ArcelorMittal Reports Record Results for the Second Quarter and First Half 2007.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. & ROTTERDAM Rotterdam, city, Netherlands Rotterdam (rŏt`ərdăm', Dutch rôtərdäm`), city (1994 pop. 598,521), South Holland prov., W Netherlands, on the Nieuwe Maas (New Meuse) River near its mouth on the North Sea. , Netherlands Netherlands (nĕth`ərləndz), Du. Nederland or Koninkrijk der Nederlanden, officially Kingdom of the Netherlands, constitutional monarchy (2005 est. pop. 16,407,000), 15,963 sq mi (41,344 sq km), NW Europe. -- Regulatory News: 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. (referred to as "ArcelorMittal", "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 six month periods ended June June: see month. 30, 2007. H107 highlights: * Record quarterly and half-year results * 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 $9.7 billion - 42% increase over 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 H106 * Net income of $5.0 billion - 45% increase over pro forma H106 * 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. of $7.7 billion - 50% increase over pro forma H106 * $973m of synergies captured by end of 1H07 Financial highlights (on the basis of IFRS IFRS International Financial Reporting Standard(s) IFRS Inter Frame Relay Service IFRS Indiana Facilities Registry System , amounts in US$ and Euros(1)): (US dollars in millions except earnings per share and shipments data) [TABLE OMITTED] (Euros in millions except earnings per share and shipments data) [TABLE OMITTED] Inter-company transactions have been eliminated in consolidation. The financial information in this press release and Appendix 1 has been prepared 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 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 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 Auditing Standards 34, "Interim Financial Reporting". Unless otherwise noted the numbers in this press release have not been audited. 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. , ArcelorMittal, said: "We are pleased to be able to report a record set of numbers for the second quarter and first half 2007. These results were driven by a strong demand for steel combined with higher selling prices in all our major segments. The company reported EBITDA of US$9.7 billion in the first half of 2007, as compared with US$6.8 billion for the first half of 2006, representing an increase of 42%. We are anticipating a robust end to the year supported by the strength of our unique global and diversified diversified (di·verˑ·s business model. "We are also continuing to make good progress with our three-dimensional three-di·men·sion·al adj. 1. Of, relating to, having, or existing in three dimensions. 2. Having or appearing to have extension in depth. 3. growth strategy. Most recently we have been awarded the mining license for an attractive iron-ore deposit in Senegal Senegal, country, Africa Senegal (sĕnĭgôl`, sĕn`ĭgôl), officially Republic of Senegal, republic (2005 est. pop. 11,127,000), 76,124 sq mi (197,161 sq km), W Africa. and have strengthened our presence in the automotive sector through the acquisition of two French pipes and tubes businesses. One year on from the merger, the Company has made excellent progress in effecting a successful integration and is well positioned for the future." [TABLE OMITTED] The news conference will be available via a live video webcast on www.arcelormittal.com. SECOND QUARTER 2007 EARNINGS ANALYST CONFERENCE CALL Additionally, ArcelorMittal management will host a conference call for members of the investment community to discuss the second quarter 2007 financial performance of ArcelorMittal 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 Central European Time Central European Time Noun the standard time adopted by Western European countries one hour ahead of Greenwich Mean Time, corresponding to British Summer Time Abbrev: (CET) on Wednesday Wednesday: see week. , August 1st 2007. The conference call will include a brief question and answer session with senior management. The conference call information is as follows: [TABLE OMITTED] The presentation will be available via a live video webcast on www.arcelormittal.com Important information This document constitutes neither an offer to acquire 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 Brasil S.A. securities nor an offer of securities in any jurisdiction. In particular, this document does not constitutes an offer of securities for distribution nor sales 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. ArcelorMittal does not interest to register securities or conduct a public offering the United States. 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 for·ward-look·ing adj. Concerned with or making provision for the future: forward-looking educators; a forward-looking corporate plan. Adj. 1. information and statements about Mittal Steel Company N.V. 