ArcelorMittal Reports Second Quarter and First Half 2008 Results.LUXEMBOURG -- Regulatory News: ArcelorMittal (referred to as "ArcelorMittal", or "the Company") (New York New York, state, United States 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: MT; Madrid: 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: MTBL MTBL Mean Time Between Data Loss ; Luxembourg: MT), the world's leading steel company, today announces results for the three and six month periods ended June 30, 2008. H108 highlights: * Sales of $67.6 billion, up 31% compared with H107 * 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 1 of $13.1 billion, up 35% compared with H107 * Net Income of $8.2 billion, up 65% as compared with H107 * Capital expenditure of $2.3 billion in H108 Q208 highlights: * Sales of $37.8 billion, up 39% compared with Q207 * EBITDA of $8.0 billion, up 51% compared with Q207 * Net Income of $5.8 billion, up 114% as compared with Q207 * Capital expenditure of $1.4 billion in Q208 Recent Key Announcements * Groundbreaking global health and safety agreement signed with labour unions to further improve Occupational Health & Safety * Agreements signed to acquire Mid Vol Coal Group and Concept Group (2 metallurgical met·al·lur·gy n. 1. The science that deals with procedures used in extracting metals from their ores, purifying and alloying metals, and creating useful objects from metals. 2. coal companies located in West Virginia West Virginia, E central state of the United States. It is bordered by Pennsylvania and Maryland (N), Virginia (E and S), and Kentucky and, across the Ohio R., Ohio (W). Facts and Figures Area, 24,181 sq mi (62,629 sq km). Pop. , USA) * Allocated mining lease for the Karampada iron-ore deposit in Jharkhand, India * Acquisition of Bayou Steel (manufacture of structural steel in Louisiana, USA) * Launch of new clean technology venture capital fund Guidance for Q308 * Q308 EBITDA guidance to exceed $8.5 billion Commenting, Mr Lakshmi N. Mittal, Chairman 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 report results for the first half of 2008, with EBITDA of $13.1 billion up 35% over the same period in 2007. This reflects the diversity and strength of the ArcelorMittal business model, in particular the significant diversification of our value chain including our considerable mining operations. We continue to look for opportunities to further enhance our raw material self sufficiency, with recent investments being announced in Africa, the Americas and Australia. Our financial strength enables us to continue to invest heavily in the development of the business, particularly relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc brownfield See greenfield. growth and improving product quality and mix. This year we expect capital expenditures to reach $7 billion, representing 36% of 2007 EBITDA". [TABLE OMITTED] (In millions of Euros except earnings per share and shipments data) [TABLE OMITTED] [TABLE OMITTED] SECOND QUARTER 2008 EARNINGS ANALYST CONFERENCE CALL Additionally, ArcelorMittal management will host a conference call for members of the investment community to discuss the second quarter 2008 financial performance of ArcelorMittal at 9.30 am New York time / 2.30 pm London time / 3.30 pm CET CET abbr. Central European Time CET Central European Time CET n abbr (= Central European Time) → hora de Europa central CET abbr on Wednesday, July 30th 2008. The conference call will include a brief question and answer session with senior management. The conference call information is as follows: [TABLE OMITTED] 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 ArcelorMittal and its subsidiaries. These statements include financial projections and estimates and their underlying assumptions, statements regarding plans, objectives and expectations with respect to future operations, products and services, and statements regarding future performance. Forward-looking statements may be identified by the words "believe," "expect," "anticipate," "target" or similar expressions. Although ArcelorMittal's management believes that the expectations reflected in such forward-looking statements are reasonable, investors and holders of ArcelorMittal's securities are cautioned that forward-looking information and statements are subject to numerous risks and uncertainties, many of which are difficult to predict and generally beyond the control of ArcelorMittal, that could cause actual results and developments to differ materially and adversely from those expressed in, or implied or projected by, the forward-looking information and statements. These risks and uncertainties include those discussed or identified in the filings with the Luxembourg Stock Market Authority for the Financial Markets (Commission de Surveillance du Secteur Financier) and the United States 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 and Exchange Commission (the "SEC") made or to be made by ArcelorMittal, including ArcelorMittal's Annual Report on Form 20-F filed with the SEC. ArcelorMittal undertakes no obligation to publicly update its forward-looking statements, whether as a result of new information, future events, or otherwise. About ArcelorMittal ArcelorMittal is the world's leading steel company, with over 320,000 employees in more than 60 countries. ArcelorMittal is the leader in all major global steel markets, including automotive, construction, household appliances and packaging, with leading R&D and technology, as well as sizeable captive supplies of raw materials and outstanding distribution networks. With an industrial presence in over 20 countries spanning four continents, the Company covers all of the key steel markets, from emerging to