Mr. Lakshmi N. Mittal, Chairman and CEO of ArcelorMittal, commented:

“2012 was a very difficult year for the steel industry, particularly in Europe where demand for steel fell a further 8.8%. During the year we took a number of important steps to address the challenges we face, including concentrating our operational footprint on our more competitive assets and reducing net debt.  Although we expect the challenges to continue in 2013, largely due to the fragility of the European economy, we have recently seen some more positive indicators, which combined with the measures we have implemented to strengthen the business, are expected to support an improvement in the profitability of our steel business this year.  Marketable iron ore shipments are also expected to increase by approximately 20% as a result of the expansion at ArcelorMittal Mines Canada.” 

Fourth quarter 2012 earnings analyst conference call

ArcelorMittal management will host a conference call for members of the investment community to discuss the financial performance for the fourth quarter and twelve-months periods ended December 31, 2012 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, 2011 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 fourth quarter 2012 and full year 2012 results

ArcelorMittal, the world’s leading integrated steel and mining company, today announces results for the three month and twelve month periods ended December 31, 2012.

Corporate responsibility and safety performance

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

Health and safety performance, based on own personnel figures and contractors lost time injury frequency rate, improved to 1.0x for the year 2012 (“12M 2012”) from 1.4x for the year 2011 (“12M 2011). In 2012, a majority of the segments contributed to the significant overall improvement, with major improvements in the Flat Carbon Americas and Distribution Solutions segments.

Lost time injury frequency rate increased to 1.1x in the fourth quarter of 2012 (“4Q 2012”) as compared to 1.0x for the third quarter of 2012 (“3Q 2012”) and decreased as compared to 1.2x for the fourth quarter of 2011 (“4Q 2011”).

Despite this encouraging performance in lost time injury frequency (LTIF) rate, there is still more work to be done. The Company’s effort to improve the group’s Health and Safety record will continue. Whilst the LTIF target of 1.0x is maintained for 2013, the Company is focused on further reducing the rate of severe injuries and fatality prevention.

Analysis of results for the twelve months ended December 31, 2012 versus results for the twelve months ended December 31, 2011

ArcelorMittal’s net loss for 12M 2012 was $3.7 billion, or $(2.41) loss per share, as compared to net income for 12M 2011 of $2.3 billion, or $1.46 earnings per share.

Total steel shipments for 12M 2012 declined to 83.8 million metric tonnes as compared with 85.8 million metric tonnes for 12M 2011.

Sales for 12M 2012 decreased by 10.4% to $84.2 billion as compared with $94 billion for 12M 2011 primarily due to lower average steel selling prices (-8.2%) and marginally lower steel shipments (-2.3%).

Depreciation of $4.7 billion for 12M 2012 was comparable to the level recorded for 12M 2011.

Impairment charges for 12M 2012 of $5.0 billion included the $4.3 billion non-cash write down of goodwill with respect to ArcelorMittal’s European businesses ($2.5 billion Flat Carbon Europe; $1.0 billion Long Carbon Europe and $0.8 billion Distribution Solutions) and $0.7 billion non-cash asset impairments primarily related to: the intention to permanently close the coke plant and six finishing lines in Liege, Belgium ($0.3 billion)[11]; the long term idling of the liquid phase at the Florange site in France ($130 million); the extended idling of the electric arc furnace and continuous caster at the Schifflange site in Luxembourg; and various asset impairments in Spain and North Africa ($0.2 billion). Impairment charges for the 12M 2011 were $331 million, including $151 million related to the extended idling of the Madrid electric arc furnace (Long Carbon Europe) and $141 million related to assets within the Flat Carbon Europe perimeter (including $85 million relating to Liege, Belgium).

The $4.3 billion goodwill impairment is due to the weaker macroeconomic and market environment in Europe where apparent steel demand fell by approximately 9% in 2012, bringing the cumulative demand decline to approximately 29% since 2007.  This weaker demand environment and expectations that it will persist over the near and medium term, led to a downward revision of cash flow expectations underlying the valuation of the European businesses to which goodwill had been allocated.

