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

"The improved performance in the second quarter is in line with our expectations and reflects the continued slow and progressive recovery. Although the third quarter will be impacted by a combination of seasonal factors and the effects of the economic slowdown in China, underlying demand continues to show improvement. The challenge for the second half of the year will be to pass on the full extent of cost increases to our customers.

Separately, we are assessing the spin-off of our stainless division from the remainder of the group. We have confidence in the future of the stainless business and believe that the creation of a separately focussed company will create additional value for all shareholders."

Second quarter 2010 news conference (for media)

ArcelorMittal management will host a news conference:

Second quarter 2010 earnings analyst conference call

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

The conference call will include a brief question and answer session with senior management. The presentation will be available via a live video webcast on www.arcelormittal.com

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 second quarter 2010 results

ArcelorMittal, the world's leading steel company, today announced results for the three months ended June 30, 2010.

Corporate responsibility performance and initiatives

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

Total safety performance in steel and mining operations, based on own personnel figures and contractors lost time injury frequency rate, improved to 1.8 for the second quarter of 2010 as compared to 1.9 in the first quarter of 2010. Significant improvements in the safety performance of our mining operations, Asia Africa and CIS, and Distribution Solutions divisions (formerly known as Steel Solutions and Services) were offset by deterioration in the Flat Carbon Europe, Long Carbon Americas and Europe and Stainless Steel divisions.

Analysis of results for the three months ended June 30, 2010 versus the three months ended March 31, 2010 and the three months ended June 30, 2009

ArcelorMittal recorded net income for the three months ended June 30, 2010 of $1.7 billion, or $1.13 per share, as compared with net income of $0.7 billion, or $0.45 per share, for the three months ended March 31, 2010, and a net loss of $0.8 billion, or $(0.57) per share, for the three months ended June 30, 2009.

Total steel shipments for the three months ended June 30, 2010 were 22.8 million metric tonnes as compared with 21.5 million metric tonnes for the three months ended March 31, 2010, and 17.0 million metric tonnes for the three months ended June 30, 2009.

Sales for the three months ended June 30, 2010 were up 16% at $21.7 billion as compared with $18.7 billion for the three months ended March 31, 2010, and up 43% as compared with $15.2 billion for the three months ended June 30, 2009. Sales were higher during the second quarter of 2010 as compared to the first quarter of 2010 due to higher volumes (+6%) and higher average steel selling prices (+9%) primarily driven by higher raw material prices.

Operating income for the three months ended June 30, 2010 was $1.7 billion, as compared with $0.7 billion for the three months ended March 31, 2010, and an operating loss for the three months ended June 30, 2009 of $1.2 billion.

Depreciation expense remained flat at $1.2 billion for the three months ended June 30, 2010, March 31, 2010 and June 30, 2009, respectively.

Impairment cost for the three months ended June 30, 2010 was $119 million and resulted from the sale of the Anzherkoye steam coal mine in Russia which was sold in July 2010. No impairments were recorded in the three months ended March 31, 2010.

Operating performance for the three months ended June 30, 2010 included a non-cash gain of $92 million relating to unwinding of hedges on raw material purchases as compared to an $89 million gain recorded in the three months ended March 31, 2010. Operating performance for the three months ended June 30, 2009 had been negatively impacted by exceptional charges amounting to $1.2 billion related to write-downs of inventory ($0.9 billion) and provisions for workforce reductions ($0.3 billion).

Income from equity method investments and other income for the three months ended June 30, 2010 resulted in a gain of $183 million, as compared to gains of $94 million and $11 million for the three months ended March 31, 2010 and June 30, 2009, respectively. The increase in the second quarter of 2010 resulted from improvements in the operating performance of our investees.

Net interest expense (including interest expense and interest income) decreased to $308 million for the three months ended June 30, 2010 from $355 million for the three months ended March 31, 2010, primarily due to the impact of exchange rate fluctuations and one-time interest savings resulting from the early retirement of outstanding debt securities in the United States. Net interest expense for the three months ended June 30, 2009 was $401 million.

