Commenting, Mr. Lakshmi N. Mittal, Chairman and CEO, ArcelorMittal, said:

"The economic recovery is continuing in-line with our expectations and 2010 is set to be a stronger year for ArcelorMittal. The year has started with improved demand in all main markets, which will have a positive impact in the second quarter."

First quarter 2010 news conference (for media)

ArcelorMittal management will host a news conference:

First quarter 2010 earnings analyst conference call

Additionally, ArcelorMittal management will host a conference call for members of the investment community to discuss the first quarter 2010 financial performance at:

Forward-Looking Statements

This document may contain forward-looking information and statements about ArcelorMittal and its subsidiaries. These statements include financial projections and estimates and their underlying assumptions, statements regarding plans, objectives and expectations with respect to future operations, products and services, and statements regarding future performance. Forward-looking statements may be identified by the words "believe," "expect," "anticipate," "target" or similar expressions. Although ArcelorMittal's management believes that the expectations reflected in such forward-looking statements are reasonable, investors and holders of ArcelorMittal's securities are cautioned that forward-looking information and statements are subject to numerous risks and uncertainties, many of which are difficult to predict and generally beyond the control of ArcelorMittal, that could cause actual results and developments to differ materially and adversely from those expressed in, or implied or projected by, the forward-looking information and statements. These risks and uncertainties include those discussed or identified in the filings with the Luxembourg Stock Market Authority for the Financial Markets (Commission de Surveillance du Secteur Financier) and the United States Securities and Exchange Commission (the "SEC") made or to be made by ArcelorMittal, including ArcelorMittal's Annual Report on Form 20-F for the year ended December 31, 2009 filed with the SEC. ArcelorMittal undertakes no obligation to publicly update its forward-looking statements, whether as a result of new information, future events, or otherwise.

ArcelorMittal first quarter 2010 results

ArcelorMittal, the world's leading steel company, today announced results for the three months ended March 31, 2010.

Corporate responsibility performance and initiatives

Health and safety – Own personnel and contractors lost time injury frequency rate[2]

Total health and safety performance in steel and mining operations, based on own personnel figures and contractors lost time injury frequency rate, remained flat at 1.9 for the first quarter of 2010 as compared to the fourth quarter of 2009. Improvements in the health and safety performance of the Flat Carbon Americas, Asia Africa and CIS and Stainless Steel divisions and Mining operations, were offset by deterioration in the Flat Carbon Europe, Long Carbon Americas and Europe and Distribution Solutions divisions (formerly known as Steel Solutions and Services).

Analysis of results for the three months ended March 31, 2010 versus the three months ended December 31, 2009 and the three months ended March 31, 2009

ArcelorMittal recorded net income for the three months ended March 31, 2010 of $0.7 billion, or $0.45 per share, as compared with net income of $1.1 billion, or $0.71 per share, for the three months ended December 31, 2009, and net loss of $1.1 billion, or $(0.78) per share, for the three months ended March 31, 2009.

Sales for the three months ended March 31, 2010 were $18.7 billion as compared with $18.6 billion for the three months ended December 31, 2009, and up 23% as compared with $15.1 billion for the three months ended March 31, 2009. Sales were marginally higher during the first quarter of 2010 as compared to the fourth quarter of 2009, due to higher volumes (+8%), but offset by lower average steel selling prices (-3%).

Operating income remained flat at $0.7 billion for the three months ended March 31, 2010, as compared with operating income of $0.7 billion for the three months ended December 31, 2009 and an operating loss for the three months ended March 31, 2009 of $1.5 billion.

Total steel shipments for the three months ended March 31, 2010 were 21.5 million metric tonnes as compared with 20.0 million metric tonnes for the three months ended December 31, 2009 and 16.0 million metric tonnes for the three months ended March 31, 2009. The increase resulted from improved demand across all segments in the first quarter of 2010 as compared to the fourth quarter of 2009.

Depreciation expense for the three months ended March 31, 2010 was $1.2 billion as compared with depreciation expense of $1.3 billion for the three months ended December 31, 2009 and $1.1 billion for the three months ended March 31, 2009. The decrease in the first quarter of 2010 as compared to the fourth quarter of 2009 was primarily on account of exchange rate impact.

Impairment cost for the three months ended March 31, 2010 was nil as compared to $502 million[5] for the three months ended December 31, 2009.

