarding the rising country-risk, caused a devaluation of the Real against the US dollar reaching R$ 3,90, despite the domestic confidence in a well-handled electoral process and in a smooth transition.
Inflation US Dollar
4.0 % Monthly Var. of IPA-DI Wholesale Price Index (Aug/1994=100) % Monthly Var. of IGP-DI General Price Index (Aug/1994=100) 3.5 8 3.0 7 6 2.5 5 2.0 4 3 1.5 2 1 0 jan/00 jun/00 jun/01 jun/02 dec/00 dec/01 dec/02 The effects of the devaluation of the Real spread throughout the economy, beginning with the contractual adjustments of public energy tariffs, which affected fuel prices and wholesale prices, in the form of increased costs. In order to prevent, at least partially, higher wholesale prices from being passed on to consumers, the government opted to control the economic growth by raising basic interest rates, to 25% from 19%, in addition to applying greater fiscal
tightening. This strategy also resulted in control over imports to generate a YSIS larger commercial surplus. As a result, of the US$ 10.5 billion surplus generated last year, US$ 8.4 billion was from reduced imports.
GDP rose by nearly 1.5%, which represented almost no increase in per capita income (<0.2%). Industrial production and real sales dropped during most of PERFORMANCE ANAL the year, but recovered slightly in the final quarter. Only food and medicine
2002 showed a good performance level. Durable and semi-durable goods, which are more dependent on changes in interest rates, continued to drop.
Companhia de Concessões Rodoviárias
CCR The positive results came from agriculture and agribusiness, because of a record 27 ANNUAL REPORT grain harvest and an increase in international prices. This also positively affected exports, contributing to the good results in the balance of payments.
The capital markets were negatively affected by the general economy and by the rise in interest rates. The financial sector became fearful of potential unorthodox measures that could be taken by the new opposition government regarding the roll over of public debt, forcing the Central Bank (BC) to shorten its maturity dates. With the devaluation of the Real against the US dollar, it was easier for the government to issue securities denominated in Reais, to finance itself.
Fixed income securities not linked to the US dollar, had negative real income in 2002. The new system of appropriating income from funds through market-to- market, generated significant losses for quotaholders and investors. In light of this turmoil, the stock market declined for the third straight year, closing 2002 down by 17.1% in nominal terms (or down 45.6% in US dollar terms). The year of 2003 began with the inauguration of a government formed by a party that had previously been in the opposition. Its landslide victory at the polls showed the nation’s desire for a change in economic policies. Workers were demanding opportunities, the business community wanted lower interest rates, and the Brazilian population wanted a plan to put the country back on the road to recovery, achieving its enormous potential. The goal of the new government is to better distribute wealth and eliminate poverty and hunger. However, since the beginning of its term in office, the new administration has declared that changes will have to be gradual and must not conflict with fiscal equilibrium and price stability.
This is not an easy task, but the possibility of obtaining a consensus within Brazilian Congress is high. A national reform project requires the commitment of all the Country’s citizens. The new government recognizes the inherent
YSIS difficulties it will face, therefore it will begin with the reforms considered to be most necessary and urgent, such as Social Security, tax, and political reforms. Brazilians are optimistic regarding these changes and the climate is more
PERFORMANCE ANAL favorable to business this year than it was last year.
2002
T
Companhia de Concessões Rodoviárias
CCR ANNUAL REPOR 28 Brazilian economic indicators
2000 2001 2002
GDP (Source: IBGE) (2002=estimate) Real Growth 4.4% 1.5% 1.5%
GDP in current R$ billions 1,086.7 1,184.8 1,338.8 YSIS GDP in current US$ billions 593.8 504.1 368.8 Population (millions of inhabitants) 170.1 172.4 174.7 GDP per capita (US$) 3,490 2,924 2,112
Job Market (Source: IBGE) Unemployment Rate (seasonally adjusted) 6.0% 7.0% 8.0% PERFORMANCE ANAL Average Real Income of Employed People 0.9% -8.9% -9.1%
2002
Inflation (Sources: IBGE, FGV) IPCA-IBGE 6.0% 7.7% 12.5%
Companhia de Concessões Rodoviárias IGPM-FGV 10.0% 10.4% 25.3% Companhia de Concessões Rodoviárias
