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Annual Report 2015

Management report 1

Table of contents

Management Report Company overview ______2 Business overview______3 Disclosures about market risks______29 Group operational structure______32 Key transactions and events in 2015______35 Recent developments______35 Corporate governance ______36 > law disclosure______61 Additional information______62 Chief executive officer and chief financial officer’s responsibility statement______65

Consolidated financial statements for the year ended December 31, 2015______66 Consolidated statements of operations______67 Consolidated statements of other comprehensive income ______68 Consolidated statements of financial position______69 Consolidated statements of changes in equity______70 Consolidated statements of cash flows______71 Notes to the consolidated financial statements______72 Report of the réviseur d’entreprises agréé – consolidated financial statements______161

Financial statements of ArcelorMittal parent company for the year ended December 31, 2015______162 Management Report______163 Chief executive officer and chief financial officer’s responsibility statement______164 Statements of financial position______165 Statements of operations______166 Statements of other comprehensive income______166 Statements of changes in equity______167 Statements of cash flows______168 Notes to the financial statements______169 Report of the réviseur d’entreprises agréé – financial statements of ArcelorMittal parent company______205

Risks related to the global economy and the industry ______207

Mining ______219 2 Management report

Company Overview other scientific bodies. organization to a diverse range of and full shipments at Peña Colorada customers in approximately 160 for own use), approximately 62% of History and development of the Against this backdrop, ArcelorMittal’s countries including the automotive, ArcelorMittal’s -ore requirements Company strategy is to leverage four distinctive appliance, engineering, construction and approximately 15% of its PCI attributes that will enable it to and machinery industries. The and coal requirements were supplied ArcelorMittal is the world’s leading capture leading positions in the most Company also produces various from its own mines or pursuant integrated steel and attractive areas of the steel industry’s types of mining products including to strategic contracts at many of company. Since the creation of value chain, from mining at one lump, fines, concentrate and its operating units. The Company ArcelorMittal in 2006 (through the end to distribution and first-stage sinter feed, as well as coking, PCI and currently has iron ore mining combination of Mittal Steel and processing at the other: global scale thermal coal. activities in , Bosnia, Canada, ) and continuing through and scope; unmatched technical , , Mexico, 2008, ArcelorMittal pursued a capabilities; a diverse portfolio of As a global steel producer, the and the . The Company disciplined growth strategy, with steel and related businesses, one Company is able to meet the currently has coal mining activities transactions in , Australia, of which is mining; and financial needs of different markets. in Kazakhstan and the United States. , Brazil, Canada, Costa Rica, capabilities. Steel consumption and product ArcelorMittal also has made strategic , , , , requirements clearly differ between investments in order to secure access Italy, Mexico, , Russia, Slovakia, Geography: ArcelorMittal is the developed markets and developing to other raw materials including , Sweden, , the largest steel producer in the markets. Steel consumption in manganese and ferro alloys. United Kingdom, Uruguay, United Americas, Africa and Europe and is developed economies is weighted Arab , the United States and the fifth largest steel producer in the towards flat products and a higher In addition, ArcelorMittal produces Venezuela. Beginning in the latter CIS region. ArcelorMittal has steel- value-added mix, while developing substantial amounts of direct part of 2008, ArcelorMittal largely making operations in 19 countries markets utilize a higher proportion reduced iron, or DRI, which is a suspended mergers and acquisitions on four continents, including 54 of long products and commodity scrap substitute used in its mini-mill activity in light of the deteriorating integrated and mini-mill steel- grades. To meet these diverse needs, facilities to supplement external economic and market environment, making facilities. As of December the Company maintains a high metallics purchases. ArcelorMittal and sharply curtailed its investment 31, 2015, ArcelorMittal had degree of product diversification and is also a significant producer of activities, with the exception of the approximately 209,000 employees. seeks opportunities to increase the coke, which is produced from acquisition (along with a partner) of proportion of higher value-added metallurgical coal and is a critical Baffinland in 2011. ArcelorMittal’s steel-making products in its product mix. raw material for steel-making, operations have a high degree satisfying 86% of its coke needs Since September 2011, ArcelorMittal of geographic diversification. Automotive focus: ArcelorMittal has through its own production facilities. has been undergoing a deleveraging Approximately 37% of its crude a leading market share in its core ArcelorMittal’s facilities have process to reduce its indebtedness steel is produced in the Americas, markets in the automotive steel good access to shipping facilities, including numerous divestments of approximately 47% is produced business and is a leader in the fast- including through ArcelorMittal’s non-core assets (see note 2.3 to the in Europe and approximately 15% growing advanced high strength own 17 deep-water port facilities consolidated financial statements is produced in other countries, segment. ArcelorMittal and linked railway sidings. for the divestments made in 2014 such as Kazakhstan, South is the first steel company in the and 2015). Despite ArcelorMittal’s Africa and Ukraine. In addition, world to embed its own engineers ArcelorMittal has its own overall strategy of deleveraging, the ArcelorMittal’s sales of steel products within an automotive customer downstream steel distribution Company completed an acquisition are spread over both developed to provide engineering support. business, primarily run through its through a 50/50 joint venture and developing markets, which The Company begins working with Europe segment. It also provides partnership of Calvert in 2014. have different consumption original equipment manufacturers value-added and customized characteristics. ArcelorMittal’s mining (“OEMs”) as early as five years before steel solutions through additional ArcelorMittal’s success is built on operations, present in North and a vehicle reaches the showroom, processing activities to meet specific its core values of sustainability, South America, Africa, Europe and to provide generic steel solutions, customer requirements. quality and leadership and the the CIS region, are integrated with its co-engineering and help with the entrepreneurial boldness that has global steel-making facilities and are industrialization of the project. In empowered its emergence as the important producers of iron ore and June 2013, ArcelorMittal launched an first truly global steel and mining coal in their own right. innovative ultra-lightweight steel car company. Acknowledging that a door, which is less expensive than an combination of structural issues Products: ArcelorMittal produces a aluminum door. In addition, further and macroeconomic conditions will broad range of high-quality finished solutions developed for the pick-up continue to challenge returns in its and semi-finished steel products trucks market offer weight savings sector, the Company has adapted (“semis”). Specifically, ArcelorMittal benefits. its footprint to the new demand produces flat steel products, realities, redoubled its efforts to including sheet and plate, and long Mining Value Chain: ArcelorMittal control costs and repositioned steel products, including bars, rods has a significant portfolio of raw its operations to outperform its and structural shapes. In addition, material and mining assets, as competitors. ArcelorMittal’s research ArcelorMittal produces pipes and well as certain strategic long-term and development capability is strong tubes for various applications. contracts with external suppliers. and includes several major research ArcelorMittal sells its steel products In 2015 (assuming full shipments centers as well as strong academic primarily in local markets and of iron ore at ArcelorMittal Mines partnerships with universities and through its centralized marketing Canada, Serra Azul, Andrade, Liberia Management report 3

Cautionary Statement Regarding Corporate and other information Business overview demand fell by over 10%. Since Forward-Looking Statements then, deliveries have increased in ArcelorMittal is a public limited The following discussion and each of the past three years, but This annual report may contain liability company (société analysis should be read in in 2015 were still lower than 2011 forward-looking statements anonyme) that was incorporated conjunction with ArcelorMittal’s levels and remained close to 25% based on estimates and for an unlimited period under consolidated financial statements below 2007 levels. Underlying assumptions. Forward-looking the laws of the Grand Duchy of and related notes for the year steel demand in North America statements include, among other Luxembourg on June 8, 2001. ended December 31, 2015 has increased in each of the past things, statements concerning ArcelorMittal is registered at the included in this annual report. five years, but apparent demand the business, future financial R.C.S. Luxembourg under number has been negatively impacted by condition, results of operations B 82.454. inventory movements, particularly and prospects of ArcelorMittal, Key factors affecting results of during 2014 when inventories including its subsidiaries. These The mailing address and operations rose significantly on the back of statements usually contain the telephone number of a rapid increase in imports and words “believes”, “plans”, “expects”, ArcelorMittal’s registered office are: ArcelorMittal’s sales are were up almost 40% over 2013. “anticipates”, “intends”, “estimates” predominantly derived from This led to stockists purchasing or other similar expressions. For ArcelorMittal the sale of flat steel products, over six million fewer tonnes in each of these statements, you 24-26, Boulevard d’Avranches long steel products, and tubular 2015, as compared to 2014, as they should be aware that forward- L-1160 Luxembourg products, as well as of iron ore sought to reduce inventory levels looking statements involve Grand-Duchy of Luxembourg and coal. Prices of steel products, as steel prices declined. Although known and unknown risks and Telephone: +352 4792-3746 iron ore and coal, in general, underlying steel demand uncertainties. Although it is are sensitive to changes in continued to rise (remaining believed that the expectations worldwide and regional demand, strong in the Company’s core reflected in these forward-looking ArcelorMittal’s agent for U.S. which, in turn, are affected by markets, U.S. and Europe) in statements are reasonable, there is federal securities law purposes is: worldwide and country-specific 2015, apparent demand declined no assurance that the actual results economic conditions and available significantly, negatively impacting or developments anticipated will ArcelorMittal USA LLC production capacity. the Company’s deliveries and be realized or, even if realized, 1 South Dearborn Street, 19th floor profitability. The significant that they will have the expected , 60603 The steel industry, and the iron declines in steel demand in Brazil effects on the business, financial United States of America ore and coal mining industries, and the CIS over the past two condition, results of operations or Telephone: + 1 312 899-3985 which provide its principal years have reduced their share of prospects of ArcelorMittal. raw materials, have historically the Company’s deliveries to under ArcelorMittal shares are listed and been highly cyclical. They are 10% contributing to the overall These forward-looking statements traded (through a single order significantly affected by general decrease in deliveries. speak only as of the date on which book as from January 14, 2009) on economic conditions, as well as by the statements were made, and no the European markets worldwide production capacity Demand dynamics in China obligation has been undertaken (Paris and Amsterdam) (symbol and fluctuations in international have also substantially affected to publicly update or revise any “MT”), are admitted to trading on steel trade and tariffs. In particular, the global steel business. After forward-looking statements made the Luxembourg ’s this is due to the cyclical nature growing strongly since 2000, in this annual report or elsewhere regulated market and listed on of the automotive, construction, Chinese steel demand has started as a result of new information, the Official List of the Luxembourg machinery and equipment and to decline as a result of weaker future events or otherwise, except Stock Exchange (symbol “MT”) transportation industries that real estate sector construction as required by applicable laws and and are listed and traded on the are the principal consumers of and machinery production. This regulations. A detailed discussion Spanish Stock Exchanges (symbol steel. After a period of continuous decline in domestic demand has of principal risks and uncertainties “MTS”). ArcelorMittal shares are growth between 2004 and 2008, led to a surge in Chinese steel which may cause actual results also listed and traded on the NYSE the sharp fall in demand resulting exports, which increased by over and events to differ materially from (symbol “MT”). from the global economic crisis 30 million tonnes from 2013 to such forward-looking statements is demonstrated the steel market’s 2014, and then by an additional 18 included in the section titled “Risk vulnerability to and sharp million tonnes from 2014 to 2015. factors”. The Company undertakes Internet site corrections. This increase in Chinese exports no obligation to update or revise is greater than the growth in publicly any forward-looking ArcelorMittal maintains an Internet The North American and European world ex-China steel demand over statements whether because of site at www..com. markets together account for over the past two years, and has had new information, future events, Information contained in or 60% of ArcelorMittal’s deliveries in the effect of curtailing domestic or otherwise, except as required otherwise accessible through this 2014 and 2015 and, consequently, production in countries outside by securities and other applicable Internet site is not a part of this any weakness in these markets of China over the period. While laws. annual report. All references in this can have a significant impact the majority of these exports are annual report to this Internet site on ArcelorMittal’s results. The directed to Asia, an increasing are inactive textual references to onset of the crisis proportion is being directed this URL and are for information caused underlying European toward ArcelorMittal’s core only. steel demand to weaken in 2012 markets and Europe, in particular. and, coupled with significant While not a sustainable long-term destocking, apparent steel strategy, Chinese exports in 2015 4 Management report

were increasingly being sold at due in part to the tendency of Economic environment1 their highest level since 2009. prices apparently below cost distributors to increase purchases Moderating fiscal consolidation (China Iron and Steel Association of steel products early in a rising Global GDP growth fell short of and healing labor markets are also (“CISA”) reports large and cycle of raw material prices and expectations in 2015, slowing underpinning domestic demand, medium-sized CISA mills losing to hold back from purchasing as marginally, to 2.5% year-on-year, although conditions vary across RMB 53 billion ($8.6 billion) from raw material prices decline. With from 2.7% in 2014 (2.5% in 2013) countries. Activity firmed in January through November 2015), respect to (b), as average cost basis as deceleration in key emerging , but France and Italy are still negatively impacting prices and is used to determine the cost of and developing economies lagging, whereas growth slowed in therefore margins in many regions. the raw materials incorporated, overshadowed a modest recovery the United Kingdom but remained Unlike many commodities, steel inventories must first be worked in major developed countries stronger than the eurozone is not completely fungible due through before a decrease in raw in 2015. This deceleration was average. Peripheral economies to wide differences in shape, material prices translates into accompanied by further declines saw little contagion from another chemical composition, quality, decreased operating costs. In in commodity prices, subdued Greek crisis, which led to a third specifications and application, some of ArcelorMittal’s segments, global trade, bouts of financial bailout program and promises of all of which affect sales prices. in particular Europe and NAFTA, market volatility, and weakening further reforms. Credit conditions Accordingly, there is still limited there are several months between capital flows. have improved, supported by the exchange trading and uniform raw material purchases and sales European Central ’s (“ECB”) pricing of steel, whereas there is of steel products incorporating Domestic demand in the United quantitative easing program. increasing trading of steel raw those materials. Although this States was supported by robust With headline inflation close to materials, particularly iron ore. lag has been reduced recently by consumption and investment, with zero in 2015, deflation concerns Commodity spot prices can vary, changes to the timing of pricing the exception of the oil sector. U.S. have receded but have not which causes sale prices from adjustments in iron ore contracts, GDP growth in 2015 is estimated disappeared, prompting the ECB exports to fluctuate as a function it cannot be eliminated and at 2.5%, the highest annual rate in to ease monetary policy further in of the worldwide balance of exposes these segments’ margins the post-2008 crisis period. Solid December 2015. supply and demand at the time to changes in steel selling prices in labor market conditions and low sales are made. ArcelorMittal’s the interim (known as a “price-cost oil prices continue to support a Sectoral rebalancing in China sales are made on the basis of squeeze”). In addition, decreases in consumption-led recovery, with became more pronounced in shorter-term purchase orders as steel prices may outstrip decreases automotive sales growing by 2015 with GDP growth slowing well as some longer-term contracts in raw material costs in absolute over 5% year-on-year in 2015 to in 2015 to an estimated 6.9%, to certain industrial customers, terms, as has occurred numerous a record of 17.4 million. Nominal down from 7.3% in 2014. In line particularly in the automotive times over the past few years. construction spending increased with rebalancing efforts, the industry. Steel price surcharges are by around 10% year-on-year in deceleration in activity during often implemented on steel sold Given this overall dynamic, the 2015, with strong growth in both 2015 has been most visible in pursuant to long-term contracts in Company’s operating profitability residential and non-residential heavy industry and real estate order to recover increases in input has been particularly sensitive to construction. The weakness in sectors with considerable costs. However, spot market steel, fluctuations in raw material prices, net exports is the result of the overcapacity and, in the case of iron ore and coal prices and short- which have become more volatile strong dollar and softness in heavy industry, a high presence term contracts are more driven by since the iron ore industry moved external demand, particularly from of state-owned enterprises. market conditions. away from annual benchmark large emerging markets. Despite Weaker manufacturing growth pricing to quarterly pricing in 2010. headline inflation of around zero and declining construction activity One of the principal factors Iron ore prices were relatively in the second half of 2015, the has significantly impacted import affecting the Company’s operating stable in 2013, averaging $135/t, Federal Reserve began increasing demand, which contracted in the profitability is the relationship but fell sharply in 2014, reaching interest rates in December due first half of 2015. The service sector between raw material prices and lows of $68/t in December 2014 to the strength of labor markets. has seen its share of employment steel selling prices. Profitability and averaging under $100 for the Fiscal policy has eased to a broadly increasing in recent years, and depends in part on the extent first time since 2009. Volatility on growth-neutral stance in 2015, accounted for the majority of to which steel selling prices steel margins aside, the results of after having been a headwind in new urban jobs created in 2015. exceed raw material prices, and, the Company’s mining segment previous years. The fiscal deficit widened to a in particular, the extent to which are also directly impacted by iron six-year high of 2.3 percent of GDP changes in raw material prices are ore prices, which were weaker (EU) GDP growth in 2015, reflecting accelerated passed through to customers in again in 2015, ending the year at picked up in 2015 to around infrastructure investment by the steel selling prices. Complicating $40/t and averaging only $55.5/t. 1.8%, as domestic demand central government to support factors include the extent of the This means, among other things, strengthened and eurozone growth in the second half of time lag between (a) the raw that if iron ore prices were to exports were supported by the year. The People’s Bank of material price change and the steel remain around current levels depreciation. Low oil prices and China introduced a change in selling price change and (b) the ($40/t) due to continued strong improving financing conditions are the calculation of the renminbi date of the raw material purchase growth of supply or any further supporting consumer spending reference rate on August 10, and of the actual sale of the steel significant decline of Chinese steel and investment. Indeed, EU 2015, leading to an almost 3% product in which the raw material production, this would continue automotive sales grew by 9% year- depreciation against the US$. was used (average cost basis). In to have a negative impact on on-year in 2015 to 13.7 million, Otherwise, the renminbi was recent periods, steel selling prices ArcelorMittal’s revenues and stable throughout most of 2015, have tended to react quickly to profitability. 1 GDP and industrial production data but weakened further towards the and estimates sourced from IHS Global changes in raw material prices, Insight January 15, 2016. end of the year. Management report 5

Brazil and Russia have taken a continued to rise in 2014, up 3.2% in 2015. EU28 steel output of 2015, with strong bookings turn for the worse as a result of to 1.65 billion tonnes due again to decreased by 1.8% to around in industry and auto. Despite global and domestic headwinds, the rising output in China. Chinese 166.2 million tonnes even though this, steel prices saw consistent and the weakness in oil and production is estimated to have consumption recorded positive weakening on a monthly basis other commodity prices, with increased from 775 million tonnes growth; the incremental demand from April to June, due mainly to both countries experiencing in 2013 to about 813 million was in fact satisfied by imports. pressure from imports. Spot HRC deepening contractions, above- tonnes in 2014 (+5.0% year-on- North American steel production averaged at €398-405 ($440- target inflation, and deteriorating year), whereas world ex-China fell by 8.5% in 2015 mainly due 448)/t in Northern Europe and at public finances. In South Africa, growth also increased only 1.5% to a decline in U.S. output, which €385-393 ($425-435)/t in Southern chronic power supply bottlenecks year-on-year to 839 million tonnes. tumbled by 10.5% as stockholders Europe. Aggressive domestic are a major factor behind weak World crude steel production fell and end-users sought to correct offers at the beginning of the third growth. In contrast to other major in 2015, for the first time since inventories which had grown in quarter, coupled with low-priced developing countries, growth in 2009, as steel consumption in 2014 when total steel imports imports from Turkey, Russia and remained robust, buoyed by developed and key emerging rose by almost 40%. In the CIS, China, kept prices in Europe under strong investor sentiment and the markets declined. Amid depressed output also fell (-4.3% in 2015 pressure, and HRC spot saw a drop positive effect on real incomes of demand conditions, the availability year-on-year) as a recession of approximately €27/$27 quarter the recent fall in oil prices. of low priced imports, particularly lowered domestic demand on quarter, in Northern Europe, from CIS, in which domestic and overwhelmed increased to €372-378 ($414-420)/t and Global industrial production demand also declined, forced international competitiveness €37/$38/t, in Southern Europe, to (“IP”) growth slowed to 1.5% many producers across the world from weaker domestic currencies. €348-357 ($387-397)/t. Eurozone year-on-year as IP in Organization to curtail output. South America also saw a 2.5% consumer confidence dropped for Economic Co-operation and decline in production as Brazilian to a nine-month low in October, Development (“OECD”) countries Between 2009 and 2014, global steel demand faltered by around while the gap in the offer price eased to just 0.9% year-on-year production increased by around 15% due to economic issues facing for steel in northern vs. southern in 2015, after growing by 2.3% in 35%, rising by approximately the country. In Asia, production Europe continued to feed 2014, whereas IP growth in non- 0.5 billion tonnes to 1.67 billion decreased by 2.3%, mainly due expectations for price declines. OECD countries slowed to 2.3% in tonnes in 2014, of which China to slower growth in China and a HRC spot further weakened during 2015 from 3.8% in 2014. alone accounted for around 60% 5% decline in Japanese output. the fourth quarter to €325-335 of the growth. While global steel In India, however, production ($357-368)/t in Northern Europe Global apparent steel consumption also increased increased by 2.6% and elsewhere, and to €293-304 ($322-333)/t in consumption (“ASC”) is estimated following the 2009 financial crisis, Australia/New Zealand also Southern Europe. to have fallen by 2.2% year-on- the slowdown in China in 2014 and recorded a 4.6% rise in production. year. This was mainly due to 2015 exposed the excess capacity In the United States, 2015 the slowdown in China, where issues faced by the steel industry started with a positive economic consumption fell by 4.5% in 2015, as Chinese producers increased Steel prices3 outlook, supported by consumer the second consecutive year of export volumes to compensate for confidence in February at its decline. However, Chinese demand falling domestic demand. Indeed, Steel prices for Flat products highest since 2007, despite estimates are subject to change, Chinese exports soared by 72% in Europe remained relatively negative sentiment in the oil & due to significant revisions to steel over the past two years, rising to a stable in euro terms during the gas sector. The steel market was production estimates to account record 112 million tonnes in 2015. first quarter of 2015 against 2014 nevertheless challenging, due to for under-reported output by fourth quarter averages, despite high inventories and buyer caution Chinese mills. Elsewhere, world- Global steel production is continuous erosion of raw material in placing orders. A strong USD ex-China ASC fell by just 0.3%, as estimated to have fallen by 2.8% to costs. A balanced market, low continued to encourage imports significant declines in CIS (-8%), 1.62 billion tonnes in 2015 (-1.8% interest rates and steady demand during the first quarter of 2015, NAFTA (-7%) and year-on-year over the first half of for durables, coupled with the with South Korea, , Germany (-7%) were offset by growth in the year and -3.6% year-on-year weak euro, helped improve the and Australia quickly taking over other regions, particularly EU28 over the second half of the year). steel market in the first quarter of volumes upon the termination of (+3%), Asia ex-China (+5%) and Production in the second half of 2015. In Northern Europe the price an export suspension agreement Africa & Middle East (+4%). 2015 was weaker and reflected for hot rolled coil (“HRC”) improved with Russia in December 2014. worsening global demand slightly from January to March, to Domestic prices declined, conditions over the period and an average of €405-413 ($458-467) especially during February and Steel production2 increased destocking as prices fell. per tonne (/t) for the first quarter March, following declines in Scrap China, which accounted for 49.5% of 2015. Prices saw a similar trend #1 Busheling, which fell from After declining sharply during of steel production in 2015 (49.3% in Southern Europe, with spot HRC $369 per gross tonne (“/GT”) in 2009 to 1.2 billion tonnes, world in 2014), saw a decline in output improving to €395-404 ($446-456)/ January to $255/GT in March. crude steel production grew of 2.3% as tighter steel margins t, while a weaker euro impacted Spot HRC prices during the first robustly each year to 1.6 billion rendered some mills unprofitable the realization of this improvement quarter of 2015 dropped from tonnes in 2013, driven by strong and producers were unable to in USD terms both in Northern a $631/t average in January to Chinese growth. Global production offset the decline in domestic and Southern Europe by roughly $531/t in March, for a quarterly 2 Global production data is for all demand with increased exports. -$50 quarter on quarter. Economic average of $578/t. The second 66 countries for which production Apart from China, almost all major conditions remained good in quarter had a weak start, with data is collected by the World steel, steel producing regions also Europe during the second quarter declining scrap prices rolling over accounting for around 99% of global steel production. recorded a decline in production 3 Source: Steel Business Briefing (SBB) into April and HRC bottoming at 6 Management report

$491-503/t, before strengthening excluded. Demand continued to imported into Turkey dropped demand and excess Chinese of underlying demand aided prices shrink in the fourth quarter, as the substantially during the first two capacity had a negative impact on to firm to a $502-510/t level in May. cold season approached and HRC months of 2015 from $311/t production in many regions. With Scrap #1 Busheling gained $30 domestic prices saw a drop in their CFR in January to $248/t CFR in the exception of Europe, apparent from April to June to an average quarterly average to $250-252/t February. This was followed by an consumption in developed of $266/GT for the second quarter level, VAT excluded. unexpected price improvement markets fell in 2015, particularly in of 2015, supporting HRC price starting in March, on the back of United States where the inventory improvement to $507-514/t in Long products saw resilient tight supply, to a peak of $286/t overhang resulted in an almost June, for a quarterly average of demand in Europe in January in May (average range of $274- 10% fall in apparent demand. $500-509/t. Despite the consumer and February 2015, and a slight 279/t during the second quarter Steel production in the USA fell by confidence index increasing by increase in scrap price gave of 2015). Export prices for Turkish 10.5% in 2015 as imports remained +10.5 points from July to 101.5 in support for improvement on rebar fluctuated alongside scrap elevated relative to historical August, and steel consumption commodity pricing, despite dropping from $493/t FOB in levels, particularly for flat and long being sustained by strong sales pressure from Russia and Ukraine January to $436/t FOB in March products, despite an overall fall of in auto (17.7 million units SAAR in in Eastern Europe. Buyers became ($455-461/t average range in 6.5% year-on-year. ArcelorMittal August), prices started weakening more hesitant towards the end the first quarter), and reversing expects continued growth in again during the third quarter, of the first quarter as scrap price to a peak of $454/t FOB in May underlying real steel demand in as U.S. prices re-aligned to those weakened and expectations built (second quarter average range the United States in 2016 and, globally and scrap prices failed for a price decline. Medium section of $441-446/t FOB). The spread due to the level of destocking to provide cost support. Spot prices, however, saw progressive, of Turkey FOB rebar prices over last year, considers that apparent HRC price fell to $485-497/t by albeit limited, improvement scrap declined by approximately steel demand and domestic September, for a quarterly average from January to March 2015 $20/t during the period, partly steel production will be likely to of $499-510/t. Demand for both (+€7/t), with a quarterly average compensated by the Turkish lira’s rebound. In Europe, ArcelorMittal scrap and finished steel during at €512-522 ($577-589)/t. Rebar depreciation. Turkish imported expects the gradual recovery in the fourth quarter remained weak prices, on the other hand, were scrap saw significant price the steel consuming sectors to due to destocking and Scrap #1 impacted to a greater degree by declines during the third and the continue, albeit more slowly than Busheling fell to $167-180/GT, scrap fluctuation, and declined fourth quarters, as raw material in 2015, while steel production pushing HRC spot price down by €10 during the quarter, to costs continued to deteriorate is only likely to be up slightly approximately $70 quarter on an average range of €413-422 and international price pressure year-on-year in 2016, provided quarter, to an average of 421-438/t. ($466-476)/t. The European increased. Scrap HMS 1&2 fell to that trade actions are taken to ’s lending survey as low as $204/t CFR Turkey by protect domestic producers In China, 2015 began with at the beginning of the second September and $180/t CFR Turkey from unfairly priced imports. increased uncertainty due to the quarter sustained a take-off for in October, followed by slight ArcelorMittal forecasts that change in export rebate policy as construction investments, thus improvement towards the end of global steel demand will remain of January 1, 2015 (discouraging demand continued solid during 2015 (to $188 avg. in December). stable in 2016, at best rising by exports and adding more pressure the April-June period. In addition, Lack of support from scrap, as less than 1% in 2016, following on the domestic market), and the with scrap picking up, further well as weaker billet prices (due a 2.2% fall in 2015 triggered government’s efforts to implement price gains were achieved in euro to severe Chinese competition), by weakening developing anti-pollution regulation, terms both for medium sections at coupled with weak demand, markets and destocking in some impacting producer costs and €521-530 ($576-585)/t and rebar impacted rebar prices, which developed economies. While possible cuts to capacity. Despite prices at €418-426 ($462-470)/t. dropped during the third quarter ArcelorMittal expects continued the Central Bank’s 0.5% cut to Price trends reversed starting to an average of $383-392/t FOB weakness in Brazil and Russia, the reserve requirement ratio to in the third quarter, as pressure Turkey, and further to $331-337/t the magnitude of their declines is boost growth, steel market activity on scrap from the international FOB, during the fourth quarter. expected to be lower than those remained depressed in the first markets resulted in E3 scrap prices of 2015. China too is expected quarter of 2015 and remained dropping, impacting commodity to see demand levels fall slightly, weak into the second quarter, offers. Medium section prices Current and anticipated trends in likely to be in the -1% range due to declining real estate declined to €511-520 ($568-578)/t steel production and prices assuming the real estate market demand. Production, however, and rebar to €405-413 ($450-458)/ begins to improve in the second was sustained by exports, which t. The situation continued into the Steel output declined in major half of 2016. Weaker emerging surged from March onward. fourth quarter, when further scrap steel producing regions in 2015 market currencies are expected Domestic prices continued their deterioration pushed medium reflecting falling global steel to continue to support export accelerated decline, with spot sections down approximately consumption, as well as the opportunities, due to international HRC down to $357-362/t VAT €36/$48 versus the third quarter, availability of cheaper imports price competitiveness, thereby excluded, during the first quarter to a range of €474-486 ($519- from mainly China and the CIS. supporting steel production in (from $415-419/t in the fourth 532)/t, and rebar prices were down Chinese production declined by these countries. In China, the quarter of 2014), and further to by approximately €38/$49, ranging around 2% compared to a fall in increasing threat of countervailing $326-330/t VAT excluded, in the around €366-374 ($401-410)/t. domestic consumption of around and anti-dumping measures second quarter. Market sentiment 4.5%, while exports continued to against Chinese origin material remained weak during the third In 2015, scrap prices globally increase substantially to a record by several countries, as well quarter, with prices declining re-aligned following a year of 112 million tonnes in 2015, up 18 as domestic environmental month by month, to an HRC anomalously high levels. Prices million tonnes year-on-year. The compliance issues are likely to average of $268-269/t level, VAT of scrap HMS 1&2 of USA origin combination of softening global keep steel production growth Management report 7

muted, particularly as global vs. Q4-2015). supply in the seaborne market Coking coal steel demand remains subdued As for pricing mechanisms, and financial weakness in the in the first half of 2016. Should since 2012, quarterly and Chinese steel sector. Credit market Due to a continued strong supply competitively priced Chinese monthly pricing systems have tightness combined with stretched and weak demand outlook, the exports continue to rise, been the main type of contract cash flows at Chinese mills resulted spot coking coal market remained however, production growth in pricing mechanisms, but spot in a strong destocking trend at weak in 2013. Better-than-average export destinations will likely be purchases also appear to have Chinese mills from the beginning supply conditions during the negatively affected. gained a greater share of pricing of the year through the end of the Australian wet season in early 2013 mechanisms as steelmakers have second quarter. Rising iron ore contributed to a decrease in hard Despite the weakness of steel developed strategies to benefit import inventory at Chinese ports coking coal prices in the first half prices, steel spreads (the difference from increasing spot market was reflective of stronger seaborne of 2013, with premium coking between raw material costs and liquidity and volatility. In 2015, supply while real iron ore demand coal spot prices reaching a low finished steel prices) have actually the trend for using shorter-term in the Chinese off-shore market of $130 per tonne (FOB Australia) begun to pick up so far in the pricing cycles continued, with the remained relatively stable. by the end of the second quarter. first quarter of 2016 from the spot market remaining liquid and Spurred by Chinese demand, spot depressed levels seen at the turn driven by Chinese demand. The downward trend continued hard coking coal prices began to of the year. Ultimately, steel prices and reached $66-69 per tonne in increase at the beginning of the will depend on the strength of Iron ore late December 2014 on continued third quarter of 2013, peaking at underlying raw material prices, structural iron ore oversupply $152 per tonne in mid-September. which are a function of both In the first quarter of 2013, iron and persistent strains in the credit However, despite high imports of the demand and supply of each ore prices increased dramatically market in China. The average spot coking coal to China, the seaborne commodity. reaching $160 per tonne in late price for the fourth quarter was coking coal market remained weak February as a result of restocking $74 per tonne, or 18% lower than until the end of 2013, largely as a Raw materials in China before the New Year the previous quarter at $90 per result of relatively weak ex-China holiday and a seasonally weaker tonne. As of end of January 2015, seaborne demand, an improved The primary raw material inputs supply due to weather-related iron ore spot prices were trading supply base from Australia and for a steelmaker are iron ore, solid disruptions in production in Brazil in the range of $62-69 per tonne strong domestic production fuels, metallics (e.g., scrap), alloys, and Australia. The average price for (January 15-30, 2015, CFR China, in China. The premium coking electricity, natural gas and base the first quarter of 2013 was $148 Platts index, 62% Fe). coal spot price was $131 per metals. ArcelorMittal is exposed per tonne. In the second quarter tonne on December 31, 2013. In to price volatility in each of these of 2013, iron ore prices declined The downward trend of iron ore 2013, contract prices followed raw materials with respect to its significantly as a result of stock prices persisted through 2015, the volatile spot price trend purchases in the spot market cuts stemming from uncertainties with quarterly averages spot prices over the year, with the quarterly and under its long-term supply about the Chinese market outlook, of $62.40 per tonne in the first contract price for hard coking contracts. In the longer term, reaching a low of $110 per tonne quarter of 2015, $58.45 per tonne coal progressing from $165 per demand for raw materials is in May and averaging $126 per in the second quarter, $54.90 per tonne in the first quarter to $172 expected to continue to correlate tonne for the quarter. In the tonne in the third quarter and per tonne in the second quarter, closely with the steel market, with third quarter of 2013, iron ore $46.65 per tonne in the fourth then to $145 per tonne in the third prices fluctuating according to spot prices recovered, averaging quarter (CFR China, Platts index, quarter and $152 per tonne in the supply and demand dynamics. $132 per tonne for the quarter, 62% Fe). This downward trend fourth quarter. Since most of the minerals used in as a result of strong crude steel has been supported by continued the steel-making process are finite production rates in China and structural oversupply, resilience Due to the combined effects of resources, they may also rise in significant restocking at Chinese of high cost mines (in China and strong Australian coking coal response to any perceived scarcity steel mills through the end of seaborne), lower mining costs at production performance, the mild of remaining accessible supplies, August. Despite a strong seaborne major supply regions (supported wet season in Australia and weaker combined with the evolution of supply coming on-stream from the by currency depreciation, e. g. seaborne demand from China, the pipeline of new exploration third quarter of 2013 onwards, the in Australia and Brazil), lower the coking coal spot market and projects to replace depleted spot price remained above $130 fuel and freight costs as well as quarterly contracts settlements resources. per tonne. In the fourth quarter bearish sentiment about Chinese have been on a downward trend of 2013, the iron ore market steel demand. In this context in 2014 and 2015. Moreover, in The spot markets for iron ore stabilized within a range of $130 to of oversupply, the Samarco the same period there was an and coking coal have been in a $140 per tonne with no clear price tailings ponds dam collapsed in increase of seaborne supply downward price trend since the direction as the increasing supply November 2015 resulting in a halt from new regions, notably Russia first half of 2014. In 2015, this trend availability was matched with of operations (a 30 million tonne and Mozambique, as well as gained momentum with a slower a higher demand on the winter pellet capacity producer); however, productivity improvement and growth rate in China, recession in season restock. it did not affect the plummeting cost reductions at major producers developing economies such as iron ore price trend, which also supported by depreciated Brazil and Russia, and continued In the first half of 2014, iron ore continued decreasing through the local currencies and lower diesel robust seaborne supply from spot prices declined by 31% from end of 2015. prices. This downward trend major miners. Since the beginning $134.50 per tonne on January 1, prevailed despite some supply of 2014, the iron ore and coking 2014 to $93.25 per tonne on June closures, e.g. major seaborne coal prices decreased by 61% and 30, 2014. This downward price suppliers of coking coal from 37% respectively (Platts Q1-2014 trend was due mainly to increasing Australia, the United States, and 8 Management report

Canada announced the closure of supply disruptions. Additionally, the lead but with a continuous to same period in 2014. This their least cost efficient mines in ArcelorMittal further diversified downtrend to 15.5MT in 2014 as was mainly a consequence of order to adjust to weaker seaborne its coking coal supply portfolio compared to 18.5MT in 2013 as a Turkey’s capacity to source iron demand and to remain cost by adding new sources from result of better economic activity, ore based materials which drove competitive. These supply closures emerging mines, e.g. from which is to say, strong demand, scrap prices down. Turkish billets seem to be more than offset by Mozambique and Russia. plus a favorable €/$ exchange rate imports from China increased 1.33 lower Chinese imports, throughout discouraging traditional exports to million tonnes. Turkey remains 2014-2015. Chinese coking coal Scrap Turkey. the main scrap buying country imports continued their decline in the international market and (a decrease of 21% year-on-year Scrap prices decreased throughout In Europe, after some volatility in approximately 65% of its steel in 2014 and a decrease of 21% 2014. In Europe, the average the first quarter of 2014 (average production is based on the EAF for January to November 2015 vs. price of scrap in 2014 was €262 price of €269 per tonne) the process. Turkey’s crude steel January to November 2014, Tex per tonne (Eurofer Index for Eurofer E3 index remained very production decreased by 8% in Report January 5, 2016), while Demolition Scrap), which was stable in the second and third the first 11 months of 2015 as an increased share of imports 6.1% lower than in 2013 when quarters, around €270 per tonne. compared to the first 11 months of from Australia at the expense of the average price was €279.10 However, there was a decrease 2014, with a decrease of 14.6% in other seaborne suppliers, mainly per tonne. The published value in the fourth quarter of 2014, to the EAF process and an increase of from the U.S. bearish market of the index on February 5, 2015 €243.67 per tonne on average 7.5% in the process. price forecasts, combined with was €239 per tonne. Similarly, in due to alternative sourcing from successive loss-making quarters NAFTA the average price of scrap Turkey. The lowest price was The high scrap prices have made partially originated from high debt in 2014 was $338.50 per tonne reached in November at €237 per the EAF process less profitable as service obligations (following past (HMS 1&2 FOB East Coast), which tonne. In NAFTA, the HMS 1&2 FOB compared to the iron ore based acquisitions), have forced several was 4.7% lower than in 2013 when index reacted consistently with processes. Production cuts in the U.S. coal producers, to file chapter the average price was $355.30 Europe, with prices in 2014 at $345 EAF base processes took place in 11 bankruptcy in 2015 in order per tonne. The published value per tonne in the first quarter, $355 2015 reducing scrap demand. to restructure their finances and of this Index on February 5, 2015 per tonne in the second quarter, operations. was $250.60 per tonne. During $357 per tonne in the third quarter Ferro alloys and base metals the course of 2014, scrap prices and a final decrease to $297.80 The first half of 2015 experienced decreased by 20.2% compared to per tonne in the fourth quarter. Ferro alloys4 sharp spot price and contract 2013 (from $393 to $313.50 per Beginning in the third quarter of reference price reductions, with tonne: MB HMS 1&2 80:20 CFR 2014, the U.S. dollar strengthened The underlying price driver for a widening gap in the second Turkey, North European origin). significantly against the euro, manganese alloys is the price of quarter between both references The published value of this Index which improved the attractiveness manganese ore which was at the (spot indexes and quarterly on February 5, 2015 was $242.20 of scrap exports from the eurozone level of $3.11 per dry metric tonne contract settlement), as quarterly per tonne. In 2014 as compared region relative to NAFTA. unit (“dmtu”) (for 44% lump ore) on contract references settled at to 2013, the drop in the Metal Cost, Insurance and Freight (“CIF”) $117 per tonne (FOB Australia) Bulletin Index HMS 1&2 80:20 CFR Scrap prices decreased throughout China for 2015, representing a and $109.50 per tonne for the Turkey, North European origin was 2015. In Europe, the average decrease of 31.80% from $4.56 per first and second quarters of 5.5% on average, consistent with price of scrap in 2015 was €208.9 dmtu in 2014 ($5.33 per dmtu for 2015, respectively. Spot prices the 6.1% in local European Eurofer per tonne (Eurofer Index for 2013) mainly due to poor demand for such quarters averaged $104 E3 prices. Demolition Scrap), which was and oversupply of manganese ore per tonne and $87 per tonne, 20.3% lower than in 2014. In in 2015. respectively. In the third quarter Scrap imports towards Turkey NAFTA, the average price of scrap of 2015, premium coking coal remained constant with a decrease in 2015 was $218 per tonne (HMS The 2015 prices of high carbon spot prices reached a low of $79 of 0.28% in 2014 as compared to 1 Domestic MidWest), which was ferro manganese decreased per tonne (FOB Australia) while 2013. This was, to some extent, a 40% lower than in 2014 when compared to the prior year by contract settlement for the same consequence of Turkey’s capacity the average price was $364 per 15.8% from $1,119 to $942 per quarter was at $93 per tonne (FOB to source iron ore based materials tonne. Comparing 2015 to 2014, tonne. Prices of silicon manganese Australia). Contract settlement in order to control scrap prices. average international scrap prices decreased compared to the prior further reduced in the fourth Imports of billets were sourced decreased by 33.5% from $352 year by 17.43% from $1,222 quarter of 2015, where contract from CIS beginning in the second to $234 per tonne (MB HMS 1&2 to $1,009 per tonne ($1,174 prices settled at $89 per tonne half of 2014. The second and third 80:20 CFR Turkey, North European per tonne for 2013). Prices for (FOB Australia), while spot prices importers are South Korea (< 1/3 origin). Similarly for NAFTA, the medium carbon ferro manganese were trading in the range of $72- the amount Turkey imports) and average price of scrap in 2015 was decreased in 2015 compared to 77 per tonne (December 1 through Italy. China takes 10th place and $224.4 per tonne (HMS 1&2 FOB the prior year by 13.11% from 31, 2015, FOB Australia HCC Peak decreased its imports of scrap by East Coast) which was 33.7% lower $1,686 to $1,465 per tonne ($1,644 Downs Platts index). 41.4% in 2014 as compared to than in 2014 when the average per tonne for 2013). 2013, mainly due to preference price was $338.5 per tonne. ArcelorMittal has continued to for iron ore in this context, plus leverage its full supply chain the use of internal scrap (no Turkish scrap import volumes were and diversified supply portfolio exports recorded in 2013 or 2014). 14.5 million tonnes in the first 11 in terms of the origin of sources Regarding exports of scrap, the months of 2015, representing 4 Prices for high grade manganese ore are typically quoted for ore with 44% to mitigate risks of regional United States continued to take a decrease of 18.4% compared manganese content. Management report 9

Base metals5 Energy market on capacity markets. On the CO2 to Europe (compounded by the markets where the market stability fact that Japanese Base metals used by ArcelorMittal Electricity reserve is intended to rebalance plants have slowly initiated the are zinc, tin and aluminum the existing long term market, the ramp-up in generating power). for coating, aluminum for In most of the countries where results of the COP 21 meeting in The expected high number of deoxidization of liquid steel and ArcelorMittal operates, electricity December 2015 did not succeed LNG shipments in Europe has nickel for producing stainless prices have moved in line with in boosting prices, and was in fact pushed the whole forward curve or special steels. ArcelorMittal other commodities. In North followed by a price decrease from down and has fully erased the partially hedges its exposure to its America, the continuous pressure €8.5/MWh to below €6.5/MWh bullish market effect of the lack base metal inputs in accordance on oil brought the natural gas (~25% reduction). of flexibility that was lost in with its risk management policies. price down approximately 15% 2015 when the production of The average price of zinc for while forward prices in the PJM Natural gas Groningen, a giant natural gas 2015 was $1,928 per tonne, electricity market for the calendar field located in the , representing a decrease of 11% year 2016 have seen a reduction Natural gas is priced regionally. was reduced due to repeated as compared to the 2014 average of approximately 9% (from European prices were historically earthquakes. of $2,164 per tonne (the 2013 $44/MWh down to $40/MWh) linked with petroleum prices average was $1,909 per tonne). compared to November 2015. The but continuous spot market Increasing supply (due to, among The low for 2015 was $1,461 per mild winter, strong pipeline flows development and increasing other things, North America shale tonne on December 17, 2015 and from Russia/Norway to Europe liquidity are now prevailing in oil and a lack of OPEC discipline) high was $2,405 per tonne on and comfortable storage capacity almost all countries except in and lower demand than expected May 6, 2015. The global zinc metal has decreased the premium built poorly integrated markets (e.g., (due to, among other things, a market was in a surplus of 213,000 into electricity prices. Brent oil Spain, ) or markets in decrease in the Chinese economy) tonnes in the first 10 months of prices are currently in the range of transition from a tariff based pushed oil prices down, which 2015 (production vs. usage). Stocks $30/bbl to $35/bbl ($36.70/bbl at system (e.g., Poland). With resulted in: i) Asian oil indexed registered at the Metal the end of December 2015) and increasing liquid natural gas LNG prices (JKM) dropping (from Exchange (“LME”) warehouses the general commodity bearish (“LNG”) flows in Spain, definitive $18 down to $7.50/MM British stood at 464,400 tonnes as of mood brought the electricity movement towards a more liquid thermal unit (“BTU”) during 2015 December 31, 2015, representing price below €30/MWh at the end and integrated market could be and down to $6/MMbtu for spot a decrease of 33% compared to of 2015 in most of the western experienced by 2017. LNG cargos mid-January 2015), December 31, 2014 when stocks countries, representing a drop closing the arbitrage window registered stood at 691,600 tonnes between €5~8/MWh or a ~20% This trend is reducing the between Europe and Asia (no (933,475 tonnes in 2013), reflecting price reduction since November correlation and sensibility of the strong window is expected in the the change in LME warehousing 2015. Prices continued to decline Western European market to oil medium term), and ii) European rules in response to a surfeit in in January 2016. price volatility. As an example, LNG no longer being re-routed to stocks and decreased contango. the gas auction of Gazprom Asia, resulting in increased supply Overall production capacity in in September 2015 was based in a continuously depressed The average price of tin for Europe is comfortable in the short on market prices and not oil market and pushing gas prices 2015 was $16,070 per tonne, term but increasing environmental indexation, as market prices were down year-on-year from $10.50/ representing an decrease of 27% constraints and low market prices considered better indicators. North MMBtu in 2013 and $7.8/MMBtu compared to the 2014 average are pushing utilities to close recent American natural gas prices trade in 2014 to $6/MMbtu in 2015, with of $21,893 per tonne (the 2013 gas plants and the oldest coal independently of oil prices and are downward pressure continuing average was $22,304). power plants. The electricity price set by spot and future contracts, in 2016. Prices are expected to be crash that occurred at the end of traded on the NYMEX exchange around $4/MMBtu for February The average price of aluminum 2015 and beginning of January or over-the-counter. Elsewhere, 2016 onwards. for 2015 was $1,661 per tonne, 2016 may accelerate decisions for prices are set on an oil derivative or representing an decrease of 11% mothballing unprofitable units. bilateral basis, depending on local The premium related to the compared to the 2014 average This market price driven cut is market conditions. International risk of gas flow disruption of $1,867 per tonne (the 2013 inconsistent with the need of oil prices are dominated by global between Ukraine and Russia has average was $1,845). more flexible power generation supply and demand conditions disappeared with the agreement required to cope with increasingly and are also influenced by between Russia and Ukraine The average price of nickel for intermittent renewables capacity geopolitical factors. already on the table. In addition, 2015 was $11,834 per tonne, and is therefore fueling “capacity Ukraine launched a successful representing an decrease of 30% market” debates and other In 2015 and 2014, the LNG tender to buy natural gas from compared to the 2014 average market mechanisms that could be market continued to grow in Asia, a national joint-stock company of $16,867 per tonne (the 2013 needed to guarantee the required although at a slower pace than in Naftogaz Ukrainy in Europe on average was $15,003). investments ensuring security of 2013. Excess supply is developing the western border of Ukraine supply. in that market as new liquefaction using the three-year revolving capacities are coming on stream loan of $300 million issued by the In the absence of increasing or ramping up from Australia, European Bank for reconstruction demand, the only positive signal Papuasia and Malaysia. This and development. in the short term, apart from increase is not being absorbed due 5 Prices included in this section are strong climate deviations, would to the economic slowdown and In 2015 in the United States, based on the London Metal Exchange (LME) cash price. likely be from policy decisions is allowing for higher shipments unconventional gas production 10 Management report

proved more than robust as much growth and especially at 1.09 against the U.S. dollar. The despite low oil prices and the as congestion eased, the result The BDI averaged 718 points Chinese slowdown hit commodity continuous drop in gas market was improved vessel turnaround in 2015, representing a 35% prices and commodity exporters prices. A record buildup of gas in and increased efficiency in ports. decrease compared 2014. The by extension, contributing to a storage has materialized during Rates were expected to recover Capesize sector averaged $8,127 move of the Canadian dollar and the 2015/2016 winter with a in the second half of 2014 as per day in 2015 ($14,842 per day the Mexican peso in 2015 from surplus of approximately 15% a result of increased Brazilian in 2014 based on revised BDI 1.16 to 1.38 and from 14.80 to compared to the 5 year average shipments, however, the recovery methodology). The Panamax 17.20, respectively, against the (decreasing the risk premium for never materialized and Chinese sector averaged $5,561 per day in U.S. dollar. The situation in Brazil, winter months). The situation demand waned. As a result, rates 2015 ($7,718 per day in 2014). which entered into recession may change due to the pressure primarily remained at low levels and witnessed unprecedented on gas and oil prices that will put throughout the second half of Impact of Exchange Rate corruption scandals, and Russia, pressure on some production 2014, with only small periods of Movements where geopolitical issues persisted, areas in 2016. As a result, steam temporary strength. The Baltic only further deteriorated by the coal continues to be challenged Dry Index (“BDI”) averaged After having reached a yearly low fall of commodities: during the as a fuel to produce power. Gas 1,105 points, an 8% decrease during the first half of 2013 against year the Brazilian real went from power plants are taking the lead as compared to 2013. Chinese most currencies in the jurisdictions 2.55 to 4.25 and the Russian ruble and increasing their market share demand for both iron ore and coal where ArcelorMittal operates, from 58.05 to 73.05 against the U.S. in the production mix which could was weaker than expected and the U.S. dollar strengthened dollar. In August 2015, Kazakhstan trigger volatility in the summer even government measures did significantly during the second switched to a free float and period if there are heat waves. not allow sustained recovery in part of 2013. allowed its currency to devalue Projects to build liquefaction 2014. Although Australian exports 86% from 183 to 341 against the facilities for export to Europe or did well in the first half of 2014, During 2014, mainly two U.S. dollar in order to keep its Asia continue to be developed, they suffered in the second half different periods and market market share vis-à-vis Russia, its with production expected to of the year as a direct result of the conditions were seen. Aside from main business partner. Currency start in early 2016 and potentially slowdown in Chinese demand. the Ukrainian Hryvnia and the developments have been similar in pushing U.S. gas prices up to keep Meanwhile, bunker fuel prices fell Kazakhstani tenge devaluations South Africa where a combination up with the new export demand. in 2014, especially in the second against the U.S. dollar, in the of weak commodity prices and In this context, natural gas prices half of the year and this aided in beginning of 2014, there was a tense political circumstances in North American markets keeping freight rates low. Capesize low volatility period where the €/$ pushed the South African rand continued to increase from 2012 rates averaged at $13,800 per day exchange rate remained within the against the U.S. dollar to 15.55 at lows, averaging in 2014 at around ($14,842 per day in 2014 based range of 1.35 - 1.40 and emerging the end of 2015 from 11.60 at the $4.20 per MMBtu, up from $3.70 on revised BDI methodology), countries started their recovery beginning of the year. per MMBtu in 2013. Since the a 5% decrease as compared to with evidence of adjustments. end of the 2014-2015winter, gas 2013. The smaller vessels saw less However, at the end of the second Because a substantial portion prices have been dropping. With significant growth as the sector quarter of 2014, geopolitical of ArcelorMittal’s assets, storage recovery and high market faced some resistance as a result conflicts, monetary policy liabilities, sales and earnings confidence in the ability to meet of the Indonesian ban on bauxite divergence, very low oil prices as are denominated in currencies demand, prices began to decrease and nickel ore exports, delayed well as strong demand for the U.S. other than the U.S. dollar (its in the fourth quarter of 2014 to $3/ South American grain exports dollar started to have a negative reporting currency), ArcelorMittal MMBtu and continued to decline and a weaker coal trade. Panamax impact on a number of currencies, has exposure to fluctuations in in 2015, with prices below $2.5/ rates averaged at $7,718 per day especially in jurisdictions where the values of these currencies MMBtu for 2016. LNG exports and in 2014, a 19% decrease compared ArcelorMittal operates. relative to the U.S. dollar. These an increase of Mexico’s cross- to 2013. currency fluctuations, especially border infrastructure could play a In 2015, the currency landscape the fluctuation of the U.S. dollar role in increasing the gas price for Ocean freight market rates for was reshaped. Supported by a relative to the euro, as well as 2016 onwards. dry cargo remained low for the robust labor market and resilient fluctuations in the currencies majority of 2015, primarily due to growth figures, the strength of of the other countries in which Ocean freight6 a fall in coal and iron ore imports the U.S. dollar was confirmed in ArcelorMittal has significant and the fall in oil prices. Chinese December 2015 by the first rate operations and sales, can have a The shipping market generally coal imports fell 30% year-on-year increase by the Federal Reserve material impact on its results of exceeded expectations in the first while average fuel price (reference after a seven year period of a “zero operations. In order to minimize its half of 2014, in a period which is price recorded for Rotterdam, interest rate policy.” The situation currency exposure, ArcelorMittal usually known to endure seasonal Netherlands) decreased 51% in in the U.S. contrasted strongly with enters into hedging transactions to restrictions, due to strength seen 2015 ($260 per million tonne) the eurozone, where the European lock-in a set exchange rate, as per in Australian exports. Total iron ore compared to 2014 ($531 per Central Bank’s (the “ECB”) its risk management policies. imports by China were up 19% million tonne). There has been a quantitative easing program year on year, as iron ore prices flood of new build deliveries, but increased in intensity throughout dropped. However, coal and other at the same time bulker demolition the year. This, alongside sectors such as grain did not see has also surged which has helped disappointing data on production to curb a small portion of the activity and inflation, put pressure 6 Sources: Baltic Daily Index, Clarksons oversupply and thereby slow on the euro, which started the Shipping Intelligence Network, LBH, Fearnleys, RS Platou. expected net fleet growth. year at 1.21 and ended the year Management report 11

Trade and Import Competition while 25% were shipped from the from 40.2 million tonnes (+37.9% facilitate acquisition financing for Commonwealth of Independent year-on-year) in 2014. Almost three firms in sectors like steel. Europe7 States (CIS). This rapid increase in quarters of US imports originate shipments from China meant the from other NAFTA countries Going forward, any further Import competition in the EU28 share of Chinese origin imports (Canada and Mexico), developed consolidation should foster steel market peaked in 2007 into Europe has risen from 20% Asia, Brazil and EU28 and they the ability of the steel industry – when demand was above in 2012 to an estimated 27% have maintained a steady share of to maintain more consistent productive capacity - with import in 2015. The CIS remains the imports even though volumes have performance through industry penetration of 18.6% before largest exporter to Europe with trended upwards. Of the remaining cycles by achieving greater fluctuating down to 12.0% by an estimated 29% share in 2015 countries, only Turkey has increased efficiencies and economies of 2012, due to recovering global though the share has declined its share from 4% to 8 % in 2015 scale, and should lead to improved demand post the 2008/09 global marginally from 31% in 2012. while China’s share of US imports bargaining power relative to recession. Other traditional importers into has remained steady at around customers and, crucially, suppliers, Europe such as developed Asia just 5% to 6% of total volumes. which tend to have higher levels of Imports penetration into Europe and Turkey have seen their market However, trade measures against consolidation. Given the difficult has continued to trend upwards share squeezed by the growing Russia have seen the CIS share drop iron ore price environment, it is since 2012 as global steel markets influence of China and to a lesser from 11% in 2014 to 6% in 2015. quite possible that consolidation started to slow down and the extent the CIS. in this part of the value chain effects of excess Chinese steel Consolidation in the steel and may occur in the future. The last capacity became more apparent. United States8 mining industries evidence of major consolidation In 2013, despite a slight decline among mining companies was in steel demand, imports rose, Steel import penetration peaked in Given the current economic the completion of the merger particularly from China, Russia 2015 at 29.3% but both apparent uncertainties in the developed between Xstrata and Glencore on and Turkey, to total approximately consumption and finished economies, combined with a May 2, 2013. 18.4 million tonnes, and the imports declined by 9.5% and slowdown in emerging markets, penetration ratio increased to 6.9% respectively as 2014 import consolidation transactions Key indicators 13.1%. volumes remained the highest on decreased significantly in terms of record since 2006. number and value in the past three The following discussion and During 2014, finished steel imports years and this trend is expected analysis should be read in increased by 19.9% year-on-year Imports rose significantly in 2014, to continue in 2016, unless and conjunction with ArcelorMittal’s to around 22.0 million tonnes with up 35.9% year-on-year to 30.6 until prices stabilize and supply consolidated financial statements growth mainly from shipments million tonnes, compared to a and demand balance out in the included in this annual report. originating from CIS and China. 3.9% decline in 2013. In the same context of worldwide structural Though finished steel demand also year, penetration increased to overcapacity. ArcelorMittal reports its operations strengthened, growth was slower 28.4% from 23.2% in 2013 despite in five reportable segments: than imports at approximately an 11.8% increase in apparent steel While developed markets NAFTA, Brazil, Europe, ACIS and 5% year-on-year. As a result, the demand as overall steel imports continued to present fewer Mining. The key performance import penetration rate for 2014 were up 37.9%, buoyed by a strong opportunities for consolidation, indicators that ArcelorMittal’s rose to 15.1%. rise in semis volumes, up 44.6% steel industry consolidation also management uses to analyze year-on-year. began to slow down substantially operations are sales, average steel In 2015, strengthening industrial in China in 2012 and continued selling prices, steel shipments, activity in Europe led to a 2% Despite the decline in imports in through 2015. Despite being a key iron ore and coal production and rise in underlying steel demand. 2015, volumes actually remained initiative of the five-year plan issued operating income. Management’s However, the slowdown in global relatively elevated compared to in March 2011, the concentration analysis of liquidity and capital steel consumption coupled historical levels, particularly for flat process of the steel industry was resources is driven by operating with excess capacity in China and long products. In fact, long expected to reduce overcapacity, cash flows. resulted in increased shipments product imports increased by rationalize steel production to Europe as domestic prices around 4% in 2015 (+23% in 2014) based on obsolete technology, remained relatively attractive. while flat products declined by just improve energy efficiency, achieve Third country imports into Europe 6.4% (+60% in 2014). Semis and environmental targets and have increased by approximately tubes both declined significantly strengthen the bargaining position 22% last year, much faster than in 2015 to levels consistent with of Chinese steel companies in price apparent consumption growth, historical averages. As a result, negotiations for iron ore which has leading to the penetration ratio to total finished steel imports not been very effective. In 2015, pick-up to 17.5% in 2015. Between dropped by just 6.9% to 28.5 China dropped its target objective 2012 and 2015, finished steel million tonnes in 2015 following a for the top ten Chinese steel imports are estimated to have 35.9% rise to 30.6 million tonnes producers to account for 60% of increased by approximately 10 in 2014 while overall steel imports national production and for at least million tonnes, of this incremental were down to 35.3 million tonnes two producers to reach 100 million volume 40% originated from China (down 12.3% year-on-year) in 2015 tonne capacity in the next few 8 Source: U.S. Department of years. A new industry consolidation 7 Source: Eurostat trade data to Commerce, customs census data up plan published by China aims to November 2015, estimates for to November 2015 and estimates for December 2015. December 2015. simplify approval procedures and 12 Management report

Years ended December 31, 2015, 2014 and 2013

Sales, operating income, crude steel production, steel shipments, average steel selling prices and mining production

The following tables provide a summary of ArcelorMittal’s performance by reportable segment for the year ended December 31, 2015, 2014 and 2013:

Sales for the year ended December 31,1 Operating income for the year ended December 31,2 2015 2014 2013 2015 2014 2013 Segment (in $ millions) (in $ millions) (in $ millions) (in $ millions) (in $ millions) (in $ millions) NAFTA 17,293 21,162 19,645 (705) 386 630 Brazil 8,503 10,037 10,148 628 1,388 1,204 Europe 31,893 39,552 40,507 171 737 (985) ACIS 6,128 8,268 8,419 (624) 95 (457) Mining 3,387 4,970 5,766 (3,522) 565 1,176 Others and eliminations (3,626) (4,707) (5,045) (109) (137) (371) Total 63,578 79,282 79,440 (4,161) 3,034 1,197 1 Amounts are prior to inter-segment eliminations (except for total) and sales include non-steel sales. 2 Other and eliminations to segment operating income reflects certain adjustments made to operating income of the segments to reflect corporate costs, income from non-steel operations (e.g. energy, logistics and shipping services) and the elimination of stock margins between segments. See table below.

Adjustments to segment operating income and other Year ended December 31, 2015 2014 2013 (in $ millions) (in $ millions) (in $ millions) Corporate and shared services 1 (10) (132) (207) Financial activities (20) (16) (12) Shipping and logistics (84) (30) (29) Intragroup stock margin eliminations 2 31 109 (73) Depreciation and impairment (26) (68) (50) Total adjustments to segment operating income and other (109) (137) (371) 1 Includes primarily staff and other holding costs and results from shared service activities. In 2015, Corporate and shared services includes the sale of corporate assets. 2 In 2015 and 2014, as compared to 2013, margins decreased as a result of low iron ore prices leading to a reduction in intragroup-margin eliminations. Management report 13

Sales Cost of sales Operating income or loss due to inventory related losses of $1.3 billion following the ArcelorMittal had sales of Cost of sales consists primarily ArcelorMittal’s operating loss for rapid decline of international $63.6 billion for the year ended of purchases of raw materials the year ended December 31, 2015 steel prices and litigation costs December 31, 2015, representing necessary for steel-making (iron was $4.2 billion as compared with of $0.1 billion in South Africa. a 19.8% decrease from sales of ore, coke and coking coal, scrap operating income of $3.0 billion See note 5 to the consolidated $79.3 billion for the year ended and alloys), electricity, repair and for the year ended December 31, financial statements for the critical December 31, 2014, primarily maintenance costs, as well as 2014. Operating loss in 2015 was accounting policies and uses of due to lower average steel selling direct labor costs, depreciation negatively affected by impairment judgments and estimates related prices which were down 19.7%, and impairment. Cost of sales charges of $4.8 billion including to the impairment of tangible lower seaborne iron ore reference for the year ended December $0.9 billion with respect to the and intangible assets, including prices which were down 43% 31, 2015 was $65.2 billion as Mining segment goodwill and goodwill. and lower steel shipments which compared to $73.3 billion for $3.9 billion related to tangible and decreased by 0.6%, partially offset the year ended December 31, intangible assets, of which $2.5 Operating income was $1.2 billion by higher market priced iron ore 2014. Cost of sales for the year billion was in respect of iron ore for the first nine months of 2015 shipments which were up by 1.4%. ended December 31, 2015 was mining operations at ArcelorMittal as compared to $2.5 billion for In the first half of 2015, sales of negatively affected by an increase Liberia ($1.4 billion), Las Truchas in the same period in 2014, while $34.0 billion represented a 16.1% in impairment on tangible and Mexico ($0.2 billion), ArcelorMittal the operating loss in the fourth decrease from sales of $40.5 billion intangible assets for $4.8 billion Serra Azul in Brazil ($0.2 billion) quarter of 2015 was $5.3 billion as in the first half of 2014, primarily partially offset by a decrease in and coal mining operations at compared to operating income due to 18% lower average steel depreciation and foreign exchange ArcelorMittal Princeton in the of $0.6 billion for the same period selling prices and 46% lower impacts due to the appreciation United States ($0.7 billion) mainly in 2014. The fourth quarter of seaborne iron ore prices, partially of the U.S. dollar against the due to a downward revision of 2015 was impacted by all of offset by a 3% increase in steel major currencies. Selling, general cash flow projections relating the impairments and charges shipments and a 2% increase in and administrative expenses to the expected persistence of mentioned above and $0.8 billion marketable iron ore shipments. In (“SG&A”) were $2.5 billion for the a lower iron ore and coking coal of inventory related losses (with the second half of 2015, sales of year ended December 31, 2015 price outlook. Management $0.5 billion of inventory related $29.6 billion represented a 24.0% compared to $3.0 billion for the performed its quarterly analysis losses being recorded in the third decrease as compared to sales of year ended December 31, 2014. of impairment indicators in the quarter of 2015). $38.8 billion in the second half of SG&A increased as a percentage context of high volatility in the 2014, primarily driven by a drop of sales to 4.0% of sales for the raw material prices during 2015 ArcelorMittal’s operating income in average steel prices of 21.6% year ended December 31, 2015 and concluded that impairment for the year ended December 31, and a decrease of 4.4% in steel as compared to 3.7% for 2014 as indicators existed in the fourth 2014 was $3.0 billion, as compared shipments. described below. quarter of 2015 as a result of the with an operating income of expected persistence of lower $1.2 billion for the year ended ArcelorMittal had sales of Cost of sales for the year ended long term prices and strategic December 31, 2013. Operating $79.3 billion for the year ended December 31, 2014 was $73.3 decisions. ArcelorMittal also income in 2014 was negatively December 31, 2014, representing billion as compared to $75.2 billion recorded impairment charges impacted by a $90 million charge a marginal decrease from sales of for the year ended December 31, of $0.3 billion, $0.3 billion and following the settlement of $79.4 billion for the year ended 2013. Cost of sales for the year $0.2 billion with respect to the antitrust litigation in the United December 31, 2013, primarily ended December 31, 2014 was Saldanha plant in ArcelorMittal States and a $76 million charge for due to lower average steel selling positively affected by a decrease South Africa (ACIS) as a result onerous supply contract provisions prices (which were down 3%) in depreciation following a change of its revised competitive primarily for tin coated products and lower seaborne iron ore in the useful lives of certain outlook, Indiana Harbor East at Weirton in the United States reference prices (which were property plant and equipment as and West in the United States (NAFTA) offset in part by a $79 down 28.4%) despite higher steel described earlier and a decline in (NAFTA) in connection with the million gain on the disposal of shipments (which were up 3%) raw material prices. Cost of sales deployment of asset optimization the Kuzbass coal mines (Mining). and marketable iron ore shipments for the year ended December programs and the currently Operating income for the year (which were up 13.2%). In the 31, 2013 was negatively affected idled ArcelorMittal Point Lisas ended December 31, 2014 was first half of 2014, sales of $40.5 by impairment losses of $0.4 facility in Trinidad and Tobago positively affected by a decrease billion represented a 1.5% increase billion and restructuring charges (Brazil segment), respectively. In in depreciation (from $4.7 billion from sales of $39.9 billion in the for $0.6 billion. SG&A remained addition, the Company recorded for the year ended December 31, first half of 2013, primarily due to stable at $3.0 billion for the year impairment charges of $0.2 billion 2013 to $3.9 billion for the year an increase in steel shipments, ended December 31, 2014 and with respect to the intended sale ended December 31, 2014) as a partially offset by a decrease in 2013. SG&A remained relatively of the Long Carbon facilities in result of a change in useful lives average steel selling prices. In the stable compared to sales as it the United States ( ArcelorMittal of plant and equipment. The second half of 2014, sales of $38.8 represented 3.7% of sales for the La Place, Steelton and Vinton) Company performed a review billion represented a marginal year ended December 31, 2014 and $0.4 billion primarily in of the useful lives of its assets decrease from sales of $39.5 billion as compared to 3.8% for the year connection with the idling for an and determined its maintenance in the second half of 2013 primarily ended December 31, 2013. indefinite time of the ArcelorMittal and operating practices enabled driven by a drop in average steel Sestao plant in Spain (Europe a change in the useful lives of prices of 4%, partially offset by an segment). Operating loss in 2015 plant and equipment. As a result, increase in steel shipments of 4%. also included negative impacts certain of the Company’s existing 14 Management report

assets have been and will be used and restructuring charges of $0.7 impairment charge of $41 million ended December 31, 2014. Steel longer than previously anticipated billion. with respect to the subsidiaries shipments increased 3% in the and therefore, the estimated Operating income for the year included in this transaction. first half of 2015 as compared to useful lives of certain plant and ended December 31, 2013 the first half of 2014, but then equipment were lengthened included impairment losses of Operating income for the year decreased 4.4% in the second half prospectively. In addition, $444 million. These impairment ended December 31, 2013 was of 2015 as compared to the second operating income for the year losses included a charge of $181 positively affected by a non-cash half of 2014, primarily due to lower ended December 31, 2014 was million related to the Thabazimbi gain of $92 million corresponding volumes in NAFTA. negatively affected by impairment mine in ArcelorMittal South Africa to the final recycling of income charges of $264 million, of which (ACIS) following the transfer of relating to unwinding of hedges Average steel selling price $114 million primarily related to the future operating and financial on raw material purchases decreased by 19.7% for the year the idling of the steel shop and risks of the asset to Kumba as (Europe) and a $47 million fair ended December 31, 2015 as rolling facilities of the Indiana a result of the iron ore supply valuation gain relating to DJ compared to the year ended Harbor Long carbon operations agreement signed with Sishen on Galvanizing in Canada (NAFTA), December 31, 2014. Average steel in the United States (NAFTA), $63 November 5, 2013. ArcelorMittal a joint operation in which the selling price in the first half of 2015 million relating to the impairment also recognized impairment Company acquired the remaining decreased by 18% as compared to of the Volcan iron ore mine in charges of $101 million and $61 50% interest held by the other the first half of 2014 and decreased Mexico (Mining) due to a short million for the costs associated joint operator. Operating income by 21.6% in the second half of residual life of the mine and $57 with the discontinued iron ore for the year ended December 31, 2015 as compared to the second million related to the idling of projects in and Mauritania 2013 was negatively affected by half of 2014. mill C in Rodange, Luxembourg (Mining), respectively. The restructuring charges totaling (Europe segment). Company recorded an impairment $552 million primarily related to ArcelorMittal had steel shipments loss of $55 million in connection costs incurred for the long-term of 85.1 million tonnes for the Operating income was $2.5 with the long-term idling of the idling of the Florange liquid year ended December 31, 2014, billion for the first nine months ArcelorMittal Tallinn galvanizing phase in ArcelorMittal Atlantique representing an increase of 3% of 2014, which was a 108% line in Estonia (Europe segment) et Lorraine (including voluntary from steel shipments of 82.6 increase from $1.2 billion for and reversed an impairment loss separation scheme costs, site million tonnes for the year ended the first nine months of 2013, of $52 million at the Liège site of rehabilitation and safeguarding December 31, 2013. while the operating income in ArcelorMittal (Europe costs and take or pay obligations) the fourth quarter of 2014 was segment) following the restart of and to social and environmental Average steel selling price for the $569 million and represented a the hot dip galvanizing line HDG5. costs as a result of the agreed year ended December 31, 2014 significant improvement over ArcelorMittal also recognized an industrial and social plan for the decreased 3% compared to the the operating loss recorded in impairment charge of $24 million finishing facilities at the Liège site year ended December 31, 2013, the fourth quarter of 2013 for relating to the closure of the of ArcelorMittal Belgium. following weakness in raw material $36 million. The fourth quarter of organic coating and tin plate lines prices. Average steel selling price 2014 was impacted by all of the at the Florange site of ArcelorMittal Shipments and average steel in the first half of 2014 decreased gains and charges mentioned Atlantique et Lorraine in France selling price by 2% from the same period in above except for the $90 million (Europe segment). Additionally, 2013, while average steel selling charge following the settlement in connection with the agreed ArcelorMittal had steel shipments price in the second half of the of antitrust litigation in the United sale of certain steel cord assets of 84.6 million tonnes for the year was down 4% from the same States which was recognized in the in the United States, Europe and year ended December 31, period in 2013. second quarter of 2014. The fourth Asia (Europe segment) to the 2015, decreased by 0.6% as quarter of 2013 was negatively joint venture partner Kiswire compared to steel shipments of affected by impairment losses Ltd., ArcelorMittal recorded an 85.1 million tonnes for the year

NAFTA Performance for the year ended December 31, (in millions of USD unless otherwise shown) 2015 2014 2013 Sales 17,293 21,162 19,645 Depreciation 616 706 767 Impairments 526 114 - Operating income / (loss) (705) 386 630

Crude steel production (thousand tonnes) 22,795 25,036 24,914 Steel shipments (thousand tonnes) 21,306 23,074 22,500

Average steel selling price (USD/tonne) 732 843 829 Management report 15

Sales million with respect to the Indiana impairment charges of $114 million Georgetown and Indiana Harbor Harbor East and West facilities in the United States primarily Bar in the first half of 2015. Sales in the NAFTA segment were (United States) in connection related to the idling of the steel $17.3 billion for the year ended with deployment of the asset shop and rolling facilities of Indiana Total steel shipments were 23.1 December 31, 2015, representing optimization programs. It was also Harbor Long carbon operations. million tonnes for the year ended a decrease of 18.3% as compared negatively affected by inventory December 31, 2014, representing to December 31, 2014. Sales related losses amounting to $0.5 Operating income for the year a 3% increase compared to the decreased primarily as a result billion following the rapid decline ended December 31, 2013 was year ended December 31, 2013. of the decrease in average steel of steel prices. Operating loss for negatively affected by lower Shipments were 11.4 million selling prices by 13.2% and a the segment amounted to $52 shipments in the first half of the tonnes in the first half of 2014, up decrease in steel shipments by million for the six months ended year following labor issues at 4% from the same period in 2013, 7.7%, both of which were primarily June 30, 2015 as compared with Burns Harbor and operational while shipments in the second driven by lower domestic prices operating income of $77 million for incidents at Indiana Harbor East half of the year were 11.7 million impacted by weak demand and the same period of 2014. Operating and West during the second tonnes, up 1.5% from the same import pressures. Sales in the first loss for the first half of 2015 was quarter. Operating income was period in 2013. Steel shipments half of 2015 were $9.3 billion, a negatively affected by a $69 million positively affected by a $47 million for the first half of 2013 were 10% decrease as compared to the provision for inventory related fair valuation gain relating to DJ negatively affected by labor issues same period in 2014, mainly due losses in the US and an impairment Galvanizing in Canada, a joint at Burns Harbor and operational to a 10% decrease in average steel of $19 million relating to the operation in which the Company incidents at Indiana Harbor East selling prices and a 3% decrease in closure of the Georgetown facility acquired the remaining 50% and West, for which reductions in steel shipments. In the second half in the U.S. as well as lower volumes interest held by the other joint inventory and supplies from other of the year, sales were $8.0 billion, and lower average selling prices as operator, lower average steel NAFTA units partially mitigated a decrease of 26.3% compared to compared to the same period of selling prices in the third quarter the market impact. The increase in the same period in 2014, primarily 2014. Operating loss for the second of 2013 and positively affected by the second half of 2014 reflected driven by a 16.3% decrease in half of 2015 was $653 million 5% higher volumes in the second improved demand. average steel selling prices and which was negatively affected by half of the year compared to the 12.6% decrease in steel shipments. the impairments and inventory first half. Average steel selling price related losses described above as decreased 13.2% for the year Sales in the NAFTA segment were compared to operating income in Crude steel production, steel ended December 31, 2015 as $21.2 billion for the year ended the second half of 2014. Operating shipments and average steel compared to the year ended December 31, 2014 representing performance in the second half of selling price December 31, 2014. Average steel an increase of 8% as compared to 2015 was also affected by negative selling price in the first half of 2015 $19.6 billion for the year ended price-cost squeeze. Crude steel production in the decreased 10% from the same December 31, 2013. Sales increased NAFTA segment decreased 9% period in 2014 primarily due to primarily due to a 2% increase in Operating income for the NAFTA for the year ended December 31, lower domestic prices impacted average steel selling prices and a segment amounted to $386 million 2015 as compared to the year by falling raw material prices and 3% increase in steel shipments. for the year ended December ended December 31, 2014 to align import pressures. Average steel Sales in the first half of 2014 were 31, 2014, compared to operating with weaker demand. Crude steel selling price in the second half $10.4 billion, up 7% from the same income of $630 million for the production remained relatively flat of the year decreased by 16.3% period in 2013 primarily driven by year ended December 31, 2013. at 25 million tonnes for the year as compared to the same period a 4% increase in steel shipments Operating income for the segment ended December 31, 2014 and for in 2014, although average steel and 1% increase in average steel amounted to $309 million for the the year ended December 31, 2013. selling prices in the fourth quarter selling prices. In the second half of second half of the year, compared of 2015 decreased by 14.3% the year sales were $10.8 billion, up to $77 million in the first half. Total steel shipments decreased compared to the same period of 8% from the same period in 2013, Operating income in the first half 7.7% for the year ended December 2014. a 1.5% increase in shipments and a of 2014 was negatively affected by 31, 2015 as compared to the 2% increase in average steel selling a $90 million charge following the year ended December 31, 2014. Average steel selling price prices. settlement of antitrust litigation Shipments were 11.1 million increased 2% for the year ended in the United States and higher tonnes in the first half of 2015, December 31, 2014 as compared Operating income or loss input costs resulting from the a decrease of 3% from the same to the year ended December 31, severe winter weather conditions period in 2014, while shipments 2013. Average steel selling price in Operating loss for the NAFTA as well as costs related to planned in the second half of the year were the first half of 2014 increased 1% segment was $705 million for the and unplanned maintenance 10.2 million tonnes, a decrease from the same period in 2013, as year ended December 31, 2015 as downtime. Operating income in of 12.6% from the same period well as average steel selling price in compared to an operating income the second half of 2014 benefited in 2014. Steel shipments for the the second half of the year which of $386 million for the year ended from lower input costs and first half of 2015 were negatively was higher by 2%, as compared to December 31, 2014. Operating loss decreased maintenance expenses, affected by increased imports. Steel the same period in 2013, although included impairment charges of particularly in the fourth quarter, shipments for the second half of average steel selling price in $526 million of which $231 million but was negatively impacted by 2015 were negatively affected by a the fourth quarter of 2014 was related to the intended sale of the a $76 million charge for onerous decrease in flat product shipments relatively flat as compared to the Long carbon facilities in the United supply contract provisions, (mainly Mexico and U.S.) and a fourth quarter of 2013. States (ArcelorMittal Laplace, primarily for tin coated products at decrease in long product shipment Steelton and Vinton) and $276 Weirton, in the United States and volumes due to the closure of 16 Management report

Brazil Performance for the year ended December 31, (in millions of USD unless otherwise shown) 2015 2014 2013 Sales 8,503 10,037 10,148 Depreciation 336 457 691 Impairments 176 - - Operating income / (loss) 628 1,388 1,204

Crude steel production (thousand tonnes) 11,612 10,524 9,987 Steel shipments (thousand tonnes) 11,540 10,376 9,797

Average steel selling price (USD/tonne) 647 867 940

Sales million, a decrease of 54.7% as equipment. Operating income for December 31, 2014. Shipments compared to the year ended the segment amounted to $0.8 were 5.5 million tonnes in the first In the Brazil segment, sales December 31, 2014. The decrease billion for the second half of 2014, half of 2015, which was up 19.5% were $8.5 billion for the year was primarily due to a 25.4% compared to operating income compared to the same period in ended December 31, 2015 decrease in average steel selling of $0.6 billion in the first half of 2014, primarily driven by increased which represented a 15.3% prices, write-downs of $91 million 2014. Operating income for the slab exports from Brazil. Shipments decrease as compared to the primarily related to inventories in first half of 2014 was negatively in the second half of the year year ended December 31, 2014 the third and fourth quarters of affected by lower shipments and were up by 4.5% as compared to primarily due to lower average 2015 following the rapid decline lower average steel selling prices the second half of 2014, primarily steel selling prices, impacted by of steel prices and an impairment as compared to the same period due to higher exports of slab foreign exchange rates and low of $176 million relating to the in 2013. Operating income for the shipments from Brazil, although international steel pricing for both currently idled ArcelorMittal Point second half of 2014 was positively shipments were down in the flat and long products offset in Lisas (Trinidad and Tobago) facility, affected by the additional slab fourth quarter of 2015, due to a part by higher steel shipments. partially offset by a 11.2% increase volumes as described below. continued slowdown in demand. Sales in the first half of 2015 were in steel shipments. Operating $4.3 billion, down 10% from the income for the first half of 2015 Crude steel production, steel Total steel shipments reached 10.4 same period in 2014 primarily due decreased 4.4% to $566 million shipments and average steel million tonnes for the year ended to lower average selling prices as compared with the first half selling price December 31, 2014, which was a partially offset by higher steel of 2014 primarily due to lower 6% increase from steel shipments shipments following the restart of average steel selling prices offset Crude steel production increased for the year ended December 31, Blast Furnace #3 at Tubarão in July in part by higher steel shipments by 10.3% to 11.6 million tonnes for 2013. Shipments were 4.6 million 2014, while sales in the second following the restart of Blast the year ended December 31, 2015 tonnes in the first half of 2014, half of the year were $4.2 billion, Furnace #3 at Tubarão and the as compared to the year ended which was down 5% compared to down 19.7% from the same period improvement in the Company’s December 31, 2014 as a result of the same period in 2013, primarily in 2014 primarily due to lower tubular operations. Operating the restart of Blast Furnace #3 at due to operational issues in the average selling prices (28.2%), income for the second half of Tubarão. Crude steel production hot strip mill in Tubarão, while partially offset by an increase in 2015 was $63 million, a 92.1% increased by 21% to 5.8 million shipments in the second half of the shipments (4.5%) and an increase decrease compared to the second tonnes for the first half of 2015 as year were up by 17% as compared in sales from the Company’s half of 2014 due to the decrease compared to 4.8 million tonnes to the second half of 2013, Venezuelan operations. in average steel selling prices for the first half of 2014 as a result primarily due to higher exports of (28.2%) and the impairment and of the restart of the Tubarão slab shipments from Brazil after In the Brazil segment, sales write-down described above, furnace in July 2014, while crude blast furnace No. 3 was restarted at were $10.0 billion for the year partially offset by a 4.5% increase steel production increased by Tubarão. ended December 31, 2014 which in shipments. 1.3% for the second half of 2015 represented a 1% decrease as as compared to the second half Average steel selling price compared to the year ended Operating income for the Brazil of 2014. Similarly, crude steel decreased 25.4% for the year December 31, 2013. Sales in the segment for the year ended production increased by 5% to ended December 31, 2015 as first half of 2014 were $4.8 billion, December 31, 2014 was $1.4 10.5 million tonnes for the year compared to the year ended down 6% from the same period in billion compared to $1.2 billion ended December 31, 2014 as December 31, 2014 primarily 2013, while sales in the second half for the year ended December 31, compared with 10.0 million tonnes driven by a weaker Brazilian of the year were $5.2 billion, up 4% 2013. The increase was primarily for the year ended December 31, real, weaker product mix due from the same period in 2013. due to higher steel shipment 2013. to increased slab exports and a volumes as described below, lower decline in international prices. Operating income or loss costs and lower depreciation, Total steel shipments reached Average steel selling price in the which was $457 million for 2014 11.5 million tonnes for the year first half of 2015 was down 23% Operating income for the Brazil as compared to $691 million for ended December 31, 2015, which from the same period in 2014, segment for the year ended 2013, mainly due to the change was an 11.2% increase from steel primarily driven by a weaker December 31, 2015 was $628 in asset lives of certain plant and shipments for the year ended Brazilian real, weaker product mix Management report 17

due to increased slab exports post described above. Tubarão. Average steel selling price down 12% from the same period the restart of Blast Furnace #3 at Average steel selling price in the first half of 2014 was down in 2013 due to the mix impact Tubarão described above and a decreased 8% for the year ended 3% from the same period in 2013, described above. decline in international prices. December 31, 2014 as compared driven by a decrease in global steel The average steel selling price in to the year ended December 31, prices, currency devaluation in the second half of the year was 2013 primarily due to a mix impact Brazil, Argentina and Venezuela. down 28.2% from the same period (higher slab shipments) following The average steel selling price in in 2014 due to the mix impact the restart of blast furnace No. 3 at the second half of the year was

Europe Performance for the year ended December 31, (in millions of USD unless otherwise shown) 2015 2014 2013 Sales 31,893 39,552 40,507 Depreciation 1,192 1,510 2,003 Impairments 398 57 86 Operating income / (loss) 171 737 (985)

Crude steel production (thousand tonnes) 43,853 43,419 41,923 Steel shipments (thousand tonnes) 40,676 39,639 38,269

Average steel selling price (USD/tonne) 609 773 804

Sales $20.8 billion, remaining relatively against the euro. year ended December 31, 2013 flat compared to the same period Operating income for the Europe included restructuring costs Sales in the Europe segment in 2013, and in the second half of segment for the year ended amounting to $517 million, were $31.9 billion for the year the year sales were $18.8 billion, a December 31, 2014 significantly including $137 million of costs ended December 31, 2015, decrease of 5% compared to the increased to $0.7 billion compared incurred for the long-term idling representing a decrease of 19.4% same period in 2013. The decrease to operating loss of $1.0 billion of the Florange liquid phase as compared to the year ended was primarily related to lower for the year ended December 31, in ArcelorMittal Atlantique et December 31, 2014 primarily due average steel selling prices. 2013. Operating income for the Lorraine (including voluntary to lower average steel selling segment was $0.3 billion for the separation scheme costs, site prices partially offset by higher Operating income or loss second half of the year, compared rehabilitation / safeguarding costs shipments. Local average steel to operating income of $0.4 and take or pay obligations) and selling prices declined, partially Operating income for the Europe billion for the first half of the year. $354 million (including social and reflecting lower raw material segment for the year ended Despite the continuous difficult environmental costs) as a result costs. Sales in the first half of 2015 December 31, 2015 decreased to economic environment in Europe of the agreed industrial and social decreased 18% to $17.1 billion as $171 million, a 76.8% decrease reflected in lower average steel plan for the finishing facilities compared to the first half of 2014 as compared to the year ended selling prices mainly due to lower at the Liège site of ArcelorMittal primarily due to a 22% decrease December 31, 2014. Operating loss raw material prices, shipments Belgium. These charges were in average steel selling prices for the segment was $533 million increased by 4% in 2014 as a result partially offset by a reversal which were negatively impacted for the second half of the year, of improved domestic demand. of provisions of $38 million in by the USD appreciation against compared to operating income Operating income for the year France and Spain following the the Euro, partially offset by an of $704 million for the first half ended December 31, 2014 was revision of certain assumptions. increase in steel shipments by of the year. Operating income positively affected by improved Europe’s operating loss was 7%. In the second half of the year was negatively impacted by (i) an market conditions, lower costs reduced by a non-cash gain of sales were $14.7 billion, a decrease impairment charge of $398 million and benefits of cost optimization $92 million corresponding to the of 21.2% compared to the same primarily relating to the indefinite efforts. Operating income for the final recycling of income relating period in 2014 primarily due to idling of the Sestao facility in Spain year ended December 31, 2014 to unwinding of hedges on raw lower average steel selling prices and the write down of carrying included impairment charges of material purchases. and a marginal decrease in steel values for certain ArcelorMittal $57 million related to the idling of shipments described below. Downstream Solutions operations mill C in Rodange, Luxembourg. Europe’s operating loss for the year Sales in the Europe segment were as a result of the classification as In addition, operating income was ended December 31, 2013 also $39.6 billion for the year ended held for sale and (ii) write-downs positively impacted by a decrease included impairment charges of December 31, 2014, representing of inventories for $0.6 billion in in depreciation which was $1.5 $86 million, of which $55 million a decrease of 2% as compared to the second half of 2015 following billion and $2.0 billion for the years was in connection with the long- $40.5 billion for the year ended the rapid decline in steel prices, ended December 31, 2014 and term idling of the ArcelorMittal December 31, 2013. The decrease partially offset by improved market December 31, 2013, respectively, Tallinn galvanizing line in Estonia, was primarily due to a 4% decrease conditions and realized benefits mainly due to the change in largely offset by the reversal of in average steel selling price while of cost optimization efforts as well useful lives of certain plant and an impairment loss of $52 million steel shipments increased by 4%. as increased shipments and the equipment. at the Liège site of ArcelorMittal Sales in the first half of 2014 were effects of the USD appreciation Europe’s operating loss for the Belgium following the restart of 18 Management report

the hot dip galvanizing line HDG5, fewer facilities under maintenance shipments in the second half of Average steel selling price $24 million primarily related to during the first half of 2015 and the year were 19.1 million tonnes, decreased 21.2% for the year the closure of the organic coating to align with increased demand. down 1.6% from the same period ended December 31, 2015 as and tin plate lines at the Florange Crude steel production decreased in 2014 driven by lower demand compared to the year ended site of ArcelorMittal Atlantique et in the second half of 2015 as and maintenance work. December 31, 2014. Average steel Lorraine in France and included an compared to the second half of selling price in the first half and impairment charge of $41 million 2014 by 3.3% driven by lower Total steel shipments were 39.6 second half of 2015 was down with respect to the subsidiaries demand and maintenance work million tonnes for the year ended 22% and 20.2%, respectively, included in the agreed sale of including the reline of a blast December 31, 2014, an increase as compared to the first and certain steel cord assets in the furnace in Dunkirk, France, and of 4% from steel shipments for second half of 2014, largely due US, Europe and Asia to the joint repairs to a blast furnace in Gent, the year ended December 31, to exchange rate effects and a venture partner Kiswire Ltd. Belgium. Crude steel production 2013. Shipments were 20.2 million marginal decline in local average for the Europe segment increased tonnes in the first half of 2014, up steel prices, partially reflecting Crude steel production, steel 4% to 43.4 million tonnes for the 3% from the same period in 2013, lower raw material costs. shipments and average steel year ended December 31, 2014, while shipments in the second selling price from 41.9 million tonnes for the half of the year were 19.4 million Average steel selling price year ended December 31, 2013. tonnes, up 4% from the same decreased 4% for the year ended Crude steel production for the period in 2013. The increase in December 31, 2014 as compared Europe segment increased 1% Total steel shipments were 40.7 the first and second half of 2014 to the year ended December 31, to 43.9 million tonnes for the million tonnes for the year ended was primarily driven by improved 2013. Average steel selling price year ended December 31, 2015 December 31, 2015, an increase demand compared to the first half in the first half of 2014 and in the as compared to the year ended of 2.6% from steel shipments for of 2013. second half of 2014 was down 1% December 31, 2014. Crude steel the year ended December 31, and 7%, respectively, as compared production increased in the first 2014. Shipments were 21.6 million to the first and second half of 2013, half of 2015 as compared to the tonnes in the first half of 2015, up mainly due to the decreasing trend first half of 2014 by 5% to 23 7% from the same period in 2014 in raw material prices. million tonnes primarily due to driven by improved demand, while

ACIS Performance for the year ended December 31, (in millions of USD unless otherwise shown) 2015 2014 2013 Sales 6,128 8,268 8,419 Depreciation 408 525 542 Impairments 294 - 196 Operating income / (loss) (624) 95 (457)

Crude steel production (thousand tonnes) 14,219 14,148 14,362 Steel shipments (thousand tonnes) 12,485 12,833 12,422

Average steel selling price (USD/tonne) 432 576 613

Sales In the ACIS segment, sales were Operating income or loss of a deferred stripping $8.3 billion for the year ended prepayment in connection with In the ACIS segment, sales were December 31, 2014, representing Operating loss for the ACIS the amended iron ore supply $6.1 billion for the year ended a decrease of 2% from sales of segment for the year ended agreement and competition December 31, 2015, representing $8.4 billion for the year ended December 31, 2015 was $624 cases in South Africa in the fourth a decrease of 25.9% as compared December 31, 2013. The decrease million, compared to operating quarter of 2015 and $80 million to the year ended December 31, was primarily due to a 6% decrease income of $95 million for the primarily related to write-downs 2014. The decrease was primarily in average selling price (in all year ended December 31, 2014. of inventories following the rapid due to a 25% decrease in average three units), partially offset by an Operating income for the year decline of steel prices and to selling price and lower steel increase in shipments of 3%. Sales ended December 31, 2015 was retrenchment costs of $27 million shipments by 2.7%, as described in the first half of 2014 remained negatively impacted by a $294 in Thabazimbi and Tshikondeni in below. Sales in the first half of relatively flat at $4.3 billion million asset impairment charge South Africa in the third quarter 2015 decreased 22% to $3.4 billion compared to the same period in mainly related to the closure of 2015. Operating income for the compared to the same period in 2013, while sales in the second half of Vereeniging meltshop ($27 first half of 2015 was $7 million 2014 and sales in the second half of the year were $4.0 billion, down million) and the Saldanha facility as compared to $5 million for the of the year were $2.8 billion, down 4% from the same period in 2013. in South Africa ($258 million), as same period of 2014. Operating 30.4% from the same period in a result of its revised competitive loss for the second half of the year 2014 primarily due to the decrease outlook, and charges of $239 was $631million as compared to in average selling prices and lower million including $159 million operating income of $90 million shipments. primarily related to derecognition for the same period in 2014. Management report 19

Operating income was negatively iron ore supply agreement signed from the same period in 2014. to the year ended December 31, impacted by the decrease in with Sishen on November 5, 2013. Steel shipments for the first half 2014. This decrease was mainly average steel selling prices and of 2015 were negatively affected related to lower average steel lower shipments for both the first Crude steel production, steel by lower volumes in South Africa selling prices in all three units and second half of 2015 (as well shipments and average steel and a weaker CIS market. Steel (Ukraine, Kazakhstan and South as the impairments and write- selling price shipments for the second half of Africa). Average steel selling price downs in the second half of 2015) 2015 decreased 1% compared to in the first half of 2015 decreased as compared to the same period Crude steel production for the the second half of 2014 due to 18% from the same period in 2014, of 2014, partially offset by lower ACIS segment remained fairly lower steel shipments in Ukraine primarily due to lower global steel costs in all three units (Ukraine, flat at 14.2 million tonnes for impacted by lower production prices and weak demand in both Kazakhstan and South Africa) due the year ended December 31, and a weaker South Africa market CIS and South Africa. Average to currency devaluation. 2015 as compared to 2014. in 2015, partially offset by lower steel selling price in the second Production was lower in Ukraine volume in 2014 due to the half of 2015 decreased 32.4% from Operating income for the ACIS due to planned repairs of Blast Newcastle reline. the same period in 2014 due to segment for the year ended Furnace #9, partially offset by lower average steel selling prices December 31, 2014 was $95 higher production in South Total steel shipments reached 12.8 in all three units, impacted by million, compared to operating Africa following the Newcastle million tonnes for the year ended lower global steel prices and weak loss of $457 million for the year reline completion. Crude steel December 31, 2014, an increase of demand in both CIS and South ended December 31, 2013. production for the first half of 2015 3% from steel shipments for the Africa. The improved results reflected increased 4% to 7.3 million tonnes year ended December 31, 2013. improved operations and lower as compared to 7.0 million tonnes Steel shipments were 6.5 million Average steel selling price costs primarily in the CIS, offset in for the first half of 2014 primarily tonnes in the first half of 2014, up decreased 6% for the year ended part by lower average steel selling driven by the Newcastle reline 5% from the same period in 2013. December 31, 2014 as compared prices. Operating income for the completion, while crude steel Steel shipments for the first half of to the year ended December 31, segment amounted to $90 million production for the second half of 2014 were positively impacted by 2013. This decrease was mainly for the second half of the year, 2015 decreased 3.0% as compared improved shipments in Kazakhstan related to lower average steel compared to operating income to the second half of 2014, mainly with stable operations, while selling prices in all three units. of $5 million in the first half. due to planned repair of Blast steel shipments for the first half Average steel selling price in Operating income was positively Furnace #9 in Ukraine. Crude of 2013 were negatively affected the first half of 2014 was down impacted by improved market steel production for the ACIS by lower volumes in South 7% from the same period in conditions resulting in increased segment decreased 2% to 14.1 Africa, caused by fire disruption 2013, primarily due to lower shipments and the realized million tonnes for the year ended at the Vanderbijlpark site, and international prices driven benefits of cost optimization December 31, 2014, from 14.4 Kazakhstan. In the second half of by lower raw material prices, efforts, offset slightly by lower million tonnes for the year ended 2014, steel shipments were 6.3 and partially due to currency average steel selling prices. December 31, 2013. million tonnes and represented devaluation, as well as the second a 2% increase compared to the half of the year when average Operating loss for the year ended Total steel shipments reached 12.5 same period in 2013, primarily as steel selling prices were down 5% 2013 included a charge of $181 million tonnes for the year ended a result of higher shipments from compared to the same period in million related to the Thabazimbi December 31, 2015, a decrease CIS countries. 2013. mine in ArcelorMittal South Africa of 2.7% compared to the year following the transfer of the ended December 31, 2014. Steel Average steel selling price operating and financial risks of the shipments were 6.2 million tonnes decreased 25% for the year ended asset to Kumba as a result of the in the first half of 2015, down 4% December 31, 2015 as compared 20 Management report

Mining Performance for the year ended December 31, (in millions of USD unless otherwise shown) 2015 2014 2013 Sales 3,387 4,970 5,766 Depreciation 614 703 642 Impairments 3,370 63 162 Operating income / (loss) (3,522) 565 1,176

Year ended December 31, Mining shipments (million tonnes) 1 2015 2014 2013 Iron ore shipped externally 13.66 14.36 11.60 Iron ore shipped internally and reported at market price 3 26.66 25.40 23.50 Iron ore shipped externally and internally and reported at market price 3 40.32 39.76 35.10 Iron ore shipped internally and reported at cost-plus 3 22.12 23.92 24.40 Total iron ore shipments 2 62.44 63.68 59.60

Coal shipped externally 1.48 1.84 3.26 Coal shipped internally and reported at market price 3 1.33 2.09 1.58 Coal shipped externally and internally and reported at market price 3 2.81 3.93 4.84 Coal shipped internally and reported at cost-plus 3 3.22 3.29 2.88 Total coal shipments 4 6.03 7.22 7.72

1 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 reported 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 reported at market price or reported at 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). 2 Total of all finished products of fines, concentrate, pellets and lumps and includes tonnes shipped externally and internally and reported at market price as well as tonnes shipped internally on a cost-plus basis. 3 Market-priced tonnes represent amounts of iron ore and coal from ArcelorMittal mines that could practically be sold to third parties. Market-priced tonnes that are transferred from the Mining segment to the Company’s steel producing segments are reported at the prevailing market price. Shipments of raw materials that do not constitute market-priced tonnes are transferred internally on a cost-plus basis. 4 Total of all finished products of coal and includes tonnes shipped externally and internally and reported at market price as well as tonnes shipped internally on a cost-plus basis. Management report 21

Year ended December 31, Iron ore production (million metric tonnes) 1 Type Product 2015 2014 2013

Own mines Concentrate, lump, fines and America 2 Open pit pellets 39.0 37.3 32.5 South America Open pit Lump and fines 3.5 4.5 3.9 Concentrate and Europe Open pit lump 2.1 2.1 2.1 Open pit / Africa Underground Fines 4.3 5.5 4.8 Concentrate, Open pit / lump, fines and Asia, CIS & Other Underground sinter feed 13.9 14.5 15.0 Total own iron ore production 62.8 63.9 58.4 Strategic long-term contracts - iron ore North America 3 Open pit Pellets 6.6 8.2 7.0 Africa 4 Open pit Lump and fines 4.3 4.9 4.7 Total strategic long.term contracts - iron ore 10.9 13.1 11.7 Total 73.7 77.0 70.1 1 Total of all finished production of fines, concentrate, pellets and lumps. 2 Includes own mines and share of production from Hibbing (United States, 62.30%) and Peña (Mexico, 50%). 3 Consists of a long-term supply contract with Cleveland Cliffs for purchases made at a previously set price, adjusted for changes in certain steel prices and inflation factors. 4 Includes purchases under an interim strategic agreement with Sishen Iron Ore Company (Proprietary) Limited (“SIOC”) which was extended on December 13, 2012 and became effective on January 1, 2013, pursuant to which SIOC supplied a maximum annual volume of 4.8 million tonnes of iron ore at a weighted average price of $65 per tonne. On November 5, 2013, ArcelorMittal and SIOC entered into an agreement establishing long-term pricing arrangements for the supply of iron ore by SIOC to ArcelorMittal. Pursuant to the terms of the agreement, which became effective on January 1, 2014, ArcelorMittal may purchase from SIOC up to 6.25 million tonnes iron ore per year, complying with agreed specifications and lump-fine ratios. The price of iron ore sold to ArcelorMittal by SIOC is determined by reference to the cost (including capital costs) associated with the production of iron ore from the DMS Plant at the Sishen mine plus a margin of 20%, subject to a ceiling price equal to the Sishen Export Parity Price at the mine gate. While all prices are referenced to Sishen mine costs (plus 20%) from 2016, the parties agreed to a different price for certain pre-determined quantities of iron ore for the first two years of the 2014 Agreement. On November 6, 2015, ArcelorMittal announced that an agreement had been reached with SIOC to amend the pricing mechanism terms of the current iron ore supply agreement from a cost-based price to an Export Parity Price (“EPP”) with effect from October 1, 2015. The EPP will be calculated on the basis of the Platts 62% Fe CFR China Fines Index (the “Index price”) and, at certain price levels, ArcelorMittal will receive a discounted price. In addition, under the amended agreement, ArcelorMittal South Africa will no longer contribute toward stripping costs. Accordingly at December 31, 2015, the “deferred stripping pre-payment asset” was derecognized. As a result of this amendment, the contract will no longer be considered as a strategic contract in 2016.

Year ended December 31, Coal production (million metric tonnes) 2015 2014 2013 Own mines North America 1.57 2.04 2.62 Asia,CIS & Other 4.58 4.98 5.43 Total own coal productions 6.15 7.02 8.05 Strategic long.term contracts - coal North America 1 0.14 0.37 0.37 Africa 2 - 0.31 0.42 Total strategic long.term contracts - coal 0.14 0.68 0.79

Total 6.29 7.70 8.84 1 Includes strategic agreement - prices on a fixed price basis. 2 Includes long-term lease - prices on a cost-plus basis. 22 Management report

Sales noted, however, that there may not sales. With respect to prices, for 2015 was 40.3 million tonnes, an be a direct correlation between example, the average reference increase of 1.4% compared to the In the Mining segment, sales were reference prices and actual selling iron ore price was $96.7 per tonne year ended December 31, 2014. $3.4 billion for the year ended prices in various regions at a given in 2014 as compared to $135.2 Coal marketable volume for the December 31, 2015, representing a time. per tonne in 2013 (CFR China 62% year ended December 31, 2015 decrease of 31.8% as compared to Fe, Platts Index) and the average was lower at 2.8 million tonnes, a the year ended December 31, 2014. In the Mining segment, sales were reference price for hard coking coal decrease of 28.5% compared to the The decrease was primarily due $5.0 billion for the year ended decreased to $114.44 per tonne year ended December 31, 2014. to lower seaborne iron ore market December 31, 2014, representing in 2014 as compared to $148.12 prices which were down 43% a decrease of 14% from sales of per tonne in 2013 (FOB Australia Operating income for the Mining (average year-on-year). Sales in the $5.8 billion for the year ended HCC Peak Downs, Platts Index). The segment for the year ended first half of 2015 were $1.7 billion, a December 31, 2013. The decrease decrease in the average reference December 31, 2014 was $0.6 billion, decrease of 35% compared to the was primarily due to lower seaborne iron ore price accelerated in the compared to operating income same period in 2014, while sales in iron ore market prices which were second half of 2014, with prices of $1.2 billion for the year ended the second half of 2015 were $1.7 down 28% (average year-on-year), down 38% compared to the second December 31, 2013. Operating billion, down 28.6% from the same partially offset by higher marketable half of 2013, while prices were income for the year ended period in 2014. iron ore shipments due to higher only down 19% in the first half of December 31, 2014 was positively shipments from the Company’s 2014 compared to the first half of impacted by a $79 million gain on Sales to external customers were Canadian operations following 2013. It should be noted, however, disposal of Kuzbass coal mines in $0.8 billion for the year ended the successful commissioning that there may not be a direct Russia and by higher marketable December 31, 2015, representing a and ramp-up of the expanded correlation between reference iron ore shipments, offset by decrease of 38% compared to the concentrator. Sales in the first half prices and actual selling prices in negative impacts for the decrease year ended December 31, 2014. of 2014 were $2.64 billion, up 3.5% various regions at a given time. in seaborne iron ore market prices Iron ore shipments to external from the same period in 2013, while noted above and an impairment customers decreased 5% from sales in the second half of the year Operating income or loss charge of $63 million relating to 14.4 million tonnes in 2014 to 13.7 were $2.33 billion, down 28% from the Volcan iron ore mine in Mexico million tonnes in 2015, while coal the same period in 2013. Operating loss for the Mining due to a short residual life of the shipments to external customers segment for the year ended mine. Iron ore marketable volume decreased by 20% from 1.84 million Sales to external customers were December 31, 2015 was $3.5 billion, for the year ended December tonnes to 1.48 million tonnes. The $1.3 billion for the year ended compared to operating income 31, 2014 was 39.8 million tonnes, decrease in the volume of external December 31, 2014, representing of $0.6 billion for the year ended compared to 35.1 million tonnes sales for iron ore was primarily a decrease of 20% from $1.7 billion December 31, 2014. Operating loss for the year ended December 31, due to lower external shipments for the year ended December 31, in 2015 was negatively impacted 2013. Coal marketable volume for from Brazil and Liberia partially 2013. Iron ore shipments to external by the decrease in seaborne the year ended December 31, 2014 offset by the Company’s Canadian customers increased 24% from iron ore and coking coal market was lower at 3.9 million tonnes, operations. In the second half of 11.6 million tonnes in 2013 to 14.4 prices noted above and included compared to 4.8 million tonnes for 2015, iron ore shipments to external million tonnes in 2014, while coal impairment charges of $3.4 billion, the year ended December 31, 2013. customers were nearly in line with shipments to external customers including $854 million with respect Operating income for the segment the first half. The decrease in coal decreased by 44% from 3.26 million to the Mining segment goodwill amounted to $0.1 billion for the shipments to external customers tonnes to 1.84 million tonnes. The and $2.5 billion related to tangible second half of 2014, compared was primarily due the scope change increase in the volume of external and intangible assets in respect to $0.5 billion in the first half of as a result of the disposal of the sales for iron ore was primarily of iron ore mining operations 2014. Operating income for the Company’s Russian coal operations due to higher shipments from the at ArcelorMittal Liberia ($1,426 second half of 2014 was negatively and lower external sales from Company’s Canadian operations. million), Las Truchas in Mexico ($220 affected by the decrease in iron ore Kazakhstan. With respect to prices, In the second half of 2014, iron ore million), ArcelorMittal Serra Azul reference prices to $82.4 per tonne for example, the average reference shipments to external customers in Brazil ($176 million) and coal in the second half, as compared to iron ore price was $55.50 per tonne were 14% higher than in the first mining operations at ArcelorMittal $111.5 per tonne in the first half of in 2015, $96.7 per tonne in 2014 half primarily as a result of higher Princeton in the United States ($684 the year and the above-mentioned and $135.2 per tonne in 2013 (CFR shipments from the Company’s million). impairment charges. China 62% Fe, Platts Index) and the Canadian operations. The increase These impairments were mainly average reference price for hard in volume of sales to external due to the downward revision of Production coking coal decreased to $88.00 customers for iron ore was more cash flow projections relating to the per tonne in 2015, from $114.44 than offset by the substantial expected persistence of a lower raw ArcelorMittal had own iron ore per tonne in 2014 and $148.12 per decrease in the market price of iron material price outlook. In addition production of 62.8 million tonnes tonne in 2013 (FOB Australia HCC ore and coal. The decrease in coal to such impairment charges, for the year ended December Peak Downs, Platts Index). The shipments to external customers operating performance in 2015 31, 2015, a decrease of 1.7% decrease in the average reference was primarily due to very difficult compared to 2014 reflected lower compared to the year ended iron ore price accelerated in the geological conditions that limited seaborne iron ore market prices, December 31, 2014. The decrease second half of 2015, with prices underground extraction in the offset in part by operating cost in iron ore production was down 38% compared to the second Company’s Russian coal operations improvement. primarily due to lower production half of 2014, and down 46% in and lower external sales from in Kazakhstan, Brazil, Mexico the first half of 2015 compared to Kazakhstan due to a change in Iron ore marketable volume for and Liberia offset by increases the first half of 2014. It should be mix between internal and external the year ended December 31, due to higher production at the Management report 23

Company’s Canadian operations. included an impairment charge which $200 million related to December 31, 2013. ArcelorMittal had own coking coal of $138 million with respect to the Company’s 47% stake in production of 6.1 million tonnes the Company’s Indian investee, the associate China Oriental. In Net interest expense (interest for the year ended December of which $69 million on the addition, the Company recorded expense less interest income) was 31, 2015, a decrease of 12.4% carrying value of the investment an impairment charge of $111 $1.3 billion for the year ended compared to the year ended and $69 million on related loans, million relating to the Company’s December 31, 2015, a decrease of December 31, 2014. The decrease respectively, as a result of a 50% interest in the associate 13% compared to the year ended in coal production was primarily downward revision of cash flow Kiswire ArcelorMittal Ltd in the December 31, 2014 due to lower due to lower production at both projections and a $101 million framework of the agreed sale of average cost resulting from debt U.S. and Kazakhstan operations as impairment charge related to certain steel cord assets to the repaid and raised during the year, well as the disposal of the Kuzbass the decrease in market value of joint venture partner Kiswire Ltd. despite the increased interest costs coal mines in Russia during the the Company’s 12.08% interest (with another impairment charge following the ratings downgrades fourth quarter of 2014. in (Turkey). These losses recorded in cost of sales in the that occurred during 2015. ArcelorMittal had own iron ore were partially offset by income Europe segment as described production of 63.9 million tonnes generated from the share swap above). The loss for the year ended Net interest expense was $1.5 for the year ended December agreement with respect to Gerdau, December 31, 2013 also included billion for the year ended 31, 2014, an increase of 9.4%, as Brazil entered into on July 14, 2015, an impairment charge of $111 December 31, 2014 as compared compared to 58.4 million tonnes as part of which ArcelorMittal million relating to the associate to $1.8 billion for the year ended for the year ended December received preferred shares of Coal of Africa as a result of lower December 31, 2013. Interest 31, 2013. The increase in iron ore Gerdau and cash consideration profitability and decline in market expense was slightly lower for production was driven primarily by of $28 million in exchange for value. The loss for the year ended the year ended December 31, Canada as a result of the ramp up unlisted Gerdau shares, resulting in December 31, 2013 included a 2014 at $1.6 billion, compared to post expansion project. a gain of $55 million. charge of $57 million following interest expense of $1.9 billion ArcelorMittal had own coking coal the disposal of a 6.66% interest in for the year ended December 31, production of 7.0 million tonnes ArcelorMittal recorded a loss of Erdemir shares by way of a single 2013, primarily due to the positive for the year ended December $172 million from investments in accelerated bookbuilt offering to effect of lower debt following 31, 2014, a decrease of 13.6%, as associates, joint ventures and other institutional investors. In addition, the repayment of convertible compared to 8.1 million tonnes investments for the year ended the loss for the year ended bonds in April and May and for the year ended December December 31, 2014, as compared December 31, 2013 included a $56 bonds in October 2014 and lower 31, 2013. The decrease in coal with a loss of $442 million for million expense for contingent cost of debt. Interest income for production was primarily due to the year ended December 31, consideration with respect to the the year ended December 31, very difficult geological conditions 2013. The loss for the year ended Gonvarri Brasil acquisition made in 2014 amounted to $0.1 billion, that limited underground December 31, 2014 was primarily 2008 partly offset by a gain of $45 compared to $0.1 billion for the extraction in the Company’s due to a $621 million impairment million, with respect to the sale of year ended December 31, 2013. Russian coal operations and lower charge relating to China Oriental a 10% interest in Hunan Valin Steel production in the Company’s USA following a revision of business Tube and Wire Co. Ltd. (“Hunan Foreign exchange losses increased coal operations (Princeton). assumptions in the context of Valin”) following the exercise of the to $0.7 billion for the year ended continuing growth slowdown in first and second put options. December 31, 2015, an increase of China, an impairment charge of 12.4% compared to $0.6 billion the Income or loss from investments $56 million relating to Erdemir year ended December 31, 2014, in associates, joint ventures and and a loss of $14 million related Financing costs-net primarily due to an appreciation other investments to the disposal of Hunan Valin of the USD against the euro. This shares (comprising a net loss Net financing costs include net foreign exchange loss primarily ArcelorMittal recorded a loss of of $76 million related to the interest expense, revaluation of relates to the impact of the USD $502 million from investments exercise of the third put option on financial instruments, net foreign appreciation of an additional 10% in associates, joint ventures and February 8, 2014 and the resulting exchange income/expense (i.e., against the euro (12% appreciation other investments for the year discontinuation of equity method the net effects of transactions in for the year ended December 31, ended December 31, 2015, as accounting, partly offset by a net a foreign currency other than the 2014), a 32% appreciation against compared with a loss of $172 gain of $62 million with respect functional currency of a subsidiary) the Brazilian real (12% appreciation million for the year ended to the fourth and last put option and other net financing costs for the year ended December 31, December 31, 2014. The loss for exercised on August 6, 2014). (which mainly include bank fees, 2014) and a 46% devaluation of the year ended December 31, These losses were partially offset accretion of defined benefit the Kazakhstani tenge. 2015 included an impairment by a $193 million gain on the sale obligations and other long-term charge of $283 million related to of ArcelorMittal’s 50% ownership liabilities). Other net financing costs the Company’s 50% interest in the in Gallatin, improved performance Net financing costs were lower (including expenses related to joint venture Kalagadi Manganese of European investees and for the year ended December True Sale of Receivables, bank fees, (Propriety) Ltd engaged in the the share of profits in Calvert’s 31, 2015, at $2.9 billion, a 15.5% interest on pensions and fair value development of the Kalagadi operations. decrease compared to the year adjustments of convertible bonds manganese ore deposits in South ended December 31, 2014. Net and derivative instruments) were Africa as a result of a downward The loss for the year ended financing costs were higher for the $0.9 billion for the year ended revision of cash flow projections December 31, 2013 included year ended December 31, 2014, December 31, 2015, as compared following an expected persistence impairment charges for a total at $3.4 billion, as compared with to $1.3 billion for the year ended of lower manganese prices. It also amount of $422 million, of $3.1 billion for the year ended December 31, 2014, and included 24 Management report

an expense of $79 million relating and included expenses related to of $0.5 billion for the year ended The statutory income tax expense to the extension of the mandatory the termination of the Senegal December 31, 2014, as compared (benefit) and the statutory income convertible bond. The reduction greenfield project, gains and losses to $0.2 billion for the year ended tax rates of the countries that in the loss was mainly due to the on convertible bonds and hedging December 31, 2013, primarily most significantly resulted in the change in the accretion of defined instruments that matured during due to improved results in certain tax expense (benefit) at statutory benefit obligations and other long the period as well as a $161 million jurisdictions. Income tax expense rate for each of the years ended term liabilities for $0.2 billion. charge related to the federal tax for the year ended December 31, December 31, 2015, 2014 and amnesty plan in Brazil with respect 2013 included the settlement 2013 are as set forth below: Foreign exchange losses increased to the settlement of the Siderbras of two tax amnesty programs in to $620 million for the year case. Brazil. ended December 31, 2014, as compared to $248 million for the Income tax expense (benefit) ArcelorMittal’s consolidated year ended December 31, 2013, income tax expense (benefit) is primarily due to an appreciation ArcelorMittal recorded a affected by the income tax laws of the USD against the euro. consolidated income tax and regulations in effect in the This foreign exchange loss expense of $0.9 billion for the various countries in which it primarily relates to the impact of year ended December 31, 2015, operates and the pre-tax results the USD appreciation on euro- as compared to $0.5 billion for of its subsidiaries in each of these denominated deferred tax assets. the year ended December 31, countries, which can vary from In addition, other net financing 2014, due to impairments of year to year. ArcelorMittal operates costs (including expenses related deferred tax assets stemming in certain jurisdictions, mainly in to True Sale of Receivables, bank from lower future taxable results Eastern Europe and Asia, which fees, interest on pensions and fair forecasts in some jurisdictions. have a structurally lower corporate value adjustments of convertible For additional information related income tax rate than the statutory bonds and derivative instruments) to ArcelorMittal’s income taxes, tax rate as in effect in Luxembourg were $1.3 billion for the year see note 9 to ArcelorMittal’s (29.22%), as well as in jurisdictions, ended December 31, 2014, as consolidated financial statements. mainly in Western Europe and the compared to $1.1 billion for the ArcelorMittal recorded a Americas, which have a structurally year ended December 31, 2013, consolidated income tax expense higher corporate income tax rate.

