fertilizantes heringer s.a. · 1 - cvm code 2 - company name 3 - federal corporate taxpayers'...
TRANSCRIPT
(A free translation of the original in Portuguese)
Fertilizantes Heringer S.A.Quarterly Information (ITR)at March 31, 2009and Report of Independent Accountantson the Limited Review
2
1
(A free translation of the original in Portuguese)FEDERAL GOVERNMENT SERVICEBRAZILIAN SECURITIES COMMISSION (CVM)QUARTERLY INFORMATION (ITR)COMMERCIAL, INDUSTRIAL AND OTHER COMPANIES
Unaudited
Corporate LegislationMarch 31, 2009
REGISTRATION WITH THE CVM DOES NOT IMPLY ANY ANALYSIS OF THE COMPANY. COMPANY'S MANAGEMENT IS RESPONSIBLEFOR THE ACCURACY OF THE INFORMATION PROVIDED.
01.01- IDENTIFICATION
1 - CVM CODE 2 - COMPANY NAME 3 - Federal Corporate Taxpayers' Registration Number -CNPJ
02062-1 FERTILIZANTES HERINGER S.A. 22.266.175/0001-88
4 - State Registration Number - NIRE
323002794-6
01.02 - HEAD OFFICE
1 - ADDRESS 2 - SUBURB OR DISTRICT
Avenida Idalino Carvalho, s/n Areinha
3 - POSTAL CODE 4 - MUNICIPALITY 5 - STATE
29135-000 Viana ES
6 - AREA CODE 7 - TELEPHONE 8 - TELEPHONE 9 - TELEPHONE 10 - TELEX
5519 3884-9071 - -
11 - AREA CODE 12 - FAX 13 -FAX 14 -FAX5519 3884-7498 - -
15 - [email protected]
01.03 - INVESTOR RELATIONS OFFICER (Company Mail Address)
1 - NAME
Wilson Rio Mardonado
2 - ADDRESS 3 - SUBURB OR DISTRICT
Av. Irene Karcher, 620 Betel
4 - POSTAL CODE 5 - MUNICIPALITY 6 - STATE
13140-000 Paulínia SP
7 - AREA CODE 8 - TELEPHONE 9 - TELEPHONE 10 - TELEPHONE 11 - TELEX5519 3884-9092 - -
12 - AREA CODE 13 - FAX 14 - FAX 15 - FAX5519 3884-7498 - -
16 - [email protected]
01.04 - GENERAL INFORMATION/INDEPENDENT ACCOUNTANT
CURRENT YEAR CURRENT QUARTER PRIOR QUARTER
1-BEGINNING 2-END 3-QUARTER 4-BEGINNING 5-END 6-QUARTER 7-BEGINNING 8-END
01/01/2009 12/31/2009 1 01/01/2009 03/31/2009 4 10/01/2008 12/31/2008
9 - INDEPENDENT ACCOUNTANTPricewaterhouseCoopers Auditores Independentes
10 - CVM CODE00287-9
11 - PARTNER RESPONSIBLE
Wander Rodrigues Teles
12 - INDIVIDUAL TAXPAYERS' REGISTRATIONNUMBER OF THE PARTNER RESPONSIBLE153.211.501-68
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(A free translation of the original in Portuguese)FEDERAL GOVERNMENT SERVICEBRAZILIAN SECURITIES COMMISSION (CVM)QUARTERLY INFORMATION (ITR)COMMERCIAL, INDUSTRIAL AND OTHER COMPANIES
Unaudited
Corporate LegislationMarch 31, 2009
01.01- IDENTIFICATION
1 - CVM CODE 2 - COMPANY NAME 3 - Federal Corporate Taxpayers' RegistrationNumber - CNPJ
02062-1 FERTILIZANTES HERINGER S.A. 22.266.175/0001-88
01.05 - CAPITAL COMPOSITION
Number of shares Current Quarter Prior quarter Same quarter in prior year(Thousands) 03/31/2009 12/31/2008 03/31/2008
Paid-up capital1 - Common 48,471 48,471 48,8102 - Preferred 0 0 03 - Total 48,471 48,471 48,810
Treasury Stock4 - Common 0 0 1225 - Preferred 0 0 06 - Total 0 0 122
01.06 - CHARACTERISTICS OF THE COMPANY
1 - TYPE OF COMPANYCommercial, Industrial, and Other2 - SITUATIONOperating3 - NATURE OF OWNERSHIPLocal Private
4 - ACTIVITY CODE1020 - Petrochemical and Rubber5 - MAIN ACTIVITYProduction, sale and distribution of fertilizers, throughout Brazil6 - TYPE OF CONSOLIDATIONFull7 - TYPE OF REPORT OF THE INDEPENDENT ACCOUNTANTWithout exceptions
01.07- COMPANIES EXCLUDED FROM THE CONSOLIDATED FINANCIAL STATEMENTS
1 - ITEM 2 - CNPJ 3 - NAME
01.08 - DIVIDENDS APPROVED AND/OR PAID DURING AND AFTER THE QUARTER
1 - ITEM 2 - EVENT 3 - DATEAPPROVED
4 - AMOUNT 5 - DATE OFPAYMENT
6 - TYPE OFSHARE
7 - AMOUNT PER SHARE
3
(A free translation of the original in Portuguese)FEDERAL GOVERNMENT SERVICEBRAZILIAN SECURITIES COMMISSION (CVM)QUARTERLY INFORMATION (ITR)COMMERCIAL, INDUSTRIAL AND OTHER COMPANIES
Unaudited
Corporate LegislationMarch 31, 2009
01.01 - IDENTIFICATION
1 - CVM CODE 2 - COMPANY NAME 3 - Federal Corporate Taxpayers' RegistrationNumber - CNPJ
02062-1 FERTILIZANTES HERINGER S.A. 22.266.175/0001-88
01.09 - SUBSCRIBED CAPITAL AND ALTERATIONS IN THE CURRENT YEAR
1 - ITEM 2 - DATE OFALTERATION
3 - CAPITAL 4 - AMOUNT OF THEALTERATION
5 -NATURE OFALTERATION
7 - NUMBER OFSHARES ISSUED
8 - SHARE PRICE ON ISSUEDATE
(IN THOUSANDS OF REAIS) (IN THOUSANDS OF REAIS) (THOUSANDS) (IN REAIS)01 08/07/2008 448,746 17,032 Capital reserve 0 0.000000000
01.10 - INVESTOR RELATIONS OFFICER
1 - DATE 2 - SIGNATURE
(A free translation of the original in Portuguese)
FEDERAL GOVERNMENT SERVICEBRAZILIAN SECURITIES COMMISSION (CVM)QUARTERLY INFORMATION (ITR)COMMERCIAL, INDUSTRIAL AND OTHER COMPANIES
Unaudited
Corporate LegislationMarch 31, 2009
01 - IDENTIFICATION
1 - CVM CODE 2 - COMPANY NAME 3 - National Corporate Taxpayers' Registry (CNPJ)02062-1 FERTILIZANTES HERINGER S.A. 22.266.175/0001-88
4
02.01 - Balance Sheets - Assets (R$ thousand)
1 - Code 2 - Description 3 - 03/31/2009 4 - 12/31/20081 Total assets 1,848,851 1,891,5851.01 Current assets 1,381,538 1,416,8831.01.01 Cash and cash equivalents 265,149 250.8101.01.02 Credits 660,780 632,1861.01.02.01 Trade accounts receivable 356,268 352,3751.01.02.02 Sundry credits 304,512 279,8111.01.02.02.01 Taxes recoverable 200,038 186,7261.01.02.02.02 Deferred taxes 40,051 40,2541.01.02.02.03 Other accounts receivable 64,423 52,8311.01.03 Inventories 455,609 533,8871.01.04 Others 0 01.02 Non-current assets 467,313 474,7021.02.01 Long-term receivables 132,782 131,5631.02.01.01 Sundry credits 132,782 131,5631.02.01.01.01 Trade accounts receivable 411 4261.02.01.01.02 Taxes recoverable 4,203 4,3811.02.01.01.03 Deferred taxes 103,148 102,3401.02.01.01.04 Judicial deposits 8,632 8,6161.02.01.01.05 Properties held for sale 14,585 13,3301.02.01.01.06 Other accounts receivable 1,803 2,4701.02.01.02 Receivables from related parties 0 01.02.01.02.01 Receivables from associated/equivalent companies 0 01.02.01.02.02 Receivables from subsidiaries 0 01.02.01.02.03 Receivables from other related parties 0 01.02.01.03 Others 0 01.02.02 Permanent assets 334,531 343,1391.02.02.01 Investments 498 5261.02.02.01.01 Associated/equivalent companies 0 01.02.02.01.02 Associated/equivalent companies - Goodwill 0 01.02.02.01.03 Subsidiaries 359 3871.02.02.01.04 Subsidiaries - Goodwill 0 01.02.02.01.05 Other investments 139 1391.02.02.02 Property, plant and equipment 329,652 338,6791.02.02.03 Intangible assets 4,381 3,9341.02.02.04 Deferred charges 0 0
(A free translation of the original in Portuguese)
FEDERAL GOVERNMENT SERVICEBRAZILIAN SECURITIES COMMISSION (CVM)QUARTERLY INFORMATION (ITR)COMMERCIAL, INDUSTRIAL AND OTHER COMPANIES
Unaudited
Corporate LegislationMarch 31, 2009
01 - IDENTIFICATION
1 - CVM CODE 2 - COMPANY NAME 3 - National Corporate Taxpayers' Registry (CNPJ)02062-1 FERTILIZANTES HERINGER S.A. 22.266.175/0001-88
5
02.02 - Balance Sheets - Liabilities and Shareholders' Equity (R$ thousand)
1 - Code 2 - Description 3 - 3/31/2009 4 - 12/31/20082 Total liabilities 1,848,851 1,891,5852.01 Current liabilities 1,595,724 1,642,5592.01.01 Loans and financing 692,333 644,8232.01.02 Debentures 0 02.01.03 Suppliers 748,094 846,6492.01.04 Taxes, charges and contributions 891 2,4432.01.05 Dividends payable 0 6262.01.05.01 Interest on capital 0 6262.01.06 Provisions 0 02.01.07 Payable to related parties 0 02.01.08 Others 154,406 148,0182.01.08.01 Social charges 9,181 8,4832.01.08.02 Deferred taxes 6,305 2,1182.01.08.03 Advances from customers 88,799 64,7792.01.08.04 Other accounts payable 50,121 72,6382.02 Non-current liabilities 11,000 11,7682.02.01 Long-term liabilities 11,000 11,7682.02.01.01 Loans and financing 8,922 9,7762.02.01.02 Debentures 0 02.02.01.03 Provisions 2,068 1,9762.02.01.03.01 Provision for contingencies 2,068 1,9762.02.01.04 Payable to related parties 0 02.02.01.05 Advance for future capital increase 0 02.02.01.06 Others 10 162.02.01.06.01 Taxes payable 10 162.03 Deferred income 0 02.05 Shareholders' equity 242,127 237,2582.05.01 Paid-up capital 448,746 448,7462.05.02 Capital reserves 0 02.05.03 Revaluation reserves 0 02.05.03.01 Own assets 0 02.05.03.02 Subsidiary and associated/equivalent companies 0 02.05.04 Revenue reserve 7,999 02.05.04.01 Legal reserve 0 02.05.04.02 Statutory reserve 0 02.05.04.03 Reserve for contingencies 0 02.05.04.04 Unrealized profits 0 02.05.04.05 Retention of profits reserve 0 02.05.04.06 Special reserve for unpaid dividends 0 02.05.04.07 Other revenue reserves 7,999 02.05.04.07.01 Tax incentive reserve 7,999 02.05.05 Carrying value adjustments 0 02.05.05.01 Adjustments of securities 0 02.05.05.02 Accumulated translation adjustments 0 02.05.05.03 Business combination adjustments 0 02.05.06 Retained earnings (accumulated deficit) (214,618) (211,488)2.05.07 Advance for future capital increase 0 0
(A free translation of the original in Portuguese)
FEDERAL GOVERNMENT SERVICEBRAZILIAN SECURITIES COMMISSION (CVM)QUARTERLY INFORMATION (ITR)COMMERCIAL, INDUSTRIAL AND OTHER COMPANIES
Unaudited
Corporate LegislationMarch 31, 2009
01 - IDENTIFICATION
1 - CVM CODE 2 - COMPANY NAME 3 - National Corporate Taxpayers' Registry (CNPJ)02062-1 FERTILIZANTES HERINGER S.A. 22.266.175/0001-88
6
03.01 - Statements of Income (R$ thousand)
1 - Code 2 - Description 3 - 1/1/2009 to 3/31/2009 4 - 1/1/2009 to 3/31/2009 5 - 1/1/2008 to 3/31/2008 6 - 1/1/2008 to 3/31/20083.01 Gross sales/services revenue 653,964 653,964 674,189 674,1893.02 Deductions from gross revenue (13,495) (13,495) (13,562) (13,562)3.03 Net sales/services revenue 640,469 640,469 660,627 660,6273.04 Cost of sales - goods and services (597,297) (597,297) (579,669) (579,669)3.05 Gross profit 43,172 43,172 80,958 80,9583.06 Operating income/expenses (34,721) (34,721) (47,785) (47,785)3.06.01 Selling (36,992) (36,992) (35,409) (35,409)3.06.02 General and administrative (11,293) (11,293) (9,474) (9,474)3.06.03 Financial 6,562 6,562 (4,010) (4,010)3.06.03.01 Financial income 44,047 44,047 48,505 48,5053.06.03.02 Financial expenses (37,485) (37,485) (52,515) (52,515)3.06.04 Other operating income 7,999 7,999 3,026 3,0263.06.05 Other operating expenses (969) (969) (1,918) (1,918)3.06.05.01 Employees' profit sharing - Complement 0 0 (1,591) (1,591)3.06.05.02 Other operating expenses (969) (969) (327) (327)3.06.06 Equity in the results of investees (28) (28) 0 03.07 Operating result 8,451 8,451 33,173 33,1733.08 Non-operating result 0 0 0 03.08.01 Income 0 0 0 03.08.02 Expenses 0 0 0 03.09 Result before taxation/ profit sharing 8,451 8,451 33,173 33,1733.10 Provision for income tax and social contribution 0 0 (10,951) (10,951)3.11 Deferred income tax (3,582) (3,582) 892 8923.12 Profit sharing/Statutory contributions 0 0 0 03.12.01 Profit sharing 0 0 0 03.12.02 Contributions 0 0 0 03.13 Reversal of interest on capital 0 0 0 03.15 Net income/loss for the period 4,869 4,869 23,114 23,114
NUMBER OF SHARES, EX-TREASURY (thousand) 48,471 48,471 48,688 48,688EARNINGS PER SHARE (Reais) 0.10045 0.10045 0.47474 0.47474LOSS PER SHARE (Reais)
(A free translation of the original in Portuguese)
FEDERAL GOVERNMENT SERVICEBRAZILIAN SECURITIES COMMISSION (CVM)QUARTERLY INFORMATION (ITR)COMMERCIAL, INDUSTRIAL AND OTHER COMPANIES
Unaudited
Corporate LegislationMarch 31, 2009
01 - IDENTIFICATION
1 - CVM CODE 2 - COMPANY NAME 3 - National Corporate Taxpayers' Registry (CNPJ)02062-1 FERTILIZANTES HERINGER S.A. 22.266.175/0001-88
7
04.01 - Statement of Cash Flows - Indirect Method (R$ thousand)
1 - Code 2 - Description 3 - 1/01/2009 to 3/31/2009 4 - 1/01/2009 to 03/31/2009 5 - 01/01/2008 to 03/31/2008 6 - 01/01/2008 to 03/31/20084.01 Cash flows from operating activities 5,229 5,229 103,335 103,335
4.01.01Net cash provided by (used in) operating
activities (198,782) (198,782) 49,503 49,5034.01.01.01 Net income for the period 4,869 4,869 23,114 23,114
4.01.01.02Unrealized exchange variation on trade accountsreceivable 385 385 2,259 2,259
4.01.01.03 Change in allowance for doubtful accounts 1,241 1,241 1,466 1,466
4.01.01.04Reversal of unrealized exchange variation oninventories (500) (500) (4,179) (4,179)
