Management report 1

Annual Report 2016 2 Management report Management report 3

Table of contents

Management Report Company overview ______4 Business overview______5 Disclosures about market risks______28 Group operational structure______30 Key transactions and events in 2016______32 Recent developments______33 Corporate governance ______33 > Luxembourg takeover law disclosure______59 Additional information______60 Chief executive officer and chief financial officer’s responsibility statement______63

Consolidated financial statements for the year ended December 31, 2016______64 Consolidated statements of operations______65 Consolidated statements of other comprehensive income ______66 Consolidated statements of financial position______67 Consolidated statements of changes in equity______68 Consolidated statements of cash flows______69 Notes to the consolidated financial statements______70 Report of the réviseur d’entreprises agréé – consolidated financial statements______155

Risks related to the global economy and the steel industry ______157

Mining ______170 4 Management report

Company Overview several major research centers sells its steel products primarily Mining Value Chain: ArcelorMittal as well as strong academic in local markets and through its has a significant portfolio of raw History and development of the partnerships with universities and centralized marketing organization material and mining assets, as Company other scientific bodies. to a diverse range of customers well as certain strategic long- in approximately 160 countries term contracts with external ArcelorMittal is the world’s Against this backdrop, including the automotive, suppliers. In 2016, approximately leading integrated steel and ArcelorMittal’s strategy is to appliance, engineering, 55% of ArcelorMittal’s iron-ore mining company. Since the leverage four distinctive attributes construction and machinery requirements and approximately creation of ArcelorMittal in 2006 that will enable it to capture industries. The Company also 15% of its PCI and coal (through the combination of leading positions in the most produces various types of mining requirements were supplied from Mittal Steel Company N.V. and attractive areas of the steel products including iron ore lump, its own mines or pursuant to Arcelor) and continuing through industry’s value chain, from mining fines, concentrate and sinter feed, strategic contracts with third-party 2008, ArcelorMittal has pursued at one end to distribution and as well as coking, PCI and thermal suppliers. The Company currently a disciplined growth strategy, first-stage processing at the other: coal. has iron ore mining activities in with transactions in Argentina, global scale and scope; superior Brazil, Bosnia, Canada, Kazakhstan, Australia, Austria, Brazil, Canada, technical capabilities; a diverse As a global steel producer, the Liberia, Mexico, Ukraine and the Costa Rica, China, Estonia, France, portfolio of steel and related Company is able to meet the United States. The Company Germany, Italy, Mexico, Poland, businesses, one of which is mining; needs of different markets. currently has coal mining activities Russia, Slovakia, South Africa, and financial capabilities. Steel consumption and product in Kazakhstan and the United Sweden, Turkey, the United requirements clearly differ States. Kingdom, Uruguay, United Arab Geography: ArcelorMittal is the between developed markets Emirates, the United States and largest steel producer in the and developing markets. Steel In addition, ArcelorMittal produces Venezuela. Beginning in the Americas, Africa and Europe and consumption in developed substantial amounts of direct latter part of 2008, ArcelorMittal is the fifth largest steel producer economies is weighted towards reduced iron, or DRI, which is largely suspended mergers and in the CIS region. ArcelorMittal flat products and a higher value- a scrap substitute used in its acquisitions activity in light of has steel-making operations in added mix, while developing mini-mill facilities to supplement the deteriorating economic 18 countries on four continents, markets utilize a higher external metallics purchases. and market environment, and including 51 integrated and mini- proportion of long products and ArcelorMittal is also a significant sharply curtailed its investment mill steel-making facilities. As of commodity grades. To meet these producer of coke, which is activities, with the exception of the December 31, 2016, ArcelorMittal diverse needs, the Company produced from metallurgical coal acquisition (along with a partner) had approximately 199,000 maintains a high degree of and is a critical raw material for of Baffinland in 2011. employees. product diversification and seeks steel-making, satisfying 92% of opportunities to increase the its coke needs through its own Since September 2011, ArcelorMittal’s steel-making proportion of higher value-added production facilities. ArcelorMittal’s ArcelorMittal has been undergoing operations have a high degree products in its product mix. facilities have good access to a deleveraging process to reduce of geographic diversification. shipping facilities, including its indebtedness including Approximately 37% of its crude Automotive focus: ArcelorMittal through ArcelorMittal’s own 16 numerous divestments of non- steel is produced in the Americas, has a leading market share in its deep-water port facilities and core assets (see note 2.3 to the approximately 47% is produced in core markets in the automotive linked railway sidings. consolidated financial statements Europe and approximately 16% is steel business and is a leader ArcelorMittal has its own for the divestments made in 2015 produced in other countries, such in the fast-growing advanced downstream steel distribution and 2016). Despite ArcelorMittal’s as Kazakhstan, South Africa and high strength steels segment. business, primarily run through its overall strategy of deleveraging, Ukraine. In addition, ArcelorMittal’s ArcelorMittal is the first steel Europe segment. It also provides the Company completed an sales of steel products are company in the world to embed value-added and customized acquisition through a 50/50 joint spread over both developed its own engineers within an steel solutions through additional venture partnership of Calvert in and developing markets, which automotive customer to provide processing activities to meet 2014. have different consumption engineering support. The specific customer requirements. characteristics. ArcelorMittal’s Company begins working with ArcelorMittal’s success is built on mining operations, present in original equipment manufacturers its core values of sustainability, North and South America, Africa, (“OEMs”) as early as five years quality and leadership and the Europe and the CIS region, are before a vehicle reaches the entrepreneurial boldness that has integrated with its global steel- showroom, to provide generic empowered its emergence as the making facilities and are important steel solutions, co-engineering first truly global steel and mining producers of iron ore and coal in and help with the industrialization company. Acknowledging that a their own right. of the project. In November combination of structural issues 2016, ArcelorMittal introduced and macroeconomic conditions Products: ArcelorMittal produces a new generation of advanced will continue to challenge returns a broad range of high-quality high strength steels, including in its sector, the Company has finished and semi-finished steel new press hardenable steels and adapted its footprint to the new products (“semis”). Specifically, martensitic steels. Together, these demand realities, redoubled ArcelorMittal produces flat steel new steel grades aim to help its efforts to control costs and products, including sheet and automakers further reduce body- repositioned its operations with plate, and long steel products, in-white weight to improve fuel a view toward outperforming including bars, rods and structural economy without compromising its competitors. ArcelorMittal’s shapes. In addition, ArcelorMittal vehicle safety or performance. research and development produces pipes and tubes for capability is strong and includes various applications. ArcelorMittal Management report 5

Cautionary Statement Regarding Corporate and other information Business overview 40% over 2013. This led to stockists Forward-Looking Statements purchasing over six million fewer ArcelorMittal is a public limited The following discussion and tonnes in 2015, as compared to This annual report and the liability company (société analysis should be read in 2014, as they sought to reduce documents incorporated by anonyme) that was incorporated conjunction with ArcelorMittal’s inventory levels as steel prices reference in this annual report for an unlimited period under consolidated financial statements declined. Although underlying contain forward-looking the laws of the Grand Duchy of and related notes for the year steel demand continued to rise in statements based on estimates Luxembourg on June 8, 2001. ended December 31, 2016 2015, apparent demand declined and assumptions. This annual ArcelorMittal is registered at the included in this annual report. significantly, negatively impacting report contains forward-looking R.C.S. Luxembourg under number the Company’s deliveries and statements within the meaning B 82.454. Key factors affecting results of profitability. Apparent demand in of the Private Securities Litigation operations the United States was still down Reform Act of 1995. Forward- The mailing address and year-on-year in the first three looking statements include, telephone number of The steel industry, and the iron quarters of 2016 as inventories among other things, statements ArcelorMittal’s registered office are: ore and coal mining industries, continued to decrease and concerning the business, future which provide its principal demand for Oil and Country financial condition, results of ArcelorMittal raw materials, have historically Tubular Products (“OCTG”) in operations and prospects of 24-26, Boulevard d’Avranches been highly cyclical. They are particular, was still very weak. ArcelorMittal, including its L-1160 Luxembourg significantly affected by general However, the situation began to subsidiaries. These statements Grand-Duchy of Luxembourg economic conditions, as well as by improve during the fourth quarter usually contain the words Telephone: +352 4792-1 worldwide production capacity with apparent demand growing “believes”, “plans”, “expects”, and fluctuations in international year-on-year and as prices began “anticipates”, “intends”, “estimates” steel trade and tariffs. In particular, to increase toward year-end. or other similar expressions. For ArcelorMittal’s agent for U.S. this is due to the cyclical nature each of these statements, you federal securities law purposes is: of the automotive, construction, Demand dynamics in China should be aware that forward- machinery and equipment and have also substantially affected looking statements involve ArcelorMittal USA LLC transportation industries that are the global steel business. After known and unknown risks and 1 South Dearborn Street, 19th floor the principal consumers of steel. growing strongly since 2000, uncertainties. Although it is Chicago, Illinois 60603 In recent history, a telling example Chinese steel demand has started believed that the expectations United States of America of the industry cyclicality was the to decline as a result of weaker reflected in these forward-looking Telephone: + 1 312 899-3985 sharp downturn in 2008/2009, real estate sector construction statements are reasonable, there is after several strong years, as a and machinery production. This no assurance that the actual results ArcelorMittal shares are listed and result of the global economic crisis. decline in domestic demand or developments anticipated will traded (through a single order has led to a surge in Chinese be realized or, even if realized, book as from January 14, 2009) on The North American and steel exports, which more than that they will have the expected the Euronext European markets European markets together doubled between 2012 and effects on the business, financial (Paris and Amsterdam) (symbol accounted for over 60% of 2015, increasing by over 56 condition, results of operations or “MT”), are admitted to trading on ArcelorMittal’s deliveries in 2016 million tonnes to 112 million prospects of ArcelorMittal. the Luxembourg Stock Exchange’s and, consequently, weakness in tonnes in 2015. This increase in regulated market and listed on these markets has a significant Chinese exports was greater than These forward-looking statements the Official List of the Luxembourg impact on ArcelorMittal’s results. the growth in world ex-China speak only as of the date on which Stock Exchange (symbol “MT”) The onset of the Eurozone crisis steel demand over the same the statements were made, and no and are listed and traded on the caused underlying European period, and has had the effect of obligation has been undertaken Spanish Stock Exchanges (symbol steel demand to weaken in 2012 curtailing domestic production to publicly update or revise any “MTS”). ArcelorMittal shares are and, coupled with significant in countries outside of China. forward-looking statements made also listed and traded on the NYSE destocking, apparent steel Although Chinese exports in this annual report or elsewhere (symbol “MT”). demand fell by over 10%. Since continued to rise during the first as a result of new information, then, deliveries have increased half of 2016, up 10% year-on-year, future events or otherwise, except Internet site in each of the past four years, a rebound in domestic demand as required by applicable laws and and while 2016 demand is finally and the beginning of a capacity regulations. A detailed discussion ArcelorMittal maintains an Internet above 2011 levels, it remains reduction plan has led to exports of principal risks and uncertainties site at www.arcelormittal.com. around 22% below 2007 peak declining by 14% year-on-year which may cause actual results Information contained on or levels. Demand has increased in the second half and by 3% and events to differ materially from otherwise accessible through this since 2012 but imports into the for the year as whole. While the such forward-looking statements is Internet site is not a part of this European Union (“EU”) have risen majority of exports are directed included in the section titled “Risk annual report. All references in this more strongly, meaning domestic to Asia, and exports to the U.S. factors”. The Company undertakes annual report to this Internet site European deliveries have hardly are reduced due to the impact of no obligation to update or revise are inactive textual references to grown, impacting the ability of trade cases, a declining but still publicly any forward-looking this URL and are for information ArcelorMittal to serve one of significant proportion are being statements whether because of only. its largest markets. Underlying directed toward ArcelorMittal’s new information, future events, steel demand in North America core European markets in 2016. or otherwise, except as required increased strongly post-crisis, While not a sustainable long-term by securities and other applicable but recently apparent demand strategy, Chinese exports in 2015 laws. has been impacted by inventory were increasingly being sold at movements, particularly during prices below cost (CISA reported 2014 when inventories rose CISA mills losing an accumulated significantly as imports rose almost RMB 65 billion ($10 billion) in 6 Management report

2015), negatively impacting product in which the raw material upward trend in iron ore prices Confidence has been resilient prices and therefore margins in was used (average cost basis). In due (among other things) to following the United Kingdom’s many regions. Chinese producers recent periods, steel selling prices strong growth of seaborne supply vote to exit the EU in June 2016. continued to accumulate losses have tended to react quickly to or any decline in Chinese steel Negative policy interest rates, until April 2016 when domestic changes in raw material prices, demand would negatively impact combined with large-scale and export prices rose sharply due in part to the tendency of ArcelorMittal’s revenues and asset purchase programs by the as domestic demand surprised distributors to increase purchases profitability. European Central Bank, led to a producers on the upside, of steel products early in a rising noticeable easing of borrowing increasing capacity utilization. cycle of raw material prices and Economic environment1 costs and generally had a positive During the second half of 2016, to hold back from purchasing as effect on lending flows. However, demand continued to support raw material prices decline. With Global growth in 2016 is estimated a rebound in oil prices, from higher capacity utilization and respect to (b), as average cost basis at a post-2008 global economic their low in early 2016, implies an improved domestic spread is used to determine the cost of crisis low of 2.2 percent as stagnant diminished support to real income of steel prices over raw material the raw materials incorporated, global trade, subdued investment, and private consumption growth. costs, which translated into higher inventories must first be worked and heightened policy uncertainty Labor market and credit conditions export prices. through before a decrease in raw marked another difficult year for continued to improve in 2016. material prices translates into the world economy. Although Employment reached pre-crisis Unlike many commodities, steel decreased operating costs. In fiscal stimulus in major economies, levels, and the EU unemployment is not completely fungible due some of ArcelorMittal’s segments, if implemented, may boost global rate ebbed further (falling to 8.3% to wide differences in shape, in particular Europe and NAFTA, growth above expectations, risks in November 2016, from 9.0% chemical composition, quality, there are several months between to growth forecasts remain tilted in November 2015), albeit from specifications and application, raw material purchases and sales to the downside, especially due to elevated levels and with wide all of which affect sales prices. of steel products incorporating policy uncertainty. cross-country variations. Despite Accordingly, there is still limited those materials. Although this ongoing monetary policy easing, exchange trading and uniform lag has been reduced recently by Growth in the United States headline and core inflation remain pricing of steel, whereas there is changes to the timing of pricing slowed markedly, from 2.6 significantly below target. Fiscal increasing trading of steel raw adjustments in iron ore contracts, percent in 2015 to an estimated policy was slightly expansionary in materials, particularly iron ore. it cannot be eliminated and 1.6 percent in 2016, held back 2016 partly as a result of refugee Commodity spot prices can vary, exposes these segments’ margins by weak exports, a continued related outlays. which causes sale prices from to changes in steel selling prices in drawdown in inventories, and a exports to fluctuate as a function the interim (known as a “price-cost deceleration in private investment. Growth in China is estimated of the worldwide balance of squeeze”). In addition, decreases in Activity rebounded strongly to have slightly decelerated to supply and demand at the time steel prices may outstrip decreases after a weak first half of 2016, 6.7 percent in 2016. As part of sales are made. in raw material costs in absolute and a further tightening of labor ongoing economic rebalancing, terms, as has occurred numerous markets led to a slow increase in consumption growth has been ArcelorMittal’s sales are made on times over the past few years, for wages and supported continued strong, while investment growth the basis of shorter-term purchase example in the second quarter of gains in real disposable income. has continued to moderate orders as well as some longer-term 2013 and fourth quarter of 2015. Despite relatively subdued from the post-crisis peak. Fiscal contracts to certain industrial underlying growth, the economy and credit-based stimulus customers, particularly in the The Company’s operating has continued to move closer measures supported growth in automotive industry. Steel price profitability has been particularly to the U.S. Federal Reserve’s 2016, focusing on infrastructure surcharges are often implemented sensitive to fluctuations in raw full employment and inflation investment and on efforts to on steel sold pursuant to long- material prices, which have objectives. The unemployment stimulate household credit. term contracts in order to recover become more volatile since the rate remained slightly below 5 Credit growth, which has been increases in input costs. However, iron ore industry moved away percent in most of the second moderating since late 2015, spot market steel, iron ore and coal from annual benchmark pricing half of 2016. The Federal Reserve stabilized during 2016 but prices and short-term contracts are to quarterly pricing in 2010. raised short-term interest rates in remained well above the pace more driven by market conditions. Iron ore prices were relatively December as expected. Long- of nominal GDP growth. On the stable in 2013, averaging $135 term interest rates increased back of a continued real estate One of the principal factors per tonne (“/t”), but fell sharply substantially and the dollar has boom, loans to households affecting the Company’s operating in 2014, reaching lows of $68/t appreciated in real effective accounted for an increasing profitability is the relationship in December 2014. Volatility on terms, mostly driven by an share of credit extension in 2016. between raw material prices and steel margins aside, the results of anticipated shift in the U.S. policy Partly as a result of real estate steel selling prices. Profitability the Company’s mining segment mix. Specifically, U.S. fiscal policy lending, housing prices reached depends in part on the extent (which sells externally as well is projected to become more new heights, especially in major to which steel selling prices as internally) are also directly expansionary, with stronger cities, although they showed exceed raw material prices, and, impacted by iron ore prices, which future demand implying more signs of stabilization in recent in particular the extent to which were weaker again in 2015, ending inflationary pressure and a less months, reflecting tighter property changes in raw material prices are the year at $40/t and averaging gradual normalization of U.S. regulations. Despite some easing, passed through to customers in only $56/t. Iron ore prices have monetary policy. capital outflows from China steel selling prices. Complicating since rebounded from $40/t remained sizable and continued factors include the extent of the during December 2015 to an The EU GDP growth slowed from to put downward pressure on time lag between (a) the raw average of $52/t in the first half 2.1 percent in 2015 to 1.8 percent the currency. During 2016, the material price change and the steel of 2016, increasing to $80/t in in 2016, as both domestic demand renminbi depreciated around 7 selling price change and (b) the December 2016 and an average and exports lost momentum. percent against the U.S. dollar and date of the raw material purchase of $65/t during the second half 1 GDP and industrial production data around 5 percent in nominal trade- and of the actual sale of the steel of the year. A reversal of the 2016 and estimates sourced from Oxford weighted terms. These movements Economics January 13, 2017 Management report 7

notwithstanding, the renminbi Steel production2 year due to a weaker first quarter. Steel prices3 remains markedly above its 2005 In China, production declined level in trade-weighted terms and After declining sharply during significantly during January and Steel prices for Flat products broadly in line with fundamentals. 2009 to 1.2 billion tonnes, world February but a pick-up from March in Europe remained relatively crude steel production grew led to output declining only 0.6% stable in euro terms during the Although Brazil and Russia suffered each year to 1.67 billion tonnes year-on-year during the first half first quarter of 2015 against 2014 a second consecutive year of in 2014, driven by strong Chinese of 2016. Most other major steel fourth quarter averages, despite recession in 2016, they have been growth, which grew to over 822 producing regions also recorded a continuous erosion of raw material showing signs of improvement. million tonnes and accounted for decline in production during the costs. A balanced market, low In Russia, the stabilization in 50% of global steel production. first half of 2016. EU28 steel output interest rates and steady demand oil prices and the authorities’ World crude steel production decreased by 6.2% to around for durables, coupled with the policy response - exchange rate then fell in 2015, for the first time 165.5 million tonnes annualized weak euro, helped improve the adjustment, banking sector since 2009, as steel consumption even though consumption steel market in the first quarter of capital and liquidity injections - in developed and key emerging recorded positive growth; as the 2015. In Northern Europe the price improved the short-term outlook, markets declined. Amid depressed incremental demand continued to for hot rolled coil (“HRC”) improved helped restore confidence and demand conditions, the availability be satisfied by imports. Significant slightly from January to March, to stabilized the financial system. In of low priced imports, particularly declines also occurred in South an average of €405-413 ($458-467) Brazil, a rebound in confidence from China, in which domestic America, which had a fall in output per tonne (/t) for the first quarter following moves to alleviate demand also declined, forced of 13.7%, Africa, and to a lesser of 2015. Prices saw a similar trend political uncertainty, combined many producers across the world extent in developed Asia, where in Southern Europe, with spot HRC with improved terms of trade, to curtail output. Global steel production decreased by 2.3% improving to €395-404 ($446-456)/ helped to slow the pace of output production is estimated to have year-on-year in the first half of t, while a weaker euro impacted contraction. fallen by 3.2% to 1.62 billion 2016. In comparison, production the realization of this improvement tonnes in 2015, with the decline in NAFTA, CIS and the Middle East in USD terms both in Northern and Global industrial production (“IP”) in production accelerating in the was broadly stable, while output Southern Europe by roughly -$50/t growth slowed to 1.5% year-on- second half of 2015, reflecting continued to increase year-on-year quarter on quarter. Economic year in 2016, after growing by worsening global demand in India. conditions remained good in 1.8% in 2015. IP in Organization conditions over the period, Europe during the second quarter for Economic Co-operation and especially in China and increased The second half of 2016 saw of 2015, with strong bookings Development (“OECD”) countries destocking as prices fell. a rebound in steel production in industry and auto. Despite eased to just 0.3% year-on-year globally, with positive year-on-year this, steel prices saw consistent in 2016, after growing by 0.8% in North American steel production growth in all major producing weakening on a monthly basis 2015. fell by 8.5% in 2015 mainly due regions except South America. from April to June, due mainly to to a decline in U.S. output, which Indeed, global production grew pressure from imports. Spot HRC Global apparent steel tumbled by 10.5% as stockholders 0.8% year-on-year during 2016, averaged at €398-405 ($440- consumption (“ASC”) returned and end-users sought to correct as a 3.3% year-on-year growth in 448)/t in Northern Europe and at to growth in 2016 after falling by inventories which had grown in the second half, more than offset €385-393 ($425-435)/t in Southern 2.4% year-on-year in 2015, the 2014 when total steel imports the declines seen earlier in the Europe. Aggressive domestic first decline since 2009 and due rose by almost 40%. In the CIS, year. Chinese steel production offers at the beginning of the third mainly to a 4.5% decline in Chinese output also fell (4.3% in 2015 growth accelerated through the quarter, coupled with low-priced consumption in 2015. The 2016 year-on-year) as a recession year as government stimulus and imports from Turkey, Russia and global ASC is estimated to have lowered domestic demand an improvement in the real estate China, kept prices in Europe under grown just over 1% as Chinese and overwhelmed increased market drove steel production pressure, and HRC spot saw a demand surprised on the upside, international competitiveness growth of over 3% in the second drop of approximately €27 ($27)/t growing approximately 1.3%, from weaker domestic currencies. half of 2016 and 1.2% for the quarter on quarter, in Northern compounding expectations of South America also saw a 2.5% full year. EU28 steel production Europe, to €372-378 ($414- another year of decline. Elsewhere, decline in production as Brazilian improved in the second half of 420)/t and €37/$38/t, in Southern world-ex-China ASC grew at a steel demand faltered by around 2016 as well, with output growing Europe, to €348-357 ($387-397)/t. similar rate (1.2% year-on-year), 15% due to economic issues facing 2.2% year-on-year, albeit not Eurozone consumer confidence as significant declines in CIS (4%) the country. In Asia, production enough to offset the weakness dropped to a nine-month low and Latin America (11%, with Brazil decreased by 2.3%, mainly due seen during the first half, leaving in October, while the gap in the declining 12.5% to 13.5%) were to slower growth in China and a production down 2.3% in 2016 offer price for steel in northern vs. offset by growth in other regions, 5% decline in Japanese output. as a whole. Although output southern Europe continued to feed particularly in the EU (almost 2%), In India, however, production in NAFTA grew year-on-year in expectations for price declines. Asia ex-China (4%) and Middle East increased by 2.6% and elsewhere, 2016, this was entirely driven by HRC spot further weakened during (3%). NAFTA saw a small decline Australia/New Zealand also growth in Mexico (an increase of the fourth quarter to €325-335 in demand as growth in Canada recorded a 4.6% rise in production. 4.3%) and Canada (an increase of ($357-368)/t in Northern Europe and Mexico was offset by weaker 1.6%), whereas steel production and to €293-304 ($322-333)/t in demand in the U.S., particularly Global crude steel production in the U.S. declined by 0.3% to Southern Europe. pipes and tubes. Demand has picked up during the second 78.6 million tonnes, as domestic improved through 2016, with quarter of 2016 while output demand remained weak. India saw Steel prices for flat products in global ASC declining an estimated remained down 1.5% year-on- the fastest growth of the top ten Europe improved in euro terms 3% year-on-year during the first year during the first half of the producing countries globally, with during the first quarter of 2016 quarter of the year, slow growth crude steel production rising 7.4% against the December 2015 levels. 2 Global production data is for all returning in the following two 66 countries for which production to 95.6 million tonnes in 2016. In Northern Europe the price for quarters and accelerating during data is collected by the World steel, hot rolled coil (“HRC”) improved the fourth quarter of the year. accounting for around 99% of global steel production. 3 Source: Steel Business Briefing (SBB) 8 Management report

from January to March, to reach $541-559/t in April, and continuing a strong rebound by the stock price drop in June to €467-477 an average range of €325-334 to strengthen to an average range market following the central bank’s ($525-536)/t. The second quarter ($358-368) per tonne (“/t”) for the of $691-704/t in June 2016, for a announcement of a cut in the of 2016 ended with an average first quarter of 2016. Prices saw a quarterly average range of $631- reserve requirement ratio by 0.5%. price improvement against the similar trend in Southern Europe, 648/t, or a quarter-on-quarter This resulted in a significant price first quarter of approximately with spot HRC improving to an improvement of approximately increase, which reached a peak €55/t for the medium sections average range of €296-310 ($326- $184/t. The average HRC price for in China in April 2016, when the and approximately €99/t for 341)/t for the first quarter of 2016. the first half of 2016 in the United spot HRC price averaged $380/t the rebar. The average medium The second quarter of 2016 saw States was $547/t as compared VAT excluded. The remaining two sections price for the first half of a sharp increase in international to an average of $541/t in the months of the second quarter of 2016 in Europe was €481 ($537)/t steel prices, led by China; spot HRC first half of 2015. The spot HRC 2016 saw domestic prices decline, as compared to €521 ($582)/t for averaged at a range of €407-419 prices in the United States started with the spot HRC at an average the first half of 2015. The average ($459-473)/t in Northern Europe to decrease in July 2016 and range of $348-350/t VAT excluded rebar price in Europe for the first and at a range of €394-405 continued this downward trend in May 2016, and $327-329/t half of 2016 was €404 ($452)/t as ($445-457)/t in Southern Europe, until October 2016. During the VAT excluded in June 2016. The compared to €420 ($469)/t for corresponding to an average third quarter of 2016, the HRC average spot HRC price for the the first half of 2015. Long steel increase quarter-on-quarter of price averaged $650/t (an increase second quarter of 2016 was a products prices weakened during approximately €84 ($103)/t in of $11/t quarter-on-quarter), with range of $351-354/t VAT excluded, the third quarter of 2016, with the North, and €97 ($118)/t in an average of $600/t in September corresponding to a quarter- medium sections at an average Southern Europe. The average 2016. The spot HRC prices in the on-quarter improvement of of €511 ($571)/t, and rebar at an HRC prices for the first half of 2016 United States reached a low of an approximately $71/t. The average average of €440 ($492)/t. Both the were at €371 ($415)/t in Northern average range of $526-552/t in spot HRC price for the first half medium sections and rebar prices Europe and €351 ($392)/t in October 2016, but then sharply of 2016 in China was $317/t VAT reached a low in October 2016, Southern Europe, as compared increased towards the end of the excluded as compared to $344/t and started recovering through to the first half of 2015 which year, reaching an average range VAT excluded in the first half of year end, reaching an average of was at €405 ($453)/t in Northern of $641-655/t in December. The 2015. In China, spot HRC prices €511 ($539)/t and €454 (479)/t Europe, and €394 ($441)/t in fourth quarter of 2016 average during the third quarter of 2016 in December, respectively. The Southern Europe. Steel prices for spot HRC price in the United States reached an average of $348/t VAT average price for medium sections flat products in Europe started was $586/t, or a quarter–on- excluded, representing a decrease in the fourth quarter of 2016 was softening at the beginning of the quarter decrease of approximately of $4/t quarter-on-quarter. Prices €488 ($528)/t and €425 ($458)/t third quarter due to the summer $64/t. The average spot HRC improved throughout the fourth for rebar. The average medium seasonal effect, reaching a low at price in the second half of 2016 in quarter of 2016, reaching an sections price in Europe for the €414-420 ($458-466)/t in Northern the United States was $618/t as average of $465/t VAT excluded second half of 2016 was €499 Europe and €380-400 ($426-449)/t compared to an average of $467/t in December, and an average ($549)/t as compared to €498 in Southern Europe, but improving in the second half of 2015. of $423/t VAT excluded for the ($549)/t for the second half of towards the end of the quarter quarter, corresponding to an 2015. The average rebar price in reaching an average price range of In China, average spot HRC prices improvement of $74/t quarter- Europe for the second half of 2016 €422-431 ($471-481)/t in Northern increased during the first quarter on-quarter. The average spot HRC was €432 ($475)/t as compared to Europe and €394-410 ($440-458)/t of 2016 compared to the fourth price for the second half of 2016 in €389 ($430)/t for the second half in Southern Europe for the third quarter of 2015. Domestic HRC China was $385/t VAT excluded as of 2015. quarter of 2016. Prices continued prices went up from the January compared to $260/t VAT excluded to increase until year end with HRC average range of $262-264/t in the second half of 2015. In Turkey, even though the averaging at a range of €493-502 VAT excluded, to $309-312/t VAT average first quarter 2016 price of ($532-542)/t in Northern Europe excluded, in March 2016, setting During the first quarter of 2016, imported scrap HMS 1&2 at $194/t and €468-480 ($505-518)/t in the first quarter average range long steel products saw a quarter- CFR showed a small improvement Southern Europe, for the fourth at $280-283/t VAT excluded, as on-quarter price decline in Europe, of about $6/t against the average quarter of 2016. The average HRC compared to an average range of with medium sections averaging of the fourth quarter 2015, the prices for the second half of 2016 $250-252/t in the fourth quarter of at a range of €450-458 ($496- average price of March 2016 at were at €462 ($507)/t in Northern 2015. Beginning March 2016, the 505)/t, as compared to €474-486 $218/t CFR represented a month- Europe and €438 ($480)/t in imported 62% Fe Iron Ore price ($519-532)/t in the fourth quarter on-month increase of about $40/t. Southern Europe as compared to significantly increased, starting of 2015. There was a similar trend The Turkish rebar export price €353 ($389)/t in Northern Europe, with an increase of approximately in rebar prices, which were at followed a similar trend, with the and €326 ($360)/t in Southern $10 per dry metric tonne unit (“/ an average range of €352-358 average price range for the first Europe in the second half of 2015. dmt”) occurring in one single ($388-395)/t during the first quarter of 2016 at $333-337/t day, after billet prices in Tangshan quarter of 2016, corresponding FOB, against $331-337/t FOB for In the United States, spot HRC had surged by about $55/t. This to a quarter-on-quarter price the fourth quarter of 2015. The prices increased during the first increase then spread across drop of approximately €15/t. This March 2016 export price of Turkish quarter of 2016, from an average other steel products, which also downward trend has reversed rebar reached an average range in December 2015 of $412/t, improved by $40-50/t. The main during the second quarter of of $361-365/t FOB (an increase up to an average of $442/t in drivers for these increases were 2016, with medium sections of $44/t month-on-month). This January 2016 and later to an linked to steel mills potentially improving from €467-479 ($530- upward trend continued during average of $471/t in March 2016, bringing forward production 543)/t in April, up to €538-550 the first two months of the second for a quarterly average of $456/t ahead of enforced production ($603-617)/t in June. Rebar prices quarter of 2016 with the export in the first quarter of 2016. The cuts during Tangshan’s scheduled also improved from an average rebar price from Turkey reaching second quarter of 2016 had a hosting of an international range of €389-400 ($441-454)/t in an average range of $451-457/t strong start, with HRC prices horticultural exposition (from April, up to €487-501 ($551-567)/t FOB in April, and $472-479/t FOB reaching an average range of April 29 to October 16, 2016), and in May, but was followed by a in May. In June 2016, rebar prices Management report 9

reduced to an average range of ASC in the U.S. declined during supply and demand dynamics. versus previous restrictions to work $395-403/t FOB Turkey. The second 2016, due to continued destocking Since most of the minerals used in of 276 days, logistical issues due to quarter average export price for and a significant fall in energy the steel-making process are finite floods, which started in June 2016 Turkish rebar was $438-445/t FOB, pipe demand. Conditions have resources, they may also rise in and recovered in November 2016, corresponding to a substantial improved and domestic prices response to any perceived scarcity disrupted the flow of material to increase of approximately $106/t have rallied for delivery in the first of remaining accessible supplies, the final consumers. quarter-on-quarter. The average quarter of 2017. The improvement combined with the evolution of rebar export price from Turkey in in the HRC spread was mainly the pipeline of new exploration As for pricing mechanisms, since the first half of 2016 was $388/t down to tight domestic supply projects to replace depleted 2012, quarterly and monthly FOB as compared to the first half and limited availability of imports. resources. pricing systems have been the of 2015, which was at $451/t FOB. As ASC is expected to rise in main type of contract pricing The third quarter of 2016 average 2017, domestic production is also The spot markets for iron ore and mechanisms, but spot purchases export price for Turkish rebar was expected to increase as some coking coal were in a downward also appear to have gained a $375-382/t FOB, corresponding domestic capacity comes back price trend from the first half of greater share as steelmakers have to a decrease of approximately online, and imports remain subject 2014 until the beginning of 2016. developed strategies to benefit $63/t quarter-on-quarter. In the to anti-dumping duties. In the EU, In 2015, the downward trend from increasing spot market fourth quarter, the export prices of steel demand continues to grow gained momentum with a slower liquidity and volatility. In 2015 and Turkish rebar improved, averaging slowly but imports have taken a growth rate in China, recession in 2016, the trend for using shorter- at $406-413/t for the quarter. The larger share of demand over the developing economies such as term pricing cycles continued. average rebar export price for the past couple of years. However, Brazil and Russia, and continued second half of 2016 from Turkey mills output should improve robust seaborne supply from Iron ore was $394/t FOB as compared to slightly in the first half of 2017 as major miners. Between the $361/t FOB for the second half of underlying demand from steel beginning of 2014 and the end In the first half of 2014, iron ore 2015. consuming industries continues of 2015, iron ore and coking coal spot prices declined by 31% from to grow and import growth slows prices decreased by 61% and 37% $134.50 per tonne on January 1, Current and anticipated trends in due to recent and potentially new respectively (Platts Q1-2014 vs. 2014 to $93.25 per tonne on June steel production and prices trade protection, particularly flat Q4-2015). 30, 2014. This downward price products. trend was due mainly to increasing Steel output continued to decline Iron ore and coking coal prices supply in the seaborne market in most major steel producing Overall, ArcelorMittal expects increased in 2016. Chinese crude and financial weakness in the regions during the first half of world ex-China ASC growth to steel production recovered in Chinese steel sector. Credit market 2016 but the declines have been pick-up in 2017 as both NAFTA and the second quarter of 2016 and tightness combined with stretched much less severe than during the South American markets return further stabilized in the third cash flows at Chinese mills resulted second half of 2015 as global steel to growth, and demand in the CIS quarter of 2016 with support in a strong destocking trend at demand stabilized year-on-year stabilizes this year after contracting from the construction market. Chinese mills from the beginning in the second quarter of 2016. As during 2016. This should enable The iron ore market recovered of the year through the end of the expected, the second half of 2016 some improvement in utilization to $48 per tonne, $56 per tonne second quarter. Rising iron ore saw steel production volumes and support the spread of steel and $58 per tonne in the first, import inventory at Chinese ports grow year-on-year in both China prices over raw material costs. second and third quarter of 2016, was reflective of stronger seaborne (+3.7%) and the world ex-China However, globally, ArcelorMittal respectively (quarterly averages), supply while real iron ore demand (+2.9%) as underlying demand does not expect to see much of an with the fourth quarter of the in the Chinese off-shore market improved and destocking waned. improvement in ASC, as Chinese year registering a 21% increase in remained relatively stable. demand is expected to stabilize or average price to $70.7 per tonne In China, in 2016, steel production decrease slightly (with expected compared to the third quarter. The downward trend continued began increasing year-on-year growth ranging from 0% to a Hard coking coal (“HCC”) prices and reached $66-72 per tonne in from March after a very weak start decrease of 1%) after growth of increased significantly in the third late December 2014 on continued to the year. ArcelorMittal does not around 1.3% in 2016. However, we quarter of 2016 as spot prices structural iron ore oversupply expect further steel production expect further capacity elimination rose from $92 per tonne at the and persistent strains in the credit growth in 2017; it expects instead to maintain improving utilization beginning of July to $212.50 per market in China. The average spot that a combination of stable to rates in China during 2017. tonne on September 29, 2016. price for the fourth quarter of 2014 decreased domestic demand and This rebound was largely driven was $74.28 per tonne, or 18% slightly weaker exports will cause Raw materials by a Chinese domestic shortage of lower than the previous quarter production to decline slightly in coking coal as well as maintenance at $90.21 per tonne. As of end of 2017. The Chinese HRC spread The primary raw material inputs for and operational production issues January 2015, iron ore spot prices (difference between raw material a steelmaker are iron ore, coking in Australian coking coal mines were trading in the range of $62- costs and finished steel prices) coal, solid fuels, metallics (e.g., during the period. The price 69 per tonne (January 15-30, 2015, fell from a peak of $210 per tonne scrap), alloys, electricity, natural rebound was further accentuated CFR China, Platts index, 62% Fe). (“/t”) in April to $150-160/t in May gas and base metals. ArcelorMittal during the fourth quarter of 2016 The downward trend of iron ore and June 2016 as idled capacity is exposed to price volatility in when a maximum of $310 per spot prices persisted throughout came back on stream. However, a each of these raw materials with tonne was reached on November 2015, with quarterly averages rebound in domestic demand and respect to its purchases in the spot 8, 2016 and the quarter closed spot prices of $62.40 per tonne low inventory levels subsequently market and under its long-term with a spot average at $266.15 per in the first quarter of 2015, pushed spreads (and therefore supply contracts. In the longer tonne. Despite a gradual increase $58.45 per tonne in the second prices) back to $170/t in December term, demand for raw materials is in Chinese coal production at the quarter, $54.90 per tonne in the and into January 2017. expected to continue to correlate mine level with selected mines third quarter and $46.65 per closely with the steel market, with being temporarily allowed to tonne in the fourth quarter (CFR prices fluctuating according to work at an annual rate of 330 days China, Platts index, 62% Fe). This 10 Management report

downward trend was due to Coking coal spot prices reached a low of $79 Scrap continued structural oversupply, per tonne (FOB Australia) while resilience of high cost mines The coking coal spot market and contract settlement for the same Scrap prices decreased (in China and seaborne), lower quarterly contracts settlements quarter was at $93 per tonne (FOB throughout 2016 in Europe, mining costs at major supply were negatively affected in 2014 Australia). Contract settlement where both Eurofer and German regions (supported by currency and 2015 by the combined effects further reduced in the fourth Wirtschaftsvereinigung (“WV”) depreciation, e. g. in Australia of strong Australian coking coal quarter of 2015, where contract indexes were discontinued as and Brazil), lower fuel and freight production performance, a mild prices settled at $89 per tonne of January 1, 2016. The German costs as well as bearish sentiment wet season in Australia and weaker (FOB Australia), while spot prices suppliers’ index (“BDSV”) is now about Chinese steel demand. In seaborne demand from China. were trading in the range of $72- used and converted into Delivered this context of oversupply, the Moreover, in the same period 77 per tonne (December 1 through at Place (“DAP”), in order to be Samarco tailings ponds dam there was an increase of seaborne 31, 2015, FOB Australia HCC Peak comparable to WV. In Europe, collapsed in November 2015 supply from new regions, notably Downs Platts index). the average price of E3 (old thick) resulting in a halt of operations (a Russia and Mozambique, as well scrap in 2016 for the full year was 30 million tonne pellet capacity as productivity improvement and In 2016, the spot price (Platts €195 per tonne (WV or BDSV), producer); however, it did not cost reductions at major producers Premium LV FOB Australia index) which was 10.1% lower than in affect the plummeting iron ore also supported by depreciated traded on average at $76.60 per 2015 when the average price was price trend, which continued local currencies and lower diesel tonne in the first quarter with the €217 per tonne, while in 2014 it decreasing through the end of prices. This downward trend contract price settling at $81 per was €263 per tonne. In NAFTA, the 2015. prevailed despite some supply tonne for the same quarter; then average price of scrap in 2016 was closures, e.g. major seaborne the second quarter of 2016 had a $208 per tonne (HMS 1 Domestic Iron ore prices bottomed out suppliers of coking coal from contract settlement fixed at $84 MidWest), which was 4.6% lower during the first quarter of 2016, Australia, the United States, and per tonne with the spot average than in 2015 when the average after reaching $39.25 per tonne Canada announced the closure of for that quarter at $91.40 per price was $218 per tonne, and in (CFR China Platts Index 62% Fe) on their least cost efficient mines in tonne while the third quarter had a 2014 it was $364 per tonne. During January 14, 2016 and averaging order to adjust to weaker seaborne contract price settled at $92.50 per 2016, Turkish scrap import prices $48.30 per tonne for first quarter demand and to remain cost tonne and the spot index traded decreased by 2.6% compared to of 2016. During the second quarter competitive. These supply closures between $92 and $96 per tonne 2015 (from $234 in 2015 to $228 of 2016, the average price was were more than offset by lower for the first 15 days but averaged in 2016 per tonne: MB HMS 1&2 $55.66 per tonne and the period Chinese imports, throughout 2014- $136 per tonne for the third 80:20 CFR Turkey, North European was marked by high volatility, 2015. Chinese coking coal imports quarter. During the fourth quarter origin), after decreasing by 34% with a peak at $70.50 per tonne continued their decline during the of 2016, the spot price reached a in 2015 compared to an average on April 21, 2016 and a low of period (a decrease of 21% year-on- maximum of $310 per tonne on price of $352 per tonne in 2014. $49.30 per tonne on June 2, 2016. year in 2014 and a decrease of 21% November 8, 2016 and decreased For the third quarter of 2016, the for January to November 2015 vs. through the closing of the year Scrap imports into Turkey, after average was $58.60 per tonne January to November 2014, Tex to $230 per tonne on December a decrease of 14.7% in 2015 as with a slight downward trend Report January 5, 2016), while 30, 2016, the average spot price compared to 2014, increased in throughout September. During the an increased share of imports for the fourth quarter of 2016 was 2016 by 6.0% as compared to fourth quarter of 2016, CFR China, from Australia at the expense of $266.10 per tonne with quarterly 2015. This was, to some extent, a Platts’ Index 62% Fe, increased other seaborne suppliers, mainly contract prices settled at $200 per consequence of Turkey’s drop in from a minimum of $54.85 per from the U.S. bearish market tonne. The highly volatile spot sourcing iron ore based materials tonne on October 4, 2016 and price forecasts, combined with index over the second half of 2016 (semifinished: slabs and billets), reached a maximum of $83.95 successive loss-making quarters was influenced by the Chinese which fell by 5.3%. Imports of per tonne on December 12, 2016, partially originated from high domestic supply reduction billets were sourced from Russia, the average for the fourth quarter debt service obligations (following (originating from weather/logistic Ukraine and China, at similar was of $70.76 per tonne and was past acquisitions), forced several issues combined with regulations proportions. The world’s second marked by high volatility and U.S. coal producers, to file chapter issued by the Chinese government and third scrap importers were bullish market sentiment driven 11 bankruptcy in 2015 in order on lower mining working days, India (41% of Turkish imports) by higher steel prices as well as to restructure their finances and from an annual rate of 330 days and South Korea. China takes closure announcements by the operations. per year to a lower rate at 276 eleventh place and decreased Chinese authorities in steelmaking days, with temporary relief as its imports of scrap by 14.3% based on obsolete induction The first half of 2015 experienced described above) as well as in 2016 as compared to 2015, furnaces using mostly scrap as raw sharp spot price and contract several maintenance and mining after decreasing 9.2% in 2015 as materials. reference price reductions, with operational issues in Australian compared to 2014. This is mainly a widening gap in the second coking coal mines during that due to a preference for iron ore, ArcelorMittal has continued to quarter between both references period. plus the use of domestic scrap (no leverage its diversified supply (spot indexes and quarterly exports recorded in 2014, 2015 portfolio and global footprint, contract settlement), as quarterly ArcelorMittal has continued to or 2016). Regarding countries as well as mitigating the effect contract references settled at leverage its full supply chain and exporting scrap, the United States of consolidation among supply $117 per tonne (FOB Australia) diversified supply portfolio as well continued to take the lead but sources in 2016, mainly due to and $109.50 per tonne for the as contractual terms flexibility with a continuous downward the absence of Samarco in the first and second quarters of to mitigate regional supply trend to 11.6 million tonnes in seaborne market. 2015, respectively. Spot prices disruptions and also mitigate part 2016, after declining to 13.0 million for such quarters averaged $104 of the market price volatility. tonnes in 2015 from 15.3 million per tonne and $87 per tonne, tonnes in 2014, as a result of better respectively. In the third quarter economic activity, which is to say, of 2015, premium coking coal strong demand, plus a favorable Management report 11

euro to U.S. dollar exchange rate, The relatively low scrap prices have tonne on January 12, 2016 and at approximately $39/MWh, a 6% discouraging traditional exports to made the EAF process profitable the high was $2,907 per tonne on increase compared to 2016 spot Turkey. as compared to the iron ore based November 28, 2016. The global power prices. processes, since September 2016. zinc metal market was in a deficit In Europe, the WV index has Subsequently, increased scrap of 277,000 tonnes in the first 10 The general commodity bearish oscillated in 2016 along quarters prices, demand and corrections on months of 2016 (production vs. mood brought the electricity at €168 per tonne, €218 per tonne, other raw material prices reduced usage), from 213,000 tonnes of price below €30/MWh at the end €186 per tonne and €207 per the gap to the balanced situation surplus during the same period of 2015 in most of the Western tonne for the first, second, third in January 2017. of 2015. Stocks registered at the countries, representing a drop and fourth quarters, respectively. London Metal Exchange (“LME”) between €5 and €8/MWh or an A monthly minimum was recorded Ferro alloys and base metals warehouses stood at 427,850 approximate 20% price reduction in February at €159 per tonne, tonnes as of December 31, 2016, since November 2015. At the with a recovery to a maximum Ferro alloys4 representing a decrease of 8% end of the first quarter of 2016, in May at €252 per tonne. In the compared to December 31, 2015 prices began to increase due third quarter of 2016, the price The underlying price driver for when stocks registered stood at to pressure on the commodity remained stable at €186 per manganese alloys is the price of 464,400 tonnes (691,600 tonnes market (especially regarding coal, tonne with a recovery by the end manganese ore which was at the in 2014). power), as well as physical storage of the year to €222 per tonne in level of $4.30 per dry metric tonne and production constraints (gas December. In NAFTA, the HMS 1&2 unit (“dmtu”) (for 44% lump ore) The average price of tin for storage technical constraints, FOB index reacted consistently on Cost, Insurance and Freight 2016 was $18,006 per tonne, reduction of gas production with Europe, with prices in 2016 at (“CIF”) China for 2016, representing representing an increase of 12% in Groningen gas fields in the $179 per tonne in the first quarter, an increase of 38% from $3.11 compared to the 2015 average Netherlands and low nuclear up to $274 per tonne in the second per dmtu in 2015 ($4.56 per dmtu of $16,070 per tonne (the 2014 availability in Belgium, Germany quarter, $210 per tonne in the third for 2014) mainly due to supply average was $21,893). and France). quarter and a final increase to $240 disruptions in South Africa and per tonne in the fourth quarter. Australia and sustained demand of The average price of aluminum Forward calendar year 2017 manganese ore from China. for 2016 was $1,605 per tonne, electricity prices increased by Scrap import prices have evolved representing a decrease of 3% 43% in Belgium (from €28/MWh differently throughout 2016 as The 2016 prices of high carbon compared to the 2015 average in March 2016 to above €40/MWh compared to 2015. In Europe, ferro manganese increased of $1,661 per tonne (the 2014 for the last quotation of 2016 for average international scrap prices compared to the prior year by average was $1,867). calendar forward 2017), 54% in decreased by 2.6% from $234 2% from $942 to $965 per tonne. France (from €26/MWh in March per tonne to $228 per tonne (MB Prices of silicon manganese The average price of nickel for 2016 to above €40/MWh for the HMS 1&2 80:20 CFR Turkey, North decreased compared to the prior 2016 was $9,609 per tonne, last quotation of 2016) and 59% European origin). For NAFTA year by 2% from $1,009 to $992 representing a decrease of 19% in Germany (from €21.50/MWh origin scrap, the average price in per tonne ($1,222 per tonne for compared to the 2015 average in March 2016 to above €34.30/ 2016 was $225.2 per tonne (HMS 2014). Prices for medium carbon of $11,834 per tonne (the 2014 MWh for the last quotation of 1&2 FOB East Coast) which was ferro manganese decreased in average was $16,867). 2016). This strong price increase 0.4% higher than in 2015 when 2016 compared to the prior year was mainly due to the non- the average price was $224.4 per by 6.07% from $1,465 to $1,376 Energy market planned unavailability of 20% tonne. per tonne ($1,686 per tonne for of French nuclear fleet by cause 2014). Electricity of high carbon concentration Turkish scrap import volumes found in steam generators. Since were 16.1 million tonnes in the Base metals5 In most of the countries where then, French nuclear watchdog first eleven months of 2016 ArcelorMittal operates, electricity lifted must of the restrictions, representing an increase of 10.7% Base metals used by ArcelorMittal prices have moved in line with easing tensions in France and compared to same period in 2015, are zinc, tin and aluminum other commodities. In North neighboring countries. taking advantage of lower scrap for coating, aluminum for America, the continuous pressure prices. Turkish imports of billets deoxidization of liquid steel and on oil brought the natural gas Since the beginning of January were 4.3 million tonnes in 2016 nickel for producing stainless price down approximately 4% 2017, Brent oil prices are moving from January to November as or special steels. ArcelorMittal during 2016 and spot prices in in the range of $53/barrel (“bbl”) compared to 4.1 million tonnes partially hedges its exposure to its the PJM electricity market for and $56/bbl, as compared with in the same period of 2015, an base metal inputs in accordance the full year 2016 have seen a $36.70/bbl at the end of December increase of 4.9%. Turkey remains with its risk management policies. reduction of approximately 17% 2015, partially due to strong the main scrap buying country (from $43.1/Megawatt (“MWh”) bullish sentiments regarding an in the international market and The average price of zinc for down to $36.7/MWh) as compared agreement between OPEC’s 14 approximately 66% of its steel 2016 was $2,095 per tonne, to the full year 2015 spot price. oil producing nations. According production is based on the EAF representing an increase of 9% Looking forward to 2017 prices, to a communication made on process, with the other 34% as compared to the 2015 average recent oil price increases, higher September 28, 2016, OPEC agreed through the Blast Furnace route. of $1,928 per tonne (the 2014 gas demand for power production to slightly reduce their global Turkey’s crude steel production average was $2,164 per tonne). and fewer gas rigs have put output at the end of 2016 in an increased by 4.8% in the first The low for 2016 was $1,454 per pressure on gas prices (84% gas attempt to avoid price volatility eleven months of 2016 (30.3 price increase comparing spot due to high stock levels and million tonnes) as compared to the 4 Prices for high grade manganese ore price in first quarter 2016 versus resilience of U.S. shale oil. are typically quoted for ore with 44% first eleven months of 2015 (28.9 manganese content. the expected in the first quarter of million tonnes). 5 Prices included in this section are 2017). Currently, the calendar year based on the London Metal Exchange 2017 electricity prices are quoting (LME) cash price. 12 Management report

The electricity price crash that traded on the NYMEX exchange the United States, unconventional the second half of 2014 as a result occurred at the end of 2015 and or over-the-counter. Elsewhere, gas production proved more of increased Brazilian shipments, beginning of 2016 should have prices are set on an oil derivative or than robust despite low oil prices however, the recovery never accelerated decisions to mothball bilateral basis, depending on local and the continuous drop in gas materialized and Chinese demand unprofitable production units (coal market conditions. International market prices. A record buildup waned. As a result, rates primarily and gas power plants) but existing oil prices are dominated by global of gas in storage has materialized remained at low levels throughout market volatility, mainly caused by supply and demand conditions during the 2015/2016 winter with the second half of 2014, with the reduced availability of nuclear and are also influenced by a surplus of approximately 6.5% as only small periods of temporary power plants in France and a geopolitical factors. compared to the five year average strength. Ocean freight market coal shortage due to the Chinese (decreasing the risk premium for rates for dry cargo remained low decision to reduce domestic coal In 2015 and 2014, the LNG winter months). Current shale for the majority of 2015, primarily production, will potentially delay market continued to grow in gas production remains at nearly due to a fall in coal and iron ore or cancel this trend due to higher Asia, although at a slower pace maximum levels of around 43 imports and the fall in oil prices. prices in the market. than in 2013. Excess supply is billion cubic feet per day. developing in that market as Ocean freight market rates for dry The reduction in Chinese domestic new liquefaction capacities are U.S. steam coal continues to be cargo remained low but volatile coal production during 2016 coming on stream or ramping challenged as a fuel to produce during 2016. The Baltic Dry Index has spurred a sharp increase in up from Australia, Papuasia and power. Gas power plants are taking (“BDI”) reached its lowest value imports in China, which in turn Malaysia. US LNG initiated its first the lead and increasing their historically in February 2016 at 290 has driven coal seaborne prices shipments to Europe in 2016 and market share (an increase of 9%) points but recovered through the in both the Pacific and Atlantic will continue to further escalate in the production mix which could year driven by heavy demolition to multi-year highs. If nuclear its liquefaction capacity during trigger volatility during summer of ships and an increase in Chinese capacity availability is clarified and 2017 and onwards. This increase periods if there are heat waves. demand in the fourth quarter of coal production in China increases, will probably not be fully absorbed Projects to build liquefaction 2016. The BDI averaged 673 points the market price will continue to due to the economic slowdown facilities for export to Europe or in 2016 (2015: 718, 2014: 1,105). be inconsistent with the need of and will allow higher shipments Asia continue to be developed, The Baltic Capesize (5 time charter) more flexible power generation to Europe (compounded by the with production started in early averaged $7,388/day (2015: required to cope with increasingly fact that Japanese nuclear power 2016 and potentially pushing U.S. $8,127/day, 2014: $14,842/day). intermittent renewables capacity. plants have slowly initiated the gas prices up to keep up with the Panamax time charter averaged This is fueling “capacity market” ramp-up in generating power). new export demand. $5,562/day (2015: $5,561/day; debates and other market The expected high number of 2014: $7,718/day). mechanisms that could be LNG shipments in Europe has fully The number of U.S. gas rigs needed to guarantee the required erased the bullish market effect continues to significantly decline Total major bulk demand grew in investments ensuring security of of the lack of flexibility that was year on year in all zones, mainly 2016 as compared to 2015, when supply. lost in 2015 when the production due to low oil prices putting there was a small contraction of Groningen, a giant natural gas pressure on local gas production due to a fall in coal and iron ore Natural gas field located in the Netherlands, areas. Such tension may be imports. In 2016, iron ore trade was reduced due to repeated masked in the market, however, growth was driven by an increase Natural gas is priced regionally. earthquakes. by gas storage levels above five in Chinese iron ore imports (a European prices were historically year averages. If colder than record 1,018 million tonnes) linked with petroleum prices Asian oil indexed LNG prices average temperatures materialize mainly due to cuts to the country’s but continuous spot market (JKM) continue dropping (from for the winter of 2016-2017, price domestic iron ore output in 2016. development and increasing $18 down to $7.50/MM British volatility is likely as the market Global seaborne iron ore trade liquidity are now prevailing in thermal unit (“BTU”) during 2015 equilibrium may change towards is expected to increase in 2017, almost all countries except in and below $6/MMbtu for spot a less comfortable supply/demand due to an increase in iron ore poorly integrated markets (e.g., LNG cargos in October 2016), scheme. shipments from Australia and Spain, Portugal) or markets in closing the arbitrage window Brazil to China and increased transition from a tariff based between Europe and Asia. Since Ocean freight6 shipments into Europe and other system (e.g., Poland). With the beginning of January, spot Asian countries. Coal trade fell, increasing liquid natural gas prices for delivery in February have The shipping market generally driven by a fall in coking coal (“LNG”) flows in Spain, a definitive increased in Asia, reaching close to exceeded expectations in the first shipments into the EU. However, movement towards a more liquid $10/MMbtu. This is increasing the half of 2014, in a period which is compared to 2015, the rate of and integrated market could be arbitration window for U.S. LNG, usually known to endure seasonal decline was lower due to an experienced in 2017. reducing the number of cargo’s restrictions, due to strength seen increase in Chinese imports. The arriving in Europe with the fallout in Australian exports. Total iron ore rate of net fleet growth slowed This trend is reducing the of higher prices in Europe. imports by China were up 19% in 2016 as consistent with 2015, correlation and sensibility of the year on year, as iron ore prices there was an increase in scrapping Western European market to oil The premium related to the risk dropped. However, coal and other of older vessels due to the low price volatility. As an example, of gas flow disruption between sectors such as grain did not see market. the gas auction of Gazprom in Ukraine and Russia has reduced. In as much growth and especially September 2016 was again based addition, Ukraine continues to buy as congestion eased, the result Impact of Exchange Rate on market prices and not oil gas from Western Europe in order was improved vessel turnaround Movements indexation, as market prices were to fulfill its storage requirement and increased efficiency in ports. considered better indicators. North of 17 bcm (billion cubic meters) Rates were expected to recover in During 2014, mainly two American natural gas prices trade to cover domestic consumption 6 Sources: CTM, Clarksons Shipping different periods and market independently of oil prices and are and guarantee stable gas transit Intelligence network & Dry bulk trade conditions were seen. Aside from set by spot and future contracts, to Europe during winter. In 2015 in outlook, Fearnleys sector report dry the Ukrainian Hryvnia and the bulk. Management report 13

Kazakhstani tenge devaluations the expectation of an ambitious 2016, it had depreciated to 673.76 Steel Consumption (“ASC”) has against the U.S. dollar, in the fiscal and investment program. against the U.S. dollar. increased over 10% while, over the beginning of 2014, there was a As a consequence, the euro same period, finished steel imports low volatility period where the €/$ depreciated against the U.S. dollar Because a substantial portion have increased 67%, taking market exchange rate remained within the to 1.0541 at the end of 2016 from of ArcelorMittal’s assets, share from domestic producers. range of 1.35 - 1.40 and emerging 1.0898 at the start of the year, liabilities, sales and earnings countries started their recovery further driven by the reduction are denominated in currencies Traditionally, imports into Europe with evidence of adjustments. of the monthly asset purchase other than the U.S. dollar (its have come from CIS countries, However, at the end of the second program from the European reporting currency), ArcelorMittal China, Turkey and developed Asia, quarter of 2014, geopolitical Central Bank. has exposure to fluctuations in accounting for roughly 75% of conflicts, monetary policy the values of these currencies imports over the past five years. divergence, very low oil prices as Following the U.S. elections, the relative to the U.S. dollar. These Imports from the CIS remained well as strong demand for the U.S. Mexican peso was impacted currency fluctuations, especially broadly stable in 2016 at a share of dollar started to have a negative heavily by the threats of free trade the fluctuation of the U.S. dollar almost 30%, while the contribution impact on a number of currencies, agreement renegotiations, as relative to the euro, as well as of Chinese origin imports fell especially in jurisdictions where Mexico’s first commercial partner fluctuations in the currencies during 2016 from a peak of 29% in ArcelorMittal operates. is by far the U.S. The Mexican peso of the other countries in which 2015 to 22% as shipment volumes ended 2016 at 20.6545 against the ArcelorMittal has significant declined to approximately 6 In 2015, the currency landscape U.S. dollar compared to 17.3750 operations and sales, can have a million tonnes down from 7.2 was reshaped. Supported by a at the beginning of the year. As a material impact on its results of million in 2014. The share of other robust labor market and resilient result of the possible removal of operations. In order to minimize its traditional importers into Europe growth figures, the strength of sanctions against Russia following currency exposure, ArcelorMittal such as developed Asia and Turkey the U.S. dollar was confirmed in the U.S. elections and the rebound enters into hedging transactions to have seen their market share December 2015 by the first rate in oil prices, the Russian rouble lock-in a set exchange rate, as per pickup in 2016 to 12% and 10% increase by the Federal Reserve appreciated during the year from its risk management policies. respectively as imports from China after a seven year period of a “zero 73.1086 to 60.9999 against the U.S. have fallen. While imports from interest rate policy.” The situation dollar. Trade and Import Competition Iran remained around 4% of total in the U.S. contrasted strongly with imports in 2015 and 2016, this is the eurozone, where the European In Brazil, the market welcomed Europe7 up significantly from under 1% Central Bank’s (the “ECB”) the impeachment process prior to 2014. quantitative easing program where charges of administrative During 2014, finished steel imports increased in intensity throughout misconduct and disregarding the increased by 19.9% year-on-year United States8 the year. This, alongside federal budget were raised against to around 22.0 million tonnes with disappointing data on production President Dilma Rousseff. The pro- growth mainly from shipments Imports rose significantly in 2014 activity and inflation, put pressure reform transitory government was originating from CIS and China. to 30.6 million tonnes. In the same on the euro, which started the year positively received by investors Though finished steel demand also year, penetration increased to at 1.21 and ended the year at 1.09 and during 2016, the Brazilian strengthened, growth was slower 28.4%, despite an 11.8% increase against the U.S. dollar. real strengthened from 4.0395 to than imports at approximately in apparent steel demand as 3.2544 against the U.S. dollar. The 5% year-on-year. As a result, the overall steel imports were up During the first half of 2016, the South African rand also benefited import penetration rate for 2014 37.9%. foreign exchange market was from an improved political context rose to 15.1%. turbulent, resulting in capital and strengthened to 13.7150 from In 2015, finished steel imports outflow from China and the 15.5586 against the U.S. dollar In 2015, strengthening industrial fell 6.7% to 28.6 million tonnes, weakening of the Chinese yuan during the same period. activity in Europe led to a 2% from a post-crisis peak of 30.6 against the U.S. dollar. Quantitative increase in real steel demand. million tonnes in 2014. However, easing programs were enhanced in The Kazakhstani tenge leveled However, the slowdown in global due to the significant weakness Japan and Europe where inflation off after a period of high volatility steel consumption coupled with in apparent steel demand, import continued to be below the central (with a high of 388.5 and a low excess capacity in China led to penetration actually increased to banks’ expectations. The ECB of 336.5 during the first quarter increased finished steel shipments over 29%, from 28.4% in 2014 and increased monthly asset purchases of 2016) following the free float into Europe, rising to around 25.2 an average of 22.5% between 2007 to €80 billion and extended the regime introduction in August million tonnes, as domestic prices and 2013. purchases to safe corporate bonds, 2015, and during the rest of 2016, remained relatively attractive. while short-term interest rates it remained around 330 to 340 As a result, imports penetration During 2016, imports were further decreased. against the U.S. dollar. increased to over 16%. relatively stable at 1.9 million tonnes per month during the The outcome of the Brexit On February 17, 2016, the Although underlying steel demand first half of the year and 2 million referendum triggered a move Venezuelan government devalued remained healthy during 2016, tonnes per month during the toward safety trades that its currency by changing the ArcelorMittal estimates imports second half of the year. Import prompted U.S. dollar strength, official rate of the bolivar fuerte penetration increased to 17.5% as levels were similar to the second supporting the trend towards from 6.3 to 10 per U.S. dollar. It third country imports into Europe half of 2015, but down significantly lower interest rates in the G10 also announced the elimination increased by approximately 18% from the peak levels of around 2.7 countries. This risk-off climate of the SICAD rate and starting year-on-year. This continues a million tonnes per month from was confirmed later with the U.S. February 18, 2016, the SIMADI trend of imports growing more May 2014 to April 2015 driven presidential campaign; however, rate (renamed DICOM) was strongly than domestic demand, by healthy domestic demand, a sharp reversal of the market allowed to float freely at a rate of between 2012 and 2016 Apparent 8 Source: U.S. Department of sentiment followed Donald approximately 203 bolivar fuerte 7 Source: Eurostat trade data to Commerce, customs census data up to Trump’s election, triggered by per U.S. dollar. At December 31, November 2016, estimates for November 2016 and import licenses for December 2016. December 2016. 14 Management report

restocking activity and attractive Consolidation in the steel and In Europe, Tata Steel and Key indicators prices in the U.S. relative to mining industries Thyssenkrupp have confirmed international markets. that they are in discussions for the The following discussion and Consolidation transactions consolidation of their European analysis should be read in Overall, 2016 finished steel decreased significantly in terms of steel mills. Thyssenkrupp had been conjunction with ArcelorMittal’s import penetration fell to 25.4% number and value in the past three signaling its interest in combining consolidated financial statements as imports fell 17% year-on-year years in the context of economic its European steel operations included in this annual report. to 23.8 million tonnes in 2016, uncertainties in developed with those of another steel entity. amid continued destocking economies combined with a In November 2016, Tata Steel ArcelorMittal reports its operations and weak energy pipe demand slowdown in emerging markets. announced it reached a deal to in five reportable segments: causing pipes and tubes imports However, in an effort to reduce the sell its UK specialty steel business NAFTA, Brazil, Europe, ACIS and to decline around 35% last year. In worldwide structural overcapacity, to industrial metals firm Liberty Mining. The key performance comparison, long product imports some consolidation steps might House Group. In addition, during indicators that ArcelorMittal’s decreased by only 8% over the finally happen in 2017, specifically 2016, Tata sold its European Long management uses to analyze peak levels seen last year, while in China and in Europe. Products division, mostly based operations are sales, average steel flat products declined by around in the U.K., to Greybull Capital selling prices, steel shipments, 15% year-on-year reflecting the Steel industry consolidation and two steel mills in Scotland iron ore and coal production and imposition of anti-dumping has slowed down substantially to Liberty House. Finally, at the operating income. Management’s duties against a number of in China since 2012. As a key end of June 2016, ArcelorMittal analysis of liquidity and capital major exporters of hot rolled flat initiative of the Chinese central and Marcegaglia announced they resources is driven by operating products. government’s five-year plan issued have submitted an offer for the cash flows. in March 2011, the concentration acquisition of Ilva, Europe’s largest Total imports into the U.S. process of the steel industry was steel plant, located in Taranto, (including semis) from other expected to reduce overcapacity, Italy. On February 22, 2017, NAFTA countries (Canada and rationalize steel production Thyssenkrupp AG announced it Mexico) in 2016 were similar to based on obsolete technology, would sell its Brazilian steel plant 2015 levels, accounting for an improve energy efficiency, achieve to Ternium SA for €1.26 billion increased share of total imports at environmental targets and ($1.33 billion) and that it remained over 25%. This meant that imports strengthen the bargaining position in talks with several parties about from outside NAFTA fell more of Chinese steel companies in price a tie-up for its European steel sharply, declining almost 20%, negotiations for iron ore. However, division. with the bulk from developed that initiative is yet to produce Asia, Brazil and EU accounting significant tangible results. In Going forward, any further for around 50% of total imports. 2015, China dropped its target consolidation should foster However, trade measures against objective for the top ten Chinese the ability of the steel industry China have resulted in shipments steel producers to account for to maintain more consistent declining over 60% accounting 60% of national production and performance through industry for fewer than 3% of imports, for at least two producers to reach cycles by achieving greater down from over 6% in 2015 and 100 million tonne capacity in the efficiencies and economies of a peak of 10% in 2014. The CIS next few years. A new industry scale, and should lead to improved origin imports remained broadly consolidation plan published by bargaining power relative to stable due to pre-existing trade China aims at simplifying approval customers and, crucially, suppliers, restrictions against Russia and procedures and facilitating which tend to have higher levels of Ukraine. However, ASEAN’s acquisition financing for firms in consolidation. contribution to U.S. imports more sectors like steel. In June 2016, than doubled in 2016, to over Baosteel Group and Wuhan Iron 3.5% from around 1% in 2015, in and Steel Group announced the particular due to shipments from launch of merger negotiations. Vietnam, which increased 330%. Globally, the former ranked fifth in terms of crude steel production in 2015, while the latter placed 11th. After the state-controlled companies integrate their operations, they will become the world’s No. 2 steelmaker. During the second half of 2016, the Chinese government approved and finally endorsed the merger of Baosteel and Wuhan Iron and Steel to form a combined entity with annual production capacity over 60 million tonnes. The new entity will be called China Steel Baowu and is expected to boast capacity larger than Germany and Britain combined. Management report 15

Years ended December 31, 2016, 2015 and 2014

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, 2016, 2015 and 2014: Sales for the year ended December 31,1 Operating income for the year ended December 31,2 2016 2015 2014 2016 2015 2014 Segment (in $ millions) (in $ millions) (in $ millions) (in $ millions) (in $ millions) (in $ millions) NAFTA 15,806 17,293 21,162 2,002 (705) 386 Brazil 6,223 8,503 10,037 614 628 1,388 Europe 29,272 31,893 39,552 1,270 171 737 ACIS 5,885 6,128 8,268 211 (624) 95 Mining 3,114 3,387 4,970 366 (3,522) 565 Others and eliminations (3,509) (3,626) (4,707) (302) (109) (137) Total 56,791 63,578 79,282 4,161 (4,161) 3,034 1 Amounts are prior to inter-segment eliminations (except for total) and sales include non-steel sales. 2 Others 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.

Year ended December 31, 2016 2015 2014 Adjustments to segment operating income and other (in $ millions) (in $ millions) (in $ millions) Corporate and shared services 1 (71) (10) (132) Financial activities (17) (20) (16) Shipping and logistics (97) (84) (30) Intragroup stock margin eliminations 2 (94) 31 109 Depreciation and impairment (23) (26) (68) Total adjustments to segment operating income and other (302) (109) (137) 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 2016, as compared to 2015, margins increased mainly as a result of the recovery of iron ore prices and cost reductions leading to an increase in intragroup-margin eliminations.

Sales ArcelorMittal had sales of Cost of sales intangible assets for $4.8 billion $63.6 billion for the year ended partially offset by a decrease in ArcelorMittal had sales of December 31, 2015, representing Cost of sales consists primarily depreciation and foreign exchange $56.8 billion for the year ended a 19.8% decrease from sales of of purchases of raw materials impacts due to the appreciation December 31, 2016, representing $79.3 billion for the year ended necessary for steel-making (iron of the U.S. dollar against the a 10.7% decrease from sales of December 31, 2014, primarily ore, coke and coking coal, scrap major currencies. Selling, general $63.6 billion for the year ended due to lower average steel selling and alloys), electricity, repair and and administrative expenses December 31, 2015, primarily prices which were down 19.7%, maintenance costs, as well as (“SG&A”) were $2.2 billion for the due to lower average steel selling lower seaborne iron ore reference direct labor costs, depreciation year ended December 31, 2016 prices which were down 9.0% prices which were down 43% and impairment. Cost of sales compared to $2.5 billion for the and lower marketable iron ore and lower steel shipments which for the year ended December year ended December 31, 2015. shipments which decreased by decreased by 0.6%, partially offset 31, 2016 was $50.4 billion as SG&A as a percentage of sales 16.6%, partially offset by higher by higher market priced iron ore compared to $65.2 billion for remained stable for the year ended seaborne iron ore reference prices shipments which were up by 1.4%. the year ended December 31, December 31, 2016 (3.9%) as by 5.3%. Steel shipments for the In the first half of 2015, sales of 2015. Cost of sales for the year compared to 2015 (4.0%). year ended December 31, 2016 $34.0 billion represented a 16.1% ended December 31, 2016 was remained stable as compared decrease from sales of $40.5 billion positively affected by decreased Cost of sales for the year ended to shipments for the year ended in the first half of 2014, primarily input costs, cost optimization December 31, 2015 was $65.2 December 31, 2015. In the first due to 18% lower average steel efforts as part of the Action 2020 billion as compared to $73.3 billion half of 2016, sales of $28.1 billion selling prices and 46% lower plan and a one-time gain of $832 for the year ended December 31, decreased 17.2% from sales of seaborne iron ore reference prices, million on employee benefits 2014. Cost of sales for the year $34.0 billion in the first half of partially offset by a 3% increase in following the signing of the ended December 31, 2015 was 2015, primarily due to 17% lower steel shipments and a 2% increase new U.S. labor contract, partially negatively affected by an increase average steel selling prices, 14% in marketable iron ore shipments. offset by impairments in the ACIS in impairment on tangible and lower seaborne iron ore reference In the second half of 2015, sales of segment for $156 million mainly intangible assets for $4.8 billion prices and a 13% decrease in $29.6 billion represented a 24.0% related to the Vanderbijlpark plant partially offset by a decrease in marketable iron ore shipments. decrease as compared to sales of in South Africa and $49 million depreciation and foreign exchange In the second half of 2016, sales $38.8 billion in the second half of impairment charge related to the impacts due to the appreciation of $28.7 billion represented a 2014, primarily driven by a drop held for sale classification of the of the U.S. dollar against the 3.1% decrease as compared to in average steel prices of 21.6% ArcelorMittal Zaragoza facility in major currencies. Selling, general sales of $29.6 billion in the second and a decrease of 4.4% in steel Spain. Cost of sales for the year and administrative expenses half of 2015, primarily driven shipments. ended December 31, 2015 was (“SG&A”) were $2.5 billion for the by a decrease of 1.1% in steel negatively affected by an increase year ended December 31, 2015 shipments. in impairment on tangible and compared to $3.0 billion for the 16 Management report

year ended December 31, 2014. $3.9 billion related to tangible and and $0.4 billion primarily in tonnes for the year ended SG&A increased as a percentage intangible assets, of which $2.5 connection with the idling for an December 31, 2015, primarily due of sales to 4.0% of sales for the billion was in respect of iron ore indefinite time of the ArcelorMittal to declines in Brazil (6.8%) and year ended December 31, 2015 as mining operations at ArcelorMittal Sestao plant in Spain (Europe Europe (1.1%), partially offset by compared to 3.7% for 2014. Liberia ($1.4 billion), Las Truchas in segment). Operating loss in 2015 increases in ACIS (6.3%). Mexico ($0.2 billion), ArcelorMittal also included negative impacts Operating income or loss Serra Azul in Brazil ($0.2 billion) due to inventory related losses ArcelorMittal had steel shipments and coal mining operations at of $1.3 billion following the of 84.6 million tonnes for the ArcelorMittal’s operating income ArcelorMittal Princeton in the rapid decline of international year ended December 31, for the year ended December United States ($0.7 billion) mainly steel prices and litigation costs 2015, decreased by 0.6% as 31, 2016 was $4.2 billion as due to a downward revision of of $0.1 billion in South Africa. compared to steel shipments of compared with an operating loss cash flow projections relating See note 5 to the consolidated 85.1 million tonnes for the year of $4.2 billion for the year ended to the expected persistence of financial statements for the critical ended December 31, 2014. Steel December 31, 2015. Operating a lower iron ore and coking coal accounting policies and uses of shipments increased 3% in the income was positively affected by price outlook. Management judgments and estimates related first half of 2015 as compared to a one-time gain of $832 million performed its quarterly analysis to the impairment of tangible the first half of 2014, but then on employee benefits following of impairment indicators in the and intangible assets, including decreased 4.4% in the second half the signing of the new U.S. labor context of high volatility in the goodwill. of 2015 as compared to the second contract and partially offset by raw material prices during 2015 half of 2014, primarily due to lower an impairment charge of $49 and concluded that impairment Operating income was $1.2 billion volumes in NAFTA. million related to the held for sale indicators existed in the fourth for the first nine months of 2015 classification of the ArcelorMittal quarter of 2015 as a result of the as compared to $2.5 billion for Average steel selling price Zaragoza facility in Spain and expected persistence of lower the same period in 2014, while decreased by 9.0% for the year an impairment charge of $156 long term prices and strategic the operating loss in the fourth ended December 31, 2016 as million mainly related to the decisions. ArcelorMittal also quarter of 2015 was $5.3 billion as compared to the year ended Vanderbijlpark plant in South recorded impairment charges compared to operating income December 31, 2015. Average steel Africa. Operating loss in 2015 was of $0.3 billion, $0.3 billion and of $0.6 billion for the same period selling price in the first half of 2016 negatively affected by impairment $0.2 billion with respect to the in 2014. The fourth quarter of decreased by 17% as compared to charges of $4.8 billion as described Saldanha plant in ArcelorMittal 2015 was impacted by all of the first half of 2015 and increased below and $1.4 billion charges South Africa (ACIS) as a result of the impairments and charges by 0.5% in the second half of 2016 mainly related to the inventory its revised competitive outlook, mentioned above and $0.8 billion as compared to the second half of losses following the rapid decline Indiana Harbor East and West of inventory related losses (with 2015. of international steel prices. in the United States (NAFTA) in $0.5 billion of inventory related connection with the deployment losses recorded in the third quarter Average steel selling price ArcelorMittal’s operating loss for of asset optimization programs of 2015). decreased by 19.7% for the year the year ended December 31, 2015 and the idled ArcelorMittal Point ended December 31, 2015 as was $4.2 billion as compared with Lisas facility in Trinidad and Tobago Shipments and average steel compared to the year ended operating income of $3.0 billion (Brazil segment), respectively. In selling price December 31, 2014. Average steel for the year ended December 31, addition, the Company recorded selling price in the first half of 2015 2014. Operating loss in 2015 was impairment charges of $0.2 billion ArcelorMittal had steel shipments decreased by 18% as compared to negatively affected by impairment with respect to the intended sale of 83.9 million tonnes for the the first half of 2014 and decreased charges of $4.8 billion including of the Long Carbon facilities in year ended December 31, 2016 by 21.6% in the second half of $0.9 billion with respect to the the United States (ArcelorMittal decreased marginally as compared 2015 as compared to the second Mining segment goodwill and La Place, Steelton and Vinton) to steel shipments of 84.6 million half of 2014.

NAFTA Performance for the year ended December 31, in millions of USD unless otherwise shown) 2016 2015 2014 Sales 15,806 17,293 21,162 Depreciation 549 616 706 Impairments - 526 114 Operating income / (loss) 2,002 (705) 386

Crude steel production (thousand tonnes) 22,208 22,795 25,036 Steel shipments (thousand tonnes) 21,281 21,306 23,074

Average steel selling price (USD/tonne) 672 732 843 Sales Average selling prices decreased Sales in the NAFTA segment were driven by lower domestic prices 15% during the first half of 2016 as $17.3 billion for the year ended impacted by weak demand and Sales in the NAFTA segment were compared to the first half of 2015 December 31, 2015, representing import pressures. Sales in the first $15.8 billion for the year ended and 0.5% during the second half of a decrease of 18.3% as compared half of 2015 were $9.3 billion, a December 31, 2016, representing 2016 as compared to the second to $21.2 billion for the year 10% decrease as compared to the an 8.6% decrease as compared half of 2015. Spot prices began ended December 31, 2014. Sales same period in 2014, mainly due to December 31, 2015. Sales improving in the second quarter decreased primarily as a result to a 10% decrease in average steel decreased primarily as a result of 2016 which positively impacted of the decrease in average steel selling prices and a 3% decrease in of the decrease in average steel sales in the second half of 2016 selling prices by 13.2% and a steel shipments. In the second half selling prices by 8.2%, while due to lead times and lagged decrease in steel shipments by of the year, sales were $8.0 billion, steel shipments remained stable. pricing. 7.7%, both of which were primarily a decrease of 26.3% compared to Management report 17

the same period in 2014, primarily optimization programs. It was also Carbon operations (U.S.) and the product shipments (mainly Mexico driven by a 16.3% decrease in negatively affected by inventory divestment of LaPlace and Vinton and U.S.) and a decrease in long average steel selling prices and related losses amounting to $0.5 U.S. Long Carbon facilities. Crude product shipment volumes due 12.6% decrease in steel shipments. billion following the rapid decline steel production in the NAFTA to the closure of Georgetown and of steel prices. Operating loss for segment decreased 9% for the Indiana Harbor Bar in the first half Operating income or loss the segment amounted to $52 year ended December 31, 2015 of 2015. million for the six months ended as compared to the year ended Operating income for the NAFTA June 30, 2015 as compared with December 31, 2014 to align with Average steel selling price segment was $2.0 billion for the operating income of $77 million weaker demand. decreased 8.2% for the year ended year ended December 31, 2016 for the same period of 2014. December 31, 2016 as compared as compared to an operating loss Operating loss for the first half of Total steel shipments remained to the year ended December 31, of $0.7 billion for the year ended 2015 was negatively affected by a flat for the year ended December 2015. Average steel selling price December 31, 2015. Operating $69 million provision for inventory 31, 2016 as compared to the decreased 15% in the first half of income was positively affected by related losses in the US and an year ended December 31, 2015. 2016 as compared to the same lower input costs, the improved impairment of $19 million relating Shipments were 10.9 million period in 2015 and by 0.5% in the performance of Calvert and a to the closure of the Georgetown tonnes in the first half of 2016, second half of 2016 as compared one-time $832 million gain on facility in the U.S. as well as lower a decrease of 2% from the same to the same period in 2015. Spot employee benefits following volumes and lower average selling period in 2015, primarily due prices began improving in the the signing of the new U.S. labor prices as compared to the same to the divestment, idling and second quarter of 2016 which contract. Operating loss for the period of 2014. Operating loss closure of the U.S. Long Carbon positively impacted sales in the year ended December 31, 2015 for the second half of 2015 was facilities mentioned above, while second half of 2016 due to lead was negatively impacted by $653 million which was negatively shipments in the second half of the times and the lag. impairment charges of $526 affected by the impairments and year were 10.4 million tonnes, an million and inventory related inventory related losses described increase of 1.7% as compared to Average steel selling price losses amounting to $0.5 billion above as compared to operating the same period in 2015. decreased 13.2% for the year described below. income in the second half of ended December 31, 2015 as 2014. Operating performance in Total steel shipments decreased compared to the year ended Operating loss for the NAFTA the second half of 2015 was also 7.7% for the year ended December December 31, 2014. Average steel segment was $705 million for the affected by negative price-cost 31, 2015 as compared to the selling price in the first half of 2015 year ended December 31, 2015 as squeeze. year ended December 31, 2014. decreased 10% from the same compared to an operating income Shipments were 11.1 million period in 2014 primarily due to of $386 million for the year ended Crude steel production, steel tonnes in the first half of 2015, lower domestic prices impacted December 31, 2014. Operating loss shipments and average steel a decrease of 3% from the same by falling raw material prices and included impairment charges of selling price period in 2014, while shipments import pressures. Average steel $526 million of which $231 million in the second half of the year were selling price in the second half related to the intended sale of the Crude steel production in the 10.2 million tonnes, a decrease of the year decreased by 16.3% Long carbon facilities in the United NAFTA segment decreased 2.6% of 12.6% from the same period as compared to the same period States (ArcelorMittal Laplace, for the year ended December in 2014. Steel shipments for the in 2014, although average steel Steelton and Vinton) and $276 31, 2016 as compared to the first half of 2015 were negatively selling prices in the fourth quarter million with respect to the Indiana year ended December 31, 2015, affected by increased imports. of 2015 decreased by 14.3% Harbor East and West facilities primarily due to the closure of Steel shipments for the second compared to the same period of (United States) in connection Georgetown (U.S.), idling of the half of 2015 were negatively 2014. with deployment of the asset steel shop of Indiana Harbor Long affected by a decrease in flat Brazil Performance for the year ended December 31, in millions of USD unless otherwise shown) 2016 2015 2014 Sales 6,223 8,503 10,037 Depreciation 258 336 457 Impairments - 176 - Operating income / (loss) 614 628 1,388

Crude steel production (thousand tonnes) 11,133 11,612 10,524 Steel shipments (thousand tonnes) 10,753 11,540 10,376

Average steel selling price (USD/tonne) 536 647 867 Sales 6.8% and unfavorable sales mix for international steel pricing for both down 19.7% from the same period long products in Brazil. flat and long products offset in in 2014 primarily due to lower In the Brazil segment, sales part by higher steel shipments. average selling prices (28.2%), decreased 26.8% to $6.2 billion for In the Brazil segment, sales Sales in the first half of 2015 were partially offset by an increase in the year ended December 31, 2016 were $8.5 billion for the year $4.3 billion, down 10% from the shipments (4.5%) and an increase as compared to the year ended ended December 31, 2015 same period in 2014 primarily due in sales from the Company’s December 31, 2015, primarily which represented a 15.3% to lower average selling prices Venezuelan operations. due to 17.2% lower average decrease as compared to the partially offset by higher steel steel selling prices following the year ended December 31, 2014 shipments following the restart of Operating income or loss depreciation of the Venezuelan primarily due to lower average Blast Furnace #3 at Tubarão in July Bolivar and the Argentinean peso, steel selling prices, impacted by 2014, while sales in the second Operating income for the Brazil a decrease in steel shipments by foreign exchange rates and low half of the year were $4.2 billion, segment for the year ended 18 Management report

December 31, 2016 was $614 shipments. Operating income for the restart of Blast Furnace #3 at shipments from Brazil, although million, a decrease of 2.3% as the first half of 2015 decreased Tubarão. Crude steel production shipments were down in the compared to the year ended 4.4% to $566 million as compared increased by 21% to 5.8 million fourth quarter of 2015, due to a December 31, 2015. While with the first half of 2014 primarily tonnes for the first half of 2015 as continued slowdown in demand. operating income for the year due to lower average steel selling compared to 4.8 million tonnes for ended 2015 was negatively prices offset in part by higher steel the first half of 2014 as a result of Average steel selling price affected by inventory related shipments following the restart the restart of the Tubarão furnace decreased 17.2% for the year charges of $91 million following of Blast Furnace #3 at Tubarão in July 2014, while crude steel ended December 31, 2016 as the rapid decline of steel prices and the improvement in the production increased by 1.3% compared to the year ended and an impairment of $176 million Company’s tubular operations. for the second half of 2015 as December 31, 2015 primarily due related to the idled ArcelorMittal Operating income for the second compared to the second half of to depreciation of the Venezuelan Point Lisas facility, operating half of 2015 was $63 million, a 2014. Bolivar and the Argentinean peso income for the year ended 2016 92.1% decrease compared to the and an unfavorable sales mix for was negatively affected by lower second half of 2014 due to the Total steel shipments reached long products in Brazil. shipments and lower average decrease in average steel selling 10.8 million tonnes for the year steel selling prices for the reasons prices (28.2%) and the impairment ended December 31, 2016, which Average steel selling price described below as well as and write-down described above, was a 6.8% decrease from steel decreased 25.4% for the year continued currency devaluation partially offset by a 4.5% increase shipments for the year ended ended December 31, 2015 as which impacted the tubular in shipments. December 31, 2015, primarily compared to the year ended operations in Venezuela. driven by weaker demand and the December 31, 2014 primarily Crude steel production, steel idling of the Trinidad and Tobago driven by a weaker Brazilian Operating income for the Brazil shipments and average steel facility mentioned above. real, weaker product mix due segment for the year ended selling price to increased slab exports and a December 31, 2015 was $628 Total steel shipments reached decline in international prices. million, a decrease of 54.7% as Crude steel production decreased 11.5 million tonnes for the year Average steel selling price in the compared to the year ended by 4.1% to 11.1 million tonnes for ended December 31, 2015, which first half of 2015 was down 23% December 31, 2014. The decrease the year ended December 31, 2016 was an 11.2% increase from steel from the same period in 2014, was primarily due to a 25.4% as compared to the year ended shipments for the year ended primarily driven by a weaker decrease in average steel selling December 31, 2015 as a result of December 31, 2014. Shipments Brazilian real, weaker product mix prices, write-downs of $91 million weaker demand and the idling of were 5.5 million tonnes in the first due to increased slab exports post primarily related to inventories in the Trinidad and Tobago facility half of 2015, which was up 19.5% the restart of Blast Furnace #3 at the third and fourth quarters of mentioned above. compared to the same period in Tubarão described above and a 2015 following the rapid decline of 2014, primarily driven by increased decline in international prices. steel prices and an impairment of Crude steel production increased slab exports from Brazil. Shipments The average steel selling price in $176 million relating to the idled by 10.3% to 11.6 million tonnes for in the second half of the year the second half of the year was ArcelorMittal Point Lisas (Trinidad the year ended December 31, 2015 were up by 4.5% as compared to down 28.2% from the same period and Tobago) facility, partially as compared to the year ended the second half of 2014, primarily in 2014 due to the mix impact offset by a 11.2% increase in steel December 31, 2014 as a result of due to higher exports of slab described above.

Europe Performance for the year ended December 31, in millions of USD unless otherwise shown) 2016 2015 2014 Sales 29,272 31,893 39,552 Depreciation 1,184 1,192 1,510 Impairments 49 398 57 Operating income / (loss) 1,270 171 737

Crude steel production (thousand tonnes) 42,635 43,853 43,419 Steel shipments (thousand tonnes) 40,247 40,676 39,639

Average steel selling price (USD/tonne) 568 609 773 Sales in the second quarter of 2016 decreased 18% to $17.1 billion as Operating income or loss which positively impacted sales in compared to the first half of 2014 Sales in the Europe segment were the second half of 2016 due to lead primarily due to a 22% decrease Operating income for the $29.3 billion for the year ended times and lagged pricing. in average steel selling prices Europe segment for the year December 31, 2016, representing which were negatively impacted ended December 31, 2016 an 8.2% decrease as compared Sales in the Europe segment by the USD appreciation against increased to $1.3 billion as to sales of $31.9 billion for the were $31.9 billion for the year the euro, partially offset by an compared to $0.2 billion for year ended December 31, 2015, ended December 31, 2015, increase in steel shipments by the year ended December 31, primarily due to 6.7% lower representing a decrease of 19.4% 7%. In the second half of the year 2015. Operating income for the average steel selling prices. as compared to the year ended sales were $14.7 billion, a decrease year ended December 31, 2016 Average selling prices decreased December 31, 2014 primarily due of 21.2% compared to the same was positively affected by cost 12.6% during the first half of to lower average steel selling period in 2014 primarily due to efficiency improvements and a 2016 as compared to the first prices partially offset by higher lower average steel selling prices gain of $96 million following an half of 2015 and increased 0.3% shipments. Local average steel and a marginal decrease in steel agreement in France to cap the during the second half of 2016 as selling prices declined, partially shipments described below. annual indexation of the IRUS compared to the second half of reflecting lower raw material pension plan until 2026 and to 2015. Spot prices began improving costs. Sales in the first half of 2015 pay a lump sum amount to cover Management report 19

the indexation obligation for the second half of 2015 following fewer facilities under maintenance down 1.6% from the same period subsequent years. These positive the rapid decline in steel prices, during the first half of 2015 and in 2014 driven by lower demand effects were partially offset partially offset by improved market to align with increased demand. and maintenance work. by lower average steel selling conditions and realized benefits of Crude steel production decreased prices and steep shipments as cost optimization efforts as well as in the second half of 2015 as Average steel selling price well as a $49 million impairment increased shipments. compared to the second half of decreased 6.7% for the year ended charge related to the held for sale 2014 by 3.3% driven by lower December 31, 2016 as compared classification of the ArcelorMittal Crude steel production, steel demand and maintenance work to the year ended December Zaragoza facility in Spain. shipments and average steel including the reline of a blast 31, 2015. Average selling prices Operating income for the year selling price furnace in Dunkirk, France, and decreased 12.6% during the first ended December 31, 2015 was repairs to a blast furnace in Gent, half of 2016, as compared to the negatively affected by the items Crude steel production for the Belgium. first half of 2015 and increased described below. Europe segment decreased 2.8% 0.3% during the second half of to 42.6 million tonnes for the year Total steel shipments were 40.2 2016, as compared to the second Operating income for the Europe ended December 31, 2016 as million tonnes for the year ended half of 2015. Spot prices began segment for the year ended compared to 43.9 million tonnes December 31, 2016, a marginal improving in the second quarter December 31, 2015 decreased to for the year ended December 31, decrease of 1.1% from steel of 2016 which positively impacted $171 million, a 76.8% decrease 2015, primarily due to production shipments for the year ended sales in the second half of 2016 as compared to the year ended outages in the Fos plant (France), December 31, 2015 primarily due due to lead times and lagged December 31, 2014. Operating loss the disposal of ArcelorMittal to production outages in the Fos pricing. for the segment was $533 million Zaragoza during the third quarter plant (France) and the disposal of for the second half of the year, of 2016 and the idling of the ArcelorMittal Zaragoza during the Average steel selling price compared to operating income Sestao and the Zumarraga facilities third quarter of 2016. decreased 21.2% for the year of $704 million for the first half in Spain. ended December 31, 2015 as of the year. Operating income Total steel shipments were 40.7 compared to the year ended was negatively impacted by (i) an Crude steel production for the million tonnes for the year ended December 31, 2014. Average steel impairment charge of $398 million Europe segment increased 1% December 31, 2015, an increase selling price in the first half and primarily relating to the indefinite to 43.9 million tonnes for the of 2.6% from steel shipments for second half of 2015 was down idling of the Sestao facility in Spain year ended December 31, 2015 the year ended December 31, 22% and 20.2%, respectively, and the write down of carrying as compared to the year ended 2014. Shipments were 21.6 million as compared to the first and values for certain ArcelorMittal December 31, 2014. Crude steel tonnes in the first half of 2015, up second half of 2014, largely due Downstream Solutions operations production increased in the first 7% from the same period in 2014 to exchange rate effects and a as a result of the classification as half of 2015 as compared to the driven by improved demand, while marginal decline in local average held for sale and (ii) write-downs first half of 2014 by 5% to 23 shipments in the second half of steel prices, partially reflecting of inventories for $0.6 billion in million tonnes primarily due to the year were 19.1 million tonnes, lower raw material costs.