2015 2014 2013 Statutory income tax Statutory income tax rate Statutory income tax Statutory income tax rate Statutory income tax Statutory income tax rate United States (863) 35.00% (352) 35.00% (120) 35.00% Argentina 50 35.00% 59 35.00% 52 35.00% France (32) 34.43% 18 34.43% (224) 34.43% Brazil (48) 34.00% 141 34.00% 94 34.00% Belgium 64 33.99% (10) 33.99% (208) 33.99% Germany (43) 30.30% (82) 30.30% (138) 30.30% Spain (146) 25.00% (78) 25.00% (218) 30.00% Luxembourg (613) 29.22% (228) 29.22% 203 29.22% Mexico (55) 30.00% 9 30.00% (93) 30.00% South Africa (199) 28.00% (23) 28.00% (57) 28.00% Canada 247 26.90% 298 26.90% 240 26.90% - 23.00% - 25.00% (26) 25.00% Russia (1) 20.00% (18) 20.00% (14) 20.00% Kazakhstan (48) 20.00% (4) 20.00% (24) 20.00% 9 19.00% 38 19.00% (7) 19.00% Poland 23 19.00% 25 19.00% (8) 19.00% Romania (10) 16.00% (12) 16.00% (29) 16.00% Ukraine 11 18.00% 23 18.00% (32) 16.00% Trinidad & Tobago (83) 25.00% (11) 25.00% (11) 25.00% Liberia (388) 25.00% (30) 25.00% (14) 25.00% United Kingdom 17 20.00% 55 20.00% 17 20.00% Others (38) 35 26 Total (2,146) (147) (591) Note: The statutory tax rates are the (future) rates enacted or substantively enacted by the end of the respective period. Management report 25

Non-controlling interests pay expenses and meet its debt of December 31, 2015, essentially on the assets of ArcelorMittal service obligations. Significant stable compared to $15.8 billion and its subsidiaries, the ability Net loss attributable to non- cash or cash equivalent balances at December 31, 2014. Most of the of ArcelorMittal’s subsidiaries controlling interests was $477 may be held from time to time external debt is borrowed by the to incur debt and the ability of million for the year ended at the Company’s international parent company on an unsecured ArcelorMittal and its subsidiaries December 31, 2015, as compared operating subsidiaries, including basis and bears interest at varying to dispose of assets in certain with net income attributable in particular those in France, levels based on a combination circumstances. The agreement to non-controlling interests of where the Company maintains of fixed and variable interest also requires compliance with a $112 million for the year ended a cash management system rates. Gearing (defined as net financial covenant, as summarized December 31, 2014. Net loss under which most of its cash and debt divided by total equity) at below. attributable to non-controlling cash equivalents are centralized, December 31, 2015 was 57% as interests for 2015 was primarily and in Argentina, Brazil, Canada, compared to 35% at December The Company must ensure that related to losses generated Morocco, South Africa, Ukraine, 31, 2014. The Company expects the ratio of “Consolidated Total by ArcelorMittal South Africa USA, and Venezuela. Some of gearing to decrease in 2016 as Net Borrowings” (consolidated and Liberia resulting from these operating subsidiaries have a result of the planned capital total borrowings less consolidated the impairments of the assets debt outstanding or are subject increase and the sale of 35% of its cash and cash equivalents) to described above. to acquisition agreements that stake in Gestamp, each announced “Consolidated EBITDA” (the impose restrictions on such on February 5, 2016, see Recent consolidated net pre-taxation Net income attributable to operating subsidiaries’ ability developments. profits of the ArcelorMittal group non-controlling interests was to pay dividends, but such for a Measurement Period, subject $112 million for the year ended restrictions are not significant The margin applicable to to certain adjustments as set out in December 31, 2014, as compared in the context of ArcelorMittal’s ArcelorMittal’s principal credit the facility) does not, at the end of with net loss attributable to non- overall liquidity. Repatriation of facilities ($6 billion revolving credit each “Measurement Period” (each controlling interests of $30 million funds from operating subsidiaries facility and certain other credit period of 12 months ending on the for the year ended December 31, may also be affected by tax and facilities) and the coupons on last day of a financial half-year or 2013. Net income attributable foreign exchange policies in place certain of its outstanding bonds a financial year of the Company), to non-controlling interests from time to time in the various are subject to adjustment in the exceed a certain ratio, referred to increased in 2014 primarily as countries where the Company event of a change in its long-term by the Company as the “Leverage a result of income attributable operates, though none of these credit ratings. In a context of ratio”. ArcelorMittal’s principle to non-controlling interests in policies is currently significant low steel prices and challenging credit facilities set this ratio to 4.25 ArcelorMittal Mines Canada and in the context of ArcelorMittal’s industry conditions, on February to 1, whereas one facility has a Belgo Bekaert Arames, partially overall liquidity. 3, 2015, Standard & Poor’s further ratio of 4.0 to 1. As of December offset by losses generated in downgraded ArcelorMittal’s credit 31, 2015, the Company was in ArcelorMittal South Africa, which In management’s opinion, rating and, on December 18, 2015, compliance with both ratios. were however significantly lower ArcelorMittal’s credit facilities it placed ArcelorMittal on negative than in 2013. are adequate for its present outlook. On November 12, 2015, Non-compliance with the requirements. Moody’s further downgraded covenants in the Company’s Net loss attributable to equity ArcelorMittal and placed it on borrowing agreements would holders of the parent As of December 31, 2015, negative outlook. On November entitle the lenders under such ArcelorMittal’s cash and cash 16, 2015, while Fitch affirmed its facilities to accelerate the ArcelorMittal’s net loss attributable equivalents, including restricted credit rating of ArcelorMittal, it Company’s repayment obligations. to equity holders of the parent cash, amounted to $4.1 billion lowered its outlook to negative. The Company was in compliance for the year ended December 31, as compared to $4.0 billion as of The margin under ArcelorMittal’s with the financial covenants in 2015 amounted to $7.9 billion December 31, 2014. In addition, principal credit facilities and the agreements related to all of compared to net loss attributable ArcelorMittal had available certain of its outstanding bonds is its borrowings as of December 31, to equity holders of $1.1 billion borrowing capacity of $6.0 billion subject to adjustment in the event 2015 and December 31, 2014. for the year ended December 31, under its $6.0 billion revolving of a change in its long-term credit 2014 and $2.5 billion for the year credit facility as of December 31, ratings, and the February 2015 As of December 31, 2015, ended December 31, 2013, for the 2015 and 2014. downgrade resulted in an increase ArcelorMittal had guaranteed reasons discussed above. in interest paid of $28 million approximately $0.2 billion of As of December 31, 2015, in 2015. The November 2015 debt of its operating subsidiaries. Liquidity and capital resources ArcelorMittal’s total debt, which downgrade will similarly result in ArcelorMittal’s debt facilities includes long-term debt and increased interest expense. have provisions whereby the ArcelorMittal’s principal sources short-term debt, was $19.8 acceleration of the debt of another of liquidity are cash generated billion, compared to $19.8 billion ArcelorMittal’s $6 billion revolving borrower within the ArcelorMittal from its operations and its credit (excluding $0.1 billion debt credit facility, which incorporates group could, under certain facilities at the corporate level. classified as held for sale) as of a first tranche of $2.5 billion circumstances, lead to acceleration December 31, 2014. maturing on April 30, 2018, and under such facilities. Because ArcelorMittal is a holding a second tranche of $3.5 billion company, it is dependent upon Net debt (defined as long-term maturing on April 30, 2020, the earnings and cash flows of, debt plus short-term debt, less contains restrictive covenants. and dividends and distributions cash and cash equivalents and Among other things, these from, its operating subsidiaries to restricted cash) was $15.7 billion as covenants limit encumbrances 26 Management report

The following table summarizes the repayment schedule of ArcelorMittal’s outstanding indebtedness, which includes short-term and long-term debt, as of December 31, 2015

Repayment Amounts per Year (in billions of $) Type of Indebtedness as of December 31, 2015 2016 2017 2018 2019 2020 >2020 Total Bonds 1.1 2.5 2.5 2.3 2.4 6.9 17.7 Long-term revolving credit lines ------$2.5 billion tranche of $6 billion revolving credit facility ------$3.5 billion tranche of $6 billion revolving credit facility ------Commercial paper1 0.1 - - - - - 0.1 Other loans 1.1 0.2 0.1 0.2 0.1 0.3 2.0 Total Gross Debt 2.3 2.7 2.6 2.5 2.5 7.2 19.8 1 Commercial paper is expected to continue to be rolled over in the normal course of business.

The following table summarizes the amount of credit available as of December 31, 2015, under ArcelorMittal’s $6 billion revolving credit facility:

Credit lines available Facility Amount Drawn Available $2.5 billion tranche of $6 billion revolving credit facility $2.5 - $ 2.5 $3.5 billion tranche of $6 billion revolving credit facility $3.5 - $ 3.5 Total committed lines $6.0 - $ 6.0

The average debt maturity of tranche of $2.5 billion maturing 2015 capital markets transactions a prospectus). The proceeds of the Company was 6.2 years as of on April 30, 2018 and a second the issuance were used to repay December 31, 2015, as compared tranche of $3.5 billion maturing On October 22, 2015, the existing indebtedness, in particular to 6.3 years as of December 31, on April 30, 2020. The facility may Company redeemed its $500 the early redemption of bonds 2014. be used for general corporate million 3.75% Unsecured notes maturing in August 2015. purposes and replaces the $2.4 due March 1, 2016, prior to their Further information regarding billion revolving credit facility scheduled maturity for a total On April 9, 2015, ArcelorMittal ArcelorMittal’s outstanding long- agreement dated May 6, 2010 and amount of $511 million, including completed the offering of €400 term indebtedness as of December the $3.6 billion revolving credit premium and accrued interest. million Floating Rate Notes due 31, 2015, including the breakdown facility agreement dated March 18, April 9, 2018, and €500 million between fixed rate and variable 2011. As of December 31, 2015, the On July 3, 2015, ArcelorMittal 3.00% Notes due April 9, 2021, rate debt, is set forth in note 6 $6 billion revolving credit facility completed the offering of CHF issued under the Company’s Euro to the consolidated financial remains fully available. 225 million 2.5% Notes due Medium Term Notes Programme. statements. Further information July 3, 2020, issued under the The proceeds of the issuance regarding ArcelorMittal’s use of On September 30, 2010, Company’s Euro Medium Term were used for general corporate financial instruments for hedging ArcelorMittal entered into the Notes Programme. The proceeds of purposes. purposes is set forth in note 6 $500 million revolving multi- the issuance were used to repay or to the consolidated financial currency letter of credit facility prepay existing indebtedness. On March 20, 2015, ArcelorMittal statements. (the “Letter of Credit Facility”). The increased the size of its wholesale Letter of Credit Facility is used by On July 2, 2015, the Company Euro Medium Term Notes Financings the Company and its subsidiaries redeemed its $1 billion 3.75% Programme to €6 billion. for the issuance of letters of Unsecured Notes due August 5, The principal financings of credit and other instruments and 2015, prior to their scheduled On January 14, 2015, ArcelorMittal ArcelorMittal and its subsidiaries matures on September 30, 2016. maturity for a total amount of completed the offering of €750 are summarized below by The terms of the letters of credit $1,022 million, including premium million 3.125% Notes due January category. Further information and other instruments contain and accrued interest. 14, 2022. The Notes were issued regarding ArcelorMittal’s short- certain restrictions as to duration. under ArcelorMittal’s €3 billion term and long-term indebtedness The Letter of Credit Facility was On June 1, 2015, ArcelorMittal wholesale Euro Medium Term is provided in note 6 to the amended on October 26, 2012 completed the offering of $500 Notes Programme. consolidated financial statements. to reduce its amount to $450 million 5.125% Notes due June million. On September 30, 2014, 1, 2020, and $500 million 6.125% Mandatory convertible bond Principal credit facilities the Company refinanced its Letter Notes due June 1, 2025, issued of Credit Facility by entering into under the Company’s automatic On November 23, 2015, the On April 30, 2015, ArcelorMittal a $350 million revolving multi- shelf registration statement Company announced the signed a $6 billion revolving credit currency letter of credit facility. filed with the U.S. Securities and extension of the conversion date facility which incorporates a first Exchange Commission (including for the $1 billion privately placed Management report 27

mandatory convertible bond (the Of this amount, the Company recommendation was approved change in financial assumptions “MCB”) issued on December 28, has utilized $4,580 million and by the annual general meeting of such as the increase of discount 2009 by one of its wholly-owned $5,015 million, as of December shareholders on May 8, 2013, and rates used to calculate the pension, Luxembourg subsidiaries. This 31, 2015 and 2014, respectively. the dividend was paid in full on other post-employment benefits amendment to the MCB, which Through the TSR programs, July 15, 2013. (“OPEB”) and early retirement is mandatorily convertible into certain operating subsidiaries obligations. For additional preferred shares of such subsidiary, of ArcelorMittal surrender On February 7, 2014, information with respect to the was executed on November 20, the control, risks and benefits ArcelorMittal’s Company’s pension plan and OPEB 2015. The mandatory conversion associated with the accounts announced a gross dividend liabilities, including a breakdown date of the bond has been receivable sold; therefore, the payment of $0.20 per share. The by region and by type of plan, extended to January 31, 2018. amount of receivables sold is dividend was approved by the see note 7.2 to the consolidated The other main features of recorded as a sale of financial shareholders at the annual general financial statements the MCB remain unchanged. assets and the balances are meeting of shareholders held on The bond was privately placed removed from the consolidated May 8, 2014, and the dividend was with a Luxembourg affiliate of statements of financial position paid in full on July 15, 2014. Credit Agricole Corporate and at the moment of sale. The total Investment Bank and is not listed. amount of receivables sold under On February 13, 2015, In connection with the extension TSR programs and derecognized ArcelorMittal’s Board of Directors of the conversion date of the MCB, in accordance with IAS 39 for the announced a gross dividend ArcelorMittal also extended the years ended 2015, 2014 and 2013 payment of $0.20 per share. The maturities of the equity-linked was $33.1 billion, $37.8 billion dividend was approved by the notes in which the proceeds of the and $35.4 billion, respectively shareholders at the annual general MCB issuances are invested. (with amounts of receivables sold meeting of shareholders held on converted to U.S. dollars at the May 5, 2015, and the dividend was Other loans and facilities monthly average exchange rate). paid in full on June 15, 2015. Expenses incurred under the TSR During the six months ended June programs (reflecting the discount On November 6, 2015, 30, 2014, ArcelorMittal entered granted to the acquirers of the ArcelorMittal’s Board of Directors into certain short-term committed accounts receivable) recognized proposed the suspension of the bilateral credit facilities. The in the consolidated statements dividend for the financial year facilities were extended in 2015. of operations for the years ended 2015. This proposal is subject to As of December 31, 2015, the December 31, 2015, 2014 and 2013 shareholder approval at the annual facilities, totalling approximately were $116 million, $150 million general meeting to be held on $0.8 billion, remain fully available. and $172 million, respectively. May 4, 2016. The Company has indicated that a dividend will not On June 10, 2014, ArcelorMittal Earnings distribution be proposed until its leverage has entered into an agreement further improved from what it will for financing with a financial In light of the downturn in be following the proposed $3.0 institution for $1.0 billion. The global economic conditions that billion rights offering and sale of financial institution had the right commenced in September 2008, Gestamp. to request early repayment once ArcelorMittal’s Board of Directors per year beginning in February recommended on February 10, ArcelorMittal held 8,581,090 shares 2015 until the final maturity on 2009 a reduction of the annual in treasury as of December 31, April 20, 2017. On February 13, dividend in 2009 to $0.75 per 2015, as compared to 11,018,413 2015, the Company elected to share (with quarterly dividend shares as of December 31, 2014. make an early repayment of such payments of $0.1875) from $1.50 As of December 31, 2015, the financing. per share previously. The dividend number of shares held by the policy was approved by the annual Company in treasury represented True sale of receivables (“TSR”) general meeting of shareholders approximately 0.52% of the programs on May 12, 2009, and was also Company’s total issued share maintained in 2010, 2011 and capital. The Company has established 2012. a number of programs for sales Pension/OPEB liabilities without recourse of trade accounts In view of the continued receivable to various financial challenging global economic The defined benefit liabilities for institutions (referred to as True conditions affecting the employee benefits decreased by Sale of Receivables (“TSR”)) for Company’s business in 2013 $0.8 billion, from $9.9 billion as of an aggregate amount of $5,254 and its priority to deleverage, December 31, 2014 to $9.1 billion million as of December 31, 2015. ArcelorMittal’s Board of Directors as of December 31, 2015. The main This amount represents the recommended on May 7, 2013 a effects for ArcelorMittal are related maximum amount of unpaid further reduction of the annual to the appreciation of the U.S. receivables that may be sold and dividend to $0.20 per share from Dollar against the major currencies outstanding at any given time. $0.75 per share in 2012. The (mainly EUR and CAD) and the 28 Management report

Sources and Uses of Cash

Years ended December 31, 2015, 2014 and 2013

The following table presents a summary of cash flow of ArcelorMittal:

Summary of Cash Flow For the year endend December 31, (in $ millions) 2015 2014 2013 Net cash provided by operating activities 2,151 3,870 4,296 Net cash used in investing activities (2,170) (3,077) (2,877) Net cash (used in) provided by financing activities 395 (2,750) 241

Net cash provided by operating average number of rotation days Net cash used in investing expansion in Monlevade; rebar activities (18 days as compared to 22 days) activities was $3.1 billion for the and meltshop expansion in Juiz de combined with lower sales and year ended December 31, 2014 Fora; construction of a new rolling For the year ended December steel selling prices. as compared to $2.9 billion for mill in Acindar and construction of 31, 2015, net cash provided by the year ended December 31, a heavy gauge galvanizing line to operating activities decreased Net cash used in investing 2013. This increase is mainly optimize galvanizing operations to $2.2 billion, as compared with activities related to capital expenditure in ArcelorMittal . In 2013, $3.9 billion for the year ended which amounted to $3.7 billion capital expenditure of $3.5 billion December 31, 2014, mainly due Net cash used in investing for the year ended December 31, included $2.4 billion related to to lower operating working activities was $2.2 billion for the 2014 as compared to $3.5 billion maintenance (including health and capital release. As a result of stable year ended December 31, 2015 as for the year ended December safety investments) and operating working capital with compared to $3.1 billion for the 31, 2013. Capital expenditures $1.1 billion dedicated to growth rotation days remaining fairly year ended December 31, 2014. in 2014 were mainly related to projects mainly in mining. constant at 50 for the year ended This decrease is mainly related to blast furnace relining in South December 31, 2015 and 51 for the a decrease in capital expenditures Africa, Ukraine, Kazakhstan and In 2016, capital expenditure is year ended December 31, 2014, which amounted to $2.7 billion for the US. Net inflows from other expected to be approximately net cash provided by operating the year ended December 31, 2015 investing activities amounted to $2.4 billion. activities for the year ended as compared to $3.7 billion for the $0.6 billion, including an inflow December 31, 2015 included a year ended December 31, 2014. of $0.6 billion relating to various Net cash (used in) provided by marginal increase of $31 million Net inflows from other investing disposals ($144 million from the financing activities in working capital (consisting of activities amounted to $0.5 billion sale of the Company’s 78% stake inventories plus trade accounts including an inflow of $0.2 billion in ATIC, preliminary proceeds of Net cash provided by financing receivable less trade accounts for the sale of tangible assets $39 million for the sale of the steel activities was $0.4 billion for the payable), including a $0.3 billion (including the Liberté building), cord business, $49 million relating year ended December 31, 2015, decrease in accounts receivable $0.1 billion from the exercise of to the sale of Circuit Foil and $389 as compared to net cash used and $0.9 billion decrease in the fourth put option on Hunan million related to proceeds from in financing activities of $2.8 inventories, partially offset by a Valin shares and $0.1 billion for the sale of the Company’s 50% billion in 2014. The decrease in decrease in trade payables of $1.3 cash collateral received. In 2015, interest in Gallatin) and $133 cash used in financing activities billion. capital expenditure of $2.7 billion million of proceeds from the was primarily due to $3.8 billion included $2.2 billion related to exercise of the second and third in proceeds from the issuance For the year ended December non-growth projects (including put option in Hunan Valin shares of short and long-term debt 31, 2014, net cash provided by health and safety investments) (cash proceeds from the fourth partly offset by payments of $3.0 operating activities decreased and $0.5 billion dedicated to put option were received in the billion for short and long-term to $3.9 billion, as compared with growth projects mainly in Mining. first quarter of 2015). In addition, debt. Proceeds included receipts $4.3 billion for the year ended ArcelorMittal’s major capital net inflows from other investing from the issuance of debenture December 31, 2013, mainly expenditures in the year ended included an outflow of $258 loans amounting to $2.6 billion, because of lower operating December 31, 2015 included the million relating to the acquisition including $2.1 billion related to working capital release. The following major projects: wire of a 50% interest in Calvert. In the issuance of Notes under the net cash provided by operating rod production expansion in 2014, capital expenditure of Company’s Euro Medium Term activities for the year ended Monlevade; the construction of a $3.7 billion included $2.8 billion Notes Programme (€750 million December 31, 2014 was positively heavy gauge galvanizing line to related to maintenance (including 3.125% Notes due January 14, affected by a $0.4 billion decrease optimize galvanizing operations health and safety investments) 2022, €400 million Floating Rate in working capital (consisting of in ArcelorMittal Dofasco rebar; and $0.9 billion dedicated to Notes due April 9, 2018, €500 inventories plus trade accounts the meltshop expansion in Juiz growth projects mainly in Mining. million 3.00% Notes due April 9, receivable less trade accounts de Fora; the HRM extension and ArcelorMittal’s major capital 2021 and CHF 225 million 2.5% payable), including a $0.5 billion HDG increase at ArcelorMittal expenditures in the year ended Notes due July 3, 2020) and $1 decrease in accounts receivable Krawkow; construction of a new December 31, 2014 included billion in proceeds from the which was partially offset by a $0.1 rolling mill in Acindar and the the following major projects: issuance of $500 million 5.125% billion increase in inventories. The expansion project in Liberia. See Liberia greenfield mining project; Notes due June 1, 2020 and $500 decrease in accounts receivable “Capital expenditure projects” for a capacity expansion in finished million 6.125% Notes due June 1, was primarily related to a lower summary of the Liberia projects. products, wire rod production 2025. Payments mainly include the Management report 29

repayment of a $1.0 billion loan Equity Looking Statements”. See also year 2016 capital expenditure is with a financial institution and the “Key factors affecting results of expected to be approximately redemption of the Company’s $1 Equity attributable to the equity operations”. $2.4 billion as compared to $2.7 billion 3.75% Unsecured Notes holders of the parent decreased billion in full-year 2015), lower due August 5, 2015, and its $500 to $25.3 billion at December 31, Outlook interest expenses (full-year 2016 million 3.75% notes due March 2015, as compared to $42.1 billion net interest expenses are expected 1, 2016, prior to their scheduled at December 31, 2014, primarily According to ArcelorMittal’s to be lower at approximately maturity. due to a $8.2 billion decrease in estimates, global ASC declined by $1.1 billion as compared to $1.3 the foreign exchange translation 2.2% in 2015 as compared to 2014. billion in full-year 2015, due to net Dividends paid during the year reserve as a result of the ArcelorMittal expects stabilization debt reductions and lower cash ended December 31, 2015 were depreciation of most currencies in 2016. By region: Driven by a payments for interest following $0.4 billion, including $331 against the U.S. dollar, $0.1 billion significant destock, ASC in the U.S. the maturity of the Mandatorily million paid to ArcelorMittal of recognized actuarial losses, declined by 9.6% in 2015. However, Convertible Notes in January shareholders and $85 million paid a $0.3 billion decrease in the underlying demand continues to 2016); no dividend in respect of to non-controlling shareholders in revaluation reserve on derivative expand and due to the expected the 2015 financial year; and lower subsidiaries. instruments and available-for-sale absence of a further destock in cash payments in respect of taxes. securities, the net loss attributable 2016, ArcelorMittal expects ASC Net cash used in financing to the equity holders of the parent in the US to grow by +3% to 4% These actions and developments activities was $2.8 billion for the of $7.9 billion and dividend above 2015 levels, despite an are intended to enable the year ended December 31, 2014, payments of $0.3 billion. See note expected further decline in Oil Company to reduce net debt and as compared to net cash provided 10 to ArcelorMittal’s consolidated Country Tubular Goods demand. maintain strong liquidity. by financing activities of $0.2 financial statements for the year ArcelorMittal expects the pick-up billion in 2013. The increase in cash ended December 31, 2015. in underlying European demand Disclosures about market risks used in financing activities was to continue but apparent demand primarily due to payments of $6.5 Equity attributable to the equity is expected to be modest at +0% ArcelorMittal is exposed to a billion including a €360 million holders of the parent decreased to +1% in 2016 (versus growth of number of different market risks bond repayment, a $136 million to $42.1 billion at December 31, 3.4% in 2015) as the high level of arising from its normal business bond repayment, €1.25 billion for 2014, as compared to $49.8 billion imports in the fourth quarter of activities. Market risk is the the 7.25% convertible bonds due at December 31, 2013, primarily 2015 have raised inventory levels possibility that changes in raw April 1, 2014, $800 million for the due to a $4.7 billion decrease in particularly in Southern Europe. materials prices, foreign currency 5.00% convertible bonds due May the foreign exchange translation Despite declining 15.6% in 2015, exchange rates, interest rates, 15, 2014, redeemed subordinated reserve as a result of the Brazil ASC is expected to decline base metal prices (zinc, nickel, perpetual capital securities for depreciation of most currencies further, albeit slower at -6% to aluminum and tin) and energy $657 million and $1.25 billion for against the U.S. dollar, $1.4 billion -7% in 2016 as the economy prices (oil, natural gas and power) the early redemption of the 9% of recognized actuarial losses, remains mired in recession. With will adversely affect the value of Notes due February 15, 2015 and the redemption of subordinated the ongoing recession in Russia ArcelorMittal’s financial assets, the 3.75% Notes due February perpetual capital securities for $0.7 impacted by weak oil prices, CIS liabilities or expected future cash 25, 2015. These payments were billion, the net loss attributable to demand is expected to decline flows. partly offset by the receipts of the equity holders of the parent -5% to -6% (versus a decline of $4.3 billion, including $1.0 billion of $1.1 billion and dividend 8.0% in 2015). In China, we expect The fair value information financing, proceeds from the payments of $0.3 billion. ongoing weakness in the real presented below is based on issuance of €750 million 3.00% estate sector to have a negative the information available to Notes due March 25, 2019, $805 Research and Development, impact, and expect steel demand management as of the date of million from the issuance of €600 Patents and Licenses decline of around -1% (from -4.3% the consolidated statements million 2.875% Notes due July decline in 2015). of financial position. Although 6, 2020 under the Company’s €3 Costs relating to research and ArcelorMittal is not aware of any billion wholesale Euro Medium development, patents and Despite an expected difficult start factors that would significantly Term Notes Programme and licenses were not significant as a to 2016, due to order book and affect the estimated fair value proceeds from a new 3-year $300 percentage of sales. Research and the time lag required for lower amounts, such amounts have not million financing provided by EDC development costs expensed (and raw material costs to positively been comprehensively revalued (Export Development Canada). included in selling, general and impact cost of sales, a combination for purposes of this annual report administration expenses) in 2013, of Company actions and known since that date, and therefore, Dividends paid during the year 2014 and 2015 amounted to $270 developments is expected to the current estimates of fair value ended December 31, 2014 were million, $259 million and $227 support operating performance may differ significantly from the $0.5 billion, including $328 million million, respectively. in the full-year 2016, at prevailing amounts presented below. The paid to ArcelorMittal shareholders, raw material costs and spot steel estimated fair values of certain $22 million paid to holders of Trend Information spreads. financial instruments have been subordinated perpetual capital determined using available securities and $108 million paid All of the statements in this “Trend The Company also targets a market information or other to non-controlling shareholders in Information” section are subject to reduction of its cash requirements valuation methodologies that subsidiaries. Dividends paid in the and qualified by the information in 2016 in excess of $1 billion require considerable judgment year ended December 31, 2013 set forth under the “Cautionary as compared to 2015, through in interpreting market data and were $0.4 billion. Statement Regarding Forward- lower capital expenditures (full- developing estimates. 30 Management report

See note 6 to ArcelorMittal’s transactions with numerous with all ArcelorMittal trading ArcelorMittal faces transaction consolidated financial statements counterparties, mainly and counterparties. risk, where its businesses generate for quantitative information financial institutions, as well as sales in one currency but incur about risks relating to financial brokers, major energy producers Currency exposure costs relating to that revenue instruments, including financial and consumers. in a different currency. For instruments entered into ArcelorMittal seeks to manage example, ArcelorMittal’s non-U.S. pursuant to the Company’s risk As part of its financial risk each of its entities’ exposure to its subsidiaries may purchase raw management policies. management activities, operating currency. For currency materials, including iron ore and ArcelorMittal uses derivative exposure generated by activities, coking coal, in U.S. dollars, but Risk management instruments to manage its the conversion and hedging of may sell finished steel products in exposure to changes in interest revenues and costs in foreign other currencies. Consequently, an ArcelorMittal has implemented rates, foreign exchange rates currencies is typically performed appreciation of the U.S. dollar will strict policies and procedures to and commodities prices. These using currency transactions on the increase the cost of raw materials, manage and monitor financial instruments are principally interest spot market and forward market. thereby negatively impacting the market risks. Organizationally, rate, currency and commodity For some of its business segments, Company’s operating margins, supervisory functions are swaps, spots and forwards. ArcelorMittal hedges future cash unless the Company is able to pass separated from operational ArcelorMittal may also use futures flows. along the higher cost in the form functions, with proper segregation and options contracts. of higher selling prices. of duties. Financial market Because a substantial portion activities are overseen by the CFO, Counterparty risk of ArcelorMittal’s assets, ArcelorMittal faces translation risk, the Corporate Finance and Tax liabilities, sales and earnings which arises when ArcelorMittal Committee and the GMB. ArcelorMittal has established are denominated in currencies translates the financial statements detailed counterparty limits to other than the U.S. dollar (its of its subsidiaries, denominated All financial market risks are mitigate the risk of default by its reporting currency), ArcelorMittal in currencies other than the managed in accordance with counterparties. The limits restrict has exposure to fluctuations in U.S. dollar for inclusion in the Treasury and Financial Risk the exposure ArcelorMittal may the values of these currencies ArcelorMittal’s consolidated Management Policy. These risks are have to any single counterparty. relative to the U.S. dollar. These financial statements. managed centrally through Group Counterparty limits are calculated currency fluctuations, especially Treasury by a group specializing taking into account a range of the fluctuation of the value of the The tables below illustrate the in foreign exchange, interest rate, factors that govern the approval U.S. dollar relative to the euro, impact of an appreciation and commodity, internal and external of all counterparties. The factors the Canadian dollar, Brazilian real, a depreciation of the U.S. dollar funding and cash and liquidity include an assessment of the South African rand, Kazakh tenge of 10% against the euro, on the management. counterparty’s financial soundness and Ukrainian hryvnia, as well conversion of the net debt of and its ratings by the major rating as fluctuations in the currencies ArcelorMittal into U.S. dollars All financial market hedges are agencies, which must be of a high of the other countries in which as of December 31, 2015 and governed by ArcelorMittal’s quality. Counterparty limits are ArcelorMittal has significant December 31, 2014. The impact Treasury and Financial Risk monitored on a periodic basis. operations and/or sales, could on net debt denominated in a Management Policy, which have a material impact on its currency different than the euro, is includes a delegated authority All counterparties and their results of operations. computed based on historical data and approval framework, sets respective limits require the prior of how such currency would move the boundaries for all hedge approval of the Corporate Finance against the U.S. dollar when the activities and dictates the required and Tax Committee. Standard U.S. dollar appreciates/depreciates approvals for all Treasury activities. agreements, such as those 10% against the euro. A positive Hedging activity and limits published by the International sign means an increase in the net are monitored on an ongoing Swaps and Derivatives Association, debt. basis. ArcelorMittal enters into Inc. (ISDA) are negotiated

Impact on net debt translation of a 10% appreciation of the Impact on net debt translation of a 10% depreciation of the U.S. Currency U.S. dollar against the euro dollar against the euro in $ equivalent in $ equivalent In 2015 (in millions) (in millions) Brazilian real (13) 17 Canadian dollar 16 (18) Euro (420) 420 Swiss Franc (8) 8 Ukrainian hryvnia 9 (13) South African rand 1 (1) Other 8 (8) Management report 31

Impact on net debt translation of a 10% appreciation of the Impact on net debt translation of a 10% depreciation of the Currency U.S. dollar against the euro U.S. dollar against the euro in $ equivalent in $ equivalent (in millions) (in millions) In 2014 Brazilian real (20) 24 Euro (341) 341 Ukrainian hryvnia 10 (17) Other 15 (18)

Derivative instruments Interest rate sensitivity Commodity price risk In respect of non-exchange traded commodities, ArcelorMittal ArcelorMittal uses derivative Cash balances, which are primarily ArcelorMittal utilizes a number of is exposed to volatility in the instruments to manage its composed of and U.S. exchange-traded commodities prices of raw materials such exposure to movements in interest dollars, are managed according in the steel-making process. In as iron ore (which is generally rates, foreign exchange rates and to the short term (up to one year) certain instances, ArcelorMittal is correlated with steel prices with commodity prices. Changes in the guidelines established by senior the leading consumer worldwide a time lag) and coking coal. fair value of derivative instruments management on the basis of a of certain commodities. In This exposure is almost entirely are recognized in the consolidated daily interest rate benchmark, some businesses and in certain managed through long-term statements of operations or in primarily through short-term situations, ArcelorMittal is able contracts, however some hedging equity according to nature and currency swaps, without to pass this exposure on to its of iron ore exposures is made effectiveness of the hedge. modifying the currency exposure. customers. The residual exposures through derivative contracts. For are managed as appropriate. a more detailed discussion of Derivatives used are non- Interest rate risk on debt ArcelorMittal’s iron ore and coking exchange-traded derivatives such Financial instruments related to coal purchases, see “Raw materials”. as over-the-counter swaps, options ArcelorMittal’s policy consists of commodities (base metals, energy, and forward contracts. incurring debt at fixed and floating freight and emission rights) are interest rates, primarily in U.S. utilized to manage ArcelorMittal’s For the Company’s tabular dollars and euros according to exposure to price fluctuations. presentation of information general corporate needs. Interest related to its market risk sensitive rate and currency swaps are Hedges in the form of swaps and instruments, please see note utilized to manage the currency options are utilized to manage 6 to the consolidated financial and/or interest rate exposure of the exposure to commodity price statements. the debt. fluctuations. For the Company’s tabular presentation of the fair values of its For the Company’s tabular short and long term debt, please presentation of information see note 6 to the consolidated related to its market risk sensitive financial statements. instruments, please see note 6 to the consolidated financial statements. 32 Management report

Group operational structure ArcelorMittal is a holding company with no business operations of its own. All of ArcelorMittal’s significant operating subsidiaries are indirectly owned by ArcelorMittal through intermediate holding companies. The following chart represents the operational structure of the Company, including ArcelorMittal’s significant operating subsidiaries and not its legal or ownership structure.

ArcelorMittal

NAFTA Europe

ArcelorMittal ArcelorMittal AMFCE ArcelorMittal ArcelorMittal Mexico USA Belgium Belval & Differdange

ArcelorMittal ArcelorMittal ArcelorMittal ArcelorMittal ArcelorMittal Las Truchas Dofasco España Gipuzkoa

ArcelorMittal ArcelorMittal ArcelorMittal ArcelorMittal Ostrava Duisburg Poland

ArcelorMittal ArcelorMittal ArcelorMittal Méditerranée Galati

Industeel ArcelorMittal ArcelorMittal Belgium Eisenhüttenstadt Atlantique & Lorraine

Industeel France Management report 33

ArcelorMittal

Brazil ACIS Mining

ArcelorMittal Acindar ArcelorMittal ArcelorMittal ArcelorMittal ArcelorMittal Brazil South Africa Mines Canada Kryvyi Rih

ArcelorMittal ArcelorMittal ArcelorMittal ArcelorMittal Temirtau International Termitau Liberia Luxembourg 34 Management report

The following table identifies each significant operating subsidiary of ArcelorMittal, including the country of incorporation. Please refer to note 2.2.1 of the consolidated financial statements for the ownership percentages of these subsidiaries. Unless otherwise stated, the subsidiaries as listed have share capital consisting solely of ordinary shares, which are held directly or indirectly by the Company and the proportion of ownership interests held equals to the voting rights held by the Company.

Name of Subsidiary Abbreviation Country NAFTA ArcelorMittal Dofasco Inc.1 ArcelorMittal Dofasco Canada ArcelorMittal Mexico S.A. de C.V. ArcelorMittal Mexico Mexico ArcelorMittal USA LLC ArcelorMittal USA USA ArcelorMittal Las Truchas, S.A. de C.V. ArcelorMittal Las Truchas Mexico ArcelorMittal Montreal Inc2 ArcelorMittal Montreal Canada

Brazil and neighboring countries (“Brazil”) ArcelorMittal Brasil S.A. ArcelorMittal Brasil Brazil Acindar Industria Argentina de Aceros S.A. Acindar Argentina

Europe ArcelorMittal Atlantique et Lorraine S.A.S. ArcelorMittal Atlantique & Lorraine France ArcelorMittal Belgium N.V. ArcelorMittal Belgium Belgium ArcelorMittal España S.A. ArcelorMittal España Spain ArcelorMittal Flat Carbon Europe S.A. AMFCE Luxembourg ArcelorMittal Galati S.A. ArcelorMittal Galati Romania ArcelorMittal Poland S.A. ArcelorMittal Poland Poland Industeel Belgium S.A. Industeel Belgium Belgium Industeel France S.A. Industeel France France ArcelorMittal Eisenhüttenstadt GmbH ArcelorMittal Eisenhüttenstadt Germany ArcelorMittal Bremen GmbH ArcelorMittal Bremen Germany ArcelorMittal Méditerranée S.A.S. ArcelorMittal Méditerranée France ArcelorMittal Belval & Differdange S.A. ArcelorMittal Belval & Differdange Luxembourg ArcelorMittal Hamburg GmbH ArcelorMittal Hamburg Germany ArcelorMittal Gipúzkoa S.L. ArcelorMittal Gipúzkoa Spain ArcelorMittal Ostrava a.s. ArcelorMittal Ostrava Czech Republic ArcelorMittal Duisburg GmbH ArcelorMittal Duisburg Germany

Africa and Commonwealth of Independent States (“ACIS”) ArcelorMittal South Africa Ltd. ArcelorMittal South Africa South Africa JSC ArcelorMittal Temirtau ArcelorMittal Temirtau Kazakhstan PJSC ArcelorMittal Kryvyi Rih ArcelorMittal Kryvyi Rih Ukraine ArcelorMittal International Luxembourg S.A. ArcelorMittal International Luxembourg Luxembourg

Mining ArcelorMittal Mines Canada Inc. ArcelorMittal Mines Canada Canada Arcelormittal Liberia Ltd Arcelormittal Liberia Liberia JSC ArcelorMittal Temirtau ArcelorMittal Temirtau Kazakhstan PJSC ArcelorMittal Kryvyi Rih ArcelorMittal Kryvyi Rih Ukraine

1 As of January 1, 2016, the business formerly carried on by ArcelorMittal Dofasco Inc. is now carried on by ArcelorMittal Dofasco G.P. 2 As of January 1, 2016, the business formerly carried on by ArcelorMittal Montreal Inc. is now carried on by ArcelorMittal Long Products Canada G.P. Management report 35

Key transactions and events in R&D, CCM and global automotive steel products to India’s rapidly is unconditional and payment 2015 • Jim Baske, Executive vice growing automotive sector. is expected to be made president, CEO ArcelorMittal to ArcelorMittal within six ArcelorMittal’s principal NAFTA Flat Rolled Recent developments months. In addition to the cash investments, acquisitions and •Henri Blaffart, Executive vice consideration, ArcelorMittal disposals, and other key events president, Group head of HR and • On February 9, 2016, ArcelorMittal will receive a payment of €10 that occurred during the year corporate services published a convening notice for million for the 2015 dividend. ended December 31, 2015 are • Jefferson de Paula, Executive vice an extraordinary general meeting ArcelorMittal will continue summarized below. president, CEO of ArcelorMittal of shareholders to be held on its supply relationship with South America Long Thursday, March 10, 2016 in order Gestamp through its 35% • During 2015, ArcelorMittal • Geert van Poelvoorde, Executive to approve certain matters in shareholding in Gonvarri Steel completed several financing vice president, CEO of connection with the Company’s Industries, a sister company of transactions. Please refer to “— ArcelorMittal Europe Flat announced intention to increase Gestamp. ArcelorMittal sells Liquidity and capital resources— • Simon Wandke, Executive vice its capital through a rights issue coils to Gonvarri Steel Industries Financings” for a summary of the president, CEO of ArcelorMittal with shareholders benefiting for processing before they transactions. Mining from non-statutory preferential pass to Gestamp and other subscription rights on terms to customers. Further, ArcelorMittal • During 2015, ArcelorMittal • On October 7, 2015, ArcelorMittal be determined by the Company will continue to have a board completed several divestment announced it reached an outline based on market practice and presence in Gestamp, collaborate and other investment agreement for restructuring the conditions. Among other things, in automotive R&D and remain transactions. Please refer shareholding of ArcelorMittal the proposals to be voted include its major steel supplier. In 2015, to notes 2.3 and 2.5 to Algeria, ArcelorMittal Pipes and a reduction in the par value per Gestamp contributed $57 million the consolidated financial Tubes Algeria and ArcelorMittal share to €0.10 and an increase in to income (loss) from investments statements within this report for Tebessa. As part of the the authorized share capital to in associates, joint ventures and a summary of the transactions. restructuring, ArcelorMittal will €3,199,585,721.30. other investments and paid a transfer its minority shareholding dividend of $15 million. • On December 16, 2015, in both ArcelorMittal Algeria • On February 5, 2016, ArcelorMittal ArcelorMittal announced a new and ArcelorMittal Tebessa as announced a proposed capital • On January 15, 2016, organizational structure for the well as its majority shareholding increase of approximately $3 ArcelorMittal South Africa Americas and group finance. in ArcelorMittal Pipes & Tubes billion subject to shareholder completed a rights offering fully The Group Management Board Algeria to the state-owned approval by way of a rights issue underwritten by ArcelorMittal. (“GMB”), which was established Algerian company IMETAL. structured as non-statutory The total cash proceeds to ensure a smooth integration ArcelorMittal will continue preferential subscription rights amounted to R4.5 billion. following the creation of its technical support for the for ArcelorMittal shareholders. ArcelorMittal subscribed to ArcelorMittal, was replaced implementation of the El Hadjar The Mittal family has committed the capital increase through with a more flexible structure Complex development plan. to take up its pro-rata entitlement repayment of an outstanding effective January 1, 2016. The corresponding to approximately intragroup loan of R3.2 billion CEO office, comprised of the CEO • On July 10, 2015, ArcelorMittal $1.1 billion. ArcelorMittal and an additional cash injection and CFO, will work directly with a announced that Simon Wandke has entered into a standby of approximately R460 million. team of seven executive officers, was nominated Executive Vice underwriting commitment The intragroup loan is being who collectively encompass President of ArcelorMittal and with three banks acting as joint repaid in two tranches; the first the key regions and corporate promoted to Chief Executive global coordinators, pursuant has been repaid and the second functions of ArcelorMittal. Officer of ArcelorMittal Mining, to which the latter undertook to is expected to be paid in 2016. In addition, the Company with immediate effect. Simon underwrite the capital increase As a result of the rights issue, announced that Lou Schorsch, replaced Bill Scotting, who left for the remaining amount, ArcelorMittal’s shareholding senior executive vice president, the Company to pursue other subject to customary conditions. in ArcelorMittal South Africa member of the GMB and CEO of opportunities. As the subscription price will be increased from 52% to 71%. ArcelorMittal Americas will retire denominated in euros, the capital from the Company, effective end • On May 22, 2015, ArcelorMittal increase amount will correspond • On January 13, 2016, of February 2016. Please refer and the Steel Authority of to the euro equivalent of $3 ArcelorMittal announced to “—Corporate governance” India Limited (“SAIL”), India’s billion upon the rights offering the issuance of 137,967,116 for a discussion of the new leading steel company, signed a launch. The actual amount of new ordinary shares of the management structure resulting Memorandum of Understanding the capital increase in USD will Company upon conversion of from this announcement. to set up an automotive steel depend on the exchange rate at the 88,182,131 outstanding manufacturing facility under closing. 6% Mandatorily Convertible The seven executive officers a joint venture arrangement Subordinated Notes due January include: in India. This was the first step • On February 1, 2016, ArcelorMittal 15, 2016. Following this issuance, toward creating the proposed completed the sale of its 35% the share capital of the Company • Davinder Chugh, Senior executive joint venture which will construct stake in Gestamp Automoción is €7,453,441,006.98 represented vice president, CEO of Africa and a state-of-the-art cold rolling (“Gestamp”) to the majority by 1,803,359,338 shares the CIS mill and other downstream shareholder, the Riberas family, • Brian Aranha, Executive vice finishing facilities in India that will for total cash consideration of president, Head of strategy, CTO, offer technologically advanced €875 million. The transaction 36 Management report

Corporate governance Remuneration and Corporate At the same meeting, the Mr. Lewis B. Kaden is the Lead Governance Committee (“ARCG shareholders re-elected Mr. Independent Director. In the The “Corporate Governance” Committee”) are each comprised Narayanan Vaghul, Mr. Wilbur Ross most recent assessment of the section of our Annual Report 2015 exclusively of independent and Mr. Tye Burt for a new term of Company’s leadership structure, contains a full overview of our directors. three years each. The shareholders the ARCG Committee reviewed corporate governance practices. also elected Mrs. Karyn Ovelmen the key duties and responsibilities The annual general meeting of for a three-year term. of the Company’s Chairman and Directors and senior management shareholders on May 5, 2015 Chief Executive Officer and its Lead acknowledged the expiration The Board of Directors is Independent Director as follows: Board of Directors of the terms of office of Mr. composed of 12 directors, of which ArcelorMittal places a strong Narayanan Vaghul, Mr. Wilbur Ross 11 are non-executive directors and emphasis on corporate and Mr. Tye Burt. eight are independent directors. governance. ArcelorMittal has The Board of Directors comprises eight independent directors on its only one executive director, Mr. 12 member Board of Directors. Lakshmi N. Mittal, the Chairman The Board’s Audit & Risk and Chief Executive Officer of Committee and Appointments, ArcelorMittal.

Chairman Lead Independent Director * Chairs the Board of Directors and shareholders’ meetings * Provides independent leadership to the Board of Directors * Works with the Lead Independent Director to set agenda for the Board of Directors and review schedule of the meetings * Presides at executive sessions of independent directors * Advises the Chairman of any decisions reached and suggestions made at the executive * Serves as a public face of the Board of Directors and of the Company sessions, as appropriate * Serves as a resource for the Board of Directors * Coordinates the activities of the other independent directors * Guides discussions at the Board of Directors meetings and encourages directors to * Oversees Board of Directors' governance processes, including succession planning and express their positions other governance-related matters * Communicates significant business developments and time-sensitive matters to the Board of Directors * Liaison between the Chairman and the other independent directors * Is responsible for managing day-to-day business and affairs of the Company * Calls meetings of the independent directors when necessary and appropriate * Interacts with the Group Management Board (the “GMB”) of the Company and frequently * Leads the Board of Directors’ self-evaluation process and such other duties as are meets stakeholders and provide feedback to the Board of Directors assigned from time to time by the Board of Directors

No member of the Board of Directors, including the executive director, has entered into any service contract with ArcelorMittal or any of its subsidiaries providing for benefits upon the end of his or her service on the Board of Directors. All non-executive Directors of the Company signed an Appointment Letter with the Company, which confirms the conditions of their appointment including compliance with a non- compete provision, the 10 Principles of Corporate Governance of the Luxembourg Stock Exchange and the Company’s Code of Business Conduct.

The members of the Board of Directors are set out below:

Name Age4 Date of joining the Board5 End of Term Position within ArcelorMittal Chairman of the Board of Directors Lakshmi N. Mittal 65 May 1997 May 2017 and Chief Executive Officer Lewis B. Kaden 1 2 3 73 April 2005 May 2017 Lead Independent Director Vanisha Mittal Bhatia 35 December 2004 May 2016 Director Narayanan Vaghul1 3 79 July 1997 May 2018 Director Wilbur L. Ross1 3 78 April 2005 May 2018 Director Jeannot Krecké 65 January 2010 May 2016 Director Antoine Spillmann 2 3 52 October 2006 May 2017 Director Suzanne P. Nimocks2 3 56 January 2011 May 2016 Director Bruno Lafont1 3 59 May 2011 May 2017 Director Tye Burt 2 3 58 May 2012 May 2018 Director Michel Wurth 61 May 2014 May 2017 Director Karyn Ovelmen 1 3 52 May 2015 May 2018 Director

1 Member of the Audit & Risk Committee. 2 Member of the Appointments, Remuneration and Corporate Governance Committee. 3 Non-executive and independent director. 4 Age as of December 31, 2015. 5 Date of joining the Board of ArcelorMittal or, if prior to 2006, its predecessor NV. Management report 37

Henk Scheffer is the Company most global steel manufacturer. Lewis B. Kaden, 73, Lead Narayanan Vaghul, 79, is non- Secretary and, accordingly, acts as More recently, Mr. Mittal has Independent Director of executive and independent secretary of the Board of Directors. been leading ArcelorMittal’s ArcelorMittal, member of the Audit Director of ArcelorMittal as well expansion of its mining business & Risk Committee and chairman of as the chairman of the Audit & Lakshmi N Mittal, 65, is the through significant brownfield the Appointments, Remuneration Risk Committee. He has over 50 Chairman and Chief Executive and greenfield growth. In 1996, Mr. and Corporate Governance years of experience in the financial Officer of ArcelorMittal. Mr. Mittal was awarded ‘Steelmaker Committee. He has approximately sector and was the Chairman Mittal started his career in steel of the Year’ by New Steel in the 40 years of experience in corporate of ICICI Bank Limited between in 1976 by founding Ispat Indo, a United States and in 1998 the ‘Willy governance, financial services, 2002 and April 2009. Previously, company that is still held privately Korf Steel Vision Award’ by World dispute resolution and economic he served as the Chairman of the by the Mittal family. He founded Steel Dynamics for outstanding policy. He is currently Senior Industrial Credit and Investment Mittal Steel Company (formerly vision, entrepreneurship, Adviser of TGG Group, the John Corporation of India, a long-term the LNM Group) in 1989 and leadership and success in global Harvey Gregory Lecturer on World credit development bank for 17 guided its strategic development, steel development. He was named Organization at Harvard University. years and, prior to that, served as culminating in the merger in Fortune magazine’s ‘European Mr. Kaden was Vice Chairman Chairman of the Bank of India and 2006 with Arcelor, to form the Businessman of the Year 2004’. of Citigroup between 2005 and Executive Director of the Central world’s largest steelmaker. He Mr. Mittal was awarded ‘Business 2013. Prior to that, he was a Bank of India. He also served for is widely recognized for the Person of 2006’ by the Sunday partner of the law firm Davis Polk brief periods as Consultant to leading role he has played in Times, ‘International Newsmaker & Wardwell, and served as Counsel the World Bank, the International restructuring the steel industry of the Year 2006’ by Time Magazine to the Governor of New Jersey, as Finance Corporation and the Asian towards a more consolidated and ‘Person of the Year 2006’ by the a Professor of Law at Columbia Development Bank. Mr. Vaghul and globalized model. Mr. Mittal for his outstanding University and as director of was also a visiting Professor at the is an active philanthropist and a business achievements. In January Columbia University’s Center for Stern Business School at New York member of various boards and 2007, Mr. Mittal was presented Law and Economic Studies. He has University and a Board member trusts, including chairman of with a Fellowship from King’s served as a director of Bethlehem of Mahindra & Mahindra. Mr. the board of and the College London, the college’s Steel Corporation for ten years Vaghul is Chairman of the Indian boards of Goldman Sachs and highest award. He also received and is currently Chairman of the Institute of Finance Management N.V (previously EADS NV). in 2007 the Dwight D. Eisenhower Board of Trustees of the Markle & Research and is also a Board He is a member of the Foreign Global Leadership Award, the Foundation and Vice Chairman member of Wipro, Piramal Investment Council in Kazakhstan, Grand Cross of Civil Merit from of the Board of Trustees of Asia Healthcare Limited and Apollo the World Economic Forum’s Spain and was named AIST Society. He is a member of the Hospitals. He was chosen as a International Business Council Steelmaker of the year. In January Council on Foreign Relations and Businessman of the Year in 1992 by and the World Steel Association’s 2008, Mr. Mittal was awarded the of the Trilateral Commission being Business India. He also received a Executive Committee. He also Padma Vibhushan, India’s second a moderator of the Business-Labor Lifetime Achievement Award from sits on the Board of Trustees of highest civilian honor, by the Dialogue. He is a Senior Fellow of the Economic Times. In 2009, he Cleveland Clinic in the United President of India. In September the Moussavar - Rahmani Center was awarded the Padma Bhushan, States. Mr. Mittal began his career 2008, Mr. Mittal was chosen for the on Business and Government at India’s third highest civilian honor. working in his family’s third ‘Forbes Lifetime Achievement the Harvard Kennedy School of Mr. Vaghul is a citizen of India. business in India, and has over Award’, which honors heroes of Government and Senior Fellow 35 years of experience working entrepreneurial capitalism and free of the Program on Corporate Wilbur L. Ross, Jr., 78, is a non- in steel and related industries. enterprise. In October 2010, he was Governance and the Center on the executive and independent In addition to spearheading the awarded World Steel Association’s Legal Profession at Harvard Law Director of ArcelorMittal and steel industry’s consolidation, he medal in recognition of his services School. Mr. Kaden is a citizen of the a member of the Audit & Risk championed the development of to the Association as its Chairman United States of America. Committee. He is also the integrated mini-mills and the use and also for his contribution to the Chairman of WL Ross Holding of (DRI) as a sustainable development of the Vanisha Mittal Bhatia, 35, is a Corporation which is listed on scrap substitute for steelmaking. global steel industry. In January non-independent Director of NASDAQ. He is Vice Chairman of Following the merger of Ispat 2013, Mr. Mittal was awarded with ArcelorMittal. She was appointed the Bank of Cyprus which is listed International and LNM Holdings a Doctor Honoris Causa by the as a member of the LNM Holdings on the Cyprus and Athens Stock to form Mittal Steel in December AGH University of Science and Board of Directors in June Exchanges and is a Director of Sun 2004, with the simultaneous Technology in Krakow, Poland. 2004. Ms. Vanisha Mittal Bhatia Bancorp (an “Over the Counter” acquisition of International Steel Mr. Mittal was born in Sadulpur in was appointed to Mittal Steel’s - OTC entity), and of Exco, which Group, he led the formation of Rajasthan, India on June 15, 1950. Board of Directors in December is listed on the New York Stock the world’s steel producer at the He graduated from St. Xavier’s 2004, where she worked on the Exchange. Mr. Ross has a number time. In 2006, he orchestrated College in Kolkata, India where he Procurement department. She of non-profit affiliations. He is on Mittal Steel and Arcelor’s merger received a Bachelor of Commerce joined Aperam in April 2011 and is the Board of the Yale School of to form ArcelorMittal. Mr. Mittal degree. Mr. Mittal is married to the Chief Strategy Officer. She has Management and the Harvard then led a successful integration Usha Mittal. They have a son, a Bachelor of Sciences from the Business School Dean’s Advisory of two large entities to firmly Aditya Mittal, and a daughter, European Business School. She is Board. Mr. Ross is Chairman of establish ArcelorMittal as one of Vanisha Mittal Bhatia. Mr. Mittal is a also the daughter of Mr. Lakshmi the Japan Society and of the the foremost industrial companies citizen of India. N. Mittal. Mrs. Mittal Bhatia is a Economic Studies Council of the in the world. The company citizen of India. Brookings Institution, of which he continues to be the largest and is also a Trustee. He is the President 38 Management report

of the American Friends of the Nul S.A. and Novenergia Holding firm’s Global Petroleum Practice, (Mouvement des Entreprises de Magritte Museum and a member Company S.A. Mr. Krecké is a Electric Power & Natural Gas France), the French Employers of the International Council of citizen of Luxembourg. Practice, Organization Practice, Association. He is a member of the the Musée des Arts Décoratifs. He and Risk Management Practice. Executive Committee of the World also is a Trustee of the Palm Beach Antoine Spillmann, 52, is a Ms. Nimocks chaired the Business Council for Sustainable Retirement Funds, the Palm Beach non-executive and independent Environmental Committee of the Development (WBCSD) and a Preservation Foundation and the Director of ArcelorMittal and a Greater Partnership, the Board member of the AFEP (French Palm Beach Civic Association. member of the Appointments, primary advocate of Houston’s large companies association). He Mr. Ross is a citizen of the United Remuneration and Corporate business community, until is also a Special Adviser to the States of America. Governance Committee. He is the December 31, 2010. She holds Mayor of Chongqing (China) and CEO and executive partner at the a Bachelor of Arts in Economics a Board Member of EDF. Born in Jeannot Krecké, 65, is a non- firm Bruellan Wealth Management; from Tufts University and a Masters 1956, Mr. Lafont is a graduate from executive and non-independent one of Switzerland’s leading in Business Administration from the Hautes Etudes Commerciales Director of ArcelorMittal. He independent asset management the Harvard Graduate School of business school (HEC 1977, started his university studies at the companies based in Geneva, Business. Ms. Nimocks is currently Paris) and the Ecole Nationale Université Libre de Bruxelles (ULB) Switzerland. He spends most of a Board Member for Encana d’Administration (ENA 1982, Paris). in Belgium in 1969, from where his time defending the rights of Corporation, Rowan Companies Mr. Lafont is a citizen of France. he obtained a degree in physical shareholders and investors in Plc, and Owens Corning, all listed and sports education. He decided quoted companies in Switzerland. companies. Encana is a major Tye Burt, 58, is a non-executive in 1983 to change professional He served for 5 years as vice- natural gas exploration and and independent Director of direction. His interests led him to president of the Swiss association production company, Rowan ArcelorMittal and a member of retrain in economics, accounting of asset managers. Mr. Spillmann Companies provides drilling the Appointments, Remuneration and taxation. He enrolled in is also a non-independent board services for the oil and gas and Corporate Governance various courses, in particular in member of Bondpartners SA industry and Owens Corning Committee. He was appointed the United States. Following the (“BPL”), Lechanche SA. BPL is a is a manufacturer of building President and Chief Executive legislative elections of June 13, Swiss financial services company products. In the non-profit sector, Officer of Corporation 2004, Mr. Krecké was appointed founded in 1972, authorized under she chairs the board of directors in March 2005. He held this Minister of the Economy and the law to trade securities and of the Houston Zoo and serves as position until August 1, 2012. Foreign Trade of Luxembourg on controlled by the Swiss Financial a Trustee of the Texas Children’s Kinross is listed on the New York July 13, 2004. Upon the return Market Supervisory Authority Hospital. Mrs. Nimocks is a citizen Stock Exchange and the Toronto of the coalition government (FINMA). BPL is also a member of of the United States of America. Stock Exchange. Mr. Burt was also formed by the Christian Social the Swiss Bankers Association, a member of the board of directors Party (CSV) and the Luxembourg member of the International Bruno Lafont, 59, is a non- of Kinross. Mr. Burt has broad Socialist Workers’ Party (LSAP) Capital Market Association and executive and independent experience in the global mining as a result of the legislative associated member of the Swiss Director of ArcelorMittal and industry, specializing in corporate elections of June 7, 2009, Mr. Stock Exchange. Leclanché is a a member of the Audit & Risk finance, business strategy and Krecké retained the portfolio 100 year old Swiss company that Committee. He began his career mergers and acquisitions. Prior of Minister of the Economy develops and produces energy at Lafarge in 1983 and has held to joining Kinross, he held the and Foreign Trade on July 23, storage systems using large- numerous positions in finance position of Vice Chairman and 2009. As of July 2004, Mr. Krecké format lithium-ion-cells. The and international operations Executive Director of Corporate represented the Luxembourg firm is quoted on the SIX Stock with the same company. In 1995, Development at Barrick Gold government at the Council of Exchange. Mr. Spillmann studied in Mr. Lafont was appointed Group Corporation. He was President Ministers of the EU in the Internal Switzerland and London, receiving Executive Vice President, Finance, of the Cartesian Capital Group Market and Industry sections of diplomas from the London and thereafter Executive Vice from 2000 to 2002; Chairman its Competitiveness configuration Business School in Investment President of the Gypsum Division of Deutsche Bank Canada and as well as in the Economic and Management and Corporate in 1998. Mr. Lafont joined Lafarge’s Deutsche Bank Securities Canada; Financial Affairs Council and Finance. Mr. Spillmann is a citizen General Management as Chief Global Managing Director of in the Energy section of its of Switzerland. Operating Officer between May Global Metals and Mining for Transport, Telecommunications 2003 and December 2005. Chief Deutsche Bank AG from 1997 and Energy configuration. He was Suzanne P. Nimocks, 56, is a Executive Officer in January 2006, to 2000; and Managing Director also a member of the Eurogroup non-executive and independent Bruno Lafont was appointed and Co-Head of the Global from July 2004 to June 2009. On Director of ArcelorMittal and a Chairman and Chief Executive Mining Group at BMO Nesbitt February 1, 2012, Mr. Krecké retired member of the Appointments, Officer in May 2007. In July 2015, Burns from 1995 to 1997, holding from government and decided to Remuneration and Corporate Bruno Lafont was appointed various other positions at BMO end his active political career in Governance Committee. She co-Chairman of the Board of Nesbitt Burns from 1986 to order to pursue a range of different was previously a director (senior Directors of LafargeHolcim and 1995. Mr. Burt is the Chairman of projects. Mr. Krecké is currently partner) with McKinsey & Honorary Chairman of Lafarge. Urthecast Corp., a small Canadian the CEO of Key International Company, a global management Mr. Lafont presently chairs the TSX-listed company in the Strategy Services. He is a member consulting firm, from June Energy & Climate Change Working technology business. of the boards of JSFC Sistema, of 1999 to March 2010, and was Group of the ERT (European The Company is focused on the East West United Bank, of China with the firm in various other Roundtable of Industrialists) and business of streaming color images Construction Bank Europe, of capacities beginning in 1989, the Sustainable Development of the Earth from the International Calzedonia Finanziara S.A., Jan De including as a leader in the Commission of the MEDEF Space Station. He is also the Management report 39

Chair and Principal at Carbon France, and a degree in Political and services for the global in-line with the ongoing drive to Arc Capital Investments Corp. Science from the Institut d’Études infrastructure market, a position promote a performance-driven and the Life Sciences Research Politiques de Grenoble as well that she has held since June culture, empowering the segments Campaign Chair of the University as a Master’s of Economics from 2015. Most recently she also to deliver optimum business of Guelph’s Better Planet Project. the London School of Economics, served as Chief Financial Officer results. As a result the GMB, Mr. Burt is a member of the Duke UK. Michel Wurth is also doctor of and Executive Vice President of which was established to ensure of Edinburgh’s Award Charter for laws honoris causa of the Sacred LyondellBasell Industries NV from a smooth integration following Business Board of Governors. He Heart University, Luxembourg. 2011 to May 2015, as Executive the creation of ArcelorMittal, was is a graduate of Osgoode Hall Michel Wurth has served as Vice President and Chief Financial replaced, effective January 1, 2016, Law School, a member of the Law Chairman of the Luxembourg Officer of Petroplus Holdings AG with a more flexible structure. The Society of Upper Canada, and he Chamber of Commerce since from May 2006 to September 2010 CEO office - comprising the CEO, holds a Bachelor of Arts degree 2004. He is also non-executive and as Executive Vice President Mr. Lakshmi N. Mittal and the CFO, from the University of Guelph. Mr. Chairman of Paul Wurth S.A. and and Chief Financial Officer of Mr. Aditya Mittal will be defined as Burt is a citizen of Canada. of BIP Investment Partners and Argus Services Corporation from ArcelorMittal’s senior management non-executive Director of BGL 2005 to 2006. Prior to that, she in 2016, in replacement of the Michel Wurth, 61, is a non- BNP Paribas S.A., of SMS Group was Vice President of External GMB. independent Director of and of Brasserie Nationale. Paul Reporting and Investor Relations ArcelorMittal. He joined Wurth S.A. is controlled by SMS for Premcor Refining Group Inc. As of December 31, 2015, in 1979 and held a variety of Group, a leading equipment and She also spent 12 years with ArcelorMittal’s senior executive functions before joining the Arbed engineering supplier for the steel PricewaterhouseCoopers, primarily management was comprised Group Management Board and and non-ferrous metal producing serving energy industry accounts. of the members of the Group becoming its chief financial officer industry. BIP Investment Partners Mrs. Ovelmen holds a Bachelor of Management Board (“GMB”). in 1996. The merger of Aceralia, is a Luxembourg based company, Arts degree from the University of The GMB had responsibility for, Arbed and , leading to the mainly invested in private equity, Connecticut, USA, and is a Certified and its remuneration was tied creation of Arcelor in 2002, led BGL BNP Paribas is a Luxembourg Public Accountant (“CPA”) of AICPA. to, the day-to-day management to Mr. Wurth’s appointment as bank, majority owned BNP of Mrs. Ovelmen is a citizen of the of the business of ArcelorMittal senior executive vice president France and Brasserie Nationale is a United States of America. on a global basis. The GMB was and CFO of Arcelor. He became privately owned brewery based in defined as ArcelorMittal’s senior a member of ArcelorMittal’s Luxembourg. Mr. Wurth is a citizen Senior management management. Group Management Board in of Luxembourg. 2006, responsible for Flat Carbon On December 16, 2015, Europe, Global R&D, Distribution Karyn Ovelmen, 52, is a non- ArcelorMittal announced that Solutions and Long Carbon executive and an independent Mr. Lou Schorsch will retire from Worldwide, respectively. Michel Director of ArcelorMittal and the Company, effective end of Wurth retired from the GMB in a member of the Audit & Risk February 2016. April 2014 and was elected to Committee. She is the Executive ArcelorMittal’s board of directors in Vice President and Chief Financial The Company also announced that May 2014. He holds a Law degree Officer of , a leading it would take the opportunity to from the University of Grenoble, provider of flow control products simplify its management structure

Name Age1 Position Chairman and Chief Executive Officer of ArcelorMittal with additional Lakshmi N. Mittal 65 responsibility for Mining Chief Executive Officer of ArcelorMittal Africa and CIS, responsible for Davinder Chugh 59 Algeria, Kazakhstan, South Africa and Ukraine Chief Financial Officer of ArcelorMittal, Investor Relations, and Chief Aditya Mittal 39 Executive Officer of ArcelorMittal Europe Chief Executive Officer of ArcelorMittal Americas, with additional responsibility for corporate activities (Strategy, Technology, R&D, Global Lou Schorsch 66 Automotive and Commercial co-ordination) 1 Age as of December 31, 2015. 40 Management report

Lakshmi N. Mittal in Mittal Steel’s expansion into the 1983 book “Steel: Upheaval in Governance of the Luxembourg (See “Board of Directors”). Central Europe, Africa and the a Basic Industry”, and has appeared Stock Exchange. This is explained United States. Besides M&A as a steel expert on NBC and PBS in more detail in “Other Corporate Davinder Chugh, 59, is CEO of responsibilities, Aditya Mittal television channels in the United Governance practices” below. ArcelorMittal Africa and CIS, was involved in post-integration, States. Prior to joining McKinsey ArcelorMittal also complies with the member of the GMB responsible turnaround and improvement Dr. Schorsch was an analyst at the Listed for Kazakhstan, South Africa and strategies. As Chief Financial Congressional Budget Office in Company Manual as applicable to Ukraine. He has over three decades Officer of Mittal Steel, he also Washington, D.C. and a millwright foreign private issuers. of experience in the steel industry initiated and led Mittal Steel’s at the USS South Chicago Works in general management, materials offer for Arcelor to create the in the late 1970s, when he Board of Directors purchasing, marketing, logistics, first 100 million tonnes plus steel develop his initial interest in the warehousing and shipping. Mr. company. In 2008, Mr. Aditya steel sector. He holds a doctorate Composition Chugh was previously a Senior Mittal was awarded ‘European in Economics from American Executive Vice President of Business Leader of the Future’ by University and a bachelor’s degree The Board of Directors is in charge ArcelorMittal responsible for CNBC Europe. In 2011, he was also from Georgetown University, both of the overall governance and Shared Services since 2013. Before ranked 4th in the ‘40 under 40’ in Washington, D.C. Mr. Schorsch direction of ArcelorMittal. It is becoming a Senior Executive list of Fortune magazine. He is a is a citizen of the United States of responsible for the performance of Vice President of ArcelorMittal, he Young Global Leader of the World America. all acts of administration necessary served as the CEO of Mittal Steel Economic Forum, a Board member or useful in furtherance of the South Africa until 2006. Mr. Chugh at the Wharton School and a Board practices/corporate corporate purpose of ArcelorMittal, worked in South Africa from 2002 Board member at Iconiq Capital. governance except for matters reserved by following the acquisition of Mittal Aditya Mittal holds a Bachelor’s Luxembourg law or the Articles of Steel South Africa (ISCOR) and was degree of Science in Economics This section describes the Association to the general meeting involved in the turnaround and with concentrations in Strategic corporate governance practices of of shareholders. The Articles of consolidation of the South African Management and Corporate ArcelorMittal for the year ended Association provide that the Board operations of ArcelorMittal. He also Finance from the Wharton School December 31, 2015. of Directors is composed of a served as Director of Commercial in Pennsylvania, United States. minimum of three and a maximum and Marketing at Mittal Steel Mr. Aditya Mittal is the son of Mr. Board of Directors and GMB of 18 members, all of whom, South Africa. Mr. Chugh was Vice Lakshmi N. Mittal. Mr. Aditya Mittal except the Chief Executive Officer, President of Purchasing in Mittal is a citizen of India. ArcelorMittal is governed by a must be non-executive directors. Steel Europe until 2002, where he Board of Directors and managed None of the members of the Board consolidated procurement and Lou Schorsch, 66, was elected by the GMB. As described above, of Directors, except for the Chief logistics across plants in Europe. to the GMB in May 2011. Prior to as of January 1, 2016, the GMB Executive Officer, may hold an Between 1995, when he joined this appointment he had been was replaced by the CEO office - executive position or executive Mittal Steel and 1999, he worked President and Chief Executive comprising the CEO, Mr. Lakshmi mandate within ArcelorMittal as general manager (purchasing) Officer of Flat Carbon Americas, N. Mittal and the CFO, Mr. Aditya or any entity controlled by of Hamburg Steel Works and as a position established with the Mittal – working directly with a ArcelorMittal. general manager (purchasing) 2006 merger of Arcelor and Mittal team of seven executive officers, of Mittal Steel Germany. Prior to Steel, as well as a member of who together encompass the key The Articles of Association provide joining Mittal Steel, he held senior the ArcelorMittal Management regions and corporate functions. that directors are elected and positions at the Steel Authority Committee. He had previously This simplified management removed by the general meeting India Limited in New Delhi, India. led the American operations of structure is in-line with the ongoing of shareholders by a simple He holds bachelor’s degrees of the Mittal Group, Mittal Steel drive to promote a performance- majority of votes cast. Other than B.Sc. (Physics Honors), an LLB and USA (2005-2006) and Ispat Inland driven culture, empowering the as set out in the Company’s Articles an MBA. Mr. Chugh is a citizen of (2003-2005). Prior to joining Ispat segments to deliver optimum of Association, no shareholder has India and as of November 2013 Mr. Inland, Dr. Schorsch had spent business results based on clear any specific right to nominate, Chugh became a citizen of United most of his career as a partner in accountability. elect or remove directors. Directors Kingdom. McKinsey & Co and was co-leader are elected by the general meeting of that firm’s Metals Practice. He A number of corporate governance of shareholders for three-year Aditya Mittal, 39, Prior to the joined McKinsey’s Brussels Office provisions in the Articles of terms. In the event that a vacancy merger to create ArcelorMittal, in 1985 and also worked in that Association of ArcelorMittal reflect arises on the Board of Directors Mr. Aditya Mittal held the position firm’s Pittsburgh and Chicago provisions of the Memorandum for any reason, the remaining of President and Chief Financial offices. While at McKinsey his of Understanding signed on members of the Board of Directors Officer of Mittal Steel Company work focused on the steel sector June 25, 2006 (prior to Mittal may by a simple majority elect from October 2004 to 2006. He and involved client service with Steel’s merger with Arcelor), a new director to temporarily joined Mittal Steel in January leading steel firms in the Americas, amended in April 2008 and fulfill the duties attaching to the 1997 and has held various finance Europe and Asia. He left McKinsey which mostly expired on August vacant post until the next general and management roles within in 2000 to become CEO of GSX, an 1, 2009. For more information meeting of the shareholders. the company. In 1999, he was internet steel exchange founded about the Memorandum of appointed Head of Mergers and by Cargill, , Duferco, Understanding, see “Memorandum Acquisitions for Mittal Steel. In and Arbed. He is the author of of Understanding”. this role, he led the company’s numerous articles related to the ArcelorMittal fully complies with acquisition strategy, resulting steel sector, was the co-author of the 10 Principles of Corporate Management report 41

In 2015, the Board of Directors code, require ArcelorMittal to On October 30, 2012, the Board principal occupation or business proposed Mrs. Karyn Ovelmen define the independence criteria of Directors also adopted a policy association are not necessarily to serve as a member of the that apply to its directors, which that places limitations on the required to leave the Board of ArcelorMittal Board of Directors, are described in article 8.1 of its terms of independent directors as Directors, the policy requires each which was approved at the Articles of Association. well as the number of directorships non-executive director, in such ArcelorMittal annual general Directors may hold in order to circumstances, promptly to inform shareholders’ meeting held on May Specific characteristics of the align the Company’s corporate the Board of Directors of the 5, 2015. director role governance practices with best action he or she is contemplating. practices in this area. The policy Should the Board of Directors The Board of Directors is The Company’s Articles of provides that an independent determine that the contemplated comprised of 12 members, of Association do not require director may not serve on the action would generate a conflict which 11 are non-executive directors to be shareholders of the Board of Directors for more than of interests, such non-executive directors and one is an executive Company. The Board of Directors 12 consecutive years, although director would be asked to tender director. The Chief Executive nevertheless adopted a share the Board of Directors may, by way his or her resignation to the Officer of ArcelorMittal is the sole ownership policy on October 30, of exception to this rule, make an chairman of the Board of Directors, executive director. 2012, considering that it is in the affirmative determination, on a who would decide to accept the best interests of all shareholders case-by-case basis, that he or she resignation or not. Mr. Lakshmi N. Mittal was elected for all non-executive directors may continue to serve beyond Chairman of the Board of Directors to acquire and hold a minimum the 12 years rule if the Board of None of the members of the on May 13, 2008. Mr. Mittal is also number of ArcelorMittal ordinary Directors considers it to be in Board of Directors, including ArcelorMittal’s Chief Executive shares in order to better align their the best interest of the Company the executive director, have Officer. Mr. Mittal was re-elected to long-term interests with those based on the contribution of the entered into service contracts the Board of Directors for a three- of ArcelorMittal’s shareholders. Director involved and the balance with ArcelorMittal or any of year term by the annual general The Board of Directors believes between the knowledge, skills, its subsidiaries that provide meeting of shareholders on May that this share ownership policy experience and need for renewal for any form of remuneration 8, 2014. will result in a meaningful of the Board. or for benefits upon the holding of ArcelorMittal shares termination of their term. All Eight of the 12 members by each non-executive director, As membership of the Board of non-executive Directors of the of the Board of Directors while at the same time taking Directors represents a significant Company signed the Company’s are independent. The non- into account the fact that the time commitment, the policy Appointment Letter, which independent directors are Mr. share ownership requirement requires both executive and confirms the conditions of their Lakshmi N. Mittal, Ms. Vanisha should not be excessive in order non-executive directors to devote appointment by the General Mittal Bhatia, Mr. Jeannot Krecké not to unnecessarily limit the sufficient time to the discharge Meeting of the Shareholders and Mr. Michel Wurth. A director is pool of available candidates for of their duties as a director of including compliance with considered “independent” if: appointment to the Board of ArcelorMittal. Directors are certain non-compete provisions, Directors. Directly or indirectly, therefore required to consult the 10 Principles of Corporate (a) he or she is independent and as sole or joint beneficiary with the Chairman and the Governance of the Luxembourg within the meaning of the New owner (e.g., with a spouse or minor Lead Independent Director Stock Exchange and the York Stock Exchange Listed children), within five years of the before accepting any additional Company’s Code of Business Company Manual, as applicable earlier of October 30, 2012 or commitment that could conflict Conduct. to foreign private issuers, the relevant person’s election to with or impact the time they can the Board of Directors, the Lead devote to their role as a Director of All members of the Board of (b) he or she is unaffiliated with Independent Director should own ArcelorMittal. Furthermore, a non- Directors are required to sign any shareholder owning or a minimum of 15,000 ordinary executive director may not serve the Company’s Code of Business controlling more than two shares and each other non- on the boards of directors of more Conduct upon first joining the percent of the total issued share executive director should own than four publicly listed companies Board of Directors and confirm capital of ArcelorMittal, and a minimum of 10,000 ordinary in addition to the ArcelorMittal their adherence thereto on an shares. Each director will hold the Board of Directors. However, a annual basis thereafter. (c) the Board of Directors makes shares acquired on the basis of non-executive Director’s service an affirmative determination to this policy for so long as he or she on the board of directors of The remuneration of the members this effect. serves on the Board of Directors. any subsidiary or affiliate of of the Board of Directors is Directors purchasing shares in ArcelorMittal or of any non- determined on a yearly basis by For these purposes, a person is compliance with this policy must publically listed company is not the annual general meeting of deemed affiliated to a shareholder comply with the ArcelorMittal taken into account for purposes shareholders. if he or she is an executive officer, a Insider Dealing Regulations and, of complying with the foregoing director who also is an employee, in particular, and refrain from limitation. Directors have a time Share transactions by a general partner, a managing trading during any restricted period of three years from October management member or a controlling period, including any such period 30, 2012 before the limit of five shareholder of such shareholder. that may apply immediately after directorships of public companies In compliance with laws The 10 Principles of Governance of the Director’s departure from the will be applied. prohibiting insider dealing, the Luxembourg Stock Exchange, Board of Directors for any reason. the Board of Directors of which constitute ArcelorMittal’s Although non-executive directors ArcelorMittal has adopted domestic corporate governance of ArcelorMittal who change their insider dealing regulations, 42 Management report

which apply throughout the year. The Board of Directors holds Mr. Lewis B. Kaden was elected The 2015 Board of Directors’ self- ArcelorMittal group. These additional meetings if and when by the Board of Directors evaluation is in progress. regulations are designed to circumstances require, in person as ArcelorMittal’s first Lead ensure that insider information or by teleconference and can take Independent Director in April 2008 The Board of Directors believes is treated appropriately within decisions by written circulation, and remains Lead Independent that its members have the the Company and avoid insider provided that all members of the Director, having been re-elected as appropriate range of skills, dealing and market manipulation. Board of Directors agree. a director for a three-year term on knowledge and experience, as Any breach of the rules set out May 8, 2014. well as the degree of diversity, in this procedure may lead to The Board of Directors held seven necessary to enable it to effectively criminal or civil charges against meetings in 2015. The average The agenda of each meeting of govern the business. Board the individuals involved, as well attendance rate of the directors at the Board of Directors is decided of Directors composition is as disciplinary action by the the Board of Directors’ meetings jointly by the Chairman of the reviewed on a regular basis and Company. was 99%. Board of Directors and the Lead additional skills and experience Independent Director. are actively searched for in line Shareholding requirement for non- In order for a meeting of the with the expected development executive directors Board of Directors to be validly Separate meetings of independent of ArcelorMittal’s business as and held, a majority of the Directors directors when appropriate. In consideration of corporate must be present or represented, governance trends indicating that including at least a majority of The independent members of the Required skills, experience and a reasonable amount of share the independent Directors. In the Board of Directors may schedule other personal characteristics ownership helps better align the absence of the Chairman, the Board meetings outside the presence interests of the directors with of Directors will appoint by majority of non-independent Directors. Diverse skills, backgrounds, those of all shareholders, the vote a chairman for the meeting Five meetings of the independent knowledge, experience, Board of Directors adopted on in question. The Chairman may Directors outside the presence geographic location, nationalities October 30, 2012 share ownership decide not to participate in a Board of management and non- and gender are required in order guidelines for non-executive of Directors’ meeting, provided independent Directors were held to effectively govern a global Directors. The directors are he has given a proxy to one of the in 2015. business the size of the Company’s required to own 10,000 shares and Directors who will be present at operations. The Board of Directors the Lead Independent Director the meeting. For any meeting of Annual self-evaluation and its committees are therefore is required to own 15,000 shares, the Board of Directors, a Director required to ensure that the Board both within five years of the earlier may designate another Director The Board of Directors decided in has the right balance of skills, of (i) the effective date of the to represent him or her and vote 2008 to start conducting an annual experience, independence and share ownership guidelines, i.e. in his or her name, provided that self-evaluation of its functioning knowledge necessary to perform October 30, 2012, or (ii) the date the director so designated may not in order to identify potential areas its role in accordance with the of the appointment of a Director if represent more than one of his or for improvement. The first self- highest standards of governance. appointed after October 30, 2012. her colleagues at any time. evaluation process was carried out in early 2009. The self-evaluation The Company’s directors must Operation Each Director has one vote and process includes structured demonstrate unquestioned none of the Directors, including interviews between the Lead honesty and integrity, General the Chairman, has a casting vote. Independent Director and each preparedness to question, Decisions of the Board of Directors director and covers the overall challenge and critique The Board of Directors and the are made by a majority of the performance of the Board of constructively, and a willingness Board committees may engage directors present and represented Directors, its relations with senior to understand and commit to the the services of external experts or at a validly constituted meeting, management, the performance highest standards of governance. advisers as well as take all actions except for the decisions of the of individual directors, and the They must be committed to the necessary or useful to implement Board of Directors relating to the performance of the committees. collective decision-making process the Company’s corporate purpose. issue of any financial instruments The process is supported by the of the Board of Directors and must The Board of Directors (including carrying or potentially carrying Company Secretary under the be able to debate issues openly its three committees) has its own a right to equity pursuant to the supervision of the Chairman and and constructively, and question budget, which covers functioning authorization conferred by article the Lead Independent Director. or challenge the opinions of costs such as external consultants, 5.5. of the Articles of Association, The findings of the self-evaluation others. Directors must also commit continuing education activities for which shall be taken by a majority process are examined by the themselves to remain actively Directors and travel expenses. of two-thirds of the directors ARCG Committee and presented involved in Board decisions and present or represented at a validly with recommendations from the apply strategic thought to matters Meetings constituted meeting. ARCG Committee to the Board at issue. They must be clear of Directors for adoption and communicators and good listeners The Board of Directors meets when Lead Independent Director implementation. Suggestions who actively contribute to the convened by the Chairman of the for improvement of the Board Board in a collegial manner. Each Board or any two members of the In April 2008, the Board of of Directors’ process based on director must also ensure that no Board of Directors. The Board of Directors created the role of Lead the prior year’s performance and decision or action is taken that Directors holds physical meetings Independent Director. His or her functioning are implemented places his or her interests in front at least on a quarterly basis as five function is highlighted above. during the following year. of the interests of the business. regular meetings are scheduled per Each director has an obligation to Management report 43

protect and advance the interests • an understanding of the health, Diversity directors also build their Company of the Company and must refrain safety, environmental, political and industry knowledge through from any conduct that would harm and community challenges that In line with the worldwide effort the involvement of the GMB and it. ArcelorMittal faces. to increase gender diversity on the other senior employees in Board boards of directors of listed and meetings. Business briefings, site In order to govern effectively, Each director is required to adhere unlisted companies, the Board met visits and development sessions non-executive directors must to the values set out in, and sign, its goal of increasing the number underpin and support the Board’s have a clear understanding of the ArcelorMittal Code of Business of women on the Board to at least work in monitoring and overseeing the Company’s strategy, and Conduct. three by the end of 2015 with the progress towards the corporate a thorough knowledge of the election of Mrs. Karyn Ovelmen in purpose of creating long-term ArcelorMittal group and the Renewal May 2015, based upon a Board of shareholder value through the industries in which it operates. Directors size of 12 members. The development of the ArcelorMittal Non-executive directors must The Board of Directors plans ArcelorMittal Board’s diversity not business in steel and mining. The be sufficiently familiar with for its own succession, with the only relates to gender, but also Company therefore continuously the Company’s core business assistance of the ARCG Committee. to the region, background and builds directors’ knowledge to to effectively contribute to the In doing this, the Board of industry of its members. ensure that the Board remains up- development of strategy and Directors: to-date with developments within monitor performance. Director induction, training and the Company’s segments, as well • considers the skills, backgrounds, development as developments in the markets in With specific regard to the knowledge, experience and which the Company operates. non-executive directors of the diversity of geographic location, The Board considers that the Company, the composition of nationality and gender necessary development of the directors’ During the year, non-executive the group of non-executive to allow it to meet the corporate knowledge of the Company, directors participated in the directors should be such that purpose; the steel-making and mining following activities: the combination of experience, industries, and the markets in knowledge and independence of • assesses the skills, backgrounds, which the Company operates is • comprehensive business its members allows the Board to knowledge, experience and an ongoing process. To further briefings intended to provide fulfill its obligations towards the diversity currently represented; bolster the skills and knowledge each director with a deeper Company and other stakeholders of directors, the Company set up a understanding of the Company’s in the best possible manner. • identifies any inadequate continuous development program activities, environment, key representation of those attributes in 2009. issues and strategy of the The ARCG Committee ensures that and agrees the process necessary Company’s segments. These the Board of Directors is comprised to ensure a candidate is selected Upon his or her election, each new briefings are provided to of high-caliber individuals whose who brings them to the Board of non-executive director undertakes the Board of Directors by background, skills, experience and Directors; and an induction program specifically senior executives, including personal characteristics enhance tailored to his or her needs and GMB members. The briefings the overall profile of the Board • reviews how Board performance includes ArcelorMittal’s long-term provided during the course of and meets its needs and diversity might be enhanced, both at an vision centered on the concept of 2015 covered health and safety aspirations by nominating high individual Director level and for “Safe Sustainable Steel”. processes, HR, legal, marketing, quality candidates for election to the Board as a whole. steel-making, strategy, mining the Board by the general meeting The Board’s development activities and R&D. Certain business of shareholders. The Board believes that orderly include the provision of regular briefings were combined with succession and renewal is updates to directors on each of site visits and thus took place on- Board profile achieved through careful planning the Company’s products and site and, in other cases, they took and by continuously reviewing the markets. Non-executive directors place at Board meetings; The key skills and experience of composition of the Board. may also participate in training the directors, and the extent to programs designed to maximize • briefing meetings with Company which they are represented on When considering new the effectiveness of the directors executives in charge of specific the Board of Directors and its appointments to the Board, throughout their tenure and link in business segments or markets; committees, are set out below. the ARCG Committee oversees with their individual performance In summary, the non-executive the preparation of a position evaluations. The training and • site visits to plants and R&D directors contribute: specification that is provided development program may cover centers; and to an independent recruitment not only matters of a business • international and operational firm retained to conduct a global nature, but also matters falling • development sessions on specific experience; search, taking into account, among into the environmental, social and topics of relevance, such as other factors, geographic location, governance area. health and safety, commodity • understanding of the industry nationality and gender. In addition markets, HR, investor relations, sectors in which ArcelorMittal to the specific skills, knowledge Structured opportunities are accounting, the world economy, operates; and experience required of the provided to build knowledge changes in corporate governance candidate, the specification through initiatives such as visits standards, directors’ duties and • knowledge of world capital contains the criteria set out in the to plants and mine sites and shareholder feedback. markets and being a company ArcelorMittal Board profile. business briefings provided at listed in several jurisdictions; and Board meetings. Non-executive 44 Management report

The ARCG Committee oversees accounting and financial Appointments, Remuneration and ArcelorMittal, as well as their director training and development. reporting processes generally; Corporate Governance Committee application in practice. This approach allows induction and learning opportunities to be f. the identification and The ARCG Committee has been The ARCG Committee’s principal tailored to the directors’ committee management of risks to which comprised of four directors, each criteria in determining the memberships, as well as the Board the ArcelorMittal group is of whom is independent under the compensation of executives of Director’s specific areas of focus. exposed. New York Stock Exchange standards is to encourage and reward In addition, this approach ensures and the 10 Principles of Corporate performance that will lead to long- a coordinated process in relation The Audit & Risk Committee Governance of the Luxembourg term enhancement of shareholder to succession planning, Board must be composed solely of Stock Exchange. value. The ARCG Committee may renewal, training, development independent members of the Board seek the advice of outside experts. and committee composition, all of Directors. The members are The members are appointed by of which are relevant to the ARCG appointed by the Board of Directors the Board of Directors each year The four members of the ARCG Committee’s role in securing the each year after the annual general after the annual general meeting of Committee are Mr. Lewis B. Kaden, supply of talent to the Board. meeting of shareholders. The Audit shareholders. The ARCG Committee Mrs. Suzanne P. Nimocks, Mr. & Risk Committee comprises four to makes decisions by a simple Antoine Spillmann and Mr. Tye Board of Directors committees five members, all of whom must be majority with no member having a Burt, each of whom is independent independent under the company’s casting vote. in accordance with the NYSE The Board of Directors has two corporate governance guidelines, standards and the 10 Principles committees: the New York Stock Exchange The Board of Directors has of Corporate Governance of the (NYSE) standards and the 10 established the ARCG Committee Luxembourg Stock Exchange. The • the Audit & Risk Committee, and Principles of Corporate Governance to: Chairman of the ARCG Committee of the Luxembourg Stock Exchange. is Mr. Kaden. • the Appointments, Remuneration The Audit & Risk Committee makes • determine, on its behalf and and Corporate Governance decisions by a simple majority with on behalf of the shareholders The ARCG Committee is required to Committee. no member having a casting vote. within agreed terms of reference, meet at least twice a year. During ArcelorMittal’s compensation 2015, this committee met eight Audit & Risk Committee At least one member must qualify framework, including short times. as an Audit & Risk Committee and long term incentives for In 2015 the Board decided to “financial expert” as defined by the the Chief Executive Officer, the The ARCG Committee performs its combine the Audit Committee with SEC and determined by the Board. Chief Financial Officer and the annual self-evaluation. Its 2015 self- the Risk Management Committee members of the Management evaluation is in progress. in order to provide their members At least one member must qualify Committee; with a more holistic view of as an Audit & Risk Committee The charter of the ARCG Committee ArcelorMittal’s current governance, “risk management expert” having • review and approve succession is available from ArcelorMittal upon risks and control systems. experience in identifying, assessing, and contingency plans for key request. and managing risk exposures of managerial positions at the level The primary function of the Audit large, complex companies. of the Management Committee; Succession management & Risk Committee is to assist the Board in fulfilling its oversight The Audit & Risk Committee • consider any candidate for Succession management at responsibilities by reviewing: currently consists of five members: appointment or reappointment ArcelorMittal is a systematic, Mr. Narayanan Vaghul (Chairman), to the Board of Directors at structured process for identifying a. the integrity of the financial Mr. Wilbur L. Ross, Mr. Lewis Kaden, the request of the Board of and preparing employees with reports and other financial Mr. Bruno Lafont and Mrs. Karyn Directors and provide advice and potential to fill key organizational information provided by the Ovelmen, each of whom is an recommendations to it regarding positions, should the position company to any governmental independent director according the same; become vacant. This process body or the public; to the NYSE standards and the 10 applies to all ArcelorMittal key Principles of Corporate Governance • evaluate the functioning of the positions up to and including the b. the Company’s compliance of the Luxembourg Stock Exchange. Board of Directors and monitor GMB. Succession management with legal and regulatory The Chairman of the Audit & Risk the Board of Directors’ self- aims to ensure the continued requirements; Committee is Mr. Vaghul. evaluation process; effective performance of the According to its charter, the Audit & organization by providing for c. the registered public accounting Risk Committee is required to meet • assess the roles of the Chairman the availability of experienced firm’s (Independent Auditor) at least four times a year. During and CEO and deliberate on the and capable employees who are qualifications and independence; 2015, the Audit & Risk Committee merits of the Board’s leadership prepared to assume these roles as met four times. The Audit & Risk structure to ensure that the they become available. For each d. the Company’s system of internal Committee performs its annual self- most efficient and appropriate position, candidates are identified control regarding finance, evaluation. Its 2015 self-evaluation structure is in place; and based on performance, potential accounting, legal compliance, is in progress. and an assessment of leadership ethics and risk management • develop, monitor and review capabilities and their “years to that management and the Board The charter of the Audit & Risk corporate governance principles readiness”. Development needs have established; Committee is available from and corporate responsibility linked to the succession plans are e. the Company’s auditing, ArcelorMittal upon request. policies applicable to discussed, after which “Personal Management report 45

Development Plans” are put in a more flexible “comply or explain” Employees are prohibited from basis. In accordance with place, to accelerate development standard. acquiring any financial or other ArcelorMittal’s Anti-Fraud and and prepare candidates. Regular interest in any business or Whistleblower Policy, concerns reviews of succession plans are The nomination of the same participate in any activity that with regard to possible fraud conducted at different levels of person to both positions was could deprive ArcelorMittal of or irregularities in accounting, the organization to ensure that approved by the shareholders the time or the attention needed auditing or banking matters or they are accurate and up to date, (with the Significant Shareholder to devote to the performance of bribery within ArcelorMittal or leading to at least once yearly abstaining). Since that date, their duties. Any behavior that any of its subsidiaries or other a formal review by the GMB, the rationale for combining the deviates from the Code of Business controlled entities may also of all key positions. Succession positions of Chief Executive Conduct is to be reported to the be communicated through management is a necessary Officer and Chairman of the Board employee’s supervisor, a member the “Corporate Governance process to reduce risk of vacant of Directors has become even of the management, the head Whistleblower” section of the positions or skill gap transitions, more compelling. The Board of of the legal department or the ArcelorMittal website at create a pipeline of future leaders, Directors is of the opinion that head of the internal assurance www.arcelormittal.com, where ensure smooth business continuity Mr. Mittal’s strategic vision for the department. ArcelorMittal’s Anti-Fraud Policy and improve employee motivation steel industry in general and for and Code of Business Conduct and engagement. This process has ArcelorMittal in particular in his Code of Business Conduct training are also available in each of the been in place for several years and role as CEO is a key asset to the is offered throughout ArcelorMittal main working languages used reinforced, widened and made Company, while the fact that he on a regular basis in the form of within the Group. In recent years more systematic in all regions of is fully aligned with the interests face-to-face trainings, webinars ArcelorMittal has implemented the organization. The responsibility of the Company’s shareholders and online trainings. Employees local whistleblowing facilities, as to review and approve succession means that he is uniquely are periodically trained about the needed. plans and contingency plans at the positioned to lead the Board of Code of Business Conduct in each highest level rests with the Board’s Directors in his role as Chairman. location where ArcelorMittal has During 2015, there were 175 ARCG Committee. The combination of these roles operations. The Code of Business complaints received relating to was revisited at the Annual Conduct is available in the alleged fraud, which were referred Other corporate governance General Meeting of Shareholders “Corporate Governance—Code to and duly reviewed by the practices of the Company held in May 2014, of Business Conduct” section of Company’s Internal Assurance when Mr. Lakshmi N. Mittal was ArcelorMittal’s website at www. Department. Following review by ArcelorMittal is committed to reelected to the Board of Directors arcelormittal.com. the Audit & Risk Committee, none adhere to best practices in terms for another three year term by a of these complaints was found to of corporate governance in its strong majority. In addition to the Code of be significant. dealings with shareholders and Business Conduct, ArcelorMittal aims to ensure good corporate Ethics and conflicts of interest has developed a Human Rights Internal assurance governance by applying rules on Policy and a number of other transparency, quality of reporting Ethics and conflicts of interest compliance policies in more ArcelorMittal has an Internal and the balance of powers. are governed by ArcelorMittal’s specific areas, such as anti-trust, Assurance function that, through ArcelorMittal continually monitors Code of Business Conduct, which anti-corruption, economic its Head of Internal Assurance, U.S., EU and Luxembourg legal establishes the standards for sanctions and insider dealing. reports to the Audit & Risk requirements and best practices ethical behavior that are to be In all these areas, specifically Committee. The function is staffed in order to make adjustments to followed by all employees and targeted groups of employees are by full-time professional staff its corporate governance controls directors of ArcelorMittal in the required to undergo specialized located within each of the principal and procedures when necessary, exercise of their duties. Each compliance training. Furthermore, operating subsidiaries and at the as evidenced by the new policies employee of ArcelorMittal is ArcelorMittal’s compliance corporate level. Recommendations adopted by the Board of Directors required to sign and acknowledge program also includes a quarterly and matters relating to internal in 2012. the Code of Conduct upon joining compliance certification process control and processes are made the Company. This also applies covering all business segments by the Internal Assurance function ArcelorMittal complies with to the members of the Board and entailing reporting to the and their implementation is the 10 Principles of Corporate of Directors of ArcelorMittal, Audit & Risk Committee. regularly reviewed by the Audit & Governance of the Luxembourg who signed the Company’s Risk Committee. Stock Exchange in all respects. Appointment Letter in which they Process for Handling Complaints However, in respect of acknowledged their duties and on Accounting Matters Independent auditors Recommendation 1.3 under obligations. Any new member of the Principles, which advocates the Board of Directors must sign As part of the procedures of the The appointment and separating the roles of chairman and acknowledge the Code of Board of Directors for handling determination of fees of the of the board and the head of Conduct upon appointment. complaints or concerns about independent auditors is the direct the executive management accounting, internal controls and responsibility of the Audit & Risk body, the Company has made a Employees must always act in auditing issues, ArcelorMittal’s Committee. The Audit & Risk different choice. This is permitted, the best interests of ArcelorMittal Anti-Fraud Policy and Code of Committee is further responsible however, as, unlike the 10 and must avoid any situation in Business Conduct encourage all for obtaining, at least once each Principles themselves with which which their personal interests employees to bring such issues year, a written statement from ArcelorMittal must comply, the conflict, or could conflict, with to the Audit & Risk Committee’s the independent auditors that Recommendations are subject to their obligations to ArcelorMittal. attention on a confidential their independence has not 46 Management report

been impaired. The Audit & Risk list of insiders as required by the other areas that the Company At the May 5, 2015 annual general Committee has also obtained a Luxembourg market manipulation may determine from time to meeting of shareholders, the confirmation from ArcelorMittal’s (abus de marché) law of May time. In addition, ArcelorMittal’s shareholders approved the annual principal independent auditors to 9, 2006, as amended. The IDR Code of Business Conduct remuneration for non-executive the effect that none of its former compliance officer may assist contains a section on “Trading in Directors for the 2014 financial employees are in a position within senior executives and directors the Securities of the Company” year, based on the following ArcelorMittal that may impair the with the filing of notices required that emphasizes the prohibition annual fees: principal auditors’ independence. by Luxembourg law to be filed to trade on the basis of inside with the Luxembourg financial information. An online interactive • Basic director’s remuneration: Measures to prevent insider regulator, the CSSF (Commission training tool based on the IDR €144,000 ($174,830); dealing and market manipulation de Surveillance du Secteur was developed in 2010 and Financier). Furthermore, the IDR deployed across the group in • Lead Independent Director’s The Board of Directors of compliance officer has the power different languages in 2011 remuneration: €204,000 ArcelorMittal has adopted Insider to conduct investigations in through ArcelorMittal’s intranet, ($247,676); Dealing Regulations (“IDR”), which connection with the application with the aim to enhance the staff’s are updated when necessary and and enforcement of the IDR, in awareness of the risks of sanctions • Additional remuneration for in relation to which training is which any employee or member applicable to insider dealing. The the Chair of the Audit & Risk conducted throughout the Group. of senior management or of the importance of the IDR was again Committee: €28,000 ($33,995); The IDR’s most recent version Board of Directors is required to underscored in the Group Policies is available on ArcelorMittal’s cooperate. and Procedures Manual in 2013. • Additional remuneration for the website, www.arcelormittal.com. other Audit & Risk Committee Selected new employees of Compensation members: €17,000 ($20,640); The IDR apply to the worldwide ArcelorMittal are required to operations of ArcelorMittal. participate in a training course Board of Directors • Additional remuneration for the The Company Secretary of about the IDR upon joining Chairs of the other committees: ArcelorMittal is the IDR compliance ArcelorMittal and every three Directors’ fees €16,000 ($19,426); and officer and answers questions that years thereafter. The individuals members of senior management, who must participate in the IDR The ARCG Committee of the Board • Additional remuneration for the Board of Directors, or training include the members of of Directors prepares proposals the members of the other employees may have about the senior management, employees on the remuneration to be paid committees: €11,000 ($13,355). IDR’s interpretation. The IDR who work in finance, legal, sales, annually to the members of the compliance officer maintains a mergers and acquisitions and Board of Directors.

The total annual remuneration of the members of the Board of Directors paid in 2014 and 2015 was as follows:

Year ended Year ended Amounts in $ thousands except Long-term incentives information) December 31, 2015 December 31, 2014 Base salary1 $1,746 $1,852 Director fees $1,856 $2,153 Short-term performance-related bonus1 $1,910 $1,916 Long-term incentives 2 179,320 128,758 1 Chairman and Chief Executive Officer only. Slight differences between the years are possible, due to foreign currency effects. 2 PSUs were granted in 2014 and 2015; see “Directors, senior management and employees—Compensation—Remuneration framework—Long-term incentives: Equity based incentives (Share Unit Plans)”. Management report 47

The annual remuneration paid for 2014 and 2015 to the current and former members of the Board of Directors for services in all capacities was as follows:

2015 2014 2015 2014 (Amounts in $ thousands except share Short-term Performance Short-term Performance Long-term Long-term information) 20151 20141 Related Related Number of PSUs Number of PSUs Lakshmi N. Mittal $1,746 $1,852 $1,910 $1,916 179,320 128,758 Vanisha Mittal Bhatia 160 185 — — — — Narayanan Vaghul 204 235 — — — — Suzanne P. Nimocks 184 213 — — — — Wilbur L. Ross, Jr. 180 207 — — — — Lewis B. Kaden 244 281 — — — — Bruno Lafont 180 207 — — — — Tye Burt 173 199 — — — — Antoine Spillmann 198 228 — — — — HRH Prince Guillaume de Luxembourg - 199 — — — — Jeannot Krecké 173 199 — — — — Michel Wurth 160 — — — — — Total $3,602 $4,005 $1,910 $1,916 179,320 128,758 1 Remuneration for non-executive Directors with respect to 2014 (paid after shareholder approval at the annual general meeting held on May 5, 2015) is included in the 2014 column. Remuneration for non-executive Directors with respect to 2015 (subject to shareholder approval at the annual general meeting to be held on May 4, 2016) will be paid in 2016 and is included in the 2015 column. Slight differences between the years are possible, due to foreign currency effects.

As of December 31, 2015, any guarantees in favor of any the Chairman and Chief remuneration to members of the ArcelorMittal did not have any member of its Board of Directors. Executive Officer, benefit from an Board of Directors who are not loans or advances outstanding to ArcelorMittal pension plan. executives of the Company members of its Board of Directors None of the members of the The policy of the Company is and ArcelorMittal had not given Board of Directors, including not to grant any share-based

The following tables provide a summary of the options and the exercise price of options, Restricted Share Units (“RSUs”) and Performance Share Units (“PSUs”) granted to the Chairman and Chief Executive Officer, who is the sole executive director on the Board of Directors, as of December 31, 2015.

Options granted Options granted Options granted Options granted Options granted Weighted Average Exercise Price of in 2010 in 2009 in 2008 in 2007 in 2006 Options Total Options Lakshmi N. Mittal 56,500 60,000 60,000 60,000 60,000 336,500 $46.04 Exercise price1 $30.66 $36.38 $78.44 $61.09 $32.07 — $46.04 Term (in years) 10 10 10 10 10 — — Expiration date Aug. 3, 2020 Aug. 4, 2019 Aug. 5, 2018 Aug. 2, 2017 Sep. 1, 2016 — — 1 Due to the spin-off of January 25, 2011, the strike price of outstanding options was reduced by 5% in line with the spin-off ratio. The table above reflects this adjustment.

PSUs granted in 2015 PSUs granted in 2014 PSUs granted in 2013 Lakshmi N. Mittal 179,320 128,758 150,576 Term (in years) 3 3 3 Vesting date 1 June 30, 2018 June 27, 2017 June 28, 2016 1 See “Directors, senior management and employees—Compensation—Remuneration framework—Long-term incentives: Equity based incentives (Share Unit Plans)”, for vesting conditions.

The PSU’s granted in 2012 have not given right to receive ArcelorMittal shares at the end of the vesting period (March 2015) as the performance conditions set at the date of the grant have not been met. 48 Management report

Remuneration of senior allowances, financial services, During 2015, approximately The following table shows the management gasoline and car allowance) $ 300,000 was accrued by remuneration received by the and $4.9 million in short-term ArcelorMittal to provide pension Chief Executive Officer and the The total remuneration paid in performance-related variable benefits to senior management GMB members as determined by 2015 to members of ArcelorMittal’s remuneration consisting of a (other than Mr. Mittal). the ARCG Committee in relation senior management listed in bonus linked to the Company’s to 2015 and 2014, including all “Corporate governance” (including 2014 results. No loans or advances to remuneration components. Mr. Lakshmi N. Mittal in his ArcelorMittal’s senior management capacity as Chief Executive Officer) were made during 2015, and was $5.4 million in base salary and no such loans or advances were other benefits paid in cash (such outstanding as of December 31, as health, life insurance, lunch 2015.

Chief Executive Officer Other GMB Members (Amounts in $ thousands except for Long-term incentives) 2015 2014 2015 20145 Base salary1 1,746 1,852 3,497 7,023 Retirement benefits - - 305 837 Other benefits2 40 41 101 178 Short-term incentives3 1,910 1,916 2,948 6,402 Long-term incentives - fair value in $ thousands4 1,530 2,169 2,431 12,038 - number of share units 179,320 128,758 284,985 714,618 1 Base salary for the Chief Executive Officer has been increased by 2% in April 2015. Base salaries for GMB members have been increased by 2.3% in average in April 2015. Slight differences between the years are possible, due to foreign currency effects. 2 Other benefits comprise benefits paid in cash such as health insurance and other insurances, lunch allowances, financial services, gasoline and car allowances. 3 Short-term incentives are entirely performance-based and are fully paid in cash. The short-term incentive for a given year relates to the Company’s results in the previous year. previous year. 4 Fair value determined at the grant date is recorded as an expense using the straight line method over the vesting period and adjusted for the effect of non-market based vesting conditions. The remuneration expenses recognized for the RSUs/PSUs granted to the Chief Executive Officer and other GMB members was $6.9 million and $7 million for the years ended December 31, 2014 and 2015, respectively. 5 Mr. Michel Wurth is included until his retirement in April 2014.

