Highlights:

• Health & Safety lost time injury frequency rate[2] remained constant at 1.5x in 3Q 2011
• 3Q 2011 EBITDA[3] increased by 11.4% to $2.4 billion compared to Q3 2010; EBITDA of $8.4 billion for first nine months 2011, 25.9% higher than first nine months 2010
• 3Q 2011 steel shipments of 21.1 Mt, 2.7% higher than 3Q 2010
• 3Q 2011 EBITDA per tonne of $114, 8.3% higher than 3Q 2010
• 3Q 2011 own iron ore production of 14.1 Mt, up 8.4% y-o-y; 6.7 Mt market price[4] iron ore shipped (up 9.6% y-o-y)
• Net debt[5] at September 30, 2011 of $24.9 billion as compared to $25.0 billion at June 30, 2011

Performance and industrial plan:

• $3.8 billion of annualized sustainable cost reduction achieved by the end of Q3 2011; on track to reach $4.8 billion by end of 2012
• New $1 billion asset optimization plan launched to generate sustainable EBITDA improvement; intention to close 2 blast furnaces, sinter plant, steel shop and continuous casters in Liege, Belgium[6]
• Liberia iron ore phase 1 complete, with 2011 targeted production of 1 million metric tonnes, increasing to 4 million tonnes in 2012; phase 2 expansion to 15 million metric tonnes is in final decision phase
• ArcelorMittal Mines Canada expansion project on track to increase iron ore capacity from 16 Mt to 24 Mt by 2013

Outlook and guidance:

• EBITDA for 2H 2011 is expected to be above the comparable period of 2010
• Steel shipments in 4Q 2011 are expected to be lower than 3Q 2011 levels reflecting customers' "wait and see" approach
• On track to increase FY 2011 own iron ore and coal production by 10% and 20%, respectively, as compared to 2010
• Net debt at year-end is expected to be higher than 3Q 2011 levels primarily due to the temporary investment in Macarthur 
• Focus on core growth capex; full year 2011 capex therefore is expected to be below previous target of $5.5 billion

Financial highlights on the basis of IFRS[1] (amounts in USD):  

USDm unless otherwise shown 3Q 11 2Q 11 3Q 10 9M 11 9M 10 Sales $24,214 $25,126 $19,744 $71,524 $57,326 EBITDA 2,408 3,413 2,162 8,403 6,672 Operating income 1,168 2,252 1,028 4,851 3,208 Income from discontinued operations - - 38 461 217 Net income 659 1,535 1,350 3,263 3,696 Basic earnings per share (USD) 0.43 0.99 0.89 2.11 2.45 Continuing operations Own iron ore production (Mt) 14.1 13.1 13.0 39.0 36.4 Iron ore shipped internally and externally at market price (Mt)[4] 6.7 7.0 6.1 19.6 18.4 Crude steel production (Mt) 22.4 24.4 22.2 70.2 69.0 Steel shipments (Mt) 21.1 22.2 20.5 65.2 63.8 EBITDA/tonne (US$/t) 114 154 105 129 105

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

"Despite weakening economic conditions, ArcelorMittal has reported EBITDA within the forecasted range. Uncertainties around the economic outlook have increased in recent weeks, impacting the confidence levels of our customers, so as we move in to the 4Q we are facing both volume and price pressures. However, our core profitability is resilient, supported by our growing mining business, our market leading value-added steel franchise and our management gains programs. As a result I remain confident that the Group's EBITDA in the second half of 2011 will be above that of the second half of 2010".

Third quarter 2011 earnings analyst conference call

Additionally, ArcelorMittal management will host a telephone conference call for members of the investment community to discuss the third quarter 2011 financial performance on:

Date New York London Luxembourg  November 3, 2011  10.30am  2.30pm  3.30pm The dial in numbers:   Location Dial in numbers Access Code  UK local: +44 (0)20 7970 0006 575343#  UK toll free 0800 169 3059  USA local:  +1 215 599 1757 575343#  USA free phone:  1 800 814 6417 Please note there will not be a live webcast. Replay of the call available: Language English  Replay numbers  Access code  413994#  +49 (0) 18 05204 3089

The conference call will include a brief question and answer session with the Group Management Board. The presentation will be available on www.arcelormittal.com. In addition, a Questions and Answers document is provided on the website, under "Investors and Shareholders", "Financial Results".

Forward-looking Statements

This document may contain forward-looking information and statements about ArcelorMittal and its subsidiaries. These statements include financial projections and estimates and their underlying assumptions, statements regarding plans, objectives and expectations with respect to future operations, products and services, and statements regarding future performance. Forward-looking statements may be identified by the words "believe," "expect," "anticipate," "target" or similar expressions. Although ArcelorMittal's management believes that the expectations reflected in such forward-looking statements are reasonable, investors and holders of ArcelorMittal's securities are cautioned that forward-looking information and statements are subject to numerous risks and uncertainties, many of which are difficult to predict and generally beyond the control of ArcelorMittal, that could cause actual results and developments to differ materially and adversely from those expressed in, or implied or projected by, the forward-looking information and statements. These risks and uncertainties include those discussed or identified in the filings with the Luxembourg Stock Market Authority for the Financial Markets ( Commission de Surveillance du Secteur Financier ) and the United States Securities and Exchange Commission (the "SEC") made or to be made by ArcelorMittal, including ArcelorMittal's Annual Report on Form 20-F for the year ended December 31, 2010 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 integrated steel and mining company, with a presence in more than 60 countries.

ArcelorMittal is the leader in all major global carbon steel markets, including automotive, construction, household appliances and packaging, with leading R&D and technology. The Group also has a world class mining business with a global portfolio of over 20 mines in operation and development, and is the world's 4th largest iron ore producer. With operations in over 22 countries spanning four continents, the Company covers all of the key industrial markets, from emerging to mature, and has outstanding distribution networks.

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. 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. ArcelorMittal is a member of the FTSE4Good Index and the Dow Jones Sustainability World Index.

In 2010, ArcelorMittal had revenues of $78.0 billion and crude steel production of 90.6 million tonnes, representing approximately 6 percent of world steel output. The Group's mining operations produced 47 million tonnes of iron ore and 7 million tonnes of metallurgical coal.

ArcelorMittal is listed on the stock exchanges of New York (MT), Amsterdam (MT), Paris (MT), Brussels (MT), Luxembourg (MT) and on the Spanish stock exchanges of Barcelona, Bilbao, Madrid and Valencia (MTS).

For more information about ArcelorMittal visit www.arcelormittal.com.

Enquiries

Contact information ArcelorMittal Investor Relations   Europe  Tel: +352 4792 2484 Americas  Tel: +1 312 899 3569 Retail Tel: +352 4792 2484 SRI  Tel: +44 203 214 2854 Bonds/Credit     Tel: +33 1 71 92 10 26 ArcelorMittal Corporate Communications   E-mail: press@arcelormittal.com Tel: +352 4792 5000 Giles Read   Tel: +44 20 3214 2845  Arne Langner Tel: +352 4792 3120 Lynn Robbroeckx   Tel: +44 20 3214 2991 Tobin Postma   Tel: +44 20 3214 2412 United Kingdom  Maitland Consultancy: Martin Leeburn Tel: +44 20 7379 5151

ArcelorMittal third quarter 2011 results

ArcelorMittal, the world's leading steel company, today announced results for the three months and nine months ended September 30, 2011.

Corporate social responsibility performance

Health and safety - Own personnel and contractors lost time injury frequency rate[2]

Health and safety performance remained constant with a loss time injury frequency rate of 1.5x in the third quarter of 2011 as compared to the second quarter of 2011, with improvement in the safety performance of the Mining and Flat Carbon Americas segments, offset by weaker performance particularly in the Asia Africa and CIS and Distribution Solutions segments, as well as in the Flat Carbon Europe and Long Carbon Americas and Europe segments.

