Arcelor Mittal Reports Pro Forma Full Year and Fourth Quarter 2006 Results.LUXEMBOURG Luxembourg, province, Belgium Luxembourg, Du. Luxemburg, province (1991 pop. 232,813), 1,706 sq mi (4,419 sq km), SE Belgium, in the Ardennes, bordering on the Grand Duchy of Luxembourg in the east and on France in the south. -- Mittal Steel Company Mittal Steel Company N.V. (Euronext: MT, NYSE: MT) was the world's largest steel producer by volume, and also the largest in turnover. Company is now part of Arcelor Mittal. CEO Lakshmi Mittal's family owned 88% of the company. N.V. ("Arcelor Mittal  It has been suggested that and be merged into this article or section. ", "Mittal Mittal is a gotra of the Agrawal community, often used as a last name. It may refer to:
New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of : MT; Amsterdam Amsterdam, city, Netherlands Amsterdam (ăm`stərdăm', Dutch ämstərdäm`), city (1994 pop. 724,096), constitutional capital and largest city of the Kingdom of the Netherlands, North Holland prov. : MT; Madrid Madrid (mədrĭd`, Span. mäthhrēth`), city (1990 pop. 3,120,732), capital of Spain and of Madrid prov., central Spain, and the focus of its own autonomous region, on the Manzanares River. : MTS (1) See Microsoft Transaction Server. (2) (Modular TV System) The stereo channel added to the NTSC standard, which includes the SAP audio channel for special use. 1. MTS - Message Transport System. 2. ; Paris: MTP (1) (Message Transfer Part) See SS7. (2) (Media Transfer Protocol) A Microsoft enhancement to the picture transfer protocol (PTP), starting with Windows Media Player 10 in Windows XP. ; Brussels Brussels (brŭ`səlz), Fr. Bruxelles, Du. Brussel, city and region (1995 pop. 948,122), 63 sq mi (162 sq km), capital of Belgium, central Belgium, on the Senne River and at the junction of the Charleroi-Brussels and Willebroek : MTBL MTBL Mean Time Between Data Loss ; Luxembourg: MT), the world's largest and most global steel company, today announced results for the three and twelve months ended December December: see month. 31, 2006. 2006 and Q406 Pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma highlights (on the basis of IFRS IFRS International Financial Reporting Standard(s) IFRS Inter Frame Relay Service IFRS Indiana Facilities Registry System , amounts US$ and Euros(1)): * Strong pro forma results in line with guidance * Full year crude steel production and shipments of 118 million tonnes and 110.5 million tonnes, respectively * 2006 pro forma EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become of $15.3 billion, ahead of 2005 pro forma * $4.3 billion cash generated from operations in Q406 and strong net debt reduction in Q406 of $2.3 billion over Q306 * Distribution of $2.4 billion including a $1.8 billion cash dividend and $590 million share buy-back - Annual base dividend policy confirmed Q4 Highlights (on the basis of IFRS, amounts US$ and Euros(1)): [TABLE OMITTED] [TABLE OMITTED] 1) US Dollars have been translated into Euros using an average exchange rate of (US$/Euro) of 1.2893, 1.2748, 1.2558 and 1.2443 for Q4 2006, Q3 2006, 12M 2006 and 2005, respectively. 2) Some intercompany shipments are not eliminated 3) EBITDA is defined as operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. plus depreciation Commenting, Lakshmi Lakshmi: see Hinduism. Lakshmi or Laksmi Hindu and Jain goddess of wealth and good fortune. The consort of Vishnu, she is said to have taken different forms to be with him in each of his incarnations. N. Mittal, President and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. , Arcelor Mittal, said: "I am pleased to report a strong performance in 2006 for Arcelor Mittal, with strong cash flow from operations Cash flow from operations A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses and EBITDA in line with guidance. This strong set of pro forma numbers clearly demonstrates the benefits of the merger between Arcelor This article appears to contradict the article Arcelor Mittal. Please see discussion on the linked talk page. Arcelor S.A. (Euronext: LOR) is the world's largest steel producer in terms of turnover and the second largest in terms of steel output, with a turnover of and Mittal Steel. On a pro forma basis, Arcelor Mittal has now reported consistent EBITDA of approximately US$15 billion for three years, illustrating how our diversified diversified (di·verˑ·s geographic and product profile is helping deliver sustainable results. The integration of Mittal Steel with all of its recent acquisitions is progressing well, and we are on track to deliver anticipated synergies. Simultaneously, we are continuing to execute our strategy and further build on our market leading position, as seen by our recent acquisitions and expansion plans both in steel and mining. Looking forward, the market is stable and we are anticipating performance for the first quarter 2007 to be in-line In-line Used in the context of general equities. (1) An order or market in a specific security within the inside market; 2) any announcement (earnings) that adheres closely to Wall Street analysts' expectations. with fourth quarter 2006 levels."
FOURTH QUARTER 2006 NEWS CONFERENCE
Arcelor Mittal management will host a news conference today at:
Date: Wednesday, February 21st 2007
Time: 06.00 am New York Time / 11.00 am London Time / 12.00 am CET
The dial in number:
International number: +44 207 0705 579
UK: 0207 0705 579
USA: +1 866 432 7186
Replay Numbers:
International number: +44 208 196 1998
UK: 0208 196 1998
USA: +1 866 5831039
Access Code for each language on the replay:
English 069434
Spanish 181439
French 414790
The news conference will be available via a live video webcast on www.arcelormittal.com. It will take place in Luxembourg, 19, avenue de la Liberte. FOURTH QUARTER 2006 EARNINGS ANALYST CONFERENCE CALL Additionally, Arcelor Mittal management will host a conference call for members of the investment community to discuss the fourth quarter 2006 and full year 2006 financial performance of Arcelor Mittal at 9.30am New York time / 2.30pm London London, city, Canada London, city (1991 pop. 303,165), SE Ont., Canada, on the Thames River. The site was chosen in 1792 by Governor Simcoe to be the capital of Upper Canada, but York was made capital instead. London was settled in 1826. time / 3.30pm CET CET abbr. Central European Time CET Central European Time CET n abbr (= Central European Time) → hora de Europa central CET abbr on Wednesday Wednesday: see week. , February February: see month. 21st 2007. The conference call will include a brief question and answer session with senior management. The conference call information is as follows:
Dial in access numbers will be the following:
International: +44 208 3222 638
UK: 0208 3222 638
USA: +1 866 432 7175
A replay of the conference call will be available for one week by dialing (access code 634819):
International: +44 208 196 1998
UK: 0208 196 1998
USA: +1 866 443 7118