mature. Through its core values of sustainability, quality and leadership, ArcelorMittal commits to operating in a responsible way with respect to the health, safety and wellbeing of its employees, contractors and the communities in which it operates. It is also committed to the sustainable management of the environment and of finite resources. ArcelorMittal recognises that it has a significant responsibility to tackle the global climate change challenge; it takes a leading role in the industry's efforts to develop breakthrough steelmaking technologies and is actively researching and developing steel-based technologies and solutions that contribute to combat climate change. In 2007 ArcelorMittal had revenues of $105.2 billion and crude steel production of 116 million tonnes, representing around 10 per cent of world steel output. ArcelorMittal is listed on the stock exchanges of New York (MT), Amsterdam (MT), Paris (MTP), Brussels (MTBL), Luxembourg (MT) and on the Spanish stock exchanges of Barcelona, Bilbao, Madrid and Valencia (MTS). For more information about ArcelorMittal visit: www.arcelormittal.com ARCELORMITTAL SECOND QUARTER 2008 AND FIRST HALF 2008 RESULTS ArcelorMittal, the world's leading steel company, today announced results for the three and six month periods ended June 30, 2008. Results for the three months ended June 30, 2008 versus results for the three months ended March 31, 2008 and three months ended June 30, 2007 ArcelorMittal's net income for the three months ended June 30, 2008, was $5.8 billion, or $4.20 per share, as compared with net income of $2.4 billion, or $1.69 per share, for the three months ended March 31, 2008, and $2.7 billion or $1.97 per share, for the three months ended June 30, 2007. Sales and 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. for the three months ended June 30, 2008, were $37.8 billion and $6.6 billion, respectively, as compared with sales and operating income of $29.8 billion and $3.6 billion, respectively, for the three months ended March 31, 2008. Sales and operating income for the three months ended June 30, 2007, were $27.2 billion and $4.2 billion, respectively. Total steel shipments for the three months ended June 30, 2008, were 29.8 million metric tonnes as compared with steel shipments of 29.2 million metric tonnes for the three months ended March 31, 2008 and steel shipments of 28.7 million metric tonnes for the three months ended June 30, 2007. Depreciation costs for the three months ended June 30, 2008, increased to $1.3 billion as compared with depreciation of $1.1 billion for each of the three-month periods ended March 31, 2008 and June 30, 2007. The increase was primarily due to capitalisation, scope additions and foreign exchange movements. Impairment losses for the three months ended June 30, 2008 amounted to $108 million which pertains primarily to a reduction of goodwill5. Impairment losses for the three months ended March 31, 2008 amounted to $301 million, including $200 million related to the disposal of 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. and reduction of goodwill of $95 million6. Income from equity method investments and other income for the three months ended June 30, 2008, was $552 million as compared with income from equity method investments and other income of $329 million for the three months ended March 31, 2008, and $257 million for the three months ended June 30, 2007. Income from equity method investments and other income were higher in the second quarter 2008 primarily due to higher operating results from various associates as well as dividend income received from available for sale investments totalling $115 million. 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 7 for the three months ended June 30, 2008, were $49 million as compared with $736 million for the three months ended March 31, 2008. This decrease resulted primarily from $411 million of gains related to the fair value of financial instruments for the three months ended June 30, 2008 as compared with $242 million loss for the three months ended March 31, 2008. Foreign exchange and other financing costs were lower at $16 million for the three months ended June 30, 2008 as compared to foreign exchange and other financing costs of $88 million for the three months ended March 31, 2008. Net interest expense, which includes bank fees, interest on loans and interest on pensions, increased to $444 million for the three months ended June 30, 2008 as compared to $406 million for the three months ended March 31, 2008, due to an increased level of borrowing (see "Liquidity and Capital Resources" below). Income tax expense for the three months ended June 30, 2008, increased to $933 million as compared with $596 million for the three months ended March 31, 2008. The effective tax rate for the three months ended June 30, 2008, was 13.1% as compared with 18.6% for the three months ended March 31, 2008. The effective tax rate was lower mainly due to a change in the geographical mix of income. The income tax expense for the three months ended June 30, 2007 was $1.1 billion, with an effective tax rate of 25.2%. Minority interest for the three months ended June 30, 2008, was $352 million as compared with $240 million for the three months ended March 31, 2008. The increase is due to higher income from ArcelorMittal South Africa South Africa, Afrikaans Suid-Afrika, officially Republic of South Africa, republic (2005 est. pop. 44,344,000), 471,442 sq mi (1,221,037 sq km), S Africa. , Sonasid and newly acquired companies with minority shareholders, partially offset by the acquisition of minority interests in ArcelorMittal Inox Brasil. Minority interest for the three months ended June 30, 2007, was $497 million. Analysis of segment operations Q2 2008 v Q1 2008 The results of operations by segment discussed below reflect the changes to ArcelorMittal's segmental segmental /seg·men·tal/ (seg-men´t'l) 1. pertaining to or forming a segment or a product of division, especially into serially arranged or nearly equal parts. 