CCR 29 ANNUAL REPORT Exchange Rate (Source: BACEN) R$/US$ - end of the period 1.96 2.32 3.53 Exchange Variation - at year end 9.3% 18.7% 52.6% R$/US$ - average for the period 1.96 2.36 3.63 Exchange Variation - average 0.9% 28.4% 24.3%
Interest Rate (Source: BACEN) Interest Reference Rate - SELIC 15.8% 19.0% 25.0% Nominal Interest Rate - CDI 17.5% 17.4% 19.1% Real Interest Rate - CDI/IGPM 6.8% 6.3% -4.9% Interest on Exchange - CDI/VCf 7.5% -1.1% -22.0%
Stock Market (Source: Bovespa) Ibovespa index - in nominal terms -10.7% -11.0% -17.1% Ibovespa index - in US dollar terms -18.3% -25.0% -45.6%
Foreign Accounts (Source: BACEN) Exports (US$ billions) 55.1 58.2 60.3 Imports (US$ billions) 55.8 55.6 47.2 Trade Balance (US$ billions) -0.7 2.6 13.1 Direct Foreign Investments (US$ billions) 32.8 22.6 16.6 Foreign Reserves - Liquidity (US$ billions) 33.0 35.9 37.8
IBGE = Brazilian Institute of Geography and Statistics
FGV = Getúlio Vargas Foundation
BACEN = Brazil Central Bank
Bovespa = São Paulo Stock Exchange CCR’s Financial Performance Note on the Change in Accounting Treatment On November 19, 2002, the Brazilian Comissão de Valores Mobiliários (CVM, or the Brazilian Securities Commission) passed a resolution authorizing CCR to begin reflecting in its results the effect of a change in the accounting treatment of the concession fees at AutoBAn and Via Lagos, pending the Commission’s final decision
YSIS on a permanent change in this accounting rule. Prior to this decision, at the time the concessions were granted, CCR had recorded the total amount of the two concession fees as both an asset and a liability. The liability was subsequently adjusted by the inflation indices defined in each concession agreement, while the
PERFORMANCE ANAL permanent assets continued to be carried at their original amounts, subject to amortization over the term of the concessions. Under the new accounting
2002 T treatment, the concession fees for AutoBAn and Via Lagos are no longer recorded as a liability with a corresponding permanent asset. This eliminates both the
Companhia de Concessões Rodoviárias amortization expense and the financial expense attributable to the inflation
CCR ANNUAL REPOR 30 adjustment of that liability (monetary adjustment to the concession fee obligation). The two periodic fee payments to the granting authority is now treated as an operating expense. This new accounting treatment of the concession fees for AutoBAn and Via Lagos has a positive, significant impact on CCR’s current and historical results. Management believes the new accounting treatment reflects, in a more adequate manner, the results of the Company’s operations.
1. Economic Results Excluding the change in accounting treatment, CCR’s 2002 results were negatively affected by non-recurring expenses from the organizational restructuring, the IPO (Initial Public Offering) and to a greater extent by the impact of the devaluation of the Real against the US dollar on the Company’s debt.
For comparative purposes, the 2001 figures shown in this report are audited and pro-forma to reflect the change in accounting treatment for the concession fees at AutoBAn and Via Lagos. 1-1. Revenues Breakdown of the Gross Toll Revenues Consolidated Operating Revenues in R$ thousands Description 2001 2002 Var. Rodonorte (15%) NovaDutra AutoBAn 371,827 450,162 21.1% Ponte (34%) NovaDutra 314,399 353,779 12.5% (5%) Rodonorte 131,331 150,569 14.6% Via Lagos (3%) Ponte 47,920 55,221 15.2% Via Lagos 26,089 27,661 6.0% Toll Revenues 891,566 1,037,392 16.4% YSIS
Other Revenues 40,099 37,044 -7.6% AutoBAn Total 931,665 1,074,436 15.3% (43%)
Consolidated gross operating revenues grew 15.3% in nominal terms, reaching R$1.074 billion (US$ 296 million). PERFORMANCE ANAL
Toll revenues, which represented 96.6% of total revenues, 2002 grew 16.4% in nominal terms, due to traffic growth and an
average increase in the toll tariffs of 8.8%. Companhia de Concessões Rodoviárias
CCR The concessionaire with the strongest toll revenue growth was 31 ANNUAL REPORT AutoBAn, which also represents the largest share of total revenues. The introduction of bi-directional toll collection for commercial vehicles, where half of the toll rate is charged in each direction, reduced the use of alternate routes.
The concessionaire that showed the lowest toll revenue growth was Via Lagos, with an increase of 6% year-over-year in nominal terms. Via Lagos’ revenues represented only 3% of total revenues in 2002. This concession was the only one that recorded a drop in traffic in 2002, due to its dependence on weekend leisure travel.
