ArcelorMittal Reports Third Quarter 2009 Results.LUXEMBOURG Luxembourg, province, Belgium Luxembourg, Du. Luxemburg, province (1991 pop. 232,813), 1,706 sq mi (4,419 sq km), SE Belgium, in the Ardennes, bordering on the Grand Duchy of Luxembourg in the east and on France in the south. -- Regulatory News: ArcelorMittal (referred to as "ArcelorMittal", or the "Company") (MT (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 , 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. , 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 , Luxembourg, Paris) 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. (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. )), the world's leading steel company, today announced results for the three and nine month periods ended September September: see month. 30, 2009. Highlights for the three months ended September 30, 2009: * Shipments of 18.2 million tonnes, up 7% as compared to Q2 2009 * 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 $1.6 billion, up 30% as compared to Q2 2009 * Net income of $0.9 billion in Q3 2009 * Cash flow from operations Cash flow from operations A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses of $2.4 billion in Q3 2009 * Dividend to be maintained at $0.75 per share for 2010 Industrial and financial plan targets achieved ahead of schedule: * $2.2 billion of 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. sustainable cost reduction achieved as of Q3 2009 * Working capital rotation days target2 achieved, down to 83 days in Q3 2009 from 98 days in Q2 2009 * Net debt reduced to $21.6 billion, down by $10.9 billion over last twelve months New initiatives: * Selected growth projects reinitiated in some key emerging markets * Financial policy adjusted with new gearing3 and Net debt/average EBITDA4 targets * Strategic investment in 1 million tonne tonne measure of weight or mass; 1 tonne=1000 kg. See also ton. Indian re-roller Uttam Galva * Successful debut 30-year bond issuance of $1.0 billion on October October: see month. 1, 2009 Guidance for fourth quarter of 2009: * EBITDA expected to be between $2.0 - $2.4 billion Commenting, Mr. Lakshmi Lakshmi: see Hinduism. Lakshmi or Laksmi Hindu and Jain goddess of wealth and good fortune. The consort of Vishnu, she is said to have taken different forms to be with him in each of his incarnations. N. Mittal Mittal is a gotra of the Agrawal community, often used as a last name. It may refer to:
"As anticipated, we have seen the first signs of recovery in the third quarter. In response to this increased demand, a number of our facilities have now been re-started, and we expect fourth quarter crude steel capacity utilization Capacity Utilization measures the rate at which a firm makes use of their capital productive capacities, such as factories and machinery. Capacity Utilization generally rises when the economy is healthy and falls when demand softens. to be approximately 70%. We should continue to see further gradual improvement through 2010, although the operating environment In computing, an operating environment is the environment in which users run programs, whether in a command line interface, such as in MS-DOS or the Unix shell, or in a graphical user interface, such as in the Macintosh operating system. remains challenging." Financial highlights (on the basis of IFRS IFRS International Financial Reporting Standard(s) IFRS Inter Frame Relay Service IFRS Indiana Facilities Registry System (5), amounts in US$ and Euros(6 )): (In millions of U.S. dollars except earnings per share and shipments data) [TABLE OMITTED] (In millions of Euros except earnings per share and shipments data) [TABLE OMITTED] THIRD QUARTER 2009 NEWS CONFERENCE (FOR MEDIA) ArcelorMittal management will host a news conference: Date: Wednesday Wednesday: see week. , October 28,2009 Time: 5.30 am U.S. Eastern time / 9.30 am GMT (Greenwich Mean Time) See UTC. GMT - Universal Time 1 / 10.30 am CET CET abbr. Central European Time CET Central European Time CET n abbr (= Central European Time) → hora de Europa central CET abbr The dial in numbers in numbered parts; as, a book published in numbers. See also: Number : [TABLE OMITTED] Access code for each language on the replay: Language > Access code English > 069434 Spanish > 181439 French > 414790 The news conference will be available via a live video webcast on www.arcelormittal.com. THIRD QUARTER 2009 EARNINGS ANALYST CONFERENCE CALL Additionally, ArcelorMittal management will host a conference call for members of the investment community to discuss the third quarter 2009 financial performance at: Date: Wednesday, October 28,2009 Time: 10.30 am U.S. Eastern time / 2.30 pm GMT / 3.30 pm CET The conference call will include a brief question and answer session with senior management. The dial in numbers: [TABLE OMITTED] A replay of the conference call will be available for one week by dialing (access code 634819#) The presentation will be available via a live video webcast