Health and safety performance improved for the nine months ended September 30, 2011 with a loss time injury frequency rate of 1.5x as compared to 1.9x for the nine months ended September 30, 2010, with improvements in the safety performance of all segments other  than the Distribution Solutions and Flat Carbon America segments.

Own personnel and contractors  - Frequency rate

Lost time injury frequency rate 3Q 11 2Q 11 3Q 10 9M 11 9M 10 Total Mines 1.2 1.6 1.7 1.3 1.7 Lost time injury frequency rate 3Q 11 2Q 11 3Q 10 9M 11 9M 10 Flat Carbon Americas 1.7 2.0 1.7 1.9 1.8 Flat Carbon Europe 1.6 1.5 2.1 1.7 2.3 Long Carbon Americas and Europe 1.7 1.6 2.3 1.5 2.2 Asia Africa and CIS 0.9 0.5 1.2 0.7 0.9 Distribution Solutions 4.4 3.2 2.3 3.7 2.7 Total Steel 1.6 1.5 1.9 1.5 1.9 Lost time injury frequency rate 3Q 11 2Q 11 3Q 10 9M 11 9M 10 Total (Steel and Mines) 1.5 1.5 1.9 1.5 1.9

 

Key initiatives for the three months ended September 30, 2011

• ArcelorMittal secured entry to the Dow Jones Sustainability World Index (DJSI World). The Dow Jones Sustainability Index tracks the financial performance of the leading sustainability-driven companies worldwide. Securing recognition from this benchmarking index for the second time demonstrates ArcelorMittal's commitment towards delivering safe, sustainable steel. ArcelorMittal remains a member of the two major sustainability and corporate responsibility indices: the DJSI World and the FTSE4Good Index series.
• A report jointly issued by ArcelorMittal, the European Metalworkers' Federation, the International Federation of Metalworkers and United Steel Workers examines how the Company has worked together with unions throughout the world to achieve better safety results. The report concludes that the joint global Health & Safety Committee has helped build a positive workplace culture and improved collaboration and coordination between unions and management locally as well as globally.

Analysis of results for the nine months ended September 30, 2011 versus the nine months ended September 30, 2010

ArcelorMittal's net income for the nine months ended September 30, 2011 was $3.3 billion, or $2.11 per share, as compared with net income of $3.7 billion, or $2.45 per share, for the nine months ended September 30, 2010.

Total steel shipments for the nine months ended September 30, 2011 were 65.2 million metric tonnes as compared with 63.8 million metric tonnes for the nine months ended September 30, 2010.

Sales for the nine months ended September 30, 2011 increased 24.8% to $71.5 billion as compared with $57.3 billion for the nine months ended September 30, 2010.  Sales were higher during the first nine months of 2011 as compared to the first nine months of 2010 primarily due to higher average steel selling prices (20.8%) and slightly higher steel volumes (2.1%).

Depreciation expense for the nine months ended September 30, 2011 was $3.4 billion as compared to $3.3 billion for the nine months ended September 30, 2010.

Impairment expenses for the nine months ended September 30, 2011 were $103 million relating to a rolling facility in the Long Carbon Americas segment and the announced intention to close two blast furnaces, sinter plant, steel shop and continuous casters in Liege, Belgium[6]. (Restoration, site cleaning, voluntary separation scheme (VSS) and other costs will be recorded when social dialogue has sufficiently progressed). This compared to impairment expenses of $144 million for the nine months ended September 30, 2010 relating to the sale of the Anzherkoye steam coal mine in Russia and pickling line in Liege, Belgium.

Operating income for the nine months ended September 30, 2011 was $4.9 billion, an increase of 51.2% as compared with operating income of $3.2 billion for the nine months ended September 30, 2010.

Operating performance for the nine months ended September 30, 2011 included a non-cash gain of $437 million related to unwinding of hedges on raw material purchases as compared to $266 million recorded in this respect in the nine months ended September 30, 2010. 

Income from equity method investments and other income for the nine months ended September 30, 2011 was $443 million, as compared to $377 million for the nine months ended September 30, 2010. Income for the nine months ended September 30, 2011 included an impairment loss of $119 million as a result of the Company's intention to withdraw from the joint venture with Peabody Energy to acquire ownership of Macarthur Coal. This charge reflects a higher carrying value of the investment in Macarthur, which included accrued share of net income. After considering dividends received and changes in exchange rate through October 25, 2011 (date of the divestiture announcement) the transaction was essentially cash neutral.[7]

Net interest expense (including interest expense and interest income) for the nine months ended September 30, 2011 was higher at $1.4 billion, as compared to $1.0 billion for the nine months ended September 30, 2010 primarily due to higher level of borrowing.

As a result of hedging transactions undertaken by the Company in December 2010, the mark-to-market impact from the convertible bonds issued in the spring of 2009 has been minimized. Mark-to-market gains on the mandatorily convertible bond issued in December 2009 were $55 million in the first nine months of 2011. During the nine months ended September 30, 2010, the Company had recorded a non-cash gain of $720 million as a result of mark-to-market adjustments with respect to embedded derivatives in its convertible bonds issued in 2009.

Foreign exchange and other net financing costs were $1.1 billion for the nine months ended September 30, 2011 as compared to $0.7 billion for the nine months ended September 30, 2010.

ArcelorMittal recorded an income tax expense of $49 million for the nine months ended September 30, 2011, as compared to an income tax benefit of $1.0 billion for the nine months ended September 30, 2010.

Gain attributable to non-controlling interests for the nine months ended September 30, 2011 was $21 million as compared to a gain of $135 million for the nine months ended September 30, 2010. 

Discontinued operations (i.e. the Company's stainless steel operations, which were spun-off into a separate company, Aperam) in the nine months ended on September 30, 2011 amounted to a gain of $461 million, including $42 million of the post-tax net results contributed by the stainless steel operations prior to their spin-off. The balance of $419 million represents a one-time non-cash gain from the recognition through the income statement of gains/losses relating to the demerged assets previously held in equity. Discontinued operations for the nine months ended on September 30, 2010 amounted to a gain of $217 million.

Analysis of results for the three months ended September 30, 2011 versus the three months ended June 30, 2011 and the three months ended September 30, 2010

ArcelorMittal's net income for the three months ended September 30, 2011 was $0.7 billion, or $0.43 per share, as compared with net income of $1.5 billion, or $0.99 per share, for the three months ended June 30, 2011 and net income of $1.4 billion, or $0.89 per share, for the three months ended September 30, 2010.

Total steel shipments for the three months ended September 30, 2011 were 21.1 million metric tonnes as compared with 22.2 million metric tonnes for the three months ended June 30, 2011, and 20.5 million metric tonnes for the three months ended September 30, 2010.

Sales for the three months ended September 30, 2011 decreased by 3.6% to $24.2 billion as compared with $25.1 billion for the three months ended June 30, 2011, and were up 22.6% as compared with $19.7 billion for the three months ended September 30, 2010.  Sales were lower during the third quarter of 2011 as compared to the second quarter of 2011 primarily due to lower average steel selling prices (-1.7%) and  lower volume of shipments (-4.9%).

Depreciation expense for the three months ended September 30, 2011 remained constant at $1.2 billion as compared to the three months ended June 30, 2011 and higher than the $1.1 billion for the three months ended September 30, 2010.