ACIS Performance for the year ended December 31, in millions of USD unless otherwise shown) 2016 2015 2014 Sales 5,885 6,128 8,268 Depreciation 311 408 525 Impairments 156 294 - Operating income / (loss) 211 (624) 95

Crude steel production (thousand tonnes) 14,792 14,219 14,148 Steel shipments (thousand tonnes) 13,271 12,485 12,833

Average steel selling price (USD/tonne) 395 432 576

Sales selling price by 23.5% offset by period in 2014 and sales in the $156 million impairments mainly an increase in steel shipments by second half of the year were $2.8 related to the Vanderbijlpark plant In the ACIS segment, sales were 9%. The increase in the second billion, down 30.4% from the same in South Africa. Operating income $5.9 billion for the year ended half of 2016 is due to the increase period in 2014 primarily due to the for the year ended December 31, December 31, 2016, representing of 10.0% in average selling prices decrease in average selling prices 2015 was negatively impacted by a decrease of 4.0% as compared and an increase of 3.7% in steel and lower shipments. impairments and inventory related to the year ended December 31, shipments. charges described below. 2015. The decrease was primarily Operating income or loss due to an 8.6% decrease in average Sales were $6.1 billion for the Operating loss for the ACIS selling price offset by higher steel year ended December 31, 2015, Operating income for the ACIS segment for the year ended shipments by 6.3%. Sales in the representing a decrease of 25.9% segment for the year ended December 31, 2015 was $624 first half of 2016 decreased 17.7% as compared to the year ended December 31, 2016 was $211 million, compared to operating to $2.8 billion compared to the December 31, 2014. The decrease million, compared to operating income of $95 million for the same period in 2015, while sales was primarily due to a 25% loss of $624 million for the year year ended December 31, 2014. in the second half of the year were decrease in average selling price ended December 31, 2015. Operating income for the year $3.1 billion, an increase of 12.9% and lower steel shipments by 2.7%, Operating income for the year ended December 31, 2015 was from the same period in 2015. The as described below. Sales in the ended December 31, 2016 was negatively impacted by a $294 decrease on the first half of 2016 is first half of 2015 decreased 22% to positively affected by better cost million asset impairment charge due to the decrease of the average $3.4 billion compared to the same performance and offset by the mainly related to the closure 20 Management report

of Vereeniging melt shop ($27 South Africa) due to currency the Newcastle reline completion, Average steel selling prices million) and the Saldanha facility devaluation. while crude steel production for decreased 8.6% for the year ended in South Africa ($258 million), as the second half of 2015 decreased December 31, 2016 as compared a result of its revised competitive Crude steel production, steel 3.0% as compared to the second to the year ended December 31, outlook, and charges of $239 shipments and average steel half of 2014, mainly due to 2015; this decrease affected all million including $159 million selling price planned repair of Blast Furnace #9 three units (Ukraine, Kazakhstan primarily related to derecognition in Ukraine. and South Africa). Average steel of a deferred stripping prepayment Crude steel production for the selling prices in the first half of in connection with the amended ACIS segment increased 4.0% for Total steel shipments reached 13.3 2016 decreased 23% and increased iron ore supply agreement and the year ended December 31, 2016 million tonnes for the year ended 10% in the second half of 2016 as competition cases in South Africa as compared to 2015, primarily December 31, 2016, representing compared with the same periods in the fourth quarter of 2015 driven by better operational an increase of 6.3% compared in 2015, primarily driven by the and $80 million primarily related performance in Kazakhstan to the year ended December 31, international prices. to write-downs of inventories and Ukraine. Production in 2015. The increase was driven following the rapid decline of steel both CIS plants benefited from by the CIS entities due to better Average steel selling price prices and to retrenchment costs improved operational stability operational performance. decreased 25% for the year ended of $27 million in Thabazimbi and and production in South Africa December 31, 2015 as compared Tshikondeni in South Africa in the marginally decreased due to the Total steel shipments reached 12.5 to the year ended December 31, third quarter of 2015. Operating mini reline at the Saldanha plant million tonnes for the year ended 2014; this decrease affected all income for the first half of 2015 and the closure of the Vereeniging December 31, 2015, representing a three units (Ukraine, Kazakhstan was $7 million as compared to melt shop. decrease of 2.7% compared to the and South Africa). Average steel $5 million for the same period year ended December 31, 2014. selling price in the first half of 2015 of 2014. Operating loss for the Crude steel production for the Steel shipments were 6.2 million decreased 18% from the same tonnes in the first half of 2015, second half of the year was $631 ACIS segment remained fairly period in 2014, primarily due to down 4% from the same period million as compared to operating flat at 14.2 million tonnes for the lower global steel prices and weak in 2014. Steel shipments for the income of $90 million for the same year ended December 31, 2015 as demand in both CIS and South first half of 2015 were negatively period in 2014. Operating income compared to 2014. Production was Africa. Average steel selling price in affected by lower volumes in South was negatively impacted by the lower in Ukraine due to planned the second half of 2015 decreased repairs of Blast Furnace #9, partially Africa and a weaker CIS market. decrease in average steel selling Steel shipments for the second half 32.4% from the same period in prices and lower shipments for offset by higher production 2014 due to lower average steel in South Africa following the of 2015 decreased 1% compared both the first and second half of to the second half of 2014 due to selling prices in all three units, 2015 (as well as the impairments Newcastle reline completion. impacted by lower global steel Crude steel production for the lower steel shipments in Ukraine and write-downs in the second impacted by lower production prices and weak demand in both half of 2015) as compared to the first half of 2015 increased 4% to CIS and South Africa. 7.3 million tonnes as compared and a weaker South Africa market same period of 2014, partially in 2015, partially offset by lower offset by lower costs in all three to 7.0 million tonnes for the first half of 2014 primarily driven by volume in 2014 due to the units (Ukraine, Kazakhstan and Newcastle reline.

Mining Performance for the year ended December 31, in millions of USD unless otherwise shown) 2016 2015 2014 Sales 3,114 3,387 4,970 Depreciation 396 614 703 Impairments - 3,370 63 Operating income / (loss) 366 (3,522) 565

Own iron ore production (million tonnes) 55.2 62.8 63.9 Iron ore shipped externally and internally at market price (million tonnes) 1,2 33.6 40.3 39.7 Iron ore shipment - cost plus basis (million tonnes) 1 22.3 22.1 24.0

Own coal production (million tonnes) 6.3 6.1 7.0 Coal shipped externally and internally at market price (million tonnes) 1,2 3.4 2.8 3.9 Coal shipment - cost plus basis (million tonnes) 1,2 3.4 3.2 3.3 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 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. Management report 21

Year ended December 31, Iron ore production (million metric tonnes) 1 Type Product 2016 2015 2014

Own mines Concentrate, lump, fines and North America 2 Open pit pellets 35.9 39.0 37.3 South America Open pit Lump and fines 3.1 3.5 4.5 Concentrate and Europe Open pit lump 1.8 2.1 2.1 Open pit / Africa Underground Fines 2.1 4.3 5.5 Concentrate, Open pit / lump, fines and Asia, CIS & Other Underground sinter feed 12.3 13.9 14.5 Total own iron ore production 55.2 62.8 63.9 Strategic long-term contracts - iron ore North America 3 Open pit Pellets 6.1 6.6 8.2 Africa 4 Open pit Lump and fines 0.8 4.3 4.9 Total strategic long-term contracts - iron ore 6.9 10.9 13.1 Total 62.1 73.7 77.0 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 Cliffs Natural Resources. 4 The production for year ended 2015 includes purchases under strategic agreements with Sishen Iron Ore Company (Proprietary) Limited’s (“SIOC”) Kumba and Thabazimbi mines (South Africa). 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 related to Kumba from a cost-based price to an Export Parity Price (“EPP”) with effect from October 1, 2015. The EPP is calculated on the basis of the Platts 62% Fe CFR China Fines Index (the “Index price”) and, at certain price levels, ArcelorMittal receives a discounted price. As a result of this amendment, the contract related to Kumba is no longer considered as a strategic contract in 2016.

Year ended December 31, Coal production (million metric tonnes) 2016 2015 2014 Own mines North America 1.80 1.57 2.04 Asia, CIS & Other 4.45 4.58 4.98 Total own coal productions 6.25 6.15 7.02 Strategic long term contracts - coal North America 1 - 0.14 0.37 Africa 2 - - 0.31 Total strategic long term contracts - coal - 0.14 0.68

Total 6.25 6.29 7.70 1 Includes strategic agreement - prices on a fixed price basis. 2 Includes long-term lease - prices on a cost-plus basis. Sales decrease of 35% compared to the 2015. Coal shipments were 6.8 96.3% in the fourth quarter of 2016 same period in 2014, while sales in million tonnes for the year ended as compared to the third quarter of In the Mining segment, sales were the second half of 2015 were $1.7 December 31, 2016 as compared 2016. The decrease in the average $3.1 billion for the year ended billion, down 28.6% from the same with 6.0 million tonnes for the year reference iron ore price accelerated December 31, 2016, representing period in 2014. ended December 31, 2015. The in the second half of 2015, with a decrease of 8.1% as compared increase is primarily due to higher prices down 38% compared to to the year ended December 31, Sales to external customers were shipments of Princeton. the second half of 2014, and 2015. Sales in the first half of 2016 $781 million for the year ended down 46% in the first half of 2015 were $1.4 billion, a decrease of December 31, 2016, representing The average reference iron ore compared to the first half of 2014. 18% compared to the same period a decrease of 5.2% compared to price was $58.45 per tonne in However, there may not be a direct in 2015, while sales in the second the year ended December 31, 2016, $55.50 per tonne in 2015 correlation between reference half of 2016 were $1.7 billion, an 2015. Iron ore shipments were 55.9 and $96.7 per tonne in 2014 (CFR prices and actual selling prices in increase of 2.4% from the same million tonnes for the year ended China 62% Fe, Platts Index) and the various regions at a given time. period in 2015. December 31, 2016, representing average reference price for hard a decrease of 10.4% as compared coking coal increased to $143.24 Sales to external customers were Sales were $3.4 billion for the to 62.4 million tonnes for the per tonne in 2016, from $88.00 $824 million for the year ended year ended December 31, 2015, year ended December 31, 2015. per tonne in 2015 and $114.44 per December 31, 2015, representing representing a decrease of 31.8% The decrease is primarily due tonne in 2014 (FOB Australia HCC a decrease of 38% compared to as compared to the year ended to lower shipments in Mexico, Peak Downs, Platts Index). The the year ended December 31, December 31, 2014. The decrease Ukraine, Liberia and Canada. Iron increase in the average reference 2014. Iron ore shipments were 62.4 was primarily due to lower ore shipments to external parties hard coking coal price accelerated million tonnes for the year ended seaborne iron ore market prices were 12.3 million tonnes for the in the second half of 2016, with December 31, 2015, representing which were down 43% (average year ended December 31, 2016 as prices up 48.4% in the third a decrease of 2.0% as compared year-on-year). Sales in the first compared to 13.7 million tonnes quarter of 2016 as compared to to 63.7 million tonnes for the year half of 2015 were $1.7 billion, a for the year ended December 31, the second quarter of 2016 and up ended December 31, 2014. Iron 22 Management report

ore shipments to external parties due to the downward revision due to lower production at both received preferred shares of were 13.7 million tonnes for the of cash flow projections relating U.S. and Kazakhstan operations as Gerdau and cash consideration year ended December 31, 2015 as to the expected persistence of a well as the disposal of the Kuzbass of $28 million in exchange for compared to 14.4 million tonnes lower raw material price outlook. coal mines in Russia during the unlisted Gerdau shares, resulting in for the year ended December 31, In addition to such impairment fourth quarter of 2014. a gain of $55 million. 2014. The decrease was primarily charges, operating performance in due to lower external shipments 2015 compared to 2014 reflected Income or loss from investments Financing costs-net from Brazil and Liberia partially lower seaborne iron ore market in associates, joint ventures and offset by the Company’s Canadian prices, offset in part by operating other investments Net financing costs include net operations. Coal shipments were cost improvement. interest expense, revaluation of 6.0 million tonnes for the year ArcelorMittal recorded income of financial instruments, net foreign ended December 31, 2015 as Production $615 million from investments in exchange income/expense (i.e., compared with 7.2 million tonnes associates, joint ventures and other the net effects of transactions in for the year ended December 31, ArcelorMittal had own iron ore investments for the year ended a foreign currency other than the 2014. In the second half of 2015, production of 55.2 million tonnes December 31, 2016, as compared functional currency of a subsidiary) iron ore shipments to external for the year ended December with a loss of $502 million for the and other net financing costs customers were nearly in line with 31, 2016, a decrease of 12.1% year ended December 31, 2015. (which mainly include bank fees, the first half. compared to the year ended The income for the year ended accretion of defined benefit December 31, 2015. The decrease December 31, 2016 was primarily obligations and other long-term Operating income or loss in iron ore production is primarily due to the gain on disposal of liabilities). due to lower production in Liberia, stakes in Gestamp for $329 million Operating income for the Mining Mexico, Ukraine and Canada. With and Hunan Valin for $74 million Net financing costs were lower segment for the year ended the Company’s ongoing focus as well as improved performance for the year ended December December 31, 2016 was $366 on its most competitive iron ore of the Calvert joint venture, 31, 2016, at $2.1 billion, a 28.1% million, compared to an operating operations: Liberia production Chinese and Spanish investees decrease compared to the year loss of $3.5 billion for the year is currently being maintained at offset in part by impairments of ended December 31, 2015. Net ended December 31, 2015. approximately 2 million tonnes the primary steel making assets at financing costs were lower for the Operating income for the year per year and the Volcan mine in China Oriental. year ended December 31, 2015, ended December 31, 2016 was Mexico was suspended in October at $2.9 billion, a 15.5% decrease positively affected by improved 2015 (2 million tonnes annual ArcelorMittal recorded a loss of compared to the year ended cost performance, a decrease impact) and iron ore production $502 million from investments December 31, 2014. Net interest in depreciation following the in Ukraine has decreased to reflect in associates, joint ventures and expense (interest expense less impairments recognized in 2015 a revised mine plan following a other investments for the year interest income) was $1.1 billion and higher average iron ore and delay in accessing new tailings ended December 31, 2015, as for the year ended December coal reference prices. Operating disposal land (approximately 1 compared with a loss of $172 31, 2016, a decrease of 12.8% loss in 2015 was negatively million tonnes impact). million for the year ended compared to the year ended impacted by the decrease in December 31, 2014. The loss for December 31, 2015, primarily due seaborne iron ore and coking coal ArcelorMittal had own iron ore the year ended December 31, to lower average cost resulting market prices noted above and production of 62.8 million tonnes 2015 included an impairment from debt repaid during the included impairment charges of for the year ended December charge of $283 million related to year. Net interest expense was $3.4 billion. 31, 2015, a decrease of 1.7% the Company’s 50% interest in the $1.3 billion for the year ended compared to the year ended joint venture Kalagadi Manganese December 31, 2015, a decrease of Operating loss for the Mining December 31, 2014. The decrease (Propriety) Ltd engaged in the 13% compared to the year ended segment for the year ended in iron ore production was development of the Kalagadi December 31, 2014 due to lower December 31, 2015 was $3.5 primarily due to lower production manganese ore deposits in South average cost resulting from debt billion, compared to operating in Kazakhstan, Brazil, Mexico Africa as a result of a downward repaid and raised during the year, income of $0.6 billion for the and Liberia offset by increases revision of cash flow projections despite the increased interest costs year ended December 31, 2014. due to higher production at the following an expected persistence following the ratings downgrades Operating loss in 2015 was Company’s Canadian operations. of lower manganese prices. It also that occurred during 2015. negatively impacted by the included an impairment charge decrease in seaborne iron ore and ArcelorMittal had own coking coal of $138 million with respect to Foreign exchange losses decreased coking coal market prices noted production of 6.3 million tonnes the Company’s Indian investee, to $3 million for the year ended above and included impairment for the year ended December of which $69 million on the December 31, 2016, as compared charges of $3.4 billion, including 31, 2016, an increase of 1.8% carrying value of the investment to $697 million the year ended $854 million with respect to the compared to the year ended and $69 million on related loans, December 31, 2015, primarily due Mining segment goodwill and December 31, 2015. The increase respectively, as a result of a to the stabilization of currencies in $2.5 billion related to tangible in coking coal production was downward revision of cash flow 2016 as compared to 2015 which and intangible assets in respect primarily due to higher production projections and a $101 million was impacted as described below. of iron ore mining operations in Princeton. impairment charge related to at ArcelorMittal Liberia ($1,426 the decrease in market value of Foreign exchange losses increased million), Las Truchas in Mexico ArcelorMittal had own coking coal the Company’s 12.08% interest to $0.7 billion for the year ended ($220 million), ArcelorMittal production of 6.1 million tonnes in Erdemir (Turkey). These losses December 31, 2015, an increase of Serra Azul in Brazil ($176 million) for the year ended December were partially offset by income 12.4% compared to $0.6 billion the and coal mining operations at 31, 2015, a decrease of 12.4% generated from the share swap year ended December 31, 2014, ArcelorMittal Princeton in the compared to the year ended agreement with respect to Gerdau, primarily due to an appreciation United States ($684 million). December 31, 2014. The decrease Brazil entered into on July 14, 2015, of the USD against the euro. This These impairments were mainly in coal production was primarily as part of which ArcelorMittal foreign exchange loss primarily Management report 23

relates to the impact of the USD partially offset by the fair value as compared to an income tax ArcelorMittal’s consolidated appreciation of an additional 10% adjustment for the mandatory expense of $0.9 billion for the year income tax expense (benefit) is against the euro (12% appreciation convertible bonds for $0.2 billion. ended December 31, 2015 and affected by the income tax laws for the year ended December 31, $0.5 billion for the year ended and regulations in effect in the 2014), a 32% appreciation against Other net financing costs December 31, 2014. The deferred various countries in which it the Brazilian real (12% appreciation (including expenses related to tax expense in 2016 includes $0.8 operates and the pre-tax results for the year ended December 31, True Sale of Receivables, bank billion increase in projections of its subsidiaries in each of these 2014) and a 46% devaluation of fees, interest on pensions and of future taxable income in countries, which can vary from the Kazakhstani tenge. fair value adjustments of the Luxembourg, $0.7 billion impact year to year. ArcelorMittal operates mandatorily convertible bond from the derecognition of deferred in certain jurisdictions, mainly in Other net financing costs and derivative instruments) were tax assets in Luxembourg related Eastern Europe and Asia, which (including expenses related to $0.9 billion for the year ended to revised expectations of the have a structurally lower corporate True Sale of Receivables, bank December 31, 2015, as compared deferred tax assets recoverability income tax rate than the statutory fees, interest on pensions and to $1.3 billion for the year ended in U.S. dollar terms, and $0.6 billion tax rate as in effect in Luxembourg fair value adjustments of the December 31, 2014, and included decrease following the change (26.01%), as well as in jurisdictions, mandatorily convertible bond an expense of $79 million relating in tax rate in Luxembourg. The mainly in Western Europe and the and derivative instruments) were to the extension of the mandatory increase in 2015 as compared Americas, which have a structurally stable at $0.9 billion for the year convertible bond. The reduction to 2014 is due to impairments higher corporate income tax rate. ended December 31, 2016 and the in the loss was mainly due to the of deferred tax assets stemming year ended December 31, 2015. change in the accretion of defined from lower future taxable results The statutory income tax expense Other net financing costs were benefit obligations and other long forecasts in some jurisdictions. (benefit) and the statutory income negatively affected by premiums term liabilities for $0.2 billion. For additional information related tax rates of the countries that and fees of $0.4 billion relating to ArcelorMittal’s income taxes, most significantly resulted in the to early redeemed bonds in 2016 Income tax expense (benefit) see note 9 to ArcelorMittal’s tax expense (benefit) at statutory and $0.1 billion non-cash expense consolidated financial statements. rate for each of the years ended in connection with the issuance ArcelorMittal recorded an income December 31, 2016, 2015 and of shares in the context of a tax expense of $1.0 billion for the 2014 are as set forth below: B-BBEE transaction in South Africa, year ended December 31, 2016

2016 2015 2014 Statutory income Statutory income Statutory income Statutory income Statutory income tax tax rate tax tax rate Statutory income tax tax rate United States 224 35.00% (863) 35.00% (352) 35.00% Argentina 22 35.00% 50 35.00% 59 35.00% France 17 28.92% (32) 34.43% 18 34.43% Brazil 86 34.00% (48) 34.00% 141 34.00% Belgium 71 33.99% 64 33.99% (10) 33.99% Germany (37) 30.30% (43) 30.30% (82) 30.30% Spain (47) 25.00% (146) 25.00% (78) 25.00% Luxembourg 196 26.01% (613) 29.22% (228) 29.22% Mexico 53 30.00% (55) 30.00% 9 30.00% South Africa (96) 28.00% (199) 28.00% (23) 28.00% Canada 98 26.10% 247 26.90% 298 26.90% Russia - 20.00% (1) 20.00% (18) 20.00% Kazakhstan 36 20.00% (48) 20.00% (4) 20.00% Czech Republic 3 19.00% 9 19.00% 38 19.00% Poland 33 19.00% 23 19.00% 25 19.00% Romania (11) 16.00% (10) 16.00% (12) 16.00% Ukraine 20 18.00% 11 18.00% 23 18.00% Trinidad & Tobago 66 25.00% (83) 25.00% (11) 25.00% Liberia 6 25.00% (388) 25.00% (30) 25.00% United Kingdom 15 17.00% 17 20.00% 55 20.00% Others (78) (38) 35 Total 677 (2,146) (147) Note: The statutory tax rates are the (future) rates enacted or substantively enacted by the end of the respective period. Non-controlling interests attributable to non-controlling Net loss attributable to non- related to losses generated interests for 2016 was primarily controlling interests was $477 by ArcelorMittal South Africa Net loss attributable to non- related to losses generated by million for the year ended and Liberia resulting from controlling interests was $45 ArcelorMittal South Africa partially December 31, 2015, as compared the impairments of the assets million for the year ended offset by income generated with net income attributable described above. December 31, 2016, as compared by ArcelorMittal Mines and to non-controlling interests of with net loss attributable to Infrastructure Canada and Belgo $112 million for the year ended non-controlling interests of Bekaert Arames in Brazil. December 31, 2014. Net loss $477 million for the year ended attributable to non-controlling December 31, 2015. Net loss interests for 2015 was primarily 24 Management report

Net loss attributable to equity As of December 31, 2016, in the event of a change in its certain adjustments as set out in holders of the parent ArcelorMittal’s cash and cash long-term credit ratings. In the facility) does not, at the end equivalents, including restricted the context of low steel prices of each “Measurement Period” ArcelorMittal’s net income cash of $114 million, amounted and challenging industry (each period of 12 months attributable to equity holders to $2.6 billion as compared to conditions, on February 3, 2015, ending on the last day of a of the parent for the year ended $4.1 billion as of December 31, Standard & Poor’s downgraded financial half-year or a financial December 31, 2016 amounted 2015. In addition, ArcelorMittal ArcelorMittal’s credit rating year of the Company), exceed a to $1.8 billion compared to had available borrowing capacity and, on December 18, 2015, it certain ratio, referred to by the net loss attributable to equity of $5.5 billion under its $5.5 placed ArcelorMittal on negative Company as the “Leverage ratio”. holders of $7.9 billion for the year billion revolving credit facility outlook. On November 12, ArcelorMittal’s principal credit ended December 31, 2015 and as of December 31, 2016, as 2015, Moody’s downgraded facilities set this ratio to 4.25 to 1, $1.1 billion for the year ended compared to available borrowing ArcelorMittal and placed it on whereas one facility has a ratio of December 31, 2014, for the capacity of $6.0 billion under negative outlook. On November 4.0 to 1. As of December 31, 2016, reasons discussed above. its $6.0 billion revolving credit 16, 2015, while Fitch affirmed its the Company was in compliance facility as of December 2015. credit rating of ArcelorMittal, it with both ratios. Liquidity and capital resources lowered its outlook to negative. As of December 31, 2016, Following the recovery in steel Non-compliance with the ArcelorMittal’s principal sources ArcelorMittal’s total debt, which prices in the U.S. and in Europe covenants in the Company’s of liquidity are cash generated includes long-term debt and during the first half of 2016, borrowing agreements would from its operations and its credit short-term debt, was $13.7 Moody’s increased its outlook to entitle the lenders under facilities at the corporate level. billion, compared to $19.8 billion stable on August 16, 2016. On such facilities to accelerate as of December 31, 2015. November 17, 2016, Standard the Company’s repayment Because ArcelorMittal is a holding & Poor’s revised its outlook obligations. The Company was company, it is dependent upon Net debt (defined as long-term to positive from negative for in compliance with the financial the earnings and cash flows debt ($11.8 billion) plus short- ArcelorMittal and affirmed its covenants in the agreements of, as well as dividends and term debt ($1.9 billion), less credit ratings of the Company. related to all of its borrowings distributions from, its operating cash and cash equivalents and The February 2015 downgrade as of December 31, 2016 and subsidiaries to pay expenses restricted cash ($2.6 billion)) was resulted in an increase in interest December 31, 2015. and meet its debt service $11.1 billion as of December paid of $28 million in 2015 and obligations. Significant cash or 31, 2016, down from $15.7 the November 2015 downgrade As of December 31, 2016, cash equivalent balances may billion at December 31, 2015 similarly resulted in increased ArcelorMittal had guaranteed be held from time to time at comprised of long-term debt interest expense but was partially approximately $0.1 billion of the Company’s international ($17.5 billion) plus short-term offset by the early repayments debt of its operating subsidiaries. operating subsidiaries, in debt ($2.3 billion), less cash and and tenders as described below. ArcelorMittal’s debt facilities particular those in France and cash equivalents and restricted have provisions whereby the in the United States, where cash ($4.1 billion). Net debt ArcelorMittal’s $5.5 billion acceleration of the debt of the Company maintains cash decreased primarily due to net revolving credit facility, which another borrower within the management systems under proceeds from the equity offering incorporates a first tranche ArcelorMittal group could, under which most of its cash and cash ($3.1 billion) and the Gestamp of $2.3 billion maturing on certain circumstances, lead to equivalents are centralized, asset sale ($1.0 billion), net cash December 21, 2019, and a acceleration under such facilities. and in Argentina, Brazil, provided by operations of $2.7 second tranche of $3.2 billion Canada, Morocco, South Africa billion (including an investment maturing on December 21, 2021, The following table summarizes and Ukraine. Some of these in operating working capital contains restrictive covenants. the repayment schedule of operating subsidiaries have of $1.0 billion), partly offset by Among other things, these ArcelorMittal’s outstanding debt outstanding or are subject capital expenditures of $2.4 covenants limit encumbrances indebtedness, which includes to acquisition agreements that billion. The proceeds from the on the assets of ArcelorMittal short-term and long-term debt, impose restrictions on such equity offering were used to and its subsidiaries, the ability as of December 31, 2016. operating subsidiaries’ ability repay debt. Most of the external of ArcelorMittal’s subsidiaries to pay dividends, but such debt is borrowed by the parent to incur debt and the ability of restrictions are not significant company on an unsecured basis ArcelorMittal and its subsidiaries in the context of ArcelorMittal’s and bears interest at varying to dispose of assets in certain overall liquidity. Repatriation of levels based on a combination circumstances. The agreement funds from operating subsidiaries of fixed and variable interest also requires compliance may also be affected by tax and rates. Gearing (defined as net with a financial covenant, as foreign exchange policies in place debt divided by total equity) at summarized below. from time to time in the various December 31, 2016 was 34% as countries where the Company compared to 57% at December The Company must ensure operates, though none of these 31, 2015. that the ratio of “Consolidated policies is currently significant Total Net Borrowings” in the context of ArcelorMittal’s The margin applicable to (consolidated total borrowings overall liquidity. ArcelorMittal’s principal credit less consolidated cash and cash facilities ($5.5 billion revolving equivalents) to “Consolidated In management’s opinion, credit facility and certain other EBITDA” (the consolidated ArcelorMittal’s credit facilities credit facilities) and the coupons net pre-taxation profits of are adequate for its present on certain of its outstanding the ArcelorMittal group for a requirements. bonds are subject to adjustment Measurement Period, subject to Management report 25

Repayment Amounts per Year (in billions of $) Type of Indebtedness as of December 31, 2016 2017 2018 2019 2020 2021 >2021 Total Bonds 0.6 1.4 1.6 1.8 1.3 4.8 11.5 Long-term revolving credit lines ------$2.3 billion tranche of $5.5 billion revolving credit facility ------$3.2 billion tranche of $5.5 billion revolving credit facility ------Other loans and commercial paper 1.3 0.1 0.3 0.1 0.1 0.3 2.2 Total gross debt 1.9 1.5 1.9 1.9 1.4 5.1 13.7 The following table summarizes the amount of credit available as of December 31, 2016, under ArcelorMittal’s $5.5 billion revolving credit facility:

Credit lines available Facility Amount Drawn Available $2.3 billion tranche of $5.5 billion revolving credit facility $2.3 - $2.3 $3.2 billion tranche of $5.5 billion revolving credit facility $3.2 - $3.2 Total committed lines $5.5 - $5.5 The average debt maturity of on this facility in the framework of • $63 million of its U.S. dollar price (including premiums and the Company was 7 years as of its cash management. denominated 5.125% Notes due accrued interest) of $160 million. December 31, 2016, as compared June 1, 2020 (the “June 2020 Following this purchase, $853 to 6.2 years as of December 31, On September 30, 2010, Notes”) for a total aggregate million principal amount of the 2015. ArcelorMittal entered into the purchase price (including August 2020 Notes remained $500 million revolving multi- premiums and accrued interest) outstanding. Further information regarding currency letter of credit facility of $68 million. Following this • $323 million of its U.S. dollar ArcelorMittal’s outstanding short- (the “Letter of Credit Facility”). The purchase, $324 million principal denominated 2021 Notes for a term and long-term indebtedness Letter of Credit Facility is used by amount of the June 2020 Notes total aggregate purchase price as of December 31, 2016, including the Company and its subsidiaries remained outstanding. (including premiums and accrued the breakdown between fixed for the issuance of letters of • $228 million of its U.S. dollar interest) of $347 million. Following rate and variable rate debt, credit and other instruments. denominated 5.25% Notes due this purchase, $1,177 million is set forth in note 6 to the The terms of the letters of credit August 5, 2020 (the “August 2020 principal amount of the 2021 consolidated financial statements. and other instruments contain Notes”) for a total aggregate Notes remained outstanding. Further information regarding certain restrictions as to duration. purchase price (including ArcelorMittal’s use of financial The Letter of Credit Facility was premiums and accrued interest) On June 3, 2016, at maturity, instruments for hedging purposes amended on October 26, 2012, of $253 million. Following this ArcelorMittal repaid its €1 billion is set forth in note 6 to the to reduce its amount to $450 purchase, $626 million principal 9.375% unsecured bonds. consolidated financial statements. million. On September 30, 2014, amount of the August 2020 the Company refinanced its Letter Notes remained outstanding. On May 20, 2016, ArcelorMittal Financings of Credit Facility by entering into • $421 million of its U.S. dollar redeemed its U.S. dollar a $350 million revolving multi- denominated 5.50% Notes due denominated $1.4 billion 4.5% The principal financings of currency letter of credit facility, March 1, 2021 (the “2021 Notes”) Notes due February 25, 2017, prior ArcelorMittal and its subsidiaries which matures on September 30, for a total aggregate purchase to their scheduled maturity for a are summarized below by 2018. price (including premiums total amount of $1,466 million, category. Further information and accrued interest) of $469 including premium and accrued regarding ArcelorMittal’s short- 2016 capital markets transactions million. Following this purchase, interest. term and long-term indebtedness $756 million principal amount is provided in note 6 to the On September 23, 2016, pursuant of the 2021 Notes remained In May 2016, pursuant to cash consolidated financial statements. to cash tender offers, ArcelorMittal outstanding. tender offers, ArcelorMittal purchased: purchased $408 million of its USD Principal credit facilities The 6.250% Notes due February 2019 Notes for a total aggregate • $420 million of its U.S. dollar 5, 2022 (the “2022 Notes”) were purchase price (including On December 21, 2016, denominated 6.125% Notes included in the cash tender offer, premiums and accrued interest) ArcelorMittal signed an agreement due June 1, 2018 (the “USD 2018 but none of the tendered Notes of $498 million. Following this for a $5.5 billion revolving credit Notes”) for a total aggregate were accepted. purchase, $1,092 million principal facility (the “Facility”). This Facility purchase price (including amount of the USD 2019 Notes amends and restates the $6 billion premiums and accrued interest) On June 29 and July 14, 2016, remained outstanding. revolving credit facility dated April of $457 million. Following this pursuant to cash tender offers, 30, 2015. The amended agreement purchase, $644 million principal ArcelorMittal repurchased: In April 2016, pursuant to cash incorporates a first tranche of $2.3 amount of the USD 2018 Notes tender offers, ArcelorMittal billion maturing on December 21, remained outstanding. • $113 million of its U.S. dollar repurchased: 2019, and a second tranche of $3.2 • $241 million of its U.S. dollar denominated June 2020 Notes for billion maturing on December 21, denominated 9.85% Notes due a total aggregate purchase price • $437 million of its U.S. dollar 2021, restoring the Facility to the June 1, 2019 (the “USD 2019 (including premiums and accrued denominated USD 2018 Notes original tenors of 3 years and 5 Notes”) for a total aggregate interest) of $119 million. Following for a total aggregate purchase years. The Facility may be used for purchase price (including this purchase, $387 million price (including premiums general corporate purposes. As of premiums and accrued interest) principal amount of the June 2020 and accrued interest) of $467 December 31, 2016, the $5.5 billion of $301 million. Following this Notes remained outstanding. million. Following this purchase, revolving credit facility was fully purchase, $851 million principal • $147 million of its U.S. dollar $1,063 million principal amount available. The Company makes amount of the USD 2019 Notes denominated August 2020 Notes of USD 2018 Notes remained drawdowns from and repayments remained outstanding. for a total aggregate purchase outstanding. 26 Management report

• €460 million of its euro Other loans and facilities 31, 2016, the facilities, totaling meeting of shareholders held on denominated 4.625% Notes due approximately $0.7 billion, remain May 5, 2015, and the dividend was November 17, 2017 (the “Euro On December 20, 2013, fully available. paid in full on June 15, 2015. 2017 Notes”) for a total aggregate ArcelorMittal entered into a term On November 6, 2015, purchase price (including loan facility in an aggregate True sale of receivables (“TSR”) ArcelorMittal’s Board of Directors premiums and accrued interest) amount of $300 million, maturing programs proposed the suspension of of €511 million. Following this on December 20, 2016. The facility the dividend for the financial purchase, €540 million principal was repaid at maturity. The Company has established year 2015. This proposal was amount of Euro 2017 Notes a number of programs for sales approved by the shareholders at remained outstanding. On December 16, 2016, without recourse of trade accounts the annual general meeting held • €166 million of its euro ArcelorMittal signed a €350 receivable to various financial on May 4, 2016. The Company has denominated 4.50% Notes due million finance contract with institutions (referred to as True indicated that a dividend will not March 29, 2018 (the “Euro 2018 the European Investment Bank Sale of Receivables (“TSR”)) for be proposed until its leverage has Notes”) for a total aggregate in order to finance European an aggregate amount of $5,222 further improved. purchase price (including research, development and million as of December 31, 2016. premiums and accrued interest) innovation projects over the This amount represents the ArcelorMittal held 7,222,439 shares of €181 million. Following this period 2017-2020 within the maximum amount of unpaid in treasury as of December 31, purchase, €334 million principal European Union, predominantly receivables that may be sold and 2016, as compared to 8,581,090 amount of the Euro 2018 Notes in France, Belgium and Spain, but outstanding at any given time. shares as of December 31, 2015. remained outstanding. also in Czech Republic, Poland, Of this amount, the Company As of December 31, 2016, the Luxembourg and Romania. has utilized $4,708 million and number of shares held by the Mandatory convertible bond This operation benefits from a $4,580 million, as of December Company in treasury represented guarantee from the European 31, 2016 and 2015, respectively. approximately 0.24% of the On November 23, 2015, the Union under the European Fund Through the TSR programs, Company’s total issued share Company announced the for Strategic Investments. As of certain operating subsidiaries capital. extension of the conversion date December 31, 2016, the facility of ArcelorMittal surrender for the $1 billion privately placed remains fully available. the control, risks and benefits Pension/OPEB liabilities mandatory convertible bond (the associated with the accounts “MCB”) issued on December 28, On July 15, 2010, the Company receivable sold; therefore, the The defined benefit liabilities for 2009 by one of its wholly-owned entered into an agreement amount of receivables sold is employee benefits decreased Luxembourg subsidiaries. This with the EIB for the financing of recorded as a sale of financial $1.0 billion to $8.1 billion as of amendment to the MCB, which activities for research, engineering assets and the balances are December 31, 2016, as compared is mandatorily convertible into and technological innovation removed from the consolidated to $9.1 billion as of December preferred shares of such subsidiary, related to process improvements statements of financial position 31, 2015. The decrease is mainly was executed on November 20, and new steel product at the moment of sale. The total due to the ratification of the new 2015. The mandatory conversion developments. The full amount amount of receivables sold under labor agreement by the United date of the bond has been of €250 million was drawn on TSR programs and derecognized Steelworkers “USW” in June 2016 extended to January 31, 2018. September 27, 2011 and repaid at in accordance with IAS 39 for the with changes mainly to healthcare The other main features of maturity on September 27, 2016. years ended 2016, 2015 and 2014 post-retirement benefits in the MCB remain unchanged. was $33.5 billion, $33.1 billion ArcelorMittal USA resulting in a The bond was privately placed On May 23, 2016, ArcelorMittal and $37.8 billion, respectively gain of $832 million, return on with a Luxembourg affiliate of USA LLC signed a $1 billion senior (with amounts of receivables sold plan assets and other actuarial Credit Agricole Corporate and secured asset-based revolving converted to U.S. dollars at the assumptions, partially offset by Investment Bank and is not listed. credit facility maturing on May monthly average exchange rate). an increase due to the decreased In connection with the extension 23, 2021. Borrowings under the Expenses incurred under the TSR discount rates during 2016. For of the conversion date of the MCB, facility are secured by inventory programs (reflecting the discount additional information with ArcelorMittal also extended the and certain other working capital granted to the acquirers of the respect to the Company’s pension maturities of the equity-linked and related assets of ArcelorMittal accounts receivable) recognized plan and OPEB liabilities, including notes in which the proceeds of the USA and certain of its subsidiaries in the consolidated statements a breakdown by region and by MCB issuances are invested. in the United States. The facility of operations for the years ended type of plan, see note 7.2 to the may be used for general corporate December 31, 2016, 2015 and 2014 consolidated financial statements. Commercial paper program purposes. The facility is not were $106 million, $116 million guaranteed by ArcelorMittal. As and $150 million, respectively. Sources and uses of cash ArcelorMittal has a commercial of December 31, 2016, $0.5 billion paper program enabling was drawn. Earnings distribution Years ended December 31, 2016, borrowings of up to €1 billion. 2015 and 2014 As of December 31, 2016, the During the six months ended On February 13, 2015, outstanding amount was $392 June 30, 2014, ArcelorMittal ArcelorMittal’s Board of Directors The following table presents million, compared to $71 million as entered into certain short-term announced a gross dividend a summary of cash flow of of December 31, 2015. committed bilateral credit facilities. payment of $0.20 per share. The ArcelorMittal: The facilities were extended in dividend was approved by the 2015 and 2016. As of December shareholders at the annual general

Summary of Cash Flow For the year endend December 31, (in $ millions) 2016 2015 2014 Net cash provided by operating activities 2,708 2,151 3,870 Net cash used in investing activities (1,143) (2,170) (3,077) Net cash (used in) provided by financing activities (2,926) 395 (2,750) Management report 27

Net cash provided by operating ArcelorMittal’s major capital Net cash (used in) provided by Dividends paid during the year activities expenditures in the year ended financing activities ended December 31, 2014 were December 31, 2016 included the $0.5 billion, including $328 million For the year ended December following projects: the Indiana Net cash used by financing paid to ArcelorMittal shareholders, 31, 2016, net cash provided by Harbor footprint optimization activities was $2.9 billion for the $22 million paid to holders of operating activities increased project in NAFTA; an upgrade year ended December 31, 2016, subordinated perpetual capital to $2.7 billion, as compared HSM and new furnace in Gent as compared to net cash provided securities and $108 million paid with $2.2 billion for the year and annealing line transformation by financing activities of $0.4 to non-controlling shareholders in ended December 31, 2015. The in Liège; the conversion of the billion in 2015. The increase in cash subsidiaries. increase in net cash provided by current galvanizing line #4 used in financing activities was operating activities is mainly due in ArcelorMittal Dofasco to a primarily due to $6.0 billion net Equity to decreased costs, a decrease in Galvalume line; the meltshop payments/proceeds for short and interest paid following the debt expansion in Juiz de Fora; the long-term debt, partially offset by Equity attributable to the equity repayments as discussed below, HRM extension and HDG increase the $3.1 billion proceeds from the holders of the parent increased partially offset by an investment in at ArcelorMittal Krakow; the Company’s equity offering. For to $30.1 billion at December 31, “operating working capital” of $1.0 construction of a new rolling mill in further details, see “Liquidity and 2016, as compared to $25.3 billion billion which represents changes Acindar and the expansion project capital resources” above. at December 31, 2015, primarily in cash flows for trade accounts in Liberia. See “Capital expenditure due to net income attributable to receivable ($0.4 billion), inventories projects” for a summary of these Net cash provided by financing the equity holders of the parent ($2.1 billion) and trade accounts and other projects. activities was $0.4 billion for the of $1.8 billion and the equity payable and other ($1.4 billion). year ended December 31, 2015, offering for $3.1 billion. See note Net cash used in investing as compared to net cash used 10 to ArcelorMittal’s consolidated For the year ended December activities was $2.2 billion for the in financing activities of $2.8 financial statements for the year 31, 2015, net cash provided by year ended December 31, 2015 as billion in 2014. The decrease in ended December 31, 2016. operating activities decreased compared to $3.1 billion for the cash used in financing activities to $2.2 billion, as compared with year ended December 31, 2014. was primarily due to $3.8 billion Equity attributable to the equity $3.9 billion for the year ended This decrease is mainly related to in proceeds from the issuance holders of the parent decreased December 31, 2014, mainly due a decrease in capital expenditures, of short and long-term debt to $25.3 billion at December 31, to an operating working capital which amounted to $2.7 billion for partly offset by payments of $3.0 2015, as compared to $42.1 billion investment. Net cash provided the year ended December 31, 2015 billion for short and long-term at December 31, 2014, primarily by operating activities for the as compared to $3.7 billion for the debt. Proceeds included receipts due to a $8.2 billion decrease in year ended December 31, 2015 year ended December 31, 2014. from the issuance of debenture the foreign exchange translation included an investment in Net inflows from other investing loans amounting to $2.6 billion, reserve as a result of the operating working capital for $0.4 activities amounted to $0.5 billion including $2.1 billion related to depreciation of most currencies billion, including a $0.3 billion including an inflow of $0.2 billion the issuance of Notes under the against the U.S. dollar, $0.1 billion decrease in accounts receivable for the sale of tangible assets Company’s Euro Medium Term of recognized actuarial losses, and $0.3 billion decrease in (including the Liberté building in Notes Programme (€750 million a $0.3 billion decrease in the inventories, partially offset by an Luxembourg), $0.1 billion from the 3.125% Notes due January 14, revaluation reserve on derivative increase in trade payables of $1.0 exercise of the fourth put option 2022, €400 million Floating Rate instruments and available-for-sale billion. on Hunan Valin shares and $0.1 Notes due April 9, 2018, €500 securities, the net loss attributable billion for cash collateral received. million 3.00% Notes due April 9, to the equity holders of the parent Net cash used in investing In 2015, capital expenditure of $2.7 2021 and CHF 225 million 2.5% of $7.9 billion and dividend activities billion included $2.2 billion related Notes due July 3, 2020) and $1 payments of $0.3 billion. See note to non-growth projects (including billion in proceeds from the 10 to ArcelorMittal’s consolidated Net cash used in investing health and safety investments) issuance of $500 million 5.125% financial statements for the year activities was $1.1 billion for the and $0.5 billion dedicated to Notes due June 1, 2020 and $500 ended December 31, 2016. year ended December 31, 2016 as growth projects mainly in Mining. million 6.125% Notes due June 1, compared to $2.2 billion for the ArcelorMittal’s major capital 2025. Payments mainly include the Research and Development, year ended December 31, 2015. expenditures in the year ended repayment of a $1.0 billion loan Patents and Licenses This decrease is mainly related to December 31, 2015 included the with a financial institution and the cash inflows from other investing following major projects: wire redemption of the Company’s $1 Costs relating to research and activities which includes $1.0 rod production expansion in billion 3.75% Unsecured Notes development, patents and billion proceeds from the sale of Monlevade; the construction of a due August 5, 2015, and its $500 licenses were not significant as a ArcelorMittal’s stake in Gestamp, heavy gauge galvanizing line to million 3.75% notes due March percentage of sales. Research and $0.2 billion proceeds from the sale optimize galvanizing operations 1, 2016, prior to their scheduled development costs expensed (and of ArcelorMittal’s stake in Hunan in ArcelorMittal Dofasco rebar; maturity. included in selling, general and Valin, $0.1 billion proceeds from the meltshop expansion in Juiz de administration expenses) in 2016, the sale of ArcelorMittal Zaragoza Fora; the HRM extension and HDG Dividends paid to non-controlling 2015 and 2014, amounted to $239 and $0.1 billion proceeds from the increase at ArcelorMittal Krakow; shareholders in subsidiaries during million, $227 million and $259 sale of Long Carbon facilities in the construction of a new rolling the year ended December 31, million, respectively. the U.S., LaPlace and Vinton. These mill in Acindar and the expansion 2016 was $61 million. Dividends cash inflows are offset by capital project in Liberia. paid during the year ended Trend Information expenditures of $2.4 billion for the December 31, 2015 were $0.4 year ended December 31, 2016, a In 2017, capital expenditure is billion, including $331 million paid All of the statements in this “Trend decrease from $2.7 billion for the expected to be approximately $2.9 to ArcelorMittal shareholders and Information” section are subject to year ended December 31, 2015. billion. See “Capital expenditure $85 million paid to non-controlling and qualified by the information projects”. shareholders in subsidiaries. set forth under the “Cautionary 28 Management report

Statement Regarding Forward- to $5.0 billion (from $4.5 billion amounts, such amounts have not As part of its financial risk Looking Statements”. See also in 2016). The Company expects been comprehensively revalued management activities, “Key factors affecting results of the working capital needs of the for purposes of this annual report ArcelorMittal uses derivative operations”. business to be largely determined since that date, and therefore, instruments to manage its by price developments during the the current estimates of fair value exposure to changes in interest Outlook course of the year. may differ significantly from the rates, foreign exchange rates amounts presented below. The and commodities prices. These Global apparent steel Own iron ore production for the estimated fair values of certain instruments are principally interest consumption (“ASC”) is estimated mining segment is expected financial instruments have been rate, currency and commodity to have expanded by 1% in 2016. to increase in 2017 with the determined using available swaps, spots and forwards. Based on the current economic transition to the Gangra deposit market information or other ArcelorMittal may also use futures outlook, ArcelorMittal expects in Liberia (project under review valuation methodologies that and options contracts. global ASC to grow further in 2017 and subject to Board of Directors require considerable judgment by between 0.5% and 1.5%. By approval - additional production to in interpreting market data and Counterparty risk region: ASC in the U.S. declined potentially reach 3 million tonnes developing estimates. in 2016 by approximately 1.0% per year, representing an increase ArcelorMittal has established to 1.5%, driven in large part by a of 1 million tonnes per year as See note 6 to ArcelorMittal’s detailed counterparty limits to significant destock in the second compared to 2016, until full ramp consolidated financial statements mitigate the risk of default by its half of 2016. However, underlying up to 5 million tonnes per year in for quantitative information counterparties. The limits restrict demand continues to expand 2018) and the restart of the Volcan about risks relating to financial the exposure ArcelorMittal may and the expected absence of a mine in Mexico in the first quarter instruments, including financial have to any single counterparty. further destock in 2017 should of 2017 for the remainder of 2017 instruments entered into Counterparty limits are calculated support ASC growth in the U.S. due to economical extraction pursuant to the Company’s risk taking into account a range of of approximately 3.0% to 4.0% (additional 2 million tonnes) and management policies. factors that govern the approval in 2017. In Europe, ArcelorMittal production recovery in Ukraine of all counterparties. The factors expects the pick-up in underlying following resolution of issues Risk management include an assessment of the demand to continue, supported described above. counterparty’s financial soundness by the strength of the automotive ArcelorMittal has implemented and its ratings by the major rating end market, but apparent demand The Board of Directors has strict policies and procedures to agencies, which must be of a high is expected to grow modestly reviewed the progress made manage and monitor financial quality. Counterparty limits are by 0.5% to 1.5% in 2017 (versus in 2016, and although not market risks. Organizationally, monitored on a periodic basis. growth of 1.5% to 2.0% in 2016). concerned by the sustainability supervisory functions are In Brazil, following the significant of the Company’s performance, it separated from operational All counterparties and their decline in ASC in 2016 (13.0% to nevertheless wants to see further functions, with proper segregation respective limits require the prior 13.5%) ASC is expected to grow by progress. As such, deleveraging of duties. Financial market approval of the Corporate Finance 3% to 4% in 2017 as the economy remains the near-term priority for activities are overseen by the CFO, and Tax Committee. Standard mildly recovers as consumer surplus cash flow and the Board the Corporate Finance and Tax agreements, such as those confidence returns. In the CIS, of Directors decided against Committee and the CEO Office. published by the International following an ASC decline of 3.5% proposing a dividend from 2016 Swaps and Derivatives Association, to 4.0% in 2016, the region should earnings. All financial market risks are Inc. (ISDA) are negotiated stabilize in 2017 with ASC similar managed in accordance with with all ArcelorMittal trading to 2016 levels (decline from a Disclosures about market risks the Treasury and Financial Risk counterparties. negative 0.5% to a positive 0.5%). Management Policy. These risks are In China, following ASC growth ArcelorMittal is exposed to a managed centrally through Group Currency exposure of 1% to 1.5% in 2016, demand number of different market risks Treasury by a group specializing is expected to stabilize in 2017 arising from its normal business in foreign exchange, interest rate, ArcelorMittal seeks to manage (decline of around 0% to 1.0%) activities. Market risk is the commodity, internal and external each of its entities’ exposure to its as the ongoing weakness in the possibility that changes in raw funding and cash and liquidity operating currency. For currency real estate sector is expected materials prices, foreign currency management. exposure generated by activities, to be offset in part by robust exchange rates, interest rates, the conversion and hedging of infrastructure and automotive end base metal prices (zinc, nickel, All financial market hedges are revenues and costs in foreign markets. aluminum and tin) and energy governed by ArcelorMittal’s currencies is typically performed Capital expenditure spend in 2017 prices (oil, natural gas and power) Treasury and Financial Risk using currency transactions on the is expected to increase to $2.9 will adversely affect the value of Management Policy, which spot market and forward market. billion (from $2.4 billion in 2016) ArcelorMittal’s financial assets, includes a delegated authority For some of its business segments, as the Company seeks to capitalize liabilities or expected future cash and approval framework, sets ArcelorMittal hedges future cash on opportunities to grow value flows. the boundaries for all hedge flows. and returns. In addition, interest activities and dictates the required expense is expected to decline The fair value information approvals for all Treasury activities. Because a substantial portion to $0.9 billion (as compared presented below is based on Hedging activity and limits of ArcelorMittal’s assets, to $1.1 billion in 2016); while the information available to are monitored on an ongoing liabilities, sales and earnings cash payments for taxes and management as of the date of basis. ArcelorMittal enters into are denominated in currencies contributions to fund pensions the consolidated statements transactions with numerous other than the U.S. dollar (its are expected to increase by $0.2 of financial position. Although counterparties, mainly banks and reporting currency), ArcelorMittal billion. As a result, the Company ArcelorMittal is not aware of any financial institutions, as well as has exposure to fluctuations in expects these cash requirements factors that would significantly brokers, major energy producers the values of these currencies of the business in 2017 to increase affect the estimated fair value and consumers. relative to the U.S. dollar. These Management report 29

currency fluctuations, especially in a different currency. For ArcelorMittal faces translation risk, on net debt denominated in a the fluctuation of the value of the example, ArcelorMittal’s non-U.S. which arises when ArcelorMittal currency different than the euro, is U.S. dollar relative to the euro, subsidiaries may purchase raw translates the financial statements computed based on historical data the Canadian dollar, Brazilian real, materials, including iron ore and of its subsidiaries, denominated of how such currency would move South African rand, Kazakh tenge coking coal, in U.S. dollars, but in currencies other than the against the U.S. dollar when the and Ukrainian hryvnia, as well may sell finished steel products in U.S. dollar for inclusion in U.S. dollar appreciates/depreciates as fluctuations in the currencies other currencies. Consequently, an ArcelorMittal’s consolidated 10% against the euro. A positive of the other countries in which appreciation of the U.S. dollar will financial statements. sign means an increase in the net ArcelorMittal has significant increase the cost of raw materials, debt. operations and/or sales, could thereby negatively impacting the The tables below illustrate the have a material impact on its Company’s operating margins, impact of an appreciation and results of operations. unless the Company is able to pass a depreciation of the U.S. dollar along the higher cost in the form of 10% against the euro, on the ArcelorMittal faces transaction of higher selling prices. conversion of the net debt of risk, where its businesses generate ArcelorMittal into U.S. dollars sales in one currency but incur as of December 31, 2016 and costs relating to that revenue December 31, 2015. The impact

Impact on net debt translation of a 10% Impact on net debt translation of a 10% depreciation of Currency appreciation of the U.S. dollar against the euro the U.S. dollar against the euro in $ equivalent in $ equivalent In 2016 (in millions) (in millions) Chinese renminbi 2 (2) Euro (392) 392 Moroccan dirham 4 (4) South African rand (1) 1 Swiss franc (14) 16 Ukrainian hryvnia 1 (1) Other 8 (5)

Impact on net debt translation of a 10% Impact on net debt translation of a 10% depreciation of Currency appreciation of the U.S. dollar against the euro the U.S. 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 South African rand 1 (1)

Derivative instruments Interest rate sensitivity Commodity price risk For the Company’s tabular presentation of information ArcelorMittal uses derivative Cash balances, which are primarily ArcelorMittal utilizes a number of related to its market risk sensitive instruments to manage its composed of euros and U.S. dollars, exchange-traded commodities instruments, please see note exposure to movements in interest are managed according to the short in the steel-making process. In 6 to the consolidated financial rates, foreign exchange rates and term (up to one year) guidelines certain instances, ArcelorMittal is statements. commodity prices. Changes in the established by senior management the leading consumer worldwide fair value of derivative instruments on the basis of a daily interest rate of certain commodities. In some In respect of non-exchange traded are recognized in the consolidated benchmark, primarily through businesses and in certain situations, commodities, ArcelorMittal is statements of operations or in short-term currency swaps, without ArcelorMittal is able to pass this exposed to volatility in the prices equity according to nature and modifying the currency exposure. exposure on to its customers. The of raw materials such as iron ore effectiveness of the hedge. residual exposures are managed as (which is generally correlated Interest rate risk on debt appropriate. with steel prices with a time lag) Derivatives used are non-exchange- and coking coal. This exposure is traded derivatives such as over-the- ArcelorMittal’s policy consists of Financial instruments related to almost entirely managed through counter swaps, options and forward incurring debt at fixed and floating commodities (base metals, energy, long-term contracts, however some contracts. interest rates, primarily in U.S. freight and emission rights) are hedging of iron ore exposures is dollars and euros according to utilized to manage ArcelorMittal’s made through derivative contracts. For the Company’s tabular general corporate needs. Interest exposure to price fluctuations. For a more detailed discussion of presentation of information rate and currency swaps are utilized ArcelorMittal’s iron ore and coking related to its market risk sensitive to manage the currency and/or Hedges in the form of swaps and coal purchases, see “Raw materials”. instruments, please see note interest rate exposure of the debt. options are utilized to manage 6 to the consolidated financial the exposure to commodity price statements. For the Company’s tabular fluctuations. presentation of the fair values of its short and long term debt, please see note 6 to the consolidated financial statements. 30 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 ArcelorMittal not its legal or ownership structure.

NAFTA Europe

ArcelorMittal ArcelorMittal AMFCE ArcelorMittal ArcelorMittal Mexico USA Belgium Belval & Differdange

ArcelorMittal ArcelorMittal ArcelorMittal ArcelorMittal ArcelorMittal Las Truchas Dofasco España Eisenhüttenstadt Hamburg

ArcelorMittal ArcelorMittal ArcelorMittal ArcelorMittal Long Products Ostrava Duisburg Poland Canada

ArcelorMittal ArcelorMittal ArcelorMittal Méditerranée Bremen Galati

ArcelorMittal Atlantique & Lorraine Management report 31

ArcelorMittal

Brazil ACIS Mining

ArcelorMittal Acindar ArcelorMittal ArcelorMittal ArcelorMittal ArcelorMittal Brasil South Africa Kryvyi Rih Mines and Kryvyi Rih Infrastructure Canada

ArcelorMittal ArcelorMittal ArcelorMittal ArcelorMittal Temirtau International Termitau Liberia Luxembourg 32 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 G.P. ArcelorMittal Dofasco Canada ArcelorMittal México 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 Long Products Canada G.P. ArcelorMittal Long Products Canada 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 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 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 Mining Canada G.P. and ArcelorMittal Infrastructure Canada G.P.1 ArcelorMittal Mines and Infrastructure Canada Canada ArcelorMittal Liberia Ltd ArcelorMittal Liberia Liberia JSC ArcelorMittal Temirtau ArcelorMittal Temirtau Kazakhstan PJSC ArcelorMittal Kryvyi Rih ArcelorMittal Kryvyi Rih Ukraine

1 The business formerly carried on by ArcelorMittal Mines Canada Inc. is now carried on by ArcelorMittal Mining Canada G.P. and ArcelorMittal Infrastructure G.P. Key transactions and events in • During 2016, ArcelorMittal using a new class of notionally Share Trust for the benefit of 2016 completed certain divestment funded shares to a special AMSA employees and AMSA and other investment purpose vehicle owned by management. All the shares ArcelorMittal’s principal transactions not listed below. Likamva Resources Proprietary have certain restrictions investments, acquisitions and Please refer to notes 2.3 and 2.5 Limited (Likamva). Likamva on disposal for a period of disposals, and other key events to the consolidated financial has undertaken to introduce 10 years (“Lock-in Period”), that occurred during the year statements within this report for broad-based social and thereby promoting long-term ended December 31, 2016 are a summary of the transactions. community development sustainable B-BBEE in AMSA. summarized below. organizations as shareholders The shares were issued on • On September 28, 2016, to hold an effective 5% interest December 7, 2016. • During 2016, ArcelorMittal ArcelorMittal South Africa (of the 17%, leaving Likamva completed several financing (“AMSA”) announced that it with a 12% shareholding) and repayment transactions. had entered into agreements within 24 months; and a Please refer to “Liquidity and to implement a Broad-Based 5.1% shareholding in AMSA capital resources Financings” for Black Economic Empowerment using another new class of a summary of the transactions. (B-BBEE) transaction which notionally funded shares to includes: the issuance of a the ArcelorMittal South Africa 17% shareholding in AMSA Employee Empowerment Management report 33

• On August 2, 2016, the Company Following the equity offering, the HKEx listing requirement. The service to its customer base. signed an agreement for the sale ArcelorMittal’s issued share trading of China Oriental’s shares, The transaction is subject to of its 10.08% interest in Hunan capital consists of 3,065,710,869 which had been suspended regulatory approvals in Brazil, Valin to a private equity fund. shares without nominal value. since April 29, 2014, resumed including the approval of the On September 14, 2016, the on February 1, 2017. Following Brazilian anti-trust authority Company transferred the Hunan • On April 4, 2016, ArcelorMittal this share placing, ArcelorMittal’s CADE. Valin shares and simultaneously completed the sale of its US interest in China Oriental received the full proceeds of LaPlace and Vinton Long Carbon decreased to 39%. Corporate governance $165 million (RMB1,103 million) facilities to an affiliate of Black from the buyer and recorded a Diamond Capital Management • On February 10, 2017, The “Corporate Governance” gain of $74 million. (‘Black Diamond’). The LaPlace, ArcelorMittal’s announced section of ArcelorMittal’s Annual Louisiana facility, along with that its Board of Directors has Report 2016 contains a full • On July 28, 2016, ArcelorMittal a rolling mill in Harriman, proposed a share consolidation overview of the Company’s signed an agreement with Tennessee, produces billets, based on a ratio 1:3, where every corporate governance practices. Megasa Siderúrgica S.L. for angles, flats, channels and beams. three current shares will be the sale of its wholly owned The Vinton facility, located in El consolidated into one share (with Directors and senior management subsidiary ArcelorMittal Zaragoza Paso, Texas, produces rebar and a change to the number of shares in Spain for total consideration grinding media. Simultaneously, outstanding and the nominal Board of Directors of €80 million ($89 million). ArcelorMittal has entered into value of the shares outstanding). The closing conditions were a transition services agreement This proposal is subject to ArcelorMittal places a strong completed on September 30, with Black Diamond, in order shareholder approval at an emphasis on corporate 2016. to facilitate a smooth transition Extraordinary General Meeting governance. ArcelorMittal has period and ensure no business of Shareholders expected to be eight independent directors on its • On June 30, 2016, ArcelorMittal disruption. held on May 10, 2017 which, if 12 member Board of Directors. The and Marcegaglia announced approved, will be implemented Board’s Audit & Risk Committee that they had submitted • On February 1, 2016, shortly thereafter. Details will and Appointments, Remuneration an indicative offer for the ArcelorMittal completed the be published in the convening and Corporate Governance acquisition of Ilva (Italy), an sale of its 35% stake in Gestamp notice for the General Meeting of Committee (“ARCG Committee”) Italian company engaged in Automoción (“Gestamp”) Shareholders that is expected to are each comprised exclusively of the production and processing to the majority shareholder, be published in April 2017. independent directors. of steel products, which has the Riberas family, for total been declared insolvent and cash consideration of €875 • On February 23, 2017, The annual general meeting of is currently subject to the million ($971 million) received ArcelorMittal and Votorantim shareholders on May 4, 2016 extraordinary administration of in the second quarter of S.A. announced the signing acknowledged the expiration of the commissioners appointed 2016. In addition to the cash of an agreement, pursuant to the terms of office of Mrs. Vanisha by the Italian Government. consideration, ArcelorMittal which Votorantim’s long steel Mittal Bhatia, Mrs. Suzanne The commissioners are received a payment of €10 businesses in Brazil, Votorantim Nimocks and Mr. Jeannot Krecké. carrying out a procedure for million ($11 million) for the Siderurgia, will become a the lease and subsequent 2015 dividend in the second subsidiary of ArcelorMittal At the same meeting, the sale of the businesses of Ilva quarter of 2016. ArcelorMittal will Brasil and Votorantim will hold shareholders re-elected Mrs. and its subsidiaries through a continue its supply relationship a non-controlling interest in Vanisha Mittal Bhatia, Mrs. Suzanne competitive bid process, which is with Gestamp through its 35% ArcelorMittal Brasil. Votorantim’s Nimocks and Mr. Jeannot Krecké ongoing. shareholding in Gonvarri Steel long steel operations in for a new term of three years each. Industries, a sister company of Argentina (Acerbrag) and The shareholders also elected Mr. • On June 23, 2016, ArcelorMittal Gestamp. ArcelorMittal sells Colombia (PazdelRío) were not Karel de Gucht for a three-year announced its new contract with coils to Gonvarri Steel Industries included in the transaction. The term. the United Steelworkers (USW) for processing before they combination of the businesses The Board of Directors is was ratified by USW-represented pass to Gestamp and other will result in a long product steel composed of 12 directors, of which employees. The three-year customers. Further, ArcelorMittal producer with annual crude steel 11 are non-executive directors and collective bargaining agreement will continue to have a board capacity of 5.6 million tonnes eight are independent directors. covers more than 12,000 USW- presence in Gestamp, collaborate and annual rolling capacity of 5.4 The Board of Directors comprises represented employees at 13 in automotive R&D and remain million tonnes. The combined only one executive director, Mr. of the Company’s United States its major steel supplier. operations include ArcelorMittal Lakshmi N. Mittal, the Chairman facilities in Indiana, Illinois, Brasil’s production sites at and Chief Executive Officer of Minnesota, Ohio, Pennsylvania Monlevade, Cariacica, Juiz de ArcelorMittal. and West Virginia. Recent developments Fora, Piracicaba and Itaúna, and Votorantim Siderurgia’s Mr. Lewis B. Kaden is the Lead • On April 8, 2016, ArcelorMittal • On January 27, 2017, China production sites at Barra Mansa, Independent Director. In the completed an equity offering Oriental, a Chinese integrated Resende and its participation most recent assessment of the with net proceeds of $3.1 billion. iron and steel conglomerate in Sitrel, in Três Lagoas. The Company’s leadership structure, New shares of 1,262,351,531 listed on the Hong Kong Stock merger is expected to generate the ARCG Committee reviewed were issued at a subscription Exchange (“HKEx”) in which cost, logistical and operational the key duties and responsibilities price of €2.20 per new share. ArcelorMittal held a 47% synergies. The combined of the Company’s Chairman and The Mittal family trust entities associated interest, announced businesses’ production Chief Executive Officer and its Lead exercised their rights for the completion of a share placing facilities are geographically Independent Director as follows: new shares pro rata to their in order to restore the minimum complementary, enabling closer shareholding of 37.38%. 25% free float requirement as per proximity and higher levels of 34 Management report

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 CEO Office and Executive Officers of the Company and frequently * Leads the Board of Directors’ self-evaluation process and such other duties as are meets stakeholders and provides feedback to the Board of Directors assigned from time to time by the Board of Directors 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 66 May 1997 May 2017 and Chief Executive Officer Lewis B. Kaden 1 2 3 74 April 2005 May 2017 Lead Independent Director Vanisha Mittal Bhatia 36 December 2004 May 2019 Director Narayanan Vaghul1 3 80 July 1997 May 2018 Director Wilbur L. Ross1 3 79 April 2005 May 2018 Director Jeannot Krecké 66 January 2010 May 2019 Director Suzanne P. Nimocks2 3 57 January 2011 May 2019 Director Bruno Lafont1 3 60 May 2011 May 2017 Director Tye Burt2 3 59 May 2012 May 2018 Director Michel Wurth 62 May 2014 May 2017 Director Karyn Ovelmen1 3 53 May 2015 May 2018 Director Karel de Gucht1 3 62 May 2016 May 2019 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, 2016. 5 Date of joining the Board of ArcelorMittal or, if prior to 2006, its predecessor Mittal Steel Company NV. Mr. Antoine Spillmann stepped is an active philanthropist and a International and LNM Holdings vision, entrepreneurship, down from the Board in May 2016. member of various boards and to form Mittal Steel in December leadership and success in global trusts, including chairman of 2004, with the simultaneous steel development. He was named Anne van Ysendyck is the Group the board of Aperam and the acquisition of International Steel Fortune magazine’s ‘European General Counsel and Company boards of Goldman Sachs and Group, he led the formation of Businessman of the Year 2004’. Secretary and, accordingly, acts as Airbus N.V (previously EADS NV). the world’s steel producer at the Mr. Mittal was awarded ‘Business secretary of the Board of Directors. He is a member of the Foreign time. In 2006, he orchestrated Person of 2006’ by the Sunday Investment Council in Kazakhstan, Mittal Steel and Arcelor’s merger Times, ‘International Newsmaker Lakshmi N Mittal, 66, is the the World Economic Forum’s to form ArcelorMittal. Mr. Mittal of the Year 2006’ by Time Magazine Chairman and Chief Executive International Business Council then led a successful integration and ‘Person of the Year 2006’ by the Officer of ArcelorMittal. Mr. and the World Steel Association’s of two large entities to firmly Financial Times for his outstanding Mittal started his career in steel Executive Committee. He also establish ArcelorMittal as one of business achievements. In January in 1976 by founding Ispat Indo, a sits on the Board of Trustees of the foremost industrial companies 2007, Mr. Mittal was presented company that is still held privately Cleveland Clinic in the United in the world. The company with a Fellowship from King’s by the Mittal family. He founded States. Mr. Mittal began his career continues to be the largest and College London, the college’s Mittal Steel Company (formerly working in his family’s steelmaking most global steel manufacturer. highest award. He also received the LNM Group) in 1989 and business in India, and has over More recently, Mr. Mittal has in 2007 the Dwight D. Eisenhower guided its strategic development, 35 years of experience working been leading ArcelorMittal’s Global Leadership Award, the culminating in the merger in in steel and related industries. expansion of its mining business Grand Cross of Civil Merit from 2006 with Arcelor, to form the In addition to spearheading the through significant brownfield Spain and was named AIST world’s largest steelmaker. He steel industry’s consolidation, he and greenfield growth. In 1996, Mr. Steelmaker of the year. In January is widely recognized for the championed the development of Mittal was awarded ‘Steelmaker 2008, Mr. Mittal was awarded the leading role he has played in integrated mini-mills and the use of the Year’ by New Steel in the Padma Vibhushan, India’s second restructuring the steel industry of Direct Reduced Iron (DRI) as a United States and in 1998 the ‘Willy highest civilian honor, by the towards a more consolidated scrap substitute for steelmaking. Korf Steel Vision Award’ by World President of India. In September and globalized model. Mr. Mittal Following the merger of Ispat Steel Dynamics for outstanding 2008, Mr. Mittal was chosen for the Management report 35

third ‘Forbes Lifetime Achievement Vanisha Mittal Bhatia, 36, is a on the Cyprus and Athens Stock February 1, 2012, Mr. Krecké retired Award’, which honors heroes of non-independent Director of Exchanges and is a Director of Sun from government and decided to entrepreneurial capitalism and free ArcelorMittal. She was appointed Bancorp (an “Over the Counter” end his active political career in enterprise. In October 2010, he was as a member of the LNM Holdings - OTC entity), and of Exco, which order to pursue a range of different awarded World Steel Association’s Board of Directors in June is listed on the New York Stock projects. Mr. Krecké is currently medal in recognition of his services 2004. Ms. Vanisha Mittal Bhatia Exchange. Mr. Ross has a number the CEO of Key International to the Association as its Chairman was appointed to Mittal Steel’s of non-profit affiliations. He is on Strategy Services. He is a member and also for his contribution to the Board of Directors in December the Board of the Yale School of of the boards of JSFC Sistema, of sustainable development of the 2004, where she worked in the Management and the Harvard East West United Bank, of China global steel industry. In January Procurement department. She Business School Dean’s Advisory Construction Bank Europe, of 2013, Mr. Mittal was awarded with joined Aperam in April 2011 and is Board. Mr. Ross is Chairman of Calzedonia Finanziara S.A., Jan De a Doctor Honoris Causa by the the Chief Strategy Officer. She has the Japan Society and of the Nul S.A. and Novenergia Holding AGH University of Science and a Bachelor of Sciences from the Economic Studies Council of the Company S.A. Mr. Krecké is a Technology in Krakow, Poland. European Business School. She is Brookings Institution, of which he citizen of Luxembourg. Mr. Mittal was born in Sadulpur in also the daughter of Mr. Lakshmi is also a Trustee. He is the President Rajasthan, India on June 15, 1950. N. Mittal. Mrs. Mittal Bhatia is a of the American Friends of the Suzanne P. Nimocks, 57, is a He graduated from St. Xavier’s citizen of India. Magritte Museum and a member non-executive and independent College in Kolkata, India where he of the International Council of Director of ArcelorMittal and a received a Bachelor of Commerce Narayanan Vaghul, 80, is a non- the Musée des Arts Décoratifs. He member of the Appointments, degree. Mr. Mittal is married to executive and independent also is a Trustee of the Palm Beach Remuneration and Corporate Usha Mittal. They have a son, Director of ArcelorMittal as well Retirement Funds, the Palm Beach Governance Committee. She Aditya Mittal, and a daughter, as the chairman of the Audit & Preservation Foundation and the was previously a director (senior Vanisha Mittal Bhatia. Mr. Mittal is a Risk Committee. He has over 50 Palm Beach Civic Association. partner) with McKinsey & citizen of India. years of experience in the financial Mr. Ross is a citizen of the United Company, a global management sector and was the Chairman States of America. consulting firm, from June Lewis B. Kaden, 74, Lead of ICICI Bank Limited between 1999 to March 2010, and was Independent Director of 2002 and April 2009. Previously, Jeannot Krecké, 66, is a non- with the firm in various other ArcelorMittal, member of the Audit he served as the Chairman of the executive and non-independent capacities beginning in 1989, & Risk Committee and chairman of Industrial Credit and Investment Director of ArcelorMittal. He including as a leader in the the Appointments, Remuneration Corporation of India, a long-term started his university studies at the firm’s Global Petroleum Practice, and Corporate Governance credit development bank for 17 Université Libre de Bruxelles (ULB) Electric Power & Natural Gas Committee. He has approximately years and, prior to that, served as in Belgium in 1969, from where Practice, Organization Practice, 40 years of experience in corporate Chairman of the Bank of India and he obtained a degree in physical and Risk Management Practice. governance, financial services, Executive Director of the Central and sports education. He decided Ms. Nimocks chaired the dispute resolution and economic Bank of India. He also served for in 1983 to change professional Environmental Committee of the policy. He is currently the John brief periods as Consultant to direction. His interests led him to Greater Houston Partnership, the Harvey Gregory Lecturer on World the World Bank, the International retrain in economics, accounting primary advocate of Houston’s Organization at Harvard University. Finance Corporation and the Asian and taxation. He enrolled in business community, until Mr. Kaden was Vice Chairman Development Bank. Mr. Vaghul various courses, in particular in December 31, 2010. She holds of Citigroup between 2005 and was also a visiting Professor at the the United States. Following the a Bachelor of Arts in Economics 2013. Prior to that, he was a Stern Business School at New York legislative elections of June 13, from Tufts University and a Masters partner of the law firm Davis Polk University and a Board member 2004, Mr. Krecké was appointed in Business Administration from & Wardwell, and served as Counsel of Mahindra & Mahindra. Mr. Minister of the Economy and the Harvard Graduate School of to the Governor of New Jersey, as Vaghul is Chairman of the Indian Foreign Trade of Luxembourg on Business. Ms. Nimocks is currently a Professor of Law at Columbia Institute of Finance Management July 13, 2004. Upon the return a board member for Encana University and as director of & Research and is also a Board of the coalition government Corporation, Rowan Companies Columbia University’s Center for member of Wipro, Piramal formed by the Christian Social Plc, and Owens Corning, all listed Law and Economic Studies. He has Healthcare Limited and Apollo Party (CSV) and the Luxembourg companies. Encana is a major served as a director of Bethlehem Hospitals. He was chosen as a Socialist Workers’ Party (LSAP) natural gas exploration and Steel Corporation for ten years Businessman of the Year in 1992 by as a result of the legislative production company, Rowan and is currently Chairman of the Business India. He also received a elections of June 7, 2009, Mr. Companies provides drilling Board of Trustees of the Markle Lifetime Achievement Award from Krecké retained the portfolio services for the oil and gas Foundation and Vice Chairman the Economic Times. In 2009, he of Minister of the Economy industry and Owens Corning is a of the Board of Trustees of Asia was awarded the Padma Bhushan, and Foreign Trade on July 23, manufacturer of building products. Society. He is a member of the India’s third highest civilian honor. 2009. As of July 2004, Mr. Krecké In the non-profit sector, she is a Council on Foreign Relations and Mr. Vaghul is a citizen of India. represented the Luxembourg member of the board of directors of the Trilateral Commission being government at the Council of of the Houston Zoo and serves as a moderator of the Business-Labor Wilbur L. Ross, Jr., 79, is a non- Ministers of the EU in the Internal a Trustee of the Texas Children’s Dialogue. He is a Faculty Affiliate of executive and independent Market and Industry sections of Hospital. Mrs. Nimocks is a citizen the Moussavar - Rahmani Center Director of ArcelorMittal and its Competitiveness configuration of the United States of America. on Business and Government at a member of the Audit & Risk as well as in the Economic and the Harvard Kennedy School of Committee. He is also the Financial Affairs Council and Bruno Lafont, 60, is a non- Government and Senior Fellow Chairman of Nexeo Solutions, in the Energy section of its executive and independent of the Program on Corporate Inc., a large global chemical and Transport, Telecommunications Director of ArcelorMittal and Governance and the Center on the plastics distributor, which is listed and Energy configuration. He was a member of the Audit & Risk Legal Profession at Harvard Law on NASDAQ. He is Vice Chairman of also a member of the Eurogroup Committee. He began his career School. Mr. Kaden is a citizen of the the Bank of Cyprus which is listed from July 2004 to June 2009. On at Lafarge in 1983 and has held United States of America. 36 Management report

numerous positions in finance of the Cartesian Capital Group UK. Michel Wurth is also doctor of 2014) and for Development and international operations from 2000 to 2002; Chairman laws honoris causa of the Sacred and Humanitarian Aid in the with the same company. In 1995, of Deutsche Bank Canada and Heart University, Luxembourg. 1st Barroso Commission (2009- Mr. Lafont was appointed Group Deutsche Bank Securities Canada; Michel Wurth has served as 2010). He was Minister of Foreign Executive Vice President, Finance, Global Managing Director of Chairman of the Luxembourg Affairs (2004-2009) and Vice Prime and, thereafter, Executive Vice Global Metals and Mining for Chamber of Commerce since Minister (2008-2009) of Belgium. President of the Gypsum Division Deutsche Bank AG from 1997 to 2004. He is also non-executive In addition, he was the Chairman in 1998. Mr. Lafont joined Lafarge’s 2000; and Managing Director and Chairman of Paul Wurth S.A. and in Office of the Organization General Management as Chief Co-Head of the Global Mining of BIP Investment Partners and for Security and Cooperation in Operating Officer between May Group at BMO Nesbitt Burns from non-executive Director of BGL Europe (OSCE) (2006) and Member 2003 and December 2005. Chief 1995 to 1997, holding various BNP Paribas S.A., of SMS Group of the Security Council of the Executive Officer in January 2006, other positions at BMO Nesbitt and of Brasserie Nationale. Paul United Nations (2007-2008). He Bruno Lafont was appointed Burns from 1986 to 1995. Mr. Burt Wurth S.A. is controlled by SMS is a Professor of Law at VUB (the Chairman and Chief Executive is the Chairman of Urthecast Corp., Group, a leading equipment and Dutch-speaking Free University Officer in May 2007. In July 2015, a Canadian TSX-listed company engineering supplier for the steel of Brussels), a member of the Bruno Lafont was appointed in the aerospace technology and non-ferrous metal producing Advisory Board of CVC Capital co-Chairman of the Board of business. The company is focused industry. BIP Investment Partners Partners, a member of the board of Directors of LafargeHolcim and on the business of streaming color is a Luxembourg based company, directors of Proximus NV (Telecom) Honorary Chairman of Lafarge. images of the Earth from a suite mainly invested in private equity, and the president of the Board Mr. Lafont presently chairs the of the company-owned satellites. BGL BNP Paribas is a Luxembourg of IES, the Brussels Institute of Energy & Climate Change Working He is also the Chair and Principal bank, majority owned by BNP of European Studies. Mr. de Gucht Group of the ERT (European at Carbon Arc Capital Investments France and Brasserie Nationale is a holds a Master of Law degree from Roundtable of Industrialists) and Corp. and the Life Sciences privately owned brewery based in the VUB. Mr. de Gucht is a Belgian the Sustainable Development Research Campaign Chair of the Luxembourg. Mr. Wurth is a citizen citizen. Commission of the MEDEF University of Guelph’s Better Planet of Luxembourg. (Mouvement des Entreprises de Project. Mr. Burt is a member of the Senior management France), the French Employers Duke of Edinburgh’s Award Charter Karyn Ovelmen, 53, is a non- Association. He is a member of the for Business Board of Governors executive and independent On December 15, 2015, the Executive Committee of the World and is Vice-Chair of the Governors director of ArcelorMittal and Company announced that it would Business Council for Sustainable of the Royal Ontario Museum a member of the Audit & Risk simplify its management structure Development (WBCSD) and a Foundation. He is a graduate Committee. She is the Executive in-line with the ongoing drive to Board member of the AFEP (French of Osgoode Hall Law School, a Vice President and Chief Financial promote a performance-driven large companies association). He member of the Law Society of Officer of Flowserve, a leading culture, empowering the segments is also a Special Adviser to the Upper Canada, and he holds a provider of flow control products to deliver optimum business Mayor of Chongqing (China) and Bachelor of Arts degree from the and services for the global results. As a result the GMB, a Board Member of EDF. Born in University of Guelph. Mr. Burt is a infrastructure market, a position which was established to ensure 1956, Mr. Lafont is a graduate from citizen of Canada. that she has held since June a smooth integration following the Hautes Etudes Commerciales 2015. Most recently she also the creation of ArcelorMittal, business school (HEC 1977, Michel Wurth, 62, is a non- served as Chief Financial Officer was replaced, effective January Paris) and the Ecole Nationale independent director of and Executive Vice President of 1, 2016, with a more flexible d’Administration (ENA 1982, Paris). ArcelorMittal. He joined Arbed LyondellBasell Industries NV from structure. As of December 31, Mr. Lafont is a citizen of France. in 1979 and held a variety of 2011 to May 2015, as Executive 2016, ArcelorMittal’s senior functions before joining the Arbed Vice President and Chief Financial management is comprised of the Tye Burt, 59, is a non-executive Group Management Board and Officer of Petroplus Holdings AG CEO Office supported by six other and independent Director of becoming its chief financial officer from May 2006 to September 2010 Executive Officers. ArcelorMittal’s ArcelorMittal and a member of in 1996. The merger of Aceralia, and as Executive Vice President CEO Office is comprised by the the Appointments, Remuneration Arbed and Usinor, leading to the and Chief Financial Officer of Chief Executive Officer (“CEO”), Mr. and Corporate Governance creation of Arcelor in 2002, led Argus Services Corporation from Lakshmi N. Mittal and the Chief Committee. He was appointed to Mr. Wurth’s appointment as 2005 to 2006. Prior to that, she Financial Officer (“CFO”), Mr. Aditya President and Chief Executive senior executive vice president was Vice President of External Mittal. Together, the Executive Officer of Kinross Gold Corporation and CFO of Arcelor. He became Reporting and Investor Relations Officers are responsible for the in March 2005. He held this a member of ArcelorMittal’s for Premcor Refining Group Inc. implementation of the Company position until August 1, 2012. Group Management Board in She also spent 12 years with strategy, overall management of Kinross is listed on the New York 2006, responsible for Flat Carbon PricewaterhouseCoopers, primarily the business and all operational Stock Exchange and the Toronto Europe, Global R&D, Distribution serving energy industry accounts. decisions. Stock Exchange. Mr. Burt was also Solutions and Long Carbon Mrs. Ovelmen holds a Bachelor of a member of the board of directors Worldwide, respectively. Michel Arts degree from the University of of Kinross. Mr. Burt has broad Wurth retired from the GMB in Connecticut, USA, and is a Certified experience in the global mining April 2014 and was elected to Public Accountant (“CPA”). Mrs. industry, specializing in corporate ArcelorMittal’s board of directors in Ovelmen is a citizen of the United finance, business strategy and May 2014. He holds a Law degree States of America. mergers and acquisitions. Prior from the University of Grenoble, to joining Kinross, he held the France, and a degree in Political Mr. Karel de Gucht, 62, is a non- position of Vice Chairman and Science from the Institut d’Études executive and independent Executive Director of Corporate Politiques de Grenoble as well director and was the European Development at Barrick Gold as a Master’s of Economics from Commissioner for Trade in the Corporation. He was President the London School of Economics, 2nd Barroso Commission (2010- Management report 37

Name Age1 Position Lakshmi N. Mittal 66 Chairman and Chief Executive Officer of ArcelorMittal Chief Financial Officer of ArcelorMittal, Investor Relations, and Chief Aditya Mittal 40 Executive Officer of ArcelorMittal Europe Executive vice president, head of strategy, CTO, R&D, CCM, and global Brian Aranha 61 automotive Henri Blaffart 61 Executive vice president, group head of HR and corporate services Jefferson de Paula 58 Executive vice president, CEO ArcelorMittal South America Long Executive vice president, president and CEO AM/NS Calvert, CEO Robrecht Himpe 58 ArcelorMittal North America Geert Van Poelvoorde 51 Executive vice president, CEO ArcelorMittal Europe Flat Simon C. Wandke 57 Executive vice president, CEO ArcelorMittal Mining 1 Age as of December 31, 2016.