Restructuring charges for 12M 2012 and 12M 2011 totaled $587 million and $219 million respectively and consisted largely of costs associated with the implementation of Asset Optimization primarily impacting Flat Carbon Europe, Distribution Solutions and Long Carbon Europe operations.  

Operating loss for 12M 2012 was $3.2 billion, compared with operating income of $4.9 billion for 12M 2011. The operating result for 12M 2012 was positively impacted by a net gain of $220 million recorded on the sale of carbon dioxide credits, gains of $339 million and $242 million on the divestments of Skyline Steel[12] and Paul Wurth4 stake respectively, and curtailment gains of $241 million due to changes to the employee benefit plans at ArcelorMittal Dofasco[13], partially offset by $182 million of charges related to a one-time signing bonus and postretirement benefit costs following entry into the new US labor contract and changes to year-end actuarial assumptions.5  The operating result for 12M 2012 was also positively impacted by $567 million of dynamic delta hedge (“DDH”) income[14] (unwinding of hedges from prior years on raw material purchases) recognized during the year. The operating result for 12M 2011 was positively impacted by $600 million of DDH income recognized during the year, a net gain of $93 million recorded on the sale of carbon dioxide credits, and $104 million related to reversal of provisions for litigation. All the proceeds from the sale of carbon dioxide credits will be re-invested in energy savings projects.

Income from equity method investments and other income in 12M 2012 was $194 million as compared to $620 million in 12M 2011. Income from equity method investments and other income was lower in 12M 2012 on account of losses from Chinese investees and the impact of disposals (Erdemir[15], Enovos[16] and Macarthur Coal[17]). 12M 2012 includes a net loss of $85 million resulting from the partial sale of the Company’s stake in Erdemir and the agreed sale of Enovos. Income for 12M 2011 included an impairment loss of $107 million for Macarthur Coal.

Net interest expense (including interest expense and interest income) for 12M 2012 at $1.9 billion was slightly higher than $1.8 billion for 12M 2011, primarily due to increased costs following ratings downgrades and the higher cost of bond financing compared to bank loans.

Foreign exchange and other net financing costs[18] were $0.9 billion for 12M 2012 as compared to costs of $1.0 billion for 12M 2011.

ArcelorMittal recorded an income tax benefit of $1.9 billion for 12M 2012, as compared to an income tax expense of $882 million for 12M 2011. The FY 2012 income tax benefit was primarily driven by deferred tax benefits recognized on impairment-related losses in Luxembourg, partially offset by reversal of deferred tax assets in Europe and South America.

Loss attributable to non-controlling interests for 12M 2012 was $118 million as compared with $4 million for 12M 2011.

Discontinued operations for 12M 2012 was nil as compared to a gain of $461 million for 12M 2011, which included $42 million of the post-tax net results contributed by the stainless steel operations prior to the spin-off on January 25, 2011, and a $419 million one-time non-cash gain from the recognition through the income statement of gains/losses relating to the demerged assets previously held in equity.

Analysis of results for 4Q 2012 versus 3Q 2012 and 4Q 2011

ArcelorMittal recorded a net loss for 4Q 2012 of $4.0 billion, or $(2.58) loss per share, as compared with net loss of $0.7 billion, or $(0.46) loss per share, for 3Q 2012, and a net loss of $1.0 billion, or $(0.65) loss per share, for 4Q 2011.

Total steel shipments for 4Q 2012 were 20.0 million metric tonnes as compared with 19.9 million metric tonnes for 3Q 2012 and 20.6 million metric tonnes for 4Q 2011.

Sales for 4Q 2012 decreased by 2.1% to $19.3 billion as compared with $19.7 billion for 3Q 2012, and were down 14.0% as compared with $22.4 billion for 4Q 2011. Sales were lower during 4Q 2012 as compared to 3Q 2012 primarily due to lower average steel selling prices (-2.8%) offset in part by marginally higher steel shipment volumes (+0.7%).