The Company allocated 2014 remuneration according to the following timeline:

Short term incentive STI payout 2014 performance performance-related PSUs allocation measurement starts Base salary review

Long term Performance measured incentives 3 years

Short term Performance measured incentives (cash)

Base salary and benefits

1/2014 1/2015 March/April 2015 6/2015 12/2015 Management report 49

SOX 304 and clawback policy recovered by the Company. In the Appointments, remuneration and employment (factoring in event that the Board of Directors corporate governance committee equity/long term incentives, any Under Section 304 of the determines that remuneration perquisites and benefits in kind Sarbanes-Oxley Act, the SEC may should be recovered, it may take The primary function of the ARCG and pension contributions). seek to recover remuneration appropriate action on behalf of Committee is to assist the Board from the Chief Executive Officer the Company, including, but not of Directors, among others with The ARCG Committee met 8 times and Chief Financial Officer of the limited to, demanding repayment respect to the following: in 2015. Its members comprise Company in the event that it is or cancellation of cash bonuses, Mr. Lewis Kaden (Chairman), Mr. required to restate accounting incentive-based or equity-based • review and approve corporate Antoine Spillmann, Ms. Suzanne information due to any material remuneration or any gains goals and objectives relevant to Nimocks and Mr. Tye Burt. Regular misstatement thereof or as a realized as the result of options the GMB and other members invitees include Mr. Lakshmi N. result of misconduct in respect of being exercised or awarded or of executive management as Mittal (Chief Executive Officer and a financial reporting requirement long-term incentives vesting. The deemed appropriate by the Chairman) and Mr. Henri Blaffart under the U.S. securities laws (the Board may also choose to reduce committee regarding their (Head of Group Human Resources “SOX Clawback”). future remuneration as a means of remuneration, and assess and Corporate Services). Mr. Henk recovery. performance against goals and Scheffer (Company Secretary) Under the SOX Clawback, the objectives; acts as secretary. The relevant Chief Executive Officer and the 2015 Remuneration policy persons are not present when Chief Financial Officer may have • make recommendations to the their remuneration is discussed by to reimburse ArcelorMittal for Board oversight Board with respect to incentive the ARCG Committee. The ARCG any bonus or other incentive- or remuneration plans and equity- Committee Chairman presents equity-based remuneration The Board is responsible for based plans; its decisions and findings to the received during the 12-month ensuring that the Group’s Board of Directors after each ARCG period following the first public remuneration arrangements • identify candidates qualified to Committee meeting. issuance or filing with the are equitable and aligned with serve as members of the Board SEC (whichever occurs first) the long-term interests of the and the GMB; 2015 Remuneration strategy of the relevant filing, and any Company and its shareholders. It profits realized from the sale of is therefore critical that the Board • recommend candidates to the Scope ArcelorMittal securities during that of Directors remain independent Board for appointment by the 12-month period. of management when making general meeting of shareholders ArcelorMittal’s remuneration decisions affecting remuneration or for appointment by the Board philosophy and framework apply The Board of Directors, through its of the Chief Executive Officer and to fulfill interim Board vacancies; to the following group of senior ARCG Committee, decided in 2012 his direct reports. management: to adopt its own clawback policy • develop, monitor and review (the “Clawback Policy”) that applies To this end, the Board of Directors corporate governance principles • the Chief Executive Officer; and to the members of the GMB and has established the ARCG applicable to the Company; to the Executive Vice President of Committee to assist it in making • the other members of the GMB. Finance, of ArcelorMittal. decisions affecting employee • facilitate the evaluation of the remuneration. All members of the Board; The remuneration philosophy and The Clawback Policy comprises ARCG Committee are required governing principles also apply, cash bonuses and any other to be independent under the • review the succession planning with certain limitations, to a wider incentive-based or equity-based Company’s corporate governance and the executive development group of employees including remuneration, as well as profits guidelines, the NYSE standards of the GMB members; Executive Vice Presidents, Vice from the sale of the Company’s and the 10 Principles of Corporate Presidents, General Managers and securities received during the Governance of the Luxembourg • submit proposals to the Managers. 12-month period following the Stock Exchange. Board on the remuneration first public issuance or filing with of GMB members, and on the the SEC (whichever first occurs) The members are appointed appointment of new directors Remuneration philosophy of the filing that contained by the Board of Directors each and GMB members; the material misstatement of year after the annual general ArcelorMittal’s remuneration accounting information. meeting of shareholders. The • make recommendations to the philosophy for its senior managers members have relevant expertise Board of Directors in respect of is based on the following For purposes of determining or experience relating to the the Company’s framework of principles: whether the Clawback Policy purposes of the ARCG Committee. remuneration for the members should be applied, the Board The ARCG Committee makes of the GMB and such other • provide total remuneration of Directors will evaluate the decisions by a simple majority with members of the executive competitive with executive circumstances giving rise to no member having a casting vote. management as designated remuneration levels of a peer the restatement (in particular, by the committee. In making group composed of a selection of whether there was any fraud or The ARCG Committee is chaired such recommendations, the industrial companies of a similar misconduct), determine when by Mr. Lewis Kaden, Lead committee may take into size and scope; any such misconduct occurred Independent Director. account factors that it deems and determine the amount of necessary. This may include remuneration that should be a member’s total cost of 50 Management report

• encourage and reward Fixed annual salary performance measure generates measures. performance that will lead to a higher performance bonus pay- long-term enhancement of Base salary levels are reviewed out, except as explained below. For the Chief Executive Officer, shareholder value; annually and compared to the the performance bonus at 100% market to ensure that ArcelorMittal The performance bonus for achievement of performance • promote internal pay equity remains competitive with market each individual is expressed as a targets linked to the business plan and provide “market” median median base pay levels. percentage of his or her annual is equal to 100% of his base salary. (determined by reference to its base salary. Performance bonus For the members of the GMB, identified peer group) base pay Short-term incentives pay-outs may range from 50% of the performance bonus at 100% levels for ArcelorMittal’s senior the target bonus for achievement achievement of performance managers with the possibility Annual performance bonus plan of performance measures at the targets linked to the business plan to move up to the third quartile threshold (80%), to up to 150% is equal to 80% of the relevant of the market base pay levels, ArcelorMittal has a short-term for an achievement at or in excess base salary. depending on performance over incentive plan consisting of a of the ceiling of 120%. Between time; and performance-based bonus plan. the 80% threshold and the 120% The different performance Bonus calculations for each ceiling, the performance bonus measures are combined through a • promote internal pay equity and employee reflect the performance is calculated on a proportional, cumulative system: each measure target total direct remuneration of the ArcelorMittal group as a straight-line basis. is calculated separately and is (base pay, bonus, and long term whole and /or the performance added up for the performance incentives) levels for senior of the relevant business units, For the Chief Executive Officer and bonus calculation. managers at the 75th percentile the achievement of objectives other members of the GMB, the of the market. specific to the department and 2015 bonus formula is based on: Performance below threshold will the individual employee’s overall result in zero performance bonus Remuneration framework performance. • Operating income plus payout. depreciation, impairment The ARCG Committee develops The calculation of ArcelorMittal’s expenses and exceptional items The achievement level of proposals on senior management 2015 performance bonus (“EBITDA”) at the Group level: performance for performance remuneration annually for is aligned with its strategic 60% (this acts as “circuit breaker” bonus is summarized as follow: consideration by the Board of objectives of improving health and with respect to group-level Directors. Such proposals include safety performance and overall financial performance measures the following components: competitiveness and the following as explained below); principles: • fixed annual salary; • Free cash flow (“FCF”) at the • no performance bonus will be Group level: 20%; and • short-term incentives (i.e., triggered if the achievement level performance-based bonuses); and of the performance measures is • Health and safety performance at less than the threshold of 80%; the Group level: 20%. • long-term incentives (i.e., stock options (prior to May 2011), RSUs • achievement of 100% of the EBITDA operating as a “circuit and PSUs (after May 2011). performance measure yields breaker” for financial measures 100% of the performance bonus means that the 80% threshold The Company does not have any pay-out; and described above must be met deferred compensation plans for for EBITDA in order to trigger any senior management, including the • achievement of more than bonus payment with respect to Chairman and CEO. 100% and up to 120% of the the EBITDA and FCF performance

Target achievement Target achievement Target achievement Functional level threshold @ 80% @ 100% ≥ ceiling @ 120% Chief Executive Officer 50% of base pay 100% of base pay 150% of base pay Other GMB members 40% of base pay 80% of base pay 120% of base pay

Individual performance and may cause the performance bonus different levels of target bonuses, the short-term incentive award assessment ratings define the pay-out to be higher than 150% are applicable to approximately is determined. The achievement individual bonus multiplier that of the target bonus, up to 225% of 2,000 employees worldwide. of the 2014 Performance Bonus will be applied to the performance target bonus being the absolute Plan with respect to senior bonus calculated based on maximum for the Chief Executive In exceptional cases, there are management and paid out in actual performance against the Officer. Similarly, a reduction factor some entitlements to a retention March/April 2015 was as follows: performance measures. Those will be applied for those at the bonus or a business specific bonus. individuals who consistently lower end. perform at expected levels will At the end of the financial have an individual multiplier of 1. The principles of the performance year, achievement against the For outstanding performers, an bonus plan, with different weights measures is assessed by the ARCG individual multiplier of up to 1.5 for performance measures and Committee and the Board and Management report 51

% Weighting for Chief Executive Officer and GMB 2014 Measures members Assessment EBITDA 60% Incentive attributable to this metric as the assessment was slightly above target FCF 20% Incentive attributable to this metric as the assessment was at the ceiling Health and Safety 20% Incentive attributable to this metric as the assessment was below threshold

Other benefits the May 2015 annual general ArcelorMittal Equity Incentive Plan The members of the GMB shareholders’ meeting to the May (see “GMB PSU Plan”). including the Chief Executive In addition to the remuneration 2016 annual general shareholders’ Officer will be eligible for PSU described above, other benefits meeting, a maximum of 5,000,000 We refer to note 7.3 to the grants. The GMB PSU Plan provides may be provided to senior RSUs and PSUs may be allocated consolidated financial statements for cliff vesting on the third year management and, in certain cases, to eligible employees under the for amounts of PSUs granted. anniversary of the grant date, other employees. These other ArcelorMittal Equity Incentive Plan under the condition that the benefits can include insurance, and the GMB PSU Plan combined. PSUs vest three years after their relevant GMB member continues housing (in cases of international date of grant subject to the to be actively employed by the transfers), car allowances and tax ArcelorMittal equity incentive plan eligible employee’s continued ArcelorMittal group on that date. assistance. employment with the Company If the GMB member is retired on RSUs. RSUs granted under the and the fulfillment of targets that date or in case of an early Long-term incentives: equity- ArcelorMittal Equity Incentive related to the following retirement by mutual consent, the based incentives (share unit plans) Plan are designed to provide a performance measures: return relevant GMB member will not retention incentive to eligible on capital employed (ROCE) and automatically forfeit PSUs and pro On May 10, 2011, the annual employees. RSUs are subject to a strategic measure which was rata vesting will be considered general meeting of shareholders “cliff vesting” after three years, total cost of employment (in U.S. at the end of the vesting period approved the ArcelorMittal Equity with 100% of the grant vesting dollars per tonne) for the steel at the sole discretion of the Incentive Plan, a new equity-based on the third anniversary of the business (TCOE) and the mining Appointments, Remuneration & incentive plan that replaced the grant contingent upon the volume plan and ROCE for the Corporate Governance Committee Global Stock Option Plan. The continued active employment of Mining segment until the 2013 of the Board of Directors. Awards ArcelorMittal Equity Incentive Plan the eligible employee within the grant. As from 2014, most of the under the GMB PSU Plan are is intended to align the interests Group. RSUs are an integral part Steel Business Units have kept subject to the fulfillment of of the Company’s shareholders of the Company’s remuneration only ROCE as a performance cumulative performance criteria and eligible employees by framework. Between 500 and measure and the Mining segment over a three-year period from the allowing them to participate in 700 of the Group’s most senior continued with ROCE and mining date of the PSU grant. The value the success of the Company. The managers are eligible for RSUs. volume plan. In case the level of the grant at grant date will ArcelorMittal Equity Incentive Plan of achievement of performance equal one year of base salary for provides for the grant of RSUs We refer to note 7.3 to the is below threshold, there is the Chief Executive Officer and and PSUs to eligible Company consolidated financial statements no vesting, and the rights are 80% of base salary for other GMB employees and is designed to for amounts of RSUs granted. automatically forfeited. members. Each PSU may give the incentivize employees, improve right to up to two shares of the the Company’s long-term PSUs. The grant of PSUs under GMB PSU plan Company, and each PSU from the performance and retain key the ArcelorMittal Equity 2014 grant may convey the right to employees. On May 8, 2013, Incentive Plan aims to serve The GMB PSU Plan is designed up to one and a half shares. the annual general meeting of as an effective performance- to enhance the long-term shareholders approved the GMB enhancing scheme based on performance of the Company We refer to note 7.3 to the PSU Plan, which provides for the the employee’s contribution to and align the members of the consolidated financial statements grant of PSUs to GMB members. the eligible achievement of the GMB to the Company’s objectives. for amounts of GMB PSUs granted. Until the introduction of the GMB Company’s strategy. Awards in The GMB PSU Plan complements PSU Plan in 2013, GMB members connection with PSUs are subject ArcelorMittal’s existing program Two sets of performance criteria were eligible to receive RSUs and to the fulfillment of cumulative of annual performance-related must be met for vesting of the PSUs under the ArcelorMittal performance criteria over a three- bonuses which is the Company’s PSUs. 50% of the criteria is based Equity Incentive Plan. year period from the date of the reward system for short-term on the Total Shareholder Return PSU grant. The employees eligible performance and achievements. (TSR) defined as the share price The maximum number of RSUs to receive PSUs are a sub-set of The main objective of the GMB at the end of period minus the and PSUs available for grant during the group of employees eligible PSU Plan is to be an effective share price at start of period any given year is subject to the to receive RSUs. The target group performance-enhancing scheme plus any dividend paid divided prior approval of the Company’s for PSU grants initially included for GMB members based on the by the share price at the start of shareholders at the annual general the Chief Executive Officer and the achievement of ArcelorMittal’s the period. “Start of period” and meeting. The annual shareholders’ other GMB members. However, strategy aimed at creating a “end of period” will be defined meeting on May 5, 2015 approved from 2013 onwards, the Chief measurable long-term shareholder by the ARCG Committee of the the maximum to be granted until Executive Officer and other GMB value. Board of Directors. This will then the next annual shareholders’ members receive PSU grants under be compared with a peer group meeting. For the period from the GMB PSU Plan instead of the of companies and the S&P 500 52 Management report

index, each counting for half of The other 50% of the criteria to be The impact of the organizational The following remuneration the weighting. No vesting will take met to trigger vesting of the PSUs changes announced in December charts, which illustrate the various place for performance below 80% is based on the development of 2015 (cross reference to elements of compensation of of the median compared to the Earnings Per Share (EPS), defined Management) on new grants the Chief Executive Officer and peer group or below 80% of the as the amount of earnings per under ArcelorMittal Equity the GMB, are applicable for 2015. S&P 500 index measured over three share outstanding compared to Incentive Plan and the GMB PSU For each of the charts below, the years. a peer group of companies. The plan will be determined by ARCG columns on the left, middle and percentage of PSUs vesting will be Committee and the Board in on the right, respectively, reflect • For 25% of PSUs, performance is 50% for achievement of 80% of the course of 2016. the breakdown of compensation compared to the peer group. The median EPS, 100% for achieving the if targets are not met, met and percentage of PSUs vesting will median EPS and 150% for achieving exceeded. be 50% for achieving 80% of the 120% of the median EPS. Performance consideration median TSR, 100% for achieving the median TSR and 150% for The allocation of PSUs to eligible Remuneration mix achieving 120% of the median GMB members is reviewed by the TSR. ARCG Committee of the Board The target total remuneration of of Directors, which is comprised the Chief Executive Officer and the • For 25% of PSUs, performance of three independent directors, is compared to the S&P 500 and which makes a proposal and GMB is structured to attract and index. The percentage of PSUs recommendation to the full Board retain executives; the amount of vesting will be 50% for achieving of Directors. The vesting criteria of the remuneration actually received performance equal to 80% of the PSUs are also monitored by the is dependent on the achievement the index, 100% for achieving ARCG Committee. of superior business and individual a performance equal to the For further detail on the stock performance and on generating index and 150% for achieving a option plan, RSU Plan and PSU sustained shareholder value from performance equal to index plus plan, including the total number relative performance. an outperformance of 2%. of shares outstanding, fair value, and exercise prices, please see note 7.3 to the consolidated financial statements.

CEO Remuneration mix Other GMB Members - CEO Remuneration mix

150% 120%

100% 80% 225% 180% 80% 100% 9% 9% 9%

100% 100% 100% 100% 100% 100%

Below Threshold Target Maximum Below Threshold Target Maximum

Base salary Other benefits Long term incentives Base salary Other benefits Short term incentives Long term incentives Management report 53

Major shareholders and related party transactions

Major shareholders

The following table sets out information as of December 31, 2015 with respect to the beneficial ownership of ArcelorMittal ordinary shares by each person who is known to be the beneficial owner of more than 5% of the shares and all directors and senior management as a group.

ArcelorMittal Ordinary Shares 1 Number % Significant Shareholder2 655,944,511 39.39 Treasury Shares 3 8,581,090 0.52 Other Public Shareholders 1,000,866,621 60.09 Total 1,665,392,222 100.00 Of which: Directors and Senior Management 4 1,888,718 0.11

1 For purposes of this table, a person or group of persons is deemed to have beneficial ownership of any ArcelorMittal ordinary shares as of a given date on which such person or group of persons has the right to acquire such shares within 60 days after December 31, 2015 upon exercise of vested portions of stock options. All stock options that have been granted to date by ArcelorMittal have vested. 2 For purposes of this table, ordinary shares owned directly by Mr. and his wife, Mrs. Usha Mittal, and options held directly by Mr. Lakshmi Mittal, are aggregated with those ordinary shares beneficially owned by the Significant Shareholder. At December 31, 2015. Mr. Lakshmi Mittal and his wife, Mrs. Usha Mittal, had direct ownership of ArcelorMittal ordinary shares and indirect ownership, through the Significant Shareholder, of two holding companies that own ArcelorMittal ordinary shares—Nuavam Investments S.à.r.l. (“Nuavam”) and Lumen Investments S.à r.l. (“Lumen”). Nuavam, a limited liability company organized under the laws of Luxembourg, was the owner of 112,338,263 ArcelorMittal ordinary shares. Lumen, a limited liability company organized under the laws of Luxembourg, was the owner of 542,910,448 ArcelorMittal ordinary shares. Mr. Mittal was the direct owner of 314,300 ArcelorMittal ordinary shares and held options to acquire an additional 336,500 ArcelorMittal ordinary shares, all of which are, for the purposes of this table, deemed to be beneficially owned by Mr. Mittal due to the fact that these options are exercisable within 60 days. Mrs. Mittal was the direct owner of 45,000 ArcelorMittal ordinary shares. Mr. Mittal, Mrs. Mittal and the Significant Shareholder shared indirect beneficial ownership of 100% of each of Nuavam and Lumen (within the meaning set forth in Rule 13d-3 of the Exchange Act). Accordingly, Mr. Mittal was the beneficial owner of 655,899,511 ArcelorMittal ordinary shares, Mrs. Mittal was the beneficial owner of 655,293,711 ordinary shares and the Significant Shareholder (when aggregated with ordinary shares of ArcelorMittal and options to acquire ordinary shares of ArcelorMittal held directly by Mr. and Mrs. Mittal) was the beneficial owner of 655,944,511 ordinary shares. Excluding options, Mr. Lakshmi Mittal and Mrs. Usha Mittal together beneficially owned 655,608,011 ArcelorMittal ordinary shares at such date. 3 Represents ArcelorMittal ordinary shares repurchased pursuant to share repurchase programs in prior years, fractional shares returned in various transactions, and the use of treasury shares in various transactions in prior years; includes (1) 942,801 stock options that can be exercised by senior management (other than Mr. Mittal) and (2) 336,500 stock options that can be exercised by Mr. Mittal, in each case within 60 days of December 31, 2015, i.e. 0.08% of the total amount of outstanding shares. If exercised, the shares underlying these options will either have to be delivered out of Treasury shares or by the issuance of additional shares. 4 Includes shares beneficially owned by directors and members of senior management; excludes shares beneficially owned by Mr. Mittal. Note that (i) stock options included that are exercisable within 60 days are excluded from “Treasury Shares” above (see also note 3 above) and (ii) ordinary shares included in this section are included in “Other Public Shareholders” above.

On January 16, 2013, ArcelorMittal ArcelorMittal held directly by Mr. register kept by or on behalf of At December 31, 2015, there issued $2.25 billion aggregate and Mrs. Mittal) holds 37.41% of ArcelorMittal by its New York were 218 registered shareholders principal amount of its 6% the outstanding shares. transfer agent. holding an aggregate of Mandatorily Convertible Notes due 87,937,505 New York Shares, 2016, of which Lumen subscribed The ArcelorMittal ordinary shares Under Luxembourg law, the representing approximately for $300 million in principal may be held in registered form ownership of registered shares 5.28% of the ordinary shares amount. on the Company’s register only. is evidenced by the inscription issued (including treasury shares). Registered shares are fully fungible of the name of the shareholder, ArcelorMittal’s knowledge of the As of December 31, 2015, and may consist of: the number of shares held number of New York Shares held 1,817,869 Mandatorily Convertible by such shareholder and the by U.S. holders is based solely Notes had been converted at a. ArcelorMittal Registry Shares, amount paid up on each share on the records of its New York the option of their holders. On which are registered directly in the shareholder register of transfer agent regarding registered January 15, 2016, ArcelorMittal on ArcelorMittal’s Luxembourg ArcelorMittal. ArcelorMittal ordinary shares. issued 137,967,116 new ordinary shareholder register, shares of the Company upon b. shares traded on Euronext At December 31, 2015, 2,420 At December 31, 2015, conversion as at such date of Amsterdam, Euronext Paris, shareholders other than the 872,866,703 ArcelorMittal ordinary the 88,182,131 outstanding the regulated market of the Significant Shareholder, holding shares were held through the Mandatorily Convertible Notes Luxembourg Stock Exchange an aggregate of 49,339,303 Euroclear/Iberclear clearing at a conversion ratio of 1.56457. and the Spanish Stock ArcelorMittal ordinary shares system in The Netherlands, France, Following this issuance, the Exchanges, which are held in were registered in ArcelorMittal’s Luxembourg and Spain. share capital of the Company is Euroclear, or shareholder register, representing comprised of 1,803,359,338 Shares c. shares traded on the NYSE, approximately 2.96% of the Voting rights and the Significant Shareholder named New York Registry ordinary shares issued (including (when aggregated with ordinary Shares, which are registered treasury shares). Each share entitles the holder to shares of ArcelorMittal and options (including in the name of one vote at the general meeting of to acquire ordinary shares of the nominee of DTC) in a shareholders, and no shareholder 54 Management report

benefits from specific voting and Share Lending Agreement in that all outstanding loans would “Purchasing Services Agreement”) rights. For more information connection therewith terminate on the date which was and a sourcing services agreement relating to ArcelorMittal shares, three business days after the date for negotiation services from see “Memorandum and Articles ArcelorMittal issued 104,477,612 on which a general meeting of ArcelorMittal Sourcing (the of Association, Voting and ordinary shares in an offering shareholders of ArcelorMittal had “Sourcing Services Agreement”), information rights”. that closed on January 14, 2013 approved a resolution approving certain commitments regarding (the “Share Offering”) and issued sufficient authorized share capital cost-sharing in Brazil and certain Related Party Transactions $2,250,000,000 aggregate principal and authorizing the Board of other ancillary arrangements amount of 6.00% Mandatorily Directors of the Company to cancel governing the relationship ArcelorMittal engages in certain Convertible Subordinated Notes the preferential subscription right between Aperam and commercial and financial due 2016 (the “MCNs”) in an of existing shareholders to allow ArcelorMittal following the spin- transactions with related parties, offering that closed on January return to Lumen of all borrowed off, as well as certain agreements including associates and joint 16, 2013. Lumen subscribed for ordinary shares. Under the share relating to financing. ventures of ArcelorMittal. Please 17,910,448 ordinary shares in lending agreement, Lumen had refer to note 11 of ArcelorMittal’s the Share Offering and acquired no rights (including voting or The Transitional Services consolidated financial statements. $300 million in principal amount disposition rights) with respect Agreement between ArcelorMittal of MCNs. The underwriting to any ordinary shares that had and Aperam expired at year-end Shareholder’s Agreement agreement entered into in been loaned to ArcelorMittal 2012. The parties agreed to renew connection with such offerings and not yet returned to Lumen. a very limited number of services The Significant Shareholder, a provided as a closing condition Subject to this condition being where expertise and bargain holding company owned by that Lumen and Nuavam each met, it was expected that any powers create values for both the Significant Shareholder and execute a lock-up letter whereby ordinary shares to be delivered parties. ArcelorMittal will continue ArcelorMittal are parties to a they would each agree not to offer, by ArcelorMittal to Lumen upon to provide certain services shareholder and registration sell, contract to sell, pledge, grant termination of the loan(s) would during 2016 relating to certain rights agreement (the any option to purchase, make any be newly issued ordinary shares areas, including environmental “Shareholder’s Agreement”) short sale or otherwise dispose of, issued in favor of Lumen (with a and technical support and dated August 13, 1997. Pursuant directly or indirectly, any ordinary cancellation of the shareholders’ administration of the shareholders to the Shareholder’s Agreement shares, the acquired MCNs or other preferential subscription right). register. and subject to the terms and securities exchangeable for or The extraordinary general meeting conditions thereof, ArcelorMittal convertible into ordinary shares of shareholders of ArcelorMittal In the area of research and shall, upon the request of certain owned by them for a period of that took place on May 8, 2013 development, Aperam entered holders of restricted ArcelorMittal at least 180 days from January 9, (the “May 2013 EGM”) approved into a frame arrangement with shares, use its reasonable efforts 2013, subject to certain limited sufficient authorized share capital ArcelorMittal to establish a to register under the Securities exceptions or the prior written and authorized the Board of framework for future cooperation Act of 1933, as amended, the sale consent of the representatives. Directors of the Company to cancel between the two groups in of ArcelorMittal shares intended In connection with the Share the preferential subscription right relation to certain ongoing or to be sold by those holders. Offering and the offering of the of existing shareholders to allow new research and development By its terms, the Shareholder’s MCNs, ArcelorMittal entered return to Lumen of all borrowed programs. Currently, only limited Agreement may not be amended, into a share lending agreement ordinary shares. Accordingly, the research and development other than for manifest error, with Lumen on January 9, 2013, share lending agreement with support for existing projects except by approval of a majority of pursuant to which Lumen agreed Lumen was terminated three are implemented through such ArcelorMittal’s shareholders (other to make available for borrowing business days after the date of the agreement. than the Significant Shareholder by ArcelorMittal up to a maximum May 2013 EGM. and certain permitted transferees) amount of 48.9 million ordinary The purchasing and sourcing at a general shareholders’ meeting. shares in exchange for a loan fee of Agreements with Aperam post- of raw materials generally were $0.00046 per lent ordinary share, Stainless Steel Spin-Off not covered by the Transitional Memorandum of Understanding accruing daily from and including Services Agreement. Aperam is the date on which the loaned In connection with the spin-off responsible for the sourcing of The Memorandum of ordinary shares were delivered to of its stainless steel division into its key raw materials, including Understanding entered into in the borrower to, but excluding, a separately focused company, nickel, chromium, molybdenum connection with the Mittal Steel the date of return of the borrowed Aperam, which was completed and stainless steel scrap. However, acquisition of Arcelor, certain ordinary shares. Under the share on January 25, 2011, ArcelorMittal under the terms of the Purchasing provisions of which expired in lending agreement, deliveries entered into several agreements Services Agreement, Aperam still August 2009 and August 2011, of the loaned shares by Lumen with Aperam and/ or certain relies on ArcelorMittal for services is described under “Material was to occur on the dates an Aperam subsidiaries. These in relation to the negotiation of contracts, Memorandum of equal number of ordinary shares agreements include a Master certain contracts with global or Understanding”. were required to be delivered Transitional Services Agreement large regional suppliers, including by ArcelorMittal pursuant to the dated January 25, 2011 (the those relating to the following Acquisition of ordinary shares and terms of the MCNs. The share “Transitional Services Agreement”) key categories: metallic (carbon mandatorily convertible notes lending agreement provided that for support for/from corporate scraps), operating materials in the January 2013 offering of ArcelorMittal could terminate all activities, a purchasing services (rolls, electrodes, refractory such securities by ArcelorMittal, or any portion of any loan made agreement for negotiation services materials), spare parts, industrial and entry into the Lock-Up Letter there under at any time and from ArcelorMittal Purchasing (the products and services. The Management report 55

purchasing services agreement Acquisition of inventories any other manner as well as the securities in book-entry form. also permits Aperam to avail itself transfer by sale, exchange or in any of the services and expertise of Mr. Lakshmi N. Mittal acquired other manner of shares, bonds, The ArcelorMittal ordinary shares ArcelorMittal for certain capital inventories on February 18, 2015 debt securities, warrants and other may be held in registered form expenditure items. The Purchasing from ArcelorMittal Luxembourg securities and instruments of any on the Company’s register only. Services Agreement and the pertaining to the Company’s kind. Registered shares are fully fungible Sourcing Services Agreement former headquarters. Such and may consist of: were each entered into for an inventories were valued by an It may grant assistance to any initial term of two years, which independent expert and acquired affiliated company and take a. ArcelorMittal Registry Shares, was to expire on January 24, 2013. at arm’s length. any measure for the control and which are registered directly However, since that date, the supervision of such companies. on ArcelorMittal’s Luxembourg Purchasing Services Agreement Memorandum and Articles of shareholder register, has been extended successively, Association It may carry out any commercial, while the Sourcing Services financial or industrial operation b. shares traded on Euronext Agreement was limited to IT Below is a summary of or transaction that it considers to Amsterdam, Euronext Paris, services as of October 2013. It ArcelorMittal’s Articles of be directly or indirectly necessary the regulated market of the is expected that the term of the Association, filed as an exhibit or useful in order to achieve or Luxembourg Stock Exchange Purchasing Services Agreement to this annual report on Form further its corporate purpose. and the Spanish Stock will be further extended until the 20-F and incorporated by Exchanges, which are held in end of January 2017. The Sourcing reference herein. The full text Form and transfer of shares Euroclear, or Service Agreement will remain of the Company’s Articles of in force at least until September Association is also available The shares of ArcelorMittal are c. shares traded on the NYSE, 2016 as certain IT services are still on www.arcelormittal.com issued in registered form only and named New York Registry provided but Aperam has switched under “Investors—Corporate are freely transferable. There are Shares, which are registered in a to its own IT system. Beginning Governance-Board of Directors.” no restrictions on the rights of register (including in the name in 2016, Aperam purchases, in Luxembourg or non-Luxembourg of the nominee of DTC) kept by Europe, most of its natural gas with Corporate purpose residents to own ArcelorMittal or on behalf of ArcelorMittal by ArcelorMittal Energy. shares. its New York transfer agent. Article 3 of the Articles of Purchasing activities will continue Association provide that the Under Luxembourg law, the Since March 2009, ArcelorMittal to be provided to Aperam corporate purpose of ArcelorMittal ownership of registered shares is has used the services of BNP pursuant to existing contracts with is the manufacture, processing and evidenced by the inscription of Paribas Securities Services to ArcelorMittal entities that it has marketing of steel, steel products the name of the shareholder, the assist it with certain administrative specifically elected to assume. and all other metallurgical number of shares and the amount tasks relating to the day-to-day products, as well as all products paid up on each share in the administrative management of the In connection with the spin-off, and materials used in their shareholders’ register. Each transfer shareholders’ register. management also renegotiated manufacture, their processing of shares is made by a written an existing Brazilian cost-sharing and their marketing, and all declaration of transfer recorded The law of April 6, 2013 concerning agreement between ArcelorMittal industrial and commercial activities in the shareholders’ register of dematerialized securities allows Brasil and Aperam Inox América connected directly or indirectly ArcelorMittal, dated and signed by Luxembourg issuers to opt for the do Sul S.A. (formerly known with those objects, including the transferor and the transferee full dematerialization of shares. If as ArcelorMittal Inox Brasil), mining and research activities and or by their duly appointed agent. ArcelorMittal were to opt for full pursuant to which starting as of the creation, acquisition, holding, ArcelorMittal may accept and enter dematerialization in the future, April 1, 2011, ArcelorMittal Brasil exploitation and sale of patents, into its shareholders’ register any shareholders would be required continued to perform purchasing, licenses, know-how and, more transfer based on an agreement to hold their shares in a securities insurance and real estate activities generally, intellectual and industrial between the transferor and the account at a bank or other financial for the benefit of certain of property rights. transferee provided a true and intermediary, which would in turn Aperam’s Brazilian subsidiaries, complete copy of the agreement is hold the shares via an account with costs being shared on the The Company may realize provided to ArcelorMittal. with a securities depository such basis of cost allocation parameters its corporate purpose either as Clearstream or Euroclear. agreed between the parties. From directly or through the creation The Articles of Association provide Dematerialized securities would the demerger of ArcelorMittal of companies, the acquisition, that shares may be held through be solely represented by account BioEnergia Ltda on July 1, 2011, holding or acquisition of interests a securities settlement (clearing) entries with the securities its payroll functions were also in any companies or partnerships, system or a professional depositary depositary and would therefore handled by ArcelorMittal Brasil. membership in any associations, of securities. Shares held in this exist only in electronic form. If The real estate, insurance activities consortia and joint ventures. manner have the same rights ArcelorMittal were to opt for the and payroll functions of Aperam’s and obligations as the registered full dematerialization of its shares, Brazilian subsidiaries have not In general, the Company’s shares. Shares held through a it would no longer be possible been handled by ArcelorMittal corporate purpose comprises securities settlement system for shareholders to hold shares Brasil since January 1, 2013, June the participation, in any form or a professional depositary of through a direct, nominative 30, 2013, and June 27, 2014 whatsoever, in companies and securities may be transferred registration in the Company’s respectively. partnerships and the acquisition in accordance with customary register of shareholders as is by purchase, subscription or in procedures for the transfer of currently the case. 56 Management report

Issuance of shares share capital amounted to Repurchase of shares (the “General Meeting”) decided €6,883,209,119.84, represented (a) to cancel with effect as of the The issuance of shares by by 1,665,392,222 ordinary ArcelorMittal is prohibited by date of the General Meeting the ArcelorMittal requires either shares and was unchanged at Luxembourg law from subscribing authorization granted to the an amendment of the Articles December 31, 2015. Following for its own shares. ArcelorMittal Board of Directors by the general of Association approved by an the mandatory conversion on may, however, repurchase its own meeting of shareholders held on extraordinary general meeting of January 15, 2016 of outstanding shares or have another person May 11, 2010 with respect to the shareholders (EGM) or a decision Notes of the Company’s repurchase shares on its behalf, share buy-back program, and (b) of the Board of Directors that is $2.25 billion 6% Mandatorily subject to certain conditions, to authorize, effective immediately within the limits of the authorized Convertible Notes due 2016, the including: after the General Meeting, the share capital set out in the Articles Company’s issued share capital Board of Directors, with option to of Association. In the latter case, was increased by €570,231,887.14 • a prior authorization of the delegate, and the corporate bodies the Board of Directors may from €6,883,209,119.84 to general meeting of shareholders of the other companies in the determine the conditions for the €7,453,441,006.98 represented setting out the terms and ArcelorMittal group in accordance issuance of shares, including the by 1,803,359,338 shares without conditions of the proposed with the Luxembourg law of consideration (cash or in kind) nominal value. repurchase, including the August 10, 1915 on commercial payable for such shares. maximum number of shares to companies, as amended (the Article 5 of the Company’s Articles be repurchased, the duration “Law”), to acquire and sell shares in The EGM may not validly of Association has been amended of the period for which the the Company in accordance with deliberate unless at least half of to reflect this change. The authorization is given (which the Law and any other applicable the share capital is present or Company’s Articles of Association may not exceed five years) and laws and regulations, including represented upon the first call. have been published on www. the minimum and maximum but not limited to entering into If the quorum is not met, the arcelormittal.com and filed with consideration per share; off-market and over-the-counter meeting may be reconvened as the Luxembourg Register of transactions and to acquire shares described in “General Meetings of Commerce and Companies on • the repurchase may not reduce in the Company through derivative Shareholders” below. The second February 2, 2016. The Company the net assets of ArcelorMittal financial instruments. meeting will be held regardless filed this version of the Articles of on a non-consolidated basis of the proportion of share capital Association as exhibit 4.5 to the to a level below the aggregate Any acquisitions, disposals, represented. At both meetings, post-effective amendment to its of the issued share capital and exchanges, contributions resolutions, in order to be adopted, registration statement on Form F-3 the reserves that ArcelorMittal or transfers of shares by the must be carried by at least two- dated February 5, 2016 (File No. must maintain pursuant to Company or other companies in thirds of the votes cast. 333-202409). Luxembourg law or its Articles of the ArcelorMittal group must be Association; and in accordance with Luxembourg The Company’s authorized share Preemptive rights laws transposing Directive 2003/6/ capital was increased by 19.84% • only fully paid-up shares may EC regarding insider dealing and of its then issued share capital to Unless limited or cancelled by the be repurchased. At December market manipulation as repealed €8,249,049,316.38 represented Board of Directors as described 31, 2015, all of ArcelorMittal’s and replaced by (EU) Regulation by 1,995,857,213 shares at the below or by an EGM, holders of issued ordinary shares were fully No. 596/2014 of the European extraordinary shareholders’ ArcelorMittal shares have a pro paid-up. Parliament and of the Council of meeting held on May 8, 2013 and rata preemptive right to subscribe April 16, 2014 on market abuse was unchanged at December for newly issued shares, except for In addition, Luxembourg law and EC Regulation No. 2273/2003 31, 2015. The authorization shares issued for consideration allows the Board of Directors regarding exemptions for buy- allowing the Board of Directors other than cash (i.e., in kind). to approve the repurchase of back programmes and stabilization to issue further shares out of the ArcelorMittal shares without the of financial instruments and may authorized share capital was also The Articles of Association provide prior approval of the general be carried out by all means, on or renewed at the extraordinary that preemptive rights may meeting of shareholders if off-market, including by a public shareholders’ meeting held on May be limited or cancelled by the necessary to prevent serious and offer to buy-back shares, or by 8, 2013, and expires five years from Board of Directors in the event imminent harm to ArcelorMittal. the use of derivatives or option the date of publication of the EGM of an increase in the Company’s In such a case, the next general strategies. The fraction of the deed in the Official Luxembourg issued share capital until the meeting of shareholders must capital acquired or transferred in Gazette Mémorial C, which date five years from the date be informed by the Board of the form of a block of shares may occurred on July 3, 2013. This of publication in the Official Directors of the reasons for and amount to the entire program. authorization may be renewed Luxembourg Gazette Mémorial C the purpose of the acquisitions from time to time by an EGM for of the relevant meeting minutes, made, the number and nominal Such transactions may be carried periods not to exceed five years which publication occurred on values, or in the absence thereof, out at any time, including during each. July 3, 2013 with respect to the the accounting par value of the a tender offer period, subject to minutes of the EGM held on May shares acquired, the proportion of applicable laws and regulations Following the increase of the 8, 2013. This power of the Board the issued share capital that they including Section 10(b) and Company’s issued share capital of Directors may from time to represent, and the consideration Section 9(a)(2) of the Securities by 104,477,612 ordinary shares time be renewed by an EGM for paid for them. Exchange Act of 1934, as amended in connection with its offering subsequent periods not to exceed (the “Exchange Act”), and Rule of shares on January 14, 2013, five years each. The general meeting of 10b-5 promulgated under the the Company’s total issued shareholders held on May 5, 2015 Exchange Act. Management report 57

The authorization is valid for shareholders there is no quorum Voting and information rights made available on the website a period of five years, i.e., until requirement and resolutions are of the Company. The completed the annual general meeting of adopted by a simple majority, The voting and information rights and signed proxy must be sent shareholders to be held in May irrespective of the number of of ArcelorMittal’s shareholders to the Company in accordance 2020, or until the date of its shares represented. Ordinary have been further expanded with the instructions set out in the renewal by a resolution of the general meetings deliberate on since the entry into force of the convening notice. general meeting of shareholders any matter that does not require Shareholders’ Rights Law on July if such renewal date is prior to the the convening of an extraordinary 1, 2011. General meetings of shareholders expiration the five-year period. general meeting. are convened by the publication There are no restrictions on the of a notice at least 30 days Capital reduction Extraordinary general meetings of rights of Luxembourg or non- before the meeting date in a shareholders. Luxembourg residents to vote Luxembourg newspaper, in The Articles of Association provide ArcelorMittal shares. Each share the Luxembourg official legal that the issued share capital of An extraordinary general meeting entitles the shareholder to attend a gazette, the Mémorial, Recueil des ArcelorMittal may be reduced must be convened to deliberate on general meeting of shareholders in Sociétés et Associations, and by subject to the approval of at least the following types of matters: person or by proxy, to address the way of press release sent to the two-thirds of the votes cast at an general meeting of shareholders major news agencies. Ordinary extraordinary general meeting •an increase or decrease of the and to vote. Each share entitles the general meetings are not subject of shareholders where at first authorized or issued share holder to one vote at the general to any minimum shareholder call at least 50% of the issued capital, meeting of shareholders. There participation level. Extraordinary share capital is required to be is no minimum shareholding general meetings, however, are represented, with no quorum •a limitation or exclusion (beyond owning a single share subject to a minimum quorum being required at a reconvened of existing shareholders’ or representing the owner of a of 50% of the share capital. In the meeting. preemptive rights, single share) required to be able event the 50% quorum is not met to attend or vote at a general upon the first call, the meeting General meeting of shareholders •the acquisition by any person of meeting of shareholders. may be reconvened by way of 25% or more of the issued share convening notice published in the The Shareholders’ Rights Law of capital of ArcelorMittal, The Board of Directors may also same manner as the first notice, at May 24, 2011, which transposes decide to allow shareholders to least 17 days before the meeting into Luxembourg law Directive •approving a merger or similar vote by correspondence by means date. No quorum is required upon 2007/36/EC of the European transaction such as a spin-off, of a form providing for a positive or the second call. Parliament and of the Council of and negative vote or an abstention on July 11, 2007 on the exercise of each agenda item. The conditions Shareholders whose share certain rights of shareholders in •any transaction or matter for voting by correspondence ownership is directly registered listed companies of July 14, 2007 requiring an amendment of the are set out in the Articles of in the shareholders’ register of came into force on July 1, 2011. Articles of Association. Association and in the convening the Company must receive the notice. convening notice by regular mail, The Shareholders’ Rights Law The extraordinary general unless they have accepted to abolished the blocking period and meeting must reach a quorum The Board of Directors may decide receive it through other means introduced the record date system of shares present or represented to arrange for shareholders to (i.e., electronically). In addition, into Luxembourg law. As set out at the meeting of 50% of the be able to participate in the all materials relating to a general in the Articles of Association, share capital in order to validly general meeting by electronic meeting of shareholders must be the record date applicable to deliberate. If this quorum is not means by way, among others, of made available on the website of ArcelorMittal is the 14th day at reached, the meeting may be (i) real-time transmission to the ArcelorMittal from the first date midnight before the general reconvened and the second public of the general meeting, of publication of the convening meeting date. Only the votes of meeting will not be subject to any (ii) two-way communication notice. shareholders who are shareholders quorum requirement. In order to enabling shareholders to of the Company on the record be adopted by the extraordinary address the general meeting Based on an amendment voted date will be taken into account, general meeting (on the first or from a remote location, or (iii) by the extraordinary general regardless of whether they remain the second call), any resolution a mechanism allowing duly meeting of shareholders on May shareholders on the general submitted must be approved by at identified shareholders to cast 8, 2012, the Articles of Association meeting date. Shareholders who least two-thirds of the votes cast their votes before or during the of ArcelorMittal provide that intend to participate in the general except for certain limited matters general meeting without the need the annual general meeting of meeting must notify the Company where the Articles of Association for them to appoint a proxyholder shareholders is held each year at at the latest on the date indicated require a higher majority (see who would be physically present a date and time set by the Board in the convening notice of their “Amendment of the Articles at the meeting. of Directors during the second intention to participate (by proxy of Association”). Votes cast do or third week of May, between or in person). not include votes attaching to A shareholder may act at any 9.00 a.m. and 4.00 p.m. Central shares with respect to which the general meeting of shareholders European Time, in Luxembourg. Ordinary general meetings of shareholder has not taken part by appointing another person shareholders. in the vote, has abstained or has (who need not be a shareholder) Luxembourg law requires the returned a blank or invalid vote. as his or her attorney by means Board of Directors to convene a At an ordinary general meeting of of a written proxy using the form general meeting of shareholders 58 Management report

if shareholders representing their appointment. The directors Any transaction between ArcelorMittal’s Articles of in the aggregate 10% of the of ArcelorMittal are elected for ArcelorMittal or a subsidiary of Association provide that, from issued share capital so require three-year terms. Any director may ArcelorMittal and a Director (or August 1, 2009, the Significant in writing with an indication of be removed with or without cause an affiliate of a Director) must be Shareholder is entitled to the requested agenda. In this by a simple majority vote at any conducted on arm’s length terms nominate a number of candidates case, the general meeting of general meeting of shareholders. and, if material, must obtain the for election by the shareholders shareholders must be held within approval of the Independent to the Board of Directors in one month of the request. If the (a) a director’s power to vote on Directors. proportion to its shareholding. The requested general meeting of a proposal, arrangement or Significant Shareholder has not shareholders is not so convened, contract in which the director is (d) retirement or non-retirement exercised this right to date. the relevant shareholder or group materially interested; of directors under an age limit of shareholders may petition the requirement Amendment of the Articles of competent court in Luxembourg If a Director has an interest in Association to have a court appointee convene a transaction that is submitted There is no retirement or non- the general meeting. to the Board of Directors for retirement of directors under an Any amendments to the Articles Shareholders representing in the approval and this interest conflicts age limit requirement. However, of Association other than those aggregate 5% of the issued share with that of ArcelorMittal (other on October 30, 2012, the Board described below must be capital may also request that than transactions which are part of Directors adopted a policy that approved by an extraordinary additional items be added to the of current operations and are places limitations on the terms general meeting of shareholders agenda of a general meeting and entered into under, arms’ length of independent directors as well held in the presence of a may draft alternative resolutions conditions), the Director must as the number of directorships Luxembourg notary, followed to be submitted to the general advise the Board of Directors of Directors may hold in order to by the publications required by meeting regarding existing the existence and nature of the align the Company’s corporate Luxembourg law. agenda items. The request must conflict and cause a record of his/ governance practices with best be made in writing and sent either her statement to be included in practices in this area. The policy In order to be adopted, to the electronic address or to the the minutes of the meeting. In provides that an independent amendments of the Articles Company’s postal address set out addition, the Director may not take director may not serve on the of Association of ArcelorMittal in the convening notice. part in the deliberations on the Board of Directors for more than relating to the size and the transaction. At the next following 12 consecutive years, although requisite minimum number of The Shareholders’ Rights Law general meeting of shareholders the Board of Directors may, by way independent and non-executive provides that a company’s of ArcelorMittal, before any other of exception to this rule, make an directors of the Board of Directors, articles of association may allow resolution is put to a vote, a special affirmative determination, on a the composition of the Audit shareholders to ask questions prior report will be made by the Board case-by-case basis, that he or she & Risk Committee, and the to the general meeting which will of Directors to the shareholders’ may continue to serve beyond nomination rights to the Board be answered by management meeting on any such transaction. the 12 years rule if the Board of of Directors of the Significant during the general meeting’s Directors considers it to be in Shareholder require a majority questions and answers session (b) the directors’ power, in the the best interest of the Company of votes representing two-thirds prior to the vote on the agenda absence of an independent based on the contribution of the of the voting rights attached to items. Although the Articles quorum, to vote compensation Director involved and the balance the shares in ArcelorMittal. The of Association of ArcelorMittal to themselves or any members of between the knowledge, skills, same majority rule would apply to do not specifically address this their body; experience and need for renewal amendments of the provisions of point, shareholders may ask of the Board. the Articles of Association that set questions in writing ahead of a The remuneration of the Directors out the foregoing rule. general meeting, which are taken is determined each year by (e) number of shares, if any, into account in preparing the the annual general meeting of required for director’s Annual accounts general meeting’s questions and shareholders subject to Article qualification. answers session. With regard to 17 of the Articles of Association. Each year before submission the May 5, 2015 general meeting, The annual shareholders meeting Article 8.2 of the Articles of to the annual ordinary general shareholders were expressly of the Company decides on Association states that the meeting of shareholders, the encouraged to send questions the directors’ remuneration. members of the Board of Directors Board of Directors approves the and comments to the Company in The Chairman & CEO is not do not have to be shareholders parent company accounts for advance by writing to a dedicated remunerated for his membership in the Company. However, the ArcelorMittal, the parent company e-mail address indicated in the of the Board of Directors. The Board of Directors has introduced of the ArcelorMittal group as well as convening notice. remuneration of the Chairman & on April 27, 2015 a policy that the annual consolidated accounts CEO is determined by the Board’s requires members of the Board of of the ArcelorMittal group, each of Election and removal of directors. ARCG Committee, which consists Directors to hold 10,000 shares in which are prepared in accordance Members of the Board of Directors solely of independent directors. the Company (15,000 for the Lead with IFRS. The Board of Directors are elected by simple majority For more information, see “– Independent Director). For more also approves the management of the represented shareholders Compensation”. information, see “Board Practices/ reports on each of the stand-alone at an ordinary general meeting Corporate Governance, Specific audited annual accounts and the of shareholders. Directors are (c) borrowing powers exercisable characteristics of the Director role”. consolidated annual accounts, and elected for a period ending on a by the directors and how such in respect of each of these sets of date determined at the time of borrowing powers can be varied; accounts a report must be issued Management report 59

by the independent auditors. of shares in the beneficiary this person is obliged to make consideration offered in the offer companies to the shareholders an offer for the remaining shares or consist solely of cash. Moreover, The annual accounts, the annual of the company being divided in ArcelorMittal. In a mandatory an all-cash option must be offered consolidated accounts, the or to such company, and certain bid situation the “fair price” is in to the remaining ArcelorMittal management reports and the similar restructurings must be principle considered to be the shareholders. Finally, the right to auditor’s reports will be available approved by an extraordinary highest price paid by the offeror or initiate squeeze-out proceedings on request from the Company general meeting of shareholders a person acting in concert with the must be exercised within three and on the Company’s website of the relevant companies held offeror for the securities during the months following the expiration of from the date of publication of the in the presence of a notary. These 12–month period preceding the the offer. convening notice for the annual transactions require the approval mandatory bid. ordinary general meeting of of at least two-thirds of the Sell-out right. shareholders. votes cast at a general meeting ArcelorMittal’s Articles of The Takeover Law provides that, of shareholders of each of the Association provide that any when an offer (mandatory or The parent company accounts companies where at least 50% of person who acquires shares giving voluntary) is made to all of the and the consolidated accounts, the share capital is represented them 25% or more of the total holders of voting securities of after their approval by the annual upon first call, with no such voting rights of ArcelorMittal must ArcelorMittal and if after such ordinary general meeting of quorum being required at a make or cause to be made, in each offer the offeror holds securities shareholders, are filed with the reconvened meeting. country where ArcelorMittal’s carrying more than 90% of the Luxembourg register of trade and securities are admitted to trading voting rights, the remaining companies. Liquidation on a regulated or other market security holders may require that and in each of the countries in the offeror purchase the remaining Dividends In the event of the liquidation, which ArcelorMittal has made securities of the same class. The dissolution or winding-up of a public offering of its shares, price offered in a voluntary offer Except for shares held in ArcelorMittal, the assets remaining an unconditional public offer would be considered “fair” in treasury by the Company, each after allowing for the payment of acquisition for cash to all the sell-out proceedings if the ArcelorMittal share is entitled to of all liabilities will be paid out to shareholders for all of their shares offeror acquired at least 90% of participate equally in dividends if the shareholders pro rata to their and also to all holders of securities the ArcelorMittal shares carrying and when declared out of funds respective shareholdings. The giving access to capital or linked voting rights and which were the legally available for such purposes. decision to liquidate, dissolve or to capital or whose rights are subject of the offer. The price paid The Articles of Association provide wind-up requires the approval dependent on the profits of in a mandatory offer is deemed that the annual ordinary general of at least two-thirds of the votes ArcelorMittal. The price offered a fair price. The consideration meeting of shareholders may cast at a general meeting of must be fair and equitable and paid in the sell-out proceedings declare a dividend and that the shareholders where at first call must be based on a report drawn must take the same form as the Board of Directors may declare at least 50% of the share capital up by a leading international consideration offered in the offer interim dividends within the limits is represented, with no quorum financial institution or other or consist solely of cash. Moreover, set by Luxembourg law. being required at a reconvened internationally recognized expert. an all-cash option must be offered meeting. Irrespective of whether to the remaining ArcelorMittal Declared and unpaid dividends the liquidation is subject to a Squeeze-out right. shareholders. Finally, the right to held by ArcelorMittal for the vote at the first or a subsequent The Takeover Law provides that, initiate sell-out proceedings must account of its shareholders do not extraordinary general meeting when an offer (mandatory or be exercised within three months bear interest. Under Luxembourg of shareholders, it requires the voluntary) is made to all of the following the expiration of the law, claims for dividends lapse approval of at least two-thirds of holders of voting securities of offer. in favor of ArcelorMittal five the votes cast at the extraordinary ArcelorMittal and after such offer years after the date on which the general meeting of shareholders. the offeror holds at least 95% Disclosure of significant ownership dividends have been declared. of the securities carrying voting in ArcelorMittal shares Mandatory bid, squeeze-out right, rights and 95% of the voting Merger and division sell-out right rights, the offeror may require the Holders of ArcelorMittal shares holders of the remaining securities and derivatives or other financial A merger whereby the Mandatory bid. to sell those securities (of the instruments linked to ArcelorMittal Luxembourg company being The Luxembourg law of May 19, same class) to the offeror. The shares may be subject to the acquired transfers to an existing or 2006 implementing Directive price offered for such securities notification obligations of the newly incorporated Luxembourg 2004/25/EC of the European must be a fair price. The price Luxembourg law of January company all of its assets and Parliament and the Council of April offered in a voluntary offer would 11, 2008 on transparency liabilities in exchange for the 21, 2004 on takeover bids ( the be considered a fair price in the requirements regarding issuance to the shareholders of “Takeover Law”), provides that, if a squeeze-out proceedings if the information about issuers the company being acquired of person acting alone or in concert offeror acquired at least 90% of whose securities are admitted to shares in the acquiring company, acquires securities of ArcelorMittal the ArcelorMittal shares carrying trading on a regulated market and a division whereby a company which, when added to any existing voting rights that were the subject (the “Transparency Law”). The (the company being divided) holdings of ArcelorMittal securities, of the offer. The price paid in a following description summarizes transfers all its assets and liabilities give such person voting rights mandatory offer is deemed a fair these obligations. ArcelorMittal to two or more existing or representing at least one third of price. The consideration paid in shareholders are advised to newly incorporated companies all of the voting rights attached to the squeeze-out proceedings consult with their own legal in exchange for the issuance the issued shares in ArcelorMittal, must take the same form as the advisers to determine whether the 60 Management report

notification obligations apply to thresholds of 1% of voting or entity which the person in 2015” for a discussion of recent them. rights being crossed upwards or or entity may exercise at its management changes). Persons downwards. discretion in the absence of closely associated with them The Transparency Law provides specific instructions from the include their respective family that, if a person acquires or Any person who acquires shareholders; members. disposes of a shareholding in shares giving him or her 5% ArcelorMittal, and if following or more or a multiple of 5% or •voting rights held by a third party Both information on trading the acquisition or disposal the more of the voting rights must in its own name on behalf of that in ArcelorMittal shares by proportion of voting rights held inform ArcelorMittal within 10 person or entity; and “Persons Discharging Senior by the person reaches, exceeds or Luxembourg Stock Exchange Managerial Responsibilities” and falls below one of the thresholds trading days following the date on •voting rights which that person ArcelorMittal’s Insider Dealing of 5%, 10%, 15%, 20%, 25%, which the threshold was crossed or entity may exercise as a proxy Regulations are available on one-third, 50% or two-thirds of by registered letter with return where the person or entity may www.arcelormittal.com the total voting rights existing receipt requested as to whether exercise the voting rights in its under “Investors, Corporate when the situation giving rise to he or she intends to acquire or sole discretion. Governance, Share Transactions by a declaration occurs, the relevant dispose of shares in ArcelorMittal Management”. person must simultaneously notify within the next 12 months or In addition, the Articles of ArcelorMittal and the CSSF (the intends to seek to obtain control Association provide that, for the In 2015, four notifications were Luxembourg securities regulator) over ArcelorMittal or to appoint a purposes of calculating a person’s received by ArcelorMittal from of the proportion of voting rights member to ArcelorMittal’s Board of voting rights in ArcelorMittal, the such persons and filed with the held by it further to such event Directors. voting rights attached to shares CSSF. within four Luxembourg Stock underlying any other financial Exchange trading days of the day For the purposes of calculating instruments owned by that person Publication of regulated of execution of the transaction the percentage of a shareholder’s (such as convertible notes) must information triggering the threshold crossing. voting rights in ArcelorMittal, the be taken into account for purposes following are taken into account: of the calculation described above. Since January 2009, disclosure A person must also notify to the public of “regulated ArcelorMittal of the proportion •voting rights held by a third party Disclosure of insider dealing information” (within the meaning of his or her voting rights if that with whom that person or entity transactions of the Luxembourg Transparency proportion reaches, exceeds or has concluded an agreement Law) concerning ArcelorMittal falls below the above mentioned and which obliges them to Members of the Board of Directors, has been made by publishing thresholds as a result of events adopt, by concerted exercise of the GMB, other executives the information through the changing the breakdown of voting the voting rights they hold, a fulfilling senior management centralized regulated information rights. lasting common policy towards responsibilities within filing and storage system managed ArcelorMittal; ArcelorMittal and falling with the by the Luxembourg Stock The above notification obligations definition of “Persons Discharging Exchange and accessible in English also apply to persons who •voting rights held by a third party Senior Managerial Responsibilities” and French on www.bourse.lu, directly or indirectly hold financial under an agreement concluded set out below and persons in addition to the publication by instruments linked to ArcelorMittal with that person or entity closely associated with them ArcelorMittal of the information shares. providing for the temporary must disclose to the Luxembourg by way of press release. All news transfer for consideration of the securities regulator CSSF and and press releases issued by the ArcelorMittal’s Articles of voting rights in question; to ArcelorMittal all transactions Company are available on Association also provide that the relating to shares of ArcelorMittal www.arcelormittal.com in the above disclosure obligations also •voting rights attaching to shares or derivatives or other financial “News and Media” section. apply to: pledged as collateral with that instruments linked to shares of person or entity, provided the ArcelorMittal conducted by them Limitation of directors’ liability/ •any acquisition or disposal of person or entity controls the or for their account. indemnification of Officers and shares resulting in the threshold voting rights and declares its Directors of 2.5% of voting rights in intention to exercise them; “Persons Discharging Senior ArcelorMittal being crossed Managerial Responsibilities” within The Articles of Association upwards or downwards, •voting rights attaching to shares ArcelorMittal are the members of ArcelorMittal provide that in which a person or entity holds of the Board of Directors, the ArcelorMittal will, to the broadest •any acquisition or disposal of a life interest; Executives Officers, and other extent permitted by Luxembourg shares resulting in the threshold executives occupying a high level law, indemnify every director and of 3.0% of voting rights in •voting rights which are held or management position with regular every member of the GMB as ArcelorMittal being crossed may be exercised within the access to non-public material well as every former director or upwards or downwards, and meaning of the four foregoing information relating, directly member of the GMB for fees, costs points by an undertaking or indirectly, to ArcelorMittal and expenses reasonably incurred •with respect to any shareholder controlled by that person or and have the authority to make in the defense or resolution holding at least 3.0% of the entity; management decisions about (including a settlement) of all legal voting rights in ArcelorMittal, the future development of the actions or proceedings, whether to any acquisition or disposal •voting rights attaching to shares Company and its business strategy. civil, criminal or administrative, of shares resulting in successive deposited with that person (see “Key transactions and events he or she has been involved in his Management report 61

or her role as former or current exercise the right of proportional exchanges, contributions price on the Euronext markets director or member of the GMB. representation and nominate or transfers of shares by the where the Company is listed. The The right to indemnification candidates for appointment to Company or other companies in reference price will be deemed does not exist in the case of gross the Board of Directors (defined as the ArcelorMittal group must be to be the average of the final negligence, fraud, fraudulent “Mittal Shareholder Nominees”). in accordance with Luxembourg listing prices per share on the inducement, dishonesty or for a The Mittal Shareholder has not, to laws transposing Directive 2003/6/ relevant stock exchange during criminal offense, or if it is ultimately date, exercised that right. EC regarding insider dealing and 30 consecutive days on which the determined that the director or market manipulation and EC relevant stock exchange is open member of the GMB has not acted Articles 11(1) (e) and (f) of the Regulation 2273/2003 regarding for trading preceding the three honestly, in good faith and with Takeover Law are not applicable exemptions for buy-back trading days prior to the date of the reasonable belief that he or to the Company. However, the programs and stabilization of purchase. In the event of a share she was acting in the best interests sanction of suspension of voting financial instruments and may be capital increase by incorporation of ArcelorMittal. rights automatically applies, carried out by all means, on or off- of reserves or issue premiums and subject to limited exceptions set market, including by a public offer the free allotment of shares as Luxembourg takeover law out in the Transparency Law (as to buy-back shares, or by the use well as in the event of the division disclosure defined below), to any shareholder of derivatives or option strategies. or regrouping of the shares, the (or group of shareholders) who has The fraction of the capital acquired purchase price indicated above The following disclosure is (or have) crossed the thresholds or transferred in the form of a shall be adjusted by a multiplying provided based on article 11 of the set out in article 7 of the Articles block of shares may amount to the coefficient equal to the ratio Luxembourg law of 19 May 2006 of Association and articles 8 to entire program. Such transactions between the number of shares transposing Directive 2004/25/EC 15 of the Luxembourg law of 11 may be carried out at any time, comprising the issued share capital of 21 April 2004 on takeover bids January 2008 on the transparency including during a tender offer prior to the transaction and such (the “Takeover Law”). The Articles requirements regarding issuers period, in accordance with number following the transaction. of Association of the Company are of securities (the “Transparency applicable laws and regulations. The total amount allocated for available on www.arcelormittal. Law”) but have not notified Any share buy-backs on the New the Company’s share repurchase com, under Investors , Corporate the Company accordingly. The York Stock Exchange must be program may not in any event Governance. sanction of suspension of voting performed in compliance with exceed the amount of the rights will apply until such time Section 10(b) and Section 9(a)(2) of Company’s then available equity. With regard to articles as the notification has been the U.S. Securities Exchange Act of Articles 11(1) (j) and (k) of the 11 (1) (a) and (c) of the Takeover properly made by the relevant 1934, as amended (the “Exchange Takeover Law are not applicable to Law, the Company has issued a shareholder(s). Act”), and Rule 10b-5 promulgated the Company. single category of shares (ordinary under the Exchange Act. The shares), and the Company’s Article 11(1) (g) of the Takeover authorization is valid for a period Material contracts shareholding structure showing Law is not applicable to the of five years, i.e., until the annual each shareholder owning 2.5% Company. general meeting of shareholders The following are material or more of the Company’s share to be held in May 2020, or until contracts, not entered into in the capital is available elsewhere in With regard to article 11(1) (h) of the date of its renewal by a ordinary course of business, to this report and on the Law, the Articles of Association resolution of the general meeting which ArcelorMittal has been a www.arcelormittal. com under provide that the directors are of shareholders if such renewal party during the past two years. Investors, Corporate Governance, elected by annual general meeting date is prior to the expiration the Shareholding Structure, where of shareholders for a term that may five-year period. The maximum Share Lending Agreement the shareholding structure chart is not exceed three years, and may number of own shares that the updated monthly. be re-elected. The rules governing Company may hold at any time In connection with ArcelorMittal’s amendments to the Articles directly or indirectly may not have issuance of 104,477,612 ordinary With regard to article of Association are described the effect of reducing its net assets shares in an offering that closed 11(1) (b) of the Takeover Law, the elsewhere in this report and are set (“actif net”) below the amount on January 14, 2013 (the “Share ordinary shares issued by the out in article 19 of the Articles of mentioned in paragraphs 1 and 2 Offering”) and $2,250,000,000 Company are listed on various Association. of Article of the Law. The purchase aggregate principal amount of stock exchanges including price per share to be paid shall 6.00% Mandatorily Convertible NYSE Euronext and are freely With regard to article 11(1) (i) of not represent more than 110% Subordinated Notes due 2016 (the transferable. the Takeover Law, the general of the trading price of the shares “MCNs”) in an offering that closed meeting of shareholders held on the New York Stock Exchange on January 16, 2013, the Company With regard to article on May 05, 2015 granted the and on the Euronext markets entered into a share lending 11(1) (d), each ordinary share of Board of Directors a new share where the Company is listed, the agreement with Lumen on January the Company gives right to one buy-back authorization whereby Luxembourg Stock Exchange 9, 2013, see “Major shareholders vote, as set out in article 13.6 of the Board may authorize the or the Spanish stock exchanges and related party transactions— the Articles of Association, and acquisition or sale of Company of , , Related party transactions” for there are no special control rights shares including, but not limited and , depending on the a full description of the Share attaching to the shares. Article 8 of to, entering into off-market and market on which the purchases Lending Agreement. the Articles of Association provides over-the-counter transactions and are made, and no less than one that the Mittal Shareholder the acquisition of shares through cent. For off-market transactions, (as defined in the Articles of derivative financial instruments. the maximum purchase price Association) may, at its discretion, Any acquisitions, disposals, shall be 110% of the reference 62 Management report

ArcelorMittal Equity Incentive Plan 2015-2016 to the ArcelorMittal Standstill or controls in any way except as a and GMB PSU Plan Equity Incentive Plan and the result of subsequent occurrences Supplemental Terms for 2015-2016 The Significant Shareholder of the corporate events described On May 10, 2011, the annual to the GMB PSU Plan are filed as agreed not to acquire, directly or in (1) or (2) above, or with the prior general shareholders’ meeting exhibits to this annual report on indirectly, ownership or control of written consent of a majority of approved the ArcelorMittal Equity Form 20-F. an amount of shares in the capital the independent directors on the Incentive Plan, a new equity-based stock of the Company exceeding Company’s Board of Directors. incentive plan that replaced the Memorandum of Understanding the percentage of shares in the Global Stock Option Plan. The Company that it will own or control If subsequently the Significant ArcelorMittal Equity Incentive Plan On June 25, 2006, Mittal Steel, the following completion of the Shareholder sells down below provides for the grant of RSUs Significant Shareholder and Arcelor Offer (as defined in the MoU) for the threshold mentioned in the and PSUs to eligible Company signed a binding Memorandum of Arcelor and any subsequent offer first paragraph of this “Standstill” employees. On May 8, 2013, Understanding (“MoU”) to combine or compulsory buy-out, except subsection or the 45% limit, as the annual general meeting of Mittal Steel and Arcelor in order with the prior written consent of the case may be, it shall not be shareholders approved the GMB to create the world’s leading steel a majority of the independent permitted to exceed the threshold PSU Plan, which provides for the company. In April 2008, the Board directors on the Company’s Board mentioned in the first paragraph grant of PSUs to GMB members. of Directors approved resolutions of Directors. Any shares acquired in of this “Standstill” subsection or the Until the introduction of the GMB amending certain provisions of violation of this restriction will be 45% limit, as the case may be, other PSU Plan in 2013, GMB members the MoU in order to adapt it to the deprived of voting rights and shall than as a result of any corporate were eligible to receive RSUs and Company’s needs in the post- be promptly sold by the Significant event set out in (1) or (2) above PSUs under the ArcelorMittal merger and post-integration phase, Shareholder. Notwithstanding or with the prior written consent Equity Incentive Plan. On May 5, as described under “Board practices/ the above, if (and whenever) the of a majority of the independent 2015, the annual general meeting Corporate governance, Operation, Significant Shareholder holds, directors. of shareholders approved, in Lead Independent Director”. directly and indirectly, less than particular, the number of shares 45% of the then-issued Company Finally, the Significant Shareholder is that may be allocated for the grant On the basis of the MoU, Arcelor’s shares, the Significant Shareholder permitted to own and vote shares in of PSUs to the GMB members and Board of Directors recommended may purchase (in the open market excess of the threshold mentioned for the grant of RSUs and PSUs Mittal Steel’s offer for Arcelor and or otherwise) Company shares in the first paragraph of this to eligible employees under the the parties to the MoU agreed up to such 45% limit. In addition, “Standstill” subsection or the 45% ArcelorMittal Equity Incentive Plan to certain corporate governance the Significant Shareholder is also limit mentioned above if it acquires at a maximum of 5,000,000 shares and other matters relating to the permitted to own and vote shares in the excess shares in the context of (the “2015 Cap”). Such authorization combined ArcelorMittal group. excess of the threshold mentioned a takeover bid by a third party and is valid from the date of that annual Certain provisions of the MoU in the immediately preceding (1) a majority of the independent general meeting of shareholders relating to corporate governance paragraph or the 45% limit directors of the Company’s Board until the annual general meeting were incorporated into the Articles mentioned above, if such ownership of Directors consents in writing to of shareholders to be held in 2016. of Association of ArcelorMittal at results from (1) subscription for such acquisition by the Significant For further information about the the extraordinary general meeting shares or rights in proportion to Shareholder or (2) the Significant terms of the ArcelorMittal Equity of the shareholders on November its existing shareholding in the Shareholder acquires such shares in Incentive Plan and the GMB PSU 5, 2007. Company where other shareholders an offer for all of the shares of the Plan, see “—Compensation— have not exercised the entirety Company. Remuneration framework—Long- Certain additional provisions of their rights or (2) any passive term incentives: Equity-based of the MoU expired effective crossing of this threshold resulting Non-compete incentives (Share Unit Plans)”. Since August 1, 2009 and on August 1, from a reduction of the number of 2011, the Company has made the 2011. ArcelorMittal’s corporate Company shares (e.g., through self- For so long as the Significant following grants to employees governance rules will continue to tender offers or share buy-backs) if, Shareholder holds and controls under the ArcelorMittal Equity reflect, subject to those provisions in respect of (2) only, the decisions at least 15% of the outstanding Incentive Plan: a grant of RSUs in of the MoU that have been to implement such measures were shares of the Company or has September 2011, a grant of PSUs in incorporated into the Articles of taken at a shareholders’ meeting in representatives on the Company’s March 2012, a grant of both RSUs Association, the best standards which the Significant Shareholder Board of Directors or GMB, the and PSUs in March 2013, a grant of of corporate governance for did not vote or by the Company’s Significant Shareholder and its both RSUs and PSUs in September comparable companies and Board of Directors with a majority affiliates will not be permitted to 2013 (the GMB members were to conform with the corporate of independent directors voting in invest in, or carry on, any business excluded from the afore-mentioned governance aspects of the NYSE favor. competing with the Company, 2013 grants in light of the creation listing standards applicable to non- except for PT ISPAT Indo. of the GMB PSU Plan) a grant of U.S. companies and Ten Principles Once the Significant Shareholder both RSUs and PSUs in December of Corporate Governance of the exceeds the threshold mentioned Additional information 2014 and a new grant of both RSUs Luxembourg Stock Exchange. in the first paragraph of this and PSUs in December 2015. Under “Standstill” subsection or the ArcelorMittal produces a range the GMB PSU Plan, the Company The following summarizes the main 45% limit, as the case may be, as of publications to inform its has made grants of PSUs to the provisions of the MoU that remain a consequence of any corporate shareholders. These documents are GMB members in June 2013, in effect or were in effect in 2015. event set forth in (1) or (2) above, it available in various formats: they June 2014 and June 2015. Copies shall not be permitted to increase can be viewed online, downloaded of the Supplemental Terms for the percentage of shares it owns or obtained on request in paper Management report 63

format. Please refer to www. The Company has no branch offices. the Registre du Commerce et Indexes arcelormittal.com, to the Investors des Sociétés Luxembourg under menu, under Financial Reports. Group companies listed on the number ArcelorMittal is a member of more Luxembourg Stock Exchange B 13.240. ArcelorMittal Finance than 120 indices including the Sustainable development is indirectly 100% owned by following leading indices: DJ SOTXX ArcelorMittal’s securities are traded ArcelorMittal group and, in this 50, DJ , CAC40, AEX, ArcelorMittal’s sustainable on several exchanges, including connection, it issued a number of FTSE Eurotop 100, MSCI Pan-Euro, development information is the Luxembourg Stock Exchange, bonds listed on the Luxembourg DJ Stoxx 600, S&P Europe 500, detailed in the online Annual and its primary stock exchange Stock Exchange. ArcelorMittal Bloomberg World Index, IBEX 35 Review that will be published regulator is the Luxembourg CSSF Finance’s CSSF issuer number is index and NYSE Composite Index. during the second quarter of (Commission de Surveillance du E-0025. Recognized for its commitments 2016 and available on http:// Secteur Financier). ArcelorMittal’s to sustainable development, annualreview2015.arcelormittal. CSSF issuer number is E-0001. Other listings ArcelorMittal is also a member of com. In addition to ArcelorMittal, the the FTSE4Good Index. securities of one other ArcelorMittal ArcelorMittal is listed on the ArcelorMittal as parent company group company are listed on the stock exchanges of New York Share price performance of the ArcelorMittal group Luxembourg Stock exchange. (MT), Amsterdam (MT), Paris ArcelorMittal Finance S.C.A. is a (MT), Luxembourg (MT) and on During 2015 the price of ArcelorMittal, incorporated under société en commandite par actions the Spanish stock exchanges of the laws of Luxembourg, is the with registered office address at Barcelona, Bilbao, Madrid and ArcelorMittal shares decreased parent company of the ArcelorMittal 24-26, boulevard d’Avranches, Valencia (MTS). by 62% in US dollar terms; group and is expected to continue L-1160 Luxembourg, Grand Duchy underperforming the Global this role during the coming years. of Luxembourg, registered with Metals, Mining & Steel sector which

decreased by 45% over the period. financial year. To meet this objective and individual investors is available The Company’s share price declined Once the deleverage plan is provide information to fit the at +352 4792 3198. Requests in the second half of 2015 onwards complete and market conditions needs of all parties, ArcelorMittal for information or meeting and as global markets reacted to falling improve, the board intends to implements an active and broad conference center may also international steel prices primarily restart the dividend distribution investor communications policy: be sent to the private investor due to increased Chinese exports at once the Net debt/EBITDA ratio conference calls, road shows contact listed on http://corporate. unsustainable margins. <2.0x. with the financial community, arcelormittal.com/investors/ regular participation at investor contact. Dividend Investor relations conferences, plant visits and meetings with individual investors. Analysts and institutional investors Considering the challenging global By implementing high standards economic conditions, and the of financial information disclosure Individual investors As the world’s leading steel Company’s priority to deleverage, and providing clear, regular, company and major investment ArcelorMittal’s board of directors transparent and even-handed ArcelorMittal’s senior management vehicle in the steel sector, proposes, subject to approval at information to all its shareholders, plans to meet individual investors ArcelorMittal constantly seeks the next annual general meeting ArcelorMittal aims to be the first and shareholder associations in to develop relationships with on May 4, 2016, not do declare any choice for investors in the sector. road shows throughout 2016. A financial analysts and international dividend in respect to the 2015 dedicated toll free number for investors. Depending on their geographical location, investors may 64 Management report

use the following e-mails: Controls and procedures procedures can only provide deteriorate. http://corporate.arcelormittal.com/ reasonable assurance of achieving Management assessed the investors/contact Disclosure controls and procedures their control objectives. effectiveness of internal control over financial reporting as of Socially responsible investors Management maintains disclosure Management’s Annual Report on December 31, 2015 based upon controls and procedures that are Internal Control Over Financial the framework in Internal Control The Investor Relations team is designed to ensure that information Reporting Integrated Framework (2013) issued also a source of information for required to be disclosed in the by the Committee of Sponsoring the growing socially responsible Company’s reports under the Management is responsible for Organizations of the Treadway investment community. The Securities Exchange Act of 1934, as establishing and maintaining Commission (“COSO”). Based on team organises focus events amended (the “Exchange Act”) is adequate internal control over this assessment, management on ArcelorMittal’s sustainable recorded, processed, summarized financial reporting. Internal control concluded that ArcelorMittal’s development strategy and answers and reported within time periods over financial reporting is a process internal control over financial all requests for information sent to specified in the SEC’s rules and designed to provide reasonable reporting was effective as of the Group. forms, and that such information is assurance regarding the reliability December 31, 2015. accumulated and communicated to of financial reporting and the Credit and fixed income investors management, including the Chief preparation of financial statements Changes in Internal Control over Executive Officer and Chief Financial for external purposes in accordance Financial Reporting Credit and fixed income investors Officer, as appropriate, to allow with generally accepted accounting are followed by dedicated team timely decisions regarding required principles. Except as described below, there from Treasury/Investors Relations. disclosures. ArcelorMittal’s controls have been no changes in the creditfixedincome@arcelormittal. and procedures are designed to The Company’s internal control over Company’s internal control over com provide reasonable assurance of financial reporting includes those financial reporting that occurred achieving their objectives. policies and procedures that: during the year ending December Financial calendar 31, 2015 that have materially Management carried out an •pertain to the maintenance of affected or are reasonably likely The schedule is available on evaluation, under the supervision records that, in reasonable detail, to materially affect the Company’s ArcelorMittal’s website www. and with the participation of its accurately and fairly reflect the internal control over financial arcelormittal.com under Chief Executive Officer and Chief transactions and dispositions of reporting. Investor>Financial calendar. Financial Officer, of the effectiveness the assets of ArcelorMittal; of the design and operation of The Company re-insourced Financial results* the Company’s disclosure controls •provide reasonable assurance significant parts of the European IT- and procedures (as defined in that transactions are recorded, as infrastructure (i.e. servers, network, February 5, 2016 - Results for the 4th Exchange Act Rule 13a-15(e)) as of necessary, to permit preparation of databases) and related general quarter 2015 and 12 months 2015. December 31, 2015. Based upon financial statements in accordance IT controls which had previously that evaluation, the Company’s with IFRS; been outsourced to a third-party May 6, 2016 - Results for the 1st Chief Executive Officer and Chief service provider. The outsourcing quarter 2016. Financial Officer concluded that •provide reasonable assurance agreement had covered the the Company’s disclosure controls that receipts and expenditures management of the Company’s July 29, 2016 - Results for the 2nd and procedures were effective of ArcelorMittal are made in IT infrastructure i.e. servers, quarter 2016 and 6 months 2016. as of December 31, 2015 so as accordance with authorizations of network, databases) including the to provide reasonable assurance ArcelorMittal’s management and data centers in Europe, whereas November 9, 2016 - Results for the that (1) information required to directors; and the management of business 3rd quarter 2016 and 9 months 2016. be disclosed by the Company in applications, including those the reports that the Company files •provide reasonable assurance that applications used for the purposes *Earnings results are issued before under the Exchange Act is recorded, unauthorized acquisition, use or of processing financial reporting the opening of the stock exchanges processed, summarized and disposition of ArcelorMittal’s assets relevant data were excluded on which ArcelorMittal is listed. reported within the time periods that could have a material effect from the outsourcing agreement. specified in the SEC’s rules and on the financial statements would Following the re-insourcing the Meeting of shareholders forms, and (2) that such information be prevented or detected on a management of the European IT- is accumulated and communicated timely basis. infrastructure and related controls March 10, 2016 – Extraordinary to the Company’s management, is now under the responsibility of General Meeting of Shareholders. including its Chief Executive Officer Because of its inherent limitations, the business. The Company believes and its Chief Financial Officer, internal control over financial that the re-sourcing will enhance May 4, 2016 – Annual General as appropriate, to allow timely reporting is not intended to the efficiency and effectiveness of Meeting of Shareholders. decisions regarding required provide absolute assurance that the Company’s IT-Infrastructure, as disclosures. a misstatement of the Company’s well as related controls. On a smaller Contact the investor relations team financial statements would be scale, the Company is outsourcing on the information detailed above There are inherent limitations to prevented or detected. In addition, parts of its IT Infrastructure to local or please visit www.arcelormittal. the effectiveness of any system of projections of any evaluation of service providers. The Company com/corp/investors/contact. disclosure controls and procedures, effectiveness to future periods are does not anticipate that this limited including the possibility of human subject to the risk that controls local outsourcing will materially error and the circumvention or may become inadequate because impact internal controls over overriding of the controls and of changes in conditions, or that financial reporting. procedures. Accordingly, even the degree of compliance with effective disclosure controls and the policies or procedures may Management report 65

Chief executive officer and chief financial officer’s responsibility statement

We confirm, to the best of our knowledge, that:

1. the consolidated financial statements of ArcelorMittal presented in this Annual Report and prepared in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board and as adopted by the European Union, give a true and fair view of the assets, liabilities, financial position, profit or loss of ArcelorMittal and the undertakings included within the consolidation taken as a whole; and

2. the management report includes a fair review of the development and performance of the business and position of ArcelorMittal and undertakings included within the consolidation taken as a whole, together with a description of the principal risks and uncertainties they face.

By order of the Board of Directors

Chief executive officer Chief financial officer

Lakshmi N. Mittal Aditya Mittal

February 23, 2016 February 23, 2016 66 Consolidated financial statements

Consolidated financial statements Consolidated financial statements 67

ArcelorMittal and subsidiaries Consolidated statements of operations (millions of U.S. dollars, except share and per share data)

Year ended Year ended Year ended Notes December 31, 2015 December 31, 2014 December 31, 2013 Sales (including 6,124, 6,606 and 4,770 of sales to related parties for 2015, 2014 and 2013, respectively) 4.1 63,578 79,282 79,440 Cost of sales (including 1,460, 1,355 and 1,310 of purchases from related parties for 2015, 2014 and 2013, respectively) 4.2 65,196 73,288 75,247 Gross margin (1,618) 5,994 4,193 Selling, general and administrative expenses 2,543 2,960 2,996 Operating income (loss) (4,161) 3,034 1,197 Income (loss) from investments in associates, joint ventures and other investments 2.6 (502) (172) (442) Financing costs - net 6.2 (2,858) (3,382) (3,115) Income (loss) before taxes (7,521) (520) (2,360) Income tax expense 9.1 902 454 215 Net income (loss) (including non-controlling interests) (8,423) (974) (2,575) Net income (loss) attributable to equity holders of the parent (7,946) (1,086) (2,545) Net income (loss) attributable to non-controlling interests (477) 112 (30) Net income (loss) (including non-controlling interests) (8,423) (974) (2,575)

Year ended Year ended Year ended December 31, 2015 December 31, 2014 December 31, 2013 Earnings (loss) per common share (in U.S. dollars) Basic and diluted (4.43) (0.61) (1.46) Weighted average common shares outstanding (in millions) 10.3 Basic and diluted 1,795 1,791 1,780 The accompanying notes are an integral part of these consolidated financial statements. 68 Consolidated financial statements

ArcelorMittal and subsidiaries Consolidated statements of operations (millions of U.S. dollars, except share and per share data)

Year ended Year ended Year ended December 31, 2015 December 31, 2014 December 31, 2013 Net income (loss) (including non-controlling interests) (8,423) (974) (2,575) Items that can be recycled to the consolidated statements of operations Available-for-sale investments: Gain (loss) arising during the period (439) 449 (34) Reclassification adjustments for loss (gain) included in the consolidated statements of operations 70 44 100 (369) 493 66 Derivative financial instruments: Gain (loss) arising during the period 107 181 (25) Reclassification adjustments for loss (gain) included in the consolidated statements of operations (93) (2) (120) 14 179 (145) Exchange differences arising on translation of foreign operations: Gain (loss) arising during the period (7,876) (4,198) (965) Reclassification adjustments for loss (gain) included in the consolidated statements of operations (11) (55) (25) (7,887) (4,253) (990) Share of other comprehensive income (loss) related to associates and joint ventures Gain (loss) arising during the period (666) (601) 2 Reclassification adjustments for (gain) loss included in the consolidated statements of operations 4 (61) - (662) (662) 2 Income tax benefit (expense) related to components of other comprehensive income (loss) that can be recycled to the consolidated statements of operations 79 (11) 114 Items that cannot be recycled to the consolidated statements of operations Employee benefits Recognized actuarial gains (losses) 24 (1,531) 2,206 Share of other comprehensive income (loss) related to associates and joint ventures (36) 4 (13) Income tax benefit (loss) related to components of other comprehensive income that cannot be recycled to the consolidated statements of operations (47) 94 (155) Total other comprehensive income (loss) (8,884) (5,687) 1,085 Total other comprehensive income (loss) attributable to: Equity holders of the parent (8,554) (5,536) 1,314 Non-controlling interests (330) (151) (229) (8,884) (5,687) 1,085 Total comprehensive income (loss) (17,307) (6,661) (1,490) Total comprehensive income (loss) attributable to: Equity holders of the parent (16,500) (6,622) (1,231) Non-controlling interests (807) (39) (259) Total comprehensive income (loss) (17,307) (6,661) (1,490)

The accompanying notes are an integral part of these consolidated financial statements. Consolidated financial statements 69

ArcelorMittal and subsidiaries Consolidated statements of financial position (millions of U.S. dollars, except share and per share data)

Assets Notes December 31, 2015 December 31, 2014 Current assets: Cash and cash equivalents 6.1.3 4,002 3,893 Restricted cash 6.1.3 100 123 Trade accounts receivable and other (including 216 and 469 from related parties at December 31, 2015 and 2014, respectively) 4.3 and 11.1 2,679 3,696 Inventories 4.4 13,424 17,304 Prepaid expenses and other current assets 4.5 1,859 2,627 Assets held for sale 2.3 262 414 Total current assets 22,326 28,057 Non-current assets: Goodwill and intangible assets 5.1 5,592 8,104 Biological assets 5.4 80 128 Property, plant and equipment 5.2 35,700 46,465 Investments in associates and joint ventures 2.4 4,911 5,833 Other investments 2.5 692 1,202 Deferred tax assets 9.4 6,625 7,962 Other assets 4.6 920 1,428 Total non-current assets 54,520 71,122 Total assets 76,846 99,179

Liabilities and equity Notes December 31, 2015 December 31, 2014 Current liabilities: Short-term debt and current portion of long-term debt 6.1.2.1 2,308 2,522 Trade accounts payable and other (including 256 and 290 to related parties at December 31, 2015 and 2014, respectively) 4.7 and 11.2 8,977 11,450 Short-term provisions 8.1 770 1,024 Accrued expenses and other liabilities 4.8 5,633 5,740 Income tax liabilities 133 230 Liabilities held for sale 2.3 220 157 Total current liabilities 18,041 21,123 Non-current liabilities: Long-term debt, net of current portion 6.1.2.2 17,478 17,275 Deferred tax liabilities 9.4 2,496 3,004 Deferred employee benefits 7.2 9,216 10,074 Long-term provisions 8.1 1,434 1,587 Other long-term obligations 611 956 Total non-current liabilities 31,235 32,896 Total liabilities 49,276 54,019 Contingencies and commitments 8.2 and 8.3 Equity: 10 Common shares (no par value, 1,995,857,213 and 1,995,857,213 shares authorized, 1,665,392,222 and 1,665,392,222 shares issued, and 1,656,811,132 and 1,654,373,809 shares outstanding at December 31, 2015 and 2014, respectively) 10,011 10,011 Treasury shares (8,581,090 and 11,018,413 common shares at December 31, 2015 and 2014, respectively, at cost) (377) (399) Additional paid-in capital 20,294 20,258 Mandatorily convertible notes 1,800 1,838 Retained earnings 13,902 22,182 Reserves (20,358) (11,804) Equity attributable to the equity holders of the parent 25,272 42,086 Non-controlling interests 2,298 3,074 Total equity 27,570 45,160 Total liabilities and equity 76,846 99,179

The accompanying notes are an integral part of these consolidated financial statements. 70 Consolidated financial statements

ArcelorMittal and subsidiaries Consolidated statements of changes in equity (millions of U.S. dollars, except share and per share data)

Reserves Items that cannot be recycled to the Consolidated Statements Items that can be recycled to the of Consolidated Statements of Operations Operations Unrealized Unrealized Equity gains gains attributable Subordinated Foreign (losses) on (losses) on Recognized to the perpetual Mandatorily Additional currency derivative available actuarial equity Non- Share Treasury capital convertible paid-in Retained translation financial for sale (losses) holders of controlling Shares 1, 2 capital shares securities notes capital earnings adjustments instruments securities gains the parent interests Total equity Balance at December 31, 2012 1,549 9,403 (414) 650 - 19,082 26,186 (2,244) (214) (173) (5,260) 47,016 3,450 50,466 Net loss (including non- controlling interests) ------(2,545) - - - - (2,545) (30) (2,575) Other comprehensive income (loss) ------(666) (110) 68 2,022 1,314 (229) 1,085 Total comprehensive income (loss) ------(2,545) (666) (110) 68 2,022 (1,231) (259) (1,490) Offering of common shares 105 608 - - - 1,148 - - - - - 1,756 - 1,756 Mandatorily convertible notes - - - - 1,838 ------1,838 - 1,838 Baffinland dilution ------(208) (208) Other changes in non- controlling interests (note 10.5) ------722 - - - - 722 402 1,124 Recognition of share based payments - - - - - 18 - - - - - 18 - 18 Dividend (note 10.4) ------(332) - - (332) (23) (355) Coupon on subordinated perpetual capital securities ------(57) - - (57) - (57) Other movements ------63 - - - - 63 18 81 Balance at December 31, 2013 1,654 10,011 (414) 650 1,838 20,248 24,037 (2,910) (324) (105) (3,238) 49,793 3,380 53,173 Net loss (including non- controlling interests) ------(1,086) - - - (1,086) 112 (974) Other comprehensive income (loss) ------(4,717) (104) 510 (1,433) (5,536) (151) (5,687) Total comprehensive income (loss) ------(1,086) (4,717) (104) 510 (1,433) (6,622) (39) (6,661) Redemption of subordinated perpetual capital securities - - - (650) - - (7) - - - (657) - (657) Option premiums on treasury shares (note 10.2) ------(309) - 309 - - - - - Mandatory convertible bonds extension (note 10.2) ------(47) (47) Other changes in non- controlling interests (note 10.5) ------(34) - - - - (34) (75) (109) Recognition of share based payments - - 15 - - 10 - - - - - 25 - 25 Dividend (note 10.4) ------(333) - - - - (333) (118) (451) Coupon on subordinated perpetual capital securities - - - - - (22) - - - - (22) - (22) Other movements ------(64) - - - - (64) (27) (91) Balance at December 31, 2014 1,654 10,011 (399) - 1,838 20,258 22,182 (7,627) 89 405 (4,671) 42,086 3,074 45,160 Net loss (including non- controlling interests) ------(7,946) - - - (7,946) (477) (8,423) Other comprehensive income (loss) ------(8,166) 25 (354) (59) (8,554) (330) (8,884) Total comprehensive income (loss) ------(7,946) (8,166) 25 (354) (59) (16,500) (807) (17,307) Other changes in non- controlling interests (note 10.5) ------148 (148) Recognition of share based payments - - 4 - - 16 - - - - - 20 - 20 Voluntary conversion of mandatorily convertible notes (note 10.2) 3 - 18 - (38) 20 ------Mandatory convertible bonds extension (note 10.2) ------(20) (20) Dividend (note 10.4) ------(331) - - - - (331) (86) (417) Other movements ------(3) - - - - (3) (11) (14) Balance at December 31, 2015 1,657 10,011 (377) - 1,800 20,294 13,902 (15,793) 114 51 (4,730) 25,272 2,298 27,570 1 Excludes treasury shares 2 In millions of shares The accompanying notes are an integral part of these consolidated financial statements. Consolidated financial statements 71

ArcelorMittal and subsidiaries Consolidated statements of cash flows (millions of U.S. dollars, except share and per share data)

Year ended Year ended Year ended Notes December 31, 2015 December 31, 2014 December 31, 2013 Operating activities: Net income (loss) (including non-controlling interests) (8,423) (974) (2,575) Adjustments to reconcile net income to net cash provided by operations: Depreciation and amortization 5.1,5.2,5.4 3,192 3,939 4,695 Impairment 5.1,5.2,5.3 4,764 264 444 Interest expense 6.2 1,383 1,565 1,890 Interest income 6.2 (105) (96) (113) Income tax (benefit) expense 9.1 902 454 215 Provisions for labor agreements and separation plans 37 90 361 Recycling of deferred gain on raw material hedges - - (92) Net gain on disposal of subsidiaries and net assets (72) (192) (28) (Income) loss from investments in associates, joint ventures and other investments 2.6 502 172 442 Provision on pensions and OPEB 7.2 558 591 670 Change in fair value adjustment on conversion options on the euro convertible bond, call options on ArcelorMittal shares and Mandatory Convertible Bonds 6.2 108 (112) 12 Income tax amnesty expenses 6.2 - 161 80 Unrealized foreign exchange effects 425 413 341 Write-downs (recoveries) of inventories to net realizable value, provisions and other non-cash operating expenses net 746 398 (134) Changes in assets and liabilities that provided (required) cash, net of acquisitions: Trade accounts receivable 335 537 115 Inventories 925 (122) (609) Trade accounts payable (1,291) (47) 1,258 Interest paid (1,561) (1,713) (1,967) Interest received 89 97 106 Income taxes paid (398) (337) (102) Dividends received from associates, joint ventures and other investments 227 209 219 Cash contributions to plan assets and benefits paid for pensions and OPEB 7.2 (556) (674) (709) VAT and other amount received (paid) from/to public authorities 166 (112) (14) Other working capital and provisions movements 198 (641) (209) Net cash provided by operating activities 2,151 3,870 4,296 Investing activities: Purchase of property, plant and equipment and intangibles (includes cash outflows in connection with exploration/evaluation activities of nil, nil and 2 respectively, in 2015, 2014 and 2013, respectively) (2,707) (3,665) (3,452) Disposal (acquisition) of net assets of subsidiaries, net of cash disposed of (10), (85) and (48) in 2015, 2014 and 2013, respectively 2.3 - 232 34 Acquisition of associates and joint ventures 2.4 - (258) (173) Disposals of financial assets 195 532 511 Other investing activities net 342 82 203 Net cash used in investing activities (2,170) (3,077) (2,877) Financing activities: Payments of subordinated perpetual capital securities 10.2 - (657) - (Acquisition) disposal of non-controlling interests 10.5.2 - (17) 1,100 Proceeds from short-term debt 543 1,855 1,172 Proceeds from long-term debt 3,256 2,419 76 Payments of short-term debt (2,490) (4,545) (4,696) Payments of long-term debt (501) (1,282) (846) Proceeds from mandatorily convertible notes 10.2 - - 2,222 Common stock offering - - 1,756 Dividends paid (includes 85, 108 and 26 of dividends paid to non-controlling shareholders in 2015, 2014 and 2013 respectively) (416) (458) (415) Other financing activities net 3 (65) (128) Net cash (used in) provided by financing activities 395 (2,750) 241 Effect of exchange rate changes on cash (267) (230) 19 Net increase (decrease) in cash and cash equivalents 109 (2,187) 1,679 Cash and cash equivalents: At the beginning of the year 3,893 6,072 4,402 Reclassification of the period-end cash and cash equivalent (to) from held for sale 2.3 - 8 (9) At the end of the year 4,002 3,893 6,072

The accompanying notes are an integral part of these consolidated financial statements. 72 Consolidated financial statements

Summary of notes to consolidated financial statements

Note 1: Accounting principles Note 6: Financing and financial instruments 1.1 Basis of presentation 6.1 Financial assets and liabilities 1.2 Use of estimates 6.2 Financing costs 1.3 Accounting standards applied 6.3 Risk management policy

Note 2: Scope of consolidation Note 7: Personnel expenses and employee benefits 2.1 Basis of consolidation 7.1 Employees and key management personnel 2.2 Investments in subsidiaries 7.2 Deferred employee benefits 2.3 Assets held for sale and divestments 7.3 Share-based payments 2.4 Investment in associates and joint arrangements 2.5 Other investments Note 8: Provisions, contingencies and commitments 2.6 Income (loss) from investments in associates, joint ventures and other 8.1 Provisions overview investments 8.2 Environmental liabilities and legal proceedings 8.3 Commitments Note 3: Segment reporting 3.1 Reportable segments Note 9: Income taxes 3.2 Geographical information 9.1 Income tax expense (benefit) 3.3 Sales by type of products 9.2 Income tax recorded directly in equity 9.3 Uncertain tax positions Note 4: Other operating data 9.4 Deferred tax assets and liabilities 4.1 Revenue 9.5 Tax losses, tax credits and other tax benefits carried forward 4.2 Cost of sales 4.3 Trade accounts receivable and other Note 10: Equity 4.4 Inventories 10.1 Share details 4.5 Prepaid expenses and other current assets 10.2 Equity and hybrid instruments 4.6 Other assets 10.3 Earnings per common share 4.7 Trade accounts payable and other 10.4 Dividends 4.8 Accrued expenses and other liabilities 10.5 Non-controlling interests

Note 5: Goodwill, intangible and tangible assets Note 11: Related parties 5.1 Goodwill and intangible assets 11.1 Sales and trade receivables 5.2 Property, plant and equipment 11.2 Purchases and trade payables 5.3 Impairment of intangible assets, including goodwill, and tangible assets 11.3 Other transactions with related parties 5.4 Biological assets Note 12: Principal accountant fees and services

Consolidated financial statements 73

Note 1: Accounting Principles circumstances or obtaining new o IAS 16 “Property, Plant for annual periods beginning on information or more experience and Equipment”, provides or after January 1, 2016, with ArcelorMittal (“ArcelorMittal” or may result in revised estimates, additional guidance for the early application permitted. the “Company”), together with its and actual results could differ from proportionate restatement The Company does not expect subsidiaries, owns and operates those estimates. of accumulated depreciation that the adoption of these new steel manufacturing and mining when the revaluation method amendments will have a material facilities in Europe, North and 1.3 Accounting standards applied is applied impact to its consolidated financial South America, Asia and Africa. statements. Collectively, these subsidiaries 1.3.1 Adoption of new o IAS 24 “Related Party and facilities are referred to in the amendments to IFRS applicable Disclosure”, provides additional On May 12, 2014, the IASB consolidated financial statements in 2015 guidance for the definition of published amendments to IAS 16 as the “operating subsidiaries”. key management personnel “Property, Plant and Equipment” These consolidated financial On January 1, 2015, the and IAS 38 “Intangible Assets”. statements were authorized for Company adopted the following o IAS 38 “Intangible Assets”, The IASB clarified that the use issuance on February 23, 2016 by amendments which did not have provides additional guidance of revenue-based methods to the Company’s Board of Directors. a material impact on the financial for the proportionate calculate the depreciation of an statements of the Company: restatement of accumulated asset is not appropriate because 1.1 Basis of presentation depreciation when the revenue generated by an activity • Amendments to IAS 19 revaluation method is applied that includes the use of an asset The consolidated financial “Employee Benefits”, published on generally reflects factors other statements have been prepared November 21, 2013, clarify the • Annual Improvements 2011- than the consumption of the on a historical cost basis, except requirements that relate to how 2013 published by the IASB on economic benefits embodied in for available-for-sale financial contributions from employees December 12, 2013 as part of the asset. The IASB also clarified assets, derivative financial or third parties that are linked to its annual improvements process that revenue is generally presumed instruments, biological assets service should be attributed to made amendments to the to be an inappropriate basis for and certain assets and liabilities periods of service. following standards: measuring the consumption of the held for sale, which are measured economic benefits embodied in an at fair value less cost to sell, • Annual Improvements 2010- o IFRS 1 “First-time Adoption intangible asset. This presumption, inventories, which are measured 2012 published by the IASB on of International Financial however, can be rebutted in at the lower of net realizable December 12, 2013 as part of Reporting Standards”, provides certain limited circumstances. value or cost and the financial its annual improvements process additional guidance for the The amendments are effective statements of the Company’s made amendments to the effectiveness of IFRSs for annual periods beginning on Venezuelan operations, following standards: or after January 1, 2016, with for which hyperinflationary o IFRS 3 “Business early application permitted. accounting is applied (see o IFRS 2 “Share-based Payment”, Combinations”, clarifies the The Company does not expect note 2.2.2.). The consolidated amends the definition of scope of the exception for joint that the adoption of these new financial statements have been vesting condition and market arrangements amendments will have a material prepared in accordance with condition and adds definitions impact to its consolidated financial International Financial Reporting for performance condition and o IFRS 13 “Fair Value statements. Standards (“IFRS”) as issued by service condition Measurement”, clarifies the International Accounting the scope of the portfolio On June 30, 2014, the IASB issued Standards Board (“IASB”) and as o IFRS 3 “Business exception amendments to IAS 16 and IAS adopted by the European Union Combinations”, provides 41 “Agriculture” which changes and are presented in U.S. dollars additional guidance for o IAS 40 “Investment Property”, the financial reporting for bearer with all amounts rounded to the accounting for contingent provides clarification of the plants, such as grape vines, nearest million, except for share consideration in a business interrelationship of IFRS 3 rubber trees and oil palms. The and per share data. combination and IAS 40 when classifying IASB decided that bearer plants property as investment should be accounted for and 1.2 Use of estimates o IFRS 8 “Operating Segments”, property or owner-occupied measured after initial recognition provides clarification of property on a cost or revaluation basis in The preparation of consolidated the requirements for the accordance with IAS 16, because financial statements in conformity aggregation of operating 1.3.2 New IFRS standards and their operation is similar to that of with IFRS recognition and segments and the amendments applicable from 2016 manufacturing. Consequently, the measurement principles and, in reconciliation of the total onward amendments include them within particular, making the critical of the reportable segments’ the scope of IAS 16, instead of IAS accounting judgments require the assets to the entity’s assets On May 6, 2014, the IASB 41. The produce growing on bearer use of estimates and assumptions published amendments to IFRS plants will remain within the that affect the reported amounts o IFRS 13 “Fair Value 11 “Joint Arrangements”. The scope of IAS 41. The amendments of assets, liabilities, revenues and Measurement”, provides amendments clarify the accounting are effective for annual periods expenses. Management reviews additional guidance for the for acquisitions of an interest beginning on or after January its estimates on an ongoing measurement of short-term in a joint operation when the 1, 2016, with early application basis using currently available receivables and payables operation constitutes a business. permitted. The adoption of these information. Changes in facts and The amendments are effective amendments will not have a 74 Consolidated financial statements

material impact to the Company’s amendments will have a material The standard supersedes IAS 18 activities when hedging consolidated financial statements. impact to its consolidated financial “Revenue”, IAS 11 “Construction financial and non-financial risk statements. Contracts” and a number of exposures On August 12, 2014, the IASB revenue-related interpretations. published amendments to IAS 27 On December 18, 2014, the On September 11, 2015, the IASB • Derecognition: The which will allow entities to use IASB also issued amendments issued an amendment formalizing requirements for the equity method to account to IAS 1 “Presentation of a one-year deferral of the derecognition of financial for investments in subsidiaries, Financial Statements” which effective date for annual periods assets and liabilities are carried joint ventures and associates clarify various presentation beginning on or after January forward from IAS 39. in their separate financial and disclosure requirements 1, 2018, with early application statements. These amendments related to materiality, subtotals, permitted. The Company’s revenue IFRS 9 is effective for annual are effective for annual periods disaggregation and accounting is predominantly derived from the periods beginning on or after beginning on or after January policies. These amendments sale of goods under arrangements January 1, 2018, with early 1, 2016, with early application are effective for annual periods in which the transfer of risks application permitted. The permitted. The adoption of these beginning on or after January and rewards of ownership and Company does not expect that new amendments will not have 1, 2016, with early application the fulfillment of the Company’s the adoption of this new standard an impact on the consolidated permitted. The adoption of performance obligations occur will have a material impact to its financial statements of the these new amendments will not at the same time. Therefore, the consolidated financial statements. Company as they apply to separate have a material impact on the Company does not expect that financial statements. consolidated financial statements the adoption of this new standard On September 11, 2014, the IASB of the Company. will have a material impact to its issued amendments to IFRS 10 and On September 25, 2014, the consolidated financial statements. IAS 28 “Investments in Associates IASB issued Annual Improvements The Company does not plan to and Joint Ventures” which address 2012-2014 to make amendments early adopt the new accounting On July 24, 2014, the IASB issued an inconsistency between the to the following standards: standards and amendments. the final version of IFRS 9 “Financial requirements in IFRS 10 and those Instruments (2014)” which replaces in IAS 28 in dealing with the sale • IFRS 5 “Non-current Assets 1.3.3 New IFRS standards and IAS 39, bringing together the or contribution of assets between Held for Sale and Discontinued amendments not yet endorsed by classification and measurement, an investor and its associate or Operations” introduces the European Union impairment and hedge joint venture. The amendments guidance relating to changes in accounting. The final version of the set out that a full gain or loss methods of disposal, On January 30, 2014, the IASB standard contains requirements in is recognized when the assets issued IFRS 14 “Regulatory Deferral the following areas: constitute a business or a partial • IFRS 7 “Financial Instruments: Accounts”. The aim of this standard gain or loss is recognized when the Disclosures” provides is to enhance the comparability • Classification and assets do not constitute a business. additional guidance to clarify of financial reporting by entities measurement: Financial assets On December 17, 2015, the IASB whether a servicing contract that are engaged in rate-regulated are classified and measured issued an amendment formalizing is continuing involvement activities. This standard is effective by reference to the business the deferral of these amendments in a transferred asset and for annual periods beginning model within which they are indefinitely. The Company does clarifies the applicability of on or after January 1, 2016, with held and their contractual cash not expect that the adoption of the amendments to IFRS 7 early application permitted. The flow characteristics. Financial these new amendments will have a on offsetting disclosure to adoption of this new standard liabilities are classified in a material impact to its consolidated condensed interim financial will not have an impact on the similar manner to IAS 39, financial statements. statements, consolidated financial statements however there are differences of the Company as it applies to in the requirements regarding On December 18, 2014, the IASB • IAS 19, clarifies determination IFRS first-time adopters. the measurement of an entity’s issued amendments to IFRS 10, of the discount rate in a own credit risk. IFRS 12 and IAS 28 which clarify regional market sharing the On May 28, 2014, the IASB issued the scope and measurement same currency, IFRS 15 “Revenue from Contracts • Impairment: The standard method regarding consolidation with Customers” which provides a introduces an ‘expected and disclosure of investment • IAS 34 “Interim Financial unified framework for determining credit loss’ model for entities. These amendments Reporting” clarifies the meaning the timing, measurement and the measurement of the are effective for annual periods of ‘elsewhere in the interim recognition of revenue. The impairment of financial beginning on or after January report’ and the requirements focus of the new standard is to assets; it is therefore no longer 1, 2016, with early application relating to cross-reference recognize revenue as performance necessary for a credit event to permitted. The adoption of disclosure in the interim obligations are met rather than have occurred before a credit these new amendments will financial report. based on the transfer of risks loss is recognized. not have an impact on the and rewards. IFRS 15 includes a consolidated financial statements The amendments will be effective comprehensive set of disclosure • Hedge accounting: The of the Company as they apply to from annual periods commencing requirements including qualitative standard introduces a new investment entities. on or after January 1, 2016, and quantitative information hedge accounting model that with early application permitted. about contracts with customers is designed to be more closely On January 13, 2016, the IASB The Company does not expect to understand the nature, amount, aligned with how entities issued IFRS 16 “Leases” which that the adoption of these new timing and uncertainty of revenue. undertake risk management will replace IAS 17 “Leases”. This Consolidated financial statements 75

new standard specifies how to Company has the ability to exercise difference between the higher of of operations. To the extent that recognize, measure, present and significant influence on the financial the fair value less costs to sell or its these investments do not have a disclose leases. The standard and operating policy decisions, value in use and its carrying value. readily determinable fair value, they provides a single lessee accounting which it does not control. Generally, The amount of any impairment are accounted for under the cost model, requiring lessees to significant influence is presumed is included in income (loss) from method. recognize assets and liabilities to exist when the Company associates, joint ventures and other for all leases unless the lease holds more than 20% of the investments in the consolidated While there are certain limitations term is 12 months or less or the voting rights. Joint arrangements, statements of operations. on the Company’s operating underlying asset has a low value. which include joint ventures and and financial flexibility arising This standard is effective for joint operations, are those over For investments in joint operations, from the restrictive and financial annual periods beginning on or whose activities the Company in which ArcelorMittal exercises covenants of the Company’s after January 1, 2019, with early has joint control, typically under a joint control and has rights to principal credit facilities described application permitted if IFRS 15 has contractual arrangement. In joint the assets and obligations for in note 6.1.2, there are no also been applied. The Company ventures, ArcelorMittal exercises the liabilities relating to the significant restrictions resulting is still in the process of assessing joint control and has rights to the arrangement, the Company from borrowing agreements or whether there will be a material net assets of the arrangement. recognizes its assets, liabilities and regulatory requirements on the change to its consolidated financial The investment is carried using the transactions, including its share of ability of consolidated subsidiaries, statements upon adoption of this equity method of accounting at the those incurred jointly. associates and jointly controlled new standard. cost at the date of the acquisition, entities to transfer funds to adjusted for ArcelorMittal’s share Investments in other entities, the parent in the form of cash On January 19, 2016, the in undistributed earnings or over which the Company and/ dividends to pay commitments as IASB issued amendments to losses since acquisition, less any or its operating subsidiaries do they come due. IAS 12 “Income Taxes”. These impairment incurred. Any excess not have the ability to exercise amendments clarify how to of the cost of the acquisition significant influence and have a Inter-company balances and account for deferred tax assets over the Company’s share of the readily determinable fair value, transactions, including income, related to debt instruments net fair value of the identifiable are accounted for as available- expenses and dividends, are measured at fair value and how assets, liabilities, and contingent for-sale at fair value with any eliminated in the consolidated to recognize deferred tax assets liabilities of the associate or joint resulting gain or loss, net of financial statements. Gains and for unrealized losses. These venture recognized at the date related tax effect, recognized in losses resulting from inter- amendments are effective for of acquisition is considered as the consolidated statements of company transactions are also annual periods beginning on or goodwill. The goodwill is included other comprehensive income, eliminated. after January 1, 2017, with in the carrying amount of the until realized. Realized gains and early application permitted. The investment and is evaluated losses from the sale of available- Non-controlling interests Company is still in the process of for impairment as part of the for-sale securities are determined represent the portion of profit or assessing whether there will be a investment. The consolidated on an average cost method. The loss and net assets not held by material change to its consolidated statements of operations include Company reviews the available- the Company and are presented financial statements upon adoption the Company’s share of the for-sale investments at the end separately in the consolidated of these new amendments. profit or loss of associates and of each reporting period to assess statements of operations, in joint ventures from the date whether there is any objective the consolidated statements of that significant influence or joint evidence of impairment. A other comprehensive income and Note 2: Scope of Consolidation control commences until the significant or prolonged decline within equity in the consolidated date significant influence or joint in the fair value of an available- statements of financial position. 2.1 Basis of consolidation control ceases, adjusted for any for-sale investment below impairment losses. Adjustments its cost is objective evidence The consolidated financial to the carrying amount may also of impairment. The Company 2.2 Investments in subsidiaries statements include the accounts be necessary for changes in the considers a prolonged decline of the Company, its subsidiaries Company’s proportionate interest in fair value to occur when the 2.2.1 List of subsidiaries and its interests in associated in the investee arising from market value remains continuously companies and joint arrangements. changes in the investee’s equity below the cost for more than The table below provides a list of Subsidiaries are consolidated from that have not been recognized in two years. When the Company the Company’s principal operating the date the Company obtains the investee’s profit or loss. The identifies a significant or prolonged subsidiaries at December 31, control (ordinarily the date of Company’s share of those changes decline in fair value, it records 2015. Unless otherwise stated, acquisition) until the date control is recognized directly in equity. an impairment by reclassifying the subsidiaries as listed below ceases. The Company controls an ArcelorMittal reviews all of its the amount accumulated in have share capital consisting entity when it is exposed to or investments in associates and joint other comprehensive income to solely of ordinary shares, which has rights to variable returns from ventures at each reporting date the consolidated statements of are held directly or indirectly by its involvement with the entity to determine whether there is an operations. Once an impairment the Company and the proportion and has the ability to affect those indicator that the investment may loss is recognized for an of ownership interests held returns through its power over the be impaired. If objective evidence investment, any increases in equals to the voting rights held entity. indicates that the investment is fair value are recorded in other by the Company. The country of impaired, ArcelorMittal calculates comprehensive income while incorporation corresponds to their Associated companies are those the amount of the impairment decreases in fair value are recorded principal place of operations. companies over which the of the investments as being the in the consolidated statements 76 Consolidated financial statements

Name of Subsidiary Country % of Ownership NAFTA ArcelorMittal Dofasco Inc. Canada 100.00%1 ArcelorMittal México S.A. de C.V. Mexico 100.00% ArcelorMittal USA LLC USA 100.00% ArcelorMittal Las Truchas, S.A. de C.V. Mexico 100.00% ArcelorMittal Montreal Inc. Canada 100.00%2,3 Brazil ArcelorMittal Brasil S.A. Brazil 100.00% Acindar Industria Argentina de Aceros S.A. Argentina 100.00% Europe ArcelorMittal Atlantique et Lorraine S.A.S. France 100.00% ArcelorMittal Belgium N.V. Belgium 100.00% ArcelorMittal España S.A. Spain 99.85% ArcelorMittal Flat Carbon Europe S.A. Luxembourg 100.00% ArcelorMittal Galati S.A. Romania 99.70% ArcelorMittal Poland S.A. Poland 100.00% Industeel Belgium S.A. Belgium 100.00% Industeel France S.A. France 100.00% ArcelorMittal Eisenhüttenstadt GmbH Germany 100.00% ArcelorMittal Bremen GmbH Germany 100.00% ArcelorMittal Méditerranée S.A.S. France 100.00% ArcelorMittal Belval & Differdange S.A. Luxembourg 100.00% ArcelorMittal Hamburg GmbH Germany 100.00% ArcelorMittal Gipuzkoa S.L. Spain 100.00% ArcelorMittal Ostrava a.s. Czech Republic 100.00% ArcelorMittal Duisburg GmbH Germany 100.00% ACIS ArcelorMittal South Africa Ltd. (“AM South Africa”) South Africa 52.02%4 JSC ArcelorMittal Temirtau Kazakhstan 100.00% PJSC ArcelorMittal Kryvyi Rih (“AM Kryvyi Rih”) Ukraine 95.13% ArcelorMittal International Luxembourg S.A. Luxembourg 100.00% Mining ArcelorMittal Mines Canada Inc. (“AMMC”) Canada 100.00%5 ArcelorMittal Liberia Ltd Liberia 85.00% JSC ArcelorMittal Temirtau Kazakhstan 100.00% PJSC ArcelorMittal Kryvyi Rih Ukraine 95.13% 1 As of January 1, 2016, the business formerly carried on by ArcelorMittal Dofasco Inc. is now carried on by ArcelorMittal Dofasco G.P. 2 As of January 1, 2016, the business formerly carried on by ArcelorMittal Montreal Inc. is now carried on by ArcelorMittal Long Products Canada G.P. 3 The preferred shares of ArcelorMittal Montreal Inc. carry the voting rights. 4 On January 15, 2016, the ownership interest increased to 70.55% (see note 10.5.2). 5 ArcelorMittal Mines Canada Inc. holds an 85% interest in joint venture partnerships (see note 10.5.2). Consolidated financial statements 77