4.01.01.05 Reversal of provision for inventories (64,374) (64,374) 0 04.01.01.06 Provision for inventory losses 2,075 2,075 2,622 2,6224.01.01.07 Depreciation and amortization 9,562 9,562 3,340 3,3404.01.01.08 Loss from equity in the results of investees 28 28 0 04.01.01.09 Loss on sale of property, plant and equipment 1,248 1,248 81 814.01.01.10 Reversal of provision for property held for sale (79) (79) (151) (151)4.01.01.11 Deferred taxes 3,582 3,582 (892) (892)
4.01.01.12Provision (reversal) of unrealized interest andexchange variation on suppliers (131,018) (131,018) 17,222 17,222
4.01.01.13Provision (reversal) of unrealized interest andexchange variation on loans (16,637) (16,637) 4,257 4,257
4.01.01.14 Provision for vacation pay and 13th month salary 16 16 262 262
4.01.01.15Provision (Reversal) of unrealized exchangevariation on other accounts payable (4,275) (4,275) 92 92
4.01.01.16 Provision for contingencies 70 70 275 2754.01.01.17 Interest and financial charges 22 22 18 184.01.01.18 Unrealized swaps (4,997) (4,997) (283) (283)4.01.02 Changes in assets and liabilities 204,011 204,011 53,832 53,8324.01.02.01 Trade accounts receivable (7,377) (7,377) (22,958) (22,958)4.01.02.02 Inventories 141,077 141,077 52,471 52,4714.01.02.03 Income tax and social contribution recoverable (42,675) (42,675) 2,721 2,7214.01.02.04 Taxes recoverable 29,541 29,541 779 7794.01.02.05 Other assets (6,025) (6,025) (5,359) (5,359)4.01.02.06 Judicial deposits (16) (16) 4 44.01.02.07 Properties held for sale 697 697 537 5374.01.02.08 Suppliers 32,462 32,462 (106,954) (106,954)4.01.02.09 Contracting of import financing 238,065 238,065 103,863 103,8634.01.02.10 Payment of principal of import financing (173,785) (173,785) (5,596) (5,596)4.01.02.11 Payment of interest on financing (12,855) (12,855) (3,531) (3,531)4.01.02.12 Salaries and social charges 682 682 (3,250) (3,250)4.01.02.13 Taxes payable (1,558) (1,558) (441) (441)
(A free translation of the original in Portuguese)
FEDERAL GOVERNMENT SERVICEBRAZILIAN SECURITIES COMMISSION (CVM)QUARTERLY INFORMATION (ITR)COMMERCIAL, INDUSTRIAL AND OTHER COMPANIES
Unaudited
Corporate LegislationMarch 31, 2009
01 - IDENTIFICATION
1 - CVM CODE 2 - COMPANY NAME 3 - National Corporate Taxpayers' Registry (CNPJ)02062-1 FERTILIZANTES HERINGER S.A. 22.266.175/0001-88
8
1 - Code 2 - Description 3 - 1/01/2009 to 3/31/2009 4 - 1/01/2009 to 03/31/2009 5 - 01/01/2008 to 03/31/2008 6 - 01/01/2008 to 03/31/20084.01.02.14 Advances from customers 24,020 24,020 34,876 34,8764.01.02.15 Other accounts payable (18,242) (18,242) 6,670 6,6704.01.03 Others 0 0 0 04.02 Cash flows from investing activities (2,133) (2,133) (41,116) (41,116)4.02.01 Additions to investments 0 0 (400) (400)4.02.02 Purchase of property, plant and equipment (6,702) (6,702) (39,347) (39,347)
4.02.03Proceeds from sales of property, plant andequipment 5,523 5,523 1,830 1,830
4.02.04 Additions to intangible assets (954) (954) (575) (575)4.02.05 Treasury shares 0 0 (2,624) (2,624)4.03 Cash flows from financing activities 11,243 11,243 (1,544) (1,544)4.03.01 Loans and financing 13,890 13,890 0 04.03.02 Payment of principal of loans and financing (2,021) (2,021) (788) (788)4.03.03 Distribution and payment of interest on capital (626) (626) (2,914) (2,914)4.03.04 Capital increase 0 0 966 9664.03.05 Tax incentive - PSDI 0 0 1,192 1,192
4.04Exchange variation on cash and cashequivalents 0 0 0 0
4.05Increase (decrease) in cash and cashequivalents 14,339 14,339 60,675 60,675
4.05.01Cash and cash equivalents at the beginning ofthe year 250,810 250,810 118,445 118,445
4.05.02Cash and cash equivalents at the end of theyear 265,149 265,149 179,120 179,120
(A free translation of the original in Portuguese)
FEDERAL GOVERNMENT SERVICEBRAZILIAN SECURITIES COMMISSION (CVM)QUARTERLY INFORMATION (ITR)COMMERCIAL, INDUSTRIAL AND OTHER COMPANIES
Unaudited
Corporate LegislationMarch 31, 2009
01 - IDENTIFICATION
1 - CVM CODE 2 - COMPANY NAME 3 - National Corporate Taxpayers' Registry (CNPJ)02062-1 FERTILIZANTES HERINGER S.A. 22.266.175/0001-88
9
05.01 - Statement of Changes in Shareholders' Equity for the Period January 1 to March 31, 2009 (R$ thousand)
1 - Code 2 - Description 3 - Capital4 - Capital
reserves5 - Revaluation
reserves6 - Revenue
reserves
7 - Retainedearnings /
accumulateddeficit
8 - Carryingvalue
adjustments
9 - Totalshareholders'
equity5.01 Opening balance 448,746 0 0 0 (211,488) 0 237,2585.02 Prior year adjustments 0 0 0 0 0 0 05.03 Adjusted balance 448,746 0 0 0 (211,488) 0 237,2585.04 Net income/loss for the period 0 0 0 0 4,869 0 4,8695.05 Appropriations 0 0 0 0 0 0 05.05.01 Dividends 0 0 0 0 0 0 05.05.02 Interest on capital 0 0 0 0 0 0 05.05.03 Other appropriations 0 0 0 0 0 0 05.06 Realization of revenue reserves 0 0 0 7,999 (7,999) 0 05.06.01 Appropriation of tax incentive reserve 0 0 0 7,999 (7,999) 0 05.07 Carrying value adjustments 0 0 0 0 0 0 05.07.01 Adjustments of securities 0 0 0 0 0 0 05.07.02 Accumulated translation adjustments 0 0 0 0 0 0 05.07.03 Business combination adjustments 0 0 0 0 0 0 05.08 Capital increase/decrease 0 0 0 0 0 0 05.09 Recognition/realization of capital reserves 0 0 0 0 0 0 05.10 Treasury shares 0 0 0 0 0 0 05.11 Other capital transactions 0 0 0 0 0 0 05.12 Others 0 0 0 0 0 0 05.13 Closing balance 448,746 0 0 7,999 (214,618) 0 242,127
(A free translation of the original in Portuguese)
FEDERAL GOVERNMENT SERVICEBRAZILIAN SECURITIES COMMISSION (CVM)QUARTERLY INFORMATION (ITR)COMMERCIAL, INDUSTRIAL AND OTHER COMPANIES
Unaudited
Corporate LegislationMarch 31, 2009
01 - IDENTIFICATION
1 - CVM CODE 2 - COMPANY NAME 3 - National Corporate Taxpayers' Registry (CNPJ)02062-1 FERTILIZANTES HERINGER S.A. 22.266.175/0001-88
10
05.02 - Statement of Changes in Shareholders' Equity for the Period January 1 to March 31, 2009 (R$ thousand)
1 - Code 2 - Description 3 - Capital4 - Capital
reserves5 - Revaluation
reserves6 - Revenue
reserves
7 - Retainedearnings /
accumulateddeficit
8 - Carryingvalue
adjustments
9 - Totalshareholders'
equity5.01 Opening balance 448, 746 0 0 0 (211,488) 0 237,2585.02 Prior year adjustments 0 0 0 0 0 0 05.03 Adjusted balance 448,746 0 0 0 (211,488) 0 237,2585.04 Net income/loss for the period 0 0 0 0 4,869 0 4,8695.05 Appropriations 0 0 0 0 0 0 05.05.01 Dividends 0 0 0 0 0 0 05.05.02 Interest on capital 0 0 0 0 0 0 05.05.03 Other appropriations 0 0 0 0 0 0 05.06 Realization of revenue reserves 0 0 0 7,999 (7,999) 0 05.06.01 Appropriation of tax incentive reserve 0 0 0 7,999 (7,999) 0 05.07 Carrying value adjustments 0 0 0 0 0 0 05.07.01 Adjustments of securities 0 0 0 0 0 0 05.07.02 Accumulated translation adjustments 0 0 0 0 0 0 05.07.03 Business combination adjustments 0 0 0 0 0 0 05.08 Capital increase/decrease 0 0 0 0 0 0 05.09 Recognition/realization of capital reserves 0 0 0 0 0 0 05.10 Treasury shares 0 0 0 0 0 0 05.11 Other capital transactions 0 0 0 0 0 0 05.12 Others 0 0 0 0 0 0 05.13 Closing balance 448,746 0 0 7,999 (214,618) 0 242,127
(A free translation of the original in Portuguese)
FEDERAL GOVERNMENT SERVICEBRAZILIAN SECURITIES COMMISSION (CVM)QUARTERLY INFORMATION (ITR)COMMERCIAL, INDUSTRIAL AND OTHER COMPANIES
Unaudited
Corporate LegislationMarch 31, 2009
01 - IDENTIFICATION
1 - CVM CODE 2 - COMPANY NAME 3 - National Corporate Taxpayers' Registry (CNPJ)02062-1 FERTILIZANTES HERINGER S.A. 22.266.175/0001-88
11
08.01 - Consolidated Balance Sheets - Assets (R$ thousand)
1 - Code 2 - Description 3 - 03/31/2009 4 - 12/31/20081 Total assets 1,848,830 1,891,5851.01 Current assets 1,381,850 1,417,2701.01.01 Cash and cash equivalents 265,443 251,1911.01.02 Credits 660,798 632,1921.01.02.01 Trade accounts receivable 356,268 352,3751.01.02.02 Sundry credits 304,530 279,8171.01.02.02.01 Taxes recoverable 200,038 186,7261.01.02.02.02 Deferred taxes 40,072 40,2541.01.02.02.03 Other accounts receivable 64,420 52,8371.01.03 Inventories 455,609 533,8871.01.04 Others 0 01.02 Non-current assets 466,980 474,3151.02.01 Long-term receivables 132,782 131,5631.02.01.01 Sundry credits 132,782 131,5631.02.01.01.01 Trade accounts receivable 411 4261.02.01.01.02 Taxes recoverable 4,203 4,3811.02.01.01.03 Deferred taxes 103,148 102,3401.02.01.01.04 Judicial deposits 8,632 8,6161.02.01.01.05 Properties held for sale 14,585 13,3301.02.01.01.06 Other accounts receivable 1,803 2,4701.02.01.02 Receivables from related parties 0 01.02.01.02.01 Receivables from associated/equivalent companies 0 01.02.01.02.02 Receivables from subsidiaries 0 01.02.01.02.03 Receivables from other related parties 0 01.02.01.03 Others 0 01.02.02 Permanent assets 334,198 342,7521.02.02.01 Investments 139 1391.02.02.01.01 Associated/equivalent companies 0 01.02.02.01.02 Subsidiaries 0 01.02.02.01.03 Other investments 139 1391.02.02.02 Property, plant and equipment 329,678 338,6791.02.02.03 Intangible assets 4,381 3,9341.02.02.04 Deferred charges 0 0
(A free translation of the original in Portuguese)
FEDERAL GOVERNMENT SERVICEBRAZILIAN SECURITIES COMMISSION (CVM)QUARTERLY INFORMATION (ITR)COMMERCIAL, INDUSTRIAL AND OTHER COMPANIES
Unaudited
Corporate LegislationMarch 31, 2009
01 - IDENTIFICATION
1 - CVM CODE 2 - COMPANY NAME 3 - National Corporate Taxpayers' Registry (CNPJ)02062-1 FERTILIZANTES HERINGER S.A. 22.266.175/0001-88
12
08.02 - Consolidated Balance Sheets - Liabilities and Shareholders' Equity (R$ thousand)
1 - Code 2 - Description 3 - 3/31/2009 4 - 12/31/20082 Total liabilities 1,848,830 1,891,5852.01 Current liabilities 1,595,703 1,642,5592.01.01 Loans and financing 692,333 644,8232.01.02 Debentures 0 02.01.03 Suppliers 747,963 846,6492.01.04 Taxes, charges and contributions 988 2,4432.01.05 Dividends payable 0 6262.01.05.01 Interest on capital 0 6262.01.06 Provisions 0 02.01.07 Payable to related parties 0 002.01.08 Others 154,419 148,0182.01.08.01 Social charges 9,189 8,4832.01.08.02 Deferred taxes 6,305 2,1182.01.08.03 Advances from customers 88,799 64,7792.01.08.04 Other accounts payable 50,126 72,6382.02 Non-current liabilities 11,000 11,7682.02.01 Long-term liabilities 11,000 11,7682.02.01.01 Loans and financing 8,922 9,7762.02.01.02 Debentures 0 02.02.01.03 Provisions 2,068 1,9762.02.01.03.01 Provision for contingencies 2,068 1,9762.02.01.04 Payable to related parties 0 02.02.01.05 Advance for future capital increase 0 002.02.01.06 Others 10 162.02.01.06.01 Taxes payable 10 162.03 Deferred income 0 02.04 Minority interest 0 02.05 Shareholders' equity 242,127 237,2582.05.01 Paid-up capital 448,746 448,7462.05.02 Capital reserves 0 02.05.03 Revaluation reserves 0 02.05.03.01 Own assets 0 02.05.03.02 Subsidiary and associated/equivalent companies 0 02.05.04 Revenue reserve 7,999 02.05.04.01 Legal reserve 0 02.05.04.02 Statutory reserve 0 02.05.04.03 Reserve for contingencies 0 02.05.04.04 Unrealized profits 0 02.05.04.05 Retention of profits reserve 0 02.05.04.06 Special reserve for unpaid dividends 0 02.05.04.07 Other revenue reserves 7,999 02.05.04.07.01 Tax incentive reserve 7,999 02.05.05 Carrying value adjustments 0 02.05.05.01 Adjustments of securities 0 02.05.05.02 Accumulated translation adjustments 0 05,05.05.03 Business combination adjustments 0 02.05.06 Retained earnings/(accumulated deficit) (214,618) (211,488)2.05.07 Advance for future capital increase 0 0
(A free translation of the original in Portuguese)
FEDERAL GOVERNMENT SERVICEBRAZILIAN SECURITIES COMMISSION (CVM)QUARTERLY INFORMATION (ITR)COMMERCIAL, INDUSTRIAL AND OTHER COMPANIES
Unaudited
Corporate LegislationMarch 31, 2009
01 - IDENTIFICATION
1 - CVM CODE 2 - COMPANY NAME 3 - National Corporate Taxpayers' Registry (CNPJ)02062-1 FERTILIZANTES HERINGER S.A. 22.266.175/0001-88
13
09.01 Consolidated Statements of Income (R$ thousand)
1 - Code 2 - Description 3 - 1/1/2009 to 3/31/2009 4 - 1/1/2009 to 3/31/20095 - 1/1/2008 to
3/31/20086 - 1/1/2008 to