During the three months ended June 30, 2010, the Company also recorded a gain of $555 million (compared to a $141 million gain in the first quarter of 2010) primarily as a result of mark-to-market adjustments relating to its convertible bonds issued in 2009.

Foreign exchange and other net financing costs [5] for the three months ended June 30, 2010 amounted to $479 million (primarily including a loss of foreign exchange $387 million on deferred tax assets), as compared to $188 million and $142 million for the three months ended March 31, 2010 and June 30, 2009, respectively.

Gains related to the fair value of other derivative instruments for the three months ended June 30, 2010 amounted to $34 million, as compared with losses of $8 million and $20 million for the three months ended March 31, 2010 and June 30, 2009, respectively.

ArcelorMittal recorded an income tax benefit of $0.1 billion for the three months ended June 30, 2010, as compared to an income tax benefit of $0.3 billion for the three months ended March 31, 2010. The income tax benefit for the three months ended June 30, 2009 was $1.2 billion.

Profits attributable to non-controlling interests for the three months ended June 30, 2010 were $79 million as compared with $40 million for the three months ended March 31, 2010. Losses attributable to non-controlling interests for the three months ended June 30, 2009 were $62 million.

Capital expenditure projects

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

Analysis of segment operations for the three months ended June 30, 2010 as compared to the three months ended March 31, 2010

Flat Carbon Americas crude steel production reached 5.9 million tonnes for the three months ended June 30, 2010, an increase of 3% as compared to 5.7 million tonnes for the three months ended March 31, 2010.

Sales in the Flat Carbon Americas segment were $5.1 billion for the three months ended June 30, 2010, an increase of 16% as compared to $4.4 billion for the three months ended March 31, 2010. Sales improved primarily due to higher average steel selling prices (+12%) and marginally higher steel shipments (+1%).

EBITDA almost doubled to $1.1 billion, with EBITDA/tonne increasing by $92/tonne to $201/tonne. EBITDA improvement in the quarter was driven primarily from our North American operations including improved results of the mining operations.

Flat Carbon Europe crude steel production reached 8.5 million tonnes for the three months ended June 30, 2010, an increase of 15% as compared to 7.4 million tonnes for the three months ended March 31, 2010.

Sales in the Flat Carbon Europe segment were $6.6 billion for the three months ended June 30, 2010 an increase of 12% as compared to $5.9 billion for the three months ended March 31, 2010. Sales improved primarily as a result of higher steel shipments (+10%) and higher average steel selling prices (+3%).

EBITDA and operating results for the three months ended June 30, 2010 and March 31, 2010 included a non-cash gain relating to the unwinding of hedges on raw material purchases of $92 million and $89 million, respectively. EBITDA/tonne remained flat at $74/tonne.

Long Carbon Americas and Europe crude steel production reached 6.0 million tonnes for the three months ended June 30, 2010, an increase of 5% as compared to 5.7 million tonnes for the three months ended March 31, 2010.

Sales in the Long Carbon Americas and Europe segment were $5.5 billion for the three months ended June 30, 2010, an increase of 15% as compared to $4.8 billion for the three months ended March 31, 2010. Sales improved primarily due to higher average steel selling prices (+11%) and higher steel shipments (+5%).

Operating performance improved in the second quarter of 2010 as compared with the first quarter of 2010 primarily due to improvements in our North American and European operations. During the second quarter of 2010, EBITDA/tonne increased by $33/tonne (+39%) to $118/tonne as compared to $85/tonne in the first quarter of 2010.

AACIS segment crude steel production was 3.9 million tonnes for the three months ended June 30, 2010, an increase of 5% as compared to 3.7 million tonnes for the three months ended March 31, 2010.

Sales in the AACIS segment were $2.6 billion for the three months ended June 30, 2010, an increase of 19% as compared to $2.1 billion for the three months ended March 31, 2010. Sales improved primarily due to higher average steel selling prices (+12%) and higher steel shipments (+6%).

Operating performance improved in second quarter of 2010 as compared with the first quarter of 2010, primarily due to improvement in our CIS operations. During the second quarter of 2010, EBITDA/tonne increased by $56/tonne (+65%) to $142/tonne as compared to $86/tonne in the first quarter of 2010.