Lakshmi N. Mittal (See “–Board of R&D, Corporate Commercial and for the Group, which he took on most recent appointment. Mr. de Directors”). Marketing, and Global Automotive. in April 2013. Before taking up Paula graduated in metallurgical He is also in charge of automotive his position at corporate level, engineering from the Universidade Aditya Mittal, 40, Prior to the joint ventures in China and India. Mr. Blaffart was head of HR for Federal Fluminense, holds a merger to create ArcelorMittal, He joined Dofasco in 1979 as a the Company’s Flat Carbon master’s degree in financial Mr. Aditya Mittal held the position member of the company’s research Europe segment and a member business and marketing from of President and Chief Financial and development department. of the segment management Universidad Austral and has Officer of Mittal Steel Company In 1989, he was appointed to the committee, a position he took up attended to senior executive from October 2004 to 2006. He American Iron & Steel Institute in April 2010. Previously he was business courses from Insead and joined Mittal Steel in January (AISI) in Washington, D.C. and in CEO of ArcelorMittal Lorraine in Kellogg universities. In addition to 1997 and has held various finance 1991, he was part of a Canadian France, having first been head of his position in the Group, Mr. de and management roles within consortium, conducting a study for primary for the same operation. Paula is the current President of the company. In 1999, he was the World Bank on restructuring Mr. Blaffart joined the Cokerill Latin America’s Steel Association appointed Head of Mergers and the Polish steel industry. In 1992, Sambre group in 1982 in its (Alacero) and sits in the Board Acquisitions for Mittal Steel. In Mr. Aranha returned to Dofasco as construction business unit. He of Directors of Brazil’s Steel this role, he led the company’s project manager responsible for has held different positions in the Association (Aço Brasil) and in the acquisition strategy, resulting the delivery improvement team. Cokerill Sambre group, including Strategic Board of the Industry in Mittal Steel’s expansion into In 1993, he was appointed general CEO of operational units. After Federation of the State of Minas Central Europe, Africa and the manager of quality systems and the merger between Usinor and Gerais (FIEMG). Mr. de Paula is a United States. Besides M&A became purchasing assistant Cokerill Sambre Group, he held citizen of Brazil. responsibilities, Aditya Mittal director in 1998. He took on the a number of other positions in was involved in post-integration, role of director of automotive the company including R&D Robrecht Himpe, 58, is a member turnaround and improvement business in 2001, a position that director for construction and of the group management strategies. As Chief Financial he held until being named vice CEO of the former Arcelor’s committee and started his career Officer of Mittal Steel, he also president of commercial in 2003. research division. He is a civil at the Sidmar Gent hot strip mill initiated and led Mittal Steel’s offer Mr. Aranha took up additional engineer from the University in 1981, and became responsible for Arcelor to create the first 100 responsibilities as vice president of Liège and holds a masters for its cold rolling department in million tonnes plus steel company. of NAFTA automotive, after degree in general management 1995. In 2001, he was appointed He serves on the board of Aperam, integration into ArcelorMittal in from the Ecole D’entreprise operational director of Bremen, is a board member of Hindustan 2007. He moved to Flat Carbon pour le Perfectionnement au before becoming operational Mittal Energy Limited (HMEL), is Europe in 2008 as chief marketing Management in Belgium. Mr. director of Asturias in 2003. In a Board member at the Wharton officer of industry and in 2009 Blaffart is a citizen of Belgium. 2006, he became vice president School and a Board member at became Chief Marketing Officer FCWE upstream and then chief Iconiq Capital. He is also a trustee Flat Carbon Europe for all sales as Jefferson de Paula, 58, is a member operating officer in 2007. In 2008, at Brookings Institute and an well as head of Global Automotive. of the group management he pursued his career as Chief alumni of the World Economic After a return to NAFTA in 2012, committee and joined the group in Executive Officer of Flat Carbon Forum Young Global Leader’s he was in charge of Commercial 1993 as general manager of Belgo Europe, before being appointed Programme. Aditya Mittal holds Integration and Global Mineira’s Vitória plant in Brazil. as head and safety and chief a Bachelor’s degree of Science in Automotive. He holds a Bachelor of In 2001, he moved to Acindar in technology officer, positions he Economics with concentrations applied sciences and engineering Argentina as executive industrial held until December 2015. In July in Strategic Management and from the University of Toronto. Mr. vice president, steel business. 2016, he was appointed Chief Corporate Finance from the Aranha is a citizen of Canada. He was appointed industrial Executive Officer of ArcelorMittal Wharton School in Pennsylvania, and commercial vice president North America, a role he has United States. Mr. Aditya Mittal is Henri Blaffart, 61, is a member of Acindar in 2006. In 2008, he been holding in addition to his the son of Mr. Lakshmi N. Mittal. of the group management joined Long Carbon Europe as responsibilities as President and Mr. Aditya Mittal is a citizen of committee. He was appointed head of sections, rails, piles and Chief Executive Officer of AM/NS India. head of corporate services special sections operations, later Calvert. Mr. Himpe is an electro- (including currently becoming Chief Executive Officer technical engineer and a graduate Brian Aranha, 61, is a member communication, corporate of the Long Carbon Americas of the University of Ghent. Mr. of the group management responsibility, legal, capital goods, Business Unit South. In 2011, Himpe is a citizen of Belgium. committee, an ArcelorMittal shipping and, IT) in January he was named Chief Executive executive vice president, Head of 2014, in addition to his role as Officer of Long Carbon Americas, Strategy, Chief Technology Officer, head of human resources (HR) a position which he held until his 38 Management report

Geert Van Poelvoorde, 51, Board practices/corporate of Directors is composed of a (a) he or she is independent within is a member of the group governance minimum of three and a maximum the meaning of the New York Stock management committee and of 18 members, all of whom, Exchange Listed Company Manual, started his career in 1989 as a This section describes the except the CEO, must be non- as applicable to foreign private project engineer at the Sidmar corporate governance practices of executive directors. None of the issuers, Gent hot strip mill, where he ArcelorMittal for the year ended members of the Board of Directors, held several senior positions December 31, 2016. except for the CEO, may hold an (b) he or she is unaffiliated with in the automation and process executive position or executive any shareholder owning or computer department. He moved Board of Directors and senior mandate within ArcelorMittal controlling more than two percent to Stahlwerke Bremen in 1995 as management or any entity controlled by of the total issued share capital of senior project manager. Between ArcelorMittal. ArcelorMittal, and 1998 and 2002, he headed a ArcelorMittal is governed by a number of departments, and in Board of Directors and managed The Articles of Association provide (c) the Board of Directors makes an 2003 he was appointed director of by the senior management. As that directors are elected and affirmative determination to this Stahlwerke Bremen, responsible described above, ArcelorMittal’s removed by the general meeting effect. for operations and engineering. In senior management is comprised of shareholders by a simple 2005, Mr. Van Poelvoorde returned of the CEO Office - comprising the majority of votes cast. Other than For these purposes, a person is to ArcelorMittal Gent to take up CEO, Mr. Lakshmi N. Mittal and the as set out in the Company’s Articles deemed affiliated to a shareholder the position of Chief Operating CFO, Mr. Aditya Mittal. The CEO of Association, no shareholder has if he or she is an executive officer, a Officer. In 2008, he became Chief Office is supported by a team of any specific right to nominate, director who also is an employee, Executive Officer of ArcelorMittal six other Executive Officers, who elect or remove directors. Directors a general partner, a managing Gent with direct responsibility together encompass the key are elected by the general meeting member or a controlling for primary operations. He was regions and corporate functions. of shareholders for three-year shareholder of such shareholder. appointed Chief Executive Officer terms. In the event that a vacancy The 10 Principles of Governance of of the Business Division North A number of corporate arises on the Board of Directors the Luxembourg Stock Exchange, within Flat Carbon Europe in governance provisions in for any reason, the remaining which constitute ArcelorMittal’s 2009 and in January 2014, he the Articles of Association of members of the Board of Directors domestic corporate governance was appointed Chief Executive ArcelorMittal reflect provisions may by a simple majority elect code, require ArcelorMittal to Officer of Flat Carbon Europe and of the Memorandum of a new director to temporarily define the independence criteria Purchasing. He graduated from Understanding signed on fulfill the duties attaching to the that apply to its directors, which the University of Ghent with a June 25, 2006 (prior to Mittal vacant post until the next general are described in article 8.1 of its degree in civil engineering and Steel Company N.V.’s merger meeting of the shareholders. Articles of Association. electronics. Mr. Van Poelvoorde is a with Arcelor), amended in citizen of Belgium. April 2008 and which mostly In 2016, the Board of Directors Specific characteristics of the expired on August 1, 2009. For proposed Mr. Karel de Gucht director role Simon C. Wandke, 57, is a member more information about the to serve as a member of the of the group management Memorandum of Understanding, ArcelorMittal Board of Directors, The Company’s Articles of committee and he joined see “Memorandum of which was approved at the Association do not require ArcelorMittal in January 2011 Understanding”. ArcelorMittal annual general directors to be shareholders of the as chief commercial officer of shareholders’ meeting held on May Company. The Board of Directors ArcelorMittal Mining. He has ArcelorMittal fully complies with 4, 2016. nevertheless adopted a share over 30 years’ experience in the the 10 Principles of Corporate ownership policy on October 30, mining and minerals industry, Governance of the Luxembourg The Board of Directors is 2012, considering that it is in the starting his career in 1981 at BHP Stock Exchange. This is explained comprised of 12 members, of best interests of all shareholders Billiton, where he held positions in in more detail in “Other Corporate which 11 are non-executive for all non-executive directors mines in Australia and Indonesia Governance practices” below. directors and one is an executive to acquire and hold a minimum ArcelorMittal also complies with director. The CEO of ArcelorMittal is number of ArcelorMittal ordinary and other commercial offices the New York Stock Exchange the sole executive director. shares in order to better align their globally until 2002. He then Listed Company Manual as long-term interests with those joined Destra Consulting Group applicable to foreign private Mr. Lakshmi N. Mittal was elected of ArcelorMittal’s shareholders. as Partner before becoming Chief issuers. Chairman of the Board of Directors The Board of Directors believes Marketing Officer for Ferrexpo plc on May 13, 2008. Mr. Mittal is also that this share ownership policy in 2006 based in Hong Kong and Board of Directors ArcelorMittal’s CEO. Mr. Mittal will result in a meaningful Switzerland. Simon is a graduate was re-elected to the Board of holding of ArcelorMittal shares of the Australian Institute of Composition Directors for a three-year term at by each non-executive director, Company Directors with a diploma the annual general meeting of while at the same time taking in Company Directorship. He The Board of Directors is in charge shareholders on May 8, 2014. into account the fact that the also holds a graduate diploma in of the overall governance and share ownership requirement Corporate Finance from Swinburne direction of ArcelorMittal. It is Eight of the 12 members should not be excessive in order University as well as a B.A., Psych, responsible for the performance of of the Board of Directors not to unnecessarily limit the Marketing (Comm) from the all acts of administration necessary are independent. The non- pool of available candidates for University of Melbourne. Mr. or useful in furtherance of the independent directors are Mr. appointment to the Board of Wandke is a citizen of Australia. corporate purpose of ArcelorMittal, Lakshmi N. Mittal, Ms. Vanisha Directors. Directly or indirectly, except for matters reserved by Mittal Bhatia, Mr. Jeannot Krecké and as sole or joint beneficiary Luxembourg law or the Articles of and Mr. Michel Wurth. A director is owner (e.g., with a spouse or minor Association to the general meeting considered “independent” if: children), within five years of the of shareholders. The Articles of earlier of October 30, 2012 or Association provide that the Board the relevant person’s election to Management report 39

the Board of Directors, the Lead ArcelorMittal Board of Directors. Share transactions by provided that all members of the Independent Director should own However, a non-executive management Board of directors agree. a minimum of 15,000 ordinary Director’s service on the board shares and each other non- of directors of any subsidiary or In compliance with laws The Board of Directors held seven executive director should own affiliate of ArcelorMittal or of any prohibiting insider dealing, meetings in 2016. The average a minimum of 10,000 ordinary non-publicly listed company is not the Board of Directors of attendance rate of the directors at shares. Each director will hold the taken into account for purposes ArcelorMittal has adopted the Board of Directors’ meetings shares acquired on the basis of of complying with the foregoing insider dealing regulations, was 93%. this policy for so long as he or she limitation. which apply throughout the serves on the Board of Directors. ArcelorMittal group. These In order for a meeting of the Directors purchasing shares in Although non-executive directors regulations are designed to Board of Directors to be validly compliance with this policy must of ArcelorMittal who change their ensure that insider information held, a majority of the directors comply with the ArcelorMittal principal occupation or business is treated appropriately within must be present or represented, Insider Dealing Regulations and, association are not necessarily the Company and avoid insider including at least a majority of in particular, and refrain from required to leave the Board of dealing and market manipulation. the independent directors. In the trading during any restricted Directors, the policy requires each Any breach of the rules set out absence of the Chairman, the period, including any such period non-executive director, in such in this procedure may lead to Board of Directors will appoint that may apply immediately after circumstances, promptly to inform criminal or civil charges against by majority vote a chairman for the Director’s departure from the the Board of Directors of the the individuals involved, as well the meeting in question. The Board of Directors for any reason. action he or she is contemplating. as disciplinary action by the Chairman may decide not to Should the Board of Directors Company. participate in a Board of Directors’ On October 30, 2012, the Board determine that the contemplated meeting, provided he has given a of Directors also adopted a policy action would generate a conflict Shareholding requirement for non- proxy to one of the directors who that places limitations on the terms of interests, such non-executive executive directors will be present at the meeting. of independent directors as well director would be asked to tender For any meeting of the Board of as the number of directorships. his or her resignation to the In consideration of corporate Directors, a director may designate Directors may hold in order to Chairman of the Board of Directors, governance trends indicating that another director to represent align the Company’s corporate who would decide to accept the a reasonable amount of share him or her and vote in his or her governance practices with best resignation or not. ownership helps better align the name, provided that the director practices in this area. The policy interests of the directors with those so designated may not represent provides that an independent None of the members of the of all shareholders, the Board of more than one of his or her director may not serve on the Board of Directors, including Directors adopted on October 30, colleagues at any time. Board of Directors for more than the executive director, have 2012 share ownership guidelines 12 consecutive years, although entered into service contracts for non-executive directors as Each director has one vote and the Board of Directors may, by way with ArcelorMittal or any of described above under “Specific none of the directors, including of exception to this rule, make an its subsidiaries that provide characteristics of the director role”. the Chairman, has a casting vote. affirmative determination, on a for any form of remuneration Decisions of the Board of Directors case-by-case basis, that he or she or for benefits upon the Operation are made by a majority of the may continue to serve beyond termination of their term. All directors present and represented the 12 years rule if the Board of non-executive Directors of the General at a validly constituted meeting, Directors considers it to be in Company signed the Company’s except for the decisions of the the best interest of the Company Appointment Letter, which The Board of Directors and the Board of Directors relating to the based on the contribution of the confirms the conditions of their Board committees may engage issue of any financial instruments Director involved and the balance appointment by the General the services of external experts or carrying or potentially carrying between the knowledge, skills, Meeting of the Shareholders advisers as well as take all actions a right to equity pursuant to the experience and need for renewal including compliance with necessary or useful to implement authorization conferred by article of the Board. certain non-compete provisions, the Company’s corporate purpose. 5.5. of the Articles of Association, the 10 Principles of Corporate The Board of Directors (including which shall be taken by a majority As membership of the Board of Governance of the Luxembourg its two committees) has its own of two-thirds of the directors Directors represents a significant Stock Exchange and the budget, which covers functioning present or represented at a validly time commitment, the policy Company’s Code of Business costs such as external consultants, constituted meeting. requires both executive and Conduct. continuing education activities for non-executive directors to devote directors and travel expenses. Lead Independent Director sufficient time to the discharge All members of the Board of of their duties as a director of Directors are required to sign Meetings In April 2008, the Board of ArcelorMittal. Directors are the Company’s Code of Business Directors created the role of Lead therefore required to consult Conduct upon first joining the The Board of Directors meets when Independent Director. His or her with the Chairman and the Board of Directors and confirm convened by the Chairman of the function is highlighted above. Lead Independent Director their adherence thereto on an Board or any two members of the before accepting any additional annual basis thereafter. Board of Directors. The Board of Mr. Lewis B. Kaden was elected commitment that could conflict Directors holds physical meetings by the Board of Directors with or impact the time they can The remuneration of the members at least on a quarterly basis as five as ArcelorMittal’s first Lead devote to their role as a Director of the Board of Directors is regular meetings are scheduled per Independent Director in April 2008 of ArcelorMittal. Furthermore, a determined on a yearly basis by year. The Board of Directors holds and remains Lead Independent non-executive director may not the annual general meeting of additional meetings if and when Director, having been re-elected as serve on the boards of directors shareholders. circumstances require, in person a director for a three-year term on of more than four publicly listed or by teleconference and can take May 8, 2014. companies in addition to the decisions by written circulation, 40 Management report

The agenda of each meeting of Directors reviewed the practical Each director has an obligation to Each director is required to adhere the Board of Directors is decided implementation of the governance protect and advance the interests to the values set out in, and sign, jointly by the Chairman of the structure and thought it was of the Company and must refrain the ArcelorMittal Code of Business Board of Directors and the Lead working well. The Board set new from any conduct that would harm Conduct. Independent Director. priorities for discussion and review it. and identified a number of topics Renewal Separate meetings of independent that it wishes to spend additional In order to govern effectively, directors time on in 2017. non-executive directors must The Board of Directors plans for its have a clear understanding of own succession, with the assistance The independent members of the The Board of Directors believes the Company’s strategy, and of the ARCG Committee. In doing Board of Directors may schedule that its members have the a thorough knowledge of the this, the Board of Directors: meetings outside the presence of appropriate range of skills, ArcelorMittal group and the non-independent directors. Four knowledge and experience, as industries in which it operates. • considers the skills, backgrounds, meetings of the independent well as the degree of diversity, Non-executive directors must knowledge, experience and directors outside the presence necessary to enable it to effectively be sufficiently familiar with diversity of geographic location, of management and non- govern the business. The Board the Company’s core business nationality and gender necessary independent directors were held of Directors composition is to effectively contribute to the to allow it to meet the corporate in 2016. reviewed on a regular basis and development of strategy and purpose; additional skills and experience monitor performance. Annual self-evaluation are actively searched for in line • assesses the skills, backgrounds, with the expected development With specific regard to the knowledge, experience and The Board of Directors decided of ArcelorMittal’s business as and non-executive directors of the diversity currently represented; in 2008 to start conducting an when appropriate. Company, the composition of annual self-evaluation of its the group of non-executive • identifies any inadequate functioning in order to identify Required skills, experience and directors should be such that representation of those attributes potential areas for improvement. other personal characteristics the combination of experience, and agrees the process necessary The first self-evaluation process knowledge and independence of to ensure a candidate is selected was carried out in early 2009. The Diverse skills, backgrounds, its members allows the Board to who brings them to the Board of self-evaluation process includes knowledge, experience, fulfill its obligations towards the Directors; and structured interviews between geographic location, nationalities Company and other stakeholders the Lead Independent Director and gender are required in order in the best possible manner. • reviews how Board performance and each director and covers the to effectively govern a global might be enhanced, both at an overall performance of the Board of business the size of the Company’s The ARCG Committee ensures that individual director level and for Directors, its relations with senior operations. The Board of Directors the Board of Directors is comprised the Board as a whole. management, the performance and its committees are therefore of high-caliber individuals whose of individual directors, and the required to ensure that the Board background, skills, experience and The Board believes that orderly performance of the committees. has the right balance of skills, personal characteristics enhance succession and renewal is achieved The process is supported by the experience, independence and the overall profile of the Board through careful planning and Company Secretary under the knowledge necessary to perform and meets its needs and diversity by continuously reviewing the supervision of the Chairman and its role in accordance with the aspirations by nominating high composition of the Board. the Lead Independent Director. highest standards of governance. quality candidates for election to The findings of the self-evaluation the Board by the general meeting When considering new process are examined by the The Company’s directors must of shareholders. appointments to the Board, ARCG Committee and presented demonstrate unquestioned the ARCG Committee oversees with recommendations from the honesty and integrity, Board profile the preparation of a position ARCG Committee to the Board preparedness to question, specification that is provided of Directors for adoption and challenge and critique The key skills and experience of the to an independent recruitment implementation. Suggestions constructively, and a willingness directors, and the extent to which firm retained to conduct a global for improvement of the Board to understand and commit to the they are represented on the Board search, taking into account, among of Directors’ process based on highest standards of governance. of Directors and its committees, other factors, geographic location, the prior year’s performance and They must be committed to are set out below. In summary, the nationality and gender. In addition functioning are implemented the collective decision-making non-executive directors contribute: to the specific skills, knowledge during the following year. process of the Board of Directors and experience required of the and must be able to debate issues • international and operational candidate, the specification The 2016 Board of Directors’ openly and constructively, and experience; contains the criteria set out in the self-evaluation was completed question or challenge the opinions ArcelorMittal Board profile. by the Board on February 8, of others. Directors must also • understanding of the industry 2017. The Board of Directors was commit themselves to remain sectors in which ArcelorMittal Diversity of the opinion that it and the actively involved in Board decisions operates; management had cooperated and apply strategic thought to In line with the worldwide effort successfully during 2016 on matters at issue. They must be • knowledge of world capital to increase gender diversity on the important matters including clear communicators and good markets and being a company boards of directors of listed and operational and financial listeners who actively contribute listed in several jurisdictions; and unlisted companies, the Board met performance, the rights offering, to the Board in a collegial manner. its goal of increasing the number the ongoing strengthening Each director must also ensure that • an understanding of the health, of women on the Board to at least of the balance sheet, strategy, no decision or action is taken that safety, environmental, political three by the end of 2015 with the sustainability, labor relations and places his or her interests in front and community challenges that election of Mrs. Karyn Ovelmen in health and safety. The Board of of the interests of the business. ArcelorMittal faces. May 2015, based upon a Board of Management report 41

Directors size of 12 members. The to-date with developments within • the Audit & Risk Committee, and Committee makes decisions by a ArcelorMittal Board’s diversity not the Company’s segments, as well simple majority with no member only relates to gender, but also as developments in the markets in • the ARCG Committee. having a casting vote. to the region, background and which the Company operates. industry of its members. Audit & Risk Committee At least one member must qualify During the year, non-executive as an Audit & Risk Committee Director induction, training and directors participated in the In 2015 the Board decided to “financial expert” as defined by the development following activities: combine the Audit Committee SEC and determined by the Board. with the Risk Management The Board considers that the • comprehensive business Committee in order to provide At least one member must qualify development of the directors’ briefings intended to provide their members with a more holistic as an Audit & Risk Committee knowledge of the Company, each director with a deeper view of ArcelorMittal’s current “risk management expert” the steel-making and mining understanding of the Company’s governance, risks and control having experience in identifying, industries, and the markets in activities, environment, key systems. assessing, and managing risk which the Company operates is issues and strategy of the exposures of large, complex an ongoing process. To further Company’s segments. These • The primary function of the Audit companies. bolster the skills and knowledge briefings are provided to the & Risk Committee is to assist the of directors, the Company set up a Board of Directors by senior Board in fulfilling its oversight The Audit & Risk Committee continuous development program executives, including CEO responsibilities by reviewing; currently consists of six members: in 2009. Office members. The briefings Mr. Narayanan Vaghul (Chairman), provided during the course of • the integrity of the financial Mr. Wilbur L. Ross, Mr. Lewis Kaden, Upon his or her election, each new 2016 covered health and safety reports and other financial Mr. Bruno Lafont, Mrs. Karyn non-executive director undertakes processes, HR, legal, marketing, information provided by the Ovelmen and Mr. Karel de Gucht, an induction program specifically steel-making, strategy, mining Company to any governmental each of whom is an independent tailored to his or her needs and and R&D. Certain business body or the public; director according to the NYSE includes ArcelorMittal’s long-term briefings were combined with standards and the 10 Principles vision centered on the concept of site visits and thus took place on- • the Company’s compliance of Corporate Governance of the “Safe Sustainable Steel”. site and, in other cases, they took with legal and regulatory Luxembourg Stock Exchange. place at Board meetings; requirements; The Chairman of the Audit & Risk The Board’s development activities Committee is Mr. Vaghul. include the provision of regular • briefing meetings with Company • the registered public accounting updates to directors on each of executives in charge of specific firm’s (Independent Auditor) According to its charter, the Audit the Company’s products and business segments or markets; qualifications and independence; & Risk Committee is required to markets. Non-executive directors meet at least four times a year. may also participate in training • site visits to plants and R&D • the Company’s system of internal During 2016, the Audit & Risk programs designed to maximize centers; and control regarding finance, Committee met seven times. The the effectiveness of the directors accounting, legal compliance, Audit & Risk Committee performs throughout their tenure and link in • development sessions on specific ethics and risk management an annual self-evaluation and with their individual performance topics of relevance, such as that management and the Board completed its 2016 self-evaluation evaluations. The training and health and safety, commodity have established; on February 8, 2017. The charter development program may cover markets, HR, investor relations, of the Audit & Risk Committee is not only matters of a business accounting, the world economy, • the Company’s auditing, available from ArcelorMittal upon nature, but also matters falling changes in corporate governance accounting and financial request. into the environmental, social and standards, directors’ duties and reporting processes generally; governance area. shareholder feedback. and Appointments, Remuneration and Corporate Governance Committee Structured opportunities are The ARCG Committee oversees • the identification and provided to build knowledge director training and development. management of risks to which The ARCG Committee is comprised through initiatives such as visits to This approach allows induction the ArcelorMittal group is of three directors, each of whom plants and mine sites and business and learning opportunities to be exposed. is independent under the New briefings provided at Board tailored to the directors’ committee York Stock Exchange standards meetings. Non-executive directors memberships, as well as the Board The Audit & Risk Committee and the 10 Principles of Corporate also build their Company and of Director’s specific areas of focus. must be composed solely of Governance of the Luxembourg industry knowledge through the In addition, this approach ensures independent members of the Stock Exchange. involvement of the CEO Office and a coordinated process in relation Board of Directors. The members other senior employees in Board to succession planning, Board are appointed by the Board of The members are appointed by meetings. Business briefings, site renewal, training, development Directors each year after the the Board of Directors each year visits and development sessions and committee composition, all annual general meeting of after the annual general meeting underpin and support the Board’s of which are relevant to the ARCG shareholders. The Audit & Risk of shareholders. The ARCG work in monitoring and overseeing Committee’s role in securing the Committee comprises four to Committee makes decisions by a progress towards the corporate supply of talent to the Board. six members, all of whom must simple majority with no member purpose of creating long-term be independent under the having a casting vote. shareholder value through the company’s corporate governance development of the ArcelorMittal Board of Directors committees guidelines, the New York Stock The Board of Directors has business in steel and mining. The Exchange (NYSE) standards and established the ARCG Committee Company therefore continuously The Board of Directors has two the 10 Principles of Corporate to: builds directors’ knowledge to committees: Governance of the Luxembourg ensure that the Board remains up- Stock Exchange. The Audit & Risk 42 Management report

• determine, on its behalf and completed its 2016 self-evaluation transparency, quality of reporting directors of ArcelorMittal in the on behalf of the shareholders on February 8, 2017. and the balance of powers. exercise of their duties. Each within agreed terms of reference, ArcelorMittal continually monitors employee of ArcelorMittal is ArcelorMittal’s compensation The charter of the ARCG U.S., EU and Luxembourg legal required to sign and acknowledge framework, including short and Committee is available from requirements and best practices the Code of Conduct upon joining long term incentives for the CEO, ArcelorMittal upon request. in order to make adjustments to the Company. This also applies the CFO and the members of the its corporate governance controls to the members of the Board Management Committee; Succession management and procedures when necessary, of Directors of ArcelorMittal, as evidenced by the new policies who signed the Company’s • review and approve succession Succession management at adopted by the Board of Directors Appointment Letter in which they and contingency plans for key ArcelorMittal is a systematic, in 2012. acknowledged their duties and managerial positions at the level structured process for identifying obligations. Any new member of of the Management Committee; and preparing employees with ArcelorMittal complies with the Board of Directors must sign potential to fill key organizational the 10 Principles of Corporate and acknowledge the Code of • consider any candidate for positions, should the position Governance of the Luxembourg Conduct upon appointment. appointment or reappointment become vacant. This process Stock Exchange in all respects. to the Board of Directors at applies to all ArcelorMittal key However, in respect of Employees must always act in the request of the Board of positions up to and including Recommendation 1.3 under the best interests of ArcelorMittal Directors and provide advice and the CEO Office. Succession the Principles, which advocates and must avoid any situation in recommendations to it regarding management aims to ensure the separating the roles of chairman which their personal interests the same; continued effective performance of the board and the head of conflict, or could conflict, with of the organization by providing the executive management their obligations to ArcelorMittal. • evaluate the functioning of the for the availability of experienced body, the Company has made a Employees are prohibited from Board of Directors and monitor and capable employees who are different choice. This is permitted, acquiring any financial or other the Board of Directors’ self- prepared to assume these roles as however, as, unlike the 10 interest in any business or evaluation process; they become available. For each Principles themselves with which participate in any activity that position, candidates are identified ArcelorMittal must comply, the could deprive ArcelorMittal of • assess the roles of the Chairman based on performance, potential Recommendations are subject to the time or the attention needed and CEO and deliberate on the and an assessment of leadership a more flexible “comply or explain” to devote to the performance of merits of the Board’s leadership capabilities and their “years to standard. their duties. Any behavior that structure to ensure that the readiness”. Development needs deviates from the Code of Business most efficient and appropriate linked to the succession plans are The nomination of the same Conduct is to be reported to the structure is in place; and discussed, after which “Personal person to both positions was employee’s supervisor, a member Development Plans” are put in approved by the shareholders of the management, the head • develop, monitor and review place, to accelerate development (with the Significant Shareholder of the legal department or the corporate governance principles and prepare candidates. Regular abstaining). Since that date, head of the internal assurance and corporate responsibility reviews of succession plans are the rationale for combining the department. policies applicable to conducted at different levels of positions of CEO and Chairman of ArcelorMittal, as well as their the organization to ensure that the Board of Directors has become Code of Business Conduct training application in practice. they are accurate and up to date, even more compelling. The Board is offered throughout ArcelorMittal leading to at least once yearly a of Directors is of the opinion that on a regular basis in the form of The ARCG Committee’s principal formal review by the CEO Office, Mr. Mittal’s strategic vision for the face-to-face trainings, webinars criteria in determining the of all key positions. Succession steel industry in general and for and online trainings. Employees compensation of executives management is a necessary ArcelorMittal in particular in his are periodically trained about is to encourage and reward process to reduce risk of vacant role as CEO is a key asset to the the Code of Business Conduct in performance that will lead to long- positions or skill gap transitions, Company, while the fact that he each location where ArcelorMittal term enhancement of shareholder create a pipeline of future leaders, is fully aligned with the interests has operations. The Code of value. The ARCG Committee may ensure smooth business continuity of the Company’s shareholders Business Conduct is available in seek the advice of outside experts. and improve employee motivation means that he is uniquely the “Corporate Governance – Code and engagement. This process has positioned to lead the Board of of Business Conduct” section of The three members of the ARCG been in place for several years and Directors in his role as Chairman. ArcelorMittal’s website at www. Committee are Mr. Lewis B. reinforced, widened and made The combination of these roles arcelormittal.com. Kaden, Mrs. Suzanne P. Nimocks more systematic in all regions of was revisited at the Annual and Mr. Tye Burt, each of whom the organization. The responsibility General Meeting of Shareholders In addition to the Code of is independent in accordance to review and approve succession of the Company held in May 2014, Business Conduct, ArcelorMittal with the NYSE standards and plans and contingency plans at the when Mr. Lakshmi N. Mittal was has developed a Human Rights the 10 Principles of Corporate highest level rests with the Board’s reelected to the Board of Directors Policy and a number of other Governance of the Luxembourg ARCG Committee. for another three year term by a compliance policies in more Stock Exchange. The Chairman of strong majority. specific areas, such as anti-trust, the ARCG Committee is Mr. Kaden. Other corporate governance anti-corruption, economic practices Ethics and conflicts of interest sanctions and insider dealing. The ARCG Committee is required In all these areas, specifically to meet at least twice a year. ArcelorMittal is committed to Ethics and conflicts of interest targeted groups of employees are During 2016, this committee met adhere to best practices in terms are governed by ArcelorMittal’s required to undergo specialized six times. of corporate governance in its Code of Business Conduct, which compliance training. Furthermore, dealings with shareholders and establishes the standards for ArcelorMittal’s compliance The ARCG Committee performs aims to ensure good corporate ethical behavior that are to be program also includes a quarterly an annual self-evaluation and governance by applying rules on followed by all employees and compliance certification process Management report 43

covering all business segments Committee. The function is staffed may have about the IDR’s Compensation and entailing reporting to the by full-time professional staff interpretation. The IDR compliance Audit & Risk Committee. located within each of the principal officer maintains a list of insiders Board of Directors operating subsidiaries and at the as required by the Luxembourg Process for Handling Complaints corporate level. Recommendations market manipulation (abus de Directors’ fees on Accounting Matters and matters relating to internal marché) law of May 9, 2006, as control and processes are made amended. The IDR compliance The ARCG Committee of the Board As part of the procedures of the by the Internal Assurance function officer may assist senior executives of Directors prepares proposals Board of Directors for handling and their implementation is and directors with the filing of on the remuneration to be paid complaints or concerns about regularly reviewed by the Audit & notices required by Luxembourg annually to the members of the accounting, internal controls and Risk Committee. law to be filed with the Board of Directors. auditing issues, ArcelorMittal’s Luxembourg financial regulator, Anti-Fraud Policy and Code of Independent auditors the CSSF (Commission de At the May 4, 2016 annual general Business Conduct encourage all Surveillance du Secteur Financier). meeting of shareholders, the employees to bring such issues The appointment and Furthermore, the IDR compliance shareholders approved the annual to the Audit & Risk Committee’s determination of fees of the officer has the power to conduct remuneration for non-executive attention on a confidential independent auditors is the direct investigations in connection with directors for the 2015 financial basis. In accordance with responsibility of the Audit & Risk the application and enforcement year, based on the following ArcelorMittal’s Anti-Fraud and Committee. The Audit & Risk of the IDR, in which any employee annual fees: Whistleblower Policy, concerns Committee is further responsible or member of senior management with regard to possible fraud for obtaining, at least once each or of the Board of Directors is • Basic director’s remuneration: or irregularities in accounting, year, a written statement from required to cooperate. €144,000 ($162,880); auditing or banking matters or the independent auditors that bribery within ArcelorMittal or their independence has not Selected new employees of • Lead Independent Director’s any of its subsidiaries or other been impaired. The Audit & Risk ArcelorMittal are required to remuneration: €204,000 controlled entities may also Committee has also obtained a participate in a training course ($230,746); be communicated through confirmation from ArcelorMittal’s about the IDR upon joining the “Corporate Governance - principal independent auditors to ArcelorMittal and every three • Additional remuneration for Whistleblower” section of the the effect that none of its former years thereafter. The individuals the Chair of the Audit & Risk ArcelorMittal website at www. employees are in a position within who must participate in the IDR Committee: €28,000 ($31,671); arcelormittal.com, where ArcelorMittal that may impair the training include the members of ArcelorMittal’s Anti-Fraud Policy principal auditors’ independence. senior management, employees • Additional remuneration for the and Code of Business Conduct who work in finance, legal, sales, other Audit & Risk Committee are also available in each of the Measures to prevent insider mergers and acquisitions and members: €17,000 ($19,229); main working languages used dealing and market manipulation other areas that the Company within the Group. In recent years, may determine from time to • Additional remuneration for the ArcelorMittal has implemented The Board of Directors of time. In addition, ArcelorMittal’s Chairs of the other committees: local whistleblowing facilities, as ArcelorMittal has adopted Insider Code of Business Conduct €16,000 ($18,098); and needed. Dealing Regulations (“IDR”), which contains a section on “Trading in are updated when necessary and the Securities of the Company” • Additional remuneration for During 2016, there were 153 in relation to which training is that emphasizes the prohibition the members of the other complaints received relating to conducted throughout the Group. to trade on the basis of inside committees: €11,000 ($12,464). alleged fraud, which were referred The IDR’s most recent version information. An online interactive to and duly reviewed by the has been updated in light of the training tool based on the IDR The total annual remuneration Company’s Internal Assurance new Market Abuse Regulation was developed in 2010 and of the members of the Board of Department. Following review by and is available on ArcelorMittal’s deployed across the group in Directors paid in 2016 and 2015 the Audit & Risk Committee, none website, www.arcelormittal.com. different languages in 2011 was as follows: of these complaints was found to through ArcelorMittal’s intranet, be significant. The IDR apply to the worldwide with the aim to enhance the staff’s operations of ArcelorMittal. The awareness of the risks of sanctions Internal assurance compliance and data protection applicable to insider dealing. The officer of ArcelorMittal is also importance of the IDR was again ArcelorMittal has an Internal the IDR compliance officer and underscored in the Group Policies Assurance function that, through answers questions that members and Procedures Manual in 2013. its Head of Internal Assurance, of senior management, the reports to the Audit & Risk Board of Directors, or employees

Year ended Year ended Amounts in $ thousands except Long-term incentives information) December 31, 2016 December 31, 2015 Base salary1 $1,550 $1,746 Director fees $1,900 $1,856 Short-term performance-related bonus1 - $1,910 Long-term incentives 1,2 504,643 179,320 1 Chairman and CEO only. Slight differences between the years are possible, due to foreign currency effects. 2 See “Directors, senior management and employees - Compensation - Remuneration framework - Long-term incentives: Equity based incentives (Share Unit Plans)”. 44 Management report

The annual remuneration paid for 2016 and 2015 to the current and former members of the Board of Directors for services in all capacities was as follows:

2016 2015 2016 2015 (Amounts in $ thousands except Short-term Short-term Long-term Long-term share information) 20161 20151 Performance Related Performance Related Number of PSUs Number of PSUs Lakshmi N. Mittal 1,550 1,746 — 1,910 504,643 179,320 Vanisha Mittal Bhatia 153 160 — — — — Narayanan Vaghul 182 204 — — — — Suzanne P. Nimocks 164 184 — — — — Wilbur L. Ross, Jr. 171 180 — — — — Lewis B. Kaden 250 244 — — — — Bruno Lafont 171 180 — — — — Tye Burt 164 173 — — — — Antoine Spillmann2 55 198 — — — — Karen Ovelmen 171 — — — — — Jeannot Krecké 153 173 — — — — Michel Wurth 153 160 — — — — Karel de Gucht2 114 — — — — — Total 3,450 3,602 — 1,910 504,643 179,320 1 Remuneration for non-executive Directors with respect to 2016 (subject to shareholder approval at the annual general meeting to be held on May 10, 2017) will be paid in 2017 and is included in the 2016 column. Remuneration for non-executive Directors with respect to 2015 (paid after shareholder approval at the annual general meeting held on May 4, 2016) is included in the 2015 column. Slight differences between the years are possible, due to foreign currency effects. 2 Mr. de Gucht was elected to ArcelorMittal’s Board of Directors on May 4, 2016 and Mr. Spillmann stepped down from the Board in May 2016.

As of December 31, 2016, ArcelorMittal did not have any loans or advances outstanding to members of its Board of Directors and ArcelorMittal had not given any guarantees in favor of any member of its Board of Directors.

None of the members of the Board of Directors, including the Chairman and CEO, benefit from an ArcelorMittal pension plan.

The policy of the Company is not to grant any share-based remuneration to members of the Board of Directors who are not executives of the Company.

The following tables provide a summary of the options and the exercise price of options and Performance Share Units (“PSUs”) granted to the Chairman and CEO, who is the sole executive director on the Board of Directors, as of December 31, 2016.

Options granted Options granted Options granted Options granted Weighted Average Exercise in 2010 in 2009 in 2008 in 2007 Options Total Price of Options Lakshmi N. Mittal 56,500 60,000 60,000 60,000 236,500 $51.95 Exercise price1 $30.66 $36.38 $78.44 $61.09 — $51.95 Term (in years) 10 10 10 10 — — Expiration date Aug. 3, 2020 Aug. 4, 2019 Aug. 5, 2018 Aug. 2, 2017 — — 1 Due to the spin-off of Aperam on 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 2016 PSUs granted in 2015 PSUs granted in 2014 Lakshmi N. Mittal 504,643 179,320 128,758 Term (in years) 3+2 3 3 Vesting date 1 January 1, 2020 and January 1, 2021 June 30, 2018 June 27, 2017 1 See “Directors, senior management and employees - Compensation - Remuneration framework - Long-term incentives: Equity based incentives (Share Unit Plans)”, for vesting conditions.

The PSUs granted in 2013 and Remuneration of senior car allowance) and $2 million advances were outstanding as of 2012 have not given right to management in short-term performance- December 31, 2016. receive ArcelorMittal shares at related variable remuneration The following table shows the the end of the vesting period as The total remuneration consisting of a bonus linked to remuneration received by the the performance conditions set paid in 2016 to members the Company’s 2015 results. CEO, the CFO and the Executive at the date of the grant have not of ArcelorMittal’s senior Officers as determined by the been met. management listed in “Directors, During 2016, approximately ARCG Committee in relation to senior management and $900,000 was accrued by 2016 and by the CEO and the employees - Directors and senior ArcelorMittal to provide pension other GMB members (including management” (including Mr. benefits to senior management the CFO) in relation to 2015, Lakshmi N. Mittal in his capacity (other than Mr. Mittal). including all remuneration as CEO) was $10.5 million in base components. salary and other benefits paid No loans or advances in cash (such as health, other to ArcelorMittal’s senior insurances, lunch allowances, management were made during financial services, gasoline and 2016, and no such loans or Management report 45

Chief Financial Officer and Other GMB Chief Executive Officer Executive Officers Members (Amounts in $ thousands except for Long-term incentives) 2016 2015 20165 2015 Base salary1 1,550 1,746 8,729 3,497 Retirement benefits - - 898 305 Other benefits2 42 40 225 101 Short-term incentives3 - 1,910 2,029 2,948 Long-term incentives - fair value in $ thousands4 2,297 1,530 6,882 2,431 - number of share units 504,643 179,320 1,528,868 284,985 1 The base salaries of the CEO and CFO have not been increased in 2016. In 2016, base salary also includes vacation, notice period and severance payments. 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. 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 PSUs granted to the CEO and to the CFO and Executive Officers was $2 million (net of reversal of expenses relating to unvested PSUs) for the year ended December 31, 2016. The remuneration expenses recognized for the RSUs/ PSUs granted to the CEO and to the other GMB members was $7 million for the year ended December 31, 2015. 5 Jim Baske is included until June 30, 2016, Davinder Chugh is included until July 20, 2016 and Robrecht Himpe is included as from July 1, 2016.

The Company allocated 2016 remuneration according to the following timeline to the CEO and the CFO:

Short term incentive STI payout 2015 performance performance-related measurement starts Base salary review PSUs allocation

Long term Performance measured for LTI incentives 3 years + 2 years Short term Performance measured incentives (cash)

Base salary and benefits

1/2015 1/2016 4/2016 6/2016 12/2016

The Company allocated 2016 remuneration according to the following timeline to the Executive Officers:

Short term incentive STI payout 2015 performance performance-related PSUs allocation measurement starts Base salary review

Long term Performance measured for LTI 3 years + 2 years incentives

Short term Performance measured incentives (cash)

Base salary and benefits

1/2015 1/2016 March/April /2016 6/2016 12/2016 46 Management report

SOX 304 and clawback policy determines that remuneration • review and approve corporate and Mr. Tye Burt. Regular invitees should be recovered, it may take goals and objectives relevant include Mr. Lakshmi N. Mittal (CEO Under Section 304 of the appropriate action on behalf of to the CEO Office and Executive and Chairman) and Mr. Henri Sarbanes-Oxley Act, the SEC may the Company, including, but not Officers and other members Blaffart (Head of Group Human seek to recover remuneration limited to, demanding repayment of executive management as Resources and Corporate Services). from the CEO and CFO of the or cancellation of cash bonuses, deemed appropriate by the Ms. Anne van Ysendyck (Company Company in the event that it is incentive-based or equity-based committee regarding their Secretary) acts as secretary. The required to restate accounting remuneration or any gains remuneration, and assess relevant persons are not present information due to any material realized as the result of options performance against goals and when their remuneration is misstatement thereof or as a being exercised or awarded or objectives; discussed by the ARCG Committee. result of misconduct in respect of long-term incentives vesting. The The ARCG Committee Chairman a financial reporting requirement Board may also choose to reduce • make recommendations to the presents its decisions and findings under the U.S. securities laws (the future remuneration as a means of Board with respect to incentive to the Board of Directors after each “SOX Clawback”). recovery. remuneration plans and equity- ARCG Committee meeting. based plans; Under the SOX Clawback, the Remuneration policy Remuneration strategy CEO and the CFO may have to • identify candidates qualified to reimburse ArcelorMittal for any Board oversight serve as members of the Board, Scope bonus or other incentive- or the CEO Office and Executive equity-based remuneration The Board is responsible for Officers; ArcelorMittal’s remuneration received during the 12-month ensuring that the Group’s philosophy and framework apply period following the first public remuneration arrangements • recommend candidates to the to the following groups of senior issuance or filing with the are equitable and aligned with Board for appointment by the management: SEC (whichever occurs first) the long-term interests of the general meeting of shareholders of the relevant filing, and any Company and its shareholders. It or for appointment by the Board • the CEO and the CFO; and profits realized from the sale of is therefore critical that the Board to fulfill interim Board vacancies; ArcelorMittal securities during that of Directors remain independent • the Executive Officers. 12-month period. of management when making • develop, monitor and review decisions affecting remuneration corporate governance principles The remuneration philosophy and The Board of Directors, through its of the CEO, the CFO and the applicable to the Company; governing principles also apply, ARCG Committee, decided in 2012 Executive Officers. with certain limitations, to a wider to adopt its own clawback policy • facilitate the evaluation of the group of employees including (the “Clawback Policy”) that applies To this end, the Board of Directors Board; Executive Vice Presidents, Vice to the members of the former GMB has established the ARCG Presidents, General Managers and and to the Executive Vice President Committee to assist it in making • review the succession planning Managers. of Finance of ArcelorMittal. In 2016, decisions affecting employee and the executive development the Clawback Policy was updated remuneration. All members of the of the members of the CEO Office Remuneration philosophy to reflect the Company’s structural ARCG Committee are required and Executive Officers; changes and now applies to the to be independent under the ArcelorMittal’s remuneration CEO Office and the Executive Company’s corporate governance • submit proposals to the Board philosophy for its senior managers Officers. guidelines, the NYSE standards on the remuneration of the is based on the following and the 10 Principles of Corporate members of the CEO Office and principles: The Clawback Policy comprises Governance of the Luxembourg Executive Officers, and on the cash bonuses and any other Stock Exchange. appointment of new members • provide total remuneration incentive-based or equity-based thereto and new directors; and competitive with executive remuneration, as well as profits The members are appointed remuneration levels of a peer from the sale of the Company’s by the Board of Directors each • make recommendations to the group composed of a selection of securities received during the year after the annual general Board of Directors in respect of industrial companies of a similar 12-month period following the meeting of shareholders. The the Company’s framework of size and scope; first public issuance or filing with members have relevant expertise remuneration for the members the SEC (whichever first occurs) or experience relating to the of the CEO Office and Executive • encourage and reward of the filing that contained purposes of the ARCG Committee. Officers and such other members performance that will lead to the material misstatement of The ARCG Committee makes of the executive management as long-term enhancement of accounting information. decisions by a simple majority with designated by the committee. In shareholder value; no member having a casting vote. making such recommendations, For purposes of determining the committee may take • promote internal pay equity whether the Clawback Policy The ARCG Committee is chaired into account factors that it and provide “market” median should be applied, the Board by Mr. Lewis Kaden, Lead deems necessary. This may (determined by reference to its of Directors will evaluate the Independent Director. include a member’s total cost identified peer group) base pay circumstances giving rise to of employment (factoring in levels for ArcelorMittal’s senior the restatement (in particular, Appointments, remuneration and equity/long term incentives, any managers with the possibility whether there was any fraud or corporate governance committee perquisites and benefits in kind to move up to the third quartile misconduct), determine when and pension contributions). of the market base pay levels, any such misconduct occurred The primary function of the ARCG depending on performance over and determine the amount of Committee is to assist the Board The ARCG Committee met six time; and remuneration that should be of Directors, among others with times in 2016. Its members recovered by the Company. In the respect to the following: comprise Mr. Lewis Kaden event that the Board of Directors (Chairman), Ms. Suzanne Nimocks Management report 47

• promote internal pay equity and employee reflect the performance For the CEO and the CFO, the 2016 For the Executive Officers, the 2016 target total direct remuneration of the ArcelorMittal group as a bonus formula is based on: bonus formula is based generally (base pay, bonus, and long term whole and /or the performance on the following as tailored for incentives) levels for senior of the relevant business units, • Operating income plus their respective positions: managers at the 75th percentile the achievement of objectives depreciation, impairment of the market. specific to the department and expenses and exceptional items • Operating income plus the individual employee’s overall (“EBITDA”) at the Group level: depreciation, impairment Remuneration framework performance. 60% (this acts as “circuit breaker” expenses and exceptional items with respect to group-level (“EBITDA”) at the Group, segment The ARCG Committee develops The calculation of ArcelorMittal’s financial performance measures and / or Business unit level: this proposals on senior management 2016 performance bonus as explained below); acts as the “circuit breaker” with remuneration annually for is aligned with its strategic respect to financial performance consideration by the Board of objectives of improving health and • Free cash flow (“FCF”) at the measures except for Mining Directors. Such proposals include safety performance and overall Group level: 20%; and where the Mining volume is the the following components: competitiveness and the following “circuit breaker”; principles: • Health and safety performance at • fixed annual salary; the Group level: 20%. • Free cash flow (“FCF”) at the • no performance bonus will be Group, segment and /or Business • short-term incentives (i.e., triggered if the achievement level EBITDA operating as a the “circuit unit level; performance-based bonuses); of the performance measures is breaker” for financial measures and less than the threshold of 80%; means that the 80% threshold • Health and safety performance; described above must be met and • long-term incentives (i.e., stock • achievement of 100% of the for EBITDA in order to trigger any options (prior to May 2011), RSUs performance measure yields bonus payment with respect to • Business specific measures. and PSUs (after May 2011), PSUs 100% of the performance bonus the EBITDA and FCF performance only as from 2016. pay-out; and measures. For the Executive Officers, the performance bonus at 100% The Company does not have any • achievement of more than For the CEO, the performance achievement of performance deferred compensation plans for 100% and up to 120% of the bonus at 100% achievement of targets linked to the business plan senior management, including the performance measure generates performance targets linked to the is equal to 60% of their base salary. Chairman and CEO. a higher performance bonus pay- business plan is equal to 100% out, except as explained below. of his base salary. For the CFO, The achievement level of Fixed annual salary the performance bonus at 100% performance for performance The performance bonus for achievement of performance bonus for the CEO, the CFO Base salary levels are reviewed each individual is expressed as a targets linked to the business plan and the Executive Officers is annually and compared to the percentage of his or her annual is equal to 80% of his base salary. summarized as follow: market to ensure that ArcelorMittal base salary. Performance bonus remains competitive with market pay-outs may range from 50% of The different performance median base pay levels. the target bonus for achievement measures are combined through a of performance measures at the cumulative system: each measure Short-term incentives threshold (80%), to up to 150% is calculated separately and is for an achievement at or in excess added up for the performance Annual performance bonus plan of the ceiling of 120%. Between bonus calculation. the 80% threshold and the 120% ArcelorMittal has a short-term ceiling, the performance bonus Performance below threshold will incentive plan consisting of a is calculated on a proportional, result in zero performance bonus performance-based bonus plan. straight-line basis. payout. Bonus calculations for each

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 Chief Financial Officer 40% of base pay 80% of base pay 120% of base pay Executive Officers 30% of base pay 60% of base pay 90% of base pay

Individual performance and may cause the performance bonus At the end of the financial The 2015 Performance Bonus with assessment ratings define the pay-out to be higher than 150% year, achievement against the respect to the Executive Officers individual bonus multiplier that of the target bonus, up to 225% of measures is assessed by the ARCG was paid out in March/April 2016. will be applied to the performance target bonus being the absolute Committee and the Board and The business bonus multipliers bonus calculated based on maximum for the CEO. Similarly, a the short-term incentive award for the Executive Officers were actual performance against the reduction factor will be applied for is determined. There were no between 0 and 1.17 (with an performance measures. Those those at the lower end. payments made with respect to average of 0.57) depending on individuals who consistently the 2015 Performance Bonus Plan their business performance. perform at expected levels will In exceptional cases, there are for the 2015 senior management have an individual multiplier of 1. some entitlements to a retention (CEO and other GMB members). For outstanding performers, an bonus or a business specific bonus. individual multiplier of up to 1.5 48 Management report

Other benefits meeting to the May 2017 annual total cost of employment (in U.S. and measurable metrics for general shareholders’ meeting, a dollars per tonne) for the steel shareholder value creation. In addition to the remuneration maximum of 30,000,000 PSUs may business (TCOE) and the mining described above, other benefits be allocated to eligible employees volume plan and ROCE for the PSU plan for CEO Office (formally may be provided to senior under the ArcelorMittal Equity Mining segment until the 2013 GMB PSU Plan) management and, in certain cases, Incentive Plan and the GMB PSU grant. As from 2014, most of the other employees. These other Plan combined. steel business units have kept The GMB PSU Plan was designed benefits can include insurance, only ROCE as a performance to enhance the long-term housing (in cases of international ArcelorMittal equity incentive plan measure and the Mining segment performance of the Company and transfers), car allowances and tax continued with ROCE and mining align the members of the GMB to assistance. RSUs. RSUs granted under the volume plan. In case the level the Company’s objectives. The ArcelorMittal Equity Incentive of achievement of performance GMB PSU Plan is now applicable Long-term incentives: equity- Plan are designed to provide a is below the threshold, there is to the CEO Office. This PSU Plan based incentives (share unit plans) retention incentive to eligible no vesting, and the rights are complements ArcelorMittal’s employees. RSUs are subject to automatically forfeited. existing program of annual On May 10, 2011, the annual “cliff vesting” after three years, performance-related bonuses general meeting of shareholders with 100% of the grant vesting In 2016, in order to ensure which is the Company’s reward approved the ArcelorMittal on the third anniversary of the achievement of the Action system for short-term performance Equity Incentive Plan, a new grant contingent upon the 2020, ArcelorMittal made a and achievements. The main equity-based incentive plan continued active employment of special grant (“Special Grant”) to objective of this PSU Plan is to that replaced the Global Stock the eligible employee within the qualifying employees (including be an effective performance- Option Plan (see below and note Group. RSUs were an integral part the Executive Officers), instead enhancing scheme for members 7.3 to the consolidated financial of the Company’s remuneration of the standard grant. The value based on the achievement of statements for a description of framework. Between 500 and of the Special Grant at grant date ArcelorMittal’s strategy aimed at the Global Stock Option Plan). The 700 of the Group’s most senior is based generally on a specified creating a measurable long-term ArcelorMittal Equity Incentive Plan managers were eligible for RSUs. percentage of the base salary shareholder value. is intended to align the interests depending on the position of of the Company’s shareholders See note 7.3 to the consolidated the employee at grant date. The The members of the CEO Office and eligible employees by financial statements for amounts vesting is subject to continued will be eligible for PSU grants. This allowing them to participate in of RSUs granted. active employment within the PSU Plan provides for cliff vesting the success of the Company. The ArcelorMittal group and to yearly on the third year anniversary of the ArcelorMittal Equity Incentive PSUs. The grant of PSUs under performance of ROCE targets and grant date, under the condition Plan provides for the grant the ArcelorMittal Equity other strategic objectives within that the relevant CEO Office of RSUs and PSUs to eligible Incentive Plan aims to serve the business units. The Special member continues to be actively Company employees (including as an effective performance- Grant has been split into two parts: employed by the ArcelorMittal the Executive Officers) and is enhancing scheme based on a target grant which will vest if the group on that date. If the CEO designed to incentivize employees, the employee’s contribution to performance is at target and an Office member is retired on improve the Company’s long- the eligible achievement of the over-performance grant which will that date or in case of an early term performance and retain Company’s strategy. Awards in vest if the performance is at 120% retirement by mutual consent, the key employees. On May 8, 2013, connection with PSUs are subject or above. Any PSU gives the right relevant CEO Office member will the annual general meeting of to the fulfillment of cumulative to a maximum of one ArcelorMittal not automatically forfeit PSUs and shareholders approved the GMB performance criteria over a three- Share at vesting. pro rata vesting will be considered PSU Plan, which provides for the year period from the date of the at the end of the vesting period grant of PSUs to GMB members PSU grant. The target group for The Special Grant provides for at the sole discretion of the (and is now applicable to the CEO PSU grants initially included the vesting in two parts: ARCG Committee of the Board of Office). Until the introduction CEO and the other GMB members. Directors. Awards under this PSU of the GMB PSU Plan in 2013, However, from 2013 onwards, the - 50% would vest after three years Plan are subject to the fulfillment GMB members were eligible to CEO and other GMB members (in 2019) and of cumulative performance criteria receive RSUs and PSUs under the (and in 2016, the CEO Office) over a three-year period from the ArcelorMittal Equity Incentive received PSU grants only under - 50% would vest after five years date of the PSU grant. The value of Plan. In 2016, a special grant was the GMB PSU Plan instead of the (in 2021). the grant at grant date will equal approved in order to align the ArcelorMittal Equity Incentive Plan one year of base salary for the grant with the Action 2020 plan (see “GMB PSU Plan”). The allocation of PSUs to eligible CEO and 80% of base salary for put in place by ArcelorMittal. employees under ArcelorMittal the other CEO Office members. See note 7.3 to the consolidated Equity Incentive Plan has Each PSU may give the right to up The maximum number of PSUs financial statements for amounts been reviewed by the ARCG to two shares of the Company in (and RSUs previously) available of PSUs granted. Committee, comprised of three 2013, and each PSU from the 2014 for grant during any given year is independent directors, which grant may convey the right to up subject to the prior approval of PSUs vest three years after their makes a recommendation to to one and a half shares. the Company’s shareholders at date of grant subject to the the full Board of Directors. The the annual general meeting. The eligible employee’s continued Committee has also decided See note 7.3 to the consolidated annual shareholders’ meeting employment with the Company the criteria for granting PSUs financial statements for amounts on May 4, 2016 approved the and the fulfillment of targets and made its recommendation of PSUs granted under this plan. maximum to be granted until the related to the following to the Board of Directors. These next annual shareholders’ meeting. performance measures: return criteria are based on the principle In order to ensure achievement of For the period from the May 2016 on capital employed (ROCE) and of rewarding for performance the Action 2020 specifically by the annual general shareholders’ a strategic measure which was upon the achievement of clear CEO Office, ArcelorMittal made a Management report 49

special grant in 2016 instead of the 120% of the median TSR. None to the Board of Directors. The performance and on generating standard grant. The value of this of the PSUs will vest if the vesting criteria of the PSUs are sustained shareholder value from special grant at grant date equaled Company’s TSR performance is also monitored by the ARCG relative performance. -150% of the base salary for the below 100% of that of the peer Committee. CEO Office members. group. The following remuneration • For 25% of the PSUs, For further detail on the stock charts, which illustrate the various According to this special grant, performance is compared to option plan, RSU Plan and PSU elements of compensation of the each member of the CEO Office the median of the S&P 500 plan, including the total number of CEO, the CFO and the Executive was eligible for PSU grants under companies. The percentage of shares outstanding, fair value, and Officers are applicable for 2016. the PSU plan for CEO Office. PSUs vesting will be 50% for exercise prices, please see note For each of the charts below, the achieving performance equal to 7.3 to the consolidated financial columns on the left, middle and Awards under the Special Grant 100% of the index performance statements. on the right, respectively, reflect are subject to the fulfillment of of the S&P 500 companies the breakdown of compensation cumulative performance criteria: and 100% for achieving a Global Stock Option Plan if targets are not met, met and 50% would vest after three years performance 2% better than exceeded. (in 2020) and 50% would vest after the index per annum over Prior to the May 2011 annual five years (in 2022). 50% of the performance. None of the PSUs general shareholders’ meeting PSUs granted to each member of will vest if the Company’s TSR adoption of the ArcelorMittal the CEO Office is eligible to vest performance is below 100% of Equity Incentive Plan described based on the Company’s Total index performance of the S&P below, ArcelorMittal’s equity-based Shareholder Return (“TSR”) defined 500 companies. incentive plan took the form of a as the share price at the end of stock option plan known as the period minus the share price at The other 50% of the criteria to be Global Stock Option Plan. For start of period plus any dividend met to trigger vesting of the PSUs further detail on the stock option paid divided by the share price is based on the development of plan, including the total number at the start of the period. “Start of Earnings Per Share (EPS), defined of options outstanding, exercise period” and “end of period” will be as the amount of earnings per prices and maturity dates, please defined by the ARCG Committee of share outstanding compared to see note 7.3 to the consolidated the Board of Directors. The TSR will a peer group of companies. The financial statements. then be compared with the TSR of percentage of PSUs vesting will a peer group of companies and the be 50% for achievement of 100% Performance consideration TSR of the companies forming the of the median EPS, 100% for S&P 500 index, each counting for achieving 120% of the median EPS. Remuneration mix half of the weighting. The allocation of PSUs to eligible The target total remuneration • For 25% of the PSUs, CEO Office members is reviewed of the CEO and the CFO is performance is compared to by the ARCG Committee of the structured to attract and retain the peer group. The percentage Board of Directors, which is executives; the amount of the of PSUs vesting will be 50% for comprised of three independent remuneration actually received is achieving 100% of the median directors, and which makes a dependent on the achievement of TSR and 100% for achieving proposal and recommendation superior business and individual

CEO Remuneration MIX CFO Remuneration MIX

150% 150% No pension contribution

75% 75% 180% 225% 80% 100% 13% 13% 13%

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

Below threshold Target Maximum Below threshold Target Maximum

Base salary Short term incentives Long term incentives Base salary Short term incentives Long term incentives Other benefits 50 Management report

Executive Officer - Remuneration MIX

180%

150% 135% 60%

24% 24% 24% 100% 100% 100%

Below threshold Target Maximum

Base salary Short term incentives Long term incentives Other benefits

Major shareholders and related party transactions

Major shareholders The following table sets out information as of December 31, 2016 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 1,146,687,339 37.40 Treasury Shares 3 7,222,439 0.24 Other Public Shareholders 4 1,911,801,091 62.36 Total 3,065,710,869 100.00 Of which: Directors and Senior Management 5 2,072,445 0.07

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, 2016 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. Lakshmi Mittal 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, 2016. 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 190,975,045 ArcelorMittal ordinary shares. Lumen, a limited liability company organized under the laws of Luxembourg, was the owner of 954,864,984 ArcelorMittal ordinary shares. Mr. Mittal was the direct owner of 534,310 ArcelorMittal ordinary shares and held options to acquire an additional 236,500 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 76,500 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 1,146,610,839 ArcelorMittal ordinary shares, Mrs. Mittal was the beneficial owner of 1,145,916,529 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 1,146,687,339 ordinary shares. Excluding options, Mr. Lakshmi Mittal and Mrs. Usha Mittal together beneficially owned 1,146,450,839 ArcelorMittal ordinary shares at such date. As of December 31, 2015 and 2014, the Significant Shareholder held 39.39% of the Company’s ordinary shares. 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) 965,935 stock options that can be exercised by senior management (other than Mr. Mittal) and (2) 236,500 stock options that can be exercised by Mr. Mittal, in each case within 60 days of December 31, 2016, i.e. 0.04% 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 The Capital Group Companies Inc.’s shareholding increased to 168,541,781 shares, corresponding to an interest of 5.49% on April 11, 2016 and subsequently decreased to 147,321,072 on January 25, 2017, corresponding to an interest of 4.8%. 5 Includes shares beneficially owned by directors and members of senior management; excludes shares beneficially owned by Mr. Mittal. Note that (i) stock options included in that are exercisable within 60 days are excluded from “Treasury Shares” above (see also note 3 above) and (ii) ordinary shares are included in “Other Public Shareholders” above. Aditya Mittal is the direct owner of 146,846 ArcelorMittal ordinary shares and holds options to acquire an additional 189,200 ArcelorMittal ordinary shares, together representing less than 0.1% of the ArcelorMittal ordinary shares outstanding. Aditya Mittal holds a total of 617,626 PSU’s of which 84,694 may vest in June 2017, 117,964 may vest in June 2018 and 414,968 of which 50% may vest after 3 years in 2020 and 50% may vest after five years in 2022. As the vesting of PSU’s is dependent on company performance criteria not fully within the control of the PSU holder, Aditya Mittal does not beneficially own ArcelorMittal ordinary shares by virtue of his ownership of the PSU’s. Aditya Mittal is the son of Mr. Mittal and Mrs. Mittal and Group CFO and CEO ArcelorMittal Europe. Vanisha Mittal Bhatia is the direct owner of 25,500 ArcelorMittal ordinary shares, representing less than 0.1% of the ArcelorMittal ordinary shares outstanding. Vanisha Mittal Bhatia is the daughter of Mr. Mittal and Mrs. Mittal and a member of the Company’s Board of Directors. Management report 51

On January 16, 2013, ArcelorMittal of the name of the shareholder, shareholder and registration indirectly, any ordinary shares, the issued $2.25 billion aggregate the number of shares held rights agreement (the acquired MCNs or other securities principal amount of its 6% by such shareholder and the “Shareholder’s Agreement”) exchangeable for or convertible Mandatorily Convertible Notes due amount paid up on each share dated August 13, 1997. Pursuant into ordinary shares owned by 2016, of which Lumen subscribed in the shareholder register of to the Shareholder’s Agreement them for a period of at least 180 for $300 million in principal ArcelorMittal. and subject to the terms and days from January 9, 2013, subject amount. conditions thereof, ArcelorMittal to certain limited exceptions or At December 31, 2016, 2,349 shall, upon the request of certain the prior written consent of the As of December 31, 2015, shareholders other than the holders of restricted ArcelorMittal representatives. In connection with 1,817,869 Mandatorily Convertible Significant Shareholder, holding shares, use its reasonable efforts the Share Offering and the offering Notes had been converted at an aggregate of 48,144,813 to register under the Securities of the MCNs, ArcelorMittal entered the option of their holders. On ArcelorMittal ordinary shares Act of 1933, as amended, the sale into a share lending agreement January 15, 2016, ArcelorMittal were registered in ArcelorMittal’s of ArcelorMittal shares intended with Lumen on January 9, 2013, issued 137,967,116 new ordinary shareholder register, representing to be sold by those holders. pursuant to which Lumen agreed shares of the Company upon approximately 1.57% of the By its terms, the Shareholder’s to make available for borrowing conversion as at such date of ordinary shares issued (including Agreement may not be amended, by ArcelorMittal up to a maximum the 88,182,131 outstanding treasury shares). other than for manifest error, amount of 48.9 million ordinary Mandatorily Convertible Notes except by approval of a majority of shares in exchange for a loan fee of at a conversion ratio of 1.56457. At December 31, 2016, there ArcelorMittal’s shareholders (other $0.00046 per lent ordinary share, Following this issuance, the share were 219 registered shareholders than the Significant Shareholder accruing daily from and including capital of the Company was holding an aggregate of and certain permitted transferees) the date on which the loaned comprised of 1,803,359,338 Shares 221,176,196 New York Shares, at a general shareholders’ meeting. ordinary shares were delivered to and the Significant Shareholder representing approximately the borrower to, but excluding, (when aggregated with ordinary 7.21% of the ordinary shares Memorandum of Understanding the date of return of the borrowed shares of ArcelorMittal and options issued (including treasury shares). ordinary shares. Under the share to acquire ordinary shares of ArcelorMittal’s knowledge of the The Memorandum of lending agreement, deliveries ArcelorMittal held directly by Mr. number of New York Shares held Understanding entered into in of the loaned shares by Lumen and Mrs. Mittal) held 37.41% of the by U.S. holders is based solely connection with the Mittal Steel was to occur on the dates an outstanding shares. on the records of its New York acquisition of Arcelor, certain equal number of ordinary shares transfer agent regarding registered provisions of which expired in were required to be delivered Following Company’s equity ArcelorMittal ordinary shares. August 2009 and August 2011, by ArcelorMittal pursuant to the offering authorized by the EGM is described under “Material terms of the MCNs. The share which closed on April 8, 2016, the At December 31, 2016, contracts, Memorandum of lending agreement provided that Company’s issued share capital 1,682,467,041 ArcelorMittal Understanding”. ArcelorMittal could terminate all was increased from 1,803,359,338 ordinary shares were held through or any portion of any loan made ordinary shares to 3,065,710,869 the Euroclear/Iberclear clearing Acquisition of ordinary shares and there under at any time and ordinary shares. system in the Netherlands, France, mandatorily convertible notes that all outstanding loans would Luxembourg and Spain. in the January 2013 offering of terminate on the date which was The ArcelorMittal ordinary shares such securities by ArcelorMittal, three business days after the date may be held in registered form Voting rights and entry into the Lock-Up Letter on which a general meeting of on the Company’s register only. and Share Lending Agreement in shareholders of ArcelorMittal had Registered shares are fully fungible Each share entitles the holder to connection therewith approved a resolution approving and may consist of: one vote at the general meeting of sufficient authorized share capital shareholders, and no shareholder ArcelorMittal issued 104,477,612 and authorizing the Board of a. ArcelorMittal Registry Shares, benefits from specific voting ordinary shares in an offering Directors of the Company to cancel which are registered directly rights. For more information that closed on January 14, 2013 the preferential subscription right on ArcelorMittal’s Luxembourg relating to ArcelorMittal shares, (the “Share Offering”) and issued of existing shareholders to allow shareholder register, see “Memorandum and Articles $2,250,000,000 aggregate principal return to Lumen of all borrowed of Association, Voting and amount of 6.00% Mandatorily ordinary shares. Under the share b. shares traded on Euronext information rights”. Convertible Subordinated Notes lending agreement, Lumen had Amsterdam, Euronext Paris, due 2016 (the “MCNs” or each a no rights (including voting or the regulated market of the Related Party Transactions “Note”) in an offering that closed disposition rights) with respect Luxembourg Stock Exchange and on January 16, 2013. Lumen to any ordinary shares that had the Spanish Stock Exchanges, ArcelorMittal engages in certain subscribed for 17,910,448 ordinary been loaned to ArcelorMittal which are held in Euroclear, or commercial and financial shares in the Share Offering and not yet returned to Lumen. transactions with related parties, and acquired $300 million in Subject to this condition being c. shares traded on the NYSE, including associates and joint principal amount of MCNs. The met, it was expected that any named New York Registry Shares, ventures of ArcelorMittal. Please underwriting agreement entered ordinary shares to be delivered which are registered (including in refer to note 11 of ArcelorMittal’s into in connection with such by ArcelorMittal to Lumen upon the name of the nominee of DTC) consolidated financial statements. offerings provided as a closing termination of the loan(s) would in a register kept by or on behalf condition that Lumen and be newly issued ordinary shares of ArcelorMittal by its New York Shareholder’s Agreement Nuavam each execute a lock-up issued in favor of Lumen (with a transfer agent. letter whereby they would each cancellation of the shareholders’ The Significant Shareholder, a agree not to offer, sell, contract to preferential subscription right). Under Luxembourg law, the holding company owned by sell, pledge, grant any option to The extraordinary general meeting ownership of registered shares the Significant Shareholder and purchase, make any short sale or of shareholders of ArcelorMittal is evidenced by the inscription ArcelorMittal are parties to a otherwise dispose of, directly or that took place on May 8, 2013 52 Management report

(the “May 2013 EGM”) approved rights offering launch. The actual exercise its rights under the euro- and Aperam expired at year-end sufficient authorized share capital amount of the capital increase in denominated rights issuance 2012. The parties agreed to renew and authorized the Board of USD depended on the exchange gave rise to a foreign exchange a limited number of services Directors of the Company to cancel rate at closing. The Significant exposure opposite to the one of where expertise and bargaining the preferential subscription right Shareholder agreed with the the Company. Accordingly, on power created value for each of existing shareholders to allow underwriters that it would not, the same date, the Significant party. ArcelorMittal will continue return to Lumen of all borrowed (and would not announce the Shareholder entered into currency to provide certain services in ordinary shares. Accordingly, the intention to) without the prior forward transactions, with the 2017 relating to areas including share lending agreement with consent of the three banks on same credit institution as the environmental and technical Lumen was terminated three behalf of the underwriters until (a) Company, to hedge its foreign support and the administration of business days after the date of the 180 days following the settlement exchange exposure arising from the shareholders register. May 2013 EGM. On January 15, of the equity offering or (b) if potential fluctuations in the 2016, upon final maturity of the the underwriting agreement USD/euro exchange rate. The In the area of research and MCNs, the remaining outstanding terminated prior to such date, transactions, which consisted of development, Aperam entered 88,182,131 Notes were converted the date of such termination, buying euro and selling U.S. dollar into a frame arrangement with into 137,967,116 new ordinary offer, sell, contract to sell, pledge, at an amount of €1 billion, settled ArcelorMittal to establish a shares of ArcelorMittal (including grant any option to purchase, on March 30, 2016. structure for future cooperation Lumen Investments Sàrl’s make any short sale or otherwise in relation to certain ongoing or allotment). Following this issuance, dispose of any ordinary shares On April 8, 2016, ArcelorMittal new research and development the share capital of ArcelorMittal of ArcelorMittal, or any options completed the equity offering programs. Currently, only limited amounted to EUR 7,453,441,006.98 or warrants to purchase any with net proceeds of $3.1 billion. research and development represented by 1,803,359,338 ordinary shares of ArcelorMittal, New shares of 1,262,351,531 support for existing projects Shares. For the 1,817,869 Notes or any securities convertible into, were issued at a subscription are implemented through the previously converted at the option exchangeable for or that represent price of €2.20 per New Share. The agreement, but new collaborative of their holders, ArcelorMittal the right to receive ordinary shares Significant Shareholder exercised endeavors are foreseen in 2017. delivered a total of 2,275,026 of ArcelorMittal, whether now its rights for New Shares pro rata treasury shares. owned or hereinafter acquired, to its shareholding of 37.38%. The purchasing and sourcing whether owned directly (including Following the equity offering, of raw materials generally were Acquisition of ordinary shares of holding as a custodian) or through ArcelorMittal’s issued share capital not covered by the Transitional ArcelorMittal by way of a non- beneficial ownership, subject to consists of 3,065,710,869 shares Services Agreement. Aperam is statutory preferential subscription certain exceptions. without nominal value. responsible for the sourcing of rights (the “equity offering”) to its key raw materials, including holders of its existing ordinary An extraordinary general meeting Agreements with Aperam SA post- nickel, chromium, molybdenum shares to subscribe for an of shareholders was held on Stainless Steel Spin-Off and stainless steel scrap. aggregate of up to 1,262,351,531 March 10, 2016 (the “EGM”) in However, under the terms of newly-issued ordinary shares of order to approve certain matters In connection with the spin-off the 2011 Purchasing Services ArcelorMittal (the “New Shares”) in connection with ArcelorMittal’s of its stainless steel division into Agreement, Aperam still relies and entry into the lock-up announced intention to increase a separately focused company, on ArcelorMittal for services in agreements in connection its capital through an equity Aperam SA (“Aperam”), which was relation to the negotiation of therewith. offering. Among other things, completed on January 25, 2011, certain contracts with global or the proposals to be voted on ArcelorMittal entered into several large regional suppliers, including On February 5, 2016, ArcelorMittal included a reduction of the par agreements with Aperam and/ or those relating to the following key announced a proposed capital value per share to €0.10 and an certain Aperam subsidiaries. These categories: operating materials increase of approximately $3 increase in the authorized share agreements include a Master (rolls, electrodes and refractory billion subject to shareholder capital to €3,199,585,721.30. Both Transitional Services Agreement materials), spare parts, industrial approval by way of a rights issue resolutions were approved by the dated January 25, 2011 (the products and services. The structured as non-statutory EGM. “Transitional Services Agreement”) Purchasing Services Agreement preferential subscription rights for for support for/from corporate also permits Aperam to avail itself ArcelorMittal shareholders. The Following the EGM held on activities, a purchasing services of the services and expertise of Significant Shareholder committed March 10, 2016, when the final agreement for negotiation services ArcelorMittal for certain capital to take up its pro-rata entitlement terms of the rights issuance from ArcelorMittal Purchasing (the expenditure items. The Purchasing corresponding to approximately were defined, the Company “Purchasing Services Agreement”), Services Agreement and the $1.1 billion. decided, in accordance with its a sourcing services agreement Sourcing Services Agreement were risk management policies, to for negotiation services from each entered into for an initial term ArcelorMittal entered into hedge part of its foreign exchange ArcelorMittal Sourcing (the of two years, which was to expire a standby underwriting exposure arising from the euro “Sourcing Services Agreement”), on January 24, 2013. However, commitment with three banks denominated proceeds of the certain commitments regarding since that date, the Purchasing acting as joint global coordinators, rights issuance. Accordingly, on cost-sharing in Brazil and certain Services Agreement has been pursuant to which the latter March 10, 2016, the Company other ancillary arrangements extended successively, while the undertook to underwrite the entered into currency forward governing the relationship Sourcing Services Agreement capital increase for the remaining transactions with a credit between Aperam and was limited to IT services as of amount, subject to customary institution to sell euro and ArcelorMittal following the spin- October 2013. The term of the conditions. As the subscription buy U.S. dollar at an amount off, as well as certain agreements Purchasing Services Agreement price was denominated in euros, of €1 billion. The transactions relating to financing. was further extended until January the capital increase amount settled on March 30, 2016. In 25, 2017 and is expected to be corresponded to the euro parallel, the commitment by The Transitional Services extended with a revised scope for equivalent of $3 billion upon the the Significant Shareholder to Agreement between ArcelorMittal an additional year. As from January Management report 53

1, 2016, purchasing services for with costs being shared on the in any companies or partnerships, or a professional depositary of metallics (carbon scrap) were basis of cost allocation parameters membership in any associations, securities may be transferred removed from the Purchasing agreed between the parties. From consortia and joint ventures. in accordance with customary Services Agreement. The Sourcing the demerger of ArcelorMittal procedures for the transfer of Service Agreement (already limited BioEnergia Ltda on July 1, 2011, In general, the Company’s securities in book-entry form. to IT services) was ended by its payroll functions were also corporate purpose comprises mutual agreement of the parties handled by ArcelorMittal Brasil. the participation, in any form The ArcelorMittal ordinary shares on December 31, 2014, when The real estate, insurance activities whatsoever, in companies and may be held in registered form Aperam Sourcing SCA switched and payroll functions of Aperam’s partnerships and the acquisition on the Company’s register only. to its own IT system. New specific Brazilian subsidiaries have not by purchase, subscription or in Registered shares are fully fungible IT service agreements are being been handled by ArcelorMittal any other manner as well as the and may consist of: put in place with Aperam, one Brasil since January 1, 2013, June transfer by sale, exchange or in any for Asset Reliability Maintenance 30, 2013, and June 27, 2014 other manner of shares, bonds, a. ArcelorMittal Registry Shares, Program (ARMP) in its Brazilian respectively. debt securities, warrants and other which are registered directly entities, and two others for the securities and instruments of any on ArcelorMittal’s Luxembourg use in Europe of ARMP and for Acquisition of inventories kind. shareholder register, the use of the global wide area network (WAN). In Europe, Aperam Mr. Lakshmi N. Mittal acquired It may grant assistance to any b. shares traded on Euronext purchased most of its electricity inventories on February 18, 2015 affiliated company and take Amsterdam, Euronext Paris, and natural gas though energy from ArcelorMittal Luxembourg any measure for the control and the regulated market of the supply contracts put in place pertaining to the Company’s supervision of such companies. Luxembourg Stock Exchange and for the period 2014-2019 with former headquarters. Such the Spanish Stock Exchanges, ArcelorMittal Energy SCA and inventories were valued by an It may carry out any commercial, which are held in Euroclear, or ArcelorMittal Purchasing SCA. independent expert and acquired financial or industrial operation at arm’s length. or transaction that it considers to c. shares traded on the NYSE, Purchasing activities will continue be directly or indirectly necessary named New York Registry Shares, to be provided to Aperam Memorandum and Articles of or useful in order to achieve or which are registered in a register pursuant to existing contracts with Association further its corporate purpose. (including in the name of the ArcelorMittal entities that it has nominee of DTC) kept by or on specifically elected to assume. Below is a summary of Form and transfer of shares behalf of ArcelorMittal by its New ArcelorMittal’s Articles of York transfer agent. In addition, in September Association, filed as an exhibit The shares of ArcelorMittal are 2016, a services term sheet to this annual report on Form issued in registered form only and Since March 2009, ArcelorMittal agreement has been concluded 20-F and incorporated by are freely transferable. There are has used the services of BNP between ArcelorMittal Shared reference herein. The full text no restrictions on the rights of Paribas Securities Services to Service Center Europe Sp z.o.o. of the Company’s Articles of Luxembourg or non-Luxembourg assist it with certain administrative Sp.k. and Aperam according Association is also available on residents to own ArcelorMittal tasks relating to the day-to-day to which ArcelorMittal Shared www.arcelormittal.com under shares. administrative management of the Service Center Europe Sp z.o.o. “Investors,Corporate Governance- shareholders’ register. Sp.k.SSC Poland will prepare in Board of Directors.” Under Luxembourg law, the close cooperation with Aperam, ownership of registered shares The law of April 6, 2013 concerning transfer pricing documentation Corporate purpose is evidenced by the inscription dematerialized securities allows for the financial years 2015, 2016 of the name of the shareholder, Luxembourg issuers to opt for the and 2017 for specific Aperam Article 3 of the Articles of the number of shares in the full dematerialization of shares. If entities. The transfer pricing Association provide that the shareholders’ register. Each transfer ArcelorMittal were to opt for full documentation shall be compliant corporate purpose of ArcelorMittal of shares is made by a written dematerialization in the future, declaration of transfer recorded shareholders would be required with OECD transfer pricing is the manufacture, processing and in the shareholders’ register of to hold their shares in a securities guidelines and in line with country marketing of steel, steel products ArcelorMittal, dated and signed by account at a bank or other financial specific legal requirements as well and all other metallurgical the transferor and the transferee intermediary, which would in turn as respecting the country specific products, as well as all products or by their duly appointed agent. hold the shares via an account deadlines. The work shall include and materials used in their ArcelorMittal may accept and enter with a securities depository such also the update of benchmark manufacture, their processing and into its shareholders’ register any as Clearstream or Euroclear. studies. their marketing, and all industrial and commercial activities transfer based on an agreement Dematerialized securities would between the transferor and the be solely represented by account In connection with the spin-off, connected directly or indirectly with those objects, including transferee provided a true and entries with the securities management also renegotiated complete copy of the agreement is depositary and would therefore an existing Brazilian cost-sharing mining and research activities and the creation, acquisition, provided to ArcelorMittal. exist only in electronic form. If agreement between ArcelorMittal ArcelorMittal were to opt for the Brasil and Aperam Inox América holding, exploitation and sale of patents, licenses, know-how and, The Articles of Association provide full dematerialization of its shares, do Sul S.A. (formerly known that shares may be held through it would no longer be possible as ArcelorMittal Inox Brasil), more generally, intellectual and industrial property rights. a securities settlement (clearing) for shareholders to hold shares pursuant to which, starting as of system or a professional depositary through a direct, nominative April 1, 2011, ArcelorMittal Brasil The Company may realize of securities. Shares held in this registration in the Company’s continued to perform purchasing, manner have the same rights register of shareholders as is insurance and real estate activities its corporate purpose either directly or through the creation and obligations as the registered currently the case. for the benefit of certain of shares. Shares held through a Aperam’s Brazilian subsidiaries, of companies, the acquisition, holding or acquisition of interests securities settlement system 54 Management report

Issuance of shares statutory preferential subscription Article 5 of the Articles of of the issued share capital and rights of the existing shareholders Association has been amended to the reserves that ArcelorMittal The issuance of shares by and to authorize the granting of reflect this change. The Articles of must maintain pursuant to ArcelorMittal requires either preferential subscription rights to Association have been published Luxembourg law or its Articles of an amendment of the Articles existing shareholders on terms to on www.arcelormittal.com Association; of Association approved by an be determined based on market and filed with the Luxembourg extraordinary general meeting practice and conditions (the Register of Commerce and • only fully paid-up shares may be of shareholders (an “EGM”) or a “equity offering”). Companies on May 6, 2016. repurchased. At December 31, decision of the Board of Directors 2016, all of ArcelorMittal’s issued that is within the limits of the The EGM of ArcelorMittal Preemptive rights ordinary shares were fully paid- authorized share capital set out in shareholders, held on March up; and the Articles of Association. In the 10, 2016, approved the two Unless limited or cancelled by the latter case, the Board of Directors resolutions on its agenda: Board of Directors as described • the acquisition offer is made on may determine the conditions for below or by an EGM, holders of the same terms and conditions the issuance of shares, including • to reduce the share capital of the ArcelorMittal shares have a pro to all the shareholders who are in the consideration (cash or in kind) Company without distribution to rata preemptive right to subscribe the same position, it being noted payable for such shares. shareholders, in order to reduce for newly issued shares, except for however that listed companies the par value of the shares in the shares issued for consideration may repurchase their own shares The EGM may not validly Company to an amount of 10 other than cash (i.e., in kind). on the stock exchange without deliberate unless at least half of euro cents per share and an acquisition offer having to be the share capital is present or The Articles of Association provide made to the shareholders. represented upon the first call. • to increase the Company’s that preemptive rights may If the quorum is not met, the authorized share capital be limited or cancelled by the In addition, Luxembourg law meeting may be reconvened as including the authorization to Board of Directors in the event allows the Board of Directors described in “General Meetings of limit or cancel the shareholders’ of an increase in the Company’s to approve the repurchase of Shareholders” below. The second preferential subscription rights. issued share capital until the ArcelorMittal shares without the meeting will be held regardless date being five years from the prior approval of the general of the proportion of share capital The above authorization expires date of publication in the Official meeting of shareholders if represented. At both meetings, five years from the date of Luxembourg Gazette Mémorial C necessary to prevent serious and resolutions, in order to be adopted, publication of the EGM minutes in of the relevant meeting minutes, imminent harm to ArcelorMittal. must be carried by at least two- the Official Luxembourg Gazette which publication occurred on In such a case, the next general thirds of the votes cast. Mémorial C, which occurred on March 23, 2016 with respect to meeting of shareholders must March 23, 2016. This authorization the minutes of the EGM held on be informed by the Board of The Company’s authorized share may be renewed from time to March 10, 2016. This power of the Directors of the reasons for and capital was €8,249,049,316.38 time by an EGM for periods not to Board of Directors may from time the purpose of the acquisitions represented by 1,995,857,213 exceed five years each. to time be renewed by an EGM for made, the number and nominal shares through 2014 and 2015 subsequent periods not to exceed values, or in the absence thereof, while its total issued share capital Following such approval, the five years each. the accounting par value of the stood at €6,883,209,119.84, Company’s share capital was shares acquired, the proportion of represented by 1,665,392,222 decreased on March 10, 2016 Repurchase of shares the issued share capital that they ordinary shares in 2014 and from €7,453,441,006.98 to represent, and the consideration 2015. Following the mandatory €180,335,933.80 represented by ArcelorMittal is prohibited by paid for them. conversion on January 15, 1,803,359,338 ordinary shares Luxembourg law from subscribing 2016 of outstanding Notes of without nominal value. The for its own shares. ArcelorMittal The general meeting of the Company’s $2.25 billion Company’s authorized share may, however, repurchase its own shareholders held on May 5, 2015 6% Mandatorily Convertible capital, including the issued shares or have another person (the “General Meeting”) decided Notes due 2016, the Company’s share capital, amounted to repurchase shares on its behalf, (a) to cancel with effect as of the issued share capital was €3,199,585,721.30 represented by subject to certain conditions, date of the General Meeting the increased by €570,231,887.14 31,995,857,213 ordinary shares including: authorization granted to the from €6,883,209,119.84 to without nominal value. Board of Directors by the general €7,453,441,006.98 represented • a prior authorization of the meeting of shareholders held on by 1,803,359,338 shares without As a result of the Company’s equity general meeting of shareholders May 11, 2010 with respect to the nominal value. offering authorized by the EGM setting out the terms and share buy-back program, and (b) and which closed on April 8, 2016 conditions of the proposed to authorize, effective immediately On February 5, 2016, the Company at a price of €2.20 per share, the repurchase, including the after the General Meeting, the announced its intention to Company’s issued share capital maximum number of shares to Board of Directors, with option to increase its capital through a rights increased from €180,335,933.80 be repurchased, the duration delegate, and the corporate bodies issue with shareholders benefiting to €306,571,086.90 represented of the period for which the of the other companies in the from non-statutory preferential by 3,065,710,869 ordinary shares authorization is given (which ArcelorMittal group in accordance subscription rights on terms to be without nominal value and may not exceed five years) and with the Luxembourg law of determined by the Company. At remained unchanged at December the minimum and maximum August 10, 1915 on commercial its meeting on February 3, 2016, 31, 2016. The Company’s consideration per share; companies, as amended (the the Board of Directors resolved authorized share capital, including “Law”), to acquire and sell shares in among others and subject to the issued share capital, amounted • the repurchase may not reduce the Company in accordance with approval by an EGM, to authorize to €337,228,195.60 represented the net assets of ArcelorMittal the Law and any other applicable the issue of up to 30,000,000,000 by 3,372,281,956 ordinary shares on a non-consolidated basis laws and regulations, including new ordinary shares, to cancel the without nominal value. to a level below the aggregate but not limited to entering into Management report 55

off-market and over-the-counter into Luxembourg law Directive • any transaction or matter The Board of Directors may decide transactions and to acquire shares 2007/36/EC of the European requiring an amendment of the to arrange for shareholders to in the Company through derivative Parliament and of the Council of Articles of Association. be able to participate in the financial instruments. July 11, 2007 on the exercise of general meeting by electronic certain rights of shareholders in The extraordinary general means by way, among others, of Any acquisitions, disposals, listed companies of July 14, 2007 meeting must reach a quorum (i) real-time transmission to the exchanges, contributions came into force on July 1, 2011 of shares present or represented public of the general meeting, or transfers of shares by the (the “Shareholder’s Rights Law”). at the meeting of 50% of the (ii) two-way communication Company or other companies in share capital in order to validly enabling shareholders to the ArcelorMittal group must be The Shareholders’ Rights Law deliberate. If this quorum is not address the general meeting in accordance with Luxembourg abolished the blocking period and reached, the meeting may be from a remote location, or (iii) laws transposing Directive 2003/6/ introduced the record date system reconvened and the second a mechanism allowing duly EC regarding insider dealing into Luxembourg law. As set out meeting will not be subject to any identified shareholders to cast and market manipulation as in the Articles of Association, quorum requirement. In order to their votes before or during the repealed and replaced by (EU) the record date applicable to be adopted by the extraordinary general meeting without the need Regulation No. 596/2014 of the ArcelorMittal is the 14th day at general meeting (on the first or for them to appoint a proxyholder European Parliament and of midnight before the general the second call), any resolution who would be physically present the Council of April 16, 2014 on meeting date. Only the votes of submitted must be approved by at at the meeting. market abuse and Commission shareholders who are shareholders least two-thirds of the votes cast Delegated EC Regulation No. of the Company on the record except for certain limited matters A shareholder may act at any 596/2014 with regard to regulatory date will be taken into account, where the Articles of Association general meeting of shareholders technical standards for the regardless of whether they remain require a higher majority (see by appointing another person conditions applicable to buy-back shareholders on the general “Amendment of the Articles (who need not be a shareholder) programmes and stabilisation meeting date. Shareholders who of Association”). Votes cast do as his or her attorney by means measures. intend to participate in the general not include votes attaching to of a written proxy using the form meeting must notify the Company shares with respect to which the made available on the website Such transactions may be carried at the latest on the date indicated shareholder has not taken part of the Company. The completed out at any time, including during in the convening notice of their in the vote, has abstained or has and signed proxy must be sent a tender offer period, subject to intention to participate (by proxy returned a blank or invalid vote. to the Company in accordance applicable laws and regulations or in person). with the instructions set out in the including Section 10(b) and Voting and information rights convening notice. Section 9(a)(2) of the Securities Ordinary general meetings of Exchange Act of 1934, as amended shareholders. The voting and information rights General meetings of shareholders (the “Exchange Act”), and Rule of ArcelorMittal’s shareholders are convened by the publication 10b-5 promulgated under the At an ordinary general meeting of have been further expanded of a notice at least 30 days before Exchange Act. shareholders there is no quorum since the entry into force of the the meeting date in a Luxembourg requirement and resolutions are Shareholders’ Rights Law on July newspaper, via the online platform The authorization is valid for adopted by a simple majority, 1, 2011. called Recueil électronique des a period of five years, i.e., until irrespective of the number of sociétés et associations (“RESA”) the annual general meeting of shares represented. Ordinary There are no restrictions on the which replaced as of June 1, 2016 shareholders to be held in May general meetings deliberate on rights of Luxembourg or non- the Luxembourg official legal 2020, or until the date of its any matter that does not require Luxembourg residents to vote gazette, the Mémorial, Recueil des renewal by a resolution of the the convening of an extraordinary ArcelorMittal shares. Each share Sociétés et Associations, and by general meeting of shareholders general meeting. entitles the shareholder to attend a way of press release sent to the if such renewal date is prior to the general meeting of shareholders in major news agencies. Ordinary expiration the five-year period. Extraordinary general meetings of person or by proxy, to address the general meetings are not subject shareholders. general meeting of shareholders to any minimum shareholder Capital reduction and to vote. Each share entitles the participation level. Extraordinary An extraordinary general meeting holder to one vote at the general general meetings, however, are The Articles of Association provide must be convened to deliberate on meeting of shareholders. There subject to a minimum quorum that the issued share capital of the following types of matters: is no minimum shareholding of 50% of the share capital. In the ArcelorMittal may be reduced (beyond owning a single share event the 50% quorum is not met subject to the approval of at least • an increase or decrease of the or representing the owner of a upon the first call, the meeting two-thirds of the votes cast at an authorized or issued share single share) required to be able may be reconvened by way of extraordinary general meeting capital, to attend or vote at a general convening notice published in the of shareholders where at first meeting of shareholders. same manner as the first notice, at call at least 50% of the issued • a limitation or exclusion least 17 days before the meeting share capital is required to be of existing shareholders’ The Board of Directors may also date. No quorum is required upon represented, with no quorum preemptive rights, decide to allow shareholders to the second call. being required at a reconvened vote by correspondence by means meeting. • the acquisition by any person of of a form providing for a positive or 25% or more of the issued share negative vote or an abstention on capital of ArcelorMittal, each agenda item. The conditions General meeting of shareholders • approving a merger or similar for voting by correspondence transaction such as a spin-off, are set out in the Articles of The shareholders’ rights law of and Association and in the convening May 24, 2011, which transposes notice. 56 Management report