3/31/20083.01 Gross sales/services revenue 653,964 653,964 0 03.02 Deductions from gross revenue (13,496) (13,496) 0 03.03 Net sales/services revenue 640,468 640,468 0 03.04 Cost of sales - goods and services (598,432) (598,432) 0 03.05 Gross profit 42,036 42,036 0 03.06 Operating income/expenses (33,599) (33,599) 0 03.06.01 Selling (35,852) (35,852) 0 03.06.02 General and administrative 11,348 11,348 0 03.06.03 Financial 6,561 6,561 0 03.06.03.01 Financial income 44,048 44,048 0 03.06.03.02 Financial expenses (37,487) (37,487) 0 03.06.04 Other operating income 7,999 7,999 0 03.06.05 Other operating expenses (959) (959) 0 03.06.05.01 Employees' profit sharing - Complement 0 0 0 03.06.05.02 Other operating expenses (959) (959) 0 03.06.06 Equity in the results of investees 0 0 0 03.07 Operating result 8,437 8,437 0 03.08 Non-operating result 0 0 0 03.08.01 Income 0 0 0 03.08.02 Expenses 0 0 0 03.09 Result before taxation/profit sharing 8,437 8,437 0 03.10 Provision for income tax and social contribution 0 0 0 03.11 Deferred income tax (3,568) (3,568) 0 03.12 Profit sharing/Statutory contributions 0 0 0 03.12.01 Profit sharing 0 0 0 03.12.02 Contributions 0 0 0 03.13 Reversal of interest on capital 0 0 0 05.14 Minority interest 0 0 0 03.15 Net income/loss for the period 4,869 4,869 0 0
NUMBER OF SHARES, EX-TREASURY (thousand) 48,471 48,471 48,688 48,688EARNINGS PER SHARE (Reais) 0.10045 0.10045 0.00000 0.000000LOSS PER SHARE (Reais)
(A free translation of the original in Portuguese)
FEDERAL GOVERNMENT SERVICEBRAZILIAN SECURITIES COMMISSION (CVM)QUARTERLY INFORMATION (ITR)COMMERCIAL, INDUSTRIAL AND OTHER COMPANIES
Unaudited
Corporate LegislationMarch 31, 2009
01 - IDENTIFICATION
1 - CVM CODE 2 - COMPANY NAME 3 - National Corporate Taxpayers' Registry (CNPJ)02062-1 FERTILIZANTES HERINGER S.A. 22.266.175/0001-88
14
10.01 - Consolidated Statement of Cash Flows - Indirect Method (R$ thousand)
1 - Code 2 - Description 3 - 1/1/2009 to 3/31/2009 4 - 1/1/2009 to 3/31/20085 - 1/1/2008 to
3/31/20086 - 1/1/2008 to
3/31/20084.01 Cash flows from operating activities 5,168 5,168 0 04.01.01 Net cash provided by (used in) operating activities (198,818) (198,818) 0 04.01.01.01 Net income for the year 4,869 4,869 0 0
4.01.01.02Unrealized exchange variation on trade accountsreceivable 385 385 0 0
4.01.01.03 Change in allowance for doubtful accounts 1,241 1,241 0 0
4.01.01.04Reversal of unrealized exchange variation oninventories (500) (500) 0 0
4.01.01.05 Reversal of provision for inventories (64,374) (64,374) 0 04.01.01.06 Provision for inventory losses 2,075 2,075 0 04.01.01.07 Depreciation and amortization 9,562 9,562 0 04.01.01.08 Loss on sale of property, plant and equipment 1,248 1,248 0 04.01.01.09 Reversal of provision for property held for sale (79) (79) 0 04.01.01.10 Deferred taxes 3,568 3,568 0 0
4.01.01.11Provision (reversal) of unrealized interest andexchange variation on suppliers (131,018) (131,018) 0 0
4.01.01.12Provision (reversal) of unrealized interest andexchange variation on loans (16,637) (16,637) 0 0
4.01.01.13 Provision for vacation pay and 13th month salary 22 22 0 0
4.01.01.14Provision (reversal) of unrealized exchange variationon other accounts payable (4,275) (4,275) 0 0
4.01.01.15 Provision for contingencies 70 70 0 04.01.01.16 Interest and financial charges 22 22 0 04.01.01.17 Unrealized swaps (4,997) (4,997) 0 04.01.02 Changes in assets and liabilities 203,986 203,986 0 04.01.02.01 Trade accounts receivable (7,377) (7,377) 0 04.01.02.02 Inventories 141,077 141,077 0 04.01.02.03 Income tax and social contribution recoverable (42,675) (42,675) 0 04.01.02.04 Taxes recoverable 29,541 29,541 0 04.01.02.05 Other assets (6,022) (6,022) 0 04.01.02.06 Judicial deposits (16) (16) 0 04.01.02.07 Properties held for sale 697 697 0 04.01.02.08 Suppliers 32,331 32,331 0 04.01.02.09 Contracting of import financing 238,065 238,065 0 0
(A free translation of the original in Portuguese)
FEDERAL GOVERNMENT SERVICEBRAZILIAN SECURITIES COMMISSION (CVM)QUARTERLY INFORMATION (ITR)COMMERCIAL, INDUSTRIAL AND OTHER COMPANIES
Unaudited
Corporate LegislationMarch 31, 2009
01 - IDENTIFICATION
1 - CVM CODE 2 - COMPANY NAME 3 - National Corporate Taxpayers' Registry (CNPJ)02062-1 FERTILIZANTES HERINGER S.A. 22.266.175/0001-88
15
1 - Code 2 - Description 3 - 1/1/2009 to 3/31/2009 4 - 1/1/2009 to 3/31/20085 - 1/1/2008 to
3/31/20086 - 1/1/2008 to
3/31/20084.01.02.10 Payment of principal of import financing (173,785) (173,785) 0 04.01.02.11 Payment of interest on financing (12,855) (12,855) 0 04.01.02.12 Salaries and social charges 684 684 0 04.01.02.13 Taxes payable (1,462) (1,462) 0 04.01.02.14 Advances from customers 24,020 24,020 0 04.01.02.15 Other accounts payable (18,237) (18,237) 0 04.01.03 Others 0 0 0 04.02 Cash flows from investing activities (2,159) (2,159) 0 04.02.01 Purchase of property, plant and equipment (6,728) (6,728) 0 0
4.02.02Proceeds from sales of property, plant andequipment 5,523 5,523 0 0
4.02.03 Additions to intangible assets (954) (954) 0 04.03 Cash flows from financing activities 11,243 11,243 0 04.03.01 Loans and financing 13,890 13,890 0 04.03.02 Payment of principal of loans and financing (2,021) (2,021) 0 04.03.03 Distribution and payment of interest on capital (626) (626) 0 04.04 Exchange variation on cash and cash equivalents 0 0 0 04.05 Increase (decrease) in cash and cash equivalents 14,252 14,252 0 0
4.05.01Cash and cash equivalents at the beginning of theyear 251,191 251,191 0 0
4.05.02 Cash and cash equivalents at the end of the year 265,443 265,443 0 0
(A free translation of the original in Portuguese)
FEDERAL GOVERNMENT SERVICEBRAZILIAN SECURITIES COMMISSION (CVM)QUARTERLY INFORMATION (ITR)COMMERCIAL, INDUSTRIAL AND OTHER COMPANIES
Unaudited
Corporate LegislationMarch 31, 2009
01 - IDENTIFICATION
1 - CVM CODE 2 - COMPANY NAME 3 - National Corporate Taxpayers' Registry (CNPJ)02062-1 FERTILIZANTES HERINGER S.A. 22.266.175/0001-88
16
11.01 - Consolidated Statement of Changes in Shareholders' Equity for the Period January 1 to March 31, 2009 (R$ thousand)
1 - Code 2 - Description 3 - Capital4 - Capital
reserves5 - Revaluation
reserves6 - Revenue
reserves
7 - Retainedearnings/
accumulateddeficit
8 - Carryingvalue
adjustments
9 - Totalshareholders'
equity5.01 Opening balance 448, 746 0 0 0 (211,488) 0 237,2585.02 Prior year adjustments 0 0 0 0 0 0 05.03 Adjusted balance 448,746 0 0 0 (211,488) 0 237,2585.04 Net income/loss for the period 0 0 0 0 4,869 0 4,8695.05 Appropriations 0 0 0 0 0 0 05.05.01 Dividends 0 0 0 0 0 0 05.05.02 Interest on capital 0 0 0 0 0 0 05.05.03 Other appropriations 0 0 0 0 0 0 05.06 Realization of revenue reserves 0 0 0 7,999 (7,999) 0 05.06.01 Appropriation of tax incentive reserve 0 0 0 7,999 (7,999) 0 05.07 Carrying value adjustments 0 0 0 0 0 0 05.07.01 Adjustments of securities 0 0 0 0 0 0 05.07.02 Accumulated translation adjustments 0 0 0 0 0 0 05.07.03 Business combination adjustments 0 0 0 0 0 0 05.08 Capital increase/decrease 0 0 0 0 0 0 05.09 Recognition/realization of capital reserves 0 0 0 0 0 0 05.10 Treasury shares 0 0 0 0 0 0 05.11 Other capital transactions 0 0 0 0 0 0 05.12 Others 0 0 0 0 0 0 05.13 Closing balance 448,746 0 0 7,999 (214,618) 0 242,127
(A free translation of the original in Portuguese)
FEDERAL GOVERNMENT SERVICEBRAZILIAN SECURITIES COMMISSION (CVM)QUARTERLY INFORMATION (ITR)COMMERCIAL, INDUSTRIAL AND OTHER COMPANIES
Unaudited
Corporate LegislationMarch 31, 2009
01 - IDENTIFICATION
1 - CVM CODE 2 - COMPANY NAME 3 - National Corporate Taxpayers' Registry (CNPJ)02062-1 FERTILIZANTES HERINGER S.A. 22.266.175/0001-88
17
11.02 - Consolidated Statement of Changes in Shareholders' Equity for the Period January 1 to March 31, 2009 (R$ thousand)
1 - Code 2 - Description 3 - Capital4 - Capital
reserves5 - Revaluation
reserves6 - Revenue
reserves
7 - Retainedearnings /
accumulateddeficit
8 - Carryingvalue
adjustments
9 - Totalshareholders'
equity5.01 Opening balance 448, 746 0 0 0 (211,488) 0 237,2585.02 Prior year adjustments 0 0 0 0 0 0 05.03 Adjusted balance 448,746 0 0 0 (211,488) 0 237,2585.04 Net income / loss for the period 0 0 0 0 4,869 0 4,8695.05 Appropriations 0 0 0 0 0 0 05.05.01 Dividends 0 0 0 0 0 0 05.05.02 Interest on capital 0 0 0 0 0 0 05.05.03 Other appropriations 0 0 0 0 0 0 05.06 Realization of revenue reserves 0 0 0 7,999 (7,999) 0 05.06.01 Appropriation of tax incentive reserve 0 0 0 7,999 (7,999) 0 05.07 Carrying value adjustments 0 0 0 0 0 0 05.07.01 Adjustments of securities 0 0 0 0 0 0 05.07.02 Accumulated translation adjustments 0 0 0 0 0 0 05.07.03 Business combination adjustments 0 0 0 0 0 0 05.08 Capital increase / decrease 0 0 0 0 0 0 05.09 Recognition / realization of capital reserves 0 0 0 0 0 0 05.10 Treasury shares 0 0 0 0 0 0 05.11 Other capital transactions 0 0 0 0 0 0 05.12 Others 0 0 0 0 0 0 05.13 Closing balance 448,746 0 0 7,999 (214,618) 0 242,127
(A free translation of the original in Portuguese)FEDERAL GOVERNMENT SERVICEBRAZILIAN SECURITIES COMMISSION (CVM)QUARTERLY INFORMATION (ITR)COMMERCIAL, INDUSTRIAL AND OTHER COMPANIES
Unaudited
Corporate LegislationMarch 31, 2009
01 - IDENTIFICATION1 - CVM CODE 2 - COMPANY NAME 3 - National Corporate Taxpayers' Registry (CNPJ)02062-1 FERTILIZANTES HERINGER S.A. 22.266.175/0001-88
06.01 - Notes to the Quarterly Information(Amounts in thousands of reais unless otherwise indicated)
18
1 Operations
The principal activity of Fertilizantes Heringer S.A. (the "Company"), which was founded in1968, is the production and sale of fertilizers under the Heringer brand.
The Company's common shares have been traded in the New Market of the São Paulo StockExchange (BOVESPA) as from April 2007.
The Company operates throughout Brazil, primarily in the Southeast, Northeast and Center-Westregions.
The Company, which is headquartered in Viana, in the State of Espírito Santo, Brazil, ownsand operates industrial units in Viana; in Paulínia and Ourinhos in the State of São Paulo; in
Manhuaçu, Três Corações, Uberaba and Igatama, in the State of Minas Gerais; in Rosário do
Catete, in the State of Sergipe; in Paranaguá, in the State of Paraná, and in Catalão, in theState of Goiás. The Company leases industrial units in Camaçari, in the State of Bahia,
Rondonópolis, in the State of Mato Grosso, Rio Brilhante, in the State of Mato Grosso do Sul,Bom Jesus de Goiás, in the State of Goiás and Porto Alegre, in the State of Rio Grande do
Sul; and operates a third-party industrial unit in Bebedouro, in the State of São Paulo and an"SSP - Simple Superphosphate" plant in Paranaguá, in the State of Paraná.
In September 2008, the unit in Rio Verde, in the State of Goiás, was acquired. The unit iscurrently in the pre-operating phase, and its operating activities are expected to start in the
second quarter of 2009.
In March 2008, Lógica Transportes S.A., a wholly owned subsidiary of the Company, was
constituted to carry out road transportation operations and the provision of services to third
parties.
The industrial unit of Rosário do Catete, in the State of Sergipe, benefits from a state tax
incentive agreement originally granted to the Company in September 2003, also known asPSDI ("Programa Sergipano de Desenvolvimento Industrial" - The Sergipe State Program for
Industrial Development), which provides tax relief equivalent to 92% of the Value-added Taxon Sales and Services (ICMS) due in respect of products manufactured by this unit. This
benefit has a term of 10 years and expires in 2013.
As from 2007, the Company started to receive the benefit of a reduction of 75% of the income
(A free translation of the original in Portuguese)FEDERAL GOVERNMENT SERVICEBRAZILIAN SECURITIES COMMISSION (CVM)QUARTERLY INFORMATION (ITR)COMMERCIAL, INDUSTRIAL AND OTHER COMPANIES
Unaudited
Corporate LegislationMarch 31, 2009
01 - IDENTIFICATION1 - CVM CODE 2 - COMPANY NAME 3 - National Corporate Taxpayers' Registry (CNPJ)02062-1 FERTILIZANTES HERINGER S.A. 22.266.175/0001-88
06.01 - Notes to the Quarterly Information(Amounts in thousands of reais unless otherwise indicated)
19
tax payable, which has been granted by the Northeast Development Agency (ADENE). The
benefit was granted in March 2006 for a period of 10 years, and is based on the "exploitationprofit" of the unit located in Rosário do Catete, State of Sergipe.