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 Mittal Steel'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 United States Securities and Exchange Commission ("SEC") made or to be made by Mittal Steel or its successor entities (including ArcelorMittal) including Mittal Steel's Annual Report on Form 20-F filed with the SEC. Mittal Steel undertakes no obligation to publicly update its forward-looking statements, whether as a result of new information, future events, or otherwise. Additional Information In connection with the proposed merger of Mittal Steel Company N.V. ("Mittal Steel") with ArcelorMittal (a wholly owned subsidiary Wholly Owned Subsidiary A subsidiary whose parent company owns 100% of its common stock. Notes: In other words, the parent company owns the company outright and there are no minority owners. of Mittal Steel), and the subsequent merger of ArcelorMittal with Arcelor, Mittal Steel, ArcelorMittal and Arcelor have filed and will file important documents with the relevant securities regulatory authorities Noun 1. regulatory authority - a governmental agency that regulates businesses in the public interest regulatory agency administrative body, administrative unit - a unit with administrative responsibilities , including the filing with the U.S. SEC by ArcelorMittal of a registration statement that included a proxy statement/prospectus and the anticipated filing with the SEC by Arcelor of a registration statement that will include a proxy statement/prospectus. The proxy statement/prospectus filed by ArcelorMittal does and the proxy statement/prospectus to be filed by Arcelor will contain important information about the relevant merger and related matters, and Mittal Steel, ArcelorMittal and Arcelor have made or will make public such proxy statement/prospectus and mail the proxy statement/prospectus to the relevant U.S. shareholders. Investors and security holders are urged to read each proxy statement/prospectus, and any other relevant documents filed with the relevant securities regulatory authorities, when they become available and before making any investment decision. You can obtain a free copy of the proxy statement/prospectus filed by ArcelorMittal and will be able to obtain a free copy of the proxy statement/prospectus filed by Arcelor (when available) and other related documents filed with the SEC by Mittal Steel, ArcelorMittal and Arcelor at the SEC's web site at www.sec.gov See .gov and GovNet. (networking) gov - The top-level domain for US government bodies. and from Mittal Steel, ArcelorMittal and Arcelor at www.arcelormittal.com. ARCELORMITTAL SECOND QUARTER AND FIRST HALF 2007 RESULTS - PRO FORMA COMPARISON ArcelorMittal, the world's largest and most global steel company, today announced results for the three and six month periods ended June 30, 2007. Pro forma presentation The pro forma results for 2006 include the results of the following acquisitions as if such acquisitions took place on January January: see month. 1, 2006: * the acquisition of Arcelor on August 1, 2006; and * the acquisition of certain subsidiaries of Stelco on January 30, 2006. Furthermore, the results of Arcelor include the following acquisitions as if such acquisitions took place on January 1, 2006: * the acquisition of Sonasid on June 1, 2006; and * the acquisition of Dofasco DOFASCO Dominion Foundry and Steel Company on March 1, 2006. The results of Sicartsa are included from April 20, 2007, the date of its acquisition by the Company. Disposals The pro forma results for 2006 include the results of the following subsidiaries until the date of their disposal: * the disposal of Huta Huta may refer to several villages in Romania:
* the disposal of Travi e Profilati di Pallanzeno Pallanzeno is a comune (municipality) in the Province of Verbano-Cusio-Ossola in the Italian region Piedmont, located about 120 km northeast of Turin and about 25 km northwest of Verbania. As of 31 December 2004, it had a population of 1,200 and an area of 4.4 km². ("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. ") in January 2007 * the disposal of Stahlwerk Thuringen GmbH GmbH Gesellschaft mit Beschränkter Haftung (German: limited liability company; business entity) ("SWT SWT - Standard Widget Toolkit ") in March 2007 Results for the three months ended June 30, 2007 versus the three months ended March 31, 2007 and pro forma results for the three months ended June 30, 2006 ArcelorMittal's net income for the three months ended June 30, 2007, was $2.7 billion, or $1.97 per share, as compared with $2.3 billion, or $1.62 per share, for the three months ended March 31, 2007, and pro forma net income of $1.8 billion, or $1.31 per share, for the three months ended June 30, 2006. Net income in the second quarter 2007 is higher than the first quarter 2007 primarily due to strong demand for our products, resulting in higher shipments and higher selling prices, offset in part by higher costs. Sales and operating income for the three months ended June 30, 2007, were $27.2 billion and $4.2 billion, respectively, as compared with $24.5 billion and $3.5 billion, respectively, for the three months ended March 31, 2007. Pro forma sales and operating income for the three months ended June 30, 2006, were $22.4 billion and $2.6 billion, respectively. Total steel shipments for the three months ended June 30, 2007, were 28.7 million metric tonnes