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

In Q3 the business performed towards the lower end of our expectations against a background of seasonally lower volumes, weakening spot prices and higher costs. Our outlook for Q4 remains cautious as the expected higher input prices continue to work through the business and demand remains muted, though with some regional differences.

Third quarter 2010 news conference (for media)

ArcelorMittal management will host a news conference:

Third quarter 2010 earnings analyst conference call

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

Forward-Looking Statements

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

ArcelorMittal third quarter 2010 results

ArcelorMittal, the world's leading steel company, today announced results for the three months ended September 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, deteriorated to 1.9 for the third quarter of 2010 as compared to 1.8 in the second quarter of 2010. Deterioration in the safety performance of our mining operations, Long Carbon Americas and Europe, and Asia Africa and CIS operations was only partially offset by improvements in the Stainless Steel, Flat Carbon Europe, Flat Carbon Americas and Distribution Solutions operations.

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

ArcelorMittal recorded net income for the three months ended September 30, 2010 of $1.4 billion, or $0.89 per share, as compared with net income of $1.7 billion, or $1.13 per share, for the three months ended June 30, 2010, and net income of $0.9 billion, or $0.60 per share, for the three months ended September 30, 2009.

Total steel shipments for the three months ended September 30, 2010 were 21.0 million metric tonnes as compared with 22.8 million metric tonnes for the three months ended June 30, 2010, and 18.2 million metric tonnes for the three months ended September 30, 2009.

Sales for the three months ended September 30, 2010 declined 3% to $21.0 billion as compared with $21.7 billion for the three months ended June 30, 2010, and were up 30% as compared with $16.2 billion for the three months ended September 30, 2009. Sales were lower during the third quarter of 2010 as compared to the second quarter of 2010 due to seasonally lower volumes (-8%), partly offset by higher average steel selling prices (+4%).

Operating income for the three months ended September 30, 2010 was $1.1 billion, as compared with $1.7 billion for the three months ended June 30, 2010 and $0.3 billion for the three months ended September 30, 2009.

Depreciation expense remained flat at $1.2 billion for the three months ended September 30, 2010 as compared with each of the three months ended June 30, 2010 and September 30, 2009, respectively.

Impairment cost for the three months ended September 30, 2010 was $26 million relating to impairment of a pickling line in Liege, Belgium. 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 occurred in July 2010. Impairment cost for the three months ended September 30, 2009 was $62 million, and resulted from the impairment of ArcelorMittal Galati's coke oven assets.

Operating performance for the three months ended September 30, 2010 included a non-cash gain of $85 million relating to unwinding of hedges on raw material purchases as compared to a $92 million gain recorded in the three months ended June 30, 2010.

Income from equity method investments and other income for the three months ended September 30, 2010 was $108 million, as compared to $183 million and $99 million for the three months ended June 30, 2010 and September 30, 2009, respectively. Income from equity method investments decreased during the third quarter of 2010 primarily as a result of declines in the operating performance of our Chinese investees.

Net interest expense (including interest expense and interest income) increased to $378 million for the three months ended September 30, 2010 from $308 million for the three months ended June 30, 2010, primarily due to the impact of exchange rate fluctuations and additional interest on account of a new bond issuance during the quarter. Net interest expense for the three months ended September 30, 2009 was $387 million.

During the three months ended September 30, 2010, the Company also recorded a financial gain of $24 million, as compared to a $555 million gain in the second quarter of 2010 primarily as a result of mark-to-market adjustments relating to its convertible bonds issued in 2009. The gain was lower in the most recent quarter due to the fact that the euro convertible bond varied insignificantly . During the three months ended September 30, 2009, the Company has recorded a loss of $110 million as a result of this mark-to-market adjustment.

Foreign exchange and other net financing costs[5] for the three months ended September 30, 2010 amounted to $27 million as compared to $479 million for the three months ended June 30, 2010. The primary factor contributing to the lower expenses in the most recent quarter was the effect of US dollar depreciation on deferred tax assets held in euros which contributed to a net foreign exchange gain of $193 million (in the second quarter foreign exchange was a loss of $214 million). Foreign exchange and other net financing gains for the three months ended September 30, 2009 had amounted to $106 million.