Impairment expense for the three months ended September 30, 2011 was $85 million relating to costs associated with the announced intention to close 2 blast furnaces, sinter plant, steel shop and continuous casters in Liege, Belgium[6], and nil for the three months ended June 30, 2011. Impairment cost for the three months ended September 30, 2010 of $26 million related to the impairment of a pickling line in Liege, Belgium.

Operating income for the three months ended September 30, 2011 was $1.2 billion, as compared with operating income of $2.3 billion for the three months ended June 30, 2011 and operating income of $1.0 billion for the three months ended September 30, 2010.

Operating income for the three months ended September 30, 2011 included a non-cash gain of $129 million relating to unwinding of hedges on raw material purchases as compared to non-cash gains relating to such unwinding of $189 million recorded in the three months ended June 30, 2011 and $85 million in the three months ended September 30, 2010.

Income from equity method investments and other income for the three months ended September 30, 2011 was $6 million, as compared to $289 million for the three months ended June 30, 2011 and $107 million and for the three months ended September 30, 2010. Income for the three months ended September 30, 2011 included an impairment loss of $119 million as a result of the Company's intention to withdraw from the joint venture with Peabody Energy to acquire ownership of Macarthur Coal. This charge reflects a higher carrying value of the investment in Macarthur, which included accrued share of net income. After considering dividends received and changes in exchange rate through October 25, 2011 (date of the divestiture announcement) the transaction was essentially cash neutral.[7]

Net interest expense (including interest expense and interest income) of $477 million for the three months ended September 30, 2011 was higher than the $457 million for the three months ended June 30, 2011.  The net interest expense for the three months ended September 30, 2010 was $376 million.

As a result of hedging transactions undertaken by the Company in December 2010, the mark-to-market impact from the convertible bonds issued in the spring of 2009 has been minimized.  Mark-to-market gains on the mandatorily convertible bond issued in December 2009 during the third quarter of 2011 were $59 million compared to mark-to-market losses of $4 million for the second quarter of 2011. During the three months ended September 30, 2010, the Company had recorded a non-cash gain of $24 million as a result of the embedded derivatives in its convertible bonds issued in 2009.

Foreign exchange and other net financing gains were $26 million for the three months ended September 30, 2011 as compared to

foreign exchange and other net financing losses of $443 million for the three months ended June 30, 2011. Foreign exchange and other net financing losses for the three months ended September 30, 2010 were $31 million. Foreign exchange and other net financing gains for the third quarter of 2011 were positively impacted by foreign exchange gains on euro denominated debt (6.6% appreciation of US$ as compared to 1.7% depreciation in the second quarter of 2011).

ArcelorMittal recorded an income tax expense of $154 million for the three months ended September 30, 2011, as compared to an income tax expense of $61 million for the three months ended June 30, 2011 and an income tax benefit of $576 million for the three months ended September 30, 2010.

Losses attributable to non-controlling interests for the three months ended September 30, 2011 was $31 million as compared with gains of $41 million and $16 million for the three months ended June 30, 2011 and September 30, 2010, respectively. 

Capital expenditure projects

The following tables summarize the Company's principal growth and optimization projects involving significant capital expenditures.

Completed Projects in Most Recent 4 Quarters

Segment Site Project Capacity / particulars Actual Completion FCE ArcelorMittal Dunkerque (France) Modernization of continuous caster No.21 Slab capacity increase by 0.8mt / year 4Q 10 Mining Princeton Coal (USA) Underground mine expansion Capacity increase by 0.7mt / year 1Q 11 Mining Liberia mines Greenfield Liberia Iron ore production of 4mt / year (Phase 1) 3Q 11^(b)

           

Ongoing^(a) Projects

Segment Site Project Capacity / particulars Forecasted Completion Mining Andrade Mines (Brazil) Andrade expansion Increase iron ore production to 3.5mt / year 2012 Mining ArcelorMittal Mines Canada Replacement of spirals for enrichment Increase iron ore production by 0.8mt / year 2013 Mining ArcelorMittal Mines Canada Expansion Project Increase concentrator capacity by 8mt/year (16 to 24mt/y) 2013 FCA ArcelorMittal Dofasco (Canada) Optimization of galvanizing and galvalume operations Optimize cost and increase galvalume production by 0.1mt / year To be determined FCA ArcelorMittal Vega Do Sul (Brazil) Expansion Project Increase HDG capacity by 0.6mt / year and CR capacity by 0.7mt / year On hold LCA Monlevade (Brazil) Wire rod production expansion Increase in capacity of finished products by 1.15mt / year On hold

 

Projects through Joint Ventures

Country Site Project Capacity  / particulars Forecasted completion Saudi Arabia Al-Jubail Seamless tube mill Capacity of 0.6mt / year of seamless tube 2013^(c) China Hunan Province VAMA Auto Steel JV Capacity of 1.2mt / year for the auto market 2013 China Hunan Province VAME Electrical Steel JV Capacity of 0.3mt / year of electrical steel 2013 South Africa Kalahari Basin Manganese mine and sinter plant Capacity of 2.4mt / year of manganese sinter product 2013

a)     Ongoing projects refer to projects for which construction has begun and exclude various projects that are under development.
b)     Iron ore mining production has commenced. 2011 iron ore production target of 1 million tonnes increasing to 4 million tonnes in 2012. The expansion to 15 million tonnes with forecast completion by 2015 (Phase 2) will require investment in a concentrator which is currently in the final stage of approval.
c)     Saudi Arabia project delay from 2012 to 2013 primarily due to construction delays

Analysis of segment operations for the three months ended September 30, 2011 as compared to the three months ended June 30, 2011

As from January 1, 2011 the Company's mining operations are reported as a separate operating segment. This change in segmentation reflects the changes in ArcelorMittal's approach to managing its mining operations i.e. a dedicated mining management team. Accordingly, as required by IFRS, prior periods have been recast to reflect this new segmentation.

All raw materials consumed from ArcelorMittal mines that could practically be sold outside the Company are now reported at market prices. Production from "captive" mines (limited by logistics or quality) continues to be reported at cost-plus to the steel facilities. The principal impact of this change has been to increase the costs of raw materials consumed by the FCA and AACIS segments.

Flat Carbon Americas

USDm unless otherwise shown 3Q 11 2Q 11 3Q 10 9M 11 9M 10 Sales $5,499 $5,567 $4,394 $16,005 $13,111 EBITDA 420 924 379 1,872 1,397 Operating income 193 697 166 1,197 758 Crude steel production ('000t) 5,866 6,277 5,932 18,206 17,465 Steel shipments ('000t) 5,708 5,520 4,979 16,791 15,596 Average steel selling price (US$/t) 910 961 826 900 786 EBITDA/tonne (US$/t) 74 167 76 111 90 Operating income /tonne (US$/t) 34 126 33 71 49

Flat Carbon Americas crude steel production decreased 6.5% to 5.9 million tonnes for the three months ended September 30, 2011, as compared to 6.3 million tonnes for the three months ended June 30, 2011, due in part to production downtime in the North American operations.

Steel shipments for the three months ended September 30, 2011 were 5.7 million tonnes, 3.4% higher as compared to 5.5 million tonnes for the three months ended June 30, 2011 primarily due to improved auto demand in the NAFTA market.

Sales in the Flat Carbon Americas segment were $5.5 billion for the three months ended September 30, 2011, a marginal decline of 1.2% as compared to $5.6 billion for the three months ended June 30, 2011. Sales decreased primarily due to lower average steel selling prices (-5.3%) primarily in Mexico and Brazil due to slab shipments partially offset by higher steel volumes.

EBITDA in the third quarter of 2011 declined by 54.5% to $420 million as compared to $924 million in the second quarter of 2011, driven primarily by margin compression on account of lower average steel selling prices and higher costs.