Depreciation amounted to $1.2 billion for 4Q 2012, and was comparable to 3Q 2012 and 4Q 2011.

Impairment charges for 4Q 2012 of $4.8 billion included the $4.3 billion non-cash write down of goodwill with respect to ArcelorMittal’s European businesses ($2.5 billion Flat Carbon Europe; $1.0 billion Long Carbon Europe and $0.8 billion Distribution Solutions) described above, and $0.5 billion non-cash asset impairments primarily related to: the intention to permanently close the coke plant and six finishing lines in Liege, Belgium ($0.3 billion); and various asset impairments in Spain and North Africa ($0.2 billion). Impairment charges for 3Q 2012 totaled $130 million, primarily related to the long time idling of the liquid phase at the Florange site in France. Impairment charges for 4Q 2011 totaled $228 million, including $151 million related to the extended idling of the Madrid electric arc furnace (Long Carbon Europe) and $56 million relating to assets within the Flat Carbon Europe segment.

Restructuring charges for 4Q 2012 totalled $192 million and consisted of costs associated with the implementation of Asset Optimization primarily impacting various Distribution Solutions entities and to a lesser extent Flat Carbon Europe and Long Carbon Europe entities. Restructuring charges for 3Q 2012 totaled $98 million and consisted primarily of costs associated with the decision to close two blast furnaces, a sinter plant, a steel shop and continuous casters in Liege, Belgium[19]. Restructuring charges for 4Q 2011 totalled $219 million and consisted of costs associated with the implementation of Asset Optimization primarily impacting Flat Carbon Europe, Long Carbon Europe and Distribution Solutions entities.

Operating loss for 4Q 2012 was $4.9 billion, as compared with operating loss of $49 million for 3Q 2012 and operating income of $47 million for 4Q 2011.  The operating result for 4Q 2012 was positively impacted by a net gain of $220 million recorded on the sale of carbon dioxide credits, a gain of $242 million on the divestment of the Paul Wurth stake, partially offset by $110 million of charges related to the recognition of additional actuarial losses accrued on postretirement benefits following changes to year-end actuarial assumptions.  The operating result for 3Q 2012 was negatively impacted by $72 million related to one-time signing bonus and postretirement benefit costs following entry into the new US labor contract.  Operating result for 4Q 2011 was positively impacted by net gain of $93 million related to the sale of carbon dioxide credits. All the proceeds from the sale of carbon dioxide credits will be re-invested in energy savings projects. In addition, operating result for 4Q 2012, 3Q 2012 and 4Q 2011 was positively impacted by $141 million, $131 million and $163 million, respectively, related to DDH income. Operating results also decreased in 4Q 2012 as compared to 3Q 2012 due to a price-cost squeeze, primarily in steel but also in mining.

Income from equity method investments and other income in 4Q 2012 was $142 million, as compared to a loss of $55 million in 3Q 2012 on account of improved performance, primarily from Chinese investees. Income from equity method investments and other income in 4Q 2011 was $177 million.

Net interest expense (including interest expense and interest income) was flat at $478 million for 4Q 2012 as compared to $479 million for 3Q 2012 and higher as compared to $429 million for 4Q 2011.

Foreign exchange and other net financing losses were $366 million for 4Q 2012 as compared to losses of $103 million for 3Q 2012 and gains of $13 million for 4Q 2011.  Foreign exchange and other net financing losses were higher in 4Q 2012 as compared to 3Q 2012 due a foreign exchange loss of $108 million as compared to a gain of $128 million in 3Q 2012. 

ArcelorMittal recorded an income tax benefit of $1.6 billion for 4Q 2012, as compared to an income tax expense of $43 million for 3Q 2012 and an income tax expense of $833 million in 4Q 2011. The 4Q 2012 income tax benefit was primarily driven by deferred tax benefits recognized on impairment-related losses in Luxembourg, partially offset by reversal of deferred taxes in Europe and South America.

Loss attributable to non-controlling interests for 4Q 2012 was $97 million (primarily on account of losses in African entities) as compared with a loss of $20 million for 3Q 2012 and a loss of $25 million for 4Q 2011. 