The presentation will be available via a live video webcast on www.arcelormittal.com Forward-Looking Statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. This document may contain forward-looking information and statements about Mittal Steel Company N.V. including Arcelor S.A. 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 Arcelor Mittal's management believes that the expectations reflected in such forward-looking statements are reasonable, investors and holders of Mittal Steel'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 Mittal Steel, 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 Netherlands Authority for the Financial Markets and the Securities and Exchange Commission ("SEC") made or to be made by Mittal Steel, including (in the latter case) on Form 20-F. Mittal Steel undertakes no obligation to publicly update its forward-looking statements, whether as a result of new information, future events, or otherwise. The request for registration of the offer ("Offer") by Mittal Steel Company N.V. for the shares of Arcelor Brasil S.A. is subject to analysis and approval by the Brazilian Comissao de Valores Mobiliarios ("CVM") and its features are subject to adjustment until such registration is obtained. This document constitutes neither an offer to acquire Arcelor Brasil S.A. securities nor an offer of securities in any jurisdiction. In particular, this document does not constitute an offer of securities for distribution or sale in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. . Securities may not be offered, sold or distributed in the United States absent registration or an exemption from registration under the U.S Securities Act of 1933. Arcelor Mittal does not intend to register securities or conduct a public offering in the United States. Any offer that is made will be made to all holders of shares of Arcelor Brasil S.A. located in Brazil. In addition, holders of shares of Arcelor Brasil S.A. located outside of Brazil would only be allowed to participate in the Offer if such holders are permitted to do so under the laws and regulations of the jurisdiction in which they are located. For further information, visit our web site: www.arcelormittal.com. ARCELOR MITTAL PRO FORMA FULL YEAR AND FOURTH QUARTER 2006 RESULTS Arcelor Mittal, the world's largest and most global steel company, today announced pro forma information for the three and twelve months ended December 31, 2006. The pro forma information reflects the combined business as if the acquisition of Arcelor and its subsidiaries had taken place at the beginning of the period presented. Purchase price allocation The apportionment or designation of an item for a specific purpose or to a particular place. In the law of trusts, the allocation of cash dividends earned by a stock that makes up the principal of a trust for a beneficiary usually means that the dividends will be treated as The Company is in the process of allocating the purchase price for its acquisition of Arcelor. It should be noted that all of the purchase price allocation adjustments made and reflected in the Company's December 31, 2006, financials (Income statement and Balance sheet) are still preliminary and could materially change as a result of the finalization Writing the table of contents (TOC) on a recordable CD or DVD disc. The finalization process ensures that the disc can be played back on most CD and DVD players. See disc-at-once. of the purchase price allocation process (see Appendix 3). It is expected that this allocation will be finalized See finalization. in Q2 2007. The Company recorded the following significant preliminary purchase price adjustments: Inventory Inventory was increased by $1.1 billion as of the acquisition date (August 1, 2006). The pro forma income statement excludes the effects of this adjustment. Tangible fixed assets fixed assets npl → activo sg fijo fixed assets npl → immobilisations fpl fixed assets fix npl → The Company is being assisted by an independent appraisal firm in valuing the tangible fixed assets acquired and assessing the remaining useful lives of these assets. Based on the preliminary estimates, the Company increased the value of the tangible fixed assets acquired by $12.3 billion. The Company also assessed the remaining useful lives of these assets and concluded that the assets acquired have a longer average remaining useful life than previously estimated by Arcelor. The Company therefore estimates, on a preliminary basis, the annual additional depreciation charge to be insignificant. Goodwill As a result of the preliminary purchase price allocation, the Company currently estimates goodwill related to the acquisition of Arcelor at $6.6 billion. This amount is still preliminary and could materially change as a result of the finalization of the purchase price allocation process. Pro forma results twelve months ended December 31, 2006 versus twelve months ended December 31, 2005 Arcelor Mittal pro forma net income for the twelve months ended December 31, 2006, was $8.0 billion, or $5.76 per share, as compared with pro forma net income of $8.3 billion, or $5.97 per share for the twelve months ended December 31, 2005. Pro forma sales and operating income for the twelve months ended December 31, 2006, were $88.6 billion and $11.8 billion, respectively, as compared with $80.2 billion and $11.6 billion, respectively, for the twelve months ended December 31, 2005. Total steel shipments for the twelve months ended December 31, 2006, were 110.5 million metric tonnes as compared with 102.9 million metric tonnes for the twelve months ended December 31, 2005. Pro forma depreciation for the twelve months ended December 31, 2006, increased to $3.4 billion as compared with $3.3 billion for the twelve months ended December 31, 2005. Pro forma net financing costs Net financing cost Also called the cost of carry or, simply carry, the difference between the cost of financing the purchase of an asset and the asset's cash yield. Positive carry means that the yield earned is greater than the financing cost; negative carry means that the for the twelve months ended December 31, 2006, remained flat as compared with $1.3 billion for the twelve months ended December 31, 2005. Pro forma net financing costs for the twelve months ended December 31, 2006, include a charge of $367 million OCEANES1 and a gain of $450 million resulting from a Canadian dollar Noun 1. Canadian dollar - the basic unit of money in Canada; "the Canadian dollar has the image of loon on one side of the coin" loonie dollar - the basic monetary unit in many countries; equal to 100 cents swap. Pro forma income tax expense for the twelve months ended December 31, 2006, increased to $1.7 billion as compared with $1.4 billion for the twelve months ended December 31, 2005. The effective tax rate for the twelve months ended December 31, 2006, was 14.9% as compared with 12.6% for the twelve months ended December 31, 2005. Pro forma minority interest for the twelve months ended December 31, 2006, remained flat at $1.5 billion as compared with the twelve months ended December 31, 2005. Pro forma results three months ended December 31, 2006 versus three months ended September 30, 2006 Arcelor Mittal pro forma net income for the three months ended December 31, 2006, was $2.4 billion, or $1.72 per share, as compared with pro forma net income of $2.2 billion, or $1.58 per share for the three months ended September 30, 2006. Pro forma sales and operating income for the three months ended December 31, 2006, were $23.2 billion and $3.2 billion, respectively, as compared with $22.1 billion and $3.4 billion, respectively, for the three months ended September 30, 2006. Total steel shipments for the three months ended December 31, 2006, were 26.7 million metric tonnes as compared with 26.9 million metric tonnes for the three months ended September 30, 2006. Pro forma depreciation for the three months ended December 31, 2006, decreased to $875 million as compared with $910 million for the three months ended September 30, 2006. Pro forma net financing costs for the three months ended December 31, 2006, was $4 million income as compared with $352 million expense for the three months ended September 30, 2006, primarily due to a gain resulting from a Canadian dollar swap in the three months ended December 31, 2006. Pro forma income tax expense for the three months ended December 31, 2006, decreased to $642 million as compared with $669 million for the three months ended September 30, 2006. The effective tax rate for the three months ended December 31, 2006, was 18.6% as compared with 20.5% for three months ended September 30, 2006. Pro forma minority interest for the three months ended December 31, 2006, increased marginally to $443 million as compared with $420 million for the three months ended September 30, 2006. Pro-forma scope The pro forma results for 2006 and 2005 include the results of the following acquisitions as if the acquisitions were made on January 1, 2006 and January 1, 2005 respectively: * the acquisition of Arcelor on August 