Flat Carbon Europe

USDm unless otherwise shown 3Q 11 2Q 11 3Q 10 9M 11 9M 10 Sales $7,696 $8,551 $6,268 $24,059 $18,733 EBITDA 367 636 452 1,474 1,472 Operating income / (loss) (106) 245 80 245 392 Crude steel production ('000t) 7,390 7,870 7,107 22,891 23,020 Steel shipments ('000t) 6,385 7,166 6,521 20,935 20,917 Average steel selling price (US$/t) 1,021 1,026 855 990 794 EBITDA/tonne (US$/t) 57 89 69 70 70 Operating income/(loss) /tonne (US$/t) (17) 34 12 12 19

Flat Carbon Europe crude steel production amounted to 7.4 million tonnes for the three months ended September 30, 2011, a decrease of 6.1% as compared to 7.9 million tonnes for the three months ended June 30, 2011. Production decreased reflecting weaker market sentiment and seasonal slowdown.

Steel shipments for the three months ended September 30, 2011 were 6.4 million tonnes, a decrease of 10.9% as compared to 7.2 million tonnes for the three months ended June 30, 2011. Steel shipments decreased during the third quarter due to weaker market demand and seasonal slowdown.

Sales in the Flat Carbon Europe segment were $7.7 billion for the three months ended September 30, 2011, a decrease of 10.0% as compared to $8.6 billion for the three months ended June 30, 2011. Sales decreased primarily due to lower steel shipment volumes while average steel selling price remained relatively stable.

EBITDA for the three months ended September 30, 2011 was $367 million, a 42.3% decrease as compared to $636 million for the three months ended June 30, 2011, primarily driven by lower steel volumes and higher costs.

Operating results in the third quarter of 2011 include impairment expense of $85 million relating to costs associated with the announced intention to close 2 blast furnaces, sinter plant, the steel shop and continuous casters in Liege, Belgium[6]. They also include a $129 million non-cash gain relating to the unwinding of the hedges on raw material purchases, as compared to a non-cash gain of $189 million in the second quarter of 2011 and $85 million in third quarter of 2010.

Long Carbon Americas and Europe

USDm unless otherwise shown 3Q 11 2Q 11 3Q 10 9M 11 9M 10 Sales $6,676 $6,664 $5,514 $19,229 $15,748 EBITDA 438 610 603 1,528 1,760 Operating income 185 358 339 753 976 Crude steel production ('000t) 5,611 6,414 5,472 18,084 17,225 Steel shipments ('000t) 5,984 6,167 5,772 18,023 17,450 Average steel selling price (US$/t) 967 973 832 948 790 EBITDA/tonne (US$/t) 73 99 104 85 101 Operating income /tonne (US$/t) 31 58 59 42 56

Long Carbon Americas and Europe crude steel production amounted to 5.6 million tonnes for the three months ended September 30, 2011, a decrease of 12.5% as compared to 6.4 million tonnes for the three months ended June 30, 2011. Production was lower in the Americas primarily due to drawdown of inventory mainly in Brazil and the weaker market demand. Production was lower in Europe primarily due to seasonal effects.

Steel shipments for the three months ended September 30, 2011 were 6.0 million tonnes, a decrease of 3.0% as compared to 6.2 million tonnes for the three months ended June 30, 2011, particularly due to seasonal slowdown in Europe.

Sales in the Long Carbon Americas and Europe segment were $6.7 billion for the three months ended September 30, 2011, essentially flat as compared to the three months ended June 30, 2011.

EBITDA for the three months ended September 30, 2011 was $438 million, a 28.2% decrease as compared to $610 million for the three months ended June 30, 2011, primarily due to lower volumes and higher costs.

Asia Africa and CIS ("AACIS")

USDm unless otherwise shown 3Q 11 2Q 11 3Q 10 9M 11 9M 10 Sales $2,619 $2,857 $2,511 $8,046 $7,162 EBITDA 284 462 274 1,000 920 Operating income 162 341 161 628 589 Crude steel production ('000t) 3,493 3,830 3,726 11,029 11,295 Steel shipments ('000t) 3,005 3,304 3,261 9,451 9,874 Average steel selling price (US$/t) 771 768 630 743 604 EBITDA/tonne (US$/t) 95 140 84 106 93 Operating income /tonne (US$/t) 54 103 49 66 60

AACIS segment crude steel production was 3.5 million tonnes for the three months ended September 30, 2011, a decrease of 8.8% as compared to 3.8 million tonnes for the three months ended June 30, 2011. The decrease in the third quarter of 2011 was primarily due to operational issues impacting the South African operations.

Steel shipments for the three months ended September 30, 2011 amounted to 3.0 million tonnes, a decrease of 9.0% as compared to 3.3 million tonnes for the three months ended June 30, 2011. Shipments were lower in the third quarter of 2011 primarily due to operational issues in South Africa.

Sales in the AACIS segment were $2.6 billion for the three months ended September 30, 2011, a decrease of 8.3% as compared to $2.9 billion for the three months ended June 30, 2011, primarily due to lower steel shipments, while average steel selling price remained relatively stable.

EBITDA for the three months ended September 30, 2011 was $284 million, 38.5% lower as compared to $462 million for the three months ended June 30, 2011. EBITDA during the third quarter of 2011 declined primarily due to lower steel shipments and higher costs.

Distribution Solutions[8]

USDm unless otherwise shown 3Q 11 2Q 11 3Q 10 9M 11 9M 10 Sales $4,899 $5,019 $3,977 $14,179 $11,468 EBITDA 48 115 126 290 370 Operating income 8 69 82 161 230 Steel shipments ('000t) 4,607 4,594 4,467 13,403 13,422 Average steel selling price (US$/t) 1,010 1,040 855 1,009 820

Steel shipments in the Distribution Solutions segment for the three months ended September 30, 2011 were 4.6 million tonnes, flat as compared to the three months ended June 30, 2011.

Sales in the Distribution Solutions segment declined to $4.9 billion for the three months ended September 30, 2011 as compared to $5.0 billion for the three months ended June 30, 2011, due primarily to lower average steel selling prices (-2.9%).

EBITDA for the three months ended September 30, 2011 was $48 million, down 58.3% as compared to $115 million for the three months ended June 30, 2011, primarily due to lower margin from European operations due to seasonal slowdown.

Mining

USDm unless otherwise shown 3Q 11 2Q 11 3Q 10 9M 11 9M 10 Sales[9] $1,678 $1,657 $1,181 $4,463 $3,163 EBITDA 842 835 726 2,284 1,693 Operating income 725 718 617 1,936 1,248 Own iron ore production^(a) (Mt) 14.1 13.1 13.0 39.0 36.4 Iron ore shipped externally and internally at market price^(b) (Mt) 6.7 7.0 6.1 19.6 18.4 Iron ore shipped internally at cost-plus^(b) (Mt) 6.9 6.2 6.1 16.8 15.7 Total iron ore shipped externally and internally^(b) (Mt) 13.5 13.2 12.2 36.3 34.2 Own coal production^(a) (Mt) 2.1 2.1 1.8 6.1 5.2 Coal shipped externally and  internally at market price^(b) (Mt) 1.2 1.3 0.9 3.6 2.6 Coal shipped internally at cost-plus^(b) (Mt) 0.8 0.8 0.8 2.5 2.3 Total coal shipped externally and internally^(b) (Mt) 2.1 2.1 1.7 6.1 4.9

(a)  Own iron ore and coal production excluding strategic long-term contracts
(b)  Iron ore and coal shipments of market-priced based materials include the Company's own mines, and share of production at other mines, and exclude supply under strategic long-term contracts

Own iron ore production (excluding supplies under strategic long-term contracts) increased 7.4% to 14.1 million tonnes for the three months ended September 30, 2011, as compared to 13.1 million tonnes for the three months ended June 30, 2011.  