The other concessionaires, namely NovaDutra, Rodonorte and Ponte, showed revenue growth of 5.9% from 5.0% in 2002, which was equal to or slightly higher than inflation. The increase in traffic flow at the concessionaires was higher than the national average for all motorways under private Growth: management (1,7%). Concessionaire Traffic Toll Rate Net consolidated operating revenues grew 14.9% in nominal AutoBAn 10.9% 9.3% terms, reaching R$ 1 billion (US$ 275 million). Both gross and NovaDutra 5.0% 7.1% Rodonorte 5.9% 8.3% net consolidated revenues increased in real terms at a faster Ponte 5.0% 9.6% pace than GDP. Via Lagos -1.1% 7.1% Consolidated 6.9% 8.7% 1-2. Operating Costs, Expenses, and Profits (consolidated)
2001 2002 % Consolidated Result Items R$1000 R$1,000 % ROL R$1,000 % ROL Growth Net Operating Revenues (ROL) 870,295 100.0% 1,000,337 100.0% 14.9%
(-) Cost of Services: 468,542 53.8% 575,183 57.5% 22.8% Depreciation and amortization 125,629 14.4% 170,680 17.1% 35.9%
YSIS Third party services 154,224 17.7% 185,851 18.6% 20.5% Concession fee 124,892 14.3% 137,354 13.7% 10.0% Other services 63,797 7.3% 81,298 8.1% 27.4% Gross Profits 401,753 46.2% 425,154 42.5% 5.8%
(-) Administrative Expenses: 100,850 11.6% 138,531 13.8% 37.4% PERFORMANCE ANAL Administrative expenses - depreciation 94,483 10.9% 131,935 13.2% 39.6% Administrative depreciation 6,367 0.7% 6,596 0.7% 3.6%
2002
T Operating Profits before Financ. Exp. 300,903 34.6% 286,623 28.7% -4.7%
Companhia de Concessões Rodoviárias
(-) Financial Expenses: 318,626 36.6% 491,195 49.1% 54.2%
CCR ANNUAL REPOR 32 Interest and other financial expenses 205,725 23.6% 209,900 21.0% 2.0% Mon. varia. for debt w/ Granting Auth. 1,304 0.1% 3,183 0.3% 144.1% Exchange variation 111,597 12.8% 278,112 27.8% 149.2% (+) Financial Revenues: 18,658 2.1% 27,610 2.8% 48.0% Interest and other financial revenues 18,658 2.1% 26,439 2.6% 41.7% Gains from swap operations — — 1,171 0.1% — Operating Profits 935 0.1% -176,962 -17.7% —
(+) Non-operating Results -1,135 -0.1% -1,226 -0.1% n.a. (-) Taxes and Contributions 12,630 1.5% -55,499 -5.5% n.a. (-) Minority Share 693 0.1% -3,163 -0.3% n.a. Net Profits -13,523 -1.6% -119,526 -11.9% n.a.
n.a. = not applicable Service Costs grew more than revenues, resulting in a drop in gross profit margin to 42.5% from 45.2%. It should be noted, however, that this reflected the effects of the change in accounting treatment of the two concession fees. Depreciation, which was the main cost item, was significantly reduced by lower fixed assets. The concession costs at AutoBAn and Via Lagos, which previously did not exist as a service cost, began to be considered as such, as a result of the change in accounting treatment, representing 23.9% of the costs in this category, and 13.7% of revenues.
Excluding the impact of the accounting treatment, depreciation rose as a result of the increase in a depreciable assets at AutoBAn and Rodonorte. At AutoBAn, depreciable assets rose, as a result of investments in the extension of the Bandeirantes motorway and at Rodonorte, as a result of investments made in additional lanes and in rebuilding certain sections of the motorway. Third party services and other services, rose 22.5% year-over-year and represented an increased percentage of revenues. This was due to the rise number of employees working at the new toll plazas and the higher maintenance costs for AutoBAn and NovaDutra.
Administrative expenses increased 37.4%, year-over-year. This increase was mainly due to non-recurring expenses associated with CCR’s operational restructuring and
IPO (Initial Public Offering). YSIS
Financial expenses, net of financial revenues, grew 54.5% year-over-year, as a result of the devaluation of the Real against the US dollar, which impacted the debt in foreign currency. The Financial expenses as a percentage of revenues increased to 27,8% in 2002, from 12,8% in 2001. PERFORMANCE ANAL
The monetary variations of the debt to the Granting Authority for AutoBAn and 2002 Via Lagos, were not accounted for in 2002. Monetary variation of the debt to the
Companhia de Concessões Rodoviárias
Granting Authority as a percentage of revenues dropped to 0,3% in 2002, from
CCR 20,7% in 2001. 33 ANNUAL REPORT
The devaluation of the Real against the US dollar was the item that had the biggest impact on the Company’s results for the year, causing an increase to 27.8% from 12.8% as a percentage of the net operating revenues. Interest and other financial expenses dropped slightly while declining as a percentage of revenues by 2.6%.
Operating profits before expenses and financial revenues were R$ 286.6 million, or 4.7% lower than 2001, while consolidated operating losses reached R$ 117 million. Net consolidated losses were R$ 119.5 million.
1-3. Reconciliation of the consolidated net results and the net results of the controlling company
Result Items R$ 1000 2002 Net Operating Revenues 37,611 (-) Cost of Services Provided 20,795 (-) Administrative Expenses 36,321 (-) Net Financial Expenses -41,683 (-) Taxes and Contributions 6,890 Results of the Core Business 15,288 (+) Results of the Equity Income in Subsidiaries 345,049 Net Results of the Controlling Company 360,337
(+) Adjustments from previous years in the Controlled Companies, related to the change in accounting treatment -479,863 Net Consolidated Results -119,526 1-4. Adjusted Profits for calculating Dividends
Adjusted Results R$ 1000 2002 Net Results of the Controlling Company 360,337 (-) Absorbed Accumulated Losses 241,882 Net Adjusted Results (Law no. 6.404/76) 118,455
Dividends R$ 1000 Ref. to 2002
YSIS Amount: 25% of the Adjusted Net Results 29,614 Per common stock (number of shares = 84,818,003) 0.35
1-5. Consolidated EBITDA
Consolidated Results 2001 * 2002 %
PERFORMANCE ANAL R$ 1,000 R$ 1,000 % ROL R$1,000 % ROL growth Operating Profits 935 0.1% -176,962 -17.7% –
2002
T (+) Depreciation and Amortization: 140,339 16.1% 185,619 18.6% 32.3% Posted under costs 125,629 14.4% 170,680 17.1% 35.9%
Companhia de Concessões Rodoviárias
Posted under admin. expenses 6,367 0.7% 6,596 0.7% 3.6%
CCR ANNUAL REPOR 34 Sub-rogated 8,343 1.0% 8,343 0.8% 0.0% (+) Financial Expenses 318,626 36.6% 491,195 49.1% 54.2% (-) Financial Revenues 18,658 2.1% 27,610 2.8% 48.0% EBITDA 441,242 50.7% 472,242 47.2% 7.0%
* ROL = Net operating revenues The consolidated EBITDA in 2002 was R$ 472.2 million, with a margin of 47.2%. The consolidated EBITDA declined 3.5% year-over-year.