2 Presentation of Quarterly Information (ITR)and Significant Accounting Practices
2.1 Presentation of Quarterly Information (ITR)
The practices, methods and criteria used in the recording of operations and preparation of the
Quarterly Information (ITR) as of March 31, 2009 of Fertilizantes Heringer S.A. and subsidiarycompany are consistent with those used in the preparation of the financial statements as of
December 31, 2008 published on March 12, 2009. The amounts are expressed in thousandsof reais, unless otherwise indicated.
The consolidated Quarterly Information has been prepared and is presented in accordance with
accounting practices adopted in Brazil, based on the standards and instructions of the BrazilianSecurities Commission (CVM), the technical pronouncements issued by the Institute of
Independent Auditors of Brazil (IBRACON) and the resolutions of the Federal AccountingCouncil (CFC), and includes the financial statements of Fertilizantes Heringer S.A. and the
subsidiary company Lógica Transportes S.A.
The notes refer to the quarterly information of the parent company and, when indicated, alsorefer to the consolidated quarterly information.
3 Cash and Cash Equivalents
Parent company Consolidated
Average ratein 2009
March2009
December2008
March2009
December2008
Cash and banks 21,087 21,672 21,381 22,053Bank Deposit Certificates (CDB) 100.8% of CDI 243,897 223,832 243,897 223,832Debentures - committed
transactions 5,143 5,143Other investments 165 163 165 163
265,149 250,810 265,443 251,191
(A free translation of the original in Portuguese)FEDERAL GOVERNMENT SERVICEBRAZILIAN SECURITIES COMMISSION (CVM)QUARTERLY INFORMATION (ITR)COMMERCIAL, INDUSTRIAL AND OTHER COMPANIES
Unaudited
Corporate LegislationMarch 31, 2009
01 - IDENTIFICATION1 - CVM CODE 2 - COMPANY NAME 3 - National Corporate Taxpayers' Registry (CNPJ)02062-1 FERTILIZANTES HERINGER S.A. 22.266.175/0001-88
06.01 - Notes to the Quarterly Information(Amounts in thousands of reais unless otherwise indicated)
20
The Bank Deposit Certificates (CDB) are denominated in Brazilian reais and redeemable ondemand, and their yield is linked to the Interbank Deposit Certificates (CDI) rate.
4 Trade Accounts Receivable
March 2009 December2008
Local customers 450,714 444,752Foreign customers 1,700 2,323Rural credit transactions (i) (47,778) (47,657)"Vendor" arrangements (i) (3,538) (3,538)Allowance for doubtful accounts (42,421) (41,180)Adjustment to present value (ii) (1,998) (1,899)
356,679 352,801Current assets (356,268) (352,375)
Long-term receivables 411 426
(i) The Company has agreements with financial institutions related to "Vendor" and Rural Credit
transactions (cash sales with direct financing to the purchaser with a guarantee from the
Company) aimed at preferred customers. The balances are classified as a reduction of the
trade accounts receivable account because the Company guarantees these transactions.
Possible losses are considered at the time of the recognition of the allowance for doubtful
accounts.
(ii) The adjustment to present value was calculated based on all sales transactions with terms of
over 45 days, using an interest rate of 15.39% per annum.
(A free translation of the original in Portuguese)FEDERAL GOVERNMENT SERVICEBRAZILIAN SECURITIES COMMISSION (CVM)QUARTERLY INFORMATION (ITR)COMMERCIAL, INDUSTRIAL AND OTHER COMPANIES
Unaudited
Corporate LegislationMarch 31, 2009
01 - IDENTIFICATION1 - CVM CODE 2 - COMPANY NAME 3 - National Corporate Taxpayers' Registry (CNPJ)02062-1 FERTILIZANTES HERINGER S.A. 22.266.175/0001-88
06.01 - Notes to the Quarterly Information(Amounts in thousands of reais unless otherwise indicated)
21
5 Inventories
March2009
December2008
Raw and packaging materials 312,855 547,343Imports in transit 117,000 18,341Advances to suppliers 21,384 29,378Warehouse 4,792 4,109Provision for adjustment to market value (64,374)Adjustment to present value (422) (910)
455,609 533,887
As of March 31, 2009, the inventories of raw and packaging materials are evaluated and stated at
the average purchase cost, which is lower than the replacement cost or realizable value. As ofDecember 31, 2008, the inventories contemplated a provision for adjustment to market value as,
on that date, due to the world economic downturn, the average costs of certain inventories werehigher than the prices expected for the sale of the products. As of March 31, 2009, this provision
is no longer necessary because: (i) the majority of the inventories was sold in the period; and (ii)
the average costs of inventories were reduced due to the purchases in the period, which allowedfor the recovery of profit margins.
6 Taxes Recoverable
March2009
December2008
Value-Added Tax on Sales and Services (ICMS) (i) 42,081 38,331Corporate Income Tax (IRPJ) 95,065 89,922Social Contribution on Net Income (CSLL) 18,986 18,454Social Contribution on Revenues (COFINS) 43,089 38,306Social Integration Program (PIS) 5,020 6,094
204,241 191,107Current assets (200,038) (186,726)
Long-term receivables (ii) 4,203 4,381
(A free translation of the original in Portuguese)FEDERAL GOVERNMENT SERVICEBRAZILIAN SECURITIES COMMISSION (CVM)QUARTERLY INFORMATION (ITR)COMMERCIAL, INDUSTRIAL AND OTHER COMPANIES
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Corporate LegislationMarch 31, 2009
01 - IDENTIFICATION1 - CVM CODE 2 - COMPANY NAME 3 - National Corporate Taxpayers' Registry (CNPJ)02062-1 FERTILIZANTES HERINGER S.A. 22.266.175/0001-88
06.01 - Notes to the Quarterly Information(Amounts in thousands of reais unless otherwise indicated)
22
(i) The accumulated ICMS credits will be used in the acquisition of plant and equipment and in inputs
for production, besides being used in the usual operations of the Company. On the date of thefinancial statements, the Company had the approval of the State authority of Minas Gerais to
transfer credits in the amount of R$ 7,713, but the approval of the State authority of São Pauloto transfer credits in the amount of R$ 13,502 was still pending.
(ii) Long-term receivables basically refer to the portion of PIS and COFINS on property, plant andequipment, which should be realized between 2011 and 2013.
7 Income Tax and Social Contribution
(a) Composition of deferred taxes
The balances of deferred tax assets and liabilities are as follows:
Parent company
Deferred tax assetsDeferred tax
liabilities
March2009
December2008
March2009
December2008
Income tax and social contribution loss carryforwards 137,048 116,963
Temporary differencesProvision for adjustment to market value of inventories 21,887Allowance for doubtful accounts 117 1,656Unrealized (gains) losses on financial instruments 1,758 2,118Provision for sales commissions 2,034 2,018Provision for losses on the realization of properties for sale
516 543Amortized goodwill of the investor BSSF 656 676Adjustment to present value 823 (3,258) 4,547Provision for inventory losses 705Provision for contingencies 291Other provisions 1,009 2,109
143,199 142,594 6,305 2,118Current (40,051) (40,254) (6,305) (2,118)
Non-current 103,148 102,340
(A free translation of the original in Portuguese)FEDERAL GOVERNMENT SERVICEBRAZILIAN SECURITIES COMMISSION (CVM)QUARTERLY INFORMATION (ITR)COMMERCIAL, INDUSTRIAL AND OTHER COMPANIES
Unaudited
Corporate LegislationMarch 31, 2009
01 - IDENTIFICATION1 - CVM CODE 2 - COMPANY NAME 3 - National Corporate Taxpayers' Registry (CNPJ)02062-1 FERTILIZANTES HERINGER S.A. 22.266.175/0001-88
06.01 - Notes to the Quarterly Information(Amounts in thousands of reais unless otherwise indicated)
23
The consolidated deferred taxes include R$ 21 of tax losses generated by the subsidiarycompany in the first quarter.
(b) Estimated period of realization
The assets, net of the deferred tax liabilities, are expected to be realized as follows:
Parent company Consolidated
Year March 2009December
2008 March 2009
2009 33,746 38,136 33,921
2010 15,775 17,365 15,7752011 14,797 14,797 14,7972012 15,588 15,588 15,5882013 16,079 16,079 16,0792014 to 2016 40,909 38,511 40,909
136,894 140,476 137,069
As the income tax and social contribution taxable bases not only arise from the profit that maybe generated, but also from the existence of non-taxable income, non-deductible expenses,
tax incentives and other variables, there is no immediate correlation between the Company'snet income and the income subject to income tax and social contribution. Therefore, the
expectation of the use of deferred tax assets should not be considered as the only indicator ofthe future results of the Company.
Deferred tax assets and liabilities arising from temporary differences between the tax andaccounting bases are recognized taking into consideration the probable realization of these
taxes. The realization of temporary differences will occur on the effective payment of the
related provisions, when the amounts will become deductible in the determination of the taxes.
(A free translation of the original in Portuguese)FEDERAL GOVERNMENT SERVICEBRAZILIAN SECURITIES COMMISSION (CVM)QUARTERLY INFORMATION (ITR)COMMERCIAL, INDUSTRIAL AND OTHER COMPANIES
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Corporate LegislationMarch 31, 2009
01 - IDENTIFICATION1 - CVM CODE 2 - COMPANY NAME 3 - National Corporate Taxpayers' Registry (CNPJ)02062-1 FERTILIZANTES HERINGER S.A. 22.266.175/0001-88
06.01 - Notes to the Quarterly Information(Amounts in thousands of reais unless otherwise indicated)
24
(c) Reconciliation of income tax and social
contribution expense
The reconciliation between the income tax and social contribution expense at the nominal and
effective rate is shown below:
Parent company Consolidated
Three-monthperiod ended
March 31, 2009
Three-monthperiod ended
March 31, 2008
Three-monthperiod ended
March 31, 2009
Profit before income tax and social contribution 8,451 33,173 8,437
Nominal tax rates 34% 34% 34%
Income tax and social contribution at nominal rates (2,873) (11,279) (2,868)
Effects of permanent exclusions on tax calculation:
Technological development and innovationprogram 478Amortized goodwill of the investorBSSF (656) 739 (656)Others (53) 3 (44)
Total income tax and social contribution benefit(expense) (3,582) (10,059) (3,568)
Current (10,951)Deferred (3,582) 892 (3,568)
Total income tax and social contributionbenefit (expense) (3,582) (10,059 ) (3,568)
(A free translation of the original in Portuguese)FEDERAL GOVERNMENT SERVICEBRAZILIAN SECURITIES COMMISSION (CVM)QUARTERLY INFORMATION (ITR)COMMERCIAL, INDUSTRIAL AND OTHER COMPANIES
Unaudited
Corporate LegislationMarch 31, 2009
01 - IDENTIFICATION1 - CVM CODE 2 - COMPANY NAME 3 - National Corporate Taxpayers' Registry (CNPJ)02062-1 FERTILIZANTES HERINGER S.A. 22.266.175/0001-88
06.01 - Notes to the Quarterly Information(Amounts in thousands of reais unless otherwise indicated)
25
(d) Transitional Tax System
In order to calculate income tax and social contribution on net income for 2008 and 2009,companies may elect the Transitional Tax System (RTT), in which legal entities are allowed toeliminate the accounting effects of Law 11638/07 and MP 449/08 through entries in theTaxable Income Assessment Book (LALUR) or auxiliary records, without any modification tothe commercial accounting records. The company shall declare their election for this systemupon the filing of the Corporate Income Tax Return (DIPJ) for 2008.
The financial statements for the year ended December 31, 2008 and for the period endedMarch 31, 2009 were prepared taking into consideration management's best estimates, which,at the moment, indicate the election of the RTT.
8 Related Parties
(i) Transactions and Balances
The transactions carried out between the Company and related parties refer to commercialoperations, including the leasing of a property and other transactions, and are summarized asfollows:
March 2009 December2008
Accounts receivable
Dalton Dias Heringer 553
Other accounts receivable
Dalton Dias Heringer 42 17
Lógica Transportes S.A. 3
45 17
Local suppliers
Lógica Transportes S.A. 216
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Three-monthperiodended
March 31,2009
Three-monthperiodended
March 31,2008
Gross sales revenuesDalton Dias Heringer 597 474
Cost of salesDalton Dias Heringer 534 388
Selling expenses - Delivery freight - Legal entityLógica Transportes S.A. 1,142
Other operating incomeDalton Dias Heringer 13 14
PurchasesDalton Dias Heringer 95 7
On September 26, 2006, the Company entered into a lease agreement for a rural propertylocated in the State of Tocantins with the shareholder Dalton Dias Heringer, with the objective
of exploring a cattle-breeding business with up to 1000 head of cattle. This property isrecorded in "Properties held for sale" in the amount of R$ 7,118. The monthly lease payments
will range from R$ 4.00 to R$ 6.00, per head of cattle to be placed on the property, dependingon the age of the animals. At March 31, 2009, the amount of R$ 10 was recorded in other
operating income. The term of the lease is five years and is expected to expire in 2011.Should the Company decide to sell the property during the term of the current lease
agreement, the lessee must leave the property without penalty to the Company.
The accounts receivable arise from the sale of the Company's products in the normal course ofbusiness. Similar third-party transactions are used as the basis for the prices, which take into
account the product volumes and characteristics.
Other accounts receivable from Dalton Dias Heringer basically arise from advances for thepurchase of eucalyptus logs used in the construction process of the industrial units. The prices
contracted are based on those practiced with third parties.
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(ii) Remuneration of the key management personnel
Key management personnel include the directors and officers. Remuneration paid or payableto these employees is shown below:
March 2009 March 2008
Salaries and social charges 540 368Executive officers' fees 490 497Profit sharing 227Others 16 18
1,046 1,110
9 Judicial Deposits
March2009
December2008
Taxes 5,925 5,925Civil 1,396 1,396Social security 914 914Labor 397 381
8,632 8,616
10 Properties Held for Sale
March2009
December2008
Rural properties 11,991 12,053Land and urban properties 2,374 1,064Machinery, farming implements and agricultural equipment 1,680 1,767Vehicles 59 44Provision for losses on the realization of properties for sale (1,519 ) (1,598)
14,585 13,330
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Properties held for sale refer to assets received from customers in settlement of accounts
receivable. The provision for losses on realization is recorded for the cases in which the
amount received on settlement is higher than that expected on realization.
Rural properties include the lease agreement with the shareholder Dalton Dias Heringer
(Note 8).
11 Investments
The Company holds a 0.08% interest in the capital of the associated company FertifósAdministração e Participação S.A., which was acquired in 1992, and the investment is stated at
cost. All the other investments are fully provided for.
On March 28, 2008, Lógica Transportes S.A. was formed as a wholly owned subsidiary of
Fertilizantes Heringer S.A., with a capital of R$ 400, corresponding to 40,000 common shares. Itsoperations, comprising highway transportation and rendering of services to third parties, started in
January 2009.