as compared with 27.0 million metric tonnes for the three months ended March 31, 2007, and pro forma steel shipments of 29.1 million metric tonnes for the three months ended June 30, 2006. Total steel shipments are lower in the three months ended June 30, 2007, as compared to the three months ended June 30, 2006, primarily due to the non consolidation of a Canadian Canadian (kənā`dēən), river, 906 mi (1,458 km) long, rising in NE New Mexico. and flowing E across N Texas and central Oklahoma into the Arkansas River in E Oklahoma. joint venture in 2007, where a 50% proportion was include in 2006. Shipments in Flat Carbon Americas A·mer·i·cas , the See America. were lower, offset by an increase in shipments in Flat Carbon Europe Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). .
Analysis of operations. Sales for the three months ended June 30, 2007, were $27.2 billion as compared with $24.5 billion for the three months ended March 31, 2007, and pro forma sales of $22.4 billion for the three months ended June 30, 2006. Depreciation for the three months ended June 30, 2007, increased to $1.1 billion as compared with $891 million for the three months ended March 31, 2007, and pro forma depreciation of $867 million for the three months ended June 30, 2006. Depreciation was higher in the second quarter due to an increase of plant, property and equipment, amortisation Noun 1. amortisation - the reduction of the value of an asset by prorating its cost over a period of years amortization reduction, step-down, diminution, decrease - the act of decreasing or reducing something 2. of intangibles recognised in purchase price allocations and alignment of definitions. Operating income for the three months ended June 30, 2007, increased to $4.2 billion as compared with $3.5 billion for the three months ended March 31, 2007, and pro forma operating income of $2.6 billion for the three months ended June 30, 2006. Income from investments for the three months ended June 30, 2007, was $195 million as compared with $154 million for the three months ended March 31, 2007, and pro forma income from investments of $119 million for the three months ended June 30, 2006. 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 three months ended June 30, 2007, were $182 million as compared with $10 million for the three months ended March 31, 2007 and pro forma expense of $299 million for the three months ended June 30, 2006. Included in the net financing cost is net interest expense which increased by $33 million to $296 million for the three months ended June 30, 2007, as compared to $263 million for the three months ended March 31, 2007. Net financing costs for the three months ended June 30, 2007 include other gains such as 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, foreign exchange and certain financial instruments. Income tax expense for the three months ended June 30, 2007, increased to $1.1 billion as compared with $934 million for the three months ended March 31, 2007. The effective tax rate for the three months ended June 30, 2007, was 25.2% as compared with 25.8% for the three months ended March 31, 2007. The pro forma income tax expense for the three months ended June 30, 2006 was $310 million, representing an effective tax rate of 12.7%. Minority interest for the three months ended June 30, 2007, was $497 million (of which Arcelor Brasil is $152 million), as compared with $436 million (of which Arcelor Brasil is $141 million) for the three months ended March 31, 2007, and pro forma minority interest of $320 million for the three months ended June 30, 2006. Net income for the three months ended June 30, 2007, increased to $2.7 billion as compared with $2.3 billion for the three months ended March 31, 2007, and pro forma net income of $1.8 billion for the three months ended June 30, 2006. Analysis of operations Q2 2007 v Q1 2007 Flat Carbon Americas Total steel shipments in the Flat Carbon Americas segment were higher at 7.1 million metric tonnes for the three months ended June 30, 2007, as compared with steel shipments of 6.6 million metric tonnes for the three months ended March 31, 2007. Sales were higher at $5.9 billion for the three months ended June 30, 2007, as compared with sales of $5.1 billion for the three months ended March 31, 2007. Operating income was substantially higher at $846 million for the three months ended June 30, 2007, as compared with operating income of $584 million for the three months ended March 31, 2007. Operating results for the three months ended June 30, 2007, as compared with the three months ended March 31, 2007, were favorably fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. impacted by higher shipments in the US and Mexican Mexican named after or originating in Mexico. Mexican axolotl see ambystomamexicanum. Mexican beaded lizard (Heloderma horridum operations and were positively impacted by higher average steel selling prices particularly in Mexico and South America South America, fourth largest continent (1991 est. pop. 299,150,000), c.6,880,000 sq mi (17,819,000 sq km), the southern of the two continents of the Western Hemisphere. . Flat Carbon Europe Total steel shipments