2. undergoing segmentation. reporting effective January 1, 2008 in light of the new Group Management Board ("GMB GMB (in Britain) General, Municipal and Boilermakers (Trade Union) ") structure announced on April 21, 2008. The results of the analysis prior to January 1, 2008 have not been recast re·cast tr.v. re·cast, re·cast·ing, re·casts 1. To mold again: recast a bell. 2. to reflect these changes. Flat Carbon Americas As from January 1, 2008, Mittal Canada flat and pipes and tubes businesses from Dofasco have been transferred to Long Carbon Americas and Europe. Total steel shipments in the Flat Carbon Americas segment were lower at 7.4 million metric tonnes for the three months ended June 30, 2008, as compared with steel shipments of 7.6 million metric tonnes for the three months ended March 31, 2008. Excluding the Sparrows Point plant, which was sold effective May 7, 2008, shipments for the three months ended June 30, 2008 were 7.1 million metric tonnes as compared to 7.0 million metric tonnes for the three months ended March 31, 2008. Sales were higher at $7.5 billion for the three months ended June 30, 2008, as compared with sales of $6.5 billion for the three months ended March 31, 2008. Operating income was higher at $1.4 billion for the three months ended June 30, 2008, as compared with operating income of $880 million for the three months ended March 31, 2008. Operating results for the three months ended June 30, 2008, as compared with the three months ended March 31, 2008, increased primarily due to higher shipments on a comparable basis and higher average selling prices The average sales price of goods or commodities. Especially used in the retail sector and technology distribution. , partially offset by increased input costs. Operating income for the three months ended June 30, 2008 was negatively impacted by $158 million due to a reduction of goodwill. Operating income for the three months ended March 31, 2008 was negatively impacted primarily by a $200 million impairment charge due to the disposal of Sparrows Point. Flat Carbon Europe As from January 1, 2008, the operations of ArcelorMittal Annaba flat and Skopje previously reported in the AACIS AACIS American Association for Collegiate Independent Study (conference) segment have been transferred to the Flat Carbon Europe segment. In addition, the entire operations of Galati are reported within Flat Carbon Europe. Total steel shipments in the Flat Carbon Europe segment were higher at 9.9 million metric tonnes for the three months ended June 30, 2008, as compared with steel shipments of 9.4 million metric tonnes for the three months ended March 31, 2008. Sales were higher at $11.8 billion for the three months ended June 30, 2008, as compared with sales of $9.3 billion for the three months ended March 31, 2008. Operating income increased to $1.7 billion for the three months ended June 30, 2008, as compared with operating income of $1.1 billion for the three months ended March 31, 2008. Operating results for the three months ended June 30, 2008, as compared to the three months ended March 31, 2008, increased due to higher volumes and higher selling prices, partly offset by higher input costs. Long Carbon Americas and Europe As from January 1, 2008, the Long Carbon Americas and Europe segment includes the operations of ArcelorMittal Annaba long, Sonasid, Zenica, and the global pipes and tubes business, which previously reported in the AACIS segment, and Mittal Canada flat which previously reported in the Flat Carbon Americas segment. The wire drawing businesses have been transferred to the Steel Solutions and Services segment. Total steel shipments in the Long Carbon Americas and Europe segment were higher at 8.1 million metric tonnes for the three months ended June 30, 2008, as compared with steel shipments of 7.8 million metric tonnes for the three months ended March 31, 2008. Sales were higher at $9.9 billion for the three months ended June 30, 2008, as compared with sales of $7.7 billion for the three months ended March 31, 2008. Operating income was higher at $1.6 billion for the three months ended June 30, 2008, as compared with operating income of $1.1 billion for the three months ended March 31, 2008. Operating results for the three months ended June 30, 2008, as compared with the three months ended March 31, 2008, increased due to higher volumes and improved average steel selling prices, partly offset by input price increases. Asia Africa and CIS Cis (sĭs), same as Kish (1.) (1) (CompuServe Information Service) See CompuServe. (2) (Card Information S ("AACIS") As from January 1, 2008, the AACIS segment excludes the operations of ArcelorMittal Annaba, Sonasid, Zenica, Skopje and the pipes and tubes businesses that have been transferred to the respective segments as discussed above. Total steel shipments in the AACIS segment were flat at 3.9 million metric tonnes for the three months ended June 30, 2008, as compared with the three months ended March 31, 2008. Sales were higher at $3.9 billion for the three months ended June 30, 2008, as compared with sales of $2.9 billion for the three months ended March 31, 2008. Operating income was higher at $1.3 billion for the three months ended June 30, 2008, as compared with operating income of $560 million for the three months ended March 31, 2008. Operating results for three months ended June 30, 2008, were higher as compared to the three months ended March 31, 2008, due to higher selling prices partly offset by input price increases. 