1, 2006; * the acquisition of certain subsidiaries of Stelco on January 30, 2006; * the acquisition of Mittal Steel Kryviy Rih on November 26, 2005; and * the acquisition of Mittal Steel USA ISG ISG Iraq Study Group ISG Iraq Survey Group ISG International Steel Group ISG Integrated Security Gateway ISG Information Systems Group ISG Information Systems Group (IBM) ISG Integrated Starter/Generator Inc. on April 15, 2005. Furthermore, the results of Arcelor include the following significant acquisitions as if those acquisitions were made on January 1, 2006 and January 1, 2005 respectively: * the acquisition of Sonasid on June 1, 2006; * the acquisition of Dofasco on March 1, 2006; and * the acquisition of Acesita on October 1, 2005. Analysis of operations Q406 v Q306 Flat Carbon Americas Pro forma total steel shipments in the Flat Carbon Americas segment were 6.7 million metric tonnes in the three months ended December 31, 2006, as compared with 7.4 million metric tonnes for the three months ended September 30, 2006. Pro forma sales were lower at $5.1 billion for the three months ended December 31, 2006, as compared with $5.4 billion for the three months ended September 30, 2006. Pro forma operating income remained flat at $0.8 billion for the three months ended December 31, 2006, as compared with the three months ended September 30, 2006. Operating results for the three months ended December 31, 2006, as compared with the three months ended September 2006, were impacted mostly by lower shipments, particularly in North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. , due to a slow down in the market and a reduction of spot market orders as service centers experienced higher inventories. Flat Carbon Europe Pro forma total steel shipments in the Flat Carbon Europe segment were 8.4 million metric tonnes in the three months ended December 31, 2006, as compared with 7.7 million metric tonnes for the three months ended September 30, 2006. Pro forma sales were higher at $7.6 billion for the three months ended December 31, 2006, as compared with $6.5 billion for the three months ended September 30, 2006. Pro forma operating income increased to $749 million for the three months ended December 31, 2006, as compared with $672 million for the three months ended September 30, 2006. Operating results for the three months ended December 31, 2006, as compared to three months ended September 30, 2006, increased due to improved volumes and selling prices, offset partly by higher input costs. Long Carbon Americas and Europe Pro forma total steel shipments in the Long Carbon Americas and Europe segment were slightly higher at 6.1 million metric tonnes in the three months ended December 31, 2006, as compared with 6.0 million metric tonnes for the three months ended September 30, 2006. Pro forma sales were higher at $4.6 billion for the three months ended December 31, 2006, as compared with $4.2 billion for the three months ended September 30, 2006. Pro forma operating income remained flat at $0.8 billion for the three months ended December 31, 2006, as compared with the three months ended September 30, 2006. Operating results for the three months ended December 31, 2006, as compared with the three months ended September 30, 2006, remained flat as higher volumes and selling prices were offset by increased input costs. Asia Africa and CIS Cis (sĭs), same as Kish (1.) (1) (CompuServe Information Service) See CompuServe. (2) (Card Information S ("AACIS AACIS American Association for Collegiate Independent Study (conference) ") Pro forma total steel shipments in the AACIS segment were lower at 4.9 million metric tonnes for the three months ended December 31, 2006, as compared with 5.4 million metric tonnes for the three months ended September 30, 2006. Pro forma sales were lower at $3.5 billion for the three months ended December 31, 2006, as compared with $3.8 billion for the three months ended September 30, 2006. Pro forma operating income was lower at $692 million for the three months ended December 31, 2006, as compared with $845 million for the three months ended September 30, 2006. Operating results for three months ended December 31, 2006, were lower as compared to the three months ended September 30, 2006, primarily due to lower volumes (particularly in the Ukraine and South African operations), lower selling prices and marginally higher input costs. Stainless Steel stainless steel: see steel. stainless steel Any of a family of alloy steels usually containing 10–30% chromium. The presence of chromium, together with low carbon content, gives remarkable resistance to corrosion and heat. Pro forma total steel shipments in the Stainless Steel segment were marginally higher at 543 thousand metric tonnes in the three months ended December 31, 2006, as compared with 481 thousand metric tonnes for the three months ended September 30, 2006. Pro forma sales were higher at $2.2 billion for the three months ended December 31, 2006, as compared with $1.7 billion for the three months ended September 30, 2006. Pro forma operating income was higher at $344 million for the three months ended December 31, 2006, as compared with $183 million for the three months ended September 30, 2006. Results for the Stainless Steel segment improved for the three months ended December 31, 2006, as compared to the three months ended September 30, 2006, primarily due to price and volume increases. AM3S AM3S Arcelor Mittal Steel Solutions and Services (2) Pro forma total steel shipments in the AM3S segment were higher at 3.7 million metric tonnes in the three months ended December 31, 2006, as compared with 3.2 million metric tonnes for the three months ended September 30, 2006. Pro forma sales in the AM3S segment were higher at $3.3 billion in the three months ended December 31, 2006, as compared with $2.9 billion for the three months ended September 30, 2006. Pro forma operating income was lower at $128 million for the three months ended December 31, 2006, as compared with $151 million for the three months ended September 30, 2006. The results for the three months ended December 31, 2006, as compared with the three months ended September 30, 2006, were impacted by lower selling prices. Liquidity and Capital Resources The liquidity position of the Company remains stable. As of December 31, 2006, the Company's cash and cash equivalents including restricted cash and short term investments were $6.1 billion. The net debt, which includes long-term debt Long-Term Debt Loans and financial obligations lasting over one year. Notes: For example debts obligations such as bonds and notes which have maturities greater than one year would be considered long-term debt. plus short-term debt Short-term debt Debt obligations, recorded as current liabilities, requiring payment within the year. less cash and cash equivalents, restricted cash and short-term Short-term Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. investments, was reduced by $2.3 billion to $20.4 billion as compared to September 30, 2006. In addition, the Company, including its operating subsidiaries An operating subsidiary is a business term frequently used within the United States railroad industry. In the case of a railroad, it refers to a company that is a subsidiary but operates with its own identity and rolling stock. , had available borrowing capacity of $9.0 billion at December 31, 2006, as compared to $5.9 billion at September 30, 2006. On November 30, 2006, Arcelor Mittal entered into a credit facility, which is comprised of a [euro]12 billion term loan and a [euro]5 billion revolving credit Revolving Credit A line of credit where the customer pays a commitment fee and is then allowed to use the funds when they are needed. It is usually used for operating purposes, fluctuating each month depending on the customers current cash flow needs. facility (the "[euro]17 billion facility"). The proceeds of the term loan were used to refinance Refinance 1. When a business or person revises their payment