12 Property, Plant and Equipment
Parent company
March 2009December
2008 %
CostAccumulateddepreciation Net Net
Annualdepreciation
rates
Land 6,831 6,831 6,831Buildings 146,536 (9,761) 136,775 126,327 4Vehicles 3,549 (1,526) 2,023 2,235 20Machinery, equipment and
industrial installations 181,340 (23,056) 158,284 166,473 14.7Furniture and fixtures 4,777 (1,816) 2,961 2,715 10Computer and software 7,161 (3,520) 3,641 3,577 19.3Others 5,238 (466) 4,772 4,758 4.3Advances to suppliers 555 555 559Construction in progress 13,810 13,810 25,204
369,797 (40,145) 329,652 338,679
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As of March 31, 2009, the balance of consolidated property, plant and equipment includes
R$ 26 in computers and software used by the subsidiary company.
Construction in progress refers mainly to (i) the purchase of the unit in Rio Verde-GO, which is
in the pre-operating phase and expected to commence operations in the second quarter of2009; (ii) completion of the new unit of Catalão, in the State of Goiás, and; (iii) completion of
the "SSP - Simple Superphosphate" plant in Paranaguá, in the State of Paraná.
Changes in property, plant and equipment are summarized below:
March 2009
Parentcompany Consolidated
Balances at January 1 338,679 338,679
Additions 7,657 7,683
Depreciation (8,958) (8,958)
Residual value of asset disposals (7,726) (7,726)
Balances at December 31 329,652 329,678
Certain property, plant and equipment assets are pledged in guarantee for financing (Note 15).
13 Intangible Assets
March 2009December
2008
Cost
Accumulated
amortization Net Net
Software 11,103 (6,741) 4,362 3,913
Others 34 (15) 19 21
11,137 (6,756) 4,381 3,934
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14 Suppliers
The majority of raw materials is acquired from foreign suppliers. At March 31, 2009, amountsdue in foreign currency corresponded to US$ 262,857 thousand (December 2008 -
US$ 346,872 thousand).
Purchases of raw materials from foreign suppliers are partially guaranteed by letters of credit
from financial institutions (Note 20(g)), and the amounts are restated by reference to theUS dollar quotation
The adjustment to present value was calculated based on all the purchase transactions carried
out with suppliers abroad with terms of over 30 days, using interest of 6.64% per annum
(December 2008 - 7.21% per annum). At March 31, 2009, the adjustment representedR$ 13,374 (December 2008 - R$ 14,838).
15 Loans and Financing
Interest rateMarch
2009December
2008
Import financing (i)Variable
US$ 26,447 thousand(December 2008 - US$ 25,344 thousand)
LIBOR + 0.70% p.a (December2008 - LIBOR + 0.70% p.a.) 61,231 61,914
FixedUS$ 264,943 thousand(December 2008 - US$ 248,614 thousand)
Exchange variation + 6.03% p.a.(December 2008 - Exchangevariation + 5.34% p.a.) 613,397 578,325
Working capital (ii)US$ 6,174 thousand Exchange variation + 12% p.a. 14,295
Industrial credit certificates - BNDES (ii) URTJLP variation + 5.4% p.a.(December 2008 - URTJLPvariation + 5.8% p.a.) 12,332 14,360
701,255 654,599Current liabilities (692,333 ) (644,823 )
Long-term liabilities 8,922 9,776
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(i) Import Financing - financing through the Brazilian Financing Program for Imports involves a
number of agreements with various financial institutions to fund raw material imports.Payments are due from 180 to 270 days from the date of the bill of lading for the shipment of
the raw materials abroad or the date of disbursement of the transaction, and 19.5% of theamount financed was guaranteed by receivables at March 31, 2009. There were no
guarantees for the remaining balance.
(i) Working capital - Refers to a loan with a financial institution with a commercial pledge of 120%
of the financed amount, maturing in July 2009.
(ii) Industrial credit certificates - BNDES refer to credit lines with the National Bank for Social andEconomic Development for the construction of the unit of Paranaguá-PR, which is secured by
the properties financed. The unit of Ourinhos-SP was also financed through theaforementioned BNDES credit, but the pledged assets were the units of Três Corações-MG
and Manhuaçu-MG.
The maturities of long-term amounts are as follows:
March2009
December2008
2010 2,556 3,410
2011 3,410 3,410
2012 2,956 2,956
8,922 9,776
16 Contingencies
(a) Analysis of provision for contingencies and judicial deposits
The Company is a party to legal and administrative lawsuits in Brazil arising in the normal
course of its business. The provisions for probable losses arising from these proceedings areestimated and updated by management, based on the opinion of the Company's external legal
advisors.
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The Company had the following liabilities and judicial deposits relating to the contingencies:
March 2009December
2008
JudicialContingencies deposits Net Net
Nature of contingency:Tax 3,561 (1,982 ) 1,579 1,557Labor and social security 685 (541 ) 144 144Civil 345 345 275
Long-term receivables/payables 4,591 (2,523 ) 2,068 1,976
(b) Change in the provision for contingencies, net
At January 1 1,976Additions 70Interest and monetary variations 22
At December 31 2,068
(c) Possible losses, not provided for in the balance sheet
The Company has tax, social security, labor, administrative and civil lawsuits involving risks ofloss classified by management and its legal advisors as possible, for which no provision is
recognized, as shown below. The amounts presented are monetarily restated based on theofficial SELIC interest rate or, when applicable, they correspond to the amounts restated by the
Company's legal advisors:
March 2009December
2008
Tax 25,380 25,418Labor and social security 11,254 12,056Civil 6,313 6,263
42,947 43,737
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(d) Acquisition of tax credits and their utilization
for offset against taxes due
In February 2003, the Company acquired tax credits arising from federal tax overpayments,which originated from a final and unappealable court decision more than two years earlier, in
an amount defined in the records. A credit assignment agreement was formalized, filed in the
Registry of Titles and Documents, and the substitution of the owner was also requested andapproved by the Federal Court. The decision regarding the substitution was also final and
unappealable.
As from that date, the Company unequivocally owned the tax credit, definitively recognized asbeing its property and with no possibility of questioning by the Government, since the Courts
have already issued final decisions, both as to the amount of the tax overpayment and to the
substitution of the owner.
Offset of tax credits against taxes due
Only after the transfer of the credit and the substitution of the owner, the Company started theoffset of the tax credit against federal taxes payable amounting to R$ 64,554, which was
effected in the period from January to December 2003. Immediately thereafter, and to comply
with the requirement for the offset, the Company requested the cancellation of the executionprocess of the Government's claim, since the offset of the tax credits with related debts of the
same nature already represented the realization of credits that the Company held with theGovernment.
The offset therefore extinguished the tax debt of the Company, pursuant to the provisions of
paragraph 2 of article 74 of Law 9430/96, with wording provided by Law 10637/02, subject to
subsequent ratification. As a result of the above, the extinction of the tax debts becameeffective at the time of offset, which was immediate.
Therefore, still in the year 2003, the use of the tax credits, of which the Company was the sole
owner, was concluded, through the offset and consequent settlement/extinguishment of the taxdebts. As a consequence, the discount obtained on the purchase of the tax credits, in the
amount of R$ 15,300, was considered as realized. The discount was recognized in the result
of that year based on the position of the Company's legal advisors, who considered thechances of success to be probable if questioned by the tax authorities.
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Tax Assessment notices issued by the
Federal Revenue Secretariat of Brazil
Later, in April 2005, the Federal Revenue Secretariat of Brazil, based on a supposed legal veto
to the offset made at the time of article 74 of Law 9430/96 and intending to retroactively applyLaw 11051, published on 12/29/2004, filed a tax assessment against the Company, rejecting
the offset realized. Considering the flagrant disrespect of the legal regulations in effect at thetime of the offset, which authorized the Company to effect the offset, and in order to safeguard
the interests of its shareholders, the Company was obliged to contest this assessment,
supported by the opinion of specialized legal advisors.
Furthermore, on October 6, 2006, the Federal Revenue Secretariat of Brazil, also based on a
regulation issued after the time in which the offset was effected, (Law 11051/04), filed a taxassessment notice to impose a fine in the amount of R$ 56,440, corresponding to 75% of the
principal amount of the credits offset. The Company is also defending this assessment at theadministrative level and, in the opinion of its legal advisors, the risk of loss is considered to be
remote.
Process of enforcement of final and
unappealable decision and limitation period
In the event that the final court decision is to deny the offset of the tax credits, even though the
Company's legal advisors still consider the probable outcome to be favorable to the Company,
the Company will again attempt to secure the right to offset its tax credits via its own legalproceedings.
This will be possible because, as the legal advisors sustain, the five-year limitation period forthe execution of the court sentence started on May 8, 1998, when the final unappealable
decision was issued, and was interrupted on July 1 of the same year, when the execution ofthe sentence was initiated.
Furthermore, as already mentioned above, to comply with the requirement for the offset, thecancellation of the execution process of the Government's claim was requested and this
cancellation request was registered and ratified by the competent judge.
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As regards the ratification, the execution is currently suspended considering the existence of a
special appeal regarding the decision that denied the possibility of the deduction of the totalamount of the credit due, because the payment of a supposed debit in the amount of R$ 200
was suspended at the time of the offset. Supporting the understanding that the limitation periodhas been interrupted, a federal judge decided, when reviewing the Company's request on this
matter, that there is no doubt regarding the duration of the limitation period, also consideringthat the suspension of the enforcement of the tax credits, as a result of the appeal, occurred
after the decision that ratified the request to desist from the execution process. During the
quarter ended September 30, 2008, the appeal filed by the Federal Government was judged,and the decision confirmed the abovementioned decision of the federal judge, which was
favorable to the Company.
Furthermore, the Company's legal advisors emphasize that, if it is alleged that the limitation
period is in progress, because of the suspension of the enforcement process, it would, in fact,still be considered to have been interrupted considering that both the enforcement process and
the offset are pending final judgment.
Consequently, considering the position of the legal advisors that the likelihood of success inthis matter is probable, if the final decision regarding the compensation is ultimately not
favorable to the Company, it will not affect the Company's right to again seek to recover the taxcredits to which it is entitled via a special judicial order, thereby reinitiating the enforcement
proceedings.
In case the Company reclaims its right to offset the tax credits via a special judicial order,because of the impossibility to offset in the manner described above, the recognition in the
financial statements should be at the acquisition cost plus monetary restatement and interest,in accordance with the criterion established in the court sentence, up to the limit of the market
value, in conformity with the understanding of the Brazilian Securities Commission (CVM),through its official letter 379/07 of November 5, 2007, which was issued in response to the
Company's consultation dated October 8, 2007. This is also the understanding of theCompany's independent auditors. At March 31, 2009, the restated acquisition cost was
R$ 83,329.
Current balances of tax credits and of taxes offset
If the tax credit had not been offset against federal taxes, the restated amount, at March 31,
2009, based on the criterion established in the court sentence, would have been R$ 120,185,whereas the debts plus fines and interest would have been R$ R$ 129,458.
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The tax credit was the object of a review and calculation by an independent specialist on
November 7, 2007, for the base date of September 30, 2007, when an appraisal report wasissued determining the value of the credit. Since then, the Company has followed the same
calculation methodology adopted by the specialist for the restatement of these credits.
17 Shareholders' Equity
(a) Capital
According to the Company's by-laws, the Supervisory Board may increase the Company's
capital up to the limit of R$ 800,000.
At March 31, 2009, capital comprised 48,471,407 common nominative shares, with no par value.
On March 5, 2009, at a meeting of the Supervisory Board, the Directors approved the
cancellation of 338,600 common shares kept in treasury in the amount of R$ 5,967, without thereduction of capital, which took place on December 31, 2008 by reducing the Profits retention
reserve, and determined the termination of the share repurchase program approved by theBoard on October 9, 2008.
(b) Revenue reserves
On April 13, 2009, the General Shareholders' Meeting approved the absorption of part of the loss
for the year ended December 31, 2008 with the balance of the revenue reserves existing on thatdate.
Tax incentives reserve
In compliance with the legislation relating to the tax benefit granted by the State of Sergipe
(State Decree No. 22230/03), the Tax incentive from PSDI is directly recorded in the result for
the year and, in order to maintain the tax benefit, transferred from the "retained earnings(accumulated deficit)" account to this reserve. The balance of the tax incentive reserve at
March 31, 2009 refers to the incentives determined in the first quarter of 2009.
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18 Financial Income (Expenses)
Parent company Consolidated
March2009
March2008 March 2009
Financial income
Foreign exchange variations 17,817 41,030 17,817
Earnings on financial investments 6,736 2,302 6,736
Gains on financial instruments (i) 9,943 2,649 9,943
Interest on financial assets and discountsobtained 3,333 1,911 3,334
Monetary variations 3,092 3,092
Income from adjustments to present value 3,126 613 3,126
44,047 48,505 44,048
Financial expenses
Foreign exchange variations (36,637)
Interest on financial liabilities and discounts
granted (11,468) (11,093) (11,469)
Losses on financial instruments (i) (898) (3,543) (898)
Taxes and contributions on financial transactions (9,691) (1,136) (9,692)
Monetary variations (22) (19) (22)
Expenses from adjustments to present value (15,406) (87) (15,406)
(37,485) (52,515) (37,487)
(i) Gains and losses on financial instruments refer mainly to swap transactions.
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19 Other Operating Income, Net
Parent company Consolidated
March2009
March2008 March 2009
Fiscal incentive from the State of Sergipe 7,999 3,341 7,999Others expenses, net (969) (642) (959)
7,030 2,699 7,040
The fiscal incentive from the State of Sergipe corresponds to a reduction of 92% of the ICMSpayable related to the sales from the Rosário do Catete-SE unit (Note 1).
20 Financial Instruments
(a) Identification and valuation of financial instruments
The Company carries out transactions involving several financial instruments, especially cash
and cash equivalents, including financial investments, trade notes receivable, accountspayable to suppliers and loans and financing, including "vendor" and rural credit transactions.
Additionally, the Company carries out transactions involving derivative financial instruments,particularly swap transactions.
Considering the nature of the instruments, excluding derivative financial instruments, the fair
value is basically determined by using the discounted cash flow method. The amountsrecorded in current assets and liabilities, except for transactions related to the import of raw
materials, are highly liquid or mainly mature within three months. Taking into consideration theterms of these instruments, which are systematically traded, the book values approximate their
fair values.
(b) Cash and cash equivalents, financial investments,accounts receivable, other current assets and accounts payable
The amounts recorded approximate their realizable values. Accounts receivable and payable
are recorded at present value.
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(c) Financing
The book value of loans and financing in reais with rates linked to the LIBOR, TJLP andforeign exchange variation approximates the market values.
(d) Financial risk management policy
The Company monitors and evaluates its derivative positions on a daily basis and adjusts its
strategy in response to market conditions. The Company also periodically reviews the creditlimits and creditworthiness of its customers. In view of the policies established for derivative
financial instruments, management considers the occurrence of immeasurable risk situationsto be unlikely.
The Company's risk management policy was established by the Supervisory Board andprovides for the existence of a Hedge Policy Committee responsible for managing the risk in
these transactions, supported by external advisors from a specialized company. Thiscommittee is a permanent technical and advisory body that aims at assisting the Supervisory
Board in its responsibilities related to periodic analyses of protection measures against foreignexchange variations and interest rates, based on an analysis of the effects of such variations
on income and expenses. The Hedge Policy Committee also analyzes the effectiveness of thehedge measures adopted every month and provides recommendations regarding future hedge
variations.