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 578 thousand metric tonnes for the three months ended June 30, 2008, as compared with steel shipments of 528 thousand metric tonnes for the three months ended March 31, 2008. Sales increased to $2.6 billion for the three months ended June 30, 2008, as compared with $2.3 billion for the three months ended March 31, 2008. Operating income was higher at $308 million for the three months ended June 30, 2008, as compared with operating income of $166 million for the three months ended March 31, 2008. Operating results for the three months ended June 30, 2008, were higher than the three months ended March 31, 2008, primarily due to higher volumes and improved prices. Steel Solutions and Services8 As from January 1, 2008, the operations of ArcelorMittal wire drawing activities which previously reported within the Long Carbon Americas and Europe segment have been transferred to the Steel Solutions and Services segment. Total steel shipments in the Steel Solutions and Services segment were higher at 5.7 million metric tonnes in the three months ended June 30, 2008, as compared with steel shipments of 5.5 million metric tonnes for the three months ended March 31, 2008. Sales in the Steel Solutions and Services segment were higher at $7.1 billion for the three months ended June 30, 2008, as compared with sales of $5.7 billion for the three months ended March 31, 2008. Operating income was higher at $285 million for the three months ended June 30, 2008, as compared with operating income of $158 million for three months ended March 31, 2008, due primarily to higher average steel selling prices and higher volumes partially offset by input price increases. Liquidity and Capital Resources For the three months ended June 30, 2008, net cash provided by operating activities was $4.2 billion, as compared with $2.0 billion for the three months ended March 31, 2008. As of June 30, 2008, the Company's cash and cash equivalents (including restricted cash and short-term investments) amounted to $7.5 billion as compared to $7.2 billion at March 31, 2008. Net debt at June 30, 2008, 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, was $30.7 billion ($27.4 billion as at March 31, 2008). Gearing9 at June 30, 2008 was 46% as compared to 44% at March 31, 2008, and net debt to EBITDA ratio decreased to 1.2x10 at June 30, 2008, as compared to 1.4x11 at March 31, 2008. Net debt has increased primarily due to investments, increased working capital and share buy-backs. Operating working capital (defined as inventory plus receivables less payables) as at June 30, 2008 increased to $23.3 billion as compared to $19.0 billion as at March 31, 2008, mainly as a result of increases in 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 due to higher sales activity and inventory and accounts payables due to higher sales activity and increased input costs. Rotation days12 improved from 64 to 63 days. The Company had total liquidity of $15.8 billion as at June 30, 2008 (as compared to $13.9 billion as at March 31, 2008), consisting of cash and cash equivalents (including restricted cash and short-term investments) of $7.5 billion and available bank lines of $8.313 billion as at June 30, 2008. On May 27, 2008, the Company issued US dollar denominated bonds in two tranches totalling $3 billion. For the entire duration of the bonds the fixed rate has been swapped into floating rate. In June 2008, the Company entered into a hedging transaction14 in order to hedge USD USD In currencies, this is the abbreviation for the U.S. Dollar. 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. dollar denominated raw material purchases till 2012. The program represents approximately 60-75% of the dollar outflow based on current raw materials prices for Flat Carbon Western Europe Western Europe The countries of western Europe, especially those that are allied with the United States and Canada in the North Atlantic Treaty Organization (established 1949 and usually known as NATO). . Capital expenditures during the three months ended June 30, 2008, increased to $1.4 billion, as compared with $1.0 billion for the three months ended March 31, 2008. The Company continues to expect capital expenditures to total approximately $7.0 billion during 2008. Dividend and share buy-backs During the three months ended June 30, 2008, the Company returned $1.1 billion15 to shareholders, consisting of $510 million in cash dividends and $541 million in share buy-backs. With respect to the 44 million shares buy-back program, during the first half of 2008, the Company repurchased an aggregate of 22.6 million shares at an average price of $75.97 ([euro]50.70) for a total amount of $1,713 million16. Furthermore, in July 2008, the Company repurchased an aggregate of 10 million shares at an average price of $87.68 ([euro]55.58) for a total amount of $877 million. To date, the Company has purchased under the 44 million shares buy back program 32.7 million shares at an average price of $79.54 ([euro]52.19). (See appendix 3 "Share buy-back" below). Also in the first half of 2008, ArcelorMittal completed its $1.0 billion share buy-back program with the purchase of 14.6 million shares at an average price of $68.70 ([euro]46.60). Recent Developments: Upstream Activities: * On July 21, 2008 ArcelorMittal, announced that it had signed an agreement to acquire the Concept Group ("Concept"). Concept, located in southern West Virginia Southern West Virginia is a culturally and geographically distinct region in the U.S. state of West Virginia. Generally considered