schedule for repaying debt. 2. Replacing an older loan with a new loan offering better terms. Notes: When a business refinances they typically extend the maturity date. Mittal Steel's [euro]3 billion refinancing Refinancing An extension and/or increase in amount of existing debt. facility, [euro]5 billion acquisition facility and [euro]2.8 billion bridge facility, along with Arcelor's [euro]4 billion term loan facility and a [euro]3 billion revolving credit facility. The [euro]5 billion revolving credit facility has remained unutilized and is fully available to Arcelor Mittal, the proceeds of which may be used for general corporate purposes. The [euro]17 billion facility is unsecured Unsecured A loan or equity interest that is given without any guarantee of payment, performance, satisfaction or opportunity for return from the recipient. No property, interest or security is used as collateral in either a guarantee or a pledge. and provides for loans bearing interest at LIBOR LIBOR See: London Interbank Offered Rate LIBOR See London interbank offered rate (LIBOR). or EURIBOR EURIBOR Europe Interbank Offered Rate (based on the borrowing currency) plus a margin based on a ratings grid. Arcelor Mittal's [euro]3 billion refinancing facility, [euro]5 billion credit facility and [euro]2.8 billion bridge facility were repaid and subsequently cancelled on December 14, 2006. Arcelor's [euro]4 billion term loan was repaid and subsequently cancelled on December 14, 2006 and its [euro]3 billion facility was cancelled on December 5, 2006. On September 27, 2006, Mittal Steel announced that its board of directors agreed upon Adj. 1. agreed upon - constituted or contracted by stipulation or agreement; "stipulatory obligations" stipulatory noncontroversial, uncontroversial - not likely to arouse controversy a new dividend and cash distribution policy. The new policy will be proposed to Mittal Steel's shareholders at the next general meeting. The new policy provides a mechanism that will allow Mittal Steel to honor As a verb, to accept a bill of exchange, or to pay a note, check, or accepted bill, at maturity. To pay or to accept and pay, or, where a credit so engages, to purchase or discount a draft complying with the terms of the draft. its commitment of returning 30% of net income to shareholders every year through an annual base dividend, supplemented by additional share buy-backs. Mittal Steel's board of directors proposed an annual base dividend of $1.30 (approximately 1 Euro at the current exchange rate). This base dividend has been designed to guarantee a minimum payout pay·out n. 1. The act or an instance of paying out. 2. A percentage of corporate earnings that is paid as dividends to shareholders. per year and would rise in order to reflect the underlying growth of Mittal Steel. Payment of this dividend will be on a quarterly basis. In addition to this dividend, Arcelor Mittal's board of directors proposed a share buy-back program tailored to match the 30% distribution pay-out commitment. As a consequence, the sum of the annual base dividend and the share buy-back program each year will represent 30% of annual net income. Based on the pro forma annual net earnings announced for the twelve months ended December 31, 2006, the group will implement a $590 million share buy-back and cash dividend of approximately $1.8 billion. This new distribution policy will be implemented as of January 1, 2007 for the 2006 results, subject to shareholder approval. On February 2, 2007, Arcelor Mittal declared an interim dividend of $0.325 per share. The cash dividend will be payable on March 15, 2007 to Euronext Amsterdam, Euronext Brussels, Euronext Paris Euronext Paris is France's securities market, formerly known as the Paris Bourse, which merged with the Amsterdam and Brussels exchanges in September 2000 to form Euronext NV, which is the second largest exchange in Europe behind the London Stock Exchange. , Luxembourg Stock Exchange The Luxembourg Stock Exchange (French: Bourse de Luxembourg) is a stock exchange based in Luxembourg City, in southern Luxembourg. and Spanish Spanish, river, c.150 mi (240 km) long, issuing from Spanish Lake, S Ont., Canada, NW of Sudbury, and flowing generally S through Biskotasi and Agnew lakes to Lake Huron opposite Manitoulin island. There are several hydroelectric stations on the river. Exchanges shareholders ("European European emanating from or pertaining to Europe. European bat lyssavirus see lyssavirus. European beech tree fagussylvaticus. European blastomycosis see cryptococcosis. Shareholders") of record on February 27, 2007, and to NYSE NYSE See: New York Stock Exchange shareholders of record on March 2, 2007. On December 15, 2006 Arcelor Mittal redeemed re·deem tr.v. re·deemed, re·deem·ing, re·deems 1. To recover ownership of by paying a specified sum. 2. To pay off (a promissory note, for example). 3. Arcelor's 3% 2017 bonds convertible and/or exchangeable into new and/or existing Arcelor shares. On December 26, 2006, Fitch Ratings Fitch Ratings An international rating agency for financial institutions, insurance companies, and corporate, sovereign, and municipal debt. Fitch Ratings has headquarters in New York and London and is wholly owned by FIMALAC of Paris. affirmed af·firm v. af·firmed, af·firm·ing, af·firms v.tr. 1. To declare positively or firmly; maintain to be true. 2. To support or uphold the validity of; confirm. v.intr. the Company's Issuer Default and senior unsecured ratings at "BBB BBB A medium grade assigned to a debt obligation by a rating agency to indicate an adequate ability to pay interest and repay principal. However, adverse developments are more likely to impair this ability than would be the case for bonds rated A and above. " and Short-term rating at "F2" and removed the ratings from Rating Watch Negative. Recent Developments As previously reported, on December 22, 2006, ThyssenKrupp AG ThyssenKrupp AG German steel company. The Krupp firm began in 1811 when Friedrich Krupp (1787–1826) founded a steel plant in Essen, and it remained in family hands for a century and a half. initiated summary legal proceedings All actions that are authorized or sanctioned by law and instituted in a court or a tribunal for the acquisition of rights or the enforcement of remedies. against Mittal Steel in the District Court in Rotterdam alleging that Mittal Steel had breached a letter agreement between Mittal Steel and ThyssenKrupp, dated January 26, 2006, with respect to the sale of Dofasco Inc., a North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. steelmaker, to ThyssenKrupp. On January 23, 2007, the District Court in Rotterdam denied ThyssenKrupp's petition for an order. On February 20, 2007 the U.S. Department of Justice ("DOJ (Department Of Justice) The legal arm of the U.S. government that represents the public interest of the United States. It is headed by the Attorney General. ") informed the company that the DOJ has selected the Sparrows Point Sparrows Point is an unincorporated area in Baltimore County, Maryland. It was named for Thomas Sparrow, landowner, and is adjacent to Dundalk, Maryland. It is the site of a very large industrial complex, now in decline, known in the past for steelmaking and shipbuilding. steel mill located near Baltimore Baltimore, city (1990 pop. 736,014), N central Md., surrounded by but politically independent of Baltimore co., on the Patapsco River estuary, an arm of Chesapeake Bay; inc. 1745. Maryland Maryland (mâr`ələnd), one of the Middle Atlantic states of the United States. It is bounded by Delaware and the Atlantic Ocean (E), the District of Columbia (S), Virginia and West Virginia (S, W), and Pennsylvania (N). for divestiture The breakup of AT&T. By federal court order, AT&T divested itself on January 1, 1984 of its 23 operating companies, which became known as the Regional Bell Operating Companies (RBOCs). under the consent decree A settlement of a lawsuit or criminal case in which a person or company agrees to take specific actions without admitting fault or guilt for the situation that led to the lawsuit. A consent decree is a settlement that is contained in a court order. filed by the DOJ in August 2006. The selection of Sparrows Point by the DOJ ends the period during which Arcelor Mittal must hold Dofasco separate from its operations. On September 25, 2006, the Comissao de Valores Mobiliarios ("the CVM"), the Brazilian securities regulator regulator, n the mechanical part of a gas delivery system that controls gas pressure that allows a manageable flow of drug vapor to escape. regulator see reducing valve. , ruled that, as a result of Mittal Steel's acquisition of Arcelor, Mittal Steel was required to carry out a public offer to acquire all the outstanding shares in Arcelor Brasil S.A. not owned by Arcelor or any other affiliate of Mittal Steel. Arcelor Brasil is a majority owned subsidiary of Arcelor. On October 26, 2006, Mittal Steel filed with the CVM a request for registration with respect to such offer, and filed an amended a·mend v. a·mend·ed, a·mend·ing, a·mends v.tr. 1. To change for the better; improve: amended the earlier proposal so as to make it more comprehensive. 