1-6. Investments in Permanent Assets (cash criteria) In 2002, fixed investments were R$ 318.1 million, on a cash basis, compared with R$ 529.7 million for the previous year. Most of these investments were made at Rodonorte (R$ 145.8 million) and at AutoBAn (R$ 122.6 million).
1-7. Free Cash Flow (consolidated)
R$ 1000 2001 2002 Cash Flow from Operating Activities
(+) Net Income 870,295 1,000,337 (-) Costs + Expenses 304,161 390,741 (-) Concession Cost 124,893 137,354 (+) Financial Income 18,658 33,708 (-) Other Bank Expenses 28,597 32,234 Cash from Operational / Activities 450,640 476,975
Cash Flow of Investment Operations
(-) Capex 529,661 318,105 (-) Increase in Deferred Assets 2,009 0 Free Cash Flow 81,030 158,870 The free cash flow for the year turned positive, reaching R$ 158.9 million. This was due to lower capex needed to operate the motorways, as well as the conclusion of the extension of AutoBAn. In 2001, pro-forma free cash flow was R$ 81 million, for the new accounting treatment, due to the differences in the amounts of the financial expenses,
the tax shield, depreciation, and fixed investments. YSIS
1-8. Cash Flow (Consolidated)
R$ 1000 2001 2002 Free Cash Flow -81,030 158,870
PERFORMANCE ANAL
(+) Capital Subscription 75,505 311,785 (+) New Loans and Long-Term Financing 317,708 65,424 2002 Total Cash Collected, less Investments 312,183 536,079
(-) Loan Payments and Financing 316,206 418,107 Companhia de Concessões Rodoviárias
Increased Cash and Marketable Securities -4,023 118,062
CCR 35 ANNUAL REPORT (+) Cash and Marketable Securities at the Beginning of the Period 71,541 67,517 Cash and Marketable Securities at the End of the Period 67,518 185,579
Total operating, investing and financing activities, contributed R$ 118.1 million, resulting in a cash balance of R$ 185.6 million, at the year end 2002.
In 2002, CCR collected proceeds of R$ 311.8 million from an offering of common shares and paid off loans and financing for a total of R$ 418 million. 2. Asset Structure
Accounts of the Consolidated Balance 2001 2002 R$ 1,000 R$ 1,000 % VA R$ 1,000 % VA Current Assets 113,933 5.7% 259,073 11.3% Cash and Marketable Securities 67,517 3.4% 185,579 8.1% Other Current Assets 46,416 2.3% 73,494 3.2%
YSIS Long-Term Assets 220,159 11.1% 282,998 12.3% Prepaid Expenses 133,879 6.8% 124,051 5.4% Deferred Tax 55,171 2.8% 119,865 5.2% Other Long-Term Assets 31,109 1.6% 39,082 1.7% Permanent Assets 1,648,736 83.2% 1,760,109 76.5% Net Property, Plant + Equipment 1,633,913 82.4% 1,752,180 76.1%
PERFORMANCE ANAL Deferred Assets 14,823 0.7% 7,929 0.3%
2002 TOTAL ASSETS = TOTAL LIABILITIES 1,982,828 100.0% 2,302,180 100.0%
T Current Liabilities 372,492 18.8% 482,553 21.0% Loans and Financing 150,885 7.6% 323,410 14.0%
Companhia de Concessões Rodoviárias Loans with Related Entities 100,838 5.1% 0 0.0%
CCR ANNUAL REPOR 36 Obligations to the Granting Authority 1,494 0.1% 1,380 0.1% Other Current Liabilities 119,275 6.0% 157,763 6.9% Long-Term Liability 1,254,525 63.3% 1,304,337 56.7% L-T Loans and Financing 1,105,963 55.8% 1,185,113 51.5% L-T Obligations with the Granting Authority 19,354 1.0% 26,121 1.1% Other Long-Term Liabilities 129,208 6.5% 93,103 4.0% Minority Interest 6,411 0.3% 9,688 0.4% Net Assets 349,400 17.6% 505,602 22.0%
Stock Capital 111,416 5.6% 196,234 8.5% Capital Reserves 0 0.0% 220,527 9.6% Accumulated Income 237,984 12.0% 88,841 3.9%
VA = Vertical Analysis CCR’s asset structure improved significantly with the capital increase and the adoption of the new accounting treatment at the two concessionaires, more adequately reflecting the true condition of the Company.