Shareholders whose share during the general meeting’s (b) the directors’ power, in the between the knowledge, skills, ownership is directly registered questions and answers session absence of an independent experience and need for renewal in the shareholders’ register of prior to the vote on the agenda quorum, to vote compensation of the Board. the Company must receive the items. Although the Articles to themselves or any members of convening notice by regular mail, of Association of ArcelorMittal their body; (e) number of shares, if any, unless they have accepted to do not specifically address this required for director’s qualification. receive it through other means point, shareholders may ask The remuneration of the Directors (i.e., electronically). In addition, questions in writing ahead of a is determined each year by Article 8.2 of the Articles of all materials relating to a general general meeting, which are taken the annual general meeting of Association states that the meeting of shareholders must be into account in preparing the shareholders subject to Article members of the Board of Directors made available on the website of general meeting’s questions and 17 of the Articles of Association. do not have to be shareholders ArcelorMittal from the first date answers session. With regard to The annual shareholders meeting in the Company. However, the of publication of the convening the May 4, 2016 general meeting, of the Company decides on Board of Directors has introduced notice. shareholders were expressly the directors’ remuneration. on April 27, 2015 a policy that encouraged to send questions The Chairman & CEO is not requires members of the Board of Based on an amendment voted and comments to the Company in remunerated for his membership Directors to hold 10,000 shares in by the extraordinary general advance by writing to a dedicated of the Board of Directors. The the Company (15,000 for the Lead meeting of shareholders on May e-mail address indicated in the remuneration of the Chairman & Independent Director). For more 8, 2012, the Articles of Association convening notice. CEO is determined by the Board’s information, see “Board practices/ of ArcelorMittal provide that ARCG Committee, which consists Corporate Governance Specific the annual general meeting of Election and removal of directors. solely of independent directors. characteristics of the Director role”. shareholders is held each year at Members of the Board of Directors For more information, see a date and time set by the Board are elected by simple majority “Compensation”. ArcelorMittal’s Articles of of Directors during the second of the represented shareholders Association provide that, from or third week of May, between at an ordinary general meeting (c) borrowing powers exercisable August 1, 2009, the Significant 9.00 a.m. and 4.00 p.m. Central of shareholders. Directors are by the directors and how such Shareholder is entitled to European Time, in Luxembourg. elected for a period ending on a borrowing powers can be varied; nominate a number of candidates date determined at the time of for election by the shareholders Luxembourg law requires the their appointment. The directors Any transaction between to the Board of Directors in Board of Directors to convene a of ArcelorMittal are elected for ArcelorMittal or a subsidiary of proportion to its shareholding. The general meeting of shareholders three-year terms. Any director may ArcelorMittal and a Director (or Significant Shareholder has not if shareholders representing be removed with or without cause an affiliate of a Director) must be exercised this right to date. in the aggregate 10% of the by a simple majority vote at any conducted on arm’s length terms issued share capital so require general meeting of shareholders. and, if material, must obtain the Amendment of the Articles of in writing with an indication of approval of the Independent Association the requested agenda. In this (a) a director’s power to vote on a Directors. case, the general meeting of proposal, arrangement or contract Any amendments to the Articles of shareholders must be held within in which the director is materially (d) retirement or non-retirement Association must be approved by one month of the request. If the interested; of directors under an age limit an extraordinary general meeting requested general meeting of requirement of shareholders held in the shareholders is not so convened, If a Director has an interest in presence of a Luxembourg notary, the relevant shareholder or group a transaction that is submitted There is no retirement or non- followed by the publications of shareholders may petition the to the Board of Directors for retirement of directors under an required by Luxembourg law. competent court in Luxembourg approval and this interest conflicts age limit requirement. However, to have a court appointee convene with that of ArcelorMittal (other on October 30, 2012, the Board In order to be adopted, the general meeting. than transactions which are part of Directors adopted a policy that amendments of the Articles of current operations and are places limitations on the terms of Association of ArcelorMittal Shareholders representing in the entered into under, arms’ length of independent directors as well relating to the size and the aggregate 5% of the issued share conditions), the Director must as the number of directorships requisite minimum number of capital may also request that advise the Board of Directors of Directors may hold in order to independent and non-executive additional items be added to the the existence and nature of the align the Company’s corporate directors of the Board of Directors, agenda of a general meeting and conflict and cause a record of his/ governance practices with best the composition of the Audit may draft alternative resolutions her statement to be included in practices in this area. The policy & Risk Committee, and the to be submitted to the general the minutes of the meeting. In provides that an independent nomination rights to the Board meeting regarding existing addition, the Director may not take director may not serve on the of Directors of the Significant agenda items. The request must part in the deliberations on the Board of Directors for more than Shareholder require a majority be made in writing and sent either transaction. At the next following 12 consecutive years, although of votes representing two-thirds to the electronic address or to the general meeting of shareholders the Board of Directors may, by way of the voting rights attached to Company’s postal address set out of ArcelorMittal, before any other of exception to this rule, make an the shares in ArcelorMittal. The in the convening notice. resolution is put to a vote, a special affirmative determination, on a same majority rule would apply to report will be made by the Board case-by-case basis, that he or she amendments of the provisions of The Shareholders’ Rights Law of Directors to the shareholders’ may continue to serve beyond the Articles of Association that set provides that a company’s meeting on any such transaction. the 12 years rule if the Board of out the foregoing rule. articles of association may allow Directors considers it to be in shareholders to ask questions prior the best interest of the Company to the general meeting which will based on the contribution of the be answered by management Director involved and the balance Management report 57

Annual accounts Merger and division Directive 2004/25/EC of the squeeze-out proceedings if the European Parliament and the offeror acquired at least 90% of Each year before submission A merger whereby the Council of April 21, 2004 on the ArcelorMittal shares carrying to the annual ordinary general Luxembourg company being takeover bids ( the “Takeover voting rights that were the subject meeting of shareholders, the acquired transfers to an existing or Law”), provides that, if a person of the offer. The price paid in a Board of Directors approves the newly incorporated Luxembourg acting alone or in concert acquires mandatory offer is deemed a fair parent company accounts for company all of its assets and securities of ArcelorMittal which, price. The consideration paid in ArcelorMittal, the parent company liabilities in exchange for the when added to any existing the squeeze-out proceedings of the ArcelorMittal group as issuance to the shareholders of holdings of ArcelorMittal securities, must take the same form as the well as the annual consolidated the company being acquired of give such person voting rights consideration offered in the offer accounts of the ArcelorMittal shares in the acquiring company, representing at least one third of or consist solely of cash. Moreover, group, each of which are prepared and a division whereby a company all of the voting rights attached to an all-cash option must be offered in accordance with IFRS. The Board (the company being divided) the issued shares in ArcelorMittal, to the remaining ArcelorMittal of Directors also approves the transfers all its assets and liabilities this person is obliged to make shareholders. Finally, the right to management reports on each of to two or more existing or an offer for the remaining shares initiate squeeze-out proceedings the stand-alone audited annual newly incorporated companies in ArcelorMittal. In a mandatory must be exercised within three accounts and the consolidated in exchange for the issuance bid situation the “fair price” is in months following the expiration of annual accounts, and in respect of shares in the beneficiary principle considered to be the the offer. of each of these sets of accounts companies to the shareholders highest price paid by the offeror or a report must be issued by the of the company being divided a person acting in concert with the Sell-out right. independent auditors. or to such company, and certain offeror for the securities during the The Takeover Law provides that, similar restructurings must be 12–month period preceding the when an offer (mandatory or The annual accounts, the annual approved by an extraordinary mandatory bid. voluntary) is made to all of the consolidated accounts, the general meeting of shareholders holders of voting securities of management reports and the of the relevant companies held ArcelorMittal’s Articles of ArcelorMittal and if after such auditor’s reports will be available in the presence of a notary. These Association provide that any offer the offeror holds securities on request from the Company transactions require the approval person who acquires shares giving carrying more than 90% of the and on the Company’s website of at least two-thirds of the them 25% or more of the total voting rights, the remaining from the date of publication of the votes cast at a general meeting voting rights of ArcelorMittal must security holders may require that convening notice for the annual of shareholders of each of the make or cause to be made, in each the offeror purchase the remaining ordinary general meeting of companies where at least 50% of country where ArcelorMittal’s securities of the same class. The shareholders. the share capital is represented securities are admitted to trading price offered in a voluntary offer upon first call, with no such on a regulated or other market would be considered “fair” in The parent company accounts quorum being required at a and in each of the countries in the sell-out proceedings if the and the consolidated accounts, reconvened meeting. which ArcelorMittal has made offeror acquired at least 90% of after their approval by the annual a public offering of its shares, the ArcelorMittal shares carrying ordinary general meeting of Liquidation an unconditional public offer voting rights and which were the shareholders, are filed with the of acquisition for cash to all subject of the offer. The price paid Luxembourg register of trade and In the event of the liquidation, shareholders for all of their shares in a mandatory offer is deemed companies. dissolution or winding-up of and also to all holders of securities a fair price. The consideration ArcelorMittal, the assets remaining giving access to capital or linked paid in the sell-out proceedings Dividends after allowing for the payment to capital or whose rights are must take the same form as the of all liabilities will be paid out to dependent on the profits of consideration offered in the offer Except for shares held in the shareholders pro rata to their ArcelorMittal. The price offered or consist solely of cash. Moreover, treasury by the Company, each respective shareholdings. The must be fair and equitable and an all-cash option must be offered ArcelorMittal share is entitled to decision to liquidate, dissolve or must be based on a report drawn to the remaining ArcelorMittal participate equally in dividends if wind-up requires the approval up by a leading international shareholders. Finally, the right to and when declared out of funds of at least two-thirds of the votes financial institution or other initiate sell-out proceedings must legally available for such purposes. cast at a general meeting of internationally recognized expert. be exercised within three months The Articles of Association provide shareholders where at first call following the expiration of the that the annual ordinary general at least 50% of the share capital Squeeze-out right. offer. meeting of shareholders may is represented, with no quorum The Takeover Law provides that, declare a dividend and that the being required at a reconvened when an offer (mandatory or Disclosure of significant ownership Board of Directors may declare meeting. Irrespective of whether voluntary) is made to all of the in ArcelorMittal shares interim dividends within the limits the liquidation is subject to a holders of voting securities of set by Luxembourg law. vote at the first or a subsequent ArcelorMittal and after such offer Holders of ArcelorMittal shares extraordinary general meeting the offeror holds at least 95% and derivatives or other financial Declared and unpaid dividends of shareholders, it requires the of the securities carrying voting instruments linked to ArcelorMittal held by ArcelorMittal for the approval of at least two-thirds of rights and 95% of the voting shares may be subject to the account of its shareholders do not the votes cast at the extraordinary rights, the offeror may require the notification obligations of the bear interest. Under Luxembourg general meeting of shareholders. holders of the remaining securities Luxembourg law of January law, claims for dividends lapse to sell those securities (of the 11, 2008, as last amended by in favor of ArcelorMittal five Mandatory bid, squeeze-out right, same class) to the offeror. The the law dated May 10, 2016, years after the date on which the sell-out right price offered for such securities on transparency requirements dividends have been declared. must be a fair price. The price regarding information about Mandatory bid. The Luxembourg offered in a voluntary offer would issuers whose securities are law of May 19, 2006 implementing be considered a fair price in the admitted to trading on a regulated 58 Management report

market (the “Transparency ArcelorMittal being crossed controlled by that person or a high level management Law”). The following description upwards or downwards, and entity; position with regular access to summarizes these obligations. non-public material information ArcelorMittal shareholders are • with respect to any shareholder • voting rights attaching to shares relating, directly or indirectly, advised to consult with their holding at least 3.0% of the voting deposited with that person to ArcelorMittal and have the own legal advisers to determine rights in ArcelorMittal, to any or entity which the person authority to make management whether the notification acquisition or disposal of shares or entity may exercise at its decisions about the future obligations apply to them. resulting in successive thresholds discretion in the absence of development of the Company of 1% of voting rights being specific instructions from the and its business strategy (see The Transparency Law provides crossed upwards or downwards. shareholders; “Key transactions and events in that, if a person acquires or 2016” for a discussion of recent disposes of a shareholding in Pursuant to the Articles of • voting rights held by a third party management changes). Persons ArcelorMittal, and if following Association of ArcelorMittal, in its own name on behalf of that closely associated with them the acquisition or disposal the any person who acquires person or entity; and include their respective family proportion of voting rights held shares giving him or her 5% members. by the person reaches, exceeds or or more or a multiple of 5% or • voting rights which that person falls below one of the thresholds more of the voting rights must or entity may exercise as a proxy Both information on trading of 5%, 10%, 15%, 20%, 25%, inform ArcelorMittal within 10 where the person or entity may in Financial Instruments by one-third, 50% or two-thirds of Luxembourg Stock Exchange exercise the voting rights in its “Persons Discharging Senior the total voting rights existing trading days following the date on sole discretion. Managerial Responsibilities” and when the situation giving rise to which the threshold was crossed ArcelorMittal’s Insider Dealing a declaration occurs, the relevant by registered letter with return In addition, the Articles of Regulations are available on www. person must simultaneously notify receipt requested as to whether Association provide that, for the arcelormittal.com under “Investors, ArcelorMittal and the CSSF (the he or she intends to acquire or purposes of calculating a person’s Corporate Governance, Share Luxembourg securities regulator) dispose of shares in ArcelorMittal voting rights in ArcelorMittal, the Transactions by Management”. of the proportion of voting rights within the next 12 months or voting rights attached to shares held by it further to such event intends to seek to obtain control underlying any other financial In 2016, four notifications were within four Luxembourg Stock over ArcelorMittal or to appoint a instruments owned by that person received by ArcelorMittal from Exchange trading days of the day member to ArcelorMittal’s Board of (such as convertible notes) must such persons and filed with the of execution of the transaction Directors. be taken into account for purposes CSSF. triggering the threshold crossing. of the calculation described above. For the purposes of calculating Publication of regulated A person must also notify the percentage of a shareholder’s Disclosure of insider dealing information ArcelorMittal of the proportion voting rights in ArcelorMittal, the transactions of his or her voting rights if that following are taken into account: Since January 2009, disclosure proportion reaches, exceeds or Members of the Board of Directors to the public of “regulated falls below the above mentioned • voting rights held by a third party and the members of the CEO information” (within the meaning thresholds as a result of events with whom that person or entity Office, Executive Officers and of the Luxembourg Transparency changing the breakdown of voting has concluded an agreement other executives fulfilling senior Law) concerning ArcelorMittal rights. and which obliges them to management responsibilities has been made by publishing adopt, by concerted exercise of within ArcelorMittal and falling the information through the The above notification obligations the voting rights they hold, a with the definition of “Persons centralized regulated information also apply to persons who lasting common policy towards Discharging Senior Managerial filing and storage system managed directly or indirectly hold financial ArcelorMittal; Responsibilities” set out below by the Luxembourg Stock instruments linked to ArcelorMittal and persons closely associated Exchange and accessible in English shares. Pursuant to article 12 a. • voting rights held by a third party with them must disclose to the and French on www.bourse.lu, of the Transparency Law, persons under an agreement concluded CSSF and to ArcelorMittal all in addition to the publication by who hold ArcelorMittal shares with that person or entity transactions relating to shares or ArcelorMittal of the information and financial instruments linked providing for the temporary debt instruments of ArcelorMittal by way of press release. All news to ArcelorMittal Shares must transfer for consideration of the or derivatives or other financial and press releases issued by the aggregate their holding. voting rights in question; instruments linked to any shares or Company are available on www. debt instruments of ArcelorMittal arcelormittal.com in the “News and ArcelorMittal’s Articles of • voting rights attaching to shares (together the “Financial Media” section. Association also provide that the pledged as collateral with that Instruments”) conducted by them above disclosure obligations also person or entity, provided the or for their account. Limitation of directors’ liability/ apply to: person or entity controls the indemnification of Directors and voting rights and declares its Such notifications shall be made the members of the CEO Office • any acquisition or disposal of intention to exercise them; promptly and not later than three shares resulting in the threshold business days after the date of the The Articles of Association of 2.5% of voting rights in • voting rights attaching to shares transaction. of ArcelorMittal provide that ArcelorMittal in which a person or entity holds ArcelorMittal will, to the broadest being crossed upwards or a life interest; “Persons Discharging Senior extent permitted by Luxembourg downwards, Managerial Responsibilities” within law, indemnify every director • voting rights which are held or ArcelorMittal are the members and member of the CEO Office as • any acquisition or disposal of may be exercised within the of the Board of Directors, and the well as every former director or shares resulting in the threshold meaning of the four foregoing CEO Office, the Executives Officers, member of the CEO Office for fees, of 3.0% of voting rights in points by an undertaking and other executives occupying costs and expenses reasonably Management report 59

incurred in the defense or (as defined in the Articles of Company or other companies in relevant stock exchange during resolution (including a settlement) Association) may, at its discretion, the ArcelorMittal group must be 30 consecutive days on which the of all legal actions or proceedings, exercise the right of proportional in accordance with Luxembourg relevant stock exchange is open whether civil, criminal or representation and nominate laws transposing Directive for trading preceding the three administrative, he or she has been candidates for appointment to 2003/6/ EC regarding insider trading days prior to the date of involved in his or her role as former the Board of Directors (defined as dealing and market manipulation purchase. In the event of a share or current director or member of “Mittal Shareholder Nominees”). and EC Regulation 2273/2003 capital increase by incorporation the CEO Office. The Mittal Shareholder has not, to regarding exemptions for buy- of reserves or issue premiums and date, exercised that right. back programs and stabilization the free allotment of shares as The right to indemnification of financial instruments and may well as in the event of the division does not exist in the case of gross Articles 11(1) (e) and (f) of the be carried out by all means, on or or regrouping of the shares, the negligence, fraud, fraudulent Takeover Law are not applicable off-market, including by a public purchase price indicated above inducement, dishonesty or for a to the Company. However, the offer to buy-back shares, or by shall be adjusted by a multiplying criminal offense, or if it is ultimately sanction of suspension of voting the use of derivatives or option coefficient equal to the ratio determined that the director or rights automatically applies, strategies. The fraction of the between the number of shares members of the CEO Office has subject to limited exceptions set capital acquired or transferred in comprising the issued share capital not acted honestly, in good faith out in the Transparency Law (as the form of a block of shares may prior to the transaction and such and with the reasonable belief that defined below), to any shareholder amount to the entire program. number following the transaction. he or she was acting in the best (or group of shareholders) who has Such transactions may be The total amount allocated for interests of ArcelorMittal. (or have) crossed the thresholds carried out at any time, including the Company’s share repurchase set out in article 7 of the Articles during a tender offer period, program may not in any event Luxembourg takeover law of Association and articles 8 to in accordance with applicable exceed the amount of the disclosure 15 of the Luxembourg law of 11 laws and regulations. Any share Company’s then available equity. January 2008 on the transparency buy-backs on the New York Stock The following disclosure is requirements regarding issuers Exchange must be performed in Articles 11(1) (j) and (k) of the provided based on article 11 of the of securities (the “Transparency compliance with Section 10(b) and Takeover Law are not applicable to Luxembourg law of 19 May 2006 Law”) but have not notified Section 9(a)(2) of the U.S. Securities the Company. transposing Directive 2004/25/EC the Company accordingly. The Exchange Act of 1934, as amended of 21 April 2004 on takeover bids sanction of suspension of voting (the “Exchange Act”), and Rule Material contracts (the “Takeover Law”). The Articles rights will apply until such time 10b-5 promulgated under the of Association of the Company are as the notification has been Exchange Act. The authorization is The following are material available on www.arcelormittal. properly made by the relevant valid for a period of five years, i.e., contracts, not entered into in the com, under Investors - Corporate shareholder(s). until the annual general meeting ordinary course of business, to Governance. of shareholders to be held in which ArcelorMittal has been a Article 11(1) (g) of the Takeover May 2020, or until the date of its party during the past two years. With regard to articles 11 (1) (a) Law is not applicable to the renewal by a resolution of the and (c) of the Takeover Law, the Company. general meeting of shareholders ArcelorMittal Equity Incentive Plan, Company has issued a single if such renewal date is prior to the Performance Share Unit Plan and category of shares (ordinary With regard to article 11(1) (h) of expiration the five-year period. Special Grant shares), and the Company’s the Law, the Articles of Association The maximum number of own shareholding structure showing provide that the directors are shares that the Company may hold For a description of such plans, each shareholder owning 2.5% elected by annual general meeting at any time directly or indirectly please refer to “Compensation”. or more of the Company’s share of shareholders for a term that may may not have the effect of capital is available elsewhere not exceed three years, and may reducing its net assets (“actif net”) Memorandum of Understanding in this report and on www. be re-elected. The rules governing below the amount mentioned arcelormittal.com under amendments to the Articles in paragraphs 1 and 2 of Article On June 25, 2006, Mittal Steel, Investors, Corporate Governance, of Association are described 72-1 of the Law. The purchase the Significant Shareholder Shareholding Structure, where elsewhere in this report and are set price per share to be paid shall and Arcelor signed a binding the shareholding structure chart is out in article 19 of the Articles of not represent more than 110% Memorandum of Understanding updated monthly. Association. of the trading price of the shares (“MoU”) to combine Mittal Steel on the New York Stock Exchange and Arcelor in order to create the With regard to article 11(1) (b) of With regard to article 11(1) (i) of and on the Euronext markets world’s leading steel company. In the Takeover Law, the ordinary the Takeover Law, the general where the Company is listed, the April 2008, the Board of Directors shares issued by the Company are meeting of shareholders held Luxembourg Stock Exchange approved resolutions amending listed on various stock exchanges on May 05, 2015 granted the or the Spanish stock exchanges certain provisions of the MoU in including NYSE and Euronext and Board of Directors a new share of Barcelona, Bilbao, Madrid order to adapt it to the Company’s are freely transferable. buy-back authorization whereby and Valencia, depending on the needs in the post-merger and the Board may authorize the market on which the purchases post-integration phase, as With regard to article 11(1) acquisition or sale of Company are made, and no less than one described under “Board practices/ (d), each ordinary share of the shares including, but not limited cent. For off-market transactions, Corporate Governance, Operation, Company gives right to one to, entering into off-market and the maximum purchase price Lead Independent Director”. vote, as set out in article 13.6 of over-the-counter transactions and shall be 110% of the reference the Articles of Association, and the acquisition of shares through price on the Euronext markets On the basis of the MoU, Arcelor’s there are no special control rights derivative financial instruments. where the Company is listed. The Board of Directors recommended attaching to the shares. Article 8 of Any acquisitions, disposals, reference price will be deemed Mittal Steel’s offer for Arcelor and the Articles of Association provides exchanges, contributions to be the average of the final the parties to the MoU agreed that the Mittal Shareholder or transfers of shares by the listing prices per share on the to certain corporate governance 60 Management report

and other matters relating to the preceding paragraph or the acquisition by the Significant In addition to ArcelorMittal, combined ArcelorMittal group. 45% limit mentioned above, if Shareholder or (2) the Significant the securities of one other Certain provisions of the MoU such ownership results from (1) Shareholder acquires such shares ArcelorMittal group company relating to corporate governance subscription for shares or rights in an offer for all of the shares of are listed on the Luxembourg were incorporated into the Articles in proportion to its existing the Company. Stock exchange. ArcelorMittal of Association of ArcelorMittal at shareholding in the Company Finance S.C.A. is a société en the extraordinary general meeting where other shareholders have Non-compete commandite par actions with of the shareholders on November not exercised the entirety of their registered office address at 24-26, 5, 2007. rights or (2) any passive crossing For so long as the Significant boulevard d’Avranches, L-1160 of this threshold resulting from Shareholder holds and controls Luxembourg, Grand Duchy of Certain additional provisions a reduction of the number of at least 15% of the outstanding Luxembourg, registered with of the MoU expired effective Company shares (e.g., through self- shares of the Company or has the Registre du Commerce et August 1, 2009 and on August 1, tender offers or share buy-backs) if, representatives on the Company’s des Sociétés Luxembourg under 2011. ArcelorMittal’s corporate in respect of (2) only, the decisions Board of Directors or CEO Office, number B 13.240. ArcelorMittal governance rules will continue to to implement such measures were the Significant Shareholder and its Finance is indirectly 100% owned reflect, subject to those provisions taken at a shareholders’ meeting in affiliates will not be permitted to by ArcelorMitta group and, in this of the MoU that have been which the Significant Shareholder invest in, or carry on, any business connection, it issued a number of incorporated into the Articles of did not vote or by the Company’s competing with the Company, bonds listed on the Luxembourg Association, the best standards Board of Directors with a majority except for PT ISPAT Indo. Stock Exchange. ArcelorMittal of corporate governance for of independent directors voting Finance’s CSSF issuer number is comparable companies and in favor. Additional information E-0025. to conform with the corporate governance aspects of the NYSE Once the Significant Shareholder ArcelorMittal produces a range Other listings listing standards applicable to non- exceeds the threshold mentioned of publications to inform its U.S. companies and Ten Principles in the first paragraph of this shareholders. These documents ArcelorMittal is listed on the of Corporate Governance of the “Standstill” subsection or the are available in various formats: stock exchanges of New York Luxembourg Stock Exchange. 45% limit, as the case may be, as they can be viewed online, (MT), Amsterdam (MT), Paris a consequence of any corporate downloaded or obtained on (MT), Luxembourg (MT) and on The following summarizes the event set forth in (1) or (2) above, it request in paper format. Please the Spanish stock exchanges of main provisions of the MoU that shall not be permitted to increase refer to www.arcelormittal.com, Barcelona, Bilbao, Madrid and remain in effect or were in effect the percentage of shares it owns to the Investors menu, under Valencia (MTS). in 2016. or controls in any way except as a Financial Reports. result of subsequent occurrences Indexes Standstill of the corporate events described Sustainable development in (1) or (2) above, or with the prior ArcelorMittal is a member of The Significant Shareholder written consent of a majority of ArcelorMittal’s sustainable more than 120 indices including agreed not to acquire, directly or the independent directors on the development information is the following leading indices: DJ indirectly, ownership or control Company’s Board of Directors. detailed in the online Annual SOTXX 50, DJ EURO STOXX 50, of an amount of shares in the Review that will be published CAC40, AEX, FTSE Eurotop 100, capital stock of the Company If subsequently the Significant during the second quarter of MSCI Pan-Euro, DJ Stoxx 600, S&P exceeding the percentage of Shareholder sells down below 2017 and available on http:// Europe 500, Bloomberg World shares in the Company that it the threshold mentioned in the annualreview2016.arcelormittal. Index, IBEX 35 index, and NYSE will own or control following first paragraph of this “Standstill” com. Composite Index. Recognized for completion of the Offer (as defined subsection or the 45% limit, as its commitments to sustainable in the MoU) for Arcelor and any the case may be, it shall not be ArcelorMittal as parent company development, ArcelorMittal is subsequent offer or compulsory permitted to exceed the threshold of the ArcelorMittal group also included in the FTSE4Good buy-out, except with the prior mentioned in the first paragraph Index and VBSDO’s Benchmark of written consent of a majority of of this “Standstill” subsection or ArcelorMittal, incorporated Circular business Practices 2015. the independent directors on the the 45% limit, as the case may under the laws of Luxembourg, Further, ArcelorMittal has been Company’s Board of Directors. be, other than as a result of any is the parent company of the participating in CDP since 2005 Any shares acquired in violation corporate event set out in (1) or ArcelorMittal group and is and the United National Global of this restriction will be deprived (2) above or with the prior written expected to continue this role Compact since 2003. of voting rights and shall be consent of a majority of the during the coming years. The promptly sold by the Significant independent directors. Company has no branch offices. Shareholder. Notwithstanding the above, if (and whenever) the Finally, the Significant Shareholder Significant Shareholder holds, is permitted to own and vote Group companies listed on the directly and indirectly, less than shares in excess of the threshold Luxembourg Stock Exchange 45% of the then-issued Company mentioned in the first paragraph shares, the Significant Shareholder of this “Standstill” subsection or ArcelorMittal’s securities are traded may purchase (in the open market the 45% limit mentioned above on several exchanges, including or otherwise) Company shares if it acquires the excess shares in the Luxembourg Stock Exchange, up to such 45% limit. In addition, the context of a takeover bid by and its primary stock exchange the Significant Shareholder is a third party and (1) a majority regulator is the Luxembourg CSSF also permitted to own and vote of the independent directors of (Commission de Surveillance du shares in excess of the threshold the Company’s Board of Directors Secteur Financier). ArcelorMittal’s mentioned in the immediately consents in writing to such CSSF issuer number is E-0001. Management report 61

Share price performance

During 2016 the price of ArcelorMittal shares increased by 190% in EUR terms; the chart below shows a comparison between the performance of ArcelorMittal’s shares and the Eurostoxx600 Basic Resource (SXPP) which increased by 62% over the period. Since August 1, 2006 (EUR) 250.00

200.00

150.00

100.00

50.00

-

AM share EUR Eurostoxx600 Basic Resource (SXPP)

Dividend Individual investors Credit and fixed income investors or please visit www.arcelormittal. com/corp/investors/contact. In February 2017, ArcelorMittal’s ArcelorMittal’s senior management Credit, fixed income investors and board of directors reviewed plans to meet individual investors rating agencies are followed by Controls and procedures the progress made towards and shareholder associations in dedicated team from investors management’s key financial road shows throughout 2017. A relations. Disclosure controls and procedures objective of returning to an dedicated toll free number for creditfixedincome@arcelormittal. investment grade credit rating. individual investors is available com Management maintains disclosure While pleased with the significant at +352 4792 3198. Requests controls and procedures that improvements achieved in 2016, for information or meeting and Financial calendar are designed to ensure that the board of directors determined conference center may also information required to be that it is appropriate to continue to be sent to: privateinvestors@ The schedule is available on disclosed in the Company’s reports use surplus cash for deleveraging arcelormittal.com. ArcelorMittal’s website www. under the Securities Exchange until credit metrics consistent with arcelormittal.com under Act of 1934, as amended (the an investment grade rating are Analysts and institutional investors Investor>Financial calendar. “Exchange Act”) is recorded, achieved. As a result, the board processed, summarized and of directors proposes, subject As the world’s leading steel Financial results* reported within time periods to approval at the next annual company and major investment specified in the SEC’s rules and general meeting on May 10, 2017, vehicle in the steel sector, February 10, 2017 - Results for the forms, and that such information is not to declare any dividend in ArcelorMittal constantly seeks 4th quarter 2016 and 12 months accumulated and communicated respect to the 2016 financial year. to develop relationships with 2016. to management, including the financial analysts and international Chief Executive Officer and Chief Investor relations investors. Depending on their May 12, 2017 - Results for the 1st Financial Officer, as appropriate, geographical location, investors quarter 2017. to allow timely decisions By implementing high standards may use the following e-mails: regarding required disclosures. of financial information disclosure July 28, 2017 - Results for the 2nd ArcelorMittal’s controls and and providing clear, regular, institutionalamericas@ quarter 2017 and 6 months 2017. procedures are designed to transparent and even-handed arcelormittal.com provide reasonable assurance of information to all its shareholders, November 10, 2017 - Results for ArcelorMittal aims to be the first investor.relations@arcelormittal. the 3rd quarter 2017 and 9 months achieving their objectives. choice for investors in the sector. com 2017. Management carried out an To meet this objective and Sustainable responsible investors *Earnings results are issued evaluation, under the supervision provide information to fit the before the opening of the stock and with the participation of needs of all parties, ArcelorMittal The Investor Relations team is also exchanges on which ArcelorMittal its Chief Executive Officer and implements an active and broad a source of information for the is listed. Chief Financial Officer, of the investor communications policy: growing sustainable responsible effectiveness of the design and conference calls, road shows investment community. The Meeting of shareholders operation of the Company’s with the financial community, team organises special events disclosure controls and procedures regular participation at investor on ArcelorMittal’s corporate May 10, 2017 - General Meeting of (as defined in Exchange Act Rule conferences, plant visits and responsibility strategy and answers Shareholders. 13a-15(e)) as of December 31, meetings with individual investors. all requests for information sent to 2016. Based upon that evaluation, the Group crteam@arcelormittal. Contact the investor relations team the Company’s Chief Executive com. on the information detailed above Officer and Chief Financial 62 Management report

Officer concluded that the Management’s Annual Report on prevented or detected on a Changes in Internal Control over Company’s disclosure controls Internal Control Over Financial timely basis. Financial Reporting and procedures were effective Reporting as of December 31, 2016 so as Because of its inherent limitations, There have been no changes in the to provide reasonable assurance Management is responsible for internal control over financial Company’s internal control over that (1) information required to establishing and maintaining reporting is not intended to financial reporting that occurred be disclosed by the Company in adequate internal control over provide absolute assurance that during the year ending December the reports that the Company financial reporting. Internal a misstatement of the Company’s 31, 2016 that have materially files under the Exchange Act is control over financial reporting financial statements would be affected or are reasonably likely recorded, processed, summarized is a process designed to provide prevented or detected. In addition, to have materially affected the and reported within the time reasonable assurance regarding projections of any evaluation of Company’s internal control over periods specified in the SEC’s the reliability of financial reporting effectiveness to future periods are financial reporting. rules and forms, and (2) that such and the preparation of financial subject to the risk that controls information is accumulated and statements for external purposes may become inadequate because communicated to the Company’s in accordance with generally of changes in conditions, or that management, including its Chief accepted accounting principles. the degree of compliance with Executive Officer and its Chief the policies or procedures may Financial Officer, as appropriate, to The Company’s internal control deteriorate. allow timely decisions regarding over financial reporting includes required disclosures. those policies and procedures that: Management assessed the effectiveness of internal control There are inherent limitations • pertain to the maintenance of over financial reporting as of to the effectiveness of any records that, in reasonable detail, December 31, 2016 based upon system of disclosure controls accurately and fairly reflect the the framework in Internal Control, and procedures, including the transactions and dispositions of Integrated Framework (2013) possibility of human error and the assets of ArcelorMittal; issued by the Committee of the circumvention or overriding Sponsoring Organizations of the of the controls and procedures. • provide reasonable assurance Treadway Commission (“COSO”). Accordingly, even effective that transactions are recorded, as Based on this assessment, disclosure controls and procedures necessary, to permit preparation management concluded that can only provide reasonable of financial statements in ArcelorMittal’s internal control over assurance of achieving their accordance with IFRS; financial reporting was effective as control objectives. of December 31, 2016. • provide reasonable assurance that receipts and expenditures The effectiveness of management’s of ArcelorMittal are made in internal control over financial accordance with authorizations reporting as of December 31, of ArcelorMittal’s management 2016 has been audited by and directors; and the Company’s independent registered public accounting firm, • provide reasonable assurance Deloitte Audit, and their report that unauthorized acquisition, as of February 23, 2017 below use or disposition of expresses an unqualified opinion ArcelorMittal’s assets that could on the Company’s internal control have a material effect on the over financial reporting. financial statements would be Management report 63

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 28, 2017 February 28, 2017 64 Consolidated financial statements

Consolidated financial statements Consolidated financial statements 65

ArcelorMittal and Subsidiaries Consolidated Statements of Operations (millions of U.S. dollars, except share and per share data)

Year ended December 31, Notes 2016 2015 2014 Sales 4.1 and 11.1 56,791 63,578 79,282 (including 5,634, 6,124 and 6,606 of sales to related parties for 2016, 2015 and 2014, respectively) Cost of sales 4.2 and 11.2 50,428 65,196 73,288 (including 1,390, 1,460 and 1,355 of purchases from related parties for 2016, 2015 and 2014, respectively) Gross margin 6,363 (1,618) 5,994 Selling, general and administrative expenses 2,202 2,543 2,960 Operating income (loss) 4,161 (4,161) 3,034 Income (loss) from investments in associates, joint ventures and other investments 2.6 615 (502) (172) Financing costs - net 6.2 (2,056) (2,858) (3,382) Income (loss) before taxes 2,720 (7,521) (520) Income tax expense 9.1 986 902 454 Net income (loss) (including non-controlling interests) 1,734 (8,423) (974) Net income (loss) attributable to equity holders of the parent 1,779 (7,946) (1,086) Net income (loss) attributable to non-controlling interests (45) (477) 112 Net income (loss) (including non-controlling interests) 1,734 (8,423) (974)

Year ended Year ended Year ended December 31, 2016 December 31, 2015 December 31, 2014 Earnings (loss) per common share (in U.S. dollars) 1 Basic and diluted 0.62 (3.43) (0.48) Weighted average common shares outstanding (in millions) 10.3 Basic 2,860 2,316 2,312 Diluted 2,865 2,316 2,312 1 Following the Company’s equity offering in April 2016, the earnings (loss) per common share for prior periods has been recasted in accordance with IFRS. Please refer to note 10 for more information.

The accompanying notes are an integral part of these consolidated financial statements. 66 Consolidated financial statements

ArcelorMittal and Subsidiaries Consolidated Statements of Other Comprehensive Income (millions of U.S. dollars, except share and per share data)

Year ended December 31, 2016 2015 2014 Net income (loss) (including non-controlling interests) 1,734 (8,423) (974) Items that can be recycled to the consolidated statements of operations Available-for-sale investments: Gain (loss) arising during the period 333 (439) 449 Reclassification adjustments for loss (gain) included in the consolidated statements of operations (74) 70 44 259 (369) 493 Derivative financial instruments: Gain (loss) arising during the period 40 107 181 Reclassification adjustments for loss (gain) included in the consolidated statements of operations (14) (93) (2) 26 14 179 Exchange differences arising on translation of foreign operations: Gain (loss) arising during the period (398) (7,876) (4,198) Reclassification adjustments for loss (gain) included in the consolidated statements of operations (13) (11) (55) (411) (7,887) (4,253) Share of other comprehensive income (loss) related to associates and joint ventures Gain (loss) arising during the period (79) (666) (601) Reclassification adjustments for (gain) loss included in the consolidated statements of operations 86 4 (61) 7 (662) (662) Income tax benefit (expense) related to components of other comprehensive income (loss) that can be recycled to the consolidated statements of operations (26) 79 (11)

Items that cannot be recycled to the consolidated statements of operations: Employee benefits - Recognized actuarial gains (losses) 9 24 (1,531) Share of other comprehensive income (loss) related to associates and joint ventures (24) (36) 4 Income tax benefit (expense) related to components of other comprehensive income that cannot be recycled to the consolidated statements of operations 1 (47) 94 Total other comprehensive income (loss) (159) (8,884) (5,687) Total other comprehensive income (loss) gain attributable to: Equity holders of the parent (186) (8,554) (5,536) Non-controlling interests 27 (330) (151) (159) (8,884) (5,687) Total comprehensive income (loss) 1,575 (17,307) (6,661) Total comprehensive income (loss) attributable to: Equity holders of the parent 1,593 (16,500) (6,622) Non-controlling interests (18) (807) (39) Total comprehensive income (loss) 1,575 (17,307) (6,661)

The accompanying notes are an integral part of these consolidated financial statements. Consolidated financial statements 67

ArcelorMittal and Subsidiaries Consolidated Statements of Financial Position (millions of U.S. dollars, except share and per share data)

December 31, Notes 2016 2015 Assets Current assets: Cash and cash equivalents 6.1.3 2,501 4,002 Restricted cash 6.1.3 114 100 Trade accounts receivable and other (including 322 and 216 from related parties at December 31, 2016 and 2015, respectively) 4.3 and 11.1 2,974 2,679 Inventories 4.4 14,734 13,424 Prepaid expenses and other current assets 4.5 1,665 1,859 Assets held for sale 2.3 259 262 Total current assets 22,247 22,326 Non-current assets: Goodwill and intangible assets 5.1 5,651 5,592 Property, plant and equipment and biological assets 5.2 34,831 35,780 Investments in associates and joint ventures 2.4 4,297 4,911 Other investments 2.5 926 692 Deferred tax assets 9.4 5,837 6,625 Other assets 4.6 1,353 920 Total non-current assets 52,895 54,520 Total assets 75,142 76,846

Liabilities and equity Current liabilities: Short-term debt and current portion of long-term debt 6.1.2.1 1,885 2,308 Trade accounts payable and other (including 179 and 256 to related parties at December 31, 2016 and 2015, respectively) 4.7 and 11.2 11,633 10,416 Short-term provisions 8.1 426 770 Accrued expenses and other liabilities 4.8 3,943 4,194 Income tax liabilities 133 133 Liabilities held for sale 2.3 95 220 Total current liabilities 18,115 18,041 Non-current liabilities: Long-term debt, net of current portion 6.1.2.2 11,789 17,478 Deferred tax liabilities 9.4 2,529 2,496 Deferred employee benefits 7.2 8,297 9,216 Long-term provisions 8.1 1,521 1,434 Other long-term obligations 566 611 Total non-current liabilities 24,702 31,235 Total liabilities 42,817 49,276 Contingencies and commitments 8.2 and 8.3

Equity: 10 Common Shares (no par value, 3,372,281,956 and 1,995,857,213 shares authorized, 3,065,710,869 and 1,665,392,222 shares issued, and 3,058,488,430 and 1,656,811,132 shares outstanding at December 31, 2016 and 2015, respectively) 401 10,011 Treasury shares (7,222,439 and 8,581,090 common shares at December 31, 2016 and 2015, respectively, at cost) (371) (377) Additional paid-in capital 34,826 20,294 Mandatorily convertible notes - 1,800 Retained earnings 16,049 13,902 Reserves (20,770) (20,358) Equity attributable to the equity holders of the parent 30,135 25,272 Non-controlling interests 2,190 2,298 Total equity 32,325 27,570 Total liabilities and equity 75,142 76,846

The accompanying notes are an integral part of these consolidated financial statements. 68 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 Items that can be recycled to the Statements 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, 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 (note 7.3) - - 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 (note 7.3) - - 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 Net income (including non- controlling interests) ------1,779 - - - 1,779 (45) 1,734 Other comprehensive income (loss) ------(471) 28 271 (14) (186) 27 (159) Total comprehensive income (loss) ------1,779 (471) 28 271 (14) 1,593 (18) 1,575 Equity offering (note 10.1) 1,262 144 - - - 2,971 - - - - - 3,115 - 3,115 Reduction of the share capital par value (note 10.1) - (10,376) - - - 10,376 ------Conversion of the mandatorily convertible notes (note 10.2) 138 622 - - (1,800) 1,178 ------Recognition of share based payments (note 7.3) 1 - 6 - - 7 - - - - - 13 - 13 Dividend (note 10.4) ------(63) (63) Equity offering in ArcelorMittal South Africa ("AMSA")(note 10.5.2) ------437 (301) - - - 136 (80) 56 Equity share option plan in AMSA (note 10.5.2) ------(36) 21 - - - (15) 15 - AMSA B-BBEE transaction (note 10.5.2) ------44 - - - - 44 19 63 Other movements ------(77) - - - 54 (23) 19 (4) Balance at December 31, 2016 3,058 401 (371) - - 34,826 16,049 (16,544) 142 322 (4,690) 30,135 2,190 32,325

1 Excludes treasury shares 2 In million of shares

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

ArcelorMittal and Subsidiaries Consolidated Statements of Cash Flows (millions of U.S. dollars, except share and per share data)

Year ended December 31, Notes 2016 2015 2014 Operating activities: Net income (loss) (including non-controlling interests) 1,734 (8,423) (974) Adjustments to reconcile net income (loss) to net cash provided by operations: Depreciation and amortization 5.1 and 5.2 2,721 3,192 3,939 Impairment 5.1, 5.2 and 5.3 205 4,764 264 Interest expense 6.2 1,172 1,383 1,565 Interest income 6.2 (58) (105) (96) Income tax expense (benefit) 9.1 986 902 454 Provisions for labor agreements and separation plans 44 37 90 Remeasurement gain relating to US deferred employee benefits 7.2 (832) - - Net gain on disposal of subsidiaries (23) (72) (192) (Income) loss from investments in associates, joint ventures and other investments 2.6 (615) 502 172 Provision on pensions and OPEB 7.2 439 558 591 Change in fair value adjustment on call options on Mandatory Convertible Bonds 6.2 (171) 108 (112) Income tax amnesty expenses 6.2 - - 161 Unrealized foreign exchange effects 486 425 413 Write-downs (reversal) of inventories to net realizable value, provisions and other non- cash operating expenses net 4.4 (212) 1,383 674 Changes in assets and liabilities that provided (required) cash, net of acquisitions: Trade accounts receivable (373) 335 537 Inventories 4.4 (2,055) 288 (398) Trade accounts payable and other 4.7 1,405 (1,012) (305) Interest paid (1,354) (1,561) (1,713) Interest received 60 89 97 Income taxes paid (296) (398) (337) Dividends received from associates, joint ventures and other investments 176 227 209 Cash contributions to plan assets and benefits paid for pensions and OPEB 7.2 (395) (556) (674) VAT and other amounts received (paid) from/to public authorities 46 166 (112) Other working capital and provisions movements (382) (81) (383) Net cash provided by operating activities 2,708 2,151 3,870 Investing activities: Purchase of property, plant and equipment and intangibles (2,444) (2,707) (3,665) Disposal (acquisition) of net assets of subsidiaries, net of cash (disposed) acquired of 63, (10) and (85) in 2016, 2015 and 2014, respectively 2.3.1 and 2.2.4 192 - 232 Acquisition of associates and joint ventures 2.4 - - (258) Disposals of associates and joint ventures 2.4.2 and 2.5 1,017 23 522 Disposals of financial assets 165 172 10 Other investing activities net (73) 342 82 Net cash used in investing activities (1,143) (2,170) (3,077) Financing activities: Payments of subordinated perpetual capital securities 10.2 - - (657) (Acquisition) disposal of non-controlling interests 10.5.2 56 - (17) Proceeds from short-term debt 1,516 543 1,855 Proceeds from long-term debt 110 3,256 2,419 Payments of short-term debt (2,721) (2,490) (4,545) Payments of long-term debt (4,912) (501) (1,282) Equity offering 10.1 3,115 - - Dividends paid (includes 61, 85 and 108 of dividends paid to non-controlling shareholders in 2016, 2015 and 2014 respectively) (61) (416) (458) Other financing activities net (29) 3 (65) Net cash (used in) provided by financing activities (2,926) 395 (2,750) Effect of exchange rate changes on cash (127) (267) (230) Net (decrease) increase in cash and cash equivalents (1,488) 109 (2,187) Cash and cash equivalents: At the beginning of the year 4,002 3,893 6,072 Reclassification of the period-end cash and cash equivalent (to) from held for sale 2.3 (13) - 8 At the end of the year 2,501 4,002 3,893

The accompanying notes are an integral part of these consolidated financial statements. 70 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 Divestments and assets held for sale 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 8.1 Provisions overview other 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 and biological assets 11.2 Purchases and trade payables 5.3 Impairment of intangible assets, including goodwill, and tangible 11.3 Other transactions with related parties assets Note 12: Principal accountant fees and services

Consolidated financial statements 71

Note 1: Accounting Principles 1.3 Accounting standards applied December 18, 2014, which 1.3.2 New IFRS standards, clarify various presentation amendments and interpretation ArcelorMittal (“ArcelorMittal” or 1.3.1 Adoption of new IFRS and disclosure requirements applicable from 2017 onward the “Company”), together with its standards, amendments and related to materiality, subtotals, subsidiaries, owns and operates interpretations applicable from disaggregation and accounting On May 28, 2014, the IASB issued steel manufacturing and mining January 1, 2016 policies. IFRS 15 “Revenue from Contracts facilities in Europe, North and with Customers” which provides a South America, Asia and Africa. On January 1, 2016, the • Annual Improvements 2012- unified framework for determining Collectively, these subsidiaries Company adopted the following 2014 published by the IASB on the timing, measurement and and facilities are referred to in the amendments which did not September 25, 2014 as part of recognition of revenue. The consolidated financial statements have any material impact on its annual improvement process focus of the new standard is to as the “operating subsidiaries”. the financial statements of the make amendments to the recognize revenue as performance These consolidated financial Company: following standards: obligations are met rather than statements were authorized for based on the transfer of risks issuance on February 28, 2017 by • Amendments to IFRS 11 “Joint o IFRS 5 “Non-current Assets and rewards. IFRS 15 includes a the Company’s Board of Directors. Arrangements”, issued on May Held for Sale and Discontinued comprehensive set of disclosure 6, 2014, clarify the accounting Operations” introduces guidance requirements including qualitative 1.1 Basis of presentation for acquisitions of an interest relating to changes in methods and quantitative information in a joint operation when the of disposal. about contracts with customers to The consolidated financial operation constitutes a business. understand the nature, amount, statements have been prepared o IFRS 7 “Financial Instruments: timing and uncertainty of revenue. on a historical cost basis, except • Amendments to IAS 16 “Property, Disclosures” provides additional The standard supersedes IAS 18 for available-for-sale financial Plant and Equipment” and IAS guidance to clarify whether a “Revenue”, IAS 11 “Construction assets, derivative financial 38 “Intangible Assets”, issued on servicing contract is continuing Contracts” and a number of instruments, biological assets May 12, 2014, clarify that the involvement in a transferred revenue-related interpretations. and certain assets and liabilities use of revenue-based methods asset and clarifies the On September 11, 2015, the IASB held for sale, which are measured to calculate the depreciation applicability of the amendments issued an amendment formalizing at fair value less cost to sell, of an asset is not appropriate to IFRS 7 on offsetting disclosure a one-year deferral of the effective inventories, which are measured because revenue generated to condensed interim financial date for annual periods beginning at the lower of net realizable by an activity that includes statements. on or after January 1, 2018, with value or cost and the financial the use of an asset generally early application permitted. statements of the Company’s reflects factors other than the o IAS 19 clarifies determination of The Company’s revenue is Venezuelan operations, for consumption of the economic the discount rate in a regional predominantly derived from the which hyperinflationary benefits embodied in the asset. market sharing the same sale of goods under arrangements accounting is applied (see The IASB also clarified that currency. in which the transfer of risks and note 2.2.2). The consolidated revenue is generally presumed rewards of ownership and the financial statements have been to be an inappropriate basis for o IAS 34 “Interim Financial fulfillment of the Company’s prepared in accordance with measuring the consumption of Reporting” clarifies the meaning performance obligations occur International Financial Reporting the economic benefits embodied of ‘elsewhere in the interim at the same time. Therefore, the Standards (“IFRS”) as issued by in an intangible asset. This report’ and the requirements Company does not expect that the International Accounting presumption, however, can relating to cross-reference the adoption of this new standard Standards Board (“IASB”) and as be rebutted in certain limited disclosure in the interim will have a material impact to its adopted by the European Union circumstances. financial report. consolidated financial statements. and are presented in U.S. dollars with all amounts rounded to the • Amendments to IAS 16 and IAS Also, on January 1, 2016, the On July 24, 2014, the IASB issued nearest million, except for share 41 “Agriculture”, issued on June Company adopted the following the final version of IFRS 9 “Financial and per share data. 30, 2014, which change the amendments which did not Instruments (2014)” which replaces financial reporting for bearer have any impact on the financial IAS 39, bringing together the 1.2 Use of estimates plants, such as grape vines, statements of the Company: classification and measurement, rubber trees and oil palms. The impairment and hedge The preparation of consolidated IASB decided that bearer plants • Amendments to IAS 27, accounting. The final version of the financial statements in conformity should be accounted for and published on August 12, 2014, standard contains requirements in with IFRS recognition and measured after initial recognition which allow entities to use the the following areas: measurement principles and, on a cost or revaluation basis in equity method to account for in particular, making the critical accordance with IAS 16, because investments in subsidiaries, joint • Classification and measurement: accounting judgments require the their operation is similar to that ventures and associates in their Financial assets are classified use of estimates and assumptions of manufacturing. Consequently, separate financial statements. and measured by reference that affect the reported amounts the amendments include them to the business model within of assets, liabilities, revenues and within the scope of IAS 16 • Amendments to IFRS 10, IFRS which they are held and expenses. Management reviews instead of IAS 41. The produce 12 and IAS 28, published on their contractual cash flow its estimates on an ongoing growing on bearer plants will December 18, 2014, which clarify characteristics. Financial liabilities basis using currently available remain within the scope of IAS the scope and measurement are classified in a similar manner information. Changes in facts and 41. method regarding consolidation to IAS 39, however there are circumstances or obtaining new and disclosure of investment differences in the requirements information or more experience • Amendments to IAS 1 entities. regarding the measurement of may result in revised estimates, “Presentation of Financial an entity’s own credit risk. and actual results could differ from Statements”, issued on those estimates. 72 Consolidated financial statements

• Impairment: The standard of these new amendments will On January 29, 2016, the IASB volatility in reported results arising introduces an ‘expected credit have a material impact to its issued amendments to IAS 7 from implementing the new loss’ model for the measurement consolidated financial statements. “Statement of Cash Flows”. financial instruments Standard of the impairment of financial These amendments clarify that IFRS 9 before implementing the assets; it is therefore no longer On January 13, 2016, the IASB entities shall provide disclosures replacement Standard that the necessary for a credit event to issued IFRS 16 “Leases” which that enable users of financial Board is developing for IFRS 4. have occurred before a credit loss will replace IAS 17 “Leases”. statements to evaluate changes These amendments to IFRS 4 is recognized. This new standard specifies in liabilities arising from financing supplement existing options in the how to recognize, measure, activities, including non-cash Standard that can already be used • Hedge accounting: The present and disclose leases. The changes and changes arising from to address the temporary volatility. standard introduces a new standard provides a single lessee cash flows. These amendments These amendments are effective hedge accounting model that accounting model, requiring are effective for annual periods when an insurer first applies IFRS is designed to be more closely lessees to recognize assets and beginning on or after January 9 (overlay approach) or during aligned with how entities liabilities for all leases unless the 1, 2017, with early application the three years period beginning undertake risk management lease term is 12 months or less permitted. The Company does not on January 1, 2018 (deferral activities when hedging financial or the underlying asset has a low expect that the adoption of these approach). The Company does not and non-financial risk exposures. value. This standard is effective amendments will have a material expect that the adoption of these for annual periods beginning impact to its consolidated financial amendments will have a material • Derecognition: The requirements on or after January 1, 2019, with statements. impact to its consolidated financial for derecognition of financial early application permitted if statements. assets and liabilities are carried IFRS 15 has also been applied. At On April 12, 2016, the IASB forward from IAS 39. December 31, 2016, the Company issued amendments to IFRS 15 On December 8, 2016, the IASB has non-cancellable operating which clarify how to identify issued Annual Improvements 2014 IFRS 9 is effective for annual lease commitments of 1,312 a performance obligation, – 2016 to make amendments to periods beginning on or after (see note 8.3). A preliminary determine whether a company the following standards: January 1, 2018, with early assessment indicates that most of is a principal or an agent and application permitted. The these arrangements will meet the determine when the revenue • IFRS 12 “Disclosure of Interests in Company does not expect that definition of a lease under IFRS from granting a license should be Other Entities” clarifies the scope the adoption of this new standard 16 and, hence the Company will recognized. These amendments of the standard by specifying that will have a material impact to its recognize a right-of-use asset and are also effective for annual the disclosure requirements in consolidated financial statements. corresponding liability in respect periods beginning on or after the standard apply to an entity’s of the net present value of these January 1, 2018, with early interests that are classified The Company does not expect leases unless they qualify for low application permitted. as held for sale, as held for that the adoption of these value or short-term leases upon distribution or as discontinued amendments will have a material the application of IFRS 16. The On June 20, 2016, the IASB operations in accordance with impact to its consolidated financial Company has not yet quantified issued amendments to IFRS 2 IFRS 5 “Non-current Assets statements. the impact of the application “Share-based Payment”. These Held for Sale and Discontinued of IFRS 16 on the consolidated amendments clarify the effects Operations”. The Company does not plan to financial statements. The of vesting and non-vesting early adopt the new accounting quantitative effect will depend on, conditions on the measurement • IFRS 1 “First-time Adoption of standards and amendments. inter alia, the transition method of cash-settled share-based International Financial Reporting chosen, the extent to which payments; the treatment of Standards” deletes the short-term 1.3.3 New IFRS standards, the Company uses the practical share-based payment transactions exemptions related to financial amendments and interpretation expedients and recognition with a net settlement feature for instruments, employee benefits not yet endorsed by the European exemptions, and any additional withholding tax obligations; and and investment entities because Union leases that the Company enters the treatment of a modification they have now served their into. to the terms and conditions of intended purpose. On September 11, 2014, the IASB a share-based payment that issued amendments to IFRS 10 and On January 19, 2016, the changes the classification of the • IAS 28 “Investments in Associates IAS 28 “Investments in Associates IASB issued amendments to transaction from cash-settled to and Joint Ventures” clarifies that and Joint Ventures” which address IAS 12 “Income Taxes”. These equity-settled. These amendments for an investment in an associate an inconsistency between the amendments clarify how to are effective for annual periods or a joint venture held by a requirements in IFRS 10 and those account for deferred tax assets beginning on or after January venture capital organization, in IAS 28 in dealing with the sale related to debt instruments 1, 2018, with early application or other qualifying entity, the or contribution of assets between measured at fair value and how permitted. The Company does not measurement at fair value an investor and its associate or to recognize deferred tax assets expect that the adoption of these through profit or loss is available joint venture. The amendments for unrealized losses. These amendments will have a material for each investment in an set out that a full gain or loss amendments are effective for impact to its consolidated financial associate or joint venture on an is recognized when the assets annual periods beginning on statements. investment-by-investment basis, constitute a business or a partial or after January 1, 2017, with upon initial recognition. gain or loss is recognized when the early application permitted. The On September 12, 2016, the assets do not constitute a business. Company does not expect that the IASB issued amendments to The amendments to IFRS 1 and IAS On December 17, 2015, the IASB adoption of these amendments IFRS 4 “Insurance Contracts”. 28 are effective for annual periods issued an amendment formalizing will have a material impact to its These amendments propose beginning on or after January, the deferral of these amendments consolidated financial statements. two approaches (an overlay 1 2018, the amendment to IFRS indefinitely. The Company does approach and a deferral approach) 12 for annual periods beginning not expect that the adoption in order to address temporary on or after January 1, 2017. The Consolidated financial statements 73

Company does not expect that the and has rights to the net assets of Investments in other entities, 2.2 Investments in subsidiaries adoption of these amendments the arrangement. The investment over which the Company and/ will have a material impact to its is accounted for under the or its operating subsidiaries do 2.2.1 List of subsidiaries consolidated financial statements. equity method. The investment not have the ability to exercise is recognized at cost at the date significant influence and have a The table below provides a list of On December 8, 2016, the IASB of acquisition and subsequently readily determinable fair value, the Company’s principal operating issued IFRIC 22 “Foreign Currency adjusted for ArcelorMittal’s share are accounted for as available- subsidiaries at December 31, Transactions and Advance in undistributed earnings or for-sale at fair value with any 2016. Unless otherwise stated, Consideration”. This interpretation losses since acquisition, less any resulting gain or loss, net of the subsidiaries as listed below provides guidance about which impairment incurred. Any excess related tax effect, recognized in have share capital consisting exchange rate to use in reporting of the cost of the acquisition the consolidated statements of solely of ordinary shares, which foreign currency transactions over the Company’s share of the other comprehensive income, are held directly or indirectly by (such as revenue transactions) net fair value of the identifiable until realized. Realized gains and the Company and the proportion when payment is made or received assets, liabilities, and contingent losses from the sale of available- of ownership interests held in advance. This interpretation liabilities of the associate or joint for-sale securities are determined equals to the voting rights held is effective for annual periods venture recognized at the date on an average cost method. To the by the Company. The country of beginning on or after January of acquisition is considered as extent that these investments do incorporation corresponds to their 1, 2018, with early application goodwill. The goodwill is included not have a readily determinable principal place of operations. permitted. in the carrying amount of the fair value, they are accounted for investment and is evaluated under the cost method. Also, on December 8, 2016, the for impairment as part of the IASB issued amendments to IAS investment. The consolidated While there are certain limitations 40 “Investment Property”. These statements of operations include on the Company’s operating amendments clarify that transfers the Company’s share of the and financial flexibility arising to, or from, investment properties profit or loss of associates and from the restrictive and financial require an evidence of a change joint ventures from the date covenants of the Company’s in use. that significant influence or joint principal credit facilities described control commences until the in note 6.1.2, there are no Note 2: Scope of Consolidation date significant influence or joint significant restrictions resulting control ceases, adjusted for any from borrowing agreements or 2.1 Basis of consolidation impairment losses. Adjustments regulatory requirements on the to the carrying amount may also ability of consolidated subsidiaries, The consolidated financial be necessary for changes in the associates and jointly controlled statements include the Company’s proportionate interest entities to transfer funds to accounts of the Company, its in the investee arising from the parent in the form of cash subsidiaries and its interests changes in the investee’s equity dividends to pay commitments as in associated companies and that have not been recognized in they come due. joint arrangements. Subsidiaries the investee’s profit or loss. The are consolidated from the date Company’s share of those changes Inter-company balances and the Company obtains control is recognized directly in equity. transactions, including income, (ordinarily the date of acquisition) expenses and dividends, are until the date control ceases. The Company assesses the eliminated in the consolidated The Company controls an entity recoverability of its investments financial statements. Gains when it is exposed to or has accounted for using the equity and losses resulting from inter- rights to variable returns from method whenever there is an company transactions are also its involvement with the entity indication of impairment. In eliminated. determining the value in use of and has the ability to affect those its investments, the Company returns through its power over the Non-controlling interests estimates its share in the present entity. represent the portion of profit or value of the projected future cash loss and net assets not held by flows expected to be generated Associated companies are the Company and are presented by operations of associates and those companies over which separately in the consolidated joint ventures. The amount of the Company has the ability to statements of operations, in the any impairment is included in exercise significant influence consolidated statements of other income (loss) from associates, joint on the financial and operating ventures and other investments comprehensive income and policy decisions, which it does in the consolidated statements of within equity in the consolidated not control. Generally, significant operations. statements of financial position. influence is presumed to exist when the Company holds more For investments in joint operations, than 20% of the voting rights. Joint in which ArcelorMittal exercises arrangements, which include joint joint control and has rights to ventures and joint operations, the assets and obligations for are those over whose activities the liabilities relating to the the Company has joint control, arrangement, the Company typically under a contractual recognizes its assets, liabilities and arrangement. In joint ventures, transactions, including its share of ArcelorMittal exercises joint control those incurred jointly. 74 Consolidated financial statements

Name of Subsidiary Country % of Ownership NAFTA ArcelorMittal Dofasco G.P. Canada 100.00% ArcelorMittal México S.A. de C.V. Mexico 100.00% ArcelorMittal USA LLC United States 100.00% ArcelorMittal Las Truchas, S.A. de C.V. Mexico 100.00% ArcelorMittal Long Products Canada G.P. Canada 100.00% Brazil and neighboring countries (“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% 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 Ostrava a.s. Czech Republic 100.00% ArcelorMittal Duisburg GmbH Germany 100.00% Africa and Commonwealth of Independent States (“ACIS”) ArcelorMittal South Africa Ltd. ("AMSA") South Africa 69.22%1 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 Mining Canada G.P. and ArcelorMittal Infrastructure G.P. ("AMMIC") Canada 85.00%2 ArcelorMittal Liberia Ltd Liberia 85.00% JSC ArcelorMittal Temirtau Kazakhstan 100.00% PJSC ArcelorMittal Kryvyi Rih Ukraine 95.13% 1 In 2016, AMSA issued shares in the context of a B-BBEE (“broad-based black economic empowerment”) transaction resulting in a decrease in ArcelorMittal’s voting rights to 53.92% (see note 10.5). 2 The business formerly carried on by ArcelorMittal Mines Canada Inc. is now carried on by ArcelorMittal Mining Canada G.P. and ArcelorMittal Infrastructure G.P. Consolidated financial statements 75

2.2.2 Translation of financial reported in the consolidated In February 2015, next to the Since 2013, Unicon has been able statements denominated in statements of comprehensive official exchange rate established to settle certain of its U.S. dollar foreign currency income. by the National Center for obligations for imported materials Foreign Commerce (“CENCOEX”) at the official rate SICAD or DIPRO The functional currency of Upon consolidation, the results honored only for certain priority rate and records the gains related ArcelorMittal S.A. is the U.S. dollar. of operations of ArcelorMittal’s transactions and the weekly to such transactions when the The functional currency of each of subsidiaries, associates and joint auction mechanism under funds are authorized by CENCOEX the principal operating subsidiaries arrangements whose functional the Supplementary Currency and the liabilities are paid. is the local currency, except for currency is other than the U.S. Administration System (“SICAD”), ArcelorMittal México, AMMIC dollar are translated into U.S. it introduced a new, alternative In 2015 and 2014, the Company and ArcelorMittal International dollars at the monthly average currency market, the Foreign translated its Venezuelan Luxembourg, whose functional exchange rates and assets and Currency Marginal System operations at the SICAD rate currency is the U.S. dollar and liabilities are translated at the year- (“SIMADI”), which was created with because it concluded this rate ArcelorMittal Ostrava, ArcelorMittal end exchange rates. Translation a floating exchange rate generally corresponds to the dividend Poland and ArcelorMittal Galati, adjustments are recognized based on supply and demand. As remittance rate in accordance whose functional currency is directly in other comprehensive a reference, the SIMADI exchange with IFRS requirements and it the euro. In 2015, ArcelorMittal income and are included in net rate started at 170.0 Bs.F. per U.S. has been able to settle certain Kryvyi Rih and ArcelorMittal income (including non-controlling dollar in February 2015, and closed of its U.S. dollar obligations for Temirtau changed their functional interests) only upon sale or at 198.7 Bs.F. as of December 31, imported materials at the SICAD currencies from U.S. dollar to their liquidation of the underlying 2015. The SICAD exchange rate rate. Nevertheless, conversion local currencies due to changes foreign subsidiary, associate or was set to 13.5 Bs.F. per U.S. dollar of dividends at the SICAD rate in the regulatory and economic joint arrangement. until February 17, 2016, when the or at any other rate was difficult environment and transactional Venezuelan government devalued as authorization for dividend currencies of the operations in Since 2010 Venezuela has been its currency by changing the remittance is very rare. Ukraine and Kazakhstan. considered a highly inflationary CENCOEX rate from 6.3 to 10 Bs.F. country and therefore the financial per U.S. dollar and announced Effective January 1, 2016, the Transactions in currencies other statements of the Company’s the elimination of the SICAD rate. Company discontinued the use than the functional currency of Venezuelan tubular production Beginning February 18, 2016, of the SICAD rate and applied a subsidiary are recorded at the facilities Industrias Unicon CA the SIMADI rate was allowed to the DICOM rate to translate its rates of exchange prevailing at the (“Unicon”) are adjusted to reflect float freely beginning at a rate of Venezuelan operations. As a result date of the transaction. Monetary the changes in the general approximately 203 Bs.F. per U.S. of this change, ArcelorMittal’s net assets and liabilities in currencies purchasing power of the local dollar. Effective March 10, 2016, equity in Unicon decreased from other than the functional currency currency before being translated the Venezuelan government 628 to 43 at January 1, 2016. are remeasured at the rates of into U.S. dollars. The Company replaced the SIMADI rate with two exchange prevailing on the date used estimated general price new exchange systems: Protected For the years ended December of the consolidated statements of indices of 533.9%, 146.7% and Exchange rate (“DIPRO”), which 31, 2016, 2015 and 2014, the financial position and the related 67.6% for the years ended was fixed at a rate of 10 Bs.F. per financial statements of Unicon translation gains and losses are December 31, 2016, 2015 and U.S. dollar and is used primarily for were translated into U.S. dollars reported within financing costs 2014, respectively, for this purpose. priority food and medicine sectors, at the rates the Company in the consolidated statements As a result of the inflation-related and Complementary Floating deemed appropriate for dividend of operations. Non-monetary adjustments on monetary items, Exchange Market Rate (“DICOM”), remittance which were 674, 13.5 items that are carried at cost losses of 8, 161 and 47 were which is allowed to float freely and and 12.0 Bs.F. per U.S. dollar, are translated using the rate of recognized in net financing costs applies for most other sectors. The respectively. The following table exchange prevailing at the date for the years ended December 31, DICOM rate was originally set at presents selected consolidated of the transaction. Non-monetary 2016, 2015 and 2014, respectively. 206 Bs.F. per U.S. dollar on March financial information of Unicon items that are carried at fair value 10, 2016, before falling to 674 Bs.F. as of and for the years ended are translated using the exchange In recent years, the Venezuelan per U.S. dollar at December 31, December 31, 2016, 2015 and rate prevailing when the fair value government enacted changes 2016. 2014. was determined and the related affecting the country’s currency translation gains and losses are exchange and other controls.

For the year endend December 31, 2016 2015 2014 Revenue 88 1,325 552 Cost of sales 91 1,085 404 Operating income (11) 143 112 Net income (loss) (44) (121) 20

It is possible that the Venezuelan statements of its Venezuelan and ArcelorMittal’s Venezuelan government will further refine or operations. This could have an operations’ ability to remit alter mechanisms through which unfavorable but insignificant dividends and pay intercompany companies are able to access U.S. impact on the Company’s operating balances at any official exchange dollar, which could change the rate results and financial position. In rate or at all. at which ArcelorMittal can access addition, the foreign exchange U.S. dollar and the rate used by the controls in Venezuela may limit Company to translate the financial the ability to repatriate earnings 76 Consolidated financial statements

2.2.3 Business combinations acquired of 50). Both reinsurance part of the Europe reportable entities were part of the NAFTA companies are reinsurers segment. reportable segment. ArcelorMittal Business combinations are incorporated in Luxembourg and expects to complete the sale of accounted for using the will operate through a series of On August 7, 2016, ArcelorMittal Steelton during the first half of acquisition method as of the reinsurance agreements with the completed the sale of the 2017 and therefore the assets acquisition date, which is the date Company’s subsidiaries. Company’s 49% interest in the and liabilities subject to the sale on which control is transferred associates ArcelorMittal Algérie remained classified as held for sale to ArcelorMittal. The Company The Company concluded that and ArcelorMittal Tebessa and at December 31, 2016 (see note controls an entity when it is both acquisitions were not its 70% interest in the subsidiary 2.3.2). exposed to or has rights to variable business combinations mainly ArcelorMittal Pipes and Tubes returns from its involvement with as the transactions did not Algeria, which was announced Divestments in 2015 the entity and has the ability to include the acquisition of any on October 7, 2015 as part affect those returns through its strategic management processes, of an outline agreement for On March 30, 2015, following an power over the entity. operational processes and restructuring the shareholding agreement signed on October 21, resource management processes. of its Algerian activities. As part 2014, the Company established The Company measures goodwill of the agreement, ArcelorMittal the joint venture ArcelorMittal CLN at the acquisition date as the total There were no significant transferred such interests to Distribuzione Italia S.r.l. (“AMCDI”) of the fair value of consideration acquisitions in 2015 nor 2014. IMETAL, an Algerian state-owned with Coils Lamiere Nastri S.P.A. transferred, plus the proportionate entity. ArcelorMittal Pipes and (“CLN”) through the contribution amount of any non-controlling 2.3 Divestments and assets held Tubes Algeria and ArcelorMittal of assets and liabilities of its wholly interest, plus the fair value of any for sale Algérie were part of the ACIS owned subsidiary ArcelorMittal previously held equity interest in reportable segment while Distribution Solutions Italia S.R.L the acquiree, if any, less the net Non-current assets and disposal ArcelorMittal Tebessa was part of (“AMDSI”). ArcelorMittal holds recognized amount (generally at groups that are classified as the Mining reportable segment. a 49% stake in AMCDI, which is fair value) of the identifiable assets held for sale are measured at Previously, on January 10, 2015, accounted for under the equity acquired and liabilities assumed. the lower of carrying amount ArcelorMittal had completed the method. Assets and liabilities of and fair value less costs to sell. sale of a 21% controlling stake in AMDSI subject to the transaction In a business combination in which Assets and disposal groups are ArcelorMittal Tebessa, which holds were classified as held for sale at the fair value of the identifiable classified as held for sale if their two iron ore mines in Ouenza December 31, 2014. AMDSI was net assets acquired exceeds the carrying amount will be recovered and Boukadra, Tebessa, to Sider part of the Europe reportable cost of the acquired business, through a sale transaction rather and the Ferphos Group, two segment. the Company reassesses the than through continuing use. This Algerian state-owned entities. fair value of the assets acquired condition is regarded as met only The Company accounted for its On February 26, 2015, following an and liabilities assumed. If, after when the sale is highly probable remaining 49% stake under the agreement signed on September reassessment, ArcelorMittal’s and the asset, or disposal group, is equity method. This sale had been 18, 2014, ArcelorMittal established interest in the net fair value available for immediate sale in its contractually agreed on November the investment ArcelorMittal RZK of the acquiree’s identifiable present condition and is marketed 25, 2014 in the framework of Celik Servis Merkezi Sanayi ve assets, liabilities and contingent for sale at a price that is reasonable a strategic agreement signed Ticaret Anonim Sirketi (“AM RZK”) liabilities exceeds the cost of the in relation to its current fair value. on October 5, 2013. Assets and with a local partner in Turkey business combination, the excess Assets held for sale are presented liabilities of ArcelorMittal Pipes and through the contribution of assets (bargain purchase) is recognized separately in the consolidated Tubes Algeria and ArcelorMittal and liabilities of the Company’s immediately as a reduction of statements of financial position Tebessa were classified as held for wholly owned subsidiary Rozak cost of sales in the consolidated and are not depreciated. Gains sale at December 31, 2015 and Demir Profil Ticaret ve Sanayi statements of operations. (losses) on disposal are recognized 2014, respectively. Anonim Sirketi (“Rozak”). in cost of sales. ArcelorMittal holds a 50% stake Any contingent consideration On April 4, 2016, ArcelorMittal in AM RZK and the investment is payable is recognized at fair 2.3.1 Divestments completed the sale of the LaPlace accounted for under the equity value at the acquisition date and and Vinton Long Carbon facilities method. Assets and liabilities of any costs directly attributable Divestments in 2016 in the United States. The total Rozak subject to the transaction to the business combination are consideration was 96 and the were classified as held for sale at expensed as incurred. On September 30, 2016, result on disposal was nil. Assets December 31, 2014. Rozak was ArcelorMittal completed the sale and liabilities of the LaPlace, part of the Europe reportable 2.2.4 Acquisitions of its wholly owned subsidiary Steelton and Vinton Long Carbon segment. ArcelorMittal Zaragoza in Spain to facilities in the United States On December 21, 2016 Megasa Siderúrgica S.L. for a total were classified as held for sale On January 23, 2015, ArcelorMittal ArcelorMittal acquired from consideration of €80 million (89). at December 31, 2015 and the completed the disposal of Skanska Financial Services AB Prior to the disposal, the Company Company recorded in cost of sales the building on Avenue de la the reinsurance company SCEM recorded in cost of sales an an impairment charge of 231 (of Liberté in Luxembourg city (the Reinsurance S.A. (“SCEM”) for a impairment charge of 49 (of which which 13 relating to allocated “Liberté Building”), formerly the total consideration of €54 million 2 relating to allocated goodwill) goodwill) to write their carrying headquarters of the Company, to (56; cash inflow was 7 net of cash to write the net carrying amount amount down to the expected the Banque et Caisse d’Epargne acquired of 63). On January 18, down to the net proceeds from the net proceeds from the sale. The de l’Etat (“BCEE”) following a 2017, the Company also acquired sale. The fair value measurement fair value measurement of the memorandum of understanding from Parfinada B.V. the reinsurance of ArcelorMittal Zaragoza was Long Carbon facilities in the signed on November 14, 2014. The company Artzare S.A. for a total determined using the contract United States was determined property was classified as held for consideration of €43 million (45; price, a Level 3 unobservable using the contract price, a Level 3 sale at December 31, 2014. cash inflow was 5 net of cash input. ArcelorMittal Zaragoza was unobservable input. These various Consolidated financial statements 77

The result on disposal for the with Tauron Group (see note 2.4). On May 30, 2014, ArcelorMittal partnership with Bekaert in Latin above mentioned disposals Upon contribution, the interest completed the sale of its 50% America to Costa Rica and Ecuador, in 2015 was immaterial. The in the new joint venture was stake in the joint venture Kiswire the Company sold to Bekaert 73% aggregate net assets disposed of measured at fair value for 120. ArcelorMittal Ltd. (“Kiswire”) in of its wire drawing business in amounted to 97. South Korea and certain other ArcelorMittal Costa Rica and Cimaf On July 31, 2014, ArcelorMittal entities of its steel cord business Cabos, a cable business in Osasco Divestments in 2014 completed the sale of all in the United States, Europe and (São Paulo) Brazil, previously a of the shares of Circuit Foil Asia to Kiswire Ltd. These various branch of Belgo Bekaert Arames On December 31, 2014, Luxembourg, which manufactures entities were part of the Europe (“BBA”). BBA is a consolidated ArcelorMittal completed the electrodeposited copper foils reportable segment. The fair entity in which ArcelorMittal holds disposal of the Kuzbass coal for the electronics industry, and value measurement of the steel a 55% controlling interest. The two mines (“Kuzbass”) located in the certain of its subsidiaries (“Circuit cord business was determined businesses were part of the Brazil Kemerovo region in Russia to the Foil”) to Doosan Corporation, a using the contract price, a Level 3 reportable segment. ArcelorMittal Russian National Fuel Company. South Korean conglomerate. The unobservable input. On the closing also acquired on the same date The existing intra group debt of cash consideration amounted to date, the Company received a a 27% non-controlling interest in 138 was assumed by the buyer 50 (49 net of cash of 1 disposed preliminary cash consideration of the Ideal Alambrec Ecuador plant who will repay a net amount of of). Circuit Foil was included in the 55 (39 net of cash of 16 disposed) controlled by Bekaert. RUB 1.5 billion (25) in monthly Europe reportable segment. subsequently revised to 57 after installments until June 2017. final determination of net debt The result on disposal for Kuzbass was part of the Mining On June 30, 2014, ArcelorMittal and working capital situation on the disposals of Circuit Foil reportable segment. completed the sale of its 78% stake closing date. The existing intra Luxembourg, ATIC, the Bekaert in the European port handling and group debt of the sold subsidiaries and Kiswire transactions was On December 11, 2014, the logistics company ATIC Services of 102 was assumed by Kiswire immaterial. The aggregate net Company contributed the shares S.A. (“ATIC”) for €155 million (144 and was repaid during the first half assets disposed of amounted to of an energy production facility in net of cash of 68 disposed of) to of 2015. 250. the Czech Republic and a second H.E.S. Beheer. ATIC was part of energy production facility in the Europe reportable segment. On April 30, 2014, in the There were no significant Poland (Europe segment) with As a result of the disposal, non- framework of an agreement divestments during 2015. The a total carrying amount of 43 controlling interests decreased signed with Bekaert Group table below summarizes the into the new joint venture Tameh by 81. (“Bekaert”) on December 9, significant divestments made in Holding Sp.Z.o.o (“Tameh”) created 2013 to extend ArcelorMittal’s 2016 and 2014:

2016 2014 LaPlace and ArcelorMittal Vinton Long ArcelorMittal Tubular Products Carbon Zaragoza Algeria facilities Kuzbass Current assets 53 15 118 6 Property, plant and equipment 74 2 13 62 Intangible assets - - - 2 Other assets - - 7 1 Total assets 127 17 138 71 Current liabilities 38 16 33 151 Other long-term liabilities - 12 9 70 Total liabilities 38 28 42 221 Total net assets / (liabilities) 89 (11) 96 (150) Allocated goodwill - - - 3 % of net assets sold 100% 100% 100% 99% Total net assets / (liabilities) disposed of 89 (11) 96 (147) Cash consideration received 89 - 96 - Write-off of the intra group debt not assumed by the buyer - - - (113) Reclassification of foreign exchange translation difference 8 4 - 45 Gain on disposal 8 15 - 79

2.3.2 Assets held for sale under the equity method. AMTBA subject to the transaction were In addition, the assets and was part of the NAFTA reportable classified as held for sale. The liabilities of the Steelton facility During the first quarter of segment. At December 31, 2016, Company recorded in cost of in the United States remained 2017, ArcelorMittal and the the assets and liabilities of AMTBA sales an impairment charge of 18. classified as held for sale except management of ArcelorMittal were classified as held for sale. ArcelorMittal completed the sale of for a 53 other post-employment Tailored Blanks Americas the above mentioned operations benefit obligation retained by the (“AMTBA”), comprising the In December 2015, ArcelorMittal on February 10, 2017 and therefore Company at December 31, 2016 Company’s tailored blanks committed to a plan to sell certain the assets and liabilities subject to (see note 2.3.1 and 7.2). operations in Canada, Mexico and of its ArcelorMittal Downstream the sale remained classified as held the United States, intend to enter Solutions operations in the for sale at December 31, 2016. into a joint venture agreement Europe segment. Accordingly, at following which the Company will December 31, 2015, the carrying account for its interest in AMTBA amount of assets and liabilities 78 Consolidated financial statements

The tables below provide details of the assets and liabilities held for sale after elimination of intra-group balances in the consolidated statements of financial position: December 31, 2016 Downstream Solutions AMTBA Europe Steelton Total ASSETS Current assets: Cash and cash equivalents 13 - - 13 Trade accounts receivable and other 24 15 18 57 Inventories 18 6 15 39 Prepaid expenses and other current assets 4 1 - 5 Total current assets 59 22 33 114 Non-current assets: Property, plant and equipment 55 - 76 131 Other assets 12 2 - 14 Total non-current assets 67 2 76 145 Total assets 126 24 109 259 LIABILITIES Current liabilities: Short-term debt and current portion of long-term debt 2 - - 2 Trade accounts payable and other 30 10 9 49 Accrued expenses and other liabilities 4 6 2 12 Total current liabilities 36 16 11 63 Non-current liabilities: Long-term debt net of current portion 7 - - 7 Long-term provisions - 5 20 25 Total non-current liabilities 7 5 20 32 Total liabilities 43 21 31 95 December 31, 2015 Long Carbon Downstream facilities in Solutions Algerian 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

2.4 Investment in associates and joint arrangements

The carrying value of the Company’s investments accounted for under the equity method, at December 31, 2016 and 2015 were as follows: December 31, Category 2016 2015 Joint ventures 1,507 1,443 Associates 2,000 2,688 Individually immaterial joint ventures and associates1 790 780 Total 4,297 4,911 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, 2016 and 2015, and none of them has a carrying amount exceeding 100 at December 31, 2016 and 2015. Consolidated financial statements 79

2.4.1 Joint ventures

The following tables summarize the latest available financial information and reconcile it to the carrying amount of each of the Company’s material joint ventures at December 31, 2016 and 2015, as well as the income statement of the Company’s material joint ventures as of December 31, 2014:

December 31, 2016 Joint Ventures Calvert Macsteel Baffinland VAMA Tameh Borçelik Total Place of incorporation and operation* United States Netherlands Canada China Poland Turkey Steel Energy Manufacturing Automotive trading and Extraction of Automotive production and sale of Principal Activity steel finishing distribution iron ore steel finishing and supply steel Ownership and voting rights % at December 31, 2016 ** 50.00% 50.00% 44.54% 49.00% 50.00% 45.33% Current assets 836 636 197 230 120 404 2,423 of which cash and cash equivalents 45 77 7 75 47 39 290 Non-current assets 1,287 374 1,506 721 354 325 4,567 Current liabilities 490 312 354 362 83 254 1,855 of which trade and other payables and provisions 160 170 190 248 83 112 963 Non-current liabilities 984 41 262 302 159 45 1,793 of which trade and other payables and provisions - 3 37 - 19 - 59 Net assets 649 657 1,087 287 232 430 3,342 Company's share of net assets 325 328 484 141 116 195 1,589 Adjustments for differences in accounting policies and other 6 - (59)a - 2 (31)b (82) Carrying amount in the statements of financial position 331 328 425 141 118 164 1,507 Revenue 2,358 2,353 116 335 254 845 6,261 Depreciation and amortization (59) (1) (3) (30) (20) (20) (133) Interest income - 12 - 1 - 1 14 Interest expense (31) (9) (20) (28) (1) (7) (96) Income tax benefit (expense) - (4) (26) 18 (10) (28) (50) Net income (loss) 148 15 (43) (58) 29 75 166 Other comprehensive income (loss) - 10 - - 3 - 13 Total comprehensive income (loss) 148 25 (43) (58) 32 75 179 Cash dividends received by the Company 19 - - - 6 16 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, 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. 80 Consolidated financial statements

December 31, 2015 Joint Ventures Calvert Macsteel Baffinland VAMA Tameh Borçelik Total Place of incorporation and operation * United States Netherlands Canada China Poland Turkey Steel Development Energy Manufacturing Automotive trading and of iron ore Automotive production and sale of Principal Activity steel finishing distribution mine steel finishing and 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, 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. Consolidated financial statements 81

December 31, 2014 ArcelorMittal Gonvarri Brasil Produtos Kalagadi Joint Ventures Siderúrgicos Calvert Macsteel Manganese Baffinland VAMA Tameh Total Place of incorporation and operation * Brazil United States Netherlands South Africa Canada China Poland Production and Steel Development Energy distribution of Automotive trading and of iron ore Automotive production and Principal Activity metal products steel finishing distribution Mining mine steel finishing supply Ownership and voting rights % at December 31, 2014 ** 50.00% 50.00% 50.00% 50.00% 50.00% 49.00% 50.00% 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, United Arab Emirates and China. ** The ownership stake is equal to the voting rights percentage.

ArcelorMittal Gonvarri Brasil Kalagadi Manganese completion of the sale is subject Baffin Island in Nunavut (Canada). Produtos Siderúrgicos to various closing conditions and During 2016, ArcelorMittal’s Kalagadi Manganese (Propriety) regulatory approvals. The South shareholding in Baffinland ArcelorMittal Gonvarri Brasil Ltd (“Kalagadi Manganese”) African Competition Commission decreased from 46.08% to 44.54% Produtos Siderúrgicos S.A. is is a joint venture between approved the sale on January following a capital increase engaged in the manufacturing and ArcelorMittal and Kalahari 16, 2017. The Company expects subscribed by Nunavut Iron Ore. sale of flat rolled steel, to serve, Resource (Proprietary) Ltd that to complete the sale during the among others, the automotive, is engaged in exploring, mining, first half of 2017 and classified Calvert metal and mechanics industries. ore processing, and smelting its investment as held for sale at The entity processes and manganese in the Kalahari Basin December 31, 2016. On February 26, 2014, the distributes steel primarily in Brazil, in South Africa. In addition, the Company together with Nippon and is the result of the acquisition Company has granted loans for Steel & Sumitomo Metal of Gonvarri Brasil Produtos the funding of the mining project VAMA Corporation (“NSSMC”) completed Siderúrgicos S.A. by ArcelorMittal amounting to 78 including the acquisition of ThyssenKrupp Spain Holding`S.L. and Gonvarri accrued interest, which have been Valin ArcelorMittal Automotive Steel USA (“TK Steel USA”), a Steel Industries in 2008. As of fully impaired in 2015 (see note Steel (“VAMA”) is a joint venture steel processing plant in Calvert, December 31, 2015 the carrying 2.4.4). As of December 31, 2015 between ArcelorMittal and Alabama, United States, for a total value of ArcelorMittal Gonvarri the carrying value of Kalagadi Hunan Valin which produces consideration of 1,550 financed Brasil Produtos Siderúrgicos was as such no longer considered steel for high-end applications in through a combination of debt S.A. was no longer considered significant and therefore no the automobile industry. VAMA at the joint venture level and significant and therefore no longer longer separately disclosed. The supplies international automakers equity, of which 258 was paid separately disclosed. Company’s unrecognized share and first-tier suppliers, as well as by ArcelorMittal. The Company of accumulated losses in Kalagadi Chinese car manufacturers and concluded that it has joint Macsteel Manganese amounted to 9 for the their supplier networks. The plant control of the arrangement, AM/ year ended December 31, 2016. was inaugurated on June 15, 2014. NS Calvert (“Calvert”), together Macsteel International Holdings with NSSMC, and accounts for B.V. (“Macsteel”) is a joint venture On October 21, 2016, ArcelorMittal Baffinland its 50.00% interest in the joint between Macsteel Holdings signed an agreement with venture under the equity method. Luxembourg S.à r.l. and AMSA Kgalagadi Alloys (Proprietary) Baffinland is a joint venture The transaction includes a six- which provides the Company with Ltd for the sale of its 50.00% since October 1, 2013 between year agreement to purchase two an international network of traders investment in Kalagadi Manganese ArcelorMittal and Nunavut Iron million tonnes of slab annually and trading channels including the for a deferred consideration to Ore. Baffinland owns the Mary from TK CSA, an integrated steel shipping and distribution of steel. be paid during the life of the River project, which has direct mill complex located in Rio de mine and capped at 150. The shipping, high grade iron ore on Janeiro, Brazil, using a market- 82 Consolidated financial statements

based price formula. TK CSA has an Tameh Borçelik 2.4.2 Associates option to extend the agreement for an additional three years on On December 11, 2014, Borçelik Çelik Sanayii Ticaret The following tables summarize terms that are more favorable to ArcelorMittal and Tauron Anonim Şirketi (“Borçelik”), the financial information and the joint venture, as compared Group contributed four energy incorporated and located in reconciles it to the carrying with the initial time period. The production facilities located in Turkey, is a joint venture between amount of each of the Company’s remaining slab balance is sourced Poland and the Czech Republic ArcelorMittal and Borusan Holding material associates at December from ArcelorMittal plants in the into the new arrangement Tameh. involved in the manufacturing and 31, 2016 and 2015, as well as United States, Brazil and Mexico. The Company concluded that it sale of cold-rolled and galvanized the income statement of the ArcelorMittal is principally has joint control over Tameh and flat steel products. Company’s material associates as responsible for marketing the accounted for its 50.00% interest of December 31, 2014: product on behalf of the joint in the joint venture under the venture. Calvert serves the equity method. Tameh’s objective automotive, construction, pipe is to ensure energy supply to the and tube, service center, and Company’s steel plants in these appliance/ HVAC industries. countries as well as the utilization of steel plant gases for energy production processes.

December 31, 2016 Gonvarri Steel Associates China Oriental DHS GROUP Industries Total Financial statements reporting date Jun 30, 2015 Sep 30, 2015 Sep 30, 2015 Place of incorporation and operation * Bermuda Germany Spain Iron and steel Steel Steel Principal Activity manufacturing manufacturing manufacturing Ownership and voting rights % at December 31, 2015 46.99% 33.43% 35.00% Current assets 1,422 1,624 1,481 4,527 Non-current assets 1,504 2,999 1,178 5,681 Current liabilities 1,275 609 608 2,492 Non-current liabilities 240 1,052 299 1,591 Non controlling interests 47 132 218 397 Net assets attributable to equity holders of the parent 1,364 2,830 1,534 5,728 Company's share of net assets 641 946 537 2,124 Adjustments for differences in accounting policies and other - 17 a (51)b (34) Other adjustments ** (18) (61) (11) (90) Carrying amount in the statements of financial position 623 902 475 2,000 Revenue 1,751 1,396 2,258 5,405 Profit or loss from continuing operations 123 (91) 145 177 Net income (loss) 83 (96) 145 132 Other comprehensive income - (3) 4 1 Total comprehensive income (loss) 83 (99) 149 133 Cash dividends received by the Company - - 16 16 * The country of incorporation corresponds to the country of operation except for China Oriental whose country of operation is China. ** Other adjustments correspond to the difference between the carrying amount at December 31, 2016 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 the German GAAP financial information with the Company’s accounting policies and is 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. Consolidated financial statements 83

December 31, 2015 Gonvarri Steel Associates China Oriental DHS GROUP Gestampc Industries Stalprodukt S.A.c 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 the German GAAP financial information with the Company’s accounting policies, and is 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. 84 Consolidated financial statements

December 31, 2014 Gonvarri Steel Associates China Oriental DHS GROUP Gestampc Industries Stalprodukt S.A.a 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% 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%. a Date of the latest available financial statements is September 30, 2014.