Stainless Steel segment crude steel production reached 588 thousand tonnes for the three months ended June 30, 2010, an increase of 8% as compared to 546 thousand tonnes for the three months ended March 31, 2010.

Sales in the Stainless Steel segment were $1.5 billion for the three months ended June 30, 2010, an increase of 19% as compared to $1.3 billion for the three months ended March 31, 2010. Sales improved primarily due to higher steel shipments (+11%) and higher average steel selling prices (+10%).

Operating performance improved in the second quarter of 2010 as compared with the first quarter of 2010. During the second quarter of 2010, EBITDA/tonne increased by $54/tonne (+16%) to $396/tonne as compared to $342/tonne in the first quarter of 2010.

Sales in the Distribution Solutions segment were $4.0 billion for the three months ended June 30, 2010, an increase of 15% as compared to the three months ended March 31, 2010. Sales improved primarily due to higher steel shipment volumes (+6%) and higher average selling prices (+8%).

Liquidity and Capital Resources

For the three months ended June 30, 2010, net cash provided by operating activities was $0.4 billion, compared to net cash used in operations of $0.7 billion for the three months ended March 31, 2010. The cash flow from operating activities for the second quarter of 2010 included $2.3 billion of investment in operating working capital changes as compared to $1.7 billon in the first quarter of 2010. Despite the increase in activity levels, rotation days [7] decreased from 67 days in the first quarter of 2010 to 65 days in the second quarter of 2010. However, the reduction in rotation days during the second quarter was primarily due to foreign exchange. Cash used in other operating activities for the three months ended June 30, 2010 amounted to $27 million, consisting primarily of tax refunds, inflows from the True Sale of Receivables programs and reversals of exchange losses and the non-cash gains of $555 million from the marking to market of the convertible bonds and $92 million relating to hedges on raw material purchases.

Net cash used in investing activities for the three months ended June 30, 2010 was $0.8 billion, compared to $0.7 billion for the three months ended March 31, 2010. Capital expenditures increased to $0.6 billion for the three months ended June 30, 2010 as compared to $0.5 billion for the three months ended March 31, 2010. In addition the Company spent $117 million on various investing activities primarily relating to the purchase of the minority stake in ArcelorMittal Ostrava. The Company continues to expect capital expenditures to total approximately $4.0 billion in 2010.

During the second quarter of 2010, the Company paid dividends amounting to $309 million as compared to $282 million in the first quarter 2010.

At June 30, 2010, the Company's cash and cash equivalents (including restricted cash and short-term investments) amounted to $2.6 billion as compared to $3.8 billion at March 31, 2010. During the quarter net debt decreased by $0.4 billion to $20.3 billion as compared with $20.7 billion at March 31, 2010. Excluding the impact of foreign exchange net debt would have increased by $0.5 billion. During the quarter operating working capital (defined as inventory plus trade accounts receivables less trade accounts payables) increased by $1.2 billion to $14.1 billion as compared to $12.9 billion at March 31, 2010, due to higher activity levels and prices. Furthermore, the difference between the increase in operating working capital as appearing in the balance sheet and on cash flow statement is primarily due to foreign exchange.

The Company had liquidity of $12.8[8] billion at June 30, 2010, compared with liquidity of $14.5 billion at March 31, 2010, consisting of cash and cash equivalents (including restricted cash and short-term investments) of $2.6 billion and $10.2 billion of available credit lines. During the second quarter of 2010, the Company refinanced and extended the maturity of its $4 billion syndicated credit facility and increased this to $4.6 billion by signing two new three-year bilateral revolving credit facilities.

Update on management gains, fixed cost reduction program and capacity utilizatio n

At the end of the second quarter of 2010, the Company had achieved annualized sustainable savings of $3.0 billion as compared to $2.9 billion as of the end of March 31, 2010, 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 $3.9 billion ($1.8 billion at a constant dollar [9]) of annualized temporary fixed cost savings in the second quarter of 2010 resulting from industrial optimization in response to lower demand.