Capital expenditure projects

The following tables summarize the Company’s principal growth and optimization projects involving significant capital expenditures.

Flat Carbon Americas crude steel production increased by 3.6% to 5.9 million tonnes in 4Q 2012, as compared to 5.7 million tonnes in 3Q 2012, driven primarily by higher production in South America post the reline of blast furnace #1 in Tubarao, Brazil, partially offset by lower production in North America.

Steel shipments in 4Q 2012 were 5.5 million tonnes, 3.4% higher than in 3Q 2012, primarily driven by higher production post Tubarao reline, partially offset by lower shipment volumes in North America as a result of lower demand.

Sales in the Flat Carbon Americas segment were $4.7 billion in 4Q 2012, a decrease of 3.2% as compared to $4.8 billion in 3Q 2012. Sales were impacted by lower steel selling prices in North America (particularly in the plate market) as well as weak slab pricing in Brazil and Mexico. Average steel selling prices were impacted by a weaker mix with lower North American volumes offset by higher sales from South America following the blast furnace reline in Tubarao, Brazil.

EBITDA in 4Q 2012 decreased by 60.6% to $93 million as compared to $236 million in 3Q 2012.  EBITDA in 4Q 2012 was negatively impacted by $110 million of actuarial losses accrued on postretirement benefits following changes to year end actuarial assumptions. EBITDA in 3Q 2012 was negatively impacted by one-time labor costs of $72 million related to a one-time signing bonus and postretirement benefit costs following entry into the new US labor contract.  Lower profitability in 4Q 2012 was due to a price-cost squeeze, primarily driven by North American operations, as lower average steel selling prices were not fully compensated by lower costs.

Flat Carbon Europe crude steel production decreased by 5.1% to 6.4 million tonnes in 4Q 2012 as compared to 6.7 million tonnes in 3Q 2012 as inventory levels were reduced and output was aligned with local market levels.

Steel shipments in 4Q 2012 were 6.0 million tonnes, an increase of 2.1% as compared to 5.8 million tonnes in 3Q 2012. Steel shipments increased in the fourth quarter of 2012 due to a mild pick up following the seasonally weaker summer period.

Sales in the Flat Carbon Europe segment were essentially flat at $6.1 billion in 4Q 2012 as compared to 3Q 2012. Sales benefitted from higher steel shipment volumes offset in part by lower average steel selling prices (-1.1%) in dollars. 

EBITDA in 4Q 2012 was $307 million as compared to $191 million in 3Q 2012.  EBITDA in 4Q 2012 included $141 million of DDH income recognized during the quarter as compared to $131 million DDH income recognized in 3Q 2012. EBITDA in 4Q 2012 also included $210 million net gain recorded on the sale of carbon dioxide credits. The 4Q 2011 EBITDA included a $93 million gain on the sale of carbon dioxide credits and $163 million of DDH income. (The proceeds from the sale of carbon dioxide credits will be re-invested in energy savings projects). Steel margins were negatively impacted by price-cost squeeze following a drop in average steel selling prices not fully compensated by lower costs.

The operating result in 4Q 2012 included a $2.5 billion non-cash write down of goodwill and $0.3 billion non-cash impairment charge related to the intention to permanently close the coke plant and six finishing lines in Liege, Belgium. Operating results in 3Q 2012 included impairment expenses of $130 million relating to the long term idling of the liquid phase at the Florange site in France and restructuring costs totalling $90 million associated primarily with the decision to close two blast furnaces, a sinter plant, a steel shop and continuous casters in Liege, Belgium.

Long Carbon Americas and Europe crude steel production amounted to 5.2 million tonnes in 4Q 2012, a decrease of 8.3% as compared to 5.7 million tonnes in 3Q 2012. Production was lower in both the American and European operations due to lower market demand as well as operational issues that impacted output in Poland.