the heart of Appalachia, Southern West Virginia is known for its coal mining heritage and Southern affinity. and adjacent to the recently acquired Mid Vol Coal Group in the Central Appalachian Coal Basin, produced 0.8 million tons of metallurgical coking coal in 2007 and has control over recoverable saleable sale·a·ble adj. Variant of salable. saleable or US salable Adjective fit for selling or capable of being sold saleability or US reserves and resources estimated to be in excess of 57 million tons. * On July 16, 2008, ArcelorMittal announced it had acquired the remaining 60% of the shares in Rolanfer Recyclage S.A. ("Rolanfer") that it did not previously own. Rolanfer is based in Yutz (France) near Thionville on the Luxembourg border and operates a shredder at the port of Illange. * On June 29, 2008, ArcelorMittal announced that it had increased its stake in Macarthur Coal Limited from 14.9% to 19.9%, following the acquisition of a further 5% stake (10,607,830 shares) from Talbot Group Holdings. The shares were purchased at 20 Australian dollars per share, bringing ArcelorMittal's total investment in Macarthur Coal to $843 million Australian dollars (USD $810 million). * On June 23, 2008, ArcelorMittal announced that it had signed an agreement to acquire the Mid Vol Coal Group. Mid Vol, located in southern West Virginia and southwestern Virginia in the Central Appalachian Coal Basin, produced 1.5 million tons of metallurgical coking coal in 2007 and has estimated recoverable saleable reserves and resources in excess of 85 million tons. * On June 11, 2008, ArcelorMittal announced the allocation of a mining lease in respect of the Karampada iron ore deposit to the Company by the Governments of India and Jharkhand for its integrated steel plant to be based in Jharkhand. The Karampada iron ore deposit is located in West Singhbhum West Singhbhum is one of the districts of Jharkhand state, India. It came into being in 1990, when the old Singhbhum district was bifurcated. Chaibasa is the district headquarters. district of Jharkhand with estimated reserves of 65 million tonnes of iron ore. * On June 9, 2008, ArcelorMittal, announced that it had signed an agreement to acquire Bakermet, a market leader in the scrap metal recycling industry in Eastern Ontario Eastern Ontario is the region of the Canadian province of Ontario which lies in a wedge-shaped area between the Ottawa and St. Lawrence Rivers. It shares water boundaries with Quebec, to the north and New York State to south. Population: 1,392,346 (2001), est. , Canada. Bakermet, which specializes in all types of ferrous ferrous (fĕr`əs), iron in the +2 valence state. Containing or having to do with iron. The difference between ferrous and ferric is the number of valence electrons they contain (ferrous contains two and ferric contains three), which and non-ferrous metal, processed approximately 130,000 short tons of ferrous and 40 million pounds of non-ferrous metals in 2007. The plant, located near Ottawa, will secure upstream self sufficiency in shredded shred n. 1. A long irregular strip that is cut or torn off. 2. A small amount; a particle: not a shred of evidence. tr.v. metal for ArcelorMittal's Contrecoeur mill (ArcelorMittal Montreal). * On April 23, 2008, ArcelorMittal announced that it had reached an agreement with Coal of Africa Limited ("CoAL"), a coal development company operating in South Africa. ArcelorMittal will enter into an off-take agreement with CoAL relating to two coal mines. The first, Baobab baobab (bä`ōbăb', bā`ō–), gigantic tree of India and Africa, exceeded in trunk diameter only by the sequoia. The trunks of living baobabs are hollowed out for dwellings; rope and cloth are made from the bark and condiments , is 100% owned by CoAL and has an estimated yield of 2.45 million tonnes per annum Per annum Yearly. . The second, Thuli, is 74 % owned by CoAL and has an estimated yield of 4.2 million tonnes per annum. Full production at both mines is expected to be achieved by 2011. * On April 10, 2008, ArcelorMittal announced the acquisition of three coal mines and associated assets in Russia for a total consideration of $718 million. Steel Production Initiatives: * On July 22, 2008, ArcelorMittal announced a [euro]76 million ($118 million) investment to expand electrical steel Electrical steel, also called lamination steel, silicon electrical steel, silicon steel or transformer steel, is specialty steel tailored to produce certain magnetic properties, such as a small hysteresis area (small energy dissipation per cycle, or low production capacity at its Saint Chely d'Apcher plant in Southern France Southern France (or the South of France), colloquially known as Le Midi, is a loosely defined geographical area consisting of the regions of France that border the Atlantic Ocean south of the Gironde, Spain, the Mediterranean Sea, Italy, and Switzerland south of the , a move in line with the Group's strategy to strengthen its position in high added value Added value in financial analysis of shares is to be distinguished from value added. Used as a measure of shareholder value, calculated using the formula:
* On July 3, 2008, ArcelorMittal and AREVA signed an agreement for a [euro]70 million ($110 million) investment aimed at increasing production of certain products for the nuclear industry, at the steel plant of Industeel, a subsidiary of ArcelorMittal. The investment, which will be staggered between 2008 and 2010, is targeted to increase ingot ingot Mass of metal cast into a size and shape such as a bar, plate, or sheet convenient to store, transport, and work into a semifinished or finished product. The term also refers to a mold in which metal is so cast. production capacity significantly (from 35,000 tonnes to 50,000 tonnes per year). In addition, the two companies announced that they plan to implement a joint 3-year metallurgy metallurgy (mĕt`əlûr'jē), science and technology of metals and their alloys. Modern metallurgical research is concerned with the preparation of radioactive metals, with obtaining metals economically from low-grade ores, with research and development program that will be conducted at the Creusot Materials Research Center. * On June 27, 2008, ArcelorMittal, Hunan Valin Group and Hunan Valin Steel Co. Ltd. announced a new development in their relationship with the launch of Valin ArcelorMittal Automotive Steel, an industrial and commercial automotive joint venture that will have an annual production capacity of 1.2 million tonnes of flat carbon steel, mainly for automotive applications. Products will include cold rolled steel, galvannealed steel and pure zinc galvanized gal·va·nize tr.v. gal·va·nized, gal·va·niz·ing, gal·va·niz·es 1. To stimulate or shock with an electric current. 2. steel. The establishment of this new joint venture remains subject to regulatory approval. Hunan Valin Steel Co., Ltd will own 34% of the new joint venture and ArcelorMittal and Hunan Valin Group will each have a 33% equity share. The new activity will be located in Hunan Province next to Hunan Valin Steel Co.'s subsidiary, Lianyuan Steel, which will supply hot rolled coil to the new joint venture. * On June 16, 2008, ArcelorMittal announced that it had signed an agreement to acquire Bayou Steel, a producer of structural steel products with facilities in LaPlace, Louisiana LaPlace is a unincorporated community in the Greater New Orleans metropolitan area and a census-designated place in St. John the Baptist Parish, Louisiana, on the East Bank of the Mississippi River. [1] [2] The population was 27,684 at the 2000 census. , and Harriman, Tennessee, for $475 million. The transaction is subject to regulatory approval. Bayou Steel is an independent producer of medium and light structural steel and bar size products. Through its Mississippi River Mississippi River River, central U.S. It rises at Lake Itasca in Minnesota and flows south, meeting its major tributaries, the Missouri and the Ohio rivers, about halfway along its journey to the Gulf of Mexico. Recycling division, Bayou Steel operates an automobile shredder at the LaPlace facility, as well as barge wrecking and full-service scrap yards at LaPlace and its facility in Harvey, Louisiana Harvey is a census-designated place and town in Jefferson Parish, Louisiana, United States. Harvey is on the West Bank of the Mississippi River, within the Greater New Orleans Metropolitan area. The population was 22,226 at the 2000 census. . The company also has a deepwater dock and distribution network, including four stocking locations in the United States. * On April 16, 2008, ArcelorMittal announced that it would be expanding its joint venture partnership with Nippon Steel Corporation by building a new continuous galvanising Adj. 1. galvanising - affected by emotion as if by electricity; thrilling; "gave an electric reading of the play"; "the new leader had a galvanic effect on morale" galvanizing, galvanic, electric line at the I/N I/N Interference to Noise Ratio Kote facility in New Carlisle, Indiana New Carlisle is a town in suburban St. Joseph County, Indiana, United States. The population was 1,505 at the 2000 census. Geography New Carlisle is located at (41.704134, -86.504636)GR1. . The new line will have an annual capacity of 480,000 metric tonnes and, upon completion, will double I/N Kote's hot-dipped galvanised production capacity. The new line will offer high-grade, high-quality coated sheets that promote improved safety and fuel efficiency in automobiles. Downstream Activities * On July 25, 2008, ArcelorMittal acquired a 70% share of Manchester Tubos e Perfilados S.A, a Brazilian steel processor and distributor located in Contagem, Minas Gerais Minas Gerais (mē`nəs zhərīs`) [Port.,=various mines], state (1996 pop. 16,660,691), 226,707 sq mi (587,171 sq km), E Brazil. The capital is Belo Horizonte. Minas Gerais continues to produce more than half of Brazil's mineral wealth. . This new acquisition will reinforce ArcelorMittal's downstream position in Brazil, following the acquisition on April 3, 2008 of a 50% stake in Gonvarri Brasil. With the acquisition of Manchester, and with its partnership with Gonvarri, ArcelorMittal will widen its product offering in the distribution segment in Brazil. The Group will now offer an extended range of flat products (coils and blanks), profiles, tubes and pipes. * On July 14, 2008, ArcelorMittal and Primex (Germany) reached an agreement whereby ArcelorMittal Stainless International acquired the 35% stake in Uginox Sanayi ve Ticaret Limited Sirketi which was owned by Primex. * On July 1, 2008, ArcelorMittal acquired Astralloy Steel Products Inc. ("Astralloy") a subsidiary of IMS (1) See IP Multimedia Subsystem. (2) (Information Management System) An early IBM hierarchical DBMS for IBM mainframes. IMS was widely implemented throughout the 1970s under MVS and continues to be used under z/OS. International Metal Service. Astralloy operates three warehouses and employs 60 people 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. . Its 2007 revenues were $34 million. * On June 30, 2008, ArcelorMittal announced its intention to acquire 60% of the entire issued share capital of Dubai Steel Trading Company LLC (Logical Link Control) See "LANs" under data link protocol. LLC - Logical Link Control ("DSTC DSTC Dynamic Stability and Traction Control (Volvo) DSTC Distance DSTC Distributed Systems Technology Centre (Australian government/industry