on www.arcelormittal.com Forward-Looking Statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. This document may contain forward-looking information and statements about 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 for the year ended December 31, 2008 filed with the SEC. ArcelorMittal undertakes no obligation to publicly update its forward-looking statements, whether as a result of new information, future events, or otherwise. About ArcelorMittal ArcelorMittal is the world's leading steel company, with operations 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 Captive supply is a term for that part of the supply that is not owned by a company but is used by the company to maximize its own profits often at the unknowing expense of those who actually own those 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 well-being 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 finite - compact 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 2008, ArcelorMittal had revenues of $124.9 billion and crude steel production of 103.3 million tonnes, representing approximately 10 per cent of world steel output. ArcelorMittal is listed on the stock exchanges of New York (MT), Amsterdam (MT), Paris (MT), Brussels (MT), Luxembourg (MT) and on the Spanish Spanish, river, c.150 mi (240 km) long, issuing from Spanish Lake, S Ont., Canada, NW of Sudbury, and flowing generally S through Biskotasi and Agnew lakes to Lake Huron opposite Manitoulin island. There are several hydroelectric stations on the river. stock exchanges of Barcelona, Bilbao, Madrid and Valencia (MTS). For more information about ArcelorMittal visit: www.arcelormittal.com. ARCELORMITTAL THIRD QUARTER 2009 AND NINE MONTHS OF 2009 RESULTS ArcelorMittal, the world's largest and most global steel company, today announced results for the three and nine month periods ended September 30, 2009. Analysis of results for three months ended September 30, 2009 versus three months ended June 30, 2009 and three months ended September 30, 2008 ArcelorMittal recorded net income for the three months ended September 30, 2009 of $0.9 billion, or $0.60 per share, as compared with a net loss of $0.8 billion, or $(0.57) per share, for the three months ended June 30, 2009, and net income of $3.8 billion or $2.79 per share, for the three months ended September 30, 2008. Sales for the three months ended September 30, 2009 were $16.2 billion, higher as compared with $15.2 billion for the three months ended June 30, 2009 and down sharply from $35.2 billion for the three months ended September 30, 2008. Despite the improved demand during the third quarter of 2009 as compared to the second quarter of 2009, sales remain substantially lower year-on-year due to the global economic crisis, including a steep fall in selling prices. ArcelorMittal recorded operating income 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 September 30, 2009 of $0.3 billion, as compared with an operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. of $1.2 billion8 for the three months ended June 30, 2009 and operating income of $5.5 billion9 for the three months ended September 30, 2008. Total steel shipments for the three months ended September 30, 2009 were 18.2 million metric tonnes as compared with steel shipments of 17.0 million metric tonnes for the three months ended June 30, 2009 and 25.6 million metric tonnes for the three months ended September 30, 2008. As noted above, the sharp decrease year-on-year resulted from reduced steel production in response to falling demand amid the global economic crisis. Depreciation expenses remained flat at $1.2 billion for the three months ended September 30, 2009 as compared with the three months ended June 30, 2009. Depreciation expenses for the three months ended September 30, 2008 were $1.4 billion. During the three months ended September 30, 2009 ArcelorMittal Galati recorded an impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. amounting to $0.1 billion on coke oven assets. Income from equity method investments and other income for the three months ended September 30, 2009 resulted in a gain of $99 million, as compared to gains of $11 million and $386 million for the three months ended June 30, 2009 and September 30, 2008, respectively. Net interest expense (including interest expense and interest income), decreased to $387 million for the three months ended September 30, 2009 as compared to $401 million for the three months ended June 30, 2009, primarily due to a reduction in overall debt. (See "Liquidity and Capital Resources" below). Net interest expense for the three months ended September 30, 2008 amounted to $436 million. Foreign exchange and other net financing gains10 for the three months ended September 30, 2009 amounted to $106 million, as compared to costs of $142 million and $380 million for the three months ended June 30, 2009 and September 30, 2008, respectively. Gains related to the fair value of derivative instruments