Capacity utilization increased to approximately 78% in the second quarter of 2010, as compared to approximately 72% in the first quarter of 2010.

Stainless Steel segment spin-off assessment

The Board of ArcelorMittal has decided to assess the spin-off of its stainless steel business from the remainder of the group subject to appropriate legal and tax analysis and regulatory approvals. Such a spin-off would enable the stainless steel business to benefit from better visibility in the markets, and to pursue its growth strategy as an independent company in the emerging markets and in speciality products including electrical steel.

As announced previously, ArcelorMittal imposed a surcharge on its domestic sales to compensate for some of the iron ore cost increase. In view of the interim agreement, ArcelorMittal will, with effect from August 1, 2010, charge a single all-in price, reflecting the higher cost of iron ore, rather than a separate surcharge, as had been charged previously. ArcelorMittal customers have been informed of this revision in its commercial policy. The extra amount that is now due and payable to Kumba exceeds the funds that were raised as the surcharge over the last few months and, therefore, these accumulated surcharge funds and the shortfall will be paid over to Kumba.

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

Third quarter of 2010 outlook

Third quarter 2010 EBITDA is expected to be approximately $2.1 – $2.5 billion. Shipments are expected to be lower and capacity utilization is expected to decline to approximately 70% due to seasonal slowdown. Average selling prices are expected to remain stable and operating costs are expected to increase as compared to the second quarter of 2010 due largely to higher raw material prices.

a) Total of all finished production of fines, concentrate, pellets and lumps (includes share of production and strategic long-term contracts).

b) Includes own share of production from Hibbing (USA-62.30%), and Pena (Mexico-50%). For 2009, it also includes Wabush (Canada-28.57%), for which on October 9, 2009, ArcelorMittal entered into an agreement to divest its non-controlling (minority) interest. The transaction was completed in February 2010.

c) Includes long term supply contract with Cleveland Cliffs.

d) Includes Andrade mine operated by Vale until November 15, 2009: prices on a cost plus basis. From November 16, 2009 the mine has been operated by ArcelorMittal and included as captive.

e) Strategic agreement with Sishen/Thabazambi (Africa); prices on a cost plus basis. Includes strategic agreement with Kumba [see recent development section for update]

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] Foreign exchange and other net financing costs include foreign currency swaps, bank fees, interest on pensions and impairments of financial instruments.
[6] As from January 1, 2010 the Steel Solutions and Services segment has been renamed ArcelorMittal Distribution Solutions (AMDS).
[7] 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.
[8] Includes back-up lines for the commercial paper program of approximately $2.4billion (euro2billion).
[9] At average 2008 exchange rate.
[10] Amounts are derived from the Company's audited consolidated financial statements for the year ended December 31, 2009.
[11] 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 and six months ended June 30, 2009.
[12] During the three months ended June 30, 2009 the Company had recorded exceptional charges amounting to $1.2 billion primarily related to write-downs of inventory ($0.9 billion) and provisions for workforce reductions ($0.3 billion).
[13] Total of all finished production of fines, concentrate, pellets and lumps (includes share of production and strategic long-term contracts).
[14] ArcelorMittal Distribution Solutions shipments are eliminated in consolidation as they primarily represent shipments originating from other ArcelorMittal operating subsidiaries.
[15] Changes in operating working capital are defined as trade accounts receivable plus inventories less trade accounts payable.
[16] Refers to the acquisition of 13.88% non-controlling interest in Ostrava, which according to new IAS 27 is presented as financing activities in the first quarter of 2010.
[17] Segmental capex includes the acquisition of intangible assets (such as concessions for mining and IT support).
[18] Average steel selling prices are calculated as steel sales divided by steel shipments.
[19] Shipments originating from a geographical location.
[20] Includes Tubular products business
[21] $422.5 million US bond due 2014 redeemed early on April 1, 2010 in line with the terms of the indenture.
[22] Commercial paper is expected to continue to be rolled over in the normal course of business.
[23] Euro denominated loans converted at the Euro: $ exchange rate of 1.2271 as at June 30, 2010.
[24] 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.