In 2002 net assets were positive representing 22% of total assets, which is considered normal for companies in our industry. The total financial debt increased to R$ 1.51 billion, from R$ 1.26 billion, due to a significant and atypical rise in the contractual indicators for loans in Reais, and in the exchange variation for loans in US dollars. The debt/asset ratio was 2.98 at the end of 2002. The asset composition showed an improvement, with a reduction in fixed assets and an increase in current assets, which were mainly liquid assets (cash and marketable securities). Note on the Company’s Financing Position The concessionaires have been financing their large projects according to the project finance model, which involves fewer guarantees (limited recourse) from CCR and its shareholders. After the completion of each project, the guarantees are based on the concessionaire’s revenues, collateral, insurance claims paid, and claims paid by the Granting Authority. Shareholders’ recourse is only applied if a
concession is expropriated by the Granting Authority, for nonfulfillment of YSIS contractual obligations. In this case, the project’s sponsors (certain company shareholders) are required to cover the eventual difference between the claim payment received from the respective Granting Authority, and the financing.
3. Economic-Financial and Indicators PERFORMANCE ANAL
Consolidated Indexes and Indicators 2001 2002
2002 Financial: Liquidity 0.21 0.30
Permanent Assets / Net Assets 472.2% 348% Companhia de Concessões Rodoviárias
Financial Debt / Net Assets 360% 298%
CCR 37 ANNUAL REPORT Economic: Gross Profits / Net Operating Revenues 46.2% 42.5% Net Profits / Net Operating Revenues -1.6% -11.9% Net Profits / Net Assets (2) -3.9% -23.6% EBITDA / Total Assets 22.2% 20.5%
(1) Operating Assets = Total Assets - Non-financial Liabilities (2) Basis for calculating Net Assets = Net Assets - Net Profits + Dividends with Provision for Payment 3. Share-related Indicators
2001 2002 Average Daily Trading Volume - in R$ 1000 — 395 Number of Outstanding Shares - 1000 (a) 67,854 84,818 Share Price on December 31 - in R$/share (b) — 7.40 Market Capitalization - in R$ 1000 (a x b) — 627,653 Cash Dividend Yield (1) — 4.7% Firm Value - in R$ 1000 (2) — 1,936.244 Firm Value / EBITDA — 4.1
(1) Dividends paid and/or to be paid in the following 12 months /Final Quote of 2002 (2) Firm Value = Market Value + Financial Debt - Cash and Financial Applications 2002
T
Companhia de Concessões Rodoviárias
CCR ANNUAL REPOR 38 PONTE/BRIDGE
2002
Companhia de Concessões Rodoviárias
CCR 39 ANNUAL REPORT Listing and Stock Market Performance Initial Public Offering The most important event for CCR in 2002 was, undoubtedly, the initial public offering and its listing on Bovespa’s Novo Mercado.
The operation was led by UBS Warburg, an international book runner, and coordinated by the Bradesco, Itaú and Espírito Santo investment banks, with special participation by the BNDES. The listing generated R$ 294 million for CCR and 16,963,601 common stocks were put on the market.
The shares were registered under ISIN code BRCCROACNOR2, began trading on the Bovespa under the ticker CCRO3. The custodian bank is Banco Itaú.
STOCK MARKET According to the Company’s by-laws, at least 25% of the Company’s net income
2002
T must be distributed to shareholders.
The listing of the Company’s shares represented the beginning of a new era for
Companhia de Concessões Rodoviárias CCR, bringing in other partners to share the potential of its business and adding
CCR ANNUAL REPOR 40 an important source of funds to achieve its goal. The Decision to List on the Novo Mercado The CCR’s decision to list its shares was doing more than merely looking for funding, it was also looking for partners. Therefore, it opted to be the first company to list and trade on the Novo Mercado, where the rights of non- controlling minority shareholders are protected. Bovespa’s Novo Mercado is only for companies with high corporate governance standards, transparency, and equal treatment of all controlling and minority shareholders.
CCR believes that accountability, feedback, and co-participation in the market are extremely important to reach excellence in its business. Therefore it requires that managers make every effort to achieve all their business objectives.
In 2002, CCR’s organizational restructuring allowed for it to become a strategic controller of its companies. As part of the restructuring, high standards of Corporate Governance were implemented, including inviting independent directors appointed by the market, to join the Board Directors. Several committees were created within the Board Directors, including the Governance Committee, which is responsible for controlling the company’s Governance practices. Disclosure Policy An Investor Relations department was created to communicate with the market and the company’s financial community, while simultaneously disclosing all the relevant facts that occur, as required by the applicable legislation.