The operating performance for the three months ended December 31, 2009 had been positively impacted by an exceptional gain of $380 million relating to a reversal of litigation provisions previously booked in the fourth quarter of 2008 and a net gain of $108 million recorded on the sale of carbon dioxide credits that ArcelorMittal purchased since 2007[6]. Operating performance for the three months ended March 31, 2009 had been negatively impacted by exceptional charges amounting to $1.2 billion, primarily related to write-downs of inventory.

Income from equity method investments and other income for the three months ended March 31, 2010 resulted in a gain of $94 million, as compared to a gain of $101 million and losses of $153 million for the three months ended December 31, 2009 and March 31, 2009, respectively.

Net interest expense (including interest expense and interest income) decreased to $355 million for the three months ended March 31, 2010 from $415 million for the three months ended December 31, 2009, primarily due to exchange rate effects, but was higher compared to net interest expense of $304 million for the three months ended March 31, 2009 on account of higher interest rates on refinancing bond issuances conducted in 2009. During the three months ended March 31, 2010, the Company also recorded a gain of $141 million (compared to a $430 million loss in the fourth quarter of 2009) as a result of mark-to-market adjustments on the conversion options relating to its convertible bonds issued in 2009. Foreign exchange and other net financing costs[7] for the three months ended March 31, 2010 amounted to $188 million, as compared to $84 million and $265 million for the three months ended December 31, 2009 and March 31, 2009, respectively. Losses related to the fair value of other derivative instruments for the three months ended March 31, 2010 amounted to $8 million, as compared with gains of $2 million for the three months ended December 31, 2009 and losses of $16 million for the three months ended March 31, 2009, respectively.

ArcelorMittal recorded an income tax benefit of $0.3 billion for the three months ended March 31, 2010, as compared to an income tax benefit of $1.3 billion for the three months ended December 31, 2009. The income tax benefit for the three months ended March 31, 2009 was $1.1 billion.

Profits attributable to non-controlling interests for the three months ended March 31, 2010 were $40 million as compared with $74 million for the three months ended December 31, 2009. Losses attributable to non-controlling interests for the three months ended March 31, 2009 were $70 million.

Capital expenditure projects

The following tables summarize the Company's principal growth and optimization projects involving significant capital expenditures completed in the prior calendar year and in the current year to-date, as well as those that are ongoing.

Analysis of segment operations for the three months ended March 31, 2010 as compared to the three months ended December 31, 2009

Flat Carbon Americas crude steel production reached 5.7 million tonnes for the three months ended March 31, 2010, an increase of 5% as compared to 5.4 million tonnes for the three months ended December 31, 2009.

Sales in the Flat Carbon Americas segment were $4.4 billion for the three months ended March 31, 2010, an increase of 9% as compared to $4.1 billion for the three months ended December 31, 2009. Sales improved primarily due to higher steel shipments (+9%) as steel selling prices remained flat. EBITDA improved by 10% while EBITDA/tonne remained flat at $109/tonne. EBITDA improvement in the quarter was driven in part by the improved results of the mining operations.

Flat Carbon Europe crude steel production remained flat at 7.4 million tonnes for the three months ended March 31, 2010, as compared to the three months ended December 31, 2009.

Sales in the Flat Carbon Europe segment were also flat at $5.9 billion for the three months ended March 31, 2010 as compared to the three months ended December 31, 2009. Higher steel shipments (+7%) were more than offset by lower average steel selling prices (-6%). EBITDA decreased by $28/tonne (-28%) to $74/tonne in the first quarter of 2010.

EBITDA and operating results in the first quarter of 2010 included an $89 million non-cash gain relating to hedges on raw material purchases. EBITDA and operating results in the fourth quarter of 2009 included a net gain of $108 million recorded on the sale of carbon dioxide credits and a $90 million non-cash gain relating to hedges on raw material purchases.

Long Carbon Americas and Europe crude steel production reached 5.7 million tonnes for the three months ended March 31, 2010, an increase of 7% as compared to 5.4 million tonnes for the three months ended December 31, 2009.

Sales in the Long Carbon Americas and Europe segment were $4.8 billion for the three months ended March 31, 2010, an increase of 4% as compared to $4.6 billion for the three months ended December 31, 2009. Sales improved primarily due to higher steel shipments (+9%) which were only partially offset by lower average steel selling prices (-4%).

Operating performance was essentially flat during the first quarter of 2010 compared with the fourth quarter of 2009[8]. During the first quarter of 2010, EBITDA declined by $7/tonne (-8%) to $85/tonne as compared to $92/tonne in the fourth quarter of 2009 primarily due to an increase in costs.