Gains related to the fair value of other derivative instruments for the three months ended September 30, 2010 amounted to $16 million, as compared with gains of $34 million and $6 million for the three months ended June 30, 2010 and September 30, 2009, respectively.

ArcelorMittal recorded an income tax benefit of $566 million for the three months ended September 30, 2010, as compared to an income tax benefit of $75 million for the three months ended June 30, 2010. The income tax benefit for the three months ended September 30, 2009 was $888 million.

Profits attributable to non-controlling interests for the three months ended September 30, 2010 were $16 million as compared with $79 million and $18 million for the three months ended June 30, 2010 and September 30, 2009, respectively. Third quarter profits attributable to non-controlling interests were lower primarily on account of a significant reduction in income from South African operations.

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 September 30, 2010 as compared to the three months ended June 30, 2010

Flat Carbon Americas crude steel production remained flat at 5.9 million tonnes for the three months ended September 30, 2010 and June 30, 2010, respectively.

Shipments for the third quarter of 2010 were 5.0 million tonnes, a decline of 7% as compared to 5.3 million tonnes for the three months ended June 30, 2010. The decline was due to a slow-down in buying by distribution centers in North America, a construction slow-down in western Canada, and lower demand from distributors and lower exports from Brazil.

Sales in the Flat Carbon Americas segment were $4.8 billion for the three months ended September 30, 2010, a decrease of 8% as compared to $5.1 billion for the three months ended June 30, 2010. Sales declined primarily due to lower steel shipments (-7%) offset in part by higher average steel selling prices (+2%).

EBITDA declined to $771 million, with EBITDA/tonne decreasing by $46/tonne to $155/tonne. EBITDA declined in the quarter due to lower volumes as discussed above, higher input costs and lower income from mining operations.

Flat Carbon Europe crude steel production amounted to 7.1 million tonnes for the three months ended September 30, 2010, a decline of 16% as compared to 8.5 million tonnes for the three months ended June 30, 2010 due mainly to a seasonal slowdown.

Shipments for the three months ended September 30, 2010 were 6.5 million tonnes, a decline of 14% as compared to 7.5 million tonnes for the three months ended June 30, 2010 also mainly due to the seasonal slowdown.

Sales in the Flat Carbon Europe segment were $6.3 billion for the three months ended September 30, 2010 a decrease of 5% as compared to $6.6 billion for the three months ended June 30, 2010. Sales declined primarily due to lower steel shipments (-14%) partly offset by higher average steel selling prices (+10%).

EBITDA for the three months ended September 30, 2010 was $476 million, a 14% decline as compared to $555 million for the three months ended June 30, 2010, primarily due to lower volumes and an increase in input costs partly offset by an increase in average steel selling prices. EBITDA and operating results for the three months ended September 30, 2010 and June 30, 2010 included a non-cash gain relating to the unwinding of hedges on raw material purchases of $85 million and $92 million, respectively. EBITDA/tonne remained largely flat in the third quarter of 2010 at $73/tonne, as compared to $74/tonne in the second quarter of 2010.

Long Carbon Americas and Europe crude steel production reached 5.5 million tonnes for the three months ended September 30, 2010, a decrease of 9% as compared to 6.0 million tonnes for the three months ended June 30, 2010 primarily due to seasonal slowdown in Europe.

Shipments for the three months ended September 30, 2010 were 5.8 million tonnes, a decline of 4% as compared to 6.0 million tonnes for the three months ended June 30, 2010 due to the seasonal slowdown in Europe.

Sales in the Long Carbon Americas and Europe segment were $5.6 billion for the three months ended September 30, 2010, basically flat as compared to $5.5 billion for the three months ended June 30, 2010. Overall higher average steel selling prices (+3%) were offset by lower steel shipments (-4%).