2.2.2 Translation of financial a subsidiary are recorded at the arrangements whose functional years ended December 31, 2015, statements denominated in rates of exchange prevailing at the currency is other than the U.S. 2014 and 2013, respectively, for foreign currency date of the transaction. Monetary dollar are translated into U.S. this purpose. As a result of the assets and liabilities in currencies dollars at the monthly average inflation-related adjustments on The functional currency of other than the functional currency exchange rates and assets and monetary items, losses of 161, ArcelorMittal S.A. is the U.S. dollar. are remeasured at the rates of liabilities are translated at the year- 47 and 21 were recognized in The functional currency of each of exchange prevailing on the date end exchange rates. Translation net financing costs for the years the principal operating subsidiaries of the consolidated statements of adjustments are recognized ended December 31, 2015, is the local currency, except for financial position and the related directly in other comprehensive 2014 and 2013, respectively. ArcelorMittal Mexico, ArcelorMittal translation gains and losses are income and are included in net The financial statements of Unicon Mines Canada and ArcelorMittal reported within financing costs income (including non-controlling were translated into U.S. dollars at International Luxembourg, in the consolidated statements interests) only upon sale or the rates the Company deemed whose functional currency is of operations. Non-monetary liquidation of the underlying appropriate for dividend remittance the U.S. dollar and ArcelorMittal items that are carried at cost foreign subsidiary, associate or which were 13.5, 12.0, 6.3 and 4.3 Ostrava, ArcelorMittal Poland are translated using the rate of joint arrangement. Bs.F. per U.S. dollar for the years and ArcelorMittal Galati, whose exchange prevailing at the date of ended December 31, 2015, 2014, functional currency is the euro. In the transaction. Non-monetary Since 2010 Venezuela has been 2013 and 2012, respectively, 2015, ArcelorMittal Kryvyi Rih and items that are carried at fair value considered a highly inflationary reflecting devaluations of 12.50%, ArcelorMittal Temirtau changed are translated using the exchange country and therefore the financial 90.48% and 46.51%, respectively. their functional currencies from rate prevailing when the fair value statements of the Company’s The following tables present U.S. dollar to their local currencies was determined and the related Venezuelan tubular production selected consolidated financial due to changes in the regulatory translation gains and losses are facilities Industrias Unicon CA information of Unicon as of and and economic environment reported in the consolidated (“Unicon”) are adjusted to reflect for the years ended December 31, and transactional currencies of statements of comprehensive the changes in the general 2015, 2014 and 2013. the operations in Ukraine and income. purchasing power of the local Kazakhstan. currency before being translated Upon consolidation, the results into U.S. dollars. The Company used Transactions in currencies other of operations of ArcelorMittal’s estimated general price indices of than the functional currency of subsidiaries, associates and joint 146.7%, 67.6% and 56.1% for the

For the year endend December 31, 2015 2014 2013 Revenue 1,325 552 538 Cost of sales 1,085 404 377 Operating income 143 112 120 Net income (loss) (121) 20 53

For the year endend December 31, 2015 2014 Property, plant and equipment 376 157 Total assets 954 509 Total liabilities 326 167 ArcelorMittal’s net investment 628 342

In recent years, the Venezuelan maintained the official exchange Currency Administration System into effect. This mechanism was government enacted changes rate of 6.3 Bolivares Fuertes (“SICAD I”). The Company open to companies and individuals, affecting the country’s currency (“Bs.F.”) to 1 U.S. dollar (the concluded that among other but the offer for U.S. dollar was exchange and other controls. In “CENCOEX rate”). Entities can items, future intercompany significantly lower than demand November 2013, the government continue to seek approval to dividend remittances qualify for so amounts exchanged were replaced the Commission for transact through the CENCOEX the purchase of foreign currency at restricted. The Central Bank of the Administration of Foreign mechanism at the official rate, the SICAD I rate under the revised Venezuela fully controlled this Exchange (“CADIVI”) with a new which is honored only for certain law. Nevertheless, conversion mechanism. foreign currency administration, priority transactions. of dividends at the SICAD I rate the National Center for Foreign or at any other rate is difficult In February 2015, the Venezuelan Commerce (“CENCOEX”). In Additional changes in January as authorization for dividend government enacted additional conjunction with this replacement, 2014 expanded the types of remittance is very rare. changes to its foreign exchange CENCOEX assumed control of transactions that may be subject regime. A new, alternative currency the sale and purchase of foreign to the weekly auction mechanism In March 2014, a second market, the Foreign Currency currency in Venezuela, and has under the Supplementary mechanism called SICAD II came Marginal System (“SIMADI”), was 78 Consolidated financial statements

created with a floating exchange On February 17, 2016, the at the official rate or SICAD rate is currently reconsidering the rate generally based on supply and Venezuelan government devalued and records the gains related to exchange rates it will apply going demand. SIMADI substituted the its currency by changing the such transactions when the funds forward to translate its Venezuelan previous SICAD II mechanism. In CENCOEX rate from 6.3 to 10 Bs.F. are authorized by CENCOEX and operations. connection with the establishment per U.S. dollar. It also announced the liabilities are paid. In 2015 and of SIMADI, SICAD I became known the elimination of the SICAD rate 2014, the Company translated The following tables present the as SICAD. As a reference, the and said that beginning February its Venezuelan operations at selected consolidated financial SIMADI exchange rate started 18, 2016, the SIMADI rate will be the SICAD rate because it information of Unicon as of and at 170.0 Bs.F. per U.S. dollar in allowed to float freely beginning at concluded this rate corresponds for the year ended December 31, February 2015, and closed at a rate of approximately 203 Bs.F. to the dividend remittance 2015, had the Company used 198.7 Bs.F.as of December 31, per U.S. dollar. rate in accordance with IFRS the SIMADI rate compared to the 2015. The SICAD exchange rate requirements and it has been able SICAD rate. has been set to 13.5 Bs.F. per U.S. Since 2013, Unicon has been able to settle certain of its U.S. dollar dollar since September 1, 2015. to settle certain of its U.S. dollar obligations for imported materials obligations for imported materials at the SICAD rate. The Company

For the year endend December 31, 2015 SIMADI SICAD Revenue 86 1,325 Cost of sales 71 1,086 Operating income 9 143 Net loss (8) (121)

For the year endend December 31, 2015 SIMADI SICAD Property, plant and equipment 26 376 Total assets 65 954 Total liabilities 22 326 ArcelorMittal’s net investment 43 628

It is possible that the Venezuelan which is the date on which control of the assets acquired and liabilities galvanizing line located in Canada, government will further refine or is transferred to ArcelorMittal. assumed. If, after reassessment, through the acquisition of the 50% alter mechanisms through which The Company controls an entity ArcelorMittal’s interest in the interest held by the other joint companies are able to access when it is exposed to or has net fair value of the acquiree’s operator. DJ Galvanizing is part of U.S. dollar, which could change rights to variable returns from its identifiable assets, liabilities and the NAFTA reportable segment. the rate at which ArcelorMittal involvement with the entity and contingent liabilities exceeds the The revenue and the net result can access U.S. dollar and the has the ability to affect those cost of the business combination, consolidated in 2015, 2014 and rate used by the Company to returns through its power over the the excess (bargain purchase) 2013 amounted to 22, 27 and 21 translate the financial statements entity. is recognized immediately as and (1), (2) and (3) respectively. of its Venezuelan operations. This a reduction of cost of sales in The table below summarizes could have an unfavorable impact The Company measures goodwill the consolidated statements of the estimated fair value of the on the Company’s operating at the acquisition date as the total operations. assets acquired and liabilities results and financial position. In of the fair value of consideration assumed and the total purchase addition, the foreign exchange transferred, plus the proportionate Any contingent consideration price allocation for significant controls in Venezuela may limit amount of any non-controlling payable is recognized at fair value acquisitions made in 2013. the ability to repatriate earnings interest, plus the fair value of any at the acquisition date and any and ArcelorMittal’s Venezuelan previously held equity interest in costs directly attributable to the operations’ ability to remit the acquiree, if any, less the net business combination are expensed dividends and pay intercompany recognized amount (generally at as incurred. balances at any official exchange fair value) of the identifiable assets rate or at all. acquired and liabilities assumed. 2.2.4 Acquisitions

2.2.3 Business combinations In a business combination in which There were no significant the fair value of the identifiable acquisitions in 2015 and 2014. On Business combinations are net assets acquired exceeds the January 11, 2013, ArcelorMittal accounted for using the acquisition cost of the acquired business, the acquired control of the joint method as of the acquisition date, Company reassesses the fair value operation DJ Galvanizing, a hot dip Consolidated financial statements 79

2013 DJ Galvanizing Current assets 2 Property, plant & equipment 112 Total assets acquired 114 Total net assets acquired 114 Previously held equity interests 10 Purchase price, net 57 Bargain purchase (47)1 1 The amount is related to the fair valuation of the previously held 50% interest

2.3 Assets held for sale and of its ArcelorMittal Downstream Tebessa was part of the Mining subsidiary Rozak Demir Profil divestments Solutions operations in the Europe reportable segment. The strategic Ticaret ve Sanayi Anonim Sirketi segment. Accordingly, at December agreement foresaw also the sale (“Rozak”). ArcelorMittal holds a Non-current assets and disposal 31, 2015, the carrying amount of to Sider of a 21% controlling stake 50% stake in AM RZK and the groups that are classified as assets and liabilities subject to the in ArcelorMittal Algérie (previously investment is accounted for under held for sale are measured at transaction were classified as held ArcelorMittal Annaba), which had the equity method. Assets and the lower of carrying amount for sale and the Company recorded been completed for a nil cash liabilities of Rozak subject to the and fair value less costs to sell. in cost of sales an impairment consideration on December 17, transaction were classified as held Assets and disposal groups are charge of 18. The Company 2013. ArcelorMittal Algérie is an for sale at December 31, 2014. classified as held for sale if their expects to close the transaction integrated steel plant in Algeria Rozak was part of the Europe carrying amount will be recovered during the first half of 2016. producing both flat and long steel reportable segment. through a sale transaction rather products in El Hadjar, Annaba. It than through continuing use. This On October 7, 2015, ArcelorMittal was part of the ACIS reportable On January 23, 2015, condition is regarded as met only announced it reached an outline segment. As a result of the ArcelorMittal completed the when the sale is highly probable agreement for restructuring 2013 sale, ArcelorMittal’s stake disposal of the building on Avenue and the asset, or disposal group, is the shareholding of its Algerian decreased from 70% to 49% and de la Liberté in available for immediate sale in its activities (49% interest in the the Company accounted for its (the “Liberté Building”), formerly present condition and is marketed associates ArcelorMittal Algérie remaining interest under the equity the headquarters of the Company, for sale at a price that is reasonable and ArcelorMittal Tebessa and method. to the Banque et Caisse d’Epargne in relation to its current fair value. 70% interest in the subsidiary de l’Etat (“BCEE”) following a Assets held for sale are presented ArcelorMittal Pipes and Tubes On March 30, 2015, following an memorandum of understanding separately in the consolidated Algeria). As part of the agreement, agreement signed on October 21, signed on November 14, 2014. statements of financial position and ArcelorMittal will transfer such 2014, the Company established The property was classified as held are not depreciated. Gains (losses) interests to IMETAL, an Algerian the joint venture ArcelorMittal CLN for sale at December 31, 2014. on disposal are recognized in cost state-owned entity. ArcelorMittal Distribuzione Italia S.r.l. (“AMCDI”) of sales. Pipes and Tubes Algeria is part with Coils Lamiere Nastri S.P.A. The result on disposal for the above of the ACIS reportable segment. (“CLN”) through the contribution mentioned disposals in 2015 was In December 2015, ArcelorMittal Assets and liabilities subject to the of assets and liabilities of its wholly immaterial. The aggregate net committed to a plan to sell its Long transaction were classified as held owned subsidiary ArcelorMittal assets disposed of amounted to Carbon facilities in the US (Laplace, for sale at December 31, 2015. Distribution Solutions Italia S.R.L 97. Steelton and Vinton). These various Previously, on January 10, 2015, (“AMDSI”). ArcelorMittal holds entities are part of the NAFTA ArcelorMittal had completed the a 49% stake in AMCDI, which is On December 31, 2014, reportable segment. The Company sale of a 21% controlling stake accounted for under the equity ArcelorMittal completed the expects to close the transaction in ArcelorMittal Tebessa, which method. Assets and liabilities of disposal of the Kuzbass coal during the first quarter of 2016. At holds two iron ore mines in Ouenza AMDSI subject to the transaction mines (“Kuzbass”) located in the December 31, 2015, assets and and Boukadra, Tebessa, to Sider were classified as held for sale Kemerovo region in Russia to the liabilities subject to the transaction and the Ferphos Group, two at December 31, 2014. AMDSI Russian National Fuel Company. The were classified as held for sale and Algerian state-owned entities. was part of the Europe reportable existing intra group debt of 138 the Company recorded in cost The Company accounted for its segment. was assumed by the buyer who of sales an impairment charge remaining 49% stake under the will repay a net amount of RUB 1.5 of 231 to write their carrying equity method. This sale had been On February 26, 2015, following billion (25) in monthly installments amount down to the expected net contractually agreed on November an agreement signed on September until June 2017. Kuzbass was part proceeds from the sale. The fair 25, 2014 in the framework of 18, 2014, ArcelorMittal of the Mining reportable segment. value measurement of the Long a strategic agreement signed on established the investment Carbon facilities in the US was October 5, 2013. Accordingly, ArcelorMittal RZK Celik Servis On December 11, 2014, the determined using the contract the related assets and liabilities Merkezi Sanayi ve Ticaret Anonim Company contributed the shares price, a Level 3 unobservable input. were classified as held for sale Sirketi (“AM RZK”) with a local of an energy production facility in at December 31, 2013 and partner in Turkey through the the Czech Republic and a second In December 2015, ArcelorMittal they remained held for sale as of contribution of assets and liabilities energy production facility in committed to a plan to sell certain December 31, 2014. ArcelorMittal of the Company’s wholly owned Poland (Europe segment) with 80 Consolidated financial statements

a total carrying amount of 43 On December 9, 2013, on the closing date. These various and Kiswire transactions was into the new joint venture Tameh ArcelorMittal signed an agreement entities were part of the Europe immaterial. The aggregate net Holding Sp.Z.o.o (“Tameh”) created with Bekaert Group (“Bekaert”) reportable segment. At December assets disposed of amounted to with Tauron Group (see note 2.4). to extend its partnership with 31, 2013, the Company wrote the 250. Upon contribution, the interest Bekaert in Latin America to Costa carrying amount down to the net in the new joint venture was Rica and Ecuador. ArcelorMittal proceeds from the sale by 152 and On February 20, 2013, measured at fair value for 120. agreed to sell to Bekaert 73% classified the assets and liabilities ArcelorMittal decreased its of its wire drawing business in subject to the transaction as held shareholding in Baffinland Iron On July 31, 2014, ArcelorMittal ArcelorMittal Costa Rica and Cimaf for sale. The impairment charge Mines LP (“Baffinland”) from completed the sale of all Cabos, a cable business in Osasco of 152 was included in income 70% to 50% following a joint of the shares of Circuit Foil (São Paulo) Brazil, previously a from associates, joint ventures operation agreement signed with Luxembourg, which manufactures branch of Belgo Bekaert Arames and other investments for 111 Nunavut Iron Ore. In consideration, electrodeposited copper foils (“BBA”). BBA is a consolidated with respect to the 50% interest Nunavut Iron Ore correspondingly for the electronics industry, and entity in which ArcelorMittal in Kiswire and in cost of sales for increased its share of funding certain of its subsidiaries (“Circuit holds a 55% controlling interest. 41 with respect to subsidiaries for development of Baffinland’s Foil”) to Doosan Corporation, a The two businesses were part of included in the transaction. Mary River iron ore project. South Korean conglomerate. The the Brazil reportable segment. The fair value measurement Baffinland was and remains part cash consideration amounted to ArcelorMittal also acquired a 27% of the steel cord business was of the Mining reportable segment. 50 (49 net of cash of 1 disposed non-controlling interest in the Ideal determined using the contract ArcelorMittal retained a 50% of). Circuit Foil was included in the Alambrec Ecuador plant controlled price, a Level 3 unobservable interest in the project as well as Europe reportable segment. by Bekaert. The transaction was input. The sale was completed on operator and marketing rights. On completed on April 30, 2014. May 30, 2014. On the closing October 1, 2013, ArcelorMittal On June 30, 2014, ArcelorMittal date, the Company received a and Nunavut Iron Ore structured completed the sale of its 78% Also, on December 9, 2013, preliminary cash consideration of the joint arrangement as a joint stake in the European port handling ArcelorMittal signed an agreement 55 (39 net of cash of 16 disposed) venture. As a result, the Company and logistics company ATIC with Kiswire Ltd. for the sale subsequently revised to 57 after derecognized its 50% interest Services S.A. (“ATIC”) for €155 of its 50% stake in the joint final determination of net debt and in the assets and liabilities of million (144 net of cash of 68 venture Kiswire ArcelorMittal Ltd. working capital situation on closing Baffinland and accounted for disposed of) to H.E.S. Beheer. ATIC (“Kiswire”) in South Korea and date. The existing intra group debt its investment under the equity was part of the Europe reportable certain other entities of its steel of the sold subsidiaries of 102 was method (see note 2.4). segment. As a result of the cord business in the US, Europe assumed by Kiswire and was repaid disposal, non-controlling interests and Asia for a total consideration during the first half of 2015. The table below summarizes the decreased by 81. of 169 (including 21 of external significant divestments made in debt), of which 55 for equity and The result on disposal for 2014 and 2013: 114 for the net debt outstanding the disposals of Circuit Foil in the subsidiaries being purchased Luxembourg, ATIC, the Bekaert

2014 2013 Kuzbass ArcelorMittal Algérie Current assets 6 301 Property, plant and equipment 62 122 Intangible assets 2 - Other assets 1 24 Total assets 71 447 Current liabilities 151 263 Other long-term liabilities 70 208 Total liabilities 221 471 Total net liabilities (150) (24) Non-controlling interests - (7) Allocated goodwill 3 - % of net assets sold 99% 21% Total net liabilities disposed of (147) (5) Cash consideration received - - Write-off of the intra group debt not assumed by the buyer (113) - Reclassification of foreign exchange translation difference 45 - Gain on disposal 79 5 Consolidated financial statements 81

2013 Baffinland Current assets 14 Property, plant and equipment 628 Intangible assets 82 Other assets 30 Total assets 754 Current liabilities 15 Other long-term liabilities 114 Total liabilities 129 Total net assets 625 Non-controlling interests 208 Allocated goodwill 91 Total net assets derecognized 508 Cash consideration received 139 Fair value of assets derecognized 392 Gain on disposal 23

The table below provides details of the assets and liabilities held for sale after elimination of intra-group balances in the consolidated statements of financial position:

Long Carbon facilities in Downstream Solutions Algerian 2015 the US Europe operations Total ASSETS Current assets: Trade accounts receivable and other 39 5 4 48 Inventories 116 14 9 139 Prepaid expenses and other current assets 2 2 8 12 Total current assets 157 21 21 199 Non-current assets: Intangible assets 7 - - 7 Property, plant and equipment 54 - 1 55 Other assets - 1 - 1 Total non-current assets 61 1 1 63 Total assets 218 22 22 262

LIABILITIES Current liabilities: Trade accounts payable and other 57 12 14 83 Accrued expenses and other liabilities 17 14 2 33 Total current liabilities 74 26 16 116 Non-current liabilities: Long-term provisions 79 7 18 104 Total non-current liabilities 79 7 18 104 Total liabilities 153 33 34 220 82 Consolidated financial statements

2014 Rozak AMDSI Liberté Building ArcelorMittal Tebessa Total ASSETS Current assets: Cash and cash equivalents 1 - - - 1 Trade accounts receivable and other 92 10 - - 102 Inventories 76 53 - 28 157 Prepaid expenses and other current assets 10 1 - 2 13 Total current assets 179 64 - 30 273 Non-current assets: Intangibles assets 13 - - - 13 Property, plant and equipment 12 12 79 17 120 Deferred tax assets - 4 - 3 7 Other assets - 1 - - 1 Total non-current assets 25 17 79 20 141 Total assets 204 81 79 50 414 LIABILITIES Current liabilities: Short-term debt and current portion of long-term debt 34 - - - 34 Trade accounts payable and other 54 6 - 9 69 Accrued expenses and other liabilities 3 5 - 3 11 Total current liabilities 91 11 - 12 114 Non-current liabilities: Long-term debt, net of current portion 24 - - - 24 Long-term provisions 1 3 - 3 7 Employee benefits - 2 - 5 7 Deferred tax liabilities 3 2 - - 5 Total non-current liabilities 28 7 - 8 43 Total liabilities 119 18 - 20 157

2.4 Investment in associates and joint arrangements

The Company had the following investments accounted for under the equity method, at December 31, 2015 and 2014:

Carrying value Carrying value Category December 31, 2015 December 31, 2014 Joint ventures 1,443 1,809 Associates 2,688 2,996 Individually immaterial joint ventures and associates1 780 1,028 Total 4,911 5,833 1 Individually immaterial joint ventures and associates represent in aggregate less than 20% of the total carrying amount of investments in joint ventures and associates at December 31, 2015 and 2014, and none of them has a carrying amount exceeding 100 at December 31, 2015 and 160 at December 31, 2014. In the context of the overall decrease in the balance of Investments in associates and joint ventures in the current year, in 2015 ArcelorMittal has individually disclosed Borcelik, which was not individually disclosed in 2014. AM Gonvarri Brasil and Kalagadi, the latter of which was fully impaired in 2015, are no longer disclosed individually as they are no longer considered significant. Consolidated financial statements 83

2.4.1 Joint ventures

The following tables summarize the financial information and reconcile it to the carrying amount of each of the Company’s material joint ventures at December 31, 2015 and 2014, as well as the income statement of the Company’s material joint ventures as of December 31, 2013:

December 31, 2015 Macsteel International Valin ArcelorMittal Joint Ventures Calvert Holdings B.V. Baffinland Automotive Steel Tameh Borcelik Total Place of incorporation and operation * United States Netherlands Canada China Poland Turkey Manufacture and distribution of metal products for Energy Manufacturing Steel trading Development automotive production and and sale of Principal Activity Steel finishing and distribution of iron ore mine industry supply steel Ownership and voting rights % at December 31, 2015 ** 50.00% 50.00% 46.08% 49.00% 50.00% 45.33% Current assets 742 709 115 276 88 353 2,283 of which Cash and cash equivalents 40 132 7 144 4 59 386 Non-current assets 1,230 368 1,501 735 331 339 4,504 Current liabilities 416 396 168 443 97 253 1,773 of which trade and other payables and provisions 105 154 123 289 96 153 920 Non-current liabilities 1,017 50 406 259 97 47 1,876 of which trade and other payables and provisions - 2 30 - 7 - 39 Net assets 539 631 1,042 309 225 392 3,138 Company's share of net assets 270 315 480 151 113 178 1,507 Adjustments for differences in accounting policies and other 7 - (38)a - - (33)b (64) Carrying amount in the statements of financial position 277 315 442 151 113 145 1,443 Revenue 2,094 2,722 - 152 308 838 6,114 Depreciation and amortization (58) (1) - (26) (33) (20) (138) Interest income - 13 - 1 - 1 15 Interest expense (31) (10) - (16) (1) (7) (65) Income tax benefit (expense) - (5) (2) 34 (4) (17) 6 Net income (loss) (23) 32 (66) (88) 14 32 (99) Other comprehensive income (loss) - 8 - - - (1) 7 Total comprehensive income (loss) (23) 40 (66) (88) 14 31 (92) Cash dividends received by the Company 22 10 - - - 9 41 * The country of incorporation corresponds to the country of operation except for Tameh whose country of operation is also the Czech Republic and Macsteel whose countries of operation are mainly United States of America, United Arab Emirates and China. ** The ownership stake is equal to the voting rights percentage. a Adjustment in Baffinland relates primarily to differences in accounting policies regarding revaluation of fixed assets, preferred shares and locally recognized goodwill. b Adjustment in Borcelik relates primarily to differences in accounting policies regarding revaluation of fixed assets. 84 Consolidated financial statements

December 31, 2014 ArcelorMittal Gonvarri Brasil Macsteel Kalagadi Produtos International Manganese Valin ArcelorMittal Joint Ventures Siderúrgicos Calvert Holdings B.V. (Propriety) Ltd Baffinland Automotive Steel Tameh Total Place of incorporation and operation * Brazil United States Netherlands South Africa Canada China Poland Manufacture and distribution of metal Production and products for Energy distribution of Steel trading Development automotive production and Principal Activity metal products Steel finishing and distribution Mining of iron ore mine industry supply Ownership and voting rights % at December 31, 2014 ** 50.00% 50.00% 50.00% 50.00% 50.00% 49.00% 50.00% Current assets 63 998 918 20 123 198 - 2,320 of which Cash and cash equivalents 12 14 136 1 8 90 - 261 Non-current assets 63 1,242 360 663 1,505 661 240 4,734 Current liabilities 22 586 612 193 101 194 - 1,708 of which trade and other payables and provisions 19 161 271 42 81 124 - 698 Non-current liabilities 3 1,076 55 363 411 252 - 2,160 of which trade and other payables and provisions 2 - 4 8 29 - - 43 Net assets 101 578 611 127 1,116 413 240 3,186 Company's share of net assets 51 289 306 64 558 202 120 1,590 Goodwill 50 - - 208 - - - 258 Adjustments for differences in accounting policies and other - 20 - - (59)a - - (39) Carrying amount in the statements of financial position 101 309 306 272 499 202 120 1,809 Revenue 235 2,150 3,434 - - - - 5,819 Depreciation and amortization (5) (40) (1) - - - - (46) Interest income 6 - 11 - - 3 - 20 Interest expense - (19) (8) - - - - (27) Income tax benefit (expense) (4) - (6) (2) 3 - - (9) Net income (loss) 15 89 44 (6) (21) (6) - 115 Other comprehensive income (loss) - - 18 - - - - 18 Total comprehensive income (loss) 15 89 62 (6) (21) (6) - 133 Cash dividends received by the Company 20 - 5 - - - - 25

* The country of incorporation corresponds to the country of operation except for Tameh whose country of operation is also the Czech Republic and Macsteel whose countries of operation are mainly United States of America, United Arab Emirates and China. ** The ownership stake is equal to the voting rights percentage. a Adjustment in Baffinland relates primarily to differences in accounting policies regarding revaluation of fixed assets, preferred shares and locally recognized goodwill. Consolidated financial statements 85

December 31, 2013 ArcelorMittal Gonvarri Brasil Macsteel Kalagadi Produtos International Manganese Valin ArcelorMittal Joint Ventures Siderúrgicos Gallatin Steel** Holdings B.V. (Propriety) Ltd Baffinland Automotive Steel Total Place of incorporation and operation * Brazil United States Netherlands South Africa Canada China Manufacture and distribution of metal Production and products for distribution of Steel Steel trading Development automotive Principal Activity metal products manufacturing and distribution Mining of iron ore mine industry Ownership and voting rights % at December 31, 2013 ** 50.00% 50.00% 50.00% 50.00% 50.00% 49.00% Revenue 398 999 2,580 - - - 3,977 Depreciation and amortization (6) (20) (1) - - - (27) Interest income 6 - 7 - - - 13 Interest expense (1) (1) (4) - - - (6) Income tax expense (6) - (5) (2) - - (13) Net income (loss) 19 35 35 (8) (8) - 73 Other comprehensive income (loss) - - - - (29) - (29) Total comprehensive income (loss) 19 35 35 (8) (37) - 44 Cash dividends received by the Company 8 1 - - - - 9

* The ownership stake is equal to the voting rights percentage. ** The investment in Gallatin Steel Company was sold during 2014 (see below).

ArcelorMittal Gonvarri Brasil and distribution of steel. Based on the analysis of value Baffinland Produtos Siderúrgicos Kalagadi Manganese in use, the Company recognized an impairment charge of 283 in Baffinland is a joint venture ArcelorMittal Gonvarri Brasil Kalagadi Manganese (Propriety) income (loss) from investments since October 1, 2013 between Produtos Siderúrgicos S.A. is Ltd (“Kalagadi Manganese”) in associates, joint ventures and ArcelorMittal and Nunavut Iron Ore. engaged in the manufacture, is a joint venture between other investments (see note 2.6) Baffinland owns the Mary River including auto parts, and sale of ArcelorMittal and Kalahari Resource for the full carrying amount of the project, which has direct shipping, flat rolled steel, to serve, among (Proprietary) Ltd that is engaged in investment (205) and loans (78) high grade iron ore on Baffin Island others, the automotive and exploring, mining, ore processing, as a result of a downward revision in Nunavut (Canada) (see also note metal and mechanics industries and manganese in the of cash flow projections resulting 2.3). During 2015, ArcelorMittal’s in general. The entity processes Kalahari Basin in South Africa. In from the expectation of the shareholding in Baffinland and distributes steel primarily addition, the Company has granted persistence of a lower manganese decreased from 50% to 46.08% in Brazil, and is the result of the loans for the funding of the mining price outlook. At December following a capital increase only acquisition in 2008 of Gonvarri project amounting to 78 including 31, 2015 the carrying value of subscribed by Nunavut Iron Ore. Brasil Produtos Siderúrgicos S.A. accrued interest, which have been Kalagadi was as such no longer by AM Spain Holding and Gonvarri fully impaired in 2015. considered significant and therefore Calvert Steel Industries. At December no longer separately disclosed. 31, 2015 the carrying value of In 2015, the Company tested On February 26, 2014, the ArcelorMittal Gonvarri Brasil the investment for impairment Valin ArcelorMittal Automotive Company together with Produtos Siderúrgicos S.A. was no and determined that the value in Steel & Sumitomo longer considered significant and use was lower than the carrying Metal Corporation (“NSSMC”) therefore no longer separately amount. In determining the value Valin ArcelorMittal Automotive completed the acquisition of disclosed. in use, the Company estimated its Steel (“VAMA”) is a joint venture ThyssenKrupp Steel USA (“TK share in the present value (using a between ArcelorMittal and Hunan Steel USA”), a steel processing Macsteel International Holdings pre-tax discount rate of 12.48%) Valin which produces steel for plant in Calvert, , USA, B.V. of the projected future cash flows high-end applications in the for a total consideration of 1,550 expected to be generated over automobile industry and supplies financed through a combination Macsteel International Holdings the current life-of-the-mine plan international automakers and first- of debt at the joint venture level B.V. is a joint venture between or long term production plan. The tier suppliers as well as Chinese and equity, of which 258 was paid Macsteel Holdings Luxembourg key assumptions for the value in car manufacturers and their by ArcelorMittal. The Company S.á .r.l. and ArcelorMittal South use calculations are primarily the supplier networks. The plant was concluded that it has joint control Africa which provides the discount rates, capital expenditure, inaugurated on June 15, 2014. of the arrangement, AM/NS Company with an international expected changes to average Calvert (“Calvert”), together with network of traders and trading selling prices, shipments and NSSMC, and accounts for its channels including the shipping direct costs during the period. 50% interest in the joint venture 86 Consolidated financial statements

under the equity method. The appliance/ HVAC industries. Borcelik the sale of their respective 50% transaction includes a six-year interests in Gallatin Steel to agreement to purchase two Tameh Borçelik Çelik Sanayii Ticaret Corporation for a total million tonnes of slab annually Anonim Şirketi (“Borçelik”), consideration of 770. The gain from TK CSA, an integrated steel On December 11, 2014, incorporated and located in on disposal for the Company’s mill complex located in Rio de ArcelorMittal and Tauron Group Turkey, is a joint venture between stake was 193 and is included in Janeiro, Brazil, using a market- contributed four energy production ArcelorMittal and Holding income (loss) from investments in based price formula. TK CSA has facilities located in Poland and involved in the manufacturing and associates, joint ventures and other an option to extend the agreement the Czech Republic into the new sale of cold-rolled and galvanized investments for the year ended for an additional three years on arrangement Tameh. The Company flat steel products. December 31, 2014. terms that are more favorable to concluded that it has joint control the joint venture, as compared over Tameh and accounted for its Gallatin Steel 2.4.2 Associates with the initial time period. The 50% interest in the joint venture remaining slab balance is sourced under the equity method. Tameh’s Gallatin Steel Company (“Gallatin The following table summarizes the from ArcelorMittal plants in the US, objective is to ensure energy Steel”) was a joint venture financial information and reconciles Brazil and Mexico. ArcelorMittal supply to the Company’s steel between ArcelorMittal and Gerdau it to the carrying amount of each of is principally responsible for plants in these countries as well as Ameristeel. Their manufacturing the Company’s material associates marketing the product on behalf the utilization of steel plant gases facility, located in Kentucky, at December 31, 2015 and 2014, of the joint venture. Calvert serves for energy production processes. USA, produces hot band coils. On as well as the income statement of the automotive, construction, October 8, 2014, ArcelorMittal the Company’s material associates pipe and tube, service center, and and Gerdau Ameristeel completed as of December 31, 2013:

December 31, 2015 Associates China Oriental DHS GROUP Gestampc Gonvarri Steel Industries Stalprodukt SAc Total Financial statements reporting date Jun 30, 2015 Sep 30, 2015 Sep 30, 2015 Sep 30, 2015 Sep 30, 2015 Place of incorporation and operation * Bermuda Germany Spain Spain Poland Production and Iron and steel Steel Manufacturing of Steel distribution of steel Principal Activity manufacturing manufacturing metal components manufacturing products Ownership and voting rights % at December 31, 2015 ** 46.99% 33.43% 35.00% 35.00% 28.47% Current assets 2,049 1,630 2,360 1,381 346 7,766 Non-current assets 1,558 2,948 3,790 999 525 9,820 Current liabilities 1,822 564 1,890 536 147 4,959 Non-current liabilities 186 936 2,360 289 162 3,933 Non controlling interests 90 139 441 133 27 830 Net assets attributable to equity holders of the parent 1,509 2,939 1,459 1,422 535 7,864 Company's share of net assets 709 983 511 498 152 2,853 Adjustments for differences in accounting policies and other - 43a - (54)b 7 (4) Other adjustments *** (105) (34) (15) (3) (4) (161) Carrying amount in the statements of financial position 604 992 496 441 155 2,688 Revenue 1,768 1,603 5,642 2,194 628 11,835 Profit or loss from continuing operations 6 (47) 169 102 61 291 Net income (loss) 10 (45) 109 102 47 223 Other comprehensive income (1) - (35) (53) - (89) Total comprehensive income (loss) 9 (45) 74 49 47 134 Cash dividends received by the Company - 4 15 14 - 33 * The country of incorporation corresponds to the country of operation except for China Oriental whose country of operation is China. ** The ownership stake is equal to the voting rights percentage, except for Stalprodukt whose voting rights correspond to 28.26%. *** Other adjustments correspond to the difference between the carrying amount at December 31, 2015 and the net assets situation corresponding to the latest financial statements ArcelorMittal is permitted to disclose. a The amount for DHS GROUP includes an adjustment to align with the Company’s accounting policies mainly linked to property, plant and equipment, inventory and pension. b Adjustment in Gonvarri Steel Industries relate primarily to differences in accounting policies regarding revaluation of fixed assets. c Date of the latest available financial statements is September 30, 2015. Consolidated financial statements 87

December 31, 2014 Associates China Oriental DHS GROUP Gestampc Gonvarri Steel Industries Stalprodukt SAc Total Financial statements reporting date Jun 30, 2014 Sep 30, 2014 Sep 30, 2014 Sep 30, 2014 Sep 30, 2014 Place of incorporation and operation * Bermuda Germany Spain Spain Poland Production and Iron and steel Steel Manufacturing of Steel distribution of steel Principal Activity manufacturing manufacturing metal components manufacturing products Ownership and voting rights % at December 31, 2014 ** 47.01% 33.43% 35.00% 35.00% 33.77% Current assets 2,473 1,844 2,767 1,635 338 9,057 Non-current assets 1,568 3,245 4,085 1,131 577 10,606 Current liabilities 1,681 591 1,986 689 169 5,116 Non-current liabilities 789 1,095 2,694 463 212 5,253 Non controlling interests 83 157 550 104 37 931 Net assets attributable to equity holders of the parent 1,488 3,246 1,622 1,510 497 8,363 Company's share of net assets 700 1,085 568 529 168 3,050 Adjustments for differences in accounting policies and other - 68 a - (65)b 9 12 Other adjustments *** (3) (28) (20) (6) (9) (66) Carrying amount in the statements of financial position 697 1,125 548 458 168 2,996 Revenue 2,545 2,000 6,196 2,550 684 13,975 Profit or loss from continuing operations 22 (68) 153 102 33 242 Post-tax profit or loss from discontinued operations - - (2) - - (2) Net income (loss) 6 (75) 98 99 24 152 Other comprehensive income - - 40 14 - 54 Total comprehensive income (loss) 6 (75) 138 113 24 206 Cash dividends received by the Company - - 16 10 - 26 * The country of incorporation corresponds to the country of operation except for China Oriental whose country of operation is China. ** The ownership stake is equal to the voting rights percentage, except for Stalprodukt whose voting rights correspond to 38.20%. *** Other adjustments correspond to the difference between the carrying amount at December 31, 2014 and the net assets situation corresponding to the latest financial statements ArcelorMittal is permitted to disclose. a The amount for DHS GROUP includes an adjustment to align with the Company’s accounting policies mainly linked to property, plant and equipment, inventory and pension. b Adjustment in Gonvarri Steel Industries relate primarily to differences in accounting policies regarding revaluation of fixed assets. c Date of the latest available financial statements is September 30, 2014. 88 Consolidated financial statements

December 31, 2013 Hunan Valin Steel Tube and Wire Co., Gonvarri Steel Associates China Oriental DHS GROUP Ltd.a Gestampb Industries Stalprodukt SAb Total Financial statements reporting date Jun 30, 2013 Sep 30, 2013 Sep 30, 2013 Sep 30, 2013 Sep 30, 2013 Sep 30, 2013 Place of incorporation and operation * Bermuda Germany China Spain Spain Poland Manufacturing Production and Iron and steel Steel Steel of metal Steel distribution of steel Principal Activity manufacturing manufacturing manufacturing components manufacturing products Ownership and voting rights % at December 31, 2013 ** 47.01% 33.43% 20.03% 35.00% 35.00% 33.77% Revenue 2,639 1,941 7,070 5,631 2,495 666 20,442 Profit or loss from continuing operations 24 (169) (39) 138 38 19 11 Post-tax profit or loss from discontinued operations - Net income (loss) 8 (173) (45) 102 37 14 (57) Other comprehensive income (loss) 1 - (2) (71) (30) - (102) Total comprehensive income (loss) 9 (173) (47) 31 7 14 (159) Cash dividends received by the Company - 15 - 23 39 1 78 * The country of incorporation corresponds to the country of operation except for China Oriental whose country of operation is China. ** The ownership stake is equal to the voting rights percentage, except for Stalprodukt whose voting rights correspond to 38.20%. a Following the exercise of the third put option, the accounting treatment for Hunan Valin changed from equity method to available-for-sale (see below). b Date of the latest available financial statements is September 30, 2013.

China Oriental put option agreements. On March the Board of China Oriental has measurement at fair value into 25, 2011, these agreements were determined to issue a certain Level 3. China Oriental Group Company extended until April 30, 2014. number of new shares, but as of Limited (“China Oriental”) is a On April 30, 2014, following December 31, 2015 China Oriental As at December 31, 2013, the Chinese integrated iron and steel simultaneously with the exercise has not determined how many or investment had a value of 222 conglomerate listed on the Hong by Deutsche Bank of its put option when new shares will be issued. based on the quoted stock Kong Stock Exchange (“HKEx”). with respect to a 7.5% stake in price of China Oriental at the However, China Oriental’s shares China Oriental, the Company sold In 2014, following a revision Hong Kong Stock Exchange. were suspended from trading as this investment to Macquarie of business assumptions in the The Company believed that the of April 29, 2014. On November Bank and entered into a put option context of continuing growth quoted share price was not a 8, 2007, ArcelorMittal purchased arrangement with the latter slowdown in China, the Company reliable representation of market approximately 820,000,000 maturing on April 30, 2015. The tested the investment for value as the shares were thinly China Oriental shares for a total Company extended the existing impairment on a fair value basis traded. The Company could not consideration of 644, or a 28.02% put options agreement with ING in and concluded that such fair conclude that the security was equity interest. On December 13, relation to a further 9.9% stake in value was lower than the carrying dealt with on an active market 2007, the Company entered into China Oriental until April 30, 2015. amount. The results of the fair where transactions take place with a shareholder’s agreement which On April 30, 2015, ING Bank and value analysis principally based on sufficient frequency and volume to enabled it to become the majority Macquarie Bank exercised their put market multiples indicated that provide pricing information on an shareholder of China Oriental and option for their respective 9.9% the carrying value recognized was ongoing basis. to finally raise its equity stake in and 7.5% stakes in China Oriental. in excess of the estimated fair China Oriental to 73.13%. At the Accrued expenses and other value of the investment, which In 2013, the Company tested time of the close of its tender offer liabilities and prepaid expenses and approximated the Company’s the investment for impairment on February 4, 2008 ArcelorMittal other current assets decreased share in China Oriental’s net equity. and determined that the value in had reached a 47% shareholding by 96 and 112, respectively, as The recoverable amount of the use was lower than the carrying in China Oriental. The measures a result of these changes. The Company’s investment in China amount. In determining the value to restore the minimum free float Company had not derecognized the Oriental amounted to 697. Based in use, the Company estimated its of 25% as per the HKEx listing 17.4% stake in China Oriental as it on this analysis, the Company share in the present value (using a requirement were achieved by retained its exposure to significant recognized an impairment charge pre-tax discount rate of 11.9% for means of sale of 17.4% stake potential risks and rewards of of 621 in income (loss) from 2013) of the projected future cash to ING Bank N.V. (“ING”) and the investment through the put investments in associates, joint flows expected to be generated by Deutsche Bank Aktiengesellschaft options. In order to restore the ventures and other investments. operations. The value in use was (“Deutsche Bank”) together with minimum free float requirement, The Company classified the based on cash flows for a period of Consolidated financial statements 89

five years, which were extrapolated addition to the cash consideration, On June 6, 2012, ArcelorMittal Hunan Valin decreased from 20% for the remaining years based ArcelorMittal will receive a and Valin Group finalized a to 15%. Accordingly, the Company on an estimated growth rate not payment of €10 million (11) as a share swap arrangement based discontinued the accounting for exceeding the average long-term 2015 dividend. ArcelorMittal will upon a put option mechanism, its investment under the equity growth rate for the relevant continue its supply relationship which enabled ArcelorMittal to method and reclassified its interest markets. Based on the analysis with Gestamp through its 35% exercise over the following two as available-for-sale within other of value in use, the Company shareholding in Gonvarri Steel years put options granted by investments in the statements of recognized an impairment charge Industries, a sister company of the Valin Group with respect to financial position. The resulting of 200 in income (loss) from Gestamp. ArcelorMittal sells coils Hunan Valin shares. Under this loss on disposal was recorded in investments in associates, joint to Gonvarri Steel Industries for arrangement, ArcelorMittal could income (loss) from investments ventures and other investments as processing before they pass to sell up to 20% of the total equity in associates, joint ventures and a result of expectations regarding Gestamp and other customers. (600 million shares) in Hunan Valin other investments and amounted future performance. Further, ArcelorMittal will continue to the Valin Group. The exercise to 76. This amount consisted of a to have a board presence in period of the put options was gain of 13 on disposal of the 5% DHS GROUP Gestamp, collaborate in automotive equally spaced with gaps of six stake and the reclassification of R&D and remain its major steel months and linked to the key the accumulated positive foreign DHS - Dillinger Hütte Saarstahl supplier. development milestones of VAMA. exchange translation difference AG (“DHS GROUP”), incorporated Following the exercise of the from other comprehensive income and located in Germany, is a Gonvarri Steel Industries put options, ArcelorMittal would to the statements of operations of leading heavy plate producer retain a 10% shareholding in 61, offset by a loss of 150 with in Europe. The group’s parent Holding Gonvarri SL (“Gonvarri Hunan Valin as part of a long-term respect to the remeasurement at company is DHS Holding, which Steel Industries”) is dedicated to strategic cooperation agreement. fair value of the remaining interest owns 95.28% of the shares in the processing of steel. The entity ArcelorMittal’s acquisition of the of 15%. the operating company, AG der is a European leader in steel service additional 16% shareholding in Dillinger Hüttenwerke. Dillinger centers and renewable energy VAMA, which would be financed On August 6, 2014, the Company Hütte produces heavy steel plate, components, with strong presence by the sale of shares in Hunan exercised the fourth and last put cast slag pots and semi-finished in Europe and Latin America. Valin using the put options, option, which subsequently led to products, such as pressings, and was approved by the Chinese the decrease in its stake in Hunan pressure vessel heads and shell Stalprodukt SA authorities in December 2012. The Valin from 15% to 10%. The sections. The Dillinger Hütte put option exercise dates were Company recognized a net gain of also includes a further rolling mill Stalprodukt SA is a leading February 6, 2013, August 6, 2013, 62 including a gain of 64 in relation operated by Dillinger France in manufacturer and exporter of February 6, 2014 and August 6, to the option, which was a Level Dunkirk (France). highly processed steel products 2014. The exercise price per share 2 financial instrument, a loss on based in Poland. As of December was CNY 4 for the first two dates disposal of 14 and a proportional Gestamp 31, 2015 and 2014, the and CNY 4.4 for the last two dates. reclassification of the accumulated investment had a market value positive reserve for available- Gestamp Automoción (“Gestamp”) of 155 and 261, respectively. On February 6, 2013 and August for-sale investments from other is a Spanish multi-national On December 16, 2015, the 6, 2013, the Company exercised comprehensive income to the company, which is a leader in the Company sold 356,424 shares the first and second put options statements of operations of 12. European automotive industry. in Stalprodukt, which resulted on Hunan Valin. Its interest in the The activities of Gestamp and in a decrease in the ownership associate decreased accordingly 2.4.3 Other associates and joint its subsidiaries are focused percentage from 33.77% to from 30% to 20%. The aggregate ventures that are not individually on the design, development, 28.47%. The Company recorded resulting gain on disposal was material and manufacturing of metal a loss on disposal of 6 in income recorded as income (loss) from components for the automotive (loss) from investments in investments in associates, joint The Group has interests in a industry via stamping, tooling, associates, joint ventures and other ventures and other investments number of other joint ventures assembly, welding, tailor welded investments (see note 2.6). and amounted to 45, including and associates, none of which are blanks, and die cutting. The entity the proportional reclassification of regarded as individually material. also includes other companies Hunan Valin Steel Tube and Wire the accumulated positive foreign The following table summarizes, dedicated to services such as Co. Ltd. exchange translation difference in aggregate, the financial research and development of new from other comprehensive income information of all individually technologies. Hunan Valin Steel Tube and Wire to the statements of operations immaterial joint ventures and Co. Ltd. (“Hunan Valin”) is a leading of 33. The total consideration was associates that are accounted for On February 1, 2016, ArcelorMittal steel producer in China engaged in 194, of which 169 was reinvested using the equity method: completed the sale of its 35% the production and sale of billet, into a capital increase and into the stake in Gestamp Automoción seamless tube, wire rod, reinforced acquisition of an additional 16% (“Gestamp”) to the majority bar, hot rolled coil, cold rolled coil, interest in VAMA, in which the shareholder, the Riberas family, galvanized coil, sections and Hot Company increased accordingly its for a total cash consideration Rolled (“HR”) plates. The products stake from 33% to 49%. of €875 million (952). The sold to domestic and overseas transaction is unconditional and markets cover a wide range of As a result of the exercise of the payment is expected to be made to market segments. third put option on February 8, ArcelorMittal within six months. In 2014, the Company’s interest in 90 Consolidated financial statements

December 31, 2015 December 31, 2014

Associates Joint Ventures Associates Joint Ventures Carrying amount of interests in associates and joint ventures 297 483 442 586 Share of: Income (loss) from continuing operations 11 (15) (3) 13 Other comprehensive income (loss) (8) 6 - - Total comprehensive income (loss) 3 (9) (3) 13 The Company’s unrecognized a 29% interest). In determining in China Oriental (see above). For Peña Colorada share of accumulated losses in the value in use of its investment the year ended December 31, Peña Colorada is an iron ore ArcelorMittal Algérie amounted in Uttam Galva, the Company 2013 the Company recorded an mine located in Mexico in which to 8, 49 and 4 for the years ended estimated its share in the present impairment loss of 111 in respect ArcelorMittal holds a 50% interest. December 31, 2015, December value (using a pre-tax discount of its investment in Coal of Africa Peña Colorada operates an open 31, 2014 and December 31, 2013, rate of 13.91%) of the projected as a result of lower profitability pit mine as well as concentrating respectively. future cash flows expected to be and decline in market value. The facility and two-line pelletizing The Company’s unrecognized generated by operations. The value Company applied a Level 1 fair facility. share of accumulated losses in AM in use was based on cash flows for value measurement and adjusted RZK amounted to 7 for the year a period of five years, which were the carrying amount to the market Hibbing Taconite Mines ended December 31, 2015. extrapolated for the remaining value of 11 at December 31, 2013. The Hibbing Taconite Mines in years based on an estimated which the Company holds a 62.3% The Company assessed the growth rate not exceeding the The Company is not aware of any interest are iron ore mines located recoverability of its investments average long-term growth rate for material contingent liabilities in the USA and operations consist accounted for using the equity the relevant markets. In addition related to associates and joint of open pit mining, crushing, method whenever there was to the impairment of the carrying ventures for which it is severally concentrating and pelletizing. an indication of impairment. In value, the Company recorded an liable for all or part of the liabilities determining the value in use of impairment charge on the loans of the associates nor are there I/N Tek its investments, the Company related to Uttam Galva for 69. In any contingent liabilities incurred I/N Tek in which the Company estimated its share in the present addition, the Company recorded jointly with other investors. holds a 60% interest operates a value of the projected future cash in impairment charge of 283 See note 8.3 for disclosure of cold-rolling mill in the USA. flows expected to be generated by in respect of its investment in commitments related to associates operations of associates and joint Kalagadi (see above) and 22 with and joint ventures. Double G Coatings ventures. Based on the analysis respect of the Company’s 25% ArcelorMittal holds a 50% interest of the higher of fair value and interest in the Northern Cape Iron 2.4.4 Investments in joint in Double G Coating, a hot dip value in use as of December 31, Ore Mining Project, an associate operations galvanizing and Galvalume facility 2015 the Company recorded an in South Africa. For the remaining in the USA. impairment charge 69 in respect investments the Company In addition to subsidiaries, joint of its investment in Uttam Galva concluded that no impairment ventures and associates as Hibbing Taconite Mines and Peña Steels Ltd (“Uttam Galva”) (a was required. For the year ended described above, the Company also Colorada are part of the Mining manufacturer of cold rolled steel December 31, 2014 the Company had investments in the following segment; other joint operations are and galvanized steel based in recorded an impairment loss of joint operations as of December part of NAFTA. India in which the Company holds 621 in respect of its investment 31, 2015 and 2014:

2.5 Other investments

The Company holds the following other investments:

December 31, 2015 December 31, 2014 Available-for-sale securities (at fair value) 646 1,022 Investments accounted for at cost 46 180 Total 692 1,202 Ereĝli Demir ve Çelik Fabrikalari disposal amounting to 57 was As of December 31, 2015 during the first quarter of 2014 T.A.S. (“Erdemir”) recorded in income (loss) from and 2014, the fair value of and concluded that there was a On October 10, 2013, following investments in associates, joint ArcelorMittal’s remaining stake prolonged decline in fair value the completion of the sale of ventures and other investments. in Erdemir amounted to 441 and that remained continuously 233,169,183 shares in Erdemir The loss corresponded to the 809, respectively. Unrealized gains below cost for more than two by way of a single accelerated proportional reclassification from (losses) recognized in reserves years. Accordingly, it recorded bookbuilt offering to institutional other comprehensive income to amounted to nil and 299 for an impairment charge of 56 in investors, the Company’s interest the consolidated statements of the year ended December 31, income (loss) from investments in Erdemir decreased from 18.74% operations of unrealized losses on 2015 and 2014, respectively. The in associates, joint ventures and to 12.08%. The sale proceeds available-for-sale securities. Company reviewed the investment other investments. During the amounted to 267. The loss on in Erdemir for impairment fourth quarter of 2015, the fair Consolidated financial statements 91

value of Erdemir decreased further Gerdau The Company reviewed the by the financial institution. and the Company accordingly On July 14, 2015, ArcelorMittal investments in Hunan Valin and recorded an additional impairment entered into a share swap Gerdau for impairment and The aforesaid operating leases charge of 101 in income (loss) from agreement with Gerdau whereby concluded that there was no have been agreed for a 12 year investments in associates, joint ArcelorMittal exchanged unlisted impairment trigger. period, during which the Company ventures and other investments shares of Gerdau against listed is obliged to pay to the structured for the year ended December 31, shares and a cash consideration Unconsolidated structured entities minimum fees equivalent to 2015. of 28. The share swap resulted entities approximately 4 per year and per in a gain of 55 recorded as vessel. In addition, ArcelorMittal Hunan Valin income (loss) from investments ArcelorMittal has operating lease holds call options to buy each of As of December 31, 2015 in associates, joint ventures and arrangements for six vessels the six vessels from the structured and 2014, the fair value of other investments. The unlisted (Panamax Bulk Carriers) involving entities at pre-determined dates ArcelorMittal’s remaining stake in shares were accounted for at cost, structured entities whose main and prices as presented in the table Hunan Valin amounted to 153 and whereas the exchanged listed purpose is to hold legal title of the below. The structured entities hold 192. Unrealized gains recognized shares are accounted for at fair six vessels and to lease them to put options enabling them to sell in other comprehensive income value. As of December 31, 2015, the Company. The operating lease each of the vessels at the end of amounted to 62 and 101 for the the fair value of ArcelorMittal’s arrangements for five vessels were the lease terms at 6 each to the year ended December 31, 2015 stake in Gerdau amounted to entered in 2013 and for a sixth Company. and 2014. 36. Unrealized losses recognized vessel in 2014. These entities are in other comprehensive income wholly-owned and controlled by amounted to 28 for the year ended a financial institution. They are December 31, 2015. funded through equity instruments

Call options’ strike prices at the 60th at the 72nd at the 84th at the 96th at the 108th at the 120th at the 132nd at the 144th Exercise dates month month month month month month month month Amounts per vessel* First four vessels 28 26 25 23 21 19 17 14 Fifth vessel 29 27 26 24 22 20 17 14 Sixth vessel 31 30 28 27 26 24 20 14 * If actual fair values of each vessel are higher than strike prices at each of the exercise dates, ArcelorMittal is then obliged to share (50%/50%) the gain with the structured entities. In addition, pursuant to these bear interest, is forgiven upon interim call options, if exercised. Income (loss) from investments in arrangements, the Company default and will be repaid by the associates, joint ventures and other had a receivable of 33 and 37 at structured entities quarterly in 2.6 Income (loss) from investments investments for the years ended December 31, 2015 and December arrears throughout the lease term. in associates, joint ventures and December 31, 2015, 2014 and 31, 2014, respectively (classified The outstanding balance will be other investments 2013 consisted of the following: as “Other assets”), which does not used to offset payment of any

Year ended December 31, 2015 Year ended December 31, 2014 Year ended December 31,2013 Share in net earnings of equity-accounted companies (59) 267 (15) Impairment charges1 (565) (677) (422) Gain (loss) on disposal2 46 179 (4) Dividend income 76 59 55 Other3 - - (56) Total (502) (172) (442) 1 Mainly includes impairment charges in respect of the Company’s investments in Kalagadi, Uttam Galva and Northern Cape Iron Ore Mining Project (see note 2.4), and 101 in respect of the Company’s investment in Erdemir (see note 2.5) for the year ended December 31, 2015. Includes impairment charges of 56 relating to Erdemir (see note 2.5) and 621 relating to the Company’s 47% stake in the associate China Oriental (see note 2.4) for the year ended December 31, 2014. Includes impairment charges of 200 related to China Oriental (see note 2.4), 111 relating to the Company’s 50% interest in the associate Kiswire ArcelorMittal Ltd in the framework of the agreed sale of certain steel cord assets to the joint venture partner Kiswire Ltd. and 111 relating to the associate Coal of Africa as a result of lower profitability and decline in market value for the year ended December 31, 2013. 2 Mainly includes a net gain of 55 relating to the Gerdau share swap (see note 2.5) for the year ended December 31, 2015. Includes a 193 gain on disposal of the Company’s 50% interest in Gallatin (see note 2.4) and a net loss of 14 related to the disposal of the Hunan Valin shares (see note 2.4) for the year ended December 31, 2014. Includes a charge of 57 following the disposal of a 6.66% interest in Erdemir shares by way of a single accelerated bookbuilt offering to institutional investors and a gain of 45 with respect to the sale of a 10% interest in Hunan Valin following the exercise of the first and second put options (see note 2.4) and a gain of 8 following the exercise of put options reducing the Company’s stake in Coils Lamiere Nastri (“CLN”) S.p.a. from 35.00% to 24.55%, including a loss of 4 corresponding to the proportional reclassification of the accumulated negative foreign exchange translation reserve from other comprehensive income to the statements of operations for the year ended December 31, 2013. 3 Includes a 56 expense for contingent consideration with respect to the Gonvarri Brasil acquisition made in 2008 for the year ended December 31, 2013. 92 Consolidated financial statements

Note 3: Segment reporting liabilities are also those resulting products; primarily an in-house trading and from the normal activities of distribution arm of ArcelorMittal. 3.1 Reportable segments the segment, excluding tax • Brazil includes the flat operations Distribution Solutions also liabilities and indebtedness of Brazil and the long and provides value-added and The Company is organized in but including post retirement tubular operations of Brazil and customized steel solutions five operating and reportable obligations where directly neighboring countries including through further steel processing segments, which are components attributable to the segment. The Argentina, Costa Rica, Trinidad to meet specific customer engaged in business activities treasury function is managed and Tobago and Venezuela. Flat requirements; from which they may earn centrally for the Company and products include slabs, hot-rolled revenues and incur expenses is not directly attributable to coil, cold-rolled coil and coated • ACIS produces a combination (including revenues and expenses individual operating segments or steel. Long products consist of of flat, long products and relating to transactions with other geographical areas. wire rod, sections, bar and rebar, tubular products. Its facilities components of the Company), billets, blooms and wire drawing; are located in Asia, Africa and for which discrete financial ArcelorMittal’s segments are Commonwealth of Independent information is available and whose structured as follows: • Europe is the largest flat steel States; and operating results are evaluated producer in Europe, with regularly by the chief operating • NAFTA represents the flat, long operations that range from • Mining comprises all mines decision maker “CODM” to make and tubular facilities of the Spain in the west to Romania in owned by ArcelorMittal in the decisions about resources to Company located in North the east, and covering the flat Americas (Canada, USA, Mexico be allocated to the segment America (Canada, United States carbon steel product portfolio in and Brazil), Asia (Kazakhstan), and assess its performance. and Mexico). NAFTA produces all major countries and markets. Europe (Ukraine and Bosnia & ArcelorMittal’s CODM is the group flat products such as slabs, hot- Europe produces hot-rolled coil, Herzegovina) and Africa (Liberia). management board “GMB”. rolled coil, cold-rolled coil, coated cold-rolled coil, coated products, It supplies the Company and steel and plate. These products tinplate, plate and slab. These third party customers with iron These operating segments are sold primarily to customers products are sold primarily to ore and coal. include the attributable goodwill, in the following industries: customers in the automotive, intangible assets, property, plant distribution and processing, general industry and packaging The following table summarizes and equipment, and equity automotive, pipe and tubes, industries. Europe produces certain financial data relating to method investments. They do construction, packaging, and also long products consisting of ArcelorMittal’s operations in its not include cash and short-term appliances. NAFTA also produces sections, wire rod, rebar, billets, different reportable segments. deposits, short-term investments, long products such as wire rod, blooms and wire drawing, and tax assets and other current sections, rebar, billets, blooms tubular products. In addition, it financial assets. Attributable and wire drawing, and tubular includes Distribution Solutions,

Year ended December 31, 2013 NAFTA Brazil Europe ACIS Mining Others* Elimination Total Sales to external customers 19,416 9,877 40,086 8,254 1,659 148 - 79,440 Intersegment sales** 229 271 421 164 4,107 606 (5,798) - Operating income (loss) 630 1,204 (985) (457) 1,176 (298) (73) 1,197 Depreciation 767 691 2,003 542 642 50 - 4,695 Impairment - - 86 196 162 - - 444 Capital expenditures 422 276 990 398 1,342 24 - 3,452 Year ended December 31, 2014 Sales to external customers 21,030 9,558 39,224 8,032 1,320 118 - 79,282 Intersegment sales** 132 479 328 236 3,650 419 (5,244) - Operating income (loss) 386 1,388 737 95 565 (264) 127 3,034 Depreciation 706 457 1,510 525 703 38 - 3,939 Impairment 114 - 57 - 63 30 - 264 Capital expenditures 505 497 1,052 573 993 45 - 3,665 Year ended December 31, 2015 Sales to external customers 17,225 7,954 31,586 5,932 824 57 - 63,578 Intersegment sales** 68 549 307 196 2,563 311 (3,994) - Operating income (loss) (705) 628 171 (624) (3,522) (140) 31 (4,161) Depreciation 616 336 1,192 408 614 26 - 3,192 Impairment 526 176 398 294 3,370 - - 4,764 Capital expenditures 392 422 1,045 365 476 7 - 2,707

*Others include all other operational and non-operational items which are not segmented, such as corporate and shared services, financial activities, and shipping and logistics. **Transactions between segments are reported on the same basis of accounting as transactions with third parties except for certain mining products shipped internally and reported on a cost plus basis. Consolidated financial statements 93

The reconciliation from operating income (loss) to net income is as follows:

Year ended December 31, 2015 Year ended December 31, 2014 Year ended December 31, 2013 Operating income (loss) (4,161) 3,034 1,197 Loss from investments in associates and joint ventures (502) (172) (442) Financing costs - net (2,858) (3,382) (3,115) Income (loss) before taxes (7,521) (520) (2,360) Income tax expense 902 454 215 Net loss (including non-controlling interests) (8,423) (974) (2,575)

The Company does not regularly provide assets for each reportable segment to the CODM

3.2 Geographical information regional markets. Attributed assets heading as a segment disclosures, current financial assets. Attributed are operational assets employed these disclosure are specific to liabilities are those arising Geographical information, by in each region and include items the country or region stated. They within each region, excluding country or region, is separately such as pension balances that do not include goodwill, deferred indebtedness. disclosed and represents are specific to a country. Unless tax assets, other investments ArcelorMittal’s most significant otherwise stated in the table or receivables and other non-

Sales (by destination)

Year ended December 31, 2015 Year ended December 31, 2014 Year ended December 31, 2013 Americas United States 13,619 17,312 15,625 Brazil 3,809 6,299 6,576 Canada 2,913 3,462 3,299 Mexico 1,913 2,216 2,081 Argentina 1,370 1,161 1,279 Venezuela 1,334 612 676 Others 951 1,235 1,505 Total Americas 25,909 32,297 31,041 Europe Germany 5,473 6,649 6,834 France 3,743 4,499 4,764 Spain 3,406 3,907 3,900 Poland 3,023 3,815 3,523 Italy 2,278 2,701 2,771 Turkey 1,962 2,576 2,469 Czech Republic 1,476 1,579 1,608 United Kingdom 1,246 1,480 1,442 Belgium 1,108 1,268 1,264 Netherlands 867 917 904 Russia 638 1,216 1,618 Romania 583 728 755 Others 4,024 4,948 5,071 Total Europe 29,827 36,283 36,923 Asia & Africa South Africa 2,111 2,629 2,908 China 557 941 1,395 Morocco 533 696 744 Kazakhstan 456 668 791 South Korea 242 593 277 India 197 225 406 Others 3,746 4,950 4,955 Total Asia & Africa 7,842 10,702 11,476 Total 63,578 79,282 79,440 94 Consolidated financial statements

Revenues from external customers attributed to the country of domicile (Luxembourg) were 85, 53 and 118 as of December 31, 2015, 2014 and 2013, respectively.

Non-current assets* per significant country:

Year ended December 31, 2015 Year ended December 31, 2014 Americas Canada 5,274 5,723 United States 4,289 5,799 Brazil 3,770 5,815 Mexico 952 1,324 Venezuela 376 157 Argentina 179 210 Trinidad and Tobago - 199 Others 24 26 Total Americas 14,864 19,253 Europe France 4,468 4,988 Germany 2,546 2,900 Belgium 2,493 2,666 Ukraine 2,439 3,727 Poland 2,140 2,373 Spain 1,945 2,667 Luxembourg 1,266 1,409 Czech Republic 632 695 Romania 610 681 Boznia and Herzegovina 202 230 Italy 174 201 Others 251 304 Total Europe 19,166 22,841 Asia & Africa Kazakhstan 1,168 2,173 South Africa 767 1,393 Morocco 118 143 Liberia 25 1,436 Others 121 136 Total Asia & Africa 2,199 5,281 Unallocated assets 18,291 23,747 Total 54,520 71,122

*Non-current assets do not include goodwill (as it is not allocated to the geographic regions), deferred tax assets, investment in associate and joint ventures, other investments and other non-current financial assets. Such assets are presented under the caption “Unallocated assets”.

3.3 Sales by type of products

The table below presents sales to external customer by product type. In addition to steel produced by the Company, amounts include material purchased for additional transformation and sold through distribution services. Others include mainly non-steel sales and services.

Year ended December 31, 2015 Year ended December 31, 2014 Year ended December 31, 2013 Flat products 36,226 44,863 43,737 Long products 13,996 18,671 19,331 Tubular products 2,809 2,518 2,401 Mining products 824 1,319 1,659 Others 9,723 11,911 12,312 Total 63,578 79,282 79,440 Consolidated financial statements 95

Note 4: Operating data significant risks and rewards of Revenue from the sale of iron specifications. ownership of the goods, no longer ore is recognized when the risk ArcelorMittal records amounts 4.1 Revenue retains control over the goods and rewards of ownership are billed to a customer in a sale sold, the amount of revenue can transferred to the buyer. The transaction for shipping and Revenue is measured at the fair be measured reliably, it is probable selling price is contractually handling costs as sales and the value of the consideration received that the economic benefits determined on a provisional basis, related shipping and handling costs or receivable. Revenue is reduced associated with the transaction based on a reliable estimate of the incurred as cost of sales. for estimated customer returns will flow to the Company, and the selling price and adjustments in and other similar allowances. costs incurred or to be incurred in the price may subsequently occur 4.2 Cost of sales respect of the transaction can be depending on movements in the Revenue from the sale of goods measured reliably. reference price or contractual Cost of sales recognized in the is recognized when the Company iron ore prices to the date of the years ended December 31, 2015, has transferred to the buyer the final pricing and final product 2014 and 2013 is as follows:

Year ended December 31, 2015 Year ended December 31, 2014 Year ended December 31, 2013 Materials 41,788 50,760 51,780 Labor costs 9,125 10,722 10,410 Logistic expenses 4,252 5,020 4,294 Depreciation and amortization 3,192 3,939 4,695 Impairment 4,764 264 444 Other 2,075 2,583 2,994 Total 65,196 73,288 75,247

4.3 Trade accounts receivable and of its customers to make required as gains in selling, general and generally not recoverable, unless it other payments. In judging the adequacy administrative expenses. can be clearly demonstrated that of the allowance for doubtful ArcelorMittal’s policy is to record the receivable is still collectible. Trade accounts receivable are accounts, ArcelorMittal considers an allowance and a charge in Estimated unrecoverable amounts initially recorded at their fair value multiple factors including historical selling, general and administrative of trade receivables between 60 and do not carry any interest. bad debt experience, the current expense when a specific account days and 180 days overdue are ArcelorMittal maintains an economic environment and the is deemed uncollectible and provided for based on past default allowance for doubtful accounts aging of the receivables. Recoveries to provide for each receivable experience. at an amount that it considers of trade receivables previously overdue by more than 180 days Trade accounts receivable and to be a reasonable estimate of reserved in the allowance for because historical experience is allowance for doubtful accounts as losses resulting from the inability doubtful accounts are recognized such that such receivables are of December 31, are as follows:

Year ended December 31, 2015 Year ended December 31, 2014 Gross amount 2,849 3,871 Allowance for doubtful accounts (170) (175) Total 2,679 3,696

The carrying amount of the trade accounts receivable and other approximates fair value. Before granting credit to any new customer, ArcelorMittal uses an internally developed credit scoring system to assess the potential customer’s credit quality and to define credit limits by customer. For all significant customers the credit terms must be approved by the credit committees of each individual segment. Limits and scoring attributed to customers are reviewed periodically. There are no customers who represent more than 5% of the total balance of trade accounts receivable.

Exposure to credit risk by reportable segment

The maximum exposure to credit risk for trade accounts receivable by reportable segment at December 31 is as follows:

2015 2014 NAFTA 277 307 Brazil 610 815 Europe 1,447 2,021 ACIS 274 450 Mining 69 100 Other activities 2 3 Total 2,679 3,696 96 Consolidated financial statements

Aging of trade accounts receivable

The aging of trade accounts receivable as of December 31 is as follows:

2015 2014 Gross Allowance Total Gross Allowance Total Not past due 1,966 (6) 1,960 2,942 (1) 2,941 Overdue 1-30 days 335 (2) 333 477 (2) 475 Overdue 31-60 days 106 (1) 105 111 (1) 110 Overdue 61-90 days 47 (1) 46 50 (1) 49 Overdue 91-180 days 114 (2) 112 57 (5) 52 More than 180 days 281 (158) 123 234 (165) 69 Total 2,849 (170) 2,679 3,871 (175) 3,696

The movement in the allowance for doubtful accounts in respect of trade accounts receivable during the periods presented is as follows:

Balance as of December 31, 2012 Additions Deductions/Releases Foreign exchange and others Balance as of December 31, 2013 202 69 (45) (8) 218

Balance as of December 31, 2013 Additions Deductions/Releases Foreign exchange and others Balance as of December 31, 2014 218 43 (44) (42) 175

Balance as of December 31, 2014 Additions Deductions/ Releases Foreign exchange and others Balance as of December 31, 2015 175 41 (19) (27) 170

The Company has established converted to U.S. dollars at the valued at cost, inclusive of freight, value is estimated based on the a number of programs for sales monthly average exchange rate). shipping, handling as well as any most reliable evidence available at without recourse of trade accounts Expenses incurred under the TSR other costs incurred in bringing the time the estimates were made receivable to various financial programs (reflecting the discount the inventories to their present of the amount that the inventory institutions (referred to as True granted to the acquirers of the location and condition. Interest is expected to realize, taking into Sale of Receivables (“TSR”)). accounts receivable) recognized charges, if any, on purchases have account the purpose for which the Through the TSR programs, in the consolidated statements been recorded as financing costs. inventory is held. certain operating subsidiaries of operations for the years ended Costs incurred when production of ArcelorMittal surrender December 31, 2015, 2014 and 2013 levels are abnormally low are Previous write downs are reversed the control, risks and benefits were $116 million, $150 million capitalized as inventories based in case the circumstances that associated with the accounts and $172 million, respectively. on normal capacity with the previously caused inventories to be receivable sold; therefore, the remaining costs incurred recorded written down below cost no longer amount of receivables sold is 4.4 Inventories as a component of cost of sales exist. recorded as a sale of financial in the consolidated statements of assets and the balances are Inventories are carried at the operations. removed from the consolidated lower of cost and net realizable statements of financial position value. Cost is determined using Net realizable value represents the at the moment of sale. The total the average cost method. Costs of estimated selling price at which amount of receivables sold under production in process and finished the inventories can be realized TSR programs and derecognized goods include the purchase costs in the normal course of business in accordance with IAS 39 for the of raw materials and conversion after allowing for the cost of years ended 2015, 2014 and 2013 costs such as direct labor and an conversion from their existing was $33.1 billion, $37.8 billion allocation of fixed and variable state to a finished condition and and $35.4 billion, respectively production overheads. Raw for the cost of marketing, selling, (with amounts of receivables sold materials and spare parts are and distribution. Net realizable

Inventories, net of allowance for slow-moving inventory, excess of cost over net realizable value and obsolescence of 1,707 and 1,293 as of December 31, 2015 and 2014, respectively, are comprised of the following:

December 31, 2015 December 31, 2014 Finished products 4,777 6,264 Production in process 2,971 3,701 Raw materials 4,032 5,691 Manufacturing supplies, spare parts and other 1,644 1,648 Total 13,424 17,304

Note 4.2 discloses the cost of inventories recognized as an expense during the year. The amount of inventory pledged as collateral was nil as of December 31, 2015 and 2014. Consolidated financial statements 97

The movement in the inventory reserve is as follows:

Balance as of December 31, 2012 Additions* Deductions/Releases Foreign exchange and others Balance as of December 31, 2013 1,427 440 (364) (8) 1,495

Balance as of December 31, 2013 Additions* Deductions/Releases Foreign exchange and others Balance as of December 31, 2014 1,495 355 (387) (170) 1,293

Balance as of December 31, 2014 Additions* Deductions/ Releases Foreign exchange and others Balance as of December 31, 2015 1,293 932 (312) (206) 1,707

* Additions exclude write-downs of inventories written back or utilized during the same financial year.

4.5 Prepaid expenses and other current assets

Prepaid expenses and other current assets consisted of the following:

December 31, 2015 December 31, 2014 VAT receivables 850 1,102 Income tax receivable 115 106 Derivative financial instruments 128 192 Prepaid expenses and non-trade receivables 406 544 Collateral related to the put agreement on China Oriental 1 - 112 Other2 360 571 Total 1,859 2,627 1 The consideration for the disposal of a 17.40% interest in China Oriental shares was paid to Macquarie Bank and ING as collateral to secure the obligations of the Company under put agreements. The put option agreements matured on April 30, 2015. See note 2.4.2. 2 Other includes mainly advances to employees, accrued interest, amounts receivables from public authorities and other miscellaneous receivables.

4.6 Other assets

Other assets consisted of the following:

December 31, 2015 December 31, 2014 Financial amounts receivable 166 454 Long-term VAT receivables 197 279 Cash guarantees and deposits 181 231 Accrued interest 74 151 Assets in pension funds1 18 32 Income tax receivable 9 11 Derivative financial instruments 90 4 Other2 185 266 Total 920 1,428 1 The pension funds are mainly related to units in Canada. 2 Other mainly includes cash deposits, receivables from public authorities and receivables from the sale of fixed assets.

4.7 Trade accounts payable and other

Trade accounts payable are obligations to pay for goods that have been acquired in the ordinary course of business from suppliers. Trade accounts payable have maturities from 15 to 180 days depending on the type of material, the geographic area in which the purchase transaction occurs and the various contractual agreements. The carrying value of trade accounts payable approximates fair value. 98 Consolidated financial statements

4.8 Accrued expenses and other liabilities Accrued expenses and other liabilities are comprised of the following as of December 31: 2015 2014 Accrued payroll and employee related expenses 1,568 1,869 Collection under TSR programs 1,439 1,256 Accrued interest and other payables 1,026 979 Payable from acquisition of intangible, tangible & financial assets 852 915 Other amounts due to public authorities 559 528 Derivative financial instruments 133 134 Unearned revenue and accrued payables 56 59 Total 5,633 5,740

NOTE 5: GOODWILL, INTANGIBLE AND TANGIBLE ASSETS 5.1 Goodwill and intangible assets The carrying amounts of goodwill and intangible assets are summarized as follows: 2015 2014 Goodwill on acquisitions 5,143 7,322 Concessions, patents and licenses 266 488 Customer relationships and trade marks 170 278 Other 13 16 Total 5,592 8,104 Goodwill Goodwill arising on an acquisition is recognized as previously described within the business combinations section in note 2.2.3. Goodwill is allocated to those groups of cash-generating units that are expected to benefit from the business combination in which the goodwill arose and in all cases is at the operating segment level, which represents the lowest level at which goodwill is monitored for internal management purposes. Goodwill acquired in business combinations for each of the Company’s operating segments is as follows: Foreign exchange Impairment and differences and other December 31, 2013 reduction of goodwill movements Divestments December 31, 2014 NAFTA 2,398 - (62) - 2,336 Brazil 2,332 - (275) - 2,057 Europe 663 - (48) (11) 604 ACIS 1,456 - 1 - 1,457 Mining 886 - (15) (3) 868 Total 7,735 - (399) (14) 7,322

Foreign exchange Impairment and differences and other December 31, 2014 reduction of goodwill movements Divestments December 31, 2015 NAFTA 2,336 - (172) - 2,209 Brazil 2,057 - (631) - 1,426 Europe 604 - (57) - 547 ACIS 1,457 - (496) - 961 Mining 868 (854) (14) - - Total 7,322 (854) (1,325) - 5,143 Intangible assets recorded at fair value at the date is included in the consolidated and Spain. The emission rights of the business combination. statements of operations as part allocated to the Company on a Intangible assets are recognized These primarily include the of depreciation. no-charge basis pursuant to the only when it is probable that cost of technology and licenses annual national allocation plan the expected future economic purchased from third parties ArcelorMittal’s industrial sites are recorded at nil value and benefits attributable to the and operating authorizations which are regulated by the purchased emission rights are assets will accrue to the granted by governments or other European Directive 2003/87/EC recorded at cost. Gains and losses Company and the cost can be public bodies (concessions). of October 13, 2003 on carbon from the sale of excess rights reliably measured. Intangible Intangible assets are amortized dioxide (“CO2”) emission rights, are recognized in cost of sales in assets acquired separately by on a straight-line basis over effective as of January 1, 2005, the consolidated statements of ArcelorMittal are initially recorded their estimated economic useful are located primarily in Belgium, operations. at cost and those acquired in a lives, which typically do not Czech Republic, France, Germany, business combination are initially exceed five years. Amortization Luxembourg, Poland, Romania Consolidated financial statements 99

Other intangible assets are summarized as follows:

Concessions, Customer patents and relationships licenses and trade marks Other Total Cost At December 31, 2013 1,118 1,667 867 3,652 Acquisitions 18 - 4 22 Disposals (10) (10) - (20) Foreign exchange differences (129) (164) (5) (298) Divestments (note 2.3) (14) (3) (2) (19) Transfers to assets held for sale (note 2.3) - (47) - (47) Transfers and other movements (10) (18) (3) (31) Fully amortized intangible assets * (4) (77) (801) (882) At December 31, 2014 969 1,348 60 2,377 Acquisitions 11 - 3 14 Disposals (8) - (1) (9) Foreign exchange differences (160) (206) (6) (372) Transfers to assets held for sale (note 2.3) - (52) (29) (81) Transfers and other movements 10 (13) 9 6 Fully amortized intangible asset* (92) - - (92) At December 31, 2015 730 1,077 36 1,843

Accumulated amortization and impairment losses At December 31, 2013 548 1,256 849 2,653 Disposals (10) (10) - (20) Amortization charge 55 88 3 146 Foreign exchange differences (87) (130) (5) (222) Divestments (note 2.3) (10) (3) (2) (15) Transfers to assets held for sale (note 2.3) - (34) - (34) Transfers and other movements (11) (20) - (31) Fully amortized intangible assets * (4) (77) (801) (882) At December 31, 2014 481 1,070 44 1,595 Disposals (7) - - (7) Amortization charge 37 65 7 109 Impairment charge 157 - - 157 Foreign exchange differences (107) (163) (6) (276) Transfers to assets held for sale (note 2.3) - (52) (22) (74) Transfers and other movements (5) (13) - (18) Fully amortized intangible asset* (92) - - (92) At December 31, 2015 464 907 23 1,394

Carrying amount At December 31, 2014 488 278 16 782 At December 31, 2015 266 170 13 449

* Fully amortized assets in 2014 correspond mainly to favorable contracts that are no longer used by the Company and exploration and evaluation assets. Fully amortized assets in 2015 correspond mainly to concessions.

Research and development costs not meeting the criteria for capitalization are expensed as incurred. These costs amounted to 227, 259 and 270 in the years ended December 31, 2015, 2014, and 2013, respectively. 100 Consolidated financial statements

5.2 Property, plant and equipment Property, plant and equipment is recorded at cost less accumulated depreciation and impairment. Cost includes all related costs directly attributable to the acquisition or construction of the asset. Except for land and assets used in mining activities, property, plant and equipment is depreciated using the straight-line method over the useful lives of the related assets as presented in the table below.

Asset Category Useful Life Range Land Not depreciated Buildings 10 to 50 years Property plant & equipment 15 to 50 years Auxiliary facilities 15 to 45 years Other facilities 5 to 20 years

During 2014, the Company process control that contribute so as to achieve a constant rate of Mining Reserves performed a review of the useful to longer asset lives. In addition, interest on the remaining balance lives of its assets and determined the Company considered the of the liability. Reserves are estimates of the its maintenance and operating accumulated technical experience amount of product that can be practices enabled a change in and knowledge sharing programs The residual values and useful lives economically and legally extracted the useful lives of plant and that allowed for the exchange of property, plant and equipment from the Company’s properties. equipment. Maintenance practices of best practices within the chief are reviewed at each reporting In order to estimate reserves, employed served to preserve and technical officer network and the date and adjusted if expectations estimates are required about a extend the operating life of certain deployment of these practices differ from previous estimates. range of geological, technical of these assets, while operating across the Company’s principal Depreciation methods applied to and economic factors, including practices in the current economic production units. Depreciation property, plant and equipment quantities, grades, production environment also contributed to charge for the year ended are reviewed at each reporting techniques, recovery rates, the extension of asset useful life December 31, 2014 decreased date and changed if there has production costs, transport costs, beyond previous estimates. The by 702 as a result of changes in been a significant change in the commodity demand, commodity Company thus revised the useful estimated useful lives. expected pattern of consumption prices and exchange rates. lives due to its determination that of the future economic benefits certain of its existing assets had Major improvements, which add embodied in the asset. Estimating the quantity and/or been used longer than previously to productive capacity or extend grade of reserves requires the size, anticipated and therefore, the the life of an asset, are capitalized, Mining assets comprise: shape and depth of ore bodies estimated useful lives of certain while repairs and maintenance to be determined by analyzing plant and equipment were are expensed as incurred. Where • Mineral rights acquired; geological data such as drilling lengthened. a tangible fixed asset comprises • Capitalized developmental samples. This process may require major components having stripping (as described below complex and difficult geological The Company’s most recent different useful lives, these in “Stripping and overburden judgments to interpret the data. review of useful lives leveraged components are accounted for as removal costs”). Because the economic the experience and specialized separate items. assumptions used to estimate knowledge of ArcelorMittal’s Property, plant and equipment reserves change from period to network of chief technical officers. Property, plant and equipment used in mining activities is period, and because additional The chief technical officer network under construction is recorded depreciated over its useful life geological data is generated includes engineers with facility- as construction in progress until or over the remaining life of the during the course of operations, specific expertise relating to it is ready for its intended use; mine, if shorter, and if there is no estimates of reserves may change plant and equipment used in thereafter it is transferred to the alternative use possible. For the from period to period. Changes in the principal production units related class of property, plant and majority of assets used in mining reported reserves may affect the of the Company’s operations. equipment and depreciated over activities, the economic benefits Company’s financial results and In performing this review, the estimated useful lives. Interest from the asset are consumed in financial position in a number of Company gathered and evaluated incurred during construction is a pattern which is linked to the ways, including the following: data, including commissioning capitalized if the borrowing cost production level and accordingly, dates, designed capacities, is directly attributable to the assets used in mining activities • Asset carrying amounts may maintenance records and construction. Gains and losses on are primarily depreciated on a be affected due to changes in programs, and asset performance retirement or disposal of assets are units-of-production basis. A unit- estimated future cash flows. history, among other attributes. recognized in cost of sales. of-production is based on the In accordance with IAS 16, available estimate of proven and • Depreciation, depletion and Property, Plant and Equipment, Property, plant and equipment probable reserves. amortization charged in the the Company considered this acquired by way of finance leases consolidated statements of information at the level of is stated at an amount equal to Capitalization of pre-production operations may change where components significant in relation the lower of the fair value and the expenditures ceases when the such charges are determined by to the total cost of the item of present value of the minimum mining property is capable of the units of production basis, or plant and equipment. Other lease payments at the inception commercial production as it is where the useful economic lives factors the Company considered of the lease. Each lease payment intended by management. General of assets change. in its determination of useful is allocated between the finance administration costs that are not lives included the expected charges and a reduction of the directly attributable to a specific • Overburden removal costs use of the assets, technical or lease liability. The interest element exploration area are charged to recognized in the consolidated commercial obsolescence, and of the finance cost is charged to the consolidated statements of statements of financial position operational factors that led to the consolidated statements of operations. or charged to the consolidated improvements in monitoring and operations over the lease period statements of operations may Consolidated financial statements 101

change due to changes in • If the pits extract ore from for iron ore and coal resources, Cash flows associated with stripping ratios or the units of separate and distinct ore bodies, the determination of technical exploration and evaluation production basis of depreciation. rather than from a single ore feasibility and the assessment expenditure are classified as body. of commercial viability of an operating activities when they • Decommissioning, site identified resource. Exploration are related to expenses or as an restoration and environmental The relative importance of each and evaluation activities include: investing activity when they are provisions may change where factor is considered by local related to a capitalized asset in the changes in estimated reserves management to determine • researching and analyzing consolidated statements of cash affect expectations about the whether, on balance, the stripping historical exploration data; flows. timing or cost of these activities. costs should be attributed to the individual pit or to the combined • conducting topographical, Development expenditure Stripping and overburden removal output from the several pits. geological, geochemical and costs geophysical studies; Development is the establishment Developmental stripping costs of access to the mineral reserve In open pit and underground contribute to the future economic • carrying out exploratory and other preparations for mining operations, it is necessary benefits of mining operations drilling, trenching and sampling commercial production. to remove overburden and other when the production begins and activities; Development activities often waste materials to access the so are capitalized as tangible continue during production and deposit from which minerals assets (construction in progress), • drilling, trenching and sampling include: can be extracted. This process is whereas production stripping is activities to determine the referred to as stripping. Stripping a part of on-going activities and quantity and grade of the • sinking shafts and underground costs can be incurred before the commences when the production deposit; drifts (often called mine mining production commences stage of mining operations begins development); (“developmental stripping”) or and continues throughout the life • examining and testing extraction during the production stage of a mine. methods and metallurgical or • making permanent excavations; (“production stripping”). treatment processes; and, Capitalization of developmental • developing passageways and A mine can operate several open stripping costs ends when the • detailed economic feasibility rooms or galleries; pits that are regarded as separate commercial production of the evaluations to determine operations for the purpose of mine minerals commences. whether development of the • building roads and tunnels; and planning and production. In this reserves is commercially justified case, stripping costs are accounted Production stripping costs are and to plan methods for mine • advance removal of overburden for separately, by re¬ference to the incurred to extract the ore in the development. and waste rock. ore extracted from each separate form of inventories and / or to pit. If, however, the pits are highly improve access to an additional Exploration and evaluation Development (or construction) integrated for the purpose of component of an ore body expenditure is charged to the also includes the installation mine planning and production, or deeper levels of material. consolidated statements of of infrastructure (e.g., roads, stripping costs are aggregated too. Production stripping costs are operations as incurred except utilities and housing), machinery, accounted for as inventories in the following circumstances, equipment and facilities. The determination of whether to the extent the benefit from in which case the expenditure multiple pit mines are considered production stripping activity is is capitalized: (i) the exploration When proven reserves are separate or integrated operations realized in the form of inventories. and evaluation activity is within determined and development is depends on each mine’s specific Production stripping costs are an area of interest which was approved, expenditures capitalized circumstances. The following recognized as a non-current asset previously acquired in a business as exploration and evaluation factors would point towards the (“stripping activity assets”) to the combination and measured at are reclassified as construction stripping costs for the individual extent it is probable that future fair value on acquisition; or (ii) in progress and are reported as pits being accounted for economic benefit in terms of when management has a high a component of property, plant separately: improved access to ore will flow to degree of confidence in the and equipment. All subsequent the Company, the components of project’s economic viability and it development expenditures • If mining of the second and the ore body for which access has is probable that future economic are capitalized and classified subsequent pits is conducted been improved can be identified benefits will flow to the Company. as construction in progress. On consecutively with that of the and the costs relating to the completion of development, all first pit, rather than concurrently. stripping activity associated with Capitalized exploration and assets included in construction that component can be measured evaluation expenditures in progress are individually • If separate investment decisions reliably. are generally recorded as a reclassified to the appropriate are made to develop each pit, component of property, plant and category of property, plant and rather than a single investment All stripping costs assets (either equipment at cost less impairment equipment and depreciated decision being made at the stripping activity assets or charges, unless their nature accordingly. outset. capitalized developmental requires them to be recorded as stripping costs) are presented an intangible asset. As the asset • If the pits are operated as within a specific “mining assets” is not available for use, it is not separate units in terms of mine class of property, plant and depreciated and all capitalized planning and the sequencing equipment and then depreciated exploration and evaluation of overburden and ore mining, on a units-of-production basis. expenditure is monitored for rather than as an integrated unit. indications of impairment. To the Exploration and evaluation extent that capitalized expenditure • If expenditures for additional expenditure is not expected to be recovered infrastructure to support the it is recognized as an expense in second and subsequent pits are Exploration and evaluation the consolidated statements of relatively large. activities involve the search operations. 102 Consolidated financial statements

Property, plant and equipment are summarized as follows:

Land, buildings and Machinery Construction Mining Improvements and equipment in progress Assets Total Cost At December 31, 2013 16,344 61,565 4,163 4,159 86,231 Additions 21 632 2,958 59 3,670 Foreign exchange differences (2,227) (7,919) (354) (114) (10,614) Disposals (186) (1,504) (41) (32) (1,763) Divestments (note 2.3) (209) (767) (67) (53) (1,096) Transfers to assets held for sale (note 2.3) (167) (76) (1) - (244) Other movements * 254 1,927 (2,112) 68 137 At December 31, 2014 13,830 53,858 4,546 4,087 76,321 Additions 24 293 2,446 18 2,781 Foreign exchange differences (2,196) (11,161) (810) (594) (14,761) Disposals (104) (980) (6) (4) (1,094) Transfers to assets held for sale (note 2.3) (66) (518) (11) - (595) Other movements * 244 2,342 (2,655) 152 83 At December 31, 2015 11,732 43,834 3,510 3,659 62,735

Accumulated depreciation and impairment At December 31, 2013 4,955 28,485 175 1,384 34,999 Depreciation charge for the year 428 3,127 - 227 3,782 Impairment (note 5.3) 44 202 7 11 264 Disposals (129) (1,395) (6) (27) (1,557) Foreign exchange differences (1,171) (5,428) (22) (61) (6,682) Divestments (note 2.3) (128) (625) (1) (50) (804) Transfers to assets held for sale (note 2.3) (81) (60) - - (141) Other movements * 39 (85) (11) 52 (5) At December 31, 2014 3,957 24,221 142 1,536 29,856 Depreciation charge for the year 367 2,475 - 235 3,077 Impairment (note 5.3) 179 1,530 940 1,104 3,753 Disposals (83) (899) (4) (4) (990) Foreign exchange differences (1,039) (6,671) (19) (379) (8,108) Transfers to assets held for sale (note 2.3) (40) (499) (1) - (540) Other movements * 3 43 2 (61) (13) At December 31, 2015 3,334 20,200 1,060 2,431 27,035

Carrying amount At December 31, 2014 9,873 29,637 4,404 2,551 46,465 At December 31, 2015 8,388 23,634 2,450 1,228 35,700

* Other movements predominantly represent transfers from construction in progress to other categories.

The carrying amount of respectively. • The fulfillment of the measured at an amount equal to temporarily idle property, plant arrangement is dependent on the lower of its fair value and the and equipment at December 31, Such assets are carried at their the use of a specific asset and present value of the minimum 2015 and 2014 was, respectively, recoverable amount. lease payments. Subsequent to 368 and 230 (including 253 and • The arrangement conveys a right initial recognition, the asset is 0 in Brazil, 80 and 96 in NAFTA Lease arrangements to use the asset. accounted for in accordance with and 35 and 134 in the Europe the accounting policy applicable segments). The Company may enter into Assets under lease arrangements to that asset while the minimum arrangements that do not take which transfer substantially lease payments are apportioned The carrying amount of property, the legal form of a lease, but may all of the risks and rewards of between financing costs and plant and equipment retired from contain a lease. This will be the ownership to the Company are reduction of the lease liability. active use and not classified as case if the following two criteria classified as finance leases. On held for sale was 74 and 87 at are met: initial recognition, the leased Assets held under lease December 31, 2015 and 2014 asset and its related liability are arrangements that are not finance Consolidated financial statements 103

leases are classified as operating leases and are not recognized in the consolidated statements of financial position. Payments made under operating leases are recognized in cost of sales in the consolidated statements of operations on a straight-line basis over the lease terms. The carrying amount of capitalized leases was 552 and 688 as of December 31, 2015 and 2014, respectively. The 552 and 688 include 513 and 607 related to machinery and equipment and 39 and 81 to buildings respectively. The total future minimum lease payments related to finance leases are as follows:

2016 141 2017-2020 516 2021 and beyond 313 Total 970 The present value of the future minimum lease payments was 602 and 705 for the year ended December 31, 2015 and 2014, respectively. The 2015 calculation is based on an average discounting rate of 13.1% (12.9% in 2014) considering maturities from 1 to 16 years (same in 2014) including the renewal option when intended to be exercised.

The Company has pledged 304 and 273 of property, plant and equipment, inventories and other security interests and collateral as of December 31, 2015 and 2014, respectively, to secure banking facilities granted to the Company.

5.3 Impairment of intangible assets, including goodwill, and tangible assets Impairment charges recognized for the years ended December 31, 2015, 2014 and 2013 were as follows: Type of asset 2015 2014 2013 Goodwill 854 - 4 Intangible assets 157 - 162 Tangible assets 3,753 264 278 Total 4,764 264 444

Impairment test of goodwill value in use of each GCGU is Regarding mining operations, the drilling and sampling of areas of determined by estimating future key assumptions for the value in mineralization that are contiguous Goodwill is tested for impairment cash flows. With respect to steel use calculations are primarily the with existing reserves. Typically, annually, as of October 31 operations, the key assumptions discount rates, capital expenditure, the additional evaluation to achieve or whenever changes in for the value in use calculations expected changes to average reserve status for such material circumstances indicate that the are primarily the discount rates, selling prices, shipments and direct has not yet been done because this carrying amount may not be growth rates, expected changes to costs during the period. The value would involve incurring evaluation recoverable, at the level of the average selling prices, shipments in use of each CGU was determined costs earlier than is required for the groups of cash-generating units and direct costs during the period. by estimating cash flows over the efficient planning and operation of (“GCGU”) which correspond to the Assumptions for average selling current life-of-the-mine plan or the mine. operating segments representing prices and shipments are based long term production plan. Cash the lowest level at which goodwill is on historical experience and flow forecasts include material Management estimates discount monitored for internal management expectations of future changes in from proven and probable ore rates using pre-tax rates that purposes. Whenever the cash- the market. Cash flow forecasts reserves. The cash flow forecasts reflect current market rates for generating units comprising the are derived from the most recent may also include net cash flows investments of similar risk. The operating segments are tested for financial plans approved by expected to be realized from rate for each GCGU was estimated impairment at the same time as management for the next five extraction, processing and sale of from the weighted average cost of goodwill, the cash-generating units years. Beyond the specifically material that does not currently capital of producers, which operate are tested first and any impairment forecasted period, the Company qualify for inclusion in proved or a portfolio of assets similar to of the assets is recorded prior to extrapolates cash flows for the probable ore reserves. Such non- those of the Company’s assets. the testing of goodwill. remaining years based on an reserve material is only included estimated growth rate of 2%. This where there is a high degree The recoverable amounts of the rate does not exceed the average of confidence in its economic GCGUs are mainly determined long-term growth rate for the extraction. This expectation is based on their value in use. The relevant markets. usually based on preliminary

NAFTA Brazil Europe ACIS Mining GCGU weighted average pre-tax discount rate used in 2015 (in %) 10.5 15.4 10.3 16.8 13.3

NAFTA Brazil Europe ACIS Mining GCGU weighted average pre-tax discount rate used in 2014 (in %) 10.7 13.8 10.7 14.1 14.3 104 Consolidated financial statements

Once recognized, impairment rate). The Company believes that exchange rates. Discount rates in product and geographical losses for goodwill are not reasonably possible changes in may be affected by changes mix and expected reduction in reversed. key assumptions could cause an in countries’ specific risks, in production costs associated with impairment loss to be recognized in particular in Ukraine due to the variable and fixed cost reduction The results of the Company’s respect of ACIS. current political and economic plans identified by the Company, goodwill impairment tests as of situation. The ACIS value in optimized operational footprint and October 31, 2015 resulted in a full ACIS produces a combination of use model anticipates a limited maximization of steel production. impairment of the Mining segment flat and long products. Its facilities recovery of sales volumes in goodwill for 854 in connection are located in Asia, Africa and 2016 compared to 2015 (12.5 The following changes in key with a downward revision of cash Commonwealth of Independent million tonnes for the year ended assumptions in projected earnings flow projections resulting from the States. ACIS is significantly self- December 31, 2015) with in every year of initial five-year expected persistence of a lower sufficient in major raw materials. completion of reline and continuous period and perpetuity, at the GCGU raw material price outlook. The The Company believes that sales improvements thereafter, but level, assuming unchanged values total value in use calculated for all volumes, prices, discount rates below the sales volume achieved for the other assumptions, would GCGUs decreased overall in 2015 and foreign exchange rates are the in 2007 (16.4 million tonnes for cause the recoverable amount to as compared to 2014. key assumptions most sensitive the year ended December 31, equal respective carrying value as to change. It is also exposed to 2007). Average selling prices of the impairment test date (i.e.: In validating the value in use export markets and international in the model are expected to October 31, 2015). determined for the GCGUs, the steel prices which are volatile, decrease in 2016 due to lower Company performed a sensitivity reflecting the cyclical nature of the raw material prices and increase analysis of key assumptions global steel industry, developments subsequently following slight used in the discounted cash- in particular steel consuming recovery in raw materials while the flow model (such as discount industries and macroeconomic margins in the model are expected rates, average selling prices, trends of emerging markets, such to recover partially over the five shipments and terminal growth as economic growth and foreign year period due to improvement

ACIS Excess of recoverable amount over carrying amount 1,712 Increase in pre-tax discount rate (change in basis points) 333 Decrease in average selling price (change in %) 3.81 Decrease in shipments (change in %) 10.08 Decrease in terminal growth rate used in for the years beyond the five year plan (change in basis points) 471

Impairment test of intangible amounts of its intangible assets The cash-generating unit is the the two facilities are combined for assets (excluding goodwill) and tangible smallest identifiable group of assets purposes of testing for impairment. assets to determine whether there corresponding to operating units As of December 31, 2015, the In 2015, in connection with is any indication that the carrying that generate cash inflows. If the Company determined it has 61 management’s annual test for amount of those assets may not recoverable amount of an asset (or cash-generating units. impairment of goodwill as of be recoverable through continuing cash-generating unit) is estimated October 31, 2015, intangible use. If any such indication exists, to be less than its carrying amount, An impairment loss, related to assets were also tested for the recoverable amount of the an impairment loss is recognized. intangible assets other than impairment at that date. asset (or cash generating unit) is An impairment loss is recognized goodwill and tangible assets Accordingly, ArcelorMittal reviewed in order to determine as an expense immediately as recognized in prior years is recognized impairment charges the amount of the impairment, if part of operating income in the reversed if, and only if, there has of 94 and 63 with respect to any. The recoverable amount is the consolidated statements of been a change in the estimates mining permits and concessions higher of its net selling price (fair operations. used to determine the asset’s in ArcelorMittal Princeton in the value reduced by selling costs) and recoverable amount since the last United States and ArcelorMittal its value in use. In the case of permanently idled impairment loss was recognized. Liberia (Mining), respectively. assets, the impairment is measured However, the increased carrying In estimating its value in use, at the individual asset level. amount of an asset due to a In 2013, ArcelorMittal recognized the estimated future cash flows Otherwise, the Company’s assets reversal of an impairment loss impairment charges of 101 and 61 are discounted to their present are measured for impairment at will not exceed the carrying for the costs associated with the value using a pre-tax discount the cash-generating unit level. amount that would have been discontinued iron ore projects in rate that reflects current market In certain instances, the cash- determined (net of amortization or Senegal and Mauritania (Mining), assessments of the time value of generating unit is an integrated depreciation) had no impairment respectively. money and the risks specific to the manufacturing facility which may loss been recognized for the asset (or cash-generating unit). For also be an operating subsidiary. asset in prior years. A reversal of Impairment test of property, plant an asset that does not generate Further, a manufacturing facility an impairment loss is recognized and equipment cash inflows largely independent may be operated in concert with immediately as part of operating of those from other assets, the another facility with neither facility income in the consolidated At each reporting date, recoverable amount is determined generating cash flows that are statements of operations. ArcelorMittal reviews the carrying for the cash-generating unit largely independent from the cash to which the asset belongs. flows of the other. In this instance, Consolidated financial statements 105

Impairment charges relating to (NAFTA) and 27 related to the in Trinidad and Tobago (Brazil their carrying amount due to a property, plant and equipment Vereeniging meltshop closure in segment), Indiana Harbor East and downward revision of cash flow were as follows for the years ended South Africa (ACIS). Additionally, West facilities in the United States projections primarily resulting December 31, 2015, 2014 and the Company recognized (NAFTA) following deployment from the expected persistence of 2013: impairment charges of 231 and of asset optimization programs a lower coking coal and iron ore 18 in connection with the intended and other assets in Spain (Europe price outlook. The Company also 2015 sale of the Long Carbon facilities segment), respectively. concluded that the value in use of In 2015, the Company recognized (ArcelorMittal Laplace, Steelton property, plant and equipment of a total impairment charge of and Vinton) in the United States In connection with management’s the Saldanha plant in ArcelorMittal property, plant and equipment (NAFTA) and the intended sale of annual test for impairment of South Africa was lower than amounting to 3,753. certain activities of ArcelorMittal goodwill as of October 31, 2015, its carrying amount following Downstream Solutions (Europe property, plant and equipment a revised competitive outlook. This charge included 335 relating segment), respectively. was also tested for impairment at Accordingly, the Company to the idling for an indefinite that date. Management concluded recognized a total impairment time of the Sestao facility in In addition, the Company recorded that the recoverable amount of charge of 2,617 consisting of the Spain (Europe segment), 19 in impairment charges of 176, 276 certain of the Company’s property, following: connection with the closure of and 45 relating to the ArcelorMittal plant and equipment in the the Georgetown facility in the US Point Lisas facility currently idled Mining segment was lower than

2015 2014 Carrying Value as of Cash-Generating Unit Country Operating Segment Impairment Recorded Pre-Tax Discount Rate Pre-Tax Discount Rate December 31, 2015 ArcelorMittal Liberia Liberia Mining 1,363 14.71% 17.80% 25 ArcelorMittal Princeton United States Mining 590 8.50% 11.00% 4 Las Truchas Mines Mexico Mining 220 10.96% 12.26% - ArcelorMittal Serra Azul Brazi Mining 176 9.90% 14.56% - Volcan mine Mexico Mining 10 10.25% 9.42% - Saldanha facility South Africa ACIS 258 14.18% 11.90% 64

2014 shop and rolling facilities of Indiana In connection with management’s segment) was lower than its In 2014, the Company recognized Harbor Long carbon operations annual test for impairment of carrying amount due to the end an impairment charge of property, in the United States (NAFTA). goodwill as of October 31, 2014, of life of the mine. Accordingly, plant and equipment amounting The Company recorded also an property, plant and equipment an impairment charge of 63 was to 264. impairment charge of 57 with was also tested for impairment at recognized: respect to the closure of mill C in that date. Management concluded This charge included 114 primarily Rodange, Luxembourg (Europe that the value in use of the Volcan relating to the idling of the steel segment). iron ore mine in Mexico (Mining

2014 2013 Carrying Value as of Cash-Generating Unit Operating Segment Impairment Recorded Pre-Tax Discount Rate Pre-Tax Discount Rate December 31, 2014

Volcan mine Mining 63 9.42% 23.77% 19

2013 sales, long term idling or closure (Europe segment) following the 5.4 Biological assets In connection with management’s of facilities. This charge included restart of the hot dip galvanizing annual test for impairment of 181 related to the finance line HDG5. ArcelorMittal also Biological assets are part of the goodwill as of October 31, 2013, leasing of Thabazimbi mine in recognized an impairment charge Brazil operating segment and property, plant and equipment ArcelorMittal South Africa (ACIS) of 24 relating to the closure of the consist of eucalyptus forests was also tested for impairment following the transfer of the organic coating and tin plate lines located in the Brazilian state of at that date. As of December 31, future operating and financial at the Florange site of ArcelorMittal exclusively from 2013, management concluded risks of the asset to Kumba as Atlantique et Lorraine in France renewable plantations and that the carrying amount of a result of the iron ore supply (Europe segment). Additionally, intended for the production property, plant and equipment did agreement signed with Sishen on in connection with the agreed of charcoal to be utilized as not exceed the value in use and November 5, 2013. The Company sale of certain steel cord assets in fuel and a source of carbon in therefore, no impairment loss was recorded an impairment loss of the US, Europe and Asia (Europe the direct reduction process of recognized on that basis. 55 in connection with the long segment) to the joint venture production in some of term idling of the ArcelorMittal partner Kiswire Ltd., ArcelorMittal the Company’s blast furnaces The impairment charge of Tallinn galvanizing line in Estonia recorded an impairment charge of in Brazil. Charcoal is, in such property, plant and equipment of (Europe segment) and reversed 41 with respect to the subsidiaries instances, a substitute for coke. 278 recognized in 2013 related to an impairment loss of 52 at the included in this transaction (see As a result of improvements discontinued projects, intended Liège site of ArcelorMittal Belgium note 2.6). in forest management 106 Consolidated financial statements

techniques, including the genetic Biological assets are measured at the cubic volume of wood, The reconciliation of changes in improvement of trees, the cycle their fair value, net of estimated segregated by plantation year, the carrying value of biological of harvesting through replanting costs to sell at the time of harvest. and the equivalent sales value of assets between the beginning and occurs over approximately six to The fair value is determined based standing trees. The average sales end of the year is as follows: seven years. on the discounted cash flow price was estimated based on method, taking into consideration domestic market prices.

Year ended December 31, 2015 Year ended December 31, 2014 At the beginning of the year 128 132 Additions 12 13 Disposals/Write-off - (1) Harvests (6) (11) Change in fair value* (17) 11 Effects of foreign currency translation (37) (16) At the end of the year 80 128 * Recognized in cost of sales in the consolidated statements of operations.

In determining the fair value of The projected cash flows are The average net sales price of as property, plant and equipment biological assets, a discounted consistent with area’s growing 39.00 Brazilian real (“BRL”) per m3 and land was considered in the cash flow model was used, with a cycle. The volume of eucalyptus (BRL 42.77/m3 as of December estimation based on average rates harvest cycle of six to seven years. production to be harvested was 31, 2014) was projected based on of return for those assets. estimated considering the average the estimated price for eucalyptus Due to the level of unobservable productivity in cubic meters of in the local market, through a The valuation model considers the inputs used in the valuation wood per hectare from each market study and research of net cash flows after income tax and model, the Company classified plantation at the time of harvest. actual transactions, adjusted to the discount rate used (14.98% in such inputs as Level 3. The average productivity varies reflect the price of standing trees 2015 and 13.71% in 2014 and) is according to the genetic material, by region. post-tax. The actual planted area was climate and soil conditions and the The average estimated cost 63,211 and 60,806 hectares forestry management programs. considers expenses for chemical The following table illustrates (“ha”) at the end of 2015 and This projected volume is based control of growing, pest control, the sensitivity to a 10% variation 2014 respectively and none of on the average annual growth, composting, road maintenance, in each of the significant the Company’s biological assets which at the end of 2015 and land rental, inputs and labor unobservable inputs used to are pledged as collateral as of 2014 was equivalent to 27.31/m3/ services. Tax effects are based measure the fair value of the December 31, 2015. ha/year and 27.40 m3/ha/year, on current applicable rates biological assets on December 31, respectively. (34% in 2015 and 2014) and the 2015: contribution of other assets, such

Impacts in fair value resulting from Impacts in fair value resulting from Significant unobservable inputs 10% increase 10% decrease Average annual growth 28 (28) Average net sales price 28 (28) Discount rate (7) 7

Note 6: Financing and financial instruments

6.1 Financial assets and liabilities

Financial assets and liabilities mainly comprise: • gross debt (see note 6.1.2) • cash, cash equivalents and restricted cash (see note 6.1.3) • net debt (see note 6.1.4) • derivative financial instruments (see note 6.1.5) • other non-derivative financial assets and liabilities (see note 6.1.6)

6.1.1 Fair values versus carrying amounts

The estimated fair values of certain financial instruments have been determined using available market information or other valuation methodologies that require judgment in interpreting market data and developing estimates. Consolidated financial statements 107

The following table summarizes assets and liabilities based on their categories at December 31, 2015.

Carrying amount in the consolidated statements of financial Non-financial assets Loan and Liabilities at Fair value recognized Available-for-sale position and liabilities receivables amortized cost in profit or loss assets Derivatives ASSETS Current assets: Cash and cash equivalents 4,002 - 4,002 - - - - Restricted cash 100 - 100 - - - - Trade accounts receivable and other 2,679 - 2,679 - - - - Inventories 13,424 13,424 - - - - - Prepaid expenses and other current assets 1,859 1,202 529 - - - 128 Assets held for sale 262 262 - - - - - Total current assets 22,326 14,888 7,310 - - - 128

Non-current assets: Goodwill and intangible assets 5,592 5,592 - - - - - Biological assets 80 - - - 80 - - Property, plant and equipment 35,700 35,700 - - - - - Investments in associates and joint ventures 4,911 4,911 - - - - - Other investments 692 - - - - 692 - Deferred tax assets 6,625 6,625 - - - - - Other assets 920 268 562 - - - 90 Total non-current assets 54,520 53,096 562 - 80 692 90 Total assets 76,846 67,984 7,872 - 80 692 218

LIABILITIES AND EQUITY Current liabilities: Short-term debt and current portion of long-term debt 2,308 - - 2,308 - - - Trade accounts payable and other 8,977 - - 8,977 - - - Short-term provisions 770 529 - 241 - - - Accrued expenses and other liabilities 5,633 1,005 - 4,495 - - 133 Income tax liabilities 133 133 - - - - - Liabilities held for sale 220 220 - - - - - Total current liabilities 18,041 1,887 - 16,021 - - 133

Non-current liabilities: Long-term debt, net of current portion 17,478 - - 17,478 - - - Deferred tax liabilities 2,496 2,496 - - - - - Deferred employee benefits 9,216 9,216 - - - - - Long-term provisions 1,434 1,421 - 13 - - - Other long-term obligations 611 185 - 355 - - 71 Total non-current liabilities 31,235 13,318 - 17,846 - - 71

Equity: Equity attributable to the equity holders of the parent 25,272 25,272 - - - - - Non-controlling interests 2,298 2,298 - - - - - Total equity 27,570 27,570 - - - - - Total liabilities and equity 76,846 42,775 - 33,867 - - 204 108 Consolidated financial statements

The following table summarizes assets and liabilities based on their categories at December 31, 2014.

Carrying amount in the consolidated statements of financial Non-financial assets Loan and Liabilities at Fair value recognized Available-for-sale position and liabilities receivables amortized cost in profit or loss assets Derivatives ASSETS Current assets: Cash and cash equivalents 3,893 - 3,893 - - - - Restricted cash 123 - 123 - - - - Trade accounts receivable and other 3,696 - 3,696 - - - - Inventories 17,304 17,304 - - - - - Prepaid expenses and other current assets 2,627 1,560 875 - - - 192 Assets held for sale 414 414 - - - - - Total current assets 28,057 19,278 8,587 - - - 192

Non-current assets: Goodwill and intangible assets 8,104 8,104 - - - - - Biological assets 128 - - - 128 - - Property, plant and equipment 46,465 46,465 - - - - - Investments in associates and joint ventures 5,833 5,833 - - - - - Other investments 1,202 - - - - 1,202 - Deferred tax assets 7,962 7,962 - - - - - Other assets 1,428 424 888 - - - 116 Total non-current assets 71,122 68,788 888 - 128 1,202 116 Total assets 99,179 88,066 9,475 - 128 1,202 308

LIABILITIES AND EQUITY Current liabilities: Short-term debt and current portion of long-term debt 2,522 - - 2,522 - - - Trade accounts payable and other 11,450 - - 11,450 - - - Short-term provisions 1,024 944 - 80 - - - Accrued expenses and other liabilities 5,740 1,056 - 4,550 - - 134 Income tax liabilities 230 230 - - - - - Liabilities held for sale 157 157 - - - - - Total current liabilities 21,123 2,387 - 18,602 - - 134

Non-current liabilities: Long-term debt, net of current portion 17,275 - - 17,275 - - - Deferred tax liabilities 3,004 3,004 - - - - - Deferred employee benefits 10,074 10,074 - - - - - Long-term provisions 1,587 1,567 - 20 - - - Other long-term obligations 956 281 - 566 - - - Total non-current liabilities 32,896 14,926 - 17,861 - - 109

Equity: Equity attributable to the equity holders of the parent 42,086 42,086 - - - - - Non-controlling interests 3,074 3,074 - - - - - Total equity 45,160 45,160 - - - - - Total liabilities and equity 99,179 62,473 - 36,463 - - 243 Consolidated financial statements 109

The Company classifies the bases The levels are as follows: observable for the asset or liability, The following tables summarize used to measure certain assets and either directly (i.e.: as prices) or the bases used to measure certain liabilities at their fair value. Assets Level 1: Quoted prices in active indirectly (i.e.: derived from prices); assets and liabilities at their fair and liabilities carried or measured markets for identical assets or value. at fair value have been classified liabilities that the entity can access Level 3: Inputs for the assets or into three levels based upon a fair at the measurement date; liabilities that are not based on value hierarchy that reflects the observable market data and require significance of the inputs used in Level 2: Significant inputs other management assumptions or making the measurements. than within Level 1 that are inputs from unobservable markets.