Derivative instruments Contracts such as options and futures whose price is derived from the price of an underlying financial asset. for the three months ended September 30, 2009 amounted to $6 million, as compared with losses of $20 million and $107 million for the three months ended June 30, 2009 and September 30, 2008, respectively. During the three months ended September 30, 2009, the Company also recorded a loss of $110 million (versus a $357 million loss in the second quarter of 2009) as a result of mark-to-market Mark-to-market Adjustment of the book value or collateral value of a security to reflect current market value. adjustments on the conversion options embedded Inserted into. See embedded system. in its recently issued convertible bonds.11 ArcelorMittal recorded an income tax benefit of $0.9 billion for the three months ended September 30, 2009, as compared to an income tax benefit of $1.2 billion for the three months ended June 30, 2009. The income tax expense for the three months ended September 30, 2008 was $0.7 billion. Profits attributable to non-controlling (minority) interest for the three months ended September 30, 2009 were $15 million as compared with losses attributable to non-controlling (minority) interest of $62 million for the three months ended June 30, 2009. Profits attributable to non-controlling (minority) interest for the three months ended September 30, 2008 were $414 million. Analysis of segment operations for the three months ended September 30, 2009 as compared to the three months ended June 30, 2009 Flat Carbon Americas Total steel shipments in the Flat Carbon Americas segment were higher at 4.2 million metric tonnes for the three months ended September 30, 2009, as compared with steel shipments of 3.5 million metric tonnes for the three months ended June 30, 2009. Sales increased to $3.3 billion for the three months ended September 30, 2009 as compared with sales of $2.8 billion for the three months ended June 30, 2009, due to higher volumes offset by slightly lower prices (a 1.8% decrease in average steel selling price). The segment recorded operating income of $0.1 billion for the three months ended September 30, 2009 as compared with an operating loss of $0.4 billion for the three months ended June 30, 2009. Flat Carbon Europe Total steel shipments in the Flat Carbon Europe segment were higher at 5.6 million metric tonnes for the three months ended September 30, 2009, as compared with 5.0 million metric tonnes for the three months ended June 30, 2009. Sales were higher at $4.9 billion for the three months ended September 30, 2009 as compared with sales of $4.5 billion for the three months ended June 30, 2009, primarily due to higher volumes, partially offset by lower prices (a 4.8% decrease in average steel selling price). The segment recorded an operating loss of $168 million for the three months ended September 30, 2009 as compared with an operating loss of $418 million for the three months ended June 30, 2009. Operating results for the three months ended September 30, 2009 include a non-cash gain of $50 million relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc hedges on raw material purchases as compared to $239 million for the three months ended June 30, 2009. Long Carbon Americas and Europe Total steel shipments in the Long Carbon Americas and Europe segment were lower at 5.0 million metric tonnes for the three months ended September 30, 2009 as compared with 5.3 million metric tonnes for the three months ended June 30, 2009. Sales were higher at $4.3 billion for the three months ended September 30, 2009 as compared with $4.0 billion for the three months ended June 30, 2009, primarily due to higher prices (a 5.3% increase in average steel selling price), partially offset by lower volumes. The segment recorded operating income of $292 million for the three months ended September 30, 2009 as compared with an operating loss of $51 million for the three months ended June 30, 2009. Asia Africa and CIS 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 slightly higher at 3.0 million metric tonnes for the three months ended September 30, 2009 as compared with 2.9 million metric tonnes for the three months ended June 30, 2009. Sales were higher at $2.0 billion for the three months ended September 30, 2009 as compared with $1.7 billion for the three months ended June 30, 2009 primarily due to higher prices (a 8.4% increase in average steel selling price) and a small increase in volumes. The segment recorded operating income of $96 million for the three months ended September 30, 2009 as compared with operating income of $20 million for the three months ended June 30, 2009. Stainless Steel 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 slightly lower at 354,000 metric tonnes for the three months ended September 30, 2009 as compared with steel shipments of 363,000 metric tonnes for the three months ended June 30, 2009. Sales were higher at $1.1 billion for