2. request on January 11, 2007. As per the amended request for registration filed by Mittal Steel, the value to be offered per Arcelor Brasil share is [euro]12.12 (which may be accepted in the form of cash or a mixture of cash and shares, at the option of the holder), for a total value of approximately [euro]2.6 billion (approximately $3.3 billion) for all Arcelor Brasil shares. On February 12, 2007, the CVM issued a letter stating that, according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. the CVM's interpretation of the applicable rules, the value Mittal Steel should offer per Arcelor Brasil share should be [euro]4.57 in cash and 0.3942 Arcelor Mittal common shares, subject to a number of adjustments. The decision of the CVM is subject to administrative appeal and appeal before the Brazilian courts. Mittal Steel is presently evaluating its options in respect of such decision. On January 30, 2007, Mittal Steel announced its intention to use its trading name Arcelor Mittal on its different stock exchanges listings in order to better reflect the economic reality of the group. On February 14, 2007 Arcelor Mittal signed a joint venture agreement with the Bin Jarallah Group of companies for the design and construction of a seamless tube mill in Saudi Arabia Saudi Arabia (sä  `dē ərā`bēə, sou`–, sô–), officially Kingdom of Saudi Arabia, kingdom (2005 est. pop. . This state of the
art facility will be located in Jubail Industrial City, north of Al
Jubail on the Persian Gulf Persian Gulf, arm of the Arabian Sea, 90,000 sq mi (233,100 sq km), between the Arabian peninsula and Iran, extending c.600 mi (970 km) from the Shatt al Arab delta to the Strait of Hormuz, which links it with the Gulf of Oman. . The mill will have a capacity of 500,000
tonnes per year. Construction is planned to commence at the end of the
first quarter of 2008 and to be completed by the fourth quarter of 2009.
Arcelor Mittal will hold a 51% interest in the company established for
this project, with the Bin Jarallah Group holding the remaining 49%.On March 2, 2007, Arcelor Mittal will be admitted to AEX index The AEX index, derived from Amsterdam Exchange index, is a stock market index composed of Dutch companies that trade on Euronext Amsterdam, formerly known as the Amsterdam Stock Exchange. and the FTSE FTSE A company that specializes in index calculation. Although not part of a stock exchange, co-owners include the London Stock Exchange and the Financial Times. Notes: The FTSE is similar to Standard & Poor's in the United States. 4Good Index Europe indexes. On September, 18, 2006, Arcelor Mittal was admitted to the CAC 40 index CAC 40 index A broad-based index of common stocks composed of 40 of the 100 largest companies listed on the forward segment of the official list of the Paris Bourse. . Outlook for First Quarter 2007 The Company expects first quarter 2007 EBITDA to be between $4.0-4.2 billion. The Company expects overall shipments levels to remain in line with fourth quarter 2006 levels. Flat Carbon Americas profitability is expected to continue to suffer from de-stocking, while performance for Flat Carbon Europe segment to remain positive. The performance of the Long Carbon Americas and Europe is expected to increase. The performance of the Stainless Steel segment is to remain at high levels, while the performance of AM3S and AACIS is expected to remain stable. The Company expects a normalised normalised - normalisation tax rate of approximately 25% for the year. MITTAL STEEL COMPANY N.V. CONSOLIDATED BALANCE SHEETS consolidated balance sheet A balance sheet in which assets and liabilities of a parent company and its controlled subsidiaries are combined, thereby presenting balance sheet items for the parent and its subsidiaries as if they were a single firm. - ACTUAL BASIS [TABLE OMITTED] ARCELOR MITTAL CONSOLIDATED STATEMENTS OF INCOME - PRO FORMA [TABLE OMITTED] 1. The information provided assumes that shares issued in connection with the acquisition of Arcelor were issued at the beginning of the period presented. 2.EBITDA defined as operating income plus depreciation 3. Some intercompany shipments are not eliminated ARCELOR MITTAL CONSOLIDATED STATEMENTS OF CASH FLOWS - PRO FORMA [TABLE OMITTED] [TABLE OMITTED] * EBITDA is defined as operating income plus depreciation * Crude steel production is a combination of crude steel at the former Arcelor units and liquid steel at former Mittal Steel units * Some inter segment sales and intra segment have not been eliminated * Some intercompany shipments are not eliminated * AM3S shipments are not consolidated [TABLE OMITTED] * EBITDA is operating income plus depreciation * Crude steel production is a combination of crude steel at the former Arcelor units and liquid steel at former Mittal Steel units * Some inter segment sales and intra segment have not been eliminated * Some intercompany shipments are not eliminated * AM3S shipments are not consolidated MITTAL STEEL COMPANY N.V. ACTUAL FULL YEAR AND FOURTH QUARTER 2006 RESULTS Mittal Steel Company N.V. ("Mittal Steel" or "the Company") (New York: MT; Amsterdam: MT; Madrid: MTS; Paris: MTP; Brussels: MTBL; Luxembourg: MT), the world's largest and most global steel company, today announced results for the three and twelve months ended December 31, 2006. Net income for the twelve months ended December 31, 2006, was $5.2 billion, or $5.29 per share, as compared with net income of $3.4 billion, or $4.99 per share, for the twelve months ended December 31, 2005. Consolidated sales and operating income for the twelve months ended December 31, 2006, were $58.9 billion and $7.5 billion, respectively, as compared with $28.1 billion and $4.7 billion, respectively, for the twelve months ended December 31, 2005. Total steel shipments for the twelve months ended December 31, 2006, were 78.1 million metric tonnes as compared with 44.6 million metric tonnes for the twelve months ended December 31, 2005. Net income for the three months ended December 31, 2006, was $1.9 billion, or $1.38 per share, as compared with net income of $1.8 billion, or $1.58 per share, for the three months ended September 30, 2006. Consolidated sales and operating income for the three months ended December 31, 2006, were $23.2 billion and $2.6 billion, respectively, as compared with $18.0 billion and $2.6 billion, respectively, for the three months ended September 30, 2006. Total steel shipments for the three months ended December 31, 2006, were 26.7 million metric tonnes as compared with 22.9 million metric tonnes for the three months ended September 30, 2006. Q4 Highlights (on the basis of IFRS, amounts US$ and Euros(1)): [TABLE OMITTED] [TABLE OMITTED] 1. US Dollars have been translated into Euros using an average exchange rate of (US$/Euro) of 1.2893, 1.2748, 1.2558 and 1.2443 for Q4 2006, Q3 2006, 12M 2006 and 2005, respectively. 