Steel shipments in 4Q 2012 were 5.5 million tonnes, essentially flat as compared to 5.5 million tonnes in 3Q 2012, as marginally lower volumes in Europe were offset by slightly higher North American volumes, primarily in Mexico.

Sales in the Long Carbon Americas and Europe segment were essentially flat at $5.2 billion in 4Q 2012, as compared to $5.2 billion in 3Q 2012. Sales were impacted by a decrease in average steel selling prices (-0.5%) offset by marginally higher steel shipment volumes.

EBITDA in 4Q 2012 was $402 million, a 21.8% increase as compared to $330 million in 3Q 2012. Higher profitability in 4Q 2012 was primarily driven by improved profitability in Europe, North America and with respect to Tubular business on account of positive price-cost effects.  

Operating results in 4Q 2012 included a non-cash write down of goodwill of $1.0 billion (Long Carbon Europe) and non-cash asset impairments charges for Spanish and North African operations of $0.2 billion.

AACIS segment crude steel production was 3.2 million tonnes in 4Q 2012, a decrease of 12.9% as compared to 3.7 million tonnes in 3Q 2012. The decline in production during 4Q 2012 was primarily due to lower production in South Africa following blast furnace maintenance repair work as well as lower production in Kazakhstan due to operational issues.

Steel shipments in 4Q 2012 amounted to 3.0 million tonnes, a decrease of 6.3% as compared to 3.2 million tonnes in 3Q 2012, reflecting lower levels of production.

Sales in the AACIS segment were $2.1 billion in 4Q 2012, a decrease of 13.3% as compared to $2.5 billion in 3Q 2012. Lower sales reflected lower steel shipments and lower average steel selling prices (-7.1%). Average selling prices in Kazakhstan were impacted by a weak Russian market and mix effects; average selling prices in the Ukraine reflected declining long product pricing; and in South Africa lower US dollar prices were realised due to the weaker rand (4.9% depreciation against the US dollar).

EBITDA in 4Q 2012 was $220 million, as compared to EBITDA of $70 million in 3Q 2012. EBITDA in 4Q 2012 included the positive impact from the Paul Wurth asset divestment (a gain of $242 million). Excluding this gain, profitability dropped significantly during the quarter due to negative price-cost squeeze and lower volumes.

Shipments in the Distribution Solutions segment in 4Q 2012 were 4.5 million tonnes, an increase of 8.4% as compared to 4.1 million tonnes in 3Q 2012.

Sales in the Distribution Solutions segment in 4Q 2012 were $3.9 billion, an increase of 3.7% as compared to $3.7 billion in 3Q 2012, due primarily to higher steel shipment volumes offset in part by lower average steel selling prices (-4.0%).

EBITDA in 4Q 2012 was $(24) million, as compared to EBITDA of $11 million in 3Q 2012, primarily due to the negative impact from price-cost squeeze in Europe.

The operating result in 4Q 2012 was impacted by non-cash impairment expenses of $0.8 billion due to a write down of goodwill and restructuring charges of $0.1 billion related to Asset Optimization.

(a)  Own iron ore and coal production not including strategic long-term contracts
(b)  Iron ore and coal shipments of market-priced based materials include the Company’s own mines, and share of production at other mines, and exclude supplies under strategic long-term contracts

Own iron ore production (not including supplies under strategic long-term contracts) in Q4 2012 was 14.0 million metric tonnes, 2.1% lower than 3Q 2012 and 7.5% lower than 4Q 2011. Shipments at market price declined (-6.7%) in 4Q 2012 as compared to 3Q 2012 due to continued heavy monsoon weather in Liberia and operational issues in Ukraine. 

Own coal production (not including supplies under strategic long-term contracts) in 4Q 2012 was 2.0 million metric tonnes, representing a decrease of 3.6% as compared 3Q 2012 and 11.1% as compared to 2.2 million metric tonnes in 4Q 2011.

EBITDA attributable to the Mining segment for 4Q 2012 was $315 million, 19.4% lower as compared to 3Q 2012. This decline was primarily due to the effect of lagged pricing in iron ore (a portion of iron ore shipments from Canada and Mexico reference quarter-lagged prices) and lower coal realisations, driven by weaker seaborne market prices. EBITDA attributable to the Mining segment was $779 million in 4Q 2011.

