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

“Market conditions in the first half have been very challenging, indeed more challenging than we had expected due to a combination of factors, not least the still unresolved crisis in the eurozone.  Against this backdrop the company has delivered a creditable performance, continuing to make progress on the divestment of non-core assets, and reducing net debt below the half year target.  Although the global economy remains fragile, we expect operating conditions to remain broadly similar in the second half.  Europe remains our biggest concern and the severity of the situation is reflected in the performance of our European operations.  Our focus throughout the remainder of the year remains on further improving competitiveness and reducing debt.”  

Second quarter 2012 Earnings ANALYST Conference Call

ArcelorMittal management will host a conference call for members of the investment community to discuss the second quarter 2012 and half year 2012 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, 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 second quarter 2012 and half year 2012 results

ArcelorMittal, the world’s leading steel company, today announces results for the three month and six month periods ended June 30, 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 0.8x in second quarter of 2012 (“2Q 2012”) as compared to 1.1x for the first quarter of 2012 (“1Q 2012”) and 1.5x for the second quarter of 2011 (“2Q 2011”), with significant improvements primarily in the Mining and Distribution Solutions segments. The performance of all other segments remained relatively constant quarter on quarter.

Health and safety performance, improved to 1.0x in first six months of 2012 (“1H 2012”) as compared to 1.4x for the first six months of 2011 (“1H 2011”), with significant improvements across all segments, especially in the Flat Carbon Americas, Mining and Distribution Solutions segments.

Despite this encouraging performance in lost time injury frequency rate, there is still more work to be done. In particular we have to focus on improving the safety performance of the contractors who work at our sites.

Analysis of results for the six months ended June 30, 2012 versus results for the six months ended June 30, 2011

ArcelorMittal’s net income for 1H 2012 was $1.0 billion, or $0.63 per share, as compared to net income for 1H 2011 of $2.6 billion, or $1.68 per share.

Total steel shipments for 1H 2012 were marginally lower at 43.9 million metric tonnes as compared with 44.1 million metric tonnes at 1H 2011.

Sales for 1H 2012 decreased by 4.5% to $45.2 billion as compared with $47.3 billion for 1H 2011 primarily due to lower average steel selling prices (-5.9%) and marginally lower steel shipments (-0.5%).

Depreciation of $2.3 billion for 1H 2012 was comparable with 1H 2011.

Impairment charges for 1H 2012 totaled $69 million, primarily related to the extended idling of the electric arc furnace and continuous caster at the Schifflange site in Luxembourg (Long Carbon Europe).  Impairment expense for 1H 2011 was $18 million relating to a rolling facility in the Long Carbon Americas segment.

Restructuring charges for 1H 2012 totaled $297 million and consisted largely of costs associated with the implementation of the Asset Optimisation Plan primarily impacting Flat Carbon Europe and Long Carbon Europe operations as well as costs associated with the project to close two blast furnaces, sinter plant, steel shop and continuous casters in Liege, Belgium. Costs related to Liege were recognized following the consultation process with employee representatives. There were no such restructuring charges in 1H 2011.

Operating income for 1H 2012 was $1.8 billion, compared with operating income of $3.7 billion for 1H 2011. Operating income during 1H 2012 was positively impacted by $580 million of one-time impacts: changes to the employee benefit plans at Dofasco led to curtailment gains of $241 million, and the Skyline Steel divestment[4] led to a gain of $339 million.

Operating performance for 1H 2012 was also positively impacted by $295 million of dynamic delta hedge (“DDH”) income recognized during the period. Operating performance for 1H 2011 was positively impacted by $308 million DDH income and a non-cash gain of $336 million recorded in the first quarter of 2011 relating to the reversal of provisions for inventory write-downs and litigation. 

Income from equity method investments and other income in 1H 2012 was $107 million as compared to $437 million in 1H 2011. Income from equity method investments and other income was lower in 1H 2012 on account of lower income from Chinese investees and the impact of disposals (Erdemir[10], Enovos[11] and Macarthur Coal).   

Net interest expense (including interest expense and interest income) was $917 million for 1H 2012 as compared to $916 million for 1H 2011.

Due to exchange rate effects, foreign exchange and other net financing costs[12] were $394 million for 1H 2012 as compared to costs of $1.1 billion for 1H 2011.