the three months ended September 30, 2009 as compared with $1.0 billion for the three months ended June 30, 2009, primarily due to higher prices (a 13.9% increase in average steel selling price), which more than offset lower volumes. The segment recorded operating income of $51 million for the three months ended September 30, 2009 as compared with an operating loss of $64 million for the three months ended June 30, 2009. Steel Solutions and Services Total steel shipments in the Steel Solutions and Services segment12 were lower at 4.2 million metric tonnes in the three months ended September 30, 2009 as compared with steel shipments of 4.5 million metric tonnes for the three months ended June 30, 2009. Sales in the Steel Solutions and Services segment were lower at $3.2 billion for the three months ended September 30, 2009 as compared with $3.4 billion for the three months ended June 30, 2009, primarily due to lower volumes partially offset by an increase in prices (a 2.6% increase in average steel selling price). The segment recorded an operating loss of $60 million for the three months ended September 30, 2009 as compared with an operating loss of $286 million for three months ended June 30, 2009. Liquidity and Capital Resources For the three months ended September 30, 2009, net cash provided by operating activities was $2.4 billion, compared to $1.7 billion for the three months ended June 30, 2009. The cash inflow in·flow n. 1. The act or process of flowing in or into: an inflow of water; an inflow of information. 2. from operating activities for the third quarter of 2009 included $1.3 billion generated by operating working capital changes. Other operating activities for the three months ended September 30, 2009 include a non-cash charge Non-Cash Charge A charge off, made by a company against earnings, that does not require an initial outlay of cash. Notes: Non-cash charges are typically against the depreciation, amortization, and depletion accounts on a company's balance sheet. of $110 million related to convertible bonds (versus $357 million in the second quarter of 2009), and a non-cash gain of $50 million relating to hedges on raw material purchases (versus $239 million in the second quarter of 2009). In addition, the Company made payments under voluntary separation schemes of $178 million (versus $221 million in the second quarter of 2009). Net cash used in investing activities for the three months ended September 30, 2009 was $0.7 billion, compared to $0.5 billion for the three months ended June 30, 2009. Other investing activities outflow of $83 million for the three months ended September 30, 2009 includes $55 million of instalment payments for the purchase of non-controlling (minority) interests in Ostrava as previously announced. Capital expenditures remained flat at $0.6 billion for the three months ended September 30, 2009 and June 30, 2009, respectively. During the third quarter of 2009, the Company paid dividends amounting to $306 million, which included $282 million paid to ArcelorMittal shareholders and $24 million to non-controlling (minority) shareholders in subsidiaries. At September 30, 2009, the Company's cash and cash equivalents (including restricted cash and short-term 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 $5.9 billion as compared to $7.3 billion at June 30, 2009. Net debt13 at September 30, 2009 was $21.6 billion (as compared with $22.9 billion at June 30, 2009). Operating working capital (defined as inventory plus receivables Receivables An asset designation applicable to all debts, unsettled transactions or other monetary obligations owed to a company by its debtors or customers. Receivables are recorded by a company's accountants and reported on the balance sheet, and they and include all debts owed less payables Payables Related: Accounts payable ) at September 30, 2009 was $13.7 billion as compared to $14.9 billion at June 30, 2009, due mainly to higher trade accounts payables as purchasing increased in line with increased production. Rotation days14 decreased from 98 to 83 days. The Company had liquidity of $18.4 billion at September 30, 2009 (excluding the $1 billion 30-year bond issuance on October 1, 2009 discussed below), compared with liquidity of $22.7 billion at June 30, 2009, consisting of cash and cash equivalents (including restricted cash and short-term investments) of $5.9 billion and $12.5 billion of available credit lines. During the third quarter 2009, the Company prepaid pre·pay tr.v. pre·paid, pre·pay·ing, pre·pays To pay or pay for beforehand. pre·pay  ment n. $3.4 billion of the Company's [euro]17 billion Credit
Facility and cancelled a $3.2 billion credit facility in connection with
its previously announced covenant amendment agreement. As of September
30, 2009, the Company's leverage ratio (net debt to last twelve
months EBITDA), which is the ratio used in the Company's principal
financing facilities, stood at 3.3X versus 1.7X at June 30, 2009.