EBITDA for the three months ended September 30, 2010 was $633 million, a 10% decline as compared to $704 million for the three months ended June 30, 2010. The third quarter of 2010 EBITDA included $67 million relating to income associated with the revaluation of certain forestry assets. During the third quarter of 2010, EBITDA/tonne decreased by $8/tonne (-7%) to $110/tonne as compared to $118/tonne in the second quarter of 2010. Operating performance was weaker in European operations due to the seasonal slowdown as well as higher costs at the Company's integrated steel making facilities.

AACIS segment crude steel production was 3.7 million tonnes for the three months ended September 30, 2010, a decrease of 4% as compared to 3.9 million tonnes for the three months ended June 30, 2010 due mainly to weaker demand.

Shipments for the three months ended September 30, 2010 were 3.3 million tonnes, a decline of 4% as compared to 3.4 million tonnes for the three months ended June 30, 2010 due mainly to weak demand in South Africa.

Sales in the AACIS segment remained flat at $2.6 billion for the three months ended September 30, 2010 and for the three months ended June 30, 2010. Average steel selling prices were slightly higher and this was offset by lower shipments.

EBITDA for the three months ended September 30, 2010 was $360 million, 25% lower as compared to $483 million for three months ended June 30, 2010. During the third quarter of 2010, EBITDA/tonne decreased by $32/tonne (-22%) to $110/tonne as compared to $142/tonne in the second quarter of 2010. Operating performance declined compared with the second quarter of 2010, primarily due to the deterioration in our South African operations.

Stainless Steel segment crude steel production reached 455 thousand tonnes for the three months ended September 30, 2010, a decrease of 23% as compared to 588 thousand tonnes for the three months ended June 30, 2010, due to lower demand and in particular due to the seasonal slowdown in Europe.

Shipments for the three months ended September 30, 2010 were 442 thousand tonnes, a decline of 8% as compared to 482 thousand tonnes for the three months ended June 30, 2010 due to seasonal slowdown in Europe.

Sales in the Stainless Steel segment were $1.4 billion for the three months ended September 30, 2010, a decrease of 12% as compared to $1.5 billion for the three months ended June 30, 2010. Sales declined primarily due to lower steel shipments (-8%) as discussed above and lower average steel selling prices (-5%) due to a weak market environment and pressure from imports.

EBITDA for the three months September 30, 2010 was $103 million, 46% lower as compared to $191 million for the three months ended June 30, 2010 due to lower shipments and the lower selling prices resulting from the weak market environment and seasonal slowdown in Europe. EBITDA in the third quarter of 2010 included $35 million of income associated with revaluation of certain forestry assets. EBITDA/tonne decreased by $163/tonne (-41%) to $233/tonne as compared to $396/tonne in the second quarter of 2010.

Shipments for the three months ended September 30, 2010 was 4.5 million tonnes, a reduction of 3% as compared to 4.6 million tonnes for the three months ended June 30, 2010 primarily due to seasonal slowdown in Europe.

Sales in the Distribution Solutions segment remained flat at $4.0 billion for the three months ended September 30, 2010 as compared to the three months ended June 30, 2010.

EBITDA for the three months September 30, 2010 was $126 million, 33% lower as compared to $187 million for the three months ended June 30, 2010 due to lower shipments due to weaker market conditions and the seasonal slowdown in Europe.

Liquidity and Capital Resources

For the three months ended September 30, 2010, net cash provided by operating activities was $0.8 billion, compared to $0.4 billion for the three months ended June 30, 2010. The cash flow from operating activities for the third quarter of 2010 included $1.1 billion of investment in operating working capital as compared to $2.3 billion in the second quarter of 2010. With decreased activity levels during the third quarter of 2010, rotation days[8] increased to 75 days from 65 days in the second quarter of 2010. The increase in rotation days during the third quarter was primarily due to higher inventory days. Cash provided in other operating activities for the three months ended September 30, 2010 amounted to $73 million as compared to cash used in other operating activities for the three months ended June 30, 2010 of $27 million.