ArcelorMittal recorded an income tax benefit of $409 million for 1H 2012, as compared to an income tax benefit of $105 million for 1H 2011. 

Loss attributable to non-controlling interests for 1H 2012 was $1 million as compared with gain attributable to non-controlling interests for 1H 2011 of $52 million.

Discontinued operations for 1H 2012 was nil as compared to a gain of $461 million for 1H 2011, including $42 million of the post-tax net results contributed by the stainless steel operations prior to the spin-off of the business into Aperam which was completed on January 25, 2011. The balance of $419 million represents a 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 2Q 2012 versus 1Q 2012 and 2Q 2011

ArcelorMittal recorded net income for 2Q 2012 of $1.0 billion, or $0.62 per share, as compared with net income of $11 million, or $0.01 per share, for 1Q 2012, and net income of $1.5 billion, or $0.99 per share, for 2Q 2011.

Total steel shipments for 2Q 2012 were 21.7 million metric tonnes as compared with 22.2 million metric tonnes for 1Q 2012 and 22.2 million metric tonnes for 2Q 2011.

Sales for 2Q 2012 decreased by 1.0% to $22.5 billion as compared with $22.7 billion for 1Q 2012, and were down 10.5% as compared with $25.1 billion for 2Q 2011.  Sales were lower during 2Q 2012 as compared to 1Q 2012 primarily due to lower steel shipment volumes (-2.5%), marginally lower average steel selling prices (-0.4%) and the impact of negative foreign exchange effects.

Depreciation amounted to $1.2 billion for 2Q 2012, compared to $1.1 billion for 1Q 2012 and $1.2 billion for 2Q 2011.

Impairment charges for 2Q 2012 and 2Q 2011 were nil. Impairment charges for 1Q 2012 totaled $69 million, primarily related to the extended idling of the electric arc furnace and continuous caster at the Schifflange site in Luxembourg (Long Carbon Europe).

Restructuring charges for 2Q 2012 totaled $190 million and consisted primarily of costs associated with the project to close two blast furnaces, sinter plant, steel shop and continuous casters in Liege, Belgium. Restructuring charges for 1Q 2012 totaled $107 million and consisted of costs associated with the implementation of the Asset Optimization Plan primarily impacting Flat Carbon Europe and Long Carbon Europe operations. There were no such restructuring charges in 2Q 2011.

Operating income for 2Q 2012 was $1.1 billion, as compared with $663 million for 1Q 2012 and $2.3 billion for 2Q 2011. Operating income during 2Q 2012 was positively impacted by $339 million gain from the Skyline Steel divestment[4]. Operating income during 1Q 2012 was positively impacted by changes to the employee benefit plans at Dofasco, leading to curtailment gains of $241 million.

Operating performance for 2Q 2012 and 1Q 2012 was positively impacted by $136 million and $159 million, respectively, of DDH income (unwinding of hedges on raw material purchases) recognised during the quarter. Operating income for 2Q 2011 included a non-cash gain of $189 million relating to DDH income.

Income from equity method investments and other income in 2Q 2012 was $121 million, as compared to a loss of $14 million in 1Q 2012 and income of $289 million for 2Q 2011. During 1Q 2012 the net impact from the partial sale of the Company’s stake in Erdemir and the agreed sale of Enovos was a loss of $85 million.

Net interest expense (including interest expense and interest income) was stable at $456 million for 2Q 2012 as against $461 million for 1Q 2012 and $457 million for 2Q 2011.

Due to exchange rate effects, foreign exchange and other net financing costs were $32 million for 2Q 2012 as compared to costs of $362 million for 1Q 2012 and costs of $447 million for 2Q 2011. Foreign exchange and other net financing costs for 2Q 2012 were positively impacted by significant foreign exchange income primarily due to 6% appreciation of the US dollar against the Euro compared to a 3% depreciation in the previous quarter.

ArcelorMittal recorded an income tax benefit of $219 million for 2Q 2012, as compared to a benefit of $190 million for 1Q 2012 and an income tax expense of $61 million in 2Q 2011.

Loss attributable to non-controlling interests for 2Q 2012 was $6 million as compared with gain of $5 million for 1Q 2012 and gain of $41 million for 2Q 2011. 