Total iron ore shipped during the third quarter of 2011 amounted to 13.5 million metric tonnes, an increase of 2.9% as compared to 13.2 million tonnes in the second quarter of 2011.

Own coal production for the three months ended September 30, 2011 remained constant at 2.1 million tonnes as compared to the three months ended June 30, 2011.

Total coal shipped during the third quarter of 2011 amounted to 2.1 million tonnes, essentially flat as compared to the second quarter of 2011.

EBITDA attributable to the Mining segment for the three months ended September 30, 2011 was $842 million, marginally higher as compared to $835 million for the three months ended June 30, 2011, primarily due to improved cost position driven by higher overall production volumes partially offset by lower market price volumes.

Liquidity and Capital Resources

For the three months ended September 30, 2011, net cash provided by operating activities was $0.8 billion, compared to net cash used in operating activities of $0.6 billion for the three months ended June 30, 2011. The cash flow used in operating activities for the third quarter of 2011 included a $1.0 billion investment in operating working capital as compared to a $2.8 billion investment in the second quarter of 2011. The working capital investment in the third quarter of 2011 primarily resulted from increased raw material costs. Rotation days[10] increased to 73 days during the third quarter of 2011 from 71 days in the second quarter of 2011.  

Net cash used in investing activities for the three months ended September 30, 2011 remained constant at $1.3 billion, as compared to the three months ended June 30, 2011. Capital expenditures increased to $1.3 billion for the three months ended September 30, 2011 as compared to $1.1 billion for the three months ended June 30, 2011. The Company will continue to calibrate its steel growth projects to evolving demand situations; at the same time the Company intends to maintain the growth capex in its mining business as these projects have more attractive return profiles. Accordingly the Company's full year 2011 capital expenditure is expected to be below the previously targeted level of $5.5 billion (as compared to $3.3 billion in 2010).  

Other investing activities in the third quarter of 2011 include an outflow of $31 million including the installment of $55 million for an 11% stake in Ostrava acquired in 2009, offset in part by the sale of various non-core fixed assets. Other investing activities in the second quarter of 2011 of $186 million included outflows of $67 million related to the acquisition of Cognor in Poland (Distribution Solutions) and $205 million for the acquisition of the Prosper coke plant in Germany, offset in part by net cash inflows of $86 million representing cash proceeds from the sale of certain non-core fixed assets and other recoveries.

Net cash provided by financing activities for the three months ended September 30, 2011 was $0.3 billion, as compared to cash provided by financing activities of $1.1 billion for the three months ended June 30, 2011. During the third quarter of 2011, the Company paid dividends amounting to $309 million as compared to $302 million in the second quarter of 2011. Dividends paid during the third quarter of 2011 included $17 million paid to minority shareholders. During the third quarter of 2011, the Company received a $250 million cash inflow from the increase in the privately placed mandatorily convertible bond (MCB) issued on December 28, 2009 by one of its wholly-owned Luxembourg subsidiaries.

At September 30, 2011, the Company's cash and cash equivalents (including restricted cash and short-term investments) amounted to $2.8 billion as compared to $3.2 billion at June 30, 2011. During the quarter, net debt decreased by $0.1 billion to $24.9 billion as compared with $25.0 billion at June 30, 2011.

The Company had liquidity of $11.3[11] billion at September 30, 2011, a decline of $1.0 billion as compared with liquidity of $12.3 billion at June 30, 2011, consisting of cash and cash equivalents (including restricted cash and short-term investments) of $2.8 billion and $8.5 billion of available credit lines.

Update on management gains program and asset optimization plan

At the end of the third quarter of 2011, the Company's annualized sustainable management gains increased to $3.8 billion as compared to $3.6 billion at the end of June 30, 2011 (excluding Aperam). The Company maintains its target (based on the revised plan excluding Aperam) to reach management gains of $4.8 billion from sustainable SG&A, fixed cost reductions and continuous improvement by the end of 2012.

On September 23, 2011, the Company announced the launch of a new asset optimization plan which will target a $1 billion improvement in annualized EBITDA by the end of 2012.  

Recent developments

• On October 25, 2011, ArcelorMittal provided notice to Peabody Energy that, in accordance with the Co-Operation and Contribution Agreement between the two companies, following its acceptance of PEAMCoal Ltd's offer for Macarthur Coal Ltd, it has terminated the Co-Operation and Contribution Agreement as provided for therein. ArcelorMittal will remain a shareholder in PEAMCoal until the termination arrangements are completed which is expected to be in approximately 90 days' time. In taking this decision, ArcelorMittal has determined that it would no longer be appropriate to allocate substantial capital to the acquisition of a non-controlling, minority business interest. This is in accordance with the rights that ArcelorMittal originally negotiated with Peabody at the time the Co-Operation and Contribution Agreement was concluded.
  Given the unanticipated level of acceptances into the offer, ArcelorMittal believes that it is more appropriate to focus its capital elsewhere in its business. ArcelorMittal considers that the capital commitment that would be required to retain its Macarthur interest and grow it materially further, exceeds what is appropriate to allocate to a business that ArcelorMittal does not fully control and consolidate. The unconditional PEAMCoal offer for Macarthur will not be affected by ArcelorMittal's acceptance and will remain open until 7:00 p.m. (Brisbane time) on November 11, 2011 unless extended. ArcelorMittal will continue to perform its funding obligations to PEAMCoal until the termination takes effect as described in section 10.2(f) of PEAMCoal's Bidder's Statement for Macarthur.
• On September 30, 2011, ArcelorMittal extended to May 2015 the maturity of its $4 billion revolving credit facility that was due to expire in May 2013.
• On September 28, 2011, ArcelorMittal announced the increase by $250 million of its $750 million privately placed mandatorily convertible bond (MCB) issued on December 28, 2009 by one of its wholly-owned Luxembourg subsidiaries. This amendment to the MCB, which is mandatorily convertible into preferred shares of such subsidiary, was executed on September 27, 2011. The other main features of the MCB remain unchanged. The bond was placed privately with a Luxembourg affiliate of Credit Agricole Corporate and Investment Bank and is not listed.
• On August 1, 2011, ArcelorMittal published its Half-Year Report for the six month period ended June 30, 2011. In addition, ArcelorMittal filed with the U.S. Securities and Exchange Commission (www.sec.gov ) a recast of its 2008-2010 Financial Statements, Business description and Management's Discussion and Analysis to reflect the fact that its mining business is being reported as a segment since January 1, 2011.

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

Outlook and guidance

The Company's EBITDA in the second half of 2011 is expected to exceed the level achieved in the comparable period of 2010. The Company expects shipments in 4Q 2011 to be lower than 3Q 2011 levels, reflecting economic uncertainties leading to customers adopting a "wait and see" approach. Higher iron ore and coal volumes will continue to be a positive underlying driver. Own iron ore and coal production is expected to increase by 10% and 20% respectively, by the end of 2011 as compared to 2010.

In light of recent market uncertainty the Company is focusing on core growth capex. This will result in postponement of some planned steel investments. Accordingly, full year 2011 capital expenditure is expected to be below the previously targeted level of $5.5 billion.

Net debt at year end is expected to be higher than third quarter of 2011 primarily due to the temporary investment in Macarthur Coal (which will be reversed in the first quarter of 2012).