China Oriental January 27, 2017, in order to On February 1, 2016, ArcelorMittal Stalprodukt S.A. restore the minimum free float completed the sale of its 35.00% China Oriental Group Company requirement, China Oriental issued stake in Gestamp Automoción Stalprodukt S.A. is a leading Limited (“China Oriental”) is a 586,284,000 new shares resulting (“Gestamp”) to the majority manufacturer and exporter of Chinese integrated iron and steel in a decrease of the Company’s shareholder, the Riberas family, for highly processed steel products conglomerate listed on the Hong interest from 46.99% to 39.16%. total cash consideration of €875 based in Poland. Kong Stock Exchange (“HKEx”). On Public trading resumed on million (971). The gain on disposal November 8, 2007, ArcelorMittal February 1, 2017. was recorded in income (loss) On December 16, 2015, the acquired a 28.02% interest in China from investments in associates, Company sold 356,424 shares in Oriental for a total consideration DHS GROUP joint ventures and other Stalprodukt S.A., which resulted of 644. On February 4, 2008, investments and amounted to in a decrease in the ownership upon closing of its tender offer, DHS - Dillinger Hütte Saarstahl AG 329 including the reclassification percentage from 33.77% to ArcelorMittal increased its interest (“DHS GROUP”), incorporated and of the accumulated foreign 28.47%. The Company recorded to 46.99%. On April 29, 2014, China located in Germany, is a leading exchange translation losses and a loss on disposal of 6 in income Oriental’s shares were suspended producer of heavy steel plate, unrealized losses on derivative (loss) from investments in from trading as a consequence cast slag pots and semi-finished financial instruments from other associates, joint ventures and of China Oriental not meeting products, such as pressings, comprehensive income to the other investments (see note the minimum free float listing pressure vessel heads and shell statements of operations of 90 and 2.6). As of December 31, 2015, requirement of 25% of the HKEx. In sections in Europe. The DHS 12, respectively. In addition to the the investment had a market order to restore the minimum free GROUP also includes a further cash consideration, ArcelorMittal value of 155. In 2016, following float, the Company sold a 17.40% rolling mill operated by Dillinger received a payment of €10 an additional sale of shares, the stake to ING Bank N.V. (“ING”) and France in Dunkirk (France). million (11) for the 2015 dividend. Company classified the investment Deutsche Bank Aktiengesellschaft ArcelorMittal will continue its as available-for-sale securities (see (“Deutsche Bank”) together with Gestamp supply relationship with Gestamp note 2.5). put option agreements. The through its 35.00% shareholding Company had not derecognized Gestamp Automoción (“Gestamp”) in Gonvarri Steel Industries, a 2.4.3 Other associates and joint the 17.40% stake in China Oriental is a Spanish multi-national sister company of Gestamp. ventures that are not individually as it retained its exposure to company, which is a leader in the ArcelorMittal sells coils to Gonvarri material significant potential risks and European automotive industry. Steel Industries for processing rewards of the investment The activities of Gestamp and before they pass to Gestamp The Group has interests in a through the put options. On its subsidiaries are focused and other customers. Further, number of other joint ventures April 30, 2014, Deutsche Bank on the design, development, ArcelorMittal will continue to have and associates, none of which are exercised its put option with and manufacturing of metal a board presence in Gestamp, regarded as individually material. respect to a 7.50% stake in China components for the automotive collaborate in automotive R&D and The following table summarizes Oriental. Simultaneously, the industry via stamping, tooling, remain its major steel supplier. the financial information of all Company sold this investment to assembly, welding, tailor welded individually immaterial joint Macquarie Bank and entered into blanks, and die cutting. The entity Gonvarri Steel Industries ventures and associates that are a put option arrangement with also includes other companies accounted for using the equity the latter maturing on April 30, dedicated to services such as Holding Gonvarri SL (“Gonvarri method: 2015. On April 30, 2015, both put research and development of new Steel Industries”) is dedicated to options were exercised, resulting technologies. the processing of steel. The entity in a decrease of accrued expenses is a European leader in steel service and other liabilities and prepaid centers and renewable energy expenses and other current assets components, with strong presence by 96 and 112, respectively. On in Europe and Latin America. Consolidated financial statements 85

December 31, 2016 December 31, 2015 Associates Joint Ventures Associates Joint Ventures Carrying amount of interests in associates and joint ventures 291 499 297 483 Share of: Income (loss) from continuing operations 56 (2) 11 (15) Other comprehensive income (loss) (2) 1 (8) 6 Total comprehensive income (loss) 54 (1) 3 (9) As at December 31, 2016, For the year ended December growth rate not exceeding the 2.4.5 Investments in joint there were no unrecognized 31, 2015, the Company tested average long-term growth rate for operations accumulated losses in respect its investment in Kalagadi for the relevant markets. In addition of AM RZK. The Company’s impairment and determined to the impairment of the carrying In addition to subsidiaries, joint unrecognized share of that the value in use was lower value, the Company recorded an ventures and associates as accumulated losses in AM RZK than the carrying amount. In impairment charge on the loans described above, the Company amounted to 7 for the year determining the value in use, the related to Uttam Galva for 69 and also had investments in the ended December 31, 2015. Company estimated its share in an impairment charge of 22 with following joint operations as of The Company’s unrecognized the present value (using a pre- respect of its 25.00% interest in the December 31, 2016 and 2015: share of accumulated losses in tax discount rate of 12.48%) of Northern Cape Iron Ore Mining ArcelorMittal Algérie amounted the projected future cash flows Project, an associate in South Peña Colorada to 8, and 49 for the years expected to be generated over Africa. ended December 31, 2015, and the current life-of-the-mine plan Peña Colorada is an iron ore December 31, 2014, respectively. or long term production plan. The For the year ended December mine located in Mexico in which ArcelorMittal Algérie was sold on key assumptions for the value in 31, 2014, following a revision ArcelorMittal holds a 50.00% August 7, 2016 (see note 2.3). use calculations are primarily the of business assumptions in the interest. Peña Colorada operates discount rates, capital expenditure, context of continuing growth an open pit mine as well as In 2016, the Company’s share of expected changes to average slowdown in China, the Company concentrating facility and two-line net losses has reduced the carrying selling prices, shipments and tested its investment in China pelletizing facility. amount of its 40.80% interest in direct costs during the period. Oriental for impairment on a fair the joint venture ArcelorMittal Based on the analysis of value value basis and concluded that Hibbing Taconite Mines Tubular Products Jubail (“Al Jubail”) in use, the Company recognized such fair value was lower than the to nil. Furthermore, the Company an impairment charge of 283 in carrying amount. The results of the The Hibbing Taconite Mines recognized 19 corresponding to its income (loss) from investments fair value analysis principally based in which the Company holds a share of additional losses against in associates, joint ventures and on market multiples indicated 62.30% interest are iron ore mines its 168 shareholder loans, which other investments (see note 2.6) that the carrying value recognized located in the USA and operations resulted in a carrying amount of for the full carrying amount of the was in excess of the estimated fair consist of open pit mining, such loans of 149. investment (205) and loans (78) value of the investment, which crushing, concentrating and as a result of a downward revision approximated the Company’s pelletizing. 2.4.4 Impairment of associates and of cash flow projections resulting share in China Oriental’s net equity. joint ventures from the expectation of the The recoverable amount of the I/N Tek persistence of a lower manganese Company’s investment in China For the year ended December 31, price outlook. Oriental amounted to 697. Based I/N Tek in which the Company 2016, the Company identified an on this analysis, the Company holds a 60.00% interest operates impairment indicator with respect In addition, the Company recorded recognized an impairment charge a cold-rolling mill in the United to its shareholders loans in Al an impairment charge of 69 in of 621 in income (loss) from States. Jubail. Accordingly, it performed respect of its investment in Uttam investments in associates, joint a value in use calculation but Galva Steels Ltd (“Uttam Galva”) (a ventures and other investments. Double G Coatings concluded the carrying amount manufacturer of cold rolled steel The Company classified the of the loans was recoverable. In and galvanized steel based in India measurement at fair value into ArcelorMittal holds a 50.00% addition, the Company recorded in which the Company holds a Level 3. interest in Double G Coating, a hot an impairment charge of 14 in 29.00% interest). In determining dip galvanizing and Galvalume respect of the its shareholder loan the value in use of its investment The Company is not aware of any facility in the United States. to Kalagadi, and 14 in respect of in Uttam Galva, the Company material contingent liabilities the Company’s 28.24% interest in estimated its share in the present related to associates and joint Hibbing Taconite Mines and Peña Comvex, a deep sea harbor facility value (using a pre-tax discount ventures for which it is severally Colorada are part of the Mining on the Black Sea in Romania for the rate of 13.91%) of the projected liable for all or part of the liabilities segment; other joint operations year ended December 31, 2016. future cash flows expected to be of the associates, nor are there are part of NAFTA. For the remaining investments generated by operations. The value any contingent liabilities incurred the Company concluded that no in use was based on cash flows for jointly with other investors. 2.5 Other investments impairment was required. a period of five years, which were See note 8.3 for disclosure of extrapolated for the remaining commitments related to associates The Company holds the following years based on an estimated and joint ventures. other investments:

December 31, 2016 2015 Available-for-sale securities (at fair value) 894 646 Investments accounted for at cost 32 46 Total 926 692 86 Consolidated financial statements

The following are the Company’s remeasurement of the remaining positive reserve for available- and concluded that there was no material available-for-sale interest of 21.20% and a loss of 11 for-sale investments from other impairment trigger, other than investments at December 31, 2016 and a gain of 11 resulting from the comprehensive income to the disclosed above. and 2015. reclassification of the accumulated statements of operations of 12. foreign exchange translation Unconsolidated structured entities Ereĝli Demir ve Çelik Fabrikalari losses and unrealized gains on As of December 31, 2015, the fair T.A.S. (“Erdemir”) derivative financial instruments value of ArcelorMittal’s stake in ArcelorMittal has operating lease from other comprehensive income Hunan Valin amounted to 153. arrangements for six vessels As of December 31, 2016 to the statements of operations, Unrealized gains recognized in (Panamax Bulk Carriers) involving and 2015, the fair value of respectively. other comprehensive income structured entities whose main ArcelorMittal’s remaining stake amounted to 62 for the year ended purpose is to hold legal title of in Erdemir amounted to 618 and As of December 31, 2016, the December 31, 2015. the six vessels and to lease them 441, respectively. Unrealized gains fair value of ArcelorMittal’s stake to the Company. The operating (losses) recognized in reserves in Stalprodukt S.A. amounted to On August 2, 2016, the Company lease arrangements for five vessels amounted to 183 and nil for 148. Unrealized gains recognized signed an agreement for the sale were entered in 2013 and for a the year ended December 31, in other comprehensive income of its 10.08% interest in Hunan sixth vessel in 2014. These entities 2016 and 2015, respectively. The amounted to 66 for the year ended Valin to a private equity fund. are wholly-owned and controlled Company reviewed the investment December 31, 2016. On September 14, 2016, the by a financial institution. They in Erdemir for impairment Company transferred the Hunan are funded through equity during the first quarter of 2014 Hunan Valin Valin shares and simultaneously instruments by the financial and concluded that there was a received the full proceeds of institution. prolonged decline in fair value As a result of the exercise of the 165 (RMB1,103 million) from the that remained continuously third put option on February buyer and recorded a gain of 74 as The aforesaid operating leases below cost for more than two 8, 2014 following a share swap income (loss) from investments in have been agreed for a 12 years. Accordingly, it recorded arrangement finalized on June associates, joint ventures and other year period, during which the an impairment charge of 56 in 6, 2012 between ArcelorMittal investments which corresponded Company is obliged to pay to the income (loss) from investments and Valin Group which enabled to the reclassification of structured entities minimum fees in associates, joint ventures and ArcelorMittal to exercise over accumulated unrealized gains equivalent to approximately 4 per other investments. During the the subsequent two years four from other comprehensive income year and per vessel. In addition, fourth quarter of 2015, the fair put options granted by the Valin to the statements of operations. ArcelorMittal holds call options value of Erdemir decreased further Group with respect to Hunan Valin to buy each of the six vessels and the Company accordingly shares, the Company’s interest Gerdau from the structured entities at recorded an additional impairment in Hunan Valin decreased to pre-determined dates and prices charge of 101 in income (loss) from 15.05%. Accordingly, the Company On July 14, 2015, ArcelorMittal as presented in the table below. investments in associates, joint discontinued the accounting for entered into a share swap The structured entities hold put ventures and other investments its investment under the equity agreement with Gerdau whereby options enabling them to sell for the year ended December 31, method and reclassified its interest ArcelorMittal exchanged unlisted each of the vessels at the end of 2015. as available-for-sale within other shares of Gerdau against listed the lease terms at 6 each to the investments in the statements of shares and a cash consideration Company. Stalprodukt S.A. financial position. The resulting of 28. The share swap resulted loss on disposal was recorded in in a gain of 55 recorded as Following the sale of 729,643 income (loss) from investments income (loss) from investments shares including the subsequent in associates, joint ventures and in associates, joint ventures and capital reduction of Stalprodukt other investments and amounted other investments. The unlisted S.A. during the first six months of to 76. This amount consisted of a shares were accounted for at 2016, for a total cash consideration gain of 13 on disposal of the 5% cost, whereas the exchanged of 46, ArcelorMittal’s ownership stake and the reclassification of listed shares are accounted for interest and voting rights in the accumulated positive foreign at fair value. As of December 31, Stalprodukt S.A. decreased from exchange translation difference 2016 and 2015, the fair value of 28.47% to 21.20% and from from other comprehensive income ArcelorMittal’s stake in Gerdau 28.26% to 11.61%, respectively. As to the statements of operations amounted to 99 and 36. Unrealized a result of the loss of significant of 61, offset by a loss of 150 with gains and losses recognized in influence, the Company respect to the remeasurement at other comprehensive income discontinued the accounting for fair value of the remaining interest amounted to 38 and 28 for the its investment under the equity of 15.05%. year ended December 31, 2016 method and reclassified its interest and 2015, respectively. as available-for-sale within other On August 6, 2014, the Company investments in the statements exercised its fourth and last put At December 31, 2016, the of financial position (see note option, which subsequently led to Company reviewed the 2.4). The Company recorded an the decrease in its stake in Hunan investments in Erdemir, aggregate loss on disposal of 26 Valin from 15.05% to 10.08%. The Gerdau and Stalprodukt S.A. in income (loss) from investments Company recognized a net gain of for impairment and concluded in associates, joint ventures and 62 including a gain of 64 in relation that there was no impairment other investments including a loss to the option, which was a Level trigger. At December 31, 2015, of 13 with respect to the above 2 financial instrument, a loss on the Company reviewed the mentioned transaction, a loss of disposal of 14 and a proportional investments in Erdemir, Gerdau 13 with respect to the fair value reclassification of the accumulated and Hunan Valin for impairment Consolidated financial statements 87

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 arrangements, the Company had a receivable (classified as “Other assets”) of 30 and 33 at December 31, 2016 and 2015, respectively, which does not bear interest, is forgiven upon default and will be repaid by the structured entities quarterly in arrears throughout the lease term. The outstanding balance will be used to offset payment of any interim call options, if exercised.

2.6 Income (loss) from investments in associates, joint ventures and other investments

Income (loss) from investments in associates, joint ventures and other investments for the years ended December 31, 2016, 2015 and 2014 consisted of the following:

Year ended December 31, 2016 2015 2014 Share in net earnings of equity-accounted companies 207 (59) 267 Impairment charges1 (28) (565) (677) Gain (loss) on disposal2 377 46 179 Dividend income 59 76 59 Total 615 (502) (172) 1 Includes impairment charges of 14 and 14 relating to Kalagadi and Comvex for the year ended December 31, 2016, respectively (see note 2.4.4). Mainly includes impairment charges in respect of the Company’s investments in Kalagadi, Uttam Galva and Northern Cape Iron Ore Mining Project (see note 2.4.4), 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 46.99% stake in the associate China Oriental (see note 2.4.4) for the year ended December 31, 2014. 2 Mainly includes a gain of 329 relating to the disposal of Gestamp (see note 2.4), a gain of 74 relating to the disposal of Hunan Valin (see note 2.5) and a loss of 26 relating to the disposal of Stalprodukt S.A. shares (see note 2.5) for the year ended December 31, 2016. 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 50.00% interest in Gallatin and a net loss of 14 related to the disposal of the Hunan Valin shares (see note 2.5) for the year ended December 31, 2014.

Note 3: Segment reporting

3.1 Reportable segments

The Company is organized in five operating and reportable segments, which are components engaged in business activities from which they may earn revenues and incur expenses (including revenues and expenses relating to transactions with other components of the Company), for which discrete financial information is available and whose operating results are evaluated regularly by the chief operating decision maker “CODM” to make decisions about resources to be allocated to the segment and assess its performance. As of January 1, 2016, the Group Management Board “GMB” (ArcelorMittal’s previous CODM) was replaced by the CEO Office - comprising the CEO, Mr. Lakshmi N. Mittal and the CFO, Mr. Aditya Mittal.

These operating segments include the attributable goodwill, intangible assets, property, plant and equipment, and equity method investments. They do not include cash and short-term deposits, short-term investments, tax assets and other current financial assets. Attributable liabilities are also those resulting from the normal activities of the segment, excluding tax liabilities and indebtedness but including post retirement obligations where directly attributable to the segment. The treasury function is managed centrally for the Company and is not directly attributable to individual operating segments or geographical areas.

ArcelorMittal’s segments are structured as follows:

• NAFTA represents the flat, long and tubular facilities of the Company located in North America (Canada, United States and Mexico). NAFTA produces flat products such as slabs, hot-rolled coil, cold-rolled coil, coated steel and plate. These products are sold primarily to customers in the following industries: distribution and processing, automotive, pipe and tubes, construction, packaging, and appliances. NAFTA also produces long products such as wire rod, sections, rebar, billets, blooms and wire drawing, and tubular products;

• Brazil includes the flat operations of Brazil and the long and tubular operations of Brazil and neighboring countries including Argentina, Costa Rica and Venezuela. Flat products include slabs, hot-rolled coil, cold-rolled coil and coated steel. Long products consist of wire rod, sections, bar and rebar, billets, blooms and wire drawing;

• Europe is the largest flat steel producer in Europe, with operations that range from Spain in the west to Romania in the east, and covering the flat carbon steel product portfolio in all major countries and markets. Europe produces hot-rolled coil, cold-rolled coil, coated products, tinplate, plate and slab. These products are sold primarily to customers in the automotive, general industry and packaging industries. Europe produces 88 Consolidated financial statements

also long products consisting of sections, wire rod, rebar, billets, blooms and wire drawing, and tubular products. In addition, it includes Distribution Solutions, primarily an in-house trading and distribution arm of ArcelorMittal. Distribution Solutions also provides value-added and customized steel solutions through further steel processing to meet specific customer requirements;

• ACIS produces a combination of flat, long products and tubular products. Its facilities are located in Asia, Africa and Commonwealth of Independent States; and

• Mining comprises all mines owned by ArcelorMittal in the Americas (Canada, United States, Mexico and Brazil), Asia (Kazakhstan), Europe (Ukraine and Bosnia & Herzegovina) and Africa (Liberia). It supplies the Company and third party customers with iron ore and coal.

The following table summarizes certain financial data relating to ArcelorMittal’s operations in its different reportable segments.

NAFTA Brazil Europe ACIS Mining Others* Elimination Total 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 and amortization 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 and amortization 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 Year ended December 31, 2016 Sales to external customers 15,769 5,526 28,999 5,675 781 41 - 56,791 Intersegment sales** 37 697 273 210 2,333 260 (3,810) - Operating income (loss) 2,002 614 1,270 211 366 (208) (94) 4,161 Depreciation and amortization 549 258 1,184 311 396 23 - 2,721 Impairment - - 49 156 - - - 205 Capital expenditures 445 237 951 397 392 22 - 2,444

* 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.

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

Year ended December 31, 2016 2015 2014 Operating income (loss) 4,161 (4,161) 3,034 Loss from investments in associates and joint ventures 615 (502) (172) Financing costs - net (2,056) (2,858) (3,382) Income (loss) before taxes 2,720 (7,521) (520) Income tax expense 986 902 454 Net loss (including non-controlling interests) 1,734 (8,423) (974)

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

3.2 Geographical information

Geographical information, by country or region, is separately disclosed and represents ArcelorMittal’s most significant regional markets. Attributed assets are operational assets employed in each region and include items such as pension balances that are specific to a country. Unless otherwise stated in the table heading as a segment disclosure, these disclosures are specific to the country or region stated. They do not include goodwill, deferred tax assets, other investments or receivables and other non-current financial assets. Attributed liabilities are those arising within each region, excluding indebtedness. Consolidated financial statements 89

Sales (by destination)

Year ended December 31, 2016 2015 2014 Americas United States 12,284 13,619 17,312 Brazil 3,506 3,809 6,299 Canada 2,818 2,913 3,462 Mexico 1,806 1,913 2,216 Argentina 858 1,370 1,161 Venezuela 105 1,334 612 Others 830 951 1,235 Total Americas 22,207 25,909 32,297 Europe Germany 4,768 5,473 6,649 France 3,655 3,743 4,499 Spain 3,015 3,406 3,907 Poland 2,997 3,023 3,815 Italy 2,067 2,278 2,701 Turkey 1,789 1,962 2,576 United Kingdom 1,159 1,246 1,480 Czech Republic 1,107 1,476 1,579 Netherlands 1,030 867 917 Belgium 929 1,108 1,268 Russia 688 638 1,216 Romania 526 583 728 Others 3,886 4,024 4,948 Total Europe 27,616 29,827 36,283 Asia & Africa South Africa 2,026 2,111 2,629 Egypt 499 404 564 Morocco 498 533 696 Rest of Africa 658 945 1,374 China 549 557 941 Kazakhstan 350 456 668 South Korea 184 242 593 India 85 197 225 Rest of Asia 2,119 2,397 3,012 Total Asia & Africa 6,968 7,842 10,702 Total 56,791 63,578 79,282

Revenues from external customers attributed to the country of domicile (Luxembourg) were 88, 85, 53 for the years ended December 31, 2016, 2015 and 2014, respectively. 90 Consolidated financial statements

Non-current assets* per significant country:

Year ended December 31, 2016 2015 Americas Canada 5,208 5,274 Brazil 4,471 3,770 United States 4,209 4,289 Mexico 906 952 Argentina 152 179 Venezuela 43 376 Others 21 24 Total Americas 15,010 14,864 Europe France 4,194 4,468 Belgium 2,458 2,493 Germany 2,395 2,546 Poland 2,112 2,140 Ukraine 2,110 2,439 Spain 1,797 1,945 Luxembourg 1,142 1,266 Czech Republic 585 632 Romania 573 610 Bosnia and Herzegovina 182 202 Italy 158 174 Others 236 251 Total Europe 17,942 19,166 Asia & Africa Kazakhstan 1,223 1,168 South Africa 788 767 Morocco 104 118 Liberia 49 25 Others 116 121 Total Africa & Asia 2,280 2,199 Unallocated assets 17,663 18,291 Total 52,895 54,520

*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, 2016 2015 2014 Flat products 34,215 36,226 44,863 Long products 12,104 13,996 18,671 Tubular products 1,500 2,809 2,518 Mining products 781 824 1,319 Others 8,191 9,723 11,911 Total 56,791 63,578 79,282 Consolidated financial statements 91

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

Cost of sales recognized in the years ended December 31, 2016, 2015 and 2014 is as follows:

Year ended December 31, 2016 2015 2014 Materials 34,276 41,788 50,760 Labor costs* 7,572 9,125 10,722 Logistic expenses 3,760 4,252 5,020 Depreciation and amortization 2,721 3,192 3,939 Impairment 205 4,764 264 Other 1,894 2,075 2,583 Total 50,428 65,196 73,288 * Includes a 832 gain relating to changes in post-employment benefit plans in the United States (see note 7.2)

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

December 31, 2016 2015 Gross amount 3,158 2,849 Allowance for doubtful accounts (184) (170) Total 2,974 2,679

The carrying amount of the customer’s credit quality and to are reviewed periodically. There are Exposure to credit risk by trade accounts receivable and define credit limits by customer. no customers who represent more reportable segment other approximates fair value. For all significant customers the than 5% of the total balance of Before granting credit to any new credit terms must be approved trade accounts receivable. The maximum exposure to credit customer, ArcelorMittal uses an by the credit committees of each risk for trade accounts receivable internally developed credit scoring individual segment. Limits and by reportable segment at system to assess the potential scoring attributed to customers December 31 is as follows:

December 31, 2016 2015 NAFTA 308 277 Brazil 693 610 Europe 1,464 1,447 ACIS 395 274 Mining 114 69 Other activities - 2 Total 2,974 2,679 92 Consolidated financial statements

Aging of trade accounts receivable

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

December 31, 2016 2015 Gross Allowance Total Gross Allowance Total Not past due 2,476 (6) 2,470 1,966 (6) 1,960 Overdue 1-30 days 292 (1) 291 335 (2) 333 Overdue 31-60 days 63 (1) 62 106 (1) 105 Overdue 61-90 days 32 (1) 31 47 (1) 46 Overdue 91-180 days 50 (6) 44 114 (2) 112 More than 180 days 245 (169) 76 281 (158) 123 Total 3,158 (184) 2,974 2,849 (170) 2,679

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, 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

Balance as of December 31, 2015 Additions Deductions/ Releases Foreign exchange and others Balance as of December 31, 2016 170 34 (25) 5 184

The Company has established accounts receivable) recognized based on normal capacity with During the current year, a number of programs for in the consolidated statements the remaining costs incurred the Company modified the sales without recourse of trade of operations for the years ended recorded as a component of consolidated statements of cash accounts receivable to various December 31, 2016, 2015 and cost of sales in the consolidated flows to present the change in financial institutions (referred 2014 were 106, 116 and 150, statements of operations. inventories at their net realizable to as True Sale of Receivables respectively. value. Accordingly, amounts (“TSR”)). Through the TSR Net realizable value represents for the year ended December programs, certain operating 4.4 Inventories the estimated selling price at 31, 2016, 2015 and 2014 were subsidiaries of ArcelorMittal which the inventories can be reclassified for (905), (637) surrender the control, risks Inventories are carried at the realized in the normal course and (276) from “write-downs and benefits associated with lower of cost and net realizable of business after allowing (reversal) of inventories to net the accounts receivable sold; value. Cost is determined using for the cost of conversion realizable value, provisions therefore, the amount of the average cost method. Costs from their existing state to a and other non-cash operating receivables sold is recorded as of production in process and finished condition and for the expenses net” to “inventories”, a sale of financial assets and finished goods include the cost of marketing, selling, and respectively. the balances are removed from purchase costs of raw materials distribution. Net realizable value the consolidated statements of and conversion costs such as is estimated based on the most Inventories, net of allowance for financial position at the moment direct labor and an allocation of reliable evidence available at the slow-moving inventory, excess of of sale. The total amount of fixed and variable production time the estimates were made of cost over net realizable value and receivables sold under TSR overheads. Raw materials and the amount that the inventory is obsolescence of 1,097 and 1,707 programs and derecognized in spare parts are valued at cost, expected to realize, taking into as of December 31, 2016 and accordance with IAS 39 for the inclusive of freight, shipping, account the purpose for which 2015, respectively, are comprised years ended 2016, 2015 and 2014 handling as well as any other the inventory is held. of the following: was $33.5 billion, $33.1 billion costs incurred in bringing the and $37.8 billion, respectively inventories to their present Previous write-downs (with amounts of receivables sold location and condition. Interest are reversed in case the converted to U.S. dollars at the charges, if any, on purchases circumstances that previously monthly average exchange rate). have been recorded as financing caused inventories to be written Expenses incurred under the TSR costs. Costs incurred when down below cost no longer exist. programs (reflecting the discount production levels are abnormally granted to the acquirers of the low are capitalized as inventories

December 31, 2016 2015 Finished products 4,861 4,777 Production in process 3,264 2,971 Raw materials 5,141 4,032 Manufacturing supplies, spare parts and other 1,468 1,644 Total 14,734 13,424 Note 4.2 discloses the cost of inventories recognized as an expense during the year. Consolidated financial statements 93

The movement in the inventory reserve is as follows:

Balance as of December 31, 2013 Additions* Deductions/Releases** Foreign exchange and others Balance as of December 31, 2014 1,495 459 (491) (170) 1,293

Balance as of December 31, 2014 Additions* Deductions/ Releases** Foreign exchange and others Balance as of December 31, 2015 1,293 1,256 (637) (205) 1,707

Balance as of December 31, 2015 Additions* Deductions/ Releases** Foreign exchange and others Balance as of December 31, 2016 1,707 473 (964) (119) 1,097

* Additions refer to write-downs of inventories including those utilized or written back during the same financial year. ** Deductions/releases correspond to write-backs and utilizations related to the current and prior periods. Prior period figures have been adjusted retrospectively.

4.5 Prepaid expenses and other current assets Prepaid expenses and other current assets consisted of the following:

December 31, 2016 2015 VAT receivables 672 850 Income tax receivable 111 115 Derivative financial instruments 243 128 Prepaid expenses and non-trade receivables 369 406 Other1 270 360 Total 1,665 1,859 1 Other includes mainly advances to employees, accrued interest, amounts receivable from public authorities and other miscellaneous receivables.

4.6 Other assets Other assets consisted of the following:

December 31, 2016 2015 Financial amounts receivable 297 166 Long-term VAT receivables 196 197 Cash guarantees and deposits 187 181 Accrued interest 91 74 Assets in pension funds1 21 18 Income tax receivable 55 9 Derivative financial instruments 189 90 Other2 317 185 Total 1,353 920 1 The pension funds are mainly related to units in Canada. 2 Other mainly includes receivables from public authorities and receivables from the sale of fixed assets.

4.7 Trade accounts payable and agreements. The carrying value which resulted in 1,439 being ended December 31, 2016, 2015 other of trade accounts payable reclassified from “accrued and 2014, respectively. approximates fair value. expenses and other liabilities” Trade accounts payable are to “trade accounts payable and 4.8 Accrued expenses and other obligations to pay for goods During the current year other” at December 31, 2015. liabilities that have been acquired in the the Company modified the In addition, amounts in the ordinary course of business from presentation of collection under consolidated statements of cash Accrued expenses and other suppliers. Trade accounts payable TSR programs (1,385 at December flows were similarly reclassified, liabilities are comprised of the have maturities from 15 to 180 31, 2016) to more appropriately which resulted in 80, (279) and following as of December 31: days depending on the type of reflect the nature of these 258 being reclassified from “other material, the geographic area in liabilities. The comparative amount working capital and provisions which the purchase transaction in the consolidated balance sheets movements” to “trade accounts occurs and the various contractual was reclassified for consistency, payable and other” for the years December 31, 2016 2015 Accrued payroll and employee related expenses 1,560 1,568 Accrued interest and other payables 781 1,026 Payable from acquisition of intangible, tangible & financial assets 833 852 Other amounts due to public authorities 504 559 Derivative financial instruments 226 133 Unearned revenue and accrued payables 39 56 Total 3,943 4,194 94 Consolidated financial statements

Note 5: Goodwill, intangible and thangible assets 5.1 Goodwill and intangible assets The carrying amounts of goodwill and intangible assets are summarized as follows:

December 31, 2016 2015 Goodwill on acquisitions 5,248 5,143 Concessions, patents and licenses 252 266 Customer relationships and trade marks 120 170 Other 31 13 Total 5,651 5,592

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:

Impairment and Foreign exchange reduction of differences and other December 31, 2014 goodwill movements Divestments December 31, 2015 NAFTA 2,336 - (127) - 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

Impairment and Foreign exchange reduction of differences and other December 31, 2015 goodwill movements Divestments1 December 31, 2016 NAFTA 2,209 - 6 (13) 2,202 Brazil 1,426 - 242 - 1,668 Europe 547 - (16) (2) 529 ACIS 961 - (112) - 849 Total 5,143 - 120 (15) 5,248

1 See note 2.3.1

Intangible assets

Intangible assets are recognized only when it is probable that the expected future economic benefits attributable to the assets will accrue to the Company and the cost can be reliably measured. Intangible assets acquired separately by ArcelorMittal are initially recorded at cost and those acquired in a business combination are initially recorded at fair value at the date of the business combination. These primarily include the cost of technology and licenses purchased from third parties and operating authorizations granted by governments or other public bodies (concessions). Intangible assets are amortized on a straight-line basis over their estimated economic useful lives, which typically do not exceed five years. Amortization is included in the consolidated statements of operations as part of depreciation.

ArcelorMittal’s industrial sites which are regulated by the European Directive 2003/87/EC of October 13, 2003 on carbon dioxide (“CO2”) emission rights, effective as of January 1, 2005, are located primarily in Belgium, Czech Republic, France, Germany, Luxembourg, Poland, Romania and Spain. The emission rights allocated to the Company on a no-charge basis pursuant to the annual national allocation plan are recorded at nil value and purchased emission rights are recorded at cost. Gains and losses from the sale of excess rights are recognized in cost of sales in the consolidated statements of operations. Consolidated financial statements 95

Other intangible assets are summarized as follows:

Concessions, Customer patents and relationships licenses and trade marks Other Total Cost 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 assets ** (92) - - (92) At December 31, 2015 730 1,077 36 1,843 Acquisitions 5 - 30 35 Disposals (2) - (5) (7) Foreign exchange differences (1) 22 (1) 20 Transfers and other movements * 15 3 (4) 14 Fully amortized intangible assets ** (71) (2) - (73) At December 31, 2016 676 1,100 56 1,832

Accumulated amortization and impairment losses 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 assets ** (92) - - (92) At December 31, 2015 464 907 23 1,394 Amortization charge 28 60 5 93 Foreign exchange differences 3 15 (1) 17 Transfers and other movements - - (2) (2) Fully amortized intangible assets ** (71) (2) - (73) At December 31, 2016 424 980 25 1,429

Carrying amount At December 31, 2015 266 170 13 449 At December 31, 2016 252 120 31 403

* Transfers and other movements correspond mainly to transfer from assets under construction into patents and licenses in 2016. ** Fully amortized assets correspond mainly to licenses in 2016 and to concessions in 2015.

Research and development costs not meeting the criteria for capitalization are expensed as incurred. These costs amounted to 239, 227 and 259 in the years ended December 31, 2016, 2015, and 2014, respectively and were recognized in selling, general and administrative expenses.

5.2 Property, plant and equipment and biological assets

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 96 Consolidated financial statements

During 2014, the Company deployment of these practices Mining assets comprise: estimates of reserves may change performed a review of the useful across the Company’s principal from period to period. Changes in lives of its assets and determined production units. Depreciation • Mineral rights acquired; reported reserves may affect the its maintenance and operating charge for the year ended • Capitalized developmental Company’s financial results and practices enabled a change in December 31, 2014 decreased stripping (as described below financial position in a number of the useful lives of plant and by 702 as a result of changes in in “Stripping and overburden ways, including the following: equipment. Maintenance practices estimated useful lives. removal costs”). employed served to preserve and • Asset carrying amounts may extend the operating life of certain Major improvements, which add Property, plant and equipment be affected due to changes in of these assets, while operating to productive capacity or extend used in mining activities is estimated future cash flows. practices in the current economic the life of an asset, are capitalized, depreciated over its useful life • Depreciation, depletion and environment also contributed to while repairs and maintenance or over the remaining life of the amortization charged in the the extension of asset useful life are expensed as incurred. Where mine, if shorter, and if there is no consolidated statements of beyond previous estimates. The a tangible fixed asset comprises alternative use. For the majority of operations may change where Company thus revised the useful major components having assets used in mining activities, the such charges are determined by lives due to its determination that different useful lives, these economic benefits from the asset the units of production basis, or certain of its existing assets had components are accounted for as are consumed in a pattern which is where the useful economic lives been used longer than previously separate items. linked to the production level and of assets change. anticipated and therefore, the accordingly, assets used in mining • Overburden removal costs estimated useful lives of certain Property, plant and equipment activities are primarily depreciated recognized in the consolidated plant and equipment were under construction is recorded on a units-of-production basis. A statements of financial position lengthened. as construction in progress until unit-of-production is based on the or charged to the consolidated it is ready for its intended use; available estimate of proven and statements of operations may The Company’s annual review thereafter it is transferred to the probable reserves. change due to changes in of useful lives leverages on related class of property, plant and stripping ratios or the units of the experience gained from equipment and depreciated over Capitalization of pre-production production basis of depreciation. the above mentioned review, its estimated useful life. Interest expenditures ceases when the • Decommissioning, site any significant change in the incurred during construction is mining property is capable of restoration and environmental expected pattern of consumption capitalized if the borrowing cost commercial production as it is provisions may change where embodied in the asset and is directly attributable to the intended by management. General changes in estimated reserves the specialized knowledge of construction. Gains and losses on administration costs that are not affect expectations about the ArcelorMittal’s network of chief retirement or disposal of assets are directly attributable to a specific timing or cost of these activities. technical officers. The chief recognized in cost of sales. exploration area are charged to technical officer network includes the consolidated statements of Stripping and overburden removal engineers with facility-specific Property, plant and equipment operations. costs expertise relating to plant and acquired by way of finance leases equipment used in the principal is stated at an amount equal to Mining Reserves In open pit and underground production units of the Company’s the lower of the fair value and the mining operations, it is often operations. In performing this present value of the minimum Reserves are estimates of the necessary to remove overburden review, the Company gathered lease payments at the inception amount of product that can and other waste materials to and evaluated data, including of the lease. Each lease payment be economically and legally access the deposit from which commissioning dates, designed is allocated between the finance extracted from the Company’s minerals can be extracted. This capacities, maintenance records charges and a reduction of the properties. In order to estimate process is referred to as stripping. and programs, and asset lease liability. The interest element reserves, estimates are required Stripping costs can be incurred performance history, among of the finance cost is charged to for a range of geological, technical before the mining production other attributes. In accordance the consolidated statements of and economic factors, including commences (“developmental with IAS 16, Property, Plant operations over the lease period quantities, grades, production stripping”) or during the and Equipment, the Company so as to achieve a constant rate of techniques, recovery rates, production stage (“production considered this information at the interest on the remaining balance production costs, transport costs, stripping”). level of components significant of the liability. commodity demand, commodity in relation to the total cost of the prices and exchange rates. A mine can operate several open item of plant and equipment. The residual values and useful lives pits that are regarded as separate Other factors the Company of property, plant and equipment Estimating the quantity and/or operations for the purpose of mine considered in its determination of are reviewed at each reporting grade of reserves requires the size, planning and production. In this useful lives included the expected date and adjusted if expectations shape and depth of ore bodies case, stripping costs are accounted use of the assets, technical or differ from previous estimates. to be determined by analyzing for separately, by reference to the commercial obsolescence, and Depreciation methods applied to geological data such as drilling ore extracted from each separate operational factors that led to property, plant and equipment samples. This process may require pit. If, however, the pits are highly improvements in monitoring and are reviewed at each reporting complex and difficult geological integrated for the purpose of process control that contribute date and changed if there has judgments to interpret the data. mine planning and production, to longer asset lives. In addition, been a significant change in the stripping costs are aggregated. the Company considered the expected pattern of consumption Because the economic accumulated technical experience of the future economic benefits assumptions used to estimate The determination of whether and knowledge sharing programs embodied in the asset. reserves change from period to multiple pit mines are considered that allowed for the exchange period, and because additional separate or integrated operations of best practices within the chief geological data is generated depends on each mine’s specific technical officer network and the during the course of operations, circumstances. The following Consolidated financial statements 97

factors would point towards the (“stripping activity assets”) to the when management has a high component of property, plant stripping costs for the individual extent it is probable that future degree of confidence in the and equipment. All subsequent pits being accounted for economic benefit in terms of project’s economic viability and it development expenditures separately: improved access to ore will flow to is probable that future economic are capitalized and classified the Company, the components of benefits will flow to the Company. as construction in progress. On • If mining of the second and the ore body for which access has completion of development, all subsequent pits is conducted been improved can be identified Capitalized exploration and assets included in construction consecutively with that of the and the costs relating to the evaluation expenditures in progress are individually first pit, rather than concurrently. stripping activity associated with are generally recorded as a reclassified to the appropriate • If separate investment decisions that component can be measured component of property, plant and category of property, plant and are made to develop each pit, reliably. equipment at cost less impairment equipment and depreciated rather than a single investment charges, unless their nature accordingly. decision being made at the All stripping costs assets (either requires them to be recorded as outset. stripping activity assets or an intangible asset. As the asset Biological assets • If the pits are operated as capitalized developmental is not available for use, it is not separate units in terms of mine stripping costs) are presented depreciated and all capitalized Biological assets are part of the planning and the sequencing within a specific “mining assets” exploration and evaluation Brazil operating segment and of overburden and ore mining, class of property, plant and expenditure is monitored for consist of eucalyptus forests rather than as an integrated unit. equipment and then depreciated indications of impairment. To the located in the Brazilian state of • If expenditures for additional on a units-of-production basis. extent that capitalized expenditure Minas Gerais exclusively from infrastructure to support the is not expected to be recovered, renewable plantations and second and subsequent pits are Exploration and evaluation it is recognized as an expense in intended for the production of relatively large. expenditure the consolidated statements of charcoal to be utilized as fuel • If the pits extract ore from operations. and a source of carbon in the separate and distinct ore bodies, Exploration and evaluation direct reduction process of pig rather than from a single ore activities involve the search Cash flows associated with iron production in some of the body. for iron ore and coal resources, exploration and evaluation Company’s blast furnaces in Brazil. the determination of technical expenditure are classified as The relative importance of each feasibility and the assessment operating activities when they Biological assets are measured at factor is considered by local of commercial viability of an are related to expenses or as an their fair value, net of estimated management to determine identified resource. Exploration investing activity when they are costs to sell at the time of harvest. whether the stripping costs should and evaluation activities include: related to a capitalized asset in the The fair value is determined based be attributed to the individual pit consolidated statements of cash on the discounted cash flow or to the combined output from • researching and analyzing flows. method, taking into consideration the several pits. historical exploration data; the cubic volume of wood, • conducting topographical, Development expenditure segregated by plantation year, Developmental stripping costs geological, geochemical and and the equivalent sales value contribute to the future economic geophysical studies; Development is the establishment of standing trees. The average benefits of mining operations • carrying out exploratory drilling, of access to the mineral reserve sales price was estimated based when the production begins and trenching and sampling and other preparations for on domestic market prices. In so are capitalized as tangible activities; commercial production. determining the fair value of assets (construction in progress), • drilling, trenching and sampling Development activities often biological assets, a discounted whereas production stripping is activities to determine the continue during production and cash flow model was used, with a a part of on-going activities and quantity and grade of the include: harvest cycle of six to seven years. commences when the production deposit; stage of mining operations begins • examining and testing extraction • sinking shafts and underground and continues throughout the life methods and metallurgical or drifts (often called mine of a mine. treatment processes; and, development); • detailed economic feasibility • making permanent excavations; Capitalization of developmental evaluations to determine • developing passageways and stripping costs ends when the whether development of the rooms or galleries; commercial production of the reserves is commercially justified • building roads and tunnels; and minerals commences. and to plan methods for mine • advance removal of overburden development. and waste rock. Production stripping costs are incurred to extract the ore in the Exploration and evaluation Development (or construction) form of inventories and / or to expenditure is charged to the also includes the installation improve access to an additional consolidated statements of of infrastructure (e.g., roads, component of an ore body operations as incurred except utilities and housing), machinery, or deeper levels of material. in the following circumstances, equipment and facilities. Production stripping costs are in which case the expenditure accounted for as inventories is capitalized: (i) the exploration When reserves are determined to the extent the benefit from and evaluation activity is within and development is approved, production stripping activity is an area of interest which was expenditures capitalized as realized in the form of inventories. previously acquired in a business exploration and evaluation are Production stripping costs are combination and measured at reclassified as construction in recognized as a non-current asset fair value on acquisition; or (ii) progress and are reported as a 98 Consolidated financial statements

Property, plant and equipment and biological assets are summarized as follows:

Land, buildings and Machinery Construction Mining Improvements and equipment 2 in progress Assets Total Cost At December 31, 2014 13,830 54,008 4,546 4,087 76,471 Additions 24 305 2,446 18 2,793 Foreign exchange differences (2,196) (11,205) (810) (594) (14,805) Disposals (104) (980) (6) (4) (1,094) Transfers to assets held for sale (note 2.3) (66) (518) (11) - (595) Other movements 1 244 2,324 (2,655) 152 65 At December 31, 2015 11,732 43,934 3,510 3,659 62,835 Additions 16 299 2,074 37 2,426 Foreign exchange differences (606) (1,122) (57) (13) (1,798) Disposals (129) (1,386) (24) (4) (1,543) Divestments (note 2.3) (64) (186) (4) - (254) Transfers to assets held for sale (note 2.3) (3) (97) (18) - (118) Other movements 1 162 1,875 (2,224) 72 (115) At December 31, 2016 11,108 43,317 3,257 3,751 61,433

Accumulated depreciation and impairment At December 31, 2014 3,957 24,243 142 1,536 29,878 Depreciation charge for the year 367 2,481 - 235 3,083 Impairment (note 5.3) 179 1,530 940 1,104 3,753 Disposals (83) (899) (4) (4) (990) Foreign exchange differences (1,039) (6,679) (19) (379) (8,116) Transfers to assets held for sale (note 2.3) (40) (499) (1) - (540) Other movements 1 3 43 2 (61) (13) At December 31, 2015 3,344 20,220 1,060 2,431 27,055 Depreciation charge for the year 339 2,178 - 111 2,628 Impairment (note 5.3) (14) 219 - - 205 Disposals (103) (1,336) (24) (9) (1,472) Foreign exchange differences (414) (1,083) (15) (1) (1,513) Divestments (note 2.3) (14) (168) - - (182) Transfers to assets held for sale (note 2.3) - (63) - - (63) Other movements 1 - 13 (28) (41) (56) At December 31, 2016 3,138 19,980 993 2,491 26,602

Carrying amount At December 31, 2015 8,388 23,714 2,450 1,228 35,780 At December 31, 2016 7,970 23,337 2,264 1,260 34,831

1 Other movements predominantly represent transfers from construction in progress to other categories and retirement of fully amortized assets. 2 Machinery, equipment and other includes biological assets of 49, 54 and 95 as of December 31, 2016 , 2015 and 2014 respectively, and bearer plants of 36, 26 and 33 as of December 31, 2016 , 2015 and 2014 respectively. The carrying amount of Lease arrangements classified as finance leases. On in the consolidated statements temporarily idle property, plant initial recognition, the leased of financial position. Payments and equipment at December 31, The Company may enter into asset and its related liability are made under operating leases 2016 and 2015 was, respectively, arrangements that do not take measured at an amount equal to are recognized in cost of sales in 359 and 368 including 298 and 253 the legal form of a lease, but may the lower of its fair value and the the consolidated statements of in Brazil, 43 and 80 in NAFTA and contain a lease. This will be the present value of the minimum operations on a straight-line basis 18 and 35 in the Europe segment, case if the following two criteria lease payments. Subsequent to over the lease terms. respectively. are met: initial recognition, the asset is accounted for in accordance with The carrying amount of capitalized The carrying amount of property, • The fulfillment of the the accounting policy applicable leases was 467 and 552 as of plant and equipment retired arrangement is dependent on to that asset while the minimum December 31, 2016 and 2015, from active use and not classified the use of a specific asset and lease payments are apportioned respectively. The 467 and 552 as held for sale was 75 and • The arrangement conveys a right between financing costs and include 421 and 513 related to 74 at December 31, 2016 and to use the asset. reduction of the lease liability. machinery and equipment and 46 2015, respectively. Such assets and 39 to buildings respectively. are carried at their recoverable Assets under lease arrangements Assets held under lease amount. which transfer substantially arrangements that are not finance The total future minimum lease all of the risks and rewards of leases are classified as operating payments related to finance leases ownership to the Company are leases and are not recognized are as follows: Consolidated financial statements 99

The total future minimum lease payments related to finance leases are as follows: 2017 133 2018 – 2021 467 2022 and beyond 221 Total 821 The present value of the future minimum lease payments was 529 and 602 for the year ended December 31, 2016 and 2015, respectively. The 2016 calculation is based on an average discount rate of 13.1% (13.1% in 2015) considering maturities from 1 to 15 years (from 1 to 16 years in 2015) including the renewal option when intended to be exercised.

5.3 Impairment of intangible assets, including goodwill, and tangible assets

Impairment charges recognized for the years ended December 31, 2016, 2015 and 2014 were as follows:

Year ended December 31, Type of asset 2016 2015 2014 Goodwill - 854 - Intangible assets - 157 - Tangible assets 205 3,753 264 Total 205 4,764 264 Impairment test of goodwill units are tested first and any expected changes to average Company extrapolates cash flows impairment of the assets is selling prices, shipments and for the remaining years based on Goodwill is tested for impairment recorded prior to the testing of direct costs during the period. an estimated growth rate of 2%. annually, as of October 31 goodwill. Assumptions for average selling This rate does not exceed the or whenever changes in prices and shipments are based average long-term growth rate for circumstances indicate that the The recoverable amounts of the on historical experience and the relevant markets. carrying amount may not be GCGUs are mainly determined expectations of future changes recoverable, at the level of the based on their value in use. The in the market. In addition, with Management estimates discount groups of cash-generating units value in use of each GCGU is respect to raw material price rates using pre-tax rates that (“GCGU”) which correspond determined by estimating future assumptions, the Company reflect current market rates for to the operating segments cash flows. The 2016 impairment applied a range ($/t) of $48 to $63 investments of similar risk. The representing the lowest level test of goodwill did not include for iron ore and $110 to $224 for rate for each GCGU was estimated at which goodwill is monitored the GCGU corresponding to the coking coal. Cash flow forecasts from the weighted average cost for internal management Mining segment as goodwill adjusted for the risks specific to of capital of producers, which purposes. Whenever the cash- allocated to this GCGU was the tested assets are derived from operate a portfolio of assets similar generating units comprising the fully impaired in 2015. The key the most recent financial plans to those of the Company’s assets. operating segments are tested assumptions for the value in approved by management for Once recognized, impairment for impairment at the same time use calculations are primarily the next five years. Beyond the losses for goodwill are not as goodwill, the cash-generating the discount rates, growth rates, specifically forecasted period, the reversed.

NAFTA Brazil Europe ACIS GCGU weighted average pre-tax discount rate used in 2016 (in %) 11.7 16.0 10.9 18.7

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 reasonably possible changes in which are volatile, reflecting selling prices in the model are There was no impairment charge key assumptions could cause an the cyclical nature of the global expected to increase in 2017 due recognized with respect to impairment loss to be recognized steel industry, developments to higher raw material prices and goodwill following the Company’s in respect of ACIS and the Brazil in particular steel consuming stabilize subsequently in line with impairment test as of October segments. industries and macroeconomic long-term raw material prices. 31, 2016. The total value in use trends of emerging markets, such calculated for all GCGUs decreased ACIS produces a combination of as economic growth and foreign The Brazil segment produces overall in 2016 as compared to flat and long products. Its facilities exchange rates. Discount rates a combination of flat and long 2015. are located in Asia, Africa and may be affected by changes products. Its facilities are mainly Commonwealth of Independent in countries’ specific risks, in located in Brazil and Argentina. In validating the value in use States. ACIS is significantly self- particular in Ukraine due to the The Company believes that sales determined for the GCGUs, the sufficient in raw materials. The current political and economic volumes, prices, discount rates Company performed a sensitivity Company believes that sales situation. The ACIS value in use and foreign exchange rates are the analysis of key assumptions volumes, prices, discount rates model anticipates a limited key assumptions most sensitive to used in the discounted cash- and foreign exchange rates increase in sales volumes in change. It is also exposed to export flow model (such as discount are the key assumptions most 2017 compared to 2016 (13.3 markets and international steel rates, average selling prices, sensitive to change. ACIS is also million tonnes for the year ended prices which are volatile, reflecting shipments and terminal growth exposed to export markets December 31, 2016) and marginal the cyclical nature of the global rate). The Company believes that and international steel prices improvements thereafter. Average steel industry, developments 100 Consolidated financial statements

in particular steel consuming declines in steel consumption and 2016 (10.8 million tonnes for the earnings in every year of initial industries and macroeconomic steel prices but where a rebound year ended December 31, 2016) five-year period and perpetuity, trends of emerging markets, such in confidence following moves and continuous improvements at the GCGU level, assuming as economic growth and foreign to alleviate political uncertainty, thereafter. Average selling prices unchanged values for the other exchange rates. Discount rates combined with improved terms in the model are expected to assumptions, would cause the may be affected by changes of trade, helped to slow the increase in 2017 following higher recoverable amount to equal in countries’ specific risks, in pace of output contraction. raw material prices and adjust to a respective carrying value as of the particular in Brazil, which suffered The Brazil value in use model stable level subsequently. impairment test date (i.e.: October in 2016 a second consecutive anticipates an increase in sales The following changes in key 31, 2016). year of recession with significant volumes in 2017 compared to assumptions in projected ACIS Brazil Excess of recoverable amount over carrying amount 705 555 Increase in pre-tax discount rate (change in basis points) 191 93 Decrease in average selling price (change in %) 1.72 1.03 Decrease in shipments (change in %) 5.10 2.36 Decrease in terminal growth rate used in for the years beyond the five year plan (change in basis points) 305 113

Impairment test of intangible In estimating its value in use, also be an operating subsidiary. Impairment charges relating to assets the estimated future cash flows Further, a manufacturing facility property, plant and equipment are discounted to their present may be operated in concert with were as follows for the years ended In 2015, in connection with value using a pre-tax discount another facility with neither facility December 31, 2016, 2015 and management’s annual test for rate that reflects current market generating cash flows that are 2014: impairment of goodwill as of assessments of the time value of largely independent from the cash October 31, 2015, intangible assets money and the risks specific to the flows of the other. In this instance, 2016 were also tested for impairment asset (or cash-generating unit). For the two facilities are combined at that date. Accordingly, an asset that does not generate for purposes of testing for In 2016, the Company recognized ArcelorMittal recognized cash inflows largely independent impairment. As of December 31, a total impairment charge related impairment charges of 94 and 63 of those from other assets, the 2016, the Company determined it to property, plant and equipment with respect to mining permits recoverable amount is determined has 59 cash-generating units. amounting to 205. and concessions in ArcelorMittal for the cash-generating unit to This charge included 49 in Princeton in the United States which the asset belongs. The cash- An impairment loss, related to connection with the sale on and ArcelorMittal Liberia (Mining), generating unit is the smallest intangible assets other than September 30, 2016 of the respectively. identifiable group of assets goodwill and tangible assets ArcelorMittal Zaragoza facility in corresponding to operating units recognized in prior years is Spain (Europe segment) (see note Impairment test of property, plant that generate cash inflows. If the reversed if, and only if, there has 2.3.1). and equipment recoverable amount of an asset (or been a change in the estimates cash-generating unit) is estimated used to determine the asset’s In connection with management’s At each reporting date, to be less than its carrying amount, recoverable amount since the last annual test for impairment of ArcelorMittal reviews the carrying an impairment loss is recognized. impairment loss was recognized. goodwill as of October 31, 2016, amounts of its intangible assets An impairment loss is recognized However, the increased carrying property, plant and equipment (excluding goodwill) and tangible as an expense immediately as amount of an asset due to a was also tested for impairment at assets to determine whether there part of operating income in reversal of an impairment loss that date. The Company concluded is any indication that the carrying the consolidated statements of will not exceed the carrying that the value in use of property, amount of those assets may not be operations. amount that would have been plant and equipment in AMSA was recoverable through continuing determined (net of amortization or lower than its carrying amount use. If any such indication exists, In the case of permanently idled depreciation) had no impairment following a revised competitive the recoverable amount of the assets, the impairment is measured loss been recognized for the outlook. Accordingly, the Company asset (or cash generating unit) is at the individual asset level. asset in prior years. A reversal of recognized a total impairment reviewed in order to determine Otherwise, the Company’s assets an impairment loss is recognized charge of 156 consisting mainly of the amount of the impairment, if are measured for impairment at immediately as part of operating the following: any. The recoverable amount is the the cash-generating unit level. income in the consolidated higher of its net selling price (fair In certain instances, the cash- statements of operations. value reduced by selling costs) and generating unit is an integrated its value in use. manufacturing facility which may Carrying Value of property, plant and Impairment 2016 Pre-Tax 2015 Pre-Tax equipment as of Cash-Generating Unit Country Operating Segment Recorded Discount Rate Discount Rate December 31, 2016 Vanderbijlpark facility South Africa ACIS 125 14.97% 14.71% 330

2015 This charge included 335 relating the Vereeniging meltshop closure and Vinton) in the United States to the idling for an indefinite in South Africa (ACIS). Additionally, (NAFTA) and the intended sale of In 2015, the Company recognized time of the Sestao facility in the Company recognized certain activities of ArcelorMittal a total impairment charge of Spain (Europe segment), 19 in impairment charges of 231 and 18 Downstream Solutions (Europe property, plant and equipment connection with the closure of the in connection with the intended segment), respectively. amounting to 3,753. Georgetown facility in the United sale of the Long Carbon facilities States (NAFTA) and 27 related to (ArcelorMittal Laplace, Steelton Consolidated financial statements 101

In addition, the Company recorded In connection with management’s downward revision of cash flow recognized a total impairment impairment charges of 176, 276 annual test for impairment of projections primarily resulting charge of 2,617 consisting of the and 45 relating to the ArcelorMittal goodwill as of October 31, 2015, from the expected persistence of following: Point Lisas facility currently idled property, plant and equipment a lower coking coal and iron ore in Trinidad and Tobago (Brazil was also tested for impairment at price outlook. The Company also segment), Indiana Harbor East and that date. Management concluded concluded that the value in use of West facilities in the United States that the recoverable amount of property, plant and equipment of (NAFTA) following deployment certain of the Company’s property, the Saldanha plant in AMSA was of asset optimization programs plant and equipment in the lower than its carrying amount and other assets in Spain (Europe Mining segment was lower than following a revised competitive segment), respectively. their carrying amount due to a outlook. Accordingly, the Company 2015 2014 Impairment Pre-Tax Discount Pre-Tax Discount Carrying Value as of Cash-Generating Unit Country Operating Segment Recorded Rate 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 steel shop and rolling facilities In connection with management’s carrying amount due to the end of Indiana Harbor Long carbon annual test for impairment of of life of the mine. Accordingly, In 2014, the Company recognized operations in the United States goodwill as of October 31, 2014, an impairment charge of 63 was an impairment charge of property, (NAFTA). The Company recorded property, plant and equipment recognized: plant and equipment amounting also an impairment charge of 57 was also tested for impairment at to 264. with respect to the closure of mill C that date. Management concluded in Rodange, Luxembourg (Europe that the value in use of the Volcan This charge included 114 primarily segment). iron ore mine in Mexico (Mining relating to the idling of the segment) was lower than its

2014 2013 Impairment Pre-Tax Discount Pre-Tax Discount Carrying Value as of Cash-Generating Unit Operating Segment Recorded Rate Rate December 31, 2014 Volcan mine Mining 63 9.42% 23.77% 19

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.

The following table summarizes assets and liabilities based on their categories at December 31, 2016. 102 Consolidated financial statements

December 31, 2016 Carrying amount in the consolidated Fair value statements of Non-financial Loan and Liabilities at recognized in Available-for- financial position assets and liabilities receivables amortized cost profit or loss sale assets Derivatives ASSETS Current assets: Cash and cash equivalents 2,501 - 2,501 - - - - Restricted cash 114 - 114 - - - - Trade accounts receivable and other 2,974 - 2,974 - - - - Inventories 14,734 14,734 - - - - - Prepaid expenses and other current assets 1,665 967 455 - - - 243 Assets held for sale 259 259 - - - - - Total current assets 22,247 15,960 6,044 - - - 243

Non-current assets: Goodwill and intangible assets 5,651 5,651 - - - - - Property, plant and equipment and biological assets 34,831 34,782 - - 49 - - Investments in associates and joint ventures 4,297 4,297 - - - - - Other investments 926 - - - - 926 - Deferred tax assets 5,837 5,837 - - - - - Other assets 1,353 408 756 - - - 189 Total non-current assets 52,895 50,975 756 - 49 926 189 Total assets 75,142 66,935 6,800 - 49 926 432

LIABILITIES AND EQUITY Current liabilities: Short-term debt and current portion of long-term debt 1,885 - - 1,885 - - - Trade accounts payable and other 11,633 - - 11,633 - - - Short-term provisions 426 410 - 16 - - - Accrued expenses and other liabilities 3,943 880 - 2,837 - - 226 Income tax liabilities 133 133 - - - - - Liabilities held for sale 95 95 - - - - - Total current liabilities 18,115 1,518 - 16,371 - - 226

Non-current liabilities: Long-term debt, net of current portion 11,789 - - 11,789 - - - Deferred tax liabilities 2,529 2,529 - - - - - Deferred employee benefits 8,297 8,297 - - - - - Long-term provisions 1,521 1,518 - 3 - - - Other long-term obligations 566 186 - 310 - - 70 Total non-current liabilities 24,702 12,530 - 12,102 - - 70

Equity: Equity attributable to the equity holders of the parent 30,135 30,135 - - - - - Non-controlling interests 2,190 2,190 - - - - - Total equity 32,325 32,325 - - - - - Total liabilities and equity 75,142 46,373 - 28,473 - - 296 Consolidated financial statements 103

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

December 31, 2015 Carrying amount in the consolidated Fair value statements of Non-financial Loan and Liabilities at recognized in Available-for- financial position assets and liabilities receivables amortized cost profit or loss sale 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 - - - - - Property, plant and equipment 35,780 35,700 - - 80 - - 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 10,416 - - 10,416 - - - Short-term provisions 770 529 - 241 - - - Accrued expenses and other liabilities 4,194 1,005 - 3,056 - - 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

The Company classifies the bases The levels are as follows: Level 2: Significant inputs other Level 3: Inputs for the assets or used to measure certain assets and than within Level 1 that are liabilities that are not based on liabilities at their fair value. Assets Level 1: Quoted prices in active observable for the asset or liability, observable market data and and liabilities carried or measured markets for identical assets or either directly (i.e.: as prices) or require management assumptions at fair value have been classified liabilities that the entity can access indirectly (i.e.: derived from prices); or inputs from unobservable into three levels based upon a fair at the measurement date; markets. value hierarchy that reflects the significance of the inputs used in making the measurements. 104 Consolidated financial statements

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

As of December 31, 2016 Level 1 Level 2 Level 3 Total Assets at fair value: Available-for-sale financial assets 894 - - 8941 Derivative financial current assets - 243 - 243 Derivative financial non-current assets - 14 175 189 Total assets at fair value 894 257 175 1,326

Liabilities at fair value: Derivative financial current liabilities - 226 - 226 Derivative financial non-current liabilities - 37 33 70 Total liabilities at fair value - 263 33 296 1 The balance does not include equity investments of 32 carried at cost

As of December 31, 2015 Level 1 Level 2 Level 3 Total Assets at fair value: Available-for-sale financial assets 646 - - 6461 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 1 The balance does not include equity investments of 46 carried at cost Available-for-sale financial assets foreign exchange rates, raw and reliability of input data, the that relevant observable inputs classified as Level 1 refer to listed materials (base metals), freight, accuracy of the valuation model are not available. Specifically the securities quoted in active markets. energy and emission rights. The and the knowledge of the staff Company computes unobservable A quoted market price in an active total fair value is based on the performing the valuations. volatility data based mainly on the market provides the most reliable price a dealer would pay or receive movement of stock market prices evidence of fair value and is used for the security or similar securities, ArcelorMittal establishes the fair observable in the active market without adjustment to measure adjusted for any terms specific to valuation of the call option on over 90 working days. fair value whenever available, with that asset or liability. Market inputs the 1,000 mandatory convertible limited exceptions. The total fair are obtained from well-established bonds through the use of binomial Derivative financial non-current value is either the price of the most and recognized vendors of market valuation models based on the liabilities classified as Level 3 refer recent trade at the time of the data and the fair value is calculated estimated values of the underlying to a special payment included market close or the official close using standard industry models equity spot price of $170 and in the pellet sale and purchase price as defined by the exchange based on significant observable volatility of 10.13%. Binomial agreement effective October on which the asset is most actively market inputs such as foreign valuation models use an iterative 31, 2016 between ArcelorMittal traded on the last trading day exchange rates, commodity prices, procedure to price options, and Cliffs Natural Resources of the period, multiplied by the swap rates and interest rates. allowing for the specification of Inc. This special payment varies number of units held without nodes, or points in time, during the according to the price of steel consideration of transaction costs. Derivative financial non-current time span between the valuation in the United States domestic The increase in available-for-sale assets classified as Level 3 refer date and the option’s expiration market (“domestic steel price”). financial assets is related to the to the call option on the 1,000 date. In contrast to the Black- The Company concluded that reclassification of the investment mandatory convertible bonds (see Scholes model, which provides a this feature was an embedded in Stalprodukt S.A. as available-for- note 10.2). The fair valuation of numerical result based on inputs, derivative not closely related to sale following the partial disposal Level 3 derivative instruments is the binomial model allows for the the host contract. ArcelorMittal of the Company’s shareholding in established at each reporting date calculation of the asset and the establishes the fair value of the Stalprodukt S.A. on April 28, 2016 in relation to which an analysis is option for multiple periods along special payment by comparing the (see note 2.5) and the increase in performed in respect of changes in with the range of possible results current forecasted domestic steel the fair value of the available-for- the fair value measurement since for each period. price to the projected domestic sale investments, partly offset by the last period. ArcelorMittal’s steel price at the inception of the the sale of the Company’s 10.08% valuation policies for Level 3 Observable input data used contract. This price difference is shareholding in Hunan Valin (see derivatives are an integral part of in the valuations include zero multiplied by the minimum pellet note 2.5). its internal control procedures and coupon yield curves, stock volume ArcelorMittal is required to have been reviewed and approved market prices, European Central take under the purchase contract. Derivative financial assets and according to the Company’s Bank foreign exchange fixing An increase of $10 per metric liabilities classified as Level 2 principles for establishing such rates and Libor interest rates. tonne in the domestic steel price refer to instruments to hedge procedures. In particular, such Unobservable inputs are used to in 2017 would result in adverse fluctuations in interest rates, procedures address the accuracy measure fair value to the extent change of 7 in the fair value of the Consolidated financial statements 105

special payment. Observable input data includes third-party forecasted domestic steel prices. Unobservable inputs are used to measure fair value to the extent that relevant observable inputs are not available or not consistent with the Company’s views on future prices and refer specifically to domestic steel prices beyond the timeframe of available third-party forecasts.

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 and the fair value of the special payment included in the pellet sale and purchase agreement for the years ended December 31, 2016 and 2015, respectively:

Special payment in Call option on 1,000 mandatory pellet purchase and sale convertible bonds agreement Total Balance as of December 31, 2014 112 - 112 Change in fair value (108) - (108) Balance as of December 31, 2015 4 - 4 Change in fair value 171 (33) 138 Balance as of December 31, 2016 175 (33) 142

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, 2016 2015 Short-term bank loans and other credit facilities including commercial paper * 1,123 437 Current portion of long-term debt 697 1,806 Lease obligations 65 65 Total 1,885 2,308 * The weighted average interest rate on short term borrowings outstanding was 2.7% and 4.3% as of December 31, 2016 and 2015, respectively.

During the first half of 2014, ArcelorMittal entered into certain short-term committed bilateral credit facilities. The facilities were extended during 2015 and 2016. As of December 31, 2016, the facilities, totaling approximately 0.7 billion, remain fully available.

Commercial paper

The Company has a commercial paper program enabling borrowings of up to €1 billion. As of December 31, 2016, the outstanding amount was 392. 106 Consolidated financial statements

6.1.2.2 Long-term debt

Long-term debt is comprised of the following:

December 31, Year of maturity Type of Interest Interest rate1 2016 2015 Corporate 5.5 billion Revolving Credit Facility - 2.3 billion tranche 2019 Floating - - 5.5 billion Revolving Credit Facility - 3.2 billion tranche 2021 Floating - - €1.0 billion Unsecured Bonds 2016 Fixed 10.63% - 1,088 1.4 billion Unsecured Notes2 2017 Fixed 5.50% - 1,398 €1.0 billion Unsecured Bonds3 2017 Fixed 5.88% 568 1,085 €500 million Unsecured Notes3 2018 Fixed 5.75% 351 543 €400 million Unsecured Notes 2018 Floating 1.73% 421 434 1.5 billion Unsecured Notes3, 6 2018 Fixed 6.13% 648 1,500 €750 million Unsecured Notes 2019 Fixed 3.00% 788 812 1.5 billion Unsecured Notes4, 6 2019 Fixed 10.85% 842 1,480 500 Unsecured Notes5, 6 2020 Fixed 5.13% 323 497 CHF 225 million Unsecured Notes 2020 Fixed 2.50% 220 225 €600 million Unsecured Notes 2020 Fixed 2.88% 627 647 1.0 billion Unsecured Bonds5, 6 2020 Fixed 6.25% 620 989 1.5 billion Unsecured Notes5, 6 2021 Fixed 6.50% 752 1,490 €500 million Unsecured Notes 2021 Fixed 3.00% 523 540 €750 million Unsecured Notes 2022 Fixed 3.13% 786 811 1.1 billion Unsecured Notes6 2022 Fixed 7.25% 1,092 1,091 500 Unsecured Notes 2025 Fixed 6.13% 497 496 1.5 billion Unsecured Bonds 2039 Fixed 8.00% 1,466 1,465 1.0 billion Unsecured Notes 2041 Fixed 7.75% 984 984 Other loans 2021 Fixed 3.46% 29 52 300 Term Loan Facility 2016 Floating 2.93% - 300 EIB loan 2016 Floating 1.37% - 272 ICO loan 2017 Floating 2.18% 7 23 Other loans 2017 - 2035 Floating 0.01% - 3.47% 250 270 Total Corporate 11,794 18,492

Americas Other loans 2017 - 2025 Fixed/Floating 1.57% - 11.65% 198 243 Total Americas 198 243

Europe, Asia & Africa Other loans 2018 - 2031 Fixed/Floating 0.00% - 4.69% 30 13 Total Europe, Asia & Africa 30 13

Total 12,022 18,748 Less current portion of long-term debt (697) (1,806) Total long-term debt (excluding lease obligations) 11,325 16,942 Long-term lease obligations7 464 536 Total long-term debt, net of current portion 11,789 17,478

1 Rates applicable to balances outstanding at December 31, 2016, including the effect of step-ups following downgrades. For debt that has been redeemed in its entirety during 2016, the interest rates refer to the rates at repayment date. 2 Early redeemed on May 20, 2016. 3 Bonds or Notes partially repurchased on April 19, 2016, pursuant to cash tender offers. 4 Notes partially repurchased in May, 2016, pursuant to cash tender offer. 5 Bonds or Notes partially repurchased on June 29, 2016, pursuant to cash tender offers. 6 Bonds or Notes partially repurchased on September 23, 2016, pursuant to cash tender offers. 7 Net of current portion of 65 and 65 in 2016 and in 2015, respectively. Consolidated financial statements 107

Corporate

5.5 billion Revolving Credit Facility

On December 21, 2016, ArcelorMittal signed an agreement for a $5.5 billion revolving credit facility (the “Facility”). This Facility amends and restates the $6 billion revolving credit facility dated April 30, 2015. The amended agreement incorporates a first tranche of $2.3 billion maturing on December 21, 2019, and a second tranche of $3.2 billion maturing on December 21, 2021, restoring the Facility to the original tenors of 3 years and 5 years. The Facility may be used for general corporate purposes. As of December 31, 2016, the $5.5 billion revolving credit facility remains fully available.

Bonds

On September 23, 2016, pursuant to cash tender offers, ArcelorMittal purchased:

• 420 of its U.S. dollar denominated 6.125% Notes due June 1, 2018 (the “USD 2018 Notes”) for a total aggregate purchase price (including premiums and accrued interest) of 457. Following this purchase, 644 principal amount of the USD 2018 Notes remained outstanding. • 241 of its U.S. dollar denominated 9.85% Notes due June 1, 2019 (the “USD 2019 Notes”) for a total aggregate purchase price (including premiums and accrued interest) of 301. Following this purchase, 851 principal amount of the USD 2019 Notes remained outstanding. • 63 of its U.S. dollar denominated 5.125% Notes due June 1, 2020 (the “June 2020 Notes”) for a total aggregate purchase price (including premiums and accrued interest) of 68. Following this purchase, 324 principal amount of the June 2020 Notes remained outstanding. • 228 of its U.S. dollar denominated 5.25% Notes due August 5, 2020 (the “August 2020 Notes”) for a total aggregate purchase price (including premiums and accrued interest) of 253. Following this purchase, 626 principal amount of the August 2020 Notes remained outstanding. • 421 of its U.S. dollar denominated 5.50% Notes due March 1, 2021 (the “2021 Notes”) for a total aggregate purchase price (including premiums and accrued interest) of 469. Following this purchase, 756 principal amount of the 2021 Notes remained outstanding.

The 6.250% Notes due February 5, 2022 (the “2022 Notes”) were included in the cash tender offer, but none of the tendered Notes were accepted.

On June 29 and July 14, 2016, pursuant to cash tender offers, ArcelorMittal repurchased:

• 113 of its U.S. dollar denominated June 2020 Notes for a total aggregate purchase price (including premiums and accrued interest) of 119. Following this purchase, 387 principal amount of the June 2020 Notes remained outstanding. • 147 of its U.S. dollar denominated August 2020 Notes for a total aggregate purchase price (including premiums and accrued interest) of 160. Following this purchase, 853 principal amount of the August 2020 Notes remained outstanding. • 323 of its U.S. dollar denominated 2021 Notes for a total aggregate purchase price (including premiums and accrued interest) of 347. Following this purchase, 1,177 principal amount of the 2021 Notes remained outstanding.

On June 3, 2016, at maturity, ArcelorMittal repaid its €1 billion 9.375% unsecured bonds.

On May 20, 2016, ArcelorMittal redeemed its U.S. dollar denominated 1.4 billion 4.5% Notes due February 25, 2017, prior to their scheduled maturity for a total amount of 1,466, including premium and accrued interest.

In May 2016, pursuant to cash tender offers, ArcelorMittal purchased 408 of its USD 2019 Notes for a total aggregate purchase price (including premiums and accrued interest) of 498. Following this purchase, 1,092 principal amount of the USD 2019 Notes remained outstanding.

In April 2016, pursuant to cash tender offers, ArcelorMittal repurchased:

• 437 of its U.S. dollar denominated USD 2018 Notes for a total aggregate purchase price (including premiums and accrued interest) of 467. Following this purchase, 1,063 principal amount of USD 2018 Notes remained outstanding. • €460 million of its euro denominated 4.625% Notes due November 17, 2017 (the “Euro 2017 Notes”) for a total aggregate purchase price (including premiums and accrued interest) of €511 million. Following this purchase, €540 million principal amount of Euro 2017 Notes remained outstanding. • €166 million of its euro denominated 4.50% Notes due March 29, 2018 (the “Euro 2018 Notes”) for a total aggregate purchase price (including premiums and accrued interest) of €181 million. Following this purchase, €334 million principal amount of the Euro 2018 Notes remained outstanding.

As a result of the above mentioned redemptions, net financing costs for the year ended December 31, 2016, included 399 of premiums and other fees.

The margin applicable to ArcelorMittal’s principal credit facilities ($5.5 billion revolving credit facility and certain other credit facilities) and the coupons on certain of its outstanding bonds are subject to adjustment in the event of a change in its long-term credit ratings. 108 Consolidated financial statements

Previous downgrades triggered the interest rate “step-up” clauses for the outstanding bonds listed below: Nominal value Date of issuance Repayment date Interest rate Issued at €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 Notes1 March 25, 2014 March 25, 2019 3.00% 99.65% 500 million 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 million 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. 300 Term Loan Facility

On December 20, 2013, ArcelorMittal entered into a term loan facility in an aggregate amount of 300, maturing on December 20, 2016. The facility was repaid at maturity.

European Investment Bank (“EIB”) Loan

On December 16, 2016, ArcelorMittal signed a €350 million finance contract with the European Investment Bank in order to finance European research, development and innovation projects over the period 2017-2020 within the European Union, namely predominantly France, Belgium and Spain, but also in Czech Republic, Poland, Luxembourg and Romania. This operation benefits from a guarantee from the European Union under the European Fund for Strategic Investments. As of December 31, 2016, the facility remains fully available.

On July 15, 2010, the Company entered into an agreement with the EIB for the financing of activities for research, engineering and technological innovation related to process improvements and new steel product developments. The full amount of €250 million was drawn down on September 27, 2011 and repaid at maturity on September 27, 2016.

Instituto de Crédito Oficial (“ICO”) Loan

The Company entered into an agreement with the ICO on April 9, 2010 for the financing of the Company investment plan in Spain for the period 2008-2011. The last installment under this agreement is due on April 7, 2017. The outstanding amount in total as of December 31, 2016 and 2015 was 7 and 23, respectively.

Other loans

The other loans relate to various debt with banks and public institutions.

Americas

1 billion senior secured asset-based revolving credit facility

On May 23, 2016, ArcelorMittal USA LLC signed a $1 billion senior secured asset-based revolving credit facility maturing on May 23, 2021. Borrowings under the facility are secured by inventory and certain other working capital and related assets of ArcelorMittal USA and certain of its subsidiaries in the United States. The facility may be used for general corporate purposes. The facility is not guaranteed by ArcelorMittal. As of December 31, 2016, 500 was drawn down.

Other loans

The other loans relate mainly to loans contracted by ArcelorMittal Brazil with different counterparties.

Other

Certain debt agreements of the Company or its subsidiaries contain certain restrictive covenants. Among other things, these covenants limit encumbrances on the assets of ArcelorMittal and its subsidiaries, the ability of ArcelorMittal’s subsidiaries to incur debt and the ability of ArcelorMittal and its subsidiaries to dispose of assets in certain circumstances. Certain of these agreements also require compliance with a financial covenant. Consolidated financial statements 109

As of December 31, 2016 the scheduled maturities of short-term debt, long-term debt and long-term lease obligations, including their current portion are as follows: Year of maturity Amount 2017 1,885 2018 1,536 2019 1,859 2020 1,891 2021 1,356 Subsequent years 5,147 Total 13,674 The carrying amount and the estimated fair value of the Company’s short and long-term debt is:

December 31, 2016 2015 Carrying Estimated Carrying Estimated Amount Fair Value Amount Fair Value Instruments payable bearing interest at fixed rates 11,657 12,666 17,788 15,428 Instruments payable bearing interest at variable rates 894 838 1,561 1,353 Total long-term debt, including current portion 12,551 13,504 19,349 16,781 Short term bank loans and other credit facilities including commercial paper 1,123 1,139 437 439 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, 2016 Carrying Fair Amount Value Level 1 Level 2 Level 3 Total Instruments payable bearing interest at fixed rates 11,657 11,939 727 - 12 666 Instruments payable bearing interest at variable rates 894 408 430 - 838 Total long-term debt, including current portion 12,551 12,347 1 157 - 13 504 Short term bank loans and other credit facilities including commercial paper 1,123 - 1 139 - 1 139

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 Instruments payable classified Instruments payable classified as 6.1.3 Cash and cash equivalents Significant cash or cash as Level 1 refer to the Company’s Level 2 refer to all debt instruments and restricted cash equivalent balances may be listed bonds quoted in active not classified as Level 1. The held from time to time at markets. The total fair value is the fair value of the debt is based Cash and cash equivalents consist the Company’s international official closing price as defined on estimated future cash flows of cash and short-term highly operating subsidiaries, including by the exchange on which the converted into U.S. dollar at the liquid investments that are readily in particular those in France instrument is most actively traded forward rate and discounted using convertible to cash with original and the United States, where on the last trading day of the current U.S. dollar zero coupon maturities of three months or the Company maintains cash period, multiplied by the number rates and ArcelorMittal’s credit less at the time of purchase and management systems under of units held without consideration spread quotations for the relevant are carried at cost plus accrued which most of its cash and cash of transaction costs. maturities. interest, which approximates fair equivalents are centralized. value. Other subsidiaries, associates There were no instruments and joint ventures, which may payable classified as Level 3. hold significant cash balances, 110 Consolidated financial statements

include those in Argentina, Brazil, that impose restrictions on such funds from operating subsidiaries policies are currently significant Canada, Kazakhstan, Morocco, operating subsidiaries’ ability may also be affected by tax and in the context of ArcelorMittal’s South Africa and Ukraine. Some to pay dividends, but such foreign exchange policies in place overall liquidity. of these operating subsidiaries restrictions are not significant from time to time in the various Cash and cash equivalents have debt outstanding or are in the context of ArcelorMittal’s countries where the Company consisted of the following: subject to acquisition agreements overall liquidity. Repatriation of operates, though none of these

December 31, 2016 2015 Cash at bank 1,601 1,928 Term deposits 329 376 Money market funds1 571 1,698 Total 2,501 4,002 1 Money market funds are highly liquid investments with a maturity of 3 months or less from the date of acquisition. Restricted cash represents cash and cash equivalents not readily available to the Company, mainly related to insurance deposits, escrow accounts created as a result of acquisitions, and various other deposits or required balance obligations related to letters of credit and credit arrangements. Changes in restricted cash are included within other investing activities (net) in the consolidated statements of cash flows.

Restricted cash of 114 and 100 included a cash deposit of 75 and 75 in connection with the mandatory convertible bonds (see note 10.2) at December 31, 2016 and December 31, 2015, respectively.

6.1.4 Net debt

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 currency at December 31, 2016: December 31, 2016 Total USD EUR USD CHF UAH Other (in USD) Short-term debt and current portion of long-term debt 1,885 944 646 - - 295 Long-term debt, net of current portion 11,789 3,748 7,776 220 - 45 Cash and cash equivalents including restricted cash (2,615) (768) (1,289) (1) (83) (474) Net debt 11,059 3,924 7,133 219 (83) (134)

As a part of the Company’s overall are recognized in the consolidated the derivatives that are used in procedures which specify, for risk and cash management statements of operations, except hedging transactions are highly each type of transaction and strategies, several loan agreements for derivatives that are highly effective in offsetting changes in underlying position, risk limits have been swapped from their effective and qualify for cash fair values or cash flows of hedged and/or the characteristics of the original currencies to other foreign flow or net investment hedge items. When a hedging instrument counter-party. The Company does currencies. accounting. is sold, terminated, expired or not generally grant to or require is exercised, the accumulated guarantees from its counter- 6.1.5 Derivative financial Changes in the fair value of a unrealized gain or loss on the parties for the risks incurred. instruments derivative that is highly effective hedging instrument is maintained Allowing for exceptions, the and that is designated and in equity until the forecasted Company’s counter-parties are The Company uses derivative qualifies as a fair value hedge, transaction occurs. If the hedged part of its financial partners and financial instruments principally along with the gain or loss that transaction is no longer probable, the related market transactions to manage its exposure to is attributable to the hedged risk the cumulative unrealized gain or are governed by framework fluctuations in interest rates, on the hedged asset, liability, or loss, which had been recognized agreements (mainly International exchange rates, prices of raw unrecognized firm commitment, in equity, is reported immediately Swaps and Derivatives Association materials, energy and emission are recorded in the consolidated in the consolidated statements of agreements which allow netting rights allowances arising from statements of operations. operations. only in case of counter-party operating, financing and investing default). Accordingly, derivative activities. Derivative financial Changes in the fair value of a Foreign currency differences assets and derivative liabilities are instruments are classified as derivative that is highly effective arising on the translation of a not offset. current or non-current assets or and that is designated and financial liability designated as liabilities based on their maturity qualifies as a cash flow hedge are a hedge of a net investment in a dates and are accounted for recorded in other comprehensive foreign operation are recognized at the trade date. Embedded income. Amounts deferred directly as a separate component derivatives are separated from the in equity are recorded in the of equity, to the extent that the host contract and accounted for consolidated statements of hedge is effective. To the extent separately if they are not closely operations in the periods when that the hedge is ineffective, such related to the host contract. The the hedged item is recognized in differences are recognized in Company measures all derivative the consolidated statements of the consolidated statements of financial instruments based on fair operations and within the same operations. values derived from market prices line item. of the instruments or from option The Company manages the pricing models, as appropriate. The Company formally assesses, counter-party risk associated with Gains or losses arising from both at the hedge’s inception and its instruments by centralizing its changes in fair value of derivatives on an ongoing basis, whether commitments and by applying Consolidated financial statements 111

The portfolio associated with derivative financial instruments classified as Level 2 as of December 31, 2016 is as follows:

December 31, 2016 Assets Liabilities Notional Fair Notional Fair Amount Value Amount Value Foreign exchange rate instruments Forward purchase contracts 3,784 153 658 (21) Forward sale contracts 685 10 657 (26) Currency swaps purchases 138 6 44 (33) Currency swaps sales 500 4 500 (24) Exchange option purchases 169 1 37 - Exchange options sales 109 1 - - Total foreign exchange rate instruments 175 (104)

Raw materials (base metals), freight, energy, emission rights Term contracts sales 329 18 312 (36) Term contracts purchases 416 64 841 (123) Options sales/purchases 6 - 6 - Total raw materials (base metals), freight, energy, emission rights 82 (159) Total 257 (263)

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

December 31, 2015 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 metals), freight, energy, emission rights Term contracts sales 168 28 126 (5) Term contracts purchases 204 7 727 (54) Total raw materials (base metals), 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.

6.1.6 Other non-derivative financial trade payables and certain other or if the Company transfers the Impairment of financial assets assets and liabilities liabilities (see notes 4.7 and 4.8). financial instruments to another These instruments are recognized party without retaining control A financial asset is considered to Other non-derivative financial initially at fair value when the of substantially all risks and be impaired if objective evidence assets and liabilities include Company becomes a party to rewards of the instruments. indicates that one or more events cash and cash equivalents the contractual provisions of Non-derivative financial liabilities have had a negative effect on the and restricted cash (see note the instrument. Non-derivative are derecognized when they estimated future cash flows of 6.1.3), trade and certain other financial assets are derecognized are extinguished (i.e. when the that asset. Estimated future cash receivables (see note 4.3 and 4.5), if the Company’s contractual obligation specified in the contract flows are determined using various investments in available-for-sale rights to the cash flows from is discharged, cancelled or expires). assumptions and techniques, equity securities (see note 2.5), the financial instruments expire including comparisons 112 Consolidated financial statements

to published prices in an active to occur when the market value comprehensive income while in the consolidated statements market and discounted cash remains continuously below the decreases in fair value are recorded of operations. An impairment flow projections using projected cost for more than two years. in the consolidated statements of loss related to financial assets growth rates, weighted average If any such evidence exists for operations. is reversed if and to the extent cost of capital, and inflation rates. available-for-sale financial assets, there has been a change in the the cumulative loss measured Financial assets are tested for estimates used to determine the In the case of available-for-sale as the difference between the impairment annually or whenever recoverable amount. The loss securities, the Company reviews acquisition cost and the current changes in circumstances indicate is reversed only to the extent the available-for-sale investments fair value less any impairment loss that the carrying amount may that the asset’s carrying amount at the end of each reporting period on that financial asset previously not be recoverable. If objective does not exceed the carrying to assess whether there is any recognized in the consolidated evidence indicates that cost- amount that would have been objective evidence of impairment. statements of operations is method investments need to be determined if no impairment loss A significant or prolonged decline removed from equity and tested for impairment, calculations had been recognized. Reversals in the fair value of an available-for- recognized in the consolidated are based on information of impairment are recognized in sale investment below its cost is statements of operations. Once derived from business plans and net income except for reversals objective evidence of impairment. an impairment loss is recognized other information available for of impairment of available-for- The Company considers a for an investment, any increases estimating their value in use. Any sale equity securities, which are prolonged decline in fair value in fair value are recorded in other impairment loss is recognized recognized in equity. 6.2 Financing costs

Financing costs recognized in the years ended December 31, 2016, 2015 and 2014 are as follows: Year Ended December 31, 2016 2015 2014 Recognized in the statements of operations Interest expense (1,172) (1,383) (1,565) Interest income 58 105 96 Fair value adjustment on mandatory convertible bonds 171 (108) 112 Net gain (loss) on other derivative instruments (35) 10 7 Accretion of defined benefit obligations and other long term liabilities (435) (399) (593) Net foreign exchange result (3) (697) (620) Other * (640) (386) (819) Total (2,056) (2,858) (3,382)

Recognized in equity (attributable to equity holders of the parent) Net change in fair value of available-for-sale financial assets 271 (354) 510 Effective portion of changes in fair value of cash flow hedge 28 25 104 Foreign currency translation differences for foreign operations (751) (8,166) (4,717) Total (452) (8,495) (4,103) * Other mainly includes expenses related to True Sale of Receivables (“TSR”) programs and bank fees. It also includes premiums and fees of 399 relating to the bonds early redeemed in 2016. In 2015, there were expenses relating to the extension of the mandatory convertible bonds (see note 10.2) of 79 (49 in 2014). 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.

6.3 Risk management policy Interest rate derivatives used by especially the fluctuation of the coking coal, in U.S. dollars, but the Company to manage changes value of the U.S. dollar relative may sell finished steel products in Interest rate risk in the value of fixed rate loans to the euro, the Canadian dollar, other currencies. Consequently, an qualify as fair value hedges. Brazilian real, South African rand, appreciation of the U.S. dollar will The Company utilizes certain Kazakh tenge, and Ukrainian increase the cost of raw materials; instruments to manage interest Foreign exchange rate risk hryvnia, as well as fluctuations in thereby having a negative impact rate risks. Interest rate instruments the other countries’ currencies in on the Company’s operating allow the Company to borrow The Company is exposed to which ArcelorMittal has significant margins, unless the Company is long-term at fixed or variable changes in values arising from operations and/or sales, could able to pass the higher cost along rates, and to swap the rate of foreign exchange rate fluctuations have a material impact on its in the form of higher selling prices. this debt either at inception or generated by its operating financial position and results of during the lifetime of the loan. The activities. Because a substantial operations. Following its Treasury and Company and its counter-parties portion of ArcelorMittal’s assets, Financial Risk Management Policy, exchange, at predefined intervals, liabilities, sales and earnings are ArcelorMittal faces transaction the Company hedges a portion the difference between the agreed denominated in currencies other risk, where its businesses generate of its net exposure to foreign fixed rate and the variable rate, than the U.S. dollar (its reporting sales in one currency but incur exchange rates through forwards, calculated on the basis of the currency), ArcelorMittal has an costs relating to that revenue options and swaps. notional amount of the swap. exposure to fluctuations and in a different currency. For Similarly, swaps may be used for depreciation in the values of these example, ArcelorMittal’s non-U.S. ArcelorMittal also faces foreign the exchange of variable rates currencies relative to the U.S. subsidiaries may purchase raw currency translation risk, which against other variable rates. dollar. These currency fluctuations, materials, including iron ore and arises when ArcelorMittal Consolidated financial statements 113

translates the statements of currency or the balance sheet risk level of its operating subsidiaries. The non-discounted contractual operations of its subsidiaries, its associated with certain monetary The Company actively manages maturities of the below financial corporate net debt (see note 6.1.2) assets denominated in a foreign its liquidity. Following the Treasury liabilities, including estimated and other items denominated currency other than the functional and Financial Risk Management interest payments and excluding in currencies other than the currency. Policy, the levels of cash, credit the impact of netting agreements U.S. dollar, for inclusion in the lines and debt are closely are as follows: consolidated financial statements. Liquidity Risk monitored and appropriate actions are taken in order to comply with The Company also uses the ArcelorMittal’s principal sources the covenant ratios, leverage, derivative instruments, described of liquidity are cash generated fixed/floating ratios, maturity above, at the corporate level to from its operations, its credit lines profile and currency mix. hedge debt recorded in foreign at the corporate level and various currency other than the functional working capital credit lines at the

December 31, 2016 Contractual Carrying amount Cash Flow Less than 1 Year 1-2 Years 2-5 Years More than 5 Years Non-derivative financial liabilities Other bonds (11,597) (18,228) (1,261) (2,076) (6,093) (8,798) Loans over 100 (694) (873) (546) (57) (172) (98) Trade and other payables (11,633) (11,647) (11,647) - - - Other loans (1,383) (1,523) (856) (124) (370) (173) Total (25,307) (32,271) (14,310) (2,257) (6,635) (9,069)

Derivative financial liabilities Foreign exchange contracts (104) (104) (73) (7) - (24) Other commodities contracts1 (192) (192) (153) (5) (1) (33) Total (296) (296) (226) (12) (1) (57) 1 Commodity contracts include base metals, freight, energy and emission rights.

December 31, 2015 Contractual Carrying amount Cash Flow Less than 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 (892) (1,149) (659) (83) (166) (241) Trade and other payables (10,416) (10,427) (10,427) - - - Other loans (1,213) (1,376) (667) (182) (280) (247) Total (30,202) (39,034) (13,976) (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) 1 Commodity contracts include base metals, freight, energy and emission rights.

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

December 31, 2016 Assets/ (Outflows)/ (liabilities) inflows 3 months 3-6 6-12 1-2 More than Fair value and less months months years 2 years Foreign exchange contracts 87 36 32 19 - - Commodity contracts 22 10 2 5 5 - Emission rights (104) - - (104) - - Total 5 46 34 (80) 5 -

114 Consolidated financial statements

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

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

December 31, 2016 Assets/ (Expense)/ (liabilities) income Carrying 3 months 3-6 6-12 1-2 More than amount and less months months years 2 years Foreign exchange contracts 54 4 29 21 - - Commodity contracts 23 11 4 4 4 - Emission rights 22 - - (1) 1 22 Total 99 15 33 24 5 22

December 31, 2015 Assets/ (Expense)/ (liabilities) 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) During the year ended December 31, 2011 the Company entered into several forward exchange and options contracts related to the purchase of raw materials denominated in U.S. dollars. The program was unwound during the year ended December 31, 2011. As of December 31, 2013 the effective portion deferred in equity was €7 million (9), excluding deferred tax expense of €2 million (3), which was fully recycled to the consolidated statements of operations during the year ended December 31, 2014.

Net investment hedge

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, and designated them as a net investment hedge. The EUR/USD CCS with a notional of 375 were unwound on January 14, 2016. A deferred gain of 83, net of a deferred tax expense of 24, will be recycled to the consolidated statements of operations when the hedged assets are disposed of. As of December 31, 2015, the CCS had a fair value gain of 85, net of a deferred tax expense of 25, which has been recorded in the consolidated statements of other comprehensive income for the year ended December 31, 2015. As of December 31, 2015, the fair value of the net investment hedge was included in other long term assets in the consolidated statements of financial position. The Company’s commitment to a bilateral cash collateral arrangement for a maximum of €150 million has been terminated upon unwinding of the CCS.

