Commenting, Mr. Lakshmi N. Mittal, Chairman and CEO, ArcelorMittal, said:
"As anticipated, we have seen the first signs of recovery in the third quarter. In response to this increased demand, a number of our facilities have now been re-started, and we expect fourth quarter crude steel capacity utilization to be approximately 70%. We should continue to see further gradual improvement through 2010, although the operating environment remains challenging."

Financial highlights (on the basis of IFRS⁵, amounts in US$ and Euros⁶):

(In millions of U.S. dollars except earnings per share and shipments data)

Third quarter 2009 News CONFERENCE (FOR MEDIA)

ArcelorMittal management will host a news conference:

Date: Wednesday, October 28, 2009
Time: 5.30 am U.S. Eastern time / 9.30 am GMT / 10.30 am CET

The dial in numbers:

Third quarter 2009 Earnings ANALYST Conference Call

Additionally, ArcelorMittal management will host a conference call for members of the investment community to discuss the third quarter 2009 financial performance at:

Date: Wednesday, October 28, 2009
Time: 10.30 am U.S. Eastern time / 2.30 pm GMT / 3.30 pm CET

The conference call will include a brief question and answer session with senior management.

The dial in numbers:

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, 2008 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 third quarter 2009 and nine months of 2009 results

ArcelorMittal, the world’s largest and most global steel company, today announced results for the three and nine month periods ended September 30, 2009.

Analysis of results for three months ended September 30, 2009 versus three months ended June 30, 2009 and three months ended September 30, 2008

ArcelorMittal recorded net income for the three months ended September 30, 2009 of $0.9 billion, or $0.60 per share, as compared with a net loss of $0.8 billion, or $(0.57) per share, for the three months ended June 30, 2009, and net income of $3.8 billion or $2.79 per share, for the three months ended September 30, 2008.

Sales for the three months ended September 30, 2009 were $16.2 billion, higher as compared with $15.2 billion for the three months ended June 30, 2009 and down sharply from $35.2 billion for the three months ended September 30, 2008. Despite the improved demand during the third quarter of 2009 as compared to the second quarter of 2009, sales remain substantially lower year-on-year due to the global economic crisis, including a steep fall in selling prices.

ArcelorMittal recorded operating income for the three months ended September 30, 2009 of $0.3 billion, as compared with an operating loss of $1.2 billion⁸ for the three months ended June 30, 2009 and operating income of $5.5 billion⁹ for the three months ended September 30, 2008.

Total steel shipments for the three months ended September 30, 2009 were 18.2 million metric tonnes as compared with steel shipments of 17.0 million metric tonnes for the three months ended June 30, 2009 and 25.6 million metric tonnes for the three months ended September 30, 2008. As noted above, the sharp decrease year-on-year resulted from reduced steel production in response to falling demand amid the global economic crisis.

Depreciation expenses remained flat at $1.2 billion for the three months ended September 30, 2009 as compared with the three months ended June 30, 2009. Depreciation expenses for the three months ended September 30, 2008 were $1.4 billion.

During the three months ended September 30, 2009 ArcelorMittal Galati recorded an impairment amounting to $0.1 billion on coke oven assets.

Income from equity method investments and other income for the three months ended September 30, 2009 resulted in a gain of $99 million, as compared to gains of $11 million and $386 million for the three months ended June 30, 2009 and September 30, 2008, respectively.

Net interest expense (including interest expense and interest income), decreased to $387 million for the three months ended September 30, 2009 as compared to $401 million for the three months ended June 30, 2009, primarily due to a reduction in overall debt. (See “Liquidity and Capital Resources” below). Net interest expense for the three months ended September 30, 2008 amounted to $436 million. Foreign exchange and other net financing gains¹⁰ for the three months ended September 30, 2009 amounted to $106 million, as compared to costs of $142 million and $380 million for the three months ended June 30, 2009 and September 30, 2008, respectively. Gains related to the fair value of derivative instruments for the three months ended September 30, 2009 amounted to $6 million, as compared with losses of $20 million and $107 million for the three months ended June 30, 2009 and September 30, 2008, respectively. During the three months ended September 30, 2009, the Company also recorded a loss of $110 million (versus a $357 million loss in the second quarter of 2009) as a result of mark-to-market adjustments on the conversion options embedded in its recently issued convertible bonds¹¹.