AACIS segment crude steel production was 3.7 million tonnes for the three months ended March 31, 2010, a decrease of 6% as compared to 3.9 million tonnes for the three months ended December 31, 2009. Extreme weather conditions in CIS countries and operational issues particularly in the Kazakhstan operations mainly accounted for the decline.

Sales in the AACIS segment were $2.1 billion for the three months ended March 31, 2010, a decrease of 6% as compared to $2.3 billion for the three months ended December 31, 2009.

Despite improvement in selling price (+1%) and steel shipment volumes (+4%), operating performance deteriorated during the first quarter of 2010 due to higher input costs as EBITDA declined by $15/tonne (-15%) to $86/tonne.

Stainless Steel segment crude steel production reached 546 thousand tonnes for the three months ended March 31, 2010, an increase of 21% as compared to 452 thousand tonnes for the three months ended December 31, 2009.

Sales in the Stainless Steel segment remained flat at $1.3 billion for the three months ended March 31, 2010, as compared to the three months ended December 31, 2009. Higher steel shipments (+5%) were partially offset by lower average steel selling prices (-3%).

Operating performance improved during the first quarter of 2010 as compared to the fourth quarter of 2009, with EBITDA improving by $69/tonne (+26%) to $342/tonne. The higher profitability resulted mainly from improved market conditions driven by higher nickel prices.

Sales in the Distribution Solutions segment remained flat at $3.5 billion for the three months ended March 31, 2010 as compared to the three months ended December 31, 2009. Higher steel shipment volumes (+4%) were partially offset by lower average selling prices (-3%).

Operating performance in the fourth quarter of 2009 had been positively impacted by an exceptional gain of $380 million relating to reversal of litigation provisions previously booked in the fourth quarter of 2008, which was offset in part by impairment costs of $128 million.

Liquidity and Capital Resources

For the three months ended March 31, 2010, net cash used in operating activities was $0.7 billion, compared to net cash provided by operations of $2.8 billion for the three months ended December 31, 2009. The cash outflow for operating activities for the first quarter of 2010 included $1.7 billion of operating working capital changes as rotation days[10] increased from 63 days in the fourth quarter of 2009 to 67 days in first quarter of 2010 on account of rising activity levels. Cash used in other operating activities for the three months ended March 31, 2010 amounted to $347 million, consisting primarily of TSR payments, reversal of $141 million non-cash gain from the marking to market of the convertible bonds and $89 million relating to hedges on raw material purchases, offset by unpaid liabilities (e.g. taxes, salaries and interest payments).

Net cash used in investing activities for the three months ended March 31, 2010 was $0.7 billion, compared to $0.9 billion for the three months ended December 31, 2009. Capital expenditures decreased to $0.5 billion for the three months ended March 31, 2010 as compared to $0.8 billion for the three months ended December 31, 2009. The Company continues to expect capital expenditures of approximately $4.0 billion in 2010.

During the first quarter of 2010, the Company paid dividends amounting to $282 million.

At March 31, 2010, the Company's cash and cash equivalents (including restricted cash and short-term investments) amounted to $3.8 billion as compared to $6.0 billion at December 31, 2009. Net debt at March 31, 2010 was $20.7 billion as compared with $18.8 billion at December 31, 2009. The increase in net debt in the first quarter of 2010 was primarily due to increased investment in working capital and the acquisition of non-controlling interests in ArcelorMittal Ostrava. Operating working capital (defined as inventory plus receivables less payables) at March 31, 2010 was $12.9 billion as compared to $11.9 billion at December 31, 2009, due to higher trade accounts receivables, inventories partly offset by higher trade accounts payables.

The Company had liquidity of $14.5[11] billion at March 31, 2010, compared with liquidity of $17.2 billion at December 31, 2009, consisting of cash and cash equivalents (including restricted cash and short-term investments) of $3.8 billion and $10.7 billion of available credit lines.

Update on management gains, fixed cost reduction program and capacity utilization

At the end of the first quarter of 2010, the Company had achieved annualized sustainable savings of $2.9 billion as compared to $2.7 billion as of December 31, 2009, essentially meeting its 2010 full-year target to achieve management gains of $3.0 billion of sustainable SG&A and fixed cost reductions. The Company has also achieved $5.0 billion ($3.8 billion at a constant dollar[12]) of annualized temporary fixed cost savings in the first quarter of 2010 resulting from industrial optimization in response to lower demand.

Capacity utilization increased to approximately 72% in the first quarter of 2010, as compared to approximately 70% in the fourth quarter of 2009, and is expected to increase gradually to approximately 80% in the second quarter of 2010.