On May 27, 2015, the Company entered into additional EUR/USD CCS with a notional of 1,000 to hedge euro denominated net investment in foreign operations amounting to €918 million, and designated them as a net investment hedge. As of December 31, 2016 and 2015, the EUR/USD CCS have a fair value loss of 21, net of a deferred tax of 6, and a fair value loss of 24, net of a deferred tax of 7, respectively. Fair value movements have been recorded in the consolidated statements of other comprehensive income. The fair value of the net investment hedge is included in other long term obligations in the consolidated statements of financial position. The cross currency swap is classified into Level 2. Consolidated financial statements 115

Net investment hedges are as follows:

December 31, 2016 Fair value at Fair value Derivatives Notional amount Date traded December 31, 2015 Change in fair value as of December 31, 2016* CCS 30Y 250 December 3, 2014 56 (56) - CCS 30Y 125 December 12, 2014 29 (29) - CCS 5Y 500 May 28, 2015 (7) 10 3 CCS 10Y 300 May 28, 2015 (10) (4) (14) CCS 10Y 160 May 28, 2015 (6) (2) (8) CCS 10Y 40 May 28, 2015 (1) (1) (2) Total 1,375 61 (82) (21) * The net investment hedges were fully effective. As such, the change in fair value is entirely recorded in other comprehensive income.

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.

Raw materials, freight, energy risks swaps in order to manage the such as zinc, nickel, aluminum, tin, Fair values of raw material, freight, and emission rights volatility of prices of certain raw copper and iron ore), freight and energy and emission rights materials, freight and energy. energy, both through the purchase instruments categorized as Level 2 The Company uses financial The Company is exposed to risks of raw materials and through sales are as follows: instruments such as forward in fluctuations in prices of raw contracts. purchases or sales, options and materials (including base metals At December 31, 2016 2015 Base metals 28 (15) Freight - 13 Energy (oil, gas, electricity) (1) (6) Emission rights (104) (16) Total (77) (24)

Derivative assets associated with raw materials, energy, freight and emission rights 82 35 Derivative liabilities associated with raw materials, energy, freight and emission rights (159) (59) Total (77) (24) ArcelorMittal consumes large amounts of raw materials (the prices of which are related to the London Metals Exchange price index, the Steel Index and Platts Index), ocean freight (the price of which is related to a Baltic Exchange Index), and energy (the prices of which are related to the New York Mercantile Exchange index, the Intercontinental Exchange index, the Powernext index and TTF). As a general matter, ArcelorMittal is exposed to price volatility with respect to its purchases in the spot market and under its long-term supply contracts. In accordance with its risk management policy, ArcelorMittal hedges a part of its exposure related to raw materials procurements.

Emission rights

Pursuant to the application of the European Directive 2003/87/EC of October 13, 2003, establishing a scheme for emission allowance trading, the Company enters into certain types of derivatives (mainly forward transactions and options) in order to implement its management policy for associated risks. As of December 31, 2016 and 2015, the Company had a net notional position of 420 with a net negative fair value of 104 and a net notional position of 391 with a net negative fair value of 16, respectively.

Credit risk

The Company’s treasury department monitors various market data regarding the credit standings and overall reliability of the financial institutions for all countries where the Company’s subsidiaries operate. The choice of the financial institution for the financial transactions must be approved by the treasury department. Credit risk related to customers, customer credit terms and receivables are discussed in note 4.3. 116 Consolidated financial statements

Sensitivity analysis

Foreign currency sensitivity

The following tables detail the Company’s derivative financial instruments’ sensitivity to a 10% strengthening and a 10% weakening in the U.S. dollar against the euro. 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.

The sensitivity analysis includes the Company’s complete portfolio of foreign currency derivatives outstanding. The impact on the non €/$ derivatives reflects the estimated move of such currency pairs, when the U.S. dollar appreciates or depreciates 10% against the euro, based on computations of correlations in the foreign exchange markets in 2016 and 2015.

December 31, 2016 Income Other Equity 10% strengthening in U.S. dollar (3) 377 10% weakening in U.S. dollar 6 (375)

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

Cash flow sensitivity analysis for variable rate instruments

The following tables detail the Company’s variable interest rate instruments’ sensitivity. 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, 2016 Floating porting of net Interest Rate Swaps/ debt1 Forward Rate Agreements 100 bp increase 11 - 100 bp decrease (11) -

December 31, 2015 Floating porting of net Interest Rate Swaps/ debt1 Forward Rate Agreements 100 bp increase 23 1 100 bp decrease (23) (1) 1 Please refer to note 6.1.4 for a description of 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, 2016 Other Equity Cash Flow Income Hedging Reserves +10% in prices Base Metals 4 18 Iron Ore (10) 1 Emission rights - 32 Energy (8) 1 -10% in prices Base Metals (3) (18) Iron Ore 10 (1) Emission rights - (32) Energy 8 (1) Consolidated financial statements 117

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

Note 7 : Personnel expenses and deferred employee benefits

7.1 Employees and key management personnel

As of December 31, 2016, ArcelorMittal had approximately 199,000 employees and the total annual compensation of ArcelorMittal’s employees in 2016, 2015 and 2014 was as follows:

Year Ended December 31, 2016 2015 2014 Employee Information Wages and salaries 7,675 8,392 9,839 Pension cost (excluding the United States new labor agreement) (see note 7.2) 124 237 216 Gain following new labor agreement in United States (see note 7.2) (832) - - Other staff expenses 1,591 1,695 1,989 Total 8,558 10,324 12,044

As of January 1, 2016, the Group Management Board (“GMB”), ArcelorMittal’s former senior management, was replaced by the CEO Office supported by six other Executive Officers. ArcelorMittal’s CEO Office is comprised by the CEO, Mr. Lakshmi N. Mittal and the CFO, Mr. Aditya Mittal. Together, the Executive Officers are responsible for the implementation of the Company strategy, overall management of the business and all operational decisions. The key management personnel compensation for 2016 reflects this new structure.

The total annual compensation of ArcelorMittal’s key management personnel (as described above for 2016), including its Board of Directors, expensed in 2016, 2015 and 2014 was as follows:

Year Ended December 31, 2016 2015 2014 Base salary and directors fees 12 7 11 Short-term performance-related bonus 2 5 8 Post-employment benefits 1 - 1 Share based compensation 2 7 7

The fair value of the stock options had not given any guarantees Defined contribution plans are Defined benefit plans are those granted and shares allocated for the benefit of any member those plans where ArcelorMittal plans that provide guaranteed based on Restricted Stock Unit of its Board of Directors or key pays fixed or determinable benefits to certain categories (“RSU”) and Preference Stock Unit management personnel. contributions to external life of employees, either by way of (“PSU”) plans to the ArcelorMittal’s insurance or other funds for contractual obligations or through key management personnel 7.2 Deferred employee benefits certain categories of employees. a collective agreement. For defined is recorded as an expense in Contributions are paid in return benefit plans, the cost of providing the consolidated statements ArcelorMittal’s operating for services rendered by the benefits is determined using the of operations over the relevant subsidiaries sponsor different employees during the period. projected unit credit method, with vesting periods. types of pension plans for their Contributions are expensed as actuarial valuations being carried employees. Also, some of the incurred consistent with the out at each fiscal year end. As of December 31, 2016, 2015 operating subsidiaries offer other recognition of wages and salaries. and 2014, ArcelorMittal did not post-employment benefits, No provisions are established with The retirement benefit obligation have outstanding any loans or principally healthcare. These respect to defined contribution recognized in the consolidated advances to members of its Board benefits are broken down into plans as they do not generate statements of financial position of Directors or key management defined contribution plans and future commitments for represents the present value of personnel, and, as of December 31, defined benefit plans. ArcelorMittal. the defined benefit obligation 2016, 2015 and 2014, ArcelorMittal less the fair value of plan assets. 118 Consolidated financial statements

The present value of the defined The Company recognizes gains likely to take early retirement the consolidated statements of benefit obligation is determined and losses on the curtailment of and are discounted using an financial position are based on by discounting the estimated a defined benefit plan when the interest rate which corresponds a number of assumptions and future cash outflows using curtailment occurs. The gain or to that of highly-rated bonds factors such as discount rates, interest rates of high quality loss on curtailment comprises that have maturity dates similar expected rate of compensation corporate bonds that are any resulting change in the fair to the terms of the Company’s increase, healthcare cost trend denominated in the currency value of plan assets, any change early retirement obligations. rates, mortality rates and in which the benefits will be in the present value of the Termination benefits are retirement rates. paid, and that have terms to defined benefit obligation, any provided in connection with maturity approximating to the related actuarial gains and losses voluntary separation plans. The • Discount rates – The discount terms of the related pension and past service cost that had Company recognizes a liability rate is based on several high obligation. In countries where not been previously recognized. and expense when it can no quality corporate bond there is no deep market in such Past service cost is the change in longer withdraw the offer or, if indexes and yield curves in the bonds, the market rates on the present value of the defined earlier, when it has a detailed appropriate jurisdictions (rated government bonds are used. benefit obligation resulting formal plan which has been AA or higher by a recognized Actuarial gains and losses arising from a plan amendment or a communicated to employees or rating agency). Nominal interest from experience adjustments curtailment. Past service cost their representatives. rates vary worldwide due and changes in actuarial is recognized immediately in to exchange rates and local assumptions are charged or the consolidated statements of Other long-term employee inflation rates. credited to other comprehensive operations in the period in which benefits include various • Rate of compensation increase income in the period in which it arises. plans that depend on the – The rate of compensation they arise. Any asset resulting length of service, such as long increase reflects actual from this calculation is limited Voluntary retirement plans service and sabbatical awards, experience and the Company’s to the present value of available primarily correspond to the disability benefits and long long-term outlook, including refunds and reductions in future practical implementation of term compensated absences contractually agreed upon contributions to the plan. social plans or are linked to such as sick leave. The amount wage rate increases for collective agreements signed recognized as a liability is represented hourly employees. Current service cost, which is the with certain categories of the present value of benefit • Healthcare cost trend rate – The increase of the present value of employees. Early retirement plans obligations at the consolidated healthcare cost trend rate is the defined benefit obligation are those plans that primarily statements of financial position based on historical retiree cost resulting from the employee correspond to terminating an date, and all changes in the data, near-term healthcare service in the current period, is employee’s contract before the provision (including actuarial outlook, including appropriate recorded as an expense as part of normal retirement date. Liabilities gains and losses or past service cost control measures cost of sales and selling, general for early retirement plans are costs) are recognized in the implemented by the Company, and administrative expenses in recognized when the affected consolidated statements of and industry benchmarks and the consolidated statements of employees have formally been operations in the period in which surveys. operations. The net interest cost, informed and when amounts they arise. • Mortality and retirement rates which is the change during the owed have been determined – Mortality and retirement period in the net defined benefit using an appropriate actuarial The expense associated with rates are based on actual and liability or asset that arises from calculation. Liabilities relating the above pension plans and projected plan experience. the passage of time, is recognized to the early retirement plans are post-employment benefits, as as part of net financing costs in calculated annually on the basis well as the carrying amount the consolidated statements of of the number of employees of the related liability/asset on operations. Statements of Financial Position

Total deferred employee benefits including pension or other post-employment benefits, are as follows: December 31, 2016 2015 Pension plan benefits 3,061 3,149 Other post-employment benefits 4,801 5,549 Early retirement benefits 279 357 Defined benefit liabilities 8,141 9,055 Termination benefits 156 161 Total 8,297 9,216 The early retirement benefits and U.S. as a result of interest credits and of Represented employees hired after termination benefits are related allocations based on a percentage November 2005 and employees mainly to European countries ArcelorMittal USA’s Pension Plan is of pay. Benefits for wage and at locations which were acquired (Belgium, Spain, Germany and a non-contributory defined benefit salaried employees represented from International Steel Group Luxembourg). plan covering approximately 14% by a union are determined as a Inc. receive defined pension of its employees. Certain non- monthly benefit at retirement benefits through a multi-employer Pension Plans represented salaried employees based on fixed rate and service. pension plan that is accounted hired before 2003 receive pension This plan is closed to new for as a defined contribution plan, A summary of the significant benefits which are determined participants. due to the limited information defined benefit pension plans is as under a “Cash Balance” formula as made available to each of the follows: an account balance which grows 486 (as of December 31, 2015) Consolidated financial statements 119

different participating employers. plan. Transition dates extend from on employer contributions and and practice in each country, as On June 23, 2016, following January 1, 2015 to January 1, 2025 3.75% on employee contributions is the nature of the relationship the ratification by the United depending on the age and service will continue to apply to between the Company and Steelworkers (“USW”) of a new of each member. This transition the accumulated pre-2016 the governing bodies and their labor agreement valid until has no impact on the defined contributions. For contributions composition. In general terms, September 1, 2018, ArcelorMittal benefit obligation since it is with paid as from January, 1, 2016, governing bodies are required by change the contributions to respect to future service only. a new variable minimum law to act in the best interest of the the multi-employer plan in the guaranteed rate of return will plan members and are responsible amount of $2.70 per contributory ArcelorMittal Long Products apply. For 2016 the minimum for certain tasks related to the plan hour (retroactive to September 1, Canada sponsors several defined guaranteed rate of return was (e.g. setting the plan’s investment 2015) from $2.65. The contribution benefit and defined contribution 1.75% and this is also the best policy). rate will increase by $0.05 each pension plans for its various estimate for 2017. September 1 for the term of the groups of employees, with most In case of the funded pension contract. defined benefit plans closed to On April 25, 2016, the Company plans, the investment positions are new entrants several years ago. The agreed with unions in France to managed within an asset-liability Canada primary defined benefit pension cap the annual indexation of the matching (ALM) framework that plan sponsored by ArcelorMittal IRUS pension plan until 2026 and has been developed to achieve The primary pension plans are Long Products Canada provides to pay a lump sum amount to long-term investments that are those of ArcelorMittal Dofasco, certain unionized employees with cover the indexation obligation for in line with the obligations of the AMMIC and ArcelorMittal Long a flat dollar pension depending on subsequent years. These changes pension plans. Products Canada. an employee’s length of service. resulted in a gain of 96 recorded in cost of sales and selling, general A long-term investment strategy The ArcelorMittal Dofasco pension ArcelorMittal Long Products and administrative expenses in the has been set for ArcelorMittal’s plan is a hybrid plan providing the Canada entered into a six-year statements of operations. major funded pension plans, with benefits of both a defined benefit collective labor agreement during its asset allocation comprising of and defined contribution pension the third quarter of 2014 with its South Africa a mixture of equities securities, plan. The defined contribution Contrecoeur-West union group. fixed income securities, real estate component is financed by The defined benefit plan was Following an amendment of the and other appropriate assets. both employer and employee closed to new hires. A new defined rules of the ArcelorMittal South This recognizes that different contributions. The employer’s contribution type arrangement Africa Pension Fund (“the fund”) asset classes are likely to produce defined contribution is based on was established for new hires. approved by the Financial Services different long-term returns and a percentage of company profits. Board on November 9, 2015 and some asset classes may be more The defined benefit pension Brazil effective April 1, 2015, AMSA has volatile than others. The long-term plan was closed for new hires on discontinued its participation in investment strategy ensures, in December 31, 2010 and replaced The primary defined benefit the fund and therefore no longer particular, that investments are by a new defined contribution plans, financed through trust has any legal or constructive adequately diversified. pension plan with contributions funds, have been closed to new obligation to ensure the funding of related to age, service and entrants. Brazilian entities have all the plan. Accordingly, the related earnings. established defined contribution benefit obligation was settled and plans that are financed by the plan assets and unrecoverable At the end of 2012, ArcelorMittal employer and employee surplus were derecognized from Dofasco froze and capped contributions. the 2015 consolidated statements benefits for its hourly and salaried of financial position. employees who were still accruing Europe service under the defined benefit South African entities have plan and began transitioning these Certain European operating also implemented defined employees to the new defined subsidiaries maintain primarily contributions pension plans that contribution pension plan for unfunded defined benefit pension are financed by employer and future pension benefits. plans for a certain number of employee contributions. employees. Benefits are based The AMMIC defined benefit plan on such employees’ length of Others provides salary related benefit service and applicable pension for non-union employees and a table under the terms of individual A very limited number of defined flat dollar pension depending on agreements. Some of these benefit pension plans are in place an employee’s length of service unfunded plans have been closed in other countries. for union employees. This plan to new entrants and replaced by was closed for new non-union defined contributions pension The majority of the funded defined hires on December 31, 2009 and plans for active members financed benefit pension plans described replaced by a defined contribution by employer and employee earlier provide benefit payments pension plan with contributions contributions. from trustee-administered funds. related to age and service. In ArcelorMittal also sponsors a 2014, AMMIC communicated As from December 2015 new number of unfunded plans where to its non-union employees Belgian legislation modifies the the Company meets the benefit who were still benefiting under minimum guaranteed rates of payment obligation as it falls due. the defined benefit plan that return applicable to Belgian Plan assets held in trusts are legally they would be transitioning to Defined Contribution Plans. For separated from the Company and a defined contribution pension insured plans, the rates of 3.25% are governed by local regulations 120 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, 2016 United South Total States Canada Brazil Europe Africa Other Change in benefit obligation Benefit obligation at beginning of the period 9,883 3,623 2,928 495 2,601 17 219 Current service cost 112 31 25 2 50 - 4 Interest cost on DBO 406 151 125 66 52 1 11 Past service cost - Plan amendments (80) 12 4 - (96) - - Plan participants’ contribution 4 - 1 1 2 - - Curtailments and settlements (10) - - - (4) - (6) Actuarial (gain) loss 388 71 65 82 170 (2) 2 Demographic assumptions (12) (21) 1 - 8 - - Financial assumptions 370 80 23 96 170 - 1 Experience adjustment 30 12 41 (14) (8) (2) 1 Benefits paid (633) (261) (186) (42) (129) (3) (12) Foreign currency exchange rate differences and other movements (16) - 91 100 (64) 2 (145)1 Benefit obligation at end of the period 10,054 3,627 3,053 704 2,582 15 73

Change in plan assets Fair value of plan assets at beginning of the period 6,828 2,795 2,633 498 753 20 129 Interest income on plan assets 308 104 111 72 17 2 2 Return on plan assets greater/(less) than discount rate 273 126 91 30 24 2 - Employer contribution 124 16 64 21 23 - - Plan participants’ contribution 4 - 1 1 2 - - Settlements (4) - - - (4) - - Benefits paid (529) (261) (185) (42) (38) (3) - Foreign currency exchange rate differences and other movements 44 (12) 80 104 - 3 (131)1 Fair value of plan assets at end of the period 7,048 2,768 2,795 684 777 24 -

Present value of the wholly or partly funded obligation (8,730) (3,593) (3,040) (703) (1,379) (15) - Fair value of plan assets 7,048 2,768 2,795 684 777 24 - Net present value of the wholly or partly funded obligation (1,682) (825) (245) (19) (602) 9 - Present value of the unfunded obligation (1,324) (34) (13) (1) (1,203) - (73) Prepaid due to unrecoverable surpluses (34) - (18) (3) (4) (9) - Net amount recognized (3,040) (859) (276) (23) (1,809) - (73)

Net assets related to funded obligations 21 - 18 - 3 - - Recognized liabilities (3,061) (859) (294) (23) (1,812) - (73)

Change in unrecoverable surplus Unrecoverable surplus at beginning of the period (80) - (21) (53) (3) (3) - Interest cost on unrecoverable surplus (10) - (1) (8) - (1) - Change in unrecoverable surplus in excess of interest 67 - 5 67 (1) (4) - Exchange rates changes (11) - (1) (9) - (1) - Unrecoverable surplus at end of the period (34) - (18) (3) (4) (9) -

1 Includes the derecognition of the benefit obligation and plan assets in ArcelorMittal Point Lisas for 136 and 127, respectively. Consolidated financial statements 121

Year Ended December 31, 2015 United South Total States Canada Brazil Europe Africa Other 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 (1,099) (31)1 (605) (228) (125)2 (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 (753) (31)1 (523) (227) 112 2 (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 Includes a 29 and a 20 decrease in benefit obligation and plan assets, respectively, following the classification of LaPlace as held for sale at December 31, 2015.

2 Includes a 174 increase in benefit obligation and plan assets following the above mentioned change in Belgian legislation, resulting into minimum guaranteed benefits at the date of leaving or retirement and consequently the reclassification of Belgian defined contribution plans as defined benefit plans.

122 Consolidated financial statements

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

Year Ended December 31, 2016 United South Net periodic pension cost (benefit) Total States Canada Brazil Europe Africa Other Current service cost 112 31 25 2 50 - 4 Past service cost - Plan amendments (80) 12 4 - (96) - - Past service cost - Curtailments (6) - - - - - (6) Net interest cost/(income) on net DB liability/(asset) 108 47 15 2 35 - 9 Total 134 90 44 4 (11) - 7

Year Ended December 31, 2015 United South Net periodic pension cost (benefit) Total States Canada Brazil Europe Africa Other 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 United South Net periodic pension cost (benefit) Total States Canada Brazil Europe Africa Other 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

Other post-employment benefits

ArcelorMittal’s principal operating subsidiaries in the United States, Canada, Europe and certain other countries, provide other post-employment benefits (“OPEB”), including medical benefits and life insurance benefits, to retirees. Substantially all union-represented ArcelorMittal USA employees are covered under post-employment life insurance and medical benefit plans that require a level of cost share from retirees. The post- employment life insurance benefit formula used in the determination of post-employment benefit cost is primarily based on a specific amount for hourly employees. ArcelorMittal USA does not pre-fund most of these post-employment benefits.

On June 23, 2016, following the ratification by the United Steelworkers (“USW”) of a new labor agreement valid until September 1, 2018, ArcelorMittal performed a number of changes mainly related to healthcare post-employment benefits in its subsidiary ArcelorMittal USA. Also, in accordance with the new agreement, required payments into an existing Voluntary Employee Beneficiary Association (“VEBA”) trust were fixed at 5% of ArcelorMittal USA’s operating income of their separate financial statements after the first quarter of 2018. The changes resulted in a gain of 832 recorded in cost of sales in the statements of operations.

The Company has significant assets mostly in the aforementioned VEBA post-employment benefit plan. These assets consist of 70% in fixed income and 30% in equities. The total fair value of the assets in the VEBA trust was 545 as of December 31, 2016. Consolidated financial statements 123

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

Year Ended December 31, 2016 United Total States Canada Europe Others Change in benefit obligation Benefit obligation at beginning of the period 6,251 4,995 573 516 167 Current service cost 100 59 7 27 7 Interest cost on DBO 249 203 25 12 9 Past service cost - Plan amendments (851) (844) (3) (4) - Plan participants’ contribution 18 18 - - - Actuarial (gain) loss (48) (62) 1 8 5 Demographic assumptions (184) (154) (32) - 2 Financial assumptions 189 160 23 14 (8) Experience adjustment (53) (68) 10 (6) 11 Benefits paid (323) (240) (31) (40) (12) Foreign currency exchange rate differences and other movements 4 541 20 (27) (43) Benefit obligation at end of the period 5,400 4,183 592 492 133

Change in plan assets Fair value of plan assets at beginning of the period 706 698 - 8 - Interest income on plan assets 26 26 - - - Return on plan assets greater/(less) than discount rate 5 4 - 1 - Employer contribution 86 86 - - - Plan participants’ contribution 18 18 - - - Benefits paid (242) (240) - (2) - Fair value of plan assets at end of the period 599 592 - 7 -

Present value of the wholly or partly funded obligation (821) (760) - (61) - Fair value of plan assets 599 592 - 7 - Net present value of the wholly or partly funded obligation (222) (168) - (54) - Present value of the unfunded obligation (4,579) (3,423) (592) (431) (133) Net amount recognized (4,801) (3,591) (592) (485) (133)

1 Includes a 53 increase in benefit obligation retained by the Company in respect of Steelton, which has been classified as held for sale at December 31, 2016 and 2015 (see note 2.3.2). 124 Consolidated financial statements

Year Ended December 31, 2015 United Total States 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 (286) (69)1 (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.

Consolidated financial statements 125

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

Year Ended December 31, 2016 United Components of net periodic OPEB cost (benefit) Total States Canada Europe Others Current service cost 100 59 7 27 7 Past service cost - Plan amendments (851) (844) (3) (4) - Net interest cost/(income) on net DB liability/ (asset) 223 177 25 12 9 Actuarial (gains)/losses recognized during the year 1 - - 1 - Total (527) (608) 29 36 16

Year Ended December 31, 2015 United Components of net periodic OPEB cost (benefit) Total States 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 United Components of net periodic OPEB cost (benefit) Total States 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

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

Year Ended December 31, 2016 2015 2014 Net periodic pension cost 134 241 264 Net periodic OPEB cost (527) 317 327 Total (393) 558 591

Cost of sales (725) 197 158 Selling, general and administrative expenses - 27 30 Financing costs - net 332 334 403 Total (393) 558 591 126 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, 2016 United South

States Canada Brazil Europe Africa Other Equity Securities 50% 53% - 3% 40% - - Asset classes that have a quoted market price in an active market 25% 46% - 3% 40% - - Asset classes that do not have a quoted market price in an active market 25% 7% - - - - Fixed Income Securities (including cash) 37% 47% 98% 72% 50% - - Asset classes that have a quoted market price in an active market 2% 35% 98% 71% 50% - - Asset classes that do not have a quoted market price in an active market 35% 12% - 1% - - Real Estate 4% - 1% - 2% - - Asset classes that have a quoted market price in an - - - - 2% - active market - Asset classes that do not have a quoted market price in an active market 4% - 1% - - - Other 9% - 1% 25% 8% - - Asset classes that have a quoted market price in an active market - - 1% 5% 8% - - Asset classes that do not have a quoted market price in an active market 9% - - 20% - - Total 100% 100% 100% 100% 100% -

December 31, 2015 United South

States Canada Brazil Europe Africa Other 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%

These assets include investments in ArcelorMittal stock of approximately 2, 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 612 and 150 in 2016 and 2015, 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 127

December 31, 2016 United South

States Canada Brazil Europe Africa Equity Securities 47% 52% 2% 4% 38% Fixed Income Securities (including cash) 37% 48% 91% 71% 51% Real Estate 4% - 3% - 4% Other 12% - 4% 25% 7% Total 100% 100% 100% 100% 100% Assumptions used to determine benefit obligations at December 31,

Pension Plans Other Post-employment Benefits 2016 2015 2014 2016 2015 2014 Discount rate Range 1.60% - 16% 2.05% - 17% 1.90% - 17% 0.9% - 7.65% 0.9% - 30% 1.80% - 25% Weighted average 3.92% 4.21% 4.29% 4.19% 4.49% 4.05% Rate of compensation increase Range 1.80% - 10% 2% - 11% 2% - 11% 2% - 32% 2% - 27% 2% - 21% Weighted average 3.11% 3.11% 3.40% 3.38% 3.98% 3.64% Healthcare Cost Trend Rate Other Post-employment Benefits 2016 2015 2014 Healthcare cost trend rate assumed Range 1.80% - 5.60% 2% - 7% 2% - 5.30% Weighted average 4.51% 4.75% 4.80%

Cash contributions and maturity Asset volatility In 2014, the Society of Actuaries Multi-employer plans profile of the plans published new mortality base The plan liabilities are calculated tables and new mortality ArcelorMittal participates in one In 2017, the Company is expecting using a discount rate set with improvement scales in the United material multi-employer pension its cash contributions to amount to reference to corporate bond yields; States. Use of these new mortality plan in the United States. Under 348 for pension plans, 158 for other if plan assets underperform this assumptions resulted in increasing multi-employer plans, several post-employment benefits plans, yield, this will create a deficit. In the pension and OPEB defined participating employers make 106 for defined contribution plans most countries with funded plans, benefit obligations by 85 and 271, contributions into a pension and 70 for United States multi- plan assets hold a significant respectively. In 2015, the Society plan. The assets of the plan are employer plans. Cash contributions portion of equities, which are of Actuaries updated the mortality not limited to the participants to defined contribution plans and expected to outperform corporate projection scale, which resulted in of a particular employer. If an to United States multi-employer bonds in the long-term while decreasing the pension and OPEB employer is unable to make plans sponsored by the Company, providing volatility and risk in the defined benefit obligations by 36 required contributions to the plan, were respectively 95 and 66 in short-term. As the plans mature, and 57, respectively. any unfunded obligations may be 2016. ArcelorMittal intends to reduce borne by the remaining employers. the level of investment risk by Healthcare cost trend rate Additionally, if an employer At December 31, 2016, the investing more in assets that better withdraws from the plan, it may weighted average duration of the match the liabilities. However, The majority of the OPEB plans’ be required to pay an amount liabilities related to the pension ArcelorMittal believes that due to benefit obligations are linked to based on the underfunded status and other post-employment the long-term nature of the plan the change in the cost of various of the plan. As of December 31, benefits plans were 11 years (2015: liabilities, a level of continuing health care components. Future 2015, which is the latest period for 12 years) and 13 years (2015: 14 equity investment is an appropriate healthcare cost will vary based which information is available, the years), respectively. element of a long-term strategy to on several factors including multi-employer pension plan had a manage the plans efficiently. price inflation, utilization rate, total actuarial liability of 4,687 and Risks associated with defined technology advances, cost shifting assets with market value of 3,875 benefit plans Life expectancy and cost containing mechanisms. A for a funded ratio of about 83%. higher healthcare cost trend would ArcelorMittal represented roughly Through its defined benefit The majority of the plans provide lead to higher OPEB plan benefit 28% of total contributions made to pension plans and OPEB plans, benefits for the life of the covered obligations. the plan in the past three years. ArcelorMittal is exposed to members, so increases in life a number of risks, the most expectancy will result in an increase In 2015, the healthcare cost The above sensitivities reflect significant of which are detailed in the plans’ benefit obligations. trend rate assumption in the the effect of changing one below: Assumptions regarding future United States was adjusted, assumption at a time. Actual mortality rates have been set which resulted in increasing the economic factors and conditions Changes in bond yields considering published statistics OPEB defined benefit obligations often affect multiple assumptions and where possible, ArcelorMittal’s by 232. Additionally recent simultaneously, and the effects of A decrease in corporate bond own population’s experience. In experience, which is starting point changes in key assumptions are yields will increase plan liabilities, 2016, the current longevities at for projecting future costs, was not necessarily linear. although this will be partially offset retirement underlying the values of unfavorable, resulting in increasing by an increase in the value of the the defined benefit obligation were the OPEB defined benefit plans’ bond holdings. approximately 22 years. obligations by an additional 301. 128 Consolidated financial statements

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, 2016, the defined benefit obligation for pension plans was 10,054):

Effect on 2017 Pre-Tax Pension Expense Effect of December 31, (sum of service cost and interest cost) 2016 DBO Change in assumption 100 basis points decrease in discount rate (44) 1,212 100 basis points increase in discount rate 32 (1,009) 100 basis points decrease in rate of compensation (11) (154) 100 basis points increase in rate of compensation 13 169 1 year increase of the expected life of the beneficiaries 10 231

The following table illustrates the sensitivity to a change of the significant actuarial assumptions related to ArcelorMittal’s OPEB plans (as of December 31, 2016 the defined benefit obligation for post-employment benefit plans was 5,400):

Effect on 2017 Pre-Tax OPEB Expense Effect of December 31, (sum of service cost and interest cost) 2016 DBO Change in assumption 100 basis points decrease in discount rate (1) 795 100 basis points increase in discount rate - (651) 100 basis points decrease in healthcare cost trend rate (43) (613) 100 basis points increase in healthcare cost trend rate 53 706 1 year increase of the expected life of the beneficiaries 9 177

The above sensitivities reflect the effect of changing one assumption at a time. Actual economic factors and conditions often affect multiple assumptions simultaneously, and the effects of changes in key assumptions are not necessarily linear.

7.3 Share-based payments model and the market value of the For the restricted share units and the ArcelorMittal Shares plan that shares at the date of the grant after performance share units, the fair expired in 2009), ArcelorMittal ArcelorMittal issues equity-settled deduction of dividend payments value determined at the grant may grant options to purchase share-based payments to certain during the vesting period, date of the equity-settled share- common shares to senior employees, including stock respectively. Where the fair value based payments is expensed on management of ArcelorMittal and options, restricted share units and calculation requires modeling a straight line method over the its associates for up to 100,000,000 performance share units. Equity- of the Company’s performance vesting period and adjusted for the shares of common shares. The settled share-based payments are against other market index fair effect of non market-based vesting exercise price of each option measured at fair value (excluding value is measured using the Monte conditions. equals not less than the fair market the effect of non market-based Carlo pricing model to estimate value of ArcelorMittal shares on vesting conditions) at the date of the forecasted target performance Stock Option Plans the grant date, with a maximum grant. The fair value determined at goal for the company and its peer term of 10 years. Options are the grant date of the equity-settled companies. The expected life used Prior to the May 2011 annual granted at the discretion of share-based payments is expensed in the model has been adjusted, general shareholders’ meeting ArcelorMittal’s Appointments, on a graded vesting basis over based on management’s best adoption of the ArcelorMittal Remuneration and Corporate the vesting period, based on estimate, for the effects of non- Equity Incentive Plan described Governance Committee, or its the Company’s estimate of the transferability, exercise restrictions below, ArcelorMittal’s equity-based delegate. The options vest either shares that will eventually vest and behavioral considerations. In incentive plan took the form of a ratably upon each of the first three and adjusted for the effect of non addition, the expected annualized stock option plan known as the anniversaries of the grant date, or, market-based vesting conditions. volatility has been set by reference Global Stock Option Plan. in total, upon the death, disability For stock options, restricted share to the implied volatility of options or retirement of the participant. units and performance share available on ArcelorMittal shares Under the terms of the units, fair value is measured using in the open market, as well as, ArcelorMittal Global Stock Option Dates of grant and exercise prices the Black-Scholes-Merton pricing historical patterns of volatility. Plan 2009-2018 (which replaced 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

No options were granted during the years ended December 31, 2016, 2015 and 2014. Consolidated financial statements 129

The compensation expense recognized for stock option plans was nil for each of the years ended December 31, 2016, 2015, and 2014.

Option activity with respect to ArcelorMittal Shares and ArcelorMittal Global Stock Option Plan 2009-2018 is summarized below as of and for each of the years ended December 31, 2016, 2015, and 2014:

Range of Weighted Exercise Average Number of Prices Exercise Price Options (per option) (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 Expired (3,144,752) 30.66– 78.44 41.72 Outstanding, December 31, 2016 14,047,320 21.14 – 78.44 51.06

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 Exercisable, December 31, 2016 14,047,320 21.14 – 78.44 51.06

The following table summarizes information about total stock options of the Company outstanding as of December 31, 2016:

Options Outstanding Weighted average Options Exercise Prices Number of contractual life exercisable (per option) options (in years) (number of options) Maturity $30.66 3,834,250 3.59 3,834,250 August 3, 2020 36.38 3,647,250 2.59 3,647,250 August 4, 2019 21.14 2,585 1.86 2,585 November 10, 2018 78.44 3,803,000 1.60 3,803,000 August 5, 2018 70.81 5,000 0.95 5,000 December 11, 2017 61.09 2,755,235 0.59 2,755,235 August 2, 2017 $21.14 – $78.44 14,047,320 2.20 14,047,320

Long-Term Incentives: Equity-Based ArcelorMittal Equity Incentive employees. RSUs are subject to (and in 2016, the CEO Office) Incentives (Share Unit Plans) Plan. In 2016, a special grant was “cliff vesting” after three years, received PSU grants only under approved in order to align the grant with 100% of the grant vesting on the GMB PSU Plan instead of the On May 10, 2011, the annual with the strategic plan put in place the third anniversary of the grant ArcelorMittal Equity Incentive Plan. general meeting of shareholders by ArcelorMittal. contingent upon the continued approved the ArcelorMittal Equity active employment of the eligible PSUs vest three years after their Incentive Plan, a new equity-based The maximum number of PSUs employee within the Company. date of grant subject to the eligible incentive plan that replaced the (and RSUs previously) available Between 500 and 700 of the employee’s continued employment Global Stock Option Plan. The for grant during any given year is Company’s most senior managers with the Company and the ArcelorMittal Equity Incentive Plan subject to the prior approval of are eligible for RSUs. fulfillment of targets related to the is intended to align the interests of the Company’s shareholders at following performance measures: the Company’s shareholders and the annual general meeting. The The grant of PSUs under the return on capital employed (ROCE) eligible employees by allowing annual shareholders’ meeting ArcelorMittal Equity Incentive and a strategic measure which them to participate in the success on May 4, 2016 approved the Plan aims to serve as an effective was total cost of employment of the Company. The ArcelorMittal maximum to be granted until the performance-enhancing scheme (in U.S. dollars per tonne) for the Equity Incentive Plan provides next annual shareholders’ meeting. based on the employee’s steel business (TCOE) and the for the grant of RSUs and PSUs For the period from the May 2016 contribution to the eligible mining volume plan and ROCE to eligible Company employees annual general shareholders’ achievement of the Company’s for the Mining segment until the (including the Executive Officers) meeting to the May 2017 annual strategy. Awards in connection with 2013 grant. As from 2014, most and is designed to incentivize general shareholders’ meeting, a PSUs are subject to the fulfillment of the Steel Business Units have employees, improve the Company’s maximum of 30,000,000 PSUs may of cumulative performance kept only ROCE as a performance long-term performance and retain be allocated to eligible employees criteria over a three year period measure and the Mining segment key employees. On May 8, 2013, under the ArcelorMittal Equity from the date of the PSU grant. continued with ROCE and mining the annual general meeting of Incentive Plan and the GMB PSU The employees eligible to receive volume plan. In case the level shareholders approved the GMB Plan combined. PSUs are a sub-set of the group of achievement of performance PSU Plan, which provides for the of employees eligible to receive is below threshold, there is grant of PSUs to GMB members ArcelorMittal Equity Incentive Plan RSUs. The target group for PSU no vesting, and the rights are (and is now applicable to the CEO grants initially included the Chief automatically forfeited. Office). Until the introduction RSUs granted under the Executive Officer and the other of the GMB PSU Plan in 2013, ArcelorMittal Equity Incentive GMB members. However, from In 2016, in order to ensure GMB members were eligible to Plan are designed to provide a 2013 onwards, the Chief Executive achievement of the Action 2020, receive RSUs and PSUs under the retention incentive to eligible Officer and other GMB members ArcelorMittal made a special grant 130 Consolidated financial statements

(“Special Grant”) to qualifying PSU plan for CEO Office (formally Officer and 80% of base salary for of the median TSR and 100% for employees (including Executive GMB PSU Plan) other executive officers. Each PSU achieving 120% of the median Officers), instead of the standard may give the right to up to two TSR. None of the PSUs will vest if grant. The value of the Special Grant The GMB PSU Plan was designed shares of the Company in 2013, the Company’s TSR performance at grant date is based generally on to enhance the long-term and each PSU from the 2014 grant is below 100% of that of the peer a specified percentage of the base performance of the Company and may convey the right to up to one group. salary depending on the position align the members of the GMB and a half shares. of the employee at grant date. The to the Company’s objectives. The • For 25% of PSUs, performance vesting is subject to continued GMB PSU Plan is now applicable In order to ensure achievement of is compared to the median of active employment with the to the CEO Office. This PSU Plan the Action 2020 specifically by the the S&P 500 companies. The ArcelorMittal group and to yearly complements ArcelorMittal’s CEO Office, ArcelorMittal made a percentage of PSUs vesting performance of ROCE targets and existing program of annual special grant in 2016 instead of the will be 50% for achieving other strategic objectives within performance-related bonuses standard grant. The value of this performance equal to 100% of the Business Units. which is the Company’s reward special grant at grant date equaled the index performance of the system for short-term performance 150% of the base salary for the S&P 500 companies and 100% The Special Grant has been split and achievements. The main CEO Office members. According for achieving a performance 2% into two parts: a target grant objective of this PSU Plan is to to this special grant, each member better than the index per annum which will vest if the performance be an effective performance- of the CEO Office was eligible for over performance. None of the is at target and an over- enhancing scheme for members Performance Share Unit (“PSU”) PSUs will vest if the Company’s performance grant which will vest based on the achievement of grants under the PSU plan for CEO TSR performance is below 100% if the performance is at 120% or ArcelorMittal’s strategy aimed at Office. Awards under the Special of index performance of the S&P above. Any PSU gives the right to creating a measurable long-term Grant are subject to the fulfillment 500 companies. maximum one ArcelorMittal Share shareholder value. of cumulative performance criteria: at vesting. 50% would vest after three years The other 50% of the criteria to be The Special Grant provides for a The members of the CEO Office (in 2020, “CEO PSU I”) and 50% met to trigger vesting of the PSUs vesting in two parts: will be eligible for PSU grants. This would vest after five years (in is based on the development of PSU Plan provides for cliff vesting 2022, “CEO PSU II”). 50% of the Earnings Per Share (EPS), defined - 50% would vest after three years on the third year anniversary of the PSUs granted to each member of as the amount of earnings per (in 2019, “PSU I”) and, grant date, under the condition the CEO Office is eligible to vest share outstanding compared to - 50% would vest after five years that the relevant CEO Office based on the Company’s Total a peer group of companies. The (in 2021, “PSU II”) member continues to be actively Shareholder Return (“TSR”) defined percentage of PSUs vesting will employed by the ArcelorMittal as the share price at the end of be 50% for achievement of 100% The allocation of PSUs to group on that date. If the CEO period minus the share price at of the median EPS, 100% for eligible employees under Office member is retired on start of period plus any dividend achieving 120% of the median EPS. ArcelorMittal Equity Incentive that date or in case of an early paid divided by the share price Plan has been reviewed by the retirement by mutual consent, the at the start of the period. “Start of The allocation of PSUs to eligible Appointments, Remuneration relevant CEO Office member will period” and “end of period” will CEO Office members is reviewed & Corporate Governance not automatically forfeit PSUs and be defined by the Appointments, by the ARCG Committee of Committee, comprised of three pro rata vesting will be considered Remuneration & Corporate the Board of Directors, which is independent directors, which at the end of the vesting period Governance Committee of the comprised of three independent makes a recommendation to at the sole discretion of the Board of Directors. The TSR will directors, and which makes a the full Board of Directors. The Appointments, Remuneration & then be compared with the TSR of proposal and recommendation Committee has also decided Corporate Governance Committee a peer group of companies and the to the full Board of Directors. the criteria for granting PSUs of the Board of Directors. Awards TSR of the companies forming the The vesting criteria of the PSUs and made its recommendation under this PSU Plan are subject S&P 500 index, each counting for are also monitored by the ARCG to the Board of Directors. These to the fulfillment of cumulative half of the weighting. Committee. criteria are based on the principle performance criteria over a three- of rewarding for performance year period from the date of the • For 25% of PSUs, performance The following table summarizes upon the achievement of clear PSU grant. The value of the grant is compared to the peer group. the Company’s share unit plans and measurable metrics for at grant date will equal one year of The percentage of PSUs vesting outstanding as of December 31, shareholder value creation. base salary for the Chief Executive will be 50% for achieving 100% 2016:

At Grant date Number of shares as of December 31, 2016 Type of Number of Number of Fair value per Shares Shares Grant date plan shares beneficiaries Maturity share outstanding exited Shares forfeited June 30, 2016 PSU II 10,417,065 554 January 1, 2021 4.39 10,230,765 - 186,300 June 30, 2016 CEO PSU II 459,805 2 January 1, 2022 5.54 459,805 - - June 30, 2016 PSU I 10,417,065 554 January 1, 2019 4.58 10,230,765 - 186,300 June 30, 2016 CEO PSU I 459,806 2 January 1, 2020 3.56 459,806 - - December 18, 2015 PSU 887,643 322 January 1, 2019 3.83 799,343 - 88,300 December 18, 2015 RSU 1,105,361 576 December 18, 2018 3.83 991,555 2,071 111,735 June 30, 2015 GMB PSU 464,305 4 June 30, 2018 8.53 464,305 - - December 17, 2014 PSU 979,870 353 January 1, 2018 10.28 786,570 - 193,300 December 17, 2014 RSU 1,173,910 620 December 17, 2017 10.28 958,804 8,808 206,298 June 27, 2014 GMB PSU 843,376 6 June 27, 2017 16.85 328,024 - 515,352 September 27, 2013 PSU 504,075 384 January 1, 2017 13.17 358,695 - 145,380 Total 27,712,281 $3.56– $16.85 26,068,437 10,879 1,632,965

Consolidated financial statements 131

The compensation expenses recognized for RSUs and PSUs were immaterial for the years ended December 31, 2016, 2015 and 2014.

Share unit plan activity is summarized below as of and for each year ended December 31, 2016, 2015 and 2014:

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, 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 Granted * - - 21,758,442 4.49 Exited (1,693,700) 12.75 (59,443) 12.37 Forfeited (317,119) 8.71 (1,692,492) 12.59 Outstanding, December 31, 2016 1,950,359 7.00 24,118,078 5.03 * Including 4,701 over-performance shares granted for the targets achievement of the PSU grant March 29, 2013. Note 8: Provisions, contingencies raised, by starting to implement to current operations or to an third parties who sold assets to and commitments the plan or announcing its main existing condition caused by ArcelorMittal or purchased assets features. past operations, and which do from it subject to environmental ArcelorMittal recognizes provisions not contribute to future revenue liabilities. ArcelorMittal also for liabilities and probable losses ArcelorMittal records asset generation or cost reduction, considers, among other things, the that have been incurred when it retirement obligations (“ARO”) are expensed. Liabilities are activity to date at particular sites, has a present legal or constructive initially at the fair value of the legal recorded when environmental information obtained through obligation as a result of past events, or constructive obligation in the assessments and/or remedial consultation with applicable it is probable that the Company will period in which it is incurred and efforts are probable and the cost regulatory authorities and third- be required to settle the obligation capitalizes the ARO by increasing can be reliably estimated based party consultants and contractors and a reliable estimate of the the carrying amount of the related on ongoing engineering studies, and its historical experience with amount of the obligation can be non-current asset. The fair value discussions with the environmental other circumstances judged to be made. If the effect of the time value of the obligation is determined authorities and other assumptions comparable. Due to the numerous of money is material, provisions are as the discounted value of the relevant to the nature and extent variables associated with these discounted using a current pre-tax expected future cash flows. The of the remediation that may be judgments and assumptions, rate that reflects, where appropriate, liability is accreted to its present required. The ultimate cost to and the effects of changes in the risks specific to the liability. value through net financing ArcelorMittal is dependent upon governmental regulation and Where discounting is used, the cost and the capitalized cost is factors beyond its control such as environmental technologies, increase in the provision due to the depreciated in accordance with the the scope and methodology of the both the precision and reliability passage of time is recognized as Company’s depreciation policies remedial action requirements to be of the resulting estimates of the a financing cost. Future operating for property, plant and equipment. established by environmental and related contingencies are subject expenses or losses are excluded Subsequently, when reliably public health authorities, new laws to substantial uncertainties. As from recognition as provisions as measurable, ARO is recorded on or government regulations, rapidly estimated costs to remediate they do not meet the definition of the consolidated statements of changing technology and the change, the Company will reduce a liability. Contingent assets and financial position increasing the outcome of any potential related or increase the recorded liabilities contingent liabilities are excluded cost of the asset and the fair value litigation. Environmental liabilities through write backs or additional from recognition in the statements of the related obligation. Foreign are discounted if the aggregate accruals in the consolidated of financial position. exchange gains or losses on AROs amount of the obligation and the statements of operations. denominated in foreign currencies amount and timing of the cash ArcelorMittal does not expect these Provisions for onerous contracts are recorded in the consolidated payments are fixed or reliably environmental issues to affect the are recorded in the consolidated statements of operations. determinable. utilization of its plants, now or in statements of operations when the future. it becomes known that the ArcelorMittal is subject to changing The estimates of loss contingencies unavoidable costs of meeting the and increasingly stringent for environmental matters ArcelorMittal is currently and obligations under the contract environmental laws and regulations and other contingencies are may in the future be involved in exceed the economic benefits concerning air emissions, water based on various judgments litigation, arbitration or other legal expected to be received. Assets discharges and waste disposal, as and assumptions including the proceedings. Provisions related to dedicated to the onerous contracts well as certain remediation activities likelihood, nature, magnitude and legal and arbitration proceedings are tested for impairment before that involve the clean-up of soil timing of assessment, remediation are recorded in accordance with the recognizing a separate provision for and groundwater. ArcelorMittal and/or monitoring activities and principles described above. the onerous contract. is currently engaged in the the probable cost of these activities. investigation and remediation of In some cases, judgments and Most of these claims involve Provisions for restructuring are environmental contamination at assumptions are made relating to highly complex issues. Often these recognized when and only when a number of its facilities. Most of the obligation or willingness and issues are subject to substantial these are legacy obligations arising a detailed formal plan exists and a ability of third parties to bear a uncertainties and, therefore, from acquisitions. valid expectation in those affected proportionate or allocated share of the probability of loss and an Environmental costs that relate by the restructuring has been cost of these activities, including estimation of damages are difficult 132 Consolidated financial statements

to ascertain. Consequently, for prejudice the Company’s position The assessments are based on 8.1 Provisions overview a large number of these claims, in the ongoing legal proceedings estimates and assumptions that ArcelorMittal is unable to make a or in any related settlement have been deemed reasonable The movements of provisions were reliable estimate of the expected discussions. Accordingly, in these by management. The Company as follows: financial effect that will result cases, the Company has disclosed believes that the aggregate from ultimate resolution of information with respect to the provisions recorded for the above the proceeding. In those cases, nature of the contingency, but has matters are adequate based upon ArcelorMittal has disclosed not disclosed its estimate of the currently available information. information with respect to range of potential loss. However, given the inherent the nature of the contingency. uncertainties related to these ArcelorMittal has not accrued a In the cases in which quantifiable cases and in estimating contingent provision for the potential outcome fines and penalties have been liabilities, the Company could, in of these cases. assessed, the Company has the future, incur judgments that indicated the amount of such have a material adverse effect In a limited number of ongoing fine or penalty or the amount on its results of operations in any cases, the Company was able to of provision accrued that is the particular period. The Company make a reliable estimate of the estimate of the probable loss. considers it highly unlikely, expected loss or range of probable however, that any such judgments loss and has accrued a provision These assessments can involve a could have a material adverse for such loss, but believes that series of complex judgments about effect on its liquidity or financial publication of this information on a future events and can rely heavily condition. case-by-case basis would seriously on estimates and assumptions.

Balance at Effects of Foreign Balance at December 31, Deductions/ Exchange and other December 31, 2014 Additions * Payments movements 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)1 463 Tax claims 271 22 (36) (68) 189 Other legal claims 289 140 (100) (60) 269 Other unasserted claims 198 - (193)2 - 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 1,024 770 Long-term provisions 1,587 1,434 2,611 2,204

Balance at Effects of Foreign Balance at December 31, Deductions/ Exchange and other December 31, 2015 Additions * Payments movements 2016 Environmental (see note 8.2) 697 108 (65) 5 745 Asset retirement obligations (see note 8.2) 297 70 (4) (5) 358 Site restoration 64 8 (20) (9) 43 Staff related obligations 167 48 (63) 16 168 Voluntary separation plans 97 25 (68) 25 79 Litigation and other (see note 8.2) 463 66 (71) (45) 413 Tax claims 189 20 (22) 24 211 Other legal claims 269 46 (44) (69)3 202 Other unasserted claims 5 - (5)2 - - Commercial agreements and onerous contracts 273 18 (254)4 (11) 26 Other 146 31 (51) (11) 115 2,204 374 (596) (35) 1,947 Short-term provisions 770 426 Long-term provisions 1,434 1,521 2,204 1,947 * Additions exclude provisions written back or utilized during the same year. 1 Effects of foreign exchange and other movements in 2015 are mainly related to the appreciation of USD against local currencies primarily in Brazil (104). 2 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 and 5 in 2015 and 2016, respectively. 3 On November 16, 2016, upon settlement of the competition commission case in South Africa, the provision of 84 recorded for this case was reclassified to “other long-term obligations” (65) and “Accrued expenses and other liabilities” (19). 4 Deductions and payments for commercial agreements and onerous contracts reflect the increase in prices for raw materials and steel prices. Consolidated financial statements 133

There are uncertainties regarding 8.2 Environmental liabilities and environmental remediation, the EPA conditionally approved the timing and amount of the legal proceedings including projects relating to the RFI. ArcelorMittal USA has provisions above. Changes the reclamation of industrial executed Orders on Consent to in underlying facts and Environmental Liabilities properties. In some cases, soil perform certain interim corrective circumstances for each provision or groundwater contamination measures while advancing the could result in differences in ArcelorMittal’s operations are requiring remediation is present Corrective Measures Study. These the amounts provided for and subject to a broad range of laws at both currently operating and include installation and operation the actual outflows. In general, and regulations relating to the historical sites where ArcelorMittal of a ground water treatment provisions are presented on a protection of human health has a continuing obligation. In system and dredging of a local non-discounted basis due to and the environment at its other cases, we are required to waterway known as Smokes Creek. the uncertainties regarding the multiple locations and operating conduct studies to determine the A Corrective Measure Order on timing or the short period of their subsidiaries. As of December 31, extent of contamination, if any, Consent was executed in 2009 for expected consumption. 2016, excluding asset retirement that exists at these sites. other site remediation activities. obligations, ArcelorMittal had ArcelorMittal USA’s provisions for Environmental provisions established provisions of 745 for In 1990, ArcelorMittal USA’s Indiana environmental liabilities include have been estimated based on environmental remedial activities Harbor East facility was party to a approximately 36 for anticipated internal and third-party estimates and liabilities. The provisions for lawsuit filed by the United States remediation and post-remediation of contaminations, available all operations by geographic Environmental Protection Agency activities at this site. The remediation technology, and area were 414 in Europe, 161 in (the “EPA”) under the United provisioned amount is based on environmental regulations. the United States, 142 in South States Resource Conservation the extent of soil and groundwater Estimates are subject to revision Africa and 29 in Canada. In and Recovery Act (“RCRA”). In contamination identified by the as further information develops or addition, ArcelorMittal and the 1993, Inland Steel Company RFI and the remedial measures circumstances change. previous owners of its facilities (predecessor to ArcelorMittal likely to be required, including have expended substantial USA) entered into a Consent excavation and consolidation Provisions for site restoration amounts to achieve or maintain Decree, which, among other of containment structures in an are related to costs incurred for ongoing compliance with things, requires facility-wide RCRA on-site landfill and continuation of dismantling of site facilities, mainly applicable environmental laws and Corrective Action and sediment groundwater pump and treatment in France and in the United States. regulations. ArcelorMittal expects assessment and remediation in systems. to continue to expend resources in the adjacent Indiana Harbor Ship Provisions for staff related this respect in the future. Canal. In 2012, ArcelorMittal USA ArcelorMittal USA is required to obligations primarily concern entered into a Consent Decree prevent acid mine drainage from the United States and Brazil and United States Amendment to the 1993 Consent discharging to surface waters are related to various employees’ Decree defining the objectives for at its closed mining operations compensation. ArcelorMittal’s operations limited sediment assessment and in southwestern Pennsylvania. in the United States have remediation of a small portion of In 2003, ArcelorMittal USA Provisions for voluntary separation environmental provisions of 161 the Indiana Harbor Ship Canal. entered into a Consent Order and plans concern primarily plans (exclusive of asset retirement The provisions for environmental Agreement with the Pennsylvania in Belgium, South Africa, the obligations) to address existing liabilities include approximately Department of Environmental United States and Spain which are environmental liabilities, of 10 for such sediment assessment Protection (the “PaDEP”) expected to be settled within one which 14 is expected to be spent and remediation, and 5 for requiring submission of a plan year. in 2017. The environmental RCRA Corrective Action at the to improve treatment facility provisions principally relate to Indiana Harbor East facility itself. operations and lower long-term Provisions for litigation are related the investigation, monitoring Remediation ultimately may be wastewater treatment costs. In to probable losses that will be and remediation of soil and necessary for other contamination 2004, ArcelorMittal USA entered incurred due to a present legal groundwater at ArcelorMittal’s that may be present at Indiana into a revised Consent Order and obligation and are expected to be current and former facilities. Harbor East, but the potential costs Agreement outlining a schedule settled in a period of one to four ArcelorMittal USA continues to of any such remediation cannot for implementation of capital years. Further detail regarding have significant environmental yet be reasonably estimated. improvements and requiring the legal matters is provided in note provisions relating to investigation establishment of a treatment trust, 8.2. and remediation at Indiana ArcelorMittal USA’s properties in estimated by the PaDEP to be Harbor East, Lackawanna, and Lackawanna, New York are subject the net present value of all future The provision for onerous its closed mining operations to an Administrative Order on treatment cost. ArcelorMittal USA contracts in 2016 mainly includes in southwestern Pennsylvania. Consent with the EPA requiring has been funding the treatment onerous hot and cold rolled ArcelorMittal USA’s environmental facility-wide RCRA Corrective trust, and will continue to do contracts in the United States. provisions also include 46, with Action. The Administrative so until the PaDEP target value anticipated spending of 3 during Order, entered into in 1990 by is achieved. This target value is Other mainly includes provisions 2017, to specifically address the former owner, Bethlehem based on average spending over for technical warranties and the removal and disposal of Steel, requires the Company to the last three years. The trust guarantees. asbestos-containing materials and perform a Remedial Facilities had a market value of 41 as of polychlorinated biphenyls (“PCBs”). Investigation (“RFI”) and a December 31, 2016. Once fully Corrective Measures Study, to funded, ArcelorMittal can be All of ArcelorMittal’s major implement appropriate interim reimbursed from the fund for the operating and former operating and final remedial measures, and continuing cost of treatment of sites in the United States are or to perform required post-remedial acid mine drainage. ArcelorMittal may be subject to a corrective closure activities. In 2006, the USA’s provisions for environmental action program or other laws New York State Department of liabilities include approximately 30 and regulations relating to Environmental Conservation and for this matter. 134 Consolidated financial statements

On August 8, 2006, the United EPA Region 3 also issued an Homecourt, Hagondange cannot be recovered internally on States EPA Region V issued NOV and, in addition, issued an and Micheville sites, and is the ArcelorMittal Gent and Liège ArcelorMittal USA’s Burns information request seeking related to treatment of soil and sites and the removal and disposal Harbor, Indiana facility a Notice detailed testing and information groundwater. At Moyeuvre Petite, of asbestos-containing material. of Violation (“NOV”) alleging concerning air compliance the recovery of the slag is almost multiple violations of the Clean related issues. PADEP issued a complete and ArcelorMittal is Luxembourg Air Act’s Prevention of Significant proposed penalty assessment of responsible for closure and final Deterioration (“PSD”) air permit 1 for alleged violations occurring rehabilitation of the site. At other In Luxembourg, there is an requirements, based on alleged from April 2014 through May sites, ArcelorMittal is responsible environmental provision of failures by Bethlehem Steel 2015. Additional penalties are for monitoring the concentration approximately 50, which relates to dating back to early 1994. Based being negotiated as part of of heavy metals in soil and the post-closure monitoring and on recent court decisions and comprehensive Consent Decree groundwater. Provisions in France remediation of former production ongoing negotiations with negotiations with PADEP and also cover the legal site obligations sites, waste disposal areas, slag the United States EPA, it is very United States EPA enforcement linked to the closure of the steel deposits and mining sites. likely that the US EPA will not officials. A Citizens Suit was filed plant and rolling mill at Gandrange enforce the alleged PSD permit by a local environmental group, as well as of the wire mill in Lens. In 2007, ArcelorMittal Luxembourg violations by Bethlehem Steel Penn Environment, under the sold the former Ehlerange slag against ArcelorMittal USA. The Clean Air Act alleging that local ArcelorMittal Atlantique et deposit (93 hectares) to the State United States EPA Region V also residents were being impacted Lorraine has an environmental of Luxembourg. ArcelorMittal conducted a series of inspections by many of the issues reflected provision that principally relates to Luxembourg is contractually and issued information requests in the outstanding NOVs. Penn the remediation and improvement liable to clean the site and move under the Federal Clean Air Act Environment is seeking penalties of storage of secondary materials, approximately 530,000 cubic relating to the Burns Harbor, and injunctive relief. The litigation the disposal of waste at different meters of material to other sites. Indiana Harbor and Cleveland was stayed in 2016 and Penn ponds and landfills and an action ArcelorMittal Luxembourg also facilities. Some of the EPA’s Environment is participating in the plan for removing asbestos from has an environmental provision information requests and Consent Decree negotiations. the installations and mandatory to secure, stabilize and conduct subsequent allegations relate to financial guarantees to cover risks waterproofing treatment on recent operations while others Europe of major accident hazard or for mining galleries and entrances relate to historical actions under gasholders and waste storage. and various dumping areas in former facility owners that Environmental provisions for Most of the provision relates to Monderçange, Differdange and occurred several years ago. In ArcelorMittal’s operations in the stocking areas at the Dunkirk Dommeldange. The environmental October 2011, the United States Europe total 414 and are mainly site that will need to be restored to provision also relates to EPA issued NOVs to Indiana Harbor related to the investigation and comply with local law and to the elimination of blast furnace dust West, Indiana Harbor East, Indiana remediation of environmental mothballing of the liquid phase and remediation of the soil to Harbor Long Carbon, Burns contamination at current and in Florange, including study and accommodate the expansion of Harbor and Cleveland alleging former operating sites in France surveillance of soil and water to the city of Esch-sur-Alzette. Other operational noncompliance based (77), Belgium (220), Luxembourg prevent environmental damage, environmental provisions concern primarily on self-reported Title V (50), Poland (25), Germany (22), treatment and elimination of the cleaning of the Belval Blast permit concerns. Comprehensive Czech Republic (8) and Spain (5). waste and financial guarantees Furnace water pond and former settlement discussions with the This investigation and remediation demanded by Public Authorities. production sites. A provision of United States EPA and affected work relates to various matters The environmental provisions also approximately 41 covers these state agencies involving all of such as decontamination include treatment of slag dumps obligations. the NOVs are ongoing and a of water discharges, waste at Florange and Dunkirk sites as comprehensive settlement with disposal, cleaning water ponds well as removal and disposal of ArcelorMittal Belval and the United States EPA, which is and remediation activities that asbestos-containing material at Differdange has an environmental anticipated to encompass self- involve the clean-up of soil and the Dunkirk and Mardyck sites. provision of approximately 7 to reported non-compliance through groundwater. These provisions also clean historical landfills in order at least December 31, 2015, is relate to human health protection Industeel France has an to meet the requirements of being finalized with execution measures such as fire prevention environmental provision that the Luxembourg Environment anticipated in 2017. The settlement and additional contamination principally relates to ground Administration. will include payment of penalties prevention measures to comply remediation at the Le Creusot site and injunctive relief. Efforts to with local health and safety and to the rehabilitation of waste ArcelorMittal Bissen & mitigate the total penalty to be regulations. disposal areas at the Châteauneuf Bettembourg has an paid by proposing a supplemental site. environmental provision of environmental proposal are France approximately 2 to clean historical also being pursued. Liabilities Belgium impact of former activity to meet associated with a comprehensive In France, there is an the legal obligations. settlement are estimated at 12. environmental provision of In Belgium, there is an 77, principally relating to the environmental provision of 220 Poland In 2014, the ArcelorMittal remediation of former sites, of which the most significant Monessen coke plant was re- including several coke plants, elements are legal site remediation ArcelorMittal Poland S.A.’s started after having been idled and the capping and monitoring obligations linked to the closure environmental provision of 25 since 2008. Since re-start, state of landfills or basins previously of the primary installations at mainly relates to the obligation regulatory authorities (“PADEP”) used for residues and secondary ArcelorMittal Belgium (Liège). to reclaim a landfill site and to issued numerous NOVs, the materials. The remediation of the The provisions also concern the dispose of the residues which majority of which concern Clean coke plants concerns mainly the external recovery and disposal of cannot be internally recycled or Air Act violations. United States Thionville, Moyeuvre Grande, waste, residues or by-products that externally recovered. The provision Consolidated financial statements 135

also concerns the storage and that commenced in the late AMSA’s independent consultants. costs of the Hibbing and Minorca disposal of iron-bearing sludge 1990s. Particular effort is directed AMSA and SIOC have been in iron ore mines and Princeton coal which cannot be reused in the to landfill sites, with sales of discussions and will continue to mines. manufacturing process. slag from legacy disposal sites engage the Department of Mineral to vendors in the construction Resources in this regard. The AROs in Mexico relate to the Germany industry continuing unabated and restoration costs following the encouraging progress being made The remainder of the obligation closure of the Las Truchas and El In Germany, the environmental at the Mooiplaats site. However, of approximately 2 relates to Volcan and the joint operation of provision of 22 essentially remediation actions for these sites Vereeniging site for the historical Pena Colorada iron ore mines. relates to ArcelorMittal Bremen’s are long-term in nature due to a pollution that needs to be post-closure obligations mainly complex legal process that needs remediated at waste disposal In Belgium, the AROs are to cover established for soil remediation, to be followed. sites, waste water dams and the demolition costs for primary groundwater treatment and groundwater tables. facilities at the Liège sites. monitoring at the Prosper coke The Vanderbijlpark Works site, plant in Bottrop. which is the main flat carbon steel Canada In Spain, the AROs relate to the operation of the South Africa discontinuance of the activities of Czech Republic unit and has been in operation In Canada, ArcelorMittal Dofasco various assets within the upstream for more than 72 years, contains has an environmental provision of installations. In the Czech Republic, there is a number of legacy facilities and approximately 23 for the expected an environmental provision of areas requiring remediation. cost of remediating toxic sediment In Germany, AROs principally relate 8, which essentially relates to The remediation entails the located in the Company’s East to the Hamburg site, which is the post-closure dismantling of implementation of rehabilitation Boatslip site. ArcelorMittal operating on leased land with the buildings and soil remediation at and decontamination measures Long Products Canada has an contractual obligation to remove the corresponding areas of the of waste disposal sites, waste environmental provision of all buildings and other facilities Ostrava site. water dams, ground water and approximately 6 for future disposal upon the termination of the lease, historically contaminated open of sludge left in ponds after flat and to the Prosper coke plant Spain areas. Approximately 21 of the mills closure at Contrecoeur. in Bottrop for filling the basin, provision is allocated to this site. restoring the layer and stabilizing In Spain, ArcelorMittal España Asset Retirement Obligations the shoreline at the harbor. has environmental provisions of The Newcastle Works site is the (“AROs”) 5 due to obligations of sealing main long carbon steel operation The AROs in South Africa are landfills located in the Asturias of the South Africa unit that has AROs arise from legal requirements for the Pretoria, Vanderbijlpark, site and post-closure obligations been in operation for more than and represent management’s best Saldanha as well as the Coke and in accordance with national 36 years. Approximately 28 of estimate of the present value of Chemical sites, and relate to the legislation. These obligations the provision is allocated to this the costs that will be required to closure and clean-up of the plant include the collection and site. As with all operating sites retire plant and equipment or to associated with decommissioned treatment of leachates that can be of AMSA, the above retirement restore a site at the end of its useful tank farms, tar plants, chemical generated during the operational and remediation actions dovetail life. As of December 31, 2016, stores, railway lines, pipelines and phase and a period of 30 years with numerous large capital ArcelorMittal had established defunct infrastructure. after the closure. expenditure projects dedicated provisions for asset retirement to environmental management. obligations of 358, including 36 for In Brazil, the AROs relate to legal South Africa In the case of the Newcastle site, Ukraine, 82 for Canada, 88 for the obligations to clean and restore the major current environmental United States, 41 for Mexico, 16 for the mining areas of Serra Azul AMSA has environmental capital project is for water Belgium, 31 for Germany, 14 for and Andrade, both located in provisions of approximately treatment. South Africa, 11 for Spain, 10 for the State of Minas Gerais. The 142 to be used over 12 years, Brazil, 13 for Kazakhstan and 16 for related provisions are expected mainly relating to environmental A provision of 61 relates to the Liberia. to be settled in 2024 and 2029, remediation obligations environmental rehabilitation of respectively. attributable to historical or legacy the Thabazimbi Mine. In terms The AROs in Ukraine are legal settling/evaporation dams and of the Amended and Restated obligations for site rehabilitation In Kazakhstan, the AROs relate to waste disposal activities. An Settlement and Supply Agreement at the iron ore mining site in Kryvyi the restoration obligations of the important determinant in the between Sishen Iron Ore Company Rih, upon closure of the mine iron ore and coal mines. final timing of the remediation (SIOC) and AMSA, AMSA is liable pursuant to its restoration plan. work relates to the obtaining of for the costs relating to the In Liberia, the AROs relate to the necessary environmental rehabilitation of SIOC’s Thabazimbi The AROs in Canada are legal iron ore mine and associated authorizations. iron ore mine for the period that obligations for site restoration infrastructure and mine related it was a captive mine. The mine and dismantling of the facilities environmental damage and Approximately 30 of the provision ceased to be a captive mine near the mining sites in Mont- compensation. They cover the relates to the decommissioned on December 31, 2014. In the Wright and Fire Lake, and the closure and rehabilitation plan Pretoria Works site. This site is in a current year, AMSA recognized a accumulation area of mineral under both the current operating state of partial decommissioning further provision for an additional substances at the facility of Port- phase and the not yet completed and rehabilitation with one coke amount of 28 based on a revised Cartier in Quebec, upon closure of Phase 2 expansion project. battery and a small-sections rolling assessment of the expected the mine pursuant to the restoring facility still in operation. AMSA rehabilitation costs received from plan of the mines. Tax Claims is in the process of transforming SIOC. The SIOC rehabilitation cost this old plant into an industrial projection, however, is not in line The AROs in the United States ArcelorMittal is a party to various hub for light industry, a process with the assessment performed by principally relate to mine closure tax claims. As of December 31, 136 Consolidated financial statements

2016, ArcelorMittal had recorded was due. Both parties have filed upholding the remainder of the (known as CSL) on the amounts provisions in the aggregate of an appeal with the administrative assessment. The Brazilian Federal deducted. Comex filed its defense approximately 211 for tax claims tribunal of second instance. Revenue Service has appealed in June 2014. In March 2015, there in respect of which it considers the the administrative tribunal’s was an unfavorable decision at risk of loss to be probable. Set out In 2011, SOL Coqueria Tubarão S.A. decision to reduce the amount of the administrative tribunal of first below is a summary description received 21 tax assessments from the original penalty. ArcelorMittal instance, in respect of which the of the tax claims (i) in respect of the Revenue Service of the State of Brasil has also appealed the Company has filed an appeal. which ArcelorMittal had recorded Espirito Santo for ICMS (a value- administrative tribunal’s decision The court of appeals rendered a provision as of December added tax) in the total amount to uphold the tax authority’s a favorable decision in April 31, 2016, (ii) that constitute a of 35 relating to a tax incentive assessment (including the revised 2016, which the Brazilian Federal contingent liability, or (iii) that (INVEST) used by the Company. penalty component). Revenue did not appeal, thus were resolved in 2016, in each The dispute concerns the making it a final decision. In April case involving amounts deemed definition of fixed assets. In August In 2013, ArcelorMittal Brasil 2016, Comex received a second material by ArcelorMittal. The 2015, the administrative tribunal received a tax assessment in assessment concerning the same Company is vigorously defending of first instance upheld 21 of the relation to the 2008-2010 tax years subject matter for an amount against each of the pending claims tax assessments, while also issuing for IRPJ and CSL in relation to (i) of 2.7. In light of the favorable discussed below. decisions partially favorable to the amortization of goodwill on decision in the earlier case, Comex the Company in two of the cases. the acquisition of Mendes Júnior has filed a petition asking that the Brazil In September 2015, ArcelorMittal Siderurgia, Dedini Siderurgia second case be decided in the Tubarão filed appeals with respect and CST, (ii) the amortization same way. In 2003, the Brazilian Federal to each of the administrative of goodwill arising from the Revenue Service granted tribunal’s decisions. In 2016, there mandatory tender offer made In May 2014, ArcelorMittal ArcelorMittal Brasil (through its were unfavorable decisions in nine by ArcelorMittal to minority Comercializadora de Energia predecessor company, then known of the cases at the administrative shareholders of Arcelor Brasil received a tax assessment from as CST) a tax benefit for certain tribunal of second instance. The following the two-step merger the state of Minas Gerais alleging investments. ArcelorMittal Brasil Company filed appeals against of Arcelor and Mittal Steel N.V. that the Company did not had received certificates from each of these nine decisions and, and (iii) CSL and IRPJ over profits correctly calculate tax credits on SUDENE, the former Agency for in October 2016, four of the nine of controlled companies in interstate sales of electricity from the Development of the Northeast appeals were denied, in respect of Argentina, Costa Rica, Venezuela February 2012 to December 2013. Region of Brazil, confirming which further appeals have been and the Netherlands. The amount The amount claimed totals 54. ArcelorMittal Brasil’s entitlement filed. claimed totals 495. In October ArcelorMittal Comercializadora de to this benefit. In September 2014, the administrative tribunal of Energia filed its defense in June 2004, ArcelorMittal Brasil was In 2011, ArcelorMittal Brasil first instance found in favor of the 2014. Following an unfavorable notified of the annulment of these received a tax assessment for Federal Revenue and ArcelorMittal administrative decision in certificates. ArcelorMittal Brasil has corporate income tax (known Brasil filed its appeal in November November 2014, ArcelorMittal pursued its right to this tax benefit as IRPJ) and social contributions 2014. filed an appeal in December through the courts against both on net profits (known as CSL) in 2014. In March 2015, there was a ADENE, the successor to SUDENE, relation to (i) the amortization For over 18 years, ArcelorMittal further unfavorable decision at and against the Brazilian Federal of goodwill on the acquisition of Brasil has been challenging the the second administrative level. Revenue Service. The Brazilian Mendes Júnior Siderurgia (for the basis of calculation of the Brazilian The Company received the tax Federal Revenue Service issued 2006 and 2007 fiscal years), (ii) the Cofins and Pis social security taxes enforcement notice in December a tax assessment in this regard amortization of goodwill arising (specifically, whether Brazilian 2015 and filed its defense in for 451 in December 2007. In from the mandatory tender offer VAT may be deducted from the February 2016. In April 2016, December 2008, the administrative (MTO) made by ArcelorMittal to base amount on which the Cofins ArcelorMittal Comercializadora tribunal of first instance upheld minority shareholders of Arcelor and Pis taxes are calculated), in de Energia received an additional the amount of the assessment. Brasil following the two-step an amount of approximately 4. tax assessment in the amount of ArcelorMittal Brasil appealed to merger of Arcelor and Mittal Steel ArcelorMittal Brasil deposited 77, regarding the same matter, the administrative tribunal of N.V. (for the 2007 tax year), (iii) the disputed amount in escrow for infractions which allegedly second instance, and, on August expenses related to pre-export with the relevant Brazilian judicial occurred during the 2014 to 2015 8, 2012, the administrative financing used to finance the branch when it became due. Since period, and filed its defense in May tribunal of the second instance MTO, which were deemed by the the principal amount bears interest 2016. found in favor of ArcelorMittal tax authorities to be unnecessary at a rate applicable to judicial invalidating the tax assessment, for ArcelorMittal Brasil since the deposits, the amount stood at 54 In the period from May to July thereby ending this case. On expenses were incurred to buy as of December 31, 2016. 2015, ArcelorMittal Brasil received April 16, 2011, ArcelorMittal Brasil shares of its own company and nine tax assessments from the received a further tax assessment (iv) CSL over profits of controlled In April 2014, Comércio Exterior state of Rio Grande do Sul alleging for the periods of March, June companies in Argentina and S.A. (“Comex”), a Brazilian that the Company, through and September 2007, which, Costa Rica. The amount claimed subsidiary of ArcelorMittal, its branches in that state, had taking into account interest and totals 567. On January 31, 2014, received a tax assessment in the not made advance payments currency fluctuations, amounted the administrative tribunal of first amount of 51 concerning certain of ICMS (a value-added tax) on to 178 as of December 31, 2016. In instance found in partial favor deductions made by Comex in sales in that state covering the October 2011, the administrative of ArcelorMittal Brasil, reducing relation to the Fundap financial period from May 2010 to April tribunal of first instance upheld the penalty component of the tax incentive; the Brazilian Federal 2015. The amount claimed totals the tax assessment received by assessment from, according to Revenue Service alleges that 93. The administrative tribunal ArcelorMittal Brasil on April 16, ArcelorMittal Brasil’s calculations, Comex owes corporate income of first instance upheld the 2011, but decided that no penalty 266 to 141 (as calculated at the tax (known as IRPJ) and social tax assessments in each of the (amounting to 77 at that time) time of the assessment), while contributions on net profits nine cases, and ArcelorMittal Consolidated financial statements 137

Brasil appealed each of the in relation to the 2007 and 2008 Ukraine States District Court for the administrative tribunal’s claims in February and March Northern District of Illinois against decisions. Each case was decided 2010, respectively. In three In September 2012, the Ukrainian ArcelorMittal, ArcelorMittal USA unfavorably to ArcelorMittal Brasil decisions dated December 10, tax authorities conducted an LLC, and other steel manufacturers, at the administrative tribunal of 2012, the arbitration committee audit of ArcelorMittal Kryvyi alleging that the defendants had second instance, and ArcelorMittal hearing the matter found that Rih, resulting in a tax claim of conspired to restrict the output of Brasil has appealed the cases to social contributions in an amount approximately 62. The claim steel products in order to fix, raise, the judicial instance. of 17, 11 and 5 are due in respect relates to the cancellation of stabilize and maintain prices at of profit-sharing schemes, stock VAT refunds, cancellation of artificially high levels in violation of On April 25, 2016, ArcelorMittal options and professional fees, deductible expenses and queries United States antitrust law. Other Brasil received a tax assessment respectively. These amounts cover on transfer pricing calculations. similar direct purchaser lawsuits in relation to (i) the amortization the audits for 2006, 2007 and 2008. On January 2, 2013, ArcelorMittal were also filed in the same court of goodwill resulting from Mittal In March 2013, the Company filed Kryvyi Rih filed a lawsuit with and were consolidated with the Steel’s mandatory tender offer appeals against the decisions the District Administrative Court Standard Iron Works lawsuit. On to the minority shareholders of relating to the profit-sharing to challenge the findings of this May 29, 2014, ArcelorMittal and Arcelor Brasil following Mittal schemes and stock options. tax audit. On April 9, 2013, the ArcelorMittal USA LLC entered into Steel’s merger with Arcelor in District Administrative Court an agreement to settle the direct 2007 and (ii) the amortization Following audits for 2009, 2010 rejected the claim by the tax purchaser claims for an amount of of goodwill resulting from and 2011 of ArcelorMittal France authorities and retained only a 90 recognized in cost of sales. On ArcelorMittal Brasil’s acquisition of and other French ArcelorMittal tax liability of approximately 0.2 October 17, 2014, the court gave CST in 2008. While the assessment, entities, URSSAF commenced against ArcelorMittal Kryvyi Rih. its final approval of the settlement if upheld, would not result in a formal proceedings in December Both parties filed appeals and, on and dismissed ArcelorMittal and cash payment as ArcelorMittal 2012 for these years alleging November 7, 2013, the Court of ArcelorMittal USA LLC from the Brasil did not have any tax liability that these entities owe 150 in Appeal rejected the appeal by the lawsuit. In September 2015, the for the fiscal years in question social contributions (including tax authorities and retained only court certified a class of direct (2011 and 2012), it would result interest and late fees relating a tax liability of approximately purchasers on whether there was in the write-off of 298 worth thereto) on various payments, 0.1 against ArcelorMittal Kryvyi a conspiracy, allowing the case to of ArcelorMittal Brasil’s net the most significant of which Rih. On November 12, 2013, the proceed against the remaining operating loss carryforwards and relate to voluntary separation tax authorities filed an appeal in defendants as a class action, but as a result could have an effect schemes, profit sharing schemes, cassation. On June 3, 2015, the did not certify a class on impact or on net income over time. In May professional fees and stock Supreme Administrative Court of damages. This ruling did not affect 2016, ArcelorMittal Brasil filed its options. In its decision dated Ukraine decided entirely in favor the settlement; subsequently defense. April 24, 2013, the arbitration of ArcelorMittal Kryvyi Rih. The tax the remaining direct purchasers committee reduced the amount authorities had until June 3, 2016 settled. Two putative class actions On May 17, 2016 ArcelorMittal claimed by 29. The dispute then to appeal the judgment to the on behalf of indirect purchasers Brasil received a tax assessment entered into a judicial phase Supreme Court of Ukraine. The tax have been filed and one has been from the state of Santa Catarina in before the Tribunal des Affaires authorities did not appeal to the dismissed for want of prosecution; the amount of 145 alleging that de Sécurité Sociale (“TASS”). At Supreme Court of Ukraine before the remaining indirect purchasers’ it had used improper methods a hearing on January 12, 2017 the deadline of June 3, 2016, and action is not covered by the to calculate the amount of its before the TASS, the parties signed the case is therefore closed. settlement of the direct purchaser ICMS (a value-added tax) credits. a conciliation agreement settling claims or the court’s class ArcelorMittal Brasil filed its defense the audits covered by the two Competition/Antitrust Claims certification decision. in July 2016. In December 2016, cases. ArcelorMittal Brasil received an ArcelorMittal is a party to various Brazil unfavorable decision at the first Mexico competition/antitrust claims. As of administrative level, in respect of December 31, 2016, ArcelorMittal In September 2000, two which it has filed an appeal. In 2015, the Mexican Tax had recorded provisions in the construction trade organizations Administration Service issued aggregate of approximately 3 filed a complaint with Brazil’s France three tax assessments to for such claims. Set out below Administrative Council for ArcelorMittal Mexico, alleging is a summary description of Economic Defence (“CADE”) Following audits for 2006, 2007 that ArcelorMittal Mexico owes competition/antitrust claims (i) against three long steel producers, and 2008 of ArcelorMittal France 140 in respect of (i) improper in respect of which ArcelorMittal including ArcelorMittal Brasil. and other French ArcelorMittal interest deductions relating to had recorded a provision as The complaint alleged that these entities, URSSAF, the French certain loans, (ii) unpaid corporate of December 31, 2016, (ii) that producers colluded to raise prices in body responsible for collecting income tax for interest payments constitute a contingent liability, the Brazilian rebar market, thereby social contributions, commenced improperly categorized as profit, or (iii) that were resolved in 2016, violating applicable antitrust formal proceedings for these and (iii) improper payment in each case involving amounts laws. In September 2005, CADE years alleging that the French deductions for branding fee deemed material by ArcelorMittal. issued its final decision against ArcelorMittal entities owe 69 in services and IT services in 2008. The Company is vigorously ArcelorMittal Brasil, imposing a fine social contributions on various ArcelorMittal Mexico filed an defending against each of the of 53. ArcelorMittal Brasil appealed payments, the most significant annulment complaint in respect pending claims discussed below. the decision to the Brazilian of which relate to profit sharing of each of the aforementioned Federal Court. In September 2006, schemes, professional fees and assessments in November 2015. United States ArcelorMittal Brasil offered a stock options. Proceedings were letter guarantee and obtained an commenced in relation to the On September 12, 2008, Standard injunction to suspend enforcement 2006 claims in December 2009. Iron Works filed a purported class of this decision pending the court’s Proceedings were commenced action complaint in the United judgment. 138 Consolidated financial statements

There is also a related class action 2012, a second complaint alleging which provided an index thereof. alleged breaches of antitrust rules commenced by the Federal Public price discrimination regarding On July 7, 2011, ArcelorMittal concerning (i) collusion regarding Prosecutor of the state of Minas the same product over the 2004 filed an application before the scrap and alloy surcharges from Gerais against ArcelorMittal Brasil to 2006 period was referred by Competition Tribunal to set aside the 1990s through November 2015 for damages in an amount of 63 the Competition Commission the complaint referral based on and (ii) impermissible exchanges based on the alleged violations to the Competition Tribunal. procedural irregularities but this of sensitive information between investigated by CADE. ArcelorMittal is unable to assess application was withdrawn by competitors since early 2003. A further related lawsuit was the outcome of these proceedings notice dated August 7, 2014. ArcelorMittal Ruhrort GmbH commenced in February 2011 by or the amount of ArcelorMittal and ArcelorMittal Commercial four units of Sinduscons, a civil South Africa’s potential liability, if In March 2012, the South African Long Deutschland GmbH are construction trade organization, any. Competition Commission referred cooperating with the German in federal court in Brasilia against, to the Competition Tribunal an Federal Cartel Office. ArcelorMittal inter alia, ArcelorMittal Brasil On September 1, 2009, the South allegation that ArcelorMittal South is unable to assess the outcome of claiming damages based on an African Competition Commission Africa and steel producer Highveld these proceedings or the amount alleged cartel in the rebar market referred a complaint against acted by agreement or concerted of its potential liability, if any. as investigated by CADE and as four producers of long carbon practice to fix prices and allocate noted above. steel in South Africa, including markets in respect of certain flat Other Legal Claims ArcelorMittal South Africa, and carbon steel products over a Romania the South African Iron and Steel period of 10 years (1999-2009) in ArcelorMittal is a party to Institute to the Competition contravention of the South African various other legal claims. As of In 2010 and 2011, ArcelorMittal Tribunal. The complaint referral Competition Act. December 31, 2016, ArcelorMittal Galati entered into high followed an investigation into had recorded provisions of volume electricity purchasing alleged collusion among the In August 2013, the South approximately 202 for other contracts with Hidroelectrica, a producers initiated in April 2008, African Competition Commission legal claims in respect of which partially state-owned electricity on-site inspections conducted referred a complaint against four it considers the risk of loss to producer. Following allegations at the premises of some of scrap metal purchasers in South be probable. Set out below is a by Hidroelectrica’s minority the producers and a leniency Africa, including ArcelorMittal summary description of the other shareholders that ArcelorMittal application by Scaw South Africa, South Africa, to the South legal claims (i) in respect of which Galati (and other industrial one of the producers under African Competition Tribunal for ArcelorMittal had recorded a electricity consumers) benefitted investigation. The Competition prosecution. The complaint alleges provision as of December 31, 2016, from artificially low tariffs, the Commission recommended that collusion among the purchasers (ii) that constitute a contingent European Commission opened the Competition Tribunal impose to fix the price and other trading liability, (iii) that were resolved in a formal investigation into an administrative penalty against conditions for the purchase of 2016, or (iv) that were resolved alleged state aid in April 2012. ArcelorMittal South Africa, Cape scrap over a period from 1998 to at and had a financial impact in 2014 The European Commission Gate and Cape Town Iron Steel least 2008. or 2015, in each case involving announced on June 12, 2015 that Works in the amount of 10% of amounts deemed material by electricity supply contracts signed their annual revenues in South In relation to all these cases, ArcelorMittal. The Company is by Hidroelectrica with certain Africa (in the year preceding any following an extensive vigorously defending against each electricity traders and industrial final decision) and exports from engagement ArcelorMittal South of the claims discussed below that customers (including the one South Africa for 2008. ArcelorMittal Africa reached agreement on remain pending. entered by ArcelorMittal Galati) filed an application to access an overall settlement with the did not involve state aid within the the file of the Competition Competition Commission for Argentina meaning of the EU rules. Commission that was rejected. an amount of 1.5 billion South ArcelorMittal appealed the African rand (approximately 110). Over the course of 2007 to 2016, South Africa decision to reject the application, In October 2016, Barnes Fencing the Argentinian Customs Office and applied for a review of that filed an application with the Authority (Aduana) notified the In February 2007, the complaint decision and a suspension of Competition Tribunal to review Company of certain inquiries that previously filed with the South the obligation to respond to the and set aside the said settlement it is conducting with respect to African Competition Commission referral on the substance pending agreement in respect of the Barnes prices declared by the Company’s by Barnes Fencing, a South final outcome on the application matters. In addition, Barnes filed Argentinian subsidiary, Acindar, African producer of galvanized for access to the documents. an objection to the settlement related to iron ore imports. The wire, alleging that ArcelorMittal The appeal was upheld by the agreement and an application to Customs Office Authority is South Africa, as a “dominant firm”, Competition Appeals Court (CAC) stay. The settlement agreement, seeking to determine whether discriminated in pricing its low and the matter was referred back as amended to exclude the Acindar incorrectly declared prices carbon wire rod was referred to to the Competition Tribunal for a Barnes case referred to above, for iron ore imports from several the Competition Tribunal. The determination of confidentiality was approved, subject to minor different Brazilian suppliers and Competition Commission seeks an and scope of access to the amendments, by the Competition from ArcelorMittal Sourcing on 38 order declaring that ArcelorMittal documents. The Competition Tribunal, on November 16, 2016. different claims concerning several South Africa’s pricing in 2000-2003 Commission appealed the shipments made between 2002 in respect of low carbon wire rod decision of the CAC, and, on May Germany and 2014. The aggregate amount amounted to price discrimination 31, 2013, the Supreme Court of claimed by the Customs Office and an order that ArcelorMittal Appeal dismissed the appeal of In the first half of 2016, the German Authority in respect of all of the South Africa cease its pricing the Competition Commission and Federal Cartel Office carried out shipments is approximately 217. discrimination. In March 2008, the confirmed the decision of the CAC. unannounced investigations of The investigations are subject to Competition Tribunal accepted In 2014, ArcelorMittal South Africa ArcelorMittal Ruhrort GmbH and the administrative procedures of the claimants’ application for requested the documents from ArcelorMittal Commercial Long the Customs Office Authority and leave to intervene. In November the Competition Commission, Deutschland GmbH following are at different procedural stages Consolidated financial statements 139

depending on the filing date of the quantum of damages. In May 2013, Senegal Security. Once the Social Security investigation. As of December 31, the expert’s report was issued and authorities recognize the work- 2016, in 22 of the total 38 cases, valued the quantum of damages in In 2007, ArcelorMittal Holdings related illness, the claimant, the administrative branch of the the range of 38 to 60. ArcelorMittal AG entered into an agreement depending on the circumstances, Customs Office Authority ruled appealed the decision on the with the State of Senegal relating can also file an action for against Acindar (representing total merits. In May 2014, the Court of to an integrated iron ore mining inexcusable negligence (faute claims of 66). These decisions have Appeals issued a decision rejecting and related infrastructure project. inexcusable) to obtain additional been appealed to the Argentinian ArcelorMittal’s appeal. On June 20, The Company announced at the compensation from the company National Fiscal Court. 2014, ArcelorMittal filed an appeal time that implementation of the before a special tribunal. Where of the Court of Appeal’s judgment project would entail an aggregate procedural errors are made by Canada with the Italian Court of Cassation. investment of 2,200. Project Social Security, it is required to On December 18, 2014, the Court implementation did not follow assume full payment of damages In April 2011, a proceeding was of Milan issued a decision on the the originally anticipated schedule awarded to the claimants. Due commenced before the Ontario quantum of the damages and after initial phase studies and to fewer procedural errors made (Canada) Superior Court of valued the quantum of damages in related investments. by Social Security, changes in the Justice under the Ontario Class the sum of 25 plus interest. In June regulations and, consequently, Proceedings Act, 1992, against 2015, both parties served appeals The Company engaged in fewer rejected cases, ArcelorMittal ArcelorMittal, Baffinland, and of the decision on the quantum, discussions with the State of has been required to pay some certain other parties relating with ArcelorMittal also seeking the Senegal about the project over amounts in damages since 2011. to the January 2011 take-over suspension of the enforceability a long period. In early 2011, the of Baffinland by ArcelorMittal, of the decision. On July 1, 2015, parties engaged in a conciliation The number of claims outstanding Nunavut, Iron Ore Holdings and Finmasi formally notified to AMDSF procedure, as provided for for asbestos exposure at 1843208 Ontario Inc. The action the declaration of enforcement of under their agreement, in an December 31, 2016 was 394 as seeks the certification of a class the decision of December 18, 2014. attempt to reach a mutually compared to 374 at December comprised of all Baffinland On July 28, 2015, AMDSF filed an acceptable outcome. Following the 31, 2015. The range of amounts securities holders who tendered appeal against such declaration unsuccessful completion of this claimed for the year ended their Baffinland securities, and with the Court of Appeal of procedure, in May 2011 the State of December 31, 2016 was €30,000 to whose securities were taken up, Reims in France. At a hearing on Senegal commenced an arbitration €650,000 (approximately $31,623 in connection with the take- December 1, 2015, the Italian before the Court of Arbitration to $685,000). The aggregate over between September 22, Court of Appeal accepted the of the International Chamber costs and settlements for the 2010 and February 17, 2011, suspension of the enforcement of of Commerce, claiming breach year ended December 31, 2016 or otherwise disposed of their the decision of December 18, 2014, of contract and provisionally were approximately 7.8, of which Baffinland securities on or after following the agreement of AMDSF estimating damages of 750. In approximately 0.2 represented January 14, 2011. The action to provide a guarantee for its September 2013, the arbitral legal fees and approximately alleges that the tender offer value. In March 2016, on the joint tribunal issued its first award 7.6 represented damages paid documentation contained certain application of the parties, the Court ruling that Senegal is entitled to to the claimant. The aggregate misrepresentations and seeks of Appeal of Reims ordered the terminate the 2007 agreements. costs and settlements for the damages in an aggregate amount suspension of the proceedings. The arbitral tribunal also ruled that year ended December 31, 2015 of 743 (CAD$1billion) or rescission a new arbitration phase would were approximately 3.3, of which of the transfer of the Baffinland Luxembourg be held relating to the potential approximately 0.5 represented securities by members of the class. liability of ArcelorMittal as well as legal fees and approximately 2.8 In June 2012, the Company the amount of any damages which represented damages paid to the Italy received writs of summons in could be awarded to Senegal. The claimant. respect of claims made by 59 parties have since agreed to settle In January 2010, ArcelorMittal former employees of ArcelorMittal the dispute with the amount of the Minority Shareholder Claims received notice of a claim filed Luxembourg. The claimants allege settlement being included within Regarding the Exchange Ratio by Finmasi S.p.A. relating to a that they are owed compensation financing cost. On December 12, in the Second-Step Merger of memorandum of agreement based on the complementary 2014, the arbitral tribunal issued a ArcelorMittal into Arcelor (“MoA”) entered into between pension scheme that went into procedural order formally closing ArcelorMittal Distribution Services effect in Luxembourg in January the arbitration. ArcelorMittal is the company France (“AMDSF”) and Finmasi 2000. The aggregate amount that results from the acquisition in 2008. The MoA provided that claimed by such former employees France of Arcelor by Mittal Steel N.V. in AMDSF would acquire certain of (bearing in mind that other former 2006 and a subsequent two- Finmasi’s businesses for an amount employees may bring similar Retired and current employees step merger between Mittal not to exceed 98, subject to the claims) is approximately 62. Given of certain French subsidiaries of Steel and ArcelorMittal and satisfaction of certain conditions the similarities in the claims, the the former Arcelor have initiated then ArcelorMittal and Arcelor. precedent, which, in AMDSF’s view, parties agreed to limit the pending lawsuits to obtain compensation Following completion of this were not fulfilled. Finmasi sued proceedings to four test claims. for asbestos exposure in excess merger process, several former for (i) enforcement of the MoA, (ii) In April 2013, the Esch-sur-Alzette of the amounts paid by French minority shareholders of Arcelor damages of 15 to 26 or (iii) recovery labor court rejected two of these social security (“Social Security”). or their representatives brought costs plus quantum damages for test claims. The relevant plaintiffs Asbestos claims in France initially legal proceedings regarding the Finmasi’s alleged lost opportunity are appealing these decisions. In are made by way of a declaration exchange ratio applied in the to sell to another buyer. In November 2013, the Luxembourg of a work-related illness by the second-step merger between September 2011, the court rejected city labor court rejected the two claimant to the Social Security ArcelorMittal and Arcelor and the Finmasi’s claims other than its other test claims, which are also authorities resulting in an merger process as a whole. second claim. The court appointed being appealed. investigation and a level of an expert to determine the compensation paid by Social 140 Consolidated financial statements

ArcelorMittal believes that the shareholders of Arcelor to merger, the grant of additional to those in the Luxembourg allegations made and claims appear before the civil court of shares, or damages in an amount proceedings summarized above) brought by such minority Luxembourg. The summons was of approximately 190. By judgment inter alia damages in a nominal shareholders are without merit also served on all natural persons dated November 30, 2011, the amount and reserved the right to and that the exchange ratio and sitting on the Board of Directors Luxembourg civil court declared all seek additional remedies including merger process complied with of ArcelorMittal at the time of the of the plaintiffs’ claims inadmissible the cancellation of the merger. The the requirements of applicable merger and on the Significant and dismissed them. The proceedings before the civil court law, were consistent with previous Shareholder. The plaintiffs alleged judgment was appealed in May of Paris have been stayed, pursuant guidance on the principles that in particular that, based on Mittal 2012. By judgment dated February to a ruling of such court on July would be used to determine the Steel’s and Arcelor’s disclosure and 15, 2017, the Luxembourg Court 4, 2013, pending a preparatory exchange ratio in the second- public statements, investors had of Appeal declared all but one of investigation (instruction step merger and that the merger a legitimate expectation that the the plaintiffs’ claims inadmissible, préparatoire) by a criminal judge exchange ratio was relevant and exchange ratio in the second-step remanded the proceedings on magistrate (juge d’instruction) reasonable to shareholders of both merger would be the same as that the merits to the lower court with triggered by the complaints merged entities. of the secondary exchange offer respect to the admissible claimant (plainte avec constitution de partie component of Mittal Steel’s June and dismissed all other claims. civile) of AAA and several hedge Set out below is a summary of 2006 tender offer for Arcelor (i.e., funds (who quantified their total ongoing matters in this regard. 11 Mittal Steel shares for 7 Arcelor On May 15, 2012, ArcelorMittal alleged damages at approximately Several other claims brought shares), and that the second-step received a writ of summons on 260), including those who filed before other courts and regulators merger did not comply with behalf of Association Actionnaires the claims before the Luxembourg were dismissed and are definitively certain provisions of Luxembourg d’Arcelor (“AAA”), a French courts described (and quantified) closed. company law. They claimed, inter association of former minority above. alia, the cancellation of certain shareholders of Arcelor, to appear On January 8, 2008, ArcelorMittal resolutions (of the Board of before the civil court of Paris. received a writ of summons Directors and of the Shareholders In such writ of summons, AAA on behalf of four hedge fund meeting) in connection with the claimed (on grounds similar

8.3 Commitments

The Company’s commitments consist of the following:

December 31, 2016 2015 Purchase commitments 24,432 20,059 Guarantees, pledges and other collateral 4,424 3,791 Non-cancellable operating leases 1,312 1,446 Capital expenditure commitments 466 280 Other commitments 1,432 1,161 Total 32,066 26,737

Purchase commitments for 480 and 558 as of December of joint ventures as of December of credit, pledges and other 31, 2016 and 2015, respectively. 31, 2016 and 2015, respectively. collateral included 114 and nil of Purchase commitments consist Purchase commitments include Guarantees given on behalf of joint commitments given on behalf of primarily of major agreements commitments given to joint ventures include 463 and 519 for joint ventures as of December 31, for procuring iron ore, coking ventures for 1,386 and 1,315 as the guarantees issued on behalf 2016 and 2015, respectively. coal, coke and hot metal. The of December 31, 2016 and 2015, of Calvert and 403 and 512 for the Company also has a number respectively. Commitments given guarantees issued on behalf of Al of agreements for electricity, to joint ventures include 1,314 Jubail as of December 31, 2016 industrial and natural gas, scrap and 1,264 related to purchase and 2015, respectively. and freight. In addition to those of the output from Tameh as of purchase commitments disclosed December 31, 2016 and 2015, Pledges and other collateral mainly above, the Company enters into respectively. relate to inventories pledged to purchasing contracts as part of secure an asset-based revolving its normal operations which have Guarantees, pledges and other credit facility for the amount drawn minimum volume requirements collateral of 500 and mortgages entered but for which there are no take-or- into by the Company’s operating pay or penalty clauses included in Guarantees related to financial subsidiaries. Pledges of property the contract. The Company does debt and credit line given on plant and equipment were 256 not believe these contracts have behalf of third parties were 131 and 295 as of December 31, 2016 an adverse effect on its liquidity and 102 as of December 31, and 2015, respectively. Other position. The increase in purchase 2016 and 2015, respectively. sureties, first demand guarantees, commitments is mainly related to Additionally, 11 and 12 were letters of credit, pledges and a new iron ore contract signed in related to guarantees given other collateral included nil of the U.S. (see note 6.1.1). on behalf of associates as of commitments given on behalf December 31, 2016 and 2015, of associates as of December 31, Purchase commitments include respectively. Guarantees of 1,028 2016 and 2015. Other sureties, commitments given to associates and 1,224 were given on behalf first demand guarantees, letters Consolidated financial statements 141

Non-cancellable operating leases

The Company leases various facilities, land and equipment under non-cancellable lease arrangements. Future minimum lease payments required under operating leases that have initial or remaining non-cancellable terms as of December 31, 2016 and 2015 according to maturity periods are as follows: December 31, 2016 2015 Less than 1 year 279 279 1-3 years 422 454 4-5 years 267 309 More than 5 years 344 404 Total 1,312 1,446 Non-cancellable operating Note 9: Income taxes initial recognition (other than to enable all or part of the asset leases include time charter in a business combination) of to be recovered. The Company arrangements for shipping The current tax payable other assets and liabilities in a reviews the deferred tax assets in activities. The operating leases (recoverable) is based on taxable transaction that affects neither the different jurisdictions in which expense was 521, 538 and 686 in profit (loss) for the year. Taxable the taxable profit nor the profit it operates to assess the possibility 2016, 2015 and 2014, respectively. profit differs from profit as reported in the consolidated of realizing such assets based The non-cancellable operating reported in the consolidated statement of operations. on projected taxable profit, the leases commitments at December statements of operations because expected timing of the reversals 31, 2016 are related to plant, it excludes items of income Deferred tax liabilities are of existing temporary differences, machinery and equipment (949), or expense that are taxable or recognized for taxable temporary the carry forward period of buildings (199), land (127) and deductible in other years or are differences associated with temporary differences and tax other (37). never taxable or deductible. The investments in subsidiaries, losses carried forward and the Company’s current income tax associates and joint ventures, implementation of tax-planning Capital expenditure commitments expense (benefit) is calculated except if the Company is able strategies. Due to the numerous using tax rates that have been to control the reversal of the variables associated with these Capital expenditure commitments enacted or substantively enacted temporary difference and it is judgments and assumptions, both mainly relate to commitments as of the date of the consolidated probable that the temporary the precision and reliability of the associated with investments in statement of financial position. difference will not reverse in the resulting estimates of the deferred expansion and improvement foreseeable future. Deferred tax tax assets are subject to substantial projects by various subsidiaries. Tax is charged or credited to assets arising from deductible uncertainties. In 2014, ArcelorMittal Atlantique et the consolidated statement of temporary differences associated Lorraine committed to investment operations, except when it relates with such investments are only Deferred tax assets and liabilities programs in connection with the to items charged or credited to recognized to the extent that are offset when there is a legally Florange site and ArcelorMittal other comprehensive income or it is probable that there will enforceable right to set off current Belgium in connection with the directly to equity, in which case be sufficient taxable profits tax assets against current tax closure of the Liège site. The the tax is recognized in other against which the benefits of liabilities, when they relate to remaining capital expenditure comprehensive income or in the temporary differences can income taxes levied by the same commitments were 34 and 63 as of equity. be utilized and are expected to taxation authority and when the December 31, 2016, respectively. reverse in the foreseeable future. Company intends to settle its In 2016, AMSA committed to an Deferred tax is recognized on current tax assets and liabilities on investment program in connection differences between the carrying Deferred tax assets and liabilities a net basis. with the competition commission amounts of assets and liabilities, are measured at the tax rates that settlement. The remaining capital in the consolidated financial are expected to apply in the period expenditure commitment was 244 statements and the corresponding in which the liability is settled or as of December 31, 2016. tax basis used in the computation the asset realized, based on tax of taxable profit, and is accounted rates (and tax laws) that have been Other commitments for using the statements of enacted or substantively enacted financial position liability by the consolidated statements Other commitments given method. Deferred tax liabilities of financial position date. The comprise mainly commitments are generally recognized for all measurement of deferred tax incurred for gas supply to taxable temporary differences, and assets and liabilities reflects the tax electricity suppliers. deferred tax assets are generally consequences that would follow recognized for all deductible from the manner in which the Commitments to sell temporary differences and net Company expects, at the reporting operating loss carry forwards to date, to recover or settle the In addition to the commitments the extent that it is probable that carrying amount of its assets and presented above, the Company taxable profits will be available liabilities. has firm commitments to against which those deductible sell for which it also has firm temporary differences can be The carrying amount of deferred commitments to purchase utilized. Such assets and liabilities tax assets is reviewed at each included in purchase are not recognized if the taxable consolidated statement of commitments for 366 and 490 as temporary difference arises financial position date and of December 31, 2016 and 2015, from the initial recognition of reduced to the extent that it is no respectively, and mainly related to non-deductible goodwill or if longer probable that sufficient natural gas and electricity. the differences arise from the taxable profits will be available 142 Consolidated financial statements

9.1 Income tax expense (benefit)

The components of income tax expense (benefit) for each of the years ended December 31, 2016, 2015 and 2014, respectively, are summarized as follows: Year ended December 31, 2016 2015 2014 Total current tax expense (benefit) 255 331 544 Total deferred tax expense (benefit) 731 571 (90) Total income tax expense (benefit) 986 902 454

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, 2016 2015 2014 Net income (loss) (including non-controlling interests) 1,734 (8,423) (974) Income tax expense (benefit) 986 902 454 Income (loss) before tax 2,720 (7,521) (520) Tax expense (benefit) at the statutory rates applicable to profits (losses) in the countries 1 677 (2,146) (147) Permanent items (5,940) (2,124) (273) Rate changes 593 - 36 Net change in measurement of deferred tax assets 5,344 4,940 306 Tax effects of foreign currency translation 73 153 446 Tax credits (21) (13) (63) Other taxes 126 18 79 Others 134 74 70 Income tax expense (benefit) 986 902 454 1 Tax expense (benefit) at the statutory rates is based on income (loss) before tax excluding Income (loss) from investments in associates and joint ventures.