ArcelorMittal recorded an income tax benefit of $0.9 billion for the three months ended September 30, 2009, as compared to an income tax benefit of $1.2 billion for the three months ended June 30, 2009. The income tax expense for the three months ended September 30, 2008 was $0.7 billion.

Profits attributable to non-controlling (minority) interest for the three months ended September 30, 2009 were $15 million as compared with losses attributable to non-controlling (minority) interest of $62 million for the three months ended June 30, 2009. Profits attributable to non-controlling (minority) interest for the three months ended September 30, 2008 were $414 million.

Analysis of segment operations for the three months ended September 30, 2009 as compared to the three months ended June 30, 2009

Flat Carbon Americas

Total steel shipments in the Flat Carbon Americas segment were higher at 4.2 million metric tonnes for the three months ended September 30, 2009, as compared with steel shipments of 3.5 million metric tonnes for the three months ended June 30, 2009.

Sales increased to $3.3 billion for the three months ended September 30, 2009 as compared with sales of $2.8 billion for the three months ended June 30, 2009, due to higher volumes offset by slightly lower prices (a 1.8% decrease in average steel selling price).

The segment recorded operating income of $0.1 billion for the three months ended September 30, 2009 as compared with an operating loss of $0.4 billion for the three months ended June 30, 2009.

Flat Carbon Europe

Total steel shipments in the Flat Carbon Europe segment were higher at 5.6 million metric tonnes for the three months ended September 30, 2009, as compared with 5.0 million metric tonnes for the three months ended June 30, 2009.

Sales were higher at $4.9 billion for the three months ended September 30, 2009 as compared with sales of $4.5 billion for the three months ended June 30, 2009, primarily due to higher volumes, partially offset by lower prices (a 4.8% decrease in average steel selling price).

The segment recorded an operating loss of $168 million for the three months ended September 30, 2009 as compared with an operating loss of $418 million for the three months ended June 30, 2009. Operating results for the three months ended September 30, 2009 include a non-cash gain of $50 million relating to hedges on raw material purchases as compared to $239 million for the three months ended June 30, 2009.

Long Carbon Americas and Europe

Total steel shipments in the Long Carbon Americas and Europe segment were lower at 5.0 million metric tonnes for the three months ended September 30, 2009 as compared with 5.3 million metric tonnes for the three months ended June 30, 2009.

Sales were higher at $4.3 billion for the three months ended September 30, 2009 as compared with $4.0 billion for the three months ended June 30, 2009, primarily due to higher prices (a 5.3% increase in average steel selling price), partially offset by lower volumes.

The segment recorded operating income of $292 million for the three months ended September 30, 2009 as compared with an operating loss of $51 million for the three months ended June 30, 2009.

Asia Africa and CIS (“AACIS”)

Total steel shipments in the AACIS segment were slightly higher at 3.0 million metric tonnes for the three months ended September 30, 2009 as compared with 2.9 million metric tonnes for the three months ended June 30, 2009.

Sales were higher at $2.0 billion for the three months ended September 30, 2009 as compared with $1.7 billion for the three months ended June 30, 2009 primarily due to higher prices (a 8.4% increase in average steel selling price) and a small increase in volumes.

The segment recorded operating income of $96 million for the three months ended September 30, 2009 as compared with operating income of $20 million for the three months ended June 30, 2009.

Stainless Steel

Total steel shipments in the Stainless Steel segment were slightly lower at 354,000 metric tonnes for the three months ended September 30, 2009 as compared with steel shipments of 363,000 metric tonnes for the three months ended June 30, 2009.

Sales were higher at $1.1 billion for the three months ended September 30, 2009 as compared with $1.0 billion for the three months ended June 30, 2009, primarily due to higher prices (a 13.9% increase in average steel selling price), which more than offset lower volumes.

The segment recorded operating income of $51 million for the three months ended September 30, 2009 as compared with an operating loss of $64 million for the three months ended June 30, 2009.