Capital expenditure projects

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

Analysis of segment operations

Flat Carbon Americas crude steel production decreased by 3.8% to 6.0 million tonnes for 2Q 2012, as compared to 6.2 million tonnes for 1Q 2012, driven primarily by lower production in South America following scheduled maintenance.

Steel shipments for 2Q 2012 were 5.7 million tonnes, 1.1% higher than 1Q 2012.

Sales in the Flat Carbon Americas segment were $5.4 billion for 2Q 2012, a marginal increase of 1.7% as compared to $5.3 billion for 1Q 2012. Sales were impacted by higher steel selling prices in North America with lower dollar prices in South America due to depreciation of Brazilian Real.

EBITDA in 2Q 2012 decreased by 24.8% to $474 million as compared to $632 million in 1Q 2012. EBITDA in 1Q 2012 was positively impacted by changes to the employee benefit plans at Dofasco which resulted in curtailment gains of $241 million[5]. Excluding the curtailment gain effect, EBITDA in 2Q 2012 was 21.2% higher than 1Q 2012. Higher profitability was primarily driven by North American operations due to better selling prices combined with lower input cost, partially offset by lower profitability from South American operations and higher cost.

Flat Carbon Europe crude steel production remained flat at 7.1 million tonnes in 2Q 2012 as compared to 1Q 2012.

Steel shipments for 2Q 2012 were 6.8 million tonnes, a decrease of 9.2% as compared to 7.5 million tonnes for 1Q 2012. Steel shipments decreased due to lower demand in Europe, following the end of restocking, and lower exports.

Sales in the Flat Carbon Europe segment were $7.2 billion for 2Q 2012, a decrease of 6.4% as compared to $7.7 billion for 1Q 2012. Sales decreased primarily due to lower steel shipment volumes offset in part by higher average steel selling prices (+2.7%) in dollars despite euro currency depreciation.

EBITDA for 2Q 2012 was $381 million as compared to $130 million for 1Q 2012. Higher profitability was primarily driven by higher average selling prices and lower cost (benefit from lower average inventory cost) partially offset by lower steel shipment volumes.  EBITDA for 2Q 2012 includes $136 million of DDH income recognized during the quarter as compared to $159 million DDH income for 1Q 2012.

Operating performance in 2Q 2012 was negatively impacted by restructuring costs totaling $176 million associated with the project to close two blast furnaces, sinter plant, steel shop and continuous casters in Liege, Belgium. Operating performance in 1Q 2012 was negatively impacted by restructuring costs totalling $56 million associated with separation schemes primarily relating to Polish entities as part of the implementation of the Asset Optimisation Plan.

Long Carbon Americas and Europe crude steel production amounted to 5.9 million tonnes for 2Q 2012, an increase of 1.7% as compared to 5.8 million tonnes for 1Q 2012.

Steel shipments for 2Q 2012 were 5.8 million tonnes, an increase of 1.8% as compared to 5.7 million tonnes for 1Q 2012.

Sales in the Long Carbon Americas and Europe segment were lower at $5.7 billion for 2Q 2012, as compared to $5.8 billion for 1Q 2012. Sales were impacted by an increase in steel shipment volumes offset by lower average steel selling prices (-2.7%) primarily due to depreciation of local currencies in Europe and South America.

EBITDA for 2Q 2012 was $564 million, a 29.1% increase as compared to $437 million for 1Q 2012. Higher profitability was primarily driven by improved volumes combined with lower input cost, primarily in Europe (scrap prices) and recovery in our Tubular business which was impacted by operational issues in 1Q 2012.   

Operating performance in 1Q 2012 was negatively impacted by restructuring costs totalling $46 million associated with the implementation of the Asset Optimisation Plan primarily relating to Spanish entities. Additionally, due to ongoing construction market weakness impairment charges totalling $61 million were recorded during 1Q 2012 associated with the extended idling of the electric arc furnace and continuous caster at the Schifflange site in Luxembourg.

AACIS segment crude steel production was 3.7 million tonnes for 2Q 2012, an increase of 2.1% as compared to 3.6 million tonnes for 1Q 2012.

Steel shipments for 2Q 2012 amounted to 3.3 million tonnes, marginally lower by 1.0% as compared to 3.4 million tonnes for 1Q 2012.