ArcelorMittal’s consolidated income tax expense (benefit) is affected by the income tax laws and regulations in effect in the various countries in which it operates and the pre-tax results of its subsidiaries in each of these countries, which can change from year to year. ArcelorMittal operates in jurisdictions, mainly in Eastern Europe and Asia, which have a structurally lower corporate income tax rate than the statutory tax rate as enacted in Luxembourg (26.01%), as well as in jurisdictions, mainly in Western Europe and the Americas, which have a structurally higher corporate income tax rate.

Permanent items

The permanent items consist of: Year Ended December 31, 2016 2015 2014 Tax deductible write-downs on shares and receivables (5,971) (2,622) (338) Taxable capital gains on associates and joint ventures - - 67 Non tax deductible goodwill impairment - 250 - Non tax deductible hyperinflationary adjustment 22 114 - Taxable income of AMTFS 20 196 - Other permanent items (11) (62) (2) Total permanent items (5,940) (2,124) (273)

Tax deductible write-downs interest in Gallatin Steel. Services S.à r.l. (“AMTFS”), a Rate changes on shares and receivables: in Non tax deductible goodwill subsidiary of ArcelorMittal Treasury connection with the group impairment: in 2015 ArcelorMittal Americas LLC (“AMTAUS”), is a The 2016 tax expense from rate impairment test for goodwill and impaired the goodwill related to limited liability company organized changes of 593 is mainly due to property, plant and equipment the Mining segment for a total under the laws of Luxembourg the impact of the decrease in the (“PP&E”), the recoverability of the amount of 0.9 billion (see note 5.3). subject to taxation in Luxembourg future income tax rate on deferred carrying amounts of investments in on its worldwide income. AMTFS tax assets in Luxembourg resulting shares and intragroup receivables Non tax deductible has filed an election to be treated in tax expense of 647, partly offset is also reviewed annually, resulting hyperinflationary adjustment: non- as a disregarded entity for by a tax benefit of (50) in France. in tax deductible write-downs monetary items in Venezuela are United States federal income tax of the values of loans and shares revalued according to the inflation purposes. Therefore, the income The 2014 tax expense from rate of consolidated subsidiaries in rate for tax purposes. The resulting of AMTFS is subject to corporate changes of 36 is mainly due to the Luxembourg. difference is non-deductible to the income taxation simultaneously increase of the future income tax extent it generates a tax loss. in 2 different countries (i.e. rate in Ukraine, partially offset by a Taxable capital gains on associates Luxembourg and the United decrease in Spain. and joint ventures relate to the Taxable income of AMTFS: States). disposal of the Company’s 50% ArcelorMittal Treasury Financial Consolidated financial statements 143

Net change in measurement of interest expense following debt steel industry and unfavorable Tax effects of foreign currency deferred tax assets repayments. The taxable income foreign exchange movements, translation projection also includes $0.7 billion partially offset by reductions in The 2016 net change in negative effect of the revised forecasted interest expense due The tax effects of foreign currency measurement of deferred tax expectations of euro denominated to the Company’s announced translation of 73, 153 and 446 at assets of 5,344 primarily consists deferred tax assets recoverability in plans in 2016 to repay debt with December 31, 2016, 2015 and of tax expense of 5,971 due to the U.S. dollars terms. proceeds from a 3 billion equity 2014 respectively, refer mainly to unrecognized part of deferred rights offering and selling its 35% deferred tax assets and liabilities tax assets on write-downs of The 2015 net change in shareholding in Gestamp for of certain entities with a different the value of shares and loans measurement of deferred tax €875 million. The taxable income functional currency than the of consolidated subsidiaries assets of 4,940 primarily consists projection also included the effect currency applied for tax filing in Luxembourg, tax expense of tax expense of 2,622 due to the of the anticipated elimination purposes. In 2016 the effects are of 285 due to non-recognition unrecognized part of deferred of the current USD exposure of mainly due to appreciation of the and derecognition of other tax assets on write-downs of the Luxembourgish deferred tax assets U.S. dollar in relation to the Euro. deferred tax assets in other tax value of shares of consolidated denominated in Euro. jurisdictions, partially offset by an subsidiaries in Luxembourg, tax Tax credits additional recognition of deferred expense of 2,405 due to non- The 2014 net change in tax assets for losses and other recognition and derecognition measurement of deferred tax The tax credits are mainly deductible temporary differences of other deferred tax assets in assets of 306 primarily consists attributable to the Group’s of previous years of (912). In 2016, other tax jurisdictions, partially of tax expense of 338 due to the operating subsidiaries in Brazil, the Company recognized $0.4 offset by additional recognition unrecognized part of deferred Mexico and Spain. They relate to billion of previously unrecognized of deferred tax assets for losses tax assets on write-downs of the credits claimed on research and deferred tax assets relating to and other deductible temporary value of shares of consolidated development, credits on foreign the Luxembourg tax integration. differences of previous years subsidiaries in Luxembourg, investment and tax sparing credits. The recognition in Luxembourg of (87). In 2015, the Company tax expense of 492 due to includes $0.8 billion increase derecognized $0.4 billion of unrecognition and derecognition Other taxes in projections of future taxable previously recognized deferred of other deferred tax assets, income in Luxembourg driven tax assets, out of which $0.3 billion partially offset by additional Other taxes mainly include primarily by the improved market relates to the Luxembourg tax recognition of deferred tax assets withholding taxes on dividends, conditions of the steel industry integration. The derecognition in for losses and other deductible services, royalties and interests as and higher interest income from Luxembourg represents the net temporary differences of previous well as mining duties in Canada, favorable foreign exchange terms reduction in projections of future years of (524). Mexico and Ukraine and state tax relating to the funding of Group taxable income in Luxembourg in the United States. subsidiaries as well as further driven primarily by the challenging reduction in the forecasted market conditions affecting the Others

Others consist of: December 31, 2016 2015 2014 Tax contingencies/settlements 149 (8) 83 Prior period taxes (18) 96 3 Others 3 (14) (16) Total 134 74 70 The 2016 others of 134 primarily consist of uncertain tax positions for 149 mainly related to Europe and North America.

The 2015 others of 74 primarily consist of prior period taxes 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.

9.2 Income tax recorded directly in equity

Income tax recognized in equity for the years ended December 31, 2016, 2015 and 2014 is as follows:

December 31, 2016 2015 2014 Recognized in other comprehensive income on: Deferred tax expense (benefit) Unrealized gain (loss) on derivative financial instruments (1) 4 64 Recognized actuarial gain (loss) (1) 47 (94) Foreign currency translation adjustments 27 (83) (53) 25 (32) (83) 144 Consolidated financial statements

9.3 Uncertain tax positions

The Company operates in multiple jurisdictions with complex legal and tax regulatory environments. In certain of these jurisdictions, ArcelorMittal has taken 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 in complex transactions. The Company periodically reassesses its tax positions. Changes to the financial statement recognition, measurement, and disclosure of tax positions are 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 (see note 8 “Provisions, contingencies and commitments”).

9.4 Deferred tax assets and liabilities

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

Assets Liabilities Net 2016 2015 2016 2015 2016 2015 Intangible assets 34 16 (900) (751) (866) (735) Property, plant and equipment 457 444 (5,782) (6,261) (5,325) (5,817) Inventories 367 428 (315) (409) 52 19 Financial instruments 21 4 (206) (109) (185) (105) Other assets 307 450 (310) (368) (3) 82 Provisions 1,928 1,973 (330) (166) 1,598 1,807 Other liabilities 468 617 (555) (683) (87) (66) Tax losses carried forward 7,906 8,719 - - 7,906 8,719 Tax credits and other tax benefits carried forward 270 282 - - 270 282 Untaxed reserves - - (52) (57) (52) (57) Deferred tax assets / (liabilities) 11,758 12,933 (8,450) (8,804) 3,308 4,129

Deferred tax assets 5,837 6,625 Deferred tax liabilities (2,529) (2,496) The deferred tax assets recognized by the Company as of December 31, 2016 are analyzed as follows Gross Total deferred Recognized Unrecognized amount tax assets deferred tax assets deferred tax assets Tax losses carried forward 96,648 25,735 7,906 17,829 Tax credits and other tax benefits carried forward 1,807 1,107 270 837 Other temporary differences 17,946 5,440 3,582 1,858 Total 32,282 11,758 20,524 The deferred tax assets recognized by the Company as of December 31, 2015 are analyzed as follows:

Gross Total deferred Recognized Unrecognized amount tax assets deferred tax assets 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

As of December 31, 2016, the the subsidiary or tax consolidation assets at the applicable income limitations. The tax losses carried majority of the deferred tax assets group to which it belongs. The tax rate in Luxembourg. As at forward relate primarily to tax not recognized relate to tax losses utilization of tax losses carried December 31, 2015 the total deductible write-down charges carried forward attributable to forward also may be restricted amount of accumulated tax losses taken on investments in shares of various subsidiaries located in by the character of the income, in Luxembourg with respect consolidated subsidiaries recorded different jurisdictions (primarily expiration dates and limitations on to the main tax consolidation by certain of the ArcelorMittal France, Germany, Luxembourg, the yearly use of tax losses against amounts to approximately $55.4 group’s holding companies in Spain and the United States) with taxable income. billion, of this amount $24.6 Luxembourg. Of the total tax different statutory tax rates. The billion is considered realizable, losses carried forward, $25 billion amount of the total deferred tax As at December 31, 2016 the resulting in the recognition of may be subject to recapture in assets is the aggregate amount total amount of accumulated tax $6.8 billion of deferred tax assets the future if the write-downs of the various deferred tax assets losses in Luxembourg with respect at the applicable income tax that caused them are reversed recognized and unrecognized at to the main tax consolidation rate in Luxembourg. Under the creating taxable income unless the various subsidiaries and not amounts to approximately $70.5 Luxembourg tax legislation tax the Company converts them the result of a computation with a billion, of this amount, $23.6 losses generated during 2016 and to permanent through sales or given blended rate. The utilization billion is considered realizable, before can be carried forward other organizational restructuring of tax losses carried forward is resulting in the recognition indefinitely and are not subject to activities. restricted to the taxable income of of $6.1 billion of deferred tax any specific yearly loss utilization Consolidated financial statements 145

The Company believes that it is procurement activities performed 5,837 is at least 27,282. Historically, foreseeable future. No deferred probable that sufficient future in Luxembourg. In performing the Company has been able to tax liability has been recognized taxable profits will be generated to the assessment, the Company generate sufficient taxable income in respect of other temporary support the recognized deferred estimates at which point in time its and believes that it will generate differences on investments in tax asset for tax losses carried earnings projections are no longer sufficient levels of taxable income subsidiaries, associates and forward in Luxembourg. As part of reliable, and thus taxable profits are in the coming years to allow the interests in joint ventures because its recoverability assessment the no longer probable. Accordingly, Company to utilize tax benefits the Company is able to control Company has taken into account (i) the Company has established associated with tax losses carried the timing of the reversal of the its most recent forecast approved consistent forecast periods for forward and other deferred tax temporary difference and it is by management and the Board its different income streams assets that have been recognized probable that such differences of Directors, (ii) the likelihood that for estimating probable future in its consolidated financial will not reverse in the foreseeable the factors that have contributed taxable profits, against which the statements. Where the Company future. The amount of these to past losses in Luxembourg unused tax losses can be utilized in has had a history of recent losses, unrecognized deferred tax will not recur, (iii) the fact that Luxembourg. it relied on convincing other liabilities is approximately 856. ArcelorMittal in Luxembourg is the evidence such as the character of main provider of funding to the At December 31, 2016, based (historical) losses and planning 9.5 Tax losses, tax credits and other Group’s consolidated subsidiaries, upon the level of historical taxable opportunities to support the tax benefits carried forward leading to significant amounts of income and projections for future deferred tax assets recognized. taxable interest income, (iv) the taxable income over the periods in At December 31, 2016, the implementation in 2015 of an which the deductible temporary For the period ended December Company had total estimated tax Industrial Franchising Arrangement differences are anticipated to 31, 2016 ArcelorMittal recorded losses carried forward of 96,648. between ArcelorMittal and reverse, management believes it approximately 58 (December numerous worldwide operating is probable that ArcelorMittal will 31, 2015: 37) of deferred income This amount includes net subsidiaries, and (v) other realize the benefits of the deferred tax liabilities in respect of operating losses of 6,363 primarily significant and reliable sources tax assets of 5,837 recognized. deferred taxation that would related to subsidiaries in Liberia, of operational income earned The amount of future taxable arise if temporary differences Mexico, Basque Country in Spain, from ArcelorMittal’s European and income required to be generated on investments in subsidiaries, the Netherlands and the United worldwide operating subsidiaries by ArcelorMittal’s subsidiaries to associates and interests in joint States, which expire as follows: for centralized distribution and utilize the deferred tax assets of ventures were to be realized in the

Year expiring Recognized Unrecognized Total 2017 25 5 30 2018 68 4 72 2019 32 47 79 2020 67 91 158 2021 121 1,229 1,350 2022 - 2036 1,128 3,546 4,674 Total 1,441 4,922 6,363 The remaining tax losses carried forward for an amount of 90,285 (of which 28,263 are recognized and 62,022 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, 2016, the Company also had total estimated tax credits and other tax benefits carried forward of 1,107 tax effect.

Such amount includes tax credits and other tax benefits of 649 primarily attributable to subsidiaries in Belgium, Basque Country in Spain and the United States of which 76 recognized and 573 unrecognized, which expire as follows: Year expiring Recognized Unrecognized Total 2017 1 31 32 2018 - 44 44 2019 - 1 1 2020 - 2 2 2021 - 1 1 2022 - 2036 75 494 569 Total 76 573 649 The remaining tax credits and other tax benefits for an amount of 458 (of which 194 are recognized and 264 are unrecognized) are indefinite and primarily attributable to the Company’s operations in Brazil 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. 146 Consolidated financial statements

Note 10: Equity

10.1 Share details

The Company’s shares consist of the following:

December 31, 2014 Movement in year December 31, 2015 Movement in year * December 31, 2016 Issued shares 1,665,392,222 - 1,665,392,222 1,400,318,647 3,065,710,869 Treasury shares (11,018,413) 2,437,323 (8,581,090) 1,358,651 (7,222,439) Total outstanding shares 1,654,373,809 2,437,323 1,656,811,132 1,401,677,298 3,058,488,430 * refer to note 10.2 on the mandatorily convertible notes (137,967,116) and 10.1 on the new shares issued following equity offering (1,262,351,531)

Following the completion of an Authorized shares Treasury shares five years thereafter. A step up offering of ordinary shares on in interest of 0.25% would have January 14, 2013, ArcelorMittal At the Extraordinary General ArcelorMittal held, indirectly and occurred on the second reset increased share capital by Meeting held on May 8, 2012, directly, 7.2 million and 8.6 million date and a subsequent step up €455 million (608) from €6,428 the shareholders approved an treasury shares as of December of 0.75% (cumulative with the million (9,403) to €6,883 million increase of the authorized share 31, 2016 and December 31, 2015, initial 0.25%) fifteen years later. (10,011) through the issuance capital of ArcelorMittal by €643 respectively. The Company was entitled to call of 104,477,612 new shares fully million represented by 156 million the securities in five years, ten paid up. The aggregate number shares, or approximately 10% 10.2 Equity instruments and hybrid years and on subsequent coupon of shares issued and fully paid up of ArcelorMittal’s outstanding instruments payment dates. As the Company increased to 1,665,392,222. capital. Following this approval, had no obligation to redeem which is valid for five years, the Option premium on treasury the securities and the coupon On January 15, 2016, following total authorized share capital shares payment may have been deferred the maturity of the mandatorily was €7.7 billion represented by by the Company under certain convertible notes (see 10.2 below), 1,773,091,461 shares without par Following the repayment of the circumstances, it classified the the Company increased share value. 800 Convertible Senior Notes net proceeds from the issuance capital by €570 million (622) on May 15, 2014, the Company of subordinated perpetual capital from €6,883 million (10,011) to At the Extraordinary General reclassified from reserves to securities (642 net of transaction €7,453 million (10,633) through Meeting held on May 8, 2013, retained earnings premiums paid costs) as equity. Coupon payments the issuance of 137,967,116 new the shareholders approved an for an amount of 435 (309 net to holders of subordinated shares fully paid up. The aggregate increase of the authorized share of tax) with respect to expired perpetual capital securities in number of shares issued and fully capital of ArcelorMittal by €524 USD denominated call options 2013 and 2014 were 57 and 22, paid up increased to 1,803,359,338. million represented by 223 million on treasury shares acquired on respectively. shares, or approximately 8% December 18, 2010 in order to Following the extraordinary of ArcelorMittal’s outstanding hedge its obligations arising from On February 20, 2014, general meeting held on March capital. Following this approval, the potential conversion of the ArcelorMittal redeemed all of its 10, 2016, ArcelorMittal decreased which is valid for five years, the 800 Convertible Senior Notes into outstanding 650 subordinated share capital by €7,273 (10,376) total authorized share capital ArcelorMittal shares. perpetual capital securities from €7,453 (10,633) to €180 was €8.2 billion represented by following the occurrence of a (257) through a reduction of the 1,995,857,213 shares without par Subordinated perpetual capital “Ratings Agency Event”, as defined accounting par value per share to value. securities in the terms of the securities. The €0.10 without any distribution to notes were redeemed for 657, at a shareholders, the balance being At the Extraordinary General Subordinated perpetual capital redemption price of 101% of the allocated to additional paid-in Meeting held on March 10, 2016, securities issued by the Company principal amount, plus accrued capital. the shareholders approved a are classified as equity as the coupon of 22. decrease of the authorized share Company has no contractual On April 8, 2016, ArcelorMittal capital of the Company by €8,049 obligation to redeem the Mandatorily convertible notes completed an equity offering million through a reduction of the securities and coupon payment with net proceeds of 3,115 (net of accounting par value per share to may be deferred under certain Mandatorily convertible notes transaction costs of 40) by way of €0.10 and a subsequent increase circumstances. Coupons become issued by the Company are the issuance of 1,803,359,338 non- by €3 billion. Following the payable whenever the Company accounted for as compound statutory preferential subscription completion of the equity offering makes dividend payments. financial instruments. The net rights with a subscription price of on April 8, 2016, the Company’s Coupon accruals are considered present value of the coupon €2.20 per share at a ratio of 7 shares authorized share capital was in the determination of earnings payments at issuance date is for 10 rights subsequently to the decreased by €2.9 billion. As a for the purpose of calculating recognized as long-term obligation adoption of enabling resolutions result of the approval given by the earnings per share. and carried at amortized cost. The by the extraordinary general shareholders on March 10, 2016 value of the equity component meeting of shareholders on March and which is valid for five years, On September 28, 2012, the is determined based upon the 10, 2016. The Company increased the total authorized share capital Company issued subordinated difference of the cash proceeds share capital by €126 (144) from was €337 million represented by perpetual capital securities for received from the issuance of the €180 (257) to €306 (401) through 3,372,281,956 shares without par a nominal amount of 650 and notes and the net present value of the issuance of 1,262,351,531 new value. a coupon of 8.75%, which reset the financial liability component shares fully paid up. The aggregate periodically over the life of the on the date of issuance and is number of shares issued and fully securities, with the first reset after included in equity. paid up increased to 3,065,710,869. five years and subsequently every Consolidated financial statements 147

On January 16, 2013, ArcelorMittal Mandatory convertible bonds led to the extinguishment of the compared to the theoretical issued mandatorily convertible existing compound instrument ex-right price (“TERP”) of €3.40 subordinated notes (“MCNs”) with On December 28, 2009, the and the recognition of a new based on the closing price of net proceeds of 2,222. The notes Company issued through compound instrument including ArcelorMittal’s shares on Euronext have a maturity of 3 years, were Hera Ermac, a wholly-owned non-controlling interests for 902 Amsterdam on March 10, 2016. issued at 100% of the principal subsidiary, 750 unsecured (net of tax and fees) and debt for In accordance with IFRS, such amount and are mandatorily and unsubordinated bonds 91. The difference between the a rights issue includes a bonus converted into ordinary shares of mandatorily convertible into carrying amount of the previous element increasing the number ArcelorMittal at maturity unless preferred shares of such subsidiary. instrument and the fair value of of ordinary shares outstanding converted earlier at the option The bonds were placed privately the new instrument amounted to be used in calculating basic of the holders or ArcelorMittal with a Luxembourg affiliate to 49 and was recognized as and diluted earnings per share or upon specified events in of Crédit Agricole (formerly financing costs in the consolidated for all periods before the rights accordance with the terms of the Calyon) and are not listed. The statements of operations. issue. Accordingly, the table MCNs. The MCNs pay a coupon Company has the option to call below presents the numerators, of 6.00% per annum, payable the mandatory convertible bonds On November 20, 2015, the a reconciliation of the weighted quarterly in arrears. The minimum until ten business days before conversion date of the 1,000 average common shares conversion price of the MCNs was the maturity date. Hera Ermac mandatory convertible bonds was outstanding for the purposes set at $16.75, corresponding to invested the proceeds of the extended from January 29, 2016 of basic and diluted earnings the placement price of shares in bonds issuance and an equity to January 31, 2018. The other per share for the years ended the concurrent ordinary shares contribution by the Company main features of the mandatory December 31, 2016 and as offering as described above, and in notes issued by subsidiaries convertible bonds remained retrospectively adjusted for the the maximum conversion price of the Company linked to the unchanged. The Company above mentioned bonus element was set at approximately 125% values of shares of Erdemir and determined that this transaction for the years ended December 31, of the minimum conversion China Oriental Group Company led to the extinguishment of the 2015 and 2014. price (corresponding to $20.94). Ltd (“China Oriental”). On April existing compound instrument The minimum and maximum 20, 2011, the Company signed and the recognition of a new conversion prices are subject to an agreement for an extension compound instrument including adjustment upon the occurrence of the conversion date of the non-controlling interests for 880 of certain events, and were, as mandatory convertible bonds to (net of cumulative tax and fees) of December 31, 2015, $15.98 January 31, 2013. On September and debt for 106. The difference and $19.98, respectively. The 27, 2011, the Company increased between the carrying amount Company determined the notes the mandatory convertible bonds of the previous instrument met the definition of a compound from 750 to 1,000. and the fair value of the new financial instrument and as such instrument amounted to 79 and determined the fair value of the On December 18, 2012, the was recognized as financing costs financial liability component of Company signed an agreement in the consolidated statements of the bond was 384 on the date for an extension of the conversion operations. of issuance and recognized it as date of the mandatory convertible long-term obligation. The value bonds to January 31, 2014. 10.3 Earnings per common share of the equity component of 1,838 The other main features of was determined based upon the the mandatory convertible Basic earnings per common share difference of the cash proceeds bonds remained unchanged. is computed by dividing net received from the issuance of The Company determined income (loss) by the weighted the bond and the fair value of that this transaction led to the average number of common the financial liability component extinguishment of the existing shares outstanding during the on the date of issuance and is compound instrument and the year. Net income (loss) attributable included in equity. recognition of a new compound to ordinary shareholders takes instrument including non- into consideration dividend rights During the fourth quarter of controlling interests for 949 (net of of preferred shareholders such as 2015, the Company delivered tax and fees) and debt for 49. The holders of subordinated perpetual 2,275,026 treasury shares against difference between the carrying capital securities. Diluted earnings 1,817,869 notes converted at the amount of the previous instrument per share is computed by dividing option of their holders. As a result and the fair value of the new income (loss) available to equity of such voluntary conversions, instrument amounted to 65 and holders by the weighted average the carrying amount of MCNs was recognized as financing costs number of common shares and decreased by 38. On January 15, in the consolidated statements of potential common shares from 2016, upon final maturity of the operations. share unit plans and outstanding MCNs, the remaining outstanding stock options as well as potential 88,182,131 notes were converted On January 17, 2014, the common shares from the into 137,967,116 new common conversion date of the 1,000 conversion of certain convertible shares. Accordingly, share capital mandatory convertible bonds was bonds whenever the conversion and additional paid-in-capital extended from January 31, 2014 results in a dilutive effect. increased by 622 and 1,178, to January 29, 2016. The other respectively and the carrying main features of the mandatory On April 8, 2016, the Company amount of MCNs decreased by convertible bonds remained issued 1,262,351,531 new shares 1,800. unchanged. The Company at a subscription price of €2.20 per determined that this transaction share representing a 35% discount 148 Consolidated financial statements

Year Ended December 31, 2016 2015 2014 Net income (loss) attributable to equity holders of the parent 1,779 (7,946) (1,086) Interest assumed on the coupon and the premium for early redemption for subordinated perpetual capital securities - - (14) Net income (loss) considered for the purposes of basic and diluted earnings per share 1,779 (7,946) (1,100)

Weighted average common shares outstanding (in millions) for the purposes of basic earnings per share 2,860 1,795 1,791 Incremental shares from the rights issue on April 8, 2016 retrospectively adjusted for all prior periods - 521 521 Weighted average common shares outstanding (in millions) for the purposes of basic earnings per share (restated) 2,860 2,316 2,312 Incremental shares from assumed conversion of restricted share units and performance share units (in millions) 5 - - Weighted average common shares outstanding (in millions) for the purposes of diluted earnings per share 2,865 2,316 2,312

For the purpose of calculating earnings per common share, diluted weighted average common shares outstanding excludes 8 million and 7 million potential common shares from share unit plans for the years ended December 31, 2015 and 2014, and 14 million, 17 million and 20 million potential common shares from stock options outstanding for the years ended December 31, 2016, 2015 and 2014, respectively, because such share unit plans and stock options are anti-dilutive.

10.4 Dividends

Calculations to determine the amounts available for dividends are based on ArcelorMittal’s financial statements (“ArcelorMittal SA”) which are prepared in accordance with IFRS, as endorsed by the European Union. ArcelorMittal SA has no significant manufacturing operations of its own. Accordingly, it can only pay dividends or distributions to the extent it is entitled to receive cash dividend distributions from its subsidiaries’ recognized gains, from the sale of its assets or records share premium from the issuance of common shares. Dividends are declared in U.S. dollars and are payable in either U.S. dollars or in euros.

Dividend per share Total Description Approved by (in $) Payout date (in millions of $) Dividend for financial year 2013 Annual General Shareholders’ meeting on May 8, 2014 0.15 July 15, 2014 333 Dividend for financial year 2014 Annual General Shareholders’ meeting on May 5, 2015 0.15 June 15, 2015 331 Dividend for financial year 2015 Annual General Shareholders’ meeting on May 4, 2016 - - -

Following the Company’s equity offering in April 2016, the dividends declared per share for prior periods has been recasted in the current year for the years ended December 31, 2014 and 2013, respectively, to include the bonus element derived from the 35% discount to the theoretical ex- right price included in the subscription price. The actual dividends paid were $0.20 and $0.20 per issued share as of December 31, 2014 and 2013, respectively. Consolidated financial statements 149

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, 2016 and 2015 and for the year ended December 31, 2016, 2015 and 2014. Net income (loss) attributable % of non- Net income (loss) Net income (loss) to non- controlling attributable to attributable to controlling % of non- interests and non-controlling Non- non-controlling Non- interests controlling interests non-controlling interests for controlling interests for controlling for the Country of and non-controlling voting rights at the year ended interests at the year ended interests at year ended incorporation and voting rights at December 31, December 31, December 31, December 31, December December Name of Subsidiary operation December 31, 2016 2015 2016 2016 2015 31, 2015 31, 2014 AMSA South Africa 30.78% 47.98% (103) 307 (301) 416 (8) Sonasid1 Morocco 67.57% 67.57% (5) 95 (6) 109 10 ArcelorMittal Kryvyi Rih Ukraine 4.87% 4.87% 5 163 3 180 (6) Belgo Bekaert Arames ("BBA") Brazil 45.00% 45.00% 23 154 25 128 41 Hera Ermac2 Luxembourg - - - 880 - 880 - AMMIC3 Canada 15.00% 15.00% 28 488 32 493 88 Arceo 4 Belgium 62.86% 62.29% 5 148 4 145 - ArcelorMittal Liberia Ltd Liberia 15.00% 15.00% (5) (256) (239) (251) (13) Other 7 211 5 198 - Total (45) 2,190 (477) 2,298 112

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 AMMIC 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. 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. Additionally, on December 13, 2016, Sogepa made a capital injection into Arceo, decreasing the Company’s percentage ownership from 37.7% to 37.1%.

The tables below provide summarized statements of financial position as of December 31, 2016 and 2015 and the summarized statements of operations and summarized statements of cash flows for the year ended December 31, 2016, 2015 and 2014.

December 31, 2016 Summarized statements of financial position AMSA Sonasid AM Kryvyi Rih BBA Hera Ermac AMMIC Arceo AM Liberia Current assets 1,108 155 973 212 221 2,255 21 93 Non-current assets 1,145 107 2,857 206 1,798 3,751 219 49 Total assets 2,253 262 3,830 418 2,019 6,006 240 142 Current liabilities 1,013 94 491 82 65 314 4 1,081 Non-current liabilities 245 28 275 25 127 3,835 1 608 Net assets 995 140 3,064 311 1,827 1,857 235 (1,547)

December 31, 2016 Summarized statements of operations AMSA Sonasid AM Kryvyi Rih BBA Hera Ermac AMMIC Arceo AM Liberia Revenue 2,228 300 2,068 627 - 1,472 - 56 Net income (loss) (335) (7) 98 53 402 (66) 7 (29) Total comprehensive income (loss) (349) (8) 106 49 402 (74) 7 (29) 150 Consolidated financial statements

December 31, 2016 Summarized statements of cash flows AMSA Sonasid AM Kryvyi Rih BBA Hera Ermac AMMIC Arceo AM Liberia Net cash provided by / (used in) operating activities 11 28 159 63 28 279 4 (45) Net cash provided by / (used in) investing activities (149) (6) (156) (15) (28) (283) (78) (73) Net cash provided by / (used in) financing activities 80 (32) - (50) - (24) 80 117 Impact of currency movements on cash 29 - (5) 2 - - - - Cash and cash equivalents: At the beginning of the year 139 61 104 12 - 196 1 1 At the end of the year 110 51 102 12 - 168 7 -

Dividend to non-controlling interests - (6) - 25 - 30

December 31, 2015 Summarized statements of financial position AMSA Sonasid AM Kryvyi Rih BBA Hera Ermac AMMIC 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 AMSA Sonasid AM Kryvyi Rih BBA Hera Ermac AMMIC 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 AMSA Sonasid AM Kryvyi Rih BBA Hera Ermac AMMIC 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) - - Consolidated financial statements 151

December 31, 2014 Summarized statements of operations AMSA Sonasid AM Kryvyi Rih BBA Hera Ermac AMMIC 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 AMSA Sonasid AM Kryvyi Rih BBA Hera Ermac AMMIC 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- underwritten by ArcelorMittal. The In addition, on September 28, correspond to a share issue but controlling interests total cash proceeds amounted 2016, AMSA announced that it qualifies as an in substance option to ZAR 4.5 billion. ArcelorMittal had entered into agreements to (resulting in the recognition of Acquisitions of non-controlling subscribed the capital increase implement a transaction which an expense of 63 corresponding interests, which do not result through repayment of an includes the issuance of a 17% to the fair value at inception) as in a change of control, are outstanding intragroup loan of shareholding in AMSA using a new the shares give the holders only accounted for as transactions ZAR 3.2 billion and an additional class of notionally funded shares to notional dividend and voting with owners in their capacity cash injection of ZAR 0.5 billion. a special purpose vehicle owned rights for up to 10 years, resulting as owners and therefore no As a result of the rights issue, by Likamva Resources Proprietary in a decrease of ArcelorMittal’s goodwill is recognized as a ArcelorMittal’s shareholding in Limited (“Likamva”). Likamva has voting rights to 53.92%. The result of such transactions. In AMSA increased from 52% to undertaken to introduce broad- Company will recognize non- such circumstances, the carrying 70.55% and non-controlling based social and community controlling interests at the end of amounts of the controlling and interests decreased by 80. development organizations as the 10 year period depending on non-controlling interests are shareholders to hold an effective the value of the shares based on a adjusted to reflect the changes Effective October 17, 2016, 5% interest (of the 17%, leaving pre-defined formula. in their relative interests in ArcelorMittal’s interest in Likamva with a 12% shareholding) the subsidiary. Any difference AMSA decreased to 69.22%. within 24 months. The transaction There were no transactions with between the amount by which In the framework of AMSA’s also includes the issuance of a non-controlling interests in 2015. the non-controlling interests are transformation initiatives in order 5.1% shareholding in AMSA using Transactions with non-controlling adjusted and the fair value of the to maximize its score under the another new class of notionally interests in 2014 were as follows: consideration paid or received is Broad-Based Black Economic funded shares to the ArcelorMittal recognized directly in equity and Empowerment (“B-BBEE”) Codes South Africa Employee ArcelorMittal Luxembourg attributed to the owners of the of Good Practice, it launched on Empowerment Share Trust for parent. October 1, 2015 an employee the benefit of AMSA employees On November 20, 2014, the share ownership plan following and AMSA management. All the Company acquired the remaining Transactions with non-controlling which the Ikageng Broad-Based shares have certain restrictions on 0.14% of non-controlling interests interests in 2016 were as follows: Employee Share Trust obtained disposal for a period of 10 years in ArcelorMittal Luxembourg an ownership interest of 1.33% thereby promoting long-term following a mandatory squeeze AMSA in AMSA to be attributed to sustainable B-BBEE in AMSA. The out procedure. The total qualifying employees upon shares were issued on December consideration paid was 17. The On January 15, 2016, AMSA vesting date of the plan. 7, 2016. The Company concluded Company recorded an increase of completed a rights offering fully that the transaction does not 6 directly in equity.

2016 2014 ArcelorMittal Description AMSA Luxembourg Non-controlling interests 80 23 Purchase price (selling price), net (56)1 172 Adjustment to equity attributable to the equity holders of the parent 136 6 1 Amount paid in by non-controlling shareholders in AMSA following the rights issue 2 Purchase price (selling price) was settled in cash.

Transactions with non-controlling interests include also the mandatory convertible bonds (see note 10.2). 152 Consolidated financial statements

On February 23, 2017, ArcelorMittal and Votorantim S.A. announced the signing of an agreement, pursuant to which Votorantim’s long steel businesses in Brazil, Votorantim Siderurgia, will become a subsidiary of ArcelorMittal Brasil and Votorantim will hold a non-controlling interest in ArcelorMittal Brasil. The combined operations include ArcelorMittal Brasil’s production sites at Monlevade, Cariacica, Juiz de Fora, Piracicaba and Itaúna, and Votorantim Siderurgia’s production sites at Barra Mansa, Resende and its participation in Sitrel, in Três Lagoas. The transaction is subject to regulatory approvals in Brazil, including the approval of the Brazilian anti-trust authority CADE.

Note 11: Related parties

The related parties of the Group are predominately subsidiaries, joint operations, joint ventures, associates and key management personnel (see note 7.1) of the Group. Transaction between the parent company and its subsidiaries are eliminated on consolidation and are not disclosed in this note. Related parties include the Significant Shareholder, which is a trust of which Mr. Lakshmi N. Mittal, Mrs. Usha Mittal and their children are the beneficiaries and which owns 37.4% of ArcelorMittal’s ordinary shares.

Transactions with related parties of the Company mainly relate to sales and purchases of raw materials and steel products and were as follows:

11.1 Sales and trade receivables

Year ended December 31, December 31, Sales Trade receivables Transactions Category 2016 2015 2014 2016 2015 Calvert Joint Venture 1,400 1,271 1,136 35 6 Gonvarri Steel Industries1 Associate 1,210 1,233 1,456 58 32 ArcelorMittal CLN Distribuzione Italia S.r.l. Joint Venture 414 310 - - 2 Macsteel Joint Venture 399 516 579 17 22 Bamesa2 Associate 371 367 416 23 7 I/N Kote L.P. Joint Venture 346 377 412 12 24 Borçelik Joint Venture 240 305 516 4 4 C.L.N. Coils Lamiere Nastri S.p.A.3 Associate 203 310 563 5 3 Aperam Société Anonyme ("Aperam") Other 189 165 190 40 22 AM RZK Joint Venture 163 148 - 8 29 WDI 4 Associate 151 181 238 2 - ArcelorMittal BE Group SSC AB Joint Venture 60 52 59 4 2 Stalprofil S.A. Associate 57 53 82 9 4 Tameh Joint Venture 51 63 5 3 3 DHS GROUP Associate 47 38 33 3 7 Stalprodukt S.A.5 Available-for-sale 31 146 180 - 16 Consolidated Wire Industries (pty) Limited Joint Venture 31 34 50 - 1 Gestamp6 Other 26 310 297 - 2 Tuper S.A.7 Joint Venture 13 - - 25 - Baffinland Joint Venture 5 9 - 25 5 ArcelorMittal Algérie Spa8 Other - 19 93 - - Uttam Galva Associate - - 27 - - Other 227 217 274 49 25 Total 5,634 6,124 6,606 322 216 1 Gonvarri Steel Industries includes ArcelorMittal Gonvarri Brasil Productos Siderúrgicos. 2 Bamesa is composed of S.C. Bamesa Otel SA, Bamesa Çelik Servis Sanayi ve Ticaret Anonim Şirketi and its subsidiary 3 Parent company and its subsidiaries 4 WDI includes Westfälische Drahtindustrie Verwaltungsgesellschaft mbH & Co. KG and Westfälische Drahtindustrie GmbH 5 ArcelorMittal partially disposed of its former associate Stalprodukt S.A. was reclassified as available-for-sale on April 28, 2016 (see note 2) 6 ArcelorMittal disposed of the former associate Gestamp on February 1, 2016 (see note 2) 7 The joint venture Tuper S.A. was acquired on October 6, 2016 8 ArcelorMittal Algérie Spa became an associate on December 17, 2013 and was sold on August 7, 2016 (see note 2) Consolidated financial statements 153

11.2 Purchases and trade payables

Year ended December 31, December 31, Purchases Trade payables Transactions Category 2016 2015 2014 2016 2015 Empire Iron Mining Partnership Other 310 228 257 - - Tameh Joint Venture 236 245 12 53 58 Borçelik Joint Venture 173 165 175 36 30 Gonvarri Steel Industries1 Associate 146 176 193 23 27 Baffinland Joint Venture 75 19 - 2 5 Exeltium S.A.S. Associate 71 80 87 - 7 Aperam Other 65 131 168 10 11 CFL Cargo S.A. Associate 58 58 74 4 8 Baycoat Limited Partnership Joint Venture 41 42 43 5 5 Vulkan Energiewirtschaft Oderbrücke GmbH Other 41 39 44 7 6 Alkat Sp. Z O.o. Associate 31 32 36 4 3 Steeltrack Associate 17 26 22 3 3 EKO Schrottrecycling GmbH Joint Venture 15 24 35 1 1 Calvert Joint Venture 15 13 - 3 32 DHS GROUP Associate 2 1 12 - - Borusan Demir Çelik Sanayi ve Ticaret Anonim Sirketi Associate 1 33 34 - 2 Uttam Galva Associate - 31 65 - - Macsteel Joint Venture - 14 17 - - Other 93 103 81 28 58 Total 1,390 1,460 1,355 179 256 1 Gonvarri Steel Industries includes ArcelorMittal Gonvarri Brasil Productos Siderúrgicos

11.3 Other transactions with related parties

At December 31, 2016, the shareholder loans with a maturity between 1 and 3 years extended by the Company to Al Jubail had a carrying value of 149 (see note 2.4).

As of December 3, 2014, ArcelorMittal Calvert LLC signed a member capital expenditure loan agreement with the joint venture Calvert and as of December 31, 2016, the loans amounted to 93 including accrued interest. The loans bear interest from 3% to 3.75% and have various maturity dates ranging from 1 to 28 years.

Other non-current liabilities include 42 with respect to loan payable to Baffinland in relation to the capital increase in the joint venture.

In May 2014, ArcelorMittal entered into a 5-year off take agreement with its joint venture Baffinland, whereby it will buy the lesser of 50% of the annual quantity of iron ore produced by Baffinland or 2 million tonnes of iron ore per year. The purchase price includes a premium to reference prices based on high iron ore content. ArcelorMittal will continue to pay advances to Baffinland for an amount equivalent to 80% of the value of iron ore stockpiled by Baffinland outside the sailable season until August 31, 2017. From September 1, 2017 to August 31, 2019, ArcelorMittal will not pay advances to Baffinland as payments for the purchases will occur upon loading on vessel for shipment at port of Milne. Subject to Phase 3 being completed, the contract will be extended to August 31, 2021 and the maximum quantity shall increase to 4 million tonnes per contract year in contract years ending after December 31, 2018 but prior to August 31, 2021.

In May 2014, ArcelorMittal also entered into an additional contract with Baffinland whereby it agreed to act as a sales agent (“Marketing agreement”) for all of Baffinland’s iron ore (excluding the shipments subject to the offtake agreement mentioned above). The Company also entered into an agreement to advance 80% of the lesser of 50% of the annual quantity of iron ore produced by Baffinland or 1.5 million tonnes of iron ore per year. The contract expired on the extended maturity at April 30, 2016. On August 24, 2016, Baffinland entered into an agreement with a bank to finance an amount which does not exceed the lesser of 50% of iron ore stockpiled by Baffinland outside the sailable season and 2.3 million tonnes in any contract year. Under this agreement, which is guaranteed by ArcelorMittal, the bank purchases product from Baffinland, which is then sold to ArcelorMittal under a separate back-to-back contract (“AM Purchase Contract”). ArcelorMittal contracts with third-party steel mills for onward sale of the product purchased from the bank under the AM Purchase Contract. The agreement with the bank matures on September 20, 2017.

Following the Extraordinary General Meeting held on March 10, 2016, when the final terms of the rights issuance were defined, the Company decided, in accordance with its risk management policies, to hedge part of its foreign exchange exposure arising from the euro denominated proceeds of the rights issuance. Accordingly, on March 10, 2016, the Company entered into currency forward transactions with a credit institution to sell euro and buy U.S. dollar at an amount of €1 billion. The transactions settled on March 30, 2016. In parallel, the commitment by the Significant Shareholder to exercise its rights under the euro-denominated rights issuance gave rise to a foreign exchange exposure opposite to the one of the Company. Accordingly, on the same date, the Significant Shareholder entered into currency forward transactions, with the same credit institution as the Company, to hedge its foreign exchange exposure arising from potential fluctuations in the USD/Euro exchange rate. The transactions, which consisted of buying euro and selling U.S. dollar at an amount of €1 billion, settled on March 30, 2016. 154 Consolidated financial statements

Note 12: Principal accountant fees and services

Deloitte Audit S.à.r.l. acted as the principal independent registered public accounting firm for ArcelorMittal for the fiscal years ended December 31, 2016 and 2015. Set forth below is a breakdown of fees for services rendered in 2016 and 2015.

Audit Fees. Audit fees in 2016 and 2015 included 20.9 and 25.8, respectively, for the audits of financial statements, and 0.6 and 0.7 in 2016 and 2015, respectively, for regulatory filings.

Audit-Related Fees. Audit-related fees in 2016 and 2015 were 0.9 and 2.2, respectively. Audit-related fees primarily include fees for employee benefit plan audits.

Tax Fees. Fees relating to tax planning, advice and compliance in 2016 and 2015 were 0.3 and 1.0, respectively.

All Other Fees. Fees in 2016 and 2015 for all other services were 0.3 and 0.1, respectively. All other fees relate to services not included in the first three categories. Report of the reviseur d’entreprises agréé 155 Report of the reviseur 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 4, 2016, 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, 2016, 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, 2016, 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.

Other information

The Board of Directors is responsible for the other information. The other information comprises the consolidated management report, which includes the Corporate Governance Statement, but does not include the consolidated financial statements and our report of Réviseur d’Entreprises Agréé thereon.

Our opinion on the consolidated financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the consolidated financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report this fact. We have nothing to report in this regard.

Other matter

The Corporate Governance Statement includes information required by Article 68bis paragraph (1) of the law of December 19, 2002 on the commercial and companies register and on the accounting records and annual accounts of undertakings, as amended.

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 and has been prepared in accordance with the applicable legal requirements.

The information required by Article 68bis paragraph (1) letters c) and d) of the law of December 19, 2002 on the commercial and companies register and on the accounting records and annual accounts of undertakings, as amended and included in the Corporate Governance Statement is consistent with the consolidated financial statements and has been prepared in accordance with applicable legal requirements.

For Deloitte Audit, société à responsabilité limitée Cabinet de révision agréé

Vafa Moayed, Réviseur d’Entreprises Agréé Partner

February 28, 2017 560, rue de Neudorf L-2220 Luxembourg 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 157

Risk factors and the announcement of the trade measures and/or demand price decreases can sometimes anticipated merger of two major increases, would have a material develop their own momentum, ArcelorMittal’s business, financial Chinese steel producers is an adverse effect on ArcelorMittal’s as customers adopt a “wait and condition, results of operations, indication of potential progress results of operations and financial see” attitude and destock in reputation or prospects could to this end. It remains to be condition. the expectation of further price be materially adversely affected seen, however, if the country will decreases. by one or more of the risks and maintain or achieve such goals Protracted low steel and iron ore uncertainties described below. and whether the reduction in prices, or further decreases in As a result of these factors, steel capacity will result in a reduction steel and iron ore prices, would and iron ore prices have been Risks related to the global in steel production. In addition be likely to have an adverse under pressure in recent periods economy and the mining and to China, other developing effect on ArcelorMittal’s results of and particularly in 2015, with steel industry markets (such as Brazil, Russia operations. both steel and iron ore reaching and Ukraine) show structural historical lows in 2015. This Excess capacity, oversupply and overcapacity following years As an integrated producer of had a pronounced negative destocking cycles in the steel of rapid economic growth and steel and iron ore, ArcelorMittal’s effect on ArcelorMittal’s results industry and in the iron ore more recent slowdowns. Finally, results of operations are sensitive of operations, in the form of mining industry have in the past, certain developed markets, to the market prices of steel significant declines in revenues are currently and may continue particularly developed Asia and and iron ore in its markets and and operating income for 2015. in the future to weigh on the to a much lesser degree Europe, globally. The impact of market Moreover, the particularly sharp profitability of steel producers, remain in a position of structural steel prices on its results is decline in steel prices in the including ArcelorMittal. overcapacity notwithstanding direct. The impact of market second half of 2015 triggered rationalization steps taken iron ore prices is both direct, as inventory related losses of $1.3 The steel industry is affected by (in particular in Europe) ArcelorMittal sells iron ore on billion, and the significant decline global and regional production by ArcelorMittal and other the market to third parties, and in iron ore and coal prices led capacity and fluctuations in producers in recent years. indirect as iron ore is a principal to a $3.4 billion impairment of steel imports and exports, which raw material used in steel mining assets and goodwill in are themselves affected by The overcapacity of steel production and fluctuations in the fourth quarter of 2015. Steel the existence and amounts of production in the developing its market price are typically and prices generally improved during tariffs and customer stocking world and in China in particular eventually passed through to 2016 compared to the low levels and destocking cycles. The has weighed on global steel steel prices. Steel prices and iron of year-end 2015, but with a high steel industry globally has prices, since China is the ore prices are affected by supply level of volatility, particularly in historically suffered from largest global steel consumer trends (see above), demand the fourth quarter. Iron ore prices structural overcapacity, and and, even more directly, by trends and inventory cycles. In were highly volatile in 2016, the current global steelmaking leading to massive exports to terms of demand, steel and iron hitting a record low of $39.25 per capacity exceeds the current developed markets globally and ore prices are sensitive to trends tonne on January 14, 2016 but global consumption of steel. in particular Europe and NAFTA, in cyclical industries, such as with an average of $52.06 per This overcapacity is amplified ArcelorMittal’s principal markets. the automotive, construction, tonne for the first half of 2016 during periods of global or These exports, often at low appliance, machinery, equipment and an improvement in the third regional economic weakness prices that may be at or below and transportation industries, quarter of 2016 to an average due to weaker global or regional the cost of production, have which are significant markets for of $58.6 per tonne, and then to demand. In particular, China depressed steel prices in regional ArcelorMittal’s products. In the an average of $70.8 per tonne is both the largest global steel markets world-wide. See “Unfair past, substantial price decreases in the fourth quarter of 2016. consumer and the largest trade practices in ArcelorMittal’s during periods of economic Despite the recent price recovery global steel producer by a home markets could negatively weakness have not always been on quarterly averages seen large margin, and the balance affect steel prices and reduce offset by commensurate price over the second half of 2016, between its domestic production ArcelorMittal’s profitability.” increases during periods of iron ore prices are expected to and consumption has been an economic strength. In addition, remain under pressure from the important factor influencing Despite prolonged iron as indicated above, excess expected continued oversupply. global steel prices in recent ore oversupply in recent supply relative to demand in years. According to the monthly years, mining companies local markets generally results While the steel price increases data from the Chinese National have continued to increase in increased exports and drives and iron ore price recovery Bureau of Statistics, Chinese production, with global seaborne down global prices. In terms during the second half of 2016 steel production totaled 799 supply increasing again in 2016 of inventory, steel stocking may well be supported by million metric tonnes in 2015 and expected to increase further and destocking cycles affect underlying demand trends, the and 808 million metric tonnes in 2017 and 2018. Excess iron ore apparent demand for steel and timing and extent of continued in 2016. Chinese apparent steel supply coupled with decreased hence steel prices and steel price recovery or return to prior consumption is structurally demand in iron ore consuming producers’ profitability. For levels cannot be predicted. In below these production levels, industries, such as steel, has led example, steel distributors may response to recent declines and with exports of 112.4 million to a prolonged depression of accumulate substantial steel higher volatility in steel and iron tonnes in 2015 and 109 million iron ore prices, which has in turn inventories in periods of low ore prices, the Company has tonnes in 2016, double the levels weighed on steel prices as iron prices and, in periods of rising implemented in recent years a seen in 2012 and 2013. Given ore is a principal raw material in real demand for steel from end- number of cost-saving measures this structural overcapacity, steelmaking. users, steel distributors may sell intended to improve operating the Chinese government has steel from inventory (destock), income, as well as measures to indicated its intention to reduce A continuation of this trend of thereby delaying the effective reduce its cash requirements, steel production capacity by steel and iron ore oversupply, if implementation of steel price including through lower capital 100-150 million tonnes by 2020, not counterbalanced by effective increases. Conversely, steel expenditures, interest expense 158 Risk factors

and the suspension of dividend the upward trend beginning particular, steel production more frequent) formula-based payments. These actions may mid-2013. However, the second consumes substantial amounts or negotiated price adjustments not prove sufficient to restore half of 2014 and the full year 2015 of raw materials including iron and as a steel producer sells or maintain profitability or cash saw substantial decreases in steel ore, coking coal and coke, and a substantial part of its steel flows, particularly if the low level prices, which dropped to $353 the production of direct reduced products at spot prices, it faces of steel and iron ore prices is per tonne at the end of 2015, iron, the production of steel in the risk of adverse differentials prolonged and the recent price exceeding the historical lows. electric arc furnaces (“EAFs”) and between its own production increases do not hold, in which Steel prices rebounded strongly the re-heating of steel involve costs, which are affected by case, ArcelorMittal’s results in 2016, from a low of $338 per the use of significant amounts of global raw materials and scrap of operations and financial tonne in January up to a peak of energy, making steel companies prices, on the one hand, and condition would be adversely $506 per tonne in June 2016. The dependent on the price of and trends for steel prices in regional affected. second half of 2016 started with their reliable access to supplies markets, on the other hand. a short-lived price softening to of raw materials and energy. Volatility in the supply and prices $452 per tonne in July, followed Although ArcelorMittal has Another area of exposure to of raw materials, energy and by a steady increase towards year substantial sources of iron ore price volatility is energy and transportation, and volatility end reaching $595 per tonne and coal from its own mines and transportation. Freight costs in steel prices or mismatches in December 2016. See “Steel strategic long-term contracts (i.e., shipping) are a substantial between steel prices and raw prices” for more information. (the Company’s self-sufficiency component of ArcelorMittal’s cost material prices could adversely rates were 55% for iron ore and of goods sold. Freight costs were affect ArcelorMittal’s results of Volatility in steel and raw material 15% for pulverized coal injection particularly low in the second half operations. prices can result from many (“PCI”) and coal in 2016), it of 2015 due, among other things, factors including: trends in nevertheless remains exposed to to depressed oil prices and The prices of steel, iron ore, demand for iron ore in the steel volatility in the supply and price demand. Ocean freight market coking coal, coke and scrap are industry itself, and particularly of iron ore, coking coal and coke rates for dry cargo remained low highly volatile. For example, from Chinese steel producers (as given that it obtains a significant but volatile during 2016 with the iron ore spot prices fluctuated the largest group of producers); portion of such raw materials Baltic Dry Index (“BDI”) reaching between a peak of $160 per industry structural factors under supply contracts from third its lowest value historically in tonne (Platts index, CFR China, (including the oligopolistic nature parties. February 2016 at 290 points but 62% Fe) in February 2013 and of the sea-borne iron ore industry recovering during the year driven $110 per tonne at the end of May and the fragmented nature of the Furthermore, while steel and by heavy demolition of ships and in 2013 before steady declines steel industry); the expectation raw material (in particular iron an increase in Chinese demand culminated in a historical low at or imposition of corrective trade ore and coking coal) price in the fourth quarter of 2016. If the end of December 2015 of measures; massive stocking and trends have historically been freight costs were to increase $38.50 per tonne. A period of destocking activities (sudden correlated, a lack of correlation or before iron ore or steel prices, this high volatility followed as prices drops in prices can lead end- an abnormal lag in the corollary would directly and mechanically spiked to $70.50 in April 2016, users to delay orders pushing relationship between raw weigh on ArcelorMittal’s declining to $49.30 per tonne on prices down further), as occurred material and steel prices may also profitability (although it would June 2, 2016 and then increasing most recently toward the end of occur and result in a “price-cost make imports less competitive). to $83.95 per tonne on December 2015 and early 2016; speculation; squeeze” in the steel industry. 12, 2016. A recent example of this new laws or regulations; ArcelorMittal has experienced ArcelorMittal’s business volatility is the sudden and sharp changes in the supply of iron price-cost squeezes at various and results are substantially increase in the coking coal prices ore, in particular due to new points in recent years and may affected by regional and global in the second half of 2016, largely mines coming into operation; continue to do so. In some of macroeconomic conditions. driven by a Chinese domestic business continuity of suppliers; ArcelorMittal’s segments, in Recessions or prolonged periods shortage of coking coal as well changes in pricing models particular Europe and NAFTA, of weak growth in the global as maintenance and operational or contract arrangements; there are several months economy or the economies of production issues in Australian expansion projects of suppliers; between raw material purchases ArcelorMittal’s key selling markets coking coal mines during the worldwide production, including and sales of steel products have in the past had and in the period. Hard coking coal (“HCC”) interruptions thereof by incorporating those materials, future would be likely to have spot prices rose from $92 per suppliers; capacity-utilization rendering them particularly a material adverse effect on tonne at the beginning of July to rates; accidents or other similar susceptible to price-cost squeeze. the mining and steel industries $212.50 per tonne on September events at suppliers’ premises This lag and the resulting and on ArcelorMittal’s results 29, 2016 and a maximum of $310 or along the supply chain; price-cost squeeze due to the of operations and financial per tonne on November 8, 2016, wars, natural disasters, political increase in coking coal prices, condition. and finally closing the fourth disruption and other similar among other factors, resulted quarter with a spot average at events; fluctuations in exchange in a decline in profitability in The mining and steel industries $266.15 per tonne. rates; the bargaining power the fourth quarter of 2016. The have historically been highly of raw material suppliers and impact on 2017 profitability will volatile largely due to the cyclical Steel prices have similarly the availability and cost of be dependent on the outcome of nature of the business sectors demonstrated significant transportation. supply contract negotiations as that are the principal consumers volatility, for example in Europe well as evolution of spot indexes of steel as described above. ranging in 2013 from a high As a producer and seller of steel, and efforts to pass the input Demand for minerals, metals and of $690 per tonne to a low of the Company is directly exposed cost increase on to steel prices. steel products thus generally $586 per tonne (SBB, HRC N. to fluctuations in the market Because ArcelorMittal sources correlates to macroeconomic Europe domestic EXW Ruhr). In price for steel, iron ore, coking a substantial portion of its raw fluctuations in the global the first half of 2014, steel prices coal and other raw materials, materials through long-term economy. For example, this increased steadily, continuing energy and transportation. In contracts with quarterly (or correlation and the adverse effect Risk factors 159

of macroeconomic downturns sharply. These would likely result studies suggest that Chinese expiry on December 11, 2016 on metal mining companies and in continued and prolonged low-cost steel exports benefit of certain protocols to its 2001 steel producers were evidenced subdued demand for (and from significant state support, accession to the WTO. MES is in the 2008/2009 financial and hence the price of) steel and which allows for the sale of such a bilateral designation that is subsequent economic crisis. iron ore. These developments steel products at artificially low granted individually by a given The results of both mining would have a material adverse prices, including at a loss to country and can be made on companies and steel producers effect on ArcelorMittal’s results producers, which has a significant the basis of a legal or political were substantially affected, with of operations and financial negative impact on global steel determination. Several countries, many steel producers (including condition. prices and the industry more including several in markets in ArcelorMittal) recording sharply generally. Moreover, while China which ArcelorMittal operates, reduced revenues and operating Unfair trade practices in is widely considered the most have already granted China MES losses. Economic growth (and ArcelorMittal’s home markets significant exporter of artificially and a day after the expiration hence steel and minerals could negatively affect steel low-cost steel products, several of the subparagraph “a” of demand) trends have varied prices and reduce ArcelorMittal’s other countries are suspected article 15 (December 12, 2016) across such markets since such profitability. to engage in similar unfair trade of the accession protocol of period. and pricing practices in the steel China to the WTO regarding the ArcelorMittal is exposed to the industry. In response, in the methodology for calculating In 2015, global apparent steel effects of “dumping” and other United States, final affirmative the dumping margins, China consumption contracted unfair trade and pricing practices duty measures were adopted notified the WTO Secretariat notably in China and most of by competitors. Moreover, in 2016 with respect to three that it had requested dispute ArcelorMittal’s core markets government subsidization of ArcelorMittal’s flat products consultations with the United except Europe. In 2016, global of the steel industry remains categories, corrosion-resistance States and the European Union steel demand has improved widespread in certain countries, steel, cold-rolled coil and hot- regarding special calculation particularly in China where particularly those with centrally- rolled coil, and a preliminary methodologies used by the demand is estimated to have controlled economies such determination was confirmed for U.S. and EU in anti-dumping grown slightly this year. This as China. In periods of lower heavy plate in the U.S, and the proceedings. As of the date of is due to a rebound in real global demand for steel, there U.S. Department of Commerce this report, neither the European estate sales leading to growth is an increased risk of additional has initiated anti-circumvention Union nor the United States had in newly started floor space, volumes of unfairly-traded steel investigations on cold-rolled granted China MES, and while the strength of auto and the exports into various markets, coils and corrosion-resistant steel Brazil recognized China’s MES in a rebound of machinery from including North America and products from China (through memorandum of understanding declines seen in 2015. Europe is Europe and other markets Vietnam). In Europe, definitive in 2004, it continues to treat a major market for ArcelorMittal, such as South Africa, in which measures have been adopted China as having non-MES for the whose results have suffered in ArcelorMittal produces and for cold-rolled coils versus purposes of calculating anti- prior years from recession and sells its products. Such imports China and Russia, preliminary dumping duties. No assurance stagnation. European demand have had and could in the antidumping duties have been can be given as to whether or has grown since 2013 as the steel future have the effect of further adopted on hot-rolled coil and when the EU, U.S., Brazil or other consuming sectors, particularly reducing prices and demand for heavy plate imports from China countries will grant MES to China. automotive, have gradually ArcelorMittal’s products. as well as a new hot-rolled coil A country’s decision to grant improved. In the US, growth anti-dumping investigations MES to China would substantially in underlying steel demand Instances of such perceived have been initiated against five reduce the anti-dumping duty has continued for flat and long dumping have been especially other countries. Additionally, margins that it may apply against products but apparent demand acute in recent years, and China the Company has collaborated China pursuant to the rules of has been impacted since 2014 has been accused by several to pursue anti-dumping actions WTO. This would encourage or by significant destocking and countries and market participants in Canada, Mexico, Brazil and at least fail to discourage China’s lower energy demand for pipes of engaging in the widespread South Africa. It remains unclear, exportation of unfairly traded and tubes. In Brazil and the CIS, dumping of significant amounts however, whether further anti- steel products into several apparent steel demand continues of low-cost steel products in dumping duties will be imposed markets in which ArcelorMittal to decline significantly due to several markets. Chinese imports against Chinese imports or operates. the ongoing recessions. In South in key ArcelorMittal markets other exporting countries, and Africa, after stagnating in 2014, have seen significant increases how markets will respond to A continuation or an increase in steel demand also declined in in recent years from already high current and future anti-dumping exports of low-cost steel products 2016, especially for flat products. levels: Chinese steel exports measures. Furthermore, no from developing countries, along to the EU increased from 1.7 assurance can be given that with a lack of effective remedial The short-term outlook is for million tonnes in 2009 to 7.2 such legislation will achieve its trade policies, would continue a gradual pick-up in global million tonnes in 2015 and an intended result or that benefits to depress steel prices in various GDP supported by a modest estimated 6.1 million tonnes will accrue to steelmakers at the markets globally, including in rebound in the US, an end to in 2016. Chinese exports into intended rate and scale, or at all. ArcelorMittal’s key markets. recessions in Russia and Brazil, North America increased from offset slightly by weaker EU 0.75 million tonnes in 2009 to Against this backdrop of Conversely, ArcelorMittal has growth. However, there are 2.7 million tonnes in 2014 before increasing dumping and exposure to the effects of many risks to the global outlook declining to 2.2 million tonnes other unfair trade and pricing trade sanctions and barriers including political tensions in in 2015 and approximately 1 pressures, China is lobbying due to the global nature of its Europe; threats to globalization million tonnes in 2016 due in members of the World Trade operations. Various countries by renewed protectionism; high particular to the imposition Organization (“WTO”) for have in the past instituted trade debt and an aging population of duties (as noted below). As immediate “Market Economy sanctions and barriers and the causing Chinese growth to slow mentioned above, industry Status” (“MES”) in light of the recurrence of such measures, 160 Risk factors

or the imposition of the above- cement, composites, glass, plastic in operating practices. Failure conditions of life. Any actions mentioned anti-dumping and wood. In particular, as a to comply can result in civil taken by such individuals or legislation, could adversely result of increasingly stringent and or criminal penalties being communities in response to such affect ArcelorMittal’s business by regulatory requirements, imposed, the suspension of concerns could compromise limiting the Company’s access as well as developments in permits, requirements to curtail ArcelorMittal’s profitability or, in to steel markets. In the United alternative materials, designers, or suspend operations and extreme cases, the viability of an States, the recent presidential engineers and industrial lawsuits by third parties. Despite operation or the development and congressional elections manufacturers, especially those ArcelorMittal’s efforts to comply of new activities in the relevant could result in significant in the automotive industry, are with environmental laws and region or country. changes in, and uncertainty with increasing their use of lighter regulations, environmental respect to, legislation, regulation weight and alternative materials, incidents or accidents may See note 8.2 to ArcelorMittal’s and government policy directly such as aluminum, composites, occur that negatively affect the consolidated financial affecting ArcelorMittal’s business plastics and carbon fiber in Company’s reputation or the statements. (in particular exports from their products and/or reducing operations of key facilities. Canada or Mexico into the United their use of steel. For example, Laws and regulations restricting States) or indirectly affecting the automakers have begun to use ArcelorMittal also incurs costs emissions of greenhouse gases Company because of impacts greater amounts of aluminum and liabilities associated with the could force ArcelorMittal to incur on its customers and suppliers. and smaller proportions of steel assessment and remediation of increased capital and operating In particular, President Trump in some models in recent years. contaminated sites. In addition costs and could have a material has made comments suggesting to the impact on current facilities adverse effect on ArcelorMittal’s that he intends to re-negotiate While ArcelorMittal has and operations, environmental results of operations and financial the free trade agreements that introduced new high-strength remediation obligations can condition. the United States is party to, steel products, such as Usibor® give rise to substantial liabilities including NAFTA, although it 2000 and others to respond in respect of divested assets Compliance with new and remains unclear what specifically to the need for lighter weight and past activities. This may more stringent environmental the new U.S. administration and materials, loss of market share to also be the case for acquisitions obligations relating to U.S. Congress will or will not do in substitute materials, increased when liabilities for past acts or greenhouse gas emissions this respect. government regulatory initiatives omissions are not adequately may require additional capital favoring the use of alternative reflected in the terms and price expenditures or modifications Developments in the competitive materials, as well as the of the acquisition. ArcelorMittal in operating practices, as well as environment in the steel industry development of additional new could become subject to additional reporting obligations. could have an adverse effect substitutes for steel products further remediation obligations The integrated steel process on ArcelorMittal’s competitive could significantly reduce market in the future, as additional involves carbon and creates position and hence its business, prices and demand for steel contamination is discovered or carbon dioxide (“CO2”), which financial condition, results of products and thereby reduce cleanup standards become more distinguishes integrated steel operations or prospects. ArcelorMittal’s cash flows and stringent. producers from mini-mills and profitability. many other industries where CO2 The markets in which steel Costs and liabilities associated generation is primarily linked to companies operate are highly ArcelorMittal is subject to with mining activities include energy use. competitive. Competition in the strict environmental laws and those resulting from tailings form of established producers regulations that could give rise to and sludge disposal, effluent The EU has established expanding in new markets, a significant increase in costs and management, and rehabilitation greenhouse gas regulations and smaller producers increasing liabilities. of land disturbed during mining is revising its emission trading production in anticipation of processes. ArcelorMittal could system for the period after 2020 demand increases or amid ArcelorMittal is subject to a broad become subject to unidentified in a manner that may require recoveries, or exporters selling range of environmental laws liabilities in the future, such as ArcelorMittal to incur additional excess capacity from markets and regulations in each of the those relating to uncontrolled costs to acquire emissions such as China could cause jurisdictions in which it operates. tailings breaches or other future allowances. In Kazakhstan the ArcelorMittal to lose market These laws and regulations events or to underestimated government has installed a share, increase expenditures impose increasingly stringent emissions of polluting domestic trading system which or reduce pricing. Any of these environmental protection substances. For example, the currently is in a pilot phase developments could have a standards regarding, among failure of a tailings ponds dam at but would be similar to the EU material adverse effect on its others, air emissions, wastewater ArcelorMittal’s mines could cause system. South Africa envisages business, financial condition, storage, treatment and significant damage, including to start with a CO2 tax system in results of operations or prospects. discharges, the use and handling death, injury and environmental 2017. The United States required of hazardous or toxic materials, harm. While the Company carries reporting of greenhouse gas Competition from other materials waste disposal practices and the out assessments of its facilities, it emissions from certain large could reduce market prices and remediation of environmental cannot guarantee that failures or sources beginning in 2011 demand for steel products and contamination. The costs breaches of a tailings ponds dam and has begun adopting and thereby reduce ArcelorMittal’s of complying with, and the will not occur in the future. implementing regulations to cash flows and profitability. imposition of liabilities pursuant restrict emissions of greenhouse to, environmental laws and ArcelorMittal’s operations gases under existing provisions of In many applications, steel regulations can be significant, may be located in areas where the Clean Air Act. competes with other materials and compliance with new and individuals or communities that may be used as substitutes, more stringent obligations may regard its activities as Further measures, in the EU, the such as aluminum (particularly may require additional capital having a detrimental effect on United States, and many other in the automobile industry), expenditures or modifications their natural environment and countries, may be enacted in the Risk factors 161

future. In particular, in December on the extent of the difference which could have significant could increase should market 2015, the 195 countries between the requirements in adverse consequences for the conditions deteriorate or if it participating in the United developed regions (such as Company’s workers and facilities, records impairment charges for National Framework Convention Europe) and developing regions as well as the environment. tangible or intangible assets, on Climate Change reached (such as China or the CIS), this Such accidents could lead to such as property, plant and an international agreement, competitive disadvantage could production stoppages, loss of key equipment, goodwill or deferred the Paris Agreement. The 21st be severe and render production personnel, the loss of key assets, tax assets (see “Changes in Conference of the Parties in the developed region or put at risk employees (and assumptions underlying the meeting (“COP21”) has confirmed structurally unprofitable. those of sub-contractors and carrying value of certain assets, the risk of climate change and suppliers) or persons living near including as a result of adverse the urgent need to address it. See note 8.2 to ArcelorMittal’s affected sites. market conditions, could result The Paris Agreement aims to consolidated financial in the impairment of such assets, implement the necessary drivers statements. See note 8.2 to ArcelorMittal’s including intangible assets to achieve drastic reductions of consolidated financial such as goodwill” below); for carbon emissions. The Company ArcelorMittal is subject to statements. example, ArcelorMittal recorded takes this message seriously and stringent health and safety laws substantial impairments in 2012 investigates its possibilities to and regulations that give rise to Risks related to ArcelorMittal and 2015. Substantial increases contribute to this by developing significant costs and could give in its gearing could affect research and development rise to significant liabilities. ArcelorMittal has a substantial ArcelorMittal’s ability to, and programs, investigating its amount of indebtedness, which the conditions under which it technical possibilities to reduce ArcelorMittal is subject to a broad could make it more difficult might, access financial markets emissions and following the range of health and safety laws or expensive to refinance its to refinance maturing debt on state of knowledge on climate and regulations in each of the maturing debt, incur new debt acceptable terms. ArcelorMittal’s change closely. Such obligations, jurisdictions in which it operates. and/or flexibly manage its access to financial markets for whether in the form of a national These laws and regulations, business. refinancing also depends on the or international cap-and-trade as interpreted by relevant conditions in the global capital emissions permit system, a agencies and the courts, impose As of December 31, 2016, and credit markets, which are carbon tax, emissions controls, increasingly stringent health ArcelorMittal had total debt volatile. For example, during reporting requirements, or and safety protection standards. outstanding of $13.7 billion, the 2008/2009 financial and other regulatory initiatives, The costs of complying with, including $1.9 billion of short- economic crisis and again at the could have a negative effect on and the imposition of liabilities term indebtedness (including height of the eurozone sovereign ArcelorMittal’s production levels, pursuant to, health and safety payables to banks and the debt crisis in 2012, access to the income and cash flows. Such laws and regulations could be current portion of long-term financial markets was restricted regulations could also have a significant, and failure to comply debt) and $11.8 billion of for many companies. Various negative effect on the Company’s could result in the assessment long-term indebtedness. As of macroeconomic and market suppliers and customers, which of civil and criminal penalties, December 31, 2016, ArcelorMittal factors could cause similar could result in higher costs and the suspension of permits or had $2.6 billion of cash and cash credit contractions at any time. lower sales. Moreover, the EU operations, and lawsuits by third equivalents, including restricted Under such circumstances, the Commission’s decision to further parties. In addition, under certain cash, and $5.5 billion available to Company could experience reduce the allocation of CO2 circumstances authorities could be drawn under existing credit difficulties in accessing the emission rights to companies require ArcelorMittal facilities facilities. As of December 31, financial markets on acceptable could negatively impact the to curtail or suspend operations 2016, the maturity schedule of terms or at all. global industry, as the amount based on health and safety outstanding debt was as follows: of such rights is currently at the concerns. in 2017 ($1.9 billion), in 2018 ($1.5 ArcelorMittal’s level of debt edge of covering technically billion), 2019 ($1.9 billion), 2020 outstanding could have adverse achievable operating conditions. Despite ArcelorMittal’s efforts to ($1.9 billion), 2021 ($1.4 billion) consequences more generally, monitor and reduce accidents and beyond ($5.1 billion). The including impairing its ability Furthermore, many at its facilities, health and safety Company also relies on its true to obtain additional financing developing nations have incidents do occur, some of sale of receivables programs for for working capital, capital not yet instituted significant which may result in costs and an aggregate program amount expenditures, acquisitions, greenhouse gas regulations, liabilities and negatively impact (i.e., the maximum amount of general corporate purposes or and the Paris Agreement ArcelorMittal’s reputation or the unpaid receivables that may other purposes, and limiting its specifically recognized that operations of the affected facility. be sold and outstanding at flexibility to adjust to changing peaking of greenhouse gas Such accidents could include any given time) of $5.2 billion, market conditions or withstand emissions will occur later in explosions or gas leaks, fires or of which $4.7 billion was competitive pressures, resulting developing countries. As the collapses in underground mining outstanding as of December in greater vulnerability to a Paris Agreement recognizes operations, vehicular accidents, 31, 2016, as a way to manage its downturn in general economic that the Intended Nationally and other accidents involving working capital cycle. conditions. While ArcelorMittal Determined Contributions mobile equipment, or exposure has made substantial progress in (“INDC”) for developing to radioactive or other potentially ArcelorMittal’s gearing (long- deleveraging, further reductions nations may be less stringent hazardous materials. Some of term debt, plus short-term debt, in “net debt” (i.e., long-term in light of different national ArcelorMittal’s industrial activities less cash and cash equivalents debt net of current portion plus circumstances, ArcelorMittal may involve the use, storage and and restricted cash, divided payables to banks and current be at a competitive disadvantage transport of dangerous chemicals by total equity), was 34% at portion of long-term debt, less relative to steelmakers having and toxic substances, and December 31, 2016 as compared cash and cash equivalents, more or all of their production ArcelorMittal is therefore subject to 57% at December 31, 2015. restricted cash and short-term in such countries. Depending to the risk of industrial accidents ArcelorMittal’s level of gearing investments) continues to be a 162 Risk factors

key focus, although there is no 2016. On November 12, 2015, These restrictive and financial ArcelorMittal’s level of assurance that it will succeed. Moody’s further downgraded covenants could limit profitability and cash flow ArcelorMittal and placed it on ArcelorMittal’s operating and currently is and, depending on Moreover, ArcelorMittal could, negative outlook, but then financial flexibility. Failure to market and operating conditions, in order to increase its financial upgraded its outlook to stable on comply with any covenant may in the future be, substantially flexibility and strengthen its August 16, 2016. On November would enable the lenders affected by its ability to reduce balance sheet, implement capital 16, 2015, while Fitch affirmed its to accelerate ArcelorMittal’s costs and improve operating raising measures such as equity credit rating of ArcelorMittal, it repayment obligations. efficiency. offerings (as was done in May lowered its outlook to negative. Moreover, ArcelorMittal’s 2009, January 2013 and April The margin under ArcelorMittal’s debt facilities have provisions Difficult operating conditions in 2016), which could (depending principal credit facilities and whereby certain events relating recent years, due in particular on how they are structured) certain of its outstanding bonds to other borrowers within the to macroeconomic conditions dilute the interests of existing is subject to adjustment in the ArcelorMittal group could, under and supply/demand trends, shareholders or require them event of a change in its long- certain circumstances, lead to have reduced ArcelorMittal’s to invest further funds to avoid term credit ratings, and the 2012, acceleration of debt repayment operating profitability, decreased such dilution. In addition, February 2015 and November under the credit facilities. Any its positive cash flows and ArcelorMittal has undertaken 2015 downgrades resulted invocation of these cross- reduced its profitability. The steel and may undertake further asset in increased interest expense acceleration clauses could cause industry has historically been disposals in order to reduce in 2016. See “Liquidity and some or all of the other debt cyclical, periodically experiencing debt. These asset disposals are capital resources”. Any further to accelerate, creating liquidity difficult operating conditions. subject to execution risk and downgrades in ArcelorMittal’s pressures. In addition, the mere In light of this, ArcelorMittal has may fail to materialize, and the credit ratings would result in market perception of a potential historically and increasingly in proceeds received from such a further increase in its cost of breach of any financial covenant recent periods, taken initiatives disposals may not reflect values borrowing and could significantly could have a negative impact on to reduce its costs and increase that management believes harm its financial condition and ArcelorMittal’s ability to refinance its operating efficiency. These are achievable and/or cause results of operations as well as its indebtedness on acceptable initiatives have included various substantial accounting losses hinder its ability to refinance conditions. asset optimization and other (particularly if the disposals its existing indebtedness on programs throughout the are done in difficult market acceptable terms. Furthermore, some of Company. The most recent of conditions). In addition, to the ArcelorMittal’s debt is subject these programs is the Action extent that the asset disposals ArcelorMittal’s principal credit to floating rates of interest and 2020 plan announced on include the sale of all or part of facilities contain restrictive thereby exposes ArcelorMittal February 5, 2016 that includes, core assets (including through covenants. These covenants to interest rate risk (i.e., if among other aspects, several an increase in the share of limit, inter alia, encumbrances interest rates rise, ArcelorMittal’s efficiency improvement non-controlling interests), this on the assets of ArcelorMittal debt service obligations on initiatives. Implementation could reduce ArcelorMittal’s and its subsidiaries, the ability its floating rate indebtedness of cost saving and efficiency consolidated cash flows and/ of ArcelorMittal’s subsidiaries would increase). Depending on improvement initiatives is subject or the economic interest of to incur debt and the ability of market conditions, ArcelorMittal to operational challenges and ArcelorMittal shareholders in ArcelorMittal and its subsidiaries from time to time uses interest- limitations. Failure to implement such assets, which may be cash- to dispose of assets in certain rate swaps or other financial fully such initiatives would generative and profitable ones. circumstances. ArcelorMittal’s instruments to hedge a portion prevent the attainment of principal credit facilities also of its interest rate exposure either announced profitability or cash In addition, credit rating agencies include the following financial from fixed to floating or from flow improvement targets, and could downgrade ArcelorMittal’s covenant: ArcelorMittal must floating to fixed. ArcelorMittal more generally could have a ratings either due to factors ensure that the “Leverage Ratio”, had exposure to 89% of its debt material adverse effect on the specific to ArcelorMittal, a being the ratio of “Consolidated at fixed interest rates and 11% at Company’s profitability and cash prolonged cyclical downturn in Total Net Borrowings” floating rates as of December 31, flow. the steel industry and mining (consolidated total borrowings 2016. industries, macroeconomic less consolidated cash and cash ArcelorMittal’s mining operations trends (such as global or regional equivalents) to “Consolidated Finally, ArcelorMittal has foreign are subject to risks associated recessions) or trends in credit and EBITDA” (the consolidated exchange exposure in relation with mining activities. capital markets more generally. net pre-taxation profits of to its debt, approximately 34% In this respect, Standard & Poor’s, the ArcelorMittal group for a of which is denominated in ArcelorMittal operates mines and Moody’s and Fitch downgraded Measurement Period, subject to euros as of December 31, 2016, has substantially increased the the Company’s rating to below certain adjustments as defined in while its financial statements are scope of its mining activities in “investment grade” in August, the facilities), at the end of each denominated in U.S. dollars. This recent years. Mining operations November and December 2012, “Measurement Period” (each creates balance sheet exposure, are subject to the hazards and respectively. On February 3, period of 12 months ending with a depreciation of the U.S. risks usually associated with the 2015, Standard & Poor’s further on the last day of a financial dollar against the euro leading exploration, development and downgraded ArcelorMittal’s half-year or a financial year of to an increase in debt (including production of natural resources, credit rating and, on December ArcelorMittal), is not greater than for covenant compliance any of which could result in 18, 2015, it placed ArcelorMittal a ratio of 4.25 to one or 4.0 to measurement purposes). production shortfalls or damage on negative outlook but then one for one credit facility (See to persons or property. In revised its outlook to positive and “Liquidity and capital resources”). See “Liquidity and capital particular, the hazards associated affirmed its long-term and short- As of December 31, 2016, the resources”. with open-pit mining operations term corporate credit ratings of Company was in compliance with include, among others: the Company on November 17, the Leverage Ratios. Risk factors 163