As of December 31, 2015 Level 1 Level 2 Level 3 Total Assets at fair value: Available-for-sale financial assets 646 - - 646 Derivative financial current assets - 128 - 128 Derivative financial non-current assets - 86 4 90 Total assets at fair value 646 214 4 864

Liabilities at fair value: Derivative financial current liabilities - 133 - 133 Derivative financial non-current liabilities - 71 - 71 Total liabilities at fair value - 204 - 204

As of December 31, 2014 Level 1 Level 2 Level 3 Total Assets at fair value: Available-for-sale financial assets 1,022 - - 1,022 Derivative financial current assets - 192 - 192 Derivative financial non-current assets - 4 112 116 Total assets at fair value 1,022 196 112 1,330

Liabilities at fair value: Derivative financial current liabilities - 134 - 134 Derivative financial non-current liabilities - 109 - 109 Total liabilities at fair value - 243 - 243

Available-for-sale financial assets in Gerdau as available-for-sale Derivative financial current assets procedures. In particular, such classified as Level 1 refer to listed following the share swap on July classified as Level 3 refer to the call procedures address the accuracy securities quoted in active markets. 14, 2015 (see note 2.5). option on the 1,000 mandatory and reliability of input data, the A quoted market price in an active convertible bonds (see note 10.2). accuracy of the valuation model market provides the most reliable Derivative financial assets and As a result of the repayment at and the knowledge of the staff evidence of fair value and is used liabilities classified as Level 2 maturity of the €1.25 billion performing the valuations. without adjustment to measure refer to instruments to hedge Convertible Bonds on April 1, fair value whenever available, with fluctuations in interest rates, 2014, the conversion option in the ArcelorMittal establishes the fair limited exceptions. The total fair foreign exchange rates, raw €1.25 billion Convertible Bonds valuation of the call option on value is either the price of the most materials (base metal), freight, and the euro-denominated call the 1,000 mandatory convertible recent trade at the time of the energy and emission rights. The options on treasury shares are bonds through the use of binomial market close or the official close total fair value is based on the price extinguished. The fair valuation of valuation models. Binomial price as defined by the exchange a dealer would pay or receive for Level 3 derivative instruments is valuation models use an iterative on which the asset is most actively the security or similar securities, established at each reporting date procedure to price options, traded on the last trading day adjusted for any terms specific to in relation to which an analysis is allowing for the specification of of the period, multiplied by the that asset or liability. Market inputs performed in respect of changes in nodes, or points in time, during the number of units held without are obtained from well-established the fair value measurement since time span between the valuation consideration of transaction costs. and recognized vendors of market the last period. ArcelorMittal’s date and the option’s expiration The decrease in available-for-sale data and the fair value is calculated valuation policies for Level 3 date. In contrast to the Black- financial assets is related to the using standard industry models derivatives are an integral part of Scholes model, which provides a decrease in the fair value of the based on significant observable its internal control procedures and numerical result based on inputs, available-for-sale investments market inputs such as foreign have been reviewed and approved the binomial model allows for the (note 2.5), partly offset by the exchange rates, commodity prices, according to the Company’s calculation of the asset and the reclassification of the investment swap rates and interest rates. principles for establishing such option for multiple periods along 110 Consolidated financial statements

with the range of possible results Unobservable inputs are used to The following table summarizes ended December 31, 2015 and for each period. measure fair value to the extent the reconciliation of the fair value 2014, respectively: that relevant observable inputs of the conversion option classified Observable input data used are not available. Specifically the as Level 3 with respect to the €1.25 in the valuations include zero Company computes unobservable billion convertible bonds, the coupon yield curves, stock volatility data based mainly on the euro-denominated call option on market prices, European Central movement of stock market prices the Company’s own shares, the call Bank foreign exchange fixing observable in the active market option on the 1,000 mandatory rates and Libor interest rates. over 90 working days. convertible bonds for the years

Call option on 1,000 mandatory convertible bonds 1 Total Balance as of December 31, 2013 - - Change in fair value 112 112 Balance as of December 31, 2014 112 112 Change in fair value (108) (108) Balance as of December 31, 2015 4 4

1 Please refer to note 10.2 for details on the mandatory convertible bonds. The call option on the 1,000 mandatory convertible bonds is classified into Level 3. The fair value of the call options was determined through a binomial model based on the estimated values of the underlying equity spot price of $124 and volatility of 10.06%. 6.1.2 Gross debt

Debt and liabilities, other than provisions, are stated at amortized cost. However, loans that are hedged under a fair value hedge are remeasured for the changes in the fair value that are attributable to the risk that is being hedged.

6.1.2.1 Short-term debt

Short-term debt, including the current portion of long-term debt, consisted of the following:

December 31, 2015 December 31, 2014 Short-term bank loans and other credit facilities including commercial paper * 437 1,249 Current portion of long-term debt 1,806 1,200 Lease obligations 65 73 Total 2,308 2,522 * The weighted average interest rate on short term borrowings outstanding were 4.3% and 2.7% as of December 31, 2015 and 2014, respectively.

During the first half of 2014, On June 10, 2014, ArcelorMittal 2017. On February 13, 2015, the Commercial paper ArcelorMittal entered into certain entered into an agreement Company elected to make an early short-term committed bilateral for financing with a financial repayment of such financing. The Company has a commercial credit facilities. The facilities were institution for 1 billion. The financial paper program enabling extended during 2015. As of institution had the right to request borrowings of up to €1 billion. December 31, 2015, the facilities, early repayment once per year As of December 31, 2015, the totaling approximately 0.8 billion, beginning in February 2015 until outstanding amount was 71. remain fully available. the final maturity on April 20, Consolidated financial statements 111

6.1.2.2 Long-term debt

Long-term debt is comprised of the following:

Year of maturity Type of Interest Interest rate1 Decermber 31, 2015 Decermber 31, 2014 Corporate 6 billion Revolving Credit Facility - 2.5 billion tranche 2018 Floating - - 6 billion Revolving Credit Facility - 3.5 billion tranche 2020 Floating - - 1.0 billion Unsecured Bonds3 2015 Fixed 4.50% - 998 500 Unsecured Notes4 2016 Fixed 4.50% - 499 €1.0 billion Unsecured Bonds 2016 Fixed 10.63% 1,088 1,210 1.4 billion Unsecured Notes 2017 Fixed 5.50% 1,398 1,396 €1.0 billion Unsecured Bonds 2017 Fixed 5.88% 1,085 1,208 €500 million Unsecured Notes 2018 Fixed 5.75% 543 604 €400 million Unsecured Notes 2018 Floating 1.98% 434 - 1.5 billion Unsecured Notes 2018 Fixed 6.13% 1,500 1,500 €750 million Unsecured Notes 2019 Fixed 3.00% 812 903 1.5 billion Unsecured Notes 2019 Fixed 10.85% 1,480 1,475 500 Unsecured Notes 2020 Fixed 5.13% 497 - CHF 225 million Unsecured Notes 2020 Fixed 2.50% 225 - €600 million Unsecured Notes 2020 Fixed 2.88% 647 719 1.0 billion Unsecured Bonds 2020 Fixed 6.25% 989 988 1.5 billion Unsecured Notes 2021 Fixed 6.50% 1,490 1,489 €500 million Unsecured Notes 2021 Fixed 3.00% 540 - €750 million Unsecured Notes 2022 Fixed 3.13% 811 - 1.1 billion Unsecured Notes 2022 Fixed 7.25% 1,091 1,090 500 Unsecured Notes 2025 Fixed 6.13% 496 - 1.5 billion Unsecured Bonds 2039 Fixed 8.00% 1,465 1,465 1.0 billion Unsecured Notes 2041 Fixed 7.75% 984 983 Other loans 2021 Fixed 3.46% 52 70 EBRD loans 2015 Floating 1.23% - 8 300 Term Loan Facility 2016 Floating 2.93% 300 300 EIB loan 2016 Floating 1.37% 272 304 ICO loan 2017 Floating 2.37% 23 42 Other loans 2017-2035 Floating 0.01-3.00% 270 144 Total Corporate 18,492 17,395

Americas Other loans 2016-2026 Fixed/Floating 0.00%-10.55% 243 420 Total Americas 243 420

Europe, Asia & Africa Other loans 2016-2026 Fixed/Floating 0.00%-3.60% 13 28 Total Europe, Asia & Africa 13 28

Total 18,748 17,843 Less current portion of long-term debt (1,806) (1,200) Total long-term debt (excluding lease obligations) 16,942 16,643 Long-term lease obligations2 536 632 Total long-term debt, net of current portion 17,478 17,275 1 Rates applicable to balances outstanding at December 31, 2015. For debt that has matured during 2015, the interest rates refer to the rates at maturity date. 2 Net of current portion of 65 and 73 in 2015 and in 2014, respectively. 3 Early redeemed on July 2, 2015 4 Early redeemed on October 22, 2015 112 Consolidated financial statements

Corporate maturity for a total amount of 511, registration statement filed with The margin applicable to including premium and accrued the U.S. Securities and Exchange ArcelorMittal’s principal credit 6 billion Revolving Credit Facility interest. Commission. The proceeds of facilities ($6 billion revolving credit the issuance were used to repay facility and certain other credit On April 30, 2015, ArcelorMittal On July 3, 2015, ArcelorMittal existing indebtedness, in particular facilities) and the coupons on signed a 6 billion revolving credit completed the offering of CHF the early redemption of bonds certain of its outstanding bonds are facility which incorporates a first 225 million 2.5% Notes due maturing in August 2015. subject to adjustment in the event tranche of 2.5 billion maturing July 3, 2020, issued under the of a change in its long-term credit on April 30, 2018, and a second Company’s Euro Medium Term On April 9, 2015, ArcelorMittal ratings. In a context of low steel tranche of 3.5 billion maturing on Notes Programme. The proceeds of completed the offering of €400 prices and challenging industry April 30, 2020. The facility may the issuance were used to repay or million Floating Rate Notes due conditions, ArcelorMittal was be used for general corporate prepay existing indebtedness. April 9, 2018, and €500 million downgraded by Standard & Poor’s purposes and replaces the 2.4 3.0% Notes due April 9, 2021, on February 3, 2015 to BB with billion revolving credit facility On July 2, 2015, the Company issued under the Company’s Euro stable outlook, and by Moody’s agreement dated May 6, 2010, redeemed its 1 billion 3.75% Medium Term Notes Programme. on November 12, 2015, to Ba2 and the 3.6 billion revolving credit Unsecured Notes due August 5, The proceeds of the issuance with negative outlook. Fitch and facility agreement dated March 18, 2015, prior to their scheduled were used for general corporate Standard & Poor’s affirmed their 2011. As of December 31, 2015, maturity for a total amount of purposes. credit ratings while lowering their the 6 billion revolving credit facility 1,022, including premium and On January 14, 2015, outlooks to negative on November remains fully available. accrued interest. ArcelorMittal completed the 16, 2015, and December 18, offering of €750 million 3.125% 2015, respectively. These Bonds On June 1, 2015, ArcelorMittal Notes due January 14, 2022, downgrades triggered the interest completed the offering of 500 issued under the Company’s Euro rate “step-up” clauses in certain of On October 22, 2015, the 5.125% Notes due June 1, Medium Term Notes Programme. the Company’s outstanding bonds, Company redeemed its 500 3.75% 2020, and 500 6.125% Notes The proceeds of the issuance as described in the table below: Unsecured Notes due March 1, due June 1, 2025, issued under were used for general corporate 2016, prior to their scheduled the Company’s automatic shelf purposes.

Nominal value Date of issuance Repayment date Interest rate Issued at 1.0 billion Unsecured Bonds June 3, 2009 June 3, 2016 10.63% 99.38% €1.0 billion Unsecured Bonds1 November 18, 2010 November 17, 2017 5.88% 99.32% 1.4 billion Unsecured Notes February 28, 2012 February 25, 2017 5.50%2 99.69% €400 million Unsecured Notes1 April 9, 2015 April 9, 2018 Euribor 3M + 2.03% 100.00% 1.5 billion Unsecured Notes May 27, 2008 June 1, 2018 6.13% 99.57% €500 million Unsecured Notes1 March 29, 2012 March 29, 2018 5.75% 99.71% 1.5 billion Unsecured Notes May 20, 2009 June 1, 2019 10.85%2 97.52% €750 million Unsecured Notes 1 March 25, 2014 March 25, 2019 3.00% 99.65% 500 Unsecured Notes June 1, 2015 June 1, 2020 5.13% 100.00% CHF 225 million Unsecured Notes1 July 3, 2015 July 3, 2020 2.50% 100.00% €600 million Unsecured Notes1 July 4, 2014 July 6, 2020 2.88% 99.18% 1.0 billion Unsecured Bonds August 5, 2010 August 5, 2020 6.25%2 98.46% 1.5 billion Unsecured Notes March 7, 2011 March 1, 2021 6.50%2 99.36% €500 million Unsecured Notes1 April 9, 2015 April 9, 2021 3.00% 99.55% €750 million Unsecured Notes1 January 14, 2015 January 14, 2022 3.13% 99.73% 1.1 billion Unsecured Notes February 28, 2012 February 25, 2022 7.25% 2 98.28% 500 Unsecured Notes June 1, 2015 June 1, 2025 6.13% 100.00% 1.0 billion Unsecured Bonds October 1, 2009 October 15, 2039 8.00%2 95.20% 500 Unsecured Bonds August 5, 2010 October 15, 2039 8.00%2 104.84% 1.0 billion Unsecured Notes March 7, 2011 March 1, 2041 7.75% 2 99.18% 1 Issued under the Euro Medium Term Notes Programme, extended from €3 billion to €6 billion on March 20, 2015. 2 Change in interest rate following downgrades in 2015. Consolidated financial statements 113

European Bank for Reconstruction (“EIB”) Americas profits of the Company for a and Development (“EBRD”) Loans Loan Measurement Period, subject to Other loans certain adjustments as defined in The Company had entered into The Company entered into an the facilities) does not, at the end five separate agreements for agreement with the EIB for the The other loans relate mainly to of each “Measurement Period” on-lending with the European financing of activities for research, loans contracted by ArcelorMittal (each period of 12 months ending Bank for Reconstruction and engineering and technological Brasil with different counterparties. on the last day of a financial Development (“EBRD”). As of innovation related to process half-year or a financial year of the December 31 2014, the only improvements and new steel Other Company), exceed a certain ratio. agreement outstanding was product developments on July 15, ArcelorMittal’s principal credit ArcelorMittal Temirtau, entered 2010. The full amount of €250 Certain debt agreements of the facilities set this ratio to 4.25 to into on June 15, 2007. Following million was drawn on September Company or its subsidiaries contain 1, whereas one minor facility has a the repayment of the last 27, 2011. The final repayment certain restrictive covenants. ratio of 4.0 to 1. installment for ArcelorMittal date under this agreement Among other things, these Failure to comply with any Temirtau on January 12, 2015, the is September 27, 2016. The covenants limit encumbrances covenant would enable the lenders EBRD loan was fully repaid as of outstanding amount in total as of on the assets of ArcelorMittal to accelerate the Company’s December 31, 2015 as compared December 31, 2015 and 2014 and its subsidiaries, the ability of repayment obligations. Moreover, to 8 outstanding as of December was 272 and 304, respectively. ArcelorMittal’s subsidiaries to incur the Company’s debt facilities have 31, 2014. debt and the ability of ArcelorMittal provisions whereby certain events Instituto de Crédito Oficial (“ICO”) and its subsidiaries to dispose of relating to other borrowers within 300 Term Loan Facility Loan assets in certain circumstances. the Company’s subsidiaries could, The Company entered into an Certain of these agreements also under certain circumstances, lead On December 20, 2013, agreement with the ICO on April require compliance with a financial to acceleration of debt repayment ArcelorMittal entered into a term 9, 2010 for the financing of the covenant. under such credit facilities. loan facility in an aggregate amount Company investment plan in Any invocation of these cross- of 300, maturing on December 20, Spain for the period 2008-2011. The Company’s principal credit acceleration clauses could cause 2016. The facility may be used by The last installment under this facilities (6 billion revolving some or all of the other debt to the Group for general corporate agreement is due on April 7, 2017. credit facility and certain other accelerate. purposes. Amounts repaid under The outstanding amount in total as credit facilities) include the The Company was in compliance this agreement may not be re- of December 31, 2015 and 2014 following financial covenant: the with the financial covenants borrowed. As of December 31, was 23 and 42, respectively. Company must ensure that the contained in the agreements 2015, the term loan facility was ratio of “Consolidated Total Net related to all of its borrowings as of fully drawn. Other loans Borrowings” (consolidated total December 31, 2015. borrowings less consolidated The other loans relate to various cash and cash equivalents) to debt with banks and public “Consolidated EBITDA” (the institutions. consolidated net pre-taxation

As of December 31, 2015 the scheduled maturities of short-term debt, long-term debt and long-term lease obligations, including their current portion are as follows:

2016 2,308 2017 2,671 2018 2,599 2019 2,513 2020 2,450 Subsequent years 7,245 Total 19,786

The carrying amount and the estimated fair value of the Company’s short and long-term debt is:

December 31, 2015 December 31, 2014 Carrying Estimated Carrying Estimated Amount Fair Value Amount Fair Value Instruments payable bearing interest at fixed rates 17,788 15,428 17,288 18,837 Instruments payable bearing interest at variable rates 1,561 1,353 1,260 1,237 Total long-term debt, including current portion 19,349 16,781 18,548 20,074 Short term bank loans and other credit facilities including commercial paper 437 439 1,249 1,253 114 Consolidated financial statements

The following tables summarize the Company’s bases used to measure its debt at fair value. Fair value measurement has been classified into three levels based upon a fair value hierarchy that reflects the significance of the inputs used in making the measurements.

As of December 31, 2015 Carrying Fair Amount Value Level 1 Level 2 Level 3 Total Instruments payable bearing interest at fixed rates 17,788 14,707 721 - 15,428 Instruments payable bearing interest at variable rates 1,561 386 967 - 1,353 Total long-term debt, including current portion 19,349 15,093 1,688 - 16,781 Short term bank loans and other credit facilities including commercial paper 437 - 439 - 439

As of December 31, 2014 Carrying Fair Amount Value Level 1 Level 2 Level 3 Total Instruments payable bearing interest at fixed rates 17,288 17,726 1,111 - 18,837 Instruments payable bearing interest at variable rates 1,260 - 1,237 - 1,237 Total long-term debt, including current portion 18,549 17,726 2,348 - 20,074 Short term bank loans and other credit facilities including commercial paper 1,249 - 1,253 - 1,253

Instruments payable classified coupon rates and ArcelorMittal’s Significant cash or cash that impose restrictions on such as Level 1 refer to the Company’s credit spread quotations for the equivalent balances may be operating subsidiaries’ ability listed bonds quoted in active relevant maturities. held from time to time at to pay dividends, but such markets. The total fair value is the the Company’s international restrictions are not significant official closing price as defined There were no instruments payable operating subsidiaries, including in the context of ArcelorMittal’s by the exchange on which the classified as Level 3. in particular those in France overall liquidity. Repatriation of instrument is most actively traded and the United States, where funds from operating subsidiaries on the last trading day of the 6.1.3 Cash and cash equivalents the Company maintains cash may also be affected by tax and period, multiplied by the number and restricted cash management systems under foreign exchange policies in place of units held without consideration which most of its cash and cash from time to time in the various of transaction costs. Cash and cash equivalents consist equivalents are centralized. countries where the Company of cash and short-term highly Other subsidiaries, associates operates, though none of these Instruments payable classified liquid investments that are readily and joint ventures, which may policies are currently significant as Level 2 refer to all debt convertible to cash with original hold significant cash balances, in the context of ArcelorMittal’s instruments not classified as Level maturities of three months or include those in Argentina, Brazil, overall liquidity. 1. The fair value of the debt is less at the time of purchase and Canada, Morocco, South Africa, based on estimated future cash are carried at cost plus accrued Ukraine and Venezuela. Some flows converted into U.S. dollar at interest, which approximates fair of these operating subsidiaries the forward rate and discounted value. have debt outstanding or are using current U.S. dollar zero subject to acquisition agreements

Cash and cash equivalents consisted of the following:

December 31, 2015 December 31, 2014 Cash at bank 1,928 2,127 Term deposits 376 506 Money market funds1 1,698 1,260 Total 4,002 3,893 1 Money market funds are highly liquid investments with a maturity of 3 months or less from the date of acquisition. Consolidated financial statements 115

Restricted cash represents cash credit and credit arrangements. and 75 in connection with the 6.1.4 Net debt and cash equivalents not readily Changes in restricted cash are mandatory convertible bonds available to the Company, mainly included within other investing (see note 10.2) at December 31, The Company monitors its net related to insurance deposits, activities (net) in the consolidated 2015 and December 31, 2014, debt in order to manage its capital. escrow accounts created as a statements of cash flows. respectively. At December 31, The following table presents the result of acquisitions, and various 2014, it also included a guarantee structure of the Company’s net other deposits or required balance Restricted cash of 100 and 123 deposit of 23 related to a bank debt by original currency: obligations related to letters of included a cash deposit of 75 debt of an associate.

Presented in USD by original currency as at December 31, 2015 Total USD EUR USD CHF CAD Other (in USD) Short-term debt including the current portion of long-term debt 2,308 1,525 447 - 6 330 Long-term debt 17,478 5,155 11,986 225 18 94 Cash including restricted cash (4,102) (2,483) (588) (1) (296) (734) Net debt 15,684 4,197 11,845 224 (272) (310)

As a part of the Company’s are recognized in the consolidated on an ongoing basis, whether the commitments and by applying overall risk and cash management statements of operations, except derivatives that are used in hedging procedures which specify, for each strategies, several loan agreements for derivatives that are highly transactions are highly effective type of transaction and underlying, have been swapped from their effective and qualify for cash in offsetting changes in fair values risk limits and/or the characteristics original currencies to other foreign flow or net investment hedge or cash flows of hedged items. of the counter-party. The currencies. accounting. When a hedging instrument is sold, Company does not generally grant terminated, expired or is exercised, to or require from its counter- 6.1.5 Derivative financial Changes in the fair value of a the accumulated unrealized gain parties guarantees of the risks instruments derivative that is highly effective or loss on the hedging instrument incurred. Allowing for exceptions, and that is designated and qualifies is maintained in equity until the the Company’s counter-parties are The Company uses derivative as a fair value hedge, along with forecasted transaction occurs. If part of its financial partners and financial instruments principally to the gain or loss on the hedged the hedged transaction is no longer the related market transactions manage its exposure to fluctuations asset, liability, or unrecognized probable, the cumulative unrealized are governed by framework in interest rates, exchange rates, firm commitment of the hedged gain or loss, which had been agreements (mainly International prices of raw materials, energy item that is attributable to the recognized in equity, is reported Swaps and Derivatives Association and emission rights allowances hedged risk, are recorded in immediately in the consolidated agreements which allow netting arising from operating, financing the consolidated statements of statements of operations. only in case of counter-party and investing activities. Derivative operations. default). Accordingly, derivative financial instruments are classified Foreign currency differences assets and derivative liabilities are as current or non-current assets or Changes in the fair value of a arising on the translation of a not offset. liabilities based on their maturity derivative that is highly effective financial liability designated as a dates and are accounted for and that is designated and qualifies hedge of a net investment in a at the trade date. Embedded as a cash flow hedge are recorded foreign operation are recognized derivatives are separated from the in other comprehensive income. directly as a separate component host contract and accounted for Amounts deferred in equity are of equity, to the extent that the separately if they are not closely recorded in the consolidated hedge is effective. To the extent related to the host contract. The statements of operations in the that the hedge is ineffective, Company measures all derivative periods when the hedged item such differences are recognized financial instruments based on fair is recognized in the consolidated in the consolidated statements of values derived from market prices statements of operations and operations. of the instruments or from option within the same line item. pricing models, as appropriate. The Company manages the Gains or losses arising from The Company formally assesses, counter-party risk associated with changes in fair value of derivatives both at the hedge’s inception and its instruments by centralizing its 116 Consolidated financial statements

The portfolio associated with derivative financial instruments classified as Level 2 as of December 31, 2015 is as follows:

Assets Liabilities Notional Fair Average Notional Fair Amount Value Rate* Amount Value Average Rate* Interest rate swaps - fixed rate borrowings/loans 55 - 0.86% 50 - 1.60%

Foreign exchange rate instruments Forward purchase of contracts 1,960 48 659 (7) Forward sale of contracts 943 24 353 (9) Currency swaps purchases 314 19 314 (90) Currency swaps sales 375 85 1,000 (24) Exchange option purchases 102 - 342 (5) Exchange options sales 132 3 307 (10) Total foreign exchange rate instruments 179 (145)

Raw materials (base metal), freight, energy, emission rights Term contracts sales 168 28 126 (5) Term contracts purchases 204 7 727 (54) Total raw materials (base metal), freight, energy, emission rights 35 (59) Total 214 (204) * The average rate is determined for fixed rate instruments on the basis of the U.S. dollar and foreign currency rates and for the variable rate instruments generally on the basis of Euribor or Libor.

The portfolio associated with derivative financial instruments classified as Level 2 as of December 31, 2014 is as follows:

Assets Liabilities Notional Fair Average Notional Fair Amount Value Rate* Amount Value Average Rate* Interest rate swaps - fixed rate borrowings/loans 50 - 0.74% 1,118 (54) 2.13% Total interest rate instruments - (54)

Foreign exchange rate instruments Forward purchase of contracts 2,137 132 217 (3) Forward sale of contracts 475 5 287 (5) Currency swaps purchases 479 2 479 (95) Currency swaps sales 125 - 250 (3) Exchange option purchases 136 1 712 (8) Exchange options sales 218 1 715 (7) Total foreign exchange rate instruments 141 (121)

Raw materials (base metal), freight, energy, emission rights Term contracts sales 146 20 82 (13) Term contracts purchases 501 35 468 (55) Options sales/purchases 7 - 7 - Total raw materials (base metal), freight, energy, emission rights 55 (68) Total 196 (243) * The average rate is determined for fixed rate instruments on the basis of the U.S. dollar and foreign currency rates and for the variable rate instruments generally on the basis of Euribor or Libor. Consolidated financial statements 117

6.1.6 Other non-derivative financial of substantially all risks and for-sale securities, a significant tested for impairment, calculations assets and liabilities rewards of the instruments. or prolonged decline in the fair are based on information Non-derivative financial liabilities value of the security below its derived from business plans and Other non-derivative financial are derecognized when they cost is considered an indicator other information available for assets and liabilities include are extinguished (i.e. when the that the securities are impaired. estimating their value in use. Any cash and cash equivalents and obligation specified in the contract If any such evidence exists for impairment loss is recognized restricted cash (see note 6.1.3), is discharged, cancelled or expires). available-for-sale financial assets, in the consolidated statements trade and certain other receivables the cumulative loss measured of operations. An impairment (see notes 4.1, 4.3 and 4.4), Impairment of financial assets as the difference between the loss related to financial assets investments in available-for-sale acquisition cost and the current is reversed if and to the extent equity securities (see note 2.5), A financial asset is considered to fair value less any impairment loss there has been a change in the trade payables and certain other be impaired if objective evidence on that financial asset previously estimates used to determine the liabilities (see notes 4.7 and 4.8). indicates that one or more events recognized in the consolidated recoverable amount. The loss These instruments are recognized have had a negative effect on statements of operations is is reversed only to the extent initially at fair value when the the estimated future cash flows removed from equity and that the asset’s carrying amount Company becomes a party to of that asset. Estimated future recognized in the consolidated does not exceed the carrying the contractual provisions of cash flows are determined statements of operations. amount that would have been the instrument. Non-derivative using various assumptions and determined if no impairment loss financial assets are derecognized techniques, including comparisons Financial assets are tested for had been recognized. Reversals if the Company’s contractual to published prices in an active impairment annually or whenever of impairment are recognized in rights to the cash flows from market and discounted cash changes in circumstances indicate net income except for reversals the financial instruments expire flow projections using projected that the carrying amount may of impairment of available-for- or if the Company transfers the growth rates, weighted average not be recoverable. If objective sale equity securities, which are financial instruments to another cost of capital, and inflation evidence indicates that cost- recognized in equity. party without retaining control rates. In the case of available- method investments need to be

6.2 Financing costs

Financing costs recognized in the years ended December 31, 2015, 2014 and 2013 are as follows:

Year Ended December 31, Year Ended December 31, Year Ended December 31, 2015 2014 2013 Recognized in the statements of operations Interest expense (1,383) (1,565) (1,890) Interest income 105 96 113 Fair value adjustment on conversion options on the euro convertible bond, call options on ArcelorMittal shares and mandatory convertible bonds (108) 112 (12) Net gain (loss) on other derivative instruments 10 7 11 Accretion of defined benefit obligations and other long term liabilities (399) (593) (574) Net foreign exchange result (697) (620) (248) Others * (386) (819) (515) Total (2,858) (3,382) (3,115)

Recognized in equity (Company share) Net change in fair value of available-for-sale financial assets (354) 510 68 Effective portion of changes in fair value of cash flow hedge 25 104 (110) Foreign currency translation differences for foreign operations (8,166) (4,717) (666) Total (8,495) (4,103) (708) * Other mainly includes expenses related to True Sale of Receivables (“TSR”) programs and bank fees. It also included an expense of 79 in 2015 and 49 in 2014 relating to the extension of the mandatory convertible bonds (see note 10.2). In 2014, it included the settlement in relation to the termination of the Senegal greenfield project and an expense of 161 related to a federal tax amnesty plan in Brazil with respect to the Siderbras case (see note 8.2).

6.3 Risk management policy at inception or during the lifetime Interest rate derivatives used by generated by its operating of the loan. The Company and the Company to manage changes activities. Because a substantial Interest rate risk its counter-parties exchange, at in the value of fixed rate loans portion of ArcelorMittal’s assets, predefined intervals, the difference qualify as fair value hedges. liabilities, sales and earnings are The Company utilizes certain between the agreed fixed rate and denominated in currencies other instruments to manage interest the variable rate, calculated on the Foreign exchange rate risk than the U.S. dollar (its reporting rate risks. Interest rate instruments basis of the notional amount of the currency), ArcelorMittal has an allow the Company to borrow long- swap. Similarly, swaps may be used The Company is exposed to exposure to fluctuations and term at fixed or variable rates, and for the exchange of variable rates changes in values arising from depreciation in the values of these to swap the rate of this debt either against other variable rates. foreign exchange rate fluctuations currencies relative to the U.S. 118 Consolidated financial statements

dollar. These currency fluctuations, may sell finished steel products in and other items denominated working capital credit lines at the especially the fluctuation of the other currencies. Consequently, an in currencies other than the level of its operating subsidiaries. value of the U.S. dollar relative appreciation of the U.S. dollar will U.S. dollar, for inclusion in the The Company actively manages its to the euro, the Canadian dollar, increase the cost of raw materials; consolidated financial statements. liquidity. Following the Treasury and Brazilian real, South African rand, thereby impacting negatively on Financial Risk Management Policy, Kazakh tenge, Venezuelan bolivar the Company’s operating margins, The Company also uses the the levels of cash, credit lines and Ukrainian hryvnia, as well as unless the Company is able to pass derivative instruments, described and debt are closely monitored fluctuations in the other countries’ along the higher cost in the form of above, at the corporate level to and appropriate actions are currencies in which ArcelorMittal higher selling prices. hedge debt recorded in foreign taken in order to comply with the has significant operations and/or currency other than the functional covenant ratios, leverage, fixed/ sales, could have a material impact Following its Treasury and Financial currency or the balance sheet floating ratios, maturity profile and on its results of operations. Risk Management Policy, the risk incurred on certain monetary currency mix. Company hedges a portion of its assets denominated in a foreign ArcelorMittal faces transaction net exposure to foreign exchange currency other than the functional The following are the non- risk, where its businesses generate rates through foreign currency currency. discounted contractual maturities sales in one currency but incur forwards, options and swaps. of financial liabilities, including costs relating to that revenue Liquidity Risk estimated interest payments and in a different currency. For ArcelorMittal faces translation risk, excluding the impact of netting example, ArcelorMittal’s non-U.S. which arises when ArcelorMittal ArcelorMittal’s principal sources of agreements: subsidiaries may purchase raw translates the statements of liquidity are cash generated from materials, including iron ore and operations of its subsidiaries, its its operations, its credit lines at coking coal, in U.S. dollars, but corporate net debt (see note 6.1.2) the corporate level and various

December 31, 2015 Carrying amount Contractual Cash Flow Less than 1 Year 1-2 Years 2-5 Years More than 5 Years Non-derivative financial liabilities Bonds (17,681) (26,082) (2,223) (3,464) (6,279) (14,116) Loans over 100 (892) (1,149) (659) (83) (166) (241) Trade and other payables (8,977) (8,988) (8,988) - - - Other non-derivative financial liabilities (1,213) (1,376) (667) (182) (280) (247) Total (28,763) (37,595) (12,537) (3,729) (6,725) (14,604)

Derivative financial liabilities Foreign exchange contracts (145) (145) (80) (33) (15) (17) Other commodities contracts1 (59) (59) (54) (5) - - Total (204) (204) (134) (38) (15) (17)

December 31, 2014 Carrying amount Contractual Cash Flow Less than 1 Year 1-2 Years 2-5 Years More than 5 Years Non-derivative financial liabilities Bonds (16,639) (25,143) (2,080) (2,735) (9,199) (11,129) Loans over 100 (2,071) (2,505) (1,132) (724) (320) (329) Trade and other payables (11,450) (11,463) (11,463) - - - Other non-derivative financial liabilities (1,087) (1,256) (518) (278) (309) (151) Total (31,247) (40,367) (15,193) (3,737) (9,828) (11,609)

Derivative financial liabilities Interest rate instruments (54) (54) - (1) (53) - Foreign exchange contracts (121) (121) (66) (46) (6) (3) Other commodities contracts1 (68) (68) (68) - - - Total (243) (243) (134) (47) (59) (3) 1 Commodity contracts include base metals, freight, energy and emission rights. Consolidated financial statements 119

Cash flow hedges

The following tables present the periods in which the derivatives designated as cash flows hedges are expected to mature:

December 31, 2015 assets/ (liabilities) (outflows)/inflows More 3 months 3-6 6-12 than 2 Fair value and less months months 1-2 years years Foreign exchange contracts 26 15 11 - - - Commodities (24) (11) (2) (6) (5) - Emission rights (16) - - (16) - - Total (14) 4 9 (22) (5) -

December 31, 2014 assets/ (outflows) (liabilities) /inflows More 3 months 3-6 6-12 than 2 Fair value and less months months 1-2 years years Foreign exchange contracts 105 82 18 5 - - Commodities (4) (10) 3 2 1 - Emission rights 22 - - 22 - - Total 123 72 21 29 1 -

Associated gains or losses operations in the same period presents the periods in which in other comprehensive income that were recognized in other during which the hedged the realized and unrealized are expected to impact the comprehensive income are forecasted cash flow affects gains or losses on derivatives consolidated statements of reclassified from equity to the the consolidated statements of designated as cash flows operations: consolidated statements of operations. The following table hedges, net of tax, recognized

December 31, 2015 assets/ (liabilities) (expense)/income Carrying 3 months 3-6 6-12 1-2 More than amount and less months months years 2 years Foreign exchange contracts 10 (3) 11 2 - - Commodity contracts (10) (4) (3) (1) (2) - Emission rights 86 (1) - - 87 - Interest rate contracts (14) (1) - (1) (6) (6) Total 72 (9) 8 - 79 (6)

December 31, 2014 assets/ (liabilities) (expense)/income Carrying 3 months 3-6 6-12 1-2 More than amount and less months months years 2 years Foreign exchange contracts 52 25 15 12 - - Commodity contracts (5) (5) (7) 6 1 - Emission rights 61 - - - - 61 Total 108 20 8 18 1 61 120 Consolidated financial statements

During the year ended December (35) was recycled to cost of sales EUR/USD CCS have a notional million, which is designated as 31, 2011 the Company entered related to the sale of inventory of 375 and a fair value gain of a net investment hedge. The into several forward exchange in 2013. Including the effects of 85 net of a deferred tax expense EUR/USD CCS have a notional and options contracts related to foreign currency fluctuations, the of 25 has been recorded in the of 1,000 and a fair value loss of the purchase of raw materials deferred gain was €7 million (9), consolidated statements of other 24 net of a deferred tax asset denominated in U.S. dollars. The excluding deferred tax expense comprehensive income for the year of 7 has been recorded in the program was unwound during of €2 million (3), as of December ended December 31, 2015. The consolidated statements of other the year ended December 31, 31, 2013, which was fully recycled fair value of the net investment comprehensive income for the year 2011. As of December 31, 2011 to the consolidated statements of hedge is included in other long ended December 31, 2015. The the effective portion deferred in operations during the year ended term assets in the consolidated fair value of the net investment equity was €48 million, including December 31, 2014. statements of financial position. hedge is included in other long deferred tax expense of €13 The Company is committed term obligations in the consolidated million. The effective portion Net investment hedge to a bilateral cash collateral statements of financial position. represents a deferred gain that has arrangement for a maximum of been recycled to the consolidated In December 2014, the Company €150 million. At December 31, 2015 the hedge statements of operations when entered into EUR/USD cross was 100% effective. The cross the converted raw materials will currency swaps (“CCS”) to hedge On May 27, 2015, the Company currency swap is classified into be sold. The deferred gain has euro denominated net investment entered into additional EUR/USD Level 2. been recycled to the statements in foreign operations amounting to CCS to hedge euro denominated of operations between 2012 and €303 million, which is designated net investment in foreign Net investment hedges are as 2014. During 2013, €26 million as a net investment hedge. The operations amounting to €918 follows:

December 31, 2015 Fair value at Fair value Derivatives Notional amount Date traded December 31, 2014 Change in fair value as of December 31, 2015* CCS 30Y 250 December 3, 2014 (3) 59 56 CCS 30Y 125 December 12, 2014 - 29 29 CCS 5Y 500 May 28, 2015 - (7) (7) CCS 10Y 300 May 28, 2015 - (10) (10) CCS 10Y 160 May 28, 2015 - (6) (6) CCS 10Y 40 May 28, 2015 - (1) (1) Total 1,375 (3) 64 61 * The net investment hedges were fully effective, as such the change in fair value is entirely recorded in other comprehensive income.

December 31, 2014 Fair value at Fair value Derivatives Notional amount Date traded December 31, 2013 Change in fair value as of December 31, 2014* CCS 30Y 250 December 3, 2014 - (3) (3) CCS 30Y 125 December 12, 2014 - - - Total 375 - (3) (3) * The net investment hedges were fully effective, as such the change in fair value is entirely recorded in other comprehensive income.

Raw materials, freight, energy risks and emission rights

The Company uses financial instruments such as forward purchases or sales, options and swaps for certain commodities in order to manage the volatility of prices of certain raw materials, freight and energy. The Company is exposed to risks in fluctuations in prices of raw materials (including base metals such as zinc, nickel, aluminum, tin, copper and iron ore), freight and energy, both through the purchase of raw materials and through sales contracts. Consolidated financial statements 121

Fair values of raw material, freight, energy and emission rights instruments are as follows:

At December 31, 2015 2014 Base metals (15) (30) Freight 13 6 Energy (oil, gas, electricity) (6) (11) Emission rights (16) 22 Total (24) (13)

Derivative assets associated with raw material, energy, freight and emission rights 35 55 Derivative liabilities associated with raw material, energy, freight and emission rights (59) (68) Total (24) (13)

ArcelorMittal consumes large Emission rights market data regarding the credit number indicates an increase in amounts of raw materials (the standings and overall reliability profit or loss and other equity, prices of which are related to Pursuant to the application of the of the financial institutions for all where a negative number the London Metals Exchange European Directive 2003/87/EC countries where the Company’s indicates a decrease in profit or price index, the Steel Index and of October 13, 2003, establishing subsidiaries operate. The choice loss and other equity. Platts Index), ocean freight a scheme for emission allowance of the financial institution for (the price of which is related to trading, the Company enters the financial transactions must The sensitivity analysis includes a Baltic Exchange Index), and into certain types of derivatives be approved by the treasury the Company’s complete portfolio energy (the prices of which (cash purchase and sale, forward department. Credit risk related to of foreign currency derivatives are related to the New York transactions and options) in order customers, customer credit terms outstanding. The impact on Mercantile Exchange index, the to implement its management and receivables is discussed in note the non €/$ derivatives reflects Intercontinental Exchange index policy for associated risks. As of 4.3. the estimated move of such and the Powernext index). As a December 31, 2015 and 2014, currency pairs, when the U.S. general matter, ArcelorMittal is the Company had a net notional Sensitivity analysis dollar appreciates or depreciates exposed to price volatility with position of 391 with a net fair value 10% against the euro, based on respect to its purchases in the spot of (16) and a net notional position Foreign currency sensitivity computations of correlations in the market and under its long-term of 201 with a net fair value of 22, foreign exchange markets in 2015 supply contracts. In accordance respectively. The following tables detail the and 2014. with its risk management policy, Company’s sensitivity as it relates ArcelorMittal hedges a part of its Credit risk to derivative financial instruments risk exposure to its raw materials to a 10% strengthening and a procurements. The Company’s treasury 10% weakening in the U.S. dollar department monitors various against the euro. A positive

December 31, 2015 Income Other Equity 10% strengthening in U.S. dollar (47) 367 10% weakening in U.S. dollar 65 (365)

December 31, 2014 Income Other Equity 10% strengthening in U.S. dollar (24) 213 10% weakening in U.S. dollar 30 (213) 122 Consolidated financial statements

Cash flow sensitivity analysis for variable rate instruments

The following tables detail the Company’s sensitivity as it relates to variable interest rate instruments. A change of 100 basis points (“bp”) in interest rates during the period would have increased (decreased) profit or loss by the amounts presented below. This analysis assumes that all other variables, in particular foreign currency rates, remain constant.

December 31, 2015 Floating Interest Rate porting Swaps/Forward of net debt1 Rate Agreements 100 bp increase 23 1 100 bp decrease (23) (1)

December 31, 2014 Floating Interest Rate porting Swaps/Forward of net debt1 Rate Agreements 100 bp increase 25 (21) 100 bp decrease (25) 22 1 Please refer to note 6.1.4 for a description of total net debt (including fixed and floating portion)

Base metals, energy, freight, emissions rights

The following tables detail the Company’s sensitivity to a 10% increase and decrease in the price of the relevant base metals, energy, freight and emissions rights. The sensitivity analysis includes only outstanding, un-matured derivative instruments either held for trading at fair value through the consolidated statements of operations or designated in hedge accounting relationships.

December 31, 2015 Other Equity Cash Flow Income Hedging Reserves +10% in prices Base Metals 17 2 Iron Ore - 1 Freights (1) - Emission rights - 41 Energy - (4) -10% in prices Base Metals (16) (2) Iron Ore - (1) Freights 1 - Emission rights - (41) Energy - 4

December 31, 2014 Other Equity Cash Flow Income Hedging Reserves +10% in prices Base Metals 24 37 Freights (1) - Emission rights - 22 Energy - 4 -10% in prices Base Metals (24) (37) Freights 1 - Emission rights - (22) Energy - (4) Consolidated financial statements 123

Note 7 : Personnel expenses and deferred employee benefits

7.1 Employees and key management personnel

As of December 31, 2015, ArcelorMittal had approximately 209,000 employees and the total annual compensation of ArcelorMittal’s employees in 2015, 2014 and 2013 was as follows:

Year Ended December 31, 2015 2014 2013 Employee Information Wages and salaries 8,392 9,839 9,891 Pension cost 237 216 248 Other staff expenses 1,695 1,989 1,740 Total 10,324 12,044 11,879

The total annual compensation of ArcelorMittal’s key management personnel, including its Board of Directors, expensed in 2015, 2014 and 2013 was as follows:

Year Ended December 31, 2015 2014 2013 Base salary and directors fees 7 11 12 Short-term performance-related bonus 5 8 6 Post-employment benefits - 1 1 Share based compensation 7 7 3

The fair value of the stock options benefits are broken down into actuarial valuations being carried reductions in future contributions granted and shares allocated defined contribution plans and out at each fiscal year end. to the plan. based on RSU and PSU plans to the defined benefit plans. ArcelorMittal’s key management The retirement benefit obligation Current service cost, which is the personnel is recorded as an Defined contribution plans are recognized in the consolidated increase of the present value of the expense in the consolidated those plans where ArcelorMittal statements of financial position defined benefit obligation resulting statements of operations over the pays fixed or determinable represents the present value of from the employee service in the relevant vesting periods. contributions to external life the defined benefit obligation current period, is recorded as an insurance or other funds for less the fair value of plan assets. expense as part of cost of sales and As of December 31, 2015, 2014 certain categories of employees. The present value of the defined selling, general and administrative and 2013, ArcelorMittal did not Contributions are paid in return benefit obligation is determined expenses in the consolidated have outstanding any loans or for services rendered by the by discounting the estimated statements of operations. The advances to members of its Board employees during the period. future cash outflows using interest net interest cost, which is the of Directors or key management Contributions are expensed as rates of high quality corporate change during the period in the personnel, and, as of December 31, incurred consistent with the bonds that are denominated in net defined benefit liability or asset 2015, 2014 and 2013, ArcelorMittal recognition of wages and salaries. the currency in which the benefits that arises from the passage of had not given any guarantees No provisions are established with will be paid, and that have terms time, is recognized as part of net for the benefit of any member respect to defined contribution to maturity approximating to financing costs in the consolidated of its Board of Directors or key plans as they do not generate the terms of the related pension statements of operations. management personnel. future commitments for obligation. In countries where there ArcelorMittal. is no deep market in such bonds, The Company recognizes gains 7.2 Deferred employee the market rates on government and losses on the curtailment of benefits Defined benefit plans are those bonds are used. Actuarial gains a defined benefit plan when the plans that provide guaranteed and losses arising from experience curtailment occurs. The gain or ArcelorMittal’s operating benefits to certain categories adjustments and changes in loss on curtailment comprises subsidiaries sponsor different of employees, either by way of actuarial assumptions are charged any resulting change in the fair types of pension plans for their contractual obligations or through or credited to other comprehensive value of plan assets, any change in employees. Also, some of the a collective agreement. For defined income in the period in which they the present value of the defined operating subsidiaries offer other benefit plans, the cost of providing arise. Any asset resulting from this benefit obligation, any related post-employment benefits, benefits is determined using the calculation is limited to the present actuarial gains and losses and principally healthcare. These projected unit credit method, with value of available refunds and past service cost that had not 124 Consolidated financial statements

been previously recognized. plans are calculated annually is the present value of benefit by a recognized rating agency). Past service cost is the change in on the basis of the number of obligations at the consolidated Nominal interest rates vary the present value of the defined employees likely to take early statements of financial position worldwide due to exchange rates benefit obligation resulting from a retirement and are discounted date, and all changes in the and local inflation rates. plan amendment or a curtailment. using an interest rate which provision (including actuarial gains Past service cost is recognized corresponds to that of highly- and losses or past service costs) • Rate of compensation increase: immediately in the consolidated rated bonds that have maturity are recognized in the consolidated The rate of compensation statements of operations in the dates similar to the terms of statements of operations in the increase reflects actual period in which it arises. the Company’s early retirement period in which they arise. experience and the Company’s obligations. long-term outlook, including Voluntary retirement plans Termination benefits are provided The expense associated with the contractually agreed upon wage primarily correspond to the in connection with voluntary above pension plans and post- rate increases for represented practical implementation of social separation plans. The Company employment benefits, as well as hourly employees. plans or are linked to collective recognizes a liability and expense the carrying amount of the related agreements signed with certain when it can no longer withdraw liability/asset on the consolidated • Healthcare cost trend rate: The categories of employees. Early the offer or, if earlier, when it has statements of financial position healthcare cost trend rate is retirement plans are those a detailed formal plan which has are based on a number of based on historical retiree cost plans that primarily correspond been communicated to employees assumptions and factors such as data, near-term healthcare to terminating an employee’s or their representatives. discount rates, expected rate of outlook, including appropriate contract before the normal compensation increase, healthcare cost control measures retirement date. Liabilities for early Other long-term employee cost trend rates, mortality rates implemented by the Company, retirement plans are recognized benefits include various plans that and retirement rates. and industry benchmarks and when the affected employees depend on the length of service, surveys. have formally been informed and such as long service and sabbatical • Discount rates: The discount rate when amounts owed have been awards, disability benefits is based on several high quality • Mortality and retirement rates : determined using an appropriate and long term compensated corporate bond indexes and Mortality and retirement rates are actuarial calculation. Liabilities absences such as sick leave. The yield curves in the appropriate based on actual and projected relating to the early retirement amount recognized as a liability jurisdictions (rated AA or higher plan experience.

Statements of Financial Position

Total deferred employee benefits including pension or other post-employment benefits, are as follows:

December 31, 2015 2014 Pension plan benefits 3,149 3,748 Other post-employment benefits 5,549 5,659 Early retirement benefits 357 461 Defined benefit liabilities 9,055 9,868 Termination benefits 161 206 Total 9,216 10,074

The early retirement benefits and hired before 2003 receive pension pension benefits through a The ArcelorMittal Dofasco pension termination benefits are related benefits which are determined multi-employer pension plan plan is a hybrid plan providing the mainly to European countries under a “Cash Balance” formula as that is accounted for as a defined benefits of both a defined benefit (Belgium, Spain, Germany and an account balance which grows contribution plan, due to the and defined contribution pension Luxembourg). as a result of interest credits and of limited information made available plan. The defined contribution allocations based on a percentage to each of the 541 (as of December component is financed by Pension Plans of pay. Benefits for wage and 31, 2014) different participating both employer and employee salaried employees represented employers. ArcelorMittal USA contributions. The employer’s A summary of the significant by a union are determined as a makes contributions to this multi- defined contribution is based on a defined benefit pension plans is as monthly benefit at retirement employer plan in the amount of percentage of company profits. The follows: based on fixed rate and service. $2.65 per contributory hour. defined benefit pension plan was This plan is closed to new closed for new hires on December U.S. participants. Canada 31, 2010 and replaced by a new defined contribution pension plan ArcelorMittal USA’s Pension Plan is Represented employees hired The primary pension plans are with contributions related to age, a non-contributory defined benefit after November 2005 and those of ArcelorMittal Dofasco, service and earnings. plan covering approximately 15% employees at locations which ArcelorMittal Mines Canada and of its employees. Certain non- were acquired from International ArcelorMittal Montreal. At the end of 2012, ArcelorMittal represented salaried employees Steel Group Inc. receive defined Dofasco froze and capped Consolidated financial statements 125

benefits for its hourly and salaried benefit plan was closed to new In the Netherlands, most accrued separated from the Company and employees who were still accruing hires. A new defined contribution pension rights were externalized are governed by local regulations service under the defined benefit type arrangement was established with an insurance company in April and practice in each country, as plan and began transitioning these for new hires. 2014. The transaction removed is the nature of the relationship employees to the new defined 111 and 113 of defined benefit between the Company and contribution pension plan for future Brazil obligations and plan assets, the governing bodies and their pension benefits. respectively. composition. In general terms, The primary defined benefit governing bodies are required The ArcelorMittal Mines Canada plans, financed through trust South Africa by law to act in the best interest defined benefit plan provides salary funds, have been closed to new of the plan members and are related benefit for non-union entrants. Brazilian entities have all Following an amendment of the responsible for certain tasks related employees and a flat dollar pension established defined contribution rules of the ArcelorMittal South to the plan (e.g. setting the plan’s depending on an employee’s length plans that are financed by employer Africa Pension Fund (“the fund”) investment policy). of service for union employees. and employee contributions. approved by the Financial Services This plan was closed for new Board on November 9, 2015 In case of the funded pension non-union hires on December 31, Europe and effective April 1, 2015, plans, the investment positions are 2009 and replaced by a defined ArcelorMittal South Africa has managed within an asset-liability contribution pension plan with Certain European operating discontinued its participation in the matching (ALM) framework that contributions related to age and subsidiaries maintain primarily fund and therefore no longer has has been developed to achieve service. In 2014, ArcelorMittal unfunded defined benefit pension any legal or constructive obligation long-term investments that are Mines Canada communicated plans for a certain number of to ensure the funding of the plan. in line with the obligations of the to its non-union employees employees. Benefits are based on Accordingly, the related benefit pension plans. who were still benefiting under such employees’ length of service obligation was settled and the plan the defined benefit plan that and applicable pension table under assets and unrecoverable surplus A long-term investment strategy they would be transitioning to a the terms of individual agreements. were derecognized from the has been set for ArcelorMittal’s defined contribution pension plan. Some of these unfunded plans have 2015 consolidated statements of major funded pension plans, with This transition had no impact on been closed to new entrants and financial position. its asset allocation comprising of the financial statements of the replaced by defined contributions a mixture of equities securities, Company for the financial year pension plans for active members South African entities have fixed income securities, real estate 2014. financed by employer and also implemented defined and other appropriate assets. employee contributions. contributions pension plans that This recognizes that different ArcelorMittal Montreal sponsors are financed by employer and asset classes are likely to produce several defined benefit and defined As from December 2015 new employee contributions. different long-term returns and contribution pension plans for Belgian legislation modifies the some asset classes may be more its various groups of employees, minimum guaranteed rates of Others volatile than others. The long-term with most defined benefit plans return applicable to Belgian investment strategy ensures, in closed to new entrants several Defined Contribution Plans. A very limited number of defined particular, that investments are years ago. The primary defined For insured plans, the rates of benefit pension plans are in place in adequately diversified. benefit pension plan sponsored by 3,25% on employer contributions other countries. ArcelorMittal Montreal provides and 3,75% on employee certain unionized employees with a contributions will continue The majority of the funded defined flat dollar pension depending on an to apply to the accumulated benefit pension plans described employee’s length of service. pre-2016 contributions. For earlier provide benefit payments contributions paid as from January, from trustee-administered funds. ArcelorMittal Montreal entered 1, 2016, a new variable minimum ArcelorMittal also sponsors a into a six-year collective labor guaranteed rate of return will number of unfunded plans where agreement during the third quarter apply. Best estimate for the 2016 the Company meets the benefit of 2014 with its Contrecoeur- contributions being 1,75%. payment obligation as it falls due. West union group. The defined Plan assets held in trusts are legally 126 Consolidated financial statements

The following tables detail the reconciliation of defined benefit obligation (“DBO”), plan assets and statements of financial position.

Year Ended December 31, 2015 TOTAL U.S. CANADA BRAZIL EUROPE SOUTH AFRICA OTHERS Change in benefit obligation Benefit obligation at beginning of the period 11,859 3,935 3,623 733 2,723 587 258 Current service cost 121 36 31 2 44 - 8 Interest cost on DBO 419 150 126 66 49 11 17 Past service cost - Plan amendments 4 - 1 - 2 1 - Plan participants’ contribution 3 - 1 1 - - 1 Curtailments and settlements (513) (2) - - (1) (510) - Actuarial (gain) loss (256) (204) (55) (41) 30 2 12 Demographic assumptions (37) (37) (9) (1) 10 - - Financial assumptions (291) (150) (77) (23) (44) 3 - Experience adjustment 72 (17) 31 (17) 64 (1) 12 Benefits paid (655) (261) (194) (38) (121) (18) (23) Foreign currency exchange rate differences and other movements 12 (1,099) (31) (605) (228) (125) (56) (54) Benefit obligation at end of the period 9,883 3,623 2,928 495 2,601 17 219

Change in plan assets Fair value of plan assets at beginning of the period 8,348 3,026 3,144 688 645 714 131 Interest income on plan assets 312 105 108 66 12 14 7 Return on plan assets greater/(less) than discount rate (182) (117) 61 (19) (6) (94) (7) Employer contribution 155 70 35 27 22 - 1 Plan participants’ contribution 3 - 1 1 - - 1 Settlements (512) (2) - - - (510) - Benefits paid (543) (256) (193) (38) (32) (18) (6) Foreign currency exchange rate differences and other movements 12 (753) (31) (523) (227) 112 (86) 2 Fair value of plan assets at end of the period 6,828 2,795 2,633 498 753 20 129

Present value of the wholly or partly funded obligation (8,500) (3,597) (2,915) (493) (1,338) (17) (140) Fair value of plan assets 6,828 2,795 2,633 498 753 20 129 Net present value of the wholly or partly funded obligation (1,672) (802) (282) 5 (585) 3 (11) Present value of the unfunded obligation (1,383) (26) (13) (2) (1,263) - (79) Prepaid due to unrecoverable surpluses (80) - (21) (53) (3) (3) - Net amount recognized (3,135) (828) (316) (50) (1,851) - (90)

Net assets related to funded obligations 14 - 14 - - - - Recognized liabilities (3,149) (828) (330) (50) (1,851) - (90)

Change in unrecoverable surplus Unrecoverable surplus at beginning of the period (205) - - (75) (3) (127) - Interest cost on unrecoverable surplus (10) - - (7) - (3) - Change in unrecoverable surplus in excess of interest 81 - (21) 4 - 98 - Exchange rates changes 54 - - 25 - 29 - Unrecoverable surplus at end of the period (80) - (21) (53) (3) (3) -

1 Other movements include Laplace for (29) in benefit obligations and (20) in plan assets as has been classified held for sale in December 2015. 2 The change in Belgian legislation, as described above, results into minimum guaranteed benefits at the date of leaving or retirement. Therefore, Belgian defined contribution plans classified as defined benefit plans. Other movements include 174 in benefit obligations and 174 in plan assets.

Consolidated financial statements 127

Year Ended December 31, 2014 TOTAL U.S. CANADA BRAZIL EUROPE SOUTH AFRICA OTHERS Change in benefit obligation Benefit obligation at beginning of the period 11,620 3,596 3,560 689 2,783 676 316 Current service cost 128 41 35 4 38 - 10 Interest cost on DBO 561 163 158 86 83 51 20 Past service cost - Plan amendments 3 - 3 - - - - Plan participants’ contribution 3 - 1 1 - - 1 Curtailments and settlements (115) - - - (115) - - Actuarial (gain) loss 1,311 387 368 118 436 (1) 3 Demographic assumptions 163 99 30 45 (11) - - Financial assumptions 1,138 295 415 23 408 3 (6) Experience adjustment 10 (7) (77) 50 39 (4) 9 Benefits paid (751) (252) (211) (48) (145) (73) (22) Foreign currency exchange rate differences and other movements 1 (901) - (291) (117) (357) (66) (70) Benefit obligation at end of the period 11,859 3,935 3,623 733 2,723 587 258

Change in plan assets Fair value of plan assets at beginning of the period 8,586 2,908 3,244 733 785 786 130 Interest income on plan assets 445 124 148 86 20 60 7 Return on plan assets greater/(less) than discount rate 365 88 183 17 60 19 (2) Employer contribution 253 165 48 14 25 - 1 Plan participants’ contribution 3 - 1 1 - - 1 Settlements (113) - - - (113) - - Benefits paid (617) (248) (210) (48) (33) (73) (5) Foreign currency exchange rate differences and other movements 1 (574) (11) (270) (115) (99) (78) (1) Fair value of plan assets at end of the period 8,348 3,026 3,144 688 645 714 131

Present value of the wholly or partly funded obligation (10,256) (3,904) (3,607) (731) (1,297) (587) (130) Fair value of plan assets 8,348 3,026 3,144 688 645 714 131 Net present value of the wholly or partly funded obligation (1,908) (878) (463) (43) (652) 127 1 Present value of the unfunded obligation (1,603) (31) (16) (2) (1,426) - (128) Prepaid due to unrecoverable surpluses (205) - - (75) (3) (127) - Net amount recognized (3,716) (909) (479) (120) (2,081) - (127)

Net assets related to funded obligations 32 - 31 - - - 1 Recognized liabilities (3,748) (909) (510) (120) (2,081) - (128)

Change in unrecoverable surplus Unrecoverable surplus at beginning of the period (194) - - (81) (3) (110) - Interest cost on unrecoverable surplus (19) - - (10) - (9) - Change in unrecoverable surplus in excess of interest (15) - - 5 - (20) - Exchange rates changes 23 - - 11 - 12 - Unrecoverable surplus at end of the period (205) - - (75) (3) (127) -

1 Other movements include the divestiture of ATIC for (29) in benefit obligations and (21) in plan assets

128 Consolidated financial statements

The following tables detail the components of net periodic pension cost:

Year Ended December 31, 2015 SOUTH Net periodic pension cost (benefit) TOTAL U.S. CANADA BRAZIL EUROPE AFRICA OTHERS Current service cost 121 36 31 2 44 - 8 Past service cost - Plan amendments 4 - 1 - 2 1 - Past service cost - Curtailments (1) - - - (1) - - Net interest cost/(income) on net DB liability/(asset) 117 45 18 7 37 - 10 Total 241 81 50 9 82 1 18

Year Ended December 31, 2014 SOUTH Net periodic pension cost (benefit) TOTAL U.S. CANADA BRAZIL EUROPE AFRICA OTHERS Current service cost 128 41 35 4 38 - 10 Past service cost - Plan amendments 3 - 3 - - - - Past service cost - Curtailments and settlements (2) - - - (2) - - Net interest cost/(income) on net DB liability/(asset) 135 39 10 10 63 - 13 Total 264 80 48 14 99 - 23

Year Ended December 31, 2013 SOUTH Net periodic pension cost (benefit) TOTAL U.S. CANADA BRAZIL EUROPE AFRICA OTHERS Current service cost 165 49 45 11 46 1 13 Past service cost - Plan amendments 1 - - - 1 - - Past service cost - Curtailments and settlements (4) - - - - (4) - Net interest cost/(income) on net DB liability/(asset) 195 63 35 20 62 - 15 Total 357 112 80 31 109 (3) 28

Other post-employment benefits is primarily based on a specific (“VEBA”) trust at a fixed amount of fixed income and 26% in equities amount for hourly employees. 25 per quarter. The VEBA primarily and alternatives. The total fair value ArcelorMittal’s principal operating ArcelorMittal USA does not provides limited healthcare benefits of the assets in the VEBA trust was subsidiaries in the U.S., Canada, pre-fund most of these post- to the retirees of certain companies 648 as of December 31, 2015. Europe and certain other countries, employment benefits. whose assets were acquired provide other post-employment (referred to as Legacy Retirees). benefits (“OPEB”), including The labor contract between Additionally, ArcelorMittal USA’s medical benefits and life insurance ArcelorMittal USA and the United retiree health care costs are capped benefits, to retirees. Substantially Steelworkers (“USW”) for 14 of the at the 2008 per capita level for all union-represented ArcelorMittal Company’s facilities in the United years 2010 and after. The VEBA USA employees are covered under States expired on September 1, can be utilized to the extent funds post-employment life insurance 2015. Employees continue to work are available, for costs in excess of and medical benefit plans that under the existing contract as the cap for these retirees. require a level of cost share from negotiations to reach a new labor retirees. The post-employment agreement remain ongoing. The The Company has significant assets life insurance benefit formula current labor agreement requires mostly in the aforementioned VEBA used in the determination of payments into an existing Voluntary post-employment benefit plan. post-employment benefit cost Employee Beneficiary Association These assets consist of 74% in Consolidated financial statements 129

Summary of changes in the other post-employment benefit obligation and changes in plan assets are as follows:

Year Ended December 31, 2015 TOTAL U.S. CANADA EUROPE OTHERS Change in benefit obligation Benefit obligation at beginning of the period 6,389 4,874 744 577 194 Current service cost 96 50 9 28 9 Interest cost on DBO 248 197 26 11 14 Past service cost - Plan amendments (2) - (2) - - Plan participants’ contribution 18 18 - - - Actuarial (gain) loss 132 171 (49) 7 3 Demographic assumptions (75) (57) (29) 13 (2) Financial assumptions (159) (139) (15) (10) 5 Experience adjustment 366 367 (5) 4 - Benefits paid (350) (252) (33) (43) (22) Termination benefits 6 6 - - - Foreign currency exchange rate differences and other movements 1 (286) (69) (122) (64) (31) Benefit obligation at end of the period 6,251 4,995 573 516 167

Change in plan assets Fair value of plan assets at beginning of the period 730 719 - 11 - Interest income on plan assets 28 28 - - - Return on plan assets greater/(less) than discount rate (8) (8) - - - Employer contribution 191 191 - - - Plan participants’ contribution 18 18 - - - Benefits paid (252) (250) - (2) - Foreign currency exchange rate differences and other movements (1) - - (1) - Fair value of plan assets at end of the period 706 698 - 8 -

Present value of the wholly or partly funded obligation (1,452) (1,388) - (64) - Fair value of plan assets 706 698 - 8 - Net present value of the wholly or partly funded obligation (746) (690) - (56) - Present value of the unfunded obligation (4,799) (3,607) (573) (452) (167) Net amount recognized (5,545) (4,297) (573) (508) (167)

Net assets related to funded obligations 4 4 - - - Recognized liabilities (5,549) (4,301) (573) (508) (167)

1Other movements include Steelton for (69) in benefit obligations as has been classified held for sale in December 2015.

130 Consolidated financial statements

Year Ended December 31, 2014 TOTAL U.S. CANADA EUROPE OTHERS Change in benefit obligation Benefit obligation at beginning of the period 5,974 4,390 762 614 208 Current service cost 82 39 10 23 10 Interest cost on DBO 279 210 34 20 15 Past service cost - Plan amendments (17) - (17) - - Plan participants’ contribution 18 18 - - - Curtailments and settlements (6) - - (6) - Actuarial (gain) loss 576 465 56 57 (2) Demographic assumptions 382 402 (28) 7 1 Financial assumptions 519 363 84 75 (3) Experience adjustment (325) (300) - (25) - Benefits paid (347) (248) (39) (53) (7) Foreign currency exchange rate differences and other movements (170) - (62) (78) (30) Benefit obligation at end of the period 6,389 4,874 744 577 194

Change in plan assets Fair value of plan assets at beginning of the period 740 725 - 15 - Interest income on plan assets 33 33 - - - Return on plan assets greater/(less) than discount rate 1 1 - - - Employer contribution 188 188 - - - Plan participants’ contribution 18 18 - - - Benefits paid (248) (246) - (2) - Foreign currency exchange rate differences and other movements (2) - - (2) - Fair value of plan assets at end of the period 730 719 - 11 -

Present value of the wholly or partly funded obligation (1,607) (1,530) - (77) - Fair value of plan assets 730 719 - 11 - Net present value of the wholly or partly funded obligation (877) (811) - (66) - Present value of the unfunded obligation (4,782) (3,344) (744) (500) (194) Net amount recognized (5,659) (4,155) (744) (566) (194) Consolidated financial statements 131

The following tables detail the components of net periodic other post-employment cost:

Year Ended December 31, 2015 Components of net periodic OPEB cost (benefit) TOTAL U.S. CANADA EUROPE OTHERS Current service cost 96 50 9 28 9 Past service cost - Plan amendments (2) - (2) - - Cost of termination benefits 6 6 - - - Net interest cost/(income) on net DB liability/ (asset) 220 169 26 11 14 Actuarial (gains)/losses recognized during the year (3) - - (3) - Total 317 225 33 36 23

Year Ended December 31, 2014 Components of net periodic OPEB cost (benefit) TOTAL U.S. CANADA EUROPE OTHERS Current service cost 82 39 10 23 10 Past service cost - Plan amendments (17) - (17) - - Past service cost - Curtailments (6) - - (6) - Net interest cost/(income) on net DB liability/ (asset) 246 177 34 20 15 Actuarial (gains)/losses recognized during the year 22 - - 22 - Total 327 216 27 59 25

Year Ended December 31, 2013 Components of net periodic OPEB cost (benefit) TOTAL U.S. CANADA EUROPE OTHERS Current service cost 96 41 13 26 16 Past service cost - Plan amendments 3 - - (2) 5 Past service cost - Curtailments (24) - - (24) - Net interest cost/(income) on net DB liability/ (asset) 248 174 37 21 16 Actuarial (gains)/losses recognized during the year (10) - - (10) - Total 313 215 50 11 37

The following tables detail where the expense is recognized in the consolidated statements of operations:

Year Ended December 31, 2015 2014 2013 Net periodic pension cost 241 264 357 Net periodic OPEB cost 317 327 313 Total 558 591 670

Cost of sales 197 158 193 Selling, general and administrative expenses 27 30 34 Financing costs - net 334 403 443 Total 558 591 670 132 Consolidated financial statements

Plan Assets

The weighted-average asset allocations for the funded defined benefit pension plans by asset category were as follows:

December 31, 2015 SOUTH U.S. CANADA BRAZIL EUROPE AFRICA OTHERS Equity Securities 46% 52% 3% 5% 27% 44% - Asset classes that have a quoted market price in an active market 24% 45% 3% 4% 27% 10% - Asset classes that do not have a quoted market price in an active market 22% 7% - 1% - 34% Fixed Income Securities (including cash) 38% 46% 95% 85% 61% 55% - Asset classes that have a quoted market price in an active market 5% 40% 95% 84% 61% 4% - Asset classes that do not have a quoted market price in an active market 33% 6% - 1% - 51% Real Estate - - 1% - 2% - - Asset classes that have a quoted market price in an active market - - - - 2% - - Asset classes that do not have a quoted market price in an active market - - 1% - - - Other 16% 2% 1% 10% 10% 1% - Asset classes that have a quoted market price in an active market - 2% 1% 7% 10% - - Asset classes that do not have a quoted market price in an active market 16% - - 3% - 1% Total 100% 100% 100% 100% 100% 100%

December 31, 2014 SOUTH U.S. CANADA BRAZIL EUROPE AFRICA OTHERS Equity Securities 50% 56% 4% 3% 41% 43% - Asset classes that have a quoted market price in an active market 28% 49% 4% 3% 38% 10% - Asset classes that do not have a quoted market price in an active market 22% 7% - - 3% 33% Fixed Income Securities (including cash) 34% 42% 94% 88% 58% 56% - Asset classes that have a quoted market price in an active market 3% 37% 94% 87% 57% 5% - Asset classes that do not have a quoted market price in an active market 31% 5% - 1% 1% 51% Real Estate 4% - 1% - 1% - - Asset classes that have a quoted market price in an active market - - - - 1% - - Asset classes that do not have a quoted market price in an active market 4% - 1% - - - Other 12% 2% 1% 9% - 1% - Asset classes that have a quoted market price in an active market - 2% 1% 6% - - - Asset classes that do not have a quoted market price in an active market 12% - - 3% - 1% Total 100% 100% 100% 100% 100% 100%

These assets include investments in ArcelorMittal stock of approximately 1, but not in property or other assets occupied or used by ArcelorMittal. These assets may also include ArcelorMittal shares held by mutual fund investments. The invested assets produced an actual return of 150 and 844 in 2015 and 2014, respectively.

The Finance and Retirement Committees of the Boards of Directors for the respective operating subsidiaries have general supervisory authority over the respective trust funds. These committees have established asset allocation targets for the period as described below. Asset managers are permitted some flexibility to vary the asset allocation from the long-term investment strategy within control ranges agreed upon. Consolidated financial statements 133

December 31, 2015 SOUTH U.S. CANADA BRAZIL EUROPE AFRICA OTHERS Equity Securities 52% 52% 3% 4% 34% 40% Fixed Income Securities (including cash) 35% 47% 95% 85% 55% 59% Real Estate 4% - 1% - - - Other 9% 1% 1% 11% 11% 1% Total 100% 100% 100% 100% 100% 100%

Assumptions used to determine benefit obligations at December 31

Pension Plans Other Post-employment Benefits 2015 2014 2013 2015 2014 2013 Discount rate Range 2.05% - 17% 1.90% - 17% 3.25% - 14% 0.9% - 30% 1.80% - 25% 3% - 22% Weighted average 4.21% 4.29% 5.17% 4.49% 4.05% 4.86% Rate of compensation increase Range 2% - 11% 2% - 11% 2% - 10% 2% - 27% 2% - 21% 1.80% - 20% Weighted average 3.11% 3.40% 3.66% 3.98% 3.64% 3.40%

Healthcare Cost Trend Rate

Other Post-employment Benefits 2015 2014 2013 Healthcare cost trend rate assumed Range 2.00% - 7.00% 2.00% - 5.30% 2.00% - 6.09% Weighted average 4.75% 4.80% 4.83%

Cash contributions and maturity Risks associated with defined if plan assets underperform this Life expectancy profile of the plans benefit plans yield, this will create a deficit. In most countries with funded The majority of the plans provide In 2016, the Company is expecting Through its defined benefit pension plans, plan assets hold a significant benefits for the life of the covered its cash contributions to amount plans and OPEB plans, ArcelorMittal portion of equities, which are members, so increases in life to 296 for pension plans, 281 is exposed to a number of risks, expected to outperform corporate expectancy will result in an increase for other post employment the most significant of which are bonds in the long-term while in the plans’ benefit obligations. benefits plans, 88 for defined detailed below: providing volatility and risk in the contribution plans and 71 for short-term. As the plans mature, Assumption regarding future U.S. multi-employer plans. Changes in bond yields ArcelorMittal intends to reduce mortality rates has been set Cash contributions to defined the level of investment risk by considering published statistics contribution plans and to U.S. A decrease in corporate bond investing more in assets that better and where possible, ArcelorMittal’s multi-employer plans sponsored yields will increase plan liabilities, match the liabilities. However, own population’s experience. The by the Company, were respectively although this will be partially offset ArcelorMittal believes that due current longevities at retirement 104 and 72 in 2015. by an increase in the value of the to the long-term nature of the underlying the values of the At December 31, 2015, the plans’ bond holdings. plan liabilities, a level of continuing defined benefit obligation were weighted average duration of the equity investment is an appropriate approximately 22 years. liabilities related to the pension and Asset volatility element of a long-term strategy to other post employment benefits manage the plans efficiently. In 2014, the Society of Actuaries plans were 12 years (2014: 11 The plan liabilities are calculated published new mortality base years) and 14 years (2014: 12 using a discount rate set with tables and new mortality years), respectively. reference to corporate bond yields; improvement scales in the 134 Consolidated financial statements

U.S. Use of these new mortality healthcare cost will vary based unfavorable, resulting in increasing any unfunded obligations may be assumptions resulted in increasing on several factors including the OPEB defined benefit borne by the remaining employers. the pension and OPEB defined price inflation, utilization rate, obligations by an additional 301. Additionally, if an employer benefit obligations by 85 and 271, technology advances, cost shifting withdraws from the plan, it may respectively. In 2015, the Society and cost containing mechanisms. Multi-employer plans be required to pay an amount of Actuaries updated the mortality A higher healthcare cost trend will based on the underfunded status projection scale, which resulted in lead to higher OPEB plan benefit ArcelorMittal participates in of the plan. As of December 31, decreasing the pension and OPEB obligations. one material multi-employer 2014, which is the latest period for defined benefit obligations by 36 pension plan in the U.S. Under which information is available, the and 57, respectively. In 2015, the healthcare cost multi-employer plans, several multi-employer pension plan had a trend rate assumption in the U.S. participating employers make total actuarial liability of 4,399 and Healthcare cost trend rate was adjusted, which resulted contributions into a pension assets with market value of 3,827 in increasing the OPEB defined plan. The assets of the plan are for a funded ratio of about 87%. The majority of the OPEB plans’ benefit obligations by 232. not limited to the participants ArcelorMittal represented roughly benefit obligations are linked to Additionally recent experience, of a particular employer. If an 28% of total contributions made to the change in the cost of various which is starting point for employer is unable to make the plan in the past three years. health care components. Future projecting future costs, was required contributions to the plan,

Sensitivity analysis

The following information illustrates the sensitivity to a change of the significant actuarial assumptions related to ArcelorMittal’s pension plans (as of December 31, 2015, the defined benefit obligation for pension plans was 9,883):

Effect on 2016 Pre-Tax Pension Expense (sum of service cost and Effect of December interest cost) 31, 2015 DBO Change in assumption 100 basis points decrease in discount rate (36) 1,207 100 basis points increase in discount rate 28 (990) 100 basis points decrease in rate of compensation (13) (172) 100 basis points increase in rate of compensation 15 188 1 year increase of the expected life of the beneficiaries 12 275

The following table illustrates the sensitivity to a change of the significant actuarial assumptions related to ArcelorMittal’s OPEB plans (as of December 31, 2015 the defined benefit obligation for post-employment benefit plans was 6,251):

Effect on 2016 Pre-Tax OPEB Expense (sum of service cost and Effect of December interest cost)) 31, 2015 DBO Change in assumption 100 basis points decrease in discount rate (3) 915 100 basis points increase in discount rate 2 (737) 100 basis points decrease in healthcare cost trend rate (49) (667) 100 basis points increase in healthcare cost trend rate 58 778 1 year increase of the expected life of the beneficiaries 17 320

The above sensitivities reflect 7.3 Share-based payments the effect of non market-based and adjusted for the effect of non the effect of changing one vesting conditions) at the date of market-based vesting conditions. assumption at a time. Actual ArcelorMittal issues equity- grant. The fair value determined For stock options, restricted economic factors and conditions settled share-based payments to at the grant date of the equity- share units and performance often affect multiple assumptions certain employees, including stock settled share-based payments is share units, fair value is measured simultaneously, and the effects of options, restricted share units and expensed on a graded vesting basis using the Black-Scholes-Merton changes in key assumptions are performance share units. Equity- over the vesting period, based on pricing model and the market not necessarily linear. settled share-based payments are the Company’s estimate of the value of the shares at the date measured at fair value (excluding shares that will eventually vest of the grant after deduction of Consolidated financial statements 135

dividend payments during the value determined at the grant date Global Stock Option Plan. granted at the discretion of vesting period, respectively. The of the equity-settled share-based Under the terms of the ArcelorMittal’s Appointments, expected life used in the model payments is expensed on a straight ArcelorMittal Global Stock Option Remuneration and Corporate has been adjusted, based on line method over the vesting period Plan 2009-2018 (which replaced Governance Committee, or its management’s best estimate, for and adjusted for the effect of non the ArcelorMittalShares plan that delegate. The options vest either the effects of non-transferability, market-based vesting conditions. expired in 2009), ArcelorMittal ratably upon each of the first three exercise restrictions and behavioral may grant options to purchase anniversaries of the grant date, or, considerations. In addition, the Stock Option Plans common shares to senior in total, upon the death, disability expected annualized volatility management of ArcelorMittal and or retirement of the participant. has been set by reference to Prior to the May 2011 annual its associates for up to 100,000,000 the implied volatility of options general shareholders’ meeting shares of common shares. The available on ArcelorMittal shares adoption of the ArcelorMittal exercise price of each option in the open market, as well as, Equity Incentive Plan described equals not less than the fair market historical patterns of volatility. below, ArcelorMittal’s equity-based value of ArcelorMittal shares on For the restricted share units and incentive plan took the form of a the grant date, with a maximum performance share units, the fair stock option plan known as the term of 10 years. Options are

Dates of grant and exercise prices are as follows:

Exercise prices Date of grant (per option) August 2010 $30.66 August 2009 36.38 November 2008 21.14 August 2008 78.44 December 2007 70.81 August 2007 61.09 September 2006 32.07

No options were granted during the years ended December 31, 2015, 2014 and 2013.

The compensation expense recognized for stock option plans was nil, nil and 5 for each of the years ended December 31, 2015, 2014, and 2013, respectively. Option activity with respect to ArcelorMittalShares and ArcelorMittal Global Stock Option Plan 2009-2018 is summarized below as of and for each of the years ended December 31, 2015, 2014, and 2013:

Range of Weighted Exercise Average Number of Prices Exercise Price Options (per option) (per option) Outstanding, December 31, 2012 24,950,319 $21.14 – $78.44 $47.85 Forfeited (139,993) 30.66 – 78.44 40.54 Expired (3,246,700) 21.14 – 78.44 45.80 Outstanding, December 31, 2013 21,563,626 21.14 – 78.44 48.31 Expired (1,486,360) 27.31– 78.44 48.96 Outstanding, December 31, 2014 20,077,266 21.14 – 78.44 48.26 Expired (2,885,194) 27.31– 78.44 41.75 Outstanding, December 31, 2015 17,192,072 21.14 – 78.44 49.35

Exercisable, December 31, 2013 21,563,626 21.14 – 78.44 48.31 Exercisable, December 31, 2014 20,077,266 21.14 – 78.44 48.26 Exercisable, December 31, 2015 17,192,072 21.14 – 78.44 49.35 136 Consolidated financial statements

The following table summarizes information about total stock options of the Company outstanding as of December 31, 2015:

Options Outstanding Weighted average Options Number of contractual life exercisable Exercise Prices (per option) options (in years) (number of options) Maturity $30.66 4,256,800 4.60 4,256,800 August 3, 2020 36.38 4,093,450 3.60 4,093,450 August 4, 2019 21.14 2,585 2.87 2,585 November 10, 2018 78.44 4,218,950 2.60 4,218,950 August 5, 2018 70.81 13,000 1.95 13,000 December 11, 2017 61.09 3,080,335 1.59 3,080,335 August 2, 2017 32.07 1,526,952 0.67 1,526,952 September 1, 2016 $21.14 – $78.44 17,192,072 2.98 17,192,072

Long-Term Incentives: Equity- shareholders’ meeting to the May Executive Officer and other GMB to be actively employed by the Based Incentives (Share Unit Plans) 2016 annual general shareholders’ members receive PSU grants under Group on that date. If the GMB meeting, a maximum of 5,000,000 the GMB PSU Plan instead of the member is retired on that date or On May 10, 2011, the annual RSUs and PSUs may be allocated ArcelorMittal Equity Incentive Plan. in case of an early retirement by general meeting of shareholders to eligible employees under the mutual consent, the relevant GMB approved the ArcelorMittal Equity ArcelorMittal Equity Incentive Plan PSUs vest three years after their member will not automatically Incentive Plan, a new equity-based and the GMB PSU Plan combined. date of grant subject to the eligible forfeit PSUs and pro rata vesting incentive plan that replaced the employee’s continued employment will be considered at the end Global Stock Option Plan. The ArcelorMittal Equity Incentive Plan with the Company and the of the vesting period at the ArcelorMittal Equity Incentive Plan fulfillment of targets related to the sole discretion of the Company, is intended to align the interests RSUs granted under the following performance measures: represented by the Appointment, of the Company’s shareholders ArcelorMittal Equity Incentive return on capital employed (ROCE) Remuneration and Corporate and eligible employees by allowing Plan are designed to provide a and a strategic measure which Governance Committee of the them to participate in the success retention incentive to eligible was total cost of employment Board of Directors. Awards under of the Company. The ArcelorMittal employees. RSUs are subject to (in U.S. dollars per tonne) for the the GMB PSU Plan are subject Equity Incentive Plan provides for “cliff vesting” after three years, steel business (TCOE) and the to the fulfillment of cumulative the grant of Restricted Share Units with 100% of the grant vesting on mining volume plan and ROCE for performance criteria over a three- (each, an “RSU”) and Performance the third anniversary of the grant the Mining segment until 2013 year period from the date of the Share Units (each, a “PSU”) to contingent upon the continued grant. As from 2014, most of PSU grant. The value of the grant eligible Company employees and is active employment of the eligible the Steel Business Units have at grant date will equal one year of designed to incentivize employees, employee within the Company. kept only ROCE as performance base salary for the Chief Executive improve the Company’s long- Between 500 and 700 of the measure and Mining continued Officer and 80% of base salary for term performance and retain key Company’s most senior managers with ROCE and mining volume the other GMB members. Each employees. On May 8, 2013, are eligible for RSUs. plan. Each performance measure PSU may give right to up to two the annual general meeting of has a weighting of 50%. In case shares of the Company. The two shareholders approved the GMB The grant of PSUs under the level of achievement of both performance criteria required to PSU Plan, which provides for the the ArcelorMittal Equity performance targets together is be met for PSUs to vest are total grant of PSUs to GMB members. Incentive Plan aims to serve below 80%, there is no vesting, shareholder return and earnings Until the introduction of the GMB as an effective performance- and the rights are automatically per share. PSU Plan in 2013, GMB members enhancing scheme based on forfeited. were eligible to receive RSUs and the employee’s contribution to PSUs under the ArcelorMittal the eligible achievement of the GMB PSU Plan Equity Incentive Plan. Company’s strategy. Awards in connection with PSUs are subject The GMB PSU Plan is designed The maximum number of RSUs to the fulfillment of cumulative to enhance the long-term and PSUs available for grant during performance criteria over a three- performance of the Company and any given year is subject to the year period from the date of the align the members of the GMB prior approval of the Company’s PSU grant. The employees eligible to the Company’s objectives. The shareholders at the annual general to receive PSUs are a sub-set of members of the GMB including the meeting. The annual shareholders’ the group of employees eligible to Chief Executive Officer are eligible meeting on May 5, 2015 approved receive RSUs. The target group for for PSU grants. The GMB PSU Plan the maximum to be granted until PSU grants initially included the provides for cliff vesting on the the next annual shareholders’ Chief Executive Officer and the third year anniversary of the grant meeting. For the period from other GMB members. However, date, under the condition that the the May 2015 annual general from 2013 onwards, the Chief relevant GMB member continues Consolidated financial statements 137

The following table summarizes the Company’s share unit plans outstanding as of December 31, 2015:

At Grant date Number of shares as of December 31, 2015 Number of Grant date Type of plan Number of shares beneficiaries Maturity Fair value per share Shares outstanding Shares exited Shares forfeited December 18, 2015 PSU 887,643 322 December 18, 2018 $3.83 887,643 - - December 18, 2015 RSU 1,105,361 576 December 18, 2018 3.83 1,105,361 - - June 30, 2015 GMB PSU 464,305 4 June 30, 2018 8.53 464,305 - - December 17, 2014 PSU 979,870 353 December 17, 2017 10.28 906,370 - 73,500 December 17, 2014 RSU 1,173,910 620 December 17, 2017 10.28 1,091,152 741 82,017 June 27, 2014 GMB PSU 843,376 6 June 27, 2017 16.85 767,746 - 75,630 September 27, 2013 PSU 504,075 384 September 27, 2016 13.17 412,720 - 91,355 September 27, 2013 RSU 1,065,415 682 September 27, 2016 13.17 903,246 13,143 149,026 June 28, 2013 GMB PSU 631,077 7 June 28, 2016 16.60 542,632 - 88,445 March 29, 2013 PSU 182,970 94 March 29, 2016 12.37 130,155 - 52,815 March 29, 2013 RSU 1,071,190 681 March 29, 2016 12.37 861,419 20,438 189,333 Total 8,909,192 $3.83 – $16.85 8,072,749 34,322 802,121

The compensation expenses recognized for RSUs and PSUs were immaterial for the years ended December 31, 2015, 2014 and 2013.

Share unit plan activity is summarized below as of and for each year ended December 31, 2015, 2014 and 2013:

Restricted share unit (RSU) Performance share unit (PSU) Number of shares Fair value per share Number of shares Fair value per share Outstanding, December 31, 2012 1,242,753 $14.45 262,665 $16.87 Granted 2,136,605 12.77 1,318,122 14.70 Exited (14,788) 14.35 – – Forfeited (120,904) 13.92 (53,640) 15.85 Outstanding, December 31, 2013 3,243,666 13.36 1,527,147 15.03 Granted 1,173,910 10.28 1,823,246 13.32 Exited (777,252) 14.43 – – Forfeited (230,718) 13.27 (90,215) 14.27 Outstanding, December 31, 2014 3,409,606 12.06 3,260,178 14.10 Granted 1,105,361 3.83 1,351,948 5.44 Exited (321,980) 14.30 (24,721) 16.87 Forfeited (231,809) 11.90 (475,834) 15.20 Outstanding, December 31, 2015 3,961,178 9.59 4,111,571 11.11

Note 8: Provisions, contingencies If the effect of the time value assets and contingent liabilities are are tested for impairment before and commitments of money is material, provisions excluded from recognition in the recognizing a separate provision for are discounted using a current statements of financial position. the onerous contract. ArcelorMittal recognizes provisions pre-tax rate that reflects, where for liabilities and probable appropriate, the risks specific to the Provisions for onerous contracts Provisions for restructuring are losses that have been incurred liability. Where discounting is used, are recorded in the consolidated recognized when and only when when it has a present legal or the increase in the provision due to statements of operations when a detailed formal plan exists and a constructive obligation as a result the passage of time is recognized it becomes known that the valid expectation in those affected of past events, it is probable that as a financing cost. Future unavoidable costs of meeting the by the restructuring has been the Company will be required operating expenses or losses are obligations under the contract raised, by starting to implement to settle the obligation and a excluded from recognition as exceed the economic benefits the plan or announcing its main reliable estimate of the amount provisions as they do not meet the expected to be received. Assets features. of the obligation can be made. definition of a liability. Contingent dedicated to the onerous contracts 138 Consolidated financial statements

ArcelorMittal records asset probable and the cost can be variables associated with these probable loss and has accrued retirement obligations (“ARO”) reasonably estimated based on judgments and assumptions, a provision for such loss, but initially at the fair value of the legal ongoing engineering studies, and the effects of changes in believes that publication of this or constructive obligation in the discussions with the environmental governmental regulation and information on a case-by-case period in which it is incurred and authorities and other assumptions environmental technologies, basis would seriously prejudice capitalizes the ARO by increasing relevant to the nature and extent both the precision and reliability the Company’s position in the the carrying amount of the related of the remediation that may be of the resulting estimates of the ongoing legal proceedings non-current asset. The fair value required. The ultimate cost to related contingencies are subject or in any related settlement of the obligation is determined ArcelorMittal is dependent upon to substantial uncertainties. As discussions. Accordingly, in these as the discounted value of the factors beyond its control such as estimated costs to remediate cases, the Company has disclosed expected future cash flows. The the scope and methodology of the change, the Company will reduce information with respect to the liability is accreted to its present remedial action requirements to or increase the recorded liabilities nature of the contingency, but has value through net financing be established by environmental through write backs or additional not disclosed its estimate of the cost and the capitalized cost is and public health authorities, new accruals in the consolidated range of potential loss. depreciated in accordance with the laws or government regulations, statements of operations. Company’s depreciation policies rapidly changing technology and ArcelorMittal does not expect In the cases in which quantifiable for property, plant and equipment. the outcome of any potential these environmental issues to fines and penalties have been Subsequently, when reliably related litigation. Environmental affect the utilization of its plants, assessed, the Company has measurable, ARO is recorded on liabilities are discounted if the now or in the future. indicated the amount of such the consolidated statements of aggregate amount of the obligation fine or penalty or the amount financial position increasing the and the amount and timing of the ArcelorMittal is currently and of provision accrued that is the cost of the asset and the fair value cash payments are fixed or reliably may in the future be involved in estimate of the probable loss. of the related obligation. Foreign determinable. litigation, arbitration or other legal exchange gains or losses on AROs proceedings. Provisions related to These assessments can involve a denominated in foreign currencies The estimates of loss contingencies legal and arbitration proceedings series of complex judgments about are recorded in the consolidated for environmental matters and are recorded in accordance with the future events and can rely heavily statements of operations. other contingencies are based on principles described above. on estimates and assumptions. various judgments and assumptions The assessments are based on ArcelorMittal is subject to including the likelihood, nature, Most of these claims involve estimates and assumptions that changing and increasingly stringent magnitude and timing of highly complex issues. Often these have been deemed reasonable environmental laws and regulations assessment, remediation and/ issues are subject to substantial by management. The Company concerning air emissions, water or monitoring activities and the uncertainties and, therefore, believes that the aggregate discharges and waste disposal, probable cost of these activities. the probability of loss and an provisions recorded for the above as well as certain remediation In some cases, judgments and estimation of damages are difficult matters are adequate based upon activities that involve the clean- assumptions are made relating to to ascertain. Consequently, for currently available information. up of soil and groundwater. the obligation or willingness and a large number of these claims, However, given the inherent ArcelorMittal is currently engaged ability of third parties to bear a ArcelorMittal is unable to make uncertainties related to these in the investigation and remediation proportionate or allocated share of a reasonable estimate of the cases and in estimating contingent of environmental contamination at cost of these activities, including expected financial effect that will liabilities, the Company could, in a number of its facilities. Most of third parties who sold assets to result from ultimate resolution of the future, incur judgments that these are legacy obligations arising ArcelorMittal or purchased assets the proceeding. In those cases, have a material adverse effect from acquisitions. from it subject to environmental ArcelorMittal has disclosed on its results of operations in any liabilities. ArcelorMittal also information with respect to particular period. The Company Environmental costs that relate considers, among other things, the nature of the contingency. considers it highly unlikely, to current operations or to an the activity to date at particular ArcelorMittal has not accrued a however, that any such judgments existing condition caused by sites, information obtained through reserve for the potential outcome could have a material adverse past operations, and which do consultation with applicable of these cases. effect on its liquidity or financial not contribute to future revenue regulatory authorities and third- condition. generation or cost reduction, are party consultants and contractors In a limited number of ongoing expensed. Liabilities are recorded and its historical experience with cases, the Company was able when environmental assessments other circumstances judged to be to make a reasonable estimate and/or remedial efforts are comparable. Due to the numerous of the expected loss or range of Consolidated financial statements 139

8.1 Provisions overview

The movements of provisions were as follows:

Balance at Effects of Foreign December 31, Deductions/ Exchange and other Balance at December 2013 Additions (*) Payments movements 31, 2014 Environmental (see note 8.2) 915 81 (98) (43) 855 Asset retirement obligations (see note 8.2) 516 41 (8) (244) 1 305 Site restoration 75 3 (22) (10) 46 Staff related obligations 169 77 (38) (18) 190 Voluntary separation plans 138 27 (97) 85 153 Litigation and other (see note 8.2) 954 144 (281) (59) 758 Tax claims 355 47 (86) (45) 271 Other legal claims 299 97 (93) (14) 289 Other unasserted claims 300 - (102) - 198 Commercial agreements and onerous contracts 93 92 (43) (20) 122 Other 229 52 (86) (13) 182 3,089 517 (673) (322) 2,611 Short-term provisions 1,206 1,024 Long-term provisions 1,883 1,587 3,089 2,611

Balance at Effects of Foreign December 31, Deductions/ Exchange and other Balance at December 2014 Additions (*) Payments movements 31, 2015 Environmental (see note 8.2) 855 35 (96) (97) 697 Asset retirement obligations (see note 8.2) 305 26 (5) (29) 297 Site restoration 46 37 (23) 4 64 Staff related obligations 190 56 (36) (43) 167 Voluntary separation plans 153 48 (83) (21) 97 Litigation and other (see note 8.2) 758 162 (329) (128) 2 463 Tax claims 271 22 (36) (68) 189 Other legal claims 289 140 (100) (60) 269 Other unasserted claims 198 - (193) 3 - 5 Commercial agreements and onerous contracts 122 245 (81) (13) 273 Other 182 53 (63) (26) 146 2,611 662 (716) (353) 2,204 Short-term provisions 1,024 1,434 Long-term provisions 1,587 770 2,611 2,204 (*) Additions exclude provisions written back or utilized during the same year 1 Effects of foreign exchange and other movements in 2014 are mainly related to depreciation of local currencies for 144 primarily in Russia (42) and Ukraine (79) and disposal of Kuzbass (54). 2 Effects of foreign exchange and other movements in 2015 are mainly related to the depreciation of local currencies primarily in Brazil (104). 3 The provision presented as “Other unasserted claims” relates to a commercial dispute in respect of which no legal action has commenced. The Company recognized a release of 193 in 2015 following the expiration of the statute of limitations. 140 Consolidated financial statements

There are uncertainties regarding 8.2 Environmental liabilities and sites in the United States are or Corrective Measures Study, to the timing and amount of the legal proceedings may be subject to a corrective implement appropriate interim provisions above. Changes action program or other laws and final remedial measures, and in underlying facts and Environmental Liabilities and regulations relating to to perform required post-remedial circumstances for each provision environmental remediation, closure activities. In 2006, the could result in differences in ArcelorMittal’s operations are including projects relating to the New York State Department of the amounts provided for and subject to a broad range of laws reclamation of industrial properties. Environmental Conservation and the actual outflows. In general, and regulations relating to the In some cases, soil or groundwater the EPA conditionally approved provisions are presented on a protection of human health contamination requiring the RFI. ArcelorMittal USA has non-discounted basis due to and the environment at its remediation is present at both executed Orders on Consent to the uncertainties regarding the multiple locations and operating currently operating and former perform certain interim corrective timing or the short period of their subsidiaries. As of December 31, ArcelorMittal facilities. In other measures while advancing the expected consumption. 2015, excluding asset retirement cases, we are required to conduct Corrective Measures Study. These obligations, ArcelorMittal had studies to determine the extent of include installation and operation Environmental provisions have established provisions of 697 for contamination, if any, that exists at of a ground water treatment been estimated based on internal environmental remedial activities these sites. system and dredging of a local and third-party estimates and liabilities. The provisions for waterway known as Smokes Creek. of contaminations, available all operations by geographic In 1990, ArcelorMittal USA’s A Corrective Measure Order on remediation technology, and area were 431 in Europe, 140 in Indiana Harbor East facility was Consent was executed in 2009 for environmental regulations. the United States, 95 in South party to a lawsuit filed by the other site remediation activities. Estimates are subject to revision Africa and 31 in Canada. In U.S. Environmental Protection ArcelorMittal USA’s provisions for as further information develops or addition, ArcelorMittal and the Agency (the “EPA”) under the environmental liabilities include circumstances change. previous owners of its facilities U.S. Resource Conservation approximately 33 for anticipated have expended substantial and Recovery Act (“RCRA”). In remediation and post-remediation Provisions for site restoration amounts to achieve or maintain 1993, activities at this site. are related to costs incurred for ongoing compliance with (predecessor to ArcelorMittal The provisioned amount is based on dismantling of site facilities, mainly applicable environmental laws and USA) entered into a Consent the extent of soil and groundwater in France and in the United States. regulations. ArcelorMittal expects Decree, which, among other contamination identified by the RFI to continue to expend resources in things, requires facility-wide RCRA and the remedial measures likely to Provisions for staff related this respect in the future. Corrective Action and sediment be required, including excavation obligations primarily concern the assessment and remediation in and consolidation of containment United States and Brazil and are United States the adjacent Indiana Harbor Ship structures in an on-site landfill and related to various employees’ Canal. In 2012, ArcelorMittal USA continuation of groundwater pump compensation. ArcelorMittal’s operations entered into a Consent Decree and treatment systems. in the United States have Amendment to the 1993 Consent Provisions for voluntary separation environmental provisions of 140 Decree defining the objectives ArcelorMittal USA is required to plans concern primarily plans (exclusive of asset retirement for limited sediment assessment prevent acid mine drainage from in Belgium, South Africa, the obligations) to address existing and remediation of a small portion discharging to surface waters United States and Spain which environmental liabilities, of of the Indiana Harbor Ship Canal. at its closed mining operations are expected to be settled within which 20 is expected to be spent The provisions for environmental in southwestern Pennsylvania. one year. In 2015 new voluntary in 2016. The environmental liabilities include approximately In 2003, ArcelorMittal USA separation plans were announced in provisions principally relate to 10 for such sediment assessment entered into a Consent Order and the United States (19) and in South the investigation, monitoring and remediation, and 5 for Agreement with the Pennsylvania Africa (27). and remediation of soil and RCRA Corrective Action at the Department of Environmental groundwater at ArcelorMittal’s Indiana Harbor East facility itself. Protection (the “PaDEP”) requiring Provisions for litigation are related current and former facilities. Remediation ultimately may be submission of a plan to improve to probable losses that will be ArcelorMittal USA continues to necessary for other contamination treatment facility operations and incurred due to a present legal have significant environmental that may be present at Indiana lower long-term wastewater obligation and are expected to be provisions relating to investigation Harbor East, but the potential costs treatment costs. In 2004, settled in a period of one to four and remediation at Indiana of any such remediation cannot yet ArcelorMittal USA entered into years. Further detail regarding legal Harbor East, Lackawanna, and be reasonably estimated. a revised Consent Order and matters is provided in note 8.2. its closed mining operations Agreement outlining a schedule in southwestern Pennsylvania. ArcelorMittal USA’s properties in for implementation of capital The provision for onerous contracts ArcelorMittal USA’s environmental Lackawanna, New York are subject improvements and requiring the in 2015 mainly includes onerous provisions also include 35, with to an Administrative Order on establishment of a treatment trust, hot and cold rolled contracts in the anticipated spending of 4 during Consent with the EPA requiring estimated by the PaDEP to be United States. 2016, to specifically address facility-wide RCRA Corrective the net present value of all future the removal and disposal of Action. The Administrative treatment cost. ArcelorMittal USA Other mainly includes provisions asbestos-containing materials and Order, entered into in 1990 by has been funding the treatment for technical warranties and polychlorinated biphenyls (“PCBs”). the former owner, Bethlehem trust and has until 2017 to guarantees. Steel, requires the Company to reach the current target value All of ArcelorMittal’s major perform a Remedial Facilities of approximately 46. This target operating and former operating Investigation (“RFI”) and a value is based on average spending Consolidated financial statements 141

over the last three years. The of penalties, currently estimated health and safety regulations. principally relates to ground trust had a market value of 36 at 6 and a three year compliance remediation at the Le Creusot site as of December 31, 2015. Once schedule for Indiana Harbor France and to the rehabilitation of waste fully funded, ArcelorMittal can be East non-compliance. Efforts to disposal areas at the Châteauneuf reimbursed from the fund for the mitigate the total penalty to be In France, there is an environmental site. continuing cost of treatment of paid by proposing a supplemental provision of 83, principally acid mine drainage. ArcelorMittal environmental proposal are also relating to the remediation of Belgium USA’s provisions for environmental being explored former sites, including several liabilities include approximately 24 coke plants, and the capping and In Belgium, there is an for this matter. In 2014, the ArcelorMittal monitoring of landfills or basins environmental provision of 228 Monessen coke plant was re- previously used for residues of which the most significant On August 8, 2006, the U.S. EPA started after having been idled and secondary materials. The elements are legal site remediation Region V issued ArcelorMittal USA’s since 2008. Since re-start, state remediation of the coke plants obligations linked to the closure Burns Harbor, Indiana facility a regulatory authorities (“PADEP”) concerns mainly the Thionville, of the primary installations at Notice of Violation (“NOV”) alleging issued numerous NOVs, the Moyeuvre Grande, Homecourt, ArcelorMittal Belgium (Liège). The multiple violations of the Clean majority of which concern Clean Hagondange and Micheville sites, provisions also concern the external Air Act’s Prevention of Significant Air Act violations. U.S. EPA Region and is related to treatment of soil recovery and disposal of waste, Deterioration (“PSD”) air permit 3 also issued an NOV and, in and groundwater. At Moyeuvre residues or by-products that requirements based on alleged addition, issued an information Petite, the recovery of the slag is cannot be recovered internally on failures by dating request seeking detailed testing almost complete and ArcelorMittal the ArcelorMittal Gent and Liège back to early 1994. Based on and information concerning is responsible for closure and final sites and the removal and disposal recent court decisions and ongoing air compliance related issues. rehabilitation of the site. At other of asbestos-containing material. negotiations with the U.S. EPA, it PADEP issued a proposed penalty sites, ArcelorMittal is responsible is very likely that the US EPA will assessment of $780,100 for for monitoring the concentration Luxembourg not enforce the alleged PSD permit alleged violations occurring from of heavy metals in soil and violations by Bethlehem Steel April, 2014 thru May, 2015. groundwater. Provisions in France In Luxembourg, there is an against ArcelorMittal USA. The Additional penalties may be also cover the legal site obligations environmental provision of U.S. EPA Region V also conducted forthcoming and are expected to linked to the closure of the steel approximately 57, which relates to a series of inspections and issued be negotiated and addressed in plant and rolling mill at Gandrange the post-closure monitoring and information requests under the Consent Decree negotiations with as well as of the wire mill in Lens. remediation of former production Federal Clean Air Act relating to PADEP and U.S. EPA enforcement sites, waste disposal areas, slag the Burns Harbor, Indiana Harbor officials. In addition, a Citizens Suit ArcelorMittal Atlantique et Lorraine deposits and mining sites. and Cleveland facilities. Some of was filed by a local environmental has an environmental provision the EPA’s information requests group under the Clean Air Act that principally relates to the In 2007, ArcelorMittal Luxembourg and subsequent allegations alleging that local residents were remediation and improvement of sold the former Ehlerange slag relate to recent operations while being impacted by many of the storage of secondary materials, deposit (93 hectares) to the State others relate to historical actions issues reflected in the outstanding the disposal of waste at different of Luxembourg. ArcelorMittal under former facility owners that NOVs. ponds and landfills and an action Luxembourg is contractually occurred 14 to 28 years ago. plan for removing asbestos from liable to clean the site and move In October 2011, the U.S. EPA Europe the installations and mandatory approximately 530,000 cubic issued NOVs to Indiana Harbor financial guarantees to cover risks meters of material to other sites. West, Indiana Harbor East, Indiana Environmental provisions for of major accident hazard or for ArcelorMittal Luxembourg also Harbor Long Carbon, Burns ArcelorMittal’s operations in gasholders and waste storage. has an environmental provision Harbor and Cleveland alleging Europe total 431 and are mainly Most of the provision relates to to secure, stabilize and conduct operational noncompliance based related to the investigation and the stocking areas at the Dunkirk waterproofing treatment on mining primarily on self-reported Title remediation of environmental site that will need to be restored galleries and entrances and various V permit concerns. Compliance contamination at current and to comply with local law and to dumping areas in Monderçange, data relating to the self-reported former operating sites in France the mothballing of the liquid phase Dudelange, Differdange and items indicate that ArcelorMittal’s (83), Belgium (228), Luxembourg in Florange, including study and Dommeldange. The environmental operations consistently achieve (57), Poland (26), Germany (22), surveillance of soil and water to provision also relates to substantial rates of compliance Czech Republic (8) and Spain (5). prevent environmental damage, elimination of blast furnace dust with applicable permits and This investigation and remediation treatment and elimination of and remediation of the soil to regulations. Comprehensive work relates to various matters waste and financial guarantees accommodate the expansion of settlement discussions with such as decontamination of water demanded by Public Authorities. the city of Esch-sur-Alzette. Other the U.S. EPA and affected state discharges, waste disposal, cleaning The environmental provisions also environmental provisions concern agencies involving all of the NOVs water ponds and remediation include treatment of slag dumps the cleaning of the Belval Blast are ongoing and a comprehensive activities that involve the clean- at Florange and Dunkirk sites as Furnace water pond and former settlement with the U.S. EPA, up of soil and groundwater. These well as removal and disposal of production sites. A provision of which is anticipated to encompass provisions also relate to human asbestos-containing material at the approximately 47 covers these self-reported deviations through health protection measures such Dunkirk and Mardyck sites. obligations. December 31, 2015 is being as fire prevention and additional finalized for execution in 2016. The contamination prevention Industeel France has an ArcelorMittal Belval and settlement will include payment measures to comply with local environmental provision that Differdange has an environmental 142 Consolidated financial statements

provision of approximately 4 to South Africa ArcelorMittal South Africa, the the iron ore mining site in Kryvyi clean historical landfills in order above retirement and remediation Rih, upon closure of the mine to meet the requirements of ArcelorMittal South Africa has actions dovetail with numerous pursuant to its restoration plan. the Luxembourg Environment environmental provisions of large capital expenditure projects Administration. approximately 95 to be used dedicated to environmental The AROs in Canada are legal over 13 years, mainly relating management. In the case of the obligations for site restoration and ArcelorMittal Bissen & to environmental remediation Newcastle site, the major current dismantling of the facilities near Bettembourg has an environmental obligations attributable to historical environmental capital project is for the mining sites in Mont-Wright provision of approximately 2 or legacy settling/evaporation water treatment. and Fire Lake, and at the facility to clean historical impact of dams and waste disposal activities. of Port-Cartier in Quebec, upon former activity to meet the legal An important determinant in the A provision of 29 relates to the closure of the mine pursuant to the obligations. final timing of the remediation environmental rehabilitation of the restoring plan of the mines. work relates to the obtaining of Thabazimbi Mine. Poland the necessary environmental The AROs in the United States authorizations. The remainder of the obligation principally relate to mine closure ArcelorMittal Poland S.A.’s of approximately 6 relates to costs of the Hibbing and Minorca environmental provision of 26 Approximately 24 of the provision Vereeniging site for the historical iron ore mines and Princeton coal mainly relates to the obligation relates to the decommissioned pollution that needs to be mines. to reclaim a landfill site and to Pretoria Works site. This site is in remediated at waste disposal dispose of the residues which a state of partial decommissioning sites, waste water dams and The AROs in Mexico relate to the cannot be internally recycled or and rehabilitation with one coke groundwater tables. restoration costs following the externally recovered. The provision battery and a small-sections closure of the Las Truchas and El also concerns the storage and rolling facility still in operation. Canada Volcan and the joint operation of disposal of iron-bearing sludge ArcelorMittal South Africa is in Pena Colorada iron ore mines. which cannot be reused in the the process of transforming this In Canada, ArcelorMittal Dofasco manufacturing process. old plant into an industrial hub has an environmental provision of In Belgium, the AROs are to cover for light industry, a process that approximately 20 for the expected the demolition costs for primary Germany commenced in the late 1990s. cost of remediating toxic sediment facilities at the Liège sites. Particular effort is directed to located in the Company’s East In Germany, the environmental landfill sites, with sales of slag Boatslip site, and a provision of In Germany, AROs principally relate provision of 22 essentially from legacy disposal sites to approximately 4 for the expected to the Hamburg site, which is relates to ArcelorMittal Bremen’s vendors in the construction cost of remediating environmental operating on leased land with the post-closure obligations mainly industry continuing unabated and issues at the former Sherman iron contractual obligation to remove all established for soil remediation, encouraging progress being made ore mine in Ontario once operated buildings and other facilities upon groundwater treatment and at the Mooiplaats site. However, and managed by Dofasco (closed the termination of the lease, and to monitoring at the Prosper coke remediation actions for these sites in 1990). ArcelorMittal Montreal the Prosper coke plant in Bottrop plant in Bottrop. are long-term in nature due to a has an environmental provision of for filling the basin, restoring the complex legal process that needs approximately 7 for future disposal layer and stabilizing the shoreline at Czech Republic to be followed. of sludge left in ponds after flat the harbor. mills closure at Contrecoeur. In the Czech Republic, there is The Vanderbijlpark Works site, The AROs in South Africa are an environmental provision of which is the main flat carbon steel Asset Retirement Obligations for the Pretoria, Vanderbijlpark, 8, which essentially relates to operation of the South Africa (“AROs”) Coke and Chemical sites, and the post-closure dismantling of unit and has been in operation relate to the closure and clean- buildings and soil remediation at for more than 72 years, contains AROs arise from legal requirements up of the plant associated with the corresponding areas of the a number of legacy facilities and represent management’s best decommissioned tank farms, tar Ostrava site. and areas requiring remediation. estimate of the present value of plants, chemical stores, railway The remediation entails the the costs that will be required lines, pipelines and defunct Spain implementation of rehabilitation to retire plant and equipment or infrastructure. and decontamination measures of to restore a site at the end of In Spain, ArcelorMittal España waste disposal sites, waste water its useful life. As of December In Brazil, the AROs relate to legal has environmental provisions of dams, ground water and historically 31, 2015, ArcelorMittal had obligations to clean and restore 5 due to obligations of sealing contaminated open areas. established provisions for asset the mining areas of Serra Azul landfills located in the Approximately 18 of the provision retirement obligations of 297, and Andrade, both located in site and post-closure obligations is allocated to this site. including 38 for Ukraine, 76 for the State of Minas Gerais. The in accordance with national Canada, 46 for the United States, related provisions are expected legislation. These obligations The Newcastle Works site is the 45 for Mexico, 19 for Belgium, 30 to be settled in 2025 and 2029, include the collection and main long carbon steel operation for Germany, 12 for South Africa, respectively. treatment of leachates that can be of the South Africa unit that has 6 for Brazil, 11 for Kazakhstan and generated during the operational been in operation for more than 14 for Liberia. In Kazakhstan, the AROs relate to phase and a period of 30 years 36 years. Approximately 19 of the restoration obligations of the after the closure. the provision is allocated to this The AROs in Ukraine are legal iron ore and coal mines. site. As with all operating sites of obligations for site rehabilitation at Consolidated financial statements 143