in the Flat Carbon Europe segment were higher at 9.2 million metric tonnes for the three months ended June 30, 2007, as compared with steel shipments of 8.7 million metric tonnes for the three months ended March 31, 2007. Sales were higher at $8.9 billion for the three months ended June 30, 2007, as compared with sales of $8.2 billion for the three months ended March 31, 2007. Operating income was higher at $1.2 billion for the three months ended June 30, 2007, as compared with $1.1 billion for the three months ended March 31, 2007. Operating results for the three months ended June 30, 2007, as compared to the three months ended March 31, 2007, increased due to improved volumes and average steel selling prices, which were partially offset by higher input costs. Long Carbon Americas and Europe Total steel shipments in the Long Carbon Americas and Europe segment were higher at 6.5 million metric tonnes for the three months ended June 30, 2007, as compared with steel shipments of 6.2 million metric tonnes for the three months ended March 31, 2007. Sales were higher at $6.2 billion for the three months ended June 30, 2007, as compared with sales of $5.5 billion for the three months ended March 31, 2007. Operating income was higher at $1.1 billion for the three months ended June 30, 2007, as compared with operating income of $947 million for the three months ended March 31, 2007. Operating results for the three months ended June 30, 2007, as compared with the three months ended March 31, 2007, increased primarily due to improved average steel selling prices, particularly in Europe and the Brazilian markets, which were partially offset by higher 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) ") Total steel shipments in the AACIS segment were higher at 5.4 million metric tonnes for the three months ended June 30, 2007, as compared with steel shipments of 5.1 million metric tonnes for the three months ended March 31, 2007. Sales were higher at $4.7 billion for the three months ended June 30, 2007, as compared with sales of $4.0 billion for the three months ended March 31, 2007. Operating income was substantially higher at $1.0 billion for the three months ended June 30, 2007, as compared with operating income of $744 million for the three months ended March 31, 2007. Operating results for three months ended June 30, 2007, as compared to the three months ended March 31, 2007, increased mainly due to higher volumes and average steel selling prices, particularly in the CIS operations, which were partially offset by 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. Total steel shipments in the Stainless Steel segment were higher at 544 thousand metric tonnes for the three months ended June 30, 2007, as compared with steel shipments of 498 thousand metric tonnes for the three months ended March 31, 2007. Sales were higher at $2.7 billion for the three months ended June 30, 2007, as compared with sales of $2.3 billion for the three months ended March 31, 2007. Operating income was substantially lower at $237 million for the three months ended June 30, 2007, as compared with operating income of $373 million for the three months ended March 31, 2007. Operating results for the Stainless Steel segment declined for the three months ended June 30, 2007, as compared to the three months ended March 31, 2007, primarily due to a write-down Write-Down Reducing the book value of an asset because it is overvalued compared to the market value. Notes: This is usually reflected in the company's income statement as an expense, thereby reducing net income. in the value of inventory, as a result of the recent decline in nickel nickel, metallic chemical element; symbol Ni; at. no. 28; at. wt. 58.69; m.p. about 1,453°C;; b.p. about 2,732°C;; sp. gr. 8.902 at 25°C;; valence 0, +1, +2, +3, or +4. prices, partially offset by improved volumes. AM3S AM3S Arcelor Mittal Steel Solutions and Services (1) Total steel shipments in the AM3S segment were higher by 0.3 million tonnes, in the three months ended June 30, 2007, as compared with the three months ended March 31, 2007. Sales in the AM3S segment were higher at $3.8 billion for the three months ended June 30, 2007, as compared with sales of $3.4 billion for the three months ended March 31, 2007. Operating income increased to $184 million for the three months ended June 30, 2007, as compared with operating income of $121 million for three months ended March 31, 2007, primarily due to higher volumes and higher average steel selling prices. Liquidity and Capital Resources ArcelorMittal'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 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. . As of June 30, 2007, the Company's cash and cash equivalents, including 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, amounted to $6.8 billion as compared to $8.3 billion at March 31, 2007. Net debt for the second quarter, 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 investments, increased by $4.5 billion to $23.2 billion. Gearing2 has increased from 35% to 42% and net debt to EBITDA ratio has increased from 1.1x3 at March 31, 2007, to 1.2x at June 30, 2007. The increase in net debt