• flooding of the open pit; ensuring the health and safety and judgments and could result ArcelorMittal faces rising of its employees and more in a reduction in the Group’s extraction costs over time as • collapse of the open-pit wall; generally. reported reserves. The Group’s reserves deplete. reserve estimates reported in • accidents associated with the ArcelorMittal’s reserve estimates this annual report do not exceed Reserves are gradually depleted operation of large open-pit may materially differ from the quantities that the Company in the ordinary course of a mining and rock transportation mineral quantities that it may estimates could be extracted given mining operation. As equipment; be able to actually recover; economically if future prices mining progresses, distances ArcelorMittal’s estimates of mine were at similar levels to the to the primary crusher and to • accidents associated with the life may prove inaccurate; and average contracted price for the waste deposits become longer, preparation and ignition of market price fluctuations and three years ended December 31, pits become steeper and large-scale open-pit blasting changes in operating and capital 2016. As a result, if the average underground operations become operations; costs may render certain ore contracted prices remain in deeper. As a result, ArcelorMittal reserves uneconomical to mine. 2017 at, near or below the low usually experiences rising unit • production disruptions due to levels in the fourth quarter of extraction costs over time with weather; ArcelorMittal’s reported reserves 2015 and in the first half of 2016, respect to each of its mines. are estimated quantities of the Company’s estimates of its • hazards associated with the the ore and metallurgical coal reserves at year-end 2017 may ArcelorMittal has incurred and disposal of mineralized waste that it has determined can decline. may incur in the future operating water, such as groundwater and be economically mined and costs when production capacity waterway contamination; and processed under present and Drilling and production risks is idled or increased costs to anticipated conditions to extract could adversely affect the mining resume production at idled • collapse of tailings ponds dams their mineral content. There process. facilities. or dams. are numerous uncertainties inherent in estimating quantities Substantial time and ArcelorMittal’s decisions about Hazards associated with of reserves and in projecting expenditures are required to: which facilities to operate underground mining operations, potential future rates of mineral and at which levels are made of which ArcelorMittal has production, including factors • establish mineral reserves based upon customers’ several, include, among others: beyond ArcelorMittal’s control. through drilling; orders for products as well The process of estimating as the capabilities and cost • underground fires and reserves involves estimating • determine appropriate mining performance of the Company’s explosions, including those deposits of minerals that and metallurgical processes facilities. Considering temporary caused by flammable gas; cannot be measured in an exact for optimizing the recovery of or structural overcapacity in manner, and the accuracy of any saleable product from iron ore the current market situation, • gas and coal outbursts; reserve estimate is a function and coal reserves; production operations are of the quality of available data, concentrated at several plant • cave-ins or falls of ground; engineering and geological • obtain environmental and other locations and certain facilities interpretation and judgment. As a licenses; are idled in response to • discharges of gases and toxic result, no assurance can be given customer demand, although chemicals; that the estimated amounts of • construct mining and operating costs are still incurred ore or coal will be recovered or processing facilities and the at such idled facilities. When • flooding; that it will be recovered at the infrastructure required for idled facilities are restarted, anticipated rates. Estimates may greenfield properties; ArcelorMittal incurs costs • sinkhole formation and ground vary, and results of mining and to replenish raw material subsidence; production subsequent to the • extract the saleable products inventories, prepare the date of an estimate may lead to from the mined iron ore or coal; previously idled facilities for • difficulties associated with revisions of estimates. Reserve and operation, perform the required mining in extreme weather estimates and estimates of mine repair and maintenance activities conditions, such as the Arctic; life may require revisions based • maintain the appropriate and prepare employees to and on actual market conditions, blend of ore to ensure the final return to work safely and resume production experience and product qualities expected by production responsibilities. Such • blasting, removing, and other factors. Fluctuations in the the customer are achieved. costs could have an adverse processing material from an market prices of minerals and effect on its results of operations underground mine. metals, reduced recovery rates or If a project proves not to be or financial condition. increased operating and capital economically feasible by the ArcelorMittal is exposed to all of costs due to inflation, exchange time ArcelorMittal is able to ArcelorMittal’s greenfield these hazards. The occurrence rates, mining duties or other exploit it, ArcelorMittal may incur and brownfield investment of any of the events listed above factors may render proven and substantial losses and be obliged projects are inherently subject could delay production, increase probable reserves uneconomic to recognize impairments. In to financing, execution and production costs and result to exploit and may ultimately addition, potential changes completion risks. in death or injury to persons, result in a revision of reserves. In or complications involving damage to property and liability particular, a prolonged period metallurgical and other While the Company’s current for ArcelorMittal, some or all of of low prices or other indicators technological processes that arise strategy remains focused on which may not be covered by could lead to a review of the during the life of a project may cost improvement, non-core insurance, as well as substantially Group’s reserves. Such review result in delays and cost overruns asset disposals and asset harm ArcelorMittal’s reputation, would reflect the Company’s view that may render the project not optimization, the Company both as a company focused on based on estimates, assumptions economically feasible. had previously announced a 164 Risk factors

number of envisaged greenfield standards, which could lead to of the persistence of a lower global steel group. The loss or or brownfield development higher costs, reduced production manganese price outlook. any diminution of the services projects, particularly in the or environmental, health and As of December 31, 2016, of the Chairman of the Board of mining sector, some of which safety incidents or accidents, ArcelorMittal’s investments Directors and Chief Executive are or may be ongoing. To the which could adversely affect accounted for under the equity Officer could have an adverse extent these projects go forward, ArcelorMittal’s results and method had a book value of $4.3 effect on ArcelorMittal’s business they would entail substantial reputation. billion, including DHS Group and prospects. ArcelorMittal capital expenditures, and their ($902 million), China Oriental does not maintain key person timely completion and successful In addition, certain of these ($623 million) and Baffinland life insurance on its Chairman of operation may be affected by joint ventures and associates are ($425 million). the Board of Directors and Chief factors beyond the control of currently experiencing, or may Executive Officer. ArcelorMittal. These factors in the future experience, difficult A Mittal family trust has the include receiving financing on operating conditions and/or ability to exercise significant ArcelorMittal is a holding reasonable terms, obtaining or incur losses. Difficult operating influence over the outcome of company that depends on the renewing required regulatory conditions in joint ventures and shareholder votes. earnings and cash flows of its approvals and licenses, securing associates in which ArcelorMittal operating subsidiaries, which and maintaining adequate has invested may expose it to loss As of December 31, 2016, a trust may not be sufficient to meet property rights to land and of its investment, requirements (HSBC Trust (C.I.) Limited, as future operational needs or for mineral resources, local for additional investments or trustee), of which Mr. Lakshmi N. shareholder distributions and opposition to land acquisition calls on guarantees. For example, Mittal, Mrs. Usha Mittal and their loss-making subsidiaries may or project development, ArcelorMittal’s joint venture Al children are the beneficiaries, drain cash flow necessary for managing relationships with Jubail’s financial situation has beneficially owned (within the such needs or distributions. or obtaining consents from been negatively impacted by a meaning of Rule 13d-3 under the other shareholders, revision of slower than expected ramp-up Securities Exchange Act of 1934, As a holding company, economic viability projections, of operations. ArcelorMittal has as amended) shares amounting ArcelorMittal is dependent on demand for the Company’s provided shareholder loans to (when aggregated with ordinary the earnings and cash flows of, products, local environmental assist with funding and additional shares of ArcelorMittal and and dividends and distributions or health-related conditions equity funding is expected from options to acquire ordinary from, its operating subsidiaries (such as the Ebola epidemic the other partners. ArcelorMittal’s shares held directly by Mr. and to pay expenses, meet its debt in Liberia in 2014-2015), and investment in and loans to the Mrs. Mittal) to 1,146,687,339 service obligations, pay any cash general economic conditions. joint venture were $149 million shares, representing 37.4% of dividends or distributions on Any of these factors may cause at December 31, 2016 following ArcelorMittal’s outstanding its ordinary shares or conduct the Company to delay, modify the recognition of its share in shares. See “Major shareholders share buy-backs. Significant or forego some or all aspects of net losses. The Company has and related party transactions cash or cash equivalent balances its development projects. The also guaranteed $403 million Major shareholders”. As a may be held from time to time Company cannot guarantee of Al Jubail’s external debt. In result, the trust has the ability at the Company’s international that it will be able to execute addition, as of December 31, to significantly influence the operating subsidiaries, including its greenfield or brownfield 2016, ArcelorMittal had given decisions adopted at the in particular those in France development projects, and to the $0.6 billion in guarantees on ArcelorMittal general meetings and the United States, where extent that they proceed, that it behalf of other associates and of shareholders, including the Company maintains cash will be able to complete them joint ventures including $463 matters involving mergers or management systems under on schedule, within budget, or million issued on behalf of other business combinations, which most of its cash and cash achieve an adequate return on its Calvert. See notes 2.4.1, 2.4.2 and the acquisition or disposition of equivalents are centralized, investment. Conversely, should 8.3 to ArcelorMittal’s consolidated assets, issuances of equity and and in Argentina, Brazil, the Company decide to postpone financial statements. the incurrence of indebtedness. Canada, Morocco, South Africa or cancel development projects, The trust also has the ability to and Ukraine. Some of these it could incur various negative ArcelorMittal’s investments in significantly influence a change operating subsidiaries have consequences such as litigation joint ventures and associates may of control of ArcelorMittal. debt outstanding or are subject or impairment charges. also result in impairments. For to acquisition agreements that example, in 2014, the Company The loss or diminution of the impose restrictions on such ArcelorMittal faces risks recorded an impairment charge services of the Chairman of the operating subsidiaries’ ability associated with its investments in of $621 million on its investment Board of Directors and Chief to pay dividends, but such joint ventures and associates. in China Oriental, following a Executive Officer of ArcelorMittal restrictions are not significant revision of business assumptions could have an adverse effect on in the context of ArcelorMittal’s ArcelorMittal has investments in the context of the continuing its business and prospects. overall liquidity. These in various joint ventures and economic slowdown in China. subsidiaries may also experience associates. See note 2.4 to In 2015, the Company also The Chairman of the Board of operating difficulties that impact ArcelorMittal’s consolidated recorded an impairment charge Directors and Chief Executive their cash flows. ArcelorMittal financial statements. Joint of $283 million in respect of Officer of ArcelorMittal, Mr. South Africa, for example, has ventures and associates may be its joint venture investment in Lakshmi N. Mittal, has for over 30 been experiencing significant controlled and managed by joint Kalagadi Manganese (Propriety) years contributed significantly difficulties in recent years. In venture or controlling partners Ltd, reflecting a write down to shaping and implementing order to decrease its significant that may not fully comply with of the full carrying amount of the business strategy of outstanding debt, on January 15, ArcelorMittal’s standards, controls the investment and loans as a Mittal Steel and subsequently 2016, ArcelorMittal South Africa and procedures, including result of a downward revision ArcelorMittal. His strategic vision closed a rights offering. The total ArcelorMittal’s health, safety, of cash flow projections was instrumental in the creation cash proceeds amounted to R4.5 environment and community resulting from the expectation of the world’s largest and most billion. ArcelorMittal underwrote Risk factors 165

the rights offering in its entirety. any such indication exists, the used for determining the Brazil The Company’s investment The Company fully subscribed recoverable amount of the and ACIS segment’s value in use. projects may add to its financing to the capital increase, through asset (or cash generating unit) is requirements and adversely repayment of an outstanding reviewed in order to determine ArcelorMittal’s ability to fully affect its cash flows and results of intragroup loan of R3.2 billion the amount of the impairment, utilize its recognized deferred tax operations. and an additional cash injection if any. assets depends on its profitability of approximately R460 million. and future cash flows. The steelmaking and mining As a result of the rights issue, If certain of management’s businesses are capital intensive ArcelorMittal’s shareholding estimates change during a given At December 31, 2016, requiring substantial ongoing in ArcelorMittal South Africa period, such as the discount rate, ArcelorMittal had $5.8 billion maintenance capital expenditure. increased from 52% to 71%. capital expenditures, expected recorded as deferred tax assets In addition, ArcelorMittal has changes to average selling prices, on its consolidated statements announced investment projects Repatriation of funds from growth rates, shipments and of financial position. These assets in the past and some are or operating subsidiaries may also direct costs, the estimate of the can be utilized only if, and only may be ongoing. See note 8.3 be affected by tax and foreign recoverable amount of goodwill to the extent that, ArcelorMittal’s to ArcelorMittal’s consolidated exchange policies in place from or the asset could fall significantly operating subsidiaries generate financial statements. time to time in the various and result in impairment. While adequate levels of taxable ArcelorMittal expects to fund countries where the Company impairment does not affect income in future periods to offset these capital expenditures operates, though none of these reported cash flows, the decrease the tax loss carry forwards and primarily through internal policies are currently significant of the estimated recoverable reverse the temporary differences sources. Such sources may not in the context of ArcelorMittal’s amount and the related non- prior to expiration. At December suffice, however, depending overall liquidity. Under the laws cash charge in the consolidated 31, 2016, the amount of future on the amount of internally of Luxembourg, ArcelorMittal statements of operations could income required to recover generated cash flows and other will be able to pay dividends or have a material adverse effect ArcelorMittal’s deferred tax uses of cash, which may require distributions only to the extent on ArcelorMittal’s results of assets of $5.8 billion was at least ArcelorMittal to choose between that it is entitled to receive cash operations. For example, in $27.3 billion at certain operating incurring external financing, dividend distributions from its 2016, the Company recorded an subsidiaries. further increasing the Company’s subsidiaries, recognize gains from impairment charge as a result of level of indebtedness, or the sale of its assets or record the annual impairment test of ArcelorMittal’s ability to foregoing investments in projects share premium from the issuance $156 million related to tangible generate taxable income is targeted for profitable growth. of shares. assets in the ACIS segment. In subject to general economic, 2015, the Company recorded financial, competitive, legislative, Underfunding of pension and If the earnings and cash flows an impairment charge of $3.7 regulatory and other factors other post-retirement benefit of its operating subsidiaries billion including $0.9 billion with that are beyond its control. If plans at some of ArcelorMittal’s are substantially reduced, respect to the Mining segment ArcelorMittal generates lower operating subsidiaries could ArcelorMittal may not be in a goodwill and $2.8 billion related taxable income than the amount require the Company to make position to meet its operational to tangible and intangible assets it has assumed in determining substantial cash contributions needs or to make shareholder ($2.5 billion and $0.3 billion in its deferred tax assets, then the to pension plans or to pay for distributions in line with the Mining and ACIS segments, value of deferred tax assets employee healthcare, which may announced proposals. respectively). Following these will be reduced. In addition, reduce the cash available for impairment charges, substantial assumptions regarding the future ArcelorMittal’s business. Changes in assumptions amounts of goodwill, tangible recoverability of deferred tax underlying the carrying value and intangible assets remain assets depend on management’s ArcelorMittal’s principal of certain assets, including recorded on its balance sheet estimates of future taxable operating subsidiaries in Brazil, as a result of adverse market (there was $5.2 billion of goodwill income in accordance with Canada, Europe, South Africa and conditions, could result in the for the Company and $4.1 billion the tax laws applicable to the United States provide defined impairment of such assets, of tangible and intangible ArcelorMittal’s subsidiaries in benefit pension and other including intangible assets such assets and goodwill of $0.8 the countries in which they post-retirement benefit plans to as goodwill. billion for ACIS on the balance operate. If in the course of its their employees. Some of these sheet at December 31, 2016). assessments management plans are currently underfunded, At each reporting date, in No assurance can be given as determines that the carrying see note 7.2 to ArcelorMittal’s accordance with the Company’s to the absence of significant amount of any of its deferred tax consolidated financial statements accounting policy described further impairment losses in assets may not be recoverable for the total value of plan assets in note 5.3 to ArcelorMittal’s future periods, particularly if pursuant to such prevailing tax and any deficit. consolidated financial market conditions deteriorate. laws, the recoverable amount statements, ArcelorMittal In particular, changes in the of such deferred tax assets may ArcelorMittal’s funding reviews the carrying amounts key assumptions utilized in the be impaired. ArcelorMittal’s obligations depend upon future of its tangible and intangible October 31, 2016 impairment assumptions regarding its asset performance, which is assets (goodwill is reviewed test would cause an impairment ability to generate future tied to equity and debt markets annually or whenever changes loss to be recognized in respect taxable income changed during to a substantial extent, the in circumstances indicate that of the Brazil segment and an 2016, resulting in a $0.7 billion level of interest rates used the carrying amount may not additional impairment loss to be derecognition of deferred tax to discount future liabilities, be recoverable) to determine recognized in respect of ACIS. assets in Luxembourg related actuarial assumptions and whether there is any indication See note 5.3 to ArcelorMittal’s to revised expectations of the experience, benefit plan changes that the carrying amount of those 2016 consolidated financial deferred tax asset recoverability and government regulation. assets may not be recoverable statements, in particular for a in U.S. dollar terms. Because of the large number of through continuing use. If discussion of the assumptions variables that determine pension 166 Risk factors

funding requirements, which negotiations are currently slowdown in the development also located in areas where acute are difficult to predict, as well ongoing in South Africa and in of these economies could have drug-related violence (including as any legislative action, future Liberia. In addition, on June 23, a material adverse effect on executions and kidnappings of cash funding requirements for 2016, ArcelorMittal announced ArcelorMittal’s business, financial non-gang civilians) occurs and ArcelorMittal’s pension plans and its new three-year collective condition, results of operations the largest drug cartels operate, other post-employment benefit bargaining agreement with the or prospects, as could insufficient such as the states of Michoacan, plans could be significantly United Steelworkers (USW) was investment by government Sinaloa and Sonora in Mexico. higher than current estimates. ratified by USW-represented agencies or the private sector Increases in the general life employees, following months of in physical infrastructure. For Certain emerging markets where expectancy assumption have negotiations that threatened to, example, the failure of a country ArcelorMittal has operations contributed to increases in the but did not in the end, disrupt to develop reliable electricity are experiencing particularly defined benefit obligation. operations. and natural gas supplies and difficult operating conditions. ArcelorMittal also makes networks, and any resulting Brazil, for example, is going contributions to a multi- Faced with temporary or shortages or rationing, could lead through severe recession, with employer pension plan in the structural overcapacity in various to disruptions in ArcelorMittal’s significant declines seen in U.S. (the Steelworkers Pension markets, particularly developed production. steel consumption and steel Trust) for which it is one of the ones, ArcelorMittal has in the past prices. Kazakhstan is also going largest employers. If the other sought and may in the future Moreover, some of through a recession, and its contributors were to default on seek to rationalize operations the countries in which currency sharply depreciated their obligations, ArcelorMittal through temporary or permanent ArcelorMittal operates have at the end of 2015. The steel would become liable for the idling and/or closure of plants. been undergoing substantial and mining industries in plan. In these circumstances, These initiatives have in the political transformations from South Africa are subject to funding requirements could past and may in the future lead centrally-controlled command a challenging operating have a material adverse effect on to protracted labor disputes economies to market-oriented environment characterized by ArcelorMittal’s business, financial and political controversy. For systems or from authoritarian lower local demand, increased condition, results of operations or example, in 2012, the announced regimes to democratically- cheap imports and higher costs, prospects. closure of the liquid phase of elected governments and resulting in losses in recent years ArcelorMittal’s Florange plant in vice-versa. Political, economic for ArcelorMittal South Africa. ArcelorMittal could experience France, and also in the Liege plant and legal reforms necessary to labor disputes that may in Belgium, attracted substantial complete such transformation In addition, epidemics may disrupt its operations and its media and political attention. may not progress sufficiently. affect ArcelorMittal’s operations relationships with its customers Such situations carry the risk of On occasion, ethnic, religious, in certain regions. For example, and its ability to rationalize delaying or increasing the cost historical and other divisions ArcelorMittal operates in Liberia, operations and reduce labor of production rationalization have given rise to tensions and, which underwent an Ebola virus costs in certain markets may be measures, harming ArcelorMittal’s in certain cases, wide-scale disease epidemic in 2014 and limited in practice or encounter reputation and business standing civil disturbances and military 2015. This affected ArcelorMittal’s implementation difficulties. in given markets and even the conflict. The political systems in operations and projects in Liberia. risk of nationalization. these countries are vulnerable to There can be no assurance A majority of the employees their populations’ dissatisfaction that other epidemics will not of ArcelorMittal and of its ArcelorMittal is subject to with their government, reforms adversely affect ArcelorMittal’s contractors are represented by economic policy, political, social or the lack thereof, social and ongoing operations, production labor unions and are covered by and legal risks and uncertainties ethnic unrest and changes in targets and expansion plans, if collective bargaining or similar in the emerging markets in governmental policies, any of any, in other markets in which it agreements, which are subject which it operates or proposes to which could have a material operates. to periodic renegotiation. Strikes operate, and these uncertainties adverse effect on ArcelorMittal’s or work stoppages could occur may have a material adverse business, financial condition, In addition, the legal systems prior to, or during, negotiations effect on ArcelorMittal’s business, results of operations or prospects in some of the countries in preceding new collective financial condition, results of and its ability to continue to do which ArcelorMittal operates bargaining agreements, during operations or prospects. business in these countries. For remain less than fully developed, wage and benefits negotiations example, in Ukraine, a period of particularly with respect to the or during other periods for ArcelorMittal operates, or widespread civil unrest resulted independence of the judiciary, other reasons, in particular in proposes to operate, in a large in the removal of the President property rights, the protection connection with any announced number of emerging markets. from office in February 2014 and of foreign investment and intentions to adapt the footprint. In recent years, many of these the establishment of an interim bankruptcy proceedings, ArcelorMittal may experience countries have implemented government, which has been generally resulting in a lower strikes and work stoppages at measures aimed at improving followed by ongoing conflict level of legal certainty or security various facilities. Prolonged the business environment and in Crimea and the Donbass for foreign investment than strikes or work stoppages, which providing a stable platform region, with Russia purportedly in more developed countries. may increase in their severity and for economic development. annexing Crimea in March ArcelorMittal may encounter frequency, may have an adverse ArcelorMittal’s business strategy 2014, a disputed referendum difficulties in enforcing effect on the operations and has been developed partly approving independence of court judgments or arbitral financial results of ArcelorMittal. on the assumption that this Crimea from Ukraine in May awards in some countries in The risk of strikes and work modernization, restructuring 2014 and intermittent combats which it operates because, stoppages is particularly acute and upgrading of the between the Ukrainian army and among other reasons, those during collective bargaining business climate and physical pro-Russian rebels in the Donbass countries may not be parties agreement negotiations. For infrastructure will continue, but region. In addition, certain of to treaties that recognize the example, collective agreement this cannot be guaranteed. Any ArcelorMittal’s operations are mutual enforcement of court Risk factors 167

judgments. Assets in certain countries’ central banks, or breakdowns. ArcelorMittal’s countries where ArcelorMittal which have experienced sudden manufacturing plants have In addition to natural disasters, operates could also be at risk of and significant devaluations. experienced, and may in ArcelorMittal’s operations can expropriation or nationalization, In emerging countries where the future experience, plant be affected by severe weather and compensation for such ArcelorMittal has operations shutdowns or periods of reduced conditions. This is due in assets may be below fair value. and/or generates substantial production as a result of such particular to the long supply For example, the Venezuelan revenue, such as Argentina, equipment failures or other chain for certain of its operations government has implemented Brazil, Venezuela, Kazakhstan and events, one example being the and the location of certain a number of selective Ukraine, the risk of significant damage to the steam boilers in operations in areas subject to nationalizations of companies currency devaluation is high. On the site in Fos-sur-Mer in March harsh winter conditions (i.e., operating in the country to date. February 5, 2015, the National 2016 or the loss of steam to the Great Lakes Region, Canada Although ArcelorMittal believes Bank of Ukraine decided to the ArcelorMittal Burns Harbor and Kazakhstan). For example, that the long-term growth suspend its intervention in the site in May 2016. To the extent supply chain issues caused by a potential in emerging markets UAH, which had kept a cap on that lost production as a result particularly harsh winter (causing is strong, and intends them to the USD/UAH exchange rate of such a disruption cannot be in particular the closure of the be the focus of the majority of and leaves its currency floating compensated for by unaffected Great Lakes shipping lanes) its near-term growth capital freely against the U.S. dollar. facilities, such disruptions negatively affected operations expenditures, legal obstacles Consequently, the UAH has been could have an adverse effect in Canada and the Northeastern could have a material adverse significantly devalued against on ArcelorMittal’s operations, United States during the first effect on the implementation of the USD, losing as much as 60% customer service levels and quarter of 2014. ArcelorMittal’s growth plans and since 2014 highs, including results of operations. its operations in such countries. intraday losses of up to 30%. The ArcelorMittal’s insurance policies Kazakhstani tenge leveled off Natural disasters or severe provide limited coverage, ArcelorMittal’s results of after a period of high volatility weather conditions could potentially leaving it uninsured operations could be affected by (with a high of 388.5 and a low damage ArcelorMittal’s against some business risks. fluctuations in foreign exchange of 336.5 during the first quarter production facilities or adversely rates, particularly the euro to U.S. of 2016) following the free float affect its operations. The occurrence of an event dollar exchange rate, as well as by regime introduction in August that is uninsurable or not fully exchange controls imposed by 2015, and during the rest of Natural disasters could insured could have a material governmental authorities in the 2016, it remained around 330 significantly damage adverse effect on ArcelorMittal’s countries where it operates. to 340 against the U.S. dollar. ArcelorMittal’s production business, financial condition, In Venezuela, following the facilities and general results of operations or prospects. ArcelorMittal operates and application of the DICOM rate, infrastructure. For example, ArcelorMittal maintains sells products globally and as the Company’s net investment ArcelorMittal Mexico’s production insurance on property and a result, its business, financial in Unicon decreased from $628 facilities located in Lázaro equipment in amounts believed condition, results of operations million to $43 million on January Cárdenas, Michoacán, Mexico to be consistent with industry or prospects could be adversely 1, 2016 and amounted to $48 and ArcelorMittal Galati’s practices, but it is not fully affected by fluctuations in million at December 31, 2016. production facilities in Romania insured against all such risks. exchange rates. A substantial are located in or close to regions ArcelorMittal’s insurance policies portion of ArcelorMittal’s assets, Currency devaluations, the prone to earthquakes. The Lázaro cover physical loss or damage to liabilities, operating costs, sales imposition of new exchange Cárdenas area has, in addition, its property and equipment on and earnings are denominated controls or other similar been subject to a number of a reinstatement basis as arising in currencies other than the U.S. restrictions on currency tsunamis in the past. The site of from a number of specified risks dollar (ArcelorMittal’s reporting convertibility, or the tightening the joint venture AM/NS Calvert and certain consequential losses, currency). Accordingly, its results of existing controls in the (“Calvert”) in the United States including business interruption of operations are subject to countries in which ArcelorMittal is located in an area subject to arising from the occurrence translation risk (i.e., the USD operates could adversely affect tornados. ArcelorMittal also has of an insured event under the value of the revenues and profits its business, financial condition, assets in locations subject to policies. Under ArcelorMittal’s generated in other currencies results of operations or prospects. Arctic freeze such as the mining property and equipment policies, and its debt denominated in facilities through its joint venture damages and losses caused by other currencies) and transaction Disruptions to ArcelorMittal’s in Baffinland and to bush fires, certain natural disasters, such risk (i.e., a mismatch between manufacturing processes could specifically in Kazakhstan and as earthquakes, floods and the currency of costs and adversely affect its operations, South Africa. More generally, windstorms, are also covered. revenues). For example, in 2015 customer service levels and changing weather patterns ArcelorMittal recognized a $0.7 financial results. and climatic conditions in ArcelorMittal also purchases billion foreign exchange loss recent years, possibly due to worldwide third-party public primarily due to the decrease in Steel manufacturing processes the phenomenon of global and product liability insurance euro denominated deferred tax are dependent on critical warming, have added to the coverage for all of its subsidiaries. assets and debt as a result of the steel-making equipment, unpredictability and frequency Various other types of insurance sharp appreciation of the USD such as furnaces, continuous of natural disasters. Damage to are also maintained, such as versus the euro. casters, rolling mills and ArcelorMittal production facilities comprehensive construction electrical equipment (such due to natural disasters could, to and contractor insurance for Moreover, ArcelorMittal as transformers), and such the extent that lost production its greenfield and major capital operates in several countries equipment may incur downtime cannot be compensated for by expenditures projects, directors whose currencies are, or have as a result of unanticipated unaffected facilities, adversely and officers liability, transport, in the past been, subject to failures or other events, such affect its business, results of and charterers’ liability, as well as limitations imposed by those as fires, explosions or furnace operations or financial condition. other customary policies such as 168 Risk factors

car insurance, travel assistance authorities, litigation and fines, proceedings during the last controls over financial reporting, and medical insurance. in relation, among other things, decade. In addition, ArcelorMittal may not prevent breaches of law to its pricing and marketing operates in many jurisdictions or accounting or governance In addition, ArcelorMittal practices or other antitrust around the world, increasing standards at the Company or its maintains trade credit insurance matters. The resolution of such the risk of non-compliance with subsidiaries. The risk of violation on receivables from selected matters could negatively affect laws and regulations in relation is also present at the Company’s customers, subject to limits that the Company’s profitability and to anti-corruption, economic joint ventures and associates it believes are consistent with cash flows in a particular period sanctions and other ethical where ArcelorMittal has only a those in the industry, in order or harm its reputation. matters, despite its compliance non-controlling stake and does to protect it against the risk of policies and procedures. not control governance practices non-payment due to customers’ ArcelorMittal is the largest Unfavorable outcomes in current or accounting and reporting insolvency or other causes. Not all steel producer in the world. As and potential future litigation procedures. of ArcelorMittal’s customers are a result, ArcelorMittal may be and investigations could reduce or can be insured, and even when subject to exacting scrutiny ArcelorMittal’s liquidity and In addition, ArcelorMittal may be insurance is available, it may not from regulatory authorities negatively affect its profitability, subject to breaches of its Code fully cover the exposure. and private parties, particularly cash flows, results of operations of Business Conduct, other rules regarding its trade practices and and financial condition, as well as and protocols for the conduct of Notwithstanding the insurance dealings with customers and harm its reputation. business, as well as to instances coverage that ArcelorMittal counterparties. As a result of its of fraudulent behavior and and its subsidiaries carry, the position in steel markets and its ArcelorMittal is currently and in dishonesty by its employees, occurrence of an event that historically acquisitive growth the future may be subject to legal contractors or other agents. The causes losses in excess of limits strategy, ArcelorMittal could proceedings, the resolution of Company’s failure to comply specified under the relevant be subject to governmental which could negatively affect the with applicable laws and other policy, or losses arising from investigations and lawsuits based Company’s profitability and cash standards could subject it to events not covered by insurance on antitrust laws in particular. flows in a particular period. fines, litigation, loss of operating policies, could materially harm These could require significant licenses and reputational harm. ArcelorMittal’s financial condition expenditures and result in ArcelorMittal’s profitability or and future operating results. liabilities or governmental cash flows in a particular period The income tax liability of orders that could have a material could be affected by adverse ArcelorMittal may substantially Product liability claims could adverse effect on ArcelorMittal’s rulings in legal proceedings increase if the tax laws and have a significant adverse business, operating results, currently pending or by legal regulations in countries in which financial impact on ArcelorMittal. financial condition and proceedings that may be it operates change or become prospects. ArcelorMittal and filed against the Company subject to adverse interpretations ArcelorMittal sells products to certain of its subsidiaries are in the future. See note 8.2 to or inconsistent enforcement. major manufacturers engaged currently under investigation ArcelorMittal’s consolidated in manufacturing and selling by governmental entities in financial statements. Taxes payable by companies a wide range of end products. several countries, and are named in many of the countries in ArcelorMittal also from time as defendants in a number ArcelorMittal’s business is subject which ArcelorMittal operates to time offers advice to these of lawsuits relating to various to an extensive, complex and are substantial and include manufacturers. Furthermore, antitrust matters. See note 8.2 evolving regulatory framework value-added tax, excise duties, ArcelorMittal’s products are to ArcelorMittal’s consolidated and its governance and profit taxes, payroll-related also sold to, and used in, certain financial statements. Antitrust compliance processes may fail taxes, property taxes, mining safety-critical applications, such proceedings, investigations to prevent regulatory penalties taxes and other taxes. Tax laws as, for example, pipes used in gas and follow-on claims involving and reputational harm, whether and regulations in some of or oil pipelines and in automotive ArcelorMittal subsidiaries are at operating subsidiaries, joint these countries may be subject applications. There could be also currently pending in various ventures or associates. to frequent change, varying significant consequential countries including Brazil and interpretation and inconsistent damages resulting from the use Germany. ArcelorMittal operates in a global enforcement. Ineffective tax of or defects in such products. environment, and, at a time of collection systems and national ArcelorMittal has a limited Because of the fact-intensive increased enforcement activity or local government budget amount of product liability nature of the issues involved and and enforcement initiatives requirements may increase the insurance coverage, and a major the inherent uncertainty of such worldwide, its business straddles likelihood of the imposition of claim for damages related to litigation and investigations, multiple jurisdictions and arbitrary or onerous taxes and ArcelorMittal products sold and, the nature of the resolutions of complex regulatory frameworks. penalties, which could have as the case may be, advice given such proceedings are difficult to Such regulatory frameworks, a material adverse effect on in connection with such products forecast but negative outcomes including but not limited to the ArcelorMittal’s financial condition could leave ArcelorMittal are possible. An adverse ruling in area of economic sanctions, and results of operations. In uninsured against a portion or the proceedings described above are constantly evolving, and addition to the usual tax burden the entirety of the award and, or in other similar proceedings ArcelorMittal may as a result imposed on taxpayers, these as a result, materially harm its in the future could subject become subject to increasing conditions create uncertainty financial condition and future ArcelorMittal to substantial limitations on its business as to the tax implications of operating results. administrative penalties and/ activities and to the risk of various business decisions. or civil damages. In cases fines or other sanctions for This uncertainty could expose ArcelorMittal is subject to relating to other companies, non-compliance. Moreover, ArcelorMittal to significant regulatory and compliance civil damages have been as high ArcelorMittal’s governance and fines and penalties and to risks, which may expose it to as hundreds of millions of U.S. compliance processes, which enforcement measures despite investigations by governmental dollars in major civil antitrust include the review of internal its best efforts at compliance, Risk factors 169

and could result in a greater than in January 2012, which brought process within the United States expected tax burden. See note the website down for several upon ArcelorMittal or these 9 to ArcelorMittal’s consolidated days, and phishing, ransomware persons or to enforce outside financial statements. and virus attacks have been the United States judgments increasing in more recent obtained against ArcelorMittal In addition, many of the years through 2016. Because or these persons in U.S. courts, jurisdictions in which the techniques used to obtain including actions predicated ArcelorMittal operates have unauthorized access, disable upon the civil liability provisions adopted transfer pricing or degrade service or sabotage of the U.S. federal securities laws. legislation. If tax authorities systems change frequently and Likewise, it may also be difficult impose significant additional tax often are not recognized until for an investor to enforce in U.S. liabilities as a result of transfer launched against a target, the courts judgments obtained pricing adjustments, it could Company may be unable to against ArcelorMittal or these have a material adverse effect on anticipate these techniques persons in courts in jurisdictions ArcelorMittal’s financial condition or to implement in a timely outside the United States, and results of operations. manner effective and efficient including actions predicated countermeasures. upon the civil liability provisions It is possible that tax authorities of the U.S. federal securities in the countries in which If unauthorized parties attempt laws. It may also be difficult ArcelorMittal operates or manage to bring down the for a U.S. investor to bring an will introduce additional Company’s website or force original action in a Luxembourg revenue raising measures. access into its information court predicated upon the civil The introduction of any such technology systems, they may liability provisions of the U.S. provisions may affect the overall be able to misappropriate federal securities laws against tax efficiency of ArcelorMittal confidential information, ArcelorMittal’s directors and and may result in significant cause interruptions in the senior management and non-U.S. additional taxes becoming Company’s operations, damage experts named in this annual payable. Any such additional tax its computers or process control report. exposure could have a material systems or otherwise damage its adverse effect on the Company’s reputation and business. In such financial condition and results of circumstances, the Company operations. could be held liable or be subject to regulatory or other actions for ArcelorMittal may face a breaching confidentiality and significant increase in its income personal data protection rules. taxes if tax rates increase or Any compromise of the security the tax laws or regulations in of the Company’s information the jurisdictions in which it technology systems could result operates, or treaties between in a loss of confidence in the those jurisdictions, are modified Company’s security measures in an adverse manner. This may and subject it to litigation, adversely affect ArcelorMittal’s civil or criminal penalties, and cash flows, liquidity and ability to adverse publicity that could pay dividends. adversely affect its reputation, financial condition and results of ArcelorMittal’s reputation operations. and business could be materially harmed as a result U.S. investors may have difficulty of data breaches, data theft, enforcing civil liabilities against unauthorized access or successful ArcelorMittal and its directors hacking. and senior management.

ArcelorMittal’s operations depend ArcelorMittal is incorporated on the secure and reliable under the laws of the Grand performance of its information Duchy of Luxembourg with technology systems. An its principal executive offices increasing number of companies, and corporate headquarters including ArcelorMittal, have in Luxembourg. The majority recently experienced intrusion of ArcelorMittal’s directors and attempts or even breaches of senior management are residents their information technology of jurisdictions outside of the security, some of which have United States. The majority of involved sophisticated and ArcelorMittal’s assets and the highly targeted attacks on assets of these persons are their computer networks. located outside the United States. ArcelorMittal’s corporate website As a result, U.S. investors may was the target of a hacking attack find it difficult to effect service of 170 Mining

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. Mining ArcelorMittal Unit Country Locations Interest (%) Type of Mine Product Iron Ore ArcelorMittal Mines and Mt Wright and Port Cartier, Iron Ore Mine (open pit), railway Concentrate Infrastructure Canada Canada Qc 85 and port and pellets Baffinland Canada Baffin Island, Nunavut 44.5 Iron Ore Mine (open pit) Lump and fines 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 Concentrate Colorada Mexico Minatitlán 50 Iron Ore Mine (open pit) and pellets Concentrate, ArcelorMittal Las Truchas Mexico Lázaro Cárdenas 100 Iron Ore Mine (open pit) lump and 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 Concentrate ArcelorMittal Prijedor Bosnia Herzegovina Prijedor 51 Iron Ore Mine (open pit) and lump Concentrate, Iron Ore Mine (open pit and lump and sinter ArcelorMittal Kryvyi Rih Ukraine Kryvyi Rih 95.13 underground) feed Lisakovsk, Kentobe, Atasu, Iron Ore Mine (open pit and Concentrate, ArcelorMittal Temirtau Kazakhstan Atansore 100 underground) lump and fines ArcelorMittal Liberia Liberia Yekepa 85 Iron Ore Mine (open pit) Fines Coal Coal Mine (surface and Coking and PCI ArcelorMittal Princeton USA McDowell, WV, Tazewell, VA 100 underground) coal Coking coal and ArcelorMittal Temirtau Kazakhstan Karaganda 100 Coal Mine (underground) thermal coal

Iron Ore Mont-Wright mine and the town The expiration dates of the tonnes of concentrate per year. of Fermont are connected by mining leases range from The Port-Cartier pellet plant ArcelorMittal Mines and Highway 389 to Baie Comeau on 2017 to 2033. These leases are produces acid and flux pellets Infrastructure Canada the North Shore of the Gulf of renewable for three periods of that operate six ball mills, ten St. Lawrence, a distance of 570 ten years provided the lessee has balling discs and two induration ArcelorMittal Mines and kilometers. ArcelorMittal Mines performed mining operations for machines. The pelletizing plant Infrastructure Canada is a major and Infrastructure Canada owns at least two years in the previous has a capacity of 10.2 million Canadian producer of iron ore mineral rights to iron ore deposits ten years of the lease. tonnes of pellets. The mine concentrate and several types in Fire Lake and Mont Reed. Fire produced 9.9 million tonnes of of pellets. It holds mineral rights Lake, located approximately 53 The Mont-Wright and Fire Lake pellets and 15.1 million tonnes of over 35,086 hectares of land kilometers south of Mont-Wright mines are part of the highly- concentrate in 2016. in the province of Québec, from which approximately 8.9 folded and metamorphosed Canada. ArcelorMittal Mines million tonnes of crude ore southwestern branch of the Electric power for Mont-Wright and Infrastructure Canada were transported by rail to the Labrador Trough. The most and the town of Fermont is operates a Mont-Wright Mine Mont-Wright concentrator in important rock type in the area supplied by Hydro-Quebec via a and concentrator at Fermont 2016. Fire Lake was previously is the specular hematite iron 157 kilometer line. In the event in northeastern Québec. a seasonal operation and has formation forming wide, massive of an emergency, the Hart Jaune Mont-Wright is located 416 been operating year-round deposits that often form the Power plant, also connected kilometers north of the port since 2014. The Mont Reed crest of high ridges extending for to the Hydro-Quebec grid, of Port-Cartier, the site of the deposit is currently not mined. many kilometers in the Quebec- can supply sufficient power to pelletizing plant and shipping In addition, ArcelorMittal Mines Labrador area. maintain the operations of the terminal on the north shore of and Infrastructure Canada holds essential processing facilities. the Gulf of St. Lawrence, and surface rights over the land on The Mont-Wright operation approximately 1,000 kilometers which the Mont-Wright and Port consists of open pit mines Baffinland (Canada) northeast of Montreal. A private Cartier installations are located, and a concentrator. The ore is railway connects the mine with the exception of a small area crushed in two gyratory crushers ArcelorMittal owns 44.5% and and concentrator with Port- which remains the property of and the concentrator operates is joint operator of Baffinland. Cartier. The railway and the the Quebec Government but in with seven lines of three stage Baffinland owns the Mary port are owned and operated no way compromises the mineral spiral classifiers and horizontal River project, which has direct by ArcelorMittal Mines and rights. The property began filters. The concentrator has a shipping, high grade iron ore Infrastructure Canada. The operating in 1976. production capacity of 26 million on Baffin Island in Nunavut. The Mining 171

Mary River property is located claims (staked mineral claims a concentrating and pelletizing Both the Minorca and Hibbing within the Arctic Circle, on north and recorded claims under the facility, along with two open pit mines are located in the Mesabi Baffin Island, in the Qikiqtani Nunavut Mining Regulations and iron ore mines – Laurentian and iron range where iron ore has Region of Nunavut, Canada, issued by the Government of East Pits located 12 kilometers been extracted for over 100 years. approximately 1,000 kilometers Canada) and mining exploration from the processing facilities. The ore bodies are within the (620 miles) northwest of Iqaluit, rights granted by an Exploration The processing operations Biwabik Iron Formation, a series the capital of Nunavut, and Agreement signed with the consist of a crushing facility, a of shallow dipping Precambrian consists of eleven high grade Nunavut Tunngavik Inc. (“NTI”), three-line concentration facility sedimentary rocks known as deposits. an Inuit organization created and a single-line straight grate taconite with a total thickness pursuant to administrate its pelletizing plant. The Minorca in excess of 200 meters and Baffinland’s total mineral tenures rights granted under the Nunavut pelletizing facility produced running for approximately 200 (including leases, mineral claims Land Claims Agreement (“NLCA”), 2.8 million metric tonnes of kilometers. Although the first and exploration rights) cover an enacted on May 25, 1993. taconite pellets in 2016. Pellets deposits mined in the Mesabi area of approximately 233,500 are transported by rail to ports iron range consisted of oxidized hectares (577,000 acres). Of this Baffinland is also required to on Lake Superior. Lake vessels hematite ores, production was approximately 1% is subject lease surface rights from the are used to transport the pellets shortened in the mid-1950 to to mining leases (being leased Qikiqtani Inuit Association (“QIA”), to Indiana Harbor. The Minorca low grade magnetic taconite claims under the Nunavut Mining another Inuit organization taconite plant was constructed ores. The processing of this ore Regulations), 78% is covered by created pursuant to the NLCA, for and operated by Inland Steel involves a series of grinding and mineral claims (being recorded areas that covered the Company’s between 1977 and 1998 when magnetic separation stages to claims under the Nunavut Mining development infrastructure that it was purchased by then ISPAT remove the magnetite from the Regulations) and the rest by is dominantly located on Inuit International, a predecessor silica. Electric power constitutes exploration rights. Owned Lands. company of ArcelorMittal. the main source of energy for both Minorca and Hibbing and Baffinland’s mineral properties Baffinland’s infrastructure (in The Hibbing Taconite Company is provided from the Minnesota include three mining leases which it has invested close holds mineral rights over 8,009 state power grid. granted by the Government of to $800 million) includes the acres in 35 contiguous mineral Canada. These properties are mine and quarries, a port and leases, is located north of Hibbing ArcelorMittal Mexico Mining classified in numbered deposits. ship-loading system, an airport, with a processing facility six Assets Deposit No. 1 is located on several lodging complexes, kilometers from Hibbing in Mining Lease L-2484 at the Mary fuel farms, power plants, a the northeast of Minnesota ArcelorMittal Mexico operates River site, and is currently in 100 kilometer (60 mile) road, accessible by road and rail. The three iron ore mines in Mexico, production. Deposit Nos. 2 and maintenance buildings and Hibbing operations are jointly the El Volcan and Las Truchas 3 are located on Mining Lease warehouses. In 2016, Baffinland owned by ArcelorMittal USA, mines, and, through a joint L-2485, also at the Mary River produced 3.2 million tonnes of Cliffs Natural Resources (23.0%) operation with Ternium S.A., the site, but production efforts are iron ore. Baffinland’s iron ore is and U.S. Steel (14.7%), and Peña Colorada mine. focused at Deposit No. 1. Deposit shipped mainly to customers in Cliffs Natural Resources is the No. 4 is located on Mining Europe. operator of the joint venture Peña Colorada Lease L-2483, approximately 27 mine and processing facilities. kilometers northwest of Deposit ArcelorMittal USA Iron Ore Mines The Hibbing Taconite Company Consorcio Minero Benito Juarez No. 1. These three mining leases controls through leases all of Peña Colorada, S.A. de C.V. (Peña were initially granted in 1971 ArcelorMittal USA operates an the mineral and surface rights Colorada) holds mineral rights to cover a total area of 1,593 iron ore mine through its wholly- needed to mine and process its over 99,188 acres located at hectares (3,937 acres). The owned subsidiary ArcelorMittal estimated 2016 iron ore reserves. about 60 kilometers by highway leases were renewed by the Minorca and owns a majority The expiration dates of the to the northeast of the port city Government of Canada in 2013 stake in Hibbing Taconite mining leases range from 2017 of Manzanillo, in the province of for an additional period of 21 Company, which is managed by to 2056. These leases can be Minatitlán in the northwestern years and can be renewed in Cliffs Natural Resources. renewed through negotiations part of the State of Colima, perpetuity, subject to meeting with the mineral owners. The Mexico. ArcelorMittal owns certain renewal conditions, ArcelorMittal Minorca holds operations consist of open pit 50% of Peña Colorada Ltd., and customarily contained in federal mineral rights on 2800 acres mining, crushing, concentrating Ternium S.A. owns the other 50% mining leases in Canada. and in addition to this owns and pelletizing. The finished of the company. 13,210 acres and leases 550 pellets are then transported Seven additional deposits, acres of additional land to by rail to the port of Allouez at Peña Colorada operates an referred to as Deposit Nos. 5 support the operation located Superior, Wisconsin, a distance open pit mine as well as a through 11, are located within approximately three kilometers of 130 kilometers and then over concentrating facility and a our mineral tenures. Baffinland north of the town of Virginia the Great Lakes by lake vessels two-line pelletizing facility. The also holds exploration rights in in the northeast of Minnesota to ArcelorMittal’s integrated beneficiation plant is located at the north Baffin Island region. accessible by road and rail. steelmaking plants, principally the mine, whereas the pelletizing Its mining tenures consist of The Minorca Mine controls Burns Harbor. The Hibbing plant is located in Manzanillo. the three mining leases (being through leases all the mineral Taconite Company began Major processing facilities include mining leases of surveyed and surface rights needed to operating in the third quarter a primary crusher, a dry cobbing mineral claims granted by the mine and process its estimated of 1976. The mine produced 8.3 plant, one autogenous mill, Government of Canada and 2016 iron ore reserves. The million metric tonnes of taconite horizontal and vertical ball mills currently administered under expiration dates of the mining pellets in 2016 (of which 62.3% is and several stages of magnetic the Nunavut, formerly Canadian, leases range from 2035 to 2041. ArcelorMittal’s share). separation. The concentrate is Mining Regulations), mineral ArcelorMittal Minorca operates sent as a pulp through a pipeline 172 Mining

from the mineral processing reserves. ArcelorMittal operates the El Volcan operations were The Las Truchas deposits consist plant. Peña Colorada has a concentrating facility along temporarily suspended due to of massive concentrations operated since 1974. The Peña with an open pit mine and a pre- weak market conditions. The El of magnetite of irregular Colorada mine receives electrical concentration facility at the mine Volcan operations will resume in morphology. The main Las power from the Comisión Federal site. The mine site is accessible the first quarter of 2017 for the Truchas deposits occur along de Electricidad (CFE), which is a by a 90-kilometer road from remainder of 2017, as a result about seven kilometers long and federal government company the city of Obregon, where the of a revised mine plan in light about two kilometers wide. The that serves the entire country. concentrator is located. of improved price conditions. Las Truchas mineral deposits have The iron mineralization includes been classified as hydrothermal Government concessions are Government concessions are magnetite rich skarn associated deposits, which may have granted by the Mexican federal granted by the Mexican federal to the intrusion and extrusion of originated from injections of government for a period of 50 government for a period of 50 magmas rich in iron and formed late stage-plutonic-activity years and are renewable. The years and are renewable. The in a volcanic environment. through older sedimentary expiration dates of the current expiration dates of the current rocks. The mineralization of the mining concessions range from mining concessions range from Las Truchas Las Truchas iron deposits occurs 2021 to 2062. 2055 to 2061. in disseminated and irregular ArcelorMittal holds mineral massive concentrations of The Peña Colorada pelletizing The pre-concentration facilities rights over 52,473 hectares. magnetite within metamorphic facility produced 2.9 million at the mine include one The Las Truchas mine is located rocks and skarns. The tonnes of pellets in 2016. Both primary crusher, one secondary approximately 27 kilometers mineralization also occurs as magnetite concentrate and iron crusher, a dry cobbing high southeast of the town of fillings of faults, breccia zones, ore pellets are shipped from intensity magnetic pulley and Lázaro Cárdenas in the State and fractures. Manzanillo to ArcelorMittal three tertiary crushers. The of Michoacán, Mexico. The Las Mexico, as well as to Ternium’s concentration plant includes Truchas operations are accessible ArcelorMittal Brasil—Andrade steel plants, by ship and by rail. two ball mills on line, a magnetic by public highway and control Mine separation circuit, flotation all the mineral rights and surface In 2014, Peña Colorada started systems, a belt conveyor filter rights needed to mine and ArcelorMittal Brasil holds mineral an investment project that and a disposal area for tails. The process its estimated 2016 iron rights over the central claims is focused on the increase of major port installations include ore reserves. of the Andrade deposit of over the capacity of crushing and a tippler for railroad cars, a 28,712,100 square meters located grinding systems to restore the conveyor, transfer towers and Government concessions are approximately 80 kilometers concentrate production level to two ship loading systems. The granted by the Mexican federal east of Belo Horizonte in the 4.5 million tonnes per year. The mine exploitation and crushing government for a period of 50 Minas Gerais State of Brazil. new plants began operations in operations and all transport years and are renewable. The ArcelorMittal’s operations control December 2016. The ramp up activities are performed by expiration dates of the current all of the mineral rights and period will be carried out during contractors. The concentrate and mining concessions range from surface rights needed to mine the first quarter of 2017, reaching port operations are operated with 2044 to 2059. and process its estimated 2016 full capacity in the first half of ArcelorMittal’s own resources. iron ore reserves. ArcelorMittal 2017. The concentrate is transported by The Las Truchas mine is an operates an open pit mine and rail to the Pacific port of Guaymas integrated iron ore operation. a crushing facility. The mine site Peña Colorada is a complex and then shipped to the steel It began operating in 1976 is accessible by 110 kilometers polyphase iron ore deposit. plant in Lázaro Cárdenas or as a government enterprise of public highway from Belo The iron mineralization at Peña exported. The mining operation (Sicartsa), and its mining Horizonte. Power is mostly Colorada consists of banded uses two Caterpillar 3516B activities consist of an open pit generated from hydroelectric to massive concentrations electric generators in continuous mine exploitation, crushing, power plants and supplied by of magnetite within breccia operation, with one generator dry cobbing preconcentrate CEMIG, an open capital company zones and results from several operating 24 hours per day at and concentration plant. The controlled by the Government of magmatic, metamorphic and an average consumption of 540 aggregate 2016 production of the State of Minas Gerais. hydrothermal mineralization kilowatt hours while the second concentrate, lumps and fines stages with associated skarns, generator is on standby. The totaled 1.4 million tonnes. The Companhia Siderurgica Belgo- dykes and late faults sectioning concentration facility uses electric concentrator includes one Mineira (“CSBM”) initiated mining the entire deposit. power from the national grid. primary crusher, two secondary operations at the property in crushers and three tertiary 1944 in order to facilitate the El Volcan The El Volcan mine concession crushers, one ball mill and one supply of ore to its steel plant in was bought from the Sonora bar mill and two wet magnetic Joao Monlevade. The mine was ArcelorMittal holds mineral rights provincial government in separation circuits. The electrical managed by CSBM until 2000. In over 1,053 hectares to support 2004, followed by exploration energy supplier for the Las 2000, Vale acquired the property, its El Volcan operations located of the property in 2005. The Truchas mine is a state-owned although the mine continued to approximately 68 kilometers development of the mine started company, Comisión Federal be operated by CSBM until Vale northwest of the city of Obregon in 2007. Mining operations were de Electricidad (CFE). The entered into a 40-year lease for and 250 kilometers from the halted during the 2008-2009 concentrated ore is pumped the Andrade mineral rights in Guaymas port facility in the state crisis and on several occasions from the mine site through a 2004 (subject to the condition of Sonora, Mexico. The El Volcan due to structural problems in the 26-kilometer slurry pipeline to that the supply to CSBM would operations control all of the crushing facilities. Operations the steel plant facility in Lázaro be assured). In November 2009, mineral rights and surface rights resumed without interruption Cárdenas. Vale returned the Andrade mine needed to mine and process from 2010 until October 2015. to CSBM, which then transferred its estimated 2016 iron ore In the fourth quarter of 2015, it to ArcelorMittal. In 2016, the Mining 173

Andrade mine produced 1.5 property from London Mining, The Omarska deposit is Rih underground mine in 1933. million tonnes of sinter feed. An ArcelorMittal has operated composed of two ore bodies: ArcelorMittal acquired the increase of the mine’s production the mine since 2008. In 2016, Jezero and Buvac. The Jezero operations in 2005. capacity to 3.5 million tonnes per ArcelorMittal Mineração Serra open pit began operating in 1983 year of sinter feed was completed Azul produced 1.6 million tonnes and, following an interruption in The expiration of the agreements in 2012. In 2013 a cross road of lumps and sinter fines. production during the Bosnian on the subsoil use conditions was built in order to improve civil war in the 1990s, production and the subsoil use permits shipments to the local Brazilian Both the Andrade and Serra resumed in 2004. range from 2017 to 2021, while market. Azul mines are located in the the expiration of the land lease Iron Quadrangle (Quadrilatero However, since 2011, ore has agreements ranges from 2060 to ArcelorMittal Mineração Serra Ferrifero), a widely-explored and only been produced at the Buvac 2061. Azul mined region. The mineralization pit. The Buvac pit was opened occurs as Itabirites, banded in 2008 and is located within The iron ore extracted from ArcelorMittal Mineração Serra hematite-silica rocks, with a carboniferous clastic and the Kryvyi Rih open cast is first Azul holds mineral rights over varying weathering degrees. carbonates sediments containing processed at the mine site the central and east claims of While the Serra Azul ore reserve iron mineralization in the form through primary crushing. After the Serra Azul deposit over estimates are constituted of rich of beds concordant with host initial processing, the product 5,505,400 square meters, located friable Itabirites requiring some rocks or in the form of massive is loaded on a rail-loading approximately 50 kilometers beneficiation, the Andrade ore irregular blocks. The genesis facility and transported to the southwest of the town of Belo reserve estimates are dominated of this deposit is attributed to crushing plant. The concentrator Horizonte in the Minas Gerais by directly shippable hematite hydrothermal replacement and production process includes State of Brazil. ArcelorMittal’s ore. syn-sedimentary processes. crushing, classification, magnetic operations control all of the The Buvac ore body is mainly separation and filtering. The mineral rights and surface rights ArcelorMittal Prijedor composed of limonite-goethite iron ore extracted from the needed to mine and process its mineralization, which was formed Kryvyi Rih’s underground mine estimated 2016 iron ore reserves. ArcelorMittal Prijedor, during weathering oxidization of by a modified sub-level caving ArcelorMittal operates an open located near Prijedor in the the primary siderite bodies. method is crushed on surface pit mine and a concentrating Republic of Srpska in Bosnia and transported by rail to the facility. The mine site is accessible and Herzegovina, is an iron ArcelorMittal Kryvyi Rih steel plant. The main consumer by 80 kilometers of public ore mining operation that is of the sinter and concentrate highway from Belo Horizonte. 51% owned by ArcelorMittal. ArcelorMittal Kryvyi Rih (“AMKR”) products is the ArcelorMittal ArcelorMittal Prijedor holds holds mineral rights to support its Kryvyi Rih steel plant, with some In addition to the open pit mine, mineral rights over 2,000 hectares operations located roughly within concentrate being shipped to processing operations consist of to support ArcelorMittal’s steel- the limits of the city of Kryvyi other ArcelorMittal affiliates in a crushing facility and a three-line making operations located Rih, 150 kilometers southwest Eastern Europe, as well as to third concentration facility including approximately 243 kilometers of Dnepropetrovsk, Ukraine parties. The iron mineralization screening, magnetic separation, south of Prijedor in northern over 1,301 hectares. AMKR’s is hosted by early Proterozoic spirals separators and jigging. Bosnia (Zenica). ArcelorMittal operations control all of the rocks containing seven altered Production is transported either Prijedor has no reason to believe mineral rights and surface rights ferruginous quartzite strata by truck for local clients of that it will not maintain the needed to mine and process its with shale layers. The major lump, or by truck to two railway operating licenses required to estimated 2016 iron ore reserves. iron ore bearing units in the terminals located 35 and 50 continue operations and process AMKR operates a concentrating open pit mines have carbonate- kilometers, respectively, from its estimated 2016 iron ore facility, along with two open silicate-magnetite composition. the mine site for selling to local reserves. The operation is in close pit and one underground iron In addition, oxidized quartzite clients of sinter feed or for export proximity to long-established ore mines. The iron ore deposits is mined simultaneously with through third-party port facilities public roads. The production are located within the southern primary ore but cannot be located in the Rio de Janeiro process includes crushing, with part of the Krivorozhsky iron- processed at present and is State. Sinter feed production is hydro-cyclones and magnetic ore basin. Access to the mines stored separately for future shipped to ArcelorMittal’s plants separation at the concentration is via public roads, which are possible processing. Only the in Europe as well as to the local plant. The plant is close to the connected by a paved highway magnetite mineralization is Brazilian market including the mine site, and materials are to Dnepropetrovsk. The area included in the 2016 open pit ArcelorMittal Brasil integrated transported through a conveyor. is well served by rail. Power iron ore reserve estimates. The plants. The Compania Energética Power is supplied from the is supplied by the Ukraine underground mine is hosted de Minas Gerais (CEMIG) national grid through a local government and is generated by a ferruginous quartzite with supplies power through a 13,800 power distribution company. from a mix of nuclear, gas and martite and jaspilite. volt line from Mateus Leme, In 2016, ArcelorMittal Prijedor coal-fired power stations. AMKR located 20 kilometers from the produced 1.8 million tonnes of has two iron ore mines: an open ArcelorMittal Temirtau (Lisakovsk, mine. The electricity is locally aggregated lumps and fines. pit mine feeding a concentration Kentobe, Atasu, Atansore - iron transformed into 380 volts by six plant that produced 9.0 million ore) transformers spread around the In 1916, Austrian mining tonnes of concentrate in 2016, operation. Minas Itatiaucu (MIL) companies established the first known as the Kryvyi Rih open ArcelorMittal Temirtau has four initiated mining operations at industrial production of iron ore cast, and an underground mine iron ore mining operations the property in 1946. In 2007, in the Prijedor area. The mines with production of 0.9 million in Kazakhstan. The mines are London Mining Brazil Mineracao were nationalized in the 1950s, tonnes of lump and sinter feed Lisakovsk, Kentobe, Atasu Ltda (London Mining) purchased and were then owned by Iron in 2016, known as the Kryvyi Rih and Atansore. The four mines the mineral rights from MIL. Mines Luubija Company until underground mine. Operations are connected by all-weather Following the acquisition of the Mittal Steel acquired 51% of the began at the Kryvyi Rih open roads and railways. Dispatch company in 2004. cast in 1959 and at the Kryvyi 174 Mining

of ore from these mines to the kilometers south/southwest Development Agreement mining operations at Tokadeh, ArcelorMittal steel plant is by from Temirtau with production (“MDA”) in 2005 with the followed by a first shipment of railway. ArcelorMittal Termitau’s of 0.8 million tonnes of lump and Government of Liberia (“GOL”) iron ore in September 2011. operations control all of the fines in 2016. The mine began that is valid for 25 years and mineral rights and surface rights operating in 1956 with open renewable for an additional The Nimba Itabirites is a 250 to needed to mine and process its pit exploitation of near surface 25-year period. The MDA covers 450 meter thick recrystallized estimated 2016 iron ore reserves. reserves. Surface operations three deposits to support AML’s iron formation. Although ended in 1980. Underground operations located approximately the iron deposits at Tokadeh, Lisakovsk is an open pit operation operations commenced in 300 kilometers northeast of Gangra and Yuelliton fit the located in northwest Kazakhstan 1976. ArcelorMittal acquired Monrovia, Liberia over 516 square general definition of Itabirite about 1,100 kilometers from the mine in 2003. The existing kilometers. These three deposits as laminated metamorphosed Temirtau, with production of 0.7 subsoil agreement expires in are grouped under the name oxide-facies iron formation, they million tonnes of concentrate 2026. Processing comprises of “Western Range Project”, which are of lower iron grade than the in 2016. The mine was initially crushing and wet jigging. The includes the Tokadeh, Gangra ore previously mined at Mount commissioned in 1976 and was Atasu mine is hosted by the and Yuelliton deposits. In addition Nimba. Tropical weathering has acquired by ArcelorMittal in 1999. West Karazhal deposit, which to the rights to explore and mine caused the decomposition of the The existing subsoil agreement is a primary magnetite ore iron ore, the GOL has granted the rock forming minerals resulting expires in 2020. The production with associated manganese right to develop, use, operate and in enrichment in the iron content process comprises crushing, mineralization. Studies have maintain the Buchanan to Yekepa that is sufficient to support a DSO screening, grinding, wet jigging indicated that the deposit could railroad and the Buchanan port. A operation. and wet magnetic separation. The have a sedimentary-volcanogenic phased approach has been taken iron mineralization at Lisakovsk origin caused by underwater to establish the final project Coal occurs as oolite containing hydrothermal activity. The mine configuration. Currently only high mainly hygoethite and goethite. receives electric power from grade ore reserves of oxidized ArcelorMittal Princeton The phosphorous content in the the Prometei-2003 grid via iron ore (DSO) are mined. This mineralization limits its utilization NovoKarazhal substation. ore only requires crushing and The ArcelorMittal Princeton in the steel-making process. At screening to make it suitable for (“AMP”) properties are located in Lisakovsk, natural gas is supplied Atansore is an open pit operation export. The materials-handling McDowell County, West Virginia by KazTransGazAimak JSC and located about 500 kilometers operation consists of stockyards and Tazewell County, Virginia, transmitted through the local northeast of Temirtau with at both the mine and port areas, approximately 30 miles west grid. Electric power for the other production of 0.5 million tonnes linked by a 250-kilometer single of the city of Princeton, West facilities is supplied by Prometey of concentrate and fines in 2016. track railway running from Virginia, where AMP’s corporate 2003 and Sarbai MES KEGOK. The mining lease was obtained Tokadeh to the port of Buchanan. office is located. The properties by ArcelorMittal in 2004. The Production in 2016 was at 2.1 consist of two operating areas: Kentobe is an open pit operation, existing subsoil agreement million tonnes. Drilling for DSO the Low Vol operations and the initially started in 1994 and expires in 2029. The Atansor orebody extensions commenced Mid Vol operations, which are acquired by ArcelorMittal deposit is located within skarn in late 2015 and in 2016 the situated south of U.S. Route in 2001, located about 300 zones related to a volcanic operation has been right sized to 52. High-voltage power lines, kilometers southeast of Temirtau, intrusion that can be traced 3 million tonnes to focus on its typically 12,500 volts, deliver with production of 0.5 million for more than 1.5 kilometers. ‘natural’ Atlantic markets. power to work stations where tonnes of concentrate in 2016. The mineralization includes transformers reduce voltage for Clearance for extension of the both martitic oxidized ore and The power for the current Liberia specific equipment requirements. existing subsoil agreement until primary magnetite ore. A new DSO operations is obtained 2026 was given by Kazakhstan concentrator is processing the from a combination of diesel The larger Low Vol operations Ministry of innovation and magnetite portion of the ore and electric sources. Planning are located in McDowell development and signing of by simple dry crushing and and construction of the project County, West Virginia, near the addendum to the agreement magnetic separation while the were commenced in 1960 by a communities of Northfork, is in process. Ore processing is low-grade oxidized portion of group of Swedish companies, Keystone, Eckman, Gary, Berwind, performed by crushing and dry the ore is sold as fines to a third which ultimately became the and War. The Eckman Plant, Dans magnetic separation, producing party for further beneficiation. At Liberian American-Swedish Branch Loadout, Eckman 2 and coarse concentrate. The Kentobe the Atansore operations, electric Minerals Company (“LAMCO”), Redhawk 1 surface mines are mine is located in the Balkhash power is provided from the and production commenced also located here, as well as the metallogenic province hosting Kokshetauenergo center. on the Nimba deposit in 1963. following deep mines: XMV Mine numerous volcanic, sedimentary Production reached a peak of Nos. 32, 35, 39, 42 and 43. and hydrothermal deposits. ArcelorMittal Liberia 12 million metric tonnes in 1974 The mineralization at Kentobe but subsequently declined due The Mid Vol operations are in includes two types of iron ore: ArcelorMittal Liberia Holdings to market conditions. Production southeastern McDowell County, oxidized and primary magnetite. Limited (“AMLH”), through started at Mt. Tokadeh in 1985 to West Virginia and northwestern The magnetite mineralization its agent (and subsidiary) extend the life of the Nimba ore Tazewell County, Virginia. constitutes the vast majority of ArcelorMittal Liberia, has been bodies to 1992 when operations The nearest communities are the 2016 estimated ore reserves. mining ‘direct shipping ore, ceased due to the Liberian civil Horsepen and Abbs Valley, Electric power is supplied to or DSO’ from the first of three war. In 2005, Mittal Steel won a Virginia as well as Anawalt, West the Kentobe operations by deposits in the Mt. Tokadeh, bid to resume operations and Virginia. Karaganda Energosbyt LLP. Mt. Gangra and Mt. Yuelliton signed the MDA with the GOL. mountain ranges in northern Rehabilitation work on the The property has a long history Atasu is an underground mine Nimba, Liberia since June railway started in 2008 and, in of coal mining, mostly by operation located about 400 2011. AML signed a Mineral June 2011, ArcelorMittal started predecessors in title to AMP. Mining 175

Significant underground mining and Cainozoic formations. Due Saranskaya mines receive energy The Tentekskaya mine began of some of the deeper coal seams to structural peculiarities, the from public district networks operations in 1979. The nearest on the properties have occurred, coal basin is divided into three through transforming substations community is Shakhtinsk. notably the Pocahontas no. 3 geology-based mining areas: of the Karagandaenergo Karaganda City is located and no. 4 seams. In addition, Karagandinskiy, Sherubay- Company. approximately 50 kilometers a substantial amount of the Nurinskiy and Tentekskiy. to the northeast. The railway thicker coal outcrops have been The Abayskaya mine began station MPS-Karabas is located previously contour mined, The mines are located in an operations in 1961. In 1996, it approximately 35 kilometers to providing access for highwall area with well-developed was merged with the Kalinina the southeast. mining and on-bench storage of infrastructure around the regional mine. The nearest communities excess spoil from future, larger- center of Karaganda city. Within are Saran, Abay and Shakhtinsk, Abayskaya, Shakhtinskaya, Lenina, scale surface mining. AMP was a distance of 10 to 60 kilometers which are located 18 kilometers to Tentekskaya and Kazakhstanskaya created in 2008 when the Mid-Vol are the following satellite towns: the northeast, 15 kilometers to the mines receive energy from high- Coal Group and the Concept Shakhtinsk, Saran and Abay, as southeast and 20 kilometers to voltage lines of Karaganda. Mining Group were integrated. well as Shakhan and Aktas. All the west, respectively. Karaganda The properties are located in mines are connected to the main City is located approximately 30 The subsoil use contract and the Pocahontas Coalfields of railway, and coal is transported kilometers to the northeast. license (all coal mines in Temirtau) the Central Appalachian Coal by railway to the coal wash plants will expire in 2022. Total land area Basin. The Carboniferous age and power stations. The Kazakhstanskaya mine under mineral rights is 286 square coal deposits are situated in the began operations in 1969. The kilometers. Pottsville Group, New River and The Kostenko mine began nearest community is Shakhtinsk. Pocahontas Formations. The operations in 1934 and Karaganda City is located The mines produce primarily rock strata, including the coal merged with the neighboring approximately 50 kilometers coking coal used in steel-making deposits, are sedimentary rocks Stakhanovskaya mine in 1998. to the northeast. The railway at ArcelorMittal Temirtau as well formed by alluvial, fluvial, and The field of Kostenko mine falls station at MPS-Karabas is located as thermal coal for ArcelorMittal deltaic sediments deposited in a within the Oktyabrskiy district of approximately 35 kilometers to Temirtau’s power plants. For shallow, subsiding basin. The most Karaganda city. the southeast. beneficiation of coking coal, two common rock types are various washeries are operated. Surplus types of sandstone and shale. The Kuzembaeva mine was The Lenina mine was put in coal is supplied to ArcelorMittal The coal deposits are typically in established in 1998. The nearest operation in 1964 and was Kryvyi Rih in Ukraine, and to relatively thin coal beds, one to communities are Saran, Abay and subsequently merged with external customers in Russia and five feet thick. Shakhtinsk, which are located Naklonnaya no. 1/2 mine in China. In 2016, the Karaganda 18 kilometers to the northeast, 1968. The nearest community Coal Mines produced 4.5 million The combined production of the 15 kilometers to the southeast is Shakhtinsk, located seven tonnes of metallurgical coal and mines in 2016 was 1.8 million and 12 kilometers to the west, kilometers to the southeast, approximately 1.0 million tonnes tonnes of washed and directly respectively. The eastern part of and Karaganda City, is located was consumed by the Temirtau shippable coal. the mine falls within the center of 50 kilometers to the northeast. steel operations. Karaganda City. The railway station MPS-Karabas ArcelorMittal Temirtau (Karaganda is located 35 kilometers to the Capital Expenditure Projects Coal Mines) The Saranskaya mine began southeast. operations in 1955. It merged The following table summarizes ArcelorMittal Temirtau has eight with the Sokurskaya mine in mid- The Shakhtinskaya mine began the Company’s principal underground coal mines and 1997 and the Aktasskaya mine in operations in 1973. The nearest investment projects involving two coal preparation plants (CPP 1998. The nearest communities community is Shakhtinsk, which significant capital expenditure “Vostochnaya” and Temirtau are Saran, Abay and Shakhtinsk, is located 10 kilometers to the completed in 2016 and those that Washery-2). The coal mines of which are located 18 kilometers to southeast, and Shakhan, which are currently ongoing. ArcelorMittal Temirtau are located the northeast, 15 kilometers to the is located seven kilometers to in the Karaganda Coal Basin. The southeast and 12 kilometers to the north. Saran is located 18 basin is more than 3,000 square the west, respectively. Karaganda kilometers to the east. Karaganda kilometers and was formed City is located approximately City is located approximately 35 by strata of Upper Devonian 35 kilometers to the northeast. kilometers to the east. and Carbonic ages, Mesozoic The Kostenko, Kuzembaeva and

Ongoing Projects 1 Region Site Project) Capacity / particulars Forecast completion Increase production capacity to 15 million Mining Liberia Phase 2 expansion project tonnes/year Under review 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 Liberia is considering moving ore extraction from its depleting DSO (direct shipping ore) deposit at Tokadeh to the nearby, low strip ratio and higher grade DSO Gangra deposit by Q3 2017. Following a period of exploration cessation caused by the onset of Ebola, ArcelorMittal Liberia recommenced drilling for orebody extensions in late 2015. During 2016 the operation at Tokadeh was right sized to 3 million tonnes per annum (“Mtpa“) to focus on its ‘natural’ Atlantic markets. The nearby Gangra deposit is now the preferred next development in a staged approach as opposed to the originally planned phase 2 step up to 15Mtpa of concentrated sinter fine ore that was delayed in August 2014 due to the declaration of force majeure by contractors following the Ebola virus outbreak, and then reassessed following rapid iron ore price declines over the period since. Accordingly, the Company is finalizing a feasibility study on Gangra. ArcelorMittal remains committed to Liberia where it operates a full value chain of mine, rail and port and where it has been operating the mine on a DSO basis since 2011. The Company believes that ArcelorMittal Liberia has a competitive source of iron ore products for the international market based on continuing DSO mining and then moving to a long-term sinter feed and concentration phase. 176 Mining

Reserves and resources (iron ore so closely and the geologic based on detailed and reliable and mining recoveries, with no and coal) character is so well defined that exploration and testing adjustments made for metal size, shape, depth and mineral information gathered through losses due to processing. The Introduction content of reserves are well- appropriate techniques from mineral resource estimates are established. locations such as outcrops, reported exclusive of reserves ArcelorMittal has both iron ore trenches, pits, workings and drill (i.e. are in addition to ore reserve and metallurgical coal reserves. • Probable reserves are reserves for holes that are spaced closely estimates) and are of in-situ wet The Company’s iron ore mining which quantity and grade and/ enough for geological and grade metric tonnage material prior to operations are located in the or quality are computed from continuity to be reasonably adjustments for mining recovery United States, Canada, Mexico, information similar to that used assumed. and mining dilution factors. Brazil, Liberia, Bosnia, Ukraine for proven reserves, but the sites and Kazakhstan. In Canada, the for inspection, sampling and • An ‘inferred mineral resource’ is For a description of risks relating Company commenced mining measurement are farther apart that part of a mineral resource to reserves and resource the greenfield operation on Baffin or are otherwise less adequately for which quantity and grade or estimates, see the risk factor Island through a joint venture. spaced. The degree of assurance, quality can be estimated on the entitled ‘ArcelorMittal’s reserve The Company’s metallurgical coal although lower than that for basis of geological evidence and and resource estimates may mining operations are located in proven reserves, is high enough limited sampling and reasonably materially differ from mineral the United States and Kazakhstan. to assume continuity between assumed, but not verified, quantities that it may be able to points of observation. geological and grade continuity. actually recover; ArcelorMittal’s The estimates of proven and The estimate is based on limited estimates of mine life may probable ore reserves and mineral • The mineral resource estimates information and sampling prove inaccurate; and market resources at the Company’s mines constitute the part of a mineral gathered through appropriate price fluctuations and changes and projects and the estimates deposit that have the potential techniques from locations such in operating and capital costs of the mine life included in to be economically and as outcrops, trenches, pits, may render certain ore reserves this annual report have been legally extracted or produced workings and drill holes. uneconomical to mine’ (more prepared by ArcelorMittal’s at the time of the resource details page 163). experienced engineers and determination. The potential for In Eastern Europe (Bosnia) and the geologists. Marshall Miller & economic viability is established Commonwealth of Independent The demonstration of economic Associate, Inc. (formerly Cardno, through high level and States (CIS), ArcelorMittal viability is established through Inc.) prepared the 2014 estimates conceptual engineering studies. has conducted in-house and the application of a life of mine of coal reserves for underground independent reconciliations of plan for each operation or project and open pit operations at • A ‘measured mineral resource’ is ore reserve and mineral resource providing a positive net present ArcelorMittal Princeton which that part of a mineral resource estimate classifications based on value on a cash-forward looking have been depleted for the 2016 for which quantity, grade Industry Guide 7, CIM Guidelines basis. Economic viability is resource and reserve estimate. or quality, densities, shape, for NI 43-101 and standards demonstrated using forecasts of The reserves and resources for and physical characteristics used by the State Committee operating and capital costs based Las Truchas were estimated by are so well established that on reserves, known as the GKZ on historical performance, with Gustavson Associates. The reserve they can be estimated with in the CIS. The GKZ constitutes forward adjustments based on estimates were prepared in confidence sufficient to allow the legal framework for reserve planned process improvements, compliance with the requirements the appropriate application and resource reporting in several changes in production volumes of USA Securities and Exchange of technical and economic former Soviet Union countries and in fixed and variable Commission’s (“SEC”) Industry parameters, to support where ArcelorMittal operates proportions of costs, and Guide 7. The reserves and the production planning and mines. On the basis of these forecasted fluctuations in costs of mineral resource estimates were evaluation of the economic reconciliations, ArcelorMittal’s raw material, supplies, energy and also prepared in accordance viability of the deposit. The mineral resources have been wages. with the Canadian Institute of estimate is based on detailed classified as measured for Mining and Metallurgy (CIM) Best and reliable exploration, categories A and B, indicated Detailed independent verifications Practice Guidelines and Standard sampling and testing for category C1 and inferred for of the methods and procedures Definitions for Canadian National information gathered through category C2. Ore reserves have used are conducted on a regular Instrument 43-101 (for all its appropriate techniques from been estimated by applying mine basis by external consultants operations and projects), under locations such as outcrops, planning, technical and economic and sites are reviewed on a which: trenches, pits, workings and assessments defined as categories rotating basis; in 2014, the year- drill holes that are spaced A, B and C1 only according to end 2013 ore reserve estimates • Reserves are the part of a closely enough to confirm both the GKZ standards. In general, were independently audited mineral deposit that could geological and grade continuity. provided Guide 7’s economic and validated by Roscoe Postle be economically and legally criteria for reserves are met (which Associates for the Company’s extracted or produced at • An ‘indicated mineral resource’ is the case here), A+B is equivalent mines in Liberia and in Canada the time of the reserve is that part of a mineral resource to ‘proven’ and C1 is equivalent to including the joint venture determination. for which quantity, grade or ‘probable’. Baffinland and no material quality, densities, shape and changes to the 2013 year-end • Proven reserves are reserves for physical characteristics, can The ore reserve and mineral iron ore reserve estimates were which (a) quantity is computed be estimated with a level of resource estimates are updated recommended by them. In 2016, from dimensions revealed in confidence sufficient to allow annually in order to reflect new the 2015 year end iron ore reserve outcrops, trenches, working or the appropriate application geological information and estimates were independently drill holes; grade and/or quality of technical and economic current mine plan and business audited and validated by are computed from the results parameters, to support mine strategies. The Company’s Roscoe Postle Associates for the of detailed sampling; and (b) the planning and evaluation of reserve estimates are of in-situ Company’s Las Truchas and Peña sites for inspection, sampling the economic viability of material after adjustments for mines in Mexico, and no material and measurement are spaced the deposit. The estimate is mining depletion, mining losses changes to the 2015 year-end Mining 177

iron ore reserve estimates were some additional approvals remain operation to operation and during variability in the mineralization recommended. The 2016 year outstanding but where, based on the life of each operation in order at the selected cut-off grade, end reserve estimates for the the technical investigations the to optimize cash flow, return on the mining selectivity and the Kazakhstan coal operations were Company carries out as part of investments and the sustainability production rate and ability of the independently audited by SRK its mine planning process and its of the mining operations. operation to blend the different Consulting (UK) Limited. The final knowledge and experience of the Sustainability in turn depends on ore types that may occur within report has still not been issued approvals process, the Company expected future operating and each deposit. Proven iron ore by SRK but a preliminary draft expects that such approvals will capital costs. The reserve base can reserve and measured mineral confirmed the estimated coal be obtained as part of the normal vary from year to year due to the resource estimates are based on quantities within planned areas of course of business and within the revision of mine plans in response drill hole spacing ranging from extraction. timeframe required by the current to market and operational 25m x 25m to 100m x 100m, life of mine schedule. conditions, in particular market and probable iron ore reserve ArcelorMittal owns less than 100% price. See the risk factor entitled and indicated mineral resource of certain mining operations; The reported iron ore and “ArcelorMittal’s reserve estimates estimates are based on drill hole reserve and resource estimates coal reserves contained in this may materially differ from mineral spacing ranging from 50m x 50m have not been adjusted to reflect annual report do not exceed the quantities that it may be able to to 300m x 300m. Inferred mineral ownership interests and therefore quantities that the Company actually recover; ArcelorMittal’s resource estimates are based on reflect 100% of the reserves and estimates could be extracted estimates of mine life may drill hole spacing ranging from resources of each mine. Please see economically if future prices prove inaccurate; and market 100m x 100m to 500m x 500m. the table above under “Mining” were at similar levels to the price fluctuations and changes for the ownership interest of average contracted price for the in operating and capital costs ArcelorMittal in each mine. All three years ended December 31, may render certain ore reserves of the reserve figures presented 2016. The average iron ore spot uneconomical to mine”. represent estimates at December reference price for the last three 31, 2016 (unless otherwise stated). years (2014–2016) was $70.29/ Tonnage and grade estimates are dmt CFR China, 62% Fe, (PLATTS reported as Run of Mine. Tonnage Mine life is derived from the life Index) duly adjusted for quality, is reported on a wet metric basis. of mine plans and corresponds Fe content, logistics and other to the duration of the mine considerations. For the same Iron ore reserve and resource production scheduled from ore period, the average coal spot estimate reserve estimates only. reference price was $114.60/tonne FOB Australia, Hard Coking Coal The tables below detail The Company’s mineral leases are (FOB Australia HCC Peak Downs, ArcelorMittal’s estimated iron of sufficient duration (or convey a PLATTS Index). The Company ore reserves and resources as legal right to renew for sufficient establishes optimum design of December 31, 2016. The duration) to enable all ore and future operating cut-off classification of the iron ore reserves on the leased properties grade based on its forecast of reserve estimates as proven or to be mined in accordance with commodity prices and operating probable and of the iron ore current production schedules. Ore and sustaining capital costs. resource estimates as measured, reserves may include areas where The cut-off grade varies from indicated or inferred reflects the

As of December 31, 2016 As of December 31, 2015 Proven Ore Reserves Probable Ore Reserves Total Ore Reserves Total Ore Reserves Millions of Millions of Millions of Millions of Unit tonnes %Fe tonnes %Fe tonnes %Fe tonnes %Fe Canada (Excluding Baffinland) 1,989 28.2 67 26.2 2,056 28.1 2,140 28.6 Baffinland - Canada 272 66.0 102 65.3 374 65.8 377 65.8 Minorca - USA 113 23.7 5 22.7 118 23.7 126 23.5 Hibbing - USA 209 19.5 26 19.6 235 19.6 267 19.6 Mexico (Excluding Peña Colorada) 12 38.1 116 32.1 128 32.7 79 30.7 Peña Colorada - Mexico 125 21.7 119 20.8 244 21.3 229 21.7 Brazil 57 64.7 21 51.5 78 61.2 81 60.9 Liberia 5 52.0 486 48.0 491 48.1 494 48.2 Bosnia 5 45.5 14 46.2 19 46.0 21 45.8 Ukraine Open Pit 106 33.2 48 33.5 154 33.3 174 33.4 Ukraine Underground 22 53.7 - - 22 53.7 23 55.7 Kazakhstan Open Pit 30 37.3 238 39.5 268 39.2 271 39.3 Kazakhstan Underground - - 26 45.4 26 45.4 27 45.1 Total 4,213 34.8 4,309 34.9 178 Mining

As of December 31, 2016 As of December 31, 2015 Measured & Indicated resources Inferred resources Measured & Indicated resources Inferred resources Million Million Million Million Business units tonnes %Fe tonnes %Fe tonnes %Fe tonnes %Fe Canada (Excluding Baffinland) 3,588 30.0 1,849 29.5 3,588 30.0 1,850 29.5 Baffinland - Canada 54 65.5 545 66.2 54 65.6 545 66.2 Minorca - USA 339 22.2 7 22.2 339 22.3 7 22.2 Hibbing - USA 133 20.1 0 17.5 130 20.1 0 17.5 Mexico (Excluding Peña Colorada) 160 35.1 76 35.2 113 27.7 42 28.3 Peña Colorada - Mexico 170 23.9 1 16.5 176 25.8 1 16.8 Brazil 308 40.7 77 37.8 306 40.7 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 31.1 1 39.0 Ukraine Open Pit 507 33.4 0 0.0 507 33.4 0 0.0 Ukraine Underground 350 36.5 353 32.4 350 36.5 353 32.4 Kazakhstan Open Pit 828 33.8 5 48.0 828 33.8 5 48.4 Kazakhstan Underground 451 51.3 30 49.6 445 51.2 30 49.6 Total 6,934 32.7 5,155 37.6 6,882 32.6 5,122 37.9 Supplemental information on iron ore operations

The table below provides supplemental information on the producing mines. 2016 Run of Mine 2016 Saleable Estimated Production Production Mine Life Operations/Projects % Ownership In Operation Since (Million tonnes) * (Million tonnes) 1 (Years) 2 Canada (Excluding Baffinland) 85 1976 68.6 25.0 29 Baffinland - Canada 44.50 2014 3.3 3.2 16 Minorca - USA 100 1977 8.8 2.8 14 Hibbing - USA 62.3 1976 30.7 8.3 9 Mexico (Excluding Peña Colorada) 100 1976 4.4 1.4 19 Peña Colorada - Mexico 50 1974 10.8 2.9 16 Brazil 100 1944 4.2 3.1 43 Liberia 85 2011 2.0 2.1 20 Bosnia 51 2008 2.3 1.8 7 Ukraine Open Pit 95 1959 20.8 9.0 7 Ukraine Underground 95 1933 0.9 0.9 19 Kazakhstan Open Pit 100 1976 3.0 1.7 53 Kazakhstan Underground 100 1956 1.7 0.8 12 1 Saleable production is constituted of a mix of direct shipping ore, concentrate, pellet feed and pellet products which have an iron content of approximately 65% to 66%. Exceptions in 2016 included the direct shipping ore produced in Bosnia, Ukraine underground and the Kazakh mines 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 ore produced from Liberia had an average iron content of approximately 63% in 2016 while the sinter fines produced for external customers in Brazil from the Serra Azul operations averaged approximately 62% and the lumps averaged 60.5%. 2 The estimated mine life reported in this table corresponds to the duration of the production file of each operation based on the 2016 year- end 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 tonnage divided by the 2016 production. * Represents 100% of production.

Changes in iron ore reserve estimates: 2016 versus 2015

The Company’s iron ore reserve estimates have had a net decrease of 96 million metric tonnes of Run of Mine between December 31, 2015 and 2016. This decrease in reserves was mainly due to 162 million tonnes of mining depletion during 2016, the down grading of 15 million tonnes at the Company’s mine at ArcelorMittal Mines and Infrastructure Canada and a net upgrading of 26 million tonnes across the Peña Colorada operation. There was also a net increase of 53 million tonnes in reserves at Las Truchas due to the inclusion of some new areas and new drilling results. There were other minor re-evaluations of the Company’s ore reserves. The average Fe grade decreased by 0.1% on an absolute basis.

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 2016 versus 2015 measured and indicated mineral resource estimates have increased between December 31, 2016 and 2015 by 52 million metric tonnes mainly as a result of remodeling of orebody extension in Mexico (Las Truchas).

Inferred mineral resource estimates for iron ore have increased between December 31, 2016 and 2015 by 33 million metric tonnes mainly as result of remodeling of orebody extensions in Las Truchas. Mining 179

Metallurgical Coal Reserve and resource Estimates

The table below details ArcelorMittal’s estimated metallurgical coal reserve and resource estimates as of December 31, 2016. 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. Inferred coal resource estimates are based on drill hole spacing ranging from 200m x 200m to 2,000 x 2,000m.

As of December 31, 2016 As of December 31, 2015 Proven Coal Reserves Probable Coal Reserves Total Coal Reserves Total Coal Reserves Wet ROM Wet Wet Recoverable Wet Millions of Recoverable Millions of Recoverable Millions of Million Sulfur Millions of Recoverable Business Unit tonnes Million tonnes tonnes Million tonnes tonnes tonnes Ash (%) (%) Volatile (%) tonnes Million tonnes Princeton - USA 93 58 15 8 108 66 6.5 0.7 17.0 108 66 Karaganda - Kazakhstan 14 7 132 55 146 62 34.1 0.6 28.5 157 67 Total 254 128 19.9 0.6 22.6 265 133

As of December 31, 2016 As of December 31, 2015 Measured & Indicated Resources Inferred Resources Measured & Indicated Resources Inferred Resources ROM ROM Recoverable ROM Recoverable ROM Recoverable Millions of Recoverable Millions of Million Millions of Million Millions of Million Business Unit tonnes Million tonnes tonnes tonnes tonnes tonnes tonnes 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

2016 Run of Mine Production 2016 Wet Recoverable production Estimated Mine Life Operations/Projects % Ownership In Operation Since) (Million Tonnes) (Million Tonnes (Years)* Princeton - USA 100 1995 3 2 32 Karaganda - Kazakhstan 100 1934 10 5 10 * The estimated mine life reported in this table corresponds to the duration of the production file of each operation based on the 2016 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 2016 production.

Changes in Metallurgical Coal Changes in coal resource estimates Cautionary note concerning reserve and resource estimates: Reserve Estimates There were no changes in coal With regard to ArcelorMittal’s resource estimates between reported resources, investors are The Company’s metallurgical coal 2016 and 2015. The reporting cautioned not to assume that reserve estimates have decreased of recoverable measured any part or all of ArcelorMittal’s by 11 million tonnes of Run of and indicated coal resources estimated mineral deposits that Mine coal and 5 million tonnes in Kazakhstan excludes the constitute either ‘measured of recoverable coal between recoverable coal which in theory mineral resources’, ‘indicated December 31, 2015 and 2016 could be used for metallurgical mineral resources’ or ‘inferred mainly due to the annual mining applications but which is sold and mineral resources’ (calculated depletion of 11 million tonnes. used as thermal coal in practice in accordance with the CIM The reporting of recoverable by ArcelorMittal at its steel plant guidelines for Canadian National coal reserves from Kazakhstan facilities. Instrument 43-101) will ever be excludes the recoverable coal converted into reserves. There which in theory could be used is a particularly great deal of for metallurgical applications but uncertainty as to the existence of which is sold and used as thermal ‘inferred mineral resources’ as well coal in practice by ArcelorMittal at as with regard to their economic its steel plant facilities. and legal feasibility and it should not be assumed that all or part of an ‘inferred mineral resource’ will ever be upgraded to a higher category.