Steel Solutions and Services

Total steel shipments in the Steel Solutions and Services segment¹² were lower at 4.2 million metric tonnes in the three months ended September 30, 2009 as compared with steel shipments of 4.5 million metric tonnes for the three months ended June 30, 2009.

Sales in the Steel Solutions and Services segment were lower at $3.2 billion for the three months ended September 30, 2009 as compared with $3.4 billion for the three months ended June 30, 2009, primarily due to lower volumes partially offset by an increase in prices (a 2.6% increase in average steel selling price).

The segment recorded an operating loss of $60 million for the three months ended September 30, 2009 as compared with an operating loss of $286 million for three months ended June 30, 2009.

Liquidity and Capital Resources

For the three months ended September 30, 2009, net cash provided by operating activities was $2.4 billion, compared to $1.7 billion for the three months ended June 30, 2009. The cash inflow from operating activities for the third quarter of 2009 included $1.3 billion generated by operating working capital changes. Other operating activities for the three months ended September 30, 2009 include a non-cash charge of $110 million related to convertible bonds (versus $357 million in the second quarter of 2009), and a non-cash gain of $50 million relating to hedges on raw material purchases (versus $239 million in the second quarter of 2009). In addition, the Company made payments under voluntary separation schemes of $178 million (versus $221 million in the second quarter of 2009).

Net cash used in investing activities for the three months ended September 30, 2009 was $0.7 billion, compared to $0.5 billion for the three months ended June 30, 2009. Other investing activities outflow of $83 million for the three months ended September 30, 2009 includes $55 million of instalment payments for the purchase of non-controlling (minority) interests in Ostrava as previously announced. Capital expenditures remained flat at $0.6 billion for the three months ended September 30, 2009 and June 30, 2009, respectively.

During the third quarter of 2009, the Company paid dividends amounting to $306 million, which included $282 million paid to ArcelorMittal shareholders and $24 million to non-controlling (minority) shareholders in subsidiaries.

At September 30, 2009, the Company’s cash and cash equivalents (including restricted cash and short-term investments) amounted to $5.9 billion as compared to $7.3 billion at June 30, 2009. Net debt¹³ at September 30, 2009 was $21.6 billion (as compared with $22.9 billion at June 30, 2009). Operating working capital (defined as inventory plus receivables less payables) at September 30, 2009 was $13.7 billion as compared to $14.9 billion at June 30, 2009, due mainly to higher trade accounts payables as purchasing increased in line with increased production. Rotation days¹⁴ decreased from 98 to 83 days.
The Company had liquidity of $18.4 billion at September 30, 2009 (excluding the $1 billion 30-year bond issuance on October 1, 2009 discussed below), compared with liquidity of $22.7 billion at June 30, 2009, consisting of cash and cash equivalents (including restricted cash and short-term investments) of $5.9 billion and $12.5 billion of available credit lines. During the third quarter 2009, the Company prepaid $3.4 billion of the Company's €17 billion Credit Facility and cancelled a $3.2 billion credit facility in connection with its previously announced covenant amendment agreement. As of September 30, 2009, the Company’s leverage ratio (net debt to last twelve months EBITDA), which is the ratio used in the Company’s principal financing facilities, stood at 3.3X versus 1.7X at June 30, 2009.
On October 1, 2009, ArcelorMittal priced an issuance of $1 billion principal amount of 7% bonds due 2039 (the yield of the bond is 7.4%). Including this amount, ArcelorMittal has refinanced since March 31, 2009, approximately $12.4 billion of debt through a number of capital markets transactions.

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

The Company has met its target to achieve management gains of $2 billion of sustainable SG&A and fixed cost reductions in 2009 ahead of schedule. As of the end of the third quarter of 2009, the Company has achieved annualized sustainable savings of $2.2 billion. The Company has also achieved $7.3 billion ($6.2 billion at a constant dollar¹⁵) of annualized temporary fixed cost savings in Q3 2009 resulting from industrial optimization in response to lower demand.

Capacity utilisation increased to approximately 61% in the third quarter of 2009, as compared to approximately 50% in the second quarter of 2009.