was primarily due to the following: * Acquisition of Sicartsa, Mexico: $1.5 billion * Cash purchase of minority interests in Arcelor Brasil: $3.7 billion * Share buy-back and dividend: $1.0 billion The Company had total liquidity of $16.4 billion at June 30, 2007, consisting of cash and cash equivalents (including restricted cash and short-term investments of $6.8 billion), and available bank lines (including bank lines at the level of its operating subsidiaries) of $9.6 billion at June 30, 2007. Changes in 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. and current liabilities Current Liabilities Usually appearing on a company's balance sheet, it represents the amount owed for interest, accounts payable, short-term loans, expenses incurred but unpaid, and other debts due within one year. resulted in the use of cash during the three months ended June 30, 2007, of $587 million as compared to $653 million for the three months ended March 31, 2007, primarily due to an increase in trade accounts receivables accounts receivable n. the amounts of money due or owed to a business or professional by customers or clients. Generally, accounts receivable refers to the total amount due and is considered in calculating the value of a business or the business' problems in paying and prepaid expenses Prepaid Expense An asset that arises on a balance sheet because of the payment of something in advance (prepayment). Services for the payment will be received in the near future. , partially offset by an increase in trade payables Payables Related: Accounts payable . For the three months ended June 30, 2007, net cash provided by operating activities was $3.7 billion, as compared with $2.7 billion for the three months ended March 31, 2007. Capital expenditures during the three months ended June 30, 2007, increased to $1.3 billion as compared with $988 million for the three months ended March 31, 2007. Recent Developments * On July 26, 2007, ArcelorMittal announced that it has reached an agreement with the Polish Government to acquire the outstanding 25.2% shares of ArcelorMittal Poland currently held by the Polish State and Treasury Ministry. ArcelorMittal has agreed to acquire each share at a price of Polish zloty ("PLN PLN In currencies, this is the abbreviation for the Polish Zloty. 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. ") 6.5, valuing the remaining 25.2% of shares at approximately PLN 436 million (approx. $157 million). * On July 20, 2007, ArcelorMittal, announced that it had reached a preliminary agreement to acquire two steel tube businesses from Vallourec. Vallourec Precision Soudage (VPS (1) (Vectors Per Second) The measurement of the speed of a vector or array processor. See vector, vector processor and array processor. (2) (Virtual Private Server) See OS virtualization. ) produces about 100,000 tonnes of welded steel tubes for application in the automotive industry The automotive industry is the industry involved in the design, development, manufacture, marketing, and sale of motor vehicles. In 2006, more than 69 million motor vehicles, including cars and commercial vehicles were produced worldwide. from two sites in France. Also based in France, Vallourec Composants Automobiles Vitry (VCAV) specialises in the design and manufacturing of tubular tubular /tu·bu·lar/ (too´bu-lar) 1. shaped like a tube. 2. of or pertaining to a tubule. tubular 1. pertaining to renal tubules. 2. pertaining to fallopian tube. components for the automotive industry. Combining them with ArcelorMittal's existing pipes and tubes business, will enable an even more complete product offering range to automotive customers. * On July 19, 2007, ArcelorMittal announced that it had been formally granted concessions by the Republic of Senegal to develop mining, transportation and logistics activities in the Faleme region of South East Senegal. * On July 10, 2007, ArcelorMittal announced the signing of agreement and installation of European European emanating from or pertaining to Europe. European bat lyssavirus see lyssavirus. European beech tree fagussylvaticus. European blastomycosis see cryptococcosis. Works Council Noun 1. works council - (chiefly Brit) a council representing employer and employees of a plant or business to discuss working conditions etc; also: a committee representing the workers elected to negotiate with management about grievances and wages etc ("EWC EWC East West Center EWC European Works Council EWC Edward Waters College EWC European Waste Catalogue EWC Expected Week of Childbirth EWC Efficient Windows Collaborative EWC Engineering Workforce Commission EWC Elder Wisdom Circle ") agreement. The newly installed integrated ArcelorMittal EWC will replace the former EWCs that existed in both previous companies. * On June 29, 2007, Mittal Steel announced the publication of the legal documentation for its merger with ArcelorMittal, a Luxembourg subsidiary. This was the first step of the previously-announced two-step merger process between Mittal Steel and Arcelor S.A. In the first step, Mittal Steel will merge into its wholly-owned non-operating subsidiary ArcelorMittal. * On June 5, 2007, Mittal Steel publicly announced