consortium) DSTC J. F. LLC"). DSTC LLC's distributes approximately 120,000 tonnes of products per year. * On April 3, 2008, ArcelorMittal announced the acquisition of a 50% share of Gonvarri Brasil to form a Steel Service Centre joint venture. Gonvarri Brasil is one of the major players for servicing automotive, industry and distribution customers. The company is one of the leaders of flat steel processing in Brazil and its activities include pickling pickling, n the process of cleansing from metallic surfaces the products of oxidation and other impurities by immersion in acid. pickling , slitting, blanking, and cutting to length, with a total processing capacity of around 1.3 million tons of steel. Disposals: * On May 7, 2008, ArcelorMittal announced that the Court appointed trustee had completed the previously announced sale of ArcelorMittal's Sparrows Point steel mill to OAO OAO Orbiting Astronomical Observatory OAO Over and Out OAO One And Only OAO Ontario Association of Orthodontists OAO Owned and Operated OAO Ontario Association of Optometrists OAO Opticians Association of Ohio OAO Orthogonalized Atomic Orbital Severstal for $810 million, net of debt. Other key events * On July 11, 2008, ArcelorMittal announced the launch of a new clean technology venture capital fund (with an initial clean technology investment of $20 million in Miasole). * On June 16, 2008, ArcelorMittal announced that following purchases of 11.31% on June 13, 2008, the Company now owns 24.99% of the Turkish steel company Erdemir. * On June 3, 2008, ArcelorMittal and trade unions representing its employees across the globe signed a new agreement to further improve health and safety standards Safety standards are standards designed to ensure the safety of products, activities or processes, etc. They may be advisory or compulsory and are normally laid down by an advisory or regulatory body that may be either voluntary or statutory. throughout the Company. The agreement, the first of its kind in the steel industry, recognises the vital role played by trade unions in improving health and safety. It sets out minimum standards in every site the Company operates in order to achieve world class performance. These standards include the commitment to form joint management/union health and safety committees as well as training and education programmes in order to make a meaningful impact on overall health and safety across the Company. Also included in the agreement is the creation of a joint management/union global health and safety committee that will target ArcelorMittal plants in order to help them to further improve their health and safety performance. The agreement was signed on June 3, 2008 by ArcelorMittal, the European Metalworkers' Federation The European Metalworkers' Federation (EMF), founded in 1971, is a federation of 68 metalworkers' unions from 31 countries, representing a combined total of 6.5 million affiliates. It is based in Brussels, Belgium, and the general secretary is Peter Scherrer. , the United Steelworkers United Steelworkers (USW) historic labour union representing workers in steel, aluminum, and other metallurgical industries for much of the 20th century. In the U.S. and the International Metalworkers' Federation International Metalworkers' Federation (IMF) is a global union federation of metalworkers' trade unions, founded in Zürich, Switzerland in August 1893. As of 2005, it has more than 200 member organisations in 100 countries, representing a combined membership of 25 million workers. . * On May 2, 2008, ArcelorMittal announced a series of measures which will restore a 25% free float Free float An exchange rate system characterized by the absence of government intervention. Also known as clean float. in China Oriental Group Company ("China Oriental") in compliance with the listing rules of the Hong Kong Stock Exchange The Hong Kong Stock Exchange (Traditional Chinese: 香港交易所, also 港交所; abbreviated as HKEX; HKSE: 0388 ) is the stock exchange of Hong Kong. ("HKSE HKSE Hong Kong Stock Exchange "). At the time of the close of its tender offer on February 4, 2008 ArcelorMittal had reached a 47% shareholding in China Oriental. Given the 45.4% shareholding by the founding shareholders, this left a free float of 7.6% against a minimum HKSE listing requirement of 25%. The measures to restore the minimum free float have been achieved by means of sale of 17.4% stake to ING Bank and Deutsche Bank Deutsche Bank AG (IPA: /'dɔɪ.tʃə/[1]) (ISIN: DE0005140008, NYSE: DB) (English: German Bank , together with put option agreements entered into with both banks. As a result of the measures ArcelorMittal's shareholding has been reduced to 29.6%. * On April 29, 2008, ArcelorMittal announced that it had signed new long-term contracts with Companhia Vale do Rio Doce Summary Companhia Vale do Rio Doce (CVRD) is a global diversified mining company, the second largest mining company in the world, and the largest logistics operator in Brazil. ("Vale") to supply iron ore and pellets to its plants in Europe, Africa and the Americas. Under these long-term contracts, which are the largest ever signed between a steel company and an iron ore supplier, Vale will supply approximately 480 million tonnes of iron ore and pellets to ArcelorMittal plants over the next ten years (2007-2016). For further disclosure about each of these recent developments, please refer to our website www.arcelormittal.com Q308 Outlook The Company expects third quarter 2008 EBITDA to exceed $8.5 billion. Flat Carbon Americas' EBITDA is expected to significantly increase due to operational improvements and a better operating environment In computing, an operating environment is the environment in which users run