ARCELORMITTAL CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

In millions of U.S. dollars September 30, 2011 June 30, 2011 December 31, 2010[12] ASSETS Cash and cash equivalents including restricted cash $2,800 $3,205 $6,289 Trade accounts receivable and other 8,194 8,625 5,725 Inventories 23,397 23,920 19,583 Prepaid expenses and other current assets 4,246 4,376 4,160 Assets held for distribution - - 6,918 Total Current Assets 38,637 40,126 42,675 Goodwill and intangible assets 14,683 15,134 14,373 Property, plant and equipment 54,052 56,124 54,344 Investments in affiliates and joint ventures and other assets 19,956 22,135 19,512 Total Assets $127,328 $133,519 $130,904 LIABILITIES AND SHAREHOLDERS' EQUITY Short-term debt and current portion of long-term debt $3,626 $3,688 $6,716 Trade accounts payable and other 13,772 14,864 13,256 Accrued expenses and other current liabilities 8,527 8,545 8,714 Liabilities held for distribution - - 2,037 Total Current Liabilities 25,925 27,097 30,723 Long-term debt, net of current portion 24,061 24,530 19,292 Deferred tax liabilities 3,678 4,010 4,006 Other long-term liabilities 10,288 11,381 10,783 Total Liabilities 63,952 67,018 64,804 Equity attributable to the equity holders of the parent 59,586 62,615 62,430 Non-controlling interests 3,790 3,886 3,670 Total Equity 63,376 66,501 66,100 Total Liabilities and Shareholders' Equity $127,328 $133,519 $130,904

ARCELORMITTAL CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

In millions of U.S. dollars Three months ended Nine months ended September 30, 2011 June 30, 2011 September 30, 2010 September 30, 2011 September 30, 2010 Sales $24,214 $25,126 $19,744 $71,524 $57,326 Depreciation (1,155) (1,161) (1,108) (3,449) (3,320) Impairment (85) - (26) (103) (144) Operating income 1,168 2,252 1,028 4,851 3,208 Operating margin % 4.8% 9.0% 5.2% 6.8% 5.6% Income from equity method investments and other income 6 289 107 443 377 Net interest expense (477) (457) (376) (1,393) (1,032) Mark to market on convertible bonds 59 (4) 24 55 720 Foreign exchange and other net financing gains (losses) 26 (443) (31) (1,084) (688) Income (loss) before taxes and non-controlling interest 782 1,637 752 2,872 2,585 Current Tax (209) (311) (209) (834) (677) Deferred Tax 55 250 785 785 1,706 Income tax benefit (expense) (154) (61) 576 (49) 1,029 Income from continuing operations including non-controlling interest 628 1,576 1,328 2,823 3,614 Non-controlling interests (relating to continuing operations) 31 (41) (16) (21) (135) Income from continuing operations 659 1,535 1,312 2,802 3,479 Income from discontinued operations, net of tax - - 38 461 217 Net income attributable to owners of the parent $659 $1,535 $1,350 $3,263 $3,696 Basic earnings per common share 0.43 0.99 0.89 2.11 2.45 Diluted earnings per common share 0.19 0.93 0.89 1.81 2.03 Weighted average common shares outstanding (in millions) 1,549 1,549 1,510 1,549 1,510 Adjusted diluted weighted average common shares outstanding (in millions) 1,611 1,638 1,537 1,637 1,599 EBITDA[3] $2,408 $3,413 $2,162 $8,403 $6,672 EBITDA Margin % 9.9% 13.6% 11.0% 11.7% 11.6% OTHER INFORMATION Total iron ore production[13] (million metric tonnes) 17.4 15.9 17.4 46.9 49.6 Crude steel production (million metric tonnes) 22.4 24.4 22.2 70.2 69.0 Total shipments of steel products[14]   (million metric tonnes) 21.1 22.2 20.5 65.2 63.8 Employees (in thousands) 265 265 266 265 266

ARCELORMITTAL CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

In millions of U.S. dollars Three Months Ended Nine Months Ended September 30, 2011 June 30, 2011 September 30, 2010 September 30, 2011 September 30, 2010 Operating activities: Net income from continuing operations $659 $1,535 $1,312 $2,802 $3,479 Adjustments to reconcile net income (loss) to net cash provided by operations: Non-controlling interest (31) 41 16 21 135 Depreciation and impairment 1,240 1,161 1,134 3,552 3,464 Deferred income tax (55) (250) (785) (785) (1,706) Change in operating working capital[15] (1,013) (2,811) (1,045) (5,668) (4,670) Other operating activities (net) (30) (249) 88 (833) (256) Net cash (used in) provided by operating activities - Continued operations 770 (573) 720 (911) 446 Net cash (used in) provided by operating activities - Discontinued operations - - 60 (190) - Net cash (used in) provided by operating activities 770 (573) 780 (1,101) 446 Investing activities: Purchase of property, plant and equipment and intangibles (1,267) (1,065) (787) (3,363) (1,929) Other investing activities (net) (31) (186) (26) 324 (263) Net cash used in investing activities - Continued operations (1,298) (1,251) (813) (3,039) (2,192) Net cash used in investing activities - Discontinued operations - - (22) (105) (68) Net cash used in investing activities (1,298) (1,251) (835) (3,144) (2,260) Financing activities: Proceeds relating to payable to banks and long-term debt 407 1,433 1,373 1,353 1,001 Dividends paid (309) (302) (331) (905) (922) Proceeds from mandatorily convertible bond 250                        -   - 250 - Acquisition of non-controlling interest (7) - (207) (98) (590) Other financing activities (net)     (47) (25) (36) 20 (73) Net cash (used in) provided by financing activities - Continued operations 294 1,106 799 620 (584) Net cash (used in) financing activities - Discontinued operations - - (10) (8) (36) Net cash (used in) provided by financing activities 294 1,106 789 612 (620) Net (decrease) increase in cash and cash equivalents (234) (718) 734 (3,633) (2,434) Effect of exchange rate changes on cash (178) 54 242 17 (101) Change in cash and cash equivalents $(412) $(664) $976 $(3,616) $(2,535)

           

Appendix 1a - Key financial and operational information - Third Quarter of 2011

USDm unless otherwise shown Flat Carbon Americas Flat Carbon Europe Long Carbon Americas and Europe AACIS Distribution Solutions Mining FINANCIAL INFORMATION Sales $5,499 $7,696 $6,676 $2,619 $4,899 $1,678 Depreciation and impairment (227) (473) (253) (122) (40) (117) Operating income (loss) 193 (106) 185 162 8 725 Operating margin (as a % of sales) 3.5% (1.4%) 2.8% 6.2% 0.2% 43.2% EBITDA[3] 420 367 438 284 48 842 EBITDA margin (as a % of sales) 7.6% 4.8% 6.6% 10.9% 1.0% 50.2% Capital expenditure[16] 173 266 280 184 34 319 OPERATIONAL INFORMATION Crude steel production (Thousand MT) 5,866 7,390 5,611 3,493 - - Steel shipments (Thousand MT) 5,708 6,385 5,984 3,005 4,607 - Average steel selling price ($/MT)[17] 910 1,021 967 771 1,010 - MINING INFORMATION (Million Mt) Iron ore production[13] - - - - - 17.4 Coal production - - - - - 2.2 Iron ore shipped externally and  internally at market price[4] - - - - - 6.7 Iron ore shipped internally at cost-plus[4] - - - - - 6.9 Coal shipment shipped externally and  internally at market price[4] - - - - - 1.2 Coal shipped internally at cost-plus[4] - - - - - 0.8