the results of its tender offer for the shares it did not hold in Arcelor Brasil. In the aggregate, Mittal Steel acquired 29.5% of the total share capital and 89.7% of the free float Free float An exchange rate system characterized by the absence of government intervention. Also known as clean float. of Arcelor Brasil as of June 5, 2007, thereby increasing its previous 67.1% shareholding in Arcelor Brasil to 96.6%. Mittal Steel paid for the shares with $3.5 billion in cash and approximately 27.0 million Mittal Steel class A common shares, representing a total consideration of $5.2 billion. As required by Brazilian regulations, beginning on June 5, 2007 and ending at the latest on September 4, 2007, the remaining shareholders in Arcelor Brasil may sell their shares to Mittal Steel for R$53.89 per share (the same price offered to the Arcelor Brasil shareholders accepting the cash option of the offer) as adjusted pursuant to applicable law. On June 19, 2007, the Brazilian stock exchange 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. CVM announced that the Arcelor Brazil shares have been delisted. Mittal Steel will cause a general Arcelor Brasil shareholders' meeting shareholders' meeting n. a meeting, usually annual, of all shareholders of a corporation (although in large corporations only a small percentage attend) to elect the Board of Directors and hear reports on the company's business situation. to be held in order to approve the redemption of the remaining shares. The redemption price Redemption price See: Call price redemption price 1. The price at which an open-end investment company will buy back its shares from the owners. In most cases, the redemption price is the net asset value per share. 2. will be equal to R$53.89 per share. Mittal Steel therefore expects that it will subsequently acquire the 18.3 million Arcelor Brasil shares that remained outstanding after the closing of the tender offer, which are valued at approximately $0.5 billion. Following the tender offer an additional 7.9 million Arcelor Brasil shares were purchased, resulting in an outstanding balance of $0.3 billion. Outlook for third Quarter 2007 The Company expects third quarter 2007 EBITDA to be between $4.7 to $4.9 billion, as compared with $4.4 billion in the third quarter of 2006. Total shipments, in the third quarter of 2007, are expected to decrease compared with the second quarter 2007 due to usual seasonal slowdown For articles with similar titles, see Slow Down (disambiguation). A slowdown is an industrial action in which employees perform their duties but seek to reduce productivity or efficiency in their performance of these duties. . In the Flat Carbon Americas segment EBITDA is expected to decrease slightly. EBITDA is also expected to decline in Flat Carbon Europe, Long Carbon Americas and Europe and AM3S segment due to seasonal activity slowdown. AACIS segment EBITDA is expected to remain stable. Stainless Steel EBITDA is expected to decline due to continuing market deterioration de·te·ri·o·ra·tion n. The process or condition of becoming worse. . Minority interest charge will be lower following the acquisition of Arcelor Brasil minority. The tax rate is expected to remain at approximately 25% for the year. 1 Shipments for the AM3S segment, which are mainly inter-company, are not consolidated in the total shipments of the combined company and are eliminated. 2 Gearing is defined as net debt divided by total equity 3 Based on 1H07 annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. levels [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] MITTAL STEEL COMPANY N.V. REPORTS RECORD RESULTS FOR THE SECOND QUARTER AND FIRST HALF 2007 Mittal Steel Company N.V. (referred to as "ArcelorMittal", "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 six month periods ended June 30, 2007. H107 Highlights: * Record quarterly and half-year results * $9.7 billion EBITDA - triple H106 levels * $7.7 billion operating income - triple H106 levels * Shipments at 55.7 million metric tonne tonne measure of weight or mass; 1 tonne=1000 kg. See also ton. - almost double H106 levels * $973m of synergies captured by end of H107 Financial highlights (on the basis of IFRS, amounts in US$ and Euros(1)): (US dollars in millions except earnings per share and shipments data) [TABLE OMITTED] (Euros in millions except earnings per share and shipments data) [TABLE OMITTED] 1 US dollars have been translated into Euros using an average exchange rate (US$/Euro) of 1.3481, 1.3106, 1.2582, 1.3291 and 1.2296 for Q2 2007, Q1 2007, Q2 2006, 1H 2007 and 1H 2006, 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 consolidation. The financial information in this press release and Appendix 1 has been prepared in accordance with International Financial Reporting Standards as endorsed by the European Union ("IFRS"). While the 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 Auditing Standards 34, "Interim Financial Reporting". Unless otherwise noted the numbers in this press release have not been audited. MITTAL STEEL COMPANY N.V. SECOND QUARTER AND FIRST HALF 2007 RESULTS Net income for the three months ended June 30, 2007, was $2.7 billion, or $1.97 per share, as compared with net income of $2.3 billion, or $1.62 per share, for the three months ended March 31, 2007. Net income in the second quarter 2007 was higher than first quarter 2007 primarily due to strong demand for our products, resulting in higher shipments and higher selling prices, offset in part by higher costs. Sales and operating income for the three months ended June 30, 2007, were $27.2 billion and $4.2 billion, respectively, as compared with $24.5 billion and $3.5 billion, respectively, for the three months ended March 31, 2007. Total steel shipments for the three months ended June 30, 2007, were 28.7 million metric tonnes as compared with 27.0 million metric tonnes for the three months ended March 31, 2007. Analysis of operations for Q207 v Q206 During 2006, the Company's operations have changed substantially, primarily following the merger with Arcelor which has been consolidated from August 1, 2006, and therefore, the Q207 and Q206 results are not comparable on a like-for-like basis. Sales for the three months ended June 30, 2007, were $27.2 billion as compared with $9.2 billion for the three months ended June 30, 2006. Depreciation for the three months ended June 30, 2007, was $1.1 billion as compared with $342 million for the three months ended June 30, 2006. Operating income for the three months ended June 30, 2007, increased to $4.2 billion as compared with $1.4 million for the three months ended June 30, 2006. Income from equity method investments for the three months ended June 30, 2007, was $195 million as compared with $13 million for the three months ended June 30, 2006. Net financing cost for the three months ended June 30, 2007, was $182 million as compared with $20 million for the three months ended June 30, 2006. Income tax expense for the three months ended June 30, 2007, was $1.1 billion as compared with $339 million for the three months ended June 30, 2006. The effective tax rate for the three months ended June 30, 2007 remained flat at 25.2% as compared with the three months ended June 30, 2006. Net income for the three months ended June 30, 2007, was $2.7 billion as compared with $897 million for the three months ended June 30, 2006. Analysis of operations for Q207 v Q107 Sales for the three months ended June 30, 2007, were $27.2 billion as compared with $24.5 billion for the three months ended March 31, 2007. Sales were higher in the second quarter due to higher shipment and higher average steel selling prices. The company enjoyed strong demand for its products in the second quarter as compared to the first quarter 2007. Depreciation for the three months ended June 30, 2007, was $1.1 billion as compared with $891 million for the three months ended March 31, 2007. Depreciation was higher in the second quarter due to an increase of plant, property and equipment, amortisation of intangibles recognised in purchase price allocations and alignment of definitions. Operating income for the three months ended June 30, 2007, increased to $4.2 billion as compared with $3.5 billion for the three months ended March 31, 2007. Income from investments for the three months ended June 30, 2007, was $195 million as compared with $154 million for the three months ended March 31, 2007. Net financing costs for the three months ended June 30, 2007, were $182 million as compared with $10 million for the three months ended March 31, 2007. Included in the net financing cost is net interest expense which increased by $33 million to $296 million for the three months ended June 30, 2007, as compared to $263 million for the three months ended March 31, 2007. Net financing costs for the three months ended June 30, 2007 include other gains such as Canadian dollar swap, foreign exchange and certain financial instruments. Income tax expense for the three months ended June 30, 2007, was $1.1 billion as compared with $934 million for the three months ended March 31, 2007. The effective tax rate for the three months ended June 30, 2007, was 25.2% as compared with 25.8% for the three months ended March 31, 2007. Minority interest during the three months ended June 30, 2007, was $497 million (of which Arcelor Brasil is $152 million) as compared with $436 million (of which Arcelor Brasil is $141 million) for the three months ended March 31, 2007. Net income for the three months ended June 30, 2007, increased to $2.7 billion as compared with $2.3 billion for the three months ended March 31, 2007. Liquidity and Capital Resources ArcelorMittal'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 June 30, 2007, the Company's cash and cash equivalents, including restricted cash and short-term investments, amounted to $6.8 billion as compared to $8.3 billion at March 31, 2007. Net debt for the second quarter, which includes long-term debt plus short-term debt less cash and cash equivalents, restricted cash and short-term investments, increased by $4.5 billion to $23.2 billion. Gearing4 has increased from 35% to 42% and net debt to EBITDA ratio increased from 1.1x5 at March 31, 2007, to 1.2x at June 30, 2007. The increase in net debt was primarily due to the following: * Acquisition of Sicartsa, Mexico: $1.5 