In Liberia, the AROs relate to August 8, 2012, the administrative expenses related to pre-export VAT may be deducted from the iron ore mine and associated tribunal of the second instance financing used to finance the MTO, base amount on which the Cofins infrastructure and mine related found in favor of ArcelorMittal which were deemed by the tax and Pis taxes are calculated), in environmental damage and invalidating the tax assessment, authorities to be unnecessary an amount of approximately 4. compensation. They cover the thereby ending this case. On April for ArcelorMittal Brasil since the ArcelorMittal Brasil deposited closure and rehabilitation plan 16, 2011, ArcelorMittal Brasil expenses were incurred to buy the disputed amount in escrow under both the current operating received a further tax assessment shares of its own company and with the relevant Brazilian judicial phase and the not yet completed for the periods of March, June (iv) CSL over profits of controlled branch when it became due. Since Phase 2 expansion project. and September 2007, which, companies in Argentina and Costa the principal amount bears interest taking into account interest and Rica. The amount claimed totals at a rate applicable to judicial Tax Claims currency fluctuations, amounted 438. On January 31, 2014, the deposits, the amount stood at 43 to 138 as of December 31, 2015. administrative tribunal of first as of December 31, 2015. ArcelorMittal is a party to various ArcelorMittal Brasil filed its defense instance found in partial favor tax claims. As of December 31, in April 2011. In October 2011, of ArcelorMittal Brasil, reducing In April 2014, Comércio Exterior 2015, ArcelorMittal had recorded the administrative tribunal of first the penalty component of the S.A. (“Comex”), a Brazilian provisions in the aggregate of instance upheld the tax assessment assessment from, according to subsidiary of ArcelorMittal, approximately 189 for tax claims received by ArcelorMittal Brazil on ArcelorMittal Brasil’s calculations, received a tax assessment in the in respect of which it considers the April 16, 2011, but decided that 266 to 141 (as calculated at the amount of 51 concerning certain risk of loss to be probable. Set out no penalty (amounting to 77 at time of the assessment), while deductions made by Comex in below is a summary description that time) was due. Both parties upholding the remainder of the relation to the Fundap financial of the tax claims (i) in respect of have filed an appeal with the assessment. The Brazilian Federal tax incentive; the Brazilian Federal which ArcelorMittal had recorded administrative tribunal of second Revenue Service has appealed the Revenue Service considers that a provision as of December instance. administrative tribunal’s decision to Comex owes corporate income 31, 2015, (ii) that constitute a reduce the amount of the original tax (known as IRPJ) and social contingent liability, or (iii) that In 2011, SOL Coqueria Tubarão penalty. ArcelorMittal Brasil has contributions on net profits (known were resolved in 2015, in each S.A. received 21 tax assessments also appealed the administrative as CSL) on the amounts deducted. case involving amounts deemed from the Revenue Service of the tribunal’s decision to uphold the tax Comex filed its defense in June material by ArcelorMittal. The State of Espirito Santo for ICMS authority’s assessment (including 2014. In March 2015, there was Company is vigorously defending (a value added tax) in the total the revised penalty component). an unfavourable decision at the against each of the pending claims amount of 27 relating to a tax administrative tribunal of first discussed below. incentive (INVEST) used by the In 2013, ArcelorMittal Brasil instance, in respect of which the Company. The dispute concerns received a tax assessment in Company has filed an appeal. Brazil the definition of fixed assets. In relation to the 2008-2010 tax August 2015, the administrative years for corporate income IRPJ In May 2014, ArcelorMittal In 2003, the Brazilian Federal tribunal of first instance upheld and CSL in relation to (i) the Comercializadora de Energia Revenue Service granted 21 of the tax assessments, while amortization of goodwill on the received a tax assessment from ArcelorMittal Brasil (through its also issuing decisions partially acquisition of Mendes Júnior the state of Minas Gerais alleging predecessor company, then known favorable to the Company in 2 of Siderurgia, Dedini Siderurgia that the Company did not correctly as CST) a tax benefit for certain the cases. In September 2015, and CST, (ii) the amortization calculate tax credits on interstate investments. ArcelorMittal Brasil ArcelorMittal Tubarão has filed of goodwill arising from the sales of electricity from the had received certificates from appeals with respect to each of the mandatory tender offer made February 2012 to December 2013 SUDENE, the former Agency for administrative tribunal’s decisions. by ArcelorMittal to minority period. The amount claimed totals the Development of the Northeast In January 2016, there were shareholders of Arcelor Brasil 41. ArcelorMittal Comercializadora Region of Brazil, confirming unfavorable decisions in two of the following the two-step merger of de Energia filed its defense in June ArcelorMittal Brasil’s entitlement cases at the second administrative Arcelor and Mittal Steel N.V. and 2014. Following an unfavorable to this benefit. In September level. (iii) CSL and IRPJ over profits of administrative decision in 2004, ArcelorMittal Brasil was controlled companies in Argentina, November 2014, ArcelorMittal notified of the annulment of these In 2011, ArcelorMittal Brasil Costa Rica, Venezuela and the filed an appeal in December 2014. certificates. ArcelorMittal Brasil received a tax assessment for Netherlands. The amount claimed In March 2015, there was a has pursued its right to this tax corporate income tax (known totals 387. ArcelorMittal Brasil has further unfavourable decision at benefit through the courts against as IRPJ) and social contributions filed its defense, and the case is in the second administrative level. both ADENE, the successor to on net profits (known as CSL) in the first administrative instance. In The Company received the tax SUDENE, and against the Brazilian relation to (i) the amortization October 2014, the administrative enforcement notice in December Federal Revenue Service. The of goodwill on the acquisition of tribunal of first instance found in 2015 and intends to file its Brazilian Federal Revenue Service Mendes Júnior Siderurgia (for the favour of the Federal Revenue and defense. issued a tax assessment in this 2006 and 2007 fiscal years), (ii) ArcelorMittal Brasil filed its appeal regard for 451 in December the amortization of goodwill arising on November 6, 2014. In the period from May to July 2007. In December 2008, the from the mandatory tender offer 2015, ArcelorMittal Brasil administrative tribunal of first (MTO) made by ArcelorMittal to For over 15 years, ArcelorMittal received nine tax assessments instance upheld the amount of the minority shareholders of Arcelor Brasil has been challenging the from the state of Rio Grande do assessment. ArcelorMittal Brasil Brasil following the two-step basis of calculation of the Brazilian Sul alleging that the Company, appealed to the administrative merger of Arcelor and Mittal Steel Cofins and Pis social security taxes through its branches in that state, tribunal of second instance, and, on N.V. (for the 2007 tax year), (iii) (specifically, whether Brazilian had not made advance payments 144 Consolidated financial statements

of ICMS (a value added-tax) on these entities owe 155 in social decisions of the lower courts in United States sales in that state covering the contributions (including interest favour of ArcelorMittal Kryvyi Rih. period from May 2010 to April and late fees relating thereto) The tax authorities did not appeal On September 12, 2008, Standard 2015. The amount claimed totals on various payments, the most to the Supreme Court of Ukraine Iron Works filed a purported class 70. The administrative tribunal significant of which relate to before the deadline of December action complaint in the U.S. District of first instance upheld the tax voluntary separation schemes, 24, 2015 and the case is therefore Court for the Northern District assessments in each of the nine profit sharing schemes, professional closed. of Illinois against ArcelorMittal, cases, and ArcelorMittal Brasil fees and stock options. In its ArcelorMittal USA LLC, and other appealed each of the administrative decision dated April 24, 2013, the In September 2012, the Ukrainian steel manufacturers, alleging that tribunal’s decisions. In December arbitration committee reduced tax authorities conducted an the defendants had conspired 2015, unfavourable decisions the amount claimed by 29. The audit of ArcelorMittal Kryvyi to restrict the output of steel at the administrative tribunal of dispute is now in the judicial phase Rih, resulting in a tax claim of products in order to fix, raise, second instance were issued in five before the Tribunal des Affaires de approximately 62. The claim stabilize and maintain prices at of the nine cases. The Company Sécurité Sociale. relates to the cancellation of artificially high levels in violation has filed another appeal against VAT refunds, cancellation of of U.S. antitrust law. Other similar three of these adverse decisions Mexico deductible expenses and queries direct purchaser lawsuits were and intends to file appeals in on transfer pricing calculations. also filed in the same court and respect of the remaining two In 2015, the Mexican Tax On January 2, 2013, ArcelorMittal were consolidated with the decisions upon receipt of formal Administration Service issued three Kryvyi Rih filed a lawsuit with Standard Iron Works lawsuit. On notification thereof. tax assessments to ArcelorMittal the District Administrative Court May 29, 2014, ArcelorMittal and Mexico, alleging that ArcelorMittal to challenge the findings of this ArcelorMittal USA LLC entered into France Mexico owes 163 in respect of tax audit. On April 9, 2013, the an agreement to settle the direct (i) improper interest deductions District Administrative Court purchaser claims for an amount of Following audits for 2006, 2007 relating to certain loans, (ii) unpaid rejected the claim by the tax 90 recognized in cost of sales. On and 2008 of ArcelorMittal France corporate income tax for interest authorities and retained only a October 17, 2014, the court gave and other French ArcelorMittal payments improperly categorized tax liability of approximately 0.2 its final approval of the settlement entities, URSSAF, the French as profit, and (iii) improper against ArcelorMittal Kryvyi Rih. and dismissed ArcelorMittal and body responsible for collecting payment deductions for branding Both parties filed appeals and, on ArcelorMittal USA LLC from the social contributions, commenced fee services and IT services in November 7, 2013, the Court of lawsuit. In September 2015, the formal proceedings for these 2008. ArcelorMittal Mexico filed Appeal rejected the appeal by the court certified a class of direct years alleging that the French an annulment complaint in respect tax authorities and retained only purchasers on whether there was ArcelorMittal entities owe 71 in of each of the aforementioned a tax liability of approximately a conspiracy, allowing the case to social contributions on various assessments in November 2015. 0.1 against ArcelorMittal Kryvyi proceed against the remaining payments, the most significant Rih. On November 12, 2013, the defendants as a class action, but of which relate to profit sharing Ukraine tax authorities filed an appeal in did not certify a class on impact schemes, professional fees and cassation. On June 3, 2015, the or damages. This ruling does not stock options. Proceedings were In December 2010, the Ukrainian Supreme Administrative Court of affect the settlement. Two putative commenced in relation to the tax authorities issued a tax Ukraine decided entirely in favor of class actions on behalf of indirect 2006 claims in December 2009. assessment in a total amount of ArcelorMittal Kryvyi Rih. The tax purchasers have been filed and Proceedings were commenced in 21 to ArcelorMittal Kryvyi Rih, authorities have until June 3, 2016 one has been dismissed for want relation to the 2007 and 2008 alleging that it had breached tax to appeal the judgment to the of prosecution; the remaining claims in February and March law provisions relating to VAT for Supreme Court of Ukraine. indirect purchasers’ action is not 2010, respectively. In three the December 2009 to October covered by the settlement of the decisions dated December 10, 2010 period. ArcelorMittal Kryvyi Competition/Antitrust Claims direct purchaser claims or the 2012, the arbitration committee Rih appealed the assessment court’s class certification decision. hearing the matter found that to a higher division of the tax ArcelorMittal is a party to various social contributions in an amount authorities. The appeal was competition/antitrust claims. As of Brazil of 17, 11 and 5 are due in respect rejected, and ArcelorMittal Kryvyi December 31, 2015, ArcelorMittal of the profit-sharing schemes, Rih appealed this decision to the had recorded provisions in the In September 2000, two stock options and professional local District Administrative Court aggregate of approximately 87 construction trade organizations fees, respectively. These amounts in February 2011. In March 2011, for such claims. Set out below filed a complaint with Brazil’s cover the audits for 2006, 2007 the local District Administrative is a summary description of Administrative Council for and 2008. In March 2013, the Court decided in favor of competition/antitrust claims (i) Economic Defence (“CADE”) Company filed appeals against the ArcelorMittal Kryvyi Rih and the tax in respect of which ArcelorMittal against three long steel producers, decisions relating to the profit- authorities filed an appeal. On June had recorded a provision as of including ArcelorMittal Brasil. sharing schemes and stock options. 26, 2012, the Court of Appeal December 31, 2015, (ii) that The complaint alleged that these ruled in favor of ArcelorMittal constitute a contingent liability, or producers colluded to raise prices Following audits for 2009, 2010 Kryvyi Rih, rejecting the appeal (iii) that were resolved in 2015, in the Brazilian rebar market, and 2011 of ArcelorMittal France of the tax authorities, who on in each case involving amounts thereby violating applicable and other French ArcelorMittal July 13, 2012 filed an appeal in deemed material by ArcelorMittal. antitrust laws. In September entities, URSSAF commenced cassation. On December 24, 2014, The Company is vigorously 2005, CADE issued its final formal proceedings in December the Supreme Administrative Court defending against each of the decision against ArcelorMittal 2012 for these years alleging that of Ukraine left unchanged the pending claims discussed below. Brasil, imposing a fine of 38 (at Consolidated financial statements 145

December 31, 2015 values). discriminated in pricing its low final outcome on the application conditions for the purchase of ArcelorMittal Brasil appealed the carbon wire rod, was referred to for access to the documents. scrap over a period from 1998 decision to the Brazilian Federal the Competition Tribunal. The The appeal was upheld by the to at least 2008. If imposed, Court. In September 2006, Competition Commission seeks an Competition Appeals Court (CAC) fines could amount to 10% of ArcelorMittal Brasil offered a order declaring that ArcelorMittal and the matter was referred back ArcelorMittal South Africa’s letter guarantee and obtained an South Africa’s pricing in 2000-2003 to the Competition Tribunal for a turnover for the year preceding any injunction to suspend enforcement in respect of low carbon wire rod determination of confidentiality final decision by the Competition of this decision pending the court’s amounted to price discrimination and scope of access to the Tribunal. judgment. and an order that ArcelorMittal documents. The Competition South Africa cease its pricing Commission appealed the In relation to all these cases, There is also a related class action discrimination. In March 2008, the decision of the CAC, and, on May ArcelorMittal South Africa has commenced by the Federal Public Competition Tribunal accepted 31, 2013, the Supreme Court of engaged with the Competition Prosecutor of the state of Minas the claimants’ application for Appeal dismissed the appeal of Commission and has made Gerais against ArcelorMittal Brasil leave to intervene. In November the Competition Commission significant progress regarding a for damages based on the alleged 2012, a second complaint alleging and confirmed the decision of possible overall settlement. Whilst violations investigated by CADE. price discrimination regarding the CAC. In 2014, ArcelorMittal a draft settlement agreement is in the same product over the 2004 South Africa requested the the process of being finalized and A further related lawsuit was to 2006 period was referred by documents from the Competition is still subject to approval of the commenced by four units of the Competition Commission Commission, which provided an Competition Commission and the Sinduscons, a civil construction to the Competition Tribunal. index thereof. On July 7, 2011, Competition Tribunal, a provision trade organization, in federal ArcelorMittal is unable to assess ArcelorMittal filed an application of 87 representing the present court in Brasilia against, inter alia, the outcome of these proceedings before the Competition Tribunal value of a proposed administrative ArcelorMittal Brasil, in February or the amount of ArcelorMittal to set aside the complaint penalty of 96 (R1.5 billion) has 2011, claiming damages based South Africa’s potential liability, if referral based on procedural been recognized in cost of sales. on an alleged cartel in the rebar any. irregularities but this application ArcelorMittal South Africa has, market as investigated by CADE was withdrawn by notice dated subject to certain conditions being and as noted above. On September 1, 2009, the South August 7, 2014. Issues of access agreed upon with the Competition African Competition Commission to the Competition Commission’s Commission, proposed to pay Romania referred a complaint against documents remain open. It is too the administrative penalty over four producers of long carbon early for ArcelorMittal to assess a period of 5 years subject to In 2010 and 2011, ArcelorMittal steel in South Africa, including the potential outcome of the appropriate interest. Galati entered into high volume ArcelorMittal South Africa, and procedure, including the financial electricity purchasing contracts the South African Iron and Steel impact. Other Legal Claims with Hidroelectrica, a partially Institute to the Competition state-owned electricity Tribunal. The complaint referral In March 2012, the South African ArcelorMittal is a party to producer. Following allegations followed an investigation into Competition Commission referred various other legal claims. As of by Hidroelectrica’s minority alleged collusion among the to the Competition Tribunal an December 31, 2015, ArcelorMittal shareholders that ArcelorMittal producers initiated in April 2008, allegation that ArcelorMittal had recorded provisions of Galati (and other industrial on-site inspections conducted South Africa and steel producer approximately 180 for other electricity consumers) benefitted at the premises of some of Highveld acted by agreement or legal claims in respect of which from artificially low tariffs, the the producers and a leniency concerted practice to fix prices it considers the risk of loss to opened a application by Scaw South Africa, and allocate markets in respect of be probable. Set out below is a formal investigation into alleged one of the producers under certain flat carbon steel products summary description of the other state aid in April 2012. The investigation. The Competition over a period of 10 years (1999- legal claims (i) in respect of which European Commission announced Commission recommended that 2009) in contravention of the ArcelorMittal had recorded a on June 12, 2015 that electricity the Competition Tribunal impose South African Competition Act. provision as of December 31, 2015, supply contracts signed by an administrative penalty against Pleadings remain open. If imposed, (ii) that constitute a contingent Hidroelectrica with certain ArcelorMittal South Africa, Cape fines could amount to up to 10% liability, or (iii) that were resolved electricity traders and industrial Gate and Cape Town Iron Steel of ArcelorMittal South Africa’s in 2015, in each case involving customers (including the one Works in the amount of 10% of turnover in the year preceding any amounts deemed material by entered by ArcelorMittal Galati) their annual revenues in South final decision by the South African ArcelorMittal. The Company is did not involve state aid within the Africa (in the year preceding any Competition Tribunal. vigorously defending against each meaning of the EU rules. final decision) and exports from of the pending claims discussed South Africa for 2008. ArcelorMittal In August 2013, the South below. South Africa filed an application to access African Competition Commission the file of the Competition referred a complaint against four Argentina In February 2007, the complaint Commission that was rejected. scrap metal purchasers in South previously filed with the South ArcelorMittal appealed the Africa, including ArcelorMittal Over the course of 2007 to 2015, African Competition Commission decision to reject the application, South Africa, to the South the Argentinian Customs Office by Barnes Fencing, a South and applied for a review of that African Competition Tribunal for Authority (Aduana) notified the African producer of galvanized decision and a suspension of prosecution. The complaint alleges Company of certain inquiries that wire, alleging that ArcelorMittal the obligation to respond to the collusion among the purchasers it is conducting with respect to South Africa, as a “dominant firm”, referral on the substance pending to fix the price and other trading prices declared by the Company’s 146 Consolidated financial statements

Argentinian subsidiary, Acindar, received notice of a claim filed respect of claims made by 59 phase would be held relating related to iron ore imports. The by Finmasi S.p.A. relating to a former employees of ArcelorMittal to the potential liability of Customs Office Authority is memorandum of agreement Luxembourg. The claimants allege ArcelorMittal as well as the amount seeking to determine whether (“MoA”) entered into between that they are owed compensation of any damages which could be Acindar incorrectly declared prices ArcelorMittal Distribution Services based on the complementary awarded to Senegal. The parties for iron ore imports from several France (“AMDSF”) and Finmasi pension scheme that went into have since agreed to settle the different Brazilian suppliers and in 2008. The MoA provided that effect in Luxembourg in January dispute with the amount of the from ArcelorMittal Sourcing on 37 AMDSF would acquire certain of 2000. The aggregate amount settlement being included within different claims concerning several Finmasi’s businesses for an amount claimed by such former employees financing cost. On December 12, shipments made between 2002 not to exceed 101, subject to the (bearing in mind that other former 2014, the arbitral tribunal issued a and 2014. The aggregate amount satisfaction of certain conditions employees may bring similar procedural order formally closing claimed by the Customs Office precedent, which, in AMDSF’s claims) is approximately 64. Given the arbitration. Authority in respect of all of the view, were not fulfilled. Finmasi the similarities in the claims, the shipments is approximately 196. sued for (i) enforcement of the parties agreed to limit the pending South Africa The investigations are subject to MoA, (ii) damages of 15 to 26 or proceedings to four test claims. the administrative procedures (iii) recovery costs plus quantum In April 2013, the Esch-sur-Alzette When the South African of the Customs Office Authority damages for Finmasi’s alleged labor court rejected two of these government split Iscor into and are at different procedural lost opportunity to sell to another test claims. The relevant plaintiffs separate steel and mining stages depending on the filing buyer. In September 2011, the are appealing these decisions. In operations in 2001, the mining date of the investigation. By July court rejected Finmasi’s claims November 2013, the Luxembourg license at the Sishen Mine (the 2015, in 22 of the total 37 cases, other than its second claim. city labor court rejected the two “Sishen Mining Right”) was split the administrative branch of the The court appointed an expert other test claims, which are also between ArcelorMittal South Customs Office Authority ruled to determine the quantum of being appealed. Africa (“AMSA”) and Sishen Iron against Acindar (representing total damages. In May 2013, the expert’s Ore Company (Proprietary) Limited claims of 67). These decisions have report was issued and valued Senegal (“SIOC”). AMSA was granted been appealed to the Argentinian the quantum of damages in the 21.4% of the Sishen Mining Right, National Fiscal Court. range of 41 to 65. ArcelorMittal In 2007, ArcelorMittal Holdings with the remaining 78.6% being appealed the decision on the AG entered into an agreement granted to SIOC. A condition of the Canada merits. In May 2014, the Court of with the State of Senegal relating iron ore supply contracts entered Appeals issued a decision rejecting to an integrated iron ore mining into between SIOC and AMSA in In April 2011, a proceeding was ArcelorMittal’s appeal. On June and related infrastructure project. 2001 was that if AMSA lost its share commenced before the Ontario 20, 2014, ArcelorMittal filed an The Company announced at the of the Sishen Mining Right, SIOC (Canada) Superior Court of appeal of the Court of Appeal’s time that implementation of the would no longer be obligated Justice under the Ontario Class judgment with the Italian Court project would entail an aggregate to supply iron ore to AMSA at Proceedings Act, 1992, against of Cassation. On December 18, investment of $2.2 billion. Project the price specified in the 2001 ArcelorMittal, Baffinland, and 2014, the Court of Milan issued a implementation did not follow agreements. Under revised mining certain other parties relating decision on the quantum of the the originally anticipated schedule legislation, each holder of a mining to the January 2011 take-over damages and valued the quantum after initial phase studies and right was required to reapply for of Baffinland by ArcelorMittal, of damages in the sum of 26 plus related investments. its mining licence. When AMSA Nunavut, Iron Ore Holdings and interest. In June 2015, both parties failed to reapply for its portion 1843208 Ontario Inc. The action served appeals of the decision on The Company engaged in of the Sishen Mining Right, SIOC seeks the certification of a class the quantum, with ArcelorMittal discussions with the State of served notice on AMSA that it comprised of all Baffinland also seeking the suspension of Senegal about the project over would no longer supply iron ore securities holders who tendered the enforceability of the decision. a long period. In early 2011, the to AMSA at the price specified in their Baffinland securities, and On July 1, 2015, Finmasi formally parties engaged in a conciliation the 2001 agreements. The parties whose securities were taken up, notified to AMDSF the declaration procedure, as provided for commenced an arbitration process in connection with the take- of enforcement of the decision under their agreement, in an (the “SIOC Arbitration”) in April over between September 22, of December 18, 2014. On July attempt to reach a mutually 2010 to resolve this dispute. 2010 and February 17, 2011, 28, 2015, AMDSF filed an appeal acceptable outcome. Following or otherwise disposed of their against such declaration with the unsuccessful completion of After AMSA’s failure to reapply Baffinland securities on or after the Court of Appeal of Rheims in this procedure, in May 2011 the for its portion of the Sishen January 14, 2011. The action France. At a hearing on December State of Senegal commenced an Mining Right, the South African alleges that the tender offer 1, 2015, the Italian Court of Appeal arbitration before the Court of government attempted to award documentation contained certain accepted the suspension of the Arbitration of the International the 21.4% of the Sishen Mining misrepresentations and seeks enforcement of the decision of Chamber of Commerce, Right to Imperial Crown Trading damages in an aggregate amount December 18, 2014, following the claiming breach of contract and (“ICT”) in 2010. SIOC brought legal of 720 (CAD$1billion) or rescission agreement of AMDSF to provide a provisionally estimating damages action against the South African of the transfer of the Baffinland guarantee for its value. of 750. In September 2013, the government and ICT to challenge securities by members of the class. arbitral tribunal issued its first the prospective grant of the Sishen Luxembourg award ruling that Senegal is Mining Right to ICT. AMSA applied Italy entitled to terminate the 2007 to be joined as applicant in these In June 2012, the Company agreements. The arbitral tribunal proceedings. AMSA argued in In January 2010, ArcelorMittal received writs of summons in also ruled that a new arbitration the proceedings that SIOC holds Consolidated financial statements 147

100% of the Sishen Mining Right, Index price above US$80/t, a 7.5% approximately 0.47 represents sitting on the Board of Directors and that ICT was not entitled to discount would apply. The Index legal fees and approximately of ArcelorMittal at the time of the any portion of the Sishen Mining Price is less erratic and volatile 2.8 represents damages paid merger and on the Significant Right. On December 15, 2011, the than a cost-based price, allowing to the claimant. The aggregate Shareholder. The plaintiffs alleged Court ruled that SIOC holds 100% AMSA more visibility with regards costs and settlements for the in particular that, based on Mittal of the Sishen Mining Right and set to future prices of iron ore, and in year ended December 31, 2014 Steel’s and Arcelor’s disclosure and aside the grant of the prospecting turn, greater certainty regarding were approximately 4, of which public statements, investors had right to ICT. Subsequently, SIOC the cost of iron ore. The definitive approximately 0.3 represents a legitimate expectation that the has been granted the rights to agreement was signed by the legal fees and approximately 3 exchange ratio in the second-step the remaining 21.4% share of the parties in February 2016. represents damages paid to the merger would be the same as Sishen Mining Right, subject to Following AMSA’s and SIOC’s claimant. that of the secondary exchange conditions imposed by the South entry into the 2014 SIOC Contract offer component of Mittal Steel’s African government. Discussions in November 2013, the parties Minority Shareholder Claims June 2006 tender offer for Arcelor are currently on-going as to the agreed to settle the SIOC Regarding the Exchange Ratio (i.e., 11 Mittal Steel shares for particulars of such conditions. Arbitration. in the Second-Step Merger of seven Arcelor shares), and that ArcelorMittal into Arcelor the second-step merger did not On November 5, 2013, a supply France comply with certain provisions contract with SIOC (the “2014 ArcelorMittal is the company of Luxembourg company law. SIOC Contract”) was entered into Retired and current employees that results from the acquisition They claimed, inter alia, the between SIOC, an entity in which of certain French subsidiaries of of Arcelor by Mittal Steel N.V. in cancellation of certain resolutions Kumba has a 73.9% interest, and the former Arcelor have initiated 2006 and a subsequent two- (of the Board of Directors and AMSA. The 2014 SIOC Contract lawsuits to obtain compensation step merger between Mittal of the Shareholders meeting) relates to the sale and purchase for asbestos exposure in excess Steel and ArcelorMittal and in connection with the merger, of up to 6.25 million tonnes per of the amounts paid by French then ArcelorMittal and Arcelor. the grant of additional shares, annum of iron ore (from either the social security (“Social Security”). Following completion of this or damages in an amount of Sishen and Thabazimbi mines or Asbestos claims in France initially merger process, several former approximately 196. By judgment any alternative source), complying are made by way of a declaration minority shareholders of Arcelor dated November 30, 2011, the with agreed specifications and of a work-related illness by the or their representatives brought Luxembourg civil court declared all lump-fine ratios. The 2014 SIOC claimant to the Social Security legal proceedings regarding the of the plaintiffs’ claims inadmissible Contract is effective until 180 days authorities resulting in an exchange ratio applied in the and dismissed them. The after either (i) AMSA gives written investigation and a level of second-step merger between judgment was appealed in May notice to SIOC that it is no longer compensation paid by Social ArcelorMittal and Arcelor and the 2012 and the appeal proceedings economically viable for AMSA to Security. Once the Social Security merger process as a whole. are ongoing. produce steel from Saldanha or authorities recognize the work- any of its inland domestic steel related illness, the claimant, ArcelorMittal believes that the On May 15, 2012, ArcelorMittal plants or (ii) SIOC gives written depending on the circumstances, allegations made and claims received a writ of summons on notice to AMSA that it is no longer can also file an action for brought by such minority behalf of Association Actionnaires economically viable for SIOC to inexcusable negligence (faute shareholders are without merit d’Arcelor (“AAA”), a French export iron ore produced from inexcusable) to obtain additional and that the exchange ratio and association of former minority the Sishen Mine. The 2014 SIOC compensation from the company merger process complied with shareholders of Arcelor, to appear Contract was entered into in order before a special tribunal. Where the requirements of applicable before the civil court of Paris. to replace the Sishen Supply procedural errors are made by law, were consistent with previous In such writ of summons, AAA Agreement and the Thabazimbi Social Security, it is required to guidance on the principles that claimed (on grounds similar Supply Agreement entered into assume full payment of damages would be used to determine the to those in the Luxembourg between AMSA and SIOC in awarded to the claimants. Due exchange ratio in the second- proceedings summarized above) November 2001. to fewer procedural errors made step merger and that the merger inter alia damages in a nominal by Social Security, changes in the exchange ratio was relevant and amount and reserved the right to On November 6, 2015, AMSA regulations and, consequently, reasonable to shareholders of both seek additional remedies including agreed with SIOC to amend the fewer rejected cases, ArcelorMittal merged entities. the cancellation of the merger. The pricing mechanism terms of has been required to pay some proceedings before the civil court the 2014 SIOC Contract from a amounts in damages since 2011. Set out below is a summary of of Paris have been stayed, pursuant cost-based price to an export ongoing matters in this regard. to a ruling of such court on July parity price (“EPP”) with effect The number of claims outstanding Several other claims brought 4, 2013, pending a preparatory from October 1, 2015. The EPP is for asbestos exposure at before other courts and regulators investigation (instruction calculated on the basis of the Platts December 31, 2015 was 374 as were dismissed and are definitively préparatoire) by a criminal judge 62% Fe CFR China Fines Index compared to 351 at December closed. magistrate (juge d’instruction) (the “Index Price”) and, at certain 31, 2014. The range of amounts triggered by the complaints Index Price levels, AMSA receives claimed for the year ended On January 8, 2008, ArcelorMittal (plainte avec constitution de partie a discounted price. For example, if December 31, 2015 was €30,000 to received a writ of summons civile) of AAA and several hedge the Index price is between US$60/t €650,000 (approximately $32,661 on behalf of four hedge fund funds (who quantified their total and US$70/t, AMSA will receive a to $707,655). The aggregate shareholders of Arcelor to alleged damages at 268), including 5% discount to the EPP; between costs and settlements for the appear before the civil court of those who filed the claims before US$70/t and US$80/t, a 6.25% year ended December 31, 2015 Luxembourg. The summons was the Luxembourg courts described discount would apply and at an were approximately 3.3, of which also served on all natural persons (and quantified) above. 148 Consolidated financial statements

8.3 Commitments

The Company’s commitments consist of the following:

December 31, 2015 20141 Purchase commitments 20,059 23,988 Guarantees, pledges and other collateral 3,791 4,185 Non-cancellable operating leases 1,446 1,662 Capital expenditure commitments 280 712 Other commitments 1,161 1,383 Total 26,737 31,930 1 The total commitments balance as of December 31, 2014 shown in the table above has been revised to correct the prior period disclosure, decreasing the balance by 389. The revision impacted only the disclosed amount and otherwise had no impact on the Company’s consolidated financial statements. The Company has evaluated the impact of the revision and determined that it did not have a material impact on any of its prior period annual and interim consolidated financial statements.

Purchase commitments of commitments and the decline in Guarantees, pledges and other Pledges and other collateral mainly raw material prices. collateral relate to mortgages entered into Purchase commitments consist by the Company’s operating primarily of major agreements for Purchase commitments include Guarantees related to financial debt subsidiaries. Other sureties, first procuring iron ore, coking coal, coke commitments given to associates and credit line given on behalf of demand guarantees, letters of and hot metal. The Company also for 558 and 317 as of December third parties were 102 and 101 as credit, pledges and other collateral has a number of agreements for 31, 2015 and 2014, respectively. of December 31, 2015 and 2014, included nil of commitments electricity, industrial and natural Purchase commitments include respectively. Additionally, 12 and given on behalf of associates as of gas, scrap and freight. In addition commitments given to joint 22 were related to guarantees December 31, 2015 and 2014. to those purchase commitments ventures for 1,315 and 1,581 as given on behalf of associates as of disclosed above, the Company of December 31, 2015 and 2014, December 31, 2015 and 2014, Non-cancellable operating leases enters into purchasing contracts respectively. Commitments given respectively. Guarantees of 1,224 as part of its normal operations to joint ventures include 1,264 and 1,087 were given on behalf The Company leases various which have minimum volume and 1,500 related to purchase of joint ventures as of December facilities, land and equipment requirements but for which there of the output from Tameh as of 31, 2015 and 2014, respectively. under non-cancellable lease are no take-or-pay or penalty December 31, 2015 and 2014, Guarantees given on behalf of joint arrangements. Future minimum clauses included in the contract. respectively. Additionally, the ventures includes 519 and 573 for lease payments required under The Company does not believe Company has committed to the guarantee issued on behalf of operating leases that have initial or these contracts have an adverse purchase 50% of the output from Calvert as of December 31, 2015 remaining non-cancellable terms as effect on its liquidity position. The its joint venture Kalagadi once and 2014, respectively. of December 31, 2015 and 2014 decrease in purchase commitments production commences (see note according to maturity periods are is mainly related to the fulfillment 2.4.1). as follows:

2015 2014 Less than 1 year 279 334 1-3 years 454 516 4-5 years 309 378 More than 5 years 404 434 Total 1,446 1,662

Non-cancellable operating leases (1,113), buildings (190), land (90) In 2008, ArcelorMittal Temirtau commitments as of December 31, include time charter arrangements and other (53). announced a decision to expand 2014 have been retrospectively for shipping activities. its production capacity from adjusted by 103 and 82 to correct The operating leases expense Capital expenditure commitments 4 million tons to 6 million tons the prior period disclosure. was 538, 686 and 672 in 2015, and committed to improve the 2014 and 2013, respectively. The Capital expenditure commitments safety and security in its mining In 2015, the Company re-assessed non-cancellable operating leases mainly relate to commitments area. There were no outstanding its commitments with respect to commitments for the year ended associated with investments commitments for these projects as Phase 2 of the Liberia expansion December 31, 2015 are related to in expansion and improvement of December 31, 2015 and 2014, project as a result of the delay plant, machinery and equipment projects by various subsidiaries. respectively. Accordingly, the of the project and rapid price Consolidated financial statements 149

declines. The commitments for deductible in other years or are initial recognition (other than date, to recover or settle the the project decreased by 468 at never taxable or deductible. The in a business combination) of carrying amount of its assets and December 31, 2015 as compared Company’s current income tax other assets and liabilities in a liabilities. to December 31, 2014. expense (benefit) is calculated transaction that affects neither using tax rates that have been the taxable profit nor the profit The carrying amount of deferred In 2014, ArcelorMittal Atlantique enacted or substantively enacted reported in the consolidated tax assets is reviewed at each et Lorraine committed to as of the consolidated statement of statement of operations. consolidated statement of financial investment programs in connection financial position date. position date and reduced to the with the Florange site and Deferred tax liabilities are extent that it is no longer probable ArcelorMittal Belgium in connection Tax is charged or credited to recognized for taxable temporary that sufficient taxable profits will with the closure of the Liège site. the consolidated statement of differences associated with be available to enable all or part The remaining capital expenditure operations, except when it relates investments in subsidiaries, of the asset to be recovered. The commitments were 76 and to items charged or credited to associates and joint ventures, Company reviews the deferred tax 96 as of December 31, 2015, other comprehensive income or except if the Company is able assets in the different jurisdictions respectively. directly to equity, in which case to control the reversal of the in which it operates to assess the tax is recognized in other temporary difference and it is the possibility of realizing such Other commitments comprehensive income or in equity. probable that the temporary assets based on projected taxable difference will not reverse in the profit, the expected timing of the Other commitments given Deferred tax is recognized on foreseeable future. Deferred tax reversals of existing temporary comprise mainly commitments differences between the carrying assets arising from deductible differences, the carry forward incurred for gas supply to amounts of assets and liabilities, temporary differences associated period of temporary differences electricity suppliers. in the consolidated financial with such investments are only and tax losses carried forward and statements and the corresponding recognized to the extent that the implementation of tax-planning Commitments to sell tax basis used in the computation it is probable that there will strategies. Due to the numerous of taxable profit, and is accounted be sufficient taxable profits variables associated with these In addition to the commitments for using the statements of against which the benefits of judgments and assumptions, both presented above, the Company financial position liability the temporary differences can the precision and reliability of the has firm commitments to sell for method. Deferred tax liabilities be utilized and are expected to resulting estimates of the deferred 490 and 435 as of December are generally recognized for all reverse in the foreseeable future. tax assets are subject to substantial 31, 2015 and 2014, respectively taxable temporary differences, and uncertainties. mainly related to natural gas and deferred tax assets are generally Deferred tax assets and liabilities electricity. recognized for all deductible are measured at the tax rates that Deferred tax assets and liabilities temporary differences and net are expected to apply in the period are offset when there is a legally operating loss carryforwards to in which the liability is settled or enforceable right to set off current Note 9: Income taxes the extent that it is probable that the asset realized, based on tax tax assets against current tax taxable profits will be available rates (and tax laws) that have been liabilities, when they relate to The current tax payable or against which those deductible enacted or substantively enacted income taxes levied by the same recoverable is based on taxable temporary differences can be by the consolidated statements taxation authority and when the profit (loss) for the year. Taxable utilized. Such assets and liabilities of financial position date. The Company intends to settle its profit differs from profit as are not recognized if the taxable measurement of deferred tax current tax assets and liabilities on reported in the consolidated temporary difference arises liabilities and assets reflects the tax a net basis. statements of operations because from the initial recognition of consequences that would follow it excludes items of income or non deductible goodwill or if from the manner in which the expense that are taxable or the differences arise from the Company expects, at the reporting

9.1 Income tax expense (benefit)

The components of income tax expense (benefit) for each of the years ended December 31, 2015, 2014 and 2013, respectively, are summarized as follows:

Year ended December 31, 2015 2014 2013 Total current tax expense 331 544 305 Total deferred tax expense (benefit) 571 (90) (90) Total income tax expense (benefit) 902 454 215 150 Consolidated financial statements

The following table reconciles the expected tax expense (benefit) at the statutory rates applicable in the countries where the Company operates to the total income tax expense (benefit) as calculated:

Year Ended December 31, 2015 2014 2013 Net income (loss) (including non-controlling interests) (8,423) (974) (2,575) Income tax expense (benefit) 902 454 215 Income (loss) before tax : (7,521) (520) (2,360) Tax expense (benefit) at the statutory rates applicable to profits (losses) in the countries (2,146) (147) (591) Permanent items (2,124) (273) (1,544) Rate changes - 36 25 Net change in measurement of deferred tax assets 4,940 306 2,067 Tax effects of foreign currency translation 153 446 (81) Tax credits (13) (63) (57) Other taxes 18 79 57 Others 74 70 339 Income tax expense (benefit) 902 454 215

ArcelorMittal’s consolidated operates and the pre-tax results in Eastern Europe and Asia, which mainly in Western Europe and the income tax expense (benefit) is of its subsidiaries in each of these have a structurally lower corporate Americas, which have a structurally affected by the income tax laws countries, which can change income tax rate than the statutory higher corporate income tax rate. and regulations in effect in the from year to year. ArcelorMittal tax rate as in effect in Luxembourg various countries in which it operates in jurisdictions, mainly (29.22%), as well as in jurisdictions,

Permanent items

The permanent items consist of:

Year Ended December 31, 2015 2014 2013 Tax deductible write-downs on shares (2,622) (338) (1,217) Taxable (tax deductible) capital gains/losses - - (371) Taxable capital gains on associates and joint ventures - 67 - Non tax deductible goodwill impairment 250 - - Non tax deductible hyperinflationary adjustment 114 - - Taxable income of AMTFS 196 - - Other permanent items (62) (2) 44 Total permanent items (2,124) (273) (1,544)

subsidiaries in Canada and (“AMTAUS”), is a limited liability The 2013 tax expense from Tax deductible write-downs Luxembourg which are principally company organized under the rate changes of 25 results on shares: in connection with tax deductible. laws of Luxembourg subject to from the increase or from the the group impairment test for Taxable capital gains on associates taxation in Luxembourg on its postponement of the reduction goodwill and property, plant and joint ventures relate to the worldwide income. AMTFS has of the substantively enacted and equipment (“PP&E”), the disposal of the Company’s 50% filed an election to be treated corporate income tax rate in recoverability of carrying amounts interest in Gallatin Steel. as a disregarded entity for Mexico and Ukraine respectively. of investments in shares is also United States federal income tax reviewed annually, resulting in tax Non tax deductible purposes. Therefore, the income Net change in measurement of deductible write-downs of the hyperinflationary adjustment: non- of AMTFS is subject to corporate deferred tax assets value of shares of consolidated monetary items in Venezuela are income taxation simultaneously subsidiaries in Luxembourg. revalued according to the inflation in 2 different countries (i.e. The 2015 net change in rate for tax purposes. The resulting Luxembourg and the US). measurement of deferred tax Non tax deductible goodwill difference is non deductible to the assets of 4,940 primarily consists impairment: in 2015 ArcelorMittal extent it generates a tax loss. Rate changes of tax expense of 2,622 due to the impaired the goodwill related to the unrecognized part of deferred Mining segment for a total amount Taxable income of AMTFS: The 2014 tax expense from rate tax assets on write-downs of the of 0.9 billion (see note 5.3). ArcelorMittal Treasury Financial changes of 36 is mainly due to the value of shares of consolidated Services S.à r.l. (“AMTFS”), a increase of the future income tax subsidiaries in Luxembourg, tax Tax deductible capital losses: subsidiary of ArcerlorMittal rate in Ukraine, partially offset by a expense of 2,405 due to non the loss on sales of consolidated Treasury Americas LLC decrease in Spain. recognition and de-recognition of Consolidated financial statements 151

other deferred tax assets in other Luxembourgish deferred tax assets unrecognition and derecognition attributable to the Group’s tax jurisdictions, partially offset by denominated in Euro. of other deferred tax assets, operating subsidiaries in Brazil, additional recognition of deferred partially offset by additional Mexico and Spain. They relate to tax assets for losses and other The 2014 net change in recognition of deferred tax assets credits claimed on research and deductible temporary differences measurement of deferred tax for losses and other deductible development, credits on foreign of previous years of (87). In 2015, assets of 306 primarily consists temporary differences of previous investment and tax sparing credits. the Company derecognized 0.4 of tax expense of 338 due to the years of (114). billion of previously recognized unrecognized part of deferred Other taxes deferred tax assets, out of which tax assets on write-downs of the Tax effects of foreign currency 0.3 billion relates to Luxembourg value of shares of consolidated translation Other taxes mainly include tax integration. The de-recognition subsidiaries in Luxembourg, withholding taxes on dividends, in Luxembourg represents the net tax expense of 492 due to The tax effects of foreign currency services, royalties and interests of reduction in projections of future unrecognition and derecognition translation of 153, 446 and (81) 65, 26 and (45), as well as mining taxable income in Luxembourg of other deferred tax assets, at December 31, 2015, 2014 and duties in Canada, Mexico and driven primarily by the challenging partially offset by additional 2013 respectively, refer mainly to Ukraine of (39), 30 and 106, flat tax market conditions affecting the recognition of deferred tax assets deferred tax assets and liabilities in Mexico of nil, nil and 5 and state steel industry and unfavorable for losses and other deductible of certain entities with a different tax in the United States of (21), 9 foreign exchange movements, temporary differences of previous functional currency than the and (28) in 2015, 2014 and 2013 partially offset by reductions in years of (524). currency applied for tax filing respectively. forecasted interest expense due purposes. In 2015 the effects are As mining tax involves both to the Company’s announced The 2013 net change in mainly due to depreciation of the current (including recoveries) plans in 2016 to repay debt with measurement of deferred tax Euro and the Canadian dollar in and deferred consequences the proceeds from a $3 billion equity assets of 2,067 primarily consists relation to the U.S. dollar. position can also be a benefit rights offering and selling its 35% of tax expense of 1,031 due to the depending e.g. on the temporary shareholding in Gestamp for unrecognized part of deferred Tax credits differences movement. €875 million. The taxable income tax assets on write-downs of the projection also includes the effect value of shares of consolidated The tax credits of (13), (63) of the anticipated elimination subsidiaries in Luxembourg, and (57) in 2015, 2014 and of the current USD exposure of tax expense of 1,150 due to 2013 respectively are mainly

Others

Others consist of:

Year Ended December 31, 2015 2014 2013 Tax contingencies/settlements (8) 83 295 Prior period taxes 96 3 13 Others (14) (16) 31 Total 74 70 339

The 2015 others of 74 primarily consist of prior period adjustments for 96 related mainly to Luxembourg and Mexico.

The 2014 others of 70 primarily consist of uncertain tax provisions for 83 which mainly relate to North America.

The 2013 others of 339 primarily consists of the settlement of two tax amnesty programs in Brazil of 222 and settlement agreements as a result of tax audits in Germany of 73.

9.2 Income tax recorded directly in equity

Income tax recognized in equity for the years ended December 31, 2015, 2014 and 2013 is as follows:

2015 2014 2013 Recognized in other comprehensive income on: Deferred tax expense (benefit) Unrealized gain (loss) on derivative financial instruments 4 64 48 Recognized actuarial gain (loss) 47 (94) 155 Foreign currency translation adjustments (83) (53) (66) Total (32) (83) 41 Recognized in retained earnings: Deferred tax expense - - 9 Gain on sale of non-controlling interests (32) (83) 50 152 Consolidated financial statements

9.3 Uncertain tax positions Some of these positions are management’s best judgment statements of operations or cash inherently uncertain and include given any changes in the facts, flows (see note 8 “Provisions, The Company operates in multiple those relating to transfer pricing circumstances, information contingencies and commitments”). jurisdictions with complex legal matters and the interpretation available and applicable tax and tax regulatory environments. of income tax laws applied laws. Considering all available In certain of these jurisdictions, in complex transactions. The information and the history of ArcelorMittal has taken income Company periodically reassesses resolving income tax uncertainties, tax positions that management its tax positions. Changes to the the Company believes that the believes are supportable and financial statement recognition, ultimate resolution of such matters are intended to withstand measurement, and disclosure will not have a material effect on challenge by tax authorities. of tax positions are based on the Company’s financial position,

9.4 Deferred tax assets and liabilities

The origin of deferred tax assets and liabilities is as follows:

Assets Liabilities Net 2015 2014 2015 2014 2015 2014 Intangible assets 16 16 (751) (1,012) (735) (996) Property, plant and equipment 444 441 (6,261) (7,647) (5,817) (7,206) Inventories 428 459 (409) (495) 19 (36) Financial instruments 4 46 (109) (183) (105) (137) Other assets 450 499 (368) (438) 82 61 Provisions 1,973 2,448 (166) (156) 1,807 2,292 Other liabilities 617 720 (683) (649) (66) 71 Tax losses carried forward 8,719 10,527 - - 8,719 10,527 Tax credits and other tax benefits carried forward 282 502 - - 282 502 Untaxed reserves - - (57) (120) (57) (120) Deferred tax assets / (liabilities) 12,933 15,658 (8,804) (10,700) 4,129 4,958

Deferred tax assets 6,625 7,962 Deferred tax liabilities (2,496) (3,004)

Deferred tax assets recognized by the Company as of December 31, 2015 are analyzed as follows:

Recognized deferred tax Gross amount Total deferred tax assets assets Unrecognized deferred tax assets Tax losses carried forward 77,852 22,905 8,719 14,186 Tax credits and other tax benefits carried forward 2,140 1,139 282 857 Other temporary differences 20,442 6,509 3,932 2,577 Total 30,553 12,933 17,620

Deferred tax assets recognized by the Company as of December 31, 2014 are analyzed as follows:

Recognized deferred tax Gross amount Total deferred tax assets assets Unrecognized deferred tax assets Tax losses carried forward 75,628 22,247 10,527 11,720 Tax credits and other tax benefits carried forward 2,194 1,439 502 937 Other temporary differences 19,650 5,693 4,629 1,064 Total 29,379 15,658 13,721 Consolidated financial statements 153

As of December 31, 2015, the consolidated subsidiaries recorded deferred tax assets denominated financial statements. In the event majority of the deferred tax assets by certain of the ArcelorMittal in Euro, and (vii) other significant that a history of recent losses is not recognized relate to tax losses group’s holding companies in and reliable sources of present, the Company relied on carried forward attributable to Luxembourg. Of the total tax operational income earned from convincing other evidence such as various subsidiaries located in losses carried forward, 12.5 billion ArcelorMittal’s European and the character of (historical) losses different jurisdictions (primarily may be subject to recapture in worldwide operating subsidiaries and tax planning to support the France, Germany, Luxembourg, the future if the write-downs for centralized distribution and deferred tax assets recognized. Spain and the United States) with that caused them are reversed procurement activities performed different statutory tax rates. The creating taxable income unless in Luxembourg. In performing For the period ended December amount of the total deferred tax the Company converts them the assessment, the Company 31, 2015 ArcelorMittal recorded assets is the aggregate amount to permanent through sales or estimates at which point in time approximately 37 (December of the various deferred tax assets other organizational restructuring its earnings projections are no 31, 2014: 11) of deferred recognized and unrecognized at activities. longer reliable, and thus taxable income tax liabilities in respect the various subsidiaries and not profits are no longer probable. of deferred taxation that would the result of a computation with a The Company believes that it is Accordingly, the Company has arise if temporary differences given blended rate. The utilization probable that sufficient future established consistent forecast on investments in subsidiaries, of tax losses carried forward is taxable profits will be generated to periods for its different income associates and interests in joint restricted to the taxable income of support the recognized deferred streams for estimating probable ventures were to be realized in the the subsidiary or tax consolidation tax asset for tax losses carried future taxable profits, against foreseeable future. No deferred group to which it belongs. The forward in Luxembourg. As part which the unused tax losses can tax liability has been recognized utilization of tax losses carried of its recoverability assessment be utilized in Luxembourg. in respect of other temporary forward also may be restricted the Company has taken into differences on investments by the character of the income, account (i) its most recent forecast At December 31, 2015, based in subsidiaries, associates and expiration dates and limitations on approved by management and upon the level of historical taxable interests in joint ventures because the yearly use of tax losses against the Board of Directors, (ii) the low income and projections for future the Company is in a position to taxable income. likelihood that the factors that taxable income over the periods in control the timing of the reversal have contributed to past losses in which the deductible temporary of the temporary difference and it The total amount of accumulated Luxembourg will recur, (iii) the fact differences are anticipated to is probable that such differences tax losses in Luxembourg that ArcelorMittal in Luxembourg reverse, management believes it will not reverse in the foreseeable with respect to the main tax is the main provider of funding is probable that ArcelorMittal will future. The amount of these consolidation amounts to to the Group’s consolidated realize the benefits of the deferred unrecognized deferred tax liabilities approximately 55.4 billion subsidiaries, leading to significant tax assets of 6,625 recognized. is approximately 456. as of December 31, 2015. Of amounts of taxable interest The amount of future taxable this amount 24.6 billion is income, (iv) lower interest expense income required to be generated 9.5 Tax losses, tax credits considered realizable, resulting due to the Company’s announced by ArcelorMittal’s subsidiaries to and other tax benefits carried in the recognition of 6.8 billion plans in 2016 to repay debt with utilize the deferred tax assets of forward of deferred tax assets at the proceeds from a $3 billion equity 6,625 is at least 24,441. Historically, applicable income tax rate rights offering and selling its 35% the Company has been able At December 31, 2015, the in Luxembourg. Under the shareholding in Gestamp for €875 to generate taxable income in Company had total estimated tax Luxembourg tax legislation tax million, (v) the implementation in sufficient amounts and believes losses carried forward of 77,852. losses can be carried forward 2015 of an Industrial Franchising that it will generate sufficient levels indefinitely and are not subject to Arrangement between of taxable income in coming years Such amount includes net any specific yearly loss utilization ArcelorMittal and numerous to permit the Company to utilize operating losses of 6,297 limitations. The tax losses carried worldwide operating subsidiaries, tax benefits associated with tax primarily related to subsidiaries in forward relate primarily to tax (vi) the effect of the anticipated losses carried forward and other Canada, Kazakhstan, Mexico, the deductible write-down charges elimination of the current USD deferred tax assets that have been Netherlands and the United States, taken on investments in shares of exposure of Luxembourgish recognized in its consolidated which expire as follows:

Year expiring Recognized Unrecognized Total 2016 26 2 28 2017 70 14 84 2018 73 9 82 2019 12 10 22 2020 63 44 107 2021 - 2035 1,321 4,653 5,974 Total 1,565 4,732 6,297 The remaining tax losses carried forward for an amount of 71,555 (of which 28,234 are recognized and 43,321 are unrecognized) are carried forward for unlimited period of time and primarily relate to the Company’s operations in Brazil, France, Germany, Luxembourg and Spain.

At December 31, 2015, the Company also had total estimated tax credits and other tax benefits carried forward of 2,140. 154 Consolidated financial statements

Such amount includes tax credits and other tax benefits of 910 primarily attributable to subsidiaries in Belgium, Spain and the United States of which 179 recognized and 731 unrecognized, which expire as follows:

Year expiring Recognized Unrecognized Total 2016 1 73 74 2017 - 80 80 2018 - 110 110 2019 - 1 1 2020 - 2 2 2021 - 2035 178 465 643 Total 179 731 910 The remaining tax credits and other tax benefits for an amount of 1,230 (of which 200 are recognized and 1,030 are unrecognized) are indefinite and primarily attributable to the Company’s operations in Belgium and Spain.

Tax losses, tax credits and other tax benefits carried forward are denominated in the currency of the countries in which the respective subsidiaries are located and operate. Fluctuations in currency exchange rates could reduce the U.S. dollar equivalent value of these tax losses carried forward in future years.

Note 10: Equity

10.1 Share details

The Company’s shares consist of the following:

December 31, 2013 Movement in year December 31, 2014 Movement in year * December 31, 2015 Issued shares 1,665,392,222 - 1,665,392,222 - 1,665,392,222 Treasury shares (11,792,674) 774,261 (11,018,413) 2,437,323 (8,581,090) Total outstanding shares 1,653,599,548 774,261 1,654,373,809 2,437,323 1,656,811,132 * refer to note 10.2 on the mandatorily convertible notes

Following the completion of an rights issue structured as non- which is valid for five years, the 800 Convertible Senior Notes offering of ordinary shares on statutory preferential subscription total authorized share capital was on May 15, 2014, the Company January 14, 2013, ArcelorMittal rights for ArcelorMittal €7.7 billion represented by 1,773, reclassified from reserves to increased share capital by shareholders. The Mittal family 091,461 shares without nominal retained earnings premiums paid €455 million (608) from €6,428 has committed to take up its pro- value. for an amount of 435 (309 net million (9,403) to €6,883 million rata entitlement corresponding of tax) with respect to expired (10,011) through the issuance to approximately $1.1 billion. At the Extraordinary General USD denominated call options of 104,477,612 new shares fully ArcelorMittal has entered Meeting held on May 8, 2013, on treasury shares acquired on paid up. The aggregate number into a standby underwriting the shareholders approved an December 18, 2010 in order to of shares issued and fully paid up commitment with three banks increase of the authorized share hedge its obligations arising from increased to 1,665,392,222. acting as joint global coordinators, capital of ArcelorMittal by €524 the potential conversion of the pursuant to which the latter million represented by 223 million 800 Convertible Senior Notes into On January 15, 2016, following undertook to underwrite the shares, or approximately 8% ArcelorMittal shares. the maturity of the mandatorily capital increase for the remaining of ArcelorMittal’s outstanding convertible notes (see 10.2 below), amount, subject to customary capital. Following this approval, Subordinated perpetual capital the Company increased share conditions. which is valid for five years, the securities capital by €570 million (622) total authorized share capital from €6,883 million (10,011) to Authorized shares was €8.2 billion represented by Subordinated perpetual capital €7,453 million (10,633) through 1,995,857,213 shares without securities issued by the Company the issuance of 137,967,116 new At the Extraordinary General nominal value. are classified as equity as the shares fully paid up. The aggregate Meeting held on May 8, 2012, Company has no contractual number of shares issued and fully the shareholders approved an 10.2 Equity instruments and hybrid obligation to redeem the paid up increased to 1,803,359,338. increase of the authorized share instruments securities and coupon payment capital of ArcelorMittal by €643 may be deferred under certain On February 5, 2016, ArcelorMittal million represented by 156 million Option premium on treasury circumstances. Coupons become announced a proposed capital shares, or approximately 10% shares payable whenever the Company increase of $3 billion subject to of ArcelorMittal’s outstanding makes dividend payments. shareholder approval by way of a capital. Following this approval, Following the repayment of the Coupon accruals are considered Consolidated financial statements 155

in the determination of earnings Mandatorily convertible notes Company determined the notes the mandatory convertible bonds for the purpose of calculating met the definition of a compound until ten business days before earnings per share. Mandatorily convertible notes financial instrument and as such the maturity date. Hera Ermac issued by the Company are determined the fair value of the invested the proceeds of the On September 28, 2012, the accounted for as compound financial liability component of bonds issuance and an equity Company issued subordinated financial instruments. The net the bond was 384 on the date contribution by the Company perpetual capital securities for present value of the coupon of issuance and recognized it as in notes issued by subsidiaries a nominal amount of 650 and payments at issuance date is long-term obligation. The value of the Company linked to the a coupon of 8.75%, which reset recognized as long-term obligation of the equity component of 1,838 values of shares of Erdemir and periodically over the life of the and carried at amortized cost. The was determined based upon the China Oriental Group Company securities, with the first reset after value of the equity component difference of the cash proceeds Ltd (“China Oriental”). On April five years and subsequently every is determined based upon the received from the issuance of 20, 2011, the Company signed five years thereafter. A step up difference of the cash proceeds the bond and the fair value of an agreement for an extension in interest of 0.25% would have received from the issuance of the the financial liability component of the conversion date of the occurred on the second reset notes and the net present value of on the date of issuance and is mandatory convertible bonds to date and a subsequent step up the financial liability component included in equity. January 31, 2013. On September of 0.75% (cumulative with the on the date of issuance and is 27, 2011, the Company increased initial 0.25%) fifteen years later. included in equity. During the fourth quarter of the mandatory convertible bonds The Company was entitled to call 2015, the Company delivered from 750 to 1,000. the securities in five years, ten On January 16, 2013, ArcelorMittal 2,275,026 treasury shares against years and on subsequent coupon issued mandatorily convertible 1,817,869 notes converted at the On December 18, 2012, the payment dates. As the Company subordinated notes (“MCNs”) with option of their holders. As a result Company signed an agreement had no obligation to redeem net proceeds of 2,222. The notes of such voluntary conversions, for an extension of the conversion the securities and the coupon have a maturity of 3 years, were the carrying amount of MCNs date of the mandatory convertible payment may have been deferred issued at 100% of the principal decreased by 38. On January 15, bonds to January 31, 2014. by the Company under certain amount and are mandatorily 2016, upon final maturity of the The other main features of the circumstances, it classified the converted into ordinary shares of MCNs, the remaining outstanding mandatory convertible bonds net proceeds from the issuance ArcelorMittal at maturity unless 88,182,131 notes were converted remained unchanged. of subordinated perpetual capital converted earlier at the option into 137,967,116 new common The Company determined securities (642 net of transaction of the holders or ArcelorMittal shares. Accordingly, share capital that this transaction led to the costs) as equity. Coupon payments or upon specified events in and additional paid-in-capital extinguishment of the existing to holders of subordinated accordance with the terms of the increased by 622 and 1,178, compound instrument and the perpetual capital securities in MCNs. The MCNs pay a coupon respectively and the carrying recognition of a new compound 2013 and 2014 were 57 and 22, of 6.00% per annum, payable amount of MCNs decreased by instrument including non- respectively. quarterly in arrears. The minimum 1,800. controlling interests for 949 (net of conversion price of the MCNs was tax and fees) and debt for 49. The On February 20, 2014, set at $16.75, corresponding to Mandatory convertible bonds difference between the carrying ArcelorMittal redeemed all of its the placement price of shares in amount of the previous instrument outstanding 650 subordinated the concurrent ordinary shares On December 28, 2009, the and the fair value of the new perpetual capital securities offering as described above, and Company issued through instrument amounted to 65 and following the occurrence of a the maximum conversion price Hera Ermac, a wholly-owned was recognized as financing costs “Ratings Agency Event”, as defined was set at approximately 125% subsidiary, 750 unsecured in the consolidated statements of in the terms of the securities. The of the minimum conversion and unsubordinated bonds operations. notes were redeemed for 657, at a price (corresponding to $20.94). mandatorily convertible into redemption price of 101% of the The minimum and maximum preferred shares of such subsidiary. principal amount, plus accrued conversion prices are subject to The bonds were placed privately coupon of 22. adjustment upon the occurrence with a Luxembourg affiliate of certain events, and were, as of Crédit Agricole (formerly of December 31, 2015, $15.98 Calyon) and are not listed. The and $19.98, respectively. The Company has the option to call 156 Consolidated financial statements

On January 17, 2014, the On November 20, 2015, the 10.3 Earnings per common share conversion of certain convertible conversion date of the 1,000 conversion date of the 1,000 bonds whenever the conversion mandatory convertible bonds was mandatory convertible bonds was Basic earnings per common share results in a dilutive effect. extended from January 31, 2014 extended from January 29, 2016 is computed by dividing net to January 29, 2016. The other to January 31, 2018. The other income (loss) by the weighted The following table provides the main features of the mandatory main features of the mandatory average number of common numerators and a reconciliation convertible bonds remained convertible bonds remained shares outstanding during the of the denominators used in unchanged. The Company unchanged. The Company year. calculating basic and diluted determined that this transaction determined that this transaction earnings per common share for led to the extinguishment of the led to the extinguishment of the Net income (loss) attributable to the years ended December 31, existing compound instrument and existing compound instrument ordinary shareholders takes into 2015, 2014 and 2013: the recognition of a new compound and the recognition of a new consideration dividend rights of instrument including non- compound instrument including preferred shareholders such as controlling interests for 902 (net of non-controlling interests for 880 holders of subordinated perpetual tax and fees) and debt for 91. The (net of cumulative tax and fees) capital securities. Diluted earnings difference between the carrying and debt for 106. The difference per share is computed by dividing amount of the previous instrument between the carrying amount income (loss) available to equity and the fair value of the new of the previous instrument holders by the weighted average instrument amounted to 49 and and the fair value of the new number of common shares and was recognized as financing costs instrument amounted to 79 and potential common shares from in the consolidated statements of was recognized as financing costs share unit plans and outstanding operations. in the consolidated statements of stock options as well as potential operations. common shares from the

Year Ended December 31, 2015 Year Ended December 31, 2014 Year Ended December 31, 2013 Net (loss) income attributable to equity holders of the parent (7,946) (1,086) (2,545) Interest assumed on the coupon and the premium for early redemption for subordinated perpetual capital securities - (14) (57) Net (loss) income considered for the purposes of basic and diluted earnings per share (7,946) (1,100) (2,602)

Weighted average common shares outstanding (in millions) for the purposes of basic and diluted earnings per share 1,795 1,791 1,780

For the purpose of calculating the years ended December 31, financial statements (“ArcelorMittal from its subsidiaries’ recognized earnings per common share, 2015, 2014 and 2013, respectively, SA”) which are prepared in gains, from the sale of its assets diluted weighted average because such share unit plans and accordance with IFRS, as or records share premium from common shares outstanding stock options are anti-dilutive. endorsed by the European Union. the issuance of common shares. excludes 8 million, 7 million and 5 ArcelorMittal SA has no significant Dividends are declared in U.S. million potential common shares 10.4 Dividends manufacturing operations of its dollars and are payable in either from share unit plans and 17 own. Accordingly, it can only pay U.S. dollars or in euros. million, 20 million and 22 million Calculations to determine the dividends or distributions to the potential common shares from amounts available for dividends extent it is entitled to receive stock options outstanding for are based on ArcelorMittal’s cash dividend distributions

Dividend per share Description Approved by (in $) Payout date Total (in millions of $) Dividend for financial year 2012 Annual General Shareholders’ meeting on May 8, 2013 0.20 July 15, 2013 332 Dividend for financial year 2013 Annual General Shareholders’ meeting on May 8, 2014 0.20 July 15, 2014 333 Dividend for financial year 2014 Annual General Shareholders’ meeting on May 5, 2015 0.20 June 15, 2015 331

Given the challenging global economic conditions and the Company’s priority to deleverage, ArcelorMittal’s Board of Directors proposed that no dividend be paid for financial year 2015. This proposal is subject to shareholder approval at the next annual general meeting on May 4, 2016.

Consolidated financial statements 157

10.5 Non-controlling interests

10.5.1 Non-wholly owned subsidiaries that have material non-controlling interests

The tables below provide a list of the principal subsidiaries which include non-controlling interests at December 31, 2015 and 2014 and for the year ended December 31, 2015 and 2014. % of non-controlling % of non-controlling Net income (loss) Net income (loss) interests and non- interests and non- attributable to non- Non-controlling attributable to non- Country of controlling voting controlling voting controlling interests interests at controlling interests Non-controlling incorporation and rights at December rights at December for the year ended December 31, for the year ended interests at Name of Subsidiary operation 31, 2015 31, 2014 December 31, 2015 2015 December 31, 2014 December 31, 2014 ArcelorMittal South Africa South Africa 47.98% 47.98% (301) 416 (8) 859 Sonasid1 Morocco 67.57% 67.57% (6) 109 10 143 ArcelorMittal Kryvyi Rih Ukraine 4.87% 4.87% 3 180 (6) 256 Belgo Bekaert Arames ("BBA") Brazil 45.00% 45.00% 25 128 41 175 Hera Ermac2 Luxembourg - - - 880 - 899 AMMC3 Canada 15.00% 15.00% 32 493 88 514 Arceo 4 Belgium 62.29% - 4 145 - - ArcelorMittal Liberia Ltd Liberia 15.00% 15.00% (239) (251) (13) (13) Other 5 198 - 241 Total (477) 2,298 112 3,074 1 Sonasid ArcelorMittal holds a controlling stake of 50% in Nouvelles Sidérurgies Industrielles. ArcelorMittal controls Nouvelles Sidérurgies Industrielles on the basis of a shareholders’ agreement which includes deadlock arrangements in favor of the Company. Nouvelles Sidérurgies Industrielles holds a 64.86% stake in Sonasid. The total non-controlling interests in Sonasid of 67.57% are the result of ArcelorMittal’s indirect ownership percentage in Sonasid of 32.43% through its controlling stake in Nouvelles Sidérurgies Industrielles. 2 Hera Ermac The non-controlling interests correspond to the equity component of the mandatory convertible bonds maturing on January 31, 2018. 3 AMMC On March 15, 2013 and May 30, 2013, a consortium led by POSCO and China Steel Corporation acquired a 15% non-controlling interest in joint venture partnerships holding ArcelorMittal’s Labrador Trough iron ore mining and infrastructure assets. 4 Arceo On June 1, 2015, the Company signed an agreement with Sogepa, an investment fund of the Walloon Region in Belgium, to restructure the research and development activities of their combined investment in Arceo, an investment previously accounted for under the equity method by the Company. Additionally, on June 11, 2015, Sogepa made a capital injection into Arceo, decreasing the Company’s percentage ownership from 50.1% to 37.7%. Following the signed agreement to restructure the activities of Arceo, the Company obtained control and fully consolidated the investment, which resulted in an increase in non-controlling interests by 148.

Summarized statements of financial position December 31, 2015

AM South Africa Sonasid AM Kryvyi Rih BBA Hera Ermac AMMC Arceo AM Liberia Current assets 831 180 913 172 191 2,434 79 84 Non-current assets 1,130 121 3,311 173 1,379 5,450 165 100 Total assets 1,961 301 4,224 345 1,570 7,884 244 184 Current liabilities 856 120 518 63 54 365 10 1,030 Non-current liabilities 214 30 342 22 91 3,602 1 597 Net assets 891 151 3,364 260 1,425 3,917 233 (1,443)

December 31, 2015 Summarized statements of operations AM South Africa Sonasid AM Kryvyi Rih BBA Hera Ermac AMMC Arceo AM Liberia Revenue 2,478 345 2,118 701 - 1,432 - 86 Net income (loss) (581) (10) 58 58 (242) 475 7 (1,516) Total comprehensive income (loss) (516) (14) 70 61 (242) 496 7 (1,516)

December 31, 2015 Summarized statements of cash flows AM South Africa Sonasid AM Kryvyi Rih BBA Hera Ermac AMMC Arceo AM Liberia Net cash provided by / (used in) operating activities (85) 17 174 60 25 146 17 (103) Net cash provided by / (used in) investing activities (99) (6) (154) (10) (23) (171) (142) (102) Net cash provided by / (used in) financing activities 307 15 - (52) (2) (97) 127 205 Impact of currency movements on cash (23) (2) (43) (4) - - (1) - Cash and cash equivalents: At the beginning of the year 39 37 127 18 - 318 - 1 At the end of the year 139 61 104 12 - 196 1 1

Dividend to non-controlling interests - (6) - (17) - (57) 158 Consolidated financial statements

Summarized statements of financial position December 31, 2014

AM South Africa Sonasid AM Kryvyi Rih BBA Hera Ermac AMMC Current assets 1,105 217 1,149 265 168 2,742 Non-current assets 1,746 147 5,099 272 1,692 5,436 Total assets 2,851 364 6,248 537 1,860 8,178 Current liabilities 765 134 652 131 14 381 Non-current liabilities 297 33 535 38 164 4,230 Net assets 1,789 197 5,061 368 1,682 3,567

December 31, 2014 Summarized statements of operations AM South Africa Sonasid AM Kryvyi Rih BBA Hera Ermac AMMC Revenue 3,216 485 3,087 981 - 2,049 Net income (loss) (17) 12 (130) 84 217 510 Total comprehensive income (loss) (15) 16 (133) 135 217 472

December 31, 2014 Summarized statements of cash flows AM South Africa Sonasid AM Kryvyi Rih BBA Hera Ermac AMMC Net cash provided by / (used in) operating activities 155 77 241 97 24 764 Net cash provided by / (used in) investing activities (247) (10) (192) (30) (26) (346) Net cash provided by / (used in) financing activities 12 (30) - (64) 2 (285) Impact of currency movements on cash (5) (2) - (2) - - Cash and cash equivalents: At the beginning of the year 124 2 78 17 - 185 At the end of the year 39 37 127 18 - 318

Dividend to non-controlling interests - (10) - (25) - (67)

10.5.2 Transactions with non- recognized directly in equity and issue, ArcelorMittal’s shareholding the plan. It is also proposed that a controlling interests attributed to the owners of the in ArcelorMittal South Africa B-BBEE transaction is undertaken parent. increased from 52% to 70.55%. to achieve a sustainable black Acquisitions of non-controlling ownership in the company. interests, which do not result ArcelorMittal South Africa Additionally, as part of ArcelorMittal South Africa has in a change of control, are ArcelorMittal South Africa’s now finalized the selection of a accounted for as transactions On January 15, 2016, ArcelorMittal transformation initiatives in order potential B-BBEE partner/s with with owners in their capacity South Africa completed a rights to maximize its score under the whom to commence negotiations as owners and therefore no offering fully underwritten by Broad-Based Black Economic to conclude the transaction for an goodwill is recognized as a ArcelorMittal. The total cash Empowerment (“B-BBEE”) Codes equity interest in the company. result of such transactions. In proceeds amounted to ZAR 4.5 of Good Practice, the company such circumstances, the carrying billion. ArcelorMittal subscribed launched on October 1, 2015 an amounts of the controlling and the capital increase through employee share ownership plan non-controlling interests are repayment of an outstanding following which the Ikageng adjusted to reflect the changes intragroup loan of ZAR 3.2 billion Broad-Based Employee Share Trust in their relative interests in and an additional cash injection of obtained an ownership interest the subsidiary. Any difference ZAR 0.5 billion. The intragroup loan (1.85% after consideration of the between the amount by which is being repaid in two tranches; the rights offering described above) the non-controlling interests are first tranche has been repaid and in ArcelorMittal South Africa adjusted and the fair value of the the second is expected to be paid to be attributed to qualifying consideration paid or received is in 2016. As a result of the rights employees upon vesting date of Consolidated financial statements 159

There were no transactions with non-controlling interests in 2015. Transactions with non-controlling interests in 2014 and 2013 were as follows: 2014 2013 Description ArcelorMittal Luxembourg AMMC) ArcelorMittal Liberia Total Non-controlling interests 23 (374) (28) (402) Purchase price (selling price), net 17* (1,100)* (24) (1,124) Adjustment to equity attributable to the equity holders of the parent 6 726 (4) 722 * Purchase price (selling price) was settled in cash Transactions with non-controlling interests include also the mandatory convertible bonds (see note 10.2). ArcelorMittal Luxembourg

On November 20, 2014, the Company acquired the remaining 0.14% of non-controlling interests in ArcelorMittal Luxembourg following a mandatory squeeze out procedure. The total consideration paid was 17. The Company recorded an increase of 6 directly in equity.

ArcelorMittal Liberia

On September 10, 2013, non-controlling interests in ArcelorMittal Liberia (Mining segment) decreased from 30% to 15% following a capital increase in which the government of Liberia was diluted. As a result of the dilution, the Company recorded a decrease of 4 directly in equity.

ArcelorMittal Mines Canada

On March 15, 2013 and May 30, 2013, a consortium led by POSCO, China Steel Corporation (“CSC”) and certain financial investors, completed the acquisition of a 15% interest in the joint venture partnerships holding ArcelorMittal’s Labrador Trough iron ore mining and infrastructure assets for total consideration of 1,100 in cash settled in two installments of 810 and 290 for an 11.05% interest and a 3.95% interest, respectively. As part of the transaction, POSCO and CSC entered into long-term iron ore off-take agreements proportionate to their joint venture interests. Upon completion of the sale, the Company recognized non-controlling interests for 374 and an increase of 726 directly in equity.

Note 11: Related parties

Transactions with related parties, including associates and joint ventures of the Company, were as follows:

11.1 Sales and trade receivables

Year ended December 31, December 31, Sales Trade receivables Transactions Category 2015 2014 2013 2015 2014 Calvert1 Joint Venture 1,271 1,136 - 6 28 Gonvarri Group Associate 1,233 1,456 1,364 32 91 Macsteel Group Joint Venture 516 579 497 22 25 I/N Kote L.P. Joint Venture 377 412 432 24 - Bamesa Group Associate 367 416 397 7 60 AMCDI2 Joint Venture 310 - - 2 - Gestamp Group Associate 310 297 281 2 35 CLN Group Associate 310 563 359 3 63 Borcelik Celik Sanayii Ticaret A.S. Associate 305 516 435 4 2 WDI Group Associate 181 238 207 - - Aperam Other 165 190 155 22 25 AM RZK3 Joint Venture 148 - - 29 - Stalprodukt S.A. Associate 146 180 191 16 38 Tameh4 Joint Venture 63 5 - 3 9 Stalprofil S.A. Associate 53 82 74 4 12 ArcelorMittal BE Group SSC AB Joint Venture 52 59 52 2 3 DHS Group Associate 38 33 57 7 7 Consolidated Wire Industries Limited Associate 34 50 40 1 - ArcelorMittal Algérie Spa5 Asset held for sale 19 93 - - 1 Uttam Galva Steels Limited Associate - 27 9 - 11 Other 226 274 220 30 59 Total 6,124 6,606 4,770 216 469 1 The joint venture Calvert LLC was acquired on February 26, 2014 (see note 2). 2 The joint venture ArcelorMittal CLN Distribuzione Italia S.r.l. (“AMCDI”) was established on March 30, 2015 (see note 2). 3 The joint venture ArcelorMittal RZK Celik Servis Merkezi Sanayi ve Ticaret Anonim Sirketi (“AM RZK”) was established on February 26, 2015 (see note 2). 4 The joint venture Tameh was acquired on December 11, 2014 (see note 2). 5 ArcelorMittal Algérie Spa became an associate on December 17, 2013 and is classified as held for sale at December 31, 2015 (see note 2). 160 Consolidated financial statements

11.2 Purchases and trade payables

Year ended December 31, December 31, Purchases Payables Transactions Category 2015 2014 2013 2015 2014 Tameh1 Joint Venture 245 12 - 58 19 Empire Iron Mining Partnership Associate 228 257 203 - - Gonvarri Group Associate 176 193 168 27 14 Borcelik Celik Sanayii Ticaret A.S. Associate 165 175 165 30 37 Aperam Other 131 168 113 11 34 Exeltium Joint Venture 80 87 89 7 - CFL Cargo S.A. Associate 58 74 66 8 8 Baycoat L.P. Joint Venture 42 43 48 5 6 Vulkan Energiewirtschaft Oderbrücke GmbH Other 39 44 45 6 7 Borusan Demir Delik Sanayi ve Ticaret A.S. Associate 33 34 43 2 2 Alkat sp. z.o.o. Associate 32 36 34 3 3 Uttam Galva Steels Limited Associate 31 65 67 - 10 Steeltrack Associate 26 22 1 3 1 Eko SchrottRecycling GmbH Other 24 35 34 1 3 Macsteel Group Joint Venture 14 17 - - - Calvert2 Joint Venture 13 - - 32 109 DHS Group Associate 1 12 45 - 1 Kiswire ArcelorMittal Ltd.3 Other - 13 39 - - Other 122 68 150 63 36 Total 1,460 1,355 1,310 256 290 1 The joint venture Tameh was acquired on December 11, 2014 (see note 2). 2 The joint venture Calvert LLC was acquired on February 26, 2014 (see note 2). 3 The joint venture Kiswire ArcelorMittal Ltd. was sold in May 2014 (see note 2). Purchases include purchase transactions until May 2014.

11.3 Other transactions with In May 2014 ArcelorMittal entered season up to a maximum of 1.5 $2.2 million and $1.9 million, related parties into a 5-year off take agreement million tonnes. respectively. Audit-related fees with its joint venture Baffinland, primarily include fees for employee At December 31, 2015, the whereby it will buy the lesser of Transactions with related parties benefit plan audits. Company had receivables from 50% of the annual quantity of iron are mainly related to sales and ArcelorMittal Tubular Products ore produced by Baffinland and 2 purchases of raw materials and Tax Fees. Fees relating to tax Al Jubail for the construction million tonnes of iron ore per year. steel products. planning, advice and compliance of a seamless tube mill in Saudi The purchase price is referenced to in 2015 and 2014 were $1.0 million Arabia amounting to 99 including the Platts IODEX 62% Fe CFR China Note 12: Principal accountant fees and $1.5 million, respectively. unsecured loans of 85 with various index and until the end of 2017 and services maturity dates ranging from 1 to ArcelorMittal will pay advances to 3 years. Baffinland the equivalent of 80% Deloitte Audit S.à.r.l. acted as All Other Fees. Fees in 2015 and of the purchase for the iron ore the principal independent 2014 for all other services were As of December 3, 2014, AM stockpiled by Baffinland outside registered public accounting firm $0.1 million and $0.3 million, Calvert signed a member capital the sailable season during which for ArcelorMittal for the fiscal respectively. All other fees relate expenditure loan agreement with the iron ore can be shipped. years ended December 31, 2015 to services not included in the first the joint venture Calvert LLC and and 2014. Set forth below is a three categories. as of December 31, 2015, the loans In May 2014, ArcelorMittal also breakdown of fees for services amounted to 52 including accrued entered into a sales contract with rendered in 2015 and 2014. interest. The loans bear interest Baffinland whereby it agreed from 3% to 3.75% and have various to act as a sales agent for all of Audit Fees. Audit fees in 2015 and maturity dates ranging from 1 to Baffinland’s iron ore (excluding the 2014 included $25.8 million and 28 years. shipments subject to the off take $30.5 million, respectively, for the agreement mentioned above). In audits of financial statements, and Other non-current liabilities addition, until December 31, 2015, $0.7 million and $0.7 million in include 42 with respect to loan the Company agreed to advance 2015 and 2014, respectively, for payable to Baffinland Iron Mines to Baffinland the equivalent of regulatory filings. Corporation in relation to the 80% of the purchase price of the capital increase in Baffinland. 50% of iron ore stockpiled by Audit-Related Fees. Audit-related Baffinland outside the sailable fees in 2015 and 2014 were 161 Report of the réviseur d’entreprises agréé

Report of the réviseur d’entreprises agréé

To the Shareholders of ArcelorMittal Société Anonyme 24-26, Boulevard d’Avranches L-1160 Luxembourg Grand Duchy of Luxembourg

Report on the consolidated financial statements

Following our appointment by the General Meeting of the shareholders held on May 5, 2015, we have audited the accompanying consolidated financial statements of ArcelorMittal and its subsidiaries, which comprise the consolidated statement of financial position as at December 31, 2015, and the consolidated statements of operations, other comprehensive income, changes in equity and cash flows for the year then ended, and a summary of significant accounting policies and other explanatory information.

Responsibility of the Board of Directors for the consolidated financial statements

The Board of Directors is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with International Financial Reporting Standards as adopted by the European Union, and for such internal control the Board of Directors determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

Responsibility of the réviseur d’entreprises agréé

Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing as adopted for Luxembourg by the Commission de Surveillance du Secteur Financier. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the consolidated financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the réviseur d’entreprises agréé’s judgement, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the réviseur d’entreprises agréé considers internal control relevant to the entity’s preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the Board of Directors, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the consolidated financial statements give a true and fair view of the consolidated financial position of ArcelorMittal and its subsidiaries as of December 31, 2015, and of its consolidated financial performance and its consolidated cash flows for the year then ended in accordance with International Financial Reporting Standards as adopted by the European Union.

Report on other legal and regulatory requirements

The consolidated management report, which is the responsibility of the Board of Directors, is consistent with the consolidated financial statements.

For Deloitte Audit société à responsabilité limitée Cabinet de révision agréé

Vafa Moayed, Réviseur d’entreprises agréé Partner

February 23, 2016 560, rue de Neudorf L-2220 Luxembourg

162 Financial statements

Financial statements of ArcelorMittal parent company Management report 163

Management report: Please refer to pages 2 to 64 except for the two following updates on recent developments.

• On March 11, 2016, ArcelorMittal announced the terms of a $3 billion capital increase by way of the issuance of 1,803,359,338 rights at a ratio of 7 shares for 10 rights following the adoption of enabling resolutions by the extraordinary general meeting of shareholders on March 10, 2016. The rights issue for an aggregate of 1,262,351,531 shares is structured as non-statutory preferential subscription rights for ArcelorMittal shareholders. The Mittal family has committed to take up its pro-rata 37.38% entitlement corresponding to approximately $1.1 billion. ArcelorMittal has entered into a standby underwriting commitment with different banks acting as joint global coordinators, pursuant to which the latter undertook to underwrite the capital increase for the remaining amount, subject to customary conditions. Subscription price of €2.20 per share represents a 35.3% discount to the theoretical ex-rights price, based on the closing price of ArcelorMittal’s shares on Euronext Amsterdam on March 10, 2016. Rights exercise periods run from March 15, 2016 until March 29, 2016 for rights held via book entry in Depositary Trust Company (“DTC”) or in the New York rights register and March 30, 2016 for rights held in the European clearing systems. Delivery of the new shares pursuant to rights held through the European clearing systems and in the European rights register is expected to take place on or about April 8, 2016. Delivery of the new shares to holders whose rights are held via book entry in DTC or directly on the New York rights register is expected to take place on or about April 11, 2016.

• On March 10, 2016, at the extraordinary general meeting, the shareholders approved a decrease of the authorized share capital of the Company by €8,049 million though a reduction of the accounting par value per share to €0.10 and a subsequent increase by €3 billion. Following this approval, which is valid for five years, the total authorized share capital was €3,200 million represented by 31,995,857,213 shares without par value. Following the extraordinary general meeting, ArcelorMittal also decreased share capital by €7,273 (10,376) from €7,453 (10,633) to €180 (257) through a reduction of the accounting par value per share to €0.10 without any distribution to shareholders, the balance being allocated to additional paid-in capital. The aggregate number of shares issued and fully paid up amounts to 1,803,359,338. The ordinary shares do not have a par value. 164 Management report

Chief executive officer and chief financial officer’s responsibility statement

We confirm, to the best of our knowledge, that:

1. the financial statements of ArcelorMittal parent company presented in this Report and prepared in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board and as adopted by the European Union, give a true and fair view of the assets, liabilities, financial position, profit or loss of ArcelorMittal; and

2. the management report includes a fair review of the development and performance of the business and position of ArcelorMittal and undertakings included within the consolidation taken as a whole, together with a description of the principal risks and uncertainties they face.

By order of the Board of Directors

Chief executive officer Chief financial officer

Lakshmi N. Mittal Aditya Mittal

March 23, 2016 March 23, 2016 Financial statements 165

ArcelorMittal Statements of financial position (millions of U.S. dollars, except share and per share data)

Assets December 31, 2015 December 31, 2014 Current assets: Cash and cash equivalents (note 4) 2,602 2,266 Restricted cash (note 4) - 23 Current loans to related parties (note 11) 1,219 1,286 Prepaid expenses and other current assets, including 1,217 and 567 with related parties at December 31, 2015 and 2014, respectively (notes 5 and 11) 1,262 756 Total current assets 5,083 4,331 Non-current assets: Intangible assets (note 6) 30 38 Property, plant and equipment (note 7) 3 8 Investments in subsidiaries (note 8) 42,392 75,052 Investments in associates, joint ventures and other investments (note 9) 612 1,119 Non-current loans to related parties (note 11) 8,963 11,614 Deferred tax assets (note 18) 6,803 7,898 Other assets (note 10) 118 115 Total non-current assets 58,921 95,844 Total assets 64,004 100,175

Liabilities and equity December 31, 2015 December 31, 2014 Current liabilities Short-term debt and current portion of long-term debt (note 12) 1,769 1,097 Current loans from related parties (note 11) 3,216 4,768 Accrued expenses and other liabilities, including 502 and 635 with related parties at December 31, 2015 and 2014, respectively (notes 11 and 19) 1,032 1,208 Total current liabilities 6,017 7,073 Non-current liabilities: Long-term debt, net of current portion (note 12) 16,794 16,349 Non- current loans from related parties (note 11) 5,767 7,334 Deferred employee benefits (note 22) 17 20 Other long-term obligations (note 20) 26 238 Total non-current liabilities 22,604 23,941 Total liabilities 28,621 31,014 Commitments and contingencies (notes 21 and 23) Equity : (note 14) Common shares 10,011 10,011 Treasury shares (11) (20) Additional paid-in capital 19,291 19,255 Mandatorily convertible notes 1,800 1,838 Retained earnings 3,229 37,055 Reserves 62 102 Legal reserve 1,001 920 Total equity 35,383 69,161 Total liabilities and equity 64,004 100,175

The accompanying notes are an integral part of these financial statements. 166 Financial statements

ArcelorMittal Statements of operations and statements of other comprehensive income (millions of U.S. dollars, except share and per share data)

Year ended Year ended December 31, 2015 December 31, 2014 Income from industrial franchise agreement fees (note 11) 841 - General and administrative expenses, including 959 and 630 with related parties in 2015 and 2014 (notes 11 and 15) (1,071) (614) Operating loss (230) (614) Income from subsidiaries and associates (note 17) 5,999 2,031 Impairment of investments (notes 8 and 9) (34,398) (99) Impairment of loans (note 11) (1,656) - Financing costs - net, including 394 and 588 from related parties in 2015 and 2014, respectively (notes 11 and 16) (3,082) (1,436) Loss before taxes (33,367) (118) Income tax (expense) benefit (note 18) (47) 606 Net income (loss) (33,414) 488

Year ended Year ended December 31, 2015 December 31, 2014 Earnings (loss) per common share (in U.S. dollars) Basic and diluted (4.43) (0.61) Weighted average ordinary shares outstanding (in millions) Basic and diluted 1,795 1,791

Year ended Year ended December 31, 2015 December 31, 2014 Net income (loss) (33,414) 488 Items that can be recycled to the statements of operations Available-for-sale investments: Gain (loss) arising during the period (39) 113 Reclassification adjustments for loss (gain) included in the statements of operations - (12) (39) 101 Items that cannot be recycled to the statements of operations Employee benefits Recognized actuarial (losses) gains (1) 2 Other comprehensive income (loss) (40) 103 Total comprehensive income (loss) (33,454) 591

The accompanying notes are an integral part of these financial statements. Financial statements 167

ArcelorMittal Statements of changes in equity (millions of U.S. dollars, except share and per share data)

Reserves Items that cannot be recycled to the Items that can be recycled to statements of the statements of operations operations Unrealized Unrealized Subordinated gains (losses) gains (losses) perpetual Mandatorily Additional on available- on derivative Recognized Treasury capital convertible paid-in Retained for-sale financial actuarial Shares 1.2 Share capital shares securities notes capital earnings Legal reserve financial assets instruments (losses) gains Total Equity Balance at December 31, 2013 1,665 10,011 (21) 650 1,838 19,271 37,218 920 - (309) (1) 69,577 Net income (loss) ------488 - - - - 488 Other comprehensive ------101 - 2 103 income (loss) Total comprehensive income ------488 - 101 - 2 591 (loss) Recognition of share-based - - 16 - - (16) 24 - - - - 24 payments (note 14) Redemption of subordinated - - - (650) - - (7) - - - - (657) perpetual capital securities (note 14) Option premiums on treasury ------(309) - - 309 - - shares (note 14) Acquisition of treasury shares - - (15) ------(15) Dividend (note 14) ------(333) - - - - (333) Coupon on subordinated ------(22) - - - - (22) perpetual capital securities Directors' fees ------(2) - - - - (2) Other ------(2) - - - - (2) Balance at December 31, 2014 1,665 10,011 (20) - 1,838 19,255 37,055 920 101 - 1 69,161 Net income (loss) ------(33,414) - - - - (33,414) Other comprehensive ------(39) - (1) (40) income (loss) Total comprehensive income ------(33,414) - (39) - (1) (33,454) (loss) Recognition of share-based - - 4 - - 16 - - - - - 20 payments (note 14) Voluntary conversion of 3 - 18 - (38) 20 ------mandatorily convertible notes (note 14) Acquisition of treasury shares (4) - (13) ------(13) Dividend (note 14) ------(333) - - - - (333) Directors' fees ------(2) - - - - (2) Allocation to legal reserve ------(81) 81 - - - - Other ------4 - - - - 4 Balance at December 31, 2015 1,664 10,011 (11) - 1,800 19,291 3,229 1,001 62 - - 35,383

1 Excludes treasury shares held by the Company 2 In millions of shares

The accompanying notes are an integral part of these financial statements. 168 Financial statements

ArcelorMittal Statements of cash flows (millions of U.S. dollars, except share and per share data)

Year ended Year ended December 31, 2015 December 31, 2014 Operating activities: Net income (loss) (33,414) 488 Adjustments to reconcile net income to net cash provided by operations and payments: Depreciation (note 6 and note 7) 13 8 Impairment of investments (note 8 and note 9) 34,398 99 Impairment of financial loans (note 11) 1,656 - Net interest (note 16) 793 692 Income tax expense (benefit) (note 18) 47 (606) Change in fair value adjustments on call option on the mandatory convertible bonds (note 13) 108 (112) Loss on disposal of financial assets (note 16) 747 62 Income from subsidiaries and associates (note 17) (5,999) (2,031) Unrealized foreign exchange effects, other provisions and non-cash operating expenses, net 1,078 535 Changes in assets and liabilities that provided (required) cash, net of acquisitions: Interest paid (1,631) (1,775) Interest received 785 933 Taxes received 227 841 Dividends received 5,979 2,031 Payables for services related to industrial franchise agreement 282 - Receivables for industrial franchise agreement fees (682) - Other working capital and provisions movements (485) 229 Net cash provided by operating activities 3,902 1,393 Investing activities: Purchase of property, plant and equipment and intangibles (note 6 and note 7) (1) (4) Investments in subsidiaries, associates, joint ventures and other investments (note 8 and note 9) (3,273) (469) Disposals of financial assets 1,377 450 Proceeds from loans granted to subsidiaries 1,520 3,216 Loans granted to subsidiaries (2,172) (2,705) Other investing activities net 30 30 Net cash provided (used in)/provided by investing activities (2,519) 518 Financing activities: Payments of subordinated perpetual capital securities (note 14) - (657) Proceeds from short-term debt 557 3,802 Proceeds from long-term debt 3,413 2,133 Payments of short-term debt (4,182) (3,315) Payments of long-term debt (500) (1,250) Dividends paid (333) (333) Other financing activities net (2) (25) Net cash (used in)/provided by financing activities (1,047) 355 Net increase (decrease) in cash and cash equivalents 336 2,266 Cash and cash equivalents: At the beginning of the year 2,266 - At the end of the year 2,602 2,266

The accompanying notes are an integral part of these financial statements Financial statements 169

Note1 - General chapter IIbis and art 72bis of the depreciation when the On May 12, 2014, the IASB Luxembourg law of December 19, revaluation method is applied published amendments to IAS 16 ArcelorMittal (the “Company”) 2002 as modified by the law of o IAS 24 “Related Party Disclosure”, “Property, Plant and Equipment” was incorporated as a “Société December 10, 2010. provides additional guidance and IAS 38 “Intangible Assets”. Anonyme” under Luxembourg law for the definition of key The IASB clarified that the use on June 8, 2001 for an unlimited Adoption of new IFRS standards, management personnel of revenue-based methods period. amendments and interpretations to calculate the depreciation applicable in 2015 o IAS 38 “Intangible Assets”, of an asset is not appropriate On November 6, 2014, the provides additional guidance for because revenue generated registered office of the Company On January 1, 2015, the the proportionate restatement by an activity that includes was transferred to 24-26 boulevard Company adopted the following of accumulated depreciation the use of an asset generally d’Avranches, Luxembourg City amendments which did not have when the revaluation method is reflects factors other than the and is registered at the Register a material impact on the financial applied consumption of the economic of Trade and Commerce of statements of the Company: benefits embodied in the asset. Luxembourg under the number • Annual Improvements 2011- The IASB also clarified that revenue B82.454. • Amendments to IAS 19 2013 published by the IASB on is generally presumed to be an “Employee Benefits”, published December 12, 2013 as part of its inappropriate basis for measuring The financial year of the Company on November 21, 2013, clarify the annual improvements process the consumption of the economic starts on January 1 and ends on requirements that relate to how made amendments to the benefits embodied in an intangible December 31 each year. contributions from employees following standards: asset. This presumption, however, or third parties that are linked to can be rebutted in certain limited The Company’s corporate goal is service should be attributed to o IFRS 1 “First-time Adoption circumstances. The amendments the manufacturing, processing periods of service. of International Financial are effective for annual periods and marketing of steel products, Reporting Standards”, provides beginning on or after January all other metallurgical products, • Annual Improvements 2010- additional guidance for the 1, 2016, with early application mining products and any other 2012 published by the IASB on effectiveness of IFRSs permitted. The adoption of these activity directly or indirectly December 12, 2013 as part of its new amendments will not have a related thereto. The Company annual improvements process o IFRS 3 “Business Combinations”, material impact to the Company’s realizes its corporate goal either made amendments to the clarifies the scope of financial statements. directly or through the creation of following standards: the exception for joint companies or the acquisition and arrangements On June 30, 2014, the IASB issued holding of interests in companies, o IFRS 2 “Share-based Payment”, amendments to IAS 16 and IAS partnerships, associations, amends the definition of o IFRS 13 “Fair Value 41 “Agriculture” which changes consortia and joint-ventures. vesting condition and market Measurement”, clarifies the the financial reporting for bearer condition and adds definitions scope of the portfolio exception plants, such as grape vines, These financial statements for performance condition and rubber trees and oil palms. The correspond to the stand alone service condition o IAS 40 “Investment Property”, IASB decided that bearer plants financial statements of the parent provides clarification of the should be accounted for and company, ArcelorMittal, and were o IFRS 3 “Business Combinations”, interrelationship of IFRS 3 and measured after initial recognition authorized for issuance on March provides additional guidance IAS 40 when classifying property on a cost or revaluation basis in 23, 2016 by the Company’s Board for accounting for contingent as investment property or accordance with IAS 16, because of Directors. In conformity with the consideration in a business owner-occupied property their operation is similar to that of requirements of Luxembourg laws combination manufacturing. Consequently, the and regulations, the Company New IFRS standards and amendments include them within publishes consolidated financial o IFRS 8 “Operating Segments”, interpretations applicable from the scope of IAS 16, instead of IAS statements in accordance with provides clarification of 2016 onward 41. The produce growing on bearer International Financial Reporting the requirements for the plants will remain within the Standards (“IFRS”) as issued by aggregation of operating On May 6, 2014, the IASB scope of IAS 41. The amendments the International Accounting segments and the reconciliation published amendments to are effective for annual periods Standards Board (“IASB”) and as of the total of the reportable IFRS 11 “Joint Arrangements”. beginning on or after January adopted by the European Union. segments’ assets to the entity’s The amendments clarify the 1, 2016, with early application assets accounting for acquisitions of permitted. The adoption of these an interest in a joint operation amendments will not have a Note 2 – Basis of presentation o IFRS 13 “Fair Value when the operation constitutes material impact to the Company’s Measurement”, provides a business. The amendments financial statements. Statement of compliance additional guidance for the are effective for annual periods measurement of short-term beginning on or after January On August 12, 2014, the IASB The financial statements have receivables and payables 1, 2016, with early application published amendments to IAS 27 been prepared in accordance with permitted. The adoption of these which will allow entities to use IFRS as adopted by the European o IAS 16 “Property, Plant and new amendments will not have a the equity method to account for Union and in particular with IAS Equipment”, provides additional material impact to the Company’s investments in subsidiaries, joint 27 Separate Financial Statements guidance for the proportionate financial statements. ventures and associates in their as well as in accordance with restatement of accumulated separate financial statements. 170 Financial statements

These amendments are effective and disclosure requirements Company does not expect that On September 11, 2014, the IASB for annual periods beginning related to materiality, subtotals, the adoption of this new standard issued amendments to IFRS 10 and on or after January 1, 2016, with disaggregation and accounting will have a material impact to its IAS 28 “Investments in Associates early application permitted. policies. These amendments financial statements. and Joint Ventures” which address The adoption of these new are effective for annual periods an inconsistency between the amendments will not have an beginning on or after January On July 24, 2014, the IASB issued requirements in IFRS 10 and those impact on the financial statements 1, 2016, with early application the final version of IFRS 9 “Financial in IAS 28 in dealing with the sale of the Company as it does not permitted. The adoption of these Instruments (2014)” which replaces or contribution of assets between intend to use the equity method new amendments will not have a IAS 39, bringing together the an investor and its associate or to account for investments in material impact on the financial classification and measurement, joint venture. The amendments subsidiaries, joint ventures and statements of the Company. impairment and hedge set out that a full gain or loss associates in its separate financial accounting. The final version of the is recognized when the assets statements. The Company will not early adopt standard contains requirements in constitute a business or a partial the new accounting standards and the following areas: gain or loss is recognized when the On September 25, 2014, the IASB amendments. assets do not constitute a business. issued Annual Improvements (a)Classification and measurement: On December 17, 2015, the IASB 2012-2014 to make amendments New IFRS standards and Financial assets are classified issued an amendment formalizing to the following standards: amendments not yet endorsed by and measured by reference the deferral of these amendments the European Union to the business model within indefinitely. The Company does • IFRS 5 “Non-current Assets which they are held and not expect that the adoption of Held for Sale and Discontinued On January 30, 2014, the IASB their contractual cash flow these new amendments will have Operations” introduces guidance issued IFRS 14 “Regulatory Deferral characteristics. Financial a material impact to its financial relating to changes in methods Accounts”. The aim of this standard liabilities are classified in a statements. of disposal, is to enhance the comparability similar manner to IAS 39, of financial reporting by entities however there are differences On December 18, 2014, the IASB • IFRS 7 “Financial Instruments: that are engaged in rate-regulated in the requirements regarding issued amendments to IFRS 10, Disclosures” provides additional activities. This standard is effective the measurement of an entity’s IFRS 12 and IAS 28 which clarify guidance to clarify whether a for annual periods beginning own credit risk. the scope and measurement servicing contract is continuing on or after January 1, 2016, with method regarding consolidation involvement in a transferred early application permitted. The (b) Impairment: The standard and disclosure of investment asset and clarifies the adoption of this new standard introduces an ‘expected entities. These amendments applicability of the amendments will not have an impact on the credit loss’ model for are effective for annual periods to IFRS 7 on offsetting disclosure financial statements of the the measurement of the beginning on or after January to condensed interim financial Company as it applies to IFRS first- impairment of financial 1, 2016, with early application statements, time adopters. assets; it is therefore no longer permitted. The adoption of these necessary for a credit event to new amendments will not have an • IAS 19, clarifies determination of On May 28, 2014, the IASB issued have occurred before a credit impact on the financial statements the discount rate in a regional IFRS 15 “Revenue from Contracts loss is recognized. of the Company as they apply to market sharing the same with Customers” which provides a investment entities. currency, unified framework for determining (c) Hedge accounting: The the timing, measurement and standard introduces a new On January 13, 2016, the IASB • IAS 34 “Interim Financial recognition of revenue. The hedge accounting model that issued IFRS 16 “Leases” which Reporting” clarifies the meaning focus of the new standard is to is designed to be more closely will replace IAS 17 “Leases”. of ‘elsewhere in the interim recognize revenue as performance aligned with how entities This new standard specifies report’ and the requirements obligations are met rather than undertake risk management how to recognize, measure, relating to cross-reference based on the transfer of risks activities when hedging present and disclose leases. The disclosure in the interim financial and rewards. IFRS 15 includes a financial and non-financial risk standard provides a single lessee report. comprehensive set of disclosure exposures. accounting model, requiring requirements including qualitative lessees to recognize assets and The amendments will be effective and quantitative information (d) Derecognition: The liabilities for all leases unless the from annual periods commencing about contracts with customers to requirements for derecognition lease term is 12 months or less on or after January 1, 2016, with understand the nature, amount, of financial assets and liabilities or the underlying asset has a low early application permitted. timing and uncertainty of revenue. are carried forward from IAS 39. value. This standard is effective The adoption of these new The standard supersedes IAS 18 for annual periods beginning amendments will not have a “Revenue”, IAS 11 “Construction IFRS 9 is effective for annual on or after January 1, 2019, with material impact to the Company’s Contracts” and a number of periods beginning on or after early application permitted if IFRS financial statements. revenue-related interpretations. January 1, 2018, with early 15 has also been applied. The On September 11, 2015, the IASB application permitted. The Company does not expect that On December 18, 2014, the issued an amendment formalizing Company does not expect that the adoption of this new standard IASB also issued amendments a one-year deferral of the effective the adoption of this new standard will have a material impact to its to IAS 1 “Presentation of date for annual periods beginning will have a material impact to its financial statements. Financial Statements” which on or after January 1, 2018, with financial statements. clarify various presentation early application permitted. The Financial statements 171

On January 19, 2016, the significant effect on the amounts The levels are as follows: not quoted in an active market. IASB issued amendments to recognized in the financial Such assets are recognized initially IAS 12 “Income Taxes”. These statements is included in the Level 1: Quoted prices in active at fair value plus any directly amendments clarify how to following note. markets for identical assets or attributable transaction costs. account for deferred tax assets liabilities that the entity can access Subsequent to initial recognition, related to debt instruments Note 3 – Significant accounting at the measurement date; loans and other financial assets are measured at fair value and how policies measured at amortized cost using to recognize deferred tax assets Level 2: Significant inputs the effective interest method, less for unrealized losses. These The accounting policies set other than within Level 1 that are any impairment losses. Loans and amendments are effective for out below have been applied observable for the asset or liability, other financial assets comprise annual periods beginning on consistently by the Company to all either directly (i.e.: as prices) or receivables from other ArcelorMittal or after January 1, 2017, with periods presented in these financial indirectly (i.e.: derived from prices); group entities, advances to early application permitted. The statements. suppliers and other receivables. Company is still in the process of (a)Foreign currency Level 3: Inputs for the assets or assessing whether there will be liabilities that are not based on Cash and cash equivalents a material change to its financial Transactions in foreign currencies observable market data and require statements upon adoption of are translated to the functional management assumptions or Cash and cash equivalents consist these new amendments. currency of the Company at inputs from unobservable markets. of cash and short-term highly exchange rates at the dates of the liquid investments that are readily Basis of measurement transactions. Monetary assets and (c) Financial instruments convertible to cash with original liabilities denominated in foreign maturities of three months or less The financial statements have currencies at the reporting date (i)Non-derivative financial assets at the time of purchase and are been prepared on a historical are translated to the functional carried at cost plus accrued interest, cost basis, except for derivative currency at the exchange rate at The Company initially recognizes which approximates fair value. financial instruments and that date and the related foreign non-derivative financial assets on available-for-sale financial assets currency gain or loss are reported the date that they are originated, •Non-derivative financial liabilities which are measured at fair value. within financing costs in the which is the date that the Company and equity instruments statements of operations. becomes a party to the contractual Functional and presentation provisions of the instrument. Classification as debt or equity currency Non-monetary assets and liabilities denominated in foreign currencies The Company derecognizes Debt and equity instruments These financial statements are that are measured at fair value a financial asset when the are classified as either financial presented in US dollars which are translated to the functional contractual rights to the cash liabilities or as equity in accordance is the Company’s functional currency at the exchange rate at flows from the asset expire, or it with the substance of the currency. Unless otherwise stated, the date that the fair value was transfers the right to receive the contractual arrangement. all amounts are rounded to the determined and the related gains contractual cash flows from the nearest million, except share and and losses are reported in the financial asset in a transaction in Equity instruments earnings per share data. statements of other comprehensive which substantially all the risks income.. Non-monetary items in a and rewards of ownership of the Any contract that evidences a Use of estimates and judgments foreign currency that are measured financial asset are transferred. Any residual interest in the assets at historical cost are translated interest in transferred financial of an entity after deducting all The preparation of financial using the exchange rate at the assets that is created or retained of its liabilities is accounted for statements in conformity with date of the transaction. Foreign by the Company is recognized as a as an equity instrument. Equity IFRS requires management to currency differences arising from separate asset or liability. instruments issued by the make judgments, estimates translation of non-monetary assets Company are recorded at the and assumptions that affect the and liabilities are recognized in the Financial assets and liabilities proceeds received, net of direct application of accounting policies statements of operations. are offset and the net amount issuance costs. A contract that is and the reported amounts of presented in the statements of settled by the Company receiving assets, liabilities, income and (b)Fair value financial position when, and only or delivering a fixed number expenses. Actual results may differ when, the Company has legal right of its own shares for no future from these estimates. The Company classifies the bases to offset the amounts and intends consideration, or exchanging a used to measure certain assets and either to settle on a net basis or fixed number of its own shares for Estimates and underlying liabilities at their fair value. Assets to realize the asset and settle the a fixed amount of cash or another assumptions are reviewed on and liabilities carried or measured liability simultaneously. financial asset, is also recognized as an ongoing basis. Revisions at fair value have been classified an equity instrument. to accounting estimates are into three levels based upon a fair The Company has the following recognized in the period in which value hierarchy that reflects the non-derivative financial assets: Mandatorily convertible notes the estimates are revised and in significance of the inputs used in any future periods affected. making the measurements. Loans and other financial assets Mandatorily convertible notes issued by the Company are Information about critical Loans and other financial assets accounted for as compound judgments in applying accounting are financial assets with fixed or financial instruments. The net policies that have the most determinable payments that are present value of the coupon 172 Financial statements

payments at issuance date is of derivatives are recognized in the operations. Subsidiaries are those companies recognized as long-term obligation statements of operations. over which the Company exercises and carried at amortized cost. The An impairment loss in respect control. The Company controls value of the equity component (d) Impairment of a financial asset measured at an entity when it is exposed to or is determined based upon the amortized cost is calculated as the has rights to variable returns from difference of the cash proceeds Financial assets are assessed difference between its carrying its involvement with the entity received from the issuance of the at each reporting date to amount and the present value of and has the ability to affect those notes and the net present value of determine whether there is any the estimated future cash flows returns through its power over the the financial liability component on objective evidence that it is discounted at the asset’s original entity. Investments in subsidiaries the date of issuance and is included impaired or whenever changes effective interest rate. Losses are are accounted for under the cost in equity. in circumstances indicate that recognized in the statements method. the carrying amount many not of operations and reflected in Financial liabilities be recoverable. A financial asset an allowance account against Associated companies are is impaired if objective evidence receivables. Interest on the those companies over which Financial liabilities such as loans indicates that a loss event has impaired asset continues to be the Company has the ability to and borrowings and other payables occurred after the initial recognition recognized. exercise significant influence on are recognized initially on the of the asset, and that the loss the financial and operating policy trade date, which is the date that event had a negative effect on the When a subsequent event causes decisions and which are not the Company becomes a party estimated future cash flows of that the amount of impairment loss subsidiaries. Generally, significant to the contractual terms of the asset that can be estimated reliably. to decrease or if there has been a influence is presumed to exist when instrument. change in the estimates used to the Company holds more than 20% Objective evidence that financial determine the recoverable amount, of the voting rights. Joint ventures Financial liabilities are recognized assets are impaired can include the decrease in impairment loss is are those companies over which initially at fair value less any directly default or delinquency by a debtor, reversed through the statements the Company exercises joint control attributable transaction costs. restructuring of an amount due of operations except for reversals and has rights to the net assets of Subsequent to initial recognition, to the Company on terms that of impairment of available-for-sale the arrangement. Investments in these financial liabilities are the Company would not consider investments, which are recognized associates in which ArcelorMittal measured at amortized cost using otherwise, indications that a debtor in other comprehensive income. has the ability to exercise significant the effective interest method. or issuer will enter bankruptcy, influence and joint ventures are adverse changes in the payment (e)Intangible assets accounted for at cost. The Company derecognizes status of borrowers, economic a financial liability when its conditions that correlate with Intangible assets are recognized Investments in other entities, contractual obligations are settled defaults or the disappearance of an only when it is probable that the over which the Company does or cancelled or expired. active market for a security. expected future economic benefits not have the ability to exercise attributable to the assets will accrue significant influence and have a Loans and borrowings are classified The recoverable amount of to the Company and the cost can readily determinable fair value as current liabilities unless the investments is the greater of value be reliably measured. Intangible are accounted for at fair value Company has an unconditional in use and fair value less costs to assets acquired separately by the with any resulting gain or loss right to defer settlement of the sell. In assessing value in use, the Company are initially recorded at recognized in the reserves in other liability for at least twelve months estimated future cash flows are cost; they include primarily the comprehensive income. To the after the financial position date. discounted to their present value cost of technology and licenses extent that these investments do using a pre-tax discount rate that purchased from third parties. not have a readily determinable fair •Derivative financial instruments reflects current market assessments Intangible assets are amortized value, they are accounted for under of the time value of money and the on a straight-line basis over their the cost method. The Company enters into derivative risks specific to the investment. estimated economic useful lives, The Company reviews all its financial instruments principally to which typically do not exceed five investments at each reporting date manage its exposure to fluctuations In the case of available-for-sale years. Amortization is included in to determine whether there is an in exchange rates. Derivative investments, a significant or the statements of operations as indicator that the investment may financial instruments are classified prolonged decline in the fair part of general and administrative be impaired. If objective evidence as current assets or liabilities value of the security below its expenses. indicates that the investment is based on their maturity dates cost is considered an indicator impaired, ArcelorMittal calculates and are accounted for at trade that the securities are impaired. Amortization methods applied to the amount of the impairment date. Embedded derivatives are If any such evidence exists for intangible assets are reviewed at of the investment as being the separated from the host contract available-for-sale financial assets, each reporting date and changed difference between the higher of and accounted for separately if they the cumulative loss measured if there has been a significant the fair value less costs to sell or its are not closely related to the host as the difference between the change in the expected pattern value in use and its carrying value. contract. The Company measures acquisition cost and the current of consumption of the future all derivative financial instruments fair value less any impairment loss economic benefits embodied in the based on fair values derived from on that financial asset previously assets. (g)Provisions and accruals market prices of the instruments recognized in the statements or from option pricing models, of operations is removed from (f)Investments in subsidiaries, The Company recognizes provisions as appropriate. Gains or losses other comprehensive income and associates, joint ventures and other for liabilities and probable losses arising from changes in fair value recognized in the statements of investments that have been incurred when it Financial statements 173

has a present legal or constructive corresponding tax basis used in to receive payment have been (l)Equity settled share-based obligation as a result of past events the computation of taxable profit, established. Interest income is payments and it is probable that the Company and is accounted for using the accrued as earned, by reference will be required to settle the statements of financial position to the principal outstanding and The Company issues equity- obligation and a reliable estimate liability method. Deferred tax at the prevailing effective interest settled share-based payments of the amount of the obligation liabilities are generally recognized rate. Income from contractually to certain of its employees and can be made. If the effect of the for all taxable temporary arranged corporate services employees of its subsidiaries, time value of money is material, differences, and deferred tax assets is deducted from general and including stock options and provisions are discounted using a are generally recognized for all administrative expenses. restricted share units. Equity- current pre-tax rate that reflects, deductible temporary differences. settled share-based payments are where appropriate, the risks specific Deferred tax assets are recognized measured at fair value (excluding to the liability. When discounting is for net operating loss carry On January 1, 2015, ArcelorMittal the effect of non market-based used, the increase in the provision forwards of all entities within the implemented an industrial vesting conditions) at the date of due to the passage of time is tax integration to the extent that it franchise agreement (“IFA”) with grant. The fair value determined recognized as a financing cost. is probable that taxable profits will group subsidiaries whereby the at the grant date of the equity- Provisions for onerous contracts be available against which those Company licenses its business settled share-based payments are recorded in the statements carry forwards can be utilized. model for manufacturing, is recognized on a graded of operations when it becomes processing and distributing steel vesting basis over the vesting known that the unavoidable costs Deferred tax assets and liabilities to group subsidiaries. The business period, based on the Company’s of meeting the obligations under are measured at the tax rates that model includes the ArcelorMittal estimate of the shares that will the contract exceed the economic are expected to apply in the period business intelligence, which is eventually vest and adjusted for benefits expected to be received. in which the liability is settled or a package of business solutions the effect of non market-based the asset realized, based on tax and implementation support vesting conditions. Such fair (h)Income taxes rates (and tax laws) that have been combined with the development value is expensed with respect to enacted or substantively enacted and maintenance of intangibles share-based payments issued to The Company is the head of a tax by the statements of financial such as the ArcelorMittal brand, the Company’s employees and integration and is fully liable for position date. The measurement ArcelorMittal global information recognized as a capital contribution the overall tax liability of the tax of deferred tax liabilities and assets technology solutions, ArcelorMittal for share-based payments issued integration. Each of the entities reflects the tax consequences that global research & development to employees of subsidiaries. For included in the tax integration would follow from the manner in and ArcelorMittal global purchase stock options and restricted share is charged with the amount of which the Company expects, at the agreements. The industrial units, fair value is measured using tax that relates to its individual reporting date, to recover or settle franchise fee is calculated as a the Black-Scholes-Merton pricing taxable profit and this tax is the carrying amount of its assets percentage of the steel sales of the model and the market value paid to ArcelorMittal. Tax losses and liabilities. franchisee entities after deduction of the shares at the date of the at entity level are transferred to of purchases of steel products from grant after deduction of dividend the Company where they are The carrying amount of deferred other franchisee entities. payments during the vesting offset with taxable profits for the tax assets is reviewed at each period, respectively. The expected determination of the net taxable statements of financial position (k)Earnings per common share life used in the model has been income of the tax integration. date and reduced to the extent adjusted, based on management’s Entities do not pay any tax that it is no longer probable that Basic earnings per common share is best estimate, for the effects of non- expense to ArcelorMittal on their sufficient taxable profits will be computed by dividing net income transferability, exercise restrictions individual taxable profits prior to available to enable all or part of the as per the consolidated financial and behavioral considerations. full utilization of their individual asset to be recovered. statements by the weighted For the restricted share units, the cumulative tax losses. average number of common fair value determined at the grant shares outstanding during the date of the equity-settled share- The tax currently payable is based year. Net income attributable to based payments is expensed and on taxable profit (loss) for the year. common shareholders takes into recognized as a capital contribution Taxable profit differs from profit (i)Financing costs consideration dividend rights of on a straight line method over the as reported in the statements of preferred shareholders and holders vesting period and adjusted for the operations because it excludes Financing costs include interest of subordinated perpetual capital effect of non market-based vesting items of income or expense that income and expense, amortization securities. Diluted earnings per conditions for the Company’s are never taxable or deductible. of discounts or premiums on share is computed by dividing employees and employees of The Company’s current income borrowings, foreign exchange gains income available to equity holders subsidiaries, respectively. tax expense (benefit) is calculated and losses, accretion of long-term and assumed conversion by the using tax rates that have been liabilities and defined benefit weighted average number of enacted or substantively enacted obligations and gains (losses) on common shares and potential as of the statements of financial disposal of investments. common shares from outstanding position date. stock options as well as potential (j)Income from investments and common shares from the Deferred tax is recognized on from industrial franchise agreement conversion of certain convertible differences between the carrying bonds whenever the conversion amounts of assets and liabilities, in Dividend income is recognized results in a dilutive effect. the financial statements and the when the shareholders’ rights 174 Financial statements

Note 4: Cash, cash equivalents and restricted cash

Cash and cash equivalents consisted of the following:

December 31, 2015 2014 Cash at bank interest bearing 969 991 Term deposits - 61 Money market funds1 1,633 1,214 Total 2,602 2,266 1Money market funds are highly liquid investments with a maturity of 3 months or less from the date of acquisition.