In accordance with the risk management policy conditions, the Company manages some of therisks by using derivative instruments, and speculative negotiations and short sales aregenerally prohibited. Derivative financial instruments are solely used for the purposes ofprotecting cash flow.
(e) Credit risk
The Company's sales policy is closely associated with the credit risk level it is willing to acceptin the normal course of its business. The broad base of customer receivables, the customer
selectivity procedures, and the monitoring of the financing terms of the sales by business
segment and of the individual position limits are procedures that the Company has adopted tomitigate possible problems arising from default on its accounts receivable. The Company also
has an allowance for doubtful accounts, amounting to R$ 42,421 (December 2008 -R$ 41,180), corresponding to 9% of the gross balance of outstanding trade accounts
receivable (December 2008 - 9%), to cover credit risk.
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40
The Company limits its exposure to credit risks associated with banks and financial
investments by investing with highly rated financial institutions, within pre-established limits,and contracting derivative instruments only with financially sound counterparties.
In order to meet customer needs for credit sales matched to harvests, the Company utilizesfinancial instruments to assure liquidity. These instruments are guaranteed by the Company
and are recorded in the "trade accounts receivable" account, the carrying values of which donot differ significantly from their market values.
(f) Liquidity risk
This risk represents the possibility of the Company not having sufficient liquid funds to meet its
financial commitments, due to the mismatch of terms or volume in estimated receipts andpayments.
To manage liquidity of cash in local and foreign currency, assumptions for futuredisbursements and receipts are determined, and these are monitored daily by the Treasury
area.
(g) Market risk
Interest rate risk
This risk arises from the possibility that the Company could incur losses due to fluctuations in
interest rates, increasing the financial expenses related to loans and financing obtained in the
market.
Exchange rate risk
This risk refers to the possibility that the Company could incur losses due to fluctuations inexchange rates, which increase the amounts of liabilities in foreign currency.
(A free translation of the original in Portuguese)FEDERAL GOVERNMENT SERVICEBRAZILIAN SECURITIES COMMISSION (CVM)QUARTERLY INFORMATION (ITR)COMMERCIAL, INDUSTRIAL AND OTHER COMPANIES
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01 - IDENTIFICATION1 - CVM CODE 2 - COMPANY NAME 3 - National Corporate Taxpayers' Registry (CNPJ)02062-1 FERTILIZANTES HERINGER S.A. 22.266.175/0001-88
06.01 - Notes to the Quarterly Information(Amounts in thousands of reais unless otherwise indicated)
41
The assets and liabilities denominated in foreign currency, financial instruments used to
mitigate the effects of exchange variations and the net exposure to the exchange rate risks canbe summarized as follows:
Terms for theexpected financialimpact in March2009 March 2009
December2008
Import in transit - US$ 50,536 thousand (December 2008 -US$ 7,848 thousand) Up to 35 days (117,000) (18,341)
Foreign suppliers:Guaranteed by letters of credit - US$ 32,953 thousand
(December 2008 - US$ 72,335 thousand) Up to 51 days 76,292 169,047Not guaranteed by letters of credit - US$ 229,904 thousand
(December 2008 - US$ 274,537 thousand) Up to 247 days 532,274 641,592Loans and financing
Import financing - US$ 291,390 thousand(December 2008 - US$ 273,958 thousand) Up to 153 days 674,628 640,239Working capital - US$ 6,174 thousand Up to 106 days 14,295
Other accounts payable (receivable), net - US$ 2,166 thousandand EUR 8 thousand (December 2008 - US$ 7,460 thousandand EUR 8 thousand) Up to 270 days 4,882 17,458
1,185,371 1,449,995Financial instruments used to mitigate the effects of exchangevariations Up to 57 days (282,524) (13,550)
Net exposure 902,847 1,436,445
Because of the significance of raw material imports to the Company's operations, the foreignexchange rate volatility represents a significant operational risk. If the effects of a devaluation
of the Brazilian real are not passed through to customers, significant reductions in gross profitmargins could result and, consequently, affect the Company's results of operations. In a
scenario of raw materials with stable prices in US dollars in the international market, the
Company's inventories permit a natural hedge for its liabilities denominated in foreigncurrency.
As a result, in order to mitigate the exchange rate risk, the Company engages in transactionsinvolving derivative financial instruments, contracted with financial institutions, to reduce its
exposure to market and currency risks. These financial instruments are derivatives thatrepresent commitments for the future purchase and sale of currencies or indices at contractually
agreed dates.
(A free translation of the original in Portuguese)FEDERAL GOVERNMENT SERVICEBRAZILIAN SECURITIES COMMISSION (CVM)QUARTERLY INFORMATION (ITR)COMMERCIAL, INDUSTRIAL AND OTHER COMPANIES
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01 - IDENTIFICATION1 - CVM CODE 2 - COMPANY NAME 3 - National Corporate Taxpayers' Registry (CNPJ)02062-1 FERTILIZANTES HERINGER S.A. 22.266.175/0001-88
06.01 - Notes to the Quarterly Information(Amounts in thousands of reais unless otherwise indicated)
42
At March 31, 2009, derivative instruments contracted by the Company totaled US$ 122,030thousand (December 2008 - US$ 5,798 thousand), and the results of these instruments, whichhad not yet been settled, represented gains of R$ 2,306 (December 2008 gains - R$ 175),recorded in the financial statements as "other accounts receivable". The financial result of allderivative instruments in the period represented a net gain of R$ 6,179 (first quarter of 2008 -net loss - R$ 894).
The volume of the protection contracted at March 31, 2009 was a result of the decision of theCompany's Supervisory Board, supported by the Hedge Policy Committee.
(h) Derivatives
Derivative instruments contracted by the Company have the purpose of hedging its operationsagainst risks of fluctuation in the exchange and interest rates, and are not used for speculativepurposes.
The values of the derivative financial instruments, represented by swap contracts, can besummarized as follows:
Reference value(notional)
Fair value receivable/payable
Amounts receivable/payable - Curve
Unrealized gains/losses
March2009
December2008
March2009
December2008
March2009
December2008
Three-monthperiodended
March 30,2009
Three-monthperiodended
March 30,2008
Asset positionForeigncurrency 282,524 13,550 283,617 13,458 282,366 13,416 4,771 2,355
Liability positionIndices - CDI 282,524 13,550 278,445 13,283 278,445 13,284 898 3,543
Gains and losses from hedge transactions are recognized monthly in the result for the year, taking intoconsideration the fair (market) value of these instruments.
Swap contracts
These are contracted for the main purpose of converting the index of foreign currencyloans into the Brazilian real.
(A free translation of the original in Portuguese)FEDERAL GOVERNMENT SERVICEBRAZILIAN SECURITIES COMMISSION (CVM)QUARTERLY INFORMATION (ITR)COMMERCIAL, INDUSTRIAL AND OTHER COMPANIES
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01 - IDENTIFICATION1 - CVM CODE 2 - COMPANY NAME 3 - National Corporate Taxpayers' Registry (CNPJ)02062-1 FERTILIZANTES HERINGER S.A. 22.266.175/0001-88
06.01 - Notes to the Quarterly Information(Amounts in thousands of reais unless otherwise indicated)
43
At March 31, 2009, the Company had currency swaps in the total nominal amount ofUS$ 122,030 thousand, for the purpose of reducing the effects of the exchange variation on itsforeign exchange liability. In these swap contracts, the Company receives the exchangevariation less 0.3% a year and pays 100% of CDI.
The derivative contracts described above expire as follows:
Name of the bankNotional amount- US$ thousand Expiration date
Banco HSBC Bank Brasil S.A. 3,130 April 1, 2009Banco Bradesco S.A. 5,900 April 1, 2009Banco Votorantim S.A. 2,000 April 2, 2009Banco Itaú BBA S.A. 5,000 April 2, 2009Banco Rabobank INTL Brasil S.A. 4,100 April 2, 2009Banco Citibank S.A. 1,000 April 6, 2009Banco Citibank S.A. 3,800 April 7, 2009Banco HSBC Bank Brasil S.A 4,125 April 8, 2009Banco do Brasil S.A. 6,000 April 8, 2009Banco Citibank S.A. 5,000 April 9, 2009Banco Bradesco S.A. 5,800 April 9, 2009Banco Rabobank INTL Brasil S.A. 2,300 April 16, 2009Banco HSBC Bank Brasil S.A. 2,400 April 17, 2009Banco Deutsche Bank S.A. 2,000 April 17, 2009Banco Rabobank INTL Brasil S.A. 3,600 April 17, 2009Banco Itaú BBA S.A. 1,400 April 22, 2009Banco Rabobank INTL Brasil S.A. 1,400 April 22, 2009Banco Rabobank INTL Brasil S.A. 2,800 April 22, 2009Banco Citibank S.A. 6,900 April 24, 2009Banco HSBC Bank Brasil S.A. 3,830 May 6, 2009Banco HSBC Bank Brasil S.A. 2,530 May 7, 2009Banco Itaú BBA S.A. 3,960 May 11, 2009Banco HSBC Bank Brasil S.A. 1,740 May 11, 2009Banco Itaú BBA S.A. 1,040 May 12, 2009Banco Citibank S.A. 2,200 May 12, 2009Banco Bradesco S.A. 4,150 May 12, 2009Banco Bradesco S.A. 1,000 May 13, 2009Banco Citibank S.A. 3,125 May 13, 2009Banco HSBC Bank Brasil S.A. 3,180 May 14, 2009Banco do Brasil S.A. 1,650 May 20, 2009Banco Rabobank INTL Brasil S.A. 5,340 May 21, 2009Banco do Brasil S.A. 3,230 May 22, 2009Banco Itaú BBA S.A. 5,500 May 22, 2009Banco Itaú BBA S.A. 5,300 May 22, 2009Banco Rabobank INTL Brasil S.A. 5,600 May 27, 2009
(A free translation of the original in Portuguese)FEDERAL GOVERNMENT SERVICEBRAZILIAN SECURITIES COMMISSION (CVM)QUARTERLY INFORMATION (ITR)COMMERCIAL, INDUSTRIAL AND OTHER COMPANIES
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01 - IDENTIFICATION1 - CVM CODE 2 - COMPANY NAME 3 - National Corporate Taxpayers' Registry (CNPJ)02062-1 FERTILIZANTES HERINGER S.A. 22.266.175/0001-88
06.01 - Notes to the Quarterly Information(Amounts in thousands of reais unless otherwise indicated)
44
Methodology of calculating fair value of derivatives
Swaps - these are evaluated at the present value, using the market rate on the base date,of future flows, calculated by applying the contractual rates up to the maturity date, basedon the projections of the US dollar verified in the futures contracts registered with theMercantile and Futures Exchange (BM&F).
Contracts subject to margin call
At March 31, 2009, the Company did not have contracts with these characteristics.
Sensitivity analysis
The table below presents the sensitivity analysis of the financial instruments, includingderivatives, describing risks that may result in material losses for the Company. It describesthe most probable scenario (scenario I), according to an evaluation carried out bymanagement, considering a three-month period, when the next financial information, includingthis analysis, should be disclosed. In addition, two other scenarios are presented, inaccordance with CVM Instruction 475/08, to describe the 25% and 50% deterioration in the riskconditions (scenarios II and III, respectively).
Scenario I - probable
Risk - instrument / operation Description - probable scenario EffectScenario
IIScenario
III
Exchange rate
Hedge - SwapExpectation of US$ exchange rate atR$ 2.22 11,617 79,344 147,071
Imports in transitExpectation of US$ exchange rate atR$ 2.22 4,811 32,858 60,905
Foreign suppliersExpectation of US$ exchange rate atR$ 2.22 (25,024) 120,862 266,747
Import financing -foreign currency (US$) -without hedge
Expectation of US$ exchange rate atR$ 2.22 (27,740) 133,981 295,703
Working capital - foreigncurrency (US$)
Expectation of US$ exchange rate atR$ 2.22 (588) 2,839 6,266
Other accounts payable(receivable), net -foreign currency (US$)
Expectation of US$ exchange rate atR$ 2.22 (200) 970 2,140
Total net effect (37,124) 370,854 778,832
(A free translation of the original in Portuguese)FEDERAL GOVERNMENT SERVICEBRAZILIAN SECURITIES COMMISSION (CVM)QUARTERLY INFORMATION (ITR)COMMERCIAL, INDUSTRIAL AND OTHER COMPANIES
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01 - IDENTIFICATION1 - CVM CODE 2 - COMPANY NAME 3 - National Corporate Taxpayers' Registry (CNPJ)02062-1 FERTILIZANTES HERINGER S.A. 22.266.175/0001-88
06.01 - Notes to the Quarterly Information(Amounts in thousands of reais unless otherwise indicated)
45
Scenario I - probable
Risk - instrument / operation Description - probable scenario EffectScenario
IIScenario
III
Interest rate
Loans - foreigncurrency (LIBOR) Maintenance of the LIBOR rate 268 536
Industrial credit certificate -BNDES (URTJLP) Maintenance of the TJLP rate 223 447
Total net effect 491 983
The sensitivity analysis presented above considers changes in relation to the determined risk,
maintaining unchanged all the other variables associated with other risks.
The Company's management considered the following assumption for scenario I - probable:
Exchange risk - A US dollar exchange rate of R$ 2.22 was considered in accordance with
projections prepared by external advisors based on information from first class financial
institutions and contracts negotiated at the BM&F, which consider the most probable US dollar
exchange rate at the maturities of the transactions.
Instruments with interest rate risk - Maintenance of the rate due to the economic scenario and
cash and cash equivalents offered by financial institutions during the period.
21 Insurance Coverage
The Company does not have insurance coverage for its assets, because it considers that there
is a remote probability of significant loss.
However, pursuant to contractual obligations, the Company has two insurance policies that
provide coverage of the production units of Viana-ES and Paranaguá-PR. These policies cover
damages caused by fire, lightning and explosion (including electrical damage), the maximum
limits for indemnity of which are as follows: (i) for the Viana-ES unit, R$ 4,704 and (ii) for the
Paranaguá unit, R$ 5,830.
(A free translation of the original in Portuguese)FEDERAL GOVERNMENT SERVICEBRAZILIAN SECURITIES COMMISSION (CVM)QUARTERLY INFORMATION (ITR)COMMERCIAL, INDUSTRIAL AND OTHER COMPANIES
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01 - IDENTIFICATION1 - CVM CODE 2 - COMPANY NAME 3 - National Corporate Taxpayers' Registry (CNPJ)02062-1 FERTILIZANTES HERINGER S.A. 22.266.175/0001-88
06.01 - Notes to the Quarterly Information(Amounts in thousands of reais unless otherwise indicated)
46
22 Employees' Profit Sharing
The Company has a program for the distribution of profit sharing benefits to employees (PLR),
through which it distributes 10% of net income, adjusted for possible accumulated losses from
prior years.
Before the year-end, the Company distributes to its employees, as an advance on the bonus,one monthly salary, irrespective of the generation of net income. In the event net income is
generated, the advance is deducted from the profit sharing contribution due. If there is noprofit sharing distribution, the advance payment is not discounted.
Employees who are hired during the year are granted a proportional participation.
The advance granted as employee profit sharing is treated as an operating cost or expense
and classified in the related financial statement accounts, and the balance provisioned for the
complementary participation of employees in profits or results, net of the advance, is recordedin a specific account in the statement of income for the year.
23 Stock Options Plan
Under the Company's By-laws and according to a plan approved by the Extraordinary General
Meeting, the Company can grant share purchase or subscription options, by a decision of theSupervisory Board, in favor of officers and employees, with no preferential rights to the
shareholders.