Dividend maintained at $0.75 per share for 2010

The Board of Directors has recommended to maintain the Company’s base dividend at $0.75 for full-year 2010.

As a consequence, the Board of Directors will submit to a shareholders vote, at the next annual general meeting, a proposal to maintain the quarterly dividend payment at $0.1875. The dividend payments would occur on a quarterly basis for the full year 2010. Consequently, the new quarterly dividend payments would take place on March 15, 2010, June 14, 2010, September 13, 2010 and December 15, 2010, taking into account that the first quarter dividend payment to be paid on March 15, 2010 shall be an interim dividend.

Final payment of current year dividend of $0.1875 per share will be payable on December 14, 2009.

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

Fourth quarter 2009 outlook

The fourth quarter of 2009 EBITDA is expected to be approximately $2.0-$2.4 billion. Shipments and average steel selling prices are expected to be higher in the fourth quarter of 2009 than in the third quarter of 2009. In addition, the Company expects fixed costs to increase due to the expected increase in activity in the fourth quarter.

¹EBITDA is defined as operating income plus depreciation, impairment expenses and exceptional items.
²Rotation 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. ArcelorMittal’s previously announced target was to reduce working capital rotation days to 75-85 days by end of 2009.
³Gearing is defined as (A) long-term debt, net of current portion, plus payables to banks and current portion of long-term debt, less cash and cash equivalents, restricted cash and short-term investments (also referred to as “net debt”), divided by (B) total equity. Gearing was 34% at September 30, 2009; ArcelorMittal’s gearing target is between 25% to 40%.
⁴ArcelorMittal targets a Net debt/average EBITDA ratio based on yearly average EBITDA from January 1, 2004, in the range of 0.5X to 1.8X. At September 30, 2009 this ratio was 1.3X.
⁵The 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.
⁶US dollars have been translated into Euros using an average exchange rate (US$/Euro) of 1.4303, 1.3621, 1.5050, 1.3661 and 1.5218 for Q3 2009, Q2 2009, Q3 2008, 9M 2009 and 9M 2008 respectively.
⁷During the second quarter of 2009, the Company recorded exceptional charges amounting to $1.2 billion pre-tax related primarily to write-downs of inventory ($0.9 billion) and provisions for workforce reduction ($0.3 billion). During the first quarter of 2009, the Company recorded exceptional charges amounting to $1.2 billion pre-tax related primarily to write-downs of inventory. During the third quarter 2008, ArcelorMittal USA agreed to a new four-year labor contract with its union employees. Management concluded that under IFRS it is required to recognize a non-recurring expense in the third quarter of approximately $1.6 billion primarily related to vested post-employment benefits. In addition it was agreed to pay an additional $90 million upon signing of the contract.
⁸The loss in the second quarter of 2009 resulted principally from 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).
⁹During the third quarter of 2008, ArcelorMittal USA agreed to a new four-year labor contract with its union employees. Management has concluded that under IFRS it is required to recognize a non-recurring expense in the third quarter of approximately $1.6 billion primarily related to vested post-employment benefits. In addition it was agreed to pay an additional $90 million upon signing of the contract.
¹⁰Foreign exchange and other net financing costs include foreign currency swaps, bank fees, interest on pensions and impairments of financial instruments.
¹¹On April 1, 2009 and May 6, 2009, the Company issued approximately $2.5 billion of convertible bonds which are convertible into shares at the option of the bondholders. The Company has the option to settle the bonds for shares or for an amount equivalent to the cash value of the shares at the date of the settlement. The Company has determined that the convertible bonds are hybrid instruments as defined by IFRS as the conversion option gives the bondholder the right to put the bond back to the Company. In addition, the Company identified certain components of the contract to be embedded derivatives in accordance with IAS 39. Therefore, the Company separated the embedded derivatives and recorded their fair value at inception ($597 million) as liabilities (out of the net financial debt). At each reporting period, changes in the fair value of the embedded derivatives are recorded to the statement of operations. The charge recorded at the end of the third quarter 2009 ($110 million) and second quarter 2009 ($357 million) was due primarily to the appreciation of the Company’s share price since the issuance of the bonds. Noteholders of the ArcelorMittal US$ convertible bonds due 2014 are being informed that ArcelorMittal has decided to irrevocably waive the option to deliver the cash value of the shares upon conversion, as from October 28, 2009.