On October 1, 2009, ArcelorMittal priced an issuance of $1 billion principal amount of 7% bonds due 2039 (the yield of the bond is 7.4%). Including this amount, ArcelorMittal has refinanced since March 31, 2009, approximately $12.4 billion of debt through a number of capital markets transactions. Update on management gains, fixed cost reduction program and capacity utilisation The Company has met its target to achieve management gains of $2 billion of sustainable SG&A and fixed cost reductions in 2009 ahead of schedule. As of the end of the third quarter of 2009, the Company has achieved annualized sustainable savings of $2.2 billion. The Company has also achieved $7.3 billion ($6.2 billion at a constant dollar15) of annualized temporary fixed cost savings in Q3 2009 resulting from industrial optimization optimization Field of applied mathematics whose principles and methods are used to solve quantitative problems in disciplines including physics, biology, engineering, and economics. in response to lower demand. Capacity utilisation increased to approximately 61% in the third quarter of 2009, as compared to approximately 50% in the second quarter of 2009. Dividend maintained at $0.75 per share for 2010 The Board of Directors has recommended to maintain the Company's base dividend at $0.75 for full-year 2010. As a consequence, the Board of Directors will submit to a shareholders vote, at the next annual general meeting, a proposal to maintain the quarterly dividend payment at $0.1875. The dividend payments would occur on a quarterly basis for the full year 2010. Consequently, the new quarterly dividend payments would take place on March 15, 2010, June 14, 2010, September 13, 2010 and December 15, 2010, taking into account that the first quarter dividend payment to be paid on March 15, 2010 shall be an interim dividend. Final payment of current year dividend of $0.1875 per share will be payable on December 14, 2009. Recent Developments: * On October 9, 2009, ArcelorMittal signed a definitive agreement to divest To deprive or take away. Divest is usually used in reference to the relinquishment of authority, power, property, or title. If, for example, an individual is disinherited, he or she is divested of the right to inherit money. its non-controlling (minority) interest in Wabush Mines, Canada. ArcelorMittal will receive consideration of $34.28 million for its 28.6% stake in Wabush. ArcelorMittal considered that its stake in Wabush Mines was no longer a core part of the Company's mining strategy. The mine represented 31 million tons of iron ore reserve and 1.2 million tons of iron ore produced for ArcelorMittal in 2008. After this disposal ArcelorMittal continues to have significant mining operations and resources in Canada, including ArcelorMittal Mines Canada (formerly Quebec Cartier Mining). * On October 1, 2009, ArcelorMittal priced its 30-year, $1 billion principal amount of 7% bonds due 2039. The yield of the bonds is 7.4%. * On September 16, 2009, ArcelorMittal announced at its investor day that the Company had set new targets for gearing and leverage going forward. ArcelorMittal set a target range for gearing16 of between 25% to 40%. The Company also set goals for maintaining leverage levels (which it measures by dividing net debt by EBITDA based on a yearly average EBITDA from January 1, 2004). * On September 7, 2009, ArcelorMittal launched a tender offer for the acquisition of 29.4% of the shares in Uttam Galva Steels Limited, a 1 million tonne leading producer of cold rolled steel, 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. products (including plain and corrugated cor·ru·gate v. cor·ru·gat·ed, cor·ru·gat·ing, cor·ru·gates v.tr. To shape into folds or parallel and alternating ridges and grooves. v.intr. ) and color coated coils and sheets based in Western India. On September 3, 2009, ArcelorMittal signed a share purchase agreement with the existing promoter A person who devises a plan for a business venture; one who takes the preliminary steps necessary for the formation of a corporation. Promoters are the people, who, for themselves or on behalf of others, organize a corporation. , the R. K. Miglani family, for the acquisition of the 5.6% shares in the Company. The transaction value for a 35% stake is 5 billion Indian Rupees Noun 1. Indian rupee - the basic unit of money in India; equal to 100 paise rupee Indian monetary unit - monetary unit in India paisa - a fractional monetary unit in Bangladesh and India and Nepal and Pakistan ($103 million), implying an estimated enterprise value of 28 billion Indian Rupees ($560 million). For further disclosure about each of these recent developments, please refer to our website www.arcelormittal.com Fourth quarter 2009 outlook The fourth quarter of 2009 EBITDA is expected to be approximately $2.0-$2.4 billion. Shipments and average steel selling prices are expected to be higher in the fourth quarter of 2009 than in the third quarter of 2009. In addition, the Company expects fixed costs fixed costs, n.pl the costs that do not change to meet fluctuations in enrollment or in use of services (e.g., salaries, rent, business license fees, and depreciation). to increase due to the expected increase in activity in the fourth quarter. ARCELORMITTAL CONDENSED con·dense v. con·densed, con·dens·ing, con·dens·es v.tr. 1. To reduce the volume or compass of. 2. To make more concise; abridge or shorten. 