Sales in the AACIS segment were $2.7 billion for 2Q 2012, a decrease of 3.9% as compared to $2.8 billion for 1Q 2012, primarily due to marginally lower steel shipments and stable steel average selling prices in CIS and lower average steel selling prices in South Africa impacted by depreciation of South African rand and weaker domestic market.

EBITDA for 2Q 2012 was $120 million, 25.0% lower as compared to $160 million for 1Q 2012. Lower profitability was driven primarily from our South African operations with lower selling prices and volumes combined with higher cost, partially offset by improved profitability from CIS operations. 

Shipments in the Distribution Solutions segment for 2Q 2012 were 4.5 million tonnes, a decrease of 1.4% as compared to 4.6 million tonnes for 1Q 2012.

Sales in the Distribution Solutions segment for 2Q 2012 were $4.3 billion, a decrease of 3.1% as compared to $4.4 billion for 1Q 2012, due primarily to lower steel shipment volumes.

EBITDA for 2Q 2012 was $385 million, as compared to EBITDA of $35 million for 1Q 2012.  EBITDA for 2Q 2012 includes a gain of $339 million from the Skyline divestment. Excluding this, EBITDA for 2Q 2012 was $46 million, an improvement of 31.4% as compared to $35 million in 1Q 2012.

(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) increased 9.1% to 14.4 million tonnes for 2Q 2012, as compared to 13.2 million tonnes for 1Q 2012, primarily due to higher production in Canada and the CIS regions.  Own iron ore production (not including supplies under strategic long-term contracts) increased 9.9% to 14.4 million tonnes for 2Q 2012, as compared to 13.1 million tonnes for 2Q 2011, primarily due to higher production in Liberia and AMMC.

Own coal production (not including supplies under strategic long-term contracts) for 2Q 2012 remained flat compared to 1Q 2012 and 2Q 2011.

EBITDA attributable to the Mining segment for 2Q 2012 was $541 million, 13.2% higher as compared to $478 million for 1Q 2012, primarily due to higher marketable shipments. EBITDA attributable to the Mining segment was $835 million for 2Q 2011.

Liquidity and capital resources

For 2Q 2012, net cash provided by operating activities was $2.3 billion, compared to net cash provided by operating activities of $0.5 billion for 1Q 2012. Cash flow from operating activities for 2Q 2012 include a  $1.4 billion release in operating working capital compared to an investment in operating working capital of $0.3 billion in 1Q 2012. Rotation days[14] decreased during 2Q 2012 to 61 days from 69 days in 1Q 2012. 

Net cash used in investing activities during 2Q 2012 was $0.8 billion, as compared to $1.0 billion for 1Q 2012. Capital expenditures decreased to $1.1 billion for 2Q 2012 as compared to $1.2 billion for > 1Q 2012. The Company is focusing only on core growth capex in its mining business given attractive return profiles of projects under construction. Some planned steel investments remain suspended.   Other investing activities in 2Q 2012 of $309 million inflow include $684 million from the sale of Skyline Steel[4] partially offset by $356 million subsidiary financing. Other investing activities in 1Q 2012 of $285 million include an inflow of $264 million from the partial sale of Erdemir shares. Taking into account acquisition cost net of dividends received, the disposal of the 6.25% stake in Erdemir was cash positive. Net cash used by financing activities for 2Q 2012 was $1.8 billion, as compared to cash provided by financing activities of $1.4 billion for 1Q 2012.  

During 1Q 2012, the Company issued €500 million 4.500% Notes due 2018 under its €3 billion wholesale Euro Medium Term Notes Programme as well as three series of US dollar denominated notes, consisting of $500 million 3.750% Notes due 2015, $1.4 billion 4.500% Notes due 2017 and $1.1 billion 6.250% Notes due 2022. The proceeds from these issuances were used to refinance existing indebtedness including a repayment of the Company’s syndicated credit facility. Furthermore, as part of a cash tender offer, the Company accepted for purchase $298,608,000 principal amount of its 5.375% Notes due 2013 for a total aggregate purchase price (including accrued interest) of $313,823,079 the remaining outstanding principal amount of such Notes is $1,201,392,000. During 2Q 2012, the Company repaid loans for a net amount of $1.4 billion related to commercial paper and bank loans.

During 2Q 2012 and 1Q 2012, the Company paid dividends amounting to $294 million per quarter.