Liquidity and Capital Resources

For 4Q 2012, net cash provided by operating activities was $2.9 billion, compared to net cash used in operating activities of $0.3 billion in 3Q 2012. Cash flow provided by operating activities in 4Q 2012 included a $2.1 billion release of operating working capital compared to an investment in working capital of $0.3 billion in 3Q 2012. Rotation days[21] decreased during 4Q 2012 to 64 days from 72 days in 3Q 2012 primarily driven by lower inventory. 

Net cash used in investing activities during 4Q 2012 was $0.8 billion, as compared to net cash used in investing activities of $1.1 billion in 3Q 2012. Capital expenditures decreased to $1.1 billion in 4Q 2012 as compared to $1.2 billion in 3Q 2012. The Company is focusing only on core growth capital expenditures in its mining business given potentially attractive return profiles of projects under construction. Some planned steel investments remain suspended.

Other investing activities in 4Q 2012 of $275 million included $0.3 billion inflow from the recovery of subsidiary financing offset by a net outflow of $89 million ($70 million net debt impact (increase) net of liabilities) on the Paul Wurth divestment (representing the cash consideration received from the purchaser less the cash held by Paul Wurth).  This compared to other investing activities in 3Q 2012 of $154 million. 

Net cash used by financing activities for 4Q 2012 was $932 million, as compared to cash provided by financing activities of $243 million in 3Q 2012, during which the Company issued $650 million of subordinated perpetual securities.

On December 18, 2012, ArcelorMittal extended the conversion date of the mandatorily convertible bond (“MCB”) issued by one of its wholly-owned Luxembourg subsidiaries and convertible into preferred shares of such subsidiary from January 31, 2013 to January 31, 2014. The MCB was originally issued in December 2009 (and placed privately with a Luxembourg affiliate of Crédit Agricole Corporate and Investment Bank) in an amount of $750 million, which was increased to $1 billion in April 2011. In connection with the extension of the conversion date of the MCB, ArcelorMittal also extended the maturities of the equity-linked notes in which the proceeds of the MCB issuance are invested.

During 4Q 2012, the Company paid dividends amounting to $306 million as compared to $297 million in 3Q 2012.

At December 31, 2012, the Company’s cash and cash equivalents (including restricted cash and short-term investments) amounted to $4.5 billion as compared to $3.0 billion at September 30, 2012. As of December 31, 2012, net debt decreased by $1.4 billion to $21.8 billion, as compared with $23.2 billion at September 30, 2012, driven by positive operating cash flow and recovery of subsidiary financing.

The Company had liquidity[22] of $14.5 billion at December 31, 2012, an increase of $1.1 billion as compared with liquidity of $13.4 billion at September 30, 2012, consisting of cash and cash equivalents (including restricted cash and short-term investments) of $4.5 billion and $10 billion of available credit lines. At December 31, 2012, the average debt maturity was 6.1 years.

Management gains program

At the end of 3Q 2012, the Company had achieved its management gains target of $4.8 billion from sustainable SG&A, fixed and variable cost reductions and continuous improvement. The Company is currently developing plans to announce a new Management Gains Program in the near term.

Asset Optimization

The essential components of Asset Optimization have been announced:

Annual dividend reduced to $0.20/share for 2013

As communicated during the third quarter of 2012 results, given the challenging global economic conditions and the Company’s priority to deleverage, ArcelorMittal’s Board of Directors proposes reducing the annual dividend payment to $0.20/share for 2013 (from $0.75/share in 2012). Subject to shareholder approval at the next annual general meeting in May 2013, this dividend will be paid in July 2013.  Once the deleveraging plan is complete and market conditions improve, the Board intends to progressively increase the dividend.