billion * Cash purchase of minority interests in Arcelor Brasil: $3.7 billion * Share buy-back and dividend: $1.0 billion The Company had total liquidity of $16.4 billion at June 30, 2007, consisting of cash and cash equivalents (including restricted cash and short-term investments of $6.8 billion), and available bank lines (including bank lines at the level of its operating subsidiaries) of $9.6 billion at June 30, 2007. Changes in current assets and current liabilities resulted in the use of cash during the three months ended June 30, 2007 of $587 million as compared to $653 million for the three months ended March 31, 2007, primarily due to an increase in trade accounts receivables and prepaid expenses, partly offset by an increase in trade payables. For the three months ended June 30, 2007, net cash provided by operating activities was $3.7 billion, as compared with $2.7 billion for the three months ended March 31, 2007. Capital expenditures during the three months ended June 30, 2007, increased to $1.3 billion as compared with $988 million for the three months ended March 31, 2007. Recent Developments * On July 26, 2007, ArcelorMittal announced that it has reached an agreement with the Polish Government to acquire the outstanding 25.2% shares of ArcelorMittal Poland currently held by the Polish State and Treasury Ministry. ArcelorMittal has agreed to acquire each share at a price of Polish zloty ("PLN") 6.5, valuing the remaining 25.2% of shares at approximately PLN 436 million (approx. $157 million). * On July 20, 2007, ArcelorMittal, announced that it had reached a preliminary agreement to acquire two steel tube businesses from Vallourec. Vallourec Precision Soudage (VPS) produces about 100,000 tonnes of welded steel tubes for application in the automotive industry from two sites in France. Also based in France, Vallourec Composants Automobiles Vitry (VCAV) specialises in the design and manufacturing of tubular components for the automotive industry. Combining them with ArcelorMittal's existing pipes and tubes business, will enable an even more complete product offering range to automotive customers. * On July 19, 2007, ArcelorMittal announced that it had been formally granted concessions by the Republic of Senegal to develop mining, transportation and logistics activities in the Faleme region of South East Senegal. * On July 10, 2007, ArcelorMittal announced the signing of agreement and installation of European Works Council ("EWC") agreement. The newly installed integrated ArcelorMittal EWC will replace the former EWCs that existed in both previous companies. * On June 29, 2007, Mittal Steel announced the publication of the legal documentation for its merger with ArcelorMittal, a Luxembourg subsidiary. This was the first step of the previously-announced two-step merger process between Mittal Steel and Arcelor S.A. In the first step, Mittal Steel will merge into its wholly-owned non-operating subsidiary ArcelorMittal. * On June 5, 2007, Mittal Steel publicly announced the results of its tender offer for the shares it did not hold in Arcelor Brasil. In the aggregate, Mittal Steel acquired 29.5% of the total share capital and 89.7% of the free float of Arcelor Brasil as of June 5, 2007, thereby increasing its previous 67.1% shareholding in Arcelor Brasil to 96.6%. Mittal Steel paid for the shares with $3.5 billion in cash and approximately 27.0 million Mittal Steel class A common shares, representing a total consideration of $5.2 billion. As required by Brazilian regulations, beginning on June 5, 2007 and ending at the latest on September 4, 2007, the remaining shareholders in Arcelor Brasil may sell their shares to Mittal Steel for R$53.89 per share (the same price offered to the Arcelor Brasil shareholders accepting the cash option of the offer) as adjusted pursuant to applicable law. On June 19, 2007, the Brazilian stock exchange regulator CVM announced that the Arcelor Brazil shares have been delisted. Mittal Steel will cause a general Arcelor Brasil shareholders' meeting to be held in order to approve the redemption of the remaining shares. The redemption price will be equal to R$53.89 per share. Mittal Steel therefore expects that it will subsequently acquire the 18.3 million Arcelor Brasil shares that remained outstanding after the closing of the tender offer, which are valued at approximately $0.5 billion. Following the tender offer an additional 7.9 million Arcelor Brasil shares were purchased, resulting in an outstanding balance of $0.3 billion. 4 Gearing defined as net debt divided by total equity 5 Based on 1H07 annualized levels MITTAL STEEL COMPANY N.V. CONSOLIDATED FINANCIAL & OTHER INFORMATION MITTAL STEEL COMPANY N.V. UNAUDITED 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. [TABLE OMITTED] MITTAL STEEL COMPANY N.V. CONSOLIDATED FINANCIAL & OTHER INFORMATION MITTAL STEEL COMPANY N.V. UNAUDITED CONSOLIDATED STATEMENTS OF INCOME DATA & OTHER INFORMATION [TABLE OMITTED] MITTAL STEEL COMPANY N.V. CONSOLIDATED FINANCIAL & OTHER INFORMATION MITTAL STEEL COMPANY N.V. UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS [TABLE OMITTED] |
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