At June 30, 2012, the Company’s cash and cash equivalents (including restricted cash and short-term investments) amounted to $4.5 billion as compared to $4.9 billion at March 31, 2012. As of June 30, 2012, net debt decreased by $1.6 billion to $22.0 billion, as compared with $23.6 billion at March 31, 2012, driven by increased cash flow from operations, foreign exchange gains (effect of USD appreciation on euro denominated debt) and inflows from the Skyline Steel divestment. The Company will continue to seek to reduce net debt through its focus on working capital management and non-core asset disposals.

The Company had liquidity[15] of $14.8 billion at June 30, 2012, a decrease of $0.4 billion as compared with liquidity of $15.2 billion at March 31, 2012, consisting of cash and cash equivalents (including restricted cash and short-term investments) of $4.5 billion and $10.3 billion of available credit lines.  Also, our average debt maturity remains at 6.4 years as at June 30, 2012.

Update on management gains program and asset optimization plan

At the end of 2Q 2012, the Company’s annualized sustainable management gains increased to $4.4 billion as compared to $4.2 billion at 1Q 2012. The Company maintains its target to reach management gains of $4.8 billion from sustainable SG&A, fixed and variable cost reductions and continuous improvement by the end of 2012.

Progress has been made on the Asset Optimization Plan launched in September 2011 to generate an annualized $1 billion sustainable EBITDA improvement by the end of 2012:

Outlook and guidance

The global economy remains fragile but we expect second half 2012 operating conditions to remain broadly similar to first half 2012. The situation in Europe and its potential impact on other markets remains the biggest concern. Against this backdrop the focus remains on improving efficiency, cutting costs and reducing debt while not sacrificing the high-return growth projects we have in our portfolio.

In the absence of an economic recovery, steel shipments in 2H 2012 are expected to follow the normal seasonal pattern. Iron ore shipments remain on track to increase by approximately 10% in FY 2012. As a result, group EBITDA per tonne for the 2H 2012 is expected to be similar to the underlying 1H 2012 level.

A further reduction in net debt is targeted by the end of 2012 but this is dependent on further divestments. The Company remains committed to retaining its investment grade credit rating,

2012 capex expected to be approximately $4.5 billion; ArcelorMittal Mines Canada expansion to 24mtpa is on track for ramp up during 1H 2013.

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”. 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]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 total consideration of $684 million. The transaction comprises 100% of ArcelorMittal’s stake in Skyline Steel’s operations in the NAFTA countries and the Caribbean.
[5]ArcelorMittal Dofasco has 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.
[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.
[8]Mtpa refers to million tonnes per annum
[9]EBITDA/t includes total group EBITDA divided by total steel shipments.
[10]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).  As a result of certain events, the Exchange Ratio and Exchange Price of the outstanding Warrants was adjusted such that the Exercise Price of the Series A warrants became TRY 3.490 for 1.437 shares, the Exercise Price of the Series B warrants became TRY 3.656 for 1.437 shares and the Exercise Price for the Series C warrants became TRY 3.822 for 1.437 shares.  Series A warrants matured on July 2, 2012 without any warrants being exercised.  ArcelorMittal’s holding today remains at approximately 18.7%.  If the remaining Series B and C warrants are exercised prior to the maturity dates of October 1, 2012 and December 14, 2012 respectively, ArcelorMittal’s holding will decline to approximately 14.6%.  ArcelorMittal agreed to a 365 day lock-up period on its remaining stake in Erdemir.
[11]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. Taking into account acquisition cost net of dividends received, the disposal of the 23.48% stake in Enovos will be cash positive (from an accounting point of view the transaction resulted in a loss of $0.2 billion).
[12]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.
[13]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).
[14]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.
[15]Includes back-up lines for the commercial paper program of approximately $2.5 billion (€2 billion).
[16]Total of all finished production of fines, concentrate, pellets, lumps and coal (includes share of production and strategic long-term contracts).
[17]ArcelorMittal Distribution Solutions shipments are eliminated in consolidation as they primarily 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]Capex includes the acquisition of intangible assets (such as concessions for mining and IT support) and includes payments to fixed asset suppliers.
[20]Average steel selling prices are calculated as steel sales divided by steel shipments.
[21]Shipments originating from a geographical location.
[22]Includes Tubular products business.
[23]Commercial paper is expected to continue to be rolled over in the normal course of business.
[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.