Several presentations were made to analysts and investors in the local market, in the auditoriums of the regional ABAMECs (Brazilian Association of Capital Market Analysts) in São Paulo, Rio de Janeiro, and Minas Gerais, in addition to conference calls with Brazilian and foreign investors. All the information included in the presentations, and others disclosed by the company in the form of press releases and reports are available to the public on the Investor Relations’ section of the
Company’s website at: http://www.ccrnet.com.br. STOCK MARKET
Trading of the Company’s Share in the Stock 2002 Exchanges
From February, 2002 through December 31, Companhia de Concessões Rodoviárias
CCR 2002, a total of 7,908,000 CCR’s traded on 41 ANNUAL REPORT Bovespa’s Novo Mercado. There were 903 trades, for a total volume of R$ 90 million, CCRO3 on BOVESPA representing an average daily trading volume 25 Average Trading of R$ 395,000. Volume, in R$ 1000 20 Over the same period, CCR’s shares price 15 dropped 58% in nominal terms, in line with the performance of the Bovespa Index. This 10 was due to an increased aversion to the Brazil- 5 risk, the devaluation of the Real against the 0 US dollar and its impact on CCR’s debt. jul/02 feb/02 jun/02 oct/02 apr/02 sep/02 dec/02 nov/02 aug/02 mar/02 may/02
CCR03 on BOVESPA
24 Daily Closing Price, in R$/1000 shares
20
16
12
8
4
0 2002 2003 source Bovespa Strategic Management Organizational Restructuring The organizational restructuring launched in 2002 was also important. A new model for managing motorways was created, preparing CCR for the future and creating a leaner management process. Among the more important objectives of this restructuring are:
• Developing CCR corporate governance practices;
• Capturing synergies;
ANALISYS OF PERFORMANCE • Optimizing processes;
• Recognizing talent; and, above all;
2002 T • Preparing CCR for future growth.
The new model also sought to reduce the involvement of
Companhia de Concessões Rodoviárias the Board of Directors at the operating level and increase
CCR ANNUAL REPOR 42 the holding Company’s involvement with the concessionaires, with a focus on strategic planning and in defining operating guidelines.
The new model sought a greater integration of the concessionaires by standardizing and sharing processes. Areas of excellence that existed in some of the concessionaires, and not in others were consolidated in shared service centers, creating value for the entire organization.
From its initial position as a financial holding company, CCR transformed itself into a strategic promoter, in 2001, and finally into a strategic holding Company in 2002.
Although the changes may seem very subtle, CCR’s management believes the changes represent a large gain in terms of the Group’s efficiency. The following chart illustrates how differences in positioning affect the management of the business and provides a snapshot of the potential gains in productivity and efficiency. CCR’s Evolution and Details of Each Model
FINANCIAL STRATEGIC STRATEGIC HOLDING COMPANY PROMOTER CONTROLLER
DEVELOP RESTRICTED ESTABLISHES INVOLVEMENT IN STRATEGY AND TO M&A FINANCIAL GOALS DEVELOPING BU DEFINE INVESTMENTS STRATEGY DEFINE INVESTMENT APPROVES BU ACCORDING TO STRATEGY GENERAL CRITERIA IN AND OUT DECISIONS
BUDGET, DETERMINE TOP HELPs SET BU SETS DISTINCTIVE
OPERATING AND LEVEL, AND USUALLY OPERATING GOALS OPERATING GOALS MANAGEMENT STRATEGIC REVIEW UNIFORM, FINANCIAL APPROVES BUDGETS INTERVENES
PLANNING GOALS 2002 PROACTIVELY EVALUATE WHICH BUs ACHIEVE GOALS
Companhia de Concessões Rodoviárias
TALENT COORDINATION OF PROVIDES GENERAL A SINGLE
CCR 43 ANNUAL REPORT DEVELOPMENT AND THE BU COORDINATION FOR CONTINGENT OF DISTRIBUTION DEVELOPING BU TALENT, DISTRIBUTED INSIDE AND OUTSIDE TALENT AMONG BU BY CEO, SEARCH TO FILL TOP IN CONSULTATION POSITIONS WITH BUs
SHARED / WHEN NECESSARY IF THERE ARE SERVICES SHARED CENTRALIZED FOR FULFILLMENT ENORMOUS VOLUME ACCORDING TO THE SERVICES AND REPORTS SAVINGS GREATER VOLUME SAVINGS IN MORE FUNCTIONS
BU = BUSINESS UNIT
CCR expects to start reaping the benefits of this change as early as the beginning of 2003, when the restructuring process is expected to be fully implemented.
The restructuring required the creation of two companies, both subsidiaries of CCR, all of the services and engineering functions were consolidated to be shared by all five concessionaires.
The restructuring also did away with several existing Board of Directors at each concessionaire, and created a single Board with a stronger decision-making power. It centralizes the strategy for the entire Group, establishing a hierarchy of the Board of Directors over CCR and of CCR over the concessionaires.
CCR’s New Organizational Structure Organizational Structure
PRESIDENCY
EXECUTIVE BUSINESS LEVEL DEVELOPMENT DEPARTMENT MANAGEMENT LEVEL
CCR COMMUNICATION INSTITUTIONAL DEPARTMENT DEPARTMENT
CORPORATE CORPORATE DEVELOPMENT LEGAL OPERATIONS PLANNING / CONTROL FINANCE AND NEW BUSINESS STRATEGIC MANAGEMENT STRATEGIC COUNSEL CCR GROUP
2002 ENGINEERING CENTER CONCESSIONAIRES SHARED SERVICES CENTER
T
ENGINEERING PRESIDENCY STAFF MANAGEMENT MANAGEMENT ORDINARY LITIGATION&CONTRACTS PROCUREMENT
Companhia de Concessões Rodoviárias OPERATION & INFORMATION TECHNOLOGY
ADMINISTRATIVE ENGINEERING FINANCE AND ACCOUNTING “Turn-Key Solutions“
CCR ANNUAL REPOR 44
These changes also impacted the company’s corporate governance practices, which became important when CCR started trading. Best practices control, follow-up, and execution became much easier with this centralization.