Appendix 1b - Key financial and operational information - Nine Months of 2011

USDm unless otherwise shown Flat Carbon Americas Flat Carbon Europe Long Carbon Americas and Europe AACIS Distribution Solutions Mining FINANCIAL INFORMATION Sales $16,005 $24,059 $19,229 $8,046 $14,179 $4,463 Depreciation and impairment (675) (1,229) (775) (372) (129) (348) Operating income 1,197 245 753 628 161 1,936 Operating margin (as a % of sales) 7.5% 1.0% 3.9% 7.8% 1.1% 43.4% EBITDA[3] 1,872 1,474 1,528 1,000 290 2,284 EBITDA margin (as a % of sales) 11.7% 6.1% 7.9% 12.4% 2.0% 51.2% Capital expenditure[16] 436 766 760 487 94 816 OPERATIONAL INFORMATION Crude steel production (Thousand MT) 18,206 22,891 18,084 11,029 - - Steel shipments (Thousand MT) 16,791 20,935 18,023 9,451 13,403 - Average steel selling price ($/MT)[17] 900 990 948 743 1,009 - MINING INFORMATION (Million Mt) Iron ore production[13] - - - - - 46.9 Coal production - - - - - 6.5 Iron ore shipped externally and  internally at market price[4] - - - - - 19.6 Iron ore shipped internally at cost-plus[4] - - - - - 16.8 Coal shipment shipped externally and  internally at market price[4] - - - - - 3.6 Coal shipped internally at cost-plus[4] - - - - - 2.5

Appendix 2a: Steel Shipments by geographical location[18]  

(Amounts in thousands tonnes) 3Q 11 2Q 11 3Q 10 9M 11 9M 10 Flat Carbon America: 5,708 5,520 4,979 16,791 15,596 North America 4,271 4,186 3,680 12,878 11,406 South America 1,437 1,334 1,299 3,913 4,190 Flat Carbon Europe: 6,385 7,166 6,521 20,935 20,917 Long Carbon: 5,984 6,167 5,772 18,023 17,450 North America 1,190 1,187 1,125 3,450 3,185 South America 1,471 1,404 1,342 4,212 3,968 Europe 3,037 3,315 3,083 9,554 9,638 Other[19] 286 261 222 807 659 AACIS: 3,005 3,304 3,261 9,451 9,874 Africa 1,109 1,263 1,115 3,644 3,781 Asia, CIS & Other 1,896 2,041 2,146 5,807 6,093

 

Appendix 2b: Steel EBITDA[3] by geographical location

Amounts in USDm 3Q 11 2Q 11 3Q 10 9M 11 9M 10 Flat Carbon America: $420 $924 $379 $1,872 $1,397 North America 366 681 179 1,449 588 South America 54 243 200 423 809 Flat Carbon Europe: 367 636 452 1,474 1,472 Long Carbon: 438 610 603 1,528 1,760 North America 51 33 38 120 90 South America 227 278 414 743 1,210 Europe 84 233 103 460 337 Other[19] 76 66 48 205 123 AACIS: 284 462 274 1,000 920 Africa (7) 138 104 223 487 Asia, CIS & Other 291 324 170 777 433 Distribution Solutions: 48 115 126 290 370

Appendix 2c: Iron ore production (million metric tonnes)

Million metric tonnes^(a) Type Product 3Q 11 2Q 11 3Q 10 9M 11 9M 10 North America^(b) Open Pit Concentrate and Pellets 7.8 7.2 7.4 21.7 20.7 South America Open pit Lump and Sinter feed 1.3 1.3 1.3 3.8 3.5 Europe Open pit Lump and fines 0.6 0.4 0.4 1.4 1.1 Africa Open Pit / Underground Lump and fines 0.7 0.4 0.3 1.3 0.8 Asia, CIS & Other Open Pit / Underground Concentrate, lump and fines 3.7 3.7 3.5 10.7 10.3 Own iron ore production 14.1 13.1 13.0 39.0 36.4 North America^(c) Open Pit Pellets 1.8 0.9 2.2 2.7 7.9 Africa^(d) Open Pit Lump and Fines 1.4 1.8 2.2 5.1 5.3 Strategic contracts - iron ore 3.3 2.8 4.4 7.9 13.2 Group 17.4 15.9 17.4 46.9 49.6

a)     Total of all finished production of fines, concentrate, pellets and lumps.
b)     Includes own mines and share of production from Hibbing (USA-62.30%) and Pena (Mexico-50%).
c)     Includes two long term supply contracts with Cleveland Cliffs for periods prior to 2011. On April 8, 2011, ArcelorMittal announced that it  had reached a negotiated settlement with Cliffs Natural Resources Inc. ("Cliffs") regarding all pending contract disputes related to the procurement of iron ore pellets for certain facilities in the U.S.  As part of the settlement, Cliffs and ArcelorMittal agreed to specific pricing levels for 2009 and 2010 pellet sales and related volumes. Accordingly as from the first quarter of 2011, this excludes the long term supply contract for which settlement was reached.
d)     Includes long term lease - prices on a cost-plus basis and purchases made under the July 2010 interim agreement with Kumba (South Africa).

Appendix 2d: Iron ore shipments (million metric tonnes)

Millions tonnes 3Q 11 2Q 11 3Q 10 9M 11 9M 10 External sales - Third party 2.1 1.5 1.9  4.7  4.6 Internal sales - Market-priced 4.6 5.5 4.2 14.9 13.8 Internal sales - Cost-plus basis 6.9 6.2 6.1 16.8 15.7 FCA 2.6 2.4 2.1 5.3 4.1 Long 1.4 1.1 1.1 3.3 2.9 AACIS 2.9 2.7 2.8 8.1 8.7 Total sales 13.5 13.2 12.2 36.3 34.2 Strategic contracts 3.3 2.8 4.4 7.9 13.2 FCA 1.8 0.9 2.2 2.7 7.9 AACIS 1.4 1.8 2.2 5.1 5.3 Total 16.8 15.9 16.6 44.2 47.4

Appendix 2d: Coal production (Million metric tonnes)

Million metric tonnes 3Q 11 2Q 11 3Q 10 9M 11 9M 10 North America 0.57 0.61 0.60 1.73 1.76 Asia, CIS & Other 1.53 1.45 1.24 4.37 3.41 Own coal production 2.10 2.06 1.83 6.10 5.17 North America^(a) 0.05 0.08 0.06 0.18 0.16 Africa^(b) 0.07 0.09 0.06 0.23 0.16 Strategic contracts -  coal^(a),(b) 0.12 0.17 0.12 0.41 0.33 Group 2.22 2.23 1.95 6.51 5.50

a)     Includes strategic agreement - prices on a cost-plus basis
b)     Includes long term lease - prices on a cost-plus basis

Appendix 2e: Coal shipment (Million metric tonnes)

Million metric tonnes 3Q 11 2Q 11 3Q 10 9M  11 9M 10 External sales - Third party            0.80 0.95 0.51 2.55 1.61 Internal sales - Market-priced            0.42 0.35 0.42 1.08 0.97 Internal sales (AACIS) - Cost-plus basis            0.83 0.77 0.78 2.50 2.31 Total sales            2.05 2.06 1.72 6.13 4.89 Strategic contracts            0.12 0.17 0.12 0.41 0.33 Total            2.17 2.23 1.83 6.54 5.22

 Appendix 3: Debt repayment schedule as of September 30, 2011      

Debt repayment schedule ($ billion) 2011 2012 2013 2014 2015 >2015 Total Term loan repayments - Convertible bonds - - 0.1 2.1 - - 2.2 - Bonds - - 3.5 1.3 1.7 11.1 17.6 Subtotal - - 3.6 3.4 1.7 11.1 19.8 LT revolving credit lines - $6bn syndicated credit facility - - - - - 1.8 1.8 - $4bn syndicated credit facility - - - - - - - - $0.6bn bilateral credit facilities - - 0.3 - - - 0.3 Commercial paper[20] 1.0 0.2 - - - - 1.2 Other loans 1.1 1.5 0.5 0.3 0.3 0.9 4.6 Total Gross Debt 2.1 1.7 4.4 3.7 2.0 13.8 27.7