3. Physics a. CONSOLIDATED STATEMENT OF FINANCIAL POSITION [TABLE OMITTED] ARCELORMITTAL CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS [TABLE OMITTED] ARCELORMITTAL CONSOLIDATED STATEMENTS OF CASH FLOWS [TABLE OMITTED] [TABLE OMITTED] 1. EBITDA is defined as operating income plus depreciation, impairment expenses and exceptional items. 2. 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. capex includes the acquisition of intangible assets Intangible Asset An asset that is not physical in nature. Notes: Examples are things like copyrights, patents, intellectual property, and goodwill. These are the opposite of tangible assets. . 3. Average steel selling prices are calculated as steel sales divided by steel shipments. Appendix 2 - Quarter 3 2009 Shipments by Geographical location [TABLE OMITTED] 1. Includes 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. business. Appendix 2a - Quarter 3 2009 EBITDA(1) by Geographical location [TABLE OMITTED] 1. EBITDA is defined as operating income plus depreciation, impairment expenses and exceptional items. 2. Includes tubular business. Appendix 3 - Quarter 3 2009 Debt repayment schedule as at September 30, 2009 (in billion $) [TABLE OMITTED] * On April 1, 2009 and May 6, 2009, the Company issued approximately $2.5 billion of convertible bonds which are convertible into shares at the option of the bondholders. The Company has the option to settle the bonds for shares or for an amount equivalent to the cash value of the shares at the date of the settlement. The Company has determined that the convertible bonds are hybrid instruments as defined by IFRS as the conversion option gives the bondholder Bondholder A firm often has stockholders and bondholders. In a liquidation, the bondholders have first priority. bondholder An individual or institution that owns bonds in a corporation or other organization. the right to put the bond back to the Company. In addition, the Company identified certain components of the contract to be embedded derivatives derivatives In finance, contracts whose value is derived from another asset, which can include stocks, bonds, currencies, interest rates, commodities, and related indexes. Purchasers of derivatives are essentially wagering on the future performance of that asset. 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 IAS See iPlanet Application Server. 1. (computer) IAS - The first modern computer. It had main registers, processing circuits, information paths within the central processing unit, and used Von Neumann's fetch-execute cycle. 39. Therefore, the Company separated the embedded derivatives and recorded their fair value at inception ($597 million) as liabilities (out of the net financial debt). At each reporting period, changes in the fair value of the embedded derivatives are recorded to the statement of operations See Income statement. . Noteholders of the ArcelorMittal US$ convertible bonds due 2014 are being informed that ArcelorMittal has decided to irrevocably ir·rev·o·ca·ble adj. Impossible to retract or revoke: an irrevocable decision. ir·rev waive To intentionally or voluntarily relinquish a known right or engage in conduct warranting an inference that a right has been surrendered. For example, an individual is said to waive the right to bring a tort action when he or she renounces the remedy provided by law for such the option to deliver the cash value of the shares upon conversion, as from October 28, 2009. ** Excluding 30-year $1.0 billion bond priced on October 1, 2009. *** Commercial paper is expected to continue to be rolled over in the normal course of business. Credit lines available as of September 30, 2009 (in billion $) [TABLE OMITTED] * Euro denominated loans converted at the Euro: $ exchange rate of 1.4643 as at September 30, 2009 Other highlights as of September 30, 2009 1. Gearing25 at September 30, 2009 was 34% as compared to 37% at June 30, 2009. 