More importantly is that the restructuring transformed CCR into a company prepared to act according to its main strategic focus, which is to selectively increase its presence in the concession market, either by winning new public contracts in the federal and state motorway concession programs, or by acquiring other concessionaires. Human Resources Developing Human Talent The organizational restructuring allowed CCR to better use its own internal human talent. The right people in the right places are the key for increasing the potential of human capital and provide a degree of satisfaction by combining employees’ talent and job expectations. The centralization of the Group made it possible to better manage Human Resources, increasing opportunities and the alternatives for job placements.
The integration of the concessionaires and the creation of HUMAN RESOURCES shared services centers was positive for the operations
2002 personnel, who are now able to share their experiences with their peers from different regions, which contributes
Companhia de Concessões Rodoviárias
to better training. For executives and management
CCR 45 ANNUAL REPORT personnel, a compensation policy was established based on the business’ Economic Value Added (EVA), holding them responsible for achieving their goals.
CCR’s employees are now better prepared to perform their functions, within a growing industry.
Employees At the end of 2002, there were 1,735 employees, as follows:
Personnel 2000 2001 2002 Management 412 383 402 Operations 946 1,269 1,246 Maintenance 84 62 87 Total 1,442 1,714 1,735
Job Creation Last year, CCR created 3,523 jobs in the following areas, construction, emergency services, the maintenance, in addition to positioning toll plazas, weigh stations, the Operational Control Center, and in the management. 2002
T
Companhia de Concessões Rodoviárias
CCR ANNUAL REPOR 46 RODONORTE
2002
Companhia de Concessões Rodoviárias
CCR 47 ANNUAL REPORT Social and Environmental Report Motorway Safety Although continually maintaining and improving the
safety of its motorways is an essential part of CCR’s está ruim a concordância business, providing quality of life programs is also
AL REPORT extremely important. Therefore, it does not make sense to describe the programs without, first, presenting the results obtained from our accident prevention programs.
CCR’s priority in accident prevention includes building and acquiring new safety facilities, such as pedestrian overpasses,
SOCIAL AND ENVIRONMENT concrete barriers, speed limit controls, improving motorways
2002 signaling, speed control Systems, increasing the availability of
T doctors and ambulances, animal removal, and fire fighters.
Companhia de Concessões Rodoviárias Traffic inspection teams patrol the motorways, solving a
CCR ANNUAL REPOR 48 variety of problems including fire fighting, removing animals and placing emergency markers when necessary. Tow trucks provide emergency services for removing vehicles with mechanical problems. Specialized mobile rescue teams provide first-aid assistance and transport the injured to hospitals. All these services are available 24 hours a day and are coordinated by each concessionaires’ Operational Control Centers, which supervise the traffic conditions and provide information to users.
This strategy reduced significantly the number of accidents on the motorways operated by CCR’s concessionaires, as illustrated on the following page. Social Responsibility No. of Accidents As a strategic holding company, CCR and its concessionaires 25 assist the users of its motorways and members of neighboring 20 19,005 17,995 17,249 16,900 communities, most of which are small, destitute, and needy. 15 These people are CCR’s first target, in terms of social 10 responsibility. 5 AL REPORT 0 CCR’s concessionaires sponsor several local social programs, 1999 2000 2001 2002 some of which have won international awards, dedicated to serving users and the community.
Rodonorte’s “Apoio ao Parto Humanizado” Program No. of Accidents Prevented During 2002, the “Apoio ao Parto Humanizado” Program 2.5 SOCIAL AND ENVIRONMENT 2,105 assisted, about 4,000 pregnant women in the cities of 2.0 1,756 2002 Ponta Grossa, Apucarana, and Piraí do Sul. The program 1.5 1,010 1.0 was developed by Rodonorte, in conjunction with the Companhia de Concessões Rodoviárias
0.5
CCR municipalities, the Home for Pregnant Women, and the 49 ANNUAL REPORT 0.0 Catholic Children’s Program, in order to encourage 2000 2001 2002 prenatal exams and provide baby supplies to those women who have at least six exams. The objective of this program is to aid communities in reducing infant mortality rates. The results are as follows: in Ponta Grossa infant mortality No. of Fatalities 1000 rates has dropped 32% in one year. Furthermore, the city 800 750 and the Federal Government receive funding from the 666 600 564 Ministry of Health, as an incentive for decreasing the 500 400 national infant mortality rate. 200 AutoBAn’s “SorrisoBAn” Program 0 1999 2000 2001 2002 The Program provides free dental assistance to truck drivers who use the Nonstop toll collection system, providing them with an improved quality of life standards.