At March 31, 2009, the Company did not have any stock option plans in effect. Any new stock
option plan would have to be previously approved at a shareholders' general meeting.
* * *
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01 - IDENTIFICATION1 - CVM CODE 2 - COMPANY NAME 3 - National Corporate Taxpayers' Registry (CNPJ)02062-1 FERTILIZANTES HERINGER S.A. 22.266.175/0001-88
07.01 – Comments on Company Performance During the Quarter
47
HIGHLIGHTS IN THE PERIOD (1Q09)
Gross sales revenue of R$653.9 million compared to R$674.2 million in 1Q08, a drop ofonly 3.1%;
Gross profit of R$43.1 million compared to R$80.9 million in 1Q08;
EBITDA totaled R$11.5 million compared to R$40.4 million in 1Q08. EBITDA margin
dropped from 6.1% in 1Q08 to 1.8% in 1Q09. The recovery of the EBITDA in 1Q09 inrelation to the negative EBITDA in 4Q08 is a highlight;
Net income of R$4.9 million - despite the drop in relation to 1Q08, when net income totaledR$23.1 million, net income for 1Q09 increased from 4Q08, when the company posted a net
loss;
In 1Q09, market share was 16.2%, a growth of 2.3% from 1Q08, when it was 13.9%.
The customer base grew 10.6% in 1Q09 from 13,524 to 14,956 customers.
The Company's fertilizer sales volume dropped 11.2% in 1Q09. The Brazilian fertilizermarket dropped 23.7% in the same period.
Growth in the share of specialty products in total sales, from 18% in 1Q08 to 22% in 1Q09.
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01 - IDENTIFICATION1 - CVM CODE 2 - COMPANY NAME 3 - National Corporate Taxpayers' Registry (CNPJ)02062-1 FERTILIZANTES HERINGER S.A. 22.266.175/0001-88
07.01 – Comments on Company Performance During the Quarter
48
Fertilizer Industry Deliveries Industry Inventory - Volume
1Q06 1Q07 1Q08 1Q09
3,185
4,6015,443
4,151
(in
tho
usa
nd
of
ton
ne
s)
+44.5%
-23.7%+18.3%
1.000
2.000
3.000
4.000
5.000
6.000
7.000
1Q06 1Q07 1Q08 1Q09
3,224 3,280
5,3834,619
+1.7%
-14.2%
(in
tho
usan
do
fto
nne
s)
+64.1%
Fertilizer Production - Volume Fertilizer Imports - Volume
1Q06 1Q07 1Q08 1Q09
1,734
3,4594,163
729
+99.5%
-82.5%
(in
thou
san
dof
tonn
es)
+20.4%
1Q06 1Q07 1Q08 1Q09
1,8652,126 2,229
1,594
(in
tho
usan
do
fto
nne
s)
+14.0% -28.5%+4.8%
Brazilian Fertilizer Market
The Brazilian fertilizer market dropped 23.7% in 1Q09 in relation to 1Q08, delivering 4.1 millionmetric tons compared with 5.4 million in the same period of 2008. Consumption of fertilizers in
Brazil in 1Q07, a year with a more similar seasonality to that expected for 2009, totaled 4.6
million metric tons, that is, the Brazilian consumption in 1Q09 dropped only 9.8% in relation tothe same period of 2007. However, when compared to 1Q06, deliveries grew 30.3%.
At the end of 1Q09, the industry's inventories totaled 4.6 million metric tons, 14.8% lower thanin 1Q08, when they totaled 5.4 million metric tons. In relation to the inventories at the end of
2008 - when they totaled 6.4 million metric tons - there was a drop of 28.1%. We note thatthere was a large offer on the market in 1Q09.
Source: Anda
Source: Anda
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01 - IDENTIFICATION1 - CVM CODE 2 - COMPANY NAME 3 - National Corporate Taxpayers' Registry (CNPJ)02062-1 FERTILIZANTES HERINGER S.A. 22.266.175/0001-88
07.01 – Comments on Company Performance During the Quarter
49
Development of Heringer Sales and Distribution by Crop
In 1Q09, the volume delivered was 672.3 thousand metric tons compared to 756.7 thousandmetric tons in 1Q09, a reduction of 11.2%. Compared to 1Q07, the Company's deliveries grew
15.2% in 1Q09, indicating the return to the sector's historic seasonality.
The Company maintained its sales diversified among the leading crops, such as Soybeans,
Corn, Sugar Cane and Coffee, thereby mitigating some of the volatility associated with crop
prices. The Company's nationwide coverage also helps mitigate problems associated withclimate, pests and diseases, which could affect specific regions.
1Q07 1Q08 1Q09
148,0 131,777,3
149,1 174,2191,4
37,254,2
40,7
123,0157,1
162,5
113,8
182,0
174,8
12,3
57,5
25,6
Soybeans
Corn
Coffee
Reforest
Others
Sugarcane
(in
tho
usan
do
fto
nn
es)
+29.7% -11.2%
Σ 583,4
Σ 672,3
Σ 756,7
Market+18.3%
Market-23.7%
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01 - IDENTIFICATION1 - CVM CODE 2 - COMPANY NAME 3 - National Corporate Taxpayers' Registry (CNPJ)02062-1 FERTILIZANTES HERINGER S.A. 22.266.175/0001-88
07.01 – Comments on Company Performance During the Quarter
50
Growth in Customer Base and Market Share
The Company's customer base grew 10.6% in 1Q09 in relation to the same period of 2008.The number of customers totaled 14,956 compared to 13,524 in 1Q08, and all regions
contributed to this growth.
This growth was also driven by the expansion of the operations of the Company into new
areas, particularly in regions where it has recently launched new operations, besides its focus
on sales to the end consumer through its extensive network of sales representatives.
The fortification of the customer base is an important element in maintaining the sustainable
growth of the Company in the years ahead and in continuing its focus on direct sales to theend consumer. Market share grew from 13.9% in 1Q08 to 16.2% in 1Q09.
Number of Clients
2006 2007 2008
Midwest2,132
Midwest3,198
Midwest3,661
North/Northeast1,099
North/Northeast1,547
North/Northeast
2,233
Southeast
23,234
Southeast25,044
Southeast27,856
South1,023
South1,268
South1,556
Σ27,488
Σ35,306
Σ31,05713.0%
13.7%
1Q07 1Q08 1Q09
10,38413,524 14,956
30.2%
10.6%
1Q07
12,7%
1Q0813,9%
1Q09
16,2%
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07.01 – Comments on Company Performance During the Quarter
51
Development of Specialty Products
The sales volume of specialty products in 1Q09 was 147 thousand metric tons, up 5% from140 thousand metric tons in 1Q08. The share of specialty products in total sales increased
from 18% in 1Q08 to 22% in 1Q09.
Specialty Products Products Mix (% of Sales Volume)
22%18%
78%82%
22%21%
78%79%
2007 2008 1Q08 1Q09
2,592 2,503
950 617
672* 685*
440 140
Specialty
Conventional
Σ 3,264Σ 3,188 -2%
+2%
-3%
-11%
+ 5%
-15 %
Σ 757 Σ 672
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FINANCIAL RESULTS
Statement of Income for 1Q09 (R$ Million)
4Q08 % NR 1Q08 % NR 1Q09 % NR ∆ % 09/08
Gross Revenue 935,391 674,189 653,964Net Revenue 914,580 100.0% 660,627 100.0% 640,469 100.0% -3.1%
COGS (991,351) -108.4% (579,669) -87.7% (597,297) -93.3%
Gross Profit (76,771) -8.4% 80,958 12.3% 43,172 6.7% -46.7%
SG&A (58,207) -6.4% (46,475) -7.0% (48,285) -7.5%
EBITDA (124,607) -13.6% 40,523 6.1% 11,450 1.8% -71.7%
Net Financial Income (Expenses) (289,167) -31.6% (4,010) -0.6% 6,563 1.0%
Net Income (Loss) (277,865) -30.4% 23,114 3.5% 4,869 0.8% -78.9%
In 1Q09, the net revenue dropped 3.1% to R$640.5 million from R$660.6 million in 1Q08. Thisrevenue decrease was the result of an average sales price increase of 7.1% over 1Q08, offset
by a 11.2% reduction in sales volume.
In 1Q09, gross profit totaled R$43.1 million, down 46.7% from 1Q08, when it totaled R$ 80.9
million, but up from 4Q08, when it was negative by R$ 76.7 million. Gross margin was 6.7%,higher than the margin in 4Q08, when it was negative 8.4%.
In 1Q09, the Company's inventories were kept at adjusted levels, as opposed to the market,
where inventories were still high, causing an excessive offer in the period and impacting thegross margin and EBITDA.
EBITDA was R$11.5 million, representing a margin of 1.8% - lower than the margin of 6.1% in1Q08 but higher than the negative margin of 13.6% in 4Q08.
Net income for 1Q09 was R$4.9 million. Despite the drop in relation to 1Q08, when net incometotaled R$23.1 million, net income for 1Q09 increased from 4Q08, when the company posted a
net loss of R$277.8 million.
In 1Q09, the Company's performance showed a significant recovery in relation to 4Q08.
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07.01 – Comments on Company Performance During the Quarter
53
Working capital
Heringer's working capital reflects the seasonality of our business, which is why thecomparison between equivalent quarters is more appropriate for understanding the workingcapital. The Company seeks to maintain a strict customer credit policy in order to keep days ofaccounts receivable at low levels, thereby reducing the risks of default. As a result, the days ofaccounts receivable in 1Q09 stood at 49, well aligned with 1Q08 when they were 44.
The days of inventory in 1Q09 stood at 55, well aligned with 1Q08 when they were 60.
The days of accounts payable days stood at 214, higher than the 104 days in 1Q08 and the135 days in 4Q08. This increase was due to the new imports to cover the Company's needs in1Q09 with average terms of 180 days, in addition to new import financing operations, the termsof which were between 180 and 240 days.
Purchases from local suppliers increased in the period, and the average terms rangedbetween 90 and 150 days.
Heringer believes it is well positioned to maintain its financing for the purchase of rawmaterials.
Working Capital Days
-12 -2 -18 -26 -22 2 1 10 0 -3 -21 -59 -110
77
90
5235
54
5239
3444
34 35 34
4939
92
63
19
51
76
60 59 60
110 106
4355
128
184
133
80
127 126
98
83
104
147
162
135
214
1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09
Accounts Receivable Days Inventories Days Accounts Payable Days
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01 - IDENTIFICATION1 - CVM CODE 2 - COMPANY NAME 3 - National Corporate Taxpayers' Registry (CNPJ)02062-1 FERTILIZANTES HERINGER S.A. 22.266.175/0001-88
07.01 – Comments on Company Performance During the Quarter
54
Cash Flow (R$ Million)
1Q08 1Q09
Net Income 23,114 4,869
Non cash flow impact expenses (revenues) 26,389 (203,650)
Assets reduction (increase) 28,195 115,221
Liabilities increase (reduction) 25,637 88,789
Operational Activities cash flow 103,335 5,229
Investing Activities cash flow (41,116) (2,133)
Financing Activities cash flow (1,544) 11,243
Net Increase (decrease) in Cash 60,675 14,339
Cash StatementsInitial Cash 118,445 250,810Ending Cash 179,120 265,149
Net Increase (decrease) in Cash 60,675 14,339
The cash generation in 1Q09 was R$14.3 million. The opening cash balance at December 31,2008 was R$250.8 million and at March 31, 2009, R$ 265.1 million.
We list below the main items that reconcile this cash generation:
Reversal of expenses (income) not affecting cash in the amount of R$203.6 million,
basically arising from unrealized interest and exchange variation on commitments
denominated in US dollars, and reversal of the provision for inventory to realizablevalues.
Net reduction of current asset accounts by R$115.2 million, mainly in inventoriesand taxes and charges recoverable.
Net increase of current liability accounts by R$88.8 million, mainly due to the
increase in accounts payable and Finimp import financing arising from new
purchases in both local and international markets in the amount of R$270.5 million,
which was offset by the payment of R$181.7 million in the same period. The
Company continued its strategy to use the FINIMP import credit mechanism when
the interest rates on this financing proved to be more attractive than the interest
rates built into the prices from international suppliers. The short-term "Loans and
(A free translation of the original in Portuguese)FEDERAL GOVERNMENT SERVICEBRAZILIAN SECURITIES COMMISSION (CVM)QUARTERLY INFORMATION (ITR)COMMERCIAL, INDUSTRIAL AND OTHER COMPANIES
Unaudited
Corporate LegislationMarch 31, 2009
01 - IDENTIFICATION1 - CVM CODE 2 - COMPANY NAME 3 - National Corporate Taxpayers' Registry (CNPJ)02062-1 FERTILIZANTES HERINGER S.A. 22.266.175/0001-88
07.01 – Comments on Company Performance During the Quarter
55
Financing" account in the balance sheet consists of FINIMP loans to purchase raw
materials.
Acquisition of property plant and equipment in the amount of R$6.5 million.
Financing activities' net flow in the amount of R$11.2 million.
(A free translation of the original in Portuguese)FEDERAL GOVERNMENT SERVICEBRAZILIAN SECURITIES COMMISSION (CVM)QUARTERLY INFORMATION (ITR)COMMERCIAL, INDUSTRIAL AND OTHER COMPANIES
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Corporate LegislationMarch 31, 2009
01 - IDENTIFICATION1 - CVM CODE 2 - COMPANY NAME 3 - National Corporate Taxpayers' Registry (CNPJ)02062-1 FERTILIZANTES HERINGER S.A. 22.266.175/0001-88
07.01 – Comments on Company Performance During the Quarter
56
RESULTS - SUBSIDIARY
Lógica Transportes S.A., a wholly owned subsidiary of Fertilizantes Heringer S.A., started itstransportation services operations in January 2009 and its results for the quarter were as
follows:
In thousandsof Reais
Gross Services Revenue 1,198
Taxes and Other Deductions from Gross Revenue (167)
Net Services Revenue 1,031
Cost of Services (1,025)
Gross Profit 7
Operational Income (Expenses) (49)
Selling (2)
General and Administrative (55)
Other operating income (expenses), net 10
Financial expenses, net (2)
Operating loss (42)
Deferred income tax and social contribution 14
Loss for the period (28)
(A free translation of the original in Portuguese)FEDERAL GOVERNMENT SERVICEBRAZILIAN SECURITIES COMMISSION (CVM)QUARTERLY INFORMATION (ITR)COMMERCIAL, INDUSTRIAL AND OTHER COMPANIES
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Corporate LegislationMarch 31, 2009
01 - IDENTIFICATION1 - CVM CODE 2 - COMPANY NAME 3 - National Corporate Taxpayers' Registry (CNPJ)02062-1 FERTILIZANTES HERINGER S.A. 22.266.175/0001-88
07.01 – Comments on Company Performance During the Quarter
57
Capital Composition of Heringer
Heringer is among the 100 most liquid companies on the Bovespa, and is listed on thefollowing indexes: IBX100, IBRX, INDX, IGC, SMLL and ITAG. At March 31, 2009, it had morethan 4,149 shareholders; 4,091 Brazilian and 58 foreign.
The participation of foreigners in the free-float position decreased from 78% in April 2008 to43% in March 2009. The number of Brazilian investors increased from 22% in April 2008 to57% in March 2009.
The controlling group increased its participation from 57.8% to 62.0% in 1Q09.