programs, whether in a command line interface, such as in MS-DOS or the Unix shell, or in a graphical user interface, such as in the Macintosh operating system. . Asia, Africa & CIS EBITDA is expected to increase due to improved volumes and price increases. Long Carbon's EBITDA is expected to improve. ArcelorMittal Steel Solutions and Services EBITDA is expected to remain flat. Flat Carbon Europe's EBITDA is expected to decrease following seasonal shutdowns and increased cost pressure, while Stainless Steel profitability is set to decline. The full year effective tax rate is expected to be between 15-20%. ARCELORMITTAL 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] ARCELORMITTAL UNAUDITED CONSOLIDATED STATEMENTS OF INCOME [TABLE OMITTED] ARCELORMITTAL UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS [TABLE OMITTED] [TABLE OMITTED] Appendix 2 - Q2 2008 [TABLE OMITTED] Appendix 2a - Q2 2008 < < [TABLE OMITTED] Appendix 3 - Share buy-back [TABLE OMITTED] 1 EBITDA is defined as operating income plus depreciation and impairment. 2 The financial information in this press release and Appendix 1 have been prepared in accordance 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). ("IFRS IFRS International Financial Reporting Standard(s) IFRS Inter Frame Relay Service IFRS Indiana Facilities Registry System ") as issued by the International Accounting Standards Board  An editor has expressed concern that this article or section is .Please help improve the article by adding information and sources on neglected viewpoints, or by summarizing and ("IASB IASB See International Accounting Standards Board (IASB). "). While the interim financial information included in this announcement has been prepared in accordance with IFRS applicable to interim periods, this announcement does not contain sufficient information to constitute an interim financial report as defined in International Accounting Standards 34, "Interim Financial Reporting". Unless otherwise noted the numbers in the press release have not been audited. 3 US dollars have been translated into Euros using an average exchange rate ($/Euro) of 1.5622, 1.4983, 1.3481, 1.5305 and 1.3291 for Q2 2008, Q1 2008, Q2 2007, H1 2008 and H1 2007, respectively. 4 Shipments defined as the sum of segment shipments excluding AM3S AM3S Arcelor Mittal Steel Solutions and Services . Some intercompany shipments included. 5 As required by IFRS, this reduction of goodwill resulted from the recognition of net operating losses Net operating losses Losses that a firm can take advantage of to reduce taxes. previously not recognized in purchase accounting, amongst others due to a reorganisation Noun 1. reorganisation - the imposition of a new organization; organizing differently (often involving extensive and drastic changes); "a committee was appointed to oversee the reorganization of the curriculum"; "top officials were forced out in the cabinet in 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. (amounting to $158 million) in the second quarter. 6 As required by IFRS, this reduction of goodwill resulted from the recognition of net operating losses previously not recognized in purchase accounting, amongst others due to a reorganisation in Western Europe in the first quarter. 7 Net financing costs include net foreign exchange and other financing costs, net interest expense and revaluation Revaluation A calculated adjustment to a country's official exchange rate relative to a chosen baseline. The baseline can be anything from wage rates to the price of gold to a foreign currency. In a fixed exchange rate regime, only a decision by a country's government (i.e. of financial instruments. 8 Steel Solutions and Services shipments are not consolidated. 9 Gearing is defined as net debt divided by total equity. 10 Based on H108 annualised EBITDA. 11 Based on Q108 annualised EBITDA. 12 Rotation days are defined as days of accounts receivable plus days of inventory minus days of accounts payable. Days of accounts payable and inventory are a function of cost of goods sold Cost of goods sold The total cost of buying raw materials, and paying for all the factors that go into producing finished goods. cost of goods sold . Days of accounts receivable are a function of sales. 13 Includes back-up lines for commercial paper program of $4.7 billion ([euro]3.0 billion) 14 Hedging has been implemented using a combination of forward contracts and options in order to cap adverse effects due to market movements over the period. 15 Excluding dividends totalling $119 million paid to minority shareholders of subsidiaries, primarily in Morroco and Brazil. 16 Includes $66 million relating to payments made in July 2008. ArcelorMittal holds, indirectly and directly, approximately 63.8 million shares in treasury as of June 30, 2008 and approximately 73.8 million shares as of July 29, 2008. 17 Amounts are derived from the Company's audited consolidated financial statements Consolidated Financial Statements The combined financial statements of a parent company and its subsidiaries. Notes: Because consolidated financial statements present an aggregated look at the financial position of a parent and its subsidiaries, they enable you to gauge for the year ended December 31, 2007. 18 EBITDA is defined as operating income plus depreciation and impairment. 19 Steel Solutions and Services shipments are not consolidated. 20 Total of all finished production of fines, concentrate, pellets and lumps (includes share of production and strategic long term contracts). 21 Employee figures for Q208 include scope additions primarily for Noble, Russian mines and Unicon offset by disposal of Sparrows Point. |
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