Net cash used in investing activities for the three months ended September 30, 2010 remained flat at $0.8 billion, as compared to the three months ended June 30, 2010. During the third quarter of 2010 the Company subscribed to a capital increase in MacArthur Coal Ltd. for $65 million and paid $51 million in connection with the acquisition of minority interests in Ostrava (a transaction concluded in 2009). Capital expenditures increased to $0.8 billion for the three months ended September 30, 2010 as compared to $0.6 billion for the three months ended June 30, 2010. The Company expects capital expenditures to total approximately $3.7 billion in 2010.

During the third quarter of 2010, the Company paid dividends amounting to $334 million as compared to $309 million in the second quarter of 2010. Dividends paid during the third quarter of 2010 include $283 million in the parent company and $51 million paid to minority shareholders.

At September 30, 2010, the Company's cash and cash equivalents (including restricted cash and short-term investments) amounted to $3.5 billion as compared to $2.6 billion at June 30, 2010. During the quarter, net debt increased by $1.8 billion to $22.1 billion as compared with $20.3 billion at June 30, 2010 and operating working capital (defined as inventory plus trade accounts receivables less trade accounts payables) increased by $1.9 billion to $16.0 billion as compared to $14.1 billion at June 30, 2010, primarily due to higher inventory and foreign exchange impact.

The Company had liquidity of $14.9[9] billion at September 30, 2010, compared with liquidity of $12.8 billion at June 30, 2010, consisting of cash and cash equivalents (including restricted cash and short-term investments) of $3.5 billion and $11.4 billion of available credit lines. During the third quarter of 2010, the Company completed issuances of USD 2.5 billion principal amount of US dollar denominated notes, consisting of USD 1 billion of 3.75% notes due 2015, USD 1 billion of 5.25% notes due 2020, as well as a USD 0.5 billion reopening of its 7% notes due 2039.

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

At the end of the third quarter of 2010, the Company's annualized sustainable savings remained flat at $3.0 billion as compared to $3.0 billion as of the end of June 30, 2010. The Company maintains its target to reach management gains of $5.0 billion of sustainable SG&A, fixed cost reductions and continuous improvement by end of 2012. The Company has also achieved $4.4 billion ($2.6 billion at a constant dollar[10]) of annualized temporary fixed cost savings in the third quarter of 2010 resulting from industrial optimization in response to lower demand. During the second quarter of 2010, the Company achieved $3.9 billion ($1.8 billion at a constant dollar[10]) of annualized temporary fixed cost savings.

Capacity utilization decreased to approximately 71% in the third quarter of 2010, as compared to approximately 78% in the second quarter of 2010 due to seasonal slowdown primarily in Europe.

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

Fourth quarter of 2010 outlook

Fourth quarter 2010 EBITDA is expected to be approximately $1.5 – $1.9 billion. Shipments are expected to improve slightly; average steel selling prices and EBITDA/tonne are expected to decline, while capacity utilization levels are expected to remain flat. Operating costs are expected to increase as compared to the third quarter of 2010 due to higher raw material prices.

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]The VAME and VAMA projects forecast completion date are still to be determined.
[7]As from January 1, 2010 the Steel Solutions and Services segment has been renamed ArcelorMittal Distribution Solutions (AMDS).
[8]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.
[9]Includes back-up lines for the commercial paper program of approximately $2.7 billion (euro2 billion).
[10]At average 2008 exchange rate.
[11]During the nine months ended September 30, 2009 the Company recorded exceptional charges amounting to $2.4 billion primarily related to write-downs of inventory and provisions for workforce reductions.
[12]Total of all finished production of fines, concentrate, pellets and lumps (includes share of production and strategic long-term contracts).
[13]ArcelorMittal Distribution Solutions shipments are eliminated in consolidation as they primarily represent shipments originating from other ArcelorMittal operating subsidiaries.
[14]In accordance with IFRS the Company has adjusted the financial information for the three month and nine month period ended September 30, 2009 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.
[15]Changes in operating working capital are defined as trade accounts receivable plus inventories less trade accounts payable.
[16]Refers to the acquisition of 3.57% non-controlling interest in Ostrava and for a minority buy out in ZKZ Poland, which according to IAS 27 as revised in 2008 is presented as financing activities.
[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 1.3648 as at September 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.