Restricted cash of 23 at December 31, 2014 corresponded to a guarantee deposit related to a bank debt of an associate which was repaid on June 9, 2015.

Note 5: Prepaid expenses and other current assets

Prepaid expenses and other current assets consisted of the following:

December 31, 2015 2014 Receivables from related parties - tax integration 280 245 Receivables from related parties - corporate services 898 318 Receivables from sale of financial assets - 106 Other 84 87 Total 1,262 756

Receivables from related parties on tax integration correspond to income tax receivables from entities included in the tax integration headed by the Company. Receivables from related parties for corporate services are related to IFA fees and to various corporate services rendered by the Company to its subsidiaries.

Balances with related parties are detailed in note 11.

Note 6 – Intangible assets

Intangible assets are summarized as follows: Patents and licenses Cost At December 31, 2013 81 Additions 33 At December 31, 2014 114 Additions 1 At December 31, 2015 115

Accumulated amortization and impairment At December 31, 2013 (73) Amortization charge for the year (3) At December 31, 2014 (76) Amortization charge for the year (9) At December 31, 2015 (85)

Carrying amount At December 31, 2014 38 At December 31, 2015 30 Financial statements 175

Note 7 - Property, plant and equipment

Property, plant and equipment are summarized as follows:

Land, buildings Other fixtures and fittings, and improvements tools and equipment Total Cost At December 31, 2013 50 13 63 Disposals (13) - (13) At December 31, 2014 37 13 50 Disposals - (1) (1) At December 31, 2015 37 12 49

Accumulated depreciation and impairment At December 31, 2013 (35) (10) (45) Depreciation charge for the year (5) - (5) Disposals 8 - 8 At December 31, 2014 (32) (10) (42) Depreciation charge for the year (3) (1) (4) At December 31, 2015 (35) (11) (46)

Carrying amount At December 31, 2014 5 3 8 At December 31, 2015 2 1 3

Note 8 - Investments in subsidiaries

Investments in subsidiaries are summarized as follows:

Cost At December 31, 2013 137,024 Acquisition in cash4,6 and 7 469 Acquisition in kind4 318 Contributions in kind4 (318) Return of capital3 (316) Other1 90 At December 31, 2014 137,267 Capital increase1,5 3,273 Disposals1,4 (5,177) Other 19 At December 31, 2015 135,382

Accumulated impairment At December 31, 2013 (62,147) Impairment charge for the year (68) At December 31, 2014 (62,215) Impairment charge for the year (33,931) Disposal 3,156 At December 31, 2015 (92,990)

Carrying amount At December 31, 2014 75,052 At December 31, 2015 42,392 176 Financial statements

Capital and reserves Ownership (%) (including result for as of December Carrying amount 2015)* and based on Result for 2015*and Subsidiary Registered office 31, 2015 as of December % of ownership based on % of ownership 2015 2014 Luxembourg AM Global Holding S.à.r.l. (Luxembourg) 100.00% 38,716 68,619 38,224 (23,380) Luxembourg Arcelor Investment S.A.1 (Luxembourg) 18.29% 2,771 469 2,812 40 Mittal Steel Holding AB 2 Lund (Sweden) - - 2,962 - - ArcelorMittal Cyprus Holding Limited 3 Nicosia (Cyprus) 100.00% 105 121 105 (3) AMO Holding Switzerland Zug A.G.4 (Switzerland) - - 1,318 - - ArcelorMittal Canada Contrecoeur Holdings Inc. (Canada) 1.18% 52 66 52 (5) Luxembourg Ispat Inland S.àr.l.2 (Luxembourg) 100.00% - 762 - (4,527) Luxembourg Hera Ermac S.A. (Luxembourg) 100.00% 531 576 531 (242) Amsterdam (The Oakey Holding BV 5 Netherlands) 100.00% 59 - 123 - ArcelorMittal Italy Holding S.r.l.6 Piombino (Italy) 62.03% 106 106 127 (2) Other subsidiaries7 52 53 - - TOTAL 42,392 75,052 *In accordance with unaudited annual accounts and IFRS reporting packages.

1.Arcelor Investment S.A. 2.Mittal Steel Holding AB On November 24, 2015, the Impairment On June 12, 2014, the Company On October 23, 2015, Mittal Steel Company sold its 100% stake in issued a financial guarantee in Holding AB was liquidated and AMO Holding Switzerland A.G. to The Company assesses at the end connection with the assignment the carrying amount of 2,962 of AMO Holding 17 S.à r.l., a group of each reporting period whether by Arcelor Investment S.A. of a loan its 79.53% interest in Ispat Inland subsidiary, for a total consideration there is any indication that its with ArcelorMittal Las Truchas to a S.à.r.l. was transferred to the of €561 (597). The resulting loss on investments in subsidiaries may bank (see note 21). The Company Company, whose shareholding disposal amounted to 721. be impaired in accordance with recognized this guarantee at its fair in Ispat Inland S.à.r.l. increased IAS 36, “Impairment of Assets”. value (see note 20) and accounted accordingly from 20.47% to 100%. 5.Oakey Holding BV As the Company’s investments for a capital contribution in Arcelor On March 12, 2015, the Company in subsidiaries correspond Investment S.A. for 66 at December 3.ArcelorMittal Cyprus Holding subscribed to a capital increase in only to holding companies, in 31, 2014. Limited Oakey Holding BV for an amount making this assessment, the On October 29, 2014, ArcelorMittal of 133. Company considered indicators On June 25, 2015, the Company Cyprus Holding Limited decreased of impairment of steel and subscribed to a capital increase its share premium by return of 6.ArcelorMittal Italy Holding S.r.l. mining operations held directly in Arcelor Investment S.A. for an capital to the sole shareholder. The On July 30, 2014, the Company and indirectly by such holding amount of € 2,800 (3,140). Company received an amount of subscribed to a capital increase in companies such as significant €248 (316). ArcelorMittal Italy Holding S.r.l. for declines in operational results On December 18, 2015, the an amount of 134. or changes in the outlook of Company sold a 4.42 % interest 4.AMO Holding Switzerland A.G. future profitability, among in Arcelor Investment S.A. with On October 29, 2014, the 7.Other subsidiaries other potential indicators. As of a net carrying amount of 703 Company acquired 26.83% of On November 20, 2014, the December 31, 2015, the Company represented by 132,460,126 shares AMO Group Finance Dubai from Company acquired the remaining determined that there was an to various group subsidiaries. ArcelorMittal Cyprus Holding 0.14% of non-controlling interests indication that its investments in The total consideration received Limited for an amount of 318 and in ArcelorMittal Luxembourg subsidiaries may be impaired. amounted to € 621 (673) and contributed immediately this following a mandatory squeeze resulted in a loss on disposal of 30. investment into AMO Holding out procedure. The total Switzerland A.G. at the same value. consideration paid was 17. Financial statements 177

Capital and reserves When an indication of impairment recent financial plans approved assets. The weighted average carrying amount of the Company’s Ownership (%) (including result for exists, the Company estimates by management. Beyond the pre-tax discount rates used for the investments in these subsidiaries as of December Carrying amount 2015)* and based on Result for 2015*and the recoverable amount of the specifically forecasted period Company’s steel businesses range exceeded their respective Subsidiary Registered office 31, 2015 as of December % of ownership based on % of ownership investments in subsidiaries of five years, the Company from 10.3% to 16.8% and vary by estimated recoverable amounts as 2015 2014 measured based on the value in extrapolates cash flows for the geographic location. The weighted of December 31, 2015. Luxembourg use of underlying steel and mining remaining years based on an average pre-tax discount rate AM Global Holding S.à.r.l. (Luxembourg) 100.00% 38,716 68,619 38,224 (23,380) operations. The value in use was estimated constant growth rate used for the Company’s mining In 2014, the Company recognized Luxembourg determined by estimating cash of 2%. This rate does not exceed businesses was 13.3%. a total impairment charge of 134 Arcelor Investment S.A.1 (Luxembourg) 18.29% 2,771 469 2,812 40 flows for a period of five years for the average long-term growth with respect to investments in Mittal Steel Holding AB 2 Lund (Sweden) - - 2,962 - - subsidiaries holding businesses rate for the relevant markets. In 2015, the Company recognized subsidiaries, of which 93 related engaged in steel operations Regarding mining operations, the a total impairment charge of to its investment in Arcelor ArcelorMittal Cyprus and over the life of the mines key assumptions for the value in 33,931 with respect to investments Investment S.A., 13 related to Holding Limited 3 Nicosia (Cyprus) 100.00% 105 121 105 (3) for those holding businesses use calculations are primarily the in subsidiaries, of which 29,922 its investment in ArcelorMittal AMO Holding Switzerland Zug 4 engaged in mining operations. discount rates, capital expenditure, related to its investment in Canada Holdings Inc. and 28 A.G. (Switzerland) - - 1,318 - - With respect to steel operations, expected changes to average AM Global Holding and 3,725 with respect to its interest and ArcelorMittal Canada Contrecoeur the key assumptions for the value selling prices, shipments and direct representing a full impairment ArcelorMittal Italy Holding S.r.l. The Holdings Inc. (Canada) 1.18% 52 66 52 (5) in use calculations are primarily costs during the period. of its investment in Ispat Inland impairment charge is the amount Luxembourg the discount rates, growth rates, S.à.r.l. The impairment charge by which the carrying amount Ispat Inland S.àr.l.2 (Luxembourg) 100.00% - 762 - (4,527) expected changes to average Management estimates discount included also 16 related to its of the Company’s investments in Luxembourg selling prices, shipments and rates using pre-tax rates that investment in ArcelorMittal Cyprus these subsidiaries exceeded their Hera Ermac S.A. (Luxembourg) 100.00% 531 576 531 (242) direct costs during the period. reflect current market rates for Holding Limited, 74 related to respective estimated recoverable Amsterdam Assumptions for average selling investments of similar risk. The rate Oakey Holding BV, 135 related amounts as of December 31, 2014. (The prices and shipments are based for each investment was estimated to Arcelor Investment S.A., 45 The Company also recognized a Oakey Holding BV 5 Netherlands) 100.00% 59 - 123 - on historical experience and from the weighted average cost related Hera Ermac S.A. and 14 reversal of impairment charge for ArcelorMittal Italy Holding expectations of future changes in of capital of producers, which related to ArcelorMittal Canada 66 with respect to its investment S.r.l.6 Piombino (Italy) 62.03% 106 106 127 (2) the market. Cash flow forecasts operate a portfolio of assets Holdings Inc. The impairment in ArcelorMittal Cyprus Holding Other subsidiaries7 52 53 - - are derived from the most similar to those of the Company’s charge is the amount by which the Limited. TOTAL 42,392 75,052 *In accordance with unaudited annual accounts and IFRS reporting packages. Note 9 - Investments in associates, joint ventures and other investments Investments in associates, joint ventures and other investments are summarized as follows:

December 31, 2015 December 31, 2014 Investments accounted for at cost 459 926 Available-for-sale investments 153 193 Total 612 1,119

Investments accounted for at cost Cost At December 31, 2013 1,416 Disposal (92) Transfer to available-for-sale investments (277) At December 31, 2014 1,047 At December 31, 2015 1,047

Accumulated impairment At December 31, 2013 (90) Impairment charge for the year 3, 4 (31) At December 31, 2014 (121) Impairment charge for the year 3, 4 (467) At December 31, 2015 (588)

Carrying amount At December 31, 2014 926 At December 31, 2015 459

Available-for-sale investments Carrying amount at December 31, 2014 193 Remeasurement at fair value (39) Other movements (1) Carrying amount at December 31, 2015 153 178 Financial statements

Ownership (%) at Investee Category Registered office December 31, 2015 December 31, 2015 2014 Available-for-sale Hunan Valin 1 investment Changsha- Hunan (China) 10.08% 153 192 VAMA2 Joint venture Loudi (China) 49.00% 206 206 Kalagadi Manganese 3 Joint venture Rivonia (South Africa) 50.00% - 433 China Oriental4 Associate Wanchan (Hong Kong) 17.40% 224 258 Other 29 30 Total 612 1,119

1.Hunan Valin comprehensive income amounted direct costs during the period. the exercise by Deutsche Bank of Hunan Valin Steel Tube and Wire to 62 and 101 for the year ended Based on the analysis of value its put option with respect to a Co., Ltd. (“Hunan Valin”) is a leading December 31, 2015 and 2014, in use, the Company recognized 7.5% stake in China Oriental, the steel producer in China engaged respectively. an impairment charge of 433 for Company sold this investment to in the production and sale of billet, the full carrying amount of the Macquarie Bank and entered into seamless tube, wire rod, reinforced 2.VAMA investment and of 78 for the loans a put option arrangement with bar, hot rolled coil, cold rolled VAMA is a joint venture between as a result of a downward revision the latter maturing on April 30, coil, galvanized coil, sections and the Company and Hunan Valin of cash flow projections resulting 2015. The Company extended the HR plates. The products sold to which will produce steel for from the expectation of the existing put option agreement domestic and overseas markets high-end applications in the persistence of a lower manganese with ING in relation to a further cover a wide range of market automobile industry and will price outlook. 9.9% stake in China Oriental until segments. supply international automakers April 30, 2015. On April 30, 2015, and first-tier suppliers as well as On the basis of a value in use ING and Macquarie Bank exercised As a result of the exercise of the Chinese car manufacturers and calculation applying a 14.13% their put option for their respective third put option on February 8, their supplier networks. The plant pre-tax discount rate, the 9.9% and 7.5% stakes in China 2014 in the framework of a share was inaugurated on June 15, 2014. Company recognized a reversal Oriental. In order to restore the swap arrangement signed on June of impairment charge for 90 minimum free float requirement, 6, 2012 between ArcelorMittal 3.Kalagadi Manganese with respect to its investment in the Board of China Oriental has and Valin Group, the Company’s Kalagadi Manganese (Propriety) Kalagadi Manganese for the year determined to issue a certain interest in Hunan Valin decreased Ltd. (“Kalagadi Manganese”) ended December 31, 2014. number of new shares, but as of from 20% to 15%. Accordingly, is a joint venture between the December 31, 2015 China Oriental the Company discontinued the Company and Kalahari Resource 4.China Oriental has not determined how many or accounting for its investment at (Proprietary) Ltd that is engaged in China Oriental Group Company when new shares will be issued. In cost and reclassified its interest as exploring, mining, ore processing, Limited (“China Oriental”) is a 2015, the Company assessed the available-for-sale. The resulting net and smelting manganese in the Chinese integrated iron and steel recoverability of its investment and loss on the transaction amounted Kalahari Basin in South Africa. conglomerate listed on the Hong recognized an impairment charge to 124. This amount consisted of In addition, the Company has Kong Stock Exchange (“HKSE”). of 34. a gain of 17 on disposal of the 5% granted loans for the funding of However, China Oriental’s shares stake offset by a loss of 141 with the mining project amounting were suspended from trading In 2014, the Company tested the respect to the remeasurement at to 78 including accrued interest, as of April 29, 2014. Following investment for impairment on a fair value of the remaining interest which have been fully impaired in the acquisition of a 47% stake in fair value basis and concluded that of 15% (see note 16). 2015. China Oriental by a subsidiary such fair value was lower than the of ArcelorMittal on February 4, carrying amount. The results of the On August 6, 2014, the Company In 2015, the Company tested the 2008 and in order to restore the fair value analysis principally based exercised the fourth and last put investment for impairment and minimum HKSE free float of 25%, on market multiples indicated option, which was settled for determined that the value in the Company established put that the carrying value recognized 106 on February 13, 2015. This use was lower than the carrying option agreements with ING Bank was in excess of the estimated fair exercise subsequently led to the amount. In determining the value N.V. (“ING”) and Deutsche Bank value of the investment, which decrease in the Company’s stake in use, the Company estimated its Aktiengesellschaft (“Deutsche approximated the Company’s in Hunan Valin from 15% to 10%. share in the present value (using Bank”) with respect to a 17.4% share in China Oriental’s net equity. The Company recognized in 2014 a pre-tax discount rate of 12.48%) stake sold to these banks. On The recoverable amount of the a total gain on disposal of 62 (see of the projected future cash flows March 25, 2011, these agreements Company’s investment in China note 16). expected to be generated over were extended until April 30, Oriental amounted to 258. Based the current life-of-the-mine plan 2014. The Company recognized on this analysis, the Company The fair value of ArcelorMittal’s or long term production plan. The the 17.4% stake as it retained recognized an impairment charge remaining stake in Hunan Valin key assumptions for the value in its exposure to significant of 121. The Company classified amounted to 153 and 192 as use calculations are primarily the potential risks and rewards of the measurement at fair value into of December 31, 2015 and discount rates, capital expenditure, the investment through the Level 3. 2014, respectively. Unrealized expected changes to average put options. On April 30, 2014, gains recognized in other selling prices, shipments and following simultaneously with Financial statements 179

Note 10 - Other assets

December 31, 2015 2014 Derivative financial instruments 85 - Call option on mandatory convertible bonds1 4 112 Other 29 3 Total 118 115 1 The Company holds the option to call the mandatory convertible bonds (see note 13). The value of the option was 4 and 112 as of December 31, 2015 and 2014, respectively. Note 11 – Balances and transactions with related parties The Company entered into transactions with related parties that include companies and entities under common control and/or common management, companies under control (directly or indirectly) including their associates and joint ventures, their shareholders and key management personnel. The Company assessed the recoverability of loans granted to related parties and recorded accordingly an impairment charge of 1,656. This amount included 1,475 relating to loans granted to ArcelorMittal Liberia Holdings Limited in connection with a downward revision of future cash flow projections resulting from the expected persistence of a lower raw material price outlook. It also included 103 relating to loans granted to the currently idled facility of ArcelorMittal Point Lisas Limited and 78 with respect to loans granted to the joint venture Kalagadi Manganese (see note 9).

Transactions with related parties were as follows: Current loans to related parties December 31, Related party Category 2015 2014 JSC ArcelorMittal Temirtau Subsidiary 499 367 ArcelorMittal Brasil S.A. Subsidiary 431 535 ArcelorMittal South Africa Limited Subsidiary 210 86 Quadra International Services B.V. Subsidiary 23 25 Ocean Prosper Inc Associate 20 - Ocean Pride Inc Associate 19 21 ArcelorMittal Treasury Americas LLC Subsidiary 11 13 ArcelorMittal USA Holdings Inc. Subsidiary 4 4 ArcelorMittal Liberia Holdings Limited Subsidiary - 234 Other 2 1 Total 1,219 1,286

Accrued interests associated with the loans to related parties are also included in the above table. Other current assets December 31, Related party Category 2015 2014 ArcelorMittal USA LLC Subsidiary 197 21 PJSC ArcelorMittal Kryvyi Rih Subsidiary 137 140 ArcelorMittal Sourcing Subsidiary 103 47 Arcelor Investment SA Subsidiary 82 152 ArcelorMittal Atlantique et Lorraine Subsidiary 75 - ArcelorMittal Belgium Subsidiary 61 10 ArcelorMittal Belval & Differdange Subsidiary 47 11 ArcelorMittal Energy S.C.A. Subsidiary 45 4 ArcelorMittal España, S.A. Subsidiary 42 6 ArcelorMittal Bremen GmbH Subsidiary 35 - ArcelorMittal Méditerranée Subsidiary 34 - ArcelorMittal Brasil S.A. Subsidiary 26 24 ArcelorMittal Finance Subsidiary 26 - ArcelorMittal South Africa Limited Subsidiary 24 11 JSC ArcelorMittal Temirtau Subsidiary 23 35 Other 260 106 Total 1,217 567 The 2015 increase is mainly related to IFA franchise fees for a total of 682. 180 Financial statements

Non-current loans to related parties

December 31, Related party Category 2015 2014 ArcelorMittal Treasury Americas LLC Subsidiary 4,938 5,919 ArcelorMittal USA Holdings Inc. Subsidiary 1,700 1,700 ArcelorMittal Brasil S.A. Subsidiary 1,196 1,778 Quadra International Services B.V. Subsidiary 1,128 1,258 ArcelorMittal Liberia Holdings Limited Subsidiary - 632 ArcelorMittal Point Lisas Limited Subsidiary - 103 Oakey Holding B.V.1 Subsidiary - 68 ArcelorMittal Rzk Celyk Servys Merkezy2 Joint Venture - 67 Kalagadi Manganese Proprietary Limited Joint Venture - 66 Ocean Prosper Inc Associate - 22 Other 1 1 Total 8,963 11,614 1 The loan was fully repaid on April 16, 2015. 2 The loan was fully repaid on June 24, 2015.

Current loans from related parties

December 31, Related party Category 2015 2014 ArcelorMittal Treasury S.N.C. 1 Subsidiary 1,512 4,118 ArcelorMittal Holdings AG Subsidiary 940 - Ferrosure (Isle of Man) Insurance Co. Ltd Subsidiary 550 350 ArcelorMittal International FZE Subsidiary 200 300 ArcelorMittal Luxembourg S.A. 1 14 - Total 3,216 4,768 1Current loans correspond to cash pooling balances.

Accrued expenses and other liabilities

Accrued expenses and other liabilities include balances with related parties amounting to 502 and 635 as of December 31, 2015 and 2014, respectively. Balance at December 31, 2014 was mainly related to amounts payable with respect to the acquisition of intellectual property rights (see note 15). Balance at December 31, 2015 was mainly related to amounts payable to the IFA costs (research & development, IT, purchasing and segment costs).

December 31, Related party Category 2015 2014 ArcelorMittal Europe Subsidiary 206 - ArcelorMittal Treasury S.N.C. 1 Subsidiary 108 - ArcelorMittal Belval & Differdange Subsidiary 47 23 ArcelorMittal Maizières Research SA Subsidiary 18 - ArcelorMittal Finance Subsidiary 11 12 ArcelorMittal Atlantique et Lorraine Subsidiary 8 109 ArcelorMittal Luxembourg S.A. Subsidiary 6 27 ArcelorMittal España, S.A. Subsidiary 5 32 ArcelorMittal Investigación y Desarrollo, S.L. Subsidiary 3 113 ArcelorMittal Dofasco Inc. Subsidiary 3 79 ArcelorMittal Méditerranée Subsidiary 3 36 ArcelorMittal France Subsidiary 3 31 ArcelorMittal Flat Carbon Europe S.A. Subsidiary 2 58 Other 79 115 Total 502 635 1 Including financial instruments with ArcelorMittal Treasury S.N.C. Financial statements 181

Non-current loans from related parties

December 31, Related party Category 2015 2014 ArcelorMittal Finance Subsidiary 5,443 6,070 ArcelorMittal Treasury Financial Services S.à r.l. Subsidiary 324 324 ArcelorMittal Holdings AG Subsidiary - 940 Total 5,767 7,334

Income from industrial franchise agreement (IFA) fees

Year ended December 31, Related party Category 2015 2014 ArcelorMittal USA LLC Subsidiary 197 - ArcelorMittal Atlantique et Lorraine Subsidiary 75 - ArcelorMittal Belgium Subsidiary 61 - ArcelorMittal Poland S.A. Subsidiary 59 - ArcelorMittal Dofasco Inc. Subsidiary 59 - ArcelorMittal España, S.A. Subsidiary 46 - ArcelorMittal Bremen GmbH Subsidiary 37 - ArcelorMittal Méditerranée Subsidiary 34 - JSC ArcelorMittal Temirtau Subsidiary 29 - ArcelorMittal Belval & Differdange Subsidiary 24 - ArcelorMittal Montreal Inc Subsidiary 21 - ArcelorMittal Ostrava AS Subsidiary 21 - ArcelorMittal Eisenhüttensdadt GmbH Subsidiary 20 - ArcelorMittal Mexico S.A. de C.V. Subsidiary 19 - Other 139 - Total 841 - 182 Financial statements

General and administrative expenses

General and administrative expenses, net of income from contractually arranged corporate services, amounted to 959 and 630 in 2015 and 2014, respectively, for related parties. The increase in 2015 was mainly related to acquisition of intellectual property rights for 483 (see note 15) as well as research and development expenses for 275 charged by group subsidiaries to the Company starting 2015 as a result of the implementation of the industrial franchise agreement.

Year ended December 31, Related party Category 2015 2014 ArcelorMittal USA LLC Subsidiary 272 16 ArcelorMittal Europe Subsidiary 176 - ArcelorMittal Belgium Subsidiary 127 9 ArcelorMittal Maizières Research SA Subsidiary 101 - ArcelorMittal Bremen GmbH Subsidiary 38 (4) ArcelorMittal Atlantique et Lorraine Subsidiary 32 114 ArcelorMittal America Inc Subsidiary 24 - ArcelorMittal Eisenhüttenstadt GmbH Subsidiary 23 (3) OCAS NV Subsidiary 18 - ArcelorMittal Dofasco Inc. Subsidiary 14 121 ArcelorMittal España, S.A. Subsidiary 14 38 ArcelorMittal Méditerranée Subsidiary 10 40 ArcelorMittal Investigación y Desarrollo, S.L. Subsidiary 9 116 ArcelorMittal Belval & Differdange Subsidiary 7 24 ArcelorMittal Mexico S.A. de C.V. Subsidiary 1 13 ArcelorMittal Poland S.A. Subsidiary - 32 ArcelorMittal Research & Development Subsidiary - 26 ArcelorMittal Sagunto S.L. Subsidiary - 25 ArcelorMittal Purchasing Subsidiary - 8 Other 93 55 Total 959 630

Financing costs – net

Financing costs –net included the following income from related parties for the year ended December 31, 2015 and 2014 :

Year ended December 31, Related party (income)/expenses Category 2015 2014 ArcelorMittal Finance Subsidiary 255 318 ArcelorMittal Treasury S.N.C. Subsidiary 22 11 ArcelorMittal Holdings AG Subsidiary 19 20 ArcelorMittal Liberia Holdings Limited Subsidiary - (91) Kalagadi Manganese Proprietary Limited Joint Venture - (7) ArcelorMittal France Subsidiary (1) 28 JSC ArcelorMittal Temirtau Subsidiary (18) (14) ArcelorMittal South Africa Limited Subsidiary (20) (12) Quadra International Services B.V. Subsidiary (67) (79) ArcelorMittal USA Holdings Inc. Subsidiary (94) (126) ArcelorMittal Brasil S.A. Subsidiary (199) (292) ArcelorMittal Treasury Americas LLC Subsidiary (291) (341) Other - (3) Total (394) (588) Financial statements 183

Note 12: Short-term and long-term debt

Short-term debt, including the current portion of long-term debt, consisted of the following:

December 31, 2015 2014 Short-term bank loans and other credit facilities including commercial paper 71 51 Current portion of long-term debt 1,698 1,046 Total 1,769 1,097

Commercial paper

The Company has a commercial paper program enabling borrowings of up to €1 billion. As of December 31, 2015, the outstanding amount was 71.

Long-term debt is comprised of the following:

Year of maturity Type of Interest Interest rate1 2015 2014 Corporate 6 billion Revolving Credit Facility - 2.5 billion tranche 2018 Floating - - 6 billion Revolving Credit Facility - 3.5 billion tranche 2020 Floating - - 1.0 billion Unsecured Bonds2 2015 Fixed 4.50% - 998 500 Unsecured Notes3 2016 Fixed 4.50% - 499 €1.0 billion Unsecured Bonds 2016 Fixed 10.63% 1,088 1,210 €1.0 billion Unsecured Bonds 2017 Fixed 5.88% 1,085 1,208 1.4 billion Unsecured Notes 2017 Fixed 5.50% 1,398 1,396 1.5 billion Unsecured Notes 2018 Fixed 6.13% 1,500 1,500 €500 million Unsecured Notes 2018 Fixed 5.75% 543 604 1.5 billion Unsecured Notes 2019 Fixed 10.85% 1,480 1,475 €750 million Unsecured Notes 2019 Fixed 3.00% 812 903 €600 million Unsecured Notes 2020 Fixed 2.88% 647 719 1.0 billion Unsecured Bonds 2020 Fixed 6.25% 989 988 1.5 billion Unsecured Notes 2021 Fixed 6.50% 1,490 1,489 1.1 billion Unsecured Notes 2022 Fixed 7.25% 1,091 1,090 1.5 billion Unsecured Bonds 2039 Fixed 8.00% 1,465 1,465 1.0 billion Unsecured Notes 2041 Fixed 7.75% 984 983 CHF 225 million Unsecured Notes 2020 Fixed 2.50% 225 - 500 Unsecured Notes 2025 Fixed 6.13% 496 - 500 Unsecured Notes 2020 Fixed 5.13% 497 - €400 million Unsecured Notes 2018 Floating 1.98% 434 - €500 million Unsecured Notes 2021 Fixed 3.00% 540 - €750 million Unsecured Notes 2022 Fixed 3.13% 811 - Other loans 2021 Fixed 3.46% 52 71 EBRD loans 2015 Floating 1.23% - 8 300 Term Loan Facility 2016 Floating 2.93% 300 300 EIB loan 2016 Floating 1.37% 272 304 ICO loan 2017 Floating 2.37% 23 42 Other loans 2017-2035 Floating 0.01%-3.00% 270 143 Total 18,492 17,395 Less current portion of long-term debt (1,698) (1,046) Total long-term debt, net of current portion 16,794 16,349 1 Rates applicable to balances outstanding at December 31, 2015. 2 Early redeemed on July 2, 2015 3 Early redeemed on October 22, 2015 184 Financial statements

6 billion Revolving Credit Facility On July 3, 2015, ArcelorMittal existing indebtedness, in particular facilities) and the coupons on completed the offering of CHF the early redemption of bonds certain of its outstanding bonds On April 30, 2015, ArcelorMittal 225 million 2.5% Notes due maturing in August 2015. are subject to adjustment in the signed a 6 billion revolving credit July 3, 2020, issued under the event of a change in its long-term facility which incorporates a first Company’s Euro Medium Term On April 9, 2015, ArcelorMittal credit ratings. In a context of tranche of 2.5 billion maturing Notes Programme. The proceeds of completed the offering of €400 low steel prices and challenging on April 30, 2018, and a second the issuance were used to repay or million Floating Rate Notes due industry conditions, ArcelorMittal tranche of 3.5 billion maturing prepay existing indebtedness. April 9, 2018, and €500 million was downgraded by Standard on April 30, 2020. The facility may 3.0% Notes due April 9, 2021, & Poor’s on February 3, 2015 to be used for general corporate On July 2, 2015, the Company issued under the Company’s Euro BB with stable outlook, and by purposes and replaces the 2.4 redeemed its 1 billion 3.75% Medium Term Notes Programme. Moody’s on November 12, 2015, billion revolving credit facility Unsecured Notes due August 5, The proceeds of the issuance to Ba2 with negative outlook. agreement dated May 6, 2010, 2015, prior to their scheduled were used for general corporate Fitch and Standard & Poor’s and the 3.6 billion revolving credit maturity for a total amount of purposes. affirmed their credit ratings while facility agreement dated March 18, 1,022, including premium and lowering their outlooks to negative 2011. As of December 31, 2015, accrued interest. On January 14, 2015, ArcelorMittal on November 16, 2015, and the 6 billion revolving credit facility completed the offering of €750 December 18, 2015, respectively. remains fully available. On June 1, 2015, ArcelorMittal million 3.125% Notes due January These downgrades triggered the completed the offering of 500 14, 2022, issued under the interest rate “step-up” clauses Bonds 5.125% Notes due June 1, 2020, Company’s Euro Medium Notes in most of the Company’s and 500 6.125% Notes due Programme. The proceeds of the outstanding bonds, as described in On October 22, 2015, the June 1, 2025, issued under the issuance were used for general the table below: Company redeemed its 500 3.75% Company’s automatic shelf corporate purposes. Unsecured Notes due March 1, registration statement filed 2016, prior to their scheduled with the U.S. Securities and The margin applicable to maturity for a total amount of 511, Exchange Commission (including ArcelorMittal’s principal credit including premium and accrued a prospectus). The proceeds of facilities ($6 billion revolving credit interest. the issuance were used to repay facility and certain other credit

Nominal value Date of issuance Repayment date Interest rate Issued at €1.0 billion Unsecured Bonds June 3, 2009 June 3, 2016 10.63% 99.38% €1.0 billion Unsecured Bonds(1) November 18, 2010 November 17, 2017 5.88% 99.32% 1.4 billion Unsecured Notes February 28, 2012 February 25, 2017 5.50%(2) 99.69% €400 million Unsecured Notes (1) April 9, 2015 April 9, 2018 Euribor 3M+2.03%(1) 100.00% 1.5 billion Unsecured Notes May 27, 2008 June 1, 2018 6.13% 99.57% €500 billion Unsecured Notes(1) March 29, 2012 March 29, 2018 5.75% 99.71% 1.5 billion Unsecured Notes May 20, 2009 June 1, 2019 10.85%(2) 97.52% €750 million Unsecured Notes (1) March 25, 2014 March 25, 2019 3.00% 99.65% 500 Unsecured Notes June 1, 2015 June 1, 2020 5.13% 100.00% CHF 225 million Unsecured Notes (1) July 3, 2015 July 3, 2020 2.50% 100.00% €600 million Unsecured Notes (1) July 4, 2014 July 6, 2020 2.88% 99.18% 1.0 billion Unsecured Bonds August 5, 2010 August 5, 2020 6.25%(2) 98.46% 1.5 billion Unsecured Notes March 7, 2011 March 1, 2021 6.50%(2) 99.36% €500 million Unsecured Notes (1) April 9, 2015 April 9, 2021 3.00% 99.55% €750 million Unsecured Notes (1) January 14, 2015 January 14, 2022 3.13% 99.73% 1.1 billion Unsecured Notes February 28, 2012 February 25, 2022 7.25% (2) 98.28% 500 Unsecured Notes June 1, 2015 June 1, 2025 6.13% 100.00% 1.0 billion Unsecured Bonds October 1, 2009 October 15, 2039 8.00%(2) 95.20% 500 Unsecured Bonds August 5, 2010 October 15, 2039 8.00%(2) 104.84% 1.0 billion Unsecured Notes March 7, 2011 March 1, 2041 7.75% (2) 99.18% (1)Issued under the Euro Medium Term Notes Programme, extended from €3 billion to €6 billion on March 20, 2015 (2)Change in interest rate following downgrades in 2015. Financial statements 185

European Bank for Reconstruction European Investment Bank (“EIB”) Other (each period of 12 months ending and Development (“EBRD”) Loans Loan on the last day of a financial Certain debt agreements of half-year or a financial year of the The Company had entered into The Company entered into an the Company or its subsidiaries Company), exceed a certain ratio. five separate agreements for agreement with the EIB for the contain certain restrictive ArcelorMittal’s principle credit on-lending with the European financing of activities for research, covenants. Among other facilities set this ratio to 4.25 to 1. Bank for Reconstruction and engineering and technological things, these covenants limit Development (“EBRD”). As of innovation related to process encumbrances on the assets of Failure to comply with any December 31 2014, the only improvements and new steel ArcelorMittal and its subsidiaries, covenant would enable the agreement outstanding was product developments on July the ability of ArcelorMittal’s lenders to accelerate the ArcelorMittal Temirtau, entered 15, 2010. The full amount of €250 subsidiaries to incur debt and Company’s repayment obligations. into on June 15, 2007. Following million was drawn on September ArcelorMittal’s ability to dispose Moreover, the Company’s debt the repayment of the last 27, 2011. The final repayment of assets in certain circumstances. facilities have provisions whereby installment for ArcelorMittal date under this agreement Certain of these agreements certain events relating to other Temirtau on January 12, 2015, the is September 27, 2016. The also require compliance with a borrowers within the Company’s EBRD loan was fully repaid as of outstanding amount in total as of financial covenant. subsidiaries could, under certain December 31, 2015 as compared December 31, 2015 and 2014 was circumstances, lead to acceleration to 8 outstanding as of December 272 (€250 million) and 304 (€250 The Company’s principal credit of debt repayment under such 31, 2014. million), respectively. facilities (6 billion Revolving credit facilities. Any invocation of Credit Facility and certain these cross-acceleration clauses 300 Term Loan Facility Instituto de Crédito Oficial (“ICO”) borrowing agreements) include could cause some or all of the Loan the following financial covenant: other debt to accelerate. On December 20, 2013, the Company must ensure that ArcelorMittal entered into a term The Company entered into an the ratio of “Consolidated Total The Company was in compliance loan facility in an aggregate agreement with the ICO on April Net Borrowings” (consolidated with the financial covenants amount of 300, maturing on 9, 2010 for the financing of the total borrowings less consolidated contained in the agreements December 20, 2016. The facility Company investment plan in cash and cash equivalents) to related to all of its borrowings as of may be used by the Group for Spain for the period 2008-2011. “Consolidated EBITDA” (the December 31, 2015. general corporate purposes. The last installment under this consolidated net pre-taxation Amounts repaid under this agreement is due on April 7, 2017. profits of the Company for a As of December 31, 2015 the agreement may not be re- The outstanding amount in total Measurement Period, subject to scheduled maturities of short-term borrowed. As of December 31, as of December 31, 2015 and 2014 certain adjustments as defined in debt and long-term debt including 2015, the term loan facility was was 23 (€21 million) and 42 (€35 the facilities) does not, at the end its current portion are as follows: fully drawn. million), respectively. of each “Measurement Period”

2016 1,769 2017 2,513 2018 2,505 2019 2,436 2020 2,366 Subsequent 6,974 Total 18,563

The Company monitors its net debt in order to manage its capital. The following table presents the structure of the Company’s net debt by original currencies:

Presented in USD by original currency as at December 31, 2015 Total USD EUR USD CHF CAD Other Short-term debt including the current portion of long-term debt 1,769 1,416 353 - - - Long-term debt 16,794 5,015 11,554 225 - - Cash including restricted cash (2,602) (2,206) (117) - (267) (12) Net debt 15,961 4,225 11,790 225 (267) (12)

As a part of the Company’s overall risk and cash management strategies, several loan agreements have been swapped from their original currencies to other foreign currencies. 186 Financial statements

The carrying value of short-term bank loans and commercial paper approximate their fair value. The carrying amount and fair value of the Company’s short and long-term debt is:

December 31, 2015 December 31, 2014 Carrying Amount Fair value Carrying Amount Fair value Instruments payable bearing interest at fixed rates 17,193 14,738 16,598 17,784 Instruments payable bearing interest at variable rates 1,299 1,125 797 746 Total long-term debt, including current portion 18,492 15,863 17,395 18,530

The following tables summarize Instruments payable classified of units held without consideration the forward rate and discounted the Company’s bases used to as Level 1 refer to the Company’s of transaction costs. using current U.S. dollar zero measure its debt at fair value. listed bonds quoted in active coupon rates and ArcelorMittal’s Fair value measurement has markets. The total fair value is the Instruments payable classified credit spread quotations for the been classified into three levels official closing price as defined as Level 2 refer to all debt relevant maturities. based upon a fair value hierarchy by the exchange on which the instruments not classified as Level that reflects the significance of instrument is most actively traded 1. The fair value of the debt is There were no instruments the inputs used in making the on the last trading day of the based on estimated future cash payable classified as Level 3. measurements. period, multiplied by the number flows converted into U.S. dollar at

As of December 31, 2015 Carrying amount Fair Value Level 1 Level 2 Level 3 Total Instruments payable bearing interest at fixed rates 17,193 14,707 31 - 14,738 Instruments payable bearing interest at variable rates 1,299 386 739 - 1,125 Total long-term debt, including current portion 18,492 15,093 770 - 15,863 Short term bank loans and other credit facilities including commercial paper 71 - 71 - 71

As of December 31, 2014 Carrying amount Fair Value Level 1 Level 2 Level 3 Total Instruments payable bearing interest at fixed rates 16,598 17,736 48 - 17,784 Instruments payable bearing interest at variable rates 797 - 746 - 746 Total long-term debt, including current portion 17,395 17,736 794 - 18,530 Short term bank loans and other credit facilities including commercial paper 51 - 51 - 51

Note 13: Financial instruments

The Company enters into derivative financial instruments to manage its exposure to fluctuations in exchange rates and hedge its obligations arising out of the potential conversion of the convertible bonds in connection with financing and investment activities.

Fair values versus carrying amounts

The estimated fair values of certain financial instruments have been determined using available market information or other valuation methodologies that require judgment in interpreting market data and developing estimates. The following tables summarize assets and liabilities based on their categories at December 31, 2015. Financial statements 187

Carrying amount in Non-financial statements of financial assets and Loan and Liabilities at Available-for-sale position liabilities receivables amortized cost assets Derivatives ASSETS Current assets: Cash and cash equivalent 2,602 - 2,602 - - - Current loans to related parties 1,219 - 1,219 - - - Prepaid expenses and other current assets 1,262 992 253 - - 17 Total current assets 5,083 992 4,074 - - 17

Non-current assets: Intangibles assets 30 30 - - - - Property, plant and equipment 3 3 - - - - Investments in subsidiaries 42,392 42,392 - - - - Investments in associates, joint ventures and other investments 612 459 - - 153 - Non-current loans to related parties 8,963 - 8,963 - - - Deferred tax assets 6,803 6,803 - - - - Other assets 118 4 25 - - 89 Total non-current assets 58,921 49,691 8,988 - 153 89 Total assets 64,004 50,683 13,062 - 153 106

LIABILITIES AND EQUITY Current liabilities: Short-term debt and current portion of long- term debt 1,769 - - 1,769 - - Current loans from related parties 3,216 - - 3,216 - - Accrued expenses and other liabilities 1,032 282 - 642 - 108 Total current liabilities 6,017 282 - 5,627 - 108

Non-current liabilities: Long-term debt, net of current portion 16,794 - - 16,794 - - Non-current loans from related parties 5,767 - - 5,767 - - Deferred employee benefits 17 17 - - - - Other long-term obligations 26 - - 2 - 24 Total non-current liabilities 22,604 17 - 22,563 - 24

Total equity 35,383 35,383 - - - - Total liabilities and equity 64,004 35,682 - 28,190 - 132 188 Financial statements

The following table summarizes assets and liabilities based on their categories at December 31, 2014:

Carrying amount in Non-financial statements of financial assets and Loan and Liabilities at Available-for- position liabilities receivables amortized cost sale assets Derivatives ASSETS Current assets: Cash and cash equivalents 2,266 - 2,266 - - - Restricted cash 23 - 23 - - - Current loans to related parties 1,286 - 1,286 - - - Prepaid expenses and other current assets 756 275 481 - - - Total current assets 4,331 275 4,056 - - -

Non-current assets: Intangibles assets 38 38 Property, plant and equipment 8 8 - - - - Investments in subsidiaries 75,052 75,052 - - - - Investments in associates, joint ventures and other investments 1,119 926 - - 193 - Non-current loans to related parties 11,614 11,614 - - - Deferred tax assets 7,898 7,898 - - - - Other assets 115 - 3 - - 112 Total non-current assets 95,844 83,922 11,617 - 193 112 Total assets 100,175 84,197 15,673 - 193 112

LIABILITIES AND EQUITY Current liabilities: Short-term debt and current portion of long- term debt 1,097 - - 1,097 - - Current loans from related parties 4,768 - - 4,768 - - Accrued expenses and other liabilities 1,208 600 - 605 - 3 Total current liabilities 7,073 600 - 6,470 - 3

Non-current liabilities: Long-term debt, net of current portion 16,349 - - 16,349 - - Non-current loans from related parties 7,334 - - 7,334 - - Deferred employee benefits 20 20 - - - - Other long-term obligations 238 44 - 138 - 56 Total non-current liabilities 23,941 64 - 23,821 - 56

Total equity 69,161 69,161 - - - - Total liabilities and equity 100,175 69,825 - 30,291 - 59 Financial statements 189

The following tables summarize the bases used to measure certain assets and liabilities at their fair value.

As of December 31, 2015 Level 1 Level 2 Level 3 Total Assets at fair value: Available-for-sale financial assets 153 - - 153 Derivative financial current assets - 17 - 17 Derivative financial non-current assets - 85 4 89 Total assets at fair value 153 102 4 259

Liabilities at fair value Derivative financial current liabilities - (108) - (108) Derivative financial non-current liabilities - (24) (24) Total liabilities at fair value - (132) - (132)

As of December 31, 2014 Level 1 Level 2 Level 3 Total Assets at fair value: Available-for-sale financial assets 193 - - 193 Derivative financial non-current assets - - 112 112 Total assets at fair value 193 - 112 305

Liabilities at fair value Derivative financial current liabilities - 3 - 3 Derivative financial non-current liabilities - 56 - 56 Total liabilities at fair value - 59 - 59

Available-for-sale financial assets Derivative financial non-current ArcelorMittal establishes the fair movement of stock market prices classified as Level 1 refer to listed assets classified as Level 3 refer valuation of the call option on observable in the active market securities quoted in active markets. to the call option on the 1,000 the 1,000 mandatory convertible over 90 working days. The total fair value is either the mandatory convertible bonds bonds through the use of binomial price of the most recent trade at (see below). As a result of the valuation models. Binomial On December 28, 2009, the the time of the market close or repayment at maturity of the valuation models use an iterative Company issued through a wholly- the official close price as defined €1.25 billion Convertible Bonds procedure to price options, owned subsidiary unsecured by the exchange on which the on April 1, 2014 (see note 12), allowing for the specification of and unsubordinated 750 bonds asset is most actively traded on the conversion option in the nodes, or points in time, during the mandatorily convertible into the last trading day of the period, €1.25 billion Convertible Bonds time span between the valuation preferred shares of such subsidiary. multiplied by the number of units and the euro-denominated call date and the option’s expiration The bonds were placed privately held without consideration of options on treasury shares are date. In contrast to the Black- with a Luxembourg affiliate of transaction costs. extinguished. The fair valuation of Scholes model, which provides a Crédit Agricole (formerly Calyon Level 3 derivative instruments is numerical result based on inputs, S.A.) and are not listed. The Derivative financial assets and established at each reporting date the binomial model allows for the Company originally had the option liabilities classified as Level 2 in relation to which an analysis is calculation of the asset and the to call the mandatory convertible refer to instruments to hedge performed in respect of changes in option for multiple periods along bonds from May 3, 2010 until ten fluctuations in foreign exchange the fair value measurement since with the range of possible results business days before the maturity rates. The total fair value is based the last period. ArcelorMittal’s for each period. date. On April 20, 2011, the on the price a dealer would pay or valuation policies for Level 3 conversion date of the mandatory receive for the security or similar derivatives are an integral part of Observable input data used convertible bonds was extended securities, adjusted for any terms its internal control procedures and in the valuations include zero to January 31, 2013. On September specific to that asset or liability. have been reviewed and approved coupon yield curves, stock 27, 2011, the Company increased Market inputs are obtained from according to the Company’s market prices, European Central the mandatory convertible well-established and recognized principles for establishing such Bank foreign exchange fixing bonds and the call option on the vendors of market data and the procedures. In particular, such rates and Libor interest rates. mandatory convertible bonds fair value is calculated using procedures address the accuracy Unobservable inputs are used to from 750 to 1,000. On December standard industry models based and reliability of input data, the measure fair value to the extent 18, 2012, the conversion date of on significant observable market accuracy of the valuation model that relevant observable inputs the mandatory convertible bonds inputs such as foreign exchange and the knowledge of the staff are not available. Specifically the was extended to January 31, rates, commodity prices, swap performing the valuations. Company computes unobservable 2014. On November 20, 2015, the rates and interest rates. volatility data based mainly on the conversion date of the mandatory 190 Financial statements

convertible bonds was extended to January 31, 2018. The fair value of these call options was 4 as of December 31, 2015 and the change in fair value recorded in the statements of operations as financing costs was 108. These call options are classified into Level 3.

The following table summarizes the reconciliation of the fair value of the conversion option classified as Level 3 with respect to the call option on the 1,000 mandatory convertible bonds for the year ended December 31, 2015 and 2014, respectively:

Call option on 1,000 mandatory convertible bonds 1 Total Balance as of December 31, 2013 - - Change in fair value 112 112 Balance as of December 31, 2014 112 112 Change in fair value (108) (108) Balance as of December 31, 2015 4 4 1 The call option on the 1,000 mandatory convertible bonds is classified into Level 3. The fair value of the call options was determined through a binomial model based on the estimated values of the underlying equity spot price of $124 and volatility of 10.06%.

Portfolio of Derivatives

Except for the call options on the mandatory convertible bond, certain cross currency swaps and some other limited exceptions, the Company’s portfolio of derivatives consists of transactions with ArcelorMittal Treasury S.N.C., which in turn enters into offsetting position with counterparties external to ArcelorMittal.

The portfolio associated with derivative financial instruments as of December 31, 2015 is as follows:

Assets Liabilities Notional Fair Notional Fair Amount Value Amount Value Foreign exchange rate instruments Forward sales of contracts 241 17 1,161 (108) Currency swap sales 375 85 1,000 (24) Total 102 (132)

The portfolio associated with derivative financial instruments as of December 31, 2014 is as follows:

Assets Liabilities Notional Fair Notional Fair Average Amount Value Amount Value Rate* Interest rate swaps - fixed rate borrowings/loans - - 1,063 (53) 2.13%

Foreign exchange rate instruments Forward sale of contracts 125 - 250 (3) - Currency swaps purchases 89 - Currency swaps sales - - 336 (3) - Total - (59) *the average rate is determined for fixed rate instruments on the basis of the U.S. dollar and foreign currency rates and for the variable instruments generally on the basis of Euribor or Libor.

Interest rate risk between the agreed fixed rate and Foreign exchange rate risk currency), ArcelorMittal has the variable rate, calculated on the an exposure to fluctuations in The Company utilizes certain basis of the notional amount of the The Company is exposed to the values of these currencies instruments to manage interest swap. Similarly, swaps may be used changes in values arising from relative to the U.S. dollar. These rate risks. Interest rate instruments for the exchange of variable rates foreign exchange rate fluctuations currency fluctuations, especially allow the Company to borrow against other variable rates. generated by its investment the fluctuation of the value of the long-term at fixed or variable rates, and financing activities. Because U.S. dollar relative to the euro and and to swap the rate of this debt Interest rate derivatives used by of a substantial portion of the Canadian dollar, could have either at inception or during the the Company to manage changes ArcelorMittal’s assets, liabilities, a material impact on its results of lifetime of the loan. The Company in the value of fixed rate loans income and expenses are operations. and its counter-party exchange, at qualify as fair value hedges. denominated in currencies other ArcelorMittal faces transaction risk, predefined intervals, the difference than the U.S. dollar (its reporting which arises when ArcelorMittal Financial statements 191

translates its net debt (see note 12) and other items denominated in currencies other than the U.S. dollars. The Company also uses the derivative instruments, described above to hedge debt recorded in foreign currency other than the functional currency or the balance sheet risk incurred on certain monetary assets denominated in a foreign currency other than the functional currency.

Liquidity Risk

ArcelorMittal’s principal sources of liquidity are cash generated from its operations and its credit lines. The Company actively manages its liquidity. Following the Treasury and Financial Risk Management Policy, the levels of cash, credit lines and debt are closely monitored and appropriate actions are taken in order to comply with the covenant ratios, leverage, fixed/floating ratios, maturity profile and currency mix.

The following are the non-discounted contractual maturities of financial liabilities, including estimated interest payments and excluding the impact of netting agreements:

December 31, 2015 Carrying Contractual Cash Less than amount Flow 1 Year 1-2 Years 2-5 Years More than 5 Years Non-derivative financial liabilities Other bonds (17,681) (26,082) (2,223) (3,464) (6,279) (14,116) Loans over 100 (572) (583) (583) - - - Other non-derivative financial liabilities (310) (328) (114) (35) (162) (17) Loans from related parties (7,458) (8,726) (1,958) (253) (816) (5,699) Cash pooling (1,526) (1,527) (1,527) - - - Total (27,547) (37,246) (6,405) (3,752) (7,257) (19,832)

Derivative financial liabilities Foreign exchange contracts (132) (132) (108) - (7) (17) Total (132) (132) (108) - (7) (17)

December 31, 2014 Carrying Contractual Cash Less than amount Flow 1 Year 1-2 Years 2-5 Years More than 5 Years Non-derivative financial liabilities Convertible Bonds Other bonds (16,639) (25,143) (2,081) (2,735) (9,199) (11,129) Loans over 100 (604) (626) (11) (615) - - Other non-derivative financial liabilities (203) (215) (102) (42) (51) (20) Loans from related parties (7,984) (9,799) (976) (1,244) (1,214) (6,364) Cash pooling (4,120) (4,168) (4,168) Total (29,550) (39,951) (7,337) (4,636) (10,464) (17,513)

Derivative financial liabilities Interest rate instruments (53) (53) - - (53) - Foreign exchange contracts (6) (6) (3) - - (3) Total (59) (59) (3) - (53) (3) 192 Financial statements

Cross currency swaps

In December 2014, the Company entered into EUR/USD cross currency swaps (“CCS”) to hedge euro denominated net investment in foreign operations amounting to €303 million in the Company’s consolidated financial statements. The EUR/USD CCS have a notional of 375 and a fair value gain of 85 net of a deferred tax expense of 25 has been recorded in the statements of operations for the year ended December 31, 2015. The Company is committed to a bilateral cash collateral arrangement for a maximum of €150 million.

On May 27, 2015, the Company entered into additional EUR/USD CCS to hedge euro denominated net investment in foreign operations amounting to €918 million in the Company’s consolidated financial statements. The EUR/USD CCS have a notional of 1,000 and a fair value loss of 24 net of a deferred tax asset of 7 has been recorded in the statements of operations for the year ended December 31, 2015.

The cross currency swap is classified into Level 2.

Cross currency swaps are as follows:

December 31, 2015 Fair value at Fair value as of December Derivatives Notional amount Date traded December 31, 2014 Change in fair value 31, 2015 CCS 30Y 250 3-Dec-14 (3) 59 56 CCS 30Y 125 12-Dec-14 - 29 29 CCS 5Y 500 28-May-15 - (7) (7) CCS 10Y 300 28-May-15 - (10) (10) CCS 10Y 160 28-May-15 - (6) (6) CCS 10Y 40 28-May-15 - (1) (1) Total 1,375 (3) 64 61

December 31, 2014 Fair value at Fair value as of December Derivatives Notional amount Date traded December 31, 2013 Change in fair value 31, 2014 CCS 30Y 250 3-Dec-14 - (3) (3) CCS 30Y 125 12-Dec-14 - - - Total 375 - (3) (3)

Sensitivity analysis

Foreign currency sensitivity

The following table details the Company’s sensitivity as it relates to derivative financial instruments to a 10% strengthening and a 10% weakening in the U.S. dollar against the other currencies for which the Company estimates to be a reasonably possible exposure. The sensitivity analysis includes only foreign currency derivatives on USD against another currency. A positive number indicates an increase in profit or loss and other equity where a negative number indicates a decrease in profit or loss and other equity.

December 31, 2015 Income Other Equity 10% strengthening in U.S. dollar 180 - 10% weakening in U.S. dollar (181) -

Cash flow sensitivity analysis for variable rate instruments

The following table details the Company’s sensitivity as it relates to variable interest rate instruments. A change of 100 basis points (“bp”) in interest rates during the period would have increased (decreased) profit or loss by the amounts presented below. This analysis assumes that all other variables, in particular foreign currency rates, remain constant.

December 31, 2015 Interest Rate Swaps/Forward Floating porting of net debt1 Rate Agreements 100 bp increase 13 - 100 bp decrease (13) - 1 Please refer to note 12 for a description of total net debt (including fixed and floating portion) Financial statements 193

Note 14 – Equity (257) through a reduction of the Company law, the Company is The minimum and maximum accounting par value per share to required to transfer a minimum conversion prices are subject to Authorized shares €0.10 without any distribution to of 5% of its net profits for each adjustment upon the occurrence shareholders, the balance being financial year to a legal reserve. of certain events, and were, as At the extraordinary general allocated to additional paid-in This requirement ceases to be of December 31, 2015, $15.98 meeting held on May 8, 2013, capital. The aggregate number necessary once the balance of and $19.98, respectively. The the shareholders approved an of shares issued and fully paid up the legal reserve reaches 10% of Company determined the notes increase of the authorized share amounts to 1,803,359,338. The common shares. The legal reserve met the definition of a compound capital of the Company by €524 ordinary shares do not have a par is not available for distribution to financial instrument and as such million represented by 223 million value. the shareholder. determined the fair value of the shares, or approximately 8% financial liability component of of ArcelorMittal’s outstanding On March 11, 2016, ArcelorMittal Treasury shares the bond was 384 on the date capital. Following this approval, announced the terms of a $3 of issuance and recognized it as which is valid for five years, the billion capital increase by way As of December 31, 2015 and long-term obligation. The value total authorized share capital of the issuance of 1,803,359,338 2014, the Company held 1,557,833 of the equity component of 1,838 was €8.2 billion represented by rights at a ratio of 7 shares for and 995,156 treasury shares was determined based upon the 1,995,857,213 shares without par 10 rights following the adoption respectively. difference of the cash proceeds value. of enabling resolutions by the received from the issuance of extraordinary general meeting Option premiums on treasury the bond and the fair value of At the extraordinary general of shareholders on March 10, shares the financial liability component meeting held on March 10, 2016, 2016. The rights issue for an on the date of issuance and is the shareholders approved a aggregate of 1,262,351,531 shares Following the repayment of the included in equity. decrease of the authorized share is structured as non-statutory 800 Convertible Senior Notes capital of the Company by €8,049 preferential subscription rights on May 15, 2014, the Company During the fourth quarter of million through a reduction of for ArcelorMittal shareholders. reclassified from reserves to 2015, the Company delivered the accounting par value per The Mittal family has committed retained earnings premiums paid 2,275,026 treasury shares against share to €0.10 and a subsequent to take up its pro-rata 37.38% for an amount of 435 (309 net 1,817,869 notes converted at the increase by €3 billion. Following entitlement corresponding of tax) with respect to expired option of their holders. As a result this approval, which is valid for five to approximately $1.1 billion. USD denominated call options of such voluntary conversions, years, the total authorized share ArcelorMittal has entered on treasury shares acquired on the carrying amount of MCNs capital was €3.2 billion represented into a standby underwriting December 18, 2010 in order to decreased by 38. On January 15, by 31,995,857,213 shares without commitment with different banks hedge its obligations arising from 2016, upon final maturity of the par value. acting as joint global coordinators, the potential conversion of the MCNs, the remaining outstanding pursuant to which the latter 800 Convertible Senior Notes into 88,182,131 notes were converted Share capital undertook to underwrite the ArcelorMittal shares. into 137,967,116 new common capital increase for the remaining shares. Accordingly, share capital Following the completion of an amount, subject to customary Mandatorily convertible notes and additional paid-in-capital offering of ordinary shares on conditions. Subscription price of increased by 622 and 1,178, January 14, 2013, ArcelorMittal €2.20 per share represents a 35.3% On January 16, 2013, ArcelorMittal respectively and carrying amount increased share capital by €455 discount to the theoretical ex- issued mandatorily convertible of MCNs decreased by 1,800. (608) from €6,428 (9,404) to €6,883 rights price, based on the closing subordinated notes (“MCNs”) with (10,011) through the issuance price of ArcelorMittal’s shares on net proceeds of 2,222. The notes Subordinated perpetual capital of 104,477,612 new shares fully Euronext Amsterdam on March 10, have a maturity of 3 years, were securities paid up. The aggregate number 2016. Rights exercise periods run issued at 100% of the principal of shares issued and fully paid up from March 15, 2016 until March amount and are mandatorily On September 28, 2012, the increased to 1,665,392,222. 29, 2016 for rights held via book converted into ordinary shares of Company issued subordinated entry in Depositary Trust Company ArcelorMittal at maturity unless perpetual capital securities for On January 15, 2016, following (“DTC”) or in the New York rights converted earlier at the option a nominal amount of 650 and a the maturity of the mandatorily register and March 30, 2016 of the holders or ArcelorMittal coupon of 8.75%, which resets convertible notes, the Company for rights held in the European or upon specified events in periodically over the life of the increased share capital by €570 clearing systems. Delivery of accordance with the terms of the securities, with the first reset after (622) from €6,883 (10,011) to the new shares pursuant to MCNs. The MCNs pay a coupon five years and subsequently every €7,453 (10,633) through the rights held through the European of 6.00% per annum, payable five years thereafter. A step up issuance of 137,967,116 new clearing systems and in the quarterly in arrears. The minimum in interest of 0.25% would have shares fully paid up. The aggregate European rights register is conversion price of the MCNs was occurred on the second reset date number of shares issued and fully expected to take place on or set at $16.75, corresponding to and a subsequent step up of 0.75% paid up increased to 1,803,359,338. about April 8, 2016. Delivery of the placement price of shares in (cumulative with the initial 0.25%) the new shares to holders whose the concurrent ordinary shares fifteen years later. The Company Following the extraordinary rights are held via book entry in offering as described above, and was entitled to call the securities general meeting held on March DTC or directly on the New York the maximum conversion price in five years, ten years and on 10, 2016, ArcelorMittal decreased rights register is expected to take was set at approximately 125% subsequent coupon payment share capital by €7,273 (10,376) place on or about April 11, 2016. of the minimum conversion dates. As the Company had no from €7,453 (10,633) to €180 In accordance with Luxembourg price (corresponding to $20.94). obligation to redeem the securities 194 Financial statements

and the coupon payment may have been deferred by the Company under certain circumstances, it classified the net proceeds from the issuance of subordinated perpetual capital securities (642 net of transaction costs) as equity. Coupon payments to holders of subordinated perpetual capital securities in 2013 and 2014 were 57 and 22, respectively.

On February 20, 2014, ArcelorMittal redeemed all of its outstanding 650 subordinated perpetual capital securities following the occurrence of a “Ratings Agency Event”, as defined in the terms of the securities. The notes were redeemed for 657, at a redemption price of 101% of the principal amount, plus accrued coupon of 22.

Earnings per common share

The following table provides the numerators and a reconciliation of the denominators used in calculating basic and diluted earnings per common share for the years ended December 31, 2015 and 2014:

Year ended Year ended December 31, December 31, 2015 2014 Net (loss) income attributable to equity holders of the parent (7,946) (1,086) Interest assumed on the coupon and the premium for early redemption for subordinated perpetual capital securities - (14) Net (loss) income considered for the purposes of basic and diluted earnings per share (7,946) (1,100)

Weighted average ordinary shares outstanding (in millions) for the purposes of basic and diluted earnings per share* 1,795 1,791

For the purpose of calculating outstanding for the years ended Dividends from the sale of its assets or from earnings per common share, December 31,2015 and 2014 the share premium received from diluted weighted average respectively, because such share The Company has no significant the issuance of ordinary shares. common shares outstanding unit plans and stock options are manufacturing operations of its Dividends are declared in U.S. excludes 8 million and 7 million anti-dilutive. own. Accordingly, it can only pay dollars and are payable in either potential common shares from dividends or distributions to the U.S. dollars or in euros. share unit plans and 17 million extent it is entitled to receive cash and 20 million potential common dividend distributions from its shares from stock options subsidiaries’ recognized gains,

Dividend per Description Approved by Payout date share (in $) Dividend for financial year 2013 Annual General Shareholders’ meeting on May 8, 2014 0.20 July 15, 2014 Dividend for financial year 2014 Annual General Shareholders’ meeting on May 5, 2015 0.20 June 15, 2015

Given the challenging global Stock Option Plans Plan 2009-2018 (which replaced granted at the discretion of economic conditions and the the ArcelorMittalShares plan that ArcelorMittal’s Appointments, Company’s priority to deleverage, Prior to the May 2011 annual expired in 2009), ArcelorMittal Remuneration and Corporate ArcelorMittal’s Board of Directors general shareholders’ meeting may grant options to purchase Governance Committee, or its proposed that no dividend be adoption of the ArcerlorMittal common shares to senior delegate. The options vest either paid for financial year 2015. This Equity Incentive Plan described management of ArcelorMittal and ratably upon each of the first three proposal is subject to shareholder below, ArcelorMittal’s equity-based its associates for up to 100,000,000 anniversaries of the grant date, or, approval at the next annual incentive plan took the form of a shares of common shares. The in total, upon the death, disability general meeting on May 4, 2016. stock option plan known as the exercise price of each option or retirement of the participant. Global Stock Option Plan. equals not less than the fair market value of ArcelorMittal shares on Dates of grant and exercise prices Under the terms of the the grant date, with a maximum are as follows: ArcelorMittal Global Stock Option term of 10 years. Options are

Date of grant Exercise prices (per option) August 2008 78.44 December 2007 70.81 August 2007 61.09 August 2009 36.38 September 2006 32.07 August 2010 30.66 November 2008 21.14 Financial statements 195

No options were granted during each option grant to purchase available on ArcelorMittal shares below as of and for each of the the years ended December 31, ArcelorMittal common shares is in the open market, as well as, years ended December 31, 2015 2015 and 2014. estimated using the Black-Scholes- historical patterns of volatility. and 2014: Merton option pricing model The fair values for options and (based on year of grant). The compensation expense other share-based compensation recognized for stock option plans are recorded as an expense in the The expected life of the options is was nil and nil for the years ended statements of operations for the estimated by observing general December 31, 2015 and 2014, Company’s employees and as a option holder behavior and actual respectively. capital contribution for employees historical lives of ArcelorMittal of subsidiaries over the relevant stock option plans. In addition, Option activity with respect vesting or service periods, adjusted the expected annualized volatility to ArcelorMittalShares and to reflect actual and expected has been set by reference to ArcelorMittal Global Stock Option levels of vesting. The fair value of the implied volatility of options Plan 2009-2018 is summarized

Range of Exercise Prices Weighted Average Exercise Number of Options (per option) Price (per option) Outstanding, December 31, 2013 21,563,626 21.14 - 78.44 48.31 Expired (1,486,360) 27.31 - 78.44 48.96 Outstanding, December 31, 2014 20,077,266 21.14 - 78.44 48.26 Expired (2,885,194) 27.31 - 78.44 41.75 Outstanding, December 31, 2015 17,192,072 21.14 - 78.44 49.35

Exercisable, December 31, 2013 21,563,626 21.14 - 78.44 48.31 Exercisable, December 31, 2014 20,077,266 21.14 - 78.44 48.26 Exercisable, December 31, 2015 17,192,072 21.14 - 78.44 49.35

The following table summarizes information about total stock options of the Company outstanding as of December 31, 2015:

Options Outstanding Weighted average Options exercisable Exercise Prices (per option) Number of options contractual life Maturity (number of options) (in years) $30.66 4,256,800 4.60 4,256,800 August 3, 2020 36.38 4,093,450 3.60 4,093,450 August 4, 2019 21.14 2,585 2.87 2,585 November 10, 2018 78.44 4,218,950 2.60 4,218,950 August 5, 2018 70.81 13,000 1.95 13,000 December 11, 2017 61.09 3,080,335 1.59 3,080,335 August 2, 2017 32.07 1,526,952 0.67 1,526,952 September 1, 2016 $21.14 – 78.44 17,192,072 2.98 17,192,072

Long-Term Incentives: Equity- Plan provides for the grant of PSUs under the ArcelorMittal RSUs and PSUs may be allocated Based Incentives (Share Unit Plans) Restricted Share Unites (each, an Equity Incentive Plan. to eligible employees under the “RSU”) and Performance Share The maximum number of RSUs ArcelorMittal Equity Incentive Plan On May 10, 2011, the annual Unites (each, a “PSU”) to eligible and PSUs available for grant during and the GMB PSU Plan combined. general meeting of shareholders Company employees and is any given year is subject to the approved the ArcelorMittal Equity designed to incentivize employees, prior approval of the Company’s ArcelorMittal Equity Incentive Plan Incentive Plan, a new equity-based improve the Company’s long- shareholders at the annual general incentive plan that replaced the term performance and retain meeting. The annual shareholders’ RSUs granted under the Global Stock Option Plan. The key employees. On May 8, 2013, meeting on May 5, 2015 approved ArcelorMittal Equity Incentive ArcelorMittal Equity Incentive Plan the annual general meeting of the maximum to be granted until Plan are designed to provide a is intended to align the interests shareholders approved the GMB the next annual shareholders’ retention incentive to eligible of the Company’s shareholders PSU Plan, which provides for the meeting. For the period from employees. RSUs are subject to and eligible employees by grant of PSUs to GMB members. the May 2015 annual general “cliff vesting” after three years, allowing them to participate in Until the introduction of the GMB shareholders’ meeting to the May with 100% of the grant vesting on the success of the Company. The PSU Plan in 2013, GMB members 2016 annual general shareholders’ the third anniversary of the grant ArcelorMittal Equity Incentive were eligible to receive RSUs and meeting, a maximum of 5,000,000 contingent upon the continued 196 Financial statements

active employment of the eligible the GMB PSU Plan instead of the GMB PSU Plan the GMB PSU Plan are subject employee within the Group. ArcelorMittal Equity Incentive Plan. to the fulfillment of cumulative Between 500 and 700 of the PSUs vest three years after their The GMB PSU Plan is designed performance criteria over a three- Group’s most senior managers are date of grant subject to the to enhance the long-term year period from the date of the eligible for RSUs. eligible employee’s continued performance of the Company and PSU grant. The value of the grant employment with the Company align the members of the GMB at grant date will equal one year of The grant of PSUs under the and the fulfillment of targets to the Company’s objectives. The base salary for the Chief Executive ArcelorMittal Equity Incentive related to the following members of the GMB including the Officer and 80% of base salary for Plan aims to serve as an effective performance measures: return on Chief Executive Officer are eligible the other GMB members. Each performance-enhancing scheme capital employed (ROCE) and a for PSU grants. The GMB PSU Plan PSU may give right to up to two based on the employee’s strategic measure which was total provides for cliff vesting on the shares of the Company. The two contribution to the eligible cost of employment (in U.S. dollars third year anniversary of the grant performance criteria required to achievement of the Company’s per tonne) for the steel business date, under the condition that the be met for PSUs to vest are total strategy. Awards in connection (TCOE) and the mining volume relevant GMB member continues shareholder return and earnings with PSUs are subject to the plan and ROCE for the Mining to be actively employed by the per share. fulfillment of cumulative segment until 2013 grant. As from Group on that date. If the GMB performance criteria over a three- 2014, most of the Steel Business member is retired on that date or The following table summarizes year period from the date of the Units have kept only ROCE as in case of an early retirement by the Company’s share unit plans PSU grant. The employees eligible performance measure and Mining mutual consent, the relevant GMB outstanding as of December 31, to receive PSUs are a sub-set of continued with ROCE and mining member will not automatically 2015: the group of employees eligible volume plan. Each performance forfeit PSUs and pro rata vesting to receive RSUs. The target group measure has a weighting of 50%. will be considered at the end for PSU grants initially included In case the level of achievement of of the vesting period at the the Chief Executive Officer and the both performance targets together sole discretion of the Company, other GMB members. However, is below 80%, there is no vesting, represented by the Appointment, from 2013 onwards, the Chief and the rights are automatically Remuneration and Corporate Executive Officer and other GMB forfeited. Governance Committee of the members receive PSU grants under Board of Directors. Awards under

At Grant date Number of shares as of December 31, 2015 Type of Number Number of Fair value Shares Shares Shares Grant date Maturity plan of shares beneficiaries per share outstanding exited forfeited December 18, 2015 PSU 887,643 322 December 18, 2018 $3.83 887,643 - - December 18, 2015 RSU 1,105,361 576 December 18, 2018 3.83 1,105,361 - - June 30, 2015 GMB PSU 464,305 4 June 30, 2018 8.53 464,305 - - December 17, 2014 PSU 979,870 353 December 17, 2017 10.28 906,370 - 73,500 December 17, 2014 RSU 1,173,910 620 December 17, 2017 10.28 1,091,152 741 82,017 June 27, 2014 GMB PSU 843,376 6 June 27, 2017 16.85 767,746 - 75,630 September 27, 2013 PSU 504,075 384 September 27, 2016 13.17 412,720 - 91,355 September 27, 2013 RSU 1,065,415 682 September 27, 2016 13.17 903,246 13,143 149,026 June 28, 2013 GMB PSU 631,077 7 June 28, 2016 16.6 542,632 - 88,445 March 29, 2013 PSU 182,970 94 March 29, 2016 12.37 130,155 - 52,815 March 29, 2013 RSU 1,071,190 681 March 29, 2016 12.37 861,419 20,438 189,333 Total 8,909,192 $3.83 – $16.85 8,072,749 34,322 802,121

These equity incentive plans are accounted for as equity-settled share-based transactions. The fair value for the RSUs and PSUs allocated to the beneficiaries is recorded as an expense in the statements of operations for the Company’s employees and as a capital contribution for employees of subsidiaries over the relevant vesting or service periods. The compensation expense recognized for RSUs and PSUs were immaterial for the years ended December 31, 2015 and 2014. Financial statements 197

Share unit plan activity is summarized below as of and for each year ended December 31, 2015 and 2014:

Restricted share unit (RSU) Performance share unit (PSU) Number of Fair value per Number of Fair value per shares share shares share Outstanding, December 31, 2013 3,243,666 13.36 1,527,147 15.03 Granted 1,173,910 10.28 1,823,246 13.32 Exited (777,252) 14.43 - - Forfeited (230,718) 13.27 (90,215) 14.27 Outstanding, December 31, 2014 3,409,606 12.06 3,260,178 14.10 Granted 1,105,361 3.83 1,351,948 5.44 Exited (321,980) 14.3 (24,721) 16.87 Forfeited (231,809) 11.9 (475,834) 15.2 Outstanding, December 31, 2015 3,961,178 9.59 4,111,571 11.11

Note 15: General and administrative expenses

In December 2014 and January 2015, the Company recorded an expense of 424 and 483, respectively, in connection with the transfer of the global coordination of current and future research and development activities within ArcelorMittal group on January 1, 2015. These amounts corresponded to the acquisition from various group subsidiaries of the rights to use intellectual property developed within the research and development cost sharing agreement led previously by ArcelorMittal Investigación y Desarollo, S.L. (“AMID”). In addition, in December 2014, the Company recorded an expense of 113 relating to the acquisition from AMID of the legal ownership and exploitation rights of this intellectual property.

This acquisition enabled the Company to implement effective January 1, 2015 an industrial franchise agreement with group subsidiaries replacing previous arrangements and whereby the Company licenses its business model for manufacturing, processing and distributing steel to group subsidiaries (see note 3).

The Company concluded that the acquisition of intellectual property rights did not meet the criteria to recognize an intangible asset and therefore the total amount was recognized in the statements of operations as general and administrative expenses.

Transactions with related parties are detailed in note 11.

Note 16: Financing costs

Financing costs recognized in the years ended December 31, 2015 and 2014 were as follows: 2015 2014 Recognized in the statements of operations Interest expense (1,504) (1,691) Interest income 711 999 Gain (loss) on disposal of investments (747) (62) Fair value adjustment on conversion options on the euro convertible bond, call options on ArcelorMittal shares and mandatory convertible bonds (note 13) (108) 112 Net gain on other derivative instruments 72 7 Net foreign exchange result (1,457) (605) Other (49) (196) Total (3,082) (1,436) Recognized in other comprehensive income Net change in fair value of available-for-sale financial assets (39) 101 Total (39) 101

In 2015, loss on disposal of investments of 747 included primarily losses of 721 and 30 with respect to the disposal of interests in AMO Holding Switzerland A.G. and Arcelor Investment S.A., respectively (see note 8). In 2014, loss on disposal of investments of 62 related to Hunan Valin and comprised gains on disposal of 17 and 62 following the exercise of the third put option on February 6, 2014 and fourth put option on August 6, 2014, respectively, and a loss of 141 with respect to the remeasurement at fair value of the Company’s 15% interest following its reclassification as available-for-sale investment.

Transactions with related parties are detailed in note 11. 198 Financial statements

Note 17 – Income from subsidiaries and associates

The income from subsidiaries and associates in 2015 is mainly related to dividends received from AMO Holding Switzerland A.G. for € 2,804 (3,144) and from AM Global Holding S.à.r.l. for € 2,600 (2,819).

In 2014, income from subsidiaries and associates comprised mainly the dividend of € 1,610 (1,978) received from AM Global Holding S.à.r.l.

Note 18 – Income tax

Income tax expense (benefit) The components of the income tax expense (benefit) for each of the years ended December 31, 2015 and 2014 are summarized below:

2015 2014 Total current tax expense (benefit) (251) (491) Total deferred tax expense (benefit) 298 (115) Total income tax expense (benefit) 47 (606) The following table reconciles the income tax expense (benefit) to the statutory tax expense (benefit) as calculated:

Year ended Year ended December 31, 2015 December 31, 2014 Net income (loss) (33,414) 488 Income tax expense (benefit) 47 (606) Loss before tax : (33,367) (118) Tax benefit at the statutory rate (9,750) (34) Permanent items 8,315 (539) Taxable results transferred from subsidiaries included in the tax integration (1,238) (226) Net change in measurement of deferred tax assets 2,449 (129) Effects of foreign currency translation 233 311 Other taxes 38 11 Income tax expense (benefit) 47 (606) Permanent items The permanent items consist of: 2015 2014 Non-tax deductible impairment losses 9,884 68 Non-tax deductible capital losses 220 - Exempt dividend income (1,753) (582) Exempt capital gains - (23) Other permanent items (36) (2) Total permanent items 8,315 (539)

Non tax-deductible impairment 235 were related to the Company’s Exempted dividend income: Net change in measurement of charges: investments in Hunan Valin and Under Article 166 of the deferred tax assets Write-down charges taken Arcelor Investment S.A. Luxembourg tax law, dividend The 2015 net change in on investments in shares of income, liquidation proceeds, measurement of deferred tax subsidiaries are generally tax Non-tax deductible capital losses: and capital gains may be assets of 2,449 consists of tax deductible under the Luxembourg The Capital losses made on treated as tax-exempt so long expense of 2,151 due to the tax legislation. However the disposal of shares are generally as certain requirements are unrecognized tax loss for the write-down charges are not tax deductible under the met relating to the parent’s period and de-recognition of DTA tax-deductible if they (i) are Luxembourg tax legislation. In participation in the subsidiary. for 298. The de-recognition in neutralized with exempt dividend cases where the loss (i) relates to The participation exemption Luxembourg represents the net income, exempt capital gains and the received exempted dividend applies if the Luxembourg parent reduction in projections of future mark to market valuation, or (ii) income, or (ii) is made on disposal maintains (or commits to hold) a taxable income in Luxembourg arise within the tax consolidation. of the entities within the same minimum holding in a qualified driven primarily by the challenging These non tax-deductible charges tax integration, the capital loss subsidiary company (generally market conditions affecting the for 2015 amount to 33,827 and then is non tax-deductible. For a shareholding of at least 10% steel industry and unfavorable are mainly related to ArcelorMittal 2015 these tax losses amount or having an acquisition cost foreign exchange movements, Global Holding and Ispat to 751 and are related to AMO of at least EUR 1.2m) for an partially offset by reductions in Inland. The non tax-deductible Holding Switzerland and Arcelor uninterrupted period of at least 12 forecasted interest expense due to impairment charges for 2014 of Investments S.A. months. the Company’s announced plans Financial statements 199

in 2016 to repay debt with proceeds from a $3 billion equity rights offering and selling its 35% shareholding in Gestamp Automoción for €875 million. The taxable income projection also includes the effect of the anticipated elimination of the current USD exposure of Luxembourgish deferred tax assets denominated in Euro.

Effects of foreign currency translation The effects of foreign currency translation of 233 and 311 for 2015 and 2014, respectively, are related to the different functional currency of the Company than the currency applied for tax filing purposes.

Uncertain tax positions ArcelorMittal takes income tax positions that management believes are supportable and are intended to withstand challenge by tax authorities. Some of these positions are inherently uncertain and include those relating to transfer pricing matters and the interpretation of income tax laws applied to complex transactions. The Company periodically reassesses its tax positions. Changes to the financial statement recognition, measurement, and disclosure of tax positions is based on management’s best judgment given any changes in the facts, circumstances, information available and applicable tax laws. Considering all available information and the history of resolving income tax uncertainties, the Company believes that the ultimate resolution of such matters will not have a material effect on the Company’s financial position, statements of operations or cash flows.

Deferred tax assets and liabilities The origin of deferred tax assets and liabilities is as follows:

Assets Liabilities Net December December December December December December 31, 2015 31, 2014 31, 2015 31, 2014 31, 2015 31, 2014 Concession, patents, licenses 7 - - - 7 - Treasury shares - - - (3) - (3) Financial instruments ------Provisions - 4 (1) - (1) 4 Tax losses carried forward 6,797 7,897 - - 6,797 7,897 Deferred tax assets / (liabilities) 6,804 7,901 (1) (3) 6,803 7,898

Deferred tax assets not recognized by the Company as of December 31, 2015 were as follows:

Total deferred tax Recognized Unrecognized Gross amount assets deferred tax assets deferred tax assets Tax losses carried forward 61,478 17,581 6,797 10,783 Other temporary differences 24 7 7 - Total 17,588 6,804 10,783

Deferred tax assets not recognized by the Company as of December 31, 2014 were as follows:

Total deferred tax Recognized Unrecognized Gross amount assets deferred tax assets deferred tax assets Tax losses carried forward 52,843 15,082 7,897 7,185 Other temporary differences 12 4 4 - Total 15,086 7,901 7,185

As of December 31, 2015, deferred tax losses in Luxembourg tax losses can be carried forward losses carried forward, 14,585 tax assets not recognized relate with respect to the main tax indefinitely and are not subject to may be subject to recapture in only to tax losses carried forward. consolidation amounts to any specific yearly loss utilization the future if the write-downs The utilization of tax losses carried approximately 61,478 as of limitations. The tax losses carried that caused them are reversed forward is restricted to the taxable December 31, 2015. Of this forward relate primarily to tax creating taxable income unless income of the Luxembourg tax amount 24,574 is considered deductible write-down charges the Company converts them consolidated group. The utilization realizable, resulting in the taken on investments in shares of to permanent through sales or of tax losses carried forward also recognition of 6,797 of deferred consolidated subsidiaries recorded other organizational restructuring may be restricted by the character tax assets at the applicable income by certain of the ArcelorMittal activities. of the income. tax rate in Luxembourg. Under group’s holding companies in The total amount of accumulated the Luxembourg tax legislation Luxembourg. Of the total tax 200 Financial statements

The Company believes that it is probable that sufficient future taxable profits will be generated to support the recognized deferred tax asset for tax losses carried forward in Luxembourg. As part of its recoverability assessment the Company has taken into account (i) its most recent forecast approved by management and the Board of Directors, (ii) the low likelihood that the factors that have contributed to past losses in Luxembourg will recur, (iii) the fact that ArcelorMittal in Luxembourg is the main provider of funding to the Group’s consolidated subsidiaries, leading to significant amounts of taxable interest income, (iv) lower interest expense due to the Company’s announced plans in 2016 to repay debt with proceeds from a $3 billion equity rights offering and selling its 35% shareholding in Gestamp for €875 million, (v) the implementation in 2015 of an Industrial Franchising Arrangement between ArcelorMittal and numerous worldwide operating subsidiaries, (vi) the effect of the anticipated elimination of the current USD exposure of Luxembourgish deferred tax assets denominated in Euro, and (vii) other significant and reliable sources of operational income earned from ArcelorMittal’s European and worldwide operating subsidiaries for centralized distribution and procurement activities performed in Luxembourg. In performing the assessment, the Company estimates at which point in time its earnings projections are no longer reliable, and thus taxable profits are no longer probable. Accordingly, the Company has established consistent forecast periods for its different income streams for estimating probable future taxable profits, against which the unused tax losses can be utilized in Luxembourg. At December 31, 2015, based upon the level of historical taxable income and projections for future taxable income over the periods in which the deductible temporary differences are anticipated to reverse, management believes it is probable that ArcelorMittal will realize the benefits of the deferred tax assets of 6,803 recognized. The amount of future taxable income required to be generated by ArcelorMittal’s subsidiaries to utilize the deferred tax assets of 6,803 is at least 24,598. Historically, the Company has been able to generate taxable income in sufficient amounts and believes that it will generate sufficient levels of taxable income in upcoming years to permit the Company to utilize tax benefits associated with tax losses carried forward and other deferred tax assets that have been recognized in its financial statements. In the event that a history of recent losses is present, the Company relied on convincing other positive evidence such as the character of (historical) losses and tax planning to support the deferred tax assets recognized. No deferred tax liability has been recognized in respect of other temporary differences on investments in subsidiaries, associates and interests in joint ventures because the Company is in a position to control the timing of the reversal of the temporary difference and it is probable that such differences will not reverse in the foreseeable future.

Note 19 – Accrued expenses and other liabilities

Accrued expenses and other liabilities are summarized as follows:

December 31, 2015 2014 Accrued interest 409 389 Accrued payroll and employee related expenses 14 17 Derivative instruments (note 13) 108 3 Put option in relation with China Oriental shares1 - 96 Payable on acquisition of intellectual property rights, R&D and other IFA expenses (notes 6 and 15) 282 540 Financial guarantee (note 20) - 22 Suppliers and other 219 141 Total 1,032 1,208

1 On April 30, 2008, the Company entered into two put option agreements with ING and Deutsche Bank in connection with the sale of 509,780,740 shares representing 17.40% of the issued share capital of China Oriental. By virtue of these agreements, ING and Deutsche Bank had the right to sell these shares to the Company at the expiring date of the agreement, April 30, 2014. On that date, following simultaneously with the exercise by Deutsche Bank of its put option with respect to a 7.5% stake in China Oriental, the Company sold this investment to Macquarie Bank and entered into a put option arrangement with the latter maturing on April 30, 2015. The Company extended the existing put option agreement with ING in relation to a further 9.9% stake in China Oriental until April 30, 2015. On April 30, 2015, ING and Macquarie Bank exercised their put option for their respective 9.9% and 7.5% stakes in China Oriental (see note 9). Accrued expenses and other liabilities and prepaid expenses and other current assets decreased by 96 and 48, respectively, as a result of these changes.

Balances with related parties are detailed in note 11. Financial statements 201

Note 20 – Other long term obligations

Other long obligations are summarized as follows:

December December 31, 2015 31, 2014 Liability component of the mandatorily convertible notes1 - 138 Financial guarantee2 - 44 Derivative instruments (note 13) 24 56 Other 2 - Total 26 238 1 The liability component of the mandatorily convertible notes was transferred to accrued expenses and other liabilities as a result of the maturity of the notes on January 16, 2016. 2 On​ June 12, 2014, the Company issued a financial guarantee in connection with the assignment to a bank by Arcelor Investment S.A. of its loan granted to ArcelorMittal Las Truchas (see note 21). The Company recognized this guarantee at its fair value of 66 (of which 22 classified as accrued expenses and other liabilities see note 19) at December 31, 2014. The fair value was determined on the basis of the amount paid by the Company to Arcelor Investment S.A. upon exercise of the guarantee on February 18, 2015, following the early repayment of the loan on February 13, 2015. The Company classified the instruments as Level 3.

Note 21 - Commitments

Commitments given are summarized as follows:

December December 31, 2015 31, 2014 Other commitments1 4,608 5,850 Foreign exchange derivative instrument2 1,386 428 Total 5,994 6,278 1 Other commitments comprise amounts committed with regard to credit lines and guarantees given on behalf of subsidiaries, associates and joint ventures. Other commitments comprise commitments incurred under credit lines granted to subsidiaries and associates (910 and 1,003 as of December 31, 2015 and 2014, respectively), guarantees given to third parties on behalf of subsidiaries and associates (3,303 and 4,509 as of December 31, 2015 and 2014, respectively) and guarantees given to third parties by the Company (46 and 63 as of December 31, 2015 and 2014, respectively). The letter of credit facilities amounting to 475 and 450 were utilized for a total amount of 349 and 275 as of December 31, 2015 and 2014, respectively. The Company is jointly and severally liable for the following entities: ArcelorMittal Finance S.C.A., ArcelorMittal Treasury S.N.C., ArcelorMittal Sourcing and ArcelorMittal Energy S.C.A. 2 Foreign​ exchange derivative instruments mainly consist of currency swaps which matured in January 2016.

On November 29, 2013, the and Nippon Steel & Sumitomo guarantees and the third one will AG, respectively. The Company Company issued a guarantee Metal Corporation, entered into expire on September, 26 2024 and warrants to own directly or in connection with the Joint two bridge loans of 660 each May 30, 2025 respectively. indirectly the entire legal and Venture Formation agreement in order to finance in part the beneficial interest in the share between ArcelorMittal USA acquisition of ThyssenKrupp Steel On December 28, 2009 and capital of such companies for and Nippon Steel & Sumitomo USA, LLC. The Company issued January 17, 2012, a wholly-owned so long as any notes remain Metal Corporation to acquire two unconditional payment subsidiary of the Company used outstanding. ArcelorMittal also ThyssenKrupp Steel USA. This guarantees for 50% of the principal the proceeds from the issuance of undertakes to provide any funding guarantee covered the payment amount plus interest of each of an unsecured and unsubordinated which would be necessary to these obligations of ArcelorMittal USA the two above-mentioned bridge bond mandatorily convertible affiliates to meet their obligations pursuant to the Joint Venture loans. The guarantees expired on into preferred shares of such with respect to the notes. Formation agreement. This May 27, 2014 and June 25, 2014. subsidiary to acquire notes linked guarantee expired on June 26, On May 22, 2014 AM/NS Calvert to shares of the listed related On April 3, 2014, the Company 2014. On February 24, 2014, LLC entered into three new loan parties Eregli Demir ve Celik issued a guarantee in relation Calvert Acquisition LLC (which, agreements for a total amount of Fab. T.A.S. (Turkey) and China with bilateral cash management after the acquisition described 1,200. In this context, the Company Oriental (China). The notes were and financial transaction in below, merged into the target issued three unconditional issued by the Company’s affiliates favor of ArcelorMittal Treasury company and changed its name to payment guarantees for 50 % of Arcelor Investment Services for a maximum amount of € 20 AM/NS Calvert LLC), a 50/50 joint the principal of the three above S.A., Expert Placement Services billion, covering overdraft granted venture between ArcelorMittal mentioned loans. The two first Ltd and ArcelorMittal Holdings by ArcelorMittal Treasury to 202 Financial statements

subsidiaries of ArcelorMittal group for 9,500 and 9,900 as of December 31, 2015 and 2014, respectively.

Corporate guarantee letter

On May 28, 2009, in the framework of a legal reorganization in Canada, the Company entered into a support agreement with ArcelorMittal Canada Holdings Inc. whereby it undertakes to take all such actions as necessary to enable ArcelorMittal Canada Holdings Inc. to reacquire the preferred shares held by its shareholder Mittal Steel International Holdings B.V. upon exercise of such right by the latter.

Note 22: Deferred employee benefits

Certain employees of ArcelorMittal are included in the unfunded defined benefit pension plan managed by the Company’s affiliate ArcelorMittal Luxembourg S.A. The Company has a defined benefit obligation with respect to this plan by virtue of a contractual arrangement with ArcelorMittal Luxembourg S.A. Benefits are based on such employees’ length of service and applicable pension table under the terms of the agreement. This defined benefit pension plan was closed to new entrants on December 31, 2007 and replaced by a defined contribution pension plan for active members financed by employer and employee contributions.

As of December 31, 2015 and 2014, the pension plan benefits were 17 and 20 respectively.

The following table details the reconciliation of the defined benefit pension obligation:

Year ended Year ended December 31, December 31, 2015 2014 Change in benefit obligation Benefit obligation at beginning of period 20 25 Service cost 1 1 Interest cost - 1 Actuarial (gain) loss 1 (2) Experience adjustment 1 (3) Demographic assumptions - (1) Financial assumptions - 2 Foreign currency exchange rate differences and other movements (5) (2) Benefits paid - (3) Benefit obligation at end of period 17 20

The following table details the components of the pension cost recognized in statements of operations:

Year ended Year ended December 31, December 31, 2015 2014 Net periodic pension cost Service cost 1 1 Interest cost - 1 Total 1 2

Service cost is included in general administrative expense. Interest cost is included in financing costs – net.

Assumptions used to determine benefit obligations

December December 31, 2015 31, 2014 Discount rate 2.05% 1.90% Rate of compensation increase 2.71% 2.71% Financial statements 203

Cash contributions and maturity profile of the plans

In 2016, the Company is expecting its cash contributions to amount to 1 for pension plans. At December 31, 2015, the duration of the liabilities related to the pension plan was 8 years (2014: 7 years).

Risks associated with defined benefit plans

Through its defined benefit pension plans, ArcelorMittal is exposed to a number of risks, the most significant of which is the change in bond yields. A decrease in corporate bond yields will increase plan liabilities.

Sensitivity analysis

The following information illustrates the sensitivity to a change in certain assumptions related to ArcelorMittal’s pension plan (as of December 31, 2015, the defined benefit obligation (“DBO”) for pension was 17):

Effect on 2016 Pre-Tax Pension Expense (sum Effect of December 31, of service cost and 2015 DBO interest cost)1 Change in assumption 100 basis point decrease in discount rate - 1 100 basis point increase in discount rate - (1) 100 basis point decrease in rate of compensation - (2) 100 basis point increase in rate of compensation - 2

¹Amounts are not disclosed as exchange ratio in the second-step amount and reserved the right to or otherwise disposed of their they are below 1 and rounded to merger would be the same as seek additional remedies including Baffinland securities on or after nearest million. that of the secondary exchange the cancellation of the merger. The January 14, 2011. The action offer component of Mittal Steel’s proceedings before the civil court alleges that the tender offer The above sensitivities reflect June 2006 tender offer for Arcelor of Paris have been stayed, pursuant documentation contained certain the effect of changing one (i.e., 11 Mittal Steel shares for to a ruling of such court on July misrepresentations and seeks assumption at a time. Actual seven Arcelor shares), and that 4, 2013, pending a preparatory damages in an aggregate amount economic factors and conditions the second-step merger did not investigation (instruction of 720 (CAD$1billion) or rescission often affect multiple assumptions comply with certain provisions préparatoire) by a criminal judge of the transfer of the Baffinland simultaneously, and the effects of of Luxembourg company law. magistrate (juge d’instruction) securities by members of the class. changes in key assumptions are They claimed, inter alia, the triggered by the complaints not necessarily linear. cancellation of certain resolutions (plainte avec constitution de partie On September 12, 2008, Standard (of the Board of Directors and civile) of AAA and several hedge Iron Works filed a purported class Note 23: Contingencies of the Shareholders meeting) funds (who quantified their total action complaint in the U.S. District in connection with the merger, alleged damages at 268), including Court for the Northern District The Company is currently and the grant of additional shares, those who filed the claims before of Illinois against ArcelorMittal, may in the future be involved in or damages in an amount of the Luxembourg courts described ArcelorMittal USA LLC, and other litigation, arbitration or other legal approximately 196. By judgment (and quantified) above. steel manufacturers, alleging that proceedings. Provisions related to dated November 30, 2011, the the defendants had conspired legal and arbitration proceedings Luxembourg civil court declared all In April 2011, a proceeding was to restrict the output of steel are recorded in accordance with of the plaintiffs’ claims inadmissible commenced before the Ontario products in order to fix, raise, the principles described in note 3. and dismissed them. The (Canada) Superior Court of stabilize and maintain prices at judgment was appealed in May Justice under the Ontario Class artificially high levels in violation On January 8, 2008, ArcelorMittal 2012 and the appeal proceedings Proceedings Act, 1992, against of U.S. antitrust law. Other similar received a writ of summons are ongoing. ArcelorMittal, Baffinland, and direct purchaser lawsuits were on behalf of four hedge fund certain other parties relating also filed in the same court and shareholders of Arcelor to On May 15, 2012, ArcelorMittal to the January 2011 take-over were consolidated with the appear before the civil court of received a writ of summons on of Baffinland by ArcelorMittal, Standard Iron Works lawsuit. On Luxembourg. The summons was behalf of Association Actionnaires Nunavut, Iron Ore Holdings and May 29, 2014, ArcelorMittal and also served on all natural persons d’Arcelor (“AAA”), a French 1843208 Ontario Inc. The action ArcelorMittal USA LLC entered sitting on the Board of Directors association of former minority seeks the certification of a class into an agreement to settle the of ArcelorMittal at the time of the shareholders of Arcelor, to appear comprised of all Baffinland direct purchaser claims for an merger and on the Significant before the civil court of Paris. securities holders who tendered amount of 90 recognized by Shareholder. The plaintiffs alleged In such writ of summons, AAA their Baffinland securities, and ArcelorMittal USA LLC. On October in particular that, based on Mittal claimed (on grounds similar whose securities were taken up, 17, 2014, the court gave its final Steel’s and Arcelor’s disclosure and to those in the Luxembourg in connection with the take- approval of the settlement and public statements, investors had proceedings summarized above) over between September 22, dismissed ArcelorMittal and a legitimate expectation that the inter alia damages in a nominal 2010 and February 17, 2011, ArcelorMittal USA LLC from the 204 Financial statements

lawsuit. In September 2015, the with the State of Senegal relating acceptable outcome. Following state of Senegal and ArcelorMittal court certified a class of direct to an integrated iron ore mining the unsuccessful completion of Holdings AG have since agreed to purchasers on whether there was and related infrastructure project. this procedure, in May 2011 the settle the dispute. On December a conspiracy, allowing the case to The Company announced at the State of Senegal commenced an 12, 2014, the arbitral tribunal proceed against the remaining time that implementation of the arbitration before the Court of issued a procedural order formally defendants as a class action, but project would entail an aggregate Arbitration of the International closing the arbitration. did not certify a class on impact investment of $2.2 billion. Project Chamber of Commerce, or damages. This ruling does not implementation did not follow claiming breach of contract Note 24: Employees and key affect the settlement. Two putative the originally anticipated schedule and provisionally estimating management personnel class actions on behalf of indirect after initial phase studies and damages of 750. In September purchasers have been filed and related investments. 2013, the arbitral tribunal issued As of December 31, 2015, the one has been dismissed for want its first award ruling that Senegal Company employed 248 people of prosecution; the remaining The Company engaged in is entitled to terminate the and the total annual compensation indirect purchasers’ action is not discussions with the State of 2007 agreements. The arbitral of the Company’s employees paid covered by the settlement of the Senegal about the project over tribunal also ruled that a new in 2015 and 2014 was as follows: direct purchaser claims or the a long period. In early 2011, the arbitration phase would be held court’s class certification decision. parties engaged in a conciliation relating to the potential liability procedure, as provided for of ArcelorMittal as well as the In 2007, ArcelorMittal Holdings under their agreement, in an amount of any damages which AG entered into an agreement attempt to reach a mutually could be awarded to Senegal. The

Year ended Year ended December 31, December 31, 2015 2014 Employee Information Wages and salaries 30 53 Social security costs 3 6 Other staff expenses 6 9 Total 39 68

The total annual compensation of ArcelorMittal’s key management personnel, including its Board of Directors, paid in 2015 and 2014 was as follows:

Year ended Year ended December 31, December 31, 2015 2014 Base salary and/or directors fees 2 3 Short-term performance-related bonus - 1 Share based compensation 1 2

The fair value of the stock options granted and shares allocated based on RSU and PSU plans to the ArcelorMittal’s key management personnel is recorded as an expense in the statements of operations over the relevant vesting periods (see note 14).

The Company contributes to a post-employment defined contribution plan on behalf of certain members of key management personnel. The contributions paid amounted to nil and 2 for the years ended December 31, 2015 and 2014, respectively.

As of December 31, 2015 and 2014, ArcelorMittal did not have outstanding any loans or advances to members of its Board of Directors or key management personnel, and had not given any guarantees for the benefit of any member of its Board of Directors or key management personnel.

Note 25 – Expenses related to the réviseur d’entreprises agréé

In 2015 and 2014, expenses related to the réviseur d’entreprises agréé amounted to 8 and 8, respectively. 205 Report of the réviseur d’entreprises agréé 205

Report of the réviseur d’entreprises agréé

To the Shareholders of ArcelorMittal, Société Anonyme 24-26, boulevard d’Avranches L-1160 Luxembourg Grand Duchy of Luxembourg

Report on the financial statements of ArcelorMittal Société Anonyme

Following our appointment by the General Meeting of the Shareholders held on May 5, 2015, we have audited the accompanying financial statements of ArcelorMittal, Société Anonyme, which comprise the statement of financial position as at December 31, 2015, and the statement of operations, comprehensive income, changes in equity and cash flow for the year then ended, and a summary of significant accounting policies and other explanatory information.

Responsibility of the Board of Directors for the financial statements

The Board of Directors is responsible for the preparation and fair presentation of these financial statements in accordance with International Financial Reporting Standards as adopted by the European Union, and including information required to be disclosed under Luxembourg Laws and Regulations, and for such internal control as the Board of Directors’ determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

Responsibility of the réviseur d’entreprises agréé

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing as adopted for Luxembourg by the Commission de Surveillance du Secteur Financier. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the réviseur d’entreprises agréé’s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the réviseur d’entreprises agréé considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the Board of Directors, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the financial statements give a true and fair view of the financial position of ArcelorMittal, Société Anonyme, as at December 31, 2015, and of its financial performance and its cash flows for the year then ended December 31, 2015 in accordance with International Financial Reporting Standards as adopted by the European Union.

Report on other legal and regulatory requirements

The management report, which is the responsibility of the Board of Directors, is consistent with the financial statements and includes the information required by the law of December 19, 2002 on the commercial and companies register and on the accounting records and annual accounts of undertakings, as amended with respect to the corporate governance statement.