2. Some inter-company shipments are not eliminated 3. EBITDA is defined as operating income plus depreciation Inter-company transactions have been eliminated in financial consolidation. The financial information in this press release and Appendices ap·pen·di·ces n. A plural of appendix. 1 and 3 has been prepared based on International Financial Reporting Standards International Financial Reporting Standards (IFRS) are standards and interpretations adopted by the International Accounting Standards Board (IASB). Many of the standards forming part of IFRS are known by the older name of International Accounting Standards (IAS). as endorsed by the European Union European Union (EU), name given since the ratification (Nov., 1993) of the Treaty of European Union, or Maastricht Treaty, to the European Community ("IFRS"). While the financial figures included in this announcement have been computed in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with IFRS applicable to interim periods, this announcement does not contain sufficient information to constitute an interim financial report as that term is defined in IAS See iPlanet Application Server. 1. (computer) IAS - The first modern computer. It had main registers, processing circuits, information paths within the central processing unit, and used Von Neumann's fetch-execute cycle. 34, Interim Financial Reporting. Appendix 2 includes reconciliation of certain items from IFRS to the accounting principles generally accepted in the United States of America UNITED STATES OF AMERICA. The name of this country. The United States, now thirty-one in number, are Alabama, Arkansas, Connecticut, Delaware, Florida, Georgia, Illinois, Indiana, Iowa, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Mississippi, Missouri, New Hampshire, ("US GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). "). The numbers in this press release have not been audited and the 2006 annual report has not been prepared yet. Analysis of Operations The following analysis of results for 2006 and 2005 reflects the following: * the acquisition of Arcelor, whose results were included from August 1, 2006; * the acquisition of certain subsidiaries of Stelco, whose results were included from January 30, 2006.; * the acquisition of Mittal Steel Kryviy Rih, whose results were included from November 26, 2005; and * the acquisition of Mittal Steel Inc., whose results were included from April 15, 2005. As a result, prior period results are not entirely comparable. Analysis of operations for twelve months ended December 31, 2006 versus twelve months ended December 31, 2005 - Actual Steel shipments for the twelve months ended December 31, 2006, were 75% higher as compared with the twelve months ended December 31, 2005, primarily due to the inclusion of Arcelor, Mittal Steel Kryviy Rih and Mittal Steel ISG Inc. Excluding the impact of Arcelor, Mittal Steel Kryviy Rih and Mittal Steel ISG Inc., steel shipments for the twelve months ended December 31, 2006, were 7% higher as compared with the twelve months ended December 31, 2005, primarily due to increased shipments within the Long Carbon Americas and Europe and AACIS segments. Operating income for the twelve months ended December 31, 2006, was $7.5 billion as compared with $4.7 billion for the twelve months ended December 31, 2005, primarily due to the inclusion of Arcelor, Mittal Steel Kryviy Rih and Mittal Steel ISG Inc. Excluding the impact of Arcelor, Mittal Steel Kryviy Rih and Mittal Steel ISG Inc., operating income for the twelve months ended December 31, 2006, was 11% lower at $4.1 billion as compared with $4.6 billion for the twelve months ended December 31, 2005. Other income (expense)-net for the twelve months ended December 31, 2006, was $49 million as compared with other income (expense)-net of $344 million for the twelve months ended December 31, 2005. In 2005, the Company recorded $277 million of negative goodwill. Income from equity method investments for the twelve months ended December 31, 2006, was $301 million as compared with $86 million for the twelve months ended December 31, 2005, primarily due to equity method investments acquired in the Arcelor transaction. Net financing cost for the twelve months ended December 31, 2006, increased to $654 million as compared with $353 million for the twelve months ended December 31, 2005, primarily due to the increased borrowing for the acquisition and assumption of debt, at Arcelor, Mittal Steel Kryviy Rih and Mittal Steel ISG Inc., as well as to the increase in base interest rates. Income tax expense for the twelve months ended December 31, 2006, increased to $1.1 billion as compared with $881 million for the twelve months ended December 31, 2005. The effective tax rate for the twelve months ended December 31, 2006, was 15.4% as compared with 18.3% for the twelve months ended December 31 2005. Net income for the twelve months ended December 31, 2006, increased to $5.2 billion as compared with $3.4 billion for the twelve months ended December 31, 2005, as a result of the reasons discussed above. Analysis of operations for Q406 v Q306 - Actual The results for three months ended September 30, 2006, include the results of Arcelor from August 1, 2006. As a consequence the comparison between three months ended December 31, 2006, and three months ended September 30, 2006 is not entirely comparable. Sales for the three months ended December 31, 2006, were $23.2 billion as compared with $18.0 billion for the three months ended September 30, 2006. Operating income for the three months ended December 31, 2006, remained flat at $2.6 billion as compared with the three months ended September 30, 2006. Other income (expense)-net for the three months ended December 31, 2006, was $46 million as compared with other income (expense)-net of $2 million for the three months ended September 30, 2006. Income from equity method investments for the three months ended December 31, 2006, was $163 million as compared with $100 million for the three months ended September 30, 2006. Net financing cost for the three months ended December 31, 2006, decreased to $179 million as compared with $280 million for the three months ended September 30, 2006. Income tax expense for the three months ended December 31, 2006, amounted to $377 million as compared with $276 million for the three months ended September 30, 2006. The effective tax rate for the three months ended December 31, 2006, was 14.2% as compared with 11.6% for the three months ended September 30, 2006. Net income for the three months ended December 31, 2006, increased to $1.9 billion as compared with $1.8 billion for the three months ended September 30, 2006, as a result of the reasons discussed above. Liquidity and Capital Resources Mittal Steel's principal sources of liquidity are cash generated from its operations, its credit lines at the corporate level and various working capital credit lines at its operating subsidiaries. As of December 31, 2006, the Company's cash and cash equivalents including restricted cash and short-term investments were $6.1 billion ($5.9 billion at September 30, 2006). In addition, the Company, including its operating subsidiaries, had an available borrowing capacity of $9.0 billion at December 31, 2006, as compared with $5.9 billion at September 30, 2006. On November 30, 2006, Mittal Steel entered into a credit facility, which is comprised of a [euro]12 billion term loan and a [euro]5 billion revolving credit facility (the "[euro]17 billion facility"). The proceeds of the term loan were used to refinance Mittal Steel's [euro]3 billion refinancing facility, [euro]5 billion acquisition facility and [euro]2.8 billion bridge facility, along with Arcelor's [euro]4 billion term loan facility and a [euro]3 billion revolving credit facility. The [euro]5 billion revolving credit facility has remained unutilized and is fully available to Mittal Steel, the proceeds of which may be used for general corporate purposes. The [euro]17 billion