OwnershipBreakdown and Free-Float Foreign and Brazilian
ControllingGroup62%
Free-Float
38%
105 109 114 107 103 90 85 58
2,3481,942 2,037 2,153
2,222 2,448
3,495
4,091
-300
200
700
1.200
1.700
2.200
2.700
3.200
3.700
4.200
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
apr/08 may/08 jun/08 jul/08 aug/08 sep/08 dec/08 apr/09
% Foreign % Brazilian
Nº Foreign Nº Brazilian
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Corporate LegislationMarch 31, 2009
01 - IDENTIFICATION1 - CVM CODE 2 - COMPANY NAME 3 - National Corporate Taxpayers' Registry (CNPJ)02062-1 FERTILIZANTES HERINGER S.A. 22.266.175/0001-88
07.01 – Comments on Company Performance During the Quarter
58
Prospects for 2009
The falling prices of fertilizer raw materials in the international market favors agribusiness in2009, since it generates a better fertilizer/agricultural product exchange ratio. It also
encourages the market as a whole to increase the use of technology to generate greater
productivity per hectare and, as a consequence, higher revenues.
Higher agricultural income resulting from lower production costs, including the cost of
fertilizers, together with the current exchange rate level, also benefits Brazilian agribusiness.
The fundamentals of demand for agricultural commodities continue to be present, even in this
global financial crisis. Global stockpiles of grains are currently at low levels, since consumptionis adjusted to production. The per capita income in emerging countries has grown strongly in
recent years, which together with an increase in the world population, has generated an inertialdemand for food.
The normal historical seasonality of the Brazilian fertilizer market is expected to return in 2009,that is, around 30% of sales in the 1st half of the year and 70% in the 2nd half.
The Company is working with the expectation that the Brazilian fertilizer market will expandslightly compared to 2008, with total deliveries of around 23 million metric tons.
In a longer-term scenario, the fundamentals exist for the price of key agricultural commodities
to increase beyond the current levels, since demand is driven primarily by population growthand higher incomes in emerging nations, which have increased demand for food in general
(grains, meat etc.).
A growth of 1.7% in the Brazilian planted area and 9.7% in the production of grains in Brazil for
the 2009/2010 crop are estimated.
(A free translation of the original in Portuguese)FEDERAL GOVERNMENT SERVICEBRAZILIAN SECURITIES COMMISSION (CVM)QUARTERLY INFORMATION (ITR)COMMERCIAL, INDUSTRIAL AND OTHER COMPANIES
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Corporate LegislationMarch 31, 2009
01 - IDENTIFICATION1 - CVM CODE 2 - COMPANY NAME 3 - National Corporate Taxpayers' Registry (CNPJ)02062-1 FERTILIZANTES HERINGER S.A. 22.266.175/0001-88
07.01 – Comments on Company Performance During the Quarter
59
The following graphs illustrate the current market situation and future trends:
0
200
400
600
800
1000
1200
1400
MAP/DAP-CFR TSP-FOB MOP GR - CFRUrea in Bulk - FOB Ammonium Nitrate - FOB Ammonium Sulphate - CFR
Source: The Market Magazine
20
25
30
35
40
45
50
55
60
Jan
/06
Ma
r/0
6
Ma
y/0
6
Jul/
06
Se
p/0
6
No
v/0
6
Jan
/07
Ma
r/0
7
Ma
y/0
7
Jul/
07
Se
p/0
7
No
v/0
7
Jan
/08
Ma
r/0
8
Ma
y/0
8
Jul/
08
Se
p/0
8
No
v/0
8
Jan
/09
Ma
r/0
9
Ma
y/0
9
Jul/
09
Se
p/0
9
No
v/0
9
Soybean R$/bag (60Kg / PR) PROJECTION
50.58
30.07
44.60
24.92
31.92
44.30
Source: Agroconsult
Barter Ratio x Metric Ton of Fertilizer
Price of Grain Bag
10
15
20
25
30
35
CornR$/bag (60Kg/ SP) PROJECTION
14.47
25.01
31.02
22.23
27.81
20.74
23.00
24.7723.27
18.99
26.54
36.67
47.20
27.43
15
20
25
30
35
40
45
50 SoybeanPR (bag/60kg)
64.1 62.456.2
38.3
101.5
52.3
15
25
35
45
55
65
75
85
95
105
115 CornPR (bag/60kg)
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Unaudited
Corporate LegislationMarch 31, 2009
01 - IDENTIFICATION1 - CVM CODE 2 - COMPANY NAME 3 - National Corporate Taxpayers' Registry (CNPJ)02062-1 FERTILIZANTES HERINGER S.A. 22.266.175/0001-88
07.01 – Comments on Company Performance During the Quarter
60
* Source: CONAB ; IBGE ; IEA-SP; SEAB-PR; EMATER-RS; Agroconsult / Agroconsult Projection
143,884
136,566
149,812
47,526
47,702
48,515
47000
47500
48000
48500
49000
49500
100.000
110.000
120.000
130.000
140.000
150.000
160.000
Grain Production Planted Area
2007/2008 2008/2009* 2009/2010*
(in
tho
usa
nd
of
ton
nes)
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Corporate LegislationMarch 31, 2009
01 - IDENTIFICATION1 - CVM CODE 2 - COMPANY NAME 3 - National Corporate Taxpayers' Registry (CNPJ)02062-1 FERTILIZANTES HERINGER S.A. 22.266.175/0001-88
07.01 – Comments on Company Performance During the Quarter
61
Brazilian Fertilizer Market
Source: Anda/ 2009E – Company’s Estimate
20,982
24,609
22,42923,000
15.000
17.000
19.000
21.000
23.000
25.000
27.000
2006 2007 2008 2009E
+2.5%
(in
tho
usa
nd
of
ton
ne
s)
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Corporate LegislationMarch 31, 2009
01 - IDENTIFICATION1 - CVM CODE 2 - COMPANY NAME 3 - National Corporate Taxpayers' Registry (CNPJ)02062-1 FERTILIZANTES HERINGER S.A. 22.266.175/0001-88
12.01 - Comments on Consolidated Performance During the Quarter
62
The comments on consolidated performance were presented together with the comments on
the Company's performance in item 7 of this Quarterly Information.
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Corporate LegislationMarch 31, 2009
01.01 - IDENTIFICATION
1 - CVM CODE 2 - COMPANY NAME 3 - National Corporate Taxpayers' Registry (CNPJ)
02062-1 FERTILIZANTES HERINGER S.A. 22.266.175/0001-88
13.01 - Investments in Subsidiary and/or Associated Companies
1 - ITEM 2 - SUBSIDIARY/ASSOCIATED COMPANY'S REGISTEREDNAME
3 - FEDERAL CORPORATETAXPAYERS' REGISTRY(CNPJ)
4 - CLASSIFICATION 5 - % PARTICIPATION INTHE CAPITAL OF THEINVESTEE
6 - % OF NETEQUITY OF THEINVESTOR
7 - TYPE OF COMPANY 8 - NUMBER OF SHARES IN THE CURRENT QUARTER 9 - NUMBER OF SHARES IN THE PRIORQUARTER
(Thousand) (Thousand)
63
01 LÓGICA TRANSPORTES S.A. 09.526.131/0001-81 CLOSED-CAPITAL SUBSIDIARY 100.00 0.15COMMERCIAL, INDUSTRIAL AND OTHER COMPANIES 40 40
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01 - IDENTIFICATION1 - CVM CODE 2 - COMPANY NAME 3 - National Corporate Taxpayers' Registry (CNPJ)
02062-1 FERTILIZANTES HERINGER S.A. 22.266.175/0001-88
20.01 - Other Information Considered Relevant by the Company
64
1 Reconciliation of EBITDA and net income - In thousands of reais
Three-month periodended March 31
2009 2008
Net income for the period 4,869 23,114Total income tax and social contribution charges 3,582 10,059Financial expenses (income), net (6,562) 4,010
Depreciation and amortization 9,562 3,340
EBITDA 11,451 40,523
2 Shareholding position of shareholders with more than 5% of common shares on March31, 2009.
Item Name
Individual Taxpayers'Registry (CPF) /
Legal EntityTaxpayers' Registry
(CNPJ)
Commonshares
(thousand) %
1 DALTON DIAS HERINGER 071.645.997-34 24,985 51,542 DALTON CARLOS HERINGER 998.158.007-44 2,534 5,223 JULIANA HERINGER REZENDE 002.715.207-36 2,534 5,224 Others 18,418 38,02
48,471 100,00
(A free translation of the original in Portuguese)FEDERAL GOVERNMENT SERVICEBRAZILIAN SECURITIES COMMISSION (CVM)QUARTERLY INFORMATION (ITR)COMMERCIAL, INDUSTRIAL AND OTHER COMPANIES
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01 - IDENTIFICATION1 - CVM CODE 2 - COMPANY NAME 3 - National Corporate Taxpayers' Registry (CNPJ)
02062-1 FERTILIZANTES HERINGER S.A. 22.266.175/0001-88
20.01 - Other Information Considered Relevant by the Company
65
3 Consolidated shareholding position of controlling shareholders and managers andoutstanding shares.
a) Position at March 31, 2009
ShareholderCommon shares
(in units) %
Controlling shareholder (1) 30,052,272 62.00
Management (2)
Supervisory Board 3 0.00Statutory Board of Directors 8 0.03Audit Committee 0 0.00
Treasury shares 0 0.00Other shareholders 18,419,124 38.00
Total 48,471,407 100.00
Outstanding shares 18,419,124 38.00
(1) Considers total shares of the controlling shareholder, as well as of related parties.(2) Supervisory Board, Statutory Board and Audit Committee members, except for those who are part of theControlling Group.
b) Position at March 31, 2008
ShareholderCommon shares
(in units) %
Controlling shareholder (1) 28,002,630 57.37
Management (2)
Supervisory Board 3 0.00Statutory Board of Directors 1,508 0.00Audit Committee 0 0.00
Treasury shares 122,000 0.25Other shareholders 20,683,866 42.38
Total 48,810,007 100.00
Outstanding shares 20,683,866 42.38
(1) Considers total shares of the controlling shareholder, as well as of related parties.(2) Supervisory Board, Statutory Board and Audit Committee members, except for those who are part ofthe Controlling Group.
(A free translation of the original in Portuguese)FEDERAL GOVERNMENT SERVICEBRAZILIAN SECURITIES COMMISSION (CVM)QUARTERLY INFORMATION (ITR)COMMERCIAL, INDUSTRIAL AND OTHER COMPANIES
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01 - IDENTIFICATION1 - CVM CODE 2 - COMPANY NAME 3 - National Corporate Taxpayers' Registry (CNPJ)
02062-1 FERTILIZANTES HERINGER S.A. 22.266.175/0001-88
20.01 - Other Information Considered Relevant by the Company
66
4 Arbitration Commitment Clause
The Company is subject to the arbitration of the Market Arbitration Chamber, in conformity with
a Commitment Clause in its By-laws.
(A free translation of the original in Portuguese)FEDERAL GOVERNMENT SERVICEBRAZILIAN SECURITIES COMMISSION (CVM)QUARTERLY INFORMATION (ITR)COMMERCIAL, INDUSTRIAL AND OTHER COMPANIES
Unaudited
Corporate LegislationMarch 31, 2009
01 - IDENTIFICATION1 - CVM CODE 2 - COMPANY NAME 3 - National Corporate Taxpayers' Registry (CNPJ)
02062-1 FERTILIZANTES HERINGER S.A. 22.266.175/0001-88
21.01 - Report on the Special Review - Without exceptions
67
Report of Independent Accountantson the Limited Review
To the Board of Directors and ShareholdersFertilizantes Heringer S.A.Viana - ES
1 We have reviewed the accounting information included in the Quarterly Information (ITR) ofFertilizantes Heringer S.A. for the quarter ended March 31, 2009, comprising the balancesheet, the statements of operations, of cash flows and of changes in shareholders' equity, theperformance report and explanatory notes. This Quarterly Information is the responsibility ofthe Company's management.
2 Our review was carried out in accordance with specific standards established by the Instituteof Independent Auditors of Brazil (IBRACON), in conjunction with the Federal AccountingCouncil (CFC), and mainly comprised: (a) inquiries of and discussions with managementresponsible for the accounting, financial and operating areas of the Company with regard tothe main criteria adopted for the preparation of the Quarterly Information and (b) a review ofthe significant information and of the subsequent events which have, or could have,significant effects on the financial position and operations of the Company.
3 Based on our limited review, we are not aware of any material modifications that should bemade to the Quarterly Information referred to above in order that such information be statedin accordance with the accounting practices adopted in Brazil applicable to the preparation ofQuarterly Information, consistent with the Brazilian Securities Commission (CVM) regulations.
Campinas, April 22, 2009
PricewaterhouseCoopers Wander Rodrigues TelesAuditores Independentes Contador CRC 1DF005919/O-3 "S" ESCRC 2SP000160/O-5 "S" ES
(A free translation of the original in Portuguese)FEDERAL GOVERNMENT SERVICEBRAZILIAN SECURITIES COMMISSION (CVM)QUARTERLY INFORMATION (ITR)COMMERCIAL, INDUSTRIAL AND OTHER COMPANIES
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01 - IDENTIFICATION1 - CVM CODE 2 - COMPANY NAME 3 - National Corporate Taxpayers' Registry (CNPJ)
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68
TABLE OF CONTENTS
GROUP TABLE DESCRIPTION PAGE01 01 IDENTIFICATION 0101 02 HEAD OFFICE 0101 03 INVESTOR RELATIONS OFFICER (Company Mail Address) 0101 04 GENERAL INFORMATION/INDEPENDENT ACCOUNTANT 0101 05 CAPITAL COMPOSITION 0201 06 CHARACTERISTICS OF THE COMPANY 0201 07 COMPANIES EXCLUDED FROM THE CONSOLIDATED FINANCIAL STATEMENTS 0201 08 DIVIDENDS APPROVED AND/OR PAID DURING AND AFTER THE QUARTER 0201 09 SUBSCRIBED CAPITAL AND ALTERATIONS IN THE CURRENT YEAR 0301 10 INVESTOR RELATIONS OFFICER 0302 01 BALANCE SHEETS - ASSETS 0402 02 BALANCE SHEETS - LIABILITIES AND SHAREHOLDERS' EQUITY 0503 01 STATEMENTS OF INCOME 0604 01 STATEMENTS OF CASH FLOWS - INDIRECT METHOD 0705 01 STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY 0905 02 STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY 1008 01 CONSOLIDATED BALANCE SHEET - ASSETS 1108 02 CONSOLIDATED BALANCE SHEET - LIABILITIES AND SHAREHOLDERS' EQUITY 1209 01 CONSOLIDATED STATEMENTS OF INCOME 1310 01 CONSOLIDATED STATEMENT OF CASH FLOWS - INDIRECT METHOD 1411 01 CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY 1611 02 CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY 1706 01 NOTES TO THE QUARTERLY INFORMATION 1807 01 COMMENTS ON COMPANY PERFORMANCE DURING THE QUARTER 4712 01 COMMENTS ON CONSOLIDATED PERFORMANCE DURING THE QUARTER 6213 01 INVESTMENTS IN SUBSIDIARY AND/OR ASSOCIATED COMPANIES 6320 01 OTHER INFORMATION CONSIDERED RELEVANT BY THE COMPANY 6421 01 REPORT ON THE SPECIAL REVIEW - WITHOUT EXCEPTIONS 67
LÓGICA TRANSPORTES S.A.