For Deloitte Audit Société à responsabilité limitée Cabinet de révision agréé

Vafa Moayed, Réviseur d’entreprises agréé Partner

March 23, 2016 560, rue de Neudorf L-2220 Luxembourg 206 Risk factors

The following pages do not form part of the Company’s financial statements. These pages contain further information on the risks that ArcelorMittal is exposed to and further details on the Company’s Mining business. Risk factors 207

Risks related to the global for steel in other regions, such as raw material) and independently, during periods of economic economy and the mining and steel in the emerging markets, have as a miner and seller of iron weakness have not always been industry similarly led to a rise in exports, ore to third parties. In recent offset by commensurate price particularly in Russia and Brazil periods, a combination of weak increases during periods of ArcelorMittal’s business, financial where production capacity had steel fundamentals and slower economic strength. In addition, condition, results of operations, substantially increased during growth in the principal consuming as indicated above, excess reputation or prospects could the prior periods of high demand. markets (principally China) has supply relative to demand in be materially adversely affected This increase in exports and the weighed heavily on iron ore local markets generally results in by one Tor more of the risks and decrease in the price of such prices. This has been exacerbated increased exports and drives down uncertainties described below. exports, often at levels that may be by iron ore oversupply globally, global prices. Moreover, steel at or below the cost of production, as mines in operation and price decreases can sometimes Risks related to the global has significantly contributed to a coming on line have continued develop their own momentum, economy and the mining and steel sharp drop in steel prices globally, to produce. Accordingly, global as customers adopt a “wait and industry and particularly in the Group’s iron ore production increased in see” attitude and destock in key markets in NAFTA and Europe 2015, while prices plummeted the expectation of further price Excess capacity, oversupply and as well as in ACIS markets. The to historical lows. A continuation decreases. destocking cycles in the steel imposition of tariffs on imports of this trend of steel and iron ore industry and in the iron ore mining is under discussion in various oversupply would have a material Management currently considers industry have in the past, are markets, such as NAFTA, Europe adverse effect on ArcelorMittal’s it likely that, while stabilization currently and may continue in the and South Africa, and these may results of operations and financial is possible, steel prices will future to weigh on the profitability be necessary in order to restore condition. remain on the low side at least of steel producers, including the conditions for profitable through 2016, given expectations ArcelorMittal. operations. A continuation or an Protracted low steel and iron regarding economic conditions increase in exports of low-cost ore prices, and further decreases and demand. Management The steel industry is affected by steel products from developing in steel and iron ore prices, expects iron ore prices to continue global and regional production countries, along with a failure would have an adverse effect to remain under pressure in capacity, fluctuations in steel to implement corrective trade on ArcelorMittal’s results of 2016 due to the supply/demand imports/exports and tariffs and policies, would continue to operations. dynamics summarized above. In customer stocking and destocking depress steel prices in various any case, the timing and extent of cycles. The steel industry globally markets globally. As a producer of steel and iron price recovery or return to prior has historically suffered from ore, ArcelorMittal’s results of levels cannot be predicted. In structural overcapacity, which In addition to the question of operations are sensitive to the response to the decline in steel is amplified during periods of imports, there is a question of market prices of steel and iron and iron ore prices, the Company global or regional economic actual or potential overcapacity ore in its markets and globally. has implemented a number of weakness due to weaker global within specific markets. Europe is a Steel prices and iron ore prices cost-saving measures intended or regional demand. In particular, case in point, with the contraction have been under pressure in to improve operating income, as China is both the largest global in demand in recent years (prior recent periods and particularly well as measures to reduce its cash steel consumer and the largest to stabilization and moderate in 2015, with both steel and iron requirements, including through global steel producer by a increases in 2014/2015) leading to ore reaching historical lows in lower capital expenditures, interest large margin, and the balance structural excess capacity in the 2015. This has had a pronounced expenses and the suspension of between its domestic production European steel industry. Outside of negative effect on ArcelorMittal’s dividend payments. These actions and consumption has been an Europe, steel production capacity results of operations, in the form may not prove sufficient to restore important factor influencing in Asia, particularly in China, of significant declines in revenues or maintain profitability or cash global steel prices in recent years. and certain other developing and operating income. Moreover, flows, particularly if the decline in Steel production capability in economies including Brazil, the particularly sharp decline in steel and iron ore prices is more China currently appears to be Russia, Ukraine and Turkey, has steel prices in the second half protracted than expected or prices well in excess of China’s home increased substantially since of 2015 triggered inventory decline further than expected, market demand, particularly in 2007 in response to rising steel related losses of $1.3 billion, and in which case ArcelorMittal’s light of the recent slowdown in consumption in those markets. the significant decline in iron results of operations and financial China’s economic growth rate and Although the pace of capacity ore prices led to a $3.4 billion condition would be adversely hence steel consumption. Chinese expansion in those countries impairment of mining assets and affected. exports of steel products have as has slowed down in recent goodwill in the fourth quarter of a result increased further in 2015, years, structural overcapacity 2015. Volatility in the supply and prices rising from 94 million tonnes in has increased due to a sharp of raw materials, energy and 2014 to 112 million tonnes in decline in domestic steel demand, Steel and iron ore prices are transportation, and volatility 2015. Moreover, overcapacity and particularly in CIS and Brazil, sensitive to trends in cyclical in steel prices or mismatches unsustainably low domestic prices negatively impacting prices. industries, such as the automotive, between steel prices and raw led Chinese exports to be sold at a construction, appliance, material prices could adversely loss, according to industry studies, As an integrated producer of steel, machinery, equipment and affect ArcelorMittal’s results of during the second half of 2015, ArcelorMittal’s results are also transportation industries, which operations. with a negative impact on the sensitive to market prices of iron are significant markets for global steel industry. Decreased ore both as a manufacturer of steel ArcelorMittal’s products. In the The prices of steel, iron ore, coking growth rates and hence demand (of which iron ore is a principal past, substantial price decreases coal, coke and scrap are highly 208 Risk factors

volatile. For example, iron ore been impacted by lower domestic or negotiated price adjustments many steel producers (including spot prices fluctuated between a demand as well as extremely low and as a steel producer sells ArcelorMittal) in particular, peak of $160 per tonne (Platts price spreads from China. a substantial part of its steel recording sharply reduced revenues index, CFR China, 62% Fe) in products at spot prices, it faces and operating losses. Economic mid-February to $110 per tonne As a producer and seller of steel, the risk of adverse differentials growth (and hence steel and at the end of May in 2013, while the Company is directly exposed between its own production costs, minerals demand) trends have culminating in a historical low of to fluctuations in the market which are affected by global raw varied across such markets since $44.50 per tonne in early July price for iron ore and steel and materials and scrap prices, on the such period. 2015 then recovered $59.25 other raw materials, energy and one hand, and trends for steel per tonne at the beginning transportation. In particular, steel prices in regional markets, on the Most recently (i.e., in 2015), of September 2015, before production consumes substantial other hand. demand contracted in all major demonstrating further volatility and amounts of raw materials including markets except Europe. While surpassing the historical low at the iron ore, coking coal and coke, and Another area of exposure to growth in Europe has remained end of December 2015 at $38.50 the production of direct reduced price volatility is energy and sluggish, demand nevertheless per tonne. Steel prices similarly iron, the production of steel in transportation. Freight costs improved as the steel consuming demonstrated significant volatility electric arc furnaces (“EAFs”) and (i.e., shipping) are a substantial sectors gradually improved. Europe in 2013, ranging from a high of the re-heating of steel involve component of ArcelorMittal’s cost is a major market for ArcelorMittal, $690 per tonne to a low of $586 the use of significant amounts of of goods sold. Freight costs were whose results have suffered in per tonne (SteelFirst, EU domestic energy, making steel companies particularly low in the second half prior years from recession and HRC ex-works Northern Europe). dependent on the price of and their of 2015 due, among other things, stagnation in Europe. China saw In the first half of 2014, steel reliable access to supplies of raw to depressed oil prices and demand. domestic real steel demand decline prices increased steadily, continuing materials and energy. Although If freight costs were to increase year-on-year in 2015 due to the an upward trend beginning mid- ArcelorMittal has substantial before iron ore or steel prices, this weakness of the real estate sector 2013. However, the second half sources of iron ore and coal from would directly and mechanically and overall slowdown in growth. of 2014 and the full year 2015 its own mines and strategic long- weigh on ArcelorMittal’s In the United States, apparent saw substantial decreases in steel term contracts (the Company’s profitability (although it would demand for steel also declined in prices, which dropped to $353 self-sufficiency rates were 62% make imports less competitive). 2015 despite improved economic per tonne at the end of 2015, for iron ore and 15% for pulverized conditions, due to a reversal of the exceeding the historical lows, see coal injection (“PCI”) and coal in ArcelorMittal’s business inventory cycle itself, driven by the “—Steel prices”. Such volatility 2015, assuming full shipments of and results are substantially abnormally high level of imports may be affected by, among other iron ore and coal from its mines for affected by regional and global in 2014, which rose 38% year- things: industry structural factors own use), it nevertheless remains macroeconomic conditions. on-year to more than 40 million (including the oligopolistic nature exposed to volatility in the supply Recessions or prolonged periods tonnes. Moreover, steel demand of the sea-borne iron ore industry and price of iron ore, coking coal of weak growth in the global declined in some other traditional and the fragmented nature of the and coke given that it obtains a economy or the economies net exporting regions in 2015, steel industry); trends in demand significant portion of such raw of ArcelorMittal’s key selling notably CIS and Japan, which has for iron ore in the steel industry materials under supply contracts markets have in the past had put added pressure on international itself, and particularly from Chinese from third parties. and in the future would be export markets. Demand in Russia steel producers (as the largest likely to have a material adverse has been driven down by the group of producers); massive Furthermore, while steel and effect on the mining and steel recession that began in mid- stocking and destocking activities iron ore price trends have industries and on ArcelorMittal’s 2014 and accelerated in 2015. (sudden drops in prices can lead historically been correlated, a business, results of operations Recession has also driven down end-users to delay orders pushing lack of correlation or an abnormal and financial condition. demand in Brazil, where the poor prices down further, as occurred lag in the corollary relationship economic conditions resulted in in 2015); new laws or regulations; between raw material and steel The mining and steel industries contraction of the steel consuming changes in the supply of iron ore, in prices may also occur and result have historically been highly volatile sectors. The South African market particular due to new mines coming in a “price-cost squeeze” in the largely due to the cyclical nature has also remained extremely into operation; business continuity steel industry. ArcelorMittal has of the business sectors that are difficult, with low local demand of suppliers; changes in pricing experienced price-cost squeezes the principal consumers of steel and increased cheap imports. In models or contract arrangements; at various points in recent years as described above. Demand Ukraine, economic conditions are expansion projects of suppliers; and may continue to do so. In for minerals, metals and steel also extremely difficult, with GDP worldwide production, including some of ArcelorMittal’s segments, products thus generally correlates shrinking by 12% in 2015, and high interruptions thereof by suppliers; in particular Europe and NAFTA, to macroeconomic fluctuations inflation. capacity-utilization rates; accidents there are several months between in the global economy. This or other similar events at suppliers’ raw material purchases and sales correlation and the adverse effect A failure of the recovery in Europe premises or along the supply chain; of steel products incorporating of macroeconomic downturns to pick up speed, a continued wars, natural disasters, political those materials, rendering on metal mining companies and slowdown in Chinese steel and disruption and other similar events; them particularly susceptible steel producers were evidenced iron ore demand, a slowdown fluctuations in exchange rates; the to price-cost squeeze. Because in the 2008/2009 financial and in U.S. growth or a continued bargaining power of raw material ArcelorMittal sources a substantial subsequent economic crisis. slowdown or protracted recession suppliers and the availability and portion of its raw materials through The results of both mining in emerging economies would cost of transportation. In addition, long-term contracts with quarterly companies and steel producers likely result in continued and recent steel price volatility has (or more frequent) formula-based were substantially affected, with prolonged subdued demand for Risk factors 209

(and hence the price of) steel and demand for ArcelorMittal products. products and thereby reduce and or criminal penalties being iron ore. These developments ArcelorMittal’s cash flows and imposed, the suspension of would have a material adverse Instances of such perceived profitability. permits, requirements to curtail effect on ArcelorMittal’s results of dumping have been especially or suspend operations and operations and financial condition. acute in recent years, leading In many applications, steel lawsuits by third parties. Despite steelmakers in various markets, competes with other materials ArcelorMittal’s efforts to comply Developments in the competitive including the U.S., Europe and that may be used as substitutes, with environmental laws and environment in the steel industry South Africa, to seek the imposition such as aluminum (particularly regulations, environmental could have an adverse effect of anti-dumping measures. It in the automobile industry), incidents or accidents may on ArcelorMittal’s competitive remains unclear how policymakers cement, composites, glass, plastic occur that negatively affect the position and hence its business, in the relevant markets will and wood. In particular, as a Company’s reputation or the financial condition, results of respond, but even if anti-dumping result of increasingly stringent operations of key facilities. operations or prospects. measures are applied to such regulatory requirements, as well imported material, steelmakers as developments in alternative ArcelorMittal also incurs costs The markets in which steel may be slow to realize the benefits materials, designers, engineers and and liabilities associated with the companies operate are highly of such legislation, and the impact industrial manufacturers, especially assessment and remediation of competitive. Competition in the on steel prices may be less than those in the automotive industry, contaminated sites. In addition to form of established producers originally estimated. are increasing their use of lighter the impact on current facilities expanding in new markets, smaller weight and alternative materials, and operations, environmental producers increasing production Against this backdrop of rising such as aluminum, composites, remediation obligations can give in anticipation of demand dumping and other unfair trade and plastics and carbon fiber in rise to substantial liabilities in increases or amid recoveries, pricing pressures, China is currently their products. Loss of market respect of divested assets and or exporters selling excess lobbying members of the World share to substitute materials, past activities. This may also be capacity from markets such as Trade Organization (“WTO”) to gain increased government regulatory the case for acquisitions when China—could cause ArcelorMittal “Market Economy Status” (“MES”) initiatives favoring the use of liabilities for past acts or omissions to lose market share, increase by the end of 2016. If China were alternative materials, as well as the are not adequately reflected in the expenditures or reduce pricing. to be granted MES, such label could development of additional new terms and price of the acquisition. Any of these developments could result in considerable reduction substitutes for steel products could ArcelorMittal could become subject have a material adverse effect on in the anti-dumping duty levels significantly reduce market prices to further remediation obligations its business, financial condition, against China and in many cases and demand for steel products and in the future, as additional results of operations or prospects. preventing any duties at all. Such thereby reduce ArcelorMittal’s cash contamination is discovered or a development could exacerbate flows and profitability. cleanup standards become more Unfair trade practices in many of the negative externalities stringent. ArcelorMittal’s home markets currently caused by China, including ArcelorMittal is subject to could negatively affect steel China’s already massive export strict environmental laws and Costs and liabilities associated with prices and reduce ArcelorMittal’s increases (Chinese steel exports to regulations that could give rise mining activities include those profitability, while trade the EU increased from 1.2 million to a significant increase in costs resulting from tailings and sludge restrictions could limit tonnes in 2009 to 4.5 million and liabilities. disposal, effluent management, ArcelorMittal’s access to key tonnes in 2014) and Chinese and rehabilitation of land export markets. overcapacity. No uniform position ArcelorMittal is subject to a broad disturbed during mining processes. has been issued by WTO members range of environmental laws ArcelorMittal could become ArcelorMittal is exposed to the to date and no assurance can be and regulations in each of the subject to unidentified liabilities effects of “dumping” and other given that China will not be granted jurisdictions in which it operates. in the future, such as those unfair trade and pricing practices MES. These laws and regulations relating to uncontrolled tailings by competitors. Moreover, impose increasingly stringent breaches or other future events government subsidization of the Conversely, ArcelorMittal has environmental protection or to underestimated emissions of steel industry remains widespread significant exposure to the effects standards regarding, among polluting substances. For example, in certain countries, particularly of trade sanctions and barriers others, air emissions, wastewater the failure of a tailings ponds dam those with centrally-controlled due to the global nature of its storage, treatment and discharges, at ArcelorMittal’s mines could economies such as China. In operations. Various countries the use and handling of hazardous cause significant damage, including periods of lower global demand have in the past instituted trade or toxic materials, waste disposal death, injury and environmental for steel, there is an increased sanctions and barriers and the practices and the remediation of harm. While the Company carries risk that such competitors will try recurrence of such measures, environmental contamination. out assessments of its facilities, it to compensate with increased or the imposition of the above- The costs of complying with, cannot guarantee that failures or volumes of unfairly-traded steel mentioned anti-dumping and the imposition of liabilities breaches of a tailings ponds dam exports into various markets, legislation, could materially and pursuant to, environmental laws will not occur in the future. including North America and adversely affect ArcelorMittal’s and regulations can be significant, Europe and other markets such as business by limiting the Company’s and compliance with new and ArcelorMittal’s operations may be South Africa, in which ArcelorMittal access to steel markets. more stringent obligations located in areas where individuals produces and sells its products. may require additional capital or communities may regard its Such imports have had and could Competition from other expenditures or modifications activities as having a detrimental in the future have the effect materials could reduce market in operating practices. Failure effect on their natural environment of further reducing prices and prices and demand for steel to comply can result in civil and conditions of life. Any actions 210 Risk factors

taken by such individuals or 2015, the 195 countries of the difference between the which could have significant communities in response to such participating in the United National requirements in developed regions adverse consequences for the concerns could compromise Framework Convention on Climate (such as Europe) and developing Company’s workers and facilities, ArcelorMittal’s profitability or, in Change reached an international regions (such as China or the CIS), as well as the environment. Such extreme cases, the viability of an agreement, the Paris Agreement. this competitive disadvantage accidents could lead to production operation or the development of The 21st Conference of the Parties could be severe and render stoppages, loss of key personnel, new activities in the relevant region meeting (“COP21”) has confirmed production in the developed region the loss of key assets, or put at or country. the risk of climate change and structurally unprofitable. risk employees (and those of the urgent need to address it. sub-contractors and suppliers) or See note 8.2 to ArcelorMittal’s The Paris Agreement aims to See note 8.2 to ArcelorMittal’s persons living near affected sites. consolidated financial statements. implement the necessary drivers consolidated financial statements. to achieve drastic reductions of See note 8.2 to ArcelorMittal’s Laws and regulations restricting carbon emissions. The Company ArcelorMittal is subject to consolidated financial statements. emissions of greenhouse gases takes this message seriously and stringent health and safety laws could force ArcelorMittal to incur investigates its possibilities to and regulations that give rise to Risks Related to ArcelorMittal increased capital and operating contribute to this by developing significant costs and could give costs and could have a material research and development rise to significant liabilities. ArcelorMittal has a substantial adverse effect on ArcelorMittal’s programs, investigating its amount of indebtedness, which results of operations and technical possibilities to reduce ArcelorMittal is subject to a broad could make it more difficult financial condition. emissions and following the range of health and safety laws or expensive to refinance its state of knowledge on climate and regulations in each of the maturing debt, incur new debt Compliance with new and change closely. Such obligations, jurisdictions in which it operates. and/or flexibly manage its more stringent environmental whether in the form of a national These laws and regulations, as business. obligations relating to greenhouse or international cap-and-trade interpreted by relevant agencies gas emissions may require emissions permit system, a and the courts, impose increasingly As of December 31, 2015, additional capital expenditures carbon tax, emissions controls, stringent health and safety ArcelorMittal had total debt or modifications in operating reporting requirements, or other protection standards. The costs of outstanding of $19.8 billion, practices, as well as additional regulatory initiatives, could have a complying with, and the imposition including $2.3 billion of short-term reporting obligations. The negative effect on ArcelorMittal’s of liabilities pursuant to, health and indebtedness (including payables integrated steel process involves production levels, income and safety laws and regulations could to banks and the current portion of carbon and creates carbon dioxide cash flows. Such regulations be significant, and failure to comply long-term debt) and $17.5 billion (“CO2”), which distinguishes could also have a negative effect could result in the assessment of long-term indebtedness. As of integrated steel producers on the Company’s suppliers and of civil and criminal penalties, December 31, 2015, ArcelorMittal from mini-mills and many other customers, which could result the suspension of permits or had $4.1 billion of cash and cash industries where CO2 generation is in higher costs and lower sales. operations, and lawsuits by third equivalents, including restricted primarily linked to energy use. Moreover, the EU Commission’s parties. In addition, under certain cash, and $6.0 billion available to decision to further reduce the circumstances authorities could be drawn under existing credit The EU has established greenhouse allocation of CO2 emission rights require ArcelorMittal facilities to facilities. As of December 31, gas regulations and is revising its to companies which is currently at curtail or suspend operations based 2015, the maturity schedule of emission trading system for the the edge of covering technically on health and safety concerns. outstanding debt was as follows: period after 2020 in a manner achievable operating conditions, in 2016 ($2.3 billion), 2017 ($2.7 that may require ArcelorMittal could negatively impact the global Despite ArcelorMittal’s efforts billion), 2018 ($2.6 billion), to incur additional costs to industry. to monitor and reduce accidents 2019 ($2.5 billion) and 2020 acquire emissions allowances. at its facilities, health and safety ($2.5 billion). See “Liquidity and In Kazakhstan the government Furthermore, many developing incidents do occur, some of capital resources”. The Company has installed a domestic trading nations have not yet instituted which may result in costs and also relies on its true sale of system which currently is in a significant greenhouse gas liabilities and negatively impact receivables programs (for an pilot phase but would be similar regulations, and the Paris ArcelorMittal’s reputation or the aggregate program amount (i.e., to the EU system. South Africa Agreement specifically recognized operations of the affected facility. the maximum amount of unpaid envisages to start with a CO2 tax that peaking of greenhouse Such accidents could include receivables that may be sold and system in 2017. The United States gas emissions will occur later explosions or gas leaks, fires or outstanding at any given time) required reporting of greenhouse in developing countries. As the collapses in underground mining of $5.3 billion as of December 31, gas emissions from certain large Paris Agreement recognizes operations, vehicular accidents, 2015), as a way to manage its long sources beginning in 2011 and has that the Intended Nationally and other accidents involving cycle working capital. begun adopting and implementing Determined Contributions mobile equipment, or exposure ArcelorMittal’s gearing (long-term regulations to restrict emissions of (“INDC”) for developing nations to radioactive or other potentially debt, plus short-term debt, less greenhouse gases under existing may be less stringent in light of hazardous materials. Some of cash and cash equivalents and provisions of the Clean Air Act. different national circumstances, ArcelorMittal’s industrial activities restricted cash, divided by total ArcelorMittal may be at a involve the use, storage and equity), was 57% at December Further measures, in the EU, the competitive disadvantage relative transport of dangerous chemicals 31, 2015 (compared to 35% at United States, and many other to steelmakers having more or and toxic substances, and December 31, 2014). This high countries, may be enacted in the all of their production in such ArcelorMittal is therefore subject level is at risk of further increase future. In particular, in December countries. Depending on the extent to the risk of industrial accidents should market conditions Risk factors 211

further deteriorate. In addition, Moreover, ArcelorMittal could, credit rating of ArcelorMittal, it comply with any covenant ArcelorMittal’s gearing would in order to increase its financial lowered its outlook to negative. would enable the lenders increase should the Company flexibility and strengthen its The margin under ArcelorMittal’s to accelerate ArcelorMittal’s record an impairment charge for balance sheet, implement capital principal credit facilities and certain repayment obligations. Moreover, any of its tangible or intangible raising measures such as equity of its outstanding bonds is subject ArcelorMittal’s debt facilities have assets, such as property, plant offerings (as was done in May 2009, to adjustment in the event of a provisions whereby certain events and equipment, goodwill or January 2013 and announced on change in its long-term credit relating to other borrowers within deferred tax assets (see “Changes February 5, 2016 in the form of a ratings, and the 2012 and February the ArcelorMittal group could, in assumptions underlying the $3.0 billion rights offering), which 2015 downgrades resulted in under certain circumstances, carrying value of certain assets, could (depending on how they are increased interest expense in 2015. lead to acceleration of debt including as a result of adverse structured) dilute the interests of The November 2015 downgrade repayment under the credit market conditions, could result existing shareholders or require will similarly result in increased facilities. Any invocation of these in the impairment of such assets, them to invest further funds to interest expense. See “—Liquidity cross-acceleration clauses could including intangible assets such avoid such dilution. In addition, and capital resources”. Any further cause some or all of the other debt as goodwill” below); ArcelorMittal ArcelorMittal has undertaken downgrades in ArcelorMittal’s credit to accelerate, creating liquidity recorded substantial impairments and may undertake further asset ratings would result in a further pressures. In addition, the mere in this respect in 2012 and 2015. disposals in order to reduce debt. increase in its cost of borrowing market perception of a potential This could affect ArcelorMittal’s These asset disposals are subject and could significantly harm its breach of any financial covenant ability to, and the conditions under to execution risk and may fail to financial condition and results could have a negative impact on which it might, access financial materialize, and the proceeds of operations as well as hinder ArcelorMittal’s ability to refinance markets to refinance maturing debt received from such disposals may its ability to refinance its existing its indebtedness on acceptable on acceptable terms. ArcelorMittal’s not reflect values that management indebtedness on acceptable terms. conditions. access to financial markets for believes are achievable and/or refinancing also depends on the cause substantial accounting losses ArcelorMittal’s principal credit Furthermore, some of conditions in the global capital and (particularly if the disposals are facilities contain restrictive ArcelorMittal’s debt is subject credit markets, which are volatile. done in difficult market conditions). covenants. These covenants to floating rates of interest and For example, during the 2008/2009 In addition, to the extent that limit, inter alia, encumbrances thereby exposes ArcelorMittal to financial and economic crisis and the asset disposals include the on the assets of ArcelorMittal interest rate risk (i.e., if interest rates again at the height of the eurozone sale of all or part of core assets and its subsidiaries, the ability rise, ArcelorMittal’s debt service sovereign debt crisis in 2012, (including through an increase of ArcelorMittal’s subsidiaries obligations on its floating rate access to the financial markets was in the share of non-controlling to incur debt and the ability of indebtedness would increase). restricted for many companies. interests, such as the ArcelorMittal ArcelorMittal and its subsidiaries Depending on market conditions, Various macroeconomic and Mines Canada transaction in 2013), to dispose of assets in certain ArcelorMittal from time to time market factors could cause similar this could reduce ArcelorMittal’s circumstances. ArcelorMittal’s uses interest-rate swaps or other credit contractions at any time. consolidated cash flows and/or the principal credit facilities also financial instruments to hedge a Under such circumstances, the economic interest of ArcelorMittal include the following financial portion of its interest rate exposure Company could experience shareholders in such assets, which covenant: ArcelorMittal must either from fixed to floating or from difficulties in accessing the financial may be cash-generative and ensure that the “Leverage Ratio”, floating to fixed. After taking into markets on acceptable terms or profitable ones. being the ratio of “Consolidated account interest-rate derivative at all. Total Net Borrowings” (consolidated financial instruments, ArcelorMittal In addition, credit rating agencies total borrowings less consolidated had exposure to 91% of its debt ArcelorMittal’s high level of could downgrade ArcelorMittal’s cash and cash equivalents) to at fixed interest rates and 9% at debt outstanding could have ratings either due to factors specific “Consolidated EBITDA” (the floating rates as of December 31, adverse consequences more to ArcelorMittal, a prolonged consolidated net pre-taxation 2015. generally, including impairing cyclical downturn in the steel profits of the ArcelorMittal group Finally, ArcelorMittal has foreign its ability to obtain additional industry and mining industries, for a Measurement Period, subject exchange exposure in relation financing for working capital, macroeconomic trends (such as to certain adjustments as defined to its debt, approximately 34% capital expenditures, acquisitions, global or regional recessions) or in the facilities), at the end of each of which is denominated in general corporate purposes or trends in credit and capital markets “Measurement Period” (each period euros as of December 31, 2015, other purposes, and limiting its more generally. In this respect, of 12 months ending on the last while its financial statements are flexibility to adjust to changing Standard & Poor’s, Moody’s and day of a financial half-year or a denominated in U.S. dollars. This market conditions or withstand Fitch downgraded the Company’s financial year of ArcelorMittal), creates balance sheet exposure, competitive pressures, resulting in rating to below “investment is not greater than a ratio of 4.25 with a depreciation of the U.S. greater vulnerability to a downturn grade” in August, November and to one or 4.0 to 1 for one credit dollar against the euro leading in general economic conditions. December 2012. On February 3, facility (See “—Liquidity and to an increase in debt (including While ArcelorMittal is targeting 2015, Standard & Poor’s further capital resources”). As of December for covenant compliance a further reduction in “net debt” downgraded ArcelorMittal’s credit 31, 2015, the Company was in measurement purposes). (i.e., long-term debt net of current rating and, on December 18, 2015, compliance with the Leverage portion plus payables to banks and it placed ArcelorMittal on negative Ratios. See “Liquidity and capital current portion of long-term debt, outlook. On November 12, 2015, resources”. less cash and cash equivalents, Moody’s further downgraded These restrictive and financial restricted cash and short-term ArcelorMittal and placed it on covenants could limit investments), there is no assurance negative outlook. On November ArcelorMittal’s operating and that it will succeed. 16, 2015, while Fitch affirmed its financial flexibility. Failure to 212 Risk factors

ArcelorMittal’s level of ArcelorMittal, some or all of which particular, a prolonged period of profitability and cash flow • flooding of the open pit; may not be covered by insurance, low prices or other indicators could currently is and, depending as well as substantially harm lead to a review of the Group’s on market and operating • collapse of the open-pit wall; ArcelorMittal’s reputation, both as reserves. Such review would conditions, may in the future a company focused on ensuring the reflect the Company’s view based be, substantially affected by • accidents associated with the health and safety of its employees on estimates, assumptions and its ability to reduce costs and operation of large open-pit and more generally. judgments and could result in a improve operating efficiency. mining and rock transportation reduction in the Group’s reported equipment; ArcelorMittal’s reserve estimates reserves. The Group’s reserve Difficult operating conditions in may materially differ from estimates reported in this annual recent years, due in particular • accidents associated with the mineral quantities that it may report do not exceed the quantities to macroeconomic conditions preparation and ignition of be able to actually recover; that the Company estimates and supply/demand trends, have large-scale open-pit blasting ArcelorMittal’s estimates of could be extracted economically reduced ArcelorMittal’s operating operations; mine life may prove inaccurate; if future prices were at similar profitability, decreased its positive and market price fluctuations levels to the average contracted cash flows and reduced its • production disruptions due to and changes in operating and price for the three years ended to profitability. The steel industry weather; capital costs may render certain December 31, 2015. As a result, has historically been cyclical, ore reserves uneconomical to if the average contracted prices periodically experiencing difficult • hazards associated with the mine. remain in 2016 at, near or below operating conditions. In light of disposal of mineralized waste the low levels in the fourth quarter this, ArcelorMittal has historically, water, such as groundwater and ArcelorMittal’s reported reserves of 2015, the Company’s estimates and increasingly in recent periods, waterway contamination; and are estimated quantities of the ore of its reserves at year-end 2016 taken initiatives to reduce its and metallurgical coal that it has may decline. costs and increase its operating • collapse of tailings ponds dams or determined can be economically efficiency. These initiatives have dams. mined and processed under Drilling and production risks included various asset optimization present and anticipated conditions could adversely affect the and other programs throughout Hazards associated with to extract their mineral content. mining process. the Company. The most recent underground mining operations, There are numerous uncertainties of these programs is the Action of which ArcelorMittal has several, inherent in estimating quantities of Substantial time and expenditures 2020 plan announced on include, among others: reserves and in projecting potential are required to: February 5, 2016 that includes, future rates of mineral production, among other aspects, several • underground fires and explosions, including factors beyond • establish mineral reserves through efficiency improvement initiatives. including those caused by ArcelorMittal’s control. The process drilling; Implementation of cost saving flammable gas; of estimating reserves involves and efficiency improvement estimating deposits of minerals • determine appropriate mining initiatives is subject to operational • gas and coal outbursts; that cannot be measured in an and metallurgical processes for challenges and limitations. Failure exact manner, and the accuracy optimizing the recovery of metal to implement fully such initiatives • cave-ins or falls of ground; of any reserve estimate is a contained in ore and coal; would prevent the attainment of function of the quality of available announced profitability or cash flow • discharges of gases and toxic data, engineering and geological • obtain environmental and other improvement targets, and more chemicals; interpretation and judgment. As a licenses; generally could have a material result, no assurance can be given adverse effect on the Company’s • flooding; that the estimated amounts of ore • construct mining and processing profitability and cash flow. or coal will be recovered or that it facilities and the infrastructure • sinkhole formation and ground will be recovered at the anticipated required for greenfield properties; ArcelorMittal’s mining operations subsidence; rates. Estimates may vary, and are subject to risks associated results of mining and production • obtain the ore or coal or extract with mining activities. • difficulties associated with subsequent to the date of an the minerals from the ore; and mining in extreme weather estimate may lead to revisions of ArcelorMittal operates mines and conditions, such as the Arctic; estimates. Reserve estimates and • maintain the appropriate blend has substantially increased the and estimates of mine life may require of ore to ensure the final product scope of its mining activities in revisions based on actual market grades expected by the customer recent years. Mining operations • blasting, removing, and conditions, production experience are achieved. are subject to the hazards and processing material from an and other factors. Fluctuations in risks usually associated with the underground mine. the market prices of minerals and If a project proves not to be exploration, development and metals, reduced recovery rates or economically feasible by the production of natural resources, ArcelorMittal is exposed to all of increased operating and capital time ArcelorMittal is able to any of which could result in these hazards. The occurrence costs due to inflation, exchange exploit it, ArcelorMittal may incur production shortfalls or damage to of any of the events listed above rates, mining duties or other substantial losses and be obliged to persons or property. In particular, could delay production, increase factors may render proven and recognize impairments. In addition, the hazards associated with open- production costs and result in probable reserves uneconomic potential changes or complications pit mining operations include, death or injury to persons, damage to exploit and may ultimately involving metallurgical and other among others: to property and liability for result in a revision of reserves. In technological processes that arise Risk factors 213

during the life of a project may While the Company’s current and associates may be controlled A Mittal family trust has the ability result in delays and cost overruns strategy is focused on cost and managed by joint venture or to exercise significant influence that may render the project not improvement, non-core asset controlling partners that may not over the outcome of shareholder economically feasible. disposals and asset optimization, fully comply with ArcelorMittal’s votes. the Company had previously standards, controls and procedures, ArcelorMittal faces rising announced a number of envisaged including ArcelorMittal’s health, As of December 31, 2015, a extraction costs over time as greenfield or brownfield safety, environment and trust (HSBC Trust (C.I.) Limited, reserves deplete. development projects, particularly community standards, which could as trustee), of which Mr. Lakshmi in the mining sector, some of lead to higher costs, reduced N. Mittal, Mrs. Usha Mittal and Reserves are gradually depleted which are or may be ongoing. production or environmental, their children are the beneficiaries, in the ordinary course of a given To the extent these projects health and safety incidents or beneficially owned (within the mining operation. As mining go forward, they would entail accidents, which could adversely meaning of Rule 13d-3 under progresses, distances to the substantial capital expenditures, affect ArcelorMittal’s results and the Securities Exchange Act primary crusher and to waste and their timely completion reputation. of 1934, as amended) shares deposits become longer, pits and successful operation may amounting (when aggregated with become steeper and underground be affected by factors beyond In addition, certain of these joint ordinary shares of ArcelorMittal operations become deeper. As the control of ArcelorMittal. ventures and associates are and options to acquire ordinary a result, ArcelorMittal usually These factors include receiving currently experiencing, or may shares held directly by Mr. and experiences rising unit extraction financing on reasonable terms, in the future experience, difficult Mrs. Mittal) to 655,944,511 costs over time with respect to obtaining or renewing required operating conditions and/or shares, representing 39.39% of each of its mines. regulatory approvals and licenses, incur losses. Difficult operating ArcelorMittal’s outstanding shares securing and maintaining conditions in joint ventures and (37.41% as of January 15, 2016 ArcelorMittal has incurred and adequate property rights to associates in which ArcelorMittal following the conversion of the may incur in the future operating land and mineral resources, local has invested may expose it to loss mandatorily convertible notes). costs when production capacity opposition to land acquisition or of its investment, requirements See “—Major shareholders and is idled or increased costs to project development, managing for additional investments or calls related party transactions—Major resume production at idled relationships with or obtaining on guarantees. As of December shareholders”. As a result, the facilities. consents from other shareholders, 31, 2015, ArcelorMittal had given trust has the ability to significantly revision of economic viability $1.2 billion in guarantees on behalf influence the decisions adopted at ArcelorMittal’s decisions about projections, demand for the of associates and joint ventures. the ArcelorMittal general meetings which facilities to operate and at Company’s products, local See notes 2.4.1 and 2.4.2 to of shareholders, including matters which levels are made based upon environmental or health-related ArcelorMittal’s consolidated involving mergers or other business customers’ orders for products as conditions (such as the Ebola financial statements. combinations, the acquisition or well as the capabilities and cost epidemic in Liberia in 2014-2015), disposition of assets, issuances performance of the Company’s and general economic conditions. ArcelorMittal’s investments in of equity and the incurrence facilities. Considering temporary Any of these factors may cause joint ventures and associates may of indebtedness. The trust also or structural overcapacity in the Company to delay, modify also result in impairments. For has the ability to significantly the current market situation, or forego some or all aspects of example, in 2014, the Company influence a change of control of production operations are its development projects. The recorded an impairment charge ArcelorMittal. concentrated at several plant Company cannot guarantee of $621 million on its investment locations and certain facilities are that it will be able to execute in China Oriental, following a The loss or diminution of the idled in response to customer its greenfield or brownfield revision of business assumptions services of the Chairman of demand, although operating costs development projects, and to the in the context of the continuing the Board of Directors and are still incurred at such idled extent that they proceed, that it economic slowdown in China. In Chief Executive Officer of facilities. When idled facilities are will be able to complete them 2015, the Company also recorded ArcelorMittal could have an restarted, ArcelorMittal incurs on schedule, within budget, or an impairment charge of $283 adverse effect on its business costs to replenish raw material achieve an adequate return on its million in respect of its joint venture and prospects. inventories, prepare the previously investment. Conversely, should investment in Kalagadi Manganese idled facilities for operation, the Company decide to postpone (Propriety) Ltd, reflecting a write The Chairman of the Board of perform the required repair and or cancel development projects, down of the full carrying amount Directors and Chief Executive maintenance activities and prepare it could incur various negative of the investment and loans as a Officer of ArcelorMittal, Mr. employees to return to work consequences such as litigation or result of a downward revision of Lakshmi N. Mittal, has for over safely and resume production impairment charges. cash flow projections resulting 30 years contributed significantly responsibilities. Such costs could from the expectation of the to shaping and implementing the have an adverse effect on its ArcelorMittal faces risks persistence of a lower manganese business strategy of Mittal Steel results of operations or financial associated with its investments price outlook. As of December 31, and subsequently ArcelorMittal. His condition. in joint ventures and associates. 2015, ArcelorMittal’s investments strategic vision was instrumental accounted for under the equity in the creation of the world’s ArcelorMittal’s greenfield ArcelorMittal has investments method had a book value of $4.9 largest and most global steel and brownfield investment in various joint ventures and billion, including DHS Group ($992 group. The loss or any diminution projects are inherently subject associates. See note 2.4 to million), China Oriental ($604 of the services of the Chairman of to financing, execution and ArcelorMittal’s consolidated million) and Baffinland ($442 the Board of Directors and Chief completion risks. financial statements. Joint ventures million). Executive Officer could have an 214 Risk factors

adverse effect on ArcelorMittal’s of an outstanding intragroup loan whether there is any indication to ArcelorMittal’s consolidated business and prospects. of R3.2 billion and an additional that the carrying amount of those financial statements, in particular ArcelorMittal does not maintain cash injection of approximately assets may not be recoverable for a discussion of the assumptions key person life insurance on its R460 million. The intragroup loan through continuing use. If any such used for determining ACIS’s value Chairman of the Board of Directors is being repaid in two tranches; indication exists, the recoverable in use. and Chief Executive Officer. the first has been repaid and the amount of the asset (or cash second is expected to be paid in generating unit) is reviewed in ArcelorMittal’s ability to fully utilize ArcelorMittal is a holding 2016. As a result of the rights order to determine the amount of its recognized deferred tax assets company that depends on the issue, ArcelorMittal’s shareholding the impairment, if any. depends on its profitability and earnings and cash flows of its in ArcelorMittal South Africa future cash flows. operating subsidiaries, which increased from 52% to 71%. Other If certain of management’s may not be sufficient to meet Group subsidiaries are experiencing estimates change during a given At December 31, 2015, future operational needs or for losses and receiving intragroup period, such as the discount rate, ArcelorMittal had $6.6 billion shareholder distributions and financing. capital expenditures, expected recorded as deferred tax assets loss-making subsidiaries may changes to average selling prices, on its consolidated statements drain cash flow necessary for Repatriation of funds from growth rates, shipments and of financial position. These assets such needs or distributions. operating subsidiaries may also direct costs, the estimate of the can be utilized only if, and only be affected by tax and foreign recoverable amount of goodwill to the extent that, ArcelorMittal’s As a holding company, exchange policies in place from or the asset could fall significantly operating subsidiaries generate ArcelorMittal is dependent on the time to time in the various and result in impairment. While adequate levels of taxable income earnings and cash flows of, and countries where the Company impairment does not affect in future periods to offset the tax dividends and distributions from, operates, though none of these reported cash flows, the decrease loss carry forwards and reverse its operating subsidiaries to pay policies are currently significant of the estimated recoverable the temporary differences prior expenses, meet its debt service in the context of ArcelorMittal’s amount and the related non- to expiration. At December 31, obligations, pay any cash dividends overall liquidity. Under the laws cash charge in the consolidated 2015, the amount of future income or distributions on its ordinary of Luxembourg, ArcelorMittal statements of operations could required to recover ArcelorMittal’s shares or conduct share buy-backs. will be able to pay dividends or have a material adverse effect deferred tax assets of $6.6 billion Significant cash or cash equivalent distributions only to the extent on ArcelorMittal’s results of was at least $24.5 billion at certain balances may be held from time to that it is entitled to receive cash operations. For example, in operating subsidiaries. time at the Company’s international dividend distributions from its 2015, the Company recorded an ArcelorMittal’s ability to generate operating subsidiaries, including in subsidiaries, recognize gains from impairment charge as a result of taxable income is subject to general particular those in France and the the sale of its assets or record the annual impairment test of $3.7 economic, financial, competitive, United States, where the Company share premium from the issuance billion including $0.9 billion with legislative, regulatory and other maintains cash management of shares. respect to the Mining segment factors that are beyond its control. systems under which most of goodwill and $2.8 billion related to If ArcelorMittal generates lower its cash and cash equivalents are If the earnings and cash flows tangible and intangible assets ($2.5 taxable income than the amount centralized, and in Argentina, Brazil, of its operating subsidiaries are billion and $0.3 billion in the Mining it has assumed in determining Canada, Morocco, South Africa, substantially reduced, ArcelorMittal and ACIS segments, respectively). its deferred tax assets, then the Ukraine and Venezuela. Some may not be in a position to meet Following these impairment value of deferred tax assets will be of these operating subsidiaries its operational needs or to make charges, substantial amounts of reduced. In addition, assumptions have debt outstanding or are shareholder distributions in line goodwill, tangible and intangible regarding the future recoverability subject to acquisition agreements with announced proposals. assets remain recorded on its of deferred tax assets depend on that impose restrictions on such balance sheet (there was $5.1 management’s estimates of future operating subsidiaries’ ability to Changes in assumptions billion of goodwill for the Company, taxable income in accordance pay dividends, but such restrictions underlying the carrying value of $3.5 billion tangible and intangible with the tax laws applicable to are not significant in the context certain assets, including as a result assets for the Mining segment ArcelorMittal’s subsidiaries in the of ArcelorMittal’s overall liquidity. of adverse market conditions, and $4.4 billion of tangible and countries in which they operate. These subsidiaries may also could result in the impairment of intangible assets for ACIS on the If in the course of its assessments experience operating difficulties such assets, including intangible balance sheet at December 31, management determines that that impact their cash flows. assets such as goodwill. 2015). No assurance can be given the carrying amount of any of ArcelorMittal South Africa, for as to the absence of significant its deferred tax assets may not example, has been experiencing At each reporting date, in further impairment losses in be recoverable pursuant to such significant difficulties in recent accordance with the Company’s future periods, particularly if prevailing tax laws, the recoverable years. In order to decrease its accounting policy described market conditions (such as the amount of such deferred tax assets significant outstanding debt, on in note 5.3 to ArcelorMittal’s iron ore price trend for Mining) may be impaired. Furthermore, January 15, 2016, ArcelorMittal consolidated financial statements, deteriorate further than expected. changes in tax law may result South Africa closed a rights ArcelorMittal reviews the carrying In particular, management believes in a reduction in the value of offering. The total cash proceeds amounts of its tangible and that reasonably possible changes deferred tax assets. ArcelorMittal’s amounted to R4.5 billion. intangible assets (goodwill is in the key assumptions utilized in assumptions regarding its ability ArcelorMittal underwrote the reviewed annually or whenever the October 31, 2015 impairment to generate future taxable income rights offering in its entirety. The changes in circumstances indicate test would cause an additional changed during 2015, resulting in Company fully subscribed to the that the carrying amount may impairment loss to be recognized a derecognition of $0.4 billion of capital increase, through repayment not be recoverable) to determine in respect of ACIS. See note 5.3 deferred tax assets. Risk factors 215

The Company’s investment government regulation. Because and work stoppages is particularly will continue, but this cannot projects may add to its financing of the large number of variables acute during collective bargaining be guaranteed. Any slowdown requirements and adversely that determine pension funding agreement negotiations. For in the development of these affect its cash flows and results of requirements, which are difficult to example, ArcelorMittal is currently economies could have a material operations. predict, as well as any legislative negotiating the renewal of the adverse effect on ArcelorMittal’s action, future cash funding collective bargaining agreement business, financial condition, The steelmaking and mining requirements for ArcelorMittal’s applicable to its U.S. employees. results of operations or prospects, businesses are capital intensive pension plans and other post- as could insufficient investment requiring substantial ongoing employment benefit plans could Faced with temporary or structural by government agencies or maintenance capital expenditure. be significantly higher than overcapacity in various markets, the private sector in physical In addition, ArcelorMittal has current estimates. The general life particularly developed ones, infrastructure. For example, the announced investment projects expectancy assumption has been ArcelorMittal has in the past failure of a country to develop in the past and some are or increasing over the past years sought and may in the future reliable electricity and natural gas may be ongoing. See note 8.3 and has been driving consistent seek to rationalize operations supplies and networks, and any to ArcelorMittal’s consolidated increases in the defined benefit through temporary or permanent resulting shortages or rationing, financial statements. ArcelorMittal obligation. ArcelorMittal also idlings and/or closures of plants. could lead to disruptions in expects to fund these capital makes contributions to a multi- These initiatives have in the ArcelorMittal’s production. expenditures primarily through employer pension plan in the past and may in the future lead internal sources. Such sources may U.S. for which it is one of the to protracted labor disputes Moreover, some of the countries not suffice, however, depending on largest employers. If the other and political controversy. For in which ArcelorMittal operates the amount of internally generated contributors were to default on example, in 2012, the announced have been undergoing substantial cash flows and other uses of cash. their obligations, ArcelorMittal closure of the liquid phase of political transformations from If such sources prove insufficient, would become liable for the plan. ArcelorMittal’s plant in Florange, centrally-controlled command ArcelorMittal may need to choose In these circumstances, funding France attracted substantial media economies to market-oriented between incurring external requirements could have a material and political attention – even at systems or from authoritarian financing, further increasing the adverse effect on ArcelorMittal’s one stage involving the threat regimes to democratically-elected Company’s level of indebtedness, business, financial condition, results of nationalization – and the governments and vice-versa. or foregoing investments in of operations or prospects. resolution was negotiated with Political, economic and legal projects targeted for profitable the government. Such situations reforms necessary to complete growth. ArcelorMittal could experience carry the risk of delaying or such transformation may not labor disputes that may increasing the cost of production progress sufficiently. On occasion, Underfunding of pension and disrupt its operations and its rationalization measures, harming ethnic, religious, historical and other post-retirement benefit relationships with its customers ArcelorMittal’s reputation and other divisions have given rise plans at some of ArcelorMittal’s and its ability to rationalize business standing in given markets to tensions and, in certain cases, operating subsidiaries could operations and reduce labor and even the risk of nationalization. wide-scale civil disturbances require the Company to make costs in certain markets may be and military conflict. The political substantial cash contributions limited in practice or encounter ArcelorMittal is subject to systems in these countries are to pension plans or to pay for implementation difficulties. economic policy, political, vulnerable to their populations’ employee healthcare, which may social and legal risks and dissatisfaction with their reduce the cash available for A majority of the employees of uncertainties in the emerging government, reforms or the lack ArcelorMittal’s business. ArcelorMittal and of its contractors markets in which it operates thereof, social and ethnic unrest are represented by labor unions or proposes to operate, and and changes in governmental ArcelorMittal’s principal operating and are covered by collective these uncertainties may have policies, any of which could have subsidiaries in Brazil, Canada, bargaining or similar agreements, a material adverse effect on a material adverse effect on Europe, South Africa and the United which are subject to periodic ArcelorMittal’s business, financial ArcelorMittal’s business, financial States provide defined benefit renegotiation. Strikes or work condition, results of operations condition, results of operations pension plans to their employees. stoppages could occur prior to, or or prospects. or prospects and its ability to Some of these plans are currently during, negotiations preceding continue to do business in these underfunded, see note 7.2 to new collective bargaining ArcelorMittal operates, or countries. For example, in Ukraine, ArcelorMittal’s consolidated agreements, during wage and proposes to operate, in a large a period of widespread civil unrest financial statements for the total benefits negotiations or during number of emerging markets. resulted in the removal of the value of the plan assets and any other periods for other reasons, In recent years, many of these President from office in February deficit. in particular in connection with countries have implemented 2014 and the establishment of any announced intentions to measures aimed at improving an interim government, which ArcelorMittal’s funding obligations close certain sites. ArcelorMittal the business environment and has been followed by ongoing depend upon future asset periodically experiences strikes providing a stable platform conflict in Crimea and the Donbass performance, which is tied to and work stoppages at various for economic development. region, with Russia purportedly equity and debt markets to a facilities. Prolonged strikes or work ArcelorMittal’s business strategy annexing Crimea in March 2014, substantial extent, the level of stoppages, which may increase has been developed partly a disputed referendum approving interest rates used to discount in their severity and frequency, on the assumption that this independence of Crimea from future liabilities, actuarial may have an adverse effect on the modernization, restructuring Ukraine in May 2014 and assumptions and experience, operations and financial results and upgrading of the business intermittent combats between the benefit plan changes and of ArcelorMittal. The risk of strikes climate and physical infrastructure Ukrainian army and pro-Russian 216 Risk factors

rebels in the Donbass region. In countries may not be parties to Moreover, ArcelorMittal operates in equipment, such as furnaces, addition, certain of ArcelorMittal’s treaties that recognize the mutual several countries whose currencies continuous casters, rolling mills operations are also located in enforcement of court judgments. are, or have in the past been, and electrical equipment (such areas where acute drug-related Assets in certain countries where subject to limitations imposed by as transformers), and such violence (including executions and ArcelorMittal operates could also those countries’ central banks, or equipment may incur downtime kidnappings of non-gang civilians) be at risk of expropriation or which have experienced sudden as a result of unanticipated failures occurs and the largest drug cartels nationalization, and compensation and significant devaluations. or other events, such as fires, operate, such as the states of for such assets may be below In emerging countries where explosions or furnace breakdowns. Michoacan, Sinaloa and Sonora in fair value. For example, the ArcelorMittal has operations and/or ArcelorMittal’s manufacturing Mexico. Venezuelan government has generates substantial revenue, such plants have experienced, and may implemented a number of selective as Argentina, Brazil, Venezuela, in the future experience, plant Certain emerging markets where nationalizations of companies Kazakhstan and Ukraine, the risk shutdowns or periods of reduced ArcelorMittal has operations are operating in the country to date. of significant currency devaluation production as a result of such experiencing particularly difficult Although ArcelorMittal believes is high. On February 5, 2015, the equipment failures or other events, operating conditions. Brazil, for that the long-term growth National Bank of Ukraine decided one example being the flooding example, is going through severe potential in emerging markets is to suspend its intervention in of the ArcelorMittal Tubarão site recession, with significant declines strong, and intends them to be the the UAH, which had kept a cap in October 2014 due to heavy rain seen in steel consumption and steel focus of the majority of its near- on the USD/UAH exchange rate and the stacker failure in Burns prices, currency depreciation and term growth capital expenditures, and leaves its currency floating Harbor in March 2014. To the high interest rates. Kazakhstan is legal obstacles could have a freely against the U.S. dollar. extent that lost production as a also going through a recession, and material adverse effect on the Consequently, the UAH has been result of such a disruption cannot its currency sharply deteriorated implementation of ArcelorMittal’s significantly devalued against the be compensated for by unaffected at the end of 2015. The steel and growth plans and its operations in USD, losing as much as 60% since facilities, such disruptions mining industries in South Africa are such countries. 2014 highs, including intraday could have an adverse effect subject to a challenging operating losses of up to 30%. on ArcelorMittal’s operations, environment characterized by ArcelorMittal’s results of customer service levels and results lower local demand, increased operations could be affected by In Venezuela, on February 10, of operations. cheap imports and higher costs, fluctuations in foreign exchange 2015, the Finance Minister and the resulting in losses in recent years rates, particularly the euro to Central Bank President in Venezuela Natural disasters or severe for ArcelorMittal South Africa. U.S. dollar exchange rate, as well announced the creation of a new weather conditions could as by exchange controls imposed flexible rate system (Exchange damage ArcelorMittal’s In addition, epidemics may affect by governmental authorities in agreement No 33) called Sistema production facilities or adversely ArcelorMittal’s operations in certain the countries where it operates. Marginal de Divisas – Foreign affect its operations. regions. For example, ArcelorMittal Currency Marginal System operates in Liberia, which ArcelorMittal operates and sells (“SIMADI”). SIMADI substituted the Natural disasters could significantly underwent an Ebola virus disease products globally and as a result, its previous SICAD II mechanism and damage ArcelorMittal’s production epidemic in 2014 and 2015. This business, financial condition, results was made available for both public facilities and general infrastructure. affected ArcelorMittal’s operations of operations or prospects could be and private companies as well as For example, ArcelorMittal and projects in Liberia. There adversely affected by fluctuations individuals. The SIMADI exchange Mexico S.A. de C.V’s production can be no assurance that other in exchange rates. A substantial rate closed at 198.7 Bs.F. per U.S. facilities located in Lázaro epidemics will not adversely affect portion of ArcelorMittal’s assets, dollar as of December 31, 2015, Cárdenas, Michoacán, Mexico and ArcelorMittal’s ongoing operations, liabilities, operating costs, sales while the SICAD exchange rate has ArcelorMittal Galati’s production production targets and expansion and earnings are denominated been set to 13.50 Bs.F. per U.S. facilities in Romania are located plans, if any, in other markets in in currencies other than the U.S. dollar since September 1, 2015. in or close to regions prone to which it operates. dollar (ArcelorMittal’s reporting earthquakes. The Lázaro Cárdenas currency). Accordingly, its results Currency devaluations, the area has, in addition, been subject In addition, the legal systems in of operations are subject to imposition of new exchange to a number of tsunamis in the some of the countries in which translation risk (i.e., the USD controls or other similar restrictions past. ArcelorMittal Point Lisas is ArcelorMittal operates remain less value of the revenues and profits on currency convertibility, or the located in Trinidad & Tobago, an than fully developed, particularly generated in other currencies and tightening of existing controls in area vulnerable to both hurricanes with respect to the independence its debt denominated in other the countries in which ArcelorMittal and earthquakes. The site of the of the judiciary, property rights, the currencies) and transaction risk operates could adversely affect its joint venture AM/NS Calvert protection of foreign investment (i.e., a mismatch between the business, financial condition, results (“Calvert”) in the United States and bankruptcy proceedings, currency of costs and revenues). of operations or prospects. is located in an area subject to generally resulting in a lower level Recent examples of the currency tornados. ArcelorMittal also has of legal certainty or security for translation effect on ArcelorMittal’s Disruptions to ArcelorMittal’s assets in locations subject to foreign investment than in more financials include the decrease manufacturing processes could Arctic freeze such as the mining developed countries. ArcelorMittal in the USD value of euro- adversely affect its operations, facilities through its joint venture may encounter difficulties in denominated revenues and debt as customer service levels and in Baffinland and to bush fires, enforcing court judgments or a result of the sharp depreciation financial results. specifically in Kazakhstan and arbitral awards in some countries of the euro versus the USD since South Africa. More generally, in which it operates because, mid-2014. Steel manufacturing processes are changing weather patterns and among other reasons, those dependent on critical steel-making climatic conditions in recent years, Risk factors 217

possibly due to the phenomenon and product liability insurance to ArcelorMittal products sold and the inherent uncertainty of of global warming, have added to coverage for all of its subsidiaries. and, as the case may be, advice such litigation and investigations, the unpredictability and frequency Various other types of insurance given in connection with such the nature of the resolutions of of natural disasters. Damage to are also maintained, such as products could leave ArcelorMittal such proceedings are difficult to ArcelorMittal production facilities comprehensive construction uninsured against a portion or the forecast but negative outcomes are due to natural disasters could, to and contractor insurance for entirety of the award and, as a possible. An adverse ruling in the the extent that lost production its greenfield and major capital result, materially harm its financial proceedings described above or cannot be compensated for by expenditures projects, directors condition and future operating in other similar proceedings in the unaffected facilities, adversely and officers liability, transport, results. future could subject ArcelorMittal affect its business, results of and charterers’ liability, as well as to substantial administrative operations or financial condition. other customary policies such as ArcelorMittal is subject to penalties and/or civil damages. In car insurance, travel assistance and regulatory and compliance cases relating to other companies, In addition to natural disasters, medical insurance. risks, which may expose it to civil damages have been as high ArcelorMittal’s operations can investigations by governmental as hundreds of millions of U.S. be affected by severe weather In addition, ArcelorMittal authorities, litigation and fines, dollars in major civil antitrust conditions. This is due in particular maintains trade credit insurance in relation, among other things, proceedings during the last decade. to the long supply chain for certain on receivables from selected to its pricing and marketing In addition, ArcelorMittal operates of its operations and the location of customers, subject to limits that practices or other antitrust in many jurisdictions around certain operations in areas subject it believes are consistent with matters. The resolution of such the world, increasing the risk of to harsh winter conditions (i.e., those in the industry, in order matters could negatively affect non-compliance with laws and the Great Lakes Region, Canada to protect it against the risk of the Company’s profitability and regulations in relation to anti- and Kazakhstan). For example, non-payment due to customers’ cash flows in a particular period corruption, economic sanctions supply chain issues caused by a insolvency or other causes. Not all or harm its reputation. and other ethical matters, despite particularly harsh winter (causing in of ArcelorMittal’s customers are its compliance policies and particular the closure of the Great or can be insured, and even when ArcelorMittal is the largest steel procedures. Unfavorable outcomes Lakes shipping lanes) negatively insurance is available, it may not producer in the world. As a result, in current and potential future affected operations in Canada and fully cover the exposure. ArcelorMittal may be subject to litigation and investigations could the Northeastern United States exacting scrutiny from regulatory reduce ArcelorMittal’s liquidity and during the first quarter of 2014. Notwithstanding the insurance authorities and private parties, negatively affect its profitability, coverage that ArcelorMittal and its particularly regarding its trade cash flows, results of operations ArcelorMittal’s insurance policies subsidiaries carry, the occurrence practices and dealings with and financial condition, as well as provide limited coverage, of an event that causes losses in customers and counterparties. harm its reputation. potentially leaving it uninsured excess of limits specified under As a result of its position in against some business risks. the relevant policy, or losses steel markets and its historically ArcelorMittal is currently and arising from events not covered by acquisitive growth strategy, in the future may be subject to The occurrence of an event insurance policies, could materially ArcelorMittal could be subject to legal proceedings, the resolution that is uninsurable or not fully harm ArcelorMittal’s financial governmental investigations and of which could negatively affect insured could have a material condition and future operating lawsuits based on antitrust laws the Company’s profitability and adverse effect on ArcelorMittal’s results. in particular. These could require cash flows in a particular period. business, financial condition, significant expenditures and result results of operations or prospects. Product liability claims could in liabilities or governmental ArcelorMittal’s profitability or cash ArcelorMittal maintains insurance have a significant adverse orders that could have a material flows in a particular period could on property and equipment in financial impact on ArcelorMittal. adverse effect on ArcelorMittal’s be affected by adverse rulings amounts believed to be consistent business, operating results, in legal proceedings currently with industry practices, but it is not ArcelorMittal sells products to financial condition and prospects. pending or by legal proceedings fully insured against all such risks. major manufacturers engaged ArcelorMittal and certain of its that may be filed against the ArcelorMittal’s insurance policies in manufacturing and selling a subsidiaries are currently under Company in the future. See note cover physical loss or damage to wide range of end products. investigation by governmental 8.2 to ArcelorMittal’s consolidated its property and equipment on ArcelorMittal also from time entities in several countries, and financial statements. a reinstatement basis as arising to time offers advice to these are named as defendants in a from a number of specified risks manufacturers. Furthermore, number of lawsuits relating to ArcelorMittal’s business is subject and certain consequential losses, ArcelorMittal’s products are various antitrust matters. See note to an extensive, complex and including business interruption also sold to, and used in, certain 8.2 to ArcelorMittal’s consolidated evolving regulatory framework arising from the occurrence of an safety-critical applications, such financial statements. Antitrust and its governance and insured event under the policies. as, for example, pipes used in gas proceedings, investigations compliance processes may fail Under ArcelorMittal’s property and or oil pipelines and in automotive and follow-on claims involving to prevent regulatory penalties equipment policies, damages and applications. There could be ArcelorMittal subsidiaries are and reputational harm, whether losses caused by certain natural significant consequential damages also currently pending in various at operating subsidiaries, joint disasters, such as earthquakes, resulting from the use of or defects countries including Brazil and South ventures or associates. floods and windstorms, are also in such products. ArcelorMittal Africa. covered. has a limited amount of product ArcelorMittal also purchases liability insurance coverage, and a Because of the fact-intensive worldwide third-party public major claim for damages related nature of the issues involved 218 Risk factors

ArcelorMittal operates in a global subject to frequent change, varying ArcelorMittal’s reputation and U.S. investors may have difficulty environment, and, at a time of interpretation and inconsistent business could be materially enforcing civil liabilities against increased enforcement activity enforcement. Ineffective tax harmed as a result of data ArcelorMittal and its directors and enforcement initiatives collection systems and national breaches, data theft, unauthorized and senior management. worldwide, its business straddles or local government budget access or successful hacking. multiple jurisdictions and complex requirements may increase the ArcelorMittal is incorporated under regulatory frameworks. Such likelihood of the imposition of ArcelorMittal’s operations the laws of the Grand Duchy of regulatory frameworks, including arbitrary or onerous taxes and depend on the secure and reliable Luxembourg with its principal but not limited to the area of penalties, which could have performance of its information executive offices and corporate economic sanctions, are constantly a material adverse effect on technology systems. An increasing headquarters in Luxembourg. The evolving, and ArcelorMittal ArcelorMittal’s financial condition number of companies, including majority of ArcelorMittal’s directors may as a result become subject and results of operations. In ArcelorMittal, have recently and senior management are to increasing limitations on its addition to the usual tax burden experienced intrusion attempts or residents of jurisdictions outside business activities and to the imposed on taxpayers, these even breaches of their information of the United States. The majority risk of fines or other sanctions conditions create uncertainty as technology security, some of of ArcelorMittal’s assets and the for non-compliance. Moreover, to the tax implications of various which have involved sophisticated assets of these persons are located ArcelorMittal’s governance and business decisions. This uncertainty and highly targeted attacks outside the United States. As a compliance processes, which could expose ArcelorMittal to on their computer networks. result, U.S. investors may find it include the review of internal significant fines and penalties and ArcelorMittal’s corporate website difficult to effect service of process controls over financial reporting, to enforcement measures despite was the target of a hacking attack within the United States upon may not prevent breaches of its best efforts at compliance, in January 2012, which brought ArcelorMittal or these persons law or accounting or governance and could result in a greater than the website down for several days. or to enforce outside the United standards at the Company or its expected tax burden. See note Because the techniques used to States judgments obtained against subsidiaries. The risk of violation 9 to ArcelorMittal’s consolidated obtain unauthorized access, disable ArcelorMittal or these persons is also present at the Company’s financial statements. or degrade service or sabotage in U.S. courts, including actions joint ventures and associates systems change frequently predicated upon the civil liability where ArcelorMittal has only a In addition, many of the and often are not recognized provisions of the U.S. federal non-controlling stake and does jurisdictions in which ArcelorMittal until launched against a target, securities laws. Likewise, it may not control governance practices operates have adopted transfer the Company may be unable also be difficult for an investor to or accounting and reporting pricing legislation. If tax authorities to anticipate these techniques enforce in U.S. courts judgments procedures. impose significant additional tax or to implement in a timely obtained against ArcelorMittal liabilities as a result of transfer manner effective and efficient or these persons in courts in In addition, ArcelorMittal may be pricing adjustments, it could have countermeasures. jurisdictions outside the United subject to breaches of its Code a material adverse effect on States, including actions predicated of Business Conduct, other rules ArcelorMittal’s financial condition If unauthorized parties attempt upon the civil liability provisions and protocols for the conduct of and results of operations. or manage to bring down the of the U.S. federal securities laws. business, as well as to instances of Company’s website or force access It may also be difficult for a U.S. fraudulent behavior and dishonesty It is possible that tax authorities in into its information technology investor to bring an original action by its employees, contractors or the countries in which ArcelorMittal systems, they may be able to in a Luxembourg court predicated other agents. The Company’s failure operates will introduce additional misappropriate confidential upon the civil liability provisions to comply with applicable laws and revenue raising measures. The information, cause interruptions in of the U.S. federal securities laws other standards could subject it to introduction of any such provisions the Company’s operations, damage against ArcelorMittal’s directors fines, litigation, loss of operating may affect the overall tax its computers or process control and senior management and non- licenses and reputational harm. efficiency of ArcelorMittal and systems or otherwise damage its U.S. experts named in this annual may result in significant additional reputation and business. In such report. The income tax liability of taxes becoming payable. Any such circumstances, the Company ArcelorMittal may substantially additional tax exposure could have could be held liable or be subject increase if the tax laws and a material adverse effect on the to regulatory or other actions regulations in countries in Company’s financial condition and for breaching confidentiality and which it operates change or results of operations. personal data protection rules. Any become subject to adverse ArcelorMittal may face a significant compromise of the security of the interpretations or inconsistent increase in its income taxes if tax Company’s information technology enforcement. rates increase or the tax laws or systems could result in a loss regulations in the jurisdictions of confidence in the Company’s Taxes payable by companies in in which it operates, or treaties security measures and subject it to many of the countries in which between those jurisdictions, are litigation, civil or criminal penalties, ArcelorMittal operates are modified in an adverse manner. and adverse publicity that could substantial and include value-added This may adversely affect adversely affect its reputation, tax, excise duties, profit taxes, ArcelorMittal’s cash flows, liquidity financial condition and results of payroll-related taxes, property and ability to pay dividends. operations. taxes, mining taxes and other taxes. Tax laws and regulations in some of these countries may be Mining 219

Mining

ArcelorMittal’s mining segment has production facilities in North and South America, Europe, Africa and CIS. The table below provides an overview by type of facility of ArcelorMittal’s principal mining operations. As of December 31, 2015, ArcelorMittal Tebessa was classified as held for sale (see“Key transactions and events in 2015”) and therefore has been removed from the table below. ArcelorMittal Unit Country Locations Interest (%) Type of Mine Product Iron Ore ArcelorMittal Mines Canada Canada Mt Wright, Qc 85 Iron Ore Mine (open pit) Concentrate and pellets Minorca Mines USA Virginia, MN 100 Iron Ore Mine (open pit) Pellets Hibbing Taconite Mines USA Hibbing, MN 62.31 Iron Ore Mine (open pit) Pellets ArcelorMittal Mexico Volcan Mines Mexico Sonora 100 Iron Ore Mine (open pit) Concentrate ArcelorMittal Mexico Peña Colorada Mexico Minatitlán 50 Iron Ore Mine (open pit) Concentrate and pellets Concentrate, lump and ArcelorMittal Las Truchas Mexico Lázaro Cárdenas 100 Iron Ore Mine (open pit) fines ArcelorMittal Brasil Andrade Mine Brazil State of Minas Gerais 100 Iron Ore Mine (open pit) Fines ArcelorMittal Mineração Serra Azul Brazil State of Minas Gerais 100 Iron Ore Mine (open pit) Lump and fines Bosnia ArcelorMittal Prijedor Herzegovina Prijedor 51 Iron Ore Mine (open pit) Concentrate and lump Iron Ore Mine (open pit and Concentrate, lump and ArcelorMittal Kryvyi Rih Ukraine Kryvyi Rih 95.13 underground) sinter feed Lisakovsk, Kentobe, Atasu, Iron Ore Mine (open pit and Concentrate, lump and ArcelorMittal Temirtau Kazakhstan Atansore 100 underground) fines ArcelorMittal Liberia Liberia Yekapa 85 Iron Ore Mine (open pit) Fines Coal McDowell, WV, Tazewell, Coal Mine (surface and ArcelorMittal Princeton USA VA 100 underground) Coking and PCI coal Coking coal and thermal ArcelorMittal Temirtau Kazakhstan Karaganda 100 Coal Mine (underground) coal

Iron Ore and Mont Reed. Fire Lake, located southwestern branch of the 157 kilometer line. In the event approximately 53 kilometers Labrador Trough. The most of an emergency, the Hart Jaune ArcelorMittal Mines Canada south of Mont-Wright from which important rock type in the area Power plant, also connected to the approximately 7.6 million tonnes of is the specular hematite iron Hydro-Quebec grid, can supply ArcelorMittal Mines Canada is a crude ore were transported by rail formation forming wide, massive sufficient power to maintain major North American producer of to the Mont-Wright concentrator. deposits that often form the crest the operations of the essential iron ore concentrate and several Fire Lake was previously a seasonal of high ridges extending for many processing facilities. types of pellets. It holds mineral operation and has been operating kilometers in the Quebec-Labrador rights over 35,086 hectares of year-round since 2014. The Mont area. ArcelorMittal USA Iron Ore Mines land in the province of Québec, Reed deposit is currently not Canada. ArcelorMittal Mines mined. In addition, ArcelorMittal The Mont-Wright operation ArcelorMittal USA operates an Canada operates a Mont-Wright Mines Canada holds surface consists of open pit mines and a iron ore mine through its wholly- Mine and concentrator at Fermont rights over the land on which the concentrator. The ore is crushed owned subsidiary ArcelorMittal in northeastern Québec. Mont- Mont-Wright and Port Cartier in two gyratory crushers and Minorca and owns a majority stake Wright is located 416 kilometers installations are located, with the the concentrator operates with in Hibbing Taconite Company, north of the port of Port-Cartier, exception of a small area which seven lines of three stage spiral which is managed by Cliffs Natural the site of the pelletizing plant remains the property of the classifiers and horizontal filters. Resources. and shipping terminal on the north Quebec Government but in no way The concentrator has a production shore of the Gulf of St. Lawrence, compromises the mineral rights. capacity of 24 million tonnes ArcelorMittal Minorca holds mineral and approximately 1,000 The property began operating in of concentrate per annum. The rights on 2800 acres as well own kilometers northeast of Montreal. 1976. Port-Cartier pellet plant produces 13,210 acres and lease 550 acres A private railway connects the mine acid and flux pellets that operate of additional land to support the and concentrator with Port-Cartier. The expiration dates of the mining six ball mills, ten balling discs and operation located approximately The railway and the port are owned leases range from 2016 to 2033. two induration . The three kilometers north of the and operated by ArcelorMittal These leases are renewable for pelletizing plant has a capacity of town of Virginia in the northeast Mines Canada. The Mont-Wright three periods of ten years provided 9.8 million tonnes of pellets. The of Minnesota accessible by road mine and the town of Fermont are the lessee has performed mining mine produced 10.0 million tonnes and rail. The Minorca operations connected by Highway 389 to Baie operations for at least two years in of pellets and 15.9 million tonnes control all the mineral rights and Comeau on the North Shore of the the previous ten years of the lease. of concentrate in 2015. surface rights needed to mine Gulf of St. Lawrence, a distance and process its estimated 2015 of 570 kilometers. ArcelorMittal The Mont-Wright and Fire Lake Electric power for Mont-Wright iron ore reserves. ArcelorMittal Mines Canada owns mineral rights mines are part of the highly- and the town of Fermont is Minorca operates a concentrating to iron ore deposits in Fire Lake folded and metamorphosed supplied by Hydro-Quebec via a and pelletizing facility, along with 220 Mining

two open pit iron ore mines – of shallow dipping Precambrian a dry cobbing high intensity Laurentian and East Pits located sedimentary rocks known as Government concessions are magnetic pulley and three tertiary 12 kilometers from the processing taconite with a total thickness in granted by the Mexican federal crushers. The concentration plant facilities. The processing operations excess of 200 meters and running government for a period of 50 includes two ball mills on line, consist of a crushing facility, a for approximately 200 kilometers. years and are renewable. The a magnetic separation circuit, three-line concentration facility Although the first deposits mined in expiration dates of the current flotation systems, a belt conveyor and a single-line straight grate the Mesabi iron range consisted of mining concessions range from filter and a disposal area for pelletizing plant. The Minorca oxidized hematite ores, production 2021 to 2062. tails. The major port installations pelletizing facility produced 2.7 was shortened in the mid-1950 to include a tippler for railroad cars, million metric tonnes of taconite low grade magnetic taconite ores. The Peña Colorada pelletizing a conveyor, transfer towers and pellets in 2015. Pellets are The processing of this ore involves facility produced 3.5 million tonnes two ship loading systems. The transported by rail to ports on Lake a series of grinding and magnetic of pellets in 2015. Both magnetite mine exploitation and crushing Superior. Lake vessels are used to separation stages to remove the concentrate and iron ore pellets operations and all transport transport the pellets to Indiana magnetite from the silica. Electric are shipped from Manzanillo to activities are performed by Harbor. The Minorca taconite plant power constitutes the main source ArcelorMittal Mexico for export, as contractors. The concentrate and was constructed and operated of energy for both Minorca and well as to Ternium’s steel plants, by port operations are operated with by Inland Steel between 1977 Hibbing and is provided from the ship and by rail. ArcelorMittal’s own resources. and 1998 when it was purchased Minnesota state power grid. The concentrate is transported by then ISPAT International, Peña Colorada is a complex by rail to the Pacific port of a predecessor company of ArcelorMittal Mexico Mining polyphase iron ore deposit. The iron Guaymas and then shipped to the ArcelorMittal. Assets mineralization at Peña Colorada steel plant in Lázaro Cárdenas or consists of banded to massive exported. The mining operation The Hibbing Taconite Company ArcelorMittal Mexico operates concentrations of magnetite within uses two Caterpillar 3516B electric holds mineral rights over 8,008.6 three iron ore mines in Mexico, the breccia zones and results from generators in continuous operation, acres in 42 contiguous mineral El Volcan and Las Truchas mines, several magmatic, metamorphic with one generator operating leases, is located six kilometers and, through a joint operation with and hydrothermal mineralization 24 hours per day at an average north of Hibbing in the northeast Ternium S.A, the Peña Colorada stages with associated skarns, consumption of 540 kilowatt hours of Minnesota accessible by road mine. dykes and late faults sectioning the while the second generator is on and rail. The Hibbing operations entire deposit. standby. The concentration facility are jointly owned by ArcelorMittal Peña Colorada uses electric power from the USA, Cliffs Natural Resources Peña Colorada holds mineral El Volcan national grid. (23.0%) and U.S. Steel (14.7%), rights over 99,188 acres located at ArcelorMittal holds mineral rights and Cliffs Natural Resources is about 60 kilometers by highway over 1,053 hectares to support The El Volcan mine concession was the operator of the joint venture to the northeast of the port city its El Volcan operations located bought from the Sonora provincial mine and processing facilities. of Manzanillo, in the province of approximately 68 kilometers government in 2004, followed The Hibbing Taconite Company Minatitlán in the northwestern northwest of the city of Obregon by exploration of the property in controls all of the mineral rights part of the State of Colima, Mexico. and 250 kilometers from the 2005. The development of the and surface rights needed to ArcelorMittal owns 50% of Peña Guaymas port facility in the state mine started in 2007. Mining mine and process its estimated Colorada Ltd., and Ternium of Sonora, Mexico. The El Volcan operations were halted during 2015 iron ore reserves. The S.A. owns the other 50% of the operations control all of the the 2008-2009 crisis and on operations consist of open pit company. mineral rights and surface rights several occasions due to structural mining, crushing, concentrating and needed to mine and process problems in the crushing facilities. pelletizing. The finished pellets are Peña Colorada operates an open its estimated 2015 iron ore Operations resumed without then transported by rail to the port pit mine as well as a concentrating reserves. ArcelorMittal operates interruption from 2010 until of Allouez at Superior, Wisconsin, facility and a two-line pelletizing a concentrating facility along October 2015. The El Volcan a distance of 130 kilometers facility. The beneficiation plant with an open pit mine and a pre- operations produced 1.7 million and then over the Great Lakes is located at the mine, whereas concentration facility at the mine tonnes of concentrate in 2015, by lake vessels to ArcelorMittal’s the pelletizing plant is located site. The mine site is accessible by a which is a decrease from the integrated steelmaking plants, in Manzanillo. Major processing 90-kilometer road from the city of normal 2.3 million capacity due principally Burns Harbor. The facilities include a primary Obregon, where the concentrator to suspension of operations in Hibbing Taconite Company began crusher, a dry cobbing plant, is located. October 2015 as the mine reaches operating in the third quarter of one autogenous mill, horizontal end of mine life. 1976. The mine produced 8.1 and vertical ball mills and several Government concessions are million metric tonnes of taconite stages of magnetic separation. granted by the Mexican federal The iron mineralization includes pellets in 2015 (of which 62.3% is The concentrate is sent as a pulp government for a period of 50 magnetite rich skarn associated ArcelorMittal’s share). through a pipeline from the mineral years and are renewable. The to the intrusion and extrusion of processing plant. Peña Colorada expiration dates of the current magmas rich in iron and formed in Both the Minorca and Hibbing has operated since 1974. The Peña mining concessions range from a volcanic environment. mines are located in the Mesabi Colorada mine receives electrical 2055 to 2061. iron range where iron ore has been power from the Comisión Federal Las Truchas extracted for over 100 years. de Electricidad (CFE), which is a The pre-concentration facilities The ore bodies are within the federal government company that at the mine include one primary ArcelorMittal holds mineral Biwabik Iron Formation, a series serves the entire country. crusher, one secondary crusher, rights over 52,473 hectares. Mining 221

The Las Truchas mine is located The mineralization also occurs as 5,505,400 square meters, located estimates are constituted of rich approximately 27 kilometers fillings of faults, breccia zones, and approximately 50 kilometers friable Itabirites requiring some southeast of the town of fractures. southwest of the town of Belo beneficiation, the Andrade ore Lázaro Cárdenas in the State Horizonte in the Minas Gerais state reserve estimates are dominated of Michoacán, Mexico. The Las ArcelorMittal Brasil—Andrade of Brazil. ArcelorMittal’s operations by directly shippable hematite ore. Truchas operations are accessible Mine control all of the mineral rights and by public highway and control all surface rights needed to mine and ArcelorMittal Prijedor the mineral rights and surface ArcelorMittal Brasil holds mineral process its estimated 2015 iron ore rights needed to mine and process rights over the central claims reserves. ArcelorMittal operates an ArcelorMittal Prijedor, located near its estimated 2015 iron ore of the Andrade deposit of over open pit mine and a concentrating Prijedor in the Republic of Srpska reserves. 28,712,100 square meters facility. The mine site is accessible in Bosnia and Herzegovina, is an located approximately 80 by 80 kilometers of public highway iron ore mining operation that Government concessions are kilometers east of Belo Horizonte from Belo Horizonte. is 51% owned by ArcelorMittal. granted by the Mexican federal in the Minas Gerais state of Brazil. ArcelorMittal Prijedor holds mineral government for a period of 50 ArcelorMittal’s operations control In addition to the open pit mine, rights over 2,000 hectares to years and are renewable. The all of the mineral rights and surface processing operations consist of support ArcelorMittal’s steel- expiration dates of the current rights needed to mine and process a crushing facility and a three-line making operations located mining concessions range from its estimated 2015 iron ore concentration facility including approximately 243 kilometers 2044 to 2059. reserves. ArcelorMittal operates screening, magnetic separation, south of Prijedor in northern Bosnia an open pit mine and a crushing spirals separators and jigging. (Zenica). ArcelorMittal Prijedor has The Las Truchas mine is an facility. The mine site is accessible Production is transported either by no reason to believe that it will not integrated iron ore operation. by 110 kilometers of public truck for local clients of lump, or maintain the operating licenses It began operating in 1976 highway from Belo Horizonte. by truck to two railway terminals required to continue operations and as a government enterprise Power is mostly generated from located 35 and 50 kilometers, process its estimated 2015 iron (Sicartsa), and its mining activities hydroelectric power plants and respectively, from the mine ore reserves. The operation is in consist of an open pit mine supplied by CEMIG, an open site for selling to local clients of close proximity to long-established exploitation, crushing, dry cobbing capital company controlled by the sinter feed or for export through public roads. The production preconcentrate and concentration Government of the State of Minas third-party port facilities located process includes crushing, with plant. The aggregated 2015 Gerais. in the Rio de Janeiro State. Sinter hydro-cyclones and magnetic production of concentrate, lumps feed production is shipped to separation at the concentration and fines totaled 1.8 million tonnes. Companhia Siderurgica Belgo- ArcelorMittal’s plants in Europe as plant. The plant is close to the mine The concentrator includes one Mineira (“CSBM”) initiated mining well as to the local Brazilian market site, and materials are transported primary crusher, two secondary operations at the property in including the ArcelorMittal Brasil through a conveyor. Power is crushers and three tertiary 1944 in order to facilitate the integrated plants. The Compania supplied from the national grid crushers, one ball mill and one supply of ore to its steel plant in Energética de Minas Gerais through a local power distribution bar mill and two wet magnetic Joao Monlevade. The mine was (CEMIG) supplies power through company. In 2015, ArcelorMittal separation circuits. The electrical managed by CSBM until 2000. In a 13,800 volt line from Mateus Prijedor produced 2.1million tonnes energy supplier for the Las Truchas 2000, Vale acquired the property, Leme, located 20 kilometers from of aggregated lumps and fines. mine is a state-owned company, although the mine continued to the mine. The electricity is locally Comisión Federal de Electricidad be operated by CSBM until Vale transformed into 380 volts by six In 1916, Austrian mining (CFE). The concentrated ore is entered into a 40-year lease for transformers spread around the companies established the first pumped from the mine site through the Andrade mineral rights in operation. Minas Itatiaucu (MIL) industrial production of iron ore in a 26-kilometer slurry pipeline to 2004 (subject to the condition initiated mining operations at the the Prijedor area. The mines were the steel plant facility in Lázaro that the supply to CSBM would property in 1946. In 2007, London nationalized in the 1950s, and Cárdenas. be assured). In November 2009, Mining Brazil Mineracao Ltda were then owned by Iron Mines Vale returned the Andrade mine (London Mining) purchased the Luubija Company until Mittal Steel The Las Truchas deposits consist to CSBM, which then transferred mineral rights from MIL. Following acquired 51% of the company in of massive concentrations of it to ArcelorMittal. In 2015, the the acquisition of the property 2004. magnetite of irregular morphology. Andrade mine produced 1.5 million from London Mining, ArcelorMittal The main Las Truchas deposits tonnes of sinter feed. An increase has operated the mine since 2008. The Omarska deposit is composed occur along about seven kilometers of the mine’s production capacity In 2015, ArcelorMittal Mineração of two ore bodies: Jezero and long and about two kilometers to 3.5 million tonnes per year of Serra Azul produced 2.0 million Buvac. The Jezero open pit began wide. The Las Truchas mineral sinter feed was completed in 2012. tonnes of lumps and sinter fines. operating in 1983 and, following deposits have been classified as In 2013 a cross road was built in an interruption in production during hydrothermal deposits, which may order to improve shipments to the Both the Andrade and Serra the Bosnian civil war in the 1990s, have originated from injections local Brazilian market. Azul mines are located in the production resumed in 2004. of late stage-plutonic-activity Iron Quadrangle (Quadrilatero through older sedimentary rocks. ArcelorMittal Mineração Serra Azul Ferrifero), a widely-explored and However, since 2011, ore has The mineralization of the Las mined region. The mineralization only been produced at the Buvac Truchas iron deposits occurs in ArcelorMittal Mineração Serra occurs as Itabirites, banded pit. The Buvac pit was opened disseminated and irregular massive Azul holds mineral rights over hematite-silica rocks, with in 2008 and is located within concentrations of magnetite within the central and east claims of varying weathering degrees. a carboniferous clastic and metamorphic rocks and skarns. the Serra Azul deposit over While the Serra Azul ore reserve carbonates sediments containing 222 Mining

iron mineralization in the form of The iron ore extracted from 0.9 illion tonnes of concentrate in 2003. The existing subsoil beds concordant with host rocks the Kryvyi Rih open cast is first in 2015. The mine was initially agreement expires in 2026. or in the form of massive irregular processed at the mine site commissioned in 1976 and was Processing comprises of crushing blocks. The genesis of this deposit through primary crushing. After acquired by ArcelorMittal in 1999. and wet jigging. The Atasu mine is attributed to hydrothermal initial processing, the product is The existing subsoil agreement is hosted by the West Karazhal replacement and syn-sedimentary loaded on a rail-loading facility expires in 2020. The production deposit, which is a primary processes. The Buvac ore body and transported to the crushing process comprises crushing, magnetite ore with associated is mainly composed of limonite- plant. The concentrator production screening, grinding, wet jigging manganese mineralization. goethite mineralization, which process includes crushing, and wet magnetic separation. The Studies have indicated that the was formed during weathering classification, magnetic separation iron mineralization at Lisakovsk deposit could have a sedimentary- oxidization of the primary siderite and filtering. The iron ore extracted occurs as oolite containing volcanogenic origin caused by bodies. from the Kryvyi Rih’s underground mainly hygoethite and goethite. underwater hydrothermal activity. mine by a modified sub-level The phosphorous content in the The mine receives electric power ArcelorMittal Kryvyi Rih caving method is crushed on mineralization limits its utilization from the Prometei-2003 grid via surface and transported by rail to in the steel-making process. At NovoKarazhal substation. ArcelorMittal Kryvyi Rih (“AMKR”) the steel plant. The main consumer Lisakovsk, natural gas is supplied holds mineral rights to support its of the sinter and concentrate by KazTransGazAimak JSC and Atansore is an open pit operation operations located roughly within products is the ArcelorMittal transmitted through the local located about 500 kilometers the limits of the city of Kryvyi Kryvyi Rih steel plant, with some grid. Electric power for the other northeast of Temirtau with Rih, 150 kilometers southwest of concentrate being shipped to facilities is supplied by Prometey production of 0.4 million tonnes Dnepropetrovsk, Ukraine over other ArcelorMittal affiliates in 2003 and Sarbai MES KEGOK. of concentrate and fines in 2015. 1,301 hectares. AMKR’s operations Eastern Europe, as well as to third The mining lease was obtained control all of the mineral rights parties. The iron mineralization Kentobe is an open pit operation, by ArcelorMittal in 2004. The and surface rights needed to is hosted by early Proterozoic initially started in 1994 and existing subsoil agreement expires mine and process its estimated rocks containing seven altered acquired by ArcelorMittal in 2001, in 2029. The Atansor deposit is 2015 iron ore reserves. AMKR ferruginous quartzite strata with located about 300 kilometers located within skarn zones related operates a concentrating facility, shale layers. The major iron ore southeast of Temirtau, with to a volcanic intrusion that can along with two open pit and one bearing units in the open pit mines production of 0.7 million tonnes of be traced for more than 1.5 underground iron ore mines. have carbonate-silicate-magnetite concentrate in 2015. Clearance for kilometers. The mineralization The iron ore deposits are located composition. In addition, oxidized extension of the existing subsoil includes both martitic oxidized within the southern part of the quartzite is mined simultaneously agreement until 2026 was given by ore and primary magnetite ore. A Krivorozhsky iron-ore basin. Access with primary ore but cannot be Kazakhstan Ministry of innovation new concentrator is processing to the mines is via public roads, processed at present and is stored and development and signing the magnetite portion of the which are connected by a paved separately for future possible of addendum to the agreement ore by simple dry crushing and highway to Dnepropetrovsk. processing. Only the magnetite is in process. Ore processing is magnetic separation while the The area is well served by rail. mineralization is included in the performed by crushing and dry low-grade oxidized portion of Power is supplied by the Ukraine 2015 open pit iron ore reserve magnetic separation, producing the ore is sold as fines to a third government and is generated estimates. The underground coarse concentrate. The Kentobe party for further beneficiation. At from a mix of nuclear, gas and mine is hosted by a ferruginous mine is located in the Balkhash the Atansore operations, electric coal-fired power stations. AMKR quartzite with martite and jaspilite. metallogenic province hosting power is provided from the has two iron ore mines: an open numerous volcanic, sedimentary Kokshetauenergo center. pit mine feeding a concentration Lisakovsk, Kentobe, Atasu, and hydrothermal deposits. The plant that produced 10.1 million Atansore (Temirtau Iron Ore) mineralization at Kentobe includes ArcelorMittal Liberia tonnes of concentrate in 2015, two types of iron ore: oxidized and known as the Kryvyi Rih open ArcelorMittal Temirtau has four primary magnetite. The magnetite ArcelorMittal Liberia Holdings cast, and an underground mine iron ore mining operations mineralization constitutes the vast Limited (“AMLH”), through with production of 0.9 million in Kazakhstan. The mines are majority of the 2015 estimated ore its agent (and subsidiary) tonnes of lump and sinter feed Lisakovsk, Kentobe, Atasu and reserves. Electric power is supplied ArcelorMittal Liberia Limited in 2015, known as the Kryvyi Rih Atansore. The four mines are to the Kentobe operations by (“AML”), has been mining ‘direct underground mine. Operations connected by all-weather roads Karaganda Energosbyt LLP. shipping ore, or DSO’ from the began at the Kryvyi Rih open and railways. Dispatch of ore from first of three deposits in the cast in 1959 and at the Kryvyi these mines to the ArcelorMittal Atasu is an underground mine Mt. Tokadeh, Mt. Gangra and Rih underground mine in 1933. steel plant is by railway. operation located about 400 Mt. Yuelliton mountain ranges ArcelorMittal acquired the ArcelorMittal Termitau’s operations kilometers south/southwest in northern Nimba, Liberia since operations in 2005. control all of the mineral rights and from Temirtau with production June 2011. AML signed a Mineral surface rights needed to mine and of 0.8 million tonnes of lump and Development Agreement (“MDA”) The expiration of the agreements process its estimated 2015 iron ore fines in 2015. The mine began in 2005 with the Government on the subsoil use conditions and reserves. operating in 1956 with open of Liberia (“GOL”) that is valid for the subsoil use permits range from pit exploitation of near surface 25 years and renewable for an 2016 to 2021, while the expiration Lisakovsk is an open pit operation reserves. Surface operations additional 25-year period. The of the land lease agreements located in northwest Kazakhstan ended in 1980. Underground MDA covers three deposits to ranges from 2060 to 2061. about 1,100 kilometers from operations commenced in 1976. support AML’s operations located Temirtau, with production of ArcelorMittal acquired the mine approximately 300 kilometers Mining 223

northeast of Monrovia, Liberia deposits at Tokadeh, Gangra coal outcrops have been previously power stations. over 516 square kilometers. These and Yuelliton fit the general contour mined, providing access three deposits are grouped under definition of Itabirite as laminated for highwall mining and on-bench The Kostenko mine began the name “Western Range Project”, metamorphosed oxide-facies iron storage of excess spoil from operations in 1934 and which includes the Tokadeh, Gangra formation, they are of lower iron future, larger-scale surface mining. merged with the neighboring and Yuelliton deposits. In addition grade than the ore previously AMP was created in 2008 when Stakhanovskaya mine in 1998. to the rights to explore and mine mined at Mount Nimba. Tropical the Mid-Vol Coal Group and the The field of Kostenko mine falls iron ore, the GOL has granted the weathering has caused the Concept Mining Group were within the Oktyabrskiy district of right to develop, use, operate and decomposition of the rock forming integrated. Karaganda city. maintain the Buchanan to Yekepa minerals resulting in enrichment in The properties are located in railroad and the Buchanan port. the iron content that is sufficient to the Pocahontas Coalfields of The Kuzembaeva mine was A phased approach has been support a DSO operation. the Central Appalachian Coal established in 1998. The nearest taken to establish the final project Basin. The Carboniferous age communities are Saran, Abay and configuration. Currently only high Coal coal deposits are situated in the Shakhtinsk, which are located grade ore reserves of oxidized iron Pottsville Group, New River and 18 kilometers to the northeast, ore (DSO) are mined. This ore only ArcelorMittal Princeton Pocahontas Formations. The rock 15 kilometers to the southeast requires crushing and screening strata, including the coal deposits, and 12 kilometers to the west, to make it suitable for export. The ArcelorMittal Princeton are sedimentary rocks formed respectively. The eastern part of The materials-handling operation (“AMP”) properties are located in by alluvial, fluvial, and deltaic the mine falls within the center of consists of stockyards at both McDowell County, West Virginia sediments deposited in a shallow, Karaganda City. the mine and port areas, linked and Tazewell County, Virginia, subsiding basin. The most common by a 250-kilometer single track approximately 30 miles west rock types are various types of The Saranskaya mine began railway running from Tokadeh to of the city of Princeton, West sandstone and shale. The coal operations in 1955. It merged with the port of Buchanan. Production Virginia, where AMP’s corporate deposits are typically in relatively the Sokurskaya mine in mid-1997 in 2015 was at 4.3 million tonnes. office is located. The properties thin coal beds, one to five feet and the Aktasskaya mine in 1998. Drilling for DSO resource extension consist of two operating areas: thick. The nearest communities are commenced in late 2015 and in the Low Vol operations and the Saran, Abay and Shakhtinsk, which 2016 the operation has been right Mid Vol operations, which are The combined production of the are located 18 kilometers to the sized to 3 million tonnes to focus situated south of U.S. Route 52. mines in 2015 was 1.6 million northeast, 15 kilometers to the on its ‘natural’ Atlantic markets. High-voltage power lines, typically tonnes of washed and directly southeast and 12 kilometers to 12,500 volts, deliver power to shippable coal. the west, respectively. Karaganda The power for the current Liberia work stations where transformers City is located approximately 35 DSO operations is obtained from reduce voltage for specific ArcelorMittal Temirtau (Karaganda kilometers to the northeast. a combination of diesel and equipment requirements. Coal Mines) electric sources. Planning and The Kostenko, Kuzembaeva and construction of the project were The larger Low Vol operations are ArcelorMittal Temirtau has eight Saranskaya mines receive energy commenced in 1960 by a group located in McDowell County, West underground coal mines and two from public district networks of Swedish companies, which Virginia, near the communities of coal preparation plants (CPP through transforming substations ultimately became the Liberian Northfork, Keystone, Eckman, Gary, “Vostochnaya” and Temirtau of the Karagandaenergo Company. American-Swedish Minerals Berwind, and War. The Eckman Washery-2). The coal mines of Company (“LAMCO”), and Plant, Dans Branch Loadout, ArcelorMittal Temirtau are located The Abayskaya mine began production commenced on the Eckman 2 and Redhawk 1 surface in the Karaganda Coal Basin. The operations in 1961. In 1996, it Nimba deposit in 1963. Production mines are also located here, as well basin is more than 3,000 square was merged with the Kalinina reached a peak of 12 million metric as the following deep mines: XMV kilometers and was formed by mine. The nearest communities are tonnes in 1974 but subsequently Mine Nos. 32, 35, 39, 42 and 43. strata of Upper Devonian and Saran, Abay and Shakhtinsk, which declined due to market conditions. Carbonic ages, Mesozoic and are located 18 kilometers to the Production started at Mt. Tokadeh The Mid Vol operations are in Cainozoic formations. Due to northeast, 15 kilometers to the in 1985 to extend the life of southeastern McDowell County, structural peculiarities, the coal southeast and 20 kilometers to the Nimba ore bodies to 1992 West Virginia and northwestern basin is divided into three geology- the west, respectively. Karaganda when operations ceased due to Tazewell County, Virginia. The based mining areas: Karagandinskiy, City is located approximately 30 the Liberian civil war. In 2005, nearest communities are Horsepen Sherubay-Nurinskiy and Tentekskiy. kilometers to the northeast. Mittal Steel won a bid to resume and Abbs Valley, Virginia as well as operations and signed the MDA Anawalt, West Virginia. The mines are located in an area The Kazakhstanskaya mine with the GOL. Rehabilitation work with well-developed infrastructure began operations in 1969. The on the railway started in 2008 and, The property has a long history around the regional center nearest community is Shakhtinsk. in June 2011, ArcelorMittal started of coal mining, mostly by of Karaganda city. Within a Karaganda City is located mining operations at Tokadeh, predecessors in title to AMP. distance of 10 to 60 kilometers approximately 50 kilometers followed by a first shipment of iron Significant underground mining of are the following satellite towns: to the northeast. The railway ore in September 2011. some of the deeper coal seams Shakhtinsk, Saran and Abay, as station at MPS-Karabas is located on the properties have occurred, well as Shakhan and Aktas. All approximately 35 kilometers to the The Nimba Itabirites is a 250 to notably the Pocahontas no. 3 mines are connected to the main southeast. 450 meter thick recrystallized and no. 4 seams. In addition, a railway, and coal is transported by iron formation. Although theiron substantial amount of the thicker railway to the coal wash plants and 224 Mining

The Lenina mine was put in operation in 1964 and was subsequently merged with Naklonnaya no. 1/2 mine in 1968. The nearest community is Shakhtinsk, located seven kilometers to the southeast, and Karaganda City, is located 50 kilometers to the northeast. The railway station MPS- Karabas is located 35 kilometers to the southeast.

The Shakhtinskaya mine began operations in 1973. The nearest community is Shakhtinsk, which is located 10 kilometers to the southeast, and Shakhan, which is located seven kilometers to the north. Saran is located 18 kilometers to the east. Karaganda City is located approximately 35 kilometers to the east.

The Tentekskaya mine began operations in 1979. The nearest community is Shakhtinsk. Karaganda City is located approximately 50 kilometers to the northeast. The railway station MPS-Karabas is located approximately 35 kilometers to the southeast.

Abayskaya, Shakhtinskaya, Lenina, Tentekskaya and Kazakhstanskaya mines receive energy from high-voltage lines of Karaganda.

The subsoil use contract and license (all coal mines in Temirtau) will expire in 2022. Total land area under mineral rights is 286 square kilometers.

The mines produce primarily coking coal used in steel-making at ArcelorMittal Temirtau as well as thermal coal for ArcelorMittal Temirtau’s power plants. For beneficiation of coking coal, two washeries are operated. Surplus coal is supplied to ArcelorMittal Kryvyi Rih in Ukraine, and to external customers in Russia and China. In 2015, the Karaganda Coal Mines produced 4.6 million tonnes of metallurgical coal and approximately 1.3 million tonnes of thermal coal consumed by the Temirtau steel operations.

Capital Expenditure Projects

The following tables summarize the Company’s principal growth and optimization projects involving significant capital expenditure completed in 2015 and those that are currently ongoing.

Ongoing Projects1 Segment Site Project Capacity / particulars Forecasted completion Increase production capacity to 15mt/ year Mining Liberia Phase 2 expansion project (high grade sinter feed) On hold 2

1 Ongoing projects refer to projects for which construction has begun (excluding various projects that are under development), even if such projects have been placed on hold pending improved operating conditions.

2 ArcelorMittal remains committed to Liberia where it operates a full value chain of mine, rail and port. It has been operating the mine on a DSO basis since 2011 and produced 4.3 million tonnes in 2015. In the current initial DSO phase, significant cost reduction and re-structuring has continued to ensure competitiveness at current prices. Drilling for DSO resource extension recently commenced and in 2016 the operation has been right sized to 3mtpa to focus on its ‘natural’ Atlantic markets. This repositioning for size and competitiveness also extends the life of the DSO phase as ArcelorMittal considers the appropriate next phase of development. ArcelorMittal had previously announced a Phase 2 project that envisaged the construction of 15 million tonnes of concentrate sinter fines capacity and associated infrastructure. The phase 2 project was initially delayed due to the declaration of force majeure by contractors in August 2014 due to the Ebola virus outbreak in West Africa. Rapid price declines over the period since force majeure have led to a reassessment of the project and ArcelorMittal is considering transitioning production to a higher grade sinter fines product but now in a phased approach as opposed to a major step up from 15 to 20mtpa as originally envisaged in phase 2. Extensive tonnage of concentrator feed material is already exposed in readiness for a concentrated sinter fines, and ArcelorMittal also has options in its concession to mine higher grade, lower gangue DSO ores. Work continues in 2016 to define the best business option.

Reserves and resources (iron ore The estimates of proven and based on the Canadian Institute of drill holes; grade and/or quality and coal) probable ore reserves and mineral Mining and (CIM) Best are computed from the results resources at the Company’s mines Practice Guidelines and Standard of detailed sampling; and (b) the Introduction and projects and the estimates Definitions for all its operations sites for inspection, sampling ArcelorMittal has both iron ore of the mine life included in this and projects), under which: and measurement are spaced and metallurgical coal reserves. annual report have been prepared so closely and the geologic The Company’s iron ore mining by ArcelorMittal’s experienced • Reserves are the part of a character is so well defined that operations are located in the engineers and geologists. mineral deposit that could size, shape, depth and mineral United States, Canada, Mexico, The reserve calculations were be economically and legally content of reserves are well- Brazil, Liberia, Bosnia, Ukraine prepared in compliance with the extracted or produced at established. and Kazakhstan. In Canada, the requirements of USA Securities the time of the reserve Company commenced mining and Exchange Commission’s determination. • Probable reserves are reserves for the greenfield operation on Baffin (“SEC”) Industry Guide 7 and the which quantity and grade and/ Island through a joint venture. mineral resource estimates were • Proven reserves are reserves for or quality are computed from The Company’s metallurgical coal prepared in accordance with the which (a) quantity is computed information similar to that used mining operations are located in requirements of Canadian National from dimensions revealed in for proven reserves, but the sites the United States and Kazakhstan. Instrument NI 43-101(which are outcrops, trenches, working or for inspection, sampling and Mining 225

measurement are farther apart assumed. proportions of costs, and on the leased properties to be or are otherwise less adequately forecasted fluctuations in costs of mined in accordance with current spaced. The degree of assurance, • An ‘inferred mineral resource’ is raw material, supplies, energy and production schedules. Ore reserves although lower than that for that part of a mineral resource wages. may include areas where some proven reserves, is high enough for which quantity and grade or Detailed independent verifications additional approvals remain to assume continuity between quality can be estimated on the of the methods and procedures outstanding but where, based on points of observation. basis of geological evidence and used are conducted on a regular the technical investigations the limited sampling and reasonably basis by external consultants. Company carries out as part of • The mineral resource estimates assumed, but not verified, Sites are reviewed on a rotating its mine planning process and its constitute the part of a mineral geological and grade continuity. basis; certain of the Company’s knowledge and experience of the deposit that have the potential The estimate is based on limited operations with significant ore approvals process, the Company to be economically and information and sampling reserve estimates as of December expects that such approvals will legally extracted or produced gathered through appropriate 31, 2011 were independently be obtained as part of the normal at the time of the resource techniques from locations such audited in 2012 by Roscoe Postle course of business and within the determination. The potential for as outcrops, trenches, pits, Associates and SRK Consulting timeframe required by the current economic viability is established workings and drill holes. (UK) Limited and no material life of mine schedule. through high level and changes to the 2011 year- conceptual engineering studies. The ore reserve and mineral end iron ore and coal reserve In Eastern Europe (Bosnia) and the resource estimates are updated estimates were recommended Commonwealth of Independent • A ‘measured mineral resource’ is annually in order to reflect new by them. In 2014, the year-end States (CIS), ArcelorMittal that part of a mineral resource geological information and current 2013 ore reserve estimates has conducted in-house and for which quantity, grade mine plan and business strategies. were independently audited independent reconciliations of or quality, densities, shape, The Company’s reserve estimates and validated by Roscoe Postle ore reserve and mineral resource and physical characteristics are of in-place material after Associates for the Company’s estimate classifications based are so well established that adjustments for mining depletion mines in Liberia and in Canada on Industry Guide 7, National they can be estimated with and mining losses and recoveries, including the joint venture Instrument NI 43-101 and confidence sufficient to allow with no adjustments made for Baffinland and no material standards used by the State the appropriate application metal losses due to processing. changes to the 2013 year- Committee on reserves, known of technical and economic The mineral resource estimates end iron ore and coal reserve as the GKZ in the CIS. The GKZ parameters, to support are of in-situ wet metric tonnage estimates were recommended constitutes the legal framework production planning and material prior to adjustments by them. In 2016, the 2015 for reserve and resource evaluation of the economic for mining recovery and dilution year end ore reserve estimates reporting in several former viability of the deposit. The factors and reported exclusive (in were independently audited Soviet Union countries where estimate is based on detailed and addition to ore reserve estimates). and validated by Roscoe Postle ArcelorMittal operates mines. On reliable exploration, sampling Associates for the Company’s Las the basis of these reconciliations, and testing information gathered For a description of risks relating to Truchas and Peña mines in Mexico, ArcelorMittal’s mineral resources through appropriate techniques reserves and resource estimates, and no material changes to the have been classified as measured from locations such as outcrops, see the risk factor entitled 2015 year-end iron ore reserve for categories A and B, indicated trenches, pits, workings and ‘ArcelorMittal’s reserve and estimates were recommended. for category C1 and inferred for drill holes that are spaced resource estimates may materially category C2. Ore reserves have closely enough to confirm both differ from mineral quantities that ArcelorMittal owns less than 100% been estimated by applying mine geological and grade continuity. it may be able to actually recover; of certain mining operations; planning, technical and economic ArcelorMittal’s estimates of mine reserve and resource estimates assessments defined as categories • An ‘indicated mineral resource’ life may prove inaccurate; and have not been adjusted to reflect A, B and C1 only according to is that part of a mineral resource market price fluctuations and ownership interests and therefore the GKZ standards. In general, for which quantity, grade or changes in operating and capital reflect 100% of the reserves and provided Guide 7’s economic quality, densities, shape and costs may render certain ore resources of each mine. Please see criteria for reserves are met (which physical characteristics, can reserves uneconomical to mine’ the table above under “Mining” is the case here), A+B is equivalent be estimated with a level of (more details page 212). for the ownership interest of to ‘proven’ and C1 is equivalent to confidence sufficient to allow ArcelorMittal in each mine. All ‘probable’. the appropriate application The demonstration of economic of the reserve figures presented of technical and economic viability is established through represent estimates at December The reported iron ore and parameters, to support mine the application of a life of mine 31, 2015 (unless otherwise stated). coal reserves contained in this planning and evaluation of the plan for each operation or project annual report do not exceed the economic viability of the deposit. providing a positive net present Mine life is derived from the life of quantities that the Company The estimate is based on detailed value on a cash-forward looking mine plans and corresponds to the estimates could be extracted and reliable exploration and basis. Economic viability is duration of the mine production economically if future prices were testing information gathered demonstrated using forecasts of scheduled from ore reserve at similar levels to the average through appropriate techniques operating and capital costs based estimates only. contracted price for the three years from locations such as outcrops, on historical performance, with ended December 31, 2015. The trenches, pits, workings and drill forward adjustments based on The Company’s mineral leases are average iron ore spot reference holes that are spaced closely planned process improvements, of sufficient duration (or convey a price for the last three years (2013 enough for geological and grade changes in production volumes legal right to renew for sufficient – 2015) was $95.96/dmt CFR China, continuity to be reasonably and in fixed and variable duration) to enable all ore reserves 62% Fe, (PLATTS Index) duly 226 Mining

adjusted for quality, Fe content, logistics and other considerations. For the same period, the average coal spot reference price was $117.02/tonne FOB Australia, Hard Coking Coal (FOB Australia HCC Peak Downs, PLATTS Index). The Company establishes optimum design and future operating cut-off grade based on its forecast of commodity prices and operating and sustaining capital costs. The cut-off grade varies from operation to operation and during the life of each operation in order to optimize cash flow, return on investments and the sustainability of the mining operations. Sustainability in turn depends on expected future operating and capital costs. The reserve base can vary from year to year due to the revision of mine plans in response to market and operational conditions, in particular market price. See the risk factor entitled “ArcelorMittal’s reserve estimates may materially differ from mineral quantities that it may be able to actually recover; ArcelorMittal’s estimates of mine life may prove inaccurate; and market price fluctuations and changes in operating and capital costs may render certain ore reserves uneconomical to mine”.

Tonnage and grade estimates are reported as ‘Run of Mine’. Tonnage is reported on a wet metric basis.

Iron ore reserve and resource estimate

The tables below detail ArcelorMittal’s estimated iron ore reserves and resources as at December 31, 2015. The classification of the iron ore reserve estimates as proven or probable and of the iron ore resource estimates as measured, indicated or inferred reflects the variability in the mineralization at the selected cut-off grade, the mining selectivity and the production rate and ability of the operation to blend the different ore types that may occur within each deposit. Proven iron ore reserve and measured mineral resource estimates are based on drill hole spacing ranging from 25m x 25m to 100m x 100m, and probable iron ore reserve and indicated mineral resource estimates are based on drill hole spacing ranging from 50m x 50m to 300m x 300m. Inferred mineral resource estimates are based on drill hole spacing ranging from 100m x 100m to 500m x 500m.

As at December 31, 2015 As at December 31, 2014 Proven ore reserves Probable ore reserves Total ore reserves Total ore reserves Business units Million tonnes % Fe Million tonnes % Fe Million tonnes % Fe Million tonnes % Fe Canada (excluding Baffinland) 2,034 28.7 106 27.7 2,140 28.6 2,129 28.7 Baffinland - Canada 272 66.0 105 65.4 377 65.8 379 65.8 Minorca - USA 122 23.6 4 22.7 126 23.5 134 23.4 Hibbing - USA 242 19.6 25 19.6 267 19.6 264 19.0 Mexico (excluding Peña Colorada) 42 31.6 37 29.7 79 30.7 119 27.3 Peña Colorada - Mexico 106 22.4 123 21.1 229 21.7 237 23.2 Brazil 59 64.6 22 51.1 81 60.9 148 55.6 Liberia 5 51.9 489 48.1 494 48.2 501 48.3 Bosnia 7 45.5 14 45.9 21 45.8 24 46.0 Ukraine Open Pit 126 33.4 48 33.5 174 33.4 198 34.0 Ukraine Underground 23 55.7 - - 23 55.7 24 55.0 Kazakhstan Open Pit 31 37.6 240 39.5 271 39.3 276 39.3 Kazakhstan Underground - - 27 45.1 27 45.1 28 45.0 Total 4,309 34.9 4,461 35.1

As at December 31, 2015 As at December 31, 2014 Measured & Indicated Measured & Indicated resources Inferred resources resources Inferred resources Million Million Business units tonnes % Fe Million tonnes % Fe tonnes % Fe Million tonnes % Fe Canada (Excluding Baffinland) 3,588 30.0 1,850 29.5 3,663 30.0 1,850 29.4 Baffinland - Canada 54 65.6 545 66.2 54 65.6 545 66.2 Minorca - USA 339 22.3 7 22.2 339 22.3 7 22.2 Hibbing - USA 130 20.1 - 17.5 260 18.2 1 16.2 Mexico (Excluding Pena Colorada) 113 27.7 42 28.3 63 28.0 71 27.0 Pena Colorada - Mexico 176 25.8 1 16.8 101 27.3 - - Brazil 306 40.7 77 37.8 246 38.7 77 37.8 Liberia 45 43.6 2,211 38.8 45 43.6 2,211 38.8 Bosnia 1 31.1 1 39.0 1 38.3 1 39.2 Ukraine Open Pit 507 33.4 - - 507 33.4 - - Ukraine Underground 350 36.5 353 32.4 370 36.8 353 32.4 Kazakhstan Open Pit 828 33.8 5 48.4 838 34.0 5 48.4 Kazakhstan Underground 445 51.2 30 49.6 446 51.2 30 49.6 Total 6,882 32.6 5,122 37.9 6,933 32.3 5,151 37.8 Mining 227

Supplemental information on iron ore operations

The table below provides supplemental information on the producing mines. As of December 31, 2015, ArcelorMittal Tebessa was classified as held for sale (see “Key transactions and events in 2015”) and therefore has been removed from the table below: 2015 Run of Mine Production (Million 2014 Saleable Production Estimated Mine Life Operations/Projects % Ownership In Operation Since Tonnes) 1 (Million Tonnes) 2 (Years) 3 Canada (Excluding Baffinland) 85 1976 70.7 25.9 30 Baffinland - Canada 46.08 2014 1.5 1.3 18 Minorca - USA 100 1977 8.9 2.7 14 Hibbing - USA 62.3 1976 29.8 8.1 10 Mexico (Excluding Peña Colorada) 100 1976 7.1 3.6 16 Pena Colorada - Mexico 50 1974 7.9 3.5 16 Brazil 100 1944 5.1 3.5 18 Liberia 85 2011 4.3 4.3 22 Bosnia 51 2008 2.7 2.1 8 Ukraine Open Pit 95 1959 23.6 10.1 7 Ukraine Underground 95 1933 0.9 0.9 13 Kazakhstan Open Pit 100 1976 5.1 2.0 30 Kazakhstan Underground 100 1956 1.1 0.9 14 1 Saleable production is constituted of a mix of direct shipping ore, concentrate, pellet feed and pellet products which have an iron content of As at December 31, 2015 As at December 31, 2014 approximately 65% to 66%. Exceptions in 2015 included the direct shipping ore produced in Bosnia, Ukraine underground and the Kazakh mines Proven ore reserves Probable ore reserves Total ore reserves Total ore reserves which have an iron content ranging between 55% to 60% and are solely for internal use at ArcelorMittal’s regional steel plants. The direct shipping Business units Million tonnes % Fe Million tonnes % Fe Million tonnes % Fe Million tonnes % Fe ore produced from Liberia had an average iron content of approximately 59% in 2015 while the sinter fines produced for external customers in Canada (excluding Baffinland) 2,034 28.7 106 27.7 2,140 28.6 2,129 28.7 Brazil from the Serra Azul operations averaged approximately 62% and the lumps averaged 60.5%. Baffinland - Canada 272 66.0 105 65.4 377 65.8 379 65.8 Minorca - USA 122 23.6 4 22.7 126 23.5 134 23.4 2 The estimated mine life reported in this table corresponds to the duration of the production file of each operation based on the 2015 year-end Hibbing - USA 242 19.6 25 19.6 267 19.6 264 19.0 iron ore reserve estimates only. The production varies for each operation during the mine life and as a result the mine life is not the total reserve Mexico (excluding Peña Colorada) 42 31.6 37 29.7 79 30.7 119 27.3 tonnage divided by the 2015 production. Peña Colorada - Mexico 106 22.4 123 21.1 229 21.7 237 23.2 Brazil 59 64.6 22 51.1 81 60.9 148 55.6 3 Represents 100% of production. Liberia 5 51.9 489 48.1 494 48.2 501 48.3 Bosnia 7 45.5 14 45.9 21 45.8 24 46.0 Changes in iron ore reserve estimates: 2015 versus 2014 Ukraine Open Pit 126 33.4 48 33.5 174 33.4 198 34.0 Ukraine Underground 23 55.7 - - 23 55.7 24 55.0 The Company’s iron ore reserve estimates have had a net decrease of 151 million metric tonnes of Run of Mine between December 31, 2014 and Kazakhstan Open Pit 31 37.6 240 39.5 271 39.3 276 39.3 2015. This decrease in reserves was mainly due to 169 million tonnes (“MT”) of mining depletion during 2015, the down grading of 61 million Kazakhstan Underground - - 27 45.1 27 45.1 28 45.0 tonnes of itabarite at the Company’s Andrade mine and a net downgrading of 37 million tonnes across the Mexican operations (excluding Peña Colorada). The main increases in reserves were an increase of 33 million tonnes at Hibbing, 76 million tonnes at AMMC. There were other minor Total 4,309 34.9 4,461 35.1 re-evaluations of the Company’s ore reserves. The average Fe grade decreased by 0.2% on an absolute basis mainly due to the downgrading of the Andrade itabarite.

However, the reserves mine life and quantities of concentrate and pellets produced from these reserve estimates are not materially impacted due to other adjustments made to mine plans and mining and processing recoveries.

Changes in measured and indicated iron ore mineral resource estimates

The 2015 versus 2014 measured and indicated mineral resource estimates have decreased between December 31, 2015 and 2014 by 51 million metric tonnes of run-of-mine mainly as a result of downgrades in , the USA (Hibbing), Canada (AMMC) and Ukraine and upgrades in Mexico (Pena Colorada & Las Truchas) and Brazil (Andrade).

Inferred mineral resource estimates for iron ore have decreased between December 31, 2015 and 2014 by 29 million metric tonnes mainly as result of a downgrade in Las Truchas. 228 Mining

Metallurgical Coal Reserve and resource Estimates

The table below details ArcelorMittal’s estimated metallurgical coal reserve and resource estimates as of December 31, 2015. The classification of coal reserve estimates as proven or probable and of coal resource estimates as measured, indicated or inferred reflects the variability in the coal seams thickness and quality, the mining selectivity and the planned production rate for each deposit. Proven coal reserve and measured coal resource estimates are based on drill hole spacing ranging from 50m x 50m to 500m x 500m and probable coal reserve and indicated coal resource estimates are based on drill hole spacing ranging from 100m x 100m to 1,000m x 1,000m. Measured coal resource estimates are based on drill hole spacing ranging from 200m x 200m to 2,000 x 2,000m.

As at December 31, 2015 As at December 31,2014 Proven Coal Reserves Probable Coal Reserves Total Coal Reserves Total Coal Reserves Wet ROM Wet Millions Wet Millions Recoverable Millions of Recoverable of Recoverable of Million Volatile Millions of Wet Recoverable Tonnes Million Tonnes Tonnes Million Tonnes Tonnes Tonnes Ash (%) Sulfur (%) (%) Tonnes Million Tonnes Princeton - USA 93 58 15 8 108 66 6.7 0.7 17 110 67 Karaganda - Kazakhstan 141 59 16 8 157 67 10.5 0.7 27 167 72 Total 265 133 8.6 0.7 22.1 277 139

As at December 31, 2015 As at December 31,2014 Measured & Indicated Measured & Indicated resources Inferred resources resources Inferred resources Wet Wet Wet Recoverable ROM ROM Millions Recoverable ROM Millions Recoverable ROM Millions Million Millions of Wet Recoverable of Tonnes Million Tonnes of Tonnes Million Tonnes of Tonnes Tonnes Tonnes Million Tonnes Princeton – USA 95 49 4 2 95 49 4 2 Karaganda - Kazakhstan 566 272 8 4 566 272 8 4 Total 661 321 12 6 661 321 12 6

Supplemental information on Metallurgical Coal operations

The table below provides supplemental information on the producing mines.

2014 Run of Mine Production 2014 Wet Recoverable Operations/Projects % Ownership In Operation Since (Million Tonnes) production (Million Tonnes) Estimated Mine Life (Years)1 Princeton - USA 100 1995 2.1 1.6 33 Karaganda - Kazakhstan 100 1934 10.5 4.6 12

1 The estimated mine life reported in this table corresponds to the duration of the production file of each operation based on the 2015 year-end metallurgical coal reserve estimates only. The production varies for each operation during the mine life and as a result the mine life is not the total reserve tonnage divided by the 2015 production. Changes in Metallurgical Coal Changes in coal resource estimates Cautionary note concerning and legal feasibility and it should Reserve Estimates reserve and resource estimates: not be assumed that all or part There were no changes in coal With regard to ArcelorMittal’s of an ‘inferred mineral resource’ The 2015 versus 2014 Metallurgical resource estimates between reported resources, investors are will ever be upgraded to a higher coal reserve estimates have 2015 and 2014. The reporting cautioned not to assume that category. decreased by 12 million tonnes of recoverable measured any part or all of ArcelorMittal’s of Run of Mine coal and 6 million and indicated coal resources estimated mineral deposits that tonnes of recoverable coal in Kazakhstan excludes the constitute either ‘measured between December 31, 2015 recoverable coal which in theory mineral resources’, ‘indicated and 2014 due to the annual could be used for metallurgical mineral resources’ or ‘inferred mining depletion of 12 million applications but which is sold and mineral resources’ (calculated in tonnes. Recoverable coal reserves used as thermal coal in practice accordance with the guidelines in Kazakhstan exclude the by ArcelorMittal at its steel plant set out in Canadian National recoverable coal which in theory facilities. Instrument 43-101) will ever be could be used for metallurgical converted into reserves. There applications but which is sold and is a particularly great deal of used as thermal coal in practice uncertainty as to the existence of by ArcelorMittal at its steel plant ‘inferred mineral resources’ as well facilities. as with regard to their economic