 

Appendix 4: Credit lines available as of September 30, 2011

Credit lines available ($ billion) Maturity Equiv. $ Drawn Available - $6bn syndicated credit facility 18/03/2016 $6.0 $1.8 $4.2 - $4bn syndicated credit facility 06/05/2015 $4.0 - $4.0 - $0.6bn bilateral credit facilities 30/06/2013 $0.6 $0.3 $0.3 Total committed lines $10.6 $2.1 $8.5

 

Appendix 5 - Other ratios

Ratios 3Q 11 2Q 11 Gearing[21] 39% 38% Net debt to average EBITDA ratio based on yearly average EBITDA from Jan 1, 2004 1.7X 1.7X Net debt to EBITDA ratio based on last twelve months EBITDA 2.4X 2.5X

 

Appendix 6 - Earnings per Share

In U.S. dollars Three months ended Nine months ended Sept 30, 2011 June 30, 2011 Sept 30, 2010 Sept 30, 2011 Sept 30, 2010 Earnings per share - Discontinued operations Basic earnings (loss) per common share 0.00 0.00 0.02 0.30 0.15 Diluted earnings (loss) per common share 0.00 0.00 0.02 0.28 0.13 Earnings per share - Continued operations Basic earnings (loss) per common share 0.43 0.99 0.87 1.81 2.30 Diluted earnings (loss) per common share 0.19 0.93 0.87 1.53 1.90 Earnings per share Basic earnings (loss) per common share 0.43 0.99 0.89 2.11 2.45 Diluted earnings (loss) per common share 0.19 0.93 0.89 1.81 2.03

Appendix 7 - EBITDA Bridge between 2Q 11 v 3Q 11

USD millions EBITDA 2Q11 Volume & Mix (a) Price-cost  (b) Non -Steel EBITDA (c) Other (d) EBITDA 3Q11 Group 3,413 (333) (576) (20) (76) 2,408

Note: Table excludes analysis on account of others and eliminations.

a) The volume variance indicates the sales value gain/loss through selling a higher/lower volume compared to the reference period, valued at reference period contribution (selling price-variable cost). The product/shipment mix variance indicates sales value gain/loss through selling different proportion of mix (product, choice, customer, market including domestic/export), compared to the reference period contribution. 
b) The price-cost variance is a combination of the selling price and cost variance. The selling price variance indicates the sales value gain/loss through selling at a higher/lower price compared to the reference period after adjustment for mix, valued with the current period volumes sold. The cost variance indicates increase/decrease in cost (after adjustment for mix, one time items, non-steel cost and others) compared to the reference period cost. Cost variance includes the gain/loss through consumptions of input materials at a higher price/lower price, movement in fixed cost, changes in valuation of inventory due to movement in capacity utilization etc.
c) Non-steel EBITDA variance primarily represents the gain/loss through the sale of by-products.
d) Other represents the gain/loss through movements in provisions including write downs, write backs of inventory, onerous contracts, reversal of provisions, dynamic delta hedge on raw materials, foreign exchange etc as compared to the reference period. 

Appendix 8 - Capex[16]

Capex USD millions 3Q 11 2Q 11 3Q 10 9M 11 9M 10 Flat Carbon Europe 266 239 150 766 428 Flat Carbon Americas 173 151 132 436 403 Long Carbon Steel 280 229 182 760 394 Asia, Africa and CIS 184 113 144 487 345 Distribution Solutions 34 32 25 94 61 Mining 319 297 112 816 265

 

Appendix 9 - End notes

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[1]The financial information in this press release has been prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB"). While the interim financial information included in this announcement has been prepared in accordance with IFRS applicable to interim periods, this announcement does not contain sufficient information to constitute an interim financial report as defined in International Accounting Standards 34, "Interim Financial Reporting". Unless otherwise noted the numbers in the press release have not been audited. The financial information and certain other information presented in a number of tables in this press release have been rounded to the nearest whole number or the nearest decimal. Therefore, the sum of the numbers in a column may not conform exactly to the total figure given for that column. In addition, certain percentages presented in the tables in this press release reflect calculations based upon the underlying information prior to rounding and, accordingly, may not conform exactly to the percentages that would be derived if the relevant calculations were based upon the rounded numbers.
[2]Lost time injury frequency rate equals lost time injuries per 1,000,000 worked hours, based on own personnel and contractors.
[3]EBITDA is defined as operating income plus depreciation, impairment expenses and exceptional items.
[4]Market price tonnes represent amounts of iron ore and coal from ArcelorMittal mines that could be sold to third parties on the open market.  Market priced tonnes that are not sold to third parties are transferred from the Mining segment to the Company's steel producing segments at the prevailing market price.  Shipments of raw materials that do not constitute market price tonnes are transferred internally on a cost-plus basis.
[5]Net debt refers to long-term debt, plus short-term debt, less cash and cash equivalents, restricted cash and short-term investments.
[6]The Company concluded that the assets subject to intended permanent idling were impaired and recorded an impairment loss of $85 million during the quarter. Restoration, site cleaning, voluntary separation scheme (VSS) and other costs will be recorded when social dialogue has sufficiently progressed.
[7]The Company's investment in Macarthur is accounted for under the equity method. As a result of the Company's intention to withdraw from the joint venture with Peabody Energy to acquire ownership of Macarthur Coal, the Company recognized an impairment loss of $119 million in the third quarter of 2011. This charge reflects a higher carrying value of the investment in Macarthur, which included accrued share of net income. After considering dividends received and changes in exchange rate through October 25, 2011 (date of the divestiture announcement) the transaction was essentially cash neutral.
[8]As from January 1, 2010 the Steel Solutions and Services segment has been renamed ArcelorMittal Distribution Solutions (AMDS).
[9]There are three categories of sales: 1) "External sales": mined product sold to third parties at market price; 2) "Market-priced tonnes": internal sales of mined product to ArcelorMittal facilities at prevailing market prices; 3) "Cost-plus tonnes" - internal sales of mined product to ArcelorMittal facilities on a cost-plus basis. The determinant of whether internal sales are transferred at market price or cost-plus is whether or not the raw material could practically be sold to third parties (i.e. there is a potential market for the product and logistics exist to access that market).
[10]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.
[11]Includes back-up lines for the commercial paper program of approximately $2.7 billion ( euro2 billion).
[12]In accordance with IFRS the Company has adjusted the 2009 financial information retrospectively for the finalization in 2010 of the allocation of purchase price for certain business combinations carried out in 2009. The adjustments have been reflected in the Company's consolidated financial statements for the year ended December 31, 2010.
[13]Total of all finished production of fines, concentrate, pellets and lumps (includes share of production and strategic long-term contracts).
[14]ArcelorMittal Distribution Solutions shipments are eliminated in consolidation as they primarily represent shipments originating from other ArcelorMittal operating subsidiaries.
[15]Changes in operating working capital are defined as trade accounts receivable plus inventories less trade accounts payable.
[16]Capex includes the acquisition of intangible assets (such as concessions for mining and IT support).
[17]Average steel selling prices are calculated as steel sales divided by steel shipments.
[18]Shipments originating from a geographical location.
[19]Includes Tubular products business.
[20]Commercial paper is expected to continue to be rolled over in the normal course of business.
[21]Gearing is defined as (A) long-term debt, plus short-term debt, less cash and cash equivalents, restricted cash and short-term investments, divided by (B) total equity.