Drivers receive preventive and restorative dental services, No. of Fatalities Prevented in addition to treatments and surgery, performed in a fully- 300 250 equipped mobile unit. From March to December 2002, an 250 200 186 average of 20 truck drivers were treated per day, from 150 Monday to Friday, totaling 2,608 drivers. 100 84 50 0 2000 2001 2002 AutoBAn’s “VidaBAn”, and NovaDutra’s “Vida Na Dutra É Saúde” Programs VidaBAn focuses exclusively on truck drivers. The main objective of the program is to promote a better quality of life for these professionals by providing early detection of possible health problems and suggesting the appropriate treatment. Participants can take vision tests, glucose and cholesterol, percentage of body fat,
AL REPORT cardiac evaluation, and physicals tests. In addition to the free medical exams, other services offered include podology, haircuts, and Hepatitis B, diphtheria, tetanus, yellow fever, Measles and German Measles vaccines. Awareness programs on Sexually Transmitted Diseases (STD), defensive driving and first-aid are also provided. Nearly 2,800 truck drivers participated in the program from June of 2001
SOCIAL AND ENVIRONMENT through December of 2002.
2002 Rodonorte’s “Sou 10 no Trânsito” Program
T About 43,000 first to fourth grade students participated in the “ Sou 10 no Trânsito” Program, in 2002, which provides Traffic and the Environment education, in an easily
Companhia de Concessões Rodoviárias
understood format.
CCR ANNUAL REPOR 50 The Ponte’s “Instituto Ponte para a Vida”, and Via Lago’s “Escola de Vida” Programs In 2002, 50 students from the school of life were the first ones to successfully complete the “Instituto Ponte Para a Vida” program. This program works with young people from the ages of 14 to 19, who face the risk of social exclusion, living in needy communities surrounding the Bridge’s region.
The methodology used is based on individual development via self-knowledge for personal and professional life. Most of the instructional staff are volunteer employees and collaborators of the Ponte and Via Lagos systems. After spending six months in the School of Life, students enroll at SENAI for a six-month professional training course. Once this phase is completed, they are employed at the Ponte as interns for one year. Once the students complete their internship, they have the option of enrolling in an university or a technical school, or taking a job.
In 2002, a group of students from neighboring schools graduated from the Via Lagos School of Life, successfully completing an information technology course. In addition, the students were also trained on social responsibilities and on improving their self-esteem. Rodonorte’s “Empresa Amiga da Criança” Program In May 2002, Rodonorte started a social program with children and teenagers, focused on preventing and eradicating child labor. Rodonorte received an award from the Abrinq Foundation recognizing it as a “ child-friendly business” due to its commitment in the education, health, civil rights, and social dedication to children.
Environmental Achievements Environmental responsibility is a contractual obligation required by the Granting Authorities. CCR’s concessionaires environmental activities go beyond their legal obligations. It includes reforesting, replanting,
2002 protecting archeological sites, monitoring air quality and noise, recovering bushes, recovering eroded areas,
Companhia de Concessões Rodoviárias
reconstructing river channels and increasing user’s
CCR 51 ANNUAL REPORT environmental awareness of neighboring communities. 2002
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Companhia de Concessões Rodoviárias
CCR ANNUAL REPOR 52 VIA LAGOS
2002
Companhia de Concessões Rodoviárias
CCR 53 ANNUAL REPORT Motorway Concession Program in Brazil The Brazilian motorway concession program is an intelligent alternative for recuperating and developing the motorway system without using public funds. The federal government began the motorway concession program with the publication of the Concession Law, in 1995 based on successful experiences of other countries. Private companies have been managing 9,681 kilometers of motorways and bridges since 1993. This is still a small number when compared to the 162,000 kilometers of
MOTORWAY CONCESSION PROGRAM MOTORWAY paved motorways or the 1.7 million kilometers of open motorway. The current program includes the granting of
2002 T concessions for another 12,419 kilometers of motorways.
The second phase of the Federal Concession Program
Companhia de Concessões Rodoviárias
includes seven motorways, totaling 2,583 kilometers. CCR
CCR ANNUAL REPOR 54 has already been pre-qualified for this phase.
Motorways included in 2nd Phase of the Concession Program Length Time 116/SP/PR São Paulo - Curitiba 402.3 km 25 yrs. 116/376/PR and 101/SC Curitiba - Florianópolis 367.6 km 25 yrs. 381/MG/SP Belo Horizonte - São Paulo 561.5 km 25 yrs. 101/RJ RJ/ES Border - Costa e Silva Bridge 320.8 km 25 yrs. 393/RJ MG/SP Border - BR116/RJ 200.5 km 25 yrs. 116/PR/SC Curitiba - SC/RS Border 407.5 km 25 yrs. 153/SP MG/SP Border - SP/PR Border 322.5 km 25 yrs. To tal 2,582.7 km
* projections of the former DNER, now DNIT
The third phase of the Federal Concession Program covers another 5,205.6 kilometers divided into 14 motorways. The concessions will last for 25 years and the public bidding processes should take place after the conclusion of the second phase. Granting Authorities Rights and obligations under the concession contracts The concessionaires have the right to use all the property belonging to the concession, including motorways and right-of-ways, the right to charge tolls - the main source of income, and the right to collect auxiliary revenues, or the right to collect revenues from related business. The initial tariff is set by the concession contract, and it is readjusted annually, based on a formula outlined in the contract. The rate may be reviewed when the concession suffers from an economic imbalance.
The concessionaires are required