Outlook and guidance

The Company expects reported EBITDA to be higher in 2013 as compared to 2012. Steel shipments are expected to increase by approximately 2-3% in 2013 as compared to 2012. With the completion of the management gains program and asset optimization, per-tonne steel margins are expected to improve marginally in 2013 as compared to 2012. With the ArcelorMittal Mines Canada expansion to 24mtpa on track for ramp up during 1H 2013, market-priced iron ore shipments are expected to increase by approximately 20% in 2013 relative to 2012. The Company expects to spend approximately $3.5 billion on capital expenditures, of which $2.7 billion is maintenance-related. Approximately $5 billion of cash receipts expected from the capital raised in January 2013 and the announced agreed sale of a 15% stake in AMMC (assuming completion on schedule), should enable net debt to decline to approximately $17 billion by June 30, 2013. As previously announced, the Board of Directors proposes a $0.20/share dividend for 2013 (versus $0.75/share in 2012) payable as a single payment in July 2013.

a)     Total of all finished production of fines, concentrate, pellets and lumps.
b)     Includes own mines and share of production from Hibbing (USA-62.30%) and Pena (Mexico-50%).
c)     Consists of a long-term supply contract with Cleveland Cliffs  for purchases made at a previously set price, adjusted for changes in certain steel prices and inflation factors.
d)     Includes purchases under a strategic agreement with Sishen/Thabazambi (South Africa). Prices for purchases under the July 2010 interim agreement with Kumba (as extended and amended several times) have been on a fixed-cost basis since March 1, 2010.