facility is unsecured and provides for loans bearing interest at LIBOR or EURIBOR (based on the borrowing currency) plus a margin based on a ratings grid. Mittal Steel's [euro]3 billion refinancing facility, [euro]5 billion credit facility and [euro]2.8 billion bridge facility were repaid and subsequently cancelled on December 14, 2006. Arcelor's [euro]4 billion term loan was repaid and subsequently cancelled on December 14, 2006 and its [euro]3 billion facility was cancelled on December 5, 2006. For the three months ended December 31, 2006, net cash provided by operating activities was $4.3 billion, as compared with $0.7 billion for the three months ended September 30, 2006. As of December 31, 2006, the Company's long-term debt plus short-term debt less cash and cash equivalents, restricted cash and short-term investments decreased to $20.4 billion as compared to $22.7 billion at September 30, 2006. Capital expenditure during the three months ended December 31, 2006, was $1.6 billion as compared with $691 million for the three months ended September 30, 2006. Depreciation during the three months ended December 31, 2006, was $865 million as compared with $732 million for the three months ended September 30, 2006. On September 27, 2006, Mittal Steel announced that its board of directors agreed upon a new dividend and cash distribution policy. The new policy will be proposed to Mittal Steel's shareholders at the next general meeting. The new policy provides a mechanism that will allow Mittal Steel to honor its commitment of returning 30% of net income to shareholders every year through an annual base dividend, supplemented by additional share buy-backs. Mittal Steel's board of directors proposed an annual base dividend of $1.30 (approximately 1 Euro at the current exchange rate). This base dividend has been designed to guarantee a minimum payout per year and would rise in order to reflect the underlying growth of Mittal Steel. Payment of this dividend will be on a quarterly basis. In addition to this dividend, Mittal Steel's board of directors proposed a share buy-back program tailored to match the 30% distribution pay-out commitment. As a consequence, the sum of the annual base dividend and the share buy-back program each year will represent 30% of annual net income. Based on the pro forma annual net earnings announced for the twelve months ended December 31, 2006, the group will implement a $590 million share buy back and a cash dividend of approximately $1.8 billion. This new distribution policy will be implemented as of January 1, 2007 for the 2006 results, subject to shareholder approval. On February 2, 2007, Arcelor Mittal declared an interim dividend of $0.325 per share. The cash dividend will be payable on March 15, 2007 to Euronext Amsterdam, Euronext Brussels, Euronext Paris, Luxembourg Stock Exchange and Spanish Exchanges shareholders ("European Shareholders") of record on February 27, 2007, and to NYSE shareholders of record on March 2, 2007. On December 15, 2006 Mittal Steel redeemed Arcelor's 3% 2017 bonds convertible and/or exchangeable into new and/or existing Arcelor shares. On December 26, 2006, Fitch Ratings affirmed the Company's Issuer Default and senior unsecured ratings at "BBB" and Short-term rating at "F2" and removed the ratings from Rating Watch Negative. Other Investments and Divestments On October 27, 2006, Noble and Arcelor signed a binding Letter of Intent for the combination of Arcelor's laser-welded tailored blank business ("TBA TBA See: To be announced ") with Noble. Upon completion of the transaction, Arcelor Mittal would receive certain cash and shares of Noble common stock, and would become Noble's largest stockholder, owning approximately 40% of the issued and outstanding common shares. The total consideration of such cash and shares is estimated at $300 million. Following Mittal Steel's bid for Arcelor, the European Commission European Commission, branch of the governing body of the European Union (EU) invested with executive and some legislative powers. Located in Brussels, Belgium, it was founded in 1967 when the three treaty organizations comprising what was then the European Community identified competition concerns in certain steel production segments. In response, the Company committed to dispose of To determine the fate of; to exercise the power of control over; to fix the condition, application, employment, etc. of; to direct or assign for a use. See also: Dispose three European medium/heavy section mills. On December 6, 2006, Mittal Steel announced that it had agreed to sell its wholly-owned subsidiary, SWT SWT - Standard Widget Toolkit , to Grupo Alfonso Gallardo for an enterprise value of EUR EUR In currencies, this is the abbreviation for the Euro. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. 591 million. SWT is located in Unterwellenborn, Thuringen, Germany. On December 13, 2006, Mittal Steel announced that it had agreed to sell its wholly-owned subsidiary, Travi e Profilati di Pallanzeno ("TPP TPP thiamine pyrophosphate. Thiamine pyrophosphate (TPP) The coenzyme containing thiamine that is essential in converting glucose to energy. Mentioned in: Beriberi TPP 1. total plasma protein. 2. "), as well as its 49.9% stake in San Zeno Acciai - Duferco S.p.A., to Duferco for an enterprise value of EUR 117 million. TPP is a rolling mill rolling mill: see steel. located close to the Lago Maggiore in Northern Italy Northern Italy comprises of two areas belonging to NUTS level 1:
 ·bro·wa Gór·ni·cza A city of southern Poland northeast of Katowice. It has been a coal-mining center since the 1790s. Population: 131,000. in Southern Poland. On December 11, 2006, the Government of Liberia and Mittal Steel announced that they had successfully concluded the review of the Mining Development Agreement Mittal Steel entered into with the Government of Liberia in August 2005. The agreement gives Mittal Steel access to iron ore deposits in Western Liberia. Mittal Steel expects expenditures of approximately $900 million during the lifetime of the project. This cost will cover development of the mines, related railway and port infrastructure and will provide means for community development. On December 20, 2006, Mittal Steel announced the acquisition of Sicartsa, a Mexican Mexican named after or originating in Mexico. Mexican axolotl see ambystomamexicanum. Mexican beaded lizard (Heloderma horridum integrated steel producer, from Grupo Villacero for an enterprise value of $1.4 billion. Sicartsa, with production facilities in Mexico and Texas, is a fully integrated producer of long steel, with an annual production capacity of approximately 2.5 million tonnes. Through its wholly owned mine, linked directly to the plant via a slurry pipeline A slurry pipeline is used in mining to transport mineral concentrate from a mineral processing plant near a mine. The concentrate of the ore is mixed with water and then pumped over a long distance to a port where it can be shipped for further processing. , Sicartsa has estimated iron ore resources of 160 million tonnes. On December 20, 2006, Mittal Steel also entered into a 50/50 commercial joint-venture with Grupo Villacero to distribute and trade Mittal Steel long products in Mexico and in the southwest United States. On December 21, 2006, Mittal Steel announced that it has signed a Memorandum of Understanding A Memorandum of Understanding (MoU) is a legal document describing a bilateral or multilateral agreement between parties. It expresses a convergence of will between the parties, indicating an intended common line of action and may not imply a legal commitment. with the Government of the State of Orissa in India concerning setting up a steel making operation in the Keonijhar District. Recent Developments As previously reported, on December 22, 2006, ThyssenKrupp AG initiated summary legal proceedings against Mittal Steel in the District Court in Rotterdam alleging that Mittal Steel had breached a letter agreement between Mittal Steel