¹²Steel Solutions and Services shipments are eliminated in consolidation as they represent shipments originating from other ArcelorMittal operating subsidiaries.
¹³Net debt includes long-term debt, net of current portion, plus payables to banks and current portion of long-term debt, less cash and cash equivalents, restricted cash and short-term investments.
¹⁴Rotation 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.
¹⁵At average 2008 exchange rate.
¹⁶Gearing is defined as (A) long-term debt, net of current portion, plus payables to banks and current portion of long-term debt, less cash and cash equivalents, restricted cash and short-term investments (also referred to as “net debt”), divided by (B) total equity).
¹⁷Amounts are derived from the Company’s audited consolidated financial statements for the year ended December 31, 2008.
¹⁸During the second quarter of 2009, the Company recorded exceptional charges amounting to $1.2 billion pre-tax related primarily to write-downs of inventory ($0.9 billion) and provisions for workforce reduction ($0.3 billion). During the first quarter of 2009, the Company recorded exceptional charges amounting to $1.2 billion pre-tax related primarily to write-downs of inventory. During the third quarter 2008, ArcelorMittal USA agreed to a new four-year labor contract with its union employees. Management concluded that under IFRS it was required to recognize a non-recurring expense in the third quarter of approximately $1.6 billion primarily related to vested post-employment benefits. In addition it was agreed to pay an additional $90 million upon signing of the contract.
¹⁹EBITDA is defined as operating income plus depreciation, impairment expenses and exceptional items.
²⁰Steel Solutions and Services shipments are eliminated in consolidation as they represent shipments originating from other ArcelorMittal operating subsidiaries.
²¹Total of all finished production of fines, concentrate, pellets and lumps (includes share of production and strategic long-term contracts).
²²During the second quarter of 2009, the Company recorded exceptional charges amounting to $1.2 billion pre-tax related primarily to write-downs of inventory ($0.9 billion) and provisions for workforce reduction ($0.3 billion). During the first quarter of 2009, the Company recorded exceptional charges amounting to $1.2 billion pre-tax related primarily to write-downs of inventory. During the third quarter 2008, ArcelorMittal USA agreed to a new four-year labor contract with its union employees. Management concluded that under IFRS it was required to recognize a non-recurring expense in the third quarter of approximately $1.6 billion primarily related to vested post-employment benefits. In addition it was agreed to pay an additional $90 million upon signing of the contract.
²³Changes in operating working capital are defined as trade accounts receivable plus inventories less trade accounts payable.
²⁴During the second quarter of 2009, the Company distributed $234 million to the non-controlling shareholders in its South Africa subsidiary by way of a share buy-back. This transaction did not change the Company’s percentage ownership of the subsidiary as it was a pro rata return of capital.

1. EBITDA is defined as operating income plus depreciation, impairment expenses and exceptional items.
2. Segmental capex includes the acquisition of intangible assets.
3. Average steel selling prices are calculated as steel sales divided by steel shipments.

1. Includes tubular business.

1. EBITDA is defined as operating income plus depreciation, impairment expenses and exceptional items.
2. Includes tubular business.

Other highlights as of September 30, 2009

1. Gearing²⁵ at September 30, 2009 was 34% as compared to 37% at June 30, 2009.
2. Net debt to average EBITDA ratio based on yearly average EBITDA from January 1, 2004 was 1.3X at September 30, 2009 as compared to 1.4X at June 30, 2009, in line with announced target range of 0.5X to 1.8X.
3. Net debt to EBITDA ratio based on last twelve months EBITDA, which is the ratio used in the financial covenant of Company’s principal financing facilities, was 3.3X at September 30, 2009 as compared to 1.7X at June 30, 2009.

²⁵Gearing is defined as (A) long-term debt, net of current portion, plus payable to banks and current portion of long-term debt, less cash and cash equivalents and restricted cash, divided by (B) total equity.