For further information about some of these recent developments, please refer to our website www.arcelormittal.com

Second quarter of 2010 outlook

Second quarter 2010 EBITDA is expected to be approximately $2.8 – $3.2 billion. Shipments, average selling prices and operating costs are all expected to be higher as compared to the first quarter of 2010. The Company also expects net debt to increase in the second quarter 2010.

Appendix 6 – Details of footnotes

[1] The financial information in this press release and Appendix 1 has been prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB"). While the interim financial information included in this announcement has been prepared in accordance with IFRS applicable to interim periods, this announcement does not contain sufficient information to constitute an interim financial report as defined in International Accounting Standards 34, "Interim Financial Reporting". Unless otherwise noted the numbers in the press release have not been audited. The financial information and certain other information presented in a number of tables in this press release have been rounded to the nearest whole number or the nearest decimal. Therefore, the sum of the numbers in a column may not conform exactly to the total figure given for that column. In addition, certain percentages presented in the tables in this press release reflect calculations based upon the underlying information prior to rounding and, accordingly, may not conform exactly to the percentages that would be derived if the relevant calculations were based upon the rounded numbers.
[2] Lost time injury frequency rate equals lost time injuries per 1,000,000 worked hours, based on own personnel and contractors.
[3] EBITDA is defined as operating income plus depreciation, impairment expenses and exceptional items.
[4] Net debt refers to long-term debt, plus short-term debt, less cash and cash equivalents, restricted cash and short-term investments.
[5] Impairment charges for the three months ended December 31, 2009 of $502 million consisted of $169 million on various idled assets (primarily $65 million at Las Truchas, Mexico), $122 million on various tubular product operations (primarily $65 million in Roman, Romania), and $172 million on other impairment assets (primarily $117 million at ArcelorMittal Construction France).
[6] From 2007 to end of 2009 ArcelorMittal had purchased credits for 19.2 million tonnes and sold credits for 18.6 million tonnes (including 6 million sold during the fourth quarter of 2009).
[7] Foreign exchange and other net financing costs include foreign currency swaps, bank fees, interest on pensions and impairments of financial instruments.
[8] During the fourth quarter of 2009, the Company recorded impairment charges of $281 million on its tubular business and certain idled assets (including $65 million in Roman, Romania and $65 million in Las Truchas, Mexico).
[9] As from January 1, 2010 Steel Solutions and Services segment has been renamed ArcelorMittal Distribution Solutions (AMDS).
[10] Rotation days are defined as days of accounts receivable plus days of inventory minus days of accounts payable. Days of accounts payable and inventory are a function of cost of goods sold. Days of accounts receivable are a function of sales.
[11] Includes back-up lines for commercial paper program of approximately $2.7billion (euro2billion).
[12] At average 2008 exchange rate.
[13] Amounts are derived from Company's audited consolidated financial statements for the year ended December 31, 2009.
[14] In accordance with IFRS the Company has adjusted the 2008 financial information retrospectively for the finalization in 2009 of the allocation of purchase price for certain business combinations carried out in 2008. The adjustments have been reflected in the Company's consolidated financial statements for the year ended December 31, 2009.
[15] For the three months ended December 31, 2009 the Company recorded an exceptional gain of $380 million relating to a reversal of litigation provisions previously booked in the fourth quarter of 2008. During the three months ended March 31, 2009 the Company had recorded exceptional charges amounting to $1.2 billion primarily related to write-downs of inventory.
[16] Total of all finished production of fines, concentrate, pellets and lumps (includes share of production and strategic long-term contracts).
[17]ArcelorMittal Distribution Solutions shipments are eliminated in consolidation as they represent shipments originating from other ArcelorMittal operating subsidiaries.
[18] Changes in operating working capital are defined as trade accounts receivable plus inventories less trade accounts payable.
[19] Refers to the acquisition of 13.88% non-controlling interest in Ostrava, which according to new IAS 27 is presented as financing activities
[20] Segmental capex includes the acquisition of intangible assets (such as concessions for mining and IT support).
[21] Average steel selling prices are calculated as steel sales divided by steel shipments.
[22] Shipments originating from a geographical location.
[23] Includes tubular business
[24] $422.5 million US bond due 2014 redeemed early on April 1, 2010 in line with terms of the indenture.
[25] Commercial paper is expected to continue to be rolled over in the normal course of business.
[26] Euro denominated loans converted at the Euro: $ exchange rate of 1.3479 as at March 31, 2010.
[27] Gearing is defined as (A) long-term debt, plus short-term debt, less cash and cash equivalents, restricted cash and short-term investments, divided by (B) total equity.