2. Net debt to average EBITDA ratio based on yearly average EBITDA from January 1, 2004 was 1.3X at September 30, 2009 as compared to 1.4X at June 30, 2009, in line with announced target range of 0.5X to 1.8X. 3. Net debt to EBITDA ratio based on last twelve months EBITDA, which is the ratio used in the financial covenant of Company's principal financing facilities, was 3.3X at September 30, 2009 as compared to 1.7X at June 30, 2009. 1 EBITDA is defined as operating income plus depreciation, impairment expenses and exceptional items. 2 Rotation days are defined as days of accounts receivable 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 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. ArcelorMittal's previously announced target was to reduce working capital rotation days to 75-85 days by end of 2009. 3 Gearing is defined as (A) 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. , net of current portion, plus payables to banks and current portion of long-term debt Current Portion Of Long-Term Debt A portion of the balance sheet that represents the total amount of long-term debt that must be paid within the next year. The balance sheet has a liability section, which is broken down into long-term and current debt. , less cash and cash equivalents, restricted cash and short-term investments (also referred to as "net debt"), divided by (B) total equity. Gearing was 34% at September 30, 2009; ArcelorMittal's gearing target is between 25% to 40%. 4 ArcelorMittal targets a Net debt/average EBITDA ratio based on yearly average EBITDA from January 1, 2004, in the range of 0.5X to 1.8X. At September 30, 2009 this ratio was 1.3X. 5 The financial information in this press release and Appendix 1 has 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") 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. 6 US dollars have been translated into Euros using an average exchange rate (US$/Euro) of 1.4303, 1.3621, 1.5050, 1.3661 and 1.5218 for Q3 2009, Q2 2009, Q3 2008, 9M 2009 and 9M 2008 respectively. 7During the secondquarter of 2009, the Company recorded exceptional charges amounting to $1.2 billion pre-tax relatedprimarily to write-downs of inventory ($0.9 billion) and provisions for workforce reduction ($0.3 billion). During the first quarter of 2009, the Company recorded exceptional charges amounting to $1.2 billion pre-tax relate primarily to write-downs of inventory. During the third quarter 2008, ArcelorMittal USA agreed to a new four-year labor contract with its union employees. Management concluded that under IFRS it is required to recognize a non-recurring expense in the third quarter of approximately $1.6 billion primarily related to vested vested adj. referring to having an absolute right or title, when previously the holder of the right or title only had an expectation. Examples: after 20 years of employment Larry Loyal's pension rights are now vested. (See: vest, vested remainder) post-employment benefits. In addition it was agreed to pay an additional $90 million upon signing of the contract. 8 The loss in the second quarter of 2009 resulted principally from exceptional charges amounting to $1.2 billion primarily related to write-downs of inventory ($0.9 billion) and provisions for workforce reductions ($0.3 billion). 9 During the third quarter of 2008, ArcelorMittal USA agreed to a new four-year labor contract with its union employees. Management has concluded that under IFRS it is required to recognize a non-recurring expense in the third quarter of approximately $1.6 billion primarily related to vested post-employment benefits. In addition it was agreed to pay an additional $90 million upon signing of the contract. 10 Foreign exchange and other 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 include foreign currency swaps Currency Swap A swap that involves the exchange of principal and interest in one currency for the same in another currency. Notes: Currency swaps were originally done to get around the problem of exchange controls. , bank fees, interest on pensions and impairments of financial instruments. 11 On April 1, 2009 and May 6, 2009, the Company issued approximately $2.5 billion of convertible bonds which are convertible into shares at the option of the bondholders. The Company has the option to settle the bonds for shares or for an amount equivalent to the cash value of the shares at the date of the settlement. The Company has determined that the convertible bonds are hybrid instruments as defined by IFRS as the conversion option gives the bondholder the right to put the bond back to the Company. In addition, the Company identified certain components of the contract to be embedded derivatives in accordance with IAS 39. Therefore, the Company separated the embedded derivatives and recorded their fair value at inception ($597 million) as liabilities (out of the net financial debt). At each reporting period, changes in the fair value of the embedded derivatives are recorded to the statement of operations. The charge recorded at the end of the third quarter 2009 ($110 million) and second quarter 2009 ($357 million) was due primarily to the appreciation of the Company's share price since the issuance of the bonds. Noteholders of the ArcelorMittal US$ convertible bonds due 2014 are being informed that ArcelorMittal has decided to irrevocably waive the option to deliver the cash value of the shares upon conversion, as from October 28, 2009. 