Appendix 9: End notes

[1]The financial information in this press release 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”. The numbers in this 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]On July, 25, 2012, ArcelorMittal announced the sale of its 48.1% stake in Paul Wurth Group to SMS Holding GmbH for a total consideration of EUR 300 million. On completion of the transaction on December 17, 2012, the Company recognized a $242 million gain on the divestment.
[5]During the 3Q 2012 the Company incurred $72 million in charges related to a one-time signing bonus and post retirement benefit costs following entry into the new US labor contract. During 4Q 2012 the Company incurred $110 million in charges related to the recognition of additional actuarial losses accrued on post retirement benefits following changes to year end actuarial assumptions.
[6]Market priced tonnes represent amounts of iron ore and coal from ArcelorMittal mines that could be sold to third parties on the open market.  Market priced tonnes that are not sold to third parties are transferred from the Mining segment to the Company’s steel producing segments and reported at the prevailing market price.  Shipments of raw materials that do not constitute market priced tonnes are transferred internally and reported on a cost-plus basis.
[7]Net debt refers to long-term debt, plus short term debt, less cash and cash equivalents, restricted cash and short-term investments (including those held as part of asset/liabilities held for sale).
[8]Mtpa refers to million tonnes per annum.
[9]ArcelorMittal’s Board of Directors recommends reducing the annual dividend payment to $0.20/share for 2013 (from $0.75/share in 2012). Subject to shareholder approval at the next annual general meeting in May 2013, this dividend will be paid in July 2013.
[10]EBITDA/t means total Group EBITDA divided by total steel shipments.
[11]ArcelorMittal Liege is a business unit of ArcelorMittal Belgium.
[12]On June 20, 2012, ArcelorMittal completed the sale of its steel foundation distribution business in NAFTA, Skyline Steel and Astralloy (“Skyline Steel”), to Nucor Corporation for a total consideration of $684 million. The transaction comprised 100% of ArcelorMittal’s stake in Skyline Steel’s operations in the NAFTA countries and the Caribbean.
[13]ArcelorMittal Dofasco made a number of changes to its pension plan and health and dental benefits. Employees at Dofasco will be transitioned from an existing defined benefit pension plan to a new defined contribution pension plan. Changes to health and dental benefits will result in an increase in the portion of the cost of health benefits that is borne by participants in the plans. These changes resulted in a curtailment gain of $241 million in 1Q 2012.
[14]This relates to a transaction (a "dynamic delta hedge") designed to hedge U.S. dollar-denominated raw material purchases until 2012 that ArcelorMittal entered into in mid-2008 and unwound in late 2008.  The unwind resulted, among other accounting effects, in a deferred gain of approximately $2.6 billion recorded in equity which, along with the recording of hedged expenses, is being recycled in the statement of operations during the 2009-1Q 2013 period.  
[15]On March 28, 2012, ArcelorMittal announced that it had successfully completed an offering to sell (through certain subsidiaries) 134,317,503 shares and warrants in respect of a further 134,317,503 shares in Ereğli Demir ve Çelik Fabrikaları T.A.Ş. (“Erdemir”) generating total proceeds of TRY 478,170,311 by way of a single accelerated bookbuilt offering to institutional investors. Taking into account acquisition cost net of dividends received, the disposal of the 6.25% stake in Erdemir was cash positive (from an accounting point of view the transaction resulted in a gain of $0.1 billion which includes the reclassification of reserves previously recorded in net equity).  All of the warrants matured without any being exercised ArcelorMittal’s holding today remains at approximately 18.7% and remains as an available for sale investment.   ArcelorMittal agreed to a 365 day lock-up period on its remaining stake in Erdemir.
[16]On April 4, 2012, ArcelorMittal Luxembourg entered into an agreement to divest its 23.48% interest in Enovos International SA to a fund managed by AXA Private Equity for a purchase price of EUR 330 million.  The purchase price was split with EUR 165 million payable at closing, and the remaining portion deferred for up to two years.  Interest will accrue on the deferred portion.  Closing of the transaction occurred on July 17, 2012, with $189 million received for the first installment of Enovos sale price (after adjustment for dividends). Taking into account acquisition cost net of dividends received, the disposal of the 23.48% stake in Enovos was cash positive (from an accounting point of view the transaction resulted in a loss of $0.2 billion).
[17]The Company’s investment in Macarthur was accounted for under the equity method. As a result of the Company’s decision to withdraw from the joint venture with Peabody Energy to acquire ownership of Macarthur Coal, the Company recognized an impairment loss of $119 million in the third quarter of 2011. The impairment for the full year 2011 decreased to $107 million as a result of the increase in the sale price from AUD16.00 to AUD16.25.
[18]Foreign exchange and other net financing costs include foreign currency swaps, bank fees, interest on pensions, impairments of financial instruments and revaluation of derivative instruments.
[19]In October 2012, the Company announced its decision to close two blast furnaces, a sinter plant, a steel shop and continuous casters in Liege, Belgium.
[20]There are three categories of sales: 1) “External sales”: mined product sold to third parties at market price; 2) “Market-priced tonnes”: internal sales of mined product to ArcelorMittal facilities and reported at prevailing market prices; 3) “Cost-plus tonnes” - internal sales of mined product to ArcelorMittal facilities on a cost-plus basis. The determinant of whether internal sales are reported at market price or cost-plus is whether the raw material could practically be sold to third parties (i.e. there is a potential market for the product and logistics exist to access that market).
[21]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 of the quarter on an annualized basis. Days of accounts receivable are a function of sales of the quarter on an annualized basis.
[22]Includes back-up lines for the commercial paper program of approximately $1.3 billion (€1 billion).
[23]Total of all finished production of fines, concentrate, pellets, lumps and coal (includes share of production and strategic long-term contracts).
[24]ArcelorMittal Distribution Solutions shipments are eliminated in consolidation as they primarily represent shipments originating from other ArcelorMittal operating subsidiaries.
[25]Operating working capital is defined as trade accounts receivable plus inventories less trade accounts payable.
[26]Capital expenditure includes the acquisition of intangible assets (such as concessions for mining and IT support) and includes payments to fixed asset suppliers.
[27]Average steel selling prices are calculated as steel sales divided by steel shipments.
[28]Shipments originating from a geographical location.
[29]Includes Tubular products business.
[30]Commercial paper is expected to continue to be rolled over in the normal course of business.
[31]Gearing is defined as (A) long-term debt, plus short-term debt, less cash and cash equivalents, restricted cash and short-term investments (including  those held as part of asset/liabilities held for sale), divided by (B) total equity.