and ThyssenKrupp, dated January 26, 2006, with respect to the sale of Dofasco Inc., a North American steelmaker, to ThyssenKrupp. On January 23, 2007, the District Court in Rotterdam denied ThyssenKrupp's petition for an order. On February 20, 2007 the U.S. Department of Justice ("DOJ") informed the company that it has selected the Sparrows Point steel mill located near Baltimore Maryland for divestiture under the consent decree filed by the DOJ in August 2006. The selection of Sparrows Point by the DOJ ends the period during which Arcelor Mittal must hold Dofasco separate from its operations. On September 25, 2006, the Comissao de Valores Mobiliarios ("the CVM"), the Brazilian securities regulator, ruled that, as a result of Mittal Steel's acquisition of Arcelor, Mittal Steel was required to carry out a public offer to acquire all the outstanding shares in Arcelor Brasil S.A. not owned by Arcelor or any other affiliate of Mittal Steel. Arcelor Brasil is a majority owned subsidiary of Arcelor. On October 26, 2006, Mittal Steel filed with the CVM a request for registration with respect to such offer, and filed an amended request on January 11, 2007. As per the amended request for registration filed by Mittal Steel, the value to be offered per Arcelor Brasil share is [euro]12.12 (which may be accepted in the form of cash or a mixture of cash and shares, at the option of the holder), for a total value of approximately [euro]2.6 billion (approximately $3.3 billion) for all Arcelor Brasil shares. On February 12, 2007, the CVM issued a letter stating that, according to the CVM's interpretation of the applicable rules, the value Mittal Steel should offer per Arcelor Brasil share should be [euro]4.57 in cash and 0.3942 Mittal Steel class A common shares, subject to a number of adjustments. The decision of the CVM is subject to administrative appeal and appeal before the Brazilian courts. Mittal Steel is presently evaluating its options in respect of such decision. On January 30, 2007, Mittal Steel announced its intention to use its trading name Arcelor Mittal on its different stock exchanges listings in order to better reflect the economic reality of the group. On February 14, 2007 Arcelor Mittal signed a joint venture agreement with the Bin Jarallah Group of companies for the design and construction of a seamless tube mill in Saudi Arabia. This state of the art facility will be located in Jubail Industrial City, north of Al Jubail on the Persian Gulf. The mill will have a capacity of 500,000 tonnes per year. Construction is planned to commence at the end of the first quarter of 2008 and to be completed by the fourth quarter of 2009. Arcelor Mittal will hold a 51% interest in the company established for this project, with the Bin Jarallah Group holding the remaining 49%. On March 2, 2007, Arcelor Mittal will be admitted to AEX index and the FTSE4Good Index Europe indexes. On September 18, 2006, Arcelor Mittal was admitted to the CAC 40 index. MITTAL STEEL COMPANY N.V. CONSOLIDATED FINANCIAL & OTHER INFORMATION MITTAL STEEL COMPANY N.V. CONSOLIDATED BALANCE SHEETS - ACTUAL BASIS [TABLE OMITTED] MITTAL STEEL COMPANY N.V. CONSOLIDATED FINANCIAL & OTHER INFORMATION MITTAL STEEL COMPANY N.V. CONSOLIDATED STATEMENTS OF INCOME DATA & OTHER INFORMATION - ACTUAL BASIS [TABLE OMITTED] 1. The information provided includes preliminary purchase price adjustments. 2. Some intercompany shipments are not eliminated MITTAL STEEL COMPANY N.V. CONSOLIDATED FINANCIAL & OTHER INFORMATION MITTAL STEEL COMPANY N.V. CONSOLIDATED STATEMENTS OF CASH FLOWS - ACTUAL BASIS [TABLE OMITTED] 1. The information provided includes preliminary purchase price adjustments. 2. The information for 2005 includes Mittal Steel USA ISG Inc. from April 15, 2005 and Mittal Steel Kryviy Rih from November 26, 2005 3. The information for 2006 includes Arcelor from August 1, 2006 [TABLE OMITTED] The Company considers IFRS as its primary GAAP. To provide an understanding of the differences between IFRS and US GAAP, the effect on consolidated net income is described in the following table and notes: [TABLE OMITTED] *Adjustment for business combinations for twelve months ended December 31, 2005 consists of $217 million higher amortization under IFRS offset by the reversal of negative goodwill of $277 million, whereas in 2006 no negative goodwill was recognized. Notes to the reconciliation from IFRS to US GAAP 1) Employee benefits US GAAP requires past service cost to be amortized over the remaining working lives for both vested vested adj. referring to having an absolute right or title, when previously the holder of the right or title only had an expectation. Examples: after 20 years of employment Larry Loyal's pension rights are now vested. (See: vest, vested remainder) and unvested rights, whereas under IFRS unvested rights remain unrecognized. 2) Business combinations Under US GAAP, negative goodwill is deducted de·duct v. de·duct·ed, de·duct·ing, de·ducts v.tr. 1. To take away (a quantity) from another; subtract. 2. To derive by deduction; deduce. v.intr. , on a pro-rata Pro-rata Used to describe a proportionate allocation. Notes: For example, a pro-rata dividend means that every shareholder gets an equal proportion for each share they own. See also: Dividend basis, from the value of the non-current assets acquired, primarily property, plant and equipment. Under IFRS negative goodwill is directly recognized in the income statement. Because the carrying amount of non current assets Current Assets Appearing on a company's balance sheet, it represents cash, accounts receivable, inventory, marketable securities, prepaid expenses, and other assets that can be converted to cash within one year. is higher under IFRS, the depreciation in the income statement increases proportionally pro·por·tion·al adj. 1. Forming a relationship with other parts or quantities; being in proportion. 2. Properly related in size, degree, or other measurable characteristics; corresponding: . 3) Other Other adjustments relate mostly to measurement of inventory. Under IFRS inventory is measured on the basis of First In - First Out (FIFO (First In First Out) A storage method that retrieves the item stored for the longest time. Contrast with LIFO. See traffic engineering methods. FIFO - first-in first-out ). Under US GAAP the Company measures certain inventory on the basis of Last In - First Out (LIFO (Last In-First Out) A queueing method in which the next item to be retrieved is the item most recently placed in the queue. Contrast with FIFO. LIFO - stack ). 4) Deferred income tax Under US GAAP, negative goodwill is deducted, on a pro-rata basis, from the value of the non-current assets acquired, primarily property, plant and equipment. A corresponding tax asset for the temporary difference created is recorded, less a valuation allowance, if applicable. Under IFRS, negative goodwill is directly recognized in the income statement with no tax asset recorded. Mittal Steel Company N.V. Appendix 3 - Quarter 4 2006 Purchase price accounting adjustments The Company is in the process of allocating the purchase price for its acquisition of Arcelor. It should be noted that all of the purchase price allocation adjustments made and reflected in the Company's December 31, 2006, financials (Income statement / Balance sheet) are still preliminary and could materially change as a result of the finalization of the purchase price allocation process. It is expected that this allocation will be finalized in Q2 2007. The Company has recorded the following adjustments: [TABLE OMITTED] 1 As of March 14, 2006 Arcelor abandoned the cash settlement option included in the 2017 convertible bond (OCEANE). Consequently a net financing cost of $367 million ([euro]296 million) was accounted for in accordance with the last fair valuation of the conversion option 2 The shipments of AM3S segment are not consolidated in the total shipments of the group and are fully eliminated. |
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