12 Steel Solutions and Services shipments are eliminated in consolidation as they represent shipments originating from other ArcelorMittal 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. . 13 Net debt includes long-term debt, net of current portion, plus payables to banks and current portion of long-term debt, less cash and cash equivalents, restricted cash and short-term investments. 14 Rotation days are defined as days of accounts receivable plus days of inventory minus days of accounts payable. Days of accounts payable and inventory are a function of cost of goods sold. Days of accounts receivable are a function of sales. 15 At average 2008 exchange rate. 16 Gearing is defined as (A) long-term debt, net of current portion, plus payables to banks and current portion of long-term debt, less cash and cash equivalents, restricted cash and short-term investments (also referred to as "net debt"), divided by (B) total equity). 17Amounts are derived from the Company's audited consolidated financial statements 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, 2008. 18During the secondquarter of 2009, the Company recorded exceptional charges amounting to $1.2 billion pre-tax relatedprimarily to write-downs of inventory ($0.9 billion) and provisions for workforce reduction ($0.3 billion). During the first quarter of 2009, the Company recorded exceptional charges amounting to $1.2billion pre-tax relatedprimarily to write-downs of inventory. During the third quarter 2008, ArcelorMittal USA agreed to a new four-year labor contract with its union employees. Management concluded that under IFRS it was required to recognize a non-recurring expense in the third quarter of approximately $1.6 billion primarily related to vested post-employment benefits. In addition it was agreed to pay an additional $90 million upon signing of the contract. 19EBITDA is defined as operating income plus depreciation, impairment expenses and exceptional items. 20Steel Solutions and Services shipments are eliminated in consolidation as they represent shipments originating from other ArcelorMittal operating subsidiaries. 21Total of all finished production of fines, concentrate, pellets and lumps (includes share of production and strategic long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. contracts). 22During the secondquarter of 2009, the Company recorded exceptional charges amounting to $1.2 billion pre-tax relatedprimarily(to write-downs of inventory) ($0.9 billion) and provisions for workforce reduction ($0.3 billion)(.) During the first quarter of 2009, the Company recorded exceptional charges amounting to $1.2billion pre-tax relatedprimarily to write-downs of inventory. During the third quarter 2008, ArcelorMittal USA agreed to a new four-year labor contract with its union employees. Management concluded that under IFRS it was required to recognize a non-recurring expense in the third quarter of approximately $1.6 billion primarily related to vested post-employment benefits. In addition it was agreed to pay an additional $90 million upon signing of the contract. 23Changes in operating working capital are defined as trade accounts receivable plus inventories less trade accounts payable. 24During the second quarter of 2009, the Company distributed $234 million to the non-controlling shareholders in its South Africa 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. subsidiary by way of a share buy-back. This transaction did not change the Company's percentage ownership of the subsidiary as it was a pro rata [Latin, Proportionately.] A phrase that describes a division made according to a certain rate, percentage, or share. In a Bankruptcy case, when the debtor is insolvent, creditors generally agree to accept a pro rata share of what is owed to them. return of capital. 25 Gearing is defined as (A) long-term debt, net of current portion, plus payable to banks and current portion of long